Grant O'Brien Group Performance and Strategic Priorities Tjeerd Jegen Australian Supermarkets and Petrol Brad Banducci Woolworths Liquor Group Dave Chambers New Zealand Supermarkets Grant O'Brien General Merchandise Matt Tyson Home Improvement David Marr Group Financial Performance Grant O'Brien Outlook 1
Continuing Operations Before Significant Items 1 Total Group Change Change Normalised 2 Normalised 2 FY14 Change FY14 Change 2.7% 4.7% 3.9% 5.9% Sales $60.8b $60.8b 4.7% 3.3% 5.3% EBIT $3,775.2m $3,775.2m 8.5% 4.2% 6.1% NPAT $2,451.7m $2,451.7m 7.6% 3.3% 5.2% EPS 196.5¢ 196.5¢ 3.0% DPS 137¢ 101 bps 50 bps 3 ROFE 27.0% 1. There were no significant items in FY14. Significant items in FY13 included - One-off loss on the SCA Property Group transaction of $32.8m (before tax) and $28.5m (after tax) - Gain on disposal of Consumer Electronics businesses of $9.9m (before tax) and $7.9m (after tax) - Victorian transport fleet redundancies $25.8m (before tax) and $18.1m (after tax) - US 144A bond redemption costs $82.3m (before tax) and $57.6m (after tax) 2. Represents full year growth adjusted to remove the approximate impact of the 53 rd week in FY13 3. Excluding the investment in our Home Improvement business, ROFE increased 57 bps on a normalised 52 week basis 2
Change Normalised 1 $ million FY14 FY13 Change Australian Food, Liquor and Petrol 2 3,368.0 3,199.3 5.3% 7.2% New Zealand Supermarkets (NZD) 309.8 302.7 2.3% 4.2% New Zealand Supermarkets 271.4 236.2 14.9% 17.1% General Merchandise 152.9 191.3 (20.1)% (18.8)% Hotels 275.4 263.7 4.4% 6.5% Home Improvement (169.0) (138.9) 21.7% 24.1% Central Overheads (123.5) (98.4) 25.5% 28.0% Group EBIT – Continuing Operations 3,775.2 3,653.2 3.3% 5.3% Group EBIT – Discontinued Operations - 2.5 n.c Total Group EBIT (before significant items) 3,775.2 3,655.7 3.3% Significant Items (before tax) One-off loss on SCA Property Group transaction - (32.8) n.c Gain on disposal of Consumer Electronics businesses - 9.9 n.c Victorian transport fleet redundancies - (25.8) n.c Total Group EBIT (after significant items) 3,775.2 3,607.0 4.7% 1. Represents full year growth adjusted to remove the approximate impact of the 53 rd week in FY13 2. Includes FY14 EBIT of $3,278.7m for Australian Food & Liquor (FY13: $3,061.6m) and $89.3m for Petrol (FY13: $137.7m). These FY13 and FY14 results are not comparable as the cost of providing the Petrol discount which was previously included in Australian Food & Liquor has been recorded in the Petrol division from the beginning of H2’14. From FY15, a combined result for Australian Food, Liquor and Petrol will be provided 3
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FY14 Progress Australian Food & Liquor - Sales Growth (%) • Improving comparable sales, EBIT growth and market share over the past Comparable 4.7% 1 4.7% 1 3 years Total • Delivered excellent value with key Supermarkets promotional campaigns 3.8% providing more than $750m in savings to customers in FY14 and average price deflation of 3.1% 3.0% • Fresh market share growing faster than Grocery 2.7% • More convenient access across all channels with an average of 21.1m customers per week in FY14 1.1% • Market leading store formats, online offer and range • danmurphys.com.au is Australia's most visited liquor website FY12 FY13 FY14 • Early stages of transforming Countdown delivering pleasing results • Strong customer response to ‘Price Lockdown’ and ‘Price Drop’ campaigns • countdown.co.nz is New Zealand's leading online food site Australian Food, Liquor & Petrol - EBIT Growth • 67 canopies and forecourts refreshed to expand the access to diesel, premium fuels and fast flow fuel pumps 7.2% 1 6.7% 1 • Improved our merchandise offer (non-fuel) through new store formats and ranges, which has delivered strong results +$169m 5.3% +$255m 2 More To Do +$148m • New range of fresh food initiatives to reinforce our Fresh leadership • Embed price leadership through continued price investment and communication of our value credentials • Continue to enhance Dan Murphy’s and BWS customer sales and service capabilities • Extend our leadership in online through innovation and stand-out execution • Continue to lower prices in New Zealand for the benefit of our customers FY12 FY13 FY14 1. Represents full year growth adjusted to remove the approximate impact of the 53 rd week in FY13 2. Represents the 53 week period 5
Online Sales Growth ($b) / Sales Growth (%) FY14 Progress • Online sales of over $1.2b for FY14, increasing by 50% on FY13 • Australia's market leading online Food and Liquor offers, with strong 50% growth in our Australasian Apparel business • New Zealand's market leading online Food offer $1.2b • Our Online offers are continuing to exceed our expectations 42% • EziBuy now providing platform for GM online offer including BIG W 95% $0.8b $0.6b • Australia’s first full range dedicated online fulfilment grocery store opened in July 14 • 'Track My Order' GPS routing on Supermarket online orders • Roll out of cross divisional Click & Collect underway FY12 FY13 FY14 Masters Sales ($m) / Store Numbers • Under new leadership of Matt Tyson who brings extensive international Sales ($m) and business development experience $752 Store Numbers • Focused on moving Masters from a start-up to a scalable, material profit contributor for the Group $529 More To Do • Platform and operational enhancements to drive an increase in online traffic and sales $146 • Completing rapid roll out of Click & Collect in all divisions 31 49 • Focus on store roll out and range enhancements at Masters 15 • Continue recruitment of important Home Timber and Hardware customers FY12 FY13 FY14 • Continue our consideration of domestic and international growth opportunities 6
FY14 Progress • 5.9m Everyday Reward cardholders at beginning of year • Continued to invest in technology to enable our online growth • Opened BIG W state of the art DC in Hoxton Park NSW and • Building on our world class supply chain to drive the next National DC in South Auckland New Zealand generation of capability via Mercury II • Appointment of Tjeerd Jegen, Brad Banducci and Penny Winn • Will provide a new way of working across replenishment logistics, store operations and vendor relationships, to deliver a more efficient end-to-end network • Commenced the implementation of our group wide merchandising system (Galaxy) • Acquired 50% stake in the Quantium Group - delivering improved • We are leveraging the work performed by Quantium to provide customer insights customer insights, enabling us to better understand our • Opened Home Improvement DC in Hoxton Park NSW and customers’ needs in consolidated Christchurch Regional DC in New Zealand – Pricing and promotion – Ranging More To Do – Store layout • Everyday Rewards loyalty membership up over 10% to 7.9m and Onecard members up to 1.9m • Move to a new phase of business transformation through our end-to-end supply chain and replenishment projects • Continued focus on blending the best local and international talent • Continue to leverage customer data to drive sales growth and loyalty across during the year, including the business – Matt Tyson, MD Home Improvement • Productivity improvement programs to continue relentless focus on costs – Alistair McGeorge, MD BIG W • Continue to make new appointments to complement our team, sourced – David Marr, CFO internally, domestically and internationally as appropriate – Clive Whincup, CIO – Emma Gray, Chief Loyalty and Data Officer 7
FY14 Progress • New leadership team who will further develop the strategy and • Acquired 12 Compass Group hotels bring additional focus on execution and operational excellence • Dick Smith strategic review complete • Completed phase 1 of category and space changes • Commenced the transformation of our customer offer, • Acquired 29 hotels from Laundy Group replenishment systems and supply chain capabilities • Evolving our offer to align with customers’ needs, including • Divestment of Consumer Electronics business Toys and Footwear • Disposal of $1.4b property assets to the SCA Property Group • Acquired 50% stake in the Quantium Group • Industry leading hotel and gaming charter underpinning our commitment to responsible service of gaming and liquor More To Do • Commenced the roll out of electronic gaming machine (EGM) General Merchandise voluntary pre-commitment functionality • Roll out next wave of space and layout reconfiguration across BIG W stores • Ongoing growth in our hotel network also enabled us to open an • Develop and implement new supply chain and replenishment systems to additional 16 BWS and 2 Dan Murphy’s (net) transform our speed and efficiency to market • Leverage EziBuy to drive online ambitions Hotels • Divested freehold properties as market opportunities arise • Further development of our bar, food and entertainment offer • We are currently considering the divestment of a portfolio of • Complete voluntary pre-commitment implementation prior to legislative freehold Hotel sites, which would add to the $1.4b of property requirements divested through the creation of the SCA Property Group in FY13 • Further targeted hotel acquisitions to provide a pipeline for Dan Murphy’s and BWS store openings 8
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