DJS - David Jones 2008 AGM Chairman`s and CEO`s Address
Friday 28 Nov 2008

2008 ANNUAL GENERAL MEETING FRIDAY 28 NOVEMBER 2008 CHAIRMAN’S AND CHIEF EXECUTIVE OFFICER’S ADDRESS

ROBERT SAVAGE Chairman Ladies & Gentlemen and fellow shareholders, welcome again to our Annual General Meeting, our primary opportunity to meet with our shareholders and to report on our Company’s performance over the past 12 months. This morning, throughout the course of my report and our CEO’s Report which follows, we will provide you with an overview of the past year and the exciting future that lies ahead for our Company. There are also a number of important items on the Agenda, which I will cover with you in some detail prior to our voting on these items. As always, the opportunity to ask questions will be available to the meeting. In 2008 David Jones celebrated 170 years of trading. We are proud that our Company is the only department store in the world that has been trading under the same name for such a long period. In addition to celebrating our 170th birthday, the 2008 Financial Year is the fifth since implementation of the 2003 Strategic Plan. We are pleased to report that our Company has delivered a record high Profit After Tax (PAT) result and a record high dividend to shareholders. This is particularly pleasing given that in 2003 we started off a very difficult base (namely a loss of $25.5 million) and have managed to dramatically turn the performance of the Company around. Based on our five year track record of delivering PAT and Dividend growth, management unveiled the Company’s FY09 – FY12 Strategic Plan, which was approved by the Board and which sets the foundations to continue our growth track record over the next four years. The key highlights of the past 12 months (compared to our Company’s performance last financial year and since 2003) include our Company: • delivering an increase in Department Store Sales of more than $423.4 million since FY03, to $2,098.0 million in FY08 (refer to Graph 1 below);

David Jones Limited A.C.N. 000 074 573 A.B.N. 75 000 074 573 1

David Jones Limited ABN 75 000 074 573 2008 Annual General Meeting – Chairman’s and Chief Executive Officer’s Address

Graph 1 - Department Store Sales FY03-FY08 ($m)

2,098.0 1,983.2 1,674.6 1,769.5 1,800.8 1,821.6

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04

05

06

07

08

•

delivering a year-on-year increase in PAT from a loss of $25.5 million in FY03 (postsignificant items under AGAAP) to a profit of $137.1 million* in FY08 (refer to Graph 2 below);

Graph 2 – Profit After Tax FY03-FY08 ($m)

77.8

03 (25.5)

65.3

04

05

68.0

05

81.1

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109.5

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delivering a 350% increase in fully franked dividends to ordinary shareholders from 6 cents per share (cps) in FY03 to 27cps in FY08 (refer to Graph 3 below);

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137.1 08

David Jones Limited ABN 75 000 074 573 2008 Annual General Meeting – Chairman’s and Chief Executive Officer’s Address

Graph 3 – Dividend FY03 – FY08 (cps)

6

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11

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13

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16

06

22

07

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delivering an increase of nearly 150 basis points in Gross Profit Margin from FY03* to 39.5% in FY08; decreasing its Cost of Doing Business by 340 basis points from 33.7% in FY03* to 31.2% in FY08; maintaining a tight control on Capital Expenditure leading to significant reinvestment in our Company’s core business whilst simultaneously increasing our free Cashflow; and having low debt levels. Our Company’s existing bank facility of $350 million extends until 2012. We are in the fortunate position of having only drawn down $170 million as at the end of July 2008. This means we have a conservative debt position against high quality assets in Sydney and Melbourne, with plenty of “headroom” and a strong Balance Sheet upon which to embark upon implementation of our FY09 – FY12 Strategic Plan. (*FY03 figure adjusted for AIFRS and S&L impact)

Our Company has established a strong track record over the past five years, in terms of financial performance and shareholder returns (despite fluctuations in the economic cycle). Our track record demonstrates the fact that we have a proven business model, a capable management team and a solid foundation for future growth in shareholder returns, regardless of the peaks and troughs of the economic cycle. Most importantly, we have now established a solid foundation from which to implement our FY09 – FY12 Strategic Plan and to implement initiatives that will deliver longer-term success for our Company and ongoing growth in shareholder returns. DIVIDENDS In light of the Company’s strong financial performance in FY08 and the exciting opportunities that lay ahead, the Board has declared a fully franked dividend of 16 cps for 2H08. Added to the fully franked dividend of 11 cps declared for the first half of the 2008 financial year, this takes the total dividend declared for the year to 27 cps, fully franked. This represents an increase of 22.7% on the Company’s FY07 dividend of 22 cps. The Board and the management team remain committed to delivering ongoing dividend growth.

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David Jones Limited ABN 75 000 074 573 2008 Annual General Meeting – Chairman’s and Chief Executive Officer’s Address

DAVID JONES SHAREHOLDER OFFER On 24 September 2008 our Company unveiled a compelling value proposition for shareholders who apply for the new David Jones American Express Card. Of course the much loved, existing David Jones Store Card will continue to operate with all of its existing benefits other than the 2% shareholder discount which will be discontinued as of 1 February 2009, in line with standard corporate procedure throughout Australia (for example Wesfarmers, Woolworths, Harvey Norman and JB Hi Fi amongst others do not offer shareholder discounts at their retail outlets). The decision to discontinue the 2% shareholder discount will generate $2 million per annum of ...