Michael Hill International Limited/Announcement

2024 Annual General Meeting Presentation

AGM22 October 2024MHJConsumer Discretionary

AGM Presentation
23 October 2024

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.
2

Board of Directors
From left to right: Claudia Batten (Independent NED), Rob Fyfe (Independent NED, Chair), Daniel Bracken (Managing Director & CEO), Sir Michael Hill (Founder, Non-independent NED), Dave Whittle
(Independent NED), Emma Hill (Non-independent NED, Chair of People Development & Remuneration Committee), and Gary Smith (Independent NED, Chair of Audit & Risk Management Committee).
3

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5

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6

Chair’s address
Rob Fyfe
7

Sustainability #thejewellerthatcares
8
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.

Chair’s address
Rob Fyfe
9

Managing Director & CEO
Presentation
Daniel Bracken
10

FY24 Performance Overview
11
•Challenging period for the business cycling record performance in FY23,
yet still outperforming the market
•Margin under pressure due to input costs and market conditions
•Digital sales demonstrating a strong return to growth
•Significant progress on multi-brand strategy:
•Complete refresh of the Michael Hill brand
•First global brand ambassador, Miranda Kerr
•Opened Michael Hill’s first global flagship store, in Chadstone
•Launched re:new sustainability ecosystem
•Created the Michael Hill Foundation
•Expanded and integrated the recently acquired Bevilles brand
•Soft launch of TenSevenSeven bespoke ringbuilder
•Test & trial Medley pop-up kiosk
11

FY20H1 Financial Snapshot
•Group revenue (including Bevilles) was up 4%, on a
52-week basis
•Gross profit (including Bevilles) was down 2%, on a
52-week basis
•Gross margin settled, due to higher COGS &
increased promotional activity
•Compressed comparable EBIT, with inflationary
pressures impacting cost of doing business
•Active management of inventory delivered a
reduction of ~$7m
•Total dividend of AU1.75 cents per share
12
FY24
1
FY23
2
Change
Revenue
Statutory Revenue (FY23: 53-week basis)
$645m$619m
$630m
+4%
2%
Gross Profit
Statutory Revenue (FY23: 53-week basis)
$391m$399m
$404m
-2%
-3%
Gross Margin 60.6%64.2%-360bps
Comparable EBIT $15.9m$58.9m-73%
Inventory$196m$203m-$7m
Net Cash/(Debt)($39m)$8m-$47m
Total DividendAU1.75cAU7.5c-AU5.75c
Store Network300
(including 36 Bevilles)
304
(including 26 Bevilles)
-4
FY24 Group Results
1
FY24: Includes Bevilles results for the entire reporting period
2
FY23: Revenue and gross profit are restated on 52-week basis and includes Bevilles results from 1 June 2023

13
Current Trading Update
•For the first 14 weeks of FY25, Group same store sales
were up 4.0% on prior year, with same store sales for the:
•Australian segment up 6.3%
•Canadian segment up 4.7%
•New Zealand segment down 4.2%
•Total sales for the Group were up 4.3% for the first 14
weeks of FY25.
•As previously signaled, product and brand initiatives are
delivering group gross margin recovery, resulting in
meaningful improvement since FY24H2.
•The Group remains focused on inventory management,
capital and operational cost control, along with
optimisation of store rostering.
The above numbers are unaudited and prior to accounting adjustments.

•As we prepare for the all-important Christmas Trading period, the
positive momentum we have seen in the first 14 weeks is very
encouraging.
•Our two largest markets of Australia and Canada have shown good
consistent growth, and our digital channels are performing well, driving
strong omni-channel adoption from our customers.
•While New Zealand is still under-performing, the recent economic
improvements, are encouraging, and we are seeing some green shoots in
performance.
•In the all-important world of product:
•Successfully launched our new Pendant Bar concept, with a focus
on both build-your-own and ready-to-wear gifting. This provides a
unique gifting proposition in our markets.
•Introduced a range of higher margin gifting products to drive
transaction volumes for the key Christmas period.
•Elevating our sustainable Lab Grown Diamonds to the highest
quality, introducing E colour and VVS clarity into this high growth
category, so that Michael Hill represents the very best in market.
14
Well prepared for Christmas

Group Strategy – Emphasis on Sales & Margin Growth
2020 – 2023
Reposition
Michael Hill
Brand
2023 – 2024
Establish
Portfolio of
Brands
2024 – 2025
Product &
Brand
Proposition
2025 – 2030
Network
Expansion &
Productivity
15

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
264 physical stores across AU, NZ and Canada
Brand elevation strategy well underway and moving
into white space
Customer-first, digital-led and channel agnostic
36 physical stores in Australia
‘Value-led’ market with quality products at affordable prices
Omni-channel distribution model
Medley – online pure-play
New digitally-led bespoke jewellery brand
Luxury customer with higher ATV
18

Product & Brand Proposition, 2024 - 2025
Premium Price / Luxury
Low price / Value
Brand & Fashion
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
20

Product & Brand Proposition, 2024 - 2025
21

Product & Brand Proposition, 2024 - 2025
22

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.
24

Network Expansion & Productivity, 2025 - 2030
25
Key
Milestone
Moments
Loyalty members have ~80% higher ATV
+15%

Network Expansion & Productivity, 2025 - 2030
26
Conversion Stores
New Stores

27
We are experiencing technical issues
Questions

28
Business of the
Annual General
Meeting

Financial Statements and Reports
•Audited FY24 Financial Statements
•Directors’ report
•Auditor’s report
29

Resolution 1: Adoption of Remuneration Report
To consider and, if thought fit, to pass the following advisory resolution:
"That the Remuneration Report of the financial year ended 30 June 2024
(as set out in the Directors' Report is adopted."
30
FORAGAINSTOPENABSTAINEXCLUDED
NO. OF SHARES82,570,7751,560,315637,72194,300166,851,104
% OF ELIGIBLE VOTES97.41%1.84%0.75%N/AN/A
% OF ALL SECURITIES21.46%0.41%0.17%0.02%43.37%

Resolution 2: Re-election of Sir Michael Hill as Director
31
To consider and, if thought fit, to pass the following resolution as an
ordinary resolution:
"That Sir Michael Hill who retires by rotation in accordance with ASX
Listing Rule 14.4 and Rule 38.6 of the Company’s Constitution and,
being eligible, offers himself for re-election, be re-elected as a Director
of the Company."
FORAGAINSTOPENABSTAINEXCLUDED
NO. OF SHARES249,300,7941,843,938537,67431,8090
% OF ELIGIBLE VOTES99.04%0.74%0.22%N/AN/A
% OF ALL SECURITIES64.80%0.48%0.14%0.01%0.00%

Resolution 3: Re-election of Emma Hill as Director
32
To consider and, if thought fit, to pass the following resolution as an
ordinary resolution:
"That Ms Emma Hill who retires by rotation in accordance with ASX Listing
Rule 14.4 and Rule 38.6 of the Company’s Constitution and, being eligible,
offers herself for re-election, be re-elected as a Director of the Company."
FORAGAINSTOPENABSTAINEXCLUDED
NO. OF SHARES248,998,5212,176,211507,67431,8090
% OF ELIGIBLE VOTES98.93%0.87%0.20%N/AN/A
% OF ALL SECURITIES64.72%0.57%0.13%0.01%0.00%

Resolution 4: Re-election of Claudia Batten as Director
33
To consider and, if thought fit, to pass the following resolution as an
ordinary resolution:
"That Ms Claudia Batten (appointed as a Director of the Company on 30
August 2024), in accordance with ASX Listing Rule 14.4 and Rule 36.2 of
the Company’s Constitution and, being eligible, offers herself for re-
election, be re-elected as a Director of the Company."
FORAGAINSTOPENABSTAINEXCLUDED
NO. OF SHARES250,007,858681,627637,721387,0090
% OF ELIGIBLE VOTES99.47%0.27%0.26%N/AN/A
% OF ALL SECURITIES64.98%0.18%0.17%0.10%0.00%

Resolution 5: Grant of share rights to the MD & CEO
34
To consider and, if thought fit, to pass the following resolution as an
ordinary resolution:
"That for the purposes of ASX Listing Rule 10.14 and for all other purposes,
approval be given to grant 1,986,468 share rights to the Managing
Director & Chief Executive Officer of the Company, MrDaniel Bracken, and
on the vesting and exercise of those share rights, to issue up to an
equivalent number of ordinary shares in the Company , under the Equity
Incentive Plan (as defined in the Explanatory Notes to this Notice) for FY25
as part of his long-term incentive arrangements, as described in the
Explanatory Notes."
FORAGAINSTOPENABSTAINEXCLUDED
NO. OF SHARES81,571,3602,394,780636,721167,111,3540
% OF ELIGIBLE VOTES96.42%2.83%0.75%N/AN/A
% OF ALL SECURITIES21.20%0.62%0.17%43.43%0.00%

Resolution 6: Related party transaction to loan funds to MD & CEO
35
To consider and, if thought fit, to pass the following resolution as an
ordinary resolution:
"That for the purposes of section 208 of the Corporations Act and for all
other purposes, approval is given for the Company to loan up to
$1,100,000 to the Managing Director & Chief Executive Officer, Mr Daniel
Bracken, on the terms and conditions described in the Explanatory Notes."
FORAGAINSTOPENABSTAINEXCLUDED
NO. OF SHARES248,243,4832,533,855636,721300,1560
% OF ELIGIBLE VOTES98.73%1.01%0.26%N/AN/A
% OF ALL SECURITIES64.52%0.66%0.17%0.08%0.00%

Change of Director's Interest Notice - Daniel Bracken Results of Annual General Meeting

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