African Business Outlook Part of the Global Business Outlook A joint survey effort between Duke University, The South African Institute of Chartered Accountants and CFO magazine 1

CFO Global and African Business Outlook – Overview 2 African Business Outlook Duke University / SAICA / CFO Magazine Dec 2015 Global Business Outlook Duke University has surveyed CFOs around the world every quarter since 1996, most of those years jointly with CFO magazine. The survey takes the pulse of the business community and has a strong record of predicting future economic activity. The results are relied upon by Central Bankers, Analysts, Investors, and are widely reported in the press. SAICA and the African Business Outlook SAICA joined the survey in 2013, helping to found the African Business Outlook. South African results are highlighted in the analysis, enabling SAICA and other survey partners to share key insights about the African economy with members of the Institute and others focusing on Africa. The analysis in this report will assist companies to make important business decisions as they can benchmark themselves against their global peers. The long run goal is to develop a large and steady set of responding African firms. Key Survey Facts  Survey Respondents: 60  Of which, 55 from South Africa, 3 from Nigeria, and 2 from other parts of Africa  In certain segments, responses from Nigeria and other parts of Africa were excluded from analysis as the small number of respondents may skew results. South Africa results are extrapolated to represent Africa.  Data from Q3 ‘15 are not available in this report. References to “last quarter” should be interpreted as Q2 ‘15.  Sample includes CFOs from both public and private companies representing a broad range of industries  Retail/Wholesale, Mining/Construction, Manufacturing, Transportation/Energy, Communications/Media, Technology, and Banking/Finance/Insurance  Certain questions are constant each quarter, to capture trends in corporate optimism, expected hiring and capital investment plans, inflation, wages, and many other categories.  Other questions change each quarter to examine topical economic issues and newsworthy business or political events that may affect the landscape of corporate finance.

Sentiment Regarding Domestic Economy 3 African Business Outlook Duke University / SAICA / CFO Magazine Dec 2015 When ranked on a 100 point scale, the African Optimism Index (for the economic prospects of the continent over the next year) increased from 42.5 in Q to 49.3 in Q African optimism about the next 12 months remains low Trends in African Optimism CFOs are less optimistic about the domestic economy  Compared to Q2 ‘15, same number of African CFOs (77%) report being less optimistic about the domestic economy this quarter

4 African Business Outlook Duke University / SAICA / CFO Magazine Dec 2015 A decent number of African CFOs are optimistic about their own companies, despite being less optimistic about the overall economy. Own-company optimism has improved  Compared to last quarter, there has been a decrease in the percentage of African CFOs that are more optimistic for their own companies. In contrast, there has been a greater reduction in the percentage of African CFOs who are less optimistic for their own companies. On net, the optimism is more or less holding steady. Own Company Sentiment When ranked on a 100 point scale, the Own-Company African Optimism Index (for the economic prospects over the next year of each CFO’s own company) reduced from 61.4 in Q to 63.5 in Q2 2015

African Business Optimism Compared to Rest of World 5 African Business Outlook Duke University / SAICA / CFO Magazine Dec 2015 Country / Region Own Company Country Business Optimism Index Own-Firm Business Optimism Index

Top 10 Most Pressing Concerns 6 African Business Outlook Duke University / SAICA / CFO Magazine Dec 2015 CFOs in Nigeria and South Africa feels that economic uncertainty, currency risk, and government policies are the most pressing concerns South AfricaNigeria Economic uncertainty Currency riskCurrency Risk Government policies Regulatory requirementsWeak demand for products and services Cost of borrowing Employee moraleCorruption and white collar crime Employee productivityAccess to capital Volatility of political situationRising input or commodity costs Access to capitalInflation Difficulty of attracting/retaining qualified employees Employee morale

Forecast of Financial Performance in 2016 (One-year ahead) 7 African Business Outlook Duke University / SAICA / CFO Magazine Dec 2015 CFOs in South Africa and Nigeria estimate the following changes will occur in their companies during the next 12 months. South AfricaNigeria Revenue (+ 7.3%)Cash on the balance sheet (-) Wages/Salaries (+7.0%)Capital spending (+) Technology spending (+7.4%)Earnings (+) Healthcare costs (+6.0%)Wages/Salaries (+) Earnings (+9.8%)Prices of products (+) Cash on the balance sheet (-5.5%)Worker productivity (+) Marketing/advertising spending (-7.4%)Revenue (+) Number of domestic temporary employees (+3.2%)Healthcare costs (+) Dividends (+6.6%)Marketing/advertising spending (+) Prices of products (+5.3%)Technology spending (+)

Factors affecting capital spending plans 8 African Business Outlook Duke University / SAICA / CFO Magazine Dec 2015 African CFOs indicate that the following factors will affect capital spending plans over the next year compared to a “normal” economic environment South AfricaNigeria Price of fuel Currency valuationInterest rates New or anticipated regulatory requirements Slowdown in China

Aging of Fixed Assets 9 African Business Outlook Duke University / SAICA / CFO Magazine Dec 2015 A significant percentage of South African CFOs report a moderate increase in the age of their company’s fixed assets. 34% indicate that aging of fixed assets is a drag on productivity growth. Increases in new spending on fixed assets could reverse both of these trends.

Effect of Business Changes on Capital Investments 10 African Business Outlook Duke University / SAICA / CFO Magazine Dec % of South African CFOs report that the nature of their businesses will require more intense capital expenditures in future years.

Effect of Increased Payouts on Corporate Investments 11 African Business Outlook Duke University / SAICA / CFO Magazine Dec 2015 Most South African CFOs believe that increased payout (dividends, share repurchases) do not have an effect on corporate investments. 41% believe that payout does constrain investment.

Currency Devaluation 12 African Business Outlook Duke University / SAICA / CFO Magazine Dec 2015 African CFOs believe that there currencies will devalue relative to the US dollar (USD) in 2016.

Rate of Productivity Growth 13 African Business Outlook Duke University / SAICA / CFO Magazine Dec 2015 A slight majority of South African CFOs believe that the rate of growth in their firm’s productivity is slowing.

Effect of “Automation and Technology Use” on Productivity Growth 14 African Business Outlook Duke University / SAICA / CFO Magazine Dec 2015 South African CFOs believe that automation and technology has improved the growth rate of productivity within their companies.

Effect of “Process Change” on Productivity Growth 15 African Business Outlook Duke University / SAICA / CFO Magazine Dec 2015 South African CFOs believe that “process change” has a positive effect on the growth rate of productivity within their companies.

Effect of “New Business Model” on Productivity Growth 16 African Business Outlook Duke University / SAICA / CFO Magazine Dec 2015 South African CFOs believe that “new business model” has a positive effect on the growth rate of productivity within their companies.

Effect of “Unit Labor Costs” on Productivity Growth 17 African Business Outlook Duke University / SAICA / CFO Magazine Dec 2015 South African CFOs believe that “unit labor costs” has no effect or a negative effect on the growth rate of productivity within their companies.

Effect of “Economic Conditions” on Productivity Growth 18 African Business Outlook Duke University / SAICA / CFO Magazine Dec 2015 South African CFOs believe that “economic conditions” has no effect or a negative effect on the growth rate of productivity within their companies.

Effect of “Currency Valuation” on Productivity Growth 19 African Business Outlook Duke University / SAICA / CFO Magazine Dec 2015 South African CFOs believe that “currency valuation” has no effect or a negative effect on the growth rate of productivity within their companies.

Effect of “Regulation” on Productivity Growth 20 African Business Outlook Duke University / SAICA / CFO Magazine Dec 2015 South African CFOs believe that “regulation” has no effect or a negative effect on the growth rate of productivity within their companies.

Effect of “business disruption” on Productivity Growth 21 African Business Outlook Duke University / SAICA / CFO Magazine Dec 2015 South African CFOs believe that “business disruption” has a negative effect on the growth rate of productivity within their companies. Business disruption include external events such as bad weather, political turmoil, and supply chain interruptions.

Return on Assets and Capacity Utilization 22 African Business Outlook Duke University / SAICA / CFO Magazine Dec 2015 South African companies expect an reduction in ROA over the next on year and an increase in capacity utilization in the second half of South AfricaUSAEuropeAsiaLatin America Return-on-Assets Approximate ROA in %9.8%9.4%8.3%10.1% Expected ROA In %10.5%11.1%7.1%9.5% Capacity Utilization % capacity in 1H %73.2%68.9%84.1%72.8% % capacity planned for 2H of %72.3%55.7%85.9%70.5%