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. 1
Current Geographic Presence Uganda Kenya 8 stores 36 stores − Hypermarket (2) − Hypermarket (13) − Supermarket (4) − Supermarket (13) − Convenience Store (2) − Convenience Store (10) KENYA UGANDA Kitale (1) Kakamega (1) Nanyuki (1) Rwanda Eldoret (2) Meru (1) Kampala (7) 2 stores Kisumu (2) Nakuru (1) − Supermarket (2) Thika (1) Kisii (1) Mbarara (1) Nairobi (20) RWANDA Moshi (1) Kigali (2) Malindi (1) Arusha (1) Mombasa (3) Store Evolution (1)(2)(3) Diani (1) 50 TANZANIA Dar-es-Salaam (2) 44 4 38 1 2 36 Tanzania (2) 2 8 1 32 7 LEGEND 1 2 2 4stores 1 City/Town (Store presence) 4 3 3 21 21 − Hypermarket (1) (x) Number of Branches 1 1 − Supermarket (3) 1 36 34 31 30 28 20 19 Notes: (1) Number of stores as at each calendar yearend 2008 2009 2010 2011 2012 2013 2014 (2) Includes 3 branches acquired from Shoprite Tanzania (3) Kenya branch closures include: • Nov-2008, the Thika Road branch wasdemolished Kenya Uganda Rwanda Tanzania Total Stores • Jan-2009, the Downtown branch was destroyed in afire • Sep-2013, the Westgate branch was destroyed in a terroristattack Systematic expansions with strong understanding of local markets 2
Growth Enabled by Large, Y oung and Educated East African Population East Africa is expected to experience higher population growth than the rest of Africa Population literacy across East Africa is higher than the (Population – millions) overall Africa average 3% 3% 3% 3% 3% 3% 3% 3% 3% 3% 3% 3% Africa 55% 2% 2% 2% 2% 2% 2% 2% 2% 2% 2% 3% 3% 174 160 169 156 165 151 Burundi 147 87% 143 139 136 132 128 73% Uganda 72% Kenya 68% Tanzania 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 66% Rwanda Kenya Tanzania Uganda Rwanda Burundi East Africa Growth Africa Growth Source: Unicef Website Source: WorldEconomic Outlook (Apr-2014) Note: African numbers based on weighted average by population size per country Young population with ~65% below the age of 25 Rapid urbanisation in East Africa increases potential (Population breakdown by age (1) – 2014) consumer base for retailers 80+ 0.3% 0.4% 2% Males 75-79 0.4% 0.6% 41% 19% 11% 16% 24% 27% 70-74 0.6% 0.8% Females 65-69 0.9% 1.2% 6% 5% 60-64 1.3% 1.6% 45% 55-59 1.8% 2.1% 5% 4% 4% 50-54 2.4% 2.5% 53% 45-49 3.1% 3.0% 3% 40-44 4.1% 3.9% 35-39 5.5% 5.3% 30-34 6.8% 6.8% 25-29 8.0% 8.0% 0 – 14 20-24 9.1% 9.1% 15-19 10.5% 10.5% 15 – 64 10-14 12.9% 12.8% Africa Rwanda Burundi Uganda Kenya Tanzania 5-9 15.3% 15.0% 65+ CAGR 2012-2030 Urbanisation penetration 0-4 16.8% 16.5% Source: US Census Bureau Source: Unicef Website Note: (1) Countries include Kenya, Tanzania, Uganda, Rwanda and Burundi Note: African numbers based on weighted average by population size per country Demographic dividend – Rising middle class and increasing urbanisation 3
Growth Enabled by: Fast-growing Emerging Middle Class with More Disposable Income Increasing disposable income in African Households East Africa forecasted to grow faster than the rest of Africa (Share of households in Africa by incomebrackets) (East African GDP & Growth (US$bn)) 18% 17% 11% 10% 11% 9% 18% 13% 11% 11% Income brackets 100% = 163m 196m 244m 6% 2% 6% 8% 12% 18% Globals (>US$20k) 9% 9% 8% 8% 11% 10% 14% 8% 5% 5% 6% 3% 17% Consuming Middle Class Discretionary 18% (US$10k-US$20k) (5%) 207 Income 21% 187 Emerging Consumers 23% 171 Basic Needs (US$5k-US$10k) 154 29% 139 125 32% 111 Basic Consumer Needs 29% 100 (US$2k-US$5k) 85 80 76 74 34% 24% Destitute 18% (<US$2k) 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2000 2008 2020F Households with East AfricaGDP East AfricaGrowth AfricaGrowth 59m 85m 128m income > US$5,000 Source: McKinsey’s Africa Consumer Insight Centre Source: World Economic Outlook(Apr-2014) Stable and lower inflation outlook for East Africa compared to Africa Fair wealth distribution in East Africa (CPI weighted by GDP per East African country (1) ) (Gini Coefficient comparison) World 40 14% 13% Africa 45 12% 11% SouthAfrica 63 Brazil 52 11% China 7% 47 7% 7% 6% 6% 9% 6% 6% 9% 6% Rwanda 47 8% Uganda 44 6% 6% 5% 5% 5% 5% 5% 5% Kenya 43 Burundi 42 Russia 42 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Tanzania 38 EastAfrica Africa India 37 Source: World Economic Outlook(Apr-2014) Source:CIA Note: (1) Countries include Kenya, Tanzania, Uganda, Rwanda and Burundi Increasing disposable income – generating substantial consumer demand for retailers 4
Growth Enabled by: Additional Key Enablers Agriculture & Horticulture Banking Progress towards Reforms & East African Deepening of Union Capital Markets Key Enablers Political Infrastructure Stability & Development in Introduction of Power & County Transport Governments Sectors Education Drive Pivotal factors driving the East Africaneconomy 5
Key Growth challenges Access to affordable long term funding options for; CAPEX and OPEX Funding Occasional reliance on Commercial Papers, Overdrafts and bank loans Retail in East Africa relies on choice locations Operating Very slow uptake by Property developers Locations Total lack of space in key towns Wholly developed internally Human Resource Not a single retail management institute of higher education development Retail just beginning to gain recognition as a career line Trade unions interference Managing and mitigating challenges Planning to cross list on the regional bourse Seeking a strategic investor who shares Nakumatt vision Funding Partnership with property development firms Operating National And county governments engagement to encourage incentives for Retail Facilities Locations investors Partnership with local Universities Human Resource Internal training solutions development Retention of training and development consultants Mentorship 6 6
REGIONAL EXPANSION Challenges Challenges Challenges ▪ Lack of regional retail development policy ▪ Poor national government’s support for retail investors POLICY ▪ 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 Non Tariff Barriers ▪ Diverse cultural and work ethics in Kenya, Uganda, Tanzania and Rwanda Culture ▪ Fledgling distribution hubs ▪ Over reliance on Kenya due to port advantage and market development Supply Chain 7 7
Thank You 8
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