African Business Outlook Part of the Global Business Outlook

1. African Business OutlookPart of the Global Business Outlook A joint survey effort between Duke University, The South African Institute of Chartered Accountants and CFO magazine

2. CFO Global and African Business Outlook – Overview Global Business Outlook Duke University has surveyed CFOs around the world every quarter since 1996, most of those years jointly with CFO magazine. The survey takes the pulse of the business community and has a strong record of predicting future economic activity. The results are relied upon by Central Bankers, Analysts, Investors, and are widely reported in the press. SAICA and the African Business Outlook SAICA joined the survey in 2013, helping to found the African Business Outlook. South African results are highlighted in the analysis, as are results from Nigeria and the rest of Africa, enabling SAICAand other survey partners to share key insights about the African economy with members of the Institute and others focusing on Africa. The analysis in this report will assist companies to make important business decisions as they can benchmark themselves against their global peers. The long run goal is to develop a large and steady set of responding African firms. • Key Survey Facts • Survey Respondents: 41 • Of which, 28 from South Africa, 9 from Nigeria and 4 from the rest of Africa • The number of respondents may skew some reported results • Sample includes CFOs from both public and private companies representing a broad range of industries • Retail/Wholesale, Mining/Construction, Manufacturing, Transportation/Energy, Communications/Media, Technology, and Banking/Finance/Insurance • Certain questions are constant each quarter, to capture trends in corporate optimism, expected hiring and capital investment plans, inflation, wages, and many other categories. • Other questions change each quarter to examine topical economic issues and newsworthy business or political events that may affect the landscape of corporate finance. African Business Outlook Duke University / SAICA / CFO Magazine March 2014

3. Sentiment Regarding Domestic Economy South African CFOs are less optimistic, other African CFOs more optimistic, compared to last quarter Trends in South African Optimism CFOs have become less optimistic this quarter, continuing a downward trend • The average African CFO, across all of Africa, is also less optimistic than in Q4 2013 Sentiment towards domestic economy • South African CFOs are dramatically less optimistic than at the end of 2013 • Nigerian CFOs and the rest of Africa are more optimistic than at the end of 2013 When ranked on a 100 point scale, All Africa Average optimism about domestic economic prospects increased from 53 in 2013 to 54.7 in Q1 2014 (South Africa: 52.5, Nigeria: 57, ROA: 66.7) African Business Outlook Duke University / SAICA / CFO Magazine March 2014

4. Own Company Sentiment Even though African CFOs are less optimistic about the overall economy, they have grown more optimistic about their own companies, compared to the previous quarter Own company optimism remains consistently high in South Africa • South African CFOs maintain their optimism for their own companies, though this trend was tempered somewhat in Q1 2014 Compared to Nigeria and other parts of Africa, CFOs in South Africa are less optimistic about their own company’s future prospects • 100% the surveyed non-South African CFOs are more optimistic this quarter, relative to their views at the end of 2013 When ranked on a 100 point scale, All Africa Average own company optimism dropped from 72.3 in 2013 to 66.2 in Q1 2014 (South Africa: 67, Nigeria: 57, ROA: 78) African Business Outlook Duke University / SAICA / CFO Magazine March 2014

5. African CFO Optimism Relative to Rest of World African CFOs are less optimistic about the prospects for their domestic economies. Own company African optimism is volatile and in general on par with own company optimism around the world. Over the past year, African CFOs were less optimistic about their domestic economies relative to their counterparts in other regions • Economic optimism in the USA, Europe and Asia increased while optimism in Africa and Latin America decreased over the last four quarters Although significant swings exist quarter on quarter, African CFOs are generally equally optimistic about their own companies prospects as their counterparts in other regions • Relative to end of 2013, own company optimism decreased in all regions except for Asia African Business Outlook Duke University / SAICA / CFO Magazine March 2014

6. Top 5 Macro and Internal Concerns for African CFOs Currency Risk, Political Risk, Working Capital Management, and Attracting Qualified Employees are concerns throughout Africa. Other concerns vary by region. Top 5 Macro Concerns Top 5 Internal Concerns African Business Outlook Duke University / SAICA / CFO Magazine March 2014

7. Earnings and Cash Flow Utilization South African CFOs expect an increase in all categories over the next 12 months though Revenue and Earnings increases have slipped from last quarter South African CFOs anticipate large increases in R&D and Marketing spending while barely increasing spend on Technology • Expectations about Revenue, Earnings, and Capital Spending have softened since last quarter’s survey but are still projected to increase by nearly 10% Expectations higher outside of South Africa • Revenue and earnings expected to increase by 10 - 15% on average • Nigerian companies expect dramatic increases in Tech spending with minimal increases in R&D, Capital and Marketing spending African Business Outlook Duke University / SAICA / CFO Magazine March 2014

8. Mergers and Acquisitions Compared to World Regions Fewer African companies anticipate making an acquisition, compared to other regions African companies anticipate lower acquisition rates compared to other regions over the next 12 months • South Africa anticipates 23.1% of companies to acquire another company • Only 7.1% of African firms will make an international acquisition • Among Nigerian companies making an acquisition (12.5% of surveyed Nigerian firms), all anticipate making an international acquisition African Business Outlook Duke University / SAICA / CFO Magazine March 2014

9. Expected Borrowing Costs and Effects on Spending 60% of surveyed South African companies borrow externally and anticipate borrowing costs to increase by 1.2% by the end of 2014. However, planned spending would not decrease substantially unless rates increase by more than 4%* No companies surveyed anticipate a decrease of more than 300bps • No CFOs expect borrowing costs to remain flat or to change by -100bps, +500bps On average, borrowing rates would have to increase by over 4% before CFOs would reduce hiring, capital spending or borrowing plans • Companies plan to maintain hiring levels unless rates increase by >5% *Note: Only uses data from South African respondents. Data from other regions incomplete. African Business Outlook Duke University / SAICA / CFO Magazine March 2014

10. Does Uncertainty Affect Plans of African Businesses? Uncertainty about the economy and government causes African businesses to reduce/delay capital spending more than it affects other aspects of planning. Graphs below report uncertainty about … African Business Outlook Duke University / SAICA / CFO Magazine March 2014

11. Corporate Culture All regions list “Customer Orientation” and “Integrity” as the two most important aspects of their company’s culture and “Customer Orientation” as their top priority for improvement Top 4 Most Important Attributes of Company’s Culture Top 3 Corporate Culture Priorities for Improvement African Business Outlook Duke University / SAICA / CFO Magazine March 2014

12. Do Real Estate Bubbles or American Monetary Tightening Affect Africa? Only 9% of South African CFOs believe there is currently a real estate bubble in their country. A slight minority anticipate that US Federal Reserves monetary tigthening will affect their firms No companies surveyed anticipate the QE Taper to have a “very positive” effect on their organization • A slight majority of South African companies do not anticipate any effect attributed to the Taper • Though not in graph, Asian and LatAm CFOs say US Tapering will hurt their home country economies The vast majority of South African CFOs say there is not a Real Estate Bubble in South Africa • Though not shown in the graph, 90% of Chinese CFOs and half of Latin American CFOs believe that there is a real estate bubble in their home countries. * Note: Only uses data from South African respondents. African Business Outlook Duke University / SAICA / CFO Magazine March 2014