Group Presentation

Second quarter 2011 2 Second quarter Group Presentation '11 Cautionary statement

● All st at ement s oth er th an st at ement s of hi st ori cal f act mad e i n thi s present ati on, i ncl udi ng, with out limitation, those regarding ’s financial position, business strategy, plans and objectives of management for future operations (including development plans and objectives relating to ’s renewal and transformation plan, the roll out of “Megastores”, its focus on increasing its presence on the web and its ongoing expansion in the Nordics and Central and Eastern Europe), are forward lookinggpj statements. Such statements are based on current expectations and are subject to a number of risks and uncertainties that could cause actual results to differ materially from any expected future events or results referred to in these forward looking statements. ● Such forward-looking statements are based on numerous assumptions regarding Dixons Retail’s present and future business strategies and the environment in which Dixons Retail will operate in the future. Among the important factors that could cause Dixons Retail’ s actual results, performance or achievements to differ materially from those in the forward-looking statements include, among others, the continuing impact of the economic downturn on consumer spending, the actions of its competitors, difficulty in implementing the renewal and transformation plan, stock availability from or change in the commercial relationships with third-parties whose products we sell, failure to meet debt obligations, changing technology or consumer preferences, seasonality of our business, the effects of deflationary pricing on money margins and other such risk factors. Forward-looking statements should , therefore, be construed in light of such risk factors and undue reliance should not be placed on forward-looking statements. These forward-looking statements speak only as of the date of this presentation. Unless otherwise required by applicable law, regulation or accounting standard, we do not undertake any obligation to update or revise any forward looking statements, whether as a result of new information, future developments or otherwise. ● The information, statements and opinions contained in this presentation do not constitute a public offer under any applicable legislation or an offer to sell or solicitation of an offer to buy any securities or financial instruments or any advise or recommendation with respect to such securities or other financial instruments.

3Second quarter '11 Group Presentation Pan-European operations

Other UK & Ireland Nordics International e-Commerce

Sales £4.0bn £2.1bn £1.5bn £0.9bn Share of Group 47% 24% 18% 11% No.1 Leading pure play internet Market position No.1 No.1 No.2 Italy, Czech operator across Europe No.1 Spain Computing specialist EBIT £71.1m £97.4m (£8.3m) £11.3m No. stores 683 269 323 n/a No. employees 22,323 7,296 7,573 1,413

Data for the financial year to, or as at, 1 May 2010, as appropriate

4Second quarter '11 Group Presentation Renewal & Transformation plan

• Announced May 2008 • Progress to date very encouraging and ahead of expectations • Plan involves: 1. Focus on the customer 2. FthtfliiiitiFocus the portfolio on winning positions (lt)(complete) 3. Transform the business 4. Win in the internet market 5. Reduce costs

Target of 3-4% EBIT return on sales in ttehe m eduedium term

5Second quarter '11 Group Presentation 1. Focus on the customer Service led business model

Customer insight

After-Sale Store Internet Products Support Service

•Sales advice •Multichannel •Full range •Scale •Easy to shop •Navigation •Exclusivity •Unbeatable Offer •Playtables •Specialist •Own brand •Higher standards

Value Choice Service

6Second quarter '11 Group Presentation 1. Focus on the customer Four pillars supporting one integrated service offer

Delivery & Setup/ Help & Protect installation upgrade support

● Market leading ● Personalised ● “Help me ● Peace of mind if delivery & hassle free set up understand it” something goes installation ● Make it easy for ● Remove the wrong ● Flexible, reliable the customer frustration of ● Always there to and unbeatable ● Range of technology help get it fixed value upgrades ● Telephone, ● Choices to suit designed to online and in- the customer maximise the home support performance of the products for customers

7Second quarter '11 Group Presentation 2. Focus the portfolio on winning positions UK & Ireland

• Significant upside from R&T plan • 250 Stores refitted including 25 Megastores – 60% of sales to date – Focus on dual branded stores – Consistent first year gross profit uplift of 20% – 70-80 stores planned for 2011/12 • Transformation of service infrastructure – Improved delivery operations – Enhanced services under KNOWHOW • Stable gross margins over last 3 years • Challenging environment – Gaining market share across all major categories – Strong World Cup promotion – Launch of iPads

8Second quarter '11 Group Presentation 2. Focus the portfolio on winning positions Nordics

• Significant market share gains over last 2 years • EBIT margin of 4.6% • Favoured operating model for the Group – Efficient low cost model – Strong customer perception – FhfitFocus on cash gross profits • Internet sales are growing opportunity – Now 6% of total sales • Store refurbishment programme making progress – 19 Megastores now operational – 33 superstores in new format – Gross profit uplifts of 15%

24 weeks to 16 October 2010 vs. 24 weeks to 17 October 2009 For definitions see appendix

9Second quarter '11 Group Presentation 2. Focus the portfolio on winning positions Other International

Greece Italy

• Challenging market conditions • Turnaround ahead of plan • Cost reduction programme in place to • First half loss significantly reduced preserve profitability • EBITDA breakeven for the full year – Converted stores to – 1 Year ahead of target Megastores • Gaining share in a difficult market • 7 Megastores operational • 2 Megastores open • Market share growth

10Second quarter '11 Group Presentation 2. Focus the portfolio on winning positions Other International

CE & Spain

• Strong position in • Announced plan to exit store operations • Developing business in • £5m loss eliminated in 2010/11 FY • Refocused since disposal of and Poland • £30m cash exit cost • In Turkey 16 stores opened, focusing on Istanbul, Izmir and Ankara • First franchise store opened

11Second quarter '11 Group Presentation 3. Transform the business - Old Store Format

12Second quarter '11 Group Presentation 3. Transform the business New Currys Superstore Format, Watford

To see interactive 3600 images of new format stores go to www.dixonsretail.com/360

13 Second quarter '11 Group Presentation 4. Win in the internet market Customers and suppliers want multichannel retailers

Customers Suppliers

• Online research tool • Enables ranggpye display

• Convenience • In store experience • Touch, feel & look of products in store important for choice • Demonstration of prod ucts

• Collect@store • Sell up to higher value/quality • Reassurance and service • Colleague training • Well-known brand • Availability and pricing • Solution selling • After sales options eg delivery, • Advertising installation, repair

14Second quarter '11 Group Presentation 4. Win in the internet market Internet is a growing opportunity for Dixons Retail • Internet sales 16% of Group • Sales growth into multichannel – Multichannel driven by Reserve& Collect – Pure play brands driving higher unit growth – Integrated operating model • e-commerce investing in the platform – e-merchant – PIXplace – Underlying infrastructure – Relaunch of UK internet sites

24 weeks to 16 October 2010 vs. 24 weeks to 17 October 2009 For definitions see appendix

15Second quarter '11 Group Presentation 5. Reduce costs Reduce costs

• Organisation simplification and process improvements − £150m targeted over next 3 years

• Stock Management

− Stock turn improvements Cost savings − Buying – local and Group − Reductions in aged stock and returns

Pricing • Store operating costs Scale efficiency Product & Services − Staff rostitering − Optimise store footprint − From 600 to 450 stores − Mezzanines Sales growth − Energy efficiencies − POS efficiencies and simplification

16Second quarter '11 Group Presentation 5. Reduce costs Reduce costs cont’d

• Central functions − Removal of duplication − Brno – central services − Call centre diagnostics − Advertising

Base plan Example flex plan

Cost base £1.8bn £1.8bn

Inflation at 2% +£35m +£35m

Cost savings -£50m -£70m

Net investment in £15m £35m business and margin

17Second quarter '11 Group Presentation Flexibility in capex plans

• Over 350 stores transformed to date, including 60 Megastores − Core base providing cash and profit momentum

• Complete balance as soon as practical

• However, retain flexibility to respond to consumer environment

2010/11 2011/12 2012/13 2013/14

Maintenance £40m £40m £40m £40m

Renewal & £170m £40m to £120m £40m to £110m £100m to £150m Transformation

No. stores 125 60 - 125 60 - 125 80 - 150

18Second quarter '11 Group Presentation Cash and facilities profile

Pre-Christmas stock £360m

Post-peak stock RCF payments pective ss

Back to £54m school £310m transfer from promotions Bonds LC to cash ebt per Christmas peak DD e vv Cash erspecti Drawings on £360m RCF Equity p

19Second quarter '11 Group Presentation Bond and RCF profile

700

600

500 £360m RCF 400 £150m 300 £160m 2015 Bond 200 2012 Bond

100

0 2010 2011 2012 2013 2014 2015 2016 2017

• Bond repayments:- − £160m principal plus £55m net hedge cost due November 2012 − £150m principal due August 2015

• £360m RCF working capital facility due August 2013 − Renegotiate prior to 2012 Bond repayment

• Sufficient headroom within covenants

20Second quarter '11 Group Presentation Flexibility to meet capital commitments

Cash generation Cash requirements

Profits +£m Profits -£m

Capex flex +£50m to +£150m Pension fund -£6m to - £8m

Bond repayment -£160m principal Working capital +£10m to +£40m -£55m hedge cost

Warehouse +£55m to +£60m

Facility up to £100m

21Second quarter '11 Group Presentation Credit profile • Investment grade business profile − Large scale − Market leading positions − Geoggpraphic diversification − Efficient infrastructure • Strong liquidity position • Low on-balance sheet debt

• Cash generation and flexibility to meet Bond repayments

• Rating agency metrics adjust for operating leases (c.£3bn) − Store leases are an important driver behind our business model − Lease maturity profile provides flexibility − High quality property portfolio • Dixons has an investment grade heritage

22Second quarter '11 Group Presentation Summary • Rl&TftilikiRenewal & Transformation plan is working • Business is improving operationally • Strong consistent uplifts in new store formats across Europe • Gross margins stable over last 3 years • Customer satisfaction is improving • Growing market shares • Cautious about short term outlook • Significant opportunity for profit improvement • On target for 3-4% EBIT return on sales

23Second quarter '11 Group Presentation 24 Second quarter Group Presentation '11 Appendices

25Second quarter '11 Group Presentation Financial recovery Revenues EBITDA

PBT Free cash flow £m 312.6 £m 300 250 235.8 230.5 150 133.3 200 28.1 50 ‐340.0 ‐50 100 90.5 56.1 06/07 07/08 08/09 09/10 ‐150 –Creditor deferral 0 ‐250 –Credit tightening 06/07 07/08 08/09 09/10 ‐350 Group free cash flow is stated on an underlying basis before restructuring costs 52 weeks to 1 May 2010 vs. 52 weeks to 2 May 2009

26Second quarter '11 Group Presentation Cash generative and low level of structural debt

£ million 09/10 £ million 09/10 Opening net debt (477.5) Underlying profit before tax 90.5 Equity issue 291.3 Depreciation & amortisation 128.6 Free Cash Flow (pre restructuring costs) 28.1 Working Capital 39.7 Tax (31.9) Restructuring items (45.7) Capital expenditure (165.3) Acquisitions & disposals (7.0) Other (33.5) Discontinued operations (8.6) Special pension contribution (12.0) Free Cash Flow (pre restructuring costs) 28.1 Other items 10.8 Closing net debtdebt (220.6)

• £28.1m Free Cash Flow (pre restructuring costs) • Net Debt significantly reduced • Improved Working Capital − Strong focus on cash management − Stock t urn +12% year on year − £291. 3m equity issue proceeds − Strong supplier support • Net debt : EBITDA down from 2.2x to 0.8x • Capex focused on investment in Renewal • Fixed Charge Cover up from 6.0x to 8.7x and Transformation ppgrogramme

52 weeks to 1 May 2010 vs. 52 weeks to 2 May 2009

27Second quarter '11 Group Presentation 1. Focus on the customer Plan built around the customer

• Customer plan drives decision making • Detailed plans to deliver on each principle • Continuous improvement of the shopping trip for customers

Greet – Engage –Solution – Tailor – Complete

28Second quarter '11 Group Presentation 1. Focus on the customer New formats delivering improved shopping trip

ATV change of new formats vs Currys PC World Aug-10 control

Golden Families Dec-09

Quality Seekers Jan-09 Home Movers

Tech Fans 0% 20% 40% 60% 80% 100%

Change in average transaction value amongst key customer segments in the Excellent Good Average Poor reformatted stores versus unreformatted stores Based on mystery shopping surveys of UK stores

Grassroots Mystery Shopping Greet Engage Solution Tailor Result

Dixons RtilRetail 79.6% 48.4% 87.3% 74.9% 83.8% Score %pts var to +16.6% (14.4%) +19.9% +16.7% +28.4% competition Based mystery shopping surveys of Dixons Retail and competitor stores

29Second quarter '11 Group Presentation Electrical market outlook is positive

Product Innovation / New Categories Price Deflation Online Penetration Housing Market Economic Growth

• Innovation brings • Rapid innovation • UK and Nordic • New construction, • Electricals are new products and cycle leads to markets have high repair and predominantly improved deflation in brown broadband maintenance drive a discretionary functionality, e.g. 3D and grey goods but penetration and proportion of white purchases TVs, Apple iPads drives volume maturing online sales goods sales • However, increasing • New content drives • Low frequency of platform • Consumer sentiment penetration of digital hardware innovation purchases limits • Opportunity to influenced by state of technology in the and proliferation e.g. price deflation impact increase range of housing market home drives social media, apps, on total market sales goods and • Majority of white reppylacement cycles cloud computing – i.e. consumers availability of product goods market is as these products • Sales driven by trade up information replacement and not become less structural shifts e.g. • Lower price points • Provides opportunity reliant on housing discretionary analogue to digital, drive faster for multichannel transactions • Economic backdrop standard format to replacement cycles retailing and will determine HD and proliferation of increases syygnergies whether customers • Innovation drives products between internet and buy up or down price new service store-based retailing points requirements e.g. • Market tends to grow data backup, TV at a rate at or installation exceeding economy during boo m yea rs, but same is generally true during a slowdown

Positive Positive Positive Neutral Neutral

Outlook based on management expectations

30Second quarter '11 Group Presentation Full category coverage

Category Products Key brands White goods Major Appliances Small Appliances Miele Bosch Hoover Refrigeration Kitchen appliances Indesit Zanussi Kenwood Laundry Personal care Braun Samsung Hotpoint Cooking Accessories Whirlpool Dyson Rangemaster Accessories LG Philips Siemens DeLonghi Krups

Brown Goods Vision Audio Samsung LG Panasonic Televisions MP3 players Matsui Canon Nikon (plasma, 3DTV, large screen, portable) DAB radio Olympus Bose Sony Blue ray and DVD players Speakers Kef Toshiba Sharp Surround sound systems Component systems Lumix Apple Roberts Accessories Accessories Logik Pure JVC

Photography Communication Digital cameras Fixed line (point and shoot to SLRs) Video cameras 3G connectivity Accessories Mobile phones ()

Computing Laptops Desktops Advent HP Sony Netbooks iPads/Tablets Apple Kodak Keyboards, Mice, webcams Logitech Microsoft Norton Printers Samsung Nintendo Asus Games consoles Packard Bell WD Toshiba Accessories Acer Netgear Belkin Services TechGuys Installation Delivery Help & Support Set up Repp&air & Fix Upgrade

31Second quarter '11 Group Presentation Market leading specialist electrical retailer

Specialists Mass Merchants Independents Pure Play Internet

Currys Comet Argos John Lewis Richer Sounds PC World Best Buy ss Asda Sevenoaks Dixons.co . uk Elkjøp Jessops Carrefour Sainsbury’s Many small family Amazon UniEuro Media Markt Auchan Corte Inglés owned shops Dabs.com Electro OnOff CDiscount World SIBA Key Brand Key KtKotsovo los EtExpert PC City Darty

Wide range Edited range Limited range Wide range

istics Assisted sale Non-assisted sale Assisted sale Limited help Help & Support Limited help & support High level of service No service Specialisation Entry Price Point Lower value Value Value Value Character

40% 20% 25% 15% Market Share of

Based on company estimates

32Second quarter '11 Group Presentation Potential of dual-branded Stores

• Provides access to the PC World brand in existing Currys markets • Exploits different customer offering – 18% overlap between Currys and PC World customers • Greater stock efficiency, with one consolidated range to display • BtfbthldiBest of both worlds in co lleague know ldledge and selling skills – Clear branding of different expertise across the store • Tech Guys service centre in store • Opportunity to consolidate two stores in smaller catchments – Praggppppymatic approach to property – Long term reduction in costs • 15,000ft2 to 35,000ft2 – average rent of £18 - £25 per ft2

33Second quarter '11 Group Presentation Megastores operate enhanced model • Currys and 2-in-1 formats • 35,000 – 55,000ft2 – average rent of £22 - £28 per ft2 • c.£100m+ catchment • Range dominance – Many more branded supplier concessions – Premium executions (e.g. hifi studio, coffee area, live kitchen) • Business structure – Top calibre Store Director remunerated in line with store performance – Department Managers with greater scope for product specialists • Stock management key – FtFast-pacedfd, frequent repl eni ihshmen t – Stock disciplines • Up to 70 locations identified – Standalone Currys as well as combined 2-in-1s – Majority within existing estate

34Second quarter '11 Group Presentation Improving the product range

BRANDS 4 3 1 2 4 5 SKUS 11 4 1 5 11 15 £850.00

£800.00

£750.00

£700.00

£650.00

£600.00

£550.00

£500.00

£450.00

£400.00

£350.00

£300.00

£250.00

Competitor 1 Competitor 2 Competitor 3 Competitor 4 DSGi 09/10 Dixons 10/11

35Second quarter '11 Group Presentation Technology cycle

• Technology cycle is stronger than ever Hardware Content • ThTechno logy is par tft of peop les lives • Content is increasingly personalising usage • Multiple devices for multiple uses • New products, wider ranges, faster replacement cycles • Increasing product efficiency • Supplier relationships enable Dixons Retail to have the widest range to meet customers needs

36Second quarter '11 Group Presentation 3. Transform the business Currys/PC World 2-in-1 Superstore,

To see interactive 3600 images of new format stores go to www.dixonsretail.com/360

37 Second quarter '11 Group Presentation 3. Transform the business Currys/PC World 2-in-1 Megastore Fulham

To see interactive 3600 images of new format stores go to www.dixonsretail.com/360

38 Second quarter '11 Group Presentation New Megastore Format, J9 Birmingham

To see interactive 3600 images of new format stores go to www.dixonsretail.com/360

39Second quarter '11 Group Presentation Elkjøp Megastore - Barkaby,

To see interactive 3600 images of new format stores go to www.dixonsretail.com/360

40 Second quarter '11 Group Presentation Notes & Definitions

1. Underlying results are defined as excluding trading results from closed businesses, the amortisation of acquired intangibles, net restructuring and business impairment charges and other one off items, profit on sale of investments, net fair value remeasurements of financial instruments and, where applicable, discontinued operations. Discontinued operations comprise Hungary and Poland. Closed businesses comprise the operations of PC City in Sweden and Markantalo in Finland.

2. Like for like sales are calculated based on stores that have been open for a full financial year both at the commencement and end of the financial period, and are calculated using constant exchange rates. Customer support agreement sales are excluded from all UK like for like calculations. Operations that are subject to closure have sales excluded as of the announcement date. Stores subject to a refurbishment are excluded during the period of refurbishment.

3. The change in total sales for the Group excludes discontinued operations and closed businesses from the comparative period. No equivalent sales applied to the current period.

4. UK & Ireland comprises Currys, CurrysDigital, PC World, DSGi Business and TechGuys and as well as the operations in Ireland. Like for like sales exclude DSGi Business and TechGuys

5. Nordics comprise the Elkjøp Group, and no longer include the results of PC City Sweden and Markantalo which are now classified as closed businesses within non-underlyyging items.

6. Other International comprises Greece (Kotsovolos), Italy (UniEuro and PC City Italy), Spain (PC City Spain) and Electro World in Turkey, Czech Republic and Slovakia. The Discontinued Operations of Electro World Hungary and Poland are no longer included.

41Second quarter '11 Group Presentation