Trading Statement For The Six Months Ended 31 March 2018 Steinhoff Africa Retail Limited (Previously K2017221869 (South Africa) Proprietary Limited) (Incorporated in the Republic of South Africa) (Registration number: 2017/221869/06) Share Code: SRR ISIN: ZAE000247995 (“STAR” or the “Company”) TRADING STATEMENT FOR THE SIX MONTHS ENDED 31 MARCH 2018 In terms of the Listings Requirements of the JSE Limited (“JSE”), a listed company is required to publish a trading statement as soon as it becomes aware that a reasonable degree of certainty exists that the financial results for the financial period to be reported on next will differ by at least 20% from the most recent financial results for the previous corresponding period. STAR’s interim results for the six months ended 31 March 2018 (“H1FY18”) will be published on SENS on 29 May 2018. Comparability of results In an effort to enable comparability of the H1FY18 results, certain adjustments were made to the comparative period’s statutory results for the six months ended 31 March 2017 (“H1FY17”), as summarised below. This provides shareholders with comparable results (“Comparable Results”) for the six months ended 31 March 2017. Statutory Results Comparable for the six months Results for the six ended months ended 31 March 2017 31 March 2017 Earnings attributable to ordinary shareholders 1 824 1 586 (R millions) Headline earnings attributable to ordinary 1 857 1 619 shareholders (R millions) Number of shares in issue (millions) 2 700 3 450 Weighted number of shares in issue (millions) 2 611 3 450 Basic earnings per share (cents) 69.9 46.0 Headline earnings per share (cents) 71.1 46.9 In determining the H1FY17 Comparable Results, the H1FY17 statutory results were adjusted as follows: 1. The pre-acquisition contribution from Tekkie Town and Building Supply Group (“BSG”), together with related transaction and finance cost, are included. 2. Finance cost based on the shareholder funding was included for the entire period. 3. An effective tax rate of 31% was applied in line with the effective tax rate for the 2017 financial year. 1 4. The weighted average number of shares in issue was increased to 3 450 million shares to include the impact of the 750 million shares issued (21.47% of issued share capital) upon the listing of STAR. Results publication on 29 May 2018 The impact of the events which continue to unfold at STAR’s controlling shareholder, Steinhoff International Holdings N.V. (“Steinhoff”), have been significant and STAR management has focused on assessing and mitigating any impact of this on STAR. STAR is party to a guarantee of third party debt related to a historic Pepkor Holdings management investment scheme which is underpinned by the Steinhoff share price. Since the collapse of the Steinhoff share price, the risk of liability in this regard can no longer be considered to be remote. Furthermore, a cash retention scheme was put in place for STAR key senior management (“Employees”) to supplement the existing long-term Steinhoff share incentive scheme (“Steinhoff Scheme”). Given the decline of the Steinhoff share price, the Steinhoff Scheme no longer adequately addresses the need to retain, motivate and reward Employees of the Group who are able to influence the performance on a basis which aligns the interests of such Employees with that of STAR and its Shareholders. The STAR board has taken the conservative approach to fully provide for STAR’s exposure in these matters. STAR hereby advises that a reasonable degree of certainty exist that the Statutory Results for H1FY18 will reflect the following: - EPS will be between 33.4 cents and 39.0 cents, being between 44.2% and 52.2% lower than the 69.9 cents achieved per the Statutory Results; and - HEPS will be between 33.4 cents and 39.0 cents, 45.1% and 53.1% lower than the 71.1 cents achieved per the Statutory Results. However, to enable comparability, Comparable Results for H1FY18 are included below which exclude the effect of the above matters, thereby providing a view of STAR’s true trading performance. - Earnings per share (“EPS”) will be between 50.8 cents and 54.4 cents, being between 10.3% and 18.3% higher than the 46.0 cents achieved per the Comparable Results; an - Headline earnings per share (“HEPS”) will be between 50.7 cents and 54.5 cents, being between 8.2% and 16.2% higher than the 46.9 cents achieved per the Comparable Results; This financial information has not been reviewed or reported on by the auditor of STAR. Parow 25 May 2018 Sponsor: PSG Capital Date: 25/05/2018 05:05:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. 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