Media Release

For immediate release – Tuesday 24 March, 2009

HALF-YEAR RESULTS FOR THE PERIOD ENDED JANUARY 2009 32 MONTHS INTO THE 50 MONTH TURNAROUND PHASE MYER TURNAROUND ON TRACK

FINANCIALS TO 24 JANUARY 2009: • EARNINGS BEFORE INTEREST AND TAX UP 6.6% TO $161 MIL (TOP OF H1 FY09 GUIDANCE), EQUATING TO 9.15 CENTS IN THE DOLLAR, UP FROM 8.27 CENTS IN H1 FY08 • NET PROFIT AFTER TAX UP 5.3% TO $83 MIL • SALES ABOVE EXPECTATIONS, WITH TOTAL SALES DOWN 3.7% TO $1.76 BIL, LIKE-FOR-LIKE STORE SALES DOWN 3.7% • GAINED MARKET SHARE OVER THE 12 MONTH PERIOD IN TOUGH ECONOMIC CLIMATE WITH CUSTOMERS RESPONDING WELL TO INCREASED TARGETED PROMOTIONAL ACTIVITY AND BETTER IN-STORE EXECUTION • GROSS MARGIN 52 BASIS POINTS HIGHER, CASH COST OF DOING BUSINESS 83 BASIS POINTS LOWER • FINISHED PERIOD WITH $224 MIL CASH AND CLEAN INVENTORY POSITION • NET DEBT STEADY AT $652 MIL, DOWN FROM $979 MIL AT ACQUISITION (EQUAL TO 2.2 TIMES ROLLING 12 MONTH EBITDA) WITH NO REPAYMENTS DUE UNTIL JUNE 2012 • BASIC EARNINGS PER SHARE OF 18.2 CENTS, UP FROM 17.6 CENTS IN H1 FY08 Note: All previous period numbers have been normalised to eliminate the impact of the sale and lease back of Melbourne property

TURNAROUND PHASE INITIATIVES: • 101 BUSINESS IMPROVEMENT PROJECTS EFFECTIVELY COMPLETE • FURTHER GROWTH AND IMPROVEMENTS TO MYER ONE LOYALTY PROGRAM WITH MORE THAN 2.6 MIL MEMBERS, ACCOUNTING FOR OVER 60% OF SALES (UP FROM 43% AT ACQUISITION) • NEW POINT-OF-SALE AND CLOSED-CIRCUIT TV SYSTEMS PLANNED FOR FULL DELIVERY BEFORE THE END OF TURNAROUND PHASE (WITHIN 16 MONTHS) • COMPLETED REFURBISHMENT OF FLAGSHIP SYDNEY STORE TO INTERNATIONAL CLASS STANDARD • COMPLETED REFURBISHMENTS OF DONCASTER AND GEELONG WITH CASTLE HILL AND BLACKTOWN COMMENCED • FLAGSHIP MELBOURNE STORE AND NEW DOCKLANDS SUPPORT CENTRE TO BE PROGRESSIVELY DELIVERED OVER NEXT 16 MONTHS

GROWTH PHASE PREPARATION: • NINE NEW LEASES SIGNED OVER THE LAST 12 MONTHS TO TAKE CHAIN FROM 65 TO 74 STORES WITH FURTHER SIX LEASES UNDER NEGOTIATION • NEW STORE AT TOP RYDE IN NSW UNDER CONSTRUCTION

OUTLOOK: • TOUGH RETAIL MARKET CONDITIONS EXPECTED TO CONTINUE THROUGHOUT YEAR, FY09 PROFIT LIKELY TO BE SIMILAR TO FY08 (GUIDANCE MAINTAINED) • ON TRACK TO DELIVER FULL YEAR EBIT OF 7 CENTS IN DOLLAR BY JULY 2010 (END OF TURNAROUND PHASE AND BEGINNING OF GROWTH PHASE) – GUIDANCE MAINTAINED Page 1 of 10 Myer Pty Limited. ABN 83 004 143 239

Bernie Brookes, Chief Executive Officer said:

“The work undertaken in the first 34 months of the 50 month Turnaround Phase has given us a more flexible platform to manage the business in a difficult economic environment and we are pleased with our sales performance against this backdrop. Our strong cost control, variabilised cost base, quicker responses and the cemented changes in buying and ranging, combined with improved store execution and targeted advertising, have enabled us to stay ahead of the curve and deliver increased profits, despite a fall in sales.”

Bill Wavish, Executive Chairman said:

"Bernie and I have a strong point of view from our previous experience in retailing that balance sheet control is as important as profit control in a ‘double loop’. In times such as this, such an approach pays even greater dividends. Net debt has fallen from $979 million at acquisition to $652 million at this half- year. Inventory is clean and down from $535 million at acquisition to $354 million, and $224 million cash on deposit affords comfort and flexibility.”

Bernie Brookes added:

“We continue to improve our brand architecture and refine our brand mix to reflect the needs of our customers. Last season we introduced over 20 new leading Australian and international designers and our exclusive to Myer brands like Hi There by Karen Walker and Wayne by Wayne Cooper are performing well. We are introducing Australian first concept shops for Ben Sherman, along with brands such as Armani Jeans and international icon Vivienne Westwood.

“Our MYER one customer loyalty program now has over 2.6 million members with an expanded range of benefits being introduced including travel offers, wine club, VIP tickets to Myer events and more selective offers, gifts and vouchers. The loyalty program provides us with a fantastic platform to market directly to customers and target their specific needs.

“Customers have responded very well to the relaunch of our Sydney flagship store which has been refurbished to an international class standard. The store boasts the best cosmetics hall in the country with installations including Mecca Cosmetica, Bobbi Brown, Elemis, Chanel Colour Studio and the first Benefit Brow Bar in Australia.”

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Myer Pty Limited. ABN 83 004 143 239 Summary Financials

Profit and Loss H1 FY09 H1 FY08 % Change $m $m Total Sales 1,762 1,829 (3.7%) - Wholesale 1,541 1,632 - Concession 221 197 Operating Gross Profit 715 732 (2.4%) Operating Gross Profit/Sales 40.57% 40.05% Cash Cost of Doing Business (520) (555) (6.3%) Cash Cost of Doing Business/Sales 29.50% 30.33% EBITDA 195 178 +9.6% Depreciation (34) (27) EBIT 161 151 +6.6% EBIT/Sales 9.15% 8.27% Interest (43) (37) Net Profit Before Tax 118 114 +3.1% Tax (35) (35) Net Profit After Tax 83 79 +5.3%

Balance Sheet H1 FY09 H1 FY08 $m $m Inventory 354 366 Other Assets 158 138 Less Creditors (504) (476) Less Other Liabilities (274) (239) Net Trading Investment (267) (211) Property 29 29 Fixed Assets 337 247 Tangible Funds Employed 99 65 Intangibles 900 869 Total Funds Employed 999 934

Debt 628 623 Less Cash (224) (226) Convertible Equity Note 247 246 Net Debt 652 643 Equity 347 291 Total Investment 999 934

Other Statistics and Financial Ratios H1 FY09 H1 FY08 Covenant Basic Earnings Per Share 18.2c 17.6c Diluted Earnings Per Share 17.6c 16.8c Shares on issue 457.7m 452.7m Capital Expenditure $57m $41m Return on Total Funds Employed¹ 23.0% 22.5% Return on Equity¹ 30.9% 29.6% Senior Interest Cover¹ 6.63x 7.48x more than 3.15x Senior Debt to EBITDA ratio¹ 1.89x 1.98x less than 3.70x Debt Service Ratio¹ 1.78x 3.31x more than 1.00x ¹ Calculated on rolling 12-month basis H1FY08 normalised to eliminate impact of the sale of Melbourne property – Page 3 of 10 –

Myer Pty Limited. ABN 83 004 143 239 OVERVIEW

In June 2006 Myer embarked on a 50 month turnaround in the business, which involves an all encompassing re-engineering of our store operations, buying, IT and supply chain. Myer is today 34 months into the 50 month Turnaround Phase and underpinning these endeavours have been demonstrable advancements in our financial performance including profitability, cash flow, return on investment, and in particular our EBIT to sales margin.

SALES AND MARKET CONDITIONS

In H1 FY09 we continued the operational and financial improvements whilst “seeding” the early works to move toward our Growth Phase beyond July 2010.

The half-year was characterised by weak consumer sentiment and a downward spiral in equity markets. Lower interest rates on mortgages, some relief in petrol prices and the December stimulus package, did not alleviate the decline in consumer spending patterns, particularly in the discretionary areas.

Cosmetics, womenswear and accessories were strong, benefiting from our large and growing range of Australian and international brands and designers. Homeware and furniture categories did not perform as well, reflecting a consumer willing to delay larger discretionary and luxury purchases.

As consumer sentiment deteriorated, Myer’s strategy was to increase targeted promotional sales, improve store appearance and shift advertising to price points, which was rewarded with an improved second quarter. Sales declined 3.7% to $1.762 billion in the first half-year, with a drop of 4.8% in quarter one and 2.8% in quarter two as our strategy encouraged Christmas and Stocktake sales spending, aided to a degree by the Government stimulus. The business also benefited from an improved in-stock position and better in-store execution.

Like-for-like sales declined 3.7%, after taking into consideration four new stores and the refurbishment of our Geelong, Doncaster and flagship stores in Melbourne and Sydney.

Sales in Queensland, Western Australia and New South Wales were resilient with Victoria being much tougher. Specific stores in lower socio economic catchments continue to underperform the average.

GROSS MARGIN

The gross margin improved from 40.05% in H1 FY08 to 40.57%. The 52 basis point improvement was delivered as a result of better markdown control, improvements in buying and better supply terms which more than offset the change in mix towards concessions.

COSTS AND EFFICIENCY

Despite the challenging revenue environment, the cash cost of doing business as a percentage of sales fell to 29.50% in H1 FY09, down from 30.33% in H1 FY08 and 35.93% at acquisition. The 83 basis point reduction in costs for the period was a result of a wide range of initiatives including more efficient labour management, reduced operating costs and efficiency gains resulting from improvements in our supply chain, information technology and buying.

In anticipation of the downturn, we took action in the early part of last year to tighten our costs. Early planning enabled us to reduce some headcount through natural attrition and as such we have avoided large-scale redundancies. However, the severity of the downturn has regrettably necessitated making some 100 people redundant, representing less than 1% of the workforce, at a cost of $2.5 million after tax. This cost is incorporated in this result.

Myer’s newly built supply chain is world class on most benchmarking measures and there continue to be opportunities to make improvements to deliver greater efficiencies. We are benefiting from shorter

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Myer Pty Limited. ABN 83 004 143 239 transit lead times out of China, which are down from 42 days at acquisition to less than 24 days. We are also achieving significant improvements in our in-stock position.

Solid progress has been made in a number of initiatives aimed at driving greater efficiency across our buying practices. In collaboration with our suppliers, we have continued to focus on the delivery of floor ready merchandise and we have commenced work on a source-based security tagging process.

We continue to invest in information technology to underpin our drive for improved efficiency. MyMerch, our new merchandising system, is now embedded in the business. We are seeing benefits through improved stock allocation to stores based on criteria including sales rate, demographic, better stock tracking, forecasting and climatic traiting.

Work on replacing the 24 year old point-of-sale system is ongoing and due to be delivered by the end of the Turnaround Phase. We have commenced the rollout of our Closed Circuit Television (CCTV) system and are seeing positive results in the stores where it has been activated. As shrinkage tends to increase at times of less economic growth these enhancements are timely.

Our “Store of the Future” program, which is designed to significantly enhance efficiency in stores, was started last year. This program will streamline store back-office functions, improve store fit-out and design, and allocate space to reflect customer needs and new technologies.

The 101 Business Improvement Projects, initiated at the start of the Turnaround Phase, are now effectively complete.

With the primary objective of the Turnaround Phase being to improve efficiency and reduce costs, the majority of gains have now been delivered. Rigorous cost management remains a high priority and we will continue to align our resources with the trading environment.

PROFIT

EBIT EBIT % to Sales $161m $151m 9.15% 8.27%

$114m 6.36%

$58m 3.40%

H1 FY06 H1 FY07 H1 FY08 H1 FY09 H1 FY06 H1 FY07 H1 FY08 H1 FY09 Note: 1. EBIT % to sales is always higher in the first half of the year than in the full year because of the December peak trading period 2. All previous period numbers normalised to eliminate impact of the sale and lease back of Melbourne property

EBIT increased 6.6% to $161 million, due to the continued improvement in our return on sales that increased to 9.15 cents in the dollar, up from 8.27 cents in the dollar in H1 FY08.

Interest costs increased from $37 million in H1 FY08 to $43 million. Interest rates on 75% of our bank debt are fixed at an average rate of 6.7% until 2012 as part of the acquisition funding agreement. As such we do not anticipate significant reductions to our average interest rate to result from recent reductions in the base rate until 2012, although reducing net debt will benefit our interest cost.

Net profit before tax increased 3.1% to $118 million. Net profit after tax increased 5.3% to $83 million.

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Myer Pty Limited. ABN 83 004 143 239 BALANCE SHEET, CASHFLOW, CAPITAL EXPENDITURE AND FINANCIAL METRICS

Whilst tight inventory is always a high priority, it is ever more critical during an economic downturn. We finished the half-year with inventory of $354 million, down from $366 million in January 2008. Our ability to manage inventory at these levels reflects a cautious approach to buying, increased flexibility in our new supply chain and a very successful clearance period. The tight control has resulted in a strong position on aged stock.

Capital expenditure in the first half of the year was $57 million, up from $41 million in H1 FY08 and significantly higher than the level under previous ownership which averaged $34 million in the first half for the three years prior to acquisition. During the Turnaround Phase our capital expenditure program is funding investment in IT, a new Point-of-Sale system, brand presentation, refurbishments, a new support centre in the Docklands and new stores. Our capital investment program, coupled with the Turnaround Phase initiatives designed to deliver permanent positive change, will position the business strongly for the Growth Phase.

Net debt increased slightly to $652 million from $643 million in January 2008, following a significant reduction from $979 million at acquisition. All banking covenants are comfortably met and no debt repayments are due for 3 ½ years. We have $224 million cash on deposit and a $250 million committed revolving credit line was unused at the half-year end.

As profitability and cashflow have improved, Myer’s financial health measures and banking covenants are increasingly comfortable. The Senior Debt to EBITDA ratio improved to 1.89 times in H1 FY09 from 1.98 times at H1 FY08. The lower Debt Service ratio of 1.78 times reflects the higher level of capital expenditure during the first half-year but remains comfortable, and this is likely to remain the case over the next two years as the company continues to undertake significant capital investment. With net debt now at $652 million this gives a rolling annualised EBITDA to Net Debt Cover of a comfortable 2.2 times.

Given the strong cash position, $250 million in unused working capital facilities and comfortable debt covenants, we see no reason at this stage to slow down our capital expenditure program. However, we do have flexibility built into our plans should we decide to make adjustments in the future.

Return on Total Funds Employed has increased slightly to 23.0%, a satisfactory outcome given the current difficult trading conditions and the investments that continue to be made.

NEW BRANDS, SUPPLIERS AND STORE MERCHANDISING

We continue to develop our brand architecture and hierarchy, and refine our brand mix to meet the needs of our growing customer base. Our customers have responded well to the substantial improvements we have made to our range of Australian and international designers. During the spring/summer season of 2008 we introduced over 20 new leading Australian and international designers across our portfolio of womenswear, menswear, cosmetics and childrenswear.

Most recently, we have added six leading international womenswear brands: Vera Wang Lavender, Christian Lacroix, Balmain, Temperley London, Karen Millen and Calvin Klein Collection. We have also introduced Elemis skin care and no!no! hair removal technology to our exclusive range of leading cosmetics brands which includes Mecca Cosmetica.

We have further expanded our menswear offer with the introduction of Ben Sherman and Wayne by Wayne Cooper. Our first Ben Sherman concept stores opened in February and we are rolling out another 22 stores across Australia. We have also extended our Mossimo range in our youth offer and are in the process of rolling out Mossimo store fit-outs to 12 stores nationally.

Myer has become one of the first Australian retailers to introduce plus-size fashion for a younger demographic. Myer’s three new plus-size contemporary brands – Mink, Monroe and Flirt – are offering women aged 16-34 a contemporary range of leading fashion designs and have been well received by our customers.

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Myer Pty Limited. ABN 83 004 143 239

We have seen an improved performance from Myer exclusive brands including Hi There by Karen Walker and Basque in womenswear and Cozi in swimwear. We added another exclusive brand to our homeware range with the introduction of Kylie bed linen.

We continue to roll out store-within-store concepts to provide our customers with a unique shopping experience. We introduced the exciting Nepresso coffee concept to our Perth City store and in partnership with Kodak, we are rolling out ‘Kodak at Myer’ concept stores to enable customers to print photos in-store. We have introduced Basque shops to many stores, which complement improvements made in the fashionability of the Basque range. Following the success of the initial in-store WeightWatchers Clinic and Wellness Centres, we are rolling these out to at least eight stores by the middle of the year.

MARKETING

The MYER one customer loyalty program continues to grow steadily with the total number of members now in excess of 2.6 million representing some 60% of sales, up from 1.1 million members at acquisition representing 43% of sales. MYER one remains the cornerstone of our marketing activity and is a key enabler for better targeting our product offering to meet the evolving needs of our customers. An expanded range of MYER one benefits will be rolled out to members over the coming months including: travel offers, wine club, VIP tickets to Myer events, and more discounts, gifts and vouchers. We introduced our first MYER one lounge for gold and silver customers into our newly refurbished Sydney flagship and Doncaster stores. In addition, we have established top MYER one customer lists at each of our stores. These lists enable store managers to directly engage with and reward our most loyal customers with invitations to local events and in-store activities such as complimentary cosmetic treatments and valet parking creating a unique and personalised shopping experience. We have recently launched the first ever MYER one Aussie Rules Pick The Winners Competition where participating members have the chance to win up to $100,000 in cash and prizes.

The Myer Visa and Myer store card have continued to grow with the number of cardholders increasing to over 200,000. Myer Visa Card was recently ranked number one reward credit card in Australia by Cannex.

We have continued to see benefits from the long-term association between Myer fashion and Australia’s thoroughbred racing industry. Over the past six months, we have further expanded our interest in racing and now have ‘Myer Fashions on the Field’ competitions in 23 local racing clubs around the country. We currently have in place long-term sponsorship agreements with the Victorian Racing Club and Melbourne Cup, Sydney Turf Club and the Golden Slipper, as well as a five-year contract with Rebecca Twigley, Myer’s Racing Ambassador.

Our long-term partnership with Vision Australia’s Carols by Candlelight continued again in 2008, while our Myer Christmas parades were extended to a further three major Australian cities, as well as the expansion of in-store Santa attractions. This was the first year we have been a major partner of the L’Oréal Melbourne Fashion Festival, which last week featured many of Australia’s established and up and coming designers.

This season’s new winter fashion launch has taken fashion back to our customers. Through a series of in-store fashion shows and events our customers have come face-to-face with Myer brand ambassador, Jennifer Hawkins, and the new season of fashion from our world class range of leading Australian and international designers.

We have continued to expand our use of in-store theatre, designed to attract increased customer traffic and media interest. Most recently, we received an overwhelming response to the performance of leading artist and style icon, Kylie Minogue, in our Myer Sydney store, as well as Gabriella Cilmi’s appearance as part of a broader initiative to provide entertainment to customers lining up for our Myer Melbourne Boxing Day sale. Leading cosmetics designer, Poppy King, also gave in-store appearances in our flagship Melbourne and Sydney stores.

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Myer Pty Limited. ABN 83 004 143 239

During H1 FY09, over $1 million has been invested in more than 70 local marketing projects in communities around Australia. This represents activity undertaken by all stores across the country, ranging from the Westmead Children's Hospital Teddy Bear's Picnic to the Brisbane Tennis International.

PROJECT BULLSEYE

In anticipation of a challenging trading environment following the peak trading period, Myer launched an innovative marketing campaign – Project Bullseye. The campaign is the first of its kind in Australia, which centres on strong collaboration between Myer, its suppliers and media partners, and will result in a doubling of normal media expenditure during February, March and April. The initiative aims to drive traffic to stores during a time that is traditionally one of the quietest retail trading periods of the year.

The expanded advertising campaign has been achieved with the support of our media partners and our suppliers, incorporating reduced advertising rates, assisted funding from suppliers and a commitment by Myer to purchase increased merchandise. Participating suppliers recorded stronger than forecast February sales. Along with increased print, radio and TV advertising, the three-month campaign also includes specific point-of-sale initiatives, pop-up in-store fashion parades with increased appearances by Myer ambassador, Jennifer Hawkins, and a direct mail-out to MYER one loyalty program members. Campaign initiatives are being marketed to customers under the campaign name – ‘It’s My Choice’.

NEW STORES AND STORE REFURBISHMENT PROGRAM

We remain committed to our store expansion program, which will see the Myer chain of stores grow from 60 stores at acquisition to 80. We currently have 65 stores and construction of our new store at Top Ryde in NSW has commenced. This follows the opening of four new stores in 2008, which are trading in line with expectations. During FY08 we signed nine leases for new stores. We are experiencing several landlord delays and others could arise as a result of issues facing the property sector. As such we have built flexibility into our planning.

We continue to make good progress in our refurbishment program, with our Geelong, Doncaster and Sydney store refurbishments completed during the period. This program reflects our long-term focus and aims to reinforce the Myer brand proposition, while at the same time supporting future sales growth.

The refurbishment of our Myer Sydney store to international class standard was completed in time for Christmas. The store boasts the best cosmetics floor in the country with new cosmetics installations including Mecca Cosmetica, Bobbi Brown, Elemis, Chanel Colour studio and the first Benefit Brow Bar in Australia. The store relaunch generated an overwhelming response from customers, with Myer Sydney delivering the strongest store performance during the peak trading period. Improvements in our supply chain enabled us to reduce storage space significantly, and increase retail space by 10%, taking the store to 33,000 square metres of trading space.

The major rebuild of Myer Melbourne is progressing with phased delivery of the store due to commence before Christmas 2009. Disruption to the business was effectively minimised over the Christmas and stock take period with a dedicated team in place to manage customer flows. Work has recently begun on the refurbishment of our stores in Castle Hill and Blacktown.

Myer’s new support office in Melbourne’s Docklands remains on track to be completed later this year, with plans to move into these premises in early 2010. The first five floors of the new building are structurally complete.

PEOPLE AND CULTURE

We have continued to invest in people development and succession planning processes to build the talent pool and support the business through the Growth Phase. Our 2008 Graduate and Store Management Development Programs concluded in December, with all 80 participants successfully

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Myer Pty Limited. ABN 83 004 143 239 completing the course work and placed into permanent Myer roles. Our 2009 programs have commenced with a first half intake of 10 graduates and 48 store management trainees participating.

Ensuring the safety of our customers and team is a key priority for our business and we continue to drive the safety message throughout our organisation. Safety is now firmly embedded as a key performance measure for management and is a key focus at every level of the business.

Staff attraction and retention remains a core objective for the business. In January, the Myer Equity Incentive Plan offer was expanded to include over 350 managers. This initiative plays an important part in aligning the contributions made by our employees with the long-term success of our business and their reward.

A more flexible and better-targeted rostering system has enabled the business to achieve greater alignment between staff hours and customer shopping patterns. This has increased our capacity to provide improved customer service, while at the same time achieving greater workplace flexibility and efficiencies, ultimately delivering significant cost reduction over the period. Reorganisation of a number of the support office functions has also led to reduced costs and enhanced operational efficiency.

We have completed the first phase of our ‘Awesome Service’ training initiative, aimed at embedding a permanent positive attitudinal change to our culture. This involved more than 15,000 team members participating in training sessions around the country.

Our expansion of the ‘Myer For Me’ staff benefits program has been well received by our team, with a broad range of benefits continuing to be rolled out.

COMMUNITY

In a rapid response to Victoria’s Black Saturday bushfire tragedy, together with our team, our customers and our suppliers, Myer has successfully raised over $1.75 million for those affected via ‘The Myer Bushfire Appeal’. In addition to the amount raised through team member, customer and supplier donations, the Myer Management Board pledged $500,000 to the appeal with a further $250,000 to match specific staff donation and fundraising efforts. All funds raised are provided to The Salvation Army and the majority of funds raised by the Appeal have already been distributed to those most in need.

Myer plays an important role in the celebration of Christmas for many Australians. The Myer Spirit of Christmas compact disc was this year published in support of The Salvation Army raising over $160,000 for the cause.

Our trial of an in-store breast cancer screening clinic in our Parramatta store has been successful and we now have plans to roll out the clinics to a further three stores in NSW over the course of the year.

The Myer History of Fashion book was recently launched, following the success of the History of Myer book last year, reflecting Myer’s long-term involvement with and dedication to the fashion industry.

OUTLOOK

The first half of FY09 saw sales budgeted to fall 5%, but ultimately fell 3.7%. The outlook for the balance of FY09 is not dissimilar to the first half and we are planning for a slight further deterioration in sales to be down 5%. To date in H2 FY09, sales have been down around 2½ %.

The groundwork laid in the first 34 months of the 50 month Turnaround Phase since acquisition in June 2006 has allowed us to manage the business more flexibly in a difficult economic environment. Improved staff training, up skilled management, a new supply chain, new merchandise IT system, more focused marketing, better in-store presentation, more focused and effective promotional activity, better inventory and cash flow management, and improved relationships with our suppliers, have all played their part.

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Myer Pty Limited. ABN 83 004 143 239 In most areas we have variablised costs and a conservative approach to planning and forecasting has seen us stay ahead of the curve. We believe that it is necessary to be alert to negative or positive changes in the market and to react to them quickly, rather than rely on firm predictions in what is proving to be a volatile market.

We confirm previous guidance, anticipating that FY09 profits are likely to be similar to FY08, demonstrating the relative resilience of Myer’s business model to the current challenging market conditions. We remain on track to deliver full year EBIT of 7 cents in the dollar at the end of the Turnaround Phase in July 2010 (up from 1.8 cents at acquisition), as previously advised.

For further information; Mitch Catlin, Myer Communications, 0438 101 540 or [email protected] Kerstin Wahlqvist, Myer Communications, 0438 101 499 or [email protected]

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Myer Pty Limited. ABN 83 004 143 239 Half Year Results to 24 January 2009 After 32 months of Myer’s 50 month Turnaround Phase

Our vision is to be an international class retail business providing inspiration to everyone

24th March 2009

Agenda

Turnaround Phase

1. Overview

2. Financial review

3. Operating update

Growth Phase

4. Building for the future

5. Outlook

1 Agenda

Turnaround Phase

1. Overview

2. Financial review

3. Operating update

Growth Phase

4. Building for the future

5. Outlook

Solid financial performance in difficult trading environment

• Earnings before interest and tax up 6.6% to $161m, equating to 9.15 cents in the dollar • Sales ahead of expectations, with total sales down 3.7% to $1.76bn • Gained market share with customers responding well to increased targeted promotional activity and better in-store execution • Gross margin improved 52bp • Ongoing reduction in cash cost of doing business, 83bp lower • Capital expenditure up 38% to $57m • Basic EPS of 18.2 cents, up from 17.6 cents in H1 FY08 • Finished period in strong financial position with $224m cash, $250m undrawn committed facility, clean inventory, banking covenants comfortably met with no repayments due until June 2012 Turnaround on track, building blocks for Growth Phase coming into place 4

2 Good progress after 34 months of Myer’s 50 month Turnaround Phase

Achieved In progress

101 business improvements effectively complete 9 New point-of-sale system and CCTV World Class Supply Chain established and Continue to develop MYER one loyalty operating ahead of design metrics , with costs 9 with improved benefits and rewards down over 50% since acquisition 6 new full-sized stores under negotiation Commenced expansion program to take chain Continue refurbishment program for to 80, with 4 new stores opened and 9 new full- 9 better returns from space, including sized stores signed major redevelopment of Melbourne Refurbishment program underway - 6 stores 9 Continue to focus on culture, improving completed including Sydney flagship customer service and productivity Embedding permanent positive culture change - Ongoing improvement of brand offering Myer For Me, multi-year EBAs, paid parental 9 leave, ‘Awesome Service’ training Enh anced MYER one l oyalt y program with 2.6 million members (60% sales) 9 Improved standalone IT platform, separation from Coles, embedded MyMerch 9 Reduced costs and variabilised cost base 9 Strengthened brand hierarchy 9

Turnaround Phase on track, building blocks for Growth Phase coming into place

Turnaround Phase Growth Phase 50 months to July 2010 48 months to July 2014

FY 06 07 08 09 10 11 12 13 14 Net new stores 1401 4433 Chain 60 61 65 65 66 70 74 77 80 Sales ($bil) 3.17 3.29 3.32 EBIT ($mil) 56 162 213 EBIT to Sales 1.8% 4.9% 6.4% 7% Fix the financial metrics Grow the business • Business improvement projects • Focus on top line growth • World class supply chain • New store openings take chain • Overhaul IT systems to 80 (MyMerch, Point-of-Sale, CCTV) • Continue refurbishment program • Separate from Coles • Grow brands • Begin store expansion and • Operational refinement refurbishment program • Service culture well embedded • Promote culture of service and • Achieve international retail performance standards

All previous period numbers normalised to eliminate impact of sale and lease-back of Melbourne property Timing of store openings subject to change given potential for landlord delays 6

3 Agenda

Turnaround Phase

1. Overview

2. Financial review

3. Operating update

Growth Phase

4. Building for the future

5. Outlook

Earnings before interest and tax up 6.6%

H107 H108 H109 % % change change like-for-like Sales including concessions $1,796m $1,829m $1,762m (3.7%) (3.7%)

EBIT $114m $151m $161m +6.6%

EBIT/Sales (%) 6.36% 8.27% 9.15%

Net profit after tax $46m $79m $83m +5.3%

All previous period numbers normalised to eliminate impact of sale and lease-back of Melbourne property

Profits up despite fall in sales and deterioration in Onconsumer track to sentiment deliver 8

4 Sales ahead of expectations in challenging market • Total sales down 3.7% to $1,762 million • Like-for-like sales down 3.7% after taking into account new stores and impact of refurbishments • Adjusted trading strategy to respond to deterioration in consumer sentiment resulting in improved second quarter performance and increase in market share • Business benefited from improved in-stock position and better in-store execution • Womenswear, cosmetics and accessories strongest performing categories • Sales in Queensland , Western Australia and New South Wales were resilient with Victoria much tougher • Specific stores in lower socio-economic catchments continue to under perform the average

Gained market share over 12 month period

Financial summary

H1 FY09 H1 FY08 % change Sales including concessions $1,762m $1,829m (3.7%) Operating gross profit $715m $732m (2.4%) OpeOpeatratin ggosspog gross profi t/saest / sales 4005.57 % 40005%.05% Cash cost of doing business (520) (555) (6.3%) Cash cost of doing business / sales 29.50% 30.33% EBITDA $195m $178m +9.6% EBITDA / sales 11.06% 9.73% Depreciation ($34m) ($27m) Earnings before interest and tax $161m $151m +6.6% EBIT / sales 9.15% 8.27% Interest ($43m) ($37m) Net profit before tax $118m $114m +3.1% Tax ($35m) ($35m) Net profit after tax $83m* $79m +5.3%

*$2.5m redundancy cost included All previous period numbers normalised to eliminate impact of sale and lease-back of Melbourne property Earnings per share up 3.4% to 18.2 cents 10

5 First half EBIT up $103m since acquisition

EBIT $m EBIT to Sales %

9.15 $103m increase H1 FY 8.27

6.36 6.40

4.94

3.40 151 161 114 1.75 58

HY06 HY07 HY08 HY09 HY06 FY06 HY07 FY07 HY08 FY08 HY09

Note: 1) All previous period numbers normalised to eliminate impact of sale and lease-back of Melbourne property 2) EBIT to Sales percentage higher in first half than second half due to peak trading period On track to deliver return on sales of 7 cents in the dollar by end of Turnaround Phase 11

Strengthening balance sheet

• Finished period with $224m cash, $250m undrawn committed facility, clean inventory • Net debt steady at $652m, down from $979m at acquisition • As profitability and cashflow have improved, financial health measures and banking covenants are increasingly comfortable • Net Debt to rolling EBITDA ratio down to 2.2 times from 2.7 times at H1 FY08, in line with previously advised goal of 2.0 to 2.5 times • Lower Debt Service ratio of 1.78 times reflects higher level of capital expenditure but remains comfortably above covenant of 1.0 times • Rolling annual return on total funds employed now 23. 0% versus 22. 1% in FY08, 18.4% at FY07 and 5.2% at acquisition • See no reason at this stage of the economic cycle to prematurely repay debt before it expires in 2012

NoNo debt debt repayment repaymentss due due until for 3June ½ years 2012 12

6 Balance Sheet

H109 $m H108 $m

Inventory 354 366 Other Assets 158 138 Less Creditors (504) (476) Less Other Liabilities (274) (239) Net Trading Investment (267) (211) Property 29 29 Fixed Assets 337 247 Tangible Funds Employed 99 65 Intangibles 900 869 Total Funds Employed 999 934 Debt 628 623 Less Cash (224) (226) Convertible Equity Note 247 246 Net Debt 652 643 Equity 347 291 Total Investment 999 934

Banking covenants increasingly comfortable 13

Agenda

Turnaround Phase

1. Overview

2. Financial review

3. Operating update

Growth Phase Growth Phase 4. Building for the future

5. Outlook

7 Project Bullseye

• Australian first innovative marketing campaign designed to drive sales in anticipation of a challenging trading environment • Will see normal media advertising doubled during February, March and April 2009 • Campaign made possible with support of media partners and suppliers • Incorporates reduced advertising rates, assisted funding from suppliers and Myer commitment to increase stock purchasing • Participating suppliers recorded stronger than forecast February sales

Continue to attract high profile international and national brands

• Introduced over 20 new leading Australian and international designers during spring/summer season 2008 • Expanding womenswear range with 6 new international designers: Vera Wang Lavender, Christian Lacroix, Balmain, Temperley London, CCCalvin Klein Collection and Karen Millen • Added Elemis and no!no! to our range of Myer exclusive cosmetics; Mecca Cosmetica continues to perform well • Further expanded menswear offering with the introduction of Ben Sherman, Wayne Cooper and an expanded Mossimo, Bauhaus and Kenji range • Introduced plus-size contemporary brands Mink, Monroe and Flirt for women aged 16-34 • Delivered improved performance from Myer exclusive fashion brands including Wayne by Wayne Cooper and Basque in womenswear, Cozi in swimwear • Introduced Kylie bed linen exclusive to Myer homeware Great brands and great fashion for every Australian 16

8 Brand positioning to support our vision for Myer

Vision Our Vision is to be an International Class Retail BiBusiness prov idiIiding Insp ititEiration to Everyone

Brand Proposition To excite, inspire and reward our customers

Suppliers Customers Team Members Real brands Brand logic Greater advocacy New products Broader choice New confidence in satisfying our customers

Brand architecture to appeal to every customer

Designer Brands Balmain Viktor and Rolf Paule Ka DKNY camilla & marc Yeojin Bae Temperley London Calvin Klein Collection Vera Wang Lavender Cacharel Nicola Finetti Bettina Liano Christian Lacroix Narcisco Rodriguez Sonia by Sonia Rykiel Carla Zampatti TL Wood Arabella Ramsay Donna Karan Vivienne Westwood Red Karen Millen Leona Edmiston Wayne Cooper Charlie Brown Boss Black McQ International/National Brands Cue Ben Sherman David Lawrence Rhodes & Beckett Polo Ralph Lauren Cooper St Country Road Sheridan Feathers Rodd & Gunn Maxwell & Williams Wish Sportscraft Jeff Banks Jigsaw Esprit G-Star Callaway Review Yarra Trail Levis Tommy Hilfiger True Religion Armani Jeans TS14+ Politix CK Jeans 7 For All Mankind Proprietary Designer Brands Maticevski Jane Lamerton Wayne by Wayne Cooper Wayne Jnr Hi There by Karen Walker Cozi by Jennifer Hawkins Myer Fashion Labels Basque Regatta Vue Miss Shop Heritage Miss Pink blaq Tokito Reserve Kenji Sprout Jack & Milly Piper Lost Highway Soho Chloe & Lola Angelic by C&LI Milkshake Urbane Maddox Tilli Brooklyn Industries

Youth Mossimo M-One-II Bardot Ed Hardy Ladakh French Kitty Stussy Redsand Mermaid Sister Pilgrim Riders by Lee Quirky Circus Freshjive Bauhaus Clear architecture of brands covering full range from luxury to entry price points 18

9 Loyalty and cards

• Continue to invest in MYER one loyalty program to enable targeted marketing directly to customers – Increased membership to 2.6 million accounting for around 60% sales (up from 43% at acquisition) – Expanding range of benefits including travel offers , wine club, VIP tickets and more discounts, gifts and vouchers – Established top MYER one customer lists in all stores – First ever MYER one Aussie Rules Pick The Winners Competition – Opened first lounges for Gold and Silver members in Sydney flagship and Doncaster – Members who receive Emporium magazine continue to spend at double the rate of those who do not • Ongoing growth of Myer Visa Card and Myer store card – Cardholders increased to over 200,000 – Myer Visa Card ranked number one reward credit card in Australia by Cannex

Improved loyalty and marketing programs build customer relationships 19

Sponsorship and marketing

• First year of new long-term partnership with VRC including Melbourne Cup Carnival and Flemington Festival of Racing for Myer Fashions on the Field • Integrated community focused Christmas program – MChitMyer Christmas para des – Bourke Street Christmas windows – Presenting partner of Vision Australia’s Carols by Candlelight – Expansion of in-store Santa attractions • Continued support of the arts including major sponsorships of Archibald Prize, National Gallery of Victoria and Golden Age of Couture at Bendigo Art Gallery • Expanded support of Australian fashion industry with first time majjpor sponsorshi p of L’Oréal Melbourne Fashion Festival • Preference and focus on MYER one premium customers to participate in programs and events

Improved loyalty and marketing programs build customer relationships 20

10 Local area marketing

• During H1 FY09, more than $1 million invested in over 70 local marketing projects in communities around Australia • Events include: – Westmead Children’s Hospital Teddy Bear’s Picnic – Leo Club of Hornsby Spring/Summer Fashion launch – Hobart Christmas Parade – Perth Fashion Festival – Brisbane Tennis International – Sydney Medibank International Tennis – Australian Men’s Golf Open and Australian Women’s Golf Open • Expanded interest in thoroughbred racing nationwide, supportin g M yer Fashions on the Field at 23 local racin g clubs across Australia • Use of top MYER one customer lists to engage customers in local store events and promotions

Bringing Myer to more people through local community marketing 21

Myer in the community

• Raised $1.75 million for those affected by the Black Saturday bushfires in Victoria through the Myer Bushfire Appeal, with a further $750,000 donated by Myer Management Board • Myer Spirit of Christmas compact disc raised over $160,000 for The Salvation Army • Breast cancer screening clinic trial successful; clinics to be rolled out to four more stores • Launch of the Myer History of Fashion book • PtitfViiAtli’ClbPresenting partner of Vision Australia’s Carols by Candlelight

Supporting communities around Australia

11 In-store innovation and theatre • Winter fashion launch strategy takes fashion back to customers with series of in-store fashion shows and events featuring Myer brand ambassador Jennifer Hawkins • Ongoing rollout of exciting ‘store-within-store’ concepts – Ben Sherman shops in 22 stores – New Basque concept shops – Mossimo concept stores being rolled out to 12 stores – Extension of Kodak at Myer – WeightWatchers Clinic and Wellness Centres being rolled out into 8 stores – Nespresso introduced in Perth city store • In-store theatre and entertainment – Gabriella Cilmi hosting Stocktake Spinning Wheel with cash and stock prizes – Kylie Minogue at the launch of her Sexy Darling fragrance at the Sydney flagship store – Poppy King in-store appearances – Expansion of ‘pop-up’ fashion shows

Creating a sense of excitement 23

World class supply chain delivering operational efficiency • Continue to improve service, cost and safety KPIs domestically and internationally • Two thirds of suppliers committed to floor-ready standards • Commenced work on security tagging process at supply source to protect merchandise and improve store productivity • Benefiting from shorter transit lead times out of China which are down from 42 days at acquisition to less than 24 days • Significant improvement in our in-stock position • Roll cages introduced into 75% of stores, in all stores in Q1 FY10 • ‘Smart allocation’ of stock through RDCs to reduce markdowns and store to store transfer costs World class operating metrics 24

12 Growing collaboration with suppliers

• Collaborating with local suppliers on further lead time reduction • Continue to build stronger relationships with overseas buyers and ongoing rationalisation of supplier base • Year 3 of Supplier of the Year benchmark program • Strategic objective plans in place with major trading partners • Access by suppliers to Myer stock forecasts now in place • Supplier base now 99% e-commerce compliant • Product knowledge training days and information cards for store teams provided by trading partners • Assisting suppliers through difficult trading environment

Greater efficiency and communication yielding benefits for both parties 25

Investing in information technology to support growth of business

• New merchandising system MyMerch now embedded in the business • Benefits through improved stock allocation to stores based on criteria includingggp; sales rate, demographic, stock tracking, forecasting, climatic traiting • Hardware and system enhancements rolled out to Retek merchandising system • New Point-of-Sale System and CCTV due to be operational by end of Turnaround Phase • Enhanced in-store ticketing solution rolled out • Commenced ‘Store of The Future ’ model to streamline store back office functions, improve store fit out and design, and allocate space to reflect customer needs and new technologies • MyTrade – management of overseas purchase orders implemented

Investment in IT underpins efficiency gains 26

13 Driving operational improvements

• Clear and consistent store imperatives established • Phase one of store restructure focusing on customer service • Introduction of sales productivity cards and ‘My Fast Facts’ product cards • Enhanced rostering linked to customer purchasing patterns • IdilhdiidtImproved visual merchandising and store presentation

Delivering improved in-store execution

Ongoing investment in people and culture

• Expanded initiatives to attract, retain and reward talent through ‘Myer for Me’ benefits program – Extended Myer Equity Incentive Plan to include over 350 managers – New benefits added • SftSafety filfirmly em bdddbedded as key per formance measure • Continue to build talent pool for Growth Phase – 2008 Graduate and Store Management Development Program completed, all 80 participants now in permanent roles – 2009 programs commenced with first half intake of 10 graduates and 48 store management trainees – Succession planning across business remains a key focus • Sales focus rewarded through innovative incentive programs such as Add On and Drive Away, Add On and Fly Away, and Bullseye Bucks • Completed first phase of ‘Awesome Service’ customer service program

Continuously improving productivity, customer service, and team member engagement 28

14 Agenda

Turnaround Phase

1. Overview

2. Financial review

3. Operating update

Growth Phase Growth Phase 4. Building for the future

5. Outlook

Increased capital expenditure to accelerate growth

• Capital expenditure in H1 FY09 of $57m, up from $41m in H1 FY08 • Significantly higher than under previous ownership which averaged $34m in the first half for the 3 years prior to acquisition • Capital investment being funded by cashflow following significant improvement in return on sales since acquisition • Investment during Turnaround Phase is funding IT, new Point-of-Sale System, brand presentation, refurbishments, a new support centre and new stores • FY09 capex anticipated to be $140m, less than previous estimate of $160m, due to some timing slippages • Given strong cash position and comforcomfortabletable debt covenants, we see no reason to slow down investment program, however have flexibility built into plans should we need to make future adjustments

Annual capital expenditure more than doubled since acquisition 30

15 Store expansion program will underpin future growth

• Four new stores opened in FY08 are trading in line with expectations • Construction of new store at Top Ryde in NSW has commenced • During FY08, signed nine leases for new stores – Queensland: Robina (QIC), Townsville (Stockland), +5 Mackay (Lend Lease), Mt Gravatt (Westfield) – New South Wales: Top Ryde (Beville), Green Hills (Stockland), Shell Harbour (Stockland) – Victoria: Plenty Valley (Westfield), Watergardens (QIC) • Experiencing several landlord delays and others could arise • Built flexibility into planning Remain committed to expansion program to take portfolio from 65 to 80 stores 31

Store refurbishment program to reinforce brand proposition and grow sales • Six stores refurbished to date including Chermside, Chatswood, Warringah, Geelong, Doncaster and Sydney flagship • Doncaster fully refurbished in October 2008 – Store performance exceptional despite new entrant – $24m in sales in 2Q09 alone • Sydney City store refurbished to international class department store standard and reopened in time for Christmas 2008 • Major rebuild of Melbourne store ongoing, phased delivery due to commence before Christmas 2009 • Work has begun on refurbishment of stores in Castle Hill and Blacktown

Proactive refurbishment strategy reflects long-term focus 32

16 Myer Sydney redevelopment

• Major refurbishment of flagship store was delivered in time for Christmas trading • Supply chain efficiency enabled additional 10% trading space to take store to 33,000 square metres • Store features include: – Best cosmetics hall in the country, installations include Mecca Cosmetica, Bobbi Brown, Elemis, Chanel Colour studio, one of only 11 internationally, and the first Benefit Brow Bar in Australia – Menswear concept stores including Hugo Boss, Polo Ralph Lauren, Van Heusen, Rodd and Gunn – New designer and imported apparel area and fitting rooms – New homeware concept installations including Missoni and Le Creuset – New home entertainment open-sell suite – Dininggg destinations including Parisian-styygle cafe and licensed bar & grill – MYER one lounge for Gold and Silver Members – Revamped parents’ room and beauty rooms • Delivered strongest store performance over peak trading period

Myer Sydney - an international class department store 33

Myer Sydney redevelopment

17 Agenda

Turnaround Phase

1. Overview

2. Financial review

3. Operating update

Growth Phase Growth Phase 4. Building for the future

5. Outlook

Turnaround Phase focused on delivering permanent positive change

Turnaround Phase (2006 – 2010) Growth Phase (2010 – 2014) Priorities for the next 16 months Ongoing priorities

Continuous improvement of IT, supply Focus on top-line growth and operational fine chain and buying capabilities tuning to continuously improve efficiency and productivity Store refurbishments including Melbourne flagship rebuild Continue store refurbishment program

Consolidate permanent culture of service New Point-of-Sale System and closed and performance circuit TV system Grow chain to 80 stores to consolidate Continue to refine and add to brand position as the biggest Australian department store retailer with a full national footprint portfolio Become an international class retail business Deliver 7 cents EBIT in sales dollar Continue to add to brand portfolio

Building blocks for Growth Phase coming into place 36

18 Business well positioned in current trading environment

• Variabilised cost base and rigorous cost management • World class supply chain and over-arching IT platform enabling tight inventory control • Improved trading terms with suppliers, working together to deliver mutual benefits • Flexibility to adapt promotional strategy to appeal to customers in current climate • Broad-based proposition enables us to dial up or dial down brands and price points in different stores and departments • Powerful and cost effective marketing tool in MYER one • Growing customer loyalty platform with over 200, 000 Myer credit card holders • Strong balance sheet and disciplined approach to capital management • Increased cash generation funding investment to underpin future growth

Flexible platform enables us to respond quickly to changing environment 37

FY09 Outlook

• H1 FY09 sales down 3.7%, better than budgeted 5% fall • Outlook for balance of FY09 not dissimilar to first-half, planning for slight further deterioration circa -5% • H2 sales to date down around 2½% • Work done so far in Turnaround Phase, has allowed us to manage business more flexibly in difficult environment • Confirm previous guidance, FY09 profits likely to be similar to FY08 • Remain on track to deliver full year EBIT of 7 cents in the dollar by the end of the Turnaround Phase in July 2010 (up from 1. 8 cents at acquisition) as previously advised

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