PRESENTATION OF CONSOLIDATED RESULTS

For the quarter ended 27 June 2015

AGENDA2

Jürgen Schreiber

CEO

Strategic and

operational update

Jürgen Schreiber

CEO

Looking forwardFinancial review

Toon Clerckx

CFO

STRATEGIC AND OPERATIONAL UPDATE

VISION4

Creating unique

experiences

Focused customer

groupings

Exceptional value

proposition and

choice of product

Distinctive retail

formats

TRADING ENVIRONMENT

2.8%

-0.3%

-1.0%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

Ma

y-1

4

Jun

-14

Jul-

14

Au

g-1

4

Se

p-1

4

Oct-

14

Nov-1

4

Dec-1

4

Jan

-15

Fe

b-1

5

Ma

r-1

5

Ap

r-15

Ma

y-1

5

Total retail sales_3mma - y-o-y% CTF sales

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

1Q

:201

2

2Q

:201

2

3Q

:201

2

4Q

:201

2

1Q

:201

3

2Q

:201

3

3Q

:201

3

4Q

:201

3

1Q

:201

4

2Q

:201

4

3Q

:201

4

4Q

:201

4

1Q

:201

5

76.5%77.0%77.5%78.0%78.5%79.0%79.5%80.0%80.5%

Debt- disposable income ratio Disposable income growth

3.1

% 3.8

%

4.9

%

5.0

%

1.9

%

1.9

%

1.8

%

1.7

%

1.0

%

1.0

%

1.1

% 1.6

%

2.8

%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

1Q

:201

2

2Q

:201

2

3Q

:201

2

4Q

:201

2

1Q

:201

3

2Q

:201

3

3Q

:201

3

4Q

:201

3

1Q

:201

4

2Q

:201

4

3Q

:201

4

4Q

:201

4

1Q

:201

5 23.0%

23.5%

24.0%

24.5%

25.0%

25.5%

26.0%

26.5%

-2.0%

-1.0%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

1Q

:201

2

2Q

:201

2

3Q

:201

2

4Q

:201

2

1Q

:201

3

2Q

:201

3

3Q

:201

3

4Q

:201

3

1Q

:201

4

2Q

:201

4

3Q

:201

4

4Q

:201

4

1Q

:201

5

GDP growth Unemployment rate

Retail sales(1) Credit & Income growth(2)

Household consumption expenditure(2) • GDP growth & Unemployment rate(2)

5

1) Stats SA

2) SARB

KEY STRATEGIC LEVERS6

• Store enhancement and portfolio management

• Continuous store optimisation

• Assortment: brands and improved private label

• Leverage growing loyalty programme

Comparable

store growth

• Sourcing

• Pricing management

• Continue to drive Group efficiencies

• Margin

expansion

• Grow existing format footprint

• Rollout of tested new formats

• Expand into rest of Africa

• Right sizing of stores

New space

growth

• Second look credit providers and other solutions

• Broaden financial services and insurance offeringCredit

HIGHLIGHTS

• Pro forma adjusted EBITDA up 2.5%

• GP Margin up 50 bps to 38.0%

• Margin accretion due to

• Improved product mix

• Reduced clearance activity

• Average space growth of 4.2%

• Successful closing of exchange offer relating to

€425 million senior notes due 2019, with

97.34% participation rate

• Reduces cash pay interest by ̴ R1 billion

• Reduces cash pay leverage by > 20%

• Set to reduce debt by R3.5 billion

Credit and cash sales growth Margin & space

Capital structure management

7

All numbers include Edgars Zimbabwe.

8.711.7

6.3 7.4

-3.8 -12.1 -9.6 -10.5

2Q:FY15 3Q:FY15 4Q:FY15 1Q:FY16

Cash sales (%) Credit Sales (%)

Retail

sales

LFL

EDGARS DIVISION – OPERATIONAL PERFORMANCE

• Strong cash sales growth of 10.9%

• Credit sales reduced 6.4%

• International brands continue to drive

foot traffic

• Diversity of performance between

malls and credit driven CBD stores

• Margin maintained

• Pricing initiatives

• Better clearance

• Promotions remain key for the chain

Sales growth Margin

8

1.8%

2.2%

GP

margin

40.3%

0pts

EDGARS DIVISION – CAPITAL INVESTMENT

• Total of R24 million spent in the quarter

• Bulk of spend on refurbishments

• Limited expansion outside South Africa

• 21 stores opened (and 5 closures)

• 14 Edgars store chains opened

• 6 Edgars, 5 Edgars Active, 2 Boardmans

and 1 Red Square

• 7 mono-branded stores opened in

malls including

• Dune, TM Lewin, River Island, Express

and Tom Tailor

• Edgars Connect stand alone stores

equity accounted

• Blue Label Telecoms as partner

Capex (R millions) New space growth

9

Average

837m2

549 stores

6.8%

Refurbishment

R16m; 67%

Expansion

R8m; 33%

Retail

sales

LFL

DISCOUNT DIVISION – OPERATIONAL PERFORMANCE

• Cash sales growth of 7.1%

• Credit sales reduced 17.8%

• Good cash sales growth in premium

malls

• Credit driven CBD stores continue to

hold back overall performance

• Continued expansion

• Margin improvement through

• Improved buying and sourcing

• Pricing initiatives

Sales growth Margin

3.1%

4.9%

GP

margin

35.9%

1.1pts

10

DISCOUNT DIVISION – CAPITAL INVESTMENT

• Total of R31 million spent in the quarter; all spent

on expansion

• Expansion in both South Africa and rest of Africa,

including Namibia and Zambia

• 19 stores opened (and 10

closures)

• 12 Jet

• 5 Legit

• 2 Jet Mart

Capex (R millions) New space growth

11

Expansion

R31m; 100%

Average

641m2

728 stores

2.2%

CNA DIVISION

• Performance of

certain categories

and decrease in

average space

negatively

impacted sales

• Capex spend of

R2m for the

quarter

• Decreasing space

growth due to

continued right

sizing

Sales growth New space growth Margin

• Margin impacted

by increased

promotions

Retail

sales

LFL

12.9%

12.8%

Average

81m2

197 stores

4.7%

GP

margin

28.4%

0.6pts

12

FINANCIAL REVIEW

KEY CONSIDERATIONS FOR Q1:FY16

• Credit: Cash sales ratio of 42.0% from 46.5% in

Q1:FY15*

• Finding a long-term partner remains a priority albeit

in-house credit option performing well

• Margin management improvements

• Good progress on gross margin

• Ongoing overhead cost improvements

• Continued focus on improving working capital

management

• Post closing of successful exchange offer

relating to the improved liquidity and balance

sheet

• Cash pay interest payment obligations reduced by

approximately ~R1 billion (from ~ R3.1 billion to

~ R2.1 billion)

• Debt set to reduce by ~ R3.5 billion

14

Pro forma adjusted EBITDA improving

*Including Edgars Zimbabwe

-6.6%

1.4%2.5%

Q1:FY15 FY15 Q1:FY16

% change on previous year

STATEMENT OF COMPREHENSIVE INCOME

(R millions) Q1:FY15 Q1:FY16 % change

Retail sales 6 561 6 500 (0.9)

Gross profit 2 458 2 470 0.5

Gross profit margin 37.5 38.0 0.5pts

Other income 261 294 12.6

Store costs (1 467) (1 575) 7.4

Other operating costs (1 066) (949) (11.0)

Share of profits from insurance business 177 161 (9.0)

Trading profit 363 401 10.5

Pro forma adjusted EBITDA 679 696 2.5

15

PRO FORMA ADJUSTED EBITDA

(R millions) Q1:FY15 Q1:FY16 % change

Trading profit 363 401 10.5

Depreciation & amortisation 263 249

Net asset write off(1) 3 5

Profit/(loss) from discontinued operations(2) (2) 19

Non-recurring costs(3) 33 22

Adjusted EBITDA 660 696 5.5

Net (loss)/income from previous card programme(4) 11 (9)

Net income from new card programme(5) 8 9

Pro forma adjusted EBITDA 679 696 2.5

Pro forma adjusted EBITDA margin 10.3% 10.7% 0.4 pts

16

(1) Relates to assets written off in connection with store conversions, net of related proceeds.

(2) The results of discontinued operations are included before tax.

(3) Relates to costs associated with the sale of the trade receivables book of R15 million in Q1:FY15, costs associated with corporate and operational overhead reductions of R5 million in Q1:FY16 (R18 million in Q1:FY15),

onerous lease reversals of R11 million in Q1:FY16, as well as costs of R28 million relating to various strategic initiatives in Q1:FY16.

(4) Net loss/income derived from 100% of the trade receivables including finance charges revenue, bad debts and provisions.

(5) Pro forma fee earned by Edcon under the new arrangement with Absa, based on 100% of the trade receivables book.

UPDATE ON COST PROGRAMME

(R millions) Q1:FY16

LTM pro forma adjusted EBITDA (reported) 2 742

Permanent adjustments:

Corporate and operational overhead reductions 240

Renegotiation of contracts 43

LTM pro forma adjusted EBITDA (incl. adjustments) 3 025

Net debt (1)/LTM pro forma adjusted EBITDA (times) 7.9x

• Corporate and overhead reductions relate mainly to

restructuring

• Newly negotiated contracts relate mainly to reduced

intercharge card fees

17

1) Net debt has been adjusted by trade receivables still to be sold of R356 million in Q1:FY16.

.

COST ANALYSIS FOR Q1:FY16

• Store costs increased 7.4%,

• Manpower costs were well managed increasing by

4.1%

• Rental costs increased by 12.3%

• Rental and manpower constituted 61.8% of total

costs for Q1:FY16

Other operating costs Store costs

• Overhead costs and store card costs

improvements due to operational efficiencies

• Non-recurring costs include:

• Q1:FY15 - costs associated with the sale of the trade

receivables book of R15 million, costs associated with

corporate and operational overhead reductions of

R18 million

• Q1:FY16 - costs associated with corporate and

operational overhead reductions of R5 million, costs of

R28 million relating to various strategic initiatives and

less onerous lease reversals of R11 million.

18

(R millions) Q1:FY15 Q1:FY16

%

change

Other operating costs 898 844 (6.0)

Store card administration 135 83

Non-recurring costs 33 22

Total other operating costs 1 066 949 (11.0)

CAPEX INVESTMENT

• Total capex, excluding leases, of R117m for

the quarter

• Capex decreased by R150m from prior

comparative period

• 42 new stores opened

• Capex budget of R600m for FY16

• Approximately half expected to be

expansion capex

19

Total capex breakdown (R millions)

24

312

57

3

Edgars Discount CNA IT Other

Store capex mix* (R millions)

16

41

Refurbishment Expansion

* Excluding Edgars Zimbabwe

220

170162

669

Financing

activities

Closing cash

balance

1 73320

Tax

16

Net

financing

costs

Working

capital

Operating

activities

CapexOpening

cash

balance

1 288

Inventories

309

Trade

receivables,

other

receivables and

prepayments

Trade and

other payables

108

CASH FLOW FOR Q1:FY1620

(1) Includes R6m of currency adjustments

Working capital

39

(1)

LIQUIDITY AND CAPITAL RESOURCES

Hedging of gross debt

36%

11%

27%

25%

1%

ZAR USD (hedged) EURO (hedged)

EURO (unhedged) Other loans

21

• Total net debt increased by 1% from the end of

Q4:FY15 to R24,193 million

• Cash and cash equivalents of R1,733 million

• Facilities available of R1,388 million

• Available under RCF R388 million

• Available under liquidity facility R1,000 million

• Successful exchange offer set to improve liquidity

and stabilise balance sheet going forward

• Cash interest reduced by ~R1,000 million

• Debt set to reduce by ~R3,485 million

• Next peak in working capital cycle anticipated in

November 2015

• Anticipated conversion date for new Option A PIK notes

and new Option B PIK notes

• All principle amounts hedged, except 10% of 2018

fixed rate notes and all of the 2019 fixed rate notes

SUCCESSFUL 2019’S EXCHANGE OFFER

Matter Detail

Approval level • 97.34% of principal amount, tendered notes for settlement

Election • 45.3% of the noteholders selected Option A

• 54.7% of the noteholders selected Option B, which will include an equity

exposure

New notes issued • Edcon Holdings Limited issued €200 million of new Option A senior

13.375% PIK notes and €241 million of new Option B senior 13.375%

PIK(1) notes

• Edcon Limited issued €21.7 million of new super senior 8.0% PIK(1) notes

as early consent consideration

Remaining notes • Effect certain amendments to the Notes: (i) interest on the Notes will be

PIK (1) (and no longer in cash) at a rate of 5% per annum, starting on 30

June 2015, (ii) the maturity of the Notes not tendered in the exchange offer

be extended to 30 June 2022 and (iii) the principal amount of Notes not

tendered in the exchange offer be reduced by 72.5%

• Consequently, Edcon Limited will have approximately €3.3 million in

remaining 2019 Notes outstanding

22

(1) PIK interest means interest is not cash settled but rather capitalised over time

23

NET DEBT AND PRO FORMA NET DEBT

23

(R millions)Q1:FY15

Drawn (1)

Q1:FY16

Drawn (1) Pro forma(2)

Super senior secured

ZAR Revolving credit facility(3) 888 2 864 2 864

ZAR Floating rate notes due 4 April 2016 J+625bps 1 010 1 006 1 006

New EUR Super senior PIK notes due 30 June 2019 8.0% 1 580

Senior secured

ZAR term loan due 16 May 2017 J+700bps 4 016 4 112 4 112

EUR fixed rate note due 1 March 2018 9.5% 8 654 8 217 8 217

USD fixed rate note due 1 March 2018 9.5% 2 612 3 023 3 023

New EUR Senior secured PIK notes due 30 June 2019(4) 9.75% 494

Deferred option premium 1 127 1 102 1 102

Lease liabilities 390 362 362

Senior

EUR fixed rate notes due 30 June 2019(5) 13.375% 5 920 5 604 45

Other loans(6) 200 292 292

Gross debt 24 817 26 582 23 097

Derivatives (1 655) (656) (656)

Cash and cash equivalents (496) (1 733) (1 733)

Net debt 22 666 24 193 20 708

Lower debt 3 4851) FX rates at end Q1:FY15 were R10.59:$ and R14.45:€ and at end Q1:FY16 were R12.20:$ and R13.64:€.

2) Pro forma for implementation of the exchange offer including conversion of the new Option A and B notes to new super senior PIK notes and new senior secured PIK notes (excluding fees

estimated at EUR26 million ). All EUR notes are converted at the FX rates at end Q1:FY16.

3) The total limit under the super senior revolving credit facility is R3 717 million which matures on 31 December 2016. The maximum utilisation of the revolving credit facility during Q1:FY16 was

R3 222 million. At the end of the period R433 million of the facilities were utilised for guarantees and LC’s.

4) The notes are 9.75% cash pay with a toggle option to 12.75% PIK.

5) The maturity of the 2019 Notes not tendered has been extended to 30 June 2022 and the interest rate reduced to 5.0% as part of the amendments.

6) The portion of this debt relating to Zimbabwe was R276 million in Q1:FY16 and R180 million in Q1:FY15.

LOOKING FORWARD

25

OUTLOOK

Improved liquidity and stabilised balance sheet

• Improved liquidity with a R1 billion reduction in cash interest

• Stabilised balance sheet with gross debt set to reduce by R3.5 billion

Reduced capex needs

• Capex normalized

Sales growth to grow market share

• Continue to drive cash sales

• Find a solution to declining credit sales

Further margin and cost management

• Gross margin opportunities

• Maintain store and overhead cost efforts

Leadership changes

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