Steinhoff International, MARKUS JOOSTE HISTORY AND DEVELOPMENT OF STEINHOFF

Steinhoff International, MARKUS JOOSTE HISTORY AND DEVELOPMENT OF STEINHOFF

WELCOME 2

HISTORY: STEINHOFF INVOLVED IN HOUSEHOLD GOODS TRADING SINCE 1963 1963-1990: Sourcing in the East for the West City: 2 mill + inhabitants BDR Bundesrepublik Deutschland DDR Deutsche Demokratische Republik Communist regimes Capitalist regimes Authoritarian regimes 3

HISTORY: STEINHOFF EUROPE 1989: FALL OF THE BERLIN WALL Huge impact on household goods industry Presented huge opportunities to Steinhoff 4

HISTORY: STEINHOFF EUROPE STEINHOFF EUROPE ESTABLISHED Invests in production and distribution capacity 5

1998: LISTING ON THE JSE STEINHOFF INTERNATIONAL HOLDINGS LIMITED 100% 100% Steinhoff Europe Steinhoff Africa Manufacturing and sourcing Manufacturing and sourcing 6

CHAIRMAN S REPORT 1998 STRATEGY The Steinhoff group is an integrated lifestyle supplier that manufactures, markets, warehouses and distributes household goods and timberrelated products 7 7

CHAIRMAN S REPORT 1998 STRATEGY: BUSINESS MODEL Our business model is to be a low-cost producer and distributor of furniture. Our marketing thrust is global, catering for the mass middle market in the geographical areas in which we trade Logistics is a huge growth area for us with warehousing and distribution networks being key to the future 8 8

CHAIRMAN S REPORT 1998 STRATEGY: BUSINESS MODEL Control over direct raw materials Owned retail outlets & strategic partnerships Control over third party sourcing Low-cost production and sourcing in emerging economies Sales strategy Wholesale partnerships Control over manufacturing Brand partnerships Control over sourcing, distribution and logistics Control over sourcing, distribution and logistics 9

ESTABLISHING THE BASE: 1998-2004

1998 2004 ESTABLISHING THE BASE ESTABLISH A LOW-COST MANUFACTURING BASE Invest in manufacturing capacity in Poland German production largely relocates to Poland Cornick group acquisition (presence in Australia and New Zealand) ENTER UNITED KINGDOM AND AUSTRALIA Acquire Relyon Acquire Sprung Slumber Acquire manufacturing facilities of Freedom Group in Australia 11

12 1998-2004: ESTABLISHING THE BASE FACILITATE ENTRY INTO LOGISTICS AND RAW MATERIAL SUPPLY Acquire Unitrans Limited Acquire particle board manufacturer PG Bison ESTABLISH SOURCING OPERATIONS IN ASIA Open sourcing office in Shenzhen 12

DECEMBER 2004 STEINHOFF INTERNATIONAL HOLDINGS LIMITED Steinhoff Europe Steinhoff Africa Vertically integrated furniture and household goods business Vertically integrated furniture and household goods business Manufacturing and sourcing Logistic services Retail Manufacturing and sourcing Logistic services Retail ü ü x ü ü x 13 13

CONSOLIDATION 2005 2015

1998-2015 ESTABLISHING THE PILLARS OF OUR BUSINESS Vertically integrated Manufacturing and sourcing Logistics services Retail 15

16 CONSOLIDATION: 2005 2015 CONSOLIDATE: UNITED KINGDOM AND PACIFIC RIM Acquire the listed retail group Freedom in Australia and New Zealand Acquire the listed retail group Homestyle in the UK Acquire Unitrans UK Bolster worldwide sourcing operations 16

CONSOLIDATION: 2005 2015 CONSOLIDATE: EUROPE Convert interests of various retail participation agreements Investment in: Poco (2008) Conforama (2011) Continued investment in store footprint CONSOLIDATE: AFRICA Acquisition of JD Group 17

CONSOLIDATION: 2005 2015 SUCCESSFULLY INTEGRATED RETAIL ONTO LOW-COST SUPPLY CHAIN Control over direct raw materials Owned retail outlets & strategic partnerships Control over third party sourcing Low-cost production and sourcing in emerging economies Sales strategy Wholesale partnerships Control over manufacturing Brand partnerships Control over sourcing, distribution and logistics Control over sourcing, distribution and logistics 18

STEINHOFF TODAY

INTEGRATED RETAIL HOUSEHOLD GOODS 2 261 RETAIL OUTLETS 24 RETAIL BRANDS +/- 3.1m M 2 RETAIL SPACE HOUSEHOLD GOODS 20 countries +/- 50 000 employees RETAILER EUROPE UK ASIA PACIFIC AFRICA RETAIL BRANDS Conforama, POCO, ABRA, LIPO, Emmezeta Harveys, Bensons for Beds, Cargo Freedom, Snooze, POCO JD furniture brands, POCO, Incredible Connection, HiFi Corp, Pennypinchers, Timbercity, Hardware Warehouse, The tile house 20

STEINHOFF GROUP SUPPLY CHAIN MANUFACTURING, SOURCING AND LOGISTICS Integrated retail business and group procurement initiatives continue to benefit from the enlarged European retail network PURCHASING POWER > 4 bn 21

STEINHOFF GROUP SUPPLY CHAIN USING THE BEST RAW MATERIALS AND LATEST PRODCUTION TECHNOLOGY 21 FACTORIES MAKING BEDS/MATTRESSES, UPHOLSTERED FURNITURE AND BATHROOM AND KITCHEN FURNITURE 22

STEINHOFF GROUP SUPPLY CHAIN ROUTING AND TRANSPORT METHODS ARE OPTIMISED FOR EFFICIENCIES >85 000+ TEUS OF PRODUCT SHIPPED AND DELIVERED IN EUROPE 23

STEINHOFF GROUP SUPPLY CHAIN CUTTING EDGE TECHNOLOGY IS USED THROUGHOUT MORE THAN 1 000 000 M 2 WAREHOUSE SPACE IN EUROPE 24

SEGMENTAL REVENUE DEVELOPMENT REVENUE PER SEGMENT (HOUSEHOLD GOODS) 1998 2015 13% Retail activities Manufacturing, sourcing, 100% 86% logistics and corporate services 25

2015 EXPANDING DISCOUNT PRODUCT RANGE

STEINHOFF GROUP OVERVIEW STEINHOFF PRE PEPKOR Leading European and Southern African retail company Focused on the value-conscious consumer Household goods market segment Revenue of R117 billion in FY14 RETAIL Gross revenue R104 bn MANUFACTURING, SOURCING AND LOGISTICS & CORPORATE Gross revenue R33 bn PROPERTIES Gross revenue R3 bn 27

Pepkor Enhances Steinhoff s growth trajectory Further Accelerate Growth Across Europe Complementary discount retail footprints and opportunity to leverage Steinhoff s experience in multiple European markets Profitable expansion of the Pepco business model within Steinhoff s existing European discount formats, thereby: Diversifying product mix with faster moving, less cyclical products Increasing per square metre sales densities on existing overhead base Combined supply chain and logistics functions, increasing profitability Greater buying power and economies of scale Substantial operational and supply chain overlap and cost saving opportunities in: Eastern Europe, Australia and Africa 28

2015 STEINHOFF RETAIL 1 679 stores 4 222 stores 471 stores THE NATION S STORE, WHERE YOUR MONEY BUYS YOU MORE! home 29

STEINHOFF / PEPKOR TRANSACTION RATIONALE THE COMBINED GROUP IS STRONGLY POSITIONED TO TAKE ADVANTAGE OF THE MARKET OPPORTUNITY 6 000+ STORES (5 MILLION SQUARE METERS) Europe 1 679 Stores c.2.5 million m 2 Asia Factories and Sourcing Offices Combined group retail presence Combined group manufacturing and sourcing presence Rest of Africa 265 Stores c.105 000m 2 South Africa (1) 3 957 Stores c.1.9 million m 2 Australia 471 Stores c.558 000m 2 Note: (1) Includes Botswana, Lesotho, Namibia and Swaziland. 30

2015 results HIGHLIGHTS

FINANCIAL PERFORMANCE Segmental information FY15 m NET REVENUE FY14 m OPERATING PROFIT FY15 m Integrated retail Household goods 7 623 7 119 956 858 Integrated retail General merchandise (3 months) FY14 m 888-120 - Integrated retail Automotive 1 309 1 198 39 36 Total operations (EURO) 9 820 8 317 1 115 894 Translation rate EUR:ZAR 13.7347 14.1106 13.7347 14.1106 FY15 Rm FY14 Rm FY15 Rm Integrated retail Household goods 104 696 100 449 13 134 12 110 Integrated retail General merchandise (3 months) FY14 Rm 12 199-1 645 - Integrated retail Automotive 17 973 16 915 536 512 Total operations (ZAR) 134 868 117 364 15 315 12 622

FINANCIAL PERFORMANCE Equity shares issued during FY15 4,000 3,500 926 45 3,652 3,000 2,500 350 220 11 No of shares (m) 2,000 1,500 1,000 2,100 500 0 Jun-14 ABB & Rights issue Convertible bonds Share incentive scheme Pepkor vendor consideration PSG vendor consideration Jun-15 WANOS 2 737m shares increased by 38% (FY14: 1 977m shares) 33

FINANCIAL PERFORMANCE Cash flow summary FY15 Rm FY14 Rm Cash generated from operating activities 20 286 16 141 Investing activities (21 124) (16 684) Asset expansion capex (3 229) (3 070) Asset replacement capex (1 495) (1 807) Net investment in subsidiaries (13 366) (4 518) Other investments and loans (3 034) (7 289) Financing activities 23 630 6 513 Increase in cash and cash equivalents 22 792 5 970 34

CAPITAL STRUCTURE Net debt NET DEBT (Rm) 50,000 45,000 40,000 44,071 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0 FY13 *Pro forma as announced post rights issue in July 2014 30,227 FY14 Pro forma* 26,142 FY15 35

YEAR UNDER REVIEW Financial highlights REVENUE INCREASED* 15% HEADLINE EARNINGS INCREASED* 36% NET CASH INFLOW FROM OPERATIONS INCREASED 26% DIVIDEND INCREASED 10% WEIGHTED AVERAGE NUMBER OF SHARES INCREASED 38% NET ASSET VALUE PER SHARE INCREASED 22% DILUTED HEADLINE EARNINGS PER SHARE INCREASED* 1% * From continuing operations 36

STRATEGIC OUTLOOK

38 STEINHOFF BUSINESS MODEL The environment shaping Steinhoff s strategy Steinhoff s strategy

FRANKFURT LISTING PRIMARY EUROPEAN LISTING IN FRANKFURT Aligned to the majority of Steinhoff s geographic locations Approximately 75% of Steinhoff s operating profit is earned outside of Africa, largely in Europe. Reporting currency change to Euro Secondary listing on Johannesburg Stock Exchange European prospectus Issued at the end of November 2015 No capital raising at listing Listing date 7 December 2015 39 39

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