25 Aug 2021

UNI FY21 Presentation

UNIVERSAL STORE HOLDINGS LIMITED ACN 169 039 721 AUGUST 2021 FY21 RESULTS PRESENTATION AGENDA FY21 FULL YEAR RESULTS PRESENTATION 1. FY21 Highlights 2. Financial Results 3. FY22 Priorities 4. FY22 Outlook 5. Appendices Renee Jones CFO ? Commenced at Universal Store in 2019 ? 20+ years’ experience across retail and service industries Alice Barbery CEO ? 12 years at Universal Store ? 30+ years’ industry experience PRESENTERS CONTENTS 2 FY21 HIGHLIGHTS FY21 FULL YEAR RESULTS PRESENTATION 1 3 $210.8M Sales +36% YoY FY21 HIGHLIGHTS FY21 FULL YEAR RESULTS PRESENTATION Final Dividend 10.5 cents per share +28.5% LFL Sales $18.6M Net Cash +90% YoY Online sales to $25.8M Underlying $44.0M EBIT +86% YoY DESPITE COVID - 19 DISRUPTIONS AND MULTIPLE LOCKDOWNS UNIVERSAL STORE CONTINUED TO DELIVER IMPRESSIVE SALES AND PROFIT GROWTH 1. Underlying EBIT excludes the impact of ( i ) accounting for leases under AASB16; (ii) one - off IPO transactions and MEP expenses (for FY21 only). Includes standalone public company cost incl. $0.1m of interest income. 2. Underlying Net Cash $18.6m vs ($4.1m) proforma net debt at 30 June 2020 3. Based on underlying NPAT and total shares on issue at year end FY21 (73.2m) 2 1 4 28.5% LFL Sales Underlying EPS 41.5 cents $24.4M NPAT +90% YoY 3 UNIVERSAL STORE DELIVERS RECORD RESULTS AGAIN Exceptional results achieved despite the ongoing COVID - 19 challenges including rolling lockdowns, restrictions and limited opportunities for our customers to dress up Total sales $210.8m with Group LFL +28.5%. Online sales of $25.8m (12.2% of total sales). 2 new stores opened with store roll out impacted by COVID - 19. Underlying EBIT of $44.0m up +$20.4m on FY20. 31 35 45 52 60 65 67 Jun15 Jun16 Jun17 Jun18 Jun19 Jun20 Jun21 Physical Stores (#) 13 17 10 14 16 11 28.5 FY15 FY16 FY17 FY18 FY19 FY20 FY21 LFL Sales Growth (%) 2 50.9 69.3 87.7 112.3 146.5 154.9 210.8 FY15 FY16 FY17 FY18 FY19 FY20 FY21 Revenue (A$ million) 14 21 24 44 FY18 FY19 FY20 FY21 Underlying EBIT (Pre - AASB 16) (A$ million) 1 1. Underlying EBIT excludes the impact of ( i ) accounting for leases under AASB16; (ii) one - off IPO transactions and MEP expenses (for FY21 only). Includes standalone public company cost incl. $0.1m of interest income. 2. LFL sales excludes closed stores from date of closure and new stores which have traded less than 55 weeks. Stores that were c los ed during COVID are excluded from LFL sales growth calculation for the weeks that they were closed. LFL are calculated on 4/4/5 financial week. FY21 FULL YEAR RESULTS PRESENTATION 5 A CUSTOMER VIEW FY21 FULL YEAR RESULTS PRESENTATION 6 Traditional occasions for shopping were cancelled or changed. Significant personal milestones (e.g. 21 st birthday events) often missed, down scaled and localised Holidays cancelled, and lives adjusted to a smaller footprint. School, university, and work shifted to the home environment Females spending was initially more resilient, quicker to adapt to new occasions, and sought more ’day wear’ and other casual apparel options Work from home (‘WFH’) has accelerated the trend of workplace attire ‘casualisation’ The shift from going to clubs and other ‘dressy’ occasions and associated venues to gatherings at homes or the beach/park have increased demand for more casual apparel Job Keeper and other government payments have supported the incomes of many customers, and personal spending priorities have been re - allocated (e.g. no travel, concerts) Pivoting shopping behaviours to online and back to stores on an iterative basis Our ‘close to market’, and ‘micro allocation’ processes, together with supplier relationships and hustle enabled our product team to respond by re - phasing and recalibrating product mix Our store teams have responded swiftly to support our customer with ship from store, operating in dark stores and offering Click and Collect EVENTS THAT DRIVE LIFESTYLE CHANGE ARE COMMONLY TRIGGERS FOR FASHION PURCHASES COVID19 DEMONSTRATED THIS AGAIN FINANCIAL RESULTS FY21 FULL YEAR RESULTS PRESENTATION 2 7 PROFIT & LOSS STRONG SALES PERFORMANCE • Sales $210.8m, up +$55.9m or 36.1% on FY20 • Overall Group LFL +28.5% • Stores sales up +30.9%, with LFL +21.8% • Online sales $25.8m, representing 12.2% of total • Online channel up +90.3% MATERIAL GROSS MARGIN PROFIT IMPROVEMENT • Significant step change in GM, up 210bps • Customer led continued mix shift towards private brand • Expansion in men’s private brand offer • Direct sourcing of women's categories progressed CODB • 35 . 7 % an improvement of 320 bps on FY 20 • $1.4m rent concession received • No net benefit from Job Keeper subsidies in FY21 EXCEPTIONAL EARNINGS GROWTH • Underling EBIT $44.0m up $20.4m on prior year • Underlying EBIT margin of 20.9% • Underlying EPS of 41.5 cents compared to 22.1 cents FY20 FY21 FULL YEAR RESULTS PRESENTATION 1. Underlying EBIT/EBITDA excludes the impact of ( i ) accounting for leases under AASB16; (ii) one - off IPO transactions and MEP expenses (for FY21 only). Includes standalone public company cost incl. $0.1m of interest income. 2. LFL sales excludes closed stores from date of closure and stores which have traded less than 55 weeks. Stores that were temporarily closed are excluded from LFL sales growth calculation for the weeks that they were closed and and the pcp.. LFL are calculated on 4/4/5 financial week basis. 3. Underlying interest based on post IPO balance sheet. 4. Based on underlying NPAT and total shares on issue at year end FY21 (73.2m). Underlying Results FY21 FY20 % Change Sales 210.8 154.9 36.1% Gross Profit 123.9 87.6 41.4% % Sales 58.7% 56.6% 2.1ppt CODB (75.2) (60.3) 24.7% % Sales (35.7%) (38.9%) 3.2ppt Underlying EBITDA 48.7 27.3 78.4% Depreciation (4.7) (3.6) 30.5% Underlying EBIT 44.0 23.7 85.7% % Sales 20.9% 15.3% 5.6ppt Interest (0.6) (0.6) 0.0% Tax (13.0) (6.9) 88.4% Underlying NPAT 30.4 16.2 87.7% % Sales 14.4% 10.5% 3.9ppt 8 1 1 3 4 2 SALES PERFORMANCE FY21 FULL YEAR RESULTS PRESENTATION Total Sales growth of 36.1%, strong online and store performance despite impacts of COVID - 19 pandemic Group LFL sales growth of 28.5%, with first half growth of 26.5% and second half growth of 31.7% Stores sales growth of 30.9% . Which also included 13 week lockdown in 13 Victorian stores H1 FY21 Online growth of 90.3% Growth driven by ongoing investment in online channel including the launch of ship from store, along with click & collect and ongoing website optimisations initiatives 107.2 137.9 141.3 185.0 5.1 8.5 13.6 25.8 112.3 146.5 154.9 210.8 60.0 70.0 80.0 90.0 100.0 110.0 120.0 130.0 140.0 150.0 160.0 170.0 180.0 190.0 200.0 210.0 220.0 FY18 FY19 FY20 FY21 FY18 – FY21 SALES B&M Online Total CAGR (FY18 - FY21) 72% 20% 23% 9 UNLOCKING OUR ONLINE POTENTIAL KEY INVESTMENT NOW IN PLACE TO ACCELERATE GROWTH FY21 FULL YEAR RESULTS PRESENTATION 10 Unlocking omni - channel potential Universal Store’s online channel had a transformative year. It continues to enjoy attractive contribution margins and unit order economics, which have strengthened further since the launch of ship from store which commenced rollout in May 2020. Website Re - platforming (Completed ) Single Customer View (Continuous improvement) Ship from Store (Completed) Store to Door (In plan) +87% Growth in Online Transactions vs FY20 +29% Growth in conversion from 1.3% FY20 to 1.7% FY21 % of total 12.2% 8.8% 5.8% 4.5% 4.3% Personalisation (Continuous Improvement) 3.5% Click and Collect (Completed) $107 average basket size of online store FY21 (Compared to $90 ATV in store) ONLINE SALES (A$ MILLION) 2.4 3.8 5.1 8.5 13.6 25.8 0.0 5.0 10.0 15.0 20.0 25.0 30.0 FY16 FY17 FY18 FY19 FY20 FY21 18% 82% FY20 37% 63% FY21 55.8 56.8 56.6 58.7 53.0 54.0 55.0 56.0 57.0 58.0 59.0 60.0 0 20 40 60 80 100 120 140 FY18 FY19 FY20 FY21 GROSS MARGIN Strong private brand demand resulted in contribution growing 30.3% to 40.2% of total in FY21. Customer demand and speed to market supported growth in both women and men sales. Women’s growth was strongest with “Perfect Stranger” outperforming all other brands. Direct sourcing of private brand product shifted from 18% in FY20 to 37% in FY21. The shift from “indirect” to “direct” sourcing typically adds approximately 5 - 7% to gross margin on relevant items. The shift in sourcing is driven by womenswear, while menswear maintained its predominantly direct sourcing mix . Improvement largely driven by customer - led mix shift towards expansion of our private brand in under - penetrated categories, and accelerating direct sourcing in women’s private brand range. SIGNIFICANT STEP CHANGE IN GROSS MARGIN UP 210 BPS GP $ & % TREND PRIVATE BRAND % OF TOTAL SALES DIRECT SOURCING (% OF PB SALES) FY21 FULL YEAR RESULTS PRESENTATION % $m 24.6% 29.0% 30.3% 40.2% FY18 FY19 FY20 FY21 11 COSTS OF DOING BUSINESS FY21 FULL YEAR RESULTS PRESENTATION Total CODB % was 35.6% , a 270 BPS improvement on prior year Team costs increased to 18.7% driven by investment into key support office roles to allow us to scale and support future growth initiatives FY20 included $3.2m Job Keeper benefits supporting earnings due to 6 week national lockdown in Q4 Occupancy costs at 13.0% includes rent concessions $1.4m in FY21, 2 new stores and 2 relocations Other support costs increased on prior year driven by a higher marketing spend and governance costs post listings 1. Underlying EBIT excludes the impact of ( i ) accounting for leases under AASB16; (ii) one - off IPO transactions and MEP expenses for FY21. 2. FY18 - FY20 financials includes the Underlying costs associated with public listing UNDERLYING CODB$ INCREASED TO SUPPORT SALES GROWTH AND INCLUDES PARTIAL NORMALISATION OF FY20 LEVELS WHICH WERE SUPPRESSED AS A RESULT OF COVID - 19 FY18 FY19 FY20 FY21 Occupancy Team Other 18.7% 18.4% 21.0% 17.1% 3.7% $47.0m 41.8% sales 40.2% sales 38.9% sales 35.7% sales $75.2m $60.3m $59.0m 4.0% 13.0% 4.5% 16.0% 3.8% 20.8% 15.6% 12 BALANCE SHEET FY21 FULL YEAR RESULTS PRESENTATION STATUTORY BALANCE SHEET FY21 Underlying FY20 FY20 Total Current assets 53.5 27.6 58.6 Cash 33.4 10.8 41.8 Trade Receivables 2.4 3.0 3.0 Inventories 17.7 13.7 13.7 Total Non current assets 150.7 164.1 164.0 Property, plant and equipment 9.2 11.2 11.0 Right of use assets 48.8 60.3 60.3 Intangible assets 92.7 92.6 92.7 Total Assets 204.2 191.7 222.6 Total Current liabilities 44.1 38.8 40.3 Trade and other payables 17.0 15.5 15.8 Borrowings 0 0 1.0 Lease liabilities 19.2 18.3 18.3 Other current liabilities 8.0 5.0 5.2 Total non - current liabilities 57.2 67.5 105.8 Borrowings 14.8 14.9 50.6 Lease liabilities 35.8 46.4 46.4 Other non current liabilities 6.2 6.2 8.9 Total Liabilities 101.2 106.3 146.1 Net assets 103.0 85.4 76.5 Net Cash/ (Net Debt) 18.6 (12.2) NA Net Cash $18.6m an improvement of $22.7m on underlying FY20 due to strong cash generation Inventory at $17.7m has normalised vs prior year which was abnormally low due to COVID - 19 and associated disruptions Underlying cash flow of $32.5m generated Capex of $2.9m driven primarily by investments into online and new stores/relocations. 10.5 cents fully franked final dividend to be paid 29 th Sept 2021 1 1. Underlying Balance Sheet from Prospectus 2. Represent Underlying net debt (pre AASB 16) at 30 June 2020 (gross of capitalized borrowing costs) adjusted by $8million (mid - point $7 - 9million) which the Directors believe represents the level of under investment in net working capital at 30 June 2020 relative to typical levels at the balance sheet date. . (A$ million) 2 13 UNDERLYING CASHFLOW FY21 FULL YEAR RESULTS PRESENTATION FY21 FY20 Change Underlying EBITDA 48.7 27.3 20.5 Change in inventories (4.0) 5.7 (9.7) Change in trade payables 1.2 7.1 (4.3) Change in other working capital items 2.9 0 1.1 Cashflow from operations (before int, tax, capex) 48.8 40.1 7.5 Net Capex (2.9) (4.2) 1.3 Underlying interest (post IPO drawn debt) (0.6) (0.6) Underlying tax cash paid (12.8) (5.7) (5.9) Underlying operating cashflow, after capex 32.5 29.6 3.0 Dividends paid post IPO (3.7) NA Other cash flows and proforma adjustments related to tax payments, interest, the IPO, capital re - org, & MEP (6.2) NA Underlying net cash generated 22.7 29.6 Net cash/(net debt) 18.6 (4.1) 22.7 Cashflow Ratios Cashflow from Ops : EBITDA conversions % 100% 147% Capex : Depreciation % 62% 117% Strong cashflow delivered again in FY21 with high levels of EBITDA cash conversion Increase in inventory levels driven partly by normalization from abnormally low stock levels at the end of FY20 arising from cash preservation actions Trade payables reflect the net impact of normalization post FY20 (per inventory drivers), and the benefit of attractive trading terms as we have increased purchases to accommodate our growth Capex is lower than FY20 and our current depreciation expense due to slower rate of store roll out Net cash at end of FY21 of $18.6m puts us in a strong position to manage trading disruptions and support growth strategy Notes 1. Underlying interest assumes $14.8m of drawn debt at ~4% p.a interest rate 2. Tax paid in year adjusted for 30% tax paid on underlying adjustment 3. Underlying net debt at FY20 as per Prospectus Underlying Net Debt (refer page 92 Prospectus) (A$ million) 14 The normalized cashflow presented removes the ‘noise’ arising from the IPO and pre - IPO capital structure 1 2 3 FY22 GROUP PRIORITIES FY21 FULL YEAR RESULTS PRESENTATION 3 15 FY22 GROUP PRIORITIES FY21 FULL YEAR RESULTS PRESENTATION NEW STORE ROLLOUT • 7 – 10 stores planned for FY22 • “Full Potential” target is 100+ stores across Australia/ New Zealand • Standalone Perfect Stranger concept progressing to next phase of trial stage 1 WE WILL CONTINUE TO EXECUTE ON OUR STRATEGIC PRIORITIES AND MANAGE FOR THE UNIQUE AND VOLATILE TRADING ENVIRONMENT STORE MATURATION • Continue to grow market share through superior customer service, inspirational stores and strongly curated product brands. • Continue to build brand awareness in underpenetrated markets 2 ONLINE GROWTH • Continue to scale up our digital and eCom capacity and services • Improve speed and delivery options • Launch Standalone Perfect Stranger website 3 OPTIMISE PRODUCT MIX • Continue brand and range curation, injecting fresh new product and brands into our offer • Maintain our customer led and complimentary private brand strategy • Progress direct sourcing shift to further improve margins 4 SUSTAINABILITY • Increase our investment in expertise and resources • Making conscious fibre choices • Seek opportunities to improve working conditions for workers in the supply chain and ensuring ethical practices are the norm, not the exception. • Model better practices to create the change we want to see 5 PRODUCTIVITY • Continue caring for our team & ensure Covid - safe workplaces • Implement WMS into our Distribution Centre • Relocate our DC and Office Q1 FY23 • Execute on our IT roadmap 6 16 UNIVERSAL STORE’S OMNI - CHANNEL MODEL FY21 FULL YEAR RESULTS PRESENTATION Universal Stores’ growth is powered by a channel agnostic business model leveraging a single retail brand, infrastructure, and team to support its online and store channels. This model drives cost effective customer acquisition and retention, efficient and scalable operations, attractive EBIT margins AND a preferred customer experience. Online Channel Sales ($m) Physical Store Channel Sales ($m) Universal Store’s customers browse and transact across our channels on a fluid basis. We support our channels with one brand and common infrastructure, marketing and group capabilities, giving us cost efficiencies and economies of scale ? Brand & marketing ? Distribution facilities ? Product & design team ? Customer database 50 100 150 200 2018 2019 2020 2021 0 5 10 15 20 25 30 2018 2019 2020 2021 17 Brand Distribution Product & design Team ? Inventory ? Social media ? Management, finance, governance ? Website ? Store network and team Our ‘cross channel’ assets, functions and capabilities include: FY22 OUTLOOK FY21 FULL YEAR RESULTS PRESENTATION 4 18 FY22 OUTLOOK I n the first 8 weeks of FY22 (‘YTD FY22’) total sales were down 20.7% versus YTD FY21, a shortfall of $6.0m in dollar terms. Across this period; • Approximately 36% of potential ‘store trading days’ have been lost due to store closures • Group LFL sales (incl online) 1 are down 0.4%. We are cycling YTD FY21 LFL of +24.5% • Online sales are up +42.5% versus YTD FY21, and up +184% versus YTD FY20 We are managing our costs carefully in markets where stores are closed. Our inventory is well balanced and we are ready to trade all stores when possible. Historically, sales have bounced back strongly post a lockdown as evidenced by our sales growth in FY21 of +36%, notwithstanding 19 lockdowns since March 2020. 7 new stores are expected to open prior to Christmas FY22, and ~10 across FY22. Given the uncertainty regarding trade restrictions and potential for ongoing lockdowns, we do not consider it appropriate to provide FY22 guidance at this time. FY21 FULL YEAR RESULTS PRESENTATION 19 OUR SALES RESULTS ONLINE AND IN “OPEN MARKETS” GIVE US CONFIDENC E THAT OUR CUSTOMERS HAS BOTH THE CAPACITY AND APPETITE TO SHOP WHEN CIRCUM STANCES PERMIT 1. LFL sales excludes closed stores from date of closure and new stores which have traded less than 55 weeks. Stores that were c los ed during COVID are excluded from LFL sales growth calculation for the weeks that they were closed. LFL are calculated on 4/4/5 financial week. APPENDIX FY21 FULL YEAR RESULTS PRESENTATION 5 20 1. Based on FY21 revenue only, excluding ticket sales and other adjustments. Who is our quintessential customer? Who is Universal Store? Omni - channel retailer Casual youth fashion apparel 68 stores around Australia (including online) Curated domestic, international and private brand collections High service, friendly experience Millennials and Gen Z ( 16 - 35 year old) Fashion focused (and buy now preference) ~57% women, ~36% men, ~7% unisex 1 Late e ducation or early adult phase of life Digital natives Socially active Sub - culture ‘fluid’ Occasion and event driven A leading Australian youth - focused apparel retailer with customer service at its core Some implications about our customers…. Buy now pay later products and parents support spending capacity Relatively few financial commitments or long term savings goals Shop across multiple brands seeking what’s new High proportion of income is "disposable" Most active customers seek outfits to fit in or stand out 21 APPENDIX 1: UNIVERSAL STORE - OVERVIEW FY21 full year results presentation UNIVERSAL STORE DELIVERED STRONG GROWTH IN A CHALLENGING OPERATING ENVIRONMENT. • 19 lockdowns across all states resulting in store closures from 2 days to 84 days in duration since March 2020 to date. • The 84 day lockdown in Victoria (5 th August to 27 th October) resulted in a $6.2m revenue impact (compared to FY20 physical store sales), partially offset with increases in our online channel. Other lockdowns from affected stores had less severe implications and most stores rebounded once doors reopened. • State by state impacts are different and volatile. • Due to lockdowns and restricted trade we reduced our CODB in areas including store wages, travel, marketing and negotiated $ 1 . 4 m rent concessions recognized in FY 21 . • We have not retained any net benefit from Job Keeper subsidies in FY 21 . This amount was repaid to the ATO . • COVID - safe ways of working is the “new normal” and supporting our team members through lockdown periods remains priority . • Our store roll out was temporarily slowed due to the pandemic . 2 new stores opened and 2 stores were relocated to larger footprints . • Customers changed spending patterns and sought apparel appropriate for changed lifestyles. Personal budgets re - allocated away from travel, experiences and out of home entertainment. FY21 FULL YEAR RESULTS PRESENTATION 22 APPENDIX 2: FY21 COVID - 19 IMPACTS RECAP APPENDIX 3: UNDERLYING PROFIT & LOSS STATEMENT FY21 full year results presentation $m Notes FY18 FY19 FY20 FY21 Physical store r evenue 107.2 137.9 141.3 185.0 % growth 28.7% 2.5% 30.9% Online revenue 5.1 8.5 13.6 25.8 % growth 66.7% 60.0% 90.3% Revenue 112.3 146.5 154.9 210.8 % growth 28.1% 30.5% 5.7% 36.1% Cost of sales (49.6) (63.3) (67.3) (87.0) Gross profit 62.7 83.2 87.6 123.9 % margin 55.8% 56.8% 56.6% 58.7% Employee costs (23.6) (30.5) (28.5) (39.5) Occupancy costs (19.2) (22.9) (24.9) (27.3) General and admin costs 2 (4.2) (5.6) (6.9) (8.4) Underlying EBITDA 1 15.7 24.2 27.3 48.7 % growth 51.5% 11.9% 78.4% % margin 14.0% 16.5% 17.6% 23.1% Depreciation (2.2) (3.0) (3.7) (4.7) Underlying EBIT 1 13.5 21.2 23.7 44.0 % growth 54.9% 10.3% 85.7% % margin 12.0% 14.5% 15.3% 20.9% 1. Underlying EBIT excludes the impact of ( i ) accounting for leases under AASB16; (ii) one - off IPO transactions and MEP expenses and VLN repayment discount. 2. FY18 - FY20 financials includes the pro - forma costs associated with publicly listing in G&A 23 APPENDIX 4: P&L UNDERLYING TO STATUTORY RECONCILIATION 1. Transaction costs relate to legal, advisors and accounting costs incurred with respect to the preparation of the IPO. 2. Incremental public company cost primarily relate to additional Directors’ fee, Directors’ and officers’ insurance costs and compliance costs which Universal Store expects to incur as a listed com pany . 3. MEP expense relates to employee share based expenses, which were not material in FY20 Underlying. 4. Minor mapping adjustments to align to prospectus. 5. AASB 16 adjustments relate to the restatement of statutory results onto the previous lease accounting standard. This removes deprec iation of lease assets and interest on lease liabilities and replaces them with occupancy costs. 6. VLN discount refers to the discount received for the early repayment of a Vendor Loan Note prior to the IPO. FY21 FULL YEAR RESULTS PRESENTATION 24 $m Note FY21 FY20 Statutory EBITDA 61.9 46.6 Transaction costs 1 6.7 0.7 Incremental public company costs 2 (0.1) (0.8) MEP Expense 3 0.6 0.0 Interest income 4 0.1 0.0 Make good expense 4 (0.1) (0.1) AASB 16 adjustments 5 (20.4) (19.1) Underlying EBITDA 48.7 27.3 Statutory EBIT 38.0 24.5 Transaction costs 1 6.7 0.7 Incremental public company costs 2 (0.1) (0.8) MEP Expense 3 0.6 0.0 Interest income 4 0.1 0.0 AASB 16 adjustments 5 (1.3) (0.8) Underlying EBIT 44.0 23.7 Statutory NPAT 24.4 12.8 Transaction costs 1 4.7 0.5 Incremental public company costs 2 (0.1) (0.5) MEP Expense 3 0.6 0.0 AASB 16 adjustments 5 0.7 1.3 VLN Discount 6 (0.5) 0.0 Net finance cost 0.6 2.1 Underlying NPAT 30.4 16.2 APPENDIX 5: CASH FLOW UNDERLYING TO STATUTORY RECONCILIATION FY21 FULL YEAR RESULTS PRESENTATION 25 $m Note FY21 FY20 EBITDA 61.9 46.6 Non - cash items in EBITDA: MEP Expense 3 0.6 0.2 Loss on disposal of assets 0.1 0.0 Change in net working capital (0.9) 11.2 Operating Cash flow before interest and income tax 61.7 58.0 Net Capital Expenditure (2.9) (4.2) Free cash flow before financing, tax and dividends 58.7 53.8 Underlying adjustments Incremental public company costs 1 (0.1) (0.8) Interest income 4 0.1 0.0 Transaction costs 2 6.7 0.7 AASB16 adjustments 5 (19.6) (17.7) Underlying free cashflow before financing, tax and dividends 45.9 36.0 Statutory net cashflow (8.4) 31.0 Incremental public company costs (0.1) (0.8) Transaction costs 2 6.7 0.7 Change in interest and tax (1.4) 1.7 Net cashflows used in financing activities (excl.AASB16) 35.7 (3.1) Underlying net cashflow before dividend 32.5 29.5 1. Incremental public company cost primarily relate to additional Directors’ fee, Directors’ and officers’ insurance costs and compliance costs which Universal Store expects to incur as a listed com pany . 2. Transaction costs relate to legal, advisors and accounting costs incurred with respect to the preparation of the IPO. 3. MEP expense relates to employee share based expenses, which were not material in FY20 Underlying. 4. Minor mapping adjustments to align to prospectus. 5. AASB 16 adjustments relate to the restatement of statutory results onto the previous lease accounting standard. This removes deprec iation of lease assets and interest on lease liabilities and replaces them with occupancy costs. QLD NT NSW ACT SA WA APPENDIX 6: STORE FOOTPRINT VIC 11 2 20 1 18 13 2 TOTAL STORE 67 FY21 FULL YEAR RESULTS PRESENTATION 26 DISCLAIMER The material contained in this presentation has been prepared by Universal Store Holdings Limited ABN 94 628 836 484 (Universal Store) and is general background information about the businesses, operations and activities of Universal Store and its subsidiaries, current as at the date of this presentation. The information is provided in summary form only and does not purport to be complete or comprehensive. The information in this presentation should not be considered as advice or a recommendation for investment purposes, as it does not take into account your particular investment objectives, financial position or needs. These factors should be considered, with or without independent professional advice, when deciding if an investment is appropriate. This presentation may contain forward - looking statements with respect to the operations and businesses of the Universal Store. The assumptions underlying these forward - looking statements involve circumstances and events that have not yet taken place and which are subject to uncertainty and contingencies outside Universal Store’s control. Readers are cautioned not to place undue reliance on any forward - looking statements. Universal Store does not undertake any obligation to publicly release the result of any revisions to forward - looking statements in this presentation or to otherwise update forward - looking statements, whether as a result of new information, future events, or otherwise, after the date of this presentation. Past performance is not a reliable indication of future performance. To the extent permitted by law, no responsibility for any loss arising in any way (including by way of negligence) from anyone acting or refraining from acting as a result of the material contained in this presentation is accepted by Universal Store. FY21 FULL YEAR RESULTS PRESENTATION 27 UNIVERSAL SPIRIT FY21 FULL YEAR RESULTS PRESENTATION The unique ability to create memorable and positive experiences for all. Creating an experience that is fun, open and based on kindness. The environment that enables a person to be their best. 28

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