Slide 1: Woolworths Group Limited Half-Year Results FY18
Woolworths Group Limited ABN 88 000 014 675 H A L F - Y E A R R E S U LT S F Y 1 8 1
Slide 2: Table of contents
Table of contents Key highlights and progress..................................................................................................3 Brad Banducci Financial results .....................................................................................................................7 Davi
Slide 3: Key highlights
Key highlights Voice of Customer (VOC) scores continue to improve across the Woolworths Group with all businesses improving their customer experience Continued improvement in customer metrics driving sales growth with Group sales from continuing operations up 3.8%, with Australian Food sales +4.9% a
Slide 4: Woolworths Group FY18 priorities
Woolworths Group FY18 priorities 6 CUSTOMER 1ST Create competitive TEAM AND CULTURE advantage across Woolworths Group CONNECTED, PERSONALISED AND CONVENIENT 5 SHOPPING EXPERIENCES IN FOOD AND DRINKS Create differentiated TRANSFORM EVOLVE UNLOCK VALUE customer propositions 2 AUS AND 3 OUR DRINKS 4 IN
Slide 5: Progress against our key priorities
Progress against our key priorities Customer 1st team and Connected, personalised & Transform Australian and culture convenient shopping experiences New Zealand Food • Increasing VOC scores across the Group • Material improvements in woolworths.com.au site • In Australian Food, VOC scores improved a
Slide 6: Table of contents
Table of contents Key highlights and progress ................................................................................................. 3 Brad Banducci Financial results .....................................................................................................................7 Dav
Slide 7: Financial Results
Financial Results WOooLwortTHs GROUP
Slide 8: Results – Half-year 2018
Results – Half-year 2018 Continuing Operations Total Group Change Change Sales 29.8bn 3.8% 32.3bn 0.9% EBIT 1,430m 9.9% 1,552m 23.4% NPAT attributable to 902m 14.7% 969m 37.6% shareholders of Woolworths Earnings per share 69.7¢ 13.7% 74.9¢ 32.4% Dividend per share 43¢ 26.5% Return on average funds 2
Slide 9: Group EBIT
Group EBIT $m HY18 HY17 Change Continuing operations Australian Food 901 812 11.1% Endeavour Drinks 310 302 2.5% New Zealand Food (AUD) 138 155 (11.1)% New Zealand Food (NZD) 150 163 (7.7)% BIG W (10) (27) (64.4)% Hotels 163 139 17.1% Central overheads (72) (80) (9.4)% EBIT continuing operations 1,4
Slide 10: Key balance sheet metrics continuing to improve
Key balance sheet metrics continuing to improve Average inventory days ROFE Days Percentage Continuing operations Continuing operations Group Continuing operations – lease adjusted 41.6 41.3 40.7 40.6 40.4 24.0 39.7 20.8 39.4 39.3 38.2 13.8 12.6 36.6 HY14 HY15 HY16 HY17 HY18 HY17 HY18 Average invent
Slide 11: Cash realisation and free cash flow remain strong
Cash realisation and free cash flow remain strong Cash flow summary $m HY18 HY17 Change Operating activities before interest and tax 2,406 2,758 (12.7)% Interest and tax (431) (562) (23.3)% Operating activities 1,975 2,196 (10.1)% Investing activities (605) (386) 56.9% Free cash flow before dividend
Slide 12: Higher operating capex driven by increased store renewals, IT and digital investment
Higher operating capex driven by increased store renewals, IT and digital investment $m HY18 HY17 Continuing operations Operating capex 770 606 Property development 107 107 Gross capex 877 713 Property sales (24) (162) Net capex 853 551 Discontinued operations – Home Improvement* (12) (6) Discontinu
Slide 13: Capital management
Capital management Interim Final Interim payout (RHS) Dividend and Dividend Reinvestment Plan Payout (%) 100 80 Cents 75 80 • Fully franked FY18 interim dividend of 43 cents per 70 share – up 26% on prior year 60 33 65 0 • DRP discount of 1.5% retained for FY18 interim 60 50 40 55 dividend, but will
Slide 14: Table of contents
Table of contents Key highlights and progress…............ ................................................................................... 3 Brad Banducci Financial results .....................................................................................................................7 Davi
Slide 15: Business Update
Business Update WOooLwortTHs GROUP
Slide 16: Australian Food
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Slide 17: Australian Food
Australian Food HY18 HY17 Change Sales ($m) 19,339 18,440 4.9% EBITDA ($m) 1,207 1,096 10.3% EBIT ($m) 901 812 11.1% Gross margin (%) 28.8 28.3 55bps Cost of doing business (%) 24.2 23.9 29bps EBIT to sales (%) 4.7 4.4 26bps Sales per square metre ($) 16,259 15,715 3.5% ROFE (%) 199 152 47pts HALF-Y
Slide 18: Our FY18 strategy: From turnaround to transformation
Our FY18 strategy: From turnaround to transformation 6 CUSTOMER 1ST TEAM AND CULTURE Scale-up the future ACCELERATE RENEWAL AND EXTEND 5 APPROACH TO ONLINE AND METRO Extend core PRICES I TRUST CONSISTENTLY FAMOUS customer offer 2 ON PRODUCTS 3 GREAT SHOPPING 4 FOR FRESH I WANT EXPERIENCE Excel on th
Slide 19: Progress highlights
Progress highlights Create the • Record customer satisfaction levels with Overall Customer Satisfaction (including Online) reaching 82% and December store-controllable VOC of 84%, up from 80% a year ago future • Opened net 10 new Woolworths Supermarkets and 3 Metro stores, 37 Renewals and 35 Upgrade
Slide 20: Customer highlights
Customer highlights Overall Satisfaction – Store & Online Store-Controllable VOC % customers satisfied, 6 or 7 out of 7 % customers satisfied, 6 or 7 out of 7 90 +4 90 +4 82 85 84 78 80 75 0 0 Dec-16 Dec-17 Dec-16 Dec-17 Fruit & Vegetables Product Availability Ease of Collection (Pick Up) 90 90 90 +
Slide 21: Sales highlights
Sales highlights Australian Food sales Comp transaction growth (% year on year) (% year on year) 5.2 4.6 4.4 4.1 Q3* Q4* Q1 Q2 6.8 FY17 FY18 5.3 5.1 4.7 Comp items per basket growth (% year on year) Q3* Q4* Q1 Q2 FY17 FY18 1.4 0.6 0.6 Comp 0.4 Sales 4.3 6.5 4.9 5.0 (%) Q3* Q4* Q1 Q2 FY17 FY18 * Adju
Slide 22: Renewal highlights
Renewal highlights Renewal progress Key metrics • We are in the second year of our five year • Performing strongly on sales, in line with expectations plan with 29% of our fleet renewed in the • Customer growth +7%pts first 18 months • Renewal Overall Customer Satisfaction +8%pts • 146 Renewals comp
Slide 23: WooliesX highlights
WooliesX highlights Building internal Extended our Rolled-out Pick digital and data Rewards up to all 1000+ capabilities to Personalisation Australian Food deliver customer Engine into sites with high benefits faster and woolworths.com.au VOC satisfaction differentiate and BWS Three Customer Launche
Slide 24: Endeavour Drinks
HALF-YEAR RESULTS FY18 24
Slide 25: Endeavour Drinks
Endeavour Drinks HY18 HY17 Change Sales ($m) 4,529 4,319 4.8% EBITDA ($m) 350 340 2.7% EBIT ($m) 310 302 2.5%1 Gross margin (%) 23.0 23.1 (13)bps Cost of doing business (%) 16.1 16.1 3bps EBIT to sales (%) 6.8 7.0 (16)bps2 Sales per square metre ($) 18,219 18,005 1.2% ROFE (%) 17.6 16.7 98bps 1 Norm
Slide 26: Dan Murphy's highlights
Dan Murphy’s highlights H1’18 highlights 6 Six net new Awarded ‘Online 2.8m Launched new Focus on Record stores opened, Liquor Store My Dan drive through in-store VOC bringing total of the Year’ by Murphy’s Pick up model experience score fleet to 225 Liquor Stores Members (refurbished 18) Associatio
Slide 27: BWS highlights
BWS highlights H1’18 highlights 17 17 net new Express and Partnering with Successful Continued Record store openings Scheduled Australian brand refresh strength VOC score taking BWS Delivery from over Supermarkets in Team above 1,300 300 stores covering and Woolworths Engagement stores major Metro a
Slide 28: New Zealand Food
HALF-YEAR RESULTS FY18 28
Slide 29: New Zealand Food
New Zealand Food HY18 HY17 Change Sales ($m) 3,317 3,203 3.6% EBITDA ($m) 216 223 (3.1)% EBIT ($m) 150 163 (7.7)% Gross margin (%) 24.0 24.0 6bps Cost of doing business (%) 19.5 18.9 62bps EBIT to sales (%) 4.5 5.1 (56)bps Sales per square metre ($) 15,228 14,960 1.8% ROFE (%) 9.9 10.1 (19)bps HALF-
Slide 30: New Zealand Food highlights
New Zealand Food highlights H1’18 highlights Core sales growth Customer perception Service investment Driving online Overall VOC • Improved on-shelf • Pick up and delivery +3.0% Overall Customer Satisfaction product availability • Improved service capacity expansion • Lower Pick up and perceptions d
Slide 31: BIG W
HALF-YEAR RESULTS FY18 31
Slide 32: BIG W
BIG W HY18 HY17 Change Sales ($m) 2,037 2,015 1.1% EBITDA ($m) 29 13 122.1% LBIT ($m) (10) (27) (64.4)% Gross margin (%) 31.8 32.1 (30)bps Cost of doing business (%) 32.2 33.4 (117)bps LBIT to sales (%) (0.5) (1.4) 88bps Sales per square metre ($) 3,366 3,413 (1.4)% ROFE (%) (30.6) (21.7) (9)pts HAL
Slide 33: BIG W highlights
BIG W highlights H1’18 highlights H2’18 focus • Turnaround on track – Customer 1st • Improve our VOC scores • Making progress on our priorities: • Keep investing in price for customer Prices down across range • Grow digital offer – range, convenience • Sales improved, transactions and units up • Eng
Slide 34: ALH Hotels
HALF-YEAR RESULTS FY18 34
Slide 35: ALH Hotels
ALH Hotels HY18 HY17 Change Sales ($m) 861 829 4.0% EBIT ($m) 163 139 17.1% Gross margin (%) 84.3 82.5 178bps Cost of doing business (%) 65.4 65.7 (34)bps EBIT to sales (%) 18.9 16.8 212bps • Sales growth in all key areas of the business driving strong EBIT improvement HALF-YEAR RESULTS FY18 35
Slide 36: Table of contents
Table of contents Key highlights and progress…............ ................................................................................... 3 Brad Banducci Financial results .....................................................................................................................7 Davi
Slide 37: Outlook
Outlook • Focus on transforming our business will continue to be the emphasis for the H2’18 and FY19. Our goal is to deliver a consistently good experience for both our customers and team and leverage end-to-end process redesign and technology to improve underlying productivity • Australian Food wil
Slide 38: Woolworths Group Purpose
Woolworths Group Purpose H A L F - Y E A R R E S U L TS F Y 1 8 38
Slide 39: Thank you
a») Thank you WOooLwortTHs GROUP
Slide 40: Glossary
Glossary Cash realisation ratio Operating cash flow as a percentage of group net profit after tax before depreciation and amortisation Comparable sales Measure of sales which excludes stores that have been opened or closed in the last 12 months and demonstrable impact on existing stores from store d
Slide 41: Glossary
Glossary Other non-IFRS measures used in describing the business performance include: • Earnings before interest, tax, depreciation and amortisation (EBITDA) • Earnings before interest, tax, depreciation, amortisation and rent (EBITDAR) • Cash flow from operating activities before interest and tax •
Slide 42: Disclaimer
Disclaimer This presentation contains summary information about Woolworths Group Limited (Woolworths) and its activities current as at the date of this presentation. It should be read in conjunction with Woolworths’ other periodic and continuous disclosure announcements filed with the Australian Sec