Slide 1: Results Presentation Year Ended 26 June 2005
A : : : : WW WOOLWORTHS LIMITED. : OOLWortrs Results Presentation Year Ended 26 June 2005 ROGER CORBETT Chief Executive Officer TOM POCKETT Chief Financial Officer 22 Doesnt 2005
Slide 2: Overall a very pleasing result
| | Overall a very pleasing result with sales up 12.2% to $31.4b and net profit after tax up 14.9% to $790.5m which is the top end of our earnings guidance. Continued focus on cost reductions with CODB (excluding ALH/MGW) down 92 basis points. Excellent progress on our new supply chain: — Key IT del
Slide 3: Net profit after tax
At PE T AFTE , | IN / HOON dina 790.5 788.7 800 5 687.8 700 5 609.5 600 | qi 523.2 on 500 | 428.0 400 | $ Milli 300 5 200 | 100 2001 2002 2003 2004 2005 2005 Proforma’” Proforma excludes Bruandwo (ALH/MGW) results oolworths Limited
Slide 4: Earnings per share
IN } i | HM TA ATT 80 - 79.7 78.2 70.1 70 5 60.7 60 52.5 50 - A1.0 Cents 2001 2002 2003 2004 2005 2005 Proforma EBIT GROWS FASTER THAN SALES — ASSISTED BY COST REDUCTIONS (} Proforma excludes Bruandwo (ALH/MGW) results oolworths Limited (1)
Slide 5: Group sales
| i | hall cow A 35.0 5 31.4 30.5 30.0 - 27.9 24.5 25.0 5 g 9.0 20.9 = 20.0 - = id 15.0 4 10.0 4 5.0 4 0.0 T : T T T T T 2001 2002 2003 2004 2005 Year Proforma’” Increase + 10.0% + 17.0% + 76% +6.1% +12.2% 9.2% 52 week basis + 14.9% + 9.6% 2005 SALES FROM CONTINUING OPERATIONS WERE UP 12.3% “) Profo
Slide 6: Sales by division
ii aang FY04 FY05 Change FY05 Change “ $ Millions g ° Sg % Proforma “) %o Supermarkets and Liquor 21,998 23,570 7.1% 23,141 5.2% Petrol 2,195 3,308 50.7% 3,308 50.7% Total Supermarkets 24,193 26,878 11.1% 26,449 9.3% BIG W General Merchandise 2,718 2,909 7.0% 2,909 7.0% Consumer Electronics 886 1,00
Slide 7: Cost of doing business to sales
‘oe NN @ TL AON INA of _ et 23%) 92.68% Down 418 22.32% pts ( | since 1999 of 22% 21.66% Down 92 pts in FY05 : o f Cumulative \, > 21.12% | Reductions | ee) (1) = 21% - 20.82% $3.8 bn ©) ° f . ® a 20% + 19% T T T 2001 2002 2003 2004 2005 2005 Proforma Reductions” $343 m + $486m + $707m s+ $906 m + $
Slide 8: Gross profit to sales
a ZO OT | ILI in I i i NAAN i HTT ii 27% 5 26.16% Down 339 . ° ey pts() % > since 1999 26% 25.80% f down 78 pts \S a inFYOS | o 25.29% Cumulative > Reductions 5 25% - 24.95% $3.1 bn? 8 oe a. 24% 5 23% 4 2001 2002 2003 2004 2005 2005 Proforma Reductions” $283m + $415m + $590m + $726m + $1,029m = | $3
Slide 9: Group EBIT
Bl T HT tN 1,400 - Be 1.2 ,283 1,210" 1,200 5 1,065 1,000 + 946 ® y 2 800; 707 ‘= F 2001 2002 2003 2004 2005 2005 Proforma Year + 13.7% + 17.8% + 13.6% + 12.6% + 20.5% + 13.6% 2005 EBIT FROM CONTINUING OPERATIONS WAS UP 20.5% “ Proforma excludes Bruandwo (ALH/MGW) * Includes extra week
Slide 10: EBIT margins
EN my) ul | BIT. tu POITIER TTT 1 FYO1 FY02 FY03 FY04 FY05 FY05") Proforma H1 H2 Yr H1 H2 Yr H1 H2 Yr H1 H2 Yr H1 H2 Yr H1 H2 Yr 4.50 4.25 4.00 3.75 3.50 3.25 3.00 2.75 2.50 2.25 2.00 4.29 4.20 4.08 3.81 3.73 3.55 Percentage T . T a | T T EBIT MARGINS HAVE THICKENED OVER THE 2005 YEAR BY 27pts(?) ‘)
Slide 11: Supermarkets division results
l ial N FY04 FY05 “ FY05 Change Proforma® Change ® Sales ($m) 24,192.5 26,878.0 +11.1% 26,448.9 +9.3% Gross margin (%) 24.11 23.30 -0.81%pts 23,32 -0.79%pts Cost of Doing Business (%) 20.14 19.15 -0.99%pts 19.17 -0.97%pts EBIT to sales (%) 3.97 414 +0.17%pts 4.15 +0.18%pts EBIT to sales (excluding P
Slide 12: Supermarkets commentary
eS ill Strong profit growth built on strengthened sales growth underpinned by continued cost reductions + Supermarket sales (including Petrol and excluding ALH/MGW) rose 9.3% with Food and Liquor sales growing 5.2%. + Food and Liquor comparable store sales grew 3.1% with comparable sales strengtheni
Slide 13: Liquor operations
All our existing liquor operations (Dan Murphy’s, BWS, First Estate and attached liquor) recorded strong growth in revenue and earnings ina competitive market Comparable store sales in all our liquor businesses were strong. Dan Murphy's continued to expand with 11 stores opened during the year bring
Slide 14: Petrol division
Our Petrol division, strengthened by our alliance with Caltex, continues to be a good supplemental offer with petrol sites conveniently located near our supermarkets Petrol sales of $3.3b, up 50.7% on last year. EBIT is up on last year mainly due to higher volumes and lower costs. 97 new canopies (i
Slide 15: BIG W results
l SS. Il Sales ($ million) Gross margin (%) Cost of Doing Business (%) EBIT to sales (%) EBIT* ($ million) Funds Employed ($ million) Average ROFE (%) * No purchased goodwill in BIG W. ll FY04 2,717.9 30.25 25.98 4.28 116.2 325.7 39.0 FY05 2,908.7 29.79 25.73 4.06 118.0 371.9 33.8 Change +7.0% -0.46
Slide 16: BIG W commentary
BIC Business repositioned during the year reinforcing BIG W’s Everyday Low Price (EDLP) offering Sales for the year of $2.9b, an increase of 7.0% in a highly competitive market. Comparable store sales growth was 2.4% for the year. EBIT for the year was $118.0m reflecting business repositioning. Cost
Slide 17: Consumer Electronics results
yy) lt | Sales ($ million) Gross margin (%) Cost of Doing Business (%) EBIT to sales (%) EBIT (before goodwill) ($ million) EBIT (after goodwill) ($ million) Funds Employed ($ million) Average ROFE (%) FY04 886.3 31.59 26.61 4.98 48.2 44.1 220.4 18.9 FY05 1,007.5 30.38 25.24 5.14 55.0 51.8 236.1 22.
Slide 18: Consumer Electronics commentary
i INSUI Attractive product ranges at competitive prices drive double digit sales and earnings growth * Business progressing extremely well which is reflected by a 13.7% sales increase and a 17.5% increase in EBIT after goodwill. * Strong double digit comparable (like for like) sales growth for the y
Slide 19: ALH integration
Secured control of ALH in the second quarter of FY05 and consolidated from the end of October 2004. Excellent progress is being made on the integration of ALH. The ALH/MGW retail liquor business is now being managed as part of Woolworths total retail liquor business with the Bruce Mathieson Group ma
Slide 20: Hotels: a new growth business
ATT A new growth business Hotels 2005 (since acquisition) Sales ($ million) 415.8 Gross margin (%) 82.66 Cost of Doing Business (%) 69.86 EBIT to sales (%) 13.20 EBIT (before goodwill) ($ million) 54.9 EBIT (after goodwill) ($ million) 64.8 “ Represents ALH Hotel results from 1 November 2004 and MGW
Slide 21: Hotels commentary
uN A new growth business Hotel sales have been driven by continued growth in major markets including Queensland and Victoria. Since acquisition we have been focusing on re-positioning and improving the performance of all areas and in particular, gaming and on premise liquor. Gaming revenue continues
Slide 22: Payout to shareholders
ITT Total $3,853m Share buy-backs and other capital 1000 - 941 management will resume following the integration of ALH and 800 4 Foodland. a] c 600-4 2 E 400 4 A 200 - 0 4 FY 2001 FY 2002 FY 2003 FY 2004 FY 2005 PROFIT GROWTH, COUPLED WITH BALANCE SHEET MANAGEMENT, DELIVERED $3,853m PAYOUT TO SHAREH
Slide 23: Dividends per share
lia ih 55 5 45 - 35 4 Cents 25 5 15 - 2001 2002 2003 2004 2005 DIVIDEND PAY-OUT RATIO OF 68.1% MARGINALLY UP ON PREVIOUS YEARS oolworths Limited
Slide 24: Balance sheet
_BALAN( hd bh ‘ | Luin ci FY04 FY05 $million $million Excluding ALH/MGW, inventory up $70.2 million but days inventory down 1.9 days to 30.2 days. Inventory 1,847.0 1,977.3 Trade Payables (2,176.3) (2,335.6) ~~ increase in creditors over last year due to acquisition of ALH/MGW. Net investment in inv
Slide 25: Days inventory
i 425 40.6 40 + 38 5 » 36-7 Reduction of g 34.1 1.9 days 34 4 32.1 32 5 30.6 30.2 30 + 28 + : T T — T T T 2001 2002 2003 2004 2005 2005 Proforma” 14.5 DAY REDUCTION SINCE 1999 HAS RESULTED IN A $922M CASHFLOW BENEFIT “) Proforma excludes Bruandwo (ALH/MGW). 25 oolworths Limited
Slide 26: Cash flow
EBITDA Net interest paid (incl. cost of Income notes) Taxation paid Working capital and other items Total cash provided by operating activities Payments for the purchase of businesses Payments for purchase of investments / Proceeds from sale Payments for normal capex Proceeds on disposal of property
Slide 27: Capital management
i | hulu How ‘lima Woolworths currently sets its capital structure with the objective of maintaining it’s A- Credit rating. To the extent consistent with this, Woolworths will undertake capital return strategies that seek to increase EPS growth and distribute franking credits to shareholders. This s
Slide 28: Return on funds employed
I? 60% 5 9 49.8% 50% - 42.8% 40% | 35 0, 38.1% 38.7% . ( r 30% Percentage 20% 10% 0% 2001 2002 2003 2004 2005 2005 Proforma ROFE (EXCLUDING THE IMPACT OF ALH/MGW) UP SLIGHTLY ON LAST YEAR TO 49.8%. (2) ‘) Based on average of opening and closing funds employed. ) Proforma excludes Bruandwo (ALH/MGW).
Slide 29: Return on equity
60% 50% » 40% to) 8 & 30% id Oo a 20% 10% 0% 43.2% 48.1% 49.3% 51.0% 2001 2002 2003 2004 43.6% 2005 AVERAGE ROE DOWN DUE TO THE DRP AND OPTIONS BEING EXERCISED DURING THE YEAR. () Based on average of opening and closing Shareholders Funds. ) Proforma excludes Bruandwo (ALH/MGW). 29
Slide 30: Performance against stated goals
| uch YI In comparison with our FYo2. -FY02" FY03 FY03 FY04 regularly expressed goals Normalised Normalised Sales will grow in the upper single digits assisted by bolt- +17.0% +14.9% +7. 6% +9.6% +6.1% on acquisitions EBIT will outperform sales growth assisted by cost +17.8% 415.7% +13.6% +15.6% +12
Slide 31: Opportunities for ongoing growth
vn A UMMA TUT MUU Considerable opportunities for ongoing growth in both revenues and earnings Continuing opportunity to grow market share + Market share of Food, Liquor & Grocery (FLG) remains below 30% and still low by world standards. + Independent grocers and speciality food stores hold just unde
Slide 32: Private brands and new formats
vn ‘so li ‘ AOA Considerable opportunities for ongoing growth in both revenues and earnings Increased emphasis on private branded goods Woolworths product range features the major industry brands and a strong private label business. Woolworths “Homebrand” is at the leading price point in the market
Slide 33: In-store execution, acquisitions, international
vn ‘so li ‘ AOA Considerable opportunities for ongoing growth in both revenues and earnings Continued focus on improved in-store execution and service * Providing more rapid service. * Benefits of StockSmart - improved distribution service to stores. * Benefits of AutostockR - improved ranging and c
Slide 34: Foodland acquisition
Woolworths is currently in the process of acquiring Foodland Limited’s New Zealand business plus 22 Australian stores via a Scheme of Arrangement * The acquisition consideration comprises $1,250m cash and 81.6m Woolworths shares. The cash consideration will initially be funded by a Bridge Facility p
Slide 35: Refresh overview
35 Overview “Refresh” level 1* initiatives over the past 6 years underpin a reduction in CODB of 3.78% of sales, giving cumulative savings of $3.6b (based on our 1999 cost structure). Targeting further “Refresh” savings to underpin a CODB reduction of 20bps per annum over the next five years. These
Slide 36: Refresh level I savings
Level | - Reorganisation / line items 99 00 01 O02 O03 O04 O05 O06 O7 O8 O9 Woolworths Limited
Slide 37: Cumulative Refresh savings
9 year cum savings = $8.0b 1633 | 1206 | Leva 1150 i i & mean | 1 i i 7 tt Ee stiff &é Mt FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 PA Savings $ millions Woolworths Limited
Slide 38: New supply chain progress
ih NNN IN ll IC * Continued solid progress and on target * The technology required to support our new supply chain is critical to its success and was complex in its design. We have now passed the high risk stage of our IT rollout. * As previously reported AutoStockR has been fully implemented in all
Slide 39: Supply chain initiatives
| Ca) i on CTIA 2 Hut « As previously reported, Roll Cages successfully implemented in WA with expectations exceeded. Rollout into Victoria, SA and QLD planned over the coming months. « Now over 100 vendors on Primary Freight with significant improvement in in- bound service levels. « Anew Secondary
Slide 40: Current trading
" f IAA The first seven weeks show: * Food and Liquor sales trends have continued along similar lines to those reported during the fourth quarter. * BIG W sales are continuing to strengthen. * Consumer Electronics sales continue to remain strong. Woolworths Limited
Slide 41: FY06 outlook
| i ) ID * For FY06 we expect that sales will grow in the upper single digits. Sales Earnings * For FY06, we anticipate that Net Profit after Tax (NPAT) will increase in the lower double digits. * We also anticipate that EBIT will continue to grow faster than sales in FY06. Other * Trading area expe
Slide 42: Results Presentation Year Ended 26 June 2005
A : : : : WW WOOLWORTHS LIMITED. : OOLWortrs Results Presentation Year Ended 26 June 2005 ROGER CORBETT Chief Executive Officer TOM POCKETT Chief Financial Officer 22 Doesnt 2005
Slide 43: Appendices
Appendices Woolworths Limited
Slide 44: Key financial ratios
lO IIA FY04 FY05 Fixed charges cover 4 2.52 2.48 (rans) more Days inventory (to cost of sales) Days 32.1 30.6 Days creditors (to sales) Days 44.9 44.0 Return on Funds Employed (pre tax) ROFE % 49.3 38.7 Return on Total Equity % 33.5 36.0 Return to Noteholders (pre tax) % 7.2 75 Return on Shareholder
Slide 45: Fixed charges cover
HM ae 2001 2002 2003 2004 2005 EBIT 706.6 832.7 945.7 1,065.1 1,283.0 D&A 309.8 351.0 398.3 407.6 4610 EBITDAR 1,616.4 1,888.7 21027 2,2825 26489 Interest 25.0 57.6 41.2 528 161.4 WINs contingent coupon 47.7 39.8 41.4 42.9 — 7 Rent - base 497.3 569.9 620.2 664.2 7585 Rent - turnover contingent 76.9
Slide 46: Capex forecast
NM HAT | ti Tl cca li Fos Fo6 6) F07 (5) Fos (5) Fog 6 F1 0.) Actual Forecast Forecast Forecast Forecast Forecast New Stores/Acquisitions 238 ® 176 175 150 140 140 Store Refurbs/Extensions 288 319 315 300 300 300 Stay in Business 93 108 110 115 115 115 T 95 191 ° 210 400 100 100 Supply Chain - Refre
Slide 47: Cost of doing business to sales (alternate basis)
23% 4 mtn, Down 378 22.22% pts(”) since 1999 22% 4 21.84% 7 D 93 pt: ° 21.55% nan apts oO f Cumulative \ OG 21.10% | Reductions | c $3.6 bn?) 5 21% + 20.80% : y 1S) o 2 20.17% 20% + 19% T T T T T 2001 2002 2003 2004 2005 2005 Proforma : Reductions” $362 m + $517m + $632m + $796m + $1,153 m= | $3.6 b
Slide 48: Gross profit to sales (alternate basis)
Wy G ihr Mt > PROF | .G ll DAA pn p sc 27% 5 Down 289 pts(’) 26% -“ since 1999 °| Down 77 pts | oot ° 25.60% we [=)) 9 Cumulative § 25.24% 25.14% ° _ Reductions 5 25% - 24.91% 24.89% $2.8 bn?) (3) tad ® a 24% 5 23% + T 2001 2002 2003 2004 2005 2005 > Proforma” Reductions ” $299m + $438m + $497m + $5
Slide 49: AIFRS adjustments
| i: The main AIFRS adjustments are summarised below: No longer required to amortise goodwill Expensing share options Property, plant and equipment Expensing of ALH acquisition costs Defined benefit plan Inventory Make Good Provision Reclassification of Reserves Tax Increase under AIFRS Transition 2
Slide 50: EBIT by division
EBIT ($million) Food and Liquor Petrol Supermarkets Division BIG W Consumer Electronics General Merchandise Division Hotels (ALH/MGW) ©) Total Trading Result Property Income Central Overheads Continuing Operations Wholesale Division Group EBIT cg til FY04 FY05 : FYOS — Proforma’ Change'” Before Afte