Woolworths Group Ltd · ASX:WOW
Woolworths — H1 F23 Earnings Presentation
45 slides from Woolworths's earnings presentation, February 2023
Slide 1: Woolworths Group Half-Year Results 2023
Woolworths Group Half-Year Results 2023 1 Woolworths Group Group Half-Year Results 2023
Slide 2: Contents
Woolworths Group Half-Year Results 2023 2 Contents H23 Group summary and progress 4 Brad Banducci Group financial results and capital management 13 Stephen Harrison Business performance update 22 Current trading and outlook 39 Brad Banducci We create better experiences together for a better tomorrow
Slide 3: Acknowledgement of Country
Woolworths Group Half-Year Results 2023 3 Acknowledgement of Country Woolworths Group acknowledges the many Traditional Owners of the lands on which we operate, and pay our respects to their Elders past and present. We recognise their strengths and enduring connection to lands, waters and skies as t
Slide 4: H23 summary
Woolworths Group Half-Year Results 2023 4 H23 summary A balanced H1 result with improved customer and financial performance compared to COVID-impacted prior year Customer Care scores a highlight with most customer metrics improving on prior periods; Group VOC NPS up on Q2 F22 and Q1 F23 Successful s
Slide 5: Customers returning to store but digital engagement still growing strongly
Woolworths Group Half-Year Results 2023 5 Customers returning to store but digital engagement still growing strongly Australian Food First COVID Delta wave wave weekly store visits1 2019 average 19.4m 20.6m H23 avg. weekly store visits 16.0m H23 avg. weekly digital visits Food and Everyday digital t
Slide 6: Our retail ecosystem for good food and more everyday
Woolworths Group Half-Year Results 2023 6 Our retail ecosystem for good food and more everyday 1 B2C Food 2 More Everyday Our cornerstone B2C retail Helping our customers enjoy a food business, famous for little more value, more choice consistently good food, good and more good through prices, good
Slide 7: Strong progress on our strategic agenda
Woolworths Group Half-Year Results 2023 7 Strong progress on our strategic agenda More to do Low Prices, Specials, Better together Strong improvement in On sustainability Living our Most trusted brand TRIFR; Everyday Extra for personalised offers and Donations to WIRES for better E2E for third year
Slide 8: Multi-year supply chain transformation past the halfway mark
Woolworths Group Half-Year Results 2023 8 Multi-year supply chain transformation past the halfway mark 2019 2020 2021 2022 2023 2024 2025 Moorebank National Heathwood Chilled & DC, NSW opening Melbourne Fresh DC, Frozen DC, Qld 2024 Vic commissioned in commissioned in August 2020 February 2022 Aubur
Slide 9: Adjacencies supporting our cornerstone businesses and driving growth
Woolworths Group Half-Year Results 2023 9 Adjacencies supporting our cornerstone businesses and driving growth Strengthening digital engagement More Everyday Evolving our B2B offer Growing our ecosystem Average weekly traffic to Group Total Everyday Rewards B2B Food H23 sales growth digital platform
Slide 10: Progress on our sustainability goals
Woolworths Group Half-Year Results 2023 10 Progress on our sustainability goals People 40% 11.38 $22.4m $5.9m Making a positive change to the future of management Total recordable injury of direct community invested in a virtual reality of our people, our (levels 4-6) identify as frequency rate cont
Slide 11: Woolworths Food Retail and WooliesX now disclosed as part of Australian Food segment
Woolworths Group Half-Year Results 2023 11 Woolworths Food Retail and WooliesX now disclosed as part of Australian Food segment Australian Food Australian B2B New Zealand Food BIG W Woolworths Group reporting segments Other + Accelerators1 H23 changes to Australian Woolworths Food Retail is Woolwort
Slide 12: Contents
Woolworths Group Half-Year Results 2023 12 Contents H23 Group summary and progress 4 Brad Banducci Group financial results and capital management Stephen Harrison Group financial results Key balance sheet metrics 13 Capital management framework Cash flow summary Capital expenditure Capital managemen
Slide 13: Group financial results and capital management
Woolworths Group Half-Year Results 2023 13 Group financial results and capital management
Slide 14: H23 results summary
Woolworths Group Half-Year Results 2023 14 H23 results summary1 Group sales Group EBIT Group NPAT2 Basic EPS ($ million) ($ million) ($ million) ($ cents) 4.0% 7.5% 18.4% 7.1% 14.0% 16.2% vs. H22 3-YR vs. H22 3-YR CAGR CAGR vs. H22 vs. H22 74.8 31,894 33,169 907 1,637 29,535 1,554 26,716 1,331 1,382
Slide 15: Group trading performance
Woolworths Group Half-Year Results 2023 15 Group trading performance Group sales Group EBIT $ MILLION H23 H22 CHANGE 3-YR CAGR $ MILLION H23 H22 CHANGE 3-YR CAGR Australian Food 24,385 23,780 2.5% 5.5% Australian Food 1,439 1,217 18.2% 7.6% 4.3% excl. direct Australian B2B1 2,433 1,979 23.0% Austral
Slide 16: Improvement in ROFE reflecting EBIT growth, despite investment in inventory
Woolworths Group Half-Year Results 2023 16 Improvement in ROFE reflecting EBIT growth, despite investment in inventory to mitigate supply chain challenges Average inventory days1 ROFE Days Percentage (%) 40.5 38.9 38.3 37.3 14.2 14.2 35.8 14.1 33.7 30.6 30.2 31.1 31.1 13.7 13.7 12.5 H19 H20 H21 H22
Slide 17: Solid investment grade credit rating
Woolworths Group Half-Year Results 2023 17 Woolworths Group capital management framework Growth One of Australia’s Leading market Defensive Strong cash flow opportunities in leading and most position in Food & characteristics from AUS and NZ eCom and Investment proposition trusted brands Everyday Ne
Slide 18: Strong operating cash flow growth used for investment and dividends
Woolworths Group Half-Year Results 2023 18 Strong operating cash flow growth used for investment and dividends $ MILLION H23 H22 CHANGE EBITDA – continuing operations 2,848 2,454 16.1% EBITDA – discontinued operations - 6,387 n.m. Prior year included Endeavour Group gain on demerger Group EBITDA 2,8
Slide 19: Operating capex in line with expectations and above COVID-disrupted prior year
Woolworths Group Half-Year Results 2023 19 Operating capex in line with expectations and above COVID-disrupted prior year Sustaining capex $ MILLION H23 H22 $ MILLION H23 H22 SIB 157 112 Sustaining capex 645 587 Renewals 185 174 Growth capex 283 235 Supply chain 105 136 Operating capex 928 822 IT 12
Slide 20: Dividends and funding
Woolworths Group Half-Year Results 2023 20 Dividends and funding 46 cps interim dividend Debt maturity profile ($m)1 Dividends (cents per share) 1,200 108 17 92 800 51 53 91 400 40 39 46 - F21 F22 F23 F23 F24 F25 F26 F27 F28 F29 F30 F31 F32 Interim Final Non-recurring Endeavour Group Capital Markets
Slide 21: Contents
Woolworths Group Half-Year Results 2023 21 Contents H23 Group summary and progress 4 Brad Banducci Group financial results and capital management 13 Stephen Harrison Business performance update 22 Current trading and outlook 39 Brad Banducci
Slide 22: Woolworths Group Half-Year Results 2023
Woolworths Group Half-Year Results 2023 22
Slide 23: Australian Food
Woolworths Group Half-Year Results 2023 23 Australian Food H23 H22 CHANGE Total sales ($m) 24,385 23,780 2.5% EBITDA ($m) 2,324 2,054 13.1% EBIT ($m) 1,439 1,217 18.2% Gross margin (%) 30.7 30.2 48 bps CODB (%) 24.8 25.1 (30) bps EBIT to sales (%) 5.9 5.1 78 bps ROFE (%) 26.9 24.8 215 bps H23 SUSTAI
Slide 24: Australian Food: Woolworths Food Retail
Woolworths Group Half-Year Results 2023 24 Australian Food Woolworths Food Retail (Stores and eCom) H23 H22 CHANGE Total sales ($m) 24,196 23,633 2.4% Cash DAP1 & EBITDA 2,279 1,994 14.4% DAP & EBIT 1,428 1,183 20.8% DAP & EBIT to sales (%) 5.9 5.0 90 bps Sales per square metre2 ($) 18,470 18,014 2.
Slide 25: Progress against strategic priorities
Woolworths Group Half-Year Results 2023 25 Progress against strategic priorities Caring for our communities and teams Convenient and connected experiences Build advocacy as Phased out plastic Launched 7.4m meals Record Bank for Boosters via 700 Direct Today’s Fresh bags in SA and NT, 16 new funded t
Slide 26: Woolworths 360 evolving our integrated network to best serve our customers
Woolworths Group Half-Year Results 2023 26 Woolworths 360 evolving our integrated network to best serve our customers Opened eight net new stores and CFCs opened in Caringbah and Rochedale, New-look supermarket opened with new BIG W completed 25 renewals averaging a combined ~12,000 orders per week
Slide 27: Australian Food: WooliesX
Woolworths Group Half-Year Results 2023 27 Australian Food WooliesX (including eCom) H23 H22 CHANGE Total sales ($m) 3,031 3,172 (4.4)% Cash DAP & EBITDA 135 165 (17.5)% DAP & EBIT1 83 120 (30.4)% DAP & EBIT to sales (%) 2.7 3.8 (104) bps SALES PERFORMANCE BY PLATFORM B2C eCom (eComX) 2,356 2,547 (7
Slide 28: H23 highlights
Woolworths Group Half-Year Results 2023 28 H23 highlights ConnectedX & Cartology eComX EverydayX Digital traffic to Group platforms reaching +20% Consistently strong online VOC NPS supported by 59 14.1 million vs. Q2 F22 implementation of efficiency +6 points +800,000 or 6% vs. H22 25 million weekly
Slide 29: Australian B2B
Woolworths Group Half-Year Results 2023 29 Australian B2B
Slide 30: Australian B2B
Woolworths Group Half-Year Results 2023 30 Australian B2B H23 H22 CHANGE Sales ($m) B2B Food (Woolworths Food Company 3rd party) 1,802 1,426 26.4% B2B Supply Chain (Primary Connect 3rd party) 631 553 14.1% Total Australian B2B 2,433 1,979 23.0% EBITDA ($m) 94 69 34.8% EBIT ($m) 38 18 105.3% EBIT to
Slide 31: Australian B2B
Woolworths Group Half-Year Results 2023 31 Australian B2B B2B Food (Woolworths Food Company 3rd Party) Strong half from PFD driven by market Solid sales in AGW supported by petrol Strong sales in Woolworths at Work recovery and new customer growth and convenience channel as well as cycling COVID dis
Slide 32: Woolworths Group Half-Year Results 2023
Woolworths Group Half-Year Results 2023 32
Slide 33: New Zealand Food
Woolworths Group Half-Year Results 2023 33 New Zealand Food NZD ($) H23 H22 CHANGE Total sales ($m) 4,079 4,027 1.3% EBITDA ($m) 286 353 (19.2)% EBIT ($m) 122 200 (39.1)% Gross margin (%) 25.2 25.2 5 bps CODB (%) 22.3 20.2 203 bps EBIT to sales (%) 3.0 5.0 (198) bps Sales per square metre ($) 17,704
Slide 34: H23 highlights
Woolworths Group Half-Year Results 2023 34 H23 highlights Better everyday for a better tomorrow Living our Q2 VOC NPS score Q2 Store-controllable Improved pay and Te Reo Māori language at purpose of 43 VOC of 76% conditions +1 pt vs. H22 self-service checkouts +3 pts vs. H22 for store teams Roll out
Slide 35: Woolworths Group Half-Year Results 2023
Woolworths Group Half-Year Results 2023 35
Slide 36: BIG W
Woolworths Group Half-Year Results 2023 36 BIG W H23 H22 CHANGE Total sales ($m) 2,708 2,348 15.3% EBITDA ($m) 239 122 94.7% EBIT ($m) 134 25 437.5% Gross margin (%) 33.4 32.9 53 bps CODB (%) 28.5 31.8 (336) bps EBIT to sales (%) 5.0 1.1 389 bps Sales per square metre ($) 4,765 4,323 10.2% ROFE (%)
Slide 37: H23 highlights
Woolworths Group Half-Year Results 2023 37 H23 highlights Roll out of new store operating National Toys for Joy program Over 100 First Nations team members Live our purpose and model training to ~11,000 saving over 62 tonnes of hired in H1 through local partnerships show real care team members waste
Slide 38: Contents
Woolworths Group Half-Year Results 2023 38 Contents H23 Group summary and progress 4 Brad Banducci Group financial results and capital management 13 Stephen Harrison Business performance update 22 Current trading and outlook 39 Brad Banducci
Slide 39: H2 F23 current trading and outlook
39 H2 F23 current trading and outlook Strong start to H2 Strong start to H2 F23 with continued stabilisation in operating conditions and robust sales growth. Providing customers with value remains #1 priority Australian Food (Woolworths Food Retail) total sales increased by 6.5% in first seven weeks
Slide 40: Thank you
Woolworths Group Half-Year Results 2023 40 Thank you
Slide 41: Reclassification of Australian Food sales to reflect new disclosure
Woolworths Group Half-Year Results 2023 41 Appendix Reclassification of Australian Food sales to reflect new disclosure CURRENT REPORTING PREVIOUSLY REPORTED SALES PERFORMANCE BY BUSINESS ($ MILLION) H22 H22 Woolworths Supermarkets (store-originated) 20,597 20,630 Woolworths Mobile now in WooliesX M
Slide 42: Glossary
Woolworths Group Half-Year Results 2023 42 Glossary AGW Australian Grocery Wholesalers CAGR Compound annual growth rate Cash realisation ratio Operating cash flow as a percentage of Group net profit after tax before depreciation and amortisation Comparable sales Measure of sales which excludes store
Slide 43: Glossary continued
Woolworths Group Half-Year Results 2023 43 Glossary continued Net Promoter Score (NPS) A loyalty measure based on a single question where a customer rates a business on a scale of zero to 10. The score is the net result of the percentage of customers providing a score of nine or 10 (promoters) less
Slide 44: Glossary continued
Woolworths Group Half-Year Results 2023 44 Glossary continued 3PL Third party logistics Other non-IFRS measures used in describing the business performance include: • Earnings before interest, tax, depreciation and amortisation (EBITDA) • Change in average prices • Cash flow from operating activitie
Slide 45: Disclaimer
Woolworths Group Half-Year Results 2023 45 Disclaimer This presentation contains summary information about Woolworths Group Limited (Woolworths Group) and its activities current as at the date of this presentation. It is sourced from and should be read in conjunction with Woolworths’ other periodic