UNIVERSAL STORE HOLDINGS LIMITED — Investor Presentation 2021

Apr 26, 2021

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UNIVERSAL STORE INVESTOR PRESENTATION TO GOLDMAN SACHS CONFERENCE

Brisbane, 27 April 2021

Universal Store Holdings Limited (‘Universal Store’, ASX: UNI), will today present to institutional investors at the Goldman Sachs Twelfth Annual Emerging Leaders Conference.

During the conference Universal Store’s Chief Executive Officer, Alice Barbery and Chief Financial Officer, Renee Jones will be presenting the attached presentation.

Slide 12 in the attached presentation provides an update on our Q3 21 sales and outlook for FY21.

Authorised for release by the Board of Directors of Universal Store Holdings Limited.

For more information, please contact:

investorrelations@universalstore.com.au Alice Barbery Chief Executive Officer +617 3368 6503

ABOUT UNIVERSAL STORE

Universal Store is a specialty retailer of youth casual apparel that operates 65 physical stores across Australia and a fast-growing online store.

The Company's strategy is to deliver a frequently changing and carefully curated selection of on-trend apparel products to a target 16–35 year old fashion focused customer. Universal Store seeks to provide a high level of customer service, consistent price proposition and a welcoming and engaging store environment. It offers a diversity of brands and styles in order to cater to the constantly evolving and widely varied tastes and trends observed in the youth apparel market .

Universal Store Pty Ltd ABN 89 085 003 158 Unit 6/2 Jenner Street, Nundah, Qld 4012 p: 07 3368 6500 f: 07 3368 6516 e: mail@universalstore.com.au

ASX UNI 4 21.2

EMERGING LEADERS CONFERENCE: GOLDMAN SACHS

TUESDAY 27[TH] APRIL

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UNIVERSAL STORE HOLDINGS LIMITED ACN 169 039 721

Presentation

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SECTION
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APRIL 2021
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PRESENTING CONTENTS

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Alice Barbery CEO

• 10 years at Universal Store

• CEO for the past three years

• Previously COO for seven years, including store operations, marketing, distribution, HR, learning and development

• 30 years’ industry experience

• Previous leadership roles at Virgin Australia, Colorado Group, EAST Clothing and the GAP

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Renee Jones CFO

• Commenced at Universal Store in 2019

• 20+ years’ experience across retail and service industries

• Previous leadership roles include General Manager Finance Telstra (Consumer and Small Business), Divisional CFO at Ardent Leisure, Divisional CFO Fantastic Furniture

1. Universal Store Overview

2. Financial Overview

3. Questions

4. Appendix

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UNIVERSAL STORE – OVERVIEW

A leading Australian youth-focused apparel retailer with customer service at its core

Who is Universal Store?

Who is our quintessential customer?

Omni-channel retailer

Casual youth fashion apparel

66 stores around Australia (including online)

Curated domestic, international and private brand collections

High service, friendly experience

Millennials and Gen Z Fashion focused (16-35 year old) (and buy now preference) ~52% women, ~40% men, Late education or early adult ~7% unisex[1] phase of life Digital natives Socially active Sub-culture ‘fluid’ Occasion and event driven

Some implications about our customers….

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Relatively few financial commitments or long term savings goals High proportion of income is "disposable"

Shop across multiple brands seeking what’s new

Buy now pay later products and parents support spending capacity Most active customers seek outfits to fit in or stand out

1. Based on FY20 revenue only, excluding ticket sales and other adjustments.

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THE UNIVERSAL STORE DIFFERENCE

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Physical stores (#) LFL sales growth (%) [1]
65 65
60 Average = 13% (FY15-20) 27%
52
45
1 17%
Unique Culture 35
31 13% 14% [16%]
11%
10%
2 Our Retail Formula
Jun15 Jun16 Jun17 Jun18 Jun19 Jun20 Dec20 FY15 FY16 FY17 FY18 FY19 FY20 H1
FY21
Revenue (A$ million) Pro forma EBIT (Pre-AASB 16) 37
177 (A$ million)
3 Strong Execution 146 155
24
112
21
88
69 14
51
Superior Results
FY15 FY16 FY17 FY18 FY19 FY20 LTM FY18 FY19 FY20 LTM
Dec20 Dec20
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Universal Store continues to deliver consistent growth and margin expansion

1. New stores are included in LFL calculations once the store has traded for 55 weeks (reflecting one year plus an initial three week “ramp up” period). Closed stores are excluded from LFL calculations from the date of closure. Stores that were closed during COVID-19 are excluded from LFL sales growth calculations for the weeks that they were closed. Refurbished, resized or stores relocated in the same centre remain in the Like-for-Like calculations. Includes online. Excludes ticket sales, freight income, gift card income and fundraising revenues;

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AGILE BUSINESS THAT CONTINUOUSLY ADAPTS TO CHANGING CUSTOMER PREFERENCES

The 'constant' is 'change' and change triggers reasons for new purchases. COVID-19 is an extreme example

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Pre COVID-19 Through COVID-19 Future
Customer wallets
Festivals and concerts Virtual social life
✓ Spend on international travel and large
scale social events expenditure to continue
Restaurants and bars Small-scale gatherings to be re-directed
✓ Retail and hospitality jobs resume
✓ Savings from fiscal stimulus
Nightclubs and parties Working from home
✓ Support from parents
✓ Access to buy-now-pay-later products
Social media and online
Holidays
shopping surges
Customer spend
School / University (in person) Studying from home
✓ Easing social distancing (bars, parties,
education, life events)
Shopping and hanging out Purged wardrobe and ✓ Melbourne eases restrictions
(e.g. Galleries) focused on comfort
✓ Life normalises and social lives resume
Customers have adjusted their lifestyles ✓ Seasonal change continues
Working (retail, hospitality, through COVID-19 and we have adapted.
early careers) Fundamentals unchanged, and pent up
appetite to re-engage socially accumulates
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Through COVID-19, we have seen our customer continue to spend albeit for a different social occasion. 'Change' benefits Universal Store as it triggers different shopping needs in consumers, prompting new purchase needs (or wants)

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OUR GROWTH DRIVERS

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1 2 3 4 5
NEW STORE STORE ONLINE OPTIMISE PRIVATE BRAND
ROLLOUT MATURATION GROWTH PRODUCT MIX EXPANSION
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• A number of new • A significant portion stores are currently of the store network being negotiated is relatively new and remains in the

• • Overall target is ramp up phase of 100+ stores across development Aus/NZ

• Our market share

• • We’re present in remains relatively just over half of the low despite over top 92 Australian five years of shopping centres compounding growth

• Customers are still discovering us

• Ship-from-store and click & collect to drive sales

• Introduction of store-to-door

• Continued investment in digital marketing and website capabilities

• Introduction of same day delivery

• Introduction of new brands and product subgroups

• Private brand expansion in under penetrated categories

• Consistently testing new categories and products before backing in depth

• Our private brand strategy is customer led and complimentary (not a substitute) for our third party brands

• Continue to focus a substitute) for our on differentiation third party brands and data and insights driven • Continue direct range curation and sourcing shift to replenishment further improve gross margins

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DIFFERENTIATED AND GROWING PRIVATE BRAND STRATEGY

Private brand strategy

Private brand growth opportunity

Revenue by product type[1] (%)

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On-trend, gap fill
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Complementary
(not copy)
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Exclusive and different
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Accessible

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Underlying gross margin expansion
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Elevate the styling and quality of
brand and merchandising
promotional materials
Increase direct sourcing of private
brand range
Increased penetration
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Expand the private
brand menswear offering
Expand private brand into additional
product categories
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FY16 FY20
10%
30%
70%
90%
Private brand 70%30%Third party brand
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Gross margin by product type[2] (%)

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FY20
+12% 68%
56%
Third party brands Private brands
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Direct sourcing of private brand product (%)

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FY20 Medium-term opportunity
18%
50% 50%
82%
Local sourcing agents Direct sourcing
8218 %
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Private brands complement third party brands and complete customer outfits. Continued execution of existing strategies will drive further growth in gross margins, with significant runway for the mens private brand offering

1. As a percentage of total product sales

2. Gross margin (%) based on total sales (including ticket sales) and total COGS (including merchant charges and commissions, online delivery charges, shrinkage, settlement discounts received and other items which are captured within total gross margin but not allocated to individual products/brands)

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Financial overview

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CONSISTENT TRACK RECORD OF STRONG REVENUE GROWTH

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Revenue (A$ millions) Highlights
177.0
Consistent double digit LFL sales

154.9 21.4 growth (13.4% average [2] )
146.5
13.6
8.5
112.3
5.1
Strong track record of new store
87.7
3.8  roll-out (5–10 per annum over the
69.3 155.6
2.4 137.9 141.3 past five years)
50.9
107.2
1.3
83.9
66.9
49.5
Online revenue growth

(>50% CAGR [2] )
FY15 FY16 FY17 FY18 FY19 FY20 LTMDec20
Physical stores Online COVID-19 affected periods
Stores (#) [1] 31 35 45 52 60 65 66
LFL sales
12.6% 17.1% 10.2% 13.8% 15.9% 10.7% 19.8%
growth (%) Cost effective growth of brand

Online sales
2.6% 3.5% 4.3% 4.5% 5.8% 8.8% 102.4% awareness and online penetration
(% total)
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Note: Pro forma financials shown

1. Physical stores only, excludes the online store 2. FY15-FY20

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1H FY21 HIGHLIGHTS

Robust sales growth for the sixth consecutive year

• Sales +23.3% to $118.0m, with LFL sales +26.2%

• Store sales +16.1% to $104.0m, LFL +19.1%

• Online sales +128.3% to $14.0m, representing 12% of total sales for 1H FY21

Strong gross profit result

• Gross profit $ +24.5% to $67.9m

• Gross profit % +60 bps to 57.6%

Underlying EBIT[1] +69.4% to $31.5m

• Strong operating leverage drove underlying EBIT margin to 26.7% (1H FY20 19.4%)

• Includes $3.0m net JobKeeper benefit (to be repaid in 2H FY21)

Excellent NPAT growth

• Statutory NPAT up 47.7% to $15.8m

• Underlying NPAT[1] of $21.1m up 63.6% on 1H FY20 ($12.9m)

Outstanding operating cashflow

• Underlying operating cash flow $36.1m

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• Net cash position $22.5m at period end

• Five cents per share fully franked interim dividend declared

• Results are underlying and exclude the impact of (i) AASB 16 leases and (ii) one-off costs associated with the November IPO. Refer to Appendix 2 for a reconciliation of underlying and statutory results. LFL sales are adjusted for COVID-19 related store closures.

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SALES UPDATE AND OUTLOOK

Q3 FY21 (un-audited)

• Excellent sales performance across Stores and Online with headline sales growth at +39.6% and comparative (L4L) growth at +37.3%.

• Q3 sales growth aided by softer sales across March last year as the initial impacts of COVID-19 began and we led into our first national lockdown in April.

• LFL Store sales +27.5% and Online +148.2%.

Looking at Q4 FY21

• We enter an uncertain period where our comparative sales measure becomes less meaningful as we cycle a period of national store closures in April and early May 2020.

• All stores had reopened by 11th May 2020 (at reduced trading hours), however foot traffic remained depressed especially in CBD stores and tourist areas.

• We are seeing our customers resume more aspects of their social lives with CBDs continuing to recover along with a return to domestic tourism (inc NZ).

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Questions

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Appendix

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LARGE AND GROWING APPAREL MARKET WITH TAILWINDS FOR YOUTH CASUAL APPAREL SEGMENT

~$24 billion in annual spend, growing at ~4% p.a. historically[1,2]

High and growing levels of youth spending

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Deferral of traditional life milestones
50 20% 1
and robust parental financial support
Driven by 54% decline in
April with strong recovery
in May and June (spend 15%
+129% and 21%
40 respectively) 2 Prioritising spending on social
10% experiences and focus on appearance
30 5% 3 Growing adoption of Buy Now Pay
Later products
-
Casualisation of workplace
20
(5%) 4 attire and increased working-from-
home
(10%)
10
5 Large and growing number of students
(15%)
-
(20%)
FY00 FY02 FY04 FY06 FY08 FY10 FY12 FY14 FY16 FY18 FY20
Spend Year-on-year growth
Category growth (%)
Category spend ($bn)
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Spend on clothing, footwear and accessories in Australia, which totals ~$24bn, exhibited resilient growth having grown in 18 of the last 20 years.3 Management believes that the youth apparel segment, which represents one-third of Australia's population, is growing faster than the broader market, driven by a number of positive tailwinds

Source: ABS data series 8501, Retail Trade Australia; 1 CAGR of clothing, footwear and accessories spend FY2000–FY2020; 2 Seasonally adjusted; 3 7 million people in Australia aged 16-35; Australian Bureau of Statistics, Data series 3101.0, Australian Demographic Statistics. Data available to June 2019

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CONTINUE TO CAPTURE SHARE THROUGH DIFFERENTIATION AND SUPERIOR EXECUTION

Youth casual apparel segment overview (examples)

Universal Store growth vs. market

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FY15-20 CAGR (%)
Segment
24.9%
Brand aggregator
specialty retailers of
casual fashion
~16x
General domestic
casual fashion 1.5%
retailers
Clothing, footwear and Universal Store revenue
accessories market
Global fast fashion
retailers
Mixed wholesale and Universal Store remains a small player
retail brand owners
in a large and fragmented market
retailers
Premium footwear
retailers
Department stores
Differentiated and purpose built model to
thrive from fashion change
Street, surf and
skate retailers
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Universal Store operates in a large and fragmented market in which it continues to successfully capture share

Source: ABS data series 8501, Retail Trade Australia;

1 CAGR of clothing, footwear and accessories spend FY2000–FY2020;

• 2 Unadjusted data (no seasonal adjustment);

3 IBISWorld, Clothing Retailing in Australia (February 2019) 2018-2019 figures based on clothing retailing only.

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APPENDIX 4: STORE FOOTPRINT

Total Stores: 65

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NT
1 QLD
19
WA
11
2
SA
NSW
17
ACT
2
VIC
13
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Disclaimer and im ortant information p

The material contained in this presentation has been prepared by Universal Store Holdings Limited ABN 94 628 836 484 (Universal Store) and is general background information about the businesses, operations and activities of Universal Store and its subsidiaries, current as at the date of this presentation. The information is provided in summary form only and does not purport to be complete or comprehensive. The information in this presentation should not be considered as advice or a recommendation for investment purposes, as it does not take into account your particular investment objectives, financial position or needs. These factors should be considered, with or without independent professional advice, when deciding if an investment is appropriate.

This presentation may contain forward-looking statements with respect to the operations and businesses of the Universal Store. The assumptions underlying these forward-looking statements involve circumstances and events that have not yet taken place and which are subject to uncertainty and contingencies outside Universal Store’s control. Readers are cautioned not to place undue reliance on any forward-looking statements. Universal Store does not undertake any obligation to publicly release the result of any revisions to forward-looking statements in this presentation or to otherwise update forward-looking statements, whether as a result of new information, future events, or otherwise, after the date of this presentation. Past performance is not a reliable indication of future performance.

To the extent permitted by law, no responsibility for any loss arising in any way (including by way of negligence) from anyone acting or refraining from acting as a result of the material contained in this presentation is accepted by Universal Store.

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