SUPER RETAIL GROUP LIMITED — Capital/Financing Update 2017

May 3, 2017

Trading and Strategy Update Peter Birtles | Group Managing Director and Chief Executive Officer Macquarie Securities 2017 Australia Conference 4th May 2017

Content

Trading Update

Group Strategy

Trading Update

Auto Retailing

• LFL sales growth circa 2.5% in the first 17 weeks of H2, circa 3.0% YTD to 29 April 2017

• Segment EBIT margin continues to track above PCP

• 315 Supercheap Auto stores at 29 April 2017

Leisure Retailing

• LFL sales growth circa 7% in the first 17 weeks of H2, circa 6.0% YTD to 29 April 2017

• Segment EBIT margin continues to track above PCP

• 134 BCF stores and 17 Rays stores at 29 April 2017

Sports Retailing

• LFL sales growth circa 1.5% in the first 17 weeks of H2, circa 4.5% YTD to 29 April 2017

• Lower LFL growth reflects lower traffic – conversion and ATV trends are strong

• Segment EBIT margin continues to track above PCP

• 101 Rebel stores and 67 Amart Sports stores at 29 April 2017

Group

• Group costs forecast to be $23 million, including unallocated logistics costs of $4 million, digital investment of $7 million and other Group costs of $12 million

• Planned full year capital expenditure circa $100m to support new stores, refurbishment programs, omni-retail development and general requirements

Full year 2016/17 outlook is unchanged from start of year

• Based on current trading conditions, 2016/17 Group EBIT expected to be circa 16% to 18% higher than the PCP

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Content

Trading Update

Group Strategy

Strategic Context

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Forces
Global
impacting
Competitors
retail
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Increasing Evolving
Changing
Digitalisation Customer Business
Workforce
Power Models
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Historical levers of differentiation (range and price) will no longer be enough Building a stronger emotional connection with customers is critical – built around their passions for their leisure activities

Implications for Super Retail Group We have a significant advantage through connecting our customers with our team members who share their passions

Organisational capabilities have to be World-Class not Australasian class

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Group Strategy on a Page

OUR VISION

Inspiring you to live your passion

OUR PURPOSE

To provide solutions and engaging experiences that enable our customers to make the most of their leisure time

OUR STRATEGY

OUR GOALS

Growing businesses in Engaging capable team Building a world class high involvement members who share our omni-retail organisation categories customers’ passions Healthy, Inspired, engaged Sustainable and Top quartile passionate and and satisfied efficient omni-retail shareholder returns high performing customers capabilities team members

OUR BUSINESSES

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Solutions that engage and inspire

OUR PILLARS

OUR VALUES

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Agile &
Seamless Actionable Engaged & Strong &
Future Efficient
Omni-Retail Customer Capable Sustainable
Organisation Supply
Capabilities Insights Team Foundations
Chain
PASSION OPENNESS INTEGRITY CARE DISCIPLINE
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Group Strategy on a Page

OUR VISION Inspiring you to live your passion To provide solutions and engaging experiences that enable our customers to OUR PURPOSE make the most of their leisure time Growing businesses in Engaging capable team Building a world class OUR STRATEGY high involvement members who share our omni-retail organisation categories customers’ passions Healthy, Inspired, engaged Sustainable and Top quartile passionate and and satisfied efficient omni-retail OUR GOALS shareholder returns high performing customers capabilities team members

OUR BUSINESSES

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Solutions that engage and inspire

OUR PILLARS

OUR VALUES

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Agile &
Seamless Actionable Engaged & Strong &
Future Efficient
Omni-Retail Customer Capable Sustainable
Organisation Supply
Capabilities Insights Team Foundations
Chain
PASSION OPENNESS INTEGRITY CARE DISCIPLINE
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Group Strategy on a Page

OUR VISION

Inspiring you to live your passion

To provide solutions and engaging experiences that enable our customers to OUR PURPOSE make the most of their leisure time Growing businesses in Engaging capable team Building a world class OUR STRATEGY high involvement members who share our omni-retail organisation categories customers’ passions Healthy, Inspired, engaged Sustainable and Top quartile passionate and and satisfied efficient omni-retail OUR GOALS shareholder returns high performing customers capabilities team members OUR BUSINESSES Solutions that engage and inspire Agile & Seamless Actionable Engaged & Strong & Future Efficient OUR PILLARS Omni-Retail Customer Capable Sustainable Organisation Supply Capabilities Insights Team Foundations Chain OUR VALUES PASSION OPENNESS INTEGRITY CARE DISCIPLINE

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Our businesses deliver solutions that engage and inspire

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Curated range that suits
the local market
Stores and Websites that Exclusive and innovative
are convenient, inspiring product (incl private
and easy to shop brand)
Advice and support from OUR Service solutions to help
Team Members who customers live their
CUSTOMER
share the passion passions
Creating and supporting
Rewarding and relevant
communities of like
loyalty programs
minded customers
Relevant and targeted
marketing and
promotions
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Participating in high involvement categories mean that we can win by connecting with and inspiring our customers around their passions by providing solutions and engaging experiences not just product and price transactions

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Our focus is on helping our
customer catch the fish they’ve
always wanted to…
…not just to sell them the fishing
rod.
Allowing our customers to shop
their way by integrating our web
business with our extensive network
of conveniently located stores is a
major competitive advantage
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CREATING UNIQUE RETAIL EXPERIENCES

Rebel Accelerate stores

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Supercheap Auto Vision store

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New Rays format

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Buy online & pickup instore

BUILDING LONG TERM VALUE ADDED RELATIONSHIPS WITH OUR CUSTOMERS

Amart – Community Kickbacks

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Supercheap Auto – ‘We’ll fit it for you’, AutoGuru

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BCF – Fisho App, ‘How To’ YouTube channel

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Strategic Pillars

PILLAR	PURPOSE	CURRENT STATE	FIVE YEAR VISION
Seamless Omni-retail Capability	Build the capabilities that will enable our customers to shop their way, how, where and when they choose	Emerging cross channel integration and developing eCommerce solutions	World class Omni-retail capability that meets customer expectations
	Challenge our operating
Future Organisation	approach, and improve how effectively and efficiently we work to deliver our strategy and provide the foundations of a scalable cost base	Traditional retail operating approach	Efficient and effective Group operating capability, underpinning a world class Omni-retailer
Actionable Customer Insights	Develop a clear understanding of our customer’s leisure passions, buying habits and opinions to drive the development of the best customer experience.	Basic in-house customer analytics capability	The capability to generate insights that improve the customer experience and maximise customer lifetime value

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Strategic Pillars (cont)

PILLAR	PURPOSE	CURRENT STATE	FIVE YEAR VISION
		Distribution centre
Agile & Efficient Supply Chain	Deliver a high value, connected supply chain network that meets customer, safety and financial goals	and freight network to support business plans are built and operational	Source to customer supply chain network to deliver the flexibility and agility required
Engaged & Capable Team	Maintain an achievement culture that is consistent with our values, attracts, engages and empowers team members who share our customer’s leisure passions	High levels of team member engagement and retention	Accelerated development of our team members to have ‘an achievement edge’ to deliver against the changing needs of the business
Strong & Sustainable Foundations	Sustainable business performance, underpinned by system and information management capability that deliver visibility, alignment, stability and focus.	Fragmented business and IT infrastructure that supports traditional product and physical channel business model	A sustainable group infrastructure, that supports an Omni-retail operating environment, and meets customer expectations

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Delivering improved returns in a more competitive market

	•	Auto, Outdoor Leisure and Sports markets are all projected to continue to grow,
MARKET GROWTH	•	driven by population growth, product innovation and participation Our analysis of top selling lines suggests overall deflationary impact of price
		competition may be less than projected in some market analysis
	•	Our businesses today have market shares of between 20–30%, with each of our
		businesses under-represented in some states representing a direct, ongoing growth
		opportunity
MARKET SHARE	•	Our online business is growing rapidly and will continue to grow share and profitability
GAINS	•	We see the opportunity to increase store numbers to around 800 from 635 today
	•	Improved omni-retail capabilities should drive customer engagement
	•	A more competitive market will require scale and capability, or clear specialisation, to
		succeed – this is likely to drive further consolidation
	•	We continue to deliver supply chain efficiencies and expect to deliver further
		efficiencies through review of business model and ongoing operational improvements
COST OF DOING BUSINESS	• •	BCF, Amart Sports and Rays businesses are expected to deliver improved margin as they continue to increase in scale and maturity Investment in competitive pricing should be partially funded by lower buying prices,
		as well as an increase in direct sourcing of international brands and private brand
		development
CAPITAL	•	The Group is continuing to deliver significant improvement in working capital
EFFICIENCY		efficiency

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Delivering our Financial Targets

5 Year Target	Store Numbers	LFL Growth	**EBIT Margin ***	Pre Tax ROC % **
Auto	350	>3% PA	12%	> 50%
Leisure	220	>3% PA	11%	> 30%
Sports	230	>4% PA	11%	> 30%

• Based on current competitive environment

• ** Excludes acquired goodwill and brand names

Opportunities

Challenges

• Growing store numbers to over 800

• Delivering LFL growth of 3% to 4%

• Range management and sourcing initiatives

• Deliver $20m saving in supply chain costs

• Address loss making small businesses

• Eliminate Group transformation costs

• Private brand profit contribution

• Increased investment in digital and technology

• Investment in in-store customer experience

• Lower domestic growth

• Consumer confidence

• Weakening Australian dollar

• Competitive intensity

• Amart Sports scale and profitability

• Successful transformation of Rays

• Group costs efficiencies targeting $10m

• $75m to $100m working capital savings

• Omni retail capability

• Effective change management

Compared to 2014/15 base

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Content

Trading Update Group Strategy