Trading Update to 31 March 2019

A S X A N D N Z X A N N O U N C EM E N T

S A L E S P E R F O R M A N C E C O N T I N U E S T O S T A B I L IS E D U R I N G Q 3

T R A D I N G U P D A T E T O 31 M A R C H 2 0 1 9


9 April 2019
KEY POINTS

• Ongoing stabilisation of sales performance – Against prior year, same store sales were down by 1.5% and total
sales down by 0.8% for the third quarter to 31 March 2019, comparing favourably to FY19Q1 and FY19Q2 same
store sales which were down 11% and 2.9% respectively.

• Encouraging signs from the adoption of a new retail operating model in March – Same store sales grew during
the month of March, following the introduction of the company’s new integrated customer-led retail operating
model, focused on greater alignment of merchandise, marketing and retail operations.

• Gross margin held at 62.1% for the first nine months of FY19 (down from 62.7% for the same nine-month period
in FY18).

• e-commerce sales (included in the segment numbers below) of $12.5m for the nine-month period to 31 March
2019 (up 53% on the same nine-month period in FY18) now represent 2.9% of total sales for the Group.

• As part of the ongoing programme of store portfolio management, one store opened and five under-
performing stores were closed during the quarter, giving a total of 307 stores trading at 31 March 2019
(including the one remaining Emma & Roe store).

Commenting on the result, Michael Hill International CEO Daniel Bracken said: “The company’s performance
continued to stabilise during the quarter, as refinements to the strategy improved our position from the first half,
further regaining ground lost in the first quarter.

“We are particularly encouraged by the early results achieved from our new integrated customer-led retail operating
model, which was introduced in March and saw same store sales grow for the month. This new model was one of the
critical strategic refinements announced with our half-year results.

“This new approach commenced in March to coincide with the launch of Michael Hill’s proprietary Southern Star
diamond collection. We have already seen the potential for the new integrated model to lift customer engagement and
sales, as well as improve operational efficiencies.

“Our continued focus on improving our overall cost of doing business also saw the implementation of an initial $5 million
annualised cost reduction programme in January. Work has now commenced to capture the second tranche of a further
$5m in annualised cost savings, over the coming financial year.

“This is an exciting time for the company as we continue to deliver on our strategic initiatives and make fundamental
improvements to the way we operate. We are encouraged by the progress being made as we create a more sustainable
business model for the future and deliver value for shareholders,” Mr Bracken said.

MICHAEL HILL SEGMENT BREAKDOWN

• Australian same store sales were down 3.4% for FY19Q3. Retail conditions remain challenging in Australia,
however the region delivered sales growth in March following the introduction of the Group’s new retail
operating model. One store opened during the quarter, and three stores were closed, giving a total of 171
Group stores trading at 31 March.

• The New Zealand segment same store sales were down 6.3% for FY19Q3. While conditions remained stable
during January, February and early March, the latter weeks of March proved especially challenging in the
circumstances, with a slowdown in overall consumer sentiment and spending. One store closed during the
quarter, giving a total of 52 stores trading at 31 March.

• Canadian stores delivered same store sales growth of 0.1% for FY19Q3. March was a particularly strong month,
with higher growth in same store sales achieved. One store closed during the quarter, giving a total of 84 stores
trading at 31 March.


Revenue for continuing operations from the sale of goods and services for the three months to 31 March 2019:

The following figures are in Australian dollars Last Year This Year % Var
Total Michael Hill same stores AUD 112,213,219 110,510,341 (1.5%)
Total Michael Hill all stores AUD 118,487,390 117,596,200 (0.8%)

Michael Hill same store figures in local currency
Australia same stores AUD 64,020,558 61,850,462 (3.4%)
New Zealand same stores NZD 26,396,013 24,738,523 (6.3%)
Canada same stores CAD 23,603,565 23,622,738 0.1%

Michael Hill all stores figures in local currency
Australia all stores AUD 67,609,608 65,474,978 (3.2%)
New Zealand all stores NZD 27,153,976 25,508,527 (6.1%)
Canada all stores CAD 25,572,674 26,200,528 2.5%

Exchange rates used for the three months:
New Zealand 1.08 1.04
Canada 0.99 0.95

Revenue for continuing operations from the sale of goods and services for the nine months to 31 March 2019:

The following figures are in Australian dollars Last Year This Year % Var
Total Michael Hill same stores AUD 421,677,972 401,442,598 (4.8%)
Total Michael Hill all stores AUD 441,425,650 427,166,625 (3.2%)

Michael Hill same store figures in local currency
Australia same stores AUD 242,351,741 224,445,676 (7.4%)
New Zealand same stores NZD 94,284,103 88,504,430 (6.1%)
Canada same stores CAD 91,236,299 89,471,316 (1.9%)

Michael Hill all stores figures in local currency
Australia all stores AUD 252,560,799 237,82,131 (6.0%)
New Zealand all stores NZD 96,839,300 91,298,186 (5.7%)
Canada all stores CAD 98,305,114 99,248,507 1.0%

Exchange rates used for the nine months:
New Zealand 1.09 1.07
Canada 0.98 0.95

The above figures for Michael Hill represent 8 months accounting adjusted sales results plus March preliminary sales
figures prior to final accounting adjustments, and are unaudited. Revenue and gross margin figures stated above include
the Professional Care Plan (PCP) revenue and expenses recognised during the period and sales through our store and
online channels. The PCP income recognition pattern is based on existing estimates and is subject to ongoing
management review and adjusted at half year/year end as required. Total group all stores includes sales from our
Michael Hill locations in Australia, New Zealand and Canada and sales from our Emma & Roe locations.

ENDS

Disclaimer
Certain statements in this announcement constitute forward-looking statements. Forward-looking statements are
statements (other than statements of historical fact) relating to future events and the anticipated or planned financial
and operational performance of Michael Hill International Limited and its related bodies corporate (the Company).
The words “targets,” “believes,” “expects,” “aims,” “intends,” “plans,” “seeks,” “will,” “may,” “might,” “anticipates,”
“would,” “could,” “should,” “continues,” “estimates” or similar expressions or the negatives thereof, identify certain
of these forward-looking statements. Other forward-looking statements can be identified in the context in which the
statements are made. Forward-looking statements include, among other things, statements addressing matters such
as the Company’s future results of operations; financial condition; working capital, cash flows and capital
expenditures; and business strategy, plans and objectives for future operations and events, including those relating to
ongoing operational and strategic reviews, expansion into new markets, future product launches, points of sale and
production facilities.

Although the Company believes that the expectations reflected in these forward-looking statements are reasonable,
such forward-looking statements involve known and unknown risks, uncertainties and other important factors that
could cause the Company’s actual results, performance, operations or achievements or industry results, to differ
materially from any future results, performance, operations or achievements expressed or implied by such forward-
looking statements.

Such risks, uncertainties and other important factors include, among others: global and local economic conditions;
changes in market trends and end-consumer preferences; fluctuations in the prices of raw materials, currency
exchange rates, and interest rates; the Company’s plans or objectives for future operations or products, including the
ability to introduce new jewellery and non-jewellery products; the ability to expand in existing and new markets and
risks associated with doing business globally and, in particular, in emerging markets; competition from local, national
and international companies in the markets in which the Company operates; the protection and strengthening of the
Company’s intellectual property rights, including patents and trademarks; the future adequacy of the Company’s
current warehousing, logistics and information technology operations; changes in laws and regulations or any
interpretation thereof, applicable to the Company’s business; increases to the Company’s effective tax rate or other
harm to the Company’s business as a result of governmental review of the Company’s transfer pricing policies,
conflicting taxation claims or changes in tax laws; and other factors referenced to in this presentation.

Should one or more of these risks or uncertainties materialise, or should any underlying assumptions prove to be
incorrect, the Company’s actual financial condition, cash flows or results of operations could differ materially from
that described herein as anticipated, believed, estimated or expected.

The Company does not intend, and do not assume any obligation, to update any forward-looking statements contained
herein, except as may be required by law. All subsequent written and oral forward-looking statements attributable to
us or to persons acting on the Company’s behalf are expressly qualified in their entirety by the cautionary statements
referred to above and contained elsewhere in this announcement.



Investors:
Andrew Lowe
Chief Financial Officer & Company Secretary
+61 7 3114 3505
andrew.lowe@michaelhill.com.au


ABOUT MICHAEL HILL INTERNATIONAL
Michael Hill International was founded by Sir Michael Hill in 1979 when he opened his first jewellery store in Whangarei,
New Zealand. The Group currently has 307 stores globally across Australia, New Zealand and Canada. The Group’s global
headquarters, including its wholesale and manufacturing divisions, are located in Brisbane, Australia. The Company is
listed on the ASX (ASX:MHJ) and the NZX (NZX:MHJ).

For more information:
www.investor.michaelhill.com
www.michaelhill.com.au/
www.emmaandroe.com.au