Investor Presentationfor the year ended 28 February 2015

Analyst Presentation - 7 May 2015Page 2

Agenda

1. General commentary– Kevin Hodgson, CEO

2. Financial commentary – Cobus Loubser, CFO

3. Questions

Agenda

1. General commentary– Kevin Hodgson, CEO

2. Financial commentary – Cobus Loubser, CFO

3. Questions

General Commentary

Analyst Presentation - 7 May 2015Page 4

Review of the year

• Group sales increased 9.0% to R1 544.8 million

• Operating profit increased 6.7% to R266.7 million

• Profit before tax of R261.8 million increased by 8.0% from comparative R242.5 million

• Core headline earnings per share increased 6.9% to 452.3 cents

• Cash flow from operating activities was up 18.8% and net debt reduced to R0.2m

• Final gross dividend of 165.0 cents per share, up 13.8% from last year

Analyst Presentation - 7 May 2015Page 5

Review of the year• Sportsmans Warehouse

- sales increased by 8.8% (8.2% like-for-like) - increased operating profit by 6.5% from last year

• Outdoor Warehouse- 11.6% increase in sales (7.8% increase like-for-like)- operating profit 9.3% higher than last year

• Performance Brands- 3.4% lower sales to external customers- intergroup sales up 12.5%- operating profit 14.4% higher than last year

• Trading space- Weighted space increased by 2.1%- One new Outdoor Warehouse store in Windhoek- Three expansions and four relocations during year

Financial Commentary

Analyst Presentation - 7 May 2015Page 7

Financial highlights

• Retail sales growth exceeded inflation

• Operating margin of 17.3% (2014: 17.6%)

• Cash generated from operations increased by 18.8%

• Gross final dividend declared of 165.0 cents, up 13.8% from last year

Analyst Presentation - 7 May 2015Page 8

Income Statement review

• Gross profit margin was 47.6% (2014: 48.2%)

• Trading expenses tightly controlled, increase driven by higher incentives and extra trading space

• Other income includes profit on disposal of assets of R7.1m (2014: R0.7m)

• Aggregate foreign exchange profit for the year of R1.4m (2014: loss of R0.4m)

• Strong cash generation resulted in lower net finance cost

Year ended on 28 February

2015

Year ended on 28 February

2014 Audited Audited Change

R’000 R’000 %

Sales 1,544,844 1,417,584 9.0

Cost of sales (809,883) (734,035) 10.3

Gross profit 734,961 683,549 7.5

Other income 15,719 5,470 187.4

Trading expenses (483,936) (439,010) 10.2

Operating profit 266,744 250,009 6.7

Finance income 5,380 2,441 120.4

Finance cost (10,285) (10,000) 2.9

Profit before taxation 261,839 242,450 8.0

Taxation (73,944) (68,740) 7.6

Profit for the period and total comprehensive income for the period attributable to equity holders of the company 187,895 173,710 8.2

Analyst Presentation - 7 May 2015Page 9

Sales

• Sales stimulated by higher price inflation and improved consumer confidence

• Total sales increased by 9.0%- Total retail sales increased by 9.5% - Like for like retail sales increased by 8.1%- Performance Brands external sales decreased by 3.4% but sales to rest of group up 12.5%

• Sales mix broadly consistent with last year

• Performance Brands - Continue to expand ranges- Good demand for Capestorm

2015 2014 Change

Like-for-like Store

Growth

Sales by segment

2015

Sales by segment

2014

R’m R’m % % % %

Sportsmans Warehouse 1,133.5 1,042.0 8.8% 8.2% 73.4% 73.5%

Outdoor Warehouse 360.6 323.1 11.6% 7.8% 23.3% 22.8%

Retail sales 1,494.1 1,365.1 9.5% 8.1% 96.7% 96.3%

Performance Brands 50.7 52.5 -3.4% 3.3% 3.7%

Total sales 1,544.8 1,417.6 9.0% 100.0% 100.0%

Analyst Presentation - 7 May 2015Page 10

Sales

• Price inflation of 7.5% (2014: 4.9%)

• Weighted space growth of 2.1% (2014: 5.6%)

2009 2010 2011 2012 2013 2014 2015

Increase in retail sales (%)Sportsmans Warehouse 6.0 9.7 10.5 9.2 11.4 4.3 8.8 Outdoor Warehouse 11.1 8.1 14.8 7.3 7.4 0.2 11.6 Total 7.2 9.3 11.6 8.7 10.4 3.3 9.5

Like-for-like sales increase (%)

Sportsmans Warehouse 0.5 6.5 10.8 7.5 9.3 2.9 8.2 Outdoor Warehouse 2.3 4.1 16.1 3.7 5.2 (3.9) 7.8 Total 0.9 5.9 12.1 6.6 8.3 1.1 8.1

Analyst Presentation - 7 May 2015Page 11

Growth in stores & trading density

• Added Outdoor Warehouse store in Windhoek

• Relocated four stores:- Sportsmans Warehouse in Klerksdorp and Windhoek - Outdoor Warehouse in Fourways and Bloemfontein

• Expanded three stores:- Sportsmans Warehouse in Cresta, Tokai and East Rand

2009 2010 2011 2012 2013 2014 2015Change

%

Number of storesSportsmans Warehouse 32 32 32 33 35 35 35 Outdoor Warehouse 17 18 17 18 19 20 21 Total 49 50 49 51 54 55 56

Trading density (R'000s per m2)

Sportsmans Warehouse 13.6 14.3 15.8 16.9 18.0 18.0 19.3 7.2%Outdoor Warehouse 15.5 15.8 18.1 18.9 19.7 18.6 19.6 5.4%Total 14.0 14.7 16.4 17.4 18.4 18.1 19.4 7.2%

Analyst Presentation - 7 May 2015Page 12

Expenses

• Total expenses increased by 10.2% on prior year and 9.2% like-for-like.

• Occupancy costs benefited from various electrical savings initiatives.

• Straightlining lease expense increased as a result of renewed leases and disposal of DC.

• Depreciation increased significantly as a result of ongoing store investment (including relocations and expansions) and the aggressive depreciation policy to write off store fixtures over 4 years.

• The group recorded R0.6m of foreign exchange gains compared to foreign exchange gains of R0.9m in the previous year.

• Other operating costs include banking costs and credit card commission (which are linked to sales), security, IT, telephones, insurance, cleaning and maintenance.

28 February 2015

28 February 2014

Audited Audited Change

R’000 % R’000 % % %

Staff costs 183,795 11.9 167,711 11.8 9.6 9.4

Occupancy cost 132,638 8.6 123,625 8.7 7.3 5.8

Straightlining of leases 4,328 0.3 138 0.0 3,036.2 3,036.2

Depreciation 38,856 2.5 29,762 2.1 30.6 27.4

Amortisation of intangibles 12,963 0.8 12,963 0.9 - -

Advertising costs 20,703 1.3 19,639 1.4 5.4 5.4

Foreign exchange losses (559) (0.0) (862) (0.1) (35.3) (35.2)

Other operating costs 91,212 5.9 86,034 6.1 6.0 4.6

483,936 31.3 439,010 31.0 10.2 9.2

Ratio to turnover

Ratio to turnover

Like-for-like

change

Analyst Presentation - 7 May 2015Page 13

Staff costs

• The ratio of staff costs to sales was maintained at 11.3% before accounting for the share plan expense, despite higher staff incentives than last year

• The group’s incentive schemes were consistent with previous years and are based on the achievement of strategic and financial objectives. Operating profit before incentives increased by 10.0% on the previous year.

• The like-for-like increase in staff costs exclude stores opened since March 2013

• The forfeitable share plan expense is calculated in terms of IAS 2 – Share based payments over the vesting period, which generally is over five years.

28 February 2015

28 February 2014

Audited Audited Change

R’000 % R’000 % % %

Salaries & Wages 156,471 10.1 151,537 10.7 3.3 3.0

Incentives 17,657 1.1 8,633 0.6 104.5 105.2

Staff costs before share plan expense 174,128 11.3 160,170 11.3 8.7 8.5

Forfeitable share plan expense 9,667 0.6 7,541 0.5 28.2 28.2

Total staff costs 183,795 11.9 167,711 11.8 9.6 9.4

Ratio to turnover

Ratio to turnover

Like-for-like Store

Growth

Analyst Presentation - 7 May 2015Page 14

Balance Sheet

• Plant and equipment reduced due to disposal of retail DC.

• Intangibles reduced by the annual amortisation charge

• Inventory and trade receivables increased marginally and were well controlled.

• Trade and other payables are higher than last year due to timing of stock purchases and imports with Easter being earlier than last year.

• Other reserves consist of the shares purchased for the Forfeitable Share Plan, with a further R10.0m purchased and awarded in the first half and R9.7m expensed.

• The group purchased 291,173 HSP shares for R12.1m, held as treasury shares

• The derivatives consist of FEC’s marked to market.

• Net debt reduced to R0.2m at year end, from R72.4m at end of previous year.

28 February 2015

28 February 2014

Audited Audited Change

R’000 R’000 %

AssetsNon-current assetsPlant and equipment 121,287 150,265 (19.3)

Goodwill and other intangibles 607,373 620,336 (2.1)

Total non-current assets 728,660 770,601 (5.4)

Current assetsInventories 365,396 354,436 3.1

Trade and other receivables 25,619 24,782 3.4

Taxation 618 857 Cash and cash equivalents 129,846 57,577 125.5

Derivative instruments 387 - Total current assets 521,866 437,652 19.2

Total assets 1,250,526 1,208,253 3.5

Equity and liabilitiesCapital and reservesShare capital 229,312 229,312 -

Share-based payment reserve (18,278) (17,926) 2.0

Treasury shares (12,084) - Retained earnings 735,755 689,544 6.7

Equity attributable to owners of the company

934,705 900,930 3.7

Non-current liabilitiesLoans 130,000 130,000 Deferred taxation 35,674 42,806 (16.7)

Straight-lining lease liability 28,918 24,590 17.6

Total non-current liabilities 194,592 197,396 (1.4)

Current liabilitiesTrade and other payables 121,229 109,843 10.4

Derivative instruments - 84 Total current liabilities 121,229 109,927 10.3

Total liabilities 315,821 307,323 2.8

Total equity and liabilities 1,250,526 1,208,253 3.5

Analyst Presentation - 7 May 2015Page 15

Working Capital

• Net investment in working capital increased by 0.2%

• Inventory levels well controlled in light of the increase in store space and weaker exchange rate

• Trade payables increased since Easter was two weeks earlier than in the previous year

28 February 2015

28 February 2014

31 August 2014

Audited Audited Change Unaudited Change

R’000 R’000 % R’000 %

Working capitalInventories 365,396 354,436 3.1 368,606 (0.9)

Trade and other receivables 25,619 24,782 3.4 28,454 (10.0)

Trade and other payables (121,229) (109,843) 10.4 (115,622) 4.8

269,786 269,375 0.2 281,438 (4.1)

Analyst Presentation - 7 May 2015Page 16

Cash Flow• Cash generated from operations increased by

18.8% from last year due to higher operating profit and slight increase in working capital.

• Dividends paid include a special dividend of 99.0 cents per share paid from the proceeds of the distribution center disposal.

• Additions to plant and equipment were funded from operating cash and include- One new store;- Expansion of three stores and relocation of four

stores; and- Ongoing maintenance and refurbishment of stores.

• Proceeds on sale of plant and equipment included the sale of the retail distribution center for R42.5m.

• Financing activities- The group repurchased 291,173 HSP shares

for R12.1m, which is held as treasury shares- R10.0m to purchase shares for forfeitable

share plan, which has been awarded to staff

• Net debt has reduced to R0.2m from R72.4m at end of last year.

• Group has a R150m overdraft facility.

Year ended on 28 February

2015

Year ended on 28 February

2014 Audited Audited Change

R’000 R’000 %

Cash flows from operating activitiesCash generated from operations 325,594 274,182 18.8

Finance income 5,380 2,441 120.4

Finance costs (10,285) (10,000) 2.9

Dividends paid (141,684) (88,457) 60.2

Taxation paid (80,837) (76,557) 5.6

Net cash (outflows) / inflows from operating activities 98,168 101,609 (3.4)

Cash flows from investing activitiesAdditions to plant and equipment (47,102) (82,353) (42.8)

Proceeds on sale of plant and equipment 43,306 1,265 3,323.4

Net cash outflows from investing activities (3,796) (81,088) (95.3)

Cash flows from financing activitiesRepayment of loans - 5,718 (100.0)

Treasury shares aquired (12,084) - Forfeitable share plan (10,019) (4,946) 102.6

Net cash outflows from financing activities (22,103) 772

Net (decrease) / increase in cash and cash equivalents 72,269 21,293 239.4

Cash and cash equivalents at the beginning of the period 57,577 36,284 58.7

Cash and cash equivalents at the end of the period 129,846 57,577 125.5

Analyst Presentation - 7 May 2015Page 17

Investing for the future - Stores• Store expansion previous year

- Two new stores opened at end of 2013 traded for the full year- Sportsmans in Sea Point of c1,500m2 and Outdoor in Rondebosch of 800m2

- Expanded Sportsmans Rondebosch and Nelspruit traded for full year- Closed Sportsmans Amanzimtoti in February 2014

• Store expansion this year- Expanded three stores:

- Sportsmans Warehouse in East Rand, Tokai and Cresta

- Relocated four stores:- Sportsmans Warehouse in Klerksdorp and Windhoek- Outdoor Warehouse in Bloemfontein and Fourways

- Opened one new store:- Outdoor Warehouse in Windhoek of c700m2 opened in October 2014

• Store expansion for next year- Signed leases to open four new stores - Expanding one store, relocate one store and reduce one store size- Weighted trading space to increase by at least 6%

• Capex funded from operational cash flows

Analyst Presentation - 7 May 2015Page 18

Dividend

• Final gross dividend of 165.0 cents per share to be paid on 8 June 2015

• The group’s dividend policy is to have dividends covered approximately twice by core headline earnings.

• The gross total normal dividend for the year of 250 cents increased by 13.6% and is 1.8 times covered (2014: 1.9 times).

2015 2014 2013 2012 cents per

share cents per

share Increase

% cents per

share cents per

share

Interim 85 75 13.3 70 47 Final 165 145 13.8 130 115 Normal dividend 250 220 13.6 200 162 Special 99 - - - Total dividend 349 220 58.6 200 162

Normal Dividend Cover (by Core HEPS)

1.8 1.9 2.1 2.4

Analyst Presentation - 7 May 2015Page 19

In closing...

• Group sales increased 9.0% to R1 544.8 million

• Profit before tax of R261.8 million increased by 8.0% from comparative R242.4 million

• Core headline earnings per share increased 6.9% to 452.3 cents

• Cash flow from operating activities was up 18.8% and net debt reduced to R0.2m

• Final gross dividend of 165.0 cents per share

Analyst Presentation - 7 May 2015Page 20

Questions?

Thank you!

Investor Relationswww.holdsport.co.zaCobus Loubser (Chief Financial Officer)Tel: +27 21 464 5366E-mail: cobus@moresport.co.za

Analyst Presentation - 7 May 2015Page 22

DisclaimerThis presentation may contain certain forward-looking statements withrespect to the financial condition and results of operations of HoldsportLimited and its subsidiaries, which by their nature involve risk anduncertainty because they relate to events and depend on circumstancesthat may occur in the future.