Slides
Page 1
FY26 Investor Presentation Michael Hill turnaround strategy delivers record Group revenue ASX/NZX: MHJ 28 August 2026
Page 2
Disclaimer 2 Certain statements in this report constitu te forward-looking statements. Forward-looking statements are statements (other than statements of historical fact) relating to future events and the anticipated or planned financial and operational performance of Michael Hill International Limited and its related bodies corporate (the Group). The words “targets”, “believes”, “expects”, “aims”, “intends”, “plans”, “seeks”, “will”, “may”, “might”, “anticipates”, “projects”, “assumes”, “forecast”, “likely”, “outlook”, “would”, “could”, “should”, “continues”, “estimates” or similar expressions or the negatives thereof, generally identify these forward- looking statements. Other forward-looking statements can be identified in the context in which the statements are made. Forward-looking statements include, among other things, statements addressing matters such as the Group’s future results of operations; financial condition; working capital, cash flows and capital expenditures; and business strategy, plans and objectives for future op erations and events, including those relating to ongoing operational and strategic reviews, sustainability targets, exp ansion into new markets, future product launches, points of sale and production facilities. Although the Group believes that the expectations reflected in these forward-looking statements are reasonable, they are not gu arantees or predictions of future performance or statements of fact. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors that could cause the Group’s actual results, performance, operations or achievements or industry results, to d iffer materially from any future results, performance, operations or achievements expressed or implied by such forward-looking statements. Such risks, uncertainties and other important factors include, among others: glob al and local economic conditions; changes in market trends and end-consu mer preferences; fluctuations in the prices of raw materials, currency exchange rates, and interest rates; the Group’s plans or objectives for future operations or products, including the ability to introduce new jewellery and non- jewellery products; the ability to expand in existing and new markets and risks associated with doing business globally and , in particular, in emerging markets; competition from local, national and international companies in the markets in which the Group operates; the protection and strengthening of the Group’s intellectual property rights, including patents and trademarks; the future adequacy of the Group’s current warehousing, logistics and information technology operations; changes in laws and regulations or any interpretation thereof, applicable to the Group’s business; increases to the Group’s effective tax rate or other harm to the Group’s business as a result of governmental review of the Group’s transfer pricing policies, conflicting taxation claims or changes in tax laws; and other factors referenced to in this report. Should one or more of these risks or uncertainties materialise, or should any underlying assu mptions prove to be incorrect, the Company’s actual financial condition, cash flows or results of op erations could differ materially from that described herein as anticip ated, believed , estimated or expected. Accordingly, you are cautioned not to place undue reliance on any forward-looking statements, as there can be no assurance the actual outcomes will not differ materially from the forward-looking statements in this report. Except as required by applicable laws or regulations (including the ASX Listing Rules), the Group does not intend, and does not assume any obligation, to update any forward- looking statements contained herein. All subseq uent written and oral forward-looking statements attribu table to us or to persons acting on the Group’s behalf are expressly qualified in their entirety by the cautionary statements referred to above and contained elsewhere in this report.
Page 3
Agenda FY26 Performance Overview Jonathan Waecker Chief Executive Officer FY26 Financial Results Elodie Guillaumond Chief Financial Officer FY27 Strategy and Trading Update Jonathan Waecker Chief Executive Officer Closing & Q&A All 3
Page 4
FY26 Performance Overview Jonathan Waecker CHIEF EXECUTIVE OFFICER
Page 5
Michael Hill turnaround delivers record Group revenue, EBIT up 57%, dividend restored 5 • A new leadership team, in place and driving the reset.We are focused on excellent retail fundamentals, listening to our customers, and listening to our people. • A simpler business, following a strategic simplification of the brand portfolio. We have returned our focus back to where it belongs, on profitably growing Michael Hill. • A renewed focus on execution. We have sharpened product curation and personalised ranges, tailored our go-to-market by market, clarified price architecture, improved promotional discipline, and strengthened the customer experience in every store. • The Bevilles reset is underway and gaining traction. Same store sales, margin, and gross profit dollars all grew year on year in the second half. • The FY26 results demonstrate our turnaround strategy is working. Sales grew in every market, comparable EBIT is up 57%, we’ve strengthened the balance sheet, restored the dividend, and made progress against every one of our growth engines. Update with neutral background
Page 6
FY26 Results Summary 6 Strong sales momentum and margin resilience resulted in significant profit growth. Record Group Revenue $655.7m Up 4.1% in constant currency Up 1.9% in AUD Same Store Sales 5.2% Up in all markets Up 3.0% in AUD Gross Margin 60.5% Flat to prior year Comparable EBIT $24.0m Up 57% on prior year Net Debt $5.5m Down $36.3m on prior year Inventory $189.7m Down $9.4m on prior year Productivity5 up 13% CODB% 57.1% Down 70 bps on prior year Final Dividend 2 cents Compared to nil in prior year 1. On a constant currency basis. 2. Excludes relevant one-off normalisations. 3. Comparable EBIT is an unaudited non-IFRS measure prepared on a normalised basis, as detailed in Appendix A. 4. Cost of doing business % is an unaudited non-IFRS measure calculated on a normalised basis, and excludes foreign exchange gains/losses, as a % of revenue. 5. Group Gross Margin Return on Investment (GMROI). 1 2 3 4
Page 7
Strategic Growth Engines The strategic agenda we set out at our Investor Day in April is already gaining traction. Growth Engines What We Did Execution Proof Points Canada Growth • Canada-specific go -to-market behaviours. • Record year, SSS up 7.0%, and online sales up 22% Australia & NZ Productivity • Lifted productivity of existing footprint. • Australian SSS up 4.8%, NZ SSS up 3.6%. Digital Acceleration • Realigned online growth team to sharpen focus. • Michael Hill online sales grew 10%. Product Innovation • Sharpened pricing and go -to-market flexibility. • Launched product newness across ranges. • 15% of Michael Hill sales from “Made for You. ” • Inventory productivity 1 up 13%. Services-led Differentiation • Digitised Michael Hill Diamond Warranty. • Formed a dedicated Services team. • Re-launched bespoke service offering. • Brilliance loyalty programme grew to 3.3m members. • GP$ from Brilliance members up 14%. • Bespoke jewellery capability in more than 40 stores. Bevilles Reset • Introduced new leadership, updated go -to-market approach with a clear focus on value segment. • H2 returned to growth, as SSS improved from (4.6%) in H1 to 5.8% in H2, and gross margin grew 660 bps. Becoming an AI-Powered Retailer • Launched Retail Assist AI, providing instant knowledge to teams to better focus on customers. • Proprietary Retail Assist AI now powers over 50% of all retail support enquiries. 71. Group Gross Margin Return on Investment (GMROI)
Page 8
SECTION 02 FY26 Financial Results Elodie Guillaumond CHIEF FINANCIAL OFFICER
Page 9
FY26 Group Financial Results 9 Profit growth from stronger sales, resilient margins, and disciplined cost management. FY26 FY25 Change Revenue Same Store Sales (on a constant currency basis) $656m $644m 1.9% 5.2% Gross profit 1 $397m $389m 1.9% Gross margin 1 60.5% 60.5% Flat CODB2 as a % of revenue 57.1% 57.8% (70bps) Comparable EBIT 3 Comparable EBIT 3 (on a constant currency basis) $24.0m $15.3m 57% 68% Comparable EBIT 3 % (as a % of revenue) 3.7% 2.4% 130bps Statutory NPAT $10.0m $2.1m 376% Store network 281 287 (6) • Record group revenue, with sales growth across every market in local currency and momentum building through the year. • Gross margin held flat, supported by stronger product mix and improved pricing execution. • Cost of doing business down 70 basis points, reflecting disciplined cost management in an inflationary environment. • Comparable EBIT up 57% (68% on a constant currency basis). • Store network optimisation continued: closing unprofitable stores, modernising our strongest, and opening new ones. 1. Excludes relevant one-off normalisations. 2. Cost of doing business is an unaudited non-IFRS measure calculated on a normalised basis and excludes foreign exchange gains/losses. 3. Comparable EBIT is an unaudited non-IFRS measure prepared on a normalised basis, as detailed in Appendix A. • H2 comparable EBIT loss improved $1.8m to ($6.9) from ($8.7m) in FY25 H2. • This was achieved despite $4.6m less deferred revenue from Professional Care Plans (PCP) being released in FY26 H2 vs FY25H2, largely due to updated FY25 assumptions, including changes to repair patterns and cost indexation. • Underlying PCP performance, as measured by the in-year value of plans sold, grew 1.2% in FY26, but the accounting standard recognises this revenue gradually over the life of the plan. • PCP remains a key lever within our strategy and our services-led growth engine. H2 EBIT improved $1.8m despite deferred revenue impact
Page 10
FY26 Australia Segment 10 Strong performance in our largest market. • Same Store Sales up 4.8%. • Higher sales and margin drove a healthy uplift in gross profit, delivering a 34.4% improvement in segment comparable EBIT . • Gross margin up 130 basis points to 60.7%, driven by disciplined pricing, improved product mix, and a continued focus on profitable growth. • Invested in the network, including a new store at Bondi Junction NSW, a refurbishment at Rundle Mall SA, and a relocation at Castle T owers NSW, with the refit programme delivering improvements in average transaction values, margin, and conversion rates above the network average. • We saw a clear inflection between the halves, as Same Store Sales improved from a year- on-year decline of (4.6%) in FY26 H1 to year-on-year growth of 5.8% in FY26 H2. • Gross margin was up 660 basis points in FY26 H2 versus FY26 H1. Bevilles' H1 same store sales decline reversed in H2 AU$ FY26 FY25 Change Revenue 372m 363m 2.5% Same Store Sales 365m 348m 4.8% Gross profit 1 226m 215m 4.8% Gross margin 1 60.7% 59.4% 130 bps CODB2 as a % of revenue 51.0% 52.0% (100 bps) Comparable EBIT 3 36.3m 27.0m 34.4% Comparable EBIT 3 (as a % of revenue) 9.8% 7.4% 240 bps Store network 157 (incl. 36 Bevilles) 160 (incl. 37 Bevilles) (3) 1. Excludes relevant one-off normalisations. 2. Cost of doing business is an unaudited non-IFRS measure calculated on a normalised basis and excludes foreign exchange gains/losses. 3. Comparable EBIT is an unaudited non-IFRS measure prepared on a normalised basis, as detailed in Appendix A.
Page 11
FY26 Canada Segment 11 Delivered another record performance in our fastest-growing market. CA$ FY26 FY25 Change Revenue 174m 162m 7.3% Same Store Sales 169m 158m 7.0% Gross profit 1 105m 98m 7.7% Gross margin 1 60.3% 60.1% 20 bps CODB2 as a % of revenue 47.8% 48.5% (70 bps) Comparable EBIT 3 21.9m 18.9m 16.3% Comparable EBIT 3 (as a % of revenue) 12.6% 11.6% 100 bps Store network 81 82 (1) • Same Store Sales up 7.0%, and online sales up 22%. • Segment comparable EBIT up 16.3%. • Gross margin improved by 20 bps to 60.3%, achieved through differentiated go-to-market activities. • CODB was impacted by increased security costs. • Bridal sales grew strongly, supporting the acquisition of premium customers with greater lifetime value. • Invested in our flagship network with a new store at Pacific Centre, Vancouver, and a refurbishment at Yorkdale, T oronto, with stronger performance expected as a part of our refit programme. • We continue to target an optimal footprint of 85 to 90 stores. • Looking ahead to 2027, we plan to modernise five of our top six stores, extending our refreshed network across every major Canadian market: T oronto, Vancouver , Calgary, Edmonton. 1. Excludes relevant one-off normalisations. 2. Cost of doing business is an unaudited non-IFRS measure calculated on a normalised basis and excludes foreign exchange gains/losses. 3. Comparable EBIT is an unaudited non-IFRS measure prepared on a normalised basis, as detailed in Appendix A.
Page 12
FY26 New Zealand Segment 12 Delivered a marked acceleration, as the return to growth over Christmas was sustained through the second half. NZ$ FY26 FY25 Change Revenue 112m 109m 3.1% Same Store Sales 109m 105m 3.6% Gross profit 1 65m 64m 2.7% Gross margin 1 58.0% 58.3% (30 bps) CODB2 % 45.6% 45.7% (10 bps) Comparable EBIT 3 14.0m 13.7m 2.4% Comparable EBIT 3 (as a % of revenue) 12.5% 12.6% (10 bps) Store network 43 45 (2) • Same Store Sales up 3.6% for the year. • This performance reflects a deliberate decision to fund additional customer-facing initiatives, including reinvestment into team and localised product ranges. • Gross margin was largely flat at 58.0% (FY25: 58.3%), reflecting an intentional focus on adapting our offer to the trading environment, balanced by a positive contribution from bridal, which delivered strong growth in both sales and gross profit. • The network finished the year with 43 stores (FY25: 45), reflecting two store closures. • Subsequent to year end, we relocated our Auckland CBD flagship store in July 2026, and plan to open one further net new store in H1 FY27. 1. Excludes relevant one-off normalisations. 2. Cost of doing business is an unaudited non-IFRS measure calculated on a normalised basis and excludes foreign exchange gains/losses. 3. Comparable EBIT is an unaudited non-IFRS measure prepared on a normalised basis, as detailed in Appendix A.
Page 13
Strengthened Balance Sheet 13 Disciplined working capital management reduced debt. • Net debt closed at $5.5m (FY25: $41.9m), an improvement of $36.3m, with significant headroom ahead of peak seasonal inventory build for Christmas, and was mainly driven by four factors: • disciplined inventory management, • stronger cash generation from improved sales and strong margins, • a one-off Australian income tax refund of $7.5m in FY26 H2, • continued cost discipline, and improved supplier terms. • Inventory down $9.4m to $189.7m, with inventory productivity1 up 13%, driven by better inventory management and stronger clearance sell-through. • Trade and other payables increased, supported by favourable supplier terms, incentive accruals, and increased deposits for “Made For You” custom orders. • Intangible assets reduced by the non-cash write-off relating to T enSevenSeven. • Balance sheet strength gives us flexibility to invest more into inventory and capital expenditure to support continued growth, while also providing for a sustainable return to dividends. 1. Group Gross Margin Return on Investment (GMROI) $Million FY26 FY25 Cash and cash equivalents 14.5 10.2 Inventories 189.7 199.1 PP&E and Intangible assets 92.3 100.4 Right-of-use assets 109.8 121.5 Other assets 79.0 87.2 Total assets 485.2 518.4 Trade and other payables 81.5 68.7 Borrowings 20.0 52.1 Lease liabilities 126.5 141.4 Other liabilities 84.1 85.6 Total liabilities 312.1 347.8 Net assets 173.1 170.6 Net cash/(debt) (5.5) (41.9)
Page 14
Disciplined Capital Deployment 14 Capital expenditure remained disciplined and in line with prior year. • Capital expenditure and SaaS implementation costs of $19.7m in FY26, in line with FY25. • A deliberate shift from technology investment to store experience, including new fit-outs and refurbishments supporting the measured rollout of our new store format, with the refit programme delivering improvements in average transaction values and conversion rates above the network average. • Built and refreshed 14 stores during the year, including 4 flagship stores, enhancing customer experience and brand presentation. • Store experience improvements included mobile point-of-sale and enhanced visual merchandising. • FY27 capital expenditure and SaaS costs are expected to increase to approximately $25m, funding further store refreshes and investment in AI-driven inventory planning and merchandise allocation. • Disciplined, returns-focused capital allocation remains in place, prioritising high-return investment in stores and customer experience while maintaining strong cash generation and balance sheet strength. Property, plant & equipment $12.5m SaaS implementation related projects $5.9m Intangible assets $1.3m $19.7m FY26 total capex
Page 15
Dividend Restored 15 Commitment to delivering sustainable returns to shareholders over time. The Board has decided to declare a final dividend of AU2.0 cents per share, partially franked (50%) for Australian purposes, with partial New Zealand imputation credits (50%) and with conduit foreign income. “Restoring the dividend reflects the Board's commitment to delivering sustainable returns to shareholders over time.The 2.0 cent second half dividend is enabled by a materially stronger balance sheet and improved operating performance, which has continued into the first eight weeks of FY27” Rob Fyfe, Chair
Page 16
SECTION 03 FY27 Strategy and Trading Update Jonathan Waecker CHIEF EXECUTIVE OFFICER
Page 17
Driving Profitable Growth 17 All four levers progressed: stronger store productivity, sales growth, steady margins, and lower cost of doing business. Gross Margin GROSS PROFIT IMPROVEMENT Sales DIVERSIFIED REVENUE GROWTH Footprint IMPROVED STORE PRODUCTIVITY Cost of Doing Business OPERATING LEVERAGE IMPROVEMENT Gross Profit per store up 4% Inventory Productivity up 13% across the Group 1 Online Sales up 10% 2, 3 Same Store Sales up 5.2% 2 (up 3% in AUD) Held flat at 60.5% demonstrating resilience in a challenging macro environment Down -70 bpsFY26 Progress: 1. Group Gross Margin Return on Investment (GMROI) 2. Constant currency 3. Michael Hill brand, across all segments
Page 18
18 5 Brands 2 Brands FROM TO AUSTRALIA CANADA NEW ZEALAND AUSTRALIA We’ve Simplified The Business We start FY27 with a focused two-brand portfolio, built to drive profitable growth.
Page 19
Making modern luxury accessible. 19 Our Purpose
Page 20
20 Making Modern Luxury Accessible Win more customers, scaling Michael Hill beyond $700M. Grow Customers. Set a new standard for profitability at Michael Hill. Grow Profit. Turn our service into a defining reason customers choose Michael Hill. Grow Engagement. Raise our performance standards and decision discipline to unlock growth. People, culture and operating model. Our strategy for Michael Hill is to focus on growing customers, profit, and engagement.
Page 21
21 Raise our performance standards and decision discipline to unlock growth. People, culture and operating model. Our strategy for Bevilles is to win on value, to move fast, and to run lean. Deliver unmistakable customer value. Win on Value. Maximise inventory velocity and return on capital. Move Fast. Create structural advantage. Run Lean. The Look For Less
Page 22
Product Design & Innovation The product strategy we set out at Investor Day continues to sharpen for FY27. • Creating Products That Drive Demand and Excitement. Value-driven categories, limited releases, and focused product storytelling. • Innovating At Scale Across Key Growth Areas. Men’s, Basics, Bridal, and Michael Hill Watches. • Expanding Personalisation , Custom, and Bespoke Experiences. Creating emotionally driven product journeys. • Innovating Through Intelligent Design. Elevating perceived quality through design, materials, and craftsmanship. • Capturing the Full Diamond Opportunity: o Premium Lab grown diamonds capture growth. o Natural Diamonds reinforce our premium positioning. • Driving Inventory Productivity and Agility. • Product Design Engineered for Value. “The Look for Less ”, compelling quality, protecting margin. • Commercial Agility and Efficiency. Opportunistic buys, disciplined retail fundamentals. 22
Page 23
Strategic Growth Engines for FY27 Building on FY26, our priorities remain sharp for the year ahead. Growth Engines Initiatives Canada Growth • Increased investment in marketing to build awareness and inventory to capitalise on productivity gains. • Refitting five of our top six stores, while actively exploring at least two new sites. Australia & NZ Productivity • Refreshing stores with lower -cost fitouts, incl. new Auckland Flagship & new NZ store opening in H1 FY27. • Resetting marketing and go -to-market, with increased investment in productive inventory. Digital Acceleration • Continued investment in online channel and experience, including expanded Buy Online Pickup In -Store. • Enhanced clienteling to equip frontline teams for consistent, integrated retail. Product Innovation • Capturing the full diamond opportunity: lab diamonds driving growth, natural diamonds reinforcing premium. • Strengthening design leadership, with clearer creative direction, strong launches and focused storytelling. • Introducing newness and improved availability, with a focus on value -driven categories and limited releases. Services-led Differentiation • Expanding personalisation, custom, and bespoke experiences across the network. • Improving high -engagement services, including aftercare experiences and product care plans. Bevilles Reset • Continued focus under new leadership, with an updated go -to-market approach for the value segment. Becoming an AI-Powered Retailer • A people-first approach: mindset first, skillset second, toolset third, using AI as a force multiplier for our teams. • Deploying AI -powered planning and merchandising tools to support inventory productivity and agility.
Page 24
Current Trading Update Sales improvement for the first eight weeks of FY27 24 • We are seeing a year-on-year sales improvement through the first eight weeks of FY27, despite an uncertain macroeconomic environment, with gross margins also strengthening over the prior year. • Group same store sales up 4.4% on a constant currency basis, flat in AUD. In local currency: • Canadian segment same store sales grew 9.8% • Australian segment same store sales grew 1.7% • New Zealand segment same store sales grew 3.3% • Management expects continued profitable growth through the year.
Page 25
Q&A You are able to listen to Q&A via this platform. If you would like to ask a question, please click on ‘Request to Speak’ button at the bottom of the broadcast window. If you are in full screen broadcast mode, you will need to minimise to see this button. Click ‘Join Queue’. If prompted, allow access to your microphone. Follow the audio prompts to test your microphone. 25
Page 26
Thank You INVESTOR RELATIONS Anthea Noble General Manager, Investor Relations & Treasury investor@michaelhill.com.au 26
Page 27
Appendix A: Bridge from Comparable EBIT to Reported EBIT 27 (AUD million) FY26 FY25 Comparable EBIT 24.0 15.3 Impact of AASB16 Leases 12.0 11.4 Impact of IFRIC SaaS -related guidance 2.5 (0.9) Litigation judgement 0.3 3.0 Strategic review & simplification (6.1) - Bevilles Brand Impairment - (7.4) Bevilles integration costs - (1.0) Transition costs (1.0) (0.4) Employee restructure costs (0.6) (1.2) Reported EBIT 31.1 18.9 Calculated as follows:
Page 28
Appendix B: AASB16 Leases & SaaS Impact 28 (AUD million) FY26 Stat Impact of AASB16 & SaaS FY26 pre-adjustments FY25 pre-adjustments Change pre-adjustments Revenue 655.7 - 655.7 643.7 1.9% Cost of sales (259.4) - (259.4) (254.2) 2.0% Gross profit 396.3 - 396.3 389.5 1.8% Employee benefits expense (183.2) 3.8 (179.4) (175.3) 2.3% Occupancy costs (16.1) (55.8) (71.9) (72.4) (0.7%) Marketing expenses (36.0) - (36.0) (37.5) (3.9%) Selling expenses (25.3) - (25.3) (24.8) 2.2% Other income/(expenses) (41.6) 0.7 (40.9) (44.0) (7.2%) EBITDA 94.1 (51.3) 42.8 35.4 20.8% Depreciation and amortisation expenses (63.0) 36.8 (26.2) (27.0) (3.2%) EBIT 31.1 (14.5) 16.6 8.4 98.3% Finance expenses (13.4) 9.7 (3.7) (5.5) (33.0%) Profit before tax 17.7 (4.8) 12.9 2.9 350.7%
Page 29
29