Investor Presentaiton
114
Notes to the Consolidated Financial Statements
2.2
Reportable segments (continued)
Individually significant items
2.2.3
Individually significant items have been highlighted to help users of this Financial Report to understand the financial performance
of the Group during the period. The significant items recognised in the Consolidated Statement of Profit or Loss are as follows:
2023
$M
2022
$M
2.3
Branch and administration expenses
Group performance
2
Branch and administration expenses mainly include employee benefits expense,
depreciation and amortisation expense, occupancy expenses, and contract
labour costs.
Continuing operations
Supply chain network review
Exit of the Summergate business
End-to-end payroll review remediation
Revaluation of put option liabilities over non-controlling interests
(32)
24
(30)
Employee benefits expense
(61)
(165)
Depreciation and amortisation expense²
(41)
164
BIG W network review
47
Other
(22)
Total significant items before income tax from continuing operations
Income tax benefit¹
(117)
1
14
32
Total significant items from continuing operations
(103)
33
Occupancy expenses
Contract labour
Other³
Total branch and administration expenses
Branch expenses
Administration expenses
Total branch and administration expenses
Discontinued operations
1
Refer to Note 1.1.1 for further details.
Gain on demerger of Endeavour Group
6,387
2 Depreciation and amortisation expense included in cost of sales is $269 million (2022: $229 million).
(103)
6,420
115
Annual Report 2023
Woolworths Group
1
2023
RESTATED¹
2022
$M
$M
8,762
8,557
2,309
2,132
611
624
highlights
Performance
832
745
1,940
1,519
14,454
13,577
2
10,770
10,388
3,684
14,454
3,189
13,577
Business
review
Total Group significant items
1
Comprises an income tax benefit of $28 million relating to end-to-end payroll review remediation and supply chain network review, offset
by an income tax expense of $14 million relating to the BIG W network review (2022: income tax benefit of $50 million relating to end-to-end
payroll review remediation, offset by an income tax expense of $7 million relating to supply chain network review and $11 million of other).
The individually significant items of $117 million recognised before income tax during the period, of which $28 million and
$89 million was recognised in cost of sales and branch and administration expenses respectively, are as follows:
Supply chain network review
As part of the Group's ongoing supply chain network strategy and transformation, provisions for redundancy costs
associated with the announced closure of four distribution centres in New South Wales and Victoria were recognised
in prior periods. During the period, the Group reassessed the provision for redundancy costs and recognised an additional
$32 million predominantly relating to increases in wage rates and redundancy terms specific to the relevant Enterprise
Agreements (EAS) for impacted team members, as agreed in EA negotiations during the period.
Exit of the Summergate business
During the period, the Group completed the sale of Summergate, the Group's alcoholic drinks distributor in China. The net
assets and liabilities of the business were sold, with the purchaser assuming all ongoing trading liabilities of the business.
This resulted in the Group recognising a net loss of $30 million during the period, reflecting the write down of net assets,
primarily inventory and receivables, as part of the exit process.
End-to-end payroll review remediation
As part of the Group's end-to-end payroll review remediation program, the Group completed its remaining compliance testing
and finalised remediation estimates relating to its multi-year review program. The analysis included the Group's supply chain
operations, which had not been previously reviewed. During the period, the Group recognised a significant item provision
of $61 million for prior period payment shortfalls due to non-compliance with EAs for hourly paid team members and other
one-off remediation charges, such as interest and oncosts, predominantly across the Group's supply chain operations.
Revaluation of put option liabilities over non-controlling interests
The Group has recognised put option liabilities over its non-controlling interests of PFD, Quantium, and MyDeal. At each
reporting period, the put option liabilities are reassessed to reflect the present value of the Group's best estimate of the
amounts expected to be paid at the time of exercise. During the period, a net revaluation expense of $41 million was
recognised, primarily driven by higher than forecast earnings and reductions in forecast net debt.
BIG W network review
The Group previously announced the planned closure of certain BIG W stores and recognised onerous contract provisions
relating to the anticipated costs of lease terminations. Ongoing negotiations with landlords resulted in a preferred strategy
to exit these stores at the end of their current lease term. As a consequence, exit payments are no longer required, and
therefore, the onerous contract provisions were reassessed and a $47 million gain was recognised during the period.
3 Other primarily comprises light and power, IT and repairs and maintenance expenses.
2.4
Employee benefits expense
Employee benefits expense reflects employee entitlements recognised during the
period in the Consolidated Statement of Profit or Loss.
Remuneration and on-costs
Superannuation expense
Share-based payment expense
Total employee benefits expense
Cost of sales
Branch and administration expenses
Total employee benefits expense
Significant Accounting Policies
3
Report
Directors'
2023
$M
2022
$M
4
9,125
749
8,812
687
113
139
9,987
9,638
1,225
1,081
Financial
Report
8,762
8,557
9,987
9,638
5
Employee benefits expense
Remuneration, on-costs and superannuation costs are mainly expensed as the related service
is provided. A liability is recognised for the amount expected to be paid if the Group has a present
legal or constructive obligation to pay this amount as a result of past service provided by the
employee and the obligation can be estimated reliably. Refer to Note 3.13, Note 6.2 and Note 6.3 for
further details on employee provisions, share-based payment expense, and superannuation expense.
Other
informationView entire presentation