Trading updated to 30 June 2019

ASX AND NZX ANNOUNCEMENT

MICHAEL HILL BUILDS SALES MOMENTUM IN TOUGH TRADING CONDITIONS

TRADING UPDATE TO 30 JUNE 2019

10 July 2019
KEY POINTS

• Continued sales performance momentum in Q4 – Against prior year, same store sales were flat at +0.1% and
total sales were down by 0.8% for FY19Q4. This final quarter same store sales result of +0.1% demonstrates
sales momentum recovery when compared favourably against prior quarters (Q1 -11.0%; Q2 -2.9%; Q3 -1.5%).

• Cumulative same store sales continue to recover – Fourth quarter performance demonstrates that the
contraction in FY19 sales has stabilised. Cumulative same store sales continued to recover throughout the year
as follows:
• First quarter to 30 September 2018 -11.0%
• Half year to 31 December 2018 -6.0%
• Nine months to 31 March 2019 -4.8%
• Full year to 30 June 2019 -3.5%.

• Active inventory management program – A deliberate focus to reduce inventory against prior year closing
levels, has seen improved working capital and a cleansing of aged / off-range stock with some impact on gross
margin. This has enabled the introduction of “newness” in the retail operating model on a monthly basis.

• Margin compression continues – Gross margin has experienced some compression due to the competitive
retail environment and related clearance activity, ongoing FX headwinds impacting cost of goods, and sector
consolidation, which saw a full year gross margin of 61.1%, compared against 62.8% for the prior year.

• e-commerce sales continue to grow – A full year e-commerce sales result of $16.0m (included in the segment
numbers below) for the year to 30 June 2019 (up 43.6% on FY18) now represents 2.8% of total sales (FY18:
1.9%).

• Branded collection sales increased – Branded collections represented 32.5% of total product sales for FY19,
reflecting the launch of a number of new branded bridal collections in the second half of FY19.

• Decisive store portfolio management – Ten new stores were opened and eleven under-performing stores were
closed along with five Emma & Roe stores during the year, giving a total of 306 stores trading at 30 June 2019
(including the one remaining Emma & Roe store).

Commenting on the result, Michael Hill International CEO Daniel Bracken said:

“Even though we are experiencing an extremely competitive retail environment, particularly in Australia, with intensive
competitor clearance related activities and lower foot traffic, the company has continued to deliver improved sales
momentum for the fourth quarter. To deliver our Q4 sales result, and remain competitive, we did experience margin
compression in the quarter. While we have seen some of our competitors responding with deep discounting and store
closures, Michael Hill is now well positioned as we head into FY20.

“We have actively managed our overall inventory holdings below prior year levels. This deliberate choice to focus on
aged inventory has positioned us well for the introduction of our new integrated customer-led retail operating model,
under-pinned by regular product “newness” in our stores.

“Furthermore, our e-commerce business has continued to grow at a significant rate, with annual sales now more than
double that of our largest physical store. Over the course of FY20, we will continue to invest in this important future
growth channel for the group. In addition, our increased focus on our uniquely differentiated product has lifted the
branded collections sales mix to new heights, with the introduction of a number of new exclusive bridal collections.

“As our strategic initiatives and customer-led retail operating model continue to unfold, and with a full-strength
leadership team now in place, I am excited by the year ahead, and our ability to grow market share.”

Michael Hill International Limited (ASX/NZX: MHJ) intends to release its full year results to 30 June 2019 prior to market
opening on Friday 16 August 2019, at which time a further update will also be provided on the progress of the strategic
initiatives and the customer-led retail operating model.

SEGMENT BREAKDOWN

• The Australian segment finished the year with total same store sales of -5.9%, a recovery from FY19H1 of -
8.8%. Four stores opened during the year, and eight underperforming stores were closed, giving a total of 168
stores trading at 30 June 2019.

• The New Zealand segment saw total same store sales of -4.7% for the year, a recovery from FY19H1 of -6.4%.
Two stores closed and two stores opened during the year, giving a total of 52 stores trading at 30 June 2019.

• Canadian stores delivered total same store sales of -1.6% for the year, a recovery from FY19H1 of -2.7%. Sales
across all stores lifted by +1.5% for the year. One store closed and four stores opened during the year, giving a
total of 86 stores trading at 30 June 2019.

Revenue for continuing operations from the sale of goods and services for FY19Q4:

The following figures are in Australian dollars Last Year This Year % Var
Total same stores AUD 123,067,388 123,204,994 0.1%
Total all stores AUD 133,652,588 132,6 24,208 (0.8%)

Same store figures in local currency
Australia same stores AUD 69,189,408 67,560,468 (2.4%)
New Zealand same stores NZD 27,386,929 27,308,399 (0.3%)
Canada same stores CAD 27,844,845 27,826,389 (0.1%)

All stores figures in local currency
Australia all stores AUD 76,402,877 71,980,086 (5.8%)
New Zealand all stores NZD 28,399,189 28,610,393 0.7%
Canada all stores CAD 30,299,510 31,345,734 3.7%

Exchange rates used for FY19Q4:
New Zealand 1.07 1.05
Canada 0.98 0.93

Revenue for continuing operations from the sale of goods and services for Full Year FY19:

The following figures are in Australian dollars Last Year This Year % Var
Total same stores AUD 542,788,814 523,977,197 (3.5%)
Total all stores AUD 588,755,496 563,403,077 (4.5%)

Same store figures in local currency
Australia same stores AUD 310,277,967 292,075,514 (5.9%)
New Zealand same stores NZD 120,925,625 115,214,647 (4.7%)
Canada same stores CAD 119,072,447 117,131,790 (1.6%)

All stores figures in local currency
Australia all stores AUD 342,640,935 313,110,401 (8.6%)
New Zealand all stores NZD 125,238,489 119,824,610 (4.3%)
Canada all stores CAD 128,534,624 130,447,998 1.5%

Exchange rates used for Full Year FY19:
New Zealand 1.09 1.06
Canada 0.98 0.95

The above figures for Michael Hill represent eleven months accounting adjusted sales results plus June 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: Media:
Andrew Lowe Brendan Altadonna
Chief Financial Officer & Company Secretary GRACosway
+61 7 3114 3505 +61 409 919 891
andrew.lowe@michaelhill.com.au baltadonna@gracosway.com.au

Mark Rudder
GRACosway
+61 411 362 362
mrudder@gracosway.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 306 stores globally across Australia, New Zealand and Canada. The Group’s global
headquarters, in cluding 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