Western Midstream Partners

26 August 2022 

The Manager 
Market Announcements Office 
Australian Securities Exchange 

Dear Manager, 

2022 ANNUAL REPORT (INCLUDING APPENDIX 4E) 

In accordance with the requirements of the ASX Listing Rules, attached for release to the market is the 
2022 Annual Report (including Appendix 4E). 

The following will be released in conjunction with today’s announcement: 

•  Notification of Dividend/Distribution; 

•  2022 Full-year results; 

•  2022 Full-year results briefing presentation; and 

•  2022 Corporate Governance Statement and Appendix 4G 

An analyst briefing will be held at 10:00am AWST / 12:00pm AEST following the release of the full-year 
results announcement and the 2022 Annual Report (including Appendix 4E). This briefing will be 
webcast and accessible via our website at www.wesfarmers.com.au.  

Yours faithfully, 

Vicki Robinson 
Executive General Manager  
Company Secretariat 

This announcement was authorised to be given to the ASX by the Wesfarmers Limited Board. 

 
 
 
 
 
2022 Annual Report

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ABOUT WESFARMERS 

ABOUT THIS REPORT

From its origins in 1914 as a Western 
Australian farmers’ cooperative, 
Wesfarmers has grown into one of 
Australia’s largest listed companies. 
With headquarters in Perth, Wesfarmers’ 
diverse businesses in this year’s review 
cover: home improvement, outdoor living 
and building materials; general merchandise 
and apparel; office and technology 
products; health, beauty and wellbeing 
products; wholesale pharmacy distribution; 
manufacturing and distribution of chemicals 
and fertilisers; mine development and 
construction; industrial and safety product 
distribution; retail and commercial energy 
supply; and a data and digital ecosystem. 

Wesfarmers is one of Australia’s largest 
private sector employers with almost 
120,000 team members and is owned 
by more than 515,000 shareholders.

This annual report is a summary  
of Wesfarmers and its subsidiary  
companies’ operations, activities and 
financial performance and position as at 
30 June 2022. In this report, references to 
‘Wesfarmers’, ‘the company’, ‘the Group’, 
‘we’, ‘us’ and ‘our’ refer to Wesfarmers 
Limited (ABN 28 008 984 049), unless 
otherwise stated.

References in this report to a ‘year’ are 
to the financial year ended 30 June 2022 
(previous corresponding period 
30 June 2021) unless otherwise stated. 
All dollar figures are Australian dollars (AUD) 
unless otherwise stated.

References to AASB refer to the Australian 
Accounting Standards Board and IFRS 
refers to the International Financial Reporting 
Standards. There are references to ‘IFRS’ 
and ‘non-IFRS’ financial information in this 
report. Non-IFRS financial measures are 
financial measures other than those defined 
or specified under any relevant accounting 

standard and may not be directly 
comparable with other companies’ 
information. Non-IFRS financial measures 
are used to enhance the comparability 
of information between reporting periods. 
Non-IFRS financial information should 
be considered in addition to, and is not 
intended to be a substitute for, IFRS financial 
information and measures. Non-IFRS 
financial measures are not subject 
to audit or review.

All references to ‘Indigenous’ people  
are intended to include Aboriginal and/or 
Torres Strait Islander people.

Wesfarmers is committed to reducing  
the environmental footprint associated 
with the production of this annual report 
and printed copies are only posted to 
shareholders who have elected to receive 
a printed copy. This report is printed 
on environmentally responsible paper 
manufactured under ISO 14001 
environmental standards.

APPENDIX 4E

For the year ended 30 June 2022

Results for announcement to the market

2022

2021

Revenue from ordinary activities

Up 8.5% to $36,838 million

$33,941 million

Net profit for the full-year attributable to members

Down 1.2% to $2,352 million

$2,380 million

Net tangible assets per ordinary share1

Operating cash flow per share2

$2.94

$2.03

$5.14 

$2.99

1  The calculation of net tangible assets per ordinary share (excluding reserved shares) includes right-of-use assets and lease liabilities.
2  The calculation of operating cash flow per share has been calculated by dividing the net cash flow from operating activities by the weighted average number 

of ordinary shares (including reserved shares) on issue during the year.

Dividends

Interim dividend

Final dividend

Total FY2022 dividend

Previous corresponding period:

Interim dividend

Final dividend

Total FY2021 dividend

Amount per security

Franked amount per security

80 cents

100 cents 

180 cents

88 cents

90 cents

178 cents

80 cents

100 cents 

180 cents

88 cents

90 cents

178 cents

Record date for determining entitlements to the final dividend

5:00pm (AWST) on 1 September 2022

Last date for receipt of election notice for the Dividend Investment Plan

5:00pm (AWST) on 2 September 2022

Date the final dividend is payable

Capital management

6 October 2022

Amount per security

Capital return (paid on 2 December 2021)

200 cents

Contents

Acknowledgement  
of Country

Overview

Wesfarmers proudly acknowledges 
the Traditional Owners of Country 
throughout Australia and their continuing 
connection to lands and waterways upon 
which we depend. We pay our respects 
to their Elders, past and present. 

Recognising its potential to advance 
social, economic and cultural equity 
for Aboriginal and Torres Strait Islander 
Australians, Wesfarmers supports the 
Uluru Statement from the Heart including 
the proposal to establish an Aboriginal 
and Torres Strait Islander Voice.

Group structure 

Primary objective 

Performance highlights 

Value-creating strategies 

Performance overview 

Chairman’s message 

Managing Director’s report 

Leadership Team 

Operating  
and financial  
review

Operating and financial review 

Bunnings 

Kmart Group 

Chemicals, Energy and Fertilisers 

Officeworks 

Industrial and Safety 

Health 

Wesfarmers OneDigital 

Other activities 

Sustainability 

Climate disclosures 

Independent Limited Assurance Statement 

Governance

Board of Directors 

Corporate governance overview 

Directors’  
report

Directors’ report 

Remuneration report 

Financial  
statements

Financial statements 

Notes to the financial statements 

This year, Wesfarmers was 
honoured to be invited to produce 
its first ‘Elevate’ Reconciliation 
Action Plan (RAP), reflecting 
our longstanding commitment 
to reconciliation. View the 
Wesfarmers Elevate RAP at  
www.wesfarmers.com.au

Signed  
reports

Directors’ declaration 

Independent auditor’s report 

Shareholder  
and ASX  
information

Five-year financial history 

Shareholder information 

Investor information 

Corporate directory 

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Group structure

Overview

Bunnings

Kmart Group

From 1 July 2022

Chemicals, Energy 
and Fertilisers

(50%)

(50%)

(75%)

Officeworks

Industrial and  
Safety

Health

OneDigital

Other activities

From 1 July 2022

50%

24.8%

50%

50%

2.8%

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Wesfarmers 2022 Annual Report

Primary objective

Our primary objective is to deliver a satisfactory 
return to shareholders. 

We believe it is only possible to achieve this over the long term by:

anticipating the needs of 
our customers and delivering 
competitive goods and services

looking after our team 
members and providing 
a safe, fulfilling work 
environment

engaging fairly with our 
suppliers, and sourcing 
ethically and sustainably

supporting 
the communities  
in which we operate

taking care of  
the environment

acting with integrity 
and honesty in all of our 
dealings

 Wesfarmers 2022 Annual Report

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Overview

Performance 
highlights

Revenue

Net profit after tax

$36.8b
8.5%

$2.35b
2.9%

Excluding significant items

Dividends per share
Fully franked

$1.80
1.1%

Return on equity (R12)

Salaries, wages and 
other benefits

Government taxes 
and other charges

29.4%
3.3ppt

$5.6b

$1.3b

Safety

 4.2%

Indigenous  
team members

3.3%

Greenhouse  
gas emissions 
Scope 1 & 2

 7.4%

Reduction in total recordable 
injury frequency rate to 9.2, 
excluding the Health division

Indigenous employment 
parity regained, excluding 
the Health division

Reduction in Scope 1 and 2 
market-based emissions, 
excluding the Health division

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Wesfarmers 2022 Annual Report

Value-creating 
strategies

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Operating 
excellence

Entrepreneurial 
initiative

Renewing the 
portfolio

Operating  
sustainably

Strengthening existing 
businesses through 
operating excellence and 
satisfying customer needs.

Securing growth 
opportunities through 
entrepreneurial initiative.

Renewing the portfolio 
through value-adding 
transactions.

Ensuring sustainability 
through responsible long-
term management.

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Progress against priorities

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Invest in platforms 
for long-term growth

Data and digital

Accelerate pace 
of continuous 
improvement

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Progressed the development 
of Mt Holland lithium project

Established a new Health 
division with API the foundation 
business

Exploring capacity expansion 
and adjacent opportunities 
within WesCEF

Continued development of 
Bunnings commercial business, 
including through Tool Kit Depot 
and Beaumont Tiles

Established OneDigital, including 
the shared data platform and the 
OnePass membership program

Integrated sustainability further 
into divisional strategies

Strengthened e-commerce 
capabilities and enhanced digital 
engagement with customers

Increased focus on circular 
economy, Scope 3 emissions, 
and launched WesCEF’s net 
zero roadmap

Bunnings and Officeworks 
partnered with Flybuys

Reinforced price leadership 
on everyday items

Embedded advanced analytics 
into business operations

Strengthened divisional 
omnichannel capabilities and 
expanded online ranges

Advanced supply chain initiatives

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Overview

Performance overview

Wealth creation and value distribution

$23.4b Payments to suppliers

$5.6b Team members (salaries, wages and other benefits)

Wealth creation

$37.2b

Value distribution

$9.9b

$3.9b Payments for rent,  
services and other external costs

$1.3b Government (taxes and other charges)

$0.1b Lenders (finance costs)

$2.0b Shareholders (dividends)

$0.9b Reinvested in the business

Group performance

Financial results

Revenue

Earnings before interest and tax

Earnings before interest and tax (after interest on lease liabilities)

Earnings before interest and tax (after interest on lease liabilities) (excluding significant items)1

Net profit after tax

Net profit after tax (excluding significant items)1

Basic earnings per share (excluding significant items)1

Cash flow and dividends

Operating cash flows

Net capital expenditure

Acquisition of subsidiaries, net of cash acquired

Free cash flows

Equity dividends paid

Capital return paid

Operating cash flow per share

Dividends per share 

Balance sheet and gearing 

Total assets

Net debt2

Shareholders' equity

Gearing (net debt to equity)

Sustainability

Market-based Scope 1 and 2 emissions

Operational waste recovered and diverted from landfill3

Aboriginal and Torres Strait Islander team members3

Safety performance3

Gender balance, board and leadership team

1  2021 excludes pre-tax (post-tax) $59 million ($41 million) of restructuring costs in Kmart Group. 
2  Excludes lease liabilities.
3  Excluding the Health division.

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Wesfarmers 2022 Annual Report

$m

$m

$m

$m

$m

$m

cents

$m

$m

$m

$m

$m

$m

cents

cents

$m

$m

$m

%

ktCO2e
%

TRIFR

% women

2022

36,838 

3,633 

3,416 

3,416 

2,352 

2,352 

207.8 

2,301 

884 

773 

1,110 

1,927 

2,267 

203.3 

180.0

27,271 

4,491 

7,981 

56.3 

1,225.7

69.6

3,601

9.2

48

2021

33,941 

3,717 

3,491 

3,550 

2,380 

2,421 

214.1 

3,383 

632 

2 

2,741 

2,074 

- 

299.1

178.0

26,214 

227 

9,715 

2.3 

1,308.9

68.1 

2,994

9.6

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Wesfarmers delivered solid financial results for the 2022 financial year while 
continuing to invest in existing operations and establish new businesses, in line 
with the Group’s objective to deliver superior and sustainable long-term returns.

Divisional performance

Bunnings

Revenue

Earnings before tax

Segment assets

Segment liabilities

Capital employed R12

Return on capital employed R12

Cash capital expenditure 

Kmart Group

Revenue

Earnings before tax

Segment assets

Segment liabilities

Capital employed R12

Return on capital employed R12

Cash capital expenditure 

Chemicals, Energy and Fertilisers

Revenue

Earnings before tax

Segment assets

Segment liabilities

Capital employed R12

Return on capital employed R12

Cash capital expenditure 

Officeworks

Revenue

Earnings before tax

Segment assets

Segment liabilities

Capital employed R12

Return on capital employed R12

Cash capital expenditure 

Industrial and Safety

Revenue

Earnings before tax

Segment assets

Segment liabilities

Capital employed R12

Return on capital employed R12

Cash capital expenditure 

Health

Revenue

Earnings before tax

Segment assets

Segment liabilities

Cash capital expenditure

$m

$m

$m

$m

$m

%

$m

$m

$m

$m

$m

$m

%

$m

$m

$m

$m

$m

$m

%

$m

$m

$m

$m

$m

$m

%

$m

$m

$m

$m

$m

$m

%

$m

$m

$m

$m

$m

$m

2022

 17,754 

2021

 16,871 

 2,185 

 8,289 

 5,994 

 2,651 

82.4

445

20211

 9,982 

 693 

 6,040 

 4,656 

 1,329 

52.1

185

2021

 2,146 

384

 2,676 

 473 

 2,171 

17.7

137

2021

 3,029 

 212 

 1,892 

 985 

949

22.3

65

2021

 1,855 

 70 

 1,712 

 583 

 1,126 

6.2

62

 2,204 

 8,817 

 6,113 

 2,854 

77.2

349

2022

 9,635 

 418 

 6,103 

 4,355 

 1,825 

22.9

150

2022

 3,041 

540

 4,403 

 771 

 2,503 

21.6

455

2022

 3,169 

 181 

 2,040 

 1,041 

1,015

17.8

68

2022

 1,925 

 92 

 1,805 

 599 

 1,166 

7.9

64

2022

 1,240 

 (25)

 2,025 

 942 

3

1  2021 earnings before tax for Kmart Group excludes $59 million of restructuring costs.

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Overview

Chairman’s 
message

For the third year in a row, FY2022 
proved to be a year of great uncertainty 
for all companies due to the continuation 
of the COVID-19 pandemic across the 
world. In Australia, business operations 
were disrupted by government-imposed 
lockdowns, health-related absenteeism, 
skills shortages and supply chain 
bottlenecks, particularly in the first 
half of the financial year. 

Wesfarmers’ retail operations in particular 
felt the brunt of the lockdowns during 
that first half of the year when almost 
10 per cent of, or 34,000, store trading 
days were impacted by closures 
or restrictions. 

It is particularly gratifying that in these 
circumstances, once again, Wesfarmers 
managed to produce a solid profit result 
for the year. The achievement of this 
result was principally due to two factors: 
the successful efforts by management to 
modify their business models to suit the 
changed times, and the diversified nature 
of the Wesfarmers Group.

With regard to the first, management 
in the retail businesses had been 
working for some years to gear up for 
the inevitable rise of online trading and 
was able to accelerate this process to 
cope with increased online demand from 
customers, including for click and collect 
and delivery during times of shutdown. 
Some team members’ roles were 
modified to accommodate the 

changed circumstances and the 
company provided additional support 
measures, including additional paid 
leave, to team members impacted 
by COVID-19. 

The benefits of Wesfarmers’ 
conglomerate structure were clearly 
demonstrated during the year, with profit 
falls in Kmart Group and Officeworks 
being compensated by increases in the 
Chemicals, Energy and Fertilisers, and 
Industrial and Safety divisions - the former 
resulting from increased production 
and commodity price rises. Bunnings 
achieved comparable profits to those 
of the previous year and continued to be 
the principal contributor to the Group’s 
profits and cash flow. Further details on 
business unit performance is contained 
in the Managing Director’s report and 
subsequent sections of this annual report.

The Group’s net profit after tax in the 
2022 financial year was $2.35 billion, 
compared with $2.38 billion in 2021. 
The directors determined to pay a final 
fully-franked dividend of 100 cents per 
share, bringing the total fully-franked 
dividends for the year to 180 cents, 
compared with 178 cents in FY2021. 

The company’s strong balance sheet 
enabled the payment of an additional 
$2.00 per share as a capital return 
following the approval of shareholders 
at the Annual General Meeting 
in October 2021.

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Wesfarmers 2022 Annual Report

Our labour relations system is also 
in urgent need of repair. Increasingly, 
employers are abandoning the higher 
productivity-achieving enterprise 
bargaining system in favour of awards. 
Enterprise agreement processes have 
become excessively complex and 
legalistic and the ‘better off overall’ test 
has lost its original, intended meaning. 
This is where the Jobs and Skills 
Summit, to be held in September 2022, 
could make a big difference. All parties 
need to attend that gathering with the 
common goal of finding reforms and 
ideas that benefit both employers and 
employees - the former with increased 
productivity and the latter with higher 
real wages. 

There is a great opportunity, federally, 
to achieve real reform in the current term 
of the new government. It is up to the 
government to take the initiative 
in this area and to the Opposition 
to support it. 

In the meantime, your company 
continues to be in very good shape 
financially and in respect of the strength 
of its individual businesses. Your Board 
is confident that Wesfarmers is well-
placed to weather any storms that 
might arise.

I take this opportunity to thank my 
fellow directors for their wise counsel 
and support of management. They are 
a diverse, talented group. Our collective 
thanks go to management, led so 
capably by our CEO, Rob Scott, and to 
all team members for their great efforts 
on behalf of the company during what 
have been very challenging times.

Michael Chaney AO
Chairman

While this financial performance 
and the payment of healthy dividends 
is important, the main focus of the 
Board and management is on long-term 
shareholder returns. That has been the 
focus since our public listing in 1984, 
and it is pleasing that we have been 
successful in that regard, with an 
investment in Wesfarmers providing 
a return around 16 times greater than 
that of the stock market as a whole; 
but how does this long-term focus 
manifest itself on a day-to-day basis? 
How does this differ from what goes 
on in many other companies? 

The first factor is the way we have 
always expressed our objective or 
purpose as a listed company: ‘To provide 
a satisfactory return to shareholders’. 
That has been our focus, as opposed, 
say, to being Australia’s greatest retailer, 
conglomerate or resource company. 
We have always believed that having 
this financial focus minimises the danger 
of empire building where, for example, 
a company pays too much for an asset 
because it ‘simply has to have it’, or 
because it ‘wants to move from number 
three to number two’ in its industry.

The key to maintaining such a financial 
focus at a business unit level is to 
implement systems and practices which 
reinforce the aim, such as measuring 
and rewarding team members for capital 
discipline. For example, the measure 
‘return on capital’ is understood well 
below senior management levels. 
Team members understand that approval 
by the Board of an annual capital budget 
simply represents an acknowledgement 
of what might be spent, not permission 
to make the actual expenditures or 
approval of the total amount. Each 
investment has to be justified financially 
in due course and people are rewarded 
not by spending the capital budget but 
by generating superior returns - which 
may mean not spending it. 

In many companies new investments 
are based on a belief that capital is limited 
- that investments will be ranked so that 
only the highest will receive the scarce 
capital. We have always communicated 
a different message; namely, that in all but 
the most dire external circumstances, 
capital is unlimited - debt and equity 
providers will be willing to provide it. 
What is limited are investments which 
meet our ethical and other guidelines, 
with returns which exceed our minimum 
requirements. If a Wesfarmers business 
manages to find such investments, 
the required capital will be provided. 

As we have emphasised before, this 
financial focus is not in conflict in any 
way with a company having due regard 
to all key stakeholders. If we don’t look 
after our team members, suppliers, 

customers, our communities and the 
environment, people won’t want to buy 
our products, work with us, invite us into 
joint ventures, sell their businesses to us, 
and so on. It is because our businesses 
have been so focused on stakeholders 
that they have developed such strong 
reputations and produced outstanding 
long-term shareholder returns. The two 
go hand-in-hand. 

Maintaining a long-term focus can 
be particularly challenging for boards 
and management teams in the face 
of demands for short-term performance 
that are most prevalent in listed equity 
markets. No one likes to be described 
as having run out of steam or ideas, 
failing because you didn’t match 
competitors or the stock market 
over the last year, or being an inferior 
manager. This is where it is important 
that management is supported by 
a strong board that appreciates the 
importance of a long-term focus.

A good example of this in Wesfarmers 
over the last couple of years has been 
our investments in the digital space. 
The focus and progress developing 
a market-leading ‘data and digital 
ecosystem’ has required the investment 
of hundreds of millions of dollars, most 
of it going as an expense straight to the 
bottom line and reducing reported 
profits. While reported as operating 
expenses, we consider this as much  
a long-term investment as traditional 
capital expenditure. 

Of course the achievement of sound 
long-term returns depends not only on 
what takes place within our businesses, 
but also on the external environment too. 
In this regard we are facing challenging 
times. Putting aside troubling international 
political events, Australian businesses are 
faced with rising inflation and interest 
rates, and the same or worse skills 
shortages and supply chain bottlenecks 
that have plagued us in recent times. 
In this respect we look to government 
to make sure the economic settings 
in Australia encourage productivity, 
entrepreneurship and growth.

For too long, Australian governments 
have avoided tackling the hard issues 
requiring reform. Burdensome regulation 
renders otherwise viable investment 
projects harder to justify. Designed last 
century, our tax system is outdated 
and not fit-for-purpose for our changing 
economy: we place too high a reliance 
on taxing personal effort and on 
inefficient taxes. Tax reform needs 
to be comprehensive along the lines 
of many recommendations in the 
2010 Henry Report, very few of which 
have been adopted. Such reforms would 
support future prosperity, at a time 
when this couldn’t be more important. 

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Overview

Managing 
Director’s report

It is my pleasure to provide this update 
on the performance of Wesfarmers in the 
2022 financial year.

I am pleased to report a solid financial 
performance for FY2022, in spite of 
significant COVID-related operational 
restrictions and disruptions, especially in 
the first half. The resilience of the Group 
and strong performance of our businesses 
is a testament to our team members, who 
helped us navigate a challenging operating 
environment, always focused on doing 
what we could to support each other, our 
customers, suppliers and communities. 

The first half was the most disruptive 
period we have experienced since the 
onset of the pandemic. It included periods 
where almost half of the Group’s stores 
were subject to trading restrictions or 
closures. Our trading results improved 
significantly as restrictions eased, with 
strong sales and profit growth in the 
second half. 

Despite the significant disruption 
during the year, Wesfarmers maintained 
its focus on the long term, investing in 
our businesses and platforms for future 
growth. I am confident that our actions 
this year have laid strong foundations 
for the Group to continue delivering 
shareholder returns over the long term. 

With our almost 120,000 team members, 
many millions of customer interactions a 
week and diverse businesses, the Group 
has a unique insight into the health and 
wellbeing of the community. We have seen 
first-hand the social, economic and health 

impact of the pandemic and COVID-
related restrictions. Reflecting on the last 
two years, I am proud of the leadership 
role we played in prioritising health, 
wellbeing and safety, from both COVID-19, 
and the broader impact of the pandemic 
including extended lockdowns and 
restrictions. 

During the year we supported the delivery 
of over 140,000 vaccinations at Bunnings 
sites, in collaboration with governments. 
The Group continued to provide paid 
pandemic leave to team members and 
paid all permanent and many casual team 
members through periods of prolonged 
lockdown, even when there was no 
meaningful work for them, and when they 
were required to isolate. This investment, 
which totalled approximately $49 million 
over the year, provided certainty to team 
members and their families. 

Many of our operational responses to 
COVID-19 are now integrated into our 
normal processes. These measures align 
with our longstanding focus on workplace 
safety which supported a 4.2 per cent 
improvement in the total recordable 
injury frequency rate during the year.

I’m proud that we regained Indigenous 
employment parity during the first half, 
a year ahead of plan. We also launched 
our latest Reconciliation Action Plan, 
which for the first time received ‘Elevate’ 
status – the highest level of endorsement 
from Reconciliation Australia. 

Recognising its link to long-term value, 
we continued to build climate resilience 

in our businesses. As detailed in our 
climate disclosures, our divisions achieved 
a 7.4 per cent reduction in market-based 
Scope 1 and 2 emissions, excluding the 
Health division, making good progress 
towards their net zero Scope 1 and 2 
emissions targets. WesCEF announced 
its roadmap to achieve net zero Scope 1 
and 2 emissions by 2050, and Industrial 
and Safety has recently introduced 
new net zero Scope 1 and 2 emissions 
commitments. We also launched our 
second sustainability-linked bond during 
the year, evidencing the alignment 
between our sustainability and capital 
management strategies.

OUR PERFORMANCE

The Group generated net profit after 
tax (NPAT) of $2,352 million in the 2022 
financial year. Excluding significant items 
in the prior period, NPAT declined  
2.9 per cent. 

Trading results improved during the year 
as COVID-related restrictions eased, and 
the Group delivered strong NPAT growth 
of 13.1 per cent for the second half.

Bunnings achieved pleasing revenue 
and earnings growth, reflecting the 
resilience of its model and ongoing 
strong execution of its strategic agenda. 
During the year, Bunnings expanded 
its commercial capability and enhanced 
the shopping experience for instore 
and online customers, continuing 
to expand its range, store network 
and fulfilment capabilities.

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Kmart Group was significantly impacted 
by COVID-related restrictions, including 
store closures, during the first half. While 
Kmart and Target’s trading performance 
improved significantly as restrictions 
eased, with strong earnings growth of 
19.4 per cent in the second half, this was 
more than offset by the negative impact 
of COVID-related restrictions in the first 
half. Kmart and Target benefited from 
recent strategies to reset the store 
network, and a disciplined focus on 
productivity and cost control. Good 
progress was made during the second 
half to manage inventory levels.

Catch’s gross transaction value (GTV) 
increased 1.6 per cent, with growth in 
the marketplace offering partially offset 
by a moderation in the in-stock business. 
To support our long-term vision for 
Catch, we are investing in the team,  
automation, fulfilment and marketing.

WesCEF’s revenue increased 41.7 per cent 
for the year, with record earnings 
reflecting higher global commodity prices 
for LPG, fertilisers and ammonia-related 
products. Pleasingly, our disciplined 
investments made over time have 
delivered increased productivity during 
this period of elevated commodity prices. 

Officeworks was significantly impacted 
by COVID-related disruptions, including 
temporary store closures and higher 
costs of doing business. Despite these 
challenges, the business continued 
to invest in fulfilment centres and data 
and digital initiatives, including the 
partnership with Flybuys.

Industrial and Safety continued to 
improve, with earnings 31.4 per cent 
above the prior year. The earnings result 
was supported by sales growth and 
increased operational efficiencies.

We recently established OneDigital, 
which brings together the Group’s digitally 
native businesses. This includes our 
membership program OnePass, our 
shared data asset and, from July 2022, 
the Catch business. OneDigital is in an 
investment and development phase, 
and over time it will generate new revenue 
and earnings streams for the Group.

On 31 March 2022, Wesfarmers 
completed the acquisition of Australian 
Pharmaceutical Industries Ltd (API), which 
is the foundation business of our new 
Health division. We see opportunities 
to strengthen the competitive position 
of API, and to invest in the growing 
health, beauty and wellbeing sector. 

In November 2021, Bunnings completed 
the acquisition of Beaumont Tiles, which 
supports the expansion of Bunnings’ 
commercial offer and specialist 
brands strategy.

LEADERSHIP TEAM

We were pleased to welcome 
Nicole Sheffield and Emily Amos to the 
Leadership Team, leading the OneDigital 
and Health divisions respectively. These 
divisions are well positioned to deliver 
attractive returns to shareholders over 
the long term and we look forward to 
Nicole and Emily’s valuable contributions 
to the Group.

At Wesfarmers, we focus on talent 
development and career mobility. 
During the year, we were pleased to 
appoint Ed Bostock as CFO of the new 
Health division, having led the acquisition 
of API in his capacity as Managing 
Director of Business Development. With 
Ed’s move, we appointed Aaron Hood 
to lead Business Development, having 
previously served as CFO of WesCEF. 

PORTFOLIO ACTIONS

OUTLOOK

Wesfarmers’ approach to portfolio 
management allows the Group to allocate 
capital to opportunities that will deliver 
satisfactory returns to shareholders over 
the long term. This forward-looking, 
dynamic approach recognises that 
markets and opportunities change over 
time. In recent years, digitalisation and 
decarbonisation of the economy have 
gained momentum, and Wesfarmers’ 
divisions are investing and well positioned 
to benefit from these trends. During 
the year, we made significant progress 
developing new platforms for growth, 
while retaining our disciplined approach 
to investment. 

Construction continues on the Mt Holland 
lithium project, with first production of 
lithium hydroxide expected in the second 
half of 2024. The project continues to 
benefit from decarbonisation ambitions 
which support strong lithium market 
fundamentals.

While overall economic conditions 
in Australia are supported by low 
unemployment and high levels of 
accumulated household savings, there 
are some risks on the horizon with 
elevated inflation and rising interest rates. 
In the past, Wesfarmers has withstood a 
range of market conditions by remaining 
focused on our corporate objective  
– to deliver a satisfactory return to 
shareholders over the long term. I am 
confident that this focus will continue 
to serve us well in FY2023 and beyond.

We believe the Group is well positioned 
in the current environment. 

We have a fantastic, committed team 
that thrives on the opportunity to manage 
businesses for the long term. I am always 
impressed by the dedication and depth 
of talent in our teams, and their capacity 
for entrepreneurialism.

Our balance sheet is strong, supported 
by recent bond issuances that secured 
a low cost of debt. We have worked 

hard to ensure that our balance sheet 
is able to absorb external shocks while 
enabling the Group to continue to take 
advantage of investment opportunities 
as they arise. 

We have a portfolio of diverse, cash-
generative businesses with market-leading 
positions. The essential and diversified 
nature of our products and services across 
consumer and commercial markets 
ensures that we are well positioned to deal 
with a range of economic scenarios. 

Importantly, our businesses are well-
equipped to manage inflationary pressures. 
The Group has a unique capacity to 
leverage its scale and sourcing capabilities 
to mitigate the impact of rising costs. 

For our retail businesses, we see inflation 
as an opportunity to profitably grow share 
while extending our value credentials. 
As customers become more focused 
on value, our major retail brands will 
benefit from their well-known everyday 
low price credentials.

At our Strategy Briefing Day, I provided 
an update on our current priorities: 
investing in platforms for long-term growth, 
developing a market-leading data and 
digital ecosystem and accelerating the 
pace of continuous improvement. While 
I’m pleased with our progress in the 2022 
financial year, which has set us up well for 
the future, there remains much to be done.

The Group’s retail businesses will 
maintain their focus on meeting changing 
customer needs and delivering even 
greater value, quality and experience. 
Investments in data and digital capabilities 
are expected to improve our customer 
value proposition, expand addressable 
markets and deliver operating efficiencies. 

The performance of the Group’s industrial 
businesses remain subject to international 
commodity prices, foreign exchange rates 
and seasonal outcomes. 

Finally, I would like to extend my thanks 
to our dedicated team members across 
the Group for their contributions, as well 
as the Board for their invaluable support 
and guidance during yet another 
challenging year. I would particularly like 
to acknowledge the FY2022 leadership 
team of Mike Schneider, Ian Bailey, 
Ian Hansen, Sarah Hunter, Tim Bult, 
Nicole Sheffield, Emily Amos, Anthony 
Gianotti, Jenny Bryant, Naomi Flutter, 
Maya vanden Driesen, Vicki Robinson 
and Ed Bostock. You all made an 
outstanding contribution and I thank 
you for your support and commitment.

Rob Scott 
Managing Director

 Wesfarmers 2022 Annual Report

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Overview

Leadership Team

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1. Rob Scott 
MANAGING DIRECTOR AND CHIEF 
EXECUTIVE OFFICER 
WESFARMERS

Rob was appointed Managing Director and Chief 
Executive Officer of Wesfarmers in November 2017 
following his appointment as Deputy Chief Executive 
Officer in February 2017. 

Rob joined Wesfarmers in 1993, before moving into 
investment banking, where he held various roles in 
Australia and Asia. He re-joined Wesfarmers in Business 
Development in 2004, was appointed Managing 
Director of Wesfarmers Insurance in 2007 and then 
Finance Director of Coles in 2013. Rob was appointed 
Managing Director, Financial Services in 2014 and then 
Managing Director of the Wesfarmers Industrials division 
from August 2015 to August 2017. Rob is also 
Chairman of Rowing Australia, a director of the Brisbane 
2032 Olympic Organising Committee, Gresham 
Partners and the Business Council of Australia.

2. Anthony Gianotti
CHIEF FINANCIAL OFFICER 
WESFARMERS

Anthony was appointed Chief Financial Officer 
of Wesfarmers in November 2017. 

Anthony joined Wesfarmers in 2004 in Business 
Development and in 2005 was appointed Manager, 
Investor Relations and Business Projects. In 2006, 
he was appointed Head of Business Development 
and Strategy of Wesfarmers Insurance, then its Finance 
Director in 2009 and Managing Director in 2013. 
In August 2015, Anthony was appointed Finance 
Director of the Wesfarmers Industrials division and 
its Deputy Managing Director in February 2017. 
He is also a director of West Australian Opera.

3. Maya vanden Driesen
GROUP GENERAL COUNSEL  
WESFARMERS

Maya was appointed Group General Counsel 
of Wesfarmers in January 2015. Prior to this, 
Maya held a number of senior roles in the company 
including Legal Counsel – Litigation, Senior Legal 
Counsel and General Manager Legal – Litigation. 
Before joining Wesfarmers, Maya practised law 
at Parker & Parker and Downings Legal. 

Maya is a Graduate of the Australian Institute of 
Company Directors and sits on the Executive Committee 
of the GC 100, representing the General Counsel 
of Australia’s top 100 ASX-listed companies within 
the Association of Corporate Counsel (Australia). 

Maya is also a member of Chief Executive Women, 
the UWA Law School’s Advisory Board, Director for 
the Committee for Perth and joined the Board of the 
Bell Shakespeare Company in May 2021. 

4. Michael Schneider
MANAGING DIRECTOR 
BUNNINGS GROUP

Michael was appointed Managing Director of 
Bunnings Australia and New Zealand in March 2016 
and Managing Director of Bunnings Group 
in May 2017. 

Michael joined Bunnings in 2005, and prior to this 
he held a range of senior operational, commercial and 
human resource roles across regional and national 
markets, both in retail and financial services. 

Outside of Bunnings, Michael supports a range of 
not-for-profit and community organisations. He holds 
board roles with the Corporate Mental Health Alliance 
of Australia, Melbourne United basketball club and the 
Global Home Improvement Network. In addition, 
Michael chairs FightMND and the Love Me Love 
You Foundation. 

5. Ian Bailey
MANAGING DIRECTOR 
KMART GROUP

Ian was appointed Managing Director of Kmart 
in February 2016 and assumed the responsibility for 
leading the Kmart Group division (encompassing the 
Kmart, Target and, until 1 July 2022, Catch businesses) 
in November 2018. Previously, Ian was Kmart’s Chief 
Operating Officer where he was instrumental in  
Kmart’s turnaround.

Ian’s national and international experience covers 
a number of industries including retail, professional 
services, consulting, technology and healthcare in 
positions that include general management, sales, 
business development and project management. 

6. Sarah Hunter
MANAGING DIRECTOR 
OFFICEWORKS

Sarah was appointed Managing Director 
of Officeworks in January 2019. Prior to this, 
Sarah was the Demerger Program Director at Coles, 
overseeing the successful implementation of the 
demerger of the business from Wesfarmers 
in November 2018. 

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Wesfarmers 2022 Annual Report

Sarah joined Coles in 2010, and held various senior 
positions including Financial Controller, State General 
Manager Victoria, General Manager Workplace 
Strategy and roles in convenience, liquor and 
supermarket operations.

Before joining Coles, Sarah worked in the United 
Kingdom for more than 10 years, holding a number 
of senior commercial positions in banking and airports 
including Strategy and Finance Director for Gatwick 
Airport from 2006 to 2010.

Sarah is a Fellow of the Association of Chartered 
Certified Accountants, a Fellow of the Financial 
Services Institute of Australasia, a member of the 
Australian Institute of Company Directors and a 
member of Chief Executive Women. 

7. Emily Amos
MANAGING DIRECTOR  
HEALTH

Emily was appointed Managing Director of Health 
in April 2022, and leads the development of 
health-related opportunities following Wesfarmers’ 
acquisition of Australian Pharmaceutical Industries Ltd. 

Prior to joining Wesfarmers, Emily’s most recent roles 
include Managing Director of BUPA Health Insurance 
and Managing Director of BUPA Health Services in 
Australia and New Zealand. 

Emily is a former non-executive director of Adore 
Beauty and has significant retail experience through 
positions in Australia and the UK, in finance and 
strategy. Emily is also a member of Chief Executive 
Women.

8. Ed Bostock
MANAGING DIRECTOR,  
BUSINESS DEVELOPMENT 
WESFARMERS

Ed joined Wesfarmers in October 2017 as Managing 
Director, Business Development, a role he held until 
April 2022. Before joining Wesfarmers, Ed worked 
in the private equity industry for more than 16 years, 
including the last 10 years with global investment 
firm Kohlberg, Kravis & Roberts. Ed has managed 
investments across a broad range of industries 
including healthcare, financial services, technology 
and media. Ed was appointed Chief Financial 
Officer, Health on 1 April 2022.

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14. Jenny Bryant
CHIEF HUMAN RESOURCES OFFICER 
WESFARMERS

Jenny was appointed Chief Human Resources Officer 
of Wesfarmers in October 2016. Prior to this, Jenny 
held  the role of Human Resources Director for Coles 
from 2011 to 2015 and then the role of Business 
Development Director, Coles.

Her previous work experience encompasses Mars, 
Vodafone and EMI Music in a number of global roles in 
operations, sales and marketing and human resources.

Jenny is a Director of the Flybuys joint venture with  
Coles Group Limited and a member of Chief  
Executive Women. 

15. Aaron Hood 
EXECUTIVE GENERAL MANAGER, 
BUSINESS DEVELOPMENT 
WESFARMERS

Aaron was appointed interim Executive General 
Manager, Business Development in July 2022.

Prior to this, Aaron was Chief Financial Officer 
of Wesfarmers Chemicals Energy & Fertilisers from 
2019, having joined Wesfarmers in 2017 as General 
Manager, Business Development. Aaron started his 
career with Macquarie Bank in Sydney, before 
moving into the private equity industry and leading 
investments for a prominent Australian family office. 
He invested across a range of industries in Australia 
and New Zealand with a focus on the retail, 
manufacturing and mining sectors. 

Aaron is a director of Covalent Lithium, representing 
Wesfarmers’ investment in the joint venture company 
developing the Mt Holland lithium project.

9. Vicki Robinson
EXECUTIVE GENERAL MANAGER, 
COMPANY SECRETARIAT 
WESFARMERS

Vicki was appointed Executive General Manager, 
Company Secretariat in March 2020 and is the 
Company Secretary of Wesfarmers. 

Prior to this, Vicki was General Manager, Legal 
(Corporate), playing a key role in many of Wesfarmers’ 
key corporate transactions. Vicki joined Wesfarmers 
in July 2003 as a Legal Counsel with the Corporate 
Solicitors Office. In 2007, Vicki moved to the role 
of General Manager for enGen, and returned 
to the Corporate Solicitors Office in 2009.

Vicki currently chairs the Advisory Board  
of Curtin University Law School. 

10. Tim Bult
MANAGING DIRECTOR  
WESFARMERS INDUSTRIAL 
AND SAFETY

Tim was appointed Managing Director of Wesfarmers 
Industrial and Safety in April 2020. 

Having joined Wesfarmers in 1999, Tim worked 
in commercial and business development roles 
within the Wesfarmers Energy division, before his 
appointment as General Manager of Wesfarmers 
Kleenheat Gas in 2005. In 2006, he was appointed 
Managing Director of Wesfarmers Energy. He was 
Executive General Manager, Business Development 
from July 2009 to August 2015. Tim was appointed 
Director, Associate Businesses and International 
Development of Wesfarmers in August 2015 and 
in 2018 was appointed Project Director for the 
demerger of Coles. In 2019, he was appointed 
Director, Associate Businesses and Corporate 
Projects at Wesfarmers. 

11. Nicole Sheffield
MANAGING DIRECTOR  
ONEDIGITAL

Nicole was appointed Managing Director 
of OneDigital in November 2021, and leads the 
strategy and implementation of the Group-wide 
data and digital ecosystem. This includes the 
OnePass membership program and OneData, 
formerly the Advanced Analytics Centre and from  
1 July 2022, the Catch business. 

Prior to joining Wesfarmers, Nicole held a number 
of leadership roles. She was the Executive General 
Manager, Community & Consumer, at Australia Post 
where she led the Australia Post retail network 
of 4,400 post offices, all digital channels and the 
customer contact centre. Previous roles include Chief 
Digital Officer and Managing Director, Digital Networks 
at News Corp Australia, overseeing digital strategy, 
audience and subscription growth, and Chief 
Executive of NewsLifeMedia, leading the lifestyle 
publishing division.

Nicole is the President of the Australian Retailers 
Association Council and a Director of Chief Executive 
Women.

12. Ian Hansen
MANAGING DIRECTOR 
WESFARMERS CHEMICALS, 
ENERGY & FERTILISERS

Ian has led the Wesfarmers Chemicals, Energy 
& Fertilisers division since July 2016. Prior to this, 
Ian was the Chief Operating Officer of that business. 
From October 2007 to July 2010 he was the Managing 
Director of the Chemicals and Fertilisers division.

During Ian’s almost 40 years with Wesfarmers, he 
has held a wide range of executive, operational and 
commercial management roles, primarily within the 
chemical, energy and fertiliser businesses. 

In addition to being a director of a number of 
Wesfarmers joint ventures, Ian is a member of the 
boards of several industry bodies including the 
International Fertilizer Association, Chemistry Australia, 
the Australian Latin American Business Council and 
previously the Kwinana Industries Council and 
Australian Institute of Management.

13. Naomi Flutter
EXECUTIVE GENERAL MANAGER, 
CORPORATE AFFAIRS 
WESFARMERS

Naomi joined Wesfarmers as Executive General 
Manager, Corporate Affairs in August 2018. 

Prior to this, Naomi worked for Deutsche Bank 
for 20 years, in roles including head of the Global 
Transaction Banking division for Australia and New 
Zealand and head of the Trust and Agency business 
across Asia. 

Naomi currently serves on the Council of the 
Australian National University where she is the  
Pro Chancellor and is a member of Chief  
Executive Women. 

 Wesfarmers 2022 Annual Report

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Operating and financial review

Operating and 
financial review
financial review

At Wesfarmers, our 
primary objective is to 
deliver satisfactory returns 
to shareholders over the 
long term through active 
capital allocation, financial 
discipline and quality 
management of a 
diversified portfolio 
of businesses. 

This operating and financial review 
sets out the Group’s objective, strategies 
and values. It also provides a review 
of our operational performance for the 
2022 financial year and a summary of 
the Group’s risks and outlook. The 2022 
financial performance is outlined for each 
division, together with a summary of its 
competitive environment, strategies, 
risks and prospects. This year, the 
operating and financial review introduces 
summaries for the Health and 
Wesfarmers OneDigital divisions. 

A key focus of the Group is ensuring 
that each of our divisions has a strong 
management team that is accountable 
for strategy development and execution, 
as well as day-to-day operational 
performance. Wesfarmers’ model of 
divisional autonomy drives accountability 
and focus within the divisions, with 
access to capital, and specialist 
support available within corporate 
and throughout the Group.

During the 2022 financial year, 
the Group continued to respond to 
disruptions and uncertainties in the 
external environment while maintaining its 
focus on active capital allocation, portfolio 
management and disciplined working 
capital management. These consistent 
areas of focus are directed at supporting 
the Group’s objective and our actions 
through the 2022 financial year reflect 
the long-term focus that Wesfarmers 
brings to investment decisions. 

The Group’s operations are supported 
by strong commercial and management 
capabilities across our operating divisions 
and through our corporate office 
functions, together with rigorous 
Group-wide governance.

I am pleased that we have continued 
to expand our sustainability disclosures 
in this annual report and on our website 
and have further integrated the Group’s 
sustainability and financial reporting. 
Our ambitions for sustainability-related 
actions continue to evolve and 
responsible management remains 
key to our value-creating strategies, 
recognising the strong linkages to financial 
performance over the long term. This is 
the fifth year Wesfarmers has reported 
using the Taskforce on Climate-related 
Financial Disclosures (TCFD) standards 
and further information is included 
from page 73 of this annual report.

The review should be read in conjunction 
with the financial statements, which are 
presented on pages 129 to 177 of this 
annual report.

Anthony Gianotti

Chief Financial Officer

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Wesfarmers 2022 Annual Report

The Wesfarmers Way

From our origins in 1914 as a Western Australian 
farmers’ cooperative, Wesfarmers has grown into 
one of Australia’s largest listed companies and private 
sector employers, with almost 120,000 team members, 
including approximately 3,600 Indigenous team members, 
and more than 515,000 shareholders. 

and fertilisers; mine development and construction; 
industrial and safety product distribution; gas 
processing and distribution; and a data and digital 
ecosystem. Wesfarmers’ businesses predominantly 
operate in Australia and New Zealand with the portfolio 
including some of these countries’ leading brands. 

Wesfarmers’ diverse businesses in this year’s review 
cover: home improvement, outdoor living and building 
materials; general merchandise and apparel; office 
and technology products; health, beauty and wellbeing 
products; wholesale pharmacy distribution; 
manufacturing and distribution of chemicals 

The Wesfarmers Way guides the company’s operating 
model and sets out our core values and value-creating 
strategies, which are directed at achieving the Group’s 
primary objective of providing a satisfactory return 
to shareholders.

OUR PRIMARY OBJECTIVE

To deliver a satisfactory  
return to shareholders

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VALUE-CREATING STRATEGIES

Strengthen existing 
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Secure growth  
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Renew the portfolio  
through value-adding 
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Ensure sustainability  
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Integrity

Openness

Accountability

Entrepreneurial  
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Operating and financial review

Our objective

Wesfarmers’ primary objective is to provide a satisfactory return to shareholders. 
The measure used by the Group to assess satisfactory returns is total shareholder 
return (TSR) over the long term. We measure our performance by comparing 
Wesfarmers’ TSR against that achieved by the broader Australian market.

Performance measures

Growth in TSR is achieved by improving 
returns from invested capital relative to the 
cost of that capital and by growing the 
capital base at a satisfactory rate of return 
on capital (ROC). 

Given TSR performance is influenced by 
the movement in Wesfarmers’ share price, 
which can be affected by factors outside 
the control of the company (including 
market sentiment, business cycles, interest 
rates and exchange rates), the Group 
focuses on return on equity (ROE) as 
a key internal performance indicator. 

While ROE is recognised as a fundamental 
measure of financial performance at 
a Group level, ROC has been adopted 
as the principal measure of performance 
for the mature businesses. ROC focuses 
divisional businesses on increasing 
earnings and/or increasing capital 
productivity by managing existing assets 
efficiently, as well as making an adequate 
return on any new capital deployed. 

In considering opportunities to drive 
performance against targets and support 
long-term value creation, divisional 
businesses have regard to key 
operational and customer metrics.

Targets are reviewed annually with 
reference to the performance of the 
broader market.

For emerging and digital businesses 
where ROC is not always appropriate, 
additional operating metrics and frequent 
performance reviews are also used 
to ensure that commercial disciplines 
are maintained.

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Wesfarmers 2022 Annual Report

Approach to delivering satisfactory returns to shareholders

The Group seeks to:

 − enhance the competitive position of existing businesses;

 − continue to invest in Group businesses where capital investment opportunities exceed return requirements; 

 − acquire or divest businesses where doing so delivers an increase in long-term shareholder value; and 

 − manage the Group’s balance sheet to achieve an appropriate risk profile, an optimised cost of capital and flexibility  

to take advantage of opportunities as they arise.

CASH FLOW GENERATION

BALANCE SHEET STRENGTH

DELIVERY OF LONG-TERM 
SHAREHOLDER RETURNS

 − Drive long-term earnings growth 

 − Diversity of funding sources 

 − Improve returns on invested capital 

 − Manage working capital effectively 

 − Optimise funding costs

 − Efficient distribution of franking credits 

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 − Strong capital expenditure processes 

 − Maintain strong credit metrics

 − Invest above the cost of capital 

 − Risk management of maturities

 − Maintain financial discipline

In generating cash flow and earnings, 
the Group seeks to employ excellent 
management teams that are empowered 
to drive long-term earnings growth. This is 
achieved through deploying best practice 
principles in operational execution and 
maintaining a long-term focus in regards 
to strategy and growth. 

The Group ensures strong discipline in 
relation to capital investment decisions 
and maintains a strong focus on effective 
working capital management in all of its 
businesses. 

The Group endeavours to achieve 
a cost of capital advantage while 
maintaining balance sheet strength 
and flexibility in order to be able to act 
when opportunities arise. This includes 
maintaining access to diverse sources 
of funding, including bank facilities and 
global bond markets, and optimising 
funding costs. The Group maintains 
strong credit metrics, in line with 
strong investment grade credit ratings, 
supported by good cash flow generation 
and disciplined capital management. 
Risk is managed by smoothing debt 
maturities over time, limiting total 
repayments in any given year.

to shareholders 

 − Effective capital management

With a focus on generating strong 
cash flows and maintaining balance 
sheet strength, the Group aims to deliver 
satisfactory returns to shareholders 
by growing earnings and improving 
returns on invested capital. 

Recognising the value of franking credits 
to shareholders, Wesfarmers also seeks 
to distribute these to shareholders. 

Depending upon circumstances, capital 
management decisions may also be 
taken from time to time where this activity 
is in shareholders’ interests.

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Approach to capital allocation

The Group evaluates a broad range of investment opportunities. Importantly, in assessing these opportunities, the Group applies 
a long-term horizon to investment decisions and incorporates a detailed assessment of sustainability considerations focused on our 
most material sustainability issues. The Group maintains strong commercial discipline in its approach to evaluating opportunities, 
with the most important criteria being whether the investment is going to create value for shareholders over time.

EXISTING PORTFOLIO

ADJACENT OPPORTUNITIES

VALUE-ACCRETIVE 
TRANSACTIONS

Deploying capital in its existing portfolio to 
drive productivity and to build businesses 
with unique capabilities and platforms 
in expanding markets.

Leveraging existing assets and 
capabilities to take advantage of adjacent 
opportunities that provide new sources 
of long-term growth.

Disciplined investments in opportunistic 
and value-accretive transactions through 
various ownership models, e.g. minority 
interest, full control and partnerships.

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Operating and financial review

Our value-creating strategies

Consistent with the Wesfarmers Way, the Group’s primary objective to provide 
a satisfactory return to shareholders is driven by four overarching strategies.

OPERATING EXCELLENCE

Strengthening existing businesses through operating excellence 
and satisfying customer needs.

ENTREPRENEURIAL INITIATIVE

Securing growth opportunities 
through entrepreneurial initiative.

Our achievements

 − Continued improvements in our 

customer offers, including reinvesting 
in value to drive business growth and 
improving merchandise ranges.

 − Prioritised stock availability with 

decisions to temporarily carry higher 
levels of stock in some categories 
in order to mitigate supply chain 
interruptions.

 − Further investment in our omnichannel 
offer across all retail businesses, and 
significant expansion of the Group’s 
online presence with $4.0 billion in online 
sales, including the Catch marketplace, 
and more than 100 million digital 
interactions with customers each month.1 

 − Focused on production plant efficiency 

and maintaining and growing customer 
relationships in our industrial businesses. 

 − Continued investment in technology 
enhancements to deliver operating 
efficiencies across supply chain 
and fulfilment.

 − Further investment in initiatives to drive 
improvements in the customer offer with 
a focus on instore experience, range 
expansion, technology enhancement 
and customer personalisation.

 − Maintained focus on talent through 
hiring, and training processes.

Our focus for the coming years

 − Bunnings will maintain its focus 

on driving long-term value creation 
by strengthening the customer offer, 
creating better experiences for customers 
and the wider community, expanding 
data and digital capabilities, growing the 
store network, accelerating trade growth 
and broadening commercial markets 
while maintaining cost discipline.

1  Represents monthly average over the last 

twelve months to 30 June 2022. Includes retail 
businesses only.

 − Kmart will focus on investing for future 
growth by progressing the development 
of technology capabilities throughout 
its operating model, improving the online 
offer and increasing personalisation, 
allowing the business to better anticipate 
customer needs and improve the 
customer experience.

 − Target will continue to improve 

its product offer and digital capabilities 
to deliver affordable quality with a more 
personalised experience. 

 − WesCEF will focus on maintaining 

strong operational performance across 
existing businesses, supporting Covalent 
in ensuring successful execution of the 
Mt Holland lithium project, and investing 
in innovative technologies and products.

 − Officeworks will continue to use 

best practice technology to deliver 
an improved customer experience 
and reduce costs, invest in opportunities 
to grow and expand its market position 
and make working from home and 
flexible working easy and engaging 
for the employer and employee.

 − Industrial and Safety will continue 
to work on improving business 
performance through enhancing the 
customer value proposition, as well 
as continued investment in data, 
digital and its core systems.

 − Health will focus on the integration 
of API and opportunities to improve 
the competitive position of API and 
its pharmacist partners, including 
through investment in data and 
digital capabilities.

 − OneDigital is focused on providing 
data and digital capabilities that are 
complementary and incremental to the 
retail businesses, as well as generating 
value for customers and divisions. 
OneDigital will continue to develop the 
OnePass membership program and 
the OneData data asset. Catch will 
focus on building the infrastructure and 
capabilities to support its long-term 
growth aspirations. 

Our achievements

 − Evolution of the Advanced Analytics 

Centre (AAC) into OneData, supporting 
the divisions to drive customer 
data insights and provide operating 
efficiencies.

 − Established OneDigital, which will bring 
together OnePass, OneData and Catch 
to enable the Group’s data and digital 
growth ambitions, increasing customer 
lifetime value and accelerating growth 
in the Group’s divisions.

 − Investment in the Group’s digital 

capabilities including the re-platforming 
of Bunnings’ website and investments 
in technology to improve and strengthen 
Kmart’s lowest cost position.
 − Expanded use of data analytics to 

optimise chemical plant performance.
 − Continued offer and format innovation 
across the retail businesses, including 
Officeworks’ launch of Flexiworks.
 − Ongoing strategic investment and 
collaboration with Square Peg.

Our focus for the coming years

 − Continue to reinforce entrepreneurial 

initiative.

 − Continue to investigate opportunities to 

expand production capacity in Chemicals 
and Energy businesses, including 
assessment of new technologies.
 − Leverage assets and digital expertise 
across the Wesfarmers Group to 
broaden multi-channel offerings across 
the retail businesses. 

 − Continue to develop OneDigital, including 
through the expansion of the OnePass 
membership program.

 − Invest in a multi-year digitally enabled 
store operating model and supply 
chain at Kmart to transform the instore 
customer experience and deliver 
operational efficiencies.

 − Align future growth opportunities with 

our net zero for Scope 1 and 2 emissions 
targets for our retail businesses by 2030 
and WesCEF by 2050.

 − Explore climate-related technologies 
and opportunities across the Group. 

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Wesfarmers 2022 Annual Report

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RENEWING THE PORTFOLIO

OPERATING SUSTAINABLY

Renewing the portfolio through 
value-adding transactions.

Ensuring sustainability through responsible long-term management.

Our achievements

Our achievements

Our focus for the coming years

 − Established the Health division, 
with API forming the foundation 
business and providing Wesfarmers 
with exposure to the growing health, 
beauty and wellbeing sector.

 − Completed the acquisition of Beaumont 

Tiles, to deliver more choice and 
convenience for Bunnings’ specialist 
trade customers.

 − Rebranded and repositioned the 

Club Catch membership program as 
OnePass, which will provide members 
with additional benefits and convenience 
when shopping across the Group’s 
retail businesses. 

 − Continued optimisation of store 

networks across Kmart Group and 
Bunnings.

Our focus for the coming years

 − Continue to progress development 

of the Mt Holland lithium project and 
the integration of API.

 − Maintain a strong focus and capability 
to evaluate growth opportunities where 
long-term shareholder value can be 
created.

 − Consider innovative investment 

approaches to complement traditional 
growth models and provide future 
optionality. 

 − Maintain a patient, disciplined and 

broad-scanning approach to investment 
opportunities.

 − Apply rigorous due diligence and post-
acquisition integration processes. 

 − Maintain a strong balance sheet 
to enable the Group to act 
opportunistically.

 − Consider opportunities to divest assets 
either in full or in part, where long-term 
shareholder value can be created.

 − Maintained an appropriately strong 

 − Maintaining balance sheet flexibility 

to allow the Group to withstand a range 
of economic conditions while continuing 
to support its operating activities and 
pursuit of investment opportunities. 

 − Continue to provide appropriate 

governance structures to safeguard 
future value creation. 

 − Continue to foster a more inclusive work 

environment which reflects the diversity in 
our community, including gender identity, 
race, ethnicity, indigeneity, thought, 
experience, religious beliefs, education, 
age, disability, family responsibilities and 
sexual orientation.

 − Invest in improved sustainability 

reporting systems. 

 − Seek to achieve gender balance of all 
teams throughout the Group, with 
gender balance defined as a minimum 
of 40 per cent of female and male 
genders.

 − Continue to look after the physical and 
mental health, safety and development 
of our people. 

 − Continue to focus on minimising our 

environmental footprint, implementing 
our climate change strategy and 
progressing towards meeting our net 
zero emission targets and aspirations. 

 − Contribute positively to the communities 

in which we operate. 

 − Continue to focus on ethical sourcing 

and modern slavery risk in supply chains, 
striving to eradicate the exploitation 
of vulnerable people. 

 − Build further awareness of the circular 

economy into all businesses. 

 − Increase focus on reconciliation 

and engagement with Indigenous 
people and maintaining our goal 
of employment parity.

and flexible balance sheet to 
support increased investment in 
strategic initiatives across the Group, 
including through the issuance of 
a EUR600 million (A$938 million)  
sustainability-linked bond in the 
European debt capital markets.

 − Continued to improve safety 

performance, with a 4.2 per cent 
reduction in the Group’s total recordable 
injury frequency rate (TRIFR).
 − Maintained a strong focus on the 
development of leaders and the 
broader team. 

 − Continued to promote diversity 
in our workplaces, including by 
increasing Indigenous representation 
in our workforce by 20 per cent from 
2,994 team members in June 2021 
to 3,601 team members in June 2022, 
and with progress towards gender 
balance. 

 − Managed talent development and 

succession in collaboration with our 
businesses to identify and develop 
succession options, focusing 
on critical roles and talent.

 − Continued to pay team members 
during prolonged COVID-related 
lockdowns, even in the event there 
was no meaningful work for them.
 − Continued to support the communities 
in which we operate, with indirect and 
direct contributions of $53.7 million 
made in the 2022 financial year. 
 − Delivered progress against the Group’s 
Climate Policy, with a 7.4 per cent 
reduction in market-based Scope 1 
and 2 emissions across the Group, 
excluding the Health division, as well 
as the announcement of WesCEF’s 
roadmap to net zero Scope 1 and 2 
emissions by 2050.

 − Maintained strong focus on our 

divisional ethical sourcing programs 
to increase supply chain transparency 
and to identify, report, and remediate 
instances of behaviour which is not 
consistent with our policies.

 Wesfarmers 2022 Annual Report

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Operating and financial review

Our value-creating strategies

Each strategy is underpinned by the Group’s well-established strategic planning 
framework. The key attributes of this approach are maintaining a long-term focus 
and acting sustainably in the creation of value and management of our businesses.

At a divisional level, detailed strategies are developed specific to the opportunities to improve each of our individual businesses. 
Divisional strategies are discussed within their respective summaries, starting on page 26 of this annual report. A core attribute 
of the Wesfarmers operating model is that each of our businesses operates with a high degree of autonomy rather than 
mandating detailed strategies or implementation plans. 

The Group aims to ensure that the following seven key enablers are in place in our 
businesses, with a goal of driving operating performance to best practice.

OUTSTANDING PEOPLE

COMMERCIAL EXCELLENCE

SOCIAL RESPONSIBILITY

Wesfarmers seeks to be an employer 
of choice. Striving to attract a diverse 
group of outstanding people and utilising 
their individual talents is one of the 
most essential elements in achieving 
sustainable success. Wesfarmers 
recognises that while great assets and 
strategies are important, it is people 
who drive outcomes.

EMPOWERING CULTURE

Wesfarmers recognises that 
an empowering culture is essential 
to engendering accountability for 
delivering the results agreed upon 
through the Group’s corporate planning 
framework. Wesfarmers uses stretch 
targets in objective setting and 
encourages team members to be 
proactive in driving long-term value 
creation in their businesses.

Wesfarmers seeks to ensure that 
it employs strong financial discipline 
in all of its decisions across the Group. 
Wesfarmers has a clear bias towards 
promoting strong commercial capability 
across its leadership base.

INNOVATION

Wesfarmers strives to develop a culture 
that encourages innovation, and rewards 
entrepreneurial initiative and creativity.

ROBUST FINANCIAL CAPACITY

By maintaining a strong balance sheet, 
the Group aims to provide a competitive 
cost of, and access to, capital in order 
to allow the Group to invest in its existing 
portfolio of businesses and to act when 
value-creating opportunities arise.

Respect for team members, customers 
and suppliers and a relentless focus 
on providing safe workplaces are 
fundamental to the way that Wesfarmers 
operates. Wesfarmers’ social 
responsibility extends to maintaining high 
standards of ethical conduct, human 
rights and community contribution.

SUSTAINABILITY

Wesfarmers seeks to operate its 
businesses sustainably. This includes 
a focus on using natural resources 
responsibly, managing businesses with 
deep carbon awareness and reducing the 
Group’s impacts on the environment.

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Core values

Our core values underpin all of the Group’s strategies and ways of working.

Integrity

Accountability

Acting honestly and ethically in all dealings 

Decision-making authority in divisions

Reinforcing a culture of doing what is right

Accountability for performance 

Protecting and enhancing reputation

Openness

Entrepreneurial spirit

Openness and honesty in reporting, feedback  
and ideas

Adopt an owner mindset

Accepting that people make mistakes and 
seeking to learn from them

Encourage teams to identify opportunities  
and apply commercial and financial acumen  
to support calculated risk-taking 

Encourage teams to take initiative and pursue 
new and innovative ways of delivering value

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Operating and financial review

Year in review

OVERVIEW

The Group reported a statutory net 
profit after tax of $2,352 million for the 
full-year ended 30 June 2022. Excluding 
significant items in the prior period, NPAT 
declined 2.9 per cent for the year.

The Group’s financial results for the year 
reflect the material impact of COVID-19 
on trading conditions during the first half, 
which included weeks where almost half 
of the Group’s retail stores were either 
subject to trading restrictions or closed. 
In the second half of the year, Wesfarmers 
delivered strong NPAT growth of  
13.1 per cent excluding significant items 
in the prior period, with trading conditions 
improving as restrictions eased. 

During the year, Wesfarmers established 
new businesses and continued to invest 
in its existing operations, developing 
platforms to support long-term 
shareholder returns. Consistent with 
Wesfarmers’ objective, the Group has 
maintained a long-term focus, advancing 
its sustainability agenda and supporting 
team members, customers and the 
community, while managing what 

continued to be a significantly disrupted 
operating environment.

The impact of the pandemic over 
the past two years has highlighted the 
importance of prioritising health and 
wellbeing, and the Group maintained its 
focus on providing a safe environment 
for customers and team members. 
Throughout the year, the Group provided  
a range of support measures, including 
additional paid leave and financial 
assistance to team members impacted 
by COVID-19. 

Bunnings and WesCEF delivered 
pleasing results for the year. Bunnings 
continued to demonstrate the resilience 
of its operating model and ability to 
deliver growth through a range of market 
conditions. Record earnings in WesCEF 
reflected elevated global commodity 
prices and continued strong operating 
performance. It was also pleasing to 
report continued improvement in the 
performance of the Industrial and 
Safety division.

Relative to the Group’s other divisions, 
Kmart Group was the most materially 

impacted by trading restrictions in 
the first half. Results for Kmart Group 
improved significantly in the second  
half, with Kmart and Target delivering 
strong second-half earnings growth of 
19.4 per cent, benefiting from actions 
taken in recent years to optimise the 
store network. Lower earnings in 
Officeworks for the year reflected the 
impact of trading restrictions and the 
margin impact of sales mix changes, 
as well as increased investment in supply 
chain, data and digital capabilities and 
to support the launch of new products.

The Group continued to invest in 
platforms for growth during the year. 
Wesfarmers established the Health 
division in March 2022 and continued to 
progress the development of a market-
leading data and digital ecosystem, with 
the formation of Wesfarmers OneDigital 
in the second half. Good progress also 
continued on the construction of the 
Mt Holland lithium project.

Further detail on divisional financial 
performances is outlined in pages  
26 to 62 of this annual report.

Net profit after tax

Earnings1

(excluding significant items)

$2,352m

(excluding discontinued operations and significant items)

$3,416m

Includes Coles

2022 2,352

2021

 2,421 

Post-AASB 16
2020

 2,075 

Pre-AASB 16
2020

2019

2018

 2,091 

 2,339 

 2,772 

4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
0

2022  3,416 

2021

 3,550 

Post-AASB 16
2020

 2,942 

Pre-AASB 16
2020

2019

2018

 2,964 

 2,974 

 2,650 

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1  EBIT after interest on lease liabilities.

Return on equity (R12)

Free cash flow

(excluding significant items)

29.4%

Includes Coles

$1,110m

Includes Coles

2022

2021

Post-AASB 16
2020

Pre-AASB 16
2020

2019

2018

29.4

 26.1 

 22.1 

 21.1 

 19.2 

 11.7 

2022  1,110 

2021

 2,741 

Post-AASB 16
2020

 5,188 

Pre-AASB 16
2020

2019

2018

 4,239 

 2,963 

 3,422 

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Wesfarmers 2022 Annual Report

 REPORTED (INCLUDING SIGNIFICANT ITEMS)

2021 excludes post-tax $41 million of restructuring 
costs in Kmart Group. 

2020 excludes post-tax significant items including: 
$520 million of non-cash impairments, write-offs and 
provisions in Kmart Group, $298 million non-cash 
impairment of Industrial and Safety, $203 million gain 
on the sale of the 10.1 per cent interest in Coles and 
$154 million revaluation of the retained interest, and 
a benefit of $83 million from the finalisation of tax 
positions on prior year disposals.

2019 excludes post-tax significant items including: 
$2,264 million gain on demerger of Coles, $645 million 
gain on sale of Bengalla, $244 million gain on sale of 
Kmart Tyre and Auto Service (KTAS), $120 million gain 
on sale of Quadrant Energy and $102 million provision 
for Coles supply chain automation.

2018 excludes post-tax significant items including: 
$300 million non-cash impairment of Target,  
$1,275 million relating to discontinued operations 
which includes the $953 million (£544 million) non-
cash impairment of Bunnings United Kingdom and 
Ireland (BUKI), $70 million (£40 million) store closure 
provision in BUKI, $375 million (£210 million) loss 
on sale relating to BUKI and $123 million gain on 
sale of the Curragh Coal Mine. 

OPERATING CASH FLOW

Reported operating cash flows declined 
32.0 per cent to $2,301 million. Cash 
flow results reflected the continued 
normalisation of net working capital 
positions in the retail businesses 
following the abnormally low balances 
recorded during the 2020 and 2021 
financial years, particularly in Bunnings. 
Operating cash flows were also impacted 
by increased tax payments on higher tax 
instalment rates, and significantly higher 
utilisation of employee leave provisions 
following periods of travel restriction.

The increase in net financial debt 
was largely driven by the distribution 
of $2.3 billion of surplus cash by way 
of capital return to shareholders 
in December 2021, the payment 
of $1.9 billion of fully-franked dividends, 
and higher levels of capital expenditure 
and acquisition investment during the year.

DEBT MANAGEMENT 
AND FINANCING

In October 2021, a EUR600 million 
(A$866 million) Euro bond matured 
and was replaced with the issuance 

of the Group’s first Euro denominated 
sustainability-linked bond, with 
interest rates linked to the Group’s 
decarbonisation strategies.

Other finance costs decreased  
18.6 per cent to $96 million for the  
year, reflecting lower average cost 
of borrowing and higher capitalised 
interest for the year.

The Group’s strong credit ratings 
remained unchanged during the year, 
with a rating from Moody’s Investors 
Services of A3 (stable) and a rating of 
A- (stable) from Standard & Poor’s.

CAPITAL EXPENDITURE

Group capital employed

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Gross capital expenditure of 
$1,144 million was 27.7 per cent 
higher than the prior year, largely due 
to $304 million of capital expenditure 
and $34 million of capitalised interest 
relating to the ongoing development of 
the Mt Holland lithium project. Proceeds 
from the sale of property, plant and 
equipment of $260 million were $4 million 
below the prior year. The resulting net 
capital expenditure of $884 million was 
$252 million, or 39.9 per cent, higher 
than the prior year.

FREE CASH FLOW

Free cash flows of $1,110 million were 
59.5 per cent lower than the prior year, 
reflecting lower operating cash flows, 
payment of cash consideration for the 
acquisitions of API and Beaumont Tiles 
and increased net capital expenditure. 
These were partially offset by proceeds 
from the partial sale of the Group’s 
investment in Coles.

BALANCE SHEET

The Group’s closing inventory position 
reflects stock acquired as part of the 
API and Beaumont Tiles transactions, 
normalisation of stock levels in Bunnings 
following extraordinary sales growth since 
FY2019, the impact of higher commodity 
prices for WesCEF and retail unit cost 
inflation. Kmart’s inventory position 
continues to reflect its strategy to hold 
additional stock of non-seasonal products 
to mitigate supply chain variability. 

The Group recorded a net financial  
debt position of $4,296 million as at  
30 June 2022, comprising interest-bearing 
liabilities, excluding lease and liabilities, 
and net of cross-currency swap assets 
and cash at bank and on deposit. This 
compares to a net financial cash position 
of $109 million as at 30 June 2021. 

Year ended 30 June1

Inventories
Receivables and prepayments
Trade and other payables
Other
Net working capital 

Property, plant and equipment
Goodwill and intangibles
Mine properties
Other assets
Provisions and other liabilities

Total capital employed 

Net financial debt2
Net tax balances
Net right-of-use asset/(lease liability)

Total net assets 

2022
$m

 6,084 
 2,364 
 (5,362)
238
 3,324 

 3,621 
 4,651 
 1,150 
 1,877 
 (1,815)

 12,808 

 (4,296)
 578 
 (1,109)

 7,981 

2021
$m

 4,502 
 1,434 
 (4,234)
228
 1,930 

 3,496 
 3,902 
 865 
 1,963 
(1,744)

 10,412 

109
264
(1,070) 

 9,715 

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1  Balances reflect the management balance sheet, which is based on different classification and groupings 

than the balance sheet in the financial statements.  

2  Net financial debt takes account of cross-currency interest swaps and interest rate swap contracts. 

Excludes lease liabilities.

Cash capital expenditure

Year ended 30 June

Bunnings

Kmart Group

WesCEF

Officeworks

Industrial and Safety 

Health

Other

Gross capital expenditure

Sale of property, plant and equipment

Net capital expenditure

2022
$m

 349 

 150 

 455 

 68

 64 

 3 

 55 

 1,144 

 (260)

 884 

2021
$m

445

185

137

65

62

-

2

896

(264)

632

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23

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Operating and financial review

Year in review

DIVIDENDS

A key component of total shareholder 
return is the dividends paid to shareholders.

The Group’s dividend policy considers 
available franking credits, current 
earnings and cash flows, future cash 
flow requirements and targeted credit 
metrics. The Board has determined to 
pay a fully-franked ordinary final dividend 
of 100 cents per share, taking the 
full-year ordinary dividend to 180 cents 
per share. The final dividend will be 
paid on 6 October 2022.

Given the preference of many 
shareholders to receive dividends in 
the form of equity, the directors have 
decided to continue the operation of 
the Dividend Investment Plan (the Plan). 
The allocation price for shares issued 
under the Plan will be calculated as the 
average of the daily volume-weighted 
average price of Wesfarmers shares on 
each of the 15 consecutive trading days 
from and including the third trading 
day after the record date.

The last date for receipt of applications 
to participate in, or to cease or  
vary participation in, the Plan, is  
2 September 2022. No discount will 
apply to the allocation price and the  
Plan will not be underwritten. Shares 
to be allocated under the Plan will 
be transferred to participants on  
6 October 2022. Given the Group’s 
strong credit metrics, it is intended that 
any shares to be issued under the Plan 
will be acquired on-market and 
transferred to participants.

24

Wesfarmers 2022 Annual Report

Fixed financial obligations

Dividends per share

Lease liabilities1 

Bank facilities & bonds 

$7.1b

$4.8b

1  Represents total discounted lease liabilities 

as at 30 June 2022.

 ORDINARY DIVIDENDS

 SPECIAL DIVIDENDS

180cents

Includes Coles

300

250

200

150

100

50

0

2022

180

2021

20201

20192

2018

178

152

178

223

18

19

20

21

22

1  Excludes a fully-franked special dividend 

of 18 cents per share, relating to the distribution 
of the after-tax profit on the sale of the Group’s 
10.1 per cent interest in Coles during the period. 

2  Excludes a fully-franked special dividend  

of 100 cents per share. 

Debt maturity profile ($m)1,2

Other finance costs ($m) 

 DRAWN BANK FACILITIES 

 UNDRAWN BANK FACILITIES

 CAPITAL MARKET DEBT

300

250

200

150

100

50

0

18

19

20

21

22

1,800

1,500

1,200

900

600

300

0

23 24 25 26 27 28 29 30 31 32

1  As at 30 June 2022.

2  Capital market debt is net of cross-currency 

interest rate swaps.

TSR1: Wesfarmers and ASX 100
(last five years)

 WESFARMERS LIMITED TSR INDEX1

 ASX 100 ACCUMULATION INDEX

500

400

300

200

100

0

17

18

19

20

21

22

1  Assumes 100 per cent dividend reinvestment 
on the ex-dividend date, and full participation 
in capital management initiatives (such as rights 
issues and share buybacks). Excludes value 
of franking credits. Source: Bloomberg

RISK

Wesfarmers recognises the importance 
of, and is committed to, the identification, 
monitoring and optimal management of 
risks associated with its activities across 
the Group. 

The following information sets out the 
material Group-wide risks. These are 
not in any particular order and do not 
include generic risks such as changes 
to macro-economic conditions affecting 
businesses and households in Australia, 
which would affect all companies with a 
large domestic presence and which could 
have an effect on future performance. 

Since the 2020 financial year, 
COVID-19 has impacted the Group 
in various ways. The Group is managing 
the continued impacts of COVID-19 as 
part of usual business operations, and 
associated risks are being managed 
by understanding the effect of COVID-19 
across all key risk areas. 

In line with the prior year, increased 
information on climate-related risks 
is provided on pages 73 to 84 of this 
annual report.

Strategic risks

 − Competition 

 − Strategy execution

 − Business model disruption

 − Digital disruption 

 − Changing customer expectations

 − Portfolio management

 − Climate-related risks

Operational risks

 − Technology, cyber security and  

data-related risks, inclusive of privacy 
and data optimisation

 − Business disruption, loss of major 
infrastructure and physical security

 − Risks inherent in distribution and sale 
of products, including product safety 

 − Conduct risk

 − Human rights risks, including 

modern slavery in own operations 
and supply chain

 − Climate-related risks and emissions 

management

 − Risks to the health, safety or wellbeing 
of team members and customers

 − Risks inherent in asset management, 

including process safety risk

 − Environmental and sustainability risks

 − Talent attraction, retention and 

engagement

 − Supply chain and inventory 

management

Regulatory risks

 − Compliance with applicable laws, 

regulations and standards

 − Regulatory or legislative change

Financial risks

 − Currency and commodity price 

movements

 − Liquidity and access to funding

Further information on risk management, 
including policies, responsibility and 
certification, can be found on page 92 
of this annual report and in the corporate 
governance section of the company’s 
website at www.wesfarmers.com.au/cg

PROSPECTS

The Group maintains its focus on 
long-term value creation and continues 
to invest to strengthen its existing 
businesses, renew the portfolio and 
develop new platforms for growth. 
These actions, together with a strong 
balance sheet and portfolio of cash-
generative businesses with market-
leading positions, make Wesfarmers well 
positioned to deliver satisfactory returns 
to shareholders over the long term.

The Group’s strong balance sheet and 
financial discipline support ongoing 
investment in existing operations and 
provide the capacity to pursue value-
accretive opportunities that may arise. 

Wesfarmers maintains the flexibility 
to respond to potential risks and 
opportunities under a range of economic 
scenarios. Wesfarmers’ businesses are 
largely engaged in the provision of 
essential and everyday products to retail 
and commercial customers, and are well 
placed to adjust to changes in demand. 

The Australian economy is starting from 
a strong base with low unemployment 
and high levels of household savings, but 
the effects of inflation and higher living 
costs are placing pressure on parts of 
the economy, including household 
budgets. The Group continues to actively 
manage inflation, leveraging its scale and 
sourcing capabilities to mitigate the 
impact of cost increases. While general 

inflation remains elevated, prices for 
some inputs such as cotton, timber and 
container shipping have moderated in 
recent months. 

The Group’s retail businesses are well 
positioned as cost of living pressures 
impact household budgets and value 
once again becomes increasingly 
important to customers. The retail 
businesses will maintain their focus 
on meeting the changing needs 
of customers and delivering even greater 
value, quality and convenience. This will 
be supported by continued investment 
in divisional data and digital capabilities, 
as well as the additional growth and 
efficiency benefits provided through 
OneDigital. 

The performance of the Group’s 
industrial businesses remains subject 
to international commodity prices, foreign 
exchange rates, competitive factors and 
seasonal outcomes. WesCEF is expected 
to continue to benefit from elevated 
commodity prices and will continue to 
evaluate capacity expansion opportunities 
for its existing operations, and progress 
the development of the Mt Holland  
lithium project. 

Wesfarmers will continue to invest 
in its existing operations and in the 
development of platforms for long-term 
growth. 

Wesfarmers will continue to manage its 
businesses with deep carbon awareness, 
actively considering climate risks when 
making key business decisions and 
managing the portfolio. The Group 
remains focused on delivering progress 
against net zero and renewable electricity 
targets detailed on page 78 of this 
annual report, and and will seek to make 
disciplined investments to strengthen the 
climate resilience of its businesses.

The Group will continue to develop 
and enhance its portfolio, building on 
its unique capabilities and platforms to 
take advantage of growth opportunities 
within existing businesses and to pursue 
investments that create value for 
shareholders over the long term.

 Wesfarmers 2022 Annual Report

25

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Operating and financial review | Bunnings

Bunnings

Year in review

Revenue

EBT

$17,754m

$2,204m

2022

17,754 

2021

2020

2019

2018

16,871 

14,999 

13,166 

12,544 

2022

 2,204 

2021

2020

2019

2018

2,185

 1,826 

 1,626 

 1,504 

Key financial indicators

Post-AASB 16

Pre-AASB 16

For the year ended 30 June

2022

2021

2020

2020

2019

2018

Revenue ($m)

 17,754   16,871   14,999   14,999  13,166  12,544 

Earnings before tax ($m)

 2,204 

 2,185 

 1,826 

 1,852 

 1,626 

 1,504 

Capital employed R12 ($m) 

 2,854 

 2,651 

 3,146 

 2,997 

 3,220 

 3,045 

Return on capital employed R12 (%) 

Cash capital expenditure ($m)

77.2

349

82.4

445

58.0

511

61.8

511

50.5

 470 

49.4

 497 

26

Wesfarmers 2022 Annual Report

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Our performance

Outlook

Bunnings continues to be well 
positioned for a range of market 
conditions, and will benefit from the 
diversity of its business, focus on 
necessity products and strength of 
its offer across consumer DIY and 
commercial markets. The demand 
outlook across consumer and 
commercial is supported by a solid 
pipeline of renovation and building 
activity, as well as incremental DIY 
growth opportunities as customers 
continue to focus on maintaining 
and improving their homes. 

Bunnings continues to manage 
operating complexities from COVID-19 
and supply chain disruptions, as well 
as navigate inflationary pressures, with 
a clear focus on cost discipline, driving 
productivity improvements and delivering 
market-leading value for customers. 

Bunnings remains focused on driving 
long-term growth by building more 
connected experiences across all 
channels, deepening its relationship 
with commercial customers, and 
evolving its supply chain to support 
the continued growth of the business. 

Michael Schneider
Managing Director
Bunnings Group

Revenue for Bunnings increased  
5.2 per cent to $17,754 million for 
the year, with earnings increasing  
0.9 per cent to $2,204 million. 

Bunnings’ strong financial results follow 
two years of extraordinary growth, with 
sales and earnings on average increasing 
more than 10 per cent per annum through 
the past three years.

Despite the continued impact of COVID-
related interruptions and supply chain 
challenges during the year, the Bunnings 
team maintained its focus on delivering 
more value for customers, investing in 
future growth initiatives, and keeping 
team members and customers safe.

Total store sales increased 4.2 per cent 
for the year, with store-on-store sales 
increasing 4.8 per cent. Sales growth 
was recorded across all major trading 
regions, supported by strong growth 
from commercial customers and solid 
consumer demand, while cycling elevated 
levels of DIY activity in the prior year. 
In the second half, total store sales 
increased 7.8 per cent.

During the year, Bunnings continued 
to invest to improve the customer 
experience instore and through digital 
channels. Productivity initiatives, new 
instore technology and layout changes 
made Bunnings stores easier to shop 
and enabled team members to spend 
more time helping customers, while 
a new web platform and enhanced 
search function provided improvements 
for customers shopping online. There 
was also strong uptake of Flybuys by 
Bunnings customers, allowing 
more tailored offers and delivering 
additional value. 

Strong progress was made on the 
commercial ‘Whole of Build’ strategy, 
with new product ranges, enhanced 
capability of frame and truss, and 
improved sales support. Bunnings 
also launched a new fully-transactable 
e-commerce platform for commercial 
customers, and made further 
improvements to the PowerPass app 
with increasing usage by commercial 
customers to support ease of shop.

Tool Kit Depot expanded into Western 
Australia with six stores catering to local 
demand for professional tools and the 
acquisition of Beaumont Tiles completed 
in November 2021.

 Wesfarmers 2022 Annual Report

27

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating and financial review | Bunnings

Our business

Sustainability performance

Bunnings is the leading retailer of home 
improvement and lifestyle products in 
Australia and New Zealand, and a major 
supplier to project builders, commercial 
tradespeople and the housing industry. 
Bunnings operates a network of 507 
locations, including large warehouse 
stores, smaller format stores, trade 
centres, specialist stores as well 
as online. 

Bunnings’ three pillars remain core 
to how it delivers for customers; lowest 
prices, widest range, and best 
experience. This comes to life through 
growing the addressable market and 
the ways that Bunnings connects 
and serves its customers.

Bunnings employs nearly 53,000 
team members across Australia and 
New Zealand. Over the past 10 years, 
Bunnings has evolved from a warehouse 
model offering around 34,000 hardware 
and home improvement products to an 
omnichannel business with over 110,000 
home, commercial and lifestyle products 
across its instore, online and 
marketplace offers. 

Bunnings is expanding its brand reach 
through the opening and expansion of 
stores, growing specialist retail brands, 
digital innovation and by deepening its 
commercial relationships. The focus is 
on creating value for customers and 
delivering the best experience, whether 
online, in-home, instore or on-site, while 
working to ensure products are sourced 
ethically and responsibly. 

CLIMATE AND ENERGY 

Bunnings recognises that business 
has an important part to play in reducing 
emissions and addressing climate 
change. During the year, Bunnings’ 
Scope 1 and 2 market-based emissions 
reduced by 4.9 per cent, as it progresses 
towards its targets to achieve 
100 per cent renewable electricity 
by 2025 and net zero Scope 1 and 2 
emissions by 2030.

In December 2021, Bunnings entered 
a long-term contract with CleanCo 
Queensland Limited to power its 
Queensland network with renewable 
electricity. Over 50 per cent of the entire 
Bunnings network is now powered by 
renewable electricity. In New Zealand, 
Bunnings’ network is powered by  
100 per cent renewable electricity.

Bunnings also continued to increase 
local generation of renewable power 
across the network with 12 new solar 
PV systems rolled out during the year. 
As of 30 June 2022, 96 solar PV 
systems have been installed on 
Bunnings stores across Australia. 

28

Wesfarmers 2022 Annual Report

Safety performance

Aboriginal and Torres Strait 
Islander team members

TOTAL RECORDABLE  
INJURY FREQUENCY RATE1

11.3

2022

11.3

2021

2020

2019

2018

11.3

10.3

11.2

11.6

1  TRIFR measures the number of lost time 
and medical treatment injuries per million 
hours worked.

1,288

2022

1,288

2021

2020

2019

2018

1,026

853

687

637

Greenhouse gas emissions
SCOPE 1 & 2

Operational waste

 MARKET-BASED1

 LOCATION-BASED2

 RECOVERED

 DISPOSED

104.9ktCO2e

78.5kt

2022

104.9 220.5

2022

43.1

35.4

2021

2020

2019

2018

35.2

32.8

31.0

25.7

31.7

29.0

27.8

34.1

2021

110.3 234.5

2020

2019

n.a. 262.6

n.a. 269.5

20183

n.a. 259.7

1  Emissions based on GHG Protocol Scope 2 

market-based reporting standard.

2  Scope 1 and 2 data includes emissions 

for businesses where we have operational 
control under the National Greenhouse and 
Energy Reporting Act 2007 (Cth) (NGER Act) 
and emissions in international operations.

3  Excluding discontinued operations.

Community contributions1

Ethical sourcing program

 DIRECT

 INDIRECT

$29.8m

2022

8.0

21.8

2021

2020

2019

2018

7.6

9.4

5.4

5.0

19.8

33.5

44.6

41.7

1  Direct community contributions include  

cash in-kind and time contributions. Indirect 
community contributions include contributions 
from team members and customers enabled 
by our businesses.

  1,366 sites in the ethical sourcing program 

  699 sites were monitored this year (51%)1

  35 sites in the program had reportable 
breaches (3%)2

1  The frequency of monitoring varies depending on 
prior audit findings and the level of assessed risk.
2  We work with our suppliers to remedy reportable 
breaches. In certain very rare circumstances, we 
may suspend or terminate our arrangements with 
that supplier.

To ensure that groups which had 
planned sausage sizzles could find other 
ways to fundraise, donations of $500 gift 
cards were made to more than 1,600 
community groups, representing an 
investment of over $800,000. 

The Australian team supported Share 
the Dignity’s ‘It’s in the Bag’ campaign 
for the fifth consecutive year. Over two 
weeks, more than 92,000 bags of 
personal hygiene products were collected, 
including from team members, for women 
and girls experiencing homelessness 
and domestic violence.

For the second year, the Bunnings New 
Zealand team supported the ‘I Got Your 
Back Pack’ campaign, with customers 
and team members invited to donate 
toiletries and toys to support families in 
refuges as a result of domestic violence.

Bunnings’ commitment to supporting 
communities in times of crisis was 
demonstrated in several ways this year. 

In July 2021, Westport on the west 
coast of New Zealand experienced the 
area’s biggest flood in almost a century. 
Bunnings assisted relief efforts by 
providing product donations to help 
care for affected residents.

Following the jumping castle tragedy 
at Devonport’s Hillcrest Primary School 
in December 2021, the Bunnings team 
in Tasmania ran community sausage 
sizzles at each store, raising and 
contributing $20,000 in support of the 
school, families, and local community. 

In January 2022, the eruption of an 
underwater volcano off the coast of 
Tonga triggered a tsunami across the 
Pacific. Alongside suppliers, Bunnings 
donated safety equipment and essential 
items to the Tongan community.

In response to devastating floods 
in northern New South Wales  
and southern Queensland in late 
February 2022, Bunnings team members 
came together and ran community 
sausage sizzles across all stores in 
Australia. Bunnings helped raise and 
contribute $500,000 for the GIVIT 
Storms and Flooding Appeal.

Bunnings supported FightMND for 
the fourth consecutive year, helping 
to raise and contribute $1.5 million. 
Beanies were sold in all Australian 
stores and trade centres, and via 
the Bunnings website.

 Wesfarmers 2022 Annual Report

29

CIRCULAR ECONOMY 

COMMUNITY

Following a successful trial in selected 
stores in Victoria, in November 2021 
Bunnings introduced a national battery 
recycling program across its Australian 
network, to provide customers with an 
instore recycling solution for household 
and power tool batteries. The program 
offers the largest network of power tool 
battery recycling locations in Australia. 

In June 2022, a similar program was 
launched across Bunnings’ New Zealand 
sites and Tool Kit Depot stores in South 
Australia and Western Australia. 
Since these programs commenced, 
over 65 tonnes of batteries have been 
collected for recycling in collaboration 
with Envirostream Australia.

Bunnings has a longstanding 
commitment to supporting the 
communities in which it operates.

COVID-19 continued to have 
a significant impact on Bunnings’ 
ability to deliver grassroots community 
activities as planned, particularly in the 
first half of the year. While traditional 
areas of community support such as 
the community sausage sizzles were 
unavailable at times, Bunnings continued 
to find innovative ways to connect with 
the community and helped community 
organisations to raise over $29 million 
through more than 54,000 community 
activities during the year. 

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Operating and financial review | Bunnings

HEALTH AND WELLBEING 

At Bunnings, team members are at the 
heart of the business and their safety and 
wellbeing remain the highest priority.

Bunnings’ key focus is on eliminating 
fatalities and preventing work-related 
injuries, illnesses and incidents as well 
as protecting and promoting the 
wellbeing of the team.

During the year, the business focused 
on evolving the safety strategy through 
enabling leadership and engagement. 
More than 19,700 team members 
completed manual handling training, 
over 380 new leaders completed leading 
safety training and more than 260 forklift 
coaches completed forklift coach training.

This financial year, TRIFR remained the 
same as the previous year. The number 
of team member injuries recorded during 
the year decreased by 4.0 per cent, 
which is attributed to the easing 
of COVID-19 restrictions.

COVID-19 continued to present a risk 
to team member health and wellbeing.  
In March 2022, in partnership with 
BizHealth, Bunnings team members 
were offered COVID-19 vaccination 
booster doses through 75 vaccination 
hubs at centrally-located stores in 
Australia. Bunnings also partnered with 
the Victorian Department of Health to 
establish 21 vaccination hubs at selected 
stores across Victoria to encourage 
community participation in the COVID-19 
booster program.

Bunnings also focused on the mental 
health and wellbeing of their team, and 
during the year the Stronger Together 
wellbeing campaign continued, with 
a focus on taking a break and team 
gatherings to connect and check-in 
on teammates.

Bunnings continued to contribute 
to the Corporate Mental Health Alliance 
as a founding member, to work 
collaboratively with other businesses 
towards a common goal of providing 
a mentally healthy workplace for all.

The focus for the year ahead will be 
to empower the Bunnings team to be 
physically and mentally at their best.

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Wesfarmers 2022 Annual Report

Bunnings collaborates with Indigenous artists 
through exclusive plant pot range 

Bunnings aims to support Indigenous communities in several ways, including 
by helping to build commercially sustainable industries in remote communities, 
by ranging products that benefit local Indigenous businesses and organisations. 

Most recently, Bunnings proudly partnered with their supplier Homewares and the 
Warlukurlangu Artists Aboriginal Corporation to support Australian Indigenous 
artists through an exclusive indoor plant pot range. Introduced in September 2021, 
the range showcases the work of 13 Indigenous artists across 16 plant pots. 

Warlukurlangu Artists Aboriginal Corporation is one of the longest running  
100 per cent Aboriginal-owned art centres in Australia. As a not-for-profit 
organisation, proceeds from this pot range directly support Warlukurlangu artists 
who reside in the remote, central Australian desert communities of Yuendumu  
and Nyirippi. 

Warlukurlangu translates to ‘belonging to fire’ in Waripiri, the local language,  
and is named after a fire dreaming site west of Yuendumu. Warlukurlangu  
artists are renowned for their colourful, acrylic paintings and prints, in Australia 
and internationally. This range respects the wishes of the artists and their 
community foremost and has been carefully designed in alignment with the 
Indigenous Art Code. 

Bunnings will continue to offer these pots as part of their core range, available 
in all stores across the Australian store network and online. Further information 
on the Indigenous pots range and the artists can be viewed at https://www.
bunnings.com.au/campaign/indigenous-pots

STRATEGY

Bunnings provides its customers with the widest range of home and lifestyle products and is committed to delivering the best experience, supported by a policy 
of lowest prices every day. Online and instore, the business is focused on creating more ways to inspire and support customers to build, improve and maintain 
their homes. For its commercial customers, Bunnings seeks to provide value, service and convenience and turns products and services into solutions that help 
businesses grow and run better. Bunnings sets out to attract high-quality team members and to provide them with a safe and rewarding working environment.

Strategies

Achievements

Focus for the coming years

More customer 
value

 – Strong investment in maintaining price leadership
 – More products at lower prices 365 days – not just 

as promotional buys

 – Created more value for customers on products that matter 

most to them

 – Disciplined focus on lowest cost

 – Reinvest in price by simplifying processes and systems to lower 

costs

 – Improve customer order fulfilment efficiency
 – Deliver low prices by lowering the cost of goods
 – Own-brand products to provide greater value in selected categories

Better customer 
experiences

 – Delivered solutions that made it easier for the team to serve 

 – Better customer experiences and deeper engagement: online,  

customers

in-home, instore or on-site

 – Removed millions of hours of unnecessary task work in stores 

so teams can spend more time with customers

 – Further enhancements to PowerPass app, Product Finder 

app and Picking app

 – Evolved and improved click and collect, and drive and  

collect services

 – Used data more effectively to improve the customer 

experience

 – Innovate and simplify to improve efficiency and reinvest in service
 – Leverage data investments to personalise customer experiences
 – Make instore service even easier and more convenient for customers
 – Continue to enhance online search and functionality to improve ease 

of shop

Greater brand 
reach

 – Opened net one new Bunnings store, two trade centres 

 – Network expansion opportunities across Bunnings, Tool Kit Depot 

and six Tool Kit Depot stores

and Beaumont Tiles

 – Expanded seven stores to improve the local offer
 – Significantly expanded Bunnings’ digital ecosystem
 – Reinvestment in store network

 – Targeted store reinvestment
 – More personalised digital communications
 – Expand Frame and Truss offering
 – Expand Bunnings Marketplace offering 

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Deeper 
commercial 
engagement

 – Improved instore experience with new trade area design, 

 – Continue to leverage and enhance core strengths of a total market 

self-checkouts and Load’N’Go program

capability: stores, trade centres, in-field and digital

 – Leveraged Customer Relationship Management (CRM) 
and analytics to improve service offer through greater 
customer insights

 – Evolved PowerPass app to make it easier to use
 – Acquired Beaumont Tiles, and made range available 

to Bunnings’ commercial customers

 – Launch new solutions for trades, builders and organisations
 – Strengthen product range and offer within Tool Kit Depot and 

Beaumont Tiles

 – Evolve PowerPass membership program to include  

Beaumont Tiles and provide members greater benefits

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More 
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 – Expanded ranges across many product categories
 – Further product and project innovation with new products 

and more instore displays

 – Rapidly adjust to meet changing lifestyle, technology and generational 

trends to continuously improve both instore and online offers

 – Use space better to accommodate new ranges, layouts and product 

 – Expanded online offer
 – Provided more inspiration, innovation and information 

to customers

adjacencies

 – Invest in technology to optimise inventory and supply chain 

management to improve in-stock position

RISK MITIGATION

Bunnings recognises that taking appropriate business risks is a critical aspect of generating acceptable business returns. In doing so, it seeks to appropriately  
manage risks to minimise losses and maximise opportunities.

Risks deemed unacceptable in terms of the business’ risk appetite are subject to appropriate control and mitigation measures to reduce the negative impact 
on the business. The level of controls implemented is commensurate with the impact on the business from the risk occurring (taking account of likelihood 
and consequence).

COVID-19 remains a feature of the operating environment. It is inherent across multiple key risk areas and not separated below. COVID-19 mitigation activities 
continue to evolve with changing circumstances and in line with public health guidance. Additionally, Bunnings recognises climate change as a key risk 
(and opportunity) which is discussed elsewhere within this annual report.

Risk

Safety

Mitigation

 – Continued focus on critical risks and targeted training and awareness campaigns
 – Focus on how we move product safely through our supply chains, our warehouses and to the end customer

Talent recruitment 
and retention

 – Strategies directed at creating and maintaining status as an employer of choice
 – Succession planning, retention and development plans

New and existing 
competitors

 – Relentless focus on strategic pillars of lowest price, widest range and best experience 
 – Ongoing strategies to increase customer centricity and deepen customer engagement

Reputation

 – Strong culture of ‘doing the right thing’ 
 – Focus on responsible sourcing and product standards
 – Ongoing regulatory compliance training

Supply chain 
disruptions

 – Structured range review processes incorporating alternative sources of supply and extended lead times on orders where necessary
 – Continued development of domestic supply chain capabilities

Data and IT 
security

 – Strategy built around protection, detection and responding to threats
 – Use of leading technology to protect against cyber incidents 
 – Strong internal processes to protect and control data access

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Operating and financial review | Kmart Group

Kmart Group

Year in review

1  The 2021 earnings before tax for Kmart Group 
excludes $59 million of restructuring costs.
2  The 2020 earnings before tax for Kmart Group 

excludes pre-tax impairment of the Target 
brand name and other assets of $525 million 
and restructuring costs and provisions of 
$110 million, and includes $9 million of payroll 
remediation costs relating to Target.
3  2019 and 2018 includes KTAS until its 

divestment in November 2018. 

4  The 2018 earnings before tax for Kmart Group 
excludes the pre-tax non-cash impairment 
of $306 million for Target.

32

Wesfarmers 2022 Annual Report

Revenue

$9,635m

2022

 9,635 

2021

2020

2019

2018

 9,982 

 9,217 

 8,713 

 8,837 

EBT

$418m

2022

20211

20202

2019

20183

 418 

 693 

410

 550 

 660 

Key financial indicators

Post-AASB 16

Pre-AASB 16

For the year ended 30 June

2022

20211

20202

20202

20193

20183,4

Revenue ($m)

 9,635 

 9,982 

 9,217 

 9,217 

 8,713 

 8,837 

Earnings before tax ($m)

 418 

 693 

410

413

 550 

 660 

Capital employed R12 ($m) 

 1,825 

 1,329 

 2,011 

 1,978 

 1,872 

 2,013 

Return on capital employed R12 (%) 

Cash capital expenditure ($m)

22.9

150

52.1

185

20.4

142

20.9

142

29.4

 207 

32.8

 293 

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Our performance

Outlook 

Kmart is uniquely positioned in an 
inflationary environment to extend its 
low-price leadership and profitably grow 
its share of customer wallet. This will 
be supported by the delivery of strategic 
initiatives, including leveraging its leading 
product development capabilities 
to launch new categories and expand 
existing categories, accelerating the 
growth of online, digitising sourcing 
and supply chain, continuing the rollout of 
radio frequency identification (RFID) 
infrastructure to support the digitisation 
of the store operating model, and better 
engaging with customers through the 
use of data and personalisation. 

Volatility in global supply chain conditions 
remains elevated and cost pressures are 
expected to persist across some raw 
materials, domestic and international 
freight and operating expenses. 
The business will focus on productivity 
initiatives and will maintain higher levels 
of inventory in non-seasonal categories 
to mitigate these risks. 

Target will focus on continuing to improve 
the product offer, particularly in the priority 
categories of apparel and soft home, 
growing online and driving productivity 
initiatives to maintain its reduced cost 
base and profitability. 

Catch transitioned to the new OneDigital 
division on 1 July 2022. Investment to 
support long-term growth will continue, 
with a focus on acquiring and retaining 
customers, and building strategic 
capabilities in fulfilment, technology, and 
data, while leveraging the Wesfarmers 
Group assets, including the OnePass 
membership program. 

Ian Bailey
Managing Director
Kmart Group

Kmart Group’s revenue decreased 
by 3.5 per cent to $9,635 million for 
the 2022 financial year. Earnings of  
$418 million were 39.7 per cent below 
the prior year, excluding significant items 
related to Target store closures and 
conversions in the prior year. 

Revenue for Kmart and Target decreased 
by 3.5 per cent for the year. Excluding 
significant items in the prior year,  
earnings declined by 31.7 per cent 
to $505 million, with strong growth  
of 19.4 per cent in the second half.

Kmart and Target’s trading performance 
in the first half was significantly impacted 
by COVID-19 restrictions, with almost  
25 per cent of store trading days in the 
half lost due to government-mandated 
store closures. Trading conditions 
improved over the second half of the 
financial year as COVID-related 
disruptions subsided, resulting in 
improved customer traffic to stores, 
reduced team member absenteeism 
and improved stock availability.

Kmart’s total sales increased 0.5 per cent 
for the year, with comparable sales 
decreasing 1.0 per cent. This included 
growth across all categories in the second 
half and additional sales from Target 
store conversions. Target’s total sales 
decreased 15.8 per cent for the year and 
comparable sales increased 8.6 per cent, 
driven by continued improvements in the 
product offer and higher levels of 
promotional activity. 

Earnings growth in the second half 
reflected strong sales growth and a focus 
on productivity and cost control, including 
the benefits of the successful execution 
of the Target restructuring program and 
conversion of select Target stores to 
Kmart. Kmart continued to invest in 
key strategic initiatives to enhance and 
personalise its customer offer, digitise 
its operating model, and develop its data 
and digital assets, including through the 
new partnership with OnePass.

Gross transaction value for Catch 
increased 1.6 per cent to $989 million 
for the year. Catch’s earnings 
performance for the year reflected 
continued investment in team, technology, 
marketing and capabilities to support 
long-term growth, as well as investment 
in automation technology and fulfilment 
capacity, including the opening a second 
fulfilment centre in Moorebank, NSW. 

 Wesfarmers 2022 Annual Report

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Operating and financial review | Kmart Group

Our business 

Sustainability performance

KMART

Kmart was established in 1969, with 
the opening of its first store in Burwood, 
Victoria. Kmart is a leading product 
development company and trusted brand 
that operates 324 stores throughout 
Australia and New Zealand, offering 
customers a wide range of everyday 
products at the lowest prices. 

Kmart employs around 38,000 team 
members, who are focused on the Kmart 
vision of making everyday living brighter 
for Australian and New Zealand families. 
Kmart executes this vision by being a 
great place to shop that is simple to run 
and providing customers with better 
products at even lower prices.

TARGET

Target began as a drapery store in 1926 
in Geelong, Victoria, and has since grown 
to become a destination for apparel and 
soft home products. Target operates 128 
stores and employs around 10,000 team 
members across Australia, with a vision 
to make great quality products truly 
affordable for Australian families. 

CATCH

Catch is an e-commerce marketplace 
which commenced operations in 2006 and 
was acquired by Wesfarmers in August 
2019, bringing highly complementary skills 
in digital retail and fulfilment to Wesfarmers 
and the Kmart Group. Catch’s vision is to 
be the trusted place where Australians 
start their shopping journey. 

Catch operates an online business model 
offering branded products on a first-party 
basis and a third-party online marketplace. 
Its online operations are supported by 
a leading technology platform and data 
capabilities, and fulfilment centres located 
in Victoria and New South Wales. From 
1 July 2022, Catch will move from the 
Kmart Group and join Wesfarmers 
OneDigital.

Safety performance

Aboriginal and Torres Strait 
Islander team members

TOTAL RECORDABLE  
INJURY FREQUENCY RATE1

8.3 

2022

2021

2020

20192

20182

 8.3 

 9.2 

 12.8 

 19.4 

19.1

1,847

2022

1,847

2021

2020

2019

2018

1,512

708

674

714

1  TRIFR measures the number of lost time and 

medical treatment injuries per million hours worked.

2  Does not include Catch injuries and hours.

Greenhouse gas emissions
SCOPE 1 & 2

 MARKET-BASED1

 LOCATION-BASED2

253.8ktCO2e

2022

253.8 281.1

2021

262.5

292.6

2020

20193

20183

n.a.

n.a.

n.a.

303.7

318.6

330.8

1  Emissions based on GHG Protocol Scope 2  

market-based reporting standard.

2  Scope 1 and 2 data includes emissions for 

businesses where we have operational control 
under the NGER Act, other known non-reportable 
Australian-based emissions over which we have 
control and emissions in international operations.

3  Excluding discontinued operations.

Operational waste

 RECOVERED

 DISPOSED

72.8kt

2022

58.6

14.2

2021

2020

2019

2018

65.5

61.3

58.6

70.9

17.6

14.8

16.0

24.0

Community contributions1

Ethical sourcing program

HUMAN RIGHTS AND 
ETHICAL SOURCING

Kmart Group acknowledges its 
responsibility to ensure human rights 
are understood and respected, and to 
promote environmental sustainability 
within its supply chain. During the year, 
1,172 Kmart Group supplier factories  
were monitored by third-party ethical 
sourcing audits. 

 DIRECT

 INDIRECT

$7.1m

2022

2021

2020

20192

20182,3

2.8

1.2

1.9

1.4

1.5

4.3

6.2

6.5

6.0

8.4

Work to strengthen the Kmart Group 
Ethical Sourcing Program continued 
with a focus on improving ethical sourcing 
transparency beyond finished goods 
manufacturers, further up the supply 
chain into processing facilities, component 

1  Direct community contributions include  

cash in-kind and time contributions. Indirect 
community contributions include contributions 
from team members and customers enabled 
by our businesses. 

2  Excludes Catch contributions.
3  Includes discontinued operations.

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Wesfarmers 2022 Annual Report

  1,379 sites in the ethical sourcing program 

  1,172 sites were monitored this year (85%)1

  193 sites in the program had reportable 
breaches (14%)2

1  The frequency of monitoring varies depending on 
prior audit findings and the level of assessed risk.
2  We work with our suppliers to remedy reportable 
breaches. In certain very rare circumstances, we 
may suspend or terminate our arrangements with 
that supplier.

Kmart  

Kmart continued to achieve a strong 
safety result with an 8.5 per cent TRIFR 
reduction to 9.7 and reduction of new 
workers compensation claims by 
11.9 per cent to 413. Kmart’s platform 
for continuous improvement continued 
to be guided by its established four pillars 
of safety, regulatory compliance, 
wellbeing and injury management. 

Kmart has invested resources and 
time in the development of critical risk 
management protocols, specifically 
for the protection of pedestrians from 
vehicles, objects falling from heights 
and other threatening situations. 

For team members, personal protective 
equipment standards, safety training 
including competency and management 
of plant and equipment remain the 
highest of priorities. All incidents, 
including identified hazards, are tracked 
and a consistent investigation program 
is in place to ensure that continuous 
improvement opportunities are identified. 

Target 

Target achieved a ninth consecutive year 
of improved safety performance with a  
21.3 per cent TRIFR reduction to 4.8 and 
reduction of new workers’ compensation 
claims by 43 per cent to 49 claims. 

The significant improvement in safety 
performance has been attributed to 
increased focus on proactive hazard and 
near miss incident reporting to address 
and mitigate risks. 

Catch 

Catch maintained a strong TRIFR result 
of 2.1 in the year. Catch’s implementation 
of the CatchSAFE Safety Management 
System (SMS) has ensured a strong focus 
on continuous improvement and 
effectiveness of safety standards. 
The SMS will play a key role in driving 
the safety strategy into the future. 

Catch has continued to invest in 
technology to improve safety maturity 
by empowering worker participation, 
and capturing and actioning 622 hazards 
and 878 behaviour safety observations. 

DIVERSITY AND INCLUSION

Kmart Group recognises a diverse 
and inclusive place to work and shop 
will enable its businesses to build 
strong connections with team members, 
customers and local communities, 
while promoting innovation and better 
business decisions.   

Gender balance 

Kmart maintains gender balance among 
leadership roles. Women hold 45 per cent 
of all leadership roles, an increase 
of one per cent from last year. 

manufacturers and suppliers of raw 
materials. Kmart Group has now met its 
commitment to identify and publish the 
location of 100 per cent of processing 
facilities that produce own-brand clothing, 
towel and bedding products. These 
facilities are now publicly disclosed on the 
Kmart and Target websites. This list will be 
updated every six months drawing on the 
latest information shared by suppliers 
on active facilities.

Recognising their broader transparency 
efforts, Kmart and Target achieved an 
equal first ranking in the 2022 Fashion 
Transparency Index (FTI). The FTI ranks 
250 of the world’s largest fashion brands 
and retailers according to information 
disclosed about social and environmental 
policies, practices and impacts, in their 
operations and supply chain.

Nearly 60,000 female workers were 
enrolled in BSR HER+ training programs 
across 24 Kmart and Target supplier 
factories in Bangladesh, India, Indonesia 
and Vietnam. Kmart Group is now over 
half way to achieving its public 
commitment to provide professional 
skills or health training to at least 
100,000 women in its supply chain 
by December 2025.

HEALTH, SAFETY AND 
WELLBEING

Kmart Group is committed to improving 
the health, safety and wellbeing of  
team members and providing a safe 
shopping experience for customers. 

The management of COVID-19 was 
underpinned by a strong risk management 
protocol, including compliance with local 
requirements, promotion of vaccination, 
mask use and social distance.

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Operating and financial review | Kmart Group

At the end of the 2022 financial year, 
women represented 49 per cent of 
store leadership roles, an increase of 
three per cent and 48 per cent of 
corporate leadership roles, the same 
as last year. 

Target also maintains gender balance 
with 55 per cent women in leadership 
roles, an increase of one per cent from 
last year. Women represent 53 per cent 
of store leadership roles, a decrease 
of one per cent from last year and 
56 per cent of corporate leadership roles, 
an increase of two per cent. In the 2022 
financial year, Catch saw women in 
leadership roles increase from 26 per cent 
to 33 per cent. 

Indigenous employment 

Kmart Group maintained its strong focus 
on Indigenous employment. At Kmart, 
Indigenous representation increased from 
1,215 to 1,549 people and Indigenous 
people engaged in active employment 
(worked in the past 30 days) represented 
4.4 per cent of the Australian workforce, 
an increase from 3.5 per cent last year. 

At Target, despite store closures across 
the network limiting net growth in 
Indigenous team members, Indigenous 
people engaged in active employment 
increased from 297 to 298 which now 
represents 2.9 per cent of the workforce, 
an increase from 2.4 per cent in the 
prior year. 

Disability and accessibility 

Some 390 team members employed at 
Kmart identify as having a disability within 
Kmart’s human resources information 
system, an increase from 210 team 
members last year. 

COMMUNITY

Kmart Group continued to work with local 
communities and charity partners to meet 
a diverse range of needs for families and 
team members. In total this year, Kmart 
contributed around $6,300,000, Target 
$560,000 and Catch $218,000 to 
charities and community groups. 

Kmart   

Over $400,000 was raised for Kmart’s 
charity partners: The Reach Foundation, 
Smiling Mind and the Graeme Dingle 
Foundation (NZ) which promotes the 
wellbeing of young people and their 
families. Kmart also supported hundreds 
of grassroots community groups through 
donations of goods and gift cards, and 
sponsorship of GAMETIME through the 
National Basketball League enabled 
109,100 students to participate in 
basketball clinics.   

New methods to allow customers to give 
to The Kmart Wishing Tree Appeal were 
implemented, as well as the rollout 

36

Wesfarmers 2022 Annual Report

of sustainable Point of Sale materials 
for the Appeal instore. Kmart collected 
over 173,500 gifts and raised more 
than $330,000 across Australia and 
New Zealand.  

to contribute to that organisation 
by ‘rounding up’ with their purchase. 
Throughout the year, Catch customers 
contributed more than $218,000 
through this scheme. 

Kmart made a $200,000 donation to 
the GIVIT Foundation to help communities 
impacted by floods and storms in 
New South Wales and Queensland, 
alongside pallets of goods to numerous 
charity organisations working on the 
ground to support flood victims.   

SUSTAINABLE OPERATIONS

As a large retailer with a significant 
operational footprint, Kmart Group 
has a responsibility to minimise the 
environmental impact of its retail 
stores and distribution networks. 

Target   

Nearly $250,000 has been raised for 
Target’s new charity partner Australian 
Childhood Foundation (ACF), bringing to 
focus Target’s commitment to supporting 
women and families. The funds raised by 
Target and its customers go directly to 
ACF’s ‘Bringing Up Great Kids’ Program, 
which focuses on providing education 
and resources to vulnerable parents to 
help raise happy and healthy children.

Target also made a significant $100,000 
donation alongside pallets of goods 
to the GIVIT Foundation to help people 
in New South Wales and Queensland 
impacted by floods and storms. 

Catch   

Catch profiled the important work of 
one community organisation each month 
and gave customers an opportunity 

Energy and emissions 

In the 2022 financial year, Kmart Group 
increased electricity use by 0.4 per cent 
per-square-metre of its stores’ gross 
footprint. This increase is attributed to 
warmer weather conditions and a  
9.5 per cent increase in store operating 
hours following reduced COVID-19 
restrictions in the prior year. The efficiency 
of stores’ energy use per square metre 
has improved 1.7 per cent year on year. 

During the year, Kmart Group secured 
a renewable energy contract through to 
2030 for 58 stores in Queensland, which 
represents 18 per cent of the group’s 
total energy requirements, reducing 
the carbon footprint. 

Kmart Group’s focus over the next year 
will be on energy-efficiency activities 
related to lighting, out-of-hours energy 

use, building automation and Power 
Factor Correction. These opportunities 
will drive efficiency and cost reduction for 
the stores in conjunction with renewable 
energy procurement strategies to achieve 
100 per cent renewable electricity 
by 2025 and to net zero Scope 1 and 2 
emissions by 2030. 

All of Kmart Group’s material Scope 3 
categories were mapped this year, 
enabling prioritisation of identified 
hotspots, and forecasting of emissions 
and reduction options, to demonstrate 
future opportunities including through 
the Kmart Group sustainable materials 
strategy.

Waste and recycling 

Waste diversion from stores and 
distribution centres across Kmart Group 
improved from 79 per cent to 80 per cent 
this financial year. During the period, a 
waste and recycling dashboard has been 
developed to allow Kmart Group stores, 
regions and states to monitor and 
compare their waste generation, 
diversion and bin density. 

SUSTAINABLE PRODUCTS

Kmart Group is committed to making 
more sustainable products. This includes 
designing quality products made from 
responsibly sourced sustainable materials, 
which are packaged responsibly and 
can be reused or recycled at the end 
of their life. 

Sustainable materials 

During the year, Target reached 
a significant milestone meeting its  
100 per cent sustainably sourced cotton 
commitment. This means that all of the 
cotton sourced for Target own-brand 
clothing, bedding and towels is now 
ordered as Better Cotton, organic or 
recycled. Kmart and Target partnered with 
environmental not-for-profit organisation, 
Canopy, to progress the elimination of 
deforestation from their cellulose (viscose, 
modal and lyocell) supply chains.

Circular economy 

Kmart and Target continue to extend 
their use of recycled materials across 
a wide range of product categories, 
including activewear, outerwear, denim, 
swimwear, knitwear, footwear and 
bedding. Kmart Group also continued 
its participation in the Circular Fashion 
Partnership, a cross-sector project led by 
the Global Fashion Agenda, in partnership 
with Reverse Resources, Bangladesh 
Garment Manufacturers and Exporters 
Association and P4G, to develop 
long-term scalable solutions for capturing 
and reusing post-production textile waste. 
As of June 2022, Kmart and Target have 
17 factories participating in the project.

Packaging  

A new Shanghai-based data officer is 
supporting the work of the Kmart Group 
Sustainable Packaging Manager to 
engage with internal and external 
stakeholders in the delivery of  
Kmart Group’s Sustainable Packaging 
Principles and Standards.

With improved data collection systems 
being developed internally and in 
consultation with the Australian Packaging 
Covenant Organisation, approximately 
6,000 Packaging Recyclability Evaluation 
Portal assessments were completed to 
add to the approximately 2,000 customer 
facing Australasian Recycling Label 
approved products. 

Women supported in Kmart and Target  
supply chain

Women represent approximately 60 per cent of workers among Kmart’s and 
Target’s suppliers. Yet some female workers in factories do not have access 
to the basic services they need to ensure health and wellbeing, or the skills 
training and opportunities to support their professional development. 

Kmart Group believes all women deserve the opportunity to have a voice and reach 
their full potential, both in their work life and home life. That is why Kmart and Target 
have committed to support health, education or professional skills training for at least 
100,000 women in their supply chain by 2025. To achieve this, the businesses have 
partnered with BSR HER Project - a collaborative initiative to empower low-income 
women working in global supply chains. Bringing together international companies, 
suppliers, and local NGOs, the HER Project drives impact for women and businesses 
via workplace-based interventions on health, financial inclusion and gender equality.

Currently, Kmart and Target fund the delivery of two BSR HER programs: HER 
Health and HER Essentials. HER Health aims to improve health and wellbeing 
outcomes for female factory workers, while the HER Essentials Program is 
designed to help women who have been disproportionately impacted by the 
economic and social consequences of COVID-19.

Based on needs analysis and the strength of existing social welfare systems, 
Kmart and Target have prioritised implementation of the HER Health and 
Essentials programs with suppliers located in Bangladesh, India, Indonesia 
and Vietnam. These countries also tend to have factories with large numbers 
of female workers, which increases the scale of impact.

As at 30 June 2022, almost 60,000 female workers were enrolled in different 
HER Project programs across 24 Kmart and Target supplier factories 
in Bangladesh, India and Vietnam. 

Although it is early days, the initial signs are encouraging. An assessment of the HER 
Essentials program has reported that it builds confidence in women (including through 
learning to use technology), supports the explanation of sensitive topics (such as 
reproductive health), and provides a channel for informal feedback among workers.

 Wesfarmers 2022 Annual Report

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Operating and financial review | Kmart Group

KMART - STRATEGY

Kmart provides families with everyday products at the lowest prices and will continue to drive sustainable growth through a focus on making Kmart a great 
place to shop that is simple to run and delivering better products at even lower prices. The business is focused on continuously improving the customer offer 
while developing a digitally-enabled operating model to provide customers with a shopping experience that is seamless between channels. Kmart will continue 
to leverage its market-leading size and scale to offer more everyday products, maintain its price leadership position and pursue its sustainability commitments.

Strategies

Achievements

Focus for the coming years

A great place 
to shop that is 
simple to run

 – Delivered a new digital infrastructure for Kmart Australia website, 
enabling enhanced user experience and improved customer 
conversion

 – Implemented RFID tags for apparel, delivering higher product 

availability through digitisation of store tasks

 – Leveraging the new OnePass membership program, developing 
more personalised relationships with customers by providing 
compelling value

Better products 
at even lower 
prices

 – Continued lowest price leadership
 – Leveraged product development capabilities to expand product 

ranges and enter new categories

 – Progressed the digitisation of Kmart’s supply chain and sourcing 

operations to deliver operational efficiencies

 – Continued focus on online acceleration to enhance customer 

experience and reduce fulfilment costs 

 – Expand the application of instore technology (including RFID) to 
improve operational efficiency and enhance customer experience

 – Further increase engagement with customers through 

personalisation 

 – Continue to leverage unique competitive advantages to further 
extend price leadership position and diversify product offerings
 – Continue to leverage product development capabilities to grow 

share of wallet and enter new product categories

 – Continue to digitise the supply chain to deliver shorter lead times, 
greater accuracy of supply and demand matching, and lower 
end-to-end costs 

 – Continue to provide customers with products that are sustainably 

and ethically sourced

 – Identify opportunities to sell Anko products through new channels

TARGET - STRATEGY

Target’s vision is to make great quality products truly affordable for Australian families. Target has accelerated its strategy to be a destination for apparel 
and soft home, with ‘affordable quality’ the key differentiator, supported by strong digital capabilities to make the end-to-end customer journey easy and 
personalised. After successfully repositioning the store network, Target has embedded a simplified operating model. 

Strategies

Achievements

Focus for the coming years

Simplify the 
operating 
model and 
stabilise 
performance 
following the 
restructure

Destination for 
apparel and 
soft home, with 
‘affordable 
quality’ the key 
differentiator

 – Target is now a smaller, simpler business focused on achieving 

consistent profitability

 – Significant improvement in stability of operating model, with 
lower lease liabilities and a structural reduction in cost base

 – Strong commercial focus in assessing lease expirations

 – Further simplification of end-to-end operating model and 
business processes, supported by technology investment

 – Further improvement in sales density of store network

 – Established clear customer value proposition with a focus 

 – Continue to improve product quality, style and range architecture 

on quality, value and style

with a focus on apparel and soft home

 – Clear customer, product and channel strategies, targeting ‘mum’ 

 – Continued focus on execution and customer experience 

as the core customer

to increase customer transactions

 – Continue to provide customers with products that are sustainably 

and ethically sourced

 – Enhance online fulfilment capabilities to improve the customer 

experience and reduce costs

 – Increase apparel participation in online by enhancing product 
availability and improving the end-to-end customer experience
 – Leverage sourcing, technology, data, advanced analytics and 

digital advantages from Kmart Group and OneDigital

Accelerate 
digital 
capability and 
online growth

 – Strong growth in online channel, with growing app usage
 – Continued to improve the website and app customer experience 
through improved search, navigation, product display content 
and customer communications

 – Further developed marketplace offering on Catch 

as a successful customer channel for Target

 – Established rich customer data foundation and addressable 

audience supported by Flybuys and OnePass

KMART AND TARGET - RISK MITIGATION

Kmart and Target understand and recognise that rigorous risk management is essential for corporate stability and for sustaining its competitive market position 
and long-term performance. Risk identification, assessment and management is an integral part of the annual corporate planning and budgeting processes 
from which the key material risks and uncertainties are derived. Set out below are the key risks and uncertainties that could have a material impact on Kmart 
and Target’s ability to achieve their stated objectives. 

COVID-19 remains a feature of the operating environment. It is inherent across multiple key risk areas and not separated below. COVID-19 mitigation activities 
continue to evolve with changing circumstances and in line with public health guidance. Additionally, Kmart and Target recognise climate change as a key risk 
(and opportunity) which is discussed elsewhere within this annual report.

Risk

Mitigation

International and 
domestic supply 
chain disruptions

 – Increased use of digital technologies to reduce supply chain lead times and increase flexibility
 – Increased stock weights in some product categories to accommodate volatility in customer demand and global supply chain disruptions
 – Leverage unique sourcing model to increase diversification of sourcing operations

Cost inflation

 – Leveraging scale advantages and unique sourcing model to mitigate cost impacts
 – Disciplined assessment of cost reduction opportunities including through leveraging technology, data, advanced analytics, digital and 

sustainability advantages from Kmart Group and OneDigital

 – Increased focus on optimising and expanding online fulfilment capabilities to facilitate changing customer shopping habits at the lowest cost

38

Wesfarmers 2022 Annual Report

KMART AND TARGET - RISK MITIGATION CONT.

Risk

Mitigation

Competitor 
activity

Exchange  
rate volatility 

Sustainability, 
ethical sourcing, 
and human rights

 – Maintaining price leadership position in the market by making use of extensive sourcing ranges, in-house design capabilities and  

volume-driven efficiencies

 – Continuing to innovate the store format to improve the customer experience through new layouts and leveraging technology
 – Analysis of business performance to identify future opportunities and clarify business proposition and purpose

 – Hedging and product and pricing frameworks will be used to effectively manage foreign exchange movements

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 – Ongoing improvements to environmental compliance across all factories and a commitment to upholding ethical sourcing standards, 

which include protecting and respecting human rights

 – Expansion of the sustainable development program towards a circular economy with a focus on making a positive difference for people 

and the planet

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Data and IT 
security

 – Dedicated team and threat intelligence partnerships responsible for oversight of cyber security and monitoring evolving cyber threats 
 – Regular oversight provided to executive management and the Board to govern cyber security

CATCH - STRATEGY

Catch’s vision is to be the trusted destination where Australians start their online shopping journey. Catch will offer customers the leading brands they know 
and love at competitive prices, with a personalised shopping experience and fast delivery. Catch will continue to broaden the range of categories and brands 
available in both its in-stock and marketplace offerings, and leverage assets across the Wesfarmers Group.

Strategies

Achievements

Focus for the coming years

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Invest in 
technology 
platform and 
fulfilment 
capability

 – Continued focus on providing a market-leading, trusted and secure 

 – Maintain customer-centric focus with an emphasis on 

online shopping experience

 – Increased fulfilment centre capacity and delivery speed by opening 

providing an engaging and rewarding shopping experience
 – Accelerate investment in marketing the Catch website, mobile 

a new 30,000 sqm fulfilment centre in New South Wales

apps and customer loyalty programs

 – Significantly progressed a ‘Fulfilled by Catch’ offering, with Kmart 

 – Continue development of Catch’s data capabilities to support 

secured as a key customer

more personalised customer interactions

 – Enhanced search functionality, improved product recommendations 

 – Launch ‘Fulfilled by Catch’ for Kmart, and expand offer 

and launched a new Android app

to other customers

 – Develop a national fulfilment network

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Expand product 
range

 – Broadened range of categories and market-leading brands 

 – Invest in marketplace infrastructure to accelerate growth 

available for both the retail and marketplace offerings

in sellers and products

 – Grew marketplace sellers to over 2,400

 – Curate the first-party range, focusing on the most known and 

 – Re-branded Club Catch to OnePass

Accelerate 
growth in 
membership 
program

CATCH - RISK MITIGATION

loved brands at competitive prices

 – Launch more Wesfarmers brands on the marketplace 

 – Further enhance OnePass value proposition 
 – Maintain growth discipline through focus on customer lifetime 

value versus customer acquisition cost

 – Leverage OnePass and OneDigital to enhance customer 
experience and deliver more personalised interactions

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Catch’s approach to risk management includes monitoring new market entrants and the expansion of existing competitors to scale at a sustainable pace 
to meet growing demand. The sector in which Catch operates is becoming more competitive as traditional bricks and mortar retailers increase e-commerce 
investment and existing online competitors invest in growth. 

COVID-19 remains a feature of the operating environment. It is inherent across multiple key risk areas and not separated below. COVID-19 mitigation activities 
continue to evolve with changing circumstances and in line with public health guidance. Additionally, Catch recognises climate change as a key risk (and 
opportunity) which is discussed elsewhere within this annual report.

Risk

Mitigation

Competitor 
activity

Scaling the 
Catch team 

Data and IT 
security

 – Monitoring of competitor activity and consumer trends
 – Expanding retail and marketplace offerings by utilising Catch’s extensive domestic and international supply chains
 – Accelerating advertising investment leveraging Catch’s extensive in-house digital marketing expertise
 – Continuing to innovate Catch’s technology platform to enhance customer engagement and promote repeat purchasing behaviour
 – Continuing to maintain high standards of product quality and safety
 – Leveraging Wesfarmers’ retail assets to provide a differentiated customer experience

 – Investing in the development of Catch’s people capability to deliver on its strategic objectives while maintaining high standards 

of customer care and service

 – Recruiting top-tier talent across a range of functions including product sourcing, marketing, and technology

 – Threat intelligence partnerships in place to monitor evolving cyber threats
 – Dedicated team responsible for operational management and oversight of cyber security
 – Regular oversight provided to executive management and the Board to govern cyber security

 Wesfarmers 2022 Annual Report

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Operating and financial review | Chemicals, Energy and Fertilisers

Chemicals, Energy 
and Fertilisers

Year in review

Revenue

$3,041m

2022

 3,041 

2021

2020

2019

2018

 2,146 

 2,085 

 2,078 

 1,830 

EBT

$540m

2022

2021

2020

2019

2018

540

384

394

 438 

 390 

Key financial indicators

Post-AASB 16

Pre-AASB 16

For the year ended 30 June

2022

2021

2020

2020

2019

2018

Revenue ($m)

 3,041 

 2,146 

 2,085 

 2,085 

 2,078 

 1,830 

Earnings before tax ($m)

540

384

394

393

 438 

 390 

Capital employed R12 ($m) 

 2,503 

 2,171 

 1,942 

 1,941 

 1,358 

 1,407 

Return on capital employed R12 (%) 

Cash capital expenditure ($m)

21.6

455

17.7

137

20.3

110

20.2

110

 32.6 

 27.7 

 58 

 60 

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Wesfarmers 2022 Annual Report

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Our performance

Outlook 

The Chemicals business is expected 
to continue benefiting from strong global 
commodity prices. Robust demand 
for AN from the Western Australian mining 
sector is anticipated to continue, and 
demand for sodium cyanide is expected 
to benefit from an elevated gold price, 
given global economic uncertainty.

The Energy business is expected 
to continue benefiting from the strong 
Saudi CP but is likely to be adversely 
impacted by higher Western Australian 
natural gas costs and lower LPG content. 
The natural gas retailing business remains 
focused on customer retention and 
providing market-leading customer 
service.

In the Fertiliser business, good 
2022 seasonal conditions are reflected 
in positive grower sentiment, albeit high 
fertiliser input prices may moderate 
application rates in 2023. The business 
continues to focus on working capital 
management and delivering its strategic 
agenda.

Construction activity at the Mt Holland 
lithium mine and concentrator and Kwinana 
refinery continues, and Covalent remains 
focused on actively managing labour 
constraints in the local construction 
industry and COVID-19 impacts on 
its workforce and supply chains. 

Across all businesses, WesCEF expects 
continued cost pressures associated 
with international supply chain disruptions 
and inflation in some input costs.

WesCEF will continue to work on 
opportunities to better utilise or expand 
its existing operations through targeted 
investments. 

Ian Hansen
Managing Director
Wesfarmers Chemicals,  
Energy & Fertilisers

Revenue of $3,041 million was up 
41.7 per cent and earnings increased 
40.6 per cent on the prior year to 
$540 million, with each business 
benefiting from higher global commodity 
prices, particularly for LPG, fertiliser 
and other ammonia-related products.

Chemicals delivered strong earnings 
growth on the prior year. Ammonia 
earnings improved, driven by a favourable 
global ammonia price, which was partially 
offset by increased import costs, the 
pricing lag from the pass-through 
mechanism in customer contracts and 
costs associated with the planned 
ammonia plant shutdown. Ammonium 
Nitrate (AN) earnings also benefited from 
elevated global ammonia prices and strong 
demand from Western Australian mining 
and agricultural customers. Earnings in the 
Sodium Cyanide business benefited from 
higher export sales volumes as demand 
from international gold mining customers 
began to normalise following COVID-
related disruptions.

Energy earnings grew significantly 
on the prior year, driven by a higher 
Saudi Contract Price (Saudi CP), the 
international benchmark indicator for LPG 
price, and the continued benefit from the 
change in sales volume mix towards the 
domestic LPG market. This was partially 
offset by higher Western Australian 
domestic gas costs. The natural gas 
retailing business continued to grow 
its residential customer base in Western 
Australia, which resulted in higher 
sales volumes for the year.

Fertilisers’ earnings increased on the 
prior year, reflecting stronger global 
commodity prices. Earnings were partially 
offset by lower volumes following a record 
2021 seasonal offtake, and increased 
competition as well as demand changes 
due to the high input price environment 
for growers. The business managed its 
working capital position well during the 
year, delivering solid results. Investment 
in despatch capacity, improvements to 
infrastructure across regional locations 
and the launch of a full-service nitrogen 
nutritional offer allowed the business 
to better serve its customers.

The WesCEF result includes the 
50 per cent interest in the Mt Holland 
lithium project. WesCEF’s share of capital 
expenditure for the development of the 
project was $304 million during the year, 
excluding capitalised interest.

 Wesfarmers 2022 Annual Report

41

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating and financial review | Chemicals, Energy and Fertilisers

Our business

Sustainability performance

WesCEF manages nine businesses 
in Australia across the chemicals, 
energy and fertiliser sectors with a 
shared services model that supports 
the production and distribution assets 
across the portfolio. The division also 
supports the Covalent Lithium joint 
venture in construction and operation 
of the Mt Holland lithium project. 

Chemicals includes: 

 − CSBP Chemicals, which manufactures 

and supplies ammonia, AN and 
industrial chemicals primarily to the 
Western Australian mining, agricultural 
and industrial sectors 

 − Australian Gold Reagents (AGR), 
CSBP’s 75 per cent owned joint 
venture with Coogee Chemicals, which 
manufactures and supplies sodium 
cyanide to the Western Australian and 
international gold mining sectors 

 − Queensland Nitrates (QNP), CSBP’s 

50 per cent joint venture with 
Dyno Nobel Asia Pacific, which 
manufactures and supplies AN to the 
resources sector in the Bowen Basin 

 − Australian Vinyls, which supplies PVC 
resin and specialty chemicals to the 
Australian industrial sector and

 − ModWood, which manufactures 
wood-plastic composite decking 
and screening products. 

Energy includes: 

 − Kleenheat, which extracts LPG from 
natural gas and distributes bulk and 
bottled LPG to the residential and 
commercial markets in Western 
Australia and the Northern Territory, 
and is a retailer of natural gas to 
residential and commercial markets, 
and electricity to businesses in 
Western Australia and 

 − EVOL LNG, which distributes bulk 
LNG primarily to the remote power 
generation market in Western Australia. 

CSBP Fertilisers manufactures, imports 
and distributes nitrogen, phosphate and 
potassium-based fertilisers for the 
Western Australian agricultural sector. 
It also provides technical support and 
nutritional service offerings for growers 
through a network of employees and 
accredited partners in regional Western 
Australia. 

Covalent Lithium, Wesfarmers’ 50 per cent 
joint venture with Chilean based lithium 
producer, Sociedad Quimica y Minera 
(SQM), is progressing with the 
development of the Mt Holland lithium 
project. Construction continues on the 
mine with the village and the aerodrome 
completed. Construction on the 
concentrator and the Kwinana refinery 
continues, with first production from the 
refinery expected in the second half 
of calendar year 2024.

42

Wesfarmers 2022 Annual Report

Safety performance

Aboriginal and Torres Strait 
Islander team members

TOTAL RECORDABLE  
INJURY FREQUENCY RATE1

4.2

2022

2021

2020

2019

2018

4.2

3.0

3.3

4.2

5.4

48

2022

2021

2020

2019

2018

48

43

33

28

27

1  TRIFR measures the number of lost time and 

medical treatment injuries per million hours worked.

Greenhouse gas emissions
SCOPE 1 & 2

 MARKET-BASED1

 LOCATION-BASED2

795.4ktCO2e

2022

795.4 804.3

2021

873.9  880.5 

20203

 n.a. 

 983.3 

2019

2018

 n.a. 

 897.3 

 n.a. 

 769.8 

1  Emissions based on GHG Protocol Scope 2 

market-based reporting standard.

2  Scope 1 and 2 data includes emissions for 

businesses where we have operational control 
under the NGER Act.

3  Restated for a correction to NGER submission. 

The baseline for WesCEF’s 2030 target has been 
adjusted to 955 ktCO2e to reflect the current global 
warming potential of relevant greenhouse gasses.

Operational waste

 RECOVERED

 DISPOSED

19.2kt

2022

16.51

2021

2020

2019

2018

9.1

17.92

8.2

8.0

2.7

3.6

2.1

2.8

4.4

1  Increase due to updated conversion factor 

for the calculation of waste salt.

2  Increase in recovered waste was due to 

one-off excavation and concrete disposal 
projects undertaken at CSBP Kwinana.

Community contributions1

Water usage

 DIRECT

 INDIRECT

$0.5m

2022

2021

2020

2019

2018

0.5

0.5

0.6

0.4

0.4

0.0

0.0

0.0

0.0

0.0

4,339ML

2022

4,339

2021

2020

2019

2018

4,412

4,7401

3,943

3,747

1  Direct community contributions include  

cash in-kind and time contributions. Indirect 
community contributions include contributions 
from team members and customers enabled 
by our businesses.

1  In FY2020 CSBP Kwinana’s water consumption 
increased by 20%, corresponding with higher 
production in water intensive processes.

SUPPORTING COMMUNITIES

WesCEF proudly contributes to the 
communities in which it operates, funding 
support for grass roots initiatives with a 
focus on youth, environment and building 
long-term partnerships with local 
Indigenous groups. 

WesCEF continued to support science, 
technology, engineering and mathematics 
(STEM) education, and environmental 
initiatives in Kwinana and Rockingham 
including the Rockingham Regional 
Environment Centre. Kleenheat partnered 
with the Kwinana STEM Network, helping 
local primary school teachers develop 
their understanding of the STEM 
curriculum, and continued its long-running 
community grants program for not-for-
profit organisations in Western Australia 
and the Northern Territory in the areas 
of connected communities, education, 
health and wellbeing, environment, 
and cultural diversity. 

ENVIRONMENTAL 
STEWARDSHIP

WesCEF continued to progress legacy 
waste contamination investigation 
activities at the CSBP Kwinana site. 
In the 2022 financial year, an Ecological 
Risk Assessment and Remediation 
Options Assessment was undertaken 
to better delineate the risk to Cockburn 
Sound from the Kwinana site and 
surrounding industry.

WesCEF recognises that climate 
change presents both risks and 
opportunities to its businesses, and 
that each business has a vital role to play 
in addressing climate change. Long-term 
resilience requires accelerated mitigation 
and adaptation strategies. Supporting 
accelerated mitigation, this year WesCEF 
introduced a new 2050 net zero Scope 1 
and 2 emissions target and an interim 
target to reduce Scope 1 and 2 emissions 
by 30 per cent by 2030, relative to a 2020 
baseline (see page 78 of this annual 
report). Since specialist abatement 
catalyst technology was introduced 
in its nitric acid ammonium nitrate plants 
in 2012, WesCEF’s Scope 1 and 2 
emissions have fallen by approximately 
40 per cent.

WesCEF has also committed to additional 
greenhouse reporting transparency and 
this year its Scope 3 emissions reporting 
was expanded to cover all material Scope 
3 categories. This will enable WesCEF 
to better understand its complete carbon 
footprint and implement reduction 
strategies in the future. 

WesCEF reduced Scope 1 and 2 
market-based emissions by 9.0 per cent 
in the 2022 financial year, with the 
scheduled ammonia plant shutdown 
accounting for around one-third 
of this reduction.

TEAM MEMBER WELLBEING 
AND OPERATING SAFETY

WesCEF continues to embed 
psychological wellbeing as an accepted 
and sustainable health and safety 
principle with its workforce. Employee 
Mental Health (Building Resilience) 
training completion is at 93 per cent 
and supervisor training is at 75 per cent 
as at 30 June 2022. 

WesCEF engaged a professional mentor 
and leadership coach for an employee 
online session about finding perspective 
and resilience through challenging times. 
More than 580 team members 
(40 per cent of the WesCEF workforce) 
joined the session. Survey feedback from 
the session was received from more than  
100 participants, with many commenting 
it had positively changed their mindset, 
and given them more confidence and 
a stronger sense of purpose. 

WesCEF’s operations include the 
manufacture of hazardous material and, 
as such, manage several inherent high 
potential (HiPo) risks – risks that have the 
potential to cause serious harm or worse. 
These risks are, in most cases, unable to 
be controlled via elimination and therefore 
need comprehensive controls to suitably 
mitigate the risk. During the financial year, 
there were 21 HiPo - no control - 
incidents, compared to 20 for the same 
period last year. Of the 21 incidents,  
15 relate to dropped objects, which 
supports continued focus in this area. 
WesCEF continued to expand its HiPo 
risk management program, including the 
rollout of critical control checklists and the 
development of performance standards 
that allow individual critical controls to 
be assessed for effectiveness. This year 
WesCEF’s TRIFR was 4.2. 

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Operating and financial review | Chemicals, Energy and Fertilisers

INFORMATION SECURITY 
AND TECHNOLOGY

WesCEF is committed to ensuring 
its information systems remain reliable, 
stable, and guarded against threat, 
in line with industry standards. WesCEF 
undertakes continuous improvement 
initiatives each year to ensure the 
effectiveness of these systems. 
No material cyber security incidents 
occurred during the year. Improvements 
in operational technology supported 
plant availability during the year.

DEVELOPMENT, DIVERSITY 
AND INCLUSION

WesCEF has made positive progress 
during the year in gender balance and 
Indigenous team member representation 
with an increase in representation of 
women across the workforce from 35.2 
to 36.0 per cent, an increase in women 
in senior manager roles from 17.1 to 
22.7 per cent and an increase in team 
members who identify as Aboriginal or 
Torres Strait Islander from 3.2 per cent 
to 3.4 per cent.

WesCEF has maintained focus on 
improving gender balance through 
recruitment and pipeline development 
opportunities for vacation students, 
cadets, graduates, apprentices and 
trainees in professions that tend to have 
lower female representation, including 
engineering, and digital and data. In the 
2022 financial year, 57 per cent of 
vacation students and 43 per cent of 
digital and data cadets and graduates 
were female. The organisation provided 
employment for 19 new Indigenous team 
members over the financial year.

44

Wesfarmers 2022 Annual Report

Loggerhead turtle rehabilitation program 
near Perth

A little known but important grass roots rehabilitation program that rescues young, 
endangered Loggerhead turtles is being supported by CSBP. A leader in chemical, 
mining and agriculture solutions, CSBP operates its plants along a coastal strip 
in Kwinana, just south of Perth, where turtle hatchlings are sometimes found and 
rescued after being washed down from the state’s Northwest, by the Leeuwin 
current. 

The company’s Community Grants Program funds the Turtle Rehabilitation Program 
at the Rockingham Regional Environment Centre (RREC), where turtles are cared 
for and nursed back to health, before being released back into the wild. 

Since the rehabilitation program began around 17 years ago, the RREC has 
successfully rehabilitated about 200 turtles before releasing them back to warmer 
waters of the Ningaloo Reef, approximately 1,200 kilometres north of CSBP’s 
Kwinana operations.

Recently, two rescued turtles had suffered injuries and were missing their left flipper. 
The Centre’s volunteers nursed them back to health, so that they could be released 
and survive to breeding age. 

Funding from CSBP is essential to support the volunteers who care for the turtles.  
It has the added benefit of team members learning about the importance 
of protecting the adjacent marine environment, and understanding how grass 
roots organisations are vital to in preserving local species.

This program adds to CSBP’s support of community programs in Kwinana and 
Rockingham which dates back more than 50 years, working collaboratively within 
these communities to develop partnerships that create positive and lasting impacts 
for generations to come.

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STRATEGY

WesCEF’s vision is to grow a portfolio of leading, sustainable businesses. WesCEF has a high-quality portfolio of assets and seeks to grow those assets through 
incremental investment and innovation to meet the needs of its customers. WesCEF also focuses on investment in adjacent opportunities where it can add value 
through utilising its infrastructure, manufacturing and processing expertise and the capabilities of its people.

Strategies

Achievements

Focus for the coming years

Safe person, 
safe process, 
safe place

 – New safety campaign ‘What’s Important Now?’ rolled out
 – Ammonia plant five-yearly major maintenance shutdown 
safely executed with the plant restarted and operating 
above expectations 

 – Ongoing focus on team member health and wellbeing 
 – Complete major maintenance program of chemicals plants with 

no safety incidents occurring

 – Ongoing commitment to improve safety performance, maintenance 

 – Implementation of checklists to verify critical controls 

planning and corrosion control across assets

Deliver progress 
against net zero 
2050 Scope 1 
and 2 emissions 
target

in place for high-risk tasks

 – COVID-19 workplace controls successfully implemented  

in high case load environment

 – Converted net zero aspiration to a target, through 

committing to net zero Scope 1 and 2 emissions by 2050 
as part of a three-phase decarbonisation journey and 
roadmap (see page 76 of this annual report)

 – Partnerships initiated with key research institutions 

and industry leaders to undertake decarbonisation and 
emissions abatement studies

 – Commitment to transparent reporting through publication 

of AN emissions intensity

 – Continued use and enhancement of abatement catalysts 

in chemicals manufacturing processes to reduce emissions

I

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 – Continue to investigate technologies and opportunities to support 
achievement of net zero Scope 1 and 2 emissions 2050 target

 – Collaborate and invest in relationships with key research institutions 

and industry participants to gain insights on climate-related 
technology opportunities

 – Explore a range of climate change-related growth opportunities  

across WesCEF

 – Continue progress in reducing emissions intensity and meeting 

commitments made as part of the recent sustainability-linked financing

Invest for growth

 – Continued to support the Mt Holland lithium project
 – Progressed feasibility studies for potential expansion 

 – Continue development of the Mt Holland lithium project and consider 

expansion opportunities for the project 

of ammonia, AN and sodium cyanide production capacity

 – Consider opportunities to leverage existing infrastructure and expand 

 – Repurposed existing LPG storage tank to optimise 

condensate market opportunity

 – Launched CSBP Detect Plus, a full-service nitrogen 
nutritional offer, leveraging agronomic, data science 
and technology capabilities

capacity across chemical plants 

 – Assess opportunities for additional fertiliser storage assets in key regional 

locations

 – Continue to investigate investment opportunities in existing and adjacent 

markets including to support WesCEF’s decarbonisation roadmap

Enhance our 
reputation

 – Ongoing reviews of high-risk suppliers in line with 

WesCEF’s ethical sourcing framework

 – Ongoing community partnerships and grants that focus 

on Indigenous engagement, youth, STEM education, and 
environmental initiatives

 – Ongoing focus on regulatory compliance 
 – Continued investment in cyber security 
 – Continued investment in sustainable water sources and wastewater 

management 

 – Continued focus on Indigenous procurement and employment
 – Continue to deliver on local community investment strategies with 
a focus on youth, STEM education and environmental initiatives

Maintain 
world-class 
performance

 – Continued strong plant availability following investment in 
ongoing maintenance and data and analytics in prior years

 – Continued focus on operational excellence, including through 

improving legacy systems

 – Strong operational performance and customer service 

 – Maintain market-leading customer service and investigate expanding 

resulting in increased customer demand

service offerings

 – Progressed review to better understand the benefits 

of a new Enterprise Resource Planning solution

RISK MITIGATION

The business units manage risk as an intrinsic part of their daily operations and are committed to conducting activities in a way that generates sustainable growth 
while enhancing the reputation of WesCEF. Risks deemed unacceptable are transferred (through contractual arrangements or insurance), mitigated or avoided.

COVID-19 remains a feature of the operating environment. It is inherent across multiple key risk areas and not separated below. COVID-19 mitigation activities 
continue to evolve with changing circumstances and in line with public health guidance. Additionally, WesCEF recognises climate change as a key risk (and 
opportunity) which is discussed elsewhere within this annual report.

Risk

Mitigation

 – Serious injury, 
safety or 
environmental 
incident

 – Sustained 
competition

 – Global economic 
uncertainty and 
operational 
impacts

 – Sustainability 
and meeting 
community 
expectations

 – Continue to invest in improving safety culture and asset maintenance for the safe operation of facilities and distribution of products  

in a way that minimises any adverse effect on team members, contractors, local communities or the environment

 – Focus on consistently satisfying the needs of customers and continued investment in initiatives that further improve customer experience 

or differentiate service or product offering

 – Effective allocation of resources to optimise existing operations and capitalise on growth opportunities

 – Focus on employee retention and contractor relationships to ensure workforce availability and business continuity
 – Proactive contract management, continued investment in diverse supplier relationships and ongoing monitoring of inventory holdings
 – Ensure commercial agreements account for economic risks where possible to limit inflation or supply chain risks to acceptable levels

 – Ongoing investigation of emissions abatement technology and decarbonisation growth opportunities to support delivery of WesCEF’s 

commitment to net zero Scope 1 and 2 emissions by 2050

 – Minimise the risk of modern slavery occurring in the businesses or supply chains through a risk-based ethical sourcing framework
 – Grow workplace diversity with focus on improving gender balance and growing the number of Indigenous team members to reflect the 

communities in which we operate

 – Ongoing positive contributions to the communities in which we operate

 – Data and IT 
security

 – Continue to focus on enhancing cyber and information security risk controls 
 – Continue to invest in systems and processes to ensure responsible use of data and security of information

 Wesfarmers 2022 Annual Report

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Operating and financial review | Officeworks

Officeworks

Year in review

Revenue

$3,169m

2022

 3,169 

2021

2020

2019

2018

 3,029 

 2,787 

 2,314 

 2,142 

EBT

$181m

2022

 181 

2021

2020

2019

2018

 212 

197

 167 

 156 

Key financial indicators

Post-AASB 16

Pre-AASB 16

For the year ended 30 June

2022

2021

2020

2020

2019

2018

Revenue ($m)

 3,169 

 3,029 

 2,787 

 2,787 

 2,314 

 2,142 

Earnings before tax ($m)

 181 

 212 

Capital employed R12 ($m) 

Return on capital employed R12 (%) 

Cash capital expenditure ($m)

1,015

17.8

68

949

22.3

65

197

976

20.2

40

190

969

19.6

40

 167 

 980 

17.0

 42 

 156 

 939 

16.6

 45 

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Our performance

Outlook 

Officeworks’ everyday low prices, 
wide range, great service, and well 
established every-channel offer make 
it well positioned to support retail and 
business customers in a range 
of economic scenarios.

Officeworks maintains its focus on 
productivity and efficiency programs 
across stores, the support centre and 
in the supply chain, to mitigate the 
impact of cost inflation and COVID-
related disruptions.

Officeworks will continue to evolve 
its core offer and expand its presence 
in the education, business-to-business 
and work from home segments. 
Improvements to the every-channel 
customer experience will continue, 
supported by recent investments 
to better leverage data and digital 
capabilities and modernise the 
supply chain.

Sarah Hunter
Managing Director
Officeworks

Officeworks’ revenue increased 
4.6 per cent for the year to $3,169 million. 
Earnings of $181 million were 
14.6 per cent lower than the prior year.

The safety, health and wellbeing of 
team members and customers remains 
a priority for Officeworks, and continued 
investment in team member safety 
supported an improvement in TRIFR 
to 5.8 for the year.

Sales and margin mix for the year was 
impacted by COVID-related temporary 
store closures in the first half. Strong 
growth continued in technology and 
furniture as customers continued to work 
and learn from home throughout the year, 
while lower foot traffic to stores as a result 
of COVID-19 affected sales in higher-
margin categories such as office supplies 
and ‘print and create’. 

As COVID-related disruptions eased, 
trading conditions improved in the second 
half, with sales growth of 5.5 per cent 
supported by continued demand growth 
across technology and furniture 
categories. This was partially offset by 
a weaker Back-to-School trading period, 
which coincided with elevated levels of 
COVID-19 transmission in the community.

Online penetration, including click and 
collect, remained elevated during the year, 
driven by strong online sales during 
periods of lockdown.

Officeworks’ margin and earnings were 
impacted by changing sales mix during 
the year, and increased price investment 
to maintain Officeworks’ everyday low 
price credentials. The earnings result also 
reflected higher costs of doing business 
associated with managing COVID-related 
disruptions, as well as continued 
investment in data and digital initiatives, 
including the launch of Flybuys, which 
enabled Officeworks to double its number 
of known and marketable customers. 

Consistent with its focus on sustainable 
long-term growth, Officeworks continued 
to invest to modernise its supply chain, 
completing the transition to a new 
Victorian customer fulfilment centre 
(CFC), and progressing the development 
of a Western Australian CFC and a 
Victorian international distribution centre.

In addition, Officeworks upgraded 
75 stores, opened two new stores 
and relocated three stores. 
As at 30 June 2022, there were 
168 Officeworks stores across Australia.

 Wesfarmers 2022 Annual Report

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Operating and financial review | Officeworks

Our business

Sustainability performance

Since opening in 1994, Officeworks 
has grown to a network of 168 stores 
across Australia, a website and digital 
app as well as operating the Geeks2U 
business, generating over $3.1 billion 
in annual sales.

Safety performance

Aboriginal and Torres Strait 
Islander team members

Officeworks is passionate about helping 
customers make bigger things happen 
at home, at school and at work. 

5.8

TOTAL RECORDABLE  
INJURY FREQUENCY RATE1

323

2022

2021

2020

2019

2018

323

328

190

198

198

2022

2021

2020

2019

2018

5.8

6.1

7.9

8.5

10.2

1  TRIFR measures the number of lost time and 

medical treatment injuries per million hours worked.

The business is Australia’s leading retailer 
of stationery, technology, furniture, art 
supplies, and learning and development 
resources as well as an array of services 
like Print and Create and technical 
support through Geeks2U. 

Its customers include small- and 
medium-sized businesses, students, 
schools, households and those working 
from home. With more than 40,000 
products available on the website, 
business specialists and a national call 
centre, Officeworks is committed to 
providing great service to customers and 
making the customer experience easy 
and engaging, irrespective of how they 
choose to shop. 

Officeworks is focused on the safety, 
health, wellbeing, and career progression 
of more than 9,000 team members. 
Pleasingly, Aboriginal and Torres Strait 
Islander employment in Officeworks 
exceeds employment parity of 
three per cent of our workforce. 

Officeworks is committed to ensuring 
the long-term sustainability of the 
business through building and maintaining 
meaningful connections with the 
communities in which it operates, 
fundraising for national partners and local 
community groups, reducing its impact 
on the environment, and sourcing 
products and services responsibly.

HEALTH, SAFETY  
AND WELLBEING

The safety, health and wellbeing of team 
members and customers is Officeworks’ 
number one priority. Officeworks’ goal is 
to make sure that everyone arrives home 
safely after working, shopping or visiting 
the business, free from any kind of harm 
or injury.

In the past year, Officeworks has 
continued to see improvement in its 
safety performance, with its TRIFR 
reducing to 5.8. This means that during 
the past 12 months, 58 team members 
have lost one or more shifts due to an 
injury at work. While one injury is one 
too many, a TRIFR of 5.8 represents 
a 4.9 per cent improvement when 
compared to the previous year. 
Contributing to these results was the 
introduction of the full InjuryCARE 
program to New South Wales and 
Western Australian sites. 

48

Wesfarmers 2022 Annual Report

Greenhouse gas emissions
SCOPE 1 & 2

Operational waste

 RECOVERED

 DISPOSED

6.0kt

2022

2021

2020

2019

2018

5.3

5.8

5.1

5.2

4.4

0.7

0.6

0.8

1.1

1.4

 MARKET-BASED1

 LOCATION-BASED2

30.8ktCO2e

2022

30.8

37.2

2021

2020

2019

2018

34.4

40.1

n.a.

n.a.

n.a.

43.2

45.8

49.1

1  Emissions based on GHG Protocol Scope 2  

market-based reporting standard.

2  Scope 1 and 2 data includes emissions for 

businesses where we have operational control 
under the NGER Act.

Community contributions1

Ethical sourcing program

 DIRECT

 INDIRECT

$7.3m

2022

2021

2020

2019

2018

2.4

2.1

2.4

2.6

2.4

4.9

4.3

3.1

1.5

1.3

1  Direct community contributions include  

cash in-kind and time contributions. Indirect 
community contributions include contributions 
from team members and customers enabled 
by our businesses.

  1,092 sites in the ethical sourcing program 

  496 sites were monitored this year (45%)1

  33 sites in the program had reportable 
breaches (3%)2

1  The frequency of monitoring varies depending on 
prior audit findings and the level of assessed risk.
2  We work with our suppliers to remedy reportable 
breaches. In certain very rare circumstances, we 
may suspend or terminate our arrangements with 
that supplier.

Recognising the impacts on communities 
across Australia from COVID-19, 
Officeworks partnered with organisations 
that provide support for children’s health 
and education. Together with its 
customers, Officeworks raised $1 million 
to support 14 organisations across  
the country. 

As a leading provider of educational 
resources for early learning centres, 
and primary and secondary schools, 
one of Officeworks’ strategic priorities 
is promoting strong educational 
outcomes for all Australian students, 
no matter their circumstances. 

Together with its long-term partners,  
The Australian Literacy and Numeracy 
Foundation and The Smith Family, 
Officeworks identifies opportunities 
and champions causes that support 
students who need it most.

During the financial year, thanks to the 
generosity of its team and customers, 
9,820 Australian students received 
sponsorships and education resources 
funded by the more than $2 million raised 
through the Wall of Hands and Back 
to School appeals. 

In addition, Officeworks developed new 
initiatives including hosting The Smith 
Family’s Work Inspiration reach-out 
sessions to facilitate employment 
opportunities and partnered with 
book-sharing organisation 123Read2Me.

ETHICAL SOURCING

Officeworks’ approach is guided by the 
United Nations Guiding Principles on 
Business and Human Rights (UNGPs), 
which highlight that all businesses have 
a responsibility to uphold and respect 
human rights.

During the year, Officeworks continued 
to complement its risk-based, audit-
centric approach with an outcome-
focused program aimed at improving 
worker wellbeing and engagement 
within its direct supply chain. 

During the first round of worker surveys, 
a total of 1,258 workers across four 
factories shared their concerns, which 
included a lack of trust in internal 
grievance channels, lack of understanding 
of how wages are calculated, unequal 
treatment of workers based on their 
gender, and dissatisfaction with working 
hours. Using this information, Officeworks 
collaborated with factory management 
to implement actions to address worker 
concerns and improve overall working 
conditions. Six months after the first 
round of surveys, a 17 per cent 
improvement in worker satisfaction was 
achieved, evidencing positive change for 
the 2,269 workers at those factories. 

To further elevate a safety-first culture, 
Officeworks implemented a safety 
behaviour program, Switch On. This 
involved team members from the 
Leadership Team, store operations and 
supply chain, and provided resources to 
help develop and sustain a safety culture 
of awareness, accountability and courage.

Officeworks’ health and wellbeing 
program, Your Best Life, continued this 
year and team members were provided 
tools, resources and initiatives to improve 
wellbeing. The Moving Mindz 2.0 
eight-week wellbeing challenge inspired 
over 2,400 team members from across 
the business to participate in the program.

Officeworks continues to foster an 
environment where safety is viewed 
beyond the risk of physical harm, building 
a psychologically safe workplace where 

its team members feel comfortable 
to speak-up if they are not okay, from 
either a physical or mental health 
perspective. This includes reducing 
mental health stigma by encouraging 
everyday conversations of care as well 
as acknowledging days of significance, 
such as RUOK? Day.

COMMUNITIES

Officeworks is committed to supporting 
the communities in which it operates and 
is passionate about building meaningful 
connections that help others to overcome 
challenging circumstances and thrive.

Officeworks’ Make a Difference Appeal 
allows customers to round up the cost 
of their purchases, contributing financial 
support to local and regional causes. 

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Operating and financial review | Officeworks

All suppliers of goods and services must 
adhere to Officeworks’ Ethical Sourcing & 
Modern Slavery Policy, which outlines the 
minimum standards required to work with 
Officeworks. To date, Officeworks has 
mapped over 28,000 products to the 
primary site of manufacturing, with 1,092 
sites involved in its ethical sourcing audit 
program. Officeworks seeks to work with 
its suppliers and non-government 
organisations to remediate and scale 
impact and promote a coordinated 
approach to tackling complex modern 
slavery issues. 

ENVIRONMENT

As a sustainability leader, Officeworks 
recognises its important role in 
demonstrating action, advocating for 
change, and driving collaboration across 
the retail industry as part of the transition 
to a net zero and circular economy.

Officeworks’ approach to reducing 
emissions and adopting more circular 
business practices is outlined in its People 
and Planet Positive commitments, which 
includes taking meaningful climate action, 
contributing to a more circular economy, 
and supporting customers to shop 
more sustainably.

During the year, Officeworks reduced 
Scope 1 and 2 market-based emissions 
by 10.5 per cent, and continued to 
transition to 100 per cent renewable 
energy by 2025 through the installation 
of on-site solar panels and by signing 
a long-term agreement to procure 
renewable electricity in Queensland. 
As part of Officeworks’ Restoring Australia 
two-for-one tree planting initiative, a total 
of 1.24 million trees have been planted 
across Australia since launching in 2017, 
with over 1,800 hectares of land restored. 

To contribute further to a circular 
economy, in February 2022 Officeworks 
announced its investment in the 
World’s Biggest Garage Sale (WBGS), 
a Brisbane-based social enterprise, 
to help scale circular economy solutions 
across Australia for the retail sector.

In March 2022, Officeworks’ commitment 
to people and the planet was recognised 
at the Banksia Foundation’s 33rd National 
Banksia Sustainability Awards, with 
Officeworks winning the Large Business 
Transformation Award category.

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Repair, repurpose or recycle unwanted products

Officeworks recognises that Australians are increasingly looking for ways to dispose 
responsibly of unwanted goods, including e-waste which is one of the fastest 
growing waste streams. 

As a large retailer of technology products, Officeworks launched its ‘Bring it Back’ 
program in 2015, as an easy way for customers to recycle computers, laptops, 
printers, ink cartridges and other accessories for free. This program has since 
expanded to collect a wider range of items including batteries, pens and markers, 
digital storage devices and mobile phones. Since 2015, Bring it Back has diverted 
over 7,000 tonnes of resources from landfill. 

During the 2022 financial year, a total of 1,651 tonnes of unwanted products were 
collected from customers for recycling, an increase of 12 per cent on the prior year, 
even though collection was disrupted by COVID-related store closures. This volume 
includes the equivalent of 4.1 million AA batteries through Officeworks’ national 
battery recycling service, some 2.5 million units more than last year. 

To make it easier to recycle pens and markers, Officeworks expanded collection 
points into classrooms across Australia. Some 273 schools were supplied with 
collection boxes and educational resources to encourage students to collect and 
recycle used pens, markers and textas. Combined with instore collections, during 
the year Officeworks collected the equivalent of 1.3 million units of pens and 
markers for diversion from landfill to recycling. 

While recycling is important, repairing items helps to keep products and materials 
at their highest value for longer. Officeworks increased its focus on building repair 
capability, acquiring a 21 per cent stake in Brisbane-based social enterprise, WBGS. 

Since establishing the partnership in 2019, the WBGS has collected, repaired, 
repurposed and resold 289 tonnes of imperfect or damaged furniture from 
Officeworks’ Queensland stores. Working with WBGS, Officeworks plans to expand 
this program nationally under a new brand, Circonomy, supporting growing circular 
economy ambition through more repair and refurbishment of furniture and 
other items.

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STRATEGY

Officeworks is committed to helping make bigger things happen for its customers, team members, the community, and its other stakeholders. Officeworks will 
continue to drive growth and productivity by executing its strategy, centred around five key areas.

Strategies

Achievements

Focus for the coming years

Our team 

We are skilled, 
committed and 
healthy

 – Improved safety performance, with a TRIFR of 5.8
 – Investment in the physical and mental wellbeing of the team
 – Participation rate of Aboriginal and Torres Strait Islander team 

members at 3.6 per cent

 – Continue to invest in team member safety, health 

and wellbeing

 – Strengthen position as an employer of choice
 – Continue to invest in diversity and belonging programs

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experience 

We make 
things easy 
and engaging

 – Enhanced online shopping experience through improvements  

 – Create more personalised and relevant customer experiences 

to website and mobile app

and offers

 – Refreshed the brand and created more inspiring experiences 

 – Leverage ongoing investment in better knowing and 

online and instore that engage customers

understanding our customers

 – Invested in data and digital capabilities to provide more timely, 
personalised and engaging communications to customers

 – Drive improved customer experience through the Officeworks 

data and analytics platform

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Growing our 
business 

We are ambitious 
in driving growth

Operational 
excellence 

We strive to do 
things better

 – Expanded ranges, for example art, craft, education, technology 

 – Continue to invest across every channel (including stores  

and cleaning and hygiene

 – Expanded ranges of own-brand products
 – Launched Classroom Essentials offer for schools
 – Continued to make working-from-home easy and engaging for 

both the employer and employee, including launching Flexiworks

and online) to improve the customer experience
 – Continue to improve the range to meet changing 

customer needs

 – Further growth in the education and business-to-business 

segments

 – Accelerate the rollout of the Flexiworks platform to support 

the work-from-home segment and flexible working 
arrangements for employers and employees

 – Increased operational capability, capacity and productivity  

 – Introduce new handheld technology to store team members, 

in customer fulfilment centres, including completing the transition 
to a new Victorian customer fulfilment centre 

enabling process improvements

 – Invest in inventory planning and stock management 

 – Completed the replacement of print and copy self serve machines 

to improve availability and speed of delivery

in stores

 – Implemented new customer call technology to stores 
 – Implemented click and collect process improvements
 – Renegotiation of enterprise-wide technology agreements

 – Continue to simplify and modernise IT systems, architecture 

and infrastructure

 – Continued investment in modernising supply chain, including 
transitioning to new customer fulfilment centre in Western 
Australia and additional international distribution centre 
capacity in Victoria

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Connecting with 
our communities 

We are a part of 
where we live

 – Reduced Scope 1 and 2 market-based emissions  

by 10.5 per cent and installed PV solar on seven stores
 – Diverted 88 per cent of all operational waste from landfill
 – Supported 9,820 disadvantaged Australian students with 

 – Continue to invest in renewable energy to support transition 

to 100 per cent renewable electricity by 2025

 – Expand circular economy solutions through investment 

in Circonomy

the support of customers and national partners

 – Deepen connections in the communities where we live and 

work through local, state, and national programs

RISK MITIGATION

Officeworks recognises that taking appropriate business risks is a critical aspect of generating acceptable business returns. We encourage our team to understand 
risk as it relates to their role, and in doing so we maximise their ability to identify and leverage opportunities.

COVID-19 remains a feature of the operating environment. It is inherent across multiple key risk areas and not separated below. COVID-19 mitigation activities 
continue to evolve with changing circumstances and in line with public health guidance. Additionally, Officeworks recognises climate change as a key risk (and 
opportunity) which is discussed elsewhere within this annual report.

Risk

Mitigation

Supply chain 
disruptions

 – Proactively manage inventory position and relationships with suppliers to accommodate disruptions to global supply chains
 – Continue to modernise domestic supply chain facilities 

Changing 
customer 
behaviours

 – Regular reviews of product range to ensure that it meets the evolving preferences of Officeworks’ customers
 – Leverage ongoing investment in data analytics capability to deepen understanding of customer needs, identify emerging trends 

and monitor the competitive landscape

 – Ongoing investment in the every-channel business model to deliver easy and engaging experiences for customers

Data and  
systems security

 – Dedicated internal capability focused on IT systems and data security
 – Cyber risk controls embedded and regularly tested, and continue to be updated in light of evolving threats
 – Security awareness training program to keep all team members educated and informed

Ethical sourcing 
and sustainability

 – Five-year sustainability strategy (People and Planet Positive Plan 2025) to identify and mitigate sustainability risks and opportunities
 – Responsible sourcing policies supported by investment in detailed compliance programs

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Operating and financial review | Industrial and Safety

Industrial and Safety

Year in review

Revenue

$1,925m

2022

 1,925 

2021

2020

2019

2018

 1,855 

 1,745 

 1,752 

 1,750 

EBT

$92m

2022

2021

20201

2019

2018

 92 

 70 

39 

 86 

 118 

Key financial indicators

Post-AASB 16

Pre-AASB 16

For the year ended 30 June

2022

2021

20201

20201

2019

2018

Revenue ($m)

 1,925 

 1,855 

 1,745 

 1,745 

 1,752 

 1,750 

Earnings before tax ($m)

 92 

 70 

 39 

 40 

 86 

 118 

Capital employed R12 ($m) 

 1,166 

 1,126 

 1,448 

 1,447 

 1,475 

 1,409 

Return on capital employed R12 (%) 

Cash capital expenditure ($m)

7.9

64

6.2

62

2.7

59

2.8

59

 5.8 

 83 

 8.4 

 50 

1  The 2020 earnings before tax for Industrial 
and Safety excludes pre-tax impairments 
of $310 million, and includes $15 million of 
payroll remediation costs.

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Our performance

Outlook 

Industrial and Safety revenue of  
$1,925 million was 3.8 per cent above 
the prior year. Earnings of $92 million 
were 31.4 per cent above the prior year.

Blackwoods’ revenue increased on the 
prior year, underpinned by continued 
growth from strategic customers, 
particularly from customers in the mining 
and manufacturing sectors and in 
Western Australia and Queensland, 
as well as solid demand in New Zealand. 
This was partially offset by weakness 
in demand in New South Wales and 
Victoria, as well as the impact of elevated 
demand for critical products (respiratory, 
cleaning and hygiene products) in the 
prior year. Blackwoods’ earnings growth 
was driven by higher sales and partially 
offset by the continued investment in 
customer service and digital capabilities 
and the impact of COVID-related 
disruptions. 

Workwear Group’s revenue reflected 
the divestment of the UK business in 
the second half of the prior year, while 
earnings increased with stronger sales 
from the industrial workwear brands, 
including KingGee and Hard Yakka, 
and the benefit of improved operating 
efficiencies including the simplification 
of the uniforms business that was 
implemented in the prior year. 

Coregas’ revenues and earnings 
increased due to higher demand from 
industrial and healthcare customers. 
The business also benefited from the 
acquisition of a gas and welding 
products business in July 2021.

Safety and injury management remains 
a core focus and the TRIFR improved 
to 3.5 for the year.

The Industrial and Safety businesses 
are focused on driving improvements 
in performance and profitability, 
strengthening the customer value 
proposition and executing new growth 
opportunities. 

The businesses continue to actively 
manage ongoing disruptions relating to 
global supply chains, labour availability 
challenges in some states and territories, 
and the inflationary environment.

Blackwoods will continue to focus 
on improvements to its customer 
value proposition and core operational 
capabilities, including across systems 
and in data and digital.

Workwear Group remains focused 
on driving growth in its industrial brands 
and uniforms business, improving 
operational excellence and strengthening 
its digital offer.

Coregas is expected to benefit from 
continued strong demand in the 
healthcare and industrial segments, 
despite ongoing competitive pressure 
and rising input and distribution costs. 

On 1 August 2022, the Industrial and 
Safety division completed the sale of 
the Greencap consulting business to 
WSP Global Inc., a global professional 
services firm. The earnings impact of the 
sale is expected to be minor and will be 
recognised in the 2023 financial year. 
Industrial and Safety has retained 
Greencap’s digital contractor management 
solutions business, Cm3.

Tim Bult
Managing Director  
Wesfarmers Industrial and Safety

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Operating and financial review | Industrial and Safety

Our business

Sustainability performance

The Industrial and Safety portfolio 
of businesses services customers 
across diverse industries such as mining, 
manufacturing, construction, retail, food 
and beverage, utilities, transport, facilities 
maintenance, health and government. The 
businesses also service a wide range of 
customer groups including large corporate 
enterprises, government organisations 
and small- to medium-sized businesses. 

Industrial and Safety currently operates 
three main businesses: Blackwoods, 
Workwear Group and Coregas. 
On 1 August 2022, Industrial and Safety 
completed the sale of the Greencap 
consulting business to WSP Global Inc.

Blackwoods is the largest business 
in terms of revenue and is a distributor 
of tools, workplace safety and personal 
protective equipment, workwear, electrical 
and industrial supplies. It services a wide 
variety of customers of different sizes 
across Australia and New Zealand 
through an extensive supply chain, 
branch network and online platforms. 

Workwear Group is Australia’s largest 
provider of industrial and corporate 
workwear, featuring iconic Australian 
brands Hard Yakka and King Gee. 
Workwear Group also supplies bespoke 
and catalogue uniforms to leading airlines, 
financial services providers, retailers and 
other large corporates through its NNT 
and Workwear Group Uniforms brand, as 
well as specialised garments to defence 
and emergency services customers 
in Australia and New Zealand. 

Coregas is a supplier of industrial, 
specialty and medical gases in Australia 
and New Zealand, serving customers of 
all sizes through multiple sales channels 
and distribution networks. 

HEALTH, SAFETY  
AND WELLBEING

Health, safety and wellbeing continue 
to be top of mind at Industrial and Safety, 
with each business unit progressing 
initiatives to mitigate fatal risk, prevent 
injuries, and support team member 
physical and psychological wellbeing. 

With the ongoing challenges of adapting 
to COVID-19 and the associated impacts 
on team members, the division invested 
in strengthening its mental health and 
wellbeing programs. In addition to training 
30 mental health first aiders, Blackwoods 
grew its Health and Happiness 
community, Coregas improved its  
safety interaction program, Greencap 
delivered psychological health and 
wellbeing workshops, NZ Safety 
Blackwoods launched its FeelSAFE 
program with psychological, physical 
and financial support for team members, 

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Safety performance

Aboriginal and Torres Strait 
Islander team members

TOTAL RECORDABLE  
INJURY FREQUENCY RATE1

3.5

2022

2021

2020

2019

2018

3.5

4.3

4.8

6.9

6.6

92

2022

2021

2020

2019

2018

92

83

72

77

69

1  TRIFR measures the number of lost time and 

medical treatment injuries per million hours worked.

Greenhouse gas emissions
SCOPE 1 & 2

Operational waste

 MARKET-BASED1

 LOCATION-BASED2

 RECOVERED

 DISPOSED

26.4ktCO2e

2022

26.4

26.4

2021

2020

2019

2018

27.4

27.4

n.a.

n.a.

n.a.

27.1

25.9

26.0

1  Emissions based on GHG Protocol Scope 2 

market-based reporting standard.

2  Scope 1 and 2 data includes emissions 

for businesses where we have operational 
control under the NGER Act and emissions 
in international operations.

1.9kt

20221

20212

0.8

0.6

1.1

0.9

1  Industrial and Safety continued to improve 

its methodology with the addition of NZ Safety 
Blackwoods. 

2  Due to improved methodology, the years prior to 
FY2021 are not comparable. 2021 now includes 
a significant portion of actual weight versus 
industry-standard estimates used in prior years.

Community contributions1

Ethical sourcing program

 DIRECT

 INDIRECT

$0.8m

2022

2021

2020

2019

2018

0.8

0.9

1.0

1.2

0.6

0.0

0.2

0.0

0.0

0.1

1  Direct community contributions include  

cash in-kind and time contributions. Indirect 
community contributions include contributions 
from team members and customers enabled 
by our businesses.

  500 sites in the ethical sourcing program 

  266 sites were monitored this year (53%)1

  44 sites in the program had reportable 
breaches (9%)2

1  The frequency of monitoring varies depending on 
prior audit findings and the level of assessed risk.
2  We work with our suppliers to remedy reportable 
breaches. In certain very rare circumstances, we 
may suspend or terminate our arrangements with 
that supplier.

ETHICAL SOURCING AND 
MODERN SLAVERY

The division is committed to establishing 
strong and respectful relationships with 
suppliers and ensuring ethical sourcing 
practices for direct suppliers, own-brand, 
and customer-branded product 
manufacturers. This includes sourcing 
products in a responsible manner while 
working with suppliers to improve their 
social and environmental practices. 

Each business manages its own 
risk-based ethical sourcing policy and 
strategy and rolled out training throughout 
the year to support its team members, 
suppliers and customers with better 
managing and identifying ethical sourcing 
risks. Using a risk-based approach, 
services such as cleaning providers, 
labour hire and branded merchandising 
goods are being reviewed and assessed.

The Industrial and Safety division has 
also joined other Wesfarmers divisions 
to trial ‘Your Voice’, a brand-agnostic 
direct worker helpline set up by Quality 
Inspection Management (QIMA) across 
manufacturers in Bangladesh, India, 
Indonesia and Vietnam. The anonymous 
helpline allows workers to confidentially 
raise concerns direct to QIMA and 
Industrial and Safety businesses. 
If the concerns are classified as serious 
or reportable, Industrial and Safety 
investigates and assists with any 
required remediation.

CLIMATE CHANGE RESILIENCE

Industrial and Safety acknowledges the 
important part it can play in addressing 
climate change and reducing carbon 
emissions. Industrial and Safety 
introduced new Scope 1 and 2 emissions 
targets during the year, detailed on 
page 78 of this annual report.

Blackwoods has mapped its LED 
footprint with the view to formalise a 
future fit-out strategy aligned to innovation 
and LED performance. A solar PV system 
will be installed at the Melbourne 
distribution centre in the 2023 financial 
year and once complete, all Blackwoods 
distribution centres will leverage 
solar power.

Coregas continued its involvement 
in a range of hydrogen-based projects, 
which includes Australia’s largest 
hydrogen project, the Hydrogen Energy 
Supply Chain (HESC) gasification plant in 
the Latrobe Valley, Victoria. As part of this, 
Coregas assisted loading the world’s first 
liquid hydrogen ship – Suiso Frontier 
– in Victoria for transport to Japan. 

and Workwear Group prepared mental 
health leader training for launch in 2023. 
These initiatives are tracking well, with 
positive engagement and feedback from 
team members. The division’s focus on 
mental health and wellbeing programs will 
be maintained in the coming years.

DIVERSITY AND INCLUSION

Industrial and Safety embraces diversity 
and strives to create inclusive work 
environments, with particular attention 
to gender balance, and the engagement 
and employment of Indigenous people. 

Gender representation in leadership roles 
has remained stable at approximately  
30 per cent female. During the year, 
Greencap produced blogs and videos 
and used LinkedIn Learning to educate 

its teams on the impacts of gender 
bias and how to support and empower 
women at work.

Indigenous team members account for 
three per cent of the division’s Australian 
workforce and Indigenous supplier 
spend totalled more than $7.1 million 
for the year. Blackwoods released its 
financial year 2022 to 2024 Aboriginal 
and Torres Strait Islander Strategy and 
Plan outlining actions, expectations and 
measures in support of the Wesfarmers 
Reconciliation Action Plan.

The onboarding of three additional 
First Nations-owned recruitment partners 
bolstered the pool of candidates at 
Blackwoods, along with increased overall 
opportunity due to labour shortages.

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Operating and financial review | Industrial and Safety

Within New Zealand, fuel reduction 
and waste are two key areas of focus, 
given the high level of existing renewable 
generation sources. NZ Safety 
Blackwoods is transitioning its fleet 
to hybrid vehicles. To date, 47 hybrid 
vehicles have been received – 45 per cent 
of the business’ total fleet.

Workwear Group upgraded the 
LED lighting at its Melbourne Airport 
distribution centre and applied heat 
resistant roof sealant to its Welshpool 
distribution centre. The seal has resulted 
in significant heat reduction within the 
warehouse and has reduced the use 
of air-conditioning and overhead fans.

PRODUCT SAFETY

Industrial and Safety commits to 
providing customers with safe products 
by continuing to improve standards, 
controls and processes in high-risk 
product safety areas, especially for 
own-brand products. As a technical 
services business, Greencap focuses 
on delivering high-quality client service. 

The division maintained zero own-brand 
product recalls, supported by critical 
paths within the sourcing and new 
product development workflow for factory 
and product level compliance.

Blackwoods launched its revised Supplier 
Assurance and Risk Management 
Program – an improvement opportunity 
identified in the approach to due diligence 
of national and international brands. 
The initiative aims to better understand 
suppliers’ performance across a range 
of operational activities. To date, 67 
suppliers have been engaged as part 
of a phased rollout plan.

NZ Safety Blackwoods introduced a 
quality issue reporting framework which 
allows the business to effectively record, 
track and escalate issues. It conducted 
regular risk assessments and inspections 
for all goods manufactured directly to 
maintain quality, safety, and compliance. 

Workwear Group ensured suppliers 
remain compliant to the Quality Assurance 
Inspections Program, with in-country 
teams maintaining regular communication 
with suppliers. Where possible, in-country 
Quality Control (QC) teams delivered 
training at factories so quality standards 
are not compromised. 

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Blackwoods grows partnership with Geared Up 
Culcha

Blackwoods has a long-standing relationship with Geared Up Culcha Pty Ltd 
(Geared Up Culcha), an Indigenous, Supply Nation certified provider of work wear, 
promotional merchandise, signage and personal protective equipment (PPE). 

For over ten years, Geared Up Culcha has supplied the Blackwoods team 
with promotional merchandise and polo shirts bearing unique Aboriginal art, 
which have become treasured items among all team members.

Our relationship was strengthened in 2021 when Blackwoods acquired 
a 49 per cent interest in south-east Queensland-based Geared Up Culcha, 
helping to position the business for growth and to access new markets. 

This year, Geared Up Culcha has expanded its customer reach through its 
‘Bricks and Clicks’ portal, and by becoming a bigger supplier to Blackwoods. 

Geared Up Culcha’s offer has always included state-of-the-art embroidery and 
embellishment, along with valuable linkages to First Nations designers and artists. 
With recent growth, Geared Up Culcha will be relocating to a larger warehouse 
and production complex, providing more space for additional products and an 
enhanced office and display room.

For Blackwoods, the collaboration gives customers access to a wider range 
of products and services from a trusted Supply Nation certified supplier, through 
their existing supplier relationship.

Geared Up Culcha owner Paul Dodd said he is proud of the partnership which 
also provides meaningful, genuine opportunities to give back to the community. 

“Blackwoods is now our second largest client, giving us the capacity to expand 
our products and services nationally. The partnership is helping to take us from 
a very good business to a great business!”, Mr Dodd said.

STRATEGY

Industrial and Safety continues to focus on performance improvement activities to enhance growth initiatives including investment in digital capabilities. 
Across Blackwoods and Workwear Group, this includes focusing on data, ERP systems, e-commerce, product and service capabilities and cost improvement 
initiatives aimed at deepening customer relationships while improving operating efficiencies. Coregas is focused on expanding in key sectors including mining 
and healthcare, enhancing its product offer and renewable opportunities.

Strategies

Achievements

Focus for the coming years

Implementation 
of a market-
leading offer 
in the Australian 
and New Zealand 
industrial 
distribution 
market

 – Strengthened relationships with strategic customers
 – Integrated supply program delivering end-to-end procurement 

solution

 – Increased digital engagement and improved customer 

experience across the digital offerings 

 – ERP deployment completed in the eastern and southern 

operations and nationally for the finance function 

 – Enhance customer value proposition through unbeatable 
range, reliability, expertise and ease of doing business
 – Product range enhancement, including strengthening  

safety category 

 – Leveraging scale from operations and improving operating 

efficiencies with enhanced capability

 – Expansion of technical capabilities and service solutions
 – Completing the implementation of the ERP system 

and streamlining operating processes through data and  
digital initiatives 

 – Ongoing trade store refresh program in New Zealand

Digital 
transformation  
of Workwear 
Group and 
targeting growth 
from uniforms 
and industrial 
brands

Grow Coregas 
market share

Expand the  
online capabilities 
of Cm3

 – Strong growth from industrial brands due to product innovation, 

improved service levels and brand desirability

 – Completion of cost improvement initiatives and simplification  

 – Investment in digital transformation including online  
re-platforming to further enhance the customer offer 
and simplify the business 

of the uniforms business model

 – Realising new business opportunities for uniforms through 

 – Opened new distribution channels, including international for the 

targeted focus on profitable contracts

KingGee and Hard Yakka brands 

 – Targeted focus on winning and retaining uniforms contracts

 – Continued revenue growth and increased market share 
 – Geographic expansion within Australia and New Zealand 
 – Healthcare expansion with the entry into new health segments
 – Increasing activity in hydrogen projects

 – Accelerating growth from industrial and corporate brands
 – Enhancing service levels through logistical excellence and 

investment in planning systems

 – Key customer growth, including major mining customers, 

healthcare and in the Trade N Go Gas offer

 – Further expanding product offers such as specialty gases 
 – Continue to explore renewable opportunities and leverage 

expertise in the hydrogen supply chain

 – Continued investment in Cm3 to improve the offer

 – Position Cm3 as the leading contractor management platform 

in Australia and New Zealand

RISK MITIGATION

As a supplier of industrial, safety and workwear products, the business is exposed to the performance of customers’ industry sectors, new and existing competitor 
activity and trends, as well as macro-economic factors such as capital investment, employment, exchange rates and interest rates. 

COVID-19 remains a feature of the operating environment. It is inherent across multiple key risk areas and not separated below. COVID-19 mitigation activities 
continue to evolve with changing circumstances and in line with public health guidance. Additionally, Industrial and Safety recognises climate change as a key risk 
(and opportunity) which is discussed elsewhere within this annual report.

Risk

Mitigation

Supply chain 
disruptions and 
labour availability

Subdued profitable 
growth and 
margin pressure, 
particularly as 
a result of the 
inflationary 
environment

Growth of new 
and existing 
competitors, 
including digital 
market entrants

Safety or 
environmental 
incidents

 – Implementation of strategies such as supplier engagement and sourcing visibility, enhanced customer engagement and exploration  

of alternative sourcing options

 – Enhance recruitment capabilities and team member value proposition
 – Investment in planning systems to further optimise stock availability

 – Enhance Blackwoods’ customer value proposition through unbeatable range, reliability, expertise and ease of doing business
 – Target new growth opportunities, strengthen brand positioning and enhance service level excellence in Workwear Group
 – Continue to develop new distribution channels for Coregas, expand large customer segments by leveraging Blackwoods’  

relationships and diversify product offering

 – Grow the Cm3 digital offer
 – Enhance pricing and contract management, including cost tracking activities, across all Industrial and Safety businesses, as well 

as focus on initiatives that improve the cost to serve model 

 – Build data and digital capabilities to deepen customer relationships and improve operating efficiencies 
 – Continue to optimise range, price and supply chains

 – Continue to focus on quality control systems and ensuring compliance with regulatory requirements and standards 
 – Fully operational safety program including regular monitoring and the continuation of the safety culture
 – Active safety engagement by senior management 
 – Regular review of appropriate emergency response and crisis management plans, including in the event of environmental incidents

Data and IT 
security

 – Developing cyber-resilient workforce through increased training
 – Continue to focus on enhancing security monitoring systems

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Operating and financial review | Health

Health

Year in review

Revenue

$1,240m

EBT

$(25)m

Key financial indicators

For the year ended 30 June 2022

Revenue ($m)

Earnings before tax ($m)

 1,240 

 (25)

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Our performance 

Outlook 

The Health division is well positioned 
to deliver long-term growth and will 
continue to focus on integration activities 
and pursuing opportunities to strengthen 
the competitive position of API and 
its pharmacist partners. 

Investment to accelerate the 
transformation of the business and 
support long-term growth will be focused 
on improving underlying performance in 
the core business as well as e-commerce 
capabilities, expanding DC capacity and 
optimising the Priceline and Clear 
Skincare networks. 

The new Marsden Park DC is on track 
to be operating at full capacity by the end 
of the 2022 calendar year. While efficiency 
benefits from the new automated facility 
are expected from the second half of the 
2023 financial year, some additional 
transition costs will be incurred while both 
the existing and new DCs are operating 
in parallel.

The Health division will recognise 
approximately $13 million per annum 
in non-cash amortisation expenses over 
the next three years relating to assets 
recognised as part of Wesfarmers’ 
acquisition of API, followed by declining 
annual acquisition-related amortisation 
expenses until to the 2033 financial year.

Emily Amos 
Managing Director
Health

Health revenue was $1,240 million for 
the period 31 March 2022 to 30 June 
2022. Excluding non-cash expenses 
relating to assets recognised as part of 
the acquisition of API, impairments and 
one-off expenses associated with the exit 
of the consumer brands manufacturing 
operations in New Zealand, earnings 
were $11 million for the period.

The Pharmacy Distribution business 
delivered a pleasing sales result for 
the ownership period, benefitting from 
continued demand for COVID-19 
treatments and rapid antigen tests, as 
well as strong new customer acquisition. 

Priceline revenue was supported by 
strong sales in all major health categories 
due to elevated cold, flu and COVID-19 
cases during the period. Strong sales 
across health products were partially 
offset by weakness in beauty categories. 
Ongoing global supply shortages 
continued to impact product availability 
in some categories. 

Pharmacy Distribution and Priceline 
earnings were impacted by costs 
associated with the ongoing transition 
to the new Marsden Park distribution 
centre (DC), which commenced in 
February 2022. The new DC is highly 
automated and supported by modern 
pick and pack technology.

Results for Clear Skincare were 
affected by elevated cases of COVID-19 
in the community, which led to reduced 
customer traffic to clinics and impacted 
clinician availability as a result of elevated 
absenteeism and isolation requirements. 

As at 30 June 2022, the Health division 
included 89 Priceline stores, 376 Priceline 
pharmacy franchise stores and 95 Clear 
Skincare Clinics. 

The Health division is working to adopt 
policies that align with Wesfarmers’ 
approach to sustainability. While these 
are progressively implemented, additional 
disclosures about the Health business 
and its material sustainability issues will 
be included in 2023 Annual Report.

 Wesfarmers 2022 Annual Report

59

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating and financial review | Wesfarmers OneDigital

Wesfarmers OneDigital

Wesfarmers OneDigital was established in April 2022 
and brings together Wesfarmers’ digitally native 
businesses, including the OnePass membership 
program, the Group shared data asset, OneData, 
and Catch, which moved into the division from 
Kmart Group on 1 July 2022.

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OneData, formerly the Advanced 
Analytics Centre, manages the 
Wesfarmers shared data asset, providing 
a single view of the customer and 
enabling the divisions to deliver a more 
compelling offer to customers. OneData 
also provides data analytics support 
to OnePass and Catch.

OneDigital is uniquely placed to leverage 
the Group’s trusted retail brands, and 
its near-term priority is to deliver the 
OnePass customer proposition 
roadmap, scale the membership base 
and unlock the latent value embedded 
in OneData.

which will provide fulfilment services 
for other Wesfarmers brands and 
marketplace sellers. 

OneDigital is uniquely placed 
to deliver incremental value to the 
divisions through access to a deeper 
understanding of customers than could 
be achieved standalone. An operating 
loss of approximately $100 million for 
OneDigital (excluding Catch) is expected 
during the 2023 financial year, with the 
division expected to generate new 
revenue streams for the Group over 
the long term.

Nicole Sheffield
Managing Director
OneDigital 

Our business

OneDigital will power the Group’s data 
and digital growth ambitions and provide 
customers with a more seamless, 
rewarding and valuable omnichannel 
experience across the retail businesses. 
OneDigital will provide incremental benefits 
to the existing retail divisions and 
customers through the insights available via 
the shared data asset, and by leveraging 
the benefits of the membership program.

The OnePass program provides members 
with additional benefits and convenience 
when shopping with the Group’s retail 
businesses. In early 2022, the Club Catch 
membership program was rebranded and 
repositioned as OnePass. Kmart, Target 
and Catch are currently part of the 
OnePass program, with Bunnings and 
Officeworks partnerships and additional 
benefits to be added.

Outlook 

OneDigital will build on the momentum 
from the 2022 financial year as it 
continues to focus on supporting the 
Group’s data and digital growth 
ambitions, increasing customer lifetime 
value and accelerating growth in the 
Group’s divisions.

Over the 2023 financial year, OnePass 
will focus on delivering a broader set 
of benefits to members when shopping 
across Wesfarmers’ retail brands. 
Partnerships with Bunnings and 
Officeworks are expected to launch in 
the 2023 financial year, and development 
of a mobile app is currently underway 
to support a convenient and seamless 
customer experience. 

Underpinning the customer roadmap 
for OnePass will be customer analytics 
provided by OneData. OneData remains 
focused on providing insights to support 
the divisions to improve how they develop 
compelling offers, services and products 
that are relevant to each of their customers.

Catch, which transitioned to OneDigital 
at the start of the 2023 financial year, 
will continue on its journey to scale from 
a deal of the day focused business to 
a broad-based marketplace. The key 
areas of focus for Catch include improving 
the performance of its in-stock range and 
continuing to expand the marketplace, 
as well as launching ‘Fulfilled by Catch’, 

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61

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating and financial review | Other activities

Other activities

Wesfarmers is an investor in Flybuys, the BWP Trust, Gresham Partners and Wespine 
Industries, and retains a minority interest in Coles.

FLYBUYS

GRESHAM PARTNERS

COLES

Coles is a leading Australian retailer which 
sells everyday products including fresh 
food, groceries, household goods, liquor, 
fuel and financial services via its national 
store networks and online platforms. 

The Group holds a minority interest in 
Coles through a wholly-owned subsidiary, 
Wesfarmers Retail Holdings Pty Ltd.

For more information on Coles’ 
performance during the year, please  
visit www.colesgroup.com.au

Wesfarmers owns a 50 per cent 
shareholding in leading loyalty and data 
company Flybuys, with Coles holding the 
other 50 per cent. Formerly part of Coles, 
following the demerger of Coles in 
November 2018, the Flybuys business 
was set up as an independent, 
stand-alone business. 

As at 30 June 2022, there were 6.7 million 
active households in the Flybuys loyalty 
scheme. For more information on Flybuys, 
please visit www.flybuys.com.au

BWP TRUST 

Wesfarmers’ investment in the  
BWP Trust (the Trust) contributed 
earnings of $121 million for the financial 
year, an increase of $56 million 
on last year. 

The Trust was established in 1998 with 
a focus on large format retailing properties 
and, in particular, properties leased 
to Bunnings. BWP Management Limited, 
the responsible entity for the Trust, is a 
wholly-owned subsidiary of Wesfarmers 
Limited. Units in the Trust are listed on 
the Australian Securities Exchange and 
Wesfarmers holds, through a wholly-
owned subsidiary, 24.8 per cent of the 
total units issued by the Trust as at 
30 June 2022. 

The Trust’s portfolio as at 30 June 2022 
consisted of a total of 73 properties. 
For more information on the Trust, please 
visit www.bwptrust.com.au

Wesfarmers has a 50 per cent 
shareholding in Gresham Partners Group 
Limited, the holding company for the 
Gresham Partners operations. Gresham 
Partners is a leading independent financial 
services business with activities in 
corporate advisory, funds management, 
property, and capital solutions. 

For more information on Gresham 
Partners, please visit  
www.gresham.com.au

WESPINE INDUSTRIES 

The 50 per cent-owned Wespine 
Industries (Wespine) operates a plantation 
softwood sawmill in Dardanup, Western 
Australia. Wespine manufactures 
structural timber used in the construction 
industry along with landscaping, 
packaging and other timber products. 
Wespine also has an import wholesale 
operation under the brand Staxa.

The level of demand for sawn 
timber products during the year was 
unprecedented. The demand is largely 
attributable to home buyer incentives 
offered by state and federal governments 
in response to the COVID-19 pandemic. 
Underlying interest in timber for 
construction as an alternative to more 
carbon-intensive building materials is 
also growing. The combination of strong 
demand and Wespine production now 
being supplemented by import volumes 
resulted in record timber sales of 
$145 million, up 30.6 per cent on 
the prior year. 

Safety continues to be a focus for 
management with initiatives relating 
to both risk identification and reduction 
resulting in further strong safety 
performance during the period.

For more information on Wespine, 
please visit www.wespine.com.au

62

Wesfarmers 2022 Annual Report

Sustainability 

Sustainability is core to the Wesfarmers 
Way. Our primary objective, value-
creating strategies, and values embed 
care for people and planet, across 
the Group. 

We understand that long-term success 
requires us to look after our team 
members, anticipate the needs of our 
customers, treat our suppliers ethically 
and fairly, invest in our local communities, 
take care of the environment, and behave 
with honesty and integrity. These 
well-established pillars underscore all 
of our work, from business management 
and strategy through to capital allocation, 
knowing that actions aligned with these 
pillars create long-term sustainable 
value for all stakeholders. 

This section of the annual report 
includes information about those 
sustainability issues that we and our 
stakeholders have identified most 
material. Most importantly, our approach 
to the management of these issues is 
focused on driving positive, sustainable 
long-term outcomes. 

Our climate disclosures detail how 
Wesfarmers’ businesses are contributing 
to global decarbonisation efforts, 
supporting the transition to net zero. This 
year, we remained focused on eliminating 
and remediating modern slavery and 
increased the transparency of our supply 
chain and ethical sourcing work. While we 
report progress in safety and inclusion, this 
work remains ongoing. Data and cyber 
security and circular economy are material 
issues for our divisions, with continuing 
rapid growth in the digital economy and 
increased focus on resource scarcity.  
Our approach to governance and 
corporate conduct is detailed in the 
Corporate Governance Overview 
in this annual report. 

Wesfarmers’ sustainability disclosures are 
prepared in accordance with the Global 
Reporting Initiative (GRI) and linked to the 
United Nations Sustainable Development 
Goals. A complete set of our sustainability 
disclosures, including performance data 
which excludes the Health division unless 
otherwise stated, is on the Wesfarmers 
website at www.wesfarmers.com.au/
sustainability 

2022 HIGHLIGHTS

7.4%

reduction in market-based 
Scope 1 and 2 emissions, 
excluding the Health division

3.3% 

Indigenous employment  
parity regained

1,724 

Suppliers monitored in the 
ethical sourcing program

4.2%

reduction in TRIFR

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Operating and financial review | Sustainability

How our approach creates value for Wesfarmers stakeholders

Sustainability has long been integrated into Wesfarmers’ approach to capital allocation, and the oversight and management  
of our businesses. Diverse resources, including our team members, capital, partners and businesses, are invested and managed, 
consistent with our value-creating strategies, to support our primary objective, to deliver satisfactory returns to shareholders. 

Each year, we determine our most material sustainability issues, with input from internal and external stakeholders. We monitor 
these issues closely and our approach embeds them into decision-making, creating sustainable long-term value. More detail is 
included in the following pages. Next year, we expect to include the new Health division in Group sustainability disclosures. 

OUR RESOURCES

OUR VALUE-CREATING 
STRATEGIES

SUSTAINABILITY 
PILLARS

Team members
e

Team members

erating e x c

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Capital and 
assets

Our partners 
and supply 
chains

Natural and 
sustainable 
resources

Diverse 
businesses

s

Reputation and 
capabilities

Suppliers

Communities

Customers

Environment

Integrity and 
honesty

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APPROACH

MATERIAL 
ISSUES

SELECTED FY2022 
OUTCOMES

Looking after our team members and providing 
a safe and fulfilling work environment 

People development, 
diversity and inclusion

We support gender balance, and employment parity 
for Indigenous team members because diverse 
teams perform better. Safe and fulfilling workplaces 
strengthen business productivity and performance and 
team member retention and engagement.

Advancing 
reconciliation

Health, safety  
and wellbeing

9.2
TRIFR representing a 
4.2% improvement  
on FY2021 

3,601
or 3.3% of Australian 
team members 
identify as Indigenous 
Australians, with 
employment parity 
regained in late 2021

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Engaging fairly with our suppliers and  
sourcing ethically and sustainably

Ethical sourcing  
and human rights

By sourcing products and services in a responsible, 
sustainable way, we strengthen critical supplier 
relationships and support workers in our supply chain. 
Customers value our ethical approach.

4,355
supplier sites in the 
ethical sourcing 
program with 2,651 or 
61% monitored during 
the year 

98% 
of reportable breaches 
were or are being 
remediated, improving 
conditions for workers 
in our supply chain 

R
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’

Supporting the communities in which 
we operate 

By being connected to and invested in our local 
communities, we help them to succeed. Connected 
and creative communities are more agile, inclusive and 
innovative.

Economic 
and community 
contribution

$53.7m
in direct and indirect 
contributions 
to community 
organisations, 
principally in Australia 
and New Zealand 

45,000
visitors to Ever 
Present: First Peoples 
Art of Australia during 
its presentation at the 
Art Gallery of Western 
Australia 

Anticipating the needs of our customers 
and delivering competitive goods and services 

Our businesses perform better when providing 
customers with affordable, safe and reliable products 
and services. By investing to ensure products and 
services are safe, Wesfarmers builds confidence 
among customers which strengthens its businesses.

Product quality, 
safety and  
standards

Data and cyber 
security

100m+
digital interactions 
with customers 
each month with 
operations maintained 
during COVID-related 
lockdown

OnePass
established to provide 
members with 
additional benefits and 
convenience when 
shopping with our 
retail businesses

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Taking care of the environment 

Circular economy

Being nature and climate-aware builds resilience 
and creates opportunities for our businesses. 
Managing resources responsibly resonates with 
our team members and customers, reduces our 
environmental impact and enhances our reputation.

Acting with integrity and honesty  
in all our dealings
Board oversight of sustainability risks and opportunities 
and robust governance promote accountability, 
transparency and achievement of sustainable 
outcomes across the Group.

Climate resilience

Governance, 
corporate conduct 
and ethics

7.4% 
reduction in Scope 1 
and 2 market-based 
emissions relative to 
FY2021, excluding the 
Health division 

69.6% 
of operational waste 
recovered and diverted 
from landfill 

Remuneration
for senior executives 
included consideration 
of financial performance 
and other matters 
including safety and 
other sustainability issues

ESG data
with new, additional 
metrics monitored to 
support governance 
and reported to 
increase transparency 

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Operating and financial review | Sustainability

Looking after our team members and providing 
a safe, fulfilling work environment

development, and we have increased 
training for leaders and team members 
on wellbeing and mental health.

Wesfarmers partners with each business 
to develop its executive leaders and 
connects all general managers with 
Wesfarmers’ primary objective, values, 
leadership model and strategic focus 
areas, through training that promotes 
collaboration. 

Diversity and inclusion

We recognise, recruit and support 
many facets and combinations of diversity 
across Wesfarmers, consistent with our 
broader community. 

For Wesfarmers to derive benefits of 
this diversity, our team members must 
understand the benefits of inclusion and 
act with inclusivity. To support this 
ambition, Wesfarmers is a member of 
various expert diversity and inclusion 
research organisations. Wesfarmers 
shares best practice and research from 
these organisations across the Group. 

Gender balance

At Wesfarmers, we believe gender 
balance ensures that there are equitable 
opportunities for individuals 
notwithstanding their gender. This 
includes ensuring equitable access to 
employment, compensation benefits, 
and development opportunities across 
the organisation. On any team, we strive 
for a minimum 40 per cent female and 
40 per cent male, with the remaining  
20 per cent being of any gender or 
gender diverse. The Wesfarmers Board 
will maintain a composition of not less 
than 30 per cent female. 

The Wesfarmers Leadership Team is 
balanced with 50 per cent female and 
50 per cent male members, as is the 
total Wesfarmers workforce, comprising 
57 per cent female and 43 per cent 
male team members.

There are opportunities to strengthen 
gender balance in senior executive 
positions, with 65 per cent of senior 
executive roles held by male team 
members. During the year, balance 
among management and professional 
roles improved with 39 per cent of 
positions held by female team members, 
an increase from 37 per cent 12 months 
earlier.

PEOPLE DEVELOPMENT, 
DIVERSITY AND INCLUSION

Integrity and openness are core values 
of Wesfarmers – central to who we are 
and how we work. An open and inclusive 
work culture helps to attract and retain 
an outstanding workforce with diverse 
strengths and experiences, and to 
maintain workplaces where everyone feels 
welcome, respected and safe. This is 
critical as we execute our value-creating 
strategies and strengthen our businesses, 
renew our portfolio and ensure sustainability 
through long-term management. 

An inclusive culture helps to ensure 
we attract diverse team members, 
which helps to ensure we have the 
best insight into the evolving needs 
and expectations of customers and 
stakeholders. For Wesfarmers, diversity 
extends to all people and perspectives. 
We promote gender balance across the 
Group, including in senior management. 
We also focus on the employment of 
Aboriginal and Torres Strait people, and 
this year we regained employment parity.

We are committed to providing 
opportunities for our almost 120,0001 
team members (as at 30 June 2022) 
to enhance their performance at work, 
and encourage a learning culture 
to help advance careers. 

Our Code of Conduct sets out our 
commitment to treating everyone with 
respect, valuing diversity and providing 
a safe work environment. 

Training and development 

Wesfarmers’ businesses have primary 
responsibility for training and developing 
their team members. This includes 
job-specific and career development 
training for full-time, part-time and 
casual team members. 

Training programs develop team 
members’ technical skills, product 
knowledge, and customer service, 
teamwork and leadership capabilities. 
Data and digital skills have been 
important in recent years as our 
businesses have evolved. Where 
possible, we have continued to invest in 
technology to support flexible working 
from home and remote training and 

Female representation  
across the Group

Total  
workforce

Wesfarmers  
non-executive  
directors

Wesfarmers  
Leadership Team1

Senior executive 
positions

All management 
and professional 
positions

2022

2021

57% 57%
44% 38%

50% 42%
35% 35%
39% 37%

1  Including the Health division.

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ADVANCING RECONCILIATION 

Wesfarmers is committed to increasing 
the number of Aboriginal and Torres Strait 
Islander people in our workforce and to 
supporting the careers of Aboriginal and 
Torres Strait Islander team members. 
Wesfarmers also supports partnerships 
with Aboriginal and Torres Strait Islander 
suppliers, including as they innovate and 
scale. Wesfarmers remains focused on 
developing the cultural competency 
of our businesses, to help ensure that 
Aboriginal and Torres Strait Islander 
people feel welcome in our businesses 
as team members, customers, suppliers 
and visitors.

This year we were pleased to launch our 
eighth Reconciliation Action Plan (RAP) 
and our first Elevate RAP – the highest 
RAP level. 

We were pleased to reach our goal of 
employment parity for Aboriginal and 
Torres Strait Islander people with at least 
three per cent of our Australian 
workforce identifying as Aboriginal or 
Torres Strait Islander team members, 
a year earlier than targeted.

We were proud to support 19 
Indigenous team members to enable 
them to participate in the inaugural 
Wesfarmers Indigenous Leadership 
Program. This ground-breaking program 
supports Aboriginal and Torres Strait 
Islander leaders across Wesfarmers, 
and is delivered in partnership with the 
Australian Indigenous Leadership 
Centre. All graduates receive a Certificate 
IV in Indigenous Leadership.

As Aboriginal and Torres Strait Islander 
businesses grow, their economic activity 
benefits local Aboriginal and Torres Strait 
Islander communities and the wider 
Australian economy. This year, we were 
pleased to increase our spend with 
certified Supply Nation Aboriginal and 
Torres Strait Islander businesses to 
$46.2 million, an increase of 25 per cent 
compared to last year. 

We were pleased to award grants under 
our Building Outstanding Aboriginal and 
Torres Strait Islander Business (BOAB) 
Fund. Through Bunnings, we provided 
funding and mentoring to the native title 
group, Circular Head Aboriginal 
Corporation, to develop a partnership 
and pilot with a supplier of seaweed 
liquid fertiliser. Through Bunnings, we 
also supported Wik Timber to explore 
certification of hardwood timber on 
native title land.

During the year, we continued to 
support the Clontarf Foundation, which 
we have done since 2001. We currently 
employ more than 375 Aboriginal and 
Torres Strait Islander men who are 
Clontarf alumni and students. 

Wesfarmers has supported Aboriginal 
and Torres Strait Islander arts and culture 
for more than four decades. This year, 
a highlight was the Australian premiere 
of West Australian Opera commission 
Koolbardi wer Wardong, Australia’s first 
Indigenous language opera, created 
as a Wesfarmers Arts Commission 
by celebrated Nyoongar musician and 
songwriter Gina Williams AM and 
Guy Ghouse.

HEALTH, SAFETY AND 
WELLBEING

The physical and psychological health, 
safety and wellbeing of our team 
members is a critical business issue.

For more than two years, we have 
committed to providing a COVID-safe 
environment for our team members and 
customers, putting in place strict protocols 
– in line with or exceeding government 
directives. Some of these protocols remain 
in place. We implemented COVID-19 
testing regimes and encouraged team 
member vaccination. Our businesses 
implemented strategies and workforce 
planning or rostering practices to minimise 
COVID-19 risks and the impact of 
COVID-related absences, helping 
to ensure continued operations.

In addition to existing mental health 
support initiatives, we partnered with 
Beyond Blue to implement a resilience 
and mental health coaching program 
called NewAccess across the Group. 

While we continue to build our safety 
maturity, we are encouraged by the 
improvement in safety performance 
and reduction in workplace injuries 
and incidents across the Group. 

This year our Group TRIFR was 9.2 
compared to 9.6 last year. On a like-for-
like basis, Wesfarmers had 1,436 workers’ 
compensation claims this year compared 
to 1,514 last year.

From May 2020, NSW workers’ 
compensation provisions require all team 
members who test positive for COVID-19 
to register a claim. Total claims, including 
COVID-related claims in NSW, were 8,654.

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Aboriginal and Torres Strait 
Islander team members1

3.3%

2022

3,601

2021

2020

2019

2018

2,994

1,858

1,6661

1,6472

1  Restated to account for casual team 

members who have worked in the last 
30 days (previously 90 days).

2  Excludes Coles.

Safety performance

TOTAL RECORDABLE INJURY 
FREQUENCY RATE (TRIFR)1

9.2

2022

2021

2020

2019

2018

9.2

9.6

10.4

13.5

24.12

1  TRIFR measures the number of lost time 
and medical treatment injuries per million 
hours worked.

2  Includes discontinued operations, 

including Coles.

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Operating and financial review | Sustainability

Engaging fairly with our suppliers and sourcing 
ethically and sustainably 

ETHICAL SOURCING AND 
HUMAN RIGHTS

For Wesfarmers, it is essential that we 
engage fairly with suppliers, source 
ethically and sustainably and respect and 
promote human rights. We are committed 
to ethical sourcing and have reported 
transparently on human rights for almost 
a decade. 

Our aim is to ensure that human rights are 
understood throughout our operations 
and supply chain, and that our team 
members and workers in our supply chain 
work in safe, fair workplaces, where their 
rights are respected.

We recognise that modern slavery is 
a complex problem, exacerbated by 
COVID-19, and best tackled through 
collaborative action by like-minded 
organisations. 

Our Approach to Human Rights details 
Wesfarmers most salient human rights 
issues. The Wesfarmers Ethical Sourcing 
and Modern Slavery Policy sets out 
minimum standards to ensure the Group 
sources products and services in 
accordance with legal obligations and 
community expectations, while working 
with suppliers to improve their social and 
environment practices. It seeks to prevent, 
mitigate and where appropriate, remedy 
instances of modern slavery in our 
operations and supply chains. 

Among other matters, our minimum 
standards prohibit forced and bonded 
labour, require adherence to laws 
governing working ages and hours, 
seek to ensure safe and healthy working 
conditions and transparent record 
keeping, and recognise the rights to 
freedom of association, collective 
bargaining and grievance mechanisms. 
The policy also details minimum 
standards for the management 
of modern slavery risks. 

Our reporting 

This year, we evolved our ethical 
sourcing reporting, to extend beyond 
absolute metrics and include additional 
context, showing relative performance of 
our ethical sourcing programs,  
year-on-year and within our broader 
supply chain. We also better identify the 
impact of our programs including where 
reportable breaches have been 
remediated. These changes reflect 
recommendations from a review 
conducted during the year by 
an independent global supply chain 
consulting firm.

Our supply chain 

Across the Group, we have relationships 
with nearly 26,000 suppliers. 

Our businesses directly source products 
for resale from about 12,000 third-party 
suppliers in more than 40 countries. Our 
major product sourcing locations include 
Australia, Bangladesh, China, Europe, 
India and Indonesia. 

Our supply chains are often complex with 
multiple tiers, sometimes across multiple 
countries, supplying diverse products to 
our divisions. We do not own the sites and 
factories where products are 
manufactured, but engage suppliers to 
manufacture own-brand goods for us and 
other suppliers. 

Across the Group, we also manage about 
14,000 service providers. These include 
suppliers of shipping and logistics, 
maintenance and repair, cleaning and 
waste removal, property and security, 
and training and consulting services. 

Our ethical sourcing programs

Our divisions take a risk-based approach 
to assess and mitigate human rights risks 
in their operations and supply chains, 
each implementing their own ethical 
sourcing programs, in line with leading 
international practice.

Across the Group, all suppliers complete 
mandatory pre-qualification and, 
depending on their assessed risk level, 
on-going monitoring, as detailed below. 

Our divisions also monitor emerging 
human rights issues and identify 
opportunities where we can influence 
the actions of our suppliers to mitigate 
risks, including through collaborations 
with other organisations.

Supply chain transparency 

Detailed supply chain mapping, including 
beyond direct or tier one suppliers, helps 
to mitigate ethical sourcing risks and 
leverages our scale and partnerships 
to deepen awareness and respect for 
human rights. 

Each division has mapped its tier one 
suppliers to determine which suppliers 
to include in the ethical sourcing program. 
This process includes consideration of 
information about the supplier, our spend 
with the supplier, the type of product being 
sourced (including assessed risks and 
whether it is ‘own-brand’) and country 
of origin. 

68

Wesfarmers 2022 Annual Report

To expand our level of transparency, some 
divisional ethical sourcing teams are 
investigating value chains to tier two and even 
tier three suppliers and, in some cases, 
progressing the public disclosure of tier two 
suppliers in our supply chain. 

Supplier due diligence and monitoring 

This year, our divisional ethical sourcing 
programs monitored 2,651 sites and 1,724 
suppliers (recognising that a supplier may 
source through many sites), from a total 4,355 
sites and 2,744 suppliers. Accordingly, around 
61 per cent of sites and 63 per cent of 
suppliers in the program were monitored in the 
2022 financial year. Monitoring seeks to 
ensure compliance with the Wesfarmers 
Ethical Sourcing and Modern Slavery Policy.

Monitoring activities include self-assessment 
questionnaires, supplier endorsement 
processes, supplier visits, independent and 
extensive third-party audits, and reports 
through grievance mechanisms. The 
frequency of monitoring varies from three to 
24 months, depending on prior audit findings 
and the level of assessed risk.

Where monitoring identifies instances 
of non-conformance with our standards, these 
are classified as minor, major or reportable 
breaches (with reportable breaches similar to 
critical breaches, previously reported). 

The reportable breach classification is based 
on the Wesfarmers Ethical Sourcing and 
Modern Slavery Policy and the Sedex 
Members Ethical Trade Audit (SMETA) 
methodology. It captures any imminent threat 
to a worker’s safety which presents a risk to 
life, evidence of fraud, coercion, deception  
or interference, or certain repeat findings 
which have not been addressed over time.

This year, the main reportable breaches were: 

 − Health, safety and hygiene violations  
(39 per cent of reportable breaches)

 − Excessive working hours (21 per cent  

of reportable breaches)

Ethical sourcing program

  4,355 sites in the ethical sourcing program 

  2,651 sites monitored this year (61%)1

  307 sites in the program had reportable 
breaches (7%)2

1  The frequency of monitoring varies from three to 

24 months, depending on prior audit findings and 
the level of assessed risk.

2  We work with our suppliers to remedy reportable 
breaches. In certain very rare circumstances, we 
may suspend or terminate our arrangements with 
that supplier.

 − Non-compliance with minimum wages  
(eight per cent of reportable breaches)

 − Inadequate management systems

 − Employment of children and young 

workers, and

 − Environmental violations.

Further details can be found in the 
Wesfarmers Modern Slavery Statement. 
The Wesfarmers 2022 Modern Slavery 
Statement will be released in late 2022.

Remediation 

Consistent with our policies, the UNGPs 
and International Labour Organisation 
(ILO) conventions, we aim to have 
effective grievance mechanisms available 
for workers in our supply chains, to 
confidentially raise concerns including 
business-related human rights risks. 

This year, Wesfarmers businesses 
supported grievance mechanisms 
covering approximately 750,000 
workers across 1,400 sites. 

When a non-conformance is identified, 
whether through monitoring or grievance 
mechanisms, our response depends on 
the severity of harm (or potential harm). 
It may include immediate rectification or 
making good any harm experienced by an 
individual, and work to prevent future harm. 

All sites with non-conformances, whether 
minor, major or reportable breaches, are 
subject to ongoing due diligence 
monitoring. The type of non-conformance 
also determines the follow-up. This year,  
42 per cent of reportable breaches 
have been remediated and 56 per cent 
are being remediated. This year, we exited 
seven factory sites (two per cent) where 
remediation of a reportable breach could 
not be achieved. 

It is very rare for divisions to exit a site or 
supplier for non-conformances including 
reportable breaches. Instead, we engage 
closely to support remediation, often in 
collaboration with other customers to the 
supplier through a corrective action plan. 

Training 

Training of our team members is a key 
strategy to increase alignment with our 
minimum standards and reduce the risk of 
non-conformances. This year, more than 
5,000 hours of training were delivered on 
human rights (as established by the 
Universal Declaration of Human Rights and 
other international instruments), ethical 
sourcing risks and mitigation strategies, 
and ethical buying practices. Training was 
also provided to selected supply chain 
partners throughout the year. 

Worker helpline provides additional grievance 
mechanism to hear directly from workers

In 2021, Bunnings, Blackwoods, Officeworks and Workwear Group launched the 
‘Your Voice, Worker Helpline’, to enable dialogue with workers and support the 
remediation of reported grievances. The helpline is designed to safeguard the 
rights and wellbeing of any person who raises a concern. 

The helpline complements the Group’s ethical sourcing programs as it assists 
with the validation of risk assessments and provides visibility of issues beyond the 
regular audit cadence. It also supports the provision of more immediate, specific 
remedies before issues escalate. 

The helpline has been implemented in more than 190 sites in China, Indonesia, 
Taiwan and Vietnam covering more than 43,000 workers in our supply chain. 
It aligns with the UNGPs Effectiveness Criteria for Operational Grievance 
Mechanisms: 

 − Independent management by a consultancy with dedicated in-country teams 
available 24 hours every day to confidentially respond to workers in their own 
language, via phone call, email or messaging services 

 − Implemented at sites using small group in-person training sessions or virtual 

webinars

 − Multilingual marketing materials including pictorial descriptions to ensure that 
the service is accessible to workers with low literacy or migrant workers 

 − Training and resources for suppliers and factory management teams to explain 

the service and detail the investigation process if a report is lodged 

All reports received are investigated and appropriate remediation is provided 
in the shortest possible timeframe. The investigation process keeps all parties 
informed of steps taken to address concerns.

Since December 2021, 12 workers have contacted the ‘Your Voice, Worker 
Helpline’. Of these, five confirmed grievances have been remediated, between 
the worker and the supplier. Seven general enquiries about worker rights were 
received, although these are not classified as grievances.

In addition, this year more than 5,600 factory workers from nine Bunnings 
manufacturing sites were trained in the grievance mechanism.

 Wesfarmers 2022 Annual Report

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Operating and financial review | Sustainability

Supporting the communities 
in which we operate

ECONOMIC AND COMMUNITY 
CONTRIBUTION

Wesfarmers has long supported the local 
communities where we operate, knowing 
this helps to support our success over 
the long term. 

With successful businesses, we have 
the opportunity to make substantial 
contributions to community organisations 
that enable a strong, cohesive and 
inclusive society. Our team members are 
central to our approach, and we work 
in partnership with organisations that 
deliver positive social outcomes in the 
areas where we live and operate. 

During the year, the Group employed 
almost 120,000 team members who 
received $5.6 billion in salaries, wages, 
and benefits. 

We continued to pay our full-time,  
part-time and many casual team 
members including when stores were 
closed and there was no meaningful 
work for them to do or when they were 
required to isolate. During the 2022 
financial year, we invested approximately 
$49 million in pandemic support, 
providing certainty to team members 
and their families. 

During the year, $37.2 billion in economic 
activity was generated through 
$23.4 billion paid to suppliers, $5.6 billion 
paid to our team members, $3.9 billion 
paid in rent, services, and external costs, 
and $1.3 billion paid in taxes and other 
government charges. 

The Group contributed $53.7 million 
to community organisations in Australia 
and New Zealand. That included almost 
$22.6 million in direct social investment, 
and $31.1 million in contributions from 
customers and team members, including 
approximately $18 million from 
community sausage sizzles at Bunnings 
stores. Often, these contributions 
support community recovery efforts 
following natural disasters.

Wesfarmers Corporate supports 
community organisations working 
in medical research and wellbeing, 
education and the arts. Across these 
three areas, we include support for 
organisations that are Indigenous-led, 
or that have significant Indigenous 
programs. During the year, Wesfarmers 
Corporate contributed more than 
$8.1 million to around 35 community 
partners.

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Wesfarmers 2022 Annual Report

Works of art from the collection of the National Gallery Australia and Wesfarmers Collection of Australian Art 
in the exhibition Ever Present: First Peoples Art of Australia on exhibition at National Gallery Singapore, 2022. 
Photo by: Joseph Nair, Memphis West Pictures. 

Wesfarmers Arts 

Wesfarmers has been a leading 
supporter of the arts sector for more 
than four decades. Our partnerships 
with diverse premier arts and cultural 
organisations in Western Australia and 
nationally reflect our belief in the vital 
contribution the arts make to vibrant 
communities in which creativity, social 
cohesion and innovation thrive. 

In 2022, we continued to support our 
arts partners as they were impacted by 
COVID-19, providing significant, targeted 
support to keep artists employed when 
performances were suspended and 
galleries were closed.

During the year, we presented the 
exhibition Ever Present: First Peoples Art 
of Australia at the Art Gallery of Western 
Australia (AGWA). This landmark 
exhibition charts the evolution of First 
Nations art in Australia, and draws from 
the National Gallery of Australia and The 
Wesfarmers Collection of Australian Art. 
Following its exhibition at AGWA, Ever 
Present is touring internationally. The 
exhibition is the largest exhibition of First 
Nations art ever to travel to Asia.

Additionally, we contributed Founding 
Partner support towards the inaugural 
Yajilarra (Let us Dream) Festival of 
Indigenous art and culture, held in  
July 2021 on Bunuba Country at  
Danggu Geikie Gorge, Fitzroy Crossing. 
Organised by the Bunuba Traditional 
Owners, this new festival celebrates 
Bunuba language and culture to engage 
young people with ancestral knowledge. 

Community contributions1

 DIRECT

 INDIRECT

$53.7m

2022

22.6

31.1

2021

2020

2019

20182

24.8

25.0

19.9

86.6

30.5

43.1

52.2

60.9

1  Direct community contributions include cash, 

in-kind and time contributions. Indirect community 
contributions include contributions from team 
members and customers enabled by our businesses.

2  Includes discontinued operations, including Coles.

Anticipating the needs of our customers and delivering 
competitive goods and services 

Expectations regarding the collection, 
use and protection of data continue 
to evolve at pace. We recognise the 
importance of retaining community 
confidence and strive to adhere to legal 
and regulatory standards. We listen 
carefully to community expectations 
regarding data from customers, team 
members and other stakeholders. 

During the year, Wesfarmers continued 
to grow and strengthen its data privacy 
and cyber security teams and 
capabilities, to protect data and mitigate 
the risk of data breaches including 
through cyber attacks. 

The Group also designed and prototyped 
an active defence concept to improve 
threat intelligence and response 
capabilities in each division. This year, 
the Group has observed a heightened 
and active cyber threat landscape 
globally. Wesfarmers’ dedicated defence 
team supported each division to 
proactively identify, prevent and respond 
to cyber threats and incidents, including 
globally significant cyber events. 

Across the Group, we have invested 
in and enhanced cyber security controls. 
Where customer cardholder data is 
managed or handled, the divisions 
continue to demonstrate Payment Card 
Industry Data Security Standard 
assurance.

In the coming year, Wesfarmers will 
continue to increase data, digital and 
cyber security capabilities and invest in 
talent, further maturing the Group in the 
areas of privacy, data ethics, data 
governance and cyber security. The 
Group will also continue to develop its 
cyber security and privacy information 
management systems as well as the 
Group’s data enablement, risk and 
governance frameworks.

PRODUCT QUALITY, SAFETY 
AND STANDARDS 

By ensuring that products are safe and 
reliable, and that they comply with all 
relevant standards before they are sold, 
we build trusting and lasting relationships 
with customers. 

To ensure these standards are met, 
we work closely with our suppliers, 
undertaking product testing, quality 
checks and compliance due diligence. 

Wesfarmers’ divisions collaborate to 
share best practice product quality and 
safety learnings through a quarterly 
Product Safety Forum. 

Wesfarmers also participates in the 
Australian Competition and Consumer 
Commission (ACCC) Product Safety 
Consultative Committee, to discuss 
and share product safety issues and 
challenges.

Compliance with Australian and New 
Zealand product safety consumer law is 
taken very seriously. For those products 
that we design and procure directly from 
suppliers under our own-brand, we 
ensure that: 

 − The products comply with product 

safety standards, mandatory 
standards and relevant Australian 
and New Zealand consumer law 
requirements 

 − We comply with policies which 

describe when and how we recall 
goods, and compensate customers 
for loss caused by goods if they have 
a safety defect 

 − We promptly withdraw and recall 
products that may have a safety 
defect 

 − We report product safety incidents 

in compliance with law, and 

 − We proactively manage any potential 

product safety issues. 

Where a product is found to be faulty 
and there is a risk it may cause injury, 
our divisions conduct recalls in line with 
ACCC guidance.

DATA AND CYBER SECURITY 

With the establishment of Wesfarmers 
OneDigital, our businesses are 
continuing to accelerate their investment 
in data and digital capabilities. In this 
context, we are committed to being a 
trusted and responsible custodian of the 
data we hold on behalf of customers. 

Our data, digital and cyber strategies 
are underpinned by Wesfarmers’ core 
values of integrity, accountability and 
openness which support our culture 
of doing what is right and our 
transparent approach.

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Operating and financial review | Sustainability

Taking care of the environment

landfill and recovered, including for 
recycling, totalled approximately 
124.3 kilotonnes, an increase of  
7.0 per cent. 

Bunnings diverted nearly 55 per cent 
of its operational waste from landfill, 
Kmart Group diverted over 80 per cent, 
and Officeworks diverted 88 per cent. 
Improved waste diversion was achieved 
by increasing reusable packaging, 
reducing the use of non-recyclable 
materials, reviewing the terms of waste 
and recycling contracts and better 
using data to develop new initiatives. 

Bunnings, Kmart Group and Officeworks 
worked with social enterprises, 
businesses and community and 
not-for-profit organisations to provide 
recycling programs for products including 
batteries, paint and electrical items such 
as power tools and e-waste.

Packaging and plastic

In 2018, Australian federal and state 
governments set packaging and plastic 
targets applicable to all packaging made, 
used and sold in Australia. The targets 
include 100 per cent reusable, recyclable 
or compostable packaging, 50 per cent 
average recycled content, and phasing 
out single-use plastics by 2025. 

These targets apply to Bunnings,  
Kmart Group, Officeworks, Blackwoods 
and Workwear Group, as they are APCO 
signatories.  

Bunnings, Kmart Group, Officeworks, 
Blackwoods and Workwear Group have 
plans in place to meet the 2025 packaging 
targets. We continue to report progress 
annually. While good progress has been 
made replacing plastic packaging of our 
products, significant focus is required 
to meet these 2025 targets. 

Operational waste

 RECOVERED

 DISPOSED

178.5kt

2022 124.3 

 54.2 

2021

2020

2019

116.2

120.5

107.4

54.5

55.5

58.2

20181

351.3 153.6

1  Includes discontinued operations, 

including Coles.

CIRCULAR ECONOMY

At Wesfarmers, we are working hard 
to reduce our environmental impact. 
We recognise the world has limited 
natural resources and we can reduce 
our impact and drive long-term value 
by becoming a more circular business. 

Increasingly, our businesses are focusing 
on maximising the long-term value of the 
products we sell and resources we use, 
by keeping our assets, products, product 
components and materials, at their 
highest value for as long as possible, 
through better design. As well as 
safeguarding future access to these 
resources, these strategies support 
efforts to reduce waste, pollution, and our 
climate impact. Importantly, they also 
align with emerging customer 
expectations and support the resilience 
of our businesses. 

Over the past two years, our businesses 
have developed and introduced more 
circular strategies. Where possible, we are 
increasingly designing products made 
from recycled and sustainably sourced 
materials and products that last, can be 
reused and where embedded resources 
can be recycled at end of life. We are 
making it clearer to our customers where 
products are designed to incorporate 
circular principles. 

Further progressing the circular economy 
requires collaboration across supply 
chains and between government and 
industry to achieve systematic change. 
To support this change, the Group is 
engaged in numerous industry groups 
including the Australian Packaging 
Covenant Organisation (APCO). 

During the year, Wesfarmers developed 
a framework of circular economy metrics, 
to better measure and manage circular 
performance and to influence circular 
strategy. In the coming year, we will use 
this framework to track and report 
additional circular indicators, and to 
encourage collaboration across divisions 
and functions to identify opportunities to 
further embed circularity in our businesses. 

Waste 

Reducing operational waste continues 
to be a major focus. Product and 
packaging waste is reduced through 
circular strategies. Our divisions are 
diverting waste from landfill, recognising 
this delivers environmental and financial 
benefits, while also meeting growing 
expectations among our customers. 

This year, Group operational waste 
disposed to landfill totalled approximately 
54.2 kilotonnes, a reduction of 0.5 per 
cent from last year. Waste diverted from 

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Climate disclosures

2022 HIGHLIGHTS  

7.4 per cent reduction in  
Scope 1 and 2 market-based 
emissions, excluding the  
Health division

New WesCEF targets to reduce 
emissions by 30 per cent by  
2030 relative to 2020 and  
net zero by 2050

Bunnings, Kmart Group and 
Officeworks agree to procure  
100 per cent renewable electricity 
for almost 150 sites in Queensland

Divisions report full Scope 3 
balances, for the first time

Construction underway at the 
Mt Holland lithium project, with 
minimisation of climate and 
environmental impacts

We believe that business has an 
important role to play, to support the 
transition of global economies to net zero 
by 2050, consistent with the Paris 
Agreement. We recognise the inter-
connected and inter-dependent nature 
of many global systems, and that climate 
change has many, varied impacts on 
businesses including our supply chains, 
operations, teams, customers, 
communities and environment. We know 
that further action is needed to accelerate 
progress and prevent the worst impacts 
of physical climate change.

At Wesfarmers, we are committed to 
taking action and our businesses have 
long been managed with a carbon 
awareness. During the year, we 
conducted detailed risk and opportunity 
assessments for various climate 
scenarios, to accelerate our progress and 
further integrate climate into our annual 
corporate and strategic planning 
framework. We measure and closely 
monitor energy use and emissions, and 
adopt targets which are supported by 
detailed roadmaps. These actions are 
helping to make Wesfarmers more  
climate resilient.

Our approach is aligned with Wesfarmers’ 
purpose, supporting long-term returns to 
shareholders, including through better 
management of climate and energy-
related risks. Our disciplined focus on 
emissions efficiency continues to support 
growth in our business without 
necessitating an increase or proportionate 
increase in emissions.

Since 2018, we have reported 
transparently using the Taskforce on 
Climate-related Financial Disclosures 
(TCFD) framework, knowing that our 
disclosures interest many stakeholders 
and that transparency supports broader 
decarbonisation ambitions. Our climate-
related disclosures continue to evolve with 
TCFD an effective tool to assess and 
report on climate governance, strategy, 
metrics and targets and risks and 
opportunities. We see value in extending 
this framework to broader nature 
considerations, consistent with recent 
proposals by the Taskforce on Nature-
related Financial Disclosures (TNFD). 
Further information on Wesfarmers 
approach to climate is available at www.
wesfarmers.com.au/sustainability

Greenhouse gas emissions
including the Health division

SCOPE 1 & 2

 MARKET-BASED1

 LOCATION-BASED2

1,225.7ktCO2e

2022 1,225.7 1,385.1

2021

1,308.9 1,475.6

20203

2019

2018

n.a. 1,620.5

n.a. 1,557.7

n.a. 1,435.9

1  Emissions based on GHG Protocol Scope 2 

market-based reporting standard. In FY22 this 
includes 0.5 ktCO2e from the corporate office and 
13.9 ktCO2e from the Health division.

2  Scope 1 and 2 data includes emissions for 

businesses where we have operational control 
under the NGER Act and emissions in international 
operations. In FY22 this includes 0.6 ktCO2e from 
the corporate office, and 15.0 ktCO2e from the 
Health division.

3  Data restated after NGER submission correction.

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Operating and financial review | Climate disclosures

Strategy

Across the Group, Wesfarmers is continuing to work in a disciplined way to further embed 
consideration of climate into our strategies and culture. Given our diverse portfolio of businesses, 
each division develops its own climate strategy, tailored to its operations and material issues. 

Our teams work in a connected, coordinated way, sharing learnings to accelerate action and impact. As a result, where relevant, 
our divisional strategies are often connected and aligned. Our approach also supports the identification of opportunities to collaborate 
across the Group, to drive impact. We are also receptive to opportunities to demonstrate leadership at business and Group levels.

Embed climate  
resilience

Continue to further embed 
consideration of climate into 
strategy and culture

Focus on supply chains

Build strength in supply 
chains through collaboration 
and by adapting as the 
environment changes

Leverage data  
and digital

Implement systems 
to support use of data 
and digital strategies

Combat physical impacts 

Continue to reduce emissions 
and mitigate and adapt to 
physical risks

Invest for the future

Identify and pursue 
opportunities including 
circular and new business 
models

L E A D E R S HIP

O R P O R A T E

C

DIVISIO N S

LEAD

DELIVER

SUPPORT

Set the vision

Support a culture 
of climate resilience

Monitor progress

Reward performance

Advocate for climate 
resilience

Integrate climate into 
strategy and operations

Oversee key policies  
to enable action

Track and leverage 
insights from data

Invest in climate 
capability

Build capability in our 
teams

Support collaboration 
and information sharing

Advocate among 
suppliers

Provide feedback 
on strategy

Enable and influence 
customers

Oversee climate 
governance and risk 
management

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Wesfarmers 2022 Annual Report

ACTIONS TO BUILD CLIMATE RESILIENCE  
AND CREATE LONG-TERM VALUE

TIMEFRAME

2022

2030

Set non-financial climate targets and monitor progress against targets. 

Facilitate cross-divisional collaborations to align on renewable energy options, supplier 
partnerships, and evolving consumer needs and risks, supported by regular climate and 
sustainability education.

Develop a recruitment strategy to attract team members who will help mitigate and 
realise climate opportunities across the Group.

Educate stakeholders on climate change, and build stronger partnerships with suppliers, 
customers and other partners to support their transition to net zero.

Increase visibility of transition risk exposure within the supply chain, and partner  
for collaborative decarbonisation.

Understand supply chain vulnerability and develop plans to address likely disruptions. 
Consider factors including acute and chronic risks. Evaluate the exposure of key raw 
materials to physical hazards.

Develop partnerships with key suppliers and service providers (like freight and delivery 
suppliers, port operators and other stakeholders of shared infrastructure).

Explore options for local manufacturing. These options could extend to chemicals,  
green ammonia (and hydrogen) and other low-carbon products.

Implement a framework and systems to collect and analyse climate-related data  
and other ESG data (such as water, waste, sourcing, safety, people, community and nature) 
and leverage this data for better decision-making.

Use scenario analysis to evaluate and respond to physical impact risks in our supply chain 
and operations, and to better incorporate these into strategy and capital processes.

Incorporate energy efficiency and climate resilient design to combat current and 
future physical risks to team members, customers, inventory, assets and businesses.

Invest in climate-resilient businesses, products and services to support and 
complement current offering. Strategically invest in new industries and sectors.

Examine circular economy business models including opportunities for product reuse, 
more recyclable and recycled inputs and emerging products as a service.

Review capital allocation processes to support climate-related initiatives including  
by considering value lost through inaction and potential impact on returns.

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Operating and financial review | Climate disclosures

Chemicals, Energy and Fertilisers climate strategy

2020

40%
Reduction 
relative to unabated
2020 emissions 
levels

2030

30%
Reduction 
relative to 
2020 baseline 

90%

2050

of emissions 
have abatement 
potential 

S
N
O

I

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S

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2

D
N
A

1

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5.5mt cumulative 
abatement 

(FY2012 - FY2020)

Renewable 
elec
electricity 

Upgrade abatement
gUpg
htech
technologies 

Pilot green 
hydrogen  

Evaluate emerging 
decarbonisation 
solutions 

Offset 
residual
emissions

Large-scale 
green hydrogen 

Large-scale 
CCUS

P H A S E   O N E

P H A S E T W O  O P T I O NS

P H A S E T H R E E  O P T I O N S

Through its portfolio of businesses, WesCEF supports 
agricultural, resources and household customers and 
communities to achieve a sustainable, healthy and safe future.

During the year, WesCEF released its three-phase 
decarbonisation journey which includes its 2050 net 
zero roadmap. This roadmap renewed WesCEF’s existing, 
longstanding focus on climate.

The first phase of WesCEF’s decarbonisation journey 
commenced in FY2012 with the installation of abatement 
catalysts in several manufacturing plants. This investment 
has delivered a 40 per cent reduction in emissions intensity 
and a cumulative absolute reduction in CO2e emissions 
of 5.5 million tonnes by the end of FY2020. These outcomes 
have been achieved while WesCEF also grew its business 
and operating profit.

The second phase of WesCEF’s decarbonisation journey 
includes a 30 per cent emissions reduction target by 2030 
relative to its FY2020 baseline, and the third phase will see 
WesCEF target net zero Scope 1 and 2 emissions by 2050.

Through the second and third phases, WesCEF intends 
to invest to support the net zero roadmap which focuses 
on the decarbonisation of existing ‘hard to abate’ operations, 
incorporating new technologies like carbon capture utilisation 

76

Wesfarmers 2022 Annual Report

and storage (CCUS) and green ammonia and hydrogen, 
including by partnering with other organisations and engaging 
with policy makers. Over the period to 2050, WesCEF assumes 
that these technologies continue to advance and that they 
become commercially viable and capable of operating at scale 
well before 2050 and that Government policy is supportive of 
climate action. The roadmap also recognises the importance 
of emissions reductions across WesCEF’s supplier and 
customer value chains and includes plans to develop a Scope 3 
reduction pathway. Quality offsets may be used to offset any 
residual emissions in 2050.

WesCEF is also pursuing broader opportunities presented 
by decarbonisation which leverage WesCEF’s capabilities and 
deliver long-term sustainable benefits to our team, customers, 
suppliers, communities and the environment. During the year, 
WesCEF partnered with Mitsui & Co, CSIRO and Jupiter Ionics 
to explore opportunities in ammonia and hydrogen technologies.

For more please see https://wescef.com.au/ 
wescefs-roadmap-to-net-zero/

Embed climate 
resilience

Combat physical 
impacts 

Invest for the 
future

 
  
Governance

EMISSIONS AND ENERGY USE

This year, Wesfarmers location-based 
Scope 1 and 2 emissions totalled  
1,370 thousand tonnes of carbon dioxide 
equivalent (ktCO2e) excluding the Health 
division. This represents a seven per cent 
reduction relative to FY2021. The 
acquisition of the API business during the 
year added an additional 15 ktCO2e and 
including API, Wesfarmers achieved a six 
per cent reduction in emissions relative to 
FY2021.
Bunnings, Officeworks and Kmart Group 
reduced their emissions through energy 
efficiency projects (such as LED lighting), 
behind-the-meter solar generation and by 
procuring renewable electricity.
WesCEF reduced its emissions through 
frequent catalyst replacement and with 
efficiency projects. WIS reduced its 
emissions through energy efficiency, 
renewable energy generation and fuel 
switching projects.
This year, total energy use across the 
Group was stable with no change 
compared to the prior corresponding 
period and 20 petajoules of energy 
consumed.

MARKET-BASED REPORTING 

Wesfarmers continues to dual-report 
under the global Greenhouse Gas 
Protocol Scope 2 Market-Based 
Emissions Standard (market-based 
reporting). 

This standard allows Wesfarmers 
to accurately capture and disclose 
increased use of renewable power which 
is a key strategy to support the Group’s 
decarbonisation goals. It captures 
increased behind-the-meter solar PV 

GROUP
 − Group Climate Policy sets minimum 
standards expected of our divisions 
 − Quarterly Carbon and Energy Forums 

are held to share best practice 
 − A shadow carbon price is built into 

Wesfarmers’ Project Expenditure and 
Disposals Policy 

generation and voluntary renewable 
energy purchases through various 
contractual arrangements.

GOVERNANCE FRAMEWORK

The Wesfarmers Board has responsibility 
for managing the Group’s response to 
climate change. Climate change risk 
management is a permanent item on the 
divisional reporting framework and is 
discussed by the Wesfarmers Board and 
its Audit and Risk Committee. The Board 
approves the Group’s climate change 
strategy including the Group Climate 
Policy, targets, strategic climate-related 
decisions and disclosures. The Board and 
Audit and Risk Committee receive regular 
reporting and oversee climate risk 
management.

A consolidated Group risk report is 
provided to the Wesfarmers Board and 
Audit and Risk Committee for review and 
approval, and climate change was 
identified as a high risk in the FY2022 
Group Risk Profile. The Corporate Plan is 
approved by the Wesfarmers Board and 
includes emissions forecasts and 
decarbonisation plans. The Remuneration 
Committee makes recommendations to 
the Board regarding executive 
performance goals linked to performance 
against the Climate Policy and 
achievement of divisional emissions 
reduction targets.

LEADERSHIP FRAMEWORK

The Wesfarmers Leadership Team reviews 
emerging risks and opportunities, leads 
stakeholder engagement and facilitates 
the sharing of best practice. Each 
divisional board and management team is 
responsible for identifying and managing 

DIVISIONS

material risks and opportunities and 
business performance, including against 
the climate strategy, in accordance with 
the Group’s Risk Management 
Framework. Divisional audit and risk and 
compliance committees also oversee 
climate-related risks relevant to the 
division.
Since 2014, Wesfarmers has incorporated 
an internal shadow carbon price as part of 
capital allocation decisions for projects 
likely to result in direct carbon emissions. 
This carbon price is described on our 
sustainability website at www.
wesfarmers.com.au/sustainability
During the year, Wesfarmers undertook 
a detailed climate resilience project to 
assess climate-related physical and 
transition risks and their relationship to 
other environmental and business risks. 
Updated climate scenarios, based on the 
latest Intergovernmental Panel on Climate 
Change guidance, were used to test the 
Group’s climate strategies and identify new 
or additional strategies to drive climate 
resilience, along with opportunities for 
sustainable value creation and risks to 
existing businesses, as summarised on 
pages 82 and 83 of this annual report. 
Climate resilience workshops were 
convened involving 160 team members 
from all divisions and diverse functions, 
including all of the Wesfarmers Leadership 
Team. These workshops identified risks at 
Group and divisional levels, and potential 
strategies and solutions to address them, 
along with hundreds of opportunities, 
acknowledging that climate resilience 
improves business resilience. The 
workshops support a culture where further 
decarbonisation is ‘everyone’s business’. 
Opportunities are summarised into five key 
levers, set out on pages 74 and 75 of this 
annual report.

Divisional boards and audit, risk and compliance committees

 − Provide governance over climate change risks and support the prioritisation 

of opportunities

 − Receive regular reporting of emissions and energy use to better understand trends 

in performance

 − Risk tools are used to undertake 

Senior management and the corporate office

scenario analysis

Wesfarmers Board, Audit and  
Risk Committee and Remuneration 
Committee

 − Approve the Climate Policy
 − Provide governance over climate 
change risks and set risk appetite

 − Set performance goals and 

remuneration

 − Receive regular reporting 

 − Manage carbon and energy teams 
 − Set the strategies for the year ahead 
 − Facilitate training and recruitment of climate-related capabilities
 − Report to their divisional boards, the Wesfarmers Board and Audit and Risk Committee

Carbon and energy teams

 − Implement the Climate Policy 
 − Maintain systems and processes for recording emissions data 
 − Implement emissions reduction projects 
 − Meet regularly to share best practice through Wesfarmers’ Carbon and Energy Forum

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Operating and financial review | Climate disclosures

Metrics and targets

With the different emissions profiles of our diverse businesses, appropriate and ambitious targets have been set for each division 
or business. These targets are consistent with our desire to support the transition of global economies to net zero by 2050. 

Each year, Wesfarmers reports transparently on emissions and progress made towards our targets. In FY2022, all divisions made 
good progress towards their targets through diverse strategies that included energy efficiency projects, behind-the-meter solar PV 
generation, renewable energy procurement, operational improvements and investments in abatement technology. In 2021, Bunnings, 
Kmart Group and Officeworks made significant commitments to achieving their targets for net zero Scope 1 and 2 emissions by 
2030 and to source 100 per cent of their electricity needs from renewable sources by 2025. 

During the year, WesCEF updated its ambition, committing to a 30 per cent reduction in Scope 1 and 2 emissions by 2030 relative 
to a 2020 baseline and net zero Scope 1 and 2 by 2050. WIS ex-Coregas committed to a 45 per cent reduction in Scope 1 and 2 
emissions by 2025 relative to a 2018 baseline and net zero Scope 1 and 2 by 2035. Coregas committed to a 30 per cent reduction 
in Scope 1 and 2 emissions by 2035 relative to a 2022 baseline and net zero Scope 1 and 2 by 2050. WesCEF and WIS Scope 1 
and 2 net zero targets assume key emissions reduction technologies continue to advance and become commercially viable and 
operate at scale well before 2050, and that government policy remains supportive of climate action.

Pursuant to our Climate Policy, baselines and emissions reduction targets for Scope 1 and 2 may be adjusted including for material 
changes to our divisions or changes to greenhouse gas reporting protocols and factors. During the year, the WesCEF baseline was 
adjusted to reflect the current global warming potential of relevant greenhouse gases, and the WIS baseline was adjusted to reflect 
market-based reporting. 

Scope 1, 2 and 3 emissions are reported by division, with more detail on our website at www.wesfarmers.com.au/sustainability. 
Emissions reporting for the new Health and OneDigital divisions will be included from FY2023.

Our journey so far

Our journey from here

 − Developed and adopted a Group Climate Policy
 − Adopted divisional emissions targets
 − Modified performance goals and remuneration for senior 

executives to include an assessment of their performance 
against the Climate Policy and divisional emissions and 
renewable electricity targets

 − Strategies developed to deliver business growth without 

an increase or proportionate increase in emissions

 − Achieve divisional short-term emissions targets and  

long-term net zero targets 

 − Investigate technologies and opportunities to accelerate 

progress against targets 

 − Further develop our Scope 3 strategic response
 − Further develop approach regarding our use of offsets 
including permitted offsets and when they may be used
 − Support the new Health and OneDigital divisions to align 

with the Group Climate Policy and strategy

2022 
Scope 1 and 2 
location-based 
emissions1

Change to 
prior year

2022 
Scope 1 and 2 
market-based 
emissions1

Scope 1 and 2 
emissions  
reduction target 
(baseline)

Scope 1 and 2 
emissions  
reduction relative  
to target

Net zero  
Scope 1 and 2 
target

Renewable 
electricity used 
(where target 
exists)

Bunnings

220 ktCO2e

–6%

105 ktCO2e

10% by 2025 
(2018)

15%  
Target achieved

2030

50%

Kmart Group

281 ktCO2e

–4%

254 ktCO2e

Officeworks

37 ktCO2e

–7%

31 ktCO2e

WesCEF

804 ktCO2e

–9%

795 ktCO2e

WIS 
(ex-Coregas)

10 ktCO2e

–11%

10 ktCO2e

Coregas

17 ktCO2e

1%

16 ktCO2e

20% by 2025 
(2018)

25% by 2025 
(2018)

30% by 2030 
(2020)

45% by 2025 
(2018) 

30% by 2035 
(2022)

15%

2030

18%

24%

2030

22%

18%

2050

n/a

35%

2035

n/a

n/a

2050

n/a

1  Data has been rounded to the nearest 1 ktCO2e. In some instances, the sum total for emissions may differ due to this rounding.

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SCOPE 1 AND 2 EMISSIONS 

Our Scope 1 emissions predominantly come from the manufacture of ammonia, ammonium nitrate, sodium cyanide, LNG and 
LPG at WesCEF; the manufacture and transport of industrial and medical gases by Coregas, as well as the use of natural gas 
and transportation fuels, such as diesel and petrol, in our retail businesses.

Our Scope 2 emissions come from electricity use, predominantly in our retail businesses.

SCOPE 1

Commercial & 
urban heating & 
cooling network

Refrigerant 
usage 

Chemical 
production 
& industrial 
processes

Controlled
professional
transport

SCOPE 2

Electricity 
network

 SCOPE 1

 SCOPE 2 (LOCATION-BASED)

SCOPE 2 (MARKET-BASED)

Scope 1 and 2 emissions1,2

ktCO2e

293
15

278

263
15

248

281
13

268

254
13

241

235

13

222

220
12

208

110
13

97

104
12

92

300

200

100

0

40
0
40

34
0
34

37
0
37

31
0
31

FY21

FY22

FY21

FY22

FY21

FY22

Bunnings

Kmart Group

Officeworks

881

829

874

829

804

757

795

757

27
12

15

27
12

15

27
12

15

26
11

15

FY21
FY22
Industrial & Safety3

52

45

47

38

FY21

FY22

WesCEF

900

800

700

600

500

400

300

200

100

0

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1  Scope 1 and 2 data includes emissions for businesses where we have operational control under the NGER Act, and emissions in New Zealand.
2  Data has been rounded to the nearest 1 ktCO2e. In some instances, the sum total for emissions may differ due to this rounding.
3  Includes Coregas.

SCOPE 3 EMISSIONS

Our Scope 3 emissions relate largely 
to the production, transport, use and 
disposal of our products and the waste 
generated across our operations.

This year, all of our businesses have 
completed their Scope 3 balance 
calculation. These are shown on pages 
79 and 80 of this annual report by 
division and Scope 3 emission category. 

Recognising that Scope 3 calculations 
are complex, in the coming year, we will 
continue to deepen our understanding 
of our Scope 3 emissions profile including 
by increasing the transparency and 
accuracy of assumptions used in Scope 3 
balance calculations.

With increased visibility to our Scope 3 
emissions, we are prioritising 
opportunities and partnerships to reduce 
these emissions. These opportunities and 
partnerships are expected to include 
suppliers and customers.

Scope 3 emissions by division

36 
MtCO2e

Bunnings

Kmart Group

Officeworks

WesCEF

Industrial and Safety1

Corporate

1  Includes Coregas.

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Operating and financial review | Climate disclosures

Metrics and targets (cont’d)

Scope 3 emissions by category

Over 50% 
of Scope 3 
emissions are 
category 1

Our largest Scope 3 category 
is Category 1, the purchased goods, 
services and consumables of our 
businesses. To address this category, 
our retail divisions are progressing 
opportunities including through improved 
design and by specifying lower emissions 
(including recyclable and recycled) materials 
and packaging, in collaboration with 
suppliers for branded product lines. 

Our second largest Scope 3 category 
is Category 11, use of sold products. 
To address this category, our retail divisions 
are pursuing opportunities to sell more 
emissions- and energy-efficient products 
and to support customers to use products 
efficiently. Our retail divisions are also 
supporting customers to recycle products 
at end-of-life, enabling a more circular 
business. Our Kleenheat business is 
offering carbon neutral product options 
to meet customer demand.

1

Purchased goods, services 
and consumables

2 Capital goods

3 Fuel and energy-related activities

4 Upstream transportation and distribution

5 Waste

6 Air travel

7 Commuting employees and customers

8 Leased assets

9

Downstream transportation and 
distribution

10 Processing of sold products

11 Use of sold products

12 End-of-life treatment of sold products

13 Franchises

14 Investments and joint ventures

Risks and opportunities

During the year, we undertook a detailed assessment of climate risks 
and opportunities for our businesses, using three different climate scenarios. 
The three scenarios reflect the limiting of global average temperature increases 
above pre-industrial levels by 1.5ºC, 2ºC and 4ºC by 2100. In the coming year, 
a similar assessment will be conducted with the new Health division. 

The analysis identified various physical risks in Australia, New Zealand and our 
other major sourcing countries, including for our team members, customers, 
suppliers and communities, for assets and critical infrastructure (like ports and 
domestic freight systems) and for certain raw materials and products. 

An increased frequency of extreme weather events, particularly heat, drought, 
flood, bushfire, storm surges and cyclones, may impact the availability and price 
of raw materials and the markets where we source products. Extreme weather 
may impact international and domestic freight and logistics systems causing 
delays, adding costs and impacting availability. 

We also assessed extreme weather event risk across our Australian and 
New Zealand assets and operations. Extreme weather events may affect our 
stores, causing physical damage, loss of stock and our operations by impacting 
our team members and local communities. Extreme weather events may also 
impact our internal decisions including location of key assets.

1  IPCC AR6, World Climate Research Programme Coupled Model Intercomparison Project (Phase 6), 
Vousdoukas et al (2018), NASA Earth Data Knutson et al. (2020) and Copernicus Fire Weather Index 
Abatzoglou et al. 2019.

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Key risks under 40C climate 
scenario1

Extreme heat (by 2030)
At least 7 additional hot days over  
35ºC across northern Australia.

Droughts and long-term  
rainfall deficits (by 2030)
At least 4% longer dry spells across 
Victoria and New South Wales and  
2% longer dry spells across the North 
Island of New Zealand.

Floods (by 2030)
At least 10% increase in extreme rain 
days and at least 5% increase in extreme 
rain intensity across southern Australia 
and New Zealand.

Bushfires (by 2030)
Approximately 7 additional severe fire 
weather days in Queensland, New South 
Wales and Victoria.

Storm surge (by 2050)
1-in-100-year present day storm surge 
event (2 to 5 metres in height) occurring 
every year in Kwinana (Western 
Australia), Rockhampton and Yeppoon 
(Queensland).

Cyclones (by 2050)
More intense category 5 cyclones for 
the North Atlantic (+11.3%), North East 
Pacific (+22.6 per cent) and North and 
South Indian Ocean (+4.5 to +5.3%).

FINANCIAL RISKS OF CLIMATE CHANGE

Caloundra

North Lakes

Gatton

Brisbane

Sandgate

Chermside
Ashgrove

Brisbane

Indooroopilly

Cleveland

Springwood

Willowbank

Beenleigh

Jimboomba

Gold Coast

Burleigh Heads

Byron Bay

Casino

Lismore

Lennox Head

Ballina

In this region, Wesfarmers’ businesses 
operate across many sites which were 
impacted by the flooding. These impacts 
include forced closure for several days, 
property damage, stock damage and 
reduced customer traffic. In Lismore, 
several sites were inundated with very 
significant damage to property and stock. 
In these circumstances, sites can take 
months to reopen. 

For Wesfarmers, many of these losses 
and impacts are insured. If the frequency 
and intensity of extreme weather events 
increases, we expect the cost (and 
availability) of insurance to be impacted.

In addition to the impact on Wesfarmers 
businesses, more than 300 team 
members in the region saw their homes 
and belongings damaged, as did many 
retail and business customers. Where 
possible, our businesses supported 
the local community and community 
organisations with the flood response 
and recovery.

The physical impact of climate change 
can have negative and positive impacts 
on our financial performance.

We minimise negative impacts through 
active risk management, implementation 
of mitigation strategies and by building 
climate resilience into our businesses. 
We plan for various possible climate 
scenarios as part of our annual corporate 
and strategic planning framework. As a 
result, we are adapting our approach to 
network expansion and store fit-outs, 
to mitigate the impact of future events. 

In the medium-to-long term, the extent 
of any negative or positive financial 
impact will depend on how well we 
respond to the various risks and the 
effectiveness of strategies to capitalise 
on opportunities.

During the year, our businesses, 
communities and team members 
experienced the physical impact of climate 
change, which may have exacerbated the 
catastrophic flooding events in northern 
New South Wales and southern 
Queensland in late February 2022. The 
Insurance Council of Australia assessed 
the losses across the region as a result of 
these floods at approximately $4.8 billion.

Scale of financial impact on 
Wesfarmers sites of FY2022 
flooding

Nominal impact

Significant impact

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Operating and financial review | Climate disclosures

Risks and opportunities (cont’d)

Consistent with our value-creating strategies, the Group will continue to consider opportunities to invest in existing businesses and 
take advantage of the flexibility of the Wesfarmers conglomerate model to renew the portfolio through opportunistic and value-accretive 
acquisitions or divestments. In assessing these opportunities, climate-related issues are included in the evaluation of investment 
decisions. Across the Group, climate-related opportunities include improved resource efficiency and cost savings, increased use 
of renewable energy, the introduction of new products, services and markets and improved resilience in our supply chain.

The following table summarises key physical and transition risks, and their potential impact on Wesfarmers, and selected material 
opportunities for Wesfarmers. 

Physical risks are driven by extreme weather and long-term shifts in climate patterns.

Risk description

Acute physical impacts

Potential impact on and opportunity for Wesfarmers

 − Heavy rainfall events are typically caused by weather systems 
such as thunderstorms, cyclones, low pressure troughs and 
east coast lows that can increase the risk of flooding. These 
are often compounded by storm surge events contributing to 
coastal inundation. 

 − There may be disruption to supply chain and transport logistics 

from extreme wet conditions including flooding, coastal inundation 
from storm surge events and tropical cyclones affecting port, road 
and rail operations, leading to transport delays and disrupting 
transport routes.

 − Wesfarmers is exposed to the risk of increased extreme 

 − There may be damage to assets and infrastructure associated with 

wet conditions including more frequent and intense flooding 
events, storm surge events and more intense tropical 
cyclones. The regions with the most frequent and intense 
extreme rain are across northern and eastern Australia, New 
Zealand, and Southeast Asia in Wesfarmers’ supply chain.
 − Extreme wet conditions can impact critical infrastructure (like 

road, railways and dams).

Chronic physical impacts

 − Rising temperatures are associated with an increase in the 

frequency of very hot days which can result in the temporary 
closure of facilities for various reasons including power failures. 

 − Temperature rise is often associated with increases in the 

duration of dry spells which can affect water supplies for use in 
the manufacture of apparel and general merchandise and other 
water-intensive manufacturing processes.

 − Wesfarmers is exposed to hot days (over 35ºC) across most 
of Australia. The regions that are most exposed to severe 
dry spells (approximately 100 days) and currently experience 
frequent hot days are Western Australia domestically, and India,  
the Middle East, the Mediterranean and Pakistan.

 − Wesfarmers is exposed to the risk of more hot days, longer 
droughts, and conditions linked to the risk of bushfires.

more frequent and intense extreme weather.

 − There may be sourcing issues, particularly where sourcing is 

concentrated in certain markets. This may have implications for 
inventory held.

 − When extreme weather events occur, temporary store closures 

may impact product availability and revenue, leading to reputational 
impacts and changes in consumer behaviour. There may be 
demand spikes in certain categories and at certain times.

 − We may need to redesign or retrofit stores and warehouses to better 

withstand more frequent and intense extreme weather.

 − Flooding may lead to production line disruptions, leading to delays in 

manufacturing, temporary closures of facilities and increased prices.
 − There may be an opportunity to adjust product and service ranges 

to reflect new and emerging customer needs.

 − Hotter temperatures increase operational costs from air-conditioning 
and temperature moderation in retail settings, particularly with less 
efficient building design. Customers may be less likely to visit our 
stores on hot days.

 − Water shortages may impact water-intensive manufacturing 

activities and the quality and yield of raw materials.

 − Droughts can lead to lower agricultural productivity or closure 

of water-intensive manufacturing facilities. 

 − Environmental workplace hazards such as heat stress and 

dehydration, and loss of labour productivity, may impact wellbeing 
of team members and business performance.

 − There may be an opportunity to adjust product and service ranges 

to reflect emerging customer needs.

 − Extreme heat may affect the operations of key business customers, 

reducing their demand for our products and services.

Transition risks are driven by policy, regulation, technology, reputation, and market changes as a result of progress 
to decarbonise, including where supported by diverse stakeholders.

Risk description

Policy and legal

Potential impact on and opportunity for Wesfarmers 

 − As global carbon pricing regimes evolve and align, there may 
be increased risk and additional costs incurred associated 
with emissions.

 − Products with a large carbon footprint or those transported 

long distances may become more expensive to procure, especially 
as emissions are costed, reducing margins. 

 − Climate change and resource scarcity may increase geopolitical 

uncertainty, bringing risks throughout supply chains.
 − Policy uncertainty adds electricity supply and price risk.

 − Increased supply chain vulnerability and geopolitical risk may 
introduce other legal risks and impact future supply security.
 − By applying a carbon price now, our relative competitive position 

may be stronger in the future.

 − Investment in energy-efficiency measures and solar PV systems 

reduces dependency on the electricity network.

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Markets

 − Customer preferences and expectations may change to favour 
low-carbon, more sustainable or circular and locally sourced 
products. For some products and market segments, customers 
may be unwilling to pay higher premiums for these features.
 − Supply chain risks may increase. These include risks around 

 − Changing customer preferences and expectations may impact 
demand for existing products and services including products 
that are emissions- or resource-intensive or which are not 
recyclable. Customers may increasingly favour locally sourced 
products. 

supplier capability, price and availability of certain raw 
materials and added costs or disruption to freight systems 
requiring investment in storage and inventory.

 − Evolving customer preferences may provide opportunities to 
develop more sustainable products and services including 
products which have stronger circular properties. 

 − Various factors may require diversification and localisation 

of supply chains. 

 − It may become important to use new raw materials and 

technologies (like recycling) to support more circular business 
models. 

 − It may become important to engage more with community 

and other stakeholders.

Technology

 − New markets may emerge providing opportunities for investment. 
These might include products that support decarbonisation such 
as lithium, and blue or green ammonia and hydrogen. 

 − With increased global interest and investment, there may 

 − With discoveries and breakthroughs, there is a greater risk of 

be discoveries and breakthroughs which impact incumbents 
in certain sectors, businesses, products and services or the 
long-term benefits of certain new technologies. 

 − Business may need to absorb short-term decarbonisation 
costs and diverse stakeholders may expect more detailed 
climate-related reporting. 

stranded assets and business. It will be important to participate 
in research and consider this risk when making long-term 
investments and to reflect this insight into portfolio decisions. 
 − There are opportunities to invest in digital and data capabilities 
to collect more accurate, complete, comparable and timely 
sustainability data, for reporting purposes and to inform strategy. 

Reputation

 − There may be reputational risks associated with exposure to 
fossil fuels and emissions-intensive businesses or businesses 
which do not or cannot decarbonise or which decarbonise 
slowly.

 − Businesses will seek to build climate-positive brands to align 
with changing consumer preferences, while also engaging 
customers on relevant concepts. 

 − There is an opportunity to engage openly with stakeholders 

around our climate-related strategies including at a portfolio level 
and within our divisions, and on results achieved. 

 − There is an opportunity to build a more climate-positive brand 
to better align with consumer preferences, while also engaging 
customers on relevant concepts. 

Workforce

 − It may be important to expand climate capabilities including 

with new climate roles, supporting the development of existing 
teams.

 − Some competitors and employers may be better at attracting 
and retaining climate-related talent, and at investing in the 
development of existing teams. 

 − There will be strong demand for team members with climate 
expertise and it may be difficult to attract these people.

 − There is an opportunity to invest in data and reporting systems,  

to support our teams when developing and implementing 
strategies which deliver climate-related plans and build resilience.

Resource efficiency

 − With increased resource scarcity, the availability and cost of 

 − It will be important to identify and assess key risks and 

certain raw materials may change. 

 − Business may (or may be required to) be more resource 
efficient and to adopt more sustainable practices or 
contribute to environmental restoration.

opportunities for more efficient resource use as resource efficient 
businesses will likely out-perform.

 − There are opportunities to expand and strengthen partnerships 
including with suppliers, peers, governments and experts, and 
to support research in key areas with potential sustainability, 
emissions and nature benefits.

Energy source

 − Interest among stakeholders in energy and associated 

 − There will be opportunities to partner and invest in new energy 

emissions will continue to grow including where it is sourced 
and how it is used. 

 − Businesses and others will continue to evaluate and invest 
in emissions reduction technology and to collaborate on 
decarbonisation opportunities.

markets including ammonia and hydrogen. 

 − It may be important to establish carbon trading capabilities and 
strategies regarding the use of offsets (including offset ‘quality’),  
to offset residual emissions after abatement strategies.

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Operating and financial review | Climate disclosures

Agreement to purchase renewable 
electricity in Queensland 

Progress at the Mt Holland 
lithium project

Bunnings, Kmart Group and Officeworks signed a 100 per cent 
renewable electricity contract for almost 150 sites with CleanCo 
Queensland in December 2021, supporting the realisation of this 
Queensland Government-sponsored project. 

For Bunnings, the CleanCo agreement is for five years, 
commencing 1 July 2022 and covering large sites in Queensland. 
The agreement initially delivers 30 per cent renewable electricity 
then 100 per cent renewable electricity from 1 January 2025. It 
covers 26 per cent of Bunnings’ total electricity consumption and 
reduces Bunnings’ Scope 2 emissions by 30 per cent. For Kmart 
Group and Officeworks, the agreement is for 7.5 years, 
commencing 1 July 2023 and will reduce Scope 2 emissions by 
17 per cent.

Embed climate 
resilience

Combat physical 
impacts 

Focus on 
supply chains

As one of Wesfarmers key platforms for long-term growth, our 
50 per cent stake in the Mt Holland lithium project will support 
global decarbonisation ambitions for many years. 

Mt Holland, acquired in 2019 via the $776 million acquisition 
of Kidman Resources, is a large-scale, long-life and high-grade 
lithium hydroxide project in Western Australia. Construction of 
the mine, concentrator and refinery is underway with first 
production expected in 2024. Wesfarmers has committed an 
additional $950 million to the development of the project. 

The lithium hydroxide produced from the Mt Holland lithium 
project will power about one million battery-operated electric 
vehicles each year, helping the world to transition to greener 
sources of energy and to reduce emissions. Wesfarmers is also 
continuing to assess expansion opportunities to help meet strong 
demand for lithium hydroxide. 

Embed climate 
resilience

Invest for the 
future

Focus on 
supply chains

Bunnings and Coregas innovate  
their fleet

Bunnings has expanded its fleet adding two all-electric trucks, 
as part of a trial with Linfox. At least 60 tonnes of emissions will 
be avoided annually compared to a similar diesel truck. The trial 
will help Bunnings assess decarbonisation options for its 
operations and supply chain. The trucks will recharge using 
a fast charger at Bunnings’ Laverton distribution centre, to 80 
per cent capacity in an hour.

Coregas has partnered with European prime mover 
manufacturer Hyzon to conduct a hydrogen trial with two prime 
movers. These prime movers are due to join the Coregas fleet in 
late 2022, servicing New South Wales customers with bulk 
product deliveries and accessing hydrogen from Coregas’ Port 
Kembla facility. They have a 650-kilometre range, can be 
refuelled within 15 minutes and will reduce emissions by 
approximately 50 per cent compared to similar vehicles. This 
strategic project supports the emerging hydrogen ecosystem 
in Port Kembla and Illawarra-Shoalhaven. 

More sustainable building design

Bunnings continues to expand its network, with a more 
sustainable approach to building design. During the year, new 
stores opened in Victoria, New South Wales, Western Australia 
and New Zealand that include design elements such as enhanced 
levels of insulation, energy efficient lighting, heating, ventilation and 
cooling systems, on-site solar PV systems and internal 
segregation to improve the efficiency of thermal comfort systems.

Bunnings Melton East in Victoria piloted the new design elements. 
The store generates one third of its electricity behind the meter 
with rooftop solar which, together with other energy efficiency 
measures, reduces energy costs by approximately 38 per cent on 
a per-square-metre basis. Scope 1 emissions at Bunnings Melton 
East have reduced by 32 per cent compared to the previous store 
format and Scope 2 emissions are 34 per cent lower. 

Reducing the emissions intensity of the network is an important 
step in meeting Bunnings’ net zero target by 2030.

Embed climate 
resilience

Invest for the 
future

Focus on 
supply chains

Embed climate 
resilience

Leverage data 
and digital 

Combat physical 
impacts 

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Wesfarmers 2022 Annual Report

Independent Limited Assurance Statement to the Management 
and Directors of Wesfarmers Limited

Our Conclusion:

Ernst & Young (‘EY’) was engaged by Wesfarmers Limited (‘Wesfarmers’) to undertake limited assurance, hereafter referred to as a ‘review’, over selected 
disclosures (detailed below) published in the Wesfarmers Annual Report and the Wesfarmers sustainability website for the financial year ended 30 June 2022. 
Based on our review, nothing came to our attention that causes us to believe that the subject matter for our review has not been prepared, in all material 
respects, in accordance with the criteria defined below.

•  Obtaining and reviewing evidence to support key 

assumptions in calculations and other data

•  Reviewing selected management information 

and documentation supporting assertions made 
in the subject matter

•  Checking that data and statements had been 

accurately transcribed from corporate systems 
and/or supporting evidence 

•  Reviewing the presentation of claims, case 

studies and data against the relevant GRI 
principles contained in the criteria.

We believe that the evidence obtained was sufficient 
and appropriate to provide a basis for our limited 
assurance conclusion. 

Limited Assurance

Procedures performed in a limited assurance 
engagement vary in nature and timing from, and 
are less in extent than, for a reasonable assurance 
engagement. Consequently, the level of assurance 
obtained in a limited assurance engagement is 
substantially lower than the assurance that would 
have been obtained had a reasonable assurance 
engagement been performed. 

While we considered the effectiveness of 
management’s internal controls when determining the 
nature and extent of our procedures, our assurance 
engagement was not designed to provide assurance 
on internal controls. Our procedures did not include 
testing controls or performing procedures relating to 
checking aggregation or calculation of data within IT 
systems.

Use of our Assurance Statement

We disclaim any assumption of responsibility for any 
reliance on this assurance report to any persons 
other than management and the Directors of 
Wesfarmers, or for any purpose other than that for 
which it was prepared. 

The extent of our review included the information 
available at www.wesfarmers.com.au/sustainability 
as at 25 August 2022. We provide no assurance 
over changes to the content of this web-based 
information after the date of this assurance 
statement, nor over any information available 
through web-links that are beyond the boundary of 
the selected sustainability disclosures and related 
information in the Annual Report. 

What our review covered (subject matter)

Key responsibilities 

EY reviewed:

•  Wesfarmers’ approach to defining report 

content (‘materiality assessment’)

•  Wesfarmers’ reported alignment to ‘core’ 
level of ‘in accordance’ requirements of 
the Global Reporting Initiative’s (‘GRI’) 
Sustainability Reporting Standards (‘GRI 
Standards’)

•  Selected disclosures in the Annual Report, 

limited to the following: 
–  

‘Sustainability’ and ‘Climate disclosures’ 
sections of the Operating and Financial 
Review

–   The divisional sections for Bunnings 
(pp 28-30), Kmart Group (pp 34-37), 
Chemicals, Energy and Fertilisers (pp 
42-44), Officeworks (pp 48-50), and 
Industrial and Safety (pp 54-56)

•  Selected sustainability disclosures, including 
the performance metrics set out in the table 
below, presented on Wesfarmers’ website 
under wesfarmers.com.au/sustainability as at 
25 August 2022.

Performance metrics

•  Scope 1, Scope 2, and Scope 3 

greenhouse gas emissions in tonnes of 
carbon dioxide equivalent (ktCO2e)

•  Energy consumption (petajoules)

•  Waste disposed and recovered (kt)

•  Water consumption (megalitres)

•  Workplace health and safety data (Total 

Recordable Injury Frequency Rate (‘TRIFR’) 
and workers compensation claims) 

•  Community contributions (AUD)

•  Aboriginal and Torres Strait Islander team 

members

•  Aboriginal and Torres Strait Islander 

procurement spend (AUD)

•  Ethical sourcing program data

•  Employment and People data

Criteria 

In preparing its sustainability disclosures, Wesfarmers 
applied the following criteria: 
•  GRI Standards, including the Reporting Principles 

for defining report quality and content

•  National Greenhouse and Energy Reporting Act 

2007 for Scope 1 and 2 greenhouse gas data 
•  GHG Protocol guidance for Scope 3 greenhouse 
gas data and Scope 2 market-based emissions

•  Other selected Criteria, as determined by 

Wesfarmers, and as set out in its sustainability 
disclosures.

EY’s responsibility and independence

Our responsibility was to express a conclusion on 
the subject matter described in this statement.
We were also responsible for maintaining our 
independence and confirm that we have met the 
requirements of the APES 110 Code of Ethics for 
Professional Accountants, including independence, 
and have the required competencies and experience 
to conduct this assurance engagement.

Wesfarmers’ responsibility 

Wesfarmers’ management was responsible for 
selecting the Criteria and preparing and fairly 
presenting the subject matter in accordance with 
that Criteria. This responsibility includes establishing 
and maintaining internal controls, adequate records, 
and making estimates that are reasonable in the 
circumstances. 

Our approach to conducting  
the review

We conducted our review in accordance with the 
Australian Auditing and Assurance Standards 
Board’s Australian Standard on Assurance 
Engagements Other Than Audits or Reviews of 
Historical Financial Information (‘ASAE 3000’), 
Assurance Engagements on Greenhouse Gas 
Statements (‘ASAE  3410’), and the terms of 
reference for this engagement as agreed with 
Wesfarmers on 11 March 2022.

Summary of review procedures 
performed 

A review consists of making enquiries, primarily 
of persons responsible for preparing the selected 
sustainability disclosures and related information in 
the Annual Report and applying analytical and other 
review procedures. Our procedures included:
•  Evaluating Wesfarmers’ adherence to the GRI 
Standards Reporting Principles for defining 
report quality and report content, including the 
processes involved at a divisional and corporate 
level

•  Checking whether material topics and 

performance issues identified during our 
procedures had been adequately disclosed

• 

Interviewing selected personnel from divisional 
and corporate offices, to understand the key 
sustainability issues related to the subject 
matter and processes for collecting, collating 
and reporting the performance data during the 
reporting period

•  Where relevant, gaining an understanding of 
systems and processes for data aggregation 
and reporting

•  Performing analytical tests and detailed 

substantive testing to source documentation for 
material qualitative and quantitative information

•  Checking the accuracy of calculations performed

Terence Jeyaretnam FIEAust
Partner

Melbourne, Australia  
25 August 2022

Ernst & Young

A member firm of Ernst & Young Global Limited.  
Liability limited by a scheme approved under Professional Standards Legislation

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Governance

Board of  
Directors

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Wesfarmers 2022 Annual Report

Michael Chaney AO
CHAIRMAN

BSc, MBA, Hon. LLD W.Aust, FAICD
Age 72

Term: Chairman since November 2015;  
Director since June 2015.

Skills and experience: After an early career in 
petroleum geology and corporate finance, Michael 
joined Wesfarmers in 1983 as Company Secretary 
and Administration Manager. He became Finance 
Director in 1984 and was appointed Managing 
Director in July 1992. He retired from that position 
in July 2005. 

Directorships of listed entities (last three years), 
other directorships/offices (current and recent):

 - Chairman of Northern Star Resources Limited 

(since July 2021)

 - Member of the Gresham Resources Royalties Fund 

Investment Committee (since June 2020)

 - Chairman of the National School Resourcing Board 

(since November 2017)

 - Director of the Centre for Independent Studies  

(retired July 2022)

Rob Scott 
MANAGING DIRECTOR

B.Comm, MAppFin, CA, GradDipAppFin, OLY
Age 52

Term: Director since November 2017.

Skills and experience: Rob joined Wesfarmers 
in 1993 before moving into investment banking in 
various roles in Australia and Asia. Rob rejoined 
Wesfarmers in 2004 in Business Development before 
being appointed Managing Director of Wesfarmers 
Insurance in 2007 and then Finance Director of Coles 
in 2013. He was Managing Director, Financial Services 
in 2014 and Managing Director of the Wesfarmers 
Industrials division in 2015. Rob became the Group’s 
Deputy Chief Executive Officer in February 2017 and 
assumed the role of Managing Director and Chief 
Executive Officer at the conclusion of the 2017 Annual 
General Meeting in November 2017. 

Directorships of listed entities (last three years), 
other directorships/offices (current and recent):

 - Director of Brisbane 2032 Board (since April 2022)

 - Director of Business Council of Australia  

(since November 2021)

 - Director of Gresham Partners Group Limited  

(since November 2020)

 - Director of Gresham Partners Holding Limited  

(since November 2020)

 - Director of the Flybuys joint venture with Coles Group 

Limited (since December 2018)

 - Member of UWA Business School Advisory Board  

(since August 2017)

 - Chairman of Rowing Australia (since October 2014)

Mike Roche
DIRECTOR

Sharon Warburton
DIRECTOR

BSc, GAICD, FIA (London), FIAA (Australia)
Age 69

BBus (Accounting & Business Law), FCA, FAICD
Age 52

Term: Director since February 2019.

Term: Director since August 2019.

Skills and experience: Mike has more than 
40 years’ experience in the finance sector where 
he held senior positions as an actuary with National 
Mutual/AXA and then in investment banking 
where he provided strategic, financial, merger and 
acquisition, and capital advice to major corporations, 
private equity and government clients. Mike spent 
more than 20 years with Deutsche Bank including 
10 years as Head of Mergers and Acquisitions where 
he advised on major takeovers and privatisations.

Directorships of listed entities (last three years), 
other directorships/offices (current and recent):

 - Director of Macquarie Bank (since January 2021)

Skills and experience: Sharon has extensive board 
and executive experience in corporate strategy, business 
operations, finance, accounting and risk management, 
particularly in the resources, construction, infrastructure 
and property sectors, along with significant expertise in 
governance and remuneration.

Directorships of listed entities (last three years), 
other directorships/offices (current and recent):

 - Director of Mirvac Funds Management Australia Limited 

(since July 2022) 

 - Director of Northern Star Resources Limited 

(since September 2021)

 - Director of Thiess Group Holdings Pty Limited 

 - Director of Macquarie Group (since January 2021)

(since July 2021)

 - Director of MaxCap Group Pty Ltd (since April 2019)

 - Director of Blackmores Limited (since April 2021)

 - Director of Six Park Asset Management 

(since December 2017)

 - Director of Te Pahau Management Ltd 

(since November 2017)

 - Panel member of Adara Partners (Aust) Pty Ltd 

(since April 2017)

 - Founder and Director of Sally Foundation 

(since April 2013)

 - Trustee Director of Energy Industries Superannuation 

Scheme Pty Ltd (retired September 2021)

 - Director of Worley Limited (since February 2019)

 - Director of Karlka Nyiyaparli Aboriginal Corporation RNTBC 

(since December 2020)

 - Member of the Australia Takeovers Panel (since May 2015)

 - Director of the Perth Children’s Hospital Foundation 

(since February 2014)

 - Director of Gold Road Resources Limited  

(retired September 2021)

 - Director of NEXTDC Limited (retired March 2020)

 - Director and Co-Deputy Chairman of Fortescue Metals Group 

Limited (retired March 2020)

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The Right Honourable 
Sir Bill English KNZM
DIRECTOR

BA(Hons), BCom (Otago)
Age 60

Term: Director since April 2018.

Skills and experience: Bill was Minister of 
Finance and Deputy Prime Minister of New Zealand 
from October 2008 to December 2016, and Prime 
Minister until the change of government in October 
2017. He retired from parliament in March 2018. 
He maintains his interest in sound economic policy 
and effective government. Bill now invests with 
his family in technology and data businesses and 
consults with government and business in Australia 
and New Zealand.

Directorships of listed entities (last three years), 
other directorships/offices (current and recent):

 - Director of Paul Ramsay Foundation 

(since December 2021)

 - Chairman of Jarden Wealth Investment Committee 

Vanessa Wallace
DIRECTOR

Jennifer Westacott AO
DIRECTOR

B.Comm (UNSW), MBA (IMD Switzerland), MAICD
Age 58

BA (Honours), FAICD, FIPAA, FANZSOG
Age 62

Term: Director since July 2010.

Term: Director since April 2013.

Skills and experience: Vanessa is an experienced 
board director, strategy management consultant, and 
innovative, early stage business investor and founder. 
She was a Senior Partner at Strategy& (formerly 
Booz & Company), a member of the global board and 
finished her 27 year career as Executive Chairman 
of the business in Japan. Vanessa’s industry 
experience focused on financial services across 
wealth management, retail banking and insurance as 
well as the health providers and consumer products 
companies.

Directorships of listed entities (last three years), 
other directorships/offices (current and recent):

Skills and experience: Jennifer is Chief Executive 
of the Business Council of Australia. Prior to that, 
she was a Board director and lead partner at 
KPMG. Jennifer has extensive experience in critical 
leadership positions in the New South Wales and 
Victorian governments.

Directorships of listed entities (last three years), 
other directorships/offices (current and recent):

 - Patron of Fairbreak Global Pty Ltd (since December 2021)

 - Member of University of New South Wales Council (since 

December 2019)

 - Chair of Studio Schools of Australia (since July 2019)

 - Chairman of Ecofibre Limited (since November 2021, 

 - Patron of The Pinnacle Foundation (since March 2019)

Director since July 2021)

 - Chair of the Western Parkland City Authority 

 - Member of University of NSW Business School Advisory 

(since February 2019)

Council (since April 2021)

 - Board member of Cyber Security Research Centre 

(since June 2021)

 - Director of Palladium Global Holdings Inc 

(CSRC) Ltd (since February 2018)

(since January 2021)

 - Director of Doctor Care Anywhere PLC 

(since September 2020)

 - Co-founder and Chairman of Drop Bio Pty Ltd, a digital 

health company (since December 2018)

 - Director of O’Connell Street Associates (since June 2018)

 - Director of SEEK Limited (since March 2017)

 - Managing Director of MF Advisory, providing advisory 

services into Japan (since 2015)

 - Director of The Todd Corporation Limited 

 - Co-Patron of Pride in Diversity (since November 2017)

(since May 2021)

 - Adjunct Professor at the City Futures Research Centre 

of the University of New South Wales (since 2013)

 - Director of Centre for Independent Studies 

(since March 2021)

 - Director of The Instillery (since August 2019)

 - Director of Impact Lab Ltd (since May 2019)

 - Director of Manawanui Support Ltd (since April 2019)

 - Chairman of Mount Cook Alpine Salmon (since July 2018)

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Anil Sabharwal
DIRECTOR

BMath, BCompSc
Age 44

Alison Watkins AM
DIRECTOR

BCom, FCA, FAICD, F FIN
Age 59

Alan Cransberg
DIRECTOR

BEng(Civil Eng) (Hons)
Age 63

Term: Director since February 2021.

Term: Director since September 2021.

Term: Director since October 2021.

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Skills and experience: Anil is Vice President of 
Product Management at Google and the company’s 
most senior product and engineering leader in 
Australia and New Zealand. He is also an advisor to 
venture capital firm, AirTree Ventures. Anil’s 13 years 
at Google have included leading the strategy and 
team behind the launch of Google Photos in 2015, 
which reached more than one billion monthly active 
users within four years. He later led product, design 
and engineering for Google Chrome, one of the 
world’s most popular web browsers. Before joining 
Google, Anil co-founded online learning company 
Desire2Learn, headquartered in Canada, and was 
General Manager of the knowledge management 
division in Australia for human resources company, 
Talent2. 

Directorships of listed entities (last three years), 
other directorships/offices (current and recent):

 - Advisor to AirTree Ventures (since March 2017)

 - Vice President of Product Management of Google 

(since April 2016, various other roles held at Google 
since January 2009)

Skills and experience: Alison holds a Bachelor 
of Commerce (University of Tasmania), is a Fellow 
of Chartered Accountants ANZ, the Financial Services 
Institute of Australasia, and the Australian Institute 
of Company Directors. She is an experienced chief 
executive and non-executive director. Alison’s previous 
roles include Group Managing Director of Coca-Cola 
Amatil, Chief Executive Officer of GrainCorp Limited 
and Berri Limited, and Managing Director of Regional 
Banking at ANZ. She spent 10 years at McKinsey 
& Company and became a partner before moving 
to ANZ as Group General Manager, Strategy.

Directorships of listed entities (last three years), 
other directorships/offices (current and recent):

 - Director of CSL Limited (since August 2021)

 - Chancellor of the University of Tasmania (since July 2021)

 - Member of Reserve Bank of Australia Board 

(since December 2020)

 - Member of Low Emissions Technology Roadmap 
Ministerial Reference Panel (since March 2020)

 - Director of Centre for Independent Studies 

(since December 2011)

 - Director of Business Council of Australia 

(retired October 2021)

 - Group Managing Director of Coca-Cola Amatil 

(retired May 2021)

Skills and experience: Alan holds an Honours 
Degree in Civil Engineering from The University of 
Western Australia (UWA). He has 36 years of experience 
from roles in the mining, resources and manufacturing 
sectors. Alan joined Alcoa in 1980 and worked in 
a variety of assignments and locations across its 
Australian and international businesses, prior to being 
appointed as Chairman and Managing Director of Alcoa 
Australia, and President of Alcoa Refining in 2008. 
He retired from these positions in 2016.

Directorships of listed entities (last three years), 
other directorships/offices (current and recent):

 - Chairman of the Waalitj Foundation (since November 2017)

 - Member of the UWA Business School Board 

(since October 2016)

 - Director and Lead Investment Committee member of the 
Special Air Services Resources Trust (since October 2016)

 - Ambassador to the Foundation to Prevent Violence to Women 

and Their Children (since September 2016)

 - Director of John Swire and Sons Pty Ltd (since August 2016)

 - Deputy Chairman of Peel Development Commission (retired 

December 2021)

 - Director of Stealth Global Industries Ltd (retired April 2020)

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Governance

Corporate governance overview

THE BOARD OF WESFARMERS LIMITED

The Board of Wesfarmers Limited is committed to providing a 
satisfactory return to its shareholders and fulfilling its corporate 
governance obligations and responsibilities in the best interests of the 
company and its stakeholders. This corporate governance statement 
details the key aspects of the governance framework and practices 
of Wesfarmers. It regularly reviews its governance framework and 
practices so as to ensure that they consistently reflect market practice 
and stakeholder expectations.

The Board believes that the governance policies and practices 
adopted by Wesfarmers during the reporting period for the year 
ended 30 June 2022 follow the recommendations contained in the 
fourth edition of the ASX Corporate Governance Council’s Corporate 
Governance Principles and Recommendations (ASX Principles).

ROLES AND RESPONSIBILITIES OF THE BOARD 
AND MANAGEMENT

The role of the Board is to:

•  approve the purpose, values and strategic direction of the Group;

•  guide and monitor the management of Wesfarmers and its 

businesses in accordance with the purpose, values and strategic 
plans;

•  oversee good governance practice; and

•  set the Group’s risk appetite and monitor and review the Group’s 

financial and non-financial risk management systems.

The Board aims to protect and enhance the interests of its 
shareholders, while taking into account the interests of other 
stakeholders, including employees, customers, suppliers and the 
wider community. In performing its role, the Board is committed to 
a high standard of corporate governance practice and to fostering 
a culture of compliance which values ethical behaviour, personal 
and corporate integrity, accountability, transparency and respect for 
others. The Group Managing Director has responsibility for the  
day-to-day management of Wesfarmers and its businesses, and is 
supported in this function by the Wesfarmers Leadership Team.

Details of the members of the Wesfarmers Leadership Team are set 
out on pages 12 and 13 of this annual report and in the corporate 
governance section of the company’s website at  
www.wesfarmers.com.au/cg

The Board maintains ultimate responsibility for strategy and control of 
Wesfarmers and its businesses. 

STRUCTURE AND COMPOSITION OF THE 
BOARD

Wesfarmers is committed to ensuring that the composition of the 
Board continues to include directors who collectively bring an 
appropriate mix of skills, commitment, experience, expertise and 
diversity (including gender diversity) to Board decision-making.

The Board currently comprises ten directors, including nine  
non-executive and independent directors. Detailed biographies of the 
directors as at 30 June 2022 are set out on pages 86 and 87 of this 
annual report.

Wayne Osborn retired as a non-executive director at the end of the 
2021 Annual General Meeting on 21 October 2021 after serving as a 
director for 11 years.

Alan Cransberg was appointed as a non-executive director, effective 
1 October 2021. He is a former Chairman and Managing Director of 
Alcoa of Australia Limited and brings valuable experience and insights 
to the Board from decades at one of the world's largest mining and 
minerals processing companies.

The Board is of the view that the current directors possess an 
appropriate mix of skills, commitment, experience, expertise (including 
knowledge of the Group and the relevant industries in which the 
Group operates) and diversity to enable the Board to discharge its 
responsibilities effectively and deliver the company’s strategic priorities 

88

 Wesfarmers 2022 Annual Report

as a diversified corporation with current businesses operating in 
home improvement, outdoor living and building materials; general 
merchandise and apparel; office and technology products; health, 
beauty and wellbeing; manufacturing and distribution of chemicals 
and fertilisers; mine development and construction; industrial and 
safety product distribution; and gas processing and distribution.

In fulfilling its roles and responsibilities, the key focus areas of the 
Board during the 2022 financial year are set out below.

Key focus areas of the Board during the 2022 financial 
year included:

 – Approving the acquisition of Australian Pharmaceutical 

Industries Ltd and the formation of the Group’s Health division

 – Overseeing the development of the Mt Holland lithium project

 – Overseeing management’s strategy to develop a Group data 
and digital ecosystem and the formation of the OneDigital 
division

 – Guiding and supporting management in relation to the Group’s 
continued response to the COVID-19 outbreak, with a key 
focus on the health, safety and wellbeing of the Group’s team 
members and customers

 – Reviewing and providing input into the business operations and 
the strategic plans of each division likely to impact long-term 
shareholder value creation 

 – Monitoring changes in the domestic and global external 

environment, including inflationary and supply chain pressures, 
and overseeing management’s strategies in relation to these 
areas

 – Overseeing management’s performance in strategy 

implementation

 – Overseeing the implementation of strategy to address areas of 
underperformance and reposition the portfolio to deliver growth 
in shareholder returns

 – Monitoring and evaluating growth opportunities to complement 
the existing portfolio including the acquisitions of Adelaide Tools 
(now Tool Kit Depot) and Beaumont Tiles by Bunnings

 – Monitoring the Group’s operating and cash flow performance, 
financial position and key metrics, including financial covenants 
and credit ratings and approving of return of capital to 
shareholders

 – Reviewing the Group’s risk management framework, overseeing 
the implementation of strategies to improve the Group’s risk 
management framework and monitoring that the Group is  
operating with due regard to the risk appetite set by the Board

 – Reviewing and updating the Group’s risk appetite statement to 
reflect new and emerging risks and changing circumstances

 – Monitoring the Group’s safety performance and overseeing 

implementation of strategies to improve safety performance and 
enhance workplace safety awareness

 – Monitoring the Group’s performance on key ESG metrics 

and overseeing implementation of strategies to improve ESG 
performance and enhance ESG awareness

 – Overseeing the Group’s remuneration framework and 

remuneration outcomes for senior management

 – Reviewing the processes in place to attract, develop, motivate 

and retain talent

 – Reviewing and updating policies, reporting and processes to 
improve the Group’s system of corporate governance and 
compliance

Corporate governance overview

The Board skills matrix set out below describes the combined skills, experience and expertise presently represented on the Board.   
To the extent that any skills are not directly represented on the Board, they are augmented through management and external advisors.

David Cheesewright who has extensive experience in international retailing and manufacturing, including 19 years with Walmart,  
was appointed as an advisor to the Wesfarmers Board in August 2018.

SKILLS AND EXPERIENCE

BOARD

Leadership
Experience in a senior management position in a listed company, large or complex 
organisation or government body.

Corporate governance
Experience in and commitment to the highest standards of corporate governance, and 
includes experience as a director or senior executive in a listed company, large organisation 
or government body.

Financial acumen
Understanding of financial statements and reporting, key drivers of financial performance, 
corporate finance and internal financial controls.

Risk management 
Experience in identification, monitoring and management of material financial and non-
financial risks and understanding, implementation and oversight of risk management 
frameworks and controls.

Digital, data and technology
Experience and expertise in identifying, assessing, implementing and leveraging digital 
technologies and other innovations, understanding the use of data and analytics and 
responding to digital disruption.

People and culture
Experience in overseeing workplace culture, people management, development and 
succession planning, setting remuneration frameworks and promoting diversity and 
inclusion.

Strategy 
Experience in corporate planning, including identifying and analysing strategic opportunities 
and threats, developing, implementing and delivering strategic objectives and monitoring 
performance against strategic objectives.

Corporate transactions
Experience in assessing and completing complex business transactions, including mergers, 
acquisitions, divestments, capital management, major projects and business integration.

Retail markets
Knowledge and experience in the retail and consumer goods industry, including 
merchandising, brand development, customer relationships and supply chain.

Industrial, resources and infrastructure
Senior executive or non-executive director experience and expertise in the industrial, 
resources or infrastructure sectors, including project construction.

Regulatory and public policy
Experience in the management and oversight of compliance with legal and regulatory 
requirements and/or experience in the development, implementation and review of 
regulatory and public policy, including professional experience working or interacting with 
government and regulators.

Corporate sustainability and community engagement
Understanding and experience in sustainability best practices to manage the impact of 
business operations on the environment and community and the potential impact of climate 
change on business operations, and expertise in community and stakeholder relations.

International experience
Experience in international business, trade and/or investment at a senior executive level 
and exposure to global markets and a range of different political, regulatory and business 
environments.

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Governance

Corporate governance overview

DIRECTOR INDEPENDENCE

ROLE OF THE REMUNERATION COMMITTEE

Full details of the remuneration paid to non-executive directors and 
executive key management personnel (KMP), along with details of 
Wesfarmers’ policy on the remuneration of the executive KMP are  
set out in the remuneration report on pages 98 to 127 of this  
annual report.

The executive KMP, comprising the Group Managing Director, the 
Group Chief Financial Officer and those executives who have authority 
and responsibility for planning, directing and controlling the activities 
of a major profit generating division of Wesfarmers have a variable or 
‘at risk’ component as part of their total remuneration package via 
participation in the Key Executive Equity Performance Plan (KEEPP). 

The mix of remuneration components and the performance measures 
used in the KEEPP have been chosen to ensure that there is a strong 
link between remuneration earned and the achievement of the Group’s 
strategy and business objectives, alignment with the Group’s values, 
management of risk in accordance with the Group’s risk appetite, and, 
ultimately, generating satisfactory returns for shareholders. 

Annual performance reviews of each member of the Wesfarmers 
Leadership Team, including Group Managing Director for the 2022 
financial year have been undertaken. More details about Wesfarmers' 
performance and development review process for the executive KMP 
are set out in the 2022 Corporate Governance Statement.

Key focus areas of the Remuneration Committee during 
the 2022 financial year included: 

 – Reviewing and making recommendations to the Board in 

relation to the fixed and variable remuneration of the Group 
Managing Director and the other executive KMP

 – Reviewing and, where appropriate, approving management’s 

recommendations in relation to the fixed and variable 
remuneration of the other members of the Wesfarmers 
Leadership Team, in accordance with the Board-approved 
delegated authority for remuneration related approvals

 – Reviewing and making recommendations to the Board in 
relation to the Wesfarmers variable remuneration plans

 – Reviewing and making recommendations to the Board for 
the vesting outcomes of the 2018 KEEPP Performance 
Shares based on the assessment of performance against the 
performance targets

 – Reviewing the succession and transition plans for the 

Wesfarmers Leadership Team

 – Reviewing and making a recommendation to the Board on  

non-executive director fees

 – Reviewing and monitoring of diversity and inclusion matters, 

including gender pay equity

Directors are expected to bring views and judgement to Board 
deliberations that are independent of management and free of  
any interest, position, association, business or other relationship  
or circumstance that could materially interfere with the exercise of 
objective, unfettered or independent judgement, having regard to the 
best interests of the company as a whole.

The Board’s assessment of independence and the criteria against 
which it determines the materiality of any facts, information or 
circumstances is formed having regard to the ASX Principles. In 
particular, the Board focuses on the factors relevant to assessing the 
independence of a director set out in recommendation 2.3 of the  
ASX Principles and the materiality guidelines applied in accordance 
with Australian Accounting Standards.

The Board has reviewed the position and relationships of all directors 
in office as at the date of the company’s 2022 annual report and 
considers that all nine non-executive directors are independent.

COMMITTEES OF THE BOARD

The Board has established an Remuneration Committee, a 
Nomination Committee and a Audit and Risk Committee as standing 
committees to assist with the discharge of its responsibilities. Details 
of the current membership and composition of each committee 
are set out in the 2022 Corporate Governance Statement on the 
company’s website at www.wesfarmers.com.au/cg

ROLE OF THE NOMINATION COMMITTEE

As part of the Nomination Committee’s oversight of Board succession 
planning, it is also responsible for identifying suitable candidates to fill 
Board vacancies as and when they arise, or to identify candidates to 
complement the existing Board, and to make recommendations to the 
Board on their appointment. Where appropriate, external consultants 
are engaged to assist in searching for candidates.

The Nomination Committee is responsible for ensuring that there is 
a robust and effective process for evaluating the performance of the 
Board, its committees and individual non-executive directors.  
In relation to the re-appointment of a non-executive director, the 
Nomination Committee reviews the performance of the relevant 
non-executive director during their term of office and makes 
recommendations to the Board. The form of the Board, committee 
and individual non-executive director performance reviews are 
considered and determined each year. The outcomes of each Board 
and committee performance review are discussed by the Board 
and each respective committee. The outcomes of the performance 
review for each non-executive director are discussed between the 
non-executive director and the Chairman (and in the case of the 
performance review of the Chairman, between the Chairman and a 
nominated senior director). From time to time, the evaluation process 
may be facilitated by an external consultant. More details are available  
in the 2022 Corporate Governance Statement.

Key focus areas of the Nomination Committee during 
the 2022 financial year included:

 – Consideration of feedback from major shareholders during the 
Chairman’s Roadshow conducted prior to the 2021 Annual 
General Meeting

 – Identifying and considering potential candidates to fill Board 
vacancies and recommending to the Board candidates for 
appointment to the Board

 – Recommending to the Board the process for the Board, 

committee and individual non-executive director performance 
reviews

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Corporate governance overview

ROLE OF THE AUDIT AND RISK COMMITTEE

ROLE OF THE EXTERNAL AUDITOR

The Audit and Risk Committee assists the Board in fulfilling its 
responsibilities in overseeing the company’s financial reporting, 
compliance with legal and regulatory requirements, setting, 
articulating and reviewing the risk appetite of the Wesfarmers Group, 
and proactively overseeing the Group’s systems of internal control 
and its financial and non-financial risk management framework in 
accordance with the Group’s purpose, values and strategic direction.

Key focus areas of the Audit and Risk Committee 
during the 2022 financial year included:

The company’s external auditor is Ernst & Young. The effectiveness, 
performance and independence of the external auditor is reviewed 
annually by the Audit and Risk Committee. The lead audit partner is 
required to rotate after a maximum of five years. Mr Trevor Hammond 
is the lead audit partner and was appointed on 1 July 2019.

Ernst & Young has provided the required independence declaration 
to the Board for the financial year ended 30 June 2022. The 
independence declaration forms part of the directors’ report and is 
provided on page 97 of this annual report.

GOVERNANCE POLICIES

 – Monitoring the ongoing management responses across the 
Group in relation to COVID-19 and the identification of risks 
(current and emerging) and associated mitigation strategies. 
Key risks considered as part of this included health, safety and 
wellbeing, global supply chain impacts and business continuity

The corporate governance section of the company’s website at  
www.wesfarmers.com.au/cg contains access to all relevant 
corporate governance information, including Board and committee 
charters, and Group policies referred to in the 2022 Corporate 
Governance Statement.

 – Reviewing and assessing the Group’s processes which 

ensure the integrity of financial statements and reporting, and 
associated compliance with accounting, legal and regulatory 
requirements

 – Monitoring the Group’s information security framework, 

including data protection management, third-party data risk 
management and the reporting structure and escalation 
process on information security risks

 – Overseeing the Group's technology and cyber security 

governance framework including the evolution of the Group's 
maturity assessment processes

 – Overseeing the development of reporting and limited assurance 
in relation to emissions reduction and other key ESG matters

 – Monitoring the ethical sourcing of products and services 

throughout the Group to ensure that there are appropriate 
safeguards and processes in place

 – Monitoring the retail shrinkage control measures and reporting 

procedures in the Group’s divisions

 – Reviewing the Group’s risk management framework, 

overseeing the implementation of strategies to improve the 
Group’s risk management framework and monitoring that the 
Group is operating with due regard to the risk appetite set by 
the Board

 – Reviewing and updating the Group’s risk appetite statement to 
reflect new and emerging risks and changing circumstances

 – Reviewing and evaluating the adequacy of the Group’s 

insurance arrangements to ensure appropriate cover for 
identified operational and business risks

 – Monitoring the Group’s tax compliance program both in 

Australia and overseas, including cross-border intra-Group 
transactions, to ensure its obligations are met in the jurisdictions 
in which the Group operates

 – Overseeing the Group’s compliance program, supported 

by approved guidelines and standards, covering safety, the 
environment, legal liability, compliance with key governance 
policies, including the Wesfarmers Code of Conduct, 
whistleblower reporting, information technology, data privacy 
and human rights

 – Overseeing the Group’s internal audit program, including 

approving the annual internal audit plan

 – Monitoring the Group’s payment terms for small suppliers and 
associated reporting under the Payment Times Reporting 
Scheme

 – Overseeing the payroll assurance and remediation activities of 

the relevant Group businesses

ETHICAL AND RESPONSIBLE BEHAVIOUR

The Wesfarmers Way is the framework for the company’s business 
model and comprises its values of integrity, openness, accountability 
and entrepreneurial spirit, details of which are published on the 
company’s website at www.wesfarmers.com.au

The Wesfarmers Way, together with the Code of Conduct and 
other policies, guide the behaviour of everyone who works at or for 
Wesfarmers as the company strives to achieve its primary objective. 
The Board and senior executives of the Group strive to ensure that 
their own actions and decisions reference and reinforce Wesfarmers’ 
core values, and that they instil and reinforce a culture of acting 
lawfully, ethically and responsibly.

INVESTOR ENGAGEMENT

Wesfarmers recognises the importance of providing its shareholders 
and the broader investment community with facilities to access up-to-
date, high-quality information, participate in shareholder decisions 
of the company and provide avenues for two-way communication 
between the company, the Board and shareholders.

Wesfarmers has developed an investor engagement program 
for engaging with shareholders, debt investors, the media and 
the broader investment community. In addition, the company’s 
shareholders have the ability to elect to receive communications and 
other shareholding information electronically.

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Governance

Corporate governance overview

RISK MANAGEMENT

RISK MANAGEMENT FRAMEWORK

Wesfarmers believes that good risk management practice is crucial 
to informed decision-making, effective management of operations to 
drive commercial outcomes and ultimately underpins the objective of 
delivering shareholder value over the long term.

Robust, integrated and effective risk management is central to 
Wesfarmers’ broader governance framework and is fully supported by 
the Board and the Wesfarmers Leadership Team. This commitment 
is outlined in the Wesfarmers Board-approved Risk Management 
Policy which is available in the corporate governance section of the 
company’s website at www.wesfarmers.com.au/cg

The Board recognises that a values-based culture is fundamental 
to an effective risk management framework. Wesfarmers, through 
the Board, instils and promotes a culture which is underpinned by 
the Wesfarmers Way, including Wesfarmers’ core values of integrity, 
openness, accountability and entrepreneurial spirit.

Wesfarmers’ approach to risk management is aligned with the 
principles and requirements of International Standard  
ISO 31000:2018 – Risk Management Guidelines and is depicted 
diagrammatically below. These elements are necessary to maintain 
a risk-aware culture and inform professional judgements about 
risk-taking within the parameters and risk appetite set by the Board.

The Wesfarmers Risk Management Framework is reviewed on an 
annual basis by the Board to satisfy itself that it is sound, continues to 
operate effectively, and that the Group is operating with due regard to 
the risk appetite set by the Board, or that appropriate action is taken 
should performance fall outside the risk appetite. 

The framework was last comprehensively reviewed in February 2022. 
The Group Risk Appetite Statement was reviewed and updated 
in May 2022 to reflect new and emerging risks and changing 
circumstances.

DIVERSITY AND INCLUSION

Wesfarmers considers building a diverse and inclusive workforce a key 
enabler for delivering its objective of satisfactory returns to shareholders. 
Wesfarmers’ customers and stakeholders are diverse and to gain the 
best insight into their needs and expectations, and how to meet them, 
diverse and inclusive teams are required. A diversity of perspectives and 
backgrounds also strengthens creativity in teams. Moreover, creating 
an environment that attracts, retains, and develops team members with 
a wide range of strengths and experiences ensures that Wesfarmers is 
best equipped for future growth.

The Wesfarmers Diversity and Inclusion Policy encourages an 
inclusive work environment where everybody feels respected and 
safe at work and includes fostering diversity in all its facets at all levels 
across the Group.

Further details on diversity and inclusion are set out on page 66 of this 
annual report and in the 2022 Corporate Governance Statement.

Wesfarmers has adopted a three-lines approach to risk management 
whereby all team members have an important role in the operation of 
the risk framework. The three-lines approach:

•  promotes accountable decision-making; and

• 

reinforces the responsibility of divisional management and Group 
management in:

 –

identifying, understanding and managing the risks within their 
respective realms of responsibility;

 – ensuring that business operations and risk-taking remains 

within the risk appetite; and

 –

that appropriate action is taken if risk exposure is deemed to 
be either too conservative or outside risk appetite.

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Directors' report
Wesfarmers Limited and its controlled entities

The information appearing on pages 4 to 92 forms part of the directors’ report for the financial year ended 30 June 2022 and is to be read in 
conjunction with the following information:

RESULTS AND DIVIDENDS 

Year ended 30 June

Profit

Profit attributable to members of the parent entity

Dividends

The following dividends have been paid or are payable* by the company or have been determined to be paid by 
the directors since the commencement of the financial year ended 30 June 2022:

(a)   out of the profits for the year ended 30 June 2021 and retained earnings on the fully-paid ordinary shares:

(i)   fully-franked final dividend of 90 cents (2020: 77 cents) per share paid on 7 October 2021 (as disclosed in 

last year’s directors’ report)

(ii)  fully-franked special dividend of nil cents (2020: 18 cents) per share (as disclosed in last year's directors' 

report)

(b)  out of the profits for the year ended 30 June 2022 on the fully-paid ordinary shares:

(i)   fully-franked interim dividend of 80 cents (2021: 88 cents) per share paid on 30 March 2022

2022

$m

2021

$m

2,352

2,380

1,020

-

907

873

204

998

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(ii)  fully-franked final dividend of 100 cents (2021: 90 cents) per share to be paid on 6 October 2022

1,134

    1,020 

Capital Management

The following capital return has been paid or determined to be paid by the company by the directors since the 
commencement of the financial year ended 30 June 2022:

(i)   a capital return of 200 cents per fully-paid share paid on 2 December 2021

-

2,268

*  The payment of dividends for the 2021 KEEPP Deferred Shares and Performance Shares are delayed until either the shares vest (with the dividends paid to the 

participant) or upon forfeiture (with the dividends paid to the trustee). This means no component of any dividend will be paid to the executive KMP unless and until 
the vesting outcome is known. For further details, please see the remuneration report on pages 98 to 127 of this annual report.

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PRINCIPAL ACTIVITIES 

The principal activities of the entities within the consolidated Group during the year were:

• 

• 

• 

• 

retailing of home improvement and outdoor living products and 
supply of building materials;

retailing of general merchandise and apparel products;

retailing of office and technology products; 

retailing of health, beauty and wellbeing products and services;

•  wholesale distribution of pharmaceutical goods;

•  manufacturing and distribution of chemicals and fertilisers;

•  mine development and construction; 

• 

industrial and safety product distribution;

•  gas processing and distribution; 

•  establishing a data and digital ecosystem; and

•  management of the Group's investments.

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DIRECTORS

The directors in office at the date of this report are:

•  M A Chaney (Chairman)

•  R G Scott (Group Managing Director)

•  A J Cransberg

•  S W English

•  M Roche

•  A Sabharwal

•  V M Wallace

•  S L Warburton

•  A M Watkins 

•  J A Westacott

All directors served on the Board for the period from 1 July 2021 to 30 June 2022, except A M Watkins who was appointed a director of the 
company on 1 September 2021 and A J Cransberg who was appointed a director of the company on 1 October 2021.

During the year, W G Osborn retired as a director of the company on 21 October 2021, at the conclusion of the 2021 Annual General 
Meeting.

The qualifications, experience, special responsibilities and other details of the directors in office as at the date of this report appear on 
pages 86 and 87 of this annual report.

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Directors' report

Directors' report
Wesfarmers Limited and its controlled entities

Directors' shareholdings

Securities in the company or in a related body corporate in which directors had a relevant interest as at the date of this report are:

M A Chaney

A J Cransberg

S W English

M Roche

A Sabharwal

R G Scott*

V M Wallace

S L Warburton

A M Watkins

J A Westacott

BWP Trust

Wesfarmers Limited

Units

–

-

–

–

-

–

–

–

-

–

Shares

87,597

4,226

3,509

9,510

6,050

1,112,416

13,983

7,536

9,000

6,788

*  R G Scott holds 395,107 Deferred Shares (previously referred to as Restricted Shares) and 341,492 Performance Shares under the Key Executive Equity 

Performance Plan (KEEPP). Mr Scott also holds 25,774 Performance-tested Shares. For further details, please see the remuneration report on pages 98 to 127 of 
this annual report.

W G Osborn retired as a director of the company on 21 October 2021, at the conclusion of the 2021 Annual General Meeting. Mr Osborn had a 
relevant interest in 14,728 shares in Wesfarmers Limited, and held no relevant interests in BWP Trust units as at his resignation date. 

Directors’ meetings

The following table sets out the number of directors’ meetings (including meetings of Board committees) held during the year ended  
30 June 2022 and the number of meetings attended by each director.   

Board

Audit and Risk 
Committee

Remuneration 
Committee

Nomination Committee

Eligible to 
attend1

Attended2

Eligible to 
attend1

Attended2

Eligible to 
attend1

Attended2

Eligible to 
attend1

Attended2

8

6

8

3

8

8

8

8

8

6

8

8

6

8

3

8

8

8

8

8

6

8

-

-

6

-

-

6

-

-

6

-

6

-

-

6

-

-

6

-

-

6

-

6

9

6

-

4

9

-

-

9

-

6

-

9

6

-

4

9

-

-

9

-

6

-

3

1

3

2

3

3

-

3

3

1

3

3

1

3

2

3

3

-

3

3

1

3

M A Chaney3

A J Cransberg4

S W English

W G Osborn5

M Roche

A Sabharwal

R G Scott

V M Wallace

S L Warburton6

A M Watkins7

J A Westacott

1  Number of meetings held while the director was a member of the Board/Committee. 
2  Number of meetings attended.
3  Notwithstanding he is not a member, M A Chaney attended five of the six meetings of the Audit and Risk Committee held during the year.
4  A J Cransberg was appointed as a director of the company effective 1 October 2021.
5  W G Osborn retired as a director of the company on 21 October 2021, at the conclusion of the 2021 Annual General Meeting.   
6  Notwithstanding she is not a member, S L Warburton attended eight of the nine meetings of the Remuneration Committee held during the year.
7  A M Watkins was appointed as a director of the company effective 1 September 2021.

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Directors' report
Wesfarmers Limited and its controlled entities

INSURANCE AND INDEMNIFICATION OF DIRECTORS AND OFFICERS 

During or since the end of the financial year, the company has paid premiums in respect of a contract insuring all directors and officers of 
Wesfarmers Limited and its related entities against certain liabilities incurred in that capacity. Disclosure of the nature of the liability covered by 
the insurance and premiums paid is subject to confidentiality requirements under the contract of insurance.

In accordance with the company’s constitution, the company has entered into Deeds of Indemnity, Insurance and Access with each of the 
directors of the company. These Deeds:

• 

indemnify a director to the full extent permitted by law against any liability incurred by the director:

 – as an officer of the company or of a related body corporate; and

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to a person other than the company or a related body corporate, unless the liability arises out of conduct on the part of the director 
which involves a lack of good faith;

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•  provide for insurance against certain liabilities incurred as a director; and

•  provide a director with continuing access, while in office and for a specific period after the director ceases to be a director, to certain 

company documents which relate to the director’s period in office.

In addition, the company’s constitution provides for the indemnity of officers of the company or its related bodies corporate from liability incurred 
by a person in that capacity to the full extent permitted by law.

No indemnity payment has been made under any of the documents referred to above during, or since the end of, the financial year.

DIRECTORS’ AND OTHER OFFICERS’ REMUNERATION

Discussion of the Board’s policy for determining the nature and amount of remuneration for directors and senior executives and the relationship 
between such policy and company performance are contained in the remuneration report on pages 98 to 127 of this annual report.

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OPTIONS

No options over unissued shares in the company were in existence at the beginning of the financial year or granted during, or since the end of, 
the financial year.

COMPANY SECRETARY 

Vicki Robinson was appointed as Executive General Manager, Company Secretariat and Company Secretary of Wesfarmers Limited on 
2 March 2020. Prior to this, Vicki was General Manager, Legal (Corporate) and has played a key role in many of the Group's merger and 
acquisition transactions. Vicki joined Wesfarmers in July 2003 as a Legal Counsel with the Corporate Solicitors Office. In 2007, she moved to 
the role of General Manager for enGen, and she returned to the Corporate Solicitors Office in 2009. Vicki holds a Bachelor of Laws (Honours) 
and a Bachelor of Commerce from The University of Western Australia and was admitted to practise as a barrister and solicitor in 1999. Vicki 
chairs the Advisory Board of the Curtin University Law School, is a member of the Methodist Ladies College Council, and was a director of the 
Black Swan State Theatre company from 2009 to 2018. She is a Fellow of the Governance Institute of Australia.

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SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS 

Particulars of the significant changes in the state of affairs of the consolidated entity during the financial year are as follows:

• 

revenue from continuing operations up from $33,941 million to $36,838 million

•  profit after tax for the year down from $2,380 million to $2,352 million. 

•  dividends per share of $1.80 (2021: $1.78 per share) 

• 

total assets up from $26,214 million to $27,271 million

•  shareholders’ equity down from $9,715 million to $7,981 million

•  net debt/(cash) up from $227 million to $4,491 million

•  net cash flows from operating activities down from $3,383 million to $2,301 million 

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REVIEW OF RESULTS AND OPERATIONS

The operations, financial position, business strategies and prospects for future financial years of the consolidated entity are detailed in the 
operating and financial review on pages 14 to 85 of this report.

EVENTS AFTER THE REPORTING PERIOD

The following significant event has arisen since the end of the financial year: 

Dividends

A fully-franked final dividend of 100 cents per share resulting in a dividend payment of $1,134 million was determined with a payment date of 
6 October 2022. The dividend has not been provided for in the 30 June 2022 full-year financial statements.

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Directors' report

Directors' report
Wesfarmers Limited and its controlled entities

NON-AUDIT SERVICES

Ernst & Young provided non-audit services to the consolidated entity during the year ended 30 June 2022 and received, or is due to receive, the 
following amounts for the provision of these services:

Tax compliance

Other

Total

$’000

687

94

781

The total non-audit services fees of $781 thousand represents 11.6 per cent of the total fees paid or payable to Ernst & Young  
and related practices for the year ended 30 June 2022. Total non-audit services fees and other assurance and agreed-upon procedures fees 
were $1,471 thousand. Further details of amounts paid or payable to Ernst & Young and its related practices are disclosed in note 29 to the 
financial statements. 

The Audit and Risk Committee has, following the passing of a resolution of the Committee, provided the Board with written advice in relation to 
the provision of non-audit services by Ernst & Young.

The Board has considered the Audit and Risk Committee’s advice, and the non-audit services provided by Ernst & Young, and is satisfied 
that the provision of these services during the year by the auditor is compatible with, and did not compromise, the general standard of auditor 
independence imposed by the Corporations Act 2001 for the following reasons:

• 

the non-audit services provided do not involve reviewing or auditing the auditor’s own work or acting in a management or 
decision-making capacity for the company;

•  all non-audit services were subject to the corporate governance procedures and policies adopted by the company and have been 

reviewed by the Audit and Risk Committee to ensure they do not affect the integrity and objectivity of the auditor; and

• 

there is no reason to question the veracity of the auditor’s independence declaration (a copy of which has been reproduced on the 
following page).

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Directors' report
Wesfarmers Limited and its controlled entities

The directors received the declaration below from Ernst & Young:

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Auditor’s independence declaration to the directors of Wesfarmers Limited

As lead auditor for the audit of the financial report of Wesfarmers Limited for the financial year ended 30 June 2022,  
I declare to the best of my knowledge and belief, there have been:

a.  no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; 

b.  no contraventions of any applicable code of professional conduct in relation to the audit; and

c.  no non-audit services provided that contravene any applicable code of professional conduct in relation to the audit.

This declaration is in respect of Wesfarmers Limited and the entities it controlled during the financial year.

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Ernst & Young

T S Hammond
Partner 25 August 2022

A member firm of Ernst & Young Global Limited  
Liability limited by a scheme approved under Professional Standards Legislation

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ENVIRONMENTAL REGULATION AND PERFORMANCE 

The activities of the consolidated entity are subject to environmental regulation by various authorities throughout Australia and the other 
countries in which the Group operates. 

Licences granted to the consolidated entity regulate the management of air and water quality and quantity, the storage and carriage of 
hazardous materials, the disposal of wastes and other environmental matters associated with the consolidated entity’s operations.

During the year there have been no known material breaches of the consolidated entity’s licence conditions.

PROCEEDINGS ON BEHALF OF THE COMPANY 

No proceedings have been brought on behalf of the company, nor have any applications been made in respect of the company, under 
section 237 of the Corporations Act 2001.

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CORPORATE GOVERNANCE 

In recognising the need for high standards of corporate behaviour and accountability, the directors of Wesfarmers Limited believe that the 
governance policies and practices adopted for the year ended 30 June 2022 follow the recommendations contained within the fourth edition of 
the ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations. An overview of the company’s corporate 
governance statement can be found on pages 88 to 92 of this annual report. The full corporate governance statement is available in the 
corporate governance section of the company’s website at www.wesfarmers.com.au/cg

CORPORATE INFORMATION 

Wesfarmers Limited is a company limited by shares that is incorporated and domiciled in Australia. The company’s registered office and principal 
place of business is Level 14, Brookfield Place Tower 2, 123 St Georges Terrace, Perth, Western Australia.

ROUNDING 

The amounts contained in this report and in the financial statements have been rounded to the nearest million dollars unless otherwise stated 
(where rounding is applicable) under the option available to the company under ASIC Corporations (Rounding in Financial/Directors’ Reports) 
Instrument 2016/191. The company is an entity to which the instrument applies.

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Directors' report

Remuneration report

Message from the Chairman of  
the Remuneration Committee 

Dear Shareholders,

On behalf of the Board, I am pleased to present the 2022 Remuneration Report.

The 2022 year was characterised by two significant events 
that impacted both the financial results of the Group and the 
remuneration outcomes of the executive key management 
personnel (KMP). 

Firstly, the COVID-19 pandemic continued to have a significant 
and unpredictable impact upon the Group and the executive 
KMP, especially in the first half of the 2022 financial year where 
Kmart Group and Officeworks were materially impacted. Similar to 
the 2021 financial year, the Board set the initial scorecard targets but 
resolved to review the financial targets towards the end of the year 
once the extent and impact of the continuing disruption was clearer. 
Final financial targets were subsequently established in December 
2021, based on the actual results up to the end of October 2021 
ahead of the important Christmas and holiday trading period. As 
such they did not factor in the impact associated with the Omicron 
variant that affected the performance of the retail divisions to 
February 2022.  

During the year, executive KMP have continued to navigate the 
extraordinary challenges, while continuing to look after our people 
by maintaining a focus on the total recordable injury frequency rate 
(TRIFR) as well as providing additional support measures, including 
additional paid leave, to team members impacted by COVID-19. 
Despite the ongoing challenges from the pandemic, the Board is 
pleased that the Group delivered solid financial results for the year 
while continuing to invest in its businesses and teams for the future.   

Secondly, in June 2021 the Group announced a significant 
investment in data and digital ecosystem development that would 
impact operating results across the Group by an amount of 
approximately $100 million. This was a strategic move critical to 
long-term shareholder value through maintaining and enhancing the 
Group's digital retail offerings, as consumers are noticeably seeking 
deeper digital engagement. Further, data analytics is an increasingly 
important driver of business operations and efficiency. This activity 
was undertaken at a Group level and hence did not impact 
divisional earnings. 

The Board believes that the successful development and 
implementation of a market-leading Group ecosystem requires an 
adjustment to the company’s ways of working from both operational 
and behavioural perspectives. To emphasise the importance of 
this initiative and ensure appropriate focus to mobilise our teams 
to deliver the necessary progress and pace, the Board approved 
changes to the performance measures in the 2022 financial year 
Key Executive Equity Performance Plan (KEEPP) scorecards. 
The Board allocated Group ecosystem performance measures 
(including data and digital initiatives) a 15 per cent weighting in 
each participant’s scorecard, and adjusted the weightings for other 
outcomes as follows:

Measures

Financial

Safety

Ecosystem

Individual performance objectives

Long-term 
weighting (%)

2022 adjusted 
weighting (%)

60

10

-

30

55

10

15

20

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KEEPP REMUNERATION FRAMEWORK

Wesfarmers is committed to achieving long-term alignment between 
the interests of its shareholders and those of management and for 
this to be achieved in a transparent way. The Board continues to 
be satisfied that the KEEPP is fit for this purpose. It provides strong 
alignment between shareholder outcomes and the executive KMP 
remuneration. This is due to two core features:

 – 100 per cent of variable remuneration is delivered in equity for the 
Group Managing Director and Group Chief Financial Officer (the 
portion is slightly lower for other executive KMP). This equity is 
restricted for up to six years, thereby directly linking shareholder 
value and the value of current and prior year share grants; and

 – At least 50 per cent of all share awards are further performance 
tested over a four year period subsequent to grant against a 
range of measures including the extent of Wesfarmers total 
shareholder return (TSR) performance relative to that of the 
S&P/ASX 100. This relative TSR portion has been progressively 
increased over time and is currently 80 per cent for the 
Group Managing Director and Group Chief Financial Officer and 
50 per cent for the other executive KMP. This further adds to 
long-term alignment between management and shareholders. 

We believe this framework - which is unique to Wesfarmers - has 
delivered (and continues to deliver) alignment between shareholders 
and management.

Further, during the year, the Board considered the adequacy and 
appropriateness of the extent to which environmental, social and 
governance (ESG) considerations are taken into account in relation 
to the remuneration outcomes of the executive KMP. Importantly, 
we consider that the alignment of employee equity against ESG 
considerations is appropriately integrated into remuneration 
outcomes over the long term given our strong emphasis on equity 
under the KEEPP. The Board understands that the valuation of 
the company will reflect investors’ view of our ESG strategy and 
commitments, and our progress towards achieving these. This 
will then have a direct impact upon realised remuneration under 
the KEEPP. For example, the use of long-dated equity provides a 
long-term link between the share price and remuneration outcomes 
for the executive KMP, and the relative TSR performance test at 
the end of the four-year performance period directly impacts the 
number of shares that can vest under the KEEPP. Short-term 
ESG-related performance measures are included within the annual 
KEEPP scorecards and, once sufficient progress has been achieved, 
these performance measures are transitioned out of the KEEPP 
scorecards and variable remuneration framework and into ‘day job’ 
responsibilities. 

The current approach of increased disclosure around scorecard 
assessment will continue to aid investors to better judge both 
the short-term and long-term ESG activities and assessment of 
performance. Further information is provided in section 4.

WESFARMERS' PERFORMANCE IN 2022 AND 
REMUNERATION OUTCOMES

In what has been a challenging year, the Group's financial results 
were solid, aided by strong sales and earnings growth in the second 
half. The financial outcomes for the Group are pleasing as during the 
financial year we have:

Remuneration report

 – continued to provide support to team members throughout 

COVID-19 and its associated challenges without compromise 
to the safety and wellbeing of team members, customers and 
suppliers;

 –

suffered a loss of store trading days due to trading restrictions 
or closure, with around 34,000 store trading days impacted 
by trading restrictions in the first half, representing almost 
10 per cent of total store trading days for the year;

 – continued to invest in future opportunities across the Group 

- in particular the acquisition of API and associated formation 
of a new Health division, the investment to create OneDigital 
and the successful launch of OnePass, continued progress 
with the Mt Holland lithium project and the Bunnings rollout of 
Tool Kit Depot and acquisition of Beaumont Tiles; and

 –

finished the year strongly with the performance of most divisions 
benefiting from strategic and operational initiatives pursued 
throughout the year.

Digital engagement across all businesses continued to increase and 
total online sales across the Group, including the Catch marketplace, 
increased to $4.0 billion.

The Board is pleased with the progress made over the 2022 
financial year regarding the creation of the Group ecosystem, the 
establishment of a shared data platform and the successful launch 
of the OnePass membership program. While the Board recognises 
the work in 2022 is the beginning of the journey, the outcomes so far 
have been pleasing and represent a material level of change.

Consistent with the 2021 financial year, the Board applied the 
reported financial results for executive remuneration purposes. 
Further, following consideration, the Board did not use discretion to 
adjust any calculated remuneration outcomes as it considered these 
to be fair and reasonable. Considering the business performance 
over the 2022 financial year alongside the individual contributions 
from each of the executive KMP, the Board has approved above 
target KEEPP outcomes, as discussed below, and set out in more 
detail in sections 5.2 and 5.3.

Group Managing Director and Group Chief 
Financial Officer

For the Group Managing Director and the Group Chief Financial 
Officer, the financial component (measured against profit and return 
on equity targets for combined results for the Group as a whole, 
including all of the divisions) exceeded the stretch performance 
targets set by the Board and therefore the maximum KEEPP award 
was made for each in respect of this component.

As mentioned above, management also continued to effectively 
manage the COVID-19 situation, reshape the portfolio and invest 
for future opportunities. TRIFR for the Group improved from 9.6 to 
9.2 which was above the threshold level of performance set by the 
Board in the KEEPP scorecards. 

The total 2022 KEEPP awards represent 91.4 per cent and 
88.6 per cent of the Group Managing Director's and the 
Group Chief Financial Officer's maximum variable remuneration 
opportunity respectively.

Divisional executive KMP

The Board awarded KEEPP outcomes for our divisional executive 
KMP reflecting the financial performance and TRIFR outcomes of 
the specific divisions led by the executives, as well as each executive 
KMP’s individual performance. The total 2022 KEEPP awards 
represent 83.3 per cent and 71.6 per cent of the Managing Director, 
Bunnings Group's and the Managing Director, Kmart Group’s 
maximum variable remuneration opportunities respectively.  

Vesting of prior year awards

Following 30 June 2022, the Board assessed the vesting outcomes 
of the 2018 KEEPP Performance Shares against the performance 
conditions set for each participant.

Over the four-year performance period, Wesfarmers Limited shares 
achieved very strong, top quartile performance with a TSR of 77.5 
per cent, placing it at the 87th percentile relative to peer companies 
in the S&P/ASX 100. As a result, the component subject to the 
relative TSR performance condition vested in full. The Board also 
assessed that the Group Managing Director and the Group Chief 
Financial Officer performed strongly in relation to their portfolio 
management and investment outcomes and strategic components 
over the four-year period, with greater weight placed on the earlier 
years. The assessment resulted in vesting of the two components at 
90.0 per cent and 85.0 per cent respectively. Further details of these 
results are provided in section 5.4.

Fixed annual remuneration for executive KMP

In July 2022, as part of the annual remuneration review cycle, 
the Board considered the fixed remuneration for the executive 
KMP. No changes were made to fixed remuneration for the 2023 
financial year. As disclosed in the 2021 Remuneration Report, in July 
2021 the Board approved increases to the fixed remuneration for 
the executive KMP other than no change for the Group Managing 
Director whose fixed remuneration has remained unchanged since 
appointment in 2017. No further changes were made to fixed 
remuneration in the 2022 financial year. Further details are provided 
in section 5.1.

NON-EXECUTIVE DIRECTOR FEES

In June 2022, the Board reviewed the fees payable to the 
non-executive directors having regard to benchmark data, market 
position and relative fees. Following this review, no changes were 
made to the fees for the 2023 financial year.  

Thank you for your continued support of Wesfarmers. We look 
forward to our ongoing engagement with you and sharing in the 
company's future success. 

Mike Roche

– Chairman, Remuneration Committee

Wesfarmers 2022 Annual Report

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Remuneration report (audited)

1. 2022 Key management personnel
2. Overview of Group performance
3. Remuneration governance

3.1 Role of the Board
3.2 Role of the Remuneration Committee
3.3 Culture and risk management
3.4 Responsibility for determining remuneration of non-executive directors
3.5 Use of remuneration consultants

Executive remuneration

4. Executive KMP remuneration framework and policy
5. Executive KMP remuneration

5.1 Fixed annual remuneration
5.2 2022 KEEPP award outcomes
5.3 Details of the 2022 KEEPP annual scorecards
5.4 2018 KEEPP awards that vested during the 2022 financial year
5.5 Performance summary for the Group Managing Director
5.6 Executive KMP remuneration (statutory presentation)
5.7 Details of equity allocated during the 2022 financial year
5.8 Executive KMP share ownership
5.9 Executive service agreements

Non-executive director remuneration

6. Non-executive directors

6.1 Overview of non-executive director remuneration policy and arrangements
6.2 Non-executive director fees and other benefits
6.3 Non-executive director remuneration
6.4 Non-executive director share ownership

Other remuneration information

7. Further information on remuneration

7.1 Share trading restrictions
7.2 Other transactions and balances with key management personnel

8.

Independent audit of remuneration report

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1.  2022 KEY MANAGEMENT PERSONNEL

The key management personnel (KMP) include the directors of Wesfarmers Limited and the executive KMP (the Group Managing Director and 
the Group Chief Financial Officer and those executives who have authority and responsibility for planning, directing and controlling the activities 
of a major profit generating division of Wesfarmers). The KMP for the 2022 financial year are as follows:

Current directors

Michael Chaney AO

Vanessa Wallace

Jennifer Westacott AO

The Right Honourable Sir Bill English KNZM

Mike Roche

Sharon Warburton

Anil Sabharwal

Alison Watkins AM`

Alan Cransberg

Former director

Wayne Osborn

Current executive KMP

Rob Scott, Group Managing Director

Anthony Gianotti, Group Chief Financial Officer

Ian Bailey, Managing Director, Kmart Group

Michael Schneider, Managing Director, Bunnings Group

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These directors were members of the Board of Wesfarmers Limited 
throughout the whole of the 2022 financial year.

Ms Watkins became a member of the Board of Wesfarmers Limited 
on 1 September 2021.

Mr Cransberg became a member of the Board of 
Wesfarmers Limited on 1 October 2021.

Mr Osborn retired from the Board of Wesfarmers Limited on 
21 October 2021.

These executive KMP held their positions throughout the whole of 
the 2022 financial year.

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Directors' report

Remuneration report (audited)

2.  OVERVIEW OF GROUP PERFORMANCE

Wesfarmers delivered solid financial results for the 2022 financial year. The Group delivered strong sales and earnings growth in the second half  
of the year following the significant impact of COVID-19 during the first half of the year which included weeks where almost half of the Group’s 
retail stores were either subject to trading restrictions or closed. Trading results improved significantly as restrictions eased and Wesfarmers 
delivered strong NPAT growth of 13.1 per cent for the second half, excluding significant items in the prior year.

Bunnings and WesCEF delivered pleasing results for the year. Bunnings continued to demonstrate the resilience of its operating model and 
ability to deliver growth through a range of market conditions. Record earnings in WesCEF reflected elevated global commodity prices and 
continued strong operating performance. It was also pleasing to report continued improvement in the performance of Wesfarmers Industrial and 
Safety. Relative to the Group’s other divisions, Kmart Group was the most materially impacted by trading restrictions in the first half. Results for 
Kmart Group improved significantly in the second half, with Kmart and Target delivering strong second half earnings growth of 19.4 per cent, 
benefiting from actions taken in recent years to optimise the store network. Lower earnings in Officeworks for the year reflected the impact of 
trading restrictions, as well as increased investment in the supply chain, data and digital capabilities and to support the launch of new products.

The Group established new businesses and continued to invest in its existing operations, developing platforms to support long-term  
shareholder returns. Wesfarmers established the Health division in March 2022 following the acquisition of Australian Pharmaceutical Industries 
Ltd (API) and continued to progress the development of a market-leading data and digital ecosystem, with the launch of Wesfarmers OneDigital 
in the second half. Good progress also continued on the construction of the Mt Holland lithium project.

The Group reported statutory NPAT of $2,352 million for the 2022 financial year.  

Five-year statutory results

Financial year ended 30 June (as reported)1

Net profit after tax (NPAT) ($m)

NPAT (excluding significant items) ($m)2

Return on equity (ROE) (rolling 12 months) (%)3

ROE (excluding significant items) (rolling 12 months) (%)2

Earnings per share (EPS) (cents)

EPS (excluding significant items) (cents)2

2018

2019 

1,197

5,510

2,772

2,339

2020

1,697

2,075

5.24

38.74,5

17.84

11.7

19.2

22.1

2021

2,380

2,421

25.84

26.1

105.84

487.24

150.04

210.44

245.1

206.8

183.4

214.1

2022

2,352

2,352

29.4

29.4

207.8

207.8

1  The Group applied AASB 16 Leases (AASB 16) from 1 July 2019 using the modified retrospective approach. Under this approach, comparatives were not restated. 
2  These are considered non-IFRS measures. 2021 post-tax significant items include restructuring costs of $41 million in the Kmart Group. 2020 post-tax significant 
items include the gain on sale of Wesfarmers' 10.1 per cent interest in Coles Group Limited (Coles) completed in February 2020 (4.9 per cent) and March 2020 
(5.2 per cent) of $203 million, gain from revaluation of the retained Coles investment of $154 million and the benefit from the finalisation of tax positions on prior year 
disposals of $83 million, offset by the $298 million non-cash impairment of the Wesfarmers Industrial and Safety division, and the $520 million non-cash impairment 
of the Target brand name and other assets and associated restructuring costs and provisions in the Kmart Group. 2019 post-tax significant items include $2,264 
million gain on demerger of Coles, $645 million gain on sale of Bengalla, $244 million gain on sale of KTAS, $120 million gain on sale of Quadrant Energy, partially 
offset by a $102 million provision for supply chain automation in Coles. 2018 post-tax significant items include impairments of $1,323 million relating to BUKI and 
Target, as well as the $375 million loss on sale of BUKI and $123 million gain on sale of Curragh Coal Mine. The Board exercises its discretion in determining 
whether these significant items are adjusted for when determining remuneration outcomes.

3  This is considered a non-IFRS measure.
4  2018, 2019, 2020, 2021 EPS and ROE include the items outlined in footnote 2 above.
5  2019 ROE was 17.7 per cent when adjusted to remove the increase in the ROE as a result of the Coles demerger.

Five-year shareholder returns

Financial year ended 30 June (as reported)

Total dividends per share (determined) (cents)

Closing share price ($ as at 30 June)1

Adjusted closing share price ($ as at 30 June)2

Five-year rolling Total Shareholder Return (%, per annum)3

ASX 100 five-year rolling Total Shareholder Return (%, per annum)3

2018

2019 

2020

223

2784

1705

49.36

36.16

35.26

36.16

9.8

9.8

9.8

8.9

44.83

44.83

15.9

5.8

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178

59.10

59.10

21.5

11.2

2022

180

41.91

41.91

13.8

7.1

1  The opening share price on 1 July 2017 was $40.06.
2  The adjusted closing share price for 2018 excludes the proportional impact of the Coles demerger, based on the volume-weighted average share price of Coles 

Group Limited on the first five days of trading post-listing. The adjusted opening share price on 1 July 2017 was $28.61.

3  Source: Bloomberg.
4  2019 total dividends per share includes the 100 cent special dividend.
5  2020 total dividends per share includes the 18 cent special dividend reflecting the distribution of profits on the sale of the 10.1 per cent interest in Coles. 

3.  REMUNERATION GOVERNANCE 

3.1  Role of the Board

The Board is responsible for setting remuneration policy and determining non-executive director, executive director and executive KMP 
remuneration and ensuring that policy is aligned with the Group's purpose, values, strategic objectives, and risk management framework. In 
addition, the Board is responsible for approving the remuneration of and overseeing the performance review of the Group Managing Director, 

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for approving the remuneration of the other KMP and approving all targets and performance conditions set under the executive KMP variable 
remuneration framework, being the Key Executive Equity Performance Plan (KEEPP). 

The Board delegates responsibility to the Remuneration Committee for reviewing and making recommendations to the Board on these matters. 
The Board has powers under the terms of the Group's incentive plans to calculate the achievement of performance conditions, including to 
decrease or increase variable remuneration outcomes, and make malus or clawback adjustments. The Board may exercise these powers 
when approving variable remuneration award outcomes to ensure that they are fair and reasonable and may use this discretion to decrease or 
increase the outcome as it considers appropriate. 

The Board has regular meetings with each of the executive KMP during the year to discuss ongoing performance.

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The Remuneration Committee makes recommendations to the Board regarding all aspects of executive KMP remuneration. This includes 
making recommendations in relation to the targets (including threshold and stretch performance targets) to be included in the KEEPP 
scorecards and in relation to setting performance conditions that attach to Performance Shares (both the financial conditions and the other 
non-financial performance conditions). As part of setting performance conditions on the Performance Shares for the divisional managing 
directors (currently the Managing Director, Kmart Group and the Managing Director, Bunnings Group), the Remuneration Committee makes 
recommendations to the Board on whether the conditions should be set at a divisional or business level. The Group Managing Director provides 
updates and makes recommendations to the Remuneration Committee on these matters in relation to his direct reports throughout the year, but 
is not involved in making recommendations in relation to his own remuneration. The Group Managing Director provides formal updates to the 
Remuneration Committee on a six-monthly basis. To inform the Board and Remuneration Committee, and to assist with their decision-making 
processes, additional information and data is sought from management and remuneration consultants, as required. 

The Audit and Risk Committee Chairman attends the Remuneration Committee meetings and is formally involved in the remuneration outcome 
recommendations, ensuring that there is a tight linkage between behaviour, risk management and remuneration outcomes.

Further information regarding the objectives and role of the Remuneration Committee are contained in its charter, which is available in the 
corporate governance section of the company’s website at www.wesfarmers.com.au/cg. 

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3.3  Culture and risk management

The Board believes that embedding the right culture and ensuring that the Group operates within effective risk management protocols are 
enablers of strategic execution over the long term. Wesfarmers considers that it can only achieve its primary objective of generating satisfactory 
returns for shareholders over the long term by: looking after its team members, customers and suppliers; taking care of the environment and 
making sure that the Group is environmentally conscious in all of its activities; by acting ethically and honestly in all of its dealings; and by making 
meaningful contributions to the communities in which the Group operates. 

The Board, in consultation with the Audit and Risk Committee, considers these principles in setting the executive KMP remuneration framework, 
which in turn has a positive impact upon the Group and therefore shareholder outcomes. This includes overseeing that executive KMP 
remuneration outcomes are aligned with the Board's approach to risk management. 

Fixed remuneration levels are set so as to sufficiently reward the executive KMP for performing the key requirements of their roles, having regard 
to the competitive environment for talent and other internal and external factors. 

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In the annual KEEPP scorecards, the financial and safety performance measures, the Group ecosystem performance measures (including data 
and digital initiatives) and the individual performance objectives set by the Board are designed to drive strategic outcomes that benefit the Group 
and its shareholders. The Board takes a balanced approach to setting the performance range for objectives, including setting the minimum and 
maximum performance targets, as well as in assessing the incentive outcomes. The maximum outcome under the KEEPP scorecards can only 
be achieved if all of the financial and safety performance measures, the Group ecosystem performance measures (including data and digital 
initiatives) and the individual performance objectives are assessed at stretch performance and the Board judges this outcome to be fair and 
reasonable. Section 5.3 contains further information on the KEEPP scorecards for the 2022 financial year. 

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Targets set by the Board are assessed to be suitably risk-adjusted in accordance with the risk management framework so as to avoid 
inappropriate customer, team member or financial risk in the pursuit of the KEEPP outcomes. In assessing performance against the annual 
KEEPP scorecards, the Board also considers how the outcomes have been achieved, for example, through the demonstration of behaviours 
aligned with appropriate ethics, values and culture, including a focus on team member safety and wellbeing, and consideration of any actions 
impacting Group reputation.

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3.4  Responsibility for determining remuneration of non-executive directors 

The Board is responsible for assessing non-executive director fees, assisted by the Remuneration Committee. Each year the non-executive 
director fees, including committee fees, are benchmarked externally against Australian companies of a comparable size and complexity. In 
the event of any proposed increase in fees, including committee fees, a reasonableness opinion is obtained from an external remuneration 
consultant. The Remuneration Committee and the Board (or only the Board if this relates to Remuneration Committee fees) consider this 
benchmarking and external remuneration consultant opinion, along with other factors such as the reasonableness of any change to the fees in 
the context of the external environment and any regulatory changes impacting Board accountability, before proposing any increase in fees. See 
section 6 for further information on non-executive director remuneration. 

3.5  Use of remuneration consultants

No remuneration recommendations as defined in section 9B of the Corporations Act 2001 were obtained during the financial year ended 
30 June 2022.

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Directors' report

Remuneration report (audited)

Executive remuneration

4.  EXECUTIVE KMP REMUNERATION FRAMEWORK AND POLICY

Wesfarmers’ primary objective is to provide satisfactory returns to shareholders over the long term. The guiding remuneration principles are 
focused on driving leadership performance and behaviours consistent with this objective, as well as with the Wesfarmers Way (as explained on 
page 15 of this annual report) and the Group’s overall strategies.

Our guiding remuneration principles

1

2

3

4

5

6

Attract, motivate and retain world-class talent and outstanding people to drive outcomes

Align executive and stakeholder interests through share ownership while strengthening focus on Group results through 
awards of long-term, at-risk deferred equity

Be transparent and fit for purpose, recognising our operating model of divisional autonomy by linking rewards to the 
achievement of objectives for which executives are directly accountable and responsible while retaining a direct link to 
Group performance

Recognise and reward high performance with a strong focus on the long term

Align effective risk management and demonstration of appropriate behaviours, ethics and values with rewards

Drive strategic achievement which aligns with long-term shareholder interests

(a)  Remuneration framework

The remuneration framework for the executive KMP comprises fixed annual remuneration (FAR) and variable at-risk remuneration (through 
participation in the KEEPP). Total remuneration is set at a competitive level to attract, retain and engage key talent, with FAR set at a level that is 
appropriate for the requirements of the role.

Fixed annual remuneration

FAR comprises salary and other benefits (including statutory superannuation). FAR, along with the other elements of executive remuneration, 
including total remuneration and each component of remuneration, is benchmarked to our external peers and levels vary between the executive 
KMP. FAR for each executive KMP is based upon: role and responsibility; business and individual performance; internal and external relativities; 
and contribution, competencies and capabilities. FAR is not varied by reference to inflation or indexation as a matter of course. Changes are based 
on merit, a material change in role or responsibility, the market rate for comparable roles varying materially, or as a result of internal relativities, while 
protecting the significant investment of Wesfarmers in developing its key talent.

Variable remuneration - KEEPP

Opportunity
The KEEPP is a single total incentive established for each executive KMP, 
with each cycle operating over seven years.

The quantum of the KEEPP award is determined against an individually 
personalised 12-month scorecard, split into financial and safety 
performance measures, Group ecosystem performance measures 
(including data and digital initiatives) and individual performance objectives, 
weighted 55 per cent, 10 per cent, 15 per cent and 20 per cent 
respectively. The scorecard sets out the threshold, at target and stretch level 
of performance required for each measure.

The Remuneration Committee and the Board set the scorecards at the 
beginning of the financial year following consultation with the Group 
Managing Director (however the Group Managing Director is not involved 
in setting his own KEEPP scorecard). The KEEPP award can vary up to 
a maximum of 300 per cent of FAR and is delivered through up to three 
vehicles. See section 5.3 for further information on the KEEPP scorecards.

Delivery vehicles
Cash: There is no cash component for the Group Managing 
Director and the Group Chief Financial Officer, with their awards 
delivered solely in equity. For the other executive KMP, cash is zero 
for awards at or below 100 per cent of FAR. For awards above this 
level, a maximum of 30 per cent of FAR may be awarded in cash. 

Equity: KEEPP equity awards are delivered as long-dated equity, 
with the ‘at target’ awards split equally between Deferred Shares 
and Performance Shares.

Deferred Shares are restricted up to a total of six years once granted 
and can be subject to additional conditions if set by the Board at 
allocation.

Performance Shares are subject to further performance conditions 
over a future four-year performance period. The Board has discretion 
to adjust the performance conditions in appropriate circumstances, 
so that participants are not unfairly advantaged or disadvantaged. 

Where the KEEPP scorecard process results in an allocation of Performance Shares lower than 100 per cent of FAR (or 85 per cent of FAR for the 
divisional managing directors), additional Performance Shares (which vest only to the extent the performance conditions are met over the following 
four years) will be allocated to achieve that level. This aims to ensure variable remuneration is less dependent on performance over the initial 
12-month period and more tied to performance over time.

Determining outcomes

The financial and safety performance measures are assessed after the preparation and audit of the relevant results each year. The Group ecosystem 
performance measures and individual performance outcomes are simultaneously assessed after a review against the measures and objectives set. If 
performance against any measure or objective is assessed as below threshold, no outcome is awarded for that measure or objective.

Board consideration of other factors

Prior to finalising the scorecard outcome, the Board calibrate the scorecard result with the personal performance and behaviours of each participant 
alongside the consideration of whether the calculated outcome is fair and reasonable, including that it is not inappropriate or simply formulaic. 

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(b)   How environmental, social and governance (ESG) issues are reflected in the remuneration framework

As set out in the Wesfarmers Way on page 15 of this annual report, Wesfarmers is committed to understanding and responsibly managing 
the ways it impacts the communities and environments in which it operates. This includes recognising and addressing its ESG-related 
responsibilities and reflecting these within the remuneration framework for the executive KMP, both over the short and long term.

The Board sets the expectation that progress towards a number of Wesfarmers’ ESG-related goals and targets has evolved to become a core 
requirement of each executive KMP role and this is reflected in the existing level of FAR they are paid for that role.  

In relation to variable remuneration, the Board has considered both the long-term position as well as the annual remuneration cycle. The 
Board has always sought to align executive remuneration with the interests of all stakeholders and has a heavy share component of variable 
remuneration awards - in the case of the Group Managing Director and the Group Chief Financial Officer, 100 per cent of variable remuneration 
is a share-based award.

Based upon the company’s sustainability disclosure, the Board is confident that, over the long term, shareholders and investors reflect their 
assessment of the company’s progress in relation to ESG-related issues within the Wesfarmers share price. Therefore, by delivering the KEEPP 
awards in long-dated equity it ensures remuneration outcomes have a long-term link to ESG issues. This is particularly the case because:

•  50 per cent of the share awards are made in the form of Deferred Shares whose value is tied to absolute share price performance and 

may be subject to any additional vesting conditions set by the Board; and

• 

the remaining 50 per cent of the share awards are made in the form of Performance Shares which vest subject to role-specific 
performance conditions, but which have at least a 50 per cent weighting to relative total shareholder return (rTSR) performance. This 
means that it incorporates the market’s judgement of ESG-related progress Wesfarmers is making relative to others.

To ensure continued progress against ESG goals in the short term, and to incorporate the pace of progress, the Board includes targets against 
the most significant ESG-related issues within the annual KEEPP scorecards, relevant to the role of each executive KMP. This means that the 
KEEPP scorecard outcomes are approved only after an assessment of performance against the most significant ESG issues and do incorporate 
a direct economic link to such outcomes. As set out in section 3.3, in assessing the annual KEEPP scorecards, the Board also considers how 
the outcomes have been achieved. This includes further consideration of any actions impacting Group reputation, such as in relation to ESG 
issues, to ensure that the final outcome is fair and reasonable.

The Board is committed to improving the ability of stakeholders to understand the linkages between sustainability and remuneration through 
enhanced disclosures.

(c)  KEEPP life cycle 

The chart on the following page shows the life cycle for each element of the KEEPP. The 2021 KEEPP award follows this life cycle and was 
awarded in the 2022 financial year, based on performance in the 2021 financial year. For further information on the timing for the 2021 KEEPP 
award, see section 5.7.

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Wesfarmers 2022 Annual Report

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Remuneration report (audited)

• 

12-month period (July to June)

Performance  
assessment

Performance of each member of the executive KMP is assessed over the 12-month performance period 
ending 30 June against a scorecard that has financial performance measures (55 per cent weighting), 
safety performance measures (10 per cent weighting), Group ecosystem performance measures (including 
data and digital initiatives) (15 per cent weighting) and individual performance objectives specific to the role 
(20 per cent weighting). 

Award 
determination 
assessment

Deferred Shares  
and Performance 
Shares allocated

Final number 
of vested shares 
determined

If the assessment determines that performance on any measure is below threshold, the amount of the 
award for that measure is zero. If performance for a measure is assessed as at threshold, then the award 
is 50 per cent of the target opportunity for that measure. If performance for a measure is assessed as at or 
above threshold, there is a straight-line calculation up to the target level and then a straight-line calculation 
up to the maximum level. The target opportunity across all measures is 200 per cent of FAR and the 
maximum award opportunity is 300 per cent of FAR.

Once the scorecard is assessed and the award amount is calculated, the Board then considers whether 
the proposed award is fair and reasonable in the circumstances. This assessment is a deliberate exercise 
of Board discretion to determine whether modifiers should decrease or increase the amount of the award. 
KEEPP awards are then delivered as follows:

•  Cash: The Group Managing Director and the Group Chief Financial Officer receive all of their 

KEEPP awards in equity and are not eligible to receive any cash under the KEEPP. For the other 
executive KMP, the amount of the cash component is zero where the award is equivalent to or below 
100 per cent of FAR. An award above that level is paid in cash up to a maximum of 30 per cent of 
FAR, with the remainder delivered in equity. Any cash is generally paid in August, following the release 
of Wesfarmers’ full-year results.

•  Equity: Equity is allocated equally in unquoted Deferred Shares and Performance Shares at no cost 
to participants. The number of shares allocated is determined using a face value calculated based 
upon the 10-day, volume-weighted average price (VWAP) of Wesfarmers shares typically over the 
period following the full-year results announced in August of that year. Where required, the 10-day 
period will be delayed to include shares trading ex dividend or ex entitlement only. The 10-day period 
for the 2021 KEEPP award was 18 November 2021 to 1 December 2021, recognising the shares 
commenced trading ex capital return entitlement on 18 November 2021. The allocation of equity 
generally occurs shortly after the Annual General Meeting. While the equity is unquoted, the payment of 
any dividends during the vesting period is delayed. Upon the vesting or forfeiture of the Deferred Shares 
and the Performance Shares, the company will apply for the associated unquoted shares to be quoted 
on the ASX. Once quoted, the delayed dividend is paid to the participant on the vested shares only, with 
no dividends ever having been paid to the participant on shares subsequently forfeited. 

To reduce dependence on performance over the initial 12-month period, where the scorecard process 
results in an allocation of Performance Shares lower than 100 per cent of FAR (or 85 per cent of FAR for the 
divisional managing directors), additional Performance Shares (which vest only to the extent they meet the 
performance conditions over the following four years) will be allocated to achieve that level.

• 

Deferred Shares: 12-month forfeiture and four-, five- and six-year trading restrictions

Deferred Shares: Deferred Shares are subject to a 12-month service condition (the forfeiture period) and 
any additional conditions that may be set by the Board at the date of allocation and are subject to trading 
restrictions for four, five or six years. Deferred Shares are granted as newly issued, unquoted shares.  An 
application to quote the shares is made upon vesting or forfeiture of the shares. Deferred Shares are held in 
trust and can only be transferred to the executive KMP once all trading restrictions and any other conditions 
are met. For the 2021 Deferred Shares, one-third will be released from the trading restriction in August 2025, 
one-third will be released in August 2026 and the remainder released in August 2027.

• 

Performance Shares: four-year performance period

Performance Shares: Performance Shares remain at risk and will vest only to the extent further 
performance conditions are met when tested over a future performance period. Performance Shares are 
granted as newly issued, unquoted shares.  An application to quote the shares is made upon vesting or 
forfeiture of the shares. Performance Shares are held in trust and can only be transferred to the executive 
KMP once vested. The performance conditions relating to the 2021 Performance Shares are role-specific 
and will be tested over a four-year period ending 30 June 2025. The Performance Shares will only vest to 
the extent that these conditions are met. 

• 

All vesting conditions are complete on the equity after four years and all trading 
restrictions have ended after six years under each KEEPP award

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Remuneration report (audited)

(d)  Remuneration mix 

The charts below show each component of the remuneration framework for the executive KMP as a percentage of total remuneration.  

Group Managing Director and Group Chief Financial Officer

Total target remuneration

Total maximum remuneration

Fixed annual remuneration

33.3%

At-risk remuneration

66.7%

   KEEPP Performance Shares 33.35%

  KEEPP Deferred Shares

33.35%

Fixed annual remuneration

25.0%

At-risk remuneration

75.0%

   KEEPP Performance Shares

37.5%

  KEEPP Deferred Shares

37.5%

Other Executive KMP (divisional managing directors)

Total target remuneration

Total maximum remuneration

Fixed annual remuneration

33.3%

At-risk remuneration

66.7%

   KEEPP Performance Shares 28.35%

  KEEPP Deferred Shares

28.35%

  KEEPP Cash

10.0%

Fixed annual remuneration

25.0%

At-risk remuneration

75.0%

   KEEPP Performance Shares 33.75%

  KEEPP Deferred Shares

33.75%

  KEEPP Cash

7.5%

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5.  EXECUTIVE KMP REMUNERATION

5.1  Fixed annual remuneration

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After consideration in July 2022, the Board does not intend to make changes to fixed remuneration for any member of the executive KMP in the 
2023 financial year.

2022 financial year

As reported in the 2021 Remuneration Report, in July 2021, the Board undertook a review into the remuneration for the executive KMP. 
Following this review the Board concluded there was a need to increase the FAR for the Group Chief Financial Officer, Managing Director, 
Kmart Group and Managing Director, Bunnings Group. These changes were approved in July 2021 and took effect from 1 October 2021. These 
increases are the first changes in FAR for the executive KMP since 2017 other than for the Managing Director, Kmart Group who received an 
increase in FAR upon his appointment in November 2018. There was no change to the FAR for the Group Managing Director.

The Board approved the following FAR increases for the executive KMP:

•  Mr Gianotti’s FAR increased from $1,350,000 to $1,450,000 per annum;

•  Mr Bailey’s FAR increased from $1,350,000 to $1,550,000 per annum; and

•  Mr Schneider’s FAR increased from $1,500,000 to $1,700,000 per annum.

There were no other changes to FAR for the executive KMP in the 2022 financial year.

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Wesfarmers 2022 Annual Report

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Remuneration report (audited)

5.2  2022 KEEPP award outcomes

The 2022 KEEPP award outcomes relate to performance from 1 July 2021 to 30 June 2022. The table below sets out specific information 
relating to the actual award outcomes for the 2022 financial year.

Balance available for allocation

for Deferred 
Shares

for Performance 
Shares

for cash 
award

($)

($)

3,427,083

Not eligible

1,926,083

Not eligible

1,431,816

1,868,731

465,000

510,000

Percentage of  
maximum 2022 KEEPP  
opportunity awarded 

Percentage of  
maximum 2022 KEEPP  
opportunity forfeited 

%

91.4

88.6

71.6

83.3

%

8.6

11.4

28.4

16.7

Name

R G Scott

A N Gianotti

I Bailey

M D Schneider

($)

3,427,083

1,926,083

1,431,816

1,868,731

The cash component for the 2022 KEEPP award is expected to be paid to Mr Bailey and Mr Schneider on 30 August 2022. The 
Deferred Shares and Performance Shares are expected to be allocated in November 2022 once performance conditions are set, subject to 
shareholder approval in the case of the Group Managing Director. Details of these grants will be provided in the 2023 Remuneration Report.

5.3  Details of the 2022 KEEPP annual scorecards

The 2022 KEEPP scorecards comprise financial and safety performance measures, Group ecosystem performance measures (including 
measures relating to the Group's data and digital initiatives) and individual performance objectives relevant to the role of each executive KMP. 
Scorecard financial targets are set in relation to the annual budgets and the safety targets are generally based upon an improvement on 
the previous year’s result. The Group ecosystem targets (including data and digital initiatives) and the individual performance objectives are 
customised based upon the participant’s role and the specific circumstances and strategic priorities of the Group and/or division, as appropriate. 
Where the Board considers that it is appropriate to do so, the scorecard targets will be adjusted so that participants are not unfairly advantaged 
or disadvantaged, for example, following portfolio management activity.

Following the announcement in June 2021 of the planned investment in the creation of the Group ecosystem, the Board approved that the 
measures included in the 2022 KEEPP scorecards should have an appropriate focus upon the creation and facilitation of the ecosystem. 
This was to ensure that the executive KMP are incentivised to deliver suitable returns from the creation of the ecosystem and other data and 
digital initiatives, noting that the outcome of the 2022 KEEPP scorecards sets the amount of long-dated and performance equity delivered 
under the 2022 KEEPP. As a result, the Group ecosystem measures (including data and digital initiatives) have a 15 per cent weighting in the 
2022 KEEPP scorecards. The weighting on the financial measures has reduced from 60 per cent to 55 per cent and the weighting on the 
individual performance objectives has been reduced from 30 per cent to 20 per cent to allow for the inclusion of the separately weighted Group 
ecosystem measures. 

As per the process and timing followed for the 2021 KEEPP scorecard measures, given the continued high levels of uncertainty surrounding 
business performance as a result of the COVID-19 pandemic at the time the relevant budgets were set for the 2022 financial year, the Board set 
initial financial targets based on those budgets but, to avoid unintended remuneration outcomes, determined that the 2022 KEEPP scorecard 
financial targets would be revisited around mid-financial year when there was expected to be more visibility of the impact of COVID-19. This 
enabled the Board to set more meaningful KEEPP scorecard targets for the 2022 financial year to ensure that this resulted in a reasonable but 
still demanding level of performance. The safety targets, Group ecosystem measures and individual performance objectives were set at the 
outset of the 2022 financial year as per the usual practice.

The Board approved the 2022 KEEPP scorecard financial targets in December 2021, based on the actual results up to the end of October 2021 
ahead of the important Christmas and holiday trading period. At the time of the approval, the Group’s businesses had experienced significant 
disruptions and volatility in trading since the beginning of the financial year and it was far from clear how the remainder of the year would unfold. 
For example, the Group had experienced both temporary and extended trading restrictions across different regions including ongoing domestic 
border closures, significant global supply chain disruption and increased costs, higher operational costs associated with COVID-safe practices 
and other costs including wage and leave support to team members. In addition, at the time of the approval, the Omicron variant of COVID-19 
had recently been identified within Australia, with rising community transmission in some states and territories creating further uncertainty 
regarding the coming months. Given the uncertainty, and in line with the approach taken for the 2021 financial year, the Board approved wider 
threshold and stretch performance ranges to apply to the financial measures for the executive KMP, where considered appropriate.

Financial measures (55 per cent weighting)

Group NPAT and ROE were chosen for the Group Managing Director and the Group Chief Financial Officer because they reflect how 
Wesfarmers uses capital to generate earnings, manages total costs within the business and ultimately generates a profit to provide shareholder 
returns. Group NPAT and ROE performance is assessed following the preparation and audit of the annual financial statements. Group NPAT and 
ROE may be adjusted, where the Board considers it appropriate, to ensure that participants are not unfairly advantaged or disadvantaged, for 
example, following portfolio management activity.

Divisional financial measures of EBT, ROC (calculated as divisional EBT divided by divisional rolling 12 months capital employed, where capital 
employed excludes right-of-use assets and lease liabilities), sales growth and, where applicable, gross transaction value (GTV), were chosen for 
the divisional managing directors because they are key financial measures directly linked to accountability at a divisional level that align with the 
Group financial measures and drive successful and sustainable financial business outcomes. Divisional performance is assessed following the 
preparation and audit of the annual financial statements. Similar to Group NPAT and ROE, divisional financial measures may be adjusted, where 
the Board considers it appropriate, to ensure that participants are not unfairly advantaged or disadvantaged, for example, following portfolio 
management activity. 

108

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Remuneration report (audited)

Safety (10 per cent weighting)

Safety performance is measured through the total recordable injury frequency rate (TRIFR) at the Group or divisional level, as relevant to the 
executive KMP, and was chosen to reflect the Group's relentless focus on providing safe workplaces for all team members, in addition to the 
priority placed on the health and safety of the Group's customers and the community. TRIFR performance is assessed following completion of 
the annual sustainability assurance process. 

Group ecosystem measures (including data and digital initiatives) (15 per cent weighting)

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Performance in relation to the Group ecosystem measures is assessed against the success of key strategies within OneDigital including the 
shared data asset and the OnePass membership program as well as the value-add delivered through various data and digital initiatives at both 
the Group and divisional level. These performance measures were chosen to directly incentivise the executive KMP to contribute to and lead 
these initiatives, specifically given their cross-divisional nature. The Group ecosystem measures are designed to maximise Group and divisional 
opportunities within the data and digital environment. During the year, significant investment in and changes to technology systems and 
processes were required to deliver on these strategies. Progress against the Group ecosystem measures is assessed by the Board following a 
review of performance against the specific objectives by the Group Managing Director or Chairman, as appropriate, as part of the performance 
review cycle.

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Individual performance objectives (20 per cent weighting)

The individual performance objectives are split into two categories, comprising business enhancing objectives with 10 per cent weighting, and 
sustainability objectives, including reputation, risk management, people and culture, and climate change-related initiatives, with 10 per cent 
weighting. The individual performance objectives were chosen because they are key focus areas in enabling the Group to achieve its primary 
objective of generating satisfactory returns to shareholders over the long term. Focusing on the strategic priorities set as objectives within 
the KEEPP scorecards will enable our divisions to retain and improve their leading positions in their respective markets as well as generating 
long-term growth. Progress against the individual performance objectives is assessed by the Board following a review of performance against 
the individual performance objectives by the Group Managing Director or Chairman, as appropriate, as part of the performance review cycle. 

Business enhancing objectives and strategies are designed to maximise business and growth opportunities over the long term. Examples of 
business enhancing objectives include assessing growth and investment opportunities and operational optimisation projects.

Sustainability objectives provide a focus on the Group’s licence to operate and include several interrelated areas, for example, Group-wide 
sustainability initiatives such as emissions reduction targets and operational risk controls, including cyber security. Diversity, including gender 
balance, remains a focus as Wesfarmers recognises the importance and value of diverse teams throughout its businesses.

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Wesfarmers 2022 Annual Report

109

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Directors' report

Remuneration report (audited)

a

2022 KEEPP scorecard

2022 KEEPP scorecard  
assessment

+

Consideration of  
other factors

=

Outcome and  
delivery

Financial measures
(55% of target)

Group Managing Director 
Group Chief Financial Officer

•  Group NPAT and ROE

Threshold performance is 
required for both Group NPAT 
and ROE before any award is 
made in respect of the financial 
measures.

Divisional managing directors

•  EBT and ROC1 
•  Sales growth
•  Divisional specific measures  

(Kmart Group only)

Threshold performance is 
required for both EBT and ROC1 
before any award is made in 
respect of these measures. 

Threshold EBT performance is 
also required before any award is 
made in respect of sales growth.

The Managing Director, 
Kmart Group also had a measure 
in relation to Catch GTV. A 
threshold level of performance 
is required for Catch EBT and 
the customer lifetime value to 
cost per acquisition (CLV/CPA) 
ratio before any award is made in 
respect of GTV.

Safety (10% of target) 
Group ecosystem (15% of 
target) 
Individual performance  
objectives (20% of target)

Safety:

•  Group or divisional TRIFR

Threshold performance for 
TRIFR is generally set based 
on the previous year’s result. 
No award will be made 
in respect of the relevant 
safety measure if there is a 
fatality or a critical risk failure 
within a managed entity. 

Group ecosystem:

•  Contribution to the 

success of OneDigital 
goals and specifically 
to the membership 
program, both through the 
OneDigital board and active 
leadership of divisional and 
cross-divisional initiatives. 

Individual performance 
objectives:

Individual performance 
objectives specific to the 
role of each executive 
KMP, where applicable:

•  Business enhancing 
objectives, including 
business growth and 
turnaround/newly acquired 
businesses

•  Sustainability objectives, 
including reputation, risk 
management, people 
and culture, and climate 
change-related initiatives.

•  Remuneration Committee 
and Board, with input 
from the Audit and Risk 
Committee, evaluation 
of each executive 
KMP’s performance and 
behaviours, including 
whether any modifiers 
should apply to the award

•  External environment 

and impact

•  The Board considers 
whether the outcome 
is fair and reasonable, 
not inappropriate or 
simply formulaic

The maximum opportunity 
available is 300 per cent of FAR.

Where the scorecard results in 
an allocation of Performance 
Shares lower than 100 per cent 
of FAR for the Group Managing 
Director or the Group Chief 
Financial Officer, or 85 per cent 
of FAR for the divisional 
managing directors, additional 
Performance Shares (subject 
to performance conditions over 
the following four years) will be 
allocated to achieve that level.

The minimum KEEPP award 
level can still be zero per cent 
of FAR if the Board determines 
this to be appropriate when 
considering other factors.

Final approved KEEPP outcomes 
are delivered as follows:

Group Managing Director 
Group Chief Financial Officer

•  Deferred Shares
•  Performance Shares

Divisional managing directors

•  Up to 30% of FAR in cash

After cash

•  Deferred Shares
•  Performance Shares

1  ROC is calculated as divisional EBT divided by divisional rolling 12 months capital employed, where capital employed excludes right-of-use assets and lease liabilities.

In assessing performance against the scorecards, the Board considers the behaviours demonstrated by each executive KMP and, if the 
Board considers it appropriate, the outcome is reduced or modified. This includes, for example, behaviours in relation to risk management and 
demonstration of appropriate ethics, values and culture, actions negatively impacting the Group's reputation, and team member safety and 
wellbeing. Further, the Board considers whether the calculated outcome is fair and reasonable, and may decrease or increase the outcome 
where appropriate.

The results of the performance against the annual scorecard and final outcome for each of the executive KMP for the 2022 KEEPP allocation are 
outlined on the following pages. In assessing the performance of executive KMP through the year, the Board considered the impact of external 
events, such as COVID-19 and management's response to the continuing changes in the operating environment. During the 2022 financial year, 
COVID-19 continued to present various challenges to businesses including additional operating costs, restrictions to trade and lockdowns and 
availability of inventory. Management continued to demonstrate a very pleasing response to the challenges associated with COVID-19 as evident 
through positive operational and financial outcomes while also providing significant support to team members, customers and community 
partners.

In assessing the performance during the 2022 financial year against the 2022 KEEPP scorecards, the Board did not exercise discretion to 
adjust the calculated remuneration outcomes for the financial and safety performance measures. However, as per standard practice, the Board 
exercised its judgement in assessing the individual performance objectives, taking into account all factors it considered relevant. Further, the 
Board also ensured that the final calculated outcome was fair and reasonable. 

110

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Remuneration report (audited)

Rob Scott – Group Managing Director, Wesfarmers Limited

2022 Performance highlights

Financial (55% weighting)

Mr Scott's financial targets, excluding OneDigital, were as follows:

•  Group NPAT: $2,062m 
•  Group ROE: 26.8% 

Outcome: 165% of FAR (Maximum opportunity: 165% of FAR)

Threshold performance was set at 92.5% of target and stretch performance would be achieved at 110% of target (consistent with the prior year).

•  The Group achieved reported Group NPAT of $2,352.2m and reported ROE of 29.4%. Following solid performance of the Group over the 

2022 financial year, both Group NPAT and ROE were above the stretch performance target set by the Board. As a result, Mr Scott achieved 
the maximum 2022 KEEPP outcome on financial measures. 

•  The Board continues to be very pleased with Mr Scott’s performance and his leadership of the Group in achieving the financial results, 

especially given the ongoing external challenges and disruption.

Group ecosystem (15% weighting)

Outcome: 40.5% of FAR (Maximum opportunity: 45% of FAR)

•  The Board is pleased with the progress made during the 2022 financial year in establishing the Group ecosystem, the OneDigital 

division and the launch of the OnePass membership program. In addition, the Board is also pleased with the inclusion of Bunnings and 
Officeworks in Flybuys during the year, recognising that this was the culmination of work over a number of years. The take up of OnePass 
has been positive, as has customer feedback regarding OnePass and the extension of Flybuys.

•  Other Group-wide data and digital initiatives continued to be implemented during the year, the benefits of which have included an 

increase in online sales and a significant increase in the availability of customer data to enable better personalisation of customer offers. 

Safety (10% weighting)

Group TRIFR target: 8.81

Outcome: 14.7% of FAR (Maximum opportunity: 30% of FAR)

•  The Group TRIFR result was 9.21, representing an improvement on the prior year. There were no fatalities and no critical risk failures across 

managed entities and therefore the gateway on payment for this measure was met.

•  The safety and wellbeing of all team members across the Group continues to be the highest priority. Although the Group TRIFR target was 
not met, a 3.7% improvement on last year’s TRIFR result was achieved throughout the year, reflecting the ongoing efforts to provide a safe 
environment for our team members including the implementation across the Group of COVID-safe operating practices and provision of 
additional support to team members through the COVID-19 pandemic. The result was, however, above threshold.

Business enhancing (10% weighting)

Outcome: 27% of FAR (Maximum opportunity: 30% of FAR)

Mr Scott was set a number of business enhancing objectives for the performance period, each of which has been individually assessed 
by the Board.

•  Business growth: The Board assessed Mr Scott on a number of business growth objectives set at the beginning of the financial year. These 
included the growth and investment opportunities recommended by Mr Scott to the Board, such as the acquisition of API and the continued 
progress of the development of the Mt Holland lithium project.

•  Turnaround/newly acquired businesses: The Board is pleased with the continued progress with the Blackwoods turnaround, with the 

business delivering improved financial performance once again.

Sustainability (10% weighting)

Outcome: 27% of FAR (Maximum opportunity: 30% of FAR)

•  Good progress continued against the Group's emissions reduction targets with Scope 1 and 2 market-based emissions reduced by 7.4%, 

excluding the Health division. In addition, the second sustainability-linked bond was successfully launched. The Group's strategy with regard 
to Aboriginal and Torres Strait Islander employment was updated, with a greater focus on leadership and career development. In addition, the 
Group reached parity in terms of Indigenous team member numbers and achieved 'Elevate' status for our Reconciliation Action Plan. 

Weighting  
(%)

Threshold 
not met

Threshold 
achieved

Threshold 
exceeded

Target 
achieved

Target 
exceeded

Maximum 
achieved

55

15

10

10

10

2022 KEEPP outcome

Scorecard measure

Financial

Group ecosystem

Safety

Business enhancing 

 – Business growth

 – Turnaround/newly acquired 

businesses

Sustainability

 – Reputation

 – Risk management

 – People and culture

 – Climate change-related 

initiatives

Mr Scott’s total 2022 KEEPP outcome, being 91.4 per cent of the maximum opportunity, will be allocated as: 

•  $3,427,083 in Deferred Shares
•  $3,427,083 in Performance Shares

Wesfarmers 2022 Annual Report

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Directors' report

Remuneration report (audited)

Anthony Gianotti – Group Chief Financial Officer, Wesfarmers Limited

2022 Performance highlights

As Group Chief Financial Officer, Mr Gianotti’s Group financial and safety measures and outcomes are the same as those of the 
Group Managing Director. 

Mr Gianotti has had a successful year. Contributing to the Group's strong financial result, Mr Gianotti successfully managed the 
Group's commercial response to a number of challenges, for example, the continuation of COVID-19 lockdowns in both Australia and 
New Zealand, continued supply chain disruption and changing economic conditions. Further to his role as Group Chief Financial Officer, 
Mr Gianotti continued to provide strong strategic support to the Group Managing Director and lead strategic projects, as identified by the 
Group Managing Director and has responsibility for Wesfarmers Industrial and Safety.

•  Group ecosystem Mr Gianotti has provided significant commercial support to the creation of OneDigital as well as the extension of 

Flybuys within the Group.

•  Business enhancing: Mr Gianotti continued to deliver very effective management of the Group balance sheet, with a well-timed bond 
issuance (being the successful issuance of the first sustainability-linked bond in the European market), the partial selldown of the Coles 
stake and completion of the capital return in December 2021. Further, Mr Gianotti was instrumental in the successful acquisition of API in 
March 2022, and the turnaround of Blackwoods and Wesfarmers Industrial and Safety is continuing as anticipated.

•  Sustainability: Mr Gianotti has again continued to positively engage with key external participants to support the Group's capital 

structure. Risk, especially cyber risk, has continued to be a significant focus for Mr Gianotti and throughout the year there has been a 
demonstrated uplift in risk and compliance maturity at both the Group and divisional level. The talent management of the finance teams 
across the Group has again been a focus for Mr Gianotti, with a number of cross-divisional moves announced during the year.

Weighting  
(%)

Threshold 
not met

Threshold 
achieved

Threshold 
exceeded

Target 
achieved

Target 
exceeded

Maximum 
achieved

55

15

10

10

10

2022 KEEPP outcome

Scorecard measure

Financial

Group ecosystem

Safety

Business enhancing 

 – Balance sheet and capital 

management

 – Business growth

 – Turnaround/newly acquired 

businesses

Sustainability

 – Reputation

 – Risk management

 – People and culture

 – Climate change-related 

initiatives

Mr Gianotti’s total 2022 KEEPP outcome, being 88.6 per cent of the maximum opportunity, will be allocated as: 

•  $1,926,083 in Deferred Shares
•  $1,926,083 in Performance Shares

112

 Wesfarmers 2022 Annual Report

Remuneration report (audited)

Ian Bailey – Managing Director, Kmart Group

2022 Performance highlights

Mr Bailey's financial targets were set in relation to achievement of Kmart Group EBT, Kmart ROC and comparable sales growth, and Catch 
GTV. Threshold performance for the EBT measure was set at 87% of target and stretch performance would be achieved at 122% of target. 
Threshold performance for the ROC measure was set at 92.5% of target and stretch performance would be achieved at 115% of target.  
The ranges were widened for the 2022 financial year relative to the 2021 financial year, recognising the greater level of uncertainty.  

•  Kmart Group was significantly impacted by mandated COVID-19 related store closures and supply chain disruptions in the first half of 

the year but delivered strong sales and earnings growth in the second half demonstrating the benefits of recent strategic projects within 
Kmart Group.

•  Kmart Group achieved EBT of $417.8m which was above target by between 0% to 5%. Kmart ROC was also above target by a similar 

amount.

•  Kmart's comparable sales growth was negative 1%, which was below target by more than 15%.
•  Catch GTV remained relatively stable at $988.9m but below the threshold level set by the Board and therefore there was no payment 

• 
• 

made in respect of this component.
In total, Mr Bailey's 2022 KEEPP outcome on financial measures was 92.3% of FAR.
 The year presented a number of challenges for Mr Bailey, which he has effectively managed. The first half of the year was significantly 
impacted by COVID-19 and difficult supply chain conditions which continued during the important Christmas and holiday trading period 
as a result of the Omicron variant.  Under Mr Bailey's leadership, Kmart and Target have demonstrated strong performance and agility 
to respond to deteriorating economic conditions in the second half of the year, in addition to the ambitious (though well-governed) 
transformation programs in both businesses. 

•  Group ecosystem: Mr Bailey assumed a major leadership role in the creation of OnePass and the Group ecosystem and the program 

has greatly benefited from Mr Bailey's strategic input. As a director of Flybuys, Mr Bailey was also instrumental in the expansion of Flybuys 
across Wesfarmers.

•  Safety: Kmart Group TRIFR for the year was 8.30. This represents an improvement on the prior year and is 3.9% above the target for the 

2022 financial year.

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•  Business enhancing: In spite of the ongoing difficulties presented by COVID-19, significant progress has continued on the transformation 
of Target and the actions to optimise the Target store network and accelerate the growth of Kmart. In addition, execution of the strategic 
agenda within Kmart has provided a number of benefits, including increased sales,  better availability in apparel, shorter sourcing lead 
times and higher online conversions.  Both businesses have benefited from a greater focus on digitisation and online.

•  Sustainability: Good progress has continued in relation to Aboriginal and Torres Strait Islander employment and maintaining gender 

balance. Given the strategic agendas of both Kmart and Target, hiring strong digital talent has been key during the year.  Good progress 
has also been made in relation to the ambitious climate change-related goals set. Cyber security has continued to be a focus with pleasing 
results achieved in various audits and pressure tests. 

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Threshold 
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Threshold 
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Target 
achieved

Target 
exceeded

Maximum 
achieved

45

10

15

10

10

10

2022 KEEPP outcome

Scorecard measure

Financial - excluding Catch 
GTV

Financial - Catch GTV

Group ecosystem

Safety

Business enhancing 

 – Business growth

 – Turnaround/newly acquired 

businesses

Sustainability

 – Reputation

 – Risk management

 – People and culture

 – Climate change-related 

initiatives

Mr Bailey’s total 2022 KEEPP outcome, being 71.6 per cent of the maximum opportunity, will be allocated as: 

•  $465,000 in cash
•  $1,431,816 in Deferred Shares
•  $1,431,816 in Performance Shares

Wesfarmers 2022 Annual Report

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Directors' report

Remuneration report (audited)

Michael Schneider – Managing Director, Bunnings Group

2022 Performance highlights

Mr Schneider's financial targets were set in relation to achievement of Bunnings Group EBT, ROC and total sales growth. Threshold 
performance for the EBT and ROC measures was set at 92.5% of target and stretch performance would be achieved at 110% of target 
(consistent with the prior year).

•  Bunnings has delivered strong financial results for the year with EBT of $2,204.4m and ROC of 77.2%. EBT was between 5% and 10% 

above target and ROC was more than 15% above target.

•  Total sales growth (including trade centres) was 5.2%, more than 15% above target reflecting the ongoing investment in the customer 
offering and the successful navigation of the impact of the extended lockdowns within Australia and New Zealand in the first half of the 
year. 
In total, Mr Schneider's 2022 KEEPP outcome on financial measures was 163.9% of FAR. 

• 
•  Mr Schneider has continued to perform and lead Bunnings at the highest level during another challenging year.  
•  Group ecosystem: Mr Schneider played an active leadership role in the creation of OneDigital and defining the Group strategy. Flybuys 
was successfully introduced across Bunnings.  Work is continuing on extending OnePass into Bunnings. Bunnings delivered a material 
improvement in digital and e-commerce performance during the year.  

•  Safety: Bunnings TRIFR was stable at 11.33 however this result was below the minimum performance level set by the Board and, as a 

result, no payment was made in respect of safety improvement.  

•  Business enhancing: Mr Schneider delivered pleasing improvements across merchandising and store operations combined with the 
strengthening of the leadership team. Strong progress was made with the commercial offer through expanding range and services, 
including PowerPass, and the expansion of Tool Kit Depot. In addition, Beaumont Tiles was successfully acquired in November 2021 and 
the integration into Bunnings Group progressed well over the remainder of the year.

•  Sustainability: Good progress has been made during the year in relation to Bunnings' climate change-related initiatives, for example in the 
use of renewable electricity, energy efficiency and emissions reduction. Bunnings waste reduction and recycling initiatives also progressed, 
for example with the expansion of the national battery recycling programs within Australia and New Zealand, including within Tool Kit 
Depot. Given the talent shortages, a number of people-rated initiatives were launched within Bunnings over the year, including a particular 
focus upon digital and innovation roles. Good progress has continued in relation to Aboriginal and Torres Strait Islander employment and 
gender balance. Further, the focus on risk, in particular cyber risk, has continued throughout the year.

Weighting  
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Threshold 
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Threshold 
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Threshold 
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Target 
achieved

Target 
exceeded

Maximum 
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55

15

10

10

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Scorecard measure

Financial

Group ecosystem

Safety

Business enhancing 

 – Business growth

 – Turnaround/newly acquired 

businesses

Sustainability

 – Reputation

 – Risk management

 – People and culture

 – Climate change-related 

initiatives

Mr Schneider’s total 2022 KEEPP outcome, being 83.3 per cent of the maximum opportunity, will be allocated as: 

•  $510,000 in cash
•  $1,868,731 in Deferred Shares
•  $1,868,731 in Performance Shares

114

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Remuneration report (audited)

5.4  2018 KEEPP awards that vested during the 2022 financial year

In 2018, eligible executive KMP were awarded Deferred Shares and Performance Shares under the 2018 KEEPP. The four-year performance 
period for the 2018 KEEPP Performance Shares ended on 30 June 2022. Further details of the terms of the 2018 KEEPP are set out in the 
2019 Remuneration Report. All of the current executive KMP participated in the 2018 KEEPP. The table below summarises the applicable 
performance conditions and the vesting outcome of the 2018 KEEPP Performance Shares for each, as approved by the Board in August 2022. 
Prior to approval of the vesting outcome of the 2018 KEEPP Performance Shares, the Board considered malus however concluded it should 
not apply for any of the executive KMP.  Further information on each performance condition is provided below.

Vesting condition

rTSR (60% of the award)

Performance 
condition result

(2018-2022)

% of 
maximum 
opportunity

Total % of 
Performance 
Shares vested

Number of 
Performance 
Shares vested

4-year TSR of 77.5% ranked at the 
86.5 percentile of the ASX 100

100.0%

R G Scott

A N Gianotti

I Bailey

M D Schneider

Portfolio management and 
investment outcomes (20% 
of the award)

Strategic objectives (20% of 
the award)

rTSR (60% of the award)

Portfolio management and 
investment outcomes (20% 
of the award)

Strategic objectives (20% of 
the award)

rTSR (20% of the award)

Cumulative segment result 
(80% of the award)

rTSR (20% of the award)

Cumulative segment result 
(80% of the award)

Above expectations

90.0%

95.0%

87,872

Above expectations

85.0%

4-year TSR of 77.5% ranked at the 
86.5 percentile of the ASX 100

100.0%

Above expectations

90.0%

95.0%

47,450

Above expectations

85.0%

4-year TSR of 77.5% ranked at the 
86.5 percentile of the ASX 100

100.0%

$1,380.4m

42.2% of target

0.0%

4-year TSR of 77.5% ranked at the 
86.5 percentile of the ASX 100

100.0%

$7,867.5m

103.1% of target

100.0%

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8,571

100.0%

42,527

Relative total shareholder return (rTSR) condition

This condition measures the performance of Wesfarmers' TSR relative to the TSR of the constituents of the S&P/ASX 100 Index. The Group 
outperformed the majority of its peers over the performance period with regard to rTSR and was ranked at the 87th percentile in the ASX 100.

Portfolio management and investment outcomes condition

The Board assessed Mr Scott’s contribution and outcomes over the four-year performance period. Greater emphasis was placed on the 
contribution of the decisions and actions in the early years of the performance period to allow the outcomes to be assessed over the longer 
term, including, for example, the demerger of Coles from the Group and the divestment of KTAS in the 2019 financial year. The Board also 
considered the portfolio management and investment opportunities that had been considered but not pursued over the period. Overall, the 
Board assessed Mr Scott as having achieved outcomes above their expectations.

In addition, the Group Managing Director and the Board assessed Mr Gianotti's outcomes and Mr Gianotti was also deemed to have achieved 
outcomes above expectations.

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The Board assessed Mr Scott’s contribution and outcomes over the four-year performance period against strategic goals across five specific 
areas:

•  Accelerating the data and digital agenda

•  Environmental, Social and Governance (ESG) strategies

•  Risk management 

• 

Improving corporate reputation

•  Talent management and leadership development

Greater emphasis was placed on strategic activity in the earlier years of the performance period to enable assessment over the longer term. The 
Board acknowledged the challenge of achieving strategic success in each of these areas, given the Group’s autonomous operating model and 
with businesses within the Group being at different stages of maturity. Overall, the Board rated Mr Scott as having achieved significant positive 
results across each of these areas.

Separately the Group Managing Director and the Board assessed Mr Gianotti’s outcomes against similar areas of focus, using personalised 
strategic goals tailored to his role. In addition to the substantial support Mr Gianotti provides to Mr Scott in relation to long-term Group strategy, 
Mr Gianotti was assessed as having performed very strongly in relation to his personalised strategic objectives over the performance period.

Wesfarmers 2022 Annual Report

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Directors' report

Remuneration report (audited)

Cumulative segment result condition

This condition measures the cumulative segment result against the 2018 Corporate Plan for the relevant division, subject to an average 
ROC gate (noting ROC for the 2021 and 2022 financial years was calculated as divisional EBT divided by divisional rolling 12 months capital 
employed, where capital employed excludes right-of-use assets and lease liabilities). The relevant Corporate Plan was approved by the Board 
prior to the end of the 2018 financial year. The EBT and ROC targets in the Corporate Plan are not typically adjusted including, for example, to 
reflect changes (even when considered significant) in the year on year annual budgets or the external environment.  The Board can, however, 
adjust these targets where it considers it appropriate, so that participants are not unfairly advantaged or disadvantaged, for example, due to 
portfolio management activity.

Over the four-year performance period, the Kmart Group reported an average ROC of 33.2 per cent which was below the required average 
ROC condition of 37.1 per cent. The cumulative segment EBIT result was $1,380.4m which was below the four-year Corporate Plan 
performance condition of $3,269.5m. Over the four-year performance period, the Bunnings Group reported an average ROC of 68.0 per cent 
which was above the required average ROC condition of 45.0 per cent. The cumulative segment EBIT result was $7,867.5m which was above 
the four-year Corporate Plan performance condition of $7,628.9m.

5.5  Performance summary for the Group Managing Director

The charts below summarise the performance of the Group over the past four years. In addition, the table shows Mr Scott’s KEEPP outcomes 
as Group Managing Director over the same period.

Performance summary for the Group Managing Director

NPAT 
(from continuing operations,
excluding significant items)1,2
$m

NPAT 
(from continuing operations,
excluding significant items)1,2

$m

2,500

2,500

2,000

2,000

1,500

1,500

0
4
9
,
1

1
2
4
,
2

1
2
4
,
2

2
5
3
,
2

2
5
3
,
2

9
9
0
,
2

9
9
0
,
2

0
4
9
,
1

1,000

1,000

500

500

0

0
FY19

FY19

FY20

FY20

FY21

FY21

FY22

FY22

ROE (R12) 
ROE (R12) 
(from total operations,
(from total operations,
excluding significant items)1,2
excluding significant items)1,2

%

TSR: Wesfarmers and ASX 100
(3 month moving average)

30

25

20

15

2
.
9
1

10

5

0
FY19

4
.
9
2

4
.
9
2

1
.
6
2

1
.
6
2

1
.
1
2

1
.
1
2

2
.
9
1

225

200

175

150

125

100

75

FY19

FY20

FY20

FY21

FY21

FY22

FY22

FY19

FY20

FY21

FY22

WES 
+77.5%

ASX 
+40.4%

%

30

25

20

15

10

5

0

1  NPAT (from continuing operations, excluding significant items) and ROE (from total operations, excluding significant items) are considered non-IFRS measures.
2  FY19 and FY20 NPAT and ROE are presented on a pre-AASB 16 basis.

Wesfarmers TSR over the four-year performance period ending 30 June 2022 was 77.5 per cent, placing Wesfarmers' rTSR against the 
S&P/ASX 100 Index over the same period at the 87th percentile.

Summary of KEEPP outcomes for the Group Managing Director

Annual KEEPP scorecard  
(% of maximum opportunity)

Group NPAT and ROE, safety, 
individual performance objectives

86.6

37.0

98.3

91.4

Performance measures

FY19

FY20

FY21

FY22

Vesting of KEEPP Performance Shares  
(% of award at end of four-year performance period)

2016 KEEPP Performance Shares

rTSR, divisional EBIT and ROC

100.0

2017 KEEPP Performance Shares

rTSR, strategic objectives

2018 KEEPP Performance Shares

rTSR, portfolio management and investment 
outcomes, strategic objectives

95.5

95.0

116

 Wesfarmers 2022 Annual Report

Remuneration report (audited)

5.6  Executive KMP remuneration (statutory presentation)

(a)   Statutory executive KMP remuneration table

In the following table, remuneration outcomes are presented based on the requirements of the Corporations Act 2001 and accounting 
standards (which has the benefit of being readily comparable with other companies) rather than a take-home pay basis (generally being cash 
and benefits and the value of equity received during the financial year). In this regard:

•  The KEEPP cash component is recognised for the year in which it is earned. The KEEPP Deferred Shares are recognised as an expense 
over a 12-month period typically spanning two financial years and the KEEPP Performance Shares are recognised over the performance 
period (four years) based on the assessed value when originally granted to the executive KMP. The value recognised for the KEEPP 
Deferred Shares and KEEPP Performance Shares may be significantly different to their value if and/or when the incentive vests to the 
executive KMP. Note, as at 30 June 2022, the service and performance conditions to determine vesting of the 2022 KEEPP Deferred 
Shares and 2022 KEEPP Performance Shares had not yet been finalised and therefore the following table does not include the expensing 
of these grants.

• 

In some circumstances, amounts are recorded as remuneration even when no equity vests to the executive KMP and in other cases 
there can be negative remuneration from equity awards in a given year, for example, due to non-vesting.

Short-term benefits

Cash 
salary 

KEEPP 
cash5 

Non- 
monetary 
benefits6

Long- 
term 
benefits1

Post- 
employment 
benefits2

Share-based 
payments3

Termination 
benefits

Total 

Performance 
related4

Other6

Leave

Super- 
annuation

KEEPP and 
other equity 

Termination 
payments

($)

($)

($)

($)

($)

($)

($)

($)

($)

(%)

Executive director

R G Scott – Group Managing Director, Wesfarmers Limited

2022

2021

2,259,485

2,322,435

Senior executives

-

-

217,880

70,125

41,666

159,914

60,151

41,666

23,568

21,694

5,337,813

4,328,189

A N Gianotti – Group Chief Financial Officer, Wesfarmers Limited

2022

2021

1,348,266

1,265,531

-

-

54,477

66,932

70,125

23,750

60,151

22,500

23,568

21,694

2,786,596

2,284,596

I Bailey – Managing Director, Kmart Group

2022

2021

1,476,426

465,000

3

70,125

25,000

1,328,179

405,000

3,237

60,151

22,500

23,568

21,821

1,829,037

1,368,823

M D Schneider – Managing Director, Bunnings Group

2022

2021

Total

2022

2021

1,535,027

510,000

92,724

70,125

27,500

1,398,754

450,000

83,698

60,151

25,000

23,568

21,821

3,161,473

3,501,107

6,619,204

975,000

365,084

280,500

117,916

94,272

13,114,919

6,314,899

855,000

313,781

240,604

111,666

87,030

11,482,715

-

-

-

-

-

-

-

-

-

-

7,950,537

6,934,049

4,306,782

3,721,404

3,889,159

3,209,711

5,420,417

5,540,531

21,566,895

19,405,695

67.1

62.4

64.7

61.4

59.0

55.3

67.7

71.3

-

-

1  Long-term benefits relate to leave entitlements earned during the year.
2  Post-employment benefits relate to superannuation contributions made on behalf of the executive KMP in accordance with Wesfarmers’ statutory superannuation 

obligations. Also included is any part of the executive KMP’s salary that has been sacrificed into superannuation.

3  The amounts included in share-based payments relate to the KEEPP and Performance-tested Shares, as applicable.

 – The portion of the 2018 KEEPP, 2019 KEEPP and 2020 KEEPP that continue to be expensed in the 2022 financial year based on probability of vesting, as these  
shares are subject to performance and forfeiture conditions, together referred to as the service period. The amounts included for the 2021 KEEPP are detailed in  
section 5.7.

 – The portion of the Performance-tested Shares that were expensed in the 2022 financial year, based on probability of vesting, as these shares are subject to  

performance and forfeiture conditions. 

 – The expensing for the Deferred Shares and Performance Shares that are yet to be granted under the 2022 KEEPP will be included in the remuneration table in the  

2023 Remuneration Report.

4  The percentage performance related for the 2022 financial year is the sum of the KEEPP cash and share-based payments divided by the total remuneration, 

reflecting the actual percentage of remuneration at risk for the year. The percentage of total remuneration that consists of KEEPP shares only, being the amount 
expensed in the 2022 financial year for the 2018, 2019, 2020 and 2021 KEEPP shares, as applicable, is as follows – R G Scott 67.1 per cent, A N Gianotti 
64.7 per cent, I Bailey 47.0 per cent, and M D Schneider 58.3 per cent.

5  Cash payments expected to be made in August 2022 to eligible participants in relation to the KEEPP for the 2022 financial year.
6  Short-term benefits, ‘non-monetary benefits’, include the cost to the company of providing vehicles, life insurance, travel and the fair value of any discounts received 
for goods and services acquired by the executive KMP below retail price, available under the general team member discount schemes (noting that these purchases 
are on the same terms and conditions as those entered into by other Group team members or customers and are minor or domestic in nature). Note that from 
1 July 2021, the Group no longer provided life insurance benefits under the Group Life Insurance Policy for the executive KMP. Short-term benefits, ‘Other’, includes 
the cost of directors’ and officers’ liability insurance.

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Directors' report

Remuneration report (audited)

(b)  Summary of KEEPP shares that were expensed during the 2022 financial year 

The table below sets out details of the KEEPP shares that were expensed during the 2022 financial year. In addition, this table shows the 
KEEPP shares that vested during the year.

Deferred Shares vested 
during the year2

Performance Shares vested 
during the year3

Name

R G Scott

A N Gianotti

I Bailey

M D Schneider

Year1

Number

2018 KEEPP

2019 KEEPP

-

-

%

-

-

2020 KEEPP

28,609

100.0

2021 KEEPP

2018 KEEPP

2019 KEEPP

-

-

-

-

-

-

2020 KEEPP

16,179

100.0

2021 KEEPP

2018 KEEPP

2019 KEEPP

-

-

-

-

-

-

2020 KEEPP

13,918

100.0

2021 KEEPP

2018 KEEPP

2019 KEEPP

-

-

-

2020 KEEPP

38,768

2021 KEEPP

-

-

--

-

100.0

-

Range that could 
be expensed over 
the remaining 
performance period4

($)

-

0 to 668,598

0 to 517,531

0 to 2,896,806

Number

87,872

-

-

-

%

95.0

-

-

-

47,450

95.0

-

-

-

-

-

-

-

0 to 371,073

0 to 292,672

0 to 1,764,440

8,571

20.0

-

-

-

-

-

-

-

0 to 415,342

0 to 454,388

0 to 1,858,517

42,527

100.0

-

-

-

-

-

-

-

0 to 267,358

0 to 792,903

0 to 1,805,874

1  The EBIT and ROC performance conditions of the 2018 and 2019 KEEPP Performance Shares have been amended to post-AASB 16 EBT and ROC metrics. There 

has been no incremental change in the fair value of the awards. The share price on which the amendment was communicated to participants was $59.10.
2  The 2018 Deferred Shares were subject to a 12-month service condition and vested in December 2019, although these remain subject to a five- and six-year 
trading restriction until August 2023 and August 2024 respectively. The 2019 Deferred Shares were subject to a 12-month service condition and vested in 
December 2020, although these remain subject to a five- and six-year trading restriction until August 2024 and August 2025 respectively. The 2020 Deferred 
Shares were subject to a 12-month service condition and vested in December 2021, although these remain subject to a four-, five- and six-year trading restriction 
until August 2024, August 2025 and August 2026 respectively. The 2021 Deferred Shares remain unvested. The Deferred Shares are held in trust and can only be 
transferred to the executive KMP once all trading restrictions and any other conditions are met.

3  The 2018 Performance Shares were subject to a four-year performance period that ended on 30 June 2022 (see section 5.4 for further information). The 2019 

Performance Shares, 2020 Performance Shares and 2021 Performance Shares will reach the end of the four-year performance period on 30 June 2023, 
30 June 2024 and 30 June 2025 respectively. The Performance Shares are held in trust and can only be transferred to the executive KMP once vested.

4  Should the executive KMP resign prior to vesting, the Deferred Shares and Performance Shares would be forfeited. Accordingly, the minimum value of the unvested 
award would be nil. The fair value at the grant date represents the maximum possible total fair value of the shares. See the relevant Remuneration Report in the year 
of grant for further details.

(c)  

 Summary of additional Kmart-related Performance-tested Shares that were expensed during the 
2022 financial year

The Performance-tested Shares were granted in the 2021 financial year to the Group Managing Director, the Group Chief Financial Officer and 
the Managing Director, Kmart Group to ensure continued focus on the successful implementation of the Kmart Group restructure. For further 
information on the Performance-tested Shares, please refer to section 5.7 in the 2021 Remuneration Report. 

The table below sets out details of the Performance-tested Shares that were expensed during the 2022 financial year. In addition, this table 
shows the Performance-tested Shares that vested during the year. 

Performance-tested Shares vested during the year1

Range that could be expensed over

the remaining performance period2

R G Scott

A N Gianotti

I Bailey

Number

-

-

-

%

-

-

-

($)

0 to 419,085

0 to 226,307

0 to 339,460

1  The Performance-tested Shares were granted on 12 November 2020 and will reach the end of the performance period on 30 June 2023. The Performance-tested 

Shares are held in trust and can only be transferred to the participant once vested.

2  Should the participant leave the Wesfarmers Group for any reason other than ill health prior to vesting, the Performance-tested Shares would be forfeited. 

Accordingly, the minimum value of the unvested award would be nil. The fair value at the grant date represents the maximum possible total fair value of the shares. 
See the 2021 Remuneration Report for further details.

118

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Remuneration report (audited)

5.7  Details of equity allocated during the 2022 financial year

The 2021 KEEPP outcomes were presented in section 5.2 of the 2021 Remuneration Report, including the percentage of the 2021 KEEPP 
award opportunity that was forfeited.

As set out in the 2021 Remuneration Report, in June 2021, the Board changed its approach to the KEEPP such that the Deferred Shares and 
the Performance Shares, from the 2021 KEEPP award onwards, will be satisfied in unquoted Wesfarmers shares. These shares are identical to 
other ordinary Wesfarmers shares except that they are not quoted (i.e. tradeable) on the ASX and the payment of dividends during the vesting 
period is delayed until either the Deferred Shares and the Performance Shares vest (with the dividends then paid to the participant) or upon 
forfeiture (with the dividends then paid to the trustee). This means no component of any dividend will be paid to the executive KMP unless 
and until the vesting outcome is known. Upon the vesting or forfeiture of the Deferred Shares and the Performance Shares, as applicable, the 
company will apply for the unquoted shares to be quoted on the ASX. 

The 2021 KEEPP Deferred Shares and Performance Shares were granted during the 2022 financial year, with any cash component paid on 
30 August 2021. Approval from Wesfarmers shareholders for the issuance of these shares to the Group Managing Director was obtained under 
ASX Listing Rule 10.14 at the 2021 Annual General Meeting.

The terms applicable to the grant of Deferred Shares and Performance Shares for the 2021 KEEPP are set out on the following pages. Details of 
prior year grants are set out in the Remuneration Report for the relevant year.

Deferred Shares 
allocated (subject to a 
four-, five- and six-year 
restriction from  
trading)1, 3

Performance Shares 
allocated (vesting 
subject to performance 
conditions over a four-year 
performance period)2, 3

63,273

31,559

27,412

29,943

63,273

31,559

27,412

29,943

Fair value of 
Deferred Shares at 
grant date4

Fair value of 
Performance Shares at 
grant date4

 ($)

3,514,815

1,890,700

1,642,253

1,793,885

 ($)

2,420,432

1,396,849

1,374,164

1,501,033

Name

R G Scott

A N Gianotti

I Bailey

M D Schneider

1  The 2021 KEEPP Deferred Shares were granted on 21 October 2021 for R G Scott and on 16 November 2021 for the remaining executive KMP and are still subject 
to restrictions, in accordance with the relevant service conditions and ongoing tenure. No 2021 KEEPP Deferred Shares vested or were forfeited during the reporting 
period.

2  The 2021 KEEPP Performance Shares were granted on 21 October 2021 for R G Scott and on 16 November 2021 for the remaining executive KMP and are still 
subject to performance conditions until 30 June 2025. Accordingly, no 2021 KEEPP Performance Shares vested or were forfeited during the reporting period.
3  The number of Deferred Shares and Performance Shares allocated was determined using the face value of Wesfarmers shares, based upon the 10-day VWAP of 
Wesfarmers shares over the period following the commencement of trading ex of the capital return (i.e. 18 November – 1 December 2021) being $58.234636. 
4  For accounting purposes, the fair value at grant date is shown above, in accordance with AASB 2 Share-Based Payment. The Performance Shares subject to 

market conditions (rTSR condition) have been independently valued using the Monte Carlo simulation using the Black-Scholes framework. The Deferred Shares and 
the Performance Shares subject to non-market conditions (e.g. divisional EBT and ROC) have been valued with reference to the Wesfarmers share price on grant 
date. For R G Scott, the value per Performance Share for the rTSR performance condition is $33.93 and the value per Deferred Share and per Performance Share 
subject to the portfolio management and investment outcomes condition is $55.55, valued as at 21 October 2021 following approval of the grant at the Wesfarmers 
2021 Annual General Meeting. For all other KEEPP participants the value per Performance Share for the rTSR performance condition is $40.35 and the value 
per Deferred Share and per Performance Share subject to the portfolio management and investment outcomes condition or the divisional financial performance 
condition is $59.91, valued as at 16 November 2021. The fair value at the grant date represents the maximum possible total fair value of the shares. The minimum 
value of unvested shares is nil.

2021 Deferred Shares

The 2021 Deferred Shares were allocated in December 2021 and did not have further conditions applied but did have a 12-month service 
condition (the forfeiture period) from the date they were allocated to participants and continue to be subject to trading restrictions as outlined 
below. Prior to allocation, the executive KMP had the option of voluntarily applying a longer restriction period to their 2021 Deferred Shares of up 
to 15 years.

2021 KEEPP Deferred Shares

One-third of Deferred Shares are restricted from trading for six years

12-month 
performance 
period

One-third of Deferred Shares are restricted from trading for five years

One-third of Deferred Shares are restricted from 
trading for four years

June 2021

2022

2023

2024

2025

2026

2027

Unquoted 
Deferred Shares 
allocated in 
December 2021

Forfeiture period ends 
in December 2022. 
Shares to be quoted 
and dividends to be 
paid to the participant 
on vested shares

Restriction lifts 
on one-third of 
Deferred Shares 
in August 2025

Restriction lifts 
on one-third of 
Deferred Shares 
in August 2026

Restriction lifts 
on one-third of 
Deferred Shares 
in August 2027

Wesfarmers 2022 Annual Report

119

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Directors' report

Remuneration report (audited)

2021 Performance Shares

The 2021 Performance Shares were allocated in December 2021. The 2021 Performance Shares have performance conditions over a four-year 
performance period, from 1 July 2021 to 30 June 2025. The performance conditions will be tested shortly after the end of the performance 
period. Performance Shares will only vest based on the extent of the satisfaction of the performance conditions outlined below. Following 
testing, any Performance Shares that do not vest will be forfeited. The performance conditions applicable to the 2021 Performance Shares vary 
as set out below.

2021 KEEPP Performance Shares

12-month 
performance 
period

Group Managing Director and Group Chief Financial Officer: 
rTSR (80% weighting) and portfolio management and investment 
outcomes (20% weighting) 

Divisional managing directors: 
rTSR (50% weighting) and divisional financial performance1 
(50% weighting) 

June 2021

2022

2023

2024

2025

2026

Four-year 
performance 
period begins     
1 July 2021

Unquoted 
Performance 
Shares allocated 
in December 2021

Performance 
period ends and 
conditions tested 
as at 30 June 2025

Board approves testing 
and vesting outcome, 
expected to be in August 
2025. Shares to be 
quoted and accumulated 
dividends to be paid to 
the participant on vested 
shares2

1  Set at a divisional level through annual Corporate Planning processes.
2  Accumulated dividends on any unvested (forfeited) shares are paid to the trust.

Assessment of the performance conditions and achievement against the performance conditions will be determined by the Board having regard 
to any matters that it considers relevant.

Specific divisional financial performance conditions have been set with regard to each divisional managing director and the relevant key financial 
measures for their respective division:

•  The portion of Mr Schneider’s 2021 Performance Shares subject to divisional financial performance (being 50 per cent of his overall 

Performance Shares allocation) will be wholly assessed against Bunnings Group EBT and ROC. 

•  The portion of Mr Bailey’s 2021 Performance Shares subject to divisional financial performance will be assessed against Kmart Group 

EBT and ROC (excluding Catch) (40 per cent of his overall Performance Shares allocation) and Catch GTV and CLV/CPA ratio 
(10 per cent of his overall Performance Shares allocation). In June 2022, in recognition that Catch would cease to be included within the 
Kmart Group from 1 July 2022 and instead be included within the OneDigital division, the Board approved that from 1 July 2022, the 
portion of Mr Bailey’s 2021 Performance Shares subject to divisional financial performance will no longer be assessed against Catch GTV 
and CLV/CPA ratio with Kmart Group EBT and ROC being the relevant performance conditions from this time. There was no incremental 
fair value on the date of this modification.

The table below provides further detail on the performance conditions including how the testing and vesting, if applicable, will occur:

Measure

Relative TSR

Detail

The rTSR condition measures the performance of an ordinary Wesfarmers share (including the value of any 
dividend and any other shareholder benefits paid during the performance period) against total shareholder return 
performance of a comparator group of companies, comprising the S&P/ASX 100 Index, over the same period. 

TSR performance is independently assessed over the performance period against the constituents of the S&P/
ASX 100 Index as at the start of the performance period. 

Vesting schedule against rTSR:

Percentile ranking

Percentage of awards vesting

Below the 50th percentile
Equal to the 50th percentile
Between the 50th and 75th percentile

Equal to the 75th percentile or above

0% vesting
50% vesting
Straight-line vesting between 50% and 100%, i.e. an additional 2% of 
awards vest for each percentile increase
100% vesting

Wesfarmers’ rTSR was chosen because it provides a relative external market performance measure having 
regard to Wesfarmers’ ASX 100 peers and ensures that all executive KMP are remunerated in relation to Group 
results.

120

 Wesfarmers 2022 Annual Report

Remuneration report (audited)

Divisional financial 
performance

Divisional EBT and ROC
The EBT condition measures the respective division’s before tax profit against its profit targets, subject to 
achieving an average ROC gate over the four-year performance period. ROC is calculated as divisional EBT 
divided by divisional rolling 12 months capital employed, where capital employed excludes right-of-use assets 
and lease liabilities. Both the EBT targets and average ROC gate have been calculated using the budget and 
targets in the respective division’s Corporate Plan. 

The ROC gate has been set at 90 per cent of the average ROC target over the four-year performance period. 
Subject to the ROC gate being passed, a portion of the Performance Shares will vest for achievement against 
the annual EBT targets. The annual EBT target is individually weighted for each year of the performance period, 
with a 40 per cent weighting to the first year of the performance period, followed by 30 per cent, 20 per cent and 
10 per cent weighting for years two, three and four respectively. 

The EBT and ROC results are calculated after the preparation and audit of the financial statements following the 
end of the final year of the performance period and assessed against the targets set.

Vesting schedule against EBT and ROC:

Subject to achieving the four-year average ROC gate, 

Annual EBT result 

Below 90% of target

Equal to 90% of target

Percentage of awards vesting

0% vesting

50% vesting

Between 90% and 100% of target

Straight-line vesting between 90% and 100%

Equal to 100% of target or above

100% vesting

Divisional annual EBT, subject to average ROC, was chosen to ensure that the remuneration of divisional 
managing directors is directly linked to the achievement of long-term financial returns for the business for which 
they are directly accountable. 

The EBT and ROC targets may be adjusted, where the Board considers it appropriate to do so, so that 
participants are not unfairly advantaged or disadvantaged, for example, due to portfolio management activity.

Catch GTV and CLV/CPA ratio

The GTV condition measures the total price paid by Catch’s customers for all of the items sold via Catch, subject 
to achieving an average CLV/CPA ratio gate over the four-year performance period. The GTV targets and the 
CLV/CPA ratio gate are set by the Board.

Subject to the CLV/CPA ratio gate being passed, a portion of the Performance Shares will vest for achievement 
of the annual GTV targets. The annual GTV target is individually weighted for each year of the performance 
period, with a 40 per cent weighting to the first year of the performance period. In June 2022, in recognition 
that Catch would cease to be included within the Kmart Group from 1 July 2022 and instead be included within 
the OneDigital division, the Board approved that from 1 July 2022, the portion of Mr Bailey’s 2021 Performance 
Shares subject to divisional financial performance will no longer be assessed against Catch GTV and CLV/CPA 
ratio with Kmart Group EBT and ROC being the relevant performance conditions from this time. 

The GTV and CLV/CPA ratio results are calculated after the preparation and audit of the financial statements 
following the end of the final year of the performance period and assessed against the targets set.

Vesting schedule against GTV and CLV/CPA ratio:

Subject to achieving the four-year average CLV/CPA ratio gate,

Annual GTV result 

Below 90% of target

Equal to 90% of target

Percentage of awards vesting

0% vesting

50% vesting

Between 90% and 100% of target

Straight-line vesting between 90% and 100%

Equal to 100% of target or above

100% vesting

GTV and the CLV/CPA ratio were chosen as measures to ensure the remuneration of Mr Bailey is directly linked 
to the long-term success of Catch, noting that this requires specific metrics as Catch is a marketplace with 
multiple sellers transacting.

The GTV and the CLV/CPA ratio targets may be adjusted, where the Board considers it appropriate to do so, so 
that Mr Bailey is not unfairly advantaged or disadvantaged, for example, due to portfolio management activity.

Wesfarmers’ portfolio 
management and 
investment outcomes

Wesfarmers' portfolio management and investment outcomes were chosen to recognise the criticality of decision-
making with regards to potential acquisitions, investments and disposals on shareholder value creation.

At the end of the four-year performance period, the Board will consider the performance of the Group Managing 
Director and the Group Chief Financial Officer in relation to the acquisition, investment and disposal activities of 
the Group over that period. 

Throughout the performance period, the Board maintains a log of the portfolio management and investment 
decisions and rationale, including the decisions not to proceed with portfolio changes or investments. At the 
end of the performance period, the Board will consider the validity of these decisions from a shareholder value 
creation perspective, with a greater weighting placed upon decisions made in the first year of the performance 
period.  

Wesfarmers 2022 Annual Report

121

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Directors' report

Remuneration report (audited)

Further terms of the 2021 KEEPP

The table below sets out further terms applying to Deferred Shares and Performance Shares granted under the 2021 KEEPP.

Cessation of  
employment

If an executive KMP ceases employment with Wesfarmers before the end of the forfeiture period, restriction period 
or performance period (as applicable), their entitlement to the shares (if any) will depend on the circumstances 
of their departure. The table below summarises the treatment that will generally apply, subject to the Board's 
discretion to determine a different treatment to the treatment outlined below.

Reason

Resignation

Dismissal by the 
Board for cause 
or significant 
underperformance 
or in circumstances 
justifying 'bad leaver' 
treatment

Breach of restraint 
under the executive’s 
service contract

All other reasons 
(including due to 
death, disability or 
serious injury)

Deferred Shares

Performance Shares

During the forfeiture period (i.e. within 
12 months of allocation) – the Deferred 
Shares will be forfeited.

After the forfeiture period has ended – 
the Deferred Shares will remain on foot 
and subject to the original conditions. 
Vesting outcomes will be assessed by 
the Board at the conclusion of the service 
period.

The Deferred Shares will be forfeited.

The Performance Shares will be 
forfeited.

The Performance Shares will be 
forfeited.

The Deferred Shares will be forfeited.

The Performance Shares will be 
forfeited.

The Deferred Shares will remain on foot 
and subject to the original conditions. 
Vesting outcomes will be assessed by 
the Board at the conclusion of the service 
period.

The Performance Shares will remain 
on foot and subject to the original 
conditions. Testing and vesting (if 
applicable) outcomes will be assessed 
by the Board at the conclusion of the 
performance period.

Following cessation of employment (where Deferred Shares remain on foot): 

If, following cessation of employment, the Board determines in good faith that:

 –

 –

the executive KMP has breached any restriction or undertaking owed to the Wesfarmers Group or any 
compromise or arrangement in relation to their cessation of employment; or

the executive KMP’s circumstances have changed making it no longer appropriate for them to retain the 
benefit of their award,

the Board may determine that:

 –

 –

some or all of the executive KMP’s vested or unvested Deferred Shares will be forfeited; and/or

the executive KMP is required to pay or repay as a debt the net proceeds of the sale of shares or dividends 
provided to them.

Change of control

If a change of control event occurs, the Board has broad discretion to determine the treatment of 
Deferred Shares and Performance Shares, having regard to any matter that the Board considers relevant.

Clawback and            
adjustment

Dividend and voting 
rights

The terms of the KEEPP allow for the Board to clawback or adjust any incentive awards (including cash or shares) 
which were granted, vest or may vest, or are released or may be released (as applicable). For example, these 
powers can be exercised as a result of a material misstatement in, or omission from, the financial statements or 
otherwise as a result of fraud, dishonesty or breach of obligations. In such circumstances, the Board may, up to 
the value of the overpaid remuneration, reduce or defer or otherwise require the repayment of any amount paid 
or payable to the executive to ensure no inappropriate benefit is derived. The Board has discretion to adjust any 
conditions applicable to an award, if considered appropriate.

The Deferred Shares and the Performance Shares carry both dividend and voting rights. While the shares are 
unquoted shares, any dividends determined are accumulated and are not paid until the shares are quoted. Where 
the Deferred Shares and the Performance Shares vest, the dividends are paid to the participant and where the 
Deferred Shares and the Performance Shares are forfeited, the dividends are paid to the trustee. The participant 
does not therefore receive any dividends on unvested Deferred Shares or Performance Shares.

122

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Remuneration report (audited)

5.8  Executive KMP share ownership

The Board considers it an important foundation of the Wesfarmers remuneration framework that the executive KMP hold a significant number 
of Wesfarmers shares to encourage them to behave like long-term owners and, as at the date of this report, all current executive KMP hold 
significantly more than their respective FAR in Wesfarmers shares.

The following table sets out the number of shares held directly, indirectly or beneficially by the current executive KMP (including their related 
parties). 

Balance at 
beginning 
of year1

Allocated 
under 
remuneration 
framework2

Breakdown of balance at year-end

Held in an equity plan

Net 

change3

Balance at 
year-end4

Vested and 
restricted5

Vested and 
unrestricted6

Not  
vested7

Other 
shares8

Name

R G Scott

A N Gianotti

I Bailey

M D Schneider

990,495

422,105

199,416

318,645

126,546

(4,625)

1,112,416

63,118

54,824

59,886

(2,498)

482,725

(34,283)

219,957

(42,294)

336,237

309,265

156,196

74,068

162,661

702,190

222,641

260,924

319,586

47,450

137,969

141,110

38,974

106,915

-

42,527

129,670

1,379

351,592

635,478

462,075

Total

1,930,661

304,374

(83,700)

2,151,335

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1  This number reflects the fully-paid ordinary shares held directly, vested equity under the incentive plans as well as unvested equity under the incentive plans. The 

unvested equity may include the 2018 KEEPP Performance Shares, the 2019 KEEPP Performance Shares and the 2020 KEEPP Deferred Shares and Performance 
Shares and the Performance-tested Shares, as appropriate. 

2  This number reflects the equity allocated under the 2021 KEEPP, as appropriate. 
3  The net change may include changes due to personal trades and forfeited equity.
4  This number reflects the fully-paid ordinary shares held directly, vested equity under the incentive plans as well as unvested equity under the incentive plans. The 

unvested equity may include the 2019 KEEPP Performance Shares, the 2020 KEEPP Performance Shares and the 2021 KEEPP Deferred Shares and Performance 
Shares, and the Performance-tested Shares, as appropriate. 

5  The vested and restricted equity includes any share-based awards received by the executive KMP that are now fully vested but remain subject to a restriction 

within the incentive plans. This includes the 2016 KEEPP Deferred Shares, the 2017 KEEPP Deferred Shares, the 2018 KEEPP Deferred Shares, the 2019 KEEPP 
Deferred Shares and the 2020 KEEPP Deferred Shares, as appropriate. 

6  The vested and unrestricted equity includes any share-based awards received by the executive KMP that are now fully vested and available to be removed from the 

incentive plans upon instruction from the executive KMP. 

7  The unvested equity includes the 2019 KEEPP Performance Shares, the 2020 KEEPP Performance Shares and the 2021 KEEPP Deferred Shares and Performance 

Shares, and the Performance-tested Shares, as appropriate. 

8  This number reflects the fully-paid ordinary shares held directly outside of an equity plan by the executive KMP including their related parties. 

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5.9  Executive service agreements

The remuneration and other terms of employment for the Group Managing Director, the Group Chief Financial Officer and other executive 
KMP are covered in formal employment contracts. All service agreements are for unlimited duration and may be terminated immediately for 
serious misconduct. All executives are entitled to receive pay in lieu of any accrued but untaken annual and long service leave on cessation of 
employment.

The executive KMP must give a minimum 12 months’ notice should they wish to resign and Wesfarmers must give 12 months’ notice should it 
wish to terminate employment (other than for cause). 

The Group Managing Director and the Group Chief Financial Officer may terminate their employment within 30 days of an event giving rise 
to fundamental change. This includes Mr Scott ceasing to be the most senior executive of the Group, a delisting of Wesfarmers or a material 
reduction in role, status or delegated authority.

In addition, and upon further payment (where required), Wesfarmers may invoke a restraint period of up to 12 months following separation, 
preventing the executive KMP from engaging in any business activity with competitors of the Group.

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Directors' report

Remuneration report (audited)

Non-executive director remuneration

6.  NON-EXECUTIVE DIRECTORS

6.1   Overview of non-executive director remuneration policy and arrangements

Our policy objective

To provide market competitive remuneration for non-executive directors

Aggregate fees approved by shareholders

The current maximum aggregate fee pool for non-executive directors of $3,600,000 was approved by shareholders at the 2015 Annual General 
Meeting. Fees paid to Wesfarmers’ non-executive directors for membership of the Wesfarmers Board and committees and superannuation 
contributions made on behalf of the non-executive directors in accordance with Wesfarmers’ statutory superannuation obligations, are included 
in this aggregate fee pool.

Regular reviews of remuneration

The Board periodically reviews the level of fees paid to the non-executive directors, including consideration of external benchmarking. 

In June 2022, the Board reviewed the main Board member fee and the committee fees payable to the non-executive directors having regard to 
benchmark data, market position and relative fees. After consideration, the Board resolved to not amend the fees payable to the non-executive 
directors for the 2023 financial year.

6.2   Non-executive director fees and other benefits

The fees shown in the table below (inclusive of superannuation) took effect from 1 January 2021 and applied throughout the 2022 financial year.

Fees/benefits

Description

Board fees

Chairman – M A Chaney

Members – all non-executive directors1

Committee fees

Audit and Risk Committee

Chairman – S L Warburton

Members – J A Westacott, S W English, A Sabharwal

Remuneration Committee

Chairman – M Roche

Members – M A Chaney2, W G Osborn1 , V M Wallace, A M Watkins3, A J Cransberg4 

Nomination Committee

Chairman – M A Chaney

Members – all non-executive directors1

2022 ($)

770,000

240,000

70,000

40,000

60,000

30,000

No fees

No fees

Superannuation

Made to the Mercer Tailored Super Plan or another regulated superannuation fund. An amount is 
deducted from gross fees to meet statutory superannuation obligations.

1  W G Osborn retired from the Board of Wesfarmers Limited on 21 October 2021.
2  The Chairman of the Board does not receive a separate fee for membership of any of the Board’s committees.
3  A M Watkins was appointed to the Board of Wesfarmers Limited and as a member of the Remuneration Committee and the Nomination Committee , effective 

1 September 2021.

4  A J Cransberg was appointed to the Board of Wesfarmers Limited and as a member of the Remuneration Committee and the Nomination Committee, effective 

1 October 2021.

124

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Remuneration report (audited)

6.3  Non-executive director remuneration

The fees paid or payable to the non-executive directors in relation to the 2022 financial year are set out below:

Short-term 
benef its

Post-employment 
benef its

Total

Non-executive directors

M A Chaney

A J Cransberg3

S W English

M Roche

A Sabharwal4

V M Wallace

S L Warburton

A M Watkins5 

J A Westacott

2022

2021

2022

2022

2021

2022

2021

2022

2021

2022

2021

2022

2021

2022

2022

2021

Former non-executive directors

W G  Osborn6

D L Smith-Gander7

Total

2022

2021

2021

2022

2021

Fees –  
Wesfarmers Limited

($)

746,432

748,306

184,824

256,432

253,306

294,108

278,729

280,000

112,618

246,432

248,729

286,432

283,306

205,279

280,000

269,576

82,144

243,306

94,219

2,862,083

2,532,095

Other 
benef its1 

($)

Superannuation2

($)

($)

81,636

62,805

52,450

70,125

60,151

70,125

60,151

70,125

24,720

70,125

60,151

70,125

60,151

58,213

70,125

60,151

36,762

60,151

46,809

649,811

495,240

23,568

21,694

17,676

23,568

21,694

5,892

16,271

-

4,049

23,568

16,271

23,568

21,694

19,721

-

5,424

7,856

21,694

5,424

145,417

134,215

851,636

832,805

254,950

350,125

335,151

370,125

355,151

350,125

141,387

340,125

325,151

380,125

365,151

283,213

350,125

335,151

126,762

325,151

146,452

3,657,311

3,161,550

1  Short-term benefits, ‘Other benefits’, includes the cost of directors' and officers' liability insurance and the cost of other business-related expenses. 

The amount shown under short-term benefits, ‘other benefits’ for W G Osborn is inclusive of a retirement gift.

2  Superannuation contributions are made on behalf of non-executive directors in accordance with Wesfarmers’ statutory superannuation obligations, except where 
approval was obtained from the Australian Taxation Office by individual non-executive directors to be exempt from making superannuation contributions due to 
obligations being met by other employers. Also included is any part of a non-executive director’s fees that have been sacrificed into superannuation.

3  A J Cransberg was appointed as a non-executive director on 1 October 2021.
4  A Sabharwal was appointed as a non-executive director on 1 February 2021.
5  A M Watkins was appointed as a non-executive director on 1 September 2021.
6  W G Osborn retired from the Board, effective 21 October 2021.
7  D L Smith-Gander retired from the Board, effective 12 November 2020.

Wesfarmers 2022 Annual Report

125

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Directors' report

Remuneration report (audited)

6.4  Non-executive director share ownership

The Board considers it an important foundation of the Wesfarmers remuneration framework that the directors hold a significant number of 
Wesfarmers shares to encourage them to behave like long-term owners. Directors are required to hold a minimum of 1,000 Wesfarmers shares 
within two months of appointment and are also expected to increase their holdings in Wesfarmers shares to the equivalent of their annual main 
board fee within a five-year period of appointment.

The following table sets out the number of shares held directly, indirectly or beneficially by directors and former directors (including their related 
parties).

Name

M A Chaney

A J Cransberg4

S W English

W G Osborn5

M Roche

A Sabharwal

V M Wallace

S L Warburton

A M Watkins6

J A Westacott

Total

Balance at beginning of year1

Net change2

Balance at year-end3

87,597

-

3,399

14,728

5,000

1,017

13,983

7,036

-

6,788

139,548

-

4,226

110

-

4,510

5,033

-

500

9,000

-

23,379

87,597

4,226

3,509

14,728

9,510

6,050

13,983

7,536

9,000

6,788

162,927

1  This number reflects the fully-paid ordinary shares held directly as well as vested and unrestricted equity under plans.
2  The net change includes changes due to personal trades.
3  This number reflects the fully-paid ordinary shares held directly as well as vested and unrestricted equity under plans. Where a director ceased to be a director 

throughout the year, 'Balance at year-end' reflects the balance of equity as at the date they ceased to be a director.

4  The information for A J Cransberg reflects his time since appointment to the Board and as a member of the KMP, from 1 October 2021.
5  W G Osborn retired from the Board and ceased to be a member of the KMP, effective 21 October 2021.
6  The information for A M Watkins reflects her time since appointment to the Board and as a member of the KMP, from 1 September 2021.

126

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Remuneration report (audited)

Other remuneration information

7.  FURTHER INFORMATION ON REMUNERATION

7.1  Share trading restrictions

Wesfarmers’ Securities Trading Policy reflects the Corporations Act 2001 prohibition on KMP and their closely related parties entering into any 
arrangement that would have the effect of limiting the KMP’s exposure to risk relating to an element of their remuneration that remains subject to 
restrictions on disposal.

Wesfarmers directors, the Wesfarmers Leadership Team, and certain members of their immediate family and controlled entities are also required 
to obtain clearance from the Wesfarmers Company Secretary for the sale, purchase or transfer of Wesfarmers and BWP Trust securities and for 
short selling, short-term trading, security interests, margin loans and hedging relating to Wesfarmers and BWP Trust securities. The Wesfarmers 
Company Secretary refers all requests for clearance to at least two members of the Disclosure Committee. Clearance from the Chairman is also 
required for requests from Wesfarmers directors. Clearance cannot be requested for dealings that are subject to the Corporations Act 2001 
prohibition referred to above.

The policy is available in the corporate governance section of the company’s website at www.wesfarmers.com.au/cg. Breaches of the policy 
are subject to disciplinary action, which may include termination of employment.

7.2  Other transactions and balances with key management personnel

From time to time, the executive KMP and directors of the company or its controlled entities, or their related entities, may purchase goods 
or services from the Group. These purchases are on the same terms and conditions as those entered into by other Group team members or 
customers and are minor or domestic in nature.

There were no loans made during the year, or remaining unsettled at 30 June 2022, between Wesfarmers and its directors and executive KMP 
and/or their related parties.

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8. 

INDEPENDENT AUDIT OF REMUNERATION REPORT

The remuneration report has been audited by Ernst & Young. Please see page 182 of this annual report for Ernst & Young’s report on the 
remuneration report. 

The directors’ report, including the remuneration report, is signed in accordance with a resolution of the directors of Wesfarmers Limited.

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M A Chaney AO
Chairman

Perth
25 August 2022

R G Scott
Managing Director

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127

 
 
 
 
 
 
 
 
 
 
 
 
 
 
128

 Wesfarmers 2022 Annual Report

Financial statements
For the year ended 30 June 2022 – Wesfarmers Limited and its controlled entities

Financial statements

Income statement
Statement of comprehensive income
Balance sheet
Cash flow statement
Statement of changes in equity

Notes to the financial statements

About this report
Segment information

Group performance

1. Revenue and other income
2. Expenses
3. Tax expense

Group balance sheet

4. Cash and cash equivalents
5. Receivables
6. Inventories
7. Other financial assets
8. Property, plant and equipment
9. Goodwill and intangible assets

10. Mine properties
11. Leases
12. Provisions

Capital

13. Capital management
14. Dividends and distributions
15. Equity and reserves
16. Earnings per share
17. Interest-bearing loans and borrowings

Risk

18. Financial risk management
19. Hedging
20. Impairment of non-financial assets

Group information

21. Associates and joint arrangements
22. Subsidiaries
23. Business combinations
24. Parent disclosures
25. Deed of Cross Guarantee
26. Related party transactions

Other

27. Commitments and contingencies
28. Events after the reporting period
29. Auditors’ remuneration
30. Other accounting policies
31. Tax transparency disclosures
32. Director and executive disclosures
33. Share-based payments

130
131
132
133
134

135
137

140
141
142

143
143
144
144
145
146
147
148
150

152
153
153
154
155

156
161
163

164
166
170
171
171
172

173
173
173
174
175
175
176

Wesfarmers 2022 Annual Report

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Financial statements

Income statement
For the year ended 30 June 2022

Revenue

Expenses 
Raw materials and inventory 
Employee benefits expense
Freight and other related expenses
Occupancy-related expenses
Depreciation and amortisation
Impairment expenses
Other expenses 
Total expenses

Other income
Share of net profits of associates and joint ventures

Earnings before finance costs and income tax expense
Interest on lease liabilities
Other finance costs

Profit before income tax expense 
Income tax expense

Profit attributable to members of the parent 

Earnings per share attributable to ordinary equity holders of the parent
Basic earnings per share 
Diluted earnings per share 

Note

1

2

2
2
2
2

1
21

11
2

3

16

Consolidated
2022
$m

2021
$m

36,838 

33,941 

(23,438)
(5,840)
(668)
(442)
(1,575)
(33)
(1,549)
(33,545)

167 
173 
340 

3,633 
(217)
(96)

3,320 
(968)

2,352 

cents
207.8 
207.6 

(20,877)
(5,500)
(540)
(461)
(1,509)
(70)
(1,457)
(30,414)

87 
103 
190 

3,717 
(226)
(118)

3,373 
(993)

2,380 

cents
210.4 
210.2 

130

 Wesfarmers 2022 Annual Report

Statement of comprehensive income
For the year ended 30 June 2022

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Profit attributable to members of the parent

Other comprehensive income

Items that may be reclassified to profit or loss:
Foreign currency translation reserve
Exchange differences on translation of foreign operations

Cash flow hedge reserve
Unrealised gains/(losses) on cash flow hedges 
Realised losses transferred to net profit
Realised (gains)/losses transferred to non-financial assets
Share of associates and joint ventures reserves
Tax effect

Items that will not be reclassified to profit or loss:
Financial assets reserve
Changes in the fair value of financial assets designated at  
fair value through other comprehensive income
Share of associates and joint ventures reserves
Tax effect 

Retained earnings
Remeasurement loss on defined benefit plan
Tax effect
Other comprehensive income for the year, net of tax

Note

15

15

3

15

3

Consolidated
2022

$m

 2,352 

2021

$m

2,380

(11)

(8)

286 
-  
(175)
11 
(40)

43 
(6)
(13)

-  
-  
95 

(191)
-  
308 
5 
(38)

(3)
-  
1 

-  
-  
74 

Total comprehensive income for the year, net of tax, attributable to members of the parent 

2,447 

2,454 

Wesfarmers 2022 Annual Report

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Financial statements

Balance sheet
As at 30 June 2022

ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories 
Income tax receivable 
Derivatives 
Other
Total current assets 

Non-current assets
Investments in associates and joint ventures
Other financial assets
Deferred tax assets
Property, plant and equipment
Goodwill and intangible assets
Mine properties
Right-of-use assets
Derivatives 
Other
Total non-current assets 
Total assets 

LIABILITIES
Current liabilities
Trade and other payables 
Interest-bearing loans and borrowings 
Lease liabilities
Income tax payable 
Provisions
Derivatives 
Other
Total current liabilities 

Non-current liabilities
Interest-bearing loans and borrowings 
Lease liabilities
Provisions
Derivatives 
Total non-current liabilities 
Total liabilities
Net assets 

EQUITY
Equity attributable to equity holders of the parent
Issued capital
Reserved shares
Retained earnings
Reserves
Total equity 

132

 Wesfarmers 2022 Annual Report

Consolidated
2022

Note

$m

2021

$m

 3,023 
 1,247 
 4,502 
 - 
 152 
 172 
 9,096 

 775 
 1,124 
 613 
 3,496 
 3,902 
 865 
 6,035 
 282 
 26 
 17,118 
 26,214 

 4,234 
 950 
 969 
 349 
 1,152 
 43 
 218 
 7,915 

 2,072 
 6,136 
 374 
 2 
 8,584 
 16,499 
 9,715 

 15,826 
(102)
60 
(6,069)
 9,715 

4
5
6

19

21
7
3
8
9
10
11
19

17
11

12
19

17
11
12
19

15
15

15

 705 
 2,094 
 6,084 
 6 
 452 
 264 
 9,605 

 934 
 677 
 572 
 3,621 
 4,651 
 1,150 
 6,014 
 8 
 39 
 17,666 
 27,271 

 5,362 
 988 
 1,100 
 - 
 1,154 
 2 
 287 
 8,893 

 3,970 
 6,023 
 374 
 30 
 10,397 
 19,290 
 7,981 

 13,574 
 (102)
 485 
 (5,976)
 7,981 

 
Cash flow statement
For the year ended 30 June 2022

Cash flows from operating activities
Receipts from customers 
Payments to suppliers and employees
Dividends and distributions received from associates
Dividends received from other investments
Interest received
Interest component of lease payments
Borrowing costs
Income tax paid
Net cash flows from operating activities

Cash flows from investing activities
Payments for property, plant and equipment and intangibles
Payments for mineral exploration
Payments for mine properties and development
Proceeds from sale of property, plant and equipment and intangibles
Net proceeds from sale of businesses
Net proceeds from disposals of interests in associates and other investments
Net investments in associates and joint ventures
Acquisition of subsidiaries, net of cash acquired
Purchase of other financial assets
Net cash flows used in investing activities 

Cash flows from financing activities
Proceeds from borrowings
Repayment of borrowings
Net proceeds from/(repayment of) revolving facilities
Principal component of lease payments
Equity dividends paid 
Capital return paid
Net cash flows used in financing activities 

Net (decrease)/increase in cash and cash equivalents 
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

Consolidated
2022

Note

$m

2021

$m

40,557 
(36,754)
48 
54 
5 
(217)
(92)
(1,300)
2,301 

(802)
(4)
(338)
260 
-  
501 
(28)
(773)
(7)
(1,191)

938 
(1,166)
2,023 
(1,029)
(1,927)
(2,267)
(3,428)

(2,318)
3,023 
705 

37,403 
(32,773)
51 
40 
12 
(226)
(109)
(1,015)
3,383 

(843)
(22)
(31)
264 
5 
-  
(8)
(2)
(5)
(642)

1,000 
(500)
(71)
(986)
(2,074)
-  
(2,631)

110 
2,913 
3,023 

4

4
4
4
4

23

4

Wesfarmers 2022 Annual Report

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Financial statements

Statement of changes in equity
For the year ended 30 June 2022

Consolidated

Note

$m

$m

$m

$m

Attributable to equity holders of the parent

Issued Reserved
shares
capital

Retained Reserves
earnings

Balance at 1 July 2021
Net profit for the year
Other comprehensive income
Exchange differences on translation of foreign operations
Changes in the fair value of cash flow hedges, net of tax
Changes in the fair value of financial assets designated at  
fair value through other comprehensive income, net of tax
Remeasurement loss on defined benefit plan, net of tax
Total other comprehensive income for the period, net of tax
Total comprehensive income for the period, net of tax
Share-based payment transactions
Equity dividends
Capital return

Balance at 30 June 2022

Balance at 1 July 2020 
Net profit for the year
Other comprehensive income
Exchange differences on translation of foreign operations
Changes in the fair value of cash flow hedges, net of tax
Changes in the fair value of financial assets designated at  
fair value through other comprehensive income, net of tax
Remeasurement loss on defined benefit plan, net of tax
Total other comprehensive income for the period, net of tax
Total comprehensive income for the period, net of tax
Share-based payment transactions
Acquisition of shares on-market for Key Executive Equity 
Performance Plan (KEEPP)
Acquisition of shares on-market for Performance shares
Equity dividends

Balance at 30 June 2021

15,826 
-  

(102)
-  

60 
2,352 

(6,069)
-  

15
15

15
15

15
14
14,15

15
15

15
15

15

15
15
14

-  
-  

-  
-  
-  
-  
16 
-  
(2,268)
(2,252)
13,574 

15,818 
-  

-  
-  

-  
-  
-  
-  
8 

-  
-  
-  
8 
15,826 

-  
-  

-  
-  
-  
-  
-  
-  
-  
-  
(102)

(89)
-  

-  
-  

-  
-  
-  
-  
-  

(10)
(3)
-  
(13)
(102)

-  
-  

(11)
82 

-  
-  
-  
2,352 
-  
(1,927)
-  
(1,927)
485 

(245)
2,380 

-  
-  

-  
-  
-  
2,380 
-  

-  
-  
(2,075)
(2,075)
60 

24 
-  
95 
95 
(2)
-  
-  
(2)
(5,976)

(6,140)
-  

(8)
84 

(2)
-  
74 
74 
(3)

-  
-  
-  
(3)
(6,069)

Total
equity

$m

9,715 
2,352 

(11)
82 

24 
-  
95 
2,447 
14 
(1,927)
(2,268)
(4,181)
7,981 

9,344 
2,380 

(8)
84 

(2)
-  
74 
2,454 
5 

(10)
(3)
(2,075)
(2,083)
9,715 

134

 Wesfarmers 2022 Annual Report

Notes to the financial statements: About this report
For the year ended 30 June 2022

ABOUT THIS REPORT
Wesfarmers Limited (referred to as ‘Wesfarmers’) is a for-profit 
company limited by shares incorporated and domiciled in Australia 
whose shares are publicly traded on the Australian Securities 
Exchange (ASX). The nature of the operations and principal activities 
of Wesfarmers and its subsidiaries (referred to as ‘the Group’) are 
described in the segment information.

The consolidated financial report of the Group for the financial year 
ended 30 June 2022 (FY2022) was authorised for issue in accordance 
with a resolution of the directors on 25 August 2022. The Directors 
have the power to amend and reissue the financial report. 

The financial report is a general purpose financial report which:

•  has been prepared in accordance with the requirements of the 
Corporations Act 2001, Australian Accounting Standards and 
other authoritative pronouncements of the Australian Accounting 
Standards Board (AASB) and International Financial Reporting 
Standards (IFRS) as issued by the International Accounting 
Standards Board (IASB);

•  has been prepared on a historical cost basis, except for 

investment properties held by associates and certain financial 
instruments which have been measured at fair value. The carrying 
values of recognised assets and liabilities that are the hedged 
items in fair value hedge relationships, which are otherwise 
carried at amortised cost, are adjusted to record changes in the 
fair values attributable to the risks that are being hedged;

• 

is presented in Australian dollars with all values rounded to the 
nearest million dollars ($’000,000) unless otherwise stated, in 
accordance with ASIC Corporations (Rounding in Financial/
Directors’ Reports) Instrument 2016/191;

•  presents reclassified comparative information where required for 

consistency with the current year’s presentation;

•  adopts all new and amended Accounting Standards and 

Interpretations issued by the AASB that are relevant to the 
Group and effective for reporting periods beginning on or before 
1 July 2021. Refer to note 30 for further details; and

•  does not early adopt Accounting Standards and Interpretations 
that have been issued or amended but are not yet effective.

BASIS OF CONSOLIDATION
The consolidated financial statements comprise the financial 
statements of the Group. A list of controlled entities (subsidiaries) at 
year-end is contained in note 22.

The financial statements of subsidiaries are prepared for the same 
reporting period as the parent company, using consistent accounting 
policies. Adjustments are made to bring into line any dissimilar 
accounting policies that may exist.

In preparing the consolidated financial statements, all intercompany 
balances and transactions, income and expenses and profits and 
losses resulting from intra-Group transactions have been eliminated. 
Subsidiaries are consolidated from the date on which control is 
obtained to the date on which control is disposed. The acquisition 
of subsidiaries is accounted for using the acquisition method 
of accounting. 

If the Group loses control over a subsidiary, it derecognises the related 
assets (including goodwill), liabilities, non-controlling interest and other 
components of equity, while any resultant gain or loss is recognised in 
profit or loss. Any investment retained is recognised at fair value.

KEY JUDGEMENTS AND ESTIMATES
In the process of applying the Group’s accounting policies, 
management has made a number of judgements and applied 
estimates of future events. 

The continued impact of COVID-19 has been considered in applying 
the Group's key judgements and estimates. As these are subject 
to increased uncertainty, actual outcomes may differ from the 
applied estimates. 

Judgements and estimates which are material to the financial report 
are found in the following notes:

Page

140

142

143

144

145

146

147

148

150

163

164

Note 1

Note 3

Revenue and other income

Tax expense

Note 5

Receivables

Note 6

Note 8

Note 9

Inventories

Property, plant and equipment

Goodwill and intangible assets

Note 10

Mine properties

Note 11

Leases

Note 12

Provisions

Note 20

Impairment of non-financial assets

Note 21

Associates and joint arrangements

FOREIGN CURRENCY 
The functional currencies of overseas subsidiaries are listed in 
note 22. As at the reporting date, the assets and liabilities of overseas 
subsidiaries are translated into Australian dollars at the rate of 
exchange ruling at the balance sheet date and the income statements 
are translated at the average exchange rates for the year. The 
exchange differences arising on the translation are taken directly to a 
separate component of equity.

Transactions in foreign currencies are initially recorded in the functional 
currency at the exchange rates ruling at the date of the transaction. 
Monetary assets and liabilities denominated in foreign currencies are 
translated at the rate of exchange ruling at the balance sheet date. 
Exchange differences arising from the application of these procedures 
are taken to the income statement, with the exception of differences 
on foreign currency-denominated borrowings that provide a hedge 
against a net investment in a foreign entity, which are taken directly to 
equity until the disposal of the net investment and are then recognised 
in the income statement. Tax charges and credits attributable to 
exchange differences on those borrowings are also recognised in 
equity.

OTHER ACCOUNTING POLICIES
Significant and other accounting policies that summarise the 
measurement basis used and are relevant to an understanding of 
the financial statements are provided throughout the notes to the 
financial statements.

Wesfarmers 2022 Annual Report

135

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Financial statements

Notes to the financial statements: About this report
For the year ended 30 June 2022

NOTES TO THE FINANCIAL STATEMENTS
The notes include information which is required to understand the 
financial statements and is material and relevant to the operations, 
financial position and performance of the Group. Information is 
considered material and relevant if, for example:

•  Group balance sheet: provides a breakdown of individual line 
items in the balance sheet that the directors consider most 
relevant and summarises the accounting policies, judgements 
and estimates relevant to understanding these line items;

the amount in question is significant because of its size              
or nature;

•  Capital: provides information about the capital management 
practices of the Group and shareholder returns for the year;

it is important for understanding the results of the Group;

it helps to explain the impact of significant changes in the 
Group’s business – for example, acquisitions, disposals and 
impairment writedowns; or

it relates to an aspect of the Group’s operations that is 
important to its future performance.

The notes are organised into the following sections:

•  Group performance: provides a breakdown of individual line 

items in the income statement that the directors consider most 
relevant and summarises the accounting policies, judgements 
and estimates relevant to understanding these line items;

•  Risk: discusses the Group’s exposure to various financial risks, 
explains how these affect the Group’s financial position and 
performance and what the Group does to manage these risks;

•  Group information: explains aspects of the Group structure 
and how changes have affected the financial position and 
performance of the Group, as well as disclosing related party 
transactions and balances; and

•  Other: provides information about items that are not recognised 
in the financial statements but could potentially have a significant 
impact on the Group’s financial position and performance; 
and provides information on items which require disclosure 
to comply with Australian Accounting Standards and other 
regulatory pronouncements.

• 

• 

• 

• 

SIGNIFICANT ITEMS IN THE CURRENT REPORTING PERIOD

Capital management

Issue of sustainability-linked bonds

In October 2021, the Group issued EUR600 million (A$938 million) of 
12-year sustainability-linked bonds, maturing in October 2033. Refer 
to note 17 for further information.

Capital return

On 2 December 2021, a capital return of 200 cents per share was 
paid to shareholders. The total amount of the distribution was 
$2,268 million. Refer to note 14 for further information.

Acquisition of Australian Pharmaceutical 
Industries Ltd
On 31 March 2022, Wesfarmers, through its wholly-owned 
subsidiary WFM Investments Pty Ltd, completed the acquisition of 
Australian Pharmaceutical Industries Ltd (API) for consideration 
of $754 million. API is the foundation business of the Health segment. 
The results presented in this report are for the period from 
31 March 2022 to 30 June 2022. Refer to note 23 for further 
information.

Wesfarmers OneDigital
In April 2022, the Group determined that from 1 July 2022, Catch will 
move from the Kmart Group segment and join a newly formed data 
and digital division, named Wesfarmers OneDigital (OneDigital). As at 
30 June 2022, Catch remained part of the Kmart Group segment and 
OneDigital is reported within Other. This is consistent with reporting 
provided to the chief operating decision-makers. Subsequent to 
year-end, the segments were restructured to reflect these changes. 

Sale of 2.1 per cent interest in Coles Group 
Limited
On 5 April 2022, Wesfarmers sold 28,169,015 shares in Coles Group 
Limited (Coles) for proceeds of $498 million, net of transaction costs. 
As a result of the sale, Wesfarmers' minority interest in Coles reduced 
from 4.9 per cent to 2.8 per cent. The interest is held as a financial 
asset at fair value through other comprehensive income (FVOCI). The 
realised gain on sale is recognised in other comprehensive income. 
Refer to note 7 for further information. 

Impact of COVID-19
The Group’s retail businesses, particularly Kmart Group, have been 
impacted by COVID-19-related disruptions, with a significant loss 
of store trading days due to government-mandated store closures 
between July and October 2021. Trading conditions through the 
middle of FY2022 were impacted by rising cases of the COVID-19 
Omicron variant, which led to reduced customer traffic to stores and 
elevated team member absenteeism. The Group has incurred higher 
costs in FY2022 associated with paying team members when no 
meaningful work was available during lockdowns, providing additional 
support to team members when required to isolate, rising freight 
and transport costs and managing ongoing global supply chain 
disruptions. In addition, the rapid temporary shift to online channels, 
combined with team member availability, also impacted productivity 
and profitability during the period.

136

 Wesfarmers 2022 Annual Report

Notes to the financial statements: Segment information
For the year ended 30 June 2022

SEGMENT INFORMATION
The Group’s operating segments are organised and managed 
separately according to the nature of the products and 
services provided. 

Officeworks
•  Retailer and supplier of office products and solutions for 
households, small-to-medium sized businesses, and the 
education sector.

Industrial and Safety
•  Supplier and distributor of maintenance, repair and operating 

products;

•  Manufacturer and marketing of industrial gases and equipment;

•  Supplier, manufacturer and distributor of workwear clothing in 

Australia and internationally;

•  Specialised supplier and distributor of industrial safety products 

and services; and

•  Provider of risk management and compliance services.

Health
•  Wholesaler and retailer of pharmaceutical, health, wellbeing and 

beauty products;

•  Provider of clinical cosmetic and skin care treatments; and

•  Provider of retail support services to pharmacies through 

Priceline Pharmacy franchises and banner brands.

Other
Includes:

•  Food and staples retailing: 2.8 per cent (2021: 4.9 per cent) 

interest in Coles Group Limited;

•  Forest products: non-controlling interest in Wespine Industries 

Pty Ltd;

•  Property: non-controlling interest in BWP Trust;

• 

Investment banking: non-controlling interest in Gresham Partners 
Group Limited; 

•  OneDigital: includes the OnePass membership and OneData 

asset; and

•  Corporate: includes treasury, central and administrative support 
functions and other corporate entity expenses. Corporate is not 
considered an operating segment and includes activities that are 
not allocated to other operating segments.

Each segment represents a strategic business unit that offers 
different products and operates in different industries and markets. 
The Board and executive management team (the chief operating 
decision-makers) monitor the operating results of the business units 
separately for the purpose of making decisions about resource 
allocation and performance assessment.

The types of products and services from which each reportable 
segment derives its revenues are disclosed below. Segment 
performance is evaluated based on operating profit or loss (segment 
result), which in certain respects, is presented differently from 
operating profit or loss in the consolidated financial statements.

Interest income and other finance costs are not allocated to operating 
segments, as this type of activity is managed on a Group basis.

Transfer prices between business segments are set on an arm’s length 
basis in a manner similar to transactions with third parties. Segment 
revenue, expenses and results include transfers between business 
segments. Those transfers are eliminated on consolidation and are 
not considered material.

The operating segments and their respective types of products and 
services are as follows:

Bunnings
•  Retailer of building materials and home and garden improvement 

products; and

•  Servicing households and commercial customers including 

builders, trades and businesses.

Kmart Group
•  Kmart and Target: Retailers of apparel and general merchandise, 
including toys, leisure, entertainment, home and consumables.
•  Catch: Online retailer offering branded products on a first-party 

basis and a third-party online marketplace.

Chemicals, Energy and Fertilisers (WesCEF)
•  Manufacturer and marketer of chemicals for industry, mining and 

mineral processing;

•  Manufacturer and marketer of broadacre and horticultural 

fertilisers;

•  Marketer and distributor of LPG and LNG;

•  Manufacturer of wood-plastic composite decking and screening 

products; and

•  50 per cent joint operator of the Mt Holland lithium project.

Revenue from contracts with customers 
by segment for FY2022

Segment result for FY2022

$m

Bunnings

17,751

Kmart Group

9,556

WesCEF

Officeworks

Industrial and 
Safety

Health

Other

3,038

3,153

1,925

1,240

16

%

48.4

26.1

8.3

8.6

5.2

3.4

-

Bunnings

Kmart Group

WesCEF

Officeworks

Industrial and 
Safety

Health

Other

$m

2,204

418

540

181

92

%

64.5

12.2

15.8

5.3

2.7

(25)

(0.7)

6

0.2

Wesfarmers 2022 Annual Report

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Financial statements

Notes to the financial statements: Segment information
For the year ended 30 June 2022

SEGMENT INFORMATION

Revenue from contracts with customers
Other revenue
Segment revenue

EBITDA
Depreciation and amortisation 
Interest on lease liabilities
Segment result
Items not included in segment result4
Other finance costs
Profit before income tax expense
Income tax expense
Profit attributable to members of the parent 

Other segment information
Segment assets
Investments in associates and joint ventures
Tax assets
Total assets

Segment liabilities
Tax liabilities
Interest-bearing loans and borrowings
Total liabilities
Segment net assets
Other net assets5
Net assets

BUNNINGS1

KMART GROUP

WesCEF

OFFICEWORKS

INDUSTRIAL AND 

HEALTH2

OTHER3

CONSOLIDATED

2022
$m

2021
$m

17,751 
3 
 17,754 

 16,861 
 10 
 16,871 

 3,057 
 (740)
 (113)
 2,204 
 - 

 2,993 
 (692)
 (116)
 2,185 
-  

2022
$m

9,556 
79 
 9,635 

 1,029 
 (523)
 (88)
 418 
 - 

2021
$m

 9,914 
 68 
 9,982 

 1,326 
 (539)
 (94)
 693 
(59)

2022
$m

3,038 
3 
 3,041 

 634 
 (93)
 (1)
 540 
 - 

2021
$m

 2,144 
 2 
 2,146 

 473 
 (88)
 (1)
 384 
-  

SAFETY

2022

$m

2021

$m

2022

$m

2021

$m

2022

$m

2021

$m

2022

$m

2021

$m

2022

$m

3,153 

16 

 3,169 

 303 

 (113)

 (9)

 181 

 - 

2021

$m

 3,014 

 15 

 3,029 

 328 

 (106)

 (10)

 212 

-  

1,925 

 1,855 

1,240 

-  

 - 

-  

1,925 

 1,855 

 1,240 

 171 

 (75)

 (4)

 92 

 - 

 148 

 (74)

 (4)

 70 

-  

 (2)

 (22)

 (1)

 (25)

 - 

 8,817 
 17 

 8,289 
 17 

 6,103 
 - 

 6,040 
 - 

 4,403 
 85 

 2,676 
 81 

 2,040 

 1,892 

 1,805 

 1,712 

 2,025 

 3 

 - 

 2 

 - 

 - 

 (6,113)

 (5,944)

 (4,355)

 (4,656)

 (771)

 (473)

 (1,041)

 (985)

 (599)

 (583)

 (942)

 2,721 
 (2,896)
 (175)

 2,362 
 (2,078)
 284 

 1,748 
 105 
 1,853 

 1,384 
 428 
 1,812 

 3,717 
 (2,513)
 1,204 

 2,284 
 (1,106)
 1,178 

Capital expenditure6
Share of net profits of associates and joint 
ventures included in segment result7

 349 

 445 

 146 

 195 

 455 

 137 

-  

-  

-  

-  

14 

15 

1  The 2022 Bunnings segment result includes a net property contribution of $52 million (2021: loss of $10 million). 
2  The 2022 Health segment result includes non-cash expenses of $11 million relating to amortisation and trade through of the incremental asset value recognised as 

part of the acquisition and impairment costs of $21 million relating to Priceline company owned stores. 

3  The Other result includes dividends received from Wesfarmers' interest in Coles Group Limited and its 19.3 per cent interest in API which was held prior to the 

completion of the acquisition of API on 31 March 2022 and operating expenditure of $80 million in relation to OneDigital.

4  The 2021 Kmart Group segment result excludes restructuring costs of $59 million. 
5  Other net assets relate predominantly to intercompany financing arrangements and segment tax balances.
6  Capital expenditure, inclusive of property, plant and equipment, intangibles, mineral exploration and mine properties, includes accruals for costs incurred during the 

year. The amount excluding movements in accruals is $1,144 million (2021: $896 million), which includes $53 million (2021: nil) in Other relating to OneDigital.

7  The share of net profits of associates and joint ventures in the Other segment includes $121 million (2021: $65 million) from Wesfarmers’ 24.8 per cent share of the 

BWP Trust’s net profit for FY2022, which is predominantly comprised of gains from property revaluations.

138

 Wesfarmers 2022 Annual Report

 - 

 - 

 - 

 - 

 - 

 - 

 - 

-  

 - 

 - 

 - 

 - 

 - 

 - 

 - 

 - 

16 

58 

 74 

 16 

 (9)

 (1)

 6 

 - 

 9 

 49 

 58 

 17 

 (10)

 (1)

 6 

-  

 36,679 

 33,797 

 159 

 144 

 36,838 

 33,941 

 5,208 

 (1,575)

 (217)

 3,416 

 - 

 (96)

 3,320 

 (968)

 2,352 

 5,285 

 (1,509)

 (226)

 3,550 

(59)

 (118)

 3,373 

 (993)

 2,380 

 566 

 827 

 578 

 4,217 

 25,759 

 24,826 

 677 

 613 

 934 

 578 

 775 

 613 

 27,271 

 26,214 

 (511)

 - 

 (487)

 (349)

 (14,332)

 (13,128)

 (4,958)

 (3,022)

 (4,958)

 (349)

 (3,022)

 - 

 - 

 (19,290)

 (16,499)

 7,981 

 9,715 

 - 

 7,981 

 9,715 

 (3,498)

 6,438 

 2,940 

 1,649 

 3,359 

 5,008 

 73 

 2 

 1,159 

 906 

 157 

 88 

 173 

 103 

 1,002 

 61 

 907 

 175 

 1,063 

 1,082 

 68 

 65 

-  

-  

 1,208 

 1,129 

 1,083 

 (847)

 361 

 64 

 2 

 (778)

 351 

 62 

 - 

 (348)

 735 

 4 

 - 

Notes to the financial statements: Segment information
For the year ended 30 June 2022

S
T
A
T
E
M
E
N
T
S

I

F
N
A
N
C
A
L

I

OFFICEWORKS

INDUSTRIAL AND 
SAFETY

HEALTH2

OTHER3

CONSOLIDATED

2022
$m

2021
$m

2022
$m

2021
$m

2022
$m

2021
$m

2022
$m

3,153 
16 
 3,169 

 303 
 (113)
 (9)
 181 
 - 

2021
$m

 3,014 
 15 
 3,029 

 328 
 (106)
 (10)
 212 
-  

2022
$m

1,925 
-  
1,925 

 171 
 (75)
 (4)
 92 
 - 

2021
$m

 1,855 
 - 
 1,855 

 148 
 (74)
 (4)
 70 
-  

1,240 
-  
 1,240 

 (2)
 (22)
 (1)
 (25)
 - 

BUNNINGS1

KMART GROUP

WesCEF

2022

$m

2021

$m

17,751 

 16,861 

3 

 10 

 17,754 

 16,871 

 3,057 

 2,993 

 1,029 

 (740)

 (113)

 (692)

 (116)

 2,204 

 2,185 

 - 

-  

2022

$m

9,556 

79 

 9,635 

 (523)

 (88)

 418 

 - 

2021

$m

2022

$m

2021

$m

 9,914 

 68 

3,038 

 2,144 

3 

 2 

 9,982 

 3,041 

 2,146 

 1,326 

 (539)

 (94)

 693 

(59)

 634 

 (93)

 (1)

 540 

 - 

 473 

 (88)

 (1)

 384 

-  

Revenue from contracts with customers

Other revenue

Segment revenue

EBITDA

Depreciation and amortisation 

Interest on lease liabilities

Segment result

Items not included in segment result4

Other finance costs

Profit before income tax expense

Income tax expense

Profit attributable to members of the parent 

Interest-bearing loans and borrowings

Tax assets

Total assets

Segment liabilities

Tax liabilities

Total liabilities

Segment net assets

Other net assets5

Net assets

Capital expenditure6

Other segment information

Segment assets

Investments in associates and joint ventures

 17 

 17 

 - 

 - 

 85 

 81 

 8,817 

 8,289 

 6,103 

 6,040 

 4,403 

 2,676 

 2,040 
 3 

 1,892 
 - 

 1,805 
 2 

 1,712 
 - 

 2,025 
 - 

 (6,113)

 (5,944)

 (4,355)

 (4,656)

 (771)

 (473)

 (1,041)

 (985)

 (599)

 (583)

 (942)

 2,721 

 (2,896)

 (175)

 2,362 

 (2,078)

 284 

 1,748 

 105 

 1,853 

 1,384 

 428 

 1,812 

 3,717 

 (2,513)

 1,204 

 2,284 

 (1,106)

 1,178 

Share of net profits of associates and joint 

ventures included in segment result7

 349 

 445 

 146 

 195 

 455 

 137 

-  

-  

-  

-  

14 

15 

 1,002 
 61 
 1,063 

 907 
 175 
 1,082 

 1,208 
 (847)
 361 

 1,129 
 (778)
 351 

 1,083 
 (348)
 735 

 68 

 65 

-  

-  

 64 

 2 

 62 

 - 

 4 

 - 

 - 
 - 
 - 

 - 
 - 
 - 
 - 
-  

 - 
 - 

 - 

 - 
 - 
 - 

 - 

 - 

16 
58 
 74 

 16 
 (9)
 (1)
 6 
 - 

 9 
 49 
 58 

 17 
 (10)
 (1)
 6 
-  

 566 
 827 
 578 

 4,217 
 677 
 613 

 (511)
 - 
 (4,958)

 (3,498)
 6,438 
 2,940 

 (487)
 (349)
 (3,022)

 1,649 
 3,359 
 5,008 

 36,679 
 159 
 36,838 

 33,797 
 144 
 33,941 

 5,208 
 (1,575)
 (217)
 3,416 
 - 
 (96)
 3,320 
 (968)
 2,352 

 25,759 
 934 
 578 
 27,271 

 (14,332)
 - 
 (4,958)
 (19,290)
 7,981 
 - 
 7,981 

 5,285 
 (1,509)
 (226)
 3,550 
(59)
 (118)
 3,373 
 (993)
 2,380 

 24,826 
 775 
 613 
 26,214 

 (13,128)
 (349)
 (3,022)
 (16,499)
 9,715 
 - 
 9,715 

 73 

 2 

 1,159 

 906 

 157 

 88 

 173 

 103 

Total revenue
from continuing operations

$36,838m

$m
40,000

35,000

30,000

25,000

20,000

15,000

10,000

5,000

0

FY18

FY19

FY20

FY21

FY22

8.5%

$m

36,838

33,941

30,846

27,920

26,763

FY22

FY21

FY20

FY19

FY18

GEOGRAPHICAL INFORMATION
The table below provides information on the geographical location 
of revenue from contracts with customers and non-current assets 
(other than financial instruments, deferred tax assets and pension 
assets). Revenue from contracts with customers is allocated to a 
geography based on the location of the operation in which it was 
derived. Non-current assets are allocated based on the location of 
the operation to which they relate. 

Revenue

Non-current assets

2022
$m

2021
$m

2022
$m

2021
$m

Australia
New Zealand
United Kingdom
Other
Total 

 34,107 
 2,559 
 1 
 12 
 36,679 

 31,283 
 2,488 
 19 
 7 
 33,797 

 15,706 
 674 
 - 
 12 
 16,392 

 14,821 
 671 
 - 
 14 
 15,506 

Wesfarmers 2022 Annual Report

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Financial statements

Notes to the financial statements: Group performance
For the year ended 30 June 2022

1.  REVENUE AND OTHER INCOME

Revenue from contracts with customers
Sale of retail goods in store
Sale of retail goods online
Sale of wholesale goods
Sale of fertilisers, chemicals, speciality  
gases, LPG and LNG
Sale of industrial products
Services revenue

Other revenue
Interest revenue
Dividend revenue
Other

Total revenue

Consolidated
2022
$m

2021
$m

27,068 
3,440 
1,057 

3,031 
1,878 
205 
36,679 

5 
54 
100 
159 
36,838 

26,890 
2,804 
-  

2,137 
1,811 
155 
33,797 

11 
40 
93 
144 
33,941 

The Group's contracts with customers for the sale of retail goods 
generally incorporate a single performance obligation. Cash payment 
is generally received at the point of sale. Revenue from lay-by 
transactions is recognised on the date when the customer completes 
payment and takes possession of the merchandise. Any cash 
received in advance of the completion of the performance obligation is 
recognised on the balance sheet as a contract liability.

Where satisfaction of a performance obligation is completed over 
time, revenue is recognised in line with the progress towards complete 
satisfaction of the performance obligation.

A right of return is not a separate performance obligation and the 
Group recognises revenue net of estimated returns. A refund liability 
and a corresponding asset in inventory representing the right to 
recover the returned products from the customer is also recognised. 

Other revenue

Interest revenue

Revenue is recognised as the interest accrues on the related financial 
asset. Interest is determined using the effective interest rate method, 
which applies the interest rate that exactly discounts estimated future 
cash receipts over the expected life of the financial instrument. 

Other income
Gains on disposal of property, plant and  
equipment and other assets
Other
Total other income

Dividend revenue

58 
109 
167 

3 
84 
87 

Revenue from dividends, other than those arising from associates, 
is recognised when the Group’s right to receive the payment is 
established.

RECOGNITION AND MEASUREMENT

Revenue from contracts with customers
Revenue from contracts with customers is recognised when control of 
the goods or services is transferred to the customer at an amount that 
reflects the consideration to which the Group expects to be entitled in 
exchange for those goods or services.

The Group generates a significant proportion of its revenue from the 
following:

•  Sale of retail goods in store: relates to merchandise sold 

direct to customers through the Group’s in store retail operations. 
Control of goods typically passes at the point of sale.

•  Sale of retail goods online: relates to merchandise sold direct 
to customers through online platforms. Control of goods typically 
passes upon delivery, or when collected by the customer.

•  Sale of wholesale goods: includes revenue from wholesale 

distribution of pharmaceutical goods. Control of goods typically 
passes upon delivery of goods to the customer.

•  Sales of products to commercial customers:

i. 

for which the Group has distribution rights, principally related 
to industrial maintenance and industrial safety; and

ii.  produced or purchased by the Group including fertilisers, 

chemicals, speciality gases, LPG and LNG.

•  Services revenue: includes revenue received from services 
provided to customers, such as clinical treatments, franchise 
services, marketing and brand support. Revenue is recognised 
as the performance obligations are satisfied.

Key estimate: gift cards 

Revenue from the sale of gift cards is recognised when the 
card is redeemed and the customer purchases goods by 
using the card, or when the gift card is no longer expected 
to be redeemed (breakage). At 30 June 2022, $155 million of 
revenue is deferred in relation to gift cards (2021: $128 million). 
Gift card liabilities are contract liabilities as payment has been 
received for a performance obligation to be completed at a 
future point in time.

The key assumption in measuring the contract liability for 
gift cards and vouchers is the expected breakage, which 
is reviewed annually based on historical information. Any 
reassessment of expected breakage in a particular year 
impacts on the revenue recognised from expiry of gift 
cards and vouchers (either increasing or decreasing). Any 
reasonably possible change in the estimate is unlikely to have a 
material impact.

Key judgements: loyalty programs

The Group is a participant in the Flybuys loyalty program 
whereby eligible customers are granted loyalty points 
based on the dollars they spend. The Group is an agent 
in this arrangement as the nature of the loyalty program is 
that Flybuys is responsible for supplying the awards to the 
customer and as such the Group’s role is only to arrange for 
Flybuys to provide the goods or services.

The Group operates a loyalty points program, Priceline 
Sister Club, whereby eligible customers are granted loyalty 
points based on the dollars they spend. The points can then 
be redeemed for products, subject to a minimum number of 
points being obtained. Consideration received on transactions 
where points are issued is allocated between the products 
sold and the points issued. The fair value of the points issued 
is deferred and recognised as revenue when the points 
are redeemed.

140

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Notes to the financial statements: Group performance
For the year ended 30 June 2022

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Employee benefits expense by segment

$m

6,000

5,000

4,000

3,000

2,000

1,000

0

FY22

FY21

Bunnings

Kmart Group

WesCEF

Officeworks

Industrial and Safety

Health

Other

Depreciation and amortisation
Refer to notes 8, 9 and 11 for details on depreciation and 
amortisation.

Impairment
Refer to note 5 for details on the impairment of trade and other 
receivables, including a reconciliation of the allowance for 
credit losses, and note 20 for further details on impairment of 
non-financial assets.

Other finance costs
Other finance costs are recognised as an expense when they are 
incurred, except for interest charges attributable to major projects with 
substantial development and construction phases.

Provisions and other payables are discounted to their present value 
when the effect of the time value of money is significant. The impact of 
the unwinding of these discounts and any changes to the discounting 
is shown as a discount rate adjustment in finance costs.

Capitalisation of borrowing costs

To determine the amount of borrowing costs to be capitalised as 
part of the costs of major construction projects, the Group uses 
the weighted average interest rate applicable to its outstanding 
borrowings, including lease liabilities, during the year. For FY2022, 
the weighted average interest rate applicable was 3.13 per cent 
and $34 million of interest was capitalised to mine properties for the 
Mt Holland lithium project. 

2.  EXPENSES

Remuneration, bonuses and on-costs
Superannuation expense
Share-based payments expense
Employee benefits expense

Short-term and low-value lease payments
Contingent rental payments
Outgoings and other
Occupancy-related expenses

Depreciation 
Depreciation of right-of-use assets
Amortisation of intangibles
Amortisation of leasehold improvements
Depreciation and amortisation

Impairment of plant, equipment and other 
assets
Impairment of goodwill and intangible assets
Impairment of right-of-use assets
Impairment of trade and other receivables
Impairment expenses

Repairs and maintenance
Utilities and office expenses
Insurance expenses
Merchant fees
Other  
Other expenses

Interest on interest-bearing loans and 
borrowings, net of borrowing costs 
capitalised
Discount rate adjustment
Amortisation of debt establishment costs
Other finance-related costs
Other finance costs

Consolidated
2022
$m

2021
$m

5,351 
403 
86 
5,840 

28 
30 
384 
442 

397 
1,020 
85 
73 
1,575 

17 
-  
4 
12 
33 

268 
546 
34 
140 
561 
1,549 

72 
2 
5 
17 
96 

5,084 
355 
61 
5,500 

28 
37 
396 
461 

393 
972 
69 
75 
1,509 

16 
12 
26 
16 
70 

247 
510 
47 
132 
521 
1,457 

90 
2 
8 
18 
118 

RECOGNITION AND MEASUREMENT

Employee benefits expense
The Group’s accounting policy for liabilities associated with employee 
benefits is set out in note 12. The policy relating to share-based 
payments is set out in note 33. 

The majority of employees in Australia and New Zealand are party 
to a defined contribution superannuation scheme and receive fixed 
contributions from Group companies and the Group’s legal or 
constructive obligation is limited to these contributions. Contributions 
to defined contribution funds are recognised as an expense as they 
become payable. Prepaid contributions are recognised as an asset to 
the extent that a cash refund or a reduction in the future payment is 
available. The Group also operates a defined benefit superannuation 
scheme, the membership of which is now closed.

Wesfarmers 2022 Annual Report

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Financial statements

Notes to the financial statements: Group performance
For the year ended 30 June 2022

3. TAX EXPENSE

RECOGNITION AND MEASUREMENT

Consolidated
2022
$m

2021
$m

Current taxes
Current tax assets and liabilities are measured at the amount expected 
to be recovered from or paid to taxation authorities at the tax rates 
and tax laws enacted or substantively enacted by the balance 
sheet date.

857 
29 

94 
(12)

996 
(21)

9 
9 

Deferred taxes
Deferred income tax is provided using the full liability balance sheet 
method. Deferred income tax assets are recognised for all deductible 
temporary differences, carried forward unused tax assets and unused 
tax losses, to the extent it is probable that future taxable profits will be 
available to utilise them. 

Deferred income tax assets and liabilities are measured at the tax rates 
that are expected to apply to the year when the asset is realised or 
the liability is settled, based on tax rates and tax laws that have been 
enacted or substantively enacted at the balance sheet date. 

Deferred income tax is provided on temporary differences at the 
balance sheet date between accounting carrying amounts and the tax 
bases of assets and liabilities, other than for the following:

•  Where they arise from the initial recognition of an asset or liability 
in a transaction that is not a business combination and at the 
time of the transaction, affects neither the accounting profit nor 
taxable profit or loss.

•  Where taxable temporary differences relate to investments in 

subsidiaries, associates and interests in joint ventures: 

i.  Deferred tax liabilities are not recognised if the timing of the 

reversal of the temporary differences can be controlled and it 
is probable that the temporary differences will not reverse in 
the foreseeable future.

ii.  Deferred tax assets are not recognised if it is not probable 

that the temporary differences will reverse in the foreseeable 
future and future taxable profits will not be available to utilise 
the temporary differences. 

Deferred tax liabilities are also not recognised on recognition of 
goodwill or brand assets given the Group's intended approach 
to realisation.

Income taxes relating to items recognised directly in equity are 
recognised in equity and not in the income statement.

Offsetting deferred tax balances
Deferred tax assets and deferred tax liabilities are offset only if a legally 
enforceable right exists to set off current tax assets against current tax 
liabilities and the deferred tax assets and liabilities relate to the same 
taxable entity and the same taxation authority.

Key judgement: unrecognised deferred tax assets

Capital losses: The Group has unrecognised benefits relating to 
carried forward capital losses, which can only be offset against 
eligible capital gains. The Group has determined that at this 
stage future eligible capital gains to utilise the tax assets are not 
currently sufficiently probable. The unrecognised deferred tax 
assets of $10 million (2021: $34 million) relate wholly to capital 
losses in Australia.

Key judgement: unrecognised deferred tax liability

A deferred tax liability has not been recognised on indefinite 
life intangibles for which the carrying value has been assessed 
as recoverable through sale, consistent with the Group’s 
practice and strategy to maximise shareholder returns through 
value-adding transactions.

968 

993 

40 
13 
53 

3,320 
996 
17 
5 

3 
(16)

(25)
(12)

968 

103 
330 
110 
115 
322 
10 
60 
229 
54 
1,333 
208 
138 
240 
37 
138 
761 
572 

20 
3 

40 
19 
82 

38 
(1)
37 

3,373 
1,012 
(12)
10 

5 
(12)

-  
(10)

993 

239 
293 
76 
146 
225 
14 
57 
165 
66 
1,281 
172 
130 
237 
14 
115 
668 
613 

(15)
20 

26 
(13)
18 

The major components of tax expense are:

Income statement
Current income tax expense

Current year (paid or payable)
Adjustment for prior years 
Deferred income tax expense

Temporary differences 
Adjustment for prior years 

Income tax expense reported in the 
income statement

Statement of changes in equity
Net gain on revaluing cash flow hedges
Net gain/(loss) on revaluing financial assets
Income tax reported in equity

Tax reconciliation 
Profit before tax
Income tax rate at the statutory rate of 30%
Adjustments relating to prior years
Non-deductible items
Share of results of associates and  
joint ventures
Non-assessable dividends
Utilisation of previously unrecognised tax 
losses
Other

Income tax on profit before tax

Deferred income tax in the balance 
sheet relates to the following:

Provisions
Employee benefits
Accruals and other payables 
Interest-bearing loans and borrowings
Leases
Derivatives
Inventories
Property, plant and equipment
Other individually insignificant balances

Deferred tax assets

Accelerated depreciation for tax purposes
Derivatives
Accrued income and other
Intangible assets
Other individually insignificant balances

Deferred tax liabilities
Net deferred tax asset

Deferred income tax in the income 
statement relates to the following:

Provisions, employee benefits and leases
Depreciation, amortisation and impairment
Investments in associates and joint 
ventures
Other individually insignificant balances

Deferred tax expense

142

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Notes to the financial statements: Group balance sheet
For the year ended 30 June 2022

4. CASH AND CASH EQUIVALENTS

4. CASH AND CASH EQUIVALENTS (CONTINUED)

For the purposes of the cash flow statement, 
cash and cash equivalents comprise the 
following:
Cash held in joint operation
Cash on hand and in transit
Cash at bank and on deposit 

Reconciliation of net profit after tax to 
net cash flows from operations

Net profit
Adjusted for

Depreciation and amortisation
Impairment of assets
Net (gain)/loss on disposal of non-current 
assets including investments and 
associates 
Share of net profits of associates and joint 
ventures
Dividends and distributions received from 
associates
Loss on disposal of business
Discount adjustment in borrowing costs
Amortisation of debt establishment costs
Other

(Increase)/decrease in assets

Trade and other receivables
Inventories
Prepayments
Deferred tax assets
Other assets

Increase/(decrease) in liabilities
Trade and other payables
Current tax payable
Provisions
Other liabilities

Net cash flows from operating activities

Consolidated
2022
$m

2021
$m

188 
238 
279 
705 

50 
228 
2,745 
3,023 

2,352 

2,380 

1,575 
33 

1,509 
70 

(53)

38 

(173)

(103)

48 
-  
2 
5 
13 

(212)
(1,183)
(60)
29 
(10)

322 
(360)
(68)
41 
2,301 

51 
2 
2 
8 
(6)

(226)
(665)
(18)
21 
(4)

214 
(43)
115 
38 
3,383 

RECOGNITION AND MEASUREMENT

Cash at bank and on deposit
Cash and short-term deposits in the balance sheet comprise cash at 
bank and on hand, and short-term deposits with an original maturity 
of three months or less and are classified as financial assets held at 
amortised cost.

Cash at bank earns interest at floating rates based on daily bank 
deposit rates. Short-term deposits are made for varying periods of 
between one day and three months, depending on the immediate 
cash requirements of the Group, and earn interest at the respective 
deposit rates. 

Cash at bank and on deposit is held with banks and financial 
institutions with investment grade credit ratings. Refer to note 18(D) 
for credit risk disclosures.

Cash held in joint operation
Cash held in joint operation is only available for use within the 
joint operation. 

Consolidated

2022
$m

2021
$m

Cash capital expenditure
Payments for property
Payments for plant and equipment
Payments for intangibles
Payments for mineral exploration
Payments for mine properties

Proceeds from sale of property, plant, 
equipment and intangibles
Net cash capital expenditure

97 
531 
174 
4 
338 
1,144 

(260)
884 

Cash capital expenditure by segment 
for FY2022

Bunnings

Kmart Group

WesCEF

Officeworks

Industrial and 
Safety

Health

Other

$m

349

150

455

68

64

3

55

194 
503 
146 
22 
31 
896 

(264)
632 

%

30.5

13.1

39.8

5.9

5.6

0.3

4.8

5. RECEIVABLES

Trade and other
Trade receivables
Allowance for credit losses
Other debtors

Allowance for credit losses
Movements in the allowance account for 
expected credit losses were as follows:

Carrying amount at beginning of year
Allowance for credit losses recognised
Acquisition of controlled entities
Write-offs
Unused allowance for credit losses reversed

Carrying amount at the end of the year

Consolidated
2022
$m

2021
$m

1,938 
(55)
211 
2,094 

 1,070 
(33)
210 
1,247 

33 
17 
16 
(6)
(5)
55 

23 
 19 
 - 
(6)
(3)
33 

RECOGNITION AND MEASUREMENT
Trade receivables and other debtors are all classified as financial 
assets held at amortised cost on the basis they are held with 
the objective of collecting contractual cash flows and the cash 
flows relate to payments of principal and interest on the principal 
amount outstanding.

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Financial statements

Notes to the financial statements: Group balance sheet
For the year ended 30 June 2022

5. RECEIVABLES (CONTINUED)

6. INVENTORIES (CONTINUED)

Trade receivables
Trade receivables generally have terms of up to 30 days, extending 
up to 120 days in relation to the Health segment. They are 
recognised initially in accordance with the Group's revenue policy and 
subsequently measured at amortised cost using the effective interest 
method, less an allowance for credit losses. Refer to note 18(D) for a 
description of the application of the simplified approach to determine 
lifetime expected credit loss (ECL) on trade receivables and details of 
the Group's credit risk exposure. 

Other debtors
These amounts generally arise from transactions with the Group's 
suppliers. It is expected that other debtors' balances will be received 
when due.

Costs incurred in bringing each product to its present location and 
condition are accounted for as follows:

•  Raw materials: purchase cost on a weighted average basis.

•  Manufactured finished goods and work in progress: cost 

of direct materials and labour and a proportion of manufacturing 
overheads based on normal operating capacity.

•  Retail and wholesale finished goods: purchase cost on 
a weighted average basis, after deducting any settlement 
discounts and supplier rebates, and including logistics expenses 
incurred in bringing the inventories to their present location 
and condition.

Volume-related supplier rebates, and supplier promotional rebates 
where they exceed spend on promotional activities, are accounted for 
as a reduction in the cost of inventory and recognised in the income 
statement when the inventory is sold.

Key estimate: recoverability of trade and other 
receivables

Management judgement is applied in assessing the 
recoverability of trade and other receivables on an ongoing 
basis. Recoverability of specific debtors is assessed with 
reference to the debtor's ability to repay, which includes:

•  The anticipated liquidity of the debtor;

•  The estimated value of security held by the Group over the 

debtor's property and assets;

•  The estimated value of other security held, including 

retention of title of the inventory; and

•  The ranking of the Group's debt compared to other 

creditors of the debtor.

The Group's exposure to potential bad debts is not significant 
and default rates have historically been very low. Trade 
receivables are written off when there is no reasonable 
expectation of recovery, which may be indicated by the debtor 
failing to engage in a payment plan or failing to make timely 
contractual payments. Reasonably possible changes in these 
estimates are unlikely to have a material impact on the trade 
and other receivables balance.

Key estimate: net realisable value

The key assumptions, which require the use of management 
judgement, are the variables affecting costs recognised in 
bringing the inventory to their location and condition for sale, 
estimated costs to sell and the expected selling price. These 
key assumptions are reviewed at least annually. The total net 
expense relating to inventory writedowns during the year was 
$20 million (2021: $36 million). Any reasonably possible change 
in the estimate is unlikely to have a material impact. 

Key estimate: supplier rebates

The recognition of certain supplier rebates in the income 
statement requires management to estimate both the volume 
of purchases that will be made during a period of time and the 
related product that was sold and remains in inventory at the 
reporting date. Management’s estimates are based on existing 
and forecast inventory turnover levels and sales. Reasonably 
possible changes in these estimates are unlikely to have a 
material impact.

Refer to note 18(D) for further information on the Group's ECL 
matrix. 

7. OTHER FINANCIAL ASSETS

6. INVENTORIES

Raw materials 
Finished goods 
Right-of-return assets

Consolidated
2022

2021

$m

$m

28 
6,047 
9 
6,084 

 28 
 4,465 
9 
4,502 

Inventories recognised as an expense for the year ended 
30 June 2022 totalled $24,222 million (2021: $21,731 million).

RECOGNITION AND MEASUREMENT
Inventories are valued at the lower of cost and net realisable value. 
The net realisable value of inventories is the estimated selling price in 
the ordinary course of business less estimated costs to sell.

Financial assets measured at FVOCI
Other

Consolidated
2022

2021

$m

675 
2 
677 

$m

 1,124 
 - 
1,124 

The carrying value of the Group's 2.8 per cent (2021: 4.9 per cent) 
interest in Coles at 30 June 2022 was $662 million 
(2021: $1,117 million). Dividends received from Coles for the year 
ended 30 June 2022 totalled $40 million (2021: $40 million). 

RECOGNITION AND MEASUREMENT
The Group's other financial assets primarily comprise equity 
instruments measured at fair value through other comprehensive 
income (FVOCI). Fair value gains and losses are presented in other 
comprehensive income and there is no subsequent reclassification 
of fair value gains and losses to profit and loss on the derecognition. 
Dividends are recognised in profit or loss as other revenue when the 
Group's right to payment is established. 

144

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Notes to the financial statements: Group balance sheet
For the year ended 30 June 2022

8. PROPERTY, PLANT AND EQUIPMENT

Land Buildings
$m

$m

Leasehold 
improvements
$m

Plant, 
vehicles and 
equipment
$m

Total 
$m

Consolidated

Year ended 30 June 2022

Gross carrying amount - at cost
Accumulated depreciation and impairment
Net carrying amount 

Movement
Net carrying amount at beginning of year
Additions
Disposals and write-offs
Impairment 
Depreciation and amortisation
Acquisition of controlled entities
Transfers
Other including foreign exchange movements
Net carrying amount at the end of the year

Assets under construction included above:

Year ended 30 June 2021

Gross carrying amount - at cost
Accumulated depreciation and impairment
Net carrying amount 

Movement
Net carrying amount at beginning of year
Additions
Disposals and write-offs
Impairment 
Depreciation and amortisation
Acquisition of controlled entities
Transfers
Other including foreign exchange movements
Net carrying amount at the end of the year

321 
-  
321 

369 
37 
(87)
-  
-  
4 
-  
(2)
321 

-  

369 
-  
369 

392 
42 
(65)
-  
-  
-  
-  
-  
369 

489 
(192)
297 

324 
60 
(93)
-  
(15)
3 
18 
-  
297 

46 

506 
(182)
324 

404 
153 
(219)
-  
(19)
-  
5 
-  
324 

934 
(540)
394 

377 
86 
(1)
(9)
(73)
15 
-  
(1)
394 

17 

870 
(493)
377 

409 
62 
(19)
-  
(75)
-  
-  
-  
377 

40 

7,368 
(4,759)
2,609 

9,112 
(5,491)
3,621 

2,426 
438 
(1)
(8)
(382)
105 
35 
(4)
2,609 

3,496 
621 
(182)
(17)
(470)
127 
53 
(7)
3,621 

334 

397 

6,985 
(4,559)
2,426 

8,730 
(5,234)
3,496 

2,418 
452 
(18)
(16)
(374)
1 
(36)
(1)
2,426 

3,623 
709 
(321)
(16)
(468)
1 
(31)
(1)
3,496 

258 

418 

Assets under construction included above:

-  

120 

RECOGNITION AND MEASUREMENT
The carrying value of property, plant and equipment is measured as 
the cost of the asset, less accumulated depreciation and impairment. 
The cost of the asset also includes the cost of replacing parts that are 
eligible for capitalisation, and the cost of major inspections.

Depreciation and amortisation
Items of property, plant and equipment are depreciated on a 
straight-line basis over their useful lives. The estimated useful life 
of buildings is between 20 and 40 years and plant, vehicles and 
equipment is between three and 40 years. Land is not depreciated.

Leasehold improvements are amortised over the period of the lease or 
the anticipated useful life of the improvements, whichever is shorter. 

Impairment
Refer to note 20 for details on impairment testing.

Derecognition
An item of property, plant and equipment is derecognised when it is 
sold or otherwise disposed of, or when its use is expected to bring 
no future economic benefits. Any gain or loss from derecognising 
the asset (the difference between the proceeds of disposal and the 
carrying amount of the asset) is included in the income statement in 
the period the item is derecognised.

Key estimates: property, plant and equipment

The estimations of useful lives, residual value and amortisation 
methods require management judgement and are reviewed 
annually. If they need to be modified, the change is accounted 
for prospectively from the date of reassessment until the end 
of the revised useful life (for both the current and future years). 
Such revisions are generally required when there are changes 
in economic circumstances impacting specific assets or 
groups of assets, such as changes in store performance or 
changes in the long-term commodity price forecasts. These 
changes are limited to specific assets and as such, any 
reasonably possible change in the estimate is unlikely to have a 
material impact on the estimations of useful lives, residual value 
or amortisation methods. 

Wesfarmers 2022 Annual Report

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Financial statements

Notes to the financial statements: Group balance sheet
For the year ended 30 June 2022

9. GOODWILL AND INTANGIBLE ASSETS

Consolidated

Year ended 30 June 2022

Gross carrying amount - at cost
Accumulated amortisation and impairment
Net carrying amount 

Movement
Net carrying amount at beginning of year
Additions
Disposals and write-offs
Amortisation
Acquisition of controlled entities
Other including foreign exchange movements
Net carrying amount at the end of the year

Year ended 30 June 2021

Gross carrying amount - at cost
Accumulated depreciation and impairment
Net carrying amount 

Movement
Net carrying amount at beginning of year
Additions
Impairment 
Amortisation
Acquisition of controlled entities
Transfers
Other including foreign exchange movements
Net carrying amount at the end of the year

Goodwill
$m

Brand
$m

Contractual and 
non-contractual 
relationships1
$m

Software
$m

Total 
$m

3,785 
(494)
3,291 

2,967 
-  
-  
-  
324 
-  
3,291 

3,461 
(494)
2,967 

2,966 
-  
-  
-  
1 
-  
-  
2,967 

1,334 
(497)
837 

617 
1 
-  
(1)
220 
-  
837 

1,113 
(496)
617 

618 
-  
-  
(1)
-  
-  
-  
617 

131 
(47)
84 

29 
-  
-  
(10)
65 
-  
84 

66 
(37)
29 

42 
-  
-  
(8)
-  
(5)
-  
29 

896 
(457)
439 

289 
195 
(3)
(74)
32 
-  
439 

609 
(320)
289 

188 
144 
(12)
(60)
-  
29 
-  
289 

6,146 
(1,495)
4,651 

3,902 
196 
(3)
(85)
641 
-  
4,651 

5,249 
(1,347)
3,902 

3,814 
144 
(12)
(69)
1 
24 
-  
3,902 

1  Contractual and non-contractual relationships are intangible assets that have arisen through business combinations. They represent the value of pre-existing 

customer relationships in the acquired company. 

RECOGNITION AND MEASUREMENT

Goodwill
Goodwill acquired in a business combination is initially measured at 
cost. Cost is measured as the cost of the business combination minus 
the net fair value of the acquired and identifiable assets, liabilities and 
contingent liabilities. Following initial recognition, goodwill is measured 
at cost less any accumulated impairment losses. Refer to note 20 for 
further details on impairment. 

Intangible assets
Intangible assets acquired separately are measured on initial 
recognition at cost. The cost of intangible assets acquired in a 
business combination is their fair value at the date of acquisition. 

Following initial recognition, intangible assets are carried at cost less 
amortisation and any impairment losses. Intangible assets with finite 
lives are amortised on a straight-line basis over their useful lives and 
tested for impairment whenever there is an indication that they may 
be impaired. 

The amortisation period and method is reviewed at each financial 
year-end. Intangible assets with indefinite useful lives are tested for 
impairment in the same way as goodwill. Refer to note 20 for further 
details on impairment. 

A summary of the useful lives of intangible assets is as follows:

Intangible asset

Useful life

Brand1

Indefinite and finite (up to 20 years)

Contractual and non-contractual 
relationships

Finite (up to 15 years)

Software

Finite (up to 10 years)

1  Includes trade names and other intangible assets with characteristics of a 

brand.

Assets with an assumed indefinite useful life are reviewed at each 
reporting period to determine whether this assumption continues to 
be appropriate. If not, it is changed to a finite life and accounted for 
prospectively as a change in accounting estimate.

146

 Wesfarmers 2022 Annual Report

Notes to the financial statements: Group balance sheet
For the year ended 30 June 2022

9.  GOODWILL AND INTANGIBLE ASSETS 

10. MINE PROPERTIES

(CONTINUED)

Allocation of goodwill to groups of cash 
generating units

Carrying amount of goodwill 
Bunnings
Kmart Group 
WesCEF
Officeworks
Industrial and Safety
Health

Allocation of indefinite life intangible assets to 
groups of cash generating units

Carrying amount of intangibles
Bunnings
Kmart Group
Officeworks
Industrial and Safety
Health
Other

Consolidated
2022
$m

2021
$m

 876 
 856 
 2 
 816 
 421 
 320 
3,291 

 876 
 856 
 2 
 816 
 417 
 - 
2,967 

 14 
 433 
 160 
 22 
 207 
 1 
837 

 1 
 434 
 160 
 22 
 - 
 - 
617 

Key judgement: useful lives of intangible assets

Certain brands have been assessed as having indefinite lives 
on the basis of strong brand strength, ongoing expected 
profitability and continuing support. The brand incorporates 
complementary assets such as store formats, networks and 
product offerings. 

Key judgement: capitalisation of software costs

Configuration and customisation costs incurred in a 
Software-as-a-Service (SaaS) arrangement, that is a service 
agreement, are recognised as an operating expense. The 
exception is where the Group has the power to obtain the future 
economic benefits flowing from the underlying resource and 
to restrict the access of others to those benefits. Under this 
scenario, an intangible asset that the Group controls is created 
and therefore capitalised.

Mine under construction - at cost

Movement
Net carrying amount at beginning of year
Transfers from mineral rights
Transfers to property, plant and equipment
Additions1
Net carrying amount at the end of the year

Consolidated
2022
$m

2021
$m

1,150 
1,150 

865 
-  
(53)
338 
1,150 

865 
865 

-  
834 
-  
31 
865 

1  The 2022 additions includes the capitalisation of $34 million of borrowing costs 

(2021: nil).

RECOGNITION AND MEASUREMENT

Mine properties
The Group capitalises all development expenditure associated 
with the Mt Holland lithium project (the Project) to mine under 
construction, which is a subcategory of mine properties, following the 
reclassification of the Project from mineral rights in FY2021.

The carrying value of the mine under construction is measured at cost. 
The cost comprises the transferred value of mineral rights (exploration 
and evaluation expenditure) and subsequent construction costs, any 
costs directly attributable to bringing the asset into operation, the initial 
estimate of the rehabilitation obligation, and, for qualifying assets, 
borrowing costs. Refer to note 2 for further details on the capitalisation 
of borrowing costs.

The mine under construction is not depreciated until the construction 
is completed and the assets are available for their intended use. 

Refer to note 20 for details on impairment testing.

Key judgement: classification of mine properties

Determining when the Project moves into the production phase 
requires the use of management judgement, which considers 
the following factors:

•  The level of capital expenditure incurred to date compared 

with the original construction cost estimates;

•  The majority of assets making up the Project are 

substantially complete and ready for use;

•  The completion of a reasonable period of testing of the 

mine, plant and equipment has occurred;

•  The ability to produce mineral resources in a saleable form 

(within specifications) has been demonstrated; and 

•  The ability to sustain ongoing production of mineral 

resources has been demonstrated.

When it is determined that the assets are substantially complete 
and ready for their intended use, related capital expenditure 
will cease being classified as mine under construction and 
depreciation will commence from the date of the reclassification.

Wesfarmers 2022 Annual Report

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Financial statements

Notes to the financial statements: Group balance sheet
For the year ended 30 June 2022

11. LEASES

Group as a lessee
The Group has leases primarily in relation to retail and distribution properties, in addition to offices, motor vehicles and office equipment. The 
lease terms vary significantly and can include escalation clauses, renewal or purchase options and termination rights. Escalation clauses vary 
between fixed rate, inflation-linked, market rent and combination reviews. Changes to rental terms linked to inflation or market rent reviews 
typically occur on an annual or five-yearly basis. 

Set out below are the carrying amounts of the right-of-use assets and the movements during the year.

Right-of-use assets                        
 Vehicles 
and other 
 $m 

 Buildings 
 $m 

 Total 
 $m 

 8,804 
 (2,908)
 5,896 

 5,949 
 756 
 (4)
 (1,008)
 216 
 (13)
 5,896 

 7,916 
 (1,967)
 5,949 

 6,147 
 791 
 (26)
 (960)
 (3)
 5,949 

 62 
 (16)
 46 

 38 
 12 
 - 
 (6)
 2 
 - 
 46 

 49 
 (11)
 38 

 23 
 23 
 - 
 (8)
 - 
 38 

 8,953 
 (2,939)
 6,014 

 6,035 
 798 
 (4)
 (1,020)
 218 
 (13)
 6,014 

 8,022 
 (1,987)
 6,035 

 6,212 
 824 
 (26)
 (972)
 (3)
 6,035 

Consolidated

Year ended 30 June 2022
Gross carrying amount - at cost
Accumulated depreciation and impairment
Net carrying amount

Movement
Net carrying amount at the beginning of the year
Net additions1
Impairment, net of reversals
Depreciation
Acquisition of controlled entities
Other including foreign exchange movements
Net carrying amount at the end of the year

Year ended 30 June 2021
Gross carrying amount - at cost
Accumulated depreciation and impairment
Net carrying amount

Movement
Net carrying amount at the beginning of the year
Net additions1
Impairment, net of reversals
Depreciation
Other including foreign exchange movements
Net carrying amount at the end of the year

1  Includes new leases, reassessments and remeasurements, net of terminated leases.

 Land 
 $m 

 87 
 (15)
 72 

 48 
 30 
 - 
 (6)
 - 
 - 
 72 

 57 
 (9)
 48 

 42 
 10 
 - 
 (4)
 - 
 48 

148

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Notes to the financial statements: Group balance sheet
For the year ended 30 June 2022

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11. LEASES (CONTINUED)

Set out below are the carrying amounts of the lease liabilities and the 
movements during the year.

Consolidated
2022
$m

2021
$m

 1,100 
 6,023 
 7,123 

 969 
 6,136 
 7,105 

Current
Non-current
Total lease liabilities

Movement

Net carrying amount at the beginning of the year
Net additions1
Accretion of interest
Lease payments
Acquisition of controlled entities
Other including foreign exchange movements
Net carrying amount at the end of the year

 7,105 
 818 
 217 
 (1,246)
 244 
 (15)
 7,123 

 7,242 
 852 
 226 
 (1,212)
 - 
 (3)
 7,105 

1  Includes new leases, reassessments and remeasurements, net of terminated 

leases.

The maturity profile of the Group's lease liabilities based on contractual 
undiscounted payments is provided in note 18(B).

The Group has a number of lease contracts that include 
extension options. Management exercises significant judgement 
in determining whether these extension options are reasonably certain 
to be exercised. Further details on this key judgement are provided on 
the following page. 

Lease extension options are available in respect of 76 per cent 
(2021: 82 per cent) of the Group’s land and building leases. The 
number and extent of available lease extension options differs 
considerably between leases. Where the Group has deemed 
the exercise of available option periods to be reasonably certain, 
those option periods have been included in the lease term and are 
therefore incorporated in the recorded lease liability of $7,123 million 
(2021: $7,105 million). A number of available option periods, which 
are exercisable at the discretion of the Group as lessee, have not 
been included in the recorded lease liability on the basis that they are 
not reasonably certain to be exercised, and do not represent liabilities 
of the Group at 30 June 2022. 

The following are the lease-related amounts recognised in the 
income statement.

Depreciation of right-of-use assets
Interest on lease liabilities
Included in occupancy-related expenses:

Short-term and low-value lease payments
Contingent rental payments 
Outgoings and other

Consolidated
2022

2021

$m

$m

 1,020 
 217 

 28 
 30 
 384 

 972 
 226 

 28 
 37 
 396 

Total amount recognised in the income 
statement

 1,679 

 1,659 

RECOGNITION AND MEASUREMENT
The Group assesses at contract inception whether a contract is, or 
contains, a lease. That is, if the contract conveys the right to control  
the use of an identified asset for a period of time in exchange for 
consideration. 

Right-of-use assets
Right-of-use assets are recognised at the commencement date 
of the lease (i.e. the date the underlying asset is available for 
use). Right-of-use assets are initially measured at cost, less any 
accumulated depreciation and impairment losses, and adjusted for 
any remeasurement of lease liabilities. The cost of right-of-use assets 
includes the amount of lease liabilities recognised, initial direct costs 
incurred, and lease payments made at or before the commencement 
date less any lease incentives received. Right-of-use assets are 
depreciated on a straight-line basis over the shorter of the lease 
term and the estimated useful lives of the assets. The estimated 
useful lives of the right-of-use land and building assets are between 
one and 42 years and right-of-use vehicles and other assets are 
between one and  20 years. The right-of-use assets are also 
subject to impairment, assessed in accordance with the Group’s 
impairment policy.

Lease liabilities
Lease liabilities are recognised by the Group at the commencement 
date of the lease. Lease liabilities are measured at the present value of 
lease payments to be made over the lease term. 

The lease payments include fixed payments (including in-substance 
fixed payments) less any lease incentives receivable, variable lease 
payments that depend on an index or rate, and amounts expected 
to be paid under residual value guarantees. The lease payments 
also include the exercise price of a purchase option reasonably 
certain to be exercised by the Group. Variable lease payments that 
do not depend on an index or a rate are recognised as expenses 
in the period in which the event or condition that triggers the 
payment occurs.

In calculating the present value of lease payments, the Group uses its 
incremental borrowing rate (IBR) at the lease commencement date 
where the interest rate implicit in the lease is not readily determinable. 
After the commencement date, the lease liability is increased to reflect 
the accretion of interest and reduced for lease payments made. In 
addition, the carrying amount of lease liabilities is remeasured if there 
is a modification, a change in the lease term, a change in the lease 
payments (e.g. changes to future payments resulting from a change in 
an index or rate used to determine such lease payments) or a change 
in the assessment to purchase the underlying asset.

Short-term leases and lease of low-value assets
The Group applies the short-term lease recognition exemption to 
its short-term leases, which are defined as those leases that have a 
lease term of 12 months or less from the commencement date. It also 
applies the lease of low-value assets recognition exemption to leases 
that are considered to be low value. Lease payments on short-term 
leases and leases of low-value assets are recognised as expenses on 
a straight-line basis over the lease term.

Lease liabilities by segment

as at 30 June 2022

Bunnings

$m

3,692

Kmart Group

2,642

WesCEF

Officeworks

Industrial and 
Safety

Health

Other

61

345

157

199

27

%

51.8

37.1

0.9

4.8

2.2

2.8

0.4

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Financial statements

Notes to the financial statements: Group balance sheet
For the year ended 30 June 2022

11. LEASES (CONTINUED)

12. PROVISIONS

Key judgements and estimates: leases

Lease term

The lease term is considered to be a key judgement. At lease 
commencement, Wesfarmers considers an option to extend a 
lease to be reasonably certain when there is a clear economic 
incentive for extension, such as:

• 

• 

favourable contractual terms and conditions in the option 
period compared to market rates;

leasehold improvements have recently been undertaken 
and are likely to have significant residual value at the end of 
the current lease period;

•  significant termination costs exist; or

• 

the underlying asset is important to the Group’s operations.

After lease commencement, options to extend are reassessed 
upon the occurrence of a significant event or change in 
circumstance.

Discount rate

The discount rates applied in measuring the lease liability 
are a key estimate area. As at 30 June 2022, the rates were 
between 0.8 and 5.0 per cent (2021: 1.0 and 3.7 per cent) for 
the Group's land and buildings leases. On commencement of 
a lease, the future lease payments are discounted using the 
IBR where the interest rate implicit in the lease is not readily 
available. The lessee's IBR reflects the Group's IBR adjusted 
for lease tenure and the currency of the lease. Where there 
is a lease modification, a revised discount rate is applied in 
remeasuring the lease liability.

Current
Employee benefits
Self-insured risks
Restructuring and make good
Other

Non-current
Employee benefits
Self-insured risks
Restructuring and make good
Other

Total provisions

Consolidated
2022
$m

2021
$m

900 
126 
48 
80 
1,154 

110 
109 
154 
1 
374 
1,528 

 889 
 151 
 56 
 56 
 1,152 

 105 
 118 
 148 
 3 
 374 
 1,526 

RECOGNITION AND MEASUREMENT
Provisions are recognised when: 

• 

• 

the Group has a present obligation (legal or constructive) as a 
result of a past event; 

it is probable that resources will be expended to settle the 
obligation; and 

•  a reliable estimate can be made of the amount of the obligation.

Stand-alone price of lease and non-lease components

Key estimate: discounting

As applicable, the calculated lease liability excludes an 
estimate of the gross lease payments allocated to non-lease 
components. This estimate is determined on a lease-by-lease 
basis on inception of the lease. 

In determining the stand-alone price of the lease and 
non-lease components, consideration is given to benchmark 
property outgoings and historical information of the Group's 
lease portfolio. 

Provisions, other than employee benefits, are determined by 
discounting the expected future cash flows at a pre-tax rate that 
reflects current market assessments of the time value of money 
and the risks specific to the liability to the extent they are not 
included in the cash flows.

Employee benefits provision balances are calculated using 
discount rates derived from the high-quality corporate bond 
(HQCB) market in Australia provided by Milliman Australia. 

Employee benefits provisions have been calculated using 
discount rates of between 3.6 and 5.3 per cent (2021: between 
0.2 and 2.8 per cent).

150

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Notes to the financial statements: Group balance sheet
For the year ended 30 June 2022

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12. PROVISIONS (CONTINUED)

Employee benefits
The provision for employee benefits represents annual leave, long 
service leave entitlements and incentives accrued by employees.

Wages and salaries

Liabilities for wages and salaries, including non-monetary benefits 
expected to be settled within 12 months of the reporting date, are 
recognised in provisions and other payables in respect of employees’ 
services up to the reporting date. They are measured at the amounts 
expected to be paid when the liabilities are settled.

Annual leave and long service leave

The liability for annual leave and long service leave is recognised in 
the provision for employee benefits. The obligation is measured using 
the projected unit credit method. Expected future payments are 
discounted using market yields at the reporting date on HQCB with 
terms to maturity and currencies that match, as closely as possible, 
the estimated future cash outflows.

Key estimate: long service leave

Management judgement is required in determining the following 
key assumptions used in the calculation of long service leave at 
the balance sheet date:

• 

• 

• 

future increases in salaries and wages;

future on-cost rates; and

future probability of employee departures and period of 
service.

The total long service leave liability is $422 million 
(2021: $390 million). Given the magnitude of the liability and the 
nature of the key assumptions, any reasonably possible change 
in one or a combination of the assumptions is unlikely to have a 
material impact.

Self-insured risks
The Group is self-insured for workers’ compensation and general 
liability claims. Provisions are recognised based on claims reported, 
and an estimate of claims incurred but not reported. These provisions 
are determined on a discounted basis, using an actuary valuation 
performed at each reporting date.

Key estimate: self-insured risks

The self-insured risk liability is based on a number of 
management estimates including, but not limited to:

• 

• 

future inflation;

investment return;

•  average claim size;

•  claim development; and

•  claim administration expenses.

These assumptions are reviewed periodically and any 
reassessment of these assumptions will affect workers’ 
compensation or claims expense (either increasing or 
decreasing the expense). Any reasonable change in these 
assumptions will not have a significant impact on the Group. 

Make good
The Group recognises the present value of the estimated costs that 
may be incurred in restoring leased premises to their original condition 
at the end of the respective lease terms as a provision for make 
good. The costs are recognised as the obligation is incurred either at 
commencement of the lease or as a consequence of using the asset 
and are included in the cost of the right-of-use assets. This estimate is 
reviewed at each reporting date and adjusted for any known changes 
in the initial cost estimate. 

Restructuring
Provisions for restructuring are recognised where steps have been 
taken to implement a detailed plan, including discussions with those 
impacted by it and relate principally to: 

• 

• 

the closure of retail outlets or distribution centres;

restructuring; and

•  associated redundancies.

Consolidated

Carrying amount at 1 July 2021
Net provisions arising during the year
Utilised
Acquisition of controlled entities
Carrying amount at 30 June 2022

Carrying amount at 1 July 2020
Net provisions arising during the year
Utilised
Carrying amount at 30 June 2021

Employee 
benefits
$m

Self-insured 
risks
$m

Restructuring 
and make 
good
$m

994 
565 
(591)
42 
1,010 

820 
618 
(444)
994 

269 
19 
(53)
-  
235 

265 
65 
(61)
269 

204 
13 
(23)
8 
202 

249 
4 
(49)
204 

Other
$m

59 
30 
(38)
30 
81 

90 
48 
(79)
59 

Total 
$m

1,526 
627 
(705)
80 
1,528 

1,424 
735 
(633)
1,526 

Wesfarmers 2022 Annual Report

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Financial statements

Notes to the financial statements: Capital
For the year ended 30 June 2022

13. CAPITAL MANAGEMENT

The primary objective of Wesfarmers is to provide a satisfactory return 
to its shareholders. The Group aims to achieve this objective by:

• 

improving returns on invested capital relative to the cost of 
capital;

•  ensuring a satisfactory return is made on any new capital 

invested; and

• 

returning capital to shareholders when appropriate.

Capital is defined as the combination of shareholders’ equity, reserves 
and net debt. The Board is responsible for monitoring and approving 
the capital management framework within which management 
operates. The purpose of the framework is to safeguard the Group’s 
ability to continue as a going concern while optimising its debt and 
equity structure to improve returns. Wesfarmers aims to maintain a 
capital structure that is consistent with a stable investment grade 
credit rating. 

Consolidated
2022

2021

$m

$m

Note

15
15

15

17

4

13,574 
(102)
485 
(5,976)
7,981 

15,826 
(102)
60 
(6,069)
9,715 

4,958 

3,022 

(705)
4,253 
12,234 

(3,023)
(1)
9,714 

Equity and reserves
Issued capital
Reserved shares
Retained earnings
Reserves

Net debt - exclusive of lease 
liabilities
Total interest-bearing loans and 
borrowings 

Less:

Cash and cash equivalents

Total capital employed

The Group manages its capital through various means, including:

•  adjusting the amount of dividends paid to shareholders;

•  maintaining a dividend investment plan; 

• 

• 

raising or returning capital; and 

raising or repaying debt for working capital requirements, capital 
expenditure and acquisitions. 

Wesfarmers regularly monitors its capital requirements using various 
benchmarks, with the main internal measures being free cash flow 
and debt to EBITDA. The principal external measures are the Group’s 
credit ratings from Standard & Poor’s and Moody’s.

Consolidated
2022
$m

2021
$m

2,301 

3,383 

Free cash flow
Net cash flows from operating 
activities
Less:

Capital expenditure
Net acquisition and disposals

(1,144)
(307)

(896)
(10)

Add:

Proceeds from sale of property, 
plant and equipment and 
intangibles 
Free cash flow

Debt to EBITDA1

Total interest-bearing loans and 
borrowings
Total lease liabilities

Less:

Cash and cash equivalents

Net financial debt (A)

Profit before income tax
Interest on lease liabilities
Other finance costs
Depreciation and amortisation
EBITDA (B)
Debt to EBITDA (times) (A/B) 
Adjusted EBITDA2 (C)   
Debt to EBITDA (times) (A/C) 
(applying adjusted EBITDA)

Group credit ratings
Standard & Poor's
Moody's

260 
1,110 

264 
2,741 

4,958 
7,123 

(705)
11,376 

3,320 
217 
96 
1,575 
5,208 
2.2 
5,208 

3,022 
7,105 

(3,023)
7,104 

3,373 
226 
118 
1,509 
5,226 
1.4 
5,285 

2.2 

1.3 

A-(stable)
A3(stable)

A-(stable)
A3(stable)

1  The calculation of debt to EBITDA may differ from the metrics calculated 

by the credit rating agencies, which each have their own methodologies for 
adjustments. 

2  The FY2021 adjusted EBITDA excludes restructuring costs of $59 million in the 

Kmart Group.

152

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Notes to the financial statements: Capital
For the year ended 30 June 2022

14. DIVIDENDS AND DISTRIBUTIONS

15. EQUITY AND RESERVES

Consolidated
2022
$m

2021
$m

The nature of the Group’s contributed equity
Ordinary shares are fully paid and have no par value. They carry 
one vote per share and the right to dividends. They bear no special 
terms or conditions affecting income or capital entitlements of the 
shareholders and are classified as equity.

907 

998 

1,020 
-  
2,268 
4,195 

873 
204 
-  
2,075 

Reserved shares are ordinary shares that have been repurchased by 
the company and are being held for future use. They include employee 
reserved shares, which are shares issued to employees under the 
share loan plan. Once the share loan has been paid in full, they are 
converted to ordinary shares and issued to the employee.

Incremental costs directly attributable to the issue of new shares are 
shown in equity as a deduction, net of tax, from the proceeds. There 
are no shares authorised for issue that have not been issued at the 
reporting date.

1,134 
-  
1,134 

1,020 
2,268 
3,288 

768 

619 

(486)

(437)

Movement in shares 
on issue

Ordinary Shares
 $m 

'000

Reserved Shares
$m

 '000 

At 1 July 2021
Exercise of 
in-substance options
KEEPP vested during 
the year
Issue of unquoted 
fully-paid ordinary 
shares for the 
purposes of KEEPP
Transfer from other 
reserves
Capital return
At 30 June 2022

At 1 July 2020
Exercise of 
in-substance options
Acquisition of 
shares-on-market for 
KEEPP
Acquisition of 
shares-on-market for 
Performance shares
KEEPP vested during 
the year
Transfer from other 
reserves
At 30 June 2021

1,133,840  15,826 

(2,483)

(102)

-  

-  

-  

-  

94 

345 

-  

-  

305 

-  

(305)

-  

16 
-  
(2,268)
-  
1,134,145  13,574 

-  
-  
(2,349)

-  
-  
(102)

1,133,840  15,818 

(2,535)

(89)

-  

-  

-  

-  

-  

-  

-  

-  

120 

-  

(215)

(10)

(61)

(3)

208 

-  

8 
-  
1,133,840  15,826 

-  
(2,483)

-  
(102)

Determined during the period (dividends 
fully-franked at 30 per cent)

Interim dividend for 2022: $0.80  
(2021: $0.88) per share
Final dividend for 2021: $0.90  
(2020: $0.77) per share
Special dividend for 2020: $0.181 per share
Capital return for 2021: $2.002 per share

Proposed and unrecognised as a liability 
(dividends fully-franked at 30 per cent)

Final dividend for 2022: $1.00 
(2021: $0.90) per share
Capital return for 2021: $2.002 per share

Franking credit balance
Franking credits available for future years at 
30 per cent adjusted for debits and credits 
arising from the payment of income tax 
payable/(receivable) and from recognised 
dividends receivable or payable

Impact on the franking account of dividends 
proposed before the financial report was 
issued but not recognised as a distribution to 
equity holders during the year

1  The fully-franked special dividend reflects the distribution of profits on the sale 

of the Group’s 10.1 per cent interest in Coles during FY2020.

2  On 2 December 2021, a capital return to shareholders of 200 cents per share 

was paid. 

Wesfarmers’ dividend policy considers availability of franking credits, 
current earnings and future cash flow requirements and targeted 
credit metrics.  

The Group operates a dividend investment plan which allows eligible 
shareholders to elect to invest their dividends in ordinary shares. All 
holders of Wesfarmers ordinary shares with addresses in Australia 
or New Zealand are eligible to participate in this plan. The allocation 
price for shares is based on the average of the daily volume-weighted 
average price of Wesfarmers ordinary shares sold on the Australian 
Securities Exchange, calculated with reference to a pricing period as 
determined by the directors.

An issue of shares under the dividend investment plan results in an 
increase in issued capital unless the Group elects to purchase the 
required number of shares on-market.

Shareholder distributions

Interim dividend

Special dividend

Final dividend (FY22: proposed)

Capital return 

$/share

4.0

3.0

2.0

1.0

0.0

2018

2019

2020

2021

2022

Wesfarmers 2022 Annual Report

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Financial statements

Notes to the financial statements: Capital
For the year ended 30 June 2022

15. EQUITY AND RESERVES (CONTINUED)

Consolidated
2022
$m

2021
$m

24 

106 

 24 

 24 

Capital reserve

Cash flow hedge reserve

Demerger reserve

(5,860)

(5,860)

Financial assets reserve

Foreign currency  
translation reserve

48 

34 

24 

45 

Leasing reserve

(518)

(518)

Restructure tax reserve

 150 

 150 

Share-based  
payments reserve

40 

42 

Total reserves

(5,976)

(6,069)

16. EARNINGS PER SHARE

Nature and purpose

The capital reserve is used to accumulate capital profits. The reserve can be used to 
pay dividends or issue bonus shares.

The hedging reserve is used to record the portion of the gain or loss on a 
hedging instrument in a cash flow hedge that is determined to be in an effective 
hedge relationship. The change in cash flow hedge reserve for the year 
ended 30 June 2022 includes the after-tax net increase in the market value of cash 
flow hedges from 30 June 2021, and comprised $72 million (2021: $64 million) of 
foreign exchange rate contracts, $8 million (2021: $13 million) of cross-currency 
interest rate swaps, $(3) million (2021: $5 million) of commodity swaps and a 
$5 million (2021: $2 million) movement in associates and joint venture reserves. 

The demerger reserve is used to recognise the gain on demerger of Coles and the 
demerger dividend.

The financial assets reserve is used to record fair value changes on financial assets 
measured at fair value through other comprehensive income.

The foreign currency translation reserve is used to record exchange differences arising 
from the translation of the financial statements of foreign subsidiaries.

The leasing reserve is used to recognise the cumulative effect of applying 
AASB 16 Leases at the date of initial application.

The restructure tax reserve is used to record the recognition of tax losses arising from 
the equity restructuring of the Group under the 2001 Ownership Simplification Plan. 
These tax losses were generated on adoption by the Group of the tax consolidation 
regime.

The share-based payments reserve is used to recognise the value of equity-settled 
share-based payments provided to employees, including key management personnel, 
as part of their remuneration.

Profit attributable to ordinary equity holders 
of the parent ($m)

WANOS1 used in the calculation of 
basic EPS (shares, million)2

WANOS1 used in the calculation of 
diluted EPS (shares, million)2

   - Basic EPS (cents per share)

   - Diluted EPS (cents per share)

Consolidated
2022

2021

2,352 

2,380 

1,132 

1,131 

1,133 

207.8 

207.6 

1,132 

210.4 

210.2 

1  Weighted average number of ordinary shares.
2  The variance in the WANOS used in the calculation of the basic EPS and the 
diluted EPS is attributable to the dilutive effect of in-substance options and 
restricted shares.

There have been no transactions involving ordinary shares between 
the reporting date and the date of completion of these financial 
statements, apart from the normal conversion of employee-reserved 
shares (treated as in-substance options) to unrestricted 
ordinary shares.

Basic EPS
Basic EPS is calculated as net profit attributable to members of the 
parent, adjusted to exclude any costs of servicing equity (other than 
dividends), divided by the weighted average number of ordinary 
shares, adjusted for any bonus element.

Diluted EPS
Diluted EPS is calculated as per basic earnings per share with an 
adjustment for the weighted average number of ordinary shares 
that would be issued on conversion of all dilutive potential ordinary 
shares. Dilution arises as a result of the employee reserved shares 
issued under the employee share plan being accounted for as 
in-substance options and unvested restricted shares.

154

 Wesfarmers 2022 Annual Report

Basic earnings per share

207.8 cents

cents/share
500

400

300

200

100

0

Reported 
basic 
EPS

Adjusted 
basic 
EPS

FY22

FY211

FY202

FY193

FY184

207.8

210.4

150.0

487.2

105.8

207.8

214.1

183.4

206.8

245.1

FY18  FY19 FY20 FY21 FY22

Reported basic EPS
Basic EPS adjusted for significant items

1  FY2021 EPS of 210.4 cents per share includes significant items relating to the 
restructure of the Kmart Group. Excluding these items, adjusted basic EPS is 
214.1 cents per share.

2  FY2020 EPS of 150.0 cents per share includes significant items relating to 
non-cash impairments, write-offs and provisions for the Kmart Group, the 
non-cash impairment of Industrial and Safety, the finalisation of tax positions on 
prior year disposals and the gain on sale of 10.1 per cent interest in Coles and 
subsequent revaluation of the retained interest. Excluding these items, adjusted 
basic EPS is 183.4 cents per share.

3  FY2019 EPS of 487.2 cents per share includes significant items relating 
to the gains on disposal of Bengalla, Kmart Tyre and Auto Service and 
Quadrant Energy, the gain on demerger of Coles and the provision for Coles' 
supply chain automation. Excluding these items, adjusted basic EPS is 
206.8 cents per share.

4  FY2018 EPS of 105.8 cents per share includes significant items relating to 

non-cash impairments and write-offs and store closure provisions at BUKI, loss 
on disposal of BUKI and Target's non-cash impairment, offset by the gain on 
disposal of the Curragh Coal Mine. Excluding these items, adjusted basic EPS 
is 245.1 cents per share.

Notes to the financial statements: Capital
For the year ended 30 June 2022

17.  INTEREST-BEARING LOANS AND BORROWINGS

Consolidated

2022
$m

2021
$m

In October 2021, EUR600 million (A$866 million) of bonds matured 
and were repaid from available cash balances.

Additionally, the Group issued EUR600 million (A$938 million) of 
12-year sustainability-linked bonds in October 2021. The bonds were 
swapped to Australian dollars at a fixed interest rate of approximately 
3.0 per cent per annum. The bonds have two sustainable 
performance targets (SPTs):

 988 
 988 

 950 
 950 

•  SPT1: Wesfarmers’ retail businesses (Bunnings, Kmart Group 
and Officeworks) to source 100 per cent of their electricity 
requirements from renewable sources by 31 December 2025.

•  SPT2: WesCEF Nitric Acid Ammonium Nitrate production 

facility (NAAN Facility) to limit the average emission intensity to 
0.25 tonne CO2e per tonne of ammonium nitrate produced, or 
lower, during the SPT Measurement Period, which captures the 
emissions intensity for the 24 months to 31 December 2025.

If the SPTs are not met, there will be a maximum coupon step-up of 
25 basis points (12.5 basis points per SPT), effective from the first 
interest payment date after the occurrence of the relevant trigger 
event until the maturity of the bonds. The SPTs will be measured and 
reported annually. The SPTs and coupon step-ups are consistent with 
the Australian dollar sustainability-linked bonds that were issued in 
June 2021.

Throughout the period, a number of bank bilateral agreements have 
been extended. The Group had unused financing facilities available at 
30 June 2022 of $2,099 million (2021: $5,094 million).

RECOGNITION AND MEASUREMENT
Capital markets debt includes foreign and domestic corporate 
bonds. All loans and borrowings are initially recognised at fair value, 
less directly attributable transaction costs. After initial recognition, 
interest-bearing loans and borrowings are subsequently measured at 
amortised cost using the effective interest method. Gains and losses 
are recognised in profit or loss when the liabilities are derecognised.  

The carrying values of liabilities that are the hedged items in fair value 
hedge relationships, which are otherwise carried at amortised cost, 
are adjusted to record changes in the fair values attributable to the 
risks that are being hedged. 

Current
Unsecured

Capital markets debt

Non-current
Unsecured

Bank debt 
Capital markets debt

Total interest-bearing loans and borrowings

 2,067 
 1,903 
 3,970 
 4,958 

 48 
 2,024 
 2,072 
 3,022 

The illustration below provides details, including the principal 
repayment obligations, of all loans and borrowings on issue at 
30 June 2022.

Outstanding loans and borrowings

Bank debt

Capital markets debt

Current 
$988m

Non-current 
$3,970m

A$m
4000

3000

2000

1000

0

FY23

FY24

FY25+

Funding strategies
The Group’s funding strategy is to maintain diversity of funding 
sources and a presence in key financing markets, maintain an 
appropriate average maturity, and balance exposures to fixed and 
floating rates.

Consolidated
Net debt as at 1 July 2021
Cash inflows
Cash outflows
Transfers
Acquisition of controlled entities
Foreign exchange adjustments
Other non-cash movements
Net debt as at 30 June 2022

Net debt as at 1 July 2020
Cash inflows
Cash outflows
Transfers
Foreign exchange adjustments
Fair value changes, relating to hedged risk
Other non-cash movements
Net debt as at 30 June 2021

Liabilities from financing activities

Borrowings due 
within one year 
$m
950 
-  
(1,166)
1,028 
300 
(126)
2 
988 

Borrowings due 
after one year 
$m
2,072 
2,961 
-  
(1,035)
-  
(25)
(3)
3,970 

Assets held to 
hedge long-term 
borrowings 
$m
(335)
-  
-  
-  
-  
152 
(12)
(195)

503 
-  
(500)
981 
(31)
(3)
-  
950 

2,153 
1,000 
(71)
(981)
(34)
-  
5 
2,072 

(386)
-  
-  
-  
65 
3 
(17)
(335)

Total 
$m
2,687 
2,961 
(1,166)
(7)
300 
1 
(13)
4,763 

2,270 
1,000 
(571)
-  
-  
-  
(12)
2,687 

Wesfarmers 2022 Annual Report

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Financial statements

Notes to the financial statements: Risk
For the year ended 30 June 2022

18. FINANCIAL RISK MANAGEMENT

The Group holds financial instruments for the following purposes:

•  Financing: to raise finance for the Group’s operations or, in the case of short-term deposits, to invest surplus funds. The types of 

instruments used include bank loans, capital markets debt, cash and short-term deposits.

•  Operational: the Group’s activities generate financial instruments, including cash, trade receivables, trade payables and finance 

advances.

•  Risk management: to reduce risks arising from the financial instruments described above, including forward exchange contracts and 

cross-currency interest rate swaps.

It is, and has been throughout the year, the Group’s policy that no speculative trading in financial instruments shall be undertaken.

The Group’s holding of these financial instruments exposes it to risk. The Board reviews and agrees the Group’s policies for managing each of 
these risks, which are summarised in the table below:

Risk 

Exposure

Liquidity risk (note 18(B))

Management 

The Group's exposure to liquidity risk arises 
through volatility of cash flows due to trading 
patterns or conditions, interruptions to cash 
flows due to technological incidents or 
banking system incidents, or interruptions to 
funding sources and markets.

The Group's exposure also includes a risk 
that the Group may not be able to repay 
or refinance its interest-bearing loans and 
borrowings when due.

Liquidity risk is managed centrally by Group Treasury through detailed 
forecasting of the operating cash flows of the underlying businesses and 
maintenance of appropriate cash and bank facility arrangements to cover 
reasonably foreseeable events.

The Group maintains diversity of funding sources and an appropriate average 
maturity. The Group aims to spread maturities to avoid excessive refinancing 
in any period. The Group also maintains investment grade credit ratings from 
Standard & Poor's and Moody's, which support its ability to raise additional 
debt in the capital markets when necessary.

Market risk (note 18(C))

Foreign 
currency 
risk 

The Group’s primary currency exposure 
is to the US dollar and arises from sales or 
purchases by a division in currencies other 
than the division’s functional currency. The 
Group is also exposed to the Euro through 
its capital markets debt.

As a result of operations in New Zealand, 
the Group’s balance sheet can also be 
affected by movements in the AUD/NZD 
exchange rate.

Interest rate 
risk 

The Group’s exposure to the risk of changes 
in market interest rates relates primarily 
to the Group's debt obligations that have 
floating interest rates.

The objective of the Group's policy on foreign exchange hedging is to protect 
the Group from adverse currency fluctuations. Hedging is implemented for the 
following reasons: 

•  protection of competitive position; and 

•  greater certainty of earnings due to protection from sudden currency 

movements.

The Group manages foreign exchange risk centrally by hedging material 
foreign exchange exposures for firm sales or purchases or when highly 
probable forecast transactions have been identified (including funding 
transactions).

The Group aims to hedge its non-capital expenditure-related foreign 
currency purchases for which firm commitments or highly probable forecast 
transactions exist. The level of hedging is higher for near term forecast 
transactions than for longer term forecast transactions. The Group also 
aims to hedge 100 per cent of capital expenditure-related foreign currency 
purchases, above divisional defined limits, to match expected payment dates 
and these may extend beyond 12 months. 

The Group mitigates the effect of its translational currency exposure to its 
New Zealand operations by borrowing in New Zealand dollars.

The Group maintains a balance of exposure to floating and fixed rate debt, 
and aims to spread debt renewals to avoid all renewals occurring in the same 
period.

The Group may hedge borrowings to fixed or floating rates as appropriate to 
manage exposure levels. These swaps are designated to hedge interest costs 
associated with underlying debt obligations.

156

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Notes to the financial statements: Risk
For the year ended 30 June 2022

18. FINANCIAL RISK MANAGEMENT (CONTINUED) 

Risk 

Exposure

Management 

Commodity 
price risk 

The Group’s exposure to commodity price risk 
is operational and arises from changes in the 
prices of inputs and inventory used by divisions, 
including where the division must reimburse 
a third party for costs incurred by that party 
(for example, fuel costs as part of transport 
services), which may negatively impact the 
Group's cash flow or profitability.

When appropriate and effective, the Group manages commodity price risk 
centrally by hedging material commodity exposures. Historically, the Group has 
entered into Brent oil futures contracts to hedge the variability in cash flows 
arising from movements in the natural gas price applicable to forecast natural 
gas purchases. In December 2017, three year hedges were taken out which 
ended in December 2020. An additional hedge was taken out in December 
2020, which ended in December 2021. As at 30 June 2022, the Group had no 
current Brent oil futures contracts.

The Group does not currently enter into any financial instruments that vary with 
movements in other commodity prices. The foreign exchange risk component 
may be managed as part of the Group's foreign exchange risk management 
policies.

The Group's other commodity 'own use contracts' are outside the scope of 
AASB 9 Financial Instruments.

Credit risk (note 18(D))

The Group is exposed to credit risk from its 
operating activities (primarily from customer 
receivables) and from its financing activities, 
including deposits with financial institutions, 
foreign exchange transactions and other 
financial instruments.

Customer credit risk is managed by each division subject to established 
policies, procedures and controls relating to customer credit risk 
management. The Group trades primarily with recognised, creditworthy third 
parties. Customers who wish to trade on credit terms are subject to credit 
verification procedures, including an assessment of their independent credit 
rating, financial position, past experience and industry reputation.

Credit risk is the risk that a contracting 
entity will not complete its obligation under a 
financial instrument or customer contract 
that will result in a financial loss to the Group. 

Receivables
Credit risk management practices include reviews of trade receivables aging 
by days past due, the timely follow-up of past due amounts and the use of 
credit securities such as credit insurance, retention of title and letters of credit. 

Financial instruments and cash deposits
Credit risk from deposits with banks and financial institutions is managed 
by Group Treasury in accordance with Board-approved policy. Deposits are 
made within credit limits assigned to each counterparty according to their 
credit rating which must be an investment-grade credit rating. 

The carrying amount of financial assets represents the maximum credit 
exposure. There are no significant concentrations of credit risk within 
the Group.

18(A)  OFFSETTING FINANCIAL INSTRUMENTS
The Group presents its derivative assets and liabilities on a gross basis. Derivative financial instruments entered into by the Group are subject 
to enforceable master netting arrangements, such as an International Swaps and Derivatives Association (ISDA) master netting agreement. In 
certain circumstances, for example, when a credit event such as a default occurs, all outstanding transactions under an ISDA agreement are 
terminated, the termination value is assessed and only a single net amount is payable in settlement of all transactions.

The amounts set out in note 19 represent the derivative financial assets and liabilities of the Group, that are subject to the above arrangements, 
and are presented on a gross basis.

18(B)  LIQUIDITY RISK
As at 30 June 2022, the Group has total undrawn financing facilities available of $2,099 million (2021: $5,094 million). 

The table on the following page classifies the Group’s financial liabilities, including net and gross settled financial instruments and lease liabilities, 
into relevant maturity periods based on the remaining period at the reporting date to the contractual maturity date. The amounts disclosed in the 
tables are the contractual undiscounted cash flows and will not necessarily reconcile with the amounts disclosed in the balance sheet.

Trade and other payables and lease liabilities are recognised at the gross contractual cash flows to be paid using the spot currency exchange 
rates applicable at the reporting date. Expected future interest payments on loans and borrowings exclude accruals recognised in trade and 
other payables at the reporting date and have been estimated using forward currency exchange rates and forward interest rates applicable at 
the reporting date. For loans and borrowings before swaps, hedged commodity swaps, cross-currency interest rate swaps and hedge forward 
exchange contracts, the amounts disclosed are the gross contractual cash flows to be paid estimated using forward currency exchange rates 
applicable at the reporting date.

Wesfarmers 2022 Annual Report

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Financial statements

Notes to the financial statements: Risk
For the year ended 30 June 2022

18(B)  LIQUIDITY RISK (CONTINUED)

on demand or 

< 3 months 3-12 months
$m

$m

1-5 years
$m

>5 years
$m

Total 
contractual 
cash flows
$m

Carrying 
amount 
(assets)/ 
liabilities
$m

5,017
989

22
285

(223)

(91)
5,999

3,988
-

3
305

(2)

1

345
-

97
1,000

-
2,073

323
4,393

-
2,151

121
2,312

5,362
5,213

563
7,990

5,362
4,958

-
7,123

20

77

(100)

(226)

(195)

(142)
1,320

(9)
6,857

-
4,484

(242)
18,660

(233)
17,015

246
951

25
910

(2)

(55)

-
1,085

117
4,250

-

(279)

(25)
5,148

-
1,000

70
2,619

-

-

4,234
3,036

215
8,084

4,234
3,022

-
7,105

(4)

(4)

(333)

(335)

-
3,689

(50)
15,182

(50)
13,972

(6)
4,289

(19)
2,056

Consolidated

Year ended 30 June 2022

Trade and other payables
Loans and borrowings before swaps
Expected future interest payments on loans and 
borrowings
Lease liabilities 
Cross-currency interest rate swaps  
(gross settled)
Hedge forward exchange contracts  
(gross settled)
Total 

Year ended 30 June 2021

Trade and other payables
Loans and borrowings before swaps
Expected future interest payments on loans and 
borrowings
Lease liabilities 
Hedged commodity swaps  
(net settled)
Cross-currency interest rate swaps  
(gross settled)
Hedge forward exchange contracts  
(gross settled)
Total 

18(C)  MARKET RISK 

Foreign exchange risk
The Group's exposures to the US dollar and Euro (prior to hedging contracts) at the reporting date were as follows:

2022

2021

USD
A$m

EUR
A$m

USD
A$m

EUR
A$m

35
40
-
235
-

-
-
225
-
-

25
24
-
49
4

-
-
335
-
-

(1,449)
-
-
(2)
(1,141)

(32)
(1,900)
(30)
-
(1,737)

(1,288)
-
-
-
(1,186)

(42)
(1,979)
-
-
(1,686)

Consolidated

Financial assets
Cash and cash equivalents
Trade and other receivables
Cross-currency interest rate swap
Hedge foreign exchange derivative asset
Commodity derivative asset
Financial liabilities
Trade and other payables
Interest-bearing loans and borrowings
Cross-currency interest rate swap
Hedge foreign exchange derivative liability
Net exposure 

158

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Notes to the financial statements: Risk
For the year ended 30 June 2022

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18(C)  MARKET RISK (CONTINUED)

Group's sensitivity to foreign exchange 
movements 
The sensitivity analysis below shows the impact that a reasonably 
possible change in foreign exchange rates over a financial year would 
have on profit after tax and equity, based solely on the Group’s foreign 
exchange risk exposures existing at the balance sheet date. The 
Group has used the observed range of actual historical rates for the 
preceding five-year period, with a heavier weighting placed on recently 
observed market data, in determining reasonably possible exchange 
movements to be used for the current year’s sensitivity analysis. 
Past movements are not necessarily indicative of future movements. 
The following exchange rates have been used in performing the 
sensitivity analysis.

Consolidated

USD

EUR

USD

2022

2021

Actual
+10% (2021: +10%)
-10% (2021: -10%)

0.69
0.76
0.62

0.66
0.73
0.59

0.75
0.83
0.68

EUR

0.63
0.69
0.57

The impact on profit and equity is estimated by applying the 
hypothetical changes in the US dollar and Euro exchange rate to the 
balance of financial instruments at the reporting date. 

Differences from the translation of financial statements into the Group’s 
presentation currency are not taken into consideration in the sensitivity 
analysis and as such the New Zealand dollar has no material impact. 

The results of the foreign exchange rate sensitivity analysis are driven 
by three main factors, as outlined below:

• 

• 

the impact of applying the above foreign exchange movements 
to financial instruments that are not in hedge relationships will be 
recognised directly in profit;

to the extent that the foreign currency-denominated derivatives 
on the balance sheet form part of an effective cash flow hedge 
relationship, any fair value movements caused by applying the 
above sensitivity movements will be deferred in equity and will 
not affect profit; and

•  movements in financial instruments forming part of an effective 

fair value hedge relationship will be recognised in profit. However, 
as a corresponding entry will be recognised for the hedged item, 
there will be no net impact on profit.

At 30 June 2022, had the Australian dollar moved against the 
US dollar and Euro, as illustrated in the table above, with all other 
variables held constant, the Group’s profit after tax and other equity 
would have been affected by the change in value of its financial assets 
and financial liabilities as shown in the table below.

Consolidated

AUD/USD +10% (2021: +10%)
- impact on profit
- impact on equity 
AUD/USD -10% (2021: -10%)
- impact on profit
- impact on equity 

AUD/EUR +10% (2021: +10%)
- impact on profit
- impact on equity 
AUD/EUR -10% (2021: -10%)
- impact on profit
- impact on equity 

2022
A$m

2021
A$m

4
(144)

(5)
150

-
7

-
(12)

7
(145)

11
178

2
48

(2)
(59)

Interest rate risk 
As at the reporting date, the Group had financial assets and liabilities 
with exposure to interest rate risk as shown in the table below. 
Interest on financial instruments classified as floating rate is repriced 
at intervals of less than one year. Interest on financial instruments 
classified as fixed rate is fixed until maturity of the instrument. The 
classification between fixed and floating interest takes into account 
applicable hedge instruments.

Consolidated

Financial assets
Fixed rate
Finance advances and loans

Floating rate
Cash at bank, on deposit and held in joint 
operation

Financial liabilities
Fixed rate
Capital markets debt 

Floating rate
Unsecured bank debt
Capital markets debt 

2022
$m

2021
$m

3

3

467

2,795

2,891

2,974

2,067
-

48
-

At 30 June 2022, after taking into account the effect of interest 
rate swaps and economic hedging relationships, approximately 
43 per cent of the Group’s borrowings are exposed to movements in 
variable rates (2021: approximately two per cent). 

Group's sensitivity to interest rate movements
The following sensitivity analysis shows the impact that a reasonably 
possible change in interest rates over a financial year would have on 
profit after tax and equity. The impact is determined by assessing 
the effect that such a reasonably possible change in interest rates 
would have had on interest income/(expense) and the impact on 
financial instrument fair values existing at the balance sheet date. This 
sensitivity is based on reasonably possible changes over a financial 
year, determined using observed historical interest rate movements for 
the preceding five-year period, with a heavier weighting given to more 
recent market data.

The results of the sensitivity analysis are driven by three main factors, 
as outlined below:

• 

• 

for unhedged floating rate financial instruments, any increase or 
decrease in interest rates will impact profit;

to the extent that derivatives form part of an effective cash flow 
hedge relationship, there will be no impact on profit and any 
increase/(decrease) in the fair value of the underlying derivative 
instruments will be deferred in equity; and

•  movements in the fair value of derivatives in an effective fair value 
hedge relationship will be recognised directly in profit. However, 
as a corresponding entry will be recognised for the hedged item, 
there will be no net impact on profit.

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Financial statements

Notes to the financial statements: Risk
For the year ended 30 June 2022

18(C)  MARKET RISK (CONTINUED)

The following sensitivity analysis is based on the Australian 
variable interest rate risk exposures in existence at balance sheet 
date. If interest rates had moved by +/-100bps (basis points) 
(2021: +/- 50bps) and with all other variables held constant, the 
Group's profit after tax and equity would have been affected as shown 
in the table below.

18(E)  FAIR VALUES 
The carrying amounts and estimated fair values of all the Group's 
financial instruments carried at amortised cost in the financial 
statements are materially the same with the exception of the following:

Consolidated

2022
$m

2021
$m

Capital markets debt: carrying amount
Capital markets debt: fair value 

2022
$m

2021
$m

 2,891 
 2,443 

 2,974 
 2,987 

Consolidated

+100bps (2021: +50bps)
- impact on profit
- impact on equity 

-100bps (2021: -50bps)
- impact on profit
- impact on equity 

(13)
52

13
(58)

9
4

(9)
(4)

18(D)  CREDIT RISK
The carrying amount of current receivables represents the Group's 
maximum credit exposure. 

The Group applies the simplified approach in measuring ECLs for 
trade receivables and other short-term debtors, whereby an allowance 
for impairment is considered across all trade receivables and other 
short-term debtors, regardless of whether a credit event has occurred, 
based on the expected losses over the lifetime of the receivable. 
Therefore, the Group does not track changes in credit risk but instead 
recognises a loss allowance based on lifetime ECLs at each reporting 
date. The Group has established the following provision matrix 
that is based on its historical credit loss experience, adjusted for 
forward-looking factors specific to debtors and the economic climate. 

Consolidated  

Trade and other 
receivables days 
past due 

2022
Current 
Under one month 
One to two months 
Two to three months 
Over three months 
Total 

2021
Current 
Under one month 
One to two months 
Two to three months 
Over three months 
Total 

Estimated total 
gross carrying 
amount at default
$m

Expected 
credit 
loss rate
%

Lifetime 
expected 
credit 
loss
$m

1,592 
 313 
 110 
 20 
 114 
 2,149 

896 
 261 
 72 
 13 
 38 
 1,280 

0.6 
1.3 
3.6 
30.0 
28.1 

1.0
1.9
2.8
7.7
42.1

9 
4 
4 
6 
32 
55

9 
5 
2 
1 
16 
33

160

 Wesfarmers 2022 Annual Report

The methods and assumptions used to estimate the fair value of 
financial instruments are as follows.

Cash 
The carrying amount is fair value due to the asset's liquid nature.

Receivables/payables 
Due to the short-term nature of these financial rights and obligations, 
carrying amounts are estimated to represent fair values. 

Other financial assets/liabilities 
The fair values of capital markets debt have been calculated by 
discounting the expected future cash flows at prevailing interest rates 
using market observable inputs. The fair values of other financial 
assets have been calculated using market interest rates. The fair 
values of listed investments, classified as financial assets held at 
FVOCI, have been calculated using quoted share prices (Level 1).

Derivatives 
The Group enters into derivative financial instruments with various 
counterparties, principally banks and financial institutions with 
investment grade credit ratings. Foreign exchange forward contracts, 
interest rate swap contracts, cross-currency interest rate swaps and 
commodity futures contracts are all valued using forward pricing 
techniques. This includes the use of market observable inputs, such 
as foreign exchange spot and forward rates, yield curves of the 
respective currencies, interest rate curves and forward rate curves of 
the underlying commodity. Accordingly, these derivatives are classified 
as Level 2 in the fair value measurement hierarchy.

Valuation of financial instruments 
For all fair value measurements and disclosures, the Group uses the 
following to categorise the method used:

•  Level 1: the fair value is calculated using quoted prices in active 

markets.

•  Level 2: the fair value is estimated using inputs other than quoted 
prices included in Level 1 that are observable for the asset or 
liability, either directly (as prices) or indirectly (derived from prices).

•  Level 3: the fair value is estimated using inputs for the asset or 

liability that are not based on observable market data.

The Group’s financial instruments were primarily valued using market 
observable inputs (Level 2), with the exception of financial assets 
measured at FVOCI (Level 1) and shares in unlisted companies at fair 
value (Level 3) which were $13 million at 30 June 2022 (2021: $nil).

For financial instruments that are carried at fair value on a recurring 
basis, the Group determines whether transfers have occurred 
between levels in the hierarchy by reassessing categorisation 
(based on the lowest level input that is significant to the fair value 
measurement as a whole) at the end of each reporting period. There 
were no transfers between Level 1 and Level 2 during the year. There 
were no Level 3 fair value movements during the year.

Notes to the financial statements: Risk
For the year ended 30 June 2022

19. HEDGING

Types of hedging instruments
The Group is exposed to risk from movements in foreign exchange, 
interest rates and commodity prices. As part of its risk management 
strategy set out in note 18, the Group holds the following types of 
derivative instruments:

Forward exchange contracts: contracts denominated in US dollars, 
Euro and other foreign currencies to hedge highly probable sale and 
purchase transactions (cash flow hedges).

Cross-currency interest rate swaps: to manage the Group’s exposure 
to foreign exchange rate variability in its interest repayments on foreign 
currency-denominated borrowings (cash flow hedges) or to hedge 
against movements in the fair value of those liabilities due to foreign 
exchange and interest rate movements (fair value hedges). The 
borrowing margin on cross-currency interest rate swaps has been 
treated as a ‘cost of hedging’ and deferred into equity. These costs 
are then amortised to the profit and loss as a finance cost over the 
remaining life of the borrowing.

Interest rate swaps: to manage the Group’s exposure to fixed 
and floating interest rates arising from borrowings. These hedges 
incorporate cash flow hedges, which fix future interest payments, and 
fair value hedges, which reduce the Group’s exposure to changes 
in the value of its assets and liabilities arising from interest rate 
movements. As at 30 June 2022, the Group had no current interest 
rate swaps.

Brent oil futures contracts: to manage the Group’s exposure to price 
variability in its forecast purchase of natural gas (cash flow hedge). As 
at 30 June 2022, the Group had no current Brent oil futures contracts.

Consolidated

Foreign exchange contracts

Notional

$m

2022
Weighted 
average 
hedged rate

Asset Liability

Notional

A$m

A$m

$m

2021
Weighted 
average 
hedged rate

Asset

Liability

A$m

A$m

Cash flow hedge - sales (AUD)

US$36

Cash flow hedge - purchases (AUD)

US$2,256

Cash flow hedge - purchases (NZD)

US$149

Cash flow hedge - purchases (AUD)

€ 7

Asset: nil 
Liability: 0.72

Asset: 0.74 
Liability: 0.69

Asset: 0.69 
Liability: 0.62

Asset: 0.66 
Liability: 0.64

 - 

(2)

US$28

 214 

-   US$2,488

 21 

 - 

-  

-  

US$186

€ 15

Asset: 0.71 
Liability: 0.76
Asset: 0.78 
Liability: 0.71
Asset: 0.72 
Liability: 0.67
Asset: 0.64 
Liability: 0.58

Cross-currency interest rate swaps

Cash flow hedge
Brent oil futures contracts
Cash flow hedge

€ 1,250

4.51% fixed

 225 

(30)

€ 1,250

5.32% fixed

335 

 - 

 - 

 - 

-  

0.138m 
barrels

AU$65.49      
per barrel

4 

Total derivative asset/(liability)

 460 

(32)

434 

(45)

RECOGNITION AND MEASUREMENT

Recognition 
Derivative financial instruments are initially recognised at fair value 
on the date on which a derivative contract is entered into and are 
subsequently remeasured to fair value as set out in note 18(E). The 
method of recognising any remeasurement gain or loss depends on 
the nature of the item being hedged. For hedging instruments, any 
hedge ineffectiveness is recognised directly in the income statement 
in the period in which it is incurred. This was immaterial in the 
current year.

Hedge accounting
At the start of a hedge relationship, the Group formally designates and 
documents the hedge relationship, including the risk management 
strategy for undertaking the hedge. This includes identification of 
the hedging instrument, the hedged item or transaction, the nature 
of the risk being hedged and how the entity will assess the hedging 
instrument’s effectiveness (including the analysis of sources of hedge 
ineffectiveness and how the hedge ratio is determined). Hedge 
accounting is only applied where there is an economic relationship 
between the hedged item and the hedging instrument and the hedge 
ratio of the hedging relationship is the same as that resulting from 
actual quantities of the hedged item and hedging instrument used.

For the purposes of hedge accounting, hedges are classified as:

•  Fair value hedges when they hedge the exposure to changes in 
the fair value of a recognised asset, liability or firm commitment 
that could affect profit or loss; or

•  Cash flow hedges when they hedge a particular risk associated 

with the cash flows of recognised assets and liabilities and highly 
probable forecast transactions. A hedge of the foreign exchange 
risk of a firm commitment is accounted for as a cash flow hedge.

The Group will discontinue hedge accounting prospectively only when 
the hedging relationship, or part of the hedging relationship no longer 
qualifies for hedge accounting, which includes where there has been a 
change to the risk management objective and strategy for undertaking 
the hedge and instances when the hedging instrument expires or is 
sold, terminated or exercised. For these purposes, the replacement 
or rollover of a hedging instrument into another hedging instrument 
is not an expiration or termination if such a replacement or rollover is 
consistent with our documented risk management objective. 

Wesfarmers 2022 Annual Report

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Financial statements

Notes to the financial statements: Risk
For the year ended 30 June 2022

19. HEDGING (CONTINUED)

Hedges that meet the criteria for hedge accounting are classified and accounted for as follows:

Fair value hedges
The Group uses fair value hedges to mitigate the risk of changes in the fair value of foreign currency-denominated borrowings from foreign 
currency and interest rate fluctuations over the hedging period. Where these fair value hedges qualify for hedge accounting, gains or losses from 
remeasuring the fair value of the hedging instrument are recognised within finance costs in the income statement, together with gains or losses 
in relation to the hedged item where those gains or losses relate to the risk intended to be hedged. The net amount recognised in the income 
statement in FY2022 was less than $1 million (2021: less than $1 million).

If the hedged item is a firm commitment (and therefore not recognised), the subsequent cumulative change in the fair value of the hedged risk 
is recognised as an asset or liability with a corresponding gain or loss recognised in profit or loss. The changes in the fair value of the hedging 
instrument are also recognised in profit or loss.

The accumulated amount of fair value adjustments which are included in the carrying amount of interest-bearing loans and borrowings in the 
balance sheet as at 30 June 2022 was less than $1 million (2021: less than $1 million):

Consolidated
Face value at inception
Change arising from revaluation to spot rates at 30 June

Balance of unamortised discount/premium
Carrying amount at amortised cost

2022

2021

Foreign 
bonds
$m
 1,702 
 198 
 1,900 
(5)
 1,895 

Domestic 
bonds
$m
 1,000 
 - 
 1,000 
(4)
 996 

Foreign 
bonds
$m
 1,630 
 349 
 1,979 
(1)
 1,978 

Domestic 
bonds
$m
 1,000 
 - 
 1,000 
(4)
 996 

There was no material ineffectiveness relating to financial instruments in designated fair value hedge relationships during the year (2021: nil).

Cash flow hedges
The Group uses cash flow hedges to mitigate the risk of variability of future cash flows attributable to foreign currency fluctuations over the 
hedging period associated with our foreign currency-denominated borrowings and ongoing business activities, predominantly where we 
have highly probable purchase or settlement commitments in foreign currencies. The Group also uses cash flow hedges to hedge variability 
in cash flows due to interest rate or natural gas price movements associated with some of our domestic borrowings or forecast natural gas 
purchases respectively. 

For cash flow hedges, the portion of the gain or loss on the hedging instrument that is effective is recognised directly in equity, while the 
ineffective portion is recognised in profit or loss. The maturity profile of these hedges is shown in note 18(B) with the recognition of the gain or 
loss expected to be consistent with this profile.

Consolidated

2022
Foreign 
bonds
$m

Commodity 
hedge
$m

Trade
$m

2021
Foreign 
bonds
$m

Commodity 
hedge
$m

Trade
$m

Change in the fair value of the hedged item 

183 

(140)

(4)

90 

(48)

7 

Amounts recognised in equity are transferred to the income statement when the hedged transaction affects profit or loss, such as when hedged 
income or expenses are recognised or when a forecast sale occurs. When the hedged item is the cost of a non-financial asset or liability, the 
amounts taken to equity are transferred to the initial carrying amount of the non-financial asset or liability.

If the forecast transaction is no longer expected to occur, amounts previously recognised in equity are transferred to the income statement. If 
the hedging instrument expires or is sold, terminated or exercised without replacement or rollover, or if its designation as a hedge is revoked, 
amounts previously recognised in equity remain in equity until the forecast transaction occurs.

162

 Wesfarmers 2022 Annual Report

Notes to the financial statements: Risk
For the year ended 30 June 2022

20. IMPAIRMENT OF NON-FINANCIAL ASSETS

Testing for impairment
The Group tests property, plant and equipment, mine properties, 
goodwill, intangibles and right-of-use assets for impairment:

•  at least annually for indefinite life intangibles and goodwill; and

•  where there is an indication that the asset may be impaired 

(which is assessed at least at each reporting date); or

•  where there is an indication that previously recognised 

impairment (on assets other than goodwill) may have changed.

Annual impairment testing of intangibles and goodwill is performed 
at 31 March each year to coincide with the timing of the annual 
corporate plan and business forecast process. 

If the asset does not generate independent cash inflows and its value 
in use cannot be estimated to be close to its fair value, the asset is 
tested for impairment as part of the cash generating unit (CGU) to 
which it belongs. Mineral rights, exploration and evaluation and mine 
properties assets are allocated to the CGU to which the exploration 
activity relates.  

Assets are impaired if their carrying value exceeds their recoverable 
amount. The recoverable amount of an asset or CGU is determined as 
the higher of its fair value less costs of disposal (FVLCOD) and value 
in use (VIU).

Impairment calculations
In assessing VIU, the estimated future cash flows are discounted to 
their present value using a discount rate that reflects current market 
assessments of the time value of money and the risks specific to 
the asset or CGU. In determining FVLCOD for CGUs, a discounted 
cash flow model is used based on a methodology consistent with 
that applied by the Group in determining the value of potential 
acquisition targets, maximising the use of market observed inputs. 
These calculations, classified as Level 3 on the fair value hierarchy, are 
compared to valuation multiples, or other fair value indicators where 
available, to ensure reasonableness. 

Inputs to impairment calculations
For VIU calculations and FVLCOD discounted cash flow models, 
cash flow projections are based on Wesfarmers’ corporate plans and 
business forecasts prepared by management and approved by the 
Board. The corporate plans are developed annually with a five-year 
outlook and, for the VIU calculations, are adjusted to exclude the 
costs and benefits of expansion capital and on the understanding that 
actual outcomes may differ from the assumptions used.

In determining FVLCOD for CGUs, these projections are discounted 
using a risk-adjusted discount rate commensurate with a typical 
market participant’s assessment of the risk associated with the 
projected cash flows. When calculating the FVLCOD of a CGU, 
forecast cash flows also incorporate reasonably available market 
participant assumptions.

Cash flows beyond the five-year corporate plan period are 
extrapolated using estimated growth rates, which are based on Group 
estimates, taking into consideration historical performance as well as 
expected long-term operating conditions. Growth rates do not exceed 
the consensus forecasts of the long-term average growth rate for the 
industry in which the CGU operates.

The potential impacts of climate change have been considered in the 
Group's impairment testing through downside scenario analysis. 

Discount rates used in both calculations are based on the weighted 
average cost of capital determined by prevailing or benchmarked 
market inputs, risk adjusted where necessary. Other assumptions are 
determined with reference to external sources of information and use 
consistent estimates for variables such as terminal cash flow multiples. 

Recognised impairment
During FY2022, impairment of $21 million, net of reversals, was 
recognised in respect of non-financial assets (2021: $54 million). 
The current period impairment primarily related to store assets where 
the store is planned for closure or non-renewal of the lease term. The 
recoverable amount of these stores based on forecast cash flows for 
the stores over their remaining useful lives totalled $15 million.

Reversal of impairment
Where there is an indication that previously recognised impairment 
losses may no longer exist or have decreased, the asset is tested. 
If there has been a change to the estimates used to determine 
the asset’s recoverable amount since the last impairment loss 
was recognised, the carrying value of the asset is increased to its 
recoverable amount. That increased amount cannot exceed the 
carrying value that would have been determined, net of depreciation, 
had no impairment loss been recognised for the asset in prior years. 
Such reversal is recognised in profit or loss and the depreciation 
charge is adjusted in future periods to allocate the asset’s revised 
carrying value, less any residual value, on a systematic basis over its 
remaining useful life. Impairments recognised against goodwill are 
not reversed.

There were no material reversals of impairment during FY2022. In light 
of the current economic conditions and associated uncertainty, there 
was not sufficient evidence available to indicate that conditions giving 
rise to previously recognised impairment have reversed.

Key estimates: impairment of non-financial assets

The Group has assessed the recoverable amounts of CGUs 
with goodwill and other indefinite life intangible assets using 
FVLCOD calculations. Post-tax discount rates applied in the 
impairment testing for the CGUs and associated assets ranged 
from 7.9 per cent to 11.3 per cent and terminal growth rates 
ranged from 2.0 per cent to 2.5 per cent. Key assumptions in 
the CGU's cash flow projections include growth rates and gross 
margins which are based on the corporate plans that take into 
consideration historic performance, forecast macroeconomic 
conditions and the estimated effect of strategies.

For all CGUs with material goodwill or indefinite life intangible 
assets, other than Health, FVLCOD calculations determined 
headroom in excess of 25 per cent of the CGU's carrying value. 

Based on current economic conditions and CGU performance, 
no reasonably possible change in a key assumption used in the 
determination of the recoverable value of these CGUs would 
result in a material impairment to the Group. The Group's 
impairment testing has taken into account the impacts of 
COVID-19, which for the period have been largely the result of 
temporary store closures and supply chain constraints. Despite 
these downside impacts, the Group's retail businesses have 
remained highly profitable as they have evolved to suit the 
changes in customer shopping habits.

As the Health CGU was recently acquired, its carrying value 
approximates its fair value. Adverse changes in macroeconomic 
factors or failure to achieve planned growth objectives may 
therefore lead to future impairment.

Store CGUs and associated assets are reviewed for indicators 
of impairment using both external and internal sources of 
information. Detailed impairment testing is completed when 
the existence of an indication of impairment is identified. Where 
detailed impairment testing is required, the recoverable amount 
of the store CGU is determined using VIU calculations, based 
on forecast cash flows for the store over its remaining life. 

Wesfarmers 2022 Annual Report

163

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Financial statements

Notes to the financial statements: Group information
For the year ended 30 June 2022

21. ASSOCIATES AND JOINT ARRANGEMENTS

Investment in associates
Interest in joint ventures

Movement in investment in associates
Net carrying amount at the beginning of the 
year
Share of net profit from operations of 
associates
Dividends
Associates acquired during the year
Movements in reserves
Net carrying amount at the end of the year

Total comprehensive income from associates 
and joint ventures
Share of net profits from associates
Other comprehensive loss of associates
Share of net profits from joint ventures
Other comprehensive income of joint ventures
Total comprehensive income for the year

BWP Trust

The Group has a 24.8 per cent interest in BWP Trust. The Group's 
interest in BWP Trust is accounted for using the equity method in 
the consolidated financial statements. The fair value of the Group's 
interest, by reference to the closing share price of BWP Trust on 
30 June 2022, was $618 million (2021: $679 million) (Level 1 in the 
fair value hierarchy). The following table summarises the financial 
information of the Group's investment in BWP Trust.

Consolidated
2022
$m

2021
$m

 787 
 147 
 934 

 660 
 115 
775 

 660 

 625 

 159 
(48)
22 
(6)
 787 

 159 
 (6)
 14 
 11 
 178 

 86 
(51)
-  
-  
660 

86 
-  
17 
5 
108 

Summarised balance sheet 
Current assets
Non-current assets
Current liabilities
Non-current liabilities
Net assets
Group's share of BWP Trust's net assets

Summarised income statement
Revenue
Expenses
Unrealised gains in fair value
Profit attributable to the unit holders of 
BWP Trust
Group's share of profit for the period

2022

$m

2021

$m

 21 
 2,936 
(80)
(456)
 2,421 
 600 

 153 
(39)
 372 

 486 
 121 

53 
2,557 
(83)
(475)
2,052 
509 

152 
(38)
149 

263 
65 

RECOGNITION AND MEASUREMENT 

Interests in joint arrangements

Joint operations

The Group recognises its share of the assets, liabilities, expenses and 
income from the use and output of its joint operations. 

Joint ventures

The Group’s investments in its joint ventures are accounted for using 
the equity method.

Investment in associates
The Group’s investments in its associates, being entities in which the 
Group has significant influence and are neither subsidiaries or joint 
arrangements, are accounted for using the equity method. Under this 
method, the investment in the associates are carried in the balance 
sheet at cost plus any post-acquisition changes in the Group’s share 
of the net assets of the associate. 

Goodwill relating to associates is included in the carrying amount of 
the investment and is not amortised. After application of the equity 
method, the Group determines whether it is necessary to recognise 
any additional impairment loss with respect to the Group’s investment. 
The income statement reflects the Group’s share of the results of the 
operations of the associate.

Where there has been a change recognised directly in the equity of 
the associate, the Group recognises its share of any changes and 
discloses this in the statement of comprehensive income.

Where the reporting dates of the associates and the Group vary, 
the associates' management accounts for the period to the Group’s 
balance date are used for equity accounting. The accounting policies 
of associates are consistent with those used by the Group for like 
transactions and events in similar circumstances.

Investment properties owned by associates are initially measured at 
cost, including transaction costs. Subsequent to initial recognition, 
investment properties are stated at fair value, which reflects market 
conditions at the balance sheet date. Gains or losses arising from 
changes in the fair values of investment properties are recognised in 
profit or loss of the associate, in the year in which they arise. This is 
consistent with the Group’s policy.

164

 Wesfarmers 2022 Annual Report

Notes to the financial statements: Group information
For the year ended 30 June 2022

21.  ASSOCIATES AND JOINT ARRANGEMENTS (CONTINUED)

Key judgement: control and significant influence

The Group has a number of management agreements with associates and joint arrangements it considers when determining whether 
it has control, joint control or significant influence. The Group assesses whether it has the power to direct the relevant activities of the 
investee by considering the rights it holds to appoint or remove key management and the decision-making rights and scope of powers 
specified in the contract. 

Where the Group has the unilateral power to direct the relevant activities of an investee, the Group then assesses whether the power 
it holds is for its own benefit (acting as principal) or for the benefit of others (acting as agent). This determination is based on a number 
of factors including an assessment of the magnitude and variability of the Group’s exposure to variable returns associated with its 
involvement with the investee. In an agency capacity, the Group is considered to be acting on behalf of other parties and therefore does 
not control the investee when it exercises its decision-making powers.

Interests in associates and joint arrangements

Associates

Principal activity

Reporting date 

Country of 
incorporation/
place of business

Property investment
Industrial workwear supplier
Investment trust
Investment banking

BWP Trust 
Geared Up Culcha Pty Ltd
Gresham AC Trust No. 2
Gresham Partners Group Limited
Queensland Nitrates Management Pty Ltd Chemical manufacture
Chemical manufacture
Queensland Nitrates Pty Ltd 
Pine sawmillers
Wespine Industries Pty Ltd
Restoration and resale of used 
World’s Biggest Garage Sale Pty Ltd
goods

30 June
30 June
30 June
30 September
30 June
30 June
30 June
30 June

Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia

Ownership

2022

2021

%

24.8
49.0
(a)
50.0
50.0
50.0
50.0
21.4

%

24.8
-
-
50.0
50.0
50.0
50.0
-

Joint operations

Sodium Cyanide 
Mt Holland Lithium

Joint ventures

BPI NO 1 Pty Ltd
Covalent Lithium Pty Ltd
Loyalty Pacific Pty Ltd1

Sodium cyanide manufacture
Lithium development

30 June
31 December

Australia
Australia

75.0
50.0

75.0
50.0

Property management
Management company
Loyalty programs

30 June
31 December
26 June

Australia
Australia
Australia

(b)
50.0
50.0

(b)
50.0
50.0

1  A wholly-owned subsidiary, Wesfarmers Loyalty Management Pty Ltd, has a 50.0 per cent interest in Loyalty Pacific Pty Ltd (Flybuys).
(a)  Gresham AC Trust No. 2: While the Group's interest in the unit holders' funds of Gresham AC Trust No.2 amounts to greater than 50.0 per cent, it is not a 

controlled entity as the Group does not have the practical ability to direct its relevant activities.

(b)   BPI NO 1 Pty Ltd: While the Group owns the only equity share in BPI NO 1 Pty Ltd, the Group’s effective interest approximates 50.0 per cent and joint control is 

effected through contractual arrangements with the joint venture partner.

Wesfarmers 2022 Annual Report

165

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Financial statements

Notes to the financial statements: Group information
For the year ended 30 June 2022

22. SUBSIDIARIES

The consolidated financial statements include the financial statements of Wesfarmers Limited and the subsidiaries listed in the following table:

Entity

A.C.N. 003 921 873 Pty Limited

A.C.N. 004 191 646 Pty Ltd

A.C.N. 007 870 484 Pty Ltd 

A.C.N. 061 462 593 Pty Ltd

A.C.N. 092 194 904 Pty Ltd 

A.C.N. 112 719 918 Pty Ltd

A.C.N. 645 670 711 Pty Ltd

A.C.N. 645 674 102 Pty Ltd

A.C.N. 655 875 620 Pty Ltd

AEC Environmental Pty Ltd 

ANKO Global Holdings Pty Ltd

ANKO Retail Incorporated 

API (Canberra) Pty Ltd

API Financial Services Australia Pty 
Limited

@

~

+

z

@

@

API Healthcare Holdings (NZ) Limited

n @

API Leasing Pty Ltd

API Owned CSC Pty Ltd

API Services Australia Pty Ltd

API Victoria Pty Ltd

Australian Gold Reagents Pty Ltd

Australian Graphics Pty Ltd 

Australian International Insurance 
Limited 

Australian Light Minerals Pty Ltd

Australian Pharmaceutical Industries 
Ltd

Australian Pharmaceutical Industries 
(Queensland) Pty Ltd

Australian Underwriting Holdings 
Limited 

Australian Underwriting Services Pty 
Ltd 

Australian Vinyls Corporation Pty Ltd  

AVC Holdings Pty Ltd 

AVC Trading Pty Ltd 

BBC Hardware Limited 

BBC Hardware Properties (NSW) Pty 
Ltd

BBC Hardware Properties (Vic) Pty 
Ltd

Beaumont Australia Pty Limited

Beaumont Bathrooms Renovator (SA) 
Pty Limited

Beaumont's Discount Tile Warehouse 
Pty Limited

Beaumont Tiles NZ Pty Limited

Beaumont Tiles (Vic) Pty Limited

Blacksmith Jacks Pty Ltd

@

@

@

@

+

@

@

+

+

+

+

+

@

@

@

@

@

166

 Wesfarmers 2022 Annual Report

2022
%

2021
%

Entity

100

100

100

100

100

100

100

100

Blackwoods 4PL Pty Ltd 

Blackwoods Training Pty Ltd

Blackwoods Xpress Pty Ltd

BPI Management Pty Ltd

BrandsExclusive (Australia) Pty Ltd

Brenahan Exploration Pty Ltd

Bresnahan Exploration Pty Ltd

BUKI (Australia) Pty Ltd 

-

Bullivants International Pty Ltd 

Bullivants Pty Limited 

Bunnings (NZ) Limited

Bunnings Group Limited 

Bunnings Joondalup Pty Ltd

Bunnings Limited

# n

100

100

100

100

100

100

100

100

100

 - 

100

100

100

100

100

100

100

100

100

75

100

100

100

100

100

100

100

100

-

-

-

-

-

-

-

75

100

100

100

-

-

100

100

100

100

100

100

100

100

100

100

100

100

Bunnings Management Services Pty 
Ltd

Bunnings Properties Pty Ltd

Bunnings Technologies India Private 
Limited 

BWP Management Limited 

C S Holdings Pty Limited 

Campbells Hardware & Timber Pty 
Limited

Canberra Pharmaceutical Supplies 
Trust

Catch Essentials Pty Ltd

Catch Group Holdings Limited

Catch Group Share Holdings Pty Ltd

Catch.com.au Pty Ltd 

CGNZ Finance Limited 

Chemical Holdings Kwinana Pty Ltd 

Clearskincare Adelaide Street Pty Ltd

Clearskincare Bendigo Pty Ltd

Clearskincare Bondi Beach Pty Ltd 

Clearskincare Bondi Junction Pty Ltd 

Clearskincare Brighton Pty Ltd

Clearskincare Canberra City Pty Ltd 

100

100

Clearskincare Carindale Pty Ltd 

100

100

100

100

100

100

100

Clearskincare Carousel Pty Ltd

100

Clearskincare Chatswood Pty Ltd

-

-

-

-

-

Clearskincare Chermside Pty Ltd

Clearskincare Chirnside Park Pty Ltd

Clearskincare City Square Pty Ltd 

Clearskincare Claremont Pty Ltd

Clearskincare Clarence Street Pty Ltd 

Clearskincare Clinics Australia Pty Ltd

100

Clearskincare Clinics Payroll Pty Ltd

2022
%

100

 - 

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

2021
%

100

100

100

100

100

-

-

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

-

100

100

100

100

100

100

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

~

@

@

+

+

n

+

+

+

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@

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Notes to the financial statements: Group information
For the year ended 30 June 2022

S
T
A
T
E
M
E
N
T
S

I

F
N
A
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C
A
L

I

22. SUBSIDIARIES (CONTINUED)

Entity

Clearskincare Clinics Pty Ltd

Clearskincare Cockburn Gateway 
Pty Ltd

Clearskincare Collins Street Pty Ltd

Clearskincare Cremorne Pty Ltd 

Clearskincare Cronulla Pty Ltd

Clearskincare Doncaster Pty Ltd

Clearskincare Fremantle Pty Ltd

Clearskincare Hurstville Pty Ltd

Clearskincare Leichhardt Pty Ltd

Clearskincare Macarthur Square Pty 
Ltd

Clearskincare Macquarie Centre Pty 
Ltd 

Clearskincare Miranda Pty Ltd 

Clearskincare Moonee Ponds Pty Ltd

Clearskincare Mt Lawley Pty Ltd 

@

@

@

@

@

@

@

@

@

@

@

@

@

@

Clearskincare Newmarket Limited

n @

Clearskincare Northland Pty Ltd 

Clearskincare Norwood Pty Ltd

Clearskincare Parramatta Pty Ltd 

Clearskincare Quentin Ave Pty Ltd

Clearskincare QV Melbourne Pty Ltd 

Clearskincare Robina Pty Ltd

Clearskincare Rockdale Pty Ltd 

Clearskincare South Australia Pty Ltd

Clearskincare South Yarra Pty Ltd

Clearskincare Southland Pty Ltd

Clearskincare Southport Pty Ltd

Clearskincare Sunshine Plaza Pty Ltd

@

@

@

@

@

@

@

@

@

@

@

@

Clearskincare Takapuna Limited

n @

Clearskincare Toowong Pty Ltd

Clearskincare Ventures Pty Ltd

Clearskincare Warringah Mall Pty Ltd

Clearskincare West End Pty Ltd 

CMNZ Investments Pty Ltd 

ConsortiumCo Pty Ltd 

Coo-ee Investments Pty Limited

Coregas NZ Limited 

Coregas Pty Ltd 

Crosby Tiles Pty Ltd

Crowl Creek Exploration Pty Ltd

CSBP Ammonia Terminal Pty Ltd 

CSBP Limited 

CSC Ashfield Mall Pty Ltd

CSC Auckland Limited

CSC Bayside Frankston Pty Ltd

CSC Camberwell Pty Ltd

@

@

@

@

n

+

@

+

@

n @

@

@

2022
%

2021
%

Entity

2022
%

2021
%

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

100

100

100

100

100

-

100

100

100

-

-

-

-

CSC Forest Hill Pty Ltd

CSC Forrest Chase Pty Ltd

CSC Franchising Pty Ltd

CSC Holdings Australia Pty Ltd

@

@

@

@

CSC Holdings New Zealand Limited

n @

CSC Joondalup Pty Ltd

CSC Manuka Pty Ltd

CSC Mordialloc Pty Ltd

CSC Mt Ommaney Pty Ltd

CSC North Sydney Pty Ltd

CSC Northbridge Pty Ltd

CSC Ponsonby Limited

CSC Port Melbourne Pty Ltd

CSC Products Pty Ltd

CSC Riverton Pty Ltd

CSC Shared Services Pty Ltd

CSC West Lakes Pty Ltd

CSC Whitford Pty Ltd

CTE Pty Ltd

Cuming Smith and Company Limited 

Dairy Properties Pty Ltd 

Dowd Corporation Pty Ltd 

Eastfarmers Pty Ltd

ECC Pty Ltd 

ENV.Australia Pty Ltd 

Environmental and Licensing 
Professionals Pty Ltd 

FIF Investments Pty Limited

Fosseys (Australia) Pty Ltd 

@

@

@

@

@

@

n @

@

@

@

@

@

@

+

~

~

~

+

Garrett Investments Limited

n @

Geeks2U Holdings Pty Limited

Geeks2U International Pty Limited

Geeks2U IP Pty Limited

Geeks2U NZ Limited

Geeks2U Pty Limited

GPML Pty Ltd

Greencap Holdings Limited

Greencap Pty Ltd

HouseWorks Co Pty Ltd 

Howard Smith Limited 

J Blackwood & Son Pty Ltd 

James Patrick & Co Pty Ltd  
(in liquidation)

n

+

+

KAS Direct Sourcing Private Limited

# l

KAS Global Trading Pty Limited

KAS International Sourcing 
Bangladesh Pvt Ltd 

KAS International Trading (Shanghai) 
Company Limited 

t

x

u

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

 - 

 - 

 - 

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

100

100

100

100

100

100

100

100

100

100

-

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

Wesfarmers 2022 Annual Report

167

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E
P
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T

A
B
O
U
T
T
H
S

I

S
E
G
M
E
N
T

I

N
F
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A
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I

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F
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A
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Financial statements

Notes to the financial statements: Group information
For the year ended 30 June 2022

22. SUBSIDIARIES (CONTINUED)

2022
%

2021
%

Entity

Entity

KAS Pty Limited 

KAS Services India Private Limited

Kidman Barrow Creek Pty Ltd

Kidman Gold Pty Ltd

Kleenheat Pty Ltd 

Kmart Australia Limited  

Kmart Group Asia Pty Ltd

Kmart Holdings Pty Ltd

Kmart NZ Holdings Limited

Kwinana Nitrogen Company 
Proprietary Limited 

Lawvale Pty Ltd 

Life's Tiles Pty Ltd

Liftco Pty Limited 

Loggia Pty Ltd 

Making Life Easy - Mobility and 
Independent Living Superstore Pty Ltd

Manacol Pty Limited  

MC2 Pacific Pty Ltd 

Meredith Distribution (NSW) Pty Ltd 

Meredith Distribution Pty Ltd 

MH Gold Pty Limited

Millars (WA) Pty Ltd

MLE Unit Trust

Modwood Technologies Pty Ltd 

Montague Resources Australia Pty Ltd

Moonyoora Minerals Pty Ltd

Mumgo Pty Ltd 

Neat N' Trim Uniforms Pty Ltd 

New Price Retail Finance Pty Ltd

New Price Retail Pty Ltd

New Price Retail Services Pty Ltd

NZ Finance Holdings Pty Limited

Officeworks Businessdirect Pty Ltd 

Officeworks Holdings Pty Ltd

Officeworks Ltd 

Officeworks NZ Limited

Officeworks Property Pty Ltd

One Data Pty Ltd

Pailou Pty Ltd 

Patrick Operations Pty Ltd

Petersen Bros Pty Ltd

Pharma-Pack Pty Ltd

Premier Power Sales Pty Ltd 

Priceline (NZ) Pty Limited

Priceline Proprietary Limited

PSM Healthcare Limited

Protector Alsafe Pty Ltd 

t

l

+

+

n

@

+

+

@

+

~

@

@

@

@

n

+

+

n

@

+

@

n @

@

n @

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

 - 

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

Protex Healthcare (Aus) Pty Ltd 

~

 - 

168

 Wesfarmers 2022 Annual Report

RJ Beaumont & Co Pty Ltd

+ @

100

100

100

100

100

100

100

100

100

100

100

PT Blackwoods Indonesia

R & N Palmer Pty Ltd

Rapid Evacuation Training Services 
Pty Ltd 

Relationship Services Pty Limited

Retail Australia Consortium Pty Ltd

Retail Investments Pty Ltd 

Scones Jam n Cream Pty Ltd 

Second Priceline Unit Trust

Sellers (SA) Pty Ltd

Share Nominees Limited

-

Sotico Pty Ltd

100

100

-

100

100

100

100

100

100

-

100

100

100

100

100

-

-

-

100

100

100

100

100

100

-

100

100

100

-

100

-

-

-

100

100

Soul Pattinson (Manufacturing) Pty Ltd

Synapse Finance Pty Ltd

Target Australia Pty Ltd  

Target Australia Sourcing (Shanghai) 
Co Ltd

Target Australia Sourcing Limited

Target Holdings Pty Ltd

TheActive Pty Ltd

The Builders Warehouse Group Pty 
Limited

The Franked Income Fund 

The Priceline Unit Trust

The Westralian Farmers Limited 

The Workwear Group HK Limited

The Workwear Group Holding Pty Ltd 

The Workwear Group Pty Ltd 

Tilers Plus Pty Limited

Tilewerx Pty Limited

Tincorp Holdings Pty Ltd

Trimevac Pty Ltd 

Tyremaster (Wholesale) Pty Ltd 

Ucone Pty Ltd 

Validus Group Pty Ltd 

Valley Investments Pty Ltd 

Viking Direct Pty Limited 

W4K.World 4 Kids Pty Ltd 

Wesfarmers Agribusiness Limited 

Wesfarmers A Plus Pty Ltd

Wesfarmers Bengalla Management 
Pty Ltd 

Wesfarmers Bengalla Pty Ltd

Wesfarmers Bunnings Limited 

Wesfarmers Chemical US Holdings 
Corp 

Wesfarmers Chemicals, Energy & 
Fertilisers Limited 

Wesfarmers Coal Resources Pty Ltd 

@

@

@

+

# u

# t

+

@

+

# t

+

+

@

@

+

~

+

+

+

+

+

z

+

+

2022
%

100

100

 - 

m

~

2021
%

100

100

100

100

100

100

-

100

-

100

100

100

-

-

100

100

100

100

100

100

100

-

100

100

100

100

-

-

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

 - 

100

100

100

100

100

100

100

100

100

100

100

100

100

100

Notes to the financial statements: Group information
For the year ended 30 June 2022

22. SUBSIDIARIES (CONTINUED)

Entity

Wesfarmers Department Stores 
Holdings Pty Ltd

Wesfarmers Emerging Ventures Pty 
Ltd

Wesfarmers Energy (Gas Sales) 
Limited 

Wesfarmers Energy (Industrial Gas) 
Pty Ltd

Wesfarmers Fertilizers Pty Ltd 

Wesfarmers Gas Limited 

Wesfarmers Holdings Pty Ltd

Wesfarmers Industrial & Safety 
Holdings NZ Limited 

Wesfarmers Industrial & Safety NZ 
Limited 

Wesfarmers Industrial and Safety Pty 
Ltd 

Wesfarmers Insurance Investments 
Pty Ltd 

Wesfarmers International Holdings 
Pty Ltd

Wesfarmers Investments Pty Ltd

Wesfarmers Kleenheat Gas Pty Ltd 

Wesfarmers Lithium Pty Ltd

Wesfarmers LNG Pty Ltd 

Wesfarmers Loyalty Management 
Pty Ltd 

Wesfarmers LPG Pty Ltd 

Wesfarmers New Energy Holdings 
Pty Ltd

Wesfarmers Oil & Gas Pty Ltd

Wesfarmers One Digital Pty Ltd

+ @

Wesfarmers Online Retail Holdings 
Pty Ltd

Wesfarmers Provident Fund Pty Ltd

Wesfarmers Resources Pty Ltd 

Wesfarmers Retail Holdings Pty Ltd 

Wesfarmers Retail Pty Ltd 

Wesfarmers Risk Management 
(Singapore) Pte Ltd

Wesfarmers Securities Management 
Pty Ltd

Wesfarmers Superannuation Pty Ltd

Wesfarmers Transport Limited 

Weskem Pty Ltd 

Westralian Farmers Superphosphates 
Limited 

WEV Capital Investments Pty Ltd 

WFCL Investments Pty Ltd

WFM Investments Pty Ltd

WIS International Pty Ltd

WIS Solutions Pty Ltd 

+

+

+

+

z

+

+

+

n

+

+

+

+

+

+

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

-

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

100

2022
%

2021
%

Entity

2022
%

2021
%

+

100

100

WIS Supply Chain Management 
(Shanghai) Co Ltd 

WPEQ Pty Ltd

WPP Holdings Pty Ltd 

WW E-Services Australia Pty Limited 

WWG Middle East Apparel Trading 
LLC 

Yakka Pty Limited 

u



100

100

100

100

49

100

100

100

100

100

100

100

100

100

100

100

100

100

+

+

+

# n

100

100

100

100

100

100

49

100

@
~
#
<

+

x

u

t

l 

m

n 

z

 

z 

Entity acquired/incorporated during the year
Entity dissolved/deregistered during the year
Audited by firms of Ernst & Young International
Audited by other firms of accountants
An ASIC-approved deed of cross guarantee has been 
entered into by Wesfarmers Limited and these entities
All subsidiaries are incorporated in Australia unless 
identified by one of the following symbols:

Bangladesh
China
Hong Kong
India
Indonesia
New Zealand
Singapore
United Arab Emirates
United States of America

All entities utilise the functional currency of the country 
of incorporation with the exception of Wesfarmers Risk 
Management Limited, which utilises the Australian dollar 
and KAS International Trading (Shanghai) Company Limited, 
PT Blackwoods Indonesia and Wesfarmers Oil & Gas 
Pty Ltd, which utilise the US dollar.

Wesfarmers 2022 Annual Report

169

I

F
N
A
N
C
A
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I

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T
A
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E
M
E
N
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S

R
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O
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T

A
B
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T
T
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S

I

S
E
G
M
E
N
T

I

N
F
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M
A
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O
N

I

P
E
R
F
O
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M
A
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S
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T

G
R
O
U
P

G
R
O
U
P
B
A
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A
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C
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C
A
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A
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I

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S
K

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P

I

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F
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M
A
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O
N

I

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R

 
 
 
 
 
 
 
 
Financial statements

Notes to the financial statements: Group information
For the year ended 30 June 2022

23. BUSINESS COMBINATIONS

Acquisition of Australian Pharmaceutical 
Industries Ltd
On 7 October 2021, Wesfarmers exercised its option to acquire a 
19.3 per cent interest in Australian Pharmaceutical Industries Ltd (API), 
pursuant to an undertaking agreement entered into with Washington 
H. Soul Pattinson and Company Limited on 9 July 2021. The interest 
was accounted for as a financial asset at fair value through other 
comprehensive income. Dividends received by Wesfarmers from 
API on this 19.3 per cent interest totalled $5 million and have been 
recognised as income.

On 31 March 2022, Wesfarmers, through its wholly-owned subsidiary 
WFM Investments Pty Ltd, acquired the remaining 80.7 per cent 
interest in API and gained control. The total cash consideration for the 
acquisition of 100 per cent of the equity of API was $754 million.

API is a leading Australian distributor of pharmaceutical goods and 
operates a portfolio of complementary wholesale and retail businesses 
in the growing health, wellbeing and beauty sector. API provides retail 
support services to pharmacist-owned pharmacy partners through its 
Priceline Pharmacy, Soul Pattinson and Pharmacist Advice brands, 
and is a retailer through company-owned health and beauty stores 
under the Priceline brand. In addition, API operates Clear Skincare, 
a provider of skin treatments, laser hair removal and non-invasive 
cosmetic procedures, and manufactures pharmaceutical and personal 
care products through its Consumer Brands business.

The acquisition of API provides an opportunity to enter the growing 
health, wellbeing and beauty sector. API forms the basis of a new 
Health segment and a base from which to invest and develop 
capabilities in the health, wellbeing and beauty sector.

From the date of acquisition, the contribution to the Group's revenue 
from API was $1,240 million and a $25 million loss was included in the 
Group's income statement. Had the acquisition of API occurred at the 
beginning of the financial year, the contribution to the Group's revenue 
from API would have been $4,655 million. 

The goodwill of $320 million arising on consolidation is attributable 
to various factors, including the ability to provide new products and 
services to customers in the Health segment, the value of growth 
opportunities and intangible assets that do not qualify for separate 
recognition. As at 30 June 2022, the provisional goodwill remains 
unallocated to any CGUs or groups of CGUs.

At 30 June 2022, the acquisition accounting balances are provisional 
due to the ongoing work finalising valuations and tax matters that may 
impact acquisition accounting entries.

Details of the provisional fair values of identifiable assets and liabilities 
as at the date of acquisition are:

Provisional  
fair value 
recognised on 
acquisition
$m

Assets
Cash
Trade and other receivables
Inventories
Property, plant and equipment
Right-of-use assets
Intangible assets
Deferred tax assets
Other

Liabilities
Trade and other payables
Interest-bearing loans and borrowings
Lease liabilities
Provisions
Other
Fair value of identifiable net assets

Provisional goodwill arising on acquisition
Purchase consideration transferred

Cash outflow on acquisition
Net cash acquired 
Cash paid1
Net cash outflow on acquisition

Acquisition related costs recognised as an 
expense

1  Cash paid is inclusive of the initial 19.3 per cent interest acquired.

31 
631 
385 
110 
182 
303 
37 
46 

690 
300 
207 
72 
22 
434 

320 
754 

31 
754 
723 

12 

170

 Wesfarmers 2022 Annual Report

Notes to the financial statements: Group information
For the year ended 30 June 2022

24. PARENT DISCLOSURES

25. DEED OF CROSS GUARANTEE

The subsidiaries identified with a ‘+’ in note 22 are parties to a Deed 
of Cross Guarantee under which each party has guaranteed to pay 
any deficiency in the event of the winding up of any of the members 
in the Closed Group. By entering into the Deed, the wholly-owned 
entities have been relieved from the requirement to prepare a financial 
report and directors’ report under ASIC Corporations (Wholly-owned 
companies) Instrument 2016/785.

These subsidiaries and Wesfarmers Limited together referred to 
as the ‘Closed Group’, either originally entered into the Deed on 
27 June 2008, or have subsequently joined the Deed by way of an 
Assumption Deed.

The consolidated income statement and retained earnings of the 
entities that are members of the Closed Group is as follows:

Consolidated income statement and 
retained earnings

Profit before income tax expense
Income tax expense
Net profit for the year 
Retained earnings at beginning of year
Adjustment for companies transferred into/out 
of the Closed Group
Total available for appropriation
Dividends provided for or paid
Retained earnings at end of year

Consolidated statement of comprehensive 
income 

Profit for the year 
Other comprehensive income 
Items that may be reclassified to profit or loss: 
Changes in the fair value of cash flow hedges, 
net of tax

Items that will not be reclassified to profit or loss: 
Changes in the fair value of financial assets 
designated at FVOCI, net of tax
Remeasurement loss on defined benefit plan 
Other comprehensive income for the year, 
net of tax 
Total comprehensive income for the year, 
net of tax

Deed

2022
$m

3,125 
(859)
2,266 
(360)

(11)
1,895 
(1,927)
(32)

2021
$m

 3,264 
(901)
 2,363 
(648)

 - 
 1,715 
(2,075)
(360)

Deed

2022
$m

2021
$m

2,266 

2,363

82 

84

24 
-  

106 

(4)
 - 

80

2,372 

 2,443 

Assets
Current assets
Non-current assets
Total assets

Liabilities
Current liabilities
Non-current liabilities
Total liabilities
Net assets

Equity
Equity attributable to equity holders of the 
parent
Issued capital
Employee reserved shares
Retained earnings
Dividends reserve 
Restructure tax reserve
Hedging reserve
Share-based payments reserve
Demerger reserve
Total equity

Parent

2022
$m

2021
$m

11,271 
5,735 
17,006 

 11,667 
 5,981 
 17,648 

1,231 
4,007 
5,238 
11,768 

 1,623 
 2,170 
 3,793 
 13,855 

13,467 
3 
1,582 
292 
150 
1 
37 
(3,764)
11,768 

 15,719 
 3 
 1,425 
 292 
 150 
(9)
39 
(3,764)
13,855

Profit attributable to members of the parent

2,084 

 2,040 

Total comprehensive income for the year, net 
of tax, attributable to members of the parent

2,094 

 2,053 

Contingencies1
Trading guarantees

167 

 150 

1  Contingent liabilities at balance date are not included in the balance sheet. 

Wesfarmers is party to various legal actions that have arisen in the 
normal course of business. It is expected that any liabilities arising 
from such legal action would not have a material adverse effect on the 
Group’s financial report.

Dividends reserve
The dividends reserve was created by the parent entity for the 
purposes of segregating profits from which dividends to shareholders 
can be paid. 

Guarantees
Wesfarmers Limited and certain Australian controlled entities are 
parties to a Deed of Cross Guarantee (the Deed).

Parent entity financial information
The financial information for the parent entity has been prepared on 
the same basis as the consolidated financial statements, except as 
set out below.

Investments in subsidiaries, associates and joint 
venture entities

Investments in subsidiaries, associates and joint venture entities 
are accounted for at cost in the financial statements of the parent. 
Dividends received from associates are recognised in the parent 
entity’s profit or loss when its right to receive the dividend is 
established.

Wesfarmers 2022 Annual Report

171

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N
A
N
C
A
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I

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T
A
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M
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S

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E
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A
B
O
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T
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S

I

S
E
G
M
E
N
T

I

N
F
O
R
M
A
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O
N

I

P
E
R
F
O
R
M
A
N
C
E

S
H
E
E
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G
R
O
U
P

G
R
O
U
P
B
A
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A
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C
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C
A
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A
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I

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S
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Financial statements

Notes to the financial statements: Group information
For the year ended 30 June 2022

25. DEED OF CROSS GUARANTEE (CONTINUED)

26. RELATED PARTY TRANSACTIONS

Transactions with related parties 

Associates

Lease rent paid

Financial advisory fees paid

Management fees received

Other receipts from associates

Other payments to associates

Joint ventures

Lease rent paid

Payments for loyalty program

Consolidated
2022
$'000

2021
$'000

133,096 

136,505 

5,522 

10 

(16,122)

(14,730)

(335)

-  

-  

149 

26,498 

45,548 

25,601 

29,873 

Receipts from loyalty program redemption

(48,250)

(40,039)

Other receipts from joint ventures

Other payments to joint ventures

(1,086)

2,197 

(1,152)

782 

Outstanding balances with related 
parties 

Associates

Amounts receivable from associates

Amounts owing to associates

9,684 

10,131 

(738)

(163)

Joint ventures

Amounts receivable from joint ventures

13,525 

6,680 

Amounts owing to joint ventures

(230,104)

(186,694)

The Group entered into transactions with related parties during the 
year as follows: 

•  Rent for retail stores and warehouses has been paid by the 

Group to an associated entity, BWP Trust, and to a joint venture, 
BPI NO 1 Pty Ltd. 

•  Management fees have been received from an associated entity, 
BWP Trust, on normal commercial terms and conditions for staff 
and other services provided to associates. 

•  Amounts have been paid to and received from 

Loyalty Pacific Pty Ltd for the operation of the Flybuys loyalty 
program.

•  Partly-owned subsidiaries of an associate of the Group, Gresham 

Partners Group Limited, have provided advisory services 
to Wesfarmers and were paid fees of $5,522,022 in 2022 
(2021: $10,300).

The consolidated balance sheet of the entities that are members of 
the Closed Group is as follows:

Consolidated balance sheet

Assets
Current assets
Cash and cash equivalents 
Trade and other receivables
Related party receivables
Inventories 
Derivatives
Other
Total current assets

Non-current assets
Investment in controlled entities
Investment in associates and joint ventures
Other financial assets
Deferred tax assets 
Property, plant and equipment
Goodwill and intangible assets
Right-of-use assets
Derivatives
Other
Total non-current assets 
Total assets

Liabilities
Current liabilities
Trade and other payables 
Related party payables
Interest-bearing loans and borrowings
Lease liabilities
Income tax payable
Provisions 
Derivatives
Other
Total current liabilities

Non-current liabilities
Related party payables
Interest-bearing loans and borrowings 
Lease liabilities
Provisions
Derivatives
Total non-current liabilities 
Total liabilities
Net assets

Equity
Issued capital
Reserved shares
Retained earnings 
Reserves 
Total equity

Deed

2022
$m

2021
$m

230 
1,297 
1,912 
5,215 
452 
175 
9,281 

3,812 
318 
664 
709 
3,231 
4,002 
5,404 
8 
80 
18,228 
27,509 

4,085 
68 
988 
979 
18 
1,019 
2 
247 
7,406 

1,081 
3,846 
5,439 
352 
30 
10,748 
18,154 
9,355 

13,574 
(102)
(32)
(4,085)
9,355 

2,767 
1,078 
933 
4,125 
152 
154 
9,209 

3,058 
268 
1,124 
741 
3,336 
3,826 
5,446 
282 
2 
18,083 
27,292 

3,664 
-  
950 
893 
333 
1,079 
43 
219 
7,181 

963 
2,023 
5,693 
336 
2 
9,017 
16,198 
11,094 

15,809 
(102)
(360)
(4,253)
11,094 

172

 Wesfarmers 2022 Annual Report

Notes to the financial statements: Other
For the year ended 30 June 2022

27.  COMMITMENTS AND CONTINGENCIES

29. AUDITORS’ REMUNERATION

Capital commitments1
Within one year
Greater than one year but not more than 
five years

Other expenditure commitments1
Within one year
Greater than one year but not more than 
five years
More than five years

Consolidated
2022
$m

2021
$m

485 

49 
534 

222 

299 
277 
798 

359 

-  
359 

112 

120 
69 
301 

Fees to Ernst & Young (Australia)
Fees for the audit and review of the financial 
reports of the Group and any controlled 
entities 
Fees for other assurance and agreed-upon-
procedures services 
Fees for other services 
- tax compliance
- other

Contingencies1
Trading guarantees

171 

150 

1  Capital commitments, other expenditure commitments and contingencies at 

balance date are not included in the balance sheet.

At 30 June 2022, the Group has commitments relating to lease 
agreements that have not yet commenced, which are not included 
in the above. The future lease payments (undiscounted) for 
non-cancellable periods are $8 million (2021: $28 million) within one 
year, $121 million (2021: $157 million) between one and five years and 
$208 million (2021: $258 million) thereafter. The commitments relate to 
lease agreements associated with new stores and distribution centres.

Fees to other overseas network firms of 
Ernst & Young (Australia)
Fees for the audit and review of the financial 
reports of the Group and any controlled 
entities 
Fees for other assurance and agreed-upon-
procedures services 
Fees for other services 
- tax compliance

Total auditors' remuneration

Consolidated
2022
$'000

2021
$'000

4,667 

4,591 

634 

503 

559 
94 
5,954 

632 
-  
5,726 

613 

527 

56 

197 

128 
797 
6,751 

120 
844 
6,570 

Other assurance and agreed-upon-procedures services and other 
services represent 21.8 per cent (2021: 22.1 per cent) of the total fees 
paid or payable to Ernst & Young and related practices for the year 
ended 30 June 2022.

Auditors’ remuneration includes amounts reimbursed to the auditors 
for incidental costs incurred in completing their services. 

Guarantees
The Group has issued a number of bank and other guarantees to third 
parties for various operational and legal purposes. It is not expected 
that these guarantees will be called on.

Contingent liabilities
Certain companies within the Group are party to various legal actions 
that have arisen in the normal course of business. It is expected that 
any liabilities arising from such legal action would not have a material 
effect on the Group.

28.  EVENTS AFTER THE REPORTING PERIOD

Dividends
A fully-franked final dividend of 100 cents per share resulting in 
a dividend payment of $1,134 million was determined with a payment 
date of 6 October 2022. The dividend has not been provided for in the 
30 June 2022 full-year financial statements. 

Wesfarmers 2022 Annual Report

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Financial statements

Notes to the financial statements: Other
For the year ended 30 June 2022

30. OTHER ACCOUNTING POLICIES

(A)   NEW AND AMENDED ACCOUNTING STANDARDS AND INTERPRETATIONS ADOPTED FROM 

1 JULY 2021

All new and amended Australian Accounting Standards and Interpretations mandatory to the Group as at 1 July 2021 have been adopted and 
include:

Reference

Description

The effects of the following standards were not material:

AASB 2020-8 Amendments to 
Australian Accounting Standards 
- Interest Rate Benchmark Reform 
(Phase 2)

This standard makes amendments to AASB 9 Financial Instruments, AASB 139 Financial 
Instruments: Recognition and Measurement, AASB 7 Financial Instruments: Disclosures, AASB 4 
Insurance Contracts and AASB 16 Leases to address issues that arise during the reform of an 
interest rate benchmark, including the replacement of one benchmark with an alternative one.

AASB 2021-3 Amendments to 
Australian Accounting Standards - 
COVID-19-Related Rent Concessions 
beyond 30 June 2021

This standard extends the availability of the practical expedient by one year. The practical expedient 
applies to rent concessions for which any reduction in lease payments affects only the payments 
originally due on or before 30 June 2022, provided the other conditions for applying the practical 
expedient are met. 

(B) NEW AND AMENDED STANDARDS AND INTERPRETATIONS ISSUED BUT NOT YET EFFECTIVE
The following new and amended accounting standards and interpretations issued but not yet effective are relevant to current operations. They 
are available for early adoption but have not been applied by the Group in this financial report.

Reference

Description

The effects of these standards and interpretations are not expected to be material:

AASB 2021-2 Amendments to 
Australian Accounting Standards - 
Disclosure of Accounting Policies

The application of this amendment is effective from 1 January 2023, and will be adopted by the 
Group on 1 July 2023. The amendments aim to help entities provide accounting policy disclosures 
that are more useful by replacing the requirements for entities to disclose their ‘significant’ 
accounting policies with a requirement to disclose their ‘material’ accounting policies and adds 
guidance on how entities apply the concept of materiality in making decisions about accounting 
policy disclosures.

AASB 2021-2 Amendments to 
Australian Accounting Standards - 
Definition of Accounting Estimates

The application of this amendment is effective from 1 January 2023, and will be adopted by the 
Group on 1 July 2023. The amended standard clarifies that the effects on an accounting estimate 
of a change in an input or a change in a measurement technique are changes in accounting 
estimates if they do not result from the correction of prior period errors.

AASB 2020-3 Amendments to 
Australian Accounting Standards - 
Annual Improvements 2018–2020 and 
Other Amendments

The application of this amendment is effective from 1 January 2022, and will be adopted by the 
Group on 1 July 2022. This standard makes amendments to AASB 1 First-time Adoption of 
Australian Accounting Standards, AASB 3, AASB 9, AASB 116 Property, Plant and Equipment, 
AASB 137 Provisions, Contingent Liabilities and Contingent Assets and AASB 141 Agriculture.

AASB 2014-10 Amendments to 
Australian Accounting Standards - 
Sale or Contribution of Assets 
between an Investor and its Associate 
or Joint Venture

The application of this amendment is effective from 1 January 2025 (as deferred by AASB 2021- 7 
Amendments to AASs – Effective Date of Amendments to AASB 10 and AASB 128 and Editorial 
Corrections), and will be adopted by the Group on 1 July 2025. The amendments require a full 
gain or loss to be recognised when a transaction involves a business (whether it is housed in a 
subsidiary or not) and partial gain or loss to be recognised when a transaction involves assets that 
do not constitute a business, even if these assets are housed in a subsidiary.

AASB 2020-1 Amendments to 
Australian Accounting Standards - 
Classification of Liabilities as Current 
or Non-current

The application of this amendment is effective from 1 January 2023 (as deferred by AASB 2020- 6 
Amendments to AASs – Classification of Liabilities as Current or Non-current – Deferral of 
Effective Date), and will be adopted by the Group on 1 July 2023. This amendment to AASB 101 
Presentation of Financial Statements clarifies the requirements for classifying liabilities as current or 
non-current.

AASB 2021-5 Amendments to 
Australian Accounting Standards  - 
Deferred Tax related to Assets 
and Liabilities arising from a Single 
Transaction

The application of this amendment is effective from 1 January 2023, and will be adopted by the 
Group on 1 July 2023. The amendments narrow the scope of the initial recognition exemption 
so that it does not apply to transactions that give rise to equal and offsetting temporary 
differences and clarify that the exemption does not apply to transactions such as leases and 
decommissioning obligations.

174

 Wesfarmers 2022 Annual Report

Notes to the financial statements: Other
For the year ended 30 June 2022

30. OTHER ACCOUNTING POLICIES (CONTINUED)

(C)  TAX CONSOLIDATION
Wesfarmers and its 100 per cent owned Australian resident subsidiaries have formed a tax consolidated group with effect from 1 July 2002. 
Wesfarmers is the head entity of the tax consolidated group. Members of the group have entered into a tax sharing agreement in order to 
allocate income tax expense to the wholly-owned subsidiaries on a stand-alone basis. The tax sharing arrangement provides for the allocation 
of income tax liabilities between the entities should the head entity default on its tax payment obligations. The possibility of such a default is 
considered remote at the date of this report.

Members of the tax consolidated group have entered into a tax funding agreement. The group has applied the group allocation approach in 
determining the appropriate amount of current taxes to allocate to members of the tax consolidated group. The tax funding agreement provides 
for each member of the tax consolidated group to pay a tax equivalent amount to or from the parent in accordance with their notional current 
tax liability or current tax asset. Such amounts are reflected in amounts receivable from or payable to the parent company in their accounts and 
are settled as soon as practicable after lodgement of the consolidated return and payment of the tax liability.

31. TAX TRANSPARENCY DISCLOSURES
A reconciliation of Wesfarmers’ accounting profit to its tax expense 
and material temporary and non-temporary differences are disclosed 
in note 3. 

A reconciliation of accounting profit to income tax paid or payable and 
the effective company tax rates for Australian and global operations of 
the Group are tabled below.

Tax paid or payable reconciliation
Accounting profit
Income tax at the statutory rate of 30%
Non-deductible items
Temporary differences: deferred tax
Associates and other
Utilisation of previously unrecognised tax 
losses
Current year tax paid or payable

Consolidated
2022
$m

2021
$m

3,320 
996 
5 
(94)
(25)

(25)
857 

3,373 
1,012 
10 
(9)
(17)

-  
996 

Effective tax rate
Effective tax rate for Australian operations
Effective tax rate for global operations

29.1%
29.2%

29.4%
29.7%

32. DIRECTOR AND EXECUTIVE DISCLOSURES

Compensation of key management personnel
The remuneration disclosures are provided in sections one to eight 
of the remuneration report on pages 100 to 127 of this annual report 
designated as audited and forming part of the directors’ report.

Short-term benefits
Long-term benefits
Post-employment benefits
Termination benefits
Share-based payments

Consolidated
2022
$'000

2021
$'000

11,751 
118 
240 
-  
13,115 
25,224 

10,752 
112 
221 
-  
11,482 
22,567 

Other transactions with key management 
personnel
From time to time, directors of Wesfarmers or its controlled entities, 
or their director-related entities, may purchase goods or services from 
the Group. These purchases are on the same terms and conditions as 
those entered into by other Group employees or customers and are 
trivial or domestic in nature.

Wesfarmers 2022 Annual Report

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Financial statements

Notes to the financial statements: Other
For the year ended 30 June 2022

33. SHARE-BASED PAYMENTS

The Group provides benefits to employees (including the executive 
director) of the Group through share-based incentives. Employees 
are paid for their services or incentivised for their performance in 
part through shares or rights over shares. The expense arising from 
these transactions is shown in note 2. The total number of ordinary 
Wesfarmers shares acquired on market during FY2022 to satisfy 
employee incentive schemes was 1,635,002 (2021: 1,961,576) at an 
average price of $57.45 (2021: $49.61) per share.

Cash-settled transactions
The ultimate expense recognised in relation to cash-settled 
transactions will be equal to the actual cash paid to the employees, 
which will be the fair value at settlement date. The expected cash 
payment is estimated at each reporting date and a liability recognised 
to the extent that the vesting period has expired and in proportion to 
the amount of the awards that are expected to ultimately vest. 

RECOGNITION AND MEASUREMENT
Share-based payments can either be equity-settled or cash-settled. 
If the employee is provided a choice of settlement options then the 
scheme is considered to be cash-settled.

Equity-settled transactions
The cost of equity-settled transactions with employees is measured 
using their fair value at the date at which they are granted. In 
determining the fair value, only performance conditions linked to the 
price of the shares of Wesfarmers Limited (market conditions) are 
taken into account.

The cost of equity-settled transactions is recognised, together with 
a corresponding increase in equity, over the period in which any 
performance conditions (excluding market conditions) are met, 
ending on the date on which the employees become fully entitled 
to the award (vesting date). The cumulative expense recognised for 
equity-settled transactions at each reporting date until vesting date 
reflects the extent to which the vesting period has expired and the 
proportion of the awards that are expected to ultimately vest. No 
expense is recognised for awards that do not ultimately vest due to 
a non-market performance condition not being met. The expense is 
recognised in full if the awards do not vest (or are not exercised) due 
to a market performance condition not being met.

Where the terms of an equity-settled award are modified, as a 
minimum, an expense is recognised as if the terms had not been 
modified. In addition, an expense is recognised for any increase in the 
value of the transaction as a result of the modification, as measured at 
the date of modification.

Where an equity-settled award is cancelled, it is treated as if it 
had vested on the date of cancellation, and any expense not yet 
recognised for the award is recognised immediately. However, if a 
new award is substituted for the cancelled award, and designated as 
a replacement award on the date that it is granted, the cancelled and 
new award are treated as if they were a modification of the original 
award, as described above.

ADDITIONAL INFORMATION ON AWARD 
SCHEMES

Key Executive Equity Performance Plan (KEEPP)
KEEPP was introduced in September 2016. Under the 2021 KEEPP, 
eligible executive key management personnel (KMP) were invited to 
receive performance shares and deferred shares in the company. 
From the 2021 KEEPP, newly issued unquoted fully-paid ordinary 
shares are allocated under the KEEPP. The company will apply for 
quotation of the shares upon vesting or forfeiture of the shares.

KEEPP is a single total incentive established for each executive KMP 
that operates over seven years. The quantum of the KEEPP award is 
determined against an individually personalised 12-month scorecard, 
split into financial, safety and Group ecosystem performance 
measures and individual performance objectives.

In FY2021, the earnings before interest and tax and return on capital 
(ROC) conditions of the 2018 and 2019 KEEPP performance shares 
were amended to post-AASB 16 earnings before tax and ROC 
metrics. There was no incremental change in the fair value of the 
awards. The share price on the date which the amendment was 
communicated to participants was $59.10 per share.

Performance shares - 2021 KEEPP 

For the Group Managing Director and the Group Chief Financial 
Officer, the performance conditions are Wesfarmers’ total shareholder 
return (TSR) relative to the TSR of the ASX 100 (80 per cent weighting) 
and portfolio management and investment outcomes (20 per cent 
weighting). For the divisional managing directors, the performance 
conditions are the divisional financial performance (50 per cent 
weighting) and Wesfarmers’ TSR relative to the TSR of the ASX 100 
(50 per cent weighting).

The fair value of the performance shares with a TSR condition is 
determined using an option pricing model with the following inputs:

Grant date
Grant date share price ($)
Volatility (%)
Risk-free rate (%)
Fair value ($)

Group CFO 
and Divisional 
MD
16 Nov 2021
59.91
23.53
1.23
40.35

Group MD
21 Oct 2021
55.55
23.22
0.91
33.93

Equity-settled awards outstanding
Weighted average share price in FY2022 was $52.74 (2021: $50.19). The following table includes shares subject to trading restrictions.

Outstanding at the beginning of the year
Granted during the year
Exercised during the year

Lapsed during the year
Other adjustments
Outstanding at the end of the year

Exercisable at the end of the year

176

 Wesfarmers 2022 Annual Report

KEEPP

(shares)

WESAP

(shares)

WLTIP

WESP

(shares)

(options)

 1,827,132 
 304,374 
(282,681)

(5,892)
-  
 1,842,933 

 5,937,482 
 1,761,671 
(2,621,148)

(95,426)
(22,761)
 4,959,818 

 176,053 
 - 
(24,218)

-  
-  
 151,835 

 169,910 
 - 
(34,086)

-  
-  
 135,824 

 104,312 

 5,358,181 

 212,025 

 803,368 

Notes to the financial statements: Other
For the year ended 30 June 2022

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Annual incentive

In August 2021, eligible executives received a restricted (mandatory 
deferred) share award under the WESAP as part of their annual 
incentive. If an executive resigns or is terminated for cause within 
one year of the share allocation, the Board may decide to cancel that 
share allocation. The fair value of the award at grant date is expensed 
over the forfeiture period.

Wesfarmers Long Term Incentive Plan (WLTIP)

2020 performance-tested shares

The Board approved a one-off performance-tested share grant for 
the Group Managing Director, the Group Chief Financial Officer and 
the Managing Director, Kmart Group in relation to the restructure of 
Kmart Group, which was allocated in FY2021 under the WLTIP.

The performance condition (with 100 per cent weighting) is based on 
the conversion of Target stores to Kmart stores and measured through 
total cumulative converted store profit for the relevant stores, against 
the targeted store contribution in the Board-approved proposal.

The fair value of the equity instruments granted was $48.78 and was 
determined with reference to the share price on the date of grant.

Wesfarmers Employee Share Plan (WESP)
The last issue under the WESP was made in December 2004. 
Under the plan, employees were invited to apply for ordinary shares 
in the company, funded by an interest-free loan from the Group. The 
employees’ obligation for repayment of the loans is limited to the 
dividends paid and capital returns by the company and, in the event 
the employee ceases employment, the market price achieved on the 
sale of the shares.

The plan is accounted for as an in-substance equity-settled award, 
with the contractual life of each option equivalent to the estimated loan 
life and no maximum term. 

33. SHARE-BASED PAYMENTS (CONTINUED)

Key Executive Equity Performance Plan (KEEPP) 
(continued)

Deferred shares - 2021 KEEPP 

Eligible executive KMPs also received a deferred shares award 
under the KEEPP. The 2021 KEEPP deferred shares are subject to 
a 12-month service condition (the forfeiture period). If an executive 
resigns or is terminated for cause during the forfeiture period, the 
Board may decide to cancel that share allocation. The fair value of the 
award at grant date is expensed over the one-year forfeiture period. 

The grant date share price is the fair value of both the deferred shares 
and the performance shares with divisional financial performance 
conditions or the portfolio management and investment outcomes 
condition.

Further details of the KEEPP and of the terms of the grants made 
during FY2022 are provided in the remuneration report.

Wesfarmers Employee Share Acquisition Plan 
(WESAP)

Employees other than executives

The WESAP was introduced in October 2009. Under the plan, all 
eligible employees are invited to acquire fully-paid ordinary shares in 
the company. The shares are either acquired under a salary sacrifice 
arrangement or are granted as an award, subject to the Group 
achieving a net profit after tax performance condition. Eligibility for 
an award of shares is dependent upon an in-service period with 
a participating division and being a permanent employee. 

The plan qualifies as a non-discriminatory employee share 
scheme complying with the requirements of Division 83A of the 
Income Tax Assessment Act 1997 (as amended) for Australian 
resident employees. The average fair value of the equity instruments 
granted was $52.71 (2021 average: $50.95) and was determined with 
reference to the share price on the date of grant.

Executives

In November 2016, WESAP was introduced to eligible executives. 
Under the 2021 offer, eligible executives are invited to receive 
performance shares and deferred shares in the company. 

Performance shares - 2021 WESAP

The performance condition (with 100 per cent weighting) is 
Wesfarmers’ TSR relative to the TSR of the ASX 100 over a four-year 
performance period. 

The fair value of the performance shares with a TSR condition is 
determined using an option pricing model with the following inputs:

Grant date
Grant date share price ($)
Volatility (%)
Risk-free rate (%)
Fair value ($)

16 Nov 2021
59.91
23.53
1.23
40.35

Deferred shares - 2021 WESAP

Deferred shares are subject to a three-year forfeiture period. If an 
executive resigns or is terminated for cause within three years, the 
deferred shares will be forfeited.

The grant date share price is the fair value of the deferred shares and 
the award is expensed over the forfeiture period. 

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Signed reports

Directors' declaration
Wesfarmers Limited and its controlled entities

In accordance with a resolution of the directors of Wesfarmers Limited, we state that:

1. 

1.1 

1.2 

1.3 

2. 

3. 

In the opinion of the directors:

 the financial statements, notes and the additional disclosures included in the directors’ report designated as audited,  
of the consolidated entity for the full-year ended 30 June 2022 are in accordance with the Corporations Act 2001, including:

(a) 

(b) 

 giving a true and fair view of the consolidated entity’s financial position as at 30 June 2022 and of its performance  
for the year ended on that date; and

 complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the 
Corporations Regulations 2001; and

 the financial statements and notes comply with International Financial Reporting Standards as disclosed in the notes  
to the financial statements on page 135 of the 2022 Annual Report; and

 there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable.

 This declaration has been made after receiving the declaration required to be made to the directors in accordance with section 295A 
of the Corporations Act 2001 for the financial year ended 30 June 2022.

 In the opinion of the directors, as at the date of this declaration, there are reasonable grounds to believe that the members of the 
Closed Group comprising the company and the controlled entities marked ‘+’ as identified in note 22 will be able to meet any 
obligations or liabilities to which they are or may become subject to by virtue of the Deed of Cross Guarantee referred to in note 25.

On behalf of the Board:

M A Chaney AO 
Chairman  

Perth 
25 August 2022

R G Scott 
Managing Director

178

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Independent auditor's report
To the Members of Wesfarmers Limited

Independent auditor's report to the members of Wesfarmers Limited

Report on the audit of the financial report

Opinion

We have audited the financial report of Wesfarmers Limited (‘the Company’) and its subsidiaries (collectively, ‘the Group’), which comprises 
the consolidated balance sheet as at 30 June 2022, the consolidated income statement, consolidated statement of comprehensive income, 
consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, notes to the financial 
statements, including a summary of significant accounting policies, and the directors' declaration.

In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including:

a)  giving a true and fair view of the consolidated financial position of the Group as at 30 June 2022 and of its consolidated financial 

performance for the year ended on that date; and

b)  complying with Australian Accounting Standards and the Corporations Regulations 2001.

Basis for opinion

We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in 
the Auditor’s Responsibilities for the Audit of the Financial Report section of our report. We are independent of the Group in accordance with 
the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical 
Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to 
our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code. 

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

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Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial report of the current 
year. These matters were addressed in the context of our audit of the financial report as a whole, and in forming our opinion thereon, but we do 
not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in 
that context.

We have fulfilled the responsibilities described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our report, including 
in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks 
of material misstatement of the financial report. The results of our audit procedures, including the procedures performed to address the matters 
below, provide the basis for our audit opinion on the accompanying financial report.

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A member firm of Ernst & Young Global Limited 
Liability limited by a scheme approved under Professional Standards Legislation

Wesfarmers 2022 Annual Report

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Independent auditor's report
To the Members of Wesfarmers Limited

1.  Acquisition of Australian Pharmaceutical Industries Ltd ('API')

  Why significant 

  How our audit addressed the key audit matter

On 31 March 2022, the Group completed the acquisition of 100% 
of the ownership interest in API. The acquisition was achieved in 
stages as the Group had previously acquired a 19.3% interest in API 
on 7 October 2021. The acquisition has been accounted for as a 
business combination at the date the Group gained control of API, 
being 31 March 2022. Details of the transaction are disclosed in 
Note 23 Business Combinations. 

The acquisition is significant to the Group and accounting for the 
acquisition was complex due to the judgement required by the 
Group to identify and determine the provisional fair values of the 
assets acquired and the liabilities assumed, including the allocation 
of purchase consideration to goodwill and separately identifiable 
intangible assets.

Our audit procedures included the following: 

•  We read the Scheme Implementation Deed to gain an 

understanding of the key terms

•  We assessed the appropriateness of the acquisition accounting 

applied in accordance with the requirements of Australian 
Accounting Standards

•  We agreed the total purchase consideration paid to supporting 

documentation

•  We assessed the reasonableness of the provisional fair values of 
the assets acquired and liabilities assumed, with the assistance 
of our valuation specialists, including considering whether the 
valuation methodologies applied were in accordance with the 
requirements of Australian Accounting Standards

•  We assessed the qualifications, competence and objectivity of 

the Group’s external experts involved in the fair value assessment 
process 

•  We considered the adequacy of the financial report disclosures.

2. 

Inventory valuation and existence

  Why significant 

  How our audit addressed the key audit matter

At 30 June 2022, the Group held inventory balances of $6,084 million, 
as disclosed in Note 6 Inventories (‘Note 6’). 

Inventories are valued at the lower of cost and net realisable value 
(‘NRV’). The NRV of inventories is the estimated selling price in 
the ordinary course of business less estimated costs to sell, the 
determination of which requires significant judgement by the Group.

Key matters of judgement include:

•  The estimated costs to bring the inventory to its location and 

condition for sale

•  Estimated costs to sell 

•  The expected selling price. 

In addition, the distribution of the Group’s inventory across a high 
number of locations and the quantum of the inventory balances may 
result in an increased risk in relation to existence.

Our audit procedures included the following:

•  We assessed the inventory management, procurement and 

commercial income processes, including an evaluation of the 
effectiveness of relevant controls

•  We tested the accuracy of the weighted average costing 

systems and performed overhead allocation testing on a sample 
of inventory

•  We attended stocktakes at a sample of locations and reviewed 

stocktake processes for compliance with internal policies 

•  We tested the subsequent reconciliation of the stock count 

results into the inventory records and general ledger 

•  We tested the estimated costs to bring the inventory to its 

location and condition for sale, the estimated costs to sell and 
the pricing assumptions in the NRV testing

•  We evaluated management’s assessment of stock obsolescence 
provisions through attendance at stocktakes, enquiries and 
analytical procedures 

•  We performed inventory cut-off testing on a sample of 

transactions either side of year-end

•  We reviewed key stock statistics, including sell-through rates, 

stock aging and stock turnover

•  We performed analysis of shrinkage results and provision 

calculations

•  We considered the adequacy of the financial report disclosures.

A member firm of Ernst & Young Global Limited 
Liability limited by a scheme approved under Professional Standards Legislation

180

 Wesfarmers 2022 Annual Report

Independent auditor's report
To the Members of Wesfarmers Limited

3.  Supplier rebates

  Why significant 

  How our audit addressed the key audit matter

Rebates associated with the Group’s retail operations are received 
from suppliers. 

The value and timing of supplier rebates recognised requires 
judgement and the consideration of a number of factors including:

•  The commercial terms of each individual rebate 

•  The appropriate timing of recognition

•  Consideration of the nature of the rebate and whether the rebate 
amount should be applied against the carrying value of inventory 
or recognised in the income statement 

•  The accurate recognition and measurement of rebates in 

accordance with Australian Accounting Standards and the 
Group’s related processes and controls.

The Group’s acquisition of API has resulted in new rebate 
arrangements that were required to be assessed for compliance with 
the Group’s accounting policies.

Disclosures relating to the measurement and recognition of supplier 
rebates can be found in Note 6.

Our audit procedures included the following: 

•  We gained an understanding of the nature of each material type 
of supplier rebate, including reading the significant agreements 
in place

•  We tested the effectiveness of relevant controls in place relating 

to the recognition and measurement of rebate amounts

•  We performed comparisons of the various rebate arrangements 
against the prior year and budget, including analysis of aging 
profiles and where material variances were identified, obtained 
supporting evidence

•  We selected a sample of supplier rebates and tested whether 

documentation existed supporting the recognition and 
measurement of the rebates in the 30 June 2022 financial 
statements

•  We inspected a sample of material new contracts entered into 
before and after the balance date and assessed whether the 
treatment adopted by the Group in respect to rebates arising 
under these contracts was appropriate

•  We inquired of legal counsel and business representatives 
including product category merchandisers, supply chain 
managers and procurement staff as to the existence of any 
non-standard agreements or side arrangements

•  We considered the adequacy of the financial report disclosures.

Information other than the financial report and auditor’s report thereon

The directors are responsible for the other information. The other information comprises the information included in the Company’s 2022 Annual 
Report but does not include the financial report and our auditor’s report thereon.

Our opinion on the financial report does not cover the other information and accordingly we do not express any form of assurance conclusion 
thereon, with the exception of the Remuneration Report and our related assurance opinion.

In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider whether the 
other information is materially inconsistent with the financial report or our knowledge obtained in the audit or otherwise appears to be materially 
misstated. 

If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report 
that fact. We have nothing to report in this regard.

Responsibilities of the directors for the financial report

The directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in accordance with 
Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable 
the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error.

In preparing the financial report, the directors are responsible for assessing the Group’s ability to continue as a going concern, disclosing, as 
applicable, matters relating to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the 
Group or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial report

Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether 
due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not 
a guarantee that an audit conducted in accordance with the Australian Auditing Standards will always detect a material misstatement when 
it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be 
expected to influence the economic decisions of users taken on the basis of this financial report.

As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgment and maintain professional 
scepticism throughout the audit. We also:

• 

Identify and assess the risks of material misstatement of the financial report, whether due to fraud or error, design and perform audit 
procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The 
risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, 
forgery, intentional omissions, misrepresentations, or the override of internal control

A member firm of Ernst & Young Global Limited 
Liability limited by a scheme approved under Professional Standards Legislation

Wesfarmers 2022 Annual Report

181

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Independent auditor's report
To the Members of Wesfarmers Limited

•  Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the 

circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control

•  Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made 

by the directors

•  Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit evidence 

obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to 
continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to 
the related disclosures in the financial report or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on 
the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to 
continue as a going concern

•  Evaluate the overall presentation, structure and content of the financial report, including the disclosures, and whether the financial report 

represents the underlying transactions and events in a manner that achieves fair presentation 

•  Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to 
express an opinion on the financial report. We are responsible for the direction, supervision and performance of the Group audit. We 
remain solely responsible for our audit opinion.

We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, 
including any significant deficiencies in internal control that we identify during our audit.

We also provide the directors with a statement that we have complied with relevant ethical requirements regarding independence, and to 
communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, 
actions taken to eliminate threats or safeguards applied.

From the matters communicated to the directors, we determine those matters that were of most significance in the audit of the financial report 
of the current year and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes 
public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in 
our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such 
communication.

Report on the audit of the Remuneration Report

Opinion on the Remuneration Report

We have audited the Remuneration Report included in pages 100 to 127 of the directors’ report for the year ended 30 June 2022.

In our opinion, the Remuneration Report of Wesfarmers Limited for the year ended 30 June 2022, complies with section 300A of the 
Corporations Act 2001.

Responsibilities

The directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A 
of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in 
accordance with Australian Auditing Standards.

Ernst & Young

T S Hammond 
Partner 
Perth 

25 August 2022 

J K Newton 
Partner 
Perth 

25 August 2022

A member firm of Ernst & Young Global Limited 
Liability limited by a scheme approved under Professional Standards Legislation

182

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Five-year financial history

All figures in $m unless shown otherwise1

2022

20212

20203

Post-AASB 16

Pre-AASB 16
20194

20185

Summarised income statement
Revenue from contracts with customers
Other revenue
Total revenue

Operating profit before depreciation and amortisation, 
finance costs and income tax
Depreciation and amortisation 
Interest on lease liabilities
EBIT (after interest on lease liabilities)
Other finance costs
Income tax expense 
Profit after tax from discontinued operations
Operating profit after income tax attributable to members of 
Wesfarmers Limited

Capital and dividends
Ordinary shares on issue (number) 000's as at 30 June
Paid up ordinary capital as at 30 June
Fully-franked dividend per ordinary share (determined) (cents)
Fully-franked special dividend per ordinary share (determined) 
(cents)6
Capital return per ordinary share (cents)7

Financial performance
Earnings per share (weighted average) (cents)
Earnings per share growth (%)
Return on average ordinary shareholders' equity (R12) 
(excluding significant items) (%)

Financial position as at 30 June
Total assets
Total liabilities
Net assets

Net tangible asset backing per ordinary share ($)
Net debt to equity (%)8
Total liabilities/total assets (%)

 36,679 
159 
 36,838 

 33,797 
 144 
 33,941 

 30,753 
 93 
 30,846 

 44,485 
 199 
 44,684 

 69,595 
 283 
 69,878 

 5,208 
(1,575)
(217)
 3,416 
(96)
(968)
 - 

 5,226 
(1,509)
(226)
 3,491 
(118)
(993)
 - 

 4,272 
(1,528)
(237)
2,507 
(133)
(677)
75 

 7,627 
(809)
- 
6,818 
(175)
(1,133)
3,570 

 4,079 
(1,283)
- 
2,796 
(221)
(1,378)
(1,407)

 2,352 

 2,380 

 1,697 

 5,510 

 1,197 

 1,134,145 
 13,574 
 180 

 1,133,840 
 15,826 
 178 

 1,133,840 
 15,818 
 152 

 1,133,840 
 15,809 
 178 

 1,133,840 
 22,277 
 223 

 - 
 - 

 - 
 200 

 18 
 - 

 100 
 - 

 - 
 - 

 207.8 
(1.2)

 210.4 
 40.3 

 150.0 
(69.2)

 487.2 
360.5

 105.8 
(58.5)

 29.4 

 26.1 

22.1

19.2

11.7

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27,271 
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7,981 

2.94 
56.3 
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 26,214 
 16,499 
 9,715 

5.14
 2.3 
62.9

 25,425 
 16,081 
 9,344 

4.89
(0.9)
63.2

 18,333 
 8,362 
 9,971 

5.21
25.1
45.6

 36,933 
 14,179 
 22,754 

4.33
17.3
38.4

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Stock market capitalisation as at 30 June

 47,532 

 67,010 

 50,830 

 41,000 

 55,966 

1  All figures are presented as last reported, including discontinued operations.
2  The summarised income statement for 2021 includes pre-tax (post-tax) restructuring costs of $59 million ($41 million) in the Kmart Group.
3  The summarised income statement for 2020 includes significant items relating to the following pre-tax (post-tax) items: $525 million ($437 million) impairment of the 
Target brand name and other assets, $110 million ($83 million) restructuring costs and provisions in the Kmart Group and a $310 million ($298 million) impairment 
to Industrial and Safety, offset by a gain of $290 million ($203 million) on the sale of 10.1 per cent of the interest in Coles, a gain of $220 million ($154 million) on the 
revaluation of the retained 4.9 per cent interest in Coles and a benefit of $83 million from the finalisation of tax positions on prior year disposals.

4  The summarised income statement for 2019 includes significant items relating to the following pre-tax (post-tax) items: $2,319 million ($2,264 million) gain on 

demerger of Coles, the $679 million ($645 million) gain on disposal of Bengalla, the $267 million ($244 million) gain on disposal of KTAS, the $138 million ($120 
million) gain on disposal of Quadrant Energy and $146 million ($102 million) provision for Coles supply chain automation.

5  The summarised income statement for 2018 includes significant items relating to the following pre-tax (post-tax) items: $306 million ($300 million) non-cash 

impairment of Target, BUKI's writedown and store closure provision of $931 million ($1,023 million), $375 million ($375 million) loss on disposal relating to BUKI, 
partially offset by $120 million ($123 million) gain of the Curragh Coal Mine.

6  The 2020 fully-franked special dividend reflects the distribution of after-tax profits on the sale of the Group's 10.1 per cent interest in Coles.
7  On 2 December 2021, a capital return to shareholders of 200 cents per share was paid. 
8  The net debt balance excludes lease liabilities.

Wesfarmers 2022 Annual Report

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Shareholder and ASX information

Shareholder information

SUBSTANTIAL SHAREHOLDERS
As at the date of this report, the following shareholders are substantial shareholders for the purposes of Part 6C.1 of the Corporations Act 2001:

•  BlackRock Group (BlackRock Inc. and subsidiaries) holding 6.04 per cent; 

•  The Vanguard Group, Inc. holding 6.00 per cent; and

•  State Street Corporation (and subsidiaries) holding 5.00 per cent.

VOTING RIGHTS
Wesfarmers fully-paid ordinary shares carry voting rights of one vote per share.

DISTRIBUTION OF MEMBERS AND THEIR HOLDINGS

Size of holdings

1 – 1,000

1,001 – 5,000

5,001 – 10,000

10,001 – 100,000

100,001 and over

Number of 

shareholders % of issued capital

408,803

92,400

10,418

5,164

146

11.50

17.06

6.38

9.19

55.87

There were 14,118 shareholders that held less than a marketable parcel of Wesfarmers ordinary shares.

There were 0.94 per cent of shareholders with registered addresses outside Australia.

TWENTY LARGEST SHAREHOLDERS
The 20 largest shareholders of ordinary shares on the company’s register as at 25 August 2022 were:

Name

HSBC Custody Nominees (Australia) Limited

J P Morgan Nominees Australia Pty Limited

Citicorp Nominees Pty Limited

BNP Paribas Noms Pty Ltd (DRP)

National Nominees Limited

BNP Paribas Nominees Pty Ltd (Agency Lending DRP A/C) 

HSBC Custody Nominees (Australia) Limited (Nt-Comnwlth Super Corp A/C)  

Australian Foundation Investment Company Limited

Citicorp Nominees Pty Limited (Colonial First State Inv A/C)

Argo Investments Limited 

Netwealth Investments Limited (Wrap Services A/C)

CPU Share Plans Pty Limited (WESAP DFE Control A/C)

CPU Share Plans Pty Limited (WES Exu Control A/C) 

Washington H Soul Pattinson and Company Limited

BNP Paribas Nominees Pty Ltd HUB24 Custodial Serv Ltd (DRP A/C)  

Citicorp Nominees Pty Limited (Citibank NY ADR DEP A/C)

Mutual Trust Pty Ltd

Australian Executor Trustees Limited (IPS IOOF Employer Super A/C)

Mr Peter Alexander Brown

Navigator Australia Ltd (MLC Investment Sett A/C) 

Number of shares % of issued capital

247,238,638

168,235,854

60,883,117

24,852,307

23,529,919

18,776,904

8,748,310

7,372,000

5,393,238

5,040,027

4,171,444

4,163,205

3,469,523

3,072,975

2,905,179

1,999,886

1,963,068

1,877,122

1,552,825

1,384,952

21.81

14.84

5.37

2.19

2.08

1.66

0.77

0.65

0.48

0.44

0.37

0.37

0.31

0.27

0.26

0.18

0.17

0.17

0.14

0.12

The percentage holding of the 20 largest shareholders of Wesfarmers ordinary shares was 52.62.

184

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Investor information

MANAGING YOUR SHAREHOLDING
The company’s share registry is managed by Computershare Investor 
Services Pty Limited (Computershare).

The Investor Centre website is the fastest, easiest and most 
convenient way to view and manage your shareholding. Investor 
Centre enables a shareholder to:

•  view the company share price;

•  change your banking details;

•  change your address (for non-CHESS sponsored holdings);

•  update your dividend instructions;

•  update your Tax File Number (TFN), Australian Business Number 

(ABN) or exemption;

•  select your email and communication preferences; 

•  view your transaction and dividend history; and

•  generate a holding balance letter.

Visit www.wesdirect.com.au and click on ‘Login’ for portfolio 
membership or click on ‘Single Holding’ to view your Wesfarmers 
shareholding information.

When communicating with Computershare or accessing your holding 
online you will need your Securityholder Reference Number (SRN) 
or Holder Identification Number (HIN) as shown on your Issuer 
Sponsored/CHESS statements.

You can also contact Computershare by:

Post  GPO Box 2975 Melbourne, Victoria 3001 Australia

Telephone Australia  1300 558 062 

Telephone International  (+61 3) 9415 4631

Website  www.investorcentre.com/contact

TAX FILE NUMBERS
While it is not compulsory to provide a TFN, if shareholders have not 
provided a TFN and Wesfarmers pays an unfranked or partly-franked 
dividend, the company will be required to deduct tax from the 
unfranked portion of the dividend at the top marginal rate plus the 
Medicare Levy. Shareholders can go online to update their TFN by 
visiting www.wesdirect.com.au

CHANGE OF NAME OR CONSOLIDATION OF 
HOLDINGS
Name changes or consolidation of multiple holdings into one single 
holding must be made in writing by using the required forms, which 
can be downloaded from www.wesdirect.com.au and clicking on 
the ‘Printable Forms’ button.

Uncertificated Share Register: The Wesfarmers share register is 
uncertificated. Two forms of uncertificated holdings are available to 
shareholders:

• 

Issuer-sponsored holdings – these holdings are sponsored 
by Wesfarmers and there is no need for shareholders to be 
sponsored by a stockbroker; and

•  Broker-sponsored holdings – shareholders may arrange to 
be sponsored by a stockbroker who will require a signed 
sponsorship agreement.

Holding statements are issued to shareholders within five business 
days after the end of any month in which transactions occur that alter 
the balance of their holding. Shareholders can also access details of 
their shareholdings and dividends paid on their holdings by visiting 
www.wesdirect.com.au

INFORMATION ON WESFARMERS

Wesfarmers website
Up-to-date information on the company can be obtained from the 
company’s website www.wesfarmers.com.au

Securities Exchange listing
Wesfarmers shares are listed on the Australian Securities Exchange 
under the code WES.

Share prices can be accessed from major Australian newspapers, on 
the Wesfarmers website or at www.asx.com.au

Dividend investment plan
The company’s dividend investment plan was reinstated with effect 
from 27 February 2007. Details of the plan can be obtained from 
Computershare or the Wesfarmers website.

Privacy
A copy of the Wesfarmers Privacy Policy is available on the 
Wesfarmers website.

Wesfarmers Corporate Affairs department
Further information and publications about the company’s operations 
are available from the Corporate Affairs department on (08) 9327 
4428 (within Australia) or (+61 8) 9327 4428 (international) or from the 
Wesfarmers website.

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185

 
 
 
 
 
 
 
 
 
 
 
 
 
 
FINANCIAL CALENDAR+

Record date for final dividend

Final dividend paid

Annual general meeting

Half-year end

Half-year profit announcement

Record date for interim dividend

Interim dividend payable

Year-end

+ Timing of events is subject to change.

1 September 2022

6 October 2022

27 October 2022

31 December 2022

February 2023

February 2023

March 2023

30 June 2023

ANNUAL GENERAL MEETING
The 41st Annual General Meeting of Wesfarmers Limited will be held 
on Thursday 27 October 2022 at 1:00pm (Perth time) at the Perth 
Exhibition and Convention Centre and shareholders will also be able 
to participate in the meeting through an online platform. Further 
details will be provided in the 2022 Notice of Meeting.  

WEBSITE
To view the 2022 Annual Report, shareholder and company 
information, news announcements, background information 
on Wesfarmers’ businesses and historical information, visit the 
Wesfarmers website at www.wesfarmers.com.au

Shareholder and ASX information

Corporate directory
Wesfarmers Limited ABN 28 008 984 049

REGISTERED OFFICE
Level 14, Brookfield Place Tower 2 

123 St Georges Terrace

Perth, Western Australia 6000

Telephone  (+61 8) 9327 4211 

Facsimile  (+61 8) 9327 4216 

Website  www.wesfarmers.com.au

Email  info@wesfarmers.com.au

EXECUTIVE DIRECTOR
Rob Scott 
Group Managing Director and Chief Executive Officer

NON-EXECUTIVE DIRECTORS
Michael Chaney AO 
Chairman

Alan Cransberg (from 1 October 2021)

The Right Honourable Sir Bill English KNZM

Wayne Osborn (to 21 October 2021)

Mike Roche

Anil Sabharwal

Vanessa Wallace

Sharon Warburton

Alison Watkins AM (from 1 September 2021)

Jennifer Westacott AO

CHIEF FINANCIAL OFFICER
Anthony Gianotti

COMPANY SECRETARY
Vicki Robinson

SHARE REGISTRY
Computershare Investor Services Pty Limited

Yarra Falls, 452 Johnston Street 

Abbotsford, Victoria 3067

Telephone Australia  1300 558 062

Telephone International  (+61 3) 9415 4631

Facsimile Australia  (03) 9473 2500 

Facsimile International  (+61 3) 9473 2500

Website  www.investorcentre.com/wes

186

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Bunnings

Kmart Group

From 1 July 2022

Chemicals, Energy 
and Fertilisers

(50%)

(50%)

(75%)

Officeworks

Industrial and  
Safety

Health

OneDigital

Other activities

From 1 July 2022

50%

24.8%

50%

50%

2.8%

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