Wesfarmers Limited · ASX:WES
Wesfarmers — JPMorgan Investor Conference, Edinburgh and New York 2010
109 slides from Wesfarmers's conference presentation, Sep 24, 2010
Slide 1: JPMorgan Investment Conferences cover letter
For personal use only 24 September 2010 The Manager Company Announcements Office Australian Securities Exchange Dear Sir, JP MORGAN INVESTMENT CONFERENCES NEW YORK, 27 - 28 SEPTEMBER 2010 AND EDINBURGH, 30 SEPTEMBER - 1 OCTOBER 2010 Following is a presentation that is to be given at the JP Morgan in
Slide 2: Philosophy, Performance & Direction
For personal use only Philosophy, Performance & Direction JPMorgan Investor Conference Edinburgh September 2010
Slide 3: Disclaimer
2 Disclaimer This presentation has been prepared by Wesfarmers Limited. The information contained in this presentation is for For personal use only information purposes only and does not constitute an offer to issue or arrange to issue, securities or other financial products, nor is it intended to c
Slide 4: Philosophy based on a single focus
For personal use only Philosophy based on a single focus Satisfactory returns to shareholders
Slide 5: Long-term, consistent strategies
4 Long-term, consistent strategies For personal use only MANAGING BALANCE SHEET EFFECTIVELY
Slide 6: Strong long-term performance
5 Strong long-term performance EPS WES For personal use only (cents per share) Share Price ($A) 300 48 250 40 200 32 150 24 100 16 50 8 0 0 00 01 02 03 04 05 06 07 08 09 10 EPS (AGAAP) Girrah EPS Landmark EPS EPS (AIFRS) ARG EPS Wesfarmers Share Price Sep-00 Sep-01 Sep-02 Sep-03 Sep-04 Sep-05 Sep-06
Slide 7: Portfolio of leading brands
6 Portfolio of leading brands Retail Businesses Industrial Businesses For personal use only Insurance
Slide 8: Management Team
7 Management Team Managing Director Richard Goyder For personal use only Finance Director Terry Bowen Divisional Managing Directors Coles Ian McLeod Home Improvement & Office Supplies John Gillam Target Launa Inman Kmart Guy Russo Resources Stewart Butel Insurance Rob Scott Chemicals, Energy & Ferti
Slide 9: Group Results
For personal use only Group Results
Slide 10: Group performance highlights
9 Group performance highlights For personal use only • Group EBIT result of A$2.9 billion – Solid retail performance, despite tough trading conditions in the second half – Improved performance from industrial businesses following return to more normalised operating conditions – Encouraging Insurance
Slide 11: Group performance highlights (cont)
10 Group performance highlights (cont) For personal use only • Coles achieved encouraging earnings growth; turnaround continues to meet Wesfarmers' expectations • Bunnings continued to deliver a strong performance, with improvements in both the retail & trade offers • Kmart & Officeworks made good p
Slide 12: Group performance summary
11 Group performance summary For personal use only Year ended 30 June (A$m) 2010 2009 % Revenue 51,827 50,982 1.7 EBITDA 1 3,786 3,803 (0.4) EBIT 1 2,869 2,947 (2.6) 1 4.5 Net profit after tax (pre significant items) 1,702 1,628 1 2.8 Net profit after tax (post significant items) 1,565 1,522 Operati
Slide 13: EBIT performance
12 EBIT performance For personal use only • Robust earnings performance across most divisions – Retail earnings up 15.8%, reflecting good progress on strategic plans – Industrial earnings up 38.6%, on more normalised operating conditions – Resources earnings down 81.4%, affected by lower commodity p
Slide 14: Cash flows
13 Cash flows • For personal use only Portfolio of strong cash generating businesses • Record operating cash flow performance despite reduction from Resources • Cash realisation improved through continued working capital management A$m % 3,500 140 3,000 120 2,500 100 2,000 80 1,500 60 1,000 40 500 2
Slide 15: Divisional EBIT
14 Divisional EBIT For personal use only Year ended 30 June (A$m) 2010 2009 % Coles 962 831 15.8 Home Improvement 728 659 10.5 Office Supplies 74 65 13.8 Target 381 357 6.7 Kmart 196 109 79.8 Resources 1 165 885 (81.4) Insurance 122 91 34.1 Industrial & Safety 111 114 (2.6) Chemicals & Fertilisers 1
Slide 16: Non-trading & significant items
15 Non-trading & significant items For personal use only 2010 2010 (A$m) Segment Comment Pre-tax Post-tax Coles (property) (21) (17) Other Property impairments & surplus lease provision Kmart (33) (23) Other Supply chain restructuring WES CEF1 (5) (4) Other Restructuring costs Coregas (53) (52) Othe
Slide 17: Operating Divisions
For personal use only Operating Divisions
Slide 18: Coles
Coles 17 Coles 1. Building a solid foundation For personal use only Strategies 2. Delivering consistently well 3. Driving the Coles difference • Food & Liquor comp sales growth of 5.0%1 & 5.6%1 total sales growth • Enhanced value & customer trust • Improved fresh food offer leading to FY10 increased
Slide 19: Coles strategy on track
Coles strategy on track Coles 18 Five years – three phases of recovery Building a Solid Delivering Driving the Coles use only Foundation Consistently Well Difference For personalPerformance • Create a strong top team • Embed the new culture • Culture of continuous improvement • Cultural change • Tea
Slide 20: Home Improvement
Home Improvement 19 & Office Supplies 1. Profitable sales growth For personal use only 2. Better stock flow Strategies 3. Stronger team engagement & development 4. Improving productivity & execution 5. Sustainability • 10.3% cash sales growth with store-on- store growth of 7.3% • 10.8% lift in trade
Slide 21: Office Supplies
Home Improvement 20 & Office Supplies 1. Improve the customer offer For personal use only 2. Improve customer service Strategies 3. Team development & engagement 4. Reduce costs & complexity 5. Drive sales & profitability • Retail store sales growth of 9.0%; strong transaction growth • Double digit
Slide 22: Target
21 Target 1. Profitable sales growth For personal use only • investment in store portfolio • growth in clothing & homewares range • clear customer communication Strategies • investment in technology 2. Product leader • focus on core destination categories • differentiation & speed to market 3. Disci
Slide 23: Kmart
22 Kmart 1. Outstanding customer experience For personal use only 2. High velocity product 3. Lowest price Strategies 4. Clear, simple and impactful promotions 5. Every site a success 6. Best people, great company • Good customer response to lowest prices & better in-store offer • Comp store sales d
Slide 24: Resources
Resources 23 Resources 1. Maximise export sales & optimise sales mix For personal use only 2. Cost reduction programs Strategies 3. Expansion opportunities 4. Extend product & market reach 5. Sustainability • Earnings affected by foreshadowed reduction in export coal prices • Curragh remains a lowes
Slide 25: Insurance
24 Insurance 1. Performance improvement For personal use only 2. Focus on customer needs Strategies 3. Building the best team 4. Effective risk management 5. Selective acquisition growth • Strong turnaround in underwriting profitability; underwriting EBITA up 87.5%, total insurance EBITA up 27.2% FY
Slide 26: Chemicals, Energy & Fertilisers
25 Chemicals, Energy & Fertilisers 1. Improve offers For personal use only 2. Improve competitiveness Strategies 3. Progress evaluation of ammonium nitrate (AN) expansion plans 4. Growth opportunities • Improved earnings following return to full gas supply in June ‟09 • Production & demand improved
Slide 27: Industrial & Safety
Industrial & Safety 26 Industrial & Safety 1. Increase share of customers‟ spend 2. Target higher growth sectors For personal use only 3. Transition Coregas Strategies 4. Improve supply chain & organisational effectiveness 5. Strengthen leadership positions 6. Sustainability & people • Solid result
Slide 28: Other business performance summary
27 Other business performance summary For personal use only Holding Year ended 30 June (A$m) 2010 2009 % % Share of profit/(loss) of associates: Gresham Private Equity Funds Various 43 (57) n.m. Gresham Partners 50 1 1 - Wespine 50 6 4 50.0 Bunnings Warehouse Property Trust 23 27 (8) n.m. Sub-total
Slide 29: Capital Management
For personal use only Capital Management
Slide 30: Working capital management
29 Working capital management For personal use only • Retail strategies continue to deliver improvements – Significant working capital released from acquired Coles Group assets since acquisition – Further improvements in operating cycle expected, albeit at a slower rate • Industrial businesses benef
Slide 31: Investment expenditure
30 Investment expenditure • Strong return on capital focus For personal use only Year ended 30 June (A$m) 2010 2009 % Coles 719 567 26.8 • Continued investment to drive Home Improvement & Office Supplies 445 377 18.0 future growth Target 88 92 (4.3) – Retail: store roll outs & refurbishments, signif
Slide 32: Debt financing
31 Debt financing For personal use only • Gross debt of A$5.4 billion, net debt of A$4.0 billion • Pro-active diversification & lengthening of Group‟s debt profile – Repaid A$2.2 billion of debt obligations during the year, including reduction in FY12 & FY13 syndicated debt obligations of A$1.3 bill
Slide 33: Debt maturity profile
32 Debt maturity profile For personal use only A$m 2,000 • Cash at bank & on deposit used to fund: 1,500 – Dividends 1,000 – Seasonal working capital 500 – Short-term debt maturities – Organic growth (capex) 0 Current FY11 FY12 FY13 FY14 FY15 FY16 • Total liquidity at 30 June (500) A$2.6 billion con
Slide 34: Balance sheet & dividend
33 Balance sheet & dividend • Strong balance sheet For personal use only – Net debt to equity of 16.3% at 30 June 2010 – Cash interest cover of 6.8 times – Net debt to operating cash flows of 1.2 times • Standard & Poor‟s credit rating BBB+ (positive), Moody‟s Baa1 (stable) • Final dividend A$0.70 p
Slide 35: Outlook
For personal use only Outlook
Slide 36: Outlook
35 Outlook For personal use only • Wesfarmers is well placed to benefit from any further upturn in the Australian economy • The Group is cognisant of the fragility of global markets & domestic consumer confidence • Optimistic about the Group‟s retail businesses – Particularly the opportunity to extr
Slide 37: For all the latest news visit www.wesfarmers.com.au
For personal use only For all the latest news visit www.wesfarmers.com.au
Slide 38: Investment Conference Discussion Pack
For personal use only Investment Conference Discussion Pack JPMorgan Investor Conference New York & Edinburgh September 2010
Slide 39: Disclaimer
2 Disclaimer This presentation has been prepared by Wesfarmers Limited. The information contained in this presentation is for For personal use only information purposes only and does not constitute an offer to issue or arrange to issue, securities or other financial products, nor is it intended to c
Slide 40: Index
3 Index For personal use only 1 Philosophy, Performance & Direction 4 2 Group Overview 9 3 2010 Full Year Results 13 4 Operating Divisions 26 5 Capital Management 57 6 Outlook 63 7 Sustainability 65 8 Investor Relations Contacts & Information 71
Slide 41: Philosophy, Performance & Direction
For personal use only Philosophy, Performance & Direction
Slide 42: Long-term consistent strategies
5 Long-term consistent strategies For personal use only MANAGING BALANCE SHEET EFFECTIVELY
Slide 43: Recent evolution of Wesfarmers
6 Recent evolution of Wesfarmers Acquisition Events | Divestment Events | Growth Events FY07 August 2007: Australian Vinyls; $142m For personal use only Completion of Curragh North conveyor & coal handling Wesfarmers TSR index $360m All Ords Accumulation Index (rebased) September 2006 LNG expansion
Slide 44: Portfolio of leading brands
7 Portfolio of leading brands Retail Businesses Industrial Businesses For personal use only Insurance
Slide 45: Strong long-term performance
8 Strong long-term performance EPS WES For personal use only (cents per share) Share Price ($A) 300 48 250 40 200 32 150 24 100 16 50 8 0 0 00 01 02 03 04 05 06 07 08 09 10 EPS (AGAAP) Girrah EPS Landmark EPS EPS (AIFRS) ARG EPS Wesfarmers Share Price Sep-00 Sep-01 Sep-02 Sep-03 Sep-04 Sep-05 Sep-06
Slide 46: Group Overview
For personal use only Group Overview
Slide 47: Financial summary
10 Financial summary Year ended 30 June FY10 FY09 % Change For personal use only Operating Results Revenue A$m 51,827 50,982 1.7 1 EBITDA A$m 3,786 3,803 0.4 1 Earnings before interest and tax A$m 2,869 2,947 2.6 Net profit after tax (pre significant items)1 A$m 1,702 1,628 4.5 1 Net profit after ta
Slide 48: Divisional summary
11 Divisional summary For personal use only FY10 FY10 FY10 Activities Revenue EBIT EBIT (A$m) (A$m) Contribution1 The division comprises one of Australia's largest Coles supermarket businesses, liquor retailing outlets, fuel 30,002 962 32% & convenience outlets. Australia & New Zealand's leading sup
Slide 49: Divisional summary (cont.)
12 Divisional summary (cont.) FY10 FY10 FY10 Activities Revenue EBIT EBIT For personal use only (A$m) (A$m) Contribution1 Mining of metallurgical & steaming coal to domestic Resources 1,416 165 6% & export markets. Provider of underwriting, broking, premium funding Insurance & financial services act
Slide 50: 2010 Full-Year Results
For personal use only 2010 Full-Year Results
Slide 51: 2010 Full-Year Results
14 2010 Full-Year Results Group Performance Highlights Year ended 30 June (A$m) 2010 2009 % For personal use only • Group EBIT result of A$2.9bn Revenue 1 51,827 50,982 1.7 EBITDA 3,786 3,803 (0.4) – Solid performance, despite tough trading conditions in EBIT 1 2,869 2,947 (2.6) the second half Net
Slide 52: 2010 Full-Year Results: Divisional Performance Overview
15 2010 Full-Year Results Year ended 30 June (A$m) 2010 2009 % Divisional Performance Overview For personal use only Coles 962 831 15.8 • Coles achieved encouraging earnings growth; Home Improvement 728 659 10.5 turnaround continues to meet Wesfarmers‟ Office Supplies 74 65 13.8 expectations Target
Slide 53: Coles – 2010 Full-Year Performance
Coles 16 Coles – 2010 Full-Year Performance Highlights Financial Performance For personal use only Food Year ended 30 June ($m) 2010 2009 % • Food & Liquor comp sales growth of 5.0%3, 5.6%3 total Revenue 30,002 28,799 4.2 store sales growth EBIT 962 831 15.8 • Enhanced customer value & customer trus
Slide 54: Home Improvement & Office Supplies – 2010 Full Year Performance
Home Improvement & Home Improvement & Office Supplies - Office Supplies 17 2010 Full Year Performance Highlights Financial Performance – Home Improvement For personal use only Home Improvement Year ended 30 June ($m) 2010 2009 % • Trading revenue growth of 10.4% Revenue 6,413 5,845 9.7 – 10.3% cash
Slide 55: Target – 2010 Full-Year Performance
Target 18 Target – 2010 Full-Year Performance Highlights Financial Performance For personal use only • Solid profitability in a challenging trading period Year ended 30 June (A$m) 2010 2009 % • Sales assisted by a positive customer response to Revenue 3,825 3,788 1.0 improvements in ladieswear & bab
Slide 56: Kmart – 2010 Full-Year Performance
Kmart 19 Kmart – 2010 Full-Year Performance Highlights Financial Performance For personal use only • Customers responding well to lowest prices & better in- Year ended 30 June (A$m) 2010 2009 % store environment – Comp sales growth of 1.9% for 2H10* Revenue 4,019 3,998 0.5 – Growth in sales supporte
Slide 57: Resources – 2010 Full Year Performance
Resources 20 Resources – 2010 Full Year Performance Highlights Financial Performance For personal use only • $286 million Curragh expansion to 8.0 - 8.5mtpa export Year ended 30 June (A$m) 2010 2009 % metallurgical capacity underway; completion late CY11 Revenue1 1,416 2,411 (41.3) • Blackwater Cree
Slide 58: Insurance – 2010 Full-Year Performance
Insurance 21 Insurance – 2010 Full-Year Performance Highlights Financial Performance For personal use only • Strong turnaround in underwriting profitability Year ended 30 June (A$m) 2010 20092 % – Benefits of portfolio remediation & improvements in Gross Written Premium Underwritten 1,347 1,358 (0.8
Slide 59: Chemicals, Energy & Fertilisers – 2010 Full-Year Performance
Chemicals, Energy & Fertilisers – 2010 Chemicals, Energy & Fertilisers 22 Full-Year Performance Highlights Financial Performance – Chems. & Ferts. For personal use only Chemicals & Fertilisers Year ended 30 June ($m) 2010 2009 % • Production & demand for ammonia, ammonium nitrate (AN) & Revenue Chem
Slide 60: Industrial & Safety – 2010 Full-Year Performance
Industrial & Safety – 2010 Full-Year Industrial & Safety 23 Performance Highlights Financial Performance For personal use only • Solid result in challenging economic environment Year ended 30 June (A$m) 2010 2009 % – Recovery in second half: 11% sales growth; EBIT up 30% on last year Revenue 1,311 1
Slide 61: Other Businesses – 2010 Full Year Performance
24 Other Businesses – 2010 Full Year Performance For personal use only Holding Year ended 30 June (A$m) 2010 2009 % % Share of profit/(loss) of associates: Gresham Private Equity Funds Various 43 (57) n.m. Gresham Partners 50 1 1 - Wespine 50 6 4 50.0 Bunnings Warehouse Property Trust 23 27 (8) n.m.
Slide 62: Non-trading & significant items
25 Non-trading & significant items For personal use only 2010 2010 (A$m) Segment Comment Pre-tax Post-tax Coles (property) (21) (17) Other Property impairments & surplus lease provision Kmart (33) (23) Other Supply chain restructuring WES CEF1 (5) (4) Other Restructuring costs Coregas (53) (52) Othe
Slide 63: Operating Divisions
For personal use only Operating Divisions
Slide 64: Coles
Wena iwone SKK AK SX MXM AMG USUSUSUSUS SIS P Coles (| (LIQUORLAND WHY PAY MORE! HO CE VintAGE CELLARS LIQUOR esas SUPERSTORE
Slide 65: Coles highlights - strategy on track
Coles 28 Coles highlights - strategy on track Building a Solid Delivering Driving the Coles use only Foundation Consistently Well Difference For personalPerformance • Create a strong top team • Embed the new culture • Culture of continuous improvement • Cultural change • Team member development • St
Slide 66: Coles performance
Coles 29 Coles performance Food & Liquor Comparative Store Sales Growth EBIT ROC % A$m % For personal use only 8.0 1,200 12 7.0 1,000 10 6.0 800 8 5.0 600 6 4.0 400 4 3.0 2.0 200 2 1.0 0 0 2006 2007 2008* 2009 2010 0.0 EBIT Return on Capital (R12) Q308 Q408 Q109 Q209 Q309 Q409 Q110 Q210 Q310 Q410 *
Slide 67: Coles network
Coles network Coles 30 As at 30 June 2010 For personal use only Selling Area 7 8 11 Supermarkets (sqm) 1,586,494 Liquor (sqm) – ex 181,011 hotels 148 218 79 81 95 6 112 67 55 30 6 43 245 251 5 208 163 192 164 742 Supermarkets 14 15 766 Liquor stores 96 Hotels 619 Convenience
Slide 68: Home Improvement & Office Supplies
For personal use only Home Improvement & Office Supplies
Slide 69: Home Improvement Performance
Home Improvement & 32 Office Supplies Home Improvement Performance Growth Strategies EBIT ROC For personal use only Home Improvement Strategies Details A$m % Profitable sales growth Strengthening customer service 800 40 Improving the offer Investing in & expanding the network 700 35 Better stock flo
Slide 70: Office Supplies Performance
Home Improvement & 33 Office Supplies Office Supplies Performance Growth Strategies For personal use only Office Supplies Strategies Details EBIT ROC Improve the customer offer Enhance & expand the product range A$m % Help customers to be more environmentally conscious 80 8 Rollout more new products
Slide 71: Bunnings network
Bunnings network Home Improvement & Office Supplies 34 As at 30 June 2010 For personal use only 184 Warehouse stores 58 Smaller format stores 2 29 Trade Centres 30 5 8 23 7 3 9 3 2 56 16 6 13 26 1 45 8 4 2 1 1
Slide 72: Officeworks & Harris Tech. network
Officeworks & Harris Tech. network Home Improvement & Office Supplies 35 As at 30 June 2010 Retail Stores For personal use only 128 Officeworks 5 Harris Technology 25 1 1 Business 11 1 1 4 Fulfilment Centres 8 3 Service Centres 43 2 1 1 Print Hub 2 1 39 1 1 1 2
Slide 73: Target
ENO ON. USUSUNUS Target Olareet. TO, OU NOLO SX OX OOD OKANO \ mi KOK ¢ ‘» OA MU NUE NUS Wesfarmers
Slide 74: Target Performance
Target 37 Target Performance EBIT ROC For personal use only Growth Strategies A$m % Target Strategies Details 500 20 Profitable sales growth Continued investment in the store portfolio with new stores & refurbishments Continue to grow clothing & homewares in good, better, 400 16 best product ranges
Slide 75: Target network
Target network Target 38 As at 30 June 2010 For personal use only 3 58 31 26 98 69 290 Target stores (incl 119 Target Country) 5
Slide 76: Kmart
For personal use only Kmart Kmart Guy Russo
Slide 77: Kmart strategy
Kmart 40 Kmart strategy EBIT ROC For personal use only Growth Strategies A$m % Kmart Strategies Details 250 25 Customer - outstanding experience All about the Kmart customers; Fast & friendly service; Clean & tidy stores; Lowest price; More convenient shopping hours; Community engagement 200 20 Prod
Slide 78: Kmart network
Kmart network Kmart 41 As at 30 June 2010 For personal use only 186 Kmart stores 251 KTAS centres 2 3 36 52 21 28 13 19 51 70 12 43 73 5 6 3
Slide 79: Resources
For personal use only Resources
Slide 80: Resources - Performance
Resources 43 Resources - Performance EBIT Growth Strategies ROC For personal use only A$m % Resources Strategies Details Curragh expansion tonnage contracts in place 1,000 100 Maximise export sales & optimise sales mix Price relativity improved 900 90 Maximise higher value products 800 80 Winner of
Slide 81: Resources - Sales
Resources 44 Resources - Sales Coal Sales Volumes by Mine (FY10) Australian Hard Coking Coal Prices For personal use only Mine Australian hard coking coal prices Steaming Metallurgical Total US$/Tonne (Nominal) FOB Australia (annual verse spot ) (mtpa) 400 Curragh, QLD^ 2.5 6.6 9.1 300 Premier, WA 2
Slide 82: Current hedging profile
Resources 45 Current hedging profile For personal use only Curragh Bengalla Current US$ Average Current US$ Average Year end Year end sold forward A$ / US$ sold forward A$ / US$ 30 Jun 30 Jun (US$m) hedge rate (US$m) hedge rate 2011 716 0.83 2011 118 0.82 2012 522 0.83 2012 70 0.80 2013 383 0.80 201
Slide 83: Resources - Locations
Resources 46 Resources - Locations For personal use only Coal Premier Coal Curragh Bengalla (40%)
Slide 84: Insurance
For personal use only Insurance
Slide 85: Insurance - Performance
Insurance 48 Insurance - Performance EBITA (A$m) ROC (%) For personal use only 160 40 Growth Strategies Insurance Strategies Details Performance improvement Strong focus on underwriting & claims disciplines & business process enhancement 120 30 Focus on customer needs Work with new & existing busine
Slide 86: Geographical presence
Geographical presence Insurance 49 As at 30 June 2010 For personal use only 3 1 UK 4 3 14 5 19 1 2 1 1 4 13 6 22 11 6 19 6 Lumley Insurance (Australia) 12 1 Lumley General New Zealand 10 6 WFI 90 3 4 1 OAMPS 1 30 2 Crombie Lockwood 17 1 OAMPS New Caledonia location not shown
Slide 87: Chemicals, Energy & Fertilisers
For personal use only Chemicals, Energy & Fertilisers
Slide 88: Chemicals, Energy & Fertilisers Performance
Chemicals, Energy & Fertilisers Chemicals, Energy & Fertilisers 51 Performance Growth Strategies WESCEF Strategies Details For personal use only Improve offers Ongoing development of product & sevice differentiation Improve competitiveness Optimisation of cost base & operating efficiencies Ammonium
Slide 89: Chemicals, Energy & Fertilisers Locations
Chemicals, Energy Chemicals, Energy & Fertilisers & Fertilisers 52 Locations For personal use only 16 CSBP fertilisers 6 CSBP chemicals 1 2 Australian Vinyls 2 1 4 4 QNP (50%) 8 ALWA 16 19 3 AGR (75%) 7 3 5 1 20 enGen 16 6 11 46 Kleenheat 9 2 2
Slide 90: Industrial & Safety
For personal use only Industrial & Safety
Slide 91: Industrial & Safety Performance
Industrial & Safety Industrial & Safety 54 Performance Growth Strategies For personal use only EBIT ROC Industrial & Safety Strategies Details A$m % Increase share of customers' products Strong delivery performance & customer service 140 21 & services spend Broadening product range Strengthening val
Slide 92: Industrial & Safety distribution network
Industrial & Safety 55 Distribution network 243 industrial & safety locations & 128 gas distribution points For personal use only Australia No. 2 4 16 12 73 “All your workplace needs” industrial (1) 1 7 9 18 9 1 45 Safety 3 1 6 4 36 23 Materials handling, lifting & rigging 1 5 4 4 18 Fasteners 2 17
Slide 93: Other Businesses
56 Other Businesses For personal use only Gresham: 50% interest in Gresham Partners, an independent Year ended 30 June (A$m): 2010 2009 investment bank focused on financial advisory services, private equity investment and property investment funds. Share of associates profit/(loss): Wesfarmers also
Slide 94: Capital Management
For personal use only Capital Management
Slide 95: Working capital management
58 Working capital management For personal use only • Retail strategies continue to deliver improvements – Significant working capital released from acquired Coles Group assets since acquisition – Further improvements in operating cycle expected, albeit at a slower rate • Industrial businesses benef
Slide 96: Investment expenditure
59 Investment expenditure • Strong return on capital focus For personal use only Year ended 30 June (A$m) 2010 2009 % Coles 719 567 26.8 • Continued investment to drive future growth Home Improvement & Office Supplies 445 377 18.0 Target 88 92 (4.3) – Retail: store roll outs & refurbishments, signif
Slide 97: Debt financing
60 Debt financing For personal use only • Gross debt of A$5.4 billion, net debt of A$4.0 billion • Pro-active diversification & lengthening of Group‟s debt profile – Repaid A$2.2 billion of debt obligations during the year, including reduction in FY12 & FY13 syndicated debt obligations of A$1.3 bill
Slide 98: Debt maturity profile
61 Debt maturity profile For personal use only A$m 2,000 • Cash at bank & on deposit used to fund: 1,500 – Dividends 1,000 – Seasonal working capital 500 – Short-term debt maturities – Organic growth (capex) 0 Current FY11 FY12 FY13 FY14 FY15 FY16 • Total liquidity at 30 June (500) A$2.6 billion con
Slide 99: Balance sheet & dividend
62 Balance sheet & dividend • Strong balance sheet For personal use only – Net debt to equity of 16.3% at 30 June 2010 – Cash interest cover of 6.8 times – Net debt to operating cash flows of 1.2 times • Standard & Poor‟s credit rating BBB+ (positive), Moody‟s Baa1 (stable) • Final dividend A$0.70 p
Slide 100: Outlook
For personal use only Outlook
Slide 101: Outlook
64 Outlook For personal use only • Wesfarmers is well placed to benefit from any further upturn in the Australian economy • The Group is cognisant of the fragility of global markets & domestic consumer confidence • Optimistic about the Group‟s retail businesses – Particularly the opportunity to extr
Slide 102: Sustainability
For personal use only Sustainability
Slide 103: Sustainability priorities
66 Sustainability Sustainability priorities For personal use only When it became a public company in 1984, Wesfarmers adopted the objective of delivering Wesfarmers is again satisfactory returns for its shareholders. Over the past 25 years, the responsibilities of business – particularly large compa
Slide 104: Sustainability: People
67 Sustainability 1. People For personal use only Wesfarmers is one of Australia‟s largest private sector employers, employing about 200,000 employees, largely in Australia and New Zealand. We recognise that our employees are crucial to our success and as such we focus on continuously improving our
Slide 105: Sustainability: Carbon and energy management
68 Sustainability 2. Carbon and energy management For personal use only As the world confronts an increasingly carbon constrained future, reducing the company‟s carbon footprint and enhancing our energy efficiency is both a commercial priority and an environmental imperative. Wesfarmers is vigorousl
Slide 106: Sustainability: Community investment
69 Sustainability 3. Community investment For personal use only From its earliest days, Wesfarmers has been close to the communities in which it operates and on whose support it depends. The company recognises and invests in areas of community endeavour which it believes are necessary to contribute
Slide 107: Sustainability: Environmental footprint
70 Sustainability 4. Environmental footprint For personal use only Wesfarmers‟ business operations have both direct and indirect environmental impacts, including water usage, packaging, emissions to air, solid and liquid waste, and land rehabilitation. Planning and management of these issues is dire
Slide 108: Investor Relations Contact
71 Investor Relations Contact For personal use only Alex Willcocks Mgr Investor Relations & Planning Wesfarmers Limited 40 The Esplanade, Perth WA 6000 T: + 61 8 9327 4323 E: awillcocks@wesfarmers.com.au W: www.wesfarmers.com.au For further information on Wesfarmers including: Annual reports; financ
Slide 109: For all the latest news visit www.wesfarmers.com.au
For personal use only For all the latest news visit www.wesfarmers.com.au
Wesfarmers — JPMorgan Investor Conference, Edinburgh and New York 2010 on 6ix