Addresses to Annual Meeting 18 May 2023

18 May 2023
Kia ora, tena koutou, tena koutou, tena koutou katoa

It is a pleasure to be with you to reflect on the year that was and to set the scene for the
immediate future.

As a retail group with a large footprint in New Zealand across product categories, geographies
and trading platforms, and with many thousands of individual customer relationships Briscoe
Group is routinely exposed to developments and trends that affect the social setting and our
trading environment.

In recent years we have seen shifts in markets, customer preferences, competitive influences,
technology and other factors and then the effects have been compounded by the additional
disruption of a one-in-100-years pandemic.

The general rule has been that challenges evolve and arrive, we address them, and then there
But this is not to
suggest any sense of complacency, but rather an excitement and disciplined rigour in how the
team responds to new challenges.

It is reasonable to say that our business model, and just about every aspect of our operations,
have been thoroughly stress-tested by the circumstances of the past few years; and that our
results have shown them to be robust, resilient and adaptable.

Our model is founded on being the retailer of choice in the homeware and sporting goods
categories, on being easy for our customers to do business with, and on providing a compelling
product and service offering with a suite of globally renowned product brands that we continually
update and refresh.

We have a deliberate and proven advantage in being in specialised streams of retailing - not a
departmental store model which is struggling globally. More critically our two streams,
Homewares and Sporting Goods, continue to grow in relevance in all of our day-to-day lives.
-to-day fitness, leisure, wellbeing and
applies to us all from the very young to the elderly. Our homes and how they reflect our lifestyle
and personalities are at the core of our Briscoes Homeware offering.

Complementing that, we have worked with purpose in recent years to build our capability in
strategic foresight and planning; to optimise our retail platform; to grow knowledge, resilience and
flexibility in our operations; and to nurture the talent and engagement of our people. All of these
qualities are now core strengths of the business and are factors in our continuing strong
performance. It would be difficult to overstate the importance of this long-term work programme
and its influence on our current and future performance.

The 2023 financial year provided a clear reflection of the benefits to date. The changes in retail
were ongoing and the disruptions from the pandemic lingered. Add in a deterioration in economic
factors, with consequences for consumer confidence and retail spending, and you have a sense
of the environment our team was working in. To pro
a significant achievement.
I want to acknowledge our senior management team for providing the leadership and
engagement at the heart of this performance. It is no small achievement to maintain performance
and profits at the high level of recent years in an environment that continues to throw up new

challenges and pitfalls and meanwhile to retain focus on the fundamentals of the business and
the strategies for future success.

We will be provided with dedicated reviews financial performance, strategic
development programme, sustainability programme and a couple of more specialised initiatives
later in the meeting.

Meanwhile I want to s of all team members. All have
a part to play. We remain very focused on the interests, welfare and development aspirations of
our people.

That concludes my initial remarks. At this stage in the meeting, I would like to introduce our Chief
s for the 2023 year.
Geoff, over to you.

Thanks Geoff.

As Geoff mentioned, the performance of the Company and the strength of its financial position
enabled the Board to increase total dividends to 28 cents per share, up 3.7 percent. The
percent of Net Profit After Tax when
calculated on a full-year basis.

Just as we are pleased to be in a position to reward shareholders for their commitment to the
company, we recognise the importance of providing appropriate compensation for the efforts and
commitment of our senior management team. Clearly, this is a pillar
performance, and thus its ability to deliver value to shareholders and other stakeholders.
Designated senior executives participate in a Long-Term Incentive Scheme that provides
appropriately priced, equity-based remuneration crystallising only on delivery of increased
shareholder value. This is in the form of Performance Rights that vest after three years subject to
the growth targets in regard to Total Shareholder Returns and
Earnings Per Share. One tranche of Performance Rights was issued under this scheme during
the 2023 financial year .
There is more information on this and other incentive plans in the latest Annual Report. We
continue to monitor the relevance of equity-based remuneration schemes and compare our
model with others in the marketplace.


Corporate Governance. I
think you will have noticed that Briscoe Group has long been a proponent of high standards in
this area, including commitment to best practice, adherence to codes and the retention of a
strong focus on relevant issues and developments.

A key feature of good governance is for boards to challenge themselves consistently to ensure
the highest levels of service to the companies they represent. We are confident that the Briscoe
Group Board meets this obligation and has an excellent balance of the attributes required to
meet the future needs of the business; and that the Board and Executive teams are working
effectively together and aligned around the business objectives.

Board composition and the importance of directors contributing complementary and diverse skills
are important issues taken very seriously by your board. We are a smaller board than many with
only five directors including our Executive Managing Director who is also a majority shareholder.
It's also appropriate for me to note that as chairman I've been in this role for 22 years.

However, perhaps this makes us more stringent in discussing openly the importance of
independence and the assessment of individual and collective performance. As you know later in
the meeting we will be seeking your approval for the reappointment of both Tony Batterton &
Andy Coupe, both of whom chair our board committees.

Tony rigorously chairs the Audit and Risk Committee and brings a wealth of experience as a
company director through his investment interests in relation to both his current company,

Evergreen, and previously with Direct Capital. Tony is astute and considered and a most
valuable Board member.

Andy is noted for his comprehensive governance and regulatory experience after a career in
investment banking and holding a qualification in Law. Andy's leadership as Chair of our HR
Committee has been exemplary and added much to our ongoing development and rigour in this
area. Andy too is always prepared to challenge views with constructive and insightful opinions.

Mark Callaghan, our third Independent Director, brings to our table extensive FMCG experience
both here in NZ and offshore, as both an executive and as a director. Mark's skills are diverse
and broad-ranging and combined with his inquisitive and supportive style also plays a valuable
role.

Rod's experience needs little additional explanation, but I know I speak for all of us when I
emphasise Rod's ongoing commitment to high standards of governance and commitment to
independence. There is obviously a cognisance of Rod's shareholding but his commitment to all
shareholders is in total alignment with ours.

Rod's energy and quite extraordinary knowledge of retail and his ongoing commitment to our
Company's growth and success is exemplary.

And for myself, the commitment that I made last year when I stood for re-election remains as to
my belief that I continue to be a valuable contributor to our Board, maintain my independence
and provide the appropriate leadership to ensure the ongoing performance of the Board.
A small team but insightful, prepared to challenge views but "play as a team" both as directors
but also with our executive team.

Rod's executive team are unquestionably the most cohesive and complementary that I have
observed, and I know that is a view shared by all of us as Independent Directors.

In recent years, our approach to good governance has produced a broadening in perspective
with a strong focus on Sustainability in particular, on environmental and social sustainability
supplementing the more traditional and continuing focus on financial and legal matters.

We have had a range of programmes and activities in place for many years for example, the
continuing development and strengthening of employee education and training opportunities and
our long-term support for Cure Kids and other causes; but there is an expansion. Your Board
sees this as a very necessary and appropriate response to our trading environment and social
conditions, and one that identifies opportunity just as readily as it does issues to work on and
improve.

We recognise that sustainability is good business practice, enabling us to meet customer and
regulatory expectations, mitigate future risks, reduce costs, enhance our brand and reputation,
and build a more resilient and adaptable business.

There is a great deal more information on this in the Annual Report and, as I have mentioned,
wehear more about some of these initiatives later this morning.

As indicated already, the Board is very pleased with the state of the Company and its operational
performance.

We can be confident that the business is well positioned to continue to perform well. It retains the
innate capabilities needed to do so strong and consistent team performance, the strength of its
brands and its operating model, supplemented by strategic and operational initiatives that
continue to deliver gains in a multitude of ways.

Having said that, there is no doubt that we have entered a phase in which the conditions are not
as favourable to growth, and this will have an impact on trading through the current year.
On that note, I invite Rod to present his review of operations in the 2023 financial year and his
view of the year ahead.

18 May 2023
Thanks Rosanne and good morning everyone.
This is the
no lockdowns W highlights this morning but probably worth
mentioning that even though there may have been no lockdowns, think it was still what I


Certainly not Covid-free with the outbreak of Omicron early in the financial year across February
and March 2022 and then as the year progressed, deteriorating economic factors straining
consum

Rising interest rates which saw the OCR climb all year from 1.0% back in February 2022 to
4.25% by the end of our financial year, and we know since then up further, to 5.25% announced
in April this year. Of course, this then leading to the subsequent inevitable rise in mortgage rates
with borrowers coming off 2 and 3% rates now facing 5-6% and maybe even higher.
The rising cost of living and certainly inflation at levels not seen since the 1990s has hit Kiwis
pretty hard. Widely reported surge in prices for food, housing and transport all constricting
consumer spend across retail sectors.
The relatively weaker New Zealand dollar last year, compared to the year before, also made the
costs of importing products into New Zealand a lot more expensive.
So, .
the high-performance that made up the
result for the year ended January 2023.
Sales for the year of $786 million, an increase of 5.6% on the $744 million recorded for the
previous year.
The year actually started pretty timidly for us on the back of the outbreak of Omicron, which
severely impacted foot traffic to malls and stores and while we knew there would be a switch to
at transfer never quite offsets the sales
shortfall from stores. So, quarter one returned a positive, albeit pretty modest increase of 1.8%

Quarter 2 saw the start, I think, of more of an acceptance in the workplace (and probably also
general day-to-day life) that Covid was here to stay and while establishing protocols around
work-place best practice was essential,
everyday activity. So, growth of +3.5% recorded for quarter 2, which actually,
unhappy about. Firstly, because we were seeing a gradual improvement in growth across each of
the 3 months of that quarter but also too, in light of deteriorating economic conditions which were
becoming more evident, particularly through July 2022, as cost of living increases, including food
and fuel price inflation, increasing interest rates and stagnating house prises started to take hold.

So halfway through the year sales up by +2.7%. And in terms of how that translated into bottom-
line profit? Js record half-year to $45.6 million from
$47.5 million but for the reasons already mentioned actually, we were ok with this half year
result. We also knew how disjointed trading had been in previous years and this meant that the
way profit fell across the years moving forward would probably be quite different to what we had
experienced during the previous 2 or 3 fragmented years.
A great example of this was our expectations around the second half performance, and
particularly the opportunity we saw for quarter 3. If you remember it was the 3
rd
quarter of the
previous year which had seen the second major round of enforced lockdowns especially in
Auckland which resulted in Auckland stores being closed from mid-August through to early
November 2021.
We knew quarter 3 represented the best opportunity to secure a great full-year result. And by
posting a 26.8% increase in sales, that absolutely set a great foundation for us to be able to do
that with the final quarter across November, December and January. We also knew that that final
quarter would be extremely tough trading-wise as the economic conditions continued to head
steadily south in relation to the retail environment and consumer confidence but also too there
had been the inevitable surge in sales, in the previous year, as Auckland stores, in particular,
came out of lockdown.
The result?
th
quarter but more importantly, for the 2
nd
half
- an 8.3% increaseand as we saw earlier, the overall 5.6% increase to $786 million for the full-
year sales.

Last year we looked at the impact of what 2 years of varying degrees of lockdowns had done to
step-change the uptake of online shopping. A huge surge, as consumers were effectively forced
to become more familiar and trust that online shopping was a viable alternative. So, in a more

Actually, a plateauing as we expected but probably at a slightly higher level than we had
anticipated. Year ended January 2023 finished with year-to-date online mix at just on 19% and a
continuation of which we seeing in this current year as well.
So, a big step-change for online and one which looks likely to remain. ertainly a crucial part
of our business now generating around $150 million in sales, and a really exciting area which we
continue to invest in, with both front and back-end initiatives.
One of the most challenging areas for retailers at the moment is the management of gross profit.
Most retailers saw margins expand across the 2 years of lockdowns and we were no exception,
although our significant 633 basis point increase across those 2 years was as much about our
own internal initiatives, the work done with KPMG, and how we construct and analyse
promotional activity - as it was about riding the Covid wave.
However, without question, margin pressure is evident - and has been for some time as the
impacts of the economic downturn, as well as increased costs in relation to the supply of goods is
being felt. Our goal is to protect as much of those gains as possible. Last year Gross profit closed
at 44.0%, down 174 basis points from the high of 45.8%.
hallenge ahead for this year in relation to gross profit either. As
per our most recent sales release (for the first quarter) we currently looking for this year to
show that the Group can protect around half of that 633 basis points gained during the 2 years
ended January 2021 and 2022.

Ls with them.
Our focus on costs is as critical and as acute as ever with cost pressures evident across every
part of the business. Distribution, labour and security just to name a few. A relatively weaker New
in relation to product cost. The labour
market remains tight and for the second successive year we increased store wages by 7%.
Across a 3-year window our lowest hourly rate has increased 22%.
The widely reported explosion in crime against retailers is a real concern across the entire retail
sector. Over the last two years the Group has suffered around 7 ram raids and at least another
12 significant break-ins causing substantial property damage and stock loss. Theres also an
ever-increasing level of abuse and aggressive behaviour our team have to endure. Last year we
booked an additional $1million of security expenses as a result of this increased level of criminal
activity. This is before we even consider the at least $3 million worth of product that finds its way
out of the store without being paid for every year.
In response, we have increased our loss prevention capital investment and accelerated the roll
out of initiatives such as license plate recognition, concrete bench bollards, in-store duress
buttons, monitored external cameras and upgraded internal security camera systems to name a
few. Additional initiatives such as Facial Recognition even though controversial, will become
increasingly sort after as retailers look to protect their businesses as best they can. And when I
say protect, foremost to our team who have to face this behaviour day-in
day-out, their safety and wellbeing is obviously paramount.
Its probably worth briefly outlining how the Group manages risk overall. We have a formal
process for identifying and managing key risks which ultimately falls under the umbrella of the
, but effectively day-to-day risk identification and management
is via a separate management Risk Committee. This process reviews and updates a formal risk
matrix. Significant risks are discussed at Board meetings and actions needed to mitigate them
are identified and delivered. There is more information in the Annual Report, and I would certainly
encourage you to review that.
The balance sheet remains very strong. There is a healthy cash position which enabled
the Board to increase both the interim and final dividends in relation to last year. We continue to
invest in the store network with the completion of 10 full-store refurbishments during the year.
Inventory remains a key area and while we did close the year lower than the previous year, work
in this area never stops.
For the full year, a Net Profit after Tax of $88.4 million, only slightly higher than the year before,
but still - a new record profit.
In closing, we all know that retail is cyclical and
s about just how difficult it
is currently and probably for a while yet too - but what we can be certain of is how well placed the
Group is in terms of the great team we have within the Group, the resources at its disposal and
also in terms of the initiatives in place to ride that cycle.

Address to the Annual Meeting of Shareholders
18 May 2023
Thanks Rosanne.


pleasure to reflect on what was another great year for the Company and I also look forward to


. Our performance testifies to the strengths of
the business model and the dedication of what is an incredibly talented team. These attributes
are the result of years of diligent effort, and we continue to work to protect and enhance them.
We recognise that we have a lot of work still ahead of us, and of course we will never be
satisfied. Retail is such a competitive and dynamic business.

Geoff has provided a good review of the trading results and key financials. Let me add a few
comments on issues of particular note.

The disruptions arising from Covid-19 were less influential thank goodness and there was a
deterioration in economic factors including cost of living increases, higher interest rates, a weaker
New Zealand dollar and falling house prices, with a growing effect on consumer sentiment from
the second quarter onward. At the same time, we faced the need to manage increases in
operational costs and the cost of goods sold, with resulting stress on margins.

Given such a trading environment, we were delighted to have produced another full year record
for both sales and profits.

Once again, our growth reflected the adaptability and resilience of our total trading platform the
store network, the online platforms, and the click-and-collect and supply chain functions.

The shifts in the trading environment were reflected in margins. As you know, a very strong
programme of actions to enhance margins has resulted in strong gains over recent years. In the
latest year gross margin dollars increased again but gross margin percentage declined. This is
the result of pressure from the economic downturn and the consequent tightening of the retail
sector as individual players squeeze their margins to remain competitive.

We continue to work to protect as much as possible of the 633 basis points gained in gross
margin across the years ended January 2021 and January 2022. The benefits from our work
programme are continuing, and I do think it was an excellent result to close this year 174 basis
points below last year. For clar459 basis points better than the level for the January
2020 year Pre-Covid.

Margin pressure is, however, ongoing, and - that we do not
underestimate the challenge ahead in protecting those earlier gains.

We had allowed inventories to increase in the January 2022 year, to a level consistent with the
need to maintain stock availability in an environment of continuing supply chain disruptions. This
provided significant trading advantages at that time. The reduction in inventory in the latest year
reflected some easing in those conditions, along with a relentless focus to ensure that cost
pressures and the possible impact of inventory on margins were managed properly.

While the value of inventory decreased around 1%, the volume fell by around 11%. In the
changing conditions, as we enter a more subdued retail cycle than we have seen for a number of
years, this lower level of inventory is where the advantage lies. Initiatives in regard to inventory
ordering include refining how, when and what we purchase. We are also improving other metrics

such as in-store availability, slow moving items and stock obsolescence. All are critical to
optimising our inventory management and protecting the gross margin.

Our strong balance sheet remains a critical advantage to the
Company as it underpins our continued investment in the factors that drive performance.

We speak a lot about the strength of our team. The leadership, strategic focus and commitment
to performance I see across the Company is truly impressive.

Our management and operational team structure is based on the needs of the business. Our
executive team is relatively small, very nimble and cohesive. We engage with external
organisations or individuals where additional skills are necessary to drive better business
performance.

At the store and local community levels we have a mix of experienced and emerging leaders
supported by centrally-driven programmes to provide guidance, development and opportunity.
These leaders are supported by the work of our store and online fulfilment teams.

Team members across the company participate in education, training and welfare courses that
provide mutual benefit to the Company and to the individuals involved. Our continued investment
in these initiatives is an important source of competitive strength and advantage. This investment
takes many forms including a bespoke Management and Leadership programme, support for
other advanced tertiary studies and support for vocational learning. We also have internally and
externally-supported training in a range of job-focused areas including health and safety, along
with more general education on wellbeing and mental health. In regard to the latter, we intend to
integrate this into our core management and development programme.

Our focus on team member welfare, support, education, training and engagement has been
progressing for several years. It's no surprise to me that this focus has grown participation in our
team member engagement surveys.
improvement in Net Promoter Score, or NPS, which measures customer satisfaction and is no
doubt strongly influenced by the way team members feel about and perform in their roles. If I
were to summarise the effect in a few words, I would say there has been a clear impact on
performance

Whatever the economic conditions and other considerations, the evolution and improvement of
our store network is a constant. Our stores remain a key driver of growth and success, in
conjunction with the growth of online trading. The development programme reflects the ongoing
re-examination of our total retail footprint, with a view to ensuring we have the right mix to take
the business forward.

Despite the difficult trading conditions and constraints on team availability, we progressed a
significant number of store development projects during the year. Ten refurbishments were
completed during the year.

Our stores provide a venue where all individual shopping preferences can be met, new
experiences can be provided, and we can pursue our aspiration to be an easy company to do
business with.

Growth continued in our online business and we continued to invest in developing both the front-
end and back-end platforms.

nline revenue was 18.97% of total Group sales for the year.
While this was below , achieved during a period of enforced store
shutdowns, it was still considerably higher than the pre-Covid level of around 11%. There has
been a global trend in which the balance between store and online trading is shifting back slightly
to store trading
the pandemic.

Our online team implemented a number of developments to enhance performance during the
year. These included:

o a new product embellishment system to ensure there is great product content displayed
online
o the global tool Fit Analytics, which ensures that customers can select the right garment size
across all our sports apparel brands
o same-day Click & Collect.
o enhanced fulfilment processes to increase the speed of picking online orders
o improved order routing logic to optimise the speed of order for the customer.

Darren to provide a bit more depth on two important
topics our in-store programme and our supply chain initiative.

-store programme. In regard to supply chain, the project is a
review of our requirements for the next decade, taking account of current and future state
scenarios, automation, warehouse management and distribution centre design. Once finalised
and approved, this will represent a significant initiative for the Group to action across the next
two-to-three years.

General Manager Retail Operations & Property

Thanks Nick and Darren for that great update.

We will move at this point to another programme that has occupied a lot of time and focus, with
excellent results, over the past few years.

You have heard a number of references to our strategy programme, and I think we have made it
clear that we see this as critical to protecting and enhancing the foundations for
growth.

Initiatives in the latest year arising directly from the strategy programme included:
o the ongoing introduction of expanded Direct-To-Customer (drop-ship) ranges online, whereby
products are shipped direct from suppliers to customers
o continued development of our personalised database communication tool (Emarsys)
o e-receipts capability rolled out across all of stores
o the start of in-store trials for electronic shelf labelling.
o
There is a big-picture story behind this programme and I think you will find it of interest, so I am
going to ask our Chief Operating Officer, Andrew Scott, to take you through it. This is also an
opportunity to hear more detail on our Sustainability programme, which occupies the same
forward-looking perspective.

Over to you Andrew.

Thanks Andrew another really interesting presentation.

The year ahead
It remains for me at this point to provide an up-to-date perspective on the operating environment


As noted in the Annual Report, we expect New Zealand retail in general to remain highly
sensitive to deteriorating economic conditions, customer sentiment, cost pressures and higher
interest rates, along with political uncertainty in what is an election year.
We do not underestimate how challenging the trading environment could be and we continue to
expect it will be difficult for the Group to replicate the record profit for the year just completed.

As reported earlier this month, our first quarter sales were $181.2 million, 2.82% higher than the
$176.2 million achieved for the corresponding period last year. Homeware sales increased by
2.85% and sporting goods sales by 2.78%. This was a pleasing performance given the level of
uncertainty over consumer confidence and retail spending.

I believe can be very confident that our internal performance will remain strong, and we will
continue to build the foundations for future growth. The Group has a proven history of navigating
successfully through challenging times.

Thanks to the strength of our business model, the outstanding performance of our team, and
benefits from the various programmes you have heard about today, the Group will continue to
rise to the challenges faced during this current year and beyond.

General Manager Supply Chain
Shareholders 18 May 2023

We are building a network to support our long-term growth.

Today our suppliers ship direct to stores and our customers on-line orders are fulfilled by our
stores.

In our future state we will have two distribution centres () shipping a mix of imported and
locally supplied goods to our stores. We will also fulfil a portion of our on-line orders from
our DCs.

This two DC model reduces inter-island transport, lowers emissions and our domestic
transport spend
It allows us to split
We are building the ability to support direct to store and via DC flows from local suppliers
We will be capable of operating a DC bypass program where local suppliers send
containers of imported product direct from their overseas supply point to our DCs,
bypassing their local warehouses saving cost and emissions for Briscoe Group and our
suppliers


We have designed our future north island DC to accommodate our future stock flows over a
10-year capacity horizon. We expect some re-configuration will be required to enable a
capacity increase in second half of that timeframe.

The DC will be sized to handle 3.5 x the cubic volume, 15 x the units and 25 x the active
SKUs compared to our current DC

It will have a storage capacity of around 14,000 pallet positions and 25,000 totes

Systems and facility layout designed to support multiple flows:
o Pick of oversized items from pallet racking
o Pick of large cartons from shelving
o Pick of smaller items or individual units from an automated storage and retrieval
system
o Cross-dock of imported product from container to outbound bypassing storage

We will make appropriate use of automation to enable:
o Goods to person picking of small items and individual units, eliminating travel
time from the picking process
o Carton building, labelling and carton closure
o Outbound cartons will be sorted by store for pallet building in a store-friendly
format

The North Island DC will be run with a modern warehouse management system, allowing
us to improve our efficiency and accuracy in the following areas:
o Inbound processing with RF scanning
o Put away of stock with RF scanning
o Move of inventory with RF scanning
o Picking of larger items using suitable mix of RF or voice
o Transport lane management with RF scanning


This two DC network, will help us on our journey to net carbon zero by:
Reducing inter-island transport moves
Reducing transport legs from individual suppliers to our stores by moving them via

Supporting a DC bypass program reducing local transport and handling of inventory
upstream in our supply chain

The North Island DC will include the following green features:
Solar power generation
Roof-water capture
LED lighting with lux and movement sensors
Efficient electric fork hoist fleet
EV charging capability
Modern and efficient pallet wrappers minimising shrink wrap use