—

THE WAREHOUSE GROUPLIMITED

FY17 ANNUALRESULT

FRIDAY, 22 SEPTEMBER 2017 —

THE WAREHOUSE GROUP | 02 Chair’s • • • • • • and our shareholders The Board and Management remain focused on driving bothresults for customers an adjusted NPAT result of $68.2M which is slightly below last year Financial Services. Continuing operations (excluding Financial Services) delivered restructuring costs, and the goodwill and asset impairments linked with the sale of Reported NPAT of $20.4m is 73.9% below last yeardue to one detailed and robust strategy review operating model , sale of Financial Services and the Newmarket property,and a Key achievements in FY17;restructuring and simplification of the Group’s number of new initiatives to announce in the next quarter Co performance across Started on guidance A strong n tinue second second half year has resulted in a full year result to make to make good progress against our strategic initiatives, and have a a fundamental transformation program, Introduction the Group focused slightly better than on improving - off items including The Warehouse Group

— A strong second half 4

0 performance delivered an | |

P P adjusted NPAT for the year of GROU

E $59.2M, slightly above the

AREHOUS W

E guidance range of $54M-$58M TH during a period of transformation —

THE WAREHOUSE GROUP | 05 Retail Gross Profit Retail Sales $M Ordinary Dividend Operating Cash Flow NPAT(Reported) NPAT(Adjusted) (Adjusted) Continuing NPAT Retail Operating Profit Retail CODB FY1 Operating Margin CODB% Gross Margin 7 Annual FY17 2,980.8 29.0% 32.6% Result 128.1 107.8 864.1 971.9 3.6% 16.0 20.4 59.2 68.2 2,924.7 FY16 29.0% 32.8% 162.5 111.2 847.0 958.2 3.8% 16.0 78.3 64.1 69.2 Variance - - - - +2.0% +1.4% +1.9% 21.2% 73.9% 20bps 20bps - - - 7.7% 1.4% 3.0% 0bps 0cps • • • • • • challenges and a warmer winter and H2 FY16 by adverse currency impacted by strong margin pressures consecutive weaker halves. H1 FY17 margin performance and followed two Improved H2 FY17 driven by stable $1M (1.4%) below last year adjusted NPAT result of $68.2M which is Financial Services) delivered an Continuing operations (excluding These are detailed further on slide 7 related to the sale of Financial Services. and the goodwill and asset impairments off items including restructuring costs, below last year due to a number of one Reported NPAT of $20.4M is 73.9% Torpedo7 increases linked to Noel Leeming and 2.0% largely reflecting variable cost Costs of Doing weak margin declined due to The Warehouse’s Leeming’s performance but overall Gross profit up 1.4% influenced by Noel and Torpedo7 delivering strong growth Group sales Christmas trading period up up 1.9% with Noel Leeming Bu siness(CODB) up - —

THE WAREHOUSE GROUP | 06 (Adjusted) Continuing NPAT Profit Retail Operating Retail CODB Profit Retail Gross Retail Sales $M The Warehouse Group H2 vs H1 CODB% Gross Margin Margin Operating Delivered a strong H2 performance during a period of significant internal change 1,368.9 H2 17 30.3% 33.1% 415.0 452.9 2.8% 23.1 37.9 1,364.2 H2 16 30.0% 32.6% 409.9 445.3 2.6% 20.3 35.4 Variance +13.9% +20bps +30bps +50bps +7.2% +1.2% +1.7% +0.3% 1,611.9 H1 17 27.9% 32.2% 449.1 519.0 4.3% 45.0 69.9 1,560.4 H1 16 28.0% 32.9% 437.0 512.8 4.9% 48.8 75.8 Variance - - - +2.8% +1.2% +3.3% 60bps 10bps 70bps - - 7.8% 7.8% —

THE WAREHOUSE GROUP | 07 $M Reported Earnings Minority Interest TaxExpense Contingent Consideration Restructuring Costs Acquisition & Disposal Costs Intangible Asset Impairment Property Divestments Gain on Business Disposals AdjustedEarnings associated with adjustments in carrying values of assets and M&A activity. unusual and non To improve the understanding of underlying business performance, the Group adjusts profit for Adjusted vs Reported Results - operating items. Unusual items include profits from the sale of assets and losses FY17 Continuing NPAT (12.1) 70.7 11.5 68.2 3.1 - - - - - FY16 (3.6) 83.9 10.0 69.2 2.1 0.7 5.5 - - - NPAT incl. Discontinued FY17 (12.4) (40.1) (0.9) 20.4 11.5 59.2 3.1 - - - FY16 (3.6) (0.5) 78.3 10.0 64.1 2.1 0.7 5.5 - - —

THE WAREHOUSE GROUP | 08 Gearing Source of Funds Net Debt Minority Interests Shareholders’ Equity Capital Employed Goodwill and Brands Contingent Consideration Derivatives TaxAssets Funds Employed Held for Sale FixedAssets Working Capital Provisions Trade Other & Payables Trade & Other Receivables Finance Receivables Inventory $M Balance Sheet FY17 (267.3) 31.0% (19.3) (69.1) 704.7 218.3 485.5 704.7 106.6 571.5 273.3 226.5 491.8 45.9 71.7 71.1 0.9 - - FY16 (270.3) 37.0% (28.5) (76.8) 810.6 300.0 510.4 810.6 129.3 669.9 312.3 305.3 501.7 (1.0) 40.9 52.3 77.1 73.6 0.2 Variance - - +19.4M 105.9M 105.9M ------+0.7M +1.0M +9.2M +5.0M +7.7M +3.0M 81.7M 24.9M 22.7M 98.4M 39.0M 78.8M 73.6M - - 6.0M 9.9M • • • • • property sale of Newmarket Lower net debt, due to the NZD against the USD position due to the rise of derivatives are in a loss foreign exchange valuation of the Groups The mark to market Finance business with the sale of the impairments connected disposals and asset combination of property Fixed assets are lower, a as held for sale liabilities are reclassified associated assets and Services means the Decision to exit Financial range reductions continuation of planned Lower inventory due to a —

THE WAREHOUSE GROUP | 09 Dividends Paid Dividends Received Acquisitions Divestments Capital Expenditure Operating Cash Flow Other Items Interest Paid Taxes Paid Working Capital Trading EBITDA $M Closing Net Debt Opening Net Debt Net Cash Flow Other Items Cash flow FY17 (218.3) (300.0) (52.5) (70.6) (16.0) (27.5) 128.1 159.5 (2.0) (1.0) (9.6) 81.7 79.7 21.7 - 9 FY16 (300.0) (299.6) (58.2) (74.4) (75.2) (16.5) (28.0) 162.5 167.4 (0.4) (3.7) 45.9 45.9 35.4 2.7 4.2 Variance +82.1M +81.7M +73.4M +33.8M - - - +1.7M +5.7M +4.6M +0.5M +0.5M 34.4M 13.8M 13.7M - - - 7.9M 0.4M 2.7M • • • • properties Gisborne and Rangiora the Groups Newmarket, proceeds from the sale of Divestment include $56.4M last year $53.8M compared to discontinued capex was excluding property and Capital expenditure restructuring costs Other items include improvement working capital components of the payables are key receivables and increased Lower inventories, FY17 ANNUALRESULT — Modest sales growth and

some margin pressure

11 | |

E E resulted in slightly AREHOUS

W reduced operating E TH Margin —

THE WAREHOUSE | 12 The WarehouseThe Sales $M Stores Capital Expenditure Operating Profit CODB Gross Profit Operating Operating Margin CODB% Gross Margin Sales Same Store Same Store - FY17 Annual Result AnnualFY17 FY17 1761.4 +1.2% 32.0% 36.8% 564.4 648.9 4.8% 36.4 84.5 92 1,760.7 FY16 +4.1% 31.9% 37.0% 562.3 651.7 5.1% 41.3 89.4 92 Variance - +10bps 290bps - - +0.4% 30bps 20bps - - - 5.4% 0.4% 0.0% 4.9M 0 —

THE WAREHOUSE | 13 The WarehouseThe • • • • • • • The Newmarket store continued to trade despite the sale of the freehold title the freehold of sale despite the tradecontinued to store NewmarketThe relocated store Tauranga in newstore One H1 to H2compared in improved performance , 5.4% by reduced Profit Operating C date to results encouraging seen have and we (EDLP) LowPrice Day Every to an transformation Began margin and sales both in good growthwith yearthe throughout trading Apparel Strong S ame Store Sales were up 1.2% for the full yearfull the for up 1.2% Sales were ame Store ODB was well contained, increasing by just 0.4% compared to FY16to compared 0.4% increasing just bywellwas ODB contained, . In particular our new ourdesigns well wereparticular received customers In by - Crossing. Crossing. FY17 Annual Result AnnualFY17 Wainuiomata closed and Queenstownclosed Wainuiomata FY17 ANNUALRESULT — Warehouse Stationery

15 continues to deliver

| | Y Y

R Operating Profit growth

TIONE

TA S

E with steady underlying

performance and close AREHOUS W management of CODB —

WAREHOUSE STATIONERY | 16 Result Stationery Warehouse Operating Profit CODB Gross Profit Sales $M Stores Capital Expenditure Operating Margin CODB% Gross Margin Same Store Sales FY17 33.3% 39.0% - 108.6 278.2 5.7% 0.3% 15.7 92.9 3.9 69 - FY16 +6.5% 33.9% 39.0% 108.7 279.2 FY17 AnnualFY17 5.1% 14.3 94.4 5.3 66 Variance - +60bps 680bps - 10.2% 60bps - - - - 1.7% 0.2% 0.3% 1.4M 0bps +3 —

WAREHOUSE STATIONERY | 17 Result Stationery Warehouse • • • • • • Margin Margin increasing by60 points basis to 5.7%. Another strong completed completed an upgrade of our webstore platform Capital Expenditure reduced to $3.9M and was largely store related. In FY16 we and Johnsonville bringing total stores to 69 Three new stores were added during the year; Tauranga Crossing , Hawera a percentage of sales Ca increase in sales and gross margin Print Our and Copy Centre category continued to grow with a significant cycling priceof apostal increase in FY16 Sales were flat (Same Store declinedSales by0.3%) reflecting in part the reful management of CODB throughout the year with continued reduction as result result for ourWarehouse Stationery business with Operating - FY17 AnnualFY17 FY17 ANNUALRESULT — An outstanding

performance from Noel 19

| | Leeming resulting in G G

LEEMIN year on year operating L

NOE profit growth of 60% —

NOEL LEEMING | 20 Noel Leeming Noel Operating Profit CODB Gross Profit Sales $M Stores Capital Expenditure Operating Margin CODB% Gross Margin Same Store Sales - FY17 +6.4% 18.8% 21.2% 152.2 171.5 810.7 FY17 Annual Result AnnualFY17 2.4% 10.4 19.3 77 FY16 +14.2% 19.0% 20.6% 142.5 154.6 752.1 1.6% 12.1 6.9 75 Variance - +59.9% +11.0% +80bps +60bps 780bps - +6.8% +7.8% +3.5M 20bps +2 • • • • • Crossing and Tauranga during FY17; Takapuna, added to the network Twonew stores were of sales reducing as a percentage influenced the results CODB control positively on improving reflecting the level of focus level of sales up 60bps, increased ahead of the Gross Profit dollars flowing through to sales market share growth Great Noel Leeming in FY17 Very strong result from momentum with margins FY17 ANNUALRESULT — Torpedo7 Group sales

grew 6.1% with strong 22

| | growth coming from the

7 7 1-day business and the ORPEDO T retail stores —

TORPEDO7 | 23 CODB Gross Profit Sales $M Stores Capital Expenditure Operating Profit Torpedo7 Operating Margin CODB% Gross Margin - FY17 Annual Result AnnualFY17 FY17 22.7% 24.4% 157.7 1.7% 35.7 38.4 0.6 2.7 12 FY16 23.4% 25.7% 148.7 2.3% 34.8 38.2 0.8 3.4 11 Variance - 130bps - - - +2.7% +0.6% +6.1% 20.9% 60bps 70bps - 0.2M +1 • • • • • network during the year Auckland wasadded to the A Torpedo7 clearance outlet in $2.7M in FY17 by 20.9% from $3.4M in FY16 to Overall operating profit declined resulted in 70bps Focus on CODBsavings ( No1 Fitness inventory adjustment aged inventory and a one Margin pressure from clearing year sales growth of The retail stores delivered strong - 130bps) led to reduced GP% 15.7 improvement % year on of of $0.6M in - off FY17 ANNUALRESULT —

FINANCIAL SERVICES | 25 TWGFS • • Expenditure Capital Receivables Finance NPBT $M plan the future of that business $1.5M) and weare working withDiners International to Diners Club (NZ) remains, (an annual loss of around in our channels but provided byFinance Now. Warehouse Money products willcontinue to be offered - FY17 Annual Result AnnualFY17 FY17 (12.6) 67.4 2.5 FY16 (7.1) 73.6 9.0 - 76.3% - - 8.4% 6.5M • • • • • statements operation in the financial Reclassified as a discontinued assets making, therefore less than net reflecting the business is loss Purchase price of $18M September to year approved and announced Sale to Finance Nowwas Transformation focuses on the Retail Services Decision to sell Financial book than was anticipated activity rate from the receivables base and slower trajectory from H1. A smaller Financial Services in line with Second - end, and completed 9 half half performance from as as our Group Strategy prior - FY18 Strategic Update

THE WAREHOUSE GROUPLIMITED

FY17 ANNUALRESULT

FRIDAY, 22 SEPTEMBER 2017 —

The Warehouse Group — Introduction

With increasing competition and limitations of our technology and

operating model, we have accelerated the fundamental transformation of 28

| | the retail business to ensure a sustainable business. P P

GROU This has necessitated the following: E • a refocusing of our priorities;

AREHOUS • an improvement in our ability to execute change quickly and effectively W E • the decision to exit Financial Services to de-risk the business and free TH up capital and management time. — Sale of Financial Services

• Focus on transforming the retail business, and de-risk the capital demands of a sub-

scale Financial Services business 29

| | • Continue to offer financial solutions for our P P customers but now in partnership with an

existing provider

GROU E • Sale completed 9th September 2017 to SBS Bank (Finance Now) for consideration $18M, Notes: AREHOUS resulting impairment on software of $17m W • FY14 year of acquisition is for 5 months only

E • FY17 stated before impairments TH

• Removing a drag on Group earnings • Focus capital and effort on the Retail Transformation • Build on an existing partnership with Finance Now —

THE WAREHOUSE GROUP | 30 • • • • • • Operatingmodel changes mindset engage our team and shift to a customer Embarked on a culture transformation project to re execution decision For our teams the changes have clarified roles and duplication underway. Work to streamline processes and remove with expectations and in costs restructuring savings Annualised process improvement, and cost reduction. excellence, encouraging operational best practice, Centralised support functions to become centres of functions. leadership of retail brands, and centralised support Successful integration of operating structures and - making rights, enabling a focus on - centric - line - One Net Reduction in roles operational costs. and reductions in other Annualisedsavings salary Impacts - time time restructuring costs $10m $15m Estimated 130 - - $13m $20m Actual $12m $17m 143 — Our vision and strategy remains unchanged

Our vision is to build a company that delivers long-term sustainable profit growth and helps Aotearoa flourish

Our strategy is to be New Zealand’s most successful retail group both in terms of relevance to

customers, and in sector profitability

1

3

| |

P P

GROU

E

AREHOUS

W

E TH — Made significant headway in FY17 against our strategic pillars

PRODUCT DIGITAL PROCESS CSR

• Increased number of • Online Group sales • Made key international • Raised $5.6m in FY17 hires to build up the brands and sales year-on-year growth of • Launched Red Shirts 2 transitioned to Every 18.4% right team 3 in Community

| | Day Low Pricing • Expanded • New operating programme, a

P P (EDLP) distribution centre structure to drive partnership with the • Reduction of 15k sustainable Ministry for Social • Innovations in online active Store Keeping profitability and reduce Development GROU fulfilment to build same complexity

E Units (SKU)s day/next day capability • Rolled out customer • Increased direct including testing 2 hour • Sale of Financial soft plastics recycling sourcing and delivery using electric Services Business to a further 11 stores, now 47 in total extended capability vehicles • Sale of Newmarket AREHOUS with opening of Indian property • Commitment to

W • Creation and testing of Office transition 30% of our E “Leon”, an online bot • First trial of store fleet to EVs by the end TH • Benefits of improved on the Noel Leeming within a store to of 2019. design and curation website explore options for seen in apparel, • Using AI for our HR redeploying space • Significant public accessories and recognition and intranet • Extensive strategy footwear category awards following our review with the Board with a growth of 2.0m • Started discovery for “Family violence- it’s including independent units sold (sales migration to retail cloud not ok” and gender advice to define retail revenue of $22.3m). and process mapped transition policies. for ERP preparation transformation project

32 — Building a team with international talent

Chief Information and Digital Officer Timothy Kasbe hired in May 2017 to lead our digital and technology transformation. He will lead the modernisation of systems as we invest in the future to extend our digital and e-commerce capabilities.

Chief Customer Experience Officer David Benattar hired in October 2016 to oversee the Group's redesign of CSR and sustainability and lead development of digital platforms to support customer needs in specific life stages, beginning with education.

Chief Marketing Officer We are in the advanced stages for the hiring of a world class Chief Marketing Officer. More to be announced. —

THE WAREHOUSE GROUP | 33 • • • • • • • not an option an not is nothingDoing factual: Counter expanded risk of deliveringsustainable profits fixed asset base and heavycapital consumption complex operating model dominated by large Newcompetitive threats, and an inflexibleand and at a levelbelow FY17 sales growth offset, future earning wouldbe flat Under this scenario, and allowingfor a levelof profitability trend wouldcontinue Warehouse performance and declining The counter factual analysis assumes The sales and almost 80% of operating profit The Warehouse business represents 60% of rather than operating cash flow Acquisition has been funded by asset sales set the decline in The Warehouse profitability Inorganic M&A driven revenue growth has not off by declining operating margins in The Warehouse Performance over the past 7 - 10 years impacted - Note reported operating profit for continuing retail continuingforoperationsprofit operatingNotereported — External forces of change

Customer Expectations

4

3

| | P P

Global Sourcing Technology Connectivity Global Competition

GROU

E

AREHOUS

W

E TH • Power shifted to consumers and retailers need to engage in ‘new rules” of retail

• Our retail business model must evolve to utilise new technologies and platforms which connect consumers across global marketplaces to create an experience that differentiates us from our competition

• Acceleration of our transformation plan is now an imperative to respond to emerging trends — Moving to execution: Retail transformation

Fix Retail Fundamentals Invest for the Future

5

3 | |

P P Technology Enablement

GROU E

Operating Reducing EDLP st

Model complexity 21 Century Retailer

AREHOUS W

Reducing the Leverage Driving efficiency Create a mobile first platform to build E range of SKUs operational and reduced digital capabilities and ecosystems to TH and changing synergies, CODB through respond to customer needs mix from HiLo to remove technology driven EDLP to drive duplication in automation and Effortless, personalised and seamless gross margin product range productivity customer experience and interaction and lower and optimise gains, direct across multiple brands and omnichannel marketing and store footprint sourcing and operational and costs increased speed Innovative ways to engage and reward costs to market, and customer loyalty and create value added streamlined service offerings fulfilment —

THE WAREHOUSE GROUP | 36 Step change to our approach to IT ourto approach changeStep • • • • more customer responsive, and delivermodern services Underinvestment in technology and legacy systems that need to be updated to become rather than capex) Significant investment willbe required but we willapproach cost differently (ie opex centric data capability Currently in discoverymode, although individualelements are in flight such as foundational Keycomponents of IT enablement strategy: • • • • • Deployingmachine learning and AI Focus on use and application of data Transforming business processes to be more efficient and cost effective Adoption of SaaS applications Cloud infrastructure —

The Warehouse Group —

THE WAREHOUSE GROUP | 38 savings savings cost realise and for customers EDLPto Move simplicitydeliver to * Excludesmusic & DVD, cards, mags and Schooltex • • • • • • • todate Progress • • • • Rationale profit profit and cost efficiencies Changes have seen improvements across all key retail metrics of sales revenue, gross Re gross margin increase withcorresponding Childrenswear is the leading category transitioning nearly Private label brands rationalised from more ~ In terms of range curation At Progress EDLP Simplification in product ranges to driveefficiencies and deliver a clear offer. everyday Establish a reliable “best value” price for customers Customers 36k 36k active SKUs* e - design design of marketing mixand activities nd of FY17 approx. 44% of sales at EDLPvs 25% of sales at end of FY16 a proven model in US, Europe, and Australasia whilst Hi/Lo failing globally towards EDLPand product range rationalisation over the last 12 months ” have told us they want a bargain everyday 12.7% 12.7% sales revenue growth vs the same period last yearand 13.7% almost almost 15k active SKUs have been removed. At end of FY17 ~ 150 at end of FY16 to - “Where “Where everyone gets a bargain 100% to EDLP in FY17 H2 ~ 80 at end of FY17 —

THE WAREHOUSE GROUP | 39 savings savings cost realise and for customers EDLPto Move simplicitydeliver to • • • Key considerations • • • • • Targets value chain made in establishing an in Greater emphasis on private label may take time to be embed. Investment has been require discounting. The clearance process willneed to be carefully The keytransitional risk is the need to clear discontinued products/SKUs which will messaging from September FY18onwards Mitigate any unfavourable customer response with the launch of newadvertising reduction in the number of mailers vsFY17. Further savings Moving from a weekly to fortnightly advertising promotional programme, including a 35% Under 30 private label brands Removal of approx. 30k inactive 31k active SKUs byend of FY18 Targeting substantial EDLPoffer byend of Q1 FY18 - house design team, which has been supported throughout the SKUs through clearance ( ~ 100% of total sales) through digital transition. balanced —

THE WAREHOUSE GROUP | 40 term property footprint options footprint propertyterm longtest to into Red stores Blue • • • todate Progress • Rationale Next locations identified point of sale whichwill accelerate future execution Successful integration of Blue and Red Airport site launched on 30th April 2017 and has provided valuable learnings: one roof Blue into Red is a series of tests to assess the impact of combining two • • • • • • • A number of leases due for renewal in the next 3 years Occupancy costs Impact of digitalisation on the stationery market Globally space is being reconfigured in different ways Online shopping channel growth offers offers and Blue customers like longer store opening hours positive customer feedback combined sales have tracked ahead of other control group stores. , , with a curated product range, given: - Red customers happy with new product ranges and operating model and corresponding systems and brands under —

THE WAREHOUSE GROUP | 41 term property footprint options footprint propertyterm longtest to into Red stores Blue • • • Key considerations • • • • Targets presence in those locations For some exiting leases there maybe opportunity for other TWG brands design. Important to have keyworkstreams focused on marketing, staff training and in communications plan and continuous evaluation cycles including customer feedback Mitigate any negative blue customer response or customer confusion by clear marketing into our ability to repurpose space according to customer need Overall targets: We willbe specifically testing the following things as part of the trial whichwill inform Plan to pilot 4 next 1 Further validation to continue. Currently assessing 11 store sites, for implementation over • • • Impact Impact on total basket size Impact on conversion for both Red and Blue Impact on business customers - 2 years. aim is to reduce property footprint and lease costs and build greater flexibility - 6 examples before we set rollout targets without a - store store —

THE WAREHOUSE GROUP | 42 to reduce complexity to reduce Aunderway projects of key number Key Workstreams Rationale • • • • • Data and analytics Dynamic buying and sourcing Fulfilment and logistics These willenable the business to respond faster and reduce CODB A number of Reposition from brand led • • • • • • • • • • • • • Testin Data driven marketing to drive personalisation and ROI Developing capability to enable metric based decision making Fullyintegrated sourcing and merchandise team Design capability and technical support, enabling Delivera diversified low cost supply base through wider Asian production capabilities Continuing to lower cost of goods sold through sourcing direct Developing a nextday deliverymodel Improved freight utilisation Reduced SKUefficiencies in distribution and warehousing, reducing handling costs Improving product speed and readiness to shop floor, starting with apparel Domestic supplyEY chain g projects projects underway to be smarter, less complex, more agile and streamlined. dynamic pricing and exploring options for personalised pricing network optimisation starting withDC consolidation opportunity assessment completed to solution solution focussed to respond to customer needs private label growth —

The Warehouse Group — Our approach to the future

• Pivoting the business from supply driven to demand driven means meeting the customers’ needs in different ways, not only through traditional Brand channels.

This will mean partnering with others and redefining how we do business closer to 44

| | the point of need. P P • We have made key hires with relevant global experience to help us move quickly

GROU • Developing a culture of innovation E • Agile methodology

• Speed to market

AREHOUS W

E • Test and learn TH • Tech incubation to be ringfenced as a separate segment to look at opportunities beyond our current retail footprint. This will enable our existing retail business to focus on execution • We have many projects in the pipeline with three specific examples in education, loyalty and delivery time —

THE WAREHOUSE GROUP | 45 exploringopportunities Changingthe waywe thinkand • • • • Delivery • • • • • Loyalty and value exchange • • • • • Education option option of hour 2 delivery at an additional cost in defined a Auckland region. currently Website being developed enable to a trial withwhere WSL customers selected will be able to select fulfilment capability, using electric vehicles 2 hour delivery with trials The Warehouse, Warehouse Stationery and Noel Leeming in selected areas to test Testing subscription a based delivery model through collaborationa NZwith Post Innovation fulfilment in and logistics demonstrates commitment to improve be Will incorporating CSRa element giveof back environment Benefits include unified a single view of the customer enabling personalised to drivein offers traffic EDLP Payments Currently have a number of discrete loyalty and payment programmes across brands shopped brands 2 more or at TWG in the last year Opportunity to reviewand consolidate to leverage scale and crossover customers of successful If integrated shopping be to extended beyond education other to lifestages and Nov ‘17 Now Nov to ’17: Co lifetime value. to Potential expand functionality richer withengagement to move beyond one Developing a consolidated shopping to platform cross brand test selling, fulfilment, and delivery, powered AI. by – Feb Feb ’18: Trial bundled shopping basket with 10 Auckland schools during back platform as a a as vehicle to collect data and deliver offers and rewards could that be community based - creation, creation, design, development, testing customer customer experience - off off transactions and create - 48% 48% of customers - to - events school —

The Warehouse Group

— The plan and key milestones

47

| |

P P

GROU

E

AREHOUS

W

E TH — Strategy modelling- range of outcomes

Strategy Modelling Undertaken detailed financial modelling of the strategic plan and options including sensitivity analysis of the key risks and downsides Engaged external advice to test our assumptions

48 Reviewed in depth with the Board | |

P P There is a significant range in the potential outcomes due to a number of uncertainties that we must manage,

influence or respond to.

GROU E • Costs will increase in FY18 as we invest in technology Margin Levers transformation, new capabilities and skills, wage

AREHOUS inflation, and clear discontinued ranges from stock

W Negative Positive E EDLP transition/Range EDLP gross margin uplift • The annualised costs released in the restructure of TH Reduction clearance of $17M p.a. will be more than offset by these discontinued inventory Direct sourcing and home investments in FY18, however these new initiatives ranges brand contribution unlock long term productivity and structural cost Marketing investment to Revenue diversification savings in future years support EDLP transition and awareness Reduced variable operating costs under Transition to Cloud and EDLP model and reduced SaaS solutions from ranges legacy systems Processes automation Building capability in digital Property optimisation — Existing capital structure will support retail transformation

• Solid balance sheet with gearing trending down

50 • Our target gearing levels are to maintain

| | gearing below 30% in the 3 year period P P

• While a high dividend payout ratio is GROU

E maintained, capital structure is less sensitive to volatility in operating cashflows and more sensitive to capital

AREHOUS investment W E • Exit from the Financial Services business TH will benefit cash flows by approximately $40m over the next four years

• Sale of the Newmarket property has reduced gearing in FY17

• Retail transformation expected to be funded within existing capital structure —

The Warehouse Group — Dividend

• The dividend policy is currently based on paying between 75% and 85% of adjusted net profit after tax of the retail group (excludes the financial services

business which has now been sold)

51 | |

P P • The Board will continue to monitor and review the dividend policy to ensure that

GROU the business drives optimal long term E shareholder value

• The Directors are pleased to confirm the AREHOUS

W final dividend for FY17 at 6.0 cents per E share, bringing the total dividend for TH FY17 to 16.0 cents per share fully imputed

• Total Dividend pay out represents 81.4% of Retail Group Adjusted Net Profit After Tax

• Record Date: 24 November 2017

• Payment date: 7 December 2017 — Outlook & Full Year Earnings Guidance

• We expect FY18 to be a year of operational investment in the business to create the path for future earnings growth.

• The earnings drag of Financial Services has been removed and will be replaced in the short term

52 with some one-off investments and costs that will drive the transformation and evolution of the

| | business. P P

• In FY18 this will include: GROU

E • completing the transition to EDLP in The Warehouse • costs of clearance of discontinued product ranges in The Warehouse

AREHOUS • additional trialling of our store within a store concept W

E • continue transition from our legacy IT systems to modern cloud based systems TH • investigating the establishing of a new business segment for digital innovation that will be separated from the Retail business

• As in previous years, the earnings outlook for FY18 will be dependent on the critical Christmas trading period. The transformation program introduces additional elements and uncertainty into our forecasts. Earnings guidance for FY18 will be given at the end of the second quarter.

• We will also be holding an Investor Day which will go into much more detaill on our strategy and execution on Thursday 9th November 2017