1. New Clicks South Africa Trevor Honneysett

2. New Clicks South Africa – Review of the year Deregulation of pharmacy now a reality Lifestyle category in transition … … significant steps taken to address this “You Pay Less at Clicks” is back Benefits of UPD acquisition Improving performance from Discom PM&A performance improving as we move to integration Stock turn improvements not sustained

3. Clicks - Snapshot 20032002 SalesR’0002 997 2262 692 620 Sales growth%11.315.4 Comparable store sales growth%7.1 Operating profit before interest & after allocation of net costs of support structures R’000259 281262 974 Number of stores Company owned Franchised 260 14 248 13 Number of full-time permanent employees* 3 5522 865 Weighted trading aream²140 099133 864 Net increase in trading area for the period%4.75.4 Weighted annual sales per m²R21 39420 115 * During the year, a number of part-time employees became full-time employees, in terms of the new Labour Relations Act

4. Clicks HIGHLIGHTS Pharmacy now a reality PM&A integration started PM&A showing ongoing improvement Brand decision for pharmacy taken – Clicks Focused leadership team Integrated merchandising team FMCG & Beauty continue to do well

5. Clicks turnover growth R’m2003% increase Lifestyle1 2034.0 Health & Beauty1 79418.3 2 99711.3

6. Clicks KEY ACTION PLANS New core homeware range Value proposition Store presentation “Expect to pay less” Basket checks vs competitors Promotions Reduce operating costs Greeters & aisle walkers Focus on top 50 stores Dedicated staff for home & beauty Merchandising solution – clustering & ranging CHALLENGES Reverse decline in homewares Price competitiveness Entire customer experience In-store look & feel In stock position

7. Pharmacy HIGHLIGHTS Multifunctional, implementation team set up Key legislation in place Product & pricing benefits through UPD Better buying discipline Centralised pricing Reduced staff costs Improved shrinkage Professional training Disease management Promotions

8. Pharmacy integration project PROGRESS: Preparation work well underway –Marketing, IT, Operations, OD, Category, Store development, Finance, Legal, Change management Pilot store (Glengariff PM&A) -> Clicks Pharmacy on 3 Nov as a JV Planning to convert 4 other PM&A pharmacies in 2003 First conversion of a newly opened Clicks store to JV Clicks Pharmacy format in 2003 For 2004: –Other PM&A stores to convert –Up to 17 new Clicks stores with Pharmacy –Up to 40 Clicks refurbs with pharmacy

9. Pharmacy KEY ACTION PLANS Integration into Clicks Category management/buying In store promotions Generic substitution Phase-out of LinkMax Focus on ICU stores Integration of IT platform Medical aids Build relationships with doctors Sustain relationship with government CHALLENGES Sales & profit growth Stock turn too slow Integration of pharmacy systems Relationship with funders Relationship with doctors

11. UPD - Snapshot 2003 SalesR’0001 431 304 Operating profit before interest & after allocation of net costs of support structures R’00054 304 Inventory turn10.9 Debtors days30.4 Number of full-time permanent employees576

12. UPD HIGHLIGHTS Acquisition smoothly integrated Growth in turnover from PM&A & independent pharmacies Retained most independent pharmacy customers Clicks pricing on top FMCG lines available to wider customer base Standardised terms on FMCG suppliers Solid profit performance enhanced by sound working capital & cost management

13. UPD CHALLENGES Two franchise models in the group Increase turnover from Link Continue to add value to third party customers KEY ACTION PLANS Simplify Multicare offering Develop Link offering as premium banner Develop programmes to enhance Link pharmacy loyalty to UPD Concentrate on bringing Clicks pricing to wider customer base

14. Discom - Snapshot 2003 2002 SalesR’000 771 441 720 895 Sales growth% 7.0 12.1 Comparable store sales growth% 8.7 Operating loss before interest & after allocation of net costs of support structures R’000 (5 571) (20 637) Number of stores Company owned Franchised 177 1 180 2 Number of full-time permanent employees 1 335 1 298 Weighted trading aream² 49 351 51 821 Net increase in trading area for the period% (4.8) 8.6 Weighted annual sales per m²R 15 632 13 911

15. Discom HIGHLIGHTS Ongoing differentiation from Clicks Three hair salons opened Strong growth in ‘dry hair’ market Introduction of private label Bolstered leadership team Dedicated category leadership

16. Discom KEY ACTION PLANS Improvement in lifestyle – currently being evidenced Entrench dominant position in African beauty & hair care Improve margin through a stronger lifestyle & import programme Procure new store locations Implement POSware platform & merchandise planning CHALLENGES Decline in homewares business Return to profitability

17. Music Division - Snapshot 20032002 SalesR’000482 287439 333 Sales growth%9.824.9 Comparable store sales growth%9.6 Operating profit before interest & after allocation of net costs of support structures R’00025 67521 470 Number of stores Company owned138135 Number of full-time permanent employees545496 Weighted trading aream²17 13416 154 Net increase in trading area for the period%6.110.9 Weighted annual sales per m²R28 14827 197

18. Music Division HIGHLIGHTS Market share growth despite slowdown in national music sales Strong growth in DVD sales Popularity of local artists Major growth opportunity in gaming & DVD

19. Music Division KEY ACTION PLANS Repositioning from music to broader entertainment products –70 stores by December –Branded lifestyle accessory range POSware retail store system implemented by March 2004 Major marketing drive for Christmas Store plans: 7 new stores, 7 stores relocated / revamped CHALLENGES Maturity of CD format Global decline in CD sales Piracy & downloads Shrinkage Eliminating redundant stock

20. The Body Shop - Snapshot 20032002 SalesR’00045 78127 161 Sales growth%68.6- Operating profit before interest & after allocation of net costs of support structures R’00010 0175 176 Number of stores Company owned1811 Number of full-time permanent employees7569 Weighted trading aream²942344 Net increase in trading area for the period%173.8- Weighted annual sales per m²R48 600-

21. The Body Shop HIGHLIGHTS Strong sales growth Increased number of stores nationally to 18 Stock turn improves to 5.8 Piloted first Body Shop in a Clicks store - Tableview

22. The Body Shop CHALLENGES Slower than expected take off of new stores in suburban areas Novelty factor of the brand wearing off KEY ACTION PLANS Catalogue mailings & promotions programme Focus on Christmas gifting - accounts for 25% of sales Opening five new stores Four new concept stores planned in Clicks stores

23. Supply Chain - what have we learned ? Expectations of stock turns 5x, 6x, 7x when Centralised Distribution introduced Not achieving this - questions Centralised Distribution What we have learned : –Previously focused on Supply side of Supply Chain i.e. DC’s –Need to focus on Demand side of supply chain - category, planning, promotions, replenishment & data integrity Shared Services

24. DC efficiency improvements R2.16 2.60%2.93% 1.47%1.23% R2.67 0.45% 57%66% 0.64% 19.53% 6.70%Group expenses vs transfer growth Clicks/Discom cost to transfer Clicks/Discom cost per shipper Group cartage costs Volume centralised DC wastage 2002 2003

25. Supply chain ‘pipe’

26. Supply chain – ‘demand’ side Address physical store layout, merchandise promotion, ranging Implemented merchandise planning from JDA for lifestyle category Benefits already evident

27. New Clicks South Africa – The year ahead Roll-out & bedding down of pharmacies Continued focus on Lifestyle category Implementation of financial systems to improve speed & quality of information Focus on stock distribution & management systems Continued focus on expense control – alignment of size of shared services platform to the business

28. Summary of year ahead SA & Australia managed autonomously Pharmacy proving itself in Australia – expanded opportunity for growth Australia well positioned in a competitive market Pharmacy implementation in SA Emergence of Clicks as a pre-eminent healthcare brand UPD integral to healthcare plans Ongoing turnaround in Discom Continued focus on improvement of stock turns

29. Questions ?

30. Thank You