Slide 1: Company Results Full Year 2017
For personal use only COMPANY RESULTS FULL YEAR 2017 23 August 2017 Woolworths Limited ABN 88 000 014 675
Slide 2: Table of contents
Table of contents For personal use only Key highlights, progress and outlook Brad Banducci Financial results David Marr Business update Brad Banducci/David Walker 2
Slide 3: Key highlights
Key highlights For personal use only • Improved Customer, Team and Supplier Scores, especially in Australian Food • Strong sales momentum in Australian Food with FY17 comparable sales growth of 3.6% and Easter adjusted comparable sales growth in Q4’17 of 6.4% • WooliesX formed to accelerate growth i
Slide 4: Progress against our five key priorities
Progress against our 3 Evolving our Drinks business to provide even more value and convenience to customers FIVE KEY PRIORITIES • Continued sales momentum from Dan Murphy’s and BWS For personal use only • Click & Collect rolled out to 1,240 BWS stores • Langton’s integrated into Dan Murphy’s 1 • Str
Slide 5: Woolworths Group FY18 priorities
Woolworths Group FY18 priorities For personal use only 6 CUSTOMER 1ST TEAM AND CULTURE Create competitive advantage across CONNECTED, PERSONALISED AND CONVENIENT 5 Woolworths Group SHOPPING EXPERIENCES IN FOOD AND DRINKS Innovate differentiated TRANSFORM AUS EVOLVE OUR CREATE VALUE customer proposit
Slide 6: Outlook
Outlook For personal use only • FY18 focus will continue to be on our five key priorities • Emphasis moving from fixing the basics to leveraging team work, digital and insights to improve customer and team experiences while sustainably reducing CODB • In H1, we have a particular focus on improved te
Slide 7: Contents
Contents For personal use only Key highlights, progress and outlook Brad Banducci Financial results David Marr Group financial results Key balance sheet metrics Cash flow summary Capital expenditure Capital management Business update Brad Banducci/David Walker 7
Slide 8: Financial results
For personal use only RESULTS FINANCIAL
Slide 9: Results – Full Year 2017
Results – Full Year 2017 For personal use only Continuing Operations Total Group Sales $55.5 bn 3.7% $61.1 bn* 1.5% EBIT $2,326.0 m (4.9)% $2,642.9 m* n.m. NPAT $1,422.1 m (3.6)% $1,533.5 m n.m. Earnings per share 110.8¢ (5.1)% 119.4¢ n.m. Dividend per share 84¢ 9.1% Return on average funds employed
Slide 10: Group EBIT
Group EBIT For personal use only $m FY17 FY161 Change Continuing operations Australian Food 1,603.1 1,642.0 (2.4)% Endeavour Drinks Group 502.5 483.8 3.9% New Zealand Food (AUD) 292.3 284.4 2.8% New Zealand Food (NZD) 309.4 313.9 (1.4)% BIG W (150.5) (14.9) n.m. Hotels 232.9 208.5 11.7% Central over
Slide 11: Key balance sheet metrics
Key balance sheet metrics ROFE For personal use only Average inventory days Days Percentage Group ex Home Improvement and Petrol Group ex Home Improvement and Petrol Group Group ex Home Improvement and Petrol – lease adjusted 41.3 22.3 40.8 21.7 40.4 39.9 39.3 39.0 38.3 38.0 13.3 13.1 36.6 36.4 FY13
Slide 12: Strong improvement in free cash flow
Strong improvement in free cash flow Cash flow summary For personal use only $m FY17 FY16 Change Operating activities before interest and tax 4,024.1 3,495.3 15.1% Interest and tax (902.1) (1,137.8) (20.7)% Operating activities 3,122.0 2,357.5 32.4% Investing activities (1,431.4) (1,266.7) 13.0% Fin
Slide 13: FY17 Capital expenditure in line with guidance
FY17 Capital expenditure in line with guidance $m FY17 FY16 For personal use only Continuing operations Operating capex 1,583 1,391 Property development 258 407 Gross capex 1,841 1,798 Property sales (273) (678) Net capex 1,568 1,120 Discontinued operations – Home Improvement 23 108 Discontinued ope
Slide 14: Capital management
Capital management For personal use only 160 80 Dividend and DRP Payout (%) cents Interim Final Payout (RHS) 140 • Full year dividend of 84 cps - a payout of 120 72 75 70.7% of Group NPAT attributable to 100 shareholders of Woolworths Limited 80 70 60 33 50 • H2’17 NPAT includes $134m for Home 40 65
Slide 15: Contents
Contents For personal use only Key highlights, progress and outlook Brad Banducci Financial results David Marr Business update Brad Banducci/David Walker 15
Slide 16: Business update
For personal use only UPDATE BUSINESS
Slide 17: Woolworths The fresh food people
Ee Woolworths The fresh food ns @
Slide 18: Australian Food
Australian Food For personal use only FY17 FY161 Change Sales ($m) 36,371 34,798 4.5% EBITDA ($m) 2,164.7 2,165.6 (0.0)% EBIT ($m) 1,603.1 1,642.0 (2.4)% Gross margin (%) 28.07 27.37 70 bps Cost of doing business (%) 23.66 22.65 101 bps EBIT to sales (%) 4.41 4.72 (31) bps Sales per square metre ($)
Slide 19: Our FY17 strategy was focused on having customers put us 1st
Our FY17 strategy was focused on having customers put us 1st For personal use only 6 CUSTOMER 1ST TEAM AND CULTURE Create the future 5 STEP-CHANGE STORE RENEWAL PROGRAM Deliver on core 2 GOOD PRICES, 3 GREAT 4 BEST customer offer RIGHT RANGE SERVICE FRESH Fix the basics 1 SOLID AND EFFICIENT BUSINES
Slide 20: Progress highlights
Progress highlights For personal use only • Our purpose ‘We bring a little good to everyone, every day’ embedded within our team Create the • Around 600 support office team members attended our ‘Welcome to Woolies’ store induction program future • Opened 19 new Australian Supermarkets, renewed 72 ex
Slide 21: Success underpinned by improving customer and team experiences
Our success in FY17 has been underpinned by improving our customer and team experiences For personal use only Overall Customer Satisfaction Voice of Team: sustainable engagement % customers satisfied, 6 or 7 out of 7 % favourable scores, 6 or 7 out of 7 90 90 +5 +3 82 78 77 75 0 0 Jun-16 Jun-17 Jun-
Slide 22: Sales momentum continues, with growth in visits and items per basket
Sales momentum continues, with growth in visits and more recently items per basket For personal use only Australian Food sales Comp transaction growth (% year on year) (% year on year) 5.2 4.1 2.5 2.7 1.5 Q4 Q1 Q2 Q3* Q4* 7.2 FY16 FY17 5.6 4.0 Comp items per basket growth 1.7 (% year on year) 0.0 Q4
Slide 23: Brand platform
For personal use only Brand platform ● An integrated brand platform launched in July 2017 ● Resonating with customers ● Emotional and rational reasons to Pick Woolies ● Building recognition ● Constantly evolving in line with customers’ needs
Slide 24: Our FY18 strategy: From turnaround to transformation
Our FY18 strategy: From turnaround to transformation For personal use only 6 CUSTOMER 1ST TEAM AND CULTURE Scale-up the future ACCELERATE RENEWAL AND EXTEND APPROACH TO 5 ONLINE AND METRO Extend core customer offer CONSISTENTLY PRICES I TRUST GREAT FAMOUS 2 ON PRODUCTS 3 4 SHOPPING FOR FRESH I WANT
Slide 25: Our culture is key to our future
Our culture is key to our future For personal use only 25
Slide 26: Endeavour Drinks Group
WH, wey > Ss Z 5 MY, \ NI\W ENDEAVOUR DRINKS GROUP
Slide 27: Endeavour Drinks
Endeavour Drinks For personal use only FY17 FY161 Change Sales ($m) 7,913 7,589 4.3% EBITDA ($m) 578.2 558.6 3.5% EBIT ($m) 502.5 483.8 3.9% Gross margin (%) 23.08 23.41 (33) bps Cost of doing business (%) 16.73 17.03 (30) bps EBIT to sales (%) 6.35 6.38 (3) bps Sales per square metre ($) 18,039 17,
Slide 28: Dan Murphy's maintained its leadership
Dan Murphy’s maintained its leadership through new stores and multi-channel innovations For personal use only FY17 highlights FY18 focus 12 net new stores opened, My Dan Murphy’s Click & Collect integration bringing total fleet to 219 members now 2.4 million Launch of talk show ‘At the Launch of hig
Slide 29: BWS investment in value and customer service
BWS investment in value and customer service is resulting in strong convenience differentiation For personal use only FY17 highlights FY18 focus Substantial improvement in Store network increased to Customer-led Ranging Partnering with Supermarkets sales growth and comp sales 1,298 stores. Refurbish
Slide 30: For personal use only
For personal use only
Slide 31: New Zealand Food
New Zealand Food For personal use only NZD FY17 FY161 Change Sales ($m) 6,232 6,101 2.1% EBITDA ($m) 426.8 429.9 (0.7)% EBIT ($m) 309.4 313.9 (1.4)% Gross margin (%) 24.00 23.58 42 bps Cost of doing business (%) 19.04 18.44 60 bps EBIT to sales (%) 4.96 5.14 (18) bps Sales per square metre ($) 15,13
Slide 32: New Zealand Food FY17 highlights and FY18 focus
New Zealand Food FY17 highlights and FY18 focus For personal use only FY17 highlights FY18 focus Achieved new highs for Continued to deliver low Further enhance customer Continue focus on fresh food team engagement and prices every day service experience including team knowledge customer satisfactio
Slide 33: For personal use only
For personal use only
Slide 34: BIG W
PORTFOLIO BUSINESS BIG W For personal use only FY17 FY161 Change Sales ($m) 3,598 3,820 (5.8)% (LBITDA)/ EBITDA ($m) (74.1) 68.2 n.m. LBIT ($m) (150.5) (14.9) n.m. Gross margin (%) 30.82 31.69 (87) bps Cost of doing business (%) 35.00 32.08 292 bps LBIT to sales (%) (4.18) (0.39) (379) bps Sales per
Slide 35: We have put our customers at the heart of our planning process
PORTFOLIO BUSINESS We have put our customers at the heart of our planning process For personal use only Surveyed 5,000 customers and 10,000 Developed a clear Formulated a plan team members on and simple to bring our CVP what customers want customer value to life for and how we can proposition (CVP)
Slide 36: FY18 priorities: Building our team, regaining price trust
FY18 priorities: Building our team, regaining price trust PORTFOLIO BUSINESS For personal use only CUSTOMERS AND TEAM COME FIRST Win back trust for the Our team and customers at the heart of everything we do future Listen to customers to refine what we do and shape our UNIVERSES ALIGNED TO CORE CUST
Slide 37: Activate universes aligned to core customer needs
PORTFOLIO BUSINESS Activate universes: Six universes aligned to core customer needs For personal use only Multi-category solutions built around shopping themes About About About About About About Kids Home Everyday Him Her Leisure The one-stop The essentials Low prices on Everyday Treat yourself For
Slide 38: Better Range: Revised brand strategy and range architecture
Better Range: Revised brand strategy and range architecture PORTFOLIO BUSINESS For personal use only • Choice of brands and price points across all Best customer universes with good-better-best options where it matters most to customers NATIONAL • National and exclusive brands/ranges to BRANDS NATIO
Slide 39: We've started to make some changes
We've started to make some changes… PORTFOLIO BUSINESS For personal use only What we will do over the What we have done so far next 6 months ü New BIG W leadership team in place Continue to reduce prices ü Clear and simple plan agreed and shared Improve our online experience – range, fulfilment ü Pr
Slide 40: Thank you
For personal use only Thank you 40
Slide 41: Notes
Notes 1. Significant items in FY16 represent costs of $4,013.7m (before tax) or 2,627.8m (after tax and non controlling interests) For personal use only resulting from the write down of the Home Improvement business and certain significant expenses incurred outside the ordinary course of our trading
Slide 42: Disclaimer
Disclaimer For personal use only This presentation contains summary information about Woolworths Limited (Woolworths) and its activities current as at the date of this presentation. It should be read in conjunction with Woolworths’ other periodic and continuous disclosure announcements filed with th