FY24H1 Investor Presentation

FY24H1
R ES U LT S

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 does 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 presentation.
2

CEO and CFO FY24H1 Update
•FY24H1 Performance Overview
•FY24H1 Financial Results
•Group Results
•Segment Results
•Current Trading Update
•Group Strategy – Emphasis on Growth
•Appendices
3
Michael Hill International Limited

FY24H1 Performance Overview
4
•Challenging period for the business cycling record
performance in FY23, yet still taking market share
•Margin under pressure due to input costs and market
conditions
•Digital sales continued its return to growth
•Supporting the evolution of the Michael Hill brand and
strategic lift in ATV, an extensive range review in time for
the all-important peak Christmas trading period
•Solid progress on Group Multi-brand Strategy:
•Successfully embedded the recently acquired Bevilles
and opened four new stores
•Soft launch of TenSevenSeven pilot
•First ever Medley pop-up kiosk
4

FY20H1 Financial Snapshot
•Group revenue (including Bevilles) was up 4%,
on a 26-week basis
•Gross profit (including Bevilles) was down 2%,
on a 26-week basis
•Gross margin contraction, due to higher COGS
& increased promotional activity
•Compressed comparable EBIT, with
inflationary pressures impacting cost of doing
business
•Interim dividend of AU1.75 cents per share
(within dividend policy range)
•Inventory well managed
5
FY24H1
1
FY23H1
2
Change
Revenue
Statutory Revenue (FY23H1: 27-week basis)
$363m$349m
$363m
+4%
Flat
Gross Profit
Statutory Revenue (FY23H1: 27-week basis)
$223m$228m
$237m
-2%
-6%
Gross Margin 61.5%65.2%-370bps
Comparable EBIT $31.3m$54.5m-43%
Inventory$220m$198m+$22m
Net Cash/(Debt)($12m)$79m-$91m
Interim DividendAU1.75AU4.0c-AU2.25c
Store Network272
302 with Bevilles
282-10
FY24H1 Group Results
1
FY24H1: Includes Bevilles results for the reporting period
2
FY23H1: Revenue and gross profit are restated on 26-week basis

6
Australia (AUD)New Zealand (NZD)Canada (CAD)
FY24H1
1
FY23H1
2
ChangeFY24H1FY23H1
2
ChangeFY24H1FY23H1
2
Change
Revenue
Statutory Revenue (FY23H1: 27-week basis)
202m184m
191m
+10.2%
+6.1%
65m73m
76m
-10.3%
-14.2%
89m88m
92m
+0.5%
-3.8%
Gross profit
Statutory Revenue (FY23H1: 27-week basis)
123m118m
123m
+3.7%
Flat
39m46m
48m
-14.1%
-18.0%
54m57m
59m
-4.7%
-8.8%
Gross margin60.6%64.4%-380 bps59.9%62.6%-270 bps61.0%64.3%-330 bps
Segment Comparable EBIT25.6m38.4m-33.3%10.1m17.1m-40.7%13.9m18.5m-25.0%
Comparable EBIT as a %
of statutory revenue
12.7%20.2%-750 bps15.5%22.4%-690 bps15.7%20.1%-440 bps
Store network141
171 with Bevilles
148-74648-28586-1
FY24H1 Segment Results
1
FY24H1: Includes Bevilles results for the reporting period
2
FY23H1: Revenue and gross profit are restated on 26-week basis
•Australia revenue growth attributable to Bevilles acquisition
•Ongoing security measures experienced in New Zealand had a direct impact on earnings
•Canada delivered solid revenue results as it cycled record performance in FY23

7
Current Trading Update
•For the first seven weeks of FY24H2, Group sales
(including Bevilles) are up 9.5% on prior year, with the
Michael Hill Australia retail business driving the
improvement in performance against FY24H1:
•Australian segment sales (including Bevilles) +19.6%
•New Zealand segment sales -9.2%
•Canadian segment sales -0.9%
•External transactional sales data demonstrates that both
the Group and the Michael Hill brand continue to take
market share

Group Strategy – Emphasis on Growth
2020 – 2023
Reposition
Michael Hill
Brand
2023 – 2024
Establish
Portfolio of
Brands
2024 – 2025
Product &
Brand
Proposition
2025 – 2030
Network
Expansion &
Productivity
8

Reposition Michael Hill Brand, 2020 - 2023
Brand & Loyalty
Contemporary premium jewellery brand, leveraging
best-in-class loyalty program
Digital & Omni-channel
Omni- first, channel agnostic,
digitally-led new markets
•Omni now represents 60% of digital sales
•Marketplaces – growth in existing & new
geographies
•Highest margin channel
•Lift in ATV outpacing stores
•Virtual selling now available in all stores globally
+22%
9

Reposition Michael Hill Brand, 2020 - 2023
Product Evolution
Premium yet accessible,
with diamonds at our core
“The Jeweller that cares”
Retail Fundamentals
Elevated customer experience,
unwavering focus on productivity
~30%
10

Establish Portfolio of Brands, 2023 - 2024
Michael Hill Group now services all significant customer segments of the fine jewellery category,
and delivers multiple new growth pipelines.
LUXURY
PREMIUM
VALUE
PURE-P L AY
272 physical stores across AU, NZ and Canada
Brand elevation strategy well underway and moving into white space
Customer-first, digital-led and channel agnostic
30 physical stores in Australia
‘Value-led’ market with quality products at affordable prices
Omni-channel distribution model
Medley – online pure-play
Watches Galore – standalone value-led watch marketplace
New digitally-led bespoke jewellery brand
Luxury customer with higher ATV
Limited showroom presence
11

Product & Brand Proposition, 2024 - 2025
Premium Price / Luxury
Low price / Value
Brand Positioning
Brand Positioning
With the Michael Hill Group multi-brand strategy now in place, each brand is uniquely positioned
for different segments and price propositions, and its own strategic priorities:
Uniquely modern, high end bespoke
Premium contemporary classics,
milestone moments
Fashion forward, accessible style
Everyday essentials, great value
12

13

Product & Brand Proposition, 2024 - 2025
14

Product & Brand Proposition, 2024 - 2025
Data on this slide relates to the period March 2022 to February 2023
15

Product & Brand Proposition, 2024 - 2025
16

Network Expansion & Productivity, 2025 - 2030
With each brand uniquely positioned, the group will be well-placed to grow revenue and
profits through a more productive and expanded distribution network.
17

Network Expansion & Productivity, 2025 - 2030
“Store of the future” becomes a reality
18

Network Expansion & Productivity, 2025 - 2030
19

Network Expansion & Productivity, 2025 - 2030
20
Conversion Stores
New Stores
Network Expansion

Network Expansion & Productivity, 2025 - 2030
21

Network Expansion & Productivity, 2025 - 2030
The multi-brand strategy is underpinned by a philosophy of leveraging group capabilities
to drive productivity across all brands
22

The Michael Hill Foundation represents our ongoing commitment
to meaningful change, and our dedication to a better world.
The Foundation encompasses two key areas of focus:
Empowering Women and Nature Restoration.
Through continual initiatives and key charity partnerships, we are dedicated to empowering the lives of women and
conserving and restoring nature in our localities, working towards our sustainability targets for 2030.
23

Q & A
You are able to listen to Q&A via this
platform
If you would like to ask a question,
please click on ‘Request to Speak’
button at the bottom of the
broadcast window. If you are in full
screen broadcast mode you will need
to minimise to see this button.

24

Appendices
25

26
Appendix A: Bridge from Comparable EBIT to Reported EBIT
(AUD million)FY24H1FY23H1
Comparable EBIT31.354.5
Impact of AASB16 Leases5.54.8
Impact of IFRIC SaaS-related guidance-2.7-0.5
Litigation judgement-4.0-
Bevilles acquisition transaction costs-1.1-
Employee restructure costs-0.2-
Reported EBIT28.858.8
Calculated as follows:

27
Appendix B: AASB16 Leases & SaaS Impact
(AUD million)
FY24H1
Stat
Impact of
AASB16 & SaaS
FY24H1
pre-adjustments
FY23H1
pre-adjustments
Change
pre-adjustments
Revenue362.7-362.7363.4-0.2%
Cost of sales-139.7--139.7-126.5+10.4%
Gross profit223.0-223.0236.9-5.9%
Employee benefits expense-93.8-2.8-91.0-87.5+4.0%
Occupancy costs-7.927.2-35.1-30.7+14.3%
Marketing expenses-22.5--22.5-28.5-21.1%
Selling expenses-13.1--13.1-11.7+12.0%
Other income/(expenses)-24.9-2.6-22.3-13.2+68.9%
EBITDA60.821.839.065.3-40.3%
Depreciation and amortisation expenses-32.0-19.0-13.0-10.7+21.5%
EBIT28.82.826.054.5-52.3%
Interest income0.1-0.10.2-50.0%
Finance expenses-7.1-5.2-1.9-0.5+280.0%
Profit before tax21.8-2.424.254.2-55.4%
27