Slide 1: Company Results Half Year Ended
COMPANY RESULTS HALF YEAR ENDED
Slide 2: Presentation Outline
PRESENTATION OUTLINE Presenter Item Grant O'Brien Group Performance and Strategic Priorities Tjeerd Jegen Australian Supermarkets and Petrol Brad Banducci Woolworths Liquor Group Dave Chambers New Zealand Supermarkets Karen Bozic General Merchandise Matt Tyson Home Improvement David Marr Group Finan
Slide 3: Results — half year 2014
Results — half year 2014 Continuing Operations Total Group Before Significant Items1 Sales $31.8b Ç 3.8% $31.8b Ç 6.0% EBIT $2,048.0m Ç 11.3% $2,048.0m Ç 5.9% NPAT $1,321.7m Ç 14.5% $1,321.7m Ç 6.0% EPS 106.1¢ Ç 13.4% 106.1¢ Ç 4.9% DPS 65¢ Ç 4.8% ROFE 14.9% È 87 bps2 1. There were no significant ite
Slide 4: Group EBIT from continuing operations before significant items up 5.9%
Group EBIT from continuing operations before significant items up 5.9% $ million HY13 HY14 Change Australian Food and Liquor 1,583.9 1,692.1 6.8% Petrol 71.0 74.0 4.2% Australian Food, Liquor and Petrol 1,654.9 1,766.1 6.7% New Zealand Supermarkets (NZD) 162.3 164.4 1.3% New Zealand Supermarkets 124
Slide 5: Strategic priorities
Extend leadership in Food and Liquor Act on our portfolio to maximise shareholder value Maintain our track record of building new growth businesses Put in place the enablers for a new era of growth 3
Slide 6: Extend Leadership in Food and Liquor
Extend Leadership in Food and Liquor Well Underway IMPROVING Leading Momentum in Unbeatable Value FIRST CHOICE New Zealand Liquor Destination, Comparable Sales Food and Liquor FOR FRESH FOOD In-store and Online Growth • Improving comparable • Improved • Fresh market share • Increased access to • Ear
Slide 7: Act on our portfolio to maximise shareholder value
Act on our portfolio to maximise shareholder value Well Underway BIG W Australia's Best and ENHANCING OUR PETROL OFFER BUSINESS TRANSFORMATION Most Responsible Hotels • Commenced the transformation of • Industry leading hotel and gaming • Expanding availability of diesel, our customer offer charter
Slide 8: Maintain our track record of building new growth businesses
Maintain our track record of building new growth businesses Well Underway Growing our Leadership as Australia's FASTEST GROWING Australasia's Largest Domestic Online Retailer Home Improvement offer • Online sales exceeded $1b for the 2013 calendar year, • 38 Masters stores trading at the end of the
Slide 9: Put in place the enablers for a new era of growth
Put in place the enablers for a new era of growth Well Underway BUILDING ON OUR DRIVING CUSTOMER INSIGHTS ASSEMBLING A WORLD CLASS SUPPLY CHAIN EFFICIENCIES IN STORES TRANSFORMING OUR BUSINESS WORLD CLASS RETAIL TEAM • Detailed planning has • Delivering on our ‘cost out’ • Everyday Rewards loyalty •
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Slide 11: Australian Supermarkets
AUSTRALIAN Supermarkets Tjeerd Jegen Managing Director Australian Supermarkets & Petrol
Slide 12: Australian Food, Liquor & Petrol
Australian Food, Liquor & Petrol Increasing momentum in sales and profit Trading Performance HY13 HY14 Change • Food & Liquor HY14 comparable sales growth was Sales – Food & Liquor ($m) 20,488 21,477 4.8% 3.0% with increased momentum in Q2 delivering comparable sales growth of 3.4% – Petrol ($m) 3,3
Slide 13: Progress against objectives: fresh food leadership
Progress against objectives Extending our Fresh food leadership 1. First choice for fresh food • Continued to improve the quality of our Fresh offer, with enhancements to our supply chain • In line with our strategy to be first choice for fresh food, our Fresh market share is growing faster than Gro
Slide 14: Progress against objectives: price leadership
Progress against objectives Reinforcing our price leadership 2. Unbeatable value • Improved the communication of our value credentials through 'More Savings Every Day' • As our key value platform, 'More Savings Every Day' delivered savings of $400m+ to customers over the half, through 3 clear and si
Slide 15: Progress against objectives: customer insights
Progress against objectives Customer insights at the heart of our planning 3. Customer insights transforming our business • Increase in Everyday Rewards members to 7.5m (up 11% on HY13) with strong growth in card scan rates • Together with Quantium, we are working closely with suppliers to leverage
Slide 16: Progress against objectives: innovative new offers
Progress against objectives Complementing our existing core offer across the store 4. Innovative new offers • A permanent 'Gold' range now launched setting a new high standard for own brand products in quality, innovation and taste • Roll out of new in‐store offers including – ‘Healthy Lunchbox’ (10
Slide 17: Progress against objectives: online leadership
Progress against objectives Growing our leadership position in online 5.Multi‐option offering customers more flexibility • The number of unique visitors to our online site has more than doubled during the half • We deliver 3m+ items to customers each week, with home delivery now available to more th
Slide 18: Petrol
Petrol Expanded network and convenience offer Trading Performance • Sales increased by 8.0% driven by higher Sales average fuel sell prices and pleasing growth $3.7 B or 8.0 % in merchandise sales • Competitor activity focused on increased fuel discounts which impacted our fuel volumes • EBIT increa
Slide 19: Progress against objectives: petrol
Progress against objectives 1. Provide customers with a compelling fuel offer • Continued investment in forecourt improvements, providing customers with better access to diesel, premium fuels and fast flow pumps • During the half, signage at 32 sites were rebranded and 52 canopies and forecourts ref
Slide 20: Woolworths Liquor Group
Woolworths Liquor Group Brad Banducci Director of Liquor
Slide 21: Woolworths Liquor group sales
Woolworths Liquor group sales Leading liquor retailer in Australia $ billion Comments • Strong result for the half year HY10 3.1 with good sales growth across all three channels – Dan Murphy’s (Destination), BWS HY11 3.2 (Convenience) and The Wine Quarter (Online) highlighting the relevance of each
Slide 22: A unique business model
Woolworths Liquor group A unique business model Connoisseur Convenience and Value Bargain Hunter Online / Click & Collect Bricks & Mortar Off Premise On Premise 20
Slide 23: Progress against objectives: Dan Murphy's and BWS
Progress against objectives 1. Continue to evolve Dan Murphy’s • Australia’s premier liquor destination continues to grow, opening 6 stores in HY14, with total stores now 181 • Extended our multi‐option leadership through – Launch of Australia's favourite liquor App, with photo recognition technolog
Slide 24: Progress against objectives: Pinnacle and Wine Quarter
Progress against objectives 3. Increase own and exclusive brand penetration through Pinnacle Liquor • Pinnacle Liquor continues to grow as our own and exclusive product and brand marketing arm • New and innovative products launched during the half with a pleasing customer response 4. Leadership in D
Slide 25: Hotels
Hotels A key enabler of our Liquor strategy Trading Performance HY13 HY14 Change • Trading conditions are a challenge at present, especially in Bars and Gaming. Sales ($m) 759 788 3.8% Our Food offer remains a focus and we are seeing solid results as we concentrate on providing value meals in a fami
Slide 26: Progress against objectives: Hotels
Progress against objectives 1. To be Australia’s most responsible operator of local pubs • Commenced the introduction of voluntary pre‐commitment functionality on all gaming machines ahead of any planned state legislation, allowing customers to monitor their play and set time or spend limits • Indus
Slide 27: NZ Supermarkets
NZ Supermarkets Dave Chambers Managing Director
Slide 28: New Zealand Supermarkets
New Zealand Supermarkets Successful promotional activity and strong Fresh sales delivering results Trading Performance NZD • HY14 comparable sales 0.7%2, with the Q2 result HY13 HY14 Change2 the strongest sales growth seen in 18 months Before Significant Items1 • Continued growth in market share, cu
Slide 29: Progress against objectives: customer value, sourcing
Progress against objectives 1. Customer value and innovative offers • Customers have responded well to the launch of ‘Price Lockdown’, supported by strong in‐store communication • Produce sales growth outperformed overall growth with our focused grower program, supported by strong in‐store execution
Slide 30: Progress against objectives: supply chain, network
Progress against objectives 4. Supply chain • Efficiencies continue from the reconfigured national and regional DC operations structure, with costs as a percentage of sales (in NZD) decreasing by 6 bps in HY14 • In‐store product availability remained strong during the half 5. Grow Countdown and fran
Slide 31: General Merchandise
GENERAL MERCHANDISE KAREN BOZIC Acting Director of Big W
Slide 32: General Merchandise
GENERAL MERCHANDISE Transformation delivering profitable growth in the future Trading Performance • Sales growth was 0.2% for HY14, impacted by HY13 HY14 Change the timing of the Toy Sale and the business transformation as anticipated Sales ($m) 2,447 2,452 0.2% • Trading conditions continue to be c
Slide 33: Progress against objectives: transformation
Progress against objectives 1. Transforming our business for the future • Commenced our transformation of BIG W, focusing on categories of high customer importance which will provide medium to long‐term profitable growth • Hardgoods transformation will encompass significant change as we rationalise
Slide 34: Progress against objectives: brands and multi-option
Progress against objectives 2. Strong growth in brands that win on value everyday • Pleasing growth in Apparel with strong results delivered through exclusive brands such as 'Peter Morrissey' and the 'Michelle Bridges' and 'Guy Leech' active wear ranges • Our new 'Lee Cooper' range is showing pleasi
Slide 35: Home Improvement
HOME IMPROVEMENT MATT TYSON Managing DIRECTOR Home Improvement
Slide 36: Home Improvement
Home Improvement Australia's fastest growing Home Improvement business Trading Performance • Our Masters network continues to grow strongly, HOME IMPROVEMENT Sales with 38 stores trading at HY14 • Masters sales up 49.4%, with stores now having $796 M or 25.0 % traded on average, for 15 months • Mast
Slide 37: Progress against objectives: sales and offer
Progress against objectives 1. Improve sales performance • Frequency of return customer visits increased through tailored offers • Strong trading in Kitchens, Appliances and Gardening demonstrates the appeal of our differentiated offer • Australia’s Best New Online Retailer at the 2013 ORIAs • Focus
Slide 38: Progress against objectives: costs and store rollout
Progress against objectives 3. Continue to drive cost efficiencies • Significant progress in reducing days stock on hand in Masters through supply chain improvements and inventory management • Pleasing results from cost saving initiatives in stores • Commenced the expansion of our Home Timber and Ha
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Slide 40: Balance Sheet
Balance Sheet Change $ million FY13 HY13 HY14 HY14/HY13 CONTINUING OPERATIONS • Inventory increase was primarily driven by new store Inventory 4,205.4 4,498.9 4,779.8 6.2% openings, in particular 33 Australian Supermarkets (net) and 13 Masters stores since HY13 and increased direct Trade Payables (4
Slide 41: Average inventory days for continuing operations
Average inventory days for continuing operations Inventory levels were well controlled during the period Number of Days Comments HY10 31.6 • Average inventory increased by 2.9 days driven by – Masters store roll out 31.5 – Increased bulk wine HY11 holdings in our Liquor business – Increased direct g
Slide 42: Cash flow
Cash flow • Cash from Operating Activities before Interest and Tax decreased 4.1% on the prior half year, $ million HY13 HY14 Change impacted by the timing of creditor payments EBITDA – Total 2,328.5 2,570.8 10.4% relative to the reporting dates. Excluding this, Net (increase) in inventory (890.6) (
Slide 43: Shareholder payouts
Shareholder payouts Consistent growth in dividends $ billion Comments • In HY14, we have Interim dividend continued to grow Final dividend 2.2 2.2 dividend payments to Buy back 0.7 0.5 shareholders In‐specie distribution • Payout ratio in line with 1.7 HY13 1.6 • No share buy back activity 0.3 0.9 a
Slide 44: Return on funds employed from continuing operations
Return on funds employed1 from continuing operations BEFORE Significant ITEMS Percentage Comments • ROFE from continuing HY10 17.7 operations before significant items decreased 87 bps to 14.9% driven by – The impact of differences HY11 16.7 in the timing of creditor payments relative to the reportin
Slide 45: Outlook
Outlook • Woolworths remains well positioned in its market segments and has a strong and sustainable business model • We previously provided guidance for FY14 net profit after tax from continuing operations to grow in the range of 4% ‐ 7% (on a normalised 52 week basis excluding significant items) •
Slide 46: Company Results Half Year Ended
COMPANY RESULTS HALF YEAR ENDED
Slide 47: Woolworths Limited
45 es V\VOOLWORTHS LIMITED
Slide 48: Gross profit margin from continuing operations
Gross profit margin from continuing operations Continued to invest in lower prices delivering greater value to customers Percentage Comments • Gross profit as a percentage of sales from continuing operations HY10 25.94% increased 9 bps on the prior year reflecting – Improvements in buying HY11 26.18
Slide 49: CODB / sales from continuing operations before significant items
CODB / sales from continuing operations before significant items A strong result given ongoing cost pressures Percentage Comments • CODB as a percentage of sales from HY10 19.65% continuing operations before significant items increased 10 bps on the prior half year, to 20.61% • Excluding non‐compara
Slide 50: Capital expenditure — half year
Capital expenditure — half year New Stores1 Refurbs HY13 HY14 $ million Actual Actual Store numbers HY13 HY14 HY13 HY14 New Stores 140 104 Australian Supermarkets 17 26 42 13 Refurbishments 2361 179 Liquor 41 22 23 24 Growth Capex 376 283 NZ Supermarkets 4 2 2 1 Supply Chain, IT, Multi‐option and 12
Slide 51: Capital expenditure — full year
Capital expenditure — full year Previous Current 2012 2013 2014 $ million – 2014 Fcst Fcst Var $ million – Full Year Actual Actual Fcst New Stores 250 276 26 New Stores 346 300 276 Refurbishments 472 427 (45) Refurbishments 268 478 427 Growth Capex 722 703 (19) Growth Capex 614 778 703 Supply Chain,