Woolworths Holdings Limited · JSE:WHL
Woolworths — Investor Presentation (November 2010)
7 slides from Woolworths's investor presentation, November 2010
Slide 1: Woolworths Holdings Limited Franchise strategy
Woolworths Holdings Limited Franchise strategy November 2010
Slide 2: Overview of SA franchise
Overview of SA franchise • The situation as at 30 June 2010: • 37 franchisees with 76 stores, 18% of total stores • Trading space: 16% of clothing and general merchandise 6% of food • 2 135 employees, 10% of total employees • Financial contribution: • Represents 7% of turnover • Ongoing decline in n
Slide 3: Rationale to stop franchise
Rationale to stop franchise • Duplicate systems result in increased costs and decreased efficiency • Delays and inconsistencies in strategy implementation • Territorial rights limit our growth and profitability • We can improve shareholder value by increasing sales and increasing margin
Slide 4: New strategy
New strategy • Exit franchise in South Africa and operate corporate stores: • no new franchise stores • will not renew contracts at the end of term • offer to buy stores at fair value (voluntary)
Slide 5: The new strategy will be better for..
The new strategy will be better for.. • Shareholders: • Earnings enhancing and add shareholder value • Customers: • Consistent experience and strategy execution • Suppliers: • Simpler processes • People: • Continuous employment and part of corporate • Franchisees: • Voluntary offer, in no worse off
Slide 6: Offer to purchase
Offer to purchase • The offer is voluntary • Offer is 4.5 times weighted net operating profit after taxation for the last three years: • provides a fair deal for franchisees - value as going concern • provides a reasonable return for WW – enhances earnings • R1m underpin for loss making stores • Ind
Slide 7: Current status
Current status • Guidelines for offer issued on 21 September 2010 • Sales agreements signed for 17 stores (24%) representing 21% of turnover • Negotiations underway for another 20 stores (27%) representing 29% of turnover • A majority of franchisees should sell before the offer expires on 24 June
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