LTIFR 2.78hrs lost per million hours worked -69% on prior year 12 people had time off due to injury. Total work related injuries 464 (Including 128 customers) “Aspiring to Zero injuries ” ENTER TITLE HERE TRADE PARTNER FORUM 2016 – CHRIS WILESMITH Managers Conference 2015 “Accelerate” Rolled shelf edges for Care Trade Partner Forum Group Update Peter Birtles Galvanized Shelving was upgraded to roll edge and uprights version so customers and store team won’t be injured by sharp edge during handling. Group Managing Director ? What can we do together to make products safer and Chief Executive Officer 3 Managers Conference 2015 “Accelerate” 1 Super Retail Group History Super Retail Group sales growth 1972 Reg and Hazel Rowe started trading from their North Brisbane home 2500 1974 First retail store – International Car Accessories 1979 Store name changed to Super Cheap Auto 2000 1999 50 stores SPORTS 2002 100 stores 20% compound 1500 Acquisition of Marlows and Rocca Bros 2003 growth over 20 Launched first stores in New Zealand 2004 IPO on the Australian Stock Exchange 1000 years LEISURE 2005 200 stores; Launch of BCF 2008 300 stores; Acquisition of Goldcross Cycles 500 400 stores; Acquisition of Rays Outdoors 2010 Company name change to Super Retail Group AUTO 2011 500 stores; Acquisition of Rebel and Amart Sports 0 95… 96… 97… 98… 99… 00… 01… 02… 03… 04… 05… 06… 07… 08… 09… 10… 11… 12… 13… 14… 15… 2014 600 stores Group Structure Super Retail Group Highlights 2015/16 Commercial SAFETY • Safety performance improved by 48% Auto Leisure Sports TEAM • Increase in team engagement from 68% to 71% Retail Operations Retail Operations Retail Operations Merchandising Merchandising Merchandising Marketing Marketing Marketing • Group focus on Customer Centricity CUSTOMER • Customer Net Promoter Score increasing 308 stores 131 stores 17 stores 101 stores 65 stores • Strong sales and profit performance from Auto and Sports Group Supply Chain BUSINESS • Rays transformation and good second half from BCF IMPROVEMENT Group Services • DC transformation starting to deliver Finance Human Resources Information Services Property International Operations 2 Changing Retail Market Divisional Sales Growth How are external market forces shaping our strategy? Forces Evolving Customer Workforce 2015/16 ($m) Growth on PCP LFL Growth impacting on Globalisation Digitalisation Business Power Demographic Retail Models Auto 923 8% 4.2% Historical levers of differentiation (range and price) will no longer succeed Leisure 582 7% 4.4% Building a stronger emotional connection with customers is a must Implications for Super Organisational capabilities have to be ‘World class’ not ‘Australasian class’ Sports 910 9% 6.3% Retail Group Aligning team member behaviour and culture with the customer offer will be a sustainable advantage Providing Multi channel Customer Supply Chain Team 2015/16 is a 53 week year – this increases total growth by about 1.5% but does not Key elements Differentiated retail, Understanding and IT engagement and Solutions (not inspiration, impact LFL growth of the strategy & Engagement capability development just products) community Our Strategic Roadmap What is our vision for the future? Super Retail leadership focus 2016/17 OUR VISION Inspiring you to live your passion SAFETY • ‘Every injury is preventable’ To provide solutions and engaging experiences that enable our customers OUR PURPOSE to make the most of their leisure time To achieve the To achieve higher To provide returns • Building team engagement and capability To be one of the five highest team customer TEAM to our shareholders OUR GOALS largest Australasian member engagement ratings • Customer Centricity, Alignment and Agility that exceed the retail companies engagement across than our ASX 200 by 5% the retail industry competitors • Engagement and solutions focus CUSTOMER OUR To deliver compound annual To grow return on capital to • Thinking about the impact on the customer of every decision FINANCIAL growth in EPS of greater than 15% greater than 15% TARGETS BUSINESS • Achieving our performance targets OUR VALUES Passion Openness Integrity Care Discipline IMPROVEMENT • Progressing our strategic initiatives 3 Building our partnership Store developments – new stores/superstore extension/refurbs OPPORTUNITY Multi-channel development Customer connection - Club marketing and events New products CUSTOMER Thank you for your support Content ENGAGEMENT Packaging and Information Clarity on our joint standards We look forward to growing our partnership RESPONSIBILITY Ethical Sourcing – supply chain visibility ‘How can we work together to be more efficient?’ EFFICIENCY Supply chain and inventory management Some reflections on the year that was? ENTER TITLE HERE TRADE PARTNERManagers Conference FORUM 2016 2015 “Accelerate”– SCA UPDATE CHRIS WILESMITH Managers Conference 2015 “Accelerate” 4 Team engagement we achieved 76% Our Team and Business has been recognized for excellence Retention & Engagement 80.00% 78.00% 76.00% 74.00% 72.00% Engagement 70.00% Retention 68.00% Linear (Engagement) 66.00% Linear (Retention) 64.00% 62.00% 60.00% 2011 2012 2013 2014 2015 Our aspirational target is to move to +80% Managers Conference 2015 “Accelerate” Managers Conference 2015 “Accelerate” Achieving Our Team and Business has been recognized for excellence Now 310 STORES ACROSS Roy Morgan Inside Retail NRA Finalist AUSTRALIA & NEW ZEALAND “Customer Satisfaction Rewards for Excellence 33 and growing… Award 2015” ‘Loyalty Program Experience Award’ 2015 2828 7979 Auto Store of the Year Retail Customer Excellence Awards Large Retailer of the Year ALL STAR BASH Australian Auto Aftermarket 1818 2016 7575 Supercheap Auto Supercheap Auto 55 “Top Automotive Retailer” “Certificate of Achievement” 5353 2015 Most Innovative Digital Marketing Holden Hill Recognition of outstanding Campaign 55 achievement in Digital Retail SCA “ Big Break Competition ” 4444 Managers Conference 2015 “Accelerate” 20 Managers Conference 2015 “Accelerate” 5 Cost Increase Pressures / FX exchange rates $30M impact to our business FY15 -16 increasing the cost as currency falls Danger increasing prices are reducing unit sales Consolidate Extend Enhance New Zealand Australia Service - solutions Managers Conference 2015 “Accelerate” Managers Conference 2015 “Accelerate” The World is changing Managers Conference 2015 “Accelerate” 24 Managers Conference 2015 “Accelerate” 6 So why change ??? P Weare going to before somebody else does. Could have been Could have been ??????? 25 Managers Conference 2015 “Accelerate” 26 Managers Conference 2015 “Accelerate” OUR CHALLENGE THE CONDITIONS WE NEED TO BE SUCCESSFUL? We enjoy top line growth but the factors that made us successful are changing. 1. MARKET 2. GOVERNMENT 3. COMPETITION Cars with combustion Car ownership = best form Ability to service the engines of transport car yourself Car ownership = best form of Ability to service the car Cars with combustion engines CARS WITH CAR SHARING & transport yourself VIRTUAL SERVICING ELECTRIC AUTONOMOUS /CLOSED ECO SYSTEM CHANGES TO ONE OF THESE WILL ENGINES VEHICLES MAKE OUR BUSINESS FRAGILE AND REQUIRE LESS LESS CARS TO LESS ABILITY TO DIY SERVICING, LESS OFTEN SERVICE SERVICE OVERTIME NICHE Managers Conference 2015 “Accelerate” Managers Conference 2015 “Accelerate” 7 IN THE LAST CENTURY NEARLY EVERY INDUSTRY HAS BUT, IN THE LAST 100 YEARS ‘THE PRIMITIVE GAS-BURNING UNDERGONE RADICAL CHANGE… CAR HAS BECOME A BETTER GAS BURNING CAR’ COMMUNICATIONSFLIGHT ENTERTAINMENT SCIENCE 1900s TEL. EXCHANGE 12” FLIGHT SILENT MOVIES CHEM. LAB 2010s 1920 2015 IPHONE ISS NETFLIX HADRON Source: Wait by Why by Tim Urban Managers Conference 2015 “Accelerate” Managers Conference 2015 “Accelerate” REGULATORS & GOVERNMENT: CREATING A ‘NON- COMBUSTION ENGINE’ RACE OUR CUSTOMERS SCOTT, BARRY & HERB ARE IN DECLINE 53 YEARS 50% OF CRUDE OIL 30% SCOTT BARRY HERB WORLD’S OIL EXTRACTION OF GLOBAL WORKED ON THE RESERVES IN THE WARMING IS CAR LAST 3 MIDDLE EAST -3% -4% -2% LEFT TRANSPORT MONTHS (FY11-15) + + + BOUGHT CAR NO ALTERNATIVE TO ESTABLISHMENT OF US ACCESSORIES IN POLITICALLY UNSTABLE PETROL-POWERED EPA AND SIMILAR LAST 3 MONTHS -3% -3% -2% MIDDLE EAST* CARS BODIES (FY11-15) = = = US$2.4B GRANT TO DEVELOP NEED TO REDUCE ENFORCEMENT OF BOUGHT FRO SCA NEXT GEN VEHICLES & GREEN RELIANCE ON EMISSIONS STANDARDS IN LAST 3 MONTHS -1% -1% 0% ‘FOREIGN OIL’ COLLAR JOBS (FY11-15) SOURCE: US ENERGY INFORMATION ADMINISTRATION 2013; Wait by Why, and Union of Concerned Scientists, 2015 ; * at least more than normal with Arab Spring, ISIS and US disturbance Source: Roy Morgan Single Source Managers Conference 2015 “Accelerate” Managers Conference 2015 “Accelerate” 8 GROWTH AFTER FY20 WILL FALL -3.5% CONTRAST THIS TO THE DIFM MARKET, CPI and Population adjusted BY 2018 THIS WILL BE NEARLY DOUBLE DIY and showing 2.4% a growth trend of +3.6% PA 1.4% 1.4% 1.2% 1.0% 1.0% 0.5% DIY DIFM 2018 0.0% 2018 0.0% $22B YoY % Growth YoY -0.6% $13B 3 YR CAGR -1.5% 3 YR CAGR +3.6% -1.2% FY17 FY18 FY19 FY20 FY21 FY22 FY23 DIFM OPPORTUNITY INCLUDES: CAR WASH, CAR SHARE, TYRE RETAILING, ELECTRICAL SERVICES, BODY+PAINT+INTERIOR REPAIR, ENGINE AND PARTS REPAIR, DETAILING , AUTOPARTS AND ACCESSORIES, ENERGY GENERATORS + SOLAR PANELS Managers Conference 2015 “Accelerate” Managers Conference 2015 “Accelerate” TODAY’S MINDSET We need to move from inviting customers to THE FUTURE IS NOT LOGICAL being Invited So What will we be in the future ? BE A DEVIANT FORGET WHAT YOU ‘KNOW ’ Facebook AirBNB Apple Uber Managers Conference