SUPER RETAIL GROUP LIMITED — Earnings Release 2014

Aug 20, 2014

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21 August 2014

ASX/Media Announcement

Super Retail Group reports 5.6% increase in Net Profit after Tax

Super Retail Group Limited (ASX:SUL) today announced a 5.6% increase in net profit after tax to $108.4 million for the 52 week period to 28 June 2014.

Result highlights include:

• 4.6% increase in Group sales to $2.11 billion

• 8.7% increase in Group‟s EBITDA to $237.5 million

• 5.3% increase in earnings per share to 55.1 cents

• 5.3% increase in full year dividend per share to 40.0 cents

• Strong growth in profit contribution from the Auto division

• Multi-channel development programs progressing in line with plan

• Team member engagement increased from 66% to 68%

The Board declared a fully franked final dividend of 21.5 cents per share bringing the fully franked dividend declared for the full year to 40.0 cents per share, an increase of 2.0 cents per share (5.3%) over the prior year. The final dividend will be paid on 2 October 2014 with a record date of 1 September 2014. The current policy of distributing between 55% and 65% of underlying net profit after tax in the form of dividends will enable the Group to balance its investment in growth opportunities and building group capability with gradually paying down debt and increasing dividends to shareholders.

The company will again provide shareholders with the opportunity to reinvest their dividends through the Dividend Reinvestment Plan. Dividends will be converted to shares at a nil discount to market value and the shares will be acquired on market to neutralise the effect of the Dividend Reinvestment Plan on all shareholders.

Super Retail Group Managing Director and Chief Executive Officer, Mr Peter Birtles, said the overall result was in line with that forecast to the market on 16 June 2014 and reflected mixed performance across the Group.

“The Auto Retailing division maintained its 10 year track record of delivering annual EBITDA growth of around 10%, reflecting the successful transition of the division‟s leadership from David Ajala to Chris Wilesmith. David Ajala has now assumed the leadership of the Leisure Retailing Division,” Mr Birtles said.

“In the Leisure Retailing division, the BCF business was impacted by a slowdown in sales in stores that had previously benefited from investment in the mining industry, a higher level of sales cannibalisation from new stores and some internal execution issues.

“The Sports Retailing Division had a solid start to the year but performance was impacted by inventory supply challenges resulting from the implementation of new merchandise and supply management systems in October and from a slowdown in customer demand following the federal budget and a warmer start to winter.

„Group net profit after tax decreased by 7%, after adjusting for current year one-off tax benefits of $2.2m and prior year restructuring provisions of $11.3m.

“We made a number of operational changes to address the areas that impacted performance in the 2014 year and we expect to re-establish the earnings momentum of the BCF, Rebel and Amart Sports businesses in the 2015 year.

“Following the restructuring initiatives undertaken in the 2013 year, good progress was made in the 2014 year in lifting the performance of the Ray‟s Outdoors and FCO businesses but both businesses are generating returns below the Group‟s targets. We will continue to implement initiatives to increase the customer base and the frequency of customer visitation for both businesses.

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Super Retail Group Limited

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“We remain focused on developing the capabilities we will need to operate a successful multi-channel retail organisation. During the year, the Group invested circa $47.9 million in capital expenditure and $9.8 million in operating expenses on these programs.

“We continue to build our loyalty programs across the Group and now have over one million members in each of our Supercheap Auto, BCF, Ray‟s Outdoors and Rebel clubs. Growth through our online channels significantly exceeded our physical store growth but we have work to do on improving our online fulfilment capabilities.

“We successfully tested store of the future concepts designed to create a more engaging customer experience in our Supercheap Auto and BCF businesses and plan to commence a rollout program in the coming year.

“We opened a new distribution centre in Western Sydney in April and are on track to open a similar facility in Northern Brisbane in the 2015 financial year.

“We grew our stable of private and exclusive brands across the Group and rolled out the JDA inventory planning system across the Leisure Retailing Division and into the Auto Retailing Division. Although we have encountered some challenges post implementation, the establishment of the Group‟s SAP platform into the Sports Retailing Division will facilitate consistent sourcing and supply chain processes across all businesses.”

Looking Forward

Mr Birtles said in the year ahead the Group would maintain an appropriate balance between firstly delivering growth in sales and profit and reducing working capital in its existing businesses and secondly building its multi-channel capabilities.

“We expect like for like growth in the first half of the year to be modest given the strong growth in the first half of the prior year and the softness in consumer confidence but we expect higher second half growth as benefits from operating improvements are delivered and as we cycle less demanding comparatives,” he said.

“We expect to grow both gross and EBITDA margins across the Group through a combination of sourcing, ranging, promotions and cost management initiatives. EBIT margin growth will be lower as we incur increased depreciation charges resulting from the supply chain and information systems investment over the last two years.

“The new financial year started in line with our expectations. In the first six weeks, Group like for like sales are just ahead of the prior year which is a strong improvement on the trend experienced over the last eight weeks of the prior year. “We are planning to open between 20 and 30 new stores and expect to refurbish between 70 and 80 stores across the Group.

“We will complete the development of our new logistics network, opening our new distribution centres at Brendale in Queensland and reconfiguring our facilities in Perth, Melbourne and New Zealand.”

ENDS

The Operating and Financial Review included in Schedule 4E sets out a more extensive commentary on the Group‟s financial performance and future strategy.

For further information: Mr Peter Birtles Mr David Burns Managing Director & CEO Chief Financial Officer Super Retail Group Super Retail Group 07 3482 7900 07 3482 7900

Peter Birtles and David Burns will be presenting the results by teleconference on 21 August 2014 at 10am (AEST). To listen to this presentation go to the Boardroom Radio website (brr.com.au).

Released through: Ms Stephanie Paul Ms Peta Gabriel Managing Director Manager Phillips Group Phillips Group 07 3230 5000 07 3230 5000 0418 753 062 0418 752 012