Slide 1: Company Results Half Year Ended 3 January 2016
COMPANY RESULTS For personal use only HALF YEAR ENDED 3 January 2016
Slide 2: Rebuilding the business
Rebuilding the business For personal use only Reshaping Board and Leadership Disciplined Capital Cultural the Portfolio renewal Management Change • Multi-year reset of • Group CEO, Brad • Committed to strong • Move to ‘listening Supermarkets business Banducci appointed investment grade credit cultur
Slide 3: Results — Half Year 2016
Results — Half Year 2016 For personal use only Total Group Total Group Before Significant Items1 Sales $32.0b 1.4% $32.0b 1.4% (Loss)/Earnings Before Interest and Tax $(1,792.9)m 190.5% $1,456.6m 31.6% Net (Loss)/Profit After Tax attributable $(972.7)m 176.0% $925.8m 33.1% to shareholders of Woolwor
Slide 4: Group EBIT/(LBIT)
Group EBIT/(LBIT) $m HY16 HY15 Change For personal use only Before Significant Items1 Australian Food, Liquor and Petrol 1,294.7 1,895.6 (31.7)% New Zealand Supermarkets (AUD) 151.3 154.3 (1.9)% New Zealand Supermarkets (NZD) 170.6 169.1 0.9% General Merchandise 67.3 109.7 (38.7)% Hotels 135.1 144.6
Slide 5: Australian Food, Liquor and Petrol
Australian Food, Liquor and Petrol HY16 HY15 Change Food & Liquor Trading Performance For personal use only Sales ($m) • Australian Food and Liquor sales were $22.3bn, +0.7% on H1’15. Comparable sales decreased 0.8% Food & Liquor 22,347 22,200 0.7% • Q2’16 comparable sales declined 0.6% (Q1’16: down
Slide 6: Progress against Australian Supermarkets plans
Progress against Australian Supermarkets plans Progress against objectives More to do For personal use only • Invested a further $150m in H1’16 to lower prices for our • Resolve systems and process issues impacting customers availability, stock loss and promotional effectiveness • Improved customer s
Slide 7: Progress against Petrol and Convenience plans
Progress against Petrol and Convenience plans Petrol Trading Performance Progress against objectives For personal use only • Petrol sales1 for the year were $2.5bn, down 23.8% on • Invested in forecourt improvements in 96 sites to the H1’15 (volumes decreased by 15.6%) improve the customer experienc
Slide 8: Progress against Woolworths Liquor Group plans
Progress against Woolworths Liquor Group plans Sales $b Progress against objectives For personal use only • Strong growth in our retail divisions, Dan Murphy’s (Destination) and BWS (Convenience) 4.4 • MyDanMurphy’s loyalty program now has 1.3m members 4.2 • Dan Murphy’s Online was awarded as the ‘M
Slide 9: New Zealand Supermarkets
New Zealand Supermarkets NZD HY16 HY15 Change Trading Performance For personal use only Sales ($m) 3,176 3,054 4.0% • New Zealand Supermarkets’ sales were NZ$3.2bn, +4.0% on H1’15 (3.8% increase in AUD). H1’16 sales were assisted by the bulk sales of gift cards – excluding the sales of these cards,
Slide 10: Progress against New Zealand Supermarket plans
Progress against New Zealand Supermarket plans Progress to date More to do For personal use only • Getting closer to our customers with increased feedback and • Continue to extend our Price Down program improved reporting of their shopping experience. We now review • Further improve the quality and
Slide 11: General Merchandise
General Merchandise HY16 HY15 Change Trading Performance For personal use only • Sales of $2.3 billion were -3.9% on H1’15 with comparable store sales Before Significant Items1 -4.5%. Sales momentum improved over the second quarter with December comparable sales broadly flat Sales ($m) 2,272 2,365 (
Slide 12: Progress against General Merchandise plans
Progress against General Merchandise plans Progress to date More to do For personal use only • Sally Macdonald commenced as new CEO of BIG W • Significant cost reduction exercise underway to improve in mid-January with strong retail and local base profitability turnaround experience • Back to basics
Slide 13: Hotels
Hotels HY16 HY15 Change Trading Performance For personal use only • Sales for H1’16 were $802m, +2.6% on H1’15 with Sales ($m) 802 782 2.6% comparable sales increasing by 1.4% • Sales were driven by a continued improvement in Bars with its best trading performance in over two years with Food EBIT ($
Slide 14: Progress against Hotels plans
Progress against Hotels plans Progress to date More to do For personal use only • Completed the roll out of voluntary pre commitment • Continue the refurbishment program with a further 18 functionality to our three major states (VIC, QLD and venues to be completed by the end of FY16 NSW) • To facili
Slide 15: Home Improvement
Home Improvement HY16 HY15 Change Trading Performance For personal use only Before Significant Items1 • Masters sales for the half year increased 23.4% to $623m • Masters loss before interest, tax and significant items increased by 22.9% to $137.9m driven by the sales Sales ($m) performance of the o
Slide 16: Home Improvement Exit Update
Home Improvement Exit Update For personal use only • During the half, following Woolworths announcement on 18 January, that it intended to exit the Home Improvement business through an orderly prospective sale or wind-up of the business, it has recognised a provision for impairment of assets and sto
Slide 17: Significant Items
Significant Items For personal use only $m HY16 HY151 Significant Items recognised in HY16 attributable to the Significant Items shareholders of Woolworths were $1,898.5m and comprise the following items related to the Group’s planned exit from Impairment of property, plant and (1,464.3) - Home Impr
Slide 18: Balance Sheet
• Net investment in inventory excluding write downs Balance Sheet relating to the exit from the Home Improvement business decreased $293.6m, impacted by differences in the timing of creditor payments relative to the Change reporting date (approximately $155m) $m HY16 HY15 HY16/HY15 FY15 For personal
Slide 19: Cash Flow
Cash Flow • Cash flow from operating activities before interest $m HY16 HY15 Change and tax was $2,022.2m and was impacted by: EBITDA before Significant Items1 2,019.4 2,664.2 (24.2)% For personal use only - lower trading performance; Significant Items1 excluding items presented below EBITDA (3,249.
Slide 20: Capital Expenditure
Capital Expenditure $m HY16 Actual HY15 Actual Group Capex excluding Home Improvement (HI) For personal use only New Stores 127 102 Refurbishments 196 173 Supply Chain, IT, Multi-option and Stay in Business 287 278 Operating Capex – excl. HI and Property Development 610 553 Property Development (net
Slide 21: Capital Management
Capital Management • Woolworths is committed to a solid investment grade credit rating and a number of actions can be undertaken to For personal use only support the credit profile including the sale of non-core assets, accelerating working capital initiatives and adjusting its growth capital expend
Slide 22: Outlook
Outlook For personal use only • Despite the financial performance, we are making progress in the rebuilding of Woolworths. We have significantly invested in price, service and customer experience in Australian Supermarkets, appointed a new Group and BIG W CEO and announced our exit of the Home Impro
Slide 23: Appendices
23 For personal use only APPENDICES
Slide 24: Group Sales
Group Sales $m HY16 HY15 Change For personal use only Australian Food and Liquor 22,347 22,200 0.7% Petrol1 2,519 3,306 (23.8)% Australian Food, Liquor and Petrol1 24,866 25,506 (2.5)% New Zealand Supermarkets (AUD) 2,895 2,790 3.8% New Zealand Supermarkets (NZD) 3,176 3,054 4.0% General Merchandise
Slide 25: Gross Profit Margin From Continuing Operations Before Significant Items
Gross Profit Margin From Continuing Operations Before Significant Items1 For personal use only Percentage Comments • Gross profit (before significant items1) as a 27.24 percentage of sales decreased 31 bps impacted by: 27.04 26.95 26.93 - Continued price investment in Australian 26.33 Supermarkets •
Slide 26: CODB / Sales From Continuing Operations Before Significant Items
CODB / Sales From Continuing Operations Before Significant Items1 For personal use only Percentage Comments • CODB (before significant items1) as a percentage of 22.38 sales increased 171 bps impacted by: - Subdued sales growth limiting the ability to fractionalise costs; and 20.67 20.61 20.51 - Cha
Slide 27: Fuel for Growth Update
Fuel for Growth Update • We previously announced that we expected to deliver at least $500m of cost-savings by the end of FY16 primarily across For personal use only Non-Trade Procurement, Support Functions, Mercury2 and Supermarket Operations • At the end of HY’16 we had delivered approximately $26
Slide 28: Key Balance Sheet Metrics
Key Balance Sheet Metrics Average Inventory Days Return On Average Funds Employed From Continuing (excluding Home Improvement) Operations Before Significant Items2 For personal use only Days Percentage 18.13 37.1 18.03 35.3 35.2 15.8 15.4 14.9 33.3 14.5 13.33 32.1 11.2 HY131 HY16 HY121 HY14 HY12 HY1
Slide 29: HY16 payout ratio in line with prior years
HY16 payout ratio (before Significant Items) in line with prior years For personal use only $b Interim dividend Buy back Final dividend In-specie distribution 2.2 2.2 0.7 0.5 1.8 1.7 1.7 1.6 1.0 0.3 0.9 0.9 0.9 1.3 0.8 0.7 1.1 0.7 0.9 0.6 0.7 0.5 0.4 0.7 0.7 0.7 0.8 0.8 0.8 0.5 0.6 0.6 0.3 0.4 FY06
Slide 30: Disclaimer
Disclaimer This presentation contains summary information about Woolworths Limited (Woolworths) and its activities current as at the date of this presentation. It should be read in conjunction with Woolworths’ other periodic and continuous disclosure For personal use only announcements filed with th
Slide 31: woolworthslimited.com.au
For personal use only woolworthslimited.com.au