JB Hi-Fi Limited: Trading Performance and Group Model, Summaries of Material Science and Technology

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15 AUGUST 201615 AUGUST 20162 MAY 2018 PAGEPAGE 11

JB Hi-Fi Limited

2018 Macquarie Australia Conference

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1. Trading and FY18 Outlook

2. The Group Model

3. Achievements in the last 12 months

4. Key focus areas for the next 12 months

5. Investment checklist

Agenda For personal use only

1. Trading and FY18 Outlook

FY18 Outlook:

▪ The Company reaffirms its FY 18 sales guidance with total Group sales to be circa $ 6. 85 billion (JB HI-FI $ 4. 75 billion and The Good Guys $ 2. 1 billion) ▪ The JB Hi-Fi business continues to perform strongly and in line with expectations ▪ The Good Guys performance has been impacted by challenging conditions in the Home Appliance market, due to unfavourable weather conditions coupled with heightened price competition. This has had an adverse impact on gross margin in 2 HY 18 as we continue to focus on sales and market share ▪ As a result of the above, in FY 18 the Company now expects total Group NPAT to be circa $ 230 million (previous guidance of $ 235 million to $ 240 million) ▪ Whilst the challenging conditions in the Home Appliance market are expected to impact performance in the short term, we remain confident in the Group model and the medium and long term outlook for The Good Guys and JB Hi-Fi For personal use only

Scale i. Low Cost Operating Model ii. Quality Store Locations iii. Supplier Partnerships iv. Multichannel Capability v. Product offering Leading retailer of technology and consumer electronics Leading retailer of home appliances and consumer electronics Target customer base / demographic Strong position with young/tech savvy demographics and Gen Ys/Millennials Strong position with home-making demographic and families Value proposition Best brands at low prices Customer focus Exceptional customer service Channels In-store, online, commercial

2. The Group Model

A dual branded retail combination

With 5 key enablers underpinning the Group model and providing a unique competitive advantage

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17.4% 17.9%^ 16.0%

JBH Best Buy Ceconomy Dixons Carphone FNAC Darty M Video ▪ Lowest cost of doing business (~ 15. 5 %) of major Australian listed retailers and international consumer electronics retailers ▪ Low cost of doing business enables: ▪ Consistently low prices (gross margins of only ~ 22 %) ▪ Ability to respond to market price activity and maintain focus on market share ▪ Ability to compete effectively with traditional competitors and new market entrants

CODB

2. The Group Model Source: JBH FY17 Investor presentation and other companies’ data as reported in their most recent full year result.

Low cost operating model

ii.

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JB Hi-Fi ▪ High grade shopping centre, CBD and homemaker store locations ▪ High foot traffic and convenient locations ▪ Compact store size ▪ Dense displays, highly productive floor space and high sales per square metre The Good Guys ▪ High grade homemaker and standalone store locations ▪ Destination locations, easily accessible ▪ Larger store size ▪ Open, easy to shop floor plan, focused on showcasing high consideration and higher value home appliance purchases 14 22 5 10 23 38 30 60 3 5 27 52 1 3 15 1 2

2. The Group Model

Quality store locations

iii.

Store numbers as at Dec 31, 2017 JB Hi-Fi Australia 192 JB Hi-Fi New Zealand 15 The Good Guys 104 Total 311 Store Summary For personal use only

▪ Continued investment in online ensures we give consumers choice on how to transact with JB HI-FI and The Good Guys (i.e. in store, mobile or desktop) ▪ Integrated, high quality in-store and online offer is critical as retail continues to evolve ▪ High engagement in-store experience and negotiability drives a high level of research online and buy in store ▪ Store network provides: ▪ the ability to get goods to online customers quickly, via delivery from store or click and collect; and ▪ online customers confidence in after sales service and support

2. The Group Model

Multichannel capability

v.

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3. Achievements in the last 12 months - Group operating model developed - Shared capability and efficiencies across the Group - Alignment of policy and procedures - Group reporting developed - Support function management integrated - Commercial businesses integrated - Synergy realisation commenced - Category Evolution: - Drones - Home security - Communications - Website redesign - Delivery choices - 3 hour, same day, next day, standard - Click and collect – 95% available within 2 hours - Digital receipts - Improved store technology - New PDAs - New executive team in place - Increased customer transactions (Comp and total) - Improved in-store conversion - Managed transition from JVP to Store Managers - Support Office restructure completed - Revised commission structure designed - Sales performance program developed - Improved reporting For personal use only

5. Investment Checklist

 Unique and relevant brands

 Flexible business model – history of category growth and development

 Diversity of product categories across brands

 Scale operator, market leader

 Global best in class metrics including low cost of doing business and high sales per

square metre

 High quality store portfolio

 Multichannel capability

 Experienced management team

 High return on invested capital

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

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QUESTIONS

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