Woolworths Group Ltd · ASX:WOW
Woolworths — FY2023 Earnings Presentation
49 slides from Woolworths's earnings presentation, Aug 23, 2023
Slide 1: ASX Market Announcement: Full Year Results Presentation
23 August 2023 ASX Market Announcements Office Australian Securities Exchange 20 Bridge Street Sydney NSW 2000 Full Year Results Presentation Attached for release to the market is the Full Year Results Presentation for the period ended 25 June 2023. Authorised by: Kate Eastoe, Group Company Secretar
Slide 2: Woolworths Group Full Year Results 2023
Woolworths Group Full Year Results 2023 1 Woolworths Group Full Year Results 2023
Slide 3: Contents
Woolworths Group Full Year Results 2023 2 Contents F23 Group summary and progress 4 Brad Banducci Group financial results and capital management 16 Stephen Harrison Business performance update 25 Current trading and outlook 42 Brad Banducci We create better experiences together for a better tomorrow
Slide 4: Acknowledgement of Country
Acknowledgement of Country Woolworths Group Full Year Results 2023 3 Woolworths Group acknowledges the many Traditional Owners of the lands on We remain committed to actively contributing to Australia’s reconciliation journey through listening which we operate and pay our respects to their Elders pa
Slide 5: F23 summary
Woolworths Group Full Year Results 2023 4 F23 summary Investing in our customers, team and platforms Delivered value and convenience to our customers in response to challenging inflationary environment with more to do in F24 Customer metrics largely stable over the year and improving as we exited Q4
Slide 6: Customer scores largely stable over the year but some momentum as we exited F23
Woolworths Group Full Year Results 2023 5 Customer scores largely stable over the year but some momentum as we exited F23; Care remains strong Voice of Customer: Net Promoter Score Voice of Customer: Customer Care Score 85 84 84 82 81 81 80 64 62 58 60 49 49 39 37 Jun-22 Jun-23 Jun-22 Jun-23 Woolwor
Slide 7: Pre-COVID shopping behaviours returning but value an increasing focus for customers
Woolworths Group Full Year Results 2023 6 Pre-COVID shopping behaviours returning but value an increasing focus for customers Items per Items per basket AU Food basket normalising after COVID Comp % NZ Food disruption in prior years Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 Shopping frequency
Slide 8: Impact of inflation and cost-of-living pressures having uneven impacts
Woolworths Group Full Year Results 2023 7 Impact of inflation and cost-of-living pressures having uneven impacts Woolworths Food Retail average price change BIG W Q4 growth by customer segment2 and comp item growth1 # of customers Sales Non-scan customers Budget members Mainstream members Q1'22 Q2'2
Slide 9: Delivering value for customers with more to come in F24
Woolworths Group Full Year Results 2023 8 Delivering value for customers with more to come in F24 Get your Woolies worth >450 seasonal products on 6,000 weekly >3,000 products on >600 weekly Prices Dropped for Spring specials Low Price Fresh specials More value every day >14 million Subscribers savi
Slide 10: Digital traffic and eCom growth continues
Woolworths Group Full Year Results 2023 9 Digital traffic and eCom growth continues Food and Everyday digital platforms WooliesX eCom sales (websites and apps) 37.8% 2.5x 16.3m 4-YR Q1 F20 Q4 F23 avg. weekly digital visits CAGR $5,079m F23 eCom sales 6.5m Q1 F20 avg. weekly digital visits $1,410m F1
Slide 11: Our Connected Group
Woolworths Group Full Year Results 2023 10 Our Connected Group Woolworths Retail Woolworths Food Our cornerstone B2C retail Company food business, famous for Delivering brands, products and capabilities that deliver value good food, good prices, good acts and always convenient and differentiation fo
Slide 12: Investing in our customers, team, communities and platforms
Woolworths Group Full Year Results 2023 11 Investing in our customers, team, communities and platforms Customers Team Communities Platforms • Highly competitive pricing across all • Increasing volume in MFDC and • Supporting meaningful hours • Removal of reusable plastic bags businesses and strong v
Slide 13: Adjacencies increasingly contributing to growth in F23
Woolworths Group Full Year Results 2023 12 Adjacencies increasingly contributing to growth in F23 Woolworths Food Company Delivering brands, products and capabilities that deliver value and F23 sales growth of 28% New partnership Focus on E2E operational differentiation due to diversified establishe
Slide 14: Supply chain transformation past the halfway mark; big year in 2024
Woolworths Group Full Year Results 2023 13 Supply chain transformation past the halfway mark; big year in 2024 2019 2020 2021 2022 2023 2024 2025 Transitioned to Improved efficiency commissioning and performance as and testing phase sites mature Moorebank National Melbourne Fresh DC, Heathwood Chill
Slide 15: Progress across our sustainability pillars in F23
Woolworths Group Full Year Results 2023 14 Progress across our sustainability pillars in F23 People Platinum Launched $122m #1 Retailer Making a positive change to the future AWEI employer Innovate level of direct community globally in 2022 of our people, our status achieved in Reconciliation Action
Slide 16: Contents
Woolworths Group Full Year Results 2023 15 Contents F23 Group summary and progress 4 Brad Banducci Group financial results and capital management Stephen Harrison Group financial results Key balance sheet metrics 16 Capital management framework Cash flow summary Capital expenditure Capital managemen
Slide 17: Group financial results and capital management
Woolworths Group Full Year Results 2023 16 Group financial results and capital management
Slide 18: F23 results summary
Woolworths Group Full Year Results 2023 17 F23 results summary Group sales Group NPAT2 ($ million) ($ million) 64,294 5.7% 60,849 53,080 55,733 1,721 48,805 vs. F22 13.7% vs. F22 7.1% 1,514 4-YR CAGR F22 F23 F19 1 F20 F21 F22 F23 Group EBIT Basic EPS2 ($ million) ($ cents) 15.8% vs. F22 3,116
Slide 19: Group trading performance
Woolworths Group Full Year Results 2023 18 Group trading performance Excluding direct COVID costs in the prior year, EBIT increased by 9.5% Group sales and EBIT H2 F23 F23 $ MILLION H2 F23 SALES CHANGE H2 F23 EBIT CHANGE F23 SALES CHANGE F23 EBIT CHANGE Before significant items Australian Food 23,48
Slide 20: Average inventory days up marginally; strong ROFE growth on COVID-impacted prior year
Woolworths Group Full Year Results 2023 19 Average inventory days up marginally; strong ROFE growth on COVID-impacted prior year Average inventory days1 ROFE Percentage (%) 29.9 29.7 14.9 13.7 28.6 F21 F22 F23 F22 F23 ROFE (before significant items) was 14.9%, an increase of Average inventory days i
Slide 21: Woolworths Group capital management framework
Woolworths Group Full Year Results 2023 20 Woolworths Group capital management framework Growth One of Australia’s Leading market Defensive Strong cash flow opportunities in leading and most position in Food & characteristics from AUS and NZ eCom and Investment proposition trusted brands Everyday Ne
Slide 22: Strong operating cash flow to sustain the business and invest for growth
Woolworths Group Full Year Results 2023 21 Strong operating cash flow to sustain the business and invest for growth $ MILLION F23 F22 CHANGE EBITDA – continuing operations 5,577 5,052 10.4% EBITDA – discontinued operations - 6,387 n.m. Prior year included Endeavour Group gain on demerger Group EBITD
Slide 23: Operating capex profile largely in line with prior year
Woolworths Group Full Year Results 2023 22 Operating capex profile largely in line with prior year Sustaining capex $ MILLION F23 F22 $ MILLION F23 F22 Sustaining capex 1,371 1,396 SIB 317 242 Renewals 364 423 Growth capex 517 525 Supply chain 254 358 Operating capex 1,888 1,921 IT 274 197 Productiv
Slide 24: Dividends and funding
Woolworths Group Full Year Results 2023 23 Dividends and funding 58 cps final dividend1 Debt maturity profile ($m)2 Dividends (cents per share) 1200 108 104 92 17 800 58 51 53 400 40 39 46 0 F21 F22 F23 F24 F25 F26 F27 F28 F29 F30 F31 F32 F33 Interim Final Non-recurring Endeavour Group Capital marke
Slide 25: Contents
Woolworths Group Full Year Results 2023 24 Contents F23 Group summary and progress 4 Brad Banducci Group financial results and capital management 16 Stephen Harrison Business performance update 25 Current trading and outlook 42 Brad Banducci
Slide 26: Woolworths Group Full Year Results 2023
Woolworths Group Full Year Results 2023 25
Slide 27: Australian Food
Woolworths Group Full Year Results 2023 26 Australian Food F23 F221 CHANGE Total sales ($m) 48,047 45,740 5.0% EBITDA ($m) 4,651 4,044 15.0% EBIT ($m) 2,865 2,406 19.1% EBIT ($m) – excluding direct COVID costs 2,865 2,617 9.5% Gross margin (%) 28.1 27.4 76 bps CODB (%) 22.1 22.1 6 bps EBIT to sales
Slide 28: Australian Food: Woolworths Food Retail
Woolworths Group Full Year Results 2023 27 Australian Food Woolworths Food Retail (Stores and eCom) F23 F221 CHANGE Total sales ($m) 47,648 45,445 4.8% EBITDA ($m) 4,550 3,982 14.3% EBIT ($m) 2,838 2,399 18.3% EBIT to sales (%) 6.0% 5.3% 68 bps Sales per square metre2 ($) 18,921 18,364 3.0% SALES PE
Slide 29: Progress against strategic priorities
Woolworths Group Full Year Results 2023 28 Progress against strategic priorities Caring for our communities and team Convenient and connected experiences Build love for Today’s Fresh Food People 28m meals donated via store food Healthier checkouts in 708 Direct to Members accessing waste diversion;
Slide 30: Woolworths Supermarkets evolving our integrated network to best serve our customers
Woolworths Group Full Year Results 2023 29 Woolworths 360 evolving our integrated network to best serve our customers Launched Proactive Services in Woolworths Opened two new CFCs in Rochedale and Caringbah; and Opened 10 net new stores and completed 43 renewals Supermarkets, an in-house trolley col
Slide 31: Australian Food: WooliesX
Woolworths Group Full Year Results 2023 30 Australian Food WooliesX (including eCom) F23 F22 CHANGE Total sales ($m) 6,432 6,090 5.6% DAP & EBIT before depreciation and amortisaton ($m) 340 261 30.0% DAP & EBIT ($m) 181 147 23.1% DAP & EBIT to sales (%) 2.8 2.4 40 bps SALES PERFORMANCE BY PLATFORM (
Slide 32: WooliesX F23 highlights
Woolworths Group Full Year Results 2023 31 WooliesX F23 highlights idX & Cartology eComX EverydayX Record levels of digital traffic across Continued demand for convenience Providing members with more value Group and Food and Everyday digital platforms +21% +39% +9% >80% 14.5m +6% increase in B2C of
Slide 33: Australian B2B
Woolworths Group Full Year Results 2023 32 Australian B2B
Slide 34: Australian B2B
Woolworths Group Full Year Results 2023 33 Australian B2B Sales and EBIT breakdown by continuing and exited business F23 F221 CHANGE F23 F221 CHANGE Sales ($m) 4,324 3,684 17.4% Sales ($m) Continuing businesses 3,947 3,217 22.7% B2B Food (Woolworths Food Company 3rd party) 3,126 2,599 20.3% Exited b
Slide 35: Australian B2B: B2B Food and Supply Chain
Woolworths Group Full Year Results 2023 34 Australian B2B Sourcing an image B2B Food B2B Food Strong sales growth in PFD driven by new Australian Grocery Wholesalers partnership Reorganised B2B Food portfolio, including business, higher customer demand, and with Community Enterprise Queensland to th
Slide 36: Woolworths Group Full Year Results 2023
Woolworths Group Full Year Results 2023 35
Slide 37: New Zealand Food
Woolworths Group Full Year Results 2023 36 New Zealand Food NZD ($) F23 F22 CHANGE Total sales ($m) 7,912 7,563 4.6% EBITDA ($m) 572 611 (6.3)% EBIT ($m) 249 316 (21.0)% Gross margin (%) 23.1 23.2 (9) bps CODB (%) 20.0 19.0 94 bps EBIT to sales (%) 3.2 4.2 (102) bps Sales per square metre ($) 18,208
Slide 38: New Zealand Food F23 highlights
Woolworths Group Full Year Results 2023 37 F23 highlights Living our purpose +9 pts +2 pts Improved Invested in a number Improved VOT Q4 VOC NPS score pay and conditions of safety initiatives for advocacy vs. F22 vs. Q3 F23 and Q4 F22 for store team customers and team Digital, eCom and innovation 12
Slide 39: Woolworths Group Full Year Results 2023
Woolworths Group Full Year Results 2023 38
Slide 40: BIG W
Woolworths Group Full Year Results 2023 39 BIG W F23 F22 CHANGE Total sales ($m) 4,785 4,431 8.0% EBITDA ($m) 348 245 41.6% EBIT ($m) 145 55 165.3% Gross margin (%) 31.6 31.5 9 bps CODB (%) 28.6 30.3 (170) bps EBIT to sales (%) 3.0 1.2 180 bps Sales per square metre ($) 4,756 4,409 7.9% ROFE (%) 11.
Slide 41: BIG W F23 highlights
Woolworths Group Full Year Results 2023 40 F23 highlights Breakfast library program now Live our purpose and National Toys for Joy program Store-controllable VOC supporting 30 schools every week show real care saving over 130 tonnes of stable in F23 at 83% in partnership with Australian waste from l
Slide 42: Contents
Woolworths Group Full Year Results 2023 41 Contents F23 Group summary and progress 4 Brad Banducci Group financial results and capital management 16 Stephen Harrison Business performance update 25 Current trading and outlook 42 Brad Banducci
Slide 43: Transformation of Woolworths New Zealand to deliver improved medium-term performance
Woolworths Group Full Year Results 2023 42 Transformation of Woolworths New Zealand to deliver improved medium-term performance Countdown rebranded to Everyday Rewards to Greater focus on Fresh; Better place to Woolworths. 80 renewals launch in Feb 2024. Christchurch Fresh DC opening planned over th
Slide 44: Current trading and outlook
43 Current trading and outlook Continuing to invest in our customers, team and platforms Sales in the first eight weeks of F24 showing similar trends to Q4 F23 with solid growth in Food but BIG W sales declining, reflecting cost-of-living pressures Woolworths Food Retail sales up ~6.5%1 with inflati
Slide 45: Thank you
Woolworths Group Full Year Results 2023 44 Thank you
Slide 46: Glossary
Woolworths Group Full Year Results 2023 45 Glossary Active eCom customers Customers that have made a purchase online in the last four weeks AGW Australian Grocery Wholesalers Pty Limited B2B Business to business B2C Business to customer CAGR Compound annual growth rate Cash realisation ratio Operati
Slide 47: Glossary continued
Woolworths Group Full Year Results 2023 46 Glossary continued NDC National distribution centre Net Promoter Score (NPS) A loyalty measure based on a single question where a customer rates a business on a scale of zero to 10. The score is the net result of the percentage of customers providing a scor
Slide 48: Glossary continued
Woolworths Group Full Year Results 2023 47 Glossary continued Other non-IFRS measures used in describing the business performance include: • Earnings before interest, tax, depreciation and amortisation (EBITDA) • Change in average prices • Cash flow from operating activities before interest and tax
Slide 49: Disclaimer
Woolworths Group Full Year Results 2023 48 Disclaimer This presentation contains summary information about Woolworths Group Limited (Woolworths Group) and its activities current as at the date of this presentation. It is sourced from and should be read in conjunction with Woolworths’ other periodic