Slide 1: Company Results Full Year Ended June 2013
Company Results Full Year Ended 30 June 2013 Grant O'Brien Chief Executive Officer and Managing Director
Slide 2: Results — Financial Year 2013
Results — Financial Year 2013 Continuing Operations Total Group Before Significant Items1 Change Change FY13 Change Normalised2 FY13 Change Normalised2 Sales – Group $58.5b 6.8% 4.8% $59.2b 4.3% 2.4% EBITDA $4,618.7m 9.2% EBIT $3,653.2m 9.2% 7.2% NPAT $2,353.9m 8.0% 6.1% $2,259.4m
Slide 3: Group EBIT from continuing operations
Group EBIT from continuing operations — up 9.2% or 7.2% on a normalised 52 week basis1 Change $ million FY12 FY13 Change Normalised1 Australian Food and Liquor 2,817.2 3,061.6 8.7% 6.7% Petrol 127.1 137.7 8.3% 6.2% Australian Food, Liquor and Petrol 2,944.3 3,199.3 8.7% 6.7% New Zealand Supermarkets
Slide 4: Our strategic priorities for the future
Our strategic priorities for the future — 2 November 2011 • Re-establish marketing supremacy around value and growth Extend And Defend • Unlock sales growth for a tougher consumer and competitive environment 1 Leadership In • Accelerate our leadership in Fresh Food Food And Liquor • Extend leadershi
Slide 5: Pleasing Progress Against Strategic Priorities
Pleasing Progress Against Strategic Priorities 4
Slide 6: Extend leadership in Food and Liquor
1. Extend leadership in Food and Liquor… what we have delivered Increasing Leading Continued Drive Fresh New Zealand Momentum in Liquor Destination, Value Leadership Market Share Growth Market Share Growth Food and Liquor In-store and Online • Increased comp sales • Reinforced price • Significant •
Slide 7: Act on our portfolio to maximise shareholder value
2. Act on our portfolio to maximise shareholder value… what we have delivered Property Divestment Australia's Best and BIG W Consumer and Capital Management Most Responsible Hotels Customer Offer Evolution Electronics Divestment • Creation of new ASX listed • Victorian gaming regulatory • Category e
Slide 8: Maintain our track record of building new growth businesses
3. Maintain our track record of building new growth businesses… we've made significant progress Growing our Leadership as Australia's Largest Domestic Online Retailer Building Australia's best Online Sales Growth Connecting with Customers EziBuy Acquisition Home Improvement offer • 42% increase in o
Slide 9: Put in place the enablers for a new era of growth
4. Put in place the enablers for a new era of growth… more to come Cost Leadership Customer Data Assembling a • CODB rate for Australia and NZ Food and Liquor reduced Improving Our Offer World Class Retail Team Building On Our Driving Continued • Acquisition of 50% of • Continued focus on World Clas
Slide 10: Business Unit Results
Business Unit Results WOooLWORTHS LIMITED
Slide 11: Supermarkets
Supermarkets Tjeerd Jegen Managing Director 10 Australian Supermarkets & Petrol
Slide 12: Australian Food, Liquor & Petrol
Australian Food, Liquor & Petrol Increasing momentum in sales and profit FY12 FY13 Change • Food & Liquor building momentum with FY13 52 wks 53 wks Change Normalised1 comparable sales growth of 2.7%2. 2nd half FY13 was 3.0%, which compares to a 2.4% increase in 1st Sales – Food & Liquor ($m) 37,549
Slide 13: First choice for fresh food
First choice for fresh food Strong fresh food growth • As Australia’s Fresh Food People we are extending our leadership in Fresh with significant improvements in our offer, quality and freshness leading to increased market share • Produce – Record levels of produce sales, supported by faster supply
Slide 14: First choice for fresh food
First choice for fresh food Strong fresh food growth • Bakery – Our ambition is to have a fresh bakery in every store – Currently we have a fresh bakery in 78% of our store network, including 91 new bakeries opened in FY13 – We broadened our range in artisan style breads, patisserie and premium cake
Slide 15: Unbeatable value
Unbeatable value Value focus resonating with customers • Reinforced price leadership and introduced the compelling 'More Savings Every Day' value platform – Long term price reductions on more than 1,000 products called 'Every Day Value' – Great exclusive savings for our Everyday Rewards card holders
Slide 16: Customer insights transforming our business
Customer insights transforming our business Leading the way • To enhance and extend our data capabilities, in April 2013 we acquired 50% of Quantium, Australia’s leading data-driven strategy business • Customer insights transforming our business in ranging, store design and tailoring and targeted pr
Slide 17: Exciting new offers
Exciting new offers Complementing our existing core offer across the store • Launched – Caffitaly Coffee machines and pods – 90,000 machines sold – 'Food To Go' offer – sandwiches and salads – Expanded range of gift cards, home office and My Kitchen range of homewares – Currently selling bus tickets
Slide 18: Multi-option
Multi-option Growing our leadership position in online • Continued strong growth of online sales of over 50%, further strengthening our leading market share position in the online food market • Home delivery now available to more than 90% of Australian households • 135 stores now offering click & co
Slide 19: Petrol
Petrol Expanded network and diesel availability providing an improved offer and more savings every day for our supermarket customers • Sales increased 1.2% (decreased 0.8% on a normalised 52 week basis1) impacted by lower average fuel sell prices for the year (FY13: 142.4 cpl, FY12: 142.9 cpl) • Pet
Slide 20: Woolworths Liquor Group
Woolworths Liquor Group Brad Banducci, Director of Liquor 19
Slide 21: Woolworths Liquor Group
Woolworths Liquor Group Clear leadership across all customer segments and channels Woolworths Unique Multi-Option Liquor Model Sales $ billion FY09 5.2 Connoisseur FY10 5.6 FY11 5.9 Convenience And Value FY12 6.6 Bargain FY13 7.21 Hunter Solid sales growth for the year, with an increase of 8.9% (7.0
Slide 22: Significant progress in multi-option liquor retail
Significant progress in multi-option liquor retail Enhance our market leading multi-option offer • Stores opened during FY13: 16 (15 net) new Dan Murphy’s and 38 (14 net) new BWS stores, total liquor outlets 1,355 at end of FY13 • Click & collect across the entire Dan Murphy’s network during FY13 –
Slide 23: Good progress on other key strategic initiatives
Good progress on other key strategic initiatives Improve our store formats • Rebranding completed of all 475 Woolworths Supermarket Liquor sites to BWS, making BWS the single largest chain of liquor stores in Australia with a network of 1,180 stores • The rebranding involved – Refreshed BWS signage
Slide 24: Hotels
Hotels Well managed transition through regulatory changes • Strong sales and EBIT growth FY12 FY13 Change 52 wks 53 wks Change Normalised1 • Clear benefits from Victorian gaming regulatory changes, which came into effect in August 2012, with some interim challenges such as the removal of ATMs Sales
Slide 25: NZ Supermarkets
NZ Supermarkets Dave Chambers Managing Director PEL 24
Slide 26: New Zealand Supermarkets
New Zealand Supermarkets Market share growth in a challenging market FY12 FY13 Change • Sustained growth in market share, customer NZ$ 52 wks 53 wks Change Normalised1 numbers and items sold despite flat comparable Before Significant Items2 sales in FY134 (FY12: +3.3%) • We have continued to be comp
Slide 27: Countdown continues market share growth
Countdown continues market share growth Grow Countdown network • 8 new stores opened and 3 closed – network of 166 stores at FY13. Plan to open 4 new stores in FY14 • 80% of stores have now been converted to the latest Countdown format, including 5 refurbishments during FY13 Customer value and innov
Slide 28: Network improvements driving benefits
Network improvements driving benefits Supply chain • Reconfigured National and Regional DC operations continue to improve supply chain service and efficiency across the network by removing direct to store deliveries • FY13 first full year of reconfigured network - costs reduced by 7% Franchise netwo
Slide 29: BIG W
BIG W Julie Coates Director BIG W 28
Slide 30: BIG W
BIG W Positive sales and profit growth in a challenging market FY12 FY13 Change • Pleasing FY13 sales growth with Home, Leisure, 52 wks 53 wks Change Normalised 1 Toys & Sporting and Apparel categories the highlights, leading to increased market share in Sales ($m) 4,180 4,383 4.9% 2.0% the discount
Slide 31: Progress against strategic priorities
Progress against strategic priorities Win on value everyday • Good progress with our new brand campaign ‘Everyone's a Winner with Australia’s lowest prices - Cha-Ching!’ and the use of our Brand Ambassador, Eric Stonestreet, with opportunity to build further momentum • Newness and innovation at the
Slide 32: Progress against strategic priorities
Progress against strategic priorities Differentiate our offer through merchandising and range innovation • 10 stores in the latest format improving adjacency, merchandising and space allocations • Introduction of Peter Morrissey home and apparel ranges, Michelle Bridges and Guy Leech active wear and
Slide 33: Home Improvement
Home Improvement Melinda Smith Director of Masters 32
Slide 34: Delivering on our commitment to bring competition to Home Improvement
Delivering on our commitment to bring competition to the Australian Home Improvement market With a market of more than $42b in sales Masters is building to become a long term profit contributor for the Group We committed to… What we have done… Secure 150 sites in 5 years Currently 120 active sites w
Slide 35: A challenging year with good progress for a start up business
A challenging year with good progress for a start up business and clear plans for the future • As previously disclosed a number of factors impacted our result for the year – Sales budgets were too optimistic. However, the sales of the 15 Masters stores opened for more than 12 months were in line wit
Slide 36: Financial Performance
Financial Performance WOooLWORTHS LIMITED
Slide 37: Balance sheet
Balance sheet $ million FY12 FY13 Change • Inventory increased 13.7%, driven by growth in CONTINUING OPERATIONS – Masters inventory Inventory 3,698.3 4,205.4 13.7% – Direct global sourcing Trade Payables (4,013.4) (4,080.0) 1.7% – New stores opened during FY13 Net Investment in Inventory – Private a
Slide 38: Average inventory days for continuing operations
Average inventory days for continuing operations Excluding the impact of Home Improvement and increased indent stock, average inventory days declined by 0.2 days, reflecting strong inventory control throughout the year Number of Days Comments • Average inventory days FY09 31.2 were up 2.6 days to 36
Slide 39: Cash flow
Cash flow $ million FY12 FY13 Change • EBITDA from continuing operations before EBITDA – Continuing Operations before significant items1 4,229.9 4,618.7 9.2% significant items1 was up 9.2% EBITDA – Discontinued Operations before significant items1 42.7 2.5 • Free Cash Flow after equity related Signi
Slide 40: Shareholder distributions
Shareholder distributions $2.2b returned to shareholders in FY13 $14b returned to shareholders since July 2001 $ billion Comments • As part of the SCA Dividend Property Group Buy back transaction, an in-specie In-specie distribution distribution of $0.5b 2.2 2.2 made to shareholders 0.7 0.5 • Estima
Slide 41: Return on funds employed from continuing operations
Return on funds employed1 from continuing operations Percentage Comments • ROFE increased 132 bps FY09 32% 34% excluding the impact of Masters and property development • Despite the investment FY10 31% 33% in Masters and property development, Group ROFE from continuing operations before FY11 30% 35%
Slide 42: Outlook
Outlook • We are seeing good results from our Strategic Priorities that were laid out in 2011 which are building momentum across the Group and give us confidence that we will generate profitable growth • We expect retail conditions to remain subdued in FY14 with ongoing consumer caution reflecting c
Slide 43: Company Results Full Year Ended June 2013
Company Results Full Year Ended 30 June 2013 Grant O'Brien Chief Executive Officer and Managing Director
Slide 44: Appendices
Appendices WOooLWORTHS LIMITED
Slide 45: CODB / sales from continuing operations before significant items
CODB / sales from continuing operations before significant items1 CODB for our core retail trading businesses was well controlled Percentage Comments • CODB increased 6 bps after 18.92% excluding Masters, Hotels and FY09 19.95% additional net rental costs following the sale of properties to SCA. Thi
Slide 46: Gross profit margin from continuing operations
Gross profit margin from continuing operations We have continued to reinvest in lower prices, delivering greater value to customers as evidenced by continued price deflation in Australian Food & Liquor and BIG W Percentage Comments • Increase due to better FY09 24.36% 25.72% buying, benefits of incr
Slide 47: Dividends per share
Dividends per share Increase in dividends per share of 5.6% Cents FY09 104 13.0% FY10 115 10.6% FY11 122 6.1% FY12 126 3.3% FY13 133 5.6% 46
Slide 48: Full year sales from continuing operations up 6.8%
Full year sales from continuing operations up 6.8% or 4.8% on a normalised 52 week basis1 2012 2013 Normalised Full Year $m 52 weeks 53 weeks Increase Increase Comp Sales2 1 Australian Food and Liquor 37,549 40,031 6.6% 4.7% 2.7% Petrol (dollars) 6,714 6,794 1.2% (0.8)% (2.3)% Petrol (litres) 5,003
Slide 49: Health ratios
Health ratios FY12 FY13 Fixed Charges Cover – Total Group excluding X 2.9 3.0 Significant Items1 Days inventory (average) – Continuing Operations2,3 Days 33.8 36.4 Days creditors (to sales) – Continuing Operations3 Days 46.1 45.4 Return on Funds Employed (ROFE) – Total Group % 24.1 27.6 Return on Fu
Slide 50: Fixed charges cover – Total Group before significant items
Fixed charges cover – Total Group before significant items1 2009 2010 2011 2012 2013 EBIT1 2,815.5 3,082.1 3,276.4 3,376.7 3,655.7 D&A 729.4 797.7 857.9 895.9 965.5 EBITDAR 4,954.6 5,357.7 5,675.5 5,962.2 6,418.5 Interest 239.6 257.4 332.6 381.2 378.12 Rent – base 1,313.5 1,390.8 1,468.1 1,590.6 1,7
Slide 51: Capital expenditure — Total Group
Capital expenditure — Total Group 2013 Previous 2011 2012 2013 2014 $ million – 2013 Actual Fcst Var $ million – Full Year Actual Actual Actual Fcst New Stores 300 323 (23) New Stores 288 346 300 250 Refurbishments 478 529 (51) Refurbishments 492 268 478 472 Growth Capex 778 852 (74) Growth Capex 78
Slide 52: Capital expenditure — notes
Capital expenditure — notes • Capital allocated to new stores will decrease by $50m in FY14 after a similar decrease in FY13 reflecting the return to normal levels of Supermarket store openings after a New Stores peak in FY12 • Capital spend increased in FY13 due to a large number of ‘one up’ refurb
Slide 53: Significant items
Significant items • One-off loss associated with SCA Property Group transaction – As envisaged, a one-off loss of $32.8m before tax ($28.5m after tax) was incurred on the sale of assets to the SCA Property Group – primarily provisions for rental guarantees provided by Woolworths in relation to speci