Slide 1: ASX cover letter: 2024 Half Year Results Presentation
27 February 2024 The Manager Company Announcements Office Australian Securities Exchange Dear Sir or Madam Coles Group Limited – 2024 Half Year Results Presentation Please find attached for immediate release to the market the 2024 Half Year Results Presentation for Coles Group Limited. This announce
Slide 2: 2024 Half Year Results Presentation
2024 Half Year Results Presentation 27 February 2024 Leah Weckert, Managing Director & Chief Executive Officer Charlie Elias, Chief Financial Officer Coles’ Christmas range featured more than 300 Coles Own Brand products, 0 providing value to customers during the festive season.
Slide 3: Disclaimer
Disclaimer This presentation contains summary information about Coles Group Limited (ACN 004 089 936) and its controlled entities (collectively, ‘Coles’, ‘Coles Group’ or ‘the Group’) and Coles’ activities as at the date of this presentation. It is information given in summary form only and does not
Slide 4: Acknowledgement of Traditional Custodians
Coles wishes to acknowledge the Traditional Custodians of this land We recognise their strength and resilience and pay our respects to their Elders past and present. Coles extends that respect to all Aboriginal and Torres Strait Iskander people, and recognises their rich cultures and their continuin
Slide 5: 1H24 highlights
1H24 highlights Good progress against immediate strategic priorities Investments in value and improvements in availability underpin Supermarkets volume growth Continued product innovation and strong growth in Exclusive to Coles and Exclusive Liquor Brands Strong growth in eCommerce, digital and loya
Slide 6: 1H24 financial highlights
1H24 financial highlights Reported Group EBIT – continuing Reported NPAT – continuing operations operations $1,064m $594m 0.6% vs. pcp (3.6)% vs. pcp Underlying Group EBIT1 – Underlying NPAT1,2 – continuing continuing operations operations $1,110m $626m 3.3% vs. pcp (0.3)% vs. pcp Operating cash flo
Slide 7: Sustainable benefits for all stakeholders
Sustainable benefits for all stakeholders Customers Suppliers Team members Community Shareholders 850 supermarkets in every >8,000 suppliers and One of the largest private Recognised by the 2023 >440,000 direct and part of Australia >40,000 product lines sector employers in GivingLarge Report as the
Slide 8: Macroeconomic backdrop
Macroeconomic backdrop Forecast population growth (2030)1 1.2% Highest population growth of developed 1.1% 0.7% and developing countries 0.6% 0.6% 0.5% 0.5% 0.4% 0.2% Australia Philippines Malaysia India Canada Indonesia NZ US UK Expect further shift to in-home dining driven by pressure on discretio
Slide 9: Investing in great value and great quality
Investing in great value and great quality “Great Value, Hands Down” campaign with prices dropped on hundreds of products “Coles Simply” brand introduced to help shoppers easily identify key Own Brand value items Increased focus on Fresh including supply chain initiatives “Great lengths for Quality”
Slide 10: Exclusive brand portfolio resonating with customers
Exclusive brand portfolio resonating with customers ~2x revenue growth of proprietary brands Extensive range of Own Brand products with ~6,000 Exclusive to Coles and ~1,900 Exclusive 2.0x Liquor Brand products +7.6% Exclusive to Coles >500 new Exclusive to Coles and 199 Exclusive sales growth Superm
Slide 11: Accelerating engagement in digital channels and loyalty
Accelerating engagement in digital channels and loyalty Growing digital revenue and contribution +29.2% 9.1% +14.9% Revenue growth in Supermarkets sales Revenue growth in Supermarkets1 (vs. pcp) penetration1 Liquor2 (vs. pcp) Delighting our customers with a great shopping experience (vs. pcp) +42.3%
Slide 12: Availability improving and productivity program helping to offset cost inflation
Availability improving and productivity program helping to offset cost inflation Actions taken to build supply chain resilience Simplify and Save to Invest delivered ~$90m in benefits Greatest uplift in previously impacted categories of Initiatives included: meat, frozen vegetables and eggs • In-sto
Slide 13: Moving at pace to address loss
Moving at pace to address loss Operational and process initiatives to address stock loss and waste and markdown implemented across all stores (e.g. team member training, ranging, enhanced shelf life through improved product flow) Rolled out Skip Scan in 305 stores and Smart Gates in 267 stores Total
Slide 14: Strategy tracker – good progress against immediate areas of focus
Strategy tracker – good progress against immediate areas of focus Our vision is to become the most trusted retailer in Australia and grow long-term shareholder value. Availability, loss and quality Delivering value ✓ Improved availability with DIF of 96% (2H23: ✓ “Great Value, Hands Down” campaign 9
Slide 15: Environmental, social and governance
Environmental, social and governance Win Together – Good progress in key areas of focus Energy and emissions Scope 3 emissions Sustainable packaging Community Diversity and Inclusion Partnered with Origin Energy Expanded the use of Rolled out certified Recognised by the 2023 Ranked #4 in the World t
Slide 16: Group financial overview
14 Group financial overview Coles was proud to support the Movember campaign, raising more than $1.3 million to help 14 raise awareness on men’s health and suicide prevention.
Slide 17: 1H24 results – Group
1H24 results – Group $m 1H24 1H23 Change Group - continuing operations Sales revenue 22,216 20,809 6.8% EBITDA - reported 1,854 1,809 2.5% - underlying1 1,900 1,826 4.1% EBIT - reported 1,064 1,058 0.6% - underlying1 1,110 1,075 3.3% EBIT margin (%) - reported 4.8% 5.1% (29)bps - underlying1 5.0% 5.
Slide 18: 1H24 results – Supermarkets and Liquor
1H24 results – Supermarkets and Liquor Supermarkets Liquor $m 1H24 1H23 Change $m 1H24 1H23 Change Sales revenue 19,778 18,857 4.9%1 EBITDA Sales revenue 1,988 1,952 1.8%3 - reported 1,730 1,676 3.2% - underlying2 1,776 1,693 4.9% EBITDA 148 141 5.0% EBIT - reported 1,007 991 1.6% - underlying2 1,05
Slide 19: Operating cash flow
Operating cash flow Cash flow strong with cash realisation of 102% Cash flow1 Inventory and trade payable days2 $m 1H24 1H23 34 33 30 30 EBIT 1,057 1,114 Depreciation and amortisation 790 786 EBITDA 1,847 1,900 1H23 1H24 1H23 1H24 Inventory days Trade payable days Cash realisation3 Change in working
Slide 20: Capital expenditure
Capital expenditure Capital expenditure breakdown Key capital expenditure initiatives $m 1H24 1H23 • Store renewals across Supermarkets (11) and Liquor (71) Store renewals including 64 Black & White Liquorland renewals Store renewals 182 93 • New stores across Supermarkets (5) and Liquor (10) Growth
Slide 21: Balance sheet
Balance sheet Balance sheet summary Comments • Property, plant and equipment increased by $267 million in line with the 31 Dec 25 Jun 1 Jan increase in capital expenditure $m 2023 2023 2023 • Cash and cash equivalents increased largely a result of the issuance of $600 Working capital (1,599) (1,506)
Slide 22: Capital management
Capital management Debt facility maturity profile ($m) Comments Bank facilities SLL Bank facilities AMTN • Net debt (excluding lease liabilities) of $1,165 million increased by $133 million compared to 25 June 2023, consistent with increases 150 in capital expenditure 300 • Fully franked 1H24 interi
Slide 23: Supermarkets
21 Supermarkets “Quiet Hour”, Coles’ low-sensory shopping experience, has been expanded to five days a week, 21 at a time that better suits many customers and working parents.
Slide 24: Supermarkets – key metrics
Supermarkets – key metrics Total sales revenue eCommerce sales growth Reported EBIT Underlying EBIT1 $19.8bn 29.2% $1,007m $1,053m 4.9% vs. pcp vs. pcp 1.6% vs. pcp 4.5% vs. pcp Exclusive to Coles Reported EBIT Underlying EBIT1 Sales per sqm sales revenue growth margin margin 7.6% 5.1% 5.3% $19,618
Slide 25: Supermarkets – 1H24 results
Supermarkets – 1H24 results Value campaigns underpin positive volume growth $m 1H24 1H23 Change Key commentary Key P&L items • Sales growth driven by improved availability, successful execution Sales revenue 19,778 18,857 4.9%1 of key seasonal events and the Curtis Stone BBQ continuity campaign EBIT
Slide 26: Liquor
24 Liquor Liquorland and Cricket Australia announced a four-year partnership with Liquorland serving as the 24 official partner across men’s and women’s international cricket.
Slide 27: Liquor – key metrics
Liquor – key metrics Total sales revenue EBIT eCommerce sales growth1 $2.0bn $84m 14.9% 1.8% vs. pcp 5.0% vs. pcp vs. pcp Exclusive Liquor Brands (ELB) Exclusive Liquor Brands Liquor store renewals sales growth 3.6% 199 71 vs. pcp lines added in 1H24 completed in 1H24 Notes: (1) eCommerce gross reta
Slide 28: Liquor – 1H24 results
Liquor – 1H24 results Growth in ELB portfolio and eCommerce $m 1H24 1H23 Change Key commentary Key P&L items • During the half, customers were seeking value and managing their overall spend. Basket growth was modest while units were down Sales revenue 1,988 1,952 1.8%1 relative to the prior correspo
Slide 29: Outlook
27 Outlook 27 Coles ambassador Sally Pearson and CEO Leah Weckert celebrate Coles’ partnership with Little Athletics.
Slide 30: Outlook
Outlook • In the first eight weeks of 3Q24, Supermarkets sales revenue grew 4.9%1 underpinned by volume growth from strong Delivering value for execution of our value campaigns and improvements in availability compared to this time last year customers will continue to • Pleasingly for customers, we
Slide 31: Appendix
29 Appendix Through the Coles Nurture Fund, Esperance Bay Orchards were awarded $440k to invest in Near Infrared 29 technology that detects the internal quality of organic fruit and limits food waste by reducing rejections.
Slide 32: 1H24 results – segment financials
1H24 results – segment financials $m 1H24 1H23 Change Sales revenue Supermarkets 19,778 18,857 4.9% Liquor 1,988 1,952 1.8% Other 450 - n/m Sales revenue – continuing operations 22,216 20,809 6.8% Express – discontinued operations - 607 n/m Total Group sales revenue 22,216 21,416 3.7% EBITDA Superma
Slide 33: Q&A
Q&A 31 Team members at the newly opened Coles supermarket and Liquorland at Chadstone Village, Victoria.