Spur Corporation Limited · JSE:SUR

Spur — FY2014 Earnings Presentation

66 slides from Spur's earnings presentation, June 2014

1. Slide 1: Analysts' Presentation Results to June 2014

   ANALYSTS’ PRESENTATION RESULTS TO JUNE 2014

2. Slide 2: Agenda

   AGENDA  Highlights  Operational Review  Financial Overview  Outlook  Questions and Answers

3. Slide 3: Overview – Highlights

   OVERVIEW – HIGHLIGHTS  Restaurant sales up 13.5%  R5 billion restaurant turnover reached  Group revenue up 9.1%  Gross profit 12.5%  Comparable profit before tax up 9.9%  Dividend per share up 9.0% to 121.0 cents  Total number of restaurants at 30 June 2014 - 490  Transactions:  The Hussar

4. Slide 4: Overview – Trading Environment

   OVERVIEW – TRADING ENVIRONMENT  Domestic GDP growth remains at decade lows  Impact of mining strike still weighs on economy – impact throughout industry – impact on lower LSM earnings  Households’ financial strain deepens – especially lower LSM  Income growth remains sluggish

5. Slide 5: Restaurant Count

   RESTAURANT COUNT South Inter- Franchise brand Africa national Total Spur Steak Ranches 270 39 309 Panarottis Pizza Pasta 68 11 79 John Dory’s Fish Grill 33 - 33 Sushi Captain DoRegos 61 2 63 The Hussar Grill 6 - 6 Total 438 52 490

6. Slide 6: Trading Performance

   TRADING PERFORMANCE  9.8% existing store turnover growth  11.3% turnover growth  Menu price increase 3.4% November 2013, 3.9% May 2014  Average annual store turnover – R14.4m  Average spend per head – R84.20  Average profit per store – 12.8%  Opened eight new restaurants; relocated five and r

7. Slide 7: Family Card Statistics

   FAMILY CARD STATISTICS  Key Performance Indicators  Number of active family card members – 1.71m  Loyalty turnover for June 2014 is R144m (June 2013: R119m – 21% increase)  The national average of loyalty turnover as a % of total turnover was 40.0% (PY: 28.7%) in December 2013, and has increased

8. Slide 8: Trading Performance

   TRADING PERFORMANCE  15.2% existing store turnover growth  28.2% overall growth  Average annual store turnover – R6.6m  Average spend per head – R75.94  Average profit per store – 9.9%  Ongoing process of revamps and upgrading kids facilities; focus on improving operational standards and franc

9. Slide 9: Trading Performance

   TRADING PERFORMANCE  12.0% existing store turnover growth  21.0% overall growth  Average annual store turnover – R9.1m  Average spend per head – R97.64  Average profit per store – 13.6%  Invested in human capital – national development and national sushi trainer  Five new restaurants opened;

10. Slide 10: Trading Performance

    TRADING PERFORMANCE  6.5% like for like store turnover decline  Overall store turnover R164.8m – 13.8% decline  Closure of distribution centre in November 2013 – items incorporated into Vector  Closed 18 marginal businesses  Average annual store turnover – R2.2m  Average spend per head – R31.3

11. Slide 11: Trading Performance

    TRADING PERFORMANCE  Acquired 1 January 2014  Higher LSM - more resilient  50 years of trading experience  Turnovers have exceeded expectations since acquisition

12. Slide 12: Trading Performance

    TRADING PERFORMANCE 2014 Brand Ave annual store Ave spend per head Ave profit % turnover Spur R14.4m R84.20 12.8% Panarottis R6.6m R75.94 9.9% John Dory’s R9.1m R97.64 13.6% Captain DoRegos R2.2m R31.32 8.0% Hussar Grill R9.4m R220.00 18.0%

13. Slide 13: Trading Performance - International

    TRADING PERFORMANCE - INTERNATIONAL Australia  Turnover growth for all stores 6.7%  Tough trading once again  Unable to convert POS to hand-held this year - thus labour still high  Opened new franchised outlet in Perth – encouraging results  New restaurant opened in Wanneroo (September 2014) 

14. Slide 14: Trading Performance - International

    TRADING PERFORMANCE - INTERNATIONAL United Kingdom and Ireland  Overall turnover growth 2.0% decline  Hotel test site opened in December 2013 - Leicester  Streamlined menus  Bedded down operations

15. Slide 15: Trading Performance - International

    TRADING PERFORMANCE - INTERNATIONAL Middle East & Africa  Revenue up 22.30%  Store closed in Dubai  37 restaurants in the region – new stores opened in Nigeria, Tanzania, Zambia, Swaziland and Namibia

16. Slide 16: International Restaurant Count

    INTERNATIONAL RESTAURANT COUNT Spur Steak Panarottis Captain Location Ranches Pizza Pasta DoRegos Australia 4 4 UK & 9 Ireland Botswana 4 Kenya 2 Lesotho 1 Malawi 1 Mauritius 3 5 1 Namibia 6 1 1 Nigeria 2 Swaziland 2 Tanzania 2 Uganda 1 Zambia 1 Zimbabwe 1 1

17. Slide 17: Group Marketing

    GROUP MARKETING  R183.5m business spent as follows:  Menu engineering – increase in spend per head  Introduced television exposure – Panarottis and John Dory’s  Enhancing business intelligence – allowing more focused marketing initiatives / increase share of voice

18. Slide 18: Regulations

    REGULATIONS  POPI  In the PY engaged all 3rd party service providers who process data for us to ensure compliance  In the process of analysing current systems and processes to ensure compliance  1st business units investigated – Call Centre and Marketing where effect is greatest  New draft food

19. Slide 19: Manufacturing

    MANUFACTURING  Full absorption costing system implemented – successful implementation  Change of management at facility  HACCP certification maintained  On-going improvements – third party business

20. Slide 20: Distribution

    DISTRIBUTION  Number of cases delivered by Vector 5.3m (13.5% increase on PY)  Number of kgs delivered 43 603 tons (16.0% increase on PY)  Total Vector basket turnover R1 147.6m (28.9% increase on PY)  Strike action at Vector – increased infractions, closely monitored – disaster recover  Profit

21. Slide 21: IT Efficiency

    IT EFFICIENCY  Head Office  Tablet-based mobile application developed and in use – Mobile Operations Manager (“MOM”) Improve efficiencies, reporting consistencies and enable faster remedial action  Continuous investment in and use of business intelligence and data analysis  Cloud storage – cape

22. Slide 22: The Spur Training Academy

    THE SPUR TRAINING ACADEMY  Training  8 565 staff trained (7 220 in 2013 FY)  Certified training stores in Gauteng, Western Cape and KwaZulu-Natal across all brands  Facilitated the roll out of the Spur Family Card and the e-card  Implementation of the Management Prestige Training Program (modul

23. Slide 23: Financial Overview Results to June 2014

    FINANCIAL OVERVIEW RESULTS TO JUNE 2014

24. Slide 24: Highlights

    HIGHLIGHTS  Restaurant sales up 13.5%  Group revenue up 9.1%  Gross profit 12.5%  Comparable profit before tax up 9.9%  Dividend per share up 9.0% to 121.0 cents

25. Slide 25: SA Restaurant Turnover by Brand

    SA RESTAURANT TURNOVER BY BRAND

26. Slide 26: International Restaurant Turnover

    INTERNATIONAL RESTAURANT TURNOVER

27. Slide 27: Brand Contributions to Turnover

    BRAND CONTRIBUTIONS TO TURNOVER

28. Slide 28: Brand Contributions to Profit

    BRAND CONTRIBUTIONS TO PROFIT

29. Slide 29: International Turnover Split

    INTERNATIONAL TURNOVER SPLIT

30. Slide 30: Contribution to SA Turnover

    CONTRIBUTION TO SA TURNOVER 2014 Ge 2013 fas U 8 PATNOMATE PEOPLE MLUILOINA CRRA RMANCR

31. Slide 31: Contribution to SA Profit

    CONTRIBUTION TO SA PROFIT 2014 2013 & Franchise SA ® Manufacturing & Distribution : PATHIONATE PROPLP MULLIN CROT Rie

32. Slide 32: Return on Equity

    RETURN ON EQUITY 35.00% ~ — 30.00% - 25.00% ~ 20.00% - = % return 15.00% -— 10.00% - —e Return on Equity 5.00% ——— 0.00% ~ 2010 2011 2012 Year 2013 2014 Re@SPUR? SNTTICWATE ROPLE MLULOINN CHAT RYMNE

33. Slide 33: Franchise – Spur SA

    FRANCHISE – SPUR SA R’000 2014 2013 % change Revenue 198 498 179 464 10.6 Operating profit 176 552 158 818 11.2 Operating margin 88.9% 88.5%

34. Slide 34: Franchise – Panarottis SA

    FRANCHISE – PANAROTTIS SA R’000 2014 2013 % change Revenue 20 932 16 692 25.4 Operating profit 13 117 9 874 32.8 Operating margin 62.7% 59.2%

35. Slide 35: Franchise – John Dory's

    FRANCHISE – JOHN DORY’S R’000 2014 2013 % change Revenue 14 271 11 712 21.8 Operating profit 7 736 6 629 16.7 Operating margin 54.2% 56.6%

36. Slide 36: Franchise – Captain DoRegos SA

    FRANCHISE – CAPTAIN DOREGOS SA R’000 2014 2013 % change Revenue 8 185 9 174 (10.8) Operating profit 2 158 3 838 (43.8) Operating margin 26.4% 41.8%

37. Slide 37: The Hussar Grill (acq. 1 January 2014)

    THE HUSSAR GRILL (acq. 1 January 2014) R’000 2014 Franchise Revenue 700 Operating profit 471 Operating margin 67.3% Retail Revenue 14 988 Operating profit 2 354 Operating margin 15.7%

38. Slide 38: Procurement, Manufacturing & Distribution

    PROCUREMENT, MANUFACTURING & DISTRIBUTION R’000 2014 2013 % change Revenue 176 576 213 712 (17.4) Captain DoRegos depot revenue (22 724) (72 625) Adjusted revenue 153 852 141 087 9.0 Operating profit 58 520 59 525 (1.7) Exceptional items Relocation, revamp & 1 326 - retrenchments Adjusted operating

39. Slide 39: Corporate Services & Other SA

    CORPORATE SERVICES & OTHER SA R’000 2014 2013 % change Revenue 46 553 30 914 50.6 Operating loss (60 180) (34 797) 72.9 Exceptional items 12 106 (8 296) IFRS 2 (net of related hedge) 10 195 (10 711) Due diligence 1 620 - Legal costs - 1 424 Spur Foundation (122) (216) Consulting fees 413 567 Other o

40. Slide 40: United Kingdom

    UNITED KINGDOM R’000 2014 2013 % change Revenue 157 565 118 353 33.1 Operating loss (2 232) (1 006) (121.9) Exceptional items Impairment of Mohawk franchise rights 1 866 - Accelerated write-off of Mohawk prepaid rent 1 612 - Larkspur One Limited rent - 603 Foreign exchange loss/(gain) 75 (27) Adjust

41. Slide 41: Australia

    AUSTRALIA R’000 2014 2013 % change Revenue 79 366 79 157 0.3 Operating loss (157) (1 513) 89.6 Exceptional items Profit on sale of subsidiary (2 154) - Impairment 2 496 2 188 Foreign exchange loss 8 19 Consulting fees 82 - Adjusted operating profit 275 694 (60.4) Add back: Depreciation 2 755 2 107 I

42. Slide 42: Africa, Mauritius & Middle East

    AFRICA, MAURITIUS & MIDDLE EAST R’000 2014 2013 % change Revenue 15 002 12 374 21.2 Operating profit 8 829 7 487 17.9 Operating margin 58.9% 60.5%

43. Slide 43: International Corporate Services

    INTERNATIONAL CORPORATE SERVICES R’000 2014 2013 % change International Corporate Services Operating loss (4 918) (12 316) 60.1 Exceptional items Australia wind up costs - 1 052 Recycling of FCTR to OCI (3 386) 842 International restructure costs 1 674 - Foreign exchange loss 687 5 676 Adjusted oper

44. Slide 44: Comparable Profit

    COMPARABLE PROFIT R’000 2014 2013 % change Profit before tax 201 871 196 539 2.7 IFRS2 charge 10 195 (10 711) Corporate services and other exceptional 1 911 2 415 items International exceptional items 5 576 3 843 Procurement, manufacturing exceptional 1 326 - items Foreign exchange (gain)/loss (2 61

45. Slide 45: Financial Position - Assets

    FINANCIAL POSITION - ASSETS R’000 2014 2013 Property, plant & equipment 77 289 79 775 Intangible assets & goodwill 359 742 323 633 Investments & loans 53 471 11 315 Deferred tax 6 536 9 347 Leasing rights 3 352 5 290 Derivative financial asset (long term) 12 510 22 087 Inventory 12 132 17 156 Taxati

46. Slide 46: Financial Position – Equity & Liabilities

    FINANCIAL POSITION – EQUITY & LIABILITIES R’000 2014 2013 Equity 519 620 472 526 Long-term loans - 423 Operating lease liability 1 776 5 481 Other non-current liabilities 11 228 12 048 Deferred tax 69 522 72 284 Bank overdrafts 539 1 605 Taxation 4 559 4 132 Trade & other payables 108 299 111 270 Ot

47. Slide 47: Cash Flow

    CASH FLOW R’000 2014 2013 Cash from operations 198 644 202 914 Net interest received 6 313 5 909 204 957 208 823 Distributions paid (96 682) (88 444) Taxation paid (66 891) (60 675) Working capital changes 3 971 1 320 Investment in fixed assets (10 082) (13 628) Acquisition of equity accounted inves

48. Slide 48: Capex

    CAPEX  Spent during the year  R2.1m leasehold improvements  R1.3m furniture and fittings  R2.2m plant, equipment and vehicles  R4.5m computer equipment  Plans for next year  Extension of Cape Town building (R35m – R40m)  Upgrading of central kitchen in Montague Gardens (R1m)  Continuous inv

49. Slide 49: Looking Ahead

    fB5PURS PASSIONATE PEOPLE BUILDING GREAT BRANDS LOOKING AHEAD

50. Slide 50: GPI Transaction

    GPI TRANSACTION  Looking for a BEE partner for 10 years  Good corporate citizen  Commercial benefits  Synergies with GPI  Vertical integration  Long term partnership benefitting both groups  Funding  R72.3m Spur  R72.3m GPI  R150m Standard Bank  GPI’s effective holding after transaction i

51. Slide 51: Franchising – South Africa

    FRANCHISING – SOUTH AFRICA  “Spur 2015 and Beyond” project  Smaller units for smaller towns  R&D kitchen innovation  Improving footprint:  10 new stores  30 – 35 refurbishments  five relocations

52. Slide 52: Franchising – South Africa

    FRANCHISING – SOUTH AFRICA  Kitchen efficiencies  Improving footprint:  Continue roll-out of kids facilities  10 new stores  Six – eight refurbishments

53. Slide 53: Franchising – South Africa

    FRANCHISING – SOUTH AFRICA  Product innovation  Volume vs profit  Balancing the menu  Complete kids’ area in 95% of stores  Increasing / improving footprint:  Seven new stores  Eight refurbishments

54. Slide 54: Franchising – South Africa

    FRANCHISING – SOUTH AFRICA  Simplify the menu / offering  Kitchen design  Footprint  Set up cost  Ease of operation  Throw out the rule book  Improving footprint:  Eight new stores  Five refurbishments

55. Slide 55: Franchising – South Africa

    FRANCHISING – SOUTH AFRICA  Entrenching brand values from franchisee perspective  Site selection  20% operating partner  Improving footprint:  Six new stores  Paarl (already open)  Somerset West  Klerksdorp  Port Elizabeth  Two in Johannesburg

56. Slide 56: Franchising - UK & Ireland

    FRANCHISING - UK & IRELAND  Spur off-shoot brand  RBW – Ribs Burgers Wings  Smaller menu  Lower cost to entry  Test sites identified – total capex £1m  Hotel alliance  Holiday Inn Leicester – success  Captive audience  Identifying further sites

57. Slide 57: Franchising - Australia

    FRANCHISING - AUSTRALIA  Exit retail holdings in NSW  Increasing / improving  Increase footprint on footprint: franchising basis only  Two Spurs  One Panarottis

58. Slide 58: Franchising - Africa

    FRANCHISING - AFRICA  New territories:  Angola  Ethiopia  Mozambique  Ghana  Africa franchise fund  Accelerate African expansion

59. Slide 59: Franchising - Africa

    FRANCHISING - AFRICA  RBW / Captain DoRegos  Panarottis / Panarottis Express  Namibia  Increase footprint in existing countries  Eight new Spurs  Two Panarottis  Two Captain DoRegos

60. Slide 60: Manufacturing & Distribution

    MANUFACTURING & DISTRIBUTION  Ribs – Braviz online December 2014  Chicken  Beef  Vertical integration  Grow third party manufacturing  Increase retail sauce sales

61. Slide 61: Economic Outlook

    ECONOMIC OUTLOOK  Cost pressures elevated – spreading through the economy  Higher interest rates and recent rating downgrades of commercial banks set to add further price pressure  Weak growth unlikely to stall monetary tightening  SARB likely to continue with modest interest rate hikes, rather

62. Slide 62: Spur Group Outlook

    SPUR GROUP OUTLOOK  Well positioned across all market segments  Lower LSM – Captain DoRegos  Special occasions – Hussar Grill  Value add and experience/entertainment  Look beyond traditional business model  Vertical integration  Core products  Africa expansion - exciting

63. Slide 63: Spur Foundation

    SPUR FOUNDATION  Spur Foundation Mandela Day video

64. Slide 64: Disclaimer

    DISCLAIMER • Spur Corporation has acted in good faith and has made every reasonable effort to ensure the accuracy and completeness of the information contained in this presentation, including all information that may be defined as 'forward-looking statements' within the meaning of United States secu

65. Slide 65: Thank You Questions

    fB5PURS PASSIONATE PEOPLE BUILDING GREAT BRANDS THANK YOU QUESTIONS fISPUR:

66. Slide 66: Contact Details

    CONTACT DETAILS  CEO – Pierre van Tonder pvt@spur.co.za  CFO – Ronel van Dijk ronelv@spur.co.za  Tier 1 Investor Relations 021 702 3102

Spur — FY2014 Earnings Presentation on 6ix