Woolworths Holdings Limited · JSE:WHL
Woolworths — FY2006 Earnings Presentation
19 slides from Woolworths's earnings presentation, August 2006
Slide 1: A year of change and growth
woolworths holdings limited a year of change and growth • Revenue up 16.6% to R15.1bn • Operating profit up 21.0% to R1.5bn • Operating profit margin widening from 9.5% to 9.8% • HEPS up 17.4% to 105 cps • HEPS pre-STC up 22.9% to 109.9cps • Effective tax rate including STC of 32.8% (June 05: 27.8%*
Slide 2: Change and growth
woolworths holdings limited change and growth • Managing change m units Total volumes 55.0 – systems and capacity • implementation of merchandise management systems • back office systems in stores 50.0 • distribution centre extensions – people 45.0 • re-structure clothing • improving capacity • Mana
Slide 3: Trading environment
woolworths holdings limited trading environment • Consumer confidence peaked • Slowing sales growth trend – clothing • No slow-down in food growth • Rand weakness • Rising inflation • Interest rate hike • Changing legislative environment in financial services
Slide 4: Income statement
woolworths holdings limited results income statement June 2006 June 2005 % Chg Rm Rm Revenue 15,143.0 12,988.9 16.6% Turnover 14,208.0 12,220.7 16.3% Cost of sales 9,340.4 8,027.1 16.4% Gross profit 4,867.6 4,193.6 16.1% Other revenue 935.0 768.2 21.7% Expenses 4,312.3 3,730.5 15.6% Operating profit
Slide 5: Expense analysis
woolworths holdings limited results expense analysis R269.9m R679.1m R1,699.6m R1,663.7m R4,312.3m 20.0% 18.3% 15.0% 16.4% 15.6% 10.0% 11.4% 5.0% 6.1% 0.0% Depreciation Occupancy Employment Other Total
Slide 6: HEPS graph and distribution cover
woolworths holdings limited results HEPS graph and distribution cover 160.0 2.5 2.1 140.0 2 1.9 2 1.7 120.0 1.7 100.0 105.0 1.5 80.0 89.4 75.5 1 60.0 61.1 63.0 40.0 54.0 42.4 0.5 38.5 20.0 29.0 20.0 0.0 0 2002 2003 2004 2005 2006 *HEPS DPS *Distribution Cover Compound HEPS growth: 30% (5 years) * Pr
Slide 7: HEPS comparability
woolworths holdings limited results HEPS comparability June 2006 June 2005 % Chg Rm Rm Comparable headline earnings Actual headline earnings 834.8 759.0 10.0% add: non-comparable interest after tax 51.8 14.7 add: non-comparable STC 39.4 - Comparable headline earnings 926.0 773.7 19.7% Comparable HEP
Slide 8: Balance sheet
woolworths holdings limited results balance sheet June 2006 June 2005 % Chg Rm Rm Assets Property, plant and equipment 1,597.7 1,304.0 22.5% Investment property 109.0 72.2 51.0% Export partnerships 71.6 79.3 -9.7% Goodwill 23.0 - Inventories 841.4 683.0 23.2% Financial services assets 4,455.0 3,644.
Slide 9: Cash flow
woolworths holdings limited results cash flow June 2006 June 2005 Rm Rm Cash inflow from trading 1,059.3 996.5 Net interest received 517.5 488.1 Working capital movements 191.0 -228.4 Increase in borrowings 653.7 1,434.4 2,421.5 2,690.6 Utilised by : Tax paid 475.4 314.6 Distribution paid 474.2 384.
Slide 10: Cash flow (cont.)
woolworths holdings limited results cash flow (cont.) Growth in financial services assets: Capex spend: R882.2m (June 05: R722.0m) R638.1m (June 05: R385.9m) R 1,000.0 R 1,000.0 R 800.0 R 166.7 R 800.0 R 155.5 R 600.0 R 302.5 R 600.0 R 196.8 R 139.5 R 400.0 R 400.0 R 7.4 R 154.4 R 142.8 R 200.0 R 42
Slide 11: Return on equity / WACC
woolworths holdings limited results return on equity / wacc 40.0% 35.0% 30.0% 25.0% 20.0% 17.5% 16.3% 13.8% 13.8% 15.0% 11.3% 11.8% 10.0% 5.0% 12.3% 18.3% 24.7% 27.4% 31.2% 34.8% 0.0% Jun-01 Jun-02 Jun-03 Jun-04 Jun-05 Jun-06
Slide 12: Retail results: income statement
woolworths retail results income statement (excluding financial services) June 2006 June 2005 % Chg Rm Rm Revenue 13,286.9 11,288.4 17.7% Turnover 13,213.8 11,227.0 17.7% Cost of sales 8,885.9 7,558.4 17.6% Gross profit 4,327.9 3,668.6 18.0% O ther revenue 73.1 61.4 19.1% Expenses 3,331.9 2,871.3 16
Slide 13: Retail results: turnover analysis
woolworths retail results turnover analysis June 2006 June 2005 % Chg Rm Rm Clothing & home 6,012.2 5,349.5 12.4% Corporate (retail) 5,255.3 4,710.0 11.6% Franchise (wholesale) - local 567.6 473.8 19.8% Franchise (wholesale) - international 189.3 165.7 14.2% Foods 6,941.5 5,666.0 22.5% Corporate (re
Slide 14: Retail results: balance sheet
woolworths retail results balance sheet (excluding financial services) June 2006 June 2005* % Chg Rm Rm Assets Property, plant and equipment, investments deferred tax, loans and goodwill 2,127.5 1,689.5 25.9% Inventory 707.9 563.0 25.7% Accounts receivable 618.9 528.9 17.0% Cash 332.2 163.5 103.2% 3
Slide 15: Financial services results: income statement
woolworths financial services results income statement June 2006 June 2005 % Chg Rm % to Book Rm % to Book Income 941.4 23.6% 773.9 23.2% 21.6% Interest received 754.5 18.9% 626.8 18.6% 20.4% Other Income - external 108.0 2.7% 78.6 2.4% 37.4% Other Income - internal 78.9 2.0% 68.5 2.1% 15.2% Expense
Slide 16: Financial services results: balance sheet
woolworths financial services results balance sheet June 2006 June 2005* % Chg Rm Rm Assets Plant and equipment, deferred tax, loans and accounts receivable 189.1 203.3 -7.0% Financial services assets 4,455.0 3,644.1 22.3% 4,644.1 3,847.4 20.7% Equity and liabilities Shareholders funds 975.1 992.3 -
Slide 17: Financial services results: credit statistics
woolworths financial services results credit statistics June 2006 June 2005 Store card sales as a % of total sales 32.1% 33.7% Average yield 23.6% 23.2% Weighted average usury rate 20.0% 20.3% Average cost of funds 7.7% 7.8% Total gross books 4,667.6 3,785.4 Total provisions (212.6) (141.3) Net book
Slide 18: Country Road results: income statement (A$)
country road results income statement (A$) June 2006 June 2005* % Chg A$m A$m Revenue 207.7 211.2 -1.7% Turnover 205.1 208.5 -1.6% Retail 164.0 151.6 8.2% Wholesale 41.1 56.9 -27.8% Cost of sales 94.9 99.6 -4.7% Gross profit 110.2 108.9 1.2% Other revenue 2.6 2.7 -3.7% Expenses 108.7 107.6 1.0% Oper
Slide 19: Country Road results: balance sheet (A$)
country road results balance sheet (A$) June 2006 June 2005 % Chg A$m A$m Assets Property, plant and equipment 27.8 27.2 2.2% Trademarks** 11.2 11.2 0.0% Inventory 24.5 23.1 6.1% Accounts receivable 14.4 11.6 24.1% Cash 6.8 11.9 -42.9% 84.7 85.0 -0.4% Equity and liabilities Shareholders funds 54.0 5