#1M WOOLWORTHS HOLDINGS LIMITED 20 Summary of the Audited Group Results for the 52 weeks ended 26 June 2022 and Cash Dividend Declaration START#2WHL FINANCIAL OVERVIEW COMMENTARY SUMMARY OF THE AUDITED GROUP RESULTS NAVIGATING OUR REPORT DIRECTORATE & STATUTORY INFORMATION 〈コ 5 / 27 > THIS REPORT IS INTERACTIVE. YOU'LL FIND THESE TOOLS THROUGHOUT THE REPORT: IN COMMITMENT TO OUR GOOD BUSINESS JOURNEY, THIS REPORT IS ONLY AVAILABLE DIGITALLY. HOME BACK TO CONTENTS PAGE USEFUL LINKS FOR MORE DETAIL FIND ADDITIONAL INFORMATION ON THE WEB CLICK TO DOWNLOAD OR UPDATE ADOBE ACROBAT READER ✓ ROLLOVER FOR MORE DETAILED CONTENT PRINT#3WHL FINANCIAL OVERVIEW COMMENTARY SUMMARY OF THE AUDITED GROUP RESULTS FINANCIAL OVERVIEW Turnover +1.7% to R80.1bn Turnover and concession sales Profit before tax +1.4% to R87.0bn +0.8% to R5.2bn Adjusted profit before tax +11.0% to R5.1bn Earnings per share Headline earnings per share Adjusted diluted headline earnings per share Net cash (excluding lease liabilities) of Total dividend per share Return on capital employed Free cash flow per share -11.0% to 387.4cps +6.5% to 398.9cps +9.7% to 374.9cps R229m (2021: net borrowings of R1.1bn) 229.5cps +247.7% (2021: 66.0cps) 16.8% (2021: 14.9%) 448.3 cps (2021: 395.3cps) DIRECTORATE & STATUTORY INFORMATION Country Road, Summer 2022 D 〈コ <3/27 >#4WHL FINANCIAL OVERVIEW COMMENTARY SUMMARY OF THE AUDITED GROUP RESULTS DIRECTORATE & STATUTORY INFORMATION 〈コ 5 / 27 > COMMENTARY ON PERFORMANCE The Group's turnover and concession sales for the 52 weeks ended 26 June 2022 l'current year', 'full year' or 'year') increased by 1.4% compared to the 52 weeks ended 27 June 2021 l'prior year') and by 2.6% in constant currency terms. Online sales grew by 16.4%, contributing 12.4% to the Group's total turnover and concession sales over the year. Notwithstanding the volatile global backdrop, trade during the second half of the year ('H2') showed an improved run rate over the first half of the year ('H1') across all our businesses, with Group turnover and concession sales growing by 4.9%, and by 5.6% in constant currency terms, respectively, as lockdown restrictions eased and our focus on trade and executing against our strategic priorities gained further momentum. As mentioned in our interim results released on the JSE Stock Exchange News Service ('SENS') on 2 March 2022, trade during Hl was severely impacted by the extended lockdowns in Australia, and to a lesser extent by the civil unrest in South Africa. This, coupled with the absence of JobKeeper allowances in Australia and rent relief, which supported the prior year base, the profit on sale of the Bourke Street Men's and Elizabeth Street properties, as well as lease exit and modification gains, makes the full year trading result non-comparable to that of the prior year. Earnings per share l'EPS') was 387.4cps compared to 435.1cps for the prior year, while headline EPS ('HEPS) and adjusted diluted HEPS increased by 6.5% and 9.7% over the prior year to 398.9cps and 374.9cps, respectively. Adjusted diluted HEPS in H2 grew by 43.8% on the prior year. The Group ended the year with a robust balance sheet and a net cash position of R229 million. Solid working capital management and a focus on capex prioritisation resulted in cash conversion exceeding 100%, generating Free Cash Flow of 448.3cps. This supported a share buyback of R1.5 billion over the months of June and July 2022 and a reinstatement of the Woolworths SA and Country Road Group dividend at a 70% payout ratio. During the year, the Board of David Jones declared a special dividend to WHL of A$90 million (approximately R1 billion), with these proceeds utilised to reduce debt in South Africa. Given that David Jones exceeded its cash forecast for the year, a further A$50 million of capital is planned to be returned to WHL, post year-end. SOUTH AFRICA WOOLWORTHS FASHION, BEAUTY AND HOME ('FBH') The FBH business grew H2 turnover and concession sales by 6.5%, with full-priced sales growing by 8.8%, supported by improved product resonance, market share gains in our 'must win' categories, and a stronger performance from the rest of Africa. Sales for the full year grew by 5.4% and by 7.3% in comparable stores, while trading space declined by 4.5%, supporting a double-digit increase in trading densities. Price movement averaged 6.0% over the full year and remains positively impacted by reduced markdown. Online sales grew by 13.2% and contributed 4.4% to South African sales. Gross profit margin increased by 210bps to 47.6%. Expense growth was contained to 1.8%, supported by a 1.7% decline in store costs, as a result of our space reduction and cost optimisation initiatives. Adjusted operating profit increased by 48.7% to R1 610 million, resulting in an operating margin of 11.9% for the year, compared to 8.4% in the prior year. WOOLWORTHS FOOD The Woolworths Food business grew turnover and concession sales in H2 by 4.6%, with trading momentum improving throughout the period, as Covid-19 base effects eased. Sales for the full year grew by 4.2%, and by 3.1% in comparable stores, reflecting the impact of the high base and the return to out-of-home consumption, an increasingly competitive backdrop, and low product inflation across our key categories. Price movement averaged 3.5% for the full year, with underlying product inflation at 3.9%, reflecting continued price investment. Space grew by 1.8% relative to the prior year. Online sales increased by 45.4%, contributing 3.2% of South African sales, assisted by the further rollout of our on-demand online offering. Gross profit margin decreased by 50bps to 24.0%, due to growth in online sales, supply chain costs and a level of price investment. Expenses grew by 5.7%, primarily reflecting investment in initiatives, including online. Adjusted operating profit grew by 0.4% in H2, with full year profit declining by 3.9% to R2 893 million, returning an operating profit margin of 7.3% for the year, compared to 7.9% in the prior year. WOOLWORTHS FINANCIAL SERVICES ('WFS') The Woolworths Financial Services book reflects a year-on- year increase of 6.8% at 30 June 2022, driven by demand and a recovery in post Covid-19 spend. The impairment rate for the year ended 30 June 2022 improved to 4.7%, compared to 5.3% in the prior year, reflecting strong collections and continued strength of the book. Return on equity increased to 18.4%, from 13.6% in the prior year. AUSTRALIA AND NEW ZEALAND As mentioned previously, trade in HI was significantly impacted by government-enforced restrictions across the region which required the closure of stores representing more than 70% of our brick-and-mortar sales for an extended period. In H2, strong consumer demand and our focus on trade resulted in a healthy rebound in sales. DAVID JONES ('DJ') DJ turnover and concession sales declined by 2.6% for the full year and by 2.5% in comparable stores, but grew by 4.3% in H2, after the easing of lockdown restrictions. In line with our space optimisation initiatives, trading space reduced by a further 2.6% relative to the prior year. Online sales increased by 28.7% and contributed 22.8% to total sales over the full year. Gross profit margin was maintained at 35.2%, notwithstanding the clearance of H1 inventory build- up. Expenses declined by 3.6%, driven by the successful execution of cost-out initiatives and the rationalisation of the DJ food offering. Adjusted operating profit in H2 grew by 85.5% to A$52.5 million. For the full year, adjusted operating profit declined by 0.6% on the prior year to A$83.7 million, returning an operating profit margin of 4.1%, compared to 4.0% in the prior year. This was achieved despite Covid-19 related government support and rent concessions in the prior year base. COUNTRY ROAD GROUP ('CRG'). CRG sales grew by 9.0% and by 11.3% in comparable stores for H2, resulting in positive full-year sales growth of 3.1% and 4.0%, respectively, notwithstanding a further 8.1% reduction in trading space. This result was driven primarily by a strong performance from the Country Road, Trenery and Politix brands, following the successful launch of new ranges and the ongoing focus on brand and product positioning. Online sales increased by 4.6% and contributed 31.6% to total sales for the year. Gross profit margin declined by 130bps to 59.5%, as a result of increased clearance sales following the extended lockdown, coupled with higher freight costs arising from global supply chain constraints. Expenses increased by 8.2%, as a result of the prior year impact of JobKeeper subsidy and rent rebates. Adjusted operating profit in H2 grew by 18.6% to A$72.1 million. For the full year, adjusted operating profit was 22.3% lower at A$120.2 million, returning an operating profit margin of 11.1% compared to 14.7% in the prior year. OUTLOOK The global macro environment remains volatile, with rising inflation and interest rates posing a headwind to the outlook for economic growth. Whilst this impact on Australian consumer spend should be somewhat mitigated by strong household balance sheets and high employment, South African consumption faces high unemployment and severe energy shortages. Global supply chain uncertainties and elevated freight costs have been exacerbated by recent global events, placing significant upward pressure on raw material availability and input pricing. Notwithstanding this backdrop, the current momentum of our apparel businesses is expected to continue, and our Food business is expected to deliver a solid underlying performance whilst investing in key initiatives. We have a robust balance sheet, and significant self-help opportunities across our businesses to grow both revenue and profitability, and are allocating capital accordingly to enhance the overall returns profile of our Group. Any reference to future financial performance included in this announcement has not been reviewed or reported on by the Group's external auditors and does not constitute an earnings forecast. H Brody Chairman Cape Town 30 August 2022 R Bagattini Group Chief Executive Officer WHL 4/2022 WHL 5/2022#5WHL FINANCIAL OVERVIEW COMMENTARY SUMMARY OF THE AUDITED GROUP RESULTS DIVIDEND DECLARATION The Board of Directors of WHL ('Board') has taken a decision to declare a final gross cash dividend per ordinary share I'dividend'), based on a pay-out ratio of 70% of second half headline earnings of the combined Woolworths South Africa business segments (FBH, Food and WFS) as well as Country Road Group. Notice is hereby given that the Board has declared a final dividend of 149.0 cents (119.2 cents net of dividend withholding tax) for the 52 weeks ended 26 June 2022, being a 125.8% increase on the prior year's 66.0 cents. This brings the total dividend for the year to 229.5 cents, representing a 247.7% increase on the prior year's total dividend of 66.0 cents. The dividend has been declared from reserves and therefore does not constitute a distribution of 'contributed tax capital' as defined in the Income Tax Act, 58 of 1962. A dividend withholding tax of 20% will be applicable to all shareholders who are not exempt. The issued share capital at the declaration date is 1024 671 335 ordinary shares. The salient dates for the dividend will be as follows: Last day of trade to receive a dividend Tuesday, 13 September 2022 Shares commence trading 'ex' dividend Record date Payment date Wednesday, 14 September 2022 Friday, 16 September 2022 Monday, 19 September 2022 Share certificates may not be dematerialised or rematerialised between Wednesday, 14 September 2022 and Friday, 16 September 2022, both days inclusive. Ordinary shareholders who hold dematerialised shares will have their accounts at their CSDP or broker credited or updated on Monday, 19 September 2022. Where applicable, dividends in respect of certificated shares will be transferred electronically to shareholders' bank accounts on the payment date. Where the transfer secretaries do not have the banking details of any certificated shareholders, the cash dividend will be held in trust by the transfer secretaries. pending receipt of the relevant certificated shareholder's banking details after which the cash dividend will be paid via electronic transfer into the personal bank account of the certificated shareholder. CA Reddiar Group Company Secretary Cape Town 30 August 2022 CHANGES TO THE BOARD OF DIRECTORS As announced on SENS on 29 August 2022, Mr Robert Collins was appointed as an independent Non-executive Director of WHL, with effect from 1 October 2022. Mr Collins spent over 27 years at John Lewis Partnership Plc, holding various management roles, including managing director of Waitrose until 2020. The Board looks forward to welcoming Rob to the Group. As announced on SENS on 7 July 2022, Ms Nombulelo (Pinky) Moholi was appointed as the Lead Independent Director of the Board, with effect from 7 July 2022. Ms Moholi has deep knowledge of the WHL Group, and extensive Board experience. The Board looks forward to Ms Moholi's contribution in her expanded role. WHL 6/2022 DIRECTORATE & STATUTORY INFORMATION □ < 7/27 >#6WHL FINANCIAL OVERVIEW COMMENTARY SUMMARY OF THE AUDITED GROUP RESULTS DIRECTORATE & STATUTORY INFORMATION SUMMARY OF THE AUDITED GROUP RESULTS CONDENSED CONSOLIDATED GROUP STATEMENT OF COMPREHENSIVE INCOME CONDENSED CONSOLIDATED GROUP STATEMENT OF FINANCIAL POSITION CONDENSED CONSOLIDATED GROUP STATEMENT OF CASH FLOWS CONDENSED CONSOLIDATED GROUP STATEMENT OF CHANGES IN EQUITY CONDENSED CONSOLIDATED SEGMENTAL ANALYSIS NOTES TO THE CONDENSED CONSOLIDATED RESULTS D 9/27 >#7WHL FINANCIAL OVERVIEW COMMENTARY CONDENSED CONSOLIDATED GROUP STATEMENT OF COMPREHENSIVE INCOME SUMMARY OF THE AUDITED GROUP RESULTS DIRECTORATE & STATUTORY INFORMATION < 11/27 > CONDENSED CONSOLIDATED GROUP STATEMENT OF FINANCIAL POSITION Audited Audited Notes 52 weeks to 26 Jun 2022 Rm 52 weeks to 27 Jun 2021 Rm % change Audited At 26 Jun Notes 2022 Rm Restated* Audited At 27 Jun 2021 Rm Revenue Turnover Cost of sales Gross profit Other revenue Expenses Store costs Other operating costs Operating profit from core trading activities* Profit on sale of property in Australia 2 82 255 80 942 1.6 ASSETS 80 067 78 763 1.7 Non-current assets 39 953 40 105 50 881 49 816 2.1 Property, plant and equipment 6 9 190 9 315 29 186 28 947 0.8 Intangible assets 6 7 451 7 135 2 121 2.096 1.2 24 534 24 311 0.9 Right-of-use assets. 11 18 891 19 116 16 865 17 512 (3.7) Investment in joint ventures 945 893 7.669 6.799 12.8 Other loans 92 100 Derivative financial instruments 10 56 13 6 773 6 732 0.6 492 (100.0) Deferred tax 3 328 3 533 Lease exit and modification gains 11 Impairment of assets 259 121 591 (56.2) Current assets 16 126 15 483 364 (66.8) Operating profit before net finance costs* Investment income Finance costs 6 911 67 1953 7 451 (7.2) Inventories 8.709 8 501 83 (19.3) 2 502 (21.9) Profit before earnings from joint ventures 5 025 5 032 (0.1) Earnings from joint ventures Profit before tax Tax expense Profit for the year Other comprehensive income Amounts that may be reclassified to profit or loss Fair value adjustments on financial instruments, after tax Exchange differences on translation of foreign subsidiaries Amounts that may not be reclassified to profit or loss Post-retirement medical benefit liability: actuarial gain, after tax Other comprehensive income for the year 165 118 39.8 5 190 5 150 0.8 Trade and other receivables Derivative financial instruments Tax 1 703 1 277 10 314 33 26 48 Cash and cash equivalents 5 374 5 624 1473 987 49.2 TOTAL ASSETS 56 079 55 588 3 717 4 163 (10.7) EQUITY AND LIABILITIES TOTAL EQUITY 545 171 (392) (1 027) Equity attributable to shareholders of the parent Non-controlling interests 15 4 731 (1 415) Total comprehensive income for the year 4 448 2 748 Lease liabilities Profit attributable to: Shareholders of the parent Non-controlling interests Shareholders of the parent 3 717 4 163 Non-current liabilities Interest-bearing borrowings Post-retirement medical benefit liability Provisions and other payables 3 715 4 161 2 2 Total comprehensive income attributable to: 4 448 2 748 4 446 2 746 Non-controlling interests 2 2 Earnings per share (cents) 3 387.4 435.1 (11.0) Derivative financial instruments Deferred tax Current liabilities Trade and other payables Provisions Diluted earnings per share (cents) 3 381.4 428.7 (11.0) Lease liabilities Number of shares in issue (millions) 945.7 956.7 (1.1) Derivative financial instruments Weighted average number of shares in issue (millions) 958.9 956.3 0.3 Tax Overdrafts and interest-bearing borrowings ADDITIONAL EARNINGS MEASURES Audited Audited TOTAL LIABILITIES 52 weeks 52 weeks TOTAL EQUITY AND LIABILITIES to 26 Jun to 27 Jun Notes 2022 2021 % change Net asset book value per share (cents) * Headline earnings per share (cents) 4 398.9 374.4 6.5 Refer to note 8 for details of the restatement. Diluted headline earnings per share (cents) 4 392.7 368.9 6.5 Adjusted headline earnings per share (cents) 5 380.9 346.6 9.9 Adjusted diluted headline earnings per share (cents) 5 374.9 341.6 9.7 Comparative information has been updated by renaming the subtotal "Operating profit" to "Operating profit from core trading activities" and adding the subtotal "Operating profit before net finance costs", arising from the JSE review process. 11 800 9 328 11 775 9 305 25 23 29 880 31 305 4 813 5 963 11 24 220 24 608 359 363 485 361 10 10 3 - 14 399 14 955 10 211 9 625 1 260 1 308 11 2 564 2 586 10 53 369 28 390 283 677 44 279 46 260 56 079 55 588 1 245 973 WHL 10/2022 WHL 11/2022#8SUMMARY OF THE COMMENTARY AUDITED GROUP RESULTS WHL FINANCIAL OVERVIEW CONDENSED CONSOLIDATED GROUP STATEMENT OF CASH FLOWS DIRECTORATE & STATUTORY INFORMATION CONDENSED CONSOLIDATED GROUP STATEMENT OF CHANGES IN EQUITY 13 / 27 > Audited Notes 52 weeks to 26 Jun 2022 Rm Audited 52 weeks to 27 Jun 2021 Rm Cash flow from operating activities Cash inflow from trading Working capital movements Cash generated by operating activities Investment income received Finance costs paid Tax paid Cash generated by operations 11 503 99 11 393 Shareholders' interest at the beginning of the year 256 11 602 67 (1988) 11 649 83 (2 595) (1 673) (1 108) Cloud computing costs policy change (refer to note 8). Shareholders' interest at the beginning of the year (restated) Movements for the year: Audited Total Share- holders of the parent Rm Non- controlling interests Rm 52 weeks to 26 Jun 2022 Rm Share- holders of the parent Rm Non- Audited Total 52 weeks controlling interests Rm to 27 Jun 2021 Rm 9 305 23 9 328 6 489 21 6 510 (266) (266) 9 305 23 9 328 6 223 21 6 244 8 008 8 029 Profit for the year Dividends received from joint ventures Dividends paid to ordinary shareholders Net cash inflow from operating activities 112 (1 417) 6 703 8 029 Cash flow from investing activities Net cash (outflow)/inflow from investing activities Cash flow from financing activities Net acquisition of Treasury shares Shares repurchased Lease liabilities repaid Borrowings raised Borrowings repaid Investment in property, plant and equipment and intangible assets to maintain operations Investment in property, plant and equipment and intangible assets to expand operations Proceeds on disposal of property, plant and equipment and intangible assets Other loans advanced (1 066) (1 110) (794) (315) 7 (2) (1 855) 7 356 (21) 5 910 Other comprehensive income Total comprehensive income for the year Share-based payments Net acquisition of Treasury shares Shares repurchased and cancelled Transfer of Financial Instrument Revaluation Reserve to inventories Dividends to ordinary shareholders Shareholders' interest at the end of the year 4 446 12 || 1 4 448 327 Dividend per ordinary share (cents) Net cash outflow from financing activities 7 (19) (904) (70) (2 741) (3 048) 500 (1 437) (10 898) (5 101) (13 516) (253) Dividend cover (based on headline earnings) 327 (19) (759) (759) (108) (1 417) (108) (1 417) 156 156 11775 25 11 800 9 305 23 9 328 229.5 1.77 66.0 5.69 3 715 2 731 3 717 731 4 161 2 4 163 (1 415) (1 415) 2 746 2 250 2 748 250 (19) (70) (70) 2 I (Decrease)/increase in cash and cash equivalents Net cash and cash equivalents at the beginning of the year Effect of foreign exchange rate changes Net cash and cash equivalents at the end of the year 5 484 110 5 341 423 5 437 (376) 5 484 WHL 12/2022 WHL 13/2022#9WHL FINANCIAL OVERVIEW COMMENTARY SUMMARY OF THE AUDITED GROUP RESULTS DIRECTORATE & STATUTORY INFORMATION CONDENSED CONSOLIDATED SEGMENTAL ANALYSIS 〈コ 15 / 27 > Restated* Audited Notes 52 weeks to 26 Jun 2022 Rm Audited 52 weeks to 27 Jun 2021 Rm Audited 52 weeks Restated Audited 52 weeks to 26 Jun to 27 Jun 2022 2021 % Rm Rm change REVENUE Turnover Woolworths Fashion, Beauty and Home Woolworths Food Woolworths Logistics David Jones TOTAL ASSETS 56 079 55 588 80 067 78 763 1.7 Woolworths* 19 302 19 279 13 502 12 855 5.0 David Jones 24 373 24 423 39 240 37 743 4.0 Country Road Group 11 114 10 905 637 574 11.0 Woolworths Financial Services 14 705 15 569 Country Road Group 11 983 12 022 (5.5) (0.3) Treasury 933 357 883 98 Other revenue and investment income 2 188 2 179 0.4 INVENTORIES Woolworths* 8 709 8 501 4453 4 458 Woolworths Fashion, Beauty and Home 112 14 >100 Woolworths Food David Jones Country Road Group Treasury Intragroup Total Group GROSS PROFIT Woolworths Fashion, Beauty and Home Woolworths Food David Jones Country Road Group Intragroup Total Group 182 84 >100 2 299 2 544 (9.6) 33 34 (2.9) Woolworths* 50 70 (28.6) 14 (488) (567) (13.9) 82 255 80 942 1.6 PROFIT BEFORE TAX Woolworths Fashion, Beauty and Home Woolworths Food Woolworths Financial Services 6 384 5 852 9.1 9 398 9 252 1.6 5.961 6 267 (4.9) 7 143. 7 302 (2.2) 14 300 274 9.5 Woolworths* 29 186 28 947 0.8 David Jones Country Road Group David Jones Country Road Group TOTAL LIABILITIES David Jones Country Road Group Treasury APPROVED CAPITAL COMMITMENTS Woolworths* David Jones Country Road Group CASH GENERATED BY OPERATING ACTIVITIES 2 966 2 737 1 290 1 306 44 279 46 260 12 914 12 446 20 800 20 223 5 369 6 383 5 196 7 208 3 164 2 835 2 192 1 854 339 601 633 380 11 602 11 649 6 713 6 277 2 468 1 897 2 591 3 481 Treasury (170) (6) 1 297 715 81.4 2 656 2 762 (3.8) * Includes Woolworths Fashion, Beauty and Home, Woolworths Food and Woolworths Logistics. 164 118 39.0 David Jones Country Road Group 203 146 39.0 1 162 1 551 (25.1) Treasury Total Group - adjusted Adjustments Lease exit and modification gains (410) (724) (43.4) 5 072 4 568 11.0 118 582 259 591 SA civil unrest costs, net of insurance proceeds 17 Restructure and store exit costs (60) (123) Unrealised foreign exchange gains/llosses) 23 (14) Impairment of assets (121) (364) Profit on sale of property in Australia 492 Total Group - unadjusted 5 190 5 150 0.8 Woolworths Fashion, Beauty and Home 1 338 713 87.7 Woolworths Food 2 647 2 754 (3.9) Woolworths Financial Services 164 118 39.0 David Jones 298 845 (64.7) Country Road Group 1 153 1 468 (21.5) Treasury (410) (748) (45.2) Comparative information has been restated to reallocate IFRS 16 finance costs from the Treasury segment to the reportable business segments. WHL 15/2022#10WHL FINANCIAL OVERVIEW COMMENTARY SUMMARY OF THE AUDITED GROUP RESULTS DIRECTORATE & STATUTORY INFORMATION <コ 17/27 > NOTES TO THE CONDENSED CONSOLIDATED RESULTS 1. STATEMENT OF COMPLIANCE AND BASIS OF PREPARATION The condensed consolidated financial statements are prepared in accordance with the requirements of the JSE Limited Listings Requirements and Debt Listings Requirements for provisional reports, and the requirements of the Companies Act of South Africa. The Listings Requirements and Debt Listings Requirements require provisional reports to be prepared in accordance with the framework concepts and the measurement and recognition requirements of International Financial Reporting Standards (IFRS) and the SAICA Financial Reporting Guides, as issued by the Accounting Practices Committee and Financial Pronouncements, as issued by Financial Reporting Standards Council and to also, as a minimum, contain the information required by IAS 34 Interim Financial Reporting. The accounting policies applied in the preparation of the condensed consolidated financial statements are in terms of International Financial Reporting Standards and are consistent with those applied in the preparation of the Group Annual Financial Statements for the 52-week period to 26 June 2022 and with the prior year, except for the change in accounting policies adopted, as detailed in note 8. The condensed consolidated financial statements have been prepared on the going concern and historical cost bases, except where otherwise indicated. The presentation currency is the South African rand, rounded to the nearest million, except where otherwise indicated. The condensed consolidated financial statements have been prepared under the supervision of the Group Finance Director, Reeza Isaacs CAISA), and are the full responsibility of the directors. For details on the Group's performance, including the impact of the lockdowns in Australia and the civil unrest in South Africa, refer to the Commentary on performance. 2. REVENUE Turnover Fashion, Beauty and Home. Food Logistics services and other Other revenue Rentals Concession sales commission Insurance recoveries Audited Audited 52 weeks to 26 Jun 2022 Rm 52 weeks to 27 Jun 2021 Rm 80 067 78 763 39 881 39 910 39 549 38 279 637 574 4. HEADLINE EARNINGS Reconciliation of headline earnings Basic earnings attributable to shareholders of the parent Profit on sale of property in Australia Net loss on disposal of property, plant and equipment and intangible assets Impairment of property, plant and equipment, intangible assets and right-of-use assets. Tax impact of adjustments Headline earnings Audited 52 weeks to 26 Jun 2022 Rm Audited 52 weeks to 27 Jun 2021 Rm % change 3 715 4 161 (10.7) (492) 32 14 121 (43) 364 (467) 3 825 3 580 6.8 Headline earnings is calculated by starting with the Basic earnings number in terms of IAS 33 and then excluding all re-measurements that have been identified in The South African Institute of Chartered Accountants' Headline Earnings Circular 1/2021. 5. NON-IFRS MEASURES: ADJUSTED HEADLINE EARNINGS Adjusted headline earnings is calculated by excluding items from headline earnings that have attributes of either being of a non-recurring nature, volatile, having a material impact on earnings or not incurred in the ordinary course of business, which would otherwise have not been considered under IAS 33: Earnings per share or the SAICA guideline on headline earnings. Management believes that the use of an adjusted headline earnings measure is helpful to users of financial statements and investors by providing a more meaningful measure of sustainable earnings or the quality of earnings and thereby improve performance comparisons between different reporting periods. The methodology of determining adjustments is applied consistently over the different reporting periods. Adjusted headline earnings is also one of the performance conditions applicable to the Group's share incentive schemes. 9 2 121 2 096 9 1 907 2 034 150 Royalties Investment income Interest earned from cash and investments 55 53 53 Reconciliation of adjusted headline earnings Headline earnings Adjustments Lease exit and modification gains 67 83 SA civil unrest costs, net of insurance proceeds* 67 83 Restructure and store exit costs 82 255 80 942 Unrealised foreign exchange (gains)/losses Revenue from contracts with customers has been further disaggregated by nature of business and retail chain. Refer to Condensed consolidated segmental analysis. Rentals and investment income fall outside the scope of IFRS 15. Investment income is measured in terms of the effective interest method in accordance with IFRS 9. (Tax losses utilised)/deferred tax on assessed losses not recognised Tax impact of adjustments Adjusted headline earnings 52 weeks to 26 Jun 2022 52 weeks to 27 Jun Rm 2021 Rm % change 3 825 3 580 6.8 (173) (265) (259) (591) (17) 60 123 (23) 14 (5) 33 71 156 3 652 3 315 10.2 3. EARNINGS PER SHARE The difference between earnings per share and diluted earnings per share is due to the impact of unexercised options under the Group's share incentive schemes (refer to note 71. * Related to the unrest in KZN and parts of Gauteng in July. KPMG Inc. have issued a reporting accountant's report on the non-IFRS measures, which is available for inspection at the Group's registered offices. 6. PROPERTY, PLANT AND EQUIPMENT AND INTANGIBLE ASSETS The Group acquired property, plant and equipment at a fair value of R1 264 million (2021: R974 million) and intangible assets at a fair value of R551 million (2021: R451 million). WHL 16/2022 WHL 17 / 2022#11WHL FINANCIAL OVERVIEW COMMENTARY SUMMARY OF THE AUDITED GROUP RESULTS DIRECTORATE & STATUTORY INFORMATION NOTES TO THE CONDENSED CONSOLIDATED RESULTS (CONTINUED) 7. ISSUE AND PURCHASE OF SHARES 919 267 (2021: 2 976 552) ordinary shares totalling R54 million (2021: R122 million) were purchased from the market by Woolworths Proprietary Limited for the purposes of share incentive schemes and are held as treasury shares by the Group. 557 444 (2021: 1356 675) ordinary shares totalling R35 million (2021: R52 million) were sold to the market in terms of the Group's Restricted Share Plan. 1355 370 (2021: 871 618) ordinary shares totalling R74 million (2021: R54 million) previously purchased were allocated to employees in terms of the Group's Restricted Share Plan. 2 106 541 (2021: 1 400 582) ordinary shares totalling R124 million (2021: R52 million) were issued and allocated to employees in terms of the Group's other share incentive schemes. 14 049 287 (2021: nil) ordinary shares totalling R759 million (2021: nil) were repurchased from the open market on the JSE and cancelled. These ordinary shares were acquired at an average price of R54.03 per share. 8. CHANGE IN ACCOUNTING POLICIES IFRIC AGENDA DECISION: CONFIGURATION OR CUSTOMISATION COSTS IN A CLOUD COMPUTING ARRANGEMENT In April 2021, the IFRS Interpretations Committee (IFRIC) published an Agenda Decision for configuration and customisation costs incurred related to implementing Software as a Service (SaaS) arrangements. The IFRIC observed that, if an intangible asset cannot be recognised for costs incurred as a result of customisation or configuration, the costs should be expensed as services are received. The Group has retrospectively changed its accounting policy relating to the accounting for configuration and customisation costs incurred in a SaaS arrangement. The Group reviewed all existing and past arrangements to quantify the impact of previously capitalised costs that should have been expensed, arising from the clarity detailed in the IFRIC Agenda Decision. As a result, previously reported Intangible assets, Deferred tax assets, Trade and other receivables and Equity attributable to shareholders of the parent at 27 June 2021 have been restated, as follows: CONDENSED CONSOLIDATED GROUP STATEMENT OF FINANCIAL POSITION (EXTRACT) 9. PRO FORMA FINANCIAL INFORMATION This note sets out the illustrative impact on the financial information as follows: 〈コ 19/27 In note 9.1: for the 52 weeks to 26 Jun 2022, Turnover and concession sales have been reported against the prior year reported 52 weeks to 27 June 2021. These are important for understanding underlying business performance and are described as "Non-IFRS financial information". In note 9.2: for the 52 weeks to 26 Jun 2022, adjustments, as detailed in supplementary notes 2 and 3, have been made (respectively, the 'Non-IFRS financial information'). These are important for understanding underlying business performance and are described as "Non-IFRS financial information". In note 9.3.1: for the 52 weeks to 26 Jun 2022, Turnover and concession sales, Pro forma segmental contribution before interest and tax, Gross profit and Expenses have been shown on a constant currency basis. In note 9.3.2: for the 52 weeks to 26 Jun 2022, certain Group statement of financial position items have been shown on a constant currency basis. In note 9.4: for the 52 weeks to 26 Jun 2022, Free cash flow per share is presented. The Non-IFRS financial information and constant currency information (collectively the 'pro forma financial information') is presented in accordance with the JSE Limited Listings Requirements, which requires that pro forma financial information be compiled in terms of the JSE Limited Listings Requirements and the SAICA Guide on Pro Forma Financial Information. The pro forma financial information is the responsibility of the Group's directors and is based on the Group Annual Financial Statements for the 52 weeks to 26 June 2022 and 52 weeks to 27 June 2021. The pro forma financial information has been prepared for illustrative purposes only and, because of its nature, may not fairly present the Group's financial position, results of operations or cash flows. 9.1 TURNOVER AND CONCESSION SALES Intangible assets Deferred tax assets Trade and other receivables Equity attributable to shareholders of the parent Reported Audited Restated Audited At 27 Jun 2021 Rm Increase/ (decrease) Rm At 27 Jun 2021 Rm 7 546 (411) 7 135 3 417 1 248 116 29 3 533 1277 9 571 (266) 9 305 The restatement has had no material impact on the Condensed Consolidated Group Statement of comprehensive income, Condensed Consolidated Group Statement of cash flows, nor on Earnings per share and Headline earnings per share for the 52 weeks to 27 June 2021 comparative period. The impact of this change in accounting policy on the financial results for the 52-week period ended 28 June 2020 is not materially different from the information presented above. WHL 18 / 2022 Turnover Concession sales Turnover and concession sales Notes Audited 52 weeks to 26 Jun Audited 52 weeks to 27 Jun 2022 2021 (1) Rm (1) Rm % change 80 067 78 763 1.7 6 953 7 094 87 020 85 857 (2.0) 1.4 1. The '52 weeks to 26 Jun 2022' and '52 weeks to 27 Jun 2021' turnover financial information has been extracted, without adjustment, from the Condensed Consolidated Group Statement of comprehensive income for the 52 weeks to 26 Jun 2022 and 52 weeks to 27 Jun 2021, as presented in the Summary of the Audited Group Results for the 52 weeks ended 26 June 2022. The Concession sales information has been extracted from the Group's accounting records. This illustrates the impact on financial information by including the turnover of concession operators of goods sold (concession sales) within the Group's stores. Concession sales are the sale of goods by concession operators and are not included in revenue, and have been extracted from the Group's accounting records. WHL 19/2022 >#12SUMMARY OF THE AUDITED GROUP RESULTS DIRECTORATE & STATUTORY INFORMATION WHL FINANCIAL OVERVIEW COMMENTARY NOTES TO THE CONDENSED CONSOLIDATED RESULTS (CONTINUED) 9. PRO FORMA FINANCIAL INFORMATION (CONTINUED) 9.3 CONSTANT CURRENCY INFORMATION 9.3.1 GROUP STATEMENT OF COMPREHENSIVE INCOME ITEMS 21/27 > 9.2 ADJUSTMENT OF OPERATING PROFIT AND PROFIT BEFORE TAX Audited 52 weeks Pro forma 52 weeks Audited 52 weeks Pro forma 52 weeks to 26 Jun Adjust to 26 Jun 2022 -ments 2022 to 27 Jun 2021 Adjust -ments to 27 Jun 2021 (1) Rm (2) Rm (4) Rm (1) Rm (3) Rm (4) Pro forma 52 weeks to 26 Jun 2022 Rm Audited 52 weeks to 27 Jun 2021 (3) Rm % change Rm Segmental contribution Turnover and concession sales' before interest and tax 7 118 (118) 7.000 7 581 (643) 6 938 Profit before tax 5 190 (118) 5072 5 150 (582) 4 568 Pro forma segmental contribution before interest and tax (Adjuted EBIT)² Notes 88 122 7 011 85 857 6 938 2.6 1.1 Notes 1. The '52 weeks to 26 Jun 2022' and '52 weeks to 27 Jun 2021' financial information has been extracted, without adjustment, from the Condensed Consolidated Group Statement of comprehensive income for the 52 weeks to 26 Jun 2022 and 52 weeks to 27 Jun 2021, as presented in the Summary of the Audited Group Results for the 52 weeks ended 26 June 2022. Segmental contribution before interest and tax comprises Profit before tax, as illustrated on the Condensed Consolidated Group Statement of comprehensive income for the 52 weeks to 26 Jun 2022 and 52 weeks to 27 Jun 2021, and excludes Investment income of R67 million (2021: R83 million), Finance costs of R1 953 million (2021: R2 502 million) and Group entity costs of R42 million (2021: R12 million). 2. Segmental contribution before interest and tax adjustments for the '52 weeks to 26 Jun 2022' comprise of Lease exit and modification gains of R259 million, SA civil unrest costs, net of insurance proceeds of R17 million, Restructure and store exit costs of R60 million, Unrealised foreign exchange gains of R23 million and Impairment of assets of R121 million, which results in an Adjusted segmental contribution before interest and tax. Profit before tax adjustments include all of the aforementioned adjustments, which results in an Adjusted profit before tax. 3. Segmental contribution before interest and tax adjustments for the '52 weeks to 27 Jun 2021' comprise of Lease exit and modification gains of R591 million, Restructure and store exit costs of R123 million, Unrealised foreign exchange losses of R14 million, Impairment of assets of R364 million, Profit on sale of property in Australia of R492 million and exclude abnormal finance costs of R61 million, which results in an Adjusted Segmental contribution before interest and tax. Profit before tax adjustments include all of the aforementioned adjustments, as well as abnormal finance costs of R61 million, which results in an Adjusted profit before tax. 4. The 'Pro forma 52 weeks to 26 Jun 2022' and the 'Pro forma 52 weeks to 27 Jun 2021' column reflects the pro forma financial information after adjusting for the items included in column 2 (2021: column 3), which results in an Adjusted segmental contribution before interest and tax (also referred to as Adjusted EBIT) and Adjusted profit before tax. 1. Turnover and concession sales constant currency information has been presented to illustrate the impact of changes in the Group's major foreign currency, the Australian dollar. In determining the constant currency Turnover and concession sales growth rate, Turnover and concession sales denominated in Australian dollars for the current year have been adjusted by application of the aggregated monthly average Australian dollar exchange rate for the prior year. The aggregated monthly average Australian dollar exchange rate is R11.06/A$ for the current year and R11.43/A$ for the prior year. The foreign currency fluctuations of the Group's rest of Africa operations are not considered material and have therefore not been applied in determining the constant currency Turnover and concession sales growth rate. 2. Pro forma segmental contribution before interest and tax (Adjusted EBIT) constant currency information has been presented to illustrate the impact of changes in the Group's major foreign currency, the Australian dollar. In determining the constant currency Pro forma segmental contribution before interest and tax (Adjusted EBIT) growth rate, Pro forma segmental contribution before interest and tax (Adjusted EBIT) denominated in Australian dollars for the current year has been adjusted by application of the aggregated monthly average Australian dollar exchange rate for the prior year. The aggregated monthly average Australian dollar exchange rate is R11.44/A$ for the current year and R11.42/A$ for the prior year. The foreign currency fluctuations of the Group's rest of Africa operations are not considered material and have therefore not been applied in determining the constant currency Pro forma segmental contribution before interest and tax (Adjusted EBIT) growth rate. 3. The Turnover and concession sales and Pro forma segmental contribution before interest and tax (Adjusted EBIT) has been extracted from notes 9.1 and 9.2 above, respectively. WHL 21/2022#13SUMMARY OF THE AUDITED GROUP RESULTS DIRECTORATE & STATUTORY INFORMATION WHL FINANCIAL OVERVIEW COMMENTARY NOTES TO THE CONDENSED CONSOLIDATED RESULTS (CONTINUED) 9. PRO FORMA FINANCIAL INFORMATION (CONTINUED) 9.3 CONSTANT CURRENCY INFORMATION (CONTINUED) 9.3.2 GROUP STATEMENT OF FINANCIAL POSITION ITEMS AT 26 JUNE 2022 Pro forma At 26 Jun 2022 Audited At 27 Jun 2021 (1) Rm (2) Rm % change 〈コ 23 / 27 9.4 FREE CASH FLOW PER SHARE Free cash flow per share is defined as Free cash flow divided by the Weighted Average Number of Shares in issue (WANOS). Free cash flow is determined in the table below, with the amounts extracted, without adjustment, from the Condensed Consolidated Group Statement of cash flows for the 52 weeks to 26 Jun 2022, as presented in the Summary of the Audited Group Results for the 52 weeks ended 26 June 2022. Audited 52 weeks to 26 Jun 2022 > Rm Assets Property, plant and equipment Cash generated by operations 8.008 9 064 9 315 (2.7) Intangible assets 7 352 7 135 3.0 Right-of-use assets 18 551 19 116 (3.0) Dividends received from joint ventures Investment in property, plant and equipment and intangible assets to maintain operations Proceeds on disposal of property, plant and equipment and intangible assets 112 (1 066) 7 Investment in joint ventures 945 893 5.8 Other loans advanced (2) Inventories 8 609 8 501 1.3 Net acquisition of Treasury shares (19) Trade and other receivables 1 782 1377 29.4 Lease liabilities repaid (2 741) Derivative financial instruments 363 46 >100 Free cash flow 4 299 Deferred tax and tax assets 3 289 3 581 (8.2) WANOS (millions) 958.9 Cash and cash equivalents 5 288 5.624 (6.0) Free cash flow per share (cents) 448.3 Total assets 55 243 55 588 (0.6) KPMG Inc. have issued a reporting accountant's report on the pro forma financial information, which is available for inspection at the Group's registered offices. Equity and liabilities Shareholders' funds 11 581 9 328 24.2 Borrowings and overdrafts 5 096 6 640 (23.3) Lease liabilities 26 294 27 194 (3.3) Other non-current liabilities 838 724 15.7 Derivative financial instruments 53 379 (86.0) Deferred tax and tax liabilities 31 390 (92.1) Trade and other payables and provisions Total equity and liabilities Notes 11 350 10 933 3.8 55 243 55 588 (0.6) 1. The Group Statement of financial position items are at 26 June 2022 and the constant currency information has been determined by application of the closing Australian dollar exchange rate for the prior year to the current year Group Statement of financial position items. The closing Australian dollar exchange rate is R10.99/A$ for the current year and R10.73/A$ for the prior year. 2. The 'At 27 Jun 2021' financial information has been extracted, without adjustment, from the reported 2021 Summary of the Audited Group Results for the 52 weeks ended 27 June 2021. WHL 23/2022#14WHL FINANCIAL OVERVIEW COMMENTARY SUMMARY OF THE AUDITED GROUP RESULTS DIRECTORATE & STATUTORY INFORMATION NOTES TO THE CONDENSED CONSOLIDATED RESULTS (CONTINUED) 10. FAIR VALUE OF FINANCIAL INSTRUMENTS The carrying value of trade and other receivables, trade and other payables and borrowings approximate their fair values. In terms of IFRS 9 Financial Instruments, the Group's derivative financial instruments are measured at fair value. The derivative financial instruments are determined to be Level 2 instruments under the fair value hierarchy as per IFRS 13 Fair value measurement. Derivatives are valued using valuation techniques with market observable inputs, with derivatives being mainly in respect of interest rate swaps and foreign exchange forward contracts. The most frequently applied valuation techniques include forward pricing and swap models, using present value calculations. The models incorporate various inputs, including the credit quality of counterparties, foreign exchange spot and forward rates, interest rate curves and forward rate curves of the underlying index. 11. LEASE EXIT AND MODIFICATIONS GAINS During the year, the Group renegotiated various leases with landlords, particularly within the David Jones segment, related mainly to reduction in lease terms and store closures. As a result, right-of-use assets and lease liabilities were modified by R1.7 billion (2021: R1.5 billion) and R1.3 billion (2021: R2.3 billion), respectively, with lease exit and modifications gains of R259 million (pre-tax) (2021: R591 million) recognised in profit or loss. 12. CAPITAL COMMITMENTS AND CONTINGENT LIABILITIES The Group has contractually committed to acquire a property in South Africa that will be used as a distribution centre, subject to fulfilment of certain conditions, at a cost of R195 million. Group companies are party to legal disputes and investigations that have arisen in the ordinary course of business. Whilst the outcome of these matters cannot readily be foreseen, they are not expected to have any material financial effect. 13. BORROWING FACILITIES Unutilised banking and debt facilities amount to R7 888 million (2021: R7 402 million) as follows: 2022 2021 Rm Rm 7 730 7 285 158 117 7 888 7 402 Committed Uncommitted Total Notes to the value of R2.7 billion (2021: R3.3 billion) are outstanding under the South African Domestic Medium Term Note (DMTN) programme, which is a further source of funding to the Group. The DMTN programme is guaranteed by Woolworths Proprietary Limited and will be used to raise debt on an ongoing basis. Debt facilities of A$74.0 million (2021: A$93.0 million) for Country Road Group (CRG) are secured by Real Property Mortgages and a General Security Deed over the assets of CRG. At 26 June 2022, the facilities are undrawn. A rental bank guarantee of A$25.5 million is in place at 26 June 2022 in David Jones. This facility is secured by Property Mortgages. 14. RELATED-PARTY TRANSACTIONS 〈コ 25 / 27 The Group entered into related-party transactions, the substance of which is disclosed in the Group's 2022 Annual Financial Statements. Intragroup adjustments relate to the sale of concession goods between segments and supply chain distribution adjustments. 15. EVENTS SUBSEQUENT TO THE REPORTING DATE Subsequent to year-end, the Group concluded the Board-approved R1.5 billion share repurchase by purchasing and cancelling 10 813 149 ordinary shares totalling R597 million. In addition, 2 550 000 ordinary shares totalling R145 million, which were repurchased before year-end, were cancelled after year-end. On 30 August 2022, the Board declared a gross cash dividend of 149.0 cents (119.2 cents net of dividend withholding tax) (2021: 66.0 cents) for the 52 weeks ended 26 June 2022 to ordinary shareholders recorded at close of business on Friday, 16 September 2022, to be paid on Monday, 19 September 2022. 16. APPROVAL OF THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS The condensed consolidated financial statements were approved by the Board of Directors on 30 August 2022. 17. AUDIT OPINION The condensed consolidated financial statements have been extracted from the audited Group Annual Financial Statements, but is not in itself audited. The Group Annual Financial Statements were audited by KPMG Inc., who expressed an unmodified opinion thereon. The audited Group Annual Financial Statements and the auditor's report thereon are available for inspection at the Company's registered office. The directors take full responsibility for the preparation of the summarised report and that the financial information has been correctly extracted from the underlying Group Annual Financial Statements. However, the auditor's report does not necessarily report on all the information contained in this announcement. Shareholders are therefore advised that, in order to obtain a full understanding of the nature of the auditor's engagement, they should obtain a copy of the auditor's report, together with the accompanying financial information from the Company's registered office. WHL 24/2022 WHL 25/2022 >#15WHL FINANCIAL OVERVIEW COMMENTARY SUMMARY OF THE AUDITED GROUP RESULTS DIRECTORATE & STATUTORY INFORMATION DIRECTORATE AND STATUTORY INFORMATION NON-EXECUTIVE DIRECTORS Hubert Brody (Chairman), Nombulelo Moholi (Lead Independent Director), Christopher Colfer (Canadian), Belinda Earl (British), David Kneale (British), Phumzile Langeni, Thembisa Skweyiya, Clive Thomson EXECUTIVE DIRECTORS Roy Bagattini (Group Chief Executive Officer), Reeza Isaacs (Group Finance Director), Sam Ngumeni (Group Chief Operating Director) GROUP COMPANY SECRETARY Chantel Reddiar DEBT OFFICER Ian Thompson REGISTRATION NUMBER 1929/001986/06 LEI 37890095421E07184E97 SHARE CODE SHARE ISIN ZAE000063863 BOND COMPANY CODE WHLI REGISTERED ADDRESS Woolworths House, 93 Longmarket Street Cape Town 8001, South Africa PO Box 680, Cape Town 8000, South Africa TAX NUMBER 9300/149/71/4 JSE SPONSOR AND DEBT SPONSOR Rand Merchant Bank (A division of FirstRand Bank Limited) TRANSFER SECRETARIES Computershare Investor Services Proprietary Limited 15 Biermann Avenue, Rosebank 2196, South Africa WHL 27 / 27 > Woolworths Summer 2022 WOOLWORTHS DAVID JONES COUNTRY ROAD GROUP#16Empty