Slide 1: Company Results Full Year 2019
Company Results Full Year 2019 1 For personal use only
Slide 2: Woolworths Group Purpose
Woolworths Group Purpose Company Results Full Year 2019 2 For personal use only Our Ways-of-Working How we work Our Purpose Why we exist Our Values Who we are
Slide 3: Table of contents
Company Results 3 Table of contents Full Year 2019 For personal use only F19 GROUP SUMMARY AND PROGRESS 4 Brad Banducci GROUP FINANCIAL RESULTS 10 Stephen Harrison BUSINESS PERFORMANCE UPDATE 22 ENDEAVOUR DRINKS AND ALH 45 TRANSACTION UPDATE David Marr OUTLOOK 51 Brad Banducci
Slide 4: F19 summary
Company Results Full Year 2019 4 For personal use only F19 summary Customer scores resilient over F19 and finished year strongly Improved sales and profit momentum across Group in H2 Group Online sales growth of 32%1; foundations for ‘X’ businesses established Materially improved momentum in BIG W;
Slide 5: Woolworths Group F19 priorities
Woolworths Group F19 priorities Company Results Full Year 2019 5 For personal use only Live our Purpose and Build a Customer 1st Team 1st Culture Build growth platforms for Create Connected, Personalised and the future Convenient Shopping Experiences Create differentiation in all Differentiate our A
Slide 6: Progress against key priorities
Progress against key priorities Company Results Full Year 2019 6 For personal use only Live our Purpose and Build a Create Connected, Personalised & Differentiate our Food Customer Customer 1st Team 1st Culture Convenient Shopping Experiences Propositions • Resilient customer scores • Rapid online s
Slide 7: Progress against key priorities
Progress against key priorities Company Results Full Year 2019 7 For personal use only Accelerate Innovation in our Unlock Value in our E2E Processes – ‘Better for Drinks Business Portfolio Customers’ and ‘Simpler for Stores’ • Launched new Endeavour Drinks • Sale of Petrol business to EG Group • Wo
Slide 8: Woolworths Group ecosystem
Woolworths Group ecosystem Company Results Full Year 2019 8 For personal use only Extend our brand Build out our range into new channels and services Drive up Drive thru Core food and everyday needs retail Deepen food On Pick up and everyday demand needs offer Same day B2C Grow and Next partner in H
Slide 9: Table of contents
Company Results Full Year 2019 9 Table of contents For personal use only F19 SUMMARY AND PROGRESS 4 Brad Banducci GROUP FINANCIAL RESULTS 10 Stephen Harrison Group financial results Key balance sheet metrics Cash flow summary Capital expenditure Capital management Impact of new lease standard BUSINE
Slide 10: For personal use only
Company Results Full Year 2019 10 For personal use only
Slide 11: Key financial metrics improved in F19
Key financial metrics improved in F19 Company Results Full Year 2019 11 For personal use only CONTINUING OPERATIONS1 TOTAL GROUP CHANGE CHANGE $M CHANGE NORMALISED2 CHANGE NORMALISED2 Sales 59,984 5.3% 3.4% 63,680 3.2% - EBIT 2,724 6.9% 5.0% 3,553 29.5% 27.7% NPAT attributable to Woolworths 1,752 9.
Slide 12: Normalised EBIT growth of 5.0% in F19
Normalised EBIT growth of 5.0%1 in F19 Company Results Full Year 2019 12 For personal use only CHANGE $M F19 F18 CHANGE NORMALISED2 Continuing operations before significant items Australian Food 1,857 1,757 5.7% 3.8% New Zealand Food 277 262 5.6% 2.6% New Zealand Food (NZD) 296 284 3.9% 1.0% Endeavo
Slide 13: Improvement in balance sheet metrics on prior year
Improvement in balance sheet metrics on prior year Company Results Full Year 2019 13 For personal use only Average inventory days Normalised ROFE Days Percentage Continuing operations Continuing operations Group Continuing operations – AASB 16 estimate 41.3 40.8 40.4 40.0 39.9 24.1 24.2 39.0 38.8 37
Slide 14: Free cash flow impacted by week 53, capex and higher dividends
Free cash flow impacted by week 53, capex and higher dividends Company Results Full Year 2019 14 For personal use only $M F19 F18 CHANGE Operating activities before interest and tax 3,858 3,839 0.5% Interest and tax (910) (845) 7.7% Operating activities 2,948 2,994 (1.5)% Investing activities (246)
Slide 15: Operating capex increase driven by renewals and digital spend
Operating capex increase driven by renewals and digital spend Company Results Full Year 2019 15 For personal use only Operating capex – F19 $M F19 F18 16% 10% Continuing operations Operating capex1 1,819 1,691 8% $1,819m 35% Property development 285 245 16% Gross capex 2,104 1,936 15% Property sales
Slide 16: Capital management and dividends
Capital management and dividends Company Results Full Year 2019 16 Shareholder distributions $m For personal use only (total dollars, excluding franking credits) Capital management 3,081 • Total of $3.1 billion returned to shareholders (excluding franking credits) 10 1,700 • $1.7 billion off-market
Slide 17: Balance sheet and funding
Balance sheet and funding Company Results Full Year 2019 17 Debt maturity profile ($m) For personal use only Credit ratings 2,500 • Committed to solid investment grade ratings 2,000 1,500 10 • S&P: BBB (stable outlook)3 1,000 Green Bond • Moody’s: Baa2 (stable outlook)3 500 • Credit metrics have sig
Slide 18: Balance sheet before and after adoption of AASB 16
AASB 16 Leases Balance sheet before and after adoption of AASB 16 Company Results Full Year 2019 18 For personal use only AASB 117: lease commitments are off balance sheet Recognition of lease AASB 16: lease liabilities and lease assets are now on balance sheet liability +$14.7bn and other transitio
Slide 19: Lease asset and lease liability by business
AASB 16 Leases Lease asset and lease liability by business – 1 July 2019 Company Results Full Year 2019 19 For personal use only $BN LEASE ASSET LEASE LIABILITY Continuing operations Australian Food 7.3 8.6 Endeavour Drinks 0.8 1.1 New Zealand Food 1.1 1.3 BIG W 0.9 1.1 Hotels 1.9 2.3 Unallocated 0.
Slide 20: Indicative impact on P&L for F19
AASB 16 Leases Indicative impact on P&L for F19 Company Results Full Year 2019 20 For personal use only F19 $BN F19 $BN AASB 16 IMPACT ON F19 EBIT (PRE-AASB 16) (POST-AASB 16) VARIANCE COMMENTARY F19 EBIT1 2.7 2.7 Operating lease rentals under AASB 117 added Add: Rent 2.1 back under AASB 16 (includi
Slide 21: Table of contents
Company Results 21 Table of contents Full Year 2019 For personal use only F19 GROUP SUMMARY AND PROGRESS 4 Brad Banducci GROUP FINANCIAL RESULTS 10 Stephen Harrison BUSINESS PERFORMANCE UPDATE 22 ENDEAVOUR DRINKS AND ALH 45 TRANSACTION UPDATE David Marr OUTLOOK 51 Brad Banducci
Slide 22: For personal use only
Company Results Full Year 2019 22 For personal use only
Slide 23: Australian Food
Australian Food Company Results Full Year 2019 23 For personal use only CHANGE F19 F18 CHANGE NORMALISED Sales ($m) 39,568 37,589 5.3% 3.3% EBITDA ($m) 2,613 2,430 7.5% 6.1% EBIT ($m) 1,857 1,757 5.7% 3.8% Gross margin (%) 28.7 29.0 (24) bps (24) bps Cost of doing business (%) 24.0 24.3 (27) bps (26
Slide 24: Australian Food F19 priorities
Australian Food F19 priorities Company Results Full Year 2019 24 For personal use only Build Customer 1st Brand, Team and Culture Innovate our customer and Create Connected, Personalised and team experience Ultra-Convenient Shopping Experiences Differentiate core Good Prices Engaging Famous for cust
Slide 25: Strong progress against F19 priorities
Strong progress against F19 priorities Company Results Full Year 2019 25 For personal use only • VOC NPS 51, +3 pts on last year and Store-controllable VOC at 82%, in line with the prior year and +2 pts on March • ‘I am here’ mental health awareness training completed by ~20,000 team members; materi
Slide 26: Customer metrics solid despite challenging year
Customer metrics solid despite challenging year Company Results Full Year 2019 26 For personal use only NPS - Store & Online Store-controllable VOC % promoters - % detractors % customers satisfied, 6 or 7 out of 7 0 +3 82 83 82 48 54 51 Jun-18 Dec-18 Jun-19 Jun-18 Dec-18 Jun-19 Fruit & Vegetables Pr
Slide 27: Strong sales growth in H2
Strong sales growth in H2 Company Results Full Year 2019 27 For personal use only Normalised sales grew 3.3% Comparable transactions grew 1.8% (% YoY) (% YoY) 4.7 2.1 1.9 4.1 1.5 1.4 2.8 Q1 Q2 Q3* Q4* 1.9 Comparable items1 grew 3.5% (% YoY) 4.5 4.1 Q1 Q2 Q3* Q4* 2.9 2.6 Comparable sales grew 3.1% (%
Slide 28: Format Development highlights
Format Development highlights Company Results Full Year 2019 28 For personal use only Format Development Progress Key Metrics We are in the third year of the program. This • Format Development makes a significant contribution to overall year we have launched: Australian Food sales • Format Developme
Slide 29: WooliesX highlights
WooliesX highlights Company Results Full Year 2019 29 For personal use only Strong eCom momentum Ultra-convenient experiences Rewards expansion Online growth Continued investment into accelerated to our digital experiences 11.7M 31% YoY in and mobile app resulting in ...members now part of F19, supp
Slide 30: For personal use only
Company Results Full Year 2019 30 For personal use only
Slide 31: New Zealand Food
New Zealand Food Company Results Full Year 2019 31 For personal use only CHANGE NZD F19 F18 CHANGE NORMALISED Sales ($m) 6,712 6,433 4.3% 2.4% EBITDA ($m) 425 411 3.0% 1.0% EBIT ($m) 296 284 3.9% 1.0% Gross margin (%) 24.4 24.2 18 bps 18 bps Cost of doing business (%) 20.0 19.8 20 bps 25 bps EBIT to
Slide 32: New Zealand Food highlights
New Zealand Food highlights Company Results Full Year 2019 32 For personal use only F19 HIGHLIGHTS F20 FOCUS Improving Customer Online and Digital Customer 1st Digital Experience Perceptions Differentiation Team 1st Culture and Online Growth 81% Store-controllable 40% F19 normalised online sales gro
Slide 33: New Zealand Food F20 priorities
New Zealand Food F20 priorities Company Results Full Year 2019 33 For personal use only Customer 1st Brand, Team and Culture Differentiate through innovation Create Convenient, Connected and and culture Innovative Shopping Experiences Grow customer loyalty through a stronger core Prices I Trust, Goo
Slide 34: For personal use only
Company Results Full Year 2019 34 For personal use only
Slide 35: Endeavour Drinks
Endeavour Drinks Company Results Full Year 2019 35 For personal use only CHANGE F19 F18 CHANGE NORMALISED Sales ($m) 8,657 8,244 5.0% 3.2% EBITDA ($m) 579 603 (4.1)% (5.4)% EBIT ($m) 474 516 (8.2)% (9.7)% Gross margin (%) 22.9 23.1 (16) bps (14) bps Cost of doing business (%) 17.4 16.8 63 bps 64 bps
Slide 36: BWS highlights
BWS highlights Company Results Full Year 2019 36 F19 HIGHLIGHTS For personal use only 30 On Demand delivery Opened 30 net new stores Record VOC scores and Jimmy Brings expanded expanded to 605 bringing the total store strengthened Rewards to Brisbane, Canberra stores, supporting double- network to 1
Slide 37: Dan Murphy's highlights
Dan Murphy’s highlights Company Results Full Year 2019 37 For personal use only F19 HIGHLIGHTS 3 3 new stores added to the fleet total 230 Record VOC at 75% On Demand delivery (up 2 pts on June 18) rolled out to 91 stores (40% of fleet) Sustainability investments Over 3.5m members Introduced 35 wine
Slide 38: Endeavour Drinks F20 priorities
Endeavour Drinks F20 priorities Company Results Full Year 2019 38 For personal use only Customer 1st Brand, Team and Culture Innovate our Deliver increasingly effortless, personal and inspiring customer and experiences. Evolve portfolio to support core and develop new team experience growth avenues
Slide 39: For personal use only
Company Results Full Year 2019 39 For personal use only
Slide 40: BIG W
BIG W Company Results Full Year 2019 40 For personal use only CHANGE F19 F18 CHANGE NORMALISED Sales ($m) 3,797 3,566 6.5% 4.2% LBITDA before significant items ($m) (5) (30) (82.2)% (88.7)% LBIT before significant items ($m) (85) (110) (22.2)% (24.0)% Significant items ($m) (371) - n.m. n.m. LBIT af
Slide 41: BIG W highlights
BIG W highlights Company Results Full Year 2019 41 For personal use only F19 HIGHLIGHTS F20 FOCUS Continued efforts to make a real difference for families • Simplify our business both in stores and support through activities like free books for kids 1 office by aligning tasks to customer needs Conti
Slide 42: BIG W F20 priorities
BIG W F20 priorities Company Results Full Year 2019 42 For personal use only
Slide 43: For personal use only
Company Results Full Year 2019 43 For personal use only
Slide 44: Hotels
Hotels Company Results Full Year 2019 44 For personal use only CHANGE F19 F18 CHANGE NORMALISED Sales ($m) 1,671 1,612 3.7% 1.8% EBIT ($m) 261 259 1.0% (0.5)% Gross margin (%) 83.6 84.2 (55) bps (54) bps Cost of doing business (%) 68.0 68.1 (12) bps (18) bps EBIT to sales (%) 15.6 16.1 (43) bps (35)
Slide 45: Table of contents
Company Results 45 Table of contents Full Year 2019 For personal use only F19 GROUP SUMMARY AND PROGRESS 4 Brad Banducci GROUP FINANCIAL RESULTS 10 Stephen Harrison BUSINESS PERFORMANCE UPDATE 22 ENDEAVOUR DRINKS AND ALH 45 TRANSACTION UPDATE David Marr OUTLOOK 51 Brad Banducci
Slide 46: Merger and separation of Endeavour Drinks and ALH Group
Merger and separation of Endeavour Drinks and ALH Group Company Results Full Year 2019 46 For personal use only Merger and separation of Endeavour Drinks and ALH Group is on track - dedicated internal team and advisor group mobilised for transaction execution and operational separation, and regulat
Slide 47: Key milestones
Key milestones Company Results Full Year 2019 47 For personal use only Early Oct 2019 Restructure Scheme Booklet provided to ASIC for review First court hearing to convene the Restructure shareholder meeting and approve the dispatch Late Oct 2019 of the Restructure Scheme Booklet Early Nov 2019
Slide 48: Endeavour Group footprint and F19 revenue split
Endeavour Group footprint and F19 revenue split Company Results Full Year 2019 48 For personal use only National footprint of 1,904 locations F19 revenue by segment ALH Hotels 16% 12 3 3 Endeavour Drinks 439 124 retail 55% 132 25 27 ALH retail drinks 80 27 31 29% 381 34 53 26 314 67 85 Endeavour ALH
Slide 49: Endeavour Group summary financials
Endeavour Group summary financials Company Results Full Year 2019 49 For personal use only ALH Group1 (B + C) Woolworths Endeavour Drinks1,2 Hotels1,2 Indicative Group reported (A + B) (C) pro forma segments1: Endeavour ALH retail ALH hotels Endeavour Drinks1,2 ALH Group1 3 Drinks retail2 (A) (B) (C
Slide 50: Table of contents
Company Results 50 Table of contents Full Year 2019 For personal use only F19 GROUP SUMMARY AND PROGRESS 4 Brad Banducci GROUP FINANCIAL RESULTS 10 Stephen Harrison BUSINESS PERFORMANCE UPDATE 22 ENDEAVOUR DRINKS AND ALH 45 TRANSACTION UPDATE David Marr OUTLOOK 51 Brad Banducci
Slide 51: Outlook
Company Results Full Year 2019 51 Outlook For personal use only Despite an uncertain consumer environment and input cost pressures, we are energised by the material opportunities to unlock further value for customers and shareholders in F20 • Australian Food Renewals, improved fresh experience and r
Slide 52: Glossary
Glossary Company Results Full Year 2019 52 Cash realisation ratio Operating cash flow as a percentage of Group net profit after tax before depreciation and amortisation For personal use only Comparable sales Measure of sales which excludes stores that have been opened or closed in the last 12 months
Slide 53: Glossary
Glossary Company Results Full Year 2019 53 For personal use only Other non-IFRS measures used in describing the business performance include: • Earnings before interest, tax, depreciation and amortisation (EBITDA) • Earnings before interest, tax, depreciation, amortisation and rent (EBITDAR) • Cash
Slide 54: Disclaimer
Disclaimer Company Results Full Year 2019 54 For personal use only This presentation contains summary information about Woolworths Group Limited (Woolworths Group) and its activities current as at the date of this presentation. It should be read in conjunction with Woolworths’ other periodic and con
Slide 55: For personal use only
Company Results Full Year 2019 55 For personal use only