JB�Hi-Fi�LimitedJB�Hi Fi�LimitedMacquarie�Australia�

ConferenceConferenceMay�2013

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Agenda

1. Sales2 Gross margin2. Gross margin3. Cost of doing business4. Trading outlook5. Growth opportunitiespp6. Commercial7. Online8. Digitalg9. JB HI-FI HOME trial10. The JB model11. Maintaining the JB model12. Customer engagement13. Investment checklist

Terry SmartCEOCEO

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1.�Sales

Sales – maintaining momentum!

Australia 2.8% (3.4%) 11.0% 3.3% 5.4% (1.2%)Total Comps.

Sales GrowthJan - Apr '13

Total Comps.YTD (Apr '13)

Total Comps.HY13

1 1 1

The Company has continued to see good sales momentum in

Australia 2.8% (3.4%) 11.0% 3.3% 5.4% (1.2%)New Zealand (NZD) (6.0%) (5.6%) (5.0%) (5.0%) (5.6%) (5.4%)Total 2.3% (3.5%) 10.3% 3.0% 4.9% (1.3%)

The Company has continued to see good sales momentum in

Australia in the second half of FY13.

While showing recent signs of improvement, the NZ market

i hremains patchy.

1 excludes Clive Anthonys

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excludes Clive Anthonys

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2.�Gross�Margin

Gross Margin – it remains a competitive environment

We continue to see an improvement in gross profit percentage over the

previous corresponding period.

Market is still very competitive although we are not currently experiencing Market is still very competitive although we are not currently experiencing

the level of unsustainable discounting seen in the previous corresponding

period.

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3.�Cost�of�Doing�Business

Cost of Doing Business – Maintaining the focus!

Our low cost of doing business (CODB) enables us to operate at healthy profit

margins notwithstanding competitor activity. This is driven by high sales per

square metre and an obsession with not letting waste and inefficiency creep q g y p

into our cost structure.

As expected, CODB will grow at a greater rate in the second half due to a

combination of the new stores opened in the first half (11 new stores in combination of the new stores opened in the first half (11 new stores in

HY13) and our ongoing investment in customer service to support sales

growth.

3 separate award wage increases within the past 3 years – impacting CODB by 3 separate award wage increases within the past 3 years impacting CODB by

approximately 25 bps per annum.

Increasing scale continues to deliver cost reductions which can assist in

offsetting higher wages costoffsetting higher wages cost.

Lowest CODB of listed retailers in Australia.

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4.�Trading�Outlook

Trading Outlook – Sales momentum continues!

At the end of FY13 the Company will have 177 stores (Australia: 164, NZ: 13), of

which 176 will be JB Hi-Fi stores. We have completed our rollout of 13 new JB Hi-

Fi stores for FY13, all located in Australia.,

The Company expects sales in FY13 to be circa $3.3 billion, an increase of 5.5%

over the prior year.

Gross margin in the second half 2013 has improved on the pcp however the

market is expected to remain competitive.

While we have seen good sales momentum in the half to date, we still remain g ,

cautious on the outlook.

The Company expects NPAT for FY13 to be in the range of $112.0m to $116.0m.

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4.�TRADING�OUTLOOK�- Categories

Evolution continues to drive growth

TV – Smart TV, big screen, OLED, Ultra HD.

Telco – New handsets, Samsung S4, HTC ONE, potential new iPhone.

Computer – continued growth in tablets, eReaders, Google Chromebooks,

new form factor notebooks.

Camera – Sports cams, Wifi enabled, mirrorless, DSLRs.

Audio – Wifi & Bluetooth enabled, NFC, Streaming music systems.

Accessories – Continued growth in headphones and device accessories.

Games – New consoles from both Sony and Microsoft (expected in the first

half of FY14). New gaming titles driven by new console features.) g g y

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5.�Growth�Opportunities

Growth will come from multiple areas

New stores Solid pipeline of properties. Will continue our disciplined approach to selecting new stores.

M j h i di t i t Major shopping districts. High foot traffic locations.

Existing store and category sales growth Many categories still have above average growth opportunities. Convenient and easily accessible locations with high foot traffic generates

impulse sales.

Market share gains Continued growth in market share, both in store and online.

Commercial and Insurance Significant opportunities to grow both these divisions over the next 2 to 3

years.

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5.�Growth�Opportunities. . .

Growth will come from multiple areas

Online JB HI-FI HOME website launched. New JB Hi-Fi website currently under construction.

Digital NOW Music growing.

NOW B k l h d dd t d i NOW eBooks launched – add on to devices. NOW Video service nearing completion.

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6.�Commercial

Commercial – Significant growth opportunity!

JB Hi-Fi has continued to see strong growth in Commercial, while off a

small base revenue has grown 50% YTD.

We have doubled our sales staff in Australia and NZ in the last 12 months We have doubled our sales staff in Australia and NZ in the last 12 months

including staff joining us from the Commercial divisions of DSE, WOW S&S,

the Good Guys and DJ’s.

The Commercial market is large and we consider the potential sales

opportunity for JB Hi-Fi at circa $500m.

In March we launched a B2B Telco offer (fixed line, mobility and data).( , y )

One of our key strategic planks is aimed at providing an integrated offer

(product and services) to Enterprise and Education clients across Australia.

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6.�Commercial . . .

Commercial – Significant growth opportunity!

On 17 Feb 2013, we acquired 51% in Network Neighborhood, a Victorian

based Education IT Services business:

The business has 160 technicians providing IT support services to 400 – The business has 160 technicians providing IT support services to 400

schools in Victoria. In addition, it provides services to a number of

corporate clients;

– In FY13 on an annualised basis the business will turnover $25m and

have an EBIT of $2m; and

– We anticipate acquiring the remaining shareholding from the owner p q g g g

in FY15.

The acquisition of Network Neighborhood provides JB Commercial with a

strong service offer in both Education and Enterprise strong service offer in both Education and Enterprise.

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7.�Online

Goal is a “Seamless customer experience”

Online and Mobile sites give

customers a choice on how they wish

to shop with JB Hi Fi to shop with JB Hi-Fi.

In 1HY13, online sales grew 40.3% on

the pcp to $37.2m or 2.0% of sales.

Unique visitations grew 30.9% over

the previous year1 to an average of 1

million per week.million per week.

New JB Hi-Fi site under construction

will improve the customer

iexperience.

Soft launch of JB HI-FI HOME

categories.

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1 Rolling 12 months to 31 December 2012

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8 .�Digital

JB HI-FI NOW – Platform continues to develop and allows us to stay engaged with p y g gour customers after the physical purchase has been made.

We need to stay ahead of our customers d (i t l d )needs (i.e. as customers evolve, so do we).

NOW Music continues to grow with approximately 15 million tracks available and over 22,000 paid subscribers to the and over 22,000 paid subscribers to the service.

NOW Books launched on 22 April 2013

Natural add on to our significant Natu al add o to ou s g ca t e-reader, tablet and PC sales.

Part of “Home Entertainment” categories.

Growing market.

250,000 books and growing.

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9.�JB�HI-FI�HOME�trial

JB HI-FI HOME trial – Leveraging the power of the brand!

H t g i i $4 billi Home categories – circa $4 billion market opportunity.

These categories are becoming fast becoming a technology and fashion becoming a technology and fashion story.

On 28 November 2012, we announced the trial of the JB HI-FI HOME concept, with our four existing co-located JB Hi-Fi and Clive Anthonys stores merging under the one new brand, JB HI-FI HOME.,

Early sales results have been encouraging, with good growth from appliance categories, and are ahead f i t l t tiof internal expectations.

14 Note: screen shot taken from the JB Hi-Fi website on 29 April 2013 (prices current as at that date).

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9.�JB�HI-FI�Home�trial . . .

JB HI-FI HOME trial – Leveraging the power of the brand!

The new concept appears to have been positively accepted by our customers, with no negative impact on the traditional JB Hi-Fi categories.

The two previously flagged Queensland stores and one additional store in NSW have been converted to JB HI-FI HOME as part of our trial.

Home appliance category is a big opportunity but preserving the brand i i t tis more important.

We will continue to review and refine our offer over the next 6 months.

15 Note: screen shot taken from the JB Hi-Fi website on 29 April 2013 (prices current as at that date).

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10.�The�JB�Model

Unique and engaging model! Unique model, high energy, engaging and entertaining retail format (ranked 10th in

Interbrand’s “Most valuable Australian Retail Brands 2013” listing).

High level of loyalty and trust from customers (i.e. 3rd in the 2013 Corporate Reputation Index released by AMR and the Reputation Institute)Reputation Index released by AMR and the Reputation Institute).

Operate in high foot traffic locations.

High sales per square metre.

Relatively low market share gives us more scope to expand and grow Relatively low market share gives us more scope to expand and grow.

Low cost of doing business.

New growth opportunities in Digital, Commercial and HOME.

Good opportunity to expand online sales Good opportunity to expand online sales.

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11.�Maintaining�THE�JB�MODEL

Maintaining the model - Constant evolution

Its vital we remain focused on evolving the model to maintain the energy

and entertainment factor.

Constantly working to ensure that we maintain our appeal as a destination Constantly working to ensure that we maintain our appeal as a destination

to browse, explore and discover.

Obsession with maintaining engagement with customers.

To achieve this, our in-store merchandising constantly evolves.

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12 .�Customer�Engagement

It’s not about It’s not about It’s not about It’s not about Bricks vs OnlineBricks vs OnlineBricks vs. Online.Bricks vs. Online.

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12 .�Customer�Engagement. . .

It’s about a seamlessIt’s about a seamlessIt’s about a seamlessIt’s about a seamlessCustomer ExperienceCustomer ExperienceCustomer Experience.Customer Experience.

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13.�Inv estment�Checklist

Unique and relevant brand (a consumer destination).q ( )

Low cost of doing business (scale advantages).

Flexible business model – history of category growth and development.

Diversity of product categories.

New store, online and digital opportunities.

Experienced management team.

High return on invested capital.

Shareholder return focused through proactive capital management Shareholder return focused – through proactive capital management and dividend policies.

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Appendix

Geographic breakdown1Store movements during FY131

Opened Rebrand Closed TotalAustralia JB HI-FI - Tier 1 135 8 (7) - 136 JB HI-FI - Tier 2 18 5 - (3) 20

JB HI FI HOME 7 7

FY12 FY131

JB HI-FI HOME - - 7 - 7153 13 - (3) 163

Clive Anthonys 2 - (1) 1155 13 - (4) 164

New ZealandJB HI FI Ti 1 9 9

2

34 JB HI-FI - Tier 1 9 - - - 9 JB HI-FI - Tier 2 4 - - - 4

13 - - - 13

TOTAL 168 13 - (4) 177

JB HI FI t t 47

34

18 9

JB HI-FI store type: Tier 1 144 8 (7) - 145 Tier 2 22 5 - (3) 24 HOME - - 7 - 7

166 13 - (3) 176

47

485

Store format: Shopping centres 83 9 - - 92 Other 85 4 - (4) 85

168 13 - (4) 177

13 1

211 as at 3 May 2013

NZ

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Thank YouThank You

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