22 June 2016 The Manager Company Announcements Office Australian Securities Exchange Dear ...

140 Pages·2016·14.88 MB·English

by  Kimalee Hunter

22 June 2016

The Manager
Company Announcements Office
Australian Securities Exchange

Dear Sir,

PRESENTATION TO BE GIVEN AT STRATEGY BRIEFING DAY - SYDNEY

Following is a presentation that is to be given today at a Strategy Briefing Day in Sydney which is
scheduled to commence at 6:30am AWST / 8:30am AEST.

This briefing will be webcast and can be accessed at www.wesfarmers.com.au.

Yours faithfully,

L J KENYON
COMPANY SECRETARY
2016 Strategy Briefing Day
Wednesday, 22 June 2016
Agenda
Time Topic
8.00 – 8.30 am Registration
8.30 – 9.10 am Introduction & Group Overview Richard Goyder
9.10 – 10.10 am Coles John Durkan
10.10 – 11.10 am Home Improvement John Gillam
11.10 – 11.25 am Morning Tea Break
Guy Russo
11.25 – 12.25 pm Department Stores
Ian Bailey
12.25 – 12.50 pm Officeworks Mark Ward
12.50 – 1.40 pm Lunch Break
1.40 – 2.40 pm Industrials Rob Scott
2.40 – 2.45 pm Close Richard Goyder
Group Overview
Richard Goyder
Managing Director, Wesfarmers Limited
Wesfarmers operating model
Inputs Value creating business model Outputs
A portfolio of quality businesses
s Robust financial
capacity
Superior long-term
financial
performance
Superior people
resources
A strong
Value adding transactions
sustainable future
Strong corporate
infrastructure
Group Overview 2016 Strategy Briefing Day | 4
Robust financial capacity
$b %
Cumulative cash realisation
• Cash flow generation 25 150
20
– Cash generative portfolio
100
15
– Working capital efficiencies
10
50
– Disciplined capital expenditure
5
FY16f net capex $1.3b to $1.4b
0 0
FY10 FY11 FY12 FY13 FY14 FY15 1H16
• Strong balance sheet Cumulative operating cash flow [LHS]
Cumulative cash realisation ratio [RHS]¹
– Access to diverse debt markets
1Adjusted for NTIs
Finance costs &
– Limit debt maturities in any given year $m %
weighted average cost of debt
800 10
– Strong credit rating metrics
8
600
» Moody’s: A3 (stable outlook)
6
400
» S&P: A- (negative outlook)
4
200
2
• Net debt of $6.3b2 as at 31 May 2016
0 0
FY10 FY11 FY12 FY13 FY14 FY15 FY16F
• FY16f cost of debt c. 4.4% versus 5.5% in FY15
Finance costs [LHS] Weighed average cost of debt [RHS]
2 Includes financial services liabilities of $805m which are fully offset by credit card receivables & the benefit of $656m of cross currency swaps
Group Overview 2016 Strategy Briefing Day | 5
Superior people resources
$b Wages, salaries & other benefits %
• Ability to attract, motivate & retain high calibre
9 16
talent
8
14
• High-performance culture & strong focus on team
7
member development
12
6
• Ability to fill key roles with Group talent
5 10
FY10 FY11 FY12 FY13 FY14 FY15
• Continued focus on diversity
Wages [LHS] Wages portion of revenue [RHS]
– Over 3,2001 Indigenous employees
Lost time injury frequency rate (R12)2
(c. 20% increase on FY15)
14
12
– Growing representation of women in 2010 2016
10
leadership positions
8
6
• Significant improvements in safety performance 4
2
across the Group
0
s s t t s F h &
eloC gnin ramK egra krow ECs garr lairyte
nu T ec eW uC tsufaS
B if d
f n
O
I
2Comparison based on R12 LTIFR as at March 2010& March 2016
1 As at March 2016
Group Overview 2016 Strategy Briefing Day | 6
Strong corporate infrastructure
Strong corporate infrastructure
Wesfarmers’ core values underpin key corporate systems, processes & initiatives:
• Lean corporate office
• Divisional boards
• Group wide planning, budgeting & monitoring processes
• Executive talent development & key role succession planning
• Strong governance: centralised statutory accounting, tax, legal, treasury & investor relations
• Business development team: evaluation of value adding transactions & significant capex
Core values
Integrity Openness Accountability Boldness
Group Overview 2016 Strategy Briefing Day | 7
Value creating business model
Long history of value adding transactions
Group transaction activity $2b pre-tax gain on divestments
(inflation adjusted transaction size)
$b
2.0
Girrahcoal
Coles Group
1.8
Acquisitions
Howard
Landmark
Smith
1.6
Homebase
1.4 Australian
IAMA Quadrant Railroad Group
Energy
Bengalla Aust Lumley Coregas 1.2 Engen
deposit Bunnings Railroad Finance WorGkwroeuapr APLreWmAier Coal
Group Aust & OAMPS 1.0
Western NZ Australian MDL
CSBP Curragh
Collieries Dalgety Vinyls 162 0.8
1984 1988 1992 1996 2000 Girrah 2004 2008 Engen2012 2016 Insurance
0.6
coal underwriting
Aust. ALWA
Railroad Premier 0.4
Landmark Group Coal
Insurance Insurance
Insurance 0.2
underwriting broking & broking &
Divestments premium premium funding
0
funding
Group Overview 2016 Strategy Briefing Day | 8
Value creating business model
Growth through disciplined acquisitions
EBIT ($b)
5
Divestments
Acquisitions
Pre-2001 businesses
4
3
2
1
0
FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15
Group Overview 2016 Strategy Briefing Day | 9