Slide 1: Automation Site Tour and Presentations ASX Release
ASX Release 11 May 2023 AUTOMATION SITE TOUR AND PRESENTATIONS Coles Group Limited (Coles, ASX: COL) is hosting a site tour of its Automated Distribution Centre located in Redbank, Queensland on Thursday, 11 May 2023. Attached is the For personal use only accompanying presentation which also covers
Slide 2: Automation site tour and presentations
0 For personal use only Automation site tour and presentations 11 May 2023
Slide 3: Disclaimer
1 Automation site tour and presentations Disclaimer For personal use only This presentation contains summary information about Coles Group Limited (ACN 004 089 936) and its controlled entities (collectively, ‘Coles’, ‘Coles Group’ or ‘the Group’) and Coles’ activities as at the date of this presenta
Slide 4: Acknowledgement of Traditional Custodians
Coles wishes to acknowledge the Traditional Custodians of this land We recognise their strength and resilience and pay our respects to their Elders past and present. Coles extends that respect to all Aboriginal and Torres Strait Iskander people, and recognises their rich cultures and their continuin
Slide 5: Agenda
3 Automation site tour and presentations Agenda For personal use only Topic Time Presenter Opening remarks 1:20pm – 1:30pm Leah Weckert Automation projects presentation 1:30pm – 2:15pm Matt Swindells, Kevin Gunn, Charlie Elias Matt Swindells, David Brewster, Brooke Donnelly, Sustainability showcase
Slide 6: Presenters
4 Automation site tour and presentations For personal use only Automation projects presentation Matt Swindells Charlie Elias Kevin Gunn Chief Operations and Chief Finance and Property EGM Operations Strategy and Sustainability Officer Officer Transformation
Slide 7: Key takeaways from today
5 Automation projects presentation Key takeaways from today For personal use only • We are investing ~$1 billion in our supply chain automation program (~70% invested by end 1H23), single largest investment in technology in our 109-year history • Two new automated DCs (ADCs) replacing five manual DC
Slide 8: Exclusive partnership with Witron
6 Automation projects presentation Coles has an exclusive partnership with Witron For personal use only - a global leader in supply chain technology Witron has 50+ years of experience in supply Supplies automation technology to companies chain around the world, with a focus on retail businesses Witr
Slide 9: Exclusive partnership with Witron commenced in FY19
7 Automation projects presentation Our exclusive partnership with Witron commenced in FY19 For personal use only Successfully managed COVID-19 disruptions to construction industry FY18 FY19 FY20 FY21 FY22 FY23 FY24 Extensive evaluation Coles entered an Structural work at Construction Internal fit-ou
Slide 10: Supply chain transformation and consolidation of footprint
8 Automation projects presentation Our supply chain transformation will result in consolidation of our For personal use only existing footprint with greater velocity From five ambient manual DCs with inconsistent Automated DCs provide double capacity on half the range to two automated DCs with full
Slide 11: National distribution network following ramp up of the ADCs
9 Automation projects presentation Our national distribution network following ramp up of the ADCs For personal use only Type of DC Coles DC Ambient Non-Coles DC Frozen Automated DC Chilled C&S Townsville Fresh Produce Redbank ADC Parkinson CDC Kemps Creek ADC1 Arndell Park Eastern Creek CDC Edinbur
Slide 12: Redbank ADC strategic benefits beyond cost efficiencies
10 Automation projects presentation The Redbank ADC will deliver strategic benefits beyond structural For personal use only cost efficiencies Better availability for customers Improved efficiency Improved accuracy of deliveries Improved safety and resilience Improved availability with optimised Auto
Slide 13: A more efficient and sustainable supply chain
11 Automation projects presentation A more efficient and sustainable supply chain For personal use only Powered by renewable LED and sensor lighting Improved pallet consolidation electricity through our to reduce energy reducing truck movements and contract with CleanCo1,2 consumption transport cost
Slide 14: Development plan with staggered completion dates
12 Automation projects presentation Development plan designed with staggered completion For personal use only dates to enable project team to manage transition across both sites Redbank (QLD) Kemps Creek (NSW) Construction and fit-out completed in December 2022, External building works completed ear
Slide 15: Redbank ADC
13 Automation projects presentation Redbank ADC For personal use only Range Footprint Full ambient range 66,000 m2 (half the footprint of our ~18,000 SKUs current DCs) (Replaces inconsistent range across existing QLD and NSW DCs) Capacity Productivity 4 million cases 3.5x more productive per week th
Slide 16: Investment aligns with our financial framework
14 Automation projects presentation Our investment in our two ADCs aligns with For personal use only our financial framework To deliver attractive returns with disciplined approach to capital allocation while maintaining a strong balance sheet to drive long-term shareholder value 1. Focus on achievi
Slide 17: The ADCs will deliver structural cost efficiencies
15 Automation projects presentation TheADCswilldeliverstructuralcostefficiencies For personal use only Capital expenditure $1,040 million (~70% invested by end 1H23) Reduced logistics 5 manual DCs → 2 ADCs costs1 ~2/3 operating costs of existing DCs2 Redbank (QLD) – 3Q FY23 First inbound delivery Ke
Slide 18: Q&A session
16 Automation projects presentation For personal use only Q&A session
Slide 19: Sustainability showcase
17 Sustainability Showcase For personal use only Sustainability showcase Matt Swindells David Brewster Brooke Donnelly Chief Operations and Chief Legal Officer General Manager Sustainability Officer Sustainability Deb Galle Charlotte Rhodes Martin Smithson General Manager General Manager General Man
Slide 20: Key takeaways from today
18 Sustainability Showcase Key takeaways from today For personal use only • Coles has an important role to play to sustainably help all Australians lead healthier, happier lives • Ensuring the long term sustainability of our operations is not optional, it is fundamental to building trust with our cu
Slide 21: Our sustainability priorities
19 Sustainability Showcase Our sustainability …address what matters most to our stakeholders1 For personal use only priorities… • Australian first sourcing • Climate change • Food waste • Plastics and packaging • Circular economy Together to zero emissions A team that is better together Together to
Slide 22: Strong corporate governance of sustainability priorities
20 Sustainability Showcase Strong corporate governance ensures our sustainability priorities are For personal use only at the heart of everything we do Oversees effectiveness Board of sustainability policies and practices Evaluates identification and management of sustainability Board Audit & Risk C
Slide 23: Recent highlights
21 Sustainability Showcase Recent highlights For personal use only #1 for community contribution by an Australian company, 2022 GivingLarge corporate WGEA Employer of Choice Secured path to 100% renewable 40% Women in leadership philanthropy report1 for Gender Equality electricity by end of FY25 ach
Slide 24: Together to zero emissions
22 Sustainability Showcase Together to zero emissions Coles supports the goals of the Paris Agreement to keep global temperatures well below 2°C. For personal use only We will also pursue efforts to limit the temperature increase to 1.5°C above pre-industrial levels Scope 1 & 2 emissions Performance
Slide 25: Together to zero waste
23 Sustainability Showcase Together to zero waste Coles understands we have a role to play in reducing waste. For personal use only We follow and promote the waste hierarchy – avoid, reduce, reuse and then recycle Target Progress 85% Group’s solid waste 82.5% diverted from landfill by end FY25 achie
Slide 26: Removal of soft plastic shopping bags
24 Sustainability Showcase Together to zero waste: For personal use only removal of soft plastic shopping bags We are committing to phase out soft plastic shopping bags in- store and online from Coles supermarkets by end of June 2023 • Removing 230 million plastic bags from circulation per annum1 •
Slide 27: Together to zero waste: packaging case study
25 Sustainability Showcase Gold Award Compostable Packaging Together to zero waste: Own Brand coffee pods Design of the Year For personal use only packaging case study Target 100% recyclable, reusable or compostable packaging by FY25 94.6% of our Own Brand packaging was categorised recyclable, reusa
Slide 28: Farming that is better together
26 Sustainability Showcase Farming that is better together We care about how the food we sell is produced and sourced and are For personal use only committed to supporting local farmers and producers Recognition Animal welfare Coles farm program Investing in Australian farms Our animal welfare polic
Slide 29: Carbon neutral beef case study
27 Sustainability Showcase Carbon neutral beef case study For personal use only • First major Australian supermarket to launch certified carbon neutral beef Own Brand range1 • We work with farmers to identify ways to reduce emissions, such as using renewable energy, changing herd management practice
Slide 30: Sourcing that is better together
28 Sustainability Showcase Sourcing that is better together Safeguarding, valuing and promoting the human rights of workers in our business For personal use only and supply chain is a vital part of our role in the community Recognition Building trust Strengthening partnerships Continuous improvement
Slide 31: Sourcing that is better together: case studies
29 Sustainability Showcase Sourcing that is better For personal use only together: case studies Accommodation standards for workers in horticulture • In response to concerns around worker accommodation in the Australian horticulture sector Coles and ERSCA commissioned Deloitte to research accommodat
Slide 32: Safer choices together
30 Sustainability Showcase Safer choices together Coles is committed to providing a safe working environment and a For personal use only culture of physical and mental wellbeing Key safety measure We aim to achieve a year on year Key focus areas improvement in TRIFR Safe sustainable leadership Smart
Slide 33: A team that is better together
31 Sustainability Showcase A team that is better together We celebrate differences and want to ensure everyone feels like they belong with five key focus areas – we For personal use only are making good progress, however, we know there is more we can do Recent achievements Gender Equity Other Gender
Slide 34: A community that is better together
32 Sustainability Showcase A community that is better together We aim to sustainably help all Australians lead healthier, happier For personal use only lives – we will continue to look for ways to support our communities Community partnerships Ranked #1 $142 million for the third year in a row in th
Slide 35: Sustainability disclosures
33 Sustainability Showcase For personal use only Sustainability disclosures
Slide 36: Sustainability related disclosures
34 Sustainability Showcase Sustainability related disclosures For personal use only Sustainability Annual Modern slavery Corporate report report statement Governance ESG information and progress Incorporating our climate-related Overview of our commitment statement against our public targets financi
Slide 37: Q&A session
35 Sustainability Showcase For personal use only Q&A session
Slide 38: Thanks
For personal use only Thanks 36