ASX ANNOUNCEMENT Monday, 21 September 2020 2020 Annual Report Super Retail Group Limited (ASX:SUL) is pleased to provide its 2020 Annual Report to the market. For further information contact: Investor enquiries: Robert Wruck, Head of Investor Relations Ph.: 0414 521 124 E: [email protected] Media enquiries: Kate Carini, GM Corporate Affairs Ph.: 07 3482 7404 E: [email protected] This announcement was authorised for release by the Board of Super Retail Group Limited. For personal use only SUPER RETAIL GROUP LIMITED 20 ANNUAL 20 REPORT InspiringFor personal use only you to live your passion ABN: 81 108 676 204 2 SUPER RETAIL GROUP LIMITED ANNUAL REPORT 2020 SUPER RETAIL GROUP LIMITED ANNUAL REPORT 2020 3 CONTENTS 4 Chair’s Message 6 CEO’s Message 8 About Us 10 Performance Highlights 12 Our Strategy 14 2020 Events: Testing the Strength of Super Retail Group 16 Our Brands 16 Supercheap Auto 18 rebel 20 BCF 22 Macpac 24 Board of Directors 26 Executive Leadership Team 28 Our Team 30 Directors’ Report 49 Remuneration Report (Audited) 79 Financial Statements 142 Shareholder Information 144 Corporate Directory and Financial Calendar For personal use only 4 SUPER RETAIL GROUP LIMITED ANNUAL REPORT 2020 SUPER RETAIL GROUP LIMITED ANNUAL REPORT 2020 5 DEAR SHAREHOLDER The 2020 financial year stands out as the most challenging in our 16 years as a public company. For our team members, customers, suppliers and the wider community, the past 12 months have been extremely testing. A prolonged drought in many parts of Australia, floods and tragic bushfires devastated many communities. The ongoing COVID-19 pandemic ignited a health and economic crisis that has changed the way we live, work and shop. As with the broader retail sector, Super Retail Group has not been immune from the repercussions of coronavirus and its economic impact. However, the Group’s strong fundamentals combined with the extraordinary commitment and dedication of both our team members and the executive team in working collaboratively with our partners helped the business navigate the initial crisis and deliver a resilient financial performance for the year. The performance of the Group during this difficult period has reinforced the Board’s confidence in our strategy and demonstrated the importance of continuing to enhance our omni-retail capabilities. A sustained focus on executing our strategy and decisive action in response to the unfolding COVID-19 crisis and material changes in consumer behaviour were crucial contributors to delivering sustainable outcomes for all of our stakeholders. The Group’s financial position and operational performance has supported the Board’s decision to determine a fully franked final dividend of 19.5 cents per share. This represents a payout ratio of 55 per cent of underlying net profit after tax for the second half, in line with the Group’s policy. In its deliberations on shareholder returns, the Board considered a number Chair’s of factors, including its earlier decision to cancel the interim dividend, the performance of the business in the second half and the net cash position Message on the balance sheet following a successful equity raising in July 2020. We completed the $203 million equity raising with strong support from retail and institutional shareholders, including our founder and major shareholder Reg Rowe. Complementing our focus on shareholder returns, the Board takes great pride in how the issues faced across Australia and New Zealand during the year unquestionably reinforce the Group’s role in the community. In line with good governance and our Board succession planning, but the Group has a track record of not only surviving but thriving during the year we welcomed to the Board two highly credentialled in tough conditions. Our purpose is to provide solutions and engaging experiences that inspire our directors, Annabelle Chaplain AM and Gary Dunne. After a career customers to make the most of their leisure time. in investment banking with global financial institutions, Annabelle With a strong balance sheet and no net debt, we are ideally placed to deliver on our omni-retail strategy, enhance our footprint and During the year, our purpose has come to the fore for many of our customers. has diverse board experience with a range of ASX-listed companies capitalise on organic opportunities to grow market share as we Our team showed immense initiative and embraced innovative practices while Gary brings to the board more than 25 years’ experience in pursue long-term value for our shareholders. Despite the immense to ensure we did everything possible to continue to meet the needs of the operations and strategy with Coles, ALDI and Woolworths. challenges, we have not been distracted from this task. community. In a COVID world, with the lines increasingly blurred between On behalf of the Board, I would also like to thank Launa Inman, who work and leisure time, and growing focus on health, safety and wellbeing, retired as a director in October 2019, for her many contributions Thank you for your continuing support of Super Retail Group. the Group’s four core brands played an increasingly important role for as a committed and engaged director during her four-year tenure. our customers. For personal use only I thank my Board colleagues for their commitment to the Group The indefatigable efforts of our team members in delivering for customers, and sound counsel over the tumultuous past 12 months. The suppliers and our partners reflect the Group’s purpose and are crucial to the decisions taken by the Board leave the Group in a stronger position underlying strength of the business. In his first full year in the role of Group and well placed to create shareholder value over the long term. Managing Director and Chief Executive Officer, Anthony Heraghty ensured his executive team remain focused on optimising our capabilities and driving Looking ahead, there is no question we will continue to face fresh Sally Pitkin team member engagement during this extraordinary period. challenges in a period marked by ongoing volatility and uncertainty Chair 6 SUPER RETAIL GROUP LIMITED ANNUAL REPORT 2020 SUPER RETAIL GROUP LIMITED ANNUAL REPORT 2020 7 DEAR SHAREHOLDER The past 12 months will be remembered as a year like no other for Super Retail Group. As outlined by the Chair, natural disasters and the COVID-19 pandemic have tested the limits of your company’s resilience. I am pleased to report, however, that thanks to the remarkable efforts of the Super Retail Group team and the flexibility of our omni-retail strategy we weathered these crises by adapting quickly to the volatile operating environment. As the COVID-19 crisis began to unfold in February 2020, our primary focus remained the health, safety and wellbeing of our team members and customers. In responding to coronavirus restrictions, the Group successfully re- Our team member safety performance continues to improve. Our We strictly adhered to the advice and guidance of governments and health allocated store-based resources to supporting our online business, focus on safety reporting, early intervention, incident investigations, authorities across Australian and New Zealand while striving to remain open for rapidly introducing contact-free Click & Collect across all four brands line accountability and initiatives such as the ‘back of house’ rest business where possible. Continuing to operate helped support our team members and replacing catalogue campaigns with digital advertising. program delivered improved injury rates. We achieved a Total with meaningful employment and provided our loyal customers with the essential Recordable Injury Frequency Rate (TRIFR) of 10.58 in FY20, a 25 per products they need. More than one million customers made their first online purchase with the Group during the year. cent reduction on the previous year. This approach played a fundamental role in shaping Super Retail Group’s In February 2020, Super Retail Group was awarded the Workplace performance for FY20. OUR STRATEGY IS ON TRACK Gender Equality Agency’s (WGEA) Employer of Choice for Gender Despite some of the toughest operating conditions ever faced by the retail sector, Our corporate strategy helped guide the Group though this period. Equality citation. This is a significant achievement. We were the the Group delivered a strong trading outcome. The parallel efforts of keeping The Group’s strategic focus remains on: first retail organisation to achieve this citation under the Agency’s stores open where possible during COVID-19 lockdowns, while successfully new criteria. pivoting to meet increased demand in our online sales channels bolstered the Growing the four core brands: focusing on our four core brands, key categories and leveraging scale. Acknowledgement from the WGEA is the culmination of sustained Group’s financial results. commitment to a diverse and inclusive workforce and confirmation building a personalised STRONG FINANCIAL PERFORMANCE Leveraging closeness to our customer: of the progress we are making towards gender equality. We know the relationship with our customers, leveraging data and insights. task is far from complete however and continue to explore ways to Given the context for FY20, we were very pleased with the Group’s financial improve. performance. Our omni-retail strategy has provided flexibility for our businesses Connecting our omni-retail supply chain: continuing to build a fit-for- to adapt quickly to the wholesale changes in customer behaviour