Media Release

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.” – Page 2 of 10 – 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.

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