Thematic newsletter u k consumers sample 2 by Sutherland Global Services

Q1 2013 Review

UK CONSUMER NEWSLETTER

UK Consumer & Retail June 2013

Key Highlights  Consumer and Retail sector has been adversely impacted by households cutting back expenses and weak confidence about the future; the bright spot in Q1‟13 was the news that the UK economy expanded by 0.3%, avoiding a second consecutive quarter of contraction.  Signs of slow recovery were also evident as consumer confidence stabilized in Q1‟13 and consumer sentiment on spending continued to improve.  M&A activity in the UK Consumer and Retail sector picked up pace with a 17.1% QoQ increase in Q1‟13 volume as companies were compelled to equip themselves to the constantly changing consumer tastes and the need to build scale.  There was absence of large deals, and total transaction disclosed values declined in Q1‟13 to a two-year low of $755M, down from $5,829M in Q4‟12.  Packaged Food and Meats segment remained favorite with strategic buyers in the Consumer sector, attracting 29% of the quarterly M&A Consumer volume, while Non-Food Distributors remained favorite with strategic buyers in the Retail sector, attracting 31% of the M&A Retail volume  Financial sponsors maintained the buyout momentum with 15 deals in Q1‟13, of which 10 being in the Retail sector. However, there was a significant QoQ decline in the number of private placements as only 7 firms raised private capital.

UK Consumer & Retail – Equity Performance  All but two of the consumer and 1 Yr retail indices, „Apparel & Luxury Consumer Durables 70.7% Non Food Retail 60.8% Goods‟ and „Food & Staple Retail‟ Household & Personal Products 30.6% outperformed the FTSE 100 index 21.6% 190% Food, Beverage & Tobacco in the last 12 months. FTSE 100 15.1% Food & Staples Retail 12.5%  Consumer Durables and Non160% Apparel & Luxury Goods (5.7%) Food Retail indices significantly outperfomed the pack for 1-year, 130% 3- month and 1-month period. The growth was primarily driven by 100% good performance of companies like Walker Greenbank and 70% Photo‑Me International in the Jun-12 Aug-12 Sep-12 Nov-12 Consumer Durables segment and Food Beverage & Tobacco Apparel & Luxury Goods online & consumer durable Food & Staples Retail retailers in the Non-Food Retail FTSE 100 segment. In contrast to both these indices, rest of the indices had negative returns over the last one month.

3 Mnths 1 Mnth

21.4%

6.3%

24.2%

6.5%

2.1%

(1.4%)

0.8%

(3.8%)

(3.2%)

(4.9%)

(1.3%)

(5.6%)

(1.1%)

(0.3%)

Jan-13

Feb-13

Apr-13

Jun-13

Household & Personal Products Consumer Durables Non Food Retail

Source: CapitalIQ

2|Page July 5, 2013

UK Consumer & Retail June 2013

UK Economic Outlook  The UK economy grew by 0.3% in the first quarter of 2013, successfully avoiding a second consecutive quarter of contraction, which would have been the signal for a triple-dip recession in 2013. Real GDP Growth

6.0%

QoQ

YoY

0.3%

0.6% 3Q'10

0.9%

0.7% 2Q'10

0.6%

0.6% 1Q'10

0.1%

0.4% 4Q'09

0.5%

0.4% 3Q'09

0.1% 1Q'08

1.2% 3Q'07

0.2%

1.2% 2Q'07

4Q'07

1.1%

2.0%

1Q'07

4.0%

(0.3%)

(0.1%) 1Q'12

(0.4%)

(0.1%) 4Q'11

(0.4%)

(0.2%)

(1.5%)

(2.1%) 4Q'08

(4.0%)

(1.8%)

(2.0%)

3Q'08

(0.9%)

0.0%

(6.0%)

1Q'13

4Q'12

3Q'12

2Q'12

3Q'11

2Q'11

1Q'11

4Q'10

2Q'09

1Q'09

2Q'08

(8.0%)

 Unemployment rose in Q1‟13 along with the lowest growth in average earnings since 2009, indicating concerns at the slow pace of recovery.  Inflation rate remained stable in Q1‟13, near 2.8%. Inflation fell in April 2013 to 2.4%, bringing some relief to consumers. Bank of England expects inflation to exceed 3% later this year and remain above its 2% target until early 2016. UnemploymnetRate Rateand andEarnings EarningsGrowth Growth Unemployment

10.0%

Average Weekly Earnings Growth 8.0%

8.0%

6.0%

4.0%

2.0%

Unemployment Rate

Mar-13

Mar-12

Mar-11

Mar-10

Mar-09

Mar-08

Mar-07

Mar-06

Mar-05

Mar-04

Mar-03

Mar-02

Mar-13

May-12

Jun-11

Aug-10

Sep-09

(4.0%)

Nov-08

(4.0%)

Dec-07

(2.0%)

Jan-07

(2.0%)

Mar-01

0.0%

Earnings Growth

Source: Bloomberg

3|Page July 5, 2013

UK Consumer & Retail June 2013  Consumer confidence stabilized in Q1‟13 and reached a six-month high in May 2013 as triple-dip recession fears receded. The major purchases measure reached -23 in March 2013, eight points higher than that in March 2012  Consumers are becoming less gloomy about the economy and the state of their own finances amid signs indicating improvement in the outlook for growth GFK UK Consumer Confidence Indicator 0

GFK UK Consumer Confidence - Climate for Major Purchases

(10)

0 (20)

(10) (20)

(30)

(40)

 Rise in commodity prices over the years has impacted buying behavior of shoppers. The so-called “budget supermarkets” segment is the net beneficiary of this squeeze.  The industry witnessed that more and more consumers switched to the format specializing in deep discounted products in an attempt to shrink their household budgets.  Higher commodity prices are prompting food retailers to put pressure on manufacturers, which, in turn, is opening the door to consolidation among food producers. Gold & Silver

Select Agri-Commodties

380.0

280.0

340.0

250.0

Gold

Silver

May-13

Apr-12

Apr-11

Mar-10

70.0 Mar-09

60.0 Feb-08

100.0 Jan-07

100.0

Wheat

Corn

May-13

130.0

Apr-12

64.7%

140.0

74.1%

160.0

Apr-11

180.0

98.2%

Mar-10

112.5%

190.0

Mar-09

220.0

120.8%

Feb-08

260.0

220.0

Jan-07

300.0

Soyabean

Source: Bloomberg

4|Page July 5, 2013

May-13

Oct-12

Apr-12

Sep-11

Feb-11

Jul-10

Dec-09

May-09

Oct-08

Mar-08

Aug-07

(50)

Jan-07

May-13

Oct-12

Apr-12

Sep-11

Feb-11

Jul-10

Dec-09

May-09

Oct-08

Mar-08

Aug-07

Jan-07

(50)

UK Consumer & Retail June 2013

UK Consumer & Retail – 1Q’13 M&A Activity Q1’13 deal value is down substantially

1Q'10

2Q'10

3Q'10

4Q'10

1Q'11

2Q'11

3Q'11

4Q'11

1Q'12

2Q'12

3Q'12

1Q'10

2Q'10

3Q'10

4Q'10

1Q'11

2Q'11

3Q'11

4Q'11

1Q'12

2Q'12

3Q'12

1Q'13

4Q'09

1Q'13

3Q'09

4Q'12

2Q'09

4Q'12

1Q'09

 Absence of large disclosed UK Consumer & Retail - M&A Deal Volume and Value transactions led to a decline in $22,737 $5,829 117 total deal value in the UK $5,381 88 $4,859 94 91 89 $5,152 Consumer and Retail sector to 81 83 88 71 69 67 77 87 85 $755M in 1Q‟13, lowest quarterly 84 76 88 $3,739 $3,430 value since $631M in 4Q‟10. $3,118 $2,279  In the UK Consumer & Retail $2,334 $1,609 $1,496 space (in which we include, $1,032 $755 $631 $511 $414 alongside, the food and drink, fashion and clothing, beauty and personal care products, homeware and luxury goods sectors), Transaction Value ($M) No. of Transactions large-cap deal flow has been remarkably buoyant with over 15 deals greater than $500M since UK Consumer & Retail - M&A Valuation Multiples Trend 14.2x 2010. 13.8x  UK Consumer and Retail M&A 10.4x 10.2x 10.2x 10.3x market benefited from a cautious 9.8x NA 8.2x recovery of the consumer market 7.6x 7.5x 5.2x 6.7x 6.2x 5.7x and interest from overseas buyers 5.3x 4.5x in 2012. Though Q1‟13 has been 2.4x 2.2x 2.1x 0.4x subdued, primarily due to overall 1.2x 0.7x 1.5x 1.1x 0.7x 0.9x 1.1x 1.2x 0.9x 0.9x 0.7x 0.5x 0.4x slowdown in the European M&A market, the latter half of 2013 is expected to see increased action in the Retail and Consumer EV/EBIITDA EV/Revenues Products space.  Acquisition of brands has been a major theme across the fashion, eye-ware and beauty sectors over recent years as companies look for economies of scale in manufacturing and distribution.  The largest transaction of Q1‟13 was yet another acquisition of a beauty segment brand as Lornamead Group, owner of Finesse shampoo, was acquired by Hong-Kong based Li & Fung for $190M.  Over the years, for most of the period, UK Consumer and Retail EV/revenue multiples have hovered around 1.0x revenue. Most of the consumer deals with a strong brand in the Personal Care segment or Alcoholic Beverages segment commanded a higher valuation compared to deals that sought entrenched distribution networks in the Retail sector  With disclosed multiples being available only for a select number of deals, the EV/EBITDA multiple in 1Q‟13 was skewed upwards by the 13.7x valuation of Continental Farmers Group by Saudi-based United Farmers Holding Co. Source: CapitalIQ Note: Deal value based on disclosed transactions

5|Page July 5, 2013

UK Consumer & Retail June 2013

 Sub $20M size M&A transactions M&A Volume by Deal Size dominate the UK Consumer and 2% 4% 4% 5% 4% 11% Retail sector and the trend 9% 15% 20% continued in 1Q‟13 with about 26% 29% 44% of the total transactions 44% 33% 31% falling in this bucket.  Over the last couple of years, there have been only a few $1B+ mega 68% 58% 48% 45% deals like the acquisition of Britvic 44% by A.G. Barr (~$2.2B), Weetabix by Bright Food (~$1.9B) and Phones 2009 2010 2011 2012 1Q 2013 4u by B C Partners (~$1.1B). <$20M $20M-$100M $100M-$500M >$500M  Although the sub $20M size Average Deal Value ($M) $311.8 transactions command the transaction volumes, the average $182.9 $128.0 $100.3 deal size, among the transactions $41.7 with disclosed values, has historically been over $100M, 2009 2010 2011 2012 1Q 2013 skewed by select large value deals. In 1Q‟13, the average deal value declined to $41.7M as there were no large value transactions.

Top 5 UK Consumer & Retail M&A Deals in 1Q’13 Date

Acquirer

Target

Top 5 UK Consumer & Retail M&A Deals in 2012

Value

Date

$190M

11/14/12

$126M

05/03/12

02/20/13

$72M

12/03/12

03/12/13

$71M

12/05/12

$71M

12/06/12

01/13/13

03/28/13

02/20/13

Investor Group

Polish Home Care Brands

Acquirer

Target

Value $1,943M

Bright Food (Group) Co., Ltd.

$1,943M

$930M Kenyon Son & Craven Ltd.

$805M

$804M

Source: CapitalIQ

6|Page July 5, 2013

UK Consumer & Retail June 2013 UK Consumer – M&A Trends Packaged Foods and Meats segment continues to have the maximum M&A deal activity in the Consumer Sector in the UK  Packaged Foods & Meats segment accounted for about 29% of total UK Consumer Transaction Volume by Sub-Sector consumer deals in the UK in 1Q‟13. 2010 1Q’13 However, in value terms, it 5% accounted for less than 10% of the 8% 5% 22% total value as there were no large 29% 42% 6% transactions and the number of 5% 6% deals with disclosed values were 12% 7% 13% less. 10% 15% 12%  Growth in the demand for health 2% and wellness products in the Foods Packaged Foods and Meats Apparel, Accessories & Luxury Goods Personal & Household Products Furnishings & Housewares segment is a key trend driving Consumer Durables Beverages M&A. Niches such as organic food, Leisure Products Others pro-biotics dairy and baby food are among the strong drivers of both revenues and margins.  Eurozone crisis and global economic pressures have adversely impacted the luxury and premium branded goods market. While there have been acquisitions of brands in the Fashion and Beauty sector, M&A has lagged in the luxury and premium branded goods market. Acquisition of Jane Shilton‟s footwear business by Shoon was the sole premium brand transaction in the UK in 1Q‟13.  With majority of the high-value transactions happening in the Alcoholic Beverages segment over the last decade, it remains one of the most consolidated Consumer segments with limited high-value transactions. Acquisition of spirits producer, Fever-Tree Ltd., by LDC for ~$71M was the only disclosed transaction, among the five transactions, in the UK Beverages sector in 1Q‟13.  Over the last few years, the largest deals in the Packaged Foods & Meats segment include Kraft‟s acquisition of Cadbury (~$22.3B), Bright Food acquiring Weetabix (~$1.9B) and Boparan Holdings acquiring Northern Foods (~$1.0B) UK Consumer - M&A Deal Volume and Value

2.4x

2.3x

1Q'12

4Q'11

3Q'11

1Q'11

4Q'10

3Q'10

2Q'10

1Q'10

4Q'09

3Q'09

1Q'09

1Q'13

4Q'12

3Q'12

2Q'12

2Q'11

Transaction Value ($M)

1Q'13

0.6x

4Q'12

0.7x

1.1x

3Q'12

$638

1.0x 1.2x 0.9x

0.9x 1.0x

0.3x

1Q'11

4Q'10

$638

0.5x

1.6x

2Q'12

$1,212

$765 $735

1.7x

1.5x 1.3x 1.2x

$2,595 $1,915

3Q'10

2Q'10

1Q'10

4Q'09

$3,560

$47

3Q'09

2Q'09

1Q'09

34 34 33

$2,879

$1,258 $1,046 $613

$198 $137

2Q'09

2Q'11

$4,755 27 31

1Q'12

UK Consumer - Revenue Multiple Trend

4Q'11

27 22 24 24

3Q'11

$22,409

No. of Transactions

Source: CapitalIQ

7|Page July 5, 2013

UK Consumer & Retail June 2013 UK Retail - M&A Trends Non-food distributors continue to have the maximum M&A deal activity in the Retail Sector in the UK  Non-Food Distributors segment UK Retail Transaction Volume by Sub-Sector accounted for about 31% of total 2010 1Q’13 consumer deals in the UK in 1Q‟13. 8% 4% 4% However, in value terms, there 2% 4% 2% were no transactions with disclosed 5% 29% values in this segment in 1Q‟13. 31% 10% 8%  Automotive Retail has been the 10% 9% second most active sector in the UK 14% 9% Retail M&A with 14 transactions in 29% 14% 6% 1Q‟13 and 167 deals since 2009. It is a highly fragmented sector with top Non-Food Distributors Automotive Retail Food Retail 4 dealer groups accounting for 24% Specialty Retail Internet Retail Apparel Retail Food Distributors Home Goods Retail Others of the aggregate turnover for the top 200 dealers. Advantages of economies of scale are driving the well-funded groups to become more acquisitive, while, at the same time, inability of smaller deals to fund and comply with the manufacturers‟ standards is pushing them to divest. In 1Q‟13, the significant transaction was JCT 600 (Ranked 13 in Motor Trader Top 200 ranking in UK) acquiring Gilder Group (Ranked 24).  There were no significant transactions in the UK Food Retail in 1Q‟13. Food Retail Acquisitions in the UK are no longer dominated by global retailers like Tesco, which are affected by a slowdown in the domestic markets and have put the expansion plans on hold. Big retailers are refocusing on core business activities and offloading underperforming units.  Increasing acceptability of consumers towards online retail has created new opportunities for companies and has given a fillip to the M&A activity in the industry. Internet Retail accounted for about 10% of the transactions volume in 1Q‟13. UK Retail - M&A Deal Volume and Value 57 58

50 48

43 48

1.2x 1.0x

$4,768

1Q'13

4Q'12

3Q'12

2Q'12

1Q'12

0.5x 0.4x 0.3x 0.2x

4Q'11

3Q'11

4Q'10

0.7x

0.6x 0.4x

0.5x 0.4x

3Q'10

2Q'10

0.4x

1Q'10

4Q'09

0.3x

3Q'09

2Q'09

1Q'09

1Q'13

4Q'12

0.2x

3Q'12

$418 $393 $524 $117 2Q'12

4Q'11

3Q'11

2Q'11

1Q'11

4Q'10

3Q'10

2Q'10

1Q'10

4Q'09

3Q'09

2Q'09

Transaction Value ($M)

0.4x

$1,514

$761

$584 $397

$313 $328 $277 $351

0.5x

$2,269

1Q'12

$2,528 $1,980

$2,384

1Q'09

0.9x

2Q'11

47 43 53 56 56 45

UK Retail - Revenue Multiple Trend

1Q'11

No. of Transactions

Source: CapitalIQ

8|Page July 5, 2013

UK Consumer & Retail June 2013

UK Consumer & Retail – Private Equity / Venture Capital Activity Sponsor-Backed Buyout Activity Maintained in 1Q’13

1Q'13

4Q'12

3Q'12

2Q'12

1Q'12

4Q'11

3Q'11

2Q'11

1Q'11

4Q'10

3Q'10

2Q'10

1Q'10

4Q'09

3Q'09

2Q'09

1Q'09

 Buyout activity maintained a UK Consumer & Retail - Sponsor Backed M&A Deals steady momentum in the UK Consumer and Retail sector, with $4,063 15 buyouts being announced in 16 16 16 10 9 10 10 8 11 15 1Q‟13. Almost two-thirds of the 9 9 12 13 13 8 16 announced buyouts were in the $2,667 $2,186 $1,927 Retail sector, which also has $1,304 historically been more attractive to $979 $309 financial buyers. $480 $346 $204 $175 $188 $49 $68 $187 $146 $111  In 1Q‟13, there were no mega deals. Buyout of spirit producer, Fever-Tree, by LDC for about $71M was the largest transaction, Transaction Value ($M) No. of Transactions followed by Sun Capital Partners‟ buyout of Dreams PLC‟s 171 bed and furniture retail stores for $53M.  With about 50% of total retail buyouts in the last eight quarters, the Non-Food Distributors and Food Retail segments have been the most preferred segments in the Retail sector, while Packaged Foods and Meats has been the preferred segment in the Consumer sector, with 25% of total consumer buyouts in the last eight quarters.

Private Placements  Total number of private placements UK Consumer & Retail Private Placement Transactions declined by 61% in 1Q‟13 to 7 deals 36 28 24 against 18 deals in 4Q‟12. Consumer 18 5 24 sector was the more active, with 5 deals 27 24 14 $432 being completed in 1Q‟13. $295 2  Fast growth of online retail and use of $250 $217 social media are transforming the way $137 traditional retailers operate. Financial $96 $90 investors are looking to capitalize on this $49 $2 $14 trend as is evident by 58% of all retail sector private placements deals in the 2009 2010 2011 2012 1Q'13 Internet Retail segment since 2009. Deal Value - Consumer ($M) Deal Value - Retail ($M)  In the largest transaction of 1Q‟13, The #Consumer Deals #Retail Deals Hut Group, a multi-Website online retailer, received about $14M from River Island Clothing in a pre-IPO round of funding.

Source: CapitalIQ

9|Page July 5, 2013

UK Consumer & Retail June 2013

UK Consumer & Retail Trading Comparables Consumer ($Millions, except per share values)

Company

Price As Of % of 52 6/20/13 Week High

Equity Value

Enterprise Value

EV/Revenue LTM

CY2013E

EV/EBITDA CY2014E

LTM

CY2013E

P/E CY2014E

LTM

CY2013E

CY2014E

Food, Beverage and Tobacco Unilever plc

$39.62

88%

$112,195.8

122,115.9

1.8x

1.7x

1.6x

11.3x

10.6x

9.9x

19.5x

18.0x

16.5x

British American Tobacco plc

$51.70

88%

$98,443.5

112,310.4

4.5x

4.4x

11.3x

11.1x

10.5x

16.1x

14.7x

13.5x

SABMiller plc

$48.11

85%

$77,098.4

94,871.0

5.4x

4.3x

4.1x

16.3x

13.8x

13.0x

23.6x

18.9x

16.8x

Diageo plc

$28.41

87%

$71,314.4

85,014.5

4.7x

4.6x

4.3x

14.2x

13.5x

12.5x

17.3x

16.9x

15.3x

Imperial Tobacco Group plc

$35.71

88%

$34,596.4

51,760.9

1.2x

4.2x

4.0x

10.6x

9.6x

9.3x

48.7x

10.8x

10.1x

Associated British Foods plc

$26.35

83%

$20,784.7

23,419.4

1.2x

1.1x

9.7x

9.3x

8.7x

22.6x

17.3x

15.7x

Tate & Lyle plc

$12.32

90%

$5,755.9

6,554.8

1.3x

1.2x

9.4x

8.8x

8.3x

14.8x

13.4x

12.5x

Britvic Plc

$7.51

91%

$1,825.5

2,730.5

1.4x

1.3x

10.9x

9.8x

8.9x

19.3x

14.5x

12.3x

Dairy Crest Group plc

$7.19

92%

$980.7

1,097.6

0.5x

7.5x

6.7x

6.2x

13.0x

11.2x

A.G.Barr p.l.c.

$7.79

86%

$903.3

942.8

2.5x

2.4x

2.3x

14.2x

13.1x

12.1x

22.4x

19.6x

17.9x

Cranswick plc

$17.63

98%

$855.7

890.4

0.7x

0.6x

8.9x

8.3x

7.9x

15.5x

13.7x

12.9x

$4.78

81%

$793.5

833.8

2.1x

1.9x

9.0x

8.6x

7.7x

14.8x

14.1x

12.6x

$15.16

99%

$558.3

520.1

3.0x

2.8x

15.5x

15.2x

14.1x

22.5x

21.9x

20.2x

Mean

2.3x

2.4x

2.3x

11.5x

10.7x

9.9x

21.4x

15.9x

14.4x

Median

1.8x

2.1x

1.9x

10.9x

9.8x

9.3x

19.4x

14.7x

13.5x

Devro plc Nichols plc

Household and Personal Products Unilever plc

$39.62

88%

$112,195.8

122,115.9

1.8x

1.7x

1.6x

11.3x

10.6x

9.9x

19.5x

18.0x

16.5x

Reckitt Benckiser Group plc

$71.11

93%

$51,032.8

54,716.6

3.5x

3.3x

12.4x

12.6x

12.0x

17.5x

17.1x

16.3x

PZ Cussons plc

$5.32

82%

$2,277.8

2,453.0

1.8x

1.7x

1.6x

12.7x

11.6x

10.4x

40.9x

19.5x

17.5x

McBride plc

$1.77

77%

$322.4

443.5

0.4x

5.6x

5.4x

4.8x

14.4x

11.6x

9.2x

Mean

1.9x

1.8x

1.7x

10.5x

10.0x

9.3x

23.1x

16.5x

14.9x

Median

1.8x

1.7x

1.6x

11.9x

11.1x

10.1x

18.5x

17.5x

16.4x

Apparel & Luxury Goods Burberry Group plc

$20.66

86%

$9,055.3

8,652.3

2.9x

2.5x

2.3x

10.9x

9.8x

8.8x

23.9x

4.9x

3.3x

Ted Baker plc

$26.27

98%

$1,118.8

1,134.3

2.8x

2.4x

2.2x

17.4x

15.0x

13.2x

33.3x

25.6x

22.0x

Mulberry Group plc

$13.13

53%

$763.6

729.8

2.9x

2.6x

2.3x

15.1x

13.3x

11.2x

27.0x

23.2x

19.6x

$1.07

77%

$186.4

164.0

0.3x

0.4x

0.3x

3.7x

3.4x

3.1x

30.2x

11.0x

9.4x

Mean

2.2x

2.0x

1.8x

11.8x

10.4x

9.1x

28.6x

16.2x

13.6x

Median

2.8x

2.5x

2.2x

13.0x

11.5x

10.0x

28.6x

17.1x

14.5x

Fiberweb plc

Consumer Durables Photo-Me International plc

$1.27

95%

$471.8

368.6

1.1x

1.2x

5.6x

5.2x

17.0x

16.0x

Games Workshop Group plc

$11.43

99%

$362.9

338.7

1.6x

7.7x

8.1x

14.2x

15.2x

Portmeirion Group plc

$10.66

97%

$112.6

101.1

1.1x

8.1x

8.0x

7.6x

13.7x

13.8x

13.0x

Walker Greenbank plc

$1.91

96%

$110.2

108.4

0.9x

9.8x

7.6x

7.3x

17.5x

12.9x

12.1x

Mean

1.2x

1.0x

7.8x

7.2x

7.4x

15.6x

14.5x

12.6x

Median

1.1x

1.2x

1.0x

7.9x

7.8x

7.4x

15.6x

14.5x

12.6x

Overall Mean

2.1x

2.0x

10.8x

10.0x

9.4x

21.9x

15.8x

14.2x

Overall Median

1.8x

1.7x

1.6x

10.9x

9.8x

9.3x

19.4x

15.2x

13.5x

Source: CapitalIQ

10 | P a g e July 5, 2013

UK Consumer & Retail June 2013

UK Consumer & Retail Trading Comparables (Contâ&#x20AC;&#x2122;d.) Retail ($Millions, except per share values)

Company

Price As Of % of 52 6/20/13 Week High

Equity Value

Enterprise Value

EV/Revenue LTM

CY2013E

EV/EBITDA CY2014E

LTM

CY2013E

P/E CY2014E

LTM

CY2013E

CY2014E

Food & Staples Retail Tesco PLC

$5.12

85%

$41,362.0

53,442.6

0.5x

7.8x

6.7x

6.4x

19.4x

9.8x

9.7x

J. Sainsbury plc

$5.64

92%

$10,676.1

14,173.0

0.4x

6.7x

6.6x

6.2x

11.6x

11.0x

Wm. Morrison Supermarkets plc

$4.02

81%

$9,338.7

12,716.6

0.4x

0.5x

0.4x

6.3x

6.5x

6.2x

9.6x

10.2x

9.7x

Booker Group PLC

$1.85

89%

$3,191.8

3,072.5

0.5x

0.4x

16.7x

15.0x

12.8x

25.2x

22.7x

19.8x

Greggs plc

$6.34

78%

$629.0

599.0

0.5x

4.4x

4.8x

4.5x

9.8x

11.8x

11.1x

Majestic Wine plc

$7.02

93%

$456.5

452.0

1.1x

1.0x

0.9x

10.3x

9.5x

8.6x

17.3x

15.7x

14.1x

Mean

0.6x

0.5x

8.7x

8.2x

7.5x

15.5x

13.6x

12.6x

Median

0.5x

7.2x

6.6x

6.3x

14.5x

11.7x

11.0x

Non Food Retail Kingfisher plc

$5.21

94%

$12,259.3

12,322.6

0.7x

8.5x

7.8x

7.1x

13.9x

14.3x

12.8x

Marks & Spencer Group plc

$6.64

88%

$10,684.9

13,857.8

0.9x

0.8x

7.6x

6.9x

6.4x

15.1x

13.0x

11.8x

Next Plc

$69.63

94%

$10,571.5

11,369.4

2.0x

1.9x

9.2x

8.9x

14.6x

14.1x

13.0x

ASOS plc

$63.51

96%

$5,198.2

5,128.3

5.3x

4.1x

3.2x

45.3x

34.4x

79.7x

59.9x

Sports Direct International Plc

$8.14

97%

$4,624.8

4,872.0

1.5x

1.4x

1.3x

12.5x

10.4x

9.2x

25.1x

18.2x

15.4x

Inchcape plc

$7.93

89%

$3,700.6

3,552.7

0.4x

0.3x

7.4x

7.1x

6.6x

12.4x

12.2x

11.1x

Ocado Group PLC

$4.54

84%

$2,631.6

2,717.5

2.5x

2.3x

1.9x

42.6x

27.0x

Dunelm Group plc

$13.83

95%

$2,805.1

2,762.7

2.7x

2.6x

2.3x

14.1x

13.3x

12.1x

22.2x

21.3x

19.1x

Dixons Retail plc

$0.65

94%

$2,355.4

2,289.1

0.2x

16.9x

4.9x

4.4x

22.5x

16.1x

Howden Joinery Group Plc

$3.74

94%

$2,404.7

2,257.2

1.6x

1.5x

10.9x

9.9x

9.3x

16.7x

16.3x

15.1x

Carphone Warehouse Group Public Limited Company $3.65

94%

$1,900.3

1,775.1

0.8x

0.5x

11.0x

8.1x

1.4x

14.2x

12.5x

N Brown Group plc

$6.88

95%

$1,910.0

2,201.6

1.9x

1.7x

13.3x

11.3x

10.4x

16.1x

15.3x

14.5x

Home Retail Group plc

$2.04

80%

$1,631.8

1,019.9

0.1x

2.9x

11.7x

Debenhams plc

$1.34

69%

$1,673.6

2,170.6

0.6x

0.5x

5.7x

5.3x

5.0x

9.0x

8.9x

8.3x

WH Smith PLC

$10.82

88%

$1,353.8

1,290.4

0.7x

6.0x

5.7x

5.6x

10.7x

9.7x

9.0x

Mean

1.5x

1.4x

1.3x

9.6x

13.6x

11.0x

14.1x

20.0x

16.8x

Median

1.2x

1.1x

1.0x

8.9x

9.6x

8.5x

14.3x

13.0x

Overall Mean

1.2x

1.0x

9.3x

12.0x

10.0x

14.5x

18.0x

15.5x

Overall Median

0.7x

0.8x

0.7x

8.1x

8.5x

7.6x

14.3x

14.2x

12.8x

Source: CapitalIQ

11 | P a g e July 5, 2013

UK Consumer & Retail June 2013

UK Consumer & Retail Transactions with Disclosed Deal Values in Q1â&#x20AC;&#x2122;13

Date

Buyers

Target

Target Business Description

Deal Value ($M)

Implied EV ($M)

Multiples Revenue

EBITDA

Lornamead Group Limited

Manufactures and markets home & personal care products

190.0

1.2x

03/28/2013 Investor group

Continental Farmers Group

Engages in the cultivation and distribution of arable crops

125.7

119.3

3.0x

13.7x

02/20/2013 Iconix Luxembourg Holdings

Lee Cooper Group Limited

Designs, distributes, and markets jeans, clothing, accessories, and footwear

72.0

03/12/2013 LDC Ltd.

Fever-Tree Ltd

Produces and sells spirits

71.4

3.0x

02/20/2013 Henkel AG & Co. KGaA

PZ Cussons (Polish Home Care Brands)

Polish Home Care Brands comprises detergents and fabric softeners

71.3

0.9x

03/06/2013 Sun Capital Partners, Inc.

Dreams PLC (171 Stores & Other Assets)

171 bed and furniture retail stores

52.7

03/06/2013 James Fisher and Sons

Divex Ltd

Provides diving and subsea equipment for divers

49.7

1.0x

7.2x

02/28/2013 Genius Foods Limited

Livwell Ltd and United Bakeries (Holdings) Ltd

Produces and sells bakery products

31.4

0.7x

Sainsbury Food Store at Ballymena

A 60,777 sq. ft. food store

27.8

BakkavĂśr Foods (Pizza Manufacturing Facility)

A pizza manufacturing facility covering an area of 102,000 sq. ft. located in Harrow, UK

22.3

Three food stores located in Brackley, Swindon and Bicester

12.6

01/13/2013 Li & Fung Limited

Northern Ireland Local 02/13/2013 Government Officers' Superannuation Committee 03/28/2013 Aberdeen Asset Management 02/04/2013

Cordea Savills ; Cordea Savills UK Portfolio of Town Centre Income and Growth Fund Foodstores

01/15/2013 R&R Ice Cream Plc

YooMoo Limited

Engages in retail of frozen yogurt

8.1

10.7

01/08/2013 Vertu Motors Plc

Dobies (Carlisle) Limited

Owns and operates automotive dealerships

6.9

0.4x

02/01/2013 Cambria Automobiles plc

County Motor Works (Chelmsford) Ltd.

Operates as a new and used car dealer in Chelmsford, UK

6.5

01/28/2013 Litebulb Group Limited

Bluwstuff Ltd.

Designs and manufactures gifts and toys

4.2

01/29/2013 Ribble Valley Services Ltd.

Woodlands and Walverden Service Stations

Two petrol stations located in Blackpool and Nelson in the UK

1.2

01/09/2013 Duxburys Limited

Duxburys Garden Centre

Sells plants and products related to gardens

1.2

03/01/2013 Dairy Crest Group plc

The Proper Welsh Milk Co.

Processes and markets milk products in Britain

0.5

Mean

1.5x

10.4X

Median

1.0x

10.4X

Source: CapitalIQ

12 | P a g e July 5, 2013