Woolworths Holdings Limited · JSE:WHL
Woolworths — H1 FY2021 Earnings Presentation
45 slides from Woolworths's earnings presentation, Feb 1, 2021
Slide 1: 2021 Interim Results
WO O LWO R T H S H O L D I N G S L I M I T E D 2021 Interim Results
Slide 2: Presentation Outline
WOOLWORTHS HOLDINGS LIMITED INTERIM RESULTS 2021 ANALYST PRESENTATION PRESENTATION OUTLINE 01 02 03 OVERVIEW OF FINANCIAL UPDATE AND THE PERIOD OVERVIEW OUTLOOK WHL 1 / 2021
Slide 3: Overview of First Half FY21
WOOLWORTHS HOLDINGS LIMITED INTERIM RESULTS 2021 ANALYST PRESENTATION OVERVIEW OF FIRST HALF FY21 Roy Bagattini Group CEO WHL 2 / 2021
Slide 4: Appreciation
WOOLWORTHS HOLDINGS LIMITED INTERIM RESULTS 2021 ANALYST PRESENTATION APPRECIATION Our teams have been exceptional in the way they have supported each other, our customers, and our communities • The impact of Covid-19 has been more pervasive than initially anticipated • Our primary focus has remaine
Slide 5: Economic Overview
WOOLWORTHS HOLDINGS LIMITED INTERIM RESULTS 2021 ANALYST PRESENTATION ECONOMIC OVERVIEW Weakening macro and consumer confidence exacerbated by Covid-19 SOUTH AFRICA AUSTRALIA % Real annual GDP growth % % Real annual GDP growth % 8 5 4 6 3 4 2 2 1 – – 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Slide 6: Overview of the Period
WOOLWORTHS HOLDINGS LIMITED INTERIM RESULTS 2021 ANALYST PRESENTATION OVERVIEW OF THE PERIOD Credible performance in a tough environment, with good progress against strategic initiatives • In South Africa: – Stand-out performance from Food, underpinning Group results – 10th consecutive year of marke
Slide 7: Financial Overview
WOOLWORTHS HOLDINGS LIMITED INTERIM RESULTS 2021 ANALYST PRESENTATION FINANCIAL OVERVIEW Reeza Isaacs Group CFO WHL 6 / 2021
Slide 8: Group Performance
WOOLWORTHS HOLDINGS LIMITED INTERIM RESULTS 2021 ANALYST PRESENTATION GROUP PERFORMANCE Strong operating profit growth, improved cash flow and a more resilient balance sheet for the half 26 weeks Dec 2020 26 weeks Dec 2019 Change Turnover and concession sales R43.0bn R40.9bn +5.3% Adjusted profit be
Slide 9: Group Income Statement
WOOLWORTHS HOLDINGS LIMITED INTERIM RESULTS 2021 ANALYST PRESENTATION GROUP INCOME STATEMENT 26 weeks 26 weeks Dec 2020 Dec 2019 % Rm Rm change Turnover and concession sales 43 047 40 882 5.3 Improvement on LY despite a Covid-19 impacted half Gross profit 14 552 14 134 3.0 Above market Food performa
Slide 10: EPS, HEPS and Adjusted HEPS
WOOLWORTHS HOLDINGS LIMITED INTERIM RESULTS 2021 ANALYST PRESENTATION EPS, HEPS AND ADJUSTED HEPS Adjusted diluted HEPS increased by 19.4% 28.2 284.3 16.8 257.0 (0.9) 75.1% 46.5 57.5% 19.4% 193.7 162.2 163.2 162.4 Adjusted diluted HEPS Lease exit and Tax losses Diluted HEPS Profit on sale Impairment
Slide 11: Sales Performance
WOOLWORTHS HOLDINGS LIMITED INTERIM RESULTS 2021 ANALYST PRESENTATION SALES PERFORMANCE Improving sales run rates across the Group R6 426m 13.9 R18 903m Timing of (3.9) (6.3) 12.0 month-end 10.9 and shift (11.2) in spend 7.6 (21.8) FY21 – first FY21 – second FY21 – last FY21 FY21 – first FY21 – seco
Slide 12: Woolworths Fashion, Beauty and Home results
WOOLWORTHS HOLDINGS LIMITED INTERIM RESULTS 2021 ANALYST PRESENTATION Covid-19 challenged environment, with continued pressure on discretionary spend 26 weeks 26 weeks Dec 2020 Dec 2019 % Rm Rm change Turnover and concession sales 6 426 7 236 (11.2) Gross profit margin 45.9% 46.6% Expenses 2 372 2 4
Slide 13: Woolworths Food results
WOOLWORTHS HOLDINGS LIMITED INTERIM RESULTS 2021 ANALYST PRESENTATION Another market-leading performance from Food 26 weeks 26 weeks Dec 2020 Dec 2019 % Rm Rm change Turnover and concession sales 18 903 17 040 10.9 Gross profit margin 24.8% 24.6% Expenses 3 124 2 927 6.7 Adjusted EBIT 1 531 1 243 23
Slide 14: Woolworths Financial Services results
WOOLWORTHS HOLDINGS LIMITED INTERIM RESULTS 2021 ANALYST PRESENTATION Healthy portfolio, despite the tough environment Dec 2020 Dec 2019 % Rm Rm change Average total financial services assets 13 003 13 053 (0.4) % % Income statement to book to book Interest income 822 12.6 1 103 16.9 (25.5) Interest
Slide 15: David Jones results
WOOLWORTHS HOLDINGS LIMITED INTERIM RESULTS 2021 ANALYST PRESENTATION An improved operating performance, with the negative effects of the Victoria lockdown and lower footfall offset by government support and rent relief 26 weeks 26 weeks Dec 2020 Dec 2019 % A$m A$m change Turnover and concession sal
Slide 16: Country Road Group results
WOOLWORTHS HOLDINGS LIMITED INTERIM RESULTS 2021 ANALYST PRESENTATION A pleasing performance, especially from the Country Road brand 26 weeks 26 weeks Dec 2020 Dec 2019 % A$m A$m change Turnover 512 541 (5.2) Gross profit margin 60.0% 62.3% Expenses 215 274 (21.5) Adjusted EBIT 94 65 44.6 EBITDA 158
Slide 17: Capital Expenditure
WOOLWORTHS HOLDINGS LIMITED INTERIM RESULTS 2021 ANALYST PRESENTATION CAPITAL EXPENDITURE Capex lower but accelerated spend in digital, online and other growth initiatives Rm Depreciation and amortisation 1 600 R1 539m 26 weeks 26 weeks Dec 2020 Dec 2019 % change Woolworths (Rm) 482 474 1.7 1 200 A$
Slide 18: Group Balance Sheet
WOOLWORTHS HOLDINGS LIMITED INTERIM RESULTS 2021 ANALYST PRESENTATION GROUP BALANCE SHEET Significant progress in strengthening the balance sheet Constant Dec 2020 Dec 2019 currency Rm Rm % change Assets Property, plant and equipment 14 009 14 610 (12.0) Includes sale of Bourke Street Mens Intangibl
Slide 19: IFRS 16: Update to Group Lease Portfolio
WOOLWORTHS HOLDINGS LIMITED INTERIM RESULTS 2021 ANALYST PRESENTATION IFRS 16: UPDATE TO GROUP LEASE PORTFOLIO Lease liabilities have reduced in line with our strategic objectives to optimise space Group WSA DJ CRG Lease liabilities Rm Rm A$m A$m Dec 2019 26 190 7 070 1 424 525 Dec 2020 24 335 6 753
Slide 20: Net Gearing
WOOLWORTHS HOLDINGS LIMITED INTERIM RESULTS 2021 ANALYST PRESENTATION NET GEARING Net gearing has reduced significantly in SA and Australia Dec 2020 Jun 2020 Dec 2019 Net gearing significantly lower due to trade, WHL Net debt (Rm) (6 772) (11 624) (11 783) working capital management, property sale a
Slide 21: Covenants
WOOLWORTHS HOLDINGS LIMITED INTERIM RESULTS 2021 ANALYST PRESENTATION COVENANTS Covenants amended and testing waived for December; we are within the pre Covid-19 covenant limits for SA and Australia Covenants* Dec 2020 Jun 2020 Dec 2019 Bank limit Australian debt and capital structure post sale of E
Slide 22: Cash Generation for the 26 Weeks
WOOLWORTHS HOLDINGS LIMITED INTERIM RESULTS 2021 ANALYST PRESENTATION CASH GENERATION FOR THE 26 WEEKS ENDED 27 DECEMBER 2020 Positive cash generation though improved trade, working capital management and sale of Bourke Street Mens Rm 8 000 1 052 Net gearing decreased by R4.8 billion (from June 2020
Slide 23: Dividend and Capital Structure
WOOLWORTHS HOLDINGS LIMITED INTERIM RESULTS 2021 ANALYST PRESENTATION DIVIDEND AND CAPITAL STRUCTURE • We are committed to building a stronger balance sheet and capital structure with a sustainable level of debt throughout the Group • Group gearing ratio at 1.1x (Australia at 0.6x and SA at 1.5x) •
Slide 24: Recent Trading
WOOLWORTHS HOLDINGS LIMITED INTERIM RESULTS 2021 ANALYST PRESENTATION RECENT TRADING Seven weeks post H1 sales growth Expected H2 price movement for R6 426m FBH is between 10% and 12% and for R18 903m (3.9) 13.9 FOOD is 2.5% (6.3) 12.0 10.9 10.0 (8.3) (11.2) 7.6 (21.8) FY21 – first FY21 – second FY2
Slide 25: Update and Outlook
WOOLWORTHS HOLDINGS LIMITED INTERIM RESULTS 2021 ANALYST PRESENTATION UPDATE AND OUTLOOK Roy Bagattini Group CEO WHL 24 / 2021
Slide 26: Transformation Underway
WOOLWORTHS HOLDINGS LIMITED INTERIM RESULTS 2021 ANALYST PRESENTATION TRANSFORMATION UNDERWAY 1 2 3 4 5 UNLOCK AND DRIVE FASHION EXPAND ACCELERATE AMPLIFY CREATE VALUE TURNAROUND LEADERSHIP DATA AND OUR GOOD IN AUSTRALIA AND GROWTH POSITION DIGITAL BUSINESS AND NEW IN BEAUTY IN FOOD INITIATIVES JOUR
Slide 27: Unlock and Create Value in Australia and New Zealand
WOOLWORTHS HOLDINGS LIMITED INTERIM RESULTS 2021 ANALYST PRESENTATION 1 UNLOCK AND CREATE VALUE IN AUSTRALIA ANZ FBH FOOD DATA & DIGITAL GBJ AND NEW ZEALAND We are successfully executing several initiatives to unlock and create value in ANZ Restructure the balance sheet to ensure sustainable funding
Slide 28: Unlock and Create Value in Australia and New Zealand
WOOLWORTHS HOLDINGS LIMITED INTERIM RESULTS 2021 ANALYST PRESENTATION 1 UNLOCK AND CREATE VALUE IN AUSTRALIA ANZ FBH FOOD DATA & DIGITAL GBJ AND NEW ZEALAND We are successfully executing several initiatives to unlock and create value in ANZ Stabilise and improve GP margin • DJ clearance stock down 3
Slide 29: Drive Fashion Turnaround and Growth in Beauty and Home
WOOLWORTHS HOLDINGS LIMITED INTERIM RESULTS 2021 ANALYST PRESENTATION 2 DRIVE FASHION TURNAROUND AND ANZ FBH FOOD DATA & DIGITAL GBJ GROWTH IN BEAUTY AND HOME Our immediate priority is to improve the underlying health of our fashion business – we are editing to amplify • Our challenges lie both in s
Slide 30: Drive Fashion Turnaround and Growth in Beauty and Home
WOOLWORTHS HOLDINGS LIMITED INTERIM RESULTS 2021 ANALYST PRESENTATION 2 DRIVE FASHION TURNAROUND AND ANZ FBH FOOD DATA & DIGITAL GBJ GROWTH IN BEAUTY AND HOME Our immediate priority is to improve the underlying health of our fashion business – we are editing to amplify Refreshed brand and product st
Slide 31: Drive Fashion Turnaround and Growth in Beauty and Home
WOOLWORTHS HOLDINGS LIMITED INTERIM RESULTS 2021 ANALYST PRESENTATION 2 DRIVE FASHION TURNAROUND AND ANZ FBH FOOD DATA & DIGITAL GBJ GROWTH IN BEAUTY AND HOME Our immediate priority is to improve the underlying health of our fashion business – we are editing to amplify Drive sourcing efficiencies •
Slide 32: Expand Leadership Position in Food
WOOLWORTHS HOLDINGS LIMITED INTERIM RESULTS 2021 ANALYST PRESENTATION 3 EXPAND LEADERSHIP POSITION IN FOOD ANZ FBH FOOD DATA & DIGITAL GBJ We will actively protect and grow our market share Strengthening our core • Continued market share gain in H1 supported by ongoing focus on product quality, inno
Slide 33: Accelerate Data and Digital Initiatives
WOOLWORTHS HOLDINGS LIMITED INTERIM RESULTS 2021 ANALYST PRESENTATION 4 ACCELERATE DATA AND DIGITAL INITIATIVES ANZ FBH FOOD DATA & DIGITAL GBJ We are prioritising our capital and operational spend towards data and digital transformation Use data to inform decision-making across all businesses • AWS
Slide 34: Amplify Our Good Business Journey
WOOLWORTHS HOLDINGS LIMITED INTERIM RESULTS 2021 ANALYST PRESENTATION 5 AMPLIFY OUR GOOD BUSINESS JOURNEY ANZ FBH FOOD DATA & DIGITAL GBJ Sustainability is core to our business, a distinct competitive advantage and a critical enabler of our strategies across the Group Developed new GBJ goals after c
Slide 35: Outlook
WOOLWORTHS HOLDINGS LIMITED INTERIM RESULTS 2021 ANALYST PRESENTATION OUTLOOK We are pleased with steady progress being made against strategic initiatives, but are cognisant that we are up against a tough second half • The operating environment will remain challenging and unpredictable – Weak macroe
Slide 36: Appendix
WOOLWORTHS HOLDINGS LIMITED INTERIM RESULTS 2021 ANALYST PRESENTATION APPENDIX WHL 35 / 2021
Slide 37: Group Income Statement Dec 2020
WOOLWORTHS HOLDINGS LIMITED INTERIM RESULTS 2021 ANALYST PRESENTATION GROUP INCOME STATEMENT Woolworths Country Road FBH Food Logistics WFS David Jones Group Treasury Intragroup Group Dec 2020 Rm Rm Rm Rm Rm Rm Rm Rm Rm Turnover and concession sales 6 426 18 903 280 – 12 472 5 978 – (1 012) 43 047 C
Slide 38: Group Income Statement Dec 2019
WOOLWORTHS HOLDINGS LIMITED INTERIM RESULTS 2021 ANALYST PRESENTATION GROUP INCOME STATEMENT Woolworths Country Road FBH Food Logistics WFS David Jones Group Treasury Intragroup Group Dec 2019 Rm Rm Rm Rm Rm Rm Rm Rm Rm Turnover and concession sales 7 236 17 040 253 – 11 812 5 464 – (923) 40 882 Con
Slide 39: Australasia Balance Sheet
WOOLWORTHS HOLDINGS LIMITED INTERIM RESULTS 2021 ANALYST PRESENTATION AUSTRALASIA BALANCE SHEET Dec 2020 Dec 2019 A$m A$m Country Country David Road David Road Jones Group Total Jones Group Total Assets Property, plant and equipment 799 106 905 926 134 1 060 Intangible assets 1 & 2 88 364 452 93 367
Slide 40: Trading Space
WOOLWORTHS HOLDINGS LIMITED INTERIM RESULTS 2021 ANALYST PRESENTATION TRADING SPACE Projected Projected Projected Dec 2020 Dec 2019 % Jun 2021 % Jun 2022 % Jun 2023 % 000m2 000m2 change 000m2 change* 000m2 change 000m2 change Woolworths Fashion, Beauty and Home 474 486 (1.9) 453 (6.6) 436 (3.8) 420
Slide 41: Store Locations
WOOLWORTHS HOLDINGS LIMITED INTERIM RESULTS 2021 ANALYST PRESENTATION STORE LOCATIONS Projected Projected Projected Dec 2020 Dec 2019 Growth Jun 2021 Growth* Jun 2022 Growth Jun 2023 Growth Woolworths Fashion, Beauty and Home 277 282 (5) 265 (14) 257 (8) 247 (10) South Africa 212 217 (5) 201 (14) 19
Slide 42: Woolworths Financial Services book performance
WOOLWORTHS HOLDINGS LIMITED INTERIM RESULTS 2021 ANALYST PRESENTATION Book performance Contribution to sales IAS 39 IFRS 9 % of retail sales purchased Dec Dec on Woolworths cards 2020 2019 13 349 Total Fashion, Beauty and Home 21.3% 24.1% 13 060 10% 12 329 Total Food 9.9% 11.4% 11 147 11 538 Aggrega
Slide 43: IFRS 16 – Impact by Segment
WOOLWORTHS HOLDINGS LIMITED INTERIM RESULTS 2021 ANALYST PRESENTATION IFRS 16 – IMPACT BY SEGMENT Dec 2020 Dec 2019 Group WSA DJ CRG Group WSA DJ CRG Rm Rm A$m A$m Rm Rm A$m A$m INCOME STATEMENT Depreciation 1 353 399 35 47 1 253 378 38 50 Finance costs – Lease liabilities 774 320 29 9 754 333 31 11
Slide 44: Disclaimer
WOOLWORTHS HOLDINGS LIMITED INTERIM RESULTS 2021 ANALYST PRESENTATION DISCLAIMER Shareholders are advised that the information in this presentation has not been reviewed and reported on by Woolworths Holdings’ external auditors and it does not constitute a profit forecast. Woolworths Holdings has ta
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Woolworths Holdings — H1 FY2021 Earnings Presentation on 6ix