2021 Annual Report

20 ANNUAL 21 REPORT Inspiring you to live your passion ABN: 81 108 676 204 SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21 3 CONTENTS 4 Chair’s message 6 CEO’s message 8 About us 10 Performance highlights 12 Our strategy 14 Helping our communities in challenging times 16 Our brands 16 Supercheap Auto 18 rebel 20 BCF 22 Macpac 24 Board of Directors 26 Executive Leadership Team 28 Our team 31 Directors’ Report 43 Remuneration Report (Audited) 68 Financial Statements 130 Shareholder Information 132 Corporate Directory and Financial Calendar 4 SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21 SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21 5 CHAIR’S MESSAGE DEAR SHAREHOLDERS The 2021 financial year was a demonstration of Super The Group’s result and robust financial position Retail Group at its best, underlining the benefits of a has supported the Board’s decision to determine a sustainable business strategy that remains robust in a fully franked final dividend of 55.0 cents per share. volatile world. The total dividend for the 2021 financial year is 88.0 cents per share. The total dividend represents a This past year was a difficult and challenging time full year payout ratio of 65 per cent, in line with the for everyone, but in Super Retail Group’s ongoing Group’s policy. response to the COVID-19 pandemic we displayed the agility, innovation and resilience required to operate On behalf of shareholders, the Board also remains passion and dedication of our team members. Their Over the course of the financial year, Diana Eilert successfully in an uncertain external environment. focused on the ethical and sustainable stewardship commitment and capability is the open secret behind announced her retirement as a Non-Executive Director of all aspects of the Group’s activities. At Super Retail When I wrote to shareholders in last year’s annual this organisation’s success. I am constantly impressed after six years on the Board. The Board thanks Diana for Group we are determined to make a constructive report, the health and economic crisis was still by our team members, with frequent accounts of her contribution and service to shareholders, particularly contribution to society and have a positive impact in their determination, innovation and ingenuity in as Chair of the Human Resources and Remuneration unfolding. While uncertainty remains and the impact the communities in which we operate. of the pandemic will play out for some time yet, getting the job done, confirming the depth of our Committee. We are well advanced on a process to Super Retail Group has continued to perform strongly With a rapidly evolving external environment, the talented and engaged workforce. We will continue to replace Diana with an experienced director who will thanks to our resilient omni-retail strategy, strong Group is reviewing its Vision, Mission and Values to invest in our team members because we understand complement the diversity of expertise on the Board. how integral they are to our growth. leadership and engaged team members. ensure they remain relevant to team members and Although the year ahead will be marked by continuing other stakeholders. In the time since our Values were The $203 million equity raising in July 2020, completed Given the strong corporate performance during uncertainty, the Board and leadership team have a clear first articulated, the Company has transitioned to an one of the most challenging external environments strategy to ensure the Group is positioned to deliver with strong support from retail and institutional omni-retailer with four core brands and employs a in our time as a listed company, the leadership of sustainable success. With the energy and commitment shareholders, including our founder and major larger and more diverse group of team members. The our Managing Director and Chief Executive Officer of our team members underpinning the business, I am shareholder Reg Rowe, helped position the Group for Board wants to be satisfied that these statements of Anthony Heraghty can only be described as first- confident Super Retail Group will continue to create success. It allowed us to invest in both our people and intent remain firmly aligned with the ambition of the class. Despite the external uncertainty, Anthony has value for our shareholders. the infrastructure needed to continue delivering our organisation. ensured the business continues to focus on executing omni-retail strategy despite the uncertainty created Thank you for your continued support. Robust environmental, social and governance our strategy, creating a culture of high performance, by COVID-19. The Group entered the 2022 financial creativity and engagement. Strong leadership from year with a conservative balance sheet and no practices continue to be an area of focus for the Board and leadership team. Anthony and his leadership team, and an emphasis bank debt. on more deeply understanding our customers has As a Group, our business activities are increasingly As consumer trends accelerated the shift towards delivered enviable sales growth. conducted in a manner that aligns with the transition online and became embedded in customer behaviour The stewardship of the Board has helped strengthen to a lower carbon footprint and ESG risk management across Australia and New Zealand, our supply chain the Group and positioned it to create long-term is now entrenched as a routine component of the and distribution networks were bolstered and value. The Board is diligent and dedicated in fulfilling Board’s accountabilities. enhanced, flowing through to a strong operational its responsibilities guiding the business on behalf of Sally Pitkin AO performance and a record financial result. Any review of the past 12 months must call out the shareholders and I take this opportunity to thank my Chair fellow directors for their sound advice and counsel. 6 SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21 SUPER RETAIL GROUP LIMITED ANNUAL REPORT FY21 7 CEO’S MESSAGE DEAR SHAREHOLDERS FY21 sales Sales Like-for- Online ($m) growth like sales sales Despite continuing aftershocks from the COVID-19 growth growth pandemic over the past 12 months, I am pleased to report Supercheap Auto $1,308.8 16.9% 16.4% 31% that your company exceeded performance targets and rebel $1,197.0 15.3% 17.5% 36% The current uncertain outlook for retail trading conditions A SUSTAINABLE FUTURE delivered a record sales result in FY21. underscores the importance of our clear business plan. Sustainability is at the core of our business decision- Our omni-retail strategy and operational flexibility combined BCF $797.7 49.1% 48.0% 90% The strategy has enabled us to take advantage of changing consumer trends and invest further in our omni-retail making and in FY21 we made progress across the Group on with the commitment of the company’s dedicated team Macpac $153.4 16.3% 14.2% 38% implementing more sustainable practices. members helped Super Retail Group deliver more than execution to position the business for future success. $3.45 billion in sales for the first time. This is a significant CUSTOMER LOYALTY IS KEY Our carbon emissions (scopes one and two) across the achievement given Australia and New Zealand continued to more outdoor physical activity. The introduction of Macpac Group declined by seven per cent and our recycling face lockdowns and movement restrictions as governments products to our rebel and BCF stores exceeded expectations, Our large and loyal customer base continued to grow rates (for all waste material in stores, support offices and sought to contain COVID-19 outbreaks. driving sales growth and raising the profile of the brand. over the past 12 months, in line with our strategic goal of distribution centres) remained at 65 per cent, in line with building stronger and closer personal relationships with our FY20 levels. Our brands continued to help customers reduce ONLINE SALES MEETING CUSTOMER DEMAND On behalf of the executive team, I offer my sincere thanks to customers. their impact on the environment with Supercheap Auto the 14,305 team members in the Super Retail Group family. The channel shift to online sales, which accelerated during recycling a record 1,068,200 million litres of oil and 85,967 We are very pleased with the growth in this area. We now They have risen above every challenge thrown at them the COVID-19 lockdowns in FY20, continued over the past car batteries, and rebel recycling more than 37,000 pairs of have eight million active club members across our four core over the past 12 months and worked tirelessly to meet our 12 months. shoes through its in-store collection. customers’ needs. brands, an increase of 22 per cent on the previous financial Group online sales increased by 43 per cent to year. Combined, our club members contributed 63 per cent BCF contributed $300,000 and customers raised a further The foundation of our strong performance was built around $415.6 million, representing 12 per cent of Group sales of total sales and provide the Group with a key competitive $392,850 to support OzFish in protecting and restoring a strategy of boosting inventories to meet anticipated compared to 10 per cent in the previous financial year. advantage. waterways and fish habitats. Through its Fund for Good, increases in customer demand and re-directing our efforts Click & Collect, which leverages the strength of our 698 Macpac gave grants worth more than $376,000 to over 40 to meet elevated demand in our online sales channels. With significant migration to online, customer satisfaction stores and constitutes our most profitable online channel, organisations. On inventories, we shipped 54 per cent more containers levels have improved with average club member NPS (TEUs) compared to the previous year to guarantee supplies represented 46 per cent of Group online sales.

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