Woolworths Holdings Limited · JSE:WHL
Woolworths — H1 2016 Earnings Presentation
35 slides from Woolworths's earnings presentation, 2016
Slide 1: Woolworths Holdings Limited 2016 Interim Results
’16 WOOLWORTHS HOLDINGS LIMITED / 2016 INTER IM R ESULTS
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Slide 3: Presentation Outline: Review of the Period
PRESENTATION OUTLINE OVERVIEW OF THE PERIOD FINANCIAL REVIEW STRATEGIC FOCUS OUTLOOK REVIEW O F TH E PERI O D IAN MO I R
Slide 4: Building a Leading Southern Hemisphere Retailer
WOOLWORTHS HOLDINGS LIMITED INTERIM RESULTS 2016 ANALYST PRESENTATION BUILDING A LEADING SOUTHERN HEMISPHERE RETAILER With Woolworths, David Jones and Country Road Group we have a strong position across the southern hemisphere through • Common seasonality • Using scale and global sourcing opportunit
Slide 5: Group Performance
GROUP PERFORMANCE • Much improved performance in Clothing • Another above market performance from Food • Good performance from WFS continues • David Jones delivering well ahead of expectations • Country Road Group ahead of market despite underperformance of Country Road womenswear • Turnover and con
Slide 6: Woolworths Food Performance
WOOLWORTHS HOLDINGS LIMITED INTERIM RESULTS 2016 ANALYST PRESENTATION • Strong performance well ahead of the market, with total sales up 12.1% (up 11.7% excluding concession sales) and comparable sales up 5.8% • Growth ahead of the market continues • Gross profit margin increased from 25.2% to 25.4%
Slide 7: David Jones and Country Road Group Performance
• Total sales up 11.2%*, including concession sales, with comparable sales increasing 9.7%* – Growth well ahead of the market – Online sales up 48% to 3.5% of sales • Gross profit margin down from 42.1% to 41.6%** – Impacted by weaker A$ and lower intake margin – Very competitive market • Operating
Slide 8: Financial Review
WOOLWORTHS HOLDINGS LIMITED INTERIM RESULTS 2016 ANALYST PRESENTATION FINANCIAL REVIEW REEZA ISAACS STILL SOME COMPLEXITY IN THE NUMBERS • David Jones in current year for 12 months vs 11 months last year; July traditionally a clearance month • David Jones acquisition debt in place for 11 months last
Slide 9: Financial Overview
FINANCIAL OVERVIEW Group turnover and concession sales Up 17.1% to R35.5bn – excluding David Jones Up 12.3% Adjusted profit before tax Up 16.5% to R3.4bn HEPS – Diluted Up 30.8% to 251.7 cps HEPS – Adjusted diluted Up 3.9% to 250.8 cps Interim dividend Up 37.8% to 133.0 cps – scrip dividend option o
Slide 10: Group Income Statement
WOOLWORTHS HOLDINGS LIMITED INTERIM RESULTS 2016 ANALYST PRESENTATION GROUP INCOME STATEMENT WHL WOOLWORTHS HOLDINGS LIMITED FINANCIAL REVIEW REEZA ISAACS 14 GROUP INCOME STATEMENT Dec 2015 Dec 2014 % Rm Rm change Woolworths Clothing & GM 1 255 1 095 14.6 Woolworths Food 855 728 17.4 WFS (50% of PAT
Slide 11: Woolworths Income Statement and Expenses
INCOME STATEMENT WHL WOOLWORTHS HOLDINGS LIMITED FINANCIAL REVIEW REEZA ISAACS 16 WOOLWORTHS FOOD INCOME STATEMENT Dec 2015 Dec 2014 % Rm Rm change Total Comp Price Turnover and concession sales 12 376 11 041 12.1 stores move Food 12.1% 5.8% 5.7% Concession sales (274) (205) 33.7 Turnover – own buy
Slide 12: WFS Income Statement
WOOLWORTHS HOLDINGS LIMITED INTERIM RESULTS 2016 ANALYST PRESENTATION INCOME STATEMENT WHL WOOLWORTHS HOLDINGS LIMITED FINANCIAL REVIEW REEZA ISAACS 18 WFS INCOME STATEMENT Consolidated pro-forma Dec 2015 % to Dec 2014 % to % income statement Rm book Rm book change Increase due to portfolio Interest
Slide 13: David Jones Income Statement (Reported Basis)
INCOME STATEMENT WHL WOOLWORTHS HOLDINGS LIMITED FINANCIAL REVIEW REEZA ISAACS 20 DAVID JONES INCOME STATEMENT Basis of disclosure still to be confirmed REPORTED BASIS Reported basis 6 months 6 months* Dec 2015 Dec 2014 % A$m A$m change Turnover and concession sales 1 149 1 041 10.4 Concession sales
Slide 14: David Jones Income Statement (Full Vertical Basis)
WOOLWORTHS HOLDINGS LIMITED INTERIM RESULTS 2016 ANALYST PRESENTATION INCOME STATEMENT Basis of disclosure still to WHL WOOLWORTHS HOLDINGS LIMITED be REVIEW FINANCIAL confirmed REEZA ISAACS 21 DAVID JONES INCOME STATEMENT Do we need to explain the full vertical basis? FULL VERTICAL Full vertical BA
Slide 15: Group Treasury
GROUP TREASURY WHL WOOLWORTHS HOLDINGS LIMITED FINANCIAL REVIEW REEZA ISAACS 23 TREASURY Dec 2015 Dec 2014 Capital Rate** Rm Rm ZAR senior debt* R10bn 8.91% 443 365 AUD senior debt* $497m 4.42% 115 110 Short-term facilities 36 194 Equity bridge - 134 Net finance costs 594 803 Less: non-recurring fin
Slide 16: Group Balance Sheet
WOOLWORTHS HOLDINGS LIMITED INTERIM RESULTS 2016 ANALYST PRESENTATION GROUP BALANCE SHEET WHL WOOLWORTHS HOLDINGS LIMITED FINANCIAL REVIEW REEZA ISAACS 24 BALANCE SHEET Constant Dec 2015 Dec 2014 % currency Rm Rm change % change Assets Property, plant and equipment and Store development plans invest
Slide 17: Capital Expenditure, Depreciation, Earnings and Distribution
CAPITAL EXPENDITURE DEPRECIATION WHL WOOLWORTHS HOLDINGS LIMITED FINANCIAL REVIEW REEZA ISAACS 26 CAPITAL EXPENDITURE Captial expenditure DEPRECIATION Depreciation Capex (Rm) R1 305m (Dec 2014: R1 325m) Dec 2015 Dec 2014 % 221 Rm Rm change 491 Woolworths 410 366 12.0 David Jones 292 234 24.8 375 82
Slide 18: Guidance
WOOLWORTHS HOLDINGS LIMITED INTERIM RESULTS 2016 ANALYST PRESENTATION GUIDANCE
Slide 19: Group Guidance
GROUP • [Costs…] • Taxation - effective tax rate of 28% in SA and 30% in Australia • Capex – R2.0bn in South Africa, A$X.Xm in David Jones and A$X.Xm in Country Road Group • Clothing & GM price movement expected to be c8% for H2 • Food price movement expected to be c7% for H2 • Full year space growt
Slide 20: Strategic Focus
WOOLWORTHS HOLDINGS LIMITED INTERIM RESULTS 2016 ANALYST PRESENTATION • Above market sales growth expected to continue • Transformation to gain traction, but will impact expenses and capex in H2 • Expecting improved sales performance from Country Road womenswear • Continued focus on cost management
Slide 21: Strategy Update: Group Focus
STRATEGY UPDATE • Group Focus – Stronger, more profitable customer relationships – Towards total retail – Drive synergies and efficiencies – Embed sustainability throughout the business • Woolworths • David Jones • Country Road Group GROUP FOCUS 1 Stronger, more profitable customer relationships • C
Slide 22: Group Focus: Towards Total Retail
WOOLWORTHS HOLDINGS LIMITED INTERIM RESULTS 2016 ANALYST PRESENTATION GROUP FOCUS 2 Towards total retail • Increased focus on the customer and integrated, customer-focused technology to move from a channel to total retail experience • Building single view of customer, enabling customers to be recogn
Slide 23: Group Focus: Embed Sustainability
GROUP FOCUS 4 Embed sustainability throughout the business • Driving a consistent, group-wide Good Business Journey strategy with the objective of being the most sustainable retailer in the southern hemisphere • Be a leading fashion retailer in the southern hemisphere – Attract younger, more modern,
Slide 24: Woolworths Strategy
WOOLWORTHS HOLDINGS LIMITED INTERIM RESULTS 2016 ANALYST PRESENTATION • Become a big food business with a difference – Continue to complete the shop – Improve our value perception by investing in price – Maintain our food authority credentials • Continue to expand into Africa • Transform the WFS cus
Slide 25: David Jones and Country Road Group Strategy
• Enhance the food offer and in-store experience – Stabilise the current business by reviewing range, shopkeeping and hygiene standards, and visual presentation and service – Build for scale by driving simplification, leverage group skill and David Jones real estate – Gear to deliver by structuring
Slide 26: Outlook
WOOLWORTHS HOLDINGS LIMITED INTERIM RESULTS 2016 ANALYST PRESENTATION • Further refinement of the customer experience • Optimise channel mix by reviewing our store network and optimising the online fulfilment model • Drive efficiencies from the transition to the new Melbourne-based omni-channel fulf
Slide 27: Outlook and Medium-term Targets
OUTLOOK • South African economy likely to become more constrained WHL WOOLWORTHS HOLDINGS LIMITED OUTLOOK IAN MOIR 39 • Australian economy and retail environment to remain tough in the short term OUTLOOK •! Both economies are commodity-based and therefore reliant on China ! South African economy lik
Slide 28: Additional Information: Trading Space
WOOLWORTHS HOLDINGS LIMITED INTERIM RESULTS 2016 ANALYST PRESENTATION INFO ADDITIONAL TRADING SPACE WHL WOOLWORTHS HOLDINGS LIMITED ADDITIONAL INFORMATION 42 TRADING SPACE Projected Projected Projected Dec 2015 Dec 2014 % Jun 2016 % Jun 2017 % Jun 2018 % 000m2 000m2 change 000m2 change* 000m2 change
Slide 29: Additional Information: Store Locations
STORE LOCATIONS WHL WOOLWORTHS HOLDINGS LIMITED ADDITIONAL INFORMATION 43 STORE LOCATIONS Projected Projected Projected Dec 2015 Dec 2014 Growth Jun 2016 Growth* Jun 2017 Growth Jun 2018 Growth Woolworths Clothing & GM 282 267 15 285 6 291 6 302 11 South Africa 217 205 12 219 5 221 2 229 8 Rest of A
Slide 30: David Jones Income Statement in Rands
WOOLWORTHS HOLDINGS LIMITED INTERIM RESULTS 2016 ANALYST PRESENTATION INCOME STATEMENT (IN RANDS) WHL WOOLWORTHS HOLDINGS LIMITED ADDITIONAL INFORMATION 45 Basis of disclosure still to DAVID JONES INCOME STATEMENT (IN RANDS) be confirmed Reported basis REPORTED BASIS Comparative 6 months 6 months De
Slide 31: Country Road Group Income Statement and Balance Sheet
WHL WOOLWORTHS HOLDINGS LIMITED INCOME STATEMENT (IN R ANDS) ADDITIONAL INFORMATION 47 COUNTRY ROAD GROUP INCOME STATEMENT (IN RANDS) Dec 2015 Dec 2014 % Rm Rm change Turnover 5 117 4 487 14.0 Cost of sales 1 991 1 698 17.3 Gross profit 3 126 2 789 12.1 Other revenue 17 14 21.4 Expenses 2 511 2 248
Slide 32: Interim Results Analyst Presentation
WOOLWORTHS HOLDINGS LIMITED INTERIM RESULTS 2015 ANALYST PRESENTATION
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Slide 34: www.woolworthsholdings.co.za
www.woolworthsholdings.co.za
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