KMD BRANDS LIMITED — AGM Information 2011

Nov 17, 2011

KATHMAAJ

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Agenda, 2011 Annual General Meeting

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• Chairman’s address

• Chief Executive Officer’s address

• Ordinary business

• Item 1: Financial Statements

• ◦ Item 2: Election of Directors

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• Item 3: Auditors’ Remuneration

• Item 4: Approval of grant of performance rights to Peter Halkett

• ◦ Item 5: Approval of grant of performance rights to Mark Todd

• ◦ Item 6: Increase in Directors’ Fees

• Other business

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Chairman’s address

Chairman’s address: Financial Highlights

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• Sales of NZ$301.6 million, up 24.5%

• EBIT of NZ$64.0 million, up 32.0% *

• NPAT of NZ$39.1 million, up 55.2% *

• Final dividend of NZ 7.0 cents per share declared (fully franked, fully imputed)

• Prior year EBIT excluding $0.6m of net exchange losses on foreign currency borrowings, and prior year NPAT excluding the impact of IPO listing costs

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CEO address

CEO address: 2011 Annual General Meeting

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• FY11 financial highlights

• Key milestones

• Operational review

• Growth strategy update

• Trading performance update

• FY12 outlook

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New Camberwell (Melbourne) store

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CEO address: FY11 financial highlights

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• Record sales ($306.1m) and earnings result (EBIT $64.0m)

• Same store sales growth 15.7% (12.9% at constant exchange rates) underpinned by: ◦ product range growth,

• increased inventory investment,

• helpful weather conditions.

• Strong growth in gross margins to 65.5% (230bps improvement).

• Increased EBIT margin (120bps improvement). EBIT increase of 32%.

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SALES (NZ$m) EBIT (NZ$m) NPAT (NZ$m)
$306.1 $64.0 $39.1
$245.8 $48.5
$215.6 $44.1
$25.2
$192.8
$33.1 $32.9
$151.4
$14.9
$11.5
$8.0
FY07 FY08 FY09 FY10 FY11 FY07 FY08 FY09 FY10 FY11 FY07 FY08 FY09 FY10 FY11
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• FY07 – FY09 as presented in the Prospectus dated 23 October 2009, and FY10 excluding the impact of IPO listing costs, and $0.6m of net exchange losses on foreign currency borrowings

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CEO address: FY11 key milestones

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• Opening of our 100[th] store (111 stores at 31 July)

• Summit Club membership numbers exceed 500,000

• New brand identity launched 1 September. Most new season product and approximately 70 new and existing stores now carry the new brand identity

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• Core systems upgrade completed, new distribution and inventory management systems now operative

8

CEO address: Operational review

• Australian market now delivers over 60% of total sales.

• Stores opened during FY11:

• Australia: Logan, Wollongong, Perth Harbour Town, Whitford City (WA), Belconnen (Canberra), Southport, Toowoomba, Orange, Cairns, Wagga Wagga, Southland (Melbourne).

• New Zealand: Papanui, Whakatane, Ashburton.

• Store relocations in Palmerston North and New Plymouth, and store extensions at Sylvia Park (Auckland), and Innaloo (Perth).

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Store Rollout History
AU NZ UK
6
6
39
6
4 36
31
4 29
4
24
20 66
55
45
42
30
22
FY06 FY07 FY08 FY09 FY10 FY11
46 58 75 82 97 111
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9

CEO address: Growth strategy update

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• New store rollout: Unchanged target of 15 new stores in FY12, and overall goal of 150 stores across Australia and New Zealand.

We have already secured 5 new sites in FY12:

• New Zealand: Coastlands, The Palms

• Australia: The Rocks, Warrnambool, Tamworth

• Improve existing store network: Four major store relocations underway in Chatswood, Camberwell, Newmarket, and Wellington.

• Grow product offering: Continuing growth covering new categories, as well as range colour and size extensions in existing categories.

• Summit Club: Membership numbers now exceed 550,000. Target one million members.

• Online and digital: Major enhancement project of our online site is well progressed. A dedicated project team already established, and final vendor negotiations under way.

• United Kingdom: Now being integrated into the Australasian operational structure. Online emphasis.

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CEO Address: Trading pattern

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Last Year Sales mix across the year

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First 16 weeks to Includes Christmas Sale and
Includes Easter and Winter Sales
21 Nov 2010 January Clearance
17% 24% 59%
FIRST HALF-YEAR SECOND HALF-YEAR
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• Three major promotions remain critical to our annual trading (above 60% of annual sales in FY11), in order of size:

Winter

Christmas

Easter

• First quarter is less than 5% of full year’s earnings

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CEO address: Trading performance update

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15 Weeks to 13 November 2011

• Total group sales for the first 15 weeks $56.0m, approximately $7.7m or 16% above same period last year (17.6% at constant exchange rates).

• Same store sales up 7.6%[*1] for the first 15 weeks (last year first 16 weeks was up 2.1%).

• New Zealand same store sales growth slightly higher than Australia YTD, and UK same store sales continued to show small decrease.

• First half-year profit result is highly dependent on Christmas and January trading period.

• Same store sales up approximately 9.2% at constant exchange rates. Average conversion rate year-to-date NZ$/A$ 0.795 and NZ$/UK£ 0.508. Same store sales measurement includes stores from their 53[rd] week of trading, but excludes all Christchurch stores.

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CEO address: FY12 outlook

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The Market

• Unlikely to see improvement in the current retail conditions in the short term

• Operating costs such as rent and payroll outpacing retail sales growth

• More competition– regionally & globally “active outdoor” seen as an attractive sector

• Volatility and unpredictability becoming the norm

Summary

• Difficult to provide specific guidance due to the market uncertainty, but Kathmandu is planning for continued growth and remains positive about the FY12 outlook

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Other business