Warehouse : FY23 Interim Result Presentation Final

FY23 Interim Results

Six months ending 29 January 2023

CONTENTS

3 Chair's Update - Joan Withers

7 Group Update - Nick Grayston

19 Group Financial Results - Jonathan Oram

30 FY23 Outlook - Joan Withers

35 Appendix A - Divisional Results

41 Appendix B - Additional Information

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CHAIR'S UPDATE

JOAN WITHERS

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OUR TEAMS HAVE STEPPED UP WHEN IT MATTERS MOST

• Our thoughts are with all those impacted by the recent catastrophic Auckland floods and Cyclone Gabrielle, and particularly those who have lost loved ones or have seen their homes devastated. We are very proud of our own teams who have stepped up - serving our customers and distributing large quantities of goods and gift cards to those who really need them.
• A special mention to our teams in Napier, Hastings, Tairāwhiti, Northland, Auckland and Coromandel whose resilience and teamwork has been nothing short of incredible in very difficult circumstances.
• We would also like to thank our amazing customers who have donated $200,000 through the "Add $1" campaign to raise money for families affected by Cyclone Gabrielle - which we have matched from our community funds to raise a total of $400,000.
• None of our stores were significantly damaged by Cyclone Gabrielle. We did have some short-term store closures in Hawkes Bay when the storm first hit.

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SALES GROWTH BUT A TOUGH RESULT IN A VERY CHALLENGING MACRO-ECONOMIC ENVIRONMENT

• Whilst we are announcing strong first half sales, we have delivered a lower half year EBIT1 result after a record last two years, in a very testing retail environment where our customers are facing cost of living pressures and the country is facing an uncertain economic outlook.
• We did have planned growth in CODB2, however we weren't able to deleverage this quickly enough to offset the decrease in gross margin which contributed to our EBIT decline.
• In a difficult peak and Christmas trading period, our Q2 results were disappointing. This would normally be our strongest quarter.
• In these times of increased cost of living, we strive to continue to deliver value to our customers across all our brands, by keeping our prices as low as possible despite the cost of goods increasing - this has impacted our margins in this half year.
• We have had to reprioritise some of our strategic initiatives as we manage cost out and navigate through trading challenges.
• However, we are pleased about the enhancements we have achieved in our customer offering:
• • We have taken great steps in our grocery offering at The Warehouse during this period. We have expanded our ambient and chilled ranges and introduced a trial of fresh fruit and vegetable offering in selected locations across New Zealand.
  • We have increased our MarketClub offers and membership base as we invest in first party customer data and deliver increased customer value.

1. Earnings Before Interest and Taxation.

2. Cost Of Doing Business.

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