Slide 1: Company Results Full Year ended 28 June 2009
Michael Luscombe Chief Executive Officer Tom Pockett Company Results Finance Director Full Year ended 28 June 2009
Slide 2: Highlights for Financial Year 2009
Highlights for Financial Year 2009 • This has been a successful year with our business performing well overall in a difficult economic climate • The result is the outcome of our consistent delivery against our clearly defined strategies — proving that Woolworths is built to deliver sustainable resul
Slide 3: Highlights – Full Year 2009
Highlights – Full Year 2009 Successful year with solid results across our business Growth1 Growth FY09 52 v 52 52 v 53 Sales - Group $49.6b Ç 7.5% Ç 5.4% - ex Petrol $44.1b Ç 8.5% Ç 6.6% EBIT $2,815.5m Ç 13.4% Ç 11.3% NPAT $1,835.7m Ç 14.9% Ç 12.8% EPS 150.7¢ Ç 13.8% Ç 11.7% ROFE 31.9% Ç 1.1%pts Ç 0
Slide 4: Highlights for the year
Highlights for the year a — = 2 — D 2 6 = O S
Slide 5: Rollout of New Formats – Australia & NZ
Rollout of New Formats – Australia & NZ "We will continue to invest in our store network Results from our accelerated refurbishment • We currently have program are on track" approximately 40% of Australian Supermarkets; 15%1 of BIG W; 17% of Consumer Electronics and 13% of NZ Supermarkets in their n
Slide 6: Supply Chain / Distribution Centres
Supply Chain / Distribution Centres Modern efficient network Supermarkets RDC Supermarkets DC Townsville Produce Supermarkets NDC Liquor DC Warwick Brisbane BIG W DC Dick Smith Wyong Perth Adelaide Chullora Sydney Albany Auckland Villawood Monarto Wodonga Palmerston North Hume Melbourne Mulgrave Pro
Slide 7: Now even more reasons to shop with us…
Now even more reasons to shop with us… • Our ongoing focus is delivering great value to our customers • Enhanced Everyday Rewards program and Qantas Frequent flyer alliance • Launch of Everyday Mobile • Even more rewards when you shop with the Everyday Money credit card • Low prices and great value
Slide 8: Great value for our customers everyday
Great value for our customers everyday + = + Adding real value to everyday shopping 8
Slide 9: Loyalty Program
Loyalty Program "Growing opportunity • Understanding our customers’ needs in to engage with a richer way our customers in a new way" • Providing customers with targeted special offers • 3.8m cards registered • Over 1.2m Everyday Rewards holders have linked to Qantas Frequent flyer 9
Slide 10: Prepaid Mobile
Prepaid Mobile • Launched to customers on 17 August "A single pre-paid 2009 firmly targeting Woolworths’ mobile plan with shoppers and their families straightforward • Low rates for standard talk and text talk and text" • Recharge available in over 3,000 outlets and online • Developed in partnership
Slide 11: Repositioning of Consumer Electronics
Repositioning of Consumer Electronics • Transitioning to one brand • Rollout of new format now underway. 77 stores in new format at end of financial year "Techxpert • Comparable sales for our Australian Dick advice at the Smith stores were 13.4% (excluding best price" Powerhouse and Tandy) • The Aus
Slide 12: New Zealand Supermarkets
New Zealand Supermarkets • Our business foundation transformation has been completed in line with the original three year timeline including "New offer – Systems replacement – Initial buying harmonisation delivering results" – Focus on Fresh – Private label rollout • Initial results are showing oper
Slide 13: Private label and control brands
Private label and control brands "Strong endorsement • Private label expansion has continued by our customers" with performance reflecting the quality of our offer and customer acceptance • Growth in private label products exceeds our overall performance • Our largest private label, Homebrand, conti
Slide 14: Bolt on acquisitions and investments
Bolt on acquisitions and investments 14
Slide 15: Financial results
CALLIN] SHLIOMIOOM, Financial results
Slide 16: Report Card
Report Card In comparison with our regularly expressed goals 2008 2009 1 1 1 Percentage 2001 2002 2003 2004 2005 2006 2007 stat 2008 stat 20091 Sales will grow in the upper single 10.1 14.9 9.6 6.1 12.2 20.4 12.6 10.7 8.7 5.4 7.5 digits assisted by bolt on acquisitions (excluding Petrol) 8.9 13.7 7.
Slide 17: EBIT – up 13.4%
EBIT – up 13.4%1 EBIT growth underpinned by strong growth in Australian Food and Liquor $m 3,000 Total Ç11.3% Ç13.4% Group 2,500 EBIT Ç19.8% Ç17.6% Ç15.1% Ç17.4% Australian 2,000 Ç22.6% Ç19.8% Ç17.5% Food and Ç32.3% Liquor 1,500 Ç24.2% EBIT Ç20.5%2 Ç17.8% 1,000 Ç14.4%2 500 0 1 FY05 FY06 FY07 FY08 FY
Slide 18: Profit after tax – up 14.9%
Profit after tax – up 14.9%4 $m 2,000 1,835.7 1,835.7 1,626.8 1,598.0 Ç12.8% Ç14.9% 1,500 Ç25.7% Ç23.5% 3 1,294.0 2 Ç27.5% 1,014.6 1,000 816.2 1 Ç24.3% Ç18.7% 500 0 4 4 2005 2006 2007 2008 2008 2009 2009 Stat Stat 1. Includes ALH from 31 October 2004 and MGW from 2 January 2005 2. Includes Progressi
Slide 19: CODB / Sales
CODB / Sales Our targeted CODB reduction of 20 basis points was achieved when the distorting impact of Hotels, Petrol and the profits from development properties in 2008 are excluded Percentage 21.00% 20.73% 20.47% 20.35% 20.03%1 19.98% 20.00% 19.92% 19.00% 2005 2006 2007 2008 2009 1. Excludes the p
Slide 20: Gross Profit Margin (excluding Hotels)
Gross Profit Margin (excluding Hotels) As expected Gross Profit Margin has improved reflecting improved buying, the success of our private label offering, the change in sales mix and offset by significant price reinvestment activity Percentage 26.00% Total GP 25.66% Margin 25.32% 25.30% 25.03% 25.00
Slide 21: Dividends per share
Dividends per share FINAL DIVIDEND 2009: 56¢ Cents INTERIM DIVIDEND 2009: 48¢ 125 104 100 92 Ç13.0% Ç24.3% 74 75 Ç25.4% 59 51 Ç15.7% 50 Ç13.3% 25 2005 2006 2007 2008 2009 Dividend pay-out ratio of 69.7% is in line with last year 21
Slide 22: Australian Supermarket Division
Australian Supermarket Division Australian Food and Liquor FY08 FY09 Change Comparable Sales – up 7.4% (2008: 6.3%) Sales ($m) 36,142.6 38,291.3 5.9% Percentage Gross margin (%) 23.45 24.07 62bps CODB (%) 17.93 18.09 16bps1 10 8.8 7.6 7.1 7.9 8 6.0 6.0 6.7 EBIT to sales (%) 5.52 5.98 46bps 6 4.9 4 E
Slide 23: Petrol
Petrol • Sales of $5.5 billion, down 2.8% (down 0.5% normalised); Litres up 4.4% normalised • Comparable sales dollars decreased by 4.3% reflecting lower pump petrol prices than "Quick and last year • Comparable volumes increased 1.2% convenient forecourt reflecting strength of our offer payment sol
Slide 24: Liquor
Liquor • All our Liquor operations (Dan Murphy’s, BWS and Supermarket attached liquor) "Providing a recorded strong growth in sales and profit tailored offer to our • Group Liquor sales for the year were customers with $5.2 billion (FY08: $4.7 billion) • Woolworths operated 1,154 liquor outlets at c
Slide 25: New Zealand Supermarkets
New Zealand Supermarkets NZ$ FY08 FY09 Change Comparable Sales – up 3.6% (2008: 6.4%) Sales ($m) 4,858.7 4,956.9 2.0% Gross margin (%) 21.87 21.90 3bps Percentage CODB (%) 17.68 17.70 2bps 12 9.9 EBIT to sales (%) 4.19 4.20 1bps 8 5.7 6.2 5.5 3.0 3.0 3.2 3.5 Trading EBIT ($m) 203.7 208.1 2.2% 4 Less
Slide 26: BIG W
BIG W FY08 FY09 Change Comparable Sales – up 7.1% (2008: 4.7%) Sales ($m) 3,915.9 4,267.3 9.0% Gross margin (%) 29.99 29.59 (40)bps Percentage 11.5 12 9.6 CODB (%) 25.87 24.90 (97)bps 8 6.4 6.7 4.4 3.8 EBIT to sales (%) 4.12 4.69 57bps 3.6 4 2.6 EBIT ($m) 161.2 200.2 24.2% 0 Funds Employed ($m) 540.
Slide 27: Hotels
Hotels FY08 FY09 Change Comparable Sales – up 0.7% (2008: 1.3%) Sales ($m) 1,113.4 1,110.3 (0.3)% Percentage 3.5 Gross margin (%) 82.28 83.04 76bps 4.0 2.3 2.3 2.0 0.9 1.0 0.6 CODB (%) 62.96 63.41 45bps 0.0 EBIT to sales (%) 19.32 19.63 31bps (2.0) (0.8) (1.6) Q1 Q2 Q3 Q4 EBIT ($m) 215.1 218.0 1.3%
Slide 28: Consumer Electronics – Australia & NZ
Consumer Electronics – Australia & NZ FY08 FY09 Change Comparable Sales – up 6.3% (2008: 4.4%) Sales ($m) 1,426.6 1,536.5 7.7% Gross margin (%) 27.49 26.32 (117)bps Percentage 10 8.2 CODB (%) 22.72 22.73 1bps 8 6.5 5.6 4.9 5.3 5.0 6 3.7 3.8 EBIT to sales (%) 4.77 3.59 (118)bps 4 EBIT ($m) 68.1 55.1
Slide 29: Consumer Electronics – India
Consumer Electronics – India • Our business venture with TATA is still growing with 33 retail stores operating under the "Croma" brand • As part of this venture Woolworths Limited provides buying, wholesale, supply chain Mumbai and general consulting services to TATA • The wholesale operations are m
Slide 30: Balance Sheet
Balance Sheet $m FY08 FY09 Inventory 3,010.0 3,292.6 • Inventory growth of 9.4% vs sales growth of 7.5%1 reflecting impacts of the new Liquor DC’s opened in Trade Payables (3,878.1) (4,055.1) the first half and higher indent stock level Net investment in inventory (868.1) (762.5) • Trade creditors i
Slide 31: Cash Flow
Cash Flow FY08 (53 weeks) FY09 (52 weeks) ($m) ($m) EBITDA 3,178.9 3,544.9 +11.5% 1 Net (decrease)/Increase in Creditors 644.8 169.9 Net decrease/(Increase) in Inventory (303.4) (273.1) 2 Net change in other working capital and non cash (76.9) 209.0 Cash from Operating Activities before interest and
Slide 32: Group Cash Flow – Five Years
Group Cash Flow – Five Years Cumulative CAGR FY05 FY06 FY07 FY08 FY09 5 years (FY05-09) EBITDA (a) 1,718.1 2,244.4 2,700.6 3,178.9 3,544.9 13,386.9 +19.9% (inc on prior year) 16.7% 30.6% 20.3% 17.7% 11.5% Net (decrease)/Increase in Creditors 17.4 169.0 467.3 644.8 169.9 Net decrease/(Increase) in In
Slide 33: Average Inventory Days
Average Inventory Days When we exclude the impact of incremental imported inventory and the incremental inventory associated with our new Liquor DC's, inventory days was in line with last year Days 34.0 33.3 Total 32.7 32.5 inventory 1 32.0 32.5 31.7 31.8 31.7 Excluding incremental indent and 30.0 l
Slide 34: Shareholder Payouts
Shareholder Payouts Franking credits available for distribution (after the final dividend) = $1,124m $m 1,400 Dividend 1,280 Buy Back 1,200 1,122 1,000 941 894 800 693 633 534 604 600 538 141 349 400 346 200 407 463 284 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 Profit growth, coupled with balan
Slide 35: Capital Management
Capital Management • Woolworths currently sets its capital structure with the objectives of enhancing shareholder value through optimising its weighted average cost of capital whilst retaining flexibility to pursue growth and capital management opportunities • Our balance sheet, debt profile and str
Slide 36: Return on funds employed
1 Return on funds employed Percentage 45.0% 42.6% 31.4% 31.9% 2 30.0% 28.6% 27.1% 15.0% 0.0% 2005 2006 2007 2008 2009 1. Based on average of opening and closing funds employed 2. Reflects impact of significant acquisitions during the year with Foodland and Taverner contributing profits for only part
Slide 37: Return On Equity
1 Return On Equity Percentage 60.0% 50.9% 40.0% 2 33.8% 27.8% 28.9% 28.7% 20.0% 0.0% 2005 2006 2007 2008 2009 1. Based on average of opening and closing Shareholders Funds 2. Average ROE down due to the DRP underwriting in 2006 and options being exercised 37
Slide 38: Strategy and Growth
CALLIN] SHLIOMIOOM, Strategy and Growth
Slide 39: Strategy
Strategy Development Logistics 24.5% 24.10% Reorganisation / line items 18.75% 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 39
Slide 40: Strategy and growth
Strategy and growth Consistent and clear strategies that leverage our core strengths building a sustainable business and enhancing shareholder value Woolworths targets the following key areas of performance measurement in the long term, namely • Sales (excluding Petrol) to grow in the upper single d
Slide 41: Key growth initiatives
Key growth initiatives Continuing to Continuing to re-invigorate our offer drive our core through investment business focusing in price, range, on our customers merchandise and quality Leveraging our Expansion of Expansion of supply chain Global Sourcing private label capabilities activities Develop
Slide 42: Key growth initiatives
Key growth initiatives • We have completed a substantial portion of the end-to- end supply chain program in Australian Supermarkets • The financial benefits of this world class supply chain Leveraging our will continue over future years supply chain • The intellectual property is being leveraged acr
Slide 43: Key growth initiatives
Key growth initiatives • We continue to expand our global sourcing activities. As we increase our capabilities in this area we continue to secure cost price savings and improvements in both Expansion of quality and range Global Sourcing • Focus on improving international logistics activities • We ha
Slide 44: Key growth initiatives
Key growth initiatives • We continue to invest in our financial services capabilities • Financial switch provides very high reliability for processing of financial transactions (at a lower cost) Financial • Credit card launched – winner of industry awards Services • In-Store Financing product launch
Slide 45: Key growth initiatives
Key growth initiatives • Woolworths is focussed on our core businesses in Australia and New Zealand and continues to reinvest in Measured and each of the businesses. Woolworths will continue to disciplined assess both Domestic and International opportunities as approach to they arise and has a disci
Slide 46: Key growth initiatives
Key growth initiatives We have defined plans for space growth, with minimal cannibalisation expected • Adding 15-25 new supermarkets each year in Australia and expanding existing stores (greater than 3% space rollout pa) Defined • Adding 3-5 new supermarkets each year in New Zealand plans for • Targ
Slide 47: Sales and Earnings Guidance FY10
Sales and Earnings Guidance FY10 Australia has faired well to date in the Global Financial Crisis, assisted by significant Government spending during the previous 12 months. This spending will not be replicated to the same degree in FY10. Discretionary spending will continue to be influenced by macr
Slide 48: Highlights – Full Year 2009
Highlights – Full Year 2009 Successful year with solid results across our business Growth1 Growth FY09 52 v 52 52 v 53 Sales - Group $49.6b Ç 7.5% Ç 5.4% - ex Petrol $44.1b Ç 8.5% Ç 6.6% EBIT $2,815.5m Ç 13.4% Ç 11.3% NPAT $1,835.7m Ç 14.9% Ç 12.8% EPS 150.7¢ Ç 13.8% Ç 11.7% ROFE 31.9% Ç 1.1%pts Ç 0
Slide 49: Appendices
CALLIN] SHLIOMIOOM, Appendices
Slide 50: Sales of $49.6b – up 7.5% - excluding Petrol – up 8.5%
Sales of $49.6b – up 7.5%1 - excluding Petrol – up 8.5%1 Full Year Statutory Normalised Comp $m FY08 FY09 Increase Increase Sales Australian Food and Liquor 30,501 32,810 7.6% 9.6% 7.4% New Zealand Supermarkets (NZD) 4,859 4,957 2.0% 3.9% 3.6% New Zealand Supermarkets 4,170 4,034 (3.3)% (1.5)% Petro
Slide 51: EBIT – up 11.3% growing faster than sales
EBIT – up 11.3% growing faster than sales $m FY081 FY09 Change Australian Food and Liquor 1,913.7 2,202.6 15.1% New Zealand Supermarkets (NZD) 189.6 194.9 2.8% New Zealand Supermarkets (AUD) 169.2 153.9 (9.0)% Petrol 81.9 87.5 6.8% Supermarkets Division 2,164.8 2,444.0 12.9% BIG W 161.2 200.2 24.2%
Slide 52: Capital Expenditure – Full Year
Capital Expenditure – Full Year 2009 Previous 2007 2008 2009 2010 $m - 2009 Actual Fcst1 Diff $m – Full Year Actual Actual Actual Fcast New Stores 254 256 (2) New Stores 182 262 254 248 Refurbishments 652 716 (64) Refurbishments 306 643 652 767 Growth Capex 906 972 (66) Growth Capex 488 905 906 1,01
Slide 53: Capital Expenditure – Notes
Capital Expenditure – Notes • Reflects the continued rollout of new stores across all our brands New Stores • Reflects the acceleration of refurbishment activity across our brands following rigorous in-market testing of our new format initiatives including the 2010c format for Refurbishment Australi
Slide 54: Earnings per share – up 11.7%
Earnings per share – up 11.7% Cents 160.0 150.7 134.9 Ç24.0% 120.0 108.8 Ç19.7% 90.9 79.2 Ç14.8% 80.0 Ç13.0% 40.0 2005 2006 2007 2008 2009 Reflects strengthening of our balance sheet during a period of major acquisitions, integration and business change 54
Slide 55: Health Ratios
Health Ratios FY08 FY09 Fixed charges cover X 2.9 3.0 Days inventory (average)1 Days 31.7 33.3 Days creditors (to sales) Days 47.3 46.9 Return on Funds Employed (ROFE) % 31.4 31.9 Return on Total Equity % 28.1 28.0 Return on Shareholders Equity % 28.9 28.7 Net working capital $M (2,344.8) (2,436.0)
Slide 56: Fixed Charges Cover
Fixed Charges Cover 2005 2006 2007 2008 2009 EBIT 1,302.1 1,722.2 2,111.3 2,528.8 2,815.5 D&A 416.0 522.2 589.3 650.1 729.4 EBITDAR 2,618.3 3,314.5 3,906.9 4,494.8 4,954.6 Interest 157.8 246.3 230.5 214.0 239.6 Rent - base 819.6 972.4 1,121.1 1,223.3 1,313.5 Rent - turnover contingent 80.6 97.7 85.2