Slide 1: ASX Release – 2022 Full Year Results Presentation Correction
ASX Release For personal use only 24 August 2022 Coles Group Limited – 2022 Full Year Results Presentation – Correction Coles Group Limited (Coles, ASX: COL) released its 2022 Full Year Results Presentation today. Three typographical errors have been identified and are corrected in the updated 2022
Slide 2: 2022 Full Year Results Presentation
For personal use only Coles, with its customers and its pork suppliers, raised more than $8.6 million for FightMND to help fund research and treatments for Motor Neurone Disease. Pictured: FightMND founder Neale Daniher and Coles team members at the MCG. 2022 Full Year Results Presentation 24 August
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 ro) mialcm(elare, We recognise their strength and resilience and pay our respects to their Elders past and present. oe0eo, °° Coles extends that respect to all Aboriginal and Torres Strait Islander people, and recognises their rich cultures and
Slide 5: FY22 highlights
FY22 highlights For personal use only Third year of strategy execution delivers solid Supermarkets result despite COVID-19 headwinds and flood disruptions Continued focus on delivering trusted value for customers and innovation with >1,300 Coles Own Brand and >170 Exclusive Liquor Brand products lau
Slide 6: FY22 financial highlights
FY22 financial highlights Third year of strategy execution delivers solid Supermarkets sales and earnings despite significant COVID-19 and flood disruptions For personal use only Total sales revenue EBIT2 Net profit after tax $39.4bn $1,869m $1,048m 2.0% vs. pcp (0.2)% vs. pcp 4.3% vs. pcp 12.4% vs.
Slide 7: Coles investment proposition
Coles investment proposition Strong industry fundamentals and operating model For personal use only Industry Operating model Resilient and growing markets • Demonstrated ability to maintain a leading market position despite continuous market disruption and disrupters Consistent growth throughout eco
Slide 8: Coles investment proposition
Coles investment proposition Strength of operating model demonstrated during COVID-19 and flood disruptions For personal use only Strong cash flow generation and Consistent delivery of solid industry-leading payout ratio financial performance Operating cash flow and Basic earnings per share and Grou
Slide 9: Sustainable Strategy: Winning together in our second century
Sustainable Strategy: Winning together in our second century Our vision is to become the most trusted retailer in Australia and grow long-term shareholder value For personal use only Our values Our behaviours Our purpose Customer Passion and Health and Energise Deliver with Responsibility Look ahead
Slide 10: Sustainable Strategy: Winning together in our second century
Sustainable Strategy: Winning together in our second century Our five strategic differentiators define our priorities For personal use only • Unified customer experience through website Win in food and drink with a unique enhancements and increased investment in Ocado for omnichannel offering FY24 l
Slide 11: Progress against strategy: Inspire Customers
Progress against strategy: Inspire Customers Focused on delivering trusted value to customers and a unique omnichannel offering For personal use only ▪ Differentiating through our product ranges ▪ Extensive Exclusive to Coles range and Exclusive Liquor Brand ▪ Innovation underpinned by launch of >1,
Slide 12: Progress against strategy: Smarter Selling
Progress against strategy: Smarter Selling Delivered Smarter Selling benefits of ~$230 million in FY22, on track to deliver our four year program of $1bn of benefits by end of FY23 For personal use only ▪ Enhancements in process, technology and data driven insights delivering efficiency ▪ Service tr
Slide 13: Progress against strategy: Win Together
Progress against strategy: Win Together Sustainability achievements For personal use only Safer choices together Great place to work Together to Zero Better Together We are committed to providing We are passionate about being We have set ambitions and We seek to work together with a safe working and
Slide 14: Update on Witron and Ocado transformation projects
Update on Witron and Ocado transformation projects Significant progress continues with ~75% of total capex forecast to be invested by the end of FY23 For personal use only Witron Ocado • Seamless digital customer • Safer working environments with experience improved service at a lower cost • Improve
Slide 15: Update on Witron and Ocado transformation projects
Update on Witron and Ocado transformation projects Net EBIT benefits from Witron are expected to commence in FY25, sales benefits from Ocado are expected from FY24 For personal use only FY23 FY24 ($m) ($m) Project implementation opex1,2 ~(115) ~(135) Depreciation ~(25) ~(85) EBIT impact ~(140) ~(220
Slide 16: Coles' strategy tracker
Coles’ strategy tracker For personal use only KPIs Progress Reduced safety TRIFR • 14.7% reduction in TRIFR compared to FY21 Increased team member • Improved team member engagement by 3 ppts engagement Improved customer • NPS declined by 3.6 points, impacted by availability challenges during the sat
Slide 17: Group financial overview
For personal use only Coles helped lower the cost of living for customers with an Exclusive to Coles range of almost 6,000 products. Group financial overview
Slide 18: FY22 results – Group
FY22 results – Group Sales revenue growth of 2.0% and net profit after tax growth of 4.3% For personal use only $m FY22 FY21 Change Sales revenue1 39,369 38,585 2.0% EBITDA2 3,440 3,432 0.2% EBIT2 1,869 1,873 (0.2)% EBIT margin % 4.7 4.9 (11bps) Net profit after tax 1,048 1,005 4.3% Basic earnings p
Slide 19: FY22 results – segment financials
FY22 results – segment financials Sales revenue growth in Supermarkets and Liquor For personal use only $m FY22 FY21 Change 3-yr change1 Sales revenue Supermarkets2 34,624 33,868 2.2% 12.0% Liquor 3,613 3,525 2.5% 18.0% Express 1,132 1,192 (5.0)% 8.1% Group sales revenue 39,369 38,585 2.0% 12.4% EBI
Slide 20: Operating cash flow
Operating cash flow Strong cash realisation of 104% For personal use only Cash flow Comments • Working capital movement reflects higher trade $m FY22 FY21 payables given timing of year end (26 June), partly offset by increased year end inventories to support EBIT 1,869 1,873 product availability • L
Slide 21: Capital expenditure
Capital expenditure Capital expenditure driven by Witron transformation project, delivery of Supermarkets and Liquor store renewal and new space programs, as well as eCommerce and IT initiatives For personal use only Capital expenditure breakdown FY22 key capital expenditure initiatives Store renewa
Slide 22: Balance sheet
Balance sheet Significant balance sheet capacity provides flexibility for future growth For personal use only Balance sheet summary Comments 26 Jun 2 Jan 27 Jun • Property, plant and equipment $m 2022 2022 2021 increased due to increased capital Inventories 2,448 2,387 2,107 expenditure Trade and ot
Slide 23: Capital management
Capital management Sustainability Linked Loans established to support our ambition to be Australia’s most sustainable supermarket For personal use only Debt facility maturity profile ($m) Funding and liquidity Bank facilities AMTN SLL Bank facilities • Weighted average drawn down debt maturity of 6.
Slide 24: Supermarkets
For personal use only Customer packing benches were rolled out to more than 400 stores during the year, enabling greater customer choice while eCommerce capacity was increased through the expansion of Click & Collect to more than 700 stores. Supermarkets
Slide 25: Supermarkets key metrics
Supermarkets key metrics Successful execution of trade plans, value campaigns and eCommerce For personal use only Total sales revenue1 Comp sales growth^ Sales per sqm^ $34.6bn 2.6% $18,209 +2.2% vs. pcp vs. pcp +2.0% vs. pcp +12.0% vs. 3YOY2 Exclusive to Coles eCommerce sales1,3 Store renewals sale
Slide 26: Supermarkets FY22 results
Supermarkets FY22 results Solid EBIT despite increased COVID-19 and transformation project costs For personal use only FY22 results Key commentary $m FY22 FY21 Change Key P&L items • Sales revenue growth driven by the successful execution of trade plans and Sales revenue1 34,624 33,868 2.2% customer
Slide 27: Liquor
For personal use only Liquor launched a 100% recyclable eco-bottle wine range, reducing carbon emissions and saving energy in production and recycling (left) the Exclusive Liquor Brand portfolio won more than 420 awards during the year, including a Gold medal for VIVIR Tequila at the Melbourne Inter
Slide 28: Liquor key metrics
Liquor key metrics Sales growth driven by Liquorland with strong trading across the year For personal use only Total sales revenue Comp sales growth^ eCommerce sales2 $3.6bn +2.5% vs. pcp 2.1% +49.1% +18.0% vs. 3YOY1 vs. pcp vs. pcp Exclusive Liquor Liquor renewals Number of stores Brand (ELB) More
Slide 29: Liquor FY22 results
Liquor FY22 results Trusted value delivered through lowering prices for longer For personal use only FY22 results Key commentary $m FY22 FY21 Change Key P&L items • Sales revenue growth delivered as a result of solid trading across the year, Sales revenue 3,613 3,525 2.5% also impacted by the closur
Slide 30: Express
For personal use only Coles Express customers and team members raised more than $4.1 million for Redkite to help families affected by childhood cancer. Express
Slide 31: Express key metrics
Express key metrics C-store sales and EBIT impacted by reduced mobility due to the Omicron variant and floods, and elevated fuel prices For personal use only Total sales revenue Comp sales growth^ EBIT $1.1bn (5.0)% vs. pcp (3.9)% $42m +8.1% vs. 3YOY1 vs. pcp (37.3)% vs. pcp FY22 weekly fuel Comp fu
Slide 32: Express FY22 results
Express FY22 results C-store sales (ex-tobacco) grew by 0.9% with strong growth in food-to-go For personal use only FY22 results Key commentary $m FY22 FY21 Change Key P&L items • C-store sales growth negatively impacted by lower forecourt traffic due C-store sale revenue 1,132 1,192 (5.0)% to lockd
Slide 33: Current market environment
For personal use only Dual 2020 Tokyo Paralympic medallist Jaryd Clifford, inspiring the next generation of athletes though Coles’ partnership with Little Athletics Australia. Current market environment
Slide 34: Current market environment
Current market environment Whilst Coles is well positioned in a market facing macro-economic challenges, there are a number of factors that will impact earnings For personal use only Earnings Environment Coles response impact • Investing in trusted value for customers through: • Increasing number of
Slide 35: Outlook
For personal use only An electric-powered truck delivers supplies as part of a trial with transport partner Linfox Logistics. The Fuso eCanter truck is powered entirely by 100% renewable electricity. Outlook
Slide 36: Outlook
Outlook With increasing inflation For personal use only and rising interest rates • Sales cycling COVID-19 lockdowns in 1H22 and price inflation in 2H22 placing pressure on • In July, there have been a range of factors contributing to cost price inflation many households, Coles • Produce - recent fl
Slide 37: Q&A
For personal use only The Pride@Coles team member network continues to grow, championing LGBTQI+ inclusion in the workplace and beyond. Q&A