PROPOSED ACQUISITION BY PROPOSED ACQUISITION BY AVUSA OF UNIVERSAL HIRT & AVUSA OF UNIVERSAL HIRT &

CARTER (“UHC”)CARTER (“UHC”)

14 October 2010

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www.avusa.co.za

What is UHC ? 1

One-stop retail and FMCG marketing solution, including:

• Largest intellectual capital database in the country of FMCG graphics

• Holistic through-the-line marketing solutions business.

• Retail advertisement monitoring service.

• Photographic, litho, silk screen facilities.

• Design and production of POS material.

• Marketing, advertising and promotions software.

• POS solutions, self-adhesive labels, catalogues, business forms.

• High volume printing of magazines and directories.

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www.avusa.co.za

What Is UHC ? 2

UHC’s attributes are as follows:

• Market leader with significant penetration into SA’s leading marketing brands.

• Privately owned diversified media business operating mostly in retail, FMCG and related markets at the marketing planning stage.

• Country’s largest FMCG and retail marketing solutions.

• Operator in below-the-line and point-of-sale (“POS”) markets.

• Principal shareholders are the Mehta family and Colin Cary (BEE compliant).

• Strong management team.

• Large operation with a strong, resilient revenue base (with entrenched clients), operating margins and cash flow.

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www.avusa.co.za

What Is UHC ? 3

UHC’s attributes are as follows:

• The acquisition is earnings-enhancing for Avusa (before considering merger benefits).

• Operates in markets least affected by economic cycles

• Portion of the UHC business unlikely to be diminished by move to digital in publishing (e.g. POS and labels).

• Intellectual capital created through high level of strategic integration with country’s leading brands and retailers.

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www.avusa.co.za

Key Investment Considerations & Drivers

The following were the key investment drivers considered when assessing the UHC acquisition:

•Strategic fit.

•Customer intelligence and relationships.

•Quality of revenue, operating margin and cash generation.

•Diversity of revenue streams and profits for an enlarged Avusa.

•Positions Avusa for further growth in existing and new markets.

•Innovation.

•Integration opportunities with the Avusa business.

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www.avusa.co.za

THE RETAIL OPPORTUNITY

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Traditional print above-the-line c.R9bn

Inserts market (incl. in above-the-line) c.R1bn

Traditional print below-the-line c.R6bn

Pre-media for OPI’s and knock & drop c.R1bn

TOTAL: c.R16bn

current market where Avusa plays

Below the linecurrent market

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TOTAL PRINT MARKET SIZE

www.avusa.co.za

Retail Dominates Spend

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VALUE : R9bn

Source: Adex Jan - Dec

* Retail and FMCG represent 45% of market

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www.avusa.co.za

UHC UHC Avusa

UHC UHC UHC

Below-the-line

Above-the-line

Print Markets

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www.avusa.co.za

Valuation and Intangibles

• Tangible assets are not reflective of businesses of more than 30 years (Sunday Times and subscribers)

• UHC has brands, entrenched customers and growing sustainable earnings

• The acquisition also brings the earnings of intellectual capital currently not capitalised on the balance sheet (Sunday Times brand and subscribers)

• The UHC business was valued using DCF, P/E ratio, EV/Ebitda ratio in determining fair value

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www.avusa.co.za

Funding

• How is the deal funded• Cash + Avusa equity• Raised short term debt• Ambition to repay debt in 2-3 years

• Funding considerations• Printing press investments• Dividend• Minor acquisitions• Replacement plant and equipment• Digital projects

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www.avusa.co.za

Directory Advertising

• Contract period ends in 2013• TRUDON revenue as a percentage of UHC 2010 revenue is

about 10% and PAT below 10%• TRUDON revenue as a percentage of combined AVUSA & UHC

2010 revenue is below 3%• Estimated TRUDON PAT as a percentage of combined AVUSA &

UHC 2010 PAT is below 5%• UHC has a12 year history of printing the directories – no disputes

between parties during this period• UHC has market advantage on product quality, competitive

pricing and strong relationships with TDS

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www.avusa.co.za

Value Proposition Of Transaction

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Heading Comment

Introduces a BEE shareholder • Will hold approximately 16.5% of Avusa following the transaction• Agreed to a 3-year lock in and remaining black controlled

Acquisition at a lower PE than Avusa

• Purchase price of R800m represents PE • June 2011 of 7.28 warranted

• Compares favourably with Avusa• 12.6x at the deal price of R22.50 per Avusa share

Target in net cash position • Ungeared

Cash generative and resilient earnings

• Proven resilience of earnings during recent downturn

Offers new revenue streams for Avusa

• Significant presence in pre-media and printing thus extending Avusa’s presence in all work-streams of above the line advertising (pre-media, printing and publishing)

• In addition, the point of sale offering gives Avusa new access to below the line advertising

• Entrenched retail and FMCG client base

Quality management and reputable company

• Top-tier quality owner managers with extensive and recognised expertise• In-depth second tier management, fully involved in the team and will be

secured through 2-year service and restraint contracts

Favourable transaction terms • By structuring the settlement consideration as 50% shares, 50% cash• Significant stake in Avusa (16.5%) results in the current owners “tied-in”

and committed to the fortunes of Avusa for at least the medium term• However, the cash component caps the dilutionary impact of the deal on

the holdings of current Avusa shareholders