Warehouse : Annual Shareholders' Meeting 2022 - Chair's and CEO's Address

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To: NZX Limited

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Auckland, 25 November, 2022

The Warehouse Group Limited Annual Shareholders' Meeting 2022

The Warehouse Group Limited is holding its Annual Shareholders' Meeting today, commencing at 10am. Attached are the Chair and CEO address and the accompanying presentation.

ENDS

Contact details regarding this announcement:

Investors and Analysts:	Jonathan Oram, Chief Financial Officer
	To be contacted via Kim Russell [phone] or [phone]
Media:	Jordan Schuler, Corporate Affairs Partner [phone]
	[e-mail]

The Warehouse Group Limited

2022 Annual Meeting - Chair's Address

Kia ora koutou katoa. Haere mai ki tenei hui motuhake.

Good morning ladies and gentlemen and thank you for joining us this morning. My name is Joan Withers and I am the Chair of The Warehouse Group.

On behalf of your Directors, the Group Chief Executive, our leadership team and all our team members I extend a very warm welcome to our Annual Shareholders' Meeting - both to those of you in the room today, and to all our shareholders who are joining us online.

The notice convening today's meeting was circulated to shareholders on 26 October 2022, and a quorum is present, so I am pleased to declare the 2022 Annual Shareholders' Meeting of The Warehouse Group open. And this is an auspicious occasion, as earlier this week we celebrated the 40th anniversary of the first Warehouse store being opened by Sir Stephen Tindall back in 1982.

After needing to hold our ASM as online only last year due to the Covid-19 outbreak, we are delighted to be here with many of you in person this year.

So, today's meeting is being held both in-person and online via the Computershare Online Meetings platform. This allows shareholders, proxies and guests who were not able to travel and attend the meeting in person the ability to attend the meeting virtually. All of our online attendees can now see a live webcast of this event and read the company documents associated with the meeting. In addition, shareholders and proxies have the ability to ask questions and submit votes, and I will outline the process for that later in the meeting.

Now to the introductions.

With me here today are our directors - Tony Balfour, Dean Hamilton, John Journee, Caroline Rainsford, Julia Raue, and Robbie Tindall. Unfortunately, Rachel Taulelei does have COVID, so is unable to be with us in person, but is joining us today online.

Also joining me on stage is our Group Chief Executive Officer, Nick Grayston, and our Group Chief Financial Officer, Jonathan Oram.

Members of our Leadership Squad are seated in the room and all of us will be available after

the meeting for you to meet and speak with.

And we also have with us representatives from our Auditors - PricewaterhouseCoopers, and company legal advisors - Russell McVeagh.

Welcome to you all.

Before proceeding with the formal business, I will run through the order of events for today's meeting.

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The agenda will start with the usual formalities and then I will provide a recap of the FY22 annual results, our distributions to shareholders and an update on our Sustainability journey and the new building blocks and targets we have announced. I will also highlight the changes in our board and governance during the year in review.

Nick Grayston, our Group Chief Executive Officer, will then provide some detail on our strategy and our financial performance including an update on the first quarter of this current financial year and our expectations for the remainder of FY23.

We will then turn to the formal part of the day's business. The resolutions today include the re-election of three Directors and authorising the setting of the auditor's fees.

We will cover each resolution in turn and invite you to submit your questions specific to those items which we will respond to during the Q&A session for each resolution.

Voting will take place by poll. I will outline the process for the discussion and voting on the resolutions at that point in the agenda.

Following the resolutions, we will take questions from you on our financial and operational performance or other questions relating to the Company. I ask that you wait to raise any of your questions of a general nature until that time.

If you have joined the meeting online as I mentioned before, you will be able to submit a

question or vote on the resolutions throughout the course of the meeting.

So now we will now move to the formal agenda.

Proxies

Proxies have been received from 421 shareholders representing 201,194,338 voting shares. This represents 58.01% of the voting shares in the Company.

The valid proxies we have received support the resolutions to be considered later in the meeting. I will provide further details on proxies in respect of each resolution at that time.

2021 Annual Meeting

I confirm that the minutes of the 2021 Annual Meeting held on 26 November 2021 have been signed and confirmed by me as the Chair of that Meeting. These minutes were posted on the Company's website after they were approved and are available for review on the website.

Annual Report

The Financial Statements for the 52 weeks ended 31 July 2022, together with the Auditor's report are set out in the Company's 2022 Annual Report which was released to the NZX and made available on our website on 28 September 2022.

If you would like a hard copy of the Annual Report, please email us at [e-mail] request a copy.

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Under the Companies Act 1993, there is no requirement to approve the Financial Statements or the auditor's report at Annual Meetings, however we will be happy to answer any questions you may have during the Q&A session at the end of the meeting.

For those of you attending the meeting virtually, if you have a question to submit during the live meeting, please select the Q&A tab on the right-hand half of your screen at any time. Type your question into the field and press send. Your question will be immediately submitted. Should you require any assistance, you can type your query and one of the Computershare team will assist via the chat function and reply to your query. Alternatively, you can call Computershare on 0800-650-034.

Please note that while you can submit questions from now on, I will not address them until the relevant time in the meeting. Please also note that your questions may be moderated or if we receive multiple questions on one topic, they may be amalgamated. Finally, due to time constraints we may not be able to answer all your questions during the meeting. If this happens, we will answer them in due course via email.

Voting today will be conducted by way of a poll on all items of business. In order to provide all online attendees with enough time to vote, I will shortly open the online voting for all resolutions.

At that time, if you are eligible to vote at this meeting, you will be able to cast your vote under the Vote tab. Once the voting has opened, the resolutions will allow votes to be submitted. To vote, simply select your voting direction from the options shown on screen. You can vote for all resolutions at once or by each resolution. Your vote has been cast when the tick appears. To change your vote, simply select 'Change Your Vote'. You have the ability to change your vote, up until the time I declare voting closed.

I now declare voting open on all items of business. The resolutions will now be open in the vote tab, please submit your votes at any time. I will give you a warning before I move to close voting.

Now to the Annual Results Highlights.

The financial year in review started once again with an enormous challenge. Two weeks into the financial year, we were again back into a COVID-19 lockdown for 84 days in Auckland and at least 21 days throughout the rest of New Zealand, bringing yet another call on our team to adapt very quickly.

Resilience, focus and agility have been hallmark themes for the Group over the last two years and I'd like to recognise and commend all our 12,000 team members across The Warehouse Group for another incredible year in responding and serving our customers well through a very demanding period.

Despite the disruption, our teams have continued to innovate, and we have never been more confident in our strategy - to provide a personalised, integrated and frictionless shopping experience for our customers.

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A lot was thrown at us in FY22 - COVID-19 store closures and restrictions, disruption to our supply chain and increased ocean freight costs which have had an impact on sales and gross profit margin. Despite all the challenges posed to us during the FY22 year, apart from the record result in FY21, this year was our strongest performance in some 15 years.

Sales were down 3.5% on prior year, but strong against FY20, and stronger still against the last comparable, non-COVID-19 impacted year of FY19. Online sales saw exceptional growth, up 39.8% on the prior year making up 15.3% of total Group sales.

Our focus on gross margin, improved shipping and freight logistics and improved mix of product sales during the year saw Gross Profit performance improve from the first half, and came in at $1.2 billion for the full year. On a gross profit margin basis, our full year 35.3% was down against FY21, but saw the second half recover to 36.1% from 34.7% in the first half.

One issue which added to the complexity of our financial result this year was the decision by the International Reporting Interpretations Committee in April 2021 to change the accounting rules for software as a service. IFRIC has determined that costs incurred under Cloud Computing Arrangements, or SaaS, can only be recognised as intangible assets if the activities create an intangible asset that the Group controls. Costs that do not result in intangible assets are expensed as incurred. Due to The Warehouse Group being part way through a multi-yearprogramme to replace its core systems from being on-premiseto a cloud-basedarchitecture - this accounting change is significant for The Warehouse Group and complicates comparisons.

On a comparable basis to prior years, before unusual items and before the SaaS adjustment, FY22 NPAT was $96.9 million, compared to the very strong FY21 year which saw comparable adjusted NPAT $175.5 million, but significantly above both FY20 and FY19 with the respective adjusted NPAT for those years $32.1m and $74.1m.

Reported NPAT for the year in review was $89.3 million compared to $109.3 million in prior year.

The Group dividend policy is to distribute at least 70% of the Group's full year adjusted net profit, at the discretion of the Board and subject to trading performance, market conditions and liquidity requirements.

This dividend policy provides the Group with flexibility to maintain a stable capital structure, allowing for capital expenditure to invest for future growth, and progressive and sustainable dividends

In accordance with our dividend policy, at the time of the FY22 Annual Results, the Board announced a fully imputed final dividend of 10.0 cents per share. Along with the interim dividend of 10.0 cents per share, that brings the full dividends for the FY22 year to 20.0 cents per share.

The record date for the final dividend was 17 November and will be paid on 2 December 2022.

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