Wesfarmers Limited · ASX:WES
Wesfarmers — Merger or Acquisition (March 2018)
21 slides from Wesfarmers's merger presentation, Mar 16, 2018
Slide 1: Intention to Demerge Coles - Briefing Presentation
15 March 2018 The Manager Company Announcements Office Australia Securities Exchange Dear Manager, INTENTION TO DEMERGE COLES - BRIEFING PRESENTATION Following is a presentation to be given at an investor briefing on the intention to demerge Coles to be held on Friday, 16 March 2018 at 8:00am AWST /
Slide 2: Intention to demerge Coles - Briefing Presentation
Intention to demerge Coles - Briefing Presentation Friday, 16 March 2018
Slide 3: Presentation outline
Presentation outline Item Page Overview & rationale 3 The Wesfarmers Way 10 Wesfarmers post-demerger 13 Coles post-demerger 16 Intention to demerge Coles | 2
Slide 4: Overview & rationale
Overview & rationale
Slide 5: The Coles transformation
The Coles transformation Wesfarmers has delivered a world-class retail transformation • Under Wesfarmers’ ownership, Coles’ position as a 9.5%2 EBIT CAGR leading Australian retailer has been restored $1,609m $779m • Strong financial performance since FY091 – 9.5%2 EBIT CAGR FY09 FY17 – Over 30% incr
Slide 6: Demerger overview
Demerger overview Creation of a new top 30 ASX company with leading positions in grocery, liquor & convenience • Intention to demerge Coles into a separate Post-demerger ASX-listed company Wesfarmers shareholders • Shareholders would have the opportunity to vote on the demerger • Wesfarmers would re
Slide 7: Demerger rationale
Demerger rationale Repositioning Wesfarmers & Coles for the next decade Capital employed contribution • Wesfarmers is targeting a higher capital weighting toward (R12 Dec 17) businesses with strong earnings growth prospects – Successful turnaround of Coles has been delivered; Rest of future long-ter
Slide 8: Demerger impact
Demerger impact Simplifying the Wesfarmers portfolio & reducing operational complexity Wesfarmers Wesfarmers post-demerger 1 Coles today (exc. Resources) FY17 revenue ($b) 68.4 27.5 39.2 FY17 EBIT ($b) 4.4 2.4 1.6 FY17 operating cash flows ($b)2 5.2 2.6 2.2 Dec-17 R12 ROC / ROC (ex. g/w)3 (%) 15.9 /
Slide 9: Summary & next steps
Summary & next steps • Today’s announcement is an important milestone for the future of Wesfarmers & Coles • Following the transformation under Wesfarmers’ ownership, Coles is well-positioned to prosper as a separately listed company • The demerger would reposition Wesfarmers’ portfolio & capital to
Slide 10: Questions
Questions
Slide 11: The Wesfarmers Way
The Wesfarmers Way
Slide 12: The Wesfarmers Way
The Wesfarmers Way Wesfarmers’ objective is to deliver satisfactory returns to shareholders over the long term ENABLERS Divisional autonomy Active portfolio management Underpinned by a strong balance sheet & sustainable practices AREAS OF FOCUS ` ` Leveraging data & Entrepreneurial World’s best tale
Slide 13: Active portfolio management
Active portfolio management Group transaction activity (inflation adjusted transaction size) Coles Group (incl. Kmart, Target and Officeworks) Howard Acquisitions Smith Quadrant Coregas Energy Coles credit IAMA Bengalla card book deposit Bunnings Lumley Aust Finance Workwear Group Homebase Western R
Slide 14: Wesfarmers post-demerger
Wesfarmers post-demerger
Slide 15: Wesfarmers post-demerger
Wesfarmers post-demerger Wesfarmers’ objective would remain the delivery of satisfactory returns over the long term Total shareholder return1 • Well-positioned to deliver continued growth in earnings & returns TSR Index (June 2007 = 100) – Retail: continued improvement of store networks, 180 merchan
Slide 16: Wesfarmers post-demerger
Wesfarmers post-demerger Portfolio of cash generative businesses with strong growth prospects Department Bunnings Industrials Officeworks Other Stores • Leading retailer of • Kmart is Australia’s • Diversified portfolio of • Leading retailer & • Minority ownership home improvement & leading general
Slide 17: Coles post-demerger
Coles post-demerger coles colescomau Coles
Slide 18: The Coles investment
The Coles investment Significant investment has positioned Coles well for continued future growth 8 years of lowering prices for customers • Over $8b of capital invested since FY09 % • 8 years of lowering the cost of the weekly shop 8 6 for customers 4 2 • 184 new supermarkets opened, 134 closed & 0
Slide 19: Coles post-demerger
Coles post-demerger Attractive investment for shareholders seeking defensive characteristics ABS supermarket sales ($b)1 • Expected to demerge as a top 30 ASX listed CAGR: 5.4% company 102 105 96 99 87 90 • Well-positioned to continue to grow earnings 78 80 83 62 67 72 over the long term 57 59 47 50
Slide 20: Coles portfolio
Coles portfolio1 Food Liquor Convenience Other • A leading Australian • Three national liquor • National network of • An interest in flybuys, full-service chains, each with a 712 stores offering fuel one of Australia’s most supermarket, distinctive value & convenience popular & well- committed to lo
Slide 21: Wesfarmers
We Wesfarmers