Wesfarmers Limited · ASX:WES
Wesfarmers — Macquarie Australia Conference 2019
20 slides from Wesfarmers's conference presentation, May 2, 2019
Slide 1: Macquarie Conference Briefing Presentation cover letter to ASX
2 May 2019 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, Thursday, 2 May 2019. Yours faithfully, L J KENYON COMPAN
Slide 2: Wesfarmers update – Macquarie conference briefing presentation
Wesfarmers update – Macquarie conference briefing presentation Thursday 2 May 2019
Slide 3: Group overview
Group overview Bunnings Kmart Group Industrials Officeworks Other • Leading retailer of • Kmart: a leading • Diversified portfolio of • Leading retailer & • 15% ownership home improvement, product industrial businesses supplier of office interest in Coles outdoor living & development & deep products
Slide 4: Wesfarmers' primary objective is to provide a satisfactory return to shareholders
Wesfarmers’ primary objective is to provide a satisfactory return to shareholders We believe it is only possible to achieve this over the long term by: Anticipating the needs of our Looking after our team Engaging fairly with our customers & delivering members & providing a safe, suppliers & sourcin
Slide 5: Superior long-term financial performance
Superior long-term financial performance Wesfarmers has a track record of delivering superior long term performance TSR Index (November 1984 = 100) Total Shareholder Return1 50,000 TSR since November 1984: Wesfarmers: 19.3% (CAGR) 45,000 All Ordinaries Accumulation Index: 10.8% (CAGR) 40,000 35,000
Slide 6: Strong progress over last year
Strong progress over last year Short-term priorities (2018) Deliverables • BUKI exit Address areas of underperformance • Sale of Bengalla, KTAS & Quadrant Energy • Coles demerger • Formation of flybuys JV Reposition the • Establishment of Advanced Analytics Centre portfolio • Leadership renewal in C
Slide 7: Approach to capital allocation
Approach to capital allocation Opportunities to deliver superior returns by investing for the long term 1. Portfolio of existing businesses 2. Adjacent opportunities 3. Value-accretive transactions with attractive returns on capital – Opportunities to invest & drive continued – Investment opportunit
Slide 8: Portfolio of businesses with attractive returns on capital
Portfolio of businesses with attractive returns on capital Rolling 12 months to EBIT Cap Emp RoC Share of EBIT 31 December 2018 ($m) ($m) (%) (%) Bunnings Australia & New Zealand 1,572 3,133 50.2 Kmart Group1,2 (continuing operations) 612 1,806 33.9 Officeworks 164 951 17.2 Industrials3 (continuing
Slide 9: Divisional update
Divisional update Bunnings Kmart Group Industrials Officeworks – Accelerating – Reinforcing – Disciplined – Focused on – Business – Continue to investment in customer value in management of operational turnaround is a extend leading digital offer a competitive store network efficiencies & work in pr
Slide 10: Investment in data & digital capabilities
Investment in data & digital capabilities Continued investment in our data & digital capability over the long term 1 Continued investment by our businesses to Ongoing partnership with Coles on flybuys, 2 strengthen digital offer & improve customer one of Australia’s most recognized loyalty experienc
Slide 11: Approach to value-accretive transactions
Approach to value-accretive transactions Supports our primary objective of providing a satisfactory return to shareholders Disciplined focus on value-accretive transactions Returns must exceed risk-adjusted cost of capital Financial returns assessed over the long term Wesfarmers advantages Remain op
Slide 12: Kidman Resources transaction
Kidman Resources transaction Transaction Overview • This morning Wesfarmers announced that it has entered into a Process & Exclusivity Deed with Kidman Resources in relation to a proposal to acquire 100 per cent of the company for $1.90 cash per share. • The proposal is supported by the Kidman Board
Slide 13: Group performance update
Group performance update
Slide 14: 1H19 financial performance from continuing operations
1H19 financial performance from continuing operations1 Results reflect a period of significant change following successful completion of actions taken to reposition Group’s portfolio Revenue EBIT NPAT +4.2% +9.5% +10.4% $13,814m $14,388m $1,502m $978m $1,645m $1,080m $1,196m $678m 1H18 1H19 1H18 1H1
Slide 15: Returns-focused growth
Returns-focused growth Disciplined capital investment & focus on generating sustainable earnings growth in Wesfarmers’ continuing businesses has delivered strong return on capital over the long term $m Divisional EBIT & ROC from continuing operations1 % 3,000 35 30 2,500 25 2,000 20 1,500 15 1,000 1
Slide 16: Balance sheet & cash flows
Balance sheet & cash flows Strong balance sheet & highly cash generative portfolio supports investment & shareholder distributions Strong balance sheet & low net financial debt Fixed financial obligations well managed $3.6b Bank facilities & bonds 26% $1.5b Weighted average lease tenure of 5.3 $0.3b
Slide 17: Summary
Summary
Slide 18: Summary
Summary • Delivering a satisfactory return to shareholders over the long term remains our primary objective • Our divisions remain focused on delivering greater value to customers & on managing the businesses for long term success & value creation • Further investment in developing the digital offer
Slide 19: Questions
Questions
Slide 20: Wesfarmers
We Wesfarmers