Woolworths Group Ltd · ASX:WOW
Woolworths — Shareholder Meeting (November 2004)
26 slides from Woolworths's shareholder meeting presentation, Nov 26, 2004
Slide 1: ASX cover letter: CEO's AGM presentation materials
26 November, 2004 The Manager, Companies Australian Stock Exchange Limited Company Announcements Office Level 4 20 Bridge Street SYDNEY NSW 2000 Dear sir, WOOLWORTHS LIMITED: CHAIRMAN’S ADDRESS - LISTING RULE 3.13.3 In terms of Listing Rule 3.13.3, attached is a copy of the 2004 Woolworths Limited A
Slide 2: Woolworths Limited Annual General Meeting
WOOLWORTHS. LIMITED : Annual General Meeting |
Slide 3: Woolworths: We Sell for Less (Safeway)
—] WOOLWORTHS ae WE SELL FOR LESS meme SAFEWAY 2 Woolworths Limited
Slide 4: Five Year Report Card
Stron Five Year Report Card Five Year Annual Average Sales +9.8% Gross Profit % (ex wholesale) -52bps Cost % (ex wholesale) -65bps equals $2.5bn Customer share of savings 81% EBIT Margin % 15 pts EBIT $ +15% Net Profit $ +17% EPS (pre Goodwill) 421% Dividend +20% Days Inventory -2.5 days Funds Emplo
Slide 5: Best TSR of all ASX 100 companies over five years
wn i hid il ; Woolworths has provided the best TSR of all ASX 100 companies (excluding financial institutions and property trusts) over the five years to 30 June 2004 2. Westfarmers 144% 16. AristocratLeis 62% 30. Qantas Airways -1% 3. QBE Insurance 133% 17. AustralianGas 58% 31. | News Corp 2h 4, F
Slide 6: Highest return in the listed retail sector
l 1 6 ; ti) | dN i a @ e NAMM Highest return in the listed retail sector 180% 165% 160% 40% 131% 420% 100% BO% 50% 40% 31% - | a5 _ om ; a | , WOOLWORTHS FOODLAND DAVID JONES COLES MYER — HARVEY NORMAN 5 rths Limited
Slide 7: FY03 vs FY04 results
FY03 FY04 Change Sales ($ mil) 22,749.5 24,192.5 +6.3% Gross Margin (%) 24.39 24.11 -0.28%pts Cost of Doing Business (%) 20.63 20.14 -0.49%pts EBIT to Sales (%) 3.76 3.97 +0.21%pts EBIT before goodwill ($ mil) 878.1 984.2 +12.1% EBIT after goodwill ($ mil) 855.0 960.3 +12.3% Funds Employed ($ mil) 1
Slide 8: Liquor sales and bottle shops
| nu eT ¢ Total liquor sales exceeded $2.1 billion for the year * Currently trading at a rate of approx $2.5 billion pa. — achievement of target « 648 bottle shops in total, including those attached to supermarkets plus freestanding sites * 7 new Dan Murphy’s stores opened The Cheeper Liquor last ye
Slide 9: ALH acquisition terms
OO OOTETEETTooO . Acquisition Price $1.4bn (including ALH debt) . Revenue FY05 $1bn () . Unique asset . EPS and Value accretive (D source ALH Target’s Statement 12 August 2004 AUSTRALIAN LEISURE & HOSPITALITY GROUP 8 Woolworths Limited
Slide 10: ALH opportunities and expansion
* Utilise expertise of Mathieson Group (pubs) and Woolworths (retail liquor) to improve on current offer: - Growth rates of MGW gaming significantly higher than for ALH Queensland pubs - Growth rates for Woolworths liquor business significantly higher than ALH * Excellent base to expand both retail
Slide 11: ALH expected growth and synergies
OO OOTETEETTooO * Expect gaming growth rates to remain strong particularly in QLD — Smoking bans will have a one-off impact which was built into our acquisition economics + Anticipated synergies will be achieved and probably bettered — Gross margin improvements: + Liquor and food buying benefits — C
Slide 12: Funding and balance sheet strength
io ! | ateg QUAL} * Maintain strength of balance sheet: — Funding program of $1.8bn comprising acquisition cost of ALH and debt within ALH, MGW and BMG — Preserve our credit rating to retain flexibility to pursue future growth opportunities, including further acquisitions — Continue low cost of debt
Slide 13: MGW, ALH and BMG hotels and bottleshops
E i 78% MGW ALH BMG 115 Bottleshops 262 Boitleshops 14 Boitleshops 32 Hotels 133 Hotels 35 Hotels & Clubs Bruandwo joint venture operating 391 bottleshops (in addition to Woolworths’ 533 bottleshops) and 200 hotels and clubs Woolworths Limited
Slide 14: Petrol sales and sites
| | | NAAM . Sales of $2.2. billion up 28.3% . Highly attractive customer offer . 68 million litres per week . 422 petrol sites including 100 from Woolworths/Caltex alliance . On track for 434 sites by end of first half — overall target is 470 Woolworths Limited
Slide 15: BIG W results
E HT FY03 Change Sales ($ mil) 2,500.3 +8.7% Gross Margin (%) 30.88 -0.63%pts Cost of Doing Business (%) 26.73 -0.75%pts EBIT to Sales (%) 4.15 +0.13%pts EBIT* ($ mil) 103.7 412.1% Funds Employed ($ mil) 269.5 +20.9% Average ROFE (%) 36.5 +2. 5%pts * No purchased goodwill in BIG W 14 Woolworths Limi
Slide 16: Division results table
Sales ($ mil) Gross Margin (%) Cost of Doing Business (%) EBIT to Sales (%) EBIT before goodwill ($ mil) EBIT after goodwill ($ mil) Funds Employed ($ mil) Average ROFE (%) Change +12.0% -2.0%pts -2.3%pts +0.3%pts +17.0% +19.2% -10.1% +4.0%pts Woolworths Limited
Slide 17: Focus areas
i ) p I) / a NT Focus Areas Continuing Growth High single digit sales growth Improved customer offer Lower prices Bolt-on acquisitions mimi Cost Reductions Project Refresh | tinues (The Enabler) roject Refresh | continue Project Refresh || deliveries Capital & Balance Efficient Balance Sheet Sheet M
Slide 18: Opportunities for ongoing growth in revenues and earnings
I Considerable opportunities for ongoing growth in both revenues and earnings Continuing opportunity to grow market share . Woolworths’ market share of Food, Liquor & Grocery (FLG) remains below 30% and still low by world standards Independent grocers and specialty food stores hold just under 50% De
Slide 19: New range and formats; acquisitions
i I ll | | TTT (iitiiiittiititittittititiittiiiitittniiiiititi Considerable opportunities for ongoing growth in both revenues and earnings WW New range and formats + — New format rollouts (eg. smaller BIG Ws to country towns, urban metro supermarkets such as Potts Point) +» New categories across sup
Slide 20: Woolworths Limited
Woolworths Limited
Slide 21: Cumulative cost savings
9 year cum savings = $6.9b Savings in years F05 to F08 = $4.4b 1 gs00 a: Additional 20 bps pa of sales to 3.65% cumulative 2 Level Il 1336 Increasingly logistics driven 1181 Level | Mainly line items. and reorganisation PA Savings $ millions 00 01 02 03 04 05 O06 O7 O8 Woolworths Limited
Slide 22: Supply chain implementation
. Implementation of Stocksmart and AutostockR within budget and ahead of schedule . Perth RDC now operational . Transport Management System built and now being trialled with selected vendors . Roll cages fully operational in WA . Importance of ongoing vendor communication Woolworths Limited
Slide 23: Current trading and FY05 outlook
aoa Sales + For FY05 our expectation is that sales will continue to grow in the upper single digits Current Trading + 24 quarter dependent on six weeks pre-Xmas. Anticipate strong X-mas * Supermarkets comparable with 1* quarter. Victorian sales remain strong and above comparable for rest of Australi
Slide 24: Charity work and community support
N I a oc Charity work primarily driven by compassion of our employees Significant supporter of: - Children’s Hospitals - Australia Day - Harmony Day Woolworths Community Stores Program/Fred Hollows Foundation helping indigenous communities develop sustainable local stores Environmental focus — plast
Slide 25: Charitable work and staff recognition
i our charitable work across all division ICT TT WooLworTHs LIMITED Encourage, support and recognise staff achievements Considerable potential for A li C ele future development ustra For odes oundation Woolworths Limited
Slide 26: Thank You
Thank You Woolworths Limited