Slide 1: Woolworths Limited
00 -WORTHS LIMITER 2 A.B.N. 38.0009) i Z
Slide 2: Group sales by division
Supermarkets and Liquor Petrol Total Supermarkets Big W Consumer Electronics Total General Merchandise Continuing operations Wholesale Group Sales HY02 HY03 $million $million Inc 10,177.0 11,217.0 10.2% 504.0 834.0 65.5% 10,681.0 12,051.0 12.8% 1,292.0 1,437.0 11.2% 354.0 435.0 22.9% 1,646.0 1,872.0
Slide 3: Sales growth FY99 to FY03
FY99 FY00 FY01 FY02 FY03 H1 H2 Yr H1 H2 Yr Ht H2 Yr Hi H2 Yr Ht H2 Yr 304 25} 24.5 20; 1511175 $ Billion 104 “. H1 Increase H2 Increase +9.4% +7.4% H2 increase ' 19.4% +7.4%, Year Increase +9.5%. +8.6% Year increase * 49.5% +8.6% Year increase? 49.5% +8 6% 1 Normalised to eliminate the effect of the
Slide 4: Cost of doing business reduction
25 _— 24 + 23 + 24.10 % 21 +- 20 - 19 = Cost Reduction 1999 2000 1.23% x $10.3 b $127 m 21.91% 2001 A 2.19% x $11.2 b $245 m 2002 A 2.48% x $12.8 b $317 m Down 31 9A ROY 21.62% 1.31% 2 2003 A 2.79% x 14.1 b $393 m , Down 279 _ Pts in HYO2__ pts in 4 half years = $1,082:
Slide 5: Gross margin reduction
Margin 1.21% x $10.3b 2.10% x$11.2b 2.21% x$128b 2.44% x $14.1b 28 - Reduction $125 m $235 m $283 m $344 m | = $987 m 27.56% | 27 7 Down 23 PTS in HY03 26.35% Down 24+ v PTS in 4 Hi fy 26 7 y Years 25.46% 25.35% _¥ 25.12% 25 - 24 + 1999 2000 2001 2002 2003
Slide 6: EBIT growth FY99 to FY03
FY99 FYO0O FY01 FY02 FY03 H1 H2 Yr H1 H2 Yr H1 H2 Yr H1 H2 Yr H1 H2 Yr 1000, ~ 900; 800; 947+ 7005 833 # 600, y an7 $ 500; 622 Mii 400; 539 300, 200, 49 1001 400 NCREASE: oe a ss H1 45.7%. FAO2% +11.7% 418.8%. 443.7% — H2 + 2.7% _#23.4% +16.3% _ H166%* ——H1BT%H H2 Normalised #.+2.7% $23.4 %_ +16.3%
Slide 7: EBIT margin
FY99 FYO00 FY01 FY02 FY03 H1 H2 Yr H1 H2 Yr H1 H2 Yr H1 H2 Yr H1 H2 Yr 4.00, 3.75} 3.50 3.255 % 3.007 2.757 2.507 2.25; 2.00 BIT Margin a ae a H1 3.46% 3.48% 3.55% 3.73% 3.81% H2 2.64% 3.03% 3.16% 3.05% 3.36%" Year 3.08% 3.27% 3.38% 3.40% 3.61%" * Based on analyst consensus sales and EBIT forecasts
Slide 8: EBIT by division
Food and Liquor Petrol Total Supermarkets Big W Consumer Electronics Total General Merchandise Total trading result Property Central overheads Continuining Operations Wholesale Total Group EBIT Jan-02 Jan-03 Change Before After Before ‘After Before After Goodwill Goodwill Goodwill Goodwill Goodwill
Slide 9: Supermarkets results
HY02 HY03 CHANGE Sales ($ mil) 10,681.0 12,051.0 +12.8% Gross Margin (%) 24.94 24.47 -0.47%pts Cost of Doing Business (%) 21.21 20.62 -0. 59%pts EBIT to Sales (%) 3.73 3.85 +0.12%pts EBIT (after goodwill) ($ mil) 398.1 463.4 16.4% EBIT (before goodwill) ($ mil) 407.4 476.2 16.9% Funds Employed ($ mi
Slide 10: Supermarkets highlights
¢« Supermarket sales grew 12.8% (10.2% excluding Petrol) for the half. * Comparable store sales growth was 5.1% (Q1 5.5% : Q2 4.8%). ¢ — Inflation in a Woolworths basket for the half year was between 1.5% and 2.0%. * Market share of Food, Liquor & Groceries increased by 0.7% in the half year. « EBIT
Slide 11: BIG W results
HY02 HY03 CHANGE Sales ($ mil) 1292.0 1437.0 +11.2% Gross Margin (%) 30.69 30.31 -0.38%pts Cost of Doing Business (%) 24.72 24.33 -0.39%pts EBIT to Sales (%) 5.97 5.98 +0.01%pts EBIT * ($ mil) 77.1 86.0 +11.50% Funds Employed ($ mil) 261.9 288.7 +10.20% ROFE (%) 29.40 29.80 +0.40%pts * No purchased
Slide 12: BIG W highlights
Double digit sales growth (+11.2%) and profit growth (+11.5%) in a competitive market. Comparable store sales increased 4.2% (Q1: 6.5%; Q2: 2.6%). October sales were impacted by Bali. December was up on a strong Christmas last year. Strong growth in Apparel, Appliances, Toys and Sporting goods. Cust
Slide 13: Consumer Electronics results
Sales ($ mil) Gross Margin (%) Cost of Doing Business (%) EBIT to Sales (%) EBIT (after goodwill) ($ mil) EBIT (before goodwill) ($ mil) Funds Employed ($ mil) ROFE (%) CHANGE +22.9% -4.20%pts -3.75%pts -0.45%pts +12.8% +13.6% +3.9% +.07%pts
Slide 14: Consumer Electronics highlights
New management team, led by Greg Foran, has made strong progress rebuilding this business in line with plan. Sales grew 22.9%, with comparable store sales up 18.1%. All categories performed well, particularly DVDs, electronics, gaming and mobile phones. Transition to everyday low pricing (EDLP) inst
Slide 15: Net profit ($ million)
349.6 $ Million 1999 2000 2001 2002 2003
Slide 16: Earnings per share (cents)
Cents HY 1999 HY 2000 HY 2001 HY 2002 HY 2003
Slide 17: Dividends per share (cents)
Cents HY 1999 HY 2000 HY 2001 HY 2002 HY 2003
Slide 18: Project Refresh savings
* Annual “Refresh” savings over the next five years to be in the order of 1% of annual sales — Benefits will continue to flow from Refresh level 1 — Most of the additional savings over the next five years will come from Supply Chain initiatives ¢ Project Refresh savings of at least 0.2% will be shar
Slide 19: Project Refresh levels
Level ML - - Development Level I Hl : = Supply Chain = Level L - Reorganisation j line tems
Slide 20: Project Refresh cumulative savings
PA OAVITNIGsS 2 THINOT 1,200 - 900 600 8 year cumulative savings = $5.1 billion 3.11% of sales Additional 1% of sales to 3.11% cumulative 925 3 year cumulative savings = | 3 year cumulative savings = $1.0 billion | 0 billion | 2.11% of sales _| of sales 517 x all i] 595 Savings in years 4 to 8 = $4.
Slide 21: Balance sheet and timing adjustments
2002 2003 Timing Difference $miltion $miltion Adjustments Funds Employed Inventory 2,082.2 2064.1 Trade Payables {2,237.2} (4,949.2) Payables increase to (2,409.2) Net investment in inventory (155.0) 144.9 Receivables 454.1 486.1 Other creditors (1,005.3) (1,109.9) Working Capital (706.2) (478.9) Ne
Slide 22: Balance sheet remains strong and conservative
Balance Sheet remains strong and conservative * Working capital grows increasingly negative with: —- Inventory falling $18 million (4.7 days) on last year despite sales growth of 10.9% - Trade creditors growing slightly less than sales after adjusting for timing issues * Net capital expenditure of $
Slide 23: Cash flow
-BITDA terest paid (including cost of Income notes) axation paid let reduction (increase) in working capital ther operating cashflows ‘otal cash provided by operating activities Payments for refurbishment of ex-Franklins stores Payments for the purchase of businesses - Franklins ~ Other -ayments for
Slide 24: Share buy-back structure and benefits
Structure Offer to buy-back approximately $500 to $600 million (4% to 6% of issued capital). Price determined by tender. All shareholders eligible to participate. Shareholders can tender any number of their shares within the range of $9.00 to $11.70. By agreement with Australian Taxation Office buy-
Slide 25: Balance sheet impact and cashflow
Balance Sheet Impact and Cashflow « Fixed charges cover ratio will remain well above internal minimum (2.2 times) after buy-back. * Net repayable debt is $332 million at 12/01/03 adjusted for the buy-back (assume $500 million) and creditor timing. « Anticipate return to a net cash position within 18
Slide 26: Buy-back timetable
Event Date Cut-off date for franking credit entitlement under 45 day rule 25/02/03 Determination of shareholders entitled to participate in the 05/03/03 buy-back (Record Date) Tender period opens 17/03/03 Record Date for interim dividend 02/04/03 Tender period closes 5.00pm (Sydney time) on 11/04/03
Slide 27: Days inventory
Four year reduction = 7.8 days For the full year anticipate about 2 days down on previou: 47} 46.0 IE Reduction 44 5 ad 42:9 of 4.7 days _ Days 1999 2000 2001 2002 2003
Slide 28: Funds employed
2600 , 2558.4 2537.4 2521.9 2400 Including 2222.8 $490 million 2200 - creditors 1985.3 payments = 2000 | 2 = 1800 ; S Excluding w 1600 5 $490 million creditors 1400 - payments 1200 - 1000 -; 1 1 - 1999 2000 2001 2002 2003 Funds employed distorted by $490 million payment of creditors at half year end
Slide 29: Return on funds employed
28 - 26.50 % 24 - Adjuste ROFE 21.40 % 20.10 % 20 - eon Actual 16 5 1999 2000 2001 2002 2003 This measures the pre-tax return on funds employed regardless of how they are financed
Slide 30: Performance against guidance
FY00 FY01 FY02 FY03 Hi H2 Ht H2 H1 H2 H2 Hi Actual Actual Actual Actual Actual Actual Normalised Actual Sales will grow in the high single digits supported by bolt on acquisitions 95% 7.0% 92% 11.2% 134% 21.2% 16.6% 0.9% EBIT will outperform sales growth driven by cost savings 10.2% 234% 11.7% 163%
Slide 31: Sales and earnings guidance
Sales « Sales for the first 5 weeks of the 24 week H2 have been strong — Supermarket sales up more than 7% (comparable store sales over 5%) ~— BIG W sales up more than 8% (comparable store sales over 4%) — Consumer Electronics sales up more than 10% (comparable store sales over 10%) « Sales guidance
Slide 32: Opportunities for continuing growth
Considerable opportunities for continuing growth in both revenues and earnings * Market share of Food, Liquor & Grocery (FLG) remains below 30% and still low by world standards. « Adding 15 - 25 new supermarkets each year (3% space rollout). . . Supported by detailed plans for Adding 6 -10 BIG W sto
Slide 33: Appendices
Appendices
Slide 34: Number of stores
1700 - 1500 - 1300 - 1100 - 900 - 700 - No. of Stores 500 - 300 - 100 FY99 FY0O FY01 FY02 HY03 @ Supermarkets @ Liquor @ Petrol BBIGW @ Dick Smith
Slide 35: Trading area (sqm)
SQM (000'S) FY 99 FY 00 FY 01 FY 02 2,243 HY 03
Slide 36: Key financial ratios
ixed charges cover Xx ays inventory (to cost of sales) Days Jays creditors (to sales) Days ‘eturn on Funds Employed (pre tax) ROFE % ‘eturn on Total Equity % ‘eturn to Noteholders (pre tax) % ‘eturn on Shareholders Equity (post tax) % let working capital 3.7 26.6 3.9 21.5 $M (706.2) (478.9) Rating o
Slide 37: Fixed charges cover
D&A 174.6 197.7 EBITDAR 1,005.4 1,141.3 Interest 31.3 22.0 WINS contingent coupon 21.5 22.5 Rent - base 291.0 330.5 Rent - turnover contingent 42.8 44.0 Rent - store fitout 21.7 29.4 Total Fixed Charges 408.3 448.4 Fixed Charges Cover 2.46 * 2.55 * Fixed charges excluding contingent rent and interes
Slide 38: Central overheads and net property income
HY02 HY03 Change% Central Overheads (41.6) (43.5) 4.6% Net Property Income 19.1 14.4 -24.6% - Increase in central overheads less than half the rate of sales growth - Net property income 4.7 million below last year, due to: $1.1 million gain on disposal reported in H1 last year, compared with $0.3 mi
Slide 39: Quality of earnings
Virtually all reported revenue is translated into cash in the same year as earned Free cash exceeds profit after tax No significant non recurring items Result includes a smail loss on disposal of property plant and equipment ($2 million) Income tax expense is close to the headline tax rate Minimal c