FRONT COVER Market Trends Australia & New Zealand United Kingdom & Ireland Dynamic evolution across 3 decades... Home improvement & garden market • “Hardware” to “home improvement & attractive & growing outdoor living” • ~£38 billion market in UK • 1980s, two markets… commercial or retail • 1990s, big box formats enter Fragmented & underserviced By 2010, evolution to one much larger market Developed economy with positive • Home improvement & outdoor living macroeconomic environment • Retail & commercial • GDP growth, low unemployment, low interest rates Australian market growing; now ~ A$48 billion • Long term growth anticipated UK market forecast to grow • Homogenous, major players ‘vertically capable’ Similar traits in New Zealand market The Bunnings Story (size: NZ$7 billion) Bunnings sales & EBIT* growth† We are the leading retailer of home improvement and outdoor 12 1,400 Acquisition of Homebase 11 1995 – 2016 products, a major supplier to project builders, commercial 1,200 10 Sales CAGR 15.9% 9 EBIT CAGR 19.9% tradespeople and the housing industry and trusted household 1000 8 7 800 name in Australia and New Zealand. 6 Acquisition of BBC 5 600 EBIT (A$m) Operating from a network of large warehouse stores, smaller format stores, trade 4 Sales (A$billion) 400 3 centres and frame and truss sites across Australia and New Zealand, Bunnings 1st Warehouse opens 2 200 caters for consumer and commercial customers. 1 0 0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 In February 2016, Bunnings acquired and now operates Homebase, the second *Earnings Before Interest and Tax †UK & Ireland results not included Sales (left axis) EBIT (right axis) largest home improvement and garden retailer in the UK and Ireland. Bunnings is owned by Wesfarmers Limited – a major Australian public company. The “Bunnings Warehouse” brand has Formats & Network been built on three strategic pillars: • Cornerstone brand • Large format, continually evolving • Low cost, warehouse merchandising • Flexible footprint including multi-level Lowest Price • Retail & commercial customers Our policy is lowest prices are just the beginning, • Smaller format and we’re committed to it. We don’t pretend to be • Acquisition & greenfield • Highly flexible the lowest at every instant on everything, which is • Regional & metro markets why we offer every customer a Price Guarantee. • Retail & commercial customers • Specialised ‘DIFOT’ format Widest Range • Narrow & deep ranging Bunnings Warehouses stock around 45,000 • Builds customer relationships • Lowest cost products. An expanded range is available through • Commercial ‘delivered’ market the Bunnings Special Orders service. Homebase was acquired as a platform to build a new Bunnings business Best Service • Right sized & well located stores • Latent capability for warehouse In Australia & New Zealand Bunnings employs merchandising & low cost operating model over 40,000 team members, many of whom have a trade background to provide customers with Store Network Location as at 30 June 2017 expert advice. A further 12,000 team members are Australia & New Zealand Homebase (BUKI) employed by Homebase in the UK & Ireland. Warehouse stores Smaller format stores Trade Centres Bunnings Warehouse Homebase stores Total 249 77 33 Total 4 251 Business Evolution 1886 1952 1989 1993 1994 2001 2016 2017 Today Arthur and Robert Bunning arrive Bunnings expand in the WA market, Bunnings purchase Alco Handyman Bunnings purchase McEwans Ltd Bunnings open their first Bunnings Purchased the BBC Hardware network Purchased Homebase network in United The first store in St Albans, Hertfordshire Bunnings continues to expand its operations in Western Australia. Bunning Bros adding building supplies to the operations in WA and merge in Victoria and South Australia Warehouse in the Melbourne including Hardwarehouse and Benchmark Kingdom and Ireland. United Kingdom opens. with new warehouses smaller format stores Pty Ltd is founded. Soon after they existing timber business; became operations to significantly increase enabling expansion of operations to market and Wesfarmers go to 100% stores in Australia and New Zealand allowing and trade centres throughout Australia, New purchase their first sawmill. a public company and the leading exposure to the D.I.Y. market. the east coast. ownership. Bunnings to expand internationally into the Zealand, United Kingdom and Ireland. supplier of WA hard woods to the New Zealand market. housing construction industry. .