FY23 Trading Update

ASX AND NZX ANNOUNCEMENT

STRONG RESULT IN A CHALLENGING MARKET

F Y 2 3 T r a d i n g U p d a t e
20 July 2023
Michael Hill International Limited (ASX/NZX: MHJ) is pleased to provide a trading update for the 53-week year ended
2 July 2023:
KEY POINTS
• Sales growth maintained – For the year, Group sales were up 6.0% on LY, and while economic conditions were more
challenging in recent months, second half sales were only down 0.8% on LY, an improvement on our most recent
market update.
• Comparable EBIT – The Company anticipates FY23 Group comparable EBIT of between $56m to $59m
(FY22: $62.9m).
• Elevated gross margin continues – While margins will be slightly down on the FY22 peak, they are expected to be
ahead of both FY21 and the years leading into the pandemic.
• Positive momentum in digital sales – Following negative sales in the first half, due to the cycling of the pandemic
surge in digital, for the full year digital sales declined by 1.4%, but were up 21.3% on FY21. The second half digital
sales were up 12.3% on LY, with positive momentum building throughout the half.
• Healthy inventory levels – Group inventory levels will be in line with management’s expectations, and Michael Hill
inventory levels are anticipated to be at a similar level to prior year.
• Successful refinancing of banking facility – Prior to year-end, a replacement three year $90m facility was finalised
on favourable terms, which will support the Company’s strategic growth initiatives.
• Bevilles acquisition completed – The Bevilles acquisition on 1 June 2023 enhances the Group’s strategy, with the
addition of a complementary and scalable Australian jewellery retailer. With the Bevilles team having successfully
transitioned, the key focus is now on expanding the store network nationally.
• Store portfolio management – For Michael Hill, three new stores opened (AU:2, CA:1) and five under-performing
stores permanently closed (AU:3, NZ:2) during the year. With the inclusion of 26 acquired Bevilles stores, the store
network totals 304 across all markets at the end of the year (FY22: 280).

Retail Segment Update
Australia: For the year, segment revenue grew by 9.1% on LY. There were 172 stores (including 26 Bevilles
stores) trading at the end of the year (FY22: 147).
New Zealand: For the year, segment revenue grew by 5.8% on LY. There were 46 stores trading at the end of
the year (FY22: 48).
Canada: For the year, segment revenue grew by 0.4% on LY. There were 86 stores trading at the end of the
year (FY22: 85).

Commenting on the result, Managing Director and CEO of Michael Hill International Limited, Daniel Bracken said:
“While acknowledging the challenging economic conditions faced globally, I am pleased with the delivery of full year
sales growth in all three markets, against what was a record prior year. With second half sales flat to last year, I am
encouraged by the brand elevation strategy continuing to deliver market share gains.

“The smooth transition of the Bevilles business has seen team members highly energised, engaged and already
leveraging from the Michael Hill Group. I am excited by the addition of Bevilles to the Michael Hill portfolio of brands,
and our early insights only reinforce its complementary strategic fit, and reaffirms the opportunity to grow the Bevilles
brand and take its offering nationally. Discussions are already well advanced to secure new store locations to open prior
to Christmas, and for entry into a new state market in the new year.”

SEGMENT BREAKDOWN

Revenue for retail operations for FY23H2:


$m $m


Last Year This Year % Var


(26 weeks) (26 weeks)

Segment figures in local currency



Australia segment AUD
141.9 140.5 -1.0%
New Zealand segment NZD
58.1 56.1 -3.4%
Canada segment CAD
65.7 66.3 1.0%


Total Sales AUD
267.4 265.2 -0.8%






Exchange rates used for FY23H2:
New Zealand
1.08 1.08

Canada
0.91 0.91




Revenue for retail operations for FY23:


$m $m


Last Year This Year % Var


(52 weeks) (53 weeks)

Segment figures in local currency



Australia segment AUD
303.4 331.0 9.1%
New Zealand segment NZD
125.1 132.4 5.8%
Canada segment CAD
157.4 158.1 0.4%


Total Sales AUD
592.5 628.1 6.0%






Exchange rates used for FY23:
New Zealand
1.06 1.09

Canada
0.92 0.90



The above figures are prior to final accounting adjustments, and are unaudited. Revenue/Sales 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.

The Australian segment sales include Bevilles sales from 1 June 2023.

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 was founded by Sir Michael Hill in 1979 when he opened his first jewellery store in Whangarei, New Zealand.
The Group currently has 304 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
34 Southgate Avenue, Cannon Hill, QLD 4170