STEINHOFF INTERNATIONAL PROPOSED ACQUISITION OF PEPKOR HOLDINGS 25 NOVEMBER 2014 THE CREATION OF A LEADING GLOBAL DISCOUNT RETAIL PLATFORM
Presenters Markus Jooste Chief Executive Officer of Steinhoff International (“Steinhoff” or the “Company”) Joined Steinhoff in 1988 Pieter Erasmus Chief Executive Officer of Pepkor Holdings (“Pepkor”) Joined Pepkor in 1998 1
Agenda 1 Salient Terms of the Acquisition 2 Pepkor Overview 3 Steinhoff & Pepkor – Strategic Rationale 4 Key Transaction Terms and Timetable Overview 5 Q&A 2
SALIENT TERMS OF THE ACQUISITION MARKUS JOOSTE, CEO - STEINHOFF 3
Salient Terms of the Acquisition › Steinhoff to acquire 92.34% of the share capital of Pepkor from the Wiese group, Brait Mauritius Limited (“Brait”) and Pepkor management − Purchase consideration of R62.8 billion − Values 100% of the share capital of Pepkor at R68.0 billion › Purchase consideration to be settled through the issue of 839 million new Steinhoff shares at R57 per share and R15 billion cash − Dr Wiese will receive all new shares whilst Brait will receive a combination of new shares and cash − Steinhoff will fund the cash portion of the purchase consideration from existing cash reserves › Pepkor management will hold approximately 7.7% of the share capital of Pepkor and will be invested in another 2.8% of Steinhoff shares › Pooling arrangements between the Wiese group, Steinhoff shareholders (including the Steinhoff family and Brait) and Steinhoff and Pepkor management, together holding more than 35% of the share capital of Steinhoff, subject to the requisite regulatory and shareholder approvals, coupled to pre-emptive rights › Proposed transaction subject to shareholder, regulatory approvals and consents – 50% of the share capital indicated their support for the acquisition › Expected completion by the end of Q1 2015 › No impact on plans for primary listing in Frankfurt, expected in Q2 2015 4
Steinhoff & Pepkor - a Leading Global Discount Retailer › Combined PF 2014 Annual Sales in excess of R156bn (€11.27bn) generating Annual EBITDA of R19bn (€1.35bn) › Global Footprint of 6,000+ stores accessing close to 1 billion customers across the globe › Brands and retail formats tailored to local market conditions and customer needs › Diversified and complementary product range providing an attractive mix of cyclical and defensive high-growth retail categories › Enhanced growth profile through operational efficiencies and accelerated top-line growth › Developed market retail revenue stream supplemented by meaningful emerging market consumer exposure › Substantial buying power and economies of scale provides distinct supply chain cost advantages › Strong balance sheet to capitalise on future opportunities › Management team of highly experienced international retailers with proven track records − Dr Wiese and Pieter Erasmus to join Steinhoff International’s executive committee Source: Company filings. Note: Sales, EBITDA and cash flow figures based on FY2014 reported figures. ZAR converted to EUR at a rate of 13.84 5
Steinhoff & Pepkor - Household Names in Value Discount Retail Steinhoff Retail International Pepkor Steinhoff Retail Africa 6
Steinhoff & Pepkor - Significant Sales and EBIT Growth Potential › International will represent 67% of Annual Sales and 74% of Annual EBIT › Africa will represent 33% of Annual Sales and 26% of Annual EBIT Revenue to increase by 33% R’(bn) R156.0bn Revenue 38.6 156.0 83.9 30.6 2.9 38.6 (€11.3bn) (R'bn) 117.4 R16.1bn Steinhoff Pepkor Combined EBIT (R'bn) 9.0 1.2 2.7 3.2 (€1.2bn) EBIT to increase by 25% R’(bn) 3.2 16.1 12.9 Stores (#) 1 097 1 224 3 742 6,063 International Retail African Retail Steinhoff Pepkor Combined International Properties Pepkor Source: Company filings as of FY2014. ZAR converted to Euro at a rate of 13.84. Note: Figures represent actual reported FY2014 figures as combined. International Retail includes International operations, manufacturing sourcing, logistics and corporate services. African Retail includes African operations, manufacturing sourcing, logistics and corporate services. Pepkor revenue includes other operating income of R400m. 7
Steinhoff & Pepkor – a Leader Amongst European Discount Retailers Top European Non-Food Retailers by Revenue (€ billion) 46.3 Discounters Apparel / Department Store 28.5 General Retailers DIY / Household Goods Cellular / Electronics 17.6 16.7 16.3 16.2 14.3 13.9 13.4 12.9 11.8 11.3 10.0 9.7 8.5 8.0 7.8 7.5 7.2 7.1 4.7 4.6 4.5 4.4 3.4 3.2 3.2 3.2 3.2 3.0 2.9 2.8 2.6 1.6 1.3 1.2 1.2 1.2 1.0 0.9 0.9 0.4 Metro IKEA Makro SHV Holdings Inditex Groupe Adeo H&M El Corte Ingles Kingfisher X5 Retail Group Marks & Spencer Jeronimo Martins Combined Entity DIA Kering Steinhoff NorgesGruppen Tengelmann Group Dansk Supermarked Reitan Group Home Retail Group Next Deichmann Darty Bauhaus Sports Direct Dixons Carphone Karstadt Warenhaus Groupe Vivarte Hornbach-Baumarkt Praktiker Debenhams Pepkor OJSC Company M.Video B&M Nobia Poundland Howdens Halfords LPP Dunelm Gerry Weber CCC Source: Company filings, Factset and industry research. Note: Figures are for the last reported period for the companies listed. 8
PEPKOR OVERVIEW PIETER ERASMUS, CEO - PEPKOR 9
Pepkor Overview › Established in 1965, Pepkor is a leading South African based retailer selling mainly clothing, footwear, household goods, personal accessories, cellular products and providing financial services › Pepkor serves discount and value-focused cash consumers in the higher growth LSM 1-6 segment Household Goods 37% (1) & Personal Accessories 12 main retail brands 16 countries on 3 continents (553 Stores) 2014 revenue: R38.2bn (€2.8bn) 2014 EBITDA: R4.0bn (€0.3bn) +102 3,742 stores across 1.7 million m 2 c.32,000 employees Footwear and Cellular Clothing 50% (1) 13% (1) Speciality 2% (92 Stores) +173 (84 Stores) (12 Stores) (436 Stores) Discount +64 Value 59% (58 Stores) 39% (13 Stores) (253 Stores) (50 Stores) (6 Stores) (196 Stores) (50 Stores) (1,883 Stores) (64 Stores) +# Number of stores added in each region in FY2014 Revenue Split by Operating Segment Retail related businesses include: Clothing factory (SA), sourcing offices in China, a cellular wholesale distributor (SA) and a wholesale business (Australia). (1) Contribution to revenue. 10
Pepkor Brand Portfolio Overview DISCOUNT: Pep Group – South Africa, Rest of Africa Number of stores 1,933 Discount Clothing, Footwear, House Product Range wares, Clothing Accessories, Cellular Airtime Number of Employees 16,115 Average Store Size (m 2 ) 387 Average 2014 Store Sales (Rm) 9.6 DISCOUNT INFORMAL SECTOR – South Africa Cellular distribution compan y Number of stores 63 558 outlets Product Range Airtime, Electricity, Bill payments Flash outlets serviced 13 154 11
Pepkor Brand Portfolio Overview VALUE: Ackermans – South Africa Number of stores 436 Clothing, Footwear, House wares, Product Range Clothing Accessories, Cellular Number of Employees 5,415 Average Store Size (m 2 ) 738 Average 2014 Store Sales (Rm) 14.0 12
Pepkor Brand Portfolio Overview DISCOUNT: Pepco – Poland, Slovakia, Czech Republic Number of stores 553 Discount Clothing, Footwear, House Product Range wares, Clothing Accessories, Cellular Airtime Number of Employees 4,386 Average Store Size (m 2 ) 328 Average 2014 Store Sales (Rm) 6.3 13
Pepkor Brand Portfolio Overview SPECIALITY: SA Speciality Retail – South Africa, Rest of Africa Number of stores 479 Clothing, Footwear, Clothing Accessories, Product Range Cellular, Insurance Number of Employees 2,508 Average Store Size (m 2 ) 276 Average 2014 Store Sales (Rm) 2.1 VALUE: Pepkor South East Asia – Australia, New Zealand Number of stores 341 Product Range Clothing, Footwear, House wares Number of Employees 4,251 Average Store Size (m 2 ) 1,015 Average 2014 Store Sales (Rm) 24.6 14
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