Slide 1: Company Results FY Ended June 2012
Company Results FY Ended 24 June 2012 Grant O'Brien Managing Director and Chief Executive Officer Tom Pockett Finance Director
Slide 2: Agenda
Agenda Highlights For Financial Year 2012 Group Strategic Priorities Progress Against Strategic Priorities Business Unit Results Financial Performance 1
Slide 3: Highlights for Financial Year 2012
Highlights for Financial Year 2012 • A solid outcome in a challenging year with our strategy gaining good momentum and continuing investment in growth initiatives • Sales from continuing operations of $55.1b, up 4.8%. Total Group sales up 4.7% • EBIT from continuing operations increased 5.6% before
Slide 4: Results — Financial Year 2012
Results — Financial Year 2012 Continuing Total Group Before Total Group After Operations CE Provision1 CE Provision FY12 FY12 FY12 Sales – Group $55.1b 4.8% $56.7b 4.7% $56.7b 4.7% EBITDA $4,235.8m 3.7% $4,272.6m 3.3% $3,852.6m 6.8% EBIT $3,352.1m 3.0% $3,376.7m 3.1% $2,956.7m 9.8%
Slide 5: Group Strategic Priorities
Group Strategic Priorities 4
Slide 6: Strategic priorities for future growth
Strategic priorities for future growth • Re-establish marketing supremacy around value and growth Extend Leadership In • Unlock sales growth for a tougher consumer and competitive environment 1 • Accelerate our leadership in Fresh Food Food And Liquor • Extend leadership in Liquor • Continue momentu
Slide 7: Progress Against Strategic Priorities
Progress Against Strategic Priorities 6
Slide 8: 1. Extend leadership in food and liquor
1. Extend leadership in food and liquor Growing Australian Fresh marketing Building for growth Market leader in Liquor Growing NZ market share campaign Space growth Strong performance in market share Excellent progress in ‘Australia’s Fresh improvements continuing Liquor, led by the award Momentum t
Slide 9: 2. Act on our portfolio to maximise shareholder value
2. Act on our portfolio to maximise shareholder value Evolving our BIG W offer Strong portfolio of hotels Exit from consumer electronics format Good progress in evolving BIG W’s offer Strong customer acceptance of our pub Restructure and divestment of Dick Smith to meet the changing needs of offer r
Slide 10: 3. Maintain our track record of building new growth
3. Maintain our track record of building new growth Innovation Online development Multi-option delivering New category expansion Domestic growth Multi-option key focus of Offers are well exceptional sales growth 15 Masters stores Bolt-on acquisitions the Group – 2.3m established for all our 95% incr
Slide 11: 4. Put in place the enablers for a new era of growth
4. Put in place the enablers for a new era of growth Logistics Quantum initiatives Unlocking customer data The best people Commenced operations in Cost savings leveraging group scale Leverage deep insight from Continued focus on DCs in New Zealand, and incorporating global best Australia and NZ’s la
Slide 12: Business Unit Results
Business Unit Results WOOLWORTHS LIMITED
Slide 13: Supermarkets
Supermarkets Tjeerd Jegen Managing Director Australian Supermarkets & Petrol
Slide 14: Australian Food, Liquor & Petrol
Australian Food, Liquor & Petrol FY11 FY12 Change • Sales up 4.9%, EBIT up 5.3% Sales – Food & Liquor ($m) 36,176 37,549 3.8% • Comparable Food & Liquor sales – Petrol ($m) 6,025 6,714 11.4% up 1.1% with improving momentum in 4th quarter • Solid growth in customer transactions, items sold – Total ($
Slide 15: Growth in supermarkets — our vision
Growth in supermarkets — our vision 14
Slide 16: Enabling employees to better serve customers
Enabling employees to better serve customers Retail team blending the best local and international talent Strong investment in staff training • Customer service training for over 48,000 team members • Specialist skills training for over 15,000 team members Enhancing Store Manager capabilities • iPad
Slide 17: First choice for fresh food
First choice for fresh food Australia's Fresh Food people — Brand campaign has been well received by customers 16
Slide 18: First choice for fresh food
First choice for fresh food Renewed focus on quality and freshness • Emphasised through the ‘Fresh or Free Guarantee’ which is delivering sales momentum and market share growth in Fresh food departments • Additional 39 stores with a bakery with 610 stores baking hot bread in-store every day Winning
Slide 19: Unbeatable value
Unbeatable value Good progress on our value contract delivering meaningful savings to our customers • Pricing – We have held grocery prices at levels similar to last year. When we combine this initiative with customer focused promotions and take into account volume shifts, we delivered customers wit
Slide 20: Customer led – the power of insights
Customer led – the power of insights Improving customer choice • Our ‘Category Lab’ continues to place the customer at the centre of our category management practices • Improving customer choice, freeing up floor space for additional ranges and improving profitability • We completed category deep di
Slide 21: Exciting new offers
Exciting new offers Macro — customer led growth in 'Food that is good for you' • Customers continue to demonstrate their desire to eat healthier with our Macro Wholefoods Market range - sales growth over 40% in FY12 • 92% of products Australian sourced Select continuing to grow • Woolworths Select p
Slide 22: Market leading multi-option innovation
Market leading multi-option innovation — enhancing seamless shopping experience Mobile • Woolworths Smartphone app recently upgraded to enable customers to shop online from their mobile devices • Over 1.8m downloads to date • Awarded ORIA's ‘Best Multi-Channel Retailer’ and ‘Best Online Retail Marke
Slide 23: Petrol
Petrol A strong result • Sales were $6.7b, up 11.4%. Merchandise (non-fuel) sales up 8.0% • Comparable sales increased by 8.8% reflecting higher fuel prices • Volumes increased 1.7% for the year • Comparable volumes decreased by 0.7% reflecting a flat market due to higher fuel sell prices, tight fam
Slide 24: Woolworths Liquor Group
Woolworths Liquor Group Brad Banducci Director Woolworths Liquor Group
Slide 25: Woolworths Liquor Group
Woolworths Liquor Group Continued momentum with Group Liquor sales of $6.6b, up 11.9% (FY11: $5.9b) • Dan Murphy’s was the engine of this growth with strong sales growth in FY12 • Our Convenience liquor business (BWS and Woolworths Liquor) also trended well complementing the growth of big box liquor
Slide 26: Woolworths Liquor Group
Woolworths Liquor Group Sustained leadership in multi-option retailing • Cellarmasters integration now complete, performing well Innovative Business Model • Dan Murphy’s online had a very strong first full year as a transactional website and is the most visited liquor website in Australia Connoisseu
Slide 27: Hotels
Hotels FY11 FY12 Change • Sales increased 4.4%, result reflects the strong sales across both food and bar offerings with Sales ($m) 1,153 1,204 4.4% gaming comparable sales up 0.7% Gross margin (%) 81.53 81.26 (27) bps • There continues to be a change in sales mix CODB (%) 65.60 65.01 (59) bps towar
Slide 28: NZ Supermarkets
NZ Supermarkets Dave Chambers Managing Director PEL
Slide 29: New Zealand Supermarkets
New Zealand Supermarkets NZ$ FY11 FY12 Change • Sales up 3.0%, Trading EBIT up 15.9% Sales ($m) 5,362 5,522 3.0% • Growth in market share, customer numbers, basket size and items sold Gross margin (%) 22.64 23.27 63 bps • Food inflation 1.1% (FY11: 1.4%) CODB (%)2 17.93 17.97 4 bps • Gross margin im
Slide 30: Countdown — brand growing in customer preference
Countdown — brand growing in customer preference Single brand now trading as Countdown • Largest supermarket brand in New Zealand • Seen as the popular supermarket choice offering balance of value, range and quality • 2nd year running voted Reader's Digest's most trusted supermarket brand Grow netwo
Slide 31: Countdown — brand growing in customer preference
Countdown — brand growing in customer preference Multi-option innovation • Strong online sales growth with positive customer response • Countdown Smartphone app launched in FY12 has proved very popular with over 140,000 downloads • Leveraging Onecard loyalty program insights and other digital medium
Slide 32: BIG W
BIG W Julie Coates Director BIG W
Slide 33: BIG W
BIG W FY11 FY12 Change • Sales and EBIT improved slightly in a very challenging retail environment. 2nd half EBIT Sales ($m) 4,158 4,180 0.5% increased 13.1% on prior year Gross margin (%) 30.63 31.72 109 bps • Comparable sales down 1.5% (FY11 down CODB (%) 26.37 27.45 108 bps 2.5%), however compara
Slide 34: BIG W — building momentum
BIG W — building momentum Win on value everyday • New brand campaign launched in July 2012 – ‘Everyone's a Winner with Australia’s lowest prices’ and ‘Cha-Ching!’ • Focus on Price, Brands, Quality and Range provides a unique opportunity for differentiation • BIG W continues to reinforce our price le
Slide 35: BIG W — building momentum
BIG W — building momentum Continue to grow store footprint • Delivered 7 new stores during the year, including new format store adjacent to Canberra Airport • Strong property pipeline that supports growth to 200 stores Lead in multi-option • Launch of fully transactional iPhone app to coincide with
Slide 36: Home Improvement
“Home Improvement
Slide 37: Home Improvement
Home Improvement • First Masters Home Improvement store commenced trade in September 2011, 15 stores opened during FY12 including stores in WA, VIC, NSW, QLD and ACT. Recently opened a store in SA. Today have 20 stores trading in all mainland States and the ACT • Feedback has been very positive – cu
Slide 38: ae | adie =~
ae | adie =~ » _ e —, ten 4, . - ws | dick smith
Slide 39: Discontinued operations consumer electronics — Australia and NZ
Discontinued operations consumer electronics — Australia and NZ • Following a strategic review, Woolworths A$ announced on 31 January 2012 that the Dick Smith FY11 FY12 Change business would be restructured and divested as a Sales ($m) 1,534 1,570 2.3% going concern in a staged and managed process •
Slide 40: Financial Performance
Financial Performance WOOLWORTHS LIMITED
Slide 41: Balance sheet
Balance sheet FY11 $ million FY11 Proforma1 FY12 CONTINUING OPERATIONS • Inventory increased 8.4% primarily driven by the Inventory 3,736.5 3,412.0 3,698.3 building of Masters' inventory. Excluding Masters, Trade Payables (4,132.0) (4,020.0) (4,013.4) inventory grew 3.3% Net Investment in Inventory
Slide 42: Average inventory days for continuing operations
Average inventory days for continuing operations Inventory has primarily increased due to building Masters inventory and increased indent. When these are excluded, inventory days were flat Number of Days Comments • Closing inventory days FY08 29.6 were up 1.2 days to 33.1 days impacted by the invent
Slide 43: Cash flow
Cash flow $ million FY11 FY12 Change EBITDA – Total Group (excluding the Consumer Electronics 4,134.3 4,272.6 3.3% provision) Increase in inventory primarily relates Net (increase) in inventory (234.7) (297.3) to Masters and incremental indent Net change in other working capital and non cash 242.6 2
Slide 44: Shareholder payouts
Shareholder payouts Estimated franking credits available for distribution (after final dividend) = $1,486.2m $ million Comments Dividend • Profit growth, coupled Buy-back 2,188 with good balance sheet 704 management, will have delivered $11.9b payout to shareholders since July 1,749 2001 325 1,549 1
Slide 45: Capital management
Capital management Capital structure objective to enhance long term shareholder value through optimising weighted average cost of capital whilst retaining flexibility to pursue growth and capital management opportunities • Highly successful debt refinancing program – In October 2011, executed a A$1.
Slide 46: Return on funds employed from continuing operations
Return on funds employed1 from continuing operations Percentage Comments • Decrease reflects FY08 31 33 – Investment in the start up phase of the Masters business – Ongoing property FY09 32 34 development undertaken to facilitate ongoing store roll outs FY10 31 33 • Excluding the impact of Masters a
Slide 47: Outlook
Outlook • Woolworths has a clear strategy which is building momentum with benefits arising from continuing investment underpinning long term sustainable profit growth • Woolworths is proving to be a resilient business and has the ability to adapt to challenging economic circumstances • We expect the
Slide 48: Company Results FY Ended June 2012
Company Results FY Ended 24 June 2012 Grant O'Brien Managing Director and Chief Executive Officer Tom Pockett Finance Director
Slide 49: Appendices
Appendices WOOLWORTHS LIMITED
Slide 50: CODB / sales from continuing operations
CODB / sales from continuing operations Increased by 33 bps but has been well controlled in dollar terms in a challenging trading period with significant sell price deflation limiting the ability to fractionalise costs Percentage Comments • Reflects FY08 19.84% – Investment in Masters – Additional c
Slide 51: 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 Percentage Comments • Increase of 23 bps FY08 23.81% 25.23% reflecting the benefits of global direct sourcing, increased effectiveness FY09 24.28% 25.63% of promotional
Slide 52: Dividends per share
Dividends per share Increase in dividends per share of 3.3% Cents FY08 24.3% 92 FY09 13.0% 104 FY10 10.6% 115 FY11 6.1% 122 FY12 3.3% 126 51
Slide 53: Full year total group sales of $56.7b — up 4.7%
Full year total group sales of $56.7b — up 4.7% — up 3.9 % excluding petrol Full Year $m 2011 2012 Increase Comp Sales Australian Food and Liquor 36,176 37,549 3.8% 1.1% New Zealand Supermarkets (AUD) 4,111 4,302 4.6% 3.3%1 Petrol (dollars) 6,025 6,714 11.4% 8.8% Petrol (litres) 4,920 5,003 1.7% (0.
Slide 54: Group EBIT from continuing operations — up 3.0%
Group EBIT from continuing operations — up 3.0% $m FY11 FY12 Change Australian Food and Liquor 2,678.9 2,817.2 5.2% New Zealand Supermarkets (NZD) 244.1 287.4 17.7% New Zealand Supermarkets (AUD) 191.9 224.5 17.0% Petrol 117.6 127.1 8.1% Supermarkets Division 2,988.4 3,168.8 6.0% BIG W 177.0 178.4 0
Slide 55: Earnings Per Share — excluding Consumer Electronics provision up 3.1%
Earnings Per Share — excluding Consumer Electronics provision up 3.1% Cents Comments • EPS for the Group was FY08 148.67. Excluding the 24.0% 134.89 consumer electronics provision, EPS was up 3.1% on the prior year to 180.06 FY09 11.7% 150.71 FY10 8.8% 164.01 FY11 6.5% 174.64 FY12 14.9% 148.67 3.1%
Slide 56: Health ratios
Health ratios FY11 FY12 Fixed Charges Cover – Total Group excluding X 3.0 2.9 Consumer Electronics provision Days inventory (average) – Continuing Operations1 Days 31.4 33.8 Days creditors (to sales) – Continuing Operations2 Days 45.8 46.0 Return on Funds Employed (ROFE) – Total Group % 29.3 27.0 ex
Slide 57: Fixed charges cover – Total Group excluding Consumer Electronics provision
Fixed charges cover – Total Group excluding Consumer Electronics provision 2008 2009 2010 2011 2012 EBIT 2,528.8 2,815.5 3,082.1 3,276.4 3,376.7 D&A 650.1 729.4 797.7 857.9 895.9 EBITDAR 4,494.8 4,954.6 5,357.7 5,675.5 5,962.2 Interest 214.0 239.6 257.4 332.6 381.2 Rent – base 1,223.3 1,313.5 1,390.
Slide 58: Capital expenditure — Total Group
Capital expenditure — Total Group 2012 Previous 2010 2011 2012 2013 $m – 2012 Actual Fcst Var $m – Full Year Actual Actual Actual Fcst New Stores 346 393 (47) New Stores 225 288 346 301 Refurbishments 268 297 (29) Refurbishments 622 492 268 512 Growth Capex 614 690 (76) Growth Capex 847 780 614 813
Slide 59: Capital expenditure — notes
Capital expenditure — notes • Reflects the continued rollout of new stores across our brands • Capital spend increased in FY12 compared to FY11 as a result of more new stores being completed New Stores (FY12 195, FY11 178) including more Australian Supermarkets (FY12 38, FY11 21) • Our FY13 forecast