Forward-looking statementsThis presentation contains certain forward-looking statements with respect to the financial condition, results of

operations, and businesses of Card Factory plc. These statements and forecasts involve risk, uncertainty and

assumptions because they relate to events and depend upon circumstances that will occur in the future. There

are a number of factors that could cause actual results or developments to differ materially from those

expressed or implied by these forward-looking statements. These forward-looking statements are made only

as at the date of this presentation. Nothing in this presentation should be construed as a profit

forecast. Except as required by law, Card Factory plc has no obligation to update the forward-looking

statements or to correct any inaccuracies therein.

The financial information in this presentation does not contain sufficient detail to allow a full understanding of

the results of Card Factory plc. For more detailed information, please see the preliminary results

announcement for the year ended 31 January 2019 which can be found at www.cardfactoryinvestors.com.

Agenda

• Introduction & key messages Karen Hubbard (CEO)

• Financial review Kris Lee (CFO)

• Strategy update Karen Hubbard (CEO)

• In summary Karen Hubbard (CEO)

• Outlook

• Questions

• Card Factory grew market share in terms of both volume & value in the stable card market

• Achieved flat LFL sales despite the High Street footfall decline

• Strong seasonal card and non card performance underpinned by our innovation and design

• Extended our store footprint by opening 51 net new stores and tested new markets and formats through 3rd party partnerships

• Generating strong levels of cash with robust returns to shareholders

Financial highlights

FY19 FY18 Year-on-year change

Revenue £436.0m £422.1m 3.3%

Card Factory LFL growth

Store LFL growth

(0.1%)

(0.5%)

+2.9%

+2.6%

EBITDA £89.4m £94.0m (4.9%)

Margin 20.5% 22.3% (1.8ppts)

Profit before tax £74.6m £80.5m (7.3%)

Earnings per share 17.6p 18.9p (7.1%)

Total ordinary dividend per share (2) 9.3p 9.3p -

Dividend cover 1.89 x 2.03 x

Special dividend 5.0p / £17.1m 15.0p/£51.2m

Net debt (3) £141.3m £161.3m

Leverage 1.58 x 1.72 x

1. All figures shown on an

underlying basis

2. Total FY19 ordinary

dividend includes

recommended 6.4p final

dividend, subject to AGM

approval

3. Net debt excludes debt

issue costs

Robust performance in a challenging consumer environment

Divisional performanceStrong growth in core business impacted by high street footfall decline and NLW

1. All figures shown on an underlying basis

2. Card Factory includes both stores and online

FY19 FY18 Y/Y change

Revenue £419.7m £404.3m 3.8%

EBITDA £88.2m £91.1m (3.2%)

Margin 21.0% 22.5% (1.5ppts)

Revenue £16.3m £17.8m (8.4%)

EBITDA £1.2m £2.9m (58.6%)

Margin 7.4% 16.4% (9.0ppts)

Sales mix – Card Factory storesResilient card sales and success in growing complementary non-card product

53.7%44.0%

2.3%

53.1%44.6%

2.3%

Single cards Christmas Box cardsNon-card items

FY18 Sales MixFY19 Sales Mix

Note: Mix shown for Card Factory stores only 9

Underlying EBITDA bridgeGrowth of 2% excluding headwinds

Best-in-class marginsContinued focus on low cost business model

FY19 % of revenue FY18 % of revenue % of revenue

Movement

Cost of goods sold £142.1m 32.6% £138.0m 32.7% 0.1ppt

Store Wages £80.8m 18.5% £74.9m 17.7% (0.8ppt)

Store Property Costs £68.3m 15.7% £65.5m 15.5% (0.2ppt)

Other Direct expenses £21.3m 4.9% £18.6m 4.4% (0.5ppt)

Cost of Sales £312.5m 71.7% £297.0m 70.3% (1.4ppts)

Operating expenses £34.1m 7.8% £31.1m 7.4% (0.4ppts)

EBITDA £89.4m 20.5% £94.0m 22.3% (1.8ppts)

Strong cash generationTrack record of generating significant surplus cash

FY19

£’m

FY18

£’m

Y/Y

Change

Underlying EBITDA 89.4 94.0 (4.9%)

Non-underlying FX gain/(loss) 4.2 (7.6)

FX hedging reserve cash gain/(loss) - (3.4)

Loss on disposal and share-based payment accrual 0.7 (0.2)

Operating cash flow before working capital 94.3 82.8 13.9%

Net working capital movement (1) 4.8 6.9

Corporation tax (13.4) (17.0)

Net capital expenditure (11.9) (13.1)

Net interest paid (3.4) (2.6)

Free cash flow 70.4 57.0 23.5%

1. Including favourable short-term working capital timing difference

CapexLow, predictable and well controlled

⚫ FY19 spend

– Lower than the £14m guidance principally due to timing of

investment in vertical supply chain integration

⚫ Capex remains low as a proportion of operating cash flow

⚫ FY20 guidance - circa £18m, including:

– further investment in vertical supply chain integration;

– commercial initiatives;

– supply chain technology; and

– replatforming cardfactory.co.uk

FY19

£’m

FY18

£’m

One-off strategic projects

Vertical integration 1.7 -

EPOS/BI 1.3 4.3

Commercial initiatives 1.3 -

LED lighting - 0.9

Online personalisation 0.2 0.3

Other 0.2 0.1

4.7 5.6

Recurring

New Stores 3.7 3.6

Refurbs 0.5 -

Relocations 0.7 0.4

Other capex 2.5 3.5

7.4 7.5

Total CAPEX 12.1 13.1

Capital policy

The Board aims to maintain a capital structure that is conservative yet efficient in terms of providing returns to

shareholders. In considering such returns, the Board will review, inter alia, trading and market conditions, expected

cash generation and expected leverage.

• Our policy is to maintain year-end net debt in the range of 1.0 to 2.0x EBITDA

• Over the short-to-medium term, we are targeting year end net debt of 1.7x EBITDA

• Subject to the above considerations, surplus cash will be returned to shareholders annually via a special dividend

FY19

£’m

FY18

£’m

FY17

£’m

Free cash flow 70.4 57.0 68.8

Dividends paid (48.9) (82.9) (81.1)

Proceeds from new shares issued - 0.3 0.3

Debt issue costs (1.5) - -

Net debt movement 20.0 (25.6) (12.0)

EBITDA leverage (at year-end) 1.58 1.72 1.37

Remains unchanged

Dividends

2.3 2.5 2.8 2.9 2.9

15.0 15.0 15.0

5.04.5

6.0 6.3 6.4

6.4

FY15 FY16 FY17 FY18 FY19

Dividends(pence per share)

Interim Special Final

• Special dividend

• 5.0 pence per share

• Cash return of £17.1m from organic cash generation

• Paid on 14 December 2018 to those on register on 9

November 2018

• Interim ordinary dividend

• 2.9 pence per share

• Paid on 14 December 2018 to those on register on 9

November 2018

• Total cash returns since May 2014 IPO

• Including recommended final dividend of 6.4 pence per

share:

• 93.0 pence per share and over £317m in aggregate

• Equivalent to over 41% of IPO issue price

IFRS 16 LeasesNo cash impact and limited impact on EPS All £’m (unless otherwise stated) Estimated

Impact

* Outcome

Range (+/-)

Restatement of Financial Position (as at 31 Jan 2018)

IFRS 16 right-of-use assets 127 10

IFRS 16 lease liabilities (145) 10

Net IFRS 16 lease recognition (18) 3

Remove operating lease related prepayments and accruals 6 1

Impact on net assets as at 31 January 2018 (12) 3

Restatement of Income Statement (FY19)

Remove operating lease charges (EBITDA increase) 43 1

Replace with IFRS 16 depreciation and finance charge (41) 1

FY19 PBT increase under IFRS 16 versus IAS 17 2 1

Current estimate of adjusted FY19 UL EBITDA (vs. £89.4m) 132.4 (+48%) 1

Current estimate of adjusted FY19 UL PBT (vs. £74.6m) 76.6 (+3%) 1

Current estimate of adjusted FY19 UL EPS (vs. 17.6p) 18.1p (+3%) 0.2p

• Operating leases represented by a fixed

(“right-of-use”) asset with corresponding

lease liability (notional debt)

• P&L operating lease expense replaced by

asset depreciation and notional interest

charge in relation to the lease liability

• The Group intends to apply a full

retrospective application and currently

anticipates the approximate impact to be

as presented (table to right)

* All numbers remain subject to further developments in

application practice, refinement of assumptions, further

detailed review and audit – accordingly an outcome range is

presented

FY20 guidance

⚫ LFL sales Target is to maintain LFL sales despite expected high street footfall decline

⚫ New store openings Targeting 50 net new store openings in the UK and ROI

⚫ Business efficiencies Plans in place to mitigate industry-wide cost pressures, from NLW in particular

⚫ Online Further growth expected in CF Online

Four pillars of growth

Other

⚫ Operating margins Profits expected to be broadly in line with FY19, based on delivering management’s sales forecast, margin mix assumptions, identified

business efficiencies and assuming limited adverse currency movement

⚫ Capex FY20 capex of c£18m – including further investment in vertical integration, warehouse technology and replatforming of cardfactory.co.uk

⚫ Leverage* FY20 year-end Leverage expected to be in line with short-to-medium term year-end target of c1.7x EBITDA

⚫ Special dividend A further return is currently expected to be made towards the end of FY20 - any such dividend will be dependent on trading and other

developments in the period from now until the time of the FY20 interim results

* excluding the effects of IFRS 16 Leases

Headwinds easing

Financial performance summary

Strong profit

margins

Revenue

growth

Surplus cash

returns

Highly cash

generative

• The Card Market remains resilient with single card volume in slight decline, with value broadly flat

• Card Factory continued to grow value & volume share, gaining from both the grocers, discounters and other High Street stores

• Card Factory has 32.4% share by volume and 19.3% share by value

• The online channel continues to grow (+c10% pa) and now accounts for 4.6% of singles greeting card volumes

35

40

45

50

55

60

65

70

75

80

85

90

95

2014 2015 2016 2017 2018

I would always bring a birthday

card to a friend’s birthday party

I always send Christmas cards

to all my friends and family

I would always give my child a card

to take to their friend’s birthday

If I am attending a wedding I

will always bring a card

I always send a Valentine card

to my significant other

I will always send a card to

celebrate a friend’s achievement

(e.g. driving test, graduating...)

Drivers Of Market Growth Consumer Survey

Source: OC&C Online Consumer Surveys (2012-19), OC&C analysis

Customer Attitudes and Purchasing Behaviour

Attitudes to Card Purchasing by Occasion1,2

Card Buyers by Usage of Digital Greetings1

(% of Total Card Buyers)

19%

2015

18%

2016

6%

78%

2017

Replace Physical Card

With Digital Alternative

20%

Use Digital Greetings But Not As

Replacement For Physical Card

Don’t Use Digital Greetings

100%

16%23%

64%

14%

2014

18%

100% 100% 100%

9%

71%

2018

62%

100%

51%

31%

4.24.0

4.0

2.03.2 3.4 3.6 3.8 4.6

3.5

4.4

2.5

4.8

3.0

4.5

5.0

Wilko’s

Price1

Card Factory

Hallmark

99p Store

Cards Galore

Morrisons

Paperchase

Clintons

Asda

Simply Clintons

Card Market

WH Smith

B&M Bargains

Co-op

M&S

Sainsbury’s

Tesco

AldiPoundland

Home Bargains

Post Office

Quality1

Waitrose

Consumer Perceptions of Greeting Cards Value for Money - 20191,2

Average Rating On Scale 1-5

Str

on

ge

r P

erc

ep

tio

n o

f L

ow

Pri

ce

Stronger Perception of Quality

Source: OC&C Consumer Survey (February 2019), OC&C analysis

1% 1% 1% 2%

2017

Online Only

2018

41%

2019

40% Cross-Channel

59%

100

58%

37%

In-Store Only

100

39%

62%

2016

100

58%

100

Source: OC&C Consumer Survey 2016,2017, 2018, 2019, OC&C analysis

Online Penetration and Purchase Channel

Online penetration estimated

from volumes of known players

and survey market shares

Based on online survey, therefore likely to

be skewed towards online shoppers

Respondent Purchase Channel, 2016-19

(% Respondents)1

Estimated Online Penetration, 2015-17

(% Volume)

Weighted by SCV

2.5%

0.8%

2015 2016

1.0%

2.6% 2.8%

4.6%

1.4%3.3%

2017

1.6%

3.0%

Non-Personalised

2018

Personalised

3.7%

4.2%+0.4%

+0.5%

+0.4%

6.7%

17.1%

40.0%

3.6%

0.9%

5.2%

20.2%

42.7%

5.7%

2.1%

12.5%

13.6%

34.9%

6.5%

3.0%

8.1%

12.9%

32.4%

n/a

Funkypigeon.com

Card Factory

Supermarkets1

Moonpig.com

Amazon

2017

2015

2016

2018

Online Retailer Market Shares

% Volume

Card Factory based on known volumes.

Other retailers based on online survey

FY19 Like for Like Sales

Overall LFL -0.1%

Store LFL -0.5%

Further improvements in

card ranges and design

including new ED premium

Strong performance in

seasonal cards

Continued growth in

average basket value

Competitive quality and

price position maintained

FY19 New Store Roll Out

972 trading stores

51 net new stores opened

First franchise store

opened in Jersey

Strong pipeline of new

store opportunities

FY19 Business Efficiencies

EBITDA margins of 20.5%

Improved vertical integration

Targeted cost efficiencies &

buying margin achieved

Significant savings in

warehouse and supply chain

Tasks removed in store

making it “Easier for

Colleagues”, “Best for

Customers”, Labour savings

FY19 Online Development

Cardfactory.co.uk sales

increased by 56.3%

Growth from new customers on

products not sold in stores

Profit contributor to the Group

Gettingpersonal.co.uk sales

decline

Customer Acquisition &

Discount impact on EBITDA

FY20 Like for Like

Design & Innovation in

Everyday card ranges,

introducing Premium ranges:

• Age cards

• Misc. & New “Occasions”

• Open cards

Innovation in complementary

gifting & party ranges

Continual enhancement of

retail disciplines

EPOS data ensuring better

ranging decisions

FY20 New Store Roll Out

FY20 strong pipeline for 50

net new stores

Continual opening on retail

parks

Further stores in Republic of

Ireland

Regular review of estate for

relocations, extensions &

closures to locate where the

customers shop

FY20 Business Efficiencies

Repatriate card

manufacturing from Far

East to Printcraft

Install & commission new

manufacturing equipment

to reduce card production

costs

Testing of new production

techniques

Efficient planning of People:

right time, right place with a

Time & Attendance System

Removing tasks,

simplifying processes –

focus on customers

Replenishment – efficient

and improved availability

with Auto Replenishment

in stores

Introduction of

Voice picking

Warehouse consolidation

Productivity

improvements in

Warehouse & Logistics

Targeted rent savings at

renewals

Loss Prevention

targeting Stock & Cash

Loss

Ongoing focus on

operating cost reduction

Stronger supplier

management

Better buying and

sourcing

Better stock

Management

FY20 Online Development

FY20 – Online Development

• Everyday vs Seasonal

• New categories and

ranges

• GP mobile site

• Customer retention

Apple and Google pay

• International

• Amazon

• Getting Personal

Business

• New marketing

channels

Non Branded Impulse Card Units Branded Card Factory Concessions

Franchised Locations

International Concessions

• Confident that we will continue to grow Card Factory’s Market Share

• Continuing to innovate new and unique designs offering Quality & Value

• Online represents a significant opportunity and will be developed through a new platform and growth of our multi-channel offer

• We are exploring opportunities to extend our reach beyond 1,200 stores both in the UK and Internationally

• Our targeted Business Efficiency programme continues to deliver and we have identified ongoing opportunities in a multi-year programme

• We have had a satisfactory start to the new year with good performances in both Valentine’s & Mother’s Day

• FY20 outlook is for a broadly flat EBITDA based on a challenging consumer market

• Currently expect to announce Special dividend payment at interims

• Card Factory future growth strategy will be shared at a Capital Markets Day later in the year

914

437

2013

920 932

2014

387

902923

2015

365

907

411343

2017

Boxed

1,343

Singles

2012

464

1,379 1,3571,311

1,271 1,245

2016

1.3%

-2.0%

-2.5%

95

2013

110

1,3301,277

Boxed

1,3141,285

2012 2014

89

1,325

2015

Singles

1,387 1,386 1,409 1,414

2016 2017

1,412 1,409

1,328

84 79101

0.8%

0.3%

0.0%

2012-17

-6.3%

-0.3%

-5.9%

0.8%

2016-17

-5.9%

-0.5%

-5.9%

0.1%

UK Greetings Card Market Value (£m)Market Volume (Millions Cards)

Total UK Greetings Card Market Evolution, 2012-161

CAGR

CAGR

Source: GCA, Management Data, UK Trade Data, OC&C Consumer Surveys (2012-19), Kantar, Nielson, OC&C analysis

2012-17 2016-17

Market size restated versus last

year due to restated Kantar data

31.8% 32.0% 32.5% 31.9%

31.5% 32.1% 31.7% 32.4%

6.0% 5.8% 5.4% 5.3%

27.9% 27.0% 27.0% 26.8%

2015

2.2% 2.3%1.8%

2014

1.1%2.0%

1.1%

2016

1.1% 1.2%

2017

Other High Street

(Incl. discounters)

Online

Specialists

Paperchase

Clintons

Card Factory

Grocers

Historical Data Restated Given Kantar Revisions - Bottom Up View

Single Greeting Cards – Volume

(% Total)

14-17

Singles Greetings Cards Channel Share Evolution, 2014-17

37.9% 38.3% 38.7% 37.9%

17.8% 18.4% 18.9% 19.3%

10.1% 9.9% 9.4% 9.2%

4.8% 5.5% 6.1% 6.6%

27.7% 26.2% 25.0% 24.9%

1.8%1.8%

20162014

1.7%

2015

Other High Street

(incl. Discounters)

2.0%

2017

Online

Specialists

Paperchase

Clinton Cards

Card Factory

Grocers

Single Greet Cards – Value

(% Total)

4.2%

-5.0%

-2.4%

-0.2%

-0.9%

16-17

7.5%

1.6%

-2.3%

% Change

8.7% 5.1%

14-17

-3.0%

16-17

-0.2%

% Change

Source: GCA, Management Data, UK Trade Data, OC&C Consumer Surveys (2012-19), Kantar, Nielson, OC&C analysis

-1.3%

-2.1%6.8%

-2.8%

3.2%

0.5%

10.2%

2.2%

-2.0%

11.7% 8.2%

-2.1%