Retail & Consumer Deals Digest

www.pwc.com.au/dealsdigest Retail & Consumer Deals Digest May 2016

Consumer confidence ticks up Latest Australian ABS trade above long-run average results Consumer Confidence rose 2.0% to 113.9 The latest Australian Bureau of Statistics this week, partly reversing the fall in the (ABS) Retail Trade figures show that previous week and bringing confidence Australian retail turnover rose 0.4% in back above its long-run average. March 2016 (seasonally adjusted), Consumers appeared comfortable ahead following a rise in February of 0.1% and a of the Budget release on 4 May 2016, with rise of 0.4% in January 2016. few major policy measures likely to make a The sectors contributing to the rising significant hit to average family ‘wallets’. trend in the month of March 2016 were According to ANZ Economist Felicity Clothing, footwear and personal accessory Emmett, Consumer Confidence has been retailing (0.7%), Household goods volatile in the lead-up to the Budget, but retailing (0.2%), Other retailing (0.2%), the solid gain last week is a good sign, Food retailing (0.1%), and Department potentially driven in part by leaks around stores (0.1%). Cafes, restaurants and Retail & Consumer Deals Digest is a monthly bulletin the Budget suggesting no major hits to takeaway food services (0.0%) was providing a consolidated view households. It’s possible also, that the relatively unchanged in trend terms in of sector trends, deal activity recent speculation around the RBA rate March 2016. and relevant news headlines cut to a record low 1.75% may have in the retail & consumer On a state level, retail sales rose in trend sector. supported consumer sentiment over the terms in the Australian Capital Territory past week. The Budget is important in If you'd like to join this (0.8%), South Australia (0.3%), Victoria subscription or opt out, please shaping confidence over the next few (0.2%), Tasmania (0.2%), New South email [email protected] weeks in the lead-up to a double Wales (0.2%) and Queensland (0.1%). dissolution election in early July. Western Australia (0.0%) was relatively ANZ / Roy Morgan weekly consumer unchanged. Retail sales declined in trend confidence rating terms for Northern Territory (-0.1%) in March 2016. Sources: Australian Bureau of Statistics data, Reserve Bank of Australia

Source: ANZ / Roy Morgan Weekly Consumer Confidence Index

FY2016TD PCP LTM PCP Deal value (in A$m) # of deals Deal value # of deals Deal value # of deals Deal value # of deals Deal value $0 to $5M 0 0 0 0 0 0 0 0 $6 to $10M 7 60 15 130 9 74 16 138 $11 to $20M 13 209 15 220 18 290 20 288 $21 to $30M 6 140 6 149 7 161 6 149 $31 to $50M 6 227 7 299 6 227 8 338 $51 to $100M 9 672 10 749 12 904 12 917 $101 to $300M 10 1,576 13 2,010 12 2,015 16 2,543 $301 to $500M 2 712 2 703 3 1,122 3 1,153 >$500M 2 2,444 4 4,942 2 2,444 5 8,627 Subtotal 55 6,040 72 9,202 69 7,237 86 14,153 Undisclosed 27 n/a 32 n/a 33 n/a 40 n/a Total Announced 83 6,040 104 9,202 102 7,237 126 14,153 Total Completed 55 1,082 99 9,142 75 2,279 105 8,634 Source: Mergermarket; based on announced and completed transactions as at 11 May 2016 Notes: 1) FY2016TD refers to the period 1 July 2015 to 11 May 2016, reflecting the latest available Mergermarket data as at 11 May 2016 2) PCP refers to prior year comparable period Recently completed / announced deals • 6 May 2016 – Australian Pharmaceutical Manufacturers (APM), the Melbourne-based vitamins supplier is up for sale. APM is one of Swisse Wellness' three main suppliers and makes and packages a range of tablets, gels and powdered products. APM’s EBITDA has grown from A$1m to A$12m over the last few years.

• 4 May 2016 – Inner Mongolia Fuyuan Farming, a subsidiary of China Mengniu, the listed Hong Kong-based investment holding company, has agreed to acquire 79% stake in Burra Foods Australia from Itochu Corporation and Mr. Grant Crothers for a consideration of approximately A$ 237m . The enterprise value of the transaction is A$300m. Burra Foods’ founder, Grant Crothers and Itochu Corporation have maintained a combined 21 per cent interest in the company with Mr Crothers continuing in his role as Managing Director/CEO.

• 28 April 2016 – HanesBrands, the US listed intimate apparel and home furnishing manufacturer and retailer, announced that it has entered into a definitive agreement to acquire Pacific Brands for A$1.15 per share in cash. The transaction is valued at approximately USD800m on an enterprise value basis or slightly more than 10 times projected calendar 2016 EBITDA. The acquisition would be Hanes’ sixth in the past three years and would add Australia and New Zealand to the list of countries where the company holds the No. 1 or No. 2 market share position for underwear, intimate apparel or hosiery.

• 19 April 2016 – McCormick & Company, the US listed company, announced that it purchased 100% of the shares of Botanical Food Company, a privately held company based in Australia that manufactures and sells the Gourmet Garden brand of packaged herbs. McCormick engages in manufacture, marketing and distribution of spices, seasonings, specialty foods and flavours. The purchase price is approximately A$150m. The transaction multiple is expected to be around 12 times EBITDA. Gourmet Garden’s annual sales are approximately A$70m.

• 14 April 2016 – GUD Holdings announced that it has entered into an agreement to sell its 51% stake in Sunbeam Corporation Limited and and its 49% share of Jarden Consumer Solutions (Asia) Limited to its joint venture partner the US-based Sunbeam Products. GUD expects to receive cash of approximately AUD 35m (USD 26.8m) as a result of these transactions, which are expected to complete in July 2016.

Also recently in the news • Lindt & Sprüngli Australia will open its second Lindt Chocolate Shop in Queensland, at Harbour Town on the Gold Coast. The new shop, opening in late May or early June, will feature classic Lindt design elements and will offer Australia’s largest selection of Lindor pick and mix with exclusive flavours such as Irish cream and dark hazelnut. • Eastland shopping centre unveiled the next phase of its development with a new gallery and 80 new brands added. Eastland has added a new galleria, home to 80 brands, and ‘The Arcade’, a boutique space dedicated to crafted accessories and championing up-and-coming designers. Fashion and lifestyle brands who opened recently included Bonds, Tiger Mist, Levi’s, Bardot Junior, Adairs Kids, Build a Bear Workshop and Wheel & Barrow. • A new partnership announced between Lego Australia and entertainment company, Ardent Leisure, will see Australia get its first certified Lego store at Dreamworld theme park on the Gold Coast. The store’s 350sqm footprint represents the largest retail outlet at Dreamworld and will form part of a standalone precinct located at the front of the park with internal and external access to the theme park and general public. Construction will begin in July, with an opening date forecast for November, in time for peak Christmas trade. Over 400 items will be offered at the store, including extended product lines from overseas. Seasonal items pertinent to periods throughout the year, such as Easter and Christmas, will also be targeted via promotions. • Outgoing Scentre chairman, Frank Lowy, says now is the right time to hand the reins to director Brian Schwartz. Schwartz is taking over as chair of Scentre, the owner of Westfield shopping malls in Australia and New Zealand, after being re-elected to the board at the company’s annual general meeting (AGM) in Sydney on Thursday. Lowy said he had seen through the Scentre transition and provided continuity for the group which split from its parent company Westfield Corp in mid 2014. • Auto and sports brands, Super Retail Group, said sales across its three divisions are in line with expectations and the transformation of its Ray’s Outdoors business is well under way. The company stated a new Rays store concept has been developed and tested in five pilot stores which either opened or were refurbished in the second quarter of the 2015/16 financial year. The early trading performance of the pilot stores, according to the company, ‘confirmed that profitable opportunities exist’ for the business, though the network will produce a loss this financial year. The group plans to close or rebrand under-performing stores and update profitable stores to the new concept. There will be a $38 million write down of the business in addition to the $20 million impairment taken at the half year. • Uniqlo has partnered with Jetstar to celebrate the launch of its first store on the Gold Coast at the redeveloped Pacific Fair Shopping Centre. The store opens to the general public today as part of AMP Capital’s $670 million redevelopment of the shopping centre which commenced in January 2014. Yesterday, the Japanese apparel retailer hosted a ‘mystery shop-hop,’ partnering with Jetstar to surprise a group of consumers with a shopping trip to its first store on the Gold Coast. The stunt included a specially chartered mystery flight carrying excited Melburnians to a mystery shopping trip at an unknown destination, flown on a Uniqlo-branded Jetstar A320 aircraft. • More leading local and global brands will soon open at Pacific Werribee as stage three of its $400 million landmark redevelopment nears completion. Swedish retail giant, H&M, and Japan-based retailer, Uniqlo, will soon open stores at the mall, alongside an expanded Myer, which will be three times its previous size. The centre will also become home to a new 800sqm Cotton On store, jewellery retailer Swarovski and stationery brand, Kikki.K. • The Good Guys, has appointed Corey Hedin as chief retail officer in its executive leadership team. In his new role, Hedin will be a valued partner and change leader, driving strong performance in the field to support the company’s growth and transformation agenda.

Source: Inside Retail

© 2016 PricewaterhouseCoopers. All rights reserved. PwC refers to the Australian member firm, and may sometimes refer to the PwC network. Each member firm is a separate legal entity. Please see www.pwc.com/structure for further details. This material has been prepared by PwC for general circulation on matters of interest only. It is not advice and does not take into account the objectives, financial situation or needs of any recipient. Any recipient should, before acting on this material, make their own enquiries and obtain their own professional advice in relation to any issue or matter referred to herein. We do not, in preparing this material, accept or assume responsibility for any purpose or to any person to whom this material is shown and shall not be liable in respect of any loss, damage or expense whatsoever caused by any use the reader June choose to make of this material. © 2016 PwC. All rights reserved. "PwC" refers to PricewaterhouseCoopers, an Australian limited liability partnership, or as the context requires, the PricewaterhouseCoopers global network or other member firms of the network each of which is a separate and independent legal entity. Also recently in the news (cont’d) • Kikki.K continues to establish itself in the UK market, opening its first concession within British department store, Selfridges, last week. Located in London’s Oxford Circus, the department store receives around 200 million visitors each year and will range a selection of Kikki.K products, also available via Selfridges’ online store. The move follows the opening of a pop-up store and permanent Kikki.K store in Covent Garden in December 2015. Kikki.K has 80 stores globally, across Australia, New Zealand, Singapore, Hong Kong and London. • Woolworths shares have dropped six per cent after the supermarket giant had its credit rating downgraded following poor sales figures. Ratings agency Standard & Poor’s downgraded Woolworths by one notch from BBB+ (outlook negative) to BBB (outlook stable) last week. The news dragged Woolworths shares down to $20.93, just above the near 10-year low of $20.69 it hit in mid-April. The downgrade came a day after Woolworths reported that comparable food and liquor sales, a key growth indicator, fell 0.9 per cent in the 13 weeks to April, with total sales amounting to $10.7 billion. • JB Hi-Fi is confident its sales will continue to grow, driven by promotions and new tax cuts for small businesses. The electronics and homewares retailer’s total sales rose 8.6 per cent in the three months to March, while like-for- like sales, which excludes the impact of new stores and closures, were up 5.2 per cent. The company said it has a strong promotional plan for May and June, and newly announced tax incentives for small businesses should also help sales. • Failed electronics chain, Dick Smith, has been relaunched as an online-only retailer by its new owner, a day after the company’s last bricks-and-mortar stores closed. Kogan.com, the company that bought the Dick Smith online business, announced it had launched new Dick Smith sites in Australia and New Zealand a month ahead of schedule. Kogan.com stated its team managed to build a fully responsive online platform for Dick Smith in under two months, allowing customers to shop on any connected device. The platform leverages the existing operations and logistics infrastructure of the Kogan.com business. • Retail industry bodies, including the Australian Retailers Association (ARA), have welcomed the government’s Federal Budget, which announced company tax cuts for small to medium business and personal tax cuts for consumers. Small-to-medium businesses will get $5.3 billion in tax breaks over the next four years as the federal government attempts to kick start the economy’s post-mining boom recovery. Small businesses will be the first to benefit, while major corporations have been promised their first tax rate cut in two decades – but not until 2023. • H&M has announced two new stores will open in Melbourne at Pacific Werribee and Chadstone Shopping Centre later this year. H&M at Pacific Werribee will be the site of H&M’s third store in Melbourne and open on 28 July. The store will span approximately 2400sqm and be set over one level. H&M at Chadstone Shopping Centre will open in the second half of 2016. • Vicinity Centres has announced plans to develop a $145 million outlet centre at Perth Airport with construction to commence in mid-2017. The outlet centre will be branded DFO and funded by both Vicinity and Perth Airport Pty Ltd (PAPL) as part of a joint venture. The proposed development will include over 110 stores across 24,000sqm with 1600 parking spaces. • Woolworths launched two new stores last week in Sydney, asserting that local residents will see some of Australia’s ‘most modern supermarkets.’ Woolworths Crows Nest (3800sqm), located at the corner of Alexander and Burlington Streets, is part of a $52 million investment with Woolworths’ Mascot store (3200sqm) the result of a $6.2 million investment. The Crows Nest store includes a butcher, delicatessen, fresh sushi bar and has 22 checkouts. Mascot has a a fresh sushi bar, on-site liquor store and 26 checkouts. Both stores will ‘focus on wellness’ with the Woolworths Macro range including free range, ‘free from’ and organic choices. • ANZ has become the first of Australia’s big four banks to sign up to Apple Pay, which lets customers use their mobiles as credit cards. Customers with an ANZ American Express or Visa card can opt to swipe their iPhone or Apple Watch to make contactless payments. Along with the others, ANZ will also be part of the Android Pay system planned to launch later this year. Source: Inside Retail

Share Mkt Net Dividend EV / EBITDA EV / EBIT PE TSR % price cap EV debt / Yield Actual Forecasts Growth Actual Forecasts Growth Actual Forecasts Company Currency $ million million EV LTM % Apr-16 LTM CY2016 CY2017 LTM-17 LTM CY2016 CY2017 LTM-17 LTM CY2016 CY2017 Restaurants / Fast Food Domino's Pizza Enterprises Limited AUD 64.38 5,643 5,732 2% 1.0 10% 41.7x 27.9x 22.1x 37.3% 50.4x 34.4x 26.8x 37.0% n/m 54.1x 42.3x Retail Food Group Limited AUD 5.62 927 1,113 17% 4.4 8% 13.6x 9.7x 8.9x 23.7% 14.7x 10.2x 9.4x 25.0% 22.0x 13.3x 12.2x Restaurant Brands New Zealand Ltd. NZD 5.20 535 547 2% 4.0 5% 10.6x 8.6x 7.8x 16.5% 15.8x 12.5x 10.9x 20.3% 24.7x 18.0x 15.8x Collins Foods Limited AUD 4.26 396 518 23% 2.9 -4% 7.2x 6.7x 6.3x 7.0% 10.3x 9.5x 8.8x 7.8% 15.3x 12.3x 11.3x Mean 18.3x 13.2x 11.3x 21.1% 22.8x 16.7x 14.0x 22.5% 20.7x 24.4x 20.4x Median 12.1x 9.1x 8.3x 20.1% 15.3x 11.4x 10.2x 22.7% 22.0x 15.7x 14.0x FMCG - Beverage Coca-Cola Amatil Limited AUD 8.64 6,597 8,219 16% 5.0 0% 9.1x 8.6x 8.4x 4.4% 12.4x 12.2x 11.8x 2.7% 18.9x 16.2x 15.7x Treasury Wine Estates Limited AUD 9.98 7,358 6,930 -6% 1.6 -2% 26.6x 14.0x 11.9x 49.4% 37.7x 17.7x 14.4x 61.6% n/m 29.4x 24.6x Delegat Group Limited NZD 5.80 587 838 30% 1.9 3% 9.6x 10.2x 9.0x 3.4% 11.2x 12.5x 11.0x 0.7% 15.9x 15.2x 13.3x Australian Vintage Limited. AUD 0.55 128 223 43% - 16% 10.8x 7.5x n/m n/a 15.1x 9.9x n/m n/a 20.9x 10.3x n/m Gage Roads Brewing Co Limited AUD 0.05 21 28 26% - -11% 15.0x n/m n/m n/a 47.3x n/m n/m n/a n/m n/m n/m Mean 14.2x 10.1x 9.7x 19.1% 24.7x 13.1x 12.4x 21.7% 18.6x 17.8x 17.9x Median 10.8x 9.4x 9.0x 4.4% 15.1x 12.3x 11.8x 2.7% 18.9x 15.7x 15.7x FMCG - Food & Dairy Fonterra Co-Operative Group Ltd. NZD 5.82 9,324 16,822 44% 6.0 2% 10.5x n/m n/m n/a 14.7x n/m n/m n/a 21.0x n/m n/m Blackmores Limited AUD 170.80 2,942 2,919 -1% 2.0 -9% 20.5x 17.6x 15.7x 14.1% 21.4x 17.9x 15.5x 17.4% n/m 26.8x 23.9x Bega Cheese Limited AUD 6.15 939 1,014 7% 1.5 6% 19.1x 14.0x 12.2x 25.3% 32.4x 20.6x 17.2x 37.1% 53.3x 28.4x 23.6x Bellamy's Australia Limited AUD 10.65 1,029 1,001 -3% 0.7 0% 38.2x 14.1x 9.6x 99.1% 38.5x 14.2x 9.7x 99.2% n/m 20.6x 14.0x The a2 Milk Company Limited NZD 1.77 1,280 1,244 -3% - -6% n/m 20.0x 14.1x n/a n/m 20.7x 14.5x n/a n/m 29.9x 20.2x Warrnambool Cheese And Butter Factory CompanyAUD Holdings 9.00 Limited 505 716 29% - -6% 15.7x n/m n/m n/a 23.2x n/m n/m n/a 21.5x n/m n/m Freedom Foods Group Limited AUD 3.50 631 599 -5% 0.9 -11% 49.5x 22.1x 16.3x 74.1% n/m 29.2x 21.2x n/a n/m 45.2x 32.6x Vitaco Holdings Limited AUD 1.75 244 339 22% - -3% 12.1x 11.1x 9.5x 13.0% 13.5x 12.8x 10.7x 12.6% n/m 17.2x 14.5x Synlait Milk Limited NZD 3.37 493 785 37% - 16% 12.3x 9.2x 8.3x 21.7% 16.9x 12.8x 11.4x 21.6% 20.4x 15.1x 12.9x Comvita Limited NZD 12.00 479 538 11% 1.3 19% 21.9x 14.0x n/m n/a 28.2x 16.7x n/m n/a 40.7x 23.6x n/m Patties Foods Limited AUD 1.26 176 251 30% 6.1 9% 10.0x 7.6x 7.1x 18.6% 15.2x 10.3x 9.5x 26.6% 19.4x 11.0x 10.0x Capilano Honey Limited AUD 22.15 190 211 10% 1.7 13% 13.1x 11.2x 9.9x 15.3% 14.5x 12.5x 10.9x 15.1% 22.0x 16.8x 14.6x Mean 20.3x 14.1x 11.4x 35.2% 21.9x 16.8x 13.4x 32.8% 28.3x 23.5x 18.5x Median 15.7x 14.0x 9.9x 20.1% 19.2x 15.5x 11.4x 21.6% 21.5x 22.1x 14.6x FMCG - Food (Production) Australian Agricultural Company Limited AUD 1.48 789 1,171 33% - 11% n/m 36.6x 28.3x n/a n/m n/m n/m n/a n/m n/m n/m Costa Group Holdings Limited AUD 2.92 931 1,043 11% 1.0 3% 27.4x 12.1x 10.6x 60.4% 54.0x 16.6x 14.5x 92.9% n/m 17.9x 15.9x Select Harvests Limited AUD 4.86 354 407 13% 11.5 19% 4.0x 7.5x 7.2x -25.5% 4.6x 9.8x 9.5x -30.2% 6.9x 13.0x 12.9x Tassal Group Limited AUD 3.86 568 703 19% 3.8 6% 7.7x 7.6x 6.8x 6.2% 10.0x 9.9x 8.8x 6.7% 14.2x 13.7x 12.3x Webster Ltd. AUD 1.14 400 571 30% 0.9 -6% n/m 13.5x 9.8x n/a n/m 18.9x 12.7x n/a n/m 20.3x 13.3x Sanford Ltd. NZD 5.80 542 693 22% 4.0 -2% 10.7x 8.6x 8.0x 16.0% 13.9x 10.7x 10.0x 17.8% 23.7x 13.7x 12.7x Huon Aquaculture Group Limited AUD 3.35 293 340 14% - 4% n/m 9.4x 6.5x n/a n/m 15.5x 8.4x n/a n/m 29.5x 13.5x Mean 12.4x 13.6x 11.0x 14.3% 20.6x 13.6x 10.7x 21.8% 15.0x 18.0x 13.4x Median 9.2x 9.4x 8.0x 11.1% 12.0x 13.1x 9.8x 12.2% 14.2x 15.8x 13.1x FMCG - Other Asaleo Care Limited AUD 1.95 1,099 1,359 19% 5.1 9% 9.5x 9.5x 9.2x 1.7% 11.6x 11.9x 11.4x 1.1% 17.4x 14.7x 13.9x BWX Limited AUD 4.84 443 439 -1% - 11% 40.5x 19.4x 16.1x 58.8% 42.4x 21.3x 18.3x 52.0% 47.4x 28.8x 23.7x Trilogy International Limited NZD 3.38 211 250 15% 1.1 -5% 28.3x 19.1x 14.5x 39.6% 29.1x 20.1x 15.1x 38.9% 44.4x 17.8x 13.7x Pental Limited AUD 0.63 85 74 -15% 4.5 -3% 7.3x n/m n/m n/a 8.9x n/m n/m n/a 15.9x n/m n/m Mean 21.4x 16.0x 13.2x 33.4% 23.0x 17.8x 14.9x 30.7% 31.3x 20.4x 17.1x Median 18.9x 19.1x 14.5x 39.6% 20.4x 20.1x 15.1x 38.9% 30.9x 17.8x 13.9x E-commerce SEEK Limited AUD 16.98 5,843 6,640 2% 2.2 5% 18.2x 16.4x 14.8x 10.9% 19.8x 19.8x 17.3x 6.9% 38.4x 29.4x 25.1x REA Group Limited AUD 52.55 6,922 6,814 -2% 1.5 -4% 22.2x 17.3x 14.9x 21.9% 22.9x 18.9x 16.0x 19.8% 38.8x 28.1x 23.7x carsales.com Limited AUD 12.73 3,069 3,274 6% 2.8 1% 20.5x 18.1x 16.8x 10.2% 21.0x 18.9x 17.5x 9.6% 33.7x 26.4x 23.8x Trade ME Group Ltd. NZD 4.74 1,882 2,002 6% 3.4 4% 15.9x 13.4x 12.4x 13.3% 16.6x 15.4x 14.3x 7.8% 26.8x 21.4x 19.5x Webjet Ltd. AUD 6.19 501 455 -10% 2.2 0% 15.6x 11.7x 9.8x 26.3% 17.3x 13.8x 11.3x 23.5% 29.8x 20.7x 16.5x Infomedia Ltd. AUD 0.60 184 169 -9% 5.6 -2% 9.2x 6.4x 6.0x 23.5% 9.7x 9.8x 9.1x 2.9% 18.3x 13.9x 12.7x Mean 16.9x 13.9x 12.4x 17.7% 17.9x 16.1x 14.2x 11.7% 31.0x 23.3x 20.2x Median 17.0x 14.9x 13.6x 17.6% 18.5x 17.2x 15.1x 8.7% 31.7x 23.9x 21.6x Source: PwC calculations based on CapitalIQ data and publicly available information; share prices as at 6 May 2016 market close Notes: 1) Information from CapitalIQ used in calculations has not been verified or adjusted, unless otherwise noted 2) 2016 and 2017 calendar year forecasts represent consensus estimates for each company © 2016 PricewaterhouseCoopers. All rights reserved. PwC refers to the Australian member firm, and may sometimes refer to the PwC network. Each member firm is a separate legal entity. Please see www.pwc.com/structure for further details. This material has been prepared by PwC for general circulation on matters of interest only. It is not advice and does not take into account the objectives, financial situation or needs of any recipient. Any recipient should, before acting on this material, make their own enquiries and obtain their own professional advice in relation to any issue or matter referred to herein. We do not, in preparing this material, accept or assume responsibility for any purpose or to any person to whom this material is shown and shall not be liable in respect of any loss, damage or expense whatsoever caused by any use the reader may choose to make of this material. © 2012 PwC. All rights reserved. "PwC" refers to PricewaterhouseCoopers, an Australian limited liability partnership, or as the context requires, the PricewaterhouseCoopers global network or other member firms of the network each of which is a separate and independent legal entity. Retail sector multiples (cont’d)

Source: PwC calculations based on CapitalIQ data and publicly available information; share prices as at 6 May 2016 market close Notes: 1) Information from CapitalIQ used in calculations has not been verified or adjusted, unless otherwise noted 2) 2016 and 2017 calendar year forecasts represent consensus estimates for each company © 2016 PricewaterhouseCoopers. All rights reserved. PwC refers to the Australian member firm, and may sometimes refer to the PwC network. Each member firm is a separate legal entity. Please see www.pwc.com/structure for further details. This material has been prepared by PwC for general circulation on matters of interest only. It is not advice and does not take into account the objectives, financial situation or needs of any recipient. Any recipient should, before acting on this material, make their own enquiries and obtain their own professional advice in relation to any issue or matter referred to herein. We do not, in preparing this material, accept or assume responsibility for any purpose or to any person to whom this material is shown and shall not be liable in respect of any loss, damage or expense whatsoever caused by any use the reader may choose to make of this material. © 2012 PwC. All rights reserved. "PwC" refers to PricewaterhouseCoopers, an Australian limited liability partnership, or as the context requires, the PricewaterhouseCoopers global network or other member firms of the network each of which is a separate and independent legal entity. Retail sector multiples (cont’d)

Supermarkets Wesfarmers Limited AUD 42.56 47,928 53,516 10% 4.7 4% 11.6x 10.2x 9.4x 11.1% 15.6x 13.7x 12.4x 11.9% 22.2x 19.0x 17.3x Woolworths Limited AUD 21.21 27,063 30,906 11% 5.5 1% 8.6x 8.3x 8.1x 3.1% 12.2x 11.8x 11.4x 3.6% 15.0x 16.2x 15.6x Metcash Limited AUD 1.79 1,657 2,121 22% - 4% 6.1x 6.3x 6.2x -0.9% 7.2x 7.9x 7.8x -3.8% 10.4x 10.0x 9.9x Mean 8.8x 8.3x 7.9x 4.4% 11.7x 11.1x 10.5x 3.9% 15.9x 15.0x 14.2x Median 8.6x 8.3x 8.1x 3.1% 12.2x 11.8x 11.4x 3.6% 15.0x 16.2x 15.6x

EV/forward EBITDA multiples (over last 24 months)

EV/Forward EBITDA Multiples EV/Forward EBITDA Multiples EV/Forward EBITDA Multiples 12.0x 17.0x 16.0x

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Supermarkets Department Stores Apparel Household Goods Diversified Retail Automotive Retail E-commerce Restaurants / Fast Food FMCG - Food & Dairy FMCG - Beverage FMCG - Food (Production) E-commerce Source: PwC calculations based on CapitalIQ data and publicly available information; share prices as at 6 May 2016 market close Notes: 1) Information from CapitalIQ used in calculations has not been verified or adjusted, unless otherwise noted 2) 2016 and 2017 calendar year forecasts represent consensus estimates for each company © 2016 PricewaterhouseCoopers. All rights reserved. PwC refers to the Australian member firm, and may sometimes refer to the PwC network. Each member firm is a separate legal entity. Please see www.pwc.com/structure for further details. This material has been prepared by PwC for general circulation on matters of interest only. It is not advice and does not take into account the objectives, financial situation or needs of any recipient. Any recipient should, before acting on this material, make their own enquiries and obtain their own professional advice in relation to any issue or matter referred to herein. We do not, in preparing this material, accept or assume responsibility for any purpose or to any person to whom this material is shown and shall not be liable in respect of any loss, damage or expense whatsoever caused by any use the reader may choose to make of this material. © 2012 PwC. All rights reserved. "PwC" refers to PricewaterhouseCoopers, an Australian limited liability partnership, or as the context requires, the PricewaterhouseCoopers global network or other member firms of the network each of which is a separate and independent legal entity. Retail sector trends

As reported by the ABS, the trend for Australia retail turnover for March 2016 (compared to March 2015) Contact us increased by 3.6%: If you would like to discuss any of the information in • Food retailing: The seasonally adjusted estimate this newsletter, please contact one of our Deals Retail for Food retailing rose 0.6% in March 2016. By and Consumer specialists: industry subgroup, the seasonally adjusted estimate rose for Liquor retailing (1.4%), Supermarket and grocery stores (0.4%) and Other specialised food retailing (1.8%). Kate Warwick • Household goods retailing: The seasonally Partner, adjusted estimate for household goods retailing rose 0.1% in March 2016. By industry subgroup, the Melbourne seasonally adjusted estimate rose for Electrical and Tel: +61 (3) 8603 3289 electronic goods retailing (1.2%) and fell for Furniture, floor coverings, houseware and textile Email: [email protected] goods retailing (-1.4%) . Hardware, building and garden supplies retailing was relatively unchanged(0.0%). James Gulbin • Clothing, footwear and personal accessory retailing: The seasonally adjusted estimate for Managing Director, Clothing, footwear and personal accessory retailing Sydney rose 1.1% in March 2016. By industry subgroup, the seasonally adjusted estimate rose for Clothing Tel: +61 (2) 8266 0868 retailing (2.2%) and fell for Footwear and other personal accessory retailing (-1.1%). Email: [email protected]

• Department stores: The seasonally adjusted estimate for department stores fell 0.5% in March 2016.

• Cafes, restaurants and take-away food services: The seasonally adjusted estimate for cafes, restaurants and takeaway food services was relatively unchanged in March 2016. By industry subgroup, the seasonally adjusted estimate rose for Takeaway food services (0.8%) and fell for Cafes, restaurants and catering services (-0.5%). • Other retailing: The seasonally adjusted estimate for Other retailing rose 0.4% in March 2016. By industry subgroup, the seasonally adjusted estimate rose for Other recreational goods retailing (2.0%), Pharmaceutical, cosmetic and toiletry goods retailing (1.4%), Newspaper and book retailing (0.6%), and fell for Other retailing n.e.c (-1.2%).

Source: Australian Bureau of Statistics data