Woolworths Group Ltd · ASX:WOW
Woolworths — Investor Day (2011)
89 slides from Woolworths's investor day presentation, 2011
Slide 1: My Strategic Priorities
MY STRATEGIC PRIORITIES • Re-establish marketing supremacy around value and growth 1 EXTEND AND DEFEND LEADERSHIP IN • Unlock sales growth for a tougher consumer and competitive environment • Accelerate our leadership in Fresh Food FOOD AND LIQUOR • Extend leadership in liquor • Continue momentum to
Slide 2: Supermarkets
WOooLworTHs LIMITED
Slide 3: My Observations Since Joining
MY OBSERVATIONS SINCE JOINING 1 A STRONG FRESH FOOD BUSINESS AND OPPORTUNITY 2 A GOOD VALUE OFFER WITH AN OPPORTUNITY TO ENHANCE AND 3 AN OPPORTUNITY TO MOVE FROM A GENERIC OFFER TO A ACCELERATE COMPARABLE SALES AND DELIVER TO EXTEND FRESH STRENGTHEN BRAND MORE TAILORED SUSTAINABLE FOOD LEADERSHIP C
Slide 4: Growth in Supermarkets – Our New Vision
GROWTH IN SUPERMARKETS – OUR NEW VISION 6
Slide 5: Brand Communication Strategy
BRAND COMMUNICATION STRATEGY WE NEED TO STRENGTHEN THE VALUE CREDENTIALS OF OUR BRAND OUR BRAND STANDS OUT ON • The Woolworths brand has great equity and resonates well with customers • We will continue to build our brand on our existing credentials, but we need a greater focus on SUPPORTING OUR FAR
Slide 6: Brand and Communication Strategy
BRAND AND COMMUNICATION STRATEGY CUSTOMER CENTRIC AND MARKETING LEADERSHIP BRAND COMMUNICATION HAS BEEN INCONSISTENT AND REACTIVE THEREFORE… • Review of advertising and research agencies underway • New GM Marketing with extensive UK experience, who led our winning Countdown strategy in NZ • Already
Slide 7: Growth in Supermarkets – Our New Vision
GROWTH IN SUPERMARKETS – OUR NEW VISION 9
Slide 8: First Choice for Fresh Food
FIRST CHOICE FOR FRESH FOOD AMBITION TO TAKE FRESH MARKET SHARE LEADERSHIP TOWARDS THE LEVEL OF GROCERY grocery POTENTIAL TO GENERATE IN fresh1 EXCESS OF $2.5B 28 % 36 % ADDITIONAL FRESH FOOD SALES MARKET SHARE 1. Excludes perishables and seafood Source: Roy Morgan Single Source , 12 months ending J
Slide 9: First Choice for Fresh Food
FIRST CHOICE FOR FRESH FOOD THE FRESHEST FOOD DELIVERED BY THE FASTEST SUPPLY CHAIN • Implementing a reduction of 1 day out of 4 in produce end-to-end supply chain time – Faster journey from the farm to the customer means a fresher product for longer in the customer's kitchen • More direct sourcing
Slide 10: First Choice for Fresh Food
FIRST CHOICE FOR FRESH FOOD GROWING OUR FRESH OFFER THROUGH BETTER MERCHANDISING GORDON, NSW • 2015 improved fresh offer – refurbished stores producing double digit sales uplift • Currently 14% of stores converted with over 50% of stores converted by 2016 • Merchandising and presentation will contin
Slide 11: First Choice for Fresh Food
FIRST CHOICE FOR FRESH FOOD GROWING OUR FRESH OFFER THROUGH RANGE LEADERSHIP 13
Slide 12: First Choice for Fresh Food
FIRST CHOICE FOR FRESH FOOD OPPORTUNITY TO WIN SHARE WITH A MORE TAILORED RANGE WOOLWORTHS OFFER AFFLUENT CATCHMENT BUDGET CATCHMENT • Primarily generic across all • Local specialist • Local specialist stores • Deeper range, broader price • Good range, fewer price points points 20 13 13 11 10 9 8 2
Slide 13: Growth in Supermarkets – Our New Vision
GROWTH IN SUPERMARKETS – OUR NEW VISION 15
Slide 14: We Are Customer Led – Power of Insight
WE ARE CUSTOMER LED – POWER OF INSIGHT 8.4M PEOPLE ENGAGED IN OUR REWARDS PROGRAMS • Follow our customer: segmentation of our customer in 10 groups which we track to get more in depth understanding of their shopping behaviour • Tailor our offer by catchment: provide the customers with the range that
Slide 15: We Are Customer Led – Everyday Rewards
WE ARE CUSTOMER LED – EVERYDAY REWARDS EVERYDAY REWARDS DATA ENABLES STRONG CUSTOMER ENGAGEMENT CREATING DIRECT MARKETING ENGAGEMENT WITH CREATING INCREMENTAL LEVERAGING DATA PERSONALISED SALES EXCEEDING TO SUPPORT NEW GREAT REWARDS COMMUNICATIONS INDUSTRY BENCHMARKS BUSINESS GROWTH FOR CUSTOMERS 17
Slide 16: Growth in Supermarkets – Our New Vision
GROWTH IN SUPERMARKETS – OUR NEW VISION 18
Slide 17: Unbeatable Value
UNBEATABLE VALUE GREATER CUSTOMER VALUE THROUGH ENHANCED CATEGORY MANAGEMENT • Category reviews driven by customer ENHANCED Everyday Rewards data CATEGORY • Comprehensive reviews of categories MANAGEMENT underway, majority complete by June 2012 assisted by newly launched category lab BETTER BUYING D
Slide 18: Unbeatable Value
UNBEATABLE VALUE DRIVING REDUCTION IN SHRINKAGE TO LOWER PRICES QUARTERLY SHRINKAGE PERFORMANCE LAST 4 QUARTERS INDEXED TO Q2 FY11 100 98 93 • Major initiative to remove underlying causes of shrinkage 86 and redesign end-to-end processes • Enhancement to store ordering system – Next Generation Autos
Slide 19: Unbeatable Value
UNBEATABLE VALUE TARGETING DOUBLE THE PENETRATION OF OWN BRAND SALES PROVIDING WIDER VARIETY AND LOWER PRICES 5 Kroger Safeway Carrefour Walmart Sainsbury's Tesco 0 (US) (US) (France) (US) (UK) (UK) OWN BRAND PERCENT OF SALES WOOLWORTHS' OWN BRAND SALES REBASED TO 1 21
Slide 20: Unbeatable Value
UNBEATABLE VALUE DOUBLE THE PENETRATION OVER THE NEXT 5 YEARS… OVER 350 PRODUCTS OVER 1,300 PRODUCTS • Growing 8 times faster than the market in • New product launches and rebranding has seen the last year strong sales growth in the last quarter • Great new categories across the store …THROUGH DELIV
Slide 21: Unbeatable Value
UNBEATABLE VALUE HOMEBRAND – AUSTRALIA'S MOST ESTABLISHED OWN BRAND DELIVERING UNBEATABLE VALUE TO CUSTOMERS SINCE 1983 SALES GROWTH OVER 850 CURRENT SKUs 2011 180 % 2000 23
Slide 22: Growth in Supermarkets – Our New Vision
GROWTH IN SUPERMARKETS – OUR NEW VISION 24
Slide 23: Store Tailored for My Customer
STORE TAILORED FOR MY CUSTOMER CONTINUED STRONG GROWTH OF AUSTRALIA'S LEADING RETAIL NETWORK # STORES ~960 ~8731 840 756 2006 2011 2012(f) 2016(f) …UTILISING BALANCE SHEET STRENGTH AND DEVELOPMENT EXPERTISE 1. Represents 39 new openings and 6 closures 25
Slide 24: Store Tailored for My Customer
STORE TAILORED FOR MY CUSTOMER USING DATA TO DEVELOP TAILORED FORMATS AND RANGES DRIVING SALES AND PROFIT / SQM SHOPPING COMPETITION OCCASIONS CUSTOMER • Specialists SEGMENTS • Independents • Top Up • Conventional chains • Regular • Discounters • Stock Up • Warehouse clubs • Online 26
Slide 25: Store Tailored for My Customer
STORE TAILORED FOR MY CUSTOMER USING DATA TO GAIN DEEP UNDERSTANDING OF CUSTOMER SHOPPING BEHAVIOURS TO DEVELOP TAILORED STORE FORMATS AND RANGES PERCENT OF STORE SALES BY WOOLWORTHS' CUSTOMER SEGMENTS: FY10 CUSTOMER SEGMENT TYPE 1 2 3 4 5 6 7 8 AFFLUENT CUSTOMER GROUPS 9 10 MAINSTREAM BUDGET BUDGET
Slide 26: Store Tailored for My Customer
STORE TAILORED FOR MY CUSTOMER USING DATA TO CREATE NEW CUSTOMER LED CATEGORIES THROUGH SHELF AND FLOOR SPACE OPTIMISATION LAUNDRY POWDER WILL DRIVE GROWTH IN SALES AND PROFIT / SQM High RANGE EDITING Substitutability High sales Low sales Low High Low Loyalty TARGET CATEGORIES • Lots of brands • Lot
Slide 27: Store Tailored for My Customer – Multi-channel
STORE TAILORED FOR MY CUSTOMER MULTI-CHANNEL - STRONG CURRENT GROWTH AND SIGNIFICANT UPSIDE POTENTIAL Great Significant Multi-channel online potential customer growth upside spend 10 4 ~Tesco % ~70 more than %2 times1 in-store only customer Supermarkets growth (Aus Food & Liquor) <1 % spend 2010 ONL
Slide 28: Store Tailored for My Customer
STORE TAILORED FOR MY CUSTOMER NEW WOOLWORTHS ONLINE PLATFORM DELIVERS ENHANCED CUSTOMER BENEFITS • Favourites list: your in-store and online purchases (Everyday Rewards customers) • "Have You Forgotten": lets you know if you've missed something you regularly buy • Search Field: predictively suggest
Slide 29: Store Tailored for My Customer
STORE TAILORED FOR MY CUSTOMER 1.1M CUSTOMERS HAVE DOWNLOADED WOOLWORTHS SMARTPHONE SHOPPING APP CURRENTLY • Smart shopping lists Featured as "App of the • Specials week" in the Apple • Barcode scanner AppStore (12/8/2011) • Store finder • Product finder Rated No. 1 free • Recipes application in iTu
Slide 30: One of Australia's Largest Fuel Retailers
ONE OF AUSTRALIA'S LARGEST FUEL RETAILERS WITH SCOPE FOR FUTURE GROWTH • The petrol offer is an essential ingredient in Supermarket loyalty • Targeting a site supporting every Supermarket - 215 Supermarkets not yet adequately supported • Targeting double digit non-fuel sales growth • Valued customer
Slide 31: Australian Supermarkets Recap
AUSTRALIAN SUPERMARKETS RECAP TRACKING KPIs TO ENSURE WE ARE DELIVERING ON OUR STRATEGY • Value perception • New category growth • Price position • Own brand penetration • Promotional effectiveness • Fresh food perception • Number of stores • Fresh market share • Ranging effectiveness and • Fresh ba
Slide 32: New Zealand's Largest Retail Brand
NEW ZEALAND'S LARGEST RETAIL BRAND DELIVERED ON 3 YEAR TRANSITION AND INTEGRATION STRATEGY TO CREATE A STRONG BUSINESS 2007-2011 NZ$244m NZ$5,362m 8.2 4.3 % pa1 % pa1 NZ$178m NZ$4,527m EBIT GROWTH REVENUE GROWTH 1. 4 year CAGR 34
Slide 33: New Zealand's Largest Retail Brand
NEW ZEALAND'S LARGEST RETAIL BRAND STRONG POSITIVE MOMENTUM WILL CONTINUE • Finalised rebranding - only 5 stores left • New format rollout - 65% complete • 24 new stores over the next 5 years • Cross-leveraging and scale synergies with Australian Supermarkets – Supply chain integration – Customer an
Slide 34: Q&A - Supermarkets
Q&A - SUPERMARKETS 36
Slide 35: Woolworths Liquor Group
WOOLWORTHS LIQUOR GROUP 37
Slide 36: Clear Leadership
CLEAR LEADERSHIP AUSTRALIA'S LEADING LIQUOR RETAILER… # STORES / HOTELS 1,532 653 457 282 298 140 2000 2011 38
Slide 37: Clear Leadership
CLEAR LEADERSHIP …WITH UNRIVALLED CAPABILITY IN DIRECT MARKETING, PRODUCTION AND DISTRIBUTION… PRODUCTION DIRECT AND MARKETING DISTRIBUTION BROKERAGE 39
Slide 38: Clear Leadership
CLEAR LEADERSHIP …RESULTING IN LEADERSHIP ACROSS ALL CUSTOMER SEGMENTS CONNOISSEUR BROKERAGE CONVENIENCE AND VALUE BARGAIN HUNTER DIRECT BRICKS AND MORTAR 40
Slide 39: Liquor – Imperatives to Drive Growth
LIQUOR – 7 IMPERATIVES TO DRIVE GROWTH 1 GROW • Continue development pipeline, growing Dan Murphy’s to 208 by FY16 • Expand and optimise Hotel, BWS and Supermarket Liquor network NETWORK • Grow Hotels as a key enabler to the rollout of Dan Murphy's and BWS 2 IMPROVE • Rollout new format for Dan Murp
Slide 40: Grow Our Network
GROW OUR NETWORK STRONG NEW STORE PIPELINE WILL DELIVER 172 NEW STORES IN 5 YEARS # STORES ~1,436 ~1,329 1,264 657 ~691 ~716 461 ~480 ~512 146 ~158 ~208 Sep 2011 2012(f) 2016(f) TODAY • Woolworths operates ~10% of Australia's packaged liquor licenses • 165 Australian supermarkets, outside QLD / TAS,
Slide 41: Improve Our Store Formats
IMPROVE OUR STORE FORMATS • Dan Murphy’s "Store of the Future" to deliver a world-class liquor retail experience • 12 stores already open in the revised format. 26 by June 2012 • New format extends leadership through improved access to superior range, people and technology • Initiatives in place in
Slide 42: Multi-Channel
MULTI-CHANNEL AUSTRALIA’S MOST DIVERSE LIQUOR RETAILER ONLINE, BRICKS MOBILE CATALOGUE AUCTION AND AND AND AND FUTURE MORTAR SOCIAL WINE PLANS BROKERAGE MEDIA • Big box • Exceptional growth • Customer loyalty • Langton’s • Broaden the range • Supermarkets for Dan Murphy’s • Direct marketing Brokerag
Slide 43: Grow Own Brand Share
GROW OWN BRAND SHARE EXTENSIVE RANGE OF OWN BRAND PRODUCTS DEVELOPED • Own and Exclusive Brands are the 2nd largest "supplier" to the Liquor Group with >600 lines • Proven success across all categories – Leading Sauvignon Blanc range (South Island, Amiri, Tangoroa) – No. 2 Whiskey (McAllister Whiske
Slide 44: Grow Own Brand Share
GROW OWN BRAND SHARE NEW CAPABILITY IN PRODUCTION • Significant capacity for today’s requirements due to Dorrien Estate acquisition with scope to significantly increase capacity for future needs • One of Australia’s largest wine and beer producers • Q2 will witness the first ‘own brand’ lines produc
Slide 45: Grow Own Brand Share
GROW OWN BRAND SHARE DOUBLE OWN BRANDS AS A PERCENTAGE OF TOTAL SALES IN 4 YEARS • Build "Brands" with superior products delivering excellent value • Support growth of Brands with above the line spend • Stay ahead of the curve with new product development • Focus on maintaining a world class team (e
Slide 46: Hotels
HOTELS INTEGRAL TO THE LIQUOR GROUP STRATEGY • Key enabler to rollout of Dan Murphy's and BWS, currently 35% of Dan Murphy's and 65% of BWS are affiliated with hotels • Growth in hotels will be delivered organically through continued improvements in food and entertainment offers combined with bolt o
Slide 47: Q&A - Liquor
Q&A - LIQUOR 49
Slide 48: 50
50
Slide 49: BIG W's Environment and Strategic Priorities
BIG W'S ENVIRONMENT AND STRATEGIC PRIORITIES TRENDS RESHAPING DDS ENVIRONMENT BIG W's STRATEGIC PRIORITIES • Customers are saving more, deleveraging and tightening spend 1 WIN ON VALUE EVERYDAY • Internet and social media empowering consumers to compare prices and judge where they will get the best
Slide 50: Who Is the BIG W Customer?
WHO IS THE BIG W CUSTOMER? CONVENTIONAL FAMILIES OLDER TRADITIONAL FAMILIES VISIBLE ACHIEVERS 52
Slide 51: Customers Winning on Value Everyday
CUSTOMERS WINNING ON VALUE EVERYDAY THAT'S WHAT'S IMPORTANT • Customers' • You can "GET IT FOR perceptions of LESS" at BIG W QUALITY are reinforced by Brands • BRANDS are PRICE BRANDS cheaper than anywhere else • New initiatives to • VALUE = PRICE and evolve categories QUALITY and merchandise • Cust
Slide 52: Price – Customer's Champion on Price
PRICE – CUSTOMER'S CHAMPION ON PRICE CLEAR COMMUNICATION WITH THE CUSTOMER GET IT FOR LESS CAMPAIGN TV OUTDOOR IN STORE CATALOGUE LEADING INTO CHRISTMAS VALUE CAMPAIGN 54
Slide 53: Price – Customer's Champion on Price
PRICE – CUSTOMER'S CHAMPION ON PRICE CLEAR COMMUNICATION WITH THE CUSTOMER 1 NEW LOWER PRICE CAMPAIGN 2 REVITALISE PRICE COMPARISON: 3 NEW BIG W APP WILL ENABLE PRICE (REPLACING COMPARE & SAVE SCANNER IN STORE ROLLBACK) IN-STORE • Delivered a significant uplift in units sold; sales $ and gross profi
Slide 54: Price – BIG W App
PRICE – BIG W APP ENABLING CUSTOMERS TO COMPARE PRICES 56
Slide 55: Brands at BIG W Are Cheaper Than Anywhere Else
BRANDS AT BIG W ARE CHEAPER THAN ANYWHERE ELSE NATIONAL BRANDS EXCLUSIVE BRANDS represent ~73 % SALES $ represent ~27 % SALES $ CUSTOMERS' PERCEPTIONS OF QUALITY ARE REINFORCED BY BRANDS 57
Slide 56: Range – Making Fashion Affordable
RANGE – MAKING FASHION AFFORDABLE WOMENSWEAR – NEW RANGES OFFER GREAT VALUE TO OUR CUSTOMERS AND DELIVER IMPROVED SALES AND PROFITABILITY • Developed three new exclusive brands that are relevant to our core customer • Initial range rolled out to all stores February - July 2011 MATERNITY • Emerson, o
Slide 57: Range – Exciting New Offers
RANGE – EXCITING NEW OFFERS CONTINUE TO REVITALISE BIG W STORE RANGES NEW ACTIVE WEAR RANGE • We know our core customer is interested in their health and wellbeing • This offer is focused on women's light exercise apparel • New layouts will be rolled out in selected stores early 2012 59
Slide 58: Range – Exciting New Offers
RANGE – EXCITING NEW OFFERS CONTINUING TO EVOLVE HOME ENTERTAINMENT OFFER • Australia's leading footprint with Apple iPad. More stores added recently to extend offer to 160 stores by end of November 2011 • Very strong attachment rate on Accessories (key profit area) • Strong market share in iPad, iP
Slide 59: Range – Delivering Market Leading Value
RANGE – DELIVERING MARKET LEADING VALUE PROVIDING GREAT VALUE AT GREAT PRICES $7 ¢ PK 72 EA $9.46 EA $3 EA 61
Slide 60: New Store Growth
NEW STORE GROWTH STRONG PIPELINE WILL DELIVER UP TO 35 NEW STORES IN NEXT 5 YEARS # STORES ~200 ~172 165 129 2006 2011 2012(f) 2016(f) • Customers want greater accessibility to our offer: via stores and multi-channel • New store growth and multi-channel to deliver market share gains 62
Slide 61: Multi-Channel
MULTI-CHANNEL CUSTOMER RESPONSE IS VERY POSITIVE WINNER BEST ONLINE RETAIL BIG W DEALS BIG W APP – ENABLING MARKETING INITIATIVE CUSTOMER TO COMPARE PRICES 63
Slide 62: Multi-Channel
MULTI-CHANNEL CLEAR VISION TO BECOME AUSTRALIA'S LEADING MULTI-CHANNEL RETAILER CUSTOMER CUSTOMER RANGE CONVENIENCE PROPOSITION EXPERIENCE NOW • 166 stores • Edited range • 85,000 SKUs in-store • Great locations • Website to • Trading focus • Deals • Web only • 9,500 SKUs Home • Online Lay-by • Home
Slide 63: Supply Chain Productivity
SUPPLY CHAIN PRODUCTIVITY GROWTH REAPING THE BENEFITS: RIGHT STOCK, RIGHT PLACE, RIGHT TIME IMPROVED INVENTORY IMPROVED IN STOCK REDUCTION SPEED TO SUPPLY CHAIN MANAGEMENT AND IN STOCK ON HAND MARKET EFFICIENCY STOCK FLOW. LESS LABOUR SAVING MARKDOWNS PROJECT FOCUS MERCHANDISE STORE WAREHOUSE WAREHO
Slide 64: Supply Chain Productivity
SUPPLY CHAIN PRODUCTIVITY SUPPLY CHAIN EFFICIENCY TO DELIVER LOWEST COST • Third DC in Hoxton Park, Sydney opens March 2012 providing operating efficiencies and supporting new store growth • Reduced outside storage costs, reduced freight costs and improved inventory flow • DC also needed to support
Slide 65: Delivering on Our Strategic Priorities
DELIVERING ON OUR STRATEGIC PRIORITIES 1 WIN ON VALUE EVERYDAY PRICE • Ensure BIG W is the Customers Champion on Price • We want all BIG W customers to know they can "GET IT FOR LESS" BRANDS • BIG W will continue to offer the widest range of quality and branded merchandise at the lowest prices every
Slide 66: Q&A – BIG W
Q&A – BIG W 68
Slide 67: Home Improvement
6 WOooLworTHs LIMITED
Slide 68: Masters Update
MASTERS UPDATE 5 STORES • Braybrook, VIC OPENED • Tingalpa, QLD • Nerang, QLD • Springfield, QLD • Morayfield, QLD SALES ABOVE • Early days, however sales EXPECTATIONS well ahead of budget MARKET LEADING • Strong customer reaction PRICING AND to format, range and EXPERIENCE pricing MANY MORE • 2 mor
Slide 69: Masters Key Elements to Success
MASTERS KEY ELEMENTS TO SUCCESS • Almost 100 sites in the pipeline SITES • Target is 150 sites secured in 5 years • Leveraging Lowes direct global sourcing and Danks relationships BUYING • Developed strong direct global sourcing capability • Strong team assembled with combination of domestic and TEA
Slide 70: Intentionally Left Blank
INTENTIONALLY LEFT BLANK 72 7
Slide 71: Danks Driving Wholesale, Trade and Convenience Offer
DANKS DRIVING WHOLESALE, TRADE AND CONVENIENCE OFFER • Strengthening relationships with existing members and attracting new franchise members – Tiered membership offer to attract additional members into Home Hardware group – Delivering additional benefits for members including financial support for
Slide 72: Dick Smith
dicksmith Be WOooLworTHs LIMITED
Slide 73: Dick Smith
DICK SMITH BUSINESS UNDERGOING STRATEGIC REVIEW • The Dick Smith business is in transition to a smaller network of stores and increasing online sales • It is currently tracking well with 51% of the store network now in optimal new concept format with strong sales result • Online sales continue to gr
Slide 74: Q&A - Home Improvement and Dick Smith
Q&A - HOME IMPROVEMENT AND DICK SMITH 76
Slide 75: Productivity
PRODUCTIVITY WOooLworTHs LIMITED
Slide 76: A Successful Decade Has Given Us a Strong Foundation for Future Growth
A SUCCESSFUL DECADE HAS GIVEN US A STRONG FOUNDATION FOR FUTURE GROWTH GP / CODB / EBIT MARGIN RATE $M BASELINED: FY99 = 100 30% We drove down COGS and 700 made supply chain more efficient, offset by strong 600 25% price re-investment 500 20% We drove down 400 CODB, assisted by 15% fractionalisation
Slide 77: The Next Phase
THE NEXT PHASE TO DELIVER SIGNIFICANT COST SAVINGS OVER THE NEXT 5 YEARS LEVERAGING GROUP QUANTUM SCALE AND BEST PRACTICE DIRECT PROCUREMENT SUSTAINABILITY SUPPLY IT GLOBAL NOT FOR COST CHAIN SYSTEMS SOURCING RESALE SAVINGS • FY11 46% growth • Appointment of new • $55.7m invested in • Target double
Slide 78: Supply Chain
SUPPLY CHAIN DEVELOPED WORLD CLASS FOOD AND LIQUOR SUPPLY CHAIN DELIVERING A STEP CHANGE IN OUR COSTS AND SERVICE LOGISTICS PERFORMANCE BEST PRACTICE - TRANSPORT 2006-2011 • 40% OF INBOUND VOLUME HANDLED BY WOOLWORTHS CARTONS HANDLED + 45% PRIMARY FREIGHT – reducing trucks to DC's by 1,500 per week
Slide 79: Supply Chain – Next Step Change Will Deliver Significant Further Benefits
SUPPLY CHAIN – NEXT STEP CHANGE WILL DELIVER SIGNIFICANT FURTHER BENEFITS… INITIATIVES OUTCOMES Transforming and integrating Logistics for all brands Leveraging Food and Liquor capability to realise group benefits Increasing integration and efficiency of International Logistics Increased capability
Slide 80: Resulting in Logistics Costs as a % to Sales Continuing to Reduce
… RESULTING IN LOGISTICS COSTS AS A % TO SALES CONTINUING TO REDUCE LOGISTICS COST AS A % OF SALES: FY06-FY16 AUSTRALIAN FOOD AND LIQUOR CREATING CAPABILITY LEVERAGING CAPABILITIES 105 95 85 75 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 Note: Rebased to 100 in FY06 82
Slide 81: IT Next Generation Systems
IT NEXT GENERATION SYSTEMS GALAXY PROJECT - A COMMON PLATFORM FOR FURTHER PRODUCTIVITY, ENABLING SEAMLESS WORKING ACROSS ALL DIVISIONS PERFORMANCE REPORTING PRODUCTS • Group merchandising system • Single reporting system across company PROMOTIONS STORE ENHANCED RANGING • Decommissioning of numerous
Slide 82: Balance Sheet and Portfolio Resilience
BALANCE SHEET AND PORTFOLIO RESILIENCE 84
Slide 83: Consistent Investment and Delivery of Returns on Investment
CONSISTENT INVESTMENT AND DELIVERY OF RETURNS ON INVESTMENT GROUP ROIC, BEFORE TAX 1 % ADJUSTED FOR CAPITALISED LEASES Woolworths ramps up Lower consumer property development confidence. Project Mercury to maintain new store Discretionary (logistics) pipeline expenditure reduced investments in 30 20
Slide 84: Strong Balance Sheet Enabling Growth
STRONG BALANCE SHEET ENABLING GROWTH CREDIT RATINGS MAINTAINED – MANAGE BALANCE SHEET STRUCTURE TO MAINTAIN RATINGS FIXED COVER CHARGE1 CASH FLOW $m 2007-2011 CASH FROM OPERATING ACTIVITY 13,296 3.50 3.00 PAYMENTS DIVIDENDS (4,736) 2.50 CAPEX (5,918) 2.00 PROPERTY (1,120) 1,522 1.50 SHARE BUY BACKS
Slide 85: Debt Profile
DEBT PROFILE DEBT REFINANCING PLAN COMPLETE MATURITY PROFILE OF EXISTING "HARD" DEBT FACILITIES POST NOV 2011 – TOTAL A$5.763B • Access to debt market very 2,000 3 & 5yr Syndicated loan successful 5yr MTN (Mar'11) – US144A offers in Sept US144A (Sep'10) 2010, US$1.25b (5 and US144A (Apr'11) 1,500 Wo
Slide 86: Capex Spend Over Next 5 Years
CAPEX SPEND OVER NEXT 5 YEARS EX-PROPERTY DEVELOPMENT % OF SALES • New stores continue in line with planned new store growth 2.3 • Refurbs continue but at lower 2.2 dollar levels in supermarkets given 1.9 2010 initiatives, however format 1.7 improvements will continue to 1.5 improve customer offer 1
Slide 87: Recap
RECAP WOooLworTHs LIMITED
Slide 88: My Strategic Priorities
MY STRATEGIC PRIORITIES • Re-establish marketing supremacy around value and growth 1 EXTEND AND DEFEND LEADERSHIP IN • Unlock sales growth for a tougher consumer and competitive environment • Accelerate our leadership in Fresh Food FOOD AND LIQUOR • Extend leadership in liquor • Continue momentum to
Slide 89: Q&A
Q&A 91