Woolworths Group Ltd · ASX:WOW
Woolworths — FY2021 Earnings Presentation
54 slides from Woolworths's earnings presentation, Aug 26, 2021
Slide 1: Full Year Results Presentation
26 August 2021 For personal use only ASX Market Announcements Office Australian Securities Exchange 20 Bridge Street Sydney NSW 2000 Full Year Results Presentation Attached for release to the market is the Full Year Results Presentation for the period ended 27 June 2021. Authorised by: Michelle Hall
Slide 2: Company Results Full Year 2021
For personal use only together Live better C O M PA N Y R E S U LT S F U L L Y E A R 2 0 2 1
Slide 3: Woolworths Group purpose
Woolworths Group purpose COMPANY RESULTS FULL YEAR 2021 2 For personal use only What we mean by ‘we’ What we mean by ‘create’ What we mean by ‘experiences’ Our team and our partners We constantly innovate to The moments we create in store and make a positive impact on online for customers, communiti
Slide 4: Contents
Contents For personal use only F21 GROUP SUMMARY & PROGRESS 4 Brad Banducci GROUP FINANCIAL RESULTS 13 Stephen Harrison BUSINESS PERFORMANCE UPDATE 27 CURRENT TRADING & OUTLOOK 47 Brad Banducci
Slide 5: Committed to operating COVIDSafe and showing COVIDCare
Committed to operating COVIDSafe and showing COVIDCare COMPANY RESULTS FULL YEAR 2021 4 For personal use only Established pop-up vaccination clinics at key food-related DCs in NSW and Victoria with assistance from Federal and State governments Provided up to eight hours of paid leave for full-time a
Slide 6: F21 summary
F21 summary COMPANY RESULTS FULL YEAR 2021 5 For personal use only Focused on being COVIDSafe and showing COVIDCare to team Completed Endeavour Group demerger and laid the foundations for the new era of Woolworths Group Strong F21 trading performance with Group EBIT up 13.7%; continuing operations u
Slide 7: Working together to create a better tomorrow
Working together to create a better tomorrow COMPANY RESULTS FULL YEAR 2021 6 For personal use only People Planet Product Have a positive impact on Make a positive change to the future of our Ensure we leave the environment people and the planet through the people, our partners and our communities b
Slide 8: Progress against key priorities (i)
Progress against key priorities (i) COMPANY RESULTS FULL YEAR 2021 7 For personal use only 1 2 3 Better Together for a Better Accelerate Digital, eCom and Differentiate our Food Tomorrow for our Customers, Convenience for our increasingly Customer Propositions Teams and Communities Connected Custome
Slide 9: Progress against key priorities (ii)
Progress against key priorities (ii) COMPANY RESULTS FULL YEAR 2021 8 For personal use only 4 5 6 Stand up Evolve our Portfolio and Build Keep our Business COVIDSafe and Endeavour Group Strong Adjacencies Futureproof our E2E Operating Model • Separation work formally recommenced in • Material EBIT i
Slide 10: Woolworths Group's retail ecosystem
Woolworths Group’s retail ecosystem COMPANY RESULTS FULL YEAR 2021 9 For personal use only 1 2 B2C Food B2B Food Our cornerstone retail food Expanding food businesses, famous for good into new customer food, prices and acts and segments, channels always convenient and markets 4 3 Platforms & Partner
Slide 11: Growing our retail ecosystem
Growing our retail ecosystem COMPANY RESULTS FULL YEAR 2021 10 For personal use only B2C Food B2B Food More Everyday Retail Platforms Adapting store and product portfolio Organising around businesses to serve Partnering to grow our Everyday needs Setting up platforms with a focus on digital proposit
Slide 12: F22 Group priorities
F22 Group priorities COMPANY RESULTS FULL YEAR 2021 11 For personal use only Leading in creating a Extending into new Reimagining today’s better tomorrow; growth adjacencies and fresh food people - our differentiating on markets stores, our services and sustainability our team support Activate Every
Slide 13: Contents
Contents For personal use only F21 GROUP SUMMARY & PROGRESS 4 Brad Banducci GROUP FINANCIAL RESULTS 13 Stephen Harrison Group financial results Key balance sheet metrics Capital management framework Cash flow summary Capital expenditure Capital management Primary Connect transformation BUSINESS PERF
Slide 14: Financial Results and Capital Management
Financial Results and For personal use only Capital Management
Slide 15: F21 Group results summary
F21 Group results summary COMPANY RESULTS FULL YEAR 2021 14 For personal use only $ MILLION F21 F20 CHANGE Group before significant items Sales 67,278 63,675 5.7% EBIT 3,663 3,219 13.7% NPAT 1,972 1,602 22.9% Continuing operations before significant items Sales 55,694 53,080 4.9% EBIT 2,764 2,485 11
Slide 16: H2 F21 sales growth impacted by the cycling of COVID
H2 F21 sales growth impacted by the cycling of COVID COMPANY RESULTS FULL YEAR 2021 15 For personal use only Australian Food comparable sales New Zealand Food comparable sales Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 16% 16% 13.4% 13.9% 11.5% 10.3% 6.6% 8.9% 10% 10% 7.1% 3.8% 5.8% 4.9% 4.5% Growth Growth 0.8% 4% 4%
Slide 17: F21 Group EBIT up 13.7% and H2 Group EBIT up 18.3%
F21 Group EBIT up 13.7% and H2 Group EBIT up 18.3% COMPANY RESULTS FULL YEAR 2021 16 For personal use only Group sales and EBIT F21 H2 F21 $ MILLION SALES CHANGE EBIT CHANGE SALES CHANGE EBIT CHANGE Australian Food 44,441 5.4% 2,432 9.0% 20,992 0.2% 1,103 4.5% New Zealand Food 6,652 (2.5)% 336 (6.4)
Slide 18: Demerger accounting implications
Demerger accounting implications COMPANY RESULTS FULL YEAR 2021 17 For personal use only • The assets and liabilities of Endeavour Group are classified separately as held for distribution as at 27 June 2021 and Endeavour Group is recognised as a discontinued operation following shareholder approval
Slide 19: Inventory days and ROFE improvement in F21
Inventory days and ROFE improvement in F21 COMPANY RESULTS FULL YEAR 2021 18 For personal use only Average inventory days Normalised ROFE Days Percentage Continuing operations Continuing operations Group Group 16.8 40.0 39.0 39.5 15.8 37.6 37.2 37.0 15.1 36.0 36.2 13.7 31.5 31.0 F17 F18 F19 F20 F21
Slide 20: Capital management framework
Capital management framework COMPANY RESULTS FULL YEAR 2021 19 For personal use only One of Australia’s Leading market position Defensive Growth opportunities in Strong cash flow from leading and most in Food & Everyday characteristics through eCom & adjacencies AUS and NZ businesses Investment prop
Slide 21: Cash flow from operations financing higher investment and dividends
Cash flow from operations financing higher investment and COMPANY RESULTS FULL YEAR 2021 20 dividends For personal use only F21 F20 $ MILLION (52 WEEKS) (52 WEEKS) CHANGE EBITDA – continuing operations 4,843 4,453 8.7% Group EBITDA growth of 24.4% driven by underlying trading improvement in continui
Slide 22: Operating capex of $2b in F21
Operating capex of $2b in F21 COMPANY RESULTS FULL YEAR 2021 21 For personal use only Operating capex $ MILLION F21 F20 Sustaining capex 1,385 1,104 Growth capex 653 540 F22 operating capex Operating capex 2,038 1,644 expected to be ~$2b, Property development 389 499 driven by investment in Acquisit
Slide 23: Dividends and shareholder returns
Dividends and shareholder returns COMPANY RESULTS FULL YEAR 2021 22 For personal use only 108 cps full year dividend $2.7b to be returned to shareholders1 ($m) Dividends (cents per share) Shareholder distributions paid during the year ($m) 3,082 102 108 2,697 10 Final dividend intended to put 94 sha
Slide 24: Capital management: off-market Buy-Back
Capital management: off-market Buy-Back COMPANY RESULTS FULL YEAR 2021 23 For personal use only Launching a $2b off-market Buy-Back Important dates • Target size: $2b 26 Aug Announcement of the Buy-Back 10 • The Buy-Back will be conducted through a tender process Last day that Shares can be acquired
Slide 25: Funding
Funding COMPANY RESULTS FULL YEAR 2021 24 For personal use only Debt maturity profile ($m) Mix by interest type2 Committed to solid investment-grade 1,500 credit ratings 1,250 14% 1,000 S&P: BBB (stable outlook)3 Moody’s: Baa2 (stable outlook)3 750 Credit metrics have significant 500 headroom above
Slide 26: Primary Connect transformation
Primary Connect transformation COMPANY RESULTS FULL YEAR 2021 25 For personal use only Now operational Melbourne South Regional DC Melbourne Fresh DC Adelaide Regional DC Averaging 2.1m cartons per week in Q4’21 35,000 sqm Fresh DC Expanded to 94,000 sqm Further increase in volumes expected in F22 O
Slide 27: Contents
Contents For personal use only F21 GROUP SUMMARY & PROGRESS 4 Brad Banducci GROUP FINANCIAL RESULTS 13 Stephen Harrison BUSINESS PERFORMANCE UPDATE 27 OUTLOOK 47 Brad Banducci
Slide 28: Business performance update
e Woolworths The fresh food ns @ For
Slide 29: Australian Food
Australian Food COMPANY RESULTS FULL YEAR 2021 28 For personal use only F21 F20 CHANGE F21 FINANCIAL METRICS Sales ($m) 44,441 42,151 5.4% EBITDA ($m) 4,006 3,707 8.1% EBIT ($m) 2,432 2,232 9.0% Gross margin (%) 29.4 29.2 21 bps CODB (%) 24.0 23.9 3 bps EBIT to sales (%) 5.5 5.3 18 bps Sales per squ
Slide 30: Progress against F21 priorities
Progress against F21 priorities COMPANY RESULTS FULL YEAR 2021 29 For personal use only GIVING BACK TO THE COMMUNITY REWARDS ENGAGEMENT ACCELERATED ECOM Better customer 13.1m 2m 75% 629 Quiet hour rolled out to 840 stores and team experience Over $8m raised, and over 10,000t of edible for a better t
Slide 31: Format and Network Development highlights
Format and Network Development highlights COMPANY RESULTS FULL YEAR 2021 30 For personal use only Expanded Pick up with 379 (net) new Direct to boot enabled stores, bringing the total to 629 Opened 23 (net) new stores and completed 65 Renewals in F21 across Woolworths Supermarkets and Metro Food Sto
Slide 32: WooliesX F21 highlights
WooliesX F21 highlights COMPANY RESULTS FULL YEAR 2021 31 Digital Digital &&Media Media eCom eCom& & Fulfilment Fulfilment Loyalty Loyalty& & FinTech FinTech For personal use only Front door to Woolies Easy shopping when & where you want it Seamless experiences to enjoy a little more, every day 12.1
Slide 33: Australian Food F22 priorities
Australian Food F22 priorities COMPANY RESULTS FULL YEAR 2021 32 For personal use only Bring a little good to everyone, everyday Transform our core proposition for changed customer needs Team A better sustainable Today’s Fresh Food Everyday and personalised Tailored Transforming advocacy tomorrow Pe
Slide 34: Company Results Full Year 2020
COMPANY RESULTS FULL YEAR 2020 33 For personal use only
Slide 35: New Zealand Food
New Zealand Food COMPANY RESULTS FULL YEAR 2021 34 For personal use only $NZD F21 F20 CHANGE F21 FINANCIAL METRICS Sales ($m) 7,146 7,192 (0.6)% EBITDA ($m) 633 634 (0.2)% EBIT ($m) 361 378 (4.6)% Gross margin (%) 25.3 25.0 24 bps CODB (%) 20.2 19.8 45 bps EBIT to sales (%) 5.0 5.3 (21) bps Sales pe
Slide 36: New Zealand Food F21 highlights
New Zealand Food F21 highlights COMPANY RESULTS FULL YEAR 2021 35 For personal use only Better Everyday For a Digital, eCom and Core Customer Value Foundations for Better Tomorrow Innovation Proposition the Future 30.2% 12.0% >4,000 products on Great Price New Palmerston North regional Ongoing COVID
Slide 37: New Zealand Food F22 priorities
New Zealand Food F22 priorities COMPANY RESULTS FULL YEAR 2021 36 For personal use only Better everyday for a Digital, eCom and Strengthen & transform our Strong foundations better tomorrow innovation core customer proposition Scale Scaling our Care for Focus on ultra-convenient simpler our team Fre
Slide 38: For personal use only
COMPANY RESULTS FULL YEAR 2021 37 For personal use only
Slide 39: BIG W
BIG W COMPANY RESULTS FULL YEAR 2021 38 For personal use only F21 F20 CHANGE F21 FINANCIAL METRICS Sales ($m) 4,583 4,106 11.6% EBITDA ($m) 348 207 67.6% EBIT ($m) 172 39 344.9% Gross margin (%) 33.6 31.8 180 bps CODB (%) 29.9 30.9 (100) bps EBIT to sales (%) 3.7 0.9 280 bps Sales per square metre (
Slide 40: BIG W highlights
BIG W highlights COMPANY RESULTS FULL YEAR 2021 39 For personal use only Much to be proud of in F21 Simplified our offer to align with customer shopping missions - implemented range curation to make it easier to shop, and set up our data-led capabilities through the establishment of the Data, Analyt
Slide 41: BIG W F22 priorities
BIG W F22 priorities COMPANY RESULTS FULL YEAR 2021 40 For personal use only Four key strategic priorities in F22 Unlock best-in-class Turbocharging digital Lead on value and Continue to demonstrate availability by ensuring the experience by enabling destinations by continuing real care by truly liv
Slide 42: Endeavour Group
group ‘“~ endeavour nw > %
Slide 43: Endeavour Group
Endeavour Group COMPANY RESULTS FULL YEAR 2021 42 For personal use only $ MILLION F21 F20 CHANGE Endeavour Drinks Sales 10,167 9,275 9.6% EBITDA 960 826 16.3% EBIT 669 569 17.7% Hotels Sales 1,417 1,320 7.3% EBITDA 499 405 22.8% EBIT 261 172 51.7% Endeavour Group costs 31 7 n.m.
Slide 44: Dan Murphy's F21 highlights
Dan Murphy’s F21 highlights COMPANY RESULTS FULL YEAR 2021 43 For personal use only Surpassed 5m Over 250 stores Rolled out My Dan’s innovative new nationwide members store formats +10 net new stores including launching And 20% more in F21 active members Dan’s 2.0 than a year ago in South Melbourne
Slide 45: BWS F21 highlights
BWS F21 highlights COMPANY RESULTS FULL YEAR 2021 44 For personal use only Expanded network Enhanced in-store Lifted the bar on experience convenience 1,392 61 BWS stores were Launched 1 hour total stores renewed during delivery guarantee F21, creating a better (or free delivery next +23 net new sto
Slide 46: Hotels F21 highlights
Hotels F21 highlights COMPANY RESULTS FULL YEAR 2021 45 For personal use only Keeping our Enhanced existing Resilient trading customers and footprint despite COVID team safe Refurbished 26 venues Navigating changing Over 2,500 COVID including launching ‘gaming regulations and multiple inspection che
Slide 47: Contents
Contents For personal use only F21 GROUP SUMMARY & PROGRESS 5 Brad Banducci GROUP FINANCIAL RESULTS 13 Stephen Harrison BUSINESS PERFORMANCE UPDATE 27 CURRENT TRADING & OUTLOOK 47 Brad Banducci
Slide 48: Current trading and outlook
Current trading and outlook COMPANY RESULTS FULL YEAR 2021 47 For personal use only Strong sales growth in first eight weeks of F22 in Australian Food (+4.5%) BIG W sales impacted by restrictions; H1 EBIT expected to be materially below H1 F21 Group COVID costs increased to 0.5% of sales in first ei
Slide 49: COVID costs declined materially in H2 but increasing again in F22
COVID costs declined materially in H2 but increasing again in F22 COMPANY RESULTS FULL YEAR 2021 48 For personal use only H1 F21 Q3’21 Q4’21 H2 F21 Q1’22 $ MILLION (27 WEEKS) (13 WEEKS) (12 WEEKS) (25 WEEKS) (8 WEEKS) Cleaning and PPE 91 15 10 25 11 xx Contractors and security 13 3 4 7 1 Team costs1
Slide 50: Thank you
For personal use only Thank you
Slide 51: Glossary
Glossary COMPANY RESULTS FULL YEAR 2021 50 For personal use only AWEI Australian Workplace Equality Index Cash realisation ratio (CRR) Operating cash flow as a percentage of Group net profit after tax before depreciation and amortisation Comparable sales Measure of sales which excludes stores that h
Slide 52: Glossary cont.
Glossary cont. COMPANY RESULTS FULL YEAR 2021 51 For personal use only Net Promoter Score (NPS) A loyalty measure based on a single question where a customer rates a business on a scale of zero to 10. The score is the net result of the percentage of customers providing a score of nine or 10 (promote
Slide 53: Glossary cont.
Glossary cont. COMPANY RESULTS FULL YEAR 2021 52 For personal use only VOC NPS VOC NPS is based on feedback from Woolworths Rewards members. VOC NPS is the number of promoters (score of nine or 10) less the number of detractors (score of six or below) Voice of Supplier (VOS) A survey of a broad spec
Slide 54: Disclaimer
Disclaimer COMPANY RESULTS FULL YEAR 2021 53 For personal use only This presentation contains summary information about Woolworths Group Limited (Woolworths Group) and its activities current as at the date of this presentation. It is sourced from and should be read in conjunction with Woolworths’ ot