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B r i n g i n g t h e f u t u r e closer

INFRASTRUCTURE

Presented by: Mr Hilton Mer

CEO: Metcash Trading Africa, Limited

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OUR BRANDSOUR BRANDS

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FACILITATING A BUSINESS FACILITATING A BUSINESS APPROACH IN AFRICAAPPROACH IN AFRICA

HISTORIC EVENT FOR SOUTH AFRICAGOVERNMENT AND PRIVATE SECTOR DIALOGUE ACROSS THE CONTINENT ESSENTIAL TO FACILITATING SUCCESSPRIVATE SECTOR INVOLVEMENT REQUIRED TO HELP UPLIFT COMMUNITIES AND DEVELOP / GROW ECONOMIESCLEARLY THOUGHT OUT MESSAGES BY PRIVATE SECTOR MUST BE COMMUNICATEDGOVERNMENT FACILITATES BUSINESS PROCESSES, FRAMEWORKS AND APPROPRIATE ENVIRONMENT

Legal compliance necessaryRemove unnecessary red tapeImport duties/customs control

Level playing field requiredFacilitation of controlled cross border trade

Quo Vadis SADC and COMESARepatriation of uninvested dividends

PROSPERITY IN EUROPE AND NORTH AMERICA BUILT ON RECIPROCAL TRADING AND ACCOMMODATING BEST PRACTICE

Africa needs to do likewise

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GROWTH OF 4.2% PREDICTED IN 2004 (U.N.E.C.A)Dependent on weather and current international trendsAll 5 regions of the continent (S, C, E, W and N) set to demonstrate stronger growth (only Southern Africa in 2003)

REASONS INCLUDEA reduction in armed conflicts and resumptions of certain internal peace talksIncrease in countries eligible for debt relief

Frees-up resources for social expenditure and investmentImproved world economic growth

Will stimulate increased aid, trade and foreign investment in AfricaNEED FOR AND MOVEMENT TOWARDS THE FOLLOWING FACTORS WILL ASSIST COUNTRIES’ GROWTH AND BUSINESS

Poverty alleviation and promotion of social equityStrengthening legal and judicial systems, property rights, contract enforcementPromotion of consensus by all stakeholdersImprovement in the quality of public regulation of liberalized economiesAppropriate policies for developing individual economic sectors

ALL OF THE ABOVE ARE RELEVANT AND IMPORTANT TO BUSINESS OPPORTUNITIES AND GROWTH IN THE FMCG INDUSTRY

GROWTH IN AFRICA

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THE UNDERMENTIONED ISSUES STATE THE OBVIOUS BUT ARE WORTHY OF REPETITION:

ELECTRICITYLight up the wayTrading stores need lighting, computers, POS equipment and refrigerationReliability essential otherwise business systems fail/ineffectiveSouthern Africa Power Pool contributes to evolution of electricity market and integrated power expansion planningAcknowledge that several new country inter connections being considered

TELECOMMUNICATIONSMobile and fixed-line networks offer opportunitiesReliable fixed-line networks needed for:

Business communicationsReceiving and placing orders for goodsBusiness data transmission and hence business analysis and controlA cheaper alternative to Satellite phones

INFRASTRUCTURAL REQUIREMENTS FOR LOGISTICAL SUCCESS – THE

GOVERNMENT FACTOR

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INFRASTRUCTURAL REQUIREMENTS FOR LOGISTICAL SUCCESS – THE

GOVERNMENT FACTOR (continued)

RAIL/SEA TRANSPORTFacilitates importation and exportation of goods and productsGround transportation locally needs cohesive networks to dovetail on rail/sea transport

ROADSTransportation of customers, staff, goods and productsModernization and industrialization dependent on suitable road infrastructure

WATER AND SANITATIONPRIVITASATION

Can assist governments in facilitating improvements to these infrastructural elements

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CHALLENGES IN DISTRIBUTION AND LOGISTICS

INFRASTRUCTURAL INADEQUECIESEffective infrastructure required to facilitate the logistics of business

Inbound logisticsOutbound logisticsCustomer logistics

Otherwise cost of operations increased / returns reducedSOME RELATIVELY SMALL POPULATIONS SPREAD OVER WIDE AREAS

E.g. Mali, Sudan, Namibia, Botswana, AngolaUNFAVOURABLE CLIMATIC CONDITIONS

Snow in LesothoFlooding and swollen rivers in Central Africa

DIVISIONS BETWEEN SOME ETHNIC GROUPINGSPOLITICAL INSTABILITIES AND INSURRECTIONS

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GROUP AT A GLANCEGROUP AT A GLANCE

26.2

1,467m

51.7bn

03A

362m703m903m791m1,115mOperating Income (EBITDA)

16.2

33bn

01A

20.2

43bn

02A

31.5

29bn

00A

26.0

29bn

99A

20.8Headline EPS - cents

11bnTurnover

98A

Full Name: Metro Cash and Carry, Ltd.Market Capitalisation: ZAR4.25bnShares in Issue: 1.824bnCurrent Share Price: ZAR2.3012 month high/low: ZAR2.60 / ZAR1.75Free Float: 94%Offshore Shareholding: 8%CAG% Turnover 98-03: 36.2%CAG% Ops Income 98-03: 32.3%

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METCASH AFRICA – THE BUSINESS

LEADING WHOLESALE DISTRIBUTOR OF FAST MOVING CONSUMER GOODS IN AFRICA

Food and non-food groceriesLiquorGeneral merchandise

CHAMPTION OF THE INDEPENDENT TRADERHawkerSpazaC StoreSuperetteSupermarkets

FRANCHISE AND BANNER ALLEGIANCES OFFEREDBuying power passed downCollective corporate identity for independentsHarnessed promotional activity

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GEOGRAPHIC SPREAD GEOGRAPHIC SPREAD -- 20032003

Hong KongSouth East Asia

South AfricaSwazilandNamibiaLesotho

43 Liquor Stores5 Distribution Centres

Unitrade (UMS) Buying GroupHong Kong Trading

Rand Monetary Area (RMA)South Africa, Namibia, Lesotho, Swaziland

145 Metro C&C12 Trade Centres

AngolaZimbabwe

MadagascarMocambique

BotswanaMalawiKenya

Uganda

239 StoresCombination of wholesale (predominantly)

& retail

AFRICA (Outside RMA)

AFRICA OPERATIONS+/- R17 Billion Turnover

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STORE NUMBER ANALYSIS

4391842379TOTAL

1991242145RMASouth Africa, Namibia, Lesotho & Swaziland

14--14Angola213-19Zimbabwe22--22Uganda

152--152Malawi31-2Kenya

272-25Botswana

2003Trade Centre

Liquor stores

C&C

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BANNER STORES AFRICA

26632333551851921793268TOTAL

-

-

-

-

-

-

63

KENYA

----11-223Buy-Rite

--14-23-456Viva

------103Super Rainbow

---6124591253Rainbow

---471072Pop In

--151292018309Square Deal

262331909110792852Lucky 7

UGANDAZIMBABWEBOTSWANASWAZILANDNAMIBIALESOTHORSABANNER GROUP

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STORE FORMATS IN STORE FORMATS IN AFRICAAFRICA

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STORE FORMATSSTORE FORMATS

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