Wesfarmers Limited · ASX:WES
Wesfarmers — H1 2012 Earnings Presentation
48 slides from Wesfarmers's earnings presentation, Feb 16, 2012
Slide 1: 2012 Half-Year Results Supplementary Information
2012 Half-Year Results Supplementary Information (To be read in conjunction with the Half-Year Results Teleconference presentation) 16 February 2012
Slide 2: Presentation outline
2 Presentation outline Item Page 1 Coles 3 2 Home Improvement & Office Supplies 7 3 Target 11 4 Kmart 15 5 Insurance 19 6 Resources 27 7 Chemicals, Energy & Fertilisers 36 8 Industrial & Safety 42 9 Other Business & Capital Management 45
Slide 3: Coles
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Slide 4: Coles network
Coles network Coles 4 As at 31 December 2011 Selling Area 6 7 10 Supermarkets (sqm) 1,612,739 Liquor (sqm) – ex hotels 187,781 150 215 76 81 99 6 112 67 52 31 6 42 245 261 4 210 169 195 181 744 Supermarkets 15 15 794 Liquor stores 92 Hotels 625 Convenience
Slide 5: Store network movements
Coles 5 Store network movements Open at Open at 1 Jul 2011 Opened Closed Re-Branded 31 Dec 2011 Supermarkets Coles 696 9 (4) 2 703 Bi-Lo 45 - (2) (2) 41 Total Supermarkets 741 9 (6) - 744 Liquor 1st Choice 76 4 - 1 81 Vintage Cellars 83 3 (3) (1) 82 Liquorland 626 18 (13) - 631 Hotels 93 - (1) - 92
Slide 6: Revenue reconciliation
Coles 6 Revenue reconciliation Half-Year ended 2011 2010 31 December Food & Convenience Total Food & Convenience Total Liquor Liquor ($m) Segment revenue1 (Gregorian) 13,423 3,783 17,206 12,804 3,244 16,048 Less: Other revenue 86 6 92 68 9 77 Headline sales (Gregorian) 13,337 3,777 17,114 12,736 3,2
Slide 7: Home Improvement & Office Supplies
Home Improvement & Office Supplies John Gillam Managing Director
Slide 8: Bunnings network
Bunnings network Home Improvement & Office Supplies 8 As at 31 December 2011 199 Warehouse stores 58 Smaller format stores 2 37 Trade Centres 32 5 11 25 7 4 10 3 2 58 17 7 16 24 2 49 1 9 5 2 1 2
Slide 9: Officeworks
Officeworks Home Improvement & Office Supplies 9 As at 31 December 2011 Retail Stores 136 Officeworks 3 Harris Technology 1 Business 26 1 1 12 1 4 Fulfilment Centres 8 3 Service Centres 45 1 1 1 Print Hub 2 1 42 1 1 1 2
Slide 10: Store network movements
Home Improvement & 10 Office Supplies Store network movements Under Open at Open at construction at 1 Jul 2011 Opened Closed 31 Dec 2011 31 Dec 2011 Home Improvement Bunnings Warehouse 194 5 - 199 14 Bunnings smaller formats 59 - (1) 58 2 Bunnings Trade Centres 36 2 (1) 37 - Office Supplies Officewo
Slide 11: Target
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Slide 12: Target network
Target network Target 12 As at 31 December 2011 3 62 31 26 101 71 299 Target stores (incl 122 Target Country) 5
Slide 13: Store network movements
Target 13 Store network movements Open at Open at 1 Jul 2011 Opened Closed 31 Dec 2011 Target 172 5 - 177 Target Country 119 3 - 122
Slide 14: Revenue reconciliation
Target 14 Revenue reconciliation Half-Year ended 31 December ($m) 2011 2010 Segment revenue (Gregorian) 2,060 2,120 Less: Non sales revenue - - Headline sales (Gregorian) 2,060 2,120 Plus: Gregorian adjustment 37 30 Headline sales revenue (Retail1) 2,097 2,150 1 Retail period relates to the 27 week
Slide 15: Kmart
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Slide 16: Kmart network
Kmart network Kmart 16 As at 31 December 2011 187 Kmart stores 259 KTAS centres 2 5 36 55 21 28 13 18 51 74 12 44 74 5 5 3
Slide 17: Store network movements
Kmart 17 Store network movements Open at Open at 1 Jul 2011 Opened Closed 31 Dec 2011 Kmart 187 - - 187 Kmart Tyre & Auto 251 8 - 259
Slide 18: Revenue reconciliation
Kmart 18 Revenue reconciliation Half-Year ended 31 December ($m) 2011 2010 Segment revenue (Gregorian) 2,236 2,271 Less: Non sales revenue 1 1 Headline sales (Gregorian) 2,235 2,270 Plus: Gregorian adjustment 46 40 Headline sales revenue (Retail1) 2,281 2,310 1 Retail period relates to the 27 week p
Slide 19: Insurance
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Slide 20: Insurance business overview
Insurance 20 Insurance business overview Group/ Company Wesfarmers Insurance Australian New Zealand Premium Operations Broking Underwriting Underwriting Funding Lumley WI Business Affinity & Lumley WFI Lumley Business AUS NZ UK Premium Unit Direct Solutions Funding Brands
Slide 21: Geographical presence
Geographical presence Insurance 21 As at 31 December 2011 3 1 UK 4 3 12 5 21 1 2 1 1 12 8 5 17 14 7 15 6 Lumley Insurance (Australia) 15 3 Lumley General New Zealand 11 10 WFI 79 2 4 1 OAMPS1 32 2 Crombie Lockwood 24 1 OAMPS New Caledonia location not shown
Slide 22: Underwriting performance summary
Insurance 22 Underwriting performance summary Half-Year ended 31 December ($m) 2011 2010 % Gross Written Premium 732 659 11.1 Net Earned Premium 586 549 6.7 Net Claims (459) (358) 28.2 Net Commission & Expenses (174) (184) (5.4) Underwriting Result (47) 7 n.m. Insurance Margin (22) 29 n.m. EBITA (10
Slide 23: Australian catastrophe events
Insurance 23 Australian catastrophe events Australian N atural Catastrophes (Equivalent Repeated Cost) 1 9 74 - 2011 6,000.0 Queensland Floods and Cyclones. Newcastle Victorian Floods. WA bushfires. Earthquake Melbourne hailstorm. 5,000.0 Sydney Hailstorm 4,000.0 March 2010 Storms 3,000.0 2,000.0 Av
Slide 24: Broking performance summary
Insurance 24 Broking performance summary Half-Year ended 31 December ($m) 2011 2010 % Commission & Fee Income 111 92 20.7 Other Income 16 12 33.3 Total Income 127 104 22.1 Expenses (92) (76) 21.1 EBITA 35 28 25.0 EBIT 29 23 26.1 EBITA Margin (%) 27.8 27.3
Slide 25: Underwriting KPIs
Insurance 25 Underwriting KPIs Half-Year ended 31 December (%) 2011 2010 % pt Gross Earned Loss Ratio 85.4 74.3 11.1 Net Earned Loss Ratio 78.3 65.2 13.1 Reinsurance Expenses (% GEP) 19.2 19.3 (0.1) Exchange Commission (% RI excl XOL) 20.5 24.8 (4.3) Commission Expense (% GWP) 12.4 13.1 (0.7) Total
Slide 26: Gross written premium (underwriting)
Insurance 26 Gross written premium (underwriting) Liability Marine 13% 3% Engineering 6% Personal 25% Commercial Total: $732m Motor 23% Crop 4% Commercial 26%
Slide 27: Resources
Resources Stewart Butel Managing Director
Slide 28: Export pricing
Resources 28 Export pricing Australian steaming coal prices Australian hard coking coal prices 200 400 350 150 Hard 300 Hard 42% 250 44% 100 200 150 50 100 50 0 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 JPU Reference Price Spot price Annual
Slide 29: Resources financial summary
Resources 29 Resources financial summary Half-year ended 31 December 2011 2010 Commentary Production tonnes (‘000 tonnes) 7,085 7,080 Curragh production constrained by challenging first quarter mining conditions & commissioning of new CHPP Revenue ($m) Higher export coal prices partially offset by c
Slide 30: Curragh export metallurgical sales
Resources 30 Curragh export metallurgical sales Semi Hard 18% Semi Hard Hard Hard 23% 42% 42% PCI 40% PCI 35% 1H FY12 Actual FY12 Forecast 3.0 million tonnes 6.8 – 7.2 million tonnes
Slide 31: Coal production volumes
Resources 31 Coal production volumes Half Year Ended Beneficial ('000 tonnes) Mine Coal Type Interest Dec 2011 Dec 2010 Curragh, QLD 100% Metallurgical 3,087 3,120 Steaming 1,365 1,342 Bengalla, NSW1 40% Steaming 1,013 1,108 Premier, WA2 100% Steaming 1,620 1,510 Total1 7,085 7,080 1 Wesfarmers attr
Slide 32: Coal sales volumes
Resources 32 Coal sales volumes Half Year Ended Beneficial ('000 tonnes) Mine Coal Type Interest Dec 2011 Dec 2010 Curragh, QLD1 100% Metallurgical 2,976 3,151 Steaming 1,409 1,391 Bengalla, NSW2 40% Steaming 1,049 1,259 Premier, WA3 100% Steaming 1,745 1,513 Total2 7,179 7,314 1 Curragh metallurgic
Slide 33: Current hedging profile at 31 Dec 2011
Resources 33 Current hedging profile at 31 Dec 2011 Curragh Bengalla Current US$ Average Current US$ Average Year end Year end sold forward A$ / US$ sold forward A$ / US$ 30 Jun 30 Jun (US$m) hedge rate (US$m) hedge rate 20121 491 0.89 20121 64 0.90 2013 649 0.85 2013 155 0.89 2014 405 0.85 2014 109
Slide 34: Curragh expansion study to 10mtpa
Resources 34 Curragh expansion study to 10mtpa • Feasibility study ongoing • Potential to expand Curragh to 10mtpa metallurgical exports from H2 CY14 – Wiggins Island port capacity secured – Additional rail capacity secured • Re-evaluation of remaining reserves at Curragh/Curragh East • Drilling und
Slide 35: Bengalla expansion & study
Resources 35 Bengalla expansion & study • Expansion to 10.7mtpa ROM tonnes through two stages – Stage One 9.3mtpa ROM – Stage Two 10.7mtpa ROM • Stage One approved – November 2010 with commissioning underway • Additional port & rail capacity secured • Stage One project completion targeted for Q1 CY1
Slide 36: Chemicals, Energy & Fertilisers
Chemicals, Energy & Fertilisers
Slide 37: Fertiliser sales
Chemicals, Energy 37 & Fertilisers Fertiliser sales kt 1,200 1,000 800 739 670 813 589 600 612 649 610 513 400 200 381 370 387 249 289 264 244 226 227 0 FY2004 FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 2nd Half 1st Half 1H12 volumes 7.0% lower than previous year
Slide 38: Global fertiliser pricing
Chemicals, Energy 38 & Fertilisers Global fertiliser pricing US$/t 1,400 1,200 1,000 800 600 400 200 0 Jan-03 Jul-03 Jan-04 Jul-04 Jan-05 Jul-05 Jan-06 Jul-06 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Urea (FOB Middle East) DAP (FOB US Gulf) Ammo nia (FOB Middle Ea
Slide 39: PVC-VCM Spread
Chemicals, Energy 39 & Fertilisers PVC-VCM Spread The ‘PVC – VCM Spread’ refers to the difference between the Asian PVC selling price & VCM input cost 300 250 200 150 100 50 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 FY Average $US/t FY Average $A/t Source: Harriman Front Page Asi
Slide 40: World LPG prices – Saudi CP
Chemicals, Energy 40 World LPG prices – Saudi CP & Fertilisers $/tonne Propane 1,000 900 800 700 600 500 400 300 200 Saudi CP US$ (Propane) Saudi CP Au$ (Propane) 100 0 Jul-01 Jul-02 Jul-03 Jul-04 Jul-05 Jul-06 Jul-07 Jul-08 Jul-09 Jul-10 Jul-11 Saudi CP/ LPG price decline during 1H12
Slide 41: LPG production
Chemicals, Energy 41 & Fertilisers LPG production kt Ave t/TJ 200 1.2 1.1 150 1.0 0.9 100 0.8 0.7 50 0.6 0 0.5 FY2008 FY2009 FY2010 FY2011 FY2012 H1 WLPG production (kt) H2 WLPG production (kt) H1 average LPG content (t/TJ) FY average LPG content (t/TJ) Production lower than previous year due to red
Slide 42: Industrial & Safety
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Slide 43: Business portfolio
Industrial & Safety 43 Business portfolio Australia New Zealand Generalists ‘One stop shop’ Safety Specialists Industrial Specialists
Slide 44: Distribution network
Distribution network Industrial & Safety 44 As at 31 December 2011 218 industrial & safety branches & 132 gas distribution points Australia No. 1 Indonesia 73 44 2 3 24 1 17 12 16 18 9 1 8 7 10 6 4 1 46 1 122 4 3 5 2 16 7 New Zealand No. 1 24 4 4 26 5 34 24 26 24 10 7 10 5 3 10 1 2 1 1 1 3 17 1 Incl
Slide 45: Other Business & Capital Management
Other Business & Capital Management
Slide 46: Overview of the Group balance sheet
46 Overview of the Group balance sheet ($m)1 1H11 FY11 1H12 Commentary Inventories 5,296 4,987 5,359 Receivables & prepayments 2,0732 2,263 2,404 Trade & other payables (5,492) (5,090) (5,957) Detailed working capital discussion provided on slide 46 Other 275 264 501 Net working capital 2,152 2,424
Slide 47: Balance sheet - working capital
47 Balance sheet - working capital ($m) 1H11 FY11 1H12 Commentary Inventories 5,296 4,987 5,359 • Retail divisions seasonally higher against June • Inventory increased by $63 million (1H FY12 v 1H FY11) Kmart/Target: Lower inventory position following improved inventory management WES CEF: Commodity
Slide 48: For all the latest news visit www.wesfarmers.com.au
For all the latest news visit www.wesfarmers.com.au