UCS Group Limited

The Retail IT Specialists

Small Cap IT Analysts Presentation

Dean Sparrow – CFO UCS Group

17 October 2006

Agenda

OverviewSolutions & ServicesSoftwareGroup analysis- SWOT- Local growth - Cross sellingBEE strategyInvestment caseOutlookQuestions

The UCS Group (‘UCS’)

UCS provides the widest range of IT software, solutions and services to the retail and consumer goods markets in

Southern Africa.

The Group is well positioned for further growth locally and internationally through a number of defined initiatives.

UCS Group - Structure

74.9%

Solutions &Services Division

SoftwareDivision

100%

100%

100%

66%

100%

61%

50.1%

UCS Group

UCS Software

CKS

GAAP

UCS SoftwareManufacturing

UCS SolutionsHoldings

Accsys

UKS

Fernridge

Our FootprintMore than 95% of SA’s top retailers deal with UCS

Our software is used in more than 15 000 stores country wide

Our systems serve more than 20 million South African consumers per month

We’ve got 1000 technicians in our man-in-van support service nationwide

POS32%

SBO15%

IM20%

MO4%

DW4%Merch

9%

WMS7% OM

5%

Planning4%

Key:POS – Point of Sale SBO – Store Back OfficeIM- Inventory ManagementMO – Merchandise OptimizationMerch – Merchandising SystemsDW – Data WarehouseWMS – Warehouse Management SystemsOM – Order Management

Source AMR, Gartner

Retail spend analysis

Note: • UCS Software largely focused on POS, SBO and OM• UCS Solutions largely focused on remainder• Further analysis included later

Financial HistoryEBITDA Strong

cashgeneration

HEPS >20%p/afor past3 years

EBITDA % Focus onefficiency/

profitability

Revenue Materialgrowth and

annuity

Segmental Contribution (interims 2006)

Revenue (% )

Solutions & Services Software

Our Track Record18 acquisitions made to date, most recently:

• 2006 – TSS (TSSMS, Quartet, TSSBS)• 2005 – CEB Maintenance

TSS acquisition concluded through UCS Solution Holdings equity issue and TSS also subscribed for 2.8m (R5m) UCS Group shares for cashAcquisitions largely funded by cash resources. Acquisition payments to date R178.8m plus 22.1m UCS sharesExecuted to consolidate our position and re-engineered for annuity revenue streamsAcquisitions have contributed to growth at a time of favorable valuations to build market dominanceHave assembled an unrivalled product and service platform to drive meaningful cross-selling and optimisation of existing client relationships across the Group

Note: Currently there are 249 million shares in issue from an original 273 million on listing.

UCS Solutions and Services Division

UCS Solutions & Services DivisionH1 FY 2006

• CEB included for full period (man-in-van maintenance)

• All businesses traded well

• BEE deal announced between TSS and UCS Solutions Holdings

• Well represented across Tier 1 retail

Composition

Business and IT solutions provider for retail & supply chain

Integrated Human Resources solutions

Library software solutions

Retail sales optimisation services

* Including CEB Maintenance, TSS Managed Services & Quadrant Consulting

*

Market Segmentation – UCS Solutions

Wholesale

FMCG Retail

Fuel

Furniture

General Merchandise

CPG

42%

16%

7%

20%

7%

8%

Customers – Solutions and Services

Market Sizing and Growth ProspectsThe market size for the services we deliver is estimated to be R3.6bn on external services and a further R3.6bn on internal services for the retail, wholesale and consumer goods manufacturing industries – we estimate to have between 9% & 10% of the external spend market post the acquisition of CEBExternal spend is projected to grow at 13% over the next 3 years according to BMIContinued trend towards partial or full outsourcing in this market in line with international trends which will further expand the market opportunitySeveral tier 1 retailers now looking at and/or implementing leading package software applications and exploring selective outsourcing relationshipsKey partnerships – SAP, JDA, IBM and Microsoft - reinforcing UCS Solutions’ ‘go to market’ approach in both applications and infrastructure servicesTelecoms deregulation opening up opportunities for network services

UCS Software Division

UCS Software DivisionComposition H1 FY 2006

Custom and packaged retail software services & solutions

Restaurant software solutions

Pharmacy and hardware-store software solutions

Domain-specialised, outsourced product development

• Annuity revenue grew by 18.1% to R100.9m

• Annuity revenue 68.5% of cash overheads

• CKS success in Building Supplies sector compensates for tough trading conditions in Pharmacy sector

• Research and Development expenditure focused on new product

• UCSSM launches Assemble-to-Order Software Manufacturing service

Market Segmentation - Software

28%

12%

9%5% 3%

10%

2%4%

22%

5%

Furniture

Clothing

Speciality & General Retail

Fuel

Local Channel

MBSQSR

Pharmacy & HardwareFMCG

Fine Dining

Software division industry segmentation 2005 – our market opportunity

Customers – SoftwareFurniture

Hospitality and Quick Service Restaurants

Apparel Food & Conv Speciality

Software Division: Business Strategy and Competitive Advantages

Strong industry vertical and geographical focusDevelop in Rands and own the IP for all our retail softwareSynchronising product roadmaps and ‘converging’ competitive products into single product over timeImplementation & support services wrapped around UCS softwareAimed at all tiers of the Retail market (Direct & Indirect)UCSSM capability positioned for large scale international solutions (attractive A20 ‘assemble to order’ offering)

Growth Strategy UCS Software being positioned to become a ‘pure’ software services business (no application software product R & D) and to become a significant channel partner to the ‘pure’ software businessIntegration of the 6 merged Software units largely completed in September 05 – currently delivering and will continue to deliver sustainable margin improvements

UCS Software Industry verticals 2006 2003 2000 1997

• Furniture Furniture Furniture Furniture• Apparel Apparel Apparel • Pharmacy Pharmacy• QSR QSR• FMCG FMCG• Speciality Speciality• Forecourt Retail• Mass Discounters• Home Improvement

Growth Strategy cont.Geographies

2006 2003 2000 1997

• RSA RSA RSA RSA • Southern Africa Southern Africa Southern Africa• Dubai Dubai • UK• Saudi Arabia

International expansion key to enabling high growth ratesChannel partners established in UK and Middle East region

UCS Group

SWOT analysisStrengths

Footprint in RSA Quality of reference base # of ‘Verticals’ Proprietary IP Modern technologies Annuity revenue model Rand based costs English speaking

Weaknesses No international footprint RSA / Africa based Limited BEE opportunities Share price / market cap.

Opportunities Cross selling products/services UK market first Other international markets New ‘verticals’ New ‘product line’ R & D International alliances / partnerships ‘Certified’ ERP interfaces

Threats Microsoft Other competitors Technology changes RSA skills shortage & staff retention

Local growth opportunitiesOur Fernridge consulting business recently (August 2006) conducted a survey of an industry vertical within the retail market in Gauteng to reflect the market share that UCS Software in particular has in this industry vertical.We have mandated Fernridge to conduct a broader survey nationally.Over the following 5 slides it will become evident that the local growth opportunities remain attractive.We have the potential to significantly increase our store footprint in SA over the medium term.Our service stack is sufficiently broad across the Group to achieve this.We wish to optimise our existing relationships through cross-selling opportunities between our Software and Solutions & Services divisionsUltimately we want to be a 1 Stop shop for all IT software, solutions and services to the retail sector.

Demo

Physical location of a specific retailer’s outlets

in Gauteng

38 Outlets

Demo

These ones are UCS clients

15 Outlets

UCS has a market share of 39% among this specific

retailers outlets in Gauteng.

Demo

Physical location of all national FMCG retail outlets in Gauteng

794 Outlets

Demo

These ones are UCS clients

273 Outlets

UCS has a market share of 34% among national FMCG

retail in Gauteng.

Demo

Kempton Park

Physical location of all national FMCG retail

outlets in Kempton Park

30 Outlets

UCS has 13 clients

UCS has a market share of 43% among national food retailers in Kempton Park

Average monthly spent on POS in this area / industry

= R13,427

Kempton Park available POS market for UCS =

R228,259 / month

Cross-selling opportunitiesAn illustration of different products & services available in the two divisions

Software large scale customised and package

POS proprietary software

Products specific to retail verticals

Products for both Microsoft and Linux platforms

CMMi Certified facility positioned for outsourced product development (OPD) or Assemble to Order (A20) opportunities – “In-store” focus

Implementation, maintenance, support and roadmap services

Product specific and retail related training services

3rd line technical support

Solutions and Services Tailored 3rd party software and

Consulting solutions for better business performance

Design, implementation and operation of leading applications, including UCS Software, SAP and JDA

Broad portfolio of leveraged, managed infrastructure including POS and desktop services (Significantly positioned with CEB & now enhanced with TSSMS)

Professional IT service management capabilities underpinned by a 24 x 7 contact centre (1st and 2nd line support)

Retail store location and optimisation services

BEE StrategyFine-tuning of strategy taking place based on recently released final Code of Good Practice (DTI)Will incorporate new ‘trust’ for existing and future staffDue to the diversity of businesses in the Group, UCS’s strategy is to implement BEE deals at operating subsidiary levelRoll-up into Group, if required by new BEE ‘partners’BEE deal done with UKS SubsidiaryTSS transaction concluded for UCS Solutions Holdings providing BEE equity position for UCS Solutions and CEBActively pursuing opportunities for the remainder of Group companies

Overview of TSS BEE transaction

UCS Group UCS Solutions Holdings

TSS100% black owned74.9% 25.1%

40%60%100%100%100%

UCS Solutions Quadrant Consulting

CEB Maintenance TSS Managed Services

• TSS Business Services• Quartet

TSS transaction important factorsCreates a material BEE player in IT services industry, with turnover of >R550m annualised (for UCS Solutions Holdings)Strategic alignment between

• Business Solutions division and TSS Business Services/Quartet (>150 SAP consultants)

• TSS MS and CEB Maintenance

Anticipate new market opportunities as a consequenceEntered into a three year management agreement regarding TSS MSTransaction became effective from 1 July 2006Pro-forma financial effects reflect transaction as earnings enhancing

The Investment CaseWorldwide trend against homegrown software and in-house services (evident in SA too)Secured strong local market position

• Consolidated a large part of the software market• Strong annuity base of blue chip clients• Ability to leverage current relationships & cross sell products and services• Significant growth potential in local market

Strong organic growth and cash flow generationOngoing margin improvement in base businessPositioned for the international opportunities

• Product distribution channels in UK & Middle East• UCSSM delivery capability

OutlookExciting growth platform

• Software- UCSSM - CMMi certification - A2O capabilities - international

opportunities

- ActiveRetail - Converged packaged software range

- Building international channels to market

• Solutions & Services- Critical mass established

- BEE position secured

- Infrastructure and SAP consulting strengthened

Various remarks that we may have madeabout future expectations, plans and prospects for the

company constitute forward-looking statements

Actual results may differ materiallyfrom those indicated by these forward looking statements

as a result of various important factors

Forward Looking Statement

Questions

UCS Group 011 712 1300Dean Sparrow, CFO 082 494 6803 dcs@jhb.ucs.co.za

College Hill 011 447 3030Johannes van Niekerk 082 921 9110 johannesv@collegehillir.com

Enquiries