Woolworths Holdings Limited · JSE:WHL
Woolworths — H1 FY2025 Earnings Presentation
61 slides from Woolworths's earnings presentation, March 2025
Slide 1: Woolworths Holdings Interim Results FY25
WOOLWORTHS HOLDINGS LIMITED I N T E R I M R E S U LT S F Y2 5
Slide 2: Presentation Outline
PRESENTATION OUTLINE 01 02 03 04 OVERVIEW OF FINANCIAL STRATEGIC Q&A THE PERIOD OVERVIEW UPDATE AND OUTLOOK
Slide 3: Overview of the Period
OVERVIEW OF THE PERIOD Roy Bagattini Group CEO
Slide 4: Overview of the Period
OVERVIEW OF THE PERIOD Continued strong performance in Food, offset by weaker performance from Apparel businesses in throes of significant transformation • Group result impacted by lower contributions from apparel businesses, particularly CRG • Turnover and concession sales +5.7% | aEBIT -13.7% | aE
Slide 5: Building Foundational Capabilities and Optimal Structures
WE ARE BUILDING FOUNDATIONAL CAPABILITIES, AND OPTIMAL STRUCTURES AND PROCESSES, TO DRIVE LONG-TERM SUSTAINABLE PERFORMANCE
Slide 6: Recognition in the First Half
RECOGNITION IN THE FIRST HALF... WBeauty World’s Best World’s Best Window Display toner wins Marketing Most Sustainable Window Display Best Product Campaign Voted No.1 ‘Coolest Social Impact Grocery Store’ Award for Farming by the youth for the Future Intercontinental Group of Department Stores Wool
Slide 7: Underpinned by Leading Credentials
...UNDERPINNED BY LEADING CREDENTIALS ONLY ONLY ETHICALLY SOURCED AT WOOLIES ONLY FREE RANGE
Slide 8: The Good Business Journey
THE GOOD THE GOOD THE GOOD WE’RE DEDICATED TO SHAPING A BETTER WORLD THAT BENEFITS US DEDICATED WE’RE ALL, TO SHAPING A BETTER WORLD THAT BENEFITS WE’RE US BUSINESS OUR GOODJOURNEY BUSINESS BUSINESS JOURNEY JOURNEYBUSINESS GOOD PILLARS JOURNEY WHILE BUILDING A BUSINESS THAT REMAINS RESILIENT FOR YEA
Slide 9: Our Good Business Journey
OUR GOOD BUSINESS JOURNEY Our Good Business Journey (GBJ) is embedded in everything we do, and is a key differentiator for us • Aligned with our vision to be one of the world’s most responsible retailers, sustainability is deeply entrenched in our business, and has been for decades • Numerous GBJ ac
Slide 10: Thank You
THANK YOU! To our people for their passion, determination, and commitment To our loyal customers for their continued trust and support To our suppliers suppliers,, for their dedication and hard work every single day Thank you for helping us create the exceptional Woolies Difference
Slide 11: Financial Overview
FINANCIAL OVERVIEW Zaid Manjra Group Finance Director
Slide 12: Financial Overview for the Period
FINANCIAL OVERVIEW FOR THE PERIOD Strong Food performance offset by lower contributions from apparel businesses | Period of heightened investment | Balance sheet remains healthy, further strengthened by successful sale of Bourke Street property Turnover and Adjusted Adjusted Adjusted diluted concess
Slide 13: South African Macro Context
SOUTH AFRICAN MACRO CONTEXT Steadily improving consumer and business environment; however, geopolitical factors causing increasing uncertainty 10.0 10.0 • Improved consumer and business confidence post the formation of Government of National Unity 5.0 5.0 • Interest rate cuts (75bps since September
Slide 14: Australian Macro and Retail Context
AUSTRALIAN MACRO AND RETAIL CONTEXT Persistent inflation and high interest rates continue to dampen consumer demand Index (1Q2017=100) Real household disposable income per capita 120 • Real GDP growth at 32-year lows (ex-Covid) 115 • Interest rates at 12-year high (with first 25bps cut in 110 Feb 20
Slide 15: Sale of Bourke Street Property
SALE OF BOURKE STREET PROPERTY • Post David Jones sale, Bourke Street flagship store retained as a non-strategic investment asset • Successful sale of property in December 2024 for R2.6bn (A$223.5m) • Recognised post-tax capital gain of R792m; adjusted for in calculating HEPS • Proceeds of sale to b
Slide 16: Sales Performance
SALES PERFORMANCE Group sales +6.2% in constant currency | WSA sales +9.1% | Improving momentum on H2 LY | Food delivered strong above- market growth | Positive FBH topline growth, albeit slowdown in December | Improved trade in CRG over festive season COUNTRY ROAD GROUP 11.4 2.5 9.6 (6.2) (11.3) (2
Slide 17: Segmental Adjusted Earnings
SEGMENTAL ADJUSTED EARNINGS WSA aEBITDA +2.7%, whilst Group aEBITDA -6.4%, impacted by CRG performance | EBIT versus EBITDA differential reflects significant capex investments across the Group aEBITDA -6.4% Rm 4 000 -13.7% +6.6% excl. IFRS 17 3 224 WSA aEBIT -3.1% transition 3 000 WSA aEBITDA +2.7%
Slide 18: Woolworths Food
WOOLWORTHS FOOD Sector-leading sales growth driven by consistent execution of our strategies, delivering further profitable market share gains Strong comp sales growth +7.3% | GP margin gains driven by more targeted promotions and Value Chain efficiencies, notwithstanding growing online contribution
Slide 19: Woolworths Fashion, Beauty, and Home
WOOLWORTHS FASHION, BEAUTY, AND HOME Positive turnover growth | aEBIT operating deleverage from gross profit margin dilution GP margin impacted by one-off supply chain costs (-0.7ppt) related to DC transformation and higher promotional contribution (-1.0ppt) | Strong beauty sales (+17.3%) | Costs we
Slide 20: Country Road Group
COUNTRY ROAD GROUP Disappointing result in a constrained and intensely promotional environment Significant restructure to reconfigure operating model | GP margin impacted by increased discounting and weaker A$ | Higher fixed-cost base post DJ separation and expansion into concessions | Assessment of
Slide 21: Woolworths Financial Services
WOOLWORTHS FINANCIAL SERVICES Positive underlying performance supported by market-leading impairment rate Closing book +1.0% excluding legal book sale | Impairment rate improved to 5.4%; remains sector leading | PAT +6.6% on last year, excluding IFRS 17 transition accounting adjustment Closing book
Slide 22: Capital Expenditure
CAPITAL EXPENDITURE Significant investment in multi-year growth initiatives, including Value Chain capabilities in FBH and Supply Chain capacity in Food Investment in store network (expansion and modernisation) | Foundational capability in FBH through Value Chain Transformation initiatives, Food cap
Slide 23: Group Balance Sheet
GROUP BALANCE SHEET Balance sheet strengthened by sale of property, notwithstanding investments in strategic initiatives Net borrowings ROCE • Net borrowings at R4.7bn post the sale of Bourke Street property R4.7bn WSA net debt: R7.4bn | Australia 17.0% 22.3% LY • Gearing metrics remain within targe
Slide 24: Cash Flow
CASH FLOW Positive free cash flow, notwithstanding higher investment in working capital and increased finance costs Rm 6 000 4 291 4 000 88 (798) (845) 2 000 (398) (509) 2 575 863 606 (857) (366) (1 253) (2 000) (1 065) Cash Working Joint Net Share Taxation Lease Main- Free cash Expansion Dividends
Slide 25: Recent Trading and Outlook
RECENT TRADING AND OUTLOOK FOOD • First eight weeks sales growth in H2 +12.2% • Lower inflation; positive volumes • H2 price movement forecast 4% - 5% • Net space planned at ~3% increase FBH • First eight weeks sales growth in H2 +3.0% • Full price sales +9.2% • H2 price movement forecast 4% - 5% •
Slide 26: Strategic Update and Outlook
STRATEGIC UPDATE AND OUTLOOK Roy Bagattini Group CEO
Slide 27: Reminder: Our Strategic Journey and Progress
REMINDER: OUR STRATEGIC JOURNEY AND PROGRESS We have made significant progress along our multi-phase strategic journey, shifting from “Fix, Strengthen and Reposition” to “Optimise, Invest and Grow”, albeit with each business at a different stage within this FASHION BEAUTY HOME CRG FOOD 1 2 3 FIX, ST
Slide 28: Key Questions for Management
KEY QUESTIONS FOR MANAGEMENT 1 2 3 Is CRG’s FBH has a long How do you intend underperformance track record of sustaining your cyclical, and inconsistency - sector-leading therefore fixable, evident again in this Food performance, or symptomatic of result. Why should in an increasingly a bigger and m
Slide 29: Australia – Sequenced 4-Step Plan
AUSTRALIA – SEQUENCED 4-STEP PLAN After successfully concluding the sale of DJ, and then operationally separating DJ from CRG, we are now configuring CRG as a standalone, ‘House of Brands’ business FY2021 FY2023 FY2024 FY2025 PHASE ONE PHASE TWO PHASE THREE PHASE FOUR Operational Reconfigured Sale o
Slide 30: Key Questions for Management: CRG
KEY QUESTIONS FOR MANAGEMENT Question 1: Is CRG’s underperformance cyclical, and therefore fixable, or symptomatic of a bigger and more structural issue? • Post separation from DJ, CRG business model no longer fit for purpose, carrying significant inefficiency, as well as dis-synergy and stranded co
Slide 31: Fashion Turnaround Priorities and Sequencing
FASHION TURNAROUND PRIORITIES AND SEQUENCING We have largely completed the first phase of our turnaround journey and are now pursuing our next biggest commercial opportunity – improving availability PHASE ONE PHASE TWO DEFINE THE MARKET, RIGHT PRODUCT AT RIGHT PRICE Trading RIGHT PLACE AND OUR POSIT
Slide 32: Fashion Turnaround – Phase One
FASHION TURNAROUND – PHASE ONE Phase one of our turnaround was focused on improving the underlying financial health of our Fashion business RIGHT PRODUCT AT RIGHT PRICE Defined “must-win” categories Enhanced design and buying principles Full-priced sales % GP margin % 84% 48.5% Reduced SKUs by ~30%
Slide 33: Value Chain Transformation
VALUE CHAIN TRANSFORMATION RECONFIGURED OUR BUSINESS TO CREATE Consolidation of supply base driving MOVING FROM A “PUSH” TO A “PULL”, A FUTURE-STATE OPERATING MODEL fabric synergies and CENTRALISED INVENTORY MODEL improved input costs right product | right place | right time | right quantity 2 CENTR
Slide 34: Fashion Turnaround – Phase Two
FASHION TURNAROUND – PHASE TWO Phase two focuses on improving product availability, supported by the ongoing investment in our transformative Value Chain Transformation (VCT) RIGHT QUANTITIES AND SIZES IN THE Implemented a more customer-centric RIGHT PLACE AT THE RIGHT TIME availability measure Tran
Slide 35: Key Questions for Management: FBH
KEY QUESTIONS FOR MANAGEMENT Question 2: FBH has a long track record of inconsistency - evident again in this result. Why should we believe this “turnaround” will finally address that? • Further leveraging strengthened foundations established in Phase 1 of turnaround • Phase 2 focuses on improving a
Slide 36: Key Questions for Management: Food
KEY QUESTIONS FOR MANAGEMENT Question 3: How do you intend sustaining your sector-leading Food performance, in an increasingly competitive environment? • Unwavering focus on “holy grail”, underpinning market-leading credentials and performance • Continuing to grow our core business – 8% growth in cu
Slide 37: Food Highlights in H1 FY25
FOOD HIGHLIGHTS IN H1 FY25 DOUBLED SALES >90% ADDED SOURCED LOCALLY ~700 NEW PRODUCT LINES OF OUR BEST EVER CHRISTMAS RANGE >95% 12 GREATER BIGGER BASKETS HIGHER FOOTFALL % SHARE OF WALLET AVAILABILITY OVER +8% CONSECUTIVE MONTHS OF FESTIVE SEASON GROWTH IN MARKET CUSTOMER BASE SHARE GAIN
Slide 38: What Sets Our Food Business Apart
WHAT SETS OUR FOOD BUSINESS APART The “holy grail”: the sweet spot which balances giving our customers the best overall proposition in the market, and our shareholders the highest return on capital in the sector • Unmatched capability in BEST BEST food science and technology for customers for shareh
Slide 39: Woolies Dash
WOOLIES DASH 7% OF WOOLIES DASH CUSTOMERS NEW TO THE BRAND INCREASE IN ONLINE SLOT CAPACITY >30% c.50% SALES GROWTH ON LY
Slide 40: First-to-Market
FIRST-TO-MARKET WHL WOOLIES AFTER | |= Eats DARK |. QUICKSHOP&Co
Slide 41: Woolworths Ventures Update
WOOLWORTHS VENTURES UPDATE Woolworths Ventures continues to play a key role in accelerating the execution of our various strategic growth initiatives • Delivered double-digit topline growth FOOD SERVICES WCELLAR • aEBIT growth > topline growth, notwithstanding significant investments being made • Op
Slide 42: Loyalty – Launching MyDifference
LOYALTY – LAUNCHING MYDIFFERENCE THE ONLY SOUTH AFRICAN RETAILER WITH GET BACK. GIVE BACK. LOYALTY + ALL MODES OF ONLINE SHOPPING + FINANCIAL SERVICES IN A SINGLE APP, DELIVERING A SEAMLESS AND INTEGRATED CUSTOMER EXPERIENCE
Slide 43: Outlook
OUTLOOK World-class Food business will remain engine room for value creation, with Apparel presenting significant opportunity to unlock value as a Group • Sale of DJ transformational in enabling return of Group capital and management focus to core value-accretive businesses • Currently in period of
Slide 44: Appendix
APPENDIX
Slide 45: Appendix Contents
APPENDIX CONTENTS • GROUP PERFORMANCE • GROUP INCOME STATEMENT • GROUP BALANCE SHEET • INCOME STATEMENTS BY BUSINESS • IFRS 16 - IMPACT BY BUSINESS • CAPITAL EXPENDITURE • NET BORROWINGS/(CASH) • AUSTRALIAN BALANCE SHEETS • TRADING SPACE • STORE LOCATIONS
Slide 46: Group Performance
GROUP PERFORMANCE Turnover and concession sales R40.3bn +5.7% on LY Adjusted PBT R2.0bn -20.6% on LY Adjusted EBIT R2.8bn -13.7% on LY Adjusted diluted HEPS 169.1cps -19.4% on LY Interim dividend per share 107.0cps -27.7% on LY Free cash flow R0.6bn Net borrowings (excluding lease liabilities) R4.7b
Slide 47: Group Income Statement
GROUP INCOME STATEMENT Dec 2024 Dec 2023 % Rm Rm change Strong Food growth offset by weaker Turnover and concession sales 40 280 38 112 5.7 apparel contribution Gross profit 13 800 13 761 0.3 Higher promotional activity in apparel Adjusted EBITDA 4 483 4 787 (6.4) WSA +2.7%; Group negatively impacte
Slide 48: Group Balance Sheet
GROUP BALANCE SHEET Constant Dec 2024 Dec 2023 currency Rm Rm % change • Investment in capacity and capability, Assets offset by Bourke Street property sale Property, plant and equipment, investment property and intangible assets 16 288 16 768 (0.6) • Includes Absolute Pets brand and goodwill Right-
Slide 49: Woolworths Food Income Statement
Sector-leading sales growth driven by consistent execution of our strategies, delivering further profitable market share gains Dec 2024 Dec 2023 % Rm Rm change Turnover and concession sales 25 515 22 911 11.4 Gross profit margin 24.9% 24.6% Expenses 4 612 4 003 15.2 Adjusted EBIT 1 720 1 595 7.8 Adj
Slide 50: Woolworths Fashion, Beauty and Home Income Statement
Positive turnover growth | aEBIT operating deleverage from gross profit margin dilution Dec 2024 Dec 2023 % Rm Rm change Turnover and concession sales 7 795 7 608 2.5 Gross profit margin 46.3% 48.0% Expenses 2 831 2 708 4.5 Adjusted EBIT 763 927 (17.7) Adjusted PBT 583 738 (21.0) Adjusted EBITDA 1 1
Slide 51: Country Road Group Income Statement
Disappointing result in a constrained and highly promotional environment Dec 2024 Dec 2023 % A$m A$m change Turnover 555.7 592.2 (6.2) Gross profit margin 58.9% 62.1% Expenses 319.1 323.2 (1.3) Adjusted EBIT 14.2 50.2 (71.7) Adjusted PBT 2.5 39.6 (93.7) Adjusted EBITDA 74.5 112.3 (33.7) aEBIT margin
Slide 52: Woolworths Financial Services Income Statement
Positive underlying performance supported by market-leading impairment rate Dec 2024 Dec 2023 % Rm Rm change Average total financial services assets 15 396 15 802 (2.6) % % Income statement to book to book Net interest income 935 12.1 974 12.3 (4.0) Impairment charge 416 5.4 500 6.3 (16.8) Risk-adju
Slide 53: H1 FY25 Group Segmental Income Statement
H1 FY25 GROUP SEGMENTAL INCOME STATEMENT Woolworths Country Road Food FBH Logistics WFS Group Treasury Intragroup Group Dec 2024 Rm Rm Rm Rm Rm Rm Rm Rm Turnover and concession sales 25 515 7 795 374 – 6 596 – – 40 280 Concession sales (555) (157) – – – – – (712) Turnover 24 960 7 638 374 – 6 596 –
Slide 54: H1 FY24 Group Segmental Income Statement
H1 FY24 GROUP SEGMENTAL INCOME STATEMENT Woolworths Country Road Food FBH Logistics WFS Group Treasury Intragroup Group Dec 2023 Rm Rm Rm Rm Rm Rm Rm Rm Turnover and concession sales 22 911 7 608 362 – 7 231 – – 38 112 Concession sales (473) (103) – – – – – (576) Turnover 22 438 7 505 362 – 7 231 –
Slide 55: IFRS 16 – Impact by Segment
IFRS 16 – IMPACT BY SEGMENT* Group WSA CRG Lease liabilities Rm Rm A$m Dec 2023 10 652 6 220 363 Dec 2024 10 074 6 182 344 Average remaining lease term (years): Dec 2023 4.4 6.1 2.2 Average remaining lease term (years): Dec 2024 3.9 4.7 2.2 Average remaining lease term with no options (years): Dec 2
Slide 56: Capital Expenditure
CAPITAL EXPENDITURE Rm Depreciation and amortisation 3 200 R3.0bn % Dec 2024 Dec 2023 change Woolworths (Rm) 580 462 25.5 2 400 Country Road Group (A$m) 21 18 16.7 Pre IFRS 16 (Rm) 827 682 21.3 1 600 R1.5bn R1.6bn Right-of-use assets (Rm) 873 881 (0.9) Total (Rm) 1 700 1 563 8.8 800 – Dec 2023 Dec 2
Slide 57: Net Borrowings/(Cash)
NET BORROWINGS/(CASH) Net borrowings/(cash) Dec 2024 Dec 2023 R7.4bn WHL Net debt (Rm) 4 738 4 105 R4.7bn Interest-bearing debt 8 898 6 915 Net cash and cash equivalents (4 160) (2 810) Unutilised committed facilities – Group 3 906 5 300 WSA Net debt (Rm) 7 368 4 652 Interest-bearing debt 8 084 6 66
Slide 58: Australian Balance Sheets
AUSTRALIAN BALANCE SHEETS Dec 2024 Dec 2023 A$m A$m Country Country Road Osiris Road Osiris Group Holdings Total Group Holdings Total Assets Property, plant and equipment and investment property 114 – 114 132 140 272 Intangible assets* 313 – 313 366 – 366 Right-of-use assets 282 – 282 299 – 299 Inve
Slide 59: Trading Space
TRADING SPACE Projected Projected Projected Dec 2023 % Dec 2024 % Jun 2025 % Jun 2026 % Jun 2027 000m2 change 000m2 change* 000m2 change 000m2 change 000m2 Woolworths Fashion, Beauty and Home 436.9 (2.0) 428.3 (1.8) 423.5 (2.7) 412.2 0.3 413.5 South Africa 390.5 (2.3) 381.4 (2.1) 376.2 (3.6) 362.5 (
Slide 60: Store Locations
STORE LOCATIONS Projected Projected Projected Dec 2023 Growth Dec 2024 Growth* Jun 2025 Growth Jun 2026 Growth Jun 2027 Woolworths Fashion, Beauty and Home 286 6 292 2 292 2 294 11 305 South Africa 221 6 227 1 226 (3) 223 4 227 Rest of Africa 65 – 65 1 66 5 71 7 78 Woolworths Food 485 174 659 27 676
Slide 61: Disclaimer
DISCLAIMER Shareholders are advised that the information in this presentation has not been reviewed and reported on by Woolworths Holdings’ external auditors and it does not constitute a profit forecast. Woolworths Holdings has taken reasonable efforts to ensure the accuracy and completeness of the
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