Special Meeting Presentation & Chairman’s Address

KATHMANDU HOLDINGS LIMITED

ASX / NZX ANNOUNCEMENT

18 October 2019

KATHMANDU HOLDINGS LIMITED – CHAIRMAN’S ADDRESS TO SPECIAL MEETING

At today’s special shareholder meeting, shareholders are asked to approve the proposed acquisition of
100% of Rip Curl and to separately approve changes to Kathmandu’s constitution.

As detailed materials outlining the acquisition of Rip Curl have already been distributed to all shareholders
along with the Notice convening today’s meeting, I do not propose to go through each page of the
Transaction Summary presentation. However, I will provide an overview of the transaction and its strategic
rationale and our CEO Xavier Simonet will provide a more detailed presentation on the benefits and
structure of the Rip Curl transaction. We are of course also very happy to answer any questions from
shareholders in attendance today on the information that has been provided to shareholders in relation to
the Rip Curl transaction, or that shareholders may otherwise have in relation to the transaction.

Rip Curl is an iconic and authentic global action sports brand born at Bells Beach, Australia, in 1969.
Founded by surfer friends Brian Singer and Douglas Warbrick, Rip Curl’s vision is to be regarded as “the
Ultimate Surfing Company” in all that it does.

Rip Curl designs, manufactures, wholesales and retails surfing equipment and apparel via a multi-channel
model, and has a global presence across Australia, New Zealand, North America, Europe, South East Asia
and Brazil.

Similar to Kathmandu’s core outdoor products category, the surf products market has a stable, committed
core consumer, with steady growth in participation and spending. Rip Curl’s brand strength and focus on
core technical surf products in key growth categories positions it well within this market.

The acquisition of Rip Curl is an opportunity for Kathmandu to considerably diversify its geographic
footprint, channels to market and seasonality profile, and creates a NZ$1.0 billion outdoor and action sports
company anchored by two iconic Australasian brands. There is strong cultural alignment between the two
brands and a shared focus on technical and functional products.

The acquisition is expected to deliver meaningful EPS accretion for Kathmandu shareholders, with FY20
pro forma EPS accretion in excess of 10% (pre-synergies). There is potential for further upside over time
as synergies are assessed and identified post acquisition.

Reflecting our commitment to the company and to this acquisition, I am also pleased to confirm that all
Kathmandu directors who are current shareholders of Kathmandu intend to participate in the accelerated
entitlement offer to partly fund the acquisition.

Turning to the second resolution to be considered at today’s meeting, I note that the proposed changes to
the Kathmandu constitution are not related to the Rip Curl acquisition. As you may be aware, the updated
NZX Listing Rules came into effect on 1 January of this year. NZX issued a class waiver providing that
issuers could defer updating their constitution to comply with the new NZX Listing Rules until the issuer’s
next Annual Meeting, or Special Meeting called by the board. As we have called this Special Meeting to
approve the Rip Curl acquisition, we are required by the NZX class waiver to put the constitution
amendments to shareholders now. These amendments would have been put before shareholders at our
Annual Meeting in November of this year in any event.

The proposed amendments to the constitution are described in the explanatory notes to the Notice of
today’s meeting. These changes reflect the new NZX Listing Rules, the Company’s transition to a foreign
exempt listing on the ASX, which occurred in September, and other procedural changes.
All proposed amendments to the constitution, in marked up form to the existing constitution, are available
on Kathmandu’s investor website.

I will now ask our CEO, Xavier Simonet, to provide further detail on the benefits and structure of the Rip
Curl transaction.

David Kirk
Chairman

ENDS

---

Kathmandu
Holdings Limited
Special Meeting
18October2019

»Meeting Procedures
»Chairman's address
»Chief Executive Officer’s Address
»Resolution 1 – Ordinary resolution to
approve the acquisition of Rip Curl
»Resolution 2 – Special resolution to
amend the Constitution
AGENDA: SPECIAL MEETING 18 OCTOBER 2019

3
MEETINGPROCEDURES
Attending the meeting online? For help please
refer to the virtual meeting online guide available at
https://www.kathmanduholdings.com/ or phone
0800 200 220.

CHAIRMAN’S ADDRESS
David Kirk

THE ULTIMATE SURFINGCOMPANY
Born in Bells Beach, Australia, in 1969, Rip Curl has always been a brand on TheSearch
“The Search was the driving force that led to the creation of Rip Curl... We loved charging
into the unknown and the journey that waited. It was about the great sense of adventure,
anticipation, curiosity and the chance to score great uncrowdedwaves.
Rip Curl helps us live this life...” – Doug ‘Claw’ Warbrick (Rip CurlCo-Founder)

COMBINED GROUP MEETS THE YEAR ROUND NEEDS OF CUSTOMERSGLOBALLY
The combination creates an outdoor and action sports company which offers complementary products with diversificationin
product, channel, geography andseasonality

CEO’S ADDRESS
Xavier Simonet

TRANSACTIONSUMMARY
Acquisition of RipCurl
» Kathmandu has entered into a binding agreement for the acquisition of 100% of the shares in Rip Curl Group Pty Ltd (“Rip Curl”) at an enterprise value of
A$350 million on a debt free, cash free basis
(1)
(NZ$368million
(2)
)
» Acquisition price implies 7.3x EV / FY19 pro forma normalised EBITDA (excluding proportional EBITDA contribution of minority interests not being
acquired)
» Rip Curl is the ultimate surfing company and an authentic, unique global action sports brand with FY19 pro forma normalised revenue of A$455 million
(3)
(NZ$477 million
(2)
) and FY19 pro forma normalised EBITDA of A$49 million
(3)
(NZ$52million
(2)
)
» Completion is expected to occur by the end of calendar year 2019, subject to shareholder approval and customary closingrequirements
» The key risks associated with the transaction are detailed in the Transaction Summary
Rip Curloverview
» Rip Curl is an iconic Australian brand and a designer, manufacturer, wholesaler and retailer of surfing equipment andapparel
» Offers surf-related products, from highly technical wetsuits, boardshorts, swimwear and watches to beach lifestyle apparel, equipment andaccessories
» Global presence across Australia, New Zealand, North America, Europe, South East Asia andBrazil
» Operates through a multi-channel model, which was initially focused on wholesale distribution and has evolved to include direct to customerretail
» Founded in 1969 by the current owners, Brian Singer and Doug Warbrick, and headquartered in Torquay, Victoria
Compellingstrategic
rationale
» Creates a NZ$1.0 billion
(4)
global outdoor and action sports company anchored by two iconic Australasianbrands
» Highly complementary productcategories
» Geographicdiversification
» Complementaryexpertise
» Brand affinity and cultural alignment
(1)
(2)
(3)
(4)
Excludes the value of minority interests owned by Rip Curl that are not being acquired.
Based on a AUD/NZD exchange rate of1.05.
Represents pro forma normalised financials of Rip Curl for the financial year ending 30 June 2019. Pro forma normalised financials reflect Rip Curl’s statutory revenue and EBITDA as disclosed in its audited financial statements adjusted for the impact of certain structural
changesin thebusinessandone-offitems.Refertopage19of the Transaction Summaryforfurtherdetailsoftheseadjustments.
RepresentsproformanormalisedcombinedFY19revenue.Kathmandurevenuerepresentsstatutoryrevenueforthefinancialyearending31July2019.RipCurlrevenuerepresentsproformanormalisedrevenueforthefinancialyearending30June2019asnotedabove.

INVESTMENTHIGHLIGHTS
1
Creates a NZ$1.0bn
(1)
global outdoor and action sports company anchored by two iconic Australasianbrands
2
Rip Curl is a leader in the global surf industry with products that are complementary to Kathmandu from a technical and seasonalperspective
3
Rip Curl provides a platform for Kathmandu's expansion into new core target markets to establish a deeper and more meaningful globalpresence
4
Diversifies Kathmandu by reducing reliance on the Australian and New Zealandmarkets
6
Synergy benefits expected to be achieved over time through leveraging each other’s expertise and realising scalebenefits
7
FY20 pro forma EPS accretion in excess of 10%
(2)
with potential for further upside as synergies are identified postacquisition
5
Significant opportunities to drive top line growth and profit across geographies and commercialchannels
(1)
(2)
Represents pro forma normalised combined FY19 revenue. Kathmandu revenue represents statutory revenue for the financial year ending 31 July 2019. Rip Curl revenue represents pro forma normalised revenue for the financial year ending 30 June 2019 as detailed on page
19of the Transaction Summary.
EPS accretion has been calculated by comparing Kathmandu’s budgeted standalone FY20 EPS (calculated assuming that the acquisition does not occur, and adjusted for the impact of the pro-rata accelerated entitlement offer) against the Combined Group pro forma FY20 EPS
excluding any synergies and one-off transaction costs. The Combined Group pro forma FY20 EPS is based on: (i) Kathmandu’s standalone budgeted FY20 EBIT; (ii) Rip Curl’s standalone budgeted FY20 EBIT; (iii) estimated incremental amortisation costs associated with the
expected purchase price allocations arising from the transaction (noting that, on completion, a formal purchase price allocation exercise will be completed which may give rise to a change in this expense); (iv) the assumed transaction debt funding structure and associated
interestcosts;and(v)Kathmandu’sproformanumberofsharesoutstandingposttransaction(accountingforbothnewsharesissuedunderthepro-rataacceleratedentitlementoffer,andnewsharesissuedtothevendorsintheVendorPlacement).

Europe
Middle Eastand
SouthAfrica
NorthAmerica
Australia andNew
Zealand
COMBINED GROUP HAS A DEEPER AND MORE MEANINGFUL GLOBALPRESENCE
Supplier
relationships
Local
management
capabilities
Global
presence
c.7,300
wholesale
doorways
Retail
footprint of
595stores
(1)
Online
presence
9% ofsales
(1)Comprising 341
owned stores and
254 licensed
stores.
SouthAmerica
South EastAsia

VISION FOR THE COMBINEDGROUP
Shared support functions where operational value can bederived
(1)No changes to the Kathmandu Board are proposed as a result of the transaction. Changes to the scope of existing Kathmandu senior managers’ roles are expected upon completion of the transaction.
(1)
Kathmandu and RipCurl
to leverage respective
strengths and build on
each others’competitive
advantages overtime
Kathmandu and RipCurl
to retain their strong
brand identities and
culturalvalues
Rip Curl andKathmandu
to retain operational
ownership of their
respectivebusinesses
11

SUMMARY OF ACQUISITION FUNDING AND SOURCES &USES
SourcesNZ$mA$mUsesNZ$mA$m
Newdebt231220Purchaseconsideration
(1)
368350
Equity145138Refinancing of existing Kathmandu netdebt1918
Vendor scrip3231Transaction costs and financingfees
(3)
1918
Cash to balancesheet22
TotalSources408388TotalUses408388
Purchaseprice
» Total cash consideration of A$350million
(1)
Funding
» The acquisition, and associated transaction costs, will be fully funded through a combination of equity and debt issuance comprising:
» A 1 for 4 underwritten accelerated entitlement offer to raise NZ$145 million (A$138million
(2)
)
» Vendor Placement of approximately A$31 million (NZ$32 million
(2)
) in new Kathmandu shares to the founders and CEO of RipCurl
» A$220 million (NZ$231 million
(2)
) from debt facilities underwritten and arranged by Credit Suisse AG, SydneyBranch
Timing andclosing
conditions
» Completion is expected to occur by the end of calendar year 2019, subject to shareholder approval and customary closingrequirements
Summary
Sources and uses offunding
(1)
(2)
(3)
Excludes the value of minority interests owned by Rip Curl that are not being acquired.
Based on a AUD/NZD exchange rate of1.05.
IncludesthecostsofM&A,financial,tax,commercialandlegaladvisers,aswellasfeesassociatedwiththeequityraisinganddebtunderwriting.

RESOLUTION 1: ACQUISITION OF RIP CURL
Ordinary Resolution
That the shareholders of the Company ratify, confirm
and approve, including for the purposes of Rule 5.1.1(b)
of the NZX Listing Rules, for all purposes the acquisition
by Barrel Wave Holdings Pty Ltd, a wholly owned
subsidiary of the Company, of all of the shares in Rip
Curl Group Pty Ltd under the share sale agreement
dated 1 October 2019.
Resolution 1
In favour163,108,197
Against87,489
Open/Undecided339,349
Proxies:
In respect of this item of business, the following proxies have
been received:

RESOLUTION 2: AMENDMENT OF CONSTITUTION
Special Resolution
To amend the Company’s constitution in the manner
described in the explanatory notes, with effect from the
close of the Special Meeting.
Resolution 2
In favour161,618,642
Against25,204
Open/Undecided400,491
Proxies:
In respect of this item of business, the following proxies have
been received:

CONCLUSION
Thank you for your participation