2016 Half-year Results Supplementary Information

Transcription

1 206 Half-year Results Supplementary Information To be read in conjunction with the 206 Half-year Results Briefing Presentation to be held on Wednesday, 24 February 206

2 Presentation outline Item Presenter Page Coles John Durkan 3 Home Improvement & Office Supplies John Gillam 7 - Home Improvement 8 - Office Supplies Department Stores - Kmart Guy Russo 3 - Target Stuart Machin 7 Industrials Rob Scott 2 - Chemicals, Energy & Fertilisers 22 - Industrial & Safety 24 - Resources 27 Group Balance Sheet & Cash Flow Terry Bowen Half-year Results 2

3 Coles John Durkan Managing Director

4 Coles network as at 3 December Selling Area Supermarkets (sqm),77,92 Liquor (sqm) ex hotels 209, Supermarkets 865 Liquor stores 89 Hotels 68 Convenience Coles 206 Half-year Results 4

5 Store network movements Open at 30 June 205 Opened Closed Rebranded Open at 3 Dec 205 Supermarkets Coles 77 0 (3) Bi-Lo 5 - () - 4 Total Supermarkets (4) Liquor First Choice 00 - () - 99 Vintage Cellars 79 2 () - 80 Liquorland (0) Hotels 90 - () - 89 Total Liquor (3) Convenience () - 68 Coles 206 Half-year Results 5

6 Revenue reconciliation Half-year ended 3 December ($m) Food & Liquor Convenience Total Food & Liquor Convenience Total Segment revenue (Gregorian) 6,496 3,59 20,087 5,559 3,924 9,483 Less: Other revenue (22) (7) (29) (4) (7) (48) Headline sales (Gregorian) 6,284 3,584 9,868 5,48 3,97 9,335 Plus: Gregorian adjustment Headline sales revenue (Retail 3 ) 6,657 3,666 20,323 5,797 4,000 9,797 Segment revenue for Food & Liquor includes property revenue for 205 of $3 million & for 204 of $5 million. 2 Adjustment to headline sales revenue to reflect retail period end. 3 Retail period relates to the 27 week period 29 June 205 to 3 January 206 & the 27 week period 30 June 204 to 4 January 205. Coles 206 Half-year Results 6

7 Home Improvement & Office Supplies John Gillam Managing Director

8 Bunnings network as at 3 December Warehouse stores Smaller format stores 32 Trade Centres Home Improvement 206 Half-year Results 8

9 Store network movements Open at 30 June 205 Opened Closed Open at 3 Dec 205 Expanded Under construction 3 Dec 205 Home Improvement Bunnings Warehouse (3) Bunnings smaller formats Bunnings Trade Centres 65 3 () () Home Improvement 206 Half-year Results 9

10 Home Improvement performance summary Half-year end 3 December ($m) % Revenue 5,500 4, EBITDA Depreciation & amortisation (75) (68) (0.3) EBIT EBIT margin (%) Less: Net property contribution Trading EBIT Trading EBIT margin (%) Net property contribution includes external property income & expenses & gain or losses on disposals of freehold property. Home Improvement 206 Half-year Results 0

11 Officeworks network as at 3 December Officeworks Stores Fulfilment Centres Customer Service Centre Print Hub 49 2 Office Supplies 206 Half-year Results

12 Store network movements Open at 30 June 205 Opened Closed Open at 3 Dec 205 Under construction 3 Dec 205 Office Supplies Officeworks 56 4 (2) 58 2 Office Supplies 206 Half-year Results 2

13 Kmart Guy Russo Managing Director

14 Kmart network as at 3 December Kmart stores KTAS centres Kmart 206 Half-year Results 4

15 Store network movements Open at 30 June 205 Opened Closed Open at 3 Dec 205 Kmart Kmart Tyre & Auto () 249 Kmart 206 Half-year Results 5

16 Revenue reconciliation Half-year end 3 December ($m) Segment revenue (Gregorian) 2,750 2,442 Less: Non sales revenue () (2) Headline sales (Gregorian) 2,749 2,440 Add: Gregorian adjustment Headline sales revenue (Retail 2 ) 2,799 2,490 Adjustment to headline sales revenue to reflect retail period end. 2 Retail period relates to the 27 week period 29 June 205 to 3 January 206 & the 27 week period 30 June 204 to 4 January 205. Kmart 206 Half-year Results 6

17 Target Stuart Machin Managing Director

18 Target network as at 3 December Large Small Target 206 Half-year Results 8

19 Target network Open at 30 June 205 Opened Closed Open at 3 Dec 205 Large 83 5 (3) 85 Small 22 - () 2 Total (4) 306 Target 206 Half-year Results 9

20 Revenue reconciliation Half-year end 3 December ($m) Segment revenue (Gregorian),972,935 Less: Non sales revenue - - Headline sales (Gregorian),972,935 Add: Gregorian adjustment Headline sales revenue (Retail 2 ) 2,008,977 Adjustment to headline sales revenue to reflect retail period year end. 2 Retail period relates to the 27 week period 28 June 205 to 2 January 206 & the 27 week period 29 June 204 to 3 January 205. Target 206 Half-year Results 20

21 Industrials Rob Scott Managing Director

22 Chemicals, Energy & Fertilisers - Business overview Business Geography Sector Key Customers (50%) (75%) (3.7%) Ammonia Ammonium nitrate (AN) Ammonium nitrate (AN) Sodium cyanide (SC) PVC/chemicals Decking Energy retailing, gas production & distribution WA WA/Global Nickel, internal Iron ore, gold BHPB, Minara, AN, AGR, Fertilisers Dyno Nobel, Downer, Rio Tinto, Orica, Fertilisers Qld Coal BMA, Curragh, Rio Tinto WA/Global Gold Newmont, Barrick, AngloGold Vic/Australia Australia/Global WA/NT Construction Residential, transport, industrial Fertilisers WA Agriculture Iplex, Vinidex, Pipemakers Timber merchants, home builders Gas distributors, resources, engineering, residential, leisure, autogas, transport, power generation Landmark, independent distributors Oil & Gas WA Energy Alcoa, Alinta PVC manufacturing will cease in the second half of FY6. Chemicals, Energy & Fertilisers 206 Half-year Results 22

23 Chemicals, Energy & Fertilisers - Sales, pricing & production kt,200 Solid nitrogen sales in first half 2nd Half st Half Decline in US$ ammonia pricing only partially offset by lower A$ $/t 800, FY202 FY203 FY204 FY205 FY Ammonia (US$, FOB Middle East) Ammonia (A$, FOB Middle East) 0 Dec-0 Dec- Dec-2 Dec-3 Dec-4 Dec-5 $/tonne,400 Saudi CP remains relatively low kt 200 Modest improvement in content in H6 t/tj 0.8,200, Jan 06 Jan 07 Jan 08 Jan 09 Jan 0 Jan Saudi CP US$/t (propane) Saudi CP A$/t (propane) Jan 2 Jan 3 Jan 4 Jan 5 H LPG production (kt) H2 LPG production (kt) H average LPG content (t/tj) FY average LPG content (t/tj) Chemicals, Energy & Fertilisers 206 Half-year Results 23 0 FY202 FY203 FY204 FY205 FY

24 Industrial & Safety - Business overview Execution through four new business streams Blackwoods New Zealand Workwear Group Gas & Services Maintenance, Repair & Operations, Safety Improvement plans for New Zealand and Workwear Group to be finalised in 2H FY6. Workwear & uniforms Gas & Services Industrial & Safety 206 Half-year Results 24

25 Industrial & Safety - Distribution network As at 3 December locations with 233 branches, 69 gas distribution points & 56 Workwear franchises Indonesia UAE 7 Blackwoods UK 49 New Zealand Workwear Group (+ 56 franchised) Coregas (+ 69 distribution points) Greencap Note: Blackwoods includes Blackwoods Electrical, Bakers & Total Fasteners, Protector Alsafe, Bullivants and Fasterner & Welding Specialist locations; New Zealand includes Blackwoods Protector NZ, NZ Safety including APC Techsafe and Packaging House; Greencap includes NSCA locations & Protector Alsafe Training Service locations (previously included in Protector Alsafe); Workwear Group includes Safety Source. Industrial & Safety 206 Half-year Results 25

26 Industrial & Safety - Demand driver Private capital expenditure growth Coal, petrol & gas export price movements 00% 50.0% 70% 00.0% 40% 0% 50.0% -20% 0.0% -50% % All industries Mining Source: ABS , Private New Capital Expenditure & Expected Expenditure, Australia Source: ABS , International trade price indexes, Australia Industrial & Safety 206 Half-year Results 26

27 Resources - Global environment: current & short-term trends World blast furnace iron production trending downwards Volatile Chinese import metallurgical coal demand Chinese excess steel capacity being placed into global markets impacting price Metallurgical coal market continues to be in oversupply Australian coal suppliers slow to adjust supply due to impact of take or pay contracts US coal export supply rationalisation materialising; down 40% year on year Expected demand growth from India slow to materialise to offset weakening Chinese demand Stable supply from Australia & weak Chinese market continues to weigh on spot pricing Many producers struggling to meet cash costs of production at current low export prices A$:US$ exchange rate has weakened through H FY6, but benefit has been more than offset by price declines in US$ export coal pricing Resources 206 Half-year Results 27

28 Resources - Australian coal market prices Australian steaming coal prices US$/tonne (nominal) FOB Australia (annual versus spot) Australian hard coking coal prices US$/tonne (nominal) FOB Australia (annual versus spot) JPU Reference Price Spot Price Annual Reference Price Quarterly Benchmark Reference Price Spot Price Source: Energy Publishing, Tex Report, Macquarie Research, CRU Resources 206 Half-Year results 28

29 Resources - Curragh productivity & mine optimisation For personal use only Continued focus on cost control & productivity improvements H FY6 cash cost ~35% below H FY2 peak Cost performance sustained by Optimisation of mine operations Ongoing supplier negotiations & contract management focus Employee headcount reduction of 6% Further cash cost reduction targeted for the remainder of FY6 H FY2 Mine cash costs per tonne (excl. carbon tax) 2H FY2 H FY3 2H FY3 H FY4 2H FY4 H FY5 2H FY5 HCC mines relative unit FOB cash costs H FY6 Independent benchmarking studies continue to place Curragh in lowest quartile of Australian Free on Board cash costs (excluding Stanwell export rebate & Stanwell domestic coal obligations) FOB cost US$/t Curragh Produced tonnes accum (Mt) Resources Source: AME 206 Half-year Results 29

30 Resources - Curragh export metallurgical sales product mix H FY6 Actual 4.2 million tonnes FY6 Forecast million tonnes Stanwell Rebate $35m $55m - $65m Resources 206 Half-year Results 30

31 Resources - Coal production volumes Half-year ended ( 000 tonnes) Mine Ownership Coal Type Dec 205 Dec 204 Curragh, QLD 00% Metallurgical 3,986 4,580 Steaming,79,543 Bengalla, NSW 40% Steaming,680,658 Total 7,457 7,78 Wesfarmers attributable production. Resources 206 Half-year Results 3

32 Resources - Coal sales volumes Half-year ended ( 000 tonnes) Mine Ownership Coal Type Dec 205 Dec 204 Curragh, QLD 00% Metallurgical 4,75 4,27 Steaming,89,542 Bengalla, NSW 2 40% Steaming,733,726 Total 7,727 7,539 Curragh metallurgical coal sales excludes traded coal. 2 Wesfarmers attributable sales. Resources 206 Half-year Results 32

33 Resources - FX hedging profile Hedge book - history Following a number of years of positive contribution, more recent years impacted by currency hedge book losses $m Currency hedge book contribution (00) (200) (42) (47) FY FY2 FY3 FY4 FY5 FY6 Currency hedge book gains/ (losses) Cumulative currency hedge book gains/ (losses) 226 Hedge book - current Remaining forward contracts Current US$ sold Average A$/US$ forward open (US$m) hedge rate Curragh Bengalla FY FY FY FY Hedging position for both mines shown as at 8 January 206 Foreign exchange policy recently suspended & under review FY6 fully & FY7 hedges largely closed-out - Currency hedge book losses of $70 million in H FY6 & $77 million in 2H FY6 Resources 206 Half-year Results 33

34 Resources financial summary Half-year ended 3 December Commentary Export revenue ($m) Produced Realised Significant fall in export coal prices with benefit of a lower Hedge book gains/(losses) (70) 6 Australian dollar largely offset by hedge book losses Total Export mining & other costs ($m) 2 (440) (402) Lower unit mine cash costs at Curragh more than offset by Traded earnings ($m) 2 inventory drawdown due to lower production & higher port costs Export contribution to earnings ($m) Stanwell Corporation obligations Domestic coal supply (42) (39) Stanwell Corporation obligations continue to adversely impact Export rebate (35) (34) earnings, including contracted domestic coal supplied below cost Total (77) (73) State government royalties ($m) (46) (46) EBITDA (44) 08 Operational EBITDA, excluding hedge book gains & losses, of Depreciation & amortisation ($m) (74) (73) $26m in H FY6 ($02m in H FY5) EBIT ($m) (8) 35 Bengalla reported at 40% share. 2 Simple unit cost averages will be impacted by tonnage & cost structure variances between mines. Resources 206 Half-year Results 34

35 Group Balance Sheet & Cash Flow Terry Bowen Finance Director Wesfarmers Limited

36 Group management balance sheet - overview ($m) H5 FY5 H6 Commentary Inventories 6,080 5,497 6,580 Receivables & prepayments,644,658,80 Trade & other payables (6,383) (5,764) (7,063) Other Net working capital,842,784,847 Property, plant & equipment 0,23 0,205 0,207 Detailed working capital discussion provided on slide 37 Intangibles 9,50 9,309 9,298 Goodwill increased by $48m from H FY5 on acquisition of GE s interest in the Coles credit card JV & Workwear Group Other assets Provisions & other liabilities (3,03) (3,040) (3,4) Retail divisions seasonally higher against FY5 Higher against H FY5 due to increased provisions for bonus payments & unredeemed loyalty points Total capital employed 28,789 29,033 28,922 Net financial debt 2 (4,508) (4,746) (4,470) Lower against FY5 mainly due to repayment of 500m (A$756) Euro medium term notes, partially offset by A$350m drawdown of Group s bank bilateral facilities Net tax balances Total net assets 24,744 24,78 24,962 The above balances reflect the management balance sheet, which is based on different classification & groupings than the balance sheet in the 206 Half-year Report. 2 Net debt including interest rate swap assets / liabilities & excluding financing of credit book relating to the Coles credit card. 206 Half-year Results 36

37 Balance sheet working capital ($m) H5 FY5 H6 Commentary Inventories 6,080 5,497 6,580 Retail divisions & WesCEF seasonally higher against FY5 Inventory increased by $500m (H FY6 v H FY5) mainly due to network expansion (Bunnings & Coles) & higher unit purchase costs due to a lower Australian dollar Receivables & prepayments,644,658,80 Retail business growth Trade & other payables (6,383) (5,764) (7,063) Retail payables seasonally higher against FY5 given Christmas trade Retail payables increased by $72m (H FY6 v H FY5) due to business growth, improved creditor terms & effect of a lower Australian dollar Other Cash on hand seasonally higher against FY5 Net working capital,842,784,847 The above table refers to balance sheet movements only. Working capital movements as shown on slide 54 of the 206 Half-year Briefing Presentation exclude non-cash movements which are included in the table above. 206 Half-year Results 37

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