Wesfarmers Limited · ASX:WES
Wesfarmers — Investor Presentation (March 2007)
48 slides from Wesfarmers's investor presentation, Mar 2, 2007
Slide 1: Wesfarmers
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Slide 2: Wesfarmers
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Slide 3: Satisfactory returns to shareholders
Satisfactory returns to shareholders Enhance the performance of existing businesses run our businesses at “best practice” Expand existing businesses as opportunities allow Manage the portfolio and balance sheet in order to enhance shareholder value Pursue sustainability in both financial and non-fin
Slide 4: Satisfactory returns to shareholders
Satisfactory returns to shareholders ee pean ee peer Ly a aa 7 a lone Lo — 7 CE a) el y alsa Ah A ee i ae wy ves Lo LDL Lo ‘Capital Projects Curragh North Kwinana AN2 Kwinana LNG Bunnings rollout Acquisitions OAMPS Linde Aust. (Coregas) Crombie Lockwood
Slide 5: Investment continues to exceed depreciation
Investment continues to exceed depreciation ASm 2250 2000 - 1750 - 1500 - 1250 1000 - 750 5 500 5 250 5 a Log bt 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 O7E Od Wm, Capital Expenditure Acquisitions omme Depreciation
Slide 6: Sustainability
Sustainability * Financial performance ¢ Safe and rewarding workplaces * Good value products and services ¢ Respect for customers and suppliers * Environmental responsibility * Ethical dealings * Community contribution Od
Slide 7: Sustainability
Sustainability Sustainability reporting Social Responsibility Report since 1998/99 Climate Change Three divisions are members of Greenhouse Challenge Plus, a voluntary emissions reduction programme Wesfarmers took part in the 2006 Carbon Disclosure Project (www.edorole at) > Coal operations are cont
Slide 8: Management Team
Management Team Managing Director & CEO Richard Goyder Finance Director Gene Tilbrook John Gillam Stewart Butel Bob Buckley* Terry Bowen Keith Gordon Tim Bult * Rob Scott from 1 July 2007 4¢ ep
Slide 9: Group results
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Slide 10: Financial Performance
Financial Performance ND yuma Rm emmmm way Ul di: a Ay i A _ CCl oe We Us a oy 31 De y Wi) uy Ae "Operating re revenue 4,718.1 4471 6.1 EBITDA 790.6 829.6 EBIT 612.9 707.1 Net profit after tax 391.9 446.7 Operating cash flow 477.4 435.3 105.8 Earnings per share (ex. employee res. shares) Earnings pe
Slide 11: Cash Flow & Dividend (Half Year to Dec)
Cash Flow & Dividend (Half Year to 31 Dec (earnings, operating cash flow and dividend per share) cents per share 140 120 100 80 60 40 20 0 # EPS and Cash flow exclude sale of Landmark VG Va Z 2003* 2004 @ Operating Cashflow* lg Va ye, 2006 Dividend * Based on WANOS including employee reserved shares
Slide 12: Divisional EBIT (Half Year to Dec)
Divisional EBIT (Half Year to 31 Dec ASm 800 700 600 500 400 300 200 100 2005 2006 m Home Improvement im Coal @ Insurance @ industrial & Safety Chemicals & Fertilisers @ Energy ™@ Other oe 12
Slide 13: Divisional ROC & Capital employed
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Slide 14: Return on Shareholders' Funds
Return on Shareholders’ Funds (rolling 12 months to 31 December*) 35 30 25 20 15 10 % atl 4 Lo womens a gen Us 7 a yy a —— Ly a a — gy 7 # 2003 AGAAP* 2004 tm A-IFRS *Based on average monthly equity balances (previously based on average opening and closing) _ Lc ey _. 7 . va Le ie — 7 7 yo | 7 7 - L
Slide 15: Bunnings
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Slide 16: Home Improvement
Home Improvement iio TTT ——iiiT WIDEST RANGE LOWEST PRICES BEST SERVICE «04
Slide 17: Home Improvement Store Network
Home Improvement Store Network As at end February 2007 _ZUNNINGS MM 149 Bunnings Warehouse stores 68 Bunnings small format stores (| 3 HouseWorks stores Excludes distribution centres and trade operational sites «04
Slide 18: Home Improvement: Financial Performance
Home Improvement Financial Performance EBIT EBIT/Capital ASm % 450 30 400 5 r 25 350 + 300 + + 20 250 + r 15 r 10 r 5 0 2002 2003 == First HY EBIT 2004 2005 Mm Full Year EBIT 2006 1H 2007 t= EBIT/Capital (R12) 149 warehouse stores 71 smaller format stores 100, 000+ product tines 24 ; 000+ employees
Slide 19: Home Improvement: Strategies
Home Improvement Strategies Strategies Lifting customer service Improving services Focus on core retail drivers Open 10 to 14 warehouse stores pa Develop store network Accelerated store upgrades and refits ~ approx 30 in 2006/07 Development of new store concepts Dual focus on smaller contractors and
Slide 20: Coal
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Slide 21: Coal
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Slide 22: Coal: Financial Performance
Coal Financial Performance EBIT ASm 600 500 + 400 300 5 200 5 100 { 2002 2003* 2004 2 First HY EBIT itt Full Year EBIT 2005 2006 1H 2007 * Excludes profit on sale of Girrah AS80.5m in 2003 40
Slide 23: Coal: Strategies
Coal Strategies Strong export customer demand Maximise Bengalla and Curragh production Cost pressures Deliver on cost reduction program Infrastructure constraints Closely monitoring and capturing opportunities to export as soon as capacity becomes available Increase coal production Curragh North mat
Slide 24: Insurance
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Slide 25: Insurance
Insurance «04
Slide 26: Insurance: Financial Performance
Insurance Financial Performance EBIT ASm 140 EBIT/Capital % 120 - 100 - 80 | 60 + "| Eee 4 0 70 + 60 | 50 L 40 + 30 | 20 2,780 employees 10 146 branches 0 2002 2003 =~ First HY EBIT 2004 2005 Wa Full Year EBIT 2006 1H 2007 ~®~ EBIT/Capital (R12) «04
Slide 27: Insurance: Strategies
Insurance ee Strategies Opportunities / Challenges Strategies Target new segments for profitable growth Continue building technical and expert sales team Sales force efforts targeted at growth sectors Margin pressure in commercial lines Integrate corporate functions Integration of OAMPS Merger of un
Slide 28: Industrial & Safety
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Slide 29: Industrial & Safety Portfolio
Industrial & Safety Portfolio Blackwoods Australian market leader in distribution of Maintenance, Repair and Operating supplies (MRO) a MZ Safety Blackwootls © Paykels @Bullivants HAWOLING GAPETY ad Packaging House Building partnerships, detivering solutions LISS ETM EE: - r 2g
Slide 30: Industrial & Safety: Financial Performance
Industrial & Safety Financial Performance EBIT EBIT/Capital Asm % 140 16 120 - ; 14 100 - p12 L 140 80, | 8 604 | | 6 40, l 4 20 4 2 0 0! 2002 2003 2004 2005 2006 1H 2007 First HY EBIT @ Full Year EBIT ~e- EBIT/Capital (R12)
Slide 31: Industrial & Safety: Strategies
Industrial & Safety Strategies Division restructure complete, cost base reduced SKU reduction well advanced Re-base the business —__ Logistics network rationalisation well progressed Reduction of capital base proceeding well Low Cost Country sourcing capability established (Shanghai) Increased penet
Slide 32: Chemicals & Fertilisers
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Slide 33: Chemicals & Fertilisers
s & Fertilisers «04
Slide 34: Chemicals & Fertilisers: Financial Performance
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Slide 35: Chemical & Fertilisers: Strategies
Chemical & Fertilisers Strategies LO OSL OY) — ~< pe AEE Kwinana AN expansion: > Duplication of capacity to 470,000 tpa > Completion expected second half 2007 Evaluation of options at QNP (50% owned) Improve performance of sodium Sodium cyanide volume growth cyanide business and identify opportuniti
Slide 36: Energy
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Slide 37: Energy
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Slide 38: Energy: Financial Performance
Energy Financial Performance EBIT __EBIT CONTRIBUTION ASm 70 60 5 50 4 4o 900 empio — 1436 cas locations. 30 4 20 5 2002 2003 2004 2005 2006 1H 2007 First HY EBIT @ Full Year EBIT
Slide 39: Energy: Strategies
Energy Strategies Kleenheat Gas: Develop HDV and new domestic markets for LNG Wesfarmers LPG: enhance feed gas supply arrangements New gas products and markets Air Liquide WA (40%): focus on oil and gas and medical industries Coregas: Integrate, complete liquefier expansion and grow East Coast busin
Slide 40: Other Businesses
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Slide 41: Other Businesses
Other Businesses * Gresham Partners (50%) Investment bank and private * Gresham Private Equity equity investor (Australia) — Fund 1 (50%) — Fund 2 (67%) : * Wespine (50° Softwood mill w E 3 Fr. IN E pine (50%) (Western Australia) * Bunnings Warehouse Listed property trust / bl ; BUNNINGS Property Tr
Slide 42: Gresham Private Equity
Gresham Private Equity Current investment A$28.1m Further exits expected over next several years MORCHOS CURRENT INVESTMENT PORTFOLIO Riviera
Slide 43: Gresham Private Equity
Gresham Private Equity « Fund 2 commitments of A$325m « Wesfarmers current commitment A$150m; Capital invested A$63.9m * Witchery acquired in July 2006 | __ CURRENT INVESTMENT PORTFOLIO: _Witche nens fashion app
Slide 44: Capital Management
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Slide 45: Capital Management
Capital Management * Dividend policy — distribute franking credits through dividends * Approximate 90% payout ratio « Estimated capital expenditure 2006/07 ~ A$s00m $226m | * Target efficient capital structure « Dividend investment plan reinstated $108m m Home Improvement @ Energy — 100% underwritte
Slide 46: Capital Management
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Slide 47: Outlook
Outlook * Positive outlook due to — Improvements in operating performance across the group — Investments * OAMPS, $700m * Coregas, $500m * Capital expenditure, ~$800m * Crombie Lockwood « But — Cost pressures and focus — Commodity price movements Od 47
Slide 48: yyy
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