Wesfarmers Limited · ASX:WES
Wesfarmers — H1 FY2015 Earnings Presentation
42 slides from Wesfarmers's earnings presentation, Feb 19, 2015
Slide 1: 2015 Half-Year results Supplementary information
2015 Half-Year results Supplementary information (To be read in conjunction with the 2015 Half-Year results briefing presentation) 19 February 2015 2015 Half-Year Results | 1
Slide 2: Presentation outline
Presentation outline Item Page Coles 3 Home Improvement & Office Supplies 7 Kmart 12 Target 16 Chemicals, Energy & Fertilisers 21 Resources 27 Industrial & Safety 36 Balance Sheet & Cash Flow 39 2015 Half-Year Results | 2
Slide 3: Coles
Coles 2015 Half-Year Results | 3
Slide 4: Coles network
Coles network As at 31 December 2014 Selling Area Supermarkets (sqm) 1,728,445 Liquor (sqm) – ex hotels 209,293 6 7 11 160 227 77 771 Supermarkets 88 110 5 69 125 853 Liquor stores 56 35 7 44 91 Hotels 243 274 2 210 652 Convenience 178 202 200 16 15 2015 Half-Year Results | 4
Slide 5: Store network movements
Store network movements Open at Open at 30 June Re- 31 Dec 2014 Opened Closed branded 2014 Supermarkets Coles 745 14 (4) 10 765 Bi-Lo 17 - (1) (10) 6 Total Supermarkets 762 14 (5) - 771 Liquor 1st Choice 98 3 (1) - 100 Vintage Cellars 77 5 (2) - 80 Liquorland 656 30 (13) - 673 Hotels 90 1 - - 91 Tot
Slide 6: Revenue reconciliation
Revenue reconciliation 2014 2013 6 months ended Food & Food & 31 December ($m) Liquor Convenience Total Liquor Convenience Total Segment revenue (Gregorian)1 15,559 3,924 19,483 14,770 4,176 18,946 Less: Other revenue (141) (7) (148) (146) 6 (152) Headline sales (Gregorian) 15,418 3,917 19,335 14,62
Slide 7: Home Improvement & Office Supplies
Home Improvement & Office Supplies 2015 Half-Year Results | 7
Slide 8: Bunnings network
Bunnings network As at 31 December 2014 3 228 Warehouse stores 63 Smaller format stores 41 7 8 33 Trade Centres 27 9 4 11 3 2 67 16 7 18 20 4 51 7 6 4 1 1 6 1 2015 Half-Year Results | 8
Slide 9: Officeworks network
Officeworks network As at 31 December 2014 1 28 1 153 Officeworks Stores 15 1 4 Fulfilment Centres 8 1 Service Centres 50 1 1 Print Hub 1 1 49 1 2 2015 Half-Year Results | 9
Slide 10: Store network movements
Store network movements Under Open at Open at construction Opened Closed 31 Dec 1 July 2014 at 31 Dec 2014 2014 Home Improvement Bunnings Warehouse 223 8 (3) 228 19 Bunnings smaller formats 64 1 (2) 63 3 Bunnings Trade Centres 33 3 (3) 33 0 Office Supplies Officeworks 151 3 (1) 153 2 Harris Technolo
Slide 11: Home Improvement performance summary
Home Improvement performance summary Half-Year ended 31 December ($m) 2014 2013 % Revenue 4,959 4,434 11.8 EBITDA 686 625 9.8 Depreciation & amortisation (68) (63) (7.9) EBIT 618 562 10.0 EBIT margin (%) 12.5 12.7 Less: Net property contribution1 14 6 Trading EBIT 604 556 Trading EBIT margin (%) 12.
Slide 12: Kmart
Kmart 2015 Half-Year Results | 12
Slide 13: Kmart network
Kmart network As at 31 December 2014 200 Kmart stores 2 3 246 KTAS centres 41 53 22 25 15 18 52 75 14 45 68 5 4 4 2015 Half-Year Results | 13
Slide 14: Store network movements
Store network movements Open at Open at 1 July 2014 Opened Closed 31 Dec 2014 Kmart 192 8 - 200 Kmart Tyre & Auto 243 5 (2) 246 2015 Half-Year Results | 14
Slide 15: Revenue reconciliation
Revenue reconciliation Half-year ended 31 December ($m) 2014 2013 Segment revenue (Gregorian) 2,442 2,321 Less: Non sales revenue (2) (3) Headline sales (Gregorian) 2,440 2,318 Add: Gregorian adjustment1 50 47 Headline sales revenue (Retail2) 2,490 2,365 1 Adjustment to headline sales revenue to ref
Slide 16: Target
Target 2015 Half-Year Results | 16
Slide 17: Target network
Target network As at 31 December 2014 183 Large 2 1 126 Small 32 32 21 11 17 12 58 43 48 26 5 1 2015 Half-Year Results | 17
Slide 18: Store network movements
Store network movements Under Open at Open at 31 construction at 1 July 2014 Opened Closed Dec 2014 31 Dec 2014 Large 180 5 (2) 183 - Small 128 4 (6) 126 - 2015 Half-Year Results | 18
Slide 19: Revenue reconciliation
Revenue reconciliation Half-year ended 31 December ($m) 2014 2013 Segment revenue (Gregorian) 1,935 1,965 Less: Non sales revenue - - Headline sales (Gregorian) 1,935 1,965 Add: Gregorian adjustment1 42 48 Headline sales revenue (Retail2) 1,977 2,013 1 Adjustment to headline sales revenue to reflect
Slide 20: Target transformation plan
Target transformation plan Fixing the basics (FY14-15) Growth & efficiency (FY16-17) The Target difference (FY18) • Improve availability • Integrated ‘bricks & clicks’ • Maximise SKUs on replenishment • Enhance online functionality • Differentiated store format • Roll-out renewal program • Improve s
Slide 21: Chemicals, Energy & Fertilisers
Chemicals, Energy & Fertilisers 2015 Half-Year Results | 21
Slide 22: Fertiliser sales
Fertiliser sales Strong Nitrogen sales resulting in 63% higher sales volumes in 1H15 kt 1,200 2nd Half 1st Half 1,000 800 600 714 713 610 779 400 200 244 227 220 260 160 0 FY2011 FY2012 FY2013 FY2014 FY2015 2015 Half-Year Results | 22
Slide 23: Global fertiliser & ammonia pricing
Global fertiliser & ammonia pricing Continued volatility in Fertiliser pricing US$/t 800 Urea (FOB Middle East) DAP (FOB US Gulf) Ammonia (FOB Middle East) 700 600 500 400 300 200 100 0 Dec-09 Jun-10 Dec-10 Jun-11 Dec-11 Jun-12 Dec-12 Jun-13 Dec-13 Jun-14 Dec-14 2015 Half-Year Results | 23
Slide 24: PVC-VCM spread
PVC-VCM spread • The ‘PVC – VCM spread’ refers to the difference between the Asian PVC selling price & VCM input cost Further declines in the PVC-VCM spread in 1H15 $/t 300 FY Average US$/t FY Average A$/t 250 200 150 100 50 0 Dec-04 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Dec
Slide 25: World LPG prices – Saudi CP
World LPG prices – Saudi CP Significant & sharp decline in 1H15 $/t 1,400 Saudi CP US$/t (propane) Saudi CP A$/t (propane) 1,200 1,000 800 600 400 200 0 Dec-04 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 2015 Half-Year Results | 25
Slide 26: LPG production
LPG production Further declines in content leading to 17% lower production in 1H15 kt Ave t/TJ 200 0.9 150 0.8 100 0.7 50 0.6 0 0.5 FY09 FY10 FY11 FY14 FY15 H1 WLPG production (kt) H2 WLPG production (kt) H1 average LPG content (t/TJ) FY average LPG content (t/TJ) 2015 Half-Year Results | 26
Slide 27: Resources
Resources 2015 Half-Year Results | 27
Slide 28: Business environment
Business environment • Continued challenging global trading conditions for coal producers • Metallurgical coal market remains in near term over supply – Significant supply side volume reduction & mine closure announcements yet to impact price – Demand side volatility remains, driven by China • Curra
Slide 29: Australian coal market prices
Australian coal market prices Australian steaming coal prices Australian hard coking coal prices US$/tonne (nominal) FOB Australia (annual verse spot) US$/tonne (nominal) FOB Australia (annual verse spot) 250 400 200 350 300 150 250 200 100 150 100 50 50 0 0 2004 2005 2006 2007 2008 2009 2010 2011 2
Slide 30: Curragh export metallurgical sales product mix
Curragh export metallurgical sales product mix 1H FY15 Actual FY15 Forecast 4.3 million tonnes 8.0 - 9.0 million tonnes 2015 Half-Year Results | 30
Slide 31: Coal production volumes
Coal production volumes Half-Year Ended (‘000 tonnes) Mine Ownership Coal Type Dec 2014 Dec 2013 Curragh, QLD 100% Metallurgical 4,580 4,029 Steaming 1,543 1,740 Bengalla, NSW1 40% Steaming 1,658 1,685 Total1 7,781 7,454 1 Wesfarmers attributable production. 2015 Half-Year Results | 31
Slide 32: Coal sales volumes
Coal sales volumes Half-Year Ended (‘000 tonnes) Mine Ownership Coal Type Dec 2014 Dec 2013 Curragh, QLD1 100% Metallurgical 4,271 4,053 Steaming 1,542 1,829 Bengalla, NSW2 40% Steaming 1,726 1,787 Total1 7,539 7,669 1 Curragh metallurgical coal sales excludes traded coal. 2 Wesfarmers attributable
Slide 33: FX hedging profile: 31 December 2014
FX hedging profile: 31 December 2014 Curragh Bengalla Year Current US$ Average Current US$ Average end 30 sold forward A$ / US$ Year end sold forward A$ / US$ Jun (US$m) hedge rate 30 Jun (US$m) hedge rate 2015 282 0.87 2015 79 0.89 2016 430 0.88 2016 154 0.89 2017 258 0.86 2017 81 0.86 2018 108 0.8
Slide 34: Resources financial summary
Resources financial summary Half-Year ended 31 December 2014 2013 Commentary Production tonnes – (‘000 tonnes) Record metallurgical coal production achieved at Curragh for the first Curragh & Bengalla1 7,781 7,454 half Revenue ($m) Produced 681 761 Traded 8 3 Total 689 764 Lower average export price
Slide 35: Coal Reserves and Resources Notes
Coal Reserves and Resources Notes • On 28 November 2014, Rio Tinto announced that it had increased its assessment of total ROM coal reserves for the Bengalla mine to 271 million tonnes.1 Wesfarmers is evaluating Rio Tinto’s updated assessment preparatory to its own usual annual 30 June resources and
Slide 36: Industrial & Safety
Industrial & Safety 2015 Half-Year Results | 36
Slide 37: Our business portfolio
Our business portfolio Generalists Safety Specialists Industrial Specialists The broadest range of Ensuring every person is safe, Depth of expertise industrial & safety supplies every day, through market in technical fields critical to and services at competitive leading products & service customer
Slide 38: Distribution network: 471 locations
Distribution network: 471 locations As at 31 December 2014 251 branches, 165 gas distribution points & 55 Workwear franchise locations 90 Generalists 1 UK 70 Blackwoods (incl Indonesia) 1 UAE 20 Blackwoods Protector 1 1 Indonesia 79 Safety Specialists 2 3 1 37 Protector Alsafe 1 1 4 16 14 12 23 NZ S
Slide 39: Balance Sheet & Cash Flow
Presentation Balance Sheetoutline & Cash Flow 2015 Half-Year Results | 39
Slide 40: Overview of the Group balance sheet
Overview of the Group balance sheet 1H14 ($m)1 Restated2 FY14 1H15 Commentary Inventories 5,781 5,336 6,080 Receivables & prepayments 1,672 1,805 1,644 Detailed working capital discussion provided on Trade & other payables (5,933) (5,424) (6,383) slide 41. Other 521 403 501 Net working capital 2,041
Slide 41: Balance sheet – working capital
Balance sheet – working capital 1H14 ($m)1 Restated2 FY14 1H15 Commentary • Retail divisions seasonally higher against June • Inventory increased by $299m (1H15 v 1H14) Inventories 5,781 5,336 6,080 HIOS: Higher inventory following store network expansion WIS: Increase due to acquisition of Workwear
Slide 42: Wesfarmers
0s Wesfarmers