IRELAND FMCG LANDSCAPE Matt Clark Commercial Director 18th Jan 2017

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KEY TRENDS AND THE IRISH FMCG MARKET

FMCG IRELAND OVERVIEW

RETAIL CHANNELS

BREXIT IMPACT

2

Copyright ©2015 The Nielsen Company. Confidential and proprietary.

KEY TRENDS AND THE IRISH FMCG MARKET

FMCG IRELAND OVERVIEW

RETAIL CHANNELS

BREXIT IMPACT

3

Source: Nielsen Global Consumer Confidence Survey – ROI Q3 2016

99

Q3 2016

Q2 2016

Recovery Q1 2016

92

Q4 2015

Q3 2015

82

Q2 2015

100

Q1 2015

Q4 2014

Deep Recession

Q3 2014

Q2 2014

Q1 2014

Q4 2013

Q3 2013

67

Q2 2013

Q1 2013

Q4 2012

60

Q3 2012

Q2 2012

60

Q1 2012

68

Q4 2011

Q3 2011

20

Q2 2011

Q1 2011

120

Q4 2010

80

Q3 2010

Q2 2010

Q1 2010

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IRISH CONSUMER CONFIDENCE CONTINUES TO GROW IRELAND CONSUMER CONFIDENCE INDEX TREND 2010-2017 100

70

40

Stability?

0

4

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STEADY GROWTH FROM ALL KEY METRICS IRELAND CONSUMER CONFIDENCE INDEX TREND 2010-2017

44% 37%

29%

32% 31%

29%

32% 20%

31% 31%

33%

26%

27%

22% 25%

28% 26%

24% 22%

26% 26%

26%

24% 40%

18% 14% 16% 17% 11% 12% 16% 15% 10% 13% 14% 13% 14% 16%

37%

32% 53% 44%

48%

53% 52%

55%

41% 39% 39%

27% 30% 34% 29% 28% 28% 26%

38% 42%

41%

38%

45% 50%

23%

22%

33% 32%

45%

32% 33% 34%

46% 45% 43% 48%

56% 52% 52% 56%

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2010 2010 2010 2010 2011 2011 2011 2011 2012 2012 2012 2013 2013 2013 2013 2014 2014 2014 2014 2015 2015 2015 2015 2016 2016 2016

Job Prospects - Good/Excellent Source: Nielsen Global Online Survey – Q3 2016

Personal Finances - Good/Excellent

Readiness to Spend - Good/Excellent 5

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TOTAL FMCG

VOLUME AND PRICE DRIVING OVERALL VALUE VOLUME GROWTH SLOWING, PRICE INFL INCREASING

MAT OCT 2016

Value

Volume

Price

+1.9%

+0.8%

+1.1%

Source: Nielsen Strategic Planner , ROI Total Market Read| MAT to Oct 2016

6

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DISCOUNTERS AND CONVENIENCE CONTINUE TO GAIN SHARE FROM MULTIPLES Channel, € Share

Channel, € % Growth MAT TOTAL DEFINED MARKET

18 45

4.1%

36

3.8%

0.6 MULTIPLES + DUNNES ONLINE MULTIPLES

1.9%

-0.4%

CONVENIENCE DISCOUNTERS Source: Nielsen Strategic Planner data to Oct 2016 Convenience = Gps, Fcts, Spec off licence, & independents

7

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KEY TRENDS AND THE IRISH FMCG MARKET

FMCG IRELAND OVERVIEW

RETAIL CHANNELS

BREXIT IMPACT

8

DISCOUNTERS

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DISCOUNTERS EXPANSION IN IRELAND CONTINUES 21%

Discounters Share of FMCG

12%

122

13%

129

14%

133

15%

135

17%

141

18%

143

79

90

97

105

108

122

Jan-11

Jan-12

Jan-13

Jan-14

Jan-15

Jan-16

18%

146

126

Jan-17

“Lidl to open 50 new stores in next 5 years” Aug 2016 “Aldi to open 20 new stores in next 3 years” Dec 2016 Jan-18

Jan-19

176

146

Jan-20

Discounters Store Numbers 10

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DISCOUNTERS CONTINUE TO DOMINATE AD SPEND Includes Press (49% of total), TV (34%), Radio (8%), Outdoor (7%), Digital Display (3%) TOTAL RETAILER AD SPEND +11% VS 2015

€20M

2015 2016

€14M

€15M €14M

€12M €11M

€12M €12M €9M

€7M €3M

Lidl

Aldi

Source: Nielsen AdDynamix, MAT to Nov 2016

Supervalu

Tesco

Dunnes

€3M

M&S

€2M

€3M

Centra 11

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DISCOUNTER CORE BUILDING BLOCKS Store Openings •

•

272 Aldi and Lidl stores, +7 stores vs last year => new stores playing a key role in their growth but also showing LFL growth. Estimated to exceed 300 stores in Ireland which will bring them to 21% share by 2020 Shopper Adoption 30

Aldi

24

Lidl

17

Supervalu Tesco Dunnes Stores

14 8

Aldi and Lidl rank highest in terms of % of shoppers who had visited a new/different store. With 55% of Aldi and 53% of Lidl shoppers becoming regulars once visiting that new store

Shopper Perception

44% of shoppers perceive Aldi to be the lowest priced store for food, grocery and personal care products, Lidl at 30% Advertising Aldi and Lidl make up 49% of the retailer advertising spend. The are capturing all mega themes: • Shop Challenge • Provincial GAA Involvement • Rugby Support • Healthy Training Gear • Community Support 12

CONVENIENCE RETAIL

CONVENIENCE RETAILING €5.7bn Value

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Value of the Irish convenience market

+3.8%

Growth

2,695 Stores

Value growth, Total convenience driven by stores in Ireland, Forecourts, the up +1% on last fastest growing year. segment Leading the way internationally, with awardwinning concepts and innovation

11.8%

Own Brand Own brand sales value, down -1.3% on last year

Sources: Nielsen Strategic Planner data to July/August 2016. Convenience = Groups, Forecourts, Specialist Off Licences & Independents. Nielsen Ireland Scantrack Own Brand (packaged grocery only, excludes tobacco, wine and alcohol) MAT w/e 02nd Oct 2016

14

DISC

Channel, € Share

45 36 0.6 MULTIPLES + DUNNES ONLINE MULTIPLES

CONV

18

ONLINE MULTS

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DISCOUNTERS AND CONVENIENCE CONTINUE TO GAIN SHARE FROM MULTIPLES • • • • • •

272 stores, +7 vs Jan 2016 Branded distribution decreasing Forecast 21% share by 2020 Focus on stores Money worries easing Alcohol and Confectionery winning

• Continue to lose share • Individual wins, collective losses • Low penetration, low conversion • Focus on looking for offers • Online model remains a challenge

CONVENIENCE DISCOUNTERS Source: Nielsen Strategic Planner data to Oct 2016 Convenience = Gps, Fcts, Spec off licence, & independents

15

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KEY TRENDS AND THE IRISH FMCG MARKET

FMCG IRELAND OVERVIEW

RETAIL CHANNELS

BREXIT IMPACT

16

BREXIT EXCHANGE RATE IMPACT

Clear evidence of a shift of sales north of the border between the Brexit vote and Christmas

TOTAL FMCG - NI & ROI - MULTIPLES MARKET VALUE - YR ON YR % CHANGE BREXIT Vote June 23rd 2016

6.0

4.0

TOTAL MULTIPLES (NI)

% CHANGE

2.0

TOTAL MULTIPLES (ROI)

0.0

-4.0

Source: Nielsen NI Multiples & ROI Multiples excl Dunnes, 4 weekly Sales data Total Store Read– data to Dec 4th 2016

DEC 04/16

NOV 20/16

NOV 06/16

OCT 23/16

OCT 09/16

SEP 25/16

SEP 11/16

AUG 28/16

AUG 14/16

JUL 31/16

JUL 17/16

JUL 03/16

JUN 19/16

JUN 05/16

MAY 22/16

MAY 08/16

APR 24/16

APR 10/16

MAR 27/16

FEB 28/16

FEB 14/16

JAN 31/16

MAR 13/16

4 Week Rolling % Change

JAN 17/16

JAN 03/16

DEC 20/15

DEC 06/15

NOV 22/15

-6.0 NOV 08/15

Copyright ©2012 The Nielsen Company. Confidential and proprietary.

-2.0

17

Copyright ©2012 The Nielsen Company. Confidential and proprietary.

FMCG CHANNEL OUTLOOK FMCG channel value share of trade 2016

2015

2020 (Projection)

18%

17%

MULTIPLES + DUNNES CONVENIENCE DISCOUNTERS

Source: Nielsen Strategic Planner data to Oct 2016 Convenience = Gps, Fcts, Spec off licence, & independents

42%

46%

47% 36%

21%

36% MULTIPLES + DUNNES CONVENIENCE DISCOUNTERS

37% MULTIPLES + DUNNES CONVENIENCE DISCOUNTERS

18

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