Investor Presentaiton

20 Stakeholder review Planet OZHARVEST NOURISHING OUR COUNTRY worths A Entry Investors and shareholders 21 Woolworths Group Annual Report 2023 As committed in our Sustainability Plan 2025, we aim to reduce our emissions, improve our operations and communities' resilience, work to improve food security and reduce waste, and encourage sustainable and regenerative practices for future generations. Towards a Better Tomorrow In F23, we made progress on our 2050 ambition to be a net positive carbon emission Group with scope 1 and 2 emissions down 36% from the 2015 baseline. This was achieved through ongoing energy upgrades such as LED lighting, reduced refrigerant losses and overall grid decarbonisation. Underpinning our 2030 target is our commitment to be completely powered by green electricity by 2025. In the year, approximately 500GWh of electricity was from renewable sources and we installed 48MW of solar across 231 systems. To support the Group's next phase towards net positive scope 1 and 2 emissions, a transport decarbonisation strategy was established and we announced our commitment to a fully electric home delivery vehicle fleet by 2030 with 27 electric vehicles on the road by June 2023. We recognise that most of our emissions are generated in our value chain and we are working to improve visibility of our supplier emissions through our value chain program. More detail on our progress against our climate goals can be found on pages 42 to 59 of this report. This year we implemented a food waste diversion data enhancement program across our Australian and New Zealand supermarkets, Metro Food Stores and CFCs. The program has significantly improved data capture and reporting capability, helping the team select diversion pathways for food waste based on the positive impact such as food rescue. We can now report more accurately on our performance and monitor progress against our goal. In F23, we diverted 80% of food waste from landfill from Woolworths Supermarkets and 69% across the Group. We also achieved a 13% increase in our food rescue donations. In August 2023, we updated our food waste goal, reducing hunger and food waste, to improve explicit mention of its impact on food security, and align with UN Sustainable Development Goals, 2 - Zero hunger and, 12 Responsible consumption. We aim to have an influence beyond our operations to help our wider value chain reduce industry and community food waste. We support our farmers to reduce food waste to landfill through initiatives such as Odd Bunch, which has Further information can be found in our 2023 Sustainability Report saved over 300,000 tonnes of fruit and vegetables from landfill since 2015. We're also working to help educate and inspire our customers on methods and benefits of food waste reduction. For example, Reduced in Price, Just as Nice, launched in 2023, helps customers in our Metro Food Stores save money and reduce food waste with allocated space for reduced and short shelf-life items. The Group also invests in new innovations through its W360 business, such as Goterra's black soldier fly larvae technology, rolled out to 90 stores, which turns food waste into sustainable livestock feed; and ReFresh:Food, a digital food marketplace for farmers to sell their excess products to launch in F24. Addressing soft plastics REDcycle's consumer soft plastics recycling program was suspended in November 2022 after it came to light that the company had been stockpiling collected soft plastics due to insufficient processing capacity. Pursuant to an ACCC authorisation, Woolworths and other Australian grocery retailers volunteered to manage the REDcycle stockpiles while recycling solutions are being explored. Over the last five months, Woolworths has also been working as part of the Soft Plastics Taskforce to identify potential processing arrangements for the existing stockpiles as well as reestablish an in store soft plastics collection scheme. There is currently relatively limited domestic soft plastic recycling, although further capacity is expected to become available over time. Given the importance of maintaining public trust following the collapse of the REDcycle program, Woolworths and the other Soft Plastics Taskforce members are carefully working through the necessary steps in order to restart an in store soft plastics collection program in a responsible manner. Ongoing progress against our strategic priorities, and a strong financial performance and balance sheet sets the foundation for a Group that can continue to deliver long-term value creation for our investors and shareholders. Sustainable returns The financial performance of the Group in F23 has enabled strong returns for our investors and shareholders. Group NPAT before significant items of $1,721 million increased 13.7% on last year with the profit growth reflecting the more stable operating environment, the absence of COVID costs, and ongoing investment in the business over many years. Reflecting the higher profit, the Group declared a fully franked final dividend of 58 cents which was up 9.4% on last year, bringing the total dividend to 104, up 13% compared to F22. Total shareholder return for Woolworths Group in F23 of 14.7% was broadly in line with ASX200. A stronger Group for the future The material investment in the Group's multi-year supply chain transformation will be a key driver of future growth. In F23 we passed the mid-way point of the transformation with major new facilities opened over the last five years including Melbourne South Regional DC and Melbourne Fresh DC in Victoria; the Adelaide Regional DC expansion in South Australia; Palmerston North DC and Auckland Fresh DC in New Zealand and Heathwood Chilled and Frozen DC in Queensland. The new facilities are providing a wider and fresher range for customers, increased capacity, and improving efficiency as facilities build volume and move from commissioning to operational phases. A new Fresh DC in Christchurch, New Zealand, and Woolworths Group's first automated CFC in Auburn, Sydney, are on track to open in 2024. The remaining material investments in the transformation are two new DCs in Moorebank, NSW and are progressing to plan with the initial phase of our new Sydney NDC now complete with an operational launch date also planned for late 2024. Strong free cash flow during the year enables the Group to invest for the future and at the same time maintain strong dividend payments to shareholders. The Group's net debt/EBITDA ratio ended F23 at 2.6x compared to 3.2x in F22, providing ample headroom to execute the Group's strategy, including investing in adjacent opportunities that strengthen the core and deliver growth for the Group. The acquisition of PFD Food Services in 2021 is an example of an adjacency that is already adding value to the Group with sales increasing 28% in F23. PFD has strengthened our B2B offer as we look to refocus our proposition in F23, including exiting international drinks importer, Summergate in China, Fresh to Go (part of PFD), as well as winding up our International business. Other acquisitions in the year included out-of-home media company Shopper Media in September 2022 to grow our retail media offer through Cartology, and MyDeal, in the same month, to build our marketplace capability. In December 2022, we announced our intention to acquire an equity interest in Petstock Group to support our aspiration to better meet the everyday needs of our customers. Subject to ACCC approval, Petstock Group will become part of W Living, which will include BIG W and our other online specialty businesses. Better for New Zealand From early 2024, Countdown Supermarkets will be rebranded to Woolworths Supermarkets to strengthen our trans-Tasman connection and to bring the best of the Group to our Kiwi customers. This will include Everyday Rewards to provide more value, an accelerated store renewal program to create better in store experiences and a materially improved fresh offer as we continue our supply chain transformation. 1 highlights Performance 2 Business Directors' review Report 4 Report Financial ம Other information