FY24 Trading Update

ASX AND NZX ANNOUNCEMENT


FY24 Trading Update
18 July 2024
Michael Hill International Limited (ASX/NZX: MHJ) is pleased to provide a trading update for the 52-week year ended
30 June 2024.
Challenging retail trading conditions have continued throughout the year, with macroeconomic forces impacting the
discretionary retail sector, and in particular, the fine jewellery category. However, recent trading performance has seen
positive sales momentum across all markets.
KEY POINTS
• Comparable EBIT – In line with analysts’ expectations, t he Company anticipates FY24 Group comparable EBIT of
between $14m to $16m.
• Group sales – For the year, Group sales (including Bevilles) were up 3.8% on LY, and second half sales were up 4.9%
on LY, an improvement on our most recent market update. The last seven weeks of FY24 demonstrated positive
momentum across all markets and channels, with Group sales up 6%, and the core Michael Hill brand in Australia
and Canada both achieving positive sales growth compared with the prior comparable period.
• Gross margin and inventory – While trading improved through May and June, there was also a deliberate focus on
clearing inventory to make way for higher margin product in FY25. Gross margin settled at ~60.5% for the year, with
closing inventory levels better than management expectations.
• Digital growth – Digital sales have returned to double digit growth on prior year, with the re-platforming of the
website supporting the relaunch of the elevated Michael Hill brand.
• Capital Management – As a proactive capital management measure, the existing debt facility has been increased by
$40m for the four-month period from 15 September 2024 to support seasonal working capital requirements for
Christmas trade. The FY24 year-end net debt position closed at ~$40m.
• Store portfolio management – In line with our store network strategy, the core Michael Hill brand has continued to
optimise its store network throughout the year, while at the same time expanding the Bevilles’ store network from
26 to 36 stores. The Group finished the year with 300 stores.

Retail Segment Update
Australia: For the year, segment revenue (including Bevilles) increased 10.5% on LY, and increased 12.0% in
H2. There were 171 stores (including 36 Bevilles stores) trading at the end of the year (FY23: 172).
New Zealand: For the year, segment revenue decreased 11.8% on LY, and decreased 12.0% in H2. There were
44 stores trading at the end of the year (FY23: 46).
Canada: For the year, segment revenue increased 0.3% on LY, and increased 1.6% in H2. There were 85 stores
trading at the end of the year (FY23: 86).

Commenting on the result, Managing Director and CEO of Michael Hill International Limited, Daniel Bracken said:
“While challenging economic conditions have persisted across all markets throughout the year, particularly in the fine
jewellery segment, the Group has continued to outperform the category, with a focus on retail fundamentals and
execution of its clearly articulated strategies. Particularly pleasing was the consistent performance of our Canadian
business throughout the year.

“While FY24 was disappointing, and trading conditions are expected to remain challenging, initiatives are underway to
drive sales and productivity, enhance margin, optimise inventory, prioritise and reduce capital expenditure to protect
the balance sheet, and further embed cost conscious discipline across the business.

“As a key milestone of the Michael Hill brand elevation journey, April saw the unveiling of our first global flagship store
at Chadstone in Melbourne showcasing the new brand codes, our first brand ambassador, Miranda Kerr, and a complete
re -platforming of our website. I am extremely proud of the enthusiasm, passion and dedication demonstrated by all our
team involved in the meticulous and considered delivery of such a pivotal moment for the Michael Hill Brand.”

SEGMENT BREAKDOWN

Revenue for retail operations for FY24H2:


$m $m


Last Year This Year % Var


(26 weeks) (26 weeks)

Segment figures in local currency



Australia segment AUD
140.4 157.3 12.0%
New Zealand segment NZD
56.1 49.4 -12.0%
Canada segment CAD
66.6 67.7 1.6%


Total Sales AUD
265.5 278.6 4.9%






Exchange rates used for FY24H2:
New Zealand
1.08 1.08

Canada
0.91 0.89




Revenue for retail operations for FY24:


$m $m


Last Year This Year % Var


(52 wks) (52 wks)

Segment figures in local currency



Australia segment AUD
325.6 359.7 10.5%
New Zealand segment NZD
130.2 114.8 -11.8%
Canada segment CAD
155.6 156.0 0.3%


Total Sales AUD
617.8 641.4 3.8%






Exchange rates used for FY24:
New Zealand
1.09 1.08

Canada
0.90 0.89



All figures are prior to final accounting adjustments, and are unaudited. Revenue/Sales figures stated above include the Professional
Care Plan (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.

All last year full year sales/revenue numbers are on a comparable 52-week basis. Group and 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
General Manager - Investor Relations & Treasury
+61 438 770 704
anthea.noble@michaelhill.com.au

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 300 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 report 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 Group). The words “targets”, “believes”, “expects”, “aims”,
“intends”, “plans”, “seeks”, “will”, “may”, “might”, “anticipates”, “projects”, “assumes”, “forecast”, “likely”, “outlook”, “would”,
“could”, “should”, “continues”, “estimates” or similar expressions or the negatives thereof, generally identify 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 Group’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, sustainability targets, expansion into new markets,
future product launches, points of sale and production facilities.
Although the Group believes that the expectations reflected in these forward-looking statements are reasonable, they are not
guarantees or predictions of future performance or statements of fact. Such forward-looking statements involve known and unknown
risks, uncertainties and other important factors that could cause the Group’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
Group’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 Group operates; the
protection and strengthening of the Group’s intellectual property rights, including patents and trademarks; the future adequacy of
the Group’s current warehousing, logistics and information technology operations; changes in laws and regulations or any
interpretation thereof, applicable to the Group’s business; increases to the Group’s effective tax rate or other harm to the Group’s
business as a result of governmental review of the Group’s transfer pricing policies, conflicting taxation claims or changes in tax laws;
and other factors referenced to in this report.
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, as there can be no assurance the actual outcomes will not differ materially from the forward-looking statements in this
report.
Except as required by applicable laws or regulations (including the ASX Listing Rules), the Group does not intend, and does not assume
any obligation, to update any forward- looking statements contained herein. All subsequent written and oral forward-looking
statements attributable to us or to persons acting on the Group’s behalf are expressly qualified in their entirety by the cautionary
statements referred to above and contained elsewhere in this report.



Michael Hill International Limited ABN 25 610 937 598
34 Southgate Avenue, Cannon Hill, QLD 4170