August 2014 Investor Presentation 1 nemo2014\Presentations\Analyst - - PowerPoint PPT Presentation

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August 2014 Investor Presentation 1 nemo2014\Presentations\Analyst - - PowerPoint PPT Presentation

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nemo2014\Presentations\Analyst Presentation Jan14\201401 Nemo Analyst Presentation Master-22nd Jan FINAL.pptx August 2014 Investor Presentation 1 nemo2014\Presentations\Analyst Presentation Jan14\201401 Nemo Analyst Presentation Master-22nd Jan

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nemo2014\Presentations\Analyst Presentation Jan14\201401 Nemo Analyst Presentation Master-22nd Jan FINAL.pptx

August 2014 Investor Presentation

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Forward looking statements

Forward-Looking Statements INCLUDED IN THIS PRESENTATION ARE FORWARD-LOOKING MANAGEMENT COMMENTS AND OTHER STATEMENTS THAT REFLECT MANAGEMENT’S CURRENT OUTLOOK FOR FUTURE PERIODS These expectations are based on currently available competitive, financial, and economic data along with our current operating plans and are subject to risks and uncertainties that could cause actual results to differ materially from the results contemplated by the forward- looking statements. The forward-looking statements in this presentation should be read in conjunction with the risks and uncertainties discussed in the Pets At Home Annual Report and Accounts.

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Investment Highlights

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We have a special business with a great future

Clear leader & specialist retailer in the attractive UK pet care market Unique ‘one stop shop’ proposition with nationwide retail footprint, pet services and omni-channel Strong financial performance and highly cash generative Clear growth story with multiple levers

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Market Position

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148 Groomers 293 Vets 386 Stores

The UK's leading pet retailer, small animal veterinary services provider & grooming salon operator

First store

  • pens in

Chester

1991 2003 2000 2008 2011 2012 2009

Stoke NDC

2010 2013 .com

Northampton SDC

2001

UK

2007 200th Store 300th Store 350th Store 1st Vet 50th Groomer 100th Groomer 1st Groomer 100th Vet 50th Vet 1st In-store V4P 2014

SQP Licenses

150th Store .com

Relaunch

Largest UK vet services provider

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UK pet market is large, resilient and growing across all categories

Source: OC&C Note: All figures to calendar year end and exclude VAT

1 ONS data defined as all retailing including automotive fuel

Large and highly fragmented addressable market £5.4bn Positive year on year market growth since 2008 delivering a CAGR of 2.6% Future growth driven by humanisation, premiumisation and increased uptake of services Services represent ~50% of the market UK Pet Care Market

Treats Vet Services Health & Hygiene Other Accessories Grooming Insurance Other Food Advanced Nutrition Total 0.8% 7.7% 9.5% 0.3% 1.4% 3.3% 8.0% 2.6% 2.6% 2008-12 CAGR 3.1% 7.7% 5.3% 2.5% 3.2% 4.1% 9.3% 2.6% 2012-17 4.3% 5.1% 2.6% 3.9% Total Services Total Accessories Total Food 3.1% 1.3% 2.4% 2012-17 2008-12 CAGR UK Retail1: 2.2% 1.5 1.5 1.6 1.6 1.6 1.7 1.7 1.8 1.9 0.1 0.1 0.2 0.2 0.2 0.2 0.2 0.2 0.3 0.2 0.2 0.2 0.3 0.3 0.3 0.3 0.3 0.4 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.4 0.4 0.4 0.4 0.5 0.4 0.4 0.4 0.4 0.5 1.4 1.4 1.5 1.5 1.6 1.6 1.6 1.7 1.9 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.4 0.4 0.5 0.5 0.6 0.6 0.7 0.7 1.1 £4.4bn £4.6bn £4.9bn £5.0bn £5.1bn £5.3bn £5.4bn £5.7bn £6.7bn 2006 2007 2008 2009 2010 2011 2012 2013F 2017F Projection +4.3% 2.6% 5.2%

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nemo2014\Presentations\Analyst Presentation Jan14\201401 Nemo Analyst Presentation Master-22nd Jan FINAL.pptx Dog only Dog only Cat only Cat only Dog Multi Dog Multi Cat Multi Cat Multi 0% 20% 40% 60% 80% 100% Non Pets at Home Customer Customer 55.9% 42.8% 57.2% 44.1% Other Only Other Only

Pets at Home’s core customers are engaged – driving enhanced customer spend

Note: All charts based on survey of >5,000 pet owners conducted in July 2013

1 Engagement score based on sum of scores (1-5) for 2 questions

— I tell my pets I love them at least twice a day — I take my pets to the vet regularly for check-ups

2 Difference of engaged customers vs. less engaged customers, showing % delta from the average score

Pets at Home vs. Non Pets at Home Customers - Pet Ownership

Single Pet Customers Multiple Pet Customers

Key Differences for Engaged Customers1 Cat Dog Influence of Engagement on Customers’ Key Purchase Criteria2

Colleagues Convenience Products Price

5% 1% 8% 7% 17% (7)% (4)% (3)% (16)% (11)%

Price is more important to less engaged customers Products and services are more important to highly engaged customers

Less Important More Important

Price is more important to less engaged customers Products and services are more important to highly engaged customers

Average Total Annual Spend

£620 £890

100 200 300 400 500 600 700 800 900 1,000 <3.5 3.5-6.5 >6.5

Average Annual Spend of Pets at Home Customer (£) Engagement (Out of 10)

100 200 300 400 500 600 700 800 900 1,000 <3.5 3.5-6.5 >6.5

Average Annual Spend of Pets at Home Customer (£) Engagement (Out of 10)

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We are gaining share across all segments of the market

UK Pet Care and Vet Market – Share, 2009–121

Source: OC&C ¹ Figures Exclude VAT

2 The 5.9% includes 3.4% from Companion Care and 2.5% from Vets4Pets (inc. Acquisition) – though V4P not acquired by Pets at Home until April 2013 3 Includes: CVS Group, IVC, Medivet Group, Vets Now (No revenue data for Goddards available) – figure is therefore likely higher

Food:

Potential to gain further share from independents & grocers

Vet Services:

Potential to gain further share from independent practices

Accessories:

Potential to gain further share from specialists & independents

Advanced Nutrition:

Potential to gain share from vets and specialists

10.1% 12.6% 74.3% 70.6% 2.8% 4.2% 6.4% 5.8% 1.9% 2.0% 4.4% 4.9% 2009 2012 2,017 2,172

Delta 2009–12 (ppts)

+0.4 +0.1

  • 0.6

+1.4

  • 3.7

+2.4 27.0% 32.3% 13.5% 15.9% 0.3% 0.5% 30.5% 22.3% 5.7% 9.0% 23.0% 19.9% 2009 2012 757 779

Delta 2009–12 (ppts)

  • 3.1

+3.3

  • 8.2

+0.2 +5.2 +2.3 38.3% 44.4% 16.6% 16.8% 8.3% 8.4% 2.4% 2.4% 34.5% 28.1% 2009 2012 167 209

Delta 2009–12 (ppts)

  • 6.4

+0.0 +0.1 +0.2 +6.1 2.0%² 5.9%² 9.5%³ 13.3%³ 88.5% 80.8% 2009 2012 1,549 1,603

Delta 2009–12 (ppts)

  • 7.7

+3.9 +3.8 Pets at Home Grocers - Store Grocers - Online Other Pet Specialists Online Specialists Other Private and Small Vet Practices

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Online expected to gain share in pet products market by c1% per annum, Click & Collect projected to outpace home delivery

Source: OC&C

1 Includes Click & Collect 2 Food & Non-Food

Online Penetration of Pet Products vs Retail 20121

7.3% 4.5% 40.0% 20.4% 17.4% 16.8% 15.6% 15.0% 10.5% 6.8% 4.9%

Health & Beauty Home & DIY Homewares (small) Baby Home and Travel Equipment Clothing & Footwear Sports Nutrition Contact Lenses Vitamins & Dietary Supplements Electronics & Electricals Total UK Grocery Total Pet Products

% of Total Category Sales

Online Penetration of Pet Products1,2

7.3% 6.5% 5.9% 5.1% 3.4%

2008 2010 2012 2011 2009

208 236 260 280 294 299 8 13 21 34 54 87 £216m £249m £281m £314m £348m £386m 2012 2013F 2014F 2015F 2016F 2017F

CAGR 2012-2017

+61.2% +7.5% (96%) (95%) (92%) (89%) (84%) (23%) (11%) (8%) (5%) (4%) (16%) (77%) +12.3%

UK Pet Care Pet Products Online Fulfilment Projection

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Online Penetration

  • f Pet Products

7.3% 8.1% 8.8% 9.6% 10.2% 11.0% Home Delivery Click & Collect²

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Strategy

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Our Strategy: Delivering across the PawPrint allows us to drive growth in like-for-like, space and gross margin

Product and Innovation

Product Mix & Own Brand

Optimised Store & Pet Services Roll Out

Key Growth Drivers Drivers of Core Growth

LFL Space Gross Margin VIP Club Omnichannel Services (Vets & Groomers) Engagement

Services Maturity

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Colleague & customer engagement is central to our success

Trained and Experience Colleagues

4 step training; enhanced salaries for qualified colleagues

Step 1 Step 3 Step 4 Step 2

High Colleague Engagement and Retention Outrageous Customer Service

Engagement Retention

Pawsitively

  • utrageous

service

Expertise Selling through expertis e

Resulting in Higher Basket Size1

Friendliness Knowledge

91% 93% 93% 83% 83% 81% FY12 FY13 FY14 Engagement Retention Fish4Opinion Net Promoter Score 77% 84% 84% FY12 FY13 FY14

£20.64 £22.00 Less than satisfied Highly satisfied

1 Data from FY14 prepared by SMG

£21.01 £22.04 Less than satisfied Highly satisfied 5% 7% LFL Growth: Engagement

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Unique products, high growth products & higher margin own brands are critical to our strategy

>2,750 SKUs launched in FY14, refreshing 1/3 of our product range In-house expertise to design and brand products Sales of private label AN brand, Wainwright’s dog food, grew 26.7% to £27.2m New launches of dog Grain Free and Wainwright’s cat

LFL Growth: Product & Innovation

Own/private label products 42% gross store revenues Successful exclusive products launches, such as Smart Bones Advanced Nutrition 56% of dog & cat food sales excl. treats (FY13: 53%) AN market forecast to grow ahead of the pet food market

2012 2014 2013

Reported growth 18% LFL growth 13% £105.3 £124.0 FY13 FY14

Pets At Home Advanced Nutrition revenues

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54% 40% 54% 75% 79% 28% 53% 15% 12% 9% 12% 6% 22% 33% 12% 14% 12% 6% 4% 24% 12% 19% 35% 24% 7% 11% 26% Overall Food Treats Small Accessories Large Accessories Health & Hygiene Other Unique To PAH Overlap With One Other Retailer Overlap With Two Retailers Overlap With Three Or More Retailers 1%

Over 50% of SKUs unique to Pets at Home – with a highly differentiated range in accessories

Source: Compability Online Store Checks, OC&C analysis

1 Top 4,000 Pets at Home SKUs, by sales volume, identifiable on Pets at Home website, compared to other retailers 2 Competitors: Amazon (Includes Amazon and Amazon Marketplace), Tesco.com, Zooplus, Medicanimal, Fetch.com

Range Overlap Analysis vs. Amazon, Tesco.com, Zooplus, Medicanimal, Fetch.com

Proportion of Overlapping SKUs1 With Pets at Home2 % Overlap

  • vs. Amazon
  • vs. Fetch.com
  • vs. Medicanimal
  • vs. Zooplus
  • vs. Tesco.com

Overall

Based on the top 4,000 identifiable SKUs (by sales volume) on the Pets at Home website which account for 80.9% of gross sales

Percentage of Unique SKUs – Pets at Home vs. Amazon, Tesco.com, Zooplus, Medicanimal, Fetch.com

59% 50% 59% 76% 79% 29% 54% Overall Food Treats Small Accessories Large Accessories Health & Hygiene Other 75% 57% 73% 91% 87% 62% 89% 84% 72% 93% 92% 88% 67% 99% 89% 76% 82% 97% 95% 96% 98% 89% 80% 73% 99% 98% 92% 97% 54% 40% 54% 75% 79% 28% 53%

LFL Growth: Product & Innovation

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VIP Club has grown at a rapid rate

LFL Growth: VIP Club

Membership and revenue capture rapidly growing1 VIP Club Card, launched November 2012

  • Allows us to deliver targeted marketing

communications to owners & their pets

  • >7 million pets registered by owners
  • Every swipe awards lifelines, which convert to

charity donations >£1m raised FY14

  • My VIP magazine has an estimated readership
  • f >1.1 million, c£100 of vouchers in each issue
  • Voted ‘Best Loyalty Programme’ in retail by the

Loyalty Awards 2014

VIP Customer Basket Size2

1 Pets at Home VIP data to the 17th July 2014, extracted by GI Systems 2 Average basket sizes for VIP & Non VIP Customers in FY14

£15.60 £21.89 Avg Basket Size Non VIP Customer Avg Basket Size VIP Customer +40% 0.2 0.7 1.2 1.6 2.0 2.4 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0%

  • 0.5

1.0 1.5 2.0 2.5 3.0 Jan 13 Apr 13 Aug 13 Dec 13 Mar 14 Jul 14 Members (m) % Revenue Captured

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Source: 2012 Consumer Survey of >5,000 Respondents, OC&C analysis Note: All figures exclude VAT

VIP will allow us to pursue a >£1.5bn wallet share opportunity with current customers

Calendar Year 2012 £3,252m £1,530m £630m Total= £5,412m Total Spend 60% 28% 12% % Annual Spend in Market, ex VAT Spend at Pets at Home by Customers Spend at Other by Pets at Home Customers Non Pets at Home Customer Spend

Strategic Initiatives Cross Sell Services Increase Share

  • f High Margin

Own Label Leverage VIP Data with Suppliers

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Advanced Nutrition Other Food Accessories Vet Services Insurance Grooming £209m £1,963m £779m £1,603m £676m £182m 44% 14% 41% 9% 24% 67% 32% 18% 49% 6% 34% 60% 1% 40% 60% 3% 42% 55% LFL Growth: VIP Club

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Econometric research suggests that every 16 visits to our website drives 1 in-store customer transaction2

The highest traffic pet website in the UK

LFL Growth: Omnichannel

Market share of UK pet retail traffic 1

Source: Hitwise

1 Data represents week average from 16 May 2014

2 Based on econometric research undertaken for the company Other

Visitors to our site versus competitors 47% 12% 12% 11% 7% 3% 3% 5% Mar 13 Apr 13 May 13 Jun 13 Jul 13 Aug 13 Sep 13 Oct 13 Nov 13 Dec 13 Jan 14 Feb 14 Mar 14 Apr 14 www.petsathome.co.uk www.pet-supermarket.co.uk www.petplanet.co.uk www.zooplus.co.uk Amazon UK - Pet Supplies

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  • Deliver To Store now live across our portfolio
  • 4 clicks to checkout (as Amazon)
  • More than 9,800 SKUs, extended range of over 2,900

SKUs to stores

  • Click & Collect - two hour service
  • Subscription food service in trial

Our website is a portal for customer engagement, driving footfall to stores & services

New website launched January 2014 Developments to come

LFL Growth: Omnichannel

Optimise

  • Full mobile & tablet friendly

versions

  • Targeting 12,000 SKUs

Integration with stores

  • Continue to drive Click &

Collect and Deliver To Store

  • Redemption of VIP vouchers

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Retrofitting vets and groomers to existing stores drives store LFL & increases overall customer spend

LFL Growth: Services

Services increase overall customer spend & loyalty In store services provide a one stop, convenient offer for pet lovers Retrofitting services drives footfall & lifts store LFLs by c1%

  • 293 vet practices: 174 in-store & 119 standalone
  • Vet retrofit delivers c£39k rent benefit to store
  • 18 retrofits to stores in FY14, 10 in Q1 FY15
  • 148 salons: 146 in stores, 2 in stand-alone vets
  • Groomer retrofitted when store space too small for vet
  • 11 retrofits to stores in FY14, 9 in Q1 FY15

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VIP allows us to drive increased spend on services as well as increased spend in store

1 VIP club member spend for the FY14 2 Vets consist of Companion Care practices 3 Accounts for total transactions including online

Visit Frequency3

5.9 10.3 10.0 12.7 18.7

LFL Growth: Services

# of People in Sample

1,580,716 47,589 36,112 122,560 4,040 19.5 9,417

191 231 160 231 266 412 135 250 322 362 513 643 871 Store Only Store + Groomer Store + Online Store + Vet² Store + Vet² + Groomer Store + Vet² + Online Store + Vet² + Groomer + Online Store Other Additional customer spend

Last 12 Month VIP Club Member Spend (£)

30.2 329

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313 345 377 386

FY12 FY13 FY14 Q1 FY15

Strong track record of rollout: We plan to open at least 25 stores, 60 vets & 50 Groom Rooms in the FY15

Consistent store rollout Largest branded small animal veterinary services provider Largest grooming salon operator in the UK +32

Net of 1 closure*

+32 +32 +9

Includes Barkers

  • * Knutsford store closed: an old high street trial at the end of lease

Stores with Vet Stores with Groom Room FY12 28% 19% FY13 32% 25% FY14 42% 34% Q1 FY15 45% 38%

61 87 129 148

FY12 FY13 FY14 Q1 FY15

+19 +42 +26 +18

87 111 158 174 5 97 119 119

FY12 FY13 FY14 Q1 FY15 In-store Standalone +16 +69 +116 +19

92 Vets4Pets acquisition Space Rollout

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Significant opportunity for growth: Target portfolio of 500 stores, 700 vets & 300 Groom Rooms

  • Market analysis conducted in conjunction with

CACI has identified capacity for further rollout

  • Store target stress tested against scenarios for

both market decline & a more rapid transition to

  • mnichannel
  • Roll out to date has been disciplined - all stores
  • pened before FY12 profitable
  • New stores opened only after strict economic

and returns analysis conducted - our new store footprints are smaller & incorporate services as part of returns criteria (all new stores planned to incorporate a vet and a groomer from opening)

  • Customer requirement for stores driven by

specialist offer, need for advice & pet services proposition

  • Convenience element of offering & small

basket size indicates limit to customer travelling time – c10 minutes drive

  • Lack of specialist competitors gives room for

larger rollout programme

Rollout based on strict economic returns criteria Market sizing for stores Market sizing for vets

  • 700 practices will give UK coverage with a

unified vet brand

  • Vet target portfolio higher than stores as

customers unlikely to travel >5 minutes with a pet

  • Creates infill opportunity for vets between

stores, i.e. standalone practices

Space Rollout

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148 119 174 386 108 182 44 131 94 114 Groom Room Standalone Vet In-store Vet Stores Existing Potential Retrofits Potential New

Significant opportunity for expansion – maturity & penetration of vets and groomers is low

Source: CACI, Pets at Home. Existing store/practice numbers as at 17 July 2014

1 Proforma for Vets4Pets acquisition

Current Total Potential Portfolio % Existing Opened Since FY10 Years to Maturity >500 >450 >250 >300 4-5 7 7 4-5 30% 59% 60%2 73%

1 1

c35% c70% c53% 80%

Space Rollout

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Higher margin Advanced Nutrition and private brands are key contributors

Gross Margin Growth: Product Mix / Own Brand

Private brand / own labels as % gross store food revenues Advanced Nutrition penetration of dog & cat food revenues Private brand / own labels are 42% of gross store revenues Private brand / own labels as % gross store accessories revenues 32.9% 67.1% Own label & private brand Other 49.9% 50.1% Own label & private brand Other Wainwrights Dog Advanced Nutrition private brand sales £15.8m £19.9m £5.7m £7.3m 26.5% 28.3% 25.5% 26.0% 26.5% 27.0% 27.5% 28.0% 28.5% £0.0 £5.0 £10.0 £15.0 £20.0 £25.0 £30.0 FY 13 FY 14 Wainwrights Dry Dog Wainwrights Wet Dog W/W participation of dog AN 53% 56% 47% 44% FY 13 FY 14 Other Dog and Cat Food (exc Treats) Advanced Nutrition

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Our Vet Group Joint Venture model is unique and successful

We make it easy for a Vet to establish their own practice JV Practice

JV Partner benefits from all profit & capital accretion

Loan from JV Vet Partner £30,000 Loan from Pets At Home £30-60,000 Larger loan from Bank c£320,000 Enables vet to start up own practice with minimal investment

  • No need to find full funding alone, or buy into existing Partnership

Removes financing & setup burden

  • PAH agreement with lending bank for debt facility to open practices
  • PAH takes care of administration, legal and paperwork

Head start on building reputation & client list

  • Brand awareness and national advertising
  • Practice within a store has captive audience & footfall
  • Brand new practice with state of the art equipment

The model incentivises the Vet to grow When loans repaid (avg 7 years), vet can take up to 100% dividend

  • Vet concentrates on what they do best, whilst we take care of back
  • ffice support, administration & marketing
  • Vet has maximum incentive as a result of dividend model
  • Share structure allows for vet exit strategy and profit from running a

successful business, giving us the opportunity to intervene if necessary

  • 1. Repay bank loan
  • 2. Repay PAH loan
  • 3. Repay Vet

Partner loan % income to PAH for admin support Rent to PAH (in- store practices only) Average market salary to Vet Partner JV Practice

Cash outflows, Years1-7

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£40,000 £50,000 £60,000 £70,000 £80,000 £90,000 £100,000 £110,000 £120,000 £130,000 £140,000 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8

Average fee income to PAH

Increasing margin leverage as vet practices and Groom Rooms mature

Groom Room economics located in-store c75% of grooming portfolio open since 2010 Vet practice economics located in-store c64% of vet portfolio open since 2010

£73,000 £83,000 £106,000 £0 £7,000 £18,000 FY12 FY13 FY14 Average Sales Average EBITDA

Cohort of 8 Groom Rooms opened in FY12 Increasing margin leverage Mixed historical cohort of 8 Companion Care practices For every 60 practices added, we incur an additional c£1.3m increase in central support costs

c64% practices less than 4 yrs old

Gross Margin Growth: Services Maturation

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Financials

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£91.2m £98.5m £110.7m FY12 FY13 FY14 £544.3m £598.3m £665.4m FY12 FY13 FY14

A track record of top line and like-for-like for growth, with high cash returns on investment

Underlying Unlevered Free Cash Flow & Conversion Revenue & Like-For-Like Growth

1.4% 2.6% 2.4% 86% 98% 84%

16.8% 16.5% 16.6% Underlying EBITDA & Margin

£78.6m £96.8m £92.4m FY12 FY13 FY14

CROIC

C A G R 1 . 6 %

CROIC excludes goodwill on KKR acquisition. FY14: excludes £25m of payables related to outstanding IPO costs at year end. FY13: software and other intangible assets have been reduced by £45.6m of goodwill associated with the acquisition

  • f Vets4Pets which was acquired at the end of FY13 and hence FY13 includes

no trading results from that acquisition

21.7% 22.6%

FY13 FY14

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Strong revenue growth across all categories

Revenue £m FY13 FY14 Change Food £297.9 £327.1 9.8% Accessories £268.5 £288.0 7.3% Total Merchandise £566.4 £615.1 8.6% Services & other1 £31.9 £50.3 57.4% Total Group revenue £598.3 £665.4 11.2% Like-For-Like growth2 2.6% 2.4%

1 Includes revenue from Joint Venture and wholly owned Group Venture vet practices, Groom Rooms, live pet sales & insurance commission 2 Total revenue in the financial period compared to revenue achieved in the prior period, post cannibalisation, for stores, grooming salons & vets trading for 52 weeks. Includes omnichannel.

Revenue £m Q1 FY14 Q1 FY15 Change Merchandise Revenue £176.6 £192.5 9.0% Food Revenue 8.8% Accessories Revenue 9.2% Services & other1 £14.4 £18.3 27.3% Total Group revenue £191.0 £210.8 10.4% Like-For-Like growth2 0.2% 4.1%

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53.8% 0.1% 0.4%

FY13A Merchandise Services & Other FY14A

54.1%

Segment margins have improved, overall gross margin has contracted due to mix

Gross Margin Bridge

FY13 FY14 Change Merchandise Services Merchandise Services Merchandise Services Revenue Mix 94.7% 5.3% 92.4% 7.6%

  • 222 bps

+222 bps Gross Margin 56.0% 22.5% 56.1% 26.3% +14 bps +386 bps

Includes: Terms Global sourcing, Asia Advanced Nutrition Own brand Food mix vs Accessories Includes: Growth in Vets Group Maturing Vet JVs Vets4Pets synergies Wholly owned GV vets Newer Groom Rooms Pet welfare

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EBITDA margin reflects significant investment in colleagues, stores and distribution

EBITDA Margin Bridge

16.6% 16.5% 0.3% 0.2%

Includes: Vets integration ssss efficiencies Includes: Vets growth New stores VIP / marketing Auto- enrolment

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Pre-tax cash flow conversion strong, despite increased capital expenditure

WC Movement, £m FY13 FY14 Increase in inventories (1.7) (4.0) Increase in trade & other receivables (6.0) (8.0) Increase in trade and other payables 27.0 21.7 Net working capital movement 19.3 9.7 Working Capital, £m5 FY13 FY14 Inventories 42.1 46.1 Trade & other receivables 34.0 42.0 Trade & other payables4 (99.8) (121.5) Working capital (23.7) (33.4) Cashflow, £m FY13 FY14

Underlying EBITDA 98.5 110.7 Working capital change 19.3 9.7 Underlying operating cashflow 117.8 120.4 Capital expenditure (20.4) (26.3) Investments (1.2) (1.7) Other 0.6 Pre-tax cash before exceptionals 96.8 92.4 Conversion % 98% 84% Exceptional items1 (7.3) (1.2) Pre-tax cash available for debt service 89.5 91.2 Acquisitions2 (47.9)2,3 (2.0) Pre-tax, post acquisitions cash available for tax, debt service 41.6 89.2

1 Exceptionals includes related party fees, costs commensurate with operating the business as a publicly quoted company and IFRS2 related share based payment credits and charges. Excludes out standing payments

associated with IPO costs

2 Excludes costs of acquisition (£4.6m), which are included in exceptionals in 2013 Actual 3 Acquisitions are net of cash acquired 4 FY14 excludes £25.2m in other payables, reflecting out standing payments associated with IPO costs 5The "trade and other receivables" and "trade and other payables" balances presented have been adjusted to reflect movements in the fair value of financial instruments which are held as assets or liabilities on the

balance sheet, in accordance with their presentation within the Statement of Cash Flows. The “trade and other payables” balances presented in the above table have been adjusted to exclude exceptional movements in working capital relating to accrued transaction costs, in accordance with the presentation of such items within the Statement of Cash Flows.

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Capital expenditure driven by new stores and refurbishments Robust balance sheet with 2.3x ND / EBITDA

Capex fully funded from operating cash flow

  • FY14 capital expenditure reflective of
  • 32 new store openings at a cost of £10.9m
  • Major refurbishment capital of £5.1m to facilitate Vet /

Groom Room additions in 20 stores

  • New services rollout
  • Introduction of SAP

Capital Expenditure £m FY13 FY14 New stores 10.7 10.9 Services 2.7 5.1 Major projects 2.7 4.0 Other capex 5.9 10.0 Total capex 22.0 30.0 CROIC 22.6% 21.7% £m Stated Gross Debt 319.9 Add back: issue costs 5.1 Adjusted Gross Debt 325.0 Cash 90.8 Less IPO related cash (24.9) Adjusted cash 65.9 Net Debt 259.1 Underlying EBITDA 110.7 Leverage 2.34x Leverage Reconciliation Underlying ND position adjusted for a timing difference in IPO and Plc related costs due to be paid from IPO cash proceeds

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We have a special business with a great future

Clear leader & specialist retailer in the attractive UK pet care market Unique ‘one stop shop’ proposition with nationwide retail footprint, pet services and omni-channel Strong financial performance and highly cash generative Clear growth story with multiple levers

4 3 2 1 35

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Appendix

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Financial definitions

Like-for-like ‘Total sales revenue in a financial period compared to revenue achieved in a prior period for stores, grooming salons and vets that have been trading for 52 weeks. Includes revenue from the Group’s online store. Underlying EBITDA Group underlying operating profit under IFRS (which includes amortisation of landlord and developer contributions received), plus depreciation and amortisation, and profits and losses on disposal where these are included in operating profit. Excludes exceptional items, related party fees, costs commensurate with operating the business as a publicly quoted company and IFRS2 related share based payment credits and charges Underlying unleveraged free cash flow Underlying EBITDA, adjusted for changes in working capital, acquisitions of property, plant and equipment and

  • ther intangible assets, investments in other financial assets, proceeds from the sale of property, plant and

equipment and is stated before cash flows for exceptional costs and acquisitions of subsidiaries. FY14 FCF has been adjusted through the removal of a £25.2m increase in other payments reflecting payables associated with IPO costs outstanding at year end to give an underlying unlevered FCF CROIC Represents cash returns divided by the average of gross capital (GCI) invested for the current financial year and GCI for the prior financial year. Cash returns represent underlying EBITDA less depreciation & amortisation, plus rental charges, reduced by tax equivalent to the corporate tax rate, plus depreciation and amortisation. GCI represents Gross Property, Plant and Equipment plus Software and other intangibles excluding the goodwill created on the acquisition of the group by KKR (£906,445,000) plus net working capital plus rent multiplied by a factor to impute the commitment of the group to its rental obligation. A multiple of 8 has been used.

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Guidance

Guidance Pet market outlook and economic indicators positive - lack of sustained rise in disposable incomes gives some caution Trading in the current financial year is progressing in line with our expectations

  • Store and services rollout per annum, more than …
  • 25 stores
  • 60 vet practices (c30 retrofits)
  • 50 Groom Rooms (c35 retrofits)
  • Gross margin mix: Benefit from services maturation & growth, modest Merchandise margin expansion
  • Plc costs of c£2.5m
  • Capital expenditure: £34-35m per annum
  • Net interest cost: c3.0%
  • FY15E tax rate 22% (+1% to underlying tax rate)
  • FY15E leverage: c2.0x underlying EBITDA, decreasing by 0.5x per annum thereafter
  • Dividend: FY15E 30-40% payout ratio, split 1/3 interim, 2/3 final

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293 262 114 111 52 49 89 56 48 22 20 386 235

Pets at Home is the largest specialist pet care retailer and small animal veterinary Group

Source: Company websites. Store/practice numbers August 2014

#1 Specialist Pet Care Retailer #1 Branded Small Animal Veterinary Group

Vet Group

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Only provider offering a full suite of pet products and services

Grocers Specialists Online Vets

Depth of SKUs in Food

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Depth of SKUs in Accessories

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Advanced Nutrition Category Leadership

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Live Pets in Store

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Extensive Pet Services (e.g. vets, grooming, nutrition consultations)²

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Customer Insight / Membership Programme³

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Convenient Proposition

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Significant Community Engagement

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Based on searches conducted as of 6 December 2013 ¹ Jollyes and Pets Corner have more limited own brand offering ² Certain specialists provide limited services, such as grooming ³ Asda and Morrisons (grocers), MedicAnimal and Ocado (online) and Medivet (Vets) do not have a recognised membership programme

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UK US

Market Size Market Size 2012 (£bn)1 2008-12 CAGR (%)1 £3.7 3% £23.2 4% # Households (m) % Households with pets Average # Pets/Household with pet 26 45% 1.9 132 56% 2.1 Spend per Pet food & accessories (£) Spend/pet food (£) Spend/pet accessories (£) £157 £116 £42 £142 £90 £52 Market Structure (Share of Food & Accessories) % Grocers % Pureplay Internet Retailers % Top Two Pet Specialists2 56% 4% 19% 35% 6% 26% Consumer Headroom for Growth % Penetration Advanced Nutrition % Penetration Organic/Healthy Food 8% 2% 15% 9% % Grooming Penetration3 4% 10%

Headroom for growth in UK, and a defensible position for Pets at Home, given US comparison

UK vs US Key Statistics 2012 (Excluding VAT)

Premium food (eg Advanced Nutrition, Organic, Grain Free, ‘Bridging’ brands) Accessories range (breadth, depth & innovation) Grooming and Day Care services

Opportunities for Pets at Home

Source: OC&C

1 Market Size & CAGR refer to Food (Grocery, AN, Treats), Accessories and Grooming. NB Does not include Vet Services or Insurance 2 Market Share breakdown: Pets at Home (Food: 13%, Accessories: 32%), Jollyes (Food: 0.4%, Accessories: 1.9%), PetSmart (Food: 16%, Accessories: 17% ), PetCo (Food: 9%, Accessories: 10% - NB assumes PetCo has

same Food / Accessories revenue split as PetSmart)

3 Grooming Penetration is defined as the proportion of the dog and cat population groomed in a year

Higher pet penetration Lower LFL food prices, but more developed premium food sector Higher accessories spend More developed demand for some services Two scale pet specialists with significant market share (PetSmart & PetCo) – versus one in UK (Pets at Home)

Key Differences in US

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We have a proven model to identify size of opportunity for superstores

UK pet care market potential has been calculated by postcode area and a demand map created Market potential already absorbed within a 10 min drive- time of existing stores has been mapped Using CACI models, a defined payback hurdle and a manual sense check highest priority new store locations have been identified Gravity model simulates

  • pening of new

stores and

  • pportunity is

remodelled each time

Vet market potential calculated in a similar way Step 1

Demand mapped

Step 2

Catchment areas identified

Step 3

Opportunities assessed

Step 4

New stores modelled

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Source: CACI gravity model

  • Market potential calculated by

postcode using Acorn demographic types (darker colour = higher potential)

  • Blue dot is existing Pets at Home store

Case study of footprint expansion: Basildon example

  • CACI analysis demonstrated sufficient demand to justify a second store in Basildon
  • Basildon Pipps Hill opened in March 2013 and is delivering ahead of business plan

Step 1

Demand mapped

Step 2

Catchment areas identified

Step 3

Opportunities assessed

  • Market potential within 10 minute drive

time of existing store shown in grey

  • Unabsorbed market potential remains

in colour

  • 10 minute drive time catchment for

potential new site overlaid

  • Sufficient demand to justify opening a

second store (purple dot)

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Product is the most important purchase criterion for highly engaged customers

Source: Pets at Home 2013 Consumer Survey, OC&C analysis

1 Highly Engaged Customers: Cat Lover, Dog Lover, Dog Multi

Importance of Key Purchase Criteria for Customers

4.4 4.4 4.3 4.3 4.2 4.2 4.2 4.1 3.9 3.9

Knowledgeable Store Colleagues Available Store Colleagues Wide Range of Products Convenient Location Good Promotions Convenient Opening Hours High Quality Products Products In Stock Good Value For Money Products That I Want Colleagues Convenience Products Price

Difference Versus Less Engaged Customers Delta in % Difference Versus Average Score Highly Engaged Customers1 Average score out of 5

5% 1% 8% 7% 17% (7)% (4)% (3)% (16)% (11)%

Price is more important to less engaged customers Products and services are more important to highly engaged customers

Less Important More Important

Price is more important to less engaged customers Products and services are more important to highly engaged customers

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Underlying to reported EBITDA reconciliation

£000 FY14 Operating profit £78,842 Exceptional items £10,574 Related party fees £1,221 IFRS2 share based payment charges £31 Underlying operating profit £90,668 Depreciation and amortisation £19,990 Underlying EBITDA £110,658 FY14 excludes

  • Exceptional items: costs associated with the Initial Public Offering on 17 March 2014 (£9.4m), and costs

associated with the integration of the Vets4Pets business (£2.3m) net of a VAT refund (£1.1m)

  • Related party fees
  • Costs commensurate with operating the business as a publicly quoted company
  • IFRS2 related share based payment credits and charges

FY15 onwards

  • Excludes IFRS2 related share based payment credits and charges & any exceptional items
  • Includes Plc costs of c£2.5m

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Customer and People Director, CEO Vets

  • Joined in December 2008. Previously

spent 14 years at Asda as Retail Operations Director and Marketing Operations Director Commercial Director

  • Joined in January 2011. Previously Exec Non

Food Director at Asda (13 years at Asda) and Buying Director at Wilkinsons (2 years). Previous commercial roles at Iceland, Sainsburys and M&S Logistics and Business Systems Director

  • Joined in February 2007. Previously

held senior roles at Boots and Tech Data

Peter Pritchard Sally Hopson Phil Hackney Nick Wood

CEO

  • Joined as CEO in June 2012. Previously

CEO of American Golf for 4 years and 10 years management at Dixons CFO

  • Joined as CFO in April 2006. Previously

Deputy Finance Director at JD Wetherspoon Plc

Ian Kellett Tony De Nunzio

Non-Executive Chairman

  • Joined as Chairman in March 2010. Currently

Non-executive Chairman of Maxeda and Non- executive Director of Alliance Boots. Previously CEO of Asda and Deputy Chairman of Galiform

Our team

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