Annual Report 2015 Inspiring You to Live Your Passion

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Annual Report 2015 Inspiring You to Live Your Passion ANNUAL REPORT 2015 Super Retail Group Limited 1 INSPIRING YOU TO LIVE YOUR ANNUALPASSION REPORT 2015 PERFORMANCE TREND GRAPHS Reported Sales ($m) Reported Total Segment EBIT ($m)* 182.6 2238.7 2112.1 172.3 170.2 2020.0 140.7 1654.1 1092.3 87.5 938.0 828.8 65.8 715.4 55.1 624.8 45.7 38.1 JUN 07 JUN 08 JUN 09 JUN 10 JUN 11 JUN 12 JUN 13 JUN 14 JUN 15 JUN 07 JUN 08 JUN 09 JUN 10 JUN 11 JUN 12 JUN 13 JUN 14 JUN 15 * excludes goodwill impairment charge in 2010 Reported EPS (c)* 55.1 Reported Post Tax ROC (%)* 52.3 16.8 17.3 46.4 49.4 15.4 15.9 40.9 13.9 14.1 12.6 11.3 32.1 28.1 10.6 22.6 19.5 JUN 07 JUN 08 JUN 09 JUN 10 JUN 11 JUN 12 JUN 13 JUN 14# JUN 15# JUN 07 JUN 08 JUN 09 JUN 10 JUN 11 JUN 12 JUN 13 JUN 14# JUN 15# * historical EPS adjusted to take into account the bonus element in 2011 entitlement offer. * return calculation adjusted for goodwill impairment, acquisition costs and restructuring provisions. # June 2015 continuing operations only; June 2014 not adjusted for discontinued operations. # June 2015 continuing operations only; June 2014 not adjusted for discontinued operations. 382.6 Dividend (c) Net Debt ($m) 55.1 378.9 182.655.140.0 40.0 182.6 38.0 341.0 329.3 32.0 29.0 21.5 18.0 117.8 114.7 13.0 93.5 10.5 78.8 73.5 JUN 07 JUN 08 JUN 09 JUN 10 JUN 11 JUN 12 JUN 13 JUN 14 JUN 15 JUN 07 JUN 08 JUN 09 JUN 10 JUN 11 JUN 12 JUN 13 JUN 14 JUN 15 Gearing Ratio (%) Reported Post Tax ROE (%)* 46.7 22.0 43.3 42.3 19.8 19.5 18.8 18.8 19.4 33.1 33.5 16.1 31.0 33.1 14.5 13.9 22.6 19.5 JUN 07 JUN 08 JUN 09 JUN 10 JUN 11 JUN 12 JUN 13 JUN 14 JUN 15 JUN 07 JUN 08 JUN 09 JUN 10 JUN 11 JUN 12 JUN 13 JUN 14# JUN 15# * return calculation adjusted for goodwill impairment, acquisition costs and restructuring provisions. # June 2015 continuing operations only; June 2014 not adjusted for discontinued operations. Annual Total Shareholder Return (%) Value of $1,000 invested on 30 June 2006 182 $16,000 $14,000 $12,000 $10,000 76 69 53 $8,000 37 $6,000 16 15 -42 -26 $4,000 $2,000 JUN 07 JUN 08 JUN 09 JUN 10 JUN 11 JUN 12 JUN 13 JUN 14 JUN 15 0 JUN 06 JUN 07 JUN 08 JUN 09 JUN 10 JUN 11 JUN 12 JUN 13 JUN 14 JUN 15 2 Super Retail Group Limited SUPER RETAIL GROUP LIMITED S&P/ASX 200 INDEX ANNUAL REPORT 2015 CONTENTS Chairman and Group Managing Director’s Report 2 Diversity Report 5 Directors’ Report 7 Consolidated Statement of Comprehensive Income 34 Consolidated Balance Sheet 35 Consolidated Statement of Changes in Equity 36 Consolidated Statement of Cash Flows 37 Notes to the Consolidated Financial Statements 38 iect ecn Independent Auditor’s Report 84 Shehe Inmn Corporate Directory 89 These financial statements are the consolidated financial statements of the consolidated entity consisting of Super Retail Group Limited and its subsidiaries. The financial report is presented in the Australian currency. Super Retail Group Limited is a company limited by shares, incorporated and domiciled in Australia. Its principal registered office and principal place of business is 751 Gympie Road, Lawnton, Queensland, 4501. A description of the nature of the consolidated entity’s operations and its principal activities is included in the Directors’ Report on pages 7 to 32. The financial report was authorised for issue by the Directors on 20 August 2015. The Directors have the power to amend and reissue the financial report. Through the use of the internet, we have ensured that our corporate reporting is timely, complete, and available globally at minimum cost to the Company. All press releases, financial reports and other information are available on our Investor’s and Media page on our website: www.superretailgroup.com.au SuperSuper Retail Retail Group Group Limited Limited 13 ANNUALANNUAL REPORT REPORT 2015 2015 CHAIRMAN AND GROUP MANAGING DIRECTOR’S REPORT Our Fellow Shareholders, Welcome to the 2015 Annual Report of Super Retail Group. The past year has been another significant one in the long term development of the Group. While we have generally been pleased with the performance of our larger businesses, a number of significant restructuring decisions have been made to address the underperformance of our smaller businesses. We have also continued to make good progress with the investment in the systems and infrastructure needed to build our multi-channel retail capabilities. We completed the development of our distribution centre network and now have the capacity required to support the future growth of the Group. The restructuring costs and strategic investments have resulted in a fall in net profit in the current year. We believe these investments set us on the path to deliver strong profit growth in the years ahead. At the same time our strong cash flow performance has enabled us to continue to invest in the business and allowed us to sustain dividend levels despite the fall in net profit. The progress made has been recognised by the investment market and our share price, which started the 2014/15 year at $8.46, closed for the year at $9.40. We are focused on delivering strong earnings growth and improvement in return on capital to continue to drive shareholder returns. Operating and Financial Performance The Group’s overall result reflected solid performance across the Group’s larger businesses, weaker performance and restructuring costs in the Group’s smaller businesses and the investment being made to develop the multi-channel supply chain and systems capabilities required to support the Group’s strategy. The Auto Retailing division has again delivered solid growth despite the challenge of weaker retail conditions in the business home state of Queensland and delivered a further uplift in gross margin despite the lower Australian dollar increasing purchasing costs. In the Leisure Retailing division, the BCF business was also impacted by the weaker Queensland economy, but pleasingly delivered solid like for like sales growth in the second half of the year as the sales cannibalisation experienced in the 2014 calendar year was largely eliminated. In the Sports Retailing division, the combined Rebel and Amart Sports businesses generated both strong like for like sales and EBIT growth. Overall divisional EBIT growth was constrained by the disappointing performance of the Workout World business and the division’s share of losses incurred by the Infinite Retail business. The division assumed control of the Infinite Retail 2 Super Retail Group Limited ANNUAL REPORT 2015 CHAIRMAN AND GROUP MANAGING CHAIRMAN AND GROUP MANAGING DIRECTOR’S REPORT DIRECTOR’S REPORT (continued) business during the year and has started to integrate the business The Group has also maintained its focus on a number of more closely, recognising additional costs and adjustments environmental initiatives including reducing packaging and which have resulted in a share of losses of $3.6 million. power consumption and increasing recycling. The Group has now been recognised by the Australian Packaging Covenant in A review of our underperforming businesses was completed both their 2013 and 2014 annual report ratings for being a high during the year and a decision was made that the most value performer signatory. creating options were to restructure the Ray’s Outdoors business, integrate the Workout World business within Rebel Some of the Group’s achievements are summarised below: and close the Fishing Camping Outdoors (FCO) business. Year on Restructuring costs of $12.8 million associated with Ray’s Sustainability Initiative 2013 2014 2015 Year Outdoors and Workout World were incurred during the year and Increase Australia Waste the FCO business, which has been classified as a discontinued 51.0% 53.9% 53.2% (0.7%) Recycling operation, generated a loss of $16.2 million. These restructures New Zealand Waste provide the platform for stronger profit growth over the next 49.0% 54.6% 57.3% 2.7% Recycling few years. Battery Recycling (Units) 30,844 35,871 35,929 58 Good progress was made in our strategic development programs which are focused on building the capabilities to Oil Recycling (Litres) n/a(1) 81,600 233,200 151,600 operate successfully as a multi-channel retailer. The three year programme to build a more efficient distribution centre network (1) New initiative no prior comparative data was completed with the opening of our Brendale distribution centre in October 2014. The Group is now focused on driving Group Waste Recycling - The Group is a signatory to the cost efficiencies from this new network. Australian Packaging Covenant (APC) and has achieved its annual waste recycling targets as per the agreed APC action We have also continued to invest in our store development and plan. The target for the Australian Waste Recycling for 2015 was refurbishment programs and the technology and systems to 52.5%, recognising that time was required to embed recycling support our strategy. During the year, the Group invested circa practices in the new distribution centres. $72 million in capital expenditure and $18 million in operating Battery Recycling - Supercheap Auto has actively marketed the costs on our development programs.
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