Presentation of consolidated results

For the 52 weeks ended 30 March 2013

1

Agenda

2

Jürgen Schreiber

CEO

Strategic and

operational update

Mark Bower

Deputy CEO & CFO

Financial review Looking forward

Jürgen Schreiber

CEO

Strategic and operational update

3

Vision

4

Creating unique

experiences

Focused customer

groupings

Exceptional value

proposition and

choice of product

Distinctive retail

formats

Strategy – key levers

5

• Revamp stores and service

• Store optimisation

• Improve product and assortment

• Leverage loyalty programme

• Grow existing

format footprint

• Expand into rest

of Africa

• Rollout of tested

new formats

• Sourcing

• Pricing management

• Group efficiencies

• Realise

opportunities

Comparable

store growth

New space

growth Credit

Margin

expansion

Trading environment

Macro backdrop

• GDP growth expectations softening

• CPI remains within 4-6% band

• Repo rate at 15 year low of 5% with no expectation

of change

• Consumer pressure remains despite sound fiscal

framework

• Rand depreciation

Real GDP growth (%)(1)

3.1%

2.5% 2.4%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

2011 2012 2013F

6 (1) SARB - 10 May 2013

Salient features for quarter ended 30 March 2013

Edgars division Discount division

• First period of positive LFL sales in quarter

• Gross profit margin of 36.9% for quarter

• Ave space growth of 7.6% for quarter,

compared to same quarter in prior year

• Improved sales performance in the quarter

• Gross profit margin of 31.4% for quarter

• Ave space growth of 0.7% for quarter,

compared to same quarter in prior year

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1.9

4.9 4.1

5.8

4.1

-2.5 -2.4 -2.1

0.5

-1.1

Q1 Q2 Q3 Q4 FY2013

Retail sales growth (%) LFL sales growth %

1.8

-0.1

-5.9

6.6

-0.3

5.1 4.9

-5.8

8.6

2.1

Q1 Q2 Q3 Q4 FY2013

Retail sales growth (%) LFL sales growth (%)

Salient features for quarter ended 30 March 2013 (continued)

CNA division Group

• Stronger sales performance

• Gross profit margin of 33.5% for quarter

• Ave space reduced 1.2% for quarter, compared

to same quarter in prior year

• Improved sales performance in the quarter

• Gross profit margin of 34.4% for quarter

• Ave space growth of 4.0% for quarter,

compared to same quarter in prior year

8

1.9

-1.2 -1.5

4.1

0.7

3.8

2.7

-0.6

4.3

2.4

Q1 Q2 Q3 Q4 FY2013

Retail sales growth (%) LFL sales growth %

1.8 2.4

-0.4

5.9

2.0

0.9 0.8

-3.4

4.0

0.4

Q1 Q2 Q3 Q4 FY2013

Retail sales growth (%) LFL sales growth (%)

Salient features for the period ended 30 March 2013

Delivery against strategic plan Strategic initiatives disruptive in

the short term

• Refurbishment on track • Discount complete

• Edgars at Phase II

• Brand pipeline growing for Edgars

• Tested new formats and first

mono-branded store launched

• Over 9 million loyalty customers

• Comparable store retail sales

up 0.4%

Profitability Sound capital structure management

• GP margin 0.1 pts lower

• Pro forma adjusted EBITDA down

13.1%

• Sale of trade receivables book

• Unwind of securitisation program

• Refinance of all short term, 2014, maturities (by

20 May)

• Migration of funding structure to rand

• Foreign debt principal and coupon substantially

hedged

9

Ave space

growth

3.4%

Retail sales

2.0%

Gross profit

1.8%

LFL Average

715.4 m2

392 stores

GP

margin

39.7%

Edgars division

Comp store growth

• Phase 1 of TP successfully completed

• Key brands secured, not meaningfully rolled out yet

• Optimising marketing plans

• Increased quick response sourcing

New space growth Margin expansion

• New stores and new concepts rolled out including Edgars Active, Edgars Shoe Gallery and standalone Topshop

• Edgars Active format expanded to 124 stores

• Increased promotional and clearance activity

• Input mark up improvements

10

1.1% 8.0% 1.1pts

Edgars division (continued)

Transformation in progress

• Retail sales up 4.1%

• Brands in Edgars and mono-branded stores in line

with expectations

• Private label in transition

• Tipping point stores transformation in progress

• Capex investment of R810 million planned in FY14

for transformation and space growth

Capex FY13 (R millions)

94

208

Expansion Refurbishment

11

LFL Average

580.7 m2

646 stores

GP

margin

33.0%

Discount division

Comp store growth

• Excluding weaker

Q3FY13, LFL

growth up 6.3%

• New generation

fixtures rolled out

New space growth Margin expansion

• Right-sizing of

stores according to

demand and

location slowed

growth

• Impact of Discom

format closure

• Improved pricing

• Optimal sourcing

• Category mix shifts

12

2.1% 0.8% 1.2 pts

Discount division (continued)

Improved customer perception

• Retail sales down 0.3%; impacted by Discom

closure

• Improvement in product and price perception

• Capex investment of R233 million planned in FY14

for expansion and remaining refits

Capex FY13 (R millions)

13

52

186

Expansion Refurbishment

LFL Average

89.6 m2

195 stores

GP

margin

32.4%

CNA division

Comp store growth

• Lower mobile sales

• Product mix

changing to digital

• Traditional

categories under

market pressure

New space growth Margin expansion

• No significant space

growth planned

• Focus on rightsizing

existing and closing

unprofitable stores

• Impacted by sales

mix as a higher

proportion of lower

margin items such

as electronics and

branded toys were

sold

14

2.4% 2.9% 0.7 pts

CNA division (continued)

Ongoing rationalisation

• Retail sales up 0.7%

• Capex investment of R21 million planned in FY14

for ongoing store upgrades

Capex FY13 (R millions)

15

4

37

Expansion Refurbishment

Group initiatives

16

• More than 9m

• 70% of sales on loyalty

cards

• Largest retail loyalty

program in the country

• Insights will help

customise offerings

• Increased focus on

direct supply

• Quick response

implementation

• Increased local and

regional sourcing

• Sale of trade receivables

• System requirements

completed

• Opportunity complicated by

current environment

• Growth in average

space of 3.4%

(4% growth in closing

space)

• Ongoing rightsizing

of stores

Loyalty

Credit

Sourcing

Property

Financial review

17

Key financial considerations

Tax settlement Sale of trade receivables

• No cash tax payments before Sep ’14

• Curtailment of use of R9b of assessed losses

(NOL’s)(1) FY13

• Only 50% of future interest on 14’s and 15’s,

and replacement debt, deductible

• 100% of interest deductible post IPO subject to

post-IPO period cap

• R8 667m of receivables sold to Absa on

1 November 2012

• OtC(2) unwound and notes of R4 300m repaid,

so deconsolidation of OtC no longer appropriate

• Completion of the remaining eligible receivables

anticipated in FY14

• Expenses associated with receivables sale

included in “transitional costs”

• Credit operations (not insurance) reflected in

discontinued operations

18

Events after the reporting period

• Repayment of the remaining 2014 notes,

financed by the R4.12 billion senior secured

term loan facility and proceeds from the unwind

of hedges

• Further R469 million of the book sold to Absa in

April 2013

(1) Net operating losses

(2) OntheCards Investments II (Pty)

Statement of comprehensive income

(R millions) FY12 FY13 % change

Retail sales 24 664 25 169 2.0

Gross profit 9 022 9 184 1.8

Other income 719 774 7.6

Store costs (4 622) (4 990) 8.0

Transitional costs (278) (599) 115.5

Other operating costs (3 552) (3 672) 3.4

Income from JV 541 666 23.1

Trading Profit 1 830 1 363

Derivative loss (10) (897)

Foreign exchange (loss)/gain (680) (1 108)

Discount on repurchase of senior secured notes 36

Impairment of brands and goodwill (126) (465)

Profit/ (Loss) before net financing costs 1 050 (1 107)

Net financing costs (3 688) (3 013)

Taxation 176 (1 107)

Profit after tax from discontinued operations 463 199

Net Loss (1 999) (5 028)

19

Pro forma adjusted EBITDA

(R millions) FY12 FY13 % change

Net Loss(1)

(1 999)

(5 028)

Taxation 4 1 185

Net financing costs 3 688 3 013

Depreciation & amortisation 1 172 1 049

EBITDA 2 865 219

Asset write-off and impairment of intangible assets 148 487

Net fair value movement on notes and associated derivatives 690 2 005

Discount on repurchase of senior floating rate notes (36)

Transitional costs 278 599

Other(3) 96 (54)

Adjusted EBITDA 4 041 3 256

Net reduction resulting from pro forma transactions(2) (860) (493)

Pro forma adjusted EBITDA 3 181 2 763 (13.1)

20

1) The results of discontinued operations are included being R463 million (FY2012) and R199 million (FY2013).

2) Pro forma income “lost” to Absa for the portion of the trade receivables book sold including finance charges revenue, bad debts and provisions and including a pro forma fee earned by

Edcon under the new arrangement with Absa.

3) Other consists of advisory fees relating to funding and Mastercard sale

• Pro forma adjusted EBITDA is adjusted to exclude transitional costs and to take into account the transaction with Absa

Divisional analysis

Division Total retail sales

growth %

Comparable store

sales growth % Gross profit margin

%

Contribution %

FY12

Actual

FY13

Actual

FY12

LFL(1)

FY13

LFL(1)

FY12

Actual

FY13

Actual

FY13

Retail

sales

FY13

Gross

profit

Edgars 8.7 4.1 4.9 (1.1) 40.8 39.7 53 58

Discount 8.4 (0.3) 10.8 2.1 31.8 33.0 39 35

CNA 8.5 0.7 7.7 2.4 33.1 32.4 8 7

Total 8.6 2.0 7.4 0.4 36.6 36.5 100 100

93%

7%

Retail sales: Geographic split

South Africa

Rest of Africa

21 (1) Like-for-like (comparable store sales)

Cost analysis for FY13

Store costs

• Increased 8.0% for the year

• Key costs

• Rental on premises increased 11.7% affected also

by a 3.4% increase in average space

• Water and electricity increased by 15.0%

• Productivity improvements

22

Other operating costs

• Moderate growth of 3.4%, excluding transitional

costs

• Transitional costs of R 599m compared to

R278m in FY2012

• Mainly due to sale of trade receivables to Absa

• Costs of administering book for Absa included

from 1 November 2012

Cashflow for FY13

23

75 138

55

TY cashflow

7 705

Taxation Net

financing

costs

Captial

expenditure

Working

capital

10 050

Transitional

costs

Operating

activities

463

LY cashflow

-1 679

321

57

102

10 050

8 667

Rec’bles

ongoing

Inventory Rec’bles

sold

1 224

Payables Total

Capex investment for FY13

Refurbishment key

• Total capex of R819 million (excluding finance leases) for FY13

(FY12: R710 million)

• 147 stores opened (incl. 128 conversions)

• Store refurbishment still key to strategy across the group

• R431 million spent on refurbishments vs. R239 million

in FY12

• Spend on information systems infrastructure declined by 35.5%

as implementation of new planning system was now

completed.

Total capex breakdown (R millions)

302

238

41

189

49

Edgars Discount CNA IT Other

Store capex mix (R millions)

150

431

Expansion Refurbishment

24

Movement on net debt for quarter ended 30 March 2013

25

2 633

8 189 8 116

967 1 300

Debt repaid

19 514

FY2013 Hedges Q3 FY2013 Working

capital

New debt

raised (1)

16 475

FX and

other

(1) Including drawings from cash on hand and €300 fixed rate notes

Liquidity and capital resources

• 81% of all foreign debt principal and

100% of coupon hedged to ZAR between

March 2014 and March 2015

• Refinanced 2014 FRN’s after the

reporting period

• 2015s not urgent at this time

• Remaining eligible receivables classified

as held-for-sale

(R millions)

FY2013

Drawn(1)

Super senior secured

Revolving credit facility in ZAR 1 456

2016’s ZAR Floating notes – J+625bps 1 010

Senior secured

2014’s € FRN’s – E+325bps 4 543

2018’s € Fixed rate – 9.5% 6 950

2018’s $ Fixed rate – 9.5% 2 228

Senior

2015’s € FRN’s – E+550bps 4 406

Deferred option premium 305

Lease liabilities 313

Gross debt 21 211

Derivatives (1 028)

Cash on hand (669)

Net debt 19 514

26

As at 30 March 2013

(1) March 30, 2013 FX Rates used for translation ZAR/USD R 9.16 ZAR/EURO R11.78

Events after the reporting period

Ongoing management Gross debt (pro forma)

• Update to hedging strategy

• Coupon fully hedged

• Approximately 17% of principal remains unhedged

• Extension of RCF to 31 December 2016

• Repayment of remaining senior secured

floating rate notes

• Second closing of sale of the trade receivables

• Further R469 million of the SA book sold to Absa

• Expect to complete sale of remaining eligible

receivables in FY14

35%

11% 37%

17%

ZAR USD (hedged) EURO (hedged) EURO (unhedged)

27

Events after the reporting period (continued)

28

(R millions) FY2013 Hedges

Absa sale

2nd closing

Repayment of

2014 notes

Pro forma

closing

Super senior secured

Revolving credit facility in ZAR 1 456 1 456

2016’s ZAR Floating notes –

J+625bps 1 010 1 010

Senior secured

2014’s € FRN’s – E+325bps 4 543 (4 543) 0

2018’s € Fixed rate – 9.5% 6 950 6 950

2018’s $ Fixed rate – 9.5% 2 228 2 228

Term loan in ZAR – J+700bps - 4 120 4 120

Senior

2015’s € FRN’s – E+550bps 4 406 4 406

Deferred option premium 305 271 576

Lease liabilities 313 313

Gross debt 21 211 21 059

Derivatives (1 028) 581 (447)

Cash on hand (669) (469) (158) (1 297)

Net debt 19 514 271 (469) 0 19 315

Looking forward

29

Outlook

• Implementation of Edgars strategy

• Space growth and rollout in rest of Africa

• Continue with Discount strategy

• Reduce cost base and grow loyalty / credit

30

Thank you

For more information

Our website: www.edcon.co.za

Edcon contacts for more information:

Executive Investor Relations and Media:

Debbie Millar 011 495 4086 / dmillar@edcon.co.za

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