NEXCOMEUROPE DISTRICT

DeCA / ALA CONFERENCE HEIDELBERG, GERMANY

4 – 8 AUGUST 2008

SANTE CAMPANILE, DVPNEX EUROPE

BRIAN THOMAS, DISTRICT OPS MGR

3

Navy Exchange Service Command

• Delight our customers in all we do

• Take care of our Associates, both today and tomorrow

• Perform to our financial plan, and seek ways to improve our bottom line

• Embrace new IT systems, while continually improving business processes

• Pursue collaborative efforts within Navy, and other Exchanges and DeCA

We are a Combat Readiness Multiplier!

Commander’s Intent

NEX and MWR

Retail Sales OutletsFood Service OperationsFranchises / ConcessionsPackage StoresVideo RentalPersonal

Telecommunications/Calling CardsVending MachinesNavy Lodges

Recreational FacilitiesClub / MessesFood Service Operations

at Recreational Facilities

Child Development Centers

Travel ServicesCarnivals, CircusesHobby shops

Defined Areas of Responsibilities…OPNAV Instruction 1700.79

Working Together… NEX Provides Brand Name Concessions for MWR Navy Food Survey Cross Promotions…Joint Activities Joint Advertising

EUROPE DISTRICT STORES

NAPLES

ROTASIGONELLA

CAPODICHINO

MADRID

LISBON

BAHRAIN

DJIBOUTI

SOUDA BAY

ST. MAWGAN

MORON

GAETA

NEXMART

NAVY EXCHANGE

EUROPE DISTRICT STORESTOTAL EXCHANGE SALES

EUROPE DISTRICT $181.1M

FY ‘07NAPLES MAIN CAPODICHINOGAETAGRICIGNANO MMDEPOT

NAPLES COMPLEX 61.5M

SIGONELLA MAIN

SIGONELLA NAS II DEPOT

SIGONELLA COMPLEX 26.6M

ROTA MALLLISBONMADRIDMORON

DEPOT

ROTA COMPLEX 26.4M

BAHRAIN MAIN

BAHRAIN MMDEPOTDJIBOUTI

BAHRAIN COMPLEX 53.6M

SOUDA BAY 6.1M UK 2.0M

NEXCOMFINANCIAL HIGHLIGHTS

June 2008

RETAIL SALES TRENDS

FY05 FY06 FY07 Jun 08 WW +5.2 +6.1 +2.6 0.0

CONUS +6.7 +6.2 +0.9 (2.9)

OCONUS +2.4 +6.0 +6.2 +6.0

EUROPE (6.7) +2.3 +18.5 +13.6

RETAIL SALES TREND `08Complex FY07 JUN YTD Trend NAPLES $46.4 +14.3%

SIGONELLA $22.6 +13.4%

ROTA $22.6 +0.4%

SOUDA BAY $ 3.6 +28.5%

BAHRAIN $50.5 +29.6%

UK $.3 (6.3)%

NEX District Sales & Profits Year to Date June 2008

Total Sales Retail Gross Profit Exchange Operating Profit (EOP)Variance Variance Variance

Actual Plan $ % Actual Plan $ % Actual Plan $ %Districts:Tidewater 147,483 146,952 531 0.4 25,767 27,384 (1,617) -5.9 11,997 13,751 (1,755) -12.8Capital/Northeast 80,806 76,826 3,980 5.2 13,775 13,760 15 0.1 5,339 5,682 (342) -6.0Southeast 105,873 106,997 (1,124) -1.1 16,324 17,731 (1,407) -7.9 7,234 8,634 (1,400) -16.2MidSouth 95,130 93,228 1,902 2.0 14,225 14,998 (773) -5.2 5,352 5,687 (335) -5.9Western 215,293 202,632 12,662 6.2 30,125 31,130 (1,005) -3.2 20,694 21,113 (420) -2.0Northwest 80,408 82,739 (2,331) -2.8 14,228 15,074 (846) -5.6 5,824 6,336 (511) -8.1Hawaii 122,188 118,368 3,820 3.2 22,751 22,885 (134) -0.6 14,888 15,013 (126) -0.8Europe 82,029 75,442 6,587 8.7 15,297 14,676 621 4.2 2,596 2,633 (37) -1.4Guam 42,346 42,041 305 0.7 8,066 8,341 (276) -3.3 5,060 5,459 (398) -7.3Japan 75,825 75,433 392 0.5 13,731 13,702 29 0.2 9,565 10,814 (1,249) -11.5

Other:Uniform Support 11,419 7,020 4,398 62.7 2,133 1,633 500 30.6 1,891 1,413 478 33.8Miscellaneous 0 0 0 (153) 0 (153) (251) (742) 491 -66.2

Store Level 1,058,798 1,027,677 31,121 3.0 % 176,269 181,315 (5,046) -2.8 % 90,188 95,792 (5,603) -5.8 %

NEX Customer Segmentation © 2008 NEXCOM internal use only2

Millenials/Gen Y1982-

Gen X1963-1981

Boomers1946-1962

QUALITY OF LIFE PROGRAMS

ENEL

ADSL

TELECOM

TELEPASS

EURO/DOLLAR CONVERSION

OIL AND PROPANE DELIVERY

SCHOOL LUNCH PROGRAM

Credit Card Fees

FY06 FY07MWR Dividends $52M $55M

Credit Card Fees $26.5M $28.4M

Credit Card Fees

EUROPE FY07 FY06

1.34% 1.36%

VAR. 0.02%

$1,734.0

3

Navy Exchange Service Command

• Delight our customers in all we do

• Take care of our Associates, both today and tomorrow

• Perform to our financial plan, and seek ways to improve our bottom line

• Embrace new IT systems, while continually improving business processes

• Pursue collaborative efforts within Navy, and other Exchanges and DeCA

We are a Combat Readiness Multiplier!

Commander’s Intent

EUROPE DISTRICT STORES

NAPLES

ROTASIGONELLA

CAPODICHINO

MADRID

LISBON

BAHRAIN

DJIBOUTI

SOUDA BAY

ST. MAWGAN

MORON

GAETA

NEXMART

NAVY EXCHANGE