New Clicks Australia Jeff Sher New Clicks Australia

New Clicks Australia • Jeff Sher

New Clicks Australia Today’s Focus • Margin productivity – Priceline • Building pharmacy capability • New positioning – House • Store growth – Price Attack • Building franchisor skills • Cost efficiency Tomorrow’s Vision • Enhanced distribution – Pharmacy • Shared Services – brought to life • Increased stakeholder value

Priceline - Snapshot Feb 2003 Feb 2002 166 018 882 777 150 009 799 050 Sales A$’ 000 R’ 000 Sales growth % 10. 5 49. 3 Comparable store sales growth % 4. 6 6. 6 Operating profit before interest & after allocation of net costs of support structures A$’ 000 R’ 000 6 739 35 840 6 034 32 145 Number of stores Company owned Franchised 132 2 122 - Number of full-time permanent employees 811 743 Trading area m² 62 556 58 781 Net increase in trading area for the period % 6. 4 9. 6 Weighted annual sales per m² A$ R 4 954 26 340 4 764 25 370

Priceline HIGHLIGHTS • Leadership changes CHALLENGES • Weak December sales due to intensity of competition • Selected as preferred retailer by multi national supplier • Margin productivity impacted • Lifestyle category expanded • underperformance of • One millionth Club. Card customer • Satisfactory results in the face of discounting • Continue with organic growth Lifestyle category • intense competition • Inventory management

Priceline KEY ACTION PLANS • New category team established • Inventory management programme established to enhance stock turns • Focus on improving highmargin categories • Promotional programme for the second 6 months enhanced

Priceline Pharmacy HIGHLIGHTS CHALLENGES • Significant work completed developing the model • High degree of dependency on distributors • Amanda Brook – dedicated role in Pharmacy • Regulatory process slows down store opening • 2 stores now operating • Cost to build technology & operational infrastructure • Interest in model remains high • 2 Priceline stores ready to convert to Pharmacy

Priceline Pharmacy KEY ACTION PLANS • Developing strategic alliance with wholesalers • Establish a complete set of operating procedures • Investing in technology • Incorporating Club. Card • Leveraging data-base • 8 stores planned before August year end

House HIGHLIGHTS CHALLENGES • Key leadership changes post founders • Growth in competitor environment • New positioning established • Results against two company stores now closed • POS system tested to enable category data capture • 8 new stores opened • Build on import programme

House KEY ACTION PLANS • Roll out new store image & positioning • Drive product differentiation • Private labels • Direct imports • Develop franchisee education

Price Attack HIGHLIGHTS CHALLENGES • Appointment of new Brand Leader • Two company owned stores dragging performance • New promotional programme delivering strong results • Market convergence at supplier level • Service delivery from NCA shared service • New competition • 100 th store opened

Price Attack KEY ACTION PLANS • Image upgrade of stores • Feasibility - New Zealand • Strategic alliance – Women's basketball • New format of store to be opened

Shared Services CHALLENGES HIGHLIGHTS • Review underway to ensure service delivery culture established • Expense growth difficult to contain • Store development model sets trend for income generation • Further develop franchisor mentality • OD resources stretched • New Office development signed - April 2004 occupancy KEY ACTION PLANS • Installation of new ERP system • Efficiency review • Education

New Clicks Australia Today’s Focus Tomorrow’s Vision • Deliver performance • Enhancing value • Pharmacy capability • Organic growth • Efficiency • Pharmacy - franchise