3i Capital Markets Seminar

9 March 2018 Agenda

Introduction to Action Simon Borrows

Update on strategic delivery Sander van der Laan

Refresher on Action Business model Sander van der Laan

2017 performance and beyond Sander van der Laan

Financial performance Frederik Lotz

2 Introduction to Action Simon Borrows

3 3i acquired Action in September 2011

• Acquired from founders in primary buyout for 8.3x EBITDA

• Investment triggered by proactive approach from 3i

• Six months exclusive off market due diligence process

4 Acceleration of international growth under 3i’s ownership

Milestones 2011-2017 Total no. of Action stores

• Transitioned from founders to professional management 1095

Buyout • Strengthened the team and built 852 systems and processes

655 • Accelerated international growth and expanded into seven 514

European markets 406 321 269 245 • New CEO and CFO appointed 220 190 149 170 in 2015 to lead next phase of 127 105 development 1

1993 >> 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Netherlands Belgium & Luxembourg Germany France Austria Poland

CAPITAL MARKETS SEMINAR 5 Strong value creation and continued potential

Action – 3i carrying value, £m • £2,312m carrying value at December 2017 2,312 • Valued at 16.0x run-rate EBITDA multiple 2,009 post liquidity discount 1,708 1,549 • Action reported EBITDA of €387m in 2017

• 26.5x 3i gross money multiple in euro terms at 902 December 2017, including realisations up to 712 (1) 573 592 December 2017 501

280 299 c. 287 187 131 143 173 168 • Net proceeds of c.€321m to 3i from the 113 59 10 March 2018 recap Sep Mar Sep Mar Sep Mar Sep Mar Sep Mar Sep Mar Sep Dec Mar 11 12 12 13 13 14 14 15 15 16 16 17 17 17 18 Carrying valuation Realisations • March 2018 recap will increase gross realised 3i money multiple over cost in euro terms to 8.1x

Source: 3i Annual and Half-yearly reports. 6(1) Gross cash proceeds over cash invested in euro terms. Valuations of remaining investment are included in the multiple. 6 Today’s speakers

Sander van der Laan Frederik Lotz Chief Executive Officer Chief Financial Officer

• Joined in October 2015 • Joined in August 2015 • 27 years of Consumer & Retail experience • >16 years of CFO experience • Various positions at Ahold (1998 – 2015) • Previous CFO roles: – CEO Albert Heijn (2011 – 2015) – CFO Arla Foods 2010 – 2015 – COO Ahold Europe – CFO Danfoss 2007 – 2009 – General Manager Albert Heijn – CFO Ferrosan 2002 – 2006 – CEO Giant Food Stores (Ahold USA) • Held various financial positions at Maersk – EVP Marketing & Merchandising Albert Heijn • Significant international experience (France, China) – General Manager Gall & Gall

7 Update on strategic delivery Sander van der Laan

8 CAPITAL MARKETS SEMINAR 08/03/2018 Update on strategic delivery: 2017 proved to be another successful year

€3,418 5.3% €387 243 2 1 Million Like-for- Million Stores New New revenue, Like sales Operating added distribution country +28% growth EBITDA centres

9 CAPITAL MARKETS SEMINAR Update on strategic delivery

Strengthen our unique (International) geographic 1 2 customer value proposition expansion

A cost-effective, simple and scalable business model that delivers 3 our strategy

4 Build on the unique Action culture & values

10 CAPITAL MARKETS SEMINAR Update on strategic delivery

Strengthen our unique International geographic expansion customer value proposition

Strengthen and protect brand Rapid expansion in Expansion & network Always the lowest price profile & company reputation Germany & France development in Benelux

Roll out in Austria & Famous for surprise Accelerate Digital & 1:1 Entry into new countries Luxembourg

To develop & deploy Action Build European distribution Trusted for quality Roll out in Poland Social Responsibility (ASR) network

A simple, scalable, and cost-effective business model that delivers our strategy

Effective organisation, Strengthen HR Build a technology World-class sourcing End-to-end leadership and Business insights operating model infrastructure and procurement supply chain processes Build on the unique Action culture & values Customer Focused | Cost Conscious | Teamwork | Discipline | Simplicity | Respect

11 CAPITAL MARKETS SEMINAR Update on strategic delivery: significant international growth since the investment by 3i in 2011

367 6 149 216 4 # of stores 335

18

€m Revenue # of stores % NL revenue # of DCs

607 3,418 245 1,095 ~95% ~33% 1 71

1) Including 2 DCs under construction 2010 2017

12 CAPITAL MARKETS SEMINAR Update on strategic delivery: consistent high growth track record

Strong net sales growth (€m) Strong EBITDA growth (€m)

3,418 387 2,675 310 1,995 226 1,506 166 1,155 873 99 128 607 718 71 86 426 515 39 49

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Rapid store expansion Increasing DC network

7 1,095 852 655 514 3 406 2 2 5 269 321 190 220 245 1 1 1 1 1 1

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

13 CAPITAL MARKETS SEMINAR Refresher on Action Business model Sander van der Laan

14 CAPITAL MARKETS SEMINAR 08/03/2018 Unique business model providing sustainable competitive advantage

One brand & Price Surprise one format

Scalable Customers business People model

15 CAPITAL MARKETS SEMINAR One brand One concept across all countries

1 1 1 brand store format store operating model

• Stores between 700 to 1,100 sqm

• More than 90% of assortment is the same across all countries

• Focus on simplicity enables fast growth

16 CAPITAL MARKETS SEMINAR Price Unbeatable prices offered to our customers

% of products in different price ranges Unbeatable prices for competition(1)

~ 35% 100 ~ 30% 154 ~ 25% 100 163

100 ~ 7% 160 ~ 2% 100 161 €0-1 €1-2 €2-5 €5-10 >€10 Action Competitor minimal basket Primary offering

(1) GfK Image and Awareness Study December 2017 / Source: Company information

17 CAPITAL MARKETS SEMINAR Price Unbeatable prices offered to our customers

Oral-B Power Electric Sesame snaps Freija cat food Lifecare pregnancy Toothbrush test

Green Boots green mould remover

Sento Caring Shampoo Panasonic AAA Batteries

18 CAPITAL MARKETS SEMINAR Price Unbeatable price offering based on multiple factors

We buy big No fixed Efficient logistics Low overhead volumes assortment costs

Low marketing Standardised store No high street Simple business expenditure processes locations model

19 CAPITAL MARKETS SEMINAR Surprise Surprising assortment essential for our strong customer proposition

2/3 of the assortment is constantly changing

> 150 new articles every week

Weekly specials

Seasonal offers

20 CAPITAL MARKETS SEMINAR Customer Loyal customer base is spreading the word

Total country-wide brand awareness and catchment area brand awareness(1)

Total country Catchment area 97 97

79 79 70 58 42

22

Prizes won in 2017 (country wide awards)

Living Department Department Best price Household General Gifts accessories store level goods & gifts (1) GfK Image and Awareness Study December 2017 / Source: Company information

21 CAPITAL MARKETS SEMINAR Customer Strong brand with a very strong conversion towards buying at Action

Awareness 97% 79% 58% 70%

Conversion from awareness to consideration 75% 59% 74% 54%

Consideration 73% 47% 43% 38%

Conversion from 96% 95% 73% 95% consideration to purchase

Buying behaviour(2) 70% 45% 31% 36%

National Within catchment area

(1) GfK Image and Awareness Study December 2017 / Source: Company information (2) % clients that purchased one or more products at Action in the previous six months

22 CAPITAL MARKETS SEMINAR Scalable Proposition travels across borders, allowing fast roll-out in several countries simultaneously 1,095

2012 2013 2014 2015 2016 2017 852

655 341 324 354 367 514 303 335 406 262 220 321 135 216 117 153 136 120 93 68 76 51 45 52 7 22 1 13 1 7 18 6

# of stores across countries Total # of stores

23 CAPITAL MARKETS SEMINAR Scalable Scalable supply chain with 2 new DCs in 2017 and 2 more DCs under construction

DC-A (Zwaagdijk, NL) DC-G (Peine, DE) Open Under Existing 2003 construction New in 2017 Under construction

DC-B (Echt, NL) Open Q2 2014 DC-D (Biblis, DE) Open Q2 2017

DC-C (Moissy, FR) Open Q2 2016 (Belleville, FR) DC-F Under DC-E (Labastide, FR) Open Q3 construction 2017

24 CAPITAL MARKETS SEMINAR People Company culture is fundamental to our success

1 Customer focus

2 Cost consciousness

3 Teamwork

4 Discipline

5 Simplicity

6 Respect

25 CAPITAL MARKETS SEMINAR 07/11/2017 People Experienced management team continues to deliver profitable growth

Action operating team

Executive Board members CEO CFO Sander van der Laan Frederik Lotz

Commercial Director Supply Chain Director Operations Director Hajir Hajji Joost Bous Bart Raeymakers

Communications Marketing Director Legal Director Director René Repko Rob Wesseling Yvette Moll

HR Director Real Estate Director IT Director Liz van der Werf Angus Booth Jens Burgers

26 CAPITAL MARKETS SEMINAR Significant focus on Action Social Responsibility

27 CAPITAL MARKETS SEMINAR 2017 performance and beyond Sander van der Laan

28 CAPITAL MARKETS SEMINAR 08/03/2018 Action has an ambition to become a €10 billion company

Action revenue in €m €10b

3,418 2,675 1,995 1,506 1,155 718 873 426 515 607

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 20xx

29 CAPITAL MARKETS SEMINAR 2017 was another strong year

2017 was another strong …but some areas Underlying performance year… required attention remains strong

• Like-for-Like at 5.3% • Supply chain transition • Like-for-Like sales growth • 243 stores added costs in all countries • EBITDA €387m (EBITDA • Soft performance in • Store openings pace margin of 11.3%) Decoration and Fashion increasing • Underlying margins improving

30 CAPITAL MARKETS SEMINAR In 2017 we focused on strengthening the company for future growth

Like-for-Like Expansion

Foundation

31 CAPITAL MARKETS SEMINAR Strong Like-for-Like sales growth in 2017 to be delivered again in 2018

Drive Like-for- Private Label Refresh Digital Marketing Like all New Category Programme Format Transformation Programme categories Sports

32 CAPITAL MARKETS SEMINAR Like-for-Like – continuous development of all 14 categories

• Overall Like-for-Like sales growth of 5.3% in 2017

• Healthy Like-for-Like growth in all markets

• Q4 showed softness in two of our product categories (Fashion & Decoration) 14 categories • Within categories, focus on: → Price → Surprise (newness) → Quality

33 CAPITAL MARKETS SEMINAR Like-for-Like – Sports will be introduced as our 14th category

• 14th category within Action assortment, taking over store space from fashion

• In store from March 2018 onwards with 9 meters of racking

• Starting with ~80 SKUs from existing assortment, increasing to ~125 SKUs by the end of 2018

• Assortment to focus on: → Sports clothing → Fitness equipment Existing assortment

• Own private label named Kaytan to be introduced during 2018

34 CAPITAL MARKETS SEMINAR Like-for-Like – steadily expanding our range of private labels

• Over the next years we want to invest significantly in our private label portfolio • Private labels are a big opportunity for Action: → Stronger Like-for-Like sales growth and margin performance compared to other non-branded products → Improves customers quality perception • Action has 53 private labels in its assortment, spread across all categories (17 more private labels compared to 2016)

35 CAPITAL MARKETS SEMINAR Like-for-Like – pilot started for a refreshed Action format

• Pilot started in 2017 in Haarlem (Netherlands)

• First findings positive: → Stimulates Like-for-Like development of stores → Enhances customer store experience → Brings innovation to the store

• Refreshed format will also be tested in Germany and Belgium

• Successful characteristics of refreshed store format to be incorporated in: → Blueprint new stores → Blueprint stores to be remodelled

36 CAPITAL MARKETS SEMINAR Like-for-Like – digital transformation on the move

• Customer experience to be strengthened over the coming years through improved digital presence via: → Website (www.action.com launched in 2017) → Social media → E-mail

• Action has significantly invested in its digital customer proposition in order to drive traffic and Like-for-Like sales growth, and will continue to do so in the coming years

Since launch of Independent fan action.com, the Social media base groups in FR and average number grew by almost NL counted more of visits per day 400% to 1.2 than 350.000 has increased million followers members each significantly

37 CAPITAL MARKETS SEMINAR Like-for-Like – optimising our non-digital marketing spend

2017 2018

6 times per year in 3 media

48 times per year 6 times per year in 2 media

New non-digital marketing spend expected to increase store traffic and Like-for-Like growth

38 CAPITAL MARKETS SEMINAR Continuous acceleration of growth via expansion to new countries and more store openings

Quality of Opening France Poland Remodelling Germany execution profile

39 CAPITAL MARKETS SEMINAR Expansion - acceleration of store opening pace continued in Germany, with 80 new stores in 2017

216

136 • Population 82.8m 17.1m 76 • Action stores 216 367 45 7 22 • Population per store 383k 47k

# of stores 2012 - 2017 Country statistics

• Country entered in 2009 • 80 new stores in 2017 • Local headquarter in Düsseldorf • 1 distribution centre operational in Biblis and 1 distribution centre under construction in Peine

40 CAPITAL MARKETS SEMINAR Expansion - growth in France has been significant, with 115 new stores in 2017

335

220 • Population 67.0m 17.1m

120 • Action stores 335 367 52 • Population per store 200k 47k 1 13

# of stores 2012 - 2017 Country statistics • Country entered in December 2012 • 115 new stores in 2017 • Local headquarter in Paris • Replaced Warehouse Service Provider for Moissy with XPO in 2017 • 2 distribution centres operational in France and 1 distribution centre under construction in Belleville

41 CAPITAL MARKETS SEMINAR Expansion – successful entry into Poland in 2017

• Six pilot stores were opened in the South-West of Poland in the fourth quarter • Action formula appeals to our new Polish customers and we are planning to open more stores in Poland in 2018 • In the process of setting up a local office in Katowice

42 CAPITAL MARKETS SEMINAR Expansion - further foundation for expansion

Remodelling Quality of execution Opening profile

• Step up in number of remodellings • Continuous improvement in quality • Create more equal spread of store with focus on NL and Belgium of new stores openings throughout the year • 2017: • Focus on improvement of people, • Current opening spread skewed → 10 store relocations processes and equipment towards Q4 → 3 store enlargements → 14 store refurbishments

Illustrative

Q1 Q2 Q3 Q4

43 CAPITAL MARKETS SEMINAR Foundation

Sourcing People Systems

44 CAPITAL MARKETS SEMINAR Foundation – developing Sourcing and Supply infrastructure to support long-term growth

Sourcing models (illustrative)

Far East Sourcing

Direct Sourcing Europe

Wholesalers

A-brands / local sourcing

• Network of ~1,000 suppliers, of which >400 direct suppliers • Diversity in sourcing models requires intensification in planning activities • Additional distribution centres required in the coming years to underpin store openings

45 CAPITAL MARKETS SEMINAR Foundation – growth to be supported by the right Systems & People

Systems (key focus areas)

In-store technology Supply Chain Digital HR (Payment terminals, (Planning, upgraded (Cloud-based system for all upgraded POS software, Warehouse Management (CRM) countries) headsets) software)

People

Significant leadership upgrades Very strong engagement levels

Further strengthening of country Rapid improvement of employer branding organisations

46 CAPITAL MARKETS SEMINAR Store roll out over the years (2013 – 2015 – 2017)

2013 2015 2017

47 CAPITAL MARKETS SEMINAR Still significant potential in existing and new countries

Population in million

17 12 67 83 9 38 282 % penetration %

NL BeLux FR DE AU PL Other EU

48 CAPITAL MARKETS SEMINAR Financial performance Frederik Lotz

49 CAPITAL MARKETS SEMINAR 08/03/2018 Consistent high growth track record

Rapid net sales growth (€m) Strong EBITDA growth (€m)

3,418

387 2,675

(1) 310

1,995 (1) 226 1,506 1,155 166 873 128 718 86 99 515 607 71 426 39 49

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 EBITDA margin

Source: Company information 50 CAPITAL MARKETS SEMINAR (1) Excluding impact of 53rd week Action’s repeatable economic model

1 2 • Consistent gross margin • Like-for-Like sales growth across categories Clear value Superior store • # new stores • All Like-for-Like stores drivers economics profitable • EBITDA margin • Converting EBITDA margins

3 4 • Proven • Low capital intensity Strong Excellent cash • Consistent • Negative working capital economic generation • Predictable • Very fast pay-back model • Robust

5 Tight centralised financial governance and control

51 CAPITAL MARKETS SEMINAR 1 Strong Like-for-Like sales growth Key Like-for-Like driver is increase in number of customers

7.6% 7.2% 6.9%

5.3%

2014 2015 2016 2017

Source: Company information 52 CAPITAL MARKETS SEMINAR 1 New store openings

(1) 244 6 11

197 6 115 141 1 100 108 68 85 39 Poland 12 Austria 15 80 23 31 60 France 17 Germany 25 24 41 18 18 BELUX 21 17 13 14 Netherlands 2013 2014 2015 2016 2017

Source: Company information 53 CAPITAL MARKETS SEMINAR (1) Net new store openings was 243 as a result of one store closing in the Netherlands 1 Limited seasonality in sales

Net sales by trading period EBITDA by trading period

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

2013 2014 2015 2016 2017

Source: Company information 54 CAPITAL MARKETS SEMINAR Note: Q1 comprises 4 periods of 4 weeks; Q2, Q3, Q4 all comprise of 3 periods of 4 weeks 1 Balanced revenue mix between countries Already over 60% of sales generated outside the Netherlands

Poland

Sales share by country by share Sales Austria Luxembourg France Germany Belgium Netherlands

2012 2013 2014 2015 2016 2017

Source: Company information 55 CAPITAL MARKETS SEMINAR 1 Superior growth versus selection of peers

31.0%

25.0% 24.7% 24.6%

Average 17.5%

14.8% 2017E Sales CAGR Sales 2017E - 12.1% 11.3% 10.6% 9.9%

2012 8.0%

(1) (2) (3)

Source: Company information, broker research Note: Sales not calendarised, fiscal year ending in January for , , Inditex and ; in February for ; in March for B&M and ; in November for H&M; in December Europris; 56 CAPITAL MARKETS SEMINAR (1) Mar-13 to Mar-18E CAGR; (2) Based on J.P. Morgan Research estimate (as of Dec-17); (3) Based on Dec-17A sales 2 Consistent margins across all categories

60%

50% (1) 40%

30%

% margin Gross % 20%

10%

0% 1 2 3 4 5 6 7 8 9 10 11 12 13 Category(2)

Source: Company information (1) (Net sales - Cost of goods sold) / Net sales 57 CAPITAL MARKETS SEMINAR (2) Excluding 14th category Sports 2 All Like-for-Like stores¹ are consistently profitable across all countries

600 Store Contribution (’000) Contribution Store

0 Store Contribution YTD Store Contribution % YTD

Source: Company information Note: Chart shows store contribution (€k) and store contribution as % of net sales (2017). Store contribution is store EBITDA before indirect store expenses 58 CAPITAL MARKETS SEMINAR (1) Like-for-Like stores includes all stores opened before 1 January 2017 2 Underlying country EBITDA margins increasing over time

+ ~70 bps + ~100 bps + ~150bps + ~150bps

-/- ~30bps Country EBITDA (%)margin EBITDA Country

Action Group EBITDA 2016 2017

Source: Company information 59 CAPITAL MARKETS SEMINAR 3 Very attractive pay-back periods for new stores

Highly attractive new store dynamics Average payback of new stores (illustrative)

• Rapid sales ramp-up post-opening ~ 3.0

• Real estate discipline driving low rent costs: → No high street locations → At market or lower than market rent ~1 year ~ 0.5 payback → Low maintenance capex period

~ -0.5 Upfront (1) Revenue (2) Store (3) capex per store EBITDA

Source: Company information 60 CAPITAL MARKETS SEMINAR 1) Including opening costs for new stores (2) Based on total sales/total number of stores (3) Including opening costs for new stores 3 Cashflow in 2016 benefitted from a non-recurring structural improvement

Operating cashflow 2016 - 2017

• Reported operating cashflow in 2017 declines vs 2016 268

• Significant difference as a result of structural 223 improvement in credit terms in 2016

• This windfall gain did not re-occur in 2017

• CAPEX per store in 2017 remains on par Cashflow Impact Normalised Higher Supply Higher Other Cashflow with 2016 2016 improvement cashflow EBITDA Chain expansion 2017 DPO 2016 2017 investments capex 20171 • Future operating cashflow ratios will depend on level of investments and will vary with fluctuations to year-end balances

Source: Company information 1) Excluding capex for new DCs 61 CAPITAL MARKETS SEMINAR 3 Action enjoys negative structural working capital

€0 • Total net working capital in Action is negative throughout the calendar year

• Creditors are fully financing

company inventories Net working Net capital in €m

• The faster Action grows, the stronger the cash flow performance

P1 P2 P3 P4 P5 P6 P7 P8 P9 P10 P11 P12 P13

2016 2017

Source: Company information 62 CAPITAL MARKETS SEMINAR 4 Strong economic model

Low and centralised overheads Rigorous, uniform and tight financial governance

• Buying • Daily performance tracking • Supply Chain • CEO/CFO approve all new stores • IT • One process for real estate • Finance

Proven Consistent Predictable Robust

Cost consciousness embedded in our organisation and a strong focus area for management

Source: Company information 63 CAPITAL MARKETS SEMINAR Action continued to deliver strongly in 2017

2017 2016 Change

Sales (€m) 3,418 2,675 +28%

Like-for-Like sales growth 5.3% 6.9%

Operating EBITDA (€m) 387 310 +25%

EBITDA margin 11.3% 11.6%

Number of stores 1,095 852 +243

Source: Company information 64 CAPITAL MARKETS SEMINAR Action presents a compelling long-term growth opportunity

Sales development of selected peers after reaching $1bn in sales Total sales in $ billion $ in sales Total

Years after reaching $1 billion in sales Source: Company information, Factset Note: Dollar General acquired (July 2015); a TJX figures from 1988 post sale of Zayre to Ames; sales start from $1.9bn b data as of 1st of January 1985 - no data available prior to 1985

65 CAPITAL MARKETS SEMINAR What do we expect from Reckitt Benckiser

Thank you for your attention!

66 RECKITT BENCKISER 07/11/2017