Diploma in Corporate Finance Corporate Finance Strategy

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Diploma in Corporate Finance

Corporate Finance Strategy & Advice

Information Booklet

Date of exam Monday 20 June 2016

Part 1: 1:00 pm – 1:55 pm Information Booklet & Examination Paper Part 2: 2:00 pm – 5:00 pm Answer Book

Notes to candidates

Time allowed: 55 minutes

Part 1: Candidates will be provided with an Information Booklet and the examination question paper. Candidates have one hour in which to review the information booklet and questions. During this time, candidates may annotate the information book.

The examination has been prepared on the assumption that candidates will not have any detailed knowledge of the type of organisation to which it refers. No additional merit will be accorded to those candidates displaying such knowledge.

Part 2: The Answer Book will be distributed at 1.55 pm and the candidates should open and begin writing in the answer book when instructed.

Candidates should distinguish clearly between formal answers (including appendices) and any working papers.

All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, or any information storage or retrieval system without prior permission from the Chartered Institute for Securities & Investment.

Please turn over when instructed

1 of 150 2 of 150 Table of Contents

Information Book Pages Contents 3 Sports Direct Capital IQ spreadsheets: Financials 4 – 28 Sports Direct Capital IQ spreadsheets: Comparable Company Information 29 - 35 Sports Direct Capital IQ spreadsheets: Estimates 36 – 43 Sports Direct Annual Report 2015 (Pages 1 – 36) 44 – 74 Guardian Newspaper Article 75 – 77 Sample Share Prices 78 – 79 JD Sports Capital IQ spreadsheets: Financials 80 - 104 JD Sports Capital IQ spreadsheets: Comparable Company Information 105 - 110 JD Sports Capital IQ spreadsheets: Estimates 111 - 117 JD Sports Annual Report 2015 (extracts) 118 - 145 Guardian Newspaper Article 146 - 148 Sample Share Prices 149 - 150

3 of 150

Sports Direct Capital IQ spreadsheets: Financials

Data Provided by Historical Equity Pricing Data supplied by

4 of 150 Sports Direct International plc (LSE:SPD) > Financials > Key Stats In Millions of the trading currency, except per share items. Currency: Trading Currency Conversion: Historical Order: Latest on Right Units: S&P Capital IQ (Default) Decimals: Capital IQ (Default) Dilution: Basic

Key Financials¹ LTM² For the Fiscal Period Ending 12 months 12 months 12 months 12 months 12 months 12 months† 12 months 12 months Apr-29-2012A Apr-28-2013A Apr-27-2014A Apr-26-2015A Oct-25-2015A Apr-30-2016E Apr-30-2017E Apr-30-2018E Currency GBP GBP GBP GBP GBP GBP GBP GBP

Total Revenue 1,835.8 2,185.6 2,706.0 2,832.6 2,833.3 2,822.43 3,002.98 3,111.43 Growth Over Prior Year 14.8% 19.1% 23.8% 4.7% 1.4% (0.36%) 6.40% 3.61%

Gross Profit 744.3 894.8 1,154.9 1,240.8 1,254.1 - - - Margin % 40.5% 40.9% 42.7% 43.8% 44.3% - - -

EBITDA 213.2 264.5 317.9 373.6 382.0 378.1 396.5 413.98 Margin % 11.6% 12.1% 11.7% 13.2% 13.5% 13.40% 13.20% 13.31%

EBIT 150.7 211.9 254.1 298.0 298.7 - - - Margin % 8.2% 9.7% 9.4% 10.5% 10.5% - - -

Earnings from Cont. Ops. 105.6 151.7 179.6 241.4 273.5 - - - Margin % 5.8% 6.9% 6.6% 8.5% 9.7% - - -

Net Income 106.2 151.6 180.2 240.4 271.2 - - - Margin % 5.8% 6.9% 6.7% 8.5% 9.6% - - -

Diluted EPS Excl. Extra Items³ 0.17 0.24 0.29 0.39 0.44 0.36 0.37 0.4 Growth Over Prior Year 19.9% 46.1% 19.7% 33.6% 43.3% (3.02%) 2.17% 6.86%

Same Store Sales Growth % 0.7% 10.6% 10.5% 7.4% NA - - -

Currency GBP GBP GBP GBP GBP GBP GBP GBP Exchange Rate 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 Conversion Method H H H H H S S S

¹All results are taken from the most recently filed statement for each period. When there has been more than one, earlier filings can be viewed on the individual statement pages. ²Growth rates for the LTM period are calculated against the LTM period ending 12 months before. ³All forward period figures are consensus mean estimates provided by the brokers and may not be on a comparable basis as financials. †Growth rates for forward periods are calculated against prior period estimates or actual pro forma results as disclosed on the Estimates Consensus page. Growth Rates are calculated in originally reported currency only and will not reflect any currency conversion selected above. 5 of 150 Latest Capitalization (Millions of GBP) Currency GBP Share Price 3.48 Shares Out. 596.4

Market Capitalization 2,075.6 - Cash & Short Term Investments 163.3 + Total Debt 183.6 + Pref. Equity - + Total Minority Interest (1.2) = Total Enterprise Value (TEV) 2,094.7

Book Value of Common Equity 1,291.5 + Pref. Equity - + Total Minority Interest (1.2) + Total Debt 183.6 = Total Capital 1,474.0

**For companies that have multiple share classes that publicly trade, we are incorporating the different prices to calculate our company level market capitalization. Please click on the value to see the detailed calculation. Prices shown on this page are the close price of the company’s primary stock class. Shares shown on this page are total company as-reported share values.

6 of 150 Total Liability includes Total Debt, Minority Interest and Pref. Equity. Net Liability includes Total Liability, net of Cash and Short Term Investments. TEV includes Market Cap and Net Liability. Total Capital includes Common Equity and Total Liability.

Valuation Multiples based on Current Capitalization LTM For the Fiscal Period Ending 12 months 12 months 12 months 12 months 12 months Apr-26-2015A Oct-25-2015A Apr-30-2016E Apr-30-2017E Apr-30-2018E TEV/Total Revenue 0.8x 0.7x 0.74x 0.70x 0.67x

TEV/EBITDA 5.7x 5.4x 5.55x 5.29x 5.07x

TEV/EBIT 7.1x 6.9x - - -

P/Diluted EPS Before Extra 8.9x 8.0x 9.62x 9.41x 8.81x

P/BV 1.8x 1.6x - - -

Price/Tang BV 2.3x 1.9x - - -

7 of 150 Sports Direct International plc (LSE:SPD) > Financials > Income Statement

In Millions of the reported currency, except per share items. Template: Standard Restatement: Latest Filings Period Type: Annual Order: Latest on Right Currency: Reported Currency Conversion: Historical Units: S&P Capital IQ (Default) Decimals: Capital IQ (Default)

Income Statement Reclassified Reclassified Reclassified Reclassified LTM For the Fiscal Period Ending 12 months 12 months 12 months 12 months 12 months 12 months Apr-24-2011 Apr-29-2012 Apr-28-2013 Apr-27-2014 Apr-26-2015 Oct-25-2015 Currency GBP GBP GBP GBP GBP GBP

Revenue 1,599.2 1,835.8 2,185.6 2,706.0 2,832.6 2,833.3 Other Revenue ------Total Revenue 1,599.2 1,835.8 2,185.6 2,706.0 2,832.6 2,833.3

Cost Of Goods Sold 940.3 1,091.5 1,290.8 1,551.0 1,591.7 1,579.2 Gross Profit 658.9 744.3 894.8 1,154.9 1,240.8 1,254.1

Selling General & Admin Exp. 525.0 594.6 685.4 902.6 938.4 951.1 R & D Exp. ------Depreciation & Amort. ------Amort. of Goodwill and Intangibles 2.8 4.4 4.7 6.8 12.7 12.7 Other Operating Expense/(Income) (5.3) (5.3) (7.2) (8.6) (8.3) (8.4)

Other Operating Exp., Total 522.4 593.6 682.9 900.8 942.8 955.4

Operating Income 136.5 150.7 211.9 254.1 298.0 298.7

Interest Expense (4.7) (6.0) (7.2) (8.1) (6.8) (3.9) Interest and Invest. Income 0.4 0.6 2.6 7.9 15.1 64.0 Net Interest Exp. (4.2) (5.4) (4.6) (0.2) 8.2 60.1

Income/(Loss) from Affiliates 0 0.6 1.3 2.3 3.0 2.9 Currency Exchange Gains (Loss) (1.7) 3.6 (2.0) (11.2) 7.3 30.6 Other Non-Operating Inc. (Exp.) - 2.3 - - - - EBT Excl. Unusual Items 130.5 151.7 206.6 245.0 316.5 392.2

8 of 150 Impairment of Goodwill (0.2) - - - (5.3) (37.8) Gain (Loss) On Sale Of Invest. (9.5) (5.8) - - - - Asset Writedown - - - (5.5) (8.0) (8.0) Legal Settlements (3.1) - - - - - Other Unusual Items 1.1 5.6 0.6 - 10.3 4.5 EBT Incl. Unusual Items 118.8 151.5 207.2 239.5 313.4 351.0

Income Tax Expense 35.6 45.9 55.6 59.8 72.1 77.4 Earnings from Cont. Ops. 83.2 105.6 151.7 179.6 241.4 273.5

Earnings of Discontinued Ops. ------Extraord. Item & Account. Change ------Net Income to Company 83.2 105.6 151.7 179.6 241.4 273.5

Minority Int. in Earnings 1.0 0.6 (0.1) 0.6 (1.0) (2.3) Net Income 84.2 106.2 151.6 180.2 240.4 271.2

Pref. Dividends and Other Adj. ------

NI to Common Incl Extra Items 84.2 106.2 151.6 180.2 240.4 271.2 NI to Common Excl. Extra Items 84.2 106.2 151.6 180.2 240.4 271.2

Per Share Items Basic EPS 0.15 0.19 0.27 0.31 0.41 0.46 Basic EPS Excl. Extra Items 0.15 0.19 0.27 0.31 0.41 0.46 Weighted Avg. Basic Shares Out. 568.6 568.6 569.0 585.5 592.3 592.4

Diluted EPS 0.14 0.17 0.24 0.29 0.39 0.44 Diluted EPS Excl. Extra Items 0.14 0.17 0.24 0.29 0.39 0.44 Weighted Avg. Diluted Shares Out. 604.1 635.8 620.8 618.2 616.5 623.5

Normalized Basic EPS 0.15 0.17 0.23 0.26 0.33 0.41 Normalized Diluted EPS 0.14 0.15 0.21 0.25 0.32 0.39

Dividends per Share NA NA NA NA NA NA

Shares per Depository Receipt 2.0 2.0 2.0 2.0 2.0 2.0

9 of 150 Supplemental Items EBITDA 199.2 213.2 264.5 317.9 373.6 382.0 EBITA 139.2 155.0 216.6 260.9 310.7 310.5 EBIT 136.5 150.7 211.9 254.1 298.0 298.7 EBITDAR 284.6 311.1 354.2 439.8 512.1 NA Effective Tax Rate % 29.9% 30.3% 26.8% 25.0% 23.0% 22.1% Total Current Taxes 42.3 53.2 60.8 57.3 79.2 79.2 Total Deferred Taxes (6.8) (7.3) (5.2) 2.6 (7.1) (7.1)

Normalized Net Income 82.5 95.4 129.1 153.7 196.9 242.8 Non-Cash Pension Expense 0.4 0.2 0.5 0.5 0.3 - Filing Date Aug-10-2012 Jul-18-2013 Aug-28-2014 Jul-16-2015 Jul-16-2015 Dec-10-2015 Restatement Type RC RC RC RC O O Calculation Type REP REP REP REP REP LTM

Supplemental Operating Expense Items Net Rental Exp. 85.4 98.0 89.8 121.9 138.5 NA Imputed Oper. Lease Interest Exp. 11.6 21.5 19.7 23.8 30.3 - Imputed Oper. Lease Depreciation 73.7 76.4 70.1 98.1 108.2 -

Stock-Based Comp., SG&A Exp. 10.6 20.6 22.2 11.9 10.1 10.1 Stock-Based Comp., Unallocated - - - - - 4.9 Stock-Based Comp., Total 10.6 20.6 22.2 11.9 10.1 15.0

Note: For multiple class companies, per share items are primary class equivalent, and for foreign companies listed as primary ADRs, per share items are ADR-equivalent.

10 of 150 Sports Direct International plc (LSE:SPD) > Financials > Balance Sheet In Millions of the reported currency, except per share items. Template: Standard Restatement: Latest Filings Period Type: Annual Order: Latest on Right Currency: Reported Currency Conversion: Historical Units: S&P Capital IQ (Default) Decimals: Capital IQ (Default)

Balance Sheet Balance Sheet as of: Restated Apr-24-2011 Apr-29-2012 Apr-28-2013 Apr-27-2014 Apr-26-2015 Oct-25-2015 Currency GBP GBP GBP GBP GBP GBP ASSETS Cash And Equivalents 60.5 78.7 147.4 151.0 78.3 163.3 Total Cash & ST Investments 60.5 78.7 147.4 151.0 78.3 163.3

Accounts Receivable 49.7 44.6 58.0 68.3 78.4 212.7 Other Receivables 4.2 9.4 8.8 19.1 80.5 - Total Receivables 53.9 54.0 66.8 87.4 158.9 212.7

Inventory 217.9 316.8 447.0 565.5 517.1 633.1 Prepaid Exp. 37.8 29.9 29.3 35.7 31.8 - Other Current Assets - 5.9 18.0 4.4 92.2 62.8 Total Current Assets 370.2 485.3 708.4 843.9 878.3 1,071.9

Gross Property, Plant & Equipment 574.3 687.2 744.8 873.5 924.3 - Accumulated Depreciation (338.2) (374.2) (412.7) (461.2) (501.6) - Net Property, Plant & Equipment 236.1 313.0 332.0 412.4 422.7 443.4

Long-term Investments 91.4 76.1 79.8 158.3 178.9 260.9 Goodwill 110.8 121.7 129.8 153.5 156.5 - Other Intangibles 94.2 103.4 110.6 101.6 98.8 216.6 Deferred Tax Assets, LT 13.4 32.6 48.0 31.1 38.4 43.7 Other Long-Term Assets ------Total Assets 916.2 1,132.2 1,408.6 1,700.7 1,773.7 2,036.4

LIABILITIES Accounts Payable 95.7 155.5 170.1 239.5 170.1 422.2 Accrued Exp. 96.2 87.1 117.5 142.3 153.2 - Short-term Borrowings 11.9 9.2 5.7 5.7 0.8 - Curr. Port. of LT Debt 1.3 0.1 50.1 350.5 0.4 0.8 Curr. Port. of Cap. Leases 0.0 0.0 - - - - Curr. Income Taxes Payable 32.1 44.0 56.3 32.3 34.9 37.5 Other Current Liabilities 48.9 41.8 32.7 29.0 23.3 7.1 Total Current Liabilities 286.2 337.7 432.3 799.2 382.6 467.6

11 of 150 Long-Term Debt 194.9 213.8 245.6 6.8 136.8 182.8 Capital Leases 1.3 0.8 0.0 - - - Pension & Other Post-Retire. Benefits 16.2 19.3 19.9 15.4 14.9 11.7 Def. Tax Liability, Non-Curr. 28.2 25.8 25.0 24.0 40.1 38.1 Other Non-Current Liabilities 58.3 62.9 41.1 37.8 37.7 45.8 Total Liabilities 585.1 660.3 763.9 883.2 612.1 746.1

Common Stock 64.1 64.1 64.1 64.1 64.1 64.1 Additional Paid In Capital 874.4 874.4 874.4 874.4 874.4 874.4 Retained Earnings 440.9 600.4 752.0 931.8 1,181.5 1,380.0 Treasury Stock (91.2) (113.5) (120.6) (69.5) (69.5) (90.0) Comprehensive Inc. and Other (957.4) (952.9) (924.9) (979.7) (886.1) (937.0) Total Common Equity 330.7 472.4 644.9 821.1 1,164.4 1,291.5

Minority Interest 0.4 (0.5) (0.3) (3.5) (2.8) (1.2)

Total Equity 331.1 471.9 644.7 817.6 1,161.6 1,290.3

Total Liabilities And Equity 916.2 1,132.2 1,408.6 1,700.7 1,773.7 2,036.4

Supplemental Items Total Shares Out. on Filing Date 576.6 598.6 598.5 592.3 592.3 592.4 Total Shares Out. on Balance Sheet Date 576.6 598.6 598.5 592.3 592.3 592.4 Book Value/Share 0.57 0.79 1.08 1.39 1.97 2.18 Tangible Book Value 125.7 247.2 404.5 566.0 909.0 1,074.9 Tangible Book Value/Share 0.22 0.41 0.68 0.96 1.53 1.81 Total Debt 209.4 223.9 301.4 363.0 138.1 183.6 Net Debt 148.9 145.2 154.0 212.0 59.7 20.3 Debt Equiv. of Unfunded Proj. Benefit Obligation 16.2 19.3 19.9 15.4 14.9 NA Debt Equivalent Oper. Leases 683.0 783.8 718.2 975.4 1,107.9 NA Total Minority Interest 0.4 (0.5) (0.3) (3.5) (2.8) (1.2) Equity Method Investments 38.3 29.5 32.1 41.8 38.1 48.1 Inventory Method FIFO FIFO FIFO Avg Cost Avg Cost NA Raw Materials Inventory 3.3 4.1 3.9 0.1 0.0 NA Work in Progress Inventory 0.7 0.9 NA NA NA NA Finished Goods Inventory 214.0 311.8 443.1 565.3 517.1 NA Land 125.6 219.5 237.5 322.4 323.4 NA Machinery 327.1 343.0 387.3 425.9 470.6 NA Leasehold Improvements - 124.6 120.0 125.3 130.4 - Full Time Employees 18,210 19,000 24,000 28,000 27,000 NA Accum. Allowance for Doubtful Accts 4.7 4.1 6.7 8.3 7.2 NA Filing Date Aug-10-2012 Jul-18-2013 Aug-28-2014 Jul-16-2015 Jul-16-2015 Dec-10-2015 Restatement Type RS NC NC NC O O Calculation Type REP REP REP REP REP REP Note: For multiple class companies, total share counts are primary class equivalent, and for foreign companies listed as primary ADRs, total share counts are ADR-equivalent.

12 of 150 Sports Direct International plc (LSE:SPD) > Financials > Cash Flow

Cash Flow Reclassified LTM For the Fiscal Period Ending 12 months 12 months 12 months 12 months 12 months 12 months Apr-24-2011 Apr-29-2012 Apr-28-2013 Apr-27-2014 Apr-26-2015 Oct-25-2015 Currency GBP GBP GBP GBP GBP GBP

Net Income 84.2 106.2 151.6 180.2 240.4 271.2 Depreciation & Amort. 59.9 58.2 47.9 57.0 62.9 71.5 Amort. of Goodwill and Intangibles 2.8 4.4 4.7 6.8 12.7 11.8 Depreciation & Amort., Total 62.7 62.5 52.6 63.8 75.6 83.3

(Gain) Loss From Sale Of Assets 0 1.7 (0.6) - 0.1 (12.6) (Gain) Loss On Sale Of Invest. 12.2 7.1 - - - - Asset Writedown & Restructuring Costs 0.2 2.5 2.2 5.8 5.3 38.1 (Income) Loss on Equity Invest. 0.0 (0.6) (1.3) (2.3) (3.0) (2.9) Stock-Based Compensation 10.6 20.6 22.2 11.9 10.1 15.0 Other Operating Activities 9.1 2.2 15.4 12.7 (22.3) (89.8) Change in Acc. Receivable 10.7 17.7 (6.6) (18.2) (66.4) (45.4) Change In Inventories 0.9 (80.2) (102.0) (52.5) 49.3 22.9 Change in Acc. Payable (6.3) 25.6 (19.0) (34.4) (52.3) (35.7) Change in Other Net Operating Assets ------Cash from Ops. 184.3 165.4 114.4 167.1 237.0 244.0

Capital Expenditure (20.5) (129.4) (48.2) (67.3) (97.3) (162.9) Sale of Property, Plant, and Equipment 1.0 1.3 0.1 - 21.2 44.0 Cash Acquisitions - (26.2) (46.9) (15.4) (3.8) (3.7) Divestitures 1.0 - - - - - Sale (Purchase) of Intangible assets (1.5) (2.9) (1.7) (1.8) (2.9) (3.0) Invest. in Marketable & Equity Securt. - (0.5) (0.1) (14.1) 1.2 46.9 Net (Inc.) Dec. in Loans Originated/Sold ------Other Investing Activities 5.9 1.9 2.6 2.5 3.9 4.6 Cash from Investing (14.0) (155.8) (94.3) (96.1) (77.9) (74.0)

13 of 150 Short Term Debt Issued ------Long-Term Debt Issued 190.9 160.4 405.0 300.9 127.0 - Total Debt Issued 190.9 160.4 405.0 300.9 127.0 192.8 Short Term Debt Repaid ------Long-Term Debt Repaid - (143.3) (323.9) (348.5) (347.0) - Total Debt Repaid - (143.3) (323.9) (348.5) (347.0) (299.5)

Issuance of Common Stock 0.0 0.0 - - - - Repurchase of Common Stock - - (21.7) - - -

Total Dividends Paid ------

Special Dividend Paid ------Other Financing Activities (7.2) (6.0) (7.2) (19.8) (6.8) (3.9) Cash from Financing 183.7 11.2 52.1 (67.3) (226.9) (110.6)

Net Change in Cash 353.9 20.8 72.2 3.6 (67.8) 59.4

Supplemental Items Cash Interest Paid 7.2 6.0 7.2 8.1 6.8 3.9 Cash Taxes Paid 27.3 41.3 44.7 55.7 77.7 77.5 Levered Free Cash Flow 184.0 (0.2) 46.5 95.0 (1.3) 50.1 Unlevered Free Cash Flow 186.9 3.5 51.0 100.1 3.0 52.5 Change in Net Working Capital (50.3) 41.5 106.3 65.3 168.7 66.7 Net Debt Issued 190.9 17.1 81.0 (47.5) (220.0) (106.7) Filing Date Aug-10-2012 Jul-18-2013 Aug-28-2014 Jul-16-2015 Jul-16-2015 Dec-10-2015 Restatement Type RC NC NC NC O O Calculation Type REP REP REP REP REP LTM

14 of 150 Sports Direct International plc (LSE:SPD) > Financials > Multiples

View: Data Frequency: Quarterly Order: Latest on Right Decimals: Capital IQ (Default) Dilution: Basic

Multiples Detail In Millions of the reported currency, except per share items.

For Quarter Ending Sep-30-2014 Dec-31-2014 Mar-31-2015 Jun-30-2015 Sep-30-2015 Dec-31-2015 Mar-24-2016 TEV/LTM Total Revenue Average 1.67x 1.48x 1.52x 1.47x 1.64x 1.43x 0.87x High 2.01x 1.61x 1.68x 1.62x 1.73x 1.65x 1.17x Low 1.43x 1.33x 1.36x 1.35x 1.55x 1.19x 0.74x Close 1.43x 1.57x 1.36x 1.59x 1.61x 1.22x 0.74x

TEV/NTM Total Revenues Average - 1.34x 1.44x 1.37x 1.54x 1.33x 0.84x High - 1.48x 1.57x 1.50x 1.63x 1.55x 1.16x Low - 1.19x 1.29x 1.25x 1.44x 1.12x 0.72x Close - 1.46x 1.29x 1.48x 1.52x 1.16x 0.72x

TEV/LTM EBITDA Average 14.15x 12.40x 12.67x 12.21x 12.56x 10.70x 6.39x High 17.24x 13.54x 13.98x 13.46x 13.56x 12.43x 8.63x Low 12.05x 11.23x 11.31x 11.23x 11.73x 8.74x 5.44x Close 12.05x 13.11x 11.31x 13.24x 12.14x 8.99x 5.44x

TEV/NTM EBITDA Average - 10.13x 10.69x 10.02x 10.91x 9.17x 6.06x High - 11.10x 11.68x 10.96x 11.53x 10.78x 7.83x Low - 9.05x 9.60x 9.21x 10.29x 7.61x 5.41x Close - 10.95x 9.60x 10.78x 10.53x 7.83x 5.42x

TEV/LTM EBIT Average 17.64x 15.49x 15.93x 15.35x 15.74x 13.43x 8.16x High 21.43x 16.89x 17.58x 16.92x 17.05x 15.56x 11.01x Low 15.03x 14.01x 14.21x 14.11x 14.68x 11.16x 6.95x Close 15.03x 16.48x 14.21x 16.65x 15.19x 11.48x 6.95x

P/LTM EPS Average 24.23x 21.88x 22.59x 21.72x 20.59x 16.84x 9.40x High 28.43x 23.96x 25.03x 24.06x 24.24x 19.88x 12.72x Low 21.18x 19.66x 20.04x 19.89x 18.88x 12.89x 7.99x Close 21.18x 23.40x 20.04x 23.64x 19.41x 13.26x 7.99x

P/NTM EPS Average - 16.49x 17.46x 16.06x 17.82x 15.02x 10.51x High - 18.21x 19.34x 17.52x 18.95x 17.60x 13.21x Low - 14.56x 15.46x 14.70x 16.71x 12.84x 9.37x 15 of 150 Close - 18.00x 15.46x 17.22x 17.19x 13.21x 9.51x

P/LTM Normalized EPS Average 28.43x 25.98x 28.43x 27.35x 25.30x 20.28x 10.51x High 33.87x 29.75x 31.51x 30.28x 30.51x 24.29x 14.21x Low 24.75x 22.97x 25.23x 25.04x 23.07x 14.41x 8.94x Close 24.75x 29.46x 25.23x 29.77x 23.71x 14.82x 8.94x

P/BV Average 5.08x 4.48x 4.13x 3.97x 4.02x 3.35x 1.88x High 5.86x 5.05x 4.58x 4.40x 4.43x 3.94x 2.54x Low 4.46x 3.92x 3.67x 3.64x 3.75x 2.57x 1.60x Close 4.46x 4.28x 3.67x 4.33x 3.85x 2.65x 1.60x

P/Tangible BV Average 7.46x 6.42x 5.58x 5.37x 5.20x 4.24x 2.26x High 9.00x 7.32x 6.18x 5.94x 5.99x 5.05x 3.05x Low 6.47x 5.30x 4.95x 4.91x 4.80x 3.09x 1.92x Close 6.47x 5.78x 4.95x 5.84x 4.93x 3.18x 1.92x

TEV/LTM Unlevered FCF Average 43.06x 39.26x NM NM NM 65.45x 46.85x High 47.02x 43.15x NM NM NM 67.67x 63.24x Low 38.40x 35.78x NM NM NM 64.10x 39.90x Close 38.40x NM NM NM NM 65.91x 39.90x

Market Cap/LTM Levered FCF Average 43.17x 39.17x NM NM NM 68.23x 48.73x High 47.33x 43.26x NM NM NM 70.56x 65.91x Low 38.25x 35.50x NM NM NM 66.81x 41.44x Close 38.25x NM NM NM NM 68.71x 41.44x

Average multiples are calculated using positive close values on each trading day within the frequency periods selected. Negative values are excluded from the calculation. When the Multiples are not meaningful, due to negative values, then they will not be displayed in the chart.

When a mismatch exists between the currency of the equity listing and the reported financial results such results are translated into the currency of the listing at the exchange rate applicable on the financial period end date.

Historical Equity Pricing Data supplied by

16 of 150 Sports Direct International plc (LSE:SPD) > Financials > Historical Capitalization

In Millions of the trading currency, except per share items. Frequency: Quarterly Order: Latest on Right Currency: Trading Currency Conversion: Historical Units: S&P Capital IQ (Default) Decimals: Capital IQ (Default) Dilution: Basic

Historical Capitalization Balance Sheet as of: Apr-28-2013 Oct-27-2013 Apr-27-2014 Oct-26-2014 Apr-26-2015 Oct-25-2015 Pricing as of* Jul-18-2013 Dec-12-2013 Aug-28-2014 Dec-11-2014 Jul-16-2015 Dec-10-2015 Currency GBP GBP GBP GBP GBP GBP Capitalization Detail Share Price 6.38 6.74 7.2 6.66 7.37 5.92 Shares Out. 598.5 616.5 592.3 592.3 592.3 596.4

Market Capitalization 3,818.2 4,154.9 4,264.5 3,944.7 4,362.2 3,533.9 - Cash & Short Term Investments 147.4 164.5 151.0 106.1 78.3 163.3 + Total Debt 301.4 347.8 363.0 292.6 138.1 183.6 + Pref. Equity ------+ Total Minority Interest (0.3) (12.3) (3.5) (2.9) (2.8) (1.2) = Total Enterprise Value (TEV) 3,971.9 4,325.9 4,472.9 4,128.3 4,419.2 3,553.0

Book Value of Common Equity 644.9 759.1 821.1 983.9 1,164.4 1,291.5 + Pref. Equity ------+ Total Minority Interest (0.3) (12.3) (3.5) (2.9) (2.8) (1.2) + Total Debt 301.4 347.8 363.0 292.6 138.1 183.6 = Total Capital 946.1 1,094.6 1,180.5 1,273.6 1,299.6 1,474.0

* Pricing as of the filing date of the balance sheet period end date. For TEV calculation purposes on this page Capital IQ only uses balance sheet components from the original filing that is publicly available as of a given pricing date and does not use restated balance sheet data from a later filing. In the cases where a company did not disclose balance sheet values for a particular period, TEV is calculated using balance sheet components from the last reported balance sheet as of this date. The table above is organized along period end dates.

Historical Equity Pricing Data supplied by

17 of 150 Sports Direct International plc (LSE:SPD) > Financials > Capital Structure Summary

In Millions of the reported currency, except ratios and % of Total values. Restatement: Latest Filings Period Type: Annual Currency: Reported Currency Conversion: Historical Units: S&P Capital IQ (Default) Decimals: Capital IQ (Default) Order: Latest on Right

Capital Structure Data For the Fiscal Period Ending 12 months Apr-27-2014 12 months Apr-26-2015 3 months Oct-25-2015 Currency GBP GBP GBP Units Millions % of Total Millions % of Total Millions % of Total

Total Debt 363.0 30.7% 138.1 10.6% 183.6 12.5% Total Common Equity 821.1 69.6% 1,164.4 89.6% 1,291.5 87.6% Total Minority Interest (3.5) (0.3%) (2.8) (0.2%) (1.2) (0.1%) Total Capital 1,180.5 100.0% 1,299.6 100.0% 1,474.0 100.0%

Debt Summary Data For the Fiscal Period Ending 12 months Apr-27-2014 12 months Apr-26-2015 3 months Oct-25-2015 Currency GBP GBP GBP Units Millions % of Total Millions % of Total Millions % of Total

Total Revolving Credit 294.7 81.2% 0.8 0.6% 0.8 0.4% Total Term Loans 68.2 18.8% 137.2 99.4% 137.2 74.7% Total Principal Due 363.0 100.0% 138.1 100.0% 138.1 75.2%

Total Adjustments - - - - 45.6 24.8% Total Debt Outstanding 363.0 100.0% 138.1 100.0% 183.6 100.0%

Available Credit Undrawn Revolving Credit - - 988.0 - - - Total Undrawn Credit - - 988.0 - - -

Additional Totals Total Cash & ST Investments 151.0 - 78.3 - 163.3 - Net Debt 212.0 - 59.7 - 20.3 - Total Senior Debt 363.0 100.0% 138.1 100.0% 138.1 75.2% Total Short-Term Borrowings 5.7 1.6% 0.8 0.6% - - Curr. Port. of LT Debt/Cap. Leases 350.5 96.6% 0.4 0.3% 0.8 0.4% 18 of 150 Long-Term Debt (Incl. Cap. Leases) 6.8 1.9% 136.8 99.1% 182.8 99.6% Total Bank Debt 363.0 100.0% 138.1 100.0% 138.1 75.2% Total Unsecured Debt 363.0 100.0% 138.1 100.0% 138.1 75.2% Variable Rate Debt 269.7 74.3% 138.1 100.0% 138.1 75.2%

Credit Ratios Net Debt/EBITDA 0.7x - 0.2x - 0.1x - Total Debt/EBITDA 1.1x - 0.4x - 0.5x - Total Senior Debt/EBITDA 1.1x - 0.4x - 0.4x - Net Debt/(EBITDA-CAPEX) 0.8x - 0.2x - 0.1x - Total Debt/(EBITDA-CAPEX) 1.4x - 0.5x - 0.9x - Total Senior Debt/(EBITDA-CAPEX) 1.4x - 0.5x - 0.7x -

Fixed Payment Schedule LT Debt (Incl. Cap. Leases) Due +1 356.0 98.1% 1.2 0.8% - - LT Debt (Incl. Cap. Leases) Due +2 1.7 0.5% 131.4 95.2% - - LT Debt (Incl. Cap. Leases) Due +3 1.7 0.5% 1.8 1.3% - - LT Debt (Incl. Cap. Leases) Due +4 1.7 0.5% 1.8 1.3% - - LT Debt (Incl. Cap. Leases) Due +5 1.7 0.5% 1.8 1.3% - - LT Debt (Incl. Cap. Leases) Due, Next 5 Yrs 363.0 100.0% 138.1 100.0% - -

Operating Lease Commitment Due +1 99.0 - 121.7 - - - Operating Lease Commitment Due +2 82.3 - 99.3 - - - Operating Lease Commitment Due +3 82.3 - 99.3 - - - Operating Lease Commitment Due +4 82.3 - 99.3 - - - Operating Lease Commitment Due +5 82.3 - 99.3 - - - Operating Lease Commitment Due, Next 5 Yrs 428.2 - 518.8 - - - Operating Lease Commitment Due, After 5 Yrs 242.3 - 330.1 - - -

Sub-Lease Income +1 5.8 - 3.2 - - - Sub-Lease Income +2 4.5 - 2.7 - - - Sub-Lease Income +3 4.5 - 2.7 - - - Sub-Lease Income +4 4.5 - 2.7 - - - Sub-Lease Income +5 4.5 - 2.7 - - - Sub-Lease Income, Next 5 Yrs 23.6 - 14.1 - - - Sub-Lease Income, After 5 Yrs 22.4 - 10.1 - - -

Contractual Obligations Due +1 252.5 - 170.1 - - - Contractual Obligations Due + 2 0.1 - - - - - Contractual Obligations Due, Next 5 Yrs 252.6 - 170.1 - - - Total Contractual Obligations 252.6 - 170.1 - - -

Interest Rate Data Filing Date Jul-16-2015 - Jul-16-2015 - Dec-10-2015 -

19 of 150 Sports Direct International plc (LSE:SPD) > Financials > Capital Structure Details

Principal Due in Millions of the reported currency. Period Type: Annual Source: A 2015 filed Jul-16-2015 Currency: Reported Currency Conversion: Historical Units: S&P Capital IQ (Default) Decimals: Capital IQ (Default)

FY 2015 (Apr-26-2015) Capital Structure As Reported Details Coupon/Base Repayment Description Type Principal Due (GBP) Rate Floating Rate Maturity Seniority Secured Convertible Currency Bank and Other Loans Term Loans 137.2 NA NA - Senior No No GBP Bank Overdrafts Revolving Credit 0.8 NA NA Apr-25-2011 Senior No No GBP Committed Unsecured Revolving Credit - NA NA - Senior No No GBP Revolving Facility Agreement

Working Capital Facility Revolving Credit - NA NA - Senior No No GBP

FY 2014 (Apr-27-2014) Capital Structure As Reported Details Coupon/Base Repayment Description Type Principal Due (GBP) Rate Floating Rate Maturity Seniority Secured Convertible Currency Bank and Other Loans * Term Loans 68.2 NA NA - Senior No No GBP Bank Overdrafts Revolving Credit 5.7 NA NA Apr-25-2011 Senior No No GBP Revolving Facility Agreement * Revolving Credit 214.0 NA NA Mar-06-2015 Senior No No GBP

Revolving Facility Agreement Revolving Credit 50.0 NA NA Mar-06-2015 Senior No No GBP with Barclays Bank Pl *

Revolving Facility Agreement Revolving Credit 25.0 NA NA Mar-06-2015 Senior No No GBP with Handelsbanken Plc *

20 of 150 Sports Direct International plc (LSE:SPD) > Financials > Ratios

Restatement: Latest Filings Period Type: Annual Order: Latest on Right Decimals: Capital IQ (Default)

Ratios LTM For the Fiscal Period Ending 12 months 12 months 12 months 12 months 12 months 12 months Apr-24-2011 Apr-29-2012 Apr-28-2013 Apr-27-2014 Apr-26-2015 Oct-25-2015 Profitability Return on Assets % 9.1% 9.2% 10.4% 10.2% 10.7% 9.6% Return on Capital % 15.0% 15.2% 16.1% 14.9% 15.0% 13.6% Return on Equity % 28.2% 26.3% 27.2% 24.6% 24.4% 24.1% Return on Common Equity % 28.6% 26.4% 27.1% 24.6% 24.2% 23.8%

Margin Analysis Gross Margin % 41.2% 40.5% 40.9% 42.7% 43.8% 44.3% SG&A Margin % 32.8% 32.4% 31.4% 33.4% 33.1% 33.6% EBITDA Margin % 12.5% 11.6% 12.1% 11.7% 13.2% 13.5% EBITA Margin % 8.7% 8.4% 9.9% 9.6% 11.0% 11.0% EBIT Margin % 8.5% 8.2% 9.7% 9.4% 10.5% 10.5% Earnings from Cont. Ops Margin % 5.2% 5.8% 6.9% 6.6% 8.5% 9.7% Net Income Margin % 5.3% 5.8% 6.9% 6.7% 8.5% 9.6% Net Income Avail. for Common Margin % 5.3% 5.8% 6.9% 6.7% 8.5% 9.6% Normalized Net Income Margin % 5.2% 5.2% 5.9% 5.7% 6.9% 8.6% Levered Free Cash Flow Margin % 11.5% (0.0%) 2.1% 3.5% (0.0%) 1.8% Unlevered Free Cash Flow Margin % 11.7% 0.2% 2.3% 3.7% 0.1% 1.9%

Asset Turnover Total Asset Turnover 1.7x 1.8x 1.7x 1.7x 1.6x 1.5x Fixed Asset Turnover 6.3x 6.7x 6.8x 7.3x 6.8x 6.7x Accounts Receivable Turnover 32.8x 39.0x 42.6x 42.9x 38.6x 15.0x Inventory Turnover 4.3x 4.1x 3.4x 3.1x 2.9x 2.5x

Short Term Liquidity Current Ratio 1.3x 1.4x 1.6x 1.1x 2.3x 2.3x Quick Ratio 0.4x 0.4x 0.5x 0.3x 0.6x 0.8x Cash from Ops. to Curr. Liab. 0.6x 0.5x 0.3x 0.2x 0.6x 0.5x Avg. Days Sales Out. 11.1 9.5 8.5 8.5 9.4 24.3 Avg. Days Inventory Out. 84.5 90.9 107.7 118.8 123.8 148.5 Avg. Days Payable Out. 44.4 39.1 41.7 44.6 48.3 100.1 Avg. Cash Conversion Cycle 51.2 61.3 74.5 82.6 84.9 72.7 21 of 150 Long Term Solvency Total Debt/Equity 63.2% 47.4% 46.7% 44.4% 11.9% 14.2% Total Debt/Capital 38.7% 32.2% 31.9% 30.7% 10.6% 12.5% LT Debt/Equity 59.2% 45.5% 38.1% 0.8% 11.8% 14.2% LT Debt/Capital 36.3% 30.8% 26.0% 0.6% 10.5% 12.4% Total Liabilities/Total Assets 63.9% 58.3% 54.2% 51.9% 34.5% 36.6%

EBIT / Interest Exp. 29.3x 25.3x 29.4x 31.3x 43.5x 77.3x EBITDA / Interest Exp. 42.8x 35.8x 36.8x 39.2x 54.6x 98.8x (EBITDA-CAPEX) / Interest Exp. 38.4x 14.1x 30.0x 30.9x 40.4x 56.7x Total Debt/EBITDA 1.1x 1.1x 1.1x 1.1x 0.4x 0.5x Net Debt/EBITDA 0.7x 0.7x 0.6x 0.7x 0.2x 0.1x Total Debt/(EBITDA-CAPEX) 1.2x 2.7x 1.4x 1.4x 0.5x 0.8x Net Debt/(EBITDA-CAPEX) 0.8x 1.7x 0.7x 0.8x 0.2x 0.1x

Altman Z Score 3.84 4.21 4.66 5.7 7.48 6.51

Growth Over Prior Year Total Revenue 10.2% 14.8% 19.1% 23.8% 4.7% 1.4% Gross Profit 11.8% 13.0% 20.2% 29.1% 7.4% 4.0% EBITDA 69.2% 7.0% 24.1% 20.2% 17.5% 15.5% EBITA 98.2% 11.3% 39.7% 20.5% 19.1% 15.1% EBIT 102.6% 10.4% 40.6% 19.9% 17.3% 13.9% Earnings from Cont. Ops. (6.7%) 26.9% 43.6% 18.4% 34.4% 45.8% Net Income (5.9%) 26.2% 42.7% 18.9% 33.4% 44.8% Normalized Net Income 25.5% 15.6% 35.3% 19.1% 28.0% 63.9% Diluted EPS before Extra (5.6%) 19.9% 46.1% 19.7% 33.6% 43.3%

Accounts Receivable 3.9% (10.3%) 30.1% 17.8% 14.8% 28.1% Inventory (0.4%) 45.4% 41.1% 26.5% (8.6%) (3.4%) Net PP&E (12.9%) 32.6% 6.1% 24.2% 2.5% 9.1% Total Assets (4.6%) 23.6% 24.4% 20.7% 4.3% 9.9%

Tangible Book Value 203.7% 96.7% 63.6% 39.9% 60.6% 47.5% Common Equity 28.0% 42.8% 36.5% 27.3% 41.8% 31.3% Cash from Ops. 11.9% (10.2%) (30.8%) 46.0% 41.8% 126.6% Capital Expenditures 21.8% 532.7% (62.7%) 39.5% 44.6% 161.0% Levered Free Cash Flow 103.4% NM NM 104.3% NM NM Unlevered Free Cash Flow 95.5% (98.1%) 1,364.8% 96.3% (97.0%) NM Dividend per Share NA NA NA NA NA NA

22 of 150 Compound Annual Growth Rate Over Two Years Total Revenue 8.1% 12.5% 16.9% 21.4% 13.8% 7.7% Gross Profit 8.7% 12.4% 16.5% 24.6% 17.8% 10.6% EBITDA 16.6% 34.6% 15.2% 22.1% 18.9% 16.1% EBITA 17.5% 48.5% 24.7% 29.7% 19.8% 15.4% EBIT 18.0% 49.6% 24.6% 29.9% 18.6% 14.5% Earnings from Cont. Ops. NM 8.8% 35.0% 30.4% 26.2% 27.8% Net Income NM 9.0% 34.2% 30.3% 25.9% 27.1% Normalized Net Income 19.3% 20.4% 25.1% 27.0% 23.5% 31.5% Diluted EPS before Extra NM 6.4% 32.3% 32.2% 26.4% 26.8%

Accounts Receivable (10.1%) (3.5%) 8.0% 23.8% 16.3% 25.7% Inventory (8.8%) 20.3% 43.2% 33.6% 7.6% 6.5% Net PP&E (10.7%) 7.5% 18.6% 14.8% 12.8% 2.5% Total Assets (3.2%) 8.6% 24.0% 22.6% 12.2% 10.1%

Tangible Book Value NM 144.4% 79.4% 51.3% 49.9% 47.5% Common Equity 48.3% 35.2% 39.6% 31.8% 34.4% 30.4% Cash from Ops. 41.4% 0.2% (21.2%) 0.5% 43.9% 18.3% Capital Expenditures (22.3%) 177.6% 53.6% (27.9%) 42.0% 77.7% Levered Free Cash Flow 1,196.2% NM (49.7%) NM NM (33.0%) Unlevered Free Cash Flow 261.6% (80.9%) (47.8%) 436.2% (75.8%) (32.0%) Dividend per Share NA NA NA NA NA NA

Compound Annual Growth Rate Over Three Years Total Revenue 8.3% 10.3% 14.6% 19.2% 15.6% 11.6% Gross Profit 6.2% 10.1% 14.9% 20.6% 18.6% 15.0% EBITDA 10.6% 13.3% 31.0% 16.9% 20.6% 16.8% EBITA 7.7% 15.4% 45.5% 23.3% 26.1% 18.5% EBIT 7.6% 15.4% 46.5% 23.0% 25.5% 18.0% Earnings from Cont. Ops. 2.3% NM 19.3% 29.2% 31.7% 29.6% Net Income 2.5% NM 19.2% 28.9% 31.3% 29.0% Normalized Net Income 19.1% 18.0% 25.2% 23.0% 27.3% 29.4% Diluted EPS before Extra 4.4% NM 18.2% 28.0% 32.7% 29.3%

Accounts Receivable (8.3%) (10.2%) 6.6% 11.2% 20.7% 21.5% Inventory (0.1%) 6.5% 26.9% 37.4% 17.7% 12.7% Net PP&E (9.9%) 1.9% 7.0% 20.4% 10.5% 10.3% Total Assets (1.9%) 5.0% 13.6% 22.9% 16.1% 15.3%

23 of 150 Tangible Book Value NM NM 113.8% 65.1% 54.3% 49.8% Common Equity 38.3% 46.4% 35.7% 35.4% 35.1% 32.8% Cash from Ops. 103.4% 21.5% (11.4%) (3.2%) 12.7% 14.7% Capital Expenditures (45.8%) 56.3% 42.2% 48.7% (9.1%) 5.3% Levered Free Cash Flow NM NM (19.9%) (19.8%) NM NM Unlevered Free Cash Flow NM (37.6%) (18.9%) (18.8%) (4.9%) 254.8% Dividend per Share NA NA NA NA NA NA

Compound Annual Growth Rate Over Five Years Total Revenue 6.0% 6.4% 11.7% 14.6% 14.3% 13.3% Gross Profit 7.6% 4.5% 10.2% 15.7% 16.1% 14.8% EBITDA 7.2% 2.7% 12.4% 16.8% 26.0% 20.3% EBITA 5.2% (0.1%) 14.2% 20.9% 34.6% 26.3% EBIT 4.9% (0.2%) 14.1% 21.0% 34.6% 26.1% Earnings from Cont. Ops. 5.1% 23.3% 14.3% NM 22.0% 18.1% Net Income 6.0% 23.0% 14.2% NM 21.9% 17.8% Normalized Net Income 6.6% 4.9% 21.4% 21.5% 24.5% 21.3% Diluted EPS before Extra (1.9%) 15.3% 14.8% NM 21.4% 17.2%

Accounts Receivable (0.3%) (4.6%) (2.1%) 2.1% 10.4% 13.6% Inventory (0.1%) 6.5% 15.4% 16.6% 18.8% 18.5% Net PP&E 2.9% 6.9% 0.6% 6.9% 9.3% 11.5% Total Assets 6.5% 3.7% 7.8% 11.7% 13.1% 15.8%

Tangible Book Value (11.9%) 5.6% NM NM 85.5% 58.8% Common Equity 3.0% 11.4% 38.8% 40.4% 35.1% 32.1% Cash from Ops. 24.6% (1.2%) 39.2% 12.6% 7.6% 7.5% Capital Expenditures (21.9%) 18.8% (17.8%) 14.7% 42.1% 55.1% Levered Free Cash Flow NM NM NM 144.1% NM (12.9%) Unlevered Free Cash Flow NM (56.4%) NM 47.6% (50.0%) (12.8%) Dividend per Share NA NA NA NA NA NA

24 of 150 Sports Direct International plc (LSE:SPD) > Financials > Industry Specific

In Millions of the reported currency, except per share items. Restatement: Latest Filings Period Type: Annual Currency: Reported Currency Conversion: Historical Order: Latest on Right Units: S&P Capital IQ (Default) Decimals: Capital IQ (Default)

Industry Specific For the Fiscal Period Ending 12 months 12 months 12 months 12 months 12 months 12 months Apr-25-2010 Apr-24-2011 Apr-29-2012 Apr-28-2013 Apr-27-2014 Apr-26-2015 Currency GBP GBP GBP GBP GBP GBP Retail Specific Data Total Stores 452 472 550 676 756 765

Total Same Store Sales Growth 3.4% 6.6% 0.7% 10.6% 10.5% 7.4%

Gross Margin 40.6% 41.2% 40.5% 40.9% 42.7% 43.8%

Retail Revenues 1,189.0 1,281.1 1,418.8 1,688.2 2,153.1 2,222.4 Wholesale Revenues 190.8 196.7 209.7 178.3 185.2 193.3 Online Revenues 48.6 95.7 179.9 288.4 335.4 383.8

Total Retail Sq. Ft. (Net) 4,349,000 - - - - -

Owned / Operated Store Data Total Owned/Operated Stores 452 472 550 676 756 765

Owned/Operated Same Store Sales Growth 3.4% 6.6% 0.7% 10.6% 10.5% 7.4%

Filing Date Jul-14-2011 Aug-10-2012 Jul-18-2013 Aug-28-2014 Jul-16-2015 Jul-16-2015

25 of 150 Sports Direct International plc (LSE:SPD) > Financials > Segments

In Millions of the reported currency. View By: Line Items Restatement: Latest Filings Period Type: Annual Order: Latest on Right Currency: Reported Currency Conversion: Historical Units: S&P Capital IQ (Default) Decimals: Capital IQ (Default) Business Segments Reclassified Reclassified Reclassified Reclassified For the Fiscal Period Ending 12 months 12 months 12 months 12 months 12 months 12 months Apr-25-2010 Apr-24-2011 Apr-29-2012 Apr-28-2013 Apr-27-2014 Apr-26-2015 Currency GBP GBP GBP GBP GBP GBP Revenues Retail - Sports Retail - - - 1,841.6 2,274.6 2,398.5 Retail - Premium Lifestyle - - 114.8 143.3 214.1 207.6 Brands 194.2 190.6 199.2 242.8 247.5 251.9 Corporate (6.1) (3.0) (3.3) (42.1) (30.1) (25.5) Retail - UK Sports 1,143.5 1,279.3 1,368.1 - - - Retail - International Retail 120.1 132.3 157.0 - - - Total Revenues 1,451.6 1,599.2 1,835.8 2,185.6 2,706.0 2,832.6

EBITDA Retail - Sports Retail - - - 260.0 321.2 356.8 Retail - Premium Lifestyle - - (5.9) 1.0 (20.4) (7.7) Brands - - 25.0 27.0 30.2 34.1 Retail - UK Sports - - 210.3 - - - Retail - International Retail - - 10.6 - - - Total EBITDA - - 240.1 287.9 331.1 383.2

Gross Profit Before Tax Retail - Sports Retail - - - 738.3 975.0 1,069.1 Retail - Premium Lifestyle - - 34.6 62.7 86.3 80.5 Brands 74.1 77.7 80.8 93.8 93.7 91.2 Retail - UK Sports 462.4 523.5 560.8 - - - Retail - International Retail 52.7 57.7 68.1 - - - Total Gross Profit Before Tax 589.1 658.9 744.3 894.8 1,154.9 1,240.8

Operating Profit Before Tax Retail - Sports Retail - - - 192.8 254.7 285.5 Retail - Premium Lifestyle - - (7.6) (1.1) (25.7) (11.2) Brands 15.2 17.9 18.3 18.3 23.8 28.0 Retail - UK Sports 89.0 113.1 140.2 - - - Retail - International Retail 3.5 5.6 4.2 - - - Total Operating Profit Before Tax 107.8 136.6 155.2 210.0 252.8 302.3

26 of 150 Assets Retail - Sports Retail - - - 1,213.2 1,651.2 1,726.9 Retail - Premium Lifestyle - - 22.6 37.3 96.6 24.4 Brands 252.7 242.3 246.9 191.1 182.7 190.8 Corporate (107.8) (86.7) (97.2) (32.9) (229.8) (168.4) Retail - UK Sports - - 868.5 - - - Retail - International Retail - - 91.5 - - - Retail 815.5 760.6 - - - - Total Assets 960.4 916.2 1,132.2 1,408.6 1,700.7 1,773.7

Depreciation & Amortization Retail - Sports Retail - - - 43.6 51.9 58.4 Retail - Premium Lifestyle - - 1.7 2.0 5.4 3.2 Brands 4.7 4.6 6.7 7.0 6.5 6.1 Retail - UK Sports - - 47.0 - - - Retail - International Retail - - 7.1 - - - Retail 45.6 58.1 - - - - Total Depreciation & Amortization 50.3 62.7 62.5 52.6 63.8 67.8

Capital Expenditure Retail - Sports Retail - - - (54.4) (57.6) (93.5) Retail - Premium Lifestyle - - (6.1) (13.7) (7.0) (2.3) Brands (2.0) (1.2) (24.4) (5.7) (4.5) (4.4) Retail - UK Sports - - (120.3) - - - Retail - International Retail - - (7.3) - - - Retail (17.4) (24.8) - - - - Total Capital Expenditure (19.4) (26.0) (158.2) (73.8) (69.1) (100.3)

Filing Date Jul-14-2011 Aug-10-2012 Jul-18-2013 Aug-28-2014 Jul-16-2015 Jul-16-2015

Geographic Segments Reclassified Reclassified Reclassified Reclassified For the Fiscal Period Ending 12 months 12 months 12 months 12 months 12 months 12 months Apr-25-2010 Apr-24-2011 Apr-29-2012 Apr-28-2013 Apr-27-2014 Apr-26-2015 Currency GBP GBP GBP GBP GBP GBP Revenues United Kingdom (UK) 1,182.7 1,316.6 1,528.5 1,842.4 2,063.7 2,252.4 Non-United Kingdom (UK) 269.0 282.6 307.3 343.2 642.2 580.2 Total Revenues 1,451.6 1,599.2 1,835.8 2,185.6 2,706.0 2,832.6

27 of 150 Assets United Kingdom (UK) 823.2 760.6 941.2 1,214.3 1,526.4 1,564.9 Non-United Kingdom (UK) 245.0 242.3 288.3 227.2 404.1 377.3 Corporate (107.8) (86.7) (97.2) (32.9) (229.8) (168.4) Total Assets 960.4 916.2 1,132.2 1,408.6 1,700.7 1,773.7

Capital Expenditure United Kingdom (UK) (15.2) (14.1) (148.3) (59.6) (51.5) (81.8) Non-United Kingdom (UK) (4.2) (11.9) (9.9) (14.2) (17.6) (18.5) Total Capital Expenditure (19.4) (26.0) (158.2) (73.8) (69.1) (100.3)

Filing Date Jul-14-2011 Aug-10-2012 Jul-18-2013 Aug-28-2014 Jul-16-2015 Jul-16-2015

28 of 150

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29 of 150 Sports Direct International plc (LSE:SPD) > Quick Comparable Analysis > Financial Data

Details Template: Capital IQ Default Comps Currency: US Dollar As-Of Date: Mar-28-2016

Company Comp Set Company Name Day Close Price Shares Market LTM Net LTM Total LTM Total Enterprise LTM Tangible Book LTM Filing Date, LTM Total LTM LTM EBIT LTM Diluted EPS NTM Revenue NTM EBITDA NTM EPS Latest Outstanding Capitalization Debt Pref. Equity Minority Value Latest Value/Share Income Statement Revenue EBITDA Excl. Extra Items (Capital IQ) (Capital IQ) (Capital IQ) Latest Latest Interest Debenhams plc (LSE:DEB) 1.02 1,227.4 1,253.6 452.7 - - 1,706.3 ( 0.09) Oct-28-2015 3,281 314.5 189.6 0.11 4,068.09 348.89 0.11 ASOS Plc (AIM:ASC) 43.4 83.0 3,602.2 (168.4) - ( 0.04) 3,433.8 2.74 Oct-30-2015 1,626 69.6 57.9 0.63 1,966.32 121.2 0.77 Next Plc (LSE:NXT) 79.88 145.7 11,635.9 1,278.4 - - 12,914.3 2.56 Mar-24-2016 5,900 1,398.2 1,231.5 6.26 6,065.46 1,411.45 6.35 Zalando SE (XTRA:ZAL) 31.77 247.1 7,848.9 (1,254.9) - - 6,594.0 5.67 Mar-02-2016 3,302 124.5 99.9 0.54 4,174.53 209.8 0.5 Halfords Group plc (LSE:HFD) 5.54 194.4 1,076.5 88.1 - - 1,164.6 0.21 Nov-12-2015 1,462 153.1 119.1 0.46 1,477.38 161.74 0.46 Marks & Spencer Group plc 5.54 1,618.7 8,974.9 2,588.2 - ( 3.96) 11,559.1 1.88 Nov-04-2015 14,633 1,625.4 1,112.7 0.37 14,860.61 1,910.71 0.5 JD(LSE:MKS) Sports Fashion plc (LSE:JD.) 15.6 194.6 3,035.6 (141.7) - 18.79 2,912.6 1.56 Oct-20-2015 2,348 239.2 174.4 0.61 2,545.05 269.41 0.75 Booker Group PLC (LSE:BOK) 2.31 1,765.6 4,078.0 (166.8) - - 3,911.2 0.08 Oct-15-2015 6,681 238.9 208.1 0.1 7,089.93 249.72 0.1 Cabela's Incorporated (NYSE:CAB) 47.24 67.8 3,203.8 4,596.7 - - 7,800.5 26.92 Feb-22-2016 3,998 455.8 323.1 2.67 4,248.41 505.47 3.18 WH Smith PLC (LSE:SMWH) 25.43 112.8 2,869.3 (21.2) - - 2,848.1 1.09 Oct-30-2015 1,664 214.7 172.3 1.21 1,697.43 242.49 1.34

Sports Direct International plc 4.92 596.4 2,932.0 28.7 - ( 1.66) 2,959.1 2.56 Dec-10-2015 4,002 539.7 422.0 0.61 4,114.58 547.11 0.52 (LSE:SPD) Summary Statistics Day Close Price Shares Market LTM Net LTM Total LTM Total Enterprise LTM Tangible Book LTM Filing Date, LTM Total LTM LTM EBIT LTM Diluted EPS NTM Revenue NTM EBITDA NTM EPS Latest Outstanding Capitalization Debt Pref. Equity Minority Value Latest Value/Share Income Statement Revenue EBITDA Excl. Extra Items (Capital IQ) (Capital IQ) (Capital IQ) Latest Latest Interest High 79.88 1,765.6 11,635.9 4,596.7 - 18.79 12,914.3 26.92 - 14,633 1,625.4 1,231.5 6.26 14,860.61 1,910.71 6.35 Low 1.02 67.8 1,076.5 (1,254.9) - ( 3.96) 1,164.6 ( 0.09) - 1,462 69.6 57.9 0.1 1,477.38 121.2 0.1 Mean 25.77 565.7 4,757.9 725.1 - 4.93 5,484.5 4.26 - 4,489 483.4 368.9 1.29 4,819.32 543.09 1.41 Median 20.51 194.5 3,403.0 33.5 - ( 0.04) 3,672.5 1.72 - 3,292 239.1 182.0 0.57 4,121.31 259.57 0.63

Displaying 11 Companies.

All values in millions, except per share data and ratios. Values converted at today's spot rate. Companies by default are sorted by S&P Capital IQ’s proprietary relevancy score.

Historical Equity Pricing Data supplied by

30 of 150 Sports Direct International plc (LSE:SPD) > Quick Comparable Analysis > Trading Multiples

Details Template: Capital IQ Default Comps Currency: US Dollar As-Of Date: Mar-28-2016

Company Comp Set Company Name TEV/Total Revenues TEV/EBITDA TEV/EBIT LTM - P/Diluted EPS Before P/TangBV LTM NTM TEV/Forward Total NTM TEV/Forward NTM Forward P/E LTM - Latest LTM - Latest Latest Extra LTM - Latest - Latest Revenue (Capital IQ) EBITDA (Capital IQ) (Capital IQ)

Debenhams plc (LSE:DEB) 0.5x 5.4x 9.0x 9.5x NM 0.42x 4.90x 9.41x ASOS Plc (AIM:ASC) 2.1x 49.4x 59.3x 69.2x 15.8x 1.75x 28.39x 56.45x Next Plc (LSE:NXT) 2.2x 9.2x 10.5x 12.8x 31.2x 2.13x 9.17x 12.62x Zalando SE (XTRA:ZAL) 2.0x 53.8x 67.2x 59.3x 5.6x 1.58x 31.45x 62.97x Halfords Group plc (LSE:HFD) 0.8x 7.6x 9.8x 12.0x 26.8x 0.79x 7.22x 12.04x Marks & Spencer Group plc (LSE:MKS) 0.8x 7.1x 10.4x 15.0x 2.9x 0.78x 6.06x 11.19x JD Sports Fashion plc (LSE:JD.) 1.2x 12.2x 16.7x 25.4x 10.0x 1.15x 10.83x 20.79x Booker Group PLC (LSE:BOK) 0.6x 16.4x 18.8x 23.6x 30.1x 0.55x 15.70x 23.17x Cabela's Incorporated (NYSE:CAB) 2.0x 17.1x 24.1x 17.7x 1.8x 1.84x 15.43x 14.84x WH Smith PLC (LSE:SMWH) 1.7x 13.3x 16.5x 21.0x 23.4x 1.68x 11.77x 19.06x

Sports Direct International plc (LSE:SPD) 0.7x 5.4x 6.9x 8.0x 1.9x 0.72x 5.42x 9.51x

Summary Statistics TEV/Total Revenues TEV/EBITDA TEV/EBIT LTM - P/Diluted EPS Before P/TangBV LTM NTM TEV/Forward Total NTM TEV/Forward NTM Forward P/E LTM - Latest LTM - Latest Latest Extra LTM - Latest - Latest Revenue (Capital IQ) EBITDA (Capital IQ) (Capital IQ)

High 2.2x 53.8x 67.2x 69.2x 31.2x 2.13x 31.45x 62.97x Low 0.5x 5.4x 9.0x 9.5x 1.8x 0.42x 4.90x 9.41x Mean 1.4x 19.1x 24.2x 26.6x 16.4x 1.27x 14.09x 24.25x Median 1.5x 12.7x 16.6x 19.4x 15.8x 1.36x 11.30x 16.95x

Displaying 11 Companies.

All values in millions, except per share data and ratios. Values converted at today's spot rate. Companies by default are sorted by S&P Capital IQ’s proprietary relevancy score.

Historical Equity Pricing Data supplied by 31 of 150 Sports Direct International plc (LSE:SPD) > Quick Comparable Analysis > Operating Statistics

Details Template: Capital IQ Default Comps Currency: US Dollar As-Of Date: Mar-28-2016

Company Comp Set Company Name LTM Gross LTM EBITDA LTM EBIT LTM Net LTM Total LTM EBITDA, 1 Yr LTM EBIT, 1 Yr LTM Net Income, 1 LTM Total LTM Total NTM LT EPS 5 Year Beta Margin % Margin % Margin % Income Revenues, 1 Yr Growth % Growth % Yr Growth % Debt/Capital % Debt/EBITDA Growth Rate Margin % Growth % (Capital IQ) Debenhams plc (LSE:DEB) 13% 10% 5.8% 4.03% 0.43% 2.96% 4.84% 7.22% 29.27% 1.6x - 0.79 ASOS Plc (AIM:ASC) 50% 4% 3.6% 3.20% 17.97% (0.41%) (6.04%) (0.23%) - - - 1.21 Next Plc (LSE:NXT) 35% 24% 20.9% 15.96% 4.43% 8.21% 8.66% 5.02% 75.70% 1.0x - 0.31 Zalando SE (XTRA:ZAL) 45% 4% 3.0% 4.11% 33.61% 41.50% 44.12% 157.96% 1.37% 0.2x - - Halfords Group plc (LSE:HFD) 53% 10% 8.1% 6.18% 6.33% 6.80% 3.82% 5.61% 18.13% 0.8x - 0.68 Marks & Spencer Group plc (LSE:MKS) 38% 11% 7.6% 4.16% 0.25% (0.36%) 8.59% (14.42%) 40.61% 1.8x - 0.63 JD Sports Fashion plc (LSE:JD.) 48% 10% 7.4% 4.47% 25.97% 25.44% 24.53% 55.53% 15.40% 0.4x - 0.57 Booker Group PLC (LSE:BOK) 5% 4% 3.1% 2.60% 0.14% 12.06% 13.39% 15.46% - - - 0.14 Cabela's Incorporated (NYSE:CAB) 43% 11% 8.1% 4.74% 9.60% 1.49% (3.84%) (6.14%) 72.22% 10.4x - 1.17 WH Smith PLC (LSE:SMWH) 58% 13% 10.4% 8.57% 1.46% 7.80% 8.93% 9.78% 11.45% 0.1x - 0.56

Sports Direct International plc (LSE:SPD) 44% 13% 10.5% 9.57% 1.42% 15.49% 13.91% 44.78% 12.46% 0.5x - 0.79

Summary Statistics LTM Gross LTM EBITDA LTM EBIT LTM Net LTM Total LTM EBITDA, 1 Yr LTM EBIT, 1 Yr LTM Net Income, 1 LTM Total LTM Total NTM LT EPS 5 Year Beta Margin % Margin % Margin % Income Revenues, 1 Yr Growth % Growth % Yr Growth % Debt/Capital % Debt/EBITDA Growth Rate Margin % Growth % (Capital IQ) High 58% 24% 20.9% 15.96% 33.61% 41.50% 44.12% 157.96% 75.70% 10.4x - 1.21 Low 5% 4% 3.0% 2.60% 0.14% (0.41%) (6.04%) (14.42%) 1.37% 0.1x - 0.14 Mean 39% 10% 7.8% 5.80% 10.02% 10.55% 10.70% 23.58% 33.02% 2.0x - 0.67 Median 44% 10% 7.5% 4.32% 5.38% 7.30% 8.63% 6.42% 23.70% 0.9x - 0.63

Displaying 11 Companies.

All values in millions, except per share data and ratios. Values converted at today's spot rate. Companies by default are sorted by S&P Capital IQ’s proprietary relevancy score.

Historical Equity Pricing Data supplied by

32 of 150 Sports Direct International plc (LSE:SPD) > Quick Comparable Analysis > Implied Valuation

Details Template: Capital IQ Default Comps Currency: US Dollar As-Of Date: Mar-28-2016

Company Comp Set Company Name LTM Total LTM EBITDA LTM EBIT NTM Revenue (Capital IQ) NTM EBITDA LTM Basic EPS NTM EPS (Capital LTM Tangible Book Revenue (Capital IQ) IQ) Value/Share Sports Direct International plc 4,002 539.7 422.0 4,114.58 547.11 0.65 0.52 2.56 (LSE:SPD) Total Enterprise Value Multiples Pricing Multiples

LTM TEV/Total LTM LTM TEV/EBIT NTM TEV/Forward Total NTM TEV/Forward LTM P/Diluted EPS NTM Forward P/E LTM P/TangBV Revenues TEV/EBITDA Revenue EBITDA Before Extra

High 2.2x 53.8x 67.2x 2.13x 31.45x 69.2x 62.97x 31.2x Low 0.5x 5.4x 9.0x 0.42x 4.90x 9.5x 9.41x 1.8x Mean 1.4x 19.1x 24.2x 1.27x 14.09x 26.6x 24.25x 16.4x Median 1.5x 12.7x 16.6x 1.36x 11.30x 19.4x 16.95x 15.8x

Implied Enterprise Value High 8,760 29,008.5 28,356.9 8,779.78 17,208.84 Low 2,081 2,928.6 3,798.0 1,729.63 2,681.72 Mean 5,561 10,331.6 10,228.7 5,214.09 7,710.66 Median 5,908 6,864.6 7,011.1 5,611.79 6,183.97

+ Total Cash & ST Investments 231 231 231 231 231 - Total Debt 259.4 259.4 259.4 259.4 259.4 - Total Pref. Equity ------Minority Interest ( 1.66) ( 1.66) ( 1.66) ( 1.66) ( 1.66)

= Implied Equity Value High 8,733 28,981.4 28,329.9 8,752.74 17,181.8 26,688.45 19,455.7 47,693.29 Low 2,054 2,901.5 3,770.9 1,702.59 2,654.68 3,669.52 2,907.74 2,682.52 Mean 5,534 10,304.5 10,201.6 5,187.05 7,683.62 10,245.97 7,493.21 25,084.56 Median 5,881 6,837.5 6,984.1 5,584.75 6,156.92 7,467.94 5,236.55 24,187.61

/ Shares Outstanding 596.43 596.43 596.43 596.43 596.43 596.43 596.43 596.43

33 of 150 = Implied Price per Share High 15 48.6 47.5 14.68 28.81 44.75 32.62 79.96 Low 3 4.9 6.3 2.85 4.45 6.15 4.88 4.5 Mean 9 17.3 17.1 8.7 12.88 17.18 12.56 42.06 Median 10 11.5 11.7 9.36 10.32 12.52 8.78 40.55

Mean Equity Value Across Multiples Equity Value Price Per Share

High 23,227.05 38.94 Low 2,792.99 4.68 Mean 10,216.78 17.13 Median 8,542.05 14.32

All values in millions, except per share data and ratios. Values converted at today's spot rate.

Historical Equity Pricing Data supplied by

34 of 150 Sports Direct International plc (LSE:SPD) > Quick Comparable Analysis > Credit Health Panel

Details Template: Capital IQ Default Comps Currency: US Dollar As-Of Date: Mar-28-2016

Company Comp Set Company Name LTM Period Ending Financials Updated Country Primary Industry Classification Overall Operational Solvency Liquidity

Booker Group PLC (LSE:BOK) 1 2 1 2 Sep-11-2015 Oct-15-2015 United Kingdom Food Distributors WH Smith PLC (LSE:SMWH) 2 1 1 3 Aug-31-2015 Dec-08-2015 United Kingdom Specialty Stores Zalando SE (XTRA:ZAL) 2 4 3 1 Dec-31-2015 Mar-06-2016 Germany Internet Retail JD Sports Fashion plc (LSE:JD.) 3 1 3 3 Aug-01-2015 Oct-21-2015 United Kingdom Specialty Stores ASOS Plc (AIM:ASC) 3 3 2 3 Aug-31-2015 Oct-31-2015 United Kingdom Internet Retail Cabela's Incorporated (NYSE:CAB) 3 3 4 1 Jan-02-2016 Feb-23-2016 United States Specialty Stores Marks & Spencer Group plc (LSE:MKS) 4 3 4 4 Sep-26-2015 Nov-05-2015 United Kingdom Department Stores Halfords Group plc (LSE:HFD) 4 4 3 4 Oct-02-2015 Nov-12-2015 United Kingdom Automotive Retail Debenhams plc (LSE:DEB) 4 4 4 4 Aug-29-2015 Dec-11-2015 United Kingdom Department Stores

Sports Direct International plc (LSE:SPD) 1 2 2 2 Oct-25-2015 Dec-11-2015 United Kingdom Specialty Stores

Displaying 10 Companies.

All values in millions, except per share data and ratios. Values converted at today's spot rate.

Credit Health Panel metric values are calculated by converting all currencies to USD based on yesterday’s spot rate. Currencies displayed on the page are converted at today’s spot rate from yesterday’s USD value.

35 of 150

Sports Direct Capital IQ spreadsheets: Estimates

Data Provided by Historical Equity Pricing Data supplied by

36 of 150 Sports Direct International plc (LSE:SPD) > Capital IQ Estimates > Consensus

Currency: Reported Currency Conversion: Today's Spot Rate Units: Capital IQ (Default) Decimals: CapitalIQ (Default) Consolidation: Consolidated Acctg. Standard: IFRS

Current Fiscal Year End: Apr-30-2016 | FY 2016 Earnings Release Date: Jul-07-2016

LSE:SPD (GBP) Mean Median High/Low Std. Dev. No. of Estimates. LSE:SPD - Recommendation: Outperform (2.46) Target Price 4.73 4.85 5.70/3.25 0.73 12/12 1 - Buy 4 LT Growth 6.15% 5.59% 9.70%/3.70% 2.28 4/4 2 - Outperform 3 3 - Hold 4 4 - Underperform 0 5 - Sell 2 0 - No Opinion 0

Market Summary LSE:SPD LSE:SPD (IFRS|GBP) Currency British Pound Current Half Current Year NTM Latest Price/Last Close Price 3.48/3.48 EPS Normalized 0.17 0.36 0.37 52 Wk. High/Low 8.21/3.45 Company Level (IFRS|GBP) Potential Upside/Diff. from Target Price 35.90 %/1.25 Revenue 1,373.45 2,822.43 2912.71 EBITDA - 378.1 387.3

Fiscal Years LSE:SPD (GBP) 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 EPS Normalized 0.37 A 0.36 E 0.37 E 0.40 E ------Final Est. 0.37 E ------Median 0.37 E 0.36 E 0.37 E 0.40 E ------High 0.41 E 0.41 E 0.41 E 0.47 E ------Low 0.35 E 0.34 E 0.31 E 0.33 E ------Std. Dev. 0.02 0.02 0.03 0.04 ------No. of Estimates 11/11 12/12 12/12 10/10 ------Acctg. Standard IFRS IFRS IFRS IFRS ------EPS (GAAP) 0.39 A 0.40 E 0.38 E 0.40 E ------Final Est. 0.36 E ------Median 0.35 E 0.39 E 0.38 E 0.38 E ------High 0.37 E 0.47 E 0.44 E 0.48 E ------Low 0.35 E 0.33 E 0.32 E 0.34 E ------Std. Dev. 0.01 0.05 0.04 0.05 ------No. of Estimates 5/5 6/6 6/6 5/5 ------Acctg. Standard IFRS IFRS IFRS IFRS ------

Company Level (GBP) 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Revenue 2,832.56 A 2,822.43 E 3,002.98 E 3,111.43 E 3,211.00 E 3,321.50 E 3,439.50 E 3,545.00 E 3,670.50 E 3,783.00 E 3,889.00 E Final Est. 2,855.53 E ------Median 2,838.50 E 2,813.15 E 2,980.00 E 3,126.50 E 3,211.00 E 3,321.50 E 3,439.50 E 3,545.00 E 3,670.50 E 3,783.00 E 3,889.00 E High 2,923.89 E 2,899.01 E 3,172.26 E 3,320.21 E 3,230.00 E 3,330.00 E 3,445.00 E 3,549.00 E 3,690.00 E 3,801.00 E 3,896.00 E Low 2,813.00 E 2,765.20 E 2,838.50 E 2,868.60 E 3,192.00 E 3,313.00 E 3,434.00 E 3,541.00 E 3,651.00 E 3,765.00 E 3,882.00 E Std. Dev. 31.7 31.99 85.89 116.68 19.0 8.5 5.5 4.0 19.5 18.0 7.0 No. of Estimates 10/10 11/11 11/11 9/9 2/2 2/2 2/2 2/2 2/2 2/2 2/2 Acctg. Standard IFRS IFRS IFRS IFRS IFRS IFRS IFRS IFRS IFRS IFRS IFRS EBITDA 383.20 A 378.10 E 396.50 E 413.98 E ------Final Est. 370.92 E ------Median 370.88 E 380.02 E 385.50 E 413.50 E ------37 of 150 High 383.00 E 395.40 E 431.80 E 467.99 E ------Low 358.50 E 356.00 E 346.00 E 352.00 E ------Std. Dev. 8.52 10.01 29.28 36.87 ------No. of Estimates 10/10 12/12 11/11 9/9 ------Acctg. Standard IFRS IFRS IFRS IFRS ------

Calendar Years LSE:SPD (GBP) 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 EPS Normalized 0.38 A 0.37 E 0.39 E ------Final Est. 0.37 E ------Median 0.36 E 0.37 E 0.39 E ------High 0.41 E 0.41 E 0.45 E ------Low 0.34 E 0.32 E 0.32 E ------Acctg. Standard IFRS IFRS IFRS ------EPS (GAAP) 0.40 E 0.39 E 0.40 E ------Median 0.38 E 0.38 E 0.38 E ------High 0.45 E 0.45 E 0.47 E ------Low 0.34 E 0.32 E 0.33 E ------Acctg. Standard IFRS IFRS IFRS ------

Company Level (GBP) 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Revenue 2,824.97 E 2,957.85 E 3,084.32 E 3,186.11 E 3,293.88 E 3,410.00 E 3,518.63 E 3,639.13 E 3,754.88 E 3,862.50 E Median 2,819.49 E 2,938.29 E 3,089.88 E 3,189.88 E 3,293.88 E 3,410.00 E 3,518.63 E 3,639.13 E 3,754.88 E 3,862.50 E High 2,905.23 E 3,103.95 E 3,283.22 E 3,252.55 E 3,305.00 E 3,416.25 E 3,523.00 E 3,654.75 E 3,773.25 E 3,872.25 E Low 2,777.15 E 2,820.18 E 2,861.08 E 3,111.15 E 3,282.75 E 3,403.75 E 3,514.25 E 3,623.50 E 3,736.50 E 3,852.75 E Acctg. Standard IFRS IFRS IFRS IFRS IFRS IFRS IFRS IFRS IFRS IFRS EBITDA 379.37 E 391.90 E 409.61 E ------Median 377.74 E 384.13 E 406.50 E ------High 392.30 E 422.70 E 458.95 E ------Low 356.63 E 348.50 E 350.50 E ------Acctg. Standard IFRS IFRS IFRS ------

Fiscal Quarters Company Level (GBP) FQ2 2015 - Oct 2014 FQ2 2016 - Oct 2015 Revenue 756.00 E 764.00 E Median 756.00 E 764.00 E High 756.00 E 764.00 E Low 756.00 E 764.00 E Std. Dev. - - No. of Estimates 1/1 1/1 Acctg. Standard IFRS IFRS

Fiscal Halves LSE:SPD (GBP) FH2 2015 - Apr 2015 FH1 2016 - Oct 2015 FH2 2016 - Apr 2016 EPS Normalized 0.18 A 0.21 A 0.17 E Final Est. 0.17 E - - Median 0.16 E - 0.17 E High 0.19 E - 0.17 E Low 0.16 E - 0.17 E Std. Dev. 0.01 - - No. of Estimates 3/3 - 1/1 Acctg. Standard IFRS IFRS IFRS

38 of 150 Company Level (GBP) FH2 2015 - Apr 2015 FH1 2016 - Oct 2015 FH2 2016 - Apr 2016 Revenue 1,399.66 A - 1,373.45 E Final Est. 1,396.03 E - - Median 1,401.10 E - 1,373.45 E High 1,407.00 E - 1,373.45 E Low 1,380.00 E - 1,373.45 E Std. Dev. 11.59 - - No. of Estimates 3/3 - 1/1 Acctg. Standard IFRS - IFRS EBITDA 180.10 A - - Final Est. 177.50 E - - Median 177.50 E - - High 180.00 E - - Low 175.00 E - - Std. Dev. 2.5 - - No. of Estimates 2/2 - - Acctg. Standard IFRS - -

39 of 150 Sports Direct International plc (LSE:SPD) > Capital IQ Estimates > Multiples

Currency: Reported CurrencyConversion: Today's Spot Rate Units: Capital IQ (Default)Decimals: CapitalIQ (Default) Consolidation: ConsolidatedAcctg. Standard: IFRS Dilution: Basic

Current Fiscal Year End: Apr-30-2016

LSE:SPD (Current Fiscal Year End: Apr-30-2016) Based on Market Price TEV/REV TEV/EBITDA TEV/EBIT Price/Earnings PEG P/BV NTM 0.72x 5.42x - 9.51x 1.55x - FY 2016 0.74x 5.55x - 9.62x 1.56x - FY 2017 0.70x 5.29x - 9.41x 1.53x - FY 2018 0.67x 5.07x - 8.81x 1.43x - FY 2019 0.65x - - - - - FY 2020 0.63x - - - - - FY 2021 0.61x - - - - - FY 2022 0.59x - - - - - FY 2023 0.57x - - - - - CY 2015 0.74x 5.53x - 9.54x 1.55x - CY 2016 0.71x 5.36x - 9.46x 1.54x - CY 2017 0.68x 5.13x - 8.95x 1.46x - CY 2018 0.66x - - - - - CY 2019 0.64x - - - - - CY 2020 0.62x - - - - - CY 2021 0.60x - - - - - CY 2022 0.58x - - - - -

40 of 150 Sports Direct International plc (LSE:SPD) > Capital IQ Estimates > Surprise

Currency: Reported CurrencyConversion: Today's Spot Rate Units: Capital IQ (Default)Decimals: CapitalIQ (Default) Consolidation: ConsolidatedAcctg. Standard: IFRS

Current Fiscal Year End: Apr-30-2016 | FY 2016 Earnings Release Date: Jul-07-2016 Fiscal Years LSE:SPD (GBP) 2015 EPS Normalized 0.00% Difference - Actual 0.37 A Estimate 0.37 E Announced Date Jul-16-2015 Acctg. Standard IFRS EPS (GAAP) 8.33% Difference 0.03 Actual 0.39 A Estimate 0.36 E Announced Date Jul-16-2015 Acctg. Standard IFRS

Company Level (GBP) 2015 Revenue (0.80%) Difference ( 22.97) Actual 2,832.56 A Estimate 2,855.53 E Announced Date Jul-16-2015 Acctg. Standard IFRS EBITDA 3.31% Difference 12.28 Actual 383.20 A Estimate 370.92 E Announced Date Jul-16-2015 Acctg. Standard IFRS

41 of 150 Fiscal Halves LSE:SPD (GBP) FH2 2015 - Apr 2015 FH1 2016 - Oct 2015 EPS Normalized 5.88% - Difference 0.01 - Actual 0.18 A 0.21 A Estimate 0.17 E - Announced Date Jul-16-2015 Dec-10-2015 Acctg. Standard IFRS IFRS

Company Level (GBP) FH2 2015 - Apr 2015 FH1 2016 - Oct 2015 Revenue 0.26% - Difference 3.63 - Actual 1,399.66 A - Estimate 1,396.03 E - Announced Date Jul-16-2015 - Acctg. Standard IFRS - EBITDA 1.46% - Difference 2.6 - Actual 180.10 A - Estimate 177.50 E - Announced Date Jul-16-2015 - Acctg. Standard IFRS -

42 of 150 Sports Direct International plc (LSE:SPD) > Capital IQ Estimates > Trends

Currency: Reported CurrencyConversion: Today's Spot Rate Units: Capital IQ (Default)Decimals: CapitalIQ (Default) Consolidation: ConsolidatedAcctg. Standard: IFRS

Current Fiscal Year End: Apr-30-2016 | FY 2016 Earnings Release Date: Jul-07-2016

EPS Normalized LSE:SPD (GBP) FH2 2016 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 Current 0.17 0.36 0.37 0.4 - - 1 month ago 0.17 0.37 0.4 0.44 - - 2 months ago 0.17 0.37 0.41 0.45 - - 3 months ago 0.18 0.41 0.47 0.52 0.57 - 6 months ago 0.15 0.42 0.49 0.55 0.66 0.75 9 months ago 0.19 0.43 0.49 0.54 - - 12 months ago 0.19 0.42 0.48 0.54 - - 18 months ago - 0.45 0.52 0.57 - -

EPS (GAAP) LSE:SPD (GBP) FH2 2016 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 Current - 0.4 0.38 0.4 - - 1 month ago - 0.4 0.41 0.46 - - 2 months ago - 0.41 0.44 0.5 - - 3 months ago - 0.31 0.48 0.55 - - 6 months ago - 0.43 0.5 0.57 - - 9 months ago - 0.43 0.5 - - - 12 months ago - 0.42 0.48 - - - 18 months ago - 0.44 0.51 - - -

Revenue Company Level (GBP) FQ3 2016 FQ4 2016 FH2 2016 FY 2016 FH1 2017 FH2 2017 FY 2017 FH1 2018 FH2 2018 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 FY 2025 Current - - 1373.45 2822.43 - - 3002.98 - - 3111.43 3211 3321.5 3439.5 3545 3670.5 3783 3889 1 month ago - - 1373.45 2823.95 - - 3024.85 - - 3144.84 3259.5 3370.5 3496.5 3609.5 3744.5 3866 3981.5 2 months ago - - 1373.45 2827.59 - - 3043.27 - - 3175.93 3259.5 3370.5 3496.5 3609.5 3744.5 3866 3981.5 3 months ago - - 1429.85 2858.3 - - 3127.79 - - 3289.61 3405.27 3646.5 3831 4016 4200.5 4384 4566 6 months ago 806 659 1490.66 2958.56 1546.1 1495.2 3176.3 1597.5 1560 3344.46 3671.85 3897.4 4008 4232 4468 4717 4980 9 months ago - - 1634.76 3046.62 - - 3273.61 - - 3448.33 3646.5 3863.5 4113.5 4358.5 4572 4772.5 - 12 months ago - - 1634.76 3032.89 - - 3242.12 - - 3440 3650.5 3867.5 4138 4340.5 4599 4824.5 - 18 months ago - - - 3202.68 - - 3395.68 - - 3720.1 ------

EBITDA Company Level (GBP) FQ3 2016 FQ4 2016 FH2 2016 FY 2016 FH1 2017 FH2 2017 FY 2017 FH1 2018 FH2 2018 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 FY 2025 Current - - - 378.1 - - 396.5 - - 413.98 ------1 month ago - - - 386.11 - - 415.69 - - 443.78 ------2 months ago - - - 392.04 - - 427.42 - - 462.93 ------3 months ago - - - 417.76 - - 466.36 - - 515.7 ------6 months ago - - 203.7 420.79 246.7 215.8 474.87 260.1 231.1 522.8 626.5 698.1 - - - - - 9 months ago - - - 425.45 - - 477.65 - - 518 ------12 months ago - - - 419.02 - - 468.64 - - 518 ------18 months ago - - - 442.49 - - 494.91 - - 579.3 ------

43 of 150

Sports Direct Annual Report 2015 (Pages 1 - 36)

Data Provided by Historical Equity Pricing Data supplied by

44 of 150 EVERYTHING IS CHANGING

45 of 150 KEY HIGHLIGHTS

• Sports Retail gross margin increased by 170 bps to 44.6% GROUP REVENUE +4.7% • Group underlying EBITDA increased by 15.7% to £383.2m (1) April 15 £2,832.6m

• Underlying profit before tax up 20.5% to £300.3m(1) April 14 £2,706.0m

April 13 £2,185.6m • Underlying free cash generation of £301.8m(2) April 12 £1,807.2m

• Sports Retail like-for-like stores gross contribution increased April 11 £1,599.2m by 7.4% (FY14: 10.5%)(3) ANNUAL REPORT 2015 ANNUAL REPORT

• Continued roll-out of large format city centre stores UNDERLYING EBITDA +15.7%

• Successful UK launch of Click and Collect in FY15 H2 April 15 £383.2m

April 14 £331.1m • Record EBITDA achieved v. 4th year Share Scheme target April 13 £287.9m

• Net debt decreased to £59.7m(4) April 12 £235.7m

(1) Underlying EBITDA, underlying profit before taxation and underlying EPS exclude realised foreign exchange April 11 £211.0m gains/losses in selling and administration costs, exceptional costs and the profit/loss on sale of strategic 2 investments. Underlying EBITDA also excludes the Share Scheme charges.

(2) Underlying free cash generation is defined as operating cash flow before working capital, made up of underlying EBITDA (before Share Scheme costs) plus realised foreign exchange gains and losses, less REPORTED PBT +30.9% corporation tax paid.

(3) Excludes contribution in Sport Eybl and Sports Experts AG (EAG) and Sportland International Group AS April 15 £313.4m (SIG) as the prior year comparative is not a full year.

(4) Net debt is borrowings less cash held. April 14 £239.5m

April 13 £207.2m

April 12 £148.0m

April 11 £118.8m

UNDERLYING EPS +21.2%

April 15 38.9p

April 14 32.1p

April 13 26.9p

April 12 18.7p

April 11 16.8p

46 of 150 “The Group has delivered another solid set of results in spite of challenging trading conditions including the adverse impact on performance during the period of IS CHANGING... EVERYTHING England’s early departure from the FIFA World Cup in Brazil and unseasonably mild weather during autumn, reducing footfall.

“However, with our ongoing focus on providing customers with exceptional quality and unbeatable value, we have continued to grow Group revenues and EBITDA and have succeeded in surpassing our fourth and final EBITDA target under the 2011 Share Scheme. The first of these awards will vest with participants in September 2015 and the second in September 2017. We owe our continued success to the commitment and hard work of those participants and we are delighted that we are able to reward them in this way. 3 “Trading since the period end has been in line with management expectations and will continue to be driven by improvements in product range and availability, optimisation of both our in-store and web offerings, the introduction of Click and Collect in the UK and further investment in our store portfolio.”

Dave Forsey Chief Executive

16 July 2015

47 of 150 SPORTS DIRECT AT A GLANCE

The Group operates through three strategic business segments: Sports Retail, Premium Lifestyle and Brands.

SPORTS RETAIL 85% TOTAL REVENUE £2,398.6m Up 5.5%

The Group’s Sports Retail division supplies a wide range of sports and leisure equipment, across an array of global brands, including Group owned brands such as Dunlop, Slazenger and Lonsdale, third party and licensed-in brands. This wide range of products, combined with extremely competitive pricing, attracts customers to both our stores and website in ever increasing numbers. As at 26 April 2015 Sports Retail operated out of 661 stores in the UK and the rest of Europe (excluding Northern ANNUAL REPORT 2015 ANNUAL REPORT Ireland). The majority of stores trade under the SPORTSDIRECT.com fascia. We continue to expand and develop our stores, with several relocations taking place in the year into larger and better configured space, so that we are better able to serve the needs of our customers. Investment has also continued in specialist performance areas, with visual merchandising improving across the whole of the division. In Europe, the Group’s growth has continued, with our products being offered via wholly-owned retail outlets, joint ventures with other retailers and stores within another retailer’s store. We have continued the integration of the recently acquired Sport Eybl and Sports Experts AG (EAG), and over the coming year will re-brand key Eybl Megastores to the Lillywhites fascia. During the year, as part of our European growth programme, we increased our European store portfolio by nine stores and entered one new country, with the opening of our Bern store in Switzerland. Our strategy remains to identify partners in new territories while continuing to expand our operations in the countries where we currently trade. Our online sales continue to increase, enhanced in the year by the successful introduction of UK Click and Collect and the 10 development of a streamlined checkout process.

PREMIUM LIFESTYLE 7% TOTAL REVENUE £207.6m Down 3.0%

Rationalisation of the division has taken place throughout the year, including the closure of loss-making stores, the mitigation of operating costs and the relocation of back-office functions.

The Premium Lifestyle division is a must for those fashion conscious shoppers who demand high-end and on trend apparel. The division centres on contemporary luxury with a brand focus, and leading stocked brands include Paul Smith, Fendi and Alexander McQueen. The division enables customers to express their individuality, with new collections regularly being added. Recent additions include White Premiata, Carven and Canada Goose.

BRANDS 8% TOTAL REVENUE £226.4m Up 4.1%

The Brands division licenses our brands to partners across the world through a committed network of licensing and distribution partners. The unique, integrated approach to brand management ensures consistency, and encourages continual investment and global success for the brands.

Focus on our brands is maintained through sponsorship of high-profile media personalities, events, teams and venues. Bolddog, a motorcycle display team made famous in the 2014 series of Britain’s Got Talent, are a recent addition to the No Fear brand, and Sno Zone in Reading is a winter sports venue which is sponsored by our Nevica brand. The Slazenger brand has recently signed a renewal sponsorship of The Championships, Wimbledon. Slazenger has sponsored the event since 1902, making this one of the longest partnerships in sporting history.

48 of 150 SPORTS STORES ACROSS EUROPE EVERYTHING IS CHANGING... EVERYTHING

Note: Includes associates in Iceland, Republic of Ireland and Northern Ireland that trade under the SPORTSDIRECT.com fascia.

49 of 150 CHAIRMAN’S STATEMENT

I am pleased to report the Group has once again achieved another solid result, delivering growth in both Group revenues and EBITDA.

EXPANSION The construction of Phase Three of our Shirebrook campus expansion is now well underway. It consists of an additional warehouse and office facility, spanning a c.700,000 sq. ft. footprint. Occupancy of the first warehouse area is about to commence, with population of the remaining areas of the warehouse planned for later in 2015, on schedule. We have also commenced work on an additional retail unit and training centre at our Shirebrook campus, with completion anticipated for late 2015. The expansions will have a range of benefits for the

Group, including an improved environment for staff training.

Our Oxford Street store has now been open for over 12 months and has been well-received by both customers and suppliers. The property, which was the former HMV Flagship store, allows us to trade over four floors, with c.50,000 sq. ft. of retail space. Our Glasgow City Centre store has undergone an extension of approximately 28,000 sq. ft., more than doubling its previous footprint and we have collaborated with Under Armour to offer our customers an exceptional shopping environment. We have also recently acquired the freehold of the c.50,000 sq. ft. former Primark store in Leeds, which is expected to open this summer.

ANNUAL REPORT 2015 ANNUAL REPORT We are confident in the success of the format used in the stores, which we intend to roll out further.

Our Fitness division now has 27 fully operational gyms across England. During the year the Group purchased 25 former LA Fitness gyms, and developed an additional two gyms with separate retail premises, ensuring that customers can purchase their everyday gym essentials on site.

STRATEGIC INVESTMENTS Strategic Investments are an integral part of the Board strategy to explore new opportunities to bring our product to market.

The Group enhanced its relationship with Debenhams during the year with the purchase of an additional strategic investment in the business, increasing our beneficial interest from 6.6% to 15.0% at the year end date of 26 April 2015, which has subsequently reduced since the year end to 10.5%. We are currently trialling four concessions within Debenhams stores.

SHARE SCHEMES I am pleased to confirm that we have achieved the final Adjusted Underlying EBITDA target under the 2011 Share Scheme and Executive Share Scheme. We hope to reward participating employees under the 2011 Share Scheme for their loyalty and motivation by way of share awards. The first award under the 2011 Share Scheme is due to vest later in 2015, which will distribute c.5m shares to c.2,000 participating employees. The Group’s Share Schemes are some of the most generous schemes in the country, and are key tools in 12 motivation and retention.

FY10 £155m 2009 SCHEME 2009 & 2011 SCHEME TARGETS FY11 £195m 2009 & 2011 SCHEME ACHIEVED FY12 £215m FY13 £250m 2015 SCHEME TARGETS 2011 SCHEME FY14 £260m FY15 £300m FY16 £420m* FY17 £570m 2015 SCHEME FY18 £650m FY19 £750m

*Proposed revised FY16 target under the 2015 Share Scheme. Shareholder approval to amend this target from £480m to £420m will be sought at the AGM on 9 September 2015.

50 of 150 To the extent that a significant number of participating employees elect to sell some or all of their shares, whilst the Company has no obligation to buy back the shares, the Board will consider a number of options open to it, including whether to: (i) implement an on-market buy back of shares pursuant to the authority given by shareholders at the Company’s AGM in 2014; or (ii) fund the Company’s Employee Benefit Trust so as to allow it to acquire shares in the market to replace those shares transferred to participating employees pursuant to the vesting.

As part of our strategy to closely align the interests of our team with those of our shareholders, the 2015 Share Scheme was approved by shareholders at a General Meeting in July 2014. The vesting of awards under the 2015 Share Scheme is conditional upon the achievement by the Group of four demanding EBITDA targets, which span between FY16 and FY19. The awards will vest in 2019 and 2021, subject to successful completion of all four targets, and other specific performance conditions. The Executive Deputy Chairman, Mike Ashley, withdrew from the Scheme during FY15. Mike remains fully committed to the achievement of the Scheme’s targets, but would like the focus to be on ensuring that the Scheme aligns

with the wider Sports Direct team, and therefore chose to withdraw from the Scheme. IS CHANGING... EVERYTHING

As we enter FY16 it is clear, and also understood by the market, that planned acquisitions in FY15 did not fully materialise. Following its recent review, the Board now recommends to shareholders a revised FY16 Adjusted Underlying EBITDA target of £420m, rather than the existing target of £480m which is now considered to be unreasonably challenging. This compares to the Underlying EBITDA of £383m achieved in FY15. All other targets for the further three years of the Scheme currently remain the same. The Board will continue to review the robustness of the 2015 Share Scheme on an annual basis.

THE BOARD During July 2014, it was announced that Charles McCreevy, a Non-Executive Director of the Group, would not be standing for re-election at the 2014 AGM. Charlie, who had spent over three years with the Group, had extensive all-round business knowledge, with particular relevance to Competition Regulations. I would like to thank him for his valuable contribution to the Board. We are in the process of appointing a replacement and hope to make an announcement within the near future.

I am delighted to welcome Matt Pearson to the Board in the position of Acting Chief Financial Officer. Matt joined the business over eight years ago and since then has gained an in depth knowledge of the finances of the Group. Matt has been leading our Group Finance Team for several years and is therefore perfectly placed to take on the additional responsibilities of this role. Further details relating to the recruitment of the Board can be found on pages 37 and 42.

CASUAL WORKERS 13 Much of the comment regarding the Group’s use of zero hour contracts has been unfounded and inaccurate. We comply fully with all legal requirements which relate to casual workers, including sick pay, holiday pay, and freedom to gain other employment. Casual workers also participate in general incentive schemes.

DIVIDEND The Board has decided not to propose a dividend in relation to FY15. The Board remains of the opinion that it is in the best interests of the Group and its shareholders to preserve financial flexibility, facilitating the pursuit of potential acquisition and other growth opportunities. The payment of dividends remains under review in future years.

CONCLUSION Despite ongoing challenging market conditions, and the weather, we yet again exceeded our targets in FY15. Such success, year on year, is a testament to the hard work and dedication of all our workforce for which the Board thank and congratulate them.

Dr Keith Hellawell QPM Non-Executive Chairman

16 July 2015

51 of 150 OUR BUSINESS MODEL

Our business model is focused on long-term sustainable growth. Whilst we continue to grow our business in the UK, we are now keen to use the skills and knowledge we have gained to build and expand our Sports Retail business across the rest of Europe.

1. IDENTIFY Brand acquisitions & property enhancement ANNUAL REPORT 2015 ANNUAL REPORT

4. PROMOTE ACHIEVE 2. INVEST Group-owned Targets & Store portfolio & brands Group success workforce

3. DEVELOP Website & mCommerce, enhanced product ranges

Our offering has developed further in specialist sports categories and more fashion-based The Group has significant momentum and we must ensure that our product offering and retailing. We are constantly refurbishing and upgrading our stores, in order to provide our customer proposition continue to grow and develop in order to retain our current customer customers with a compelling consumer experience. The continued development of our base and to attract more customers in the future. dedicated specialist areas and on-going collaboration with key suppliers such as Under Armour and European brands such as Salomon on in-store concepts are further examples Developing brand awareness is a key factor in ensuring a sustainable future, and the of this. appropriate level of investment in advertising and technology are important components in achieving this. Acquisitions and strategic investments in related businesses are an important part of our strategy. Opportunities to develop into new product categories or markets, or to strengthen Our international presence continues to grow through over 260 brand licensing partners, our position in existing areas, will continue to be considered on a case by case basis. our online presence and on-going European store openings. The Group’s appointment of internationally-recognised celebrities and sporting professionals as key ambassadors also We aim to maintain our position as the market leader in the Sports Retail sector in the UK, promotes our brands on a global basis. while also gaining momentum in our expansion into Europe. The business model provides guidance for the Group to implement an effective growth strategy to maintain and develop the success achieved so far. It compares our recent successes with our future ambitions in order that we can assess how to progress in the future.

52 of 150 OUR STRATEGY

OBJECTIVE SO FAR WHAT NEXT? 1. IDENTIFY Our Oxford Street store opened in May 2014, and our Glasgow City Centre extension was Due to the success of the Oxford Street and Glasgow City completed in spring 2015. Centre stores, we are now looking to replicate the look and feel in other major markets, starting with our new Leeds IN-STORE Across the UK and Europe, we have continued to invest in specialist performance areas and product collections, including Karrimor and Sondico. Improved visual merchandising has enhanced the store, which is set to open in summer 2015. customer shopping experience. We have on-going collaborations with key brands such as Under Armour, along with European brands such as Salomon, to deliver enhanced in-store merchandising. The Group has acquired 25 former LA Fitness gyms, all of which are located in the UK. Acquisitions remain a high priority, particularly outside of the UK, which will broaden the customer offering across the ACQUISITIONS A number of other acquisitions have taken place in the year, including Gul Watersports, although the number has remained somewhat smaller than anticipated. Group. We anticipate that the number of acquisitions will increase over the coming year.

2. INVEST IS CHANGING... EVERYTHING During FY15, we opened 39 stores in the UK, closing 16, and opened a further 16 stores in The Group intends to continue to enhance its store portfolio Europe, closing seven. As at 26 April 2015, Sports Retail operated in 20 countries in Europe, as in both the UK and internationally. The Group will continue well as in the UK. with the strategy to identify strategic partners in new STORE Our Oxford Street store and our newly expanded Glasgow City Centre store both now span territories while expanding operations in those countries PORTFOLIO c.50,000 sq. ft. We endeavour to replicate this in other major cities. where we currently have a presence. Plans are in place to expand Sports Retail operations into all the major countries The construction of a further retail unit on our Shirebrook campus is currently underway, with in the European Economic Area. completion due in late 2015. The efforts of our dedicated staff have been instrumental to the success of the Group. Due to the success of the 2009 Share Scheme, participating The 2011 Share Scheme has been a key tool used in motivation and retention. The targets have employees are further incentivised by the 2011 and 2015 been successfully achieved and the scheme vests for participants later in 2015 and in 2017. Share Schemes. PEOPLE The 2015 Share Scheme was approved by shareholders during FY15. Mike Ashley has withdrawn from the Scheme in order to ensure that the focus remains on aligning targets with the wider Sports Direct team, and not on his potential personal allocation. 15 3. DEVELOP Following successful trials during the year, Click and Collect has now been launched in the UK in Our aim is to roll out Click and Collect across other UK both Sports Direct and USC and has proved very successful. Over 20% of all UK Sports Retail online Group websites. orders and over 15% of USC online orders are now being delivered by Click and Collect. To improve the customer experience in Europe, we plan to We have re-designed our checkout, introducing a guest checkout option and streamlining the introduce dedicated websites and allow customers to use checkout process. additional payment methods while shopping online, including Ideal, Giro and Sofort. WEBSITE Customers are now also able to purchase and redeem gift cards online. Particular attention has been paid to improving the language and currency conversion on our sites We will provide continued investment in the online business. for non-English speaking countries. The improvements have led to a significant reduction in dropped Online visits and sales have shown notable increases year baskets, most notably in France and Germany. on year. Following investment into our mobile platforms, mobile visits now equate to over 50% of visits to We plan to introduce a fast pay checkout solution, allowing SPORTSDIRECT.com. customers to purchase a large number of products in a small number of clicks. 4. PROMOTE The Group has continued to exploit its brands by offering wholesale and licensing opportunities, Expansion of the heritage brands, including Everlast, Dunlop in addition to selling brands in Group retail outlets. Wholesale and licensing enables an increased and Slazenger, is expected to continue. area of distribution, following which brands can reach audiences which would otherwise Dunlop remains a key focus for expansion, particularly into remain untapped. categories which have not previously been explored by the The focus is to remain on international wholesale, including the USA, which currently represents Group, including automotive accessories. c.40% of the total wholesale revenue. Acquisitions of key brands will remain a high priority, Sports Direct Retail licensing continues to grow with 14 stores now open in Malaysia and 13 open increasing our brand portfolio and weakening the position of BRANDS in the Middle East. competitors. Licensing is a key driver of the Brands division. 58 new license agreements were signed during Asia Pacific will remain a main area of focus along with FY15, guaranteeing a minimum of $25m in royalties over the contract periods. Australasia, expanding the global presence of the Group. The brand portfolio increased during the year through the acquisition of the Dunlop and Slazenger Our well established brands, including Slazenger and Dunlop, rights in the Australasia region. will lead the way in the region. Investment in key Group brands is expected to continue in order to allow products to reach new markets and customers.

53 of 150 KEY PERFORMANCE INDICATORS

The Board monitors the Group’s performance by reference to a number of Key Performance Indicators (KPIs), which are discussed in this Chief Executive’s Report, and also in the Financial Review. The most important of these KPIs are:

52 weeks ended

26 April 2015 27 April 2014 28 April 2013

FINANCIAL KPIS

Group revenue £2,832.6m £2,706.0m £2,185.6m

Underlying EBITDA (1) £383.2m £331.1m £287.9m

ANNUAL REPORT 2015 ANNUAL REPORT Sports Retail gross margin 44.6% 42.9% 40.3%

Sports Retail like-for-like stores gross contribution (2) +7.4% +10.5% +10.6%

Online revenue as a percentage of total Sports Retail revenue (3) 16.5% 15.1% 15.0%

Underlying earnings per share (4) 38.9p 32.1p 26.9p

NON-FINANCIAL KPIS

No. of Sports Retail stores (5) 661 629 498

Workforce turnover 18.7% 19.2% 15.5% 16 Cardboard recycling 9,526 tonnes 9,230 tonnes 8,893 tonnes

(1) The method for calculating underlying EBITDA is set out in the Financial Review.

(2) Sports Retail like-for-like contribution is defined as the percentage change in gross contribution in the successive 12 month period. A like-for-like store is one that has been trading for the full 12 months in both periods and has not been affected by a significant change, such as a major refurbishment. Excludes contribution in EAG and SIG as the prior year comparative is not a full year.

(3) Excludes wholesale revenue.

(4) The method for calculating underlying earnings per share is set out in the Financial Review.

(5) Excluding associates and stores in the Baltic states that trade under fascias other than SPORTLAND or SPORTSDIRECT.com.

54 of 150 RISKS AND UNCERTAINTIES RELATING TO THE GROUP’S BUSINESS

INTERNAL CONTROLS AND RISK MANAGEMENT The Group’s system of internal control and risk management and its effectiveness is The Board has a responsibility to govern the Group in the interest of the shareholders. monitored and reviewed by the Board, the Audit Committee and management, and the Comments and suggestions of shareholders are always considered by the Board. Board believes that the Group has maintained throughout the year and up to the date of Where the Board considers that a risk has not been fully mitigated, follow-up meetings approval of the Annual Report and accounts an effective embedded system of internal will be arranged to assess the risk and formulate mitigation strategies. A specialist control and has complied with the FRC’s Risk Guidance. management team of Directors and senior managers highlight risks as and when they The systems of internal control and risk management are designed to manage, rather than become apparent. The team then in turn assists the Board in devising controls to eliminate, the risk of failing to achieve business objectives. minimise the Group’s exposure.

THE GROUP’S APPROACH TO RISK RISK POLICIES AND PROCEDURES Business plans and budgets for each business include financial and strategic targets against The identification and management of risk is a continuous process, and the Group’s system which performance is monitored. Monitoring includes the examination of and changes of internal controls and the business continuity programmes are key elements of that. The to rolling annual and quarterly forecasts, monthly measurement of actual achievement Group maintains a system of controls to manage the business and to protect its assets against key performance targets and plans, and weekly reviews of performance. with the development of contingency plans and rapid response to changing circumstances EVERYTHING IS CHANGING... EVERYTHING and does much to mitigate the risks facing the Group. The Group continues to invest in The Group has clear procedures for the approval and control of expenditure. Strategic people, systems and in IT to manage the Group’s operations and its finances effectively investment decisions involving both capital and revenue expenditure are subject to formal and efficiently. detailed appraisal and review according to approval levels set by the Board. Operating expenditure is controlled within each business with approval levels for such expenditure being determined by the individual businesses. R ITO ID There is an approved whistle-blowing policy within the Group. The policy was established N EN O T to be utilised by staff who wish to raise any issues or concerns relating to the Group’s I M F activities, and all matters are discussed on a confidential basis. Y KEY RISKS CONTROL ENVIRONMENT M The Group’s operating procedures include a comprehensive system for reporting A information to the Board including: N E A T G A 17 E LU • assessment of three years of strategy plans for business development; VA E • creation and assessment of legal policies; and • review of the Group at each Board meeting, focusing on potential new risks (such as key changes in the market and succession planning).

1. RISKS ARE IDENTIFIED CONTROL PROCEDURES 2. RISKS ARE EVALUATED Detailed operational procedures have been developed for each of the Group’s operating businesses that embody key controls. The implications of changes in law and regulations 3. ACTION IS TAKEN TO MANAGE THE RISKS are taken into account within these procedures. 4. PRACTICES ARE REVIEWED AND MONITORED TO LIMIT THE RISK FINANCIAL REPORTING PROCESS The specialist management teams are responsible for the identification, analysis, The Group has in place internal control and risk management systems in relation to evaluation and mitigation of the significant risks applicable to their areas of business. the Group’s financial reporting process and the Group’s process for the preparation of The teams meet regularly to discuss the identified risks, and how these should be reviewed consolidated accounts. These include clearly defined lines of accountability and delegation and monitored. The Board ensures that the appropriate arrangements are in place under of authority, policies and procedures that cover financial planning and reporting, preparing which staff can raise concerns about possible financial or other impropriety, which are then consolidated accounts, capital expenditure, project governance and information security. appropriately investigated. The Audit Committee is responsible for overseeing and monitoring these processes, which The Board is assisted by the Audit Committee in fulfilling its overview responsibilities, are designed to ensure that the Group complies with relevant regulatory reporting and reviewing the reporting of financial and non-financial information to shareholders and filing provisions. As at the end of the period covered by this Report, the Audit Committee, the audit process, satisfying itself that appropriate systems of internal control and risk with the participation of the Chief Executive, evaluated the effectiveness of the design management are in place and are serving to identify and manage risk. and operation of disclosure controls and procedures designed to ensure that information required to be disclosed in financial reports is recorded, processed, summarised and The Group operates a Retail Support Unit which provides strong operational internal audit reported within specified time periods. services in the Retail division, and there are procedures in place in the Brands division to monitor and control licensees. The Audit Committee has also appointed BDO as internal audit advisers (see Audit Committee report on page 40).

The external auditors are invited to attend all meetings of the Audit Committee, save for those parts of any meeting when the Committee reviews the performance of the auditors.

55 of 150 RISKS AND UNCERTAINTIES RELATING TO THE GROUP’S BUSINESS CONTINUED

PRINCIPAL RISKS AFFECTING THE GROUP The Group has identified the following factors in the following table as potential risks to, and uncertainties concerning, the successful operation of its business. The Group is, however, exposed to a wider range of risks than discussed below but these are the principal risks that have recently been discussed by the Board and Audit Committee and are of primary concern.

AREA RISK MITIGATION SUPPLY CHAIN

The Group operates internationally so is The Group is subject to the risks associated with The Group requires all suppliers to sign up to the Group’s Code of Ethics/Supply reliant on the successful distribution of international trade and transport as well as those Policy which enables the Group to monitor and benchmark the performance of goods from when they are distributed by relating to exposure to different legal and other the supplier. It allows the Group to carry out inspections of premises to ensure the manufacturer to when they are sold standards. Particular risks including worker strikes, compliance with the Group’s codes for continuity and quality of supply. The Policy in the stores. failure to meet minimum code of conduct standards, extends throughout the duration of the Group’s contract with each supplier and and transport delays for products which could all allows the Group to conduct inspections of supplier premises at random intervals. The Group is reliant on manufacturers in cause substantial difficulties. ANNUAL REPORT 2015 ANNUAL REPORT developing countries as the majority of Many risks relating to the supply chain, reliance on non-UK suppliers, and to the the Group’s products are sourced from Disasters in or around the factories of our suppliers reputation of the Group’s brands are managed and mitigated by the implementation outside the UK. could bring negative media attention to the Group. of these policies. Strong Service Level Agreements and maintaining relationships with all parties involved in the supply chain also mitigate these risks. KEY SUPPLIERS The Group is reliant on good A failure to replace any of its major manufacturers The Group follows policies of forging long-term relationships with suppliers and relationships with its major or suppliers on commercially reasonable terms could of utilising two leading supply chain companies to procure much of the Group’s manufacturers, key brands or have an adverse effect on the Group’s business, own branded goods. This close relationship brings a better understanding of brand suppliers. operating profit or overall financial condition. It may the supplier’s resources enabling the Group to react quickly to changes in the mean that customers shop elsewhere if stores cannot international supply market. supply the required product. Lengthy contracts are often used by the Group to ensure that key manufacturers are aware of our commitment to them. TREASURY AND FINANCIAL RISK 18 The Group operates internationally. The The Group is exposed to foreign exchange risk arising The Group seeks to mitigate the FX fluctuations by hedging via forward foreign majority of foreign contracts relating to from various currency exposures and a strengthening currency contracts which are designated as cash flow hedges. the sourcing of Group branded goods of the US Dollar or a weakening of the Pound making The Group also holds assets overseas in local currency, and these assets are are denominated in US Dollars and the goods more expensive. revalued in accordance with currency movements. This currency risk is not hedged. Euro, thus leaving exposure to foreign Foreign exchange risk arises when future commercial exchange risk. The Group is cash generative and is now targeting its debt levels to mitigate interest transactions or recognised assets or liabilities are rate risk and currently has debt levels of less than 1 x underlying EBITDA. The Group has net borrowings, which denominated in a currency that is not the entity’s are principally at floating interest rates functional currency, as exchange rates move. This linked to bank base rates or LIBOR. could significantly reduce profitability. CREDIT AND LIQUIDITY RISK The Group, primarily the Brands division, The Group could have a credit risk if credit evaluations The Group’s key suppliers also face credit risk and as such the Group regularly provides credit to some of its customers. were not performed on all customers requiring credit assesses the viability of its suppliers and ensures there are plans to source from over a certain amount. alternative businesses should key suppliers fail. Funding and liquidity for the Group’s operations are provided through The Group’s objective is to maintain sufficient funding Rigorous procedures are in place to mitigate this credit risk. The Group has a credit bank loans, overdrafts and and liquidity for its requirements, but the availability policy in place and the exposure to risk is monitored on an on-going basis. shareholders’ funds. of adequate cash resources from bank facilities and Credit evaluations are performed on all customers requiring credit over a certain achieving continuity of funding in the current financial amount, and concentration of credit risk is managed. climate could be a risk to the Group in future years. Investment of cash surplus, borrowings and derivative investments are made The purchase of acquisitions to strengthen and through banks and companies which have credit ratings and investment criteria compliment the Group may be hindered. approved by the Board. Relationships with suppliers could break down if The Group mitigates liquidity risk by keeping debt levels low and the current finance we are unable to pay them in line with our facility is held with a club of 13 banks, thereby spreading the risk. contractual obligations.

56 of 150 SUCCESSION PLANNING Key individuals within the Group Natural disaster, illness, injury, or the sudden Our departments work together to develop their understanding of each department have such a level of knowledge and resignation of key individuals could change the and of the Group. Senior managers work at ground level to help to assess the experience of the business which makes direction of the Group. strengths within their teams and to offer development opportunities where them essential to continue to further the appropriate. This can be of assistance when considering the suitability of internal interests of the business. candidates for vacancies. Promotion opportunities, a competency framework, and regular appraisals give staff a voice, encourage a sense of responsibility and support career progression. Our structured talent management programmes, and specialist masterclasses, encourage internal progression within the Group. Executive development is important to us and we aim to promote internally rather than recruit external individuals who are unknown to the Group. This can be best seen through the recent promotion of Matt Pearson to Acting Chief Financial Officer. IS CHANGING... EVERYTHING Our Share Schemes seek to reward and retain our key members of staff. The Nomination Committee regularly reviews the succession plan of the Group, and discusses who would take over roles if key team members were to leave. MARKET FORCES The Sports Retail industry is highly The competition continues to place pressure on the The Group has a discount pricing policy to help reduce the risk of increased competitive and the Group currently Group’s pricing strategy, margins and profitability. competition in the industry. competes at national and local levels The Group has a strong property portfolio, and continues to strengthen this by with a wide variety of retailers of relocating and improving stores to adapt to market conditions. varying sizes who may have competitive advantages. New competitors may enter A number of key brands are owned by the Group, reducing pressure on margins. the market. The Group’s focus on acquiring competitors enables us to retain our discounted pricing systems without price increases from the brand owners. 19 OPERATIONAL The Group is reliant on the Head Office Any disruption to the Head Office, National The Group has a strong business continuity plan that is regularly reviewed to and National Distribution Centre at Distribution Centre or the fleet of vehicles might address operational risks. Shirebrook operating without disruption, significantly impact the Group’s ability to manage The Board is confident that as far as it is practical, the risks and uncertainties along with the uninterrupted running of its operations, distribute products to its stores and that face the Group are being monitored and managed and that, where required, the Group’s fleet of vehicles. maintain its supply chain. appropriate action is being taken. The majority of the Group’s revenue is Any long-term interruption of the Group’s IT systems The Group constantly monitors the business environment and the nature derived from the UK. would have a significant impact on the Group’s of the business model allows for the Group to act swiftly under operation, particularly in the Retail division. extraordinary circumstances. Terrorist attacks, armed conflicts, government actions The Group is extending the Head Office and National Distribution Centre so that or adverse weather affecting the road networks there is additional room for storage and workers, for future business needs and in within the UK could result in a significant reduction in case of disaster. consumer confidence, which would in turn have an adverse affect on sales in stores. CYBER FAILURES AND ATTACKS Online sales and advertising are key Reputational implications if the attack is reported The Group has a strategy and processes in place which relate to our IT security. to the Group’s strategy going forward. to the media, including a loss of sales whilst the Working with internal and external parties, our colleagues continuously monitor However cyber attacks are becoming site is down, and longer term loss of sales through our systems to ensure that they are sufficiently strong to deal with ever increasing more sophisticated and frequent, the deterioration of customer confidence. Possible cyber risks. commanding headlines and losing sanctions and penalties from overseeing bodies, During 2014, a review of the IT risks was completed. The review looked into the customers’ trust. and the loss of competitive advantage against resilience of the current systems, highlighting the major points of concern regarding market competitors. the Group IT systems. The matters raised will be worked on over the next two to three year period in a follow up monitoring programme. Our IT and Risks teams have held workshops to assess the key technology threats to the Group, and look into where policies require updating and amending.

57 of 150 RISKS AND UNCERTAINTIES RELATING TO THE GROUP’S BUSINESS CONTINUED

HEALTH & SAFETY Health and safety is key across all areas Potential injuries, distress and fatalities could We ensure that each Company within the Group is fully trained to the required of the Group. Policies are implemented, result from a failure to establish and maintain safe standards applicable in each requisite country. in conjunction with legal standards, to environments. Lack of competence in health and Training courses are regularly offered and staff are encouraged to learn essential protect our staff and customers. safety reporting could lead to legal claims which are health and safety techniques. difficult to defend. The team at Head Office is always on hand to visit and assist stores with health and safety issues, assess incidents and refer reportable matters to RIDOR. During the year the team has gained another strand by creating a team of employees which is dedicated to solely dealing with claims and complaints. The incidents within the Group are reported to the Board regularly, as are the legal claims that arise from these. The Board consider ways to reduce the number of claims. ANNUAL REPORT 2015 ANNUAL REPORT LEGAL The Group’s trade marks, patents, The Group believes that its licensees, suppliers, The Group has an in-house legal team who have knowledge of a variety of designs and other intellectual property agents and distributors are in material compliance legal areas that apply to the Group. This in-house expertise is vital in mitigating rights are central to the value of the with employment, environmental and other laws. such issues. Group’s brands. The violation, or allegations of a violation, of such The legal team work closely with external consultants to assist with, and gain laws or regulations, by any of the Group’s licensees, knowledge on, matters outside their areas of expertise. suppliers, agents or distributors, could lead to adverse publicity and a decline in public demand for The Group’s legal team actively monitor trade mark applications by other the Group’s products, or require the Group to incur companies, as well as the stock of rival retailers, to ensure that our rights are not expenditure or make changes to its supply chain and infringed and where these are infringed, to take appropriate action. other business arrangements to ensure compliance. The legal team carefully draft all correspondence to ensure that documentation The Group may need to resort to litigation in the is clear and legally binding. Drafting templates and key points are shared so that future to enforce its intellectual property rights and knowledge is retained within the Group. 20 any litigation could result in substantial costs and a diversion of resources. Third parties may try to challenge the ownership of or counterfeit the Group’s intellectual property. SALES The Group’s retail businesses are subject Prolonged unseasonal weather conditions or Although unable to mitigate environmental conditions, the Group is able to influence to seasonal peaks. The incidence of and temporary severe weather during peak trading the retail portfolio and therefore constantly monitors development of stores and participation in major sporting events seasons could have a material adverse effect on the the Group’s aim to increase the square footage through viable new retail space. By will have a particular impact on the Group’s businesses. The Group is dependent upon the monitoring stock levels through sales forecasting the Group can manage the peaks Sports Retail business. store portfolio and consumers’ spending habits. in demand and trading profiles can be predicted. Customer tastes could change and stocked items Building sales units at our Head Office and National Distribution Centre allows us to could no longer be suitable for the market. trial and monitor differing sales techniques and products, before rolling these out to the rest of the Group. Our team keep ahead of the trends, conducting market research on our customers and monitoring our competitors. Sophisticated ordering systems ensure that items which sell well in particular areas will be restocked. Our strong relationship with suppliers ensures that we are able to source key items at short notice, should this be required.

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OVERVIEW OF FINANCIAL PERFORMANCE I am pleased to report that, despite the adverse impact on performance of England’s early departure from last year’s FIFA World Cup in Brazil and the unseasonably mild weather during autumn reducing footfall, the Group has, yet again, succeeded in delivering another solid set of results.

The Group has achieved another year of revenue and profit growth in a challenging retail REVIEW BY BUSINESS SEGMENT environment, driven by continued expansion both in the UK and across Europe. During RETAIL REVENUE: the year we have increased our store portfolio in the UK by 23 stores and have added 52 weeks ended a further nine stores to our European store portfolio. We have also continued to develop 26 April 2015 27 April 2014 large city centre format stores. (£’m) (£’m) We have also established a Fitness division in the year, Sportsdirect Fitness.com, Sports Retail 2,398.6 2,274.4

comprising 27 gyms including two combined gym and retail sites. Premium Lifestyle 207.6 214.1 IS CHANGING... EVERYTHING Total Retail revenue 2,606.2 2,488.5 I am delighted to announce that the Group has now met the final target under the 2011 Cost of sales (1,456.6) (1,427.3) Share Scheme. The first award under this Scheme is due to vest later in 2015 and will reward c.2,000 participating employees for their hard work and dedication. The Group’s Gross profit 1,149.6 1,061.2 continued success truly reiterates how important the Share Schemes have been in Gross margin percentage 44.1% 42.6% motivating participants to work towards a shared goal. BRANDS REVENUE: GROUP 52 weeks ended Group revenue increased by 4.7% to £2,832.6m in the year. This was primarily due to 26 April 2015 27 April 2014 the Sports Retail division, where we grew revenues by 5.5%. Premium Lifestyle revenue (£’m) (£’m) fell by 3.0%, largely due to the closure of loss-making stores in the period. Wholesale 193.3 185.2 Licensing 33.1 32.3 Group gross margin in the year increased by 110 basis points from 42.7% to 43.8%. Total Brands revenue 226.4 217.5 Sports Retail division gross margin increased by 170 basis points to 44.6% (FY14: Cost of sales (135.2) (123.8) 42.9%), while Brands division gross margin decreased to 40.3% (FY14: 43.1%). 21 Gross margin 91.2 93.7 Group operating costs increased 4.2% to £860.5m (FY14: £826.1m). We continue to Gross margin percentage 40.3% 43.1% balance revenues and gross margin, while maintaining a tight focus on operating costs and as a result grew Group underlying EBITDA (pre-scheme costs) for the year by 15.7% to £383.2m (FY14: £331.1m). Within this underlying EBITDA, we increased the Retail SPORTS RETAIL division EBITDA by 16.0% to £349.1m (FY14: £300.9m) while the Brands division Sports Retail revenue has grown in the period as we continue to invest in product range EBITDA increased by 12.9% to £34.1m (FY14: £30.2m). and availability, increasing the proportion of ‘better’ and ‘best’ Group branded products, Excluded from underlying EBITDA is a £10.1m (FY14: £11.9m) charge in respect of the optimise both our in-store and web offerings and further invest in our store portfolio. 2009 and 2011 Share Schemes. This charge has been taken centrally and, except in note Sports Retail sales grew 5.5% to £2,398.6m (FY14: £2,274.4m), driven largely by 4 to the Annual Report, is not reflected in the divisional (Retail and Brands) numbers in growth in the UK, offset by a weak winter sports season across Europe and adverse this report. foreign currency movements. Sports Retail gross margin for the year increased by 170 For the year, Group underlying profit before tax increased 20.5% to £300.3m, primarily basis points to 44.6% (FY14: 42.9%). This increase is primarily attributable to on-going as a result of the £52.1m increase in EBITDA (pre-scheme costs). Underlying EPS for the investment in our ‘better and best’ product ranges, further enhanced by efficiencies gained year increased by 21.2% to 38.9p (FY14: 32.1p). by our strong supply chain disciplines.

Net debt at 26 April 2015 was £59.7m (27 April 2014: £212.0m), which is 0.16 times Sales in the second half of the year were up 2.6% to £1,167.6m (FY14 H2: reported EBITDA (27 April 2014: 0.66 times). Reported EBITDA includes realised foreign £1,138.3m). Gross margins for the second half of the year improved to 44.6% (FY14 exchange gains/losses in selling and administration costs and the Share Scheme charges. H2: 42.5%). Sports Retail like-for-like gross contribution, which excludes online, increased by 7.4% (1) marking the sixth consecutive year of growth in this KPI (FY14: +10.5% / FY13: +10.6% / FY12: +0.7% / FY11: +6.8% / FY10: +3.7%). Sports Retail like-for-like contribution is defined as the percentage change in gross contribution in the successive 12-month period. A like-for-like store is one that has been trading for the full 12 months in both periods and has not been affected by a significant change, such as a major refurbishment. The number of stores included in this year’s KPI is 432 (FY14: 339).

(1) Excluding EAG and SIG as the prior year comparative is not a full year.

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Sports Retail operating costs increased by 9.0% in the year to £715.2m (FY14: We have continued to invest in staff training, with a key focus this year on our “Home £656.3m) compared to a 5.5% increase in sales and a 9.7% increase in gross profit due Grown” Talent Management programme, Customer Service Training and Management to the full year impact of proportionally higher costs in our recently acquired European Induction. During the year over 58,000 hours were invested into training and developing businesses. Operating costs in H2 increased by 4.6% to £361.4m (FY14 H2: £345.5m) our workforce. A great deal of this training took place at our Training Academy on our compared to a 2.6% increase in sales and a 7.7% increase in gross profit. Shirebrook campus, which is the only training centre in the world supported by both Nike and Puma. We are committed to the continued development of our staff, always Store wages were up 13.1% in the year to £239.2m (FY14: £211.4m) but as a aiming to promote internally wherever possible and during the year ran our first Graduate percentage of sales increased only to 10.0% (FY14: 9.3%) due to the annualised Recruitment Programme, ‘Talent Bank’, where graduates were placed in our Finance and effect of new store openings combined with the full year impact of proportionally higher Ecommerce teams for eight-week summer placements and offered the opportunity to costs in our recently acquired European businesses and reduced sales due to a difficult compete for a permanent role, with the best being rewarded. winter sports season in Europe. Sports Retail store premises costs increased by 9.5% to £211.0m (FY14: £192.7m), due to investment in new stores and the full year effect of Phase Three of the development of our National Distribution Centre in Shirebrook, the comparatively higher costs in our new European businesses. Other operating costs were construction of an additional c.700,000 sq. ft. footprint warehouse and office facility, is up 13.9% to £280.8m (FY14: £246.6m), increasing as a percentage of sales to 11.7% now well underway, with completion scheduled for late 2015.

ANNUAL REPORT 2015 ANNUAL REPORT (FY14: 10.8%) due to costs in our recently established Fitness division. We have worked hard to enhance and invest in our store portfolio during the year, with a The currency impact on operating costs of the change in the Euro: Sterling exchange in our particular focus on larger city centre stores. During the year we relocated our Oxford Street European businesses rate was a gain of £15.7m (FY14: a loss of £5.6m). store to the c.50,000 sq. ft. former HMV store and have completed a c.28,000 sq. ft. extension of our Glasgow store which includes a store in store concept area with Under Underlying EBITDA for Sports Retail was £356.8m (FY14: £321.3m), an increase of Armour. We have recently also acquired the freehold of the former Primark store in Leeds. 11.0% for the year. This increase was driven by a £94.2m increase in gross profit due Works are currently underway on this four floor, c.50,000 sq. ft. store which is due to to the growth in store contribution and online sales, offset by the £59.0m increase in open this summer. operating costs. During the year we opened 39 stores in the UK, closing 16, and have opened an additional The Group’s retail businesses performed strongly in a difficult economic environment. Our 16 stores in Europe, closing seven. 12 out of the 16 UK closures were relocations retail model, offering outstanding value to our customers, remains resilient, both in the UK into larger and better configured space. 428 of the UK store fascia are now branded and internationally. Throughout the year, we continued to focus on offering our customers SPORTSDIRECT.com, an increase of 27 from last year (FY14: 401). the most comprehensive product range, the best availability and value while minimising operating costs as a percentage of gross sales. Period end square-footage increased to c.4.75m sq. ft.(1) (FY14: c.4.5m) in the UK and remained at c.3.0m sq. ft. (2) (FY14: c.3.0m sq. ft.) across the rest of Europe. 22 Online revenue has increased by 14.4% from £335.4m to £383.8m in the year, driven largely by the successful launch of Click and Collect in the UK during the second half of (1) Due to differing methodologies, this implies a range between 4.5m sq. ft. - 5.0m sq. ft. the year, which now accounts for over 20% of all UK online orders. This performance is (2) Due to differing methodologies, this implies a range between 2.5m sq. ft. - 3.5m sq. ft. exceptional considering we charge £4.99 for this service. Online sales represented 16.5% of Sports Retail sales (FY14: 15.1%), excluding wholesale sales. UK STORE PORTFOLIO(1) 26 April 2015 27 April 2014 Our mobile site continues to drive sales and the Group was recently ranked in the top four Stores at Year End 440 417 retailers in the FTSE 100 in terms of mobile website performance, according to a recent study released by The Search Agency*. Mobile traffic now accounts for over 50% of all online visits. We have also re-designed our checkout, introducing a guest checkout option Opened 39 32 and streamlining the checkout process. Closed 16 11 We have worked hard to improve the customer experience in Europe, widening the language and currency conversion options on our sites for non-English speaking countries, SPORTSDIRECT.com fascias 428 401 and going forward, plan to introduce dedicated websites for our European businesses and Other 13 17 additional payment methods including Ideal, Giro and Sofort. Area (sq. ft.) c.4.75m c.4.5m

Following successful trials during the year, customers are now able to purchase and redeem (1) Excluding Northern Ireland. gift cards online. We are also working towards the introduction of a “fast pay” checkout system, allowing customers to purchase a large number of products in a small number of In the 52 weeks to 26 April 2015, rent reviews have been agreed on 33 stores, of which clicks. 26 stores were agreed at nil increase. Of the remaining seven stores the average increase in rent was 13.87%, giving a total average increase over the 33 stores of 2.88% (0.57% The division has continued to expand, with the development of Sportsdirect Fitness. annual equivalent). There are currently 52 rent reviews outstanding with a further 42 com, comprising 25 standalone former LA Fitness gyms and an additional two new build falling due in FY16. Our lease expiry profile over all leasehold stores (excluding Lillywhites combined retail and gym spaces. A further two gyms in St Helens and Dundee are planned Piccadilly) is now 4.6 years, including 37 stores with contractual expiries or break dates for early autumn 2015. Membership continues to grow and we have already surpassed our within the next 12 months. This significant amount of flexibility within our portfolio full year targets. allows us to continue to monitor and adapt our format to the rapidly changing multichannel environment. * The Search Agency UK’s Mobile Experience Scorecard: FTSE 100 Companies – http://go.thesearchagency.com/ mobile-experience-scorecard-ftse-100-2015. In the current financial year, we are targeting to open between 30 and 40 stores, c.30% of which are expected to be relocations. We are also targeting to re-fit c.300,000 sq. ft. of retail space across the UK.

60 of 150 INTERNATIONAL STORE PORTFOLIO(1) PREMIUM LIFESTYLE 26 April 2015 27 April 2014 Premium Lifestyle sales decreased 3.0% to £207.6m (FY14: £214.1m), due to the closure of loss-making stores in the year. Premium Lifestyle gross margin for the year Austria 46 52 decreased by 150 basis points to 38.8% (FY14: 40.3%) due to online clearance of legacy Belgium 43 44 stock in the year. Estonia(2) 24 20 Premium Lifestyle operating costs decreased by 17.3% to £88.2m (FY14: £106.7m) due Latvia(2) 13 13 to the continued rationalisation of the USC and Republic businesses and synergies gained Lithuania(2) 12 12 by the consolidation of key head office functions in Flannels, Cruise and Van Mildert and the integration of the distribution function. Portugal 17 15 Slovenia 15 15 The Underlying EBITDA loss for Premium Lifestyle decreased to £7.7m (FY14: £20.4m Poland 10 7 loss) as we began to see the benefit of the re-structuring of Republic in the prior year and rationalisation of the other businesses. We will see further benefits of this in the

France 7 6 coming year. IS CHANGING... EVERYTHING Czech Republic 6 4 Online revenue in the division increased in the year, driven largely by improvements in Holland 6 6 stock availability and system improvements. We saw the benefit of the integration of Cyprus 6 5 the division’s eCommerce platforms with the Group’s IT systems and the launch of the Hungary 5 4 Flannels.com and USC mobile platforms in the prior year. We also successfully launched UK Click and Collect in USC during the year and over 15% of all USC online orders are Slovakia 4 3 now delivered via Click and Collect. Germany 3 3 We continue to strengthen our relationships with key third party suppliers. Luxembourg 2 2 Spain 1 1 At the year end, the Premium Lifestyle division traded from 103 stores under four main fascias: Switzerland 1 -

Total 221 212 26 April 2015 27 April 2014 USC 66 90 (1) Excluding Republic of Ireland & Iceland 23 (2) Includes only stores with SPORTSDIRECT.com and Sportland fascias Cruise 10 10 Van Mildert 10 9 All of the above stores are operated by companies wholly owned by the Group, except Portugal, where the Group owns 50.1% and Estonia, Latvia and Lithuania where the Group Flannels.com 8 8 owns 60.0%. During the year we have expanded our European store portfolio by nine Other 9 9 stores and have entered one new country. As a result we are now active in 20 countries Total 103 126 across Europe including the Republic of Ireland and Iceland.

In Austria, we have continued to relocate and upgrade the former Sports Experts stores BRANDS which had been previously re-branded to the SPORTSDIRECT.com fascia. Over the coming The Group’s brand portfolio includes a wide variety of world-famous sport, fashion and year we will re-brand key Megastores to the Lillywhites fascia, replicating our UK city lifestyle brands. The Group’s Retail division sells products under these Group brands in centre store format across the re-branded stores in collaboration with key international its stores, and the Brands division exploits the brands through its wholesale and licensing brands such as Salomon. activities. The Brands division continues to sponsor a variety of prestigious events and retains a variety of globally-recognised, high-profile sportsmen and women as In the Baltic states we have already opened two stores in Estonia under the brand ambassadors. SPORTSDIRECT.com fascia and plan to open two further stores in Lithuania and one store in Latvia under the SPORTSDIRECT.com fascia. We have also continued to invest in relocating Brands division total revenue increased by 4.1% to £226.4m (FY14: £217.5m). and re-fitting the stores trading under the SPORTLAND fascia. Wholesale revenues were up 4.4% to £193.3m (FY14: £185.2m), including growth in the challenging UK market. Trading in the US market was in line with expectations and Our strategy remains to identify partners in new territories while continuing to expand our continues to represent c.40% of total wholesale sales. operations in the countries where we currently trade. For FY16, we are targeting to open between 20 and 30 new stores across seven countries. Brands gross margin decreased by 280 basis points to 40.3% (FY14: 43.1%). Wholesale gross margins fell 310 basis points to 30.1% (FY14: 33.2%) largely due to a shift in the The Group has a 50% shareholding in the Heatons chain which operates 15 Sports Direct sales mix towards lower margin lines. stores in Northern Ireland and 27 sports stores in the Republic of Ireland. We also own a 40% shareholding in the Sports Direct business in Iceland. Licensing revenues in the year were up 2.5% to £33.1m (FY14: £32.3m). During the year we signed 58 new licence agreements, covering multiple brands, product Local management continue to work hard to ensure that all new and existing stores in categories and geographies, with minimum contracted values of $25m over the life of Europe are committed to striving towards the operational efficiencies and standards that the agreements. At 26 April 2015, the Group has 401 license agreements worldwide(1), exist across our UK sports stores. across 264 licensees, with contracted minimums of $305m over the remaining life of the agreements.

(1) Includes consolidation of agreements signed in prior years.

61 of 150 CHIEF EXECUTIVE’S REPORT & BUSINESS REVIEW CONTINUED

Longer term, we still regard licensing as the key driver of Brands division profitability and The Group intends to propose an amendment to the FY16 Adjusted Underlying EBITDA central to the overall growth of the Brands business. The key growth areas are expected target under the 2015 Share Scheme, which will be reduced from £480m to £420m. to include Australasia and Asia Pacific with the acquisition of the Dunlop and Slazenger All other targets for the further three years of the Scheme currently remain the same. brands in the region during the year. This combined with growth in the Americas should This change will be put to shareholders as an ordinary resolution at the Company’s AGM compensate for a more challenging licensing landscape in the UK and Europe, as Sports in September 2015. Retail continues to expand in these territories. CONTRACTS ESSENTIAL TO THE BUSINESS Operating costs decreased by 9.7% to £57.0m (FY14: £63.1m) benefiting from the OF THE GROUP

consolidation of our back office functions in the prior year. As a result of cost savings, The Group has long-established relationships with Nike and adidas, the major suppliers underlying EBITDA increased by 12.9% to £34.1m (FY14: £30.2m). of third-party branded sporting goods, and considers that continued supplies from these companies are critical to the business of the Group. We continue to focus on developing world-class products that are endorsed by leading athletes on the field of play. We expect to spend between £10 and £20m on advertising and promotional costs in the coming year. ENVIRONMENTAL MATTERS The Corporate Responsibility Report is on pages 28 to 32 and a review of the assessment ANNUAL REPORT 2015 ANNUAL REPORT of the Group’s impact on the environment is included in this report. WORKFORCE The success of the Group has largely been created by our c.27,000 strong workforce, whose dedication and commitment has been sustained over many years. Their enthusiasm RESEARCH AND DEVELOPMENT and ‘one team’ attitude has assisted the Group to succeed where many other retailers The Group designs clothing and some footwear for sale in stores and has arrangements have failed. The Board is extremely grateful for the time that our workforce has taken to with suppliers for the research and development of goods for the Brands division. develop their skills and expertise. We promote staff training wherever possible to enable them to be the best that they can be. OUTLOOK Trading since the year end has been in line with management’s expectations, and The 2009 and 2011 Share Schemes have been fundamental tools in the motivation and underpins the 2015 Share Scheme’s proposed revised FY16 Underlying EBITDA target of incentivisation of participating employees. Under the 2009 Share Scheme, c.27m shares £420m. The Group’s performance continues to benefit from a number of factors including vested with those participants. Subject to satisfactory personal performance, a further investment in product range and availability, with an increased emphasis on ‘better’ c.21m shares are expected to vest under the 2011 Share Scheme. and ‘best’ Group branded products and the optimisation of our in-store and web offer, enhanced by the introduction of Click and Collect in the UK. We also continue to invest in The 2011 Share Scheme Adjusted Underlying EBITDA targets (before scheme costs), our store portfolio, with the roll-out of further large format city centre stores. relate to performance between FY12 and FY15. All four targets have now been met, and 24 subject to the individual employee’s satisfactory personal performance, the shares are due to vest in 2015 and 2017. Under the 2011 Share Scheme participating employees Dave Forsey are eligible for awards on a pro-rata basis depending on their length of service with the Chief Executive Group. Awards under the scheme are granted at either 100%, 75%, 50% or 25% of the participant’s annual base pay. Subject to the performance criteria being fulfilled, c.5m 16 July 2015 shares are due to vest in 2015 and c.16m shares are due to vest in 2017.

An additional three million shares are due to vest with an Executive Director and two members of senior management in 2017 under the Executive Share Scheme, subject to performance criteria being fulfilled. The Executive Share Scheme performance targets mirror those to be applied to awards under the 2011 Share Scheme.

As a result of the successes of previous schemes, the 2015 Share Scheme has been devised to encourage further outstanding employee performance for those who are invited to participate. The Scheme will provide for the grant of nil-cost options over up to 25m shares. The vestings are dependent on stretching performance criteria spanning between FY16 and FY19. With original EBITDA targets (before scheme costs) of £480m for FY16, £570m for FY17, £650m for FY18 and £750m for FY19 when the Scheme was approved, the Scheme has the potential to not only motivate participants, but also to create a further substantial increase in shareholder value.

62 of 150 FINANCIAL REVIEW

The Financial Statements for the Group for the 52 weeks ended 26 April 2015 are presented in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU.

SUMMARY OF RESULTS FOREIGN EXCHANGE 52 weeks ended The Group manages the impact of currency movements through the use of forward fixed rate currency purchase and sales contracts. The Group’s policy is to hold or hedge between 26 April 2015 27 April 2014 (£’m) (£’m) zero and five years of anticipated purchases in foreign currency. Revenue 2,832.6 2,706.0 The realised exchange loss of £3.7m (FY14: £1.8m gain) included in administration costs Underlying EBITDA 383.2 331.1 has arisen from: Underlying Profit Before Tax 300.3 249.3 a) accepting Dollars and Euros at the contracted rate; and Reported Profit Before Taxation 313.4 239.5 Pence per share Pence per share b) the translation of Dollar and Euro denominated assets and liabilities at the period IS CHANGING... EVERYTHING Reported EPS 40.6 30.8 end rate or date of realisation. Underlying EPS 38.9 32.1 The exchange gain of £7.2m (FY14: £11.2m loss) included in finance income/costs The Directors believe that underlying EBITDA, underlying profit before tax and underlying substantially represents the reduction in the mark-to-market liability made (under IFRS) earnings per share provide more useful information for shareholders on the underlying for the Group’s unhedged forward contracts as at 26 April 2015. A number of the forward performance of the business than the reported numbers and are consistent with how contracts outstanding at 26 April 2015 qualify for hedge accounting and the fair value business performance is measured internally. They are not recognised profit measures gain on these contracts has been credited to equity through the Consolidated Statement of under IFRS and may not be directly comparable with “adjusted” profit measures used by Comprehensive Income. The Group has sufficient USD/GBP contracts to cover all purchases other companies. in UK Retail for FY16. The Sterling exchange rate with the US Dollar was $1.680 at 27 April 2014 and $1.502 at 26 April 2015. EBITDA is earnings before investment income, finance income and finance costs, tax, depreciation and amortisation and, therefore, includes the Group’s share of profit from Given the potential impact of commodity prices on raw material costs, the Group may associated undertakings and joint ventures. Underlying EBITDA is calculated as EBITDA hedge certain input costs, including cotton, crude oil and electricity. before the impact of foreign exchange, any exceptional or other non-trading items and costs relating to the Share Schemes. FINANCE COSTS 25 52 weeks ended EBITDA AND PROFIT BEFORE TAX 26 April 2015 27 April 2014 (£’m) (£’m) EBITDA (£’m) PBT (£’m) Interest on bank loans and overdrafts (6.7) (7.5) Operating profit 295.6 - Interest on other loans (0.2) (0.6) Depreciation, amortisation and impairment 67.8 - Interest on retirement benefit obligations (0.6) (0.6) Share of profit of associated undertakings 3.0 - Fair value adjustment to forward foreign exchange (excl. FV adjustments) - (11.2) contracts Reported 366.4 313.4 (7.5) (19.9) Share Scheme 10.1 - Exceptional items 3.0 3.0 The decrease in interest payable is a result of the decreased use of the revolving credit Profit on disposal of investments - (12.6) facility and repayment of debt inherited from acquired companies. Realised FX loss 3.7 3.7 The prior year loss on the fair value of forward foreign exchange contracts arose under IAS 39 FX fair value adjustment on forward - (7.2) IFRS as a result of marking to market at the period end those contracts that do not qualify currency contracts for hedge accounting. Underlying 383.2 300.3

Underlying 52 week FY15 profit before tax excludes: (i) exceptional items which decreased profit by £3.0m; (ii) profit on disposal of investments which increased profit by £12.6m; (iii) realised foreign exchange losses which decreased profit by £3.7m; and (iv) IFRS revaluation of foreign currency contracts which increased profit by £7.2m.

63 of 150 FINANCIAL REVIEW CONTINUED

EXCEPTIONAL ITEMS DIVIDENDS 52 weeks ended The Board has decided not to propose a dividend in relation to FY15. The Board feels that it remains in the best interests of the Group to preserve financial flexibility, facilitating the 26 April 2015 27 April 2014 (£’m) (£’m) pursuit of potential acquisitions and other growth opportunities. The payment of dividends Profit on sale of freehold properties 10.3 - remains under review in future years. Impairment and accelerated depreciation and (13.3) (5.5) amortisation CAPITAL EXPENDITURE

During the year, capital expenditure amounted to £100.3m (FY14: £69.1m), which (3.0) (5.5) includes expenditure on licences within intangible assets and construction of our Shirebrook warehouse. The impairment and accelerated depreciation and amortisation relates to a change in the estimated useful life of certain tangible and intangible assets and impairment against goodwill in the year. ACQUISITIONS The Group made a number of smaller acquisitions during the year including the purchase of 25 former LA Fitness gyms.

ANNUAL REPORT 2015 ANNUAL REPORT The profit on sale of freehold property includes the sale of a freehold warehouse for £21.2m, realising a profit of £11.3m. STRATEGIC INVESTMENTS TAXATION During the year the Group disposed of c.1.5m shares in JD Sports Fashion plc but at The effective tax rate on profit before tax in FY15 was 23.0% (FY14: 25.0%). This rate the year end continued to hold an 11.09% stake in JD Sports. The fair value of the reflects depreciation on non-qualifying assets and overseas earnings being taxed at a Group’s holdings at 26 April 2015 was £140.8m (27 April 2014: £104.9m). higher rate. The movement in the fair value of the shares held has been recognised directly in Other Comprehensive Income. EARNINGS In June 2014, the Group acquired an interest in c.7m shares in MySale Group plc, 52 weeks ended representing 4.8% of the issued share capital of MySale. 26 April 2015 27 April 2014 Change (pence per share) (pence per share) (%) In September 2014, the Group entered into a derivative agreement referencing Reported EPS (Basic) 40.6 30.8 31.8 23,000,000 shares in Tesco Plc, representing 0.3% of the issued share capital of Tesco. Underlying EPS 38.9 32.1 21.2 In October 2014 the Group acquired c.56m shares in Debenhams plc for £33.2m, Weighted average number 26 592,294,371 585,513,537 representing 4.6% of the issued share capital of Debenhams. This stake was sold in of shares (actual) November 2014 and the Group entered into a derivative agreement referencing c.74m Debenhams shares, equivalent to 6.1% of the issued share capital of Debenhams. Basic earnings per share (EPS) is calculated by dividing the earnings attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding On 23 January 2015 the Group terminated an existing Debenhams derivative agreement during the actual financial period. Shares held in Treasury and the Employee Benefit Trust entered into in January 2014 and at the same time, entered into a new derivative are excluded from this figure. agreement referencing c.128m ordinary shares of Debenhams (representing 10.5% of the issued share capital of Debenhams). The underlying EPS reflects the underlying performance of the business compared with the prior year and is calculated using the weighted average number of shares. It is not a As at 26 April 2015 the Group had an interest in 15.0% interest in Debenhams’ recognised profit measure under IFRS and may not be directly comparable with “adjusted” ordinary shares. profit measures used by other companies. These stakes allow us to develop relationships and commercial partnerships with the The items adjusted for arriving at the underlying profit after tax and minority interests is relevant retailers and assist in building relationships with key suppliers and brands. as follows: 52 weeks ended The fair value of equity derivative agreements is included within the derivative financial 26 April 2015 27 April 2014 assets balance of £92.2m. (£m) (£m) Profit after tax 240.4 180.2 Post tax effect of adjustment items: Profit on disposal of listed investments (2.8) (4.0) Impairment of goodwill - 0.3 Fair value adjustment to forward foreign (12.5) 8.4 exchange contracts Realised loss/(gain) on forward foreign 2.9 (1.4) exchange contracts Profit on disposal of freehold properties (7.9) - Impairment and accelerated depreciation and 10.2 4.1 amortisation Underlying profit after tax 230.3 187.6

64 of 150 CASH FLOW AND NET DEBT Net debt decreased by £152.3m from £212.0m at 27 April 2014 to £59.7m at 26 April 2015.

The analysis of debt at 26 April 2015 was as follows:

26 April 2015 27 April 2014 (£’m) (£’m) Cash and cash equivalents 78.3 151.0 Borrowings (138.0) (363.0) Net debt (59.7) (212.0)

On 25 November 2014 the Group utilised the accordion option under its £688m working capital facility. As a result, the working capital facility has been increased from £688m to EVERYTHING IS CHANGING... EVERYTHING £738m. The facility is available until September 2018 and is not secured against any of the Group’s fixed assets.

The Group also has a £250m working capital facility with Mike Ashley which can be drawn down on request. This facility was agreed at market terms at its inception and is not secured against any fixed assets. At the year end no balance was due.

The Group continues to operate well within its banking covenants and the Board remains comfortable with the Group’s available headroom.

CASH FLOW Total movement is as follows: 26 April 2015 27 April 2014 (£’m) (£’m) Underlying EBITDA 383.2 331.1 27 Realised (loss) / profit on forward foreign exchange (3.7) 1.8 contracts Taxes paid (77.7) (55.7) Underlying free cash flow 301.8 277.2 Invested in:- Working capital and other (64.8) (110.1) Purchase of own shares -- Acquisitions (including debt) (3.8) (144.2) Net proceeds from / (purchase of) investments 4.1 (4.6) Net capital expenditure (79.1) (69.1) Finance costs and other financing activities (5.9) (7.2) Decrease / (Increase) in net debt 152.3 (58.0)

The increase in working capital is partly to support the growth of Sports Retail and the online business and partly due to the timing of payments around year end.

PENSIONS The Group operates a number of closed defined benefit schemes in the Dunlop Slazenger companies. The net deficit in these schemes decreased from £15.4m at 27 April 2014 to £14.9m at 26 April 2015.

Matt Pearson Acting Chief Financial Officer

16 July 2015

65 of 150 CORPORATE SOCIAL RESPONSIBILITY REPORT

Corporate Responsibility is central to our vision to be an industry leader. Our established Corporate Responsibility framework focuses on five key areas: People, Health and Safety, the Environment, Customers and the Community. Sports Direct has developed Key Performance Indicators (KPIs) to ensure we deliver on our commitments. These KPIs are further discussed in this report and in the Chief Executive’s Report and Business Review, and are based solely on our UK operations, unless expressly stated.

OUR PEOPLE PERFORMANCE & REWARD

The Group employs over 27,000 people, across 19 countries and various sectors, from We reward the hard work of our participating employees with the Share Schemes. The Sport, Fashion, Lifestyle, Gyms and Brands, and our people are what makes the Sports Share Schemes are dependent on the achievement of pre-determined underlying EBITDA Direct Group such a success. targets, as well as satisfactory performance of the individual employee.

Our whole people ethos revolves around ‘Right Person, Right Place, Right Time’ and we The targets for the 2011 Share Schemes were: are committed to the continued development of our people to meet our future growth

ANNUAL REPORT 2015 ANNUAL REPORT plans. Nurturing our people to reach their full potential and promoting internally where 2012: Underlying EBITDA of £215m - Achieved ever possible have been tools that have been used by the Group for over the last 30 2013: Underlying EBITDA of £250m - Achieved years and are fundamental to our continuing success. 2014: Underlying EBITDA of £260m - Achieved 2015: Underlying EBITDA of £300m - Achieved ATTRACTION AND RETENTION As a Group, we like to train and retain our staff to ensure that valuable knowledge All four of the 2011 Share Scheme targets have now been achieved. Under the 2009 remains within the business. The Group uses a number of incentives to retain our Share Scheme c.27m shares in total vested, and a further c.21m shares are expected people, including regularly holding employee appraisals, to see the areas where we, as to vest under the 2011 Share Scheme. an employer, can improve. We find that regular appraisals also highlight the knowledge The Group also has several policies and systems in place to ensure staff welfare is gaps which our employees have, and allows us to offer staff training which will develop monitored and maintained. These are laid out in the diagram below. their understanding.

During FY15 18.7% of our UK salaried staff left the Group, a decrease from 19.2% in FY14. We estimate that this figure will remain relatively low during the 2011 Share EQUAL OPPORTUNITY & DIVERSITY POLICY Scheme vesting periods. 28 Our Share Schemes are utilised to attract, motivate and incentivise our people and potential future employees. We have found that creating a shared goal has improved employee satisfaction levels. TAILORED Store Manager stability with Sports Direct is currently sitting at 92%, this is an increase EMPLOYEE RIGHT TO A of 6% on the FY14 figure. Assistant Manager and Footwear Manager stability currently HANDBOOK TRADE UNION sit at 86.5% and 90.3% respectively, which is an increase of 6% and 4% across the positions.

SALARIED STAFF TURNOVER SINCE FY10

STAFF FORUM

FY10 17% GRADUATE RECRUITMENT During 2014 we ran our Graduate Recruitment Programme, ‘Talent Bank’. The eight FY11 17% week programme offered graduates placements in our Ecommerce and Finance team FY12 17% with the opportunity to complete projects within the Group and compete for rewards, and the opportunity of a permanent role at the end of the programme. The scheme is FY13 15.5% paid, with interns working on projects similar to those in the work environment. The programme ensures that we are bringing in new talent and the Group is constantly FY14 19.2% evolving with new ideas and ways of thinking.

FY15 18.7%

66 of 150 DIVERSITY KEY HIGHLIGHTS: Diversity within the Group is essential and we believe this plays an important role in Total workforce (total Group): 27,207 a successful business. At all times we try to ensure that our people meet the diversity, Hours invested in training: 58,000 cultures and values of our varied customer base. DEVELOPING OUR PEOPLE – TRAINING PROGRAMMES Our Board currently has a 14% female representation, with further details being The aim of our Staff Training and Development Department is to use the International shown on page 33. We are in the process of looking to recruit another female for the Training Centre to provide the best, state of the art facilities for our team to flourish

Board, although we consider that the necessary skills and experience are of paramount into champions. Our goal is to give every member of our team the opportunity to be IS CHANGING... EVERYTHING importance, with diversity being of lesser significance. inspired, stimulated, motivated, and empowered. We know that it takes every single team member to make a difference and improve the performance of the business. Females make up 32% of our senior management team. While we appreciate that work could be done to ensure that the figure is more balanced, we are satisfied that the We have continued to focus on the need to proactively develop our team’s competence team possesses the appropriate balance of skills and knowledge. As positions become base and leadership capabilities in order to meet the rapidly changing requirements available the necessary level of consideration will be given to ensuring diversity within of the Group. Training is an area in which we have continued to invest, and in FY15 the team. alone, over 58,000 hours were invested into training and developing the team at Sports Direct. Our overall UK workforce base consists of 46.4% females, proving that discrimination for factors including gender will not be tolerated within the Group. The law is paramount We are committed to continue offering a great portfolio of training courses, the majority when we recruit employees and we aim to ensure that both male and female of which are housed in our very own facilities. The portfolio has continued to grow as it candidates are provided with equal opportunities to apply for and work in all positions has year on year with three areas receiving more emphasis: across the Group. • “Home Grown” Talent Management Programme A BREAKDOWN OF GENDER DIVERSITY: • Customer Service Training • Management Induction 29 Male Female Directors 6 1 We have an international approach to training by adopting our principles to those in Other senior managers 37 17 the countries in which we trade. Teams from Austria, Estonia, Czech Republic, Dubai, Malaysia, France, Portugal, Holland, Cyprus, Switzerland, Kuwait, Belgium, Iceland, All UK workforce 11,450 9,899 Hungary, Slovenia, Slovakia, Poland have all attended sessions.

“HOME GROWN” TALENT MANAGEMENT PROGRAMME TALENT & CAPABILITY DEVELOPMENT The Home Grown Talent Management Programme allows us to place the right In the last year we saw the launch of our new competency framework, known as the person in the right position at the right time. It is a structured programme which ‘Success Factors.’ The seven Success Factors provide the behaviours that lead to great shows staff that outstanding performance can lead to further opportunities to progress performance in individual job roles within Sports Direct and include the qualities and within the Group. It helps retain talented and key individuals, which in turn reduces skills that help people to be successful. In short it’s what our ‘best performers do’ and recruitment costs. they describe ‘how we need to be’. Our talent management activities are open to the majority of our workforce, with a We have worked on embedding the Success Factors in to all of our people practices focus on those who consistently show high-potential. It is part of our culture to develop since launch in November 2014. Firstly by introducing new recruitment tools and high-potential employees to grow into future Group leaders, and is a method which we providing our store manager population in the UK with competency based have used since day one. We believe that producing a common standard of behaviour interview training. for those in leadership roles will improve the likelihood of the Group achieving future goals, and enable us to retain real talent, by allowing it to flourish. Secondly, we launched our new annual appraisal across UK Retail, Head Office, Warehouse and Transport. Each division has a Success Factor framework of its very The Programme encourages our workforce to better themselves each and every day. own. Our people review and agree performance within their annual appraisal and set At the end of the Programme, providing the individual has proved to be worthy of development goals to achieve in the coming year. opportunity, key positions will be offered to these who have shown that they are ready to take the next step in their careers. With the introduction of the Success Factors we have created a mechanism of identifying and developing internal talent across the Group to support our future growth plans.

Our teams have a variety of development opportunities using different methods. We encourage growing within one’s current role or taking on new challenging tasks, learning from others, supporting individuals in realising their potential and providing formal training opportunities.

67 of 150 CORPORATE SOCIAL RESPONSIBILITY REPORT CONTINUED

CUSTOMER SERVICE TRAINING FOOTWEAR MASTERCLASS During the year our customer service programme has continued to play a pivotal role Aimed at managers responsible for the footwear department in their branch, the when working with Sports Retail store staff. The training model has continued to be Footwear Masterclass is a three day residential course which focuses on one of the key used by Store Managers, through a combination of seminars and eLearning. departments in a Sports Direct store. Typical subjects covered include merchandising, staff efficiency, best practice, health and safety, policies, and procedures. The ‘Sales through Service’ Model (STARS) reinforces the key elements of successful customer service: E LEARNING It is important that all staff are engaged with who we are and what message we want • Smile to give to customers, and we believe that delivering effective induction training is key • Talk to this. Without a proper induction, there is the risk of staff not understanding • Ask compliance issues or policies, low productivity and poor motivation, poor customer • Recommend service and lost sales. • Sale Recently we implemented a new, interactive induction programme that would create The training works in conjunction with our “5 Star Commission Scheme”, and aims

ANNUAL REPORT 2015 ANNUAL REPORT pride in Sports Direct and ensure consistency and structure in foundation training. to assist growth expectations by showing staff how developing their behaviours can The induction programme is available to all UK Retail staff, aimed at engaging new provide a better service to customers and drive sales. starters and re-energising existing colleagues.

MANAGEMENT INDUCTION Sponge UK, a specialist eLearning company, have been engaged by the Group to New and existing managers have attended the two week residential induction develop an online induction that complements the existing face-to-face training that the programme, which is based at our Shirebrook campus. The programme consists of Group offers. The current modules focus on the four main areas, being sales and service, a mixture of shop floor based training and classroom centred activities, with typical health and safety, merchandising, and day to day operational information. subjects including merchandising, administration, delivery processes, health and safety, These areas are the first in a planned suite of courses that will cover all aspects of the shop closure processes, product training, and retail business skills. Group’s activity.

HIGH PERFORMING MANAGERS As it is important for staff to be able to access the learning on the go, the course has Our elite group of high performing operational managers are offered training via work been designed to work on tablets and smartphones, as well as desktop computers. based schemes which look to further develop their skills. The training schemes include The induction programme is one of the very first Adapt eLearning courses, and we have topics such as effective leadership, team engagement, performance enhancement and 17,000 users who currently feel the benefit of this. managing through change, with the activities based on real work situations. We have 30 found that the training makes an immediate difference to the problem solving, analytical HEALTH AND SAFETY and inter-personal communication skills of those who have been trained. As the Company continues to grow there has been increased focus on creating a consistent method of evaluating health and safety performance. Going forward we are INTERNAL PROMOTION REFRESH PROGRAMME looking to set targets and monitor our performance. Members of the retail team who are put forward for internal promotion are invited to attend the Operational and Managerial Refresh Programme. This is a five day residential In relation to the UK workforce we have calculated the figures per 100,000 hours course that consists of shop floor operational training combined with style and behaviour worked using a 12 month rolling average. The number of accidents involving the modules covering communication, leadership and decision making. warehouse workforce as at April 2015 was 5.9, compared to 2.8 at April 2014. Increased footfall and decreased workspace due to ongoing building works, have both BRAND TRAINING contributed towards the increase. The number of accidents involving the store, office and Robust training programmes to inform and train staff on product innovation and brand distribution workforce has remained static with 2.5 as at April 2015 and April 2014. initiatives continue. This ensures that the links between Sports Direct and the major brands are stronger than ever. In relation to the general public we have calculated the figures per £10m store turnover using a 12 month rolling average. The number of accidents involving the general public Sports Direct is still a heavy user of Nike Sports Knowledge Underground (SKU) and had decreased over the course of the year and was 3.9 as at April 2015, compared to continue to be one of the front runners in terms of percentage completion worldwide. 4.7 in April 2014. SKU provides another eLearning opportunity for the Sports Direct team which allows staff to gain essential foundation knowledge on Nike Products. This foundation Over the course of the year there have been no environmental prosecutions or knowledge is then taken one step further on the Nike Training days held at the Sports work-related fatalities. Direct Training Academy. The days are hosted by Nike Experts (EKINs) and take the foundation knowledge from SKU to a higher level with interaction and involvement. ENVIRONMENT The Nike Graduate Scheme then encourages those who attend the training day to We recognise that we have a responsibility to manage the impact our business has on transfer their learning to the team in-store. By doing so they gain the recognition of the environment, and we are committed to reducing this both now and in the future. becoming a Nike Graduate within their store. Sports Direct works exclusively with Nike We continue to comply with the Government’s Carbon Reduction Commitment, and have on this exceptional training initiative. identified key areas where we can make a difference, in particular energy usage in our Sports Direct works with adidas and Puma to provide bespoke training initiatives to stores, transport and waste management. support the continued growth of adidas and Puma products. Through 2014, many team We are continuously aiming to reduce our carbon footprint. The single most significant members attended specialist adidas sessions, which focused on product knowledge and element is electricity, which makes up 84% of the footprint. The carbon footprint spread selling skills. More dates are in the diary for 2015 to support and capture the main across all UK sites is detailed in the chart opposite. product releases and new innovations in sporting technologies.

68 of 150 CARBON FOOTPRINT ANALYSIS 1 APRIL 2014 - 31 MARCH 2015

This is the second year of mandatory reporting of this data. To provide analysis against previous years we have shown comparative data for electricity-related emissions, which accounts for 84% of our GHG emissions in the current year. Electricity 84% The table below details Electricity vs. Revenue and shows a pro rata increase of 15.9% across the year. Diesel 12%

Year 2015 2014 Other 4% CO2e Emissions from electricity (Tonnes) 80,160 63,393 CO2e Emissions from electricity (Tonnes/£m)(1) 35.6 30.7 Electricity vs. Sales Turnover Index (2012: 100) 117.6 101.5

2 IS CHANGING... EVERYTHING The growth of our Company has increased the number of our stores and therefore the (1) Not including non-UK revenue, in line with the CO e emissions reported. absolute GHG emissions. Our chosen intensity ratio of electricity-related emissions per WASTE REDUCTION £m revenue has increased by 15.9%; 11.5% of which is due to a change in DEFRA’s We are actively reducing the amount of waste we send to landfill and segregate waste to conversion factor, the remainder due to the inclusion of a number of newly acquired ensure that we recycle as much as possible. fitness centres which are more energy consuming and therefore have this effect. THIS YEAR WE RECYCLED: GREENHOUSE GAS (GHG) EMISSIONS REPORTING Reporting period(1) 1 April 2014 - 31 March 2015 • 6,127 units of electrical equipment (2014: 7,099 units) • 94 tonnes of waste paper (2014: 78 tonnes) Baseline year FY12 • 9,526 tonnes of cardboard (2014: 9,230 tonnes) Consolidation Operational control • 235 tonnes of metal (2014: 147 tonnes) approach • 618 tonnes of plastic (2014: 558 tonnes) Boundary All UK entities and facilities either owned or under operational summary control were included. Emissions from air conditioning and All stores now use biodegradable carrier bags and provide the option of a “bag for life”. refrigeration units are excluded due to the cost of data This is actively promoted in-store through high levels of staff engagement. collection. These are expected to be a negligible % of scope 31 1 emissions. Looking ahead, we will continue our commitment to minimise waste and improve energy efficiency across our stores. Consistency Other than the emissions declared for the period 1 April with Financial 2014 – 31 March 2015 to be in line with the CRC Energy Statements Efficiency Scheme, there are no inconsistencies with Financial CUSTOMERS Statements. Customer service is at the forefront of our business. We aim to provide customers with an enjoyable experience both in-store and online and ensure all our products are safe Emission factor DEFRA (May 2013) and fit for purpose. data source Assessment The Greenhouse Gas Protocol and ISO 14064-1 (2006). We Monitoring customer satisfaction and responding to queries is a continuous process. methodology have used the 2014 UK Government’s GHG conversion factors. All written complaints are recorded, including an analysis of the nature of the complaint Materiality Materiality was set at Group level at 5%, with all UK facilities so that trends can be assessed and appropriate action taken. threshold estimated to contribute >0.5% of total emissions included We have an online customer contact form that reduces the time it takes for our Intensity ratio Emissions per £m revenue customers to contact us and increases the volume of contact. Online communication has (1) The emissions declared are for the period 1 April 2014 – 31 March 2015 to be in line with the CRC Energy reduced the amount of time it takes for us to respond to queries thereby increasing our Efficiency Scheme. service levels, while reducing the print and postage costs for both the Group and customers. Scope 1 GHG emissions are calculated based on the purchased quantities of commercial fuels using published emission factors. Scope 2 GHG emissions are primarily calculated We are continuously working to improve customer service at all levels within the Group from metered electricity consumption and published emission factors. from the retail stores, Head Office and through to our website. CO2 equivalent factors are used which ensures we have reported on all of the emission sources required under the Companies Act 2006 Regulations.

Group UK Only UK Only Year 2015 2015 2014 Scope 1 CO2e emissions 14,129 12,801 11,206 Scope 2 CO2e emissions 116,335 82,455 64,747 Total Scope 1 and Scope 2 130,464 95,256 75,953 CO2e emissions (Tonnes) CO2e Emissions (Tonnes/£m) 46.1 42.3 36.8

69 of 150 CORPORATE SOCIAL RESPONSIBILITY REPORT CONTINUED

DUNLOP

COMMUNITY Dunlop works together with its sponsored professional golfers Lee Westwood and Darren SUPPLY CHAIN Clarke to supply clothing to their ‘golf schools’. These are junior player development We are committed to responsible business practices in our own business and within our schemes which provide qualified coaching and mentoring to youngsters. supply chain. We continue to procure merchandise from manufacturers who have proved to uphold ethical employment and trading practices, and we have a strict Code of Ethics Over £40,000 worth of clothing has been provided through sponsorship to the schemes

that we require every supplier to adhere to. The Code provides for the fair treatment of so far. workers, ensuring a safe environment in accordance with the local and national laws where workers are treated with respect and paid fairly for what they do. The code LONSDALE also ensures there is no child labour and no use of illegal means or materials in the Lonsdale is the Official Equipment and Fight Sports Apparel Supplier for the RAF and the production of goods. Royal Navy. We are the proud sponsor of the RAF annual Novice Championships, The Lord Wakefields. We have longstanding relationships with our suppliers who have demonstrated that their ANNUAL REPORT 2015 ANNUAL REPORT work practices are consistent with Sports Direct’s standards. Approximately 40% of our At a grassroots level, Lonsdale is also a sponsor of the England Boxing Lonsdale Golden current suppliers have been working with the Company for 10 years or more. We have Gloves School Championships and provides 50 pairs of golden gloves, worth £2,000 to worked with two leading supply chain companies in Singapore and South Korea for a the finalists free of charge. number of years. Using their local knowledge and experience helps benefit the business and the communities in which they operate. Both businesses have the highest social EVERLAST and business ethics code which aligns with our own Code of Ethics, the BSCI Code of Everlast supports a variety of organisations throughout the year, including both Conduct (which is based upon the United Nations Declaration of Human Rights) and the sports-oriented and charitable programmes. A long-standing supporter of the most Social Accountability 8000 (SA8000) Code. prestigious amateur boxing competition in the US; the New York Golden Gloves, Everlast is the official fight glove and apparel sponsor. The organisation celebrated Sports Direct relies on those supply chain companies to inspect the premises of all its 88th year in April. suppliers and manufacturers. Frequent inspections are carried out randomly to ensure that goods meet our quality standards as well as assessing continued compliance with Since 2006, Everlast has also served as a proud supporter of The Breast Cancer SA8000 and our Code of Ethics. We cease immediately to work with suppliers who do Research Foundation® (BCRF). Each year, Everlast donates a portion of the sale not meet our criteria. proceeds from selected pink products to help the foundation provide funding for clinical and genetic research. Last year, Everlast donated $57,433 to BCRF’s research efforts 32 We comply with an internationally recognised list of chemicals that are banned for use to find a cure. in fabrics. The supply chain companies conduct random tests on fabric which are then taken to a recognised laboratory for quality testing and to ensure that banned chemicals ANTIGUA GROUP are not being used. Antigua supports a wide variety of sports related and charity related events throughout the year. These include The Phoenix Children’s Hospital Annual Golf Classic, The CHARITY Scottsdale Charros Foundation, The Jerry Colangelo Prostate Cancer Event and The Year on year we dedicate money, clothing and equipment to worthy charities, to Salvation Army. ensure that sport can be enjoyed and appreciated by all backgrounds. Sport is not only important to leading a fit and healthy lifestyle, but should also be seen as fun. Our Antigua is also heavily involved in the promotion of Junior Golf in Arizona and around dedications go some way towards allowing sports to be enjoyed by a variety of unlikely the country. Antigua has sponsored “The Antigua Junior Tour” in partnership with the sportsmen and women. SWSPGA for over 20 years and also supports Girls Golf, The First Tee and The Junior Golf Association of Arizona. In recent years, Antigua has helped to create the Antigua KARRIMOR National High School Golf Invitational which invites teams from all over the United Karrimor became the official clothing and equipment supplier to the charity team States to participate. ‘Waves4hope’. The seven man squad successfully completed the challenge of a lifetime, rowing the English Channel for three great charities; Saving Faces, The Royal Marsden The Strategic Report was approved by a duly authorised Committee of the Board of Cancer Charity and Sail4Cancer. The novice team were fully equipped with Karrimor gear Directors on 16 July 2015, and signed on its behalf by: to take on this gruelling venture, with the aim of raising £30,000. Congratulations to the team on their outstanding achievement. Dave Forsey SLAZENGER ‘CHANCE TO SHINE’ Chief Executive Slazenger is the exclusive cricket equipment supplier to the country’s most recognised 16 July 2015 grassroots cricket development programme, ‘Chance to Shine’. Each project provides structured coaching and a competition programme for a group of schools who would not have otherwise had the chance to participate in the sport.

By 2013, the programme had reached one third of all primary and secondary schools amounting to almost 7,000 schools and has supported two million young people, almost half of whom are girls. Over £600,000 worth of cricket equipment has been supplied by Slazenger to enable the programme to run successfully.

70 of 150 THE BOARD

AUDIT COMMITTEE NOMINATION COMMITTEE REMUNERATION COMMITTEE

DR KEITH HELLAWELL QPM NON-EXECUTIVE CHAIRMAN, CHAIRMAN OF NOMINATION COMMITTEE SIMON BENTLEY APPOINTED: 24 November 2009 SENIOR INDEPENDENT NON-EXECUTIVE DIRECTOR, CHAIRMAN OF COMMITTEES: Nomination and Remuneration Committees AUDIT COMMITTEE 02 March 2007 PREVIOUS ROLES: Prior to joining the team at Sports Direct International plc, Dr APPOINTED: Hellawell spent over 40 years in public sector management being a former Chief Constable COMMITTEES: Audit, Nomination and Remuneration Committees of two British police forces. While working directly for the Prime Minister between 1998 and 2002 he wrote and coordinated the United Kingdom national and international PREVIOUS ROLES: Simon qualified as a Chartered Accountant in 1980 and in 1987 anti-drugs policy. Dr Hellawell has been involved in the private sector since 1998 when joined Blacks Leisure Group Plc where he was Chairman and Chief Executive for 12 years. he joined Evans of Leeds, a fully listed property company. Since then he has served on the Boards of both Dalkia plc and Sterience Limited, subsidiaries of the French company PRESENT ROLES: Simon chairs and is on the board of a range of companies and Veolia Env. He was Non-Executive Chairman of Goldshield Group plc, a marketing-led organisations. Among these, he is Chairman of the hair brand Umberto Giannini, is the

pharmaceutical and consumer health company, from May 2006 to its sale in December principal owner and Chairman of the leading mobile ATM operator Cash on the Move, IS CHANGING... EVERYTHING 2009. He has held a number of other Non-Executive Board positions in private companies is a Supervisory Board Director of Global Home, a designer and manufacturer of indoor including sectors such as vehicle manufacturing and IT. furniture for retailers, based in Vietnam, and is Chairman of Yad Vashem – UK Foundation.

PRESENT ROLES: Dr Hellawell is currently a Non-Executive Director of Mortice plc, a KEY SKILLS AND EXPERIENCES: He has lengthy experience of the sporting goods Singapore-based facilities management company and a Director of the Super League team industry, and maintains the recent and relevant experience necessary to be Chairman of Huddersfield Giants. He also runs his own management and training consultancy company. the Audit Committee.

KEY SKILLS AND EXPERIENCES: Dr Hellawell has worked in both the public DAVE SINGLETON and private sector for over 50 years. Throughout this time he has built up a wealth of NON-EXECUTIVE DIRECTOR, CHAIRMAN OF REMUNERATION experience which he brings to the Group to ensure the successful and effective operation COMMITTEE of the Board. APPOINTED: 27 October 2007

MIKE ASHLEY COMMITTEES: Audit, Nomination and Remuneration Committees EXECUTIVE DEPUTY CHAIRMAN APPOINTED: 1982 (founder) PREVIOUS ROLES: Dave spent 25 years with Reebok International Limited. He stepped down in April 2007 having assisted with the successful integration of Reebok 33 PREVIOUS ROLES: Mike established the business of the Group on leaving school in following its acquisition by adidas Group in January 2006. For eight years he was Vice 1982 and was the sole owner until the Group’s listing in March 2007. President of Northern Europe Region & UK and then was Senior Vice President of Europe, Middle East & Africa. KEY SKILLS AND EXPERIENCES: Mike was the founder of the Group and has the necessary skills for formulating the vision and commercial strategy of the Group. With over PRESENT ROLES: Dave is Chairman of Bolton Lads & Girls Club, Chairman of Bolton 30 years in the sports retail business with Sports Direct he is invaluable to the Group. Community Leisure Trust and a Trustee at Bolton Wanderers Community Trust.

DAVE FORSEY KEY SKILLS AND EXPERIENCES: Dave has an extensive senior management CHIEF EXECUTIVE record and brings valuable experience of international sports brand operations. APPOINTED: 1984 CLAIRE JENKINS KEY SKILLS AND EXPERIENCES: Dave has been with the business for over 30 NON-EXECUTIVE DIRECTOR years, during which time he has acquired significant knowledge and experience of the APPOINTED: 25 May 2011 sports retail business. In conjunction with the Executive Deputy Chairman, he agrees strategy, appropriate objectives and policies for each of the businesses. Dave has overall COMMITTEES: Audit, Nomination and Remuneration Committees responsibility for the daily management of the Group. PREVIOUS ROLES: Claire’s most recent Executive role was as Group Director Corporate Affairs and a member of the Executive Leadership Team, responsible for the MATT PEARSON company’s sustainability and communications activities, at Rexam plc, a leading global ACTING CHIEF FINANCIAL OFFICER beverage can maker. Prior to that, she was a member of the Management Committee of APPOINTED: 04 June 2015 international tobacco company Gallaher Group plc (acquired by Japan Tobacco in 2007) PREVIOUS ROLES: A graduate in Maths, he qualified with Tenon, now part of Baker where she was responsible for investor relations and Group planning. Claire has also Tilly, in 2004. He subsequently joined Ernst and Young, now EY, in Nottingham where he gained corporate experience in various consulting roles and at Laing & Cruickshank, and as worked as an auditor before joining the Group. a Non-Executive Director of Retro Classics Fund.

KEY SKILLS AND EXPERIENCES: Matt joined the Group in June 2007, shortly PRESENT ROLES: Claire is Chairman of Amicus, and a Non-Executive Director of Media after it listed on the London Stock Exchange, and has since worked closely with the For Development. Executive team and the Audit Committee in his role as Group Financial Controller. KEY SKILLS AND EXPERIENCES: Claire has excellent all-round business experience Matt is a qualified Chartered Accountant, with substantial knowledge of all financial and, in addition, has particular corporate governance and communication skills. aspects of the Group.

71 of 150 DIRECTORS’ REPORT

The Directors of Sports Direct International plc present their Annual Report and Accounts for the year ended 26 April 2015.

PRINCIPAL ACTIVITIES AND BUSINESS REVIEW A further authority to allot shares up to a maximum nominal value of £2,992,324 The Chief Executive’s Report on pages 21 to 24 provides a detailed review of the Group’s (being approximately 5% of the then issued share capital) as if statutory pre-emption current activities and potential future developments together with factors likely to affect rights did not apply, was also approved. future development, performance and conditions. There is also a table of the principal The authorities expire at the close of the next Annual General Meeting of the Company,

risks and uncertainties likely to affect the Group. The financial position of the Group, its but a contract to allot shares under these authorities may be made prior to the expiry of cash flow, liquidity position and borrowing facilities are described in the Financial Review the authority and concluded in whole or part after the Annual General Meeting, and at that on pages 25 to 27. The Corporate Responsibility Report on pages 28 to 32 reports on meeting other authorities will be sought from shareholders. environmental matters, including the impact of the Group’s businesses on the environment, the Group’s workforce, and on social and community issues. The Group was authorised to make market purchases of ordinary shares of 10p each in the Company of up to a maximum aggregate number 59,846,486 representing The principal activities of the Group during the year remained unchanged and were:

ANNUAL REPORT 2015 ANNUAL REPORT 10% of the Company’s issued ordinary share capital at the 2014 Annual General • retailing of sports and leisure clothing, footwear and equipment; Meeting. The above authority expires at the close of the next Annual General Meeting • wholesale distribution and sale of sports and leisure clothing, footwear and equipment of the Company. under Group-owned or licensed brands; and • licensing of Group brands. SHAREHOLDERS No shareholder enjoys any special control rights, and, except as set out below, there are Further information of the Group’s principal activities is set out in the front of this no restrictions in the transfer of shares or of voting rights. document and in the Chief Executive’s Report on pages 21 to 24. Mike Ashley has entered into a Relationship Agreement with the Company. Under the RESULTS FOR THE YEAR AND DIVIDENDS terms of the Agreement Mike Ashley undertook that, for so long as he is entitled to Revenue for the 52 weeks ended 26 April 2015 was £2,832.6m and profit before exercise, or to control the exercise of, 15% or more of the rights to vote at general tax was £313.4m compared with £2,706.0m and £239.5m in the prior year. meetings of the Company, he will; The trading results for the year and the Group’s financial position as at the end of the • conduct all transactions and relationships with any member of the Group on arm’s year are shown in the attached Financial Statements, and discussed further in the Chief length terms and on a normal commercial basis; Executive’s Report and Business Review and in the Financial Review on pages 21 to 24 • exercise his voting rights or other rights in support of the Company being managed in 34 and 25 to 27 respectively. accordance with the Listing Rules and the principles of good governance set out in the The Board has determined not to recommend a dividend this year. UK Corporate Governance Code and not exercise any of his voting or other rights and powers to procure any amendment to the Articles of Association of the Company; SHARE CAPITAL AND CONTROL • other than through his interest in the Company, not have any interest in any business The authorised share capital of the Company is £100,000,000 divided into 999,500,010 which sells sports apparel and equipment subject to certain rights, after notification to ordinary shares of 10p each and 499,990 redeemable preference shares of 10p each. the Company, to acquire any such interest of less than 20% of the business concerned, and certain other limited exceptions, without receiving the prior approval of the Non- Further information regarding the Group’s issued share capital can be found on page 77 Executive Directors; and not solicit for employment or employ any senior employee of of the Financial Statements. the Company.

Details of our Share Schemes are also set out on page 77. The Company has been advised that the following parties had a significant direct or indirect shareholding in the shares of the Company: There are 640,602,369 ordinary shares of 10p in issue and fully paid of which PERCENTAGE OF ISSUED 42,137,508 are currently held in Treasury. NUMBER OF ORDINARY SHARE CAPITAL SHARES HELD WITH VOTING RIGHTS HELD NATURE OF HOLDING (1) There are no specific restrictions on the transfer of shares, which are governed both by Mike Ashley 330,000,000 55.14% Indirect The Capital Group the general provisions of the Articles of Association and prevailing legislation. 33,671,254 5.63% Indirect Companies, Inc. (2) The Directors are not aware of any agreements between holders of the Company’s shares Odey Asset 29,852,065 4.99% Indirect that may result in restrictions on the transfer of securities or on voting rights. Management (3)

(1) Mike Ashley holds the shares through two companies, namely MASH Beta Limited and MASH Holdings Limited, which hold 303,507,460 (50.71% of the The Directors were authorised to allot shares in the capital of the Group up to an aggregate issued ordinary share capital of the Company) and 26,492,540 (4.43% of the issued ordinary share capital of the Company) ordinary shares respectively. These nominal amount of £19,948,829 (being approximately one third of the then issued figures are as at 21 January 2015, being the last date on which the Company was notified of a change in the percentage of shares. (2) These figures are as at 10 July 2015, being the last date on which the Company was notified of a change in the percentage of shares. share capital) for the period expiring at 9 September 2015, the date of the 2015 Annual (3) These figures are as at 15 July 2015, being the last date on which the Company was notified of a change in the percentage of shares. General Meeting.

In line with guidance from the Association of British Insurers the Company was also granted authority to issue a further third of the issued share capital to a nominal amount of £39,897,658 (being approximately 35% of the issued share capital) in connection with a rights issue.

72 of 150 SUPPLIERS The Group does all that is practicable to meet its responsibilities towards the training and The Group understands the importance of maintaining good relationships with suppliers and it is Group employment of disabled people, and to ensure that training, career development and policy to agree appropriate terms and conditions for its transactions with suppliers (ranging from promotion opportunities are available to all. standard written terms to individually negotiated contracts) and for payment to be made in accordance with these terms, provided the supplier has complied with its obligations. The Group makes every effort to provide continuity of employment where current employees become disabled. Attempts are made in every circumstance to provide CONTRACTS ESSENTIAL TO THE BUSINESS employment, whether this involves adapting the current job role and remaining in the OF THE COMPANY same job, or moving to a more appropriate job role. Job retraining and job adaptation are The Chief Executive’s Report on pages 21 to 24 details information about persons with whom the just two examples of how the Group works in the interests of its workforce to promote Group has contractual or other arrangements and are deemed essential or material to the business of equal opportunities in order that an individual’s employment within the Group may the Group. continue. The Group values the knowledge and expertise that employees have gained

throughout their time with us, and therefore does not wish to lose IS CHANGING... EVERYTHING TAKEOVERS valued employees. The Directors do not believe that there are any significant contracts that may change in the event of a successful takeover of the Company. Details of the impact of any successful With the aim of achieving our target of 25% female representation on our Board, we are takeover of the Group on the Directors’ bonus and share schemes are set out in the actively seeking applications from female potential Non-Executive Directors. Director’s Remuneration Report on pages 44 to 52. RESEARCH AND DEVELOPMENT SHARE SCHEMES The Group designs clothing and some footwear for sale in stores and has arrangements Details of the Executive Share Schemes are set out in the Directors’ Remuneration Report with suppliers for the research and development of goods for the Brands division. on page 45 and details of the Share Schemes for participating employees on page 28 of the Corporate Social Responsibility Report. CHARITABLE AND POLITICAL DONATIONS During the year, the Group made charitable cash donations of £117,000 STAFF INVOLVEMENT (2014: £147,000) in the UK. No political donations were made (2014: nil). There have The Group currently has a c.27,000 strong workforce in its stores, offices and warehouses. been a number of further donations of sporting equipment made to worthy causes, and The contributions that key employees have made to the Group’s accomplishments have these are set out on page 32. played a vital role, and the overwhelming dedication shown was the deciding factor in 35 encouraging the Group to propose a third Share Scheme. DIRECTORS Details of current Directors, dates of appointment, their roles, responsibilities and The 2009 Share Scheme vested in August 2012 and 2013. The 2011 Share Scheme is significant external commitments are set out on page 33. due to vest later in 2015 and in 2017. Although the Company’s Articles of Association require retirement by rotation of one third The 2015 Share Scheme was approved by shareholders at a General Meeting which of Directors each year, the Group has chosen to comply with the 2012 UK Corporate took place on 2 July 2014, with the EBITDA targets for the Scheme spanning between Governance Code and at each Annual General Meeting all of the Directors will retire and FY16 and FY19. The Scheme differs from the previous two Share Schemes as eligibility stand for reappointment. to participate in the scheme is open to both employees and Executive Directors, as determined by the Board. Information on service contracts and details of the interests of the Directors and their families in the share capital of the Company at 26 April 2015 and at the date of this The workforce is notified of announcements and major changes in the business via Report is shown in the Directors’ Remuneration Report on pages 48 and 51. Company news emails and our intranet, as well as information being transmitted through line managers. Training programmes and induction courses provide the workforce with Copies of the service contracts of Executive Directors and of the appointment letters of opportunities to keep up to date with the latest developments of the Group. Our annual the Chairman and Non-Executive Directors are available for inspection at the Company’s conference offers them an opportunity to mix with teams with which they wouldn’t registered office during normal business hours and at the Annual General Meeting. ordinarily mix, to learn about the Group’s aspirations, and to keep up to date with the latest changes in the Group. This is a full day event and also has a range of activities No Director has a directorship in common or other significant links with any other Director tailored to the specific area in which each individual works. (except in the case of the Executive Directors holding directorships of subsidiary companies of the Group). Further information on relationships with our people can be found in the Corporate Social Responsibility Report on pages 28 to 32. DIRECTORS’ CONFLICTS OF INTEREST The Board has formal procedures to deal with Directors’ conflicts of interest. During the EQUAL OPPORTUNITIES year the Board reviewed and, where appropriate, approved certain situational conflicts of The Group’s recruitment policy is to match the capabilities and talents of each applicant interest that were reported to it by Directors, and a register of those situational conflicts to the appropriate job. Factors such as gender, race, religion or belief, sexual orientation, is maintained and reviewed. The Board noted any transactional conflicts of interest age, disability or ethnic origin should be ignored and any decision which is made with concerning Directors that arose and were declared. No Director took part in the discussion regard to candidates should be irrespective of these. Discrimination in any form will not be or determination of any matter in respect of which he had disclosed a transactional conflict tolerated under any circumstances within the Group. of interest.

Applications for employment by disabled persons are given full and fair consideration for all vacancies, and are assessed in accordance with their particular skills and abilities.

73 of 150 DIRECTORS’ REPORT CONTINUED

DIRECTORS’ INDEMNITIES The Group’s forecasts and projections, taking account of reasonable possible changes in The Group has granted the Directors with Qualifying Third-Party Indemnity provisions trading performance, show that the Group should be able to operate within the level of the within the meaning given to the term by Sections 234 and 235 of the Companies Act current facility. 2006. This is in respect of liabilities to which they may become liable in their capacity as Having thoroughly reviewed the Group’s performance and having made suitable enquiries, Director of the Company and of any company within the Group. Such indemnities were in the Directors are confident that the Group has adequate resources to remain in operational force throughout the financial year and will remain in force. existence for the foreseeable future. On this basis, the Directors continue to adopt the going concern basis for the preparation of the Annual Report and Financial Statements.

ANNUAL GENERAL MEETING The 2015 Annual General Meeting will be held on 9 September 2015 at Unit D, Brook Park East, Shirebrook, NG20 8RY. The Meeting will commence at 11am. The Board ACCOUNTABILITY AND AUDIT A statement by the Auditor can be found on page 56 detailing their reporting encourages shareholders to attend and participate in the meeting. responsibilities. The Directors fulfil their responsibilities and these are set out in the GOING CONCERN responsibility statement on page 53. The Group’s business activities, together with the factors likely to affect its future ANNUAL REPORT 2015 ANNUAL REPORT development, performance and position are set out in the Business Review on pages 21 AUDITOR Grant Thornton UK LLP have expressed a willingness to continue in office. In accordance to 24. with Section 489 (4) of the Companies Act 2006, resolutions to determine remuneration The financial position of the Group, its cash flows, liquidity position and borrowing facilities are to be agreed at the Annual General Meeting. are described in the Financial Review on pages 25 to 27. In addition, the Financial By Order of the Board Statements include the Group’s objectives, policies and processes for managing its capital; its financial risk management objectives; details of its financial instruments and hedging activities; and its exposures to credit risk and liquidity risk. Cameron Olsen Company Secretary The Group is profitable, highly cash generative and has considerable financial resources. The Group is able to operate comfortably within its banking facilities and covenants, which 16 July 2015 run until September 2018, and is well placed to take advantage of strategic opportunities as they arise.

As a consequence, the Directors believe that the Group is well placed to manage its 36 business risks successfully despite the continued uncertain economic outlook.

74 of 150

Sports Direct Guardian Article

Data Provided by Historical Equity Pricing Data supplied by

75 of 150 The Guardian online 11 January 2016

Sports Direct’s shares have tumbled a further 7% after analysts warned about the company’s prospects following Friday’s profit warning. Monday’s fall means more than £1bn has been wiped off the retailers’ stock market value so far this year.

Analysts at Cantor Fitzgerald said they been giving the company, founded by Mike Ashley, the benefit of the doubt until Friday’s surprise stock market announcement. “In view of the lack of transparency on strategy and in view that the company is likely to be eliminated from the FTSE100 over the next quarter, we are now taking a more cautious view on valuation.”

At Liberum, analysts said: “While the latest update only related to weakness over the past month we see a lack of earnings momentum in the short to medium term, and a lack of European mergers and acquisitions.”

Liberum added that while the company has “levers that it can pull” – notably automating the distribution centre – it “will not do so until the future shape of the business is clear”

The slide in shares was accelerated on Friday when the company warned that annual profits would be £40m lower than expected because of unseasonably warm weather and fewer shoppers on the high street.

That profits warning followed the Guardian’s investigation into the treatment of staff by the retailer which specialises in selling branded footwear and sports clothing. The investigation found that the company effectively paid thousands of temporary workers below the national minimum wage of £6.70 an hour and subjects warehouse staff to a regime of searches and surveillance.

The shares closed 15% lower on Friday after the profits warning

76 of 150 and have now lost 30% so far this year. There have already been warnings that unless the share price recovers the company risks falling out of the FTSE 100 index of the biggest shares on the stock market at the next reshuffle in March.

On New Year’s Eve Sports Direct pledged £10m for a pay rise for staff from the start of this year.

77 of 150

Sample Share Prices

Data Provided by Historical Equity Pricing Data supplied by

78 of 150 Sample share prices:

Sports JD Direct

Pence Pence

24 March 348 1,106

31 December 577 1,041

30 November 731 971

30 October 697 966

30 September 757 955

79 of 150

JD Sports Capital IQ spreadsheets: Financials

Data Provided by Historical Equity Pricing Data supplied by

80 of 150 JD Sports Fashion plc (LSE:JD.) > Financials > Key Stats

In Millions of the trading currency, except per share items. Currency: Trading Currency Conversion: Historical Order: Latest on Right Units: S&P Capital IQ (Default) Decimals: Capital IQ (Default) Dilution: Basic

Key Financials¹ LTM² For the Fiscal Period Ending 12 months 12 months 12 months 12 months 12 months 12 months† 12 months 12 months Jan-28-2012A Feb-02-2013A Feb-01-2014A Jan-31-2015A Aug-01-2015A Jan-31-2016E Jan-31-2017E Jan-31-2018E Currency GBP GBP GBP GBP GBP GBP GBP GBP

Total Revenue 1,059.5 1,258.9 1,216.4 1,522.3 1,661.9 1,801.64 1,958.16 2,109.71 Growth Over Prior Year 19.9% 18.8% (3.4%) 25.1% 26.0% 18.35% 8.69% 7.74%

Gross Profit 520.8 613.5 592.2 739.6 802.4 - - - Margin % 49.2% 48.7% 48.7% 48.6% 48.3% - - -

EBITDA 100.3 91.1 116.4 144.8 169.4 190.72 208.17 225.21 Margin % 9.5% 7.2% 9.6% 9.5% 10.2% 10.59% 10.63% 10.68%

EBIT 76.5 61.3 83.0 102.3 123.4 - - - Margin % 7.2% 4.9% 6.8% 6.7% 7.4% - - -

Earnings from Cont. Ops. 49.3 41.2 57.9 69.8 85.9 - - - Margin % 4.7% 3.3% 4.8% 4.6% 5.2% - - -

Net Income 46.8 38.8 40.2 52.7 74.4 - - - Margin % 4.4% 3.1% 3.3% 3.5% 4.5% - - -

Diluted EPS Excl. Extra Items³ 0.24 0.2 0.29 0.35 0.43 0.53 0.58 0.63 Growth Over Prior Year (16.2%) (17.2%) 45.9% 20.9% 20.9% 36.82% 9.89% 7.68%

Same Store Sales Growth % 0.3% NA NA 12.0% NA - - -

Currency GBP GBP GBP GBP GBP GBP GBP GBP Exchange Rate 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 Conversion Method H H H H H S S S

¹All results are taken from the most recently filed statement for each period. When there has been more than one, earlier filings can be viewed on the individual statement pages. ²Growth rates for the LTM period are calculated against the LTM period ending 12 months before. ³All forward period figures are consensus mean estimates provided by the brokers and may not be on a comparable basis as financials. 81 of 150 †Growth rates for forward periods are calculated against prior period estimates or actual pro forma results as disclosed on the Estimates Consensus page. Growth Rates are calculated in originally reported currency only and will not reflect any currency conversion selected above.

Latest Capitalization (Millions of GBP) Currency GBP Share Price 11.04 Shares Out. 194.6

Market Capitalization 2,148.9 - Cash & Short Term Investments 160.3 + Total Debt 60.0 + Pref. Equity - + Total Minority Interest 13.3 = Total Enterprise Value (TEV) 2,061.9

Book Value of Common Equity 316.1 + Pref. Equity - + Total Minority Interest 13.3 + Total Debt 60.0 = Total Capital 389.4

82 of 150 Note: Striped area represents the impact of negative Net Liability on Market Cap. Total Liability includes Total Debt, Minority Interest and Pref. Equity. Net Liability includes Total Liability, net of Cash and Short Term Investments. TEV includes Market Cap and Net Liability. Total Capital includes Common Equity and Total Liability.

Valuation Multiples based on Current Capitalization LTM For the Fiscal Period Ending 12 months 12 months 12 months 12 months 12 months Jan-31-2015A Aug-01-2015A Jan-31-2016E Jan-31-2017E Jan-31-2018E TEV/Total Revenue 1.4x 1.2x 1.15x 1.06x 0.98x

TEV/EBITDA 14.3x 12.2x 10.83x 9.93x 9.18x

TEV/EBIT 20.3x 16.7x - - -

P/Diluted EPS Before Extra 31.4x 25.4x 20.79x 18.92x 17.57x

P/BV 7.2x 6.8x - - -

Price/Tang BV 11.0x 10.0x - - -

83 of 150 JD Sports Fashion plc (LSE:JD.) > Financials > Income Statement

Income Statement Reclassified LTM For the Fiscal Period Ending 12 months 12 months 12 months 12 months 12 months 12 months Jan-29-2011 Jan-28-2012 Feb-02-2013 Feb-01-2014 Jan-31-2015 Aug-01-2015 Currency GBP GBP GBP GBP GBP GBP

Revenue 883.7 1,059.5 1,258.9 1,216.4 1,522.3 1,661.9 Other Revenue ------Total Revenue 883.7 1,059.5 1,258.9 1,216.4 1,522.3 1,661.9

Cost Of Goods Sold 446.7 538.7 645.4 624.2 782.7 859.5 Gross Profit 437.0 520.8 613.5 592.2 739.6 802.4

Selling General & Admin Exp. 359.3 447.1 554.6 510.8 638.2 680.1 R & D Exp. ------Depreciation & Amort. ------Other Operating Expense/(Income) (2.2) (2.7) (2.4) (1.7) (0.9) (1.1)

Other Operating Exp., Total 357.1 444.4 552.2 509.1 637.2 678.9

Operating Income 79.9 76.5 61.3 83.0 102.3 123.4

Interest Expense (0.5) (1.0) (1.5) (1.6) (2.8) (2.7) Interest and Invest. Income 0.6 0.6 0.6 0.6 0.7 0.5 Net Interest Exp. 0.2 (0.4) (0.9) (1.0) (2.2) (2.2)

Income/(Loss) from Affiliates 2.8 1.1 - - - - Other Non-Operating Inc. (Exp.) ------EBT Excl. Unusual Items 82.9 77.1 60.5 82.0 100.2 121.2

Restructuring Charges - (8.0) (1.3) (3.3) - - Merger & Related Restruct. Charges - - - - (0.1) (0.1) Impairment of Goodwill - (1.5) (2.3) - (4.2) (4.2) Asset Writedown (1.0) (2.8) (0.9) (0.5) (1.9) (2.0) Other Unusual Items (3.3) 2.6 (0.9) (1.4) (3.5) (3.5) EBT Incl. Unusual Items 78.6 67.4 55.1 76.8 90.5 111.5

84 of 150 Income Tax Expense 22.8 18.1 13.9 18.9 20.7 25.6 Earnings from Cont. Ops. 55.9 49.3 41.2 57.9 69.8 85.9

Earnings of Discontinued Ops. - - - (16.4) (15.8) (10.1) Extraord. Item & Account. Change ------Net Income to Company 55.9 49.3 41.2 41.5 54.0 75.7

Minority Int. in Earnings 0.0 (2.5) (2.5) (1.3) (1.3) (1.4) Net Income 55.9 46.8 38.8 40.2 52.7 74.4

Pref. Dividends and Other Adj. ------

NI to Common Incl Extra Items 55.9 46.8 38.8 40.2 52.7 74.4 NI to Common Excl. Extra Items 55.9 46.8 38.8 56.6 68.5 84.5

Per Share Items Basic EPS 0.29 0.24 0.2 0.21 0.27 0.38 Basic EPS Excl. Extra Items 0.29 0.24 0.2 0.29 0.35 0.43 Weighted Avg. Basic Shares Out. 194.6 194.6 194.6 194.6 194.6 194.6

Diluted EPS 0.29 0.24 0.2 0.21 0.27 0.38 Diluted EPS Excl. Extra Items 0.29 0.24 0.2 0.29 0.35 0.43 Weighted Avg. Diluted Shares Out. 194.6 194.6 194.6 194.7 194.7 194.7

Normalized Basic EPS 0.27 0.23 0.18 0.26 0.31 0.38 Normalized Diluted EPS 0.27 0.23 0.18 0.26 0.31 0.38

Dividends per Share 0.06 0.06 0.07 0.07 0.07 0.07 Payout Ratio % 16.1% 24.2% 32.0% 32.1% 25.2% 17.8%

Supplemental Items EBITDA 99.8 100.3 91.1 116.4 144.8 169.4 EBITA 81.4 78.9 64.1 85.6 109.2 130.3 EBIT 79.9 76.5 61.3 83.0 102.3 123.4 EBITDAR 182.1 195.2 211.3 232.2 270.5 NA Effective Tax Rate % 28.9% 26.8% 25.2% 24.6% 22.9% 23.0% Current Domestic Taxes 23.6 19.8 13.5 19.2 22.6 27.4 Total Current Taxes 23.6 19.8 13.5 19.2 22.6 27.4 Total Deferred Taxes (0.9) (1.7) 0.4 (0.3) (1.9) (1.9)

Normalized Net Income 51.8 45.7 35.3 49.9 61.3 74.4 Interest on Long Term Debt NA 0.1 0.1 0.2 0.2 NA Filing Date May-18-2012 Apr-17-2013 May-24-2014 May-21-2015 May-21-2015 Oct-20-2015

85 of 150 Restatement Type NC NC NC RD O NCA Calculation Type REP REP REP REP REP LTM

Supplemental Operating Expense Items Selling and Marketing Exp. 326.3 403.9 494.6 455.7 564.3 601.3 General and Administrative Exp. 33.0 43.2 60.0 55.2 73.8 78.7 Net Rental Exp. 82.3 94.8 120.2 115.8 125.7 NA Imputed Oper. Lease Interest Exp. 74.5 148.3 198.2 76.2 82.3 - Imputed Oper. Lease Depreciation 7.9 (53.5) (78.1) 39.6 43.4 -

Note: For multiple class companies, per share items are primary class equivalent, and for foreign companies listed as primary ADRs, per share items are ADR-equivalent.

86 of 150 JD Sports Fashion plc (LSE:JD.) > Financials > Balance Sheet In Millions of the reported currency, except per share items. Template: Standard Restatement: Latest Filings Period Type: Annual Order: Latest on Right Currency: Reported Currency Conversion: Historical Units: S&P Capital IQ (Default) Decimals: Capital IQ (Default) Balance Sheet Balance Sheet as of: Restated Jan-29-2011 Jan-28-2012 Feb-02-2013 Feb-01-2014 Jan-31-2015 Aug-01-2015 Currency GBP GBP GBP GBP GBP GBP ASSETS Cash And Equivalents 90.1 67.0 53.5 76.8 121.3 160.3 Total Cash & ST Investments 90.1 67.0 53.5 76.8 121.3 160.3

Accounts Receivable 13.6 17.7 12.4 15.8 11.7 51.4 Other Receivables 2.0 3.8 6.4 5.8 4.5 - Total Receivables 15.6 21.5 18.8 21.6 16.2 51.4

Inventory 84.5 133.2 146.6 186.1 225.0 250.6 Prepaid Exp. 21.5 32.6 38.0 45.4 37.7 - Other Current Assets ------Total Current Assets 211.7 254.4 256.8 329.9 400.3 462.3

Gross Property, Plant & Equipment 168.3 220.4 245.1 278.4 291.1 - Accumulated Depreciation (90.2) (101.5) (116.0) (136.8) (143.2) - Net Property, Plant & Equipment 78.1 118.9 129.1 141.6 147.9 170.8

Long-term Investments 3.5 - - - - - Goodwill 32.5 54.0 54.2 53.2 56.4 - Other Intangibles 25.8 43.3 41.8 51.1 44.6 101.1 Deferred Tax Assets, LT 0.1 - - - - - Deferred Charges, LT 3.8 5.4 6.3 7.8 15.6 - Other Long-Term Assets 12.2 11.5 14.3 16.0 16.8 33.7 Total Assets 367.8 487.6 502.5 599.6 681.7 768.0

LIABILITIES Accounts Payable 56.3 93.3 97.1 128.5 124.6 322.2 Accrued Exp. 18.0 22.9 26.9 23.6 33.3 - Short-term Borrowings - - - 29.7 36.5 59.5 Curr. Port. of LT Debt 2.9 4.9 7.1 1.2 0.2 0.2 Curr. Port. of Cap. Leases - 0.6 0.0 0.0 0.0 - Curr. Income Taxes Payable 12.4 8.9 8.8 11.6 12.9 12.0 Other Current Liabilities 56.7 83.4 72.8 91.0 119.2 1.1 Total Current Liabilities 146.3 214.0 212.7 285.7 326.7 395.0

87 of 150 Long-Term Debt 1.1 1.1 0.7 0.5 0.3 0.3 Capital Leases - 0.1 0.0 0.0 0.0 - Def. Tax Liability, Non-Curr. - 0.7 3.9 4.3 1.8 2.0 Other Non-Current Liabilities 35.2 42.6 33.5 36.3 42.8 41.3 Total Liabilities 182.6 258.5 250.8 326.7 371.7 438.6

Common Stock 2.4 2.4 2.4 2.4 2.4 2.4 Additional Paid In Capital 11.7 11.7 11.7 11.7 11.7 11.7 Retained Earnings 171.9 207.5 230.6 257.7 297.2 318.9 Treasury Stock ------Comprehensive Inc. and Other (1.9) (6.3) (6.8) (12.1) (14.8) (16.9) Total Common Equity 184.1 215.3 237.8 259.8 296.5 316.1

Minority Interest 1.1 13.8 13.9 13.1 13.5 13.3

Total Equity 185.2 229.1 251.8 272.8 310.0 329.4

Total Liabilities And Equity 367.8 487.6 502.5 599.6 681.7 768.0

Supplemental Items Total Shares Out. on Filing Date 194.6 194.6 194.6 194.6 194.6 194.6 Total Shares Out. on Balance Sheet Date 194.6 194.6 194.6 194.6 194.6 194.6 Book Value/Share 0.95 1.11 1.22 1.33 1.52 1.62 Tangible Book Value 125.8 118.0 141.8 155.4 195.4 215.0 Tangible Book Value/Share 0.65 0.61 0.73 0.8 1.0 1.1 Total Debt 4.0 6.7 7.8 31.5 37.1 60.0 Net Debt (86.1) (60.3) (45.6) (45.3) (84.2) (100.3) Debt Equivalent Oper. Leases 658.8 758.6 961.3 926.6 1,005.8 NA Total Minority Interest 1.1 13.8 13.9 13.1 13.5 13.3 Equity Method Investments 3.5 NA NA NA NA NA Inventory Method Avg Cost Avg Cost Avg Cost Avg Cost Avg Cost NA Finished Goods Inventory 84.5 133.2 167.2 205.7 249.6 NA Land 0.9 3.9 5.6 12.1 12.7 NA Machinery 150.1 179.1 221.1 245.4 259.4 NA Construction in Progress - 18.8 - - - - Leasehold Improvements 17.2 18.6 18.4 20.9 19.1 - Full Time Employees 11,231 17,382 16,663 17,015 15,825 NA Accum. Allowance for Doubtful Accts 0.9 1.0 0.6 0.7 1.1 NA Filing Date May-18-2012 Apr-17-2013 May-24-2014 May-21-2015 May-21-2015 Oct-20-2015 Restatement Type NC RS NC NC O NCA Calculation Type REP REP REP REP REP REP

Note: For multiple class companies, total share counts are primary class equivalent, and for foreign companies listed as primary ADRs, total share counts are ADR-equivalent.

88 of 150 JD Sports Fashion plc (LSE:JD.) > Financials > Cash Flow

Cash Flow Restated LTM For the Fiscal Period Ending 12 months 12 months 12 months 12 months 12 months 12 months Jan-29-2011 Jan-28-2012 Feb-02-2013 Feb-01-2014 Jan-31-2015 Aug-01-2015 Currency GBP GBP GBP GBP GBP GBP

Net Income 55.9 46.8 38.8 40.2 52.7 74.4 Depreciation & Amort. 18.4 21.4 27.0 30.7 35.6 39.0 Amort. of Goodwill and Intangibles 1.5 2.5 2.8 2.6 6.9 6.9 Depreciation & Amort., Total 19.8 23.9 29.8 33.3 42.5 45.9

Other Amortization - 0.5 0.6 1.2 2.9 2.9 (Gain) Loss From Sale Of Assets 1.4 1.1 (0.5) 1.0 1.0 0.9 (Gain) Loss On Sale Of Invest. - (0.9) - - - - Asset Writedown & Restructuring Costs 1.0 12.3 4.5 17.0 6.0 6.2 (Income) Loss on Equity Invest. (2.8) (3.8) - - - - Net Cash From Discontinued Ops. - - - (2.4) 6.2 6.2 Other Operating Activities 0.5 (5.9) 3.3 2.4 5.3 21.2 Change in Acc. Receivable (5.2) (2.8) (12.4) (8.9) 7.8 20.8 Change In Inventories (9.6) (14.4) (23.6) (29.4) (54.7) (44.3) Change in Acc. Payable 14.7 12.0 (5.9) 23.3 46.1 53.2 Change in Other Net Operating Assets ------Cash from Ops. 75.7 68.9 34.7 77.8 115.8 187.3

Capital Expenditure (29.9) (43.8) (37.5) (37.4) (52.9) (73.0) Cash Acquisitions - (25.4) (4.8) (17.2) (9.1) (0.1) Divestitures - - 16.8 - - - Sale (Purchase) of Real Estate properties (0.9) - (0.7) (3.0) - - Sale (Purchase) of Intangible assets (9.6) (1.7) (5.5) (4.6) (7.2) (7.3) Invest. in Marketable & Equity Securt. ------Net (Inc.) Dec. in Loans Originated/Sold ------Other Investing Activities 0.0 5.8 (3.9) (2.1) 9.4 7.9 Cash from Investing (40.4) (65.2) (35.6) (64.3) (59.8) (72.6)

89 of 150 Short Term Debt Issued - - - 26.0 5.0 - Long-Term Debt Issued ------Total Debt Issued - - - 26.0 5.0 (23.1) Short Term Debt Repaid ------Long-Term Debt Repaid (0.3) (18.2) (0.8) (0.2) (0.3) - Total Debt Repaid (0.3) (18.2) (0.8) (0.2) (0.3) (0.3)

Common Dividends Paid (9.0) (11.3) (12.4) (12.9) (13.3) (13.3) Total Dividends Paid (9.0) (11.3) (12.4) (12.9) (13.3) (13.3)

Special Dividend Paid ------Other Financing Activities (0.5) (0.1) (0.4) 0 (0.1) (0.1) Cash from Financing (9.9) (29.7) (13.6) 12.9 (8.6) (36.7)

Foreign Exchange Rate Adj. - - (0.9) (0.6) (3.7) (12.1) Net Change in Cash 25.4 (25.9) (15.4) 25.8 43.7 65.9

Supplemental Items Cash Interest Paid 0.5 1.0 1.5 1.8 2.9 2.7 Cash Taxes Paid 22.0 25.1 12.2 14.8 20.8 21.8 Levered Free Cash Flow 28.5 25.2 5.9 42.8 57.1 97.3 Unlevered Free Cash Flow 28.8 25.9 6.8 43.6 58.6 98.8 Change in Net Working Capital 1.5 0.7 18.8 0.7 (9.5) (53.4) Net Debt Issued (0.3) (18.2) (0.8) 25.8 4.7 (23.4) Net Cash From Discontinued Ops. - Investing - - - - 18.15 18.15 Filing Date May-18-2012 Apr-17-2013 May-24-2014 May-21-2015 May-21-2015 Oct-20-2015 Restatement Type NC NC NC RS O NCA Calculation Type REP REP REP REP REP LTM

90 of 150 JD Sports Fashion plc (LSE:JD.) > Financials > Multiples

View: Data Frequency: Quarterly Order: Latest on Right Decimals: Capital IQ (Default) Dilution: Basic

Multiples Detail In Millions of the reported currency, except per share items.

For Quarter Ending Sep-30-2014 Dec-31-2014 Mar-31-2015 Jun-30-2015 Sep-30-2015 Dec-31-2015 Mar-24-2016 TEV/LTM Total Revenue Average 0.56x 0.60x 0.65x 0.74x 0.99x 1.10x 1.24x High 0.59x 0.67x 0.67x 0.86x 1.10x 1.20x 1.31x Low 0.52x 0.55x 0.62x 0.62x 0.86x 1.04x 1.13x Close 0.56x 0.67x 0.63x 0.86x 1.07x 1.17x 1.24x

TEV/NTM Total Revenues Average - - 0.63x 0.70x 0.91x 1.03x 1.14x High - - 0.66x 0.80x 1.02x 1.12x 1.21x Low - - 0.61x 0.60x 0.80x 0.99x 1.05x Close - - 0.61x 0.80x 1.02x 1.08x 1.15x

TEV/LTM EBITDA Average 6.60x 7.17x 7.67x 7.87x 10.26x 10.78x 12.17x High 6.96x 7.98x 8.00x 9.06x 11.52x 11.82x 12.88x Low 6.18x 6.50x 7.33x 6.63x 8.99x 10.25x 11.13x Close 6.70x 7.92x 7.48x 9.01x 10.46x 11.45x 12.17x

TEV/NTM EBITDA Average - - 6.93x 7.05x 8.94x 10.00x 10.67x High - - 7.19x 7.88x 9.93x 10.90x 11.28x Low - - 6.71x 6.26x 7.82x 9.62x 9.84x Close - - 6.74x 7.84x 9.92x 10.32x 10.83x

TEV/LTM EBIT Average 9.38x 10.06x 10.76x 11.21x 14.45x 14.79x 16.70x High 9.79x 11.19x 11.22x 12.83x 16.31x 16.22x 17.67x Low 8.80x 9.12x 10.29x 9.56x 12.73x 14.06x 15.27x Close 9.39x 11.10x 10.49x 12.76x 14.36x 15.71x 16.71x

P/LTM EPS Average 18.90x 18.71x 20.01x 18.16x 22.54x 22.63x 25.42x High 19.97x 20.83x 20.89x 20.74x 25.41x 24.72x 26.84x Low 17.31x 16.96x 19.14x 15.33x 20.06x 21.57x 23.33x Close 17.47x 20.66x 19.52x 20.10x 22.00x 23.98x 25.43x

P/NTM EPS Average - 13.48x 13.29x 14.79x 17.95x 19.65x 20.24x High - 14.45x 14.35x 16.59x 19.72x 21.47x 21.61x Low - 12.36x 12.52x 12.28x 16.30x 19.06x 18.55x Close - 14.33x 12.58x 16.51x 19.65x 19.93x 20.79x 91 of 150 P/LTM Normalized EPS Average 16.27x 16.94x 18.12x 19.73x 25.24x 25.71x 28.88x High 17.04x 18.85x 18.91x 22.56x 28.37x 28.08x 30.49x Low 15.38x 15.35x 17.32x 17.11x 22.40x 24.51x 26.51x Close 15.81x 18.71x 17.67x 22.45x 24.99x 27.24x 28.89x

P/BV Average 3.00x 3.42x 3.66x 4.07x 5.34x 6.05x 6.80x High 3.32x 3.81x 3.82x 4.66x 5.88x 6.61x 7.17x Low 2.79x 3.10x 3.50x 3.50x 4.63x 5.77x 6.24x Close 3.19x 3.78x 3.57x 4.64x 5.88x 6.41x 6.80x

P/Tangible BV Average 5.06x 6.04x 6.46x 6.29x 8.05x 8.90x 9.99x High 5.86x 6.72x 6.74x 7.08x 8.90x 9.72x 10.55x Low 4.66x 5.47x 6.18x 5.37x 7.03x 8.48x 9.17x Close 5.64x 6.67x 6.30x 7.04x 8.65x 9.43x 10.00x

TEV/LTM Unlevered FCF Average 18.99x 25.79x 27.58x 20.71x 24.04x 18.47x 20.86x High 25.03x 28.70x 28.78x 28.58x 28.47x 20.26x 22.07x Low 16.94x 23.38x 26.37x 16.70x 17.15x 17.57x 19.08x Close 24.08x 28.47x 26.91x 22.27x 17.93x 19.63x 20.87x

Market Cap/LTM Levered FCF Average 20.17x 26.76x 28.62x 22.42x 25.84x 19.65x 22.07x High 25.97x 29.78x 29.87x 29.66x 30.48x 21.46x 23.30x Low 18.14x 24.25x 27.36x 18.45x 18.30x 18.73x 20.26x Close 24.98x 29.55x 27.92x 24.12x 19.10x 20.82x 22.08x

Historical Equity Pricing Data supplied by

92 of 150 JD Sports Fashion plc (LSE:JD.) > Financials > Historical Capitalization

Historical Capitalization Balance Sheet as of: Feb-02-2013 Aug-03-2013 Feb-01-2014 Aug-02-2014 Jan-31-2015 Aug-01-2015 Pricing as of* Apr-17-2013 Sep-18-2013 May-27-2014 Sep-17-2014 May-21-2015 Sep-16-2015 Currency GBP GBP GBP GBP GBP GBP Capitalization Detail Share Price 1.86 2.54 4.1 4.25 6.32 9.23 Shares Out. 194.6 194.6 194.6 194.6 194.6 194.6

Market Capitalization 362.5 493.4 797.6 827.4 1,231.1 1,796.6 - Cash & Short Term Investments 53.5 46.6 76.8 93.7 121.3 160.3 + Total Debt 7.8 26.0 31.5 82.5 37.1 60.0 + Pref. Equity ------+ Total Minority Interest 13.9 13.6 13.1 14.1 13.5 13.3 = Total Enterprise Value (TEV) 330.8 486.4 765.4 830.4 1,160.4 1,709.6

Book Value of Common Equity 237.8 232.2 259.8 261.5 296.5 316.1 + Pref. Equity ------+ Total Minority Interest 13.9 13.6 13.1 14.1 13.5 13.3 + Total Debt 7.8 26.0 31.5 82.5 37.1 60.0 = Total Capital 259.6 271.7 304.4 358.2 347.1 389.4

Historical Equity Pricing Data supplied by

93 of 150 JD Sports Fashion plc (LSE:JD.) > Financials > Capital Structure Summary

Capital Structure Data For the Fiscal Period Ending 12 months Feb-01-2014 12 months Jan-31-2015 3 months Aug-01-2015 Currency GBP GBP GBP Units Millions % of Total Millions % of Total Millions % of Total

Total Debt 31.5 10.4% 37.1 10.7% 60.0 15.4% Total Common Equity 259.8 85.3% 296.5 85.4% 316.1 81.2% Total Minority Interest 13.1 4.3% 13.5 3.9% 13.3 3.4% Total Capital 304.4 100.0% 347.1 100.0% 389.4 100.0%

Debt Summary Data For the Fiscal Period Ending 12 months Feb-01-2014 12 months Jan-31-2015 3 months Aug-01-2015 Currency GBP GBP GBP Units Millions % of Total Millions % of Total Millions % of Total

Total Revolving Credit 30.8 97.6% 36.6 98.7% 59.6 99.4% Total Term Loans 0.7 2.2% 0.4 1.1% 0.4 0.7% Total Capital Leases 0.1 0.2% 0.1 0.2% 0.0 0.1% Total Principal Due 31.5 100.0% 37.1 100.0% 60.1 100.2%

Total Adjustments - - - - (0.1) (0.2%) Total Debt Outstanding 31.5 100.0% 37.1 100.0% 60.0 100.0%

Available Credit Undrawn Revolving Credit 140.4 - 140.0 - - - Total Undrawn Credit 140.4 - 140.0 - - -

94 of 150 Additional Totals Total Cash & ST Investments 76.8 - 121.3 - 160.3 - Net Debt (45.3) - (84.2) - (100.3) - Total Senior Debt 31.5 100.0% 37.1 100.0% 60.1 100.2% Total Short-Term Borrowings 29.7 94.2% 36.5 98.4% 59.5 99.2% Curr. Port. of LT Debt/Cap. Leases 1.3 4.1% 0.2 0.6% 0.2 0.3% Long-Term Debt (Incl. Cap. Leases) 0.6 1.7% 0.4 1.0% 0.3 0.5% Total Bank Debt 31.4 99.8% 37.0 99.8% 60.0 100.1% Total Secured Debt 4.5 14.1% 6.0 16.1% 6.0 10.0% Senior Secured Loans 4.4 13.9% 5.9 15.9% 5.9 9.9% Total Senior Secured Debt 4.5 14.1% 6.0 16.1% 6.0 10.0% Total Unsecured Debt 27.1 85.9% 31.1 83.9% 54.1 90.2% Fixed Rate Debt 0.4 1.3% 0.3 0.9% 0.3 0.5% Variable Rate Debt 29.7 94.2% 36.5 98.4% 59.5 99.2%

Credit Ratios Net Debt/EBITDA NM - NM - NM - Total Debt/EBITDA 0.3x - 0.3x - 0.4x - Total Senior Debt/EBITDA 0.3x - 0.3x - 0.4x - Total Senior Secured/EBITDA 0.0x - 0.0x - 0.0x - Net Debt/(EBITDA-CAPEX) NM - NM - NM - Total Debt/(EBITDA-CAPEX) 0.4x - 0.4x - 1.2x - Total Senior Debt/(EBITDA-CAPEX) 0.4x - 0.4x - 1.2x - Total Senior Secured/(EBITDA-CAPEX) 0.1x - 0.1x - 0.1x -

Fixed Payment Schedule LT Debt (Incl. Cap. Leases) Due +1 5.0 15.8% 5.7 15.4% - - LT Debt (Incl. Cap. Leases) Due +2 0.1 0.4% 0.1 0.3% - - LT Debt (Incl. Cap. Leases) Due +3 0.1 0.4% 0.1 0.3% - - LT Debt (Incl. Cap. Leases) Due +4 0.1 0.4% 0.1 0.3% - - LT Debt (Incl. Cap. Leases) Due +5 0.1 0.4% 0.1 0.3% - - LT Debt (Incl. Cap. Leases) Due, Next 5 Yrs 5.5 17.5% 6.1 16.4% - -

Cap. Lease Payment Due +1 0.0 - 0.0 - - - Cap. Lease Payment Due +2 0.0 - 0.0 - - - Cap. Lease Payment Due +3 0.0 - 0.0 - - - Cap. Lease Payment Due +4 0.0 - 0.0 - - - Cap. Lease Payment Due +5 0.0 - 0.0 - - - Cap. Lease Payment Due, Next 5 Yrs 0.1 - 0.1 - - - Cap. Lease Payment Due, After 5 Yrs - - - - 0.0 - Cap. Lease Payment Due (incl. Interest) +1 - - 0.0 - - -

95 of 150 Operating Lease Commitment Due +1 104.0 - 88.3 - - - Operating Lease Commitment Due +2 76.1 - 65.5 - - - Operating Lease Commitment Due +3 76.1 - 65.5 - - - Operating Lease Commitment Due +4 76.1 - 65.5 - - - Operating Lease Commitment Due +5 76.1 - 65.5 - - - Operating Lease Commitment Due, Next 5 Yrs 408.5 - 350.1 - - - Operating Lease Commitment Due, After 5 Yrs 244.1 - 202.7 - - -

Sub-Lease Income +1 0.7 - 0.5 - - - Sub-Lease Income +2 0.5 - 0.4 - - - Sub-Lease Income +3 0.5 - 0.4 - - - Sub-Lease Income +4 0.5 - 0.4 - - - Sub-Lease Income +5 0.5 - 0.4 - - - Sub-Lease Income, Next 5 Yrs 2.8 - 1.9 - - - Sub-Lease Income, After 5 Yrs 1.6 - 1.0 - - -

Interest Rate Data Filing Date May-21-2015 - May-21-2015 - Oct-20-2015 -

96 of 150 JD Sports Fashion plc (LSE:JD.) > Financials > Capital Structure Details

Principal Due in Millions of the reported currency. Period Type: Annual Source: A 2015 filed May-21-2015 Currency: Reported Currency Conversion: Historical Units: S&P Capital IQ (Default) Decimals: Capital IQ (Default)

FY 2015 (Jan-31-2015) Capital Structure As Reported Details Coupon/Base Repayment Description Type Principal Due (GBP) Rate Floating Rate Maturity Seniority Secured Convertible Currency Bank Loans Term Loans 0.1 5.100% - 6.500% NA - Senior Yes No GBP

Finance Lease Liabilities Capital Lease 0.1 NA NA - Senior Yes No GBP Other Loans: Mortgage Term Loans 0.3 2.990% NA - Senior Yes No GBP Overdraft Revolving Credit 0.1 NA NA - Senior No No GBP Overdraft Facilities Revolving Credit 5.5 5.100% - 6.500% NA - Senior Yes No GBP

Syndicated Bank Facility Revolving Credit 31.0 NA LIBOR + 1.350% - Senior No No GBP

FY 2014 (Feb-01-2014) Capital Structure As Reported Details Coupon/Base Repayment Description Type Principal Due (GBP) Rate Floating Rate Maturity Seniority Secured Convertible Currency Bank Loans Term Loans 0.3 5.100% - 6.500% NA - Senior Yes No GBP

Finance Lease Liabilities Capital Lease 0.1 NA NA - Senior Yes No GBP Other Loans: Mortgage Term Loans 0.4 2.990% NA - Senior Yes No GBP Overdraft Revolving Credit 1.1 NA NA - Senior No No GBP Overdraft Facilities Revolving Credit 3.7 5.100% - 6.500% NA - Senior Yes No GBP

Syndicated Bank Facility Revolving Credit 26.0 NA LIBOR + 1.350% - Senior No No GBP

97 of 150 JD Sports Fashion plc (LSE:JD.) > Financials > Ratios

Restatement: Latest Filings Period Type: Annual Order: Latest on Right Decimals: Capital IQ (Default)

Ratios LTM For the Fiscal Period Ending 12 months 12 months 12 months 12 months 12 months 12 months Jan-29-2011 Jan-28-2012 Feb-02-2013 Feb-01-2014 Jan-31-2015 Aug-01-2015 Profitability Return on Assets % 14.8% 11.2% 7.7% 9.4% 10.0% 10.6% Return on Capital % 29.9% 22.5% 15.5% 18.4% 19.6% 20.6% Return on Equity % 34.3% 23.8% 17.2% 22.1% 23.9% 28.4% Return on Common Equity % 34.6% 23.5% 17.1% 22.8% 24.6% 29.3%

Margin Analysis Gross Margin % 49.5% 49.2% 48.7% 48.7% 48.6% 48.3% SG&A Margin % 40.7% 42.2% 44.1% 42.0% 41.9% 40.9% EBITDA Margin % 11.3% 9.5% 7.2% 9.6% 9.5% 10.2% EBITA Margin % 9.2% 7.4% 5.1% 7.0% 7.2% 7.8% EBIT Margin % 9.0% 7.2% 4.9% 6.8% 6.7% 7.4% Earnings from Cont. Ops Margin % 6.3% 4.7% 3.3% 4.8% 4.6% 5.2% Net Income Margin % 6.3% 4.4% 3.1% 3.3% 3.5% 4.5% Net Income Avail. for Common Margin % 6.3% 4.4% 3.1% 4.7% 4.5% 5.1% Normalized Net Income Margin % 5.9% 4.3% 2.8% 4.1% 4.0% 4.5% Levered Free Cash Flow Margin % 3.2% 2.4% 0.5% 3.5% 3.7% 5.9% Unlevered Free Cash Flow Margin % 3.3% 2.4% 0.5% 3.6% 3.8% 5.9%

Asset Turnover Total Asset Turnover 2.6x 2.5x 2.5x 2.2x 2.4x 2.3x Fixed Asset Turnover 12.1x 10.8x 10.2x 9.0x 10.5x 10.4x Accounts Receivable Turnover 73.1x 67.6x 83.6x 86.2x 110.4x 25.3x Inventory Turnover 5.6x 4.9x 4.6x 3.8x 3.8x 3.6x

Short Term Liquidity Current Ratio 1.4x 1.2x 1.2x 1.2x 1.2x 1.2x Quick Ratio 0.7x 0.4x 0.3x 0.3x 0.4x 0.5x Cash from Ops. to Curr. Liab. 0.5x 0.3x 0.2x 0.3x 0.4x 0.5x Avg. Days Sales Out. 5.0 5.4 4.4 4.2 3.3 14.4 Avg. Days Inventory Out. 64.8 73.6 80.4 97.0 95.6 100.7 Avg. Days Payable Out. 43.3 46.4 53.6 61.9 56.1 123.2 Avg. Cash Conversion Cycle 26.5 32.6 31.2 39.4 42.8 (8.1) 98 of 150 Long Term Solvency Total Debt/Equity 2.2% 2.9% 3.1% 11.6% 12.0% 18.2% Total Debt/Capital 2.1% 2.9% 3.0% 10.4% 10.7% 15.4% LT Debt/Equity 0.6% 0.5% 0.3% 0.2% 0.1% 0.1% LT Debt/Capital 0.6% 0.5% 0.3% 0.2% 0.1% 0.1% Total Liabilities/Total Assets 49.7% 53.0% 49.9% 54.5% 54.5% 57.1%

EBIT / Interest Exp. 175.7x 73.0x 40.8x 51.3x 36.4x 45.9x EBITDA / Interest Exp. 219.3x 95.7x 60.6x 71.9x 51.6x 63.0x (EBITDA-CAPEX) / Interest Exp. 153.5x 53.9x 35.7x 48.8x 32.7x 35.9x Total Debt/EBITDA 0.0x 0.1x 0.1x 0.3x 0.3x 0.4x Net Debt/EBITDA NM NM NM NM NM NM Total Debt/(EBITDA-CAPEX) 0.1x 0.1x 0.1x 0.4x 0.4x 0.6x Net Debt/(EBITDA-CAPEX) NM NM NM NM NM NM

Altman Z Score 5.21 4.34 4.51 4.09 4.8 4.76

Growth Over Prior Year Total Revenue 14.8% 19.9% 18.8% (3.4%) 25.1% 26.0% Gross Profit 15.1% 19.2% 17.8% (3.5%) 24.9% 26.1% EBITDA 17.7% 0.6% (9.2%) 27.7% 24.5% 25.4% EBITA 19.6% (3.0%) (18.7%) 33.5% 27.6% 28.2% EBIT 18.8% (4.3%) (19.8%) 35.4% 23.2% 24.5% Earnings from Cont. Ops. 30.7% (11.7%) (16.4%) 40.5% 20.4% 19.7% Net Income 30.3% (16.2%) (17.2%) 3.5% 31.2% 55.5% Normalized Net Income 24.5% (11.8%) (22.7%) 41.3% 22.8% 25.8% Diluted EPS before Extra 30.3% (16.2%) (17.2%) 45.9% 20.9% 20.9%

Accounts Receivable 29.3% 30.1% (30.1%) 28.0% (26.1%) (35.9%) Inventory 13.4% 57.7% 10.0% 27.0% 20.9% 11.5% Net PP&E 15.8% 52.2% 8.6% 9.7% 4.5% 15.6% Total Assets 20.1% 32.6% 3.1% 19.3% 13.7% 12.3%

Tangible Book Value 41.4% (6.2%) 20.2% 9.6% 25.7% 45.2% Common Equity 32.3% 16.9% 10.5% 9.2% 14.1% 20.9% Cash from Ops. 0.1% (9.0%) (49.6%) 123.9% 48.8% 139.1% Capital Expenditures 39.3% 46.6% (14.5%) (0.3%) 41.6% 79.6% Levered Free Cash Flow (31.4%) (11.6%) (76.5%) 620.5% 33.4% 144.9% Unlevered Free Cash Flow (31.6%) (10.2%) (73.8%) 543.5% 34.4% 141.2% Dividend per Share 27.8% 10.1% 3.9% 3.0% 4.1% 4.2%

99 of 150 Compound Annual Growth Rate Over Two Years Total Revenue 14.8% 17.3% 19.4% 7.1% 10.0% 14.4% Gross Profit 15.0% 17.1% 18.5% 6.6% 9.8% 13.6% EBITDA 20.7% 8.8% (4.4%) 7.7% 26.1% 30.4% EBITA 21.8% 7.7% (11.2%) 4.2% 30.5% 35.2% EBIT 21.1% 6.6% (12.4%) 4.2% 29.2% 34.2% Earnings from Cont. Ops. 51.0% 7.4% (14.1%) 8.3% 30.1% 40.3% Net Income 51.4% 4.5% (16.7%) (7.4%) 16.5% 32.4% Normalized Net Income 23.6% 4.8% (17.4%) 4.5% 31.7% 34.6% Diluted EPS before Extra 50.8% 4.5% (16.7%) 9.9% 32.9% 41.2%

Accounts Receivable 133.3% 29.7% (4.7%) (5.5%) (2.7%) (19.1%) Inventory 20.4% 33.8% 31.7% 18.2% 23.9% 24.2% Net PP&E 11.6% 32.8% 28.6% 9.1% 7.0% 12.6% Total Assets 29.1% 26.2% 16.9% 10.9% 16.5% 19.0%

Tangible Book Value 45.3% 15.1% 6.2% 14.8% 17.4% 26.3% Common Equity 34.0% 24.4% 13.7% 9.9% 11.7% 16.7% Cash from Ops. 18.1% (4.5%) (32.3%) 6.2% 82.6% 63.7% Capital Expenditures 3.3% 42.9% 12.0% (7.7%) 18.8% 31.5% Levered Free Cash Flow 44.7% (22.1%) (54.4%) 30.2% 210.0% 52.8% Unlevered Free Cash Flow 41.6% (21.6%) (51.5%) 29.8% 194.1% 52.4% Dividend per Share 38.4% 18.6% 7.0% 3.5% 3.5% 3.6%

Compound Annual Growth Rate Over Three Years Total Revenue 14.3% 16.5% 17.8% 11.2% 12.8% 12.2% Gross Profit 14.5% 16.4% 17.4% 10.7% 12.4% 11.5% EBITDA 21.3% 13.6% 2.4% 5.3% 13.0% 23.0% EBITA 22.7% 12.9% (2.0%) 1.7% 11.4% 25.6% EBIT 22.0% 12.0% (3.0%) 1.3% 10.2% 24.9% Earnings from Cont. Ops. 33.3% 26.3% (1.2%) 1.2% 12.2% 32.5% Net Income 33.4% 24.3% (3.3%) (10.4%) 4.0% 29.4% Normalized Net Income 24.1% 10.4% (5.3%) (1.2%) 10.3% 26.6% Diluted EPS before Extra 33.0% 24.0% (3.3%) 0.4% 13.5% 35.0%

Accounts Receivable 85.1% 92.1% 5.5% 5.2% (12.9%) (0.0%) Inventory 13.3% 31.7% 25.3% 30.1% 19.1% 17.5% Net PP&E 14.0% 23.8% 24.2% 21.9% 7.6% 11.8% Total Assets 24.0% 30.3% 18.0% 17.7% 11.8% 13.6%

100 of 150 Tangible Book Value 50.1% 25.6% 16.8% 7.3% 18.3% 27.5% Common Equity 31.1% 28.1% 19.6% 12.2% 11.3% 15.7% Cash from Ops. 10.3% 8.3% (22.8%) 0.9% 18.9% 48.9% Capital Expenditures 15.5% 16.1% 20.4% 7.7% 6.5% 29.4% Levered Free Cash Flow (5.9%) 22.8% (47.7%) 14.4% 31.3% 90.1% Unlevered Free Cash Flow (6.1%) 21.6% (45.6%) 14.8% 31.3% 87.5% Dividend per Share 39.2% 28.3% 13.5% 5.6% 3.7% 3.6%

Compound Annual Growth Rate Over Five Years Total Revenue 12.5% 14.8% 16.3% 12.6% 14.6% 14.9% Gross Profit 14.0% 15.6% 16.1% 12.4% 14.3% 14.4% EBITDA 26.9% 21.0% 10.3% 11.2% 11.3% 13.3% EBITA 32.2% 23.6% 7.8% 9.3% 9.9% 12.5% EBIT 31.8% 22.9% 6.9% 8.8% 8.7% 11.5% Earnings from Cont. Ops. 88.5% 36.6% 11.8% 18.8% 10.3% 12.5% Net Income 88.5% 35.2% 10.5% 10.5% 4.2% 9.3% Normalized Net Income 37.9% 23.9% 5.5% 8.0% 8.0% 10.4% Diluted EPS before Extra 87.8% 34.9% 10.3% 18.2% 9.8% 12.1%

Accounts Receivable 134.1% 106.1% 41.9% 44.6% 2.2% 5.3% Inventory 8.5% 21.0% 20.4% 26.1% 24.8% 22.7% Net PP&E 9.8% 23.2% 19.6% 17.7% 17.0% 18.7% Total Assets 19.4% 28.2% 21.1% 22.1% 17.4% 19.9%

Tangible Book Value 29.8% 23.5% 30.7% 21.1% 17.0% 18.7% Common Equity 27.5% 28.4% 23.8% 20.4% 16.3% 17.3% Cash from Ops. 14.2% 12.9% (9.3%) 7.5% 8.9% 24.0% Capital Expenditures 35.4% 26.3% 14.1% 5.9% 19.8% 22.2% Levered Free Cash Flow 5.2% 0.2% (29.6%) 25.7% 6.5% 32.3% Unlevered Free Cash Flow 3.4% (0.5%) (27.9%) 24.8% 6.8% 32.2% Dividend per Share 27.2% 28.6% 25.3% 17.7% 9.4% 9.0%

101 of 150 JD Sports Fashion plc (LSE:JD.) > Financials > Industry Specific

Industry Specific For the Fiscal Period Ending 12 months 12 months 12 months 12 months 12 months 12 months Jan-30-2010 Jan-29-2011 Jan-28-2012 Feb-02-2013 Feb-01-2014 Jan-31-2015 Currency GBP GBP GBP GBP GBP GBP Retail Specific Data Stores Opened - - - - - 64 Stores Acquired 78 - 374 - 50 17 Stores Closed - - - - - 39 Total Stores 523 538 919 822 796 844

Total Same Store Sales Growth - 5.6% 0.3% - - 12.0%

Gross Margin 49.3% 49.5% 49.2% 48.7% 48.7% 48.6% Operating Margin 8.7% 9.0% - - - -

Retail Revenues 730.1 801.3 932.5 1,063.2 1,216.4 1,522.3 Wholesale Revenues 42.6 85.5 135.1 - - - Online Revenues - - - 88.7 - -

Total Retail Sq. Ft. (Net) 1,439,000 1,501,000 3,058,000 2,894,000 2,897,000 3,119,000

Owned / Operated Store Data Owned/Operated Stores Opened - - - - - 64 Owned/Operated Stores Acquired 78 - 374 - 50 17 Owned/Operated Stores Closed - - - - - 39 Total Owned/Operated Stores 523 538 919 822 796 844

Owned/Operated Same Store Sales Growth - 5.6% 0.3% - - 12.0%

Filing Date Apr-13-2011 May-18-2012 Apr-17-2013 May-24-2014 May-21-2015 May-21-2015

102 of 150 JD Sports Fashion plc (LSE:JD.) > Financials > Segments

Business Segments Reclassified For the Fiscal Period Ending 12 months 12 months 12 months 12 months 12 months 12 months Jan-30-2010 Jan-29-2011 Jan-28-2012 Feb-02-2013 Feb-01-2014 Jan-31-2015 Currency GBP GBP GBP GBP GBP GBP Revenues Sports Fashion - - - - 1,104.7 1,352.4 Outdoor - - 5.9 121.0 111.7 169.9 Corporate (2.9) (3.2) (8.1) (2.8) - (0.1) Sport - - - 977.1 - - Fashion - - - 163.6 - - Sport Retail 615.5 667.2 775.0 - - - Fashion Retail 114.6 134.1 151.6 - - - Distribution 42.6 85.5 135.1 - - - Total Revenues 769.8 883.7 1,059.5 1,258.9 1,216.4 1,522.3

Operating Profit Before Tax Sports Fashion - - - - 91.0 107.0 Outdoor - - (2.2) (14.9) (8.0) (4.9) Sport - - - 77.9 - - Fashion - - - (1.7) - - Sport Retail 64.1 73.3 74.3 - - - Fashion Retail 3.3 6.4 3.3 - - - Distribution (0.2) 0.2 1.1 - - - Total Operating Profit Before Tax 67.3 79.9 76.5 61.3 83.0 102.2

Assets Sports Fashion - - - - 589.6 672.3 Outdoor - - 38.7 50.1 91.9 102.5 Corporate (49.9) (49.5) (88.0) (72.5) (82.0) (93.2) Sport - - - 451.7 - - Fashion - - - 73.2 - - Sport Retail 264.4 310.2 407.8 - - - Fashion Retail 51.2 56.2 60.6 - - - Distribution 40.6 50.8 68.5 - - - Total Assets 306.2 367.8 487.6 502.5 599.6 681.7

103 of 150 Depreciation & Amortization Sports Fashion - - - - 31.2 41.9 Outdoor - - - 1.2 3.2 3.3 Sport - - - 25.1 - - Fashion - - - 4.0 - - Sport Retail 14.1 15.7 19.0 - - - Fashion Retail 3.3 3.5 3.6 - - - Distribution 0.5 1.2 1.7 - - - Total Depreciation & Amortization 17.9 20.4 24.4 30.3 34.4 45.2

Capital Expenditure Sports Fashion - - - - (41.1) (56.7) Outdoor - - - (3.4) (3.9) (3.4) Sport - - - (37.2) - - Fashion - - - (3.0) - - Sport Retail (16.1) (32.8) (39.2) - - - Fashion Retail (3.3) (6.7) (4.1) - - - Distribution (9.2) (1.0) (2.3) - - - Total Capital Expenditure (28.6) (40.4) (45.6) (43.7) (45.0) (60.1)

Filing Date Apr-13-2011 May-18-2012 Apr-17-2013 May-24-2014 May-21-2015 May-21-2015

Geographic Segments Reclassified For the Fiscal Period Ending 12 months 12 months 12 months 12 months 12 months 12 months Jan-30-2010 Jan-29-2011 Jan-28-2012 Feb-02-2013 Feb-01-2014 Jan-31-2015 Currency GBP GBP GBP GBP GBP GBP Revenues United Kingdom 722.2 801.7 863.8 1,029.8 972.8 1,185.0 Europe 45.1 55.0 157.7 197.6 229.7 317.5 Rest of World 2.5 26.9 38.1 31.5 13.9 19.8 Total Revenues 769.8 883.7 1,059.5 1,258.9 1,216.4 1,522.3

Assets United Kingdom 120.4 135.9 174.0 190.6 205.6 206.7 Europe 13.3 16.4 58.6 55.0 64.0 74.5 Rest of World 0.3 0.3 0.6 0.1 0.1 0.2 Total Assets 134.0 152.5 233.2 245.7 269.7 281.4

Filing Date Apr-13-2011 May-18-2012 Apr-17-2013 May-24-2014 May-21-2015 May-21-2015

104 of 150

JD Sports Capital IQ spreadsheets: Comparable Company Information

Data Provided by Historical Equity Pricing Data supplied by

105 of 150 JD Sports Fashion plc (LSE:JD.) > Quick Comparable Analysis > Financial Data

Details Template: Capital IQ Default Comps Currency: US Dollar As-Of Date: Mar-28-2016

Company Comp Set Company Name Day Close Price Shares Market LTM Net Debt LTM Total Pref. LTM Minority Total Enterprise LTM Tangible LTM Filing Date, LTM Total LTM LTM EBIT LTM Diluted EPS NTM Revenue NTM EBITDA NTM EPS Latest Outstanding Capitalization Equity Interest Value Latest Book Value/Share Income Statement Revenue EBITDA Excl. Extra Items (Capital IQ) (Capital IQ) (Capital IQ) Latest Latest Debenhams plc (LSE:DEB) 1.02 1,227.4 1,253.6 452.7 - - 1,706.3 ( 0.09) Oct-28-2015 3,281 314.5 189.6 0.11 4,068.09 348.89 0.11 WH Smith PLC (LSE:SMWH) 25.43 112.8 2,869.3 (21.2) - - 2,848.1 1.09 Oct-30-2015 1,664 214.7 172.3 1.21 1,697.43 242.49 1.34 Sports Direct International plc (LSE:SPD) 4.92 596.4 2,932.0 28.7 - ( 1.66) 2,959.1 2.56 Dec-10-2015 4,002 539.7 422.0 0.61 4,114.58 547.11 0.52 Alpen Co., Ltd. (TSE:3028) 16.6 40.5 672.1 31.1 - - 703.2 23.19 Feb-12-2016 1,979 94.6 28.0 0.38 2,077.35 140.11 0.88 Xebio Holdings Co., Ltd. (TSE:8281) 15.98 45.2 722.2 (157.3) - 0.08 565.0 21.5 Feb-12-2016 1,945 108.4 49.9 0.47 2,029.64 135.69 0.95 Marks & Spencer Group plc (LSE:MKS) 5.54 1,618.7 8,974.9 2,588.2 - ( 3.96) 11,559.1 1.88 Nov-04-2015 14,633 1,625.4 1,112.7 0.37 14,860.61 1,910.71 0.5 Burberry Group plc (LSE:BRBY) 18.65 439.4 8,193.4 (648.1) - 71.62 7,616.9 3.81 Nov-12-2015 3,571 797.6 621.3 1.11 3,655.36 791.65 1.02 Hibbett Sports, Inc. (NasdaqGS:HIBB) 35.29 22.8 804.1 (31.8) - - 772.3 13.64 Mar-11-2016 943 128.9 112.0 2.92 993.78 129.18 2.99 Next Plc (LSE:NXT) 79.88 145.7 11,635.9 1,278.4 - - 12,914.3 2.56 Mar-24-2016 5,900 1,398.2 1,231.5 6.26 6,065.46 1,411.45 6.35 Sportsman's Warehouse Holdings, Inc. 12.23 42.0 513.7 187.0 - - 700.8 ( 0.14) Mar-24-2016 730 67.6 56.0 0.66 813.6 79.43 0.71 (NasdaqGS:SPWH)

JD Sports Fashion plc (LSE:JD.) 15.6 194.6 3,035.6 (141.7) - 18.79 2,912.6 1.56 Oct-20-2015 2,348 239.2 174.4 0.61 2,545.05 269.41 0.75

Summary Statistics Day Close Price Shares Market LTM Net Debt LTM Total Pref. LTM Minority Total Enterprise LTM Tangible LTM Filing Date, LTM Total LTM LTM EBIT LTM Diluted EPS NTM Revenue NTM EBITDA NTM EPS Latest Outstanding Capitalization Equity Interest Value Latest Book Value/Share Income Statement Revenue EBITDA Excl. Extra Items (Capital IQ) (Capital IQ) (Capital IQ) Latest Latest High 79.88 1,618.7 11,635.9 2,588.2 - 71.62 12,914.3 23.19 - 14,633 1,625.4 1,231.5 6.26 14,860.61 1,910.71 6.35 Low 1.02 22.8 513.7 (648.1) - ( 3.96) 565.0 ( 0.14) - 730 67.6 28.0 0.11 813.6 79.43 0.11 Mean 21.55 429.1 3,857.1 370.8 - 16.52 4,234.5 7.0 - 3,865 528.9 399.5 1.41 4,037.59 573.67 1.54 Median 16.29 129.3 2,061.5 29.9 - ( 0.79) 2,277.2 2.56 - 2,630 264.6 181.0 0.64 2,866.35 295.69 0.92

Displaying 11 Companies.

All values in millions, except per share data and ratios. Values converted at today's spot rate. Companies by default are sorted by S&P Capital IQ’s proprietary relevancy score.

Historical Equity Pricing Data supplied by

106 of 150 JD Sports Fashion plc (LSE:JD.) > Quick Comparable Analysis > Trading Multiples

Details Template: Capital IQ Default Comps Currency: US Dollar As-Of Date: Mar-28-2016

Company Comp Set Company Name TEV/Total Revenues LTM TEV/EBITDA TEV/EBIT LTM - P/Diluted EPS Before P/TangBV LTM - NTM TEV/Forward Total NTM TEV/Forward NTM Forward P/E - Latest LTM - Latest Latest Extra LTM - Latest Latest Revenue (Capital IQ) EBITDA (Capital IQ) (Capital IQ)

Debenhams plc (LSE:DEB) 0.5x 5.4x 9.0x 9.5x NM 0.42x 4.90x 9.41x WH Smith PLC (LSE:SMWH) 1.7x 13.3x 16.5x 21.0x 23.4x 1.68x 11.77x 19.06x Sports Direct International plc (LSE:SPD) 0.7x 5.4x 6.9x 8.0x 1.9x 0.72x 5.42x 9.51x Alpen Co., Ltd. (TSE:3028) 0.4x 7.4x 25.1x 43.7x 0.7x 0.34x 5.02x 18.77x Xebio Holdings Co., Ltd. (TSE:8281) 0.3x 5.2x 11.3x 34.2x 0.7x 0.28x 4.16x 16.88x Marks & Spencer Group plc (LSE:MKS) 0.8x 7.1x 10.4x 15.0x 2.9x 0.78x 6.06x 11.19x Burberry Group plc (LSE:BRBY) 2.1x 9.6x 12.3x 16.8x 4.9x 2.09x 9.64x 18.34x Hibbett Sports, Inc. (NasdaqGS:HIBB) 0.8x 6.0x 6.9x 12.1x 2.6x 0.78x 5.98x 11.80x Next Plc (LSE:NXT) 2.2x 9.2x 10.5x 12.8x 31.2x 2.13x 9.17x 12.62x Sportsman's Warehouse Holdings, Inc. 1.0x 10.4x 12.5x 18.5x NM 0.86x 8.82x 17.14x (NasdaqGS:SPWH)

JD Sports Fashion plc (LSE:JD.) 1.2x 12.2x 16.7x 25.4x 10.0x 1.15x 10.83x 20.79x

Summary Statistics TEV/Total Revenues LTM TEV/EBITDA TEV/EBIT LTM - P/Diluted EPS Before P/TangBV LTM - NTM TEV/Forward Total NTM TEV/Forward NTM Forward P/E - Latest LTM - Latest Latest Extra LTM - Latest Latest Revenue (Capital IQ) EBITDA (Capital IQ) (Capital IQ)

High 2.2x 13.3x 25.1x 43.7x 31.2x 2.13x 11.77x 19.06x Low 0.3x 5.2x 6.9x 8.0x 0.7x 0.28x 4.16x 9.41x Mean 1.1x 7.9x 12.1x 19.2x 8.5x 1.01x 7.10x 14.47x Median 0.8x 7.3x 10.9x 15.9x 2.8x 0.78x 6.02x 14.75x

Displaying 11 Companies.

All values in millions, except per share data and ratios. Values converted at today's spot rate. Companies by default are sorted by S&P Capital IQ’s proprietary relevancy score.

Historical Equity Pricing Data supplied by

107 of 150 JD Sports Fashion plc (LSE:JD.) > Quick Comparable Analysis > Operating Statistics

Details Template: Capital IQ Default Comps Currency: US Dollar As-Of Date: Mar-28-2016

Company Comp Set Company Name LTM Gross LTM EBITDA LTM EBIT LTM Net Income LTM Total LTM EBITDA, 1 Yr LTM EBIT, 1 Yr LTM Net Income, 1 Yr LTM Total LTM Total NTM LT EPS 5 Year Beta Margin % Margin % Margin % Margin % Revenues, 1 Yr Growth % Growth % Growth % Debt/Capital % Debt/EBITDA Growth Rate Growth % (Capital IQ) Debenhams plc (LSE:DEB) 13% 10% 5.8% 4.03% 0.43% 2.96% 4.84% 7.22% 29.27% 1.6x - 0.79 WH Smith PLC (LSE:SMWH) 58% 13% 10.4% 8.57% 1.46% 7.80% 8.93% 9.78% 11.45% 0.1x - 0.56 Sports Direct International plc (LSE:SPD) 44% 13% 10.5% 9.57% 1.42% 15.49% 13.91% 44.78% 12.46% 0.5x - 0.79 Alpen Co., Ltd. (TSE:3028) 42% 5% 1.4% 0.78% 4.15% (12.23%) (39.55%) (60.35%) 17.81% 2.2x - 0.3 Xebio Holdings Co., Ltd. (TSE:8281) 39% 6% 2.6% 1.09% 3.44% (12.84%) (23.65%) (45.30%) 3.16% 0.3x - 0.39 Marks & Spencer Group plc (LSE:MKS) 38% 11% 7.6% 4.16% 0.25% (0.36%) 8.59% (14.42%) 40.61% 1.8x - 0.63 Burberry Group plc (LSE:BRBY) 70% 22% 17.4% 13.90% 5.40% 3.79% 3.73% 11.77% 4.14% 0.1x - 0.82 Hibbett Sports, Inc. (NasdaqGS:HIBB) 35% 14% 11.9% 7.48% 3.24% (3.92%) (5.20%) (4.15%) 0.15% 0.0x - 1.09 Next Plc (LSE:NXT) 35% 24% 20.9% 15.96% 4.43% 8.21% 8.66% 5.02% 75.70% 1.0x - 0.31 Sportsman's Warehouse Holdings, Inc. 33% 9% 7.7% 3.80% 10.59% 12.23% 9.68% 101.47% 101.10% 2.8x - - (NasdaqGS:SPWH)

JD Sports Fashion plc (LSE:JD.) 48% 10% 7.4% 4.47% 25.97% 25.44% 24.53% 55.53% 15.40% 0.4x - 0.57

Summary Statistics LTM Gross LTM EBITDA LTM EBIT LTM Net Income LTM Total LTM EBITDA, 1 Yr LTM EBIT, 1 Yr LTM Net Income, 1 Yr LTM Total LTM Total NTM LT EPS 5 Year Beta Margin % Margin % Margin % Margin % Revenues, 1 Yr Growth % Growth % Growth % Debt/Capital % Debt/EBITDA Growth Rate Growth % (Capital IQ) High 70% 24% 20.9% 15.96% 10.59% 15.49% 13.91% 101.47% 101.10% 2.8x - 1.09 Low 13% 5% 1.4% 0.78% 0.25% (12.84%) (39.55%) (60.35%) 0.15% 0.0x - 0.3 Mean 41% 13% 9.6% 6.93% 3.48% 2.11% (1.01%) 5.58% 29.59% 1.0x - 0.63 Median 38% 12% 9.0% 5.82% 3.34% 3.37% 6.72% 6.12% 15.13% 0.7x - 0.63

Displaying 11 Companies.

All values in millions, except per share data and ratios. Values converted at today's spot rate. Companies by default are sorted by S&P Capital IQ’s proprietary relevancy score.

Historical Equity Pricing Data supplied by

108 of 150 JD Sports Fashion plc (LSE:JD.) > Quick Comparable Analysis > Implied Valuation

Details Template: Capital IQ Default Comps Currency: US Dollar As-Of Date: Mar-28-2016

Company Comp Set Company Name LTM Total Revenue LTM EBITDA LTM EBIT NTM Revenue (Capital IQ) NTM EBITDA (Capital IQ) LTM Basic EPS NTM EPS (Capital IQ) LTM Tangible Book Value/Share JD Sports Fashion plc (LSE:JD.) 2,348 239.2 174.4 2,545.05 269.41 0.54 0.75 1.56

Total Enterprise Value Multiples Pricing Multiples

LTM TEV/Total LTM TEV/EBITDA LTM TEV/EBIT NTM TEV/Forward Total Revenue NTM TEV/Forward EBITDA LTM P/Diluted EPS Before NTM Forward P/E LTM P/TangBV Revenues Extra High 2.2x 13.3x 25.1x 2.13x 11.77x 43.7x 19.06x 31.2x Low 0.3x 5.2x 6.9x 0.28x 4.16x 8.0x 9.41x 0.7x Mean 1.1x 7.9x 12.1x 1.01x 7.10x 19.2x 14.47x 8.5x Median 0.8x 7.3x 10.9x 0.78x 6.02x 15.9x 14.75x 2.8x

Implied Enterprise Value High 5,138 3,173.3 4,374.1 5,430.68 3,171.29 Low 682 1,246.8 1,202.3 708.53 1,121.89 Mean 2,467 1,890.6 2,116.7 2,565.36 1,911.58 Median 1,889 1,740.2 1,899.9 1,980.95 1,622.09

+ Total Cash & ST Investments 226 226 226 226 226 - Total Debt 84.7 84.7 84.7 84.7 84.7 - Total Pref. Equity ------Minority Interest 18.79 18.79 18.79 18.79 18.79

= Implied Equity Value High 5,261 3,296.3 4,497.0 5,553.63 3,294.24 4,587.6 2,788.36 9,473.36 Low 805 1,369.8 1,325.2 831.48 1,244.84 839.77 1,376.97 217.36 Mean 2,590 2,013.6 2,239.6 2,688.31 2,034.53 2,013.8 2,117.44 2,595.57 Median 2,011 1,863.1 2,022.8 2,103.9 1,745.04 1,674.5 2,158.03 840.47

/ Shares Outstanding 194.65 194.65 194.65 194.65 194.65 194.65 194.65 194.65

= Implied Price per Share High 27 16.9 23.1 28.53 16.92 23.57 14.33 48.67 Low 4 7.0 6.8 4.27 6.4 4.31 7.07 1.12 Mean 13 10.3 11.5 13.81 10.45 10.35 10.88 13.33 Median 10 9.6 10.4 10.81 8.97 8.6 11.09 4.32

Mean Equity Value Across Multiples Equity Value Price Per Share

High 4,843.97 24.89 Low 1,001.28 5.14 Mean 2,286.57 11.75 Median 1,802.42 9.26

All values in millions, except per share data and ratios. Values converted at today's spot rate.

Historical Equity Pricing Data supplied by

109 of 150 JD Sports Fashion plc (LSE:JD.) > Quick Comparable Analysis > Credit Health Panel

Details Template: Capital IQ Default Comps Currency: US Dollar As-Of Date: Mar-28-2016

Company Comp Set Company Name LTM Period Financials Country Primary Industry Classification Overall Operational Solvency Liquidity Ending Updated Burberry Group plc (LSE:BRBY) 1 1 1 1 Sep-30-2015 Nov-12-2015 United Kingdom Apparel, Accessories and Luxury Sports Direct International plc (LSE:SPD) 1 2 2 2 Oct-25-2015 Dec-11-2015 United Kingdom SpecialtyGoods Stores Hibbett Sports, Inc. (NasdaqGS:HIBB) 2 1 3 3 Jan-30-2016 Mar-11-2016 United States Specialty Stores WH Smith PLC (LSE:SMWH) 2 2 1 3 Aug-31-2015 Dec-08-2015 United Kingdom Specialty Stores Alpen Co., Ltd. (TSE:3028) 3 3 3 2 Dec-31-2015 Feb-19-2016 Japan Specialty Stores Xebio Holdings Co., Ltd. (TSE:8281) 3 4 3 1 Dec-31-2015 Feb-18-2016 Japan Specialty Stores Sportsman's Warehouse Holdings, Inc. 4 3 4 4 Jan-30-2016 Mar-25-2016 United States Specialty Stores Debenhams(NasdaqGS:SPWH) plc (LSE:DEB) 4 4 4 4 Aug-29-2015 Dec-11-2015 United Kingdom Department Stores Marks & Spencer Group plc (LSE:MKS) 4 4 4 4 Sep-26-2015 Nov-05-2015 United Kingdom Department Stores

JD Sports Fashion plc (LSE:JD.) 3 3 2 3 Aug-01-2015 Oct-21-2015 United Kingdom Specialty Stores

Displaying 10 Companies.

All values in millions, except per share data and ratios. Values converted at today's spot rate.

110 of 150

JD Sports Capital IQ spreadsheets: Estimates

Data Provided by Historical Equity Pricing Data supplied by

111 of 150 JD Sports Fashion plc (LSE:JD.) > Capital IQ Estimates > Consensus

Currency: Reported Currency Conversion: Today's Spot Rate Units: Capital IQ (Default) Decimals: CapitalIQ (Default) Consolidation: Consolidated Acctg. Standard: Majority Accounting Standard

Current Fiscal Year End: Jan-31-2016 | FY 2016 Earnings Release Date: Apr-14-2016

LSE:JD. (GBP) Mean Median High/Low Std. Dev. No. of Estimates. LSE:JD. - Recommendation: Buy (1.25) Target Price 12.21 12.65 13.00/10.55 0.98 4/4 1 - Buy 3 2 - Outperform 1 3 - Hold 0 4 - Underperform 0 5 - Sell 0 0 - No Opinion 0

Market Summary LSE:JD. LSE:JD. (IFRS|GBP) Currency British Pound Current Quarter Current Year NTM Latest Price/Last Close Price 11.04/11.04 EPS Normalized - 0.53 0.53 52 Wk. High/Low 11.71/4.40 Company Level (IFRS|GBP) Potential Upside/Diff. from Target Price 10.62 %/1.17 Revenue - 1,801.64 1801.64 EBITDA - 190.72 190.72

Fiscal Years LSE:JD. (GBP) 2015 2016 2017 2018 EPS Normalized 0.39 A 0.53 E 0.58 E 0.63 E Final Est. 0.36 E - - - Median 0.36 E 0.53 E 0.58 E 0.62 E High 0.37 E 0.59 E 0.68 E 0.75 E Low 0.36 E 0.48 E 0.51 E 0.54 E Std. Dev. 0.0 0.05 0.07 0.09 No. of Estimates 3/3 4/4 4/4 4/4 Acctg. Standard IFRS IFRS IFRS IFRS EPS (GAAP) 0.27 A 0.53 E 0.63 E 0.68 E Final Est. 0.34 E - - - Median 0.34 E 0.53 E 0.63 E 0.68 E High 0.35 E 0.53 E 0.63 E 0.68 E Low 0.34 E 0.53 E 0.63 E 0.68 E Std. Dev. 0.01 - - - No. of Estimates 2/2 1/1 1/1 1/1 Acctg. Standard IFRS IFRS IFRS IFRS 112 of 150 Company Level (GBP) 2015 2016 2017 2018 Revenue 1,522.25 A 1,801.64 E 1,958.16 E 2,109.71 E Final Est. 1,508.50 E - - - Median 1,508.91 E 1,814.77 E 1,998.05 E 2,154.10 E High 1,540.60 E 1,816.15 E 2,001.43 E 2,190.02 E Low 1,476.00 E 1,774.00 E 1,875.00 E 1,985.00 E Std. Dev. 26.37 19.55 58.82 89.39 No. of Estimates 3/3 3/3 3/3 3/3 Acctg. Standard IFRS IFRS IFRS IFRS EBITDA 147.41 A 190.72 E 208.17 E 225.21 E Final Est. 133.17 E - - - Median 133.50 E 189.27 E 205.18 E 222.82 E High 134.30 E 206.83 E 233.31 E 255.20 E Low 131.71 E 177.50 E 189.00 E 200.00 E Std. Dev. 1.08 13.16 18.12 21.65 No. of Estimates 3/3 4/4 4/4 4/4 Acctg. Standard IFRS IFRS IFRS IFRS

Calendar Years LSE:JD. (GBP) 2015 2016 2017 EPS Normalized 0.53 E 0.58 E 0.63 E Median 0.53 E 0.58 E 0.62 E High 0.59 E 0.68 E 0.75 E Low 0.48 E 0.51 E 0.54 E Std. Dev. 0.05 0.07 0.09 No. of Estimates 4/4 4/4 4/4 Acctg. Standard IFRS IFRS IFRS EPS (GAAP) 0.53 E 0.63 E 0.68 E Median 0.53 E 0.63 E 0.68 E High 0.53 E 0.63 E 0.68 E Low 0.53 E 0.63 E 0.68 E Std. Dev. - - - No. of Estimates 1/1 1/1 1/1 Acctg. Standard IFRS IFRS IFRS

113 of 150 Company Level (GBP) 2015 2016 2017 Revenue 1,801.64 E 1,958.16 E 2,109.71 E Median 1,814.77 E 1,998.05 E 2,154.10 E High 1,816.15 E 2,001.43 E 2,190.02 E Low 1,774.00 E 1,875.00 E 1,985.00 E Std. Dev. 19.55 58.82 89.39 No. of Estimates 3/3 3/3 3/3 Acctg. Standard IFRS IFRS IFRS EBITDA 190.72 E 208.17 E 225.21 E Median 189.27 E 205.18 E 222.82 E High 206.83 E 233.31 E 255.20 E Low 177.50 E 189.00 E 200.00 E Std. Dev. 13.16 18.12 21.65 No. of Estimates 4/4 4/4 4/4 Acctg. Standard IFRS IFRS IFRS

114 of 150 JD Sports Fashion plc (LSE:JD.) > Capital IQ Estimates > Multiples

Currency: Reported CurrencyConversion: Today's Spot Rate Units: Capital IQ (Default)Decimals: CapitalIQ (Default) Consolidation: ConsolidatedAcctg. Standard: Majority Accounting Standard Dilution: Basic

Current Fiscal Year End: Jan-31-2016

LSE:JD. (Current Fiscal Year End: Jan-31-2016) Based on Market Price TEV/REV TEV/EBITDA TEV/EBIT Price/Earnings PEG P/BV NTM 1.15x 10.83x - 20.79x - - FY 2016 1.15x 10.83x - 20.79x - - FY 2017 1.06x 9.93x - 18.92x - - FY 2018 0.98x 9.18x - 17.57x - - CY 2015 1.15x 10.83x - 20.79x - - CY 2016 1.06x 9.93x - 18.92x - - CY 2017 0.98x 9.18x - 17.57x - -

115 of 150 JD Sports Fashion plc (LSE:JD.) > Capital IQ Estimates > Surprise

Currency: Reported CurrencyConversion: Today's Spot Rate Units: Capital IQ (Default)Decimals: CapitalIQ (Default) Consolidation: ConsolidatedAcctg. Standard: Majority Accounting Standard

Current Fiscal Year End: Jan-31-2016 | FY 2016 Earnings Release Date: Apr-14-2016 Fiscal Years LSE:JD. (GBP) 2015 EPS Normalized 8.33% Difference 0.03 Actual 0.39 A Estimate 0.36 E Announced Date Apr-15-2015 Acctg. Standard IFRS EPS (GAAP) (20.59%) Difference ( 0.07) Actual 0.27 A Estimate 0.34 E Announced Date Apr-15-2015 Acctg. Standard IFRS

Company Level (GBP) 2015 Revenue 0.91% Difference 13.75 Actual 1,522.25 A Estimate 1,508.50 E Announced Date Apr-15-2015 Acctg. Standard IFRS EBITDA 10.69% Difference 14.24 Actual 147.41 A Estimate 133.17 E Announced Date Apr-15-2015 Acctg. Standard IFRS

116 of 150 JD Sports Fashion plc (LSE:JD.) > Capital IQ Estimates > Trends

Currency: Reported CurrencyConversion: Today's Spot Rate Units: Capital IQ (Default)Decimals: CapitalIQ (Default) Consolidation: ConsolidatedAcctg. Standard: Majority Accounting Standard

Current Fiscal Year End: Jan-31-2016 | FY 2016 Earnings Release Date: Apr-14-2016

EPS Normalized LSE:JD. (GBP) FY 2016 FY 2017 FY 2018 Current 0.53 0.58 0.63 1 month ago 0.56 0.61 0.66 2 months ago 0.56 0.61 0.66 3 months ago 0.52 0.57 0.6 6 months ago 0.49 0.53 0.57 9 months ago 0.43 0.47 0.51 12 months ago 0.39 0.41 - 18 months ago 0.36 0.39 -

EPS (GAAP) LSE:JD. (GBP) FY 2016 FY 2017 FY 2018 Current 0.53 0.63 0.68 1 month ago 0.53 0.63 0.68 2 months ago 0.53 0.63 0.68 3 months ago 0.52 0.57 0.61 6 months ago 0.49 0.54 0.58 9 months ago 0.44 0.48 0.52 12 months ago 0.38 0.41 - 18 months ago 0.37 0.39 -

Revenue Company Level (GBP) FY 2016 FY 2017 FY 2018 Current 1801.64 1958.16 2109.71 1 month ago 1801.64 1958.16 2109.71 2 months ago 1801.64 1958.16 2109.71 3 months ago 1798.31 1936.54 2064.03 6 months ago 1737.25 1862.69 2041.43 9 months ago 1632.3 1729.94 1823.78 12 months ago 1541.49 1621.34 - 18 months ago 1536.96 1648.44 -

117 of 150

JD Sports Annual Report 2015 (extracts)

Data Provided by Historical Equity Pricing Data supplied by

118 of 150 2015 Annual Report & Accounts

119 of 150 Contents

Overview Highlights 5 Who We Are 6 Where We Are 16 Grou p Portfolio Introduction 18 Executive Chairman’s Statement 45

Strategic Report Business Model 46 Our Strategy 47 Principal Risks 49 Business Review 51 Financial Review – Continuing Businesses 52 Property and Stores Review 54 Corporate and Social Responsibility 56

Governance The Board 60 Directors’ Report 61 Corporate Governance Report 63 Directors’ Remuneration Report 67

Financial Statements Statement of Directors’ Responsibilities 77 Independent Auditor’s Report 78 Consolidated Income Statement 80 Statement of Comprehensive Income 80 Statement of Financial Position 81 Consolidated Statement of Changes in Equity 82 Consolidated Statement of Cash Flows 83 Notes to the Consolidated Financial Statements 84

Group Information Five Year Record 135 Financial Calendar 136 Shareholder Information 137

120 of 150 Annual Report & Accounts 2015

“Our continuing operations have delivered a record result for the year with a headline profit before tax and exceptional items in excess of £100 million.”

Peter Cowgill

4 121 of 150 Overview

Highlights

• Record result with profit before tax and exceptional items in the continuing businesses of £100.0 million (2014: 82.0 million).

• Exceptional performance in Sports Fashion with like for like store sales growth across the combined European fascias of 13% and operating profits increased by 18% to £107.0 million (2014: £91.0 million).

• Encouraging progress in the development of the international Sports Fashion offering with new stores added in all existing territories.

• Comparable with the wider sector, Outdoor had a difficult second half following the very mild autumn and winter. Sector wide promotional activity continues as the resulting imbalance of stocks in the trade is addressed.

• Investment levels remain high in Sports Fashion with total capital expenditure of £70.2 million (2014: £48.2 million). This is expected to increase further in the new financial year as the overseas rollout of JD continues.

• Final dividend payable increased by 4.2% to 5.90p (2014: 5.6625p) bringing the total dividends payable for the year to 7.05p (2014: 6.7750p) per ordinary share, an increase of 4.1%.

• The results of Bank Fashion Limited, which was disposed of on 25 November 2014, are presented as a discontinued activity. The results for the 52 weeks to 1 Feb 2014 have been re-presented on the same basis.

Revenue +25.1% Adjusted Basic Earnings per Ordinary Share (a) +26.2%

£1,522.3m 38.89p £1,216.4m 30.82p

2014 2015 2014 2015

Profit Before Tax and Exceptional Items +22.0% Total Dividend Payable per Ordinary Share (a) +4.1%

£100.0m 7.050p £82.0m 6.775p

2014 2015 2014 2015 a) The prior year has been restated to reflect the 4:1 share split which was approved by shareholders at the Annual General Meeting on 26 June 2014. The earnings per share are calculated based on the continuing operations only.

5 122 of 150 Annual Report & Accounts 2015

Who We Are Established in 1981with a single store in the North West of England, JD Sports Fashion Plc is a leading multichannel retailer of sports fashion and outdoor brands in the UK and Europe.

6 123 of 150 Annual Report & Accounts 2015

The Group has over 800 stores across a number of retail fascias and is proud of the fact that it always provides its customers with the latest products from the very best brands. The Group embraces the latest online and instore digital technology providing it with a truly multichannel, international platform for future growth.

12 124 of 150 Annual Report & Accounts 2015

Where We Are

Sports Fashion Fascias

JD UK & JD Sub-Total (No. Stores) ROI (1) Europe Size? JD & Size? Chausport Sprinter Other Total 2014 348 50 25 423 75 65 60 623 2015 351 65 31 447 73 80 60 660

JD UK & JD Sub-Total (000 Sq Ft) ROI (1) Europe Size? JD & Size? Chausport Sprinter Other Total 2014 1,274 92 34 1,400 84 745 137 2,366 2015 1,292 121 49 1,462 82 838 129 2,511

1. Includes Champion stores which are serviced and managed by the UK team. In addition, there were two JD branded Gyms at the period end in Hull and Liverpool.

Outdoor Fascias

(No. Stores) Blacks Millets Tiso Other Total 2014 76 80 17 - 173 2015 73 92 17 2 184

(000 Sq Ft) Blacks Millets Tiso Other Total 2014 287 143 101 - 531 2015 270 175 101 62 608

16 125 of 150 Where We Are

17 126 of 150 Annual Report & Accounts 2015

Group Portfolio Introduction Ou r vision and passion through imagery helps continually build upon our proud heritage and sets the standard across all communications.

18 127 of 150 Overview

Executive Chairman’s Statement

Introduction Board Effectiveness I am delighted to report that our continuing operations have As Executive Chairman, I am responsible for the leadership of delivered a record result for the year with a headline profit before the Board and ensuring its effectiveness in all aspects of its tax and exceptional items in excess of £100 million for the first role. The Board is then responsible for the Group’s strategic time. This result and its ingredients provide a robust platform for development, review of performance against the business further profitable growth, at home and internationally. objectives, overseeing risk and maintaining effective corporate This result has been driven by an outstanding performance in our governance including health and safety, environmental, social Sports Fashion fascias where JD’s unique and often exclusive and ethical matters. sports and fashion premium brand offer continues to enthuse People and excite both customers and suppliers. We believe that our collaborative approach to working with third party brands to We are fortunate, as a Group, to have talented people in every create a unique, premium and often exclusive offer is a major aspect of our business. Our success would not be continuing contributor to our success. We have the utmost respect for the were it not for the skills, drive and passion of the teams that brands that we sell and believe in working in partnership with work in our businesses day to day. As Executive Chairman, it is them to achieve their ambitions. This, combined with our market particularly pleasing to see the commitment that the team leading standards of visual merchandising and disciplines show to achieve success internationally. I thank everybody instore, provides the basis for international success. involved in delivering these excellent results. We have continued to extend our store presence in Europe with Current Trading and Outlook 19 new stores for JD and Size?, taking us to 70 new stores. Given the significant change in the timing of Easter relative Our continued development recognises that our offer has been to last year, we do not believe that it is appropriate to issue well received to date in these markets. We are also encouraged any detailed update at this time on trading to date in the new by the performance of Sprinter in Spain and Chausport in France. financial year. That said we are encouraged by continued In so far as this progress continues, we anticipate further growth positive trading across our core fascias. Our next scheduled in overseas markets. update will take place upon the announcement of our Interim The turnaround of our Outdoor fascias continues although the Results which is scheduled for 16 September 2015. encouraging results in the first half were somewhat tempered The Board continues to believe that the Group is well positioned in the second half as the milder and drier weather led to a to exploit successfully the opportunities that exist for continued general oversupply relative to demand for winter related product profitable growth. in the market throughout the season with consequent high levels of discounting. We continue to work with our branded partners and our own brand supply chain to improve our product proposition and market positioning to achieve a more focused consumer targeting for each part of our business. Property investment, both in terms of new stores and refitting existing stores, is also required but will be driven by the strength of the Peter Cowgill proposition and the property costs in each location. We are Executive Chairman conscious that delivery of profitability has been delayed but remain 15 April 2015 determined to enhance our proposition and the efficiency of the operations so that profitability is achieved in 2016/17.

Dividends and Earnings per Share The Board proposes paying a final dividend of 5.90p (2014: 5.6625p) bringing the total dividend payable for the year to 7.05p (2014: 6.775p) per ordinary share, an increase of 4%. The proposed final dividend will be paid on 3 August 2015 to all shareholders on the register at 26 June 2015. Given the increasing success that we are seeing from the international developments of the JD fascia and the capital investment that this requires, we intend to keep dividend growth restrained at this time. The adjusted earnings per ordinary share before exceptional items have increased by 26% to 38.89p (2014: 30.82p). The basic earnings per ordinary share have increased by 21% to 35.17p (2014: 29.08p).

45 128 of 150 Annual Report & Accounts 2015

Business Model

Central Sports Outdoor Infrastructure Fashion

Bespoke IT Training & Instore Warehouse Retail Online Development Development Devices

Omnichannel

Consumer

46 129 of 150 Strategic Report

Our Strategy

Introduction Multichannel The Group has long been established as a leading retailer of Multichannel activity has continued to grow significantly over branded and own brand sports fashion apparel and footwear the last 12 months and we continue to make good progress in the UK and Ireland. Our Sports Fashion fascias are also now towards our objective of becoming a cutting edge international firmly established in mainland Europe with significant store multichannel retailer. We believe that the relocation of our digital presence in France, Spain, The Netherlands and Germany and marketing teams in the year to the Sharp Project in Manchester, we intend to continue to extend our geography further which will which is recognised as the leading location for creative digital necessitate the development of a different operating model for production in the North West of England, is an important step countries outside Europe. Building our reach in, and potentially in achieving this objective. beyond Europe, not only gives us significant potential for growth In the UK, we have seen significant growth in online sales, but it also cements the strong supplier relationships required principally driven by the strengthening of our mobile offer. to constantly bring in new and exclusive products and to market Our digital channels continue to be important research them collaboratively. destinations for our customers and there has been substantial We will sustain our market positions through ongoing investment growth in sales from our instore digital devices (kiosks, web tills in the retail store portfolio, development and nurture of global and iPads), both through increased adoption of existing ones by supplier relationships, and the acquisition of brands and retailers customers and through the roll out of additional devices. These which we can develop and exploit to ensure our overall product enable customers to order products from the website but pay offers remain uniquely appealing. In working towards these in cash, access extended ranges not available in the store and objectives we aim to act always in a responsible and ethical access our full warehouse stock inventory. We have also introduced manner with all our stakeholders including suppliers, employees cross-fascia delivery to store which enables customers to order from and of course our customers. our digital channels and collect the product from any store Our core business strength is branded retail and our consumers within our group retail estate. Overseas, we have rolled out are either sports fashion or outdoor oriented. Where we use a full local language and local currency multichannel offer own brands we will seek to market them as third party brands. (website, mobile site, apps, instore devices, delivery to home We seek to build strong market positions which we will always and store) to Ireland, The Netherlands, France, Spain and seek to sustain and defend. We maintain these positions by Germany in the last 12 months for JD. We expect to grow constantly adding to our brand roster and endeavouring to be these markets to be significant contributors in the future. partner of choice to as many brands as possible with as much In 2015 we will continue our focus on optimising our digital exclusive product as possible. Any business in the Group which channels, improving the customer experience, enhancing we now invest in will have relevance to our core strength. our multichannel proposition, exploiting group synergies All businesses in the Group need to be capable of enhanced and rolling out our multichannel offer internationally. profitability in the medium term. Our ultimate objective is to Multichannel sales represented 9.9% of JD and Size? fascia deliver long term sustainable earnings growth to enhance total sales in the last year. shareholder returns (‘TSR’) through share price performance and dividends, whilst retaining our financial capability to invest in the growth and the sustainability of our propositions. Recent TSR performance is shown in the graph within the Remuneration Report on page 74.

Stores We are engaged in omnichannel retail and we continue to invest considerable time and money in our retail property portfolio, increasingly overseas in the Sports Fashion fascias. We believe in maintaining high standards of product presentation in well fitted stores as this increases footfall through the door and the desirability of the product within. This means that we will look to regularly refurbish stores to maintain our high standards of visual merchandising. We are also keen to use the latest technology in our stores as exemplified by the recent opening in the Trafford Centre. The store numbers and square footage at the start and end of the year are documented in the ‘Where we are’ section on page 16.

47 130 of 150 Annual Report & Accounts 2015

Our Strategy (Continued)

Infrastructure and Resources Financial Key Performance Indicators One of our most important resources is our people. We are 2015 2014 % a large equal opportunities employer and we are particularly £000 £000 Change proud of our training resources. We provide direct employment Revenue 1,522,253 1,216,371 +25% and career development to thousands of people, both in the UK and Europe. The Group employs large numbers of recent Gross profit % 48.6% 48.7% school leavers and graduates and 150 training courses were Operating profit 92,646 77,868 +19% completed by employees in the last year. We believe retention of our best staff is crucial to the success of our business as it Operating profit 102,173 83,032 +23% (before exceptional items) preserves the DNA of each business. Profit before tax and 100,023 81,995 +22% We are continuing to invest in our central distribution facility exceptional items (Kingsway) in Rochdale. Volumes processed there continue to grow quickly requiring continuing investment in mezzanines, Profit before tax 90,496 76,831 +18% racking and machinery. Basic earnings per 35.17p 29.08p +21% ordinary share (a) Period ended Period ended 31 January 2015 1 February 2014 Adjusted basic earnings per 38.89p 30.82p +26% ordinary share (a) Number of Items Processed by 58.75m 49.50m Kingsway Distribution Centre Total dividend payable per 7.050p 6.775p +4% ordinary share (a) To support our retail businesses a project is ongoing to replace Net cash at end of period (b) 84,230 45,276 our bespoke legacy ERP with Oracle Retail Systems. The new systems should start to go live in 2015 with the Outdoor fascias a) The prior year has been restated to reflect the 4:1 share split being the expected pilot migration later in the year although the which was approved by shareholders at the Annual General main Sports Fashion fascias will not migrate until 2016. Meeting on 26 June 2014. The earnings per share are We also recognise the importance of protecting our environment calculated based on the continuing operations only. and are committed to carrying out all our activities with due b) Net cash consists of cash and cash equivalents together with consideration for their environmental impact, particularly with interest-bearing loans and borrowings. regard to ensuring efficient use of energy and other resources and materials, minimising waste by recycling wherever possible and ensuring compliance with relevant legislation and codes On behalf of the Board of best practice. See also our Corporate Responsibility Report on pages 56 to 59. The risks faced by the Group and our mitigation plans are reported separately in pages 49 to 50.

Peter Cowgill Executive Chairman 15 April 2015

48 131 of 150 Strategic Report

Principal Risks

Any business undertaking will involve some risk with many risk factors common to any business no matter what sector it operates in. The Directors acknowledge however that certain risks and uncertainties are more specific to the Group and the markets in which its businesses operate. The principle risk factors are assessed below: Omnichannel Risk and Impact Mitigating Activities Brands The retail fascias offer a proposition that has a mixture of third party and own brand product. The Group seeks to ensure it is not overly reliant on a small number of brands by offering a These fascias are heavily dependent on the products and the brands themselves being stable of own brands which is constantly evolving. Where possible, the Group’s retail fascias desirable to the customer if the revenue streams are to grow. Therefore, the Group needs all also work in partnership with the third party brands in their business on the design of bespoke of its third party and own brands, including brands licensed exclusively to it, to maintain product which is then exclusive to the Group’s fascias. Further, the Group continues to actively their design and marketing prominence to sustain that desirability. seek additional brands which it can either own or license exclusively. The Group is also subject to the distribution policies operated by some third party brands. Intellectual Property The Group’s trademarks and other intellectual property rights are critical in maintaining the The Group therefore works with third party organisations to ensure that the Group’s value of the Group’s own brands. Ensuring that the Group’s businesses can use these brands intellectual property is registered in all relevant territories. The Group also actively works to exclusively is critical in providing a point of differentiation to our customers and without this prevent counterfeit product being passed off as legitimate. exclusivity we believe that footfall into the stores, visits to our websites and ultimately conversion of these visits into revenues would all be reduced. Retail Property Factors The retail landscape has seen significant changes in recent years with a number of new Wherever possible, the Group will seek a number of protections when agreeing to new developments opened and a high volume of retail units becoming vacant. The Group can property leases: be exposed where it has committed itself to a long lease in a location which, as a result of • New leases generally taken out for a maximum period of 10 years. a more recent retail development, is no longer as attractive to the customer leading to • Look to agree a break option part way through the lease. reduced footfall and potentially lower sales volumes. • Capped rent reviews. • Agree rents which flex with turnover in the store. When the Group determines that the current store performance is unsatisfactory then an assessment is made on whether the Group wants to continue trading in that location. If it does then the landlord is approached to see whether we can reach an agreement on a reduction in the rent or a change to a turnover based rent. If it is considered that the best solution is to exit the store completely then the landlord is approached with a view to a complete surrender of the lease. If this is not possible then the Group would alternatively seek to assign the lease or sublet it to another retailer. In many cases, this necessitates the payment of an incentive. The Group is mindful of current economic factors and the adverse impact on the potential for disposal from the high volume of vacant units already available as a consequence of a number of retailers going out of business in recent years. Assigning the lease or finding a sub-tenant is not without risk because if the other retailer fails then the liability to pay the rent usually reverts to the head lessee. The Group monitors the financial condition of the assignees closely for evidence that the possibility of a store returning is more than remote and makes a provision for the return of stores if this risk looks probable. The Board reviews the list of assigned leases regularly and is comfortable that appropriate provisions have been made where there is a probable risk of the store returning to the Group under privity of contract and, other than as disclosed in note 25, they are not aware of any other stores where there is a possible risk of these stores returning. Seasonality The Group’s core retail business is highly seasonal. Historically, the Group’s most important The business monitors stock levels and manages the peaks in demand constantly with trading period in terms of sales, profitability and cash flow in its Sports Fashion fascias in regular sales re-forecasting. particular has been the Christmas season. Lower than expected performance in this period may have an adverse impact on results for the full year, which may cause excess inventories that are difficult to liquidate. Economic Factors As with other retailers and distributors into retail businesses, the demand for the Group’s The Group seeks to manage this risk by offering a highly desirable and competitively priced products is influenced by a number of economic factors, notably interest rates, the product range, which is highly differentiated from that of the Group’s competitors. availability of consumer credit, employment levels and ultimately, disposable incomes. Reliance on Non-UK Manufacturers The majority of both third party branded product and the Group’s own branded product is The Group works with its suppliers to ensure that the products being sourced satisfy sourced outside of the UK. The Group is therefore exposed to the risks associated with increasingly stringent laws and regulations governing issues of health and safety, packaging international trade and transport as well as different legal systems and operating standards. and labelling and other social and environmental factors. Whilst the Group can manage the risk in the supply chain on its own and licensed products, it Compliance is monitored by the Group’s Supply Chain and Change Director who has has little control over the supply chain within the third party brands. As such, the Group is extensive experience in this area. exposed to events which may not be under its control.

49 132 of 150 Annual Report & Accounts 2015

Principal Risks (Continued)

Omichannel (Continued) Consistency of Infrastructure Risk and impact Mitigating Activities IT The Group relies on its IT systems and networks and those of the banks and the credit card The Group is progressing with a programme to replace its legacy enterprise system. However, companies to service its retail customers all year round. whilst a move to a third party system will reduce the risks in the current system there is The principal legacy enterprise system has historically been ideally suited to the operations of significant execution risk during the migration work which could take longer than currently the business but it has always been heavily reliant on a very limited number of key anticipated to complete. Further, the introduction of a third party system is bringing development staff who have now left the business. This risk has been mitigated by improving additional costs both in terms of the initial development and ongoing support. documentation of the system and recruiting external developers to support the system. Any long term interruption in the availability of the core enterprise system would have a significant impact on the retail businesses. The Group manages this risk by the principal IT servers being housed in a third party location which has a mirror back up available should the primary servers or links fail. Warehouse Operations The Group’s new warehouse in Rochdale became operational during 2012. Having the stock The Group has worked with its insurers on a Business Continuity Plan which came into effect in one location with increased automation in the picking process has brought benefits in when the warehouse became operational. This plan has since been reviewed and enhanced terms of capacity, product availability, quicker deliveries to our European stores and reduced by the Group Supply Chain and Change Director. transport costs. However, there is an increased risk to store replenishment and multichannel In addition, there is a full support contract with our automation equipment providers which fulfillment from both equipment and system failure, together with the inherent risk of having includes a 24/7 presence from a qualified engineer thereby enabling immediate attention to all the stock in one location. any equipment issues. Personnel The success of the Group is partly dependent upon the continued service of its key management To help achieve this continued service, the Group has competitive reward packages for all personnel and upon its ability to attract, motivate and retain suitably qualified employees. of its staff. More specifically for the retail businesses, the Group also has a long established and substantial training function which seeks to develop training for all levels of retail employees and thereby increase morale and improve staff retention. This then ensures that knowledge of the Group’s differentiated product offering is not lost, thereby enhancing customer service. Health and Safety The health and safety of our customers and employees is of the utmost importance. There is a comprehensive induction and training programme for store staff covering Health Policies are implemented in conjunction with training programmes to protect our employees and Safety issues. and customers. Personal injuries, distress and fatalities could result from a failure to establish The Group Health and Safety Committee meets on a monthly basis; is chaired by the Group and maintain safe environments. Health and Safety Manager and includes as its attendees the Group Company Secretary and Group Property Director. The Group Health and Safety Manager appraises the Board of material issues and, incidents on a periodic basis. Targets are set by the Board to enable measurement of performance. Performance against targets, incidents and legal claims that arise are reported to the Board. The Group also works closely with its principal insurers who undertake regular risk reviews both in the store portfolio and in the main central warehouse. Treasury and Financial Risk The Group is exposed to fluctuations in foreign exchange rates principally Sterling/US Dollar The Group sets a buying rate for the purchase of goods in US dollars at the start of the consequent to the sourcing of own brand merchandise where suppliers are located principally buying season (typically six to nine months before the product actually starts to appear in in the Far East or Indian Sub-Continent. Strengthening of the US Dollar relative to Sterling the stores) and then enters into a number of local currency/US dollar contracts, using a makes product sourced in this currency more expensive thus reducing profitability. variety of instruments, whereby the minimum exchange rate on the purchase of dollars is Product for the JD fascia throughout Europe is purchased by JD Sports Fashion Plc which is guaranteed. The Group typically looks to protect approximately 90% of the US dollar the main UK trading business. This business then sells to the international businesses in their requirement for the following year. local currencies. Given the current geographical location of the Group’s stores then this results The Group encourages its own brand suppliers to quote in euros where possible thus creating in a Sterling/Euro exposure in the UK trading business for the euros which are remitted back a natural hedge against the euros remitted from the international businesses. The surplus for stock purchases. euros are also used to fund the international store developments thus alleviating the need for local third party financing.

Brian Small Chief Financial Officer 15 April 2015

50 133 of 150 Strategic Report

Business Review

Sports Fashion Outdoor Sports Fashion consists of the businesses previously reported The operating loss (before exceptional items) in Outdoor has both within the former Sports segment and within the former reduced by £3.1m to £4.9m (2014: £8.0m). Fashion segment which ceased to be a substantial separate In the first half of the year, the performance of our Blacks and segment following the disposal of Bank Fashion Limited (‘Bank’) Millets businesses saw some encouraging improvement as we prior to the key Christmas trading period. In reality the Group’s implemented a number of critical operational changes and core retail operations have always largely presented and sold introduced more seasonally relevant product. However, the the major international sports brands alongside fashion brands second half of the year saw weaker than hoped for sell through as fashion and lifestyle attire thereby creating a natural and of autumn and winter ranges during a particularly mild and dry strengthening blend between sports and fashion brand season. Heavy discounting has inevitably followed across the participation in the overall success of the Group. whole sector to deal with the resulting imbalance between supply Indeed, the natural strengthening flow across the Group and demand, a process which has continued into the new has been well illustrated this year by the successful introduction financial year. of The North Face into JD last Autumn from our Outdoor Tiso (incorporating George Fisher), in its first full year in the brand roster. Group, has enabled us to enhance our relationship with several In addition, given the ActivInstinct online business is not a key brands and has given us significantly better geographical fashion led business and its key trading categories are Outdoor coverage in Scotland. The business, which continues to trade and Sports Performance, we now include this within Outdoor with independent management and systems, has suffered the rather than Sports Fashion. same trading issues in the second half as Blacks and Millets Sports Fashion has had an excellent year with operating profits although we remain confident about its longer term prospects. (before exceptional items) in the continuing businesses increased to £107.0 million (2014: £91.0 million) with positive momentum in all of the territories in which we operate driven by a buoyant market for branded athletic footwear across Western Europe and an excellent buying and merchandising performance. JD’s approach to retail theatre and our commitment to working Peter Cowgill with our supplier partners on the presentation of their premium Executive Chairman branded footwear and apparel is unique. We remain committed 15 April 2015 to the advancement of this proposition and during the year we refurbished our flagship Trafford Centre store in a new concept which moves forward our already excellent standards in visual merchandising and embraces the latest instore technology. This concept will continue to evolve and we are confident that our new store in Oxford Street, which we will open later in the year, will generate an equally positive reaction.

51 134 of 150 Annual Report & Accounts 2015

Financial Review – Continuing Businesses

Revenue, Gross Margin and Overheads Working Capital and Cash Total revenue increased by 25% in the year to £1,522.3 million Our core retail fascias continue to provide a source of strong (2014: £1,216.4 million). Like for like sales for the 52 week cash generation which provides the Group with the financial period across all continuing Group fascias, including those in framework for ongoing acquisition activity and continuing Europe, increased by 12% which was an exceptional performance. substantial investments in both retail property and operational Total gross margin in the year of 48.6% was broadly consistent infrastructure. Ultimately, net cash balances improved by with the prior year with a small increase in the margin in £38.9m in the year to £84.2m (2014: £45.3 million) although Sports Fashion to 49.5% (2014: 49.1%) offset by a reduction this was assisted by £16.5m of lease incentives received in the in the margin in Outdoor to 41.3% (2014: 44.8%), reflecting last two months connected with the acquisition of five former the inclusion of a full year of the lower margin Tiso and Kiddicare stores. ActivInstinct businesses and the impact from heavier discounting Gross capital expenditure (excluding disposal costs) increased in the final quarter of the year. by £22.0 million to £70.2 million (2014: £48.2 million). Our commitment both to delivering the best possible Operating Profits and Results experience to our customers and to overseas expansion means Operating profit (before exceptional items) increased substantially that investment in our retail fascias, both in terms of taking by £19.2 million to £102.2 million (2014: £83.0 million) with new stores where appropriate and refurbishing existing space, an exceptional performance in Sports Fashion and a reduction remains substantial. in the losses in Outdoor. A requirement to clear excess Autumn A total of £37.2 million was invested in our retail fascias during and Winter inventories means that whilst we anticipate that the year (2014: £27.9 million). Elsewhere, investment in Project Outdoor will move towards profitability in the new financial Emperor, the replacement of our core systems with Oracle and year, it may be 2016/17 before this objective is achieved. new JD proprietary software, was £5.9 million in the year (2014: There were net exceptional items in the year of £9.5 million £5.1 million). We have also invested £11.5 million (2014: £2.2 (2014: £5.2 million) which include a charge of £5.1m for the million) on the first phase of a project to increase the operational impairment of intangible assets previously recognised on the capacity and flexibility of our Kingsway warehouse. acquisitions of Blacks Outdoor Retail Limited, Kukri Sports Limited Our increased confidence in international success means that and Ark Fashion Limited. The exceptional items comprised: investment in JD’s international fascias will be a key focus for the 2015 2014 Group in the new year. International development opportunities £m £m combined with ongoing investment in Project Emperor and further works at Kingsway means that there is likely to be a further Loss on disposal of fixed assets 0.9 0.9 substantial increase in the overall capital expenditure in the Impairment of fixed assets in loss making stores 1.0 0.5 new financial year. Onerous lease provisions 2.5 0.5 Disposal of Bank Fashion Limited Total property related exceptional costs 4.4 1.9 Prior to its disposal to Hilco on 25 November 2014, Bank was Completion of new Kingsway warehouse move - 0.6 having another difficult year with operating losses at similar levels to the prior year leading the Board to conclude, shortly Business restructurings (1) - 2.7 before that date, that there was no realistic prospect of a material Total reorganisation and restructuring costs - 3.3 improvement in performance in the short term. Consequently we reluctantly determined that the sale of Bank was in the best Impairment of intangible assets (2) 5.1 - interests of the Group and its shareholders with future investment Total other exceptional charges 5.1 - being prioritised for our successful core fascias. However, we Total exceptional charge 9.5 5.2 remain absolutely committed to supporting the broadest possible range of fashion brands within the Group and all our other

fascias will continue to be supported with necessary investment (1) Charge of £2.7 million in the prior year from the restructuring and working capital this year. of the head office and warehouse operations of the Blacks, Champion and Kooga businesses. Following the disposal of Bank, repayments of £18.15m against JD’s intercompany loan have been made which represents a (2) Charge arising from the impairment of the goodwill arising substantial recovery of the intergroup indebtedness at disposal. in prior years on the acquisition of Blacks Outdoor Retail The pre-tax exceptional loss arising on the disposal of Bank Limited, the goodwill arising on the acquisition of Kukri Sports was £6.3 million. The results of Bank for the period of the Limited, the Kukri brand name and the Ark fascia name. Group’s ownership together with the exceptional loss arising Group profit before tax in the year ultimately increased by £13.7 on the disposal of the business have been presented as a million to £90.5 million (2014: £76.8 million). discontinued activity.

52 135 of 150 Strategic Report

Financial Review – Continuing Businesses (Continued)

Taxation Foreign Exchange Exposures The effective rate of tax on profit from continuing operations The Group’s principal foreign exchange exposure continues to has decreased from 24.6% to 22.9% primarily due to the be on the sourcing of own brand merchandise from either the decrease in the main rate of UK corporation tax. Excluding both Far East or Indian Sub-Continent which usually has to be paid exceptional items and prior year adjustments from the tax for in US Dollars. A buying rate is set at the start of the buying charge, the effective core rate from continuing activities has season (typically six to nine months before product is delivered decreased from 26.2% to 22.4%. This core effective tax rate to stores). At this point, the Group aims to protect the anticipated continues to be above the standard rate due to the depreciation US Dollar requirement at rates at, or above, the buying rate of non-current assets which do not qualify for tax relief and through appropriate foreign exchange instruments. overseas subsidiaries being subject to higher rates of corporation Following the disposal of Bank Fashion Limited, the Group’s tax than the UK. forecast requirement for US Dollars in the period to January 2016 is now $120 million. Cover is in place for 2015 for $107 Earnings per Share million meaning that the Group is currently exposed on The basic earnings per share from continuing operations has exchange rate movements for $13 million of the current year’s increased by 20.9% from 29.08p to 35.17p. However, the estimated requirement. Directors consider the adjusted earnings per share to be a more appropriate measure of the Group’s underlying earnings The Group is also exposed to the movement in the rate of the performance since it excludes the post-tax effect of exceptional Euro from the sale of its UK sourced stocks to its subsidiaries items (other than the loss on disposal of non-current assets). in Europe. However, the Group has a natural hedge on this The strong trading performance in the year is reflected in the exposure as the Euros received for that stock are then reinvested fact that the adjusted earnings per share from continuing back in those European subsidiaries to fund the development operations has increased by 26.2% from 30.82p to 38.89p. of both new stores and refurbishments.

Dividends A final cash dividend of 5.90p per share is proposed, which if approved, would represent an increase of 4.2% on the final dividend from the prior year. Added to the interim dividend of 1.15p per share, this takes the full year dividend to 7.05p, which is an increase of 4.1% on the prior year. The dividend has risen Brian Small by 57% since 2010. Chief Financial Officer 15 April 2015 Treasury Facilities Interest rate hedging has not been put in place on the current facility. The Directors continue to be mindful of the potential for rises in UK base rates as the general economic situation improves but, at present, given the highly seasonal nature of the Group’s core cashflows, they do not believe that a long term interest hedge is appropriate. This position continues to be reviewed regularly. Working capital remains well controlled with suppliers continuing to be paid to agreed terms and settlement discounts taken whenever due.

53 136 of 150 Annual Report & Accounts 2015

Property and Stores Review

Sports Fashion • Netherlands – Given that we acquired an immediate critical JD mass from our initial acquisition of stores in the country then this has largely been a year of consolidation as we We have a consistent retail property strategy for the core JD review and refine our proposition in the country. However, fascia across Europe with modern, efficient and attractively the performance of our store in the centre of Rotterdam, presented stores located in prime locations with strong footfall. which we opened in December 2013 and was the first JD is a world class retail fascia and we strongly believe that store we identified and opened independently, has given us our multichannel approach, which marries a vibrant retail the confidence to look for space in other major towns in the theatre with the latest retail digital technology, increases the country. During the year we opened a store in Den Haag attractiveness and desirability of our product and provides our and so we now have 16 stores in the country. stores with a real point of difference for both our consumers and our branded suppliers. • Germany – During the year, we converted the 10 small stores that we had acquired from the Isico partnership in the The JD fascia provides the foundation for profit and cash prior year to the JD format. During the year we opened generation in the Group and consequently we continue to invest seven new stores, of which two were committed prior to our heavily in this fascia across an increasing number of territories. acquisition of the Isico business. Given the strength of Isico in We are gaining real credibility in Europe with both major the Berlin area then we have focused our attention on other landlords and property agents and we continue to look at cities and larger towns in the country including Dusseldorf opportunities, in both our existing and new territories, to develop and Dortmund. the fascia with particular focus on major metropolitan areas: Size? • UK & Republic of Ireland – 18 new stores were opened in As with JD, we believe that the Size? fascia with its independent the period with 15, generally smaller, stores closed. The feel and loyal consumer following has the potential to be 18 new stores included one new store in the Republic of successful internationally. Our international focus for this fascia Ireland and eight relocations in towns or malls in the UK to is reflected in the fact that of the seven new Size? stores which a more appropriately spaced store or a position of greater were opened during the year, four were in Europe with two footfall. We upsized in five locations where we were able to further stores in France, in Toulouse and Bordeaux, to negotiate a favourable rent deal on additional space. This is complement the existing store in Paris together with our first proving to be a cost efficient way of expanding our product Size? store in Italy (Milan) and the Netherlands (Amsterdam). offer, widen our appeal to a broader consumer and Of the three store openings in the UK, one was a concession in ultimately improve the financial performance of the store. the Harrods department store in London. Elsewhere, the stores During the year, we also refurbished our flagship store in in Cardiff and Nottingham were relocated. the Trafford Centre, Manchester, in a new concept which moves forward our already excellent standards in visual Chausport merchandising and embraces the latest instore digital It is still our belief that the Chausport fascia is more suited to the technology. This concept, which has excited consumers and smaller regional towns and centres. We opened one Chausport our supplier partners, will continue to evolve and we are store and closed three small stores in the year. We continue to confident that our new stores in Oxford Street and other key be satisfied with the performance of the Chausport business locations, which we will open through 2015, will generate and will support limited investment in this business where conflict a similar very positive reaction. with JD’s plans is unlikely.

• France – JD continues to develop momentum in France. Sprinter A further five stores opened in the year with 22 stores We continue to believe that the Sprinter proposition has now trading in the country. The focus on the major significant potential to expand beyond its traditional heartlands metropolitan areas is reflected in the fact that the openings in the communities of Andalucia, Murcia and Valencia and included two stores in malls around Paris, where we now are supporting the Sprinter management team in their store have 11 stores, and one was in a mall in Marseille, where opening programme. During the year we opened a further 15 we now have three stores. stores of which four were outside of the traditional heartlands, • Spain – To date, the economic situation in the country has including the first store in Catalonia. The average retail meant we have been more cautious in our pace on opening footprint of the stores opened in the year was 6,700 sqft which new stores. However, we did open a further two stores in is less than 50% of the average footprint of the stores on the year with ten stores now trading in the country. acquisition in 2010. We are confident that this footprint is more These openings were both in malls around Madrid, where appropriate for the business. we now have six stores. As with France, we have focused initially on developing a critical mass in the capital city. Scotts We are more optimistic of the economic situation in Spain Whilst investment in the business has been limited in recent now and so, subject to the availability of appropriately years, we are very encouraged by more recent performance. rented property space in the right locations then we would Accordingly, we anticipate opening a limited number of new look to cautiously accelerate our openings in the new stores in the new financial year. financial year.

54 137 of 150 Strategic Report

Property and Stores Review (Continued)

Tessuti • Ultimate Outdoors – The acquisition of the Ultimate After opening three new stores in the prior year and converting Outdoors stores has enabled us to develop a new concept the remaining Cecil Gee stores to the Tessuti style then this has with the same name where we have combined our Outdoor been a year of consolidation with the only property movement offerings in a significantly larger space. As the name suggests, being the closure of one small Originals store. In addition to we believe that this fascia and website can cater for the needs the usual decision making factors for new property of rent, retail of any Outdoor consumer. Our first store in this new format, footprint and strength of footfall, openings in the premium with 16,300 sqft of retail space, opened in Preston in July branded Tessuti business are also dependent on availability of 2014. Five further stores of this type are expected to open third party brands in a particular location. in 2015 utilising the former Kiddicare stores.

Outdoor Tiso Blacks, Millets and Ultimate Outdoors Tiso has 17 stores of which 16 are located across Scotland (including six standalone Alpine Bikes stores) and one in Keswick Subsequent to our acquisition of the business in January 2012, (George Fisher). These stores vary in size ranging from the we agreed short term leases with flexible break clauses with specialist Alpine cycling stores at less than 1,000 sqft to Tiso landlords in a number of locations which gave both parties the fascia’ed stores in secondary out of town destinations with the maximum flexibility to move quickly if appropriate. Consequently, largest one in Glasgow at 15,500 sqft. the Blacks and Millets store portfolios continue to evolve: For a complete table of store numbers see page 16. • Blacks – No new stores were opened in the period although we did acquire two stores formerly trading as Ultimate Outdoors (in Lancaster and Skipton) which were subsequently converted to the Blacks fascia. As part of the same transaction, we also acquired a store in Keswick which trades as ‘Planet Fear’ and caters for the more adventurous outdoor participant. Three Blacks stores were closed in the period with a further Peter Cowgill three stores converted to Millets. Executive Chairman • Millets – The Millets store portfolio has seen considerable 15 April 2015 change during the year with 15 new stores opened, 14 stores acquired which were formerly trading as Oswald Bailey in the South of England and the conversion of three former Blacks stores. 20 stores were closed in the year which included four of the acquired Oswald Bailey stores and two stores which were relocated into new space.

55 138 of 150 Annual Report & Accounts 2015

Corporate and Social Responsibility

The Group recognises that it has a responsibility to ensure its Equality and Diversity business is carried out in a way that ensures high standards The Group is committed to promoting policies which are of environmental and human behaviour. With the help and designed to ensure that employees and those who seek to work co-operation of all employees, the Group endeavours to comply for the Group are treated equally regardless of sex, marital with all relevant laws in order to meet that duty and responsibility status, creed, colour, race, religion or ethnic origin. wherever it operates. The major contributions of the Group in The Group gives full and fair consideration to applications for this respect are detailed below. employment by people who are disabled, to continue whenever Our Employees possible the development of staff who become disabled and to provide equal opportunities for the career development of The Group is a large equal opportunities employer and a large disabled employees. It is also Group policy to provide training organisation with the Group’s retail businesses providing opportunities for the large number of people seeking flexible direct employment and career development to thousands of or part time hours. people, both in the UK and internationally. The Group employs large numbers of school leavers and university graduates and A breakdown by gender of the number of employees who participates regularly in work experience schemes with schools were Directors of the Company, Senior Managers and other and colleges. employees as at 31 January 2015, is set out below. Retail personnel across all levels within the Group’s core UK, % % Republic of Ireland and JD France, Spain, The Netherlands and Male Female Total Male Female Germany fascias are encouraged to take ownership of their PLC Board 4 - 4 100% - own careers and to actively seek development and progression. Senior Managers* 91 36 127 72% 28% Training All Employees 8,274 7,551 15,825 52% 48% The Group recognises that Training and Development for all levels of personnel is vital in maximising performance levels * Senior Managers is defined as - and also provides a useful mechanism for increasing morale and retention. This ensures that knowledge of our differentiated 1) persons responsible for planning, directing or controlling product offering remains in our stores, thereby enhancing the activities of the Company, or a strategically significant part of the Company, other than Company Directors and; customer service. 2) any other Directors of subsidiary undertakings Training for the UK, Republic of Ireland and International stores is provided by the Group’s long-established training function. Communication The Training team now includes a fascia-specific Training The number and geographic dispersion of the Group’s operating Manager for Size? along with training support for Head Office locations make it difficult, but essential, to communicate (including extended support for the Multichannel and IT effectively with employees. departments) and the Kingsway Distribution Centre. Communication with retail staff is primarily achieved through the The training function produces, designs and delivers various management in the regional and area operational structures. programmes for all fascias and territories in order to ensure In addition, formal communications informing all employees operational consistency throughout the Group. of the financial performance of the Group are issued on a Training received by all retail personnel is quality-controlled and regular basis by the Group’s Human Resources Department measured via the use of electronic assessments. There are 36 in the form of ‘Team Briefs’. This department also produces a types of electronic assessments across all retail fascias, covering booklet four times a year for distribution within the Group’s all progression levels within the business. Head Office and Warehouse called People 1st. Training and development is provided across a number of areas: Health and Safety Average We are committed to ensuring a safe environment for all of our No. of Number of employees and customers and actively encourage a positive courses in Length attendees on a year of course each course health and safety culture throughout the organisation. The Group recognises its responsibility for health and safety and there is New Retail Management Induction 23 5 days 16 accountability throughout the various management levels within Retail Training Academy 3 12 weeks 20 the business. Our commitment to Health and Safety is best evidenced as follows: Junior Retail Management Development 60 4 hours 10 • The Health and Safety team has been further strengthened in Miscellaneous Management Development the year to provide direct support for our main distribution (including Retail & Head Office) 40 0.5 day 10 centre in Rochdale. Head Office Induction 24 0.5 day 10 • We have continued to develop a comprehensive induction and training programme which is regarded as an essential Chausport and Sprinter operate their own training programmes part of our commitment to health and safety. Our monthly which are more suited to those particular fascias. newsletter ensures that the safety message is communicated effectively throughout the Group.

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Corporate and Social Responsibility (Continued)

• Our Health and Safety Committee meets four times a year allowing every employee the opportunity to raise any safety concerns through their nominated representative. • The Health and Safety team has input into all our new and refitted stores from the initial design through to opening. The team conducts its own audit programme to ensure the highest safety standards during the construction phase of all our shop-fit projects. • The Health and Safety team regularly review the management processes we have in place, with the aim of maintaining our high standards, whilst adapting to business and legislative changes. • A report is produced on a monthly basis to ensure that the Board is kept regularly informed on the Group’s health and safety performance. • Targets are set to enable measurement of performance. During the year we have seen positive improvements in these areas demonstrating the further development of a positive safety culture within the organisation including: - Reportable employee accident numbers remained constant following a reduction of 15% in the prior year. - Local authority inspection numbers decreased by 33%. - Fire officer inspections numbers decreased by 9%. - Enforcement action remained constant. - Area Manager health and safety performance remained constant.

Environment The Group recognises that it has a responsibility to manage the impact that its businesses have on the environment and are committed to carrying out its activities with due consideration for the potential environmental impact both now and in the future. We continue to comply with the UK Government’s carbon reduction commitment and have the following as the key areas of focus: • Ensuring efficient use of energy and other materials. • Maximising the amount of waste which is recycled. • Ensuring compliance with relevant legislation and codes of best practice.

Energy Basic Principals The Group’s core business is Retail and it is the Group’s aim to give customers an enjoyable retail experience with goods presented attractively in an environment that is both well-lit and has a pleasant ambient temperature. However, the Group accepts that all the businesses within it must be responsible in their energy usage and associated carbon emissions. This policy applies in all territories.

Carbon Management Programme The Group maintains a Carbon Management Programme (‘CMP’) which is sponsored by the Chief Financial Officer and is reviewed regularly. The objectives of this programme are: Objective Action & Progress 1. Understand the drivers and timing of usage by continued investment in energy This has now been achieved in over 531 of the Group’s sites with ongoing rollout planned ‘smart’ meters. in remaining sites. Combined with the stores where accurate and timely usage data is already received from mandatory half hourly meters, this means that in excess of 96% of the UK and Republic of Ireland electricity consumption and 72% of gas consumption is automatically measured every 30 minutes. 2. Reduce energy usage in non-trading periods. In the period to 31 January 2015, the Group has invested in Building Management Systems in 150 of its highest energy consuming stores in the UK. The project covers all fascias and is delivering average energy savings of 20% and a payback in less than 12 months. This technology is now fitted in all new stores as standard with further retrofits scheduled for 2015. 3. Reduce energy usage through investment in lighting technology. Working with our preferred lighting suppliers, we have improved the design of the 23 Watt LED lamps, which are used as standard in all new shopfits, delivering an 11% improvement in power efficiency compared to the previous design. Our standard retail LED lamps now use approximately 60% less electricity compared to the 70 Watt conventional lamps which were used as standard in 2010. 4. Reduce energy usage through staff awareness and training. Retail staff have a key role to play in the execution of the CMP. All new managers receive training in energy management as part of their wider training programme. 5. Purchase energy competitively from sustainable sources wherever possible. The Group has placed new supply contracts in the UK (except Northern Ireland) and renewed with Airtricity (whole island of Ireland) in 2014. Both contracts are to supply the Group’s core businesses with 100% of its electricity requirement from either renewable or other sustainable sources. Newly acquired businesses are migrated to these contracts when possible. 6. Ensure all business activities are aware of their impact on energy consumption. A multi-disciplined approach to the CMP is adopted with considerable focus also given to reducing usage in the Group’s warehouses and offices. 7. Ensure that the CMP applies to all businesses in all territories. The CMP applies to all business in the Group. We work closely with the local management after acquisition to identify gaps and implement group strategies.

57 140 of 150 Annual Report & Accounts 2015

Corporate and Social Responsibility (Continued)

KPIs Objectives For The Period To January 2016 The Group is committed to using and subsequently reporting on The Group is committed to investing in the necessary resources appropriate KPIs with regards to energy usage. Accordingly, the to help achieve its targets on reducing carbon emissions, with Group can report the following which have been calculated the following works planned for the year to 30 January 2016: based on the GHG Protocol Corporate Standard using emissions • Continue to expand the reach of the CMP by working with factors from UK government conversion factor guidance for the newly acquired businesses the year reported. The emissions reported correspond with our • Retrofit further stores with the 23 Watt LEDs for retail lighting financial year and reflect emissions from the leased and thereby further reducing energy consumption and heat controlled assets for which the Group is responsible. gain in the retail environment Emissions are predominately from electricity use and delivery vehicle fuel consumption for our UK operations. Emissions from • Further investment in the use of building management systems the Group’s overseas operations are low relative to UK activities. to allow remote monitoring and control of building services • Review energy usage and practices at the main warehouse 2014/15 2013/14 in Kingsway, Rochdale Tonnes CO2 Tonnes CO2 Global GHG emissions from: Equivalent Equivalent • Conduct investment grade energy surveys across the property portfolio which go beyond our ESOS obligations Combustion of fuels & operation of facilities (i) 6,150 6,724 Purchased electricity, heat, stream & cooling 34,564 33,216 Interaction with Pentland Group Plc Under the current rules of the statutory Carbon Reduction Commitment Energy Efficiency scheme (‘CRC’), the Group’s Intensity measurement (ii) submission to the UK Environment Agency is aggregated with Emissions reported above normalised to that of Pentland Group Plc who is the Group’s ultimate holding per £m revenue 29 33 company (see note 35). The Group continues to work closely with Pentland Group Plc on ensuring an efficient process with (i) Excludes facility F-Gas emissions regards to the emissions trading scheme which was introduced (ii) Like for like revenues for businesses that have contributed in April 2010, as part of the CRC. full years both years Recycling The following businesses are excluded from the data above as Wherever possible, cardboard (the major packaging their contribution is not considered material at this time: constituent) is taken back to the Group’s distribution centres. • JD Sports Fashion GmbH The cardboard is then baled and passed to recycling businesses for reprocessing. During the year, the amount of cardboard • Kooga Rugby Limited recycled increased further to 1,322 tonnes (2014: 993 tonnes). • Mainline Menswear Limited The Group has expanded its use of the Dry Mixed Recycling • Source Lab Limited (‘DMR’) scheme to all pre-existing stores and businesses in the • Tiso Group Limited UK, Ireland and The Netherlands to divert as much waste as • JD Sports Fashion SRL possible away from landfill. The scheme will be rolled out to Whilst it is not mandatory, the Group remains committed to other newly acquired businesses as soon as this is possible. presenting data with regards to energy usage and carbon In the period to 31 January 2015 we recycled 92% (2014: 89%) footprint on a ‘like for like’ basis in respect of those locations of our DMR waste with the remainder being used as an in the Group’s core operations in the UK and Republic of energy-from-waste (EfW) material. Ireland that have been present for the full year in both years: Our Kingsway Distribution Facility continues to be a zero waste to landfill site. % In addition to the DMR scheme, there are four other main 2015 2014 Change elements to our recycling strategy: Energy Usage – Electricity (MWh) 56,080 58,254 • Confidential paper waste is shredded on collection by a Energy Usage – Natural Gas (MWh) 2,474 2,809 recycling business. This business provides a ‘Certificate Total Energy Use (MWh) 58,554 61,063 of Environmental Accomplishment’ which states that the shredded paper, which was collected in the year, was the Carbon Footprint (Tonnes CO2) 28,232 29,370 -4% equivalent of 2,862 trees (2014: 2,884 trees) • Photocopier and printer toners (laser and ink) are collected and recycled for charity by Environmental Business Products Limited • Food waste is separated where possible and reused in the production of compost

58 141 of 150 Strategic Report

Corporate and Social Responsibility (Continued)

Plastic Bags to the ETI Base Code standard. Asia Inspections is a global Approximately 35% of the bags issued by the Group’s like for like quality and compliance solutions provider which performs businesses are high quality drawstring duffle bags, which are factory audits. In the year to 31 January 2015, 60% of the generally reused by customers many times. However, the Group current supplier base was audited with the results reported to is aware of the environmental impact of plastic bags and has the Group Sourcing and Supply Chain Manager. Our Supply sought to minimise any impact through the following measures: base has been reduced in this period by 40% as the Group amalgamates its sourcing strategy. • The bags are made from 33% recycled material Due to the diverse nature and scope of the supply chain, • The bags contain an oxo-biodegradable additive, it is not always possible to visit all of the factories directly. which means that they degrade totally over a relatively Where instances of non-compliance are identified from the short life span risk assessment forms/and or audits and the supplier cannot The use of this material has also been adopted in an additional be visited, they are required to provide evidence of corrective 60% of the Group’s plastic bags handed out to customers. action and subsequently re-graded against the initial report. The Group uses paper-based bags rather than plastic bags in its These actions will be verified directly by the Group’s Compliance stores in the Republic of Ireland and we are also fully compliant team as soon as practically possible on a future visit. with the carrier bag charge scheme introduced by the devolved All suppliers are contractually obliged to comply with the administrations in Wales, Scotland and Northern Ireland. Group’s Conditions of Supply which includes a specific policy Human Rights on ‘Employment Standards for Suppliers’. The Group endorses the principles set out in the United Nations Our Communities Universal Declaration of Human Rights and the International The Group seeks to be involved in the community where it Labour Organisation’s Declaration on Fundamental Principles can make an appropriate contribution from its resources and and Rights at Work which seek to ensure safe and fair working skills base. conditions on a global scale. Our suppliers are selected upon and contractually committed to the Group on the basis of their In 2011 we undertook a three year commitment to The Christie adherence to these principles. Hospital to help raise £500,000 for the teenage cancer unit. The fundraising events have included Team JD running the BUPA Ethical Sourcing Great Manchester Run and our successful charity balls. In 2014 The Group seeks to provide its customers with high quality we exceeded our nominated charity target and raised a total and value merchandise from suppliers who can demonstrate of £518,000. The funds raised through the partnership has compliance with internationally accepted core labour and helped The Christie to build and develop the UK’s premier ethical standards throughout their supply chain. These standards young oncology unit, helping to fund vital research into new are based upon the provisions of the Ethical Trading Initiative treatments, provide equipment, counseling, activities for the (‘ETI’) Base Code and specifically cover areas such as wages, young patients and support for their families. working hours, health and safety and the right to freedom of Other examples of community engagement include: association. • We sponsor a Special Needs school in Coimbatore, India The Group requires all of its suppliers, both existing and new, which accommodates 30 children who have Cerebral Palsy, to formally commit to implementing the provisions of the ETI Down’s syndrome, deafness and autism. We have paid for Base Code throughout their supply chains. Prior to any orders one year’s education for each child. being placed, all new suppliers are required to complete the • In addition we sent each child at the school a Christmas Group’s risk assessment form to indicate their degree of present box which was delivered to them on Christmas Eve. compliance to the ETI Base Code. All existing suppliers are also Donations from within the Head Office also funded four required to conduct this assessment on an annual basis. These cartons of toys to be sent to an orphanage in the same area. forms are reviewed by the Group’s Compliance team and any areas of concern with regard to potential non-compliance are • We made a donation to The Marina Dalglish Appeal of investigated when visiting the factories concerned. These reports £4,000 to improve cancer treatment facilities in Liverpool. are shared by the Group in a central base and those travelling • We made donations of £8,000 to Cancer Research UK and are encouraged to take all documentation from the base with £500 to Children with Cancer. them when visiting the factories so that follow up can be done on a continual basis. The Group has engaged Asia Inspections to complete an audit and compliance programme of the Group’s current suppliers

Brian Small Chief Financial Officer 15 April 2015

59 142 of 150 Annual Report & Accounts 2015

The Board

Peter Cowgill Executive Chairman and Chairman of the Nomination Committee - Aged 62 Peter was appointed Executive Chairman in March 2004. He was previously Finance Director of the Group until his resignation in June 2001. He is a Non-Executive Chairman of United Carpets Plc and also held the position of Non- Executive Chairman of MBL Group Plc until June 2014.

Brian Small Chief Financial Officer - Aged 58 Brian was appointed Chief Financial Officer in January 2004. Immediately prior to his appointment he was Operations Finance Director at Intercare Group Plc and has also been Finance Director of a number of other companies. He qualified as an accountant with Price Waterhouse in 1981.

Andrew Leslie Non-Executive Director, Chairman of the Remuneration Committee and Member of the Audit and Nomination Committees - Aged 68 Andrew was appointed to the Board in May 2010. He has over 40 years of experience in the retail, footwear and apparel sectors. He was an Executive Board Director of Pentland Brands Plc, from which he retired in 2008. During his career, Andrew also held a number of senior positions with British Shoe Corporation, The Burton Group Plc and Timpson Shoes Limited.

Martin Davies Non-Executive Director, Chairman of the Audit Committee and Member of the Remuneration and Nomination Committees - Aged 55 Martin was appointed to the Board in October 2012. Martin also holds the position of Chairman of Sentric Music Limited. He was previously Group Chief Executive of Holidaybreak Plc from 2010 until its sale to Cox and Kings Limited in 2011. He joined the Board of Holidaybreak Plc in 2007 when it acquired PGL where he had been Chief Executive. He left Holidaybreak Plc in 2012. Previously, he has had roles at Allied Breweries, Kingfisher and Woolworths.

60 143 of 150 Governance

Directors’ Report

The Directors present their Annual Report and the audited Restrictions on Transfer of Shares financial statements of JD Sports Fashion Plc (the ‘Company’) The restrictions on the transfer of shares in the Company are and its subsidiaries (together referred to as the ‘Group’) for the as follows: 52 week period ended 31 January 2015. The Board considers • The Board may, in absolute discretion, refuse to register any that the Annual Report and Accounts, taken as a whole, is fair, transfer of shares which are not fully paid up (but not so as balanced and understandable and provides the information to prevent dealings in listed shares from taking place), or necessary for shareholders to assess the Company’s position which is in favour of more than four persons jointly or which and performance, business model and strategy. is in relation to more than one class of share. Principal Activity • Certain restrictions may, from time to time, be imposed by The principal activity of the Group is the retail of branded sports laws and regulations (for example, insider trading laws). fashionwear and outdoor clothing and equipment. • Restrictions apply pursuant to the Listing Rules of the In accordance with the Companies Act 2006, a review of the Financial Services Authority whereby Directors and certain of business providing a comprehensive analysis of the main trends the Group’s employees require prior approval to deal in the and factors likely to affect the development, performance and Company’s shares. position of the business, including environmental, employee, The Company is not aware of any arrangement between its social, community and human rights issues, together with the shareholders that may result in restrictions on the transfer of Group’s Key Performance Indicators and a description of the shares and/or voting rights. principal risks and uncertainties facing the business is detailed in the Strategy Report on pages 47 to 59. Authority to Purchase Own Shares All the information set out in those sections is incorporated by A resolution was passed at the 2014 Annual General Meeting reference into, and is deemed to form part of, this report. giving Directors authority to buy back ordinary shares up to a maximum of 10% of the total issued ordinary share capital of The Corporate Governance Report (pages 63 to 66) and the the Company. As at the date of this report no shares have been Directors’ Remuneration Report (pages 67 to 75) are incorporated purchased under this authority. by reference into, and are deemed to form part of, this report. Substantial Interests in Share Capital Share Capital As at 31 January 2015 the Company has been advised of the As at 1 February 2014, the Company’s issued share capital following significant holdings of voting rights in its ordinary share was £2,433,083, comprising 48,661,658 ordinary shares of 5p capital pursuant to the Disclosure and Transparency Rules of each. However, following a reorganisation of the Company’s the Financial Conduct Authority (‘DTRs’): share capital as approved by the shareholders at the 2014 Annual General Meeting (AGM) held on 26 June 2014, each Number of 5p ordinary share was subdivided into 4 ordinary shares of ordinary shares/ % of Ordinary share 1.25p each. The issued share capital following the 2014 AGM voting rights held capital was £2,433,083, comprising 194,646,632 ordinary shares of Pentland Group Plc 111,854,888 57.47 1.25p each. The new 1.25p ordinary shares were admitted to Sports World International Ltd 22,301,020 11.46 the Official List of the UK Listing Authority and to trading on the London Stock Exchange on 30 June 2014. Aberforth Partners 18,367,614 9.44 As at 31 January 2015 the Company’s issued share capital is Fidelity Management and Research LLC 10,077,300 5.18 £2,433,083, comprising 194,646,632 ordinary shares of 1.25p each. The Company has not been notified of any significant changes in interests pursuant to the DTRs between 31 January 2015 and Shareholder and Voting Rights the date of this report. All members who hold ordinary shares are entitled to attend and vote at the Company’s Annual General Meeting. On a Relationship Agreement show of hands at a general meeting, every member present in In accordance with LR 9.2.2AR (2) (a), the Company has entered person or by proxy shall have one vote and, on a poll, every into a written and legally binding relationship agreement with member present in person or by proxy shall have one vote for its controlling shareholder Pentland Group Plc. So far as the every ordinary share they hold. Subject to relevant statutory Company is aware, the independence provisions included provisions and the Company’s Articles of Association, holders within the relationship agreement have been complied with of ordinary shares are entitled to a dividend where declared during the period since the agreement has been in force. or paid out of profits available for such purposes.

61 144 of 150 Annual Report & Accounts 2015

Directors’ Report (Continued)

Directors or disability. Recruitment, promotion and the availability of The names and roles of the current Directors together with training are based on the suitability of any applicant for the brief biographical details are given on page 60. The Directors job and full and fair consideration is always given to disabled are responsible for the management of the business of the persons in such circumstances. Should an employee become Company and, subject to law and the Company’s Articles of disabled during his or her employment by the Group, every Association (‘Articles’), the Directors may exercise all of the effort is made to continue employment and training within their powers of the Company and may delegate their power and existing capacity wherever practicable, or failing that, in some discretion to committees. alternative suitable capacity. The number of Directors at any one point in time shall not be Auditor less than two. KPMG LLP have indicated their willingness to continue in The Articles give the Directors power to appoint and replace office as auditor of the Company. A resolution proposing their Directors. Any Director so appointed shall hold office only until re-appointment will be proposed to shareholders at the the dissolution of the first AGM of the Company following forthcoming AGM. appointment unless they are re-elected during such meeting. Disclosure of Information to the Auditor The Articles require that, at each AGM of the Company, any Director who was elected or last re-elected at or before the Each person who is a Director at the date of approval of this AGM held in the third calendar year before the then current report confirms that: calendar year must retire by rotation and such further Directors • So far as he is aware, there is no relevant audit information must retire by rotation so that in total not less than one third of of which the Company’s auditor is unaware; and the Directors retire by rotation each year. A retiring Director is • Each Director has taken all the steps that he ought to have eligible for re-election. taken as a Director to make himself aware of any relevant However in accordance with the UK Corporate Governance audit information and to establish that the Company’s Code the Board has determined that all Directors will stand for auditor is aware of that information. re-election at the 2015 AGM. Going Concern Amendment of the Company’s Articles of Association After making enquiries, the Directors have a reasonable The Company’s Articles of Association may only be amended expectation that the Company, and the Group as a whole, by a special resolution at a general meeting of shareholders. has adequate resources to continue in operational existence for the foreseeable future. For this reason, the financial Change of Control – Significant Agreements statements have been prepared on a going concern basis. In the event of a change of control of the Company, the Company and the lenders of the £155 million bank syndicated facility shall Annual General Meeting (AGM) enter into an agreement to determine how to continue the facility. The Company’s AGM will be held at 1pm on 17 June 2015 at If no agreement is reached within 20 business days of the date Edinburgh House, Hollinsbrook Way, Pilsworth, Bury, Lancashire, of change in control, the lenders may, by giving not less than BL9 8RR. The notice of this year’s AGM is included in a separate 10 business days’ notice to the Company, cancel the facility and circular to shareholders and will be sent out at least 20 working declare all outstanding loans, together with accrued interest and days before the meeting. This notice will be available to view all other amounts accrued immediately due and payable. under the ‘Investors’ section of the Company’s website, www.jdplc.com/investor-relations. Contractual Arrangements Essential to the Business of the Group The Directors consider that each of the proposed resolutions to be presented at the AGM is in the best interests of the Company The Board considers that continuing supply from Nike and and its shareholders and employees as a whole and most adidas, being the main suppliers of third party branded sporting likely to promote the success of the Company for the benefit products, to the Group’s core sports fashion retail operation of its shareholders as a whole. The Directors unanimously is essential to the business of the Group. recommend that shareholders vote in favour of each of the Employees proposed resolutions, as the Directors intend to do in respect of their own shareholdings. The Group communicates with its employees through team briefs and via the Company’s intranet and notice boards. Views of employees are sought on matters of common concern. Priority By order of the Board is given to ensuring that employees are aware of all significant matters affecting the Group’s performance and of significant organisational changes. The Group’s employee remuneration strategy is set out in the Remuneration Report on pages 67 to 75. The Group is committed to promote equal opportunities in Brian Small employment regardless of employees’ or potential employees’ Chief Financial Officer sex, marital status, creed, colour, race, religion, ethnic origin 15 April 2015

62 145 of 150

JD Sports Guardian Article

Data Provided by Historical Equity Pricing Data supplied by

146 of 150 The Guardian online 14 January 2016

Booming sales of trainers have delivered a bumper Christmas for JD Sports Fashion, which said it would beat City forecasts for annual profits.

JD’s performance is in stark contrast with bigger rival Sports Direct, founded by billionaire Mike Ashley, which warned on profits last week, blaming the mild winter and tough trade on the high street for worse-than-expected sales.

News of JD’s hefty profit upgrade prompted analysts to raise their target price on the stock. The shares leapt as much as 8% to an all-time high of £11.40.

Like-for-like sales at its UK and European stores rose 10.6% over the Christmas period. The retailer is confident of beating market expectations for annual profit before tax and one-off items of £136m by up to 10%.

The Investec analyst Kate Calvert talked of a “champion’s performance”. “JD appears to be in a sweet spot as several years of store and infrastructure investment is starting to bear fruit. We believe there is more to come, seeing an exciting European roll-out opportunity and attractive UK growth prospects,” she said.

Most of JD’s 850 shops are in the UK, but it has been opening more stores in the Netherlands, Spain, France and Germany.

There has been strong demand at JD for trainers made by Nike and other leading brands, as well as for women’s sportswear, which pushed first-half profits up 80% to a record £46.6m.

The retailer has nurtured close links with Adidas and Nike, allowing access to the latest ranges that have made it popular with younger customers. JD also stocks brands such as Giorgio Armani’s EA7 range, which rivals do not.

147 of 150 Rebecca Marks, of retail consultants Conlumino, injected a note of caution: “Even JD’s resilience to competition may not be able to deflect the ongoing impact of currency issues as it looks to increase its European store numbers, and continues to faces challenges with its outdoor arm.”

JD is trying to turn around its loss-making outdoorswear business, which trades under the Millets, Blacks and Ultimate Outdoors brands.

148 of 150

Sample Share Prices

Data Provided by Historical Equity Pricing Data supplied by

149 of 150 Sample share prices:

Sports JD Direct

Pence Pence

24 March 348 1,106

31 December 577 1,041

30 November 731 971

30 October 697 966

30 September 757 955

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