JB Hi-Fi Annual Report 2017: Financial Performance, Sales Growth, and Dividend Increase

ANNUAL REPORT
2017For personal use only

Financial Summary
JB Hi-Fi Limited ABN 80 093 220 136
Sales $5.63b
NPAT(ii)
$207.7m Stores
EBIT $306.3m
FINANCIAL PERFORMANCE
2013
Statutory
2014
Statutory
2015
Statutory
2016
Statutory
2017
Statutory
2017
Underlying(i)
Growth
Underlying(i)
Sales $3.31b $3.48b $3.65b $3.95b $5.63b $5.63b 42.3%
EBIT $177.8m $191.1m $200.9m $221.2m $268.2m $306.3m 38.5%
NPAT(ii) $116.4m $128.4m $136.5m $152.2m $172.4m $207.7m 36.5%
Earnings per share 117.7cps 128.4cps 137.9cps 153.8cps 154.3cps 186.0cps 22.4%
Total dividend - fully franked 72.0cps 84.0cps 90.0cps 100.0cps 118cps 118cps 18.0%
(i) Underlying results exclude transaction fees and implementation costs totalling $22.4m associated with the acquisition of The Good Guys in
November 2016 and $15.8m of fixed asset and goodwill impairments in New Zealand.
(ii) Profit attributable to the owners of JB Hi-Fi Limited, excludes non-controlling interests.
2013 2014 2015 2016 2017 2013 2014 2015 2016 2017
$3.31b
$177.8m
$3.48b
$191.1m
$200.9m
$5.63b
2013 2014 2015 2016 2017 2013 2014 2015 2016 2017
177 182 187
303
$116.4m
$128.4m
$136.5m
$3.65b
$3.95b
$152.2m
194
$221.2m
$306.3m(i)
$207.7m(i)
JB Hi-Fi acquired The Good Guys on 28 November 2016, all amounts disclosed for the 2017 financial year include The Good Guys
for the period under JB Hi-Fi ownership.For personal use only

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Dear fellow shareholder,
2017 has been a great year for JB Hi-Fi Limited. It is very
pleasing to report that the year ended 30 June 2017 was
another record year with sales, profits and dividends all up
on the prior year and in November 2016 we successfully
completed the purchase of The Good Guys. The 2017 result
was driven by a combination of sales growth, a continued
focus on growth in gross profit dollars and our low cost of
doing business, underpinned by our ongoing emphasis on
customer service.
Overview
JB Hi-Fi Limited and its subsidiaries (the “Group”) achieved sales
of $5.6 billion, up 42.3% on the prior year. Group underlying
EBIT was up 38.5% on the prior year to $306.3 million.
Group underlying NPAT was up 36.5% to $207.7 million and
Statutory NPAT was up 13.3% to $172.4 million. Earnings per
share was up 22.4% to 186.0 cents per share and the total
dividend for FY17 was up 18 cents per share on the prior year
to 118 cents per share.
JB Hi-Fi Australia
JB Hi-Fi Australia total sales grew 10.9% to $4.15 billion,
with comparable sales up 8.6%. Online sales grew 38.4% to
$158.9 million or 3.8% of total sales, reflecting continuous
improvement across many aspects of the business’s digital
assets. JB Hi-Fi Solutions continued to grow and remains on
track to deliver on its longer term aspirational sales target of
approximately $500 million per annum.
Gross profit increased by 11.7% to $922.8 million resulting in
a gross margin of 22.2%. CODB was 15.0%, down 21 bps
on the prior year. Total operating costs were in line with our
expectations and remained well controlled as the business
continued to deliver the high standard of customer service that
JB Hi-Fi is known for. The business’s low CODB remains a
competitive advantage and is maintained through continued
focus on productivity and minimising unnecessary expenditure.
Strong sales growth, combined with operating cost leverage,
drove strong earnings growth. EBIT was up 19.1% on the prior
year to $262.4 million while EBIT margin was up 43 bps at 6.3%.
JB Hi-Fi New Zealand
Total sales were down 0.3% to NZD234.0 million, with
comparable sales down 8.8%. Sales in the prior year were aided
by market wide demand for third party content cards. Excluding
the impact of these cards (NZD8.4m), total sales in New Zealand
were up 3.4%, with comparable sales down 5.3%.
Online sales in New Zealand for FY17 grew 5.3% to
NZD4.9 million or 2.1% of total sales. We have recently
launched a new website and are pleased with its performance
to date.
In light of the challenging recent financial performance in
New Zealand, fixed asset and goodwill impairments totalling
AUD15.8 million were recorded in the statutory FY17 results.
This was a non-cash adjustment.
We have completed a review of the New Zealand business and
are finalising a two year strategy to improve performance.
The Good Guys
The Good Guys was acquired on 28 November 2016. For the
period under JB Hi-Fi ownership, total sales were up 0.2% to
$1.26 billion with comparable sales down 1.3%. Online sales
were $64.4 million or 5.1% of total sales. Total operating costs
were in line with expectations and store wages remained well
controlled. Similar to the JB Hi-Fi business, the low CODB
remains a competitive advantage and will continue to be a
focus moving forward. Earnings for the period under JB Hi-Fi
ownership of $46.4 million were pleasing and in line with the
prior year.
Terry Smart was appointed Managing Director of The Good
Guys in April 2017. Since Terry’s appointment we have made a
number of positive changes in both the stores and at support
office to position the business for future growth.
Stores
We had 303 stores in Australia and New Zealand at
30 June 2017. In Australia, six new JB Hi-Fi stores were
opened and in New Zealand one new JB Hi-Fi store was
opened. On acquisition of The Good Guys, we acquired 103
stores. Since acquisition, one new The Good Guys store has
been opened and two closed. There were 102 The Good Guys
stores open as at 30 June 2017.
We continue to both review our existing store portfolio and to
apply stringent store selection criteria to potential new sites to
ensure that they offer a high level of foot traffic and convenient
access for customers. This considered approach to our existing
and new store locations means stores should continue to
deliver comfortably in excess of their cost of capital.
Chairman’s and Chief Executive Offi cer’s Report1
1 Unless otherwise stated, all results disclosed in this report are underlying results which exclude transaction fees and implementation costs totalling
$22.4m associated with the acquisition of The Good Guys in November 2016 and $15.8m of fixed asset and goodwill impairments in New Zealand.For personal use only

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Total Stores: 303*
(JB Hi-Fi: 201, The Good Guys: 102)121421510213730562751131635
* As at 30 June 2017
Synergy Update
We are pleased to confirm that we expect to achieve the
upper end of our synergy target of $15 million - $20 million.
This target is now expected to be fully realised in FY19, one
year earlier than originally anticipated, with approximately
half of the benefit to be achieved in FY18. We expect the
remaining $2 million - $4 million of implementation costs to be
incurred in the first half of FY18. The synergies will be recorded
within earnings in each of the JB Hi-Fi and The Good Guys
businesses in FY18 and FY19 and are broadly split equally
between both businesses. We will continue to seek efficiencies
and drive further synergies. Any upside to our original target will
be reinvested in the businesses to strengthen their competitive
position and drive future growth.
We are very pleased with the opportunities that the combined
Group provides. Both JB Hi-Fi and The Good Guys have a
proud history of delivering great value every day to customers
and, as we realise value from the Group’s scale, we will
reinvest in both businesses to strengthen their competitive
position and drive future growth.
Group Balance Sheet, Capital Management and Dividends
The balance sheet continues to grow in strength with relatively
low financial and operating leverage, evidenced by our solid
fixed charges cover of 3.2 times, gearing of 1.6 and interest
cover of 28.8 times. All Group performance indicators are
influenced by the timing of The Good Guys acquisition, with
all ratios including earnings from The Good Guys from
28 November to 30 June 2017.
In November 2016, approximately $500m of term debt was
drawn to fund the acquisition of The Good Guys. As part
of the acquisition of The Good Guys, we completed a 1 for
6.60 fully underwritten, pro-rata, accelerated, renounceable
entitlement offer of approximately $394 million on
6 October 2016. 15.0 million new shares were issued as part
of the entitlement offer.
JB Hi-Fi Limited regularly reviews all aspects of its capital
structure with a focus on maximising returns to shareholders.
Continued solid earnings growth and prudent management of
our balance sheet, including relatively low gearing, enables us
to consider various capital management initiatives.
The Board has declared a final dividend of 46 cents per share
fully franked, bringing the total dividend for FY17 to 118 cents
per share, up 18 cents per share on the prior year. The Board
believes that our dividend payout ratio of 65% appropriately
balances the distribution of profit to shareholders and the
reinvestment of earnings for future growth.72 84 90 100118FY17 dividend up 18.0% to 118 cpsDividends (cps)FY13 FY14 FY15 FY16 FY17
Board Appointment
In February 2017, we announced the appointment of
Mark Powell as a non-executive director with effect from
13 March 2017. Mark has more than 30 years’ retail, wholesale
and logistics experience, having held senior positions with
many well-known retailers, including five years as Group CEO
of the Warehouse Group in New Zealand.
We are delighted to welcome Mark to the Board, he brings
great experience across a range of areas as well as an in-depth
knowledge of The Good Guys business, and we are very much
looking forward to working with him.
Board and Management Approach
The Board recognises the importance of governance,
environmental and social matters to our shareholders,
suppliers and customers and continually reviews and monitors
developments in corporate governance which are relevant
to the Group. The Board is committed to ensuring that the
Group’s business is conducted ethically and in accordance
with high standards of corporate governance.
CHAIRMAN’S AND CHIEF EXECUTIVE OFFICER’S REPORT1 (continued)
1 Unless otherwise stated, all results disclosed in this report are underlying results which exclude transaction fees and implementation costs totalling
$22.4m associated with the acquisition of The Good Guys in November 2016 and $15.8m of fixed asset and goodwill impairments in New Zealand.For personal use only

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The relationship between the Board and management is
strong and remains engaging and constructive. It continues
to be an integral part of the Board’s strategy to encourage
innovation and diversification with new products, technology,
merchandising formats, advertising and property locations in
a controlled and responsible manner. This approach provides
opportunities to increase revenue, margin and productivity.
The Board firmly believes that equity participation for
management through the Group employee option plan
maintains a strong alignment with shareholders and is a
critical tool in attracting new management, retaining existing
management and rewarding performance.
Helping Hands
The JB Hi-Fi business’ workplace giving program, established
in 2008 and known as Helping Hands, enables JB Hi-Fi
directors, executives and employees to donate to registered
charitable organisations. In November 2016, the Helping
Hands program was awarded Best Overall Program and Most
Innovative Charity/Employer Partnership at the Workplace
Giving Awards. JB Hi-Fi matches dollar for dollar regular
employee contributions through its payroll system, effectively
doubling the financial benefit to our community partners.
Workplace giving programs have proved to be a very effective
way for employers and employees to join together to support
the community.
Each week nearly 5,800 or 79% of the JB Hi-Fi business’
staff give to the program and, as recognised by the Australian
Charities Fund, make it one of the most successful workplace
giving programs in Australia and New Zealand. Through the
combined giving of JB Hi-Fi and its employees, we believe we
make a real difference to the charities in the program. In total,
including one-off campaigns since we launched Helping Hands,
we have raised $13.6 million for our charity partners across
Australia and New Zealand.
The Good Guys Workplace and Local Giving Program
The Good Guys business launched its own workplace giving
program in July 2017, under which it matches dollar for dollar
regular contributions which are made by team members,
effectively doubling the benefit to its national charity partners.
The Good Guys business also makes a donation for each
customer transaction to its national charity partners under its
Local Giving Program. Since the establishment of the Local
Giving Program in 2006, The Good Guys business has donated
more than $10 million to various charities under the program.
Outlook
We continue to invest in our store network, online offering and
Solutions business. These initiatives, coupled with a strong
promotional plan, will position us well for growth in FY18.
In FY18 we expect:
 to open five new JB Hi-Fi stores and continue to monitor
opportunities for new The Good Guys stores; and
 total Group sales to be circa $6.8 billion.
The key success drivers of the Group continue to be having
the biggest range and the lowest prices, supported by a
talented and enthusiastic team. Your Board and management
team remain committed to maintaining this.
We look forward to another exciting and successful year in FY18.
Greg Richards Richard Murray
Chairman Group Chief Executive Officer
Melbourne,
28 August 2017For personal use only

4 JB Hi-Fi Limited ABN 80 093 220 136
Page
Governance, environmental and social statements 5
Directors’ report 17
Operating and fi nancial review 22
Remuneration report 30
Auditor’s independence declaration 56
Independent auditor’s report 57
Directors’ declaration 61
Statement of profi t or loss 62
Statement of profi t or loss and other comprehensive income 63
Balance sheet 64
Statement of changes in equity 65
Statement of cash fl ows 66
Notes to the fi nancial statements 67
Additional securities exchange information 101
Annual Report
for the financial year ended 30 June 2017
4For personal use only

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JB Hi-Fi Limited (“the Company” or “JB Hi-Fi”) recognises the importance of Governance, Environmental and Social matters to our
shareholders, suppliers and customers. The Board continually reviews and monitors developments in corporate governance which
are relevant to the Group (being the consolidated entity consisting of the Company and the entities it controls).
CORPORATE GOVERNANCE STATEMENT
The directors and management of the Group are committed to ensuring that the Group’s business is conducted ethically and in
accordance with high standards of corporate governance.
The Board believes that, except as otherwise disclosed in this Corporate Governance Statement (see sections entitled “Code of
Conduct” and “Diversity”):
• the Group’s policies and practices comply in all material respects with the 3rd edition of the ASX Corporate Governance
Council Principles and Recommendations (the “ASX Recommendations”); and
• during the 2017 financial year, it has been compliant with the spirit of the principles contained in the ASX Recommendations.
This Corporate Governance Statement has been approved by the Board and is effective as at 14 August 2017.
THE BOARD
Role
The primary role of the Board is to protect and enhance long-term shareholder value. The Board is accountable to shareholders for
the performance of the Company and it directs and monitors the business and affairs of the Group on behalf of shareholders.
The Board’s responsibilities include: overseeing the business and affairs of the Group; setting (in consultation with management)
the strategic and financial objectives of the Group and overseeing management’s implementation of these objectives; monitoring
the performance of management; approving the adoption of the Group’s major corporate governance policies; reviewing the
Group’s policies on risk oversight and management; overseeing the reliability and integrity of the Group’s accounting, financial
reporting and financial management and disclosure practices; overseeing the Group’s process for making disclosure to the market;
and the establishment of a formal and transparent procedure for the selection, appointment and review of directors.
The Group Chief Executive Officer, who is accountable to the Board, is responsible for managing, directing and promoting the
profitable operation and development of the Group.
A copy of the Board Charter can be found on the Company’s website at www.jbhifi.com.au via the “Investors” and “Governance”
sections.
Composition of the Board / Selection and appointment of directors
The Board seeks to ensure that the combination of its members provides an appropriate range of experience, skills, diversity,
knowledge and perspective to enable it to carry out its obligations and responsibilities.
The Board believes that having a range of different skills, backgrounds, experience and gender ensures a diversity of viewpoints
which facilitate effective governance and decision making.
The Company believes that skills and experience in the areas listed below are desirable for the Board to perform its role effectively.
The Board considers that its current composition possesses an effective blend of these skills and experience which enables it and
its Committees to effectively govern the business, operate effectively and add value in the context of the Company’s strategy.
• Executive/Management experience
• Retail expertise and experience
• Operational Management expertise and experience
• Financial expertise
• Property expertise
• Mergers & Acquisitions expertise and experience
• Governance expertise and experience
• Other board experience
• Experience in setting executive remuneration
• Risk Management expertise and experience
GOVERNANCE, ENVIRONMENTAL AND SOCIAL STATEMENTSFor personal use only

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The Company maintains a majority of non-executive directors on its Board. The Board currently comprises seven directors,
being six non-executive directors, including the Chairman, and one executive director, being the Group Chief Executive Officer.
The Company has written agreements with each director setting out the terms of their appointment. Apart from the Group Chief
Executive Officer, directors are subject to shareholder re-election by rotation at least every three years. The Company provides
shareholders with all material information in its possession relevant to the election or re-election of a director.
A copy of the Company’s Board Composition & Succession Policy, which includes the procedure for the selection and
appointment of directors, can be found on the Company’s website at www.jbhifi.com.au via the “Investors” and “Governance”
sections. The Board will undertake appropriate checks before appointing any person or putting forward to shareholders a candidate
for election as a director.
Details of the directors as at the date of this report, including further information about their experience, expertise and term of office,
are set out in the Directors’ Report.
Independence
The Company considers that each of its directors (including the Chairman) is independent with the exception of Richard Murray, the
Group Chief Executive Officer.
The Board regards directors as independent directors if they: do not have a material relationship with the Company other than
solely as a result of being a director; are independent of management; and do not have any business or other relationship that
could compromise the independent exercise of their judgement and their ability to act in the best interests of the Company.
The independence of each director is considered on a case-by-case basis.
Richard Uechtritz was Chief Executive Officer of the Company between July 2000 and May 2010 and a consultant to the
Company from May 2010 to November 2013. Given the nature of the consultancy arrangements (and that Richard was not
provided with remuneration for that role but was, instead, allowed to retain options granted to him whilst he was CEO) and the
passage of time, the Board is of the opinion that Richard is an independent director, and that neither these previous roles, nor his
relationship with current management, compromises his ability to exercise independent, unfettered judgement or act in the best
interests of the Company.
Beth Laughton is a non-executive director and chair of the audit, compliance & risk management committee of GPT Funds
Management Limited (“GPT”), the responsible entity for the GPT Wholesale Shopping Centre Fund. Wai Tang is a non-executive
director and member of the audit committee and the risk & compliance committee of Vicinity Limited. The Board notes that each of
the GPT Wholesale Shopping Centre Fund and Vicinity Limited have ownership interests in a number of shopping centres in which
the Company currently leases stores. The Board is of the opinion that Beth and Wai are independent directors on the basis that
individual leasing arrangements at the Company, GPT and Vicinity Limited are generally determined at a managerial level rather than
Board level. In addition, the Company’s internal protocols provide that Beth and Wai would be excluded from any discussion and
decision making where any conflict of interest arises between their roles as a director of the Company and of GPT/Vicinity Limited.
Conflict of interest
If a conflict of interest arises, the director concerned does not receive the relevant Board papers, is not present at the meeting whilst
the item is considered and takes no part in decision making. Directors must keep the Board advised, on an ongoing basis, of any
interests that could potentially conflict with those of the Company. Directors are required to promptly disclose to the Board interests
in contracts, other directorships or offices held, possible related party transactions and any other material personal interests in a
matter relating to the Company’s affairs.
Board meetings
The Board meets regularly, dependent on business requirements. Prior to any meeting, the directors receive all necessary Board
papers. As well as holding regular Board meetings, the Board also meets to comprehensively review business plans and the
strategy of the Group.
Access to information and independent advice
Each director has the right of access to all relevant Company information and to the Group’s executives. Subject to prior
consultation with the Chairman, each director may seek independent professional advice at the Company’s expense.
GOVERNANCE, ENVIRONMENTAL AND SOCIAL STATEMENTS (continued)For personal use only