Super Retail Group Limited · ASX:SUL
Super Retail — Super Cheap Auto Group — Macquarie Securities 2006 Australian Emerging Leaders Conference
48 slides from Super Retail's conference presentation, May 4, 2006
Slide 1: Presentation to Macquarie Securities 2006 Australian Emerging Leaders Conference
Super Cheap Auto Group Presentation to Macquarie Securities 2006 Australian Emerging Leaders Conference Peter Birtles — Managing Director 4 May 2006
Slide 2: Super Cheap Auto Group agenda
Super Cheap Auto Group * 2006 Outlook * Supercheap Auto — Medium Term Plans * BCF — Medium Term Plans
Slide 3: Outlook for Full Year FY06
Super Cheap Auto Group Outlook for Full Year FY06
Slide 4: Outlook for Full Year FY06 — per half year presentation
Outlook for Full Year FY06 — per half year presentation Supercheap Auto * Full year sales expected to be between $490m and $495m * Year on year savings in advertising expenditure in the 2"4 half * AIFRS - Full year impact will be circa $2m additional occupancy costs * EBIT margin expected to be circ
Slide 5: Supercheap Auto Medium Term Plans
Supercheap Auto Medium Term Plans
Slide 6: Supercheap Auto — Medium Term Plans
Supercheap Auto — Medium Term Plans * * Brand and Marketing Development Brand Positioning and Customer Perceptions * Store Format and People Development * Range Development «+ Medium Term Projections
Slide 7: Brand Positioning and Customer Perceptions
Brand Positioning and Customer Perceptions
Slide 8: Customer Value Proposition
Customer Value Proposition What do our customers truly value about Supercheap Auto NOW? A lot of stuff for not much money, lots of gear in the store, not much service (but that’s ok because | like to look around). | GET THE LOT FOR LESS!
Slide 9: Supercheap Auto vs competitors
Supercheap Auto vs competitors PRICE QUALITY CUSTOMER SERVICE Supercheap Auto Repco / specs Repco / Specialists cra Autobam Aubam oan Supercheap Ato Kmart Superchua Auto Repco / specialist Kmart BOAPNG = CAMPING « FISHENG
Slide 10: Who is our Customer and who are we targeting?
Who is our Customer and who are we targeting? Roy Morgan analysis was conducted, and based on “All people who have worked on their car in the last 3 months’, seven segments where identified: 1. 2. “Barry” — the conventional family lifer/fairer deal who wants to save costs. “Herb” — the traditional f
Slide 11: Market Segment Size Estimates
Market Segment Size Estimates* Scott 15% 25% Barry 40% 15% Herb 15% 10% Amelia 12% 10% Luca 5% 20% Tim 5% 15% Maureen 8% 5% Total 100% 100% *Estimates from IdeaWorks (using Roy Morgan data) and Core Economics. 11
Slide 12: Meet Barry
Meet Barry (‘have to’ maintenance market DIY, 40% of our Business) * 35 years old Conventional Family Lifer looking for a Fairer Deal Tradie, labourer (good with his hands) Married with kids + Household income c$60k . No tertiary qualifications . Is renting or paying off a house in the outer suburbs
Slide 13: Meet Scott
Meet Scott (want to’, aspirational: upkeep market, 15% of current business) * 45 years old . Looking for something Better a Visible Achiever Married with children High household income c$100k (his wife Sal works too) but also high debt (paying off home, sending kids to a private school) Believes qua
Slide 14: Customer Value Proposition
Customer Value Proposition What will our customers truly value about Supercheap Auto in the FUTURE? The brands, the right stuff and the quality that | expect and the help that I need to do the job (DIY or DIFM) plus the new and exciting stuff that I’ve always wanted All at a super price 14
Slide 15: Brand and Marketing Development
Brand and Marketing Development 15
Slide 16: Brand and Marketing Development: Objectives
Brand and Marketing Development : Objectives 1. Brand development (to change perceptions) Objectives « Let the market know that thing’s are changing at Supercheap Auto *« Send a message to Scott — “Supercheap Auto is for you” * Reinvigorate relationship with Barry 2. Stimulate retail activity Object
Slide 17: Brand and Marketing Development: Mechanics
Brand and Marketing Development: Mechanics 1. New Catalogue Presentation 2. New In-Store Ticketing, Collateral Material, POS, 3. New Media Campaign 4. Store signage, layout, fixtures and presentation « Concept store is the testing bed 5. Team Member knowledge and experience 17
Slide 18: Older format from 2005 vs. updated format for 2006
Older format from 2005 vs. updated format for 2006 = GUPER CHEAP %i RACE IN FOR, SAVINGS, ane es a “ee i. BOAPNG = CAMPING « FISHENG
Slide 19: In-store theme tickets and POS
In-store theme tickets and POS everything auto and much Much more CHE, SUPERCHEAP BOAPNG = CAMPING « FISHENG
Slide 20: SCA Media Direction
SCA Media Direction *« Media campaign will have a brand building and a sales driving focus « To position SCA as the best value retailer « But to let customers know that SCA offers much more than just price * To build the relationship with Barry and to attract Scott « Anew TV campaign is being develo
Slide 21: Store Format and People Development
Store Format and People Development 21
Slide 22: Years ago Today
10 Years ago Today GUPER CHEAP BOAPNG = CAMPING « FISHENG
Slide 23: SCA Format looking dated
SCA Format looking dated The store design and brand logo is becoming dated, impacting on our brand image, market positioning and needs reinvention to keep the brand relevant in a tough retail environment Future capital expenditure should include keeping our stores “Fresh” and up-to-date to protect a
Slide 24: Chermside Concept Store
Chermside Concept Store « Continue the strong focus on “Value” * Focus is on optimising rather than maximising the range « Greater focus on quality products & a sharper store fitout * More use of Brands * More efficient processes to free team member time to focus on service « Increased Team Member e
Slide 25: Existing Chermside Store
Existing Chermside Store oe I BOAPNG = CAMPING « FISHENG
Slide 26: cnn aA
27 cnn aA BOAPNG = CAMPING « FISHENG
Slide 27: Better Value
BETTER VALOE BOAPNG = CAMPING « FISHENG
Slide 28: i a ‘i
a i a ‘i ae hl ee ti Hi Hae: sin : AE TMI cnn OC BOAPNG = CAMPING « FISHENG
Slide 29: In Store Processes - Issues & Actions
In Store Processes - Issues & Actions « A full review of in store operational processes to achieve productivity gains will be conducted at the Chermside store * Savings generated will be reinvested into improved customer service, team training and consistency of delivery « To date a review of the pr
Slide 30: Hand written ticketing being replaced with printed tickets
Hand written ticketing being replaced with printed tickets 7 Sec a ie HG BOAPNG = CAMPING « FISHENG
Slide 31: Store Format Development
Store Format Development * Currently 231 SCA Stores in the current format — an updated market assessment indicates that there is potential for around 270 stores in this format * The market assessment has also indicated opportunities for alternative formats: + Smaller format for smaller regional area
Slide 32: Range Development
Range Development 32
Slide 33: Ranging Opportunities
Ranging Opportunities ¢ Currently one size fits all ranging philosophy across all stores * Category Planning * Quality « Housebrand development * Packaging * New Categories * Regional Ranging « Procurement and Supply Chain Opportunities BOAPNG = CAMPING « FISHENG 33
Slide 34: Quality
Quality Issues « Housebranded products have been at the heart of our quality issues « We have had 6 Product Recalls in the past 12 months, all Superworks branded « Product returns represent .85% of sales and the Top 20 lines represent 40% of returns « There has been no Process to return products wit
Slide 35: Quality
Quality « Total review of end to end quality processes * Suppliers communicated on quality focus and Expectations * Improved Quality processes introduced in China and in Australia « Product deleted with major quality issues * Suppliers to fund future cost of recalling products * Improving on-pack cu
Slide 36: Housebrand
Housebrand « Housebrand sales represent approx 25% of total sales (opportunity to take this to around 35%) « Housebrand strategy under review includes: * Branding * Marketing * Packaging & Instructions * Brand Charter & Values * Financial Targets 36
Slide 37: Housebrand packaging
Housebrand packaging BOAPNG = CAMPING « FISHENG
Slide 38: SCA Packaging Standards
SCA Packaging Standards * SCA has developed new standards * To ensure packaging suitable to move through the supply chain without damage and safely « The majority of our packaging opportunities are from imported supply * Presentation given to suppliers on our packaging expectations « Category and Bu
Slide 39: New Line Packaging Compliance by Vendor
New Line Packaging Compliance by Vendor Compliance % BOAPNG = CAMPING « FISHENG
Slide 40: Ranging Issues and Opportunities
Ranging Issues and Opportunities . Clear direction given on range: * Core focus is Auto « Everything for the Shed, Garage & Trailer « Great value “opportunity buys” « Not wavering from strategy New category opportunities being accessed Regional ranging opportunities under review * Competitive opport
Slide 41: Procurement and Supply Chain Opportunities
Procurement and Supply Chain Opportunities Continue to take advantage of our size to re-negotiate better costs, new supply and improved trading terms + Annualised improvements in trading terms totaling $3.5m have been negotiated so far this year + Some of this saving will be invested into lower reta
Slide 42: Supercheap Auto Medium Term Projections
Supercheap Auto Medium Term Projections 42
Slide 43: Supercheap Auto - Medium Term Projections
Supercheap Auto - Medium Term Projections ¢ Sales growth will be driven by market share gains * SCA will gain market share through initiatives presented and new store rollout + Market share gains will be tempered by decline in some categories in the Auto After Market * Store numbers anticipated to g
Slide 44: BCF — Medium Term Plans
BCF — Medium Term Plans 44
Slide 45: Expansion of BCF Network
Expansion of BCF Network + Performance to date has reinforced confidence in potential for at least 60 stores * 13 stores trading today « Will open between 10 to 15 new stores in 2006/07 — Skewed towards the 2"4 half « New Stores will be targeted towards NSW, WA and Qid * Business will investigate ac
Slide 46: Summary of Current BCF Property Plan
Summary of Current BCF Property Plan Current Sites New sites leased ~ subject to planning approval and/or New Sites terms agreed — subject to lease terms and Possible sites under negotiation construction planning approval Brisbane 6 1 4 Metropolitan Gold & Sunshine 2 1 Coasts Regional 4 2 Queensland
Slide 47: BCF Financial Model
BCF Financial Model + Stores trade at $4.5m to $4.8m in year 1 growing to $5.0m to $6.0m by year 3. * Current gross margin 35% to grow to 38% over next 3 years through benefits of scale, efficiency and own brand development. « Store operating costs (excl depreciation) at around 24% of sales in year
Slide 48: Questions
Questions 48
Super Cheap Auto Group — Macquarie Securities 2006 Australian Emerging Leaders Conference on 6ix