Slide 1: For personal use only
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Slide 2: Agenda and presenters
For personal use only Grant O'Brien Group Performance and Strategic Priorities Tjeerd Jegen Australian Supermarkets and Petrol Brad Banducci Woolworths Liquor Group Dave Chambers New Zealand Supermarkets Grant O'Brien General Merchandise Matt Tyson Home Improvement David Marr Group Financial Perform
Slide 3: Group results FY14 continuing operations
Continuing Operations For personal use only Total Group Before Significant Items1 Change Change FY14 Change Normalised2 FY14 Change Normalised2 Sales $60.8b 2.7% 4.7% $60.8b 3.9% 5.9% EBIT $3,775.2m 4.7% $3,775.2m 3.3% 5.3% NPAT $2,451.7m 8.5% $2,451.7m 4.2% 6.1% EPS 196.5¢ 7.6
Slide 4: EBIT by business segment
Change For personal use only $ million FY14 FY13 Change Normalised1 Australian Food, Liquor and Petrol2 3,368.0 3,199.3 5.3% 7.2% New Zealand Supermarkets (NZD) 309.8 302.7 2.3% 4.2% New Zealand Supermarkets 271.4 236.2 14.9% 17.1% General Merchandise 152.9 191.3 (20.1)% (18.8)% Hotels 275.4 263.7 4
Slide 5: Strategic priorities
PS ACT ON OUR PORTFOLIO TO O94 MAXIMISE SHAREHOLDER VALUE 4 MAINTAIN OUR TRACK RECORD OF BUILDING NEW GROWTH BUSINESSES | Parag PUTIN PLACE THE ENABLERS Sad FOR A NEW ERA OF GROWTH WOOLWORTHS LIMITED
Slide 6: FY14 Progress: Australian Food & Liquor
FY14 Progress Australian Food & Liquor - Sales Growth (%) For personal use only • Improving comparable sales, EBIT growth and market share over Comparable the past 3 years 4.7%1 4.7%1 Total • Delivered excellent value with key Supermarkets promotional campaigns providing more than $750m in savings t
Slide 7: FY14 Progress: Online and Masters
FY14 Progress Online Sales Growth ($b) / Sales Growth (%) For personal use only • Online sales of over $1.2b for FY14, increasing by 50% on FY13 • Australia's market leading online Food and Liquor offers, with strong growth in our Australasian Apparel business • New Zealand's market leading online F
Slide 8: FY14 Progress: supply chain and customer insights
FY14 Progress For personal use only • 5.9m Everyday Reward cardholders at beginning of year • Continued to invest in technology to enable our online growth • Opened BIG W state of the art DC in Hoxton Park NSW and National DC in South Auckland New Zealand • Building on our world class supply chain t
Slide 9: FY14 Progress: leadership, portfolio and more to do
FY14 Progress For personal use only • New leadership team who will further develop the strategy • Acquired 12 Compass Group hotels and bring additional focus on execution and operational excellence • Dick Smith strategic review complete • Completed phase 1 of category and space changes • Commenced t
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Slide 11: Australian Supermarkets and Petrol
ia cE Nh SUPERMARKETS TJEERD JEGEN MANAGING DIRECTOR AUSTRALIAN SUPERMARKETS & PETROL
Slide 12: Trading Performance
Trading Performance For personal use only • Food & Liquor FY14 comparable sales growth was 3.0% with growth stronger than FY13 as customers have responded to increased value and our improved offer Sales – Food & Liquor ($m) 41,171 40,031 2.8% 4.7% • Increases in market share, customer numbers, baske
Slide 13: Fresh food and unbeatable value
1. First choice for fresh food 2. Unbeatable value • Fresh market share grew faster than Grocery, in line with our strategy • Key promotional campaigns generated savings of $750m for customers For personal use only • Improved supply chain capabilities, delivering fresher produce and • Deflation in a
Slide 14: Online retailing
3. Online retailing • Woolworths Online continues to lead the way in the retail grocery and alcohol category For personal use only • Online sales growth of more than 40% in FY14 with over 3m items delivered to customers each week • Australia’s first full range dedicated online fulfilment grocery sto
Slide 15: Customer insights and innovative offers
4. Customer insights transforming our business 5. Innovative offers • We are using data to refine our store layouts and ranges to • Family engagement and customer loyalty created through our For personal use only meet customers' evolving needs Collectables campaigns • Everyday Rewards members increa
Slide 16: Petrol trading performance and objectives
Trading Performance Progress Against Objectives For personal use only 1. Provide customers with a compelling fuel offer • Continued investment in forecourt improvements, providing customers with better access to diesel, premium fuels and fast • Sales increased by 6.0%1 driven by flow fuel pumps high
Slide 17: Woolworths Liquor Group
WOOLWORTHS LIQUOR GROUP BRAD BANDUCCI DIRECTOR OF LIQUOR
Slide 18: Liquor sales growth
For personal use only $ billion Comments • Strong result for the year across all FY10 5.6 6.8% three formats – Dan Murphy’s (Destination) – BWS (Convenience) – The Wine Quarter (Online FY11 5.9 5.5% and Direct) • Improved access through growing store network and continued online FY12 6.6 12.1% innov
Slide 19: Dan Murphy's and BWS
1. Continuing to evolve Dan Murphy’s 2. Developing the BWS brand and convenience offer • Continued to expand our footprint as Australia’s premier liquor • We continued to grow BWS, Australia’s largest liquor retailer, now with For personal use only destination, now with 186 stores including 11 new s
Slide 20: Online and Direct, own brands
3. Maintaining leadership in Online and Direct via The 4. Increasing own and exclusive brand penetration through Wine Quarter Pinnacle Drinks • danmurphys.com.au further embedded its position as the premier • Providing customers with enhanced ranges as we continue to build our For personal use only
Slide 21: Hotels trading performance
Trading Performance For personal use only • FY14 comparable sales increased 1.0% impacted by – Subdued trading conditions in Victoria and Queensland where the majority of hotels are located – Change to tax rates in Victoria applying to EGM revenue from Sales ($m) 1,472 1,469 0.2% 2.2% 1 May 2014 – T
Slide 22: Hotels strategic priorities
1. To be Australia’s most responsible 3. Evolve our offer to meet operator of local pubs 2. Grow our network customer needs • Industry leading hotel and gaming charter • Utilised opportunities to develop our • Expanding the depth of our bar ranges to cater For personal use only underpinning our comm
Slide 23: New Zealand Supermarkets
Kg NZ Gala Apples DAVE CHAMBERS MANAGING DIRECTOR
Slide 24: Trading Performance
Trading Performance For personal use only • FY14 comparable sales growth was 0.3% which reflects ongoing subdued grocery market conditions and price deflation across a number of key categories Before Significant Items2 • We have continued to improve our competitiveness in the market and lowered pric
Slide 25: Customer value and local sourcing
1. Customer value and innovative offers 2. Leverage local sourcing • Providing increased value to customers via our ‘Price Lockdown’ • 96% of sales are sourced from suppliers that are owned or have a base For personal use only campaign with its range of everyday lower price products, including in Ne
Slide 26: Online and network growth
3. Online 4. Grow Countdown and franchise network • Sales from countdown.co.nz, New Zealand’s leading online food site, • Opened 5 new Countdown stores (net) during FY14, with the network For personal use only increased more than 20% in FY14 now 171 stores • Continued site functionality and service
Slide 27: General Merchandise
& 9 (or = © ) ie, (a) a © GENERAL MERCHANDISE
Slide 28: Trading Performance
Trading Performance For personal use only • Comparable sales decreased 3.1% for FY14, impacted by the previously advised transformation of BIG W, highly competitive trading conditions and ongoing price deflation (3.6% for FY14) • Gross margin improvement primarily reflects the acquisition of EziBuy
Slide 29: Transforming our business for the future
1. Transforming our business for the future For personal use only • First phase of category and space changes completed across 133 stores, rationalising space in non-core categories such as Entertainment and expanding our offer in Toys and Footwear • New BIG W senior leadership team introduced, incl
Slide 30: Winning on value and online ambition
3. Growing our store footprint whilst realising our 2. Focus on winning on value everyday Online ambition • Relaunched our BIG W ‘Lowest Price Guarantee’, increasing our • Integration of EziBuy is progressing well with its world class distribution For personal use only commitment of giving the best
Slide 31: Home Improvement
Home Improvement ee HOME IMPROVEMENT MATT TYSON MANAGING DIRECTOR
Slide 32: Trading Performance
Trading Performance For personal use only • Despite the 42% increase, Masters sales were lower than expected and were impacted by a highly competitive market and the Federal Budget’s impact on consumer confidence. Losses before interest and tax were Sales ($m) higher than anticipated • Masters remai
Slide 33: Home Improvement market rationale
For personal use only Rationale for entering the market remains as strong as ever with a large, growing and fragmented market We have quickly built a foundation of 49 stores with a pipeline focused on key metro areas taking advantage of the growth of big box Home Improvement retailers In a short per
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Slide 35: Balance sheet and working capital
$ million FY14 FY13 Change For personal use only Inventory 4,693.2 4,205.4 11.6% • Closing inventory increase was driven by new store openings, in particular, 34 Australian Supermarkets (net) Trade Payables (4,657.1) (4,080.0) 14.1% and 18 Masters stores since FY13, increased direct global sourcing,
Slide 36: Inventory days
For personal use only Number of Days Comments • Average inventory increased FY10 31.0 1.9 days impacted by the continued roll out of Masters stores and incremental global sourced inventory FY11 31.5 • Excluding these, average inventory increased 0.3 days • Closing inventory increased 2.1 days on FY1
Slide 37: Cash flow
$ million FY14 FY13 Change Total EBITDA 4,771.5 4,572.5 4.4% For personal use only • Cash flow from operating activities before interest and Gain on disposal of Consumer Electronics businesses - (9.9) tax increased 19.8%, impacted by differences in the timing Change in net investment in inventory 10
Slide 38: Dividends and capital returns
$ billion Comments For personal use only Interim dividend Buy back • In FY14, we have continued Final dividend In-specie distribution to grow dividend payments to shareholders CAGR: 13.8% • Payout ratio of 70% is in line with FY131 2.2 2.2 0.7 0.5 1.7 1.7 1.6 0.3 0.9 0.9 0.9 1.3 0.8 0.7 1.1 0.7 0.9
Slide 39: Return on funds employed
For personal use only Percentage Comments • ROFE from continuing FY10 31.0% operations before significant items was 27.0% • On a normalised 52 week basis FY11 29.3% ROFE decreased 50 bps • Excluding the investment in our Home Improvement business, ROFE increased 57 bps FY12 27.8% FY13 28.0% 32.4%2 F
Slide 40: Outlook
• Our businesses are well positioned to continue to deliver exceptional value to For personal use only customers through a focus on our four Strategic Priorities, providing growth and attractive returns for our shareholders • However, we expect trading conditions to remain challenging in FY15 with c
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Slide 43: Gross margin
For personal use only Percentage Comments • GP margin increased 17 bps on the FY10 25.91% prior year reflecting – Improvements in buying – More effective promotional activity FY11 26.03% – Growth in exclusive brand ranges – Positive changes in sales mix FY12 26.40% • We continued to reinvest in lowe
Slide 44: Cost of doing business margin
For personal use only Percentage Comments • CODB margin increased 20 bps on the FY10 19.95% prior year • Excluding non-comparable additional net costs in FY14 following the SCA transaction and the Home FY11 19.98% Improvement business which remains in start up phase, CODB margin increased 7 bps, ref
Slide 45: Capital expenditure
2013 2014 2015 Normal and Ongoing Capex $m, Capex % to Sales $ million – Full Year Actual Actual Fcst For personal use only New Stores 300 266 Capex Spend $m Capex as a % to Sales 2,000 4% Refurbishments 478 405 1,500 3% Growth Capex 778 671 1,000 2% 500 1% Supply Chain, IT, Online and Stay in Busin
Slide 46: Disclaimer
This presentation contains summary information about Woolworths Limited (Woolworths) and its activities current as at the date of this presentation. It should be read in conjunction with Woolworths’ other periodic and continuous disclosure announcements filed with the Australian Securities Exchange,