FY22Q2 Trading Update

ASX AND NZX ANNOUNCEMENT

MICHAEL HILL DELIVERS RECORD CHRISTMAS

Second Quarter Trading Update

14 January 2022
Michael Hill International Limited (ASX/NZX: MHJ) is pleased to provide a business update, together with its second
quarter trading update for the period ended 26 December 2021.
KEY POINTS
• Significant EBIT growth – The Company expects FY22H1 Group comparable EBIT of $49m to $53m (FY21H1: $44.6m).
• Strong sales growth in all markets and channels – For the quarter, Group all store sales were up 9.8% despite 2,381
lost store trading days (FY21Q2: 1,551), and same store sales were up 9.6% against prior year.
• Continued margin expansion – Brand elevation and operational initiatives underpinned margin growth of 200 to
300 bps in all markets and channels against FY21Q2.
• Sustained growth in digital – Further deployment of omni-channel initiatives delivered an increase in sales and
margin for the quarter, resulting in a 28% increase in digital sales. Year to date, digital represented 8.2% of total
sales (FY21: 6.3%).
• Strong balance sheet maintained – Disciplined inventory management, robust cost controls and strong sales led to
a healthy cash position at the end of the quarter, as the Company continues to review capital management strategies
and explore new growth opportunities.

Retail Segment Update

During the quarter, there were no store openings or closures and the network remained at 285 stores (FY21Q2: 289).
In relation to performance by market and temporary store closures:
Australia: For the quarter, same store sales were up 5.2% and all store sales were up 2.2%, even with 38 NSW,
29 VIC and 4 ACT stores temporarily closed for between two and five weeks. This resulted in 1,574 lost store
trading days for the quarter (FY21Q2: 874). All 150 Australian stores were trading at the end of the quarter
(FY21Q2: 154).
New Zealand: For the quarter, same store sales were up 13.4% and all store sales were up 2.4%. Mandated
lockdowns across greater Auckland and Hamilton for up to six weeks during the quarter resulted in 805 lost
store trading days. All 49 New Zealand stores were trading at the end of the quarter (FY21Q2: 49).
Canada: For the quarter, same store sales were up 11.2% and all store sales were up 28.1%. While there were
limited impacts from COVID during the quarter (FY21Q2: 677 lost store trading days), Western Canada was
impacted by severe weather and flooding across end of November and early December. All 86 stores were
trading at the end of the quarter (FY21Q2: 40 of 86 trading).
Omni-channel capabilities were enhanced during the quarter with the successful deployment of “click and collect” in all
markets, as the Company continues its customer-led digital transformation journey.

Commenting on the result, Managing Director and CEO of Michael Hill International Limited, Daniel Bracken said:
“The successful planning and execution of Christmas underpinned this outstanding result – I couldn’t be prouder of the
entire team. From the highly engaging and emotive marketing campaign, to the deployment of new digital initiatives,
excellence in supply chain and inventory management and our Christmas recruitment strategy, all came together to
deliver Michael Hill’s best Q2 in the Company’s history.

“I’m particularly pleased with the result we have delivered considering the significant store closures due to Delta across
NSW, VIC and Auckland during October and early November. And as we now enter 2022, the new Omicron variant is
bringing new challenges across our Australian and Canadian network, both in terms of impacts on our team members
and consumer confidence and behaviours.

“This strong performance now marks our tenth quarter of positive same store sales growth since FY19Q3 and further
demonstrates the success of the continued transformation of the Michael Hill brand. This result also demonstrates our
strategic initiatives are driving both sales and margin growth, which will be further enhanced by our capital management
strategy.”


SEGMENT BREAKDOWN
Revenue for retail operations for FY22Q2 (thirteen week trading period ended 26 December 2021):


$m $m

The following figures are in Australian dollars

Last Year This Year
% Var
Total same stores AUD 186.4 204.2 9.6%
Total all stores AUD 198.0 217.5 9.8%



Same stores figures in local currency



Australia same stores AUD 105.3 110.8 5.2%
New Zealand same stores NZD 38.3 43.4 13.4%
Canada same stores CAD 42.9 47.6 11.2%



All stores figures in local currency



Australia all stores AUD 110.2 112.6 2.2%
New Zealand all stores NZD 43.9 44.9 2.4%
Canada all stores CAD 44.2 56.7 28.1%



Exchange rates used for FY22Q2:
New Zealand 1.06 1.05
Canada 0.95 0.92


Revenue for retail operations for FY22H1 (twenty-six week trading period ended 26 December 2021):


$m $m

The following figures are in Australian dollars

Last Year This Year
% Var
Total same stores AUD 275.0 306.5 11.4%
Total all stores AUD 317.5 325.1 2.4%



Same store figures in local currency



Australia same stores AUD 146.7 156.0 6.4%
New Zealand same stores NZD 56.2 64.5 14.8%
Canada same stores CAD 71.9 81.9 13.8%



All stores figures in local currency



Australia all stores AUD 175.1 161.4 -7.8%
New Zealand all stores NZD 69.3 67.0 -3.3%
Canada all stores CAD 73.7 91.7 24.4%



Exchange rates used for FY22H1:
New Zealand 1.07 1.05
Canada 0.95 0.92

Same store sales reflect sales through store and online channels on a comparable trading day basis and a proportional allocation of
Professional Care Plan (PCP) revenue and accounting adjustments, and are unaudited. Same store sales do not include permanent or
temporary store closures on a same trading day basis.

The above figures are prior to final accounting adjustments, and are unaudited. All stores figures stated above include the PCP
revenue recognised during the period and sales through our store and online channels. The PCP income recognition pattern is based
on existing estimates and is subject to ongoing management review and adjusted at half-year/year-end as required.

Comparable EBIT is unaudited, pre-AASB16, pre-IFRIC SaaS-related adjustments, and with normalisations.



This announcement is authorised for release by the Board.

ENDS




For more information, please contact:


Investors:
Andrew Lowe
CFO & Company Secretary
+61 7 3114 3500
andrew.lowe@michaelhill.com.au


Investors:
Anthea Noble
Head of Investor Relations
+61 438 770 704
anthea.noble@michaelhill.com.au

Media:
Mark Rudder
+61 411 362 362



ABOUT MICHAEL HILL INTERNATIONAL LIMITED

Michael Hill International was founded by Sir Michael Hill in 1979 when he opened his first jewellery store in Whangarei,
New Zealand. The Group currently has 285 stores globally across Australia, New Zealand and Canada. The Group’s global
headquarters, including its wholesale and manufacturing divisions, are located in Brisbane, Australia. The Company is
listed on the ASX (ASX:MHJ) and the NZX (NZX:MHJ).

www.investor.michaelhill.com

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

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

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

Should one or more of these risks or uncertainties materialise, or should any underlying assumptions prove to be incorrect, the
Company’s actual financial condition, cash flows or results of operations could differ materially from that described herein as
anticipated, believed, estimated or expected. Accordingly, you are cautioned not to place undue reliance on any forward-looking
statements, particularly in light of the current economic climate and the significant volatility, uncertainty and disruption caused by
the COVID-19 pandemic.

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


Michael Hill International Limited ABN 25 610 937 598
7 Smallwood Place, Murarrie, QLD 4172