Slide 1: 2008 Annual Results Information Pack
2008 Annual Results Information Pack 21 August 2008
Slide 2: Table of Contents
Table of Contents 1 Group Performance 3 2 Capital Management 10 3 Home Improvement & Office Supplies 18 4 Coles 30 5 Target 38 6 Kmart 44 7 Resources 50 8 Insurance 67 9 Industrial & Safety 76 10 Chemicals & Fertilisers 83 11 Energy 92 12 Other Businesses 100 13 Outlook 104 2
Slide 3: Group Performance Summary
Group Performance Summary Year ended 30 June ($m) 2008 2007 % Revenue 33,584 9,754 244.3 EBITDA 2,897 1,650 75.6 EBIT 2,243 1,305 71.9 Net profit after tax (pre non-trading items) 1,119 786 42.4 Net profit after tax (post non-trading items) 1,050 786 33.6 Operating cash flow 1,451 1,301 11.5 Earning
Slide 4: Divisional EBIT
Divisional EBIT Year ended 30 June ($m) 2008 2007 % Home Improvement & Office Supplies 625 528 18.4 Coles 474 n/a n/a Target 223 n/a n/a Kmart 114 n/a n/a Resources 423 338 25.1 Insurance 132 120 10.0 Industrial & Safety 130 115 13.0 Chemicals & Fertilisers 124 101 22.8 Energy 90 75 20.0 Other (incl
Slide 5: Non-Trading Items
Non-Trading Items Year ended 30 June ($m) 2008 Comment Redundancies and property Coles (101) impairments Kmart (4) Property writedown Home Improvement & Office Supplies (4) Redundancies Energy 8 Sale of Unigas Sale of Koukia ($9m), Centrepoint Insurance (1) Alliance impairment ($10m) Total (102) 5
Slide 6: Divisional ROC & Capital Employed
Divisional ROC & Capital Employed 2008 2007 R12 Capital Year ended 30 June EBIT ROC ROC Employed $m $m % % Home Improvement & Office Supplies^ 625 3,005 31.2 28.1 Coles* 474 15,128 n.m. n/a Target* 223 3,462 n.m. n/a Kmart* 114 1,117 n.m. n/a Resources 423 984 43.0 38.8 Insurance 132 1,146 11.5 15.8
Slide 7: Earnings, Cash Flow & Dividend
Earnings, Cash Flow & Dividend (cents per share) 400 350 300 250 200 150 100 50 0 2004 2005 2006 2007 2008 EPS^ Operating Cashflow* Dividend EPS and Cashflow excl. Landmark (2004) and ARG (2006) * Based on weighted average number of shares incl. employee reserved shares ^ AGAAP excl. goodwill amorti
Slide 8: Movement in Shares on Issue
Movement in Shares on Issue m shares 15.4 1.1 800 34.2 55.5 600 152.6 152.6 400 799.4 200 388.1 0 Opening Consideration Consideration Retail Institutional DIP & Other Closing for Coles for Coles Entitlement Entitlement Underwrite acquisition acquisition Offer Offer (ordinary) (PPS) 8
Slide 9: Return on Shareholders' Funds
Return on Shareholders’ Funds (rolling 12 months to 30 June) % 35 30 25 25.1 20 15 31.1 25.1 22.1 10 18.5 5 8.5 0 2004 2005 2006 2007 2008 AGAAP^ A-IFRS Excludes the sales of Landmark (2004) and ARG (2006) ^ Before goodwill amortisation 9
Slide 10: Capital Management
Capital Management
Slide 11: Capital Management
Capital Management • Net Debt / Equity of 47.4% at 30 June 2008 • Cash Interest Cover Ratio (rolling 12 months) to 30 June 2008 of 4.9 times, 5.1 times adjusted for non-trading items • Working capital increased by $661 million • Budget capital expenditure for FY09 $2bn, up from $1.2bn in FY08 • Divi
Slide 12: Capital Management
Capital Management • Total debt averaged $9.4bn for the year • Average level of net debt for FY09 is expected to be $9.5bn to $10.0bn • Anticipated FY09 interest rate in the mid to high 8s%, including fees – ~60% of typical debt levels hedged for 3 years at average ~7.4% • $11 million of additional
Slide 13: Capital Expenditure (cash basis)
Capital Expenditure (cash basis) Actual Actual Year ended 30 June ($m) 2008 2007 Home Improvement & Office Supplies 301 196 Coles 349 n/a Target 47 n/a Kmart 42 n/a Resources 140 164 Insurance 17 15 Industrial & Safety 21 26 Chemicals & Fertiliser 201 199 Energy 118 78 Other 5 2 Total 1,241 680 13
Slide 14: Capital Expenditure History
Capital Expenditure History $m 2,400 2,000 1,600 1,200 ~2,000 800 1,241 400 680 615 466 258 0 2004 2005 2006 2007 2008 2009E 14
Slide 15: Net Debt/Equity
Net Debt/Equity (as at 30 June) % 150 120 143.6 90 62.9 60 84.3 30 55.8 45.5 46.1 47.4 0 2004 2005 2006 2007 2008 AGAAP A-IFRS incl. Coles stake 15
Slide 16: Interest Cover Ratio (cash basis)
Interest Cover Ratio (cash basis) (as at 30 June) times 20 15 10 15.8 13.8 12.4 5.1 5 8.7 4.9 0 2004 2005 2006^ 2007 2008 EBITDA / Net cash interest paid Excl. non-trading items Excludes the sale of Landmark (2004) and ARG (2006) 16
Slide 17: Interest Revenue & Cash
Interest Revenue & Cash Year ended 30 June ($m) 2008 2007 Comment Interest Revenue: Insurance 87 66 Included in Insurance EBIT Other 34 6 Included in “Other” EBIT Total per P&L 121 72 Only “Other” interest revenue is included in Cash Interest Cover Ratio Cash Balances: Cash on hand & in transit 413
Slide 18: Home Improvement & Office Supplies
Home Improvement & Office Supplies
Slide 19: Home Improvement
Home Improvement BUNNINGS aes warehouse Wesfarmers
Slide 20: Home Improvement Performance Summary
Home Improvement Performance Summary Year ended 30 June ($m) 2008 2007 % Revenue 5,359 4,939 8.5 EBIT 589 528 11.6 ROC (R12 %) 31.2 28.1 3.1 pt Trading Revenue* ($m) 5,265 4,677 12.6 Net property contribution^ ($m) 26 54 (51.9) Trading EBIT* 569 487 16.8 Trading EBIT / Trading Revenue (%) 10.8 10.4
Slide 21: Home Improvement Highlights
Home Improvement Highlights • 13.9% cash sales growth* – FY store on store cash sales growth of 11.3% – 1 March to 30 June 2008 8.7% (incl. Easter) – driving strong growth and returns from existing network – better merchandising – improved operational disciplines, and – continued network reinvestmen
Slide 22: Bunnings' Store Network
Bunnings’ Store Network at June 2008 165 Warehouse stores 2 61 Small format stores 28 5 19 10 8 2 50 17 12 25 41 1 3 2 1 Excludes Trade operational sites 22
Slide 23: Store Network Movements
Store Network Movements Open at Opened Closed Open at Under June 2007 June 2008 construction Bunnings Stores Warehouse format 155 11 1 165 9 Smaller format 65 2 6 61 1 Bunnings trade operations Trade Centres 8 5 2 11 6 Trade focused stores 3 0 0 3 HouseWorks Stores 3 0 3 0 23
Slide 24: Home Improvement Outlook
Home Improvement Outlook • Continued cash sales growth – Improved service, merchandising initiatives and network development – Challenging retail conditions will impact overall growth • Continued uplift in trade business performance • Strong focus on the team • Business effectiveness & efficiency he
Slide 25: Office Supplies
Office Supplies Officeworks YY)
Slide 26: Office Supplies Performance Summary
Office Supplies Performance Summary 23 November to 30 June 2008 ($m) 2008 Revenue 802 EBIT 36 Total Sales Growth (%) 1.6 Trading Revenue* ($m) 802 Net property contribution ($m) - Trading EBIT* 36 Trading EBIT / Trading Revenue (%) 4.5% * Excludes non-trading items 26
Slide 27: Office Supplies Highlights and Outlook
Office Supplies Highlights • Strategies reset, transitioning to EDLP • New branding and in-store look being rolled out – New concept store developed and trading well • Transaction growth 4 times sales growth • Single buying team across all channels Outlook • Difficult trading conditions – Moderate s
Slide 28: Officeworks' Store Network
Officeworks’ Store Network at June 2008 115 Officeworks stores 11 Harris Technology stores 4 Centralised Fulfillment Centres 4 Centralised Service Centres 21 2 1 10 2 8 1 37 5 1 2 37 2 2 1 2 28
Slide 29: Store Network Movements
Store Network Movements Under Dec 2007 Opened Closed Jun 2008 construction Officeworks 112 3 - 115 6 Harris Technology 10 1 - 11 0 29
Slide 30: Coles
Liquor Superstore VintaGe CELLARS coles | ee ee express
Slide 31: Coles Performance Summary
Coles Performance Summary 23 November to 30 June 2008 ($m) 2008 Revenue 16,876 EBITDA 714 Depreciation & Amortisation (240) EBIT 1,2 (pre Non-Trading Items) 474 Food & Liquor Revenue 4 12,825 Total store sales growth % 4.2 Comparative store sales growth % 2.8 Trading EBIT 1,2,4 422 Convenience Reven
Slide 32: Coles Highlights
Coles Highlights • Food & Liquor Q4 Sales trend (13 weeks to 29 June 2008) – Headline Sales Growth 4.2% (Incl. Easter (17 weeks to 29 June) 4.8%) – Comparative Store Sales Growth 2.4% (Incl. Easter (17 weeks to 29 June) 3.2%) – Fresh produce deflation • 4Q convenience sales – Headline Sales Growth 8
Slide 33: Coles Highlights (cont)
Coles Highlights (cont) • Meaningful and sustainable improvement will take up to 5 years – First phase: getting the business fit for purpose and fit for the customer • Actions so far – New management team recruited (in place from August 2008) – Beginning to stabilise the business – Improved operatin
Slide 34: Coles Highlights (cont)
Coles Highlights (cont) Evolution of key strategic programmes • Supermarkets: - Improving value and in-store communication - Simplifying product range for customers - Improving Fresh offer - New store model • Liquor: Brand strategy review • Convenience: Further roll-out of improved store proposition
Slide 35: Coles Store Network
Coles Store Network at 30 June 2008 Selling area Supermarkets (sqm) 1,551,858 Selling area Liquor (sqm) 268,898 7 8 11 152 233 79 79 92 5 116 67 66 31 6 43 240 246 5 208 158 192 157 750 Supermarkets 767 Liquor stores 14 16 95 Hotels 619 Convenience 35
Slide 36: Store Network Movements
Store Network Movements Acquired on Open at Opened Closed 23 Nov 2007 30 June 2008 Supermarkets Coles 677 17 9 685 Bi-Lo 69 - 4 65 Total Supermarkets 746 17 13 750 Liquor 1st Choice 42 10 - 52 Vintage Cellars 87 1 3 85 Liquorland 615 31 16 630 Hotels 91 4 - 95 Total Liquor 835 46 19 862 Total Conven
Slide 37: Coles Outlook
Coles Outlook • Softer retail economic conditions expected • Pressure on household spending and greater value focus • Fresh produce deflation to continue through first half • Evolution of key strategic programmes • Increased focus on product availability • Strong focus on cost and capital management
Slide 38: Target
Wesfarmers
Slide 39: Target Performance Summary
Target Performance Summary 23 November to 30 June 2008 ($m) 2008 Revenue 2,198 EBITDA 256 Depreciation & Amortisation (33) EBIT 223 Total revenue growth (%) 7.4 Comparative store sales growth (%) 3.3 EBIT margin (%) 10.1 Store numbers 277 39
Slide 40: Target Highlights
Target Highlights • EBIT margin strength maintained at 10.1% • Acquired market share over the period • Controlled all aspects of the business to grow profit • Inventory well placed to confront difficult trading conditions • Three new store openings, taking total number of stores to 277 • Outstanding
Slide 41: Target Store Network
Target Store Network at 30 June 2008 1 1 31 23 14 11 19 13 49 45 41 24 159 Target stores 118 Target Country stores 4 1 41
Slide 42: Store Network Movements
Store Network Movements Under Dec 2007 Opened Closed Jun 2008 construction Target 156 3 - 159 9 Target Country 118 - - 118 5 • 7 Stores will close to be replaced by the above new stores 42
Slide 43: Target Outlook
Target Outlook • Increased and enhanced store network – Plan to open ~10 Target stores over the next 12 months – Accelerating refurbishments in key stores – this will result in costs being brought forward • Targeting increased market share – Via new and refurbished stores and outstanding offers • Fo
Slide 44: Kmart
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Slide 45: Kmart Performance Summary
Kmart Performance Summary 23 November to 30 June 2008 ($m) 2008 Revenue 2,454 EBITDA 145 Depreciation & Amortisation (31) EBIT 114 Total store sales growth (%) 2.4 Comparative store sales growth (%) 2.2 EBIT margin (%) 4.6 Store numbers (incl. Kmart Tyre & Auto) 445 45
Slide 46: Kmart Highlights
Kmart Highlights • Tough trading conditions in Q4, as expected – Q4 comparable store sales declined by 0.1% (13 weeks to 29 June, Easter adjusted) – Aggressive competitor activity – Economic environment • Delivered growth in margin – Actions taken over last 2 years resulting in improved margins • Co
Slide 47: Kmart Store Network
Kmart Store Network at 30 June 2008 2 3 36 52 20 31 13 20 48 74 12 43 78 182 Kmart stores 5 5 3 263 KTAS centres 47
Slide 48: Store Network Movements
Store Network Movements Under Dec 2007 Opened Closed Jun 2008 construction Kmart 183 1 2 182 5 Kmart Tyre & Auto 267 2 6 263 4 • 2 Kmart and 2 Tyre & Auto Stores will close to be replaced by the above new stores 48
Slide 49: Kmart Outlook
Kmart Outlook • Continue to improve our customer proposition by focusing on: – Customer – Product leadership – Store experience & expansion – End to end execution • Build team capability • Build programmes in support of environment, safety and community • Extend network in FY09 – ~3 new Kmart stores
Slide 50: Resources
Resources
Slide 51: Resources Performance Summary
Resources Performance Summary Year ended 30 June ($m) 2008 2007 % Revenue 1,311 1,134 15.6 EBITDA 571 520 9.8 Depreciation & Amortisation* (148) (182) 18.7 EBIT 423 338 25.1 ROC (R12 %) 43.0 38.8 4.2pt Coal Production (‘000 tonnes) 14,318 13,754 4.1 Safety (R12 LTIFR)^ 6.4 3.4 * Includes Stanwell re
Slide 52: Resources Highlights
Resources Highlights • Increased coal production for the Resources Division • Record production and sales from Curragh • Strong recovery following January 2008 flood events • 25 per cent increase in divisional earnings • Ongoing strong coal demand in constrained infrastructure environment • Record p
Slide 53: Coal Production – Resources Division
Coal Production – Resources Division • Curragh: tonnes (m) 16 – Record coal production 14 – Recovery from January flood 12 • Premier: 10 – Reduced sales to Verve Energy 8 – Varanus gas disruption 6 • Bengalla: 4 – Continued port constraint 2 impacting production 0 2002 2003 2004 2005 2006 2007 2008
Slide 54: Coal – Production Volumes
Coal – Production Volumes Year ended Mine Beneficial Coal Type ('000 tonnes) Interest Jun-08 Jun-07 Premier, WA 100% Steaming 2,774 2,990 Curragh, QLD 100% Metallurgical 6,888 6,388 Steaming 2,484 2,202 Bengalla*, NSW 40% Steaming 2,172 2,174 Total 14,318 13,754 * Wesfarmers attributable production
Slide 55: Seaborne Metallurgical Coal Market
Seaborne Metallurgical Coal Market CONSTRAINED SUPPLY STRONG DEMAND Australia rail & port New high growth markets constraints continue Brazil, India Seaborne Metallurgical High levels of US re-entering export market Coal Market steel production Customer stock rebuild Robust steel price US$900 Strong
Slide 56: Australian Hard Coking Coal Prices
Australian Hard Coking Coal Prices US$/Tonne (Nominal) FOB Australia (annual verse spot) 400 350 300 250 200 150 100 50 0 2003 2004 2005 2006 2007 2008 2009 Spot Price Annual Reference Price Source: Barlow Jonker, Tex Report, Macquarie Research 56
Slide 57: Australian Steaming Coal Prices
Australian Steaming Coal Prices US$/Tonne (Nominal) FOB Australia (annual verse spot) 200 160 120 80 40 0 2003 2004 2005 2006 2007 2008 2009 Spot Price JPU Reference Source: Barlow Jonker 57
Slide 58: Coal – Sales Volumes
Coal – Sales Volumes Beneficial Year ended Mine Coal Type Interest ('000 tonnes) Jun-08 Jun-07 Premier, WA 100% Steaming 2,864 2,980 Curragh, QLD 100% Metallurgical 6,548 6,457 Steaming 2,418 2,236 Bengalla*, NSW 40% Steaming 2,228 2,217 Total 14,058 13,890 * Wesfarmers attributable sales 58
Slide 59: Curragh Metallurgical Sales Growth
Curragh Metallurgical Sales Growth tonnes (m) 7 6 Wesfarmers ownership 5 4 3 2 1 0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009F * * Sales volumes is forecast to be in the range of 6.5 to 6.9mt 59
Slide 60: Curragh Production Costs
Curragh Production Costs Year ending June 2008 vs year ending June 2007 • Continued pressure on input cost such as fuel, explosives and labour • Curragh maintains position in lowest quartile of industry cost curve Increase Total cash production cost * 14% Total production volume 9% Cash production c
Slide 61: Demurrage
Demurrage • Ongoing high demurrage costs due to constrained export coal chains $Am 20 18 16 $3.20/t $2.64/t 14 12 10 8 $1.88/t $1.96/t 6 4 2 0 FY 2007 FY 2008 Curragh Bengalla (40%) 61
Slide 62: Curragh Metallurgical Sales Mix
Curragh Metallurgical Sales Mix Semi Hard Hard 19% Hard Semi Hard 43% 45 - 48% 20% PCI PCI 38% 32 - 35% 2007/08 2008/09 budget 6.5 million tonnes 6.5 - 6.9 million tonnes 62
Slide 63: Wesfarmers Curragh Hedging Profile
Wesfarmers Curragh Hedging Profile Year end Current proportion of US$ Average 30 Jun revenue hedged* A$ / US$ hedge rate 2009 82% 0.85 2010 64% 0.80 2011 47% 0.80 2012 25% 0.81 2013 15% 0.82 * calculated using known contract outcomes and long run pricing and volume assumptions 63
Slide 64: Gladstone Coal Delivery System
Gladstone Coal Delivery System Performance update • RG Tanna terminal expansion to 75mtpa ceremony • Wiggins Island Terminal proposed 2012 – EIS approval granted – Feasibility study continuing into 2009 – Potential 75mtpa • Forecast ongoing rail constraints into 2008/09 – Additional below track dupl
Slide 65: Newcastle Coal Delivery System
Newcastle Coal Delivery System Performance update • Restricted system capacity ongoing – Decreased vessel queues and lower demurrage expenses • Capacity balancing system to 31 December 2008 – De-rated export capacity 95mtpa • Greiner review process concluded – Shippers proposal sits with NSW Governm
Slide 66: Resources Outlook
Resources Outlook • High coal prices • Volatile Australian dollar • Ongoing constrained export coal chains • Availability of key inputs and industry cost pressures to continue • Impact of Government Climate Change Policy on the Coal Industry • Curragh metallurgical sales 6.5 - 6.9mt in 2008/09 • Inc
Slide 67: Insurance
Insurance 67
Slide 68: Insurance Performance Summary
Insurance Performance Summary Year ended 30 June ($m) 2008 2007* % Gross Written Premium Underwritten 1,328 1,191 11.5 EBITA Underwriting 80 97 (17.5) EBITA Broking 56 32 75.0 EBITA Other 9 1 n.m. EBITA Insurance Division 145 130 11.5 EBIT Insurance Division^ 132 120 10.0 Net Earned Loss Ratio (%) 6
Slide 69: Highlights/Overview
Highlights/Overview • Underwriting margins affected by severe weather and rate pressure • Full year contribution of broking businesses following acquisitions in FY2007 • Earnings growth in broking on like-for-like basis • Record earnings result for WFI • Restructuring program and new CEO in Lumley N
Slide 70: Geographical presence
Geographical presence 3 1 6 2 4 13 21 1 2 1 1 4 12 8 18 11 6 18 6 1 Lumley General Australia 11 6 Lumley General New Zealand 10 3 4 Wesfarmers Federation Insurance 85 1 2 OAMPS 32 Crombie Lockwood 17 70
Slide 71: Underwriting Performance Summary
Underwriting Performance Summary Year ended 30 June ($m) 2008 2007* % Gross Written Premium 1,328 1,191 11.5 Net Earned Premium 947 844 12.2 Net Claims (620) (527) (17.6) Net Commission and Expenses (309) (268) (15.3) Underwriting Result 19 49 (61.2) Insurance Margin 56 80 (30.0) EBITA 80 97 (17.5)
Slide 72: Broking Performance Summary
Broking Performance Summary Year ended 30 June ($m) 2008 2007* % Commission and Fee Income 178 102 74.5 Other Income 31 17 82.4 Total Income 209 119 75.6 Expenses (153) (86) (77.9) EBITA 56 32 75.0 Amortisation of Identifiable Intangible Assets (13) (10) (30.0) EBIT 43 22 95.5 EBITA Margin (%) 26.7
Slide 73: Underwriting KPIs
Underwriting KPIs Year ended 30 June (%) 2008 2007 %pt Gross Earned Loss Ratio 64.8 60.8 (4.0) Net Earned Loss Ratio 65.4 62.4 (3.0) Reinsurance Expenses (% GEP) 24.6 25.9 1.3 Exchange Commission (% RI excl XOL) 24.6 26.9 (2.3) Commission Expense (% GWP) 13.9 13.8 (0.1) Total Earned Expenses (% GEP)
Slide 74: Gross Written Premium by Class
Gross Written Premium by Class Total: $1,328m Liability 18% Marine 4% Engineering 7% Personal 19% AMO 4% Crop 2% Commercial Motor Commercial 21% 25% 74
Slide 75: Insurance Outlook
Insurance Outlook • Improvement in underwriting margins subject to weather events • Stabilisation of rates with selective increases in commercial classes • Recent rate increases and restructuring to improve margins in Lumley NZ • No exposure to equities due to conservative investment strategy • Purs
Slide 76: Industrial & Safety
Industrial & Safety Wesfarmers
Slide 77: Industrial & Safety Performance Summary
Industrial & Safety Performance Summary Year ended 30 June ($m) 2008 2007 % Revenue 1,309 1,208 8.4 EBITDA 141 128 10.2 Depreciation & Amortisation of PPE (11) (13) 15.4 EBIT 130 115 13.0 EBIT / Revenue (%) 9.9 9.5 0.4 pt ROC (R12 %) 16.8 15.6 1.2 pt Safety (R12 LTIFR)* 4.5 4.6 * Includes Bullivants
Slide 78: Industrial & Safety Highlights
Industrial & Safety Highlights • Operating revenue up 8.4% to $1,309m – Growth in all businesses, particularly Blackwoods and Bullivants – Strong sales from resources and infrastructure sectors • Earnings increased by 13.0% to $130m – Strong improvement across all Australian businesses and Blackwood
Slide 79: Industrial & Safety Business Portfolio
Industrial & Safety Business Portfolio Australia New Zealand “All your Safety Industrial workplace needs” Specialist Specialists (formerly Mullings Fasteners) 79
Slide 80: Industrial & Safety Distribution Network
Industrial & Safety Distribution Network: 241 branch locations NEW ZEALAND BUSINESSES No. 24 2 1 NZ Safety 17 12 Protector Safety 22 1 Blackwoods Paykels (NZ) 21 9 4 15 9 Packaging House 10 6 1 1 5 5 5 6 5 17 7 3 1 1 5 1 11 7 24 22 AUSTRALIAN BUSINESSES No. 1 1 1 Blackwoods 72 10 21 Atkins Electrica
Slide 81: Business Activity Highlights
Business Activity Highlights • Improved safety performance, strong reduction in lost days and severity of injuries • Continued improvement in customer service and delivery performance – Won “Best Industrial Supply Chain” award in Australia1 – DC upgrades and branch networks refurbishment programme w
Slide 82: Industrial & Safety Outlook
Industrial & Safety Outlook • Strong competitive foundations to address market conditions – Increasing exposure to growth markets while optimising positions in traditional markets – Leveraging sourcing and pricing capabilities and disciplines – Continuously improving value proposition and service ah
Slide 83: Chemicals & Fertilisers
Chemicals & Fertilisers 83
Slide 84: Chemicals & Fertilisers Performance Summary
Chemicals & Fertilisers Performance Summary Year ended 30 June ($m) 2008 2007 % Revenue Chemicals 464 248 87.1 Fertilisers 533 345 54.5 997 592 68.4 EBITDA 172 138 24.6 Depreciation & Amortisation of PPE (48) (37) (29.7) EBIT 124 101 22.8 Sales Volume (‘000t): Chemicals 605 449 34.7 Fertilisers 1,05
Slide 85: Chemicals & Fertilisers Highlights
Chemicals & Fertilisers Highlights • Construction and commissioning of AN expansion; solution production from March 2008 and prill in June 2008 • Increased production across all chemical business units • Improved contribution from all chemical business units • Fertiliser sales volumes and revenue in
Slide 86: Chemicals & Fertilisers - Locations
Chemicals & Fertilisers - Locations ■ CSBP fertilisers Manufacturing plant 5 Import and distribution centres 5 Depots 6 Regional Sales Representatives 27 Sales agents 135 ■ CSBP chemicals Manufacturing plants 10 ■ AV Manufacturing plants 2 ■ QNP (50%) Manufacturing plants 4 86
Slide 87: Fertiliser Sales
Fertiliser Sales kt 1,200 1,000 800 739 670 813 589 600 612 400 200 381 370 387 249 289 0 2004 2005 2006 2007 2008 1st Half 2nd Half 87
Slide 88: Chemicals Performance
Chemicals Performance • Ammonia – Plant availability for the year was lower than prior year due to: 1. unplanned shutdowns in the first quarter; and 2. the disruption of gas supplies from 3 June 2008. – Production exceeded previous year due to record performance December 2007 through May 2008 • Sodi
Slide 89: Chemicals Performance
Chemicals Performance • Ammonium Nitrate – Solution production increased 25.3 per cent over previous year due to new nitric acid and ammonium nitrate plants being commissioned during the year – Ammonia imported to overcome the disruption of gas supplies • Australian Vinyls – Production impacted in 4
Slide 90: Kwinana Ammonium Nitrate Expansion
Kwinana Ammonium Nitrate Expansion • Ammonium nitrate solution name plate capacity has increased from 235,000 tonnes to 470,000 tonnes • New prilling plant name plate capacity is 350,000 tonnes • Explosive market demand for product continues to increase • Market demand for Flexi-N liquid fertiliser
Slide 91: Chemicals & Fertilisers Outlook
Chemicals & Fertilisers Outlook CHEMICALS • Ammonia sales to BHPB’s Kwinana Nickel Refinery curtailed due to BHPB’s four month shutdown • Ammonia imports continue until disruption of gas supplies resolved • AN production and sales will benefit from a full year’s operation of expanded capacity • AV w
Slide 92: Energy
Wesfarmers
Slide 93: Energy Performance Summary
Energy Performance Summary Year ended 30 June ($m) 2008 2007 % Revenue 565 463 22.0 EBITDA 128 104 23.1 Depreciation & Amortisation^ (38) (29) (31.0) EBIT* 90 75 20.0 ROC (R12 %) 11.6 17.9 (6.3)pts WLPG production (‘000t) 168 186 (9.7) Safety (R12 LTIFR) 6.3 2.6 ^ Amortisation of intangibles $1.3m (
Slide 94: Energy Highlights
Energy Highlights • Record high international energy prices • Successful integration of Coregas • Completed two industrial gas supply projects: acetylene and liquid nitrogen • Aboriginal remote communities power project achieved commercial operation • WA LNG project remained on budget but delayed du
Slide 95: Energy - locations
Energy - locations Industrial, medical and specialty gases Air separation units (ALWA) Air separation units (Coregas) Hydrogen/acetylene plants (Coregas) 2 1 Industrial gas depots/branches (ALWA) 1 1 Industrial gas depots/branches (Coregas) 1 1 LPG & LNG LPG depots/branches 14 5 5 1 LPG extraction f
Slide 96: International LPG prices
International LPG prices USD/tonne Propane Ave CP 1000 Jul 07 - Jun 08 USD 748 800 600 400 Ave CP 200 Jul 06 - Jun 07 USD 523 0 Jun-92 Jun-94 Jun-96 Jun-98 Jun-00 Jun-02 Jun-04 Jun-06 Jun-08 International LPG contract price increased 43% 96
Slide 97: WLPG production
WLPG production kt Ave t/TJ 200 1.00 0.90 150 0.80 100 0.70 50 0.60 0 0.50 2006 2007 2008 WLPG production (kt) LPG content (t/TJ) WLPG production 9.7% below previous year due to lower LPG content 97
Slide 98: LNG Project
LNG Project • Commissioning delayed due to Varanus Island incident • LNG plant reached mechanical completion within budget • Power stations – Darlot and Sunrise Dam power station commissioning phases dependent on LNG supply – all storage facilities are completed • Heavy duty vehicles – all 18 tanker
Slide 99: Energy Outlook
Energy Outlook • LPG earnings dependent on international LPG prices and gas supply in Western Australia • Pursue additional sales for the industrial, medical and specialty gas businesses through extended product supply • Delayed contributions from the vertically integrated LNG project in 2008/09 • P
Slide 100: Other Businesses
Other Businesses 100
Slide 101: Other Business Performance Summary
Other Business Performance Summary Holding Year ended 30 June ($m) 2008 2007 % Associates: Gresham Private Equity - Fund 1 51 4 - Gresham Private Equity - Fund 2 67 12 12 Gresham Partners 50 7 4 Wespine 50 8 8 Bunnings Warehouse Property Trust 23 - 47 Tax on relevant associates (10) (8) Sub-total 21
Slide 102: Breakdown of reported result
Breakdown of reported result Year ended 30 June ($m) 2008 2007 Divisional EBIT 2,335 1,277 Profit from associates 21 63 Other EBIT 77 32 Non-trading items (102) - Corporate overheads (88) (67) Group EBIT 2,243 1,305 Less: Finance costs - expense net of capitalisation 692 187 - other borrowing fees 5
Slide 103: Gresham Private Equity
Gresham Private Equity Fund 1 • Riviera only remaining investment • Wesfarmers’ current investment $26m Fund 2 • Wesfarmers’ current commitment $183m; capital invested $161m • Investments include: – Barminco, Australian Pacific Paper Products, Witchery, Noel Leeming, Silk Logistics Group, GEON and A
Slide 104: Outlook
Outlook
Slide 105: Outlook
Outlook • Coles focus intensifying • Ongoing impact of downturn in consumer sentiment • High prices and strong demand prospects for coal • Continuing strong demand for our industrial products • Signs insurance premiums are improving • Ongoing capital expenditure in all businesses 105
Slide 106: For all the latest news visit www.wesfarmers.com.au
For all the latest news visit www.wesfarmers.com.au 106