Chair and Group CEO’s Presentation 2020 Annual Meeting

Helping Kiwis live
better every day
The Warehouse Group
2020 Annual Shareholders
Meeting
27 November 2020

Joan Withers

3
BOARD OF DIRECTORS
Joan Withers
Chair & Independent
Non-Executive Director
Keith Smith
Deputy Chair & Independent
Non-Executive Director
Julia Raue
Independent
Non-Executive Director
Robbie Tindall
Non-Executive Director
(Alternate to Sir Stephen Tindall)
John Journee
Independent
Non-Executive Director
Anthony Balfour
Independent
Non-Executive Director
Will Easton
Independent
Non-Executive Director
Renee Mateparae
Future Director
Dean Hamilton
Independent
Non-Executive Director

4
WELCOME Joan Withers
CHAIR ADDRESS Joan Withers
CEO REVIEW Nick Grayston
BUSINESS OF MEETINGJoan Withers
•Election of Directors (Resolution 1 & 2)
•Auditor Fees (Resolution 3)
•General Business
Q&A
REFRESHMENTS
AGENDA

•When the Question function is
available, the Q&A icon will appear at
the top of the screen.
•To send in a question, simply click in
the ‘Ask a question’ box, type your
question and the press the send arrow
•Your question will be sent
immediately for review
QUESTION PROCESS
5

•When the poll is open, the vote will be
accessible by selecting the voting icon
at the top of the screen
•To vote simply select the direction in
which you would like to cast your vote,
the selected option will change colour.
•There is no submit or send button,
your selection is automatically
recorded.
VOTING PROCESS
6

7
WELCOME Joan Withers
CHAIR ADDRESS Joan Withers
CEO REVIEW Nick Grayston
BUSINESS OF MEETINGJoan Withers
•Election of Directors (Resolution 1 & 2)
•Auditor Fees (Resolution 3)
•General Business
Q&A
REFRESHMENTS
AGENDA

CHAIR
Joan Withers
8

9
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 NPAT is a non-GAAP measure.A reconciliation between Adjusted and Statutory NPAT is located on slide 22 of the 2020 Annual Results presentation.
4.Net cash now in the range of $80m -$100m.
5.Excluding weeks impacted by store closures during COVID-19 lockdown periods.
$80.7M
Adjusted NPAT
(3)
9.0%
on last year
up
2020 ANNUAL RESULTS
$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

10
HIGHLIGHTS
Deloitte 200 awards –
Most improved performance
Second year of
Integrated Reporting
Community
donations
$3.9 million
Fully supported
NZ COVID-19
response efforts
Maintained carbonzero Toitu
certified status

11
1.25M
online orders placed
during Alert Levels 4-2
105
Stores operated as fulfilment
centres
(1)
circa11,000
Employees received full wages and salaries
7 weeks
1.30 The Warehouse and Warehouse Stationery Stores and 75 Noel Leeming Stores.
STORE CLOSURES AND IMPACT
•The announcement made on Tuesday 24 March that
The Warehouse stores would remain open was based on
discussion with government officials and Ministers and
legal advice
•On Thursday 26 March, we announced that The
Warehouse stores would be closed for the Level 4
lockdown period
•Subsequent enquiry by the NZX found no case for
further investigation
•We worked with Government and MBIE to ensure
essential products were available
•The Government wage subsidies were invaluable to the
Group and enabled us to pay circa 11,000 employees
their full wage and salaries during the lockdown period
when our stores were closed.

Group sales down 67%
during period of store
closures ($265m vs LY)
12
•Rent relief $8.2m
•Suspension of STI
•Directors’ fee reduction
•Wage subsidy of $67.8m (equated to 55% of labour cost)
Black Friday fell into
the first week of
December in 2019
SALES TREND

•Due to the uncertainly around COVID-19, the Board made the decision in March to
cancel the previously declared interim dividend
•Given the net loss excluding the wage subsidy received, continued retail trading
uncertainty, and potential further COVID-19 outbreaks and store closures, the Board
also made the decision to not declare a final 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
•We are also taking this time before our interim result to review our dividend policy.
Our review is to ensure the policy is in line with our strategic objectives and market
best practice.
13
DIVIDEND

14
GOVERNA

Nick Grayston
CEO

FY2017FY2018FY2019FY2020
FY2021 and
beyond>>>
16
RISE
Systems and processes
Digital future / Customer experience
EDLP
Creation of COEs
TRANSFORMATION
Agile ways of working

17
OF WORKING

18
We start everything by focusing on our
customers. We wrap our customer
experiences around three unified enablers:
our people, our platforms, our data.
ECOSYSTEM

19
PEOPLE
•Team wellbeing focus through COVID-19
•Over 11,000 employees
•Retail Wage commitment –$21.15 for The
Warehouse Team with a year’s service
•25% increase between 2017 and 2020 average
wage for The Warehouse team members
•Pay equity across The Warehouse and
Warehouse Stationery

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.

$191.0m
6.0%
Torpedo7
Group
21
$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
2
$116.8m
Total Group
1.Excluding the impact of NZ IFRS 16
2.Includes TheMarketand Other Group operations and eliminations.
($3.0m)
(0.1%)
Other
2
FY20 Retail Sales
$3,172.8M
SUMMARY
FY20 Retail Operating Profit
1

22
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
38%
App Sales % of total
The Warehouse Online Sales
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.
METRICS

23
* Includes 18 store-within-a-store integrations. 8 integrations implemented in FY20.
+0.1%
(1)
Retail Sales
+25%
Online Sales Growth
+65%
Growth in Mobile Web-based
Sales
8.5%
Retail Operating Profit Margin
(230 basis point improvement)
+76%
Growth in Click & Collect
Fulfilment
1.On a 52 week like-for-like basis, FY20 Warehouse Stationary Sales decreased 1.6% compared
to FY19.
+7
Store within a stores (WSL and
TWL stores)
METRICS

For the period ended 2 August 2020
24
+9.2%
(1)
Retail Sales
+145%
Online Sales Growth
+19%
Growth in Service Sales
+196%
Growth in Mobile Web-based
Sales
4.6%
Retail Operating Profit Margin
(50 basis point improvement)
+130%
Growth in Click & Collect
Fulfilment
1.On a 52 week like-for-like basis, FY20 Noel Leeming Sales increased 7.1% compared to FY19.
METRICS

25
-7.7%
Retail Operating Profit Margin
(360 basis point decline)
+10.7%
(1)
Retail Sales
+72%
Online Sales Growth
(2)
2
Net new stores opened
(4 new stores, 2 closures)
+77%
Growth in Mobile Web-based
Sales
(2)
+127%
Growth in Click & Collect
Fulfilment
(2)
1.On a 52 week like-for-like basis, FY20 Torpedo7 Sales increased 9.2% compared to FY19.
2.Excludes 1-Day.
METRICS

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
26

27
33%
Stores,
Distribution Centres &
other property
51%
Information
Systems and Digital
Initiatives
16%
Logistics
FY20
Capex Spend
$63.1M
•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
•Going forward we expect capex to return to
the previously issued guidance of between
$100m and $120m per annum
•Future capex investment priorities include:
•Master Data Management
•E-commerce and online capabilities
•Infrastructure and distribution
•Enterprise Resource Planning
EXPENDITURE

28
PERFORMANCE
UPDATE
+2.9%
Retail Sales growth
+8.1%
Same Store Sales growth
1
1.The same store sales percentage represents annual store sales growth for comparable stores (same stores).
W here the Groups physical stores are unable to open to the public due to COVID-19 Alert Levels, the
impacted stores are treated as changed stores for the period of the lockdown and excluded from same store
sales calculations. The same store sales calculations have been adjusted to exclude Auckland stores which
were closed as a result of a 19 day COVID-19 lockdown period which commenced on 12 August 2020 and
ended on 30 August 2020.
-1.9%
Retail Sales growth
+0.5%
Same Store Sales growth
1
+11.5%
Retail Sales growth
+9.1%
Same Store Sales growth
1
+41.8%
Retail Sales growth
+39.2%
Same Store Sales growth
1

29
Diverted77%of
operational waste from landfills
products have sustainable attributes or
packaging accounting for over
over7,000
$100Mannual sales
Raised$3.9Mfor New Zealand
charities and communities in FY20

30

31
UPDATE

BUSIN
Joan Withers

33
FAREWELL

34
FAREWELL
VIDEO LINK OF SIR STEPHEN’S
FAREWELL ADDRESS TO THE
MEETING

35

ELECTION OF
ROBERT TINDALL
36
Resolution 1
For186,347,08599.00%
Against152,7220.08%
Discretionary1,723,5140.92%
Abstain25,399N/A
Proxy votes received in respect of this resolution:

37
RE-ELECTION OF
DEAN HAMILTON
Resolution 2
For186,443,07999.06%
Against76,7540.04%
Discretionary1,688,2770.90%
Abstain40,611N/A
Proxy votes received in respect of this resolution:

That the Directors are authorised to fix the fees and expenses of PricewaterhouseCoopers
as auditors for the ensuing year.
38
AUDITOR FEES
Resolution 3
For186,302,64798.99%
Against250,0840.13%
Discretionary1,652,4090.88%
Abstain43,580N/A
Proxy votes received in respect of this resolution:

To cast your vote please tick one box either
for, against or abstain alongside each
resolution on the voting paper.
To vote online, select the voting icon
at the top of the screen.
Simply select the direction in which you
would like to cast your vote, the selected
option will change colour. There is no
submit or send button. Your selection is
automatically recorded.
39
PROCEDURES
Discretionary votes held by Directors
Resolution 1174,975
Resolution 2185,301
Resolution 3147,870

QUESTIONS

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 consolidated 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.
41
DISCLAIMER