Investor Presentaiton
40
Business review
41
11
Annual Report 2023
Woolworths Group
BIGW
Every day's
a big day
BIGW
Sales
BIG W
eCommerce sales decreased 22.2% in F23 to $482 million,
largely driven by a 31.4% decline in H1 as customers
returned to shopping in store and cycling of COVID-driven
online purchasing behaviour. eCommerce sales declined
3.3% in H2 with penetration of 10.1%. The launch of a select
BIG W range on MyDeal in August has seen consistent
sales growth on the platform since launch.
The BIG W store network grew by one store during the
year to 177 stores following the opening of a new BIG W
in Q1 alongside a new Woolworths Supermarket at Town
Hall in Sydney. Sales per square metre increased by 7.9%
due to the strong sales growth in H1.
Gross margin (%) increased 9 bps in F23 to 31.6% driven
by an increase in H1 due to cycling higher markdowns
in the prior year and lower delivery costs due to the
decline in eCommerce sales. H2 gross margin (%)
decreased 87 bps with higher stockloss and increased
promotional activity being partly offset by mix and
category management changes.
CODB (%) declined by 170 bps due to higher sales
growth, the absence of direct COVID costs incurred
in the prior year, and key productivity measures
returning to pre-COVID levels. In H2, CODB (%) was
broadly flat despite higher wage rate increases due
to strong item-based cost control.
Total sales
F23
4,785
F22
CHANGE
4,431
8.0%
EBITDA
348
245
41.6%
Depreciation and
amortisation
(203)
(190)
EBIT
145
55
6.2%
165.3%
Gross margin (%)
31.6
31.5
9 bps
CODB (%)
28.6
30.3 (170) bps
3.0
1.2 180 bps
4,756 4,409
1,424 1,247
11.1
4.6
7.9%
14.2%
6.5 pts
103,061 125,533
(17.9)%
Despite a more challenging H2, F23 EBIT increased
165.3% to $145 million at an EBIT margin of 3.0% with
H2 EBIT declining 63.7% to $11 million. Excluding direct
COVID costs of $16 million in the prior year, F23 EBIT
increased by 104%.
Closing inventory was higher than the prior year with
cost inflation more than offsetting a reduction in units.
Despite the higher inventory, inventory health was strong
with the proportion of aged and quit stock below the
prior year.
ROFE increased 6.5 pts to 11.1% due to higher EBIT more
than offsetting an increase in average funds employed.
During the year, BIG W continued its partnership with the
Australian Literacy and Numeracy Foundation to grow
the Breakfast Library program, supporting 30 schools
each week, with over $220,000 raised in customer
donations during Book Week and the Back to School
campaign. In partnership with Good360, BIG W launched
a national fundraising campaign to support recovery
efforts for Victorian communities impacted by flooding
through donations of essential items to those in need.
BIG W's commitment to a better tomorrow also saw its
Toys for Joy recycling program prevent an estimated
130 tonnes of toys going to landfill in F23.
$4,785M
▲ 8.0% from F22
EBIT
$145M
▲ 165.3% from F22
ROFE
11.1%
▲ 6.5 pts from F22
The trading environment for BIG W changed
significantly between the halves, impacting
financial performance. However, BIG W continued
to make good progress on its strategic agenda.
Trading performance
BIG W's customer metrics remained broadly stable in F23 with Store-
controllable VOC at 83% - in line with Q3 and the prior year. VOC NPS (Store
and Online) ended the year at 62, down three points on Q3 and down two
points on the prior year driven by a decline in eCom NPS. Improving product
availability and wait times for Pick up and Home Delivery orders remains
a priority. Despite the pressure on consumer discretionary spend during the
year, BIG W's continued focus on providing value to customers, including
the launch of new own brand ranges (Openook and Somersault), resulted
in Product and Price VOC improving by one point compared to the prior year.
BIG W's total sales were up 8.0% in F23 to $4,785 million (4-yr CAGR: 6.5%).
Sales growth in H1 of 15.3% (4-yr CAGR: 6.9%) was driven by cycling the prior
year's temporary store closures and customers returning to shop in store
more frequently. In H2, sales growth of -0.3% was broadly flat on prior year
(4-yr CAGR: 6.0%) with the decline in Q4 of 5.7% due to a notable softening
in discretionary spend and to a lesser extent by the timing of Easter. Everyday
Essentials including Health, Beauty & Baby and Pet Care categories; and
Leisure including Books, Electronic Gaming and Travel Goods continued
to see item growth but discretionary areas including Clothing and Home
were impacted by the rising cost of living on households.
$ MILLION
EBIT to sales (%)
Sales per square metre ($)
Funds employed
ROFE (%)
Scope 1 & 2 emissions
(tonnes) 1
1 F23 & F22 emissions data reflect market-based scope 2
electricity reporting. F22 has been restated to also reflect
new guidance from the Clean Energy Regulator for treatment
of Australian Carbon Credit Units.
somersault
Wooden Train Bet
Two new own brand ranges
In F23, BIG W launched two new
own brands, Openook in Home, and
Somersault in Toys. The new Somersault
range is FSC certified with a great range
of toy products at entry level pricing.
All products in the range are designed
with diversity in mind and developed with
recyclable packaging and the use of FSC
timber. In F24, BIG W will expand the
Somersault brand into further categories,
such as kids stationery and craft.
1
highlights
Performance
2
review
Business
Directors'
Report
4
Report
Financial
LO
information
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