Accessible Property Conference

October 2017 Agenda

1. The Bunnings Story

2. Acquisition

3. Bunnings Property Objectives

4. Format Diversity & Flexibility The Bunnings Story Bunnings History

1886 1952 1989 1994 Arthur and Robert Bunning arrive in Bunnings expand in the WA market, adding Bunnings purchase Alco Bunnings open their first Bunnings . Bunning Bros Pty Ltd is building supplies to the existing timber Handyman operations in WA Warehouse founded. Soon after they purchase their business; become a public company and and merge operations to in the market and go to 100% ownership. first sawmill. the leading supplier of WA hard woods to significantly increase exposure the housing construction industry. to the D.I.Y. market. 1993 Bunnings purchase McEwans Ltd in and SA. Enabling expansion of operations to the East Coast.

2001 2016 2017 Today Purchased the BBC Hardware network Wesfarmers purchase the Homebase The first store in St Albans, Hertfordshire Bunnings continues to expand its operations with new including and Benchmark network, expanding into UK and Ireland. United Kingdom opens. warehouses, smaller format stores and trade centres stores in Australia and , throughout Australia, New Zealand, United Kingdom allowing Bunnings to expand internationally and Ireland. into the New Zealand Market. Bunnings Leading retailer of home and garden improvement products.

• Caters to consumer and commercial customers

• Part of Wesfarmers Limited

– Wesfarmers owns and operates a number of diverse divisions

– Wesfarmers has a market cap of c. A$45bn and is Australia’s largest private sector employer with over 200,000 employees

• Bunnings is one of the top 10 global home improvement and outdoor living retailers Lowest Widest Best Prices Range Service Strong track record of investment in Australia & NZ

% $m NSW network 45% Post BBC Stronger investment for 900 investment acquisition future growth 40% (Project XLR8) 800 35% 700 30% 600 25% 500 20% 400 15% 300 10% 200 5% 100 0% 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Capex (RHS) ROC (LHS)

Note: Australian and New Zealand figures shown only. Excludes Homebase acquisition and UK and Ireland investment from 2016 onwards. Market Leading Returns Over the Long Term Business Behaviour that Builds Trusts Over the long term with core stakeholders

• Team members – focused on building high performance culture

• Customers – price, range & service

• Community – “we live here too”

• Suppliers & landlords – build long term relationships

• Shareholders – provide long term sustainable returns Part of the Community Homebase Acquisition Attractive Market Entry Opportunity UK home and improvement market estimated to be £38 billion and growing. Market size1

Market overview £38b¹ • Market size estimated to be £38 billion1 (consumer & trade) £38b 1.6x £23b² • Highly fragmented with top two players having < 15% market share competing £23b across a variety of formats • UK market forecast to grow at a similar rate to Australia • Brexit uncertainty, HI&G fundamentals remain strong UK population2 • Consumer confidence softening post June election

Housing fundamentals 2.8x 64.1m • Similar home ownership rates (60% UK, 62% Australia) 23.1m • Smaller & older dwellings – 56% of England’s housing stock is over 50 years old3 • Higher wear & tear due to size & climate UK households2 – Higher refresh & replacement activity & weighting of spend in key categories (kitchens, bath, flooring & garden)4 • New household formation ~1.5 times that of Australia2 3.0x 26.4m • Bipartisan consensus – 1 million new homes by 2020 8.7m Sources: (1) Bunnings estimates based on industry analysis; (2) 2013 population, housing formation, occupied household estimates & gross disposable income sourced from Office for National Statistics (UK) & Australian Bureau of Statistics; (3) English Housing Survey Headline Report 2013-14; (4) HIA “Renovations out of the block” June 2014 Addressable Market Addressable market wider than home improvement & garden. Wide range of products with everyday use in repairs, refits, maintenance, construction, business.

toilets in every building light fittings everywhere Homebase Acquisition Overview Homebase provides an established & scalable platform to build a Bunnings branded business.

• Attractive and growing market

• Homebase provides an established & scalable platform

• Right-sized stores & well located network

• Network supports warehouse merchandising

• Latent capability for a low-cost operating model

• First step in a programme including investment in the Homebase team & reinvigoration of core assets, building an exciting new Bunnings-branded business over three to five years

• Long term investment opportunities Business plan to deliver long-term returns Phase 1 Phase 2 Phase 3

• Combine essential local • Retail basics focus elements with best of Bunnings • Invest in team to build new business • Invest in core business • Warehouse format activities • Lowest prices, wider choice with • Develop pilots for Bunnings trusted brands, great service Warehouse • Easy to get to with hours to suit all customers • Extensive digital engagement • Servicing both consumer & trade • “Everything you want under one roof”

First 24 months In 3 to 5 years 5 years plus LONG-TERM VALUE CREATION

1. A winning 2. An engaged, 3. Business 4. Sustainable offer to focused & behaviour returns customers committed that builds team trust Property Objectives Bunnings UK & Ireland - Property Objectives Significant investment in stores to help build a Bunnings branded business in the long term.

Develop Pilots Currently 8 Pilots open for 15-20 Pilots open by Xmas

Secure best sites 14 lease renewals at low cost

More to come!

Significant maintenance Invest in the store network LED lighting program

3 new stores committed Acquire new stores Freehold investment New Stores

• Ability to access capital through Wesfarmers Leverage parent • Freehold or leasehold opportunities support • Greenfields or brownfields

• Prominent sites • Easy access and egress Site Selection • Highly populated areas • Generally 40 – 80,000 sqft with a of c. 15,000 sqft

• Important to ensure long term tenure as well as controlling long term Control Costs occupancy costs • Commercially disciplined; driving return on space Bunnings Warehouse Bunnings Warehouse – St Albans Hatfield Rd

Before: After: Bunnings Warehouse – St Albans Hatfield Rd

Before: After:

Format Flexibility & Diversity Format Diversity Right size store for the market we operate in.

Multilevel & elevated • Cornerstone brand • format adaptability supports growth • Smaller format • ~50,000 sqft to ~200,00 sqft • ~50,000 sqft to ~200,00 sqft • ~20,000 sqft to ~50,000 sqft • Large format, continually evolving • innovating unlocks market • Acquisition and greenfield • Low cost, warehouse merchandising opportunities • Highly flexible • Flexible footprint including multi-level • inner-urban & tightly held suburban • Regional and metro markets • Retail and commercial customers • achieves strong customer outcomes • Retail and commercial customers • can combine store with other property elements Thank you