Woolworths Group Ltd · ASX:WOW
Woolworths — Merger or Acquisition (August 2009)
18 slides from Woolworths's merger presentation, Aug 25, 2009
Slide 1: A fresh new offer in home improvement
For personal use only A fresh new offer in home improvement Tuesday 25 August
Slide 2: We are entering the $24 billion hardware sector
We are entering the $24 billion hardware sector For personal use only The Australian hardware and home improvement sector is worth $24 billion1 plus Woolworths believes there is a large gap in this sector due to unmet customer needs and limited competition in the destination home improvement categor
Slide 3: Home improvement strategy
Home improvement strategy For personal use only Woolworths’ strategy spans supply, distribution and retail • Danks provides immediate and ongoing scale and infrastructure • Destination home improvement retail sites will compete in part of the a sector that is ripe for a new entrant This strategy is
Slide 4: The Woolworths vision
The Woolworths vision For personal use only Enhanced choice for Australian (retail and trade) consumers • Improved product range representing value and choice • A mix of store formats to meet consumer needs • Increased competition in the destination home improvement sector A better deal in your loca
Slide 5: Why home improvement?
Why home improvement? For personal use only Australian hardware and home improvement sector (retail, trade & garden) worth $24 billion • Home improvement is another category that Bunnings allows us to serve customers’ everyday needs 18.0% • We have identified unmet customer needs and therefore see a
Slide 6: Danks Overview
Woolworths — Danks For personal use only Danks Overview • Iconic Australian hardware business - 150 years of trading • One of Australia’s largest and most innovative distributors of hardware and garden products • Three thriving retail brands – Home Timber & Hardware, Thrifty-Link Hardware and Plants
Slide 7: Danks retail distribution and exclusive brands
Woolworths — Danks For personal use only Danks Independent Retail Distribution Danks Exclusive Brands (DEBs) • Distribution and marketing support • 18 private label “exclusive” and to 205 stores offering a broad range affordable brands of timber and building materials • Outdoor furnishings, barbecue
Slide 8: Why Woolworths…
Woolworths — Danks For personal use only Why Woolworths… • Enhanced capability to continue to support and grow the independent retailers who will remain the lifeblood of the business • Ongoing access to resources, industry expertise, supply chain expertise and global sourcing capability • Strategica
Slide 9: Benefits to Danks independent retailers
Woolworths — Danks For personal use only Danks independent retailers including Home Timber & Hardware, Thrifty-Link Hardware and Plants Plus Garden Centres will benefit from • Access to resources to service customers better and help Resources them grow their business • The expertise of both Woolwort
Slide 10: Why Danks…
Acquisition of Danks For personal use only Why Danks… • Danks is a profitable and well run business that we are proud to partner with • An acquisition of Danks will give us immediate and ongoing capacity and capability to achieve our goal of a multi format home improvement offer • Danks is an import
Slide 11: Offer Fundamentals
Acquisition of Danks For personal use only Offer Fundamentals • Recommended offer of $13.50 per share (representing total equity consideration of $87.6 $ million), plus approved final Danks declared 15.00 14.03 Fully dividend of $0.53 per share 0.53 Franked • The offer price represents a: Dividend –
Slide 12: Priorities for Danks
Woolworths priorities for Danks For personal use only • Grow the independent hardware sector • Enhance the value of the Danks brands • Support the growth of the distribution business – capital investment and economies of scale • Enable independent retailers to offer their consumers (retail and trade
Slide 13: Lowe's Overview
Woolworths — Lowe’s JV For personal use only Lowe's Overview • Lowe’s is the second-largest home improvement retailer in the world • Annual turnover of US$48.2 billion to 30 Jan 2009 • Founded in 1946 and based in Mooresville, North Carolina • Listed on the NYSE, capitalised at US$31.2+ billion (A$3
Slide 14: Lowe's Overview and stores by state
Woolworths — Lowe’s JV For personal use only Lowe's Overview Lowe's Stores By State And Province • Serves approximately 14 million Store Numbers New Hampshire do-it-yourself, do-it-for-me and 11 Vermont Maine commercial business / trade Washington 33 Montana North Dakota Minnesota 1 9 Massachusetts
Slide 15: Why Australia?
Woolworths — Lowe’s JV For personal use only Why Australia? • Opportunity to work with both Australia’s largest retailer and a local hardware industry specialist — a powerful combination that benefits all parties • Significant opportunity at the destination home improvement sector due to lack of com
Slide 16: Joint Venture with Lowe's
Joint Venture with Lowe’s For personal use only • Woolworths and Lowe’s have signed an agreement for a joint venture to establish a comprehensive hardware and home improvement retail network in Australia • Lowe’s investment will represent a 33.3% stake in Woolworths’ home improvement multi format of
Slide 17: In summary
In summary For personal use only There is a real opportunity to increase the overall size of the home improvement category • We believe the DIY trend will continue, particularly in the current economic environment • The Australian love of property and high levels of home ownership mean that maintain
Slide 18: Questions
For personal use only 17 Questions
Woolworths Group — Merger or Acquisition (August 2009) on 6ix