Woolworths Holdings Limited · JSE:WHL
Woolworths — FY2021 Earnings Presentation
54 slides from Woolworths's earnings presentation, August 2021
Slide 1: Woolworths Holdings Limited 2021 Annual Results
WO O LWO R T H S H O L D I N G S L I M I T E D 2021 Annual Results
Slide 2: Presentation Outline
WOOLWORTHS HOLDINGS LIMITED ANNUAL RESULTS 2021 ANALYST PRESENTATION PRESENTATION OUTLINE 01 02 03 OVERVIEW FINANCIAL UPDATE AND OF THE YEAR OVERVIEW OUTLOOK WHL 2 / 2021
Slide 3: Overview of the Year
WOOLWORTHS HOLDINGS LIMITED ANNUAL RESULTS 2021 ANALYST PRESENTATION OVERVIEW OF THE YEAR Roy Bagattini Group CEO WHL 3 / 2021
Slide 4: Overview of FY21
WOOLWORTHS HOLDINGS LIMITED ANNUAL RESULTS 2021 ANALYST PRESENTATION OVERVIEW OF FY21 We have taken clear and decisive actions to improve the strength of our businesses, ending the year in a far healthier position • Environment remained impacted by further Covid-19 waves and subsequent lockdowns • C
Slide 5: Overview of FY21 (continued)
WOOLWORTHS HOLDINGS LIMITED ANNUAL RESULTS 2021 ANALYST PRESENTATION OVERVIEW OF FY21 We have taken clear and decisive actions to improve the strength of our businesses, ending the year in a far healthier position • Simplified structures to reduce complexity and enable more agile ways of working • I
Slide 6: Appreciation
WOOLWORTHS HOLDINGS LIMITED ANNUAL RESULTS 2021 ANALYST PRESENTATION APPRECIATION The past year has tested our resolve, but we have risen to the challenge, driven by the passion and commitment of our people • A big thank you to each of our 45 000 people, especially those on the front line, for their
Slide 7: Financial Overview
WOOLWORTHS HOLDINGS LIMITED ANNUAL RESULTS 2021 ANALYST PRESENTATION FINANCIAL OVERVIEW Reeza Isaacs Group Finance Director WHL 7 / 2021
Slide 8: Financial Overview
WOOLWORTHS HOLDINGS LIMITED ANNUAL RESULTS 2021 ANALYST PRESENTATION FINANCIAL OVERVIEW Turnover and concession sales Adjusted EBIT Adjusted diluted HEPS 341.6cps +9.7% +103% R85.9bn +44% R6.9bn R78.3bn • Stronger trade across the Group R4.8bn 168.4cps • Operating profit growth across all businesses
Slide 9: H2 Sales Performance – South Africa
WOOLWORTHS HOLDINGS LIMITED ANNUAL RESULTS 2021 ANALYST PRESENTATION H2 SALES PERFORMANCE – SOUTH AFRICA The impact of Covid-19 on last year’s second half significantly impacted current year growth with Food and FBH trading off abnormally high and low bases respectively FY21 January June lockdowns L
Slide 10: H2 Sales Performance – Australia
WOOLWORTHS HOLDINGS LIMITED ANNUAL RESULTS 2021 ANALYST PRESENTATION H2 SALES PERFORMANCE – AUSTRALIA Strong second half sales growth notwithstanding lockdown restrictions, albeit off a non-comparable base FY21 January June lockdowns by state NSW and WA, Melbourne QLD, Brisbane Victoria, NSW and Bri
Slide 11: Adjusted EBIT
WOOLWORTHS HOLDINGS LIMITED ANNUAL RESULTS 2021 ANALYST PRESENTATION ADJUSTED EBIT Clear and decisive actions to improve the financial health of our Group drove improved operating performance across all businesses, with Group aEBIT up 44% on last year % aEBIT margin 16 14.7 12 8.2 8.0 8.4 8.1 7.6 8
Slide 12: EPS, HEPS and Adjusted HEPS
WOOLWORTHS HOLDINGS LIMITED ANNUAL RESULTS 2021 ANALYST PRESENTATION EPS, HEPS AND ADJUSTED HEPS Adjusted diluted HEPS increased by 103% to 342cps cps 500 88.7 428.7 42.7 (28.9) 400 368.9 341.6 (15.4) +644% 300 +103% +212% 200 168.4 118.4 100 57.6 – AdHEPS Lease exit and Deferred Diluted HEPS Profit
Slide 13: Woolworths Fashion, Beauty and Home results
WOOLWORTHS HOLDINGS LIMITED ANNUAL RESULTS 2021 ANALYST PRESENTATION Top-line impacted by reduced demand for formalwear, strategic initiatives to streamline private label offering and rationalise unproductive space; key focus is on improving underlying financial health H2 Jun Jun 2021 H2 2021 2020 F
Slide 14: Woolworths Food results
WOOLWORTHS HOLDINGS LIMITED ANNUAL RESULTS 2021 ANALYST PRESENTATION Another outstanding result with continued market share and volume gains, notwithstanding the high Covid-19 base H2 Jun Jun 2021 H2 2021 2020 FY Rm % Rm Rm % Turnover and concession sales 19 383 3.2 38 286 35 817 6.9 Gross profit ma
Slide 15: Woolworths Financial Services results
WOOLWORTHS HOLDINGS LIMITED ANNUAL RESULTS 2021 ANALYST PRESENTATION Improvement across all key metrics, with the quality of the book reflecting the underlying strength of the business Jun Jun 2021 2020 % Rm Rm change Average total financial services assets 13 054 13 185 (1.0) % % Income statement t
Slide 16: David Jones results
WOOLWORTHS HOLDINGS LIMITED ANNUAL RESULTS 2021 ANALYST PRESENTATION Encouraging improvement across key metrics, notwithstanding continued disrupted trading environment H2 Jun Jun 2021 H2 2021 2020 FY A$m % A$m A$m % Turnover and concession sales 1 040 17.1 2 112 2 064 2.3 Gross profit margin 35.7%
Slide 17: Country Road Group results
WOOLWORTHS HOLDINGS LIMITED ANNUAL RESULTS 2021 ANALYST PRESENTATION Strong performance by the group underpinned by Country Road brand in particular H2 Jun Jun 2021 H2 2021 2020 FY A$m % A$m A$m % Turnover 540 39.5 1 052 927 13.5 Gross profit margin 61.7% 60.8% 58.6% Expenses 272 26.5 487 489 (0.4)
Slide 18: Capital Expenditure
WOOLWORTHS HOLDINGS LIMITED ANNUAL RESULTS 2021 ANALYST PRESENTATION CAPITAL EXPENDITURE Investment increasingly shifting to digital, data and online Rm 3 000 R2.8 bn R2.7 bn R2.5 bn R227m FY22 Plan 2 500 R215m • FY22 capex in line with FY19 R181m • Significant shift from brick-and-mortar to digital
Slide 19: Net Borrowings
WOOLWORTHS HOLDINGS LIMITED ANNUAL RESULTS 2021 ANALYST PRESENTATION NET BORROWINGS Successful execution of capital plan delivered significant reduction in Group net gearing, covenant separation between DJ and CRG, and a net cash position in Australia Net borrowings R7.3bn R4.9bn A$366m Jun 2021 Jun
Slide 20: Cash Generation
WOOLWORTHS HOLDINGS LIMITED ANNUAL RESULTS 2021 ANALYST PRESENTATION CASH GENERATION R10.8bn cash generated through improved trade, reduced capex, decision to suspend dividends, and successful sale of buildings Rm 14 000 11 393 256 12 000 7 356 10 821 10 000 (2 603) 8 000 (1 108) (1 110) 6 000 3 780
Slide 21: Dividends and Capital Structure
WOOLWORTHS HOLDINGS LIMITED ANNUAL RESULTS 2021 ANALYST PRESENTATION DIVIDENDS AND CAPITAL STRUCTURE We have resumed dividends; longer-term payout ratio will be dependent on the outlook • The suspension of dividends assisted in strengthening the Group balance sheet and we are pleased to end FY21 wit
Slide 22: Recent Trading
WOOLWORTHS HOLDINGS LIMITED ANNUAL RESULTS 2021 ANALYST PRESENTATION RECENT TRADING Post year-end sales severely impacted by lockdown-related store closures in Australia and the third wave and recent civil unrest in South Africa South Africa • Third wave and level 4 lockdown in South Africa • Lootin
Slide 23: Update and Outlook
WOOLWORTHS HOLDINGS LIMITED ANNUAL RESULTS 2021 ANALYST PRESENTATION UPDATE AND OUTLOOK Roy Bagattini Group CEO WHL 23 / 2021
Slide 24: New Strategic Framework
WOOLWORTHS HOLDINGS LIMITED ANNUAL RESULTS 2021 ANALYST PRESENTATION NEW STRATEGIC FRAMEWORK O U R I N S PI R ATI O N TO B E A LEAD I N G, PU RPOS E- D RIVE N, TRU LY CO N N ECTE D RETAI LE R STR ATEG I C FR AMEWO RK STR ATEG I C TH EMES E NAB LE RS PROTECT AN D G ROW O U R LEAD I N EXPAN D FO R MO
Slide 25: Unlock and Create Value in Australia and New Zealand
WOOLWORTHS HOLDINGS LIMITED ANNUAL RESULTS 2021 ANALYST PRESENTATION O U R I N S P I R AT I O N TO B E A L E A D I N G, P U R P O S E - D R I V E N , T R U LY C O N N E C T E D R E TA I L E R UNLOCK AND CREATE VALUE S T R AT E G I C F R A M E WO R K S T R AT E G I C T H E M E S ENABLERS P R OT E C T
Slide 26: Unlock and Create Value in Australia and New Zealand
WOOLWORTHS HOLDINGS LIMITED ANNUAL RESULTS 2021 ANALYST PRESENTATION O U R I N S P I R AT I O N TO B E A L E A D I N G, P U R P O S E - D R I V E N , T R U LY C O N N E C T E D R E TA I L E R UNLOCK AND CREATE VALUE S T R AT E G I C F R A M E WO R K S T R AT E G I C T H E M E S ENABLERS P R OT E C T
Slide 27: Drive Fashion Turnaround and Growth in Beauty and Home
WOOLWORTHS HOLDINGS LIMITED ANNUAL RESULTS 2021 ANALYST PRESENTATION O U R I N S P I R AT I O N TO B E A L E A D I N G, P U R P O S E - D R I V E N , T R U LY C O N N E C T E D R E TA I L E R DRIVE FASHION TURNAROUND AND S T R AT E G I C F R A M E WO R K S T R AT E G I C T H E M E S ENABLERS P R OT
Slide 28: Drive Fashion Turnaround and Growth in Beauty and Home
WOOLWORTHS HOLDINGS LIMITED ANNUAL RESULTS 2021 ANALYST PRESENTATION DRIVE FASHION TURNAROUND AND GROWTH IN BEAUTY AND HOME Quality over Price: Superior quality worth paying more for SAVVY SEGMENT Our primary focus TRENDSPOTTER Our secondary focus TREND Are time-pressed, they value quality and well-
Slide 29: Drive Fashion Turnaround and Growth in Beauty and Home
WOOLWORTHS HOLDINGS LIMITED ANNUAL RESULTS 2021 ANALYST PRESENTATION O U R I N S P I R AT I O N TO B E A L E A D I N G, P U R P O S E - D R I V E N , T R U LY C O N N E C T E D R E TA I L E R DRIVE FASHION TURNAROUND AND S T R AT E G I C F R A M E WO R K S T R AT E G I C T H E M E S ENABLERS P R OT
Slide 30: Drive Fashion Turnaround and Growth in Beauty and Home
WOOLWORTHS HOLDINGS LIMITED ANNUAL RESULTS 2021 ANALYST PRESENTATION O U R I N S P I R AT I O N TO B E A L E A D I N G, P U R P O S E - D R I V E N , T R U LY C O N N E C T E D R E TA I L E R DRIVE FASHION TURNAROUND AND S T R AT E G I C F R A M E WO R K S T R AT E G I C T H E M E S ENABLERS P R OT
Slide 31: Drive Fashion Turnaround and Growth in Beauty and Home
WOOLWORTHS HOLDINGS LIMITED ANNUAL RESULTS 2021 ANALYST PRESENTATION DRIVE FASHION TURNAROUND AND GROWTH IN BEAUTY AND HOME Single biggest opportunity to reset value for the Group – we are “editing to amplify” • Improving price proposition and architecture • R250m invested in price without compromis
Slide 32: Expand Leadership Position in Food
WOOLWORTHS HOLDINGS LIMITED ANNUAL RESULTS 2021 ANALYST PRESENTATION O U R I N S P I R AT I O N TO B E A L E A D I N G, P U R P O S E - D R I V E N , T R U LY C O N N E C T E D R E TA I L E R S T R AT E G I C F R A M E WO R K EXPAND LEADERSHIP POSITION IN FOOD P R OT E C T A N D G R OW O U R P R O F
Slide 33: Data-Driven Decision Making | Elevated Omni Experience
WOOLWORTHS HOLDINGS LIMITED ANNUAL RESULTS 2021 ANALYST PRESENTATION O U R I N S P I R AT I O N TO B E A L E A D I N G, P U R P O S E - D R I V E N , T R U LY C O N N E C T E D R E TA I L E R DATA-DRIVEN DECISION MAKING | S T R AT E G I C F R A M E WO R K S T R AT E G I C T H E M E S ENABLERS P R OT
Slide 34: Data-Driven Decision Making | Elevated Omni Experience
WOOLWORTHS HOLDINGS LIMITED ANNUAL RESULTS 2021 ANALYST PRESENTATION DATA-DRIVEN DECISION MAKING | ELEVATED OMNI EXPERIENCE We are prioritising capital and operational spend towards digital and data transformation • Increasing people capacity and capability and fundamentally changing processes and w
Slide 35: Cost Efficiency and Operational Excellence
WOOLWORTHS HOLDINGS LIMITED ANNUAL RESULTS 2021 ANALYST PRESENTATION O U R I N S P I R AT I O N TO B E A L E A D I N G, P U R P O S E - D R I V E N , T R U LY C O N N E C T E D R E TA I L E R COST EFFICIENCY AND S T R AT E G I C F R A M E WO R K S T R AT E G I C T H E M E S ENABLERS P R OT E C T A N
Slide 36: People and Leadership
WOOLWORTHS HOLDINGS LIMITED ANNUAL RESULTS 2021 ANALYST PRESENTATION O U R I N S P I R AT I O N TO B E A L E A D I N G, P U R P O S E - D R I V E N , T R U LY C O N N E C T E D R E TA I L E R PEOPLE AND LEADERSHIP S T R AT E G I C F R A M E WO R K S T R AT E G I C T H E M E S ENABLERS P R OT E C T A
Slide 37: Our Good Business Journey
WOOLWORTHS HOLDINGS LIMITED ANNUAL RESULTS 2021 ANALYST PRESENTATION O U R I N S P I R AT I O N TO B E A L E A D I N G, P U R P O S E - D R I V E N , T R U LY C O N N E C T E D R E TA I L E R OUR GOOD BUSINESS JOURNEY S T R AT E G I C F R A M E WO R K S T R AT E G I C P I L L A R ENABLERS P R OT E C
Slide 38: Outlook
WOOLWORTHS HOLDINGS LIMITED ANNUAL RESULTS 2021 ANALYST PRESENTATION OUTLOOK Trading environment likely to remain challenging; we will continue to take clear and decisive actions to accelerate profitable growth • The operating environment expected to remain challenging and volatile • Macroeconomic o
Slide 39: Focus Areas in FY22
WOOLWORTHS HOLDINGS LIMITED ANNUAL RESULTS 2021 ANALYST PRESENTATION FOCUS AREAS IN FY22 We expect to show ongoing and real progress against our strategic initiatives, to deliver on our commitments to you • Improve operational and financial performance in DJ • Explore new growth opportunities for CR
Slide 40: Focus Areas in FY22
WOOLWORTHS HOLDINGS LIMITED ANNUAL RESULTS 2021 ANALYST PRESENTATION FOCUS AREAS IN FY22 We expect to show ongoing and real progress against our strategic initiatives, to deliver on our commitments to you • Continue to drive digital engagement, investing in a new operating model to fast-track the bu
Slide 41: All Things That Are WHL
WOOLWORTHS HOLDINGS LIMITED ANNUAL RESULTS 2021 ANALYST PRESENTATION ALL THINGS THAT ARE WHL WHL 41 / 2021
Slide 42: Appendix
WOOLWORTHS HOLDINGS LIMITED ANNUAL RESULTS 2021 ANALYST PRESENTATION APPENDIX WHL 42 / 2021
Slide 43: Appendix Contents
WOOLWORTHS HOLDINGS LIMITED ANNUAL RESULTS 2021 ANALYST PRESENTATION APPENDIX CONTENTS 1. GROUP PERFORMANCE: H1, H2 AND FULL YEAR 2. GROUP AND SEGMENTAL INCOME STATEMENTS 3. GROUP BALANCE SHEET 4. AUSTRALIA BALANCE SHEET 5. IFRS 16 IMPACT BY SEGMENT 6. CAPEX BY BUSINESS 7. TRADING SPACE 8. STORE LOC
Slide 44: Group Performance
WOOLWORTHS HOLDINGS LIMITED ANNUAL RESULTS 2021 ANALYST PRESENTATION GROUP PERFORMANCE H1 H2 Full year Turnover and concession sales +5.3 to R43.0bn % +15 % to R42.9bn +9.7% to R85.9bn Adjusted profit before tax +25 % to R2.7bn >100to R1.9bn % +111% to R4.6bn Adjusted EBIT +15 % to R3.9bn +119 % to
Slide 45: Group Income Statement
WOOLWORTHS HOLDINGS LIMITED ANNUAL RESULTS 2021 ANALYST PRESENTATION GROUP INCOME STATEMENT Jun 2021 Jun 2020 % Rm Rm change Turnover and concession sales 85 857 78 262 9.7 Gross profit 28 947 25 349 14.2 Adjusted EBITDA 11 673 9 579 21.9 Adjusted EBIT 6 938 4 807 44.3 WSA Fashion, Beauty and Home 1
Slide 46: 2021 Group Segmental Income Statement
WOOLWORTHS HOLDINGS LIMITED ANNUAL RESULTS 2021 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 47: 2020 Group Segmental Income Statement
WOOLWORTHS HOLDINGS LIMITED ANNUAL RESULTS 2021 ANALYST PRESENTATION 2020 GROUP SEGMENTAL INCOME STATEMENT Woolworths Country David Road FBH Food Logistics WFS Jones Group Treasury Intragroup Group Jun 2020 Rm Rm Rm Rm Rm Rm Rm Rm Rm Turnover and concession sales 12 421 35 817 517 – 21 542 9 655 – (
Slide 48: Group Balance Sheet
WOOLWORTHS HOLDINGS LIMITED ANNUAL RESULTS 2021 ANALYST PRESENTATION GROUP BALANCE SHEET Strengthened Balance Sheet with reduced debt and higher equity; improvement in all metrics Constant Jun 2021 Jun 2020 currency Rm Rm % change Assets Property, plant and equipment 9 315 16 246 (39.2) Intangible a
Slide 49: Australia Balance Sheet
WOOLWORTHS HOLDINGS LIMITED ANNUAL RESULTS 2021 ANALYST PRESENTATION AUSTRALIA BALANCE SHEET Jun 2021 Jun 2020 A$m A$m Country Country David Road David Road Jones Group Total Jones Group Total Assets Property, plant and equipment 418 97 515 918 114 1 032 Intangible assets 1 & 2 87 362 449 91 367 458
Slide 50: IFRS 16 – Impact by Segment
WOOLWORTHS HOLDINGS LIMITED ANNUAL RESULTS 2021 ANALYST PRESENTATION IFRS 16 – IMPACT BY SEGMENT UPDATE TO GROUP LEASE PORTOLIO Group WSA DJ CRG Lease liabilities Rm Rm A$m A$m Jun 2020 28 599 6 727 1 379 471 Jun 2021 27 194 6 055 1 571 399 Number of leases: Jun 2020 1 034 509 64 461 Number of lease
Slide 51: Capital Expenditure – By Business
WOOLWORTHS HOLDINGS LIMITED ANNUAL RESULTS 2021 ANALYST PRESENTATION CAPITAL EXPENDITURE – BY BUSINESS Rm Depreciation and amortisation 3 500 % Jun 2021 Jun 2020 change R2.8bn 3 000 R2 .7bn Woolworths (Rm) 960 987 (2.7) R2.5bn A$56m David Jones (A$m) 64 73 (12.3) 2 500 Country Road Group (A$m) 33 40
Slide 52: Trading Space
WOOLWORTHS HOLDINGS LIMITED ANNUAL RESULTS 2021 ANALYST PRESENTATION TRADING SPACE Projected Projected Projected Jun 2021 Jun 2020 % Jun 2022 % Jun 2023 % Jun 2024 % 000m2 000m2 change 000m2 change 000m2 change 000m2 change Woolworths Fashion, Beauty and Home** 453 485 (6.4) 436 (3.8) 429 (1.6) 427
Slide 53: Store Locations
WOOLWORTHS HOLDINGS LIMITED ANNUAL RESULTS 2021 ANALYST PRESENTATION STORE LOCATIONS Projected Projected Projected Jun 2021 Jun 2020 Growth Jun 2022 Growth Jun 2023 Growth Jun 2024 Growth Woolworths Fashion, Beauty and Home 267 279 (12) 258 (9) 254 (4) 249 (5) South Africa 202 215 (13) 192 (10) 188
Slide 54: Disclaimer
WOOLWORTHS HOLDINGS LIMITED ANNUAL RESULTS 2021 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