Mr Price Group Limited · JSE:MRP
Mr Price — H1 2009 Earnings Presentation
27 slides from Mr Price's earnings presentation, September 2008
Slide 1: Interim Results
Interim Results September 2008
Slide 2: 2008 Highlights
2008 Retail sales - R'm 3,879 Comparable sales 9% Weighted average trading space (net) 20% RSP inflation 4% Profit from operating activities - R'm 300 261 15% Operating margin (%) EDL 8.0 Headline earnings per share (cents) 88.2 81.6 8% Diluted headline earnings per share (cents) 86.0 775 Dividend p
Slide 3: Headline earnings per share
100.0 90.0 882 816 80.0 70.0 67.9 60.0 516 8 year CAGR 28% 50.0 5 year CAGR 28% 40.0 315 30.0 236 20.0 157 » a il ii 2007 +=. 2008 ~=S 2009 2002 2003 2004 2005 cents per share . Mr Price Group Limited Headline earnings per share Interim Results September 2008
Slide 4: Group Balance Sheet Performance
2008 2007 Growth R'm R'm Net inventory 933 832 12% % sales growth 19% Stock turn (times) 54 5 Benefits of Redgold Trade and other payables 1,057 1,001 6% Capital expenditure 115 115 1% Cash balances 365 503 -27% R150 million shares purchased Mr Price Group Limited Group Balance Sheet Performance Int
Slide 5: Trade Receivables
2007 Growth Trade receivables - R'm (gross) 610 519 18% Total number of active accounts (000) 760 671 13% 3 Net bad debts as % credit sales * 3.6% 46% / 5 Net bad debts as % debtors * 71% 78% : Impairment provision (% of debtors) 84% 89% | & per Markov 5.4% : additional risk factors 3.0% * Excludes
Slide 6: Portfolio Statistics
Conservative lending criteria and changes to collection strategy have improved bad debt performance % of book with.current balances > o c ° = ® o to io. . = - = rj o 4 = . 3 bmn c wo — ~ ra oe @ = <= oa ” 4 Miladys Competitor Mr Price Group Limited Portfolio Statistics Interim Results September 2008
Slide 7: Apparel constitutes 69% of group sales
Apparel constitutes 69% of group sales Apparel chains 2008 2007 Growth Retail sales (R'm) 2,655 2,195 21% Comparable sales 14% RSP inflation 4% 11% Net weighted average space growth 16% 14% Operating margin 12.2% 12.3% Mr Price Group Limited Segmental Performance bterin Reston September 2008
Slide 8: Mr Price: value appeal led to strong market share gains
interpretations € value appeal led to strong market share gains e) Excellent Fashion ie > 2008 2007 Growth Revenue - R'm 2,025 1,689 20% / Comparable sales 15% Unit sales 12% Weighted average space growth 6% 7% RSP inflation 5% 12% Retail sales per m? (moving annual) 22,415 20,074 Number of stores 3
Slide 9: 'Express' stores
‘express’ stores * Lower densities and overheads but similar branch contributions * Four stores opened in current period, total now 12 * Generating higher branch contribution and ROCE than planned * Similar average basket size (Rand and units) * Potential to expand to 100 stores 7." . Mr Price Group
Slide 10: Growth departments performing well
Growth departments performing well Actual growth 2008 Ladies Footwear 42% Ladies RT Formal 38% Oakridge Smart 38% Ladies Accessories 35% Ladies Sleepwear 34% Mr Price lela ieegepe September 2008
Slide 11: RLC statistics
RLC statistics * Share of RLC grown from 9.5% in September 2007 to 10.3% in August 2008 AMPS * Number of shoppers increased by 11%, ahead of AMPS universe which was flat * Gains mostly noted in 16 - 24 age bracket and black and coloured customers Bateleur research * For second consecutive year, Mr P
Slide 12: Mr Price Sport
2008 Revenue - R'm 166 RSP Inflation -7% Closing net trading area (m’) 38,361 Retail sales per m? 9,513 Number of stores
Slide 13: Market research findings
Market research findings * Per Bateleur research, brand affinity score of 6.6 is exceptional for a new business * Shoppers are very staunch advocates of the brand Looking ahead * Assortments have been tailored and enhanced, with higher volumes per style being purchased * Trending and resourcing of a
Slide 14: Miladys
Revenue - R'm Comparable sales Unit sales Weighted average space growth RSP Inflation Retail sales per m? Number of stores Mr Price Group Lim \ terim Res September 2 Miladys
Slide 15: René Taylor
RENE TAYLOR Currently four stand-alone René Taylor stores Kolonade, Somerset Mall and Walmer Park Pavilion opened in October These stores have exceeded sales, profit and ROCE plans Five more stores planned to open in second half Potential to expand to 70 stores Miladys
Slide 16: Winner of the Orange index — Top Clothing Retailer 2008
* Winner of the Orange index — Top Clothing Retailer 2008 * Orange index an annual, independent benchmark of South Africa's largest companies * Has consistently provided valuable rankings on service benchmarks and best-in-class companies since 2001 « Competitor companies include Mr Price, Pep, Fosch
Slide 17: Both chains continue to gain market share
Both chains continue to gain market share in challenging trading conditions Home chains 2008 2007 Growth Retail sales (R'm) 1224 1,072 14% Comparable sales 0% RSP inflation 4% 15% Weighted average space growth 26% 29% Operating margin 19% 3.3% Mr Price Group Limited Segmental Performance Interim Res
Slide 18: Mr Price Home
Revenue - R'm Comparable sales Unit sales Weighted average space growth RSP inflation Retail sales per m? Number of stores Mr Price Home 2008 2007 Growth 866 755 15% -2% 4% 30% 30% 3% 16% 13,219 15,193 141 134 Mr Price Group Limited Interim Results September 2008
Slide 19: Sales Contribution
Sales Contribution Store type No. of stores Total m? Regular 79 40,578 Mega 30 30,639 Ultra 22 Super 7 Super and Ultra stores deliver 47% of sales and 44% of branch contributions Closed four affected stores during the period, -« with another eight to close over the next 18 months Mr Price Home
Slide 20: Market statistics
Market statistics * Continued growth in market share per RLC * Per AMPS number of shoppers grown by 31% ahead of AMPS universe which was flat « Per AMPS number of black customers increased by 50% and now constitute 40% * Winner - Retail Awards 2008 — Home and Lifestyle Stores Category sar Price Sead
Slide 21: Looking ahead
Looking ahead * Larger format stores are the way forward * Increase densities in larger format stores through * Kids growth strategy * Furniture growth strategy as detailed at year end - New original Home categories * Complete rollout of Redgold * Strongly communicate our exceptional value offering
Slide 22: Sheet Street
Revenue - R'm 374 Comparable sales Unit sales Weighted average space growth 14% RSP Inflation 7% Retail sales per m? 16,995 Number of stores 232 Sheet Street 330 27% 14% 18,636 213 14% 3% 6% up Limite Interim neste eptember 2008 e.. ot
Slide 23: Continued growth in market share per RLC
Continued growth in market share per RLC Aen = Aa New look stores 25 stores have now been rolled out with the new store look, with an additional 12 planned to year end Sales growths in these stores exceed company average and deliver good ROCE Phased rollout underway Mr Price Group Limited Sheet Stre
Slide 24: New stores opened: Mr Price Franchising
8 new stores opened Mr Price * Tanzania * Kenya * Mauritius (October) Mr Price Home * Tanzania * Saudi Arabia (3) * Mauritius (October) Total stores now 16 * Mr Price U * Mr Price Home 7 * Sheet Street 2 * This low risk model is trading profitably * Extensive market research in progress for future t
Slide 25: Trading Space Analysis
MEE §=— Stores to open in Division No. of stores m? second half Mr Price * Mr Price 308 178,347 6 * Express 12 5,955 2 Mr Price Sport 29 38,361 2 Miladys * Miladys 200 66,175 6 * René Taylor 3 684 6 Mr Price Home 141 146,021 4 Sheet Street 232 48,079 8 Total 925, 483,622 34 a - Mr Price Group Limite
Slide 26: Looking Forward
* Tight economic environment will continue * Consumers shop for value during these times - our brands are well positioned to continue capturing market share * Continue rollout of Redgold to drive densities and margins * Optimistic about achieving earnings growth for the year provided no further dete
Slide 27: Thank you