Investor Presentaiton
28
Group financial performance
29
2 Annual Report 2023
Woolworths Group
EBITDA from continuing operations increased 10.4%
to $5,577 million reflecting higher EBITDA from Australian
Food, BIG W and Australian B2B, offset by lower EBITDA
from New Zealand Food and the Other segment.
Increase in inventories of $119 million was due to higher
inventory holdings across the Group reflecting the impact
of inflation. The increase was lower than the prior year
increase of $343 million where inventory holdings were
increased in Australian Food and New Zealand Food
to better manage supply chain disruption.
Increase in trade payables of $371 million reflects higher
purchases largely driven by inflation.
Decrease in provisions of $37 million reflects the cash
remediation of team members as well as the BIG W
onerous contract provision reversal. In the prior year,
the increase of $175 million reflected remediation costs
and self-insurance.
Net change in other working capital and non-cash
was an increase of $224 million primarily due to the
non-cash revaluation of put option liabilities, a decrease
in other receivables and an increase in the impairment
of non-financial assets.
Cash from operating activities before interest and tax
was $6,016 million, an increase of 24.9% or $1,199 million
on the prior year, driven by increased EBITDA and
favourable net working capital movements.
Interest paid - leases of $542 million was in line with
the prior year.
Net interest paid - non-leases was $133 million,
an increase of $74 million compared to the prior year
due to the higher floating interest rates and higher
average net debt during the year.
Tax paid decreased 30.0% compared to the prior year
primarily driven by lower taxable income for F22, paid in F23.
Proceeds and advances from the sale of property,
plant and equipment, subsidiaries and investments,
net of cash disposed was $1,020 million. The increase in
proceeds compared to the prior year was largely because
of the sale of 5.5% of Endeavour Group in December.
Payments for the purchase of property, plant and
equipment and intangible assets of $2,519 million
increased by 4.3% compared to the prior year primarily
due to an increase in property development expenditure
and stay-in-business capital expenditure.
Payments for the purchase of businesses, net of cash
acquired of $373 million relates mainly to the acquisition
of an 80.2% equity interest in MyDeal and 100% interest
in Shopper Media.
Dividends paid (including to non-controlling interests)
of $1,031 million increased by 1.9% compared to the prior
year primarily due to an increase in the interim dividend
per share, partially offset by a decline in shares on issue
for the final dividend payment.
The cash realisation ratio for F23 was 113% (F22: 86%¹)
with favourable net working capital movements and lower
cash tax paid compared to the current year's tax expense.
Capital management
Capital management objectives
The Group manages its capital structure with the
objective of enhancing long-term shareholder value
through funding its business at an optimised weighted
average cost of capital.
The Group remains committed to solid investment
grade credit ratings. The Group's credit ratings are BBB
(stable outlook) according to Standard & Poor's and
Baa2 (stable outlook) according to Moody's.
Financing transactions during F23
During F23 the Group refinanced or extended $1.9 billion
of bilateral and syndicated bank debt facilities to new
tenors ranging from 12 months to five years. These
facilities are used to manage the Group's short term
cash flow requirements and support its liquidity position.
Upcoming maturities and transactions
The Group has $400 million of domestic medium-term
notes maturing in April 2024, which will be refinanced
or repaid from existing committed undrawn bank
facilities before maturity.
Non-IFRS Financial information
The 2023 Annual Report for the 52 weeks ended
25 June 2023 contains certain non-IFRS financial
measures of historical financial performance, balance
sheet or cash flows.
Non-IFRS financial measures are financial measures
other than those defined or specified under all
relevant accounting standards and may not be directly
comparable with other companies' measures but are
common practice in the industry in which Woolworths
Group operates. Non-IFRS financial information should
be considered in addition to, and is not intended to be
a substitute for, or more important than, IFRS measures.
The presentation of non-IFRS measures is in line with
Regulatory Guide 230 issued by the Australian Security
and Investments Commission in December 2011 to
promote full and clear disclosure for investors and
other users of financial information and minimise the
possibility of being misled by such information.
These measures are used by management and the
directors as the primary measures of assessing the
financial performance of the Group and individual
segments. The directors also believe that these non-IFRS
measures assist in providing additional meaningful
information on the underlying drivers of the business,
performance and trends, as well as the financial
position of the Woolworths Group. Non-IFRS financial
measures are also used to enhance the comparability
of information between reporting periods (such as
comparable sales), by adjusting for non-recurring
or uncontrollable factors which affect IFRS measures,
to aid the user in understanding the Woolworths Group's
performance. Consequently, non-IFRS measures are
used by the directors and management for performance
analysis, planning, reporting and incentive setting
purposes and have remained consistent with the prior
year. Non-IFRS measures are not subject to audit
or review.
1
highlights
Performance
2
Business
Directors'
review
Report
4
1 F22 adjusted for non-cash gain on demerger of Endeavour Group of $6,387 million. F22 unadjusted CRR was 33%.
Financial
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