David NurekChairman

Distell is

• A global company of South African essence

• Innovative, with a clear focus on key brands

• Lean, flexible and responsive to consumer needs

• A people company where every stakeholder is important

Corporate governance

• Board committed to principles of good governance

• Highest standards of integrity, fairness and social responsibility

• Formal critical evaluation was conducted of our compliance with King II and JSE Securities Exchange requirements

Characteristics of South African macro environment in 2001/2002

• Softening Rand– Negative impact– Positive impact

• Increased integration with the world economy

• Volatility

US$/Rand exchange rate for the year to June 2002

0.122040.12052

0.11588

0.10813

0.08699

0.10813

0.08638

0.08737

0.09881

0.09862

0.09053

0.08720

Average per month

PPI

135.6

Excise on spirits

128.6

Ace 5kg Maize

162.0

CPI, PPI and food pricesindexed to JJ 1999

Sou

rce: A

C N

ielse

ns, Diste

ll

CPI

122.5

Klipdrift (inbond)

116.8

Effects in 2002

• Windfall income from exports – Maintained prices in foreign currency

• Raw materials scarcity - imports to sustain markets

• Increased costs of inputs– Packaging– International structures & marketing

Imperative to increase exports to reduce risk

Final household disposable incomeS

ource

: Re

serve

Ba

nk, AC

Nie

lsen

s

Non - durable goodsFinal household consumption expenditure (1995 prices)

Sou

rce: R

ese

rve B

ank, A

C N

ielse

ns

Local market trendsS

ource

: Nie

lsens 1

2 m

on

ths to JJ

Financial highlights

• Merger integration process completed• Increase of 6,7% in sales revenue• 24,3% growth in trading income• Headline earnings up 33,6%• Total dividends increased 32,1%

In an environment of increasing domestic volatility it is essential to be an effective international player

Etienne HeynsDirector - International

Operations

• World class service

• Wines

• Africa

• Amarula

Strategic approach

Amarula strategyAspirations

• To become the preferred cream liqueur in the world

Strategy • Premium positioning with strong

support– Premium pricing (compared to

Baileys)– ‘Big distribution’ channels– Strong marketing support– Financial commitment

• Strong distribution partners– Brown Forman (USA)– First Drinks (UK)– Peter Mielzynski Agencies (Canada)– Aurora (Brazil)– Underberg (Germany)– Marie Brizard (Spain)

Amarula - achievements & prospects

• Strong growth: USA, Canada • Slower yet good growth: Germany,

Spain• Consolidate: Brazilian triangle• UK - turnaround plans in place

Amarula already biggest contributor to marginal income of Distell - set to grow

Africa - strategy

• BLNS - use established structures

• Substantial direct investment in key markets• Limited structures in markets with good potential but risk elements

• Develop efficient distribution for further markets

Africa - achievements & prospects

• Other than BLNS, performance disappointing

in 2002• Plan

– Tailored marketing approach– Flexible distribution structure– Aggressive sales approach– Adaptable and tailored production configuration– Optimal share investment

• Expected return - 3 fold increase

Wine strategy

Wines - achievements• New organisation - fully staffed (including

UK key account manager, value chain analyst)

• Customer segmentation completed• International logistics in place• New APO forecasting in place• UK strategy in place - new listings• USA pilot project• Germany, Norway - new listings• Major new product developments

World class service

• Distell must deliver– very large volumes– consistent quality– at target cost– on short notice– always on time

World class service

Jan ScannellManaging Director

New way of working - DMOS

Our employees

• Loyal - 45% of staff over 10 years’ service

• Average age of 38• Recruitment of new talent

Employment equity

• Plan in place• Management measured on

attainment of goals

Corporate social investmentMust align with corporate objectives• Arts & Culture

– Distell Foundation, Oude Libertas Amphitheatre, Arts festivals

• Environment – waste reduction, effluent, recycling, IPW

• Transformation– Papkuilsfontein, Phalaborwa, Mandela

• Health– ARA, Advertising code

• Combating crime

The merger

• Forecast merger savings will yield 36% on investment of R484 m - 96% has been realised to date

• With the merger embedded, we will now build our brands

We will focus on 3 themes in 2002/03

Risks

• Competition authorities• Gordon’s Gin• Liquor Act• Advertising• Illegal products

Progress in respect of 5 year objectives

International revenue as % of turnover

Target 2003 - 20%

TargetActual

Progress in respect of 5 year objectives

Return on equity

Target 2003 - 16.5%

TargetActual

Thank youQuestions?

www.distell.co.za