REMUNERATION REPORT Continued 4. COMPANY PERFORMANCE AND REMUNERATION OUTCOMES FOR FY2018 4.1. COMPANY PERFORMANCEFY2018 The Company’s remuneration structure aligns executive remuneration with shareholder interests over the short and long term and provides an appropriate reward on delivering our strategy. Key aspects of the FY2018 performance include: • 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 $239.4 million (including $30.8 million in sales via instore 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%; • Cost of doing business (CODB) increased by 1.5% to $1,035.0 million, excluding Marcs and David Lawrence CODB declined by 1.1%; • 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 resultsfor the period ended 27 January 2018; • NPAT pre-implementation costs and individually significant items decreased by 52.2% to $32.5 million; • Statutory FY2018 NPAT was a loss of $486.0 million; • We launched the Myer Marketplace with a range of brands from diverse sellers with a focus on home; • We opened the redeveloped Myer Hobart store, which now occupies approximately 12,500 square metres of selling space; • Refurbishment works were completed at Eastland coinciding with the launch of the first dedicated children’s play centre, Monkey Mania, a market leader in children’s play centres; • Refurbishment works commenced at Blacktown and at Maroochydore in Queenslandwith ongoing works at Castle Hill in New South Wales. These works are scheduled to be completed prior to the commencement of the 2018 Christmas trading period; and • We closed the Colonnades store in South Australia. The table below presents the Company’s annual performance against key financial metrics since 2014. FY2014 FY2015 FY2016 (1) FY2017 FY2018 Basic EPS (cents) 16.8 5.1 7.7 1.5 (59.2) Basic EPS (cents)-adjusted 16.8 13.2(2) 8.8 (2) 8.3(2) 4.0(2) NPAT (pre implementation costs and 98.5 77.5 69.3 67.9 32.5 individually significant items)($m) NPAT (post implementation costs and 98.5 29.8 60.5 11.9 (486.0) individually significant items)($m) Dividends (cents per share) 14.5 7.0 5.0 5.0 - Share price at beginning of year ($) 2.66 2.24 1.18 (3) 1.34 0.77 Share price at end of year ($) 2.24 1.18 1.34 (4) 0.77 0.46 Market capitalisation ($m) 1,311.9 694.0 1,100.5 632.4 377.8 Average eligible KMP incentive awards STI payments (% of maximum) 0% 0% 39% 0% 0% LTIPvesting(5) 0% 0% 0% 12.5% 8.3% (Grant year) (FY11) (FY12) (FY13) (FY14) (FY15) (1) FY2016 results were impacted by the fully underwritten accelerated pro rata non-renounceable Entitlement Offer completed by the Company in September 2015. The Entitlement Offer resulted in the issue of 234,661,660 new shares at $0.94 per share. (2) FY2015, FY2016, FY2017and FY2018Basic EPSis adjusted toexcludeimplementation costs and individually significant items. Refer to section 7 of the Directors’ Report for further detail.The directors believe this metric is more relevant as it excludes individually significant items that may not recur and may not be predictive of future performance. (3) Share price before the Entitlement Offer completed in September 2015. (4) Share price after the Entitlement Offer completed in September 2015. (5) The percentage of LTIP vesting relates to the number of performance rights or options that vested that were linked to the achievement of performance hurdles. In FY2017 only one KMP had rights vest under the LTIP and in FY2018 only two KMP had rights vest under the LTIP. Myer Annual Report 2018 29