Wesfarmers Limited · ASX:WES
Wesfarmers — Non-Deal Roadshow (June 2006)
56 slides from Wesfarmers's roadshow presentation, Jun 20, 2006
Slide 1: Wesfarmers Investor Discussion Pack
Wesfarmers ——— i In on F
Slide 2: Contents
Corporate Strategies 11 Operating Divisions 32 Home Improvement 33 Energy 36 Insurance 41 Industrial and Safety 45 Chemicals and Fertilisers 48 Other Businesses 51 Australian equivalents to International Financial Reporting Standards (“A-IFRS”) 53
Slide 3: Group Overview
Slide 4: Our Objective and Strategies
Our Objective: to provide a satisfactory return to shareholders Our Strategies: A Enhance the performance of existing businesses Expand existing businesses - “logical incrementalism” Manage the portfolio Pursue sustainability
Slide 5: The Wesfarmers Way
The Wesfarmers Way... it shows that by effectively uti the framework for the company’s culture and business model. ising the systems and implementing the strategies we will drive performance to the oblective |
Slide 6: Corporate Objective
rporate | y Our aim is to provide a satisfactory return to shareholders by: % & & @ satisfying the needs of customers through the provision of goods and services on a competitive and professional basis; providing a fulfilling and safe working environment for employees, rewarding good performance and
Slide 7: Operating Results
Operating Results Operating revenue * Asm 7,706 8,190 EBITDA* Asm 1,191 1,261 Earnings before interest and tax * Asm 912 983 Net profit after tax ** Asm 655 709 Financial Position Total assets Asm 7,271 7,314 Net borrowings Asm 1,514 1,720 Shareholders’ equity Asm 3,331 3,081 Capital expenditure on
Slide 8: Business divisions overview
Australasia's leading supplier of home and Home Improvement garden improvement products and building 4,065 416 materials Mining of thermal and coking coal; production, marketing and distribution of 7 LPG; manufacture and marketing of 1,161 317 industrial gasses; and power generation Supplier and dis
Slide 9: Long run growth in earnings per share and share price
350 long run growth in earnings per share and strong share price increase... 98 99 OO 87 88 89 90 91 92 93 94 95 9% (O7 Share Price(A$) 40,00 35.00 30.00 25.00 20.00 15.00 10.00 3,00 0,00 1H06 5,00 fm EPS (AGAAP) #2 EPS (A-IFRS) @@m@Girrah EPS 2% Landmark EPS ===Wesfarmers Share Price 180,000 “ ..re
Slide 10: Growth in cashflows and dividends; returns on equity
, Cents strong growth in cashflows and dividends 95 96 97 98 99 00 01 02 03 04 05 = 1H06 Hi Dividend per share “ Operating cashflow per share _ % ..from consistent above market returns on shareholders’ funds 95 96 97 98 99 00 01 02 03 04 05 1H06 ” ROE (AGAAP) @ ROE (A-IFRS) Note: 2004 figures includ
Slide 11: Corporate Strategies
Slide 12: Our Strategies
Or ina Enhance the performance of existing businesses to run our businesses according to “best practice” principles Expand existing businesses to expand existing businesses as opportunities allow Manage the portfolio to manage our portfolio and balance sheet actively in order to enhance shareholder
Slide 13: Integrated Shareholder Focused Systems
ed Shareholder Focused S$) cae Achievement of Wesfarmers objective of a satisfactory return to shareholders is supported by integrated shareholder-focussed systems Co eG Go ) 7 _ oo 7. ae A171 Vy Ao 14 _ y 7 a _ a prov De 3 Dieciiy i ) — a 7 a AB A a 6 arn ig Le Vn yy r ) LD j i yy by i y Le » sl a
Slide 14: Group and Divisional Performance
Group 4 i Performance ts ce Tar Tilalice Divisional Performance rfo Pro mm e P yi, Mae
Slide 15: Exceeding group performance targets
exceeding group performance targets 2001 2002 2003* 2004# 2005 1H 2006* AGAAP I A-IFRS om Target “Excluding Girrah #Exctuding Landmark “rolling 12 months to 31 December 2005
Slide 16: Divisional Performance: Return on Capital Employed
DIVISIONAL PERFORMANCE Return on Capital Employed ROC, 2006 Targets: = 10% 20% oo rT - ve Ve Lo LI ig Cl iy Ny a Gey . Ly Wy Li j y 7, _ yy Ze Lo a “ oe Wag Ly Ly yy Wigs Uy ue _ — a 7) > CellC” i _ 7 . _. y 7 i _ _ ay, : : oe A Wig yy Le Sy, uy Ly yl yy . Ly . Wy) LL _ Ly QZ . 7 |. _ a wy 7 Le Ly i
Slide 17: Divisional Performance: Return on Capital Employed
DIVISIONAL PERFORMANCE Return on Capital Employed ROC, 2006 Targets: ROC AMin = 10% 2005 2004 2005 2004 2005 ROC AS 20% Improvernent Energy Industrial & Safety Insurance Chemicals & at ~ Fertilisers
Slide 18: Record of growth through capital expenditure and acquisitions
Wesfarmers has a strong record of growth through capital expenditure and value enhancing acquisitions... ..through the concept of “logical incrementalisrn” the company has successfully pursued profitable growth 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 Of 02 03 04 O05 OOF (7 Capital Expenditure M
Slide 19: AGAAP and A-IFRS results
2001 2002 2003 2004 2005 1H 2006 W AGAAP @ A-IFRS 2001 2002 2003 2004 2005 1H 2006 i ii
Slide 20: Sustainability
Slide 21: Obligation and protection
bligaton srotecton
Slide 22: Financial Focus
Financial Focus Strict Disciplines Building Growth-Enabling Competencies Culture
Slide 23: 2006 Half Year Results
Slide 24: Group half year results
yy a i ey Operating Revenue EBITDA 829.6 601.5 7.9 Earnings before interest and tax 707.1 514.5 38.2 Reported Net Profit after tax Open cents per share 300 250 200 150 100 50 2001 2002 2003 2004 2005 4HO6 <EPS(AIFRS) WEPS (AGAAP) —_—tl Operating cashflow per share _fff Dividend per share.
Slide 25: Divisional results
Div Home improvement Energy insurance industrial and Safety Chemicals and Fertilisers Other 220.9 225.4 343,2 123.8 63.5 66.2 46.0 51.5 26.7 29.41 6.8 15.5 (2.0) 177.2 (4.1) (10.7) (8.2) 66.1) Copitel Expenditure | Hall Year (0 31 Dec 2005, Retumm on Capital Rolling 12 months to 31 Vee 2005 HB Home
Slide 26: Home Improvement half year results
Hor Half Year Ended 34 December (ASm} Revenue: EBITDA 245.2 248.6 {1.4} Depreciation (24,3) (23.4) 5,2 EBIT 220.9 225.4 (2.0) Share Plan & Store Refit 23.3 4.3 am Comparative EBIT Trading Revenue* Profit from Property sates (ASm) * Excludes property and other non-trading items
Slide 27: Energy half year results
Half Year Ended 31 December (AS$m) Revenue EBITDA 407.7 Depreciation (64,5) 158.4 (34.6) EBIT 343.2 123.8
Slide 28: Industrial and Safety financial performance
cp Financial Performance Half Year Ended 31 December (ASm) Reverie EBITDA 53.1 Depreciation (7.1) 59.6 (10.9) (8.1) (12.3) EBIT 46.0 51.5 (10.7)
Slide 29: Insurance financial performance
Financial Performance __ Half Year Ended 31 December (ASm) Gross Written Premiura Net Earned Premium 376.6 343.2 97 Net Claims (229.6) (205.7) 11.6 Net Commission and Expenses (105.0) (88.5) 18.6 Underwriting Result 42.0 49.0 (14.3) insurance Margin 54.3 60.2 {9.8} 63.5 66.2 Outlook ek ia ure in mos
Slide 30: Chemicals and Fertilisers financial performance
Financial Performance Half Year Ended 31 December (ASm) Revenue: Chemicals Fertilisers EBITDA 48.5 48.4 0.2 Depreciation (21.8) (19.3) 23.0 EBIT 26.7 29.1 (8.2)
Slide 31: Other businesses contribution to Group EBIT
Financial Performance Contribution to Group EBIT Half Year Ended 31 December (A$m) esfeuner an eI ea W me G en Associates: a a ARG Ve : Gresham Private Equity - Fund 1 Gresham Private Equity - Fund 2 Gresham Partners Wespine Tax on ARG, Gresham and Wespine Corporate Overheads and Other
Slide 32: Operating Divisions
Slide 33: Home Improvement
"WIDEST RA o NCE “LOWEST PRICES _ _BEST SERVICE
Slide 34: Home Improvement - Quick Facts
Home Improvement - St QUICK FACTS 1 40 warehouse stores 70 traditional stores AS > 000 product lines 22, 000 employees CONTRIBUTION TO GROUP EBIT Wi Warehouse stores 140 77 Small format stores 70 7 WA Salvage stores 15 Z WouseWorks stores 2 As at end of May 2006, excludes distribution centres and tr
Slide 35: Home Improvement EBIT/Capital
EBIT/Capital 2001 2002 2003 2004 2005 1H 2006 iu First HY EBIT @@ Full Year EBIT ~~ EBIT/Capital (R12) Note: EBIT for 2001 to 2004 on AGAAP basis and before goodwill amortisation Revenue 1,541.7 3,066.3 3,474.5 3,845.7 4,067.5 4,065.3 EBITA 132.0 291.8 342.8 384.8 417.9 415.7 Goodwill Amortisation -
Slide 36: Energy
URRAGH WESFARMERS LPG HAA
Slide 37: Energy businesses
ci: I i HAAN eC Hee te CONTRIBUTION BUSINESSES | TO GROUP EBIT Gas and power Coal ll Kieenheat Gas ‘) Premier Coal @ Wesfarmers LPG #@ Curragh @ Air Liquide @ Bengalla Z StateWest Power
Slide 38: Energy EBIT/Capital
Revenue 978.1 EBITA 190.4 Goodwill Amortisation (0.3) EBIT 190.1 220) 963.5 236.9 (0.4) 236.5 EBIT/Capitat ASm % 400 70 + 60 ; 50 | 40 + 30 + 20 50 r 10 0 ts) 2001 2002 First HY EBIT 2003* 2004 2005 1H 2006 @@ Full Year EBIT «EBIT/Capital (R12) Note: EBIT for 2001 to 2004 on AGAAP basis and before g
Slide 39: Coal production
Coal / y Ve Lg. We He He EN? une Mine (mtpa) Curragh, QLD Premier, WA Bengalla*, NSW Voy a 2002 2003 Export Coking Coal (min) LLL 1.8 2004 f 4.6 Vy , yi ey uy 2005 2006 F ‘i Export Coking Coal (max) y, Va Tas SS 2007 F LT
Slide 40: Petroleum
petroleum
Slide 41: Insurance
ae eee ee ee ee ee eee Slee
Slide 42: Insurance - Quick Facts
e - Locat BUSINESSES QUICK FACIS i A638 employees 105 VOICI CONTRIBUTION TO GROUP EBIT @ Wesfarmers Federation Insurance @ Lumley
Slide 43: Insurance EBIT/Capital
ns EBIT/Capital % 70 r 60 r 50 + 40 r 30 r 20 10 2001 2002 2003 2004 2005 1H 2006 First HY EBIT @@ Full Year EBIT -e~EBIT/Capital (R12) Note: EBIT for 2001 to 2004 cn AGAAP basis and before goodwill amortisation y crs ey Gross Written Premium 170.3 200.6 217.7 787.3 1,019.9 1,019.9 Net Earned Premiu
Slide 44: Insurance - Performance
Insurance - P: nee Commercial (Ay 100 focused on strong underwriting performance Crop Motor 95 96 85 8% 80 Commercial 18% 7 70 65 a a) 60 QBE Promina IAG Wil QBE Promina IAG wiD Liability Personal 2004 2005 17% 18% 12 months ending 30 June. QBE and Promina adjusted for December year end. Net Earned
Slide 45: Industrial and Safety
Blackwoods PAMERS LI Ate Mullings Fasteners | “URE EAS TERGH SPRITE MEPUBLIFES Ma tier Bullen partnerehins, dalinering delution
Slide 46: Industrial and Safety businesses
ih AM CONTRIBUTION TO GROUP EBIT BUSINESSES @) industrial Products 116 @ Protector Alsafe 55 V7 Protector & NZ Safety 46 [| Blackwoods Paykels (NZ) 27 HB Packaging House 11 lon FF, ie 2006
Slide 47: Industrial and Safety EBIT/Capital
EBIT/Capital % 16 14 + 12 + 10 je | 9 2002 © 2003-«S 2004 = 2005 1H 2006 2 First HY EBIT @ Full Year EBIT “®- EBIT/Capital (R12) Note: EBIT for 2001 to 2004 on AGAAP basis and before goodwill amortisation Revenue 1,055.4 1,112.0 1,150.6 1,171.5 1,174.7 EBITA 84.8 117.2 112.0 110.0 109.0 Goodwill Amo
Slide 48: Chemicals and Fertilisers
CSBP oh Chemicals ;
Slide 49: CSBP businesses
menulactunigs ports j | CONTRIBUTION BUSINESSES No. TO GROUP EBITA @ CSBP fertilisers 7% Manufacturing plant 4 import and distribution centres 5 Depots 6 Regional Sales Representatives 25 Sales agents 157 Hz CSBP chemicals Manufacturing plants 17 ion # ie 2006 a
Slide 50: Chemicals and Fertilisers EBIT/Capital
EBIT EBIT/Capital ASm % 100 20 18 16 14 12 2001 2002 2003 2004 2005 1H 2006 ‘irst HY EBIT jg Full Year EBIT ~e~-EBIT/Capital (R12) EBIT for 2001 to 2004 on AGAAP basis and before goodwill amortisation Noi Revenue 438.1 463.9 473.6 518.5 588.7 586.9 EBITA 52.9 73.5 78.9 85.6 89.3 89.4 Goodwill Amorti
Slide 51: Other Businesses: ARG and Gresham
Australian Railroad Group (50%): 50:50 joint venture between Wesfarmers and international rail operator Genesee & Wyoming Inc (GWI) of the United yo) States. ARG comprises two operating businesses; Rail ‘Profit before tax 19.0 16.1 Operations providing haulage and logistics rail service. Wesfarmers
Slide 52: Other Businesses
TAA
Slide 53: Australian Equivalent to International Financial Reporting Standards (A-IFRS)
Slide 54: Impact on NPAT and Shareholders' Equity
mpact on NPAT and Sharehol AGAAP Shareholders’ Equity Derecognition of Employee Share Loan (215.3) Impairment of assets including goodwill (15.4) Write-back of goodwill amortisation 90.4 Tax effect of earnings from associates (31.6) Tax effect of fair value adjustments on acquisition Recognition of
Slide 55: Investor information and announcements
a SAAT ia Unis eA 0 0 14 BURR)” Financial results announcements Corpo “Please PBL RB “OPERATING: En WEEE HOE URC PEO ASI ace Ine RNA Se A ENERGY ssi FUER RASH aon LOEB RIL & BEE cree: Qui euRaIEEeR ROALD & SERMON MLNAGERAE IT ARLENE PERCIPULIES ‘nobe GHAREMOLOERS & INVESTORS price deta, SOLAMENTE 8
Slide 56: Important notice
Certain financial information prepared under Australian equivalents to International Financial Reporting Standards (A-IFRS) for the year ended 30 June 2005 provided in this presentation is unaudited and subject to revision The material contained in this presentation is intended to be general backgro