Wesfarmers Limited · ASX:WES
Wesfarmers — FY2013 Earnings Presentation
47 slides from Wesfarmers's earnings presentation, Aug 15, 2013
Slide 1: 2013 Full-Year Results Supplementary Information
2013 Full-Year Results Supplementary Information (To be read in conjunction with the Half-Year Results Teleconference presentation) 15 August 2013
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 26 7 Chemicals, Energy & Fertilisers 35 8 Industrial & Safety 41 9 Balance Sheet & Cash Flow 44
Slide 3: Coles
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Slide 4: Coles network
Coles network Coles 4 As at 30 June 2013 Selling Area 6 7 10 Supermarkets (sqm) 1,656,520 Liquor (sqm) – ex hotels 199,178 117 85 102 5 68 153 213 76 54 32 7 43 243 267 4 213 170 200 189 756 Supermarkets 15 15 810 Liquor stores 92 Hotels 636 Convenience stores
Slide 5: Store network movements
Coles 5 Store network movements Open at Open at 30 June 2012 Opened Closed Re-Branded 30 June 2013 Supermarkets Coles 710 19 (10) 3 722 Bi-Lo 39 - (2) (3) 34 Total Supermarkets 749 19 (12) - 756 Liquor 1st Choice 84 10 (2) - 92 Vintage Cellars 80 5 (6) - 79 Liquorland 628 30 (19) - 639 Hotels 92 1 (
Slide 6: Revenue reconciliation
Coles 6 Revenue reconciliation Year ended 30 June 2013 2012 ($m) Food & Convenience Total Food & Convenience Total Liquor Liquor Segment revenue (Gregorian)1 27,933 7,847 35,780 26,561 7,556 34,117 Other revenue (236) (13) (249) (205) (12) (217) Headline sales (Gregorian) 27,697 7,834 35,531 26,356
Slide 7: Home Improvement & Office Supplies
Home Improvement & Office Supplies
Slide 8: Bunnings network
Bunnings network Home Improvement & Office Supplies 8 As at 30 June 2013 210 Warehouse stores 67 Smaller format stores 3 36 Trade centres 33 6 10 26 8 4 10 3 2 63 18 7 16 25 2 51 6 8 6 1 2 1 2
Slide 9: Officeworks network
Officeworks network Home Improvement & Office Supplies 9 As at 30 June 2013 149 Officeworks stores 1 1 Harris Technology business centre 4 Fulfilment centres 2 Call centres 1 Print hub 26 1 14 1 8 48 1 1 1 1 50 1 1 2
Slide 10: Store network movements
Home Improvement & 10 Office Supplies Store network movements Under Open at Open at construction at 30 June 2012 Opened Closed 30 June 2013 30 June 2013 Home Improvement Bunnings Warehouse 206 10 (6) 210 20 Bunnings smaller formats 58 10 (1) 67 - Bunnings Trade Centres 36 3 (3) 36 - Office Supplies
Slide 11: Target
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Slide 12: Target network
Target network Target 12 As at 30 June 2013 3 1 35 19 29 12 18 10 56 48 48 24 183 Target Stores 125 Target Country 4 1
Slide 13: Store network movements
Target 13 Store network movements Under Open at Open at construction at 30 30 June 2012 Opened Closed 30 June 2013 June 2013 Target1,2 179 8 (4) 183 4 Target Country2 122 6 (3) 125 2 1 30 June 2013 includes three Target Urban stores & five Target Outlet stores. 2 Target store numbers include three r
Slide 14: Revenue reconciliation
Target 14 Revenue reconciliation Year ended 30 June ($m) 2013 2012 Segment revenue (Gregorian) 3,658 3,738 Less: Non sales revenue - - Headline sales (Gregorian) 3,658 3,738 Add: Additional retail week - 81 Add: Gregorian adjustment1 61 (34) Headline sales revenue (Retail2) 3,719 3,785 1 Adjustment
Slide 15: Kmart
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Slide 16: Kmart network
Kmart network Kmart 16 As at 30 June 2013 190 Kmart stores 263 Kmart Tyre Auto Services centres 2 5 39 56 21 28 14 19 50 75 12 44 75 5 5 3
Slide 17: Store network movements
Kmart 17 Store network movements Open at Open at 30 June 2012 Opened Closed 30 June 2013 Kmart 185 6 (1) 190 Kmart Tyre & Auto 260 5 (2) 263
Slide 18: Revenue reconciliation
Kmart 18 Revenue reconciliation Year ended 30 June ($m) 2013 2012 Segment revenue (Gregorian) 4,167 4,055 Less: Non sales revenue 3 4 Headline sales (Gregorian) 4,164 4,051 Add: Additional retail week - 43 Add: Gregorian adjustment1 73 31 Headline sales revenue (Retail2) 4,237 4,125 1 Adjustment to
Slide 19: Insurance
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Slide 20: Insurance business overview
Insurance 20 Insurance business overview Group/ Company Wesfarmers Insurance Australian New Zealand Premium Operations Broking Underwriting Underwriting Funding Lumley WI Business Affinity & Lumley WFI Lumley Business AUS NZ UK Premium Units Direct Solutions Funding Brands
Slide 21: Geographical presence
Geographical presence Insurance 21 As at 30 June 2013 3 1 UK 4 1 11 5 22 1 2 1 1 16 8 6 19 17 7 18 6 Lumley Insurance (Australia) 13 2 Lumley General New Zealand 13 6 WFI 89 3 6 1 OAMPS1 32 2 Crombie Lockwood 23 1 OAMPS New Caledonia location not shown.
Slide 22: Underwriting performance summary
Insurance 22 Underwriting performance summary Year ended 30 June ($m) 2013 2012 % Gross Written Premium 1,644 1,504 9.3 Net Earned Premium 1,391 1,186 17.3 Net Claims2 (922) (984) 6.3 Net Commission & Expenses2 (404) (335) (20.6) Underwriting Result 65 (133) n.m. Insurance Margin 109 (83) n.m. EBITA
Slide 23: Broking performance summary
Insurance 23 Broking performance summary Year ended 30 June ($m) 2013 2012 % Commission & Fee Income 258 235 9.8 Other Income 35 32 9.4 Total Income 293 267 9.7 Expenses (207) (188) (10.1) EBITA 86 79 8.9 EBIT 73 67 9.0 EBITA Margin (%) 29.3 29.6
Slide 24: Underwriting KPIs
Insurance 24 Underwriting KPIs Year ended 30 June (%) 2013 20121 % pt Gross Earned Loss Ratio2 67.3 86.2 (18.9) Net Earned Loss Ratio2 66.3 82.9 (16.6) Reinsurance Expenses (% GEP) 12.5 19.0 (6.5) Commission Expense (% GWP) 12.2 12.5 (0.3) Total Earned Expenses (% GEP)2 26.1 25.3 0.8 Combined Operat
Slide 25: Gross written premium (underwriting)
Insurance 25 Gross written premium (underwriting) Liability Marine 13% 3% Engineering 4% Personal 28% Commercial Motor Total: $1,644m 24% Crop 2% Commercial 26%
Slide 26: Resources
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Slide 27: Business environment
Resources 27 Business environment • Continued challenging global trading conditions for steel mills • Metallurgical coal supplies currently exceed steel production levels – Japan benefitting from weaker Yen – Growth in China & India moderating – Continuing poor demand in Eurozone • September 2013 qu
Slide 28: Australian coal market prices
Resources 28 Australian coal market prices Australian steaming coal prices Australian hard coking coal price US$/tonne (Nominal) FOC Australia (annual verse spot) US$/tonne (Nominal) FOC Australia 250 400 350 200 300 150 250 200 100 150 100 50 50 0 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Slide 29: Curragh export metallurgical sales product mix
Curragh export metallurgical sales Resources 29 product mix Semi Hard Semi Hard Hard 40% Hard 42% 31% 31% PCI PCI 29% 27% 2013/2014 Forecast 2013/2014 Forecast 2012/13 Actual 2013/14 Forecast 7.2 million tonnes 7.5 – 8.5 million tonnes
Slide 30: Coal – production volumes
Resources 30 Coal – production volumes Year Ended Beneficial ('000 tonnes) Mine Coal Type Interest Jun 2013 Jun 2012 Curragh, QLD 100% Metallurgical 7,380 7,217 Steaming 3,254 2,884 Bengalla, NSW 1 40% Steaming 3,096 2,335 Total1 13,730 12,436 1 Wesfarmers attributable production.
Slide 31: Coal – sales volumes
Resources 31 Coal – sales volumes Year Ended Beneficial ('000 tonnes) Mine Coal Type Interest Jun 2013 Jun 2012 Curragh, QLD1 100% Metallurgical 7,212 7,151 Steaming 3,166 2,946 Bengalla, NSW2 40% Steaming 3,028 2,356 Total2 13,406 12,453 1 Curragh metallurgical coal sales excludes traded coal of 12
Slide 32: Curragh ongoing cost-control focus
Resources 32 Curragh ongoing cost-control focus • Achieved unit mine cash cost reduction of ~30% in 2H FY13 (from 1H FY12 peak) • Targeting a FY14 cost profile that embeds a 20% reduction (from 1H FY12 peak) • FY14 cost performance expected to be sustained by continuation of: – Reduced contractor ac
Slide 33: FX hedging profile: June 2013
Resources 33 FX hedging profile: 30 June 2013 Curragh Bengalla Current US$ Average Current US$ Average Year end sold forward A$ / US$ Year end sold forward A$ / US$ 30 Jun (US$m) hedge rate 30 Jun (US$m) hedge rate 2014 741 0.91 2014 158 0.90 2015 454 0.87 2015 156 0.89 2016 292 0.90 2016 124 0.90 2
Slide 34: Resources financial summary
Resources 34 Resources financial summary Full Year 2013 2012 Commentary Production tonnes – (‘000 tonnes) Curragh and Bengalla1 13,730 12,436 Increased production achieved with expansion project completions at both Premier - 1,620 mines. Premier production up to divestment on 30 December 2011 Revenu
Slide 35: Chemicals, Energy & Fertilisers
Chemicals, Energy & Fertilisers
Slide 36: Fertiliser sales
Chemicals, Energy 36 & Fertilisers Fertiliser sales kt 1,200 2nd Half 1st Half 1,000 800 600 649 714 713 610 513 400 200 226 264 244 227 220 0 FY2009 FY2010 FY2011 FY2012 FY2013 Volumes similar to previous year
Slide 37: Global fertiliser & ammonia pricing
Chemicals, Energy 37 & Fertilisers Global fertiliser & ammonia pricing US$/t 1,400 Urea (FOB Middle East) DAP (FOB US Gulf) Ammonia (FOB Middle East) 1,200 1,000 800 600 400 200 0 Jun-08 Dec-08 Jun-09 Dec-09 Jun-10 Dec-10 Jun-11 Dec-11 Jun-12 Dec-12 Jun-13 Declines in US$ prices following increases
Slide 38: PVC-VCM spread
Chemicals, Energy 38 & Fertilisers PVC-VCM spread The ‘PVC – VCM Spread’ refers to the difference between the Asian PVC selling price & VCM input cost $/t 300 FY Average US$/t FY Average A$/t 250 200 150 100 50 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Source: Harriman Front Page Asia
Slide 39: World LPG prices – Saudi CP
Chemicals, Energy 39 World LPG prices – Saudi CP & Fertilisers $/tonne 1,400 Saudi CP US$/t (propane) Saudi CP A$/t (propane) 1,200 1,000 800 600 400 200 0 Jun-03 Jun-04 Jun-05 Jun-06 Jun-07 Jun-08 Jun-09 Jun-10 Jun-11 Jun-12 Jun-13 LPG prices declined in 2H13 following sharp growth in 1H13
Slide 40: LPG production
Chemicals, Energy 40 & Fertilisers LPG production Long term trend on content decline continues
Slide 41: Industrial & Safety
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Slide 42: Three business streams
Industrial & Safety 42 Three business streams Generalists Safety specialists Industrial specialists
Slide 43: Distribution network
Distribution network Industrial & Safety 43 As at 30 June 2013 222 owned branches plus 145 additional gas distribution points Generalists 99 1 Indonesia 73 2 3 26 1 17 10 Safety Specialists 68 18 9 4 9 7 42 7 2 1 52 4 4 24 2 5 2 2 16 7 1 27 4 2 Industrial Specialists 55 5 44 8 + 145 12 6 26 24 26 2
Slide 44: Balance sheet & cash flow
Balance sheet & cash flow Wesfarmers MOOG. 6
Slide 45: Overview of the Group balance sheet
45 Overview of the Group balance sheet Year ended 30 June ($m)1 2013 2012 Commentary Inventories 5,047 5,006 Trade & other payables (6,007) (5,445) Receivables & prepayments 2,571 2,564 Detailed working capital discussion provided on slide 46 Other 614 417 Net working capital 2,225 2,542 Net insuran
Slide 46: Balance sheet - working capital
46 Balance sheet - working capital Year ended 30 June ($m) 2013 2012 Commentary Inventories 5,047 5,006 • Inventory increased by $41 million (2013 v 2012) ‒ Coles/HI: Sales & store network growth partially offset by inventory efficiencies ‒ Kmart: Higher stock in transit due to increased direct sour
Slide 47: For all the latest news visit www.wesfarmers.com.au
For all the latest news visit www.wesfarmers.com.au