DIRECTORS’ REPORT Continued 7. OPERATING AND FINANCIAL REVIEW SUMMARY OF FINANCIAL RESULTS FOR 52 WEEKS ENDED 28 JULY 2018 • Total sales declined by 3.2% to $3,100.6 million, and were down 2.7% on a comparable stores basis • Total online sales were $239.4million(including $30.8 million in sales via in-store iPads, sass & bide and Marcs and David Lawrence (MDL) online sales, and Myer Market) • Operating gross profit (OGP) declined by 2.9% to $1,184.4 million, and OGP margin increased by 8 basis points to 38.2%. The increase in OGP margin representssourcing and markdown improvements and a full year of MDL, post-acquisition. This was partly offset by lower contributions from suppliers and higher costs of selling • During the second half, sales were down 2.6% to $1,380.9 million. Comparable store sales were down 2.4%. Operating gross profit was $539.0 million which represented an improvement on last year. Operating gross profit margin improved by 109 basis points to 39.0% in the second half compared to the previous corresponding period • Cost of doing business (CODB) increased by 1.5% to $1,035.0 million. Excluding MDL,CODB declined by 1.1%. This has been due to business efficiencies including procurement, space reduction and back efficiencies • Implementation costs and individually significant items totalled $541.2 million (pre-tax) of which $538.2 million (pre-tax) were recorded as part of the first half results for the period ended 27 January 2018. This included a non-cash impairment charge relating to the Myer goodwill and brand name of $515.3 million (pre-tax) and other associated asset impairments of $9.2 million (pre-tax) • NPAT pre-implementation costs and individually significant items decreased by 52.2% to $32.5 million • Statutory FY2018 NPAT was a loss of $486.0 million • Operating cash flow (before interest and tax) was $131 million with cash conversion of 97% • Inventory reduced by 1.5% to $366.8 million • Positive net cash flow of $6 million resulted in lower net debt at the end of the period of $107 million • No final dividend will be paid Myer Annual Report 2018 17