Merrill Lynch Consumer Focus Day November 2003

1. Merrill LynchConsumer Focus Day November 2003

2. Healthcare Strategy in South Africa • Strategy • UPD • Clicks • Clicks Pharmacy “The realisation of a dream”

3. Multibrand Strategy – South Africa Health Beauty Lifestyle Consolidated Retail Pharmacy Specialist Wholesale

4. Healthcare Strategy • Leverage benefits of integrated channel to market • Extend retail presence & expertise into pharmacy • Establish efficient, compliant & profitable low-cost drugstores • Promote co-ownership model • Improve front to back shop ratio • Synergies from combining pharmacy with current offering - lower overheads & increased footfall • Franchise model retained – using compliant format • Explore black empowerment opportunities

5. Wholesale & distribution - UPD model • Profitable well run business • Efficient working capital management • Largest national wholesaler in SA • Expertise in fine distribution UPD provides distributionfor integrated channel to market UPD 43%of other wholesalebusiness

6. Integrated channel to market • Pharmacies carry less stock • Act as warehouse for pharmacies • Distribution & service levels key

7. UPD – in short • Growth in turnover from PM&A & independent pharmacies • Retained most independent pharmacy customers • Standardised terms on FMCG suppliers • Clicks pricing on top FMCG lines available to customer base • Two franchise models in the group – Link + Multicare • Develop Link offering as premium banner • Develop programmes to enhance Link pharmacy loyalty to UPD – new franchise agreement

8. Impact of legislation on UPD Original source procurement • Levelling of the playing field – ethical standards + transparency • Small impact on current wholesale customers • Service levels will be the differentiator Generic substitution • Single channel distribution - lower market shareof branded ethicals - better placed to benefit • Currently, margins better Single exit pricing • Timing – early 2004 • Lack of clarity “Generally positive for UPD”

9. “The realisation of a dream”

10. Clicks - The Vision • To create an experience of pharmacy that has never been seen before in SA • To combine the best of what Clicks offers with the best of the pharmacy experience • To enhance the Clicks brand qualities of value with convenience & service

11. Pharmacy in Clicks • Regulatory approval for PM&A deal • Application for licences • PM&A • Additional licences in selected stores • Underserviced areas – discuss with government • All New Clicks wholly-owned/JV pharmacies to be rebranded Clicks

12. Format 1 Clicks Health, Home & Beauty with Dispensary • Health & dispensary as additional components to our current understanding of Clicks • Value for money • Servicing woman’s world “For me, my home, my life” • Heavy promotional drive

13. Format 2 Clicks Health and Beauty with Dispensary • Health & Beauty focus supported by gifting & convenience statement • Personal connection to pharmacist • Strong promotional offering • Strong value statement • Convenience & longertrading hours

14. What the customers had to say... • Customers expected Glengariff to be like a Clicks with an added pharmaceutical department • The relationship with the pharmacist & customer service are key • Clicks Pharmacies would be more price competitive than other pharmacies • Can I use my ClubCard? “Glengariff opens shortly Systems ready ClubCard ready”

15. Learning from Australia Conversions: • Converting existing Priceline store (Prahran) • Sales growing in excess of 40% • Back & middle shop sales already at 18% - should double • Converting existing pharmacy (Bentleigh) • Script sales grown by 20% • Front shop sales up from 10% to 75% New site: • Mornington • Turnover A$45k per week from 300m² • Front shop sales 50%

17. Questions ?

18. Thank You