Wesfarmers Limited · ASX:WES
Wesfarmers — Macquarie Australia Conference 2018
18 slides from Wesfarmers's conference presentation, May 2, 2018
Slide 1: ASX cover letter: Macquarie conference briefing presentation
2 May 2018 The Manager Company Announcements Office Australian Securities Exchange Dear Manager, MACQUARIE CONFERENCE BRIEFING PRESENTATION Following is a presentation that is to be given at the Macquarie Australia Conference in Sydney today, Wednesday, 2 May 2018. Yours faithfully, K E HUNTER ASSIS
Slide 2: Wesfarmers update – Macquarie conference briefing presentation
Wesfarmers update – Macquarie conference briefing presentation Wednesday, 2 May 2018
Slide 3: Group overview
Group overview Performance for financial year ending 30 June 2017 $68.4b $4.2b $2.5b 223,000 +4,000 Revenue operating dividends Employees Australian cash flows declared stores Divisional EBIT: Home Department Industrials Officeworks Coles Coles Home Improvement Home Stores Home Home Home Improvement
Slide 4: Immediate priorities
Immediate priorities 1 Address areas of underperformance 2 Reposition the portfolio 3 Drive opportunities for growth Wesfarmers Limited | Macquarie Conference 2018 | 3
Slide 5: The Wesfarmers Way
The Wesfarmers Way Wesfarmers’ objective is to deliver satisfactory returns to shareholders over the long term ENABLERS Divisional autonomy Active portfolio management Underpinned by a strong balance sheet & sustainable practices AREAS OF FOCUS ` ` Developing great Leveraging data & Entrepreneurial
Slide 6: Approach to capital allocation
Approach to capital allocation Opportunities to deliver superior returns from investment in existing growth businesses while leveraging assets & capabilities in adjacent & new opportunities 1 2 Portfolio of strong businesses with Adjacent opportunities good momentum Framework & incentives to encoura
Slide 7: Superior long term financial performance
Superior long term financial performance TSR Index Total Shareholder Return1 (November 1984 = 100) TSR since November 1984: 40,000 Wesfarmers: 19.2% (CAGR) All Ordinaries Accumulation Index: 10.7% (CAGR) 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0 WES TSR (since listing) All Ordinaries Accumul
Slide 8: Group performance update
Group performance update
Slide 9: Group financial performance
Group financial performance • Record first half operating cash flows of $2.9b Half-year ended 31 December ($m) 2017 2016 – Proactive working capital management Revenue 35,903 34,917 EBITDA (exc. significant items)1 3,000 3,064 – Improvement in cash realisation ratio to EBIT 1,113 2,429 132.6% in 1H1
Slide 10: Returns-focused growth
Returns-focused growth $m Bunnings Australia & New Zealand % $m Kmart % 1,500 50 600 50 40 500 40 1,000 400 30 30 300 20 20 500 200 10 100 10 0 0 0 0 FY15 FY09 FY10 FY11 FY12 FY13 FY14 FY16 FY17 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 EBIT [LHS] ROC [RHS] EBIT [LHS] ROC [RHS] $m Officeworks % $
Slide 11: Balance sheet & debt management, cash generation
Balance sheet & debt management, cash generation $m • Balance sheet strengthened Debt maturity profile3 2,000 – Net financial debt1 of $3.3b as at 31 March 2018, down from $4.3b at 1,000 30 June 2017 – Sale of Curragh completed March 2018 0 • Strong improvements in credit metrics (1,000) FY18 FY19 F
Slide 12: Reshaping the portfolio
Reshaping the portfolio
Slide 13: Demerger rationale
Demerger rationale Repositioning Wesfarmers & Coles for the next decade Dec 17 (R12) capital employed • Wesfarmers is targeting a higher capital weighting toward contribution businesses with strong earnings growth prospects – Successful turnaround of Coles has been delivered; Rest of portfolio 39% f
Slide 14: Retained stake in flybuys & Coles
Retained stake in flybuys & Coles A leading Australian loyalty program Alignment supports greater value creation • flybuys to be an ongoing partnership between Wesfarmers & Coles – Greater access to capital & resources • Strengthen existing loyalty program through ongoing relationship between flybuy
Slide 15: Summary
Summary
Slide 16: Summary
Summary • Continued focus on delivering a satisfactory return to shareholders over the long term • 2018 a year of change to reset the portfolio • Reinforce disciplines & competitive advantages within the Wesfarmers Way • Focus on developing great talent & teams, leveraging data & digital capability
Slide 17: Questions
Questions
Slide 18: Wesfarmers
We Wesfarmers