Wesfarmers Limited · ASX:WES
Wesfarmers — Citigroup Investment Conference London and Goldman Sachs JBWere Investment Conference New (March 2010)
112 slides from Wesfarmers's conference presentation, Mar 8, 2010
Slide 1: ASX cover letter for investment conferences
For personal use only 8 March 2010 The Manager Company Announcements Office Australian Securities Exchange Dear Sir, CITIGROUP AND GOLDMAN SACHS JBWERE INVESTMENT CONFERENCES LONDON, 8 – 9 MARCH 2010 AND NEW YORK, 11 – 12 MARCH 2010 Following is a presentation that is to be given at the Citigroup in
Slide 2: Investment Conference: Philosophy, Performance and Direction
For personal use only Investment Conference Phil Philosophy, h P Performance f and d Di Direction ti Citigroup, London – 8 & 9 March Goldman Sachs JBWere, New York – 11 & 12 March March 2010
Slide 3: Disclaimer
Disclaimer For personal use only This presentation has been prepared by Wesfarmers Limited. The information contained in this presentation is for information purposes only and does not constitute an offer to issue or arrange to issue, securities or other financial products, nor is it intended to con
Slide 4: Philosophy Based On A Single Focus
For personal use only Philosophy Based On A Single Focus Satisfactory Returns To Shareholders
Slide 5: Long-term, consistent strategies
Long-term, consistent strategies For personal use only MANAGING BALANCE SHEET EFFECTIVELY 4
Slide 6: The Wesfarmers Way
The Wesfarmers Way… For personal use only Portfolio of High Performing Quality Assets Value creating business model Autonomy Stand alone businesses High calibre leadership teams with operational control Lean corporate office O t t di g P Outstanding People l A Accountability t bilit R Reporting ti S
Slide 7: Portfolio of leading brands
Portfolio of leading brands For personal use only Retail Businesses Industrial Businesses Ins rance Insurance 6
Slide 8: Management Team
Management Team For personal use only Managing Director & CEO Richard Goyder Finance Director Terry y Bowen Divisional Managing Directors Food, Liquor and Fuel Retailing Coles Ian McLeod Big Box Retailing p Home Improvement & Office Supplies pp John Gillam Department Store Retailing Target Launa Inm
Slide 9: Group Results
For personal use only Group Results
Slide 10: Group Performance Highlights
Group Performance Highlights For personal use only • Group profit after tax of $879 million, up 1% despite the foreshadowed fall in Resources earnings • Operating revenue of $26.5 billion • Group EBIT of $1.5 billion, down 11% – Excl. Resources, Group EBIT up 44% with EBIT from Retail businesses up
Slide 11: Group Performance Highlights (cont.)
Group Performance Highlights (cont.) (cont ) For personal use only • Results reflect the strength of having diversity of earnings • Coles turnaround on track with EBIT increasing 13% – Focus on quality, service and value driving positive volume growth • Resources affected by lower export coal prices
Slide 12: Group Performance Summary
Group Performance Summary For personal use only Half Year ended 31 December ($m) 2009 2008 % Operating revenue 26,533 26,363 0.6 EBITDA* 1,996 , 2,160 , ((7.6)) EBIT* 1,547 1,737 (10.9) Net profit after tax* 879 871 0.9 Operating cash flow 2,083 1,770 17.7 Earnings per share (excl. employee res. sha
Slide 13: Divisional EBIT
Divisional EBIT For personal use only Half Year ended 31 December ($m) 2009 2008 % Coles 486 431 12.8 Home Improvement 422 370 14.1 pp Office Supplies 27 25 9.0 Target 279 215 29.8 Kmart 154 75 105.3 Resources* Resources 2 664 (99 7) (99.7) Insurance 58 67 (13.4) Industrial & Safety 51 68 (25.0) Ch
Slide 14: Creating Value from the Coles Acquisition
Creating Value from the Coles Acquisition For personal use only Achievements to Date 9 Centralised structure replaced with autonomous divisions 9 New, strengthened management teams at Coles, Kmart and Business Offi Officeworks k restructure 9 Leaner and more efficient divisional head offices 9 Decis
Slide 15: Operating Divisions
For personal use only Operating Divisions
Slide 16: Coles
Coles For personal use only • Turnaround on track 1. Building a solid foundation • Transforming the product offer Strategies 2. Delivering consistently well • Comprehensive renewal 3. Driving the Coles difference underway • Food & Liquor comp sales growth of 6.0% (5.9% in 2Q10); 1H10 deflation 0.9%
Slide 17: Coles – 1H10 Sales Performance
Coles – 1H10 Sales Performance For personal use only • Five consecutive quarters of improved volume growth for Food F&L Comp Volume Growth & Liquor 8.0% 7.0% • Good transaction growth 6.0% • Strong supermarket sales 5.0% • Solid liquor sales 4.0% • Strong underlying volume growth 3.0% 2.0% New super
Slide 18: Coles – Strategy years – phases of recovery
Coles – Strategy 5 years – 3 phases of recovery For personal use only Building a Solid Delivering Driving the Coles F Foundation d ti C Consistently i t tl Well W ll Diff Difference Performance • Culture of continuous • Embed the new culture improvement • Create a strong top team • Team member devel
Slide 19: Coles – Strategy
Coles – Strategy Phase 1 Progress For personal use only Create a strong top team Further executive appointments, creating strength and depth of top team Appointed over 150 new regional and store managers Talent mapping to identify & promote future leaders Cultural change Improved incentives for stor
Slide 20: Home Improvement and Office Supplies: Bunnings
Home Improvement and Office Supplies For personal use only Bunnings 1. Profitable sales growth • Maintain focus on strengthening g g 2. Better stock flow the customer offer and Strategies 3. Engaging and developing a strong team improving operational efficiency 4. Lifting effectiveness and efficienc
Slide 21: Home Improvement and Office Supplies: Officeworks
Home Improvement and Office Supplies For personal use only Officeworks 1. Improving the customer offer • Good G d progress on improving i i 2. Improve customer service operational effectiveness Strategies 3. Team development & engagement 4. Make things simple & reduce costs • Continued focus on 5. D
Slide 22: Target
Target For personal use only • Continued to gain 1. Focus on fundamentals 2 Brand 2. B d reinforcement i f market share 3. Differentiation • Absolute focus on the Strategies 4. Store network development 5 Customer 5. C t service i customer and offer 6. Team member development 7. Business improvement
Slide 23: Kmart
Kmart For personal use only • Improved underlying 1. Outstanding customer experience profitability as a result of 2. Ranges customers want implemented turnaround 3. Great value everyday Strategies 4. Clear communication initiatives 5. Every site a success • Continue to re-set Kmart for 6. Best peopl
Slide 24: Resources
Resources For personal use only • Forecast Curragh 1. Maximise export sales and optimise sales mix metallurgical sales 2. Cost reduction programs increased to 6.3 – 6.8mt in Strategies 3. Expansion opportunities FY10 4. Extend product and market reach 5. Sustainability • Global steel production • Ea
Slide 25: Insurance
Insurance For personal use only • Profitable growth to come from Underwriting • Stronger partnerships Lumley business improvement • Disciplined underwriting and pricing • Building a culture of achievement initiatives Strategies • Managing claims effectively Broking • Bolt-on acquisitions continue to
Slide 26: Chemicals & Fertilisers
Chemicals & Fertilisers For personal use only 1. Growth through expansions • Solid return to earnings g from 2. Optimise cost and capital Chemicals in 1H10 Strategies 3. Sustainability • Lower domestic fertiliser 4. Improve p capabilities p and p people p development p prices & $A25m inventory • Amm
Slide 27: Industrial & Safety
Industrial & Safety For personal use only 1. Increase sales to existing customers • Slower industrial business 2. Invest in higher growth sectors activity following global Strategies 3. Increase SME penetration financial crisis 4. Managing margin • Strong pipeline of resources 5. Improve competitive
Slide 28: Energy
Energy For personal use only • Earnings and return on 1 Improve – existing businesses 1. capital above internal Strategies 2. Expand – deliver projects expectations in 1H10 3. Evaluate - new opportunities • International LPG prices • Recovery of international LPG prices continue to increase since 2H
Slide 29: Capital Management
For personal use only Capital Management
Slide 30: Capital Management
Capital Management For personal use only • Balance sheet strengthened further through strong cash generation • Net Debt to Equity of 15.5% at 31 December 2009 • Cash Interest Cover Ratio of 6.6 times (R12 basis) • Net debt to R12 operating cash flow of 1 1.1 1 times at 31 December 2009 • Interim div
Slide 31: Debt Finance
Debt Finance For personal use only • Gross debt of $5.7bn, net debt of $3.8bn – Cash at bank & on deposit $1.8bn – Committed undrawn facilities of $1.4bn • 1H10 all in cost of debt, including margins and fees, of ~8.7% after adjusting for one one-off off costs • 75% hedged for 2H10 • Ongoing review
Slide 32: Debt Maturity Profile Analysis
Debt Maturity Profile Analysis (as at 31 December) For personal use only ($m) 3,000 2,000 1,000 0 Current FY10 FY11 FY12 FY13 FY14 FY15 (1,000) Capital Markets Wholesale Syndicated Cash at bank and on deposit (2 000) (2,000) 31
Slide 33: Cash Flow
Cash Flow (6 months to 31 December) For personal use only • I Improved d cash h fl flow d despite it significant i ifi t reduction d ti ffrom R Resources • Successful focus on improving cash flow generation across the Group to date $m % 2,500 200 2,000 160 1,500 120 1,000 80 500 40 0 0 2005 2006 200
Slide 34: Working Capital Cash Flows
Working Capital Cash Flows For personal use only • Retail strategies progressed, continue to deliver improvements – Significant working capital released since acquisition – Further improvements in operating cycle expected – Inventory well controlled – Seasonally stronger working capital cash flows i
Slide 35: Capital Expenditure
Capital Expenditure For personal use only • Return on capital focus ensures effective Half Year ended 31 December (A$m) 2009 2008 use of capital Coles 442 204 • Continued investment in organic growth Home Improvement & Office Supplies 207 214 and dddevelopment l t opportunities t iti Target 47 51 –
Slide 36: Outlook
Outlook For personal use only • Group is well-positioned to benefit from any further upturn in the economy • Outlook for export coal is positive – if realised,, will result in an increase in Resource earnings g from 4Q10 • Recovery in Insurance and Industrial businesses • Optimistic about the future
Slide 37: For all the latest news visit www.wesfarmers.com.au
For personal use only For all the latest news visit www.wesfarmers.com.au 36
Slide 38: Investment Conference Discussion Pack
For personal use only Investment Conference Philosophy, Performance and Direction Citigroup, London – 8 & 9 March G ld Goldman Sachs S h JBWere, JBW N New YYork k – 11 & 12 March M h March 2010 Discussion Pack
Slide 39: Disclaimer
Disclaimer For personal use only This presentation has been prepared by Wesfarmers Limited. The information contained in this presentation is for information purposes only and does not constitute an offer to issue or arrange to issue, securities or other financial products, nor is it intended to con
Slide 40: Index
Index For personal use only 1 Philosophy, Performance and Direction 4 2 Sustainability 9 3 Group Overview 13 4 2010 0 0 Half a Year ea Results esu s 18 8 5 Operating Divisions 31 6 Capital Management 67 7 Outlook 73 8 Investor Relations Contacts and Information 75 3
Slide 41: Philosophy, Performance and Direction
For personal use only Philosophy, Performance and Direction
Slide 42: Long-term, consistent strategies
Long-term, consistent strategies For personal use only MANAGING BALANCE SHEET EFFECTIVELY 5
Slide 43: Key Attributes
Key Attributes For personal use only Growth Quality Earnings Opportunities Assets Improvement • Improving retail basics; • National store networks; • 5 year turnaround on track; Net ork in Network investment; estment; Strong brands; Strength & 1H10 comp sales of 6.0%; 6 0%; EBIT Coles Performance tu
Slide 44: Key Attributes
Key Attributes For personal use only Growth Quality Earnings Opportunities Assets Improvement • Long term demand; Curragh • Sizeable production • Maintaining lowest quartile Resources expansion 8.0-8.5mt p.a.; capacity; Consistent cash cost production of Bengalla feasibility studies quality, low cos
Slide 45: A History of Strong Returns
A History of Strong Returns For personal use only EPS WES (cents per share) Share Price ($A) 300 48 250 40 200 32 150 24 100 16 50 8 0 0 00 01 02 03 04 05 06 07 08 09 1H10 ARG EPS EPS (AIFRS) Landmark EPS Girrah EPS EPS (AGAAP) Wesfarmers Share Price * Adjusted Adj t d ffor capital it l reconstructi
Slide 46: Sustainability
For personal use only Sustainability
Slide 47: Sustainability
Sustainability For personal use only Financial performance • All our actions are directed towards satisfying our corporate objective of providing a satisfactory ti f t return t t shareholders. to h h ld T be To b sustainable, t i bl Wesfarmers W f mustt continue ti t to achieve high standards of fin
Slide 48: Sustainability
Sustainability For personal use only Environmental responsibility • Our diverse range of businesses expose us to a number of challenging or Wesfarmers is a potentially challenging environmental issues, issues including waste disposal, disposal member of the Dow packaging, environmental contamination
Slide 49: Sustainability
Sustainability For personal use only Sustainability reporting • Voluntarily publicly reporting on sustainability issues since 1998/99. The stand-alone Sustainability Report is published to coincide with the company's Annual General Meeting. The 2008 report runs to more than 70 pages of very detailed
Slide 50: Group Overview
For personal use only Group Overview
Slide 51: Financial Summary
Financial Summary For personal use only FY09 1H09 1H10 % Change pcp Operating Results Revenue A$m 50,982 26,363 26,533 0.6 EBITDA^ A$m 3,803 2,160 1,996 7.6 Earnings before interest and tax^ A$m 2,948 1,737 1,547 10.9 Net profit after tax^ A$m 1 523 1,523 871 879 09 0.9 Operating Cash flows A$m 3,04
Slide 52: Divisional Summary – 1H10
Divisional Summary – 1H10 For personal use only 1H10 1H10 Activities Revenue 1H10 EBIT EBIT^ EBIT (A$m) (A$m) Contribution The division comprises one of Australia's largest supermarket Coles b i businesses, li liquor retailing t ili outlets, tl t ffuell and d convenience i outlets. tl t 15,161 486 3
Slide 53: Divisional Summary – 1H10 (cont.)
Divisional Summary – 1H10 (cont.) For personal use only 1H10 1H10 Activities 1H10 EBIT^ Revenue EBIT (A$m) (A$m) Contribution Mining of metallurgical and steaming coal to domestic and export Resources* markets. 624 2 0% Provider of underwriting, broking, premium funding and financial Insurance servi
Slide 54: Creating Value from the Coles Acquisition
Creating Value from the Coles Acquisition For personal use only Achievements to Date 9 Centralised structure replaced with autonomous divisions 9 New, strengthened management teams at Coles, Kmart and Business Offi Officeworks k restructure 9 Leaner and more efficient divisional head offices 9 Decis
Slide 55: 2010 Half Year Results
For personal use only 2010 Half Year Results
Slide 56: 2010 Half Year Results Performance Highlights
2010 Half Year Results Performance Highlights For personal use only Group Performance Highlights Half Year ended 31 December (A$m) 2009 2008 % Operating revenue 26,533 26,363 0.6 • Group G NPAT off $879 million, illi up 1% EBITDA* 1,996 2,160 (7.6) EBIT* 1,547 1,737 (10.9) – Despite the foreshadowed
Slide 57: 2010 Half Year Results Performance Highlights
2010 Half Year Results Performance Highlights For personal use only Divisional Performance Overview Half Year ended 31 December (A$m) 2009 2008 % • Results reflect the strength g of having g Coles 486 431 12.8 diversity of earnings Home Improvement 422 370 14.1 Office Supplies 27 25 9.0 • Coles turn
Slide 58: Coles – 2010 Half Year Performance
Coles – 2010 Half Year Performance For personal use only Highlights Financial Performance Half Year ended 31 December (A$m) 2009 2008 % • Food & Liquor q Sales Revenue 15,161 , 14,626 , 3.7 EBIT 1 486 431 12.8 – Q2 comparative stores sales growth of 5.9% Food & Liquor Revenue 3 12,028 11,191 7.5 – S
Slide 59: Home Improvement & Office Supplies 2010 Half Year Performance
Home Improvement & Office Supplies 2010 Half Year Performance For personal use only Highlights Financial Performance Home Improvement Half Year ended 31 December (A$m) 2009 2008 % R Revenue H Home IImprovementt 3 402 3,402 3 009 3,009 13 1 13.1 • 14.1 % cash sales growth Office Supplies 662 602 10.0
Slide 60: Target – 2010 Half Year Performance
Target – 2010 Half Year Performance For personal use only Highlights Financial Performance Half Year ended 31 ) December (A$m) 2009 2008 % • EBIT margin strengthened to 12.8% – Margins maintained across product ranges Revenue 2,182 2,094 4.2 – Higher mix of apparel sales EBITDA 311 245 26.9 – Improv
Slide 61: Kmart – 2010 Half Year Performance
Kmart – 2010 Half Year Performance For personal use only Highlights Financial Performance • Improved underlying profitability Half Year ended 31 December (A$m) 2009 2008 % – Improved margins from exit of unprofitable product and Revenue 2,226 2,249 (1.0) promotions EBITDA 182 100 82.0 – Reduction in
Slide 62: Resources – 2010 Half Year Performance
Resources – 2010 Half Year Performance For personal use only Highlights Financial Performance • Continued improvement in safety performance Half Year ended 31 December (A$m) 2009 2008 % Revenue 624 1 427 1,427 (56 3) (56.3) • $286m Curragh expansion to 8.0 - 8.5mtpa export capacity approved EBITDA 6
Slide 63: Insurance – 2010 Half Year Performance
Insurance – 2010 Half Year Performance Highlights Financial Performance For personal use only % • Underlying earnings improvement after adjusting for: Half Year ended 31 December (A$m) 2009 2008^ Revenue 868 864 0.5 – Impact of lower interest rates on investment income (A$19m) EBITA Underwriting 38
Slide 64: Chemicals & Fertilisers – 2010 Half Year Performance
Chemicals & Fertilisers – 2010 Half Year Performance For personal use only Highlights Financial Performance • Ammonia production returned to historical levels Half Year ended 31 December (A$m) 2009 2008 % following restoration of full gas supply from 1 July 2009 Revenue Chemicals 292 291 0.3 Fertili
Slide 65: Industrial & Safety – 2010 Half Year Performance
Industrial & Safety – 2010 Half Year Performance For personal use only Highlights Financial Performance • Results affected byy business activityy slowdown and Half HalfYear Yearended ended31 31December December(A$m) ($m) 2009 2008 % margin pressures Revenue 637 687 (7.3) EBITDA 58 75 (22.7) – Improv
Slide 66: Energy – 2010 Half Year Performance
Energy – 2010 Half Year Performance For personal use only Highlights Financial Performance Half HalfYear Yearended ended31 31December December(A$m) ($m) 2009 2008 % • Recovery of international LPG prices since second half of last year Revenue 304 322 (5.6) EBITDA 79 52 51.9 • Increased production an
Slide 67: Other Businesses – 2010 Half Year Performance
Other Ot e Businesses us esses – 2010 0 0 Half al Year ea Performance e o a ce For personal use only Highlights Financial Performance Holding Half Year ended 31 December (A$m) 2009 2008 % Gresham Private Equity Associates share of profit/(loss): Gresham Private Equity Funds Various 29 (1) • Carrying
Slide 68: Operating Divisions
For personal use only Operating Divisions
Slide 69: Coles
For personal use only Coles 32
Slide 70: Our national footprint
Our national footprint… As at 31 December b 2009 For personal use only Selling Area Supermarkets (sqm) 1,593,007 7 8 11 Liquor (sqm) – ex hotels 182,246 146 230 78 81 94 6 115 67 59 30 6 43 249 253 5 212 163 193 166 749 Supermarkets 781 Liquor stores 14 15 95 Hotels 626 Convenience 33
Slide 71: Coles – Strategy years – phases of recovery
Coles – Strategy 5 years – 3 phases of recovery For personal use only Building a Solid Delivering Driving the Coles F Foundation d ti C Consistently i t tl Well W ll Diff Difference Performance • Culture of continuous • Embed the new culture improvement • Create a strong top team • Team member devel
Slide 72: Coles – Strategy
Coles – Strategy Ph Phase 1P Progress For personal use only Create a strong top team Further executive appointments, creating strength and depth of top team Appointed over 150 new regional and store managers Talent mapping to identify & promote future leaders Cultural change Improved incentives for
Slide 73: Home Improvement & Office Supplies
Home Improvement & Office Supplies For personal use only 36
Slide 74: Bunnings Network
Bunnings Network at 31 December 2009 For personal use only 181 Warehouse stores 58 Small format stores 2 25 Trade Centres 29 6 8 23 7 3 9 3 2 55 16 5 13 25 44 6 4 2 1 1 37
Slide 75: Bunnings sales & EBIT growth
Bunnings sales & EBIT growth For personal use only Sales ($m) EBIT ($m) Acquisition of BBC 1st Warehouse 38
Slide 76: Home Improvement Performance
Home Improvement Performance For personal use only EBIT A$m ROC % Growth Strategies 700 35 H Home Improvement I S Strategies i Profitable sales growth Lifting customer service 600 30 Enhanced merchandising 500 25 Network expansion & enhancement Better stock flow Improving the end to end supply chain
Slide 77: Office Supplies
Office Supplies For personal use only Growth Strategies Officeworks & Harris Technology Network Officeworks Strategies as at 31 December 2009 Improving the Enhance and expand the range (products & services) customer offer Provide more useful customer information Eco friendly products & services Spec
Slide 78: Target
For personal use only Target 41
Slide 79: Target - Strategies
Target - Strategies For personal use only Growth Strategies Target Network – 31 December 2009 Strategic initiatives Comments Focus on Meeting customer needs on range, price fundamentals and service Evolution of “100% Happy” 2 1 Brand Uniq e philosoph Unique philosophy and positioning reinforcement L
Slide 80: Kmart
For personal use only Kmart 43
Slide 81: Kmart Store Network
Kmart Store Network at 31 December 2009 For personal use only 186 Kmart stores 252 KTAS centres 2 3 36 52 21 28 13 19 51 71 12 43 73 5 6 3 44
Slide 82: Kmart Strategies
Kmart Strategies For personal use only Growth Strategies Strategies Comments Customer Continue to improve the in-store experience and rebuild customer trust Customer compliments on the rise Customer Extended trading hours for enhanced convenience Outstanding Product Discontinued discounting products
Slide 83: Resources
For personal use only Resources 46
Slide 84: Resources - Locations
Resources - Locations For personal use only Coal Premier Coal Curragh Bengalla (40%) 47
Slide 85: Resources - Performance
Resources - Performance For personal use only Growth Strategies EBIT A$m ROC % Opportunities Strategies 1,000 90 Maximise export sales and Long-term contracts ongoing 900 80 optimise sales mix Price relativity maintained Maximise higher value products 800 70 Cost reduction programmes Improve operati
Slide 86: Resources - Sales
Resources - Sales Coal Sales Volumes by Mine (FY09) Hard Coking Coal Prices (US$/t FOB Australia) For personal use only Mine Domestic Export Export 400 Total 350 (mtpa) Steaming Steaming Metallurgical 300 250 Curragh, QLD 3.3^ n.a. 6.5 9.8 200 Premier, WA 3.4 n.a. n.a. 3.4 150 100 B Bengalla*, ll *
Slide 87: Hedging profile
Hedging profile as at 31 December 2009 For personal use only Curragh – Open Contracts Bengalla – Open Contracts 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 2010* 220 0.81 2010* 42 0.80 2011 33
Slide 88: Insurance
For personal use only Insurance 51
Slide 89: Geographical Presence
Geographical Presence as at 31 Dec 2009 For personal use only 3 1 1 6 3 13 4 19 1 2 1 1 4 14 8 18 11 6 17 6 1 Lumley Insurance Australia 12 6 Lumley General New Zealand 10 3 4 WFI 84 1 2 OAMPS 33 Crombie Lockwood 17 52
Slide 90: Insurance - Performance
Insurance - Performance Growth Strategies For personal use only Fundamental Objective Strategies EBITA (A$m) ROC (%) Stronger partnerships 160 35 Underwritting Profitable growth through Disciplined underwriting and pricing 140 30 leadership in chosen Managing claims effectively segments Growth in ch
Slide 91: Insurance – Underwriting Performance
Insurance – Underwriting Performance For personal use only Key Performance Indicators 1H10 Gross Written Premium by Class of Business Half Year ended 31 December (%) 2009 2008^ %pt Total $680m Gross Earned Loss Ratio 66.3 68.0 1.7 Personal Liability y Net Earned Loss Ratio 64 2 64.2 68 9 68.9 47 4.7
Slide 92: Chemicals & Fertilisers
Chemicals & Fertilisers For personal use only 55
Slide 93: Chemicals & Fertilisers - Locations
Chemicals & Fertilisers - Locations For personal use only ■ CSBP fertilisers Manufacturing plant 5 Import and distribution centres 5 Depots p 6 Regional Sales Representatives 27 Sales agents 135 ■ CSBP chemicals Manufacturing plants 10 ■ AV Manufacturing plants 2 ■ QNP (50%) Manufacturing f i plants
Slide 94: Chemicals & Fertilisers – Performance
Chemicals & Fertilisers – Performance For personal use only Growth Strategies EBIT A$m ROC % 140 20 Strategic Initiatives Comment Growth WIP Improve ammonia plant production performance 120 9 Sodium cyanide expansion (+8,000 tpa) 16 WIP Identify additional AN capacity opportunities 100 Optimise cost
Slide 95: Industrial & Safety Business Portfolio
Industrial & Safety Business Portfolio For personal use only Australia New Zealand “All your Safety Industrial workplace needs” Specialist Specialists (1) (1) Manufacturing and services 58
Slide 96: Industrial & Safety - Distribution Network
Industrial & Safety - Distribution Network For personal use only 241 locations (164 Australia, 77 New Zealand) Australia No No. 2 69 MRO, “All your workplace needs” 4 1 16 5 Electrical 14 5 12 7 9 5 9 3 Safety 45 2 1 54 22 Materials handling, lifting, rigging 4 2 17 1 6 4 Fasteners 16 4 1 7 Engineer
Slide 97: Industrial & Safety - Performance
Industrial & Safety - Performance For personal use only Growth Strategies Opportunities pp Strategies g EBIT A$m ROC % Increase sales to existing customers Maintained strong DIFOT performance and security of supply 140 18 to customers Leveraging specialist offering; product range extensions 16 120 I
Slide 98: Industrial & Safety - Mid term outlook
Industrial & Safety - Mid term outlook For personal use only Significant customer investment pipeline 5 Selected ANZ projects Oil & gas Infrastructure & Construction Utilities (inc. telecommunication) Resources Source: ABARE, NZIER, Industry Capability Network (NZ), State governments’ resources and
Slide 99: Energy
For personal use only Energy 62
Slide 100: Energy - locations
Energy - locations For personal use only I d Industrial, i l medical di l and d specialty i l gases Air separation units (ALWA) Air separation units (Coregas) Acetylene plant (ALWA) 1 2 1 1 1 Hydrogen/acetylene plants (Coregas) 1 Industrial gas depots/branches (ALWA) 1 Industrial gas depots/branches
Slide 101: Energy - Performance
Energy - Performance For personal use only Growth Strategies EBIT A$m ROC % Business Strategies Update on Strategies 100 30 Focus business on increasing Targeted marketing and sales effort with 90 market share expanded product portfolio Renewed focus on effectiveness of sales force 80 Improve custom
Slide 102: Energy – Businesses
Energy – Businesses For personal use only Activities Activities distributor and marketer of LPG and LNG and Activities Production, distribution and marketing of gas appliances to a broad range of domestic, design, construction, operatation and industrial and medical gases on Australia’s east commerc
Slide 103: Other Businesses
Other Businesses For personal use only Gresham: 50% interest in Gresham Partners, an independent investment Half yyear ended 31 December ((A$m): $ ) 2010 2009 b k focused bank f d on financial fi i l advisory d i services, i private i t equityit investment and property investment funds. Wesfarmers a
Slide 104: Capital Management
For personal use only Capital Management
Slide 105: Capital Management
Capital Management For personal use only • Balance sheet strengthened further through strong cash generation • Net Debt to Equity of 15.5% at 31 December 2009 • Cash Interest Cover Ratio of 6.6 times (R12 basis) • Net debt to R12 operating cash flow of 1.1 times at 31 December 2009 • Interim dividen
Slide 106: Maturity Profile Analysis
Maturity Profile Analysis (as at 31 December 2009) For personal use only ($m) 3,000 2,000 1,000 0 Current FY10 FY11 FY12 FY13 FY14 FY15 (1,000) Capital Markets Wholesale Syndicated Cash at bank and on deposit (2 000) (2,000) 69
Slide 107: Debt Finance
Debt Finance For personal use only • Gross debt of $5.7bn, net debt of $3.8bn – Cash at bank & on deposit $1.8bn – Committed undrawn facilities of $1.4bn • 1H10 all in cost of debt, including margins and fees, of ~8.7% after adjusting for one one-off off costs • 75% hedged for 2H10 • Ongoing review
Slide 108: Working Capital Cash Flows
Working Capital Cash Flows For personal use only • Retail strategies progressed, continue to deliver improvements – Significant working capital released since acquisition – Further u t e improvements p o e e ts in ope operating at g cyc cycle eeexpected pected – Inventory well controlled – Seasonall
Slide 109: Capital Expenditure
Capital Expenditure For personal use only • Return on capital focus ensures effective Half Year ended 31 December (A$m) 2009 2008 use of capital Coles 442 204 • Continued investment in organic growth Home Improvement & Office Supplies 207 214 and development opportunities Target 47 51 – increase in
Slide 110: Outlook
For personal use only Outlook 73
Slide 111: Outlook
Outlook For personal use only • Group is well-positioned to benefit from any further upturn in the economy • Outlook for export coal is positive – if realised realised, will result in an increase in Resource earnings from 4Q10 • Recovery in Insurance and Industrial businesses • Optimistic about the
Slide 112: Investor Relations Contact
Investor Relations Contact For personal use only Wesfarmer’s Public Affairs and Investor Relations For further information on Wesfarmers including: A Annual l reports t Alan Carpenter 61 8 9327 4267 Financial results announcements (media) acarpenter@wesfarmers.com.au Presentations and webcasts Tanya