Slides
Page 1
Australia | New Zealand | Singapore | Slovenia | Ireland | United Kingdom | Malaysia | Croatia PRESENTATION OF RESULTS | 2026
Page 2
Contents FY26 Key Highlights 3 2026 Results for Announcement to the Market 4-5 An Integrated Retail, Franchise, Property & Digital System 6 Segment Analysis 7 Review of the Balance Sheet 8-9 Review of the Statement of Cash Flows 10 Aggregated System Sales Revenue 11 Australian Franchisee Aggregated Sales Revenue 12 Franchising Operations Segment 13 Overseas Company-Operated Retail Segment 14-15 Property Segment 16 Freehold Property Portfolio 17 Leasehold Property Portfolio 18 Outlook 19 Disclaimer: This document contains forward-looking statements, including statements concerning the expectations, plans, strategies, objectives, prospects, future performance and financial position of Harvey Norman Holdings Limited and its controlled entities (the Consolidated Entity). Forward -looking statements may be identified by words such as ‘anticipate’, ‘believe’, ‘expect’, ‘estimate’, ‘intend’, ‘may’, ‘plan’, ‘project’, ‘target’, ‘will’, ‘would’ and similar expr essions. Forward-looking statements are not statements of historical fact. They are based on information available to the Consolidated Entity as at the date of this document and on current expectations, assumptions, estimates and projections. Those statements are subject to known and unknown risks, uncertainties and other factors, many of which are beyond the control of the Consolidated Entity. These factors may cause actual results, performance or achievements to differ materially from those expressed, implied or projected in any forward -looking statement. No representation or warranty, express or implied, is made as to the accuracy, completeness, reliability or likelihood of achievement of any forward-looking statement. Readers should not place undue reliance on forward -looking statements and should have regard to the risks, uncertainties and assumptions referred to in this document and in the Consolidated Entity’s other periodic and continuous disclosure materials lodged with the Australian Securities Exchange. Except as required by law or the ASX Listing Rules, Harvey Norman Holdings Limited does not undertake to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. Nothing in this document is, or is to be taken as, a representation, assurance or guarantee that the events or outcomes expressed, implied or projected in any forward-looking statement will occur. Opening of the 2nd UK Store- Harvey Norman® Gracechurch, United Kingdom (April 2026) 2
Page 3
FY26 KEY HIGHLIGHTS 3 Sustained Growth, International Expansion and Balance Sheet Strength Amid Increasing Global Uncertainty A tangible asset-rich balance sheet and low gearing underpin long-term financial strength 1. VERY STRONG BALANCE SHEET Net Assets Total Assets Sustained low net debt –to-equity ratio $4.94BN $4.84BN up 2.0% $8.85BN $8.37BN up 5.7% 18.81% 13.43% FY26 FY25 A Year of Resilience: Strong 1H26 Performance Mitigated Global Disruptions in 2H26 Sales growth highlights the strength of Australian franchisees and the expanding international retail footprint 2. SYSTEM SALES of $9.64BN for FY26, up 3.1% Aggregated headline franchisee sales revenue Company-operated sales revenue $6.584BN $6.431BN up 2.4% $3.052BN $2.919BN up 4.5% FY26 FY25 Double-digit growth in operating earnings despite softer 2H26 trading conditions 3. EARNINGS & EPS GROWTH: $790.29M $753.10M up 4.9% $654.69M $590.36M up 10.9% 42.41cps 41.57cps up 0.84cps Reported Profit Before Tax Profit Before Tax (excluding AASB 16 net impact, net property revaluations & pecuniary penalty recognised in FY26) Basic Earnings Per Share (EPS) Driven by: Operating leverage delivered through disciplined cost management and continued brand investment 3.9% 4.1% 18.7% 18.3% Marketing expenses & ratio down while system sales up 3.1% (Marketing expenses as a % of System Sales Revenue) Operating expenses as a % of system sales maintained amid inflation & expansion in 2H26 (Operating expenses as a % of System Sales Revenue) 4. DIVERSIFIED EARNINGS MODEL: Multiple earnings streams across franchising, retail and property continued to be resilient, reducing reliance on any single market, geography or category FY26 FY25 Franchising operations profitability remained strong, with margin above 5% despite softer trading conditions in 2H26 $345.18M $344.39M up 0.2% 5.24% 5.36% down 12bps Franchising operations PBT result Franchising operations margin International operations delivered strong earnings growth while continuing to expand in key markets and broaden the global Harvey Norman® footprint A) Established International Retail PBT Results: New Zealand Singapore & Malaysia Ireland Slovenia & Croatia $85.12M $64.89M up 31.2% $44.88M $41.43M up 8.3% $30.84M $22.65M up 36.2% $6.09M $4.39M up 38.8% Total Established International PBT B) Overseas Expansion— Continue to invest and expand categories & store network in the UK $166.93M $133.36M up 25.2% ($31.21M) ($23.37M) down 33.5% $5BN global property portfolio underpins earnings quality, asset backing and financial strength Solid Property segment PBT results supported by: net property revaluation adjustments of $156.75M recognised in the income statement & fair value increase of $37.41M recorded in the balance sheet $333.49M $321.55M up 3.7%
Page 4
2026 RESULTS FOR ANNOUNCEMENT TO THE MARKET Total System Sales Revenue* $9.64 bn Aggregated headline franchisee sales revenue $6.584bn Company-operated sales revenue $3.052bn Sales of products to customers $3.05bn Revenues received from franchisees $1.21bn Revenues and other income items $418.00m HNHL Consolidated Revenue $4.68 bn *Comprised of Harvey Norman® overseas company-operated sales revenue and aggregated Harvey Norman®, Domayne® and Joyce Mayne® franchisee sales revenue in Australia. Sales made by franchisees in Australia do not form part of the financial results of the consolidated entity. Net Assets $4.94 bn Basic Earnings Per Share 42.41c Dividends Per Share (FULLY-FRANKED) 27.5c 2.0% from $4.84bn in June 25 from 41.57c in FY25 4 from 26.5c from FY25 INTERIM 14.5c FINAL 13.0c (a) excludes the one-off expense of $18.80 million for the pecuniary penalty recognised in FY26 for the resolution of the ASIC Proceedings against the Company (total penalty was $35 million, with $16.2 million recognised in prior years) EBITDA $1.18bn $56.47m or +5.0% from $1.13bn in FY25 1H26 $86.46m +14.9% | 2H26 $29.99m –5.5% EBITDA excluding AASB16 net impact, net property revaluations & pecuniary penalty(a) $814.67m $64.40m or +8.6% from $750.27m in FY25 1H26 $65.80m +16.9% | 2H26 $1.39m –0.4% EBIT $917.02m $46.04m or +5.3% from $870.98m in FY25 1H26 $66.27m +14.4% | 2H26 $20.23m –4.9% 4-YEACAGR 0.4 EBIT excluding AASB16 net impact and net property revaluations & pecuniary penalty(a) $711.78m $66.28m or +10.3% from $645.49m in FY25 1H26 $59.49m +17.5% | 2H26 $6.79m +2.2% REPORTED PBT $790.29m $37.18m or +4.9% from $753.10m in FY25 1H26 $66.02m +16.5% | 2H26 $28.83m –8.2% 4-YEAR CAGR -1.5% PBT excluding AASB16 net impact, net property revaluations & pecuniary penalty(a) $654.69m $64.33m or +10.9% from $590.36m in FY25 1H26 $62.33m +20.1% | 2H26 $2.00m +0.7% REPORTED PROFIT AFTER TAX & NCI $528.46m $10.44m or +2.0% from $518.02m in FY25 1H26 $42.52m +15.2% | 2H26 $32.07m –13.4% 4-YEAR CAGR -1.6% ‘PAT excluding AASB16 net impact, net property revaluations & pecuniary penalty(a) $437.81m $34.51m or +8.6% from $403.30m in FY25 1H26 $39.91m +18.5% | 2H26 $5.40m –2.9%
Page 5
2026 RESULTS FOR ANNOUNCEMENT TO THE MARKET (continued) 5 • $790.29m reported PBT, up $37.18m (+4.9%) compared with FY25, driven by improved earnings from Australian franchising operations, stronger performance across established international company-operated retail businesses and stable income from the consolidated entity’s property portfolio, offset by investment and expansion in the UK • $654.69m PBT excluding net property revaluations, net impact of AASB 16 Leases & pecuniary penalty (a) recognised in FY26, up by $64.33m (+10.9%) from FY25 • $9.64bn total system sales revenue, up 3.1% • Aggregated Australian franchisee sales rose 2.4% to $6.584bn, reflecting strong 1H26 performance that moderated in 2H26 and strength of franchisees in Home, Lifestyle and Technology • Company-operated retail sales increased 4.5% to $3.052bn, supported by stores opened in FY26, which includes 4 new stores in Asia, 1 new store in the UK and improved trading performance across established stores in New Zealand, Ireland, Slovenia & Croatia and Singapore & Malaysia • $135.72m overseas company-operated PBT result, up 23.4%, with strong profit growth across New Zealand (+31.2%), Ireland (+36.2%), Singapore and Malaysia (+8.3%), Slovenia and Croatia (+38.8%), partially offset by establishment losses in UK during its expansion. Excluding the UK losses, PBT for the established international retail businesses would have been $166.93m, up 25.2%, from $133.36m in FY25. • $345.18m franchising operations PBT result, up 0.2%, with margins over 5% maintained at 5.24% (FY25: 5.36%) • $333.49m property segment PBT result, up 3.7%, due to net revaluation increments, rental growth, low vacancy and continued stability across the Australian Large-Format Retail property portfolio • Total assets approaching $9bn-> $8.85bn total assets, up 5.7%, predominantly comprised of high-quality tangible assets including a $4.80bn global freehold property portfolio • Net assets approaching $5bn-> $4.94bn net assets, up 2.0% and net debt-to-equity ratio increased to 18.81%, reflecting conservative gearing, disciplined capital management and strong operating cashflows • Total operating expenses held strong at an efficient 18.7% of total system sales, demonstrating good cost discipline while driving ongoing growth and navigating inflationary pressures. • Effective tax rate is 32.04% Profit After Tax & Non-Controlling Interests: $528.46m $10.44m or +2.0% from $518.02m in FY25 Profit After Tax (excluding AASB 16, net property revaluations & pecuniary penalty) $437.81m $34.51m or +8.6% from $403.30m in FY25 (a) excludes the one-off expense of $18.80 million for the pecuniary penalty recognised in FY26 for the resolution of the ASIC Proceedings against the Company (total penalty was $35 million, with $16.2 million recognised in prior years)
Page 6
Australian Franchising Operations • 195 franchised complexes in Australia comprising 549 independent franchisees • FY26 Aggregated Franchisee Sales Revenue*: $6.584 billion • FY26 Franchising Operations Revenue: $1.09 billion • FY26 Franchising Operations PBT: $345.18 million Overseas Company – Operated Retail • 123 company-operated stores in 7 overseas countries • 5 new company-operated stores in FY26: Malaysia – Kiara Bay, Kuala Lumpur (Oct-25), Gurney Plaza, Penang (Dec-25), IOI Mall Kulai, Johor (Apr-26); Singapore – Punggol Coast Mall, Punggol Way (Aug-25); United Kingdom – Gracechurch Shopping Centre, Sutton Coldfield (Apr-26) • FY26 Overseas Company–Operated Revenue: $2.90 billion • FY26 Overseas Retail PBT: $135.72 million [Established international retail PBT (excluding UK): $166.93 million] • Comprises 17.2% Total PBT [21.4% excluding property revaluations and 25.1% excluding UK expansion] • 99 franchised complexes owned (50.8% of total) • 480 diverse third-party tenants (large proportion ASX-listed) • $4.12 billion Australian investment property portfolio (largest single owner of LFR properties in Australia) • FY26 Property PBT: $333.49 million (including revaluations) • 29 international owned retail property assets (23.6% of total overseas stores) • $657.14 million overseas owner-occupied and investment property portfolio Strategic ‘Large-Format’ Retail Property Portfolio AN INTEGRATED RETAIL, FRANCHISE, PROPERTY AND DIGITAL SYSTEM 6 New Zealand 43 stores Slovenia 5 stores Malaysia 40 stores Singapore 12 stores Croatia 3 stores Ireland 16 stores Australia 195 franchised complexes United Kingdom 4 stores We operate an integrated retail, franchise, property and digital system across 8 countries. Investment in Technology, Digital Transformation and IT Infrastructure Assets Online sales channel Click & collect Store finder Trak by Harvey Norman® LiveChatQuick reserve * Sales made by franchisees do not form part of the financial results of the consolidated entity
Page 7
The consolidated entity operates an integrated retail, franchise, property and digital system, comprising three main strategi c pillars: 1. Franchise — 2. Retail — 3. Property complemented by sustained investment in technology, digital transformation and IT infrastructure assets. SEGMENT ANALYSIS 7 Franchising Operations Segment PBT RESULT $345.18m FRANCHISING OPERATIONS MARGIN of 5.24% Representing 54.5% of PBT excluding property revaluations [or 43.7% of Total PBT] TOTAL EXPENSES $743.38m REVENUE $1.09bn Overseas Company-Operated Retail Segment PBT RESULT $135.72m 5 NEW STORES OPENED DURING FY26 Representing 21.4% of PBT excluding property revaluations & 25.1% excluding UK strategic expansion [or 17.2% of Total PBT] TOTAL EXPENSES $2.77bn REVENUE $2.90bn Property Segment PBT RESULT $333.49m* $4.80bn Freehold Property Portfolio Representing 27.9% of PBT excluding property revaluations [or 42.2% of Total PBT] TOTAL EXPENSES $187.16m REVENUE $520.65m FY26 vs FY25 +4.3% (up $45.36m) FY26 vs FY25 +5.2% (up $142.65m) FY26 vs FY25 +3.3% (up $16.43m) 1H26 vs 1H25 +8.8% (up $47.37m) 2H26 vs 2H25 -0.4% (down $2.00m) 1H26 vs 1H25 +6.0% (up $21.72m) 2H26 vs 2H25 +6.8% (up $22.85m) FY26 vs FY25 +6.4% (up $44.57m) 1H26 vs 1H25 +14.2% (up $25.65m) 2H26 vs 2H25 -15.1% (down $24.85m) FY26 vs FY25 +0.2% (up $0.79m) 1H26 vs 1H25 +12.9% (up $182.86m) 2H26 vs 2H25 -3.0% (down $40.21m) 2H26 vs 2H25 +3.6% (up $1.53m) 1H26 vs 1H25 +35.6% (up $24.20m) 2H26 vs 2H25 -3.2% (down $41.74m) 1H26 vs 1H25 +11.8% (up $158.66m) FY26 vs FY25 +23.4% (up $25.73m) FY26 vs FY25 +4.4% (up $116.92m) 1H26 vs 1H25 +6.6% (up $17.04m) 2H26 vs 2H25 -0.2% (down $0.61m) 2H26 vs 2H25 -0.7% (down $1.06m) 2H26 vs 2H25 +0.5% (up $0.45m) 1H26 vs 1H25 +4.3% (up $4.03m) FY26 vs FY25 +3.7% (up $11.95m) 1H26 vs 1H25 +7.8% (up $13.00m) FY26 vs FY25 +2.5% (up $4.48m) [*impacted by: net revaluation increment of $156.75m in FY26 vs net revaluation increment of $154.38m in FY25, an increase of $2.38m]
Page 8
REVIEW OF THE BALANCE SHEET 8 • $296.56m increase in the value of the freehold investment property portfolio: o increase reflects new retail properties under construction, the relocation of selected complexes from leased sites to freehold sites, capital additions and refurbishments, in addition to substantial fair value increases • $158.04m increase in trade and other receivables: o primarily driven by a $125.36m rise in receivables from franchisees, reflecting increased utilisation of existing financial accommodation arrangements to fund inventory purchases, particularly during 2H26. The higher inventory investment was concentrated in premium and technology-led product categories. Offset by: • $23.32m decrease in property, plant and equipment: o primarily due to the strengthening of the Australian dollar against overseas currencies, which reduced the translated value of overseas assets at year end. On a local currency basis, property, plant and equipment increased during FY26, reflecting continued investment in the retail footprint, including five new company – operated store openings, category expansion initiatives in the UK, several franchise complex relocations and refurbishment projects across Australia and key offshore markets. • $301.28m increase in interest bearing loans and borrowings: o utilisation of existing debt facilities to fund strategic property acquisition and capital investment activities during the year o Maintained conservative gearing levels, with low net debt-to-equity ratio of 18.81% • $67.33m increase in deferred tax liabilities: o primarily due to the increase in the fair value of freehold investment properties • $35m included within liabilities for pecuniary penalty: o relating to the resolution of the ASIC proceedings against the Company following judgment handed down by the Federal Court of Australia on 28 July 2026 o liabilities recognised in prior years included $16.2m in respect to this matter 30 JUNE 2026 30 JUNE 2025 Increase / (Decrease) $ Increase / (Decrease) % Total assets $8.85bn $8.37bn $476.70m 5.7% Total liabilities $3.91bn $3.53bn $381.17m 10.8% Equity $4.94bn $4.84bn $95.53m 2.0% Total Assets $8.85 bn As at 30 June 2026 5.7% up by $476.70m from $8.37bn in June 25 Total Liabilities $3.91bn As at 30 June 2026 10.8% up by $381.17m from $3.53bn in June 25 [$m] [$m] June-25 June-26 June-25 June-26
Page 9
REVIEW OF THE BALANCE SHEET (continued) 9 Net Debt: $658.52mVSJune 26 $940.87m June 25 TOTAL EQUITY* ($AUD M) [*Total Equity excludes ROU assets, lease liabilities & acquisition reserve] $4,371.93 $4,560.52 $4,631.69 $4,904.96 $5,002.29 2022 2023 2024 2025 2026 NET DEBT/(CASH) ($AUD M) $450.77 $631.61 $671.11 $658.52 $940.87 2022 2023 2024 2025 2026 10.31% 13.85% 14.49% 13.43% 18.81% 2022 2023 2024 2025 2026 NET DEBT TO EQUITY RATIO
Page 10
REVIEW OF THE STATEMENT OF CASH FLOWS 10 • $107.75m lower in net receipts from franchisees primarily reflects increased utilisation of existing financial accommodation arrangements by franchises to fund inventory purchases, particularly during 2H26 together with increased investment in premium and technology-led product categories • $37.14m increase in payments to suppliers and employees primarily impacted by a presentation change, with GST/VAT payments for overseas locations of $107.26m previously included within payments to suppliers and employees in FY25 but now disclosed separately within GST payments in FY26. On a like-for-like basis, payments to suppliers and employees increased by $144.40m, reflecting 5 new store openings overseas, the full year contribution from stores opened in FY25, category expansion in the UK and general cost inflation • $45.55m increase in tax paid, reflecting higher taxable earnings generated across the franchising operations and company-operated retail segments Offset by: • $148.46m increase in cash receipts from customers, demonstrating continued growth primarily in established international retail businesses • $51.91m increase in investment in strategic freehold property purchases and refurbishment of existing freehold assets • $39.09m increase in loans granted to related and unrelated parties Offset by: • $33.06m reduction in payments for property, plant and equipment and intangible assets • $270m net proceeds from the syndicated facility in FY26 compared with net repayment of $55m in FY25 Offset by: • $62.30m higher dividend payments • $34.29m lower proceeds from other borrowings 30 JUNE 2026 30 JUNE 2025 Increase / (Decrease) $ Increase / (Decrease) % Net cash flows from operating activities $537.22m $694.30m ($157.08m) (-22.6%) Net cash flows used in investing activities ($302.27m) ($222.54m) ($79.73m) (-35.8%) Net cash flows used in financing activities ($215.66m) ($445.62m) $229.95m 51.6% Net increase in cash & cash equivalents $19.28m $26.14m ($6.86m) (-26.2%) Cash & cash equivalents at beginning of the year $279.30m $253.16m $26.14m 10.3% Cash & cash equivalents at end of the year $298.58m $279.30m $19.28m 6.9% OPERATING CASH INFLOWS Down by $157.08m from $694.30m in FY25 to $537.22m in FY26 OUTFLOWS FROM INVESTING ACTIVITIES Up by $79.73m from $222.54m in FY25 to $302.27m in FY26 OUTFLOWS FROM FINANCING ACTIVITIES Down by $229.95m from $445.62m in FY25 to $215.66m in FY26
Page 11
Comparable System Sales increase / (decrease) in local currencies: * Sales made by franchisees in Australia do not form part of the financial results of the consolidated entity. Harvey Norman®, Domayne® and Joyce Mayne® retail sales in Australia are made by independently owned franchisee businesses that are not consolidated with the consolidated entity‘s results. Australian franchisee aggregated sales revenue is provided to the market as it is a key indicator of the performance of the franchising operations segment. Aggregated System Sales increase / (decrease) in local currencies: AGGREGATED SYSTEM SALES REVENUE 11 Total Sales Local Currency 1H26 vs 1H25 2H26 vs 2H25 FY26 vs FY25 Australian Franchisees* $ AUD 4.8% (-0.2%) 2.4% New Zealand $ NZD 8.1% 2.9% 5.6% Slovenia & Croatia € EURO 13.5% 6.9% 10.4% Ireland € EURO 5.9% 2.4% 4.3% United Kingdom £ GBP 84.9% 8.8% 39.0% Singapore $ SGD 6.3% 1.6% 4.0% Malaysia MYR 8.5% 6.7% 7.6% Comparable Sales Local Currency 1H26 vs 1H25 2H26 vs 2H25 FY26 vs FY25 Australian Franchisees* $ AUD 4.7% (-0.1%) 2.4% New Zealand $ NZD 7.3% 3.7% 5.5% Slovenia & Croatia € EURO 13.5% 6.9% 10.4% Ireland € EURO 5.9% 2.4% 4.3% United Kingdom £ GBP 17.8% (-17.0%) (-3.2%) Singapore $ SGD 2.6% (-2.6%) 0.04% Malaysia MYR 3.3% 1.6% 2.4% Total System Sales Revenue of $9.64bn for FY26 Comprised of aggregated Franchisee sales in Australia plus Company-Operated sales in New Zealand, Slovenia, Croatia, Ireland, United Kingdom, Singapore and Malaysia: Aggregated Franchisee sales* revenue of $6.584bn Company-Operated sales revenue of $3.052bn
Page 12
• Australian franchisee sales revenue increased by 2.4% to $6.58bn in FY26 • Comparable franchisee sales revenue increased by 2.4% to $6.55bn from FY25 • Franchisee sales momentum was strong through 1H26, with sales up 4.8% to $3.50bn from $3.34bn in 1H25, supported by improved consumer confidence, a more stable inflation outlook and solid Christmas trading supported growth across key Home, Lifestyle and Technology categories • Conditions became more challenging in 2H26, with inflationary pressures evident through higher fuel, energy and freight-related costs, and ongoing cost-of-living pressures following three consecutive interest rate increases • Consumer confidence softened further following the May 2026 Federal Budget, resulting in more cautious discretionary spending • Aggregated franchisee sales revenue in 2H26 declined by only 0.2% relative to the strong comparative period in 2H25 • Technology-related categories remained an important contributor throughout FY26, supported by growing adoption of AI-enabled devices and continued product innovation AUSTRALIAN FRANCHISEE AGGREGATED SALES REVENUE* 12 * Sales made by franchisees in Australia do not form part of the financial results of the consolidated entity. Harvey Norman®, Domayne® and Joyce Mayne® retail sales in Australia are made by independently owned franchisee businesses that are not consolidated with the consolidated entity‘s results. Australian franchisee aggregated sales revenue is provided to the market as it is a key indicator of the performance of the franchising operations segment. Total franchisee sales* Year ended 30 June 2026 $6.58bn 2.4% increase of $153.28m vs FY25 Comparable franchisee sales* Year ended 30 June 2026 2.4% increase of $154.03m vs FY25 $6.55bn
Page 13
30 June 2026 30 June 2025 Increase / (Decrease) $ Increase / (Decrease) % Franchising operations segment revenue $1.09bn $1.04bn $45.36m 4.3% Aggregated franchisee headline sales revenue* $6.584bn $6.431bn $153.28m 2.4% Franchising operations segment PBT $345.18m $344.39m $0.79m 0.2% Franchising operations margin % [calculated as franchising operations segment PBT ÷ aggregated franchise sales revenue] 5.24% 5.36% (-12bps) *Sales made by franchisees in Australia do not form part of the financial results of the consolidated entity. The franchising operations segment PBT was broadly in line with FY25, increasing by $0.79m (+0.2%) due to: • $45.36m (+4.3%) rise in franchising operations segment revenues: o $38.83m increase in revenue from franchise fees, driven by 2.4% rise in aggregated franchisee sales revenue to $6.58bn during the year o $12.29m increase in rent and outgoings received from franchisees occupying leased properties Offset by: • $44.57m (+6.4%) increase in costs to operate the franchising operations segment mainly due to: o $13.17m deterioration in the net impact of AASB 16 Leases resulting in a net loss of $5.25m for FY26 compared to a net gain of $7.92m for FY25. The fair value assessment of right-of-use assets within the leasehold investment property portfolio remains sensitive to discount rates and market conditions prevailing at each balance date o $16.82m additional investment by the Franchisor to assist franchisees in the customer loyalty and retention initiatives, primarily through bonus gift card promotions o Higher operating costs associated with the monitoring and evaluation of franchisee compliance and performance FRANCHISING OPERATIONS SEGMENT 13 (Half-year ended 31 December) 1H22 1H23 1H24 1H25 1H26
Page 14
OVERSEAS COMPANY-OPERATED RETAIL SEGMENT 14 Overseas retail segment PBT result 30 June 2026 30 June 2025 Increase / (Decrease) $ Increase / (Decrease) % Retail – New Zealand $85.12m $64.89m $20.22m 31.2% Retail – Singapore & Malaysia $44.88m $41.43m $3.45m 8.3% Retail – Ireland $30.84m $22.65m $8.19m 36.2% Retail – Slovenia & Croatia $6.09m $4.39m $1.70m 38.8% Total established international retail segment PBT result $166.93m $133.36m $33.57m 25.2% Retail – United Kingdom ($31.21m) ($23.37m) ($7.84m) (-33.5%) Total overseas retail segment PBT result $135.72m $109.99m $25.73m 23.4% (Year ended 30 June)(Year ended 30 June) Aggregated established international retail PBT result ($AUD M) Aggregated established international retail revenue ($AUD M) 5 new overseas stores opened in FY26 Punggol Way, Singapore Opened on 8 August 2025 Located in Punggol Coast Mall Kuala Lumpur, Malaysia Opened on 1 October 2025 Located in The Beat at Kiara Bay Penang, Malaysia Opened on 15 December 2025 Located in Gurney Plaza Established International Retail Segment Comprises 21.4% of PBT excluding property revaluations and 25.1% excluding UK strategic expansion West Midlands UK Opened on 24 April 2026 Located in Gracechurch Centre Johor, Malaysia Opened on 30 April 2026 Located in IOI Mall Kulai 2022 2023 2024 2025 2026 $2,609.84 $2,581.22 $2,612.76 $2,721.66 $2,848.53 2022 2023 2024 2025 2026 $230.70 $141.14 $122.86 $133.36 $166.93
Page 15
• Sales for FY26 increased by $50.60m (+7.0%) from $726.34m to $776.94m. • Retail result was $30.84m for FY26, up by $8.19m (+36.2%) from $22.65m in FY25. Profitability was the strongest in 1H26, contributing $7.17m of the increase. While sales declined by 3.0% in 2H26, profit increased by a further $1.03m (+21.7% from 2H25) reflecting disciplined pricing, an improved product mix and effective cost management. • Operating expenses increased during FY26, reflecting broader inflationary pressures, higher employment and occupancy costs and continued investment to support business growth. • Irish balance sheet included a property portfolio valued at $58.81m. During FY26, the portfolio recorded a $0.11m fair value increase recognised directly in equity in the balance sheet and a further $2.56m fair value gain recognised in the income statement. Ireland • Sales for FY26 decreased by $1.82m (-0.2%) to $951.94m for FY26, from $953.76m in FY25 due to the 5.4% depreciation of the NZD against the AUD. In local currency, sales increased by NZ$58.08m (+5.6%) to NZ$1.104bn. • The retail result was $85.12m for FY26, up $20.22m (+31.2%) from $64.89m in FY25. A strong 1H26 contributed $11.49m to full-year growth (+32.3% from 1H25), while operating leverage, gross margin improvement and disciplined cost management enabled profit growth to accelerate further in 2H26, contributing an additional $8.73m (+29.8% from 2H25). As a result, earnings growth significantly outpaced sales growth during the year. • The NZ balance sheet included a property portfolio valued at $442.59m. During FY26, the portfolio recorded a fair value increase of $27.74m, comprising a $29.12m increment recognised directly in equity and a $1.45m decrement recognised in the income statement. New Zealand • Aggregated sales revenue for Asia combined was $787.24m, an increase of $40.49m (+5.4%) from $746.75m in FY25. • The segment profit result of the Harvey Norman® and Space Furniture® brands in Asia was $44.88m for FY26, an increase of $3.45m (+8.3%) from $41.43m in FY25. • Profit growth was strongest in the first half, with 1H26 contributing $6.10m of the increase (up 27.9% from 1H25), reflecting strong sales growth across both Singapore and Malaysia. This was partially offset by a decline of $2.65m in 2H26, as rising operating costs moderated earnings growth. Malaysia • Sales for the 40 Harvey Norman® Malaysian stores for FY26 were $379.03m , an increase of $37.00m (+10.8%) from $342.03m in FY25. • Sales growth was primarily driven by the opening of three new stores during FY26, together with the full-year contribution from the four stores opened in FY25 and continued positive like- for-like sales growth across the existing store network. Singapore • Sales for the 12 Harvey Norman® Singaporean stores for FY26 were $392.07m , an increase of $9.81m (+2.6%) from $382.26m in FY25. • Growth was primarily driven by contributions from the new Punggol Coast Mall store (opened Aug-25) and Lot One store (opened last year Jun-25), together with positive like-for-like growth across the Computers and Furniture departments. These outcomes were achieved despite the closure of the Centrepoint store in August 2025. Singapore & Malaysia • Aggregated sales revenue for Slovenia and Croatia increased by $30.22m (+13.2%) from $229.67m in FY25 to $259.89m in FY26 • Aggregated retail result for Slovenia and Croatia increased by $1.70m (+38.8%) from $4.39m in FY25 to $6.09m in FY26 Slovenia • Total Slovenian sales were $171.21m for FY26, up by $18.72m (+12.3%) from $152.49m in FY25. • The retail segment in Slovenia delivered a profit of $9.46m in FY26, an increase of $1.70m (+21.9%) from $7.76m in FY25. • All major retail categories recorded improved sales during FY26. Performance was supported by strong consumer demand for Next Gen-AI laptops, premium television products and household robotics. Croatia • Sales were $88.68m for FY26, increasing by $11.51m (+14.9%) from $77.18m in FY25. • Operating costs increased, primarily due to higher employee expenses arising from annual minimum wage increases and broader wage inflation. The retail segment in Croatia delivered a loss of $3.37m in FY26, broadly in line with FY25. Slovenia & Croatia OVERSEAS COMPANY-OPERATED RETAIL SEGMENT (continued) 15 United Kingdom • FY26 marked an important milestone in the development of the UK platform, with the opening of the second English company-operated store at Gracechurch Shopping Centre, Sutton Coldfield, in April 2026. The UK network continued to evolve during FY26 through the reintroduction of the Computers and Electrical categories at the Boucher Road store in November 2025, following the reintroduction of these categories at Holywood in September 2024. • Sales for FY26 increased by $14.31m (+37.7%) to $52.24m, from $37.94m in FY25. • Growth was strongest in 1H26, contributing $13.76m of the increase, reflecting a full six-month contribution from Merry Hill. Sales increased by a further $0.55m in 2H26 amid a more subdued retail environment. • Retail result was a loss of $31.21m for FY26, an increase in loss of $7.84m (-33.5%), from a loss of $23.37m in FY25. • As expected, the continued investment required to expand the UK network impacted profitability during FY26. Our UK strategy has always been about building a sustainable business for the long term and that requires us to invest ahead of the growth we expect to achieve. With Merry Hill and Gracechurch now established in the West Midlands and the Northern Ireland store repositioning program substantially complete, we continue to see attractive opportunities in the region and remain disciplined in assessing future locations to support long-term growth across the UK platform.
Page 16
PROPERTY SEGMENT 16 Property segment revenues have increased to $520.65m for FY26, up by $16.43m from FY25 mainly due to: • $14.30m (+4.8%) increase in rent and outgoings received from freehold properties due to higher market rentals and lower vacancy rates • $2.38m increase in net property revaluation adjustments from a net increment of $154.38m for FY25 compared to an increment of $156.75m for FY26 • The uplift in the Australian portfolio value was primarily driven by continued rental growth, positive leasing spreads and strong occupier demand across the portfolio. Persistently low vacancy levels, stable capitalisation rates and limited new supply supported valuation outcomes throughout FY26, while the leasing of previously vacant space contributed to improved occupancy and income growth. Property segment result before tax was $333.49m for FY26, an increase of $11.95m from FY25 mainly due to: • $16.43m increase in property segment revenue (per above) offset by $4.48m increase in property-related operating costs • Excluding net property revaluations for both years, the property segment result would have been $176.74m for FY26 compared to $167.17m for FY25, an increase of $9.57m, or 5.7%, mainly due to rental growth this year 30 June 2026 30 June 2025 Increase / (Decrease) $ Increase / (Decrease) % Property segment revenue $520.65m $504.23m $16.43m 3.3% Net property revaluation adjustments $156.75m $154.38m $2.38m 1.5% Property segment EBITDA $383.76m $370.67m $13.09m 3.5% Property segment result before tax $333.49m $321.55m $11.95m 3.7% Property Segment Revenue $520.65m Up by $16.43m or 3.3% from $504.23m in FY25 Property Segment Result Before $333.49m Up by $11.95m or 3.7% from $321.55m in FY25
Page 17
• The freehold property portfolio valued at $4.80bn represents 54.3% of our $8.85 billion total asset base. • The consolidated entity continues to be the largest single owner of LFR (Large-Format Retail) real estate in the Australian market. • As at 30 June 2026, the Australian freehold investment property portfolio increased to $4.12bn, up from $3.81bn at 30 June 2025, representing growth of $302.97m over the past 12 months. During FY26, a net revaluation increment of $154.88m was recognised across 73 investment properties, together with capital additions and refurbishments completed during the year. • As at 30 June 2026, the consolidated entity owned 99 franchised complexes representing 50.8% of the 195 franchised complexes operating across Australia. Our Australian LFR centres are strategically located within high-growth metropolitan and regional markets and continue to benefit from strong tenant demand. • Over 480 third-party tenants across diverse categories including food, lifestyle, hardware, medical, pet and automotive, with a significant proportion being ASX-listed and national retailers. • This breadth of tenancy, combined with the scale and quality of the portfolio, underpins recurring rental income and reinforces the strategic value of property ownership within our integrated retail, franchising, property and digital system. • Globally, we have 123 company-operated stores across 7 overseas countries. 29 of the stores located overseas (23.6% of total) are owned by the consolidated entity. The aggregate value of the overseas owner-occupied and investment property portfolio is $657.14m, decreasing in value by $41.61m or 6.0% primarily attributable to the depreciation of local currencies against the Australian dollar. On a local currency basis, property values increased across all 7 countries. Composition of freehold property segment assets June 2026 # of Owned Retail Property Assets # of Owned Other Property Assets Net Increase / (Decrease) in Fair Value [Income Statement] Net Increase / (Decrease) in Fair Value [Equity] (1) Investment Properties (Freehold) - Australia $4,117.93m 99 48 $154.88m - - New Zealand $42.68m - 5 ($0.07m) - - Ireland $31.06m - 1 $1.63m - Total Investment Properties (Freehold) $4,191.66m 99 54 $156.44m - (2) Owner—Occupied Land & Buildings - Australia $13.40m - 1 - $2.37m - New Zealand $399.91m 22 4 ($1.39m) $29.12m - Singapore $21.81m - 2 - $1.30m - Slovenia $117.15m 5 1 $0.77m $4.51m - Ireland $27.76m 2 - $0.93m $0.11m - Croatia $16.77m - 1 - - Total Owner—Occupied Land & Buildings $596.80m 29 9 $0.31m $37.41m (3) Joint Venture Assets $14.88m - 8 - - Total Freehold Property Segment Assets $4,803.34m 128 71 $156.75m $37.41m FREEHOLD PROPERTY PORTFOLIO 17
Page 18
Composition of the Leasehold Property Portfolio: Financial Impact of AASB 16 Leases on the Consolidated Income Statement: Composition of leasehold property portfolio Right-of-Use Assets June 2026 Lease Liabilities June 2026 # of Leased Retail Property Assets # of Leased Other Property Assets (1) Leases of Properties Licensed to External Parties - Australia $784.60m $829.15m 96 210 (2) Leases of Owner-Occupied Properties and Plant and Equipment Assets - Australia $47.06m $62.30m - 18 - New Zealand $123.57m $139.56m 21 36 - Singapore & Malaysia $236.54m $174.53m 52 18 - Slovenia & Croatia $18.64m $21.03m 3 1 - Ireland $78.05m $100.99m 14 14 - United Kingdom $11.70m $18.65m 4 2 Total Leases of Owner—Occupied Properties and Plant and Equipment Assets $515.57m $517.06m 94 89 Total Leasehold Property Portfolio $1,300.16m $1,346.20m 190 299 Financial Impact of AASB 16 Leases: Leases of Owner- Occupied Properties $000 Leases of Properties Sub-Leased to External Parties $000 Total Leases $000 Property, plant and equipment: Right-of-use asset - Depreciation expense $78,980 - $78,980 Investment properties (leasehold): Right-of-use asset - Fair value re-measurement - $83,056 $83,056 Finance costs: Interest on lease liabilities $25,713 $43,926 $69,639 Total AASB 16 Expenses Recognised $104,693 $126,982 $231,675 Less: Lease payments made during FY26 (excluding variable lease payments and short-term, low-value leases) ($103,276) ($122,381) ($225,657) Other Adjustments ($3,666) - ($3,666) AASB 16 Net (Increase) / Decrease in PBT for FY26 ($2,249) $4,601 $2,352 LEASEHOLD PROPERTY PORTFOLIO 18
Page 19
OUTLOOK 19 The July 2026 sales result reflected a combination of timing effects and market-specific factors across the geographically diversified operations. In Australia and New Zealand, comparable sales were impacted by the timing of major product launches, including Samsung's Galaxy Fold release, which occurred in July last year but shifted to August this year. This was against strong PCP comparable sales growth of 6.4% and 7.2%, respectively. Pleasingly, Australian franchisee comparable written sales (i.e. orders for goods still to be delivered) for the period 1 August 2026 to 24 August 2026 was up 3.8% on the prior period. Underlying sales momentum remained positive in Europe, with local currency comparable sales increasing 2.4% in Ireland and 4.1% in Slovenia and Croatia, despite cycling strong PCP growth of 10.3% and 15.8%, respectively. In the United Kingdom, the year-on-year comparison reflects a more disciplined sales strategy, with July 2025 benefiting from elevated promotional activity that was not repeated in July 2026. Singapore was affected by the absence of government-funded energy rebate programs that supported demand for climate-related appliances in July 2025, while trading conditions in Malaysia were impacted by uncertainty surrounding state elections. Retail Trading Update: 1 July 2026 to 31 July 2026 vs 1 July 2025 to 31 July 2025 % increase / (decrease) calculated in local currencies Country Total % Comparable % Australian Franchisees $ AUD (-3.4) (-3.4) New Zealand $ NZD (-4.4) (-4.2) Slovenia & Croatia € EUR 4.1 4.1 Ireland € EUR 2.4 2.4 United Kingdom £ GBP 7.9 (-26.8) Singapore $ SGD (-5.4) (-4.4) Malaysia MYR (-0.2) (-4.3) Aggregated system sales increase/(decrease) in local currencies from 1 July 2026 to 31 July 2026 vs 1 July 2025 to 31 July 2025: 1 July 2025 to 31 July 2025 vs 1 July 2024 to 31 July 2024 % increase / (decrease) calculated in local currencies Country *PCP Total % *PCP Comparable % Australian Franchisees $ AUD 6.6 6.4 New Zealand $ NZD 8.7 7.2 Slovenia & Croatia € EUR 15.8 15.8 Ireland € EUR 10.3 10.3 United Kingdom £ GBP 233.6 (-4.6) Singapore $ SGD 9.0 6.5 Malaysia MYR 6.4 0.4 *PCP = prior corresponding period i.e. 1/7/25 to 31/7/25 vs 1/7/24 to 31/7/24 Aggregated sales increase/(decrease) in local currencies: In Australia, we intend to open 1 new franchised complex during FY27. We intend to relocate 4 franchised complexes, 3 of which will be relocated to newly constructed freehold properties. During FY26, the refit program has continued, with 2 refits currently in progress. Over the next 12 months, we intend to commence a further 4 refits. In the United Kingdom, we are currently in the final stage of lease negotiations for a third site within the West Midlands region, which we anticipate opening in 2027. A further site has been identified and is currently under negotiation. In Croatia, we have acquired land in East Zagreb to develop a new Harvey Norman® Flagship store which is expected to open in 2028. In Malaysia, we have signed 3 new store leases which we expect to open during FY27. In Singapore, we have signed a lease for a new store that is expected to open during FY27. In Ireland, we have signed a lease for a new clearance centre that is expected to open during FY27.