Investor Presentaiton

32 Business review Woolworths Food Retail (Stores and eCom) 33 Woolworths Group Annual Report 2023 Trading performance Customer metrics improved compared to Q3 with VOC NPS (Store and Online) improving three points to 49, and Store-controllable VOC improving two points to 78%. Higher scores reflect improved availability in store and online, and improved Fruit & Vegetables supply. Value for Money scores also stabilised compared to Q3. Compared to F22, VOC NPS was flat and Store-controllable VOC was up three points reflecting improved availability as stock flows stabilised and higher Fruit & Veg scores reflecting lower prices and quality. Woolworths Food Retail sales in F23 increased 4.8% (6.3% ex Tobacco) or 5.7% on a 4-yr CAGR (6.8% ex Tobacco) with comparable sales for the year increasing 4.2% (5.6% ex Tobacco). After an increase of 2.5% in H1 (3.8% ex Tobacco) impacted by cycling COVID-driven in-home consumption and supply challenges in Fruit & Vegetables; sales increased by 7.4% (9.1% ex Tobacco) in H2 with strong growth nationally across all store segments (Value, Core, UP) with volume growth strongest in UP stores. H2 sales growth was driven by sustained inflation associated with elevated levels of supplier cost increases and total items returning to growth from mid-January. Shelf price inflation moderated in Q4 compared to Q3 but remained elevated due to industry-wide cost pressures. Woolworths Supermarkets (store-originated) sales for the year were $41.4 billion, an increase of 4.7% (6.3% ex Tobacco) on the prior year. eCom sales increased 2.9% to $5.1 billion with sales penetration of 10.7%. Woolworths Supermarkets (store-originated) sales growth increased by 6.3% (8.0% ex Tobacco) in H2 and eCom sales returned to strong growth of 13.2%. Average prices in Q4 increased by 5.2% compared to the prior year, below the Q3 increase of 5.8%. Lower prices were passed on to customers as growing conditions improved in Fruit & Vegetables, and lower beef and lamb livestock prices, contributed to the moderation with both Fruit & Vegetables and Meat in deflation in the quarter. Metro Food Stores (store-originated) sales increased by 21.6% to $1,156 million assisted by the opening of five new Neighbourhood stores and a recovery in customer mobility supporting On the Go stores. $ MILLION F23 F221 Total sales 47,648 EBITDA 4,550 CHANGE 45,445 4.8% 3,982 14.3% Depreciation and amortisation (1,712) (1,583) EBIT 2,838 2,399 8.1% 18.3% EBIT to sales (%) 6.0% 5.3% Sales per square metre ($) 2 18,921 18,364 68 bps 3.0% 1 Prior period restated to reflect Woolworths at Work. 2 Prior year sales per square metre has been restated to conform to the current year's presentation of sales channel. Healthier choices at our checkouts As part of our commitment to making healthy eating easier we have removed kids confectionery from all checkouts nationally to help customers access healthier options. Customers will now see healthier and more affordable food choices at checkouts with at least 80% of products having a Health Star Rating of 3.5 stars or above on the Government's Health Star Rating system. This initiative is part of our broader program to help make healthier alternatives more prominent across the store, including featuring healthier products on promotional aisle ends, in addition to Health Star Ratings on own brand products, as well as Free Fruit for Kids across all of our stores. Karatein Cutt must BC Discover healthier choices Look for HEALTHSTAR and above. Woolworths Food Company's own and exclusive sales grew 5.4% in F23 with a strong sales increase in H2. H1 growth was impacted by availability issues in Fruit & Vegetables and Meat with H2 growth of 9.1% driven by strong item growth of 3.2% particularly across protein, chiller, and pantry categories; and inflation. Customers increasingly traded into own brand to improve the value of their basket with Pantry essentials, Drinks such as long life milk, and baby products showing particularly strong growth. On a 4-yr CAGR, own and exclusive brand sales increased by 8.3%. Woolworths Food Company's Retail business introduced over 1,500¹ new products in the year including further rollout of the Macro protein range, Macro carbon neutral eggs, and new bakery products to provide value to customers. Fresh meal solutions brands such as COOK and BBQ also continued to resonate with customers. As cost-of-living pressures continued to impact customer budgets, we continued to deliver value through the Get your Woolies worth platform. This included four seasonal and a Christmas Prices Dropped campaign; a Christmas price freeze, more than 3,000 products on Low Price; and personalised member offers and benefits through Everyday Rewards. At the end of the year, categories that account for half of Woolworths Supermarkets sales were curated by Value, Core and UP with an increased emphasis on value ranges and fresh categories. Woolworths Food Retail's sales per square metre increased by 3.0% with sales growth higher than average space growth of 1.9%. During the year 10 net new stores were opened, 43 renewals were completed and 28 Mini Woolies opened. At the end of the year, the total fleet comprised 1,002 Woolworths Supermarkets, 93 Metro Food Stores, 708 Direct to boot locations, seven CFCs, two eStores and 41 Mini Woolies. Woolworths Food Retail EBIT increased by 18.3% to $2,838 million with the EBIT margin increasing 68 bps to 6.0%. During the year, Woolworths continued to tackle food waste with 80% of food waste diverted from landfill in F23 and over 300,000 tonnes of food waste saved by our Odd Bunch program since its launch in 2015. Kids confectionery was removed from checkouts in all supermarkets with 80% of snacks at checkouts with a Health Star Rating of 3.5 or above to help make it easier for customers to access healthier food choices Launch of new in store Proactive Services business In September 2022, Woolworths Supermarkets and Woolworths 360 launched Proactive Services, which brings in-house a team dedicated to store cleaning, trolley collection and waste management. Proactive Services, now rolled out to 69 stores, aims to create better experiences for customers through improvements to the quality of services in store, as well as provide more career opportunities for our team to grow their skills. Since its launch, the Proactive Services team employed more than 800 new team members in F23, with a further 3,000 new team members expected in F24, and around 10,000 new team members once the program has been rolled out across the Group. To date, the program has delivered improvements to VOC store presentation and trolley availability metrics, as well as an improvement in VOT advocacy scores in the relevant stores. 1 highlights Performance 2 review Business 3 Directors' Report 4 Financial Report ம Other information 1 Includes redesigned, reformulated, and new to market.