Wesfarmers Limited · ASX:WES
Wesfarmers — Wesfarmers Ltd Old — FY2024 Earnings Presentation
67 slides from Wesfarmers's earnings presentation, Aug 29, 2024
Slide 1: 2024 Full-Year Results Briefing Presentation
2024 FULL-YEAR RESULTS BRIEFING PRESENTATION To be held on 29 August 2024
Slide 2: Presentation outline
Presentation outline Item Presenter Slide Group performance overview Rob Scott – Managing Director, Wesfarmers Limited 3 Financial performance Anthony Gianotti – Chief Financial Officer, Wesfarmers Limited 10 Outlook Rob Scott – Managing Director, Wesfarmers Limited 18 Q&A Rob Scott – Managing Direc
Slide 3: Group Performance Overview
GROUP PERFORMANCE OVERVIEW ROB SCOTT Managing Director Wesfarmers Limited
Slide 4: Wesfarmers Way
Wesfarmers Way Wesfarmers’ primary objective Anticipating the needs of our Looking after our team is to deliver a satisfactory return customers and delivering members and providing a safe, to shareholders. We believe it is competitive goods and services fulfilling work environment only possible to a
Slide 5: 2024 Full-year highlights
2024 Full-year Maintained focus on highlights responsible long-term management Revenue NPAT up 1.5% to up 3.7% to Portfolio is well- Benefits from proactive $44.2b $2.6b positioned to deliver strong growth and returns over the long term focus on productivity and efficiency • High quality businesses
Slide 6: Results reflect continued strong execution
Results Driving sustainable reflect continued Retail businesses’ market- leading value credentials long-term returns strong execution resonating with customers and driving transaction growth • Growing addressable markets from high-quality • Focus on productivity businesses • Digitising operations •
Slide 7: Divisional highlights
Divisional highlights BUNNINGS GROUP KMART GROUP WESCEF OFFICEWORKS • Performance highlights the • Significant earnings growth • Strong operating performance with • Growth across key categories resilience of the offer • Kmart’s lowest price positioning and increased plant production • Market share g
Slide 8: Focus on long-term value, consistent with our objective
Focus on PEOPLE FY24 long-term value, 11.0 consistent with total recordable injury frequency rate (TRIFR) and a our objective continued focus on safety 3.8% Indigenous employment1, maintaining employment parity CLIMATE AND COMMUNITIES ENVIRONMENT FY24 43% FY24 women in Board and 5.4% Leadership Team
Slide 9: Group performance summary
Group performance summary Year ended 30 June ($m)1 2024 2023 Var % Revenue 44,189 43,550 1.5 EBIT 3,989 3,863 3.3 EBIT (after interest on lease liabilities) 3,753 3,644 3.0 NPAT 2,557 2,465 3.7 Basic earnings per share (cps) 225.7 217.8 3.6 Return on equity (R12,%) 31.3 31.4 (0.1 ppt) Operating cash
Slide 10: Financial Performance
FINANCIAL PERFORMANCE ANTHONY GIANOTTI Chief Financial Officer Wesfarmers Limited
Slide 11: Divisional sales performance
Divisional sales performance Comp. 2H24 Total sales sales growth2 Year ended 30 June ($m)1 2024 2023 growth (%) growth (%) (%) Bunnings Group 18,943 18,519 2.3 2.1 2.9 • Retail sales results reflect continued strong execution from well-positioned businesses Kmart3 9,024 8,487 6.3 6.4 4.7 • Retail di
Slide 12: Divisional earnings performance
Divisional earnings performance Earnings $m ROC % Year ended 30 June1 2024 2023 Var % 2024 Var (ppt)2 Performance summary • Continued commercial and consumer sales growth Bunnings Group 2,251 2,230 0.9 69.2 3.8 • Cost discipline and improved productivity supported investments in Excl. net property c
Slide 13: Other business performance summary
Other business performance summary Year ended 30 June1 ($m) Holding % 2024 2023 Var % Share of profit/(loss) of associates and JVs 40 344.4 Other EBT result includes: BWP Trust 22.32 9 • Favourable property revaluation movements Other associates and joint ventures3 Various (21) (13) (61.5) in BWP Tr
Slide 14: Working capital and cash flow
Working capital and cash flow NET WORKING CAPITAL CASH MOVEMENT • Divisional operating cash flows increased 4.0%, with divisional cash realisation Year end 30 June ($m) 2024 2023 of 101%1 Receivables and prepayments (153) 41 – Reflects disciplined net working capital management at Bunnings Inventory
Slide 15: Capital expenditure
Capital expenditure CAPITAL EXPENDITURE • Gross capital expenditure of $1,076m, down 16.5% Year end 30 June1 ($m) 2024 2023 Var % – Lower capex largely due to lower spend on store building projects in Bunnings Bunnings Group 268 405 (33.8) and lower development spend on the Covalent lithium project,
Slide 16: Balance sheet and debt management
Balance sheet and debt management • Continue to focus on balance sheet and cost of funds DEBT MATURITY PROFILE1 – Weighted average cost of debt of 3.87% for the year (FY23: 3.32%) $m 2,000 – Impact of interest rate increases substantially mitigated by fixed rate capital 1,500 markets debt and intere
Slide 17: Shareholder distributions
Shareholder distributions SHAREHOLDER DISTRIBUTIONS1 • Fully-franked ordinary final dividend of $1.07 per share $/share – Takes full-year ordinary dividend to $1.98 per share 5.00 • Dividend record date 4 September 2024; dividend payable 9 October 2024 4.00 3.78 • Dividend investment plan: not under
Slide 18: Outlook
OUTLOOK ROB SCOTT Managing Director Wesfarmers Limited
Slide 19: Portfolio of high-quality businesses
Portfolio of high-quality businesses Images TBU Strong, value-based retail Strategic manufacturing Exposure to growing Businesses supporting offers with broad capabilities supporting demand in the health, global decarbonisation customer appeal critical industries beauty and wellness sector Underpinn
Slide 20: Well positioned to deliver growth and returns over the long term
Well positioned to deliver growth and returns over the long term Businesses with Growth and value Optionality to deploy attractive growth through incremental and reallocate capital opportunities earnings streams Wesfarmers 2024 Full-year results | 20
Slide 21: Group outlook
Group outlook • Wesfarmers remains focused • The Group’s retail divisions • The performance of the • Wesfarmers maintains a strong on long-term value creation remain well positioned to meet Group’s industrial businesses balance sheet and portfolio of and continues to invest to customer demand for va
Slide 22: Questions
QUESTIONS
Slide 23: Appendix: Divisional Summaries
APPENDIX: DIVISIONAL SUMMARIES Wesfarmers 2024 Full-year results | 23
Slide 24: Bunnings Group
BUNNINGS GROUP MICHAEL SCHNEIDER Managing Director Bunnings Group
Slide 25: Bunnings Group performance summary
Bunnings Group performance summary Year ended 30 June1 ($m) 2024 2023 Variance % Revenue 18,968 18,539 2.3 EBITDA 3,195 3,127 2.2 Depreciation and amortisation (821) (782) (5.0) EBIT 2,374 2,345 1.2 Interest on lease liabilities (123) (115) (7.0) EBT 2,251 2,230 0.9 Net property contribution 2 38 (9
Slide 26: Bunnings Group performance overview
Bunnings Group performance overview Revenue growth of 2.3% to $19.0b • Total store sales growth of 2.6% and store-on-store sales growth of 2.1% • Continued growth across both consumer and commercial segments • Growth in transactions and units sold, reflecting strong value credentials • Pleasing 2H24
Slide 27: Bunnings Group progress on strategy
Bunnings Group progress on strategy CARE SIMPLIFY • Ongoing focus on improving team safety • Leveraged technology to improve productivity and better align team rosters to peak trading periods • New Enterprise Agreement rewarding team and enabling more flexible work options • Reduced manual tasks thr
Slide 28: Bunnings Group outlook
Bunnings Group outlook • Bunnings continues to maintain its long-term focus on sustainable earnings growth through the economic cycle, underpinned by: – A resilient operating model – Leading customer value proposition – Focus on simplicity and productivity • Despite challenging trading conditions in
Slide 29: Kmart Group
KMART GROUP IAN BAILEY Managing Director Kmart Group
Slide 30: Kmart Group performance summary
Kmart Group performance summary Year ended 30 June1 ($m) 2024 2023 Variance % Revenue 11,107 10,635 4.4 EBITDA 1,546 1,347 14.8 Depreciation and amortisation (505) (498) (1.4) EBIT 1,041 849 22.6 Interest on lease liabilities (83) (80) (3.8) EBT 958 769 24.6 EBT margin (%) 8.6 7.2 ROC (R12, %) 65.7
Slide 31: Kmart Group performance overview
Kmart Group performance overview • Revenue increased by 4.4% to $11,107m ‒ Kmart comparable sales grew by 6.4% ‒ Kmart maintained lowest price leadership delivering sales growth across all categories, with customer numbers, transactions and units sold increasing on last year ‒ Target comparable sale
Slide 32: Kmart Group progress on strategy
Kmart Group progress on strategy • Kmart Group continued to invest in strategic initiatives to grow share of customer wallet and to develop data and digital assets: – Continued improvement in the product offer delivered through leveraging world-class Anko product development capabilities – RFID1 cap
Slide 33: Kmart Group outlook
Kmart Group outlook • Kmart Group will continue to progress its strategic agenda: – Leveraging the strength of its world-class product development capabilities to maintain a competitive advantage – Investment in technology for stores and supply chain to enable future growth – Distribution of Anko pr
Slide 34: WesCEF
WESCEF IAN HANSEN AARON HOOD Managing Director Deputy Managing Director & Wesfarmers Chemicals, Chief Operating Officer Energy & Fertilisers Wesfarmers Chemicals, Energy & Fertilisers
Slide 35: Chemicals, Energy and Fertilisers performance summary
Chemicals, Energy and Fertilisers performance summary Year ended 30 June1 ($m) 2024 2023 Variance % Revenue2 Chemicals3 1,289 1,665 (22.6) Energy 531 497 6.8 Fertilisers 927 1,144 (19.0) Total 2,747 3,306 (16.9) EBITDA 578 769 (24.8) Depreciation and amortisation (137) (99) (38.4) EBIT 441 670 (34.2
Slide 36: Chemicals, Energy and Fertilisers performance overview
Chemicals, Energy and Fertilisers performance overview • Revenue of $2,747m decreased 16.9% and earnings of $440m decreased 34.2% for the year, largely impacted by lower global commodity prices, particularly for ammonia and associated products • Chemicals: Earnings decreased significantly on the pri
Slide 37: WesCEF operational performance and key commodity pricing
Chemicals, Energy and Fertilisers operational performance and key commodity pricing Safety Plant Productivity (Chemicals2) Ammonia Price TRIFR1 (R12) Production Volume and Availability3 CFR Far East 5 kt % US$/t 1,300 100 1,200 1H FY24 4 1,000 1,150 95 3 800 1,000 90 600 2 400 850 85 1 200 0 700 80
Slide 38: Chemicals, Energy and Fertilisers outlook
Chemicals, Energy and Fertilisers outlook • Chemicals earnings will be dependent on global ammonia pricing and associated impacts from pass-through mechanisms in some customer contracts – AN earnings anticipated to benefit from a favourable sales mix supported by increased demand from WA mining cust
Slide 39: Officeworks
OFFICEWORKS SARAH HUNTER Managing Director Officeworks
Slide 40: Officeworks performance summary
Officeworks performance summary Year ended 30 June1 ($m) 2024 2023 Variance % Revenue 3,434 3,357 2.3 EBITDA 360 335 7.5 Depreciation and amortisation (136) (124) (9.7) EBIT 224 211 6.2 Interest on lease liabilities (16) (11) (45.5) EBT 208 200 4.0 EBT margin (%) 6.1 6.0 ROC (R12, %) 18.7 18.3 Total
Slide 41: Officeworks performance overview
Officeworks performance overview • Sales growth of 2.3% to $3.4b – Growth across key categories including technology, stationery, art, education (SAE), and Print & Create, offset by lower furniture sales – Continued above-market sales growth in technology – Strong Black Friday and End of Financial Y
Slide 42: Officeworks progress on strategy
Officeworks progress on strategy Evolving Officeworks’ offer to meet changing customer needs • Expanded new categories such as Next Gen AI computing, accessories and digital displays • Evolving the SAE, furniture and Print & Create offers with new private label and exclusive brands, the growth of pe
Slide 43: Officeworks outlook
Officeworks outlook • Officeworks remains focused on delivering profitable growth by meeting the changing needs of customers as they work, learn, create and connect • Well-positioned to support value-conscious customers through continued investment in Low Prices, Widest Range, and Best Experience ac
Slide 44: Industrial & Safety
INDUSTRIAL & SAFETY TIM BULT Managing Director Wesfarmers Industrial & Safety
Slide 45: Industrial and Safety performance summary
Industrial and Safety performance summary Year ended 30 June1 ($m) 2024 2023 Variance % Revenue 2,022 1,992 1.5 EBITDA 195 184 6.0 Depreciation and amortisation (82) (80) (2.5) EBIT 113 104 8.7 Interest on lease liabilities (4) (4) - EBT 109 100 9.0 EBT margin (%) 5.4 5.0 ROC (R12, %) 8.3 8.0 Safety
Slide 46: Industrial and Safety performance overview
Industrial and Safety performance overview • Revenue growth of 1.5% to $2,022m – Blackwoods’ revenue increased, driven by growth from strategic customers in Australia, particularly in the mining, utilities, logistics, government and manufacturing sectors – Sales growth in most major trading regions
Slide 47: Industrial and Safety outlook
Industrial and Safety outlook • Trading conditions are expected to become more challenging, with the demand outlook for Industrial and Safety dependent on overall economic conditions, business confidence and investment, and commodity prices • Each business remains focused on delivering continued imp
Slide 48: Wesfarmers Health
WESFARMERS HEALTH EMILY AMOS Managing Director Wesfarmers Health
Slide 49: Health performance summary
Health performance summary Year ended 30 June1 ($m) 2024 2023 Variance % Revenue 5,624 5,312 5.9 EBITDA 133 124 7.3 Depreciation and amortisation (78) (74) (5.4) EBIT2 55 50 10.0 Interest on lease liabilities (5) (5) - EBT2 50 45 11.1 EBT (excluding purchase price allocation adjustments) 70 58 20.7
Slide 50: Health performance overview
Health performance overview • Priceline delivered strong sales growth – Driven by store network expansion, compelling promotional activity and online sales growth – In 2H24, materially reduced prices on a range of commonly purchased products • Pharmaceutical Wholesale delivered positive sales growth
Slide 51: Health progress on strategy
Health progress on strategy Retail Wholesale MediAesthetics Digital Health Leading pharmacy Pharmaceutical Leading One-stop-shop for consumers’ and retail stores wholesaler of choice MediAesthetics business health and wellness needs • Significant progress on • Delivered significant • Acquired SILK i
Slide 52: Health outlook
Health outlook • Wesfarmers Health is well positioned to deliver improved financial performance and grow sales, supported by a clear transformation plan focused on opportunities to accelerate growth and improve returns, while capitalising on long-term sector tailwinds • The division continues to act
Slide 53: OneDigital
ONEDIGITAL NICOLE SHEFFIELD Managing Director Wesfarmers OneDigital
Slide 54: Significant data and digital capabilities across the Group
Significant data and digital capabilities across the Group Large scale digital reach Unique and complementary Driving value through across the Group member programs deeper customer connections and operating efficiency Digital interactions / month Rising penetration of OnePass 220m+ (vs 94m in FY19)
Slide 55: OneDigital performance and outlook
OneDigital performance and outlook • Increasingly playing an important role accelerating the retail and health divisions’ omnichannel growth through deepening customer connections and increasing sales • Launched significant enhancements to the OnePass CVP 1, providing additional value to members thr
Slide 56: Catch performance summary
Catch performance summary • GTV declined 28.5% due to significant reductions in the in-stock range to exit Year ended 30 June1,2 ($m) 2024 2023 Var % unprofitable lines, lower customer traffic and increased competitive intensity Gross transaction value 524 733 (28.5) • Loss of $96m includes $23m of
Slide 57: Appendix: Supplementary Information
APPENDIX: SUPPLEMENTARY INFORMATION Wesfarmers 2024 Full-year results | 57
Slide 58: Divisional return on capital
Divisional return on capital 2024 2023 Cap Emp1 Cap Emp1 Rolling 12 months to 30 June EBT ($m) ROC (%) EBT ($m) ROC (%) Var (ppt) ($m) ($m) Bunnings Group 2,251 3,254 69.2 2,230 3,410 65.4 3.8 Kmart Group 958 1,458 65.7 769 1,635 47.0 18.7 WesCEF2 440 3,292 13.4 669 3,091 21.6 (8.2) Officeworks 208
Slide 59: Group management balance sheet
Group management balance sheet ($m)1,2 FY24 1H24 FY23 Inventories 6,102 6,176 6,039 Receivables and prepayments 2,459 2,187 2,300 Trade and other payables (5,377) (5,805) (5,268) Other 351 369 252 Net working capital 3,535 2,927 3,323 Property, plant and equipment 5,653 5,578 5,365 Goodwill and inta
Slide 60: Movements in net financial debt
Movements in net financial debt Movements in net financial debt ($b) Net financial debt perating cash flows Lease payments Dividends paid Net capex ther Net financial debt 30 une 2023 30 une 2024 • Net financial debt position of $4.3b as at 30 June 2024, compared to the net financial debt position o
Slide 61: Management of lease portfolio
Management of lease portfolio • Lease liabilities totalled $6.5b and represented 58% of Group fixed Lease liabilities ($m) FY24 FY23 financial obligations as at 30 June 2024 Bunnings Group 3,402 3,568 • Average remaining committed lease term of 4.0 years1 (FY23: 4.1 years) Kmart Group 2,237 2,341 –
Slide 62: Revenue reconciliation – Kmart Group
Revenue reconciliation – Kmart Group Year ended 30 June1 ($m) 2024 2023 Segment revenue (Gregorian) 11,107 10,635 Less: Non-sales revenue (67) (64) Headline sales (Gregorian) 11,040 10,571 Add: Gregorian adjustment 123 156 Headline sales revenue (Retail) 11,163 10,727 1. 2024 retail calendar consist
Slide 63: Retail store networks
Retail store networks As at 30 June 2024 1,926 locations across Australia and New Zealand Brand NSW/ACT VIC QLD SA WA TAS NT NZ Total Bunnings Group Warehouse 81 64 52 19 29 7 3 31 286 Smaller format 19 14 11 2 9 - - 10 65 Trade 7 3 6 2 3 1 - 9 31 Tool Kit Depot 1 1 1 5 7 - - - 15 Beaumont Tiles1 34
Slide 64: Retail calendars
Retail calendars Business Retail sales period Bunnings, Officeworks and Catch Full-year 2024 1 Jul 2023 to 30 Jun 2024 (12 months) Full-year 2023 1 Jul 2022 to 30 Jun 2023 (12 months) Full-year 2022 1 Jul 2021 to 30 Jun 2022 (12 months) Kmart Full-year 2024 26 Jun 2023 to 30 Jun 2024 (53 weeks) Full
Slide 65: Glossary of terms (1 of 2)
Glossary of terms (1 of 2) Term AASB Australian Accounting Standards Board Australian Light Minerals. ALM is the company holding WesCEF’s 50 per cent share in the Covalent lithium project and is responsible for the sales ALM and marketing of lithium products as well as undertaking exploration activi
Slide 66: Glossary of terms (2 of 2)
Glossary of terms (2 of 2) Term ktpa Kilotonnes per annum ktCO2e Kilotonnes of carbon dioxide equivalent LNG Liquefied natural gas LPG Liquefied petroleum gas m Million mw megawatt n.m. Not meaningful Interest-bearing loans and borrowings less cash at bank and on deposit and held in joint operation,
Slide 67: Wesfarmers
Ws Wesfarmers