Wesfarmers Limited · ASX:WES
Wesfarmers — JPMorgan Investor Conferences, New York and Edinburgh 2006
56 slides from Wesfarmers's conference presentation, Sep 26, 2006
Slide 1: Wesfarmers Limited presentation to JPMorgan investor conferences
7 Wesfarmers Limited ABN 28 008 984 049 25 September 2006 The Manager Company Announcements Office Australian Stock Exchange Limited Level 4 20 Bridge Street SYDNEY NSW 2000 Dear Sir PRESENTATION TO BE GIVEN AT JPMORGAN INVESTOR CONFERENCES — NEW YORK AND EDINBURGH Following is a presentation that i
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Slide 4: Philosophy Based On A S...
— i y ~ ay y le Fo ing Philosophy Based On A S oe Wesfarmers
Slide 5: In support of this we have made key decisions in years...
In support of this we have made 15 key decisions in 22 years... Wesfarmers Timeline of Significant Events 5 | tie sil Evaests | Bees December 1987 Acquired interest as a "white ight” and was the precursor (0 a very successftl rotait business July 999 sve ASX Listing First antry fate tho coal market
Slide 6: Resulting in increasing returns
Resulting in increasing returns EPS (cents) 86 87) «688 B90 91 92 93 94 95 96 97 98 #99 8600 O01 02 03 04 O5 06 EPS (AGAAP) #22 EPS (A-IFRS) S@@@Girrah EPS @@@Landmark EPS MMMARG EPS Wesfarmers Share Price 18000% 5” 16000% 5 14000% + 12000% 5 410000% 4 8000% 4 6000% + 4000% + 2000% 4 0% , 7 84 85 86
Slide 7: Investment has always outstripped depreciation
Investment has always outstripped depreciation ASm AS2.25bn 1,000 - 900 - 800 + 700 5 600 - 500 + 400 + 300 + 200 + 100 + 0 “ T “ T - A 4 4 4 4 T T T 7 T T T 7 T 4 = 4 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 O7F ‘Capital Expenditure wm Acquisitions == Depreciation 4&0 »-
Slide 8: Management Team
Management Team Managing Director & CEO Richard Goyder Finance Director Gene Tilbrook John Gillam Stewart Butel Bob Buckley Terry Bowen Keith Gordon Tim Bult 7
Slide 9: Sustainable Performance is Driven...
4 y yy Sustainable Performance is Driv Wesfarmers Model oe Wesfarmers
Slide 10: The Anatomy of the Wesfarmers Model
The Anatomy of the Wesfarmers Model 7
Slide 11: Building and cycling strength
Building and cycling strength ne 7 10
Slide 12: Fundamentals
Fundamentals ll yy i Ve A _ oC Ly i Ly LC Li oS Ly) ) a . Ls oe ae y Lig) Lo oo oy a LG Lo Cl ) Ly a 7 aa a Le : a / | We ye iy IG yD Lo. . y LT , 7 Wy . i i Co Lis yy vy iG ae | Wy — wn yy Wigs 7 a ) Lo Liye yi ae “aoe WON ae Wi Me Focus on shareholder returns Place decision-making and accountabili
Slide 13: Integrated shareholder-focused systems
Integrated shareholder- focused systems * Group strength by leading the practice of identifying and capturing value 7 12
Slide 14: Strategies
Strategies d line latform underpinne iscip ic p ial disci Clear strateg financ by NNN NINN ul 7 13
Slide 15: The Wesfarmers Model...building and cycling strength
The Wesfarmers Model...building and cycling strength wai clini MNT: Mh 7 14
Slide 16: Providing a foundation for the pursuit and capture of new opportunities for growth...
Providing a foundation for the pursuit and capture of new opportunities for growth... Wesfarmers. Model &e¢ 15
Slide 17: To Secure, Strengthen, Build and Extend the business
To Secure, Strengthen, Build and Extend the business Stresatien 7 16
Slide 18: Pursue opportunities to provide substantial growth over investment hurdles
Pursue opportunities to provide substantial growth over investment hurdles Leverage our proven ability to see new opportunities for growth Apply financial discipline Access to abundant capital 7 7
Slide 19: Control risk, build advantage, create winning offer and capture supply chain efficiencies
Control risk, build advantage, create winning offer and capture supply chain efficiencies Awareness of risk in businesses Leverage strategic assets and capabilities to build competitive advantage in businesses Create an offer that is desirable to target markets, differentiated from the competition a
Slide 20: Grow business and capture scale and integration advantages
Grow business and capture scale and integration advantages ie i “ return to SA Coe Generate satisfactory ROC in growth sectors Leverage economies of scale and value chain capabilities to drive costs down 7 19
Slide 21: Extend our reach into new growth opportunities
Extend our reach into new growth opportunities Extend into related growth opportunities — New markets — New customers — New products/services Investigate acquisition and divestment opportunities that satisfy investment hurdles Explore opportunities along the value chain — Downstream — Upstream 7
Slide 22: Group results
Group results y a, ay ey oe Wesfarmers
Slide 23: NPAT up 23.9% on previous year
NPAT up 23.9% on previous year Operating revenue 8,158.6 8.6 EBITDA (excluding sale of ARG) 1,259.7 30.9 EBIT (excluding sale of ARG) 1,070.8 27.6 Net profit after tax 701.8 23.9 Net profit on sale of ARG (excluding sale of ARG) Net profit after tax 701.8 49.3 Operating cash flow 935.0 20.8 Earnings
Slide 24: Most divisions exceeded ROC performance target of 20%
Most divisions exceeded ROC performance target of 20% in 2006 Return on Capital 70 (4) 30 Le Satisfactory 25 Satisfactory 20 +. 15 | improvement | Required Minimum 10 54 : : Soe : a Bo : Unsatisfactory 2002 2003 2004 2005 2006 3 Energy e Home Improvement o Insurance © Industrial & Safety @} Chemical
Slide 25: Home Improvement
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Slide 26: Home Improvement
Home Improvement URNS WIDEST RANGE LOWEST PRICES BEST SERVICE 7
Slide 27: Home Improvement Store Network
Home Improvement Store Network QUICK FACTS 142 warehouse stores 84 smaller format stores 100 ,000 product lines 23 ) 000 employees CONTRIBUTION TO GROUP EBIT HM Warehouse stores 142 “Small format stores 69 EI WA Salvage stores 13 IZ] HouseWorks stores 2 Excludes distribution centres and trade operat
Slide 28: Home Improvement Financial Performance
Home Improvement ue Financial Performance EBIT EBIT/Capital ASm % 450 25 400 | 350 - ; 20 300 - L415 250 - 200 - | 10 150 5 100 - Ls 50 - 0 - Lo 2002 2003 2004 2005 2006 “22 EBITA (AGAAP) Ma EBIT (AIFRS) ~~ EBIT/Capital (R12) 7
Slide 29: Home Improvement Growth Strategies
Home Improvement ue Growth Strategies Opportunities Strategies Expanding store network — open 10 to 14 warehouse stores pa Enhancing and expanding product ranges and services Growth in retail markets Lifting in-store service levels Accelerated store refurbishments — approx 30 in 2006/07 Development
Slide 30: Coal
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Slide 32: Coal Financial Performance
Coal Financial Performance EBIT ASm 700 600 5 500 | 400 5 300 | 200 + 100 5 0 2002 2003* 2004 2005 2006 @ EBITA (AGAAP) il EBIT (AIFRS) * Excluding profit on the sale of Girrah of A$80.5m 04
Slide 33: Coal Growth Strategies
Coal Growth Strategies Continued firm export coal prices in the short term Maximise Bengalla and Curragh production Continued cost pressures Continue best practice production cost per product tonne across portfolio Tight market due to resource sector boom and infrastructure constraints in QLD and NS
Slide 34: Insurance
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Slide 35: Insurance
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Slide 36: Insurance Financial Performance
Insurance ae Financial Performance ; CONTRIBUTION EBIT EBIT/Capital TO GROUP EBIT ASm . | 160 . 140 - | 60 120 4 | 50 100 + + 40 me QUICK FACTS + 20 80 4 60 + 1 ,200 employees 102 branches 2002 2003 2004 2005 2006 #2 EBITA (AGAAP) 0 EBIT (AIFRS) ~®- EBIT/Capital (R12) 7
Slide 37: Insurance Growth Strategies
Insurance Growth Strategies Opportunities / Challenges Strategies Target new segments for profitable growth Softening environment Continue building technical and expert sales team Sales force efforts targeted at growth sectors $700m cash offer for OAMPS Ltd, insurance broking and underwriting, to pr
Slide 38: Industrial & Safety
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Slide 39: Industrial & Safety
Industrial & Safety New Zealand Blackweoods Biackweods © Paykels labiens in Baked & Peete _Satety Supply © ali NZ Safety Mullings Fasteners ~ “TE FASITENOEH SPECIALISTS! al Packaging House Cy) cerns reverting coun 7
Slide 40: Industrial & Safety Financial Performance
Industrial & Safety a Financial Performance CONTRIBUTION EBIT EBIT/Capital TO GROUP EBIT ASm % 140 16 7% 120 + 100 + 2002 2003 2004 2005 2006 © EBITA (AGAAP) aw EBIT (AIFRS) -®- EBIT/Capital (R12)
Slide 41: Industrial & Safety Growth strategies
Industrial & Safety Growth strategies Further penetration of buoyant mining, construction and infrastructure sectors Sales force efforts targeted at growth sectors Network development in growth locations Product range expansion Target major customers to increase share of spend Incentive programs to
Slide 42: Chemicals & Fertilisers
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Slide 44: Chemicals & Fertilisers Financial Performance
Chemicals & Fertilisers Financial Performance EBIT EBIT/Capital % 20 100 wo (o] L i, ey | - 7) — L 7 2002 EBITA (AGAAP) 2003 2004 we EBIT (AIFRS) 2005 18 16 14 12 10 oN FB OD 2006 -#- EBIT/Capital (R12) ‘CONTRIBUTION TO GROUP EBIT o Ty, ee LD Ly 7 Hy Ly _ E Uy Ly, _ gy . on a a Gl aoe 7 We a ee a a,
Slide 45: Chemical & Fertilisers Growth Strategies
Chemical & Fertilisers Growth Strategies aa LL Kwinana AN expansion: > Duplication of capacity to 470,000 tpa > Completion expected second half 2007 Continued strong demand Feasibility study on expansion at QNP (50% owned) from resource sector ; Sodium cyanide: Capacity expansion through debottlenec
Slide 46: Energy
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Slide 47: Energy
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Slide 48: Energy Financial Performance
Energy Financial Performance CONTRIBUTION EBIT TO GROUP EBIT Peedi 4% 60 | 50 | 40 | 30 4 20 5 10 | 0 2002 2003 EBITA (AGAAP) 2005 All separation #@ EBIT (AIFRS) 7
Slide 49: Energy Growth Strategies
Energy Growth Strategies Opportunities / Challenges. Kleenheat Gas: develop new domestic markets for LNG Wesfarmers LPG: secure long-term feed gas supply New gas products and markets arrangements Air Liquide WA (40%): deliver new projects Engen: new projects driven by mining and resources Remote pow
Slide 50: Other Businesses
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Slide 51: Other Businesses
Other Businesses GRESHAM INVESTMENT HOUSE: WESPINE IMD UAT Aes Pre eth ZUNNINGS AUARCHOUSE PROPERTY TRUST Gresham Partners (50%) Gresham Private Equity — Fund 1 (50%) — Fund 2 (67%) Wespine (50%) Bunnings Warehouse Property Trust (23%) Investment bank and private equity investor (Australia) Softwood
Slide 52: Gresham Private Equity
Gresham Private Equity * Two divestments during 2005/06 — Virgin Active sold November 2005 (gross IRR of 34.5%) — EROC sold January 2006 (4 times multiple) + Further exits expected over next several years CURRENT INVESTMENT PORTFOLIO vehicle con vy
Slide 53: Gresham Private Equity
Gresham Private Equity « Fund 2 commitments of A$325m * Wesfarmers current commitment A$150m; Capital invested A$40.9m * Pacific Print Group (50%) acquired November 2005, enterprise value A$190m * Witchery acquired in July 2006 CURRENT INVESTMENT PORTFOLIO || Noeh¥/Leeming wawwnipelleeming co.nz
Slide 54: Capital Management
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Slide 55: Capital Management
Capital Management * Dividend policy — distribute franking credits through dividends + Approximate 90% payout ratio + Budgeted capital expenditure 2006/07 — A$830m $226m - Target efficient capital structure AS218m AS18m l@ Energy im Coal @ Insurance @ Hardware i@ Fertilisers & Chemicals @ Industrial
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