Woolworths Holdings Limited · JSE:WHL
Woolworths — FY2022 Earnings Presentation
57 slides from Woolworths's earnings presentation, August 2022
Slide 1: Woolworths Holdings Limited Annual Results FY22
WOOLWORT HS HOL DI NG S L I M IT ED A N N UA L R E S U LT S FY22
Slide 2: Presentation Outline
WOOLWORTHS HOLDINGS LIMITED ANNUAL RESULTS 2022 ANALYST PRESENTATION PRESENTATION OUTLINE 01 02 03 OVERVIEW FINANCIAL UPDATE AND OF THE YEAR OVERVIEW OUTLOOK WHL 2 / 2022
Slide 3: Overview of the Year
WOOLWORTHS HOLDINGS LIMITED ANNUAL RESULTS 2022 ANALYST PRESENTATION OVERVIEW OF THE YEAR Roy Bagattini Group CEO WHL 3 / 2022
Slide 4: Overview of the Year
WOOLWORTHS HOLDINGS LIMITED ANNUAL RESULTS 2022 ANALYST PRESENTATION OVERVIEW OF THE YEAR Notable progress strategically, financially and operationally, notwithstanding challenging macros • A year characterised by a tale of two halves • First half negatively impacted by extended lockdowns in Austral
Slide 5: Overview of the Year (cont.)
WOOLWORTHS HOLDINGS LIMITED ANNUAL RESULTS 2022 ANALYST PRESENTATION OVERVIEW OF THE YEAR (CONT.) • Enhanced focus on capital allocation • Healthiest balance sheet since 2014 – reduced debt by R12bn in two years | net cash positive • Repatriation of R1.5bn from David Jones • Dividend payout ratio of
Slide 6: GBJ Highlights
WOOLWORTHS HOLDINGS LIMITED ANNUAL RESULTS 2022 ANALYST PRESENTATION GBJ HIGHLIGHTS GBJ is the way we run our business and is at the heart of everything we do • Retailer firsts: • Publish the list of suppliers that manufacture our apparel products • 100% responsible sourcing in private label product
Slide 7: Our real difference is the passion and commitment of our people
WOOLWORTHS HOLDINGS LIMITED ANNUAL RESULTS 2022 ANALYST PRESENTATION OUR REAL DIFFERENCE IS THE PASSION AND COMMITMENT OF OUR PEOPLE AND PARTNERS, AND THE ONGOING LOYALTY AND TRUST OUR CUSTOMERS HAVE IN US - THANK YOU WHL 7 / 2022
Slide 8: Financial Overview
WOOLWORTHS HOLDINGS LIMITED ANNUAL RESULTS 2022 ANALYST PRESENTATION FINANCIAL OVERVIEW Reeza Isaacs Group Finance Director WHL 8 / 2022
Slide 9: Financial Overview
WOOLWORTHS HOLDINGS LIMITED ANNUAL RESULTS 2022 ANALYST PRESENTATION FINANCIAL OVERVIEW • Full year aPBT up 11.0%, notwithstanding Turnover and concession sales aEBIT H1 lockdowns in Australia • Strong momentum – very pleasing R 87.0 bn R 7.0bn +0.9% on LY +2.6% on LY* H2 result: aEBIT +26%; aPBT +5
Slide 10: Sales Performance
WOOLWORTHS HOLDINGS LIMITED ANNUAL RESULTS 2022 ANALYST PRESENTATION SALES PERFORMANCE Improved momentum across all businesses in H2; Strong Australia rebound post H1 lockdowns South Africa Rm Rm 39 896 FBH 40 000 40 000 4.6 • Strong full-price sales | 6.5 +0.8% Improving product +2.3% 4.2 resonance
Slide 11: H2 EBIT
WOOLWORTHS HOLDINGS LIMITED ANNUAL RESULTS 2022 ANALYST PRESENTATION H2 EBIT H2 aEBIT +26% on LY driven by very pleasing FBH, DJ and CRG performances Rm +26% 4 000 3 787 3 012 3 000 2 000 +0.4% 1 478 1484 +18.6% +66% 1 000 830 +85.5% 60.8 72.1 501 52.5 >100% 28.3 29 79 – Group Woolworths Fashion, Wo
Slide 12: Full Year EBIT
WOOLWORTHS HOLDINGS LIMITED ANNUAL RESULTS 2022 ANALYST PRESENTATION FULL YEAR EBIT Group aEBIT non-comparable to prior year, due to H1 lockdowns and disrupted base Rm +1% 8 000 6 938 7 000 6 000 -4% 4 000 3 009 2 893 +49% -22.3% 2 000 1 610 -0.6% 154.7 1 083 84.2 83.7 120.2 +39% 118 164 – Group Woo
Slide 13: Full Year Normalised EBIT
WOOLWORTHS HOLDINGS LIMITED ANNUAL RESULTS 2022 ANALYST PRESENTATION FULL YEAR NORMALISED EBIT Growth +18%, after adjusting for lockdown-related impacts (JobKeeper, rent relief, etc.) Rm +18% 8 000 7 519 6 385 6 000 4 000 -4% 3 009 2 893 +49% +17.2% +45.2% 2 000 1 610 144.1 107.2 123.0 1 083 +39% 73
Slide 14: Woolworths Fashion, Beauty and Home results
WOOLWORTHS HOLDINGS LIMITED ANNUAL RESULTS 2022 ANALYST PRESENTATION Pleasing earnings recovery with solid progress across all key metrics H2 Full year Full year 2022 H2 2022 2021 % Rm % Rm Rm change Turnover and concession sales 6 853 6.5 13 550 12 860 5.4 Adjusted gross profit margin 48.8% 47.6% 4
Slide 15: Woolworths Food results
WOOLWORTHS HOLDINGS LIMITED ANNUAL RESULTS 2022 ANALYST PRESENTATION aEBIT growth impacted by high base, and investment in strategic initiatives, including online H2 Full year Full year 2022 H2 2022 2021 % Rm % Rm Rm change Turnover and concession sales 20 266 4.6 39 896 38 286 4.2 Adjusted gross pr
Slide 16: Woolworths Financial Services results
WOOLWORTHS HOLDINGS LIMITED ANNUAL RESULTS 2022 ANALYST PRESENTATION Improved performance underpinned by higher demand and strong collections Jun Jun 2022 2021 % Rm Rm change Average total financial services assets 13 181 13 054 1.0 % % Income statement to book to book Interest income 1 854 14.1 1 6
Slide 17: David Jones results
WOOLWORTHS HOLDINGS LIMITED ANNUAL RESULTS 2022 ANALYST PRESENTATION Notwithstanding H1 disruption, focus on trade and cost control drove strong cash generation H2 Full year Full year 2022 H2 2022 2021 % A$m % A$m A$m change Turnover and concession sales 1 085.0 4.3 2 058.1 2 112.1 (2.6) Gross profi
Slide 18: Country Road Group results
WOOLWORTHS HOLDINGS LIMITED ANNUAL RESULTS 2022 ANALYST PRESENTATION Strong performance underpinned by Country Road, Trenery and Politix brands H2 Full year Full year 2022 H2 2022 2021 % A$m % A$m A$m change Turnover 587.7 9.0 1 084.2 1 051.9 3.1 Gross profit margin 59.6% 59.5% 60.8% Expenses 278.3
Slide 19: Capital Expenditure
WOOLWORTHS HOLDINGS LIMITED ANNUAL RESULTS 2022 ANALYST PRESENTATION CAPITAL EXPENDITURE FY23 – FY25 sees an acceleration of investments to drive growth in FBH, Food and Country Road Group, with upweighted focus on digital, data and online Rm Below R3.2bn FY23 Plan 3 200 guidance • c.R10bn Group cap
Slide 20: Group Balance Sheet
WOOLWORTHS HOLDINGS LIMITED ANNUAL RESULTS 2022 ANALYST PRESENTATION GROUP BALANCE SHEET • Improved metrics on lower debt and higher equity position, notwithstanding Net cash Inventory m 229 8.7bn resumption of dividends and share repurchases R R R1.1bn net borrowings LY +1.3% on LY* • Robust balanc
Slide 21: Cash Generation
WOOLWORTHS HOLDINGS LIMITED ANNUAL RESULTS 2022 ANALYST PRESENTATION CASH GENERATION Strong cash generation has enabled a 2.5x increase in dividends, a R1.5bn repurchase of shares, and a further R1.2bn reduction in net gearing – all notwithstanding the disrupted first half Rm 12 000 11 503 99 112 (1
Slide 22: Cash Flow
WOOLWORTHS HOLDINGS LIMITED ANNUAL RESULTS 2022 ANALYST PRESENTATION CASH FLOW Healthy cash generation across all businesses, with a conversion ratio of >100% • Positive working capital movement, supported by ongoing focus on tight Free cash flow by business inventory management Rm 5 000 • Free cash
Slide 23: Headline Earnings and Dividends
WOOLWORTHS HOLDINGS LIMITED ANNUAL RESULTS 2022 ANALYST PRESENTATION HEADLINE EARNINGS AND DIVIDENDS WSA H2 dividend payout ratio increased to 70%, and resumption of dividends in respect of Country Road Group • Final dividend of 149.0cps declared in respect of WSA and CRG second HEPS and DPS half ea
Slide 24: Recent Trading
WOOLWORTHS HOLDINGS LIMITED ANNUAL RESULTS 2022 ANALYST PRESENTATION RECENT TRADING Positive trading momentum across our apparel divisions in first eight weeks of FY23; Food growth in July impacted by loadshedding Rm Rm 39 896 40 000 11.3 40 000 4.6 4.5 South Africa 6.5 +0.8% 30 000 +2.3% 5.4 30 000
Slide 25: Update & Outlook
WOOLWORTHS HOLDINGS LIMITED ANNUAL RESULTS 2022 ANALYST PRESENTATION UPDATE & OUTLOOK Roy Bagattini Group CEO WHL 25 / 2022
Slide 26: Our Strategic Framework - A Reminder
WOOLWORTHS HOLDINGS LIMITED ANNUAL RESULTS 2022 ANALYST PRESENTATION OUR STRATEGIC FRAMEWORK - A REMINDER Our strategic framework leverages our competitive advantages in support of the Group’s overarching growth ambitions H OW TO WI N – STR ATEG I ES TO CAPTU RE G ROW TH O U R STR ATEG I ES LEVE R A
Slide 27: Confident in our clearly defined strategies, focused on execution
WOOLWORTHS HOLDINGS LIMITED ANNUAL RESULTS 2022 ANALYST PRESENTATION WE ARE CONFIDENT IN OUR CLEARLY DEFINED STRATEGIES AND ARE NOW FOCUSED ON EXECUTION WHL 27 / 2022
Slide 28: Top Questions for Management
WOOLWORTHS HOLDINGS LIMITED ANNUAL RESULTS 2022 ANALYST PRESENTATION TOP QUESTIONS FOR MANAGEMENT 1 How does the improving performance of David Jones impact your plans for the business? And 2 Your Food business appears to be underperforming. What are you going to do 3 It appears as if FBH is turning
Slide 29: Unlock and create value in Australia and New Zealand
WOOLWORTHS HOLDINGS LIMITED ANNUAL RESULTS 2022 ANALYST PRESENTATION TOP QUESTIONS FOR MANAGEMENT Unlock and create value in Australia and New Zealand Question How does the improving performance of David Jones impact your 1: plans for the business? And what does this mean for CRG? • Having successfu
Slide 30: Leading and iconic Food business
WOOLWORTHS HOLDINGS LIMITED ANNUAL RESULTS 2022 ANALYST PRESENTATION TOP QUESTIONS FOR MANAGEMENT Leading and iconic Food business Question Your Food business appears to be underperforming. 2: What are you going to do about it? • As a predominantly fresh business, results were adversely and dispropo
Slide 31: Fashion turnaround and growth in Beauty and Home
WOOLWORTHS HOLDINGS LIMITED ANNUAL RESULTS 2022 ANALYST PRESENTATION TOP QUESTIONS FOR MANAGEMENT Fashion turnaround and growth in Beauty and Home Question It appears as if FBH is turning around. Where are you 3: in this process, and what else can we expect to see? • Continue to execute ‘edit to amp
Slide 32: Outlook
WOOLWORTHS HOLDINGS LIMITED ANNUAL RESULTS 2022 ANALYST PRESENTATION OUTLOOK We have a robust balance sheet and self-driven opportunities to drive revenue and profit across our business and are allocating capital accordingly • Global macro outlook remains challenging • Australian consumers stand to
Slide 33: Appendix
WOOLWORTHS HOLDINGS LIMITED ANNUAL RESULTS 2022 ANALYST PRESENTATION APPENDIX WHL 33 / 2022
Slide 34: Focus Areas for FY23
WOOLWORTHS HOLDINGS LIMITED ANNUAL RESULTS 2022 ANALYST PRESENTATION FOCUS AREAS FOR FY23 We expect to continue making demonstrable progress against our strategic initiatives, to deliver on our commitments to you 1. Evaluate all options iro David Jones to unlock value for WHL and its shareholders; c
Slide 35: Unlock and Create Value in Australia and New Zealand
WOOLWORTHS HOLDINGS LIMITED ANNUAL RESULTS 2022 ANALYST PRESENTATION U N LOC K AN D C REATE VALU E I N AUSTR ALIA AN D N EW ZEAL AN D STRATEGIC OBJECTIVE: Improve the underlying operational and financial health of David Jones and drive the refreshed CRG growth ambition STRATEGIC INITIATIVES: • Conti
Slide 36: Fashion Turnaround and Growth in Beauty and Home
WOOLWORTHS HOLDINGS LIMITED ANNUAL RESULTS 2022 ANALYST PRESENTATION FAS H I O N TU RNARO U N D AN D G ROW TH I N BEAUT Y AN D H OME STRATEGIC OBJECTIVE: Restore the underlying financial health of our Fashion business whilst growing profitable market share in Beauty and Home STRATEGIC INITIATIVES: •
Slide 37: Leading and Iconic Food Business
WOOLWORTHS HOLDINGS LIMITED ANNUAL RESULTS 2022 ANALYST PRESENTATION LEAD I N G AN D I CO N I C FOO D BUS I N ESS STRATEGIC OBJECTIVE: Reset our momentum and further expand our leadership position, by leveraging our foundation and fundamentals to aggressively grow our core STRATEGIC INITIATIVES: • A
Slide 38: Data-Driven Decision-Making
WOOLWORTHS HOLDINGS LIMITED ANNUAL RESULTS 2022 ANALYST PRESENTATION DATA- D RIVE N D EC IS I O N -M AKI N G STRATEGIC OBJECTIVE: Drive differentiation across our Group by re-prioritising operational and capital spend towards digital and data transformation STRATEGIC INITIATIVES: • Expand scope of a
Slide 39: Elevated Omni-Channel Customer Experience
WOOLWORTHS HOLDINGS LIMITED ANNUAL RESULTS 2022 ANALYST PRESENTATION E LEVATE D OMN I - C HAN N E L CUSTOME R EXPE RI E N C E STRATEGIC OBJECTIVE: Fast-track improving our online capability and capacity to provide customers with a seamless, quality shopping experience regardless of channel STRATEGIC
Slide 40: People and Leadership
WOOLWORTHS HOLDINGS LIMITED ANNUAL RESULTS 2022 ANALYST PRESENTATION PEO PLE AN D LEAD E RS H I P STRATEGIC OBJECTIVE: Up-weight focus on compelling Employee Value Proposition (EVP) STRATEGIC INITIATIVES: • Leverage new operating model and leadership structure in WSA, driving greater flexibility, ag
Slide 41: Good Business Journey
WOOLWORTHS HOLDINGS LIMITED ANNUAL RESULTS 2022 ANALYST PRESENTATION GOO D BUS I N ESS J O U RN EY STRATEGIC OBJECTIVE: Double down on our vision of being one of the world’s most responsible retailers, as well as our purpose of adding quality to life STRATEGIC INITIATIVES: • Achieve sustainability t
Slide 42: Our Good Business Journey: looking back on 2022
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Slide 43: Our Good Business Journey
WOOLWORTHS HOLDINGS LIMITED ANNUAL RESULTS 2022 ANALYST PRESENTATION Woolworths Woolworths Woolworths Holdings Holdings isHoldings on is a on journey is a on journey atowards journey towards atowards more a more sustainable a more sustainable sustainable SS ESS JOURNEY JOURNEY JOURNEY future. future
Slide 44: Appendix Contents
WOOLWORTHS HOLDINGS LIMITED ANNUAL RESULTS 2022 ANALYST PRESENTATION APPENDIX CONTENTS 1. GROUP PERFORMANCE 2. GROUP AND SEGMENTAL INCOME STATEMENTS 3. GROUP BALANCE SHEET 4. NET (CASH)/BORROWINGS 5. IFRS 16 – IMPACT BY SEGMENT 6. CAPITAL EXPENDITURE 7. AUSTRALIAN BALANCE SHEETS 8. TRADING SPACE 9.
Slide 45: Group Performance
WOOLWORTHS HOLDINGS LIMITED ANNUAL RESULTS 2022 ANALYST PRESENTATION GROUP PERFORMANCE H1 H2 FY Turnover and concession sales -2.1 % +4.9 % +1.4% to R42.1bn to R44.9bn to R87.0bn Adjusted profit before tax -16.9 % +50.0 % +11.0% to R2.2bn to R2.9bn to R5.1bn Adjusted EBIT -18.2 % +25.7 % +0.9% to R3
Slide 46: Group Income Statement
WOOLWORTHS HOLDINGS LIMITED ANNUAL RESULTS 2022 ANALYST PRESENTATION GROUP INCOME STATEMENT Jun 2022 Jun 2021 % Rm Rm change Turnover and concession sales 87 020 85 857 1.4 Adjusted gross profit 29 255 28 947 1.1 Adjusted EBITDA 11 441 11 674 (2.0) Adjusted EBIT 7 000 6 938 0.9 Borrowing costs 55% l
Slide 47: 2022 Group Segmental Income Statement
WOOLWORTHS HOLDINGS LIMITED ANNUAL RESULTS 2022 ANALYST PRESENTATION 2022 GROUP SEGMENTAL INCOME STATEMENT Woolworths Country David Road FBH Food Logistics WFS Jones Group Treasury Intragroup Group Jun 2022 Rm Rm Rm Rm Rm Rm Rm Rm Rm Turnover and concession sales 13 550 39 896 637 – 22 776 11 983 –
Slide 48: 2021 Group Segmental Income Statement
WOOLWORTHS HOLDINGS LIMITED ANNUAL RESULTS 2022 ANALYST PRESENTATION 2021 GROUP SEGMENTAL INCOME STATEMENT Woolworths Country David Road FBH Food Logistics WFS Jones Group Treasury Intragroup Group Jun 2021 Rm Rm Rm Rm Rm Rm Rm Rm Rm Turnover and concession sales 12 860 38 286 574 – 24 147 12 022 –
Slide 49: Group Balance Sheet
WOOLWORTHS HOLDINGS LIMITED ANNUAL RESULTS 2022 ANALYST PRESENTATION GROUP BALANCE SHEET Strong balance sheet with improvement in key debt and other financial metrics Constant Jun 2022 Jun 2021 currency Rm Rm % change Assets Property, plant and equipment 9 190 9 315 (2.7) Intangible assets 7 451 7 1
Slide 50: Net (Cash)/Borrowings
WOOLWORTHS HOLDINGS LIMITED ANNUAL RESULTS 2022 ANALYST PRESENTATION NET (CASH)/BORROWINGS Jun 2022 Jun 2021 Net (cash)/borrowings WHL Net (cash)/debt (Rm) (229) 1 056 R4.9bn R3.5bn Interest-bearing debt 5 112 6 540 Net cash and cash equivalents (5 341) (5 484) Unutilised committed facilities – Grou
Slide 51: IFRS 16 - Impact by Segment
WOOLWORTHS HOLDINGS LIMITED ANNUAL RESULTS 2022 ANALYST PRESENTATION IFRS 16 – IMPACT BY SEGMENT Group WSA DJ CRG Lease liabilities Rm Rm A$m A$m Jun 2021 27 194 6 055 1 571 399 Jun 2022 26 784 5 994 1 559 338 Average remaining lease term (years): Jun 2021 5.3 6.3 14.9 2.6 Average remaining lease te
Slide 52: Capital Expenditure
WOOLWORTHS HOLDINGS LIMITED ANNUAL RESULTS 2022 ANALYST PRESENTATION CAPITAL EXPENDITURE Rm Depreciation and amortisation R3.2bn 3 200 % Jun 2022 Jun 2021 change Woolworths (Rm) 965 960 0.5 2 400 David Jones (A$m) 56 64 (12.5) Country Road Group (A$m) 27 33 (18.2) R1.9bn Group pre IFRS 16 (Rm) 1 884
Slide 53: Australian Balance Sheets
WOOLWORTHS HOLDINGS LIMITED ANNUAL RESULTS 2022 ANALYST PRESENTATION AUSTRALIAN BALANCE SHEETS Jun 2022 Jun 2021 A$m A$m Country Country David Road David Road Jones Group Total Jones Group Total Assets Property, plant and equipment 396 92 488 418 97 515 Intangible assets 1 & 2 51 357 408 87 362 449
Slide 54: Trading Space
WOOLWORTHS HOLDINGS LIMITED ANNUAL RESULTS 2022 ANALYST PRESENTATION TRADING SPACE Projected Projected Projected Jun 2021 % Jun 2022 % Jun 2023 % Jun 2024 % Jun 2025 000m2 growth 000m2 growth 000m2 growth 000m2 growth 000m2 Woolworths Fashion, Beauty and Home* 453 (4.5) 433 (1.2) 428 (1.6) 421 0.7 4
Slide 55: Store Locations
WOOLWORTHS HOLDINGS LIMITED ANNUAL RESULTS 2022 ANALYST PRESENTATION STORE LOCATIONS Projected Projected Projected Jun 2021 Growth Jun 2022 Growth Jun 2023 Growth Jun 2024 Growth Jun 2025 Woolworths Fashion, Beauty and Home 267 (10) 257 23 280 13 293 14 307 South Africa 202 (8) 194 21 215 14 229 15
Slide 56: Disclaimer
WOOLWORTHS HOLDINGS LIMITED ANNUAL RESULTS 2022 ANALYST PRESENTATION 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 tak
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