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13.36cm 0.39cm 0.43cm 13.36cm

6.03cm

5.12cm

0.76cm

1.64cm

7.20cm

8.43cm

Interim Results FY18

28th November 2017

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13.36cm 0.39cm 0.43cm 13.36cm

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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.

2

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13.36cm 0.39cm 0.43cm 13.36cm

6.03cm

5.12cm

0.76cm

1.64cm

7.20cm

8.43cm

Highlights Ian Kellett, Group CEO

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13.36cm 0.39cm 0.43cm 13.36cm

6.03cm

5.12cm

0.76cm

1.64cm

7.20cm

8.43cm

Improved trading momentum: pricing and other initiatives are

delivering results and the Vet Group remains in strong growth

Positive momentum in Merchandise with H1 like-for-like growth of 3.1% (Q1:1.5%, Q2:5.1%)

Strong omnichannel revenue growth of 81% driven by new initiatives

Veterinary business continuing to take market share

Income from First Opinion Joint Venture practices up 16.1% to £28.0m

Double digit revenue growth in Specialist Referral centres

FCF of £23.2m and ordinary dividend 2.5 pence per share

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13.36cm 0.39cm 0.43cm 13.36cm

6.03cm

5.12cm

0.76cm

1.64cm

7.20cm

8.43cm

Financials Mike Iddon, Group CFO

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5.12cm

0.76cm

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7.20cm

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We have benefitted from positive momentum in Merchandise,

reinforced by continued high growth in Services

£m H1 FY17 H1 FY18 Change

Group

Total 441.3 468.0 6.0%

Like-for-like 2.5% 3.9%

Merchandise

Food 209.5 220.0 5.0%

Accessories 169.9 176.8 4.0%

Total 379.5 396.7 4.6%

Like-for-like 1.9% 3.1%

Services

Income from JV vet practices 24.1 28.0 16.1%

Other1 37.8 43.3 14.7%

Total 61.9 71.3 15.3%

Like-for-like 8.7% 9.5%

1. Includes revenue from wholly owned Group Venture vet practices & other veterinary income, including specialist referrals, grooming salons, live pet sales & insurance commission 6

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13.36cm 0.39cm 0.43cm 13.36cm

6.03cm

5.12cm

0.76cm

1.64cm

7.20cm

8.43cm

53.9%

51.9%

(229) bps 31 bps

(198) bps

Our reduction in gross margin is due to planned price investment

in Merchandise, offset by significant expansion in Services

Merchandise

H1 FY17 H1 FY18

57.5% 54.9%

Services

H1 FY17 H1 FY18

32.0% 35.8%

Growing Advanced

Nutrition and private label

Pricing actions

FX

Omnichannel sales with

higher food mix

First Opinion vets

Specialist Referral vets

Pet routines

Newer grooming salons

Group gross margin bridge

H1 FY17 H1 FY18

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14.8%

13.3%

Of which: FX

(74 bps)

We have achieved an EBITDA margin of 13.3%, with operational

leverage and cost savings helping to offset price investment

1. Exceptional items in H1 FY17 refer to £1.0m of exceptional costs related to the disposal of Farm Away Limited, the Group’s equestrian retailing business

2. Exceptional items in H1 FY18 refer to £1.0m non cash accounting treatment of minority stakes owned by vet partners in the specialist referral centres

Group EBITDA margin bridge

£62.2m2

(4.6%)

(198bps)

Operational

Leverage

Growth in

Omnichannel

Sales

Operational

Cost Savings

Group Gross

Margin

Movement

£65.2m1

(25 bps) 30 bps

45 bps

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5.12cm

0.76cm

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8.43cm

We have focussed on operational efficiency in the business,

which has enabled investment in future growth

Group Pre-Exceptional Operating Cost Bridge Excluding D&A, £m

m m

m

m

m

Operational Efficiency

Support Office1 Distribution Core Stores2 Omnichannel Vet Group New Stores3

4.7%

growth

Investing in Growth

0.2%

growth

£173.3m

£181.0m

£172.9m

1. Support office includes support centre and marketing

2. Core stores include all stores open as at 31 March 2016

3. New stores includes all stores opened since 1 April 2016

H1 FY17 H1 FY18

£0.2m £0.5m (£0.3m) £1.6m

£2.1m

£4.0m

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6.03cm

5.12cm

0.76cm

1.64cm

7.20cm

8.43cm

Our profit reflects the price investment in Retail and is in line with

expectations

1. Exceptional items in H1 FY17 refer to £1.0m of exceptional costs related to the disposal of Farm Away Limited, the Group’s equestrian retailing business

2. Exceptional items in H1 FY18 refer to £1.0m accounting charge for the acquisition of minority stakes owned by vet partners in the specialist referral centres

£m

H1 FY17 H1 FY18 Change

Pre-exceptional EBITDA 65.2 1 62.2 2 (4.6%)

Margin 14.8% 13.3% (148) bps

Depreciation & amortisation (15.4) (18.0) 16.8%

Net interest (2.7) (2.4) (12.9%)

Pre-exceptional PBT 47.0 41.7 (11.2%)

Effective tax rate 21% 20% NM

Pre-exceptional basic EPS (pence) 7.4 6.7 (10.0%)

DPS (pence) 2.5 2.5 NM

Exceptional items (1.0) (1.0) NM

Statutory PBT 46.0 40.8 (11.3%)

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6.03cm

5.12cm

0.76cm

1.64cm

7.20cm

8.43cm

Our capital investment is focused on strategic growth areas,

including Services rollout and Omnichannel development

Returns on capital H1 FY17 H1 FY18

CROIC1 21.3% 19.4%

£m

H1 FY17 H1 FY18

New stores 3.3 5.0

Refurbishment and retrofit of services into store estate 7.5 7.5

Business Systems and Omnichannel 2.8 4.8

Other Vet Group including Specialist Referrals 1.9 2.5

Distribution 0.6 0.7

Energy savings programme 3.6 2.2

Other 1.2 1.3

Total 20.9 24.0

Exceptional project

which totalled £8m

and is now complete

Systems upgrades

and website

enhancements

1. Definition contained within the appendix

Timing of capital

investment earlier

this year

Specialist referral

capacity expansion

7 Services retrofits

and 5 store refurbs

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5.12cm

0.76cm

1.64cm

7.20cm

8.43cm

We remain efficient in our management of trading working

capital, whilst providing support to underpin vet practice growth

£m H1 FY17

movement

H1 FY18

movement

Inventories (7.7) (6.8)

Trade payables, other payables and provisions 13.0 10.6

Trade and other receivables 3.2 4.5

Trading working capital 8.4 8.4

Operating loans to Joint Venture vet practices (5.8) (8.1)

Group cash working capital movement 2.6 0.3

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6.03cm

5.12cm

0.76cm

1.64cm

7.20cm

8.43cm

The movement in free cashflow is due to our planned investment

in both the retail business and in working capital

1. Includes provisions movement

£m H1 FY17 H1 FY18 Change

EBITDA 65.2 62.2 (4.6%)

Non-Cash Share Based Payment Charges 1.7 2.3 37.2%

Cash EBITDA 66.9 64.5 (3.6%)

Working capital1 2.6 0.3 NM

Operating cashflow 69.5 64.8 (6.8%)

Tax (8.6) (9.7) 13.0%

Interest cost (2.5) (2.2) (8.4%)

Capex (24.0) (25.8) 6.7%

Purchase of own shares to satisfy colleague options - (4.0) NM

Free cashflow 34.4 23.2 (32.7%)

Conversion 51.4% 35.9% NM

Leverage (ND:EBITDA) 1.3x 1.2x NM

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6.03cm

5.12cm

0.76cm

1.64cm

7.20cm

8.43cm H1 FY17 H1 FY18

£65.2m £62.2m

£468.0m

In summary: we are delivering our key financial metrics in line

with our expectations for this financial year

Basic pre-exceptional EPS & Dividend Per Share

Revenue & Like-For-Like Growth

2.5% 3.9%

Pre-exceptional EBITDA & Margin

Free cashflow & Conversion

14.8% 13.3%

2.5p 2.5p

£441.3m

Interim

Dividend

maintained 7.4p

6.7p

£34.4m

£23.2m

36% 51%

H1 FY17 H1 FY18 H1 FY17 H1 FY18

H1 FY17 H1 FY18 14

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5.12cm

0.76cm

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8.43cm

FY20 onwards

Services maturity

benefits evident

FY19

Transition to

Group profit growth

Looking ahead: our three year transition to deliver future profit

growth is on track

15

FY18

Reposition the Merchandise

business

On track to deliver profits in line with

market expectations

Updates to financial guidance

Price investment plans

accelerated – Group gross

margin guidance dilution 200-

250 bps

Operating cost growth 6-6.5%

(excluding D&A) as we see

higher overall sales growth and

invest in omnichannel

Through the majority of price

repositioning

Annualisation of FY18 investment

Further investment in selected

areas

Targeting Merchandise LFL above

market levels and taking share

Vet Group delivering ongoing high

profit growth

Continued operational cost savings

action

Continued above market growth

in Merchandise

Group operating margin

expansion evident and supported

by Vet Group maturation

Group profit growth at high single

digit levels

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13.36cm 0.39cm 0.43cm 13.36cm

6.03cm

5.12cm

0.76cm

1.64cm

7.20cm

8.43cm

Strategic update Ian Kellett, Group CEO

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7.20cm

8.43cm

Merchandise trading momentum is the result of multiple initiatives;

omnichannel developments, accessories innovation and pricing

Customer are seeking value, choice, innovation and convenience

Note: Q3 FY17 and Q4 FY17 both adjusted to reflect equal numbers of trading days compared with the prior year period

-0.5%

0.5%

1.5%

5.1%

Q3 FY17 Q4 FY17 Q1 FY18 Q2 FY18

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H1 FY17 H1 FY18

Pricing initiatives are driving strong Advanced Nutrition volume

growth and private labels are increasing their participation

Advanced Nutrition revenues Private label volume1 participation within

Advanced Nutrition

Total AN Revenue

£99.0m Total AN Revenue

£94.6m

Volumes1

+8.9%

Revenue

+4.6%

Participation

+6.4 ppts

H1 FY17 H1 FY18

1. Definition of volume is tonnes

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Around 30% of customers who have purchased our lower priced

dog Advanced Nutrition are considered incremental

Classification of VIP customers

who have purchased lower priced Advanced Nutrition lines

New customer

Customer who has not shopped with

PAH for >12 months

Existing shopper new to AN (i.e.

previously purchased economy food

or did not buy food at PAH)

30%

70%

Existing customers where …

Purchasing habits are unchanged

Switching AN brands

Trading up to larger bag sizes

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Pricing action has been focused on private labels and key dog food

brands. We now have plans to accelerate our investment

Accelerating FY19 investment plans into FY18

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H1 FY17 H1 FY18

Omnichannel revenue growth of 81% has been driven by new

initiatives: Order in-store and subscription for flea products

£24m

£13m

81%

60% of omnichannel

revenues involve

either a colleague

assisted sale or are

collected in-store

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We have recently simplified and improved the online checkout

experience with a focus on mobile devices first

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Range change and innovation in accessories has also been a

key driver of Merchandise trading

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Innovation is not restricted to accessories – we continue to grow

the Advanced Nutrition market by introducing new segments

Baked recipes have a protected nutritional content and greater flavour

Private label:

Our Wainwright’s range has been expanded

with a baked range to promote healthy skin and

coats

Branded:

Nineteen 87 is a premium dog food baked with

natural and ingredients with British provenance

from St Asaph's, Wales

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Our campaign to improve awareness around the ingredients in

dog foods is improving our reputation as a trusted advisor

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Our new VIP Puppy Club is designed to maximise the benefits of

our integrated product and services offer, creating long term loyalty

10% off your first puppy shop

Free bag of food with a nutrition

consultation

First month free on subscription

to flea prevention products

Free puppy groom

Free nurse check at our vet

practices

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We have scale in our grooming business with over 300 salons,

where we are focused on driving utilisation & operational efficiency

Drive revenue

per hour spent

grooming

Increase colleague

utilisation

(currently 50-60%)

Maximise colleague

time spent

grooming

Manage colleague

salon hours

Integrate store

and grooming

operations

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A national brand in our First Opinion veterinary business allows

us to leverage marketing campaigns to best effect

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The profit potential in our Vet Group is significant and will be

delivered through maturation and further rollout

FY17a Current Vet Group (438practices, 4 referral centres)

MATURE Current Vet Group(438 practices, 4 referral

centres)

MATURE Full UK rollout VetGroup (700 practices, 4 referral

centres)

MATURE Full UK rollout VetGroup (1000 practices, 4

referral centres)

FY17a Current Vet Group

438 practices, 4 referral centres

Mature Current Vet Group2

438 practices, 4 referral centres

Mature 700 rollout Vet Group,3

700 practices, 4 referral centres

Mature 1000 rollout Vet Group3

1000 practices, 4 referral centres

1. Mature fee income forecasts for first opinion practices are based upon those for FY17 cohorts aged 10+years – with c1% inflation per annum. EBITDA does not include any central cost

allocation for the Executive Management team or Pets at Home Group Head Office support. Referral centre revenue and EBITDA is assumed to remain flat from FY17 actuals

2. EBITDA to PAH assumes no additional colleagues required at Vet Group Support Office to support the existing practice base. Colleague costs are inflated at c5% per annum

3. EBITDA to PAH assumes additional colleagues are required at Vet Group Support Office to support new practice openings. New and existing colleague costs are inflated at c5% per

annum

EBITDA1 to Pets at Home from the Vet Group

c2x

Today

Today

>3x

Today

c5x

Today

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Our Vet Graduate programme is vital to growing our own talent

Two year Vet Graduate Development programme

Permanent full time role in a JV practice

Paid leave to complete CPD

Mentorship from the Joint Venture Partner and

Support Office colleagues

Potential to consider JV Partnership at the end of

the programme

70 graduates have joined the scheme in 2017

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Why we are better together: our unique business model with

integrated products and services drives higher customer spend

Participation of customer numbers Participation of customer spend

VIP members purchasing both product and a service (vet or grooming)

VIPs purchasing product and a service

VIPs purchasing product only

14%

32%

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Evolving our strategy to adapt to customers’ needs will deliver

market share gains in a competitive environment

FY18 profit outlook in line with expectations – investing significantly to improve our

competitive position

Accelerating the repositioning of our Merchandise business

Focused on delivering the profit potential of our veterinary business

Focus on taking market share and leveraging the unique attributes of Pets at Home

Ability to become our customers’ lifetime pet partner, more than just a pet shop

Integrated omnichannel capabilities

Private labels

Services; veterinary, grooming, nutrition

Expertise and advice from colleagues and veterinary professionals

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13.36cm 0.39cm 0.43cm 13.36cm

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1.64cm

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8.43cm

Appendix

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Financial definitions

‘Like-for-Like’ sales growth comprises total revenue in a financial period compared to revenue achieved in a

prior period, for stores, online operations, grooming salons, vet practices & referral centres that have been

trading for 52 weeks or more.

EBITDA being Earnings before interest, tax, depreciation & amortization before the effect of exceptional items

in the period.

Free Cash flow being net cash from operating activities, after tax, less net cash used in investing activities

(excluding acquisitions), less interest paid & debt issue costs, and is stated before cash flows for exceptional

costs.

CROIC being Cash Return on Invested Capital, represents cash returns divided by the average of gross capital

invested (GCI) for the last twelve months. Cash returns represent pre-exceptional operating profit before

property rentals and share based payments subject to tax then adjusted for 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 capitalised rent

multiplied by a factor of 8x.

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Rollout of around 10 superstores, 40-50 vet practices and 20-30 grooming salons

Group gross margin down 200-250 bps

Operational cost growth (excluding depreciation and amortisation) of 6-6.5%

Depreciation and amortisation £34–35m

Net interest £4-5m

Effective tax rate 20%

Capital investment c£40-42m

Working capital outflow of around £5m to support vet practice growth

Ordinary dividend payment maintained at least at the prior year level

FY18 guidance

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64

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13.36cm 0.39cm 0.43cm 13.36cm

6.03cm

5.12cm

0.76cm

1.64cm

7.20cm

8.43cm

Our priorities for use of cash remain focused on growth

opportunities

Strong balance sheet

Leverage policy up to 1.5x ND:EBITDA, extending up to c1.75x for appropriate acquisitions

Organic investment

Ongoing programme currently

focused on rollout & omnichannel

strategies

Progressive dividend

Ordinary dividend policy around

50% of earnings

Invest for growth

Disciplined bolt-ons or investment

in-line with strategy, aim to deliver

returns ahead of our WACC1

Further shareholder returns

Surplus FCF returned

1. Weighted Average Cost of Capital

36