Strategy Day

19 March 2010 - PR 27/09

Strictly embargoed

For release at 0700 hours

DSG international plc

RENEWAL AND TRANSFORMATION PLAN ON TRACK

DSG international plc, one of Europe's largest specialist electrical retailers, is today hosting Investors, Analysts and Media at its West Thurrock Megastore to provide an update on its Renewal and Transformation Plan.

The last twelve months have seen continued intense activity progressing the five point Renewal & Transformation Plan:

·; Renewal & Transformation plan on track delivering higher customer satisfaction, improved shopping experience and continued gross profit uplifts

·; Portfolio Review complete with 152 stores exited across the Group

·; Gross profit uplifts of new format stores remains very encouraging, up 20% on average

·; Early indications are that second year trading in reformatted stores remains strong

·; Megastore and 2-in-1 store roll out to be accelerated

·; 70 Megastore locations identified in the UK - 33 to be open ready for Christmas 2010

·; 60 2-in-1 stores to be opened this year giving customers the best of both brands in one convenient location

·; E-merchant technology rolled out to UK internet sites, delivering further opportunities to leverage scale of multichannel operations.

·; £200 million cost savings programme on track

·; Stock and working capital initiatives driving higher availability and stock turn

John Browett, Chief Executive, commented:

"The Renewal & Transformation plan is making significant changes to the Group and we have started to see the benefits of this work. The new store formats are popular with customers, particularly the Megastores and the combined 2-in-1 stores. The next twelve months will be another busy period as we roll out the improved proposition and introduce more services to more of our customers with an unbeatable combination of value, choice and service."

Renewal & Transformation update

DSGi is making significant progress on delivering on its five point Renewal & Transformation Plan. The primary purpose of today's store visit is to tour the Group's Currys Megastore in West Thurrock - the largest electrical store in the UK - as well as to provide an update on the Renewal & Transformation plan.

Portfolio Review Complete

Since announcing a portfolio review in May 2008, the Group has completed the review with the disposal of operations in Hungary and Poland, the closure of Markantalo in Finland and PC City in Sweden. In addition a number of underperforming stores have been closed in Italy, Spain, and the UK High Street operation of CurrysDigital. In total the Group has exited 152 stores across Europe since May 2008. The Group is now focused on its core operations in the UK & Ireland, the Nordics, Italy, Greece, Spain, Czech, Slovakia and Turkey as well as its pure play internet operations of PIXmania across Europe and Dixons.co.uk in the UK.

UK Transformation

The primary focus of today's update will be the ongoing transformation of the UK & Ireland business. Customers from over 24 million households in the UK shop in DSGi stores or online providing a rich database to inform decisions and drive our customer focus in improving ranges, store formats, after sales help and services and in improving the overall shopping trip for customers. In the last 18 months over 20,000 colleagues have participated in the Group's training programmes to improve their product knowledge and service for customers. Results from regular exit surveys show that customers recognise the improvements being made.

The store transformation programme is progressing well. 139 stores, representing one third of total UK & Ireland sales, have now been reformatted. Management estimate that the transformation work benefited like for like performance over the Christmas Peak trading period by approximately 3%.

The Group has also been implementing those parts of the store transformation to existing stores across the portfolio that improves the shopping trip for customers but require little or no additional expenditure. As a result these stores have already benefitted from the improved ranges, colleague training, and enhanced after sales help and support. Management estimate that this has improved the like for like performance of the un-reformatted stores by between 3% to 5%.

Underlying stores have improved their relative performance to the wider market, while the transformed stores have also continued to show excellent results with gross profit uplift of 20% on average for the 24 week period to 6 March 2010. Particularly strong uplifts continue to be delivered by the Megastores and combined 2-in-1 stores. A small number of stores (17 across the various formats), are now entering into their second year since transformation and early indications are that second year trading remains strong.

Reformatting for 2010/11

Having traded the new format stores through the important Peak period the Group is now in a better position to determine the store transformation programme for the next 12 months. The Megastore and combined 2-in-1 formats are proving to be particularly popular with customers and the Group has identified 70 locations for this format. Of these 60 are being developed using existing stores in the portfolio with the remainder resulting in the relocation of existing stores. Combined 2-in-1 format stores can be similarly created from within the existing portfolio. With limited overlap between the PC World and Currys customer demographic the combined 2-in-1 stores provide access to the PC World brand in existing Currys markets.

In the UK & Ireland the Group expects to refurbish approximately 100 stores during the 2010/11 financial year, with the majority to be completed before Christmas 2010, as follows:-

·; 25 new Megastores will open, taking the total in the UK to 33 Megastores;

·; 60 combined 2-in-1 Currys and PC World Stores;

·; 12 Currys and PC World standalone superstores; and

·; 3 CurrysDigital stores.

Across Europe the Group will refurbish existing stores and open more Megastores in the Nordics, Greece and Italy.

Opportunity on the Internet

DSGi generates approximately £1.4 billion of annual sales through the internet across Europe. The Group has rolled out the e-merchant platform to its UK internet sites of Dixons.co.uk, PC World.co.uk and Currys.co.uk. This platform, operated by PIXmania, provides improved functionality, easier navigation for customers, better product information and accessory attachment.

The internet operations benefit from, and complement, the multi-channel operations. DSGi, as one of Europe's largest electrical specialist retailers can exploit its scale efficiencies to provide customers with choices, whether online, in store or a combination of both.

Working Capital Management and Cost Savings

Improvements to stock and working capital continue with availability on core lines remaining at the highest levels seen for a number of years and stock turn up 10%.

The Group remains on track to deliver £50 million of cost savings in the current financial year to 1 May 2010 and a further £150million over the following 3 years.

For further information:

Investor relations

David Lloyd-Seed Group Communications Director, DSGi 01727 205 065

Media

Mark Webb Head of Media Relations, DSGi 01727 205 019

Laura Cummings/Graham Biggart Brunswick Group 020 7404 5959

Information on DSG international plc is available at http://www.dsgiplc.com

A video webcast of the presentation being held this morning will be available from 2.00pm today at http://www.dsgiplc.com/webcast10

NOTES

(1) Certain statements made in this announcement are forward looking statements. Such statements are based on current expectations and are subject to a number of risks and uncertainties that could cause actual results to differ materially from any expected future events or results referred to in these forward looking statements. Unless otherwise required by applicable laws, regulations or accounting standards, we do not undertake any obligation to update or revise any forward looking statements, whether as a result of new information, future developments or otherwise.