wow fy14 half year profit analyst presentation

8/12/2019 WOW FY14 Half Year Profit Analyst Presentation

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COMPANY

RESULTSHALF YEAR ENDED


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TjeerdJegen

PRESENTATION OUTLINE

GrantO'Brien

BradBanducci

DaveChambers

KarenBozic

MattTyson

DavidMarr

GrantO'Brien

Presenter

AustralianSupermarketsandPetrol

GroupPerformanceandStrategicPriorities

WoolworthsLiquorGroup

NewZealandSupermarkets

GeneralMerchandise

HomeImprovement

GroupFinancialPerformance

Outlook

Item


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Results half year 2014

TotalGroup ContinuingOperations

BeforeSignificantItems1

Sales $31.8b 3.8% $31.8b 6.0%

EBIT $2,048.0m 11.3% $2,048.0m 5.9%

NPAT $1,321.7m 14.5% $1,321.7m 6.0%

EPS 106.1 13.4% 106.1 4.9%

DPS 65 4.8%

ROFE 14.9% 87bps2

1.TherewerenosignificantitemsinHY14.SignificantitemsinHY13included

OneofflossontheSCAPropertyGrouptransactionof$32.8m(beforetax)and$28.5m(aftertax)

NetlossondisposalofConsumerElectronicsbusinessesof$63.7m(beforetax)and$65.7m(aftertax)

2.ExcludingtheimpactofdifferencesinthetimingofcreditorpaymentsrelativetothereportingdatesandthecontinuinginvestmentinourHomeImprovementbusiness,ROFEincreased33bps

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$million HY13 HY14 Change

AustralianFoodandLiquor 1,583.9 1,692.1 6.8%

Petrol 71.0 74.0 4.2%

AustralianFood,LiquorandPetrol 1,654.9 1,766.1 6.7%

NewZealandSupermarkets(NZD) 162.3 164.4 1.3%NewZealandSupermarkets 124.7 136.8 9.7%

GeneralMerchandise 129.5 120.5 (6.9)%

Hotels 140.8 163.9 16.4%

Masters (69.1) (71.9) 4.1%

HomeTimberandHardware 10.6 7.5 (29.2)%

HomeImprovement (58.5) (64.4) 10.1%

CentralOverheads (56.7) (74.9) 32.1%

GroupEBIT ContinuingOperations 1,934.7 2,048.0 5.9%

ConsumerElectronics Australia,NewZealandandIndia 2.5 n.c2

GroupEBIT DiscontinuedOperations 2.5 n.c2

TotalGroupEBIT(beforesignificantitems) 1,937.2 2,048.0 5.7%

SignificantItems(beforetax)

OneofflossonSCAPropertyGrouptransaction (32.8) n.c

NetlossondisposalofConsumerElectronicsbusinesses (63.7)1 n.c

TotalGroupEBIT(aftersignificantitems) 1,840.7 2,048.0 11.3%

Group EBIT from continuing operations before

significant items up 5.9%

1.AfterreflectingadditionalsaleproceedsinthesecondhalfofFY13,thenetgainondisposaloftheConsumerElectronicsbusinessesinFY13was$9.9m(beforetax)

2.NotcomparablegiventhesaleofthesebusinessesduringHY13

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Extend leadership in

Food and Liquor

Act on our portfolio to

maximise shareholder value

Maintain our track record ofbuilding new growth businesses

Put in place the enablers

for a new era of growth

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Extend Leadership in Food and Liquor

NewrangeoffreshfoodinitiativestoemphasiseourFreshleadership Embedourpriceleadershipthroughthe'MoreSavingsEveryDayvehicle Maximiseouruseofdatatoattractandrewardcustomers ExtendourleadershipinmultioptionFoodandLiquorthroughinnovationandstandoutexecution ContinuetoreducepricesinNewZealandforthebenefitofourcustomers

Improvingcomparablesales

performance

and

EBITgrowthIncreasedmarket

shareunderpinnedbystrongvolume,customernumbersandspacegrowth

Weattracted

3.9%

morecustomersthantheprioryear,servingonaverage21mcustomersperweek

Momentum inFood and Liquor

Improvedcommunication

of

our

valuecredentialsMoreSavingsEvery

Daydeliveredsavingstocustomersofover$400m

Reinforcingprice

leadershipamong

full

rangesupermarketsAveragepricedeflation

of4.1%forthehalfyear

Unbeatable Value

Freshmarketsharegrowing

faster

than

Grocery NewJamieOliver

partnershipfocusingonaffordablefreshfood

Stronggrowthin

organicand

free

range

meatandpoultry

FIRST CHOICEFOR FRESH FOOD

Increasedaccesstoour

market

leading

bricks&mortarofferDeliveredbest

practiceportfolioofsegmentedonlineoffers

Pinnacledelivering

highquality,

exclusive

productranges

LeadingLiquor Destination,In-store and Online

Earlystagesoftransforming

our

Countdownbusiness Q2resultthestrongest

comparablesalesgrowthrecordedin18months

Underpinnedby

successfulpromotions,

strongFreshgrowth,newoffersandOnline

IMPROVINGNew Zealand

Comparable SalesGrowth

Well Underway

More To Do

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Act on our portfolio to maximise shareholder value

Industryleadinghotelandgaming

charter

reinforcing

our

commitment

toresponsibleserviceofgamingandliquor

Commencementofgamingmachinevoluntaryprecommitmentfunctionalityrollout

Maximisingperformanceofthe

hotelsacquired

through

the

Laundy

transaction

Australia's Best andMost Responsible Hotels

Commencedthetransformationof

our

customer

offer Reprioritisingcategoriesofgreatest

importancetocustomers,impactingsalesandprofitintheshorttermbutdeliveringprofitablegrowthoverthemediumtolongterm

Enhancingreplenishmentsystems

andsupply

chain

capabilities

AmbitiontobecomeAustralasia'sleadingmultioptiondiscretionaryretailer

BIG WBUSINESS TRANSFORMATION

ENHANCING OUR PETROL OFFER

Expandingavailabilityofdiesel,

premium

fuels

and

fast

flow

pumps Maximisingourmerchandiseoffer

(nonfuel)throughnewandexpandedranges

GeneralMerchandise RolloutnextwaveofspaceandlayoutreconfigurationacrosstheBIGWstorenetwork Developandimplementnewsupplychainandreplenishmentsystemstotransformourspeedandefficiencytomarket LeverageEziBuytodrivemultioptionambitionsHotels

Furtherdevelopment

of

our

bar,

food

and

entertainment

offer

Implementvoluntaryprecommitmentfunctionalitypriortolegislativerequirements FurthertargetedhotelacquisitionstoprovideapipelineforDanMurphysandBWSstoreopenings

More To Do

Well Underway

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Maintain our track record of building newgrowth businesses

38Mastersstorestradingattheendofthehalf

Ontrack

to

have

49

stores

trading

by

year

end

RefreshedHomeTimberandHardwarecompanystoresdeliveringpleasingsalesgrowth

HomeTimberandHardwarewasrecentlyawardedHardwareStoreoftheYearattheRoyMorganCustomerSatisfactionAwards

MattTysonappointedasManagingDirector,HomeImprovement

bringing

extensive

international

and

businessdevelopmentexperience

Australia's FASTEST GROWINGHome Improvement offer

Onlinesalesexceeded$1bforthe2013calendaryear,

aheadof

our

FY14

target

MarketleadingonlinefoodoffersinAustraliaandNewZealand

Onlinesalesfromcontinuingoperationsincreasedby40%duringthehalf

Liquoristhemostdevelopedexampleofourmultioptionambitions

Transactionalmobile

sites

in

place

for

all

of

our

brands

Growing our Leadership asAustralasia's Largest Domestic Online Retailer

Platformandoperationalenhancementstodriveanincreaseinonlinetraffic CompletingrapidrolloutofClick&Collectinalldivisions Continueourconsiderationofdomesticandinternationalgrowthopportunities DriveLearnandImproveapproachinMastersstores ContinuerecruitmentofimportantHomeTimberandHardwarecustomers

More To Do

Well Underway

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Detailedplanninghas

commencedfor

our

next

generationsupplychain

capability

Newsystemsandprocesses

maximisingonshelf

availabilitywhilstoptimising

stocklevels

BUILDING ON OURWORLD CLASS SUPPLY CHAIN

Deliveringonourcostout

ambitionsacross

our

businesses

OurpermanentOperations

Developmentteamcontinue

todrivebenefitsin

Supermarkets,whichare

thenleveragedacrossthe

restof

the

Group

DRIVINGEFFICIENCIES IN STORES

EverydayRewardsloyalty

membership

up

to

7.5m

and

Onecardmembersupto

1.8m

WeareleveragingQuantium

tobetterunderstandour

customersneedsin

Pricingandpromotion

Ranging Storelayout

Weareworkingcloselywithsupplierstodevelopjoint

longtermcategoryplansusinginsights

CUSTOMER INSIGHTSTRANSFORMING OUR BUSINESS

Continuedfocusonblending

the

best

local

and

internationaltalentatalllevels

oftheorganisation

Wehavemadeanumberof

seniorappointmentsacross

thebusinessincluding

MattTyson,MDHome

Improvement CliveWhincup,CIO JamesAylen,GMHome

TimberandHardware

MartynRoberts,GMPetrol

ASSEMBLING AWORLD CLASS RETAIL TEAM

Put in place the enablers for a new era of growth

Movetoanewphaseofbusinesstransformationthroughourendtoendsupplychainandreplenishmentprojects

Continuetoleveragecustomerdatatodrivesalesgrowthandloyaltyacrossthebusiness

Productivityimprovementprogramstocontinuerelentlessfocusoncosts

Continuetomakenewappointmentstocomplementourteam,sourcedinternally,domesticallyandinternationallyasappropriate

More To Do

Well Underway

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AUSTRALIAN SupermarketsTjeerd JegenManaging Director Australian Supermarkets & Petrol


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HY13 HY14 Change

Sales Food&Liquor($m) 20,488 21,477 4.8%

Petrol($m) 3,393 3,665 8.0%

Total($m) 23,881 25,142 5.3%

EBIT Food&Liquor($m) 1,583.9 1,692.1 6.8%

Petrol($m) 71.0 74.0 4.2%

Total($m) 1,654.9 1,766.1 6.7%

FundsEmployed($m) 4,122.0 4,312.8 4.6%

Grossmargin

(%) 25.14 25.17 3

bps

CODB(%) 18.21 18.15 (6)bps

EBITtosales(%) 6.93 7.02 9bps

ROFE(%) 40.65 40.89 24bps

Australian Food, Liquor & Petrol

Food&LiquorHY14comparablesalesgrowthwas3.0%withincreasedmomentuminQ2deliveringcomparablesalesgrowthof3.4%

SuccessfulChristmastradingperioddrivenbyour

leading

positions

in

price

and

range

Increasesinmarketshare,customernumbers,basketsize,itemssoldandsalespersquaremetre

Continuedtodeliverexceptionalvalue withaveragepricedeflationof4.1%forthehalfyear(includingtheeffectsofpromotionsandvolumes)

Grossmargin increase

reflects

improvements

in

buying,moreeffectivepromotionsandgrowthinourexclusivebrands,includingLiquor.Muchofthebenefitfromtheseinitiativeswasreinvestedintoprice

Food&

Liquor

(excluding

Petrol)

CODB

%

was

flat

agoodresultgiventhelargenumberofnewstoresyettoreachmaturetradinglevelsandongoinginvestmentinourmultioptionbusiness

23AustralianSupermarkets(net)openedduring

the

half

year,

bringing

the

total

to

920,

employing

anadditional2,000people.13refurbishmentscompleted

Increasing momentum in sales and profit

Trading Performance

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Progress against objectives

1.Firstchoiceforfreshfood

ContinuedtoimprovethequalityofourFreshoffer,withenhancementstooursupplychain

Inlinewithourstrategytobefirstchoiceforfreshfood,ourFreshmarketshareisgrowingfasterthanGrocery

JamieOliverpartnershipfocusingon

affordablefresh

food

and

encouraging

a

healthierAustralia

Sushibarsandbakeriesrolloutcontinuedwithafurther40sushibarsand49bakeriesaddedtoourstorenetwork.Wenowhave

bakeriesin

86%

of

our

stores

Customerscontinuetoaskformoreorganicandfreerangemeatandpoultry,leadingtostronggrowthinthesecategories

Extending our Fresh food leadership

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Progress against objectivesReinforcing our price leadership

2.Unbeatablevalue

Improvedthecommunicationofour

value

credentials

through

'More

SavingsEveryDay'

Asourkeyvalueplatform,'MoreSavingsEveryDay'deliveredsavingsof$400m+tocustomersoverthehalf,

through3

clear

and

simple

ways

Reinforcedourpriceleadershipamongfullrangesupermarketswithdeflationinaveragepricesof4.1%forthehalf

Ourdrive

to

offer

affordable

fresh

food

continuedwithfurtherpricereductionsinmeat

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Progress against objectivesCustomer insights at the heart of our planning

3. Customerinsightstransformingourbusiness

Increasein

Everyday

Rewards

members

to7.5m(up11%onHY13)withstronggrowthincardscanrates

TogetherwithQuantium,weareworkingcloselywithsuppliersto

leverageour

Everyday

Rewards

data

to

deliverinsightsandbetterdecisionsacrosspricing,ranging,promotionsandstorelayout

Wearesendinganaverageof2.2memails

and

direct

mails

to

customers

eachweekwithtargetedSupermarketoffers

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Progress against objectivesComplementing our existing core offer across the store

4.Innovativenewoffers

Apermanent'Gold'rangenowlaunchedsettinganewhighstandardforownbrand

productsin

quality,

innovation

and

taste

Rolloutofnewinstoreoffersincluding

HealthyLunchbox(104stores)

FoodtoGosandwichesandsalads

(127

stores) Freshbaristacoffee(nowin11stores)

Bulkfoods(5stores)

Successfultrialof'FarmersOwn'milkproducedintheManningValley(NSW)willbe

extended

to

105

stores

AnnouncednewownbrandAustraliansourcingdealswithSPCArdmonaforSelectcanneddeciduousfruitandSimplotforSelectfrozenvegetables

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5.Multioptionofferingcustomersmoreflexibility

Thenumber

of

unique

visitors

to

our

online

sitehasmorethandoubledduringthehalf

Wedeliver3m+itemstocustomerseachweek,withhomedeliverynowavailabletomorethan95%ofAustralianhouseholds

ExpandedClick&Collectnetworkto188storesatHY14,including15drivethrus,nowofferingsamedaycollectionservice

Targetedandpersonalisedoffersimproved

customer

conversion

and

shopping

frequency

Growing our leadership position in online

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18/51

PetrolExpanded network and convenience offer

Salesincreasedby8.0%drivenbyhigheraveragefuelsellpricesandpleasinggrowthinmerchandisesales

Competitoractivityfocusedonincreased

fueldiscounts

which

impacted

our

fuel

volumes

EBITincreased4.2%to$74.0mthrough

Thecontinuingshifttowardspremiumunleadedanddieselfuels

Strongermerchandisesales

CODBasapercentageofsalesdecreasedontheprioryeardespitecostsassociatedwithnewpetrolcanopies

$3.7BSales

8.0%

Merchandise Sales

9.8

Trading Performance

$74.0EBIT

M 4.2%

0.6%FUEL Volumes

or

%

or

16


19/51


1.Providecustomerswithacompellingfueloffer

Continuedinvestmentinforecourtimprovements,providingcustomerswithbetteraccesstodiesel,premiumfuelsandfastflowpumps

Duringthe

half,

signage

at

32

sites

were

rebrandedand52canopiesandforecourtsrefreshed

2. Acceleratemerchandisesales

Newcategoriesandproductsareaddingincrementalsalesaspartofourstrongfocusonimprovingourconvenienceoffer

3.

Increaseour

network

profile

Opened14(net)sitesduringHY14

TotalCaltex/Woolworthsnetwork627,including496Woolworthsownedsites

Plan

to

open

a

further

5

sites

(net)

in

FY14

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20/51

Woolworths Liquor GroupBrad Banducci

Director of Liquor

Woolworths Liquor group sales


21/51

Woolworths Liquor group salesLeading liquor retailer in Australia

$billion

3.8

3.6

3.2

3.1

4.0HY14

HY13

HY12

HY11

HY10

Comments

Strongresultforthehalfyear

withgoodsalesgrowthacross

allthree

channels

Dan

Murphys(Destination),BWS

(Convenience)andTheWine

Quarter(Online)highlighting

therelevanceofeachofour

offerings

GrowthintheWinecategory

wasakeyhighlightforthe

halfyear

Note:includesALHGrouponpremiseliquorsales

19

Woolworths Liquor group


22/51

Woolworths Liquor group

Online/Click

&

Collect Bricks

&

Mortar

Connoisseur

Convenience

andValue

Bargain

Hunter

OffPremise OnPremise

A unique business model

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1.ContinuetoevolveDanMurphys

Australiaspremier

liquor

destination

continues

to

grow,

opening6storesinHY14,withtotalstoresnow181

Extendedourmultioptionleadershipthrough

LaunchofAustralia'sfavouriteliquorApp,withphotorecognitiontechnology

ExtradeliveryoptionsSameDay,NextDayandPickaDaydelivery

FirstmajorAustralianretailertolaunchClick&Collectnationwide,withsalesmorethandoublinginQ2

Introduceda

new

store

operating

model

with

more

customerfacingstaff

2.DeveloptheBWSbrandandconvenienceoffer

RebrandingofWoolworthsLiquortoBWSinFY13

createdAustralias

most

accessible

liquor

brand,

now

with1,200stores

ContinuedtostrengthenthebrandwithsponsorshipofTheAshesandSummerofCricketandthelaunchof'Today'sSpecial'brandmarketingcampaign

Continuedprogress

in

tailoring

our

ranges

around

shopperoccasions

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3.IncreaseownandexclusivebrandpenetrationthroughPinnacleLiquor

PinnacleLiquorcontinuestogrowasourownand

exclusiveproduct

and

brand

marketing

arm

Newandinnovativeproductslaunchedduringthehalfwithapleasingcustomerresponse

4.LeadershipinDigitalandDirectviaTheWineQuarter

Establishedadigitalanddirectbusinesscentreofexcellence,employingapproximately650people,leveragingCellarmastersdirectmarketingcapabilities

Langton'scontinuestodeliverstrongsalesgrowth,reinforcingitspositionasAustralia'sleadingultrafinewinebusiness

22

Hotels
http://www.alhgroup.com.au/index.html


25/51

HY 3 HY 4 ChangeSales ($m) 759 788 3.8%

EBIT($m) 140.8 163.9 16.4%

Grossmargin(%) 82.29 82.75 46bps

CODB(%) 63.74 61.95 (179)bps

EBITtosales(%) 18.55 20.80 225bps

Hotels

Tradingconditionsareachallengeatpresent,especiallyinBarsandGaming.OurFoodofferremainsafocusandweareseeingsolidresultsasweconcentrateon

providingvalue

meals

in

a

family

friendly

setting

GrossmarginincreasewasassistedbytheVictoriangamingregulatorychangeswhichcycledinAugust

CODBdecreaseattributabletostrategicinitiativestoimproveefficiencyinvenuesandthecyclingofbusinessacquisitioncostsintheprioryear

EBIT

increased

16.4%

on

the

previous

half

yearto$163.9m

PleasingresultsfromthehotelsacquiredaspartoftheLaundytransactionintheprioryear

A key enabler of our Liquor strategy

Trading Performance

23

http://www.alhgroup.com.au/index.htmlhttp://www.alhgroup.com.au/index.html


26/51


1.TobeAustraliasmostresponsibleoperatoroflocalpubs

Commencedthe

introduction

of

voluntary

pre

commitment

functionalityonallgamingmachinesaheadofanyplannedstatelegislation,allowingcustomerstomonitortheirplayandsettimeorspendlimits

Industryleadinghotelandgamingcharterunderpinningour

commitmentto

responsible

service

2.Growournetwork

Targetedacquisitionswillcontinue

1hotel

opened

during

HY14,

total

venues

327

with

4

additionalvenuescurrentlyplannedforFY14,whichwillsupportanadditional9BWSand4DanMurphys

3.

To

evolve

in

meeting

customer

needs Continuedinvestmentinfamilyfriendlyfoodoffers

Expandedthedepthofourbarrangestocaterformorepremiumproductsandselectivelyaddingbrandedfoodoperations

Improvementstoouronlinepresenceacrossthebusinessincluding

new

mobile

enabled

venue

websites

FederalHotel,MtGambier

SailandAnchor,Fremantle

CarlyleHotel,DerwentPark

24
http://www.alhgroup.com.au/index.html


27/51

NZ SupermarketsDave Chambers

Managing Director

New Zealand Supermarkets


28/51

1.SignificantitemsincludetheoneofflossassociatedwithSCAPropertyGrouptransactioninHY132.InNZD

New Zealand Supermarkets

HY14comparablesales0.7%2,withtheQ2resultthestrongestsalesgrowthseenin18months

Continuedgrowthinmarketshare,customernumbersanditemssoldreflectingtherelevanceofourofferandsuccessofpromotionalactivity

Grossmargindecreaseimpactedbyahigherlevelofpromotionalactivity,particularlyinLonglife

Continuedtoincreaseourcompetitivenessinthemarketandhaveloweredshelfpricesonarangeofproducts,includingthroughourPrice

Lockdownprogram

which

delivers

customers

longtermpricereductionsonarangeoftheirfavouritegroceries

CODBresultreflectsstrongcostmanagementacrossthebusinessthroughimprovedproductivityinDCsandsupportoffices

Excludingtheadditionalrentalexpense(netofdepreciation)followingthedivestmentoftheSCAPropertyGroupinFY13andbeforesignificantitems1

CODBdecreased22bps2

EBITincreased

6.0%2

EBITmarginwasup19bps2

Successful promotional activity and strong Fresh sales delivering results

NZD HY 3 HY 4 ChangeBeforeSignificantItems1

Sales

($m) 2,944 3,020 2.6%

EBIT($m) 162.3 164.4 1.3%

FundsEmployed($m) 3,056.0 3,137.7 2.7%

Grossmargin(%) 23.28 23.25 (3)bps

CODB(%) 17.77 17.81 4bps

EBITto

sales

(%) 5.51 5.44 (7)

bps

ROFE(%) 5.17 5.17 bps

Trading Performance

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1.Customervalueandinnovativeoffers

Customershave

responded

well

to

the

launch

of

Price

Lockdown,supportedbystronginstorecommunication

Producesalesgrowthoutperformedoverallgrowthwithourfocusedgrowerprogram,supportedbystronginstoreexecution,maximisingseasonalsalesopportunities

2.Leveragelocalsourcing

OurpreferenceinNewZealandistosourcelocallyasitisimportanttoourcustomersandsupportsthelocalcommunitiesinwhichweoperate

96%

of

sales

are

sourced

from

suppliers

that

are

owned

or

haveabaseinNewZealand,with70%ofownbrandsalesfromlocallysourcedproducts

Workingwith1,200NewZealandsuppliers,includinghundredsoflocalfarmersandgrowers

3.Multi

option

Salesfromcountdown.co.nz,NewZealandsleadingonlinefoodsite,delivereddoubledigitsalesgrowthforthehalfyear

Serving99%ofNewZealandthrough52fulfilmentstores

27



30/51


4.Supply

chain

EfficienciescontinuefromthereconfigurednationalandregionalDCoperationsstructure,withcostsasapercentageofsales(inNZD)decreasingby6bpsinHY14

Instore

product

availability

remained

strong

duringthehalf

5.GrowCountdownandfranchisenetwork

2Countdown

stores

opened,

with

the

networknow168stores

3additional(net)CountdownstoresduetoopeninFY14

Total

franchise

stores

now

56

with

3

additionalstorestoopeninFY14

Ourfranchiseesarecontinuingtoinvestintheirstoreswith29%ofthefranchisenetworknowtradinginthenewformats

(16%

in

prior

year)

28

GENERAL MERCHANDISE


31/51

GENERAL MERCHANDISEKAREN BOZIC

Acting Director of Big W

GENERAL MERCHANDISE


32/51

GENERAL MERCHANDISE

Salesgrowthwas0.2%forHY14,impactedbythetimingoftheToySaleandthebusinesstransformationasanticipated

Tradingconditionscontinuetobechallengingwith

strong

competition,

ongoing

price

deflation

(HY144.1%)andincreasedpromotionalactivity

Grossmarginimprovementreflectsbetterbuying,shiftsinsalesmixandtheacquisitionof

EziBuy.

This

was

achieved

despite

higher

levels

of

clearanceactivityincategoriesbeingrationalised

CODBincreasereflectsnewstoresyettoreachmaturity,theEziBuyacquisitionandlowersalesgrowth

Fundsemployed

increased

53.9%,

which

was

impactedbythetimingofcreditorpaymentsrelativetothereportingdatesandincludestheacquisitionofEziBuyaswellasthecontinuedrolloutandrefurbishmentofBIGWstores

Transformation delivering profitable growth in the future

HY 3 HY 4 ChangeSales($m) 2,447 2,452 0.2%

EBIT($m) 129.5 120.5 (6.9)%

FundsEmployed($m) 709.8 1,092.7 53.9%

Grossmargin(%) 31.47 32.90 143bps

CODB(%) 26.18 27.99 181bps

EBITtosales(%) 5.29 4.91 (38)bps

ROFE(%) 16.11 11.56 (455)bps

Trading Performance

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33/51


1.Transformingourbusinessforthefuture

CommencedourtransformationofBIGW,focusingoncategoriesofhighcustomerimportancewhichwillprovidemediumto

longterm

profitable

growth

Hardgoodstransformationwillencompasssignificantchangeaswerationaliseandmakewayfornewandexpandedcategories

Firststagechangesarebeingimplemented

acrossour

store

network

(50

stores

in

HY14,

82plannedinthesecondhalf)toexpandourcoreofferincategoriessuchasToysandFootwear

FocusedonenhancingBIGWreplenishmentsystems

and

supply

chain

capabilities

Implementedanewstoremanagementstructuretoimprovethealignmentofinstoreleadership

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34/51


2.Stronggrowthinbrandsthatwinon

value

everydayPleasinggrowthinApparelwithstrongresults

deliveredthroughexclusivebrandssuchas'PeterMorrissey'andthe'MichelleBridges'and'GuyLeech'activewearranges

Ournew

'Lee

Cooper'

range

is

showing

pleasingearlyresults

Homedepartmentalsoperformedwell,particularlyKitchenwareandHomeStorage,withcustomersenjoyingthebenefitsofour

exclusiveand

branded

product

ranges

3.Realisingourmultioptionambition

LeveragingEziBuy'sworldclass

distributioncapabilities

and

expertise

in

directtoconsumerretailingtoenhanceourmultioptionoffer

eBooksofferlaunchedinSeptemberwith40,000+titlesdownloadedinHY14

ImplementedClick

&

Collect

across

our

entire

networkinNovember

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35/51

Home Improvement

HOME IMPROVEMENT

MATT TYSONManaging DIRECTOR

Home Improvement


36/51

OurMastersnetworkcontinuestogrowstrongly,

with38storestradingatHY14

Masterssalesup49.4%,withstoresnowhaving

tradedonaverage,for15months

MastersEBIT

loss

of

$71.9m

for

the

half

year

Weremainfocusedonexecutingourplanto

achievebreakeveninMastersduringFY16by

Increasingsalesperstore

Improvinggross

margin

Drivingefficienciesinstore

Increasingfractionalisationofcostsinthe

distributionandsupportnetwork

HomeTimber

and

Hardware

sales

up

7.8%,

with

recentlyrefurbishedcompanystoresachieving

pleasinggrowth,withmoreplannedinFY14

TherelationshipwithourJointVenturepartner

Lowesremainsstrong.Theyhaveagainextended

thedate

for

opening

their

put

option

exercise

period

Home ImprovementAustralia's fastest growing Home Improvement business

$796M

HOME IMPROVEMENT Sales

25.0%

Home timber AND hardware SALES

MASTERS SALES

$393M 49.4%

$403M 7.8%

Trading Performance

or

or

or

34



37/51

1.Improvesalesperformance

Frequencyof

return

customer

visits

increased

through

tailoredoffers

StrongtradinginKitchens,AppliancesandGardeningdemonstratestheappealofourdifferentiatedoffer

AustraliasBestNewOnlineRetaileratthe2013ORIAs

Focuson

trade

and

serious

DIY

customers

at

Home

TimberandHardwarewiththe'GoWheretheTradiesGo'brandcampaigndrivinganincreaseinstorevisitationsandtradesales

HomeTimberandHardwarewasrecentlyawarded

HardwareStore

of

the

Year

at

the

Roy

Morgan

CustomerSatisfactionAwards

2.Enhanceinstoreoffer

OurMastersBestPriceGuaranteecontinuestoresonate

wellwith

customers.

We

will

beat

all

prices

on

identical

itemsby10%,bothinstoreoronline

ExpandedourrangeofexclusivebrandsavailableinMasters

Workinginpartnershipwithstrategicvendorsto

introduceinnovative

products

into

the

Australian

market


35



38/51

3.Continuetodrivecostefficiencies

Significantprogress

in

reducing

days

stock

on

hand

in

Mastersthroughsupplychainimprovementsandinventorymanagement

Pleasingresultsfromcostsavinginitiativesinstores

Commencedthe

expansion

of

our

Home

Timber

and

HardwareDCinNSWwhichwilldelivercostsavings

4.SuccessfullyrolloutnewMastersstores

7

stores

opened

3

ahead

of

our

plan

for

the

half

Remainontracktoopen18storesinFY14

5.Continuetobuildtheteam

Announced

the

appointment

of

Matt

Tyson

as

ManagingDirector

Continuedinvestmentintrainingforemployees,enhancingourreputationforsuperiorcustomerservice


36


39/51

37

Balance Sheet


40/51

Balance Sheet

$million FY13 HY13 HY14Change

HY14/HY13

CONTINUINGOPERATIONS

Inventory 4,205.4 4,498.9 4,779.8 6.2%

TradePayables (4,080.0) (5,363.0) (4,809.7) (10.3)%

NetInvestmentinInventory 125.4 (864.1) (29.9) (96.5)%

Receivables 985.2 1,032.0 990.4 (4.0)%

OtherCreditors (3,086.1) (3,090.3) (3,191.2) 3.3%

WorkingCapital (1,975.5) (2,922.4) (2,230.7) (23.7)%

FixedAssetsandInvestments 9,564.8 9,020.2 9,991.0 10.8%

IntangibleAssets 5,784.3 5,637.6 6,280.4 11.4%

TotalFundsEmployed 13,373.6 11,735.4 14,040.7 19.6%

NetTaxBalances 425.2 406.1 386.6 (4.8)%

NetAssets

Employed 13,798.8 12,141.5 14,427.3 18.8%

NetRepayableDebt1 (3,746.9) (2,874.7) (3,532.9) 22.9%

OtherFinancialLiabilities2 (751.4) (663.5) (796.3) 20.0%

NetAssets ContinuingOperations 9,300.5 8,603.3 10,098.1 17.4%

NetAssets DiscontinuedOperations

TotalNet

Assets 9,300.5 8,603.3 10,098.1 17.4%

Shareholders'Equity 9,028.4 8,333.5 9,827.8 17.9%

NoncontrollingInterests 272.1 269.8 270.3 0.2%

TotalEquity 9,300.5 8,603.3 10,098.1 17.4%

Inventoryincrease

was

primarily

driven

by

new

store

openings,inparticular33AustralianSupermarkets(net)

and13MastersstoressinceHY13andincreaseddirect

globalsourcing

WorkingCapitalwasimpactedbydifferencesinthe

timingofcreditorpaymentsrelativetothereporting

dates(impactapproximately$700m).Adjustingforthis,

workingcapital

was

in

line

with

the

prior

half

year

FixedAssetsandInvestmentsincreasereflectsongoing

propertydevelopmentandcapitalexpenditure,with

139newstoresand96refurbishmentssinceHY13,

offsetbyongoingdepreciation

IntangibleAssetsincreasereflectstheacquisitionof

EziBuyand

increased

intangibles

in

our

New

Zealand

SupermarketsbusinessattributabletothestrongerNew

Zealanddollar

NetRepayableDebtwasimpactedbydifferencesinthe

timingofcreditorpaymentsrelativetothereporting

datesandtheacquisitionofEziBuy

OtherFinancial

Liabilitiesincrease

largely

reflects

an

increaseintheLowesputoptioninourHome

Improvementbusinessto$675.4m

Shareholders'Equityincreasereflectsprofitsgenerated

bytheGroupoffsetbythepaymentofdividends

1. Includescash,borrowings,hedgeassetsandliabilities

2. PrimarilyrepresentstheLowesputoptionandtheALHgamingentitlementliabilityresultingfromtheFY13changestotheVictoriangamingregulations

38

Average inventory days for continuing operations


41/51

Average inventory days for continuing operations

1.ExcludesHomeImprovementandinHY14alsoexcludesincrementalglobalsourcedinventoryNote:Averageinventorybasedon13monthsrollingaverage

NumberofDays

31.5

31.6

34.01

33.31

32.11 32.6

HY14

HY13

HY12

HY11

HY10

Inventory levels were well controlled during the period

Comments

Average inventoryincreased

by2.9daysdrivenby

Mastersstorerollout

Increasedbulkwine

holdingsinourLiquor

business

Increaseddirect

global

sourcing

ExcludingHomeImprovement

andincrementalglobal

sourcedinventory,average

inventory

increased

0.7

days Closing inventorydayswere

up0.1daysonHY13

35.3

38.2

39


42/51

Shareholder payouts


43/51

Shareholder payouts

$billion

Consistent growth in dividends

Comments

InHY14,wehavecontinuedtogrowdividendpaymentstoshareholders

PayoutratioinlinewithHY13

NosharebuybackactivityanticipatedinthesecondhalfofFY14

0.1 0.2 0.2 0.2

0.3 0.4

0.5 0.6

0.7 0.7 0.7 0.8 0.8

0.20.2

0.3 0.3

0.4

0.5

0.6

0.70.7

0.80.9

0.9

0.5

0.1

0.3

0.7 0.5

0.3

0.9

0.6

0.5

0.7

0.9

1.1

1.3

1.7

2.2

1.6

2.2

FY11FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10

Buy

back

Interimdividend

FY12FY02

Inspeciedistribution

HY14FY13

Finaldividend

41

Return on funds employed1 from continuing operations


44/51

Return on funds employed from continuing operations

BEFORE Significant ITEMS

Percentage

15.8

15.4

16.7

17.7

14.9 18.02

17.62

HY14

HY13

HY12

HY11

HY10

Comments

ROFEfromcontinuing

operationsbeforesignificant

itemsdecreased

87

bps

to

14.9%drivenby

Theimpactofdifferences

inthetimingofcreditor

paymentsrelativetothe

reportingdates

Thecontinuinginvestment

inourHomeImprovement

business

ROFEfromourmature

businessesincreased33bps

excludingdifferencesinthetimingofcreditorpayments

1. Basedonaverageofopeningandclosingfundsemployed2. ExcludingtheimpactofdifferencesinthetimingofcreditorpaymentsrelativetothereportingdatesandthecontinuinginvestmentinourHomeImprovementbusiness

42

Outlook


45/51

Outlook

Woolworthsremains

well

positioned

in

its

market

segments

and

has

a

strong

andsustainablebusinessmodel

WepreviouslyprovidedguidanceforFY14netprofitaftertaxfromcontinuing

operationsto

grow

in

the

range

of

4%

7%

(on

a

normalised

52

week

basis

excludingsignificantitems)

Whilstsomeofourbusinessescontinuetoexperiencechallengingtrading

conditions,we

have

seen

good

progress

against

our

Strategic

Priorities

which

havedeliveredsustainableprofitgrowthforHY14

Wehaverevisedourpreviousguidanceandnowexpectnetprofitaftertaxfrom

continuingoperations

to

grow

in

the

range

of

5%

7%

(on

a

normalised

52

week

basisexcludingsignificantitems),subjecttonosignificantdeteriorationin

tradingconditions

43


46/51

COMPANY

RESULTSHALF YEAR ENDED


47/51

45

Gross profit margin from continuing operations


48/51

Gross profit margin from continuing operations

Percentage

27.04%

26.95%

26.33%

26.18%

25.94%

HY13

HY12

HY11

HY10

Continued to invest in lower prices delivering greater value to customers

HY14

Comments

Grossprofit asapercentageofsalesfromcontinuingoperations

increased9

bps

on

the

prior

year reflecting

Improvementsinbuying

Moreeffectivepromotionalactivity

Growthin

exclusive

brand

ranges

Positivechangesinsalesmix

Wehavecontinuedtoreinvestinlowerprices,deliveringgreater

valueto

customers

as

evidenced

by

continuedaveragepricedeflationinAustralianFoodandLiquorandBIGWaswellaslowinflationinNewZealandSupermarkets

46

CODB / sales from continuing operations before


49/51

CODB / sales from continuing operations before

significant items

Percentage

20.61%

20.51%

19.97%

19.71%

19.65%

HY13

HY12

HY11

HY10

HY14

A strong result given ongoing cost pressuresComments

CODBasapercentageofsalesfrom

continuing

operations

before

significantitems increased10bpsonthepriorhalfyear,to20.61%

ExcludingnoncomparableadditionalnetcostsfollowingtheSCAtransactionandtheHome

Improvementbusiness which

remainsinstartupphase,CODBasapercentageofsalesforcontinuingoperationsbeforesignificantitemsdecreased5bps,astrongresultinlightofalargenumberof

newstores

47

Capital expenditure half year


50/51

$millionHY13

ActualHY14

Actual

NewStores 140 104

Refurbishments 2361 179

GrowthCapex 376 283

SupplyChain,IT,MultioptionandStayinBusiness

128 214

HomeImprovement 65 56

NormalandOngoingCapex 569 553

PropertyDevelopments

(net

of

sales)

excludingHomeImprovement 224 174

PropertyDevelopments(netofsales)HomeImprovement

134 152

NetCapexbeforeSCAPropertyGrouptransaction

927 879

1. Includes106minorrefurbishmentsinAustralianSupermarkets

Capital expenditure half yearNewStores1 Refurbs

Storenumbers HY13 HY14 HY13 HY14

Australian

Supermarkets 17 26 4

2

13Liquor 41 22 23 24

NZSupermarkets 4 2 2 1

Petrol 8 15 5 7

BIGW 4 3 2 1

EziBuy 4

Hotels 32 1 5 8

HomeTimberandHardware 1

Masters 10 7

Group 116 80 41 55

1. Grossstoreopenings(includingacquisitions)2. Excludes106minorrefurbishmentsinAustralianSupermarkets

NormalandOngoingCapex$m,Depreciation%toSales NormalandOngoingCapex$m,Capex%toSales

0.00%

0.40%

0.80%

1.20%

1.60%

0

300

600

900

HY10 HY11 HY12 HY13 HY14

0.00%

1.00%

2.00%

3.00%

4.00%

0

300

600

900

HY10 HY11 HY12 HY13 HY14

Depreciationasa%toSalesCapexSpend$m Capexasa%toSalesCapexSpend$m

48

Capital expenditure full year


51/51

$million 2014Previous

FcstCurrent

Fcst Var

NewStores 250 276 26

Refurbishments 472 427 (45)

GrowthCapex 722 703 (19)


603 644 41

HomeImprovement 140 129 (11)

NormalandOngoingCapex 1,465 1,476 11


(net

of

sales)excludingHomeImprovement 461 210 (251)

PropertyDevelopments(netofsales)HomeImprovement 420 312 (108)


2,346 1,998 (348)

Capital expenditure full year

$million FullYear2012

Actual2013

Actual2014Fcst

NewStores 346 300 276

Refurbishments 268 478 427

GrowthCapex 614 778 703


373 390 644

HomeImprovement 137 110 129

NormalandOngoingCapex 1,124 1,278 1,476


(net

of

sales)

excludingHomeImprovement 552 343 210

PropertyDevelopments(netofsales) HomeImprovement

374 296 312


2,050 1,917 1,998

NormalandOngoingCapex$m,Capex%toSalesNormalandOngoingCapex$m,Depreciation%toSales

0%

1%

2%

3%

0

500

1,000

1,500

2,000

2010 2011 2012 2013 2014

Depreciationasa%toSalesCapexSpend$m

0%

1%

2%

3%

4%

0

500

1,000

1,500

2,000

2010 2011 2012 2013 2014

Capexasa%toSalesCapexSpend$m

wow fy14 half year profit analyst presentation

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