Woolworths Holdings Limited · JSE:WHL
Woolworths — H1 2024 Earnings Presentation
48 slides from Woolworths's earnings presentation, Feb 21, 2024
Slide 1: Half-Year Results Presentation ASX announcement
21 February 2024 ASX Market Announcements Office Australian Securities Exchange 20 Bridge Street Sydney NSW 2000 Half-Year Results Presentation Attached for release to the market is the Half-Year Results Presentation for the period ended 31 December 2023. Authorised by: Kate Eastoe, Group Company Se
Slide 2: Woolworths Group F24 Half-Year Results
Woolworths Group Half-Year Results 2024 1 Woolworths Group F24 Half-Year Results For the 27 weeks ended 31 December 2023 Brad Banducci, Managing Director and CEO Stephen Harrison, CFO 21 February 2024
Slide 3: Acknowledgement of Country
Woolworths Group Half-Year Results 2024 2 Acknowledgement of Country Woolworths Group acknowledges the many Traditional Owners of the lands on which we operate and pay our respects to their Elders past and present. We recognise their strengths and enduring connection to lands, waters and skies as th
Slide 4: Contents
Woolworths Group Half-Year Results 2024 3 Contents H24 Group summary and progress 4 Brad Banducci Group financial results and capital management 17 Stephen Harrison Business performance update 26 Current trading and outlook 43 Brad Banducci We create better experiences together for a better tomorrow
Slide 5: H24 summary
Woolworths Group Full Year Results Half-Year Results2023 2024 4 H24 summary WooliesX driving Group growth; focus on delivering value for customers in H2 Mixed Group performance in H1; solid results from Australian Food and Australian B2B somewhat offset by the impacts of a very challenging trading e
Slide 6: Strong Customer Care metrics and improved Availability; more to do on Value for Money
Woolworths Group Half-Year Results 2024 5 Strong Customer Care metrics and improved Availability; more to do on Value for Money Customer VOC NPS Group VOC NPS 50 Care VOC Availability VOC -1 pt vs. Dec’22 82% 76% -1 pt vs. Dec’22 +4 pts vs. Dec’22 62 62 60 60 60 52 50 40 Care VOC Availability VOC 43
Slide 7: Lower inflation in the half with deflation in Fruit & Veg and Meat
Woolworths Group Half-Year Results 2024 6 Lower inflation in the half with deflation in Fruit & Veg and Meat and easing price increases in Long Life Woolworths Food Retail average price change Total Long Life Total Fresh Total Food 2.3% 1.3% 0.1% Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 Q1'24
Slide 8: Helping our customers spend less with more planned for H2
Woolworths Group Half-Year Results 2024 7 Helping our customers spend less with more planned for H2 3,000+ Seasonal and Average Own 5m+ members Launch of Over $80m Over 30,000 Launched BIG W 150+ own brand products on Christmas Prices Brand1 selling purchased a product Best Unit Banked for products
Slide 9: Our Connected Group
Woolworths Group Half-Year Results 2024 8 Our Connected Group Woolworths Retail Woolworths Food Our cornerstone B2C retail Company food businesses, famous for Delivering brands, products and capabilities that deliver value good food, good prices, good acts and always convenient and differentiation f
Slide 10: Strong eCom growth delivered through improved Same Day convenience
Woolworths Group Half-Year Results 2024 9 Strong eCom growth delivered through improved Same Day convenience Woolworths Food Retail total eCom and Same Day eCom sales penetration % eCom Same Day eCom sales growth sales growth sales 5-yr eCom 21.3% 78% CAGR penetration vs. H1’23 vs. H1’23 35% 11.9% i
Slide 11: Everyday platform driving increased customer engagement
Woolworths Group Half-Year Results 2024 10 Everyday platform driving increased customer engagement Growing members and member engagement, building depth of insights and delivering better value for our customers Everyday Rewards Members o Strong member engagement; weekly active app users up 28.2% to
Slide 12: Strategic investment in adjacencies starting to deliver
Woolworths Group Half-Year Results 2024 11 Strategic investment in adjacencies starting to deliver Retail Business Platforms Digital, technology and analytics enabled platform businesses H1 F24 sales growth of 14.6% driving incremental Next Gen Promotions tool continuing to deliver 900+ supplier and
Slide 13: Evolving our marketplace strategy
Woolworths Group Half-Year Results 2024 12 Evolving our marketplace strategy • Launched Woolworths MarketPlus in Nov 2023 • Powering 3P tech platform and sellers for the Group • H1 F24 overall GMV1 up 7.9% • Rewards members redeeming on MyDeal site since Nov 2023 • 400,000+ linked members, visiting
Slide 14: Progressing our multi-year supply chain transformation
Woolworths Group Half-Year Results 2024 13 Progressing our multi-year supply chain transformation 2019 2020 2021 2022 2023 2024 2025 Practical completion in H1 F24; two years after sod turn Moorebank National Melbourne Fresh DC, Vic Heathwood Chilled & DC, NSW opening commissioned August Frozen DC,
Slide 15: Woolworths New Zealand and BIG W transformation progress
Woolworths Group Half-Year Results 2024 14 Woolworths New Zealand transformation progressing to plan; more to do to scale priority initiatives in BIG W Progress 34 stores rebranded in H1 F24 with positive customer sentiment Clothing transformation underway (curated range, size-based Simpler range re
Slide 16: Progress across our sustainability pillars in H24
Woolworths Group Half-Year Results 2024 15 Progress across our sustainability pillars in H24 1.44 People Making a positive Group Severity Rate 52 $46.9m $6.3m 4% from F23 Mini Woolies stores Deployed via the Future of change to the future of of direct community our people, our 13.64 opened since c
Slide 17: Contents
Woolworths Group Half-Year Results 2024 16 Contents H24 Group summary and progress 4 Brad Banducci Group financial results and capital management Stephen Harrison Group financial results Key balance sheet metrics 17 Capital management framework Cash flow summary Capital expenditure Capital managemen
Slide 18: Group financial results and capital management
Woolworths Group Half-Year Results 2024 17 Group financial results and capital management
Slide 19: H24 results summary
Woolworths Group Half-Year Results 2024 18 H24 results summary Group sales Group EBIT ($ million) 4.4% ($ million) 3.3% 34,635 vs. H1 F23 vs. H1 F23 1,692 33,169 1,637 H1 F24 H1 F23 H1 F24 H1 F23 Group NPAT1 Group basic EPS1 ($ million) 2.5% ($ cents) 2.0% vs. H1 F23 vs. H1 F23 929 76.2 907
Slide 20: Group trading performance
Woolworths Group Half-Year Results 2024 19 Group trading performance Group sales and EBIT $ MILLION H24 SALES CHANGE H24 EBIT CHANGE Before significant items Australian Food 25,899 5.4% 1,570 9.9% Australian B2B1 2,323 2.8% 71 45.7% New Zealand Food 3,858 4.2% 65 (40.6)% New Zealand Food (NZD) 4,172
Slide 21: Average inventory and ROFE improved on the prior periods
Woolworths Group Half-Year Results 2024 20 Average inventory and ROFE improved on the prior periods Average inventory days1 29.7 • Average inventory days in line with prior year 29.5 29.7 29.6 • Lower average inventory days in Australian B2B and New Zealand Food. BIG W average inventory days up but
Slide 22: Woolworths Group capital management framework
Woolworths Group Half-Year Results 2024 21 Woolworths Group capital management framework Strong growth One of Australia’s Leading market Defensive opportunities in Strong underlying most trusted position in Food & characteristics eCom and cash flow brands Everyday Needs through the cycle Investment
Slide 23: Cash flow
Woolworths Group Half-Year Results 2024 22 Cash flow $ MILLION H24 H231 CHANGE Group EBITDA before significant items 3,079 2,924 5.3% Increase in inventory more than offset by payables growth Working capital and non-cash movements 327 (49) n.m. 31.1 Cash from operating activities before interest and
Slide 24: Operating capex broadly in line with prior year
Woolworths Group Half-Year Results 2024 23 Operating capex broadly in line with prior year Sustaining capex $ MILLION H24 H23 $ MILLION H24 H23 702 645 SIB 158 157 Sustaining capex Renewals 193 185 Growth capex 205 283 Supply chain 125 105 Operating capex 907 928 IT 131 129 Productivity 95 69 Proper
Slide 25: Dividends and funding
Woolworths Group Half-Year Results 2024 24 Dividends and funding 47 cps interim dividend1 Debt maturity profile ($m)3,4 Dividends (cents per share) 1,200 104 92 800 58 53 400 39 46 47 - F22 F23 F24 F24 F25 F26 F27 F28 F29 F30 F31 F32 F33 Interim Final Capital markets debt Bank debt - drawn • Weighte
Slide 26: Contents
Woolworths Group Half-Year Results 2024 25 Contents H24 Group summary and progress 4 Brad Banducci Group financial results and capital management 17 Stephen Harrison Business performance update 26 Current trading and outlook 43 Brad Banducci
Slide 27: Woolworths Group Half-Year Results 2024
Woolworths Group Half-Year Results 2024 26
Slide 28: Australian Food
Woolworths Group Half-Year Results 2024 27 Australian Food H24 H231 CHANGE Total sales ($m) 25,899 24,560 5.4% EBITDA ($m) 2,531 2,317 9.2% EBIT ($m) 1,570 1,428 9.9% Gross margin (%) 28.9 27.9 96 bps CODB (%) 22.8 22.1 72 bps EBIT to sales (%) 6.1 5.8 24 bps ROFE (%) 31.1 26.7 4.4 pts H24 SUSTAINAB
Slide 29: Australian Food: Woolworths Food Retail
Woolworths Group Half-Year Results 2024 28 Australian Food Woolworths Food Retail (Stores and eCom) H24 H231 CHANGE Total sales ($m) 25,648 24,371 5.2% EBITDA ($m) 2,454 2,272 8.0% EBIT ($m) 1,534 1,417 8.2% EBIT to sales (%) 6.0 5.8 17 bps Sales per square metre ($) 19,304 18,470 4.5% SALES PERFORM
Slide 30: Progress against strategic priorities
Woolworths Group Half-Year Results 2024 29 Progress against strategic priorities Caring for our communities Team safety Trade partners Convenient and connected experiences Build advocacy for Today’s Fresh Food People 10+ million meals donated Opened 50th 40,000+ team members completed virtual realit
Slide 31: Woolworths progressing network initiatives for better customer experiences
Woolworths Group Half-Year Results 2024 30 Woolworths 360 progressing network initiatives to create better customer experiences Progressed roll out of Proactive Services, an in-house Launched first stand-alone Direct to boot Opened 9 net new stores and completed 23 renewals trolley collection and cl
Slide 32: Australian Food: WooliesX
Woolworths Group Half-Year Results 2024 31 Australian Food WooliesX (including eCom) H24 H231 CHANGE Total sales ($m) 4,087 3,206 27.5% DAP & EBIT before depreciation and amortisation ($m) 260 145 78.9% DAP & EBIT ($m) 168 72 132.3% DAP & EBIT to sales (%) 4.1 2.3 186 bps SALES PERFORMANCE BY PLATFO
Slide 33: WooliesX H24 highlights
Woolworths Group Half-Year Results 2024 32 WooliesX H24 highlights idX & Cartology eComX EverydayX Record levels of digital traffic Record levels of B2C active customers Provided members with even more value +20% +23% 1m +14% 9.4m +8% Group traffic active eCom increase in B2C Food & Everyday traffic
Slide 34: Australian B2B
Woolworths Group Half-Year Results 2024 33 Australian B2B
Slide 35: Australian B2B
Woolworths Group Half-Year Results 2024 34 Australian B2B H24 H231 CHANGE Sales ($m) 2,323 2,258 2.8% B2B Food (Woolworths Food Company 3rd party) 1,653 1,627 1.5% B2B Supply Chain (Primary Connect 3rd party) 670 631 6.2% EBITDA ($m) 133 101 31.2% EBIT ($m) 71 49 45.7% EBIT to sales (%) 3.0 2.1 89 b
Slide 36: H24 highlights
Woolworths Group Half-Year Results 2024 35 H24 highlights B2B Food B2B Food PFD sales growth driven by Greenstock improved end-to-end WFC won 105 Australian food customer growth, a recovery in the sourcing across the meat supply awards, including 45 Royal airline and cruise industry and new chain du
Slide 37: Woolworths Group Half-Year Results 2024
Woolworths Group Half-Year Results 2024 36
Slide 38: New Zealand Food
Woolworths Group Half-Year Results 2024 37 New Zealand Food NZD ($) H24 H23 CHANGE Total sales ($m) 4,172 4,079 2.3% EBITDA ($m) 242 286 (15.2)% EBIT ($m) 71 122 (41.7)% Gross margin (%) 22.6 22.8 (18) bps CODB (%) 20.9 19.8 110 bps EBIT to sales (%) 1.7 3.0 (128) bps Sales per square metre ($) 18,4
Slide 39: H24 highlights
Woolworths Group Half-Year Results 2024 38 H24 highlights Living our purpose and transforming our brand 34 stores +3 pts +2 pts Progressed roll out of Safer Stores program rebranded to Woolworths improved VOT Store-controllable to improve team and in H1 F24; 40+ stores advocacy vs. H1 23 VOC vs. Dec
Slide 40: Woolworths Group Half-Year Results 2024
Woolworths Group Half-Year Results 2024 39
Slide 41: BIG W
Woolworths Group Half-Year Results 2024 40 BIG W H24 H23 CHANGE Total sales ($m) 2,595 2,708 (4.1)% EBITDA ($m) 163 239 (32.1)% EBIT ($m) 54 134 (60.0)% Gross margin (%) 30.5 31.9 (143) bps CODB (%) 28.5 27.0 146 bps EBIT to sales (%) 2.1 5.0 (289) bps Sales per square metre ($) 4,622 4,765 (3.0)% R
Slide 42: H24 highlights
Woolworths Group Half-Year Results 2024 41 H24 highlights We make a real >40% of team multi-skilled Donated ~42,000 Christmas Donated $393,000 to difference for to support more gifts to local charity partners hospital and research families meaningful hours and as part of the BIG W Giving institute p
Slide 43: Contents
Woolworths Group Half-Year Results 2024 42 Contents H24 Group summary and progress 4 Brad Banducci Group financial results and capital management 17 Stephen Harrison Business performance update 26 Current trading and outlook 43 Brad Banducci
Slide 44: Current trading and outlook
Woolworths Group Half-Year Results 2024 43 Current trading and outlook Delivering value for customers remains our number one priority Expect to make continued progress on strategic agenda in H2; however, outlook has become more challenging. Group sales have continued to moderate in first seven weeks
Slide 45: Glossary
Woolworths Group Half-Year Results 2024 44 Glossary Active eCom customers Customers that have made a purchase online in the last four weeks AGW Australian Grocery Wholesalers Pty Limited B2B Business to business B2C Business to customer CAGR Compound annual growth rate Cash realisation ratio Operati
Slide 46: Glossary continued
Woolworths Group Half-Year Results 2024 45 Glossary continued PC+ Primary Connect third-party logistics Pick up A service which enables collection of online shopping orders at a store or at select locations Renewal A total store transformation focused on the overall store environment, team, range an
Slide 47: Glossary continued
Woolworths Group Half-Year Results 2024 46 Glossary continued Other non-IFRS measures used in describing the business performance include: • Earnings before interest, tax, depreciation and amortisation (EBITDA) • Change in average prices • Cash flow from operating activities before interest and tax
Slide 48: Disclaimer
Woolworths Group Half-Year Results 2024 47 Disclaimer This presentation contains summary information about Woolworths Group Limited (Woolworths Group) and its activities current as at the date of this presentation. It is sourced from and should be read in conjunction with Woolworths’ other periodic