Wesfarmers Limited · ASX:WES
Wesfarmers — Citi Investor Conference, London, March 2011
124 slides from Wesfarmers's conference presentation, Mar 4, 2011
Slide 1: ASX cover letter: Citi and Goldman Sachs investment conferences
4 March 2011 For personal use only The Manager Company Announcements Office Australian Securities Exchange Dear Sir, CITI AND GOLDMAN SACHS INVESTMENT CONFERENCES LONDON, 7-8 MARCH 2011 AND NEW YORK, 10-11 MARCH 2011 Following is a presentation that is to be given at the Citi investment conference i
Slide 2: Philosophy, Performance & Direction
Philosophy, Performance & For personal use only Direction Terry Bowen, Finance Director Citi Investor Conference London March 2011
Slide 3: Disclaimer
2 Disclaimer For personal use only This presentation has been prepared by Wesfarmers Limited. The information contained in this presentation is for 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 p y Based on a Single g Focus Satisfactory returns to shareholders
Slide 5: Wesfarmers at a glance
4 Wesfarmers at a glance For personal use only • Commercially focused culture with primary objective of achieving satisfactory returns for shareholders • Focus F on four f core values: l integrity; i t it openness; accountability; t bilit & boldness b ld • Strength of diversified operations with str
Slide 6: The Wesfarmers Way
5 The Wesfarmers Way For personal use only OBJECTIVE Satisfactory return to shareholders VALUE CREATING STRATEGIES Strengthen existing Secure growth Ensure sustainability Renew the portfolio businesses through opportunities through through responsible through value-adding operating excellence and en
Slide 7: Portfolio of leading brands
6 Portfolio of leading brands Retail Businesses Industrial Businesses For personal use only Insurance
Slide 8: Strength of unique network coverage
7 Strength of unique network coverage For personal use only Big Box Retail Discount Dept. Stores 8 10 147 96 Consumer 2 24 4 Staples Retail 80 106 73 559 21 Industrial 58 37 46 250 22 Insurance* 22 131 15 218 83 *Wesfarmers Insurance operates out of four locations in the United Kingdom & 131 721 33
Slide 9: Management Team
8 Management Team For personal use only Managing Director Richard Goyder Finance Director Terry Bowen Food & Liquor q Retailing g Coles Ian McLeod Big Box Retailing Home Improvement John Gillam & Office Supplies Discount Department Target Launa Inman Store Retailing Kmart Guy Russo I Insurance I Ins
Slide 10: Group Results
For personal use only Group Results
Slide 11: Group financial highlights
10 Group financial highlights For personal use only • First half profit after tax of A$1,173 million, up 33.4% • Ope Operating a g revenue e e ue o of A$28,074 $ 8,0 million, o , up 5 5.8% 8% • Group EBIT result of A$1,917 million, up 23.9% – Growth in earnings across most divisions – Solid retail p
Slide 12: Group performance highlights
11 Group performance highlights For personal use only Retail • Coles’ Co es pe performance o a ce wasas p pleasing eas g with revenue e e ue up 5 5.9% 9% & EBIT up 18.3%; 8 3%; good progress continues to be made on the turnaround • Bunnings’ result was solid with operational improvements across its
Slide 13: Group performance highlights (cont.)
12 Group performance highlights (cont.) For personal use only Industrials • Resources esou ces ea earnings gs were e e ssignificantly g ca y up o on increased c eased coa coal p prices ces desp despite e higher than average rainfall affecting production & increasing mining costs • WES CEF & WIS reco
Slide 14: Group performance summary
13 Group performance summary For personal use only Half Year ended 31 December (A$m) 2010 2009 % Operating revenue 28 074 28,074 26 533 26,533 58 5.8 EBITDA 2,378 1,996 19.1 EBIT 1,917 1,547 23.9 Finance costs (272) (319) 14.7 Tax expense (472) (349) (35.2) Net profit after tax 1 173 1,173 879 33 4
Slide 15: Earnings per share (EPS)
14 Earnings per share (EPS) For personal use only • Return to EPS growth, following impact of equity raisings on 2008 & 2009 result • 33.3% growth in EPS reflects strong growth in earnings from Retail & Industrial businesses Au. cps A (WANOS) 150 120 90 60 125.1 98.1 103.6 101.7 76.3 30 0 1H FY07 1H
Slide 16: Diversified earnings
15 Diversified earnings For personal use only Divisional EBIT Percentage of Half Year ended (1H FY11, A$m) Divisional EBIT 2010 2009 % 31 December (A$m) 2,000 Insurance Insurance 3%; (1H10: 4%) Coles 575 486 18 3 18.3 WIS WES CEF Home Improvement 457 422 8.3 Industrial 24%; 18.5 Office Supplies 32 2
Slide 17: Continued focus on divisional ROC
16 Continued focus on divisional ROC For personal use only • ROC underpins long standing culture of financial discipline • Divisional s o a focus ocus o on g growth o in ROC OC through oug ea earnings gs g growth o & improvements po e e s in capital efficiency 2010 2009 Rolling 12 months to 31 D Dec
Slide 18: Operating Divisions
For personal use only Operating Divisions
Slide 19: Coles
Coles 18 2011 Half-year performance Highlights Financial Performance For personal use only Half-Year ended 31 December (A$m) 2010 2009 % • Food & Liquor 6.3%1 total sales growth & Coles Division Revenue 16,059 15,161 5.9 comp sales growth of 6 comp. 4%1 6.4% EBIT 575 486 18 3 18.3 ROC (R12 %) 7.1 5.
Slide 20: Home Improvement & Office Supplies
Home Improvement & Office Supplies 19 2011 Half-year performance Highlights Financial Performance – Home Improvement For personal use only • Trading revenue growth of 4.4% Half-Year ended 31 December (A$m) 2010 2009 % – 4.1% total store sales growth (store-on-store (store on store Revenue 3,572 3,40
Slide 21: Home Improvement & Office Supplies
Home Improvement & Office Supplies 20 2011 Half-year performance Highlights Financial Performance – Office Supplies For personal use only • Officeworks retail store sales growth of Half-Year ended 31 December (A$m) 2010 2009 % 5% 7.5% Revenue 3,572 3,402 5.0 Trading Revenue – Underpinned by strong t
Slide 22: Target
Target 21 2011 Half-year performance Highlights Financial Performance For personal use only • Sales results affected by a difficult retail Half-Year ended 31 December (A$m) 2010 2009 % environment Revenue 2,120 2 182 2,182 (2 8) (2.8) – Significant price deflation due to strong AUD EBIT 206 279 (26.
Slide 23: Kmart
Kmart 22 2011 Half-year performance Highlights Financial Performance For personal use only • Improved underlying profitability Half-Year ended 31 December (A$m) 2010 2009 % – 13.0% increase in profit to $174 million, driven Revenue 2,271 2,226 2.0 by gross margin improvement & cost control EBIT1,2 1
Slide 24: Insurance
Insurance 23 2011 Half-year performance Highlights Financial Performance For personal use only • Increased earnings across underwriting & Half-Year ended 31 December (A$m) 2010 2009 % broking g Gross Written Premium Underwritten 659 680 ((3.1)) • Revenue in line with 1H FY10 Total Revenue 872 868 0.
Slide 25: Resources
Resources 24 2011 Half-year performance Highlights Financial Performance For personal use only • Performance Half-Year ended 31 December (A$m) 2010 2009 % – Strong 1H FY11 financial result given difficult Revenue1 957 624 53 4 53.4 weather conditions EBITDA 305 61 400.0 – Curragh mine cash costs (A$
Slide 26: Chemicals, Energy & Fertilisers
Chemicals, Energy & Fertilisers 25 2011 Half-year performance Highlights Financial Performance For personal use only • Increased earnings from ammonia & Half-Year ended 31 December (A$m) 2010 20092 % ammonium nitrate Revenue Chemicals 315 292 7.9 Energy3 286 252 13.5 – Strong demand & plant performa
Slide 27: Industrial & Safety
Industrial & Safety 26 2011 Half-year performance Highlights Financial Performance For personal use only • Strong results supported by market conditions Half-Year ended 31 December (A$m) 2010 20091 % p & competitive p position Revenue 774 689 12.3 – 12.3% sales growth (1H FY10 affected by GFC) EBITD
Slide 28: Other business performance summary
27 Other business performance summary For personal use only Holding Half-Year ended 31 December (A$m) 2010 2009 % % Associates share of profit/(loss): Gresham Private Equity Funds Various (28) 29 n.m. Gresham Partners 50 ((1)) 2 n.m. Wespine 50 5 4 25.0 Bunnings Warehouse Property Trust 23 12 10 20.
Slide 29: Capital Management
For personal use only Capital Management
Slide 30: Balance sheet & dividend
29 Balance sheet & dividend For personal use only • Strong balance sheet provides financial flexibility • Operating cash flows continue to provide balance sheet support – Working capital focus remains – Seasonally stronger working capital cash flows in the first half • Credit ratings maintained – St
Slide 31: Working capital management
30 Working capital management For personal use only • Slow down in working capital improvement as foreshadowed – 1H FY10 cash flows reflect supplier reset work, Kmart off-site closures, strong seasonal stock sell through & significant fertiliser price declines at CSBP • Overall net working capital d
Slide 32: Portfolio of strong cash generating assets
31 Portfolio of strong cash generating assets For personal use only • Cash realisation ratio remained strong at 120.0% • Seasonally stronger first half cash flows A$m % 2,500 200 2,000 160 1,500 120 1,000 80 500 40 0 0 1H FY07 1H FY08 1H FY09 1H FY10 1H FY11 NPATDA* Operating Cash Flow Cash Realisat
Slide 33: Investment expenditure (cash basis)
32 Investment expenditure (cash basis) For personal use only • Continued investment to drive future growth, including A$345 million on land & buildings • FY11 capital expenditure estimate A$2.2 to A$2.4 billion, subject to changes in freehold property activity Capital Expenditure ( (1H FY11, A$m) $
Slide 34: Debt financing
33 Debt financing For personal use only • Further strengthening of the Group’s liquidity position – Cash interest cover (R12) improved to 7.7 times – Fixed charges cover (R12) improved to 2.6 times – Net debt to equity reduced to 14.8% • Gross debt of A$5.0 A$5 0 billion, billion net debt of A$3 A$3
Slide 35: Extension of debt tenor
34 Extension of debt tenor • Further lengthening of Group’s debt maturity profile For personal use only – Established A$2.5 billion revolving syndicated facility with equal maturities in December 2013 & December 2014 – Proceeds used to repay A$2.5 billion of syndicated debt facility maturing in Dece
Slide 36: Outlook
For personal use only Outlook
Slide 37: Flood & storm events
Flood & storm events 36 (Post 31 December 2010) For personal use only • Second half earnings will be negatively affected by severe flood & storm events, including cyclone Yasi, experienced in Q3 FY11 • The financial impact, estimated to date, on the Group’s retail businesses includes: – Writedown of
Slide 38: Outlook
37 Outlook For personal use only • Strong first half result provides a solid foundation for the remainder of the financial year Retail • The Group Group’ss retail businesses are well placed but performance is subject to any adverse impact to consumer confidence & a competitive retail environment • C
Slide 39: Outlook
38 Outlook For personal use only Insurance • Underwriting performance before one-off events is expected to continue to benefit from improved risk selection & portfolio remediation Industrials • Strong demand & increased price prospects for coal; tempered by difficult mining conditions, industry cost
Slide 40: Questions
For personal use only Questions
Slide 41: 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 42: Investment Conference Discussion Pack
For personal use only IInvestment t t Conference C f Discussion Pack Citi Investor I t C Conference f London March 2011
Slide 43: Disclaimer
2 Disclaimer For personal use only This presentation has been prepared by Wesfarmers Limited. The information contained in this presentation is for 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 44: Index
3 Index For personal use only 1 Philosophy, Performance & Direction 4 2 Group Overview 11 3 2011 Half-Year Results 15 4 Capital Management 20 5 Outlook 27 6 Operating Divisions 31 7 Sustainability 76 8 Investor Relations Contacts & Information 82
Slide 45: Philosophy, Performance & Direction
For personal use only Philosophy, p y Performance & Direction
Slide 46: Wesfarmers at a glance
5 Wesfarmers at a glance For personal use only • Commercially focused culture with primary objective of achieving satisfactory returns for shareholders • Focus F on four f core values: l integrity; i t it openness; accountability; t bilit & boldness b ld • Strength of diversified operations with str
Slide 47: The Wesfarmers Way
6 The Wesfarmers Way For personal use only OBJECTIVE Satisfactory return to shareholders VALUE CREATING STRATEGIES Strengthen existing Secure growth Ensure sustainability Renew the portfolio businesses through opportunities through through responsible through value-adding operating excellence and en
Slide 48: Recent evolution of Wesfarmers
7 Recent evolution of Wesfarmers Acquisition Events | Divestment Events | Growth Events FY07 August 2007: Australian Vinyls A$142m For personal use only Completion of Curragh North conveyor & coal FY08 handling Completion Wesfarmers TSR index A$360m of AN2 plant A$310m All O Ords d AAccumulation l t
Slide 49: Portfolio of leading brands
8 Portfolio of leading brands Retail Businesses Industrial Businesses For personal use only Insurance
Slide 50: Strength of unique network coverage
9 Strength of unique network coverage For personal use only Big Box Retail Discount Dept. Stores 8 10 147 96 Consumer 2 24 4 Staples Retail 80 106 73 559 21 Industrial 58 37 46 250 22 Insurance* 22 131 15 218 83 *Wesfarmers Insurance operates out of four locations in the United Kingdom & 131 721 33
Slide 51: Management team
10 Management team For personal use only Managing Director Richard Goyder Finance Director Terry Bowen Food & Liquor Retailing Coles Ian McLeod Big Box Retailing Home Improvement John Gillam & Office Supplies Discount Department Target Launa Inman Store Retailing Kmart Guy Russo Insurance Insurance
Slide 52: Group Overview
For personal use only Group Overview
Slide 53: Financial summary
12 Financial summary For personal use only Half-Year ended 31 December 2010 2009 % Change Operating Results Revenue A$m 28 074 28,074 26 533 26,533 58 5.8 EBITDA A$m 2,378 1,996 19.1 Earnings before interest and tax A$m 1,917 1,547 23.9 Net profit after tax (pre significant items) A$m 1,173 918 27.8
Slide 54: Divisional summary
13 Divisional summary For personal use only 1H FY11 1H FY11 1H FY11 Activities Revenue EBIT EBIT (A$ ) (A$m) (A$ ) (A$m) C t ib ti 1 Contribution The division comprises one of Australia's largest Coles supermarket businesses, liquor retailing outlets, 16,059 575 29% fuel & convenience outlets. Home
Slide 55: Divisional summary (cont.)
14 Divisional summary (cont.) For personal use only 1H FY11 1H FY11 1H FY11 Activities Revenue EBIT EBIT (A$m) (A$m) Contribution1 Provider of underwriting, broking, premium funding Insurance & financial services activities in Australia, New 872 65 3% Zealand & the UK. Mining of metallurgical & stea
Slide 56: 2011 Half-Year Results
For personal use only 2011 Half Half‐Year Year Results
Slide 57: 2011 Half-year results: Group performance
2011 Half-year results 16 Group performance Half Year ended 31 December (A$m) 2010 2009 % Group Financial Highlights For personal use only Operating revenue 28,074 26,533 5.8 • First half profit after tax of A$1,173 million, up EBITDA 2,378 1,996 19.1 33.4% EBIT 1,917 1,547 23.9 Finance costs (272)
Slide 58: 2011 Half-year results: Divisional performance
2011 Half-year results 17 Divisional performance For personal use only Divisional Performance Overview Half Year ended 2010 2009 % 31 December (A$m) • Coles’ performance was pleasing with revenue up 5.9% & EBIT up 18.3%; good progress continues to be made on the Coles 575 486 18.3 turnaround Home Im
Slide 59: Return on capital performance
2011 Half-year results 18 Return on capital performance For personal use only • ROC underpins long standing culture of financial discipline • Divisional s o a focus ocus o on g growth o in ROC OC through oug ea earnings gs g growth o & improvements po e e s in capital efficiency 2010 2009 Rolling 12
Slide 60: Other businesses performance
2011 Half-year results 19 Other businesses performance For personal use only Half-Year ended 31 December Holding 2010 2009 % (A$m) % Associates share of profit/(loss): Gresham Private Equity Funds Various (28) 29 n.m. Gresham Partners 50 ((1)) 2 n.m. Wespine 50 5 4 25.0 Bunnings Warehouse Property T
Slide 61: Capital Management
For personal use only Capital Management
Slide 62: Balance sheet & dividend
21 Balance sheet & dividend For personal use only • Strong balance sheet provides financial flexibility • Operating cash flows continue to provide balance sheet support – Working capital focus remains – Seasonally stronger working capital cash flows in the first half • Credit ratings maintained – St
Slide 63: Working capital management
22 Working capital management For personal use only • Slow down in working capital improvement as foreshadowed – 1H FY10 cash flows reflect supplier reset work, Kmart off-site closures, strong seasonall stock t k sellll th through h & significant i ifi t ffertiliser tili price i d declines li att CS
Slide 64: Portfolio of strong cash generating assets
23 Portfolio of strong cash generating assets For personal use only • Cash realisation ratio remained strong at 120.0% • Seasonally stronger first half cash flows A$m % 2,500 200 2,000 160 1,500 120 1,000 80 500 40 0 0 1H FY07 1H FY08 1H FY09 1H FY10 1H FY11 NPATDA* Operating Cash Flow Cash Realisat
Slide 65: Investment expenditure (cash basis)
24 Investment expenditure (cash basis) For personal use only • Continued investment to drive future growth, including A$345 million on land & buildings • FY11 capital expenditure estimate A$2.2 to A$2.4 billion, subject to changes in freehold property activity Capital Expenditure ( (1H FY11, A$m) $
Slide 66: Debt financing
25 Debt financing For personal use only • Further strengthening of the Group’s liquidity position – Cash interest cover (R12) improved to 7.7 times – Fixed charges cover (R12) improved to 2.6 times – Net debt to equity reduced to 14.8% • Gross debt of A$5.0 A$5 0 billion, billion net debt of A$3 A$3
Slide 67: Extension of debt tenor
26 Extension of debt tenor For personal use only • Further lengthening of Group’s debt maturity profile – Established A$2.5 billion revolving syndicated facility with equal maturities in December 2013 & December 2014 – Proceeds used to repay A$2.5 billion of syndicated debt facility maturing in Dece
Slide 68: Outlook
For personal use only Outlook
Slide 69: Flood & storm events
Flood & storm events 28 (Post 31 December 2010) For personal use only • Second half earnings will be negatively affected by severe flood & storm events, including g cyclone y Yasi, experienced in Q3 FY11 • The financial impact, estimated to date, on the Group’s retail businesses includes: – Writedow
Slide 70: Outlook
29 Outlook For personal use only • Strong first half result provides a solid foundation for the remainder of the financial year Retail • The Group Group’ss retail businesses are well placed but performance is subject to any adverse impact to consumer confidence & a competitive retail environment • C
Slide 71: Outlook (cont.)
30 Outlook (cont.) For personal use only Insurance • Underwriting performance before one-off events is expected to continue to benefit from improved risk selection & portfolio remediation Industrials • Strong demand & increased price prospects for coal; tempered by difficult mining conditions, indus
Slide 72: Operating Divisions
For personal use only Operating Divisions
Slide 73: Coles
For personal use only Cole Coles
Slide 74: Coles 2011 Half-year performance
Coles Coles 33 2011 Half-year performance Highlights Financial Performance For personal use only • Food & Liquor comp. sales growth of 6.4%3 ; total sales Half-Year ended 31 December (A$m) 2010 2009 % growth 6.3%3 Coles Division Revenue 16,059 15,161 5.9 • Strong EBIT growth of 18 18.3% 3% EBIT 575
Slide 75: Coles strategy on track
Coles Coles 34 Strategy on track For personal use only Building a Solid Delivering Driving the Coles Foundation Consistently Well Difference ormance Perfo • Create a strong top team • Embed the new culture • Culture of continuous • Cultural change • Team member development improvement • Availability
Slide 76: Coles historic performance
Coles Coles 35 Historic performance Food & Liquor Comparative Store Sales Growth EBIT ROC For personal use only % A$m % 8.0 1,000 10 800 8 6.0 600 6 4.0 400 4 200 2 2.0 0 0 2006 2007 2008* 2009 2010 00 0.0 First Half EBIT Second Half EBIT Return on Capital (R12) Q308 Q408 Q109 Q209 Q309 Q409 Q110 Q2
Slide 77: Coles network as at December 2010
Coles Coles 36 Network as at 31 December 2010 For personal use only Selling Area 6 7 11 Supermarkets (sqm) 1 599 157 1,599,157 Liquor (sqm) – ex hotels 185,236 148 221 78 81 96 6 112 67 52 30 6 43 247 259 5 210 166 193 174 742 Supermarkets 15 15 787 Li Liquor stores t 95 Hotels 624 Convenience
Slide 78: Home Improvement & Office Supplies
For personal use only Home Ho e IImprovement o e e t & Office Supplies
Slide 79: Home Improvement 2011 Half-year performance
Home Improvement & Home Improvement Office Supplies 38 2011 Half-year performance Highlights Financial Performance – Home Improvement For personal use only Home Improvement Half-Year ended 31 December (A$m) 2010 2009 % • Trading revenue growth of 4.4% Revenue 3,572 3,402 5.0 – 4.1% 4 1% total stores
Slide 80: Home Improvement strategy & historic performance
Home Improvement Home Improvement & Office Supplies 39 Strategy & historic performance For personal use only EBIT A$m ROC % Growth Strategies 800 40 Home Improvement Strategies Details 35 Profitable sales growth Strengthening customer service Improving the offer 600 30 Investing in & expanding the n
Slide 81: Home Improvement network as at 31 December 2010
Home Improvement Home Improvement & Office Supplies 40 Network as at 31 December 2010 For personal use only 191 Warehouse stores 57 Smaller format stores 2 32 Trade Centres 31 5 9 24 6 3 9 3 2 57 17 6 14 24 1 47 1 9 5 2 1 2
Slide 82: Office Supplies 2011 Half-year performance
Home Improvement & Office Supplies Office Supplies 41 2011 Half-year performance Highlights Financial Performance – Office Supplies For personal use only • Retail store sales growth of 7.5% Half-Year ended 31 December (A$m) 2010 2009 % – Underpinned by strong growth in transactions Revenue 706 662 6
Slide 83: Office Supplies strategy & historic performance
Office Supplies Home Improvement & Office Supplies 42 Strategy & historic performance For personal use only EBIT ROC Growth Strategies A$m % Office Supplies Strategies Details 80 8 Improve the customer offer Enhance & expand the product range H l customers to b Help be more environmentally i ll cons
Slide 84: Officeworks & Harris Technology network
Officeworks & Harris Technology Home Improvement & Office Supplies 43 Network as at 31 December 2010 For personal use only Retail Stores 133 Officeworks 5 Harris Technology 26 1 1 Business 11 1 1 4 Fulfilment Centres 8 3S Service i C Centres t 45 2 1 1 Print Hub 2 1 41 1 1 1 2
Slide 85: Target
For personal use only Target Ta et
Slide 86: Target 2011 Half-year performance
Target Target 45 2011 Half-year performance Highlights Financial Performance For personal use only • Sales results affected by a difficult retail environment Half-Year ended 31 December (A$m) 2010 2009 % – Significant price deflation due to strong AUD & competition – Summer apparel sales affected by
Slide 87: Target strategy & historic performance
Target Target 46 Strategy & historic performance For personal use only EBIT ROC Growth Strategies A$m % Target Strategies Details 500 20 Profitable sales ggrowth Continued investment in the store pportfolio with new stores & refurbishments 400 16 Continue to grow clothing & homewares in good, better
Slide 88: Target network as at December 2010
Target Target 47 Network as at 31 December 2010 For personal use only 3 59 31 26 97 69 290 Target stores (i l 119 T (incl. Targett C Country) t ) 5
Slide 89: Kmart
For personal use only K at Kmart Kmart Guy Russo
Slide 90: Kmart 2011 Half-year performance
Kmart Kmart 49 2011 Half-year performance Highlights Financial Performance For personal use only • Improved underlying profitability Half-Year ended 31 December (A$m) 2010 2009 % – 13.0% increase in profit to A$174 million, driven by gross margin improvement & cost control Revenue 2,271 2,226 2.0 •
Slide 91: Kmart strategy & historic performance
Kmart Kmart 50 Strategy & historic performance For personal use only EBIT ROC Growth Strategies A$m % Kmart Strategies Details 250 35 Customer - outstanding experience All about the Kmart customers; Fast & friendly service; 30 Clean & tidy stores; Lowest price; More convenient 200 shopping hours; Co
Slide 92: Kmart network as at December 2010
Kmart Kmart 51 Network as at 31 December 2010 For personal use only 186 Kmart stores 250 KTAS centres 2 3 36 52 21 28 13 19 51 70 12 43 73 5 5 3
Slide 93: Insurance
For personal use only Insurance I ua e
Slide 94: Insurance 2011 Half-year performance
Insurance Insurance 53 2011 Half-year performance Highlights Financial Performance For personal use only • Increased earnings across underwriting & broking Half-Year ended 31 December (A$m) 2010 2009 % • Revenue in line with 1H FY10 notwithstanding Gross Written Premium Underwritten 659 680 ((3.1))
Slide 95: Insurance business overview
Insurance Insurance 54 Business overview For personal use only Australia New Zealand United Kingdom Broking Underwriting Group Services
Slide 96: Insurance strategy & historic performance
Insurance Insurance 55 Strategy & historic performance For personal use only EBITA ROC Growth Strategies A$m % Insurance Strategies Details 160 20 Performance improvement Strong focus on underwriting & claims disciplines & business process enhancement Focus on customer needs Work with new & existing
Slide 97: Insurance geographical presence
Insurance Insurance 56 Geographical presence as at 31 December 2010 For personal use only 3 1 UK 4 3 14 4 19 1 2 1 1 5 13 6 22 11 7 19 1 6 Lumley Insurance (Australia) 13 Lumley General New Zealand 11 6 WFI 90 3 4 1 OAMPS 1 29 2 Crombie Lockwood 17 1 OAMPS New Caledonia location not shown
Slide 98: Resources
For personal use only Re ou e Resources
Slide 99: Resources 2011 Half-year performance
Resources Resources 58 2011 Half-year performance Highlights Financial Performance For personal use only • Performance Half-Year ended 31 December (A$m) 2010 2009 % – Strong 1H FY11 financial result given difficult weather conditions – Curragh g mine cash costs ((A$/t)) increased 19.9% 1H FY11 vs. 1
Slide 100: Resources strategy & historic performance
Resources Resources 59 Strategy & historic performance For personal use only EBIT A$m ROC % Growth Strategies 1,000 100 Resources Strategies Details Maximise export sales & optimise Curragh expansion tonnage contracts in place sales mix Price relativity improved 800 80 Maximise higher value products
Slide 101: Resources sales
Resources Resources 60 Sales Coal Sales Volumes by Mine (1H11) Australian Hard Coking Coal Prices For personal use only Mine Australian hard coking coal prices Steaming Metallurgical Total US$/Tonne (Nominal) FOB Australia ( Quaterly price to March 2011 verse spot) (mtpa) 400 Curragh, QLD^ 1.4 3.2 4
Slide 102: Resources hedging profile
Resources Resources 61 Hedging profile as at 31 December 2010 For personal use only Curragh Bengalla Full Year Current US$ Average Full Year Current US$ Average end sold forward A$ / US$ end sold forward A$ / US$ 30 June (US$m) hedge rate 30 June (US$m) hedge rate 20111 380 0.86 20111 59 0.83 2012 6
Slide 103: Curragh mine expansion
Resources Resources 62 Curragh mine expansion For personal use only • Wesfarmers approved in November 2009 the investment of A$286 million to expand Curragh metallurgical coal exports to 8.0 – 8.5mtpa • Curragh has rail & export capacity contracted at 8 8.5mtpa 5mtpa • Curragh has forward-sold the a
Slide 104: Curragh expansion study to 10mtpa
Resources Resources 63 Curragh expansion study to 10mtpa For personal use only • Feasibility study (FS) commenced – Mining & Coal Handling Preparation Plant studies • Potential to expand Curragh to 10mtpa metallurgical exports from FY14 – Wiggins Island commissioning – Additional rail capacity requi
Slide 105: Bengalla expansion study
Resources Resources 64 Bengalla expansion study For personal use only • Expansion to 10.7mtpa ROM tonnes through two stages – Stage One 9.3mtpa ROM – Stage Two 10.7mtpa ROM • Stage One approved – November 2010 (A$56m)1 • Stage Two feasibility study nearing completion • Additional port capacity secur
Slide 106: Wiggins Island Coal Export Terminal
Resources Resources 65 Wiggins Island Coal Export Terminal For personal use only • Stage One development of 27mtpa port capacity (Curragh share h 1 1.5mtpa) 5 t ) • Decision on investment & p y commitment in 1H take-or-pay CY11 • First shipment 2014 • Potential cumulative capacity from subsequent st
Slide 107: Resources locations
Resources Resources 66 Locations For personal use only Coal Premier Coal C Curragh h Bengalla (40%)
Slide 108: Chemicals, Energy & Fertilisers
For personal use only Chemicals, Che i al Energy E e y& Fertilisers
Slide 109: Chemicals, Energy & Fertilisers 2011 Half-year performance
Chemicals, Energy Chemicals, Energy & Fertilisers & Fertilisers 68 2011 Half-year performance Highlights Financial Performance For personal use only • Increased earnings from ammonia & ammonium nitrate Half-Year ended 31 December (A$m) 2010 20092 % – Strong demand & plant performances Revenue Chemic
Slide 110: Chemicals, Energy & Fertilisers strategy & historic performance
Chemicals, Energy Chemicals, Energy & Fertilisers & Fertilisers 69 Strategy & historic performance EBIT A$m A$ ROC % Growth Strategies 160 24 For personal use only WESCEF Strategies Details 20 120 Improve offers Ongoing development of product & 16 sevice differentiation Improve competitiveness Optim
Slide 111: Chemicals, Energy & Fertilisers locations
Chemicals, Energy Chemicals, Energy & Fertilisers & Fertilisers 70 Locations as at 31 December 2010 For personal use only 16 CSBP fertilisers 6 CSBP chemicals 1 2 Australian Vinyls 2 1 4 4 QNP (50%) 8 ALWA 16 20 3 AGR (75%) 7 3 5 1 21 enGen 16 6 11 46 Kleenheat 9 2 2
Slide 112: Industrial & Safety
For personal use only I du t ial & Safety Industrial
Slide 113: Industrial & Safety 2011 Half-year performance
Industrial & Safety Industrial & Safety 72 2011 Half-year performance Highlights Financial Performance For personal use only • Strong results supported by market conditions & Half-Year ended 31 December (A$m) 2010 20091 % competitive position – 12.3% sales growth (first half last year affected by GF
Slide 114: Industrial & Safety strategy & historic performance
Industrial & Safety Industrial & Safety 73 Strategy & historic performance For personal use only EBIT A$m ROC % Growth Strategies 140 21 Industrial & Safety Strategies Details 120 18 Increase share of customers' products Strong delivery performance & customer service & services spend Broadening prod
Slide 115: Industrial & Safety distribution network
Industrial & Safety Industrial & Safety 74 Distribution network as at 31 December 2010 236 industrial & safety locations & 129 gas distribution points For personal use only Australia(1) No. 72 “All your workplace needs” industrial (2) 2 3 16 12 1 8 9 44 Safety 18 9 1 1 6 4 24 Materials handling, g,
Slide 116: Other businesses
75 Other businesses For personal use only Gresham: 50% interest in Gresham Partners, an independent Half-Year ended 31 December (A$m): 2010 2009 i investment t t bank b k focused f d on financial fi i l advisory d i services, i private equity investment and property investment funds. Share of associ
Slide 117: Sustainability
For personal use only Sustainability
Slide 118: Sustainability priorities
Sustainability 77 Priorities For personal use only In the context of its commitment to sustainable outcomes, Wesfarmers has nominated five keyy Wesfarmers is again a areas of focus that will contribute towards delivering member of the Dow satisfactory returns for its shareholders in 2010 & beyond: J
Slide 119: The importance of people
Sustainability 78 The importance of people For personal use only • Australia’s largest private sector employer, employing some 200,000 employees, largely in Australia & New Zealand • Wesfarmers recognises the significant social & commercial value of diversity at all levels of its workforce • Reducti
Slide 120: Carbon emissions reduction & energy management
Sustainability 79 Carbon emissions reduction & energy management • Wesfarmers is pursuing energy efficiency in our facility design, construction, For personal use only maintenance & redevelopment practices • We continued to invest in new technologies & systems during the period – Installation in som
Slide 121: Community investment
Sustainability 80 Community investment • Wesfarmers recognises & invests in areas of the community which it believes For personal use only contribute to building long-term cohesion, leadership & innovation • During g the p period all businesses made a strong g contribution to supporting pp g the rec
Slide 122: A reduced overall environmental footprint
Sustainability 81 A reduced overall environmental footprint For personal use only • Wesfarmers’ business operations have both direct & indirect environmental impacts, including water usage, packaging, emissions to air solid & liquid waste air, waste, & land rehabilitation • Key initiatives commissio
Slide 123: Investor Relations Contact
82 Investor Relations Contact For personal use only Alex Willcocks General Manager, 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: A Annual
Slide 124: 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 — Citi Investor Conference, London, March 2011 on 6ix