WHO IS NAKUMATT Nakumatt Holdings Limited is the largest retailer - - PowerPoint PPT Presentation

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WHO IS NAKUMATT

Nakumatt Holdings Limited is the largest retailer across East Africa. Its founding principles are: provide a variety of affordable quality brands, as well as excellent and superior service to customers. There are 54 standalone branches operating in Kenya, Uganda, Tanzania and Rwanda.

• Nakumatt offers 24 Hour Shopping experience in 11 branches revolutionizing the regional

shopping culture.

• By partnering with Bank Of Africa (BOA) Nakumatt is able to extend credit facility to esteemed

customer and offer quality products at affordable & attractive credit terms.

2 TANZANIA KENYA UGANDA

Kakamega (1) Eldoret (2) Nakuru (1) Nanyuki(1) Meru (1) Thika(1) Nairobi (20) Malindi (1) Mombasa(3) Diani (1) Moshi (1) Kampala(7) Kisumu(2) Mbarara (1) Kisii(1)

RWANDA

Kigali(2)

Current Geographic Presence

LEGEND City/Town (Store presence) (x) Number of Branches

Uganda

• 8 stores

− Hypermarket (2) − Supermarket (4) − Convenience Store (2)

Kenya

• 36 stores

− Hypermarket (13) − Supermarket (13) − Convenience Store (10)

Tanzania(2)

• 4stores

− Hypermarket (1) − Supermarket (3)

Rwanda

• 2 stores

− Supermarket (2)

Store Evolution(1)(2)(3)

Total Stores

Notes: (1) Number of stores as at each calendar yearend (2) Includes 3 branches acquired from Shoprite Tanzania (3) Kenya branch closures include:

• Nov-2008, the Thika Road branch wasdemolished
• Jan-2009, the Downtown branch was destroyed in afire
• Sep-2013, the Westgate branch was destroyed in a terroristattack

Arusha (1) Dar-es-Salaam (2) Kitale(1) 20 19 28 30 31 34 36 1 4 7 8 1 2 3 2 2 1 2 21 1 21 32 1 3 36 1 38 44 1 50 4 2009 2010 2013 2014 2008 Kenya Uganda 2011 Rwanda 2012 Tanzania

Systematic expansions with strong understanding of local markets

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Growth Enabled by Large, Y

• ung and Educated East African Population

3% 2% 3% 3% 3% 3% 2% 3% 2% 165 3% 3% 3% 2% 160 3% 3% 3% Africa 55% 2% 2% 2% 2% 2% 169 2% 174 3% 3% 143 156 151 147 Burundi 87% 139 136 132 128 Uganda Kenya Tanzania 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Rwanda Kenya Tanzania Burundi Uganda East Africa Growth Rwanda Africa Growth

Source: Unicef Website Note: African numbers based on weighted average by population size per country Source: WorldEconomic Outlook (Apr-2014)

80+ 75-79 70-74 65-69 60-64 55-59 50-54 45-49 40-44 35-39 30-34 25-29 20-24 15-19 10-14 5-9 0.3% 0.4% 0.6% 0.9% 1.3% 0.4% 0.6% 0.8% 1.2% 2% Males 41% 19% 11% 16% 24% 27% Females 1.6% 2.1% 2.5% 45% 1.8% 2.4% 53% 3.1% 4.1% 3.0% 3.9% 5.5% 5.3% 6.8% 6.8% 8.0% 9.1% 8.0% 9.1% 0 – 14 10.5% 10.5% 15 – 64 12.9% 12.8% Africa Rwanda Burundi Uganda Kenya Tanzania 15.3% 15.0% 65+ CAGR 2012-2030 Urbanisation penetration 0-4 16.8% 16.5%

Source: US Census Bureau Note: (1) Countries include Kenya, Tanzania, Uganda, Rwanda and Burundi Source: Unicef Website Note: African numbers based on weighted average by population size per country

Demographic dividend – Rising middle class and increasing urbanisation

6% 5% 5% 4% 4% 3%

Young population with ~65% below the age of 25 (Population breakdown by age(1) – 2014) Rapid urbanisation in East Africa increases potential consumer base for retailers

73% 72% 68% 66%

East Africa is expected to experience higher population growth than the rest of Africa (Population – millions) Population literacy across East Africa is higher than the

• verall Africa average

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Growth Enabled by: Fast-growing Emerging Middle Class with More Disposable Income

Fair wealth distribution in East Africa (Gini Coefficient comparison) Stable and lower inflation outlook for East Africa compared to Africa (CPI weighted by GDP per East African country(1)) East Africa forecasted to grow faster than the rest of Africa (East African GDP & Growth (US$bn)) Increasing disposable income in African Households (Share of households in Africa by incomebrackets)

34% 24% 18% 29% 32% 29% 18% 21% 23% 11% 14% 17% 6% 8% 12% 2000 2008 2020F

Globals (>US$20k) Consuming Middle Class (US$10k-US$20k) Emerging Consumers (US$5k-US$10k) Basic Consumer Needs (US$2k-US$5k) Destitute (<US$2k) Discretionary Income Basic Needs 128m Households with income > US$5,000 100% = 163m 196m 244m

Income brackets

74 76 80 85 100 111 125 139 154 171 187 207 2% 6% 6% 18% 17% 11% 11% 18% (5%) 18% 13% 10% 5% 3% 5% 11% 10% 11% 9% 9% 9% 8% 8% 8% 2008 2009 2012 2013 2014 2015 2016 2017 2018 2019 2010 2011 East AfricaGDP East AfricaGrowth AfricaGrowth

59m 85m Source: McKinsey’s Africa Consumer Insight Centre Source: World Economic Outlook(Apr-2014) Source:CIA

13% 11% 5% 14% 12% 6% 6% 5% 5% 5% 5% 5% 11% 9% 7% 8% 9% 7% 7% 6% 6% 6% 6% 6% 2015 2016 2017 2018 2019 2008 2009 2010 2011 2012 2013 2014 EastAfrica

Source: World Economic Outlook(Apr-2014) Note: (1) Countries include Kenya, Tanzania, Uganda, Rwanda and Burundi

Africa 40 45 63 52 47 47 44

Increasing disposable income – generating substantial consumer demand for retailers

World Africa SouthAfrica Brazil China Rwanda Uganda Kenya 43 Burundi 42 Russia 42 Tanzania 38 India 37

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Growth Enabled by: Additional Key Enablers

Key Enablers

Agriculture & Horticulture Banking Reforms & Deepening of Capital Markets Infrastructure Development in Power & Transport Sectors Education Drive Political Stability & Introduction of County Governments Progress towards East African Union

Pivotal factors driving the East Africaneconomy

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Key Growth challenges

Funding

Access to affordable long term funding options for; CAPEX and OPEX Occasional reliance on Commercial Papers, Overdrafts and bank loans Human Resource development Wholly developed internally Not a single retail management institute of higher education Retail just beginning to gain recognition as a career line Trade unions interference

Operating Locations

Retail in East Africa relies on choice locations Very slow uptake by Property developers Total lack of space in key towns

Managing and mitigating challenges

Funding

Planning to cross list on the regional bourse Seeking a strategic investor who shares Nakumatt vision Human Resource development Partnership with local Universities Internal training solutions Retention of training and development consultants Mentorship

Operating Locations

Partnership with property development firms National And county governments engagement to encourage incentives for Retail Facilities investors

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REGIONAL EXPANSION Challenges

Challenges

▪ Lack of regional retail development policy ▪ Poor national government’s support for retail investors ▪ Resistance from existing retailers in country ▪ Slow Tariff harmonization ▪ Poor trade facilitation at regional ports of entry ▪ Poor transport network; heavily reliant on road carriers ▪ Diverse cultural and work ethics in Kenya, Uganda, Tanzania and Rwanda ▪ Fledgling distribution hubs ▪ Over reliance on Kenya due to port advantage and market development

POLICY Non Tariff Barriers Culture Supply Chain

Challenges

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