The Warehouse Group – 2020 Annual Result Announcement

Results for announcement to the market
Name of issuer The Warehouse Group Limited
Reporting Period 53 weeks to 2 August 2020
Previous Reporting Period 52 weeks to 28 July 2019
Currency New Zealand dollars
$3,172,830
$3,172,873
$44,441
$44,472
Final Dividend
Record Date Not applicable
Dividend Payment Date Not applicable
Contact phone number
Contact email address
Date of release through MAP
Audited financial statements accompany this announcement.
Revenue from continuing
operations
up 3.3 %
The Warehouse Group Limited
Results for announcement (for Equity and Debt Security issuer)
Amount (000s)Percentage change
Total Revenue up 3.3 %
Net profit/(loss) from
continuing operations
down (34.0)%
Total net profit/(loss) down (32.0)%
Amount per Quoted Equity
Security
Nil (final dividend)
Imputed amount per
Quoted Equity Security
Not applicable
Current periodPrior comparable period
Net tangible assets per
Quoted Equity Security
$0.697 (02 August 2020) $1.033 (28 July 2019)
A brief explanation of any of
the figures above necessary
to enable the figures to be
understood
The investor presentation and media release which accompany this
announcement, provide information and commentary to explain the financial
performance of the Group for the 53 week period ended 2 August 2020.
Jonathan.Oram@thewarehouse.co.nz
15 October 2020
Authority for this announcement
Name of person authorised to
make this announcement
Jonathan Oram (Group Chief Financial Officer)
Contact person for this
announcement
Jonathan Oram (Group Chief Financial Officer)
09 217 7651

---

Helping Kiwis live
better every day
The Warehouse Group
2020 Annual Results
presentation

This presentation may contain forward looking statements
and projections. There can be no certainty of the outcome
and projections involve known and unknown risks,
uncertainties, assumptions and other important factors
that could cause the actual outcomes to be materially
different from the events or results expressed or implied
by such statements and projections.
While all reasonable care has been taken in the
preparation of this presentation, The Warehouse Group
Limited does not make any representation, assurance or
guarantees as to the accuracy or completeness of any
information in this presentation. The forward-looking
statements and projections in this report reflect views held
at the date of this presentation.
Except as required by applicable law or any applicable
Listing Rules, the Relevant Persons disclaim any
obligation or undertaking to update any information in this
presentation.
A number of non-GAAP financial measures are used in
this presentation. You should not consider any of these in
isolation from, or as a substitute for, the information
provided in the audited financial statements, which are
available at www.thewarehousegroup.co.nz.
This presentation does not constitute investment advice,
or an inducement, recommendation or offer to buy or sell
any securities in The Warehouse Group Limited.
2
DISCLAIMER

3
2020 AT A GLANCE4
Joan Withers
CHAIR’S UPDATE6
Joan Withers
GROUP UPDATE10
Nick Grayston
GROUP FINANCIALS18
Jonathan Oram
DIVISIONAL PERFORMANCE26
Jonathan Oram
OUTLOOK32
Joan Withers

4
2.3M
average customer
store visits per week
(5)
$3.2BN
Group Sales
3.3%
(1)
on last year
up
1.FY20 had 53 weeks compared to 52 weeks in FY19. On a 52 week like-for-like basis, FY20 Group Sales saw an increase of 1.5% compared to FY19.
2.Excluding the receipt of the wage subsidy received, the Reported NPAT would have been a loss of $4.3 million.
3.Adjusted Net Profit After Tax (NPAT) is a non-GAAP measure. A reconciliation between Adjusted and Statutory NPAT is located on slide 22.
4.As at 14 October 2020 net cash is approximately $80 million.
5.Excluding weeks impacted by store closures during COVID-19 lockdown periods.
$80.7M
Adjusted NPAT
(3)
9.0%
on last year
up
2020 AT A GLANCE
$168.1M
Net cash
(4)
55.2%
growth in
online sales
11.4%
of Group sales
were online
103.2%
growth in Click
& Collect sales
$44.5M
Reported NPAT
32%
(2)
on last year
down

5
1.25M
online orders placed
during Alert Levels 4-2
Diverted77%of
operational waste from landfills
products have sustainable attributes or
packaging accounting for over
over6,000
$100Mannual sales
Raised$3.9Mfor New Zealand
charities and communities in FY20
105
Stores operated as fulfilment
centres
(1)
circa11,000
Employees received full wages and salaries
7 weeks
2020 AT A GLANCE
1.30 The Warehouse and Warehouse Stationery Stores and 75 Noel Leeming Stores.

CHAIR’S

The impact of COVID-19
•The move to Level 4 on March 26 closed our stores to the public for seven weeks (49 days)
•The year on year impact of this was a loss in sales for the period of the lockdown of $265 million –a 67% decrease
•We employ around 11,000 people at a cost of around $525 million (over half a billion) per annum
(1)
•The Group claimed a $67.8 million COVID-19 wage subsidy. The receipt of the wage subsidy was crucial to the Group
maintaining its workforce through a time when we were closed to customers and faced significant sales uncertainty
•We continued to provide 100% of pay to our employees. On average the wage subsidy equated to around 55% of our
normal wage and salary expense over the period to which the subsidy applied
•On 26 March 2020 when it was evident that the impact of COVID-19 was going to be significant and ongoing, the
Board considered the circumstances of these events and decided it was in the best interest of the Group to cancel the
interim dividend. This was not a decision taken lightly and given the level of uncertainty and the need for preservation
of cash flow, it was a necessary one.
7
UPDATE
1.Circa 11,000 was the number at the time of the wage subsidy but the number can go to 12,000 at peak trading –e.g. golden quarter

Repayment of bond and strong net cash position
•A significant reduction in working capital and COVID-19 related cash conservation measures reduced our debt levels
significantly to a net cash balance of $168.1 million as at year end, compared to a net debt position of $76.2 million at
the end of the 2019 financial year
•However, our cash balance has reduced to around $80 million as working capital returns to more normal levels
•In March 2020, the Group increased its banking facilities by $150 million, extending total banking facilities to $330
million and allowing the Group to repay the NZX listed bond of $125 million on 15 June 2020.
•Despite the strong result of the fourth quarter and strong cash balance at year end, we have seen a significant cash
reduction since year end to approximately $80m as the Group returns towards more normal levels of working capital.
Dividend
•Given the loss prior to the wage subsidies, as well as the continued uncertainty around economic activity and trading
outlook, the Group Directors have decided not to pay a dividend for FY20.
8
UPDATE

Our People
•The Group has been through two significant restructuring processes which were in place well before COVID-19.First
at the Store Support Office with the flip to Agile, and second with our store operating model changes at The
Warehouse. These changes, although difficult for all involved, were necessary for the Group to continue to meet the
needs of customers
•We are extremely focused on the health, safety and wellbeing of all our people –ensuring our team members go home
safely at the end of their work day. Our severity 1 events decreased 38% this year.
•In 2020, we implemented an Employee Net Promotor Score and developed processes to define future career
developments, performance and remuneration
•We are very proud of our diversity and inclusion culture throughout the organisation.We maintained our Rainbow Tick
accreditation and achieved the Accessibility Tick accreditation this year.The representation of females in senior
leadership positions increased from 21 in 2019 to 25 in 2020, and we launched “Lean in circles” to provide leadership
development and peer to peer mentoring for women to work towards gender equality
•Last September, we announced our Retail Wage commitment, entitling employees at The Warehouse with at least a
year's worth of service to receive a pay increase to $21.15 this year.
9
UPDATE

FY2017FY2018FY2019FY2020
FY2021 and
beyond>>>
Phase 1
Phase 2
Phase 3
Phase 4
Phase 5
Phase 6
11
RISE
Systems and processes
Digital future / Customer experience
EDLP
Creation of COEs
TRANSFORMATION
Agile ways of working

We “flipped” to our agile ways of working in August 2020. This will:
•empower our teams to deliver solutions quickly and put our customers right at the heart of everything we do, every day
•enable the business with speed to market, collaboration, innovation and productivity
•ensure a consistent and continuously improving ways of working across all category areas supported and led by the expertise of our
chapter leads
•provide the basis for collaborative and customer-centric design innovation, capability and investment
•make our company the best place to work.
12
OF WORKING

13
VALUES

14
We start everything by focusing on our
customers. We wrap our customer
experiences around three unified
enablers: our people, our platforms,
our data.
ECOSYSTEM

15
+0.1%
(2)
Retail Sales
+25%
Online Sales Growth
+65%
Growth in Mobile Web-based
Sales
8.5%
Retail Operating Profit Margin
(230 basis point improvement)
Flat
(1)
Retail Sales
+50%
Online Sales Growth
5.6%
Retail Operating Profit Margin
(60 basis point improvement)
+60%
Growth in Click & Collect
Fulfilment
+96%
The Warehouse App
Sales Growth
+76%
Growth in Click & Collect
Fulfilment
38%
App Sales % of total
The Warehouse Online Sales
BY BRAND
1.FY20 had 53 weeks compared to 52 weeks in FY19. On a 52 week like-for-like basis, FY20 The Warehouse Sales decreased 1.6% compared to FY19.
2.On a 52 week like-for-like basis, FY20 Warehouse Stationary Sales decreased 1.6% compared to FY19.

16
-7.7%
Retail Operating Profit Margin
(360 basis point decline)
+9.2%
(1)
Retail Sales
+145%
Online Sales Growth
+19%
Growth in Service Sales
+196%
Growth in Mobile Web-based
Sales
+10.7%
(2)
Retail Sales
+72%
Online Sales Growth
(3)
2
Net new stores opened
(4 new stores, 2 closures)
+77%
Growth in Mobile Web-based
Sales
(3)
4.6%
Retail Operating Profit Margin
(50 basis point improvement)
+130%
Growth in Click & Collect
Fulfilment
+127%
Growth in Click & Collect
Fulfilment
(3)
BY BRAND
1.On a 52 week like-for-like basis, FY20 Noel Leeming Sales increased 7.1% compared to FY19.
2.On a 52 week like-for-like basis, FY20 Torpedo7 Sales increased 9.2% compared to FY19.
3.Excludes 1-Day.

Launched 1 August 2019
Now over 2 million products from 3,500 local and
international brands through over 650 merchants
Launch of TheMarket Club in November 2019 –
free shipping for orders over $45
1m+ monthly sessions
Operating loss of TheMarket.com was $14.7m, in
line with our business plan and is expected to
break even in two to four years
17

GROUP

19
For the year ended 2 August 2020
1.Adjusted for unusual and non-operating items as presented on slide 22. Following the adoption of NZ IFRS 16 (refer note 10 of the Financial
Statements for the year ended 2 August 2020) the non-cash impact relating to the new lease accounting standard are treated as a
component of adjusted net profit.
2.Adjusted for the adoption of NZ IFRS 16.
PERFORMANCE
•Retail Sales up 3.3% on last year, driven by strong top-line
growth in Noel Leeming and Torpedo7. When adjusted for
the 53 weeks in FY20 compared to 52 weeks in FY19, Retail
Sales growth was up 1.5%
•Gross Profit was up 0.6% but at a lower margin to LY
reflecting the H2 impact of COVID-19, product sales mix,
increased inventory provisioning and write-off and higher
clearance activity
•Retail CODB was up 0.2% but down by 90 basis points as a
percentage of sales. This includes continued investment in
TheMarket.com eCommerce platform and $67.8m from the
Government Wage Subsidy received during the first COVID-
19 lockdown
•Overall, Retail Operating Profit increased 3.9% and Reported
NPAT reduced 32%. If the wage subsidies received of
$67.8m are excluded, the Group would have made a loss of
$4.3m
•Adjusted operating cash flow increased 63.7%, driven by a
significant reduction in working capital during the period.
$ million
FY20FY19Variance
Retail Sales
3,172.8 3,071.4
3.3%
Retail Gross Profit
1,034.9 1,028.6
0.6%
Gross Margin %32.6%33.5%(90)
Retail CODB
1
918.1 916.2
0.2%
CODB %28.9%29.8%(90)
Retail Operating Profit
1
116.8 112.4
3.9%
Operating Margin %3.7%3.7%-
Continuing NPAT (Reported)
44.4 67.3
-34.0%
Continuing NPAT (Adjusted)
1
80.7 74.1
9.0%
NPAT (Reported)
44.5 65.4
-32.0%
Adjusted Operating Cash Flow
2
324.2198.0
63.7%
Ordinary Dividend (cps)
-17.0
(17.0)

20
For the year ended 2 August 2020
PERFORMANCE
$ millionH2H1
20202019Variance20202019Variance
Retail Sales
1,489.4 1,430.8
4.1%
1,683.4 1,640.5
2.6%
Retail Gross Profit
468.8 495.4
-5.4%
566.1 533.2
6.2%
Gross Margin %31.5%34.6%(310)33.6%32.5%110
Retail CODB
419.9 443.5
-5.3%
498.2 472.7
5.4%
CODB %28.2%31.0%(280)29.6%28.8%80
Retail Operating Profit
48.9 51.9
-5.8%
67.9 60.5
12.3%
Operating Margin %3.3%3.6%(30)4.0%3.7%30
Continuing NPAT (Adjusted)
34.5 34.5
0.1%
46.2 39.6
16.7%
•In the first half, the Group made significant progress in its Retail Gross Profit and Gross Margin. This was particularly inThe Warehouse
with Gross Margin up 160bps and Warehouse Stationery with Gross Margin up 230bps.
•COVID-19’s impact on the second half, though largely neutral in sales, impacted through product mix, clearance activity and the quality
of closing inventory and therefore provisioning.

SALES TREND
21
(100%)
(80%)
(60%)
(40%)
(20%)
0%
20%
40%
60%
80%
W1W2W3W4W5W6W7W8W9
W10W11W12W13W14W15W16W17W18W19W20W21W22W23W24W25W26W27W28W29W30W31W32W33W34W35W36W37W38W39W40W41W42W43W44W45W46W47W48W49W50W51W52W53
Weekly YoY growth
Q1Q2H1Q3Q4H2Total (53 wks)Wk53Total (52 wks)
$m$Var LY$Var LY$Var LY$Var LY$Var LY$Var LY$Var LY$$Var LY
The Warehouse368.92.4%569.90.1%938.81.0%297.2-23.0%470.020.5%767.3-1.1%1,706.00.0%28.31,677.7-1.6%
Warehouse Stationery63.02.1%70.8-0.4%133.80.8%64.5-9.8%70.59.6%135.0-0.6%268.80.1%4.7264.1-1.6%
Noel Leeming225.07.3%287.83.6%512.85.2%193.6-10.9%303.637.8%497.113.6%1,010.09.2%19.3990.77.1%
Torpedo7 Group38.13.0%60.314.0%98.49.5%32.0-18.3%60.639.3%92.612.0%191.010.7%2.6188.49.2%
Total
1
694.8
4.0%
988.6
1.7%
1,683.4
2.6%
586.3
-17.9%
903.1
26.1%
1,489.4
4.1%
3,172.8
3.3%
55.23,117.6
1.5%
Black Friday fell into
the first week of
December in 2019
Group sales down 67%
during period of store
closures ($265m vs LY)
1.Total sales includes sales from TheMarket, Other Group operations and Inter-segment eliminations.

22
For the year ended 2 August 2020
1.Impact of NZ IFRS 16 on the income statement is presented in Note 10 in the Notes to the Financial Statements for the period ended 2 August 2020.
REPORTED RESULTS
Retail Operating ProfitNPAT
$ million
FY20FY19FY20FY19
Adjusted Earnings
116.8 112.4 80.7 74.1
Gain on property disposals
0.1 11.8 0.1 8.5
Restructuring costs -Rise
(22.0)(15.7)(15.8)(11.3)
Restructuring costs -Agile
(22.2)-(16.0)-
Change in fair value of derivatives that are
not hedge effective
(6.4)-(4.6)-
Brand impairment (Torpedo7)
(2.5)(5.5)(1.8)(4.0)
Adjustments for NZ IFRS 16
1
40.9 -(0.1)-
Income tax relating to building
depreciation
2.0
Reported Earnings
104.7 103.0 44.5 67.3
Discontinued
-(1.9)
Reported -Attributable to Shareholders
44.5 65.4
To improve the understanding of underlying business performance, the Group adjusts profit for unusual and non-operating items.
Unusual items include profits from the sale of assets and losses associated with adjustments in carrying value of assets, M&Aactivity
and restructuring costs.
•$22.0m of restructuring costs associated with the
transformation programme (internally known as
“Rise”) for success fees payable to management
consultancy firm based on achievement of
expected outcomes
•$22.2m of restructuring costs associated with the
transition to an Agile ways of working, comprising:
•redundancy costs of $13.7m;
•asset impairment costs from store closures
of $4.4m; and
•consultancy fees of $4.0m
•The adoption of NZ IFRS 16 had an impact on
FY20 Retail Operating Profit of $40.9m, including:
•removal of lease expenses + $137.4m; and
•addition of depreciation on leased assets
-$96.4m
•All interest rate hedges have been closed out with
$6.4m recognised as ineffective
•Torpedo7 brand has been fully impaired.

23
SHEET
As at 2 August 2020
$ million
FY20FY19Variance
Inventory
393.6 517.8
(124.2)
Trade and Other Receivables
84.3 90.7
(6.4)
Trade and Other Payables
(420.8)(352.7)
(68.1)
Provisions
(84.9)(82.0)
(2.9)
Working Capital
(27.8)173.8
(201.6)
Fixed Assets
259.7 271.2
(11.5)
Funds Employed
231.9 445.0
(213.1)
Tax Assets
90.8 37.8
53.0
Derivatives
(26.9)(0.1)
(26.8)
Right of Use Assets
774.2 -
774.2
Goodwill and Brands
73.0 75.5
(2.5)
Capital Employed
1,143.0 558.2
584.8
Shareholders Equity
377.1 481.3
(104.2)
Minority Interests
(0.8)0.7
(1.5)
Net Debt
(168.1)76.2
(244.3)
Lease Liabilities
934.8 -
Sources of Funds
1,143.0 558.2
584.8
Book gearing
67.1%13.6%
53.5bps
Gearing per borrowing covenants
0.0%13.6%
-13.6bps
•Significant reduction in inventory level relative to FY19
reflects the Group’s endeavours to balance expectations of
customer demand and cash preservation during a time of
high uncertainty
•The increase in Trade and Other Payables reflects the timing
of the 53
rd
week in the payment cycle and inventory ordering
post the first lockdown
•NZ IFRS 16 has seen significant changes to the presentation
of the Group’s Balance Sheet. Adjustments include
recognising lease liabilities of $934.8m and the associated
right-of-use assets of $774.2m, as well as a reduction in
retained earnings of $108.5m and an increase in deferred tax
assets
•The Group secured additional banking facilities of $150m,
extending the total debt facilities available to $330m. This
enabled the Group to repay the maturing $125m fixed rate
senior bond
•The Group is of the view that it is prudent to maintain high
levels of liquidity in the current trading and economic
environment
•Since year end, working capital levels have continued to
normalise and net cash is now circa $80m.

24
1. Adjusted for impacts of adopting NZ IFRS 16
FLOW
For the year ended 2 August 2020
$ million
FY20FY19Variance
Trading EBITDA
1
175.0 173.0
2.0
Change in working capital
201.3 77.2
124.1
Taxes Paid
(19.9)(26.5)
6.6
Interest Paid
1
(5.5)(8.7)
3.2
Discontinued EBITDA
-(3.1)
3.1
Restructuring costs
(39.8)(15.7)
(24.1)
Other items
13.1 1.8
11.3
Adjusted Operating Cash Flow
1
324.2 198.0
126.2
Capital Expenditure
(64.5)(61.3)
(3.2)
Divestments -PPE
12.0 3.7
8.3
Dividends Paid
(27.9)(52.3)
24.4
Other
0.4 (1.9)
2.3
Net Cash Flow
244.2 142.1
102.1
Opening Net Debt
(76.2)(218.3)
142.1
Closing Net Debt
168.1 (76.2)
244.3
•For consistency between periods, FY20 adjusted
operating cash flows are reduced by the principal
element of right-of-use lease payments ($47.1m), which
are classified as financing rather than operating cash
flows in the reported cash flow per NZ IFRS 16
•Operating cash flow was up $126.2m on prior year
driven by significant decline in working capital
•Restructuring costs relate to consultation fees for
services related to the transformation programme and
Agile ways of working, as well as redundancies
•$12.0m of cash flow from divestments reflects the
deferred consideration from the sale of land adjacent to
the Auckland Support Office received in FY20
•The reduced amount of dividends paid reflects the
cancellation of the interim dividend due to the uncertainty
around the impact of COVID-19
•The Group ended FY20 with net cash of $168.1m,
compared with net debt of $76.2m in FY19 and net debt
of $68.6m at the half year.

25
33%
Stores,
Distribution Centres &
other property
51%
Information
Systems and Digital
Initiatives
16%
Logistics
FY20
Capex Spend
$63.1M
CAPEX SPEND
•At the FY20 interim result, the Group guided to capital
expenditure for FY20 in the range of $70m -$90m
•FY20 capex of $63.1m was below this guidance as the
decision was made during the Alert Level 4 to defer all non-
essential capital expenditure
•The Group continues to invest in platform and system
enhancements, such as re-platforming brand eCommerce
sites onto a Group platform, continued investment in a
Warehouse Management System and development of a
Group loyalty platform
•Expenditure on stores included the opening of The
Warehouse, Warehouse Stationery and Noel Leeming
stores at Lunn Ave, Noel Leeming and Torpedo7 stores at
Northlink(Christchurch) and Torpedo7 stores in Tauranga,
Rotorua and Westfield Newmarket (Auckland)
•Going forward we expect capex to return to the previously
issued guidance of between $100m and $120m per annum.

$191.0m
6.0%
Torpedo7
Group
27
$1,706.0m
53.8%
The
Warehouse
$1,010.0m
31.8%
Noel
Leeming
$268.8m
8.5%
Warehouse
Stationery
$96.3m
The
Warehouse
$46.0m
Noel
Leeming
$22.8m
Warehouse
Stationery
($14.7m)
Torpedo7
Group
-$33.6m
Other*
$116.8m
Total Group
*Includes TheMarket and Other Group operations and eliminations.
-$3.0m
-0.1%
Other*
FY20 Retail Sales
$3,172.8M
SUMMARY
FY20 Retail Operating Profit

For the period ended 2 August 2020
28
•Retail Operating Profit of $96.3m was up 13.2% relative to FY19. Whilst H1
saw Retail Operating Profit grow 28.4% off the back of a strong lift in Gross
Margin %, H2 was down 7.4%, primarily due to the impacts of COVID-19
•This impact was driven by The Warehouse (as well as the other Group
brands) being unable to trade during the first part of the COVID-19 Alert Level
4 Lockdown and then in a limited capacity for essential items online only. This
was expanded to include all items, via online and contactless Click & Collect
during the first Alert Level 3 Lockdown
•Retail Sales for the year were flat to FY19, with H2 down 1.2%, with Sales
over the seven full weeks of Lockdown at Alert Levels 3 and 4 being down
78.5%, before returning to growth of 26.2% in the 11.5 weeks thereafter
•Online sales finished the year up 50%, with H2 up 126% driven by a strong
surge in demand during the COVID-19 Lockdown.
•Gross Margin % was down 70bps for the year driven by write-offs associated
with the store closures during the Alert Level 4 Lockdown, covering Groceries,
Green Gardening and Easter Confectionery and a targeted programme of
clearance activity in Q4, to reduce aged stock
•Operating Profit grew despite the Gross Margin decline due to a 4.0% decline
in CODB which includes the Government Wage Subsidy received during the
first COVID-19 Lockdown
•We closed one store during the year and announced three further closures,
which will occur progressively over FY21.
$million20202019Variance
Retail Sales
1,706.0 1,705.7
0.0%
Same Store Sales10.4%-3.0%1,340 bps
Retail Gross Profit
646.9 658.4
-1.7%
Gross Margin %37.9%38.6%(70) Bps
Retail CODB
550.6 573.3
-4.0%
CODB %32.3%33.6%(130) bps
Retail Operating Profit
96.3 85.1
13.2%
Operating Margin %5.6%5.0%60 bps
Stores
92 93
(1)

For the period ended 2 August 2020
29
* Includes 17 store-within-a-store integrations. 7 integrations implemented in FY20.
•Warehouse Stationery recorded a small lift in Sales and was able to grow its
Gross Margin % 50bps year on year, despite being unable to trade at all
during the first part of the COVID-19 Alert Level 4 Lockdown
•Retail Sales for H2 were down 0.6%, with Sales over the seven full weeks of
Lockdown at Alert Levels 3 and 4, down 74.0%. However, we returned to
positive growth of 13.7% in the 11.5 weeks following
•The Furniture category, which was a beneficiary of the requirement for Kiwis to
work and study from home during and post Lockdown, was the strongest
performing of our categories
•Online sales for the year finished 25% up on LY, driven by a strong surge in
demand during the COVID-19 Lockdown.
•Gross Margin % grew 50bps for the year despite significant clearance activity
in Q4, which was aimed at clearing a build-up in aged stock
•The Retail Operating Profit includes the Government Wage Subsidy received
as a result of the first COVID-19 Lockdown
•The Store-Within-A-Store (SWAS) programme continued, with a further 7
integrations in FY20, bringing the total integrations to 17.
$million20202019Variance
Retail Sales
268.8 268.6
0.1%
Same Store Sales Growth
7.1%-6.0%1,310 bps
Retail Gross Profit
114.4 112.8
1.4%
Gross Margin %
42.5%42.0%50 bps
Retail CODB
91.6 96.1
-4.7%
CODB %
34.0%35.8%(180) bps
Retail Operating Profit
22.8 16.7
36.6%
Operating Margin %
8.5%6.2%230 bps
Stores
71*70*
1

For the period ended 2 August 2020
30
•Noel Leeming had a record profit year in FY20 despite the impact of the
COVID-19. Performance was driven by an acceleration in online as the
business provided customers with the products and services they required to
enable them to work and learn remotely as well as essential home appliances
for food storage and preparation
•Sales hit a milestone of $1b this financial year reflecting our biggest market
share year ever and an increase of 9.2% on LY sales
•Same Store Sales Growth of 17.2% was driven from a significant increase in
online sales of 145%, with strong acceleration inQ4 during COVID-19 and
resulting store closures
•Gross Profit Margin % at 21.9% was 80 bps lower reflecting sales mix due to
higher sales in low margin technology products, particularly in Q4
•Top performing categories with double digit sales growth on LY included
Computers, Computer Accessories, Audio Visual,Imaging and Small
Appliances all driven by consumer demand relating to learning and working
from home. The Services Division also delivered pleasing results in FY20 with
Protection seeing revenue growth of over 19%
•In FY20, we opened two new stores in Lunn Ave, Auckland and Northlink,
Christchurch and relocated our Newmarket, Auckland and Hawera stores.In
addition, we undertook a store network review and as a result 5 stores were
closed including Takapuna, St Lukesand Henderson Clearance Centre in
Auckland, and The Palms and Papanui in Christchurch
•Operating Profit increased by 20.8% to $46.0m with Operating Profit Margin
increasing by 50 bps to 4.6%.
$million20202019Variance
Retail Sales
1,010.0 924.6
9.2%
Same Store Sales Growth
17.2%5.7%1,150 bps
Retail Gross Profit
221.1 210.3
5.2%
Gross Margin %
21.9%22.7%(80) bps
Retail CODB
175.1 172.2
1.7%
CODB %
17.3%18.6%(130) bps
Retail Operating Profit
46.0 38.1
20.8%
Operating Margin %
4.6%4.1%50 bps
Stores
74 77
(3)

For the period ended 2 August 2020
31
•Torpedo7 Group is made up of Torpedo7 (T7) and 1-day businesses
•Group sales were $191m, an increase of 10.7% on FY19 with strong same
store sales growth of 10.4%, influenced by accelerated online sales,
particularly in Q4
•Gross Profit dollars increased by 1% and included additional one-off stock
provisions of $5.3m
•T7 went through some significant change in FY20 with a new CEO, store
network expansion and increased operational and store network investment to
support future profitability
•T7 experienced strong sales in Bike and Fitness categories particularly in Q4
as demand accelerated for these categories during the COVID-19 period as
customers looked for exercise alternatives
•Higher operating costs were driven by the store expansion programme and
investment in a number of key areas to support future growth and profitability
as well as one-off costs of $2.6m in relation to asset write-downs
•Excluding asset impairments, inventory provisioning and write-offs, the
standalone performance of Torpedo7 would have improved in FY20 versus
FY19
•During the year, four new T7 stores were opened in Tauranga, Rotorua,
Northlink(Christchurch) and Westfield Newmarket, offset by two store
closures which were the T7 K-Road store and No1 Fitness in Christchurch
•1-day sales are down on last year following a challenging first half. The online
retailer performed well during the COVID-19 lockdown period and is focused
on streamlining fulfilment to deliver cost savings and an improved customer
experience.
$million20202019Variance
Retail Sales
191.0 172.5
10.7%
Same Store Sales Growth
10.4%1.3%910 bps
Retail Gross Profit
40.2 39.8
1.0%
Gross Margin %
21.0%23.1%(210) bps
Retail CODB
54.9 46.8
17.4%
CODB %
28.7%27.2%150 bps
Retail Operating Profit
(14.7)(7.0)
109.8%
Operating Margin %
-7.7%-4.1%(360) bps
Stores
20 18
2

33
OUTLOOK
•For the first 9 weeks of FY21, we have seen sales increase about 6% on the same period in FY20, inclusive of the
Auckland lockdown. There has been a gradual reduction in the elevation of sales since the end of the first lockdown,
as pent up demand and the impact of wage subsidy and mortgage holidays subside. There appears to be some
benefit to retail spending due to the reduction of alternative spending options, in particular the ability to travel. How
long these remain is uncertain
•The outlook for FY21 played a part in the decision to not pay a final dividend. We remain cautious about economic
activity and the trading outlook and the critical Q2 trading period (including Black Friday, Christmas and Boxing day)
will be more important than ever, as we see a greater risk in the H2 relative to H1
•With the benefit of a strong balance sheet and Agile ways of working, we will continue to invest in our transformation,
with a focus on our core systems, digital platforms and store footprint –in particular the SWAS programme. As we
stated at the end FY19, we expect to have several years of capital expenditure in the range of $100m -$120m.
•We expect further costs in relation to embedding our Agile ways of working of around $8m in FY21
•TheMarket.com will be in the second year of its business plan and we expect an operating loss of $12m -$14m as this
business continues to scale its platform. Torpedo7 is also in its second year of a turnaround plan and we expect the
business to be profit contributing in FY21
•Depending on trading, the Group hopes to return to paying dividends in line with its Dividend Policy in FY21
•As has been the case in previous years, the Group will consider giving guidance for its full year FY21
result at end of the first half of the year.

---

__________________________________________________________________________________

To: Market Information Services Section
NZX Limited
_________________________________________________________________________________

Thursday 15 October 2020

The Warehouse Group FY20 annual result announcement

Key Points
• Group sales were $3.2bn, up 3.3% compared to FY19 and up 1.5% on a 52-week basis
• Reported Net Profit After Tax attributable to shareholders $44.5m, down 32% on last year
• Reported profit less government wage subsidy showed a $4.3m loss
• Group online sales up 55.2%
• For period of lockdown $265m (67%) sales reduction on same time last year
• Adjusted Net Profit After Tax of $80.7m, up 9.0% on last year
• No dividend to be paid for FY20


The Warehouse Group (“the Group”) today announced its audited result for the full year ended 2
August 2020.
As announced in the preliminary unaudited release on 8 October, the Group delivered sales of $3.2
billion, up 3.3% on FY19 or 1.5% when adjusting for FY20 being a 53-week year, compared to 52
weeks in FY19. Group sales in the second half of FY20 were $1.5 billion, up 4.1% on FY19 but flat
when adjusting for FY20 being a 53-week year.
The Group full year Reported NPAT was $44.5 million, down 32% on FY19. The Group Reported NPAT
includes $67.8 million received in wage subsidies. If Reported NPAT is adjusted to exclude the wage
subsidy, the Group would have made a loss of $4.3 million.
The Group Chair Joan Withers said, “The 2020 financial year posed challenges and complexity that we
could never have anticipated, pressure testing our strategy and ability to comprehend changes,
harness and deploy resources and execute successfully in a dynamic and volatile environment.”
The Group’s Adjusted Net Profit After Tax (NPAT) was $80.7m for the 2020 financial year, up 9.0% on
last year, after excluding restructuring costs and other unusual items which totalled $36.3m.
Gross Profit was up 0.6% overall with a second half Gross Profit decline of 5.4% largely offsetting the
6.2% gain in the first half. The lower H2 margin was impacted by COVID-related impacts to product
mix, clearance activity and quality of closing inventory and therefore provisioning. Gross margin for
the year was 32.6% vs 33.5% last year.

Ms Withers said the year-end results are testament to the underlying strength of our brands and their
improved operating performance after several years of transformation initiatives which were
designed to see the business address strong competition including the increased impact of overseas
online competitors.

She acknowledged the impacts of COVID-19, with sales reducing by 67% ($265m) on the same period
last year for the period between 26 March and 13 May when the country was in alert level 4 and 3.
However, by the fourth quarter sales increased by 26% on the same period last year (18% on a 13
week basis) as a result of pent up demand.

“It is heartening that the Group was able to deliver this result during a year in which our stores doors
were closed for seven weeks during New Zealand’s initial lockdown in response to COVID-19.”

Group Chief Executive Nick Grayston said “We are very proud of the resilience that our people
demonstrated in coping with uncertain and unpredictable circumstances as a result of COVID-19,
particularly our fulfilment teams who were dealing with a surge in online demand and new ways of
working to take into account distancing and safety needs.

“Online sales grew 55.2% during the year, now representing 11.4% of Group sales. Click & Collect
sales increased by 103.2%.

“We have seen customer shopping behaviour change as a result of COVID-19 and we expect some
trends, such as increased online shopping, to continue. During the COVID-19 first lockdown, 48% of
our customers surveyed said that 2020 was the first time they had shopped online with us,” said Mr
Grayston.

Mr Grayston said that the 2020 financial year was always planned to be a time of change for the
business, as it adopted a new way of working (Agile) in its head office and updated legacy rosters and
The Warehouse store operating model, more accurately to reflect changing customer shopping
habits.

“Part of the reason we were able to adapt quickly to meet customer needs was due to the pre-work
already in place as part of our move to Agile ways of working involving cross-functional teams which
were empowered to make decisions resulting in a faster speed to market, increased customer
centricity, higher performance, at the same time making The Warehouse Group a great place to
work,” said Mr Grayston.

Cost of Doing Business (CODB) grew at a lesser rate of 0.2% relative to Gross Profit, resulting in
Operating Profit growth of 3.9%. CODB includes the government wage subsidy which was applied for
on the basis of the Government criteria of a 30% revenue reduction in the month of April.

Mr Grayston said “this covered 55% of the Group’s wage bill during the period, while the remaining
portion of salaries and wages were paid by the Group, ensuring that all employees at the time were
paid 100% of their normal salary and wages, as opposed to the scheme-required 80%”.

Given the loss prior to adjusting for the wage subsidy, as well as the continued uncertainty around
economic activity and trading outlook, Group Directors have decided not to pay a dividend for FY20.
Subject to trading over the critical Q2 period and any further alert level restrictions and adverse
economic impacts of COVID-19, the Group hopes to return to paying dividends in line with its
Dividend Policy for FY21.

The Group ended the 2020 financial year with a net cash position of $168.1 million, as a result of
strong working capital management and robust trading conditions following the first seven-week
COVID-19 lockdown period. As the Group returns towards a more normal level of working capital, the
net cash balance has reduced to approximately $80 million. During the year the Group secured

additional banking facilities of $150m, extending the total debt facilities available to $330m. This
enabled the Group to repay the maturing $125m fixed rate senior bond.

More information about The Warehouse Group’s result, financial performance by brand, strategy,
transformation programme and operations can be found in the 2020 Annual Report, available at
www.thewarehousegroup.co.nz.

ENDS
Contact details regarding this announcement:

Investors and Analysts: Jonathan Oram, Chief Financial Officer
+64 21 757 415
jonathan.oram@thewarehouse.co.nz

Media: Nick Grayston, Group Chief Executive Officer
To be contacted via Jordan Schuler, +64211436930
media.enquiries@thewarehouse.co.nz

---

The Warehouse Group

Integrated Annual Report 2020
Helping Kiwis live
better every day

2
The Warehouse Group
4-5
2020 At a Glance
22-24
Our Board
19-21
Our Ecosystem
25
Board Skills Matrix
26-31
Our Brands
10
Sir Stephen Tindall
11
Keith Smith
6-9
Chair’s Report
12-15
CEO’s Report
16
Our Purpose
17
Our Vision
18
Our Shared Values
CONTENTS
DRAFT DRAFT

3
Integrated Annual Report 2020
32-33
Integrated Report
44-45
Our Environment
46-47
Financial Capital
49-53
Financial Statements
72-75
Independent Auditor’s Report
54-71
Notes to Financial Statements
76-77
Annual 5 Year Summary
-
Governance Report
85-90
Statutory Disclosures
91
Directory
36-37
Our Networks
34
Risk & Materiality
38-39
Our People
-1
Our Expertise
42-43
Our Relationships
DRAFT

4
The Warehouse Group
At a glance
of total
Group sales
Online sales
made up
11.4%
1
2020 AT
A GLANCE
$168 .1M
55.2%
Group sales
Reported
N PAT
Adjusted
N PAT
up 9.0% on
last year
3
at year-end
Net cash
2.3M
$3.2B
$44.5M
$80.7M
customer
store visits
per week
4
103.2%
+
96%
growth in Click
& Collect sales
growth in
online sales
up 3.3% on last year
1
down 32% on last year
2
growth in
The Warehouse
app sales
DRAFT DRAFT

5
Integrated Annual Report 2020
Over
products have sustainability attributes or packaging
accounting for over $100 million annual sales
105
11,000
$265M
over
fundraised for New Zealand
charities and communities in
FY20
Employees received full
wages and salaries
67% decrease
in sales
6,000
Loss in sales during
the first lockdown
$3.9M
1.25M
online orders placed during
alert levels 4-2
circa
stores operated
as fulfilment
centres
5
77%
we have diverted
of operational
waste from
landfills
7 WEEKS
STORES

CLOSED
1. FY20 had 53 weeks compared to 52 weeks in FY19. On a 52 week like-for-like basis, FY20 Group Sales saw an increase of 1.5% compared to FY19.
2 Excluding the receipt of the wage subsidy received, the Reported NPAT would have been a loss of $4.3 million.
3. Adjusted NPAT is a non-GAAP measure. A reconciliation between Adjusted and Statutory NPAT is located in note 5 of the financial statements (page 59)
4. Excluding weeks impacted by store closures during COVID-19 lockdown periods.
5. 30 The Warehouse and Warehouse Stationery stores and 75 Noel Leeming stores
DRAFT

6
The Warehouse Group
Protecting our future in uncertain times
During a period of uncertainty that has tested
New Zealanders’ courage and determination,
The Warehouse Group demonstrated its
resilience by holding true to its course.
The financial year just completed posed challenges
and complexity we could never have anticipated,
testing our ability to comprehend changes, harness
and deploy resources, and execute successfully in
a dynamic and volatile environment.
I want to start my report to shareholders this year
by paying tribute to the exemplary leadership
demonstrated by Group Chief Executive Nick
Grayston and his executive team, all our leaders
across the business and our team members
around the country who have continued, in this
extraordinary year, to ensure we serve our customers
and help Kiwis live better every day.
The Group’s FY20 results provide evidence of the
gains to be achieved by putting our customers
at the centre of everything we do. We have not
deviated from our strategy. Despite unprecedented
disruption we have been able to build value for
our customers, remain flexible in an unpredictable
trading environment and weather the immediate
effects of COVID-19 in a way that would not have
been possible a few years ago.
We are saying goodbye to old ways of doing things and pushing forward with transforming the way
we work. We continue to apply a laser focus to fixing our retail fundamentals and are embracing
opportunities to build a digital future – and we are intensifying these efforts.
We are now on the cusp of the next stage in our evolution: becoming a business that is Agile, with
the discipline, insights and confidence to adapt, focus and deliver even in times of global upheaval
and economic contraction.
While we have been laying the foundations for this move for a long time, the value of the Group’s
transformation has been put to the test in ways no one could have contemplated in the year
under review.
The results
Our adjusted Net Profit After Tax (NPAT) result of $80.7m was a 9.0% increase on last year, with
our reported NPAT being $44.5m. Adjusted NPAT excludes $36.3m in unusual items. This result is a
testament to the underlying strength of our brands and operating performance. It is remarkable that
the Group was able to deliver this result during a year in which our stores’ doors were shuttered for
seven weeks during New Zealand’s initial lockdown in response to COVID-19.
Our Group retail sales over the course of FY20 provide a snapshot of the disruption inflicted by the
global pandemic. We saw good momentum in the first half. We were on track and confident that our
transformation efforts were delivering measurable and sustainable gains.
Our confidence was tested in the second half with the impact of COVID-19 lockdown trading
restrictions which required an initial period of complete closure, followed by a gradual increase in
online sales activity and the eventual reopening of all our stores on 14 May. This disruption had a
significant impact on business performance in the third quarter: retail sales were down $128m or 17.9%.
CHAIR'S REPORT
Chair’s Report
"We are now on the
cusp of the next
stage in our evolution:
becoming a business
that is Agile, with the
discipline, insights
and confidence to
adapt, focus and
deliver even in times
of global upheaval and
economic contraction."
Joan Withers
Chair, The Warehouse Group
DRAFT DRAFT

7
Integrated Annual Report 2020
CHAIR'S REPORT
Consumers returned to our stores in force in the final quarter, lifting total retail sales for the year
to $3.2b.
Reported net profit attributable to shareholders for the year was $44.5m - this compares to $65.4m
last year.
On 26 March 2020, the Board considered the circumstances and uncertainty around the impact
of COVID-19, and decided that it was in the best interest of the company to cancel the previously
declared interim dividend for FY20 of 10 cents, which was due to have been paid on 17 April 2020.
Similarly, the Board determined not to pay a final dividend given the continued uncertainty around
economic activity and our trading outlook.
Staying the same is not an option in retail. For more than three years, we have been dedicated to
transforming our business so we can become New Zealand’s most sustainable, convenient and
customer-first company. An enormous amount of work has gone into that, and it has translated
into a credible financial performance during a time of huge challenges and complexity. We are
committed to leveraging the investment and organisational change we have made to ensure we are
here for the next 100 years.
One important outcome of fixing our retail fundamentals has been our strengthened ability to capture,
manage and utilise data. We are uniquely placed given the breadth and depth of our operations across
the country. The insights the data provides are invaluable and innumerable.
DRAFT

8
The Warehouse Group
We are now accessing customer insights that enable us
to pinpoint shifting patterns of shopping behaviour so the
business can respond with precision: decisions are well-
informed, taken quickly and implemented at pace.
We can also more accurately and speedily track initiatives
we implement and the Board and Executive have clear line
of sight and maintain scrutiny to ensure investments are
adding value.
COVID-19
The scale of the challenges presented by the arrival of
COVID-19 in New Zealand cannot be overstated.
Our people at every level in the business had to rapidly adjust
and do things differently. We were already well down the path
of change. COVID-19 has not altered our direction, but it has
accelerated the pace at which we travelled. Despite all the
disruption, we have flipped to our new Agile way of working
only one month later than originally planned. This has been
a remarkable feat in the circumstances which demonstrates
the increasingly important ability to pivot quickly to
changing circumstances.
One of our early actions was to ensure our people continued
to receive their pay during lockdown. The Group was granted
the initial Government
Wage Subsidy and claimed
a total of $67.8m (after
tax the total received
was $48.8m). The subsidy
was crucial to the Group
maintaining its workforce
through a time when we
were closed to customers
and faced significant sales
uncertainty. This subsidy
was paid in full to our team
members who received
100% of their pay during
this period. On average the
wage subsidy equated to
around 55% of our normal
wage and salary expense
over the period to which the
subsidy applied.
As the nation prepared
to enter alert level 4, the
Government focused first
and foremost on securing
the nation’s health and
we completely supported
that approach. We were,
however, disappointed that the Group had to close its stores
during alert levels 4 and 3. Senior officials and politicians
engaged with the Group and we were receiving advice
from them as New Zealand moved through the COVID-19
alert levels.
We hope we are through the worst of the pandemic in New
Zealand. However, events in August showed that even with
strict controls at our border, the virus can penetrate and spread
in our communities. It is clear that the economic implications
will reverberate here for years to come. All businesses need to
Chair’s Report
react to the new and evolving reality and we are committed
to weathering this storm and ensuring we can serve our
customers through the channels that work for them.
What changed most potently during the COVID-19 crisis was
the rapid escalation in online shopping.
After that initial period of complete closure, our brands moved
to providing online sales of essential items during alert level 4
and then a full online range of products during alert level 3 for
delivery or contactless Click & Collect.
Online sales ballooned and by the end of FY20 had increased
by 55.2% on the prior year, representing 11.4% of total retail
sales for the year.
COVID-19 has changed the way people work, engage socially
and shop. We must continue to pay attention to what this
means for our business.
We will keep adapting our business to meet the needs of this
new normal for our customers. That means prioritising our
resources to deliver in a retail environment that will continue
to present challenges, as well as opportunities.
The successful launch of TheMarket.com in August 2019 is a
case in point. It now offers over 2 million products and across
more than 3500 brands and while
it is still early days, its performance
gives us confidence in the long-
term value of this investment in the
digital future.
The Board is delighted with the
progress and the efforts of the
team to launch and operate what
is effectively a start-up during a
period of such profound upheaval.
It has also been a year in which
we have had to acknowledge that
our systems and processes have
sometimes let us down. During the
run-up to Christmas, our Warehouse
Management System (WMS) did not
perform to expectations, and that
caused frustration for our customers.
The performance glitches were
regrettable and showed that
we had yet to complete fixing
our retail fundamentals. The
executive leadership team took
full responsibility for getting WMS
back on track. Subsequently, the
enhanced performance and metrics
meant the business was in much better shape to respond to
and manage the tsunami of online orders during the COVID-19
lockdown through to early June.
There remains further work to do, but we are heading in the
right direction.
Honouring our commitments
When we published our first Integrated Report last year, we
described how we deploy our resources and manage our
networks, expertise, relationships, environment and financial
capital to create long-term sustainable value.
"While we are
currently in a
solid position, by
making changes
now in the way we
organise ourselves
and assist our
customers, we will
protect our future
in very challenging
times."
Joan Withers
Chair, The Warehouse Group
DRAFT DRAFT

9
Integrated Annual Report 2020
That commitment has not wavered, despite the challenges
we faced during the second half because of COVID-19.
Initiatives include improving accessibility for people with
disabilities, providing private-label period products for $1,
partnering with IBM and schools to lift the digital skills of our
future workforce through the P-TECH initiative, and increasing
the range of products across our brands that have sustainable
attributes – to name but a few. Further detail can be found on
pages 42 and 43.
Capital management
Cancelling the interim dividend after it had been declared was
a very unusual measure for any Board to take in New Zealand.
However, it was the prudent course of action. Similarly our
determination to not pay a final dividend was made after
careful consideration of all the information available to us.
The ongoing transformation efforts and balance sheet initiatives
during FY20 have reduced our debt levels significantly.
The Board is rigorous in its evaluation of the Group’s capital
structure. We work hard to ensure we are making appropriate
investment in value-enhancing initiatives and we are also
highly cognisant of our responsibility to our shareholders.
In March the Group increased its banking facilities by $150m,
extending total banking facilities to $330m – allowing for
the redemption of the Group’s NZX listed bond of $125m
on 15 June.
As at year-end, the Group is in a strong financial position
with a cash balance of $168m, and therefore access to funds
of $498m.
Board activity
Two of our long-standing Directors due to retire by rotation
have confirmed that they will not seek re-election and will
step down at the Group’s Annual Shareholders’ Meeting
in November.
The Warehouse Founder Sir Stephen Tindall and Deputy Chair
and Chair of the Audit and Risk Committee Keith Smith have
served as Directors since 1982 and 1988 respectively.
The Board has been fortunate in having Sir Stephen and Keith
contribute their significant experience and wisdom to the
governance of the business during a period of ongoing change,
increasing competition and major technological developments.
We have specific aknowledgement of Sir Stephen and
Keith’s service to The Warehouse board on pages 10 and 11.
However, I would like to add my personal gratitude to them
both for the enormous support and guidance they have
given me over the years.
The Board welcomed non-executive Director Dean Hamilton
to his first meeting in May 2020. Dean has significant CEO and
financial markets experience and is a valuable addition to the
Board. He will, if elected at the Annual Shareholders’ Meeting,
become the Chair of the Audit and Risk Committee following
Keith’s retirement.
Robbie Tindall has been nominated as a Director of the Group
and will also stand for election at the Annual Shareholders’
Meeting. Robbie was appointed as Sir Stephen’s alternate
in July 2011 and has represented him since Sir Stephen took
leave of absence from the Board in October 2017.
A special call out to Julia Raue who chairs our Health, Safety
and Wellbeing Committee. The work this year, in tandem with
our Health and Safety team in the business, was of particular
importance under the shadow of COVID-19.
During her first year in our Future Director programme,
Renee Mateparae has made an excellent contribution. The
knowledge Renee gained in her leadership role at Spark during
the organisation’s transition to Agile ways of working has been
of particular value.
We have undertaken an independently facilitated,
comprehensive Board performance review, canvassing
Board behaviours and culture as well as individual directorial
performance. Senior executives who interact with the Board
provided input.
The review culminated with a facilitated workshop to share the
findings and most importantly to commit to the actions we will
take as a result of those.
The review should give shareholders confidence that the
Board is committed to the highest standards of corporate
governance. It also provides a focused opportunity to look
at our skills mix and succession planning.
Looking ahead
The business’ own insights show that in the wake of the first
COVID-19 lockdown, six out of seven consumers are now
looking to save money with 64% of customers consciously
cutting their spending.
We anticipate significantly reduced retail demand as the full
economic impact of COVID-19 is felt by consumers over the
course of FY21.
In June 2020 the Group confirmed it would accelerate some
of the changes already planned – including some store
closures and operational changes – due to the uncertainty
associated with COVID-19.
While we are currently in a solid position, by making changes
now in the way we organise ourselves and assist our customers,
we will protect our future in very challenging times.
As I said in my introduction, the contribution of Nick Grayston
and his executive leadership team has been outstanding. My
thanks on behalf of the Board to all those who have worked so
hard during a year beset by the impacts of a pandemic that
has touched every corner of our planet.
My sincere thanks, too, to the Board, which has gone above
and beyond, engaging in frequent virtual meetings and
discussions during the height of COVID-19 alert levels and
providing unfailing support for the Group throughout the
financial year.
To our shareholders, I want to offer our thanks for their
continued support during a year when they had to manage
the impacts on their personal and professional lives
of immense change. The Board is confident the investment
we have made in the last three years to position the Group
will provide sustainable competitive advantage and long-term
shareholder value.
Joan Withers – Chair
DRAFT

10
The Warehouse Group
New Zealand’s retail landscape changed profoundly when
Sir Stephen Tindall opened the first The Warehouse store
in Takapuna in 1982. Reflecting the business’ early mission
statement – “Where people come first and quality is affordable” –
products we now regard as necessities became available to New
Zealanders at affordable prices.
For the first 2 or 3 years he traded out of a small warehouse-
style building in Takapuna.
It was not long before the business expanded. In 1985 The
Warehouse Limited started a new venture in Christchurch on
a 50/50 joint venture partnership basis with H&J Smith Ltd,
also trading under the the name 'The Warehouse' and the basis
for the establishment of regional operations throughout New
Zealand began with other joint venture partners.
Following the opening of the first purpose built hyperstore in
Manukau in May 1992, it became clear that the business had
outgrown the regional JV structure. In April 1993 The Warehouse
Limited became one company to improve efficiency and
coordination. When the company listed in November 1994, it was
the only general merchandise retailer on the New Zealand Stock
Exchange, with 53 stores across 38 cities and towns nationwide
and was already one of New Zealand’s leading retail companies.
Further innovation followed closely after listing including the
implementation of a new computer
system, TUI (Technology Used
Intelligently) in 1995, still in use within
the company, and in 1996 the additions
of distribution centres in both the North
and later in the South Islands equipped
with the latest fully automated
conveyor technology to streamline
stock distribution processes. The Store
Support Office in Northcote was also
completed and opened in 1996, as well
as a The Warehouse internet page created in December 1996,
giving The Warehouse a presence on the worldwide web.
Sir Stephen frequently credits his parents’ work ethic as a force
that has motivated his business achievements. He has also been
inspired by the entrepreneurs Warren Buffett and Microsoft
founder Bill Gates for their philanthropy.
In 1994 Sir Stephen and his wife Lady Margaret Tindall
established The Tindall Foundation, one of New Zealand’s
leading philanthropic foundations that has since donated more
than $184 million to support Kiwi families, communities and the
environment. The Foundation is committed to making a positive
difference in Aotearoa, New Zealand by supporting initiatives
that develop long-term social change and use innovation to
deliver social impact.
Throughout The Warehouse Group’s ongoing expansion, the
business has stayed true to Sir Stephen’s founding principle of
putting the customer first. His insight, advice and counsel have been
and will continue to be important to the business’ executive team.
New Zealand’s wider business community also gains the benefits of
Sir Stephen’s knowledge and generosity. In 1999 he founded K1W1,
a family investment company, which has invested over $250m
into more than 150 start-up and early stage businesses in biotech,
software, clean tech, high tech, and environmental technologies.
He has sponsored Team New Zealand in contesting the America’s
Cup and as Chair of Team New Zealand was involved in winning
the Cup in Bermuda and is now busy helping to prepare Auckland
to host the Cup defence.
Sir Stephen chaired the Growth and Innovation Advisory Board,
the Climate Change Leadership Forum from 2007 to 2009, and
the Broadband Investment Forum from 2008 to 2009. He also
chaired a section of the Job Summit Working Group in 2009, with a
particular focus on Auckland, including an involvement co-funding
the mayor’s taskforce on jobs.
His inspirational leadership and commitment to fostering ingenuity
and sustainable growth have garnered many awards and honours,
including being appointed as an Officer of the New Zealand
Order of Merit (ONZM) in 1997, which became Knight Companion
of the New Zealand Order of Merit in
2009 and was then elevated to Knight
Grand Companion in the 2019 New Year
Honours. He was named Kiwibank New
Zealander of the Year in 2015.
Sir Stephen is one of New Zealand’s
most well-known and highly respected
businessmen. His ingenuity and
entrepreneurship in founding The
Warehouse Group and introducing
affordable products in the 1980s set
the foundation for the continual growth and diversification
which remains a cornerstone of the Group’s philosophy for
continued success.
Sir Stephen has been on a leave of absence from the Board since
October 2017, with Robbie Tindall representing Sir Stephen during
this time. Sir Stephen will retire by rotation and will not seek
re-election at the Group’s Annual Shareholders' Meeting on 27
November 2020. Sir Stephen, The Tindall Foundation and various
other family interests will continue to retain over 50% shareholding
in the Group.
The Board and Management would like to take this opportunity
to thank Sir Stephen and Lady Margaret for their many years
of dedication to the Group and their continued support into
the future.
SIR STEPHEN
TINDALL
DRAFT DRAFT
Sir Stephen is one of New Zealand’s most well-
known and highly respected businessmen, whose
generosity and philanthropic efforts are widely
acknowledged and admired.
Our Founder and Non-Executive Director

11
Integrated Annual Report 2020
Not long after Sir Stephen opened his first store in 1982, Keith
started providing accounting, tax and corporate advice,
bringing to the business the benefits of an extensive financial
background. His professional career has included being a
senior partner in the accounting practice Spicer & Oppenheim
which later became BDO Spicers, and serving as a president of
the New Zealand Institute of Chartered Accountants.
After joining The Warehouse Group Board in 1988, Keith
became the Chair following The Warehouse Group Limited’s
public listing on the New Zealand Stock Exchange in 1994. He
served in that capacity until 2011 when he stepped down and
became the Deputy Chair. In 2017, he became the Chair of the
Audit and Risk Committee.
Keith’s long-standing record of leadership as a director and
advisor to companies covers a diverse range of industries,
including the energy sector, rural services, printing, media
and exporting. He maintains a vital presence on the boards
of other listed companies, including Goodman New Zealand
which he chairs. He is also a director of Mercury NZ Limited,
Sky Network Television Limited, Healthcare Holdings Limited
and several other private companies.
During a period of significant transformation at The
Warehouse Group, Keith’s extensive experience and
financial expertise have been invaluable to the business
as it has acquired and grown to a portfolio of six brands.
Keith has been a major asset to The Warehouse Group
over his many years of service where he has provided
enormous support, experience, financial expertise and
wisdom to the whole Board and the Group. He will be
greatly missed by all those who have worked with him.
Keith will retire by rotation and will not seek re-election
at the Group’s Annual Shareholders’ Meeting on 27
November 2020.
The Board and Management would like to take this
opportunity to thank Keith for his dedication and many
years of service to the Group.
KEITH SMITH
DRAFT
From its earliest days, Keith Smith has played a part in the successes
of The Warehouse Group.
Deputy Chair, Chair of the Audit and Risk Committee

12
The Warehouse Group
CEO'S

REPORT
"At the time of our half-
year announcement, our
results demonstrated that
we were on track with the
implementation of our
strategy and our far-
reaching transformation
programme."
CEO’s Report
Nick Grayston
CEO, The Warehouse Group
DRAFT DRAFT

13
Integrated Annual Report 2020
Strategy stress tested
The global cataclysm wrought by COVID-19 has stress-tested our
strategy, our business and our people far beyond the levels anyone
could have expected or desired. Obviously it has not been business
as usual this year for anyone, anywhere in the world.
Relative to the experiences of those elsewhere we have been
fortunate in New Zealand. Nevertheless, COVID-19’s impact has
made huge demands at every level of The Warehouse Group. Events
during the final months of FY20 required that our teams work in new
ways – whether it be store team members fulfilling online orders
in-store or our Store Support Office teams supporting the customer
engagement centre or working in our fulfilment centre.
Our experience in navigating the uncertainty and restrictions
during New Zealand’s initial response to the pandemic gave us
even greater confidence that the Agile model at our Store Support
Office will support the business with speed to market, collaboration,
innovation and productivity.
After six months of operating frontrunner tribes to help us define
optimal operating models, we moved fully to this way of working in
late August. This will enable us to further increase our focus on New
Zealanders’ needs in a retail environment where the one real constant
is the relentless pace of change.
Learning from adversity
At the time of our half-year announcement, our results demonstrated
that we were on track with the implementation of our strategy and
our far-reaching transformation programme.
We experienced some real challenges during Christmas, brought on
in part by New Zealand’s adoption of heavy discounting as early as
Black Friday in November. Additionally, every six years, there is one
less week between Black Friday and Christmas, which compresses
the selling season and tends to have a profound effect on overall
spending – 2019 was one of those years. We did, however, see a late
wave of spending at the end of a shorter Christmas trading season
which flowed into decent results in January.
Also, we experienced an operational challenge during this period:
the self-inflicted wound we sustained from an initiative to centralise
fulfilment functions for The Warehouse and Warehouse Stationery
and deploy a new Warehouse Management System (WMS).
With the benefit of hindsight, we now know that insufficient user
input and early-stage support in the planning and development
phase, underpinned by poor quality of data, data architecture and
governance, contributed to the issues relating to the WMS project.
We regret that this happened and the inconvenience that it caused
to our customers.
But we have learnt a great deal from the experience, which
underscored that the old-fashioned siloed methods of execution and
hierarchical structures are no longer fit for purpose. It also highlighted
that 25 years of under-investment in information systems and physical
infrastructure is a problem we must address in order to become a
nimble, customer-centric company.
We set in place a very purposeful recovery plan. In addition, one
of our experienced senior executives - Pejman Okhovat - is now in
charge of the integrated supply chain.
We had already planned to shift to an Agile operating model and
the WMS experience further validated its introduction. These
learnings are all the more important given the huge slate of systems
modernisation we have ahead of us.
Our response to the WMS challenge also meant we were much better
placed when COVID-19 hit.
The closure of our physical stores and the subsequent permission
from the Government to sell essentials online proved to be a
quantum leap for our online sales, with 48% of our online purchasers
during this period being new eCommerce customers.
We saw exponential growth in eCommerce in just two months
from April through to June. While not all this growth has survived
lockdown, much of it has and this behaviour shift will have profound
effects on legacy retailers, which necessitates the acceleration of
our transformation.
The institution of social distancing meant we could only deploy 60%
of our people in the fulfilment centre – and that could have crashed
the business totally.
However, the benefit of becoming much more Agile was that
very quickly we opened up 30 The Warehouse and Warehouse
Stationery stores as online fulfilment centres, which took a lot of the
pressure off. We also quickly moved to open all 75 Noel Leeming
stores as fulfilment centres due to demand.
It was by no means perfect. When stores reopened, there were
issues around contactless Click & Collect because we weren’t
designed to satisfy the volumes ordered, exacerbated by the
problems experienced by our delivery service providers.
Yet, by and large, we coped. That would not have been the case
in the last months of calendar year 2019. It’s a real learning from
adversity, and also points into the health of the future.
We still have in front of us a major task in terms of information
system and physical infrastructure upgrades. We have an
integrated systems strategy and are well placed to begin rolling
out improvements. For example, introducing a new finance and
inventory system in The Warehouse will enable real-time visibility
of inventory that will have a customer-facing benefit.
COVID-19: Agile adaptation
In the days immediately prior to New Zealand’s initial COVID-19
lockdown, the Group faced considerable uncertainty.
We had to pivot quickly after unexpectedly being told we could not
operate our stores or online services during alert levels 4 and 3.
Subsequently it became clear that people needed access to our
products so they too could make the necessary adjustments in
their work and home lives.
We worked very closely with the Ministry of Business, Innovation and
Employment (MBIE), and other government officials. We took great
care to do exactly what they asked us to do. We were a participant in
National Emergency Management Agency (NEMA), the Police’s retail-
focused COVID-19 response team, and worked with other retailers
and industry in the lead up to and during lockdown.
We were able to provide an important service to New Zealand
by supplying essential goods online through The Warehouse,
Warehouse Stationery and Noel Leeming.
Our earlier decision to diversify our supply chain by building a
direct sourcing business with relationships into factories in China,
India and Bangladesh stood us in good stead in terms of continuity
of product supply.
In the early stages of New Zealand’s COVID-19 response, we were
fortunate to have front loaded deliveries from China by early
January to account for Chinese New Year. That meant we had three
months’ insulation in the system. In the end, China reopened fairly
quickly, so the impact on our business was more influenced by
decisions as to what and how much in terms of orders to cancel in
ambiguous circumstances around the impact of COVID-19.
In South Asia, many factories have been working through lockdown
because their workers need to continue earning. In an effort to do
the right thing, we have tried to keep our contracts going and have
also taken additional steps to support our partners. These include
distributing COVID-19 safe resource kits prepared by our industry
DRAFT

14
The Warehouse Group
partners to supplier factories. In the case of India, Bangladesh,
and Pakistan, we have contacted factories directly to confirm and
track their COVID-19 management practices, and to ensure that
they were meeting all payment obligations to their workforces and
operating in accordance with any government guidelines.
Delivering value across our brands
Revenue for The Warehouse in FY20 increased marginally to $1.7b,
with gross margin down 70 basis points.
It was pleasing to see the continued increases in quality and
value perception, and to reap the benefits of greater acceptance
of our Every Day Low Prices strategy, which also drove further
productivity improvements.
We are very proud of the resilience that our people demonstrated
in coping with extremely uncertain circumstances as a result of
COVID-19 and the work the fulfilment team has done to meet the
surge in online demand.
Noel Leeming had another record-breaking year – exceeding $1b
revenue for the first time, with operating profit up 20.8% to $46m
this year. Operating margins also improved 50 basis points from
4.1% in FY19 to 4.6% this year.
The continued execution of services and growth into the
commercial business gives us a platform to build into B2B. Services
delivered significant growth with a 19% increase year-on-year. Other
milestones included the successful launch of our new Protection
service plans; the growth of Consultation which delivered over
$2.2m this year; and the introduction of our free Tech Solutions
helpdesk, which has helped over 18,000 customers.
The successful introduction in November of our new digital team
member – Nola – at our Westfield Newmarket store marked a further
leap in innovation. Nola is one of the first human-like interfaces
backed by artificial intelligence in a New Zealand retail store, and
is positioned to help shoppers navigate the store and answer
questions they may have. She is now working in our contact centre
helping customers there too.
We have done some hard yards in Torpedo7. Revenue was up 10.7%
to $191m on last year but there was an operating loss of ($14.7m).
The loss was caused by continued correction of inventory profiles
and the impact of not being able to trade during lockdown and
resulting inventory imbalances.
While we are not there yet on the results, Torpedo7 is expected
to deliver. We are confident that we are making progress towards
profitability and will see a quantum leap in performance in FY21.
The recruitment of Simon West, who became Torpedo7’s CEO in
August 2019, has provided the steady, experienced and dedicated
leadership required to lift the brand’s performance. We are starting
to see evidence of progress with changes to merchandising, the
product mix, improved skill sets in stores, and steps taken to grow
distribution and fulfilment capabilities.
Warehouse Stationery continued to build on the momentum of
its positive performance in FY19. Retail sales were up 0.1% with 50
basis points lift in gross margin. Operating profit also increased from
$16.7m in FY19 to $22.8m this year.
There were seven further integrations of The Warehouse and
Warehouse Stationery stores, taking the total number to 17. These
Red and Blue store integrations are delivering the performance
benefits we had sought, and we continue to assess further
opportunities to bring stores together across our portfolio.
TheMarket.com more than proved its reason for being
during COVID-19 alert levels 4 and 3. It was an extraordinary
achievement by the team to go live in August last year, and to do
so under budget. We have seen good growth, with the number of
merchants choosing to participate on TheMarket.com platform
reaching over 650 by the end of July 2020.
We have learnt a great deal about the drivers and cost metrics of
engagement and acquisition. The focus now is to grow TheMarket.
com’s offerings further and keep leveraging Group strengths to
benefit customers. While we know there is still a lot of work to be
done, TheMarket.com has had a very good foundational year and is
meeting planned performance targets.
As stated earlier, Group online sales accelerated well beyond
expectations due to the impact of rapid changes to our
customers’ shopping options and habits during the COVID-19
lockdown.
We knew before COVID-19 that our digital strategy and expanded
online offerings were a critical component of our future growth.
This year’s results validate continued investment in developing our
online channels.
Here for good
In December 2019, the Group’s Chief Sustainability Officer David
Benattar and I attended COP25 (The Conference of the Parties – the
supreme decision-making body of the United Nations Framework
Convention on Climate Change) in Madrid. As part of the New
Zealand delegation led by Minister for the Environment James
Shaw, we participated in panel discussions and meetings between
government, non-government organisations (NGOs), scientists and
business on the collective global effort to combat climate change.
After moving to become a carbon neutral business last year, we were
honoured to attend and share our perspectives.
While the conference itself ultimately had a disappointing
result, with no global agreement to Article 6 which regulates the
international trade of carbon emission credits, the summit was
full of valuable insights.
In particular, we saw how the engagement of the private sector is
essential to addressing the climate crisis, in ways that governments
and NGOs cannot do. Companies are stepping up globally and
taking action on sustainability because they think it is the right
thing to do and because the customer is requiring it. They are
moving faster than governments which have, so far, failed to deliver
the mechanisms for achieving the Paris Agreement commitments.
COVID-19 will not slow down our commitment to increasing the
element of sustainable product quality and materials, packaging
and consumption that we supply.
We have dedicated our efforts to marrying sustainable attributes
with affordability so customers do not have to pay more. We
now have over 6,000 products with sustainable attributes in our
stores. We are doing much more to tell our customers about those
products, having just launched our ‘Sustainable and Affordable’
campaign to educate our customers around the fact that a value-
based offering doesn’t necessarily require compromise, in terms of
sustainability.
The Group takes seriously its role in helping to upskill New
Zealand’s workforce. For the hundreds of young people
participating in our youth and gateway programmes, like P-TECH
and Red/Blue Shirts in School.
We worked with our partners to move swiftly to provide laptops for
students needing them, and to support curricula and programme
redesign so that learning could be moved online.
In-store training for our Red Shirts in Communities programme
with the Ministry of Social Development was paused as a result
of COVID-19 restrictions.
We have an increasing focus on equality and diversity. In July 2020
we joined other major businesses which signed the ‘NZ Retailers
Against Racism Pledge’ to confirm an ongoing commitment to
address racism proactively, along with a refusal to tolerate other
forms of abuse at work.
CEO’s Report
DRAFT DRAFT

15
Integrated Annual Report 2020
Approximately one in four New Zealanders lives with a physical,
sensory or learning disability, mental health or other challenges.
We partnered with Accessibility Tick, a pan-disability provider, to
make the Group’s workplaces more accessible and inclusive for our
team members and customers with disabilities. In December 2019,
we became the first retailer to achieve the Accessibility Tick.
In September, we announced our Retail Wage commitment, entitling
employees at The Warehouse with at least a year’s worth of service to
receive a pay increase to $21.15 per hour in 2020.
We have also started to trial a new programme aimed at rewarding
our customers and providing them a way to support the causes
they are passionate about. Called ‘Giveit’, the programme enables
customers to access exclusive offers and rewards, via The Warehouse
app and through scanning a QR code in store. Every time a customer
shops with us through their Giveit account, The Warehouse gives
back to a local cause of their choice.
Responding to an uncertain trading environment
COVID-19 caused some major customer changes – particularly the
shift to online. Although peak online numbers dropped after we
reopened our stores, they remain around double the level prior to
the COVID-19 lockdown. It is a change that looks set to stay.
The sustained shift online causes
some specific challenges to our
business model and raises questions
about the need for quite so many
physical store locations.
Good retailers should be assessing
the suitability of their network
continuously. Value for money has
never been more important to our
customers. We can deliver that if
we manage our costs and run our
business efficiently.
That is why we have accelerated
some changes around in-store
operations and the location of some
of our stores in response to our
uncertain trading environment.
It is not just about closing stores.
It’s about evolving our store network
– and that has seen us open new
stores at Lunn Ave in Auckland,
Westfield in Newmarket, and
Northlink in Christchurch.
We have also confirmed and
signalled the closure of several stores including The Warehouse
Birkenhead (Auckland), Dunedin, Johnsonville (Wellington),
Whangaparāoa, and Noel Leeming Takapuna (Auckland), the
Palms and Papanui (Christchurch), Tokoroa, Henderson and St
Lukes Clearance Centres and Warehouse Stationery Te Awamutu.
Our Dunedin Central store will become a 'dark store' to serve our
customers’ online orders.
The result of all these changes could see a reduction of
approximately 320 full-time equivalent roles across the business.
We have made these changes to weather the effects of the varying
economic conditions and customer habits with strength, and help
us to continue to be there for our team of more than 11,000 as well
as for our customers and communities. Very specifically, the growth
of online, both customer direct and via Click & Collect as well as
changing shopping times requires us to redeploy our workforce, in
many cases altering their rosters.
During the year we welcomed some talented new people to our
executive leadership team.
Edwin Gear, our Chief Information Officer, brings a wealth of retail
information services experience. Most recently, he was the Chief
Information Officer of Metcash Australia, and has held prior roles
in New Zealand with Mitre10 and Foodstuffs. Alongside this, Edwin
has extensive operational and broader business experience
together with a strong track record of delivering change and
building and leading teams.
Richard Parker stepped up to become Acting Chief Human
Resources Officer, following Evelyn Ross’ resignation from the role
in January 2020, and has now been appointed in this role effective
31 August 2020. Previously, Richard held a number of senior human
resources and corporate legal roles at some of New Zealand’s
leading organisations including Fletcher Challenge, Telecom (now
Spark) and TVNZ.
There have been two other departures from the team. Mark Yeoman,
who became Chief Operating Officer in April 2018, played a key role in
the transformation of the business over the past five years. Mark left
the business in May 2020.
Post-balance date, our Chief Logistics Officer Chris Foord also
departed. Chris had led all aspects of our logistics and fulfilment
across the Group, including The Warehouse, Warehouse Stationery,
Torpedo7 and Noel Leeming.
Evelyn Ross, Chief People Officer,
also left the company during the
financial year.
We wish Mark, Chris and Evelyn all
the best in their future careers.
Maintaining momentum
As we look ahead to FY21,
we cannot afford complacency.
We saw a significant lift in sales
after our stores reopened. However,
the forecasts for New Zealand’s
economy indicate that there is a
significant contraction ahead. While
headline unemployment data in early
August was considerably better than
expected, those not participating in
the labour force rose by 37,000 in
the June quarter. By the end of July,
around 21,000 people were receiving
the COVID-19 Income Relief
Payment. There is much uncertainty
about the flow-on effects when this
subsidy ends.
Consumer confidence remains below the historical average. We
do not expect the recent wave of sales optimism to continue,
particularly in light of the re-emergence of community
transmission of COVID-19 in August and the potential for more
lockdowns or disruption to occur.
The Group is taking a conservative approach and expects the
coming year to be tough.
In spite of the challenging business environment, we will continue
to make the changes necessary to protect and grow our brands.
We will invest in our key infrastructure. We will refine our operating
model further as we embrace the principles of agility. And we will
continue to eliminate inefficiencies that impact on our productivity.
There is more work to be done.
Nick Grayston
CEO, The Warehouse Group
"We have
dedicated our
efforts to marrying
sustainable
attributes with
affordability so
customers do not
have to pay more
to do the right
thing."
Nick Grayston – CEO
DRAFT

16
The Warehouse Group
Our Purpose
OUR
PURPOSE
Every day, we're living our purpose by transforming
our business to exceed our customers' expectations
and have a positive impact on our communities.
Helping Kiwis live
better every day
DRAFT DRAFT

17
Integrated Annual Report 2020
Our Vision
OUR
VISION
is to build New Zealand
,
s
most sustainable, convenient
and customer-first company.
This means we will be profitable, and at the same time take responsibility
for our environmental and community impact. We believe that sustainable
business is good for our company, our customers, as well as the communities in
which we operate.
Being convenient means that more New Zealanders will gladly choose to
begin their shopping journey with one of The Warehouse Group’s brands. In a
world of abundant choices, convenience has become the most important way
of winning customers’ hearts. We will achieve this by providing products and
services when and where they are needed, with ease of access and a choice of
ways to pay and collect.
We understand that for us to win
in convenience, we must put the
customer first and mobilise the Group
in a way that allows us to keep pace
with our customers’ rapidly changing
expectations, to understand their
problems, and to solve them.This is why
we have moved to Agile ways of working,
where our teams are empowered
to deliver solutions quickly and put
our customers right at the heart of
everything we do, every day. For our
productivity, this means removing
unnecessary organisational layers and
silos. And for our people, this means
making The Warehouse Group the best
place to work.
DRAFT

18
The Warehouse Group
Our Shared Values
OUR
SHARED SHARED
VALUESVALUES
We put the customer first in
everything we do
Think customer
Whakaarohia te kaiutu
We walk the talk and
make things happen
Own it
Kia haepapa
We are one team, standing up
for our people, our planet
and our communities
Do good
Mahi i nga mahi pai
DRAFT DRAFT

19
Integrated Annual Report 2020
OUR

ECOSYSTEM
We’re building a
customer-centric
ecosystem for
New Zealand that
enables frictionless
shopping experiences
and creates greater
customer value
over time.
Our unique combination of local assets,
global partnerships, and our strong
financial position means we can further
scale our business by investing in the
right capabilities to serve our customers
more holistically.
We now have strong ecosystem
foundations in place with an established
physical footprint and market-leading
digital assets.
1
Our efforts and innovations
have already delivered significant omni-
channel capabilities across our stores,
services, supply chain, and our mobile
apps and online sites. These are already
improving the customer experience,
including the launch of 1-Hour Click &
Collect in Noel Leeming and the launch
of our online marketplace platform,
TheMarket.com.
Further improvements will make
customer shopping journeys with our
family of brands faster, easier and more
personalised through unified data,
platforms and people – while remaining
focused on the fundamentals of delivering
exceptional value and new assortments
with improved customer fulfilment and
payment options in store and online.
1
New Zealand’s No 1. retail site by traffic.
DRAFT

20
The Warehouse Group
Our Ecosystem
Shopping is where it all starts,
and we’re focused on making it an
easy and integrated omni-channel
experience.
• Stores - Our stores are convenient
and everywhere.
• eCommerce - Our first-party
e-Commerce sites and apps are
the top retail sites and apps in NZ.
• Marketplace - TheMarket.com
helps take our range from
120,000 to 2 million plus!
Omni-Channel Shopping
We start everything by focusing on our customers.
We wrap our customer experiences around three
unified enablers: our people, our platforms, our data.
Our customer loyalty
programmes bring it all
together by rewarding
customers for engaging
with The Warehouse
Group’s brands.
Loyalty
Our Customer
P
E
O
P
L
E
P
L
A
T
F
O
R
M
S
D
A
T
A
OUR ECOSYSTEM
DRAFT DRAFT

21
Integrated Annual Report 2020
Customer fulfilment
and our logistics
relationships get the
goods and services
to our customers.
Our services help our
customers and businesses
in their daily lives.
Fulfilment
Click & Collect
Delivery
Services
Our payment
options help
customers pay
quickly and easily,
with more ways to
make their budgets
work for them.
Payments
Our supplier advertising
infrastructure will turn our store
and digital traffic into supplier
funding and incremental revenue.
Advertising
media
centre
media
centre
media
centre
media
centre
DRAFT

22
The Warehouse Group
OUR BOARD
INTERNAL
• Corporate Governance and
Nomination
Committee (Chair)
• Audit and Risk Committee
• Disclosure Committee
• People and Remuneration
Committee
• Health, Safety and Wellbeing
Committee
OTHER DIRECTORSHIPS
• Sky Network Television Limited
• ANZ Bank NZ Limited
• Sweet Louise Foundation
INTERNAL
• Audit and Risk Committee (Chair)
• Disclosure Committee (Chair)
• Corporate Governance and
Nomination Committee
• People and Remuneration
Committee
• Health, Safety and Wellbeing
Committee
OTHER DIRECTORSHIPS
• Goodman (NZ) Limited (Chair)
• Mercury NZ Limited
• Healthcare Holdings Limited
• Sky Network Television Limited
INTERNAL
• Disclosure Committee
• Corporate Governance and
Nomination Committee
• People and Remuneration
Committee
• Health, Safety and Wellbeing
Committee

OTHER DIRECTORSHIPS
• K One W One Limited
• The Tindall Foundation
• Foundation Services Limited
Joan has been a professional
director for more than 20 years and
spent over 25 years working in the
media industry, previously holding
CEO positions at The Radio Network
and Fairfax Media. Her current
governance roles are Chair of The
Warehouse Group Limited, director
of ANZ Bank NZ Limited and Sky
Network Television Limited. Joan
has previously held Chair positions
at Television New Zealand Limited
and Auckland International
Airport Limited.
Joan is a Trustee of the Sweet Louise
Foundation and is Chair of a steering
committee working to increase the
percentage of South Auckland Māori
and Pacific Island students taking up
roles in the health sector.
Keith has been involved with
The Warehouse Group since Sir
Stephen opened his first store in
1982, initially providing accounting,
tax and corporate advice, and
was Chair from 1995 to May 2011.
He has a long-standing record of
leadership as a director and advisor
to companies in a diverse range
of industries, including the energy
sector, rural services, printing, media
and exporting.
Keith is Chair of listed company
Goodman (NZ) Limited and is a
director of Mercury NZ Limited,
Sky Network Television Limited,
Healthcare Holdings Limited and
several other private companies.
He is a past president of the
chartered accountants Australia
and New Zealand.
In October 2017 Sir Stephen Tindall
decided to take a leave of absence
from the business. Robbie represents
him during this time. Robbie has
been attending Board meetings
since his appointment in 2011.
Robbie studied Arts and Science at
the University of Auckland before
spending eight years at
The Warehouse in various
merchandise and buying roles. Today
he works for K One W One Limited,
a family investment company,
working alongside – and investing
in – some of New Zealand’s most
exciting technology and innovation
companies as they grow and seek
to go global.
Joan Withers
MBA, CFinstD
Chair & Independent
Non-Executive Director
Keith Smith
BCom, FCA
Deputy Chair & Independent
Non-Executive Director
Robbie Tindall
BA, BSc
Non-Executive Director
(Alternate to Sir Stephen Tindall)
Our Board
DRAFT DRAFT

23
Integrated Annual Report 2020
INTERNAL
• Health, Safety and Wellbeing
Committee (Chair)
• Audit and Risk Committee
OTHER DIRECTORSHIPS
• Z Energy Limited
• Television New Zealand Limited
• Southern Cross Health Society
• Southern Cross Pet Insurance
Limited
• Jade Software Corporation
Limited
Julia has extensive digital,
customer, data, information
technology, strategy and business
transformation experience across
a number of sectors including
airline, telecommunications, local
government and not-for-profit in
New Zealand and Australia.
Julia has a strong track record of
delivering award-winning innovative
customer-facing products and
services. She has been a professional
director for six years. Previously, Julia
was the Chief Information Officer
of Air New Zealand, and she was
awarded the New Zealand CIO of the
Year award in 2009.
Julia Raue
CMinstD, GAICD
Independent
Non-Executive Director
John has had an extensive retail
career, which includes executive
experience across sectors that
span general merchandise,
fashion apparel, FMCG, consumer
electronics, telecommunications,
hospitality and electricity retailing.
Over his 30-year career John has
spent 15 years with The Warehouse
Group, starting as a joint-venture
partner in 1990 and progressing
through senior roles in operations,
marketing, merchandise,
international sourcing and
business development. He has also
had CEO roles with Noel Leeming
and foodservice distributor
Southern Hospitality.
INTERNAL
• Audit and Risk Committee
• Health, Safety and Wellbeing
Committee
OTHER DIRECTORSHIPS
• Vanishing Point Limited
• Farmlands Society
• Colonial Motor Company Limited
• Quantiful Limited (Member,
Advisory Board)
John Journee
BCom, CFinstD, MAICD
Independent
Non-Executive Director
INTERNAL
• People and Remuneration
Committee (Chair)
• Corporate Governance and
Nomination Committee
• Health, Safety and Wellbeing
Committee
OTHER DIRECTORSHIPS
• Les Mills International Limited
• Wayfare Limited
• BLIS Technologies Limited
Tony has extensive global retail
and eCommerce experience with
a strong track record in a diverse
range of industries. Most recently,
he was General Manager (Markets)
for Icebreaker Clothing with
responsibility for the company’s
global business units in New
Zealand, Australia, USA, Canada,
Europe and Asia as well as the
development of the company’s
rapidly growing eCommerce and
retail business units.
His prior experience includes
senior roles in Monster.com and
Seek.com, both successful online
recruitment sites.
Antony Balfour
BCom
Independent
Non-Executive Director
DRAFT

24
The Warehouse Group
INTERNAL
• Health, Safety and Wellbeing
Committee
OTHER DIRECTORSHIPS
• Facebook Pty Limited
• Meandu Australia Pty Limited
INTERNAL
• Audit and Risk Committee
• Health, Safety and Wellbeing
Committee
OTHER DIRECTORSHIPS
• Fulton Hogan Limited (Chair)
• Auckland International Airport
Limited
• Tappenden Holdings Limited
• Skyline Enterprises Limited
Dean has significant CEO and
financial markets experience. Most
recently he was CEO of Silver Fern
Farms Limited where he successfully
led the business through a period of
significant change and improvement
in financial performance, staff and
supplier engagement, sustainability
and consumer trust in brand.
His prior experience includes 12
years at global investment bank
Deutsche Bank, working in both
Australia and New Zealand where he
advised a wide range of companies
on mergers and acquisitions,
capital management, corporate
restructuring and capital raising.
Renee has had extensive experience
in business transformation, corporate
strategy and technology innovation.
Renee is the Technology Lead for
Spark NZ with responsibility for
technology innovation across Spark.
She has also played a key leadership
role in the organisation's transition
to Agile.
Renee’s previous experience
includes roles with Air New Zealand
and Macquarie Group, both here
and abroad. Renee holds a Bachelor
of Engineering (Automation and
Control)(Hons) and a Postgraduate
Diploma in Business Administration
from Massey University.
Will is a seasoned business leader
and has an extensive track record
of driving growth across emerging
markets and technologies. He is
currently Managing Director of
Facebook for Australia and New
Zealand and was previously Vice
President at Facebook for Asia
Pacific Emerging Markets. Other
roles in his portfolio include Regional
Director at Google for Mobile and
Social in the Asia Pacific region and
Director of Sales at Microsoft in the
Consumer Products Division.
Will has a passion for the retail
industry and has worked closely
with retailers throughout his career.
He started with Coca-Cola as a
Retail Sales Manager and believes
that “there are more opportunities
than risks in retail, provided
retailers focus on improving
organisational designs”.
Dean Hamilton
BCom
Independent
Non-Executive Director
Renee Mateparae
BEng
Future Director
Will Easton
Independent
Non-Executive Director
Our Board
DRAFT DRAFT

25
Integrated Annual Report 2020
Relevant Board Skills to
execute Group Strategy
Joan
Withers
Keith
Smith
Will
Easton
John
Journee
Robbie
Tindall
Julia
Raue
Tony
Balfour
Dean
Hamilton
Industry specific
Operational experience in the retail
industry
Brand, marketing and customer
experience
Omni-channel retail experience
Digital and technology
experience
Direct sourcing experience
Logistics experience
Specific to Group strategy
Development of a high
performance culture
Senior leadership of change
management at scale
Transformation and business
disruption experience
Innovation and entrepreneurism
Government relations
Union relations
Environment and Corporate
Social Responsibility experience
Subject matter expertise
Development and execution
of business strategy
Governance experience
Large company leadership
experience
Finance/accounting expertise
Audit committee/ risk
management experience
Regulatory knowledge and
experience
Health and safety experience
HR/learning and development
experience
Financial markets experience
Iwi relationships and connectivity
Shareholder and investor relations
experience
Primary skills
Secondary skills
BOARD SKILLS

MATRIX
Governance plays a critical role in business and stakeholders deserve the highest standards of corporate
governance from their boards.
Our Board skills and diversity self-assessment found that the Board holds many strong attributes with a diverse
mix of skills among the Directors. This will help drive the Group to achieve our strategy through great execution,
brand marketing and customer experience.
DRAFT

26
The Warehouse Group
Our Brands
OUR
STORES
257
stores across
New Zealand
The
Warehouse
stores
92
Warehouse
Stationery stores
(incl. 17 SWAS)71
1-day | TheMarket.com
Plus leading websites and apps
Torpedo7
stores20
Noel Leeming
stores74
DRAFT DRAFT

27
Integrated Annual Report 2020
LOVE THE
EVERYDAY
FOR LESS
The Warehouse is the country’s largest general
merchandise retailer with a presence in virtually
every Kiwi home and community.
Our customers guide our focus as their shopping
behaviours change. Shifts to more convenient options
increased online sales by 50% and Click & Collect sales
by 60%. Our footprint continues evolving as a result.
We have opened a new generation of stores starting
with Lunn Avenue, closed our Birkenhead store, and
opened seven new Warehouse Stationery stores-
within-a-store (SWAS). The top-ranked Warehouse app
became the vehicle for the first trial of Giveit™, our
customer engagement programme focused on giving
back to communities.
Our team members continue to invest in product
quality while keeping our prices low. We reset our
bike programme with improved quality and safety
standards. We relaunched our denim range with new
fabrications, improved fits, a reduced assortment
and better availability on essential lines with the
introduction of volume tables, and post lockdowns
we have seen sales increase by 38% on last year.
Communications and gaming remained strong, and
updated Veon smart TVs remain New Zealand’s No. 1
selling TV by units. Toys remained a standout category
at The Warehouse, the nation’s biggest toy store
and the home of favourite brands like Lego. Families
appreciate our Dollar Deals on everyday items like
grocery, health, beauty and cleaning. We continued
to support locally-made products like Whittaker's and
Sistema. We also launched our $1 range of hygiene
products to tackle period poverty.
We aspire to become New Zealand’s most sustainable
company, in line with our values and our customers’
preferences. More than $100m in sales relating to
6,000 products with sustainability attributes. We
joined the Better Cotton Initiative (BCI), and our
sustainable packaging standards are reducing plastic
wherever possible.
Our team’s passion for our customers and communities
helped us manage through COVID-19. We mitigated
risk by moving more of our range into basics and
continuity products. Simplifying our range remains a
top priority as we look to continue to reduce our SKUs
(stock-keeping units) across our range in FY21. We
also maintained good levels of stock during COVID-19.
Importantly, we supported and strengthened our
supplier relationships by continuing our commitments
throughout COVID-19.
Our Brands | The Warehouse
DRAFT

28
The Warehouse Group
Our Brands | Noel Leeming
THE AUTHORITY IN
APPLIANCES, TECHNOLOGY
AND SERVICES
Other highlights include growing our market share
by 120 basis points on the previous year to 42%,
achieving 19% growth in Services and 7.5% growth in
our Commercial division year-on-year. Online sales
growth of 145% contributed to our record
sales achievement.
These successes reflect a core belief at Noel
Leeming: keeping the customer at the centre
of our thinking delivers business growth.
This year innovation was at the heart of our business
activities, with the launch of 1-Hour Click & Collect
and the Noel Leeming app. We introduced free
Tech Helpdesk consultations with any purchase,
helping over 18,000 customers. We grew the myNoel
Leeming loyalty programme with high scores across
all metrics, while also launching new Protection plans
that work harder for our customers.
We introduced Nola – the first digital human in
the sector – and then expanded her abilities into
online chat, store concierge, and sales assistance
Noel Leeming helps Kiwis enrich their lives
through technology. We pride ourselves on
offering Kiwis global and home brands, coupled
with innovative, world-class service. This was
a significant year as Noel Leeming joined the
elite group of New Zealand businesses turning
over $1b dollars in annual sales.
for online consultation. In another milestone, the Apple
and Noel Leeming television campaign was the first
advertising integration of its kind globally.
We improved our store footprint, opening our
Newmarket store Innovation Hub, setting a new
benchmark for consumer electronics retailing in
Australasia. We also launched Smart Home stores
for customers to experience a true smart home
environment.
Staff engagement and learning tools that increased
the expert service level across all stores helped lift
performance. Noel Leeming delivered the highest
amount of technology to Kiwi kids through commercial
relationships in the education sector. By improving our
Services Consultation offering, more New Zealanders
have our passionate experts working with them when
and where they like.
DRAFT DRAFT

29
Integrated Annual Report 2020
Helping our customers do their best work is
what Warehouse Stationery stands for. Our
customers know whatever the challenge or task,
we have the tools they need. We make it easy
for our customers to do their job well, be it in
business, a creative project or helping educate
the leaders of tomorrow.
Customer shopping behaviour continued to evolve as
online sales grew 25% and Click & Collect sales grew
76%. In line with these changing dynamics, we opened
seven new stores-within-a-store (SWAS) and one new
stand-alone store in Dunedin.
FY20 highlights included our Back to School campaign
where Warehouse Stationery remains number 1.
Warehouse Stationery achieved retail operating
profit of $22.8m up 36.6%, with gross margin growth
of 50 basis points year-on-year. Our bring your own
device (BYOD) sales grew 26% YOY. We are meeting
our 'business made easy' promise with initiatives
supporting local companies and broadening our
range to satisfy Kiwi businesses’ needs. New offerings
include health and safety, cleaning, and canteen
products, and an expanded furniture selection
including locally-made options.
We also launched our own office products range,
featuring the Warehouse Stationery brand. We
expanded our te reo Māori range of school supplies
and launched our recycled exercise book range, as
DO YOUR
BEST WORK
well as our sustainable wheat paper, to further deliver
on our sustainability efforts.
The Art and Craft category has enjoyed consistent
growth, supported by our seasonal Get NZ Creating
campaigns, the relaunch of Inspiration Station, and our
art and craft sales were up 19.3% on the previous year,
and gross profit up 21%.
COVID-19 saw more people working from home as
New Zealand went into lockdown. We grew our position
as a key provider of office products with consistent
category growth and margin increase year-on-year.
Our Brands | Warehouse Stationery
DRAFT

30
The Warehouse Group
SEE YOU
OUT THERE
Torpedo7 believes that New Zealand is the
world’s best outdoor playground. That is why we
live for gearing up our customers, with a broad
range from the world’s best adventure brands,
alongside our own proudly designed products
that equip Kiwis to gain the most from their
outdoor pursuits.
With a newly focused leadership team in place, we have
made good progress year-on-year, with sales growing
10.7%, and in-trade product margin improving 22.9%.
FY20 saw continued store network expansion as
we opened four new stores in Newmarket, Rotorua,
Tauranga and Northlink (Christchurch). This was
complemented by strong growth in our online channel,
with sales up 72% on the prior year.
Torpedo7 Club continued to drive engagement,
accounting for nine out of ten customer transactions.
We leverage deep insights from customers’ attitudes
and shopping behaviours alongside transaction data,
to make sure our marketing and communications
remain customer-led and personalised.
Our digital reach grew with Facebook fans up 29%
on the prior year, Instagram followers up 47%, and
our loyalty database up 20%.
Torpedo7’s passion for the outdoors inspires our retail
activities and our care for the environment. This year,
we partnered with Sustainable Coastlines and Hillary
Outdoors to help make our outdoor activities more
sustainable.
In July 2020, Torpedo7 launched its 7 Wonders of NZ
campaign to help promote domestic tourism affected
by COVID-19. We have been humbled by the support
our customers have shown for New Zealand’s holiday
destinations.
Moving forward, Torpedo7 growth initiatives will
include a new club proposition to increase share,
building our in-house product range, continuing to
look for new store opportunities, and investing in
technology to drive efficiency.
Our Brands | Torpedo7
DRAFT DRAFT

31
Integrated Annual Report 2020
GET IT
ALL DONE
Online shopping in New Zealand expanded
to the next level with the introduction of
TheMarket.com on 1 August 2019.
TheMarket.com is an eCommerce marketplace
commanding a unique position in New Zealand’s
digital retail environment. It has quickly become
the place Kiwis visit to meet their shopping
needs, no matter what they are looking for.
With over 2 million products from more than 3,500
of the world’s most desirable local and international
brands, TheMarket.com’s range covers major lifestyle
categories including fashion, home and living, health
and beauty, electronics, sports and outdoors, DIY and
garden, pet, entertainment, food and pantry.
In November 2019 TheMarket.com launched
TheMarket Club, a subscription service that already
Our Brands | The Market
numbers thousands of customers who are able to
access VIP customer service, exclusive offers, and
free shipping for orders over $45.
In addition, TheMarket.com offers easy collections
and free returns from any one of the hundreds of
MarketPoints located in many The Warehouse, Noel
Leeming, Warehouse Stationery and Torpedo7 retail
stores across New Zealand.
TheMarket.com operates in close collaboration with
1-day.co.nz, offering up to 300 hot deals every day.
1-day.co.nz has been in operation since 2007 and is
the third-ranked eCommerce Group site by traffic with
25.6 million sessions last year. New Zealanders love
engaging with the twice-daily emails, ensuring they
don’t miss out on the latest offers which get snapped
up super-fast.
DRAFT

32
The Warehouse Group
Integrated Report
INPUTS AND RESOURCES
Create a world-class omni-
channel retail network that
leverages physical, digital and
infrastructure assets to deliver
customer needs and wants
in an efficient and innovative way.
Build solutions to address
productivity challenges and
create a dynamic organisation
that has the highest performing,
diverse retail talent in New Zealand.
Build ways of working that
foster repeatable and
competitive excellence.
Build strong relationships with
strategic stakeholder groups
that deliver sustainable value.
Accelerate our delivery of
sustainability proof points to
respond to stakeholders’
expectations of businesses
driving positive outcomes
for our planet and society.
Ensure efficient utilisation of
financial capital to compete,
enable growth and provide
a return on capital.
R
E
T
A
I
L

V
A
L
U
E

C
R
E
A
T
I
O
N

P
R
O
C
E
S
S
Understanding our market
• Demand forecasting analytics
• Customer feedback, data and insight
• Customised product offering
• Work with suppliers to focus on sustainability
• Taking a lead on sustainable product attributes.
Sourcing product
• International offices
• Career pathways
• Quality management and ethical sourcing practices
• Build direct and strategic sourcing arrangements
• Sustainable materials and manufacturing processes.
Bringing product to market
• Efficient warehousing and distribution
• Jobs for skilled and unskilled labour
• Continuous improvement of systems and processes
• Leverage third-party expertise
• Minimise our impact on the environment.
Omni-channel sales environment
• Seamless customer experience through physical and digital channels
• Customer service training, flexible working and equal opportunities
• Product fulfilment focus
• Customer loyalty
• Environmental best practice.
Supporting New Zealand communities
• Universal reach to help widely throughout New Zealand
• Superior customer service
• Effective community engagement programmes
• Creating employment opportunities for
11,000 New Zealanders.
Our Environment
The consumption of resources to operate our business,
including transport, electricity, packaging and their impact
on our customers.
Financial Capital
The financial resources that enable the Group to execute
its business model and maintain financial resilience.
Our People
He aha te mea nui o te ao. He tāngata, he tāngata, he tāngata.
What is the most important thing in the world? It is people, it is
people, it is people. Our focus is to develop our people to be
the best they can be.
Our Relationships
Our stakeholders, their input to us and our contribution
to them, including our customers, suppliers, team members,
shareholders, government and community.
Our Networks
The strength and efficiency of our networks achieved through store
experience and digital customer channels, optimising our supply
change networks and data optimisation.
Our Expertise
Our expertise in, and understanding of, our customers’ needs
and wants, and our focus on systems, processes and innovation.
INTEGRATED
REPORTREPORT
Our business model:
This report is The Warehouse Group’s second Integrated Report. It describes our business model and how our resources all
contribute through our retail value creation process to achieve our value-created process goals and ultimately our vision to build
New Zealand’s most sustainable, convenient and customer-first company. The aim of this report is to outline our focus areas,
priorities and progress for each year, along with the risks and mitigations related to each of the resource areas of the business.
This Integrated Report has been prepared using the International Integrated Reporting Council’s (IIRC) Integrated Reporting
Framework. The Group’s Board and Management have established internal preparation and quality control processes to ensure the
quality and integrity of this report. We have not sought external audit or assurance for the non-financial information in this report.
Please refer to each of the capital disclosures on the following pages for value-created outputs and progress achieved in FY20.
DRAFT DRAFT

33
Integrated Annual Report 2020
VALUE-CREATED PROCESS GOALS
Create a world-class omni-
channel retail network that
leverages physical, digital and
infrastructure assets to deliver
customer needs and wants
in an efficient and innovative way.
Build solutions to address
productivity challenges and
create a dynamic organisation
that has the highest performing,
diverse retail talent in New Zealand.
Build ways of working that
foster repeatable and
competitive excellence.
Build strong relationships with
strategic stakeholder groups
that deliver sustainable value.
Accelerate our delivery of
sustainability proof points to
respond to stakeholders’
expectations of businesses
driving positive outcomes
for our planet and society.
Ensure efficient utilisation of
financial capital to compete,
enable growth and provide
a return on capital.
R
E
T
A
I
L

V
A
L
U
E

C
R
E
A
T
I
O
N

P
R
O
C
E
S
S
Understanding our market
• Demand forecasting analytics
• Customer feedback, data and insight
• Customised product offering
• Work with suppliers to focus on sustainability
• Taking a lead on sustainable product attributes.
Sourcing product
• International offices
• Career pathways
• Quality management and ethical sourcing practices
• Build direct and strategic sourcing arrangements
• Sustainable materials and manufacturing processes.
Bringing product to market
• Efficient warehousing and distribution
• Jobs for skilled and unskilled labour
• Continuous improvement of systems and processes
• Leverage third-party expertise
• Minimise our impact on the environment.
Omni-channel sales environment
• Seamless customer experience through physical and digital channels
• Customer service training, flexible working and equal opportunities
• Product fulfilment focus
• Customer loyalty
• Environmental best practice.
Supporting New Zealand communities
• Universal reach to help widely throughout New Zealand
• Superior customer service
• Effective community engagement programmes
• Creating employment opportunities for
11,000 New Zealanders.
Our Environment
The consumption of resources to operate our business,
including transport, electricity, packaging and their impact
on our customers.
Financial Capital
The financial resources that enable the Group to execute
its business model and maintain financial resilience.
Our People
He aha te mea nui o te ao. He tāngata, he tāngata, he tāngata.
What is the most important thing in the world? It is people, it is
people, it is people. Our focus is to develop our people to be
the best they can be.
Our Relationships
Our stakeholders, their input to us and our contribution
to them, including our customers, suppliers, team members,
shareholders, government and community.
Our Networks
The strength and efficiency of our networks achieved through store
experience and digital customer channels, optimising our supply
change networks and data optimisation.
Our Expertise
Our expertise in, and understanding of, our customers’ needs
and wants, and our focus on systems, processes and innovation.
To build New Zealand's most
sustainable, convenient and
customer-first company.
DRAFT

34
The Warehouse Group
Risk & Materiality
Risk management
The Group’s enterprise risk management framework
seeks to ensure that there is an effective process in
place to manage risk across all our brands.
The Group acknowledges that risk management is
important to all aspects of our activities and is the
responsibility of every team member. Our leaders
have a particular responsibility to appraise their risk
environment, to put in place appropriate controls and
to monitor the effectiveness of those controls.
The Group’s risk appetite, which is set by the Board,
provides informed decision-making in the enterprise
risk management framework and delivers parameters
within which the business is expected to manage risk.
The Group’s enterprise risk management framework is
aligned with best practice and includes:
• A consistent, structured approach to identifying and
managing risk;
• Supporting the achievement of the Group’s strategic,
retail, financial and operational goals by managing
risks associated with each of these goals;
• Encouraging an open and transparent culture where
risk discussion and awareness is supported;
• Enabling better decision-making practices that
support risk-informed choices, prioritise actions and
distinguish between alternative courses of action;
and
• Encouraging an understanding of the risk
environment within which the Group operates.
Our risk management culture is based on a risk
management framework which utilises the three lines
of defence model. As the first line of defence, our
people have clear responsibilities for business risk
management including compliance with Group
policy and external requirements. The second line of
defence is managed by risk specialists throughout the
business who provide oversight to and compliance
with the first line of defence. The third line of defence
is the assurance provided by internal audit and other
professional service providers that report through to
the Audit and Risk Committee.
Implementing this risk management culture encourages
analysis and management of risk in all business
processes whereby risks are identified, assessed and
managed at both an enterprise level (top-down) and
business level (bottom-up).
The Group, as part of its ongoing risk governance, has
established an Enterprise Risk Management Committee
(ERMC) which comprises senior leaders from across the
Group. The committee meets monthly to ensure there
is a balanced view of risk and that critical risks
are understood, reviewed, appropriately managed
and reported.
Materiality
Materiality in the six capitals is different from financial
materiality in the financial statements. It is driven by
the risk appetite settings, and the specific outcomes
and strategies in each capital. A material improvement
in our environmental reduction outcomes, for example,
may be different this year compared to other years
depending on the starting position and default
trajectory of performance.
Building on an improvement may mean we have
a higher materiality for change than if we were
attempting to arrest a declining performance.
Materiality is therefore relative to every strategy and
metric in each capital and is used to filter what is
reported and what is not. The Integrated Report is not
the definitive or last word that the organisation has
to say on a given topic, it is the material performance
report against those elements in the capitals that we
are trying to influence or improve.
RISK & MATERIALITY
DRAFT DRAFT

35
Integrated Annual Report 2020
RISK & MATERIALITY
DRAFT

36
The Warehouse Group
OUR OUR NETWORKS
Our Networks
Key Initiatives
We further consolidated improvements in
our retail property portfolio this year by
increasing our stores-within-a-store, but store
consolidations did result in the closure of one
The Warehouse store and three Noel Leeming
stores. However, we increased our retail reach
with one new Warehouse Stationery store and
two new Torpedo7 stores.
We continue to drive interactive capabilities
which enhance customer support and invest in
mobile-first commerce to improve the mobile
app experiences. We began the process of
upgrading our websites for The Warehouse,
Warehouse Stationery and Noel Leeming with
a best of breed eCommerce platform with tight
interaction to our customer ecosystem across
marketing and customer service.
Our information system strategy continues to
focus on a systems modernisation programme
across the Group. Our Provisional Enterprise
Systems migration roadmap has been agreed
and modernisation of systems of record,
automation and customer engagement are
well underway.
Our stores and our online environments are
core elements in our customers’ shopping
experiences. By leveraging our physical and
digital assets together, we can better serve
our customers and build stronger relationships
with them. Our focus is on enhancing customer
acquisition and conversion, both in store and
online, while refining our shopping concepts
and brands to put our customers’ needs first.
Continuing to improve our omni-channel
experiences for our customers will make their
shopping journeys faster, easier and more
personalised to their specific needs.
From the product side, we have made
good progress embedding our integrated
critical path across the functional areas of
sourcing, quality, buying and planning. A
better integrated view from source to sale of
inventory and order management is key to
unlocking efficiencies and delivering improved
Actual Progress
Roadmap
to our goal
Key RisksMitigations
Focus AreaPriorities
FY19
(last year)
FY20
(this year)
FY20 ProgressFY21FY22+
Customer
facing channel
optimisation
Improve our store
experience and
productivity
• Co-located seven more Warehouse Stationery and The Warehouse stores,
bringing our total stores-within-a-store (SWAS) to 17 at the end of FY20
• 23% of capital expenditure allocated to asset maintenance (FY19: 24%)
• Store foot traffic for the Group increased 1.5% (excl. COVID-19 lockdown period
and vs the same period last year).
• Lack of well-positioned affordable retail space
• Accelerated customer migration to eCommerce puts
pressure on store footprint productivity
• Some landlords not responding to seismic upgrades
proactively.
• Re-purpose and re-utilise excess space within our large format
stores, e.g. converting Dunedin to a 'dark store'
• Expand and enhance Click & Collect experience
• Work with our landlords to ensure stores meet seismic and
lockdown risk requirements
• Maintain our store fitout.
Increase our digital
footprint and
productivity
• Online traffic for the Group increased 30.1%
1

• Click & Collect sales grew 103.2% across omni-channel brands, representing an
average of 39.4% of online sales
• Online conversion for the Group (excluding TheMarket.com) increased 1.8%
2
, driven
by 83.8% increase in Noel Leeming and 17.4% increase in Warehouse Stationery
• Launch of TheMarket.com with now over 2 million products from 3500 local and
international brands through over 650 merchants
• The Warehouse App sales grew 96%, accounting for 38% of The Warehouse
online sales
• Expanded the Group’s app footprint with launch of Noel Leeming and
TheMarket.com apps.
• Increasing customer demands driven by continued
growth in online shopping
• Local and international online retailers taking market
share across digital channels
• Disruption to business operations due to cyber or
Distributed Denial of Service (DDoS) attack.
• Improve the omni-channel experience by linking physical and
digital and scaling personalisation across channels
• Reinvent our Click & Collect experiences and scale TheMarket.com.
• Continue to enhance security controls designed to prevent, detect
or respond to an attack.
Optimise
supply chain
network
Increase our level of
direct sourcing
• 72% of all overseas purchases are transacted directly with exporters through one
of our three offshore offices.
• Challenge of investing in suppliers inside and outside
existing sourcing markets
• Risks of corruption, particularly in the quality and
merchandise teams.
• Established direct sourcing offices in China, India and Bangladesh
to enable senior leadership at source
• Regularly rotating team members through different merchandise
categories.
Reduce our cost to
serve and enhance
store deliveries
• Improved delivery to store Delivered In Full On Time (DIFOT) to 97.5% (FY19: 97.0%)
vs our target of 98%
• Store distribution cost to serve (from port to delivery to store) increased by 8.9%
(FY19: 11%), while customer fulfilment cost to serve (from fulfilment centre to
customer delivery) reduced by 8.7%.
• Significant increase in retail spend will challenge costs,
resources and distribution capabilities
• Peak period stress on underlying systems and
processes causes unscheduled outage
• COVID-19 community transmission leads to renewed
lockdown, operational constraints and trading reverts
to online only
• NZ Post's ability to meet delivery expectations.
• Collaborate across the supply chain to collectively reduce costs,
improve forecast accuracy, and reduce inventories
• Develop robust contingency, preparation and continuity plans for
peak trading volumes
• Unify commerce strategies to tailor shopping experiences around
individual preferences
• Build learnings from COVID-19 lockdown into Business Continuity
& Crisis Management plans, including flexibility of trading between
stores and online, and managing in store footprint
• Exploring alternative customer last-mile deliveries.
Grow our fulfilment
capability to support
customer choice
• After recovering from peak fulfilment challenges and COVID-19 lockdown
demand, we are now achieving an average online home delivery DIFOT of over
95% (FY19: 88%) for our online customers vs our target of 95%
• Responded to increased online demand by activating additional network capacity
to fulfil orders; leveraging numerous 'dark store' fulfilment centres, and enabling
contactless Click & Collect including piloting four drive through locations.
Data
optimisation
Establish single/
common instance of
master data across all
operational systems
• Installed cloud-based Master Data Management (MDM) suite to deliver
accurate operational data across the Group.
• Integration to legacy systems is more extensive
than envisaged and requires more resources than
anticipated.
• Adopt standard middleware integration architectures and tools to
ensure standardisation and reusability of middleware channels.
Integrate Master Data
Management into all
legacy systems and
enable effective change
management and control
• Established a Data Governance Board to ensure data standards are maintained
and exceptions are resolved.
• Integration costs to enable hybrid cloud-based
environments with cloud providers continues to
escalate (egress charges).
• Select a preferred cloud partner to minimise integration (egress)
charges.
Create a world-class omni-channel retail network that leverages physical, digital and infrastructure assets
to deliver customer needs and wants in an efficient and innovative way
DRAFT DRAFT

37
Integrated Annual Report 2020
quality, on-trend products and product
information from the best suppliers. Those
products will need to arrive on time through
complete alignment between our sourcing
teams, merchandise teams, shipping teams
and overseas factories. Network optimisation
is a key focus, as we drive efficiency and use
our core assets and capabilities in new ways to
drive value.
Significance
Retail is an unforgiving sector. If customers
cannot buy what they are looking for, they
have a number of other places they can turn
to. Our network is the critical link between
what we offer and what our customers
choose to spend their money on. If we fail to
understand what our customers want and how
they prefer to buy and receive purchases, we
are compromising their willingness to come
back to us. Our network enables us to bring
the right product to the right place at the right
time, at a cost that makes economic sense, and
in a way that serves our customers’ needs best.
Materiality
Online commerce has changed consumer
expectations in regard to their shopping
experiences. While physical store shopping
is still a significant consumer activity, online
shopping continues to grow. That means we
face greater competition from a broader range
of general and specialist retailers both here
and overseas. This represents a considerable
and ongoing material risk to our business
and one we intend to combat by investing
actively in our supply chain co-ordination,
data optimisation around each customer,
improved digital capabilities and attractive
stores that our customers enjoy shopping
in. In acknowledgement of the future need
to re-purpose or reformat our physical store
network, the Group has prioritised flexibility in
our store lease profile over tenure. Transport
is outsourced to partners except for in-home
delivery and installation teams.
Future focus areas
• Improve property footprint productivity by
working with insights and data to complete a
robust catchment analysis for all our brands,
supporting the SWAS programme and
objectively evaluating new format initiatives
• Improve our omni-channel experiences,
including our mobile apps, to better link
physical and digital channels powered by
the delivery of a Single Customer View (SCV)
enabling deeper customer understanding
• Achieve real-time inventory accuracy and
online 'Available to Sell', positively impacting
online performance, trade and customer
satisfaction.
Actual Progress
Roadmap
to our goal
Key RisksMitigations
Focus AreaPriorities
FY19
(last year)
FY20
(this year)
FY20 ProgressFY21FY22+
Customer
facing channel
optimisation
Improve our store
experience and
productivity
• Co-located seven more Warehouse Stationery and The Warehouse stores,
bringing our total stores-within-a-store (SWAS) to 17 at the end of FY20
• 23% of capital expenditure allocated to asset maintenance (FY19: 24%)
• Store foot traffic for the Group increased 1.5% (excl. COVID-19 lockdown period
and vs the same period last year).
• Lack of well-positioned affordable retail space
• Accelerated customer migration to eCommerce puts
pressure on store footprint productivity
• Some landlords not responding to seismic upgrades
proactively.
• Re-purpose and re-utilise excess space within our large format
stores, e.g. converting Dunedin to a 'dark store'
• Expand and enhance Click & Collect experience
• Work with our landlords to ensure stores meet seismic and
lockdown risk requirements
• Maintain our store fitout.
Increase our digital
footprint and
productivity
• Online traffic for the Group increased 30.1%
1

• Click & Collect sales grew 103.2% across omni-channel brands, representing an
average of 39.4% of online sales
• Online conversion for the Group (excluding TheMarket.com) increased 1.8%
2
, driven
by 83.8% increase in Noel Leeming and 17.4% increase in Warehouse Stationery
• Launch of TheMarket.com with now over 2 million products from 3500 local and
international brands through over 650 merchants
• The Warehouse App sales grew 96%, accounting for 38% of The Warehouse
online sales
• Expanded the Group’s app footprint with launch of Noel Leeming and
TheMarket.com apps.
• Increasing customer demands driven by continued
growth in online shopping
• Local and international online retailers taking market
share across digital channels
• Disruption to business operations due to cyber or
Distributed Denial of Service (DDoS) attack.
• Improve the omni-channel experience by linking physical and
digital and scaling personalisation across channels
• Reinvent our Click & Collect experiences and scale TheMarket.com.
• Continue to enhance security controls designed to prevent, detect
or respond to an attack.
Optimise
supply chain
network
Increase our level of
direct sourcing
• 72% of all overseas purchases are transacted directly with exporters through one
of our three offshore offices.
• Challenge of investing in suppliers inside and outside
existing sourcing markets
• Risks of corruption, particularly in the quality and
merchandise teams.
• Established direct sourcing offices in China, India and Bangladesh
to enable senior leadership at source
• Regularly rotating team members through different merchandise
categories.
Reduce our cost to
serve and enhance
store deliveries
• Improved delivery to store Delivered In Full On Time (DIFOT) to 97.5% (FY19: 97.0%)
vs our target of 98%
• Store distribution cost to serve (from port to delivery to store) increased by 8.9%
(FY19: 11%), while customer fulfilment cost to serve (from fulfilment centre to
customer delivery) reduced by 8.7%.
• Significant increase in retail spend will challenge costs,
resources and distribution capabilities
• Peak period stress on underlying systems and
processes causes unscheduled outage
• COVID-19 community transmission leads to renewed
lockdown, operational constraints and trading reverts
to online only
• NZ Post's ability to meet delivery expectations.
• Collaborate across the supply chain to collectively reduce costs,
improve forecast accuracy, and reduce inventories
• Develop robust contingency, preparation and continuity plans for
peak trading volumes
• Unify commerce strategies to tailor shopping experiences around
individual preferences
• Build learnings from COVID-19 lockdown into Business Continuity
& Crisis Management plans, including flexibility of trading between
stores and online, and managing in store footprint
• Exploring alternative customer last-mile deliveries.
Grow our fulfilment
capability to support
customer choice
• After recovering from peak fulfilment challenges and COVID-19 lockdown
demand, we are now achieving an average online home delivery DIFOT of over
95% (FY19: 88%) for our online customers vs our target of 95%
• Responded to increased online demand by activating additional network capacity
to fulfil orders; leveraging numerous 'dark store' fulfilment centres, and enabling
contactless Click & Collect including piloting four drive through locations.
Data
optimisation
Establish single/
common instance of
master data across all
operational systems
• Installed cloud-based Master Data Management (MDM) suite to deliver
accurate operational data across the Group.
• Integration to legacy systems is more extensive
than envisaged and requires more resources than
anticipated.
• Adopt standard middleware integration architectures and tools to
ensure standardisation and reusability of middleware channels.
Integrate Master Data
Management into all
legacy systems and
enable effective change
management and control
• Established a Data Governance Board to ensure data standards are maintained
and exceptions are resolved.
• Integration costs to enable hybrid cloud-based
environments with cloud providers continues to
escalate (egress charges).
• Select a preferred cloud partner to minimise integration (egress)
charges.
Year-on-year
incremental growth
Ongoing
improvement
100% Complete50% Complete
Early stages
of completion
75% CompleteOn plan
On plan
but at risk
Behind plan
Not currently
measured
1. Traffic session growth includes TheMarket.com online
traffic in FY20 which was not in operation in FY19.
2. Online conversion growth excludes TheMarket.com
due to not being in operation in FY19.
DRAFT

38
The Warehouse Group
Our People
Key Initiatives
In preparation for moving to an Agile way of working, we launched three Frontrunner
Agile Tribes in January 2020 which provided invaluable insights into how the Group
should operate in an Agile world. COVID-19 was challenging for all New Zealanders
including our own team members. Across the Group, we used Workplace by Facebook to
share daily COVID-19 updates including information on working from home, entertaining
kids during lockdown, managing mental wellbeing and finances, and providing online
learning opportunities.
During FY20 we focused on five priority practices for improving our organisational
culture: Customer Focus, Strategic Clarity, Challenging Leadership, Talent Development,
and Rewards & Recognition. In FY21 we will adopt a revised set of engagement drivers
based on survey feedback using our new eNPS tool.
In stores, we launched new Store Leadership Programmes aimed at developing our
established and emerging store leaders. We refreshed and launched our new online
Store Learning Pathways focused on the retail fundamentals including operational,
customer, leadership and health and safety pillars. In addition, we launched a new
online onboarding programme for all new employees across the Group.
From a health, safety and wellbeing perspective, we continued to address our critical
risks. A focus for FY20 was managing violent and aggressive behaviour incidents
against our team members in stores and we saw a successful reduction in incidents.
We also signed the NZ Retailers Against Racism pledge which commits to protecting
our frontline team members from racism, bigotry and physical and verbal abuse.
Significant work was undertaken preparing our Store Support Office to move to an Agile
way of working. We completely reviewed all our key people practices and processes
including our performance management processes, organisational structure, career
OUR OUR PEOPLE
Actual ProgressRoadmap to our goalKey RisksMitigations
Focus AreaPriorities
FY19
(last year)
FY20
(this year)
FY20 ProgressFY21FY22+
Health, safety
and wellbeing
Increase the number of
our team members who
go home safely at the
end of their workday
• Severity 1 events associated with our critical risks decreased by 38% (175 events
vs 281 in FY19)
• Severity 1 Frequency Rate (SV1FR) of 14.2 per million hours worked, a year-on-
year decrease of 37%
• Same-day injury reporting of 92% - exceeding our target of 85%
• Incidents Closed within 10 Days of 89% - exceeding our target of 85%
• Total Recordable Injuries for the year increased 13% (479 injuries vs 424 in FY19)
– the majority continue to be strains or sprains of a minor nature
• Total Recordable Injury Frequency Rate (TRIFR) of 30.6 (per million hours worked)
increased from 21.5 in FY19 against a target of <20 per million hours worked
• Increased use of technology to keep our people and customers safe in store
e.g. Aura.
• Team member interaction with moving equipment
• Exposure to violent and aggressive behaviour
• Storage of hazardous substances – volumes
consistently higher than compliance levels
• Handling of bulky, heavy or awkward goods by team
members
• Slips and trips associated with poor housekeeping
• COVID-19 outbreak across The Warehouse Group
network.
• Early intervention programme for pain and discomfort and
review of team member tasks in stores
• Further roll-out of violent and aggressive behaviour
mitigation controls to 30 high-risk sites
• Reporting process for compliance with regulatory standards
• Manual Handling – identify four tasks for process improvements
• Focus on stockroom housekeeping and minimising stock
in walkways and aisles
• Partnerships with NZ Police
• COVID-19 policy and implementation plans developed
and tested.
High
performance
workplace
Increase our
organisational health
and engagement
• Implemented Employee Net Promoter Score (eNPS)
• Launched a new digital onboarding programme
• Developed a new contribution model that will define future career
development, performance and remuneration.
• Team member and/or union dissatisfaction with
change and bargaining outcome
• Embedding Agile ways of working at Store
Support Office.
• Develop a clear employee relations strategy
• Build and nurture relationships with government
and external stakeholders
• Partnering with experts on Agile.
Lift our diversity and
inclusion
• Maintained Rainbow Tick and achieved Accessibility Tick accreditation
• Increased female senior leaders from 21 in FY19 to 25 in FY20
• Launched 'lean in circles' to counteract gender bias, navigate gender
dynamics, provide leadership development and peer-to-peer mentoring
for women and work towards gender equality.
• Challenge in building and/or buying required
talent capability
• Reduced performance due to lack of diversity
at the Group.
• Proactively develop a diverse talent pipeline
• Assign appropriate budget and technology to lift capability.
Future-ready
talent
Build our skills pipeline
and workforce planning
• Launched Store Leadership Programme
• Average of 41 days to fill roles vs our target of 60 days.
• Inadequate change management experience and
demonstrated resilience as we implement Agile
ways of working at scale
• Gaps in skilled or crucial experience due to
unexpected employee departures
• Loss of key talent.
• Invest in technology to reinvent productivity
• Define clear direction around expected leadership behaviours
and seek support from external experts
• Align communication clearly and consistently with vision and
strategy
• Succession planning in order to fill crucial roles.
Introduce continuous
learning and future-
ready learning
experiences
• Launched Store Learning Pathways
• Rolled out a Group leadership learning library, curated by S4K, focusing on micro
and macro factors affecting The Warehouse Group to help develop our leaders
1
• Launched Agile Academy
• Created and launched new Agile behaviours to enable a ‘learning,
fail fast and iterate’ culture.
• Change fatigue
• Training does not meet organisational
requirements and impedes speed of change.
• Support change readiness through leadership guidance
and by shifting mindsets
• Streamline engaging communication.
Build solutions to address productivity challenges and create a
dynamic organisation that has the highest performing, diverse
retail talent in New Zealand.
DRAFT DRAFT

39
Integrated Annual Report 2020
paths and remuneration model, with the aim of creating a culture
that is less hierarchical, more collaborative, and with teams that are
empowered to move at pace and make decisions.
Significance
Our team members are at the heart of our organisation. We believe
that by keeping them safe, enabling them to thrive in this fast-paced
environment and preparing them for the future workplace we will lift
engagement and achieve long-term business sustainability.
To do this, it is critical we focus on our people’s wellbeing and
everyday experience at work, adopt Agile to empower our people
and put our customers first, as well as invest in digital solutions to
leverage people data and insights. We are also prioritising attracting
top talent, building the skills of the future and shifting our culture to
be the best place to work. We continually develop and strengthen
our relationships with industry bodies and government to ensure we
remain part of the conversations, helping to shape the future of work
in New Zealand.
Materiality
True transformation requires culture change and a meaningful
shift to a new way of working. Combined with the current volatility,
uncertainty, complexity and ambiguity of the world, the amount
of change within the Group has meant we needed to find a more
dynamic, constant and mobile engagement tool that enables frequent
surveying feedback as well as ensuring a heightened focus on our
team members’ wellbeing and safety.
In addition, rapidly changing technology, shifting demographics and
a growing concern for climate outcomes are shaping the future of
work. As customer expectations continue to evolve, we need to make
significant improvements to accelerate performance and attract
future talent. The next few years will see deliberate change as we
prepare our culture and organisation to work in an Agile way and
embrace 'future of work' environments. This is a long-term undertaking
and the financial investment in technology, talent development, and
health, safety and wellbeing will be critical to empower, equip and
enable our people to bring to life the purpose and vision of the Group.
Future focus areas
• Embed an Agile way of working
• Implement and maintain productivity improvements
• Be the best place to work and rebuild trust and brand to attract and
retain tomorrow’s workforce
• Modernise learning and development to build an adaptive
workforce that can thrive in an Agile and fast-paced environment
• Connect digital solutions that function at scale, enabling
productivity and actionable insights
• Ensure an evolving capability to drive business performance and
support future ways of working.
1. S4K is an external curation service providing learning resources and
leadership insights https://s4k.com/
Actual ProgressRoadmap to our goalKey RisksMitigations
Focus AreaPriorities
FY19
(last year)
FY20
(this year)
FY20 ProgressFY21FY22+
Health, safety
and wellbeing
Increase the number of
our team members who
go home safely at the
end of their workday
• Severity 1 events associated with our critical risks decreased by 38% (175 events
vs 281 in FY19)
• Severity 1 Frequency Rate (SV1FR) of 14.2 per million hours worked, a year-on-
year decrease of 37%
• Same-day injury reporting of 92% - exceeding our target of 85%
• Incidents Closed within 10 Days of 89% - exceeding our target of 85%
• Total Recordable Injuries for the year increased 13% (479 injuries vs 424 in FY19)
– the majority continue to be strains or sprains of a minor nature
• Total Recordable Injury Frequency Rate (TRIFR) of 30.6 (per million hours worked)
increased from 21.5 in FY19 against a target of <20 per million hours worked
• Increased use of technology to keep our people and customers safe in store
e.g. Aura.
• Team member interaction with moving equipment
• Exposure to violent and aggressive behaviour
• Storage of hazardous substances – volumes
consistently higher than compliance levels
• Handling of bulky, heavy or awkward goods by team
members
• Slips and trips associated with poor housekeeping
• COVID-19 outbreak across The Warehouse Group
network.
• Early intervention programme for pain and discomfort and
review of team member tasks in stores
• Further roll-out of violent and aggressive behaviour
mitigation controls to 30 high-risk sites
• Reporting process for compliance with regulatory standards
• Manual Handling – identify four tasks for process improvements
• Focus on stockroom housekeeping and minimising stock
in walkways and aisles
• Partnerships with NZ Police
• COVID-19 policy and implementation plans developed
and tested.
High
performance
workplace
Increase our
organisational health
and engagement
• Implemented Employee Net Promoter Score (eNPS)
• Launched a new digital onboarding programme
• Developed a new contribution model that will define future career
development, performance and remuneration.
• Team member and/or union dissatisfaction with
change and bargaining outcome
• Embedding Agile ways of working at Store
Support Office.
• Develop a clear employee relations strategy
• Build and nurture relationships with government
and external stakeholders
• Partnering with experts on Agile.
Lift our diversity and
inclusion
• Maintained Rainbow Tick and achieved Accessibility Tick accreditation
• Increased female senior leaders from 21 in FY19 to 25 in FY20
• Launched 'lean in circles' to counteract gender bias, navigate gender
dynamics, provide leadership development and peer-to-peer mentoring
for women and work towards gender equality.
• Challenge in building and/or buying required
talent capability
• Reduced performance due to lack of diversity
at the Group.
• Proactively develop a diverse talent pipeline
• Assign appropriate budget and technology to lift capability.
Future-ready
talent
Build our skills pipeline
and workforce planning
• Launched Store Leadership Programme
• Average of 41 days to fill roles vs our target of 60 days.
• Inadequate change management experience and
demonstrated resilience as we implement Agile
ways of working at scale
• Gaps in skilled or crucial experience due to
unexpected employee departures
• Loss of key talent.
• Invest in technology to reinvent productivity
• Define clear direction around expected leadership behaviours
and seek support from external experts
• Align communication clearly and consistently with vision and
strategy
• Succession planning in order to fill crucial roles.
Introduce continuous
learning and future-
ready learning
experiences
• Launched Store Learning Pathways
• Rolled out a Group leadership learning library, curated by S4K, focusing on micro
and macro factors affecting The Warehouse Group to help develop our leaders
1
• Launched Agile Academy
• Created and launched new Agile behaviours to enable a ‘learning,
fail fast and iterate’ culture.
• Change fatigue
• Training does not meet organisational
requirements and impedes speed of change.
• Support change readiness through leadership guidance
and by shifting mindsets
• Streamline engaging communication.
Maintain Diversity
and Inclusion
accreditations
eNPS > 30
TRIFR <20
million hours
worked
SV1FR > 10%
year-on-year
decrease
Maintain Diversity and
Inclusion accreditations
Gender diversity is
at best practice
across TWG
eNPS > 40
At completion of
FY21 the HS&W
roadmap will be
reviewed and
new metrics set
100% Complete50% Complete
Early stages
of completion
75% CompleteOn plan
On plan
but at risk
Behind plan
Not currently
measured
DRAFT