Steinhoff Q3 continues strong

All,

Steinhoff continues to go sideways - given the ubiquitous retail market pressure and its own woes. Only Pepkor are growing, albeit at blistering pace.

Revenues for Pepkor Europe were up 13% again, continuing their rampant growth in Eastern Europe based on a 12% increase in number of stores. For the first half of FY19 EBITDA was up 29% YoY. The 9-month report does not give any details on earnings, but the company is implementing a new IT system and is constructing a new central warehouse, which may weigh on earnings / cashflow.

- Pepco revenues are up 27%, based on a 19% increase in number of stores

- Poundland revenues are essentially flat YoY, as is its store portfolio.

- Conforama revenues remain flat, but this is hiding a substantial recovery of LfL revenues in the third quarter from -9% in Q1 to /+5% in Q3 (from a very low base). Conforama remains fully consolidated despite its issue of 49.9% of warrants to its new financing parties.

- All other developments apparel benign.

Meanwhile demand for the new paper seems to have cooled off from two weeks ago.

We will review the name again in the fall, with full-year information in hand.

Wolfgang