Wesfarmers Limited · ASX:WES
Wesfarmers — Investor Day (March 2019)
52 slides from Wesfarmers's investor day presentation, Mar 20, 2019
Slide 1: Presentation & Operational Site Tour for Bunnings
20 March 2019 The Manager Market Announcements Office Australian Securities Exchange Dear Manager, PRESENTATION & OPERATIONAL SITE TOUR FOR BUNNINGS Following is a presentation that will be given at a briefing and operational site tour of the Bunnings business today, Wednesday 20 March 2019 at 10:00
Slide 2: Bunnings Presentation & Operational Site Tour
Bunnings Presentation & Operational Site Tour Michael Schneider Managing Director, Bunnings Group
Slide 3: Leadership team here today
Leadership team here today James Todd Melissa O’Neill Debbie Poole Leah Balter Ryan Baker Rod Caust Director GM COO Director GM GM Marketing Corporate Affairs Digital & Analytics Operations (AUS) Trade Ian Hughes Carl Callaghan Michael Schneider Keith Murray Clive Duncan Justin Williams GM GM Managi
Slide 4: Long-term value creation – consistent strategy for growth
Long-term value creation – consistent strategy for growth 14 Price. Range. Service. 1,600 12 Sales (LHS) 1,400 EBIT (RHS) 1,200 10 Sales ($billion) 1,000 EBIT ($m) 8 800 6 600 4 400 2 200 0 0 1st Bunnings Warehouse opens Acquisition of BBC Note: Sales figures exclude sales from Trade Centres, Frame
Slide 5: Staying relevant to customers' changing lifestyle needs
Staying relevant to customers’ changing lifestyle needs Home Market Size Home & Lifestyle; Improvement Commercial Home & Outdoor Traditional Improvement Living Hardware 1980 2019 Bunnings | 2019 Investor Briefing | 4
Slide 6: Drivers of home improvement & building material spend
Drivers of home improvement & building material spend Number & age of New household Housing churn existing houses formation Australian 10 million existing homes ~100,000 new detached ~450,000 house transfers market houses per annum, per annum characteristics 70% > 20 years old; supported by populati
Slide 7: Disciplined execution continues to drive sustainable long-term growth
Disciplined execution continues to drive sustainable long-term growth Bunnings | 2019 Investor Briefing | 6
Slide 8: Changing landscape continues to provide growth opportunities
Changing landscape continues to provide growth opportunities Competitive market Customer preferences Digital evolution Fragmented & competitive Societal trends are impacting Technology continues to market with niche category spend on lifestyle products & how redefine the shopping specialists custome
Slide 9: Fragmented & competitive market – from large format to niche category
Fragmented & competitive market – from large format to niche category Bunnings | 2019 Investor Briefing | 8
Slide 10: Home improvement, lifestyle & commercial – market structure & drivers
Home improvement, lifestyle & commercial – market structure & drivers Multiple Drivers Varied Formats Note: online activity prevalent in all other formats • Household disposable • Category specialist income • Renovation activity • Mass merchants • Housing • Traditional hardware ‒ Churn, value & form
Slide 11: Focus is on creating value for the customer throughout their life or business phases
Focus is on creating value for the customer throughout their life or business phases Building relationships with our customers over the long term ensures we understand & can respond to their changing needs, builds trust & allows us to create more meaningful interactions that are valued Bunnings | 20
Slide 12: Demographic & societal trends influence spending on lifestyle products
Demographic & societal trends influence spending on lifestyle products Demographic trends Societal trends • Population growth increasingly • Digitisation & connectivity driven by net migration • Changing lifestyle requirements • Housing affordability is driving of varying generations high density li
Slide 13: Continuing to invest in our consumer offer
Continuing to invest in our consumer offer Making DIY easier • Targeting first time DIY customers • Continuing customer education & building confidence • Renovation of third ‘Bunnings House’ ‒ New content ‒ Focus on smaller dwellings ‒ Focus on next generation of customers Bunnings | 2019 Investor B
Slide 14: Continuing to invest in our consumer offer
Continuing to invest in our consumer offer 1 3 Adjacent Grow low market opportunities of a wider share categories addressable market 2 4 DIFM – installation Invest in range services including innovation & expansion assembly & facilitated installation Bunnings | 2019 Investor Briefing | 13
Slide 15: Kitchens
Opportunities for growth in low market share categories Kitchens <10% of market strong share of flat pack market Bunnings | 2019 Investor Briefing | 14
Slide 16: Bathrooms
Opportunities for growth in low market share categories Bathrooms <10% of market Bunnings | 2019 Investor Briefing | 15
Slide 17: Window Furnishings
Opportunities for growth in low market share categories Window Furnishings <10% of market Bunnings | 2019 Investor Briefing | 16
Slide 18: Flooring
Opportunities for growth in low market share categories Flooring <5% of market Bunnings | 2019 Investor Briefing | 17
Slide 19: Smarter & Safer Homes for Independent Living
Continued investment in range innovation & expansion Smarter & Safer Homes for Independent Living Bunnings | 2019 Investor Briefing | 18
Slide 20: Smart Products
Continued investment in range innovation & expansion Smart Products Bunnings | 2019 Investor Briefing | 19
Slide 21: Storage
Continued investment in range innovation & expansion Storage Bunnings | 2019 Investor Briefing | 20
Slide 22: Outdoor Structures
Continued investment in range innovation & expansion Outdoor Structures Bunnings | 2019 Investor Briefing | 21
Slide 23: Power Garden
Continued investment in range innovation & expansion Power Garden Bunnings | 2019 Investor Briefing | 22
Slide 24: Outdoor Living
Continued investment in range innovation & expansion Outdoor Living Bunnings | 2019 Investor Briefing | 23
Slide 25: Nursery & Garden
Continued range innovation & expansion Nursery & Garden Bunnings | 2019 Investor Briefing | 24
Slide 26: Expanding our services experience
Expanding our services experience A core part of the Bunnings Strategy is a compelling service offer • Meaningful & personalised customer experiences (in-store, in-home, & online) • More service investments (know-how & intensity, digital experiences) • Better customer comms (in-store, online) Bunnin
Slide 27: Expanding our services experience
Expanding our services experience Our services offer will grow to meet customers’ needs as behaviours evolve • Bunnings in-home design consultants • Onsite project management for project builders • Hire Shop: ‒ Ute ‒ Trailer ‒ Equipment • Assembly & basic installation: ‒ Clothes line ‒ Play equipmen
Slide 28: Expanding our services experience
Expanding our services experience • Supply & install: ‒ hot water services ‒ roller doors ‒ air conditioners • Services Facilitation: connecting trade & consumer customers – Fixed Price Installation (toilets, sink & basin mixers, ceiling fans / bathroom heat lamps) – ‘Get Quotes’ Service trial – kit
Slide 29: We are building a commercial business that emulates our consumer offer
We are building a commercial business that emulates our consumer offer Immediate Priorities Progress Enhance our • Tactical expansion of trade ranges trade offer • New trade website launched (November 2018) • Launched PowerPass App (including Self Checkout) • ‘Made for the Trade’ campaign • Investme
Slide 30: Our Trade Business Model
Our Trade Business Model Builders Business & Organisations Trades % of Trade 38% 18% 44% revenue Account Managers & Business Development How we In-store Trade Managers & Trade Trade Specialists manage Specialists Specialists Channels to Stores & Trade Stores & Trade Stores market Centres Centres Bun
Slide 31: Trade
Continued innovation & expansion in trade ranges Trade Bunnings | 2019 Investor Briefing | 30
Slide 32: Continuing to invest in stores
Continuing to invest in stores • Since 2013, an average of 11 stores added per year Store count 369 359 • Continued investment in stores to support future growth 347 334 – Target 10-14 new stores per annum 320 313 – New store locations cater for population growth, changing demographics – Flexible st
Slide 33: Building our anytime, anywhere offer
Building our anytime, anywhere offer Continued investment in channels offering choice & convenience to deliver customers a seamless & easy experience anytime, anywhere • 20,000 products • Choice & • Regionally based • Kitchen • 80% of orders convenience test & learn ahead • Garden picked up in-store
Slide 34: Expansion of our online offer gives customers choice & convenience
Expansion of our online offer gives customers choice & convenience Bunnings | 2019 Investor Briefing | 33
Slide 35: Expansion of our online offer gives customers choice & convenience
Expansion of our online offer gives customers choice & convenience • Builds on customers’ desire for information & inspiration • Focused on complementing strong in-store experience • Customer-led execution & experience Bunnings | 2019 Investor Briefing | 34
Slide 36: Leveraging digital & data
Leveraging digital & data Investment in digital capabilities to create an integrated & seamless commerce platform that builds on a foundation of: • a loyal customer base • a wide & growing store footprint • long standing supplier relationships Strong existing digital audience • Fourth most visited s
Slide 37: Building our anytime, anywhere offer
Building our anytime, anywhere offer CLICK& COLLECT Special Digital PowerPass Click & Coming Soon… Orders eBay Pop • Click & Collect in Receipts App Collect at Online Up Store: Tasmania launched: launched: Craigieburn: launched: January • Fully transactional September November December February 2019
Slide 38: Customer-led growth
Customer-led growth Deeper, wider commercial Leverage digital engagement & data Category innovation Anytime, anywhere & expansion offer Expand services offer Invest in store pipeline Bunnings | 2019 Investor Briefing | 37
Slide 39: Customer-led growth
Customer-led growth Bunnings has been awarded the Readers Digest Most Trusted Brand for 13 consecutive years. Bunnings | 2019 Investor Briefing | 38
Slide 40: Evolving our marketing
Evolving our marketing Bunnings | 2019 Investor Briefing | 39
Slide 41: Evolving our marketing
Evolving our marketing Video available at: https://www.wesfarmers.com.au/bunnings-videos 2019 Investor Briefing | 40
Slide 42: Evolving our marketing
Evolving our marketing Bunnings | 2019 Investor Briefing | 41
Slide 43: Evolving our marketing
Evolving our marketing Bunnings | 2019 Investor Briefing | 42
Slide 44: Evolving our marketing – Made for Trade creative
Evolving our marketing • “Made for Trade” Creative Video available at: https://www.wesfarmers.com.au/bunnings-videos Bunnings | 2019 Investor Briefing | 43
Slide 45: Our team
Our team Bunnings | 2019 Investor Briefing | 44
Slide 46: Our team
Our team Safety Training & Development Retention • Safety is our number one team • Over 12,000 experts & qualified team • >80% Retention measure: members • Industry leading agreements - 12.0 TRIFR at end of 2018, an improvement of 7% • R12 over 850,000 training hours • Over 43,000 team members Bunni
Slide 47: Our team
Our team Focussed on continuing to attract & retain the best talent – all levels, all functions • Leveraging digital to drive communications Workplace presents a number of opportunities: • Connect & engage with the team • Creates faster access to information & training • Live stream training Mike Sc
Slide 48: We live here too
We live here too Bunnings | 2019 Investor Briefing | 47
Slide 49: We live here too
We live here too Drought relief Flood/Bush Fire Share the Dignity Drought relief reds run Townsville flood/Tassie bushfires Share the Dignity sausage sizzle reds run sausage sizzle ‘It’s in the bag’ campaign Over $1.25 million raised Over $310K raised Over 137,000 bags collected – second year suppor
Slide 50: We live here too
We live here too • Focus on meaningful community impact • Stores seen as trusted community hubs • Strong focus on local, relevant & meaningful support Bunnings | 2019 Investor Briefing | 49
Slide 51: Thank you
Thank you af HAW. ie tt Oe a= eae
Slide 52: Question & answer session
Question & answer session Michael Schneider Justin Williams Managing Director Chief Financial Officer