Mr Price Group Limited · JSE:MRP

Mr Price — H1 2010 Earnings Presentation

31 slides from Mr Price's earnings presentation, September 2009

  1. Slide 1: Interim Results September 2009

    Interim Results  September 2009

  2. Slide 2: Total consumer spending contracted sharply

    Mr Price Group Limited Interim Results September 2009  Total consumer spending contracted sharply -  Decline in retail sales in real terms for seven consecutive months -  Household debt to disposable income at historically high levels -  Consumer confidence fell in third quarter High income grou

  3. Slide 3: Retail sales growth versus SA retail statistics

    Mr Price Group Limited Interim Results September 2009 30.0% 20.0% 10.0% % growth 0.0% -10.0% -20.0% -30.0% Sep-08 Oct-08 Nov-08 Dec-08 Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09  Retailers in household furniture, appliances and equipment  SA Retail Statistics  Retailers in tex

  4. Slide 4: Group highlights

    Mr Price Group Limited Interim Results September 2009  Retail sales growth exceeds RLC  Continued gain in market share  Improvement in operating margin despite under-performance of Miladys and Home divisions  Strong performance of debtors book  Working capital improvement aided by Project Redgo

  5. Slide 5: Retail sales growth R4,3bn

    Mr Price Group Limited Interim Results September 2009 2009 2008 Growth Retail sales R4,3bn R3,9bn 11% Comparable sales 9% Net weighted average trading space 6% RSP inflation 8% Profit from operating activities R342m R300m 14% Operating margin 8.0% 7.7% Headline earnings per share 101.5c 88.2c 15% Co

  6. Slide 6: Operating profit and retail sales

    Mr Price Group Limited Interim Results September 2009 5,000 400 4,500 350 4,000 300 3,500 Operating profit (R'm) Retail sales (R'm) 250 3,000 2,500 200 2,000 150 1,500 100 1,000 50 500 0 0 2004 2005 2006 2007 2008 2009  Operating profit  Retail sales

  7. Slide 7: Headline earnings per share, cents per share

    Mr Price Group Limited Interim Results September 2009 300 250 200 cents per share 251.9 150 +15% +14% 219.0  Full Year 191.8 161.7 +19%  Interim 100 +49% 108.8 50 +8% +15% 101.5 +31% 67.9 +20% 81.6 88.2 31.5 +64% 51.6 0 2004 2005 2006 2007 2008 2009

  8. Slide 8: Share price performance and awards

    Mr Price Group Limited Interim Results September 2009  Share price performance Over five years placed 23rd Highest placed clothing retailer  Return on equity placed 19th  Placed in Top 100 for 19 successive years  Corporate Award - Mr Price Group and RedCap Foundation  Sports Development Award

  9. Slide 9: Gross inventories R1,1bn

    Mr Price Group Limited Interim Results September 2009 2009 2008 Growth Gross inventories R1,1bn R1,0bn 2% % sales growth 11% Stock turn (times) 5.8 5.4 Benefits of Redgold Trade and other payables R1,2bn R1,1bn 16% Capital expenditure R79m R115m ( 32% ) Cash balances R635m R365m 74%

  10. Slide 10: Gross trade receivables R742m

    Mr Price Group Limited Interim Results September 2009 2009 2008 Growth Gross trade receivables R742m R610m 22% Total number of active accounts 871k 760k 15% Net bad debts as % credit sales * 3.8% 3.6% Net bad debts as % debtors * 7.4% 7.1% Impairment provision (% of debtors) 8.6% 8.4% Markov chain a

  11. Slide 11: Capital expenditure

    Mr Price Group Limited Interim Results September 2009 250 R79m R176m R234m 9 4% 12 5% 200 37 16% 13 8% 150 13 8%  Other 36 20%  DC R'm  IT 100 1 1% 176 75%  Retail 7 9% 31 39% 114 64% 50 40 51% - Sept 2009 F2010 F2009

  12. Slide 12: Cash flow

    Mr Price Group Limited Interim Results September 2009 500 395 400 300 200 83 R’m 100 18 - (37) (100) (78) (200) (164) (233) (300) EBITDA Net interest Taxes paid Capex Proceeds on Distributions to Deficit on received disposal of shareholders treasury shares subsidiary

  13. Slide 13: Divisional Performance

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  14. Slide 14: Retail sales and other income R3,1bn

    Mr Price Group Limited Interim Results September 2009 2009 2008 Growth Retail sales and other income R3,1bn R2,7bn 15% Comparable sales 12% Unit sales 8% Weighted average space growth (net) 8% RSP inflation 6% Trading density R20,989m-2 R19,255m-2 9% Operating margin 12.6% 12.2% Number of stores 576

  15. Slide 15: Retail sales and other income R2,4bn

    Mr Price Group Limited Interim Results September 2009 2009 2008 Growth Retail sales and other income R2,4bn R2,0bn 21% Comparable sales 18% Unit sales 11% Weighted average space growth (net) 7% RSP inflation 9% Trading density R25,897m-2 R22,415m-2 16% Number of stores 328 320

  16. Slide 16: Market share trends

    Mr Price Group Limited Interim Results September 2009 14.0% 13.0% 12.3% 12.0% 11.4% 10.5% 10.8% 10.1% 11.9% 10.0% 11.2% 10.0% 10.4% 9.5% 9.8% 9.0% 9.1%  Mr Price Apparel 8.0%  Clothing 7.4% 6.0% 6.8%  Footwear 5.9% 5.1% 5.4% 4.0% 4.5% 4.7% 2.0% 0.0% Oct-06 Mar-07 Sep-07 Mar-08 Sep-08 Mar-09 Sep-0

  17. Slide 17: Shopper and brand affinity research

    Mr Price Group Limited Interim Results September 2009  Per AMPS survey performed in 2009, increase of 24% in number of shoppers, with increase in AMPS universe of 0.7%  The AMPS survey also noted a 39% increase in number of black shoppers  In our target market, per Bateleur research: For third ye

  18. Slide 18: Retail sales and other income R195m

    Mr Price Group Limited Interim Results September 2009 2009 2008 Growth Retail sales and other income R195m R166m 17% Comparable sales 10% Unit sales 2% Weighted average space growth (net) 8% RSP inflation 15% Trading density R9,781m-2 R9,513m-2 3% Number of stores 32 29

  19. Slide 19: Division performance commentary

    Mr Price Group Limited Interim Results September 2009  Action taken in previous year yielding results  Per Bateleur research: ranks first in spontaneous awareness, significant achievement given the newness of the brand  Gross margin percentage improved through lower markdowns  Division exceeded

  20. Slide 20: Retail sales and other income R500m

    Mr Price Group Limited Interim Results September 2009 2009 2008 Growth Retail sales and other income R500m R534m ( 6% ) Comparable sales ( 11% ) Unit sales ( 9% ) Weighted average space growth (net) 11% RSP inflation 4% Trading density R14,209m-2 R15,639m-2 ( 9% ) Number of stores 216 203

  21. Slide 21: Corrective action taken

    Mr Price Group Limited Interim Results September 2009  Internal issues affecting trade have been identified, and corrective action taken  Customers resisted winter assortments that were too basic and focussed on price rather than fashion  Product cycles and lead times have been reduced and introd

  22. Slide 22: Retail sales and other income R1,3bn

    Mr Price Group Limited Interim Results September 2009 2009 2008 Growth Retail sales and other income R1,3bn R1,2bn 1% Comparable sales 4% Unit sales ( 4% ) Weighted average space growth (net) 3% RSP inflation 11% Trading density R13,669m-2 R14,194m-2 ( 4% ) Operating margin 0.4% 1.9% Number of store

  23. Slide 23: Retail sales and other income R861m

    Mr Price Group Limited Interim Results September 2009 2009 2008 Growth Retail sales and other income R861m R866m ( 1% ) Comparable sales 6% Unit sales ( 6% ) Weighted average space growth (net) 2% RSP inflation 11% Trading density R12,717m-2 R13,219m-2 ( 4% ) Number of stores 136 141

  24. Slide 24: Mr Price Home market share

    Mr Price Group Limited Interim Results September 2009  RLC stats demonstrate Mr Price Home has increased market share since September 2008, and maintained market share since March 2009  Per Bateleur research: even in difficult trading conditions, Mr Price Home has the highest affinity amongst home

  25. Slide 25: Retail sales and other income R392m

    Mr Price Group Limited Interim Results September 2009 2009 2008 Growth Retail sales and other income R392m R374m 5% Comparable sales ( 1% ) Unit sales ( 4% ) Weighted average space growth (net) 7% RSP inflation 9% Trading density R16,419m-2 R16,995m-2 ( 4% ) Number of stores 239 234

  26. Slide 26: Sheet Street market share

    Mr Price Group Limited Interim Results September 2009  Per RLC Sheet Street has maintained its market share over the last year  Bateleur market research revealed that Sheet Street is second most frequented Home textiles retailer in South Africa and has the second highest brand affinity, a signific

  27. Slide 27: Stores in other African countries

    Mr Price Group Limited Interim Results September 2009 Mr Price Sheet Mr Price Home Street Zambia 1 1 Ghana 1 Tanzania 1 1 Mozambique 2 1 1 Kenya 2 2 1 Mauritius 1 1 Malawi 1 Uganda 1 Saudi Arabia 3 Total 10 9 2

  28. Slide 28: Expansion into Africa and beyond

    Mr Price Group Limited Interim Results September 2009  Tests to date have been successful  Strong demand for our merchandise offer  Extensive market research underway to: Identify most attractive markets Select appropriate business model Streamline business and logistics processes  Significant g

  29. Slide 29: Economic outlook indicators

    Mr Price Group Limited Interim Results September 2009  Number of leading indicators suggest that economy bottomed out during second and third quarters +-  Consumers still in precautionary mode – suggests a slower recovery -  Easing inflation rate and food prices +  Electricity increases well abo

  30. Slide 30: Group outlook and focus

    Mr Price Group Limited Interim Results September 2009  Tough trading environment expected to continue well into 2010  Focus on cash with a tightly managed credit facility has been successful in good and bad trading conditions  Focus will be on internal efficiencies, trading densities, operating m

  31. Slide 31: Mr Price Group Limited Interim Results September 2009

    Mr Price Group Limited Interim Results September 2009

Mr Price Group — H1 2010 Earnings Presentation on 6ix