29 August 2024
The Manager
Market Announcements Office
Australian Securities Exchange
Dear Manager
2024 ANNUAL REPORT (INCLUDING APPENDIX 4E)
In accordance with the requirements of the ASX Listing Rules, attached for release to the market is the
2024 Annual Report (including Appendix 4E).
The following will be released in conjunction with today’s announcement:
•
Notification of Dividend/Distribution;
•
2024 Full-year results;
•
2024 Full-year results briefing presentation; and
•
2024 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 2024 Annual Report (including Appendix 4E). This briefing will be
webcast and accessible via our website at www.wesfarmers.com.au.
Yours faithfully
Sheldon Renkema
Executive General Manager
Company Secretariat
This announcement was authorised to be given to the ASX by the Wesfarmers Limited Board.
2024 Annual
Report
For the year ended 30 June 2024
Appendix 4E
Results for announcement to the market1
2024
2023
Revenue from ordinary activities
Up 1.5% to $44,189 million
$43,550 million
Profit from ordinary activities after tax attributable to members
Up 3.7% to $2,557 million
$2,465 million
Net profit for the period attributable to members
Up 3.7% to $2,557 million
$2,465 million
Net tangible assets per share2
$3.12
$3.17
Operating cash flow per share3
$4.05
$3.69
1 Commentary on the results for the year is included in this report and on the Wesfarmers website.
2 Net tangible assets per ordinary share calculation includes right-of-use assets and lease liabilities.
3 Operating cash flow per share has been calculated by dividing the net cash flows from operating activities by the weighted average number of ordinary shares on issue
during the year.
Dividends
Amount per security
Franked amount per security
Interim dividend
91 cents
91 cents
Final dividend
107 cents
107 cents
Total FY2024 dividend
198 cents
198 cents
Previous corresponding period:
Interim dividend
88 cents
88 cents
Final dividend
103 cents
103 cents
Total FY2023 dividend
191 cents
191 cents
Record date for determining entitlements to the final dividend
5:00pm (AWST) on 4 September 2024
Last date for receipt of election notice for the Dividend Investment Plan
5:00pm (AWST) on 5 September 2024
Date the final dividend is payable
9 October 2024
About this report
This annual report is a summary of Wesfarmers
and its subsidiary companies’ operations, activities
and financial performance and position for the
year ending and as at 30 June 2024. 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’ or ‘this year’ are
to the financial year ended 30 June 2024 (previous
corresponding period to 30 June 2023) unless
otherwise stated. All years are financial years ending
30 June 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.
References to Scope 1 and Scope 2 data include
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. Scope 2 emissions are
stated using market-based accounting, in
accordance with the World Resources Institute
Greenhouse Gas Protocol Scope 2 Guidance.
Forward-looking statements concerning climate
are based on assumptions. These may include
assumptions that government policy remains
supportive of climate action and that technologies
will advance, become commercially viable and
capable of operating at scale. Targets may be
adjusted if there are significant changes, including
material acquisitions, divestments or changes
to greenhouse gas reporting methodologies.
References to community contributions include
direct community contributions from divisions
(cash, in-kind and time) and indirect community
contributions (from team members and customers).
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.
About Wesfarmers
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
today span: home improvement, outdoor
living products and supply of building
materials; general merchandise and
apparel; office and technology products;
retailing and provision of health, beauty
and wellness products and services;
management of a retail subscription
program and shared data asset and online
marketplace; wholesale distribution of
pharmaceutical goods; manufacturing and
distribution of chemicals and fertilisers;
participation in an integrated lithium joint
venture, including operation of a mine and
concentrator, and development of a refinery;
industrial and safety product distribution;
gas processing and distribution; and
management of the Group’s investments.
Wesfarmers is one of Australia’s largest
private sector employers with approximately
120,000 team members and is owned by
more than 495,000 shareholders.
Acknowledgement
of Country
Wesfarmers proudly acknowledges
the Traditional Owners of Country
throughout Australia and their
continuing connection to lands and
waterways upon which we depend
and where our businesses operate.
We pay our respects to their Elders
past and present, and actively
support progress towards Aboriginal
and Torres Strait Islander cultural,
social and economic equity.
Contents
Overview
The Wesfarmers Way
2
Our businesses
4
Our performance
6
Wealth creation and value distribution
8
Performance overview
9
Chairman’s message
10
Managing Director’s report
12
Leadership Team
14
Operating
and financial
review
Operating and financial review
16
Bunnings Group
24
Kmart Group
30
Chemicals, Energy and Fertilisers
36
Officeworks
42
Industrial and Safety
46
Wesfarmers Health
50
Wesfarmers OneDigital
54
Other activities
58
Group sustainability
59
Climate-related disclosures
70
Independent Limited Assurance Statement 85
Governance
Board of Directors
86
Corporate governance overview
88
Directors’
report
Directors’ report
93
Remuneration report
98
Financial
statements
Financial statements
129
Notes to the financial statements
135
Signed
reports
Directors’ declaration
183
Independent auditor’s report
184
Consolidated
entity disclosure
statement
Consolidated entity disclosure statement
179
Shareholder
and ASX
information
Five-year financial performance
and key metrics
188
Shareholder information
191
Investor information
192
Corporate directory
193
Overview
The
Wesfarmers Way
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 —
Engaging fairly with our
suppliers, and sourcing
ethically and sustainably
Taking care of
the environment
Acting with integrity
and honesty in all
of our dealings
Looking after our team
members and providing
a safe, fulfilling work
environment
Anticipating the needs of
our customers and
delivering competitive
goods and services
Supporting the
communities in
which we operate
2
Wesfarmers 2024 Annual Report
Value-creating strategies
The Group’s primary objective is driven by four overarching strategies.
Core values
Our core values underpin all of the Group’s strategies and ways of working.
Operating
excellence
Integrity
−Strengthening
existing businesses
through operating
excellence and
satisfying customer
needs
−Acting honestly
and ethically in all
dealings
−Reinforcing a culture
of doing what is right
Accountability
−Decision-making
authority in divisions
−Accountability for
performance
−Protecting and
enhancing reputation
Operating
sustainably
Entrepreneurial
spirit
−Ensuring
sustainability through
responsible long-
term management
−Adopting an owner
mindset
−Encouraging teams to
identify opportunities
and apply commercial
and financial acumen
to support calculated
risk-taking
−Encouraging teams
to take initiative and
pursue new and
innovative ways of
delivering value
Renewing the
portfolio
Openness
−Renewing the
portfolio through
value-adding
transactions
−Openness and
honesty in reporting,
feedback and ideas
−Accepting that
people make
mistakes and
seeking to learn
from them
Entrepreneurial
initiative
−Securing growth
opportunities through
entrepreneurial
initiative
Overview
3
Wesfarmers 2024 Annual Report
Kmart Group
Kmart is a leading product development company and trusted brand that
operates 322 stores throughout Australia and New Zealand, offering customers
a wide range of everyday products at the lowest prices. Kmart employs around
40,000 team members in Australia, New Zealand and key sourcing markets.
Target operates 124 stores and employs approximately 10,000 team members
across Australia.
Bunnings Group 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 Group’s network of 513 locations
includes warehouses, trade centres, Tool Kit Depot stores and Beaumont Tiles
stores. Bunnings Group employs more than 51,000 team members.
Bunnings Group
Officeworks is a leading retailer of technology, stationery, furniture, art
supplies and learning and development resources, with around 40,000
products available online and instore as well as services like Print & Create
and Geeks2U. Operating through a nationwide network of 171 stores,
Officeworks employs around 9,000 team members.
Officeworks
Chemicals, Energy
and Fertilisers
Chemicals, Energy and Fertilisers manages nine businesses in Australia
and employs more than 1,500 team members across its production
and distribution facilities and support offices.
Overview
Our
businesses
50%
75%
50%
Wesfarmers 2024 Annual Report
4
50%
50%
50%
22.3%
Wesfarmers is an investor in Flybuys, the BWP Trust, Gresham Partners
and Wespine Industries.
Other
activities
Wesfarmers OneDigital brings together the Group’s digitally native businesses,
including the OnePass membership program, the Group shared data asset
and the Catch marketplace. OneDigital supports the Group’s data and digital
growth ambitions by providing customers with a more seamless, rewarding
and valuable omnichannel experience across the Group’s retail and health
businesses. The division employs about 450 team members.
Wesfarmers
OneDigital
Industrial and Safety operates three main businesses spanning safety
products, industrial and corporate workwear, and industrial and medical gases.
Industrial and Safety employs approximately 3,700 team members.
Wesfarmers
Health
Wesfarmers Health has four business units, including retail, pharmaceutical
wholesale, medical aesthetics and digital health. The retail business includes
Priceline Pharmacy, a leading pharmacy, health and beauty retailer with
478 stores across Australia. Priceline partners with community pharmacists
through franchise arrangements, and owns non-pharmacy Priceline stores.
The division employs around 3,000 team members.
Industrial
and Safety
from November 2023
from July 2023
Wesfarmers 2024 Annual Report
Overview
5
Our
performance
Overview
A portfolio of high-quality businesses that is well positioned
to deliver growth and returns over the long term
Strong, value-based
retail offers with broad
customer appeal
Exposure to growing
demand in the health,
beauty and wellness
sector
Strategic manufacturing
capabilities supporting
critical industries
Underpinned by a strong balance sheet to support disciplined,
long-term investment and data and digital capabilities that drive
further productivity and efficiency gains
Businesses
supporting global
decarbonisation
Return on equity
(R12)
31.3%
Government taxes
and other charges
$1.5b
Salaries, wages and
other benefits
$6.3b
$44.2b
$1.98
$2.6b
up 1.5%
up 3.7%
up 3.7%
Revenue
Dividends per share
Fully franked
Net profit after tax
Wesfarmers 2024 Annual Report
6
Focus on long-term sustainable value,
consistent with our objective
decrease in Scope 1 and
Scope 2 (market-based)
emissions
5.4%
in direct and indirect contributions,
largely to community organisations
in Australia and New Zealand
$88.2m
total recordable injury
frequency rate, down
2.7% from 11.3 in 2023
11.0
Communities
People
Environment
of operational waste recovered
and diverted from landfill,
up from 71.6% in 2023
73.5%
Board and Leadership Team
positions held by women
43%
generation capacity from
212 rooftop solar systems, with
47 installed during the year
46MW
self-identify as Aboriginal or
Torres Strait Islander, maintaining
population parity
of Wesfarmers’
Australian
workforce
3.8%
supplier sites in the ethical
sourcing program
4,472
Wesfarmers 2024 Annual Report
Overview
7
Overview
Wesfarmers is a significant contributor to the communities in which
we operate. During the year, the Group generated wealth of $44.4 billion,
of which $28.8 billion related to supplies of raw materials and inventory,
$4.4 billion for rent, freight, services and other external expenses, $6.3 billion
related to salaries, wages and other benefits for our team members and
$1.5 billion for taxes and other charges. Wesfarmers reinvested $1.0 billion
in our businesses, while distributing $2.2 billion to shareholders in the
form of fully-franked dividends.
1 The total wealth created represents revenue, other income and share of net profits of associates and joint ventures. The value distributed represents the
expenses incurred and dividends determined for the 2024 financial year. Classifications of expenses may differ to those presented in the income statement.
for supplies of raw
materials and inventory
$28.8b
for rent, freight, services
and other external expenses
$4.4b
to lenders (finance costs)
$0.2b
to shareholders
(FY2024 dividends)
$2.2b
reinvested in the business
$1.0b
to government (taxes
and other charges)
$1.5b
to team members
(salaries, wages and
other benefits)
$6.3b
$44.4b
WEALTH CREATION1
$11.2b
V
A
L
U
E
D
I
S
T
R
I
B
U
T
I
O
N
Wealth creation and
value distribution
Wesfarmers 2024 Annual Report
8
Divisional performance
Group performance
1 Interest-bearing loans and borrowings less cash at bank and on deposit
and held in joint operation. Excludes cash on hand, cash in transit and
lease liabilities.
Performance
overview
Bunnings Group
2024
2023
Revenue
$m
18,968
18,539
Earnings before tax
$m
2,251
2,230
Capital employed R12
$m
3,254
3,410
Return on capital employed R12
%
69.2
65.4
Cash capital expenditure
$m
268
405
Kmart Group
Revenue
$m
11,107 10,635
Earnings before tax
$m
958
769
Capital employed R12
$m
1,458
1,635
Return on capital employed R12
%
65.7
47.0
Cash capital expenditure
$m
136
127
Chemicals, Energy and Fertilisers
Revenue
$m
2,747
3,306
Earnings before tax
$m
440
669
Capital employed R12
$m
3,292
3,091
Return on capital employed R12
%
13.4
21.6
Cash capital expenditure
$m
447
518
Officeworks
Revenue
$m
3,434
3,357
Earnings before tax
$m
208
200
Capital employed R12
$m
1,114
1,092
Return on capital employed R12
%
18.7
18.3
Cash capital expenditure
$m
64
71
Industrial and Safety
Revenue
$m
2,022
1,992
Earnings before tax
$m
109
100
Capital employed R12
$m
1,308
1,257
Return on capital employed R12
%
8.3
8.0
Cash capital expenditure
$m
79
73
Health
Revenue
$m
5,624
5,312
Earnings before tax
$m
50
45
Capital employed R12
$m
1,547
1,078
Return on capital employed R12
%
3.2
4.2
Cash capital expenditure
$m
38
41
Catch
Revenue
$m
227
354
Earnings before tax
$m
(96)
(163)
Cash capital expenditure
$m
5
10
Financial results
2024
2023
Revenue
$m
44,189
43,550
Earnings before interest and tax
$m
3,989
3,863
Earnings before interest and tax
(after interest on lease liabilities)
$m
3,753
3,644
Net profit after tax
$m
2,557
2,465
Basic earnings per share
cents
225.7
217.8
Cash flow and dividends
Operating cash flows
$m
4,594
4,179
Net capital expenditure
$m
1,044
1,183
Acquisition of subsidiaries,
net of cash acquired
$m
298
24
Free cash flows
$m
3,225
3,627
Dividends paid
$m
2,200
2,132
Operating cash flow per share
cents
405.5
369.2
Dividends per share
cents
198
191
Balance sheet and gearing
Total assets
$m
27,309
26,546
Net debt1
$m
4,272
4,009
Shareholders' equity
$m
8,585
8,281
Gearing (net debt to equity)
%
49.8
48.4
Sustainability
Scope 1 and Scope 2 (market-based)
emissions
ktCO2e
1,132.4
1,196.7
Operational waste recovered and
diverted from landfill
%
73.5
71.6
Aboriginal and Torres Strait Islander
team members
4,172
3,689
Safety performance
TRIFR
11.0
11.3
Gender balance, Board and
Leadership Team
% women
43
48
Wesfarmers 2024 Annual Report
Overview
9
I am pleased to report that Wesfarmers was able to record
increased profits in the 2024 financial year, a year marked by
substantial uncertainty — domestically due to higher interest
rates and internationally due to a number of political
upheavals around the world.
Net profit after tax of $2.6 billion represented an increase
of 3.7 per cent on the previous year. The directors declared
fully-franked dividends totalling $1.98 per share,
comprising a 91 cent interim and a $1.07 final dividend.
This compares with total dividends in the 2023 financial year
of $1.91 per share.
Profit increases were recorded by the Bunnings Group,
Kmart Group, Officeworks, Health and Industrial and Safety
divisions, while returns from Chemicals, Energy and
Fertilisers fell, largely as a result of reduced international
ammonia prices. The net investment in our developing
digital and data businesses reduced on the prior year.
The results once again illustrate the value of having
a diversified portfolio, where a downturn in one business
may be compensated by increased activity in another.
That diversification has resulted from the fact that, since our
listing on the Australian Securities Exchange in 1984, our
growth strategy has been driven by our primary objective –
to provide a satisfactory return to shareholders – rather than
by any desire to build a bigger empire in a particular industry.
That is not to say our business leaders lack growth
ambitions: on the contrary, each is focused on improving and
expanding their activities as profitable opportunities allow.
Over the last four decades, the makeup of the Wesfarmers
Group has changed dramatically as we have identified new
opportunities and we expect that to continue. We recognise
that we live in an ever-changing world and the strong
businesses in tomorrow’s society may not be those we are
involved in today. The challenge is to identify where such
opportunities exist and then find a way to invest in them
in a value-adding way.
With regard to improving and growing our existing
businesses, increased productivity plays a critical role
– and, as we and others have said on many occasions
before, productivity improvement is essential for Australia’s
future prosperity.
Talk of productivity improvement is sometimes viewed
externally in a negative light – working harder for less, rather
than the reality: creating more value for the same effort
– value that can be shared with employees through higher
wages, shareholders through higher dividends and
customers through lower prices or improved service.
Chairman’s
message
At Wesfarmers, we pursue productivity in a multitude of
ways. We invest in technology in our stores, helping our team
members be more efficient by reducing manual or eliminating
unsafe work. By being more efficient, we keep our costs
down, which helps our businesses to be more competitive,
and allows us to keep prices low.
Likewise, investments in Radio Frequency Identification
(RFID) capabilities within Kmart give team members visibility
of apparel stock, which supports instore and e-commerce
sales, and gives them more time to help customers; and
digitisation of Kmart’s sourcing, including 3D design, has
reduced lead times, improving availability and reducing costs.
At Bunnings, Officeworks and Wesfarmers Health, we are
investing in automation of distribution centres and inventory
management processes, which improve the efficiency of our
supply chain and enable improved sales and lower prices.
At WesCEF, we have also found ways to support
productivity, with improved production rates achieved
through focused operational management, and disciplined
investment and maintenance.
Productivity improvement initiatives by companies like
Wesfarmers are essential if Australia is to achieve the
aggregate improvements that will be required to maintain
strong employment and real wage growth.
As Gary Banks, former head of the Productivity Commission
observed in a recent speech: ‘In reality, the ‘headline’
productivity numbers for our economy represent little more
than the accumulation of outcomes achieved by a myriad of
individual firms and organisations throughout the economy.’
Of course governments have a critical role to play in this
area too, through ensuring we have efficient and effective
policy settings – for example in industrial relations, taxation,
regulation and energy. Regrettably, many recently legislated
and proposed changes in these areas work against
productivity improvements, rather than for them.
Examples include the Commonwealth ‘Same Job,
Same Pay’ legislation, new rules around the employment
of casuals, some proposed new environmental legislation
and various State decisions to increase payroll taxes.
In many cases, these changes appear to be designed
to address problems that, in fact, only exist at the margin
and they do not deliver improved outcomes, including for
employees, the environment and business. Indeed, they
have introduced rigidities and imposts at a time when
our national economy needs agility and flexibility. The risk
of capital flight from Australia as a result of such laws is
a very real one.
Wesfarmers 2024 Annual Report
10
Overview
A productive and growing economy requires a constant
flow of new investment – replacing inefficient plant and
equipment, opening up new industries, expanding industries
where Australia has competitive strengths and providing the
infrastructure on which we all rely. Despite the regular
promises of governments to reduce regulation, companies
seeking to make investments today face a greater regulatory
burden than ever. Lengthy approval processes,
multi‑jurisdictional duplication, complexity that slows
decision‑making and the determination of certain activists
to oppose any development all conspire to make projects
in Australia more costly and slower to progress than
in many other countries.
One government initiative that is worthy of support, in our
view, is the proposed production tax credit for critical minerals
projects. With a production tax credit, the government makes
no outlay unless the project is up and running and paying
wages and suppliers to support operations. It is consistent
with previous initiatives by governments of all persuasions
to encourage and support development – investment
allowances, accelerated depreciation, and so on; and the
multiplier effect of such initiatives can actually result in a net
benefit to government finances.
Company boards are faced with significant amounts of
regulation and much of board time is taken up by meeting
its requirements. It is somewhat bemusing, however, to hear
commentators complaining about boards being ‘woke’
because they spend too much time on environment, social
and governance (ESG) matters and not enough time on
making profit — when doing so is required by law.
For example, boards in Australia are required to comply with
(which means monitoring, measuring and usually reporting
on) Commonwealth legislation concerned with climate
change and carbon emissions, sustainability, whistleblowing,
sexual harassment and discrimination, bullying, anti-bribery
measures, data breaches, privacy, workplace gender
equality, supplier payment times and modern slavery;
and state governments, the ASX Corporate Governance
Principles and Australian Accounting Standards Board,
among others, impose additional obligations.
That is not to suggest these subjects are unimportant.
On the contrary, looking after the interests of all stakeholders
– team members, customers, suppliers, the environment
and the community – is essential if a company is going
to be successful financially. Wesfarmers has followed this
philosophy since its listing and we are in no doubt that this
has been a major factor in the company outperforming
almost every other listed company in terms of shareholder
returns since its listing in 1984.
It would be gratifying to hear fewer suggestions that ESG is,
somehow, a negative phenomenon and more commentary
evidencing an appreciation of the huge contribution business
makes to the nation’s welfare through employment, taxation,
wealth creation and community support.
Large businesses like Wesfarmers play a critical role in the
economy and work hand-in-hand with small businesses. As
an example, Bunnings has over one million small business
customers and more than 6,000 suppliers.
Looking forward, your Board is confident that Wesfarmers
is in good shape and in a position to weather the challenges
and realise the opportunities that our uncertain and changing
world presents. We have a strong balance sheet, sound,
well-regarded businesses and a capable and dedicated team.
At this year’s Annual General Meeting, two of our directors
will retire: Vanessa Wallace, who has been on the Board
since July 2010 and has made a huge contribution to our
deliberations on strategy, in particular in relation to the new
economy, and Anil Sabharwal, who joined the Board in 2021
and has provided invaluable perspectives on the digital world
during his term. We thank both directors for their efforts
on behalf of the company and wish them well in their future
endeavours. We welcomed Kate Munnings to the Board
in August this year and Tom von Oertzen will join us from
1 October. Both directors have had extensive experience
across a range of industries.
On behalf of the Board, I acknowledge with gratitude the
efforts of approximately 120,000 team members employed
across the Group. We thank our management team led
so ably by Chief Executive Officer, Rob Scott, for their
dedication to the company and its prosperity.
We look forward to continuing the success of the company
in the years ahead.
Michael Chaney AO
Chairman
Overview
Wesfarmers 2024 Annual Report
11
Wesfarmers’ growth in profit for the 2024 financial year
highlights the quality of the Group’s portfolio of businesses
and strong execution in a challenging market environment.
As expected, this year, the Australian and New Zealand
economies faced a number of headwinds: elevated inflation
and interest rates, cost of living pressures and volatility in key
commodity prices. Our businesses were able to navigate these
challenges effectively, always looking for ways to deliver greater
value, choice and reliability for customers, while remaining
focused on shareholder value.
Our performance in this complex operating environment
is a testament to the approximately 120,000 team members
in the Group. Across our team, there are thousands of stories
of individuals building successful skills and careers. We have
many team members who started with businesses like Kmart
or Bunnings while at school, doing casual work to make some
money and gain experience. Some of these team members
have progressed into senior management roles, managing
thousands of people and leading major projects. There are
also trainee engineers and apprentices who started with our
industrial businesses who are now responsible for world-class
manufacturing operations. While we provide the platform, support
and encouragement, it is the hard work, aspiration and ingenuity
of our team members that allows them to build successful
careers and creates the long-term value for our shareholders.
This is the story behind big businesses that is often neglected but
is core to our business success and Australia’s future prosperity.
A highlight for the year was continued strong operational
execution, including benefits realised from proactive productivity
and efficiency initiatives taken over recent years. Many
improvements flow from investment in technologies and systems
that support our teams to be more efficient, improve service and
lower costs, which in turn help to keep prices low. Through
providing better value for our retail and commercial customers,
at a time when many are facing cost of living pressures, we are
able to deliver sustainable growth in sales and earnings.
This year, our retail businesses benefited from their strong value
credentials as households worked hard to balance their budgets.
The retail businesses expanded their addressable markets,
providing customers with new products and service offerings,
capturing greater spend from younger generations – such as
Gen Z and Millennials – while continuing to meet the needs
of the broader market.
Our industrial businesses play a critical role supporting some of
Australia’s key export industries, with a track record of operating
safely, reliably and efficiently. We have made good progress
developing the Covalent lithium project, which once complete, will
produce battery-grade lithium hydroxide for use in electric vehicles
and support progress towards global decarbonisation goals.
Wesfarmers maintained its commitment to providing a safe
and fulfilling work environment for team members. At a Group
level, TRIFR reduced to 11.0, with improvements recorded
across most businesses. While Bunnings Group’s TRIFR
increased, a comprehensive program of initiatives is underway to
drive improvement. WesCEF had not reported a single lost time
injury for 17 months as at the end of the year.
We recognise the benefits of maintaining a diverse, inclusive
workforce, and the Leadership Team and Board are in gender
balance. The Group also remains at proportional representation
with approximately 3.8 per cent of Wesfarmers’ Australian team
members identifying as Aboriginal or Torres Strait Islander.
During the year, the Group’s Scope 1 and Scope 2 (market-based)
emissions reduced by 5.4 per cent, as our divisions made good
progress towards interim and long-term emissions targets. It was
pleasing to see WesCEF take further actions, aligned with its net
zero roadmap.
Our performance
This year, the Group’s businesses generated net profit after tax
of $2.6 billion, an increase of 3.7 per cent.
Bunnings again demonstrated the resilience of its offer,
continuing to deliver growth in more difficult market conditions.
Bunnings’ strong value credentials continued to underpin growth
in customer visitation, transactions and units sold.
Kmart Group’s performance was a standout, delivering significant
sales and earnings growth supported by the market-leading
value of its Anko products, unique sourcing capabilities and
actions taken to operate efficiently and reduce costs. The sale
of Anko products in Target has performed well and Target is
now leveraging Kmart Group systems and technologies.
WesCEF’s operating performance was strong with good plant
production rates, but earnings were impacted by lower global
commodity prices. While the focus remains on efforts to
complete construction and commissioning of the Kwinana
lithium hydroxide refinery, this year WesCEF achieved an interim
milestone with its first shipment of spodumene concentrate
in March 2024.
It was pleasing to deliver earnings growth in Officeworks and
Industrial and Safety. Wesfarmers Health also increased earnings,
while continuing to invest in transformation activities and integrate
recent acquisitions, with a focus on opportunities to accelerate
growth and improve returns.
Catch operates in a highly competitive market, with large
international retailers leveraging offshore operations and
technologies to attract Australian customers. This year,
Catch reduced its losses following significant actions to reduce
its cost base and clear inventory. Catch is shifting its focus from
remediation activities to scaling the third-party marketplace
and better utilising supply chain assets and capabilities
to strengthen the Group’s e-commerce operations.
For the Group’s retail and health divisions, OneDigital is playing
an important role, accelerating omnichannel growth and
personalisation capabilities. Our customers actively engage
with us instore and online, and our businesses have more than
220 million digital interactions with customers each month.
Managing Director’s
report
Wesfarmers 2024 Annual Report
12
Overview
Significant enhancements were made to the OnePass program,
with the addition of new retail partnerships and unique online
and instore benefits, which now provide even better value for
members. These measures have supported continued growth
in OnePass’ members and incremental sales for our businesses.
Portfolio actions
Wesfarmers’ approach to portfolio management allows the
Group to allocate capital to opportunities that deliver satisfactory
returns to shareholders. This approach is guided by our
long-term perspective and strong financial discipline.
Wesfarmers remains focused on the development of an
integrated lithium mine, concentrator and refinery. The successful
development of the refinery is expected to generate satisfactory
returns over the long term given the attractive cost structure of
the project and the improved margin available from value-added
production. Covalent is expected to complete construction and
commissioning of the refinery with first product in mid-calendar
year 2025. Sales of lithium hydroxide are expected to commence
in the 2026 financial year as production volumes ramp up and
after satisfactory product qualification with customers.
WesCEF’s lithium business includes a small exploration portfolio
which, during the year, executed a farm-in agreement with
Ora Banda Mining Limited, targeting lithium and other critical
mineral deposits.
During the year, Wesfarmers Health invested in two logical
expansion opportunities: the acquisition of InstantScripts,
Australia’s leading telehealth provider, and SILK Laser Australia
(SILK). These acquisitions are performing well, in line with
expectations, and strengthening the customer offer of our
Health division.
On 30 May 2024, WesCEF announced it had agreed to sell
its liquefied petroleum gas and liquefied natural gas distribution
businesses. These divestments remain subject to certain
consents and approvals.
Leadership Team
I’d like to recognise and thank Ian Hansen, who will retire
as Managing Director of WesCEF in November 2024, after
more than 40 years with the Group. Ian has been instrumental
in the growth and success of WesCEF with a track record
of delivering operational excellence and major projects, while
also significantly advancing the division’s safety, diversity and
sustainability performance. In recent years, Ian led work to
develop WesCEF’s net zero roadmap and has championed
career opportunities in industrial businesses for talented women
and Indigenous team members. We are pleased that Ian will
remain with Wesfarmers in an advisory capacity and as Chairman
of Covalent. Ian retires with the gratitude and best wishes of the
Wesfarmers Board, Leadership Team and the broader Group.
Ian will be succeeded by Aaron Hood, currently WesCEF’s
Deputy Managing Director and Chief Operating Officer. Aaron
brings strong commercial acumen together with technical
expertise in relation to the WesCEF and Covalent operations.
Outlook
The overall economic environment continues to present both
opportunities and challenges. Across Australia and New Zealand,
interest rates and inflation remain elevated, maintaining pressure
on household budgets. Cost of doing business pressures are
expected to persist, due to labour market constraints, wage
increases and growing energy, supply chain and other costs.
Despite these ongoing challenges, we believe Wesfarmers
remains well positioned. The Group has demonstrated an ability
to withstand a range of market conditions, through the quality
of our businesses, strength of our balance sheet and capacity
of our teams to adapt.
Our businesses are benefiting from proactive investments and
other measures taken in recent years to support productivity and
efficiency, together with investments made to digitise operations
and develop sourcing capabilities.
Our retail divisions have strong value-based, omnichannel offers,
coupled with product ranges that have broad customer appeal.
They are well positioned to meet ongoing and changing demand,
as customers respond to cost of living pressures. Our retail
businesses are expected to continue to benefit from population
growth and expansion of their addressable markets.
Our industrial businesses have strategic domestic manufacturing
capabilities that support world-class Australian export industries,
including agriculture, iron ore, gold and critical minerals.
The Health division provides exposure to the growing health,
beauty and wellness sector, with opportunities to deliver more
accessible and affordable healthcare for customers.
Overall, as we look to the future, Wesfarmers is focused
on long-term value creation and will continue to invest to
strengthen its existing businesses and develop platforms for
growth. Together with a strong balance sheet and portfolio of
cash generative businesses with market-leading positions, the
Group is well-positioned to deliver returns over the long term.
Finally, I would like to thank our dedicated team members across
the Group for their outstanding contributions this year, as well
as the Board for its invaluable support and guidance. I would
particularly like to acknowledge our divisional and corporate
leaders. The Group’s ability to deliver in the current operating
environment is a credit to you and your teams. With your resolve
to remain focused on continuous improvement and long-term
value creation, I remain confident that Wesfarmers’ best years
lie ahead.
Rob Scott
Managing Director
Overview
Wesfarmers 2024 Annual Report
13
1 Rob Scott
MANAGING DIRECTOR AND
CHIEF EXECUTIVE OFFICER
WESFARMERS
Rob was appointed Managing Director and Chief
Executive Officer 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 served as Managing Director of the
Wesfarmers Industrials division from August 2015
to August 2017. He is also a director of the Business
Council of Australia and Brisbane 2032.
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 a Fellow of Chartered Accountants Australia
and New Zealand. He is also a director of West
Australian Opera.
3 Maya vanden Driesen
GROUP GENERAL COUNSEL
WESFARMERS
Maya was appointed Group General Counsel in January
2015. Prior to this, Maya held various senior roles,
including Senior Legal Counsel and General Manager
Legal – Litigation. Before joining Wesfarmers, Maya
practised law at Parker & Parker (now Herbert Smith
Freehills) and Downings Legal (now HWL Ebsworth).
Maya is a Graduate of the Australian Institute
of Company Directors and completed her full
term on the Executive Committee of the GC100,
representing the general counsel of Australia’s top
100 ASX-listed companies, at the end of 2023.
She is a director for the Committee for Perth
(since 2016), Bell Shakespeare Company (since
2021) and MercyCare (since 2023).
Maya sits on the Joint Law Society and Women
Lawyers Committee, the In-House/Government
Lawyers Committee for the Law Society of Western
Australia and the UWA Law School’s Advisory Board
and is a member of Chief Executive Women.
4 Michael Schneider
MANAGING DIRECTOR
BUNNINGS GROUP
Michael was appointed Bunnings’ Managing
Director in 2016.
Michael joined Bunnings in 2005, having previously
held a range of senior operational, commercial and
human resource roles across regional and national
markets, in retail and financial services.
Outside 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 is a board member of the
Global Home Improvement Network, representing
some of the world’s leading Home Improvement
businesses. In addition, Michael chairs FightMND.
5 Ian Bailey
MANAGING DIRECTOR
KMART GROUP
Ian was appointed Managing Director of Kmart
in February 2016 and assumed the responsibility
for leading Kmart Group 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 Emily Amos
MANAGING DIRECTOR
WESFARMERS HEALTH
Emily was appointed Managing Director of Wesfarmers
Health in April 2022, following Wesfarmers’ acquisition
of Australian Pharmaceutical Industries Limited in 2022.
Emily has extensive health and retail sector experience
gained through time in various executive roles
at Bupa Australia and New Zealand, Woolworths
Australia and Sainsbury’s United Kingdom.
Prior to joining Wesfarmers, Emily was the Managing
Director of Bupa Health Insurance and before that,
Managing Director of Bupa Health Services. Emily is
also a former non-executive director of Adore Beauty.
During her time at Woolworths, Emily held the role of
Finance Director at Endeavour Drinks Group and held
senior executive roles across finance, data and digital.
Emily is also a member of Chief Executive Women.
Leadership
Team
1
4
2
3
5
6
Wesfarmers 2024 Annual Report
14
Overview
7 Sarah Hunter
MANAGING DIRECTOR
OFFICEWORKS
Sarah was appointed Managing Director
of Officeworks in January 2019.
Prior to this, Sarah worked across many areas
of the Coles Group in positions including Financial
Controller, State General Manager Victoria and
Demerger Program Director, overseeing Coles’
implementation of the demerger from Wesfarmers.
Before joining Coles, Sarah worked in the UK for more
than 10 years, holding several senior commercial
positions in banking and airports including Strategy and
Finance Director for Gatwick Airport from 2004 to 2006.
Sarah is a Council member of the Australian Retailers
Association, a member of Chief Executive Women,
a Fellow of the Association of Chartered Certified
Accountants and a member of the Australian Institute
of Company Directors.
8 Tim Bult
MANAGING DIRECTOR
WESFARMERS INDUSTRIAL AND SAFETY
Tim was appointed Managing Director of Wesfarmers
Industrial and Safety in April 2020.
Since joining Wesfarmers in 1999, Tim has worked
in commercial and business development roles within
Wesfarmers and its divisions. He was appointed
General Manager of Wesfarmers Kleenheat Gas in
2005 and Managing Director of Wesfarmers Energy
in 2006. From 2009 to 2015, Tim was Executive
General Manager, Business Development. In 2015,
he was appointed Director, Associate Businesses
and International Development and in 2018, Project
Director for the demerger of Coles. In 2019, he was
appointed Director, Associate Businesses and
Corporate Projects at Wesfarmers.
9 Nicole Sheffield
MANAGING DIRECTOR
WESFARMERS ONEDIGITAL
Nicole was appointed Managing Director
of OneDigital in November 2021, and leads the
Group’s cross-divisional data and digital strategy
and implementation. This includes the OnePass
membership program, the Group shared data
asset, and from July 2022, the Catch marketplace.
Prior to joining Wesfarmers, Nicole held a number
of leadership roles. Nicole was the Executive General
Manager, Community & Consumer, at Australia Post
where she led the Australia Post retail network
of 4,400 post offices, 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 member
of Chief Executive Women.
10 Ian Hansen
MANAGING DIRECTOR
WESFARMERS CHEMICALS,
ENERGY & FERTILISERS
Ian has led the Chemicals, Energy and 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 more than 40 years with Wesfarmers,
he has held a wide range of executive, operational
and commercial management roles, primarily within
the chemicals, energy and fertiliser businesses.
Ian is the Chairman of three Wesfarmers joint venture
boards: Covalent Lithium, Queensland Nitrates and
Australian Gold Reagents. He is also a board member
of industry body Chemistry Australia, and Chair of the
Australian Chapter of the Australia-Chile Business
Council. He is a former board member of the
International Fertilizer Association, Kwinana Industries
Council and Australian Institute of Management.
In May 2024, Ian announced his retirement effective
November 2024. Ian will remain with Wesfarmers
in an advisory capacity and as Chairman of Covalent
Lithium. He will be succeeded by Aaron Hood, who
is WesCEF’s Deputy Managing Director and Chief
Operating Officer.
11 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 for Australia and New Zealand and
head of the Trust and Agency business across Asia.
Naomi is a director of Wespine Industries, chair
of the Kids Research Institute and member of Chief
Executive Women. Until June 2024, Naomi also
served on the Council of the Australian National
University where she was Pro Chancellor.
12 Jenny Bryant
CHIEF HUMAN RESOURCES OFFICER
WESFARMERS
Jenny was appointed Chief Human Resources Officer
of Wesfarmers in October 2016.
Prior to this she worked at Coles Group, Mars Inc
(Europe and USA), Vodafone (global) and EMI Music
(global). Over her career, she has held a variety of roles,
including international human resources, data analytics
and technology, operations and sales and marketing.
Jenny is a Director of the Flybuys joint venture with Coles
Group Limited and a member of Chief Executive Women.
She is also a director of Ember Connect.
13 Michael Britton
EXECUTIVE GENERAL MANAGER
BUSINESS DEVELOPMENT
WESFARMERS
Michael joined Wesfarmers in March 2023 in the role
of Executive General Manager, Business Development.
Before joining Wesfarmers, Michael worked in the
private equity industry with global investment firm
The Carlyle Group. Michael has a background in M&A
and strategic projects, with investment experience
across a range of industries, including healthcare,
consumer retail and industrial sectors.
Michael is Chairman of Wespine Industries.
14 Sheldon Renkema
EXECUTIVE GENERAL MANAGER
COMPANY SECRETARIAT
WESFARMERS
Sheldon was appointed Executive General Manager,
Company Secretariat in October 2023 and is the
Company Secretary of Wesfarmers.
Before that appointment, Sheldon was General
Manager of Business Development at WesCEF and
held roles within the Wesfarmers corporate office,
including leading the corporate and retail legal teams.
He commenced at Wesfarmers in 2007 as a legal
counsel and has a background in advising on
corporate transactions.
From 2019 to 2024, Sheldon was a director
of Activ Foundation Limited.
13
14
10
11
12
7
8
9
Overview
Wesfarmers 2024 Annual Report
15
It is my pleasure to provide this
operating and financial review for
the 2024 financial year.
At Wesfarmers, our primary objective
is to deliver satisfactory returns to
shareholders over the long term, and this
review details our approach to delivering
on this objective. It includes an update
on the Group’s financial position and
performance for the year, and a summary
of our operating model, strategies,
material risks and prospects.
Divisional summaries on pages 24 to 58
provide more detail on performance and
strategies for each of our businesses.
I am pleased that we have continued
to expand and integrate our sustainability
and climate-related disclosures, which
are set out in this annual report and
on our website. We believe responsible
management is key to our value-creating
strategies, recognising the strong linkages
to financial performance over the long
term. Our efforts in these areas help build
more resilient businesses for the benefit
of all stakeholders. Detailed information
can be found at wesfarmers.com.au/
sustainability
This review should be read in conjunction
with the financial statements, which are
presented on pages 129 to 178.
The Wesfarmers Way
The Wesfarmers Way, as shown opposite,
guides the company’s operating model
and is directed at achieving the Group’s
primary objective — to deliver
a satisfactory return to shareholders.
Wesfarmers’ model of divisional
autonomy drives accountability and focus
within the divisions, with access to capital
and specialist support available within the
corporate office. A major focus is ensuring
each of our divisions has a strong
management team that is accountable
for long-term strategy development and
execution, as well as day-to-day
operational performance. Each division is
overseen by a divisional board of directors
that includes the Wesfarmers Managing
Director and Chief Financial Officer, and
is guided by our Group-wide operating
cycle and governance framework.
Wesfarmers focuses on seven key
enablers to drive operating performance:
−
outstanding people
−
empowering culture
−
commercial excellence
−
innovation
−
robust financial capacity
−
social responsibility
−
sustainability.
The Group maintains strong
commercial discipline in relation
to capital investment decisions and
working capital management.
Measuring performance
The key 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.
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, the
Group focuses on return on equity (ROE)
as a key internal performance indicator.
While ROE is recognised as a fundamental
measure of performance at a Group level,
ROC has been adopted as the principal
measure of performance for the divisions.
Operating and
financial review
Operating and financial review
Wesfarmers 2024 Annual Report
16
ROC focuses the divisions 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.
For those divisions already delivering
strong ROC, key performance measures
also include an earnings growth target.
Delivering shareholder returns
As part of Wesfarmers’ approach
to delivering a satisfactory return to
shareholders, we seek to:
−
drive earnings and cash flow growth
by enhancing the competitive position
of existing businesses
−
continue to invest in Group
businesses where the value of capital
investment opportunities exceed
return requirements
−
acquire or divest businesses where
doing so delivers an increase in long-
term shareholder value
−
ensure efficient capital management
and the efficient distribution of
franking credits to shareholders.
To support this, the Group endeavours
to maintain balance sheet strength and
flexibility so as to take advantage of
opportunities that arise. This includes
maintaining access to diverse sources
of funding and optimising funding costs.
The Group maintains strong credit
metrics, in line with investment grade
credit ratings, supported by good
cash flow generation and disciplined
capital management.
Capital allocation
Wesfarmers continues to evaluate 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 potential sustainability issues.
The Group maintains strong commercial
discipline in its approach to evaluating
opportunities, with the most important
criteria being whether the investment will
create value for shareholders over time.
Anthony Gianotti
Chief Financial Officer
Strengthen existing businesses
through operating excellence
and satisfying customer needs
Secure growth
opportunities through
entrepreneurial initiative
Renew the portfolio
through value-adding
transactions
Ensure sustainability
through responsible
long‑term management
Integrity
Openness
Accountability
Entrepreneurial spirit
The Wesfarmers Way
VALUE-CREATING STRATEGIES
CORE VALUES
OUR PRIMARY OBJECTIVE
To deliver a satisfactory return
to shareholders
There are three broad avenues for
incremental capital allocation that are
considered by the Group:
−
opportunities to deploy capital in the
existing portfolio to drive growth and
productivity and to build businesses
with unique capabilities and platforms
in expanding markets
−
in adjacent opportunities where we
can leverage existing assets and
capabilities to develop new sources
of long-term growth
−
through value-accretive transactions,
where we remain disciplined and
have the flexibility to consider a range
of ownership models.
Overall, the portfolio and balance sheet
are well positioned, with a range of
growth initiatives in train and the flexibility
and capacity to continue to consider
new opportunities.
Operating and
financial review
Wesfarmers 2024 Annual Report
17
Overview
The Group reported a statutory net profit
after tax (NPAT) of $2,557 million for the
full year ended 30 June 2024, an
increase of 3.7 per cent on the prior year.
Overall, Wesfarmers’ NPAT growth
reflected pleasing earnings growth in the
retail divisions, partially offset by higher
borrowing costs due to an increase
in average interest rates and lower
capitalised interest.
This year, there were numerous
headwinds to navigate with cost of living
pressures, rising costs of doing business,
subdued activity in residential
construction and significant volatility in
key commodities. In this environment,
Wesfarmers’ businesses executed well,
with the retail divisions responding
effectively as households increasingly
shifted to value during the year. Sales
and earnings growth in the retail divisions
was supported by everyday low price
offerings and products with broad
customer appeal.
The Group benefited from improvements
in productivity and efficiency, which was
the result of a proactive focus and
ongoing investment in recent years.
These improvements enabled the
divisions to provide compelling value
for customers and mitigate ongoing
cost of doing business pressures.
Bunnings demonstrated the resilience
of its offer and ability to deliver growth
through a range of market conditions,
with higher sales growth recorded in the
second half. Kmart Group’s performance
was a standout, delivering significant
earnings growth supported by the
market-leading value credentials of its
Anko products, unique sourcing
capabilities and actions to reduce costs.
WesCEF’s earnings were impacted by
lower global commodity prices, but
operating performance was strong with
good plant production rates. While the
focus remains on efforts to complete
construction and commissioning of the
Kwinana lithium hydroxide refinery, this
year WesCEF achieved an interim
milestone with its first shipment of
spodumene concentrate in March 2024.
It was pleasing to see continued
earnings growth in Officeworks and
Wesfarmers Industrial and Safety.
Wesfarmers Health also increased
earnings and continued to invest in
transformation activities and integrate
recent acquisitions, while focusing
on opportunities to accelerate growth
and improve returns.
The Catch result was an improvement on
the prior year following actions to reduce
costs, clear inventory and shift the focus
towards the third-party marketplace.
Actions are now shifting from remediation
to scaling the marketplace and better
utilisation of supply chain assets
and capabilities.
OneDigital is increasingly playing an
important role in accelerating the retail
and health divisions’ omnichannel
growth agenda. There were significant
enhancements made to the OnePass
program during the year, which
broadened the benefits to members
through new retail partnerships and
unique online and instore benefits
providing additional value.
Further details on divisional financial
performance are outlined in pages
24 to 58 of this annual report.
1 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.
2 EBIT after interest on lease liabilities.
20
21
22
23
24
2024
3,225
2023
3,627
2022
1,110
2021
2,741
2020
5,188
$3,225m
Free cash flow
Year in review
(excluding significant items)
(excluding discontinued operations and significant items)
2024
2,557
2023
2,465
2022
2,352
2021
2,421
2020
2,075
$2,557m
$3,753m
Net profit after tax1
Earnings1, 2
2024
3,753
2023
3,644
2022
3,416
2021
3,550
2020
2,942
20
21
22
23
24
4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
0
20
21
22
23
24
3,000
2,500
2,000
1,500
1,000
500
0
2024
31.3
2023
31.4
2022
29.4
2021
26.1
2020
22.1
(excluding significant items)
31.3%
Return on equity (R12)1
20
21
22
23
24
35
30
25
20
15
10
5
0
Operating and financial review
Wesfarmers 2024 Annual Report
18
Operating cash flows
Divisional operating cash flows before
interest, tax and the repayment of lease
liabilities increased 4.0 per cent compared
to the prior year, with divisional cash
generation of 101 per cent. Divisional cash
flow growth reflects disciplined net working
capital management at Bunnings, partially
offset by lower earnings at WesCEF due
to the impact of lower global commodity
prices and working capital investment in
the Health division, including as a result
of changes to supplier and customer
payment arrangements.
Overall inventory health is strong, with
good stock availability across the retail
divisions and improved stock turn over
the year at Bunnings and Kmart Group.
Reported operating cash flows increased
9.9 per cent to $4,594 million, supported by
the divisional cash flow result and lower tax
paid due to the timing of tax payments.
Capital expenditure
Gross capital expenditure of $1,076 million
was 16.5 per cent lower than the prior
year, largely due to lower spend on store
building projects in Bunnings and lower
development spend on the Covalent
lithium project, due to timing of project
spend. Proceeds from the sale of property,
plant and equipment of $32 million were
$73 million below the prior year, largely due
to reduced property disposals at Bunnings.
The resulting net capital expenditure
of $1,044 million was $139 million, or
11.7 per cent, lower than the prior year.
Free cash flows
Free cash flows of $3,225 million
decreased 11.1 per cent on the prior year,
with the growth in operating cash flows
offset by the impact of proceeds from the
sale of the Group’s remaining interest in
Coles Group Limited in the prior year,
and the cash consideration relating
to the Group’s acquisition of SILK
and InstantScripts during the year.
Balance sheet
The Group recorded a net financial
debt position of $4,258 million as at
30 June 2024. The increase compared
to the net financial debt position of
$3,984 million as at 30 June 2023 reflects
the growth in operating cash flows offset
by the distribution of $2.2 billion in fully-
franked dividends paid to shareholders,
ongoing capital investment and acquisition
activity during the year.
2 Balances reflect the management balance sheet, which is based on different classification and groupings
than the balance sheet in the financial statements.
3 Interest-bearing loans and borrowings less cash at bank and on deposit and held in joint operation, net
of cross-currency interest rate swaps and interest rate swap contracts. Excludes cash on hand, cash in
transit and lease liabilities.
2024
2023
Year ended 30 June2
$m
$m
Inventories
6,102
6,039
Receivables and prepayments
2,459
2,300
Trade and other payables
(5,377)
(5,268)
Other
351
252
Net working capital
3,535
3,323
Property, plant and equipment
5,653
5,365
Goodwill and intangibles
5,051
4,692
Other assets
1,021
1,099
Provisions and other liabilities
(1,909)
(1,818)
Total capital employed
13,351
12,661
Net financial debt3
(4,258)
(3,984)
Net tax balances
517
667
Net right-of-use asset/(lease liability)
(1,025)
(1,063)
Total net assets
8,585
8,281
Group capital employed
2024
2023
Year ended 30 June
$m
$m
Bunnings Group
2,251
2,230
Kmart Group
958
769
WesCEF
440
669
Officeworks
208
200
Industrial and Safety
109
100
Wesfarmers Health
50
45
Catch
(96)
(163)
Total divisional
3,920
3,850
Other
(167)
(206)
Total earnings1
3,753
3,644
1 EBIT after interest on lease liabilities.
Divisional earnings summary
2024
2023
Year ended 30 June
$m
$m
Bunnings Group
268
405
Kmart Group
136
127
WesCEF
447
518
Officeworks
64
71
Industrial and Safety
79
73
Wesfarmers Health
38
41
Catch
5
10
Other
39
43
Gross capital expenditure
1,076
1,288
Proceeds from sale of property, plant, equipment
and intangibles
(32)
(105)
Net capital expenditure
1,044
1,183
Cash capital expenditure
Operating and
financial review
Wesfarmers 2024 Annual Report
19
Debt management
and financing
Other finance costs increased
23.0 per cent to $166 million, reflecting
higher average interest rates during the
period and lower capitalised interest
following the commissioning of the
Mt Holland mine and concentrator.
On a combined basis, other finance
costs, including the component of interest
that was capitalised, increased
8.5 per cent to $192 million.
The Group retains significant headroom
against key credit metrics and this year
reduced its debt to EBITDA ratio to
1.8 times, compared to 1.9 times in the
prior year. The Group maintained its strong
investment grade credit ratings, with a
rating from Moody’s Investors Service of
A3 (stable) and a rating from S&P Global
Ratings of A- (stable).
Dividends
A key component of total shareholder
return is dividends paid to shareholders.
The Group’s dividend policy considers
available franking credits, current earnings
and cash flows, future cash flow
requirements and targeted credit metrics.
The Board has determined to pay a
fully-franked ordinary final dividend of
107 cents per share, taking the full-year
ordinary dividend to 198 cents per share.
The final dividend will be paid on
9 October 2024.
Given the preference of many
shareholders to receive dividends in the
form of equity, the directors have decided
to continue the operation of the Dividend
Investment Plan (the ‘Plan’). The allocation
price for shares issued under the Plan will
be calculated as the average of the daily
volume-weighted average price of
Wesfarmers shares on each of the
15 consecutive trading days from
and including the third trading day
after the record date.
The last date for receipt of applications
to participate in, or to cease or vary
participation in, the Plan is
5 September 2024. No discount will apply
to the allocation price and the Plan will not
be underwritten. Shares to be allocated
under the Plan will be transferred to
participants on 9 October 2024. Given the
Group’s strong credit metrics, it is
intended that any shares to be issued
under the Plan will be acquired on market
and transferred to participants.
Year in review
DRAWN BANK FACILITIES
UNDRAWN BANK FACILITIES
CAPITAL MARKET DEBT
1
As at 30 June 2024. Capital market debt is net
of cross-currency interest rate swaps.
25
26
27
28
29
30
31
32
33
34
0
900
600
300
1,200
1,500
Debt maturity profile ($m)1
Lease liabilities1
$6.5b
Bank facilities & bonds2
$4.7b
1 Represents total discounted lease liabilities
as at 30 June 2024.
2 As at 30 June 2024. Bank facilities & bonds
is net of swaps.
Fixed financial obligations
1
Assumes 100 per cent dividend reinvestment on the ex-dividend date and full participation in capital
management initiatives e.g. rights issues and share buybacks. Source: Bloomberg, excludes value
of franking credits.
WESFARMERS LIMITED TSR INDEX1
ASX 100 ACCUMULATION INDEX
(last five years)
TSR1: Wesfarmers and ASX 100
19
20
21
22
23
24
0
50
250
200
150
100
Other finance costs ($m)
CAPITALISED INTEREST
20
21
22
23
24
200
150
100
50
0
198 cents
ORDINARY DIVIDENDS
SPECIAL DIVIDENDS
Dividends per share
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.
Ordinary dividends
300
200
100
0
23
22
21
20
24
2024
198
2023
191
2022
180
2021
178
20201
152
OTHER FINANCE COSTS
Operating and financial review
Wesfarmers 2024 Annual Report
20
Risk
Wesfarmers recognises the importance of, and is committed to, the identification, monitoring and effective management of risks
associated with its activities across the Group.
The following information details a selection of material Group-wide risks, not in any particular order. These material risks do not include
generic risks, such as changes to macroeconomic conditions affecting businesses and households in Australia (such as inflationary
pressures), which would affect all companies with a large domestic presence, although Wesfarmers is well positioned in this regard
to meet changing customer demand.
Specific information on sustainability and climate-related risks is provided on pages 59 to 84 of this annual report.
Health, safety and wellbeing
As one of Australia’s largest private
sector employers, Wesfarmers is
committed to providing a safe and fulfilling
work environment for its approximately
120,000 team members. Refer to page
62 for details.
Approach and action:
−
Continued focus on mitigating safety
risks with strengthened safety systems
−
Strategies, processes and training
to protect team members from
threatening situations
−
Continued investment in asset
maintenance for the safe operation
of facilities and distribution of products
−
Regular monitoring and evaluation
of health and safety metrics
−
Health and wellbeing programs for
team members
−
Focus on respect at work and
psychosocial risk awareness
and training
Cyber security
Wesfarmers is highly focused on
cyber security to safeguard against an
information security breach. Refer to
page 66 for details.
Approach and action:
−
Continued investment in systems,
processes and capabilities, including
by using technology and dedicated
cyber security teams
−
Ongoing training provided to team
members on cyber security risks
−
Collaborating on cyber security,
information technology and advanced
analytics across the Group
−
Regular reporting to management and
the Board to oversee cyber security
resilience across the Group
−
Regular reviews of network and
information security controls
−
Participating in industry and
government consultations to support
cyber security resilience
Talent attraction, retention
and engagement
The Group requires team members with
appropriate skills, capabilities and values
to execute divisional and Group
strategies. There is strong competition
to attract and retain these individuals.
Approach and action:
−
Succession planning, retention and
targeted development programs
−
Clear codes of conduct and measures
to create a welcoming environment
through diversity and inclusion programs
−
Strategies and investments to
strengthen employee value propositions
so the right talent is attracted and
retained by the Group
Data governance, privacy
and consent
Wesfarmers is committed to being
a trusted and responsible custodian
of customer and team member data.
Refer to page 66 for details.
Approach and action:
−
Continuing to enhance the Group’s
privacy frameworks, processes and
resourcing
−
Strong internal processes to protect
and control data access
−
Policies and standards to manage data
and safeguard personal data
−
Maintenance of the Group’s data
governance policy
Competition and business
model disruption
Wesfarmers’ divisions operate in highly
competitive markets, and face increasing
competition from new and existing
competitors.
Approach and action:
−
Each division is focused on executing
its own strategies to deepen customer
engagement and mitigate competitor risks
−
The divisions’ competitive advantages
provide them with opportunities to grow
market share
−
Analysis of business performance and
trend forecasting to identify emerging
risks and opportunities
−
A detailed corporate planning process,
which includes developing strategies
to mitigate competitor risks
Customer expectations
Wesfarmers divisions are focused on
meeting customer expectations as their
needs and preferences change. This
requires our divisions to continually evolve
their product and service offerings.
Approach and action:
−
Investing in data, digital and e-commerce
capabilities to deepen understanding
of customers and provide more timely,
personalised and engaging experiences
−
Investing in strategy, marketing,
merchandise and customer insight teams
−
Monitoring local and global trends and
responding with range reviews and new
customer propositions
−
Participating in take-back schemes
Operating and
financial review
Wesfarmers 2024 Annual Report
21
Commodity price and
currency movement
The Group is exposed to material
adverse movements in foreign exchange
and commodity prices that could
impact profitability.
Approach and action:
−
Conducting scenario analysis to identify
potential exposures to commodity price
and foreign exchange rate movements
−
Continuing to implement hedging
strategies to mitigate the impact of
adverse market movements
−
Regularly monitoring macroeconomic
indicators, geopolitical developments
and commodity market trends to identify
risks and opportunities
Product safety and liability
Wesfarmers divisions aim to offer
products that meet relevant product
safety regulations, standards and
guidelines. Refer to page 66 for details.
Approach and action:
−
Working with suppliers to require that
relevant product testing and quality
checks are performed
−
Where our divisions support the
design and development of own-brand
products, we require that these comply
with product safety standards, including
in-house testing
−
Collaboration across divisions to share
developments, learnings and best
practice in product quality and safety
Inventory management
Wesfarmers recognises the importance
of our divisions optimising inventory levels
to meet customer demand and support
business growth, while minimising the risk
of stock unavailability, excess inventory
and shrinkage throughout the
supply chain.
Approach and action:
−
Investing in demand planning systems
to optimise stock availability and align
with customer demand
−
Continued focus on key indicators,
such as inventory levels, turnover and
product availability rates
−
Enhancing security at retail and
manufacturing sites
−
Continued investment in retail team
member training for loss prevention
practices, security protocols and
reporting procedures
−
Investing in technology solutions
to minimise shrinkage
Sourcing and supply chain
The Group’s domestic and international
supply chains are highly complex.
Minimising the risk of interruptions to our
supply chains means our divisions can
maintain product and service availability
for customers.
Approach and action:
−
Ongoing development of supply chain
capabilities and strengthening systems
and processes
−
Increasing the diversification of sourcing
operations
−
Continuing to modernise supply
chain facilities
−
Actively managing supplier relationships,
engaging in regular dialogue,
performance reviews and supplier
development initiatives to foster long-
term relationships that align with the
Group’s minimum sourcing standards
−
Investing in supply chain analytics and
digital technologies
Regulatory compliance
Wesfarmers divisions are subject to
a wide range of laws and regulations and
failure to comply could negatively impact
the Group, for example by adversely
affecting stakeholders’ trust, our
reputation or license to operate and/or
financial performance. In addition, the
pace of regulatory change and expansion
is increasing the compliance burden
on the Group and the risk of adverse
consequences for our businesses.
Approach and action:
−
Dedicated legal and compliance teams
to manage legal issues, matters, claims
and disputes
−
Monitoring of and response to legal,
regulatory and public policy changes
−
Maintaining relationships with regulators,
government and industry bodies
−
Establishing clear guidelines and
expectations for divisional governance
−
Providing training to team members
to promote and support compliance
with laws and regulations
Strategy execution
Wesfarmers sets strategic objectives
through a detailed corporate planning
process and regularly assesses
performance against these strategic
objectives. Under Wesfarmers’ model
of divisional autonomy, accountability for
divisional strategy execution lies primarily
with divisional management.
Approach and action:
−
Detailed planning and budgeting
processes
−
Performance measurement frameworks
and key performance indicators to track
progress
−
Regular review of projects and programs
to monitor progress on strategy
execution, including benefits, costs and
resource allocation
−
Divisional boards to monitor progress
Operating and financial review
Wesfarmers 2024 Annual Report
22
Prospects
Wesfarmers remains focused on long-term value creation
and continues to invest to strengthen its existing businesses
and develop platforms for growth.
Australian and New Zealand inflation moderated over the year,
but as anticipated, current inflation and interest rates remain
elevated and continue to place pressure on parts of the economy,
including household budgets. Cost of doing business pressures are
expected to persist in the 2025 financial year, driven by elevated
inflation, labour market constraints, wage cost increases and
higher energy and supply chain costs.
Despite these challenges, the Australian economy remains
well supported, with demand driven by low unemployment relative
to historical levels and ongoing population growth. There is a
continued need to address the shortages in Australian housing
stock, which is expected to support higher levels of construction
activity over the medium term.
The Group’s retail businesses remain well positioned to meet
ongoing demand for value-based products, as households face
cost of living pressures and savings reduce from the levels built
up during COVID-19.
Wesfarmers’ larger businesses are benefiting from investments
made to digitise their operations and develop sourcing capabilities.
Together with benefits from proactive productivity and efficiency
investment over recent years, this provides confidence in the
Group’s ability to adjust costs in line with trading conditions.
The Group continues to monitor international supply chains
and key shipping routes, and has implemented appropriate
contingencies to mitigate the potential risk of interruptions
and delays.
The performance of the Group’s industrial businesses remains
subject to international commodity prices, foreign exchange rates,
competitive factors and seasonal outcomes. Operations at
WesCEF will continue to be impacted by higher Western Australian
natural gas costs as more gas supply contracts are renewed.
Wesfarmers remains focused on the development of an integrated
lithium mine, concentrator and refinery. The successful
development of the refinery is expected to generate satisfactory
returns over the long term given the attractive cost structure of
the project and the improved margin available from value-added
production. Covalent is expected to complete construction and
commissioning of the refinery with first product in mid-calendar
year 2025. Sales of lithium hydroxide are expected to commence
in the 2026 financial year as production volumes ramp up and after
satisfactory product qualification with customers. WesCEF’s share
of capital expenditure for the Covalent lithium project remains
in line with the guidance provided at the 2023 half-year results.
Wesfarmers will continue to invest in its existing operations and in
the development of platforms for long-term growth and shareholder
value creation.
Wesfarmers will continue to manage its divisions and the
portfolio with carbon awareness, remaining focused on delivering
progress against its net zero and renewable electricity targets and
making disciplined investments to strengthen the climate resilience
of its businesses.
Wesfarmers recognises there are
other material risks across the Group.
These include a wide range of strategic,
operational, regulatory and financial
risks, such as:
−
Digital disruption, for example through
technological innovation
−
Portfolio management, noting
Wesfarmers actively manages its
portfolio through acquisitions and
divestments
−
Business disruption, loss of major
infrastructure and physical security
−
Risks inherent in the distribution and
sale of products
−
Conduct risk, which may impact
Wesfarmers’ reputation
−
Human rights risks, including modern
slavery in our operations and supply
chains (refer to page 67 for more
details)
−
Climate and nature-related risks,
including risks associated with
emissions management (refer to page
73 for more details)
−
Risks inherent in asset management,
including process safety risk
−
Clinical governance risks
in Wesfarmers Health
−
Geopolitical risks, including potential
impacts on global supply chains or
input prices
−
Regulatory or legislative change
−
Liquidity and access to funding.
Further information on risk management,
including policies, responsibilities and
certification, can be found on page 92.
Visit our website to read more:
wesfarmers.com.au/cg
Operating and
financial review
Wesfarmers 2024 Annual Report
23
Bunnings
Group
Operating and financial review | Bunnings Group
Our business
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 513 locations,
including large warehouse stores, smaller format
stores, trade centres and specialist stores,
complemented by online channels. Bunnings
employs more than 51,000 team members
across Australia and New Zealand.
Bunnings’ three strategic pillars remain core
to how it delivers for customers: lowest prices,
widest range and best experience. These pillars
come to life through its physical and digital
presence and the ways that Bunnings connects
and serves its customers on-site, in the home,
on the phone, instore and online. The pillars
are underpinned by a focus on the safety
of its team, customers and suppliers, and
by fostering strong relationships with the
local communities it serves.
Bunnings has evolved from a warehouse
model offering around 34,000 hardware and
home improvement products when the first
Bunnings warehouse opened in 1994, to an
omnichannel business with approximately
240,000 home, commercial and lifestyle
products across its instore, online
and marketplace offers today.
Revenue
Earnings before tax
Highlights and outlook
2024
18,968
2023
18,539
2022
17,754
2021
16,871
2020
14,999
2024
2,251
2023
2,230
2022
2,204
2021
2,185
2020
1,826
$18,968m
$2,251m
Revenue for Bunnings increased
2.3 per cent to $18,968 million for
the year, with earnings increasing
0.9 per cent to $2,251 million. Excluding
net property contributions, earnings
increased 2.6 per cent. The resilient
sales and earnings result was supported
by Bunnings’ strong value credentials,
sustained demand for ongoing repairs
and maintenance, growth in online
channels and the continued execution
of Bunnings’ strategic agenda, including
range innovation.
During the year, Bunnings continued
to invest in supply chain, data and
technology projects to strengthen the
customer experience across all channels.
A new last-mile delivery service, Bunnings
Local Delivery, was launched and more
personalised communication across
Bunnings’ digital channels improved
relevance and drove incremental sales.
While Bunnings’ TRIFR increased to
17.0 during the period, a comprehensive
program of initiatives is underway to
reduce injuries and increase safe product
movement through Bunnings’ stores
and supply chains.
Bunnings remains committed
to reducing its environmental footprint
and is on track to achieve 100 per cent
renewable electricity by the end of
calendar year 2025 and to achieve net
zero Scope 1 and Scope 2 emissions by
2030. Renewable electricity now powers
80 per cent of Bunnings’ Australian
and New Zealand network.
Bunnings maintains its long-term focus
on sustainable earnings growth through
the economic cycle, underpinned
by a resilient operating model, leading
customer value proposition and focus
on simplicity and productivity.
Despite challenging trading conditions
in the commercial sector and ongoing
household budget pressures, Bunnings
remains well placed to continue providing
value to cost-conscious customers.
This is supported by Bunnings’ relentless
focus on everyday lowest prices, with the
business’ continued productivity focus
enabling further investment in price and
customer experience.
The market-wide softness in building
activity is expected to continue in the 2025
financial year, but population growth and
the shortages in Australian housing stock
are anticipated to support a recovery in
building activity over the medium term.
Bunnings will focus on executing a range
of initiatives to expand its addressable
market, improve the customer offer and
maintain a low-cost operating model
to support growth over the long term.
This includes network and range evolution,
growth in commercial capabilities, space
optimisation, digital channel growth
and further development in supply
chain capability.
Michael Schneider
Managing Director
Bunnings Group
Operating and
financial review
Wesfarmers 2024 Annual Report
25
Bunnings Group
Bunnings’ strategy is informed by its three
pillars: lowest prices, widest range and
best experience. The strategy focuses
on four key priority areas: Care, Grow,
Simplify and Evolve.
Care
Bunnings’ priorities start with
demonstrating genuine care for its team,
customers, suppliers and the environment
every day, and building strong relationships
with the communities it serves.
During the year, Bunnings implemented
a new enterprise agreement, rewarding its
team members and enabling more flexible
work options.
Bunnings is focused on ensuring its team
stays safe and well in the workplace.
Refer to page 28 for details.
Grow
Bunnings is focused on providing
customers the best offer, delivering
exceptional value, innovating on range
and introducing new product categories
to expand its addressable market.
Bunnings is deepening its relationships
with commercial customers by having
a service model and product offer that
better meet their needs.
During the year, the business opened
two Bunnings stores, two Tool Kit Depot
stores, six Beaumont Tiles stores and
two new frame and truss sites. Bunnings
also expanded four stores to improve
the local offer.
Bunnings is aiming to grow across
all product categories and completed
a number of range reviews this year.
The business introduced more bulk-pack
sizes, providing customers with greater
value and a differentiated offer.
During the year, Bunnings identified new
opportunities to expand its addressable
market. This included launching expanded
cleaning and outdoor ranges and new
own-brand products, such as the Citeco
safety equipment range, and introducing
steel frames to its frame and truss offering.
Bunnings also launched its Trade Assist
service to make it easier for trades to
order materials. The business will continue
to innovate and introduce new products
and categories to expand its addressable
market and improve the customer offer.
Simplify
Simplicity is core to the Bunnings
strategy. Bunnings’ productivity and
technology initiatives support the
Our strategy
business to operate as efficiently
as it can to reinvest in lowest prices.
Bunnings has continued its focus on
removing non-customer facing tasks in
stores, which enables the team to spend
more time with customers. During the
year, Bunnings implemented a new
rostering platform to better match team
member hours with customer demand.
Bunnings is leveraging technology,
including generative AI, to drive
improvements in productivity and customer
experience. This includes further digitising
and automating manual processes in
stores and support functions.
Evolve
Bunnings is evolving its capabilities and
operating model to reflect the changing
needs of its customers and communities.
This is underpinned by a program
of continuous improvement across
Bunnings
Local Delivery
Bunnings Local Delivery is a new
fulfilment solution for customers.
Instore team members complete
deliveries to local customers' homes
and job sites using Bunnings-
branded utes and vans.
Following a successful pilot with
an improved delivery experience
for customers, the service was
expanded to more than 50 stores
in 2024.
The service reinforces Bunnings’
strong commitment to friendly
customer service. In addition, it
allows Bunnings to better manage
the delivery process and more
efficiently respond to elevated
delivery demand.
The service complements Bunnings’
existing arrangements with logistics
partners to collectively deliver orders
ranging from parcels to big and bulky
items, and is lifting overall customer
satisfaction in Bunnings’ delivery
experience.
Following the initial success of the
Bunnings Local Delivery roll-out,
Bunnings will expand the service
to further stores in the 2025
financial year.
its supply chain, a more sophisticated
approach to space management and
the ongoing improvement of data and
digital capabilities.
Examples of Bunnings’ progress
include the consolidation of its distribution
centre network to drive efficiencies,
the optimisation of customer fulfilment
processes across all fulfilment nodes
and the use of OnePass, Flybuys and
PowerPass data to deliver more
personalised customer experiences.
This year, Bunnings trialled space
planning technology in smaller format
stores, to ensure the right products
are in the right locations instore.
The priorities for the coming years include
continuing to develop fulfilment and
last mile capabilities, further leveraging
data to deliver a more personalised
customer experience and evolving
its retail media program.
Wesfarmers 2024 Annual Report
26
Operating and financial review | Bunnings Group
Key financial indicators (year ended 30 June)
2024
2023
Revenue ($m)
18,968
18,539
Earnings before tax ($m)
2,251
2,230
Capital employed ($m) R12
3,254
3,410
Return on capital employed (%) R12
69.2
65.4
Cash capital expenditure ($m)
268
405
Sustainability results
2024
2023
Total recordable injury frequency rate (TRIFR)1 R12
17.0
16.5
Aboriginal and Torres Strait Islander team members
1,531
1,246
Scope 1 and Scope 2 (market-based) emissions (ktCO2e)
49.4
59.9
Operational waste diverted from landfill (%)
60.6
57.1
Community contributions ($m)
61.1
47.4
Sites in the ethical sourcing program that were monitored (%)2
77
65
Year in review
Revenue for Bunnings increased
2.3 per cent to $18,968 million for the
year, with earnings increasing 0.9 per cent
to $2,251 million. Excluding net property
contributions, earnings increased
2.6 per cent.
Total store and store-on-store sales
increased 2.6 per cent and 2.1 per cent
respectively, and sales growth continued
in both consumer and commercial
segments. Pleasing second half sales
growth was supported by sustained
demand for ongoing repairs and
maintenance, growth in online channels,
and range innovation across categories,
such as pets, smart home and cleaning,
partly offset by a market-wide softening
in building activity.
With continued pressure on many
household budgets, consumer sales
growth was supported by Bunnings’
strong value credentials, which continued
to underpin growth in transactions and
units sold. Bulk pack quantities and
own-brand and entry-level ranges
performed well, appealing to those
consumers looking for affordable ways
to maintain and improve their homes.
Commercial sales growth during the
year reflected continued demand from
trades as they work to complete the
pipeline of outstanding work. Demand
from builders moderated through the year
as new building starts were lower relative
to recent years.
Ongoing cost discipline, moderating
product cost inflation and business
improvement initiatives supported
ongoing investment in prices and
experience for customers and improved
business productivity. A new enterprise
agreement for Australian store team
members was implemented in the first
half, providing more flexibility to reward
team members with industry-leading
benefits while improving rostering
flexibility, optimising labour productivity
and supporting Bunnings’ strong
retention rates.
Bunnings continued to invest in supply
chain, data and technology projects,
to strengthen the customer experience
across channels. Digital sales increased
during the year, supported by an
expanded Bunnings Marketplace offering,
investments in the online customer
experience and the PowerPass and
OnePass programs.
Bunnings continued to strengthen
its Whole of Build commercial strategy
and develop deeper connections with
customers across trades, builders and
organisations. During the second half,
a new state-of-the-art automated frame
and truss plant was opened in Wacol,
Brisbane, enabling Bunnings to supply
prefabricated frames and trusses to
customers with greater efficiency and
at a lower cost.
At the end of the period, there were
286 warehouses, 65 smaller format stores
and 31 trade centres in the Bunnings
network, as well as 15 Tool Kit Depot
stores and 116 Beaumont Tiles stores.
increase in revenue
2.3%
increase in earnings, excluding
net property contributions
2.6%
return on capital employed (R12)
69.2%
decrease in Scope 1 and Scope 2
(market-based) emissions
17.5%
1
TRIFR measures the number of lost time and medical treatment injuries per million hours worked.
2
Ethical sourcing data for the 12 months to 15 June 2024.
Operating and
financial review
Wesfarmers 2024 Annual Report
27
Bunnings Group
Operating and financial review | Bunnings Group
led by cross-functional working groups
tasked with monitoring and addressing
identified hazards.
Diversity and inclusion
Bunnings values diversity and inclusion
and continues to develop a culture of
respect and belonging. Bunnings is proud
that more than 50 per cent of its team
members are women, and that its team
members speak more than 70 languages.
Team members span a wide age range
with 29.5 per cent over the age of 50 and
46.6 per cent under 30.
Bunnings actively supports Aboriginal
and Torres Strait Islander employment.
This year, 3.3 per cent of Australian-based
team members self-identified as Aboriginal
or Torres Strait Islander team members.
In 2024, Bunnings launched a new
Indigenous Introduction to Leadership
program, which complements existing
programs to build leadership capabilities.
Bunnings also supports Indigenous-
owned businesses. This year, Bunnings’
spend with Aboriginal and Torres Strait
Islander businesses totalled $6.0 million.
Supporting employment opportunities
for Maori and Pasifika is a priority for
Bunnings. Bunnings Aotearoa/New
Zealand also integrates Te Ao Maori into
its practices, such as celebrating Matariki
and enhancing the team's understanding
and appreciation of Te Reo Maori.
Climate and energy
Reducing energy consumption and
transitioning to renewable electricity
across its network are the foundations
of Bunnings’ efforts to reduce greenhouse
gas emissions. Improving energy efficiency
is a key pillar of Bunnings’ net zero
strategy, helping to reduce emissions
and energy costs.
Bunnings continued to make progress
towards achieving 100 per cent
renewable electricity by the end of
calendar year 2025 and net zero Scope 1
and Scope 2 emissions by 2030.
Year in review
result in an injury. The program
encourages leaders to identify and rectify
injury hazards to make the workplace
safer. Injury prevention principles have
been developed and inform cross-
functional activities to reduce the risk
of sprain, strain, bruise, crush, fracture
or laceration injuries.
Protecting and supporting the mental
and physical wellbeing of team members
is a high priority for Bunnings. Activities
this year included the design and
implementation of a new work-focused
injury prevention program, the
development of prevention-focused tools
and resources for Bunnings leaders,
and improved access and promotion
of wellbeing support available to team
members. Bunnings also continued to
focus on the prevention and management
of psychosocial hazards, which has been
Health, safety and
wellbeing
Bunnings strives to provide a safe
working environment to ensure all team
members return home safely at the end
of their working day.
Bunnings’ TRIFR was 17.0 for the
period, compared to 16.5 in the prior
corresponding period. The decline in
performance was largely driven by an
increase in manual handling injuries
reported during the year.
To address the number of total recordable
injuries, Bunnings introduced an improved
three-year injury prevention program
in 2023 with the aim of managing and
mitigating injury risk. The program is
based on behavioural safety to guide team
members and leaders to stop, think and
act before commencing tasks that could
Partnering
with Circular
Head
Aboriginal
Corporation
Since 2022, Bunnings has
collaborated with Circular Head
Aboriginal Corporation (CHAC)
and manufacturer Seasol to develop
and launch an exclusive indoor
plant spray. The product is a new
indoor fertiliser and leaf shine plant
spray called tarkiner.
It is an organic seaweed concentrate,
using cowerrer or kelp from the
Tarkine region in Tasmania, where
the local peerapper Aboriginal people
have harvested cowerrer for
thousands of years.
Bunnings and Wesfarmers provided
financial support to CHAC through
the Building Outstanding Aboriginal
and Torres Strait Islander Businesses
(BOAB) Fund.
Since June 2024, tarkiner is exclusively
available at selected Bunnings stores
across Australia, with proceeds
supporting Indigenous communities
and employment.
Wesfarmers 2024 Annual Report
28
In 2024, Bunnings sourced 79.6 per cent
renewable electricity usage across its
network, up from 64.4 per cent in the
prior year. Bunnings’ stores in
New Zealand and large sites in Victoria
continue to be powered by 100 per cent
renewable electricity and during the year,
three 100 per cent renewable electricity
contracts took effect in New South Wales,
the Northern Territory and Western
Australia. Bunnings also reduced Scope 1
and Scope 2 (market-based) emissions
by 17.5 per cent relative to the prior year.
Community
During the year, Bunnings’ areas of
support continued to bring communities
together with sausage sizzles, hands-on
activities and instore fundraising.
Bunnings contributed and helped
community organisations raise more
than $61.1 million through more than
79,000 activities over the year.
To celebrate the launch of the Bunnings
and Bluey Hammerbarn collaboration
in February, Bunnings teamed with
Make-A-Wish Australia and New Zealand
to host sausage sizzles and fundraise
to grant wishes for critically ill children.
With the help of Bingo, Bluey and many
wonderful volunteers, Make-A-Wish
Australia and New Zealand raised more
than $130,000.
Bunnings’ support for ill children
continued into Easter with $140,000
raised and contributed to children’s
hospitals and foundations across
Australia and New Zealand.
rooftop solar systems with
26 additional systems installed
during the year
increase in direct and indirect
community contributions to
$61.1 million
153
28.9%
Bunnings introduced several initiatives
to support community organisations
throughout the year. In October, Australian
store teams delivered Bunnings’ inaugural
Stores for Paws campaign, welcoming
local animal rescue and welfare groups
into stores. The Stores for Paws
campaign supported adoption of animals
to new homes and helped raise more
than $200,000 in support of local animal
rescue and welfare groups across
the country.
In the lead up to Christmas, Bunnings
Australia supported Share the Dignity’s
It’s in the Bag drive for the seventh
consecutive year. Stores collected more
than 65,000 donated bags of personal
hygiene products for women and girls
experiencing homelessness and domestic
violence, valued at over $3.1 million.
10 years
supporting
the fight
against Motor
Neurone
Disease
Since its establishment over 10
years ago, FightMND has tirelessly
raised awareness of Motor Neurone
Disease (MND) and funds for vital
research into treatments and a cure.
Bunnings has been a major partner
of FightMND since 2019, raising
approximately $8 million.
To mark 10 years of the Big Freeze
campaign in 2024, Bunnings once
again sold FightMND’s iconic blue
beanies at all Australian stores
in May and June.
This year, Bunnings produced a
limited-edition white Big Freeze 10
bucket, which sold for $10, with
all profits going to FightMND.
The Bunnings team also hosted
barbecues at every Australian
store in May 2024.
Through national fundraising sales
from the blue beanies, buckets and
sausage sizzles, Bunnings raised
and contributed $2.3 million to
support FightMND this year.
Dr Fiona McIntosh, CEO of
FightMND, said partnerships with
Bunnings and others are essential
to raising much-needed funds for
ongoing research.
‘MND is relentless, but so are our
partners. The incredible support
Bunnings has shown Big Freeze is
helping to fund cutting-edge MND
research within Australia and
globally to fast-track discoveries
of potential new treatments and
ultimately find a cure.’
Visit our website to read more:
wesfarmers.com.au/sustainability
Operating and
financial review
Wesfarmers 2024 Annual Report
29
Bunnings Group
Kmart
Group
Operating and financial review | Kmart Group
Our business
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
322 stores throughout Australia and New
Zealand, offering customers a wide range
of everyday products at the lowest prices.
Kmart employs around 40,000 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 124 stores
and employs approximately 10,000 team
members across Australia, with a vision
to deliver quality products at affordable
prices for Australian families.
Kmart Group’s revenue increased
4.4 per cent to $11,107 million for
the 2024 financial year. Earnings
of $958 million were 24.6 per cent
above the prior year and represented
a record for the business.
Earnings growth for the year reflected
Kmart’s strong trading performance,
including strong growth in apparel sales.
Well-executed pricing strategies enabled
the business to deliver profitable growth
in share of wallet while extending Kmart’s
lowest price positioning. Kmart Group’s
continued focus on productivity, along
with moderation in key input costs,
mitigated the impact of ongoing cost
of doing business pressures.
Kmart Group’s Scope 1 and Scope 2
(market-based) emissions decreased
by 15.4 per cent. TRIFR reduced
12.2 per cent to 6.5, reflecting Kmart
Group’s continued commitment and
focus on safety, health and wellbeing
of the team.
Kmart Group will continue to progress its
strategic agenda, leveraging the strength
of its world-class product development
capabilities to maintain a competitive
advantage. The 2025 financial year will
see the investment in a number of core
capabilities in technology for stores and
supply chain to enable future growth.
Progress to increase Kmart Group’s
addressable market will also continue,
including through the distribution of Anko
products into new markets globally.
Lowest price for Kmart will continue
to be the core focus of the strategy and
ensures Kmart remains well positioned
in the current environment. Following the
exceptional growth recorded in the 2024
financial year, revenue and earnings
growth are expected to continue in the
2025 financial year with earnings growth
moderating compared to the prior year.
Performance in the 2025 financial year,
will be influenced by ongoing cost of living
pressures affecting customers’ spending
capacity, particularly in New Zealand, as
well as by increased competitive intensity.
Productivity and cost control will be
a focus, with cost pressures expected
to persist across operating expenses.
The continued digitisation of sourcing,
supply chain and store operations and
the integration of Kmart and Target
systems, processes and organisational
structures provide the opportunity to
drive greater efficiencies and to further
fractionalise costs.
Revenue1
Earnings before tax1
1
2021 and 2020 include Catch from 12 August 2019.
2
2021 earnings before tax for Kmart Group excludes $59 million of pre-tax restructuring costs.
3
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.
Highlights and outlook
Ian Bailey
Managing Director
Kmart Group
2024
11,107
2023
10,635
2022
9,129
2021
9,982
2020
9,217
2024
958
2023
769
2022
505
20212
693
20203
410
$11,107m
$958m
Operating and
financial review
Wesfarmers 2024 Annual Report
31
Kmart Group
A consistent strategic agenda has
allowed Kmart Group to continue
growing its share of customer wallet.
The integration of Kmart and Target,
announced in July 2023, enables Target
to maintain greater focus on its core
categories and access Kmart Group
systems and processes. Kmart and
Target operate as ‘One Business,
Two Brands’ and offer differentiated
customer value propositions.
A great place to shop that
is simple to run
Kmart Group is focused on making
its brands a great place to shop by
improving the experience across web,
app and store, and increasing customer
engagement through personalisation
and loyalty. The digitisation of Kmart
Group’s operations ensures stores are
simple to run, delivering operational
efficiencies and an improved customer
experience. As an example, refer to the
case study opposite on Kmart’s TORY
robots, now operating in all large format
stores in Australia and New Zealand.
This year, Kmart and Target deepened
customer engagement through an
improved omnichannel experience,
leveraging OnePass, personalisation,
social content and instore capabilities
(e.g. Click & Collect).
The alignment of Kmart and Target's
common systems and processes
provides scale benefits and enables a
lower-cost structure across the business.
A focus for the coming years includes the
continued expansion of the scope and
application of instore technology to
improve the customer experience and
drive further operational efficiencies.
Better products at even
lower prices
During the year, Kmart launched
new product ranges in Beauty and
Womenswear Youth, continuing
to enhance offerings in growing
demographics. Kmart Group further
invested in digital capability, including
expanding the use of 3D design and
building interlinked design, planning
and ranging tools, which have resulted
in operational improvements.
Our strategy
Kmart Group is focused on leveraging its
product development capabilities to grow
share in existing categories and deliver
new and expanded ranges. This will be
supported by a more digitally-enabled
supply chain to reduce cost and lead
times and improve availability.
By leveraging its unique competitive
advantages Kmart aims to further extend
its price leadership position and diversify
product offerings.
New and profitable
channels to market
Kmart Group continues to explore global
opportunities for distribution of Anko
products. This year, it entered into a
partnership agreement with Mattel for
Anko’s wooden toy product range.
Through Kmart Group’s in-house design
and direct sourcing capabilities, the Anko
range will continue to be selectively
expanded into new markets globally.
Kmart
benefits from
digitising
store
operations
Kmart has now successfully
completed the rollout of Radio
Frequency Identification (RFID)
technology to all large format stores
in Australia and New Zealand. The
digital stores data platform coupled
with the self-navigating TORY robots
provide near real-time visibility
of apparel inventory in stores.
This visibility helps team members
place the right product on the shop
floor when the customer needs it,
delivering incremental sales and
lower markdown costs due
to improved product availability.
Kmart continues to optimise
RFID technology to increase
sales and instore efficiency.
The efficiency and effectiveness
of Kmart's team members is also
expected to improve, with the
technology simplifying instore
processes. An example of this is
Kmart's apparel markdown tool,
which uses RFID to identify the
instore location of a product
requiring markdown. This removes
the need for team members to
manually check the location of each
item of apparel instore, delivering
efficiency benefits and improving
team member experience.
There are opportunities for Kmart
to leverage the technology across
other product categories, with the
potential to further improve team
member efficiency, reduce
shrinkage and increase sales.
Wesfarmers 2024 Annual Report
32
Operating and financial review | Kmart Group
Year in review
Key financial indicators (year ended 30 June)
2024
2023
Revenue ($m)
11,107
10,635
Earnings before tax ($m)
958
769
Capital employed ($m) R12
1,458
1,635
Return on capital employed (%) R12
65.7
47.0
Cash capital expenditure ($m)
136
127
Sustainability results
2024
2023
Total recordable injury frequency rate (TRIFR)1 R12
6.5
7.4
Aboriginal and Torres Strait Islander team members
2,200
1,986
Scope 1 and Scope 2 (market-based) emissions (ktCO2e)
184.6
218.1
Operational waste diverted from landfill (%)
82.1
82.0
Community contributions ($m)
10.5
8.9
Sites in the ethical sourcing program that were monitored (%)2
87
84
increase in revenue
4.4%
increase in earnings
24.6%
return on capital employed (R12)
65.7%
reduction in Scope 1 and Scope 2
(market-based) emissions
15.4%
Kmart Group’s revenue increased
4.4 per cent to $11,107 million for
the 2024 financial year. Earnings
of $958 million were 24.6 per cent
above the prior year and represented
a record for the business.
Kmart’s total sales increased 6.3 per cent
for the year, with comparable sales
increasing 6.4 per cent. In the second
half, total sales increased by 4.7 per cent,
and comparable sales increased by
5.1 per cent, reflecting the continued
strong response by customers to the
Anko product offer and Kmart’s lowest
price positioning. Sales increased across
all categories for the year, with units sold,
transaction volumes and customer
numbers all growing on the prior year.
Target’s total sales declined 4.5 per cent
for the year, with comparable sales
decreasing 3.6 per cent. In the second
half, total sales decreased by 3.8 per cent,
and comparable sales decreased 4.5 per
cent. Target’s second half trading
performance was relatively stronger
in apparel and also included a disrupted
period of sales with the changeover in
Target’s general merchandise range to
Anko. The introduction of Anko products
in Target has performed in line with
expectations since launch.
Earnings growth for the year reflected
Kmart’s strong trading performance,
including strong growth in apparel sales
as a result of improvements in the product
offer. Well-executed pricing strategies
enabled the business to deliver profitable
growth in share of wallet while extending
Kmart’s lowest price positioning.
Continued focus on productivity along
with moderation in key input costs,
including international freight, mitigated
the impact of ongoing cost of doing
business pressures and higher shrinkage.
Target delivered positive earnings for
the year and the second half.
Kmart Group continued to invest
in strategic initiatives to digitise its
operations and develop its data and
digital assets. Continued investment
in the omnichannel customer experience
enhanced Kmart and Target’s online
platforms with improved delivery
efficiency, and new OnePass member
benefits were launched during the year.
The integration of the Kmart and Target
processes, systems and organisational
structures to achieve one operating model
across the two brands progressed in line
with expectations.
Kmart opened one new store and
closed four stores during the year.
There were 446 stores across Kmart
and Target as at 30 June 2024.
1
TRIFR measures the number of lost time and medical treatment injuries per million hours worked.
2
Ethical sourcing data for the 12 months to 15 June 2024.
Operating and
financial review
Wesfarmers 2024 Annual Report
33
Kmart Group
its membership in Action, Collaboration,
Transformation (ACT), a living wage
collaboration between 20 international
brands and retailers, and IndustriALL
Global Union, the international trade union
federation. In May 2024, Kmart Group,
along with the other 19 ACT members,
signed a binding agreement with
IndustriALL to support a new collective
bargaining agreement in Cambodia in the
garment and footwear sector.
Kmart Group continued to support three
BSR HER programs (HER Heath, HER
Essentials/RISE Digital and RISE Respect)
in line with its public commitment to
provide professional skills, health or
education training to at least 100,000
women in the Kmart Group supply chain
by December 2025. As of May 2024, there
were 109,920 women enrolled in different
BSR HER programs across 57 Kmart
Group supplier factories in Bangladesh,
India and Vietnam.
Safety
Kmart Group’s safety performance
continued to improve with TRIFR reducing
12.2 per cent to 6.5, driven predominantly
by Kmart Group’s alignment of safety
processes and the introduction of the
supported duties program into Kmart.
Consolidation and simplification of the
Kmart Group safety management system
will continue to drive further improvements
with a focus on hazard risk reduction
initiatives targeting known injury causation.
People and diversity
Kmart Group maintained focus on
gender balance in leadership, Aboriginal
and Torres Strait Islander employment
and leadership, disability employment,
accessibility and LGBTQIA+ inclusion.
This year, the division achieved
40:40:20 gender balance across all
layers of leadership, including general
manager, senior manager and manager.
Women represent 48.5 per cent of all
leadership roles.
Aboriginal and Torres Strait Islander
team members make up 4.8 per cent
(2,200 team members) of Kmart Group’s
‘at work’ Australian workforce (worked
in the past 30 days), an increase from
4.3 per cent (1,986 team members) in
2023. This is in part due to the division’s
ongoing commitment to the Deadly
Stores program which focuses on
meaningful employment, cultural
confidence and cultural safety for
Indigenous team members.
Year in review
Kmart Group continued to take steps
to improve energy efficiency by trialling
more efficient lighting design and energy
efficient options in stores, ahead of a
wider rollout of these measures in 2025.
This year, six rooftop solar systems were
approved for installation and Kmart Group
executed contracts to source 100 per cent
renewable electricity across all New
Zealand sites, commencing in 2025.
To improve its Scope 3 emissions
inventory, Kmart Group collected supplier
data for more than half of its suppliers
in Category 1 over the last year, and plans
to use this to understand emissions and
energy sources in its supply chain.
Building on this progress Kmart Group
plans to develop a Scope 3 emissions
reduction roadmap in 2025.
Waste diversion from Kmart Group
stores and distribution centres was
82.1 per cent in 2024. Kmart has
renegotiated its national waste contracts
in 2024 and will rollout additional recycling
services across the store network in 2025.
During the year, Kmart Group
launched a new internal Sustainability
Framework, identifying opportunities
around sustainable materials and design.
The division continues to support industry
preferred materials across all apparel
products, such as using organic,
Australian or Better Cotton Initiative
certified cotton and recycled polyester.
Kmart Group has committed that
50 per cent of the polyester used in
its own-branded clothing and bedding
ranges will be from recycled content
in 2025. Kmart Group has transitioned
approximately 25 per cent of the polyester
used in these ranges to recycled materials
and has a roadmap in place to take
it to the completion of its commitment
in 2025.
Ethical sourcing
The Kmart Group ethical sourcing
program includes a detailed compliance
framework designed to support suppliers
to meet its Ethical Sourcing Code. This
year, 1,146 Tier 1 Kmart Group supplier
factories were subject to 1,293 third-party
ethical sourcing audits, down from 1,200
Tier 1 supplier factories and 1,379
third-party ethical sourcing audits in 2023.
The decline in Tier 1 supplier factories
and third-party ethical sourcing audits
for 2024 has been driven by the
consolidation of the Kmart and Target
supply chain. Kmart Group continued
Environment
Kmart Group has set a target of net
zero Scope 1 and Scope 2 emissions
by 2030 and 100 per cent renewable
electricity by the end of calendar
year 2025. During the year, Kmart Group’s
Scope 1 and Scope 2 (market-based)
emissions decreased by 15.4 per cent
to 184.6 ktCO2e, due primarily to the
commencement of a power purchase
agreement in Queensland and a decrease
in electricity emission factors, reflecting
the increased contribution of renewable
energy to grid electricity. While electricity
use remained consistent in 2024,
Kmart
Wishing
Tree Appeal
continues
to grow
Through generous customer
support, the 2023 Kmart Wishing
Tree Appeal raised $7.9 million,
a 24 per cent increase on the
prior year, to support the work
of The Salvation Army.
In partnership with The Salvation
Army, the Appeal leverages
Kmart’s national retail footprint
to provide an opportunity for
customers to make Christmas
brighter for others, through
direct and practical giving.
In 2023, the Appeal Christmas
trees were made from recycled
materials, and Target launched
a range of sustainable Christmas
gift wrapping paper and tags,
made from recycled content
and fully recyclable.
Wesfarmers 2024 Annual Report
34
Operating and financial review | Kmart Group
Representation of Indigenous team
members in leadership roles is 1.6 per cent
(74 team members), an increase from
1.4 per cent (65 team members) in 2023.
The division continued its focus on building
cultural competence with 15,750 instances
of cultural awareness training completed
during the year.
Team members identifying with
a disability increased from 1.3 per cent
(551 team members) to 2.0 per cent
(823 team members). Kmart Group
appointed a Workplace Adjustment
Advisor and launched a Workplace
Adjustment Policy to provide improved
accessibility for team members with a
disability. Kmart Group is one of four
participating businesses in the Australian
Government’s career pathways pilot
for people with disability.
Kmart Group continued its Welcome
Here program, which provides team
members and leaders with LGBTQIA+
awareness training, resources and the
opportunity to wear allyship and
pronoun stickers. Participating stores
increased from 14 last year to 60
this year.
Community
Kmart Group strives to create positive
change in the communities in which
it operates, in collaboration with its team
members, customers and partners.
The group’s community programs are
diverse, and focus on supporting families
in need across Australia and New
Zealand. National community partners
include The Salvation Army (Australia
and New Zealand), Smiling Minds,
Reach Foundation and Australian
Childhood Foundation.
Visit our website to read more:
wesfarmers.com.au/sustainability
reduction in TRIFR
12.2%
of ‘at work’ Australian workforce
identifies as Aboriginal and Torres
Strait Islander
4.8%
Sustainable
redesign
of Kmart’s
best-selling
product, the
bubble wand
In 2023, Kmart re-designed its
best-selling product, the Mega
Bubble Wand, making it more
sustainable without increasing
the price.
Working directly with manufacturing
partners, Kmart’s product team
introduced changes to re-design
the wand and re-specify raw
materials used.
The team reduced the amount
of plastic and increased the size of
components, to meet requirements
of sorting meshes at recycling
facilities. The wand body is now
made from recycled content that
is kerbside recyclable, and it is
transparent because opaque
colours cause contamination,
which limits recyclability.
The re-design was made possible
by Kmart’s scale and integrated
supply chain, which extends from
in-house design to direct supplier
relationships.
This year, Kmart Group contributed
more than $10 million to its community
partners, through direct and indirect
contributions.
Over the Christmas period, the Kmart
Wishing Tree Appeal raised $7.9 million,
collecting over 345,000 gifts and raised
more than $500,000 in gift vouchers
across Australia and New Zealand,
helping The Salvation Army support
families in need, up 24 per cent on the
prior year.
More than $300,000 has been raised
this year for Target’s community partner,
the Australian Childhood Foundation,
with funds raised supporting their Bringing
Up Great Kids program, which focuses
on providing education and resources
to parents in need.
increase in direct and indirect
community contributions
18.0%
Operating and
financial review
Wesfarmers 2024 Annual Report
35
Kmart Group
Chemicals,
Energy and
Fertilisers
Our business
WesCEF manages a portfolio of nine businesses in Australia across
the chemicals, energy, fertilisers and lithium sectors with a shared
services model that supports businesses across the portfolio.
Chemicals includes:
−
CSBP Chemicals, which manufactures and supplies ammonia,
ammonium nitrate and industrial chemicals
−
Australian Gold Reagents (AGR), CSBP’s 75 per cent owned
joint venture with Coogee Chemicals, which manufactures
and supplies sodium cyanide
−
Queensland Nitrates (QNP), CSBP’s 50 per cent owned joint
venture with Dyno Nobel Asia Pacific, which manufactures
and supplies ammonium nitrate
−
Australian Vinyls, which supplies PVC resin and specialty
chemicals
−
ModWood, which manufactures wood-plastic composite
decking and screening products.
Energy includes:
−
Kleenheat, which extracts liquefied petroleum gas
(LPG) from natural gas and distributes bulk and
bottled LPG. Kleenheat is also a retailer of natural
gas to residential and commercial markets
−
EVOL LNG, which distributes bulk liquefied
natural gas (LNG).
CSBP Fertilisers manufactures, imports and
distributes fertilisers for the Western Australian
agricultural sector.
Covalent Lithium, Wesfarmers’ 50 per cent
owned joint venture with Socíedad Quimica y
Minera (SQM), is progressing with the
development of the Covalent lithium project.
Once complete, the operation will include
a lithium hydroxide refinery at Kwinana,
Western Australia, alongside the
recently commissioned mine and
concentrator, which is currently
producing spodumene
concentrate at Mt Holland.
Operating and financial review | Chemicals, Energy and Fertilisers
Revenue for WesCEF of $2,747 million
decreased 16.9 per cent on the prior year,
and earnings decreased 34.2 per cent to
$440 million. The decline in revenue and
earnings for the period was largely driven by
lower global commodity prices, particularly
for ammonia and associated products,
but operating performance was strong
with good plant production rates.
WesCEF’s TRIFR improved to 2.7
and as at the end of the year, there
had not been a lost time injury for
17 consecutive months.
Greenhouse gas emissions for the year
decreased marginally due to operational
improvement initiatives and were
12.8 per cent below the 2020 baseline.
During the year, a decision was made to
install a tertiary abatement catalyst in one
of CSBP’s three nitric acid plants during its
planned shutdown in the 2025 financial year,
with pre-feasibility studies for the remaining
two plants also recently completed.
Chemicals’ earnings will continue to
be dependent on global ammonia pricing
and the associated impact from the
pass-through mechanisms in some
customer contracts. Ammonium Nitrate
(AN) earnings are anticipated to benefit
from a favourable sales mix supported by
greater demand from Western Australian
mining customers. The positive outlook
for the gold mining sector is expected
to underpin strong demand for sodium
cyanide over the long term.
Both Chemicals and Kleenheat earnings
will continue to be impacted by higher
Western Australian natural gas costs as
more gas supply contracts are renewed.
In the Fertilisers business, normalised
global commodity prices are expected
to support grower confidence.
The successful development of the Kwinana
lithium hydroxide refinery is expected to
generate satisfactory returns over the long
term given the attractive cost structure
Revenue
Earnings before tax
Highlights and outlook
Ian Hansen
Managing Director
Wesfarmers Chemicals,
Energy & Fertilisers
2024
2,747
2023
3,306
2022
3,041
2021
2,146
2020
2,085
2024
440
2023
669
2022
540
2021
384
2020
394
$2,747m
$440m
of the project and the improved margin
available from value-added production.
Covalent is expected to complete construction
and commissioning of the refinery with
first product in mid-calendar year 2025.
Sales of lithium hydroxide are expected
to commence in the 2026 financial year
as production volumes ramp up and after
satisfactory product qualification with
customers. Expectations for capital
expenditure remain in line with prior guidance.
WesCEF’s share of spodumene concentrate
production in the 2025 financial year is
expected to be between 150,000 and
170,000 tonnes, and decisions on the level
of sales will have regard to the prevailing
market price and the capacity for stockpiling
to support the future needs of the refinery.
At current market prices and due to the
higher cost of production during ramp
up, the sale of spodumene concentrate
is expected to be loss making in the first
half of the 2025 financial year.
Good progress continued on major
growth projects, and WesCEF’s net zero
roadmap continues to advance through
investment in decarbonisation initiatives
and the investigation of long-term
abatement solutions.
Overall, earnings for WesCEF will remain
subject to global commodity prices,
exchange rates, competitive factors
and seasonal outcomes.
Operating and
financial review
Wesfarmers 2024 Annual Report
37
Chemicals, Energy
and Fertilisers
WesCEF’s vision is to grow a portfolio of
leading, sustainable businesses. WesCEF
has a high-quality portfolio of assets and
seeks to grow these 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 project management capabilities
of its people.
WesCEF’s 2050 net zero Scope 1 and
Scope 2 emissions target is a strategic
focus for the business. Refer to page 40
for details and progress.
Safe Person, Safe Process,
Safe Place
WesCEF remains committed to
identifying opportunities to improve safety
for its team members, contractors,
customers, community and environment.
WesCEF’s prioritisation of safety through
comprehensive risk management programs
and the continuing commitment to our Safe
Person, Safe Process, Safe Place culture
has resulted in an improvement in TRIFR
to 2.7 and no lost time injuries recorded
over the last 17 months. Refer to page 40
for further details.
Enhance our reputation
WesCEF undertakes ongoing reviews
of high-risk suppliers in line with its ethical
sourcing program. The division is also
proud of its contribution to community
through partnerships and grants focusing
on Indigenous, youth, science, technology,
engineering and mathematics (STEM)
education and environmental initiatives.
Furthermore, an enhanced cyber risk
management and data governance
framework is also in development to
ensure the security of customer, team
member and supplier information.
Investing for growth
WesCEF has a strong pipeline of major
projects, which includes production
capacity expansions to capitalise on
growing markets. Good progress
continued to be made on these growth
projects, including a final investment
decision to debottleneck the first of
CSBP’s three nitric acid plants, which is
scheduled for the second half of financial
year 2025. Regulatory applications for
environmental approval were also
Our strategy
Operating and financial review | Chemicals, Energy and Fertilisers
First
spodumene
concentrate
shipment
Covalent Lithium (Covalent),
WesCEF’s joint venture with
Sociedad Química y Minera de Chile
(SQM), marked a major milestone this
financial year, with commissioning
of the concentrator and production
of spodumene concentrate
(concentrate) commencing
at the Mt Holland site.
The Covalent project is a unique
partnership, establishing a fully
integrated mine, concentrator
and refinery in Western Australia.
Covalent will produce lithium product
with strong environmental, social and
governance credentials, consistent
with customer expectations.
With the Mt Holland mine and
concentrator officially opened
in March 2024, Covalent is now
focused on finalising construction
and commissioning of the
Kwinana refinery.
The refinery will give Covalent the
ability to process concentrate locally
in Western Australia, producing
battery-grade lithium hydroxide for
the global electric vehicle market.
The refinery is expected to produce
up to 50,000 tonnes of lithium
hydroxide annually – enough to
support the manufacture of more
than one million electric vehicles
each year.
WesCEF is well positioned to supply
international markets and assist in
the global transition to a clean energy
future through its investment
in Covalent.
WesCEF and SQM each market
and sell their share of Covalent
production, with WesCEF exporting
its first shipment of concentrate in
March 2024. This concentrate will
be processed overseas. When the
refinery is commissioned, WesCEF
and SQM will each market lithium
hydroxide separately.
submitted to expand sodium cyanide
production capacity, with detailed
engineering design work in progress.
Construction of the Covalent lithium
refinery at Kwinana continued to progress,
with Covalent submitting regulatory
applications during the year to double the
production capacity of the Mt Holland
lithium mine and concentrator. A potential
expansion of the refinery will be
considered following commissioning.
Maintain world-class
performance
WesCEF remains committed to its pursuit
of operational excellence and maintaining
its world-class performance through ongoing
continuous improvement and incremental
productivity initiatives, and the embedding
of a cost optimising culture across the
division. Plant availability continues to remain
strong and is a core part of WesCEF’s
operating culture, which is focused on
maintaining robust asset management plans
and optimising shutdown scheduling.
Wesfarmers 2024 Annual Report
38
Year in review
Key financial indicators (year ended 30 June)
2024
2023
Revenue ($m)
2,747
3,306
Earnings before tax ($m)
440
669
Capital employed ($m) R12
3,292
3,091
Return on capital employed (%) R12
13.4
21.6
Cash capital expenditure ($m)
447
518
Sustainability results
2024
2023
Total recordable injury frequency rate (TRIFR)1 R12
2.7
3.8
Aboriginal and Torres Strait Islander team members
53
50
Scope 1 and Scope 2 (market-based) emissions (ktCO2e)
833.5
849.5
Operational waste diverted from landfill (%)
90.1
87.4
Community contributions ($m)
0.7
0.7
Sites in the ethical sourcing program that were monitored (%)2
92
75
consecutive months in
which WesCEF has not had
a lost time injury
17
Chemicals’ earnings decreased
significantly on the prior year. Ammonia
earnings were substantially impacted by
lower average global ammonia pricing
and higher Western Australian domestic
natural gas costs compared to the prior
year. This was partially offset by a
favourable impact in the second half from
the pricing lag mechanism embedded
in some customer contracts, as the
ammonia price rose in the first half.
AN earnings were impacted by higher
ammonia feedstock costs coupled with
weaker demand from Western Australian
mining customers, partially offset by sales
into other markets. Earnings in Sodium
Cyanide were broadly in line with the
prior year.
Kleenheat’s earnings declined on the
prior year, driven by higher Western
Australian domestic natural gas costs and
a lower Saudi Contract Price. On 30 May
2024, WesCEF announced the sale of
its LPG and LNG distribution businesses
to Supagas and Clean Energy Fuels
Australia respectively. The sales are
independent of one another and each
is subject to certain consents
and approvals.
Fertilisers' earnings decreased on the
prior year, affected by declining global
commodity prices in a competitive
market environment, which resulted in
compressed margins. The impact was
partially offset by stronger sales volumes
due to later 2023 seeding season.
The WesCEF result includes its
50 per cent interest in the Covalent
lithium project. Good progress continued
on construction of the Kwinana lithium
hydroxide refinery, which was
approximately 80 per cent complete
as at the end of the year.
Following the commissioning of the
Mt Holland concentrator in the first half,
operations are now in ramp up with
WesCEF’s share of spodumene
concentrate production totalling
approximately 55,000 tonnes for the
year, exceeding the guidance provided
at the 2024 half-year results.
WesCEF completed two spodumene
concentrate export shipments totalling
approximately 20,000 tonnes during
the second half. Due to subdued
market pricing and the higher unit
cost of production as volumes ramp
up, WesCEF’s lithium business contributed
a loss of $26 million for the 2024 financial
year. This includes WeCEF’s share of
Covalent corporate and overhead costs.
WesCEF’s share of capital expenditure,
excluding capitalised interest, for the
development of the project was
$250 million during the year, taking
development expenditure, excluding
capitalised interest, since the final
investment decision to $978 million.
WesCEF’s share of expected capital
expenditure for the overall project remains
in line with the guidance provided at the
2023 half-year results.
1
TRIFR measures the number of lost time and medical treatment injuries per million hours worked.
2
Ethical sourcing data for the 12 months to 15 June 2024.
tonnes of spodumene
concentrate sold in the
second half
20,000
Operating and
financial review
Wesfarmers 2024 Annual Report
39
Chemicals, Energy
and Fertilisers
Operating and financial review | Chemicals, Energy and Fertilisers
hazard facilities, manufactures and
distributes a range of products, including
dangerous goods, handles corrosive
chemicals and relies on heavy vehicle
distribution of materials. If the controls
established to manage HiPo risks are
insufficient or ineffective and an event
occurs, it is classified as a HiPo incident.
This year, WesCEF’s TRIFR was 2.7
compared to 3.8 last year, and there
were 18 HiPo incidents compared
to 26 in the previous year.
WesCEF aims to eliminate HiPo
incidents through proactive safety
measures, such as having team
members complete Critical Control (CC)
checklists before commencing high-risk
tasks. Examples of the 63 CCs include
decontamination practices and vehicle
pre-start inspections.
In April 2024, WesCEF trialled a
Critical Control Verification Program
(CCVP) to examine the systems
supporting each CC, such as whether
training records are up-to-date or
personal protective equipment is
adequate for the task. The CCVP
will be rolled out across WesCEF
in the 2025 financial year.
The introduction of positive duties
in Western Australia’s Work Health
and Safety (General) Regulations 2022
provided WesCEF with an opportunity
to revisit its measures to prevent or
minimise psychosocial injury. This year,
WesCEF reviewed its psychosocial risk
assessment and added further controls
and actions, including implementing
the WesCEF Respectful Workplaces
Action Plan.
Nature
The supply of water and management
of wastewater is a business-critical
requirement for WesCEF at CSBP’s
Kwinana site in Western Australia. The
effective management of water availability
and reliability, as well as wastewater
treatment options, has the potential to
lower costs and increase environmental
compliance, plant reliability and business
growth opportunities.
Introduced in 2023, a pilot groundwater
system at CSBP Kwinana removed
approximately 950 kilograms of nitrogen
from contaminated groundwater this year.
Extracted groundwater is treated through
the site’s nitrogen removal wetlands.
Learnings from the pilot will be
incorporated into the development
of an ongoing remediation program.
Year in review
Carbon Credit Units. Additionally, a
$33 million grant was awarded by the
Australian Government to implement the
same technology, including associated
plant modifications, for the remaining two
nitric acid plants. Implementation across
all three plants is anticipated by the end
of the 2028 financial year.
While the technologies that underpin its
2030 interim target are well established,
there is greater uncertainty around the
optimal combination of technology that
will be deployed from 2030 onwards
to support WesCEF’s 2050 net zero
Scope 1 and Scope 2 target. In setting
its 2050 net zero target and roadmap,
WesCEF assumed that low-emissions
technologies and emerging solutions,
such as carbon capture, utilisation and
storage (CCUS), will advance and
become commercially viable and operate
at scale, well before 2050. WesCEF also
assumes that government policy will
remain supportive of climate action and
technologies required to decarbonise.
The assumptions underpinning WesCEF’s
targets will be regularly tested to ensure
they are reasonable.
This year, WesCEF continued to progress
its pathway beyond 2030, with a focus
on partnerships and government
engagement. Studies continued into
low-emissions ammonia solutions,
including a carbon capture and storage
project in conjunction with Mitsui E&P
Australia. A successful carbon dioxide
injection test was completed by partner,
Mitsui E&P Australia, at its proposed
carbon storage facility in Dongara,
Western Australia and this project
is now preparing for front-end
engineering design.
Further details on WesCEF's targets,
performance and partnerships can
be found from page 77.
Health, safety and
wellbeing
WesCEF strives to minimise risks inherent
in its operations and prioritise the safety
and wellbeing of team members, assets
and neighbouring communities, by
focusing on operating safely and the
continual monitoring and adjustment
of processes and procedures.
WesCEF’s operations present various
high potential (HiPo) risks that cannot
be eliminated. For example, WesCEF
operates sites classified as major
Climate change resilience
WesCEF continued to progress
abatement projects underpinning its
interim target of a 30 per cent reduction
in Scope 1 and Scope 2 emissions by
2030 relative to a 2020 baseline.
During the year, a final investment
decision was made to implement tertiary
catalytic abatement in one of CSBP
Kwinana’s three nitric acid plants to
reduce nitrous oxide emissions. This
project is supported by a $500,000
Carbon Innovation Grant from the
Western Australian Government and
is registered to generate Australian
website.com
10 years
of safety
An injury to a person can have
a ripple effect that impacts family,
friends, and colleagues. That is
how WesCEF shone the spotlight
on safety this financial year, as
it celebrated 10 years of its
Safe Person, Safe Process,
Safe Place program.
Team members joined a series
of circles to represent family,
friends, and colleagues that would
be impacted if a person were
injured at work, to create a sense
of the large number of people
affected through a ripple effect.
WesCEF continues to focus on
improving safety communications
and driving better safety
performance across the division.
It asks everyone to consider
whether they are being a safe
person, using a safe process,
and creating a safe place.
Wesfarmers 2024 Annual Report
40
WesCEF continues to support the
Western Australian Government’s Water
Corporation’s Kwinana Water Recycling
Plant expansion and confirmed an
increased water allocation, with plans
to use the recycled water for current and
future operational requirements. This will
help reduce CSBP Kwinana’s reliance
on existing groundwater sources.
Diversity and inclusion
In November 2023, WesCEF refreshed
its Diversity, Equity, Inclusion and
Belonging strategy along with a number
of additional support initiatives. These
included paid parental leave provisions,
introducing a return-to-work bonus for
primary carers and increasing the amount
of lifestyle leave available for employees
with caring responsibilities. WesCEF
also commenced a trial allowing team
members to substitute a public holiday
for religious or cultural beliefs.
The representation of women across
WesCEF's workforce increased from
36.8 per cent to 37.9 per cent this year.
WesCEF introduced two key programs
this year, to support its focus on
Aboriginal and Torres Strait Islander
representation. New Aboriginal employee
recruitment guidelines were developed
and implemented and a two-day
Aboriginal mental health first aid
workshop was introduced, aimed
at enabling team members to support
their Indigenous colleagues.
Visit our website to read more:
wesfarmers.com.au/sustainability
spend with Indigenous suppliers
$5.2m
Aboriginal
Procurement
Working
Group
WesCEF recognises the importance
of engaging with Aboriginal and
Torres Strait Islander suppliers to
positively impact the Indigenous
communities in which it operates.
This year, WesCEF more than
doubled its spend on Indigenous
suppliers to $5.2 million up from
$1.8 million in the previous financial
year across 28 suppliers.
This growth continues the trend
seen over the last few years and
is a result of the committed focus
and effort by WesCEF to implement
its Aboriginal Procurement Business
Plan, introduced in 2022.
The plan outlines a dedicated
strategy to support Indigenous
supplier diversity and provide the
opportunity for Indigenous
businesses to participate in
WesCEF’s supply chain.
As part of this plan, WesCEF
has established an Aboriginal
Procurement Group and Steering
Committee. Comprised of 21 team
members from across the division,
the Group is focused on advancing
Indigenous procurement initiatives
to engage and increase WesCEF’s
spend and employment
opportunities with Indigenous
businesses.
Ethical sourcing
WesCEF sources a diverse range of raw
materials and finished products, such
as chemicals, fertilisers and natural gas.
WesCEF is committed to enhancing supply
chain integrity to prevent worker exploitation.
The total number of high-risk suppliers
included in WesCEF’s 2024 financial year
ethical sourcing program increased to
53 from 25 in the previous year, due to
a more rigorous assessment that reflects
WesCEF’s increased awareness and
focus on its supply chain risks. Monitoring
activities, such as self-assessment
questionnaires (SAQs) and physical
audits, were completed for 92 per cent
of these suppliers, an increase from
84 per cent last year.
WesCEF’s ethical sourcing risk
assessment process identifies high-risk
suppliers. These suppliers submit
evidence of a recent social audit
or complete the WesCEF SAQs. WesCEF
and its ethical sourcing advisor assess
supplier responses to determine if any
further action, such as a physical audit,
is warranted. The program facilitates the
management of non-conformances
through a Remediation Action Plan.
WesCEF continues to educate its team
members on modern slavery risks, with
64 team members trained or retrained
during the year.
GHG emissions were 12.8%
below the 2020 baseline
12.8%
Operating and
financial review
Wesfarmers 2024 Annual Report
41
Chemicals, Energy
and Fertilisers
Officeworks
Operating and financial review | Officeworks
Our business
Officeworks is a leading retailer of technology,
stationery, furniture, art supplies and learning
and development resources, with around 40,000
products available online and instore as well as
services like Print & Create, and Geeks2U.
The products and services at Officeworks
provide solutions to address changing customer
needs and inspire Australians to work, learn,
create and connect. Its customers include
households, students, small, medium and
large-sized businesses, schools and early
learning centres, and government.
Officeworks’ offering is strengthened by
its everyday low price credentials, supported
by its price beat guarantee, widest range and
best experience. Irrespective of how customers
choose to shop, Officeworks is committed
to providing customers with easy, engaging,
personalised omnichannel experiences,
including instore, online, via a national
call centre or through the support
of business specialists.
Officeworks is focused on the safety,
health, wellbeing and career progression
of approximately 9,000 team members.
Aboriginal and Torres Strait Islander
employment in Officeworks is at
three per cent of its Australian workforce.
Officeworks is committed to ensuring
the long-term sustainability of the
business, including 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.
Revenue
Earnings before tax
Highlights and outlook
Officeworks’ revenue increased
2.3 per cent for the year to $3,434 million.
Earnings of $208 million were 4.0 per cent
higher than the prior year.
The safety, health and wellbeing of team
members and customers remain a priority
for Officeworks, and continued investment
in team member safety supported an
improvement in TRIFR to 5.1 for the year.
During the year, Officeworks reduced its
Scope 1 and Scope 2 (market-based)
emissions by 7.7 per cent to 25.0 ktCO2e
and accelerated its plans to source
100 per cent renewable electricity by
the end of calendar year 2025.
Officeworks’ sales growth was supported
by strong Black Friday and End of
Financial Year trading, and solid sales
growth during the Back-to-School period
as Officeworks cycled the New South
Wales Government’s back-to-school
voucher program last year. Sales were
also driven by above-market growth in
technology as Officeworks continues to
evolve the offering, and growth across
other key categories, including stationery,
art, education and Print & Create.
The pleasing earnings growth result
was supported by sales growth and
the realisation of benefits from recent
investments to drive productivity, along
with disciplined cost management.
Officeworks’ leading online offer, which
includes options such as next-day,
same-day and two-hour delivery and
two-hour Click & Collect, continued
to support strong online sales and an
improved customer experience.
Officeworks’ widest range, low prices,
best experience and well-established
every-channel offer make it well
positioned to support value-conscious
personal and business customers in the
current environment.
The business will evolve its offer by
broadening the technology range through
new products and services, accelerating
business-to-business (B2B) growth and
leveraging data and loyalty programs
to improve the customer experience.
In the 2025 financial year, Officeworks
is expected to launch its new business
loyalty program, Officeworks for Business,
incorporating a new B2B digital
experience and a range of new benefits
for business customers.
To mitigate cost of doing business
pressures, Officeworks is improving
productivity through the use of technology
and investments to leverage data insights.
Sarah Hunter
Managing Director
Officeworks
2024
3,434
2023
3,357
2022
3,169
2021
3,029
2020
2,787
2024
208
2023
200
2022
181
2021
212
2020
197
$3,434m
$208m
Operating and
financial review
Wesfarmers 2024 Annual Report
43
Officeworks
Year in review
Officeworks is committed to delivering
sustainable long-term growth for
shareholders by capitalising on shifting
customer preferences as technology
advances and digitisation changes how
Australians work, learn, create and connect.
The division continues to leverage its
every-channel experience, breadth of
range and data-driven personalisation
to enable a differentiated experience.
Officeworks will continue to drive profitable
growth and productivity by executing its
strategy, centered around the following
three key areas.
Evolving the offer across
categories, customers and
channels
Officeworks has a strong track record
of evolving its offer to meet the changing
needs of business-to-consumer and
B2B customers.
The division is evolving its technology
offer to accelerate growth with new
categories, such as Next Gen AI
computing, accessories and digital
displays. Officeworks is also evolving its
stationery, art and education, furniture
and Print & Create offers, with expanded
private label and exclusive brands, and
the growth of personalised products.
Officeworks continues to expand its store
network and is leveraging data and loyalty
programs to deliver a differentiated
omnichannel customer experience.
Accelerating B2B growth
Officeworks is expanding its B2B range,
scaling its education offer and enhancing
the digital experience for its B2B
customers. For example, Officeworks
is expected to launch its new business
loyalty program, Officeworks for Business,
offering a range of benefits for loyal B2B
customers. The division continues to
invest in its range of educational products
and platforms to provide customers with
value and choice.
Modernising and
simplifying the business
Officeworks remains focused on driving
productivity and efficiency. Initiatives such
as automated fulfilment centres, Print
& Create self-service and actions to
optimise team member labour cost and
efficiency are delivering benefits, with
further opportunities such as demand and
replenishment transformation and supply
chain modernisation in the pipeline.
Our strategy
1
TRIFR measures the number of lost time and medical treatment injuries per million hours worked.
2
Ethical sourcing data for the 12 months to 15 June 2024.
Key financial indicators (year ended 30 June)
2024
2023
Revenue ($m)
3,434
3,357
Earnings before tax ($m)
208
200
Capital employed ($m) R12
1,114
1,092
Return on capital employed (%) R12
18.7
18.3
Cash capital expenditure ($m)
64
71
Sustainability results
2024
2023
Total recordable injury frequency rate (TRIFR)1 R12
5.1
5.4
Aboriginal and Torres Strait Islander team members
271
302
Scope 1 and Scope 2 (market-based) emissions (ktCO2e)
25.0
27.1
Operational waste diverted from landfill (%)
87.3
87.8
Community contributions ($m)
5.3
6.0
Sites in the ethical sourcing program that were monitored (%)2
41
50
Officeworks’ revenue increased
2.3 per cent to $3,434 million and
earnings increased 4.0 per cent to
$208 million for the year.
Sales growth of 2.3 per cent was
supported by growth across key
categories, including technology,
stationery, art, education and Print
& Create, partially offset by lower
furniture sales. Officeworks benefited
from above-market growth in technology
as it continues to evolve the offering.
The sales result also reflected strong
Black Friday and End of Financial Year
trading, and solid sales growth during
the Back‑to‑School period as Officeworks
cycled the New South Wales
Government’s back-to-school
voucher program last year.
Officeworks continued to invest in
everyday low prices and value for
customers, by expanding its private label
ranges this year. Enhanced delivery
options for Officeworks' every-channel
offer supported online sales growth and
an improved customer experience.
Pleasing earnings growth of 4.0 per cent
for the period was supported by sales
growth, productivity initiatives and
disciplined cost management, which
mitigated the impacts of ongoing cost
of doing business pressures.
Officeworks continued to invest to
modernise its operations, including
through the increased use of technology
in the support centre, stores and supply
chain. The business delivered productivity
improvements at the Import Distribution
Centre and automated Customer
Fulfilment Centre (CFC) in Victoria,
and the new automated CFC in
Western Australia that was opened
during the year.
Officeworks expanded its store network
with five net new stores during the year.
As at 30 June 2024, there were 171
Officeworks stores across Australia.
Circularity and waste
Officeworks is helping reduce the impacts
of climate change and biodiversity loss.
It supports the transition to a more circular
economy, by implementing considerate
design values, using regenerative
materials and keeping products in use
for longer through repair, reuse and
recycling initiatives.
In 2024, Officeworks repaired and
resold 235 tonnes of damaged items
in partnership with Circonomy, up
391 per cent from 2023, diverting
products in stores and distribution
centres that would otherwise have
gone to landfill.
Wesfarmers 2024 Annual Report
44
Operating and financial review | Officeworks
Indigenous
engagement
As part of its commitment to the
economic advancement of
Australia’s First People, Officeworks
has partnered with Aboriginal-
owned private brand, Cultural
Choice, since 2020.
Purchases from Cultural Choice
have increased from less than
$40,000 in its inaugural year to
more than $500,000 in 2024.
Cultural Choice received a $100,000
grant and prepayment from
Wesfarmers’ Building Outstanding
Aboriginal Businesses (BOAB)
Fund in 2020 to support the
purchase of plant and equipment,
and new product development.
The BOAB Fund provides financial
and other assistance, including
business mentoring to Aboriginal
and Torres Strait Islander
enterprises, to support their growth.
Today, Cultural Choice products
resonate well with personal
and business customers, with
Officeworks ranging more than
20 Cultural Choice products
across hygiene, washroom and
stationery categories.
Visit our website to read more:
wesfarmers.com.au/sustainability
Officeworks expanded its Bring it Back
program to trial school stationery supplies
in select locations in partnership with
Stationery Aid, which collected and
repurposed 32 kilograms of stationery
items for disadvantaged students.
Additionally, its Trade In initiative with
circularity partner, Moorup, extended
the life of valuable technology devices,
keeping 4,753 products in use for longer
in 2024. Total operational waste to landfill
increased by 0.7 per cent.
Climate change
Officeworks’ approach to reducing
emissions is informed by its net zero
2030 Scope 1 and Scope 2 target and
100 per cent renewable electricity target
by the end of calendar year 2025,
outlined in its People and Planet
Positive 2025 Plan.1
Officeworks continues to reduce its
emissions and transition to 100 per cent
renewable energy by procuring renewable
electricity, installing rooftop solar,
upgrading its lighting with more efficient
LEDs and installing building energy
management systems.
In 2024, Officeworks’ Scope 1 and
Scope 2 (market-based) emissions were
49.1 per cent below its 2018 baseline.
To date, Officeworks has contracted
more than 74.0 per cent of its renewable
electricity needs to commence in
January 2025.
Biodiversity loss
Officeworks recognises the importance of
biodiversity in sustaining vital ecosystems.
Since 2017, in partnership with
Greening Australia, Officeworks has
planted 1.5 million plants and restored
1,990 hectares of land across the country.
In 2024, Officeworks’ planting efforts
focused on revitalising habitat by planting
native species and rehabilitating critically
endangered vegetation.
Ethical sourcing and
human rights
Officeworks is committed to upholding
and respecting human rights within its
supply chain.
All Officeworks suppliers must adhere to
its Ethical Sourcing and Modern Slavery
Policy, which outlines minimum standards
required to work with the business.
reduction in TRIFR
5.6%
reduction in Scope 1 and Scope 2
(market-based) emissions
7.7%
Factories producing own-brand products
and local suppliers that are unable to
demonstrate a robust ethical sourcing
program in place, are required to disclose
the manufacturing sites of their products,
complete a Sedex self-assessment and
an independent audit when requested.
During the reporting period, Officeworks
focused on high-risk areas, including
subcontracting, conflict minerals and
Tier 2 suppliers.
This year, to focus on Tier 2 suppliers
(suppliers that Officeworks does not have
a direct relationship with), Officeworks
refreshed its service provider questionnaire
to include subcontracting with the aim of
better targeting indicators of forced labour.
The audit program was extended to
include four Tier 2 suppliers.
In 2024, 26,849 products were mapped
to the manufacturing site and 499 audits
were reviewed across 285 suppliers
in the ethical sourcing program, down
20 per cent on the number of audits
reviewed in the prior year.
1
For more information visit officeworks.com.au/information/about-us/peopleandplanet
Operating and
financial review
Wesfarmers 2024 Annual Report
45
Officeworks
Operating and financial review | Industrial and Safety
Our business
Industrial
and Safety
The Industrial and Safety portfolio of businesses
services customers across diverse industries,
such as mining and resources, manufacturing,
construction, retail, food and beverage, utilities,
transport, facilities maintenance, health and
government. The businesses service a wide range
of customer groups, including large corporate
enterprises, government organisations and small-
to medium-sized businesses.
Industrial and Safety operates three main businesses:
Blackwoods, Workwear Group and Coregas, and
employs approximately 3,700 team members.
Blackwoods is the largest business in terms
of revenue and is a distributor of tools, workplace
safety and personal protective equipment, workwear
and 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.
It includes the trading businesses Blackwoods,
NZ Safety Blackwoods, Bullivants and Cm3.
Workwear Group is a leading workwear
solutions provider, featuring industrial
workwear brands Hard Yakka and King Gee.
Workwear Group supplies bespoke and
catalogue uniforms to large organisations
in professional services, health, industrial
and emergency services segments
through its NNT and Workwear Group
Uniforms brands.
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.
Highlights and outlook
Revenue
Earnings before tax
2024
2,022
2023
1,992
2022
1,925
2021
1,855
2020
1,745
2024
109
2023
100
2022
92
2021
70
20201
39
$2,022m
$109m
1
2020 earnings before tax excludes pre-tax impairments of $310 million and includes $15 million
of payroll remediation costs.
Industrial and Safety revenue of
$2,022 million was 1.5 per cent above
the prior year. Earnings of $109 million
were 9.0 per cent above the prior year.
Industrial and Safety’s results were
supported by sales growth in Blackwoods
and Coregas. At Blackwoods, sales
growth was supported by demand from
strategic customers in Australia, while
at Coregas, sales growth was driven
by higher demand from major customers,
particularly in the mining, industrial, oil
and gas and healthcare segments.
Earnings increased in Blackwoods
and Coregas, while Workwear Group’s
earnings were below the prior year due
to higher domestic supply chain costs and
the impact of a weaker Australian dollar.
Industrial and Safety has made positive
progress against its sustainability
commitments. The key safety measure,
TRIFR, reduced on the prior year to 1.8,
continuing its long-term positive trend.
Pleasingly, this year there were zero
own-brand product recalls.
Waste-reducing packaging changes,
increased adoption of renewable energy
and other initiatives supported the
reduction of Scope 1 and Scope 2
(market-based) emissions by 1.8 per cent
and continued to build the division’s
resilience to climate change. Beyond the
division’s own emissions reduction efforts,
Coregas is increasingly supporting its
customers’ decarbonisation activities.
Trading conditions are expected to
become more challenging in the 2025
financial year. The demand outlook for
Industrial and Safety is dependent on
overall economic conditions, business
confidence and investment, and
commodity prices.
The Industrial and Safety businesses
will continue to actively manage supply
chain volatility, cost inflation and labour
availability constraints while working with
customers to better meet their needs.
Each business remains focused on
delivering continued improvements
in performance in this environment.
Blackwoods is focused on strengthening
its customer value proposition and
enhancing core operational capabilities,
including through the increased use of
data and digital tools and executing
productivity and efficiency initiatives.
Workwear Group remains focused on
driving growth in its industrial brands and
uniforms business, improving operational
excellence and strengthening its digital
offer. The business will continue to focus
on productivity and competitiveness.
Coregas is expected to benefit from
continued strong demand in the
healthcare and industrial segments.
The business continues to invest
in its supply chain, digital projects
and production capacity to service
customer growth.
Tim Bult
Managing Director
Wesfarmers Industrial and Safety
Operating and
financial review
Wesfarmers 2024 Annual Report
47
Industrial and
Safety
Year in review
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,
e-commerce, product and service
capabilities and cost improvement
initiatives aimed to deepen customer
relationships while improving operating
efficiencies. Coregas is focused on
profitably growing market share,
enhancing its product offer and supporting
industry decarbonisation efforts.
Blackwoods
Over the year, Blackwoods made progress
on its strategic initiatives, including
strengthening relationships with strategic
customers, improving customer experience
through enhanced digital offerings and
leveraging the recently deployed enterprise
resource planning (ERP) system to deliver
improvements in order fulfilment, demand
forecasting and planning.
Blackwoods aims to enhance the
customer value proposition through its
unbeatable range, reliability, expertise
and ease of doing business.
Workwear Group
Over the year, Workwear Group
strengthened the market position
of its industrial brands through product
innovation and improved service levels
and brand desirability. The business
continues to invest in digital transformation
and during the year it deployed a new
e-commerce platform, with the rollout
expected to be completed in 2025.
The platform aims to enhance the
customer offer and simplify the business.
Coregas
Coregas continued to grow and increase
market share with major customers by
developing tailored solutions to meet their
needs. This is underpinned by Coregas’
agility, technical innovation, speed to
execute, reliability of supply and quality
control. The business leveraged its
expertise in hydrogen across several
opportunities, including the heavy-vehicle
hydrogen refueling stations now
operational at Port Kembla, New South
Wales and Auckland, New Zealand.
Coregas continues to invest in
production capacity, supply chain and
digital projects, including an ERP system
upgrade. The business is focused on
supporting customers’ increasing
decarbonisation efforts, which is
expected to drive additional growth.
Our strategy
1
TRIFR measures the number of lost time and medical treatment injuries per million hours worked.
2
Ethical sourcing data for the 12 months to 31 May 2024.
Key financial indicators (year ended 30 June)
2024
2023
Revenue ($m)
2,022
1,992
Earnings before tax ($m)
109
100
Capital employed ($m) R12
1,308
1,257
Return on capital employed (%) R12
8.3
8.0
Cash capital expenditure ($m)
79
73
Sustainability results
2024
2023
Total recordable injury frequency rate (TRIFR)1 R12
1.8
3.3
Aboriginal and Torres Strait Islander team members
102
97
Scope 1 and Scope 2 (market-based) emissions (ktCO2e)
26.7
27.2
Operational waste diverted from landfill (%)
38.6
40.4
Community contributions ($m)
0.6
0.8
Sites in the ethical sourcing program that were monitored (%)2
73
55
Industrial and Safety revenue of
$2,022 million was 1.5 per cent above
the prior year. Earnings of $109 million
were 9.0 per cent above the prior year.
Blackwoods’ revenue increased on the
prior year, with growth underpinned by
demand from strategic customers in
Australia, particularly those in the mining,
utilities, logistics, government and
manufacturing sectors. Sales growth was
recorded across most trading regions in
Australia, while revenues in New Zealand
declined relative to the prior year due
to local market conditions.
Blackwoods’ earnings increased
on the prior year, driven by higher sales.
The business continued to invest in
customer service, digital capabilities and
supply chain operations that provided
benefits to customers and improved
productivity within the business.
Workwear Group’s revenue was in line
with the prior year, with higher customer
demand for the industrial workwear
brands, including KingGee and Hard
Yakka, offset by lower sales in corporate
uniforms. Earnings were below the prior
year due to higher domestic supply chain
costs and the impact of a weaker
Australian dollar.
Coregas’ revenues and earnings
increased on the prior year, driven by
higher demand from major customers,
particularly in the mining, industrial, oil
and gas and healthcare segments.
People and safety
The division maintains a relentless
focus on providing safe workplaces
— measuring safety performance and
driving initiatives to mitigate fatal risk,
prevent injuries and ensure team member
physical and psychological wellbeing.
The division’s TRIFR continued to trend
positively, reducing from 3.3 last year
to 1.8 in 2024. This is evidence of its
commitment and the success of its
wide-ranging safety initiatives, including
the First Aid First program.
The division continued its positive
trends in diversity and inclusion, and
strengthened its internal approach
to reconciliation, which centres
on engagement, employment and
procurement. Representation of women
in senior manager roles has consistently
remained within the division’s target
range at 34 per cent. Aboriginal and
Torres Strait Islander representation within
the Australian workforce increased to
3.5 per cent, up from 3.3 per cent in
the prior year. In NZ Safety Blackwoods,
117 team members identify as either
Maori or Pasifika, making up 20 per cent
of the New Zealand-based workforce.
Wesfarmers 2024 Annual Report
48
Operating and financial review | Industrial and Safety
Visit our website to read more:
wesfarmers.com.au/sustainability
Sustainable
packaging at
Blackwoods
Blackwoods is continuing to
make progress to reduce the
environmental impact of packaging
used in its business.
Blackwoods has undertaken
several packaging waste reduction
initiatives with respect to its
exclusive brand Workhorse since
it began to review and enhance
its packaging footprint in 2020.
As a result, approximately
85 per cent of Workhorse
packaging is now recyclable.
Workhorse has eliminated
multi-coloured polybags, cardboard
backing in shirts, numerous product
information swing tags and
desiccants providing moisture
protection.
Workhorse has partnered with
Micro-Pak® to supply low density
polyethylene polybags made from
100 per cent recycled content with
moisture-controlling properties.
The Workhorse team is continuing
to investigate options and progress
initiatives to further improve its
packaging, including through the
development of a preferred
packaging materials list, to support
the implementation of more
sustainable packaging solutions.
Product safety and quality
Industrial and Safety continues to drive
risk mitigation protocols within its Product
Safety and Quality program with zero
own-brand product recalls in 2024.
Ethical sourcing
Industrial and Safety has a well-embedded
risk-based Ethical Sourcing Program
founded on its Ethical Sourcing Policy.
The program provides clear guidance on
supplier trading terms, active monitoring
of working conditions in high-risk supply
chains through supplier assessments,
audits and worker voice initiatives.
During the reporting period, the division
undertook 275 assessments of suppliers
and manufacturers and supported 236
independent third-party audits. Of those
non-conformances detected during the
reporting period, 39 per cent were
remediated. The division continues
to remediate open non-conformances
in line with audit timeframes.
Environment
Continued packaging enhancements,
increased adoption of renewable energy
and other initiatives supported the
reduction of Scope 1 and Scope 2
(market-based) emissions by 1.8 per cent
(including Coregas) and improved the
division’s resilience to climate change.
Beyond the division’s own emissions
reduction efforts, Coregas is increasingly
supporting its customers’ own
decarbonisation activities.
In 2024, Industrial and Safety reduced
energy use through continued retrofitting
of LED lighting, installation of rooftop solar
and procurement of renewable electricity.
The division continued to transition its
internal combustion engine fleet vehicles
to electric and hybrid vehicles. Currently,
208 vehicles in its fleet are hybrid, up from
103 in 2023. Coregas is further advancing
this transition with investment plans to
introduce hydrogen-fuelled heavy vehicles
within its supply chain, optimise its freight
network and review the feasibility of
battery-electric vehicles for its fleet.
reduction in Scope 1 and Scope 2
(market-based) emissions
1.8%
Operating and
financial review
Wesfarmers 2024 Annual Report
49
Industrial and
Safety
Operating and financial review | Wesfarmers Health
Wesfarmers
Health
Our business
The Health division was formed in March 2022
with the acquisition by Wesfarmers of API, a health,
wellness and beauty business that has served
Australians for more than 100 years.
Wesfarmers Health has four business units
– retail, pharmaceutical wholesale, medical
aesthetics and digital health.
The retail business includes Priceline Pharmacy,
a leading pharmacy, health and beauty retailer
with 478 stores across Australia. Priceline partners
with community pharmacists through franchise
arrangements and owns non-pharmacy Priceline
stores. Priceline’s loyalty program, Sister Club, has
8.9 million members, making it Australia’s largest
health and beauty loyalty program.
The wholesale business (Pharmaceutical
Wholesale) provides pharmaceutical and
related goods to more than 2,500 community
pharmacies, including distribution of
Pharmaceutical Benefits Scheme (PBS) items
under the Australian Government’s Community
Service Obligation (CSO) arrangements.
The medical aesthetics (MediAesthetics)
business includes the SILK Group, which
was acquired in November 2023, and Clear
Skincare, making Wesfarmers Health the
largest provider of non-surgical medical
aesthetics services in Australia.
The digital health business (Digital Health)
includes InstantScripts, which was
acquired in July 2023 and provides
telehealth consultations, prescriptions for
medications, medical certificates, blood
test requests, health management plans
and specialist referrals, through a team
of around 200 doctors. Wesfarmers
Health also owns a majority interest in
SiSU Health Group (SiSU), which owns
and operates a network of more than
400 medical-grade health stations
that offer free and accessible
self-service health checks
for customers.
Highlights and outlook
Revenue
Earnings before tax
2024
5,624
2023
5,312
20221
1,240
2024
50
2023
45
20221,2
(25)
$5,624m
$50m
1
2022 results are for the period of 31 March to 30 June 2022.
2
2022 includes impairments of $21 million relating to Priceline company-owned stores and other
non-recurring expenses of $4 million relating to the exit from the Consumer Brands manufacturing
operations in New Zealand.
Wesfarmers Health reported revenue
of $5,624 million and earnings of
$50 million for the year. Excluding
non-cash amortisation expenses relating
to assets recognised as part of business
acquisitions, earnings increased
20.7 per cent to $70 million.
The division’s results reflected strong sales
growth in Priceline, supported by store
network expansion, promotional initiatives
and continued growth in online sales.
The Pharmaceutical Wholesale business
increased sales on the prior year through
net customer acquisition growth and
continued strong operating performance.
SILK was acquired in November 2023
and is performing well, providing strong
operational capabilities. The focus
remained on SILK’s integration with Clear
Skincare to capture synergies and create
a leading MediAesthetics business.
InstantScripts was acquired in July 2023,
and together with the Health division’s
interest in SiSU Health, forms a new
Digital Health business unit driving
an integrated healthcare experience
for consumers.
Wesfarmers Health made good progress
in its sustainability agenda over the past
year, prioritising its understanding of
emissions and waste, and expanding
the ethical sourcing program. During the
year, the Health division set a target of net
zero Scope 1 and Scope 2 emissions by
2035, with a near-term commitment to
source 100 per cent renewable electricity
for new fulfilment and distribution centres
as they are commissioned.
Wesfarmers Health is well positioned
to deliver improved financial performance
and grow sales, supported by a clear
transformation plan focused on
opportunities to accelerate growth
and improve returns, while capitalising
on long-term sector tailwinds.
The division continues to actively manage
cost inflation, including rising labour
costs, labour availability constraints and
regulatory changes to the PBS, telehealth
industry and the impacts of 60-day
dispensing.
The ‘Accelerate’ transformation program
remains a strategic focus to strengthen
the division’s competitive positioning.
This includes continued investment to
reinvigorate the Priceline offer, expand the
franchise store network, transform digital
and e-commerce, explore new formats,
improve the wholesale proposition,
optimise the supply chain and leverage
SILK’s capabilities to improve the
performance of Clear Skincare.
Emily Amos
Managing Director
Wesfarmers Health
Operating and
financial review
Wesfarmers 2024 Annual Report
51
Wesfarmers
Health
Key financial indicators (year ended 30 June)
2024
2023
Revenue ($m)
5,624
5,312
Earnings before tax ($m)1
50
45
Capital employed ($m) R12
1,547
1,078
Return on capital employed (%) R12
3.2
4.2
Cash capital expenditure ($m)
38
41
Sustainability results
2024
2023
Total recordable injury frequency rate (TRIFR)2 R12
4.6
6.6
Aboriginal and Torres Strait Islander team members
11
3
Scope 1 and Scope 2 (market-based) emissions (ktCO2e)
10.9
11.6
Operational waste diverted from landfill (%)3
80.4
73.0
Community contributions ($m)
1.2
0.8
Sites in the ethical sourcing program that were monitored (%)4
86
100
Year in review
Wesfarmers Health’s mission is to make
Australians’ health, beauty and wellness
experiences simpler, more affordable and
easier to access. The division operates
in a large, growing addressable market,
with strong growth trends driven by
Australia's ageing population, the
increasing prevalence of chronic disease
and rising demand for beauty and
personal care products.
Wesfarmers Health's primary focus
is to accelerate growth of its retail
business with plans to expand the
Priceline Pharmacy network, enhancing
its franchisee proposition and position
as a leading health and beauty retailer.
Key initiatives include growing the
private label offer, introducing new and
exclusive brands and improving price
competitiveness of key value lines.
Significant investments are also being
made in e-commerce capabilities to
improve the user experience and drive
enhanced loyalty and personalisation.
In Pharmaceutical Wholesale,
Wesfarmers Health aims to be the
pharmaceutical wholesaler of choice
by improving service levels, expanding
its product range and maintaining
competitive pricing. Investments in the
supply chain, including new distribution
centres in Sydney, Brisbane and Cairns,
will support these improvements.
Additional investments in people,
systems and processes will enable an
ongoing focus on reducing cost and
enhancing customer experience.
The MediAesthetics business is
leveraging the capabilities of the SILK
Group to enhance the performance of
Clear Skincare. The integration of these
businesses is expected to capture
synergies in support services, brand,
product and supply chain, solidifying
Wesfarmers Health’s position as the
leading provider of non-surgical medical
aesthetics services in Australia.
In Digital Health, the focus is on creating
connected consumer journeys by linking
InstantScripts, SiSU Health and Priceline.
This integration aims to provide seamless
health management solutions, bringing
all assets onto a single platform to create
new consumer-facing products and
services that enhance the accessibility,
affordability and personalisation
of healthcare.
Our strategy
Wesfarmers Health revenue increased
5.9 per cent to $5,624 million for the
year, and earnings increased
11.1 per cent to $50 million. Excluding
non-cash amortisation expenses relating
to assets recognised as part of business
acquisitions, earnings increased
20.7 per cent to $70 million. The result
reflects the continued investment in
transformation activities and integration
of recent acquisitions, including
$9 million of integration costs.
Priceline delivered strong sales growth
supported by store network expansion,
promotional initiatives and continued
growth in online sales. In the second
half, Priceline materially reduced prices
on a range of items to make health and
beauty products more affordable to
customers. This year, Priceline joined
OnePass, bringing greater value and
convenience to customers and franchise
partners. Sister Club remains Australia’s
largest health and beauty loyalty program
with 8.9 million members.
The Pharmaceutical Wholesale business
delivered positive sales growth despite
a significant reduction in COVID-19
anti-viral sales, with growth supported
by net customer acquisitions and strong
operating performance, including
improved on-time delivery and order
fulfilment. Progress continued on the
construction of a new fully automated
fulfilment centre in Brisbane and a new
distribution centre in Cairns.
In the MediAesthetics business, SILK
is performing well and providing strong
operational capabilities. The focus
remained on SILK’s integration with Clear
Skincare to capture synergies and create
a leading MediAesthetics business. Clear
Skincare’s sales declined, impacted by
cost of living pressures as clients opted
for lower value treatments and the closure
of 17 unprofitable clinics this year.
In the Digital Health business,
InstantScripts delivered strong revenue
growth, driven by a 16 per cent increase
in transactions compared to the year
prior to ownership.
Return on capital reduced to
3.2 per cent, with earnings growth
offset by an increase in capital
employed due to recent acquisitions
and changes to supplier and customer
payment arrangements.
1
2024 includes $20 million of amortisation expenses relating to assets recognised as part of the
acquisitions of API, InstantScripts, SILK and SiSU. 2023 includes $13 million of non-cash expenses
relating to assets recognised as part of the acquisition of API.
2
TRIFR measures the number of lost time and medical treatment injuries per million hours worked.
3
2024 includes operational waste data for distribution centres and estimated operational waste data
for retail stores and clinics. 2023 operational waste data is for distribution centres only.
4
Ethical sourcing data for the 12 months to 15 June 2024.
Wesfarmers 2024 Annual Report
52
Operating and financial review | Wesfarmers Health
Climate resilience
During the year, Wesfarmers Health set
a target of net zero Scope 1 and Scope 2
emissions by 2035, with a near-term
commitment to source 100 per cent
renewable electricity for new fulfilment
and distribution centres.
Most of Wesfarmers Health’s Scope 1
and Scope 2 (market-based) emissions
arise from the use of grid electricity.
Emissions reduction initiatives will involve
on-site electricity generation, such as
rooftop solar, energy efficiency projects
such as LED lighting upgrades and the
procurement of renewable electricity.
In 2024, Wesfarmers Health commenced
the installation of a 1.0 MW rooftop solar
system at its Sydney Fulfilment Centre,
New South Wales and a 0.5 MW rooftop
solar system at its new Brisbane
Fulfilment Centre in Berrinba, Queensland.
Wesfarmers Health continues to refine
its Scope 3 emissions calculation
methodology by engaging with its
suppliers to improve data collection
and reporting.
Ethical sourcing
Wesfarmers Health holds its operations
and supply chains accountable on human
rights and ethical sourcing practices,
requiring them to meet community
expectations in the health, beauty and
wellness sector.
The Wesfarmers Health Ethical Sourcing
Program expanded the number of sites
monitored from 57 last year to 63
in 2024.
During the year, 320 hours of online
modern slavery training was provided
to 1,279 team members. Wesfarmers
Health also engaged a third-party service
provider to deliver online webinars to 16
of its own-brand manufacturing facilities
and suppliers in Mandarin.
In-country grievance mechanisms
were rolled out and are now available
to 726 supplier workers.
Wesfarmers Health is committed to the
humane treatment of animals, urging
suppliers to adopt practices prioritising
animal welfare. New animal welfare
requirements were introduced in the
division’s Ethical Sourcing and Modern
Slavery Policy. Suppliers of own-brand
Establishment of
a net zero target
Visit our website to read more:
wesfarmers.com.au/sustainability
goods for resale and high-risk goods
not for resale must provide information
on animal testing associated with the
goods and disclose their animal
welfare commitments.
Community
During the year, Wesfarmers Health,
through the Priceline Sisterhood
Foundation, contributed $1.2 million to
support initiatives and charities focusing
on women and their families. Charity
partners include Perinatal Anxiety &
Depression Australia (PANDA), supporting
new parents experiencing postnatal
depression; Raise Foundation, which
delivers early intervention mentoring
programs in high schools; and Motherless
Daughters Australia supporting girls
and women who have experienced
mother loss.
Two new charity partners were also
supported during 2024: Fitted for Work
supporting women to become work
ready; and SisterWorks supporting the
economic empowerment of migrant,
refugee and asylum seeker women.
Waste audits
During 2024, Wesfarmers Health
conducted waste audits to better
understand its national waste
profile across distribution centres,
company-owned retail stores
and clinics.
The audits helped quantify the waste
profile of retail stores and clinics
(including small footprint sites that
often use shared waste bins) and
establishes a baseline against which
Wesfarmers Health can measure
progress in coming years.
Insights into retail store waste
composition will help inform how
Wesfarmers Health prioritises
opportunities to divert waste from
landfill in the future.
total recordable injury frequency
rate, down 30.3% from 6.6 in 2023
4.6
Operating and
financial review
Wesfarmers 2024 Annual Report
53
Wesfarmers
Health
Wesfarmers
OneDigital
Operating and financial review | Wesfarmers OneDigital
Our business
Wesfarmers OneDigital brings together the Group’s
digitally native businesses, including the OnePass
membership program, the Group shared data asset
operated by OneData, and the Catch marketplace.
OneDigital supports the Group’s data and digital
ambitions by providing customers with a more
seamless, rewarding and valuable omnichannel
experience across the Group’s retail and health
businesses, and using data analytics to support
each division’s growth agenda and emerging
cross-divisional opportunities.
The OnePass program provides members
with compelling omnichannel benefits when
shopping with the Group’s retail businesses and
appeals to their most valuable customer cohorts.
The uniquely broad range of OnePass partners
include Bunnings, Kmart, Target, Catch,
Officeworks, InstantScripts, Priceline
Pharmacy and Flybuys.
The Group shared data asset provides unique
customer insights that no division can obtain
individually, enabling the Group to better
understand customers, improve personalisation
and identify cross-shop opportunities. Critically,
it is supported by continued investment
in privacy, security and data governance.
Catch is an e-commerce marketplace
that offers branded products on a first-party
basis and through a third-party online
marketplace. Its online operations are
supported by fulfilment centres located
in Victoria and New South Wales.
OneDigital is uniquely placed to
leverage the Group’s trusted retail
and health brands and its near-term
priorities are to scale OnePass
and the Catch marketplace, and
enable new revenue streams
for the Group.
OneDigital is increasingly playing an
important role in accelerating the retail
and health divisions’ omnichannel growth
agenda by deepening connections with
customers and increasing sales.
The OnePass membership program made
significant progress this year. Following the
launch of its enhanced customer value
proposition, in addition to free delivery and
exclusive promotions, members now have
access to omnichannel benefits, including
5x Flybuys points on instore and Click
& Collect spend, express Click & Collect,
365-day change of mind returns, 2x Sister
Club points instore and exclusive member
pricing at Catch. All the Group’s retail
divisions, Priceline and InstantScripts
are now program participants, providing
members with benefits across a uniquely
broad range of partners.
OnePass provides value to members
and drives incremental sales for the
divisions. OnePass members are
significantly more valuable than non-
members, shop across more brands and
channels, and spend more after joining
the program. For example, members
shop approximately three times more
frequently compared to non-members
per annum.
The Group’s shared data asset includes
more than 12 million customer records
and provides unique customer insights
that no division can obtain individually,
enabling the Group to better understand
customers, improve personalisation
and identify cross-shop opportunities.
OnePass is increasingly leveraging
attributes and insights from the shared
data asset to improve member acquisition
and engagement and drive incremental
sales. Importantly, the asset is supported
by continued investment in privacy,
security and data governance.
The use of data and increased digitisation
of operations across the divisions
continues to progress, including through
AI and predictive models that are
delivering improved outcomes in areas
such as demand forecasting, product
design, instore and online availability
and marketing effectiveness.
The Group will continue to invest in
data and digital through the expansion
of divisional capabilities and ongoing
development of the OnePass membership
program and the shared data asset.
OnePass is focused on improving
member benefits to help attract and retain
a larger membership base and increasing
the Group’s share of customer wallet.
Development of the Group shared data
asset will continue and as OneDigital
scales it will increasingly focus on
developing new revenue streams,
such as a retail media network.
At Catch, the reported loss of $96 million
includes $23 million in restructuring costs
and a non-cash impairment to Catch’s
brand value. Excluding these costs, EBT
losses improved by $50 million.
This year, the business took significant
actions to reset its operating model
and cost base. Catch remediated the
in-stock business and executed efficiency
initiatives to lower costs, which resulted in
Catch’s contribution per order increasing
54 per cent on the prior year.
The cost base is now reset following
a material reduction in employee costs
and lower marketing costs.
Competitive intensity in the Australian
e-commerce market is increasing due
to the entry and expansion of international
e-commerce retailers and marketplaces.
In this environment, the Group’s investment
in Catch’s third-party marketplace and its
supporting supply chain capabilities is
providing valuable assets, insights and
relationships for the Group’s retail
operations. Catch also provides a
broader offer for OnePass members.
Catch is focused on opportunities
to scale the capital-light third-party
marketplace and leverage supply chain
assets and capabilities across third-party
sellers and Kmart Group.
Catch is broadening its third-party range,
resetting the customer value proposition
and leveraging OnePass and Flybuys to
drive customer traffic. The business will
also progress the development of new
revenue streams, including through
‘Fulfilled by Catch’, last-mile fulfilment
solutions and its recently launched retail
media platform.
Catch is expected to remain loss-making
in the 2025 financial year, but with losses
reducing relative to the result for the 2024
financial year, excluding restructuring and
impairment costs.
Highlights and outlook
Nicole Sheffield
Managing Director
Wesfarmers OneDigital
Operating and
financial review
Wesfarmers 2024 Annual Report
55
Wesfarmers
OneDigital
OneDigital aims to provide compelling
benefits for members, increase customer
lifetime value and enable new revenue
streams. This is driven by the OnePass
membership program, which builds
deeper engagement with the most
valuable customers of the Group’s
retail and health businesses through
a differentiated omnichannel
customer experience.
Accelerate growth
in OnePass
OnePass continues to scale the
platform through expansion of partners
and broadening member benefits.
Officeworks, InstantScripts and Priceline
Pharmacy are now partners of the
program and there has been increased
collaboration with Flybuys to deliver even
more value and benefits to members.
During the year, OnePass launched
an enhanced omnichannel customer
value proposition to broaden member
benefits to include, at relevant partners,
free delivery on eligible items or orders,
5x Flybuys points on instore and
Click & Collect spend, express
Click & Collect, 365-day change
of mind returns, 2x Sister Club points
instore and exclusive member pricing
at Catch. These benefits saw growth
in the OnePass member base and
members shop approximately three
times more frequently compared
to non-members per annum.
The focus for the coming years is to
continue scaling the platform to deliver
compelling omnichannel benefits that
drive incremental sales across the
Group’s retailers. OnePass will continue
to enhance its customer value
proposition through improved features
and member experiences to drive
membership growth, engagement
and incremental sales across the
Group’s participating retailers.
Leverage data to improve
the customer experience
Through the Group shared data asset
there is an opportunity to unlock growth
by supporting enhanced omnichannel
experiences and more personalised
interactions for customers across the
Group. Importantly, the Group shared
data asset will continue to be
underpinned by continued investment
in privacy, security and data governance.
Our strategy
Year in review
Enable new revenue
streams
Scaling OnePass will support
development of new businesses and
incremental revenue streams across the
Group, including a retail media network.
Improve Catch
performance
The focus is to shift Catch from a
first-party-led business to a capital-light,
third-party-led business of scale and
better utilise Catch’s supply chain assets
and capacities. This involves scaling the
marketplace range, with a focus on
growing the number of international
sellers to introduce greater customer
choice and seller competition.
Catch will reset the customer value
proposition by returning to Catch’s deals
heritage and providing reliable and fast
delivery. The business will also enhance
the seller value proposition by providing
sellers with tools for growth and
improved services.
The business will leverage OnePass
and Flybuys to accelerate growth, which
will drive free customer traffic, reduce
customer acquisition costs and increase
customer engagement and value.
Catch is focused on developing new
revenue streams, including through the
continued growth of 'Fulfilled by Catch',
last-mile fulfilment solutions and its
recently launched retail media platform.
Key financial indicators (year ended 30 June)
2024
2023
Gross transaction value ($m)
524
733
Revenue ($m)
227
354
Earnings before tax ($m)1
(96)
(163)
Cash capital expenditure ($m)
5
10
Sustainability results
2024
2023
Total recordable injury frequency rate (TRIFR)2 R12
10.0
4.7
Scope 1 and Scope 2 (market-based) emissions (ktCO2e)
1.9
2.8
1
2024 includes a non-cash impairment to Catch’s brand value of $18 million and restructuring costs
of $5 million. 2023 includes restructuring costs of $40 million.
2
TRIFR measures the number of lost time and medical treatment injuries per million hours worked.
Catch year in review
Catch’s gross transaction value (GTV)
declined 28.5 per cent to $524 million,
driven by significant reductions to its
in-stock range to exit unprofitable lines
and focus on profitable, in-demand
categories. GTV performance was also
impacted by lower customer traffic due
to reduced marketing spend and
increased competitive intensity.
Catch’s reported loss of $96 million
includes $23 million in restructuring costs
and a non-cash impairment to Catch’s
brand value. Excluding these costs, EBT
losses improved by $50 million compared
to the prior year and losses in the second
half were lower compared to the first half.
This year, Catch took significant actions to
reset the operating model and cost base.
A priority was to remediate the in-stock
business, with Catch reducing the in-stock
range to approximately 70 per cent below
peak historical levels. Catch also executed
a range of efficiency initiatives to lower
costs, which supported a reduction
in warehouse labour cost per order
of 34 per cent. Together, these actions
delivered a material reduction in losses
on the prior year with Catch’s contribution
per order increasing by 54 per cent.
The cost base is now reset following a
material reduction in employee costs.
OnePass and Flybuys continued to drive
customer traffic while contributing to lower
customer acquisition and retention costs.
The Catch offer continues to resonate
with OnePass members, with OnePass
members spending materially more
per annum on average compared
to non-members at Catch.
Wesfarmers 2024 Annual Report
56
Operating and financial review | Wesfarmers OneDigital
Customer trust
Data privacy continues to be a focus
for OneDigital and Wesfarmers, due
to the nature of information they hold
including customer information collected
through the OnePass membership
program; the scale and diversity of the
data in the Group; the shared data asset;
and the ongoing responsibility for handling
customer information through the
Catch marketplace.
Actions in 2024 focused on continued
efforts to safeguard customer data and
privacy by implementing key policies,
educating team members.
Highlights during the year included:
−
increased awareness of privacy issues
and the importance of protecting
personal information during Privacy
Awareness Week 2024. This included
reinforcing the core privacy principles
of transparency, accountability
and security, and promotion of
the division’s privacy training and
materials, which were also updated
during the year
−
updated customer facing
documentation, such as OnePass and
Catch privacy policies and collection
statements, to reflect changes to
the way personal information was
collected and handled, with a focus
on continued transparency and clarity.
For OnePass, this is supplemented
by the OnePass Privacy Promise,
which outlines OnePass’ commitment
to privacy and recognises that trust,
transparency, security and responsible
data custodianship are important
to its members.
OneDigital continued to refine and
build upon its existing privacy enhancing
processes such as privacy by design,
privacy impact assessments,
de-identification, cyber security
controls, data retention and deletion
and other privacy-related controls across
the division to support the division’s
commitment to being a trusted and
responsible custodian of the data it
holds and to comply with the laws
governing privacy.
Ethical sourcing
OneDigital is continuing on its ethical
sourcing journey and is committed to
working with its suppliers in accordance
with international human rights obligations
and in compliance with applicable laws.
During the year, the division's efforts
concentrated on reinforcing ethical
sourcing controls and program
monitoring activities with a focus on
high-risk, own-brand suppliers at Catch.
Factories involved in producing Catch
own-brand merchandise continued to
be managed under the Catch Factory
Management Program.
Achievements during the year included:
−
Reinforcing the application of key
processes and frameworks to
marketplace sellers, to support
the continued focus on scaling the
marketplace. This included updates
to the OneDigital Ethical Sourcing
Code, Catch marketplace agreements
and supplier agreements to reinforce
the application of the Code, and
provide additional rights to Catch
in cases of non-compliance.
−
OneDigital undertook a review
of the ethical sourcing risk rating
and controls applicable to Catch
marketplace sellers. The ethical
sourcing risk rating was upgraded
to acknowledge the level of ethical
sourcing risk posed by marketplace
sellers and recognises that a greater
level of control needs to be applied
across all sellers.
−
269 team members completed ethical
sourcing and modern slavery online
training. The training explained modern
slavery and ethical sourcing risks and
how the OneDigital Ethical Sourcing
Program works to mitigate them.
Energy and climate
In the 2024 financial year, OneDigital’s
Scope 1 and Scope 2 (market-based)
emissions decreased by 31.7 per cent.
This can be attributed to a 30 per cent
decrease in electricity consumption
due to office space consolidation
and a seven per cent reduction
in emission factors.
This was the first year OneDigital reported
its Scope 3 emissions as a stand-alone
division. This will assist in establishing a
data baseline to inform future energy and
climate targets and activities.
Safety
After a positive first half with no recordable
incidents, the key safety measure, TRIFR
for Catch was 10.0 in the 2024 financial
year. The increase in Catch's TRIFR was
driven by seven incidents in the second
half, combined with a near-halving in
worked hours compared to the prior year.
Foodbank community
contributions
When customers buy online through the Catch marketplace, they can
choose to round-up their purchase to the next dollar at the checkout.
The round-up amount is donated to Catch’s community partner, Foodbank.
In 2024, Catch customers contributed more than $103,000 to support
Foodbank’s work to feed vulnerable Australians.
Visit our website to read more:
wesfarmers.com.au/sustainability
Operating and
financial review
Wesfarmers 2024 Annual Report
57
Wesfarmers
OneDigital
Other
activities
Wesfarmers is an investor in Flybuys, the BWP Trust,
Gresham Partners and Wespine Industries.
Flybuys
Wesfarmers owns a 50 per cent
shareholding in Flybuys, one of Australia’s
leading loyalty programs, with Coles Group
Limited holding the other 50 per cent.
Following the demerger of Coles from
Wesfarmers in November 2018, the
Flybuys business was set up as an
independent, stand-alone business.
As at 30 June 2024, there were
9.5 million active members in the
Flybuys loyalty scheme. For more
information on Flybuys, visit
flybuys.com.au
Gresham Partners
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, visit gresham.com.au
BWP Trust
Wesfarmers’ investment in the BWP
Trust (the Trust) contributed earnings
of $40 million for the financial year
compared to $9 million in the prior
year, reflecting favourable property
revaluation movements.
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,
22.3 per cent of the total units issued
by the Trust as at 30 June 2024.
The Trust’s portfolio as at 30 June 2024
consisted of a total of 82 properties,
including nine properties from the
Newmark Property REIT acquisition
completed in June 2024. For more
information on the Trust, visit
bwptrust.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 for the construction,
landscaping and packaging industries.
Following unprecedented demand
through the COVID-19 pandemic,
demand for sawn timber products has
continued to moderate as home buyer
incentives and other government stimulus
has tapered. Wespine delivered revenue
of $131 million in 2024, down from
$150 million in the prior financial year.
Safety continues to be a focus for
management with ongoing investment
and operational initiatives to ensure a
strong safety performance. For more
information on Wespine, visit
wespine.com.au
Wesfarmers 2024 Annual Report
58
Operating and financial review | Other activities
Group
sustainability
Sustainability is core to the Wesfarmers Way, driving
long-term value creation and supporting our commitment
to deliver satisfactory returns to shareholders.
Our divisions are committed to reducing their impact
on the environment and realising opportunities associated
with sustainable business practices, driving improved
outcomes for our stakeholders.
During the year, we remained concentrated on improving
safety performance, managing ethical sourcing and human
rights risks in our operations and supply chains and delivering
on our commitment to reduce emissions.
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, with the objective of supporting
sustainable long-term value creation.
During 2024, our most material
sustainability issues were:
−
health, safety and wellbeing
−
climate change and energy
−
ethical sourcing and human rights
−
governance, corporate conduct
and ethics
−
Aboriginal and Torres Strait Islander
reconciliation and engagement
−
people development, diversity
and inclusion
−
data and cyber security
−
circular economy (including waste,
packaging and plastics)
−
economic and community
contributions
−
government policy and compliance
−
product quality and safety.
Visit our website to read more
on our sustainability disclosures,
including performance data at
wesfarmers.com.au/sustainability
All Wesfarmers’ sustainability disclosures
are prepared in accordance with the
Global Reporting Initiative (GRI) and linked
to the United Nations Sustainable
Development Goals.
We have established new processes
to deliver future reporting in alignment
with the Australian Sustainability Reporting
Standards for climate-related disclosures
and will elaborate on our work in this
space in future reports.
$88.2m
in direct and
indirect community
contributions
of Wesfarmers’ Australian
workforce self-identify
as Aboriginal or Torres
Strait Islander
3.8%
$88.2m
in direct and
indirect community
contributions
73.5%
operational waste
diverted from landfill
Group
sustainability
Operating and
financial review
Wesfarmers 2024 Annual Report
59
How our approach creates value for Wesfarmers’ stakeholders
Sustainability is integrated into Wesfarmers’ approach to capital allocation and how
Wesfarmers oversees and manages its businesses. We invest considerable resources,
including human and financial capital, often alongside partners, to support the delivery
of satisfactory returns to shareholders.
Our value-creating strategies
Our sustainability pillars
Our resources
Team
members
Capital
and assets
Partners
and supply chains
Natural
and sustainable
resources
Diverse businesses
Reputation
and capabilities
Entrepreneurial
initiative
Operating
excellence
Operating
sustainably
Renewing
the portfolio
Suppliers
Environment
Communities
Team members
Customers
Integrity and honesty
Operating and financial review | Group sustainability
Wesfarmers 2024 Annual Report
60
Ethical sourcing and
human rights
Data and cyber security
Product quality and safety
Climate change and energy
Circular economy (including
waste, packaging and plastics)
Our most material
sustainability issues
Our performance
Our approach
Governance, corporate
conduct and ethics
Government policy and
compliance
Health, safety and wellbeing
People development,
diversity and inclusion
Aboriginal and Torres Strait
Islander reconciliation and
engagement
Engaging fairly with our
suppliers and sourcing ethically
and sustainably
Economic and community
contributions
Supporting the communities
in which we operate
Anticipating the needs of our
customers and delivering
competitive goods and services
Taking care of the environment
Acting with integrity and
honesty in all our dealings
Remuneration for senior executives includes
consideration of a broad range of matters,
including financial, safety, data ecosystem
and sustainability performance
OnePass launched an enhanced
omnichannel customer value proposition
to broaden benefits for members
5.4%
decrease in Scope 1
and Scope 2 (market-
based) emissions
relative to 2023
73.5%
of Group
operational waste
diverted from
landfill
2.7%
improvement in
total recordable injury
frequency rate
to 11.0
3.8%
of Wesfarmers’ Australian
workforce self-identify as
Aboriginal or Torres Strait
Islander, maintaining
population parity
87%
of reportable breaches
detected this year
have been remediated
or have remediation
underway
4,472
supplier sites in the
ethical sourcing
programs with 71%
monitored during
the year
Looking after our team members
and providing a safe, fulfilling
work environment
$88.2m
in direct and indirect contributions
to community organisations, primarily
in Australia and New Zealand
Group
sustainability
Operating and
financial review
Wesfarmers 2024 Annual Report
61
Health, safety and
wellbeing
Wesfarmers has an unwavering
commitment to team member health,
safety and wellbeing, which has yielded
positive results, making workplaces
safer for our team members.
This year, while Wesfarmers reported
1,974 workers’ compensation claims,
compared to 1,7441 last year, at a Group
level, TRIFR has reduced to 11.0, with
improvements recorded across most
businesses. The increase in workers’
compensation claims was most notably
due to higher claims at Bunnings Group,
and to a lesser extent, Kmart Group.
Mental health among team members
remained a priority, with extensive work
undertaken to implement a framework
for the identification and management
of psychosocial hazards.
People development, diversity
and inclusion
A diverse and inclusive culture is central
to our success, as greater diversity within
teams supports better business outcomes
and improves the ability to attract and
retain talent.
Wesfarmers is a member of various
diversity and inclusion research
organisations including the Diversity
Council Australia and we share best
practice and research from these
organisations across the Group.
We train our managers and leaders
to equip them with the skills to foster
a sense of belonging among increasingly
diverse teams.
Our divisions maintain primary
responsibility for training and developing
their team members. In addition,
the Wesfarmers Corporate Office
partners with each division to develop
executive leaders. We train leaders
from across the Group together,
to encourage collaboration and align
with Wesfarmers’ objective.
Building data and digital skills and cultural
awareness have been a priority, alongside
investment in technologies to enable
flexible working (for those in roles that can
work flexibly) and on-demand learning.
In recent years, the Group has added
training for leaders and team members
on wellbeing and mental health.
Advancing reconciliation
Our vision for reconciliation is an
Australia that affords equal opportunities
to all and we are committed to ensuring
Aboriginal and Torres Strait Islander
people feel welcome in our businesses
as team members, customers,
suppliers and visitors.
In 2022, we produced our eighth
Reconciliation Action Plan (RAP) but our
first at the Elevate level. The RAP guides
the Group’s Indigenous affairs strategy
in the following areas:
−
sustainable employment
−
career development
−
supplier engagement
−
community partnerships
−
celebrating Aboriginal and Torres
Strait Islander peoples’ cultures.
Gender balance
Gender balance and gender diversity
are key components of our approach
to diversity.
Across the Group and among leadership
roles, we strive for gender balance with
a minimum 40 per cent female and
40 per cent male team members, and
the remaining 20 per cent being any
gender or gender diverse.
The Wesfarmers Board and Leadership
Team maintain gender balance. The
Wesfarmers workforce is 58 per cent
female and 42 per cent male.
There are opportunities to strengthen
female representation in senior executive
positions. Currently, female team members
hold 37 per cent of senior executive roles
and 41 per cent of roles at management
and professional levels.
Gender pay gap
This year, public reporting of gender pay
gaps was introduced by the Australian
Government’s Workplace Gender Equality
Agency (WGEA).
We reported gender pay gaps of
3.5 per cent at median total remuneration
and 7.0 per cent at median base salary,
as at February 2024.
While WGEA calculations produce a single
organisation-wide gap, we recognise the
need to comprehensively review pay
equity across all elements of remuneration
and to challenge and update our
approach and practices on a divisional
basis as well as a Group basis.
Training and development
We continue to provide opportunities
for our approximately 120,000 team
members to participate in training
and development.
Team members
To support Group performance, we focus on safety, health
and wellbeing, we embrace diversity and inclusion and we
invest significant resources in training and development
1
Last year’s number has been restated to exclude New South Wales workers’ compensation regulations that require employees who tested positive for COVID-19
to register a notification claim.
Operating and financial review | Group sustainability
Wesfarmers 2024 Annual Report
62
As one of Australia’s largest employers,
we were pleased the Group maintained
Indigenous employment parity, with 4,172
Aboriginal and Torres Strait Islander team
members, representing 3.8 per cent
of Wesfarmers’ Australian workforce
as at 30 June 2024.
To build cultural competency in our
organisation, Wesfarmers makes a
significant commitment in cultural
awareness training. During the year,
more than 33,000 instances of cultural
awareness training were delivered
to team members.
With our extensive supply chains,
Wesfarmers can increase spend with
Indigenous suppliers, recognising that
this may strengthen economic prosperity
of Aboriginal and Torres Strait Islander
communities. This year, our spend
with Indigenous businesses totalled
$46.8 million, of which 96 per cent was
with certified Supply Nation businesses.
We also awarded additional Building
Outstanding Aboriginal and Torres Strait
Islander Business (BOAB) Fund grants
to Circular Head Aboriginal Corporation
(CHAC), to support the ranging in
Bunnings of organic indoor plant seaweed
spray, as detailed on page 28.
All these actions support reconciliation,
add strength and resilience to our
businesses and are aligned with
our Group purpose.
Indigenous
Cultural and
Intellectual
Property
Wesfarmers supports the responsible
procurement of Indigenous art as
part of its commitment to promote
Indigenous cultures, communities
and businesses.
As the Group evolves its
engagement with Indigenous artists
and suppliers, it is important that
these relationships are conducted in
a fair and culturally appropriate way,
consistent with the Group’s Ethical
Sourcing and Modern Slavery Policy.
During the year, we engaged
Dr Terri Janke, an internationally
recognised authority on Indigenous
Cultural and Intellectual Property
(ICIP), to support the development
of the Wesfarmers guide to working
with First Nations artists.
The guide provides information
on the unique ICIP rights of
Indigenous artists, as informed by
the United Nations Declaration on
the Rights of Indigenous Peoples.
It establishes a framework for
best practice engagement with
Indigenous artists for product
development and commissioning
and licensing of artwork.
To support the rollout and
understanding of the guide,
an ICIP workshop was hosted with
Dr Janke including participants from
across the Group. Acknowledging
the various contact points
throughout the Indigenous art
procurement process, participants
included representatives spanning
from Indigenous engagement,
product development, marketing
and legal teams.
13.1%
increase in Aboriginal
and Torres Strait
Islander team
members across
the Group
Group
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Operating and
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63
Kmart Group contributed $3.1 million
and Officeworks contributed $2.5 million
directly to a mix of local and national
charities as well as community
organisations. WesCEF, OneDigital,
Wesfarmers Health and Industrial and
Safety collectively contributed $1.5 million
to a wide range of charities and causes.
The divisions also facilitated more than
$65.7 million in indirect community
contributions, raised from team members
and customers. During the year,
approximately $54.3 million in indirect
contributions was enabled by Bunnings
Group, through activities such
as community sausage sizzles
and instore fundraising.
Kmart continued its support of The
Salvation Army through the annual Kmart
Wishing Tree Appeal, raising $7.9 million
through the generosity of its customers
for the year.
Officeworks customers raised more
than $2.9 million for the year, some of
which supports The Smith Family’s Core
Learning for Life Scholarship Program
through the Back to School Appeal,
designed to help young Australians
to overcome educational inequality.
Wesfarmers Health, through the Priceline
Sisterhood Foundation, facilitated the
contribution of $1.2 million from Priceline
customers towards various charities
and organisations supporting women
and families.
Community contributions
Wesfarmers and its businesses
recognise the benefits of connecting
and investing in the communities where
we operate. We believe connected,
creative communities are more agile,
inclusive and innovative, providing the
best opportunity for the Group and
its businesses to succeed over the
long term.
Having strong, high-performing
businesses allows us to make significant
financial and other contributions to
local, regional and national community
organisations with meaningful impact.
Wesfarmers is a significant contributor
to the communities in which we operate.
This year, the Group generated wealth
of $44.4 billion, of which $28.8 billion
related to supplies of raw materials and
inventory, $4.4 billion for rent, freight,
services and other external expenses,
$6.3 billion in salaries, wages and other
benefits for team members and
$1.5 billion in taxes and other charges.
The Group also contributed $88.2 million
to community organisations in Australia
and New Zealand, comprising $22.5
million in direct community contributions
and $65.7 million in indirect contributions,
facilitated by our divisions, from our
customers and team members.
Our divisions continued to have a
positive impact in the communities
where they operate, making $13.9 million
in direct community contributions.
Bunnings Group contributed $6.8 million
in cash, gift cards, products and labour.
Communities
Fostering stronger community connection
$88.2m
in direct and indirect
community contributions
Telethon
Kids Institute
30-year
partnership
This year, Wesfarmers and Telethon
Kids Institute celebrated the 30-year
anniversary of their partnership. The
Wesfarmers Centre for Vaccines and
Infectious Diseases was established
in 2014, with Wesfarmers
committing more than $14 million
to advance critical research. Since
then, the Centre has emerged
as a national leader in paediatric
infectious disease research,
improving the quality of life for
children around the world.
In 2024, the Centre used data-
driven epidemiology modelling to
guide an $11 million Respiratory
Syncytial Virus (RSV) immunisation
program, currently being
implemented across Western
Australia to reduce RSV-related
hospitalisations among infants.
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64
The Wesfarmers Corporate Office
contributed $8.6 million to more than
47 community organisations during the
year, in three main areas: medical research
and wellbeing, education and the arts.
Across these areas, Wesfarmers
endeavours to support organisations
that are Indigenous-led or have meaningful
outcomes for First Nations people.
During the year, Wesfarmers announced
a five-year partnership with the Australian
National University (ANU) to provide
educational opportunities for Indigenous
Australians, with a $5 million donation
to the ANU Kambri Scholars Program.
For more than four decades, Wesfarmers
has been a leading supporter of the
performing arts. We are proud that our
partnerships with a wide range of premier
arts organisations, including the
Australian Chamber Orchestra and Bell
Shakespeare, allow regional Australian
communities to enjoy performances and
educational programs with leading
national and international artists.
A highlight of the year, and one of
three leadership projects supporting
our Elevate RAP, was the continuing
international tour of the exhibition Ever
Present: First Peoples Art of Australia,
developed in partnership with National
Gallery Australia. Ever Present has
travelled from the Art Gallery of Western
Australia to the National Gallery
Singapore and Auckland Art Gallery
Toi o Tamaki, with global audiences in
excess of 220,000 people. Ever Present
will feature at the National Gallery
Australia in Canberra from September
2024 to August 2025.
First Nations
arts and
culture
commission
During the year, our support for
First Nations arts and culture enabled
the world premiere of Wundig wer
Wilura – the new Wesfarmers Arts
musical theatre commission from
award-winning songwriters and
storytellers, Gina Williams AM and
Guy Ghouse.
Wundig brings Noongar language,
history and culture to the stage in an
acclaimed follow-up to the duo’s first
opera collaboration, Koolbardi wer
Wardong commissioned by
Wesfarmers Arts in 2020.
Six-time winners of the Indigenous
Act of the Year at the West Australian
Music Industry Awards, Williams
and Ghouse use their music and
performances to highlight the
Noongar language of the southern
corner of Western Australia.
Williams composed Wundig wer
Wilura with collaborator Ghouse,
in consultation with Elders on
Ballardong Country. Through the
opera, Williams wanted to tell a story
she grew up with – one of a young
man and young woman who are
promised to other people but fall
in love and decide to elope, causing
an epic conflict between their
family groups.
Wundig is a story of forbidden love
and feuding families that has endured
for thousands of years, passed down
by generations of Ballardong Elders.
Opening in February at His Majesty’s
Theatre as the centrepiece of the
2024 Perth Festival, Wundig starred
an all-First Nations cast. Wundig was
performed under the baton of viola
player, composer and conductor
Aaron Wyatt, a Noongar man from
Western Australia recognised as the
first Australian First Nations person to
conduct a major Australian orchestra.
Wesfarmers is Principal Partner of
West Australian Opera and a major
partner of Perth Festival.
Group
sustainability
Operating and
financial review
Wesfarmers 2024 Annual Report
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Product quality and safety
Providing products that are safe and
comply with relevant standards and
regulations is of utmost importance
to Wesfarmers and our divisions.
We require our suppliers to conduct
product testing and quality checks,
as do our dedicated in-house divisional
teams, prior to sale of products. During
the year, there were five own-brand
product recalls, supporting customer
confidence and safety.
We collaborate to share developments,
learnings and best practice in product
quality and safety through the Wesfarmers
Product Safety Forum, which meets
quarterly with members from across
the Group. During the year, participating
divisions shared product safety
information, recalls, product safety
incidents and other relevant information
to continue improving Wesfarmers’
endeavours to achieve product
safety objectives.
Data and cyber security
Wesfarmers is committed to being
a trusted and responsible custodian of
the customer and team member data we
hold and we invest significant resources
in data and digital assets and capabilities.
Across our businesses and supply
chains, we observe and respond to
a heightened, active global and local
cyber threat landscape.
During the year, the Group enhanced
its privacy frameworks, processes and
resourcing, including through initiatives to:
−
update privacy policies, privacy hubs
and preference centres
−
improve privacy impact assessments,
de-identification frameworks and
controls
−
increase focus on privacy-by-design,
including during digital product
development.
The Group maintains a data governance
policy, which aligns standard foundational
data types to a Group data classification
scheme. This approach helps to support
the strategic value of our data assets while
balancing security, integrity, compliance and
reputational issues inherent in collecting,
using, retaining, sharing and destroying or
deleting data. In addition, where customer
cardholder data is managed or handled,
we continue to demonstrate Payment Card
Industry Data Security Standard assurance.
With a focus on cyber resilience,
we continuously review and adjust
our capabilities as new threats, frauds
and scams emerge and as cyber criminals
change how they operate. We have
implemented several initiatives across the
Group to protect online customers from
cyber criminals, strengthen our control
environment for enterprise and operational
technology and manage supply chain
cyber risk. These initiatives included:
−
multi-factor authentication (MFA) for
many of our online retail businesses
(currently optional for customers)
−
continued uplift in preventative
investments
−
monitoring capabilities to detect
cyber security threats, digital fraud
and scams.
We also continued to monitor emerging local
and international practice to support the safe
and secure use of AI technologies and
innovation that drives customer experience,
product development and operational
efficiency. In this context, we have enhanced
technology-related governance to include
the appropriate use of generative AI, new
cyber security awareness programs, security
architecture frameworks and patterns, and
share best practices.
Customers
Putting customer needs first
Everyday
lowest prices
Our divisions aim to anticipate
the needs of customers and deliver
competitive goods and services,
while also engaging fairly with our
suppliers and sourcing ethically
and sustainably.
During the year, as cost of living
pressures affected the community,
our retail businesses concentrated
on their everyday low price (EDLP)
offers to customers.
This year, Kmart implemented
more than 3,000 price drops
across diverse categories,
supporting customers with cost
of living pressures, while continuing
to invest in sustainability strategies.
Over the long term, responsible
engagement with suppliers is
critical, including consideration
of ethical sourcing, resource use,
packaging and end-of-life
treatment.
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Ethical sourcing and
human rights
Wesfarmers’ businesses take a proactive,
risk-based approach to managing human
rights risks in their operations and supply
chains, each implementing their own
ethical sourcing and supplier due
diligence programs. These align with
the Group’s minimum standards in the
Wesfarmers Ethical Sourcing and Modern
Slavery Policy, consistent with leading
international practice.
Wesfarmers’ 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, recognise
the rights to freedom of association and
collective bargaining and support the
implementation of trusted grievance
mechanisms.
If a supplier is unwilling to meet
minimum standards or to implement
required improvements within mutually
agreed timeframes, arrangements
with the supplier may be suspended
or terminated.
Wesfarmers’ approach to ethical
sourcing and human rights provides
customers and other stakeholders
with confidence in our sourcing
practices, including how suppliers
and manufacturers manage risks and
impacts on the supplier workforce.
To support their ethical sourcing
programs, Wesfarmers’ divisions
employed 33 team members in total
with ethical sourcing responsibilities,
some of which are based in Bangladesh
and China, including Hong Kong.
By employing teams in major sourcing
markets, we strengthen supplier
relationships and embed minimum
standards across our supply chains.
In late 2023, the Group released its
eighth Modern Slavery Statement, which
details progress to proactively identify,
prevent, mitigate and manage modern
slavery risks across the Group’s supply
chains and operations.
Our progress
This year, there were more than 27,000
suppliers to the Group, of which 2,742
were in our ethical sourcing program.
Of these suppliers, 93 per cent supplied
goods for resale, three per cent supplied
goods not for resale and four per cent
were service providers.
The total number of suppliers in the ethical
sourcing program declined 4.8 per cent
during the year. Of the suppliers in our
ethical sourcing program, 56 per cent
were monitored or assessed during 2024.
During the year, the Bunnings Group
ethical sourcing team conducted
monitoring activities across 398 suppliers,
covering some 1,170 supplier sites.
In 2024, for operational reasons,
Bunnings Group deferred monitoring
activities for a portion of Australian and
New Zealand suppliers (constituting
3.4 per cent of suppliers within the
Bunnings Group ethical sourcing
program) by approximately two months.
These activities have resumed and will
be reported in 2025.
During the year, monitoring activities
included supplier pre-qualifications,
supplier visits, third-party monitoring
(such as independent audits), grievance
mechanisms, whistleblower programs or
worker voice surveys. For suppliers in the
ethical sourcing program, the frequency
of third-party audits varies from three
to 24 months, depending on prior audit
findings and the level of assessed risk.
Where we identify instances of non-
conformance with our minimum
standards, these are reviewed and
classified as minor, major or reportable
breaches and a remediation process
is activated.
This year, the ethical sourcing program
identified reportable breaches related to:
−
health, safety and hygiene
(40 per cent of reportable breaches)
−
working hours (27 per cent
of reportable breaches)
−
wages and compensation
(18 per cent of reportable breaches),
and
−
other breaches, including in
relation to management systems
and environmental management
(15 per cent of reportable breaches).
Our divisions regard grievance
mechanisms, whistleblower programs
and worker voice surveys as important
tools to monitor and improve worker
conditions at supplier sites.
Through these programs, workers can
confidentially raise concerns, including
business-related human rights and
modern slavery risks.
Operational grievance mechanisms have
now been deployed in 14 countries by six
divisions. Twenty-four contacts were
made by workers, of which three were
found to be substantiated grievances.
In these instances, divisions worked with
suppliers to develop remediation action
plans. Where the supplier was unwilling
to engage, the supplier was exited.
Suppliers
Engaging fairly with our suppliers and
sourcing ethically and sustainably
87%
of reportable breaches
detected in 2024 have
been remediated or have
remediation underway
Group
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Operating and
financial review
Wesfarmers 2024 Annual Report
67
Remediation and training
We are committed to working with
suppliers to remedy minor, major
and reportable breaches, when identified,
if it is appropriate in the circumstances
to do so.
Our approach depends on the severity
of harm (or potential harm) and may
include immediate rectification or making
good any harm experienced by an
individual, and working to prevent
future harm.
All sites with non-conformances, whether
minor, major or reportable, are subject
to ongoing due diligence monitoring.
The type of non-conformance detected
determines the follow-up. Where possible,
we engage with suppliers to support
remediation through a corrective action
plan, with supplier exits being used
as a last resort.
This year, 87 per cent of reportable
breaches identified have been remediated
or remediation is underway.
We exited nine suppliers or supplier
sites this year, where remediation of a
reportable breach could not be achieved.
Training and capacity building
The Group invests in human rights training
and capacity building with our teams and
suppliers. This year, more than 5,400 team
members and more than 1,900 suppliers
received ethical sourcing and modern
slavery training, totalling 4,719 hours.
Team members complete divisional
and business-specific online modern
slavery and human rights training to
support the ethical procurement of goods
and services. The training generally
describes modern slavery and forced
labour, how to identify modern
slavery risks and what can be done to
protect and safeguard human rights.
The Group’s divisional ethical sourcing
teams also train other relevant team
members (including merchandising
and procurement teams), third-party
auditors and suppliers (including their
factory teams), to promote a shared
understanding of Wesfarmers’
expectations.
Visit our website and 2023 Modern
Slavery Statement to read more on our
Group ethical sourcing programs at
wesfarmers.com.au/sustainability
Officeworks
improves
factory audit
program
Factory audits are one of several
tools in the Officeworks ethical
sourcing program helping to identify
and address modern slavery risks.
A comparison of audit findings for
sites with reportable breaches in the
2023 financial year against ratings
in the prior period showed an
improvement in the audit status
in 76 per cent of suppliers or supplier
sites. Compliance items were
classified as a lower impact and at
a lower risk rating. This demonstrates
that the audit program is driving
ongoing improvements in
Officeworks’ ethical sourcing risks.
Out of 499 audits reviewed in
2024, the audit program identified
33 reportable breaches across
18 supplier sites, involving 14 suppliers.
The most common reportable
breaches related to excessive
recruitment fees charged by agencies
or employers, a lack of evidence or
inconsistent records to verify workers’
rights to work and working hours and
failure to provide workers with legally
required leave entitlement.
In accordance with the Officeworks
ethical sourcing program procedure,
the 18 supplier sites with reportable
breaches were given red audit ratings.
The Officeworks ethical sourcing team
worked with the suppliers or their sites
to remediate the items identified and
followed-up with an independent
audit. Two of these sites were exited
after the supplier refused to remediate
breaches relating to recruitment fees
and insufficient fire safety.
This year, 27 reportable breaches
were remediated, 10 of which were
identified in the previous reporting
period. Most of these prior breaches
related to a lack of documentation
to verify the right to work and
excessive overtime.
Where the auditor was unable to
review consistent evidence at seven
supplier sites, Officeworks worked with
suppliers to obtain documentation,
which was verified in a follow-up audit.
Where overtime hours were excessive
at four supplier sites, suppliers were
supported to develop better planning
and rostering for peak production
periods, systems were implemented
to monitor overtime and to alert
management when excessive hours
were worked, and new policies were
introduced to ensure a regular rest day.
Of the breaches identified during
the year, 11 are still open and
Officeworks is working to remediate
these with the suppliers as part
of its regular supplier audits.
Audits are complemented by worker
grievance mechanisms, ethical
sourcing training for suppliers and
team members and worker surveys.
76%
Improvement in
factory audits
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We are committed to reducing the
impact on the environment of our
operations and implementing strategies
that reduce the impact on the environment
of products and services sold across
the Group.
Our approach to environmental
management is set out in our Group
Environment Policy, which aligns with
this commitment.
During the year, we continued our
work to gain a better understanding
of the impact that our businesses may
have on climate and nature.
We also designed and commenced
implementation of a new sustainability
data capture and reporting system. The
system will strengthen our understanding
of environmental performance and
associated risk management across
the Group, and enable analysis of
environmental information for strategic
purposes. It will also support more
streamlined reporting, with strong data
governance frameworks.
Circular economy
We recognise there are limited natural
resources in the world and our large,
diverse businesses have a responsibility
to reduce their reliance on natural
resources. Our customers have a
growing interest in reuse, recycling
and regeneration and we understand we
can create long-term value by procuring
and selling products that factor in circular
economy principles.
For Wesfarmers, circular economy
principles extend from product design
to lifecycle management. They include
consideration of resource intensity in
manufacture, packaging, energy intensity
in use and end-of-life treatment.
We recognise the linkages between
consumption and waste, including
waste from manufacture, packaging
and disposal of products at end-of-life.
Across the Group, cross-functional
teams continued to build awareness and
progress delivery of improvements in
product design and end-of-life treatment.
Our divisions continued to take action
to minimise operational waste and waste
associated with our products. This work
has included continued participation in
takeback schemes and partnerships with
industry, government and organisations,
such as the Australian Packaging
Covenant Organisation (APCO).
Waste
We recognise the important role
we play in reducing waste generated
across the Group.
During 2024, we continued to take action
to minimise waste, with 73.5 per cent
of Group operational waste recovered
and diverted from landfill, up from
71.6 per cent on the prior year, driven
principally by a reduction in waste
at Bunnings Group and WesCEF.
Packaging and plastics
We have opportunities to reduce the
volume and impact of packaging used
by our businesses.
Across the Group, our businesses work
closely with suppliers to specify and use
sustainable packaging materials.
We support an industry-led approach
through APCO, while also working closely
with government and the recycling
industry, to ensure our work meets
the expectations of authorities
and consumers.
As members of APCO, Bunnings,
Officeworks, Workwear Group,
Blackwoods, Kmart and Target are
working towards 100 per cent reusable,
recyclable or compostable packaging
for own-brand products. While some
progress has been made, significant uplift
is required by all parties to meet these
targets. Wesfarmers supports proposals
to introduce mandatory requirements for
packaging, including minimum recycled
content under a new regulatory scheme,
which is expected by the end of 2025.
Helping our retail customers with at-home
recycling, including by providing clear
and consistent information on packaging,
is important to divert waste from landfill.
As part of our APCO membership, we
have made a commitment to adopt the
Australasian Recycling Label for
the packaging on own-brand products,
using APCO’s Packaging Recyclability
Evaluation Portal.
Environment
Protecting the environment
Across circular economy
and waste, highlights
include:
−Bunnings and Officeworks
operate recycling programs
that enable customers to divert
diverse waste from landfill
(including toner cartridges,
pens, batteries and devices).
−Workwear Group has
collaborated with Brisbane-
based BlockTexx to recover
materials from uniforms
at end-of-life.
−Bunnings introduced a uniform
recycling program.
Group
sustainability
Operating and
financial review
Wesfarmers 2024 Annual Report
69
Climate-related
disclosures
Our approach
The Group’s response to climate
change aligns with our purpose and
focus on long-term value creation.
Climate change presents a material
risk to our businesses, with the potential
to impact operations, team members,
supply chains, customers and the
communities in which we operate.
Our businesses are managed with climate
and carbon awareness and we work in a
disciplined way to decarbonise, manage
climate-related risks, develop climate-
related partnerships and invest in
climate-related growth opportunities.
We are focused on reducing our
operational Scope 1 and Scope 2
greenhouse gas emissions (operational
emissions) and our divisions have set
interim and net zero operational
emissions targets. The pathways to
decarbonise vary across the sectors in
which our businesses operate, with each
reflecting unique divisional attributes and
emissions profiles.
We continue to monitor and report
emissions, including performance and
progress towards interim and net zero
operational emissions targets.
For the third consecutive year, each
of the divisions is reporting all material
categories of Scope 3 emissions (value
chain emissions), with the divisions
continuing to refine their reporting to
identify emissions reduction opportunities
within their value chain.
This year, to better identify climate-
related risks and realise climate-related
opportunities, we refreshed the Group’s
climate scenario analysis. This analysis
supports work to identify and progress
opportunities to invest in new or growing
markets. It also supports enhanced
integration with enterprise risk and
strategic planning processes, to further
embed climate-related considerations
into business strategies.
Building partnerships and pursuing
opportunities are essential to Wesfarmers’
decarbonisation and future growth.
As a large, diversified Group, our
transition to a low-emissions economy
depends on a range of technologies
becoming commercially viable and
operating at scale. Partnerships are also
essential to support decarbonisation
of our value chain.
To prepare for Australia’s mandatory
climate-related financial disclosures,
this year we also commissioned a gap
analysis to identify priorities and guide
work to meet future disclosure
requirements and associated Australian
Sustainability Reporting Standards from
2025. In the interim, the Group
continues to report climate-related
disclosures using the recommendations
of the Task Force on Climate-related
Financial Disclosures (TCFD).
of rooftop solar
generation capacity
from 212 systems
46MW
commenced production
of spodumene concentrate
to produce battery-quality
lithium hydroxide for use
in electric vehicles
Mt Holland
mine and
concentrator
reduction in Group Scope
1 and Scope 2 (market-
based) greenhouse gas
emissions
5.4%
Visit our website to read more on
Wesfarmers’ approach to climate at
wesfarmers.com.au/sustainability
Wesfarmers recognises it can play an
important role in supporting global efforts
to transition to a low-emissions economy.
Operating and financial review | Climate-related disclosures
Wesfarmers 2024 Annual Report
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Governance
Climate change is recognised as a material risk for the Group. In this context, the Wesfarmers
Board has ultimate responsibility for overseeing the Group’s approach to managing climate-related
risks, opportunities and reporting. Effective governance is central to the Group’s approach
to responding to climate change.
Climate Policy
Wesfarmers’ Climate Policy is considered and endorsed by
the Wesfarmers Board. It establishes minimum expectations
to manage climate‑related risks and opportunities across the
Group. The Climate Policy is reviewed annually to ensure
it remains relevant and reflects changing context and
expectations among our stakeholders. The Climate Policy
is available at wesfarmers.com.au/cg
Corporate Office
Wesfarmers Corporate Office supports the divisions by setting
the Climate Policy, determining the internal shadow carbon price
and supporting the development of climate-related aspects
of corporate plans. Wesfarmers Corporate Office also facilitates
cross-divisional collaboration through a quarterly Carbon and
Energy Forum, which brings together subject matter experts from
across the Group with day-to-day responsibility for coordinating
and managing climate-related programs. It provides opportunities
to share knowledge across our divisions, with businesses that
operate in different industries and sectors.
Corporate Office
Supports
Wesfarmers Board
Considers and endorses
The Board considers and endorses the Group’s approach to managing climate-related
risks and opportunities.
Board and Audit and Risk Committee
Through the Audit and Risk Committee, the
Wesfarmers Board receives updates at each meeting
on diverse climate-related issues. In 2024, the
Wesfarmers Board reviewed the Climate Policy,
strategic initiatives, performance against the Climate
Policy, performance against divisional targets, risk
appetite and other climate-related matters.
Remuneration Committee
The Remuneration Committee takes account
of various environmental, social and governance
considerations (including climate) when determining
the remuneration of key management personnel.
It also makes recommendations to the Board
regarding performance goals linked to emissions
reduction targets.
Delivers
Divisional leadership teams
Sustainability and carbon and energy teams
Working with operations, merchandising, risk, property, supply chain,
finance and corporate affairs teams
Divisional teams are responsible for integrating climate-related considerations into their strategic plans
and operations.
Sustainability and carbon and energy teams, with support from other business functions and teams,
coordinate and implement Wesfarmers’ Climate Policy, strategies and actions, and maintain systems
for monitoring and reporting.
Divisional audit, risk and compliance committees
Each divisional board and management team is responsible for identifying and managing material climate-related
risks and opportunities relevant to its businesses, in accordance with the Group’s Risk Management Framework
and Risk Appetite Statement and as part of the annual corporate planning process.
The Wesfarmers Leadership Team, including divisional managing directors, provides leadership to support
a culture of climate awareness. Divisional managing directors lead the development and implementation
of divisional climate-related strategies, monitor performance, engage stakeholders and share expertise.
Climate change risk management is a standing item in the divisional reporting framework. Through the annual
strategic planning process, each division forecasts emissions and decarbonisation strategies in its corporate
plan for consideration and approval by the Wesfarmers Board.
Leads
Divisional boards
Wesfarmers Leadership Team
Climate-related
disclosures
Operating and
financial review
Wesfarmers 2024 Annual Report
71
Strategy
To continue to create long-term sustainable value, Wesfarmers needs to mitigate,
adapt and build resilience to the impacts of climate change and participate in the transition
to a low-emissions economy.
As a large, diversified conglomerate, Wesfarmers acknowledges the decarbonisation pathway will vary across the sectors in which
we operate. We take a disciplined approach to embed carbon awareness into our culture, operations and strategy. Consistent with
our model of divisional autonomy, each division has its own climate strategy that reflects its unique emissions profile, risks and
opportunities.
Climate scenario analysis
Climate scenario analysis helps challenge
and develop our understanding of the
Group’s resilience under different climate
futures, across two time horizons: 2030
and 2050. It helps assess the Group’s
exposures to climate change across a
range of physical and transition risks and
informs our strategic response and plans
to mitigate and adapt to the impacts
of climate change across Wesfarmers’
portfolio and value chain.
This year, we refreshed the Group’s climate
scenario analysis using scenarios and
datasets from the Intergovernmental Panel
on Climate Change (IPCC) Sixth
Assessment Report. For physical analysis
we used the IPCC’s projected temperature
outcomes based on the Shared
Socioeconomic Pathways (SSP)
framework. For transition analysis we used
the Network for Greening the Financial
System’s (NGFS) scenarios.
To ensure our approach remains current,
we made two key revisions to the Group’s
climate scenarios:
1. The upper physical scenario is
now SSP 3-7.0, corresponding to
approximately 3.6oC warming by
2100, to align with Australian and
New Zealand Governments’ regional
climate modelling.
2. The transition scenarios now include
the NGFS Net Zero 2050, Delayed
Transition and Nationally Determined
Contributions scenarios, as transition
risks are greatest with accelerated
action. In selecting the transition
scenarios, we considered the
availability of metrics for the most
relevant and uncertain risks and
opportunities across Wesfarmers’
portfolio and value chain.
Climate scenarios are based
on climate and socio-economic
models. They are not forecasts
intended to predict or provide
probabilities of likely outcomes.
Actual future climate outcomes
may differ due to a range of factors,
including changes in government
policy, market conditions,
technological advancements and
the speed, sensitivity, interplay
and uncertainty of climate
change impacts.
Caution should be exercised when
considering any forward-looking
statements associated with climate
scenario analysis, including
statements regarding strategy
and the anticipated impact or
effectiveness of strategy.
The Group has four overarching areas of strategic focus, building on actions and progress
in prior years:
Operational
decarbonisation
The Climate Policy requires
divisions to set interim
and net zero Scope 1 and
Scope 2 emissions targets.
Value chain
emissions
Our divisions continue to
report Scope 3 emissions
and identify opportunities
to address these value
chain emissions.
Growth
opportunities
Wesfarmers and our divisions
invest in opportunities that
align with and support
decarbonisation and a
low-emissions economy.
Partnerships
Through partnerships,
our divisions support the
decarbonisation of our
operational and value
chain emissions.
Climate scenarios for physical and transition analysis
Aggressive mitigation (+1.4oC – 1.7oC by 2100)
Physical risks are low and transition risks are high
There is global collaboration among governments to aggressively decarbonise, aligned to the goals of the Paris Agreement. Long-term
global warming is limited, through stringent climate policies and innovation, with medium to high regional variation. The introduction and
development of low and zero-carbon technologies is fast and the global economy achieves net zero emissions by around 2050. For
physical analysis, the SSP 1-2.6 scenario was used. For transition analysis, the NGFS Net Zero 2050 and Delayed Transition
scenarios were used.
Current pledges and targets (+2.7oC by 2100)
Transition risks are relatively low and physical risks are high
Global emissions decline based on existing policies and commitments but fall short of the goals of the Paris Agreement. Climate hazards
become more intense and frequent requiring greater investment in adaption. For physical analysis, the SSP 2-4.5 scenario was used. For
transition analysis, the NGFS Nationally Determined Contributions scenario was used.
Limited climate action (+3.6oC by 2100)
Transition risks are low and physical risks are high
There is continued use of fossil fuels and energy intensive activities as climate pledges and targets are not achieved. Extreme weather is the
key feature of this scenario with climate hazards intensifying, affecting operations, consumer behaviour and health services, including in
Australia and New Zealand. For this scenario, we focused principally on the physical risks and for the physical analysis, SSP 3-7.0 was used.
Scenarios:
Aggressive mitigation
Current pledges and targets
Limited climate action
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Wesfarmers 2024 Annual Report
72
Risks and opportunities
The following parameters were used to identify, assess, prioritise and monitor Wesfarmers’ climate-related risks and opportunities.
Specifications
Physical
Transition
Drivers and metrics
Extreme rain
Storm surge
Policy
Markets
Extreme heat
Cyclones
Regulation
Stakeholder
perceptions
Extreme dry
Sea level rise
Technology
Fire weather
Regions
Assets in Australia and New Zealand (Wesfarmers sites and offices)
Key sourcing markets in Australia, New Zealand and internationally including exposure
to certain ports and raw materials
This year, we evolved our approach to identifying and assessing climate-related risks and opportunities, to further integrate them with
the Group Risk Management Framework and corporate planning processes, elevating the visibility of potential climate-related impacts
across the divisions.
While the divisions are exposed to climate-related physical and transition risks, there are also growth opportunities associated
with the transition to a low-emissions economy.
Group Risk Management
Framework
The Wesfarmers Risk Management
Framework (Framework) supports and
guides the processes by which risk
is identified, assessed, managed,
communicated and reported.
The Framework also includes the
mechanisms by which Wesfarmers
articulates its commitment to risk
management practices and oversees
the effectiveness of those practices,
including the provision of assurance
and continual improvement activities.
The Wesfarmers Board maintains
a Risk Appetite Statement which
includes climate-related risks and
was last reviewed and approved
in May 2024. For further information
on Wesfarmers’ approach to risk
management see page 92.
Physical risks
Physical risks can be acute or chronic.
Acute or event-driven physical risks are
influenced by the frequency and severity
of extreme weather events, while chronic
physical risks are associated with
long-term shifts in climate patterns
(including sustained increased
temperatures), resulting in sea level rise
and chronic heatwaves.
Although impacts vary across regions,
with every degree of warming, there may
be non-linear, disproportionate changes
in the magnitude, intensity and frequency
of individual and concurrent extreme
weather events. This could exacerbate
and increase the frequency and intensity
of physical impacts across our businesses.
In recent years, our businesses, team
members, customers, suppliers and
communities have been impacted by an
increase in the frequency and intensity of
extreme weather events, such as floods,
fires and extreme heat days. In some
locations, these events have disrupted
store networks and supply chains,
causing physical damage, including
losses and infrastructure damage and
adverse impacts on team members
and local communities.
Transition risks
The risks associated with a transition
to a low-emissions economy will be driven
by changes in policy, regulation,
technology, markets and stakeholder
expectations. The speed, intensity and
our ability to respond to the changing
external environment will impact the
magnitude of the Group’s exposures.
Opportunities
Changes in markets, technology,
customer preferences and stakeholder
expectations provide opportunities for
growth across products and services.
There may be opportunities associated
with the energy transition, including
renewable energy, low-emissions
hydrogen, ammonia and critical minerals
(such as lithium). There may be
opportunities in adjacencies in the energy
transition and opportunities that support a
circular economy.
Climate-related
disclosures
Operating and
financial review
Wesfarmers 2024 Annual Report
73
Description and impact
Potential response and mitigation strategies
Damage to physical assets and disruption to store network
Scenario:
Time horizon to impact: Short Financial impact: Direct costs
Wesfarmers’ businesses are exposed to extreme wet weather,
including more frequent and intense flooding, storm surges and
tropical cyclones, especially across northern and
eastern Australia and New Zealand. This risk is expected to
increase over time.
Increased intensity and frequency of extreme wet weather may
disrupt and damage our physical assets and store networks, reducing
operational efficiency and increasing operational costs.
Extreme weather (including drought conditions) may affect
consumer behaviour and customer foot traffic. This may impact
sales and demand in certain businesses (including the retailers,
Wesfarmers Health and CSBP Fertilisers).
Climate-related claims may lead to increased insurance premiums for
certain locations and difficulty in obtaining or unavailability of insurance.
−
Redesign or retrofit stores and warehouses to adapt to extreme
weather conditions
−
Consideration of implications for the location of new sites,
stores and store renewals
−
Invest in measures to maintain comfort for team members and
customers, including automated building management systems
−
Invest in omnichannel capabilities to provide flexibility to meet
changing customer needs and preferences
−
Reflect climate risk assessments in capital allocation, including
approach to mergers, acquisitions, portfolio management
decisions and insurance
Acute weather events may disrupt Wesfarmers’ supply chain
Scenario:
Time horizon to impact: Short to Medium Financial impact: Direct and indirect costs
Wesfarmers’ divisions and supply chains could be exposed
to an increase in hot days (over 35ºC) across most of Australia.
Internationally, these risks are relevant in the subcontinent, the
Middle East and the Mediterranean where some suppliers are
located.
Flooding, storm surges and cyclone events may result in disruptions
to supply chains, interrupting port, airport, road and rail operations.
These disruptions could result in delays and bottlenecks in
accessing products, affecting customer service levels.
Longer and more intense extreme weather events may affect the
quality and yield of raw materials, upstream in the value chain,
especially impacting our retail businesses.
For our industrial businesses, extreme weather events may impact
customer demand for products downstream in the value chain.
−
Diversify supplier base and geographic sourcing regions
−
Hold additional inventory to buffer delays from supply chain
disruption
−
Deploy strategies to reduce dependence on virgin raw
materials by using more recycled materials and reducing
reliance on raw materials, which are more likely to be impacted
by climate change
−
For WesCEF, assess markets, customers and end uses for
products like fertilisers in regions that may be less impacted by
acute weather events
−
Collaborate and build partnerships (including within supply
chains) to help suppliers build their own climate resilience
Impacts on the health, safety and wellbeing of team members and the communities in which we operate
Scenario:
Time horizon to impact: Short to Medium Financial impact: Direct and indirect costs
Physical and psychological health, safety and wellbeing of team
members is a critical business issue.
Environmental hazards may affect team members’ safety, wellbeing
and productivity as a result of extreme heat (causing heat stress and
related illnesses), bushfires (causing poor air quality or limiting
access to workplaces and homes) or extreme wet weather resulting
in flooding (restricting access to workplaces and homes).
Impact on our suppliers, customers and local communities may
result in business interruption, affecting business performance.
−
Continue to invest in improving store and facility design,
including implementing automated building management
systems to support team member and customer comfort
−
Adapt shift hours, introduce additional breaks, implement
further automation and adopt other measures to help manage
heat stress at stores, distribution centres and manufacturing
facilities
−
Assess new store locations and designs, taking into account
future climate scenarios
The following tables summarise, in no particular order, material physical risks and transition risks and opportunities for the Group,
including their impact on our businesses and potential responses and mitigation strategies.
Scenarios:
Aggressive mitigation
Current pledges and targets
Limited climate action
Time horizons: Short: 1 to 5 years Medium: 5 to 15 years Long: 15+ years
Physical risks
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Wesfarmers 2024 Annual Report
74
Description and impact
Response and potential mitigation strategies
Changing customer preferences
Scenario:
Time horizon to impact: Short to Medium Financial impact: Direct costs
Changing customer preferences and expectations may impact
existing product ranges as customers favour lower-emissions,
circular, locally-sourced and more sustainable alternatives.
For some products and market segments, customers may be
unwilling to pay higher prices for these characteristics.
OPPORTUNITY – Leverage our scale and expertise
to respond to emerging customer needs by leading
the development and offering of more sustainable,
low-emissions products.
−
Adjust product and service ranges to reflect emerging customer
needs and offer more sustainable products and services
−
Explore new markets and investment opportunities that support
a low-emissions economy
−
Seek partnerships and invest in new technologies that accelerate
the transition to a low-emissions economy
Carbon policies and pricing impact our competitiveness
Scenario:
Time horizon to impact: Short to Medium Financial impact: Direct and indirect costs
Uneven global policies and strategies may add to manufacturing
costs.
If imports are not subject to similar carbon abatement policies, the
competitiveness of domestic production may be disadvantaged.
Access to some products and raw materials, including domestic
gas, may be impacted or limited as regulation or policy impact their
cost, competitiveness, availability and supply.
The costs for businesses or products with large emissions footprints
may increase, affecting margins, which may limit opportunities for
growth including into alternative markets.
−
Implement an internal shadow carbon price on investments that
attaches a cost to emissions
−
Engage stakeholders to ensure policies support the transition
to a low-emissions economy while maintaining competitiveness
against imports, including on policies that support key inputs,
such as domestic gas supply, until an alternative is widely
available
−
Decarbonise operations, including setting emissions reduction
and net zero targets, consistent with the Climate Policy. This
action may mitigate possible future exposure to direct carbon
pricing while factoring in future costs
−
Diversify supplier base and sourcing regions to manage risks
and exposures
Stranded assets in the global transition to a low-emissions economy
Scenario:
Time horizon to impact: Long Financial impact: Direct and indirect costs
Emissions intensive operations and assets may be at risk
of becoming stranded or obsolete if they cannot cost-effectively
decarbonise or transition in response to market, technology and
regulatory changes.
The development of solutions such as CCUS may face challenges
or take longer than expected, including to overcome regulatory
issues or provide access to transportation infrastructure, potentially
delaying their deployment and exacerbating these risks.
OPPORTUNITY – Partner and invest in new markets
for low-emissions hydrogen, ammonia and lithium, leveraging
our expertise to support the global transition to a low-
emissions economy.
−
Collaborate with partners to support solutions such as CCUS,
including by repurposing existing assets
−
Investigate the introduction of low-emissions ammonia into
WesCEF’s existing production processes
−
Identify investment opportunities aligned with new products,
markets and industries, supporting the transition to a
low-emissions economy
−
Continue progressing towards interim and net zero targets and
apply an internal shadow carbon price to investment decisions,
to mitigate future exposures
−
Explore new markets and investment opportunities that support
a low-emissions economy, including low-emissions hydrogen,
ammonia and lithium
Erosion of our reputation and community support
Scenario:
Time horizon to impact: Short to Medium Financial impact: Direct and indirect costs
There may be a risk of negative impacts on our reputation and
community support due to our exposure to emissions intensive or
hard-to-abate businesses, including to natural gas, with increasing
pressure for greater action at a faster pace.
OPPORTUNITY – Invest for the future in low-emissions
technologies and resources for the energy transition,
including portfolio renewal into new industries such
as lithium.
−
Continue decarbonising operations consistent with interim and
net zero targets and evaluate opportunities to reduce value chain
emissions
−
Report on performance, consistent with best practice standards
and frameworks, to provide stakeholders with consistent,
comparable and transparent information
−
Proactively leverage expertise and financial capability to partner
and invest in low-emissions technologies, solutions and industries
Transition risks and opportunities
Scenarios:
Aggressive mitigation
Current pledges and targets
Limited climate action
Time horizons: Short: 1 to 5 years Medium: 5 to 15 years Long: 15+ years
Climate-related
disclosures
Operating and
financial review
Wesfarmers 2024 Annual Report
75
Operational decarbonisation
This year, the Group’s Scope 1 and Scope 2 (market-based) emissions decreased to 1,132.4 kilotonnes
of carbon dioxide equivalent (ktCO2e), falling 5.4 per cent relative to 2023. While decarbonisation
pathways vary across the sectors in which we operate, our divisions (except OneDigital1), have set
interim and net zero Scope 1 and Scope 2 emissions reduction targets.
With our commitment to reduce emissions, Bunnings Group, Kmart Group, WesCEF, Officeworks, Industrial and Safety and Wesfarmers
Health have set interim and net zero operational emissions targets.
1 OneDigital (including Catch) has yet to set net zero Scope 1 and Scope 2 targets. The division contributes 0.2 per cent of Group Scope 1 and Scope 2
(market-based) emissions.
2 Wesfarmers’ reporting boundary is based on operational control as defined by the National Greenhouse and Energy Reporting Act 2007 (Cth). Scope 2 emissions
are stated using market-based accounting, in accordance with the World Resources Institute Greenhouse Gas Protocol Scope 2 Guidance. Supplementary
location-based data can be found from page 189 and at wesfarmers.com.au/sustainability
Group performance
Group Scope 1 and Scope 2 (market-based) emissions2
During the year, Group Scope 1 and Scope 2 (market-based) emissions
were 1,132.4 ktCO2e.
Scope 1 emissions were 829.9 ktCO2e, a modest 1.9 per cent decrease
relative to 2023, due principally to improvements to ammonia emissions
intensity at WesCEF.
Scope 2 (market-based) emissions were 302.5 ktCO2e, a decrease
of 13.8 per cent relative to 2023. This decrease was achieved through
ongoing energy efficiency measures, rooftop solar installations, renewable
electricity procurement and lower electricity emission factors (reflecting
a higher proportion of renewable electricity in the grid).
1,225.7
2022
2023
2024
1,196.7
1,132.4
1,000
ktCO2e
500
0
Scope 1
Scope 2
(market-based)
Group operational emissions profile
During the year, Scope 1 emissions accounted for 73.3 per cent of the
Group’s total operational emissions. They are ‘direct’ emissions released
from the Group’s operations.
WesCEF’s industrial processes include manufacturing and processing
ammonia, ammonium nitrate, sodium cyanide, LNG and LPG, which
account for 95.8 per cent of the Group’s Scope 1 emissions. These
emissions are difficult to abate.
The remaining 4.2 per cent arise from fuels used in fleet vehicles,
natural gas for heating, LPG in forklifts and equipment and refrigerants
in cooling systems.
Scope 1 emissions by division
WesCEF
Other
divisions
During the year, Scope 2 (market-based) emissions accounted for
26.7 per cent of the Group’s total operational emissions. They are
‘indirect’ emissions associated with grid electricity use across the Group.
Bunnings Group, Kmart Group and Officeworks contribute 78.4 per cent
of the Group’s Scope 2 (market-based) emissions.
Given Scope 2 emissions are material for our retail divisions and
represent around 95 per cent of their operational emissions, Scope 2
emissions reductions are being prioritised in those divisions.
Scope 2 (market-based) emissions by division
WesCEF
Bunnings
Group
Kmart Group
Officeworks
Other
divisions
S
C
O
P
E
1
S
C
O
P
E
2
Scope 2
emissions
302.5
ktCO2e
S
C
O
P
E
2
S
C
O
P
E
1
Scope 1
emissions
829.9
ktCO2e
Operating and financial review | Climate-related disclosures
Wesfarmers 2024 Annual Report
76
Scope 1 operational decarbonisation
To reduce Scope 1 emissions, our divisions will need to make capital investments and enter into
partnerships. It will also be important for low-emissions technologies to become commercially viable,
operate at scale and for the policy and regulatory environment to remain supportive of decarbonisation.
Decarbonisation initiatives in WesCEF’s 2050 net zero roadmap1,5 are expected to drive the Group’s Scope 1 emissions reduction as
95.8 per cent of the Group’s Scope 1 emissions arise from WesCEF’s industrial processes. Other divisions account for 4.2 per cent of the
Group’s Scope 1 emissions, which will be addressed by replacing, electrifying or improving the efficiency of fleet, plant and equipment.2
WesCEF’s interim 2030 target
Prior to 2020, WesCEF implemented
solutions to avoid more than 40 per cent of
its operational emissions, principally from
secondary nitrous oxide catalytic abatement.
WesCEF’s net zero roadmap includes
an interim target to reduce operational
emissions by 30 per cent by 2030,
relative to its 2020 baseline. This interim
target is largely expected to be achieved
through investments in additional catalytic
abatement in WesCEF’s three nitric
acid plants at CSBP Kwinana.
This year, WesCEF’s operational emissions
were 12.8 per cent below its 2020
baseline due to operational efficiencies
and increased maintenance of existing
secondary abatement catalysts in its nitric
acid plants.
WesCEF has committed to upgrade its
newest nitric acid plant to include tertiary
catalytic abatement during the planned
maintenance shutdown in the 2025
financial year, supported by $500,000
in funding from the Western Australian
Government.
WesCEF was also awarded $33 million
from the Australian Government’s
Powering the Regions Fund to partially
fund the implementation of tertiary
catalytic abatement in its remaining two
nitric acid plants. The funding reflects the
criticality of WesCEF’s chemical
manufacturing operations to Australia and
is intended to support trade exposed
facilities covered by the Safeguard
Mechanism to reduce emissions and help
WesCEF and Australia meet emissions
reduction targets.
Implementation of tertiary catalytic
abatement across all three nitric acid
plants is expected to be completed
by the end of the 2028 financial year,
delivering a further 11 per cent reduction
in operational emissions.
2020 baseline
955 ktCO2e
This figure shows the greenhouse gas composition
of WesCEF’s 2020 baseline3 operational emissions.
Scope 2: 6%
Other Scope 1: 4%
CO2 Natural gas for H2 (ammonia feedstock): 34%4
CO2 Natural gas for H2 (process heating): 15%
CO2 Other: 16%
Nitrous oxide: 25%
1 Further information on WesCEF’s net zero roadmap is available at Wescef.com.au/Wescefs-roadmap-to-net-zero/
2 Offsets may be required to address residual Scope 1 emissions across the Group. Around 10 per cent of WesCEF’s remaining emissions may require the use
of offsets if no commercially viable technological solutions emerge. Further information on divisional targets can be found from page 79.
3 Baseline emissions may be adjusted for significant changes to our business, including product volume expansions, portfolio changes such as mergers,
acquisitions and divestments and changes to greenhouse gas reporting methodologies. If baseline emissions require revision, targets may also be adjusted.
4 This is high purity CO2 and presented net of volumes captured and sold to third parties.
5 In setting its 2050 net zero target and roadmap, WesCEF assumed low-emissions technologies such as CCUS will advance and become commercially
viable and operate at scale well before 2050. WesCEF also assumes government policy will remain supportive of climate action and technologies required
to decarbonise. The assumptions underpinning WesCEF’s targets will be regularly tested to ensure they are reasonable.
Completed
Implementation
Feasibility
Concept
2030 pathway
This pathway represents WesCEF’s current view. WesCEF continues to evaluate additional opportunities to reduce emissions and assess
potential risks to achieving its interim target.
2020 baseline
955 ktCO2e
2030 target
669 ktCO2e
Operational
improvements
Increased
maintenance
of secondary
abatement
catalysts in nitric
acid plants and
other operational
improvements.
(13%)
Tertiary catalysts
(11%)
Plant 3
Plant 1
Plant 2
Install tertiary
abatement
catalysts (and
associated process
modifications) in
nitric acid plants.
Sodium cyanide
gas incinerator
(2%)
Replace existing
incinerator in
sodium cyanide
facility with new
technology that
reduces nitrous
oxide.
Scope 2
Increase use
of zero emissions
electricity (such
as renewable or
self-generation
from waste heat).
(4%)
Nitrous
oxide
Nitrous oxide abatement
Climate-related
disclosures
Operating and
financial review
Wesfarmers 2024 Annual Report
77
We have three overarching
strategies to reduce
Scope 2 emissions.
Reducing electricity use
Improving energy efficiency of
existing stores through retrofitting,
automating building management
systems, installing LED lighting and
improving the efficiency of heating
and cooling systems. For new
stores, there are opportunities to
apply sustainable design principles.
Generating on-site electricity
Investing in behind-the-meter
electricity generation from renewable
and waste-heat sources to replace
grid-electricity use. For most
divisions, this is through rooftop
solar and for WesCEF, it is principally
through waste-heat recovery. Where
feasible, battery systems are
considered, complementing rooftop
solar installations.
Procuring renewable electricity
A portfolio of solutions including
sourcing renewable electricity and
associated large-scale generation
certificates (LGCs) through power
purchase agreements with electricity
retailers and/or generators and retail
renewable electricity products like
GreenPower. Unbundled renewable
energy certificates, including
LGCs, will also be required.
Sourcing
renewable
electricity
In 2022, Bunnings entered into
renewable electricity agreements with
ZEN Energy and Red Energy. From
January 2024, the ZEN Energy project
links 89.3 per cent of Bunnings’
electricity use in South Australia to the
87 MW Tailem Bend 2 Solar Farm,
located approximately 90 kilometres
southeast of Adelaide.
Similarly, the Red Energy agreement
supplies large sites1 in New South
Wales and the Australian Capital
Territory, representing 99.2 per cent
of their electricity use across the state
and territory. From July 2023, the
agreement links to the 110 MW
Sebastopol Solar Farm near Temora,
New South Wales.
The Sebastopol Solar Farm covers
248 hectares and combines sheep
farming with a large-scale solar farm,
allowing sheep to graze beneath and
around the panels. The Sebastapol
Solar Farm showcases how renewable
energy projects can coexist with
agriculture, providing dual land use
and additional income for farmers.
The ZEN Energy and Red Energy
agreements continue to support
Bunnings’ progress towards its
100 per cent renewable energy target.
In 2024, 79.6 per cent of Bunnings’
electricity needs were met from
renewable sources.
1 Large sites are sites with electricity
consumption that is equal to or exceeds
100 megawatt hours (MWh) per annum.
Scope 2 operational decarbonisation
Reducing Scope 2 emissions requires a transition to renewable electricity, through a portfolio
of on-site and off-site solutions.
Bunnings, Kmart Group and Officeworks account for 78.4 per cent of the Group’s Scope 2 emissions. Their targets to source
100 per cent renewable electricity by the end of calendar year 2025 will substantially reduce the Group’s Scope 2 emissions.
Sustainable
buildings
by design
By reducing energy use and
improving building energy efficiency
at new facilities, Officeworks is
progressing towards its net zero
Scope 1 and Scope 2 targets.
In late 2023, Officeworks relocated
approximately 900 team members to
its new Support Centre at the recently
redeveloped Chadstone Place in
Victoria, a zero emissions building.
The Support Centre integrates
sustainable design into a purposeful,
engaging space that allows for a
collaborative and flexible work
environment, aligning to Officeworks’
commitment to People and Planet.
The Officeworks project team
collaborated with Vicinity Centres
to transform an 8,100 sqm building,
prioritising energy efficiency,
responsible construction, procurement
and finishes.
It includes modern design elements
for team member comfort, such as tall
interior spaces, landscaped inclusions,
high-efficiency lighting, natural
ventilation and rooftop solar generation.
The refurbished office achieved
a 6-star Green Star Built rating and
5.5-Star Energy and 4-Star Water
NABERS ratings.
As at 30 June 2024, 212 rooftop
solar systems with 46 MW of
generation capacity were installed
across the Group, with 47 systems
installed during the year.
These systems generated 33,810
MW hours of renewable electricity,
equivalent to the annual electricity
use of more than 5,300 Australian
households.
ROOFTOP SOLAR ACROSS
THE GROUP
212 systems
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Wesfarmers 2024 Annual Report
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Progress against targets1 (ktCO2e)
Baseline emissions profile
Progress in 2024
Operational decarbonisation divisional progress
Scope 1 emissions represent around
5 per cent of Bunnings Group’s baseline
operational emissions and come from natural
gas for heating, LPG for community BBQs and
forklifts and fuels in fleet vehicles.
Scope 2 emissions represent around
95 per cent of Bunnings Group’s baseline
emissions and come from grid electricity use
across its stores, distribution centres and offices.
Bunnings Group’s target to achieve 100 per cent
renewable electricity by the end of calendar year
2025 will address its Scope 2 (market-based)
emissions and contribute significantly to its net
zero target.
This year, Bunnings Group achieved a
17.5 per cent reduction in Scope 1 and Scope 2
(market-based) emissions relative to the prior
year. Bunnings Group is 81.0 per cent below its
2018 baseline, materially exceeding its interim
target of 10 per cent by 2025.
Bunnings Group’s emissions reductions were
driven by efficiency measures, installation of
rooftop solar systems and the commencement
of renewable electricity contracts.
During the year, Bunnings Group installed 26
rooftop solar systems, for a total of 153 systems
across its store network.
Bunnings Group
259.7
104.9
59.9
49.4
Baseline
2018
2022
2023
2024
Net zero Scope 1 and Scope 2 by 2030
100 per cent renewable electricity
by the end of calendar year 2025
17.5%
Scope 1 emissions represent around
5 per cent of Kmart Group’s baseline
operational emissions and come from natural
gas for heating, LPG for forklifts, fuels in fleet
vehicles and small refrigerant losses from
cooling systems.
Scope 2 emissions represent around
95 per cent of Kmart Group’s baseline
operational emissions and come from
grid electricity use.
Kmart Group’s target to achieve 100 per cent
renewable electricity by the end of calendar year
2025 will address its Scope 2 (market-based)
emissions and contribute significantly to its net
zero target.
In 2024, Kmart Group achieved a 15.4 per cent
reduction in Scope 1 and Scope 2 (market-
based) emissions relative to the prior year. It is
44.2 per cent below its 2018 baseline, exceeding
its interim target of 20 per cent by 2025.
Kmart Group’s emissions reductions were
driven by efficiency measures in its operations.
Small volumes of renewable electricity from the
installation of rooftop solar and lower
electricity emission factors also contributed
to the reductions.
In 2024, Kmart Group executed contracts
to purchase 100 per cent renewable electricity
in New Zealand, commencing in 2025. Kmart
Group is working to source additional renewable
electricity agreements to meet its 100 per cent
renewable electricity target.
Kmart Group
330.8
250.9
218.1
184.6
Baseline
2018
2022
2023
2024
Net zero Scope 1 and Scope 2 by 2030
100 per cent renewable electricity
by the end of calendar year 2025
15.4%
WesCEF’s baseline operational emissions profile
and 2030 interim target pathway are detailed
on page 77.
CSBP Kwinana’s Scope 1 emissions
represents 84.5 per cent of WesCEF’s Scope 1
emissions. This facility is covered by the
Safeguard Mechanism.
In 2024, the CSBP Kwinana facility is expected
to generate Safeguard Mechanism credits as its
emissions are below its Safeguard Mechanism
baseline emissions.
WesCEF’s Scope 1 and Scope 2 (market-
based) emissions decreased 1.9 per cent
in 2024 and are 12.8 per cent below
its 2020 baseline.
The modest decrease in WesCEF’s 2024
emissions was principally due to an
improvement in the emissions intensity of
ammonia production as a result of operational
improvements and an increase in carbon
dioxide captured and sold.
WesCEF
955.5
795.4
849.5
833.5
Baseline
2020
2022
2023
2024
Interim
target
Net zero Scope 1 and Scope 2 by 2050
Interim target – 30 per cent Scope 1 and
Scope 2 reduction by 2030
1.9%
Scope 1 emissions represent a negligible
proportion of Officeworks’ baseline operational
emissions and come primarily from fuel use in
fleet vehicles.
Scope 2 emissions represent almost all of
Officeworks’ operational baseline emissions
and are associated with the use of grid
electricity across Officeworks’ stores and
distribution centres.
Officeworks’ target to achieve 100 per cent
renewable electricity by the end of calendar year
2025 will address its Scope 2 (market-based)
emissions and contribute significantly to its net
zero target.
In 2024, Officeworks achieved a 7.7 per cent
reduction in Scope 1 and Scope 2 (market-
based) emissions relative to the prior year.
Officeworks is 49.1 per cent below its 2018
baseline, exceeding its interim target of
25 per cent by 2025.
During the year, Officeworks installed
15 rooftop solar systems, for a total of
41 across its business.
Officeworks
49.1
30.8
27.1
25.0
Baseline
2018
2022
2023
2024
Net zero Scope 1 and Scope 2 by 2030
100 per cent renewable electricity
by the end of calendar year 2025
7.7%
1 Interim and net zero targets assume low-emissions technologies will advance and become commercially viable and operate at scale to meet these targets.
Baseline emissions may be adjusted for significant changes to our business, including product volume expansions, portfolio changes such as mergers,
acquisitions and divestments and changes to greenhouse gas reporting methodologies. If baseline emissions require revision, targets may also be adjusted.
30%
by 2030
Climate-related
disclosures
Operating and
financial review
Wesfarmers 2024 Annual Report
79
Internal carbon price
Since 2014, Wesfarmers has incorporated an internal carbon price (as a shadow price) in capital allocation and expenditure decisions through
the Wesfarmers Project Expenditure and Disposals Policy. An internal carbon price acts as a commercial incentive for businesses to
strategically plan emissions reductions or anticipate future costs by attaching a price to emissions associated with an investment or operation.
During the year, the Climate Leaders Coalition2 (CLC) developed an internal carbon price playbook, providing businesses with practical steps
to establish an internal carbon price as a strategic tool to support decarbonisation objectives. As a CLC signatory, Wesfarmers piloted the CLC
playbook for decision-makers on internal carbon pricing before it was published. Through the pilot, Wesfarmers provided input on various use
cases of an internal carbon price across its diverse portfolio of businesses.
1 Interim and net zero targets assume low-emissions technologies will advance and become commercially viable and operate at scale to meet these targets. Baseline
emissions may be adjusted for significant changes to our business, including product volume expansions, portfolio changes such as mergers, acquisitions and
divestments and changes to greenhouse gas reporting methodologies. If baseline emissions require revision, targets may also be adjusted.
2 The CLC is a group of cross-sectoral Australian corporate CEOs supporting corporate decarbonisation. For further information visit climateleaders.org.au
Progress against targets1 (ktCO2e)
Baseline emissions profile
Progress in 2024
Operational decarbonisation divisional progress
Scope 1 emissions represent 29 per cent
of Industrial and Safety’s (ex-Coregas) baseline
operational emissions and arise from fuel use
in fleet vehicles.
Scope 2 emissions represent 71 per cent
of Industrial and Safety’s (ex-Coregas) baseline
operational emissions and are associated
with electricity use at its distribution centres,
branches and trade stores.
In 2024, Industrial and Safety (ex-Coregas)
achieved a 5.2 per cent reduction in Scope 1
and Scope 2 (market-based) emissions relative
to the prior year and is 38.5 per cent below its
2018 baseline.
The reductions were driven by operational
efficiencies, including site closures, installation of
rooftop solar and procuring renewable electricity
in New Zealand. Lower electricity emission
factors also contributed to the decrease.
Industrial and Safety
(ex-Coregas)
14.8
10.3
9.6
9.1
Baseline
2018
2022
2023
2024
Net zero Scope 1 and Scope 2 by 2035
Interim target – 45 per cent Scope 1 and
Scope 2 emissions reduction by 2025
Interim
target
5.2%
Scope 1 emissions represent 54 per cent
of Coregas’ baseline operational emissions and
arise from Coregas’ industrial processes and
fuel use in fleet vehicles.
Reducing Scope 1 emissions involves
increasing efficiency, optimising production,
freight network improvements and substituting
internal combustion engine vehicles with low-
emissions alternatives, such as hydrogen and
electric vehicles.
Scope 2 emissions represent 46 per cent
of Coregas’ baseline operational emissions
and come from grid electricity use across
its facilities.
In 2024, Coregas’ emissions were stable and
remain 9.3 per cent above its baseline.
The increase is due to continued business
growth since 2022 when Coregas’ operational
emissions baseline was established.
In December 2023, Coregas announced a
$16 million investment in a new Air Separation
Unit (ASU) at its existing facility in Darra,
Queensland. The ASU will increase cryogenic
fluid production, serving increased demand in the
region, currently supplied from Coregas’ facility
in Port Kembla, New South Wales. Bringing
production closer to customers will help reduce
Coregas’ transport-related Scope 1 emissions.
Commissioning of the facility is planned for
mid-calendar year 2025.
Coregas
16.1
16.1
17.6
17.6
Baseline
2022
2022
2023
2024
Interim
target
Net zero Scope 1 and Scope 2 by 2050
Interim target – 30 per cent Scope 1 and
Scope 2 emissions reduction by 2035
0.0%
Scope 1 emissions represent around
2 per cent of Wesfarmers Health’s baseline
operational emissions and arise from fuel use
in fleet vehicles.
Scope 2 emissions represent over
98 per cent of Wesfarmers Health’s baseline
operational emissions and come from
electricity use across its company stores,
clinics, distribution centres and offices.
Reductions will be achieved through improved
energy efficiency across its sites, installation
of rooftop solar at its distribution centres and
procuring of renewable electricity.
In 2024, Wesfarmers Health reported a
6.0 per cent reduction in Scope 1 and Scope
2 (market-based) emissions relative to the
prior year.
The reduction was principally due to closures
of stores and clinics across its portfolio.
During the year, Wesfarmers Health set
a net zero Scope 1 and Scope 2 emissions
target by 2035 and an interim commitment
to source 100 per cent renewable electricity
at its distribution centres, aligned to the
implementation of its network strategy.
Wesfarmers Health
11.6
11.6
10.9
Baseline
2023
2023
2024
Net zero Scope 1 and Scope 2 by 2035
Interim target – 100 per cent renewable
electricity at new distribution centres
6.0%
45%
by 2025
30%
by 2035
Operating and financial review | Climate-related disclosures
Wesfarmers 2024 Annual Report
80
Wesfarmers’ value chain, or Scope 3, emissions are material and reflect the scale and nature of the
Group’s businesses. During the year, work continued to refine the Group’s Scope 3 emissions data
to help identify decarbonisation opportunities within the value chain.
Scope 3 emissions are ‘indirect’ greenhouse gas emissions arising from activities upstream and downstream of our divisions’
operations. These emissions are outside our direct control and represent the Scope 1 and Scope 2 emissions of direct and indirect
suppliers, customers and team members.
In 2024, the Group’s Scope 3 emissions were approximately 35.8 MtCO2e, approximately 32 times the Group’s operational
emissions. The Bunnings Group, Kmart Group and WesCEF value chains represent 79.9 per cent of the Group’s Scope 3 emissions.
For Bunnings Group and Kmart Group, Scope 3 emissions are primarily linked to the volume and nature of products sold. For WesCEF,
Scope 3 emissions principally arise from the purchase and use of ammonia, natural gas and fertilisers.
Three Scope 3 categories1 represent 93.9 per cent of the Group’s Scope 3 emissions.
Category 1 — Purchased
goods and services
These emissions arise from upstream
activities relating to the extraction,
manufacture and production of goods
and services. These emissions are the
largest contributor to the Group’s
Scope 3 emissions as they represent the
‘cradle-to-gate’ emissions of products
sold by our divisions.
Category 11 — Use of sold
products
These emissions arise from customer use
of products sold by our divisions. They
include emissions associated with energy
use, such as electricity to power electrical
goods or secondary activities such as
laundering apparel.
This category also includes emissions
from the use of fertilisers and combustion
of fuels sold.
Category 12 — End-of-life
treatment of sold products
These emissions arise from the treatment,
processing and disposal of products sold
at the end of their life (such as waste
disposal, recycling and reprocessing).
This category also includes emissions
from the release of industrial, medical
and specialty gases by our customers
after use.
Value chain emissions
1 There are 15 Scope 3 categories listed in the World Resources Institute Greenhouse Gas Protocol Corporate Value Chain (Scope 3) Standard. Our full Scope 3
inventory can be found at wesfarmers.com.au/sustainability
Group Scope 3 emissions by division and category
Total Scope 3 emissions 35.8 MtCO2e
Category 11
10.7 MtCO2e
Other downstream
categories
0.5 MtCO2e
Bunnings Group
Kmart Group
WesCEF
Other divisions
Category 12
1.4 MtCO2e
Bunnings Group
13.0 MtCO2e
36.3%
Kmart Group
11.2 MtCO2e
31.3%
WesCEF
4.4 MtCO2e
12.3%
Other divisions
7.2 MtCO2e
20.1%
Category 1
21.5 MtCO2e
60.1%
Other upstream
categories
1.7 MtCO2e
4.7%
Upstream emissions
Downstream emissions
By category
By division
29.9%
3.9%
1.4%
Climate-related
disclosures
Operating and
financial review
Wesfarmers 2024 Annual Report
81
Pilot on
quantifying
emissions
avoided
As a leading provider of workwear
solutions, Workwear Group
connects its customers with
garment recycling solutions to
support responsible disposal of
uniforms at end-of-life. These
initiatives aim to divert textile
waste from landfill, which reduces
raw or virgin material
consumption in other industries.
Recognising the complexities
in quantifying these benefits, in
2024, Workwear Group launched
a pilot to evaluate how recycling
and end-of-life treatment of
garments can contribute to
emissions reduction.1 The pilot is
evaluating whether recovered or
regenerated materials contribute
to avoided emissions in diverse
industries, by replacing virgin
resources required to
manufacture products, such
as insulation, filling materials,
fertiliser and plastic pellets.
While avoided emissions from
end-of-life treatment represent
a small portion of Group Scope 3
emissions, the pilot is an
important first step in quantifying
avoided emissions from
end-of-life treatment and enabling
Workwear Group to test
assumptions, improve data
accuracy and enhance its Scope
3 reporting. Together, Workwear
Group and its customers will gain
clearer insights into emissions
benefits and challenges from
garment end-of-life treatments,
while supporting circular
business models.
Our progress
Collaboration, partnerships and a
whole-of-economy approach are essential
in addressing Scope 3 emissions.
Recognising the importance of
partnerships, in 2024, Bunnings joined
the European DIY Retail Association and
Global Home Improvement Network
(EDRA/GHIN) Scope 3 Taskforce
(Taskforce). The Taskforce provides an
opportunity to support standardisation
and refinement of Scope 3 emissions
reporting and to share best practice
with global peers.
Kmart Group continued to collect
supplier-specific emissions data, achieving
coverage of more than half of its suppliers
Value chain emissions
Scope 3 focus areas
With indirect influence over our value
chain, it is important to understand
where and how we can engage with
suppliers, customers and others to
support emissions reductions.
Across the Group, there are three
overarching focus areas.
Data
Calculating Scope 3 emissions is
complex and we use a blend of
spend-, activity-, supplier- and life
cycle-based approaches to calculate
our Scope 3 inventory. Some
divisions have continued to refine
their approach, improving the
resolution of their calculation
methods where possible.
Suppliers
Upstream Category 1 emissions
are the largest source of Scope 3
emissions across the Group. It will be
essential to engage with key suppliers
to understand their emissions
profiles, including emissions that are
further upstream in their supply
chains, to identify and support efforts
to deliver emissions reduction
opportunities.
Customers
Reducing downstream emissions from
Category 11 and Category 12 requires
further improvements to product
efficiencies and support for responsible
disposal of products at their end-of-life,
including through take-back and
recycling programs across our divisions’
store networks. Emissions from
electricity used by products sold
will decrease as the electricity
grid decarbonises.
1 Recycled and end-of-life treatment of products may help to displace the use of virgin materials. This may contribute to emissions reduction outside our value
chain, in separate industries or sectors.
Supporting
sustainable
agriculture
CSBP Fertilisers’ data and
nutritional management tool,
DecipherAg, provides insights for
farmers to optimise production
and support emissions reduction
in agriculture.
DecipherAg’s ‘Review’ features
visualisation tools to analyse
crop yield, nutrient use efficiency
(NUE) assessment and
greenhouse gas emissions.
The analysis may help optimise
inputs to improve agricultural
supply chain sustainability.
By correlating crop yield, biomass
imagery, water availability and
soil nutrition data, farmers can
evaluate their crop performance
and identify efficiency
opportunities, including optimising
fertiliser use. By comparing
emissions data at the farm,
paddock and crop level, farmers
can make informed decisions on
crop selection and fertiliser inputs,
optimising production and
contributing to more sustainable
agricultural practices.
in Category 1. The data indicates that over
half the thermal energy needs in upstream
apparel production processes come from
non-renewable sources, highlighting
potential emissions reduction
opportunities with suppliers.
WesCEF conducted a desktop analysis
of key suppliers to gather information that
will allow it to assess upstream value
chain decarbonisation opportunities. Key
findings indicate that in 2023, about half
of WesCEF’s Scope 3 emissions were
from purchased inputs and energy.
Of these emissions, 60 per cent come
from six suppliers, each with net zero
Scope 1 and Scope 2 targets.
Decarbonisation by these suppliers will
likely require the implementation of
low-emissions ammonia technologies
and use of renewable electricity.
Recognising the importance and challenge
of reducing Scope 3 emissions, we have
taken a systematic approach to refine our
inventory to help identify achievable and
measurable reduction opportunities that
are backed by data.
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Wesfarmers 2024 Annual Report
82
1 IPCC: Climate Change 2022: Mitigation of Climate Change. Contribution of Working Group III to the Sixth Assessment Report of the Intergovernmental
Panel on Climate Change.
2 Combustion of hydrogen and oxygen produces water vapour.
Decarbonisation will provide
Wesfarmers with opportunities
to invest in adjacent or
supporting industries and
growing markets.
New industries and
adjacencies
Globally, the transport sector accounts
for around one-fifth of global emissions,
70 per cent of which arise from road
vehicles.1 Decarbonising road transport
will require replacing fossil fuel-based
internal combustion engine vehicles with
battery-electric and hydrogen-electric
fuel cell vehicles.
Wesfarmers’ investment in integrated
lithium production and in advancing the
hydrogen supply chain plays a role
in supporting decarbonisation of the
transport sector. Further information
on the Covalent lithium project can
be found from page 36.
Customer preferences
Changing consumer preferences may
provide opportunities to invest in new or
growing markets, such as low-emissions
hydrogen, ammonia and other products
that support decarbonisation across
the economy.
For our retailers, omnichannel and circular
business models may evolve as demand
rises for low-emissions products and
products with sustainability credentials.
Growth opportunities
The energy
transition fuels
growth for
Coregas
Coregas is leveraging its expertise
in industrial and specialty gases to
advance its business and help fuel
the energy transition.
Coregas plays an important role
in the hydrogen supply chain in
Australia and New Zealand, with
customer and supplier net zero
targets and ambitions providing
opportunities for investment.
The launch of Coregas’ H2Station
– Australia’s first hydrogen refuelling
station for heavy vehicles –
supported Aluminium Revolutionary
Chassis Company (ARCC), Premier
Illawarra and Remondis to deploy
hydrogen vehicles in the Illawarra-
Shoalhaven region.
Coregas and Halcyon also launched
New Zealand’s first green hydrogen
fast refuelling station at Wiri,
South Auckland.
This year, Coregas expanded its
operations with the acquisition of a
hydrogen liquefier in Port Hastings,
Victoria. Prior to Coregas’
acquisition, the hydrogen liquefier
played an important role supporting
the Hydrogen Energy Supply Chain
pilot, which successfully
demonstrated that hydrogen can be
produced, liquefied and transported
to Japan. Currently, Coregas is
working with stakeholders to identify
opportunities to leverage this asset
to advance the hydrogen supply
chain for Australia.
During the year, Coregas also secured
a major contract to support a trial to
develop low-emissions aluminium.
The decarbonised process replaces
natural gas with hydrogen in the
calcination combustion process.
Coregas will be supplying liquid
oxygen, to enable the ‘clean’
combustion of hydrogen.2
Coregas’ expertise and focus on
partnerships has enabled it to
capture growth opportunities while
supporting decarbonisation efforts
of its customers and value chain.
Climate-related
disclosures
Operating and
financial review
Wesfarmers 2024 Annual Report
83
Partnerships are essential to support and accelerate operational
and value chain decarbonisation.
Partnerships and collaboration with governments, research organisations, industry,
suppliers, customers and others, help to trial, commercialise and scale up low-emissions
technologies and advance emerging solutions that support decarbonisation.
For some divisions, such as WesCEF, partnerships will be essential to support
operational decarbonisation of industrial processes. Diverse partners will be important
to the discovery and development of low-emissions technologies, as they are piloted
and become commercially viable and capable of operating at scale.
For other divisions, partnerships with suppliers, customers and adjacent businesses
will be essential to support value chain decarbonisation.
Partnerships
Policy and industry
engagement
During the year, Wesfarmers and its
divisions engaged with the Australian and
state governments, industry associations
and member organisations on policies
and actions to support climate action
and ensure Australia remains competitive
in the transition to a low-emissions
economy. Examples of the Group’s
engagement on climate policy include:
−
Mandatory climate-related
financial disclosures
Wesfarmers engaged in
consultations in support of Australia’s
proposed mandatory climate-related
financial disclosures. As part of the
consultations, we provided input into
the opportunities and challenges
associated with the standardisation
of sustainability reporting.
−
New vehicle efficiency standard
Bunnings, through industry
associations, provided insights
on critical issues affecting the retail
sector, while supporting Australia’s
New Vehicle Efficiency Standard to
accelerate transport decarbonisation.
−
Carbon leakage review
WesCEF supported the assessment
of measures to address carbon
leakage risks, including scope
to introduce a Carbon Border
Adjustment Mechanism to ensure
Australian emissions intensive
businesses remain internationally
competitive as they decarbonise.
−
Low-emissions ammonia
(green and blue)
Decarbonising ammonia production
will be essential to WesCEF’s net
zero roadmap. While low-emissions
ammonia produced from electrolysis
processes with renewable energy
is technically feasible, renewable
electricity supply and costs are
substantial barriers to deployment
at scale. Low-emissions ammonia
produced with natural gas and
CCUS is expected to play a critical
role in WesCEF’s net zero roadmap,
with policy reforms required to
advance CCUS and access to
natural gas during the transition.
During the year, in submissions
to the Australian and Western
Australian Governments, WesCEF
highlighted the challenges and
opportunities with low-emissions
ammonia production.
Partnerships
for transition
WesCEF’s 2050 net zero Scope 1
and Scope 2 target depends on the
deployment of a combination of
solutions, including new and
emerging technologies.
WesCEF collaborates and partners
with industry and researchers to
identify, study and deploy low-
emissions technologies and
solutions, including with:
−
Australian and state
governments to accelerate
implementation and investment
in low-emissions technology
−
APA Group and the Parmelia
Green Hydrogen Project to
investigate the feasibility of a
large-scale renewable hydrogen
production facility south of
Kwinana, Western Australia.
This project received funding
from the Australian Renewable
Energy Agency (ARENA) as
part of ARENA’s Advancing
Renewables Program
−
Jupiter Ionics, as part of a
consortium to develop novel
green ammonia technology,
to deploy small scale units
to produce distributed green
ammonia from renewable energy
−
Monash University as part of
the Australian Research Council
Research Hub for Carbon
Utilisation and Recycling
to develop technologies to
transform carbon dioxide
emissions into useful products
from the manufacturing and
energy sectors
−
Mitsui E&P Australia to study
low-emissions ammonia
solutions, including a carbon
capture and storage project.
A successful carbon dioxide
injection test was completed
during the year at Mitsui E&P
Australia’s proposed carbon
storage facility in Dongara,
Western Australia. This project
is now preparing for front-end
engineering design.
These partnerships aim to reduce
uncertainty relating to WesCEF’s net
zero roadmap and accelerate
commercialisation of technologies
detailed in its net zero roadmap.
Operating and financial review | Climate-related disclosures
Wesfarmers 2024 Annual Report
84
What our review covered
We reviewed the following Subject Matter
in the Annual Report and related website
content (the ‘Report’):
•
Wesfarmers’ approach to defining report
content (‘materiality assessment’)
•
Risk based check of disclosures in
Annual Report and related website
content
•
Disclosures in the ‘Climate-related
disclosures’ with reference to the
recommendations of the Task Force
on Climate-related Financial Disclosures
•
Wesfarmers’ reported alignment to
‘in accordance with’ requirements of
the Global Reporting Initiative’s (GRI)
Sustainability Reporting Standards
(‘GRI Standards’)
•
Selected material performance metrics
set out in the table below, presented
on Wesfarmers’ website under
wesfarmers.com.au/sustainability
as at 28 August 2024.
Performance metrics
Environment
• Greenhouse gas emissions (tonnes
CO2-e):
- Scope 1
- Scope 2 market-based
- Scope 2 location-based
- Scope 3
• Energy use (petajoules)
• Water use (megalitres)
• Operational waste disposed
(kilotonnes)
Safety, health and wellbeing
• Total Recordable Injury Frequency
Rate (%)
• Workers Compensation Claims (#)
Community contributions
• Direct community contributions
($million)
• Indirect community contributions
($million)
People, diversity and inclusion
• Team members by gender and
region (#)
• Team members by employment
type (#)
• Team members by gender and
age (%)
• Team members turnover rate (%)
• Female representation in leadership
roles (% female)
• New team member hires by gender
and employment type (#)
Advancing reconciliation
• Aboriginal and Torres Strait Islander
employment (#)
• Aboriginal and Torres Strait Islander
procurement spend ($million)
• Instances of cultural awareness
training (#)
Ethical sourcing
• Monitoring data:
- Number of suppliers (#)
- Number of suppliers in the ethical
sourcing program (#)
- Number of sites in the ethical
sourcing program (#)
- Number of sites monitored in the
ethical sourcing program (#)
- Number of sites with reportable
breaches (#)
- Number of reportable breaches (#)
- Number of suppliers or their sites
exited where remediation of a
reportable breach could not be
achieved (#)
- Number of sites with a grievance
mechanism deployed (#)
- Number of countries with a
grievance mechanism (#)
- Number of factory workers at a site
with a grievance mechanism (#)
• Sourcing locations of own-brand
goods:
- Number of own-brand supplier
sourcing locations (#)
- Top 10 own-brand supplier sourcing
locations (country)
• Modern slavery and ethical sourcing
training and capacity building:
- Number of suppliers trained (#)
- Number of team members trained (#)
- Supplier training hours (#)
- Team member training hours (#)
Other than as described in the preceding
paragraphs, which set out the scope of our
engagement, we did not perform assurance
procedures on the remaining information
included in the Report, and accordingly,
we do not express an opinion or conclusion
on this information.
Criteria applied by Wesfarmers
Limited
In preparing its sustainability disclosures,
Wesfarmers applied the following criteria:
•
GRI Standards, including the Reporting
Principles for defining report quality and
report content
•
National Greenhouse and Energy
Reporting Act 2007
•
National Greenhouse and Energy
Reporting Regulations 2008
•
National Greenhouse and Energy
Reporting (Measurement) Determination
2008 as amended
•
GHG Protocol Standards
•
Recommendations of the Task Force on
Climate-related Financial Disclosures;
and
•
Other Custom Criteria, as determined
by Wesfarmers, and as set out in its
Sustainability Reporting.
Key responsibilities
EY’s responsibility and independence
Our responsibility is to express a conclusion
on the Subject Matter based on our review.
We have complied with the independence
and relevant ethical requirements, which
are founded on fundamental principles of
integrity, objectivity, professional competence
and due care, confidentiality and professional
behaviour.
The firm applies Auditing Standard ASQM
1 Quality Management for Firms that
Perform Audits or Reviews of Financial
Reports and Other Financial Information,
or Other Assurance or Related Services
Independent Limited Assurance Statement to the Management
and Directors of Wesfarmers Limited
Our Conclusion: Ernst & Young (‘EY’, ‘we’) were engaged by Wesfarmers Limited (‘Wesfarmers’) to undertake a limited assurance engagement as defined by Australian Auditing Standards,
hereafter referred to as a ‘review’, over the Subject Matter defined below for the year ended 30 June 2024. Based on the procedures we have performed and the evidence we have
obtained, nothing has come to our attention that causes us to believe the Subject Matter has not been prepared, in all material respects, in accordance with the Criteria defined below.
A member firm of Ernst & Young Global Limited.
Liability limited by a scheme approved under Professional Standards Legislation
Patrick Miller
Partner
Engagements, which requires the firm to
design, implement and operate a system
of quality management including policies
or procedures regarding compliance with
ethical requirements, professional standards
and applicable legal and regulatory
requirements.
Wesfarmers’ responsibility
Wesfarmers’ management is responsible
for selecting the Criteria, and for presenting
the selected sustainability disclosures and
related information in the Annual Report in
accordance with that Criteria, in all material
respects. This responsibility includes
establishing and maintaining internal
controls, maintaining adequate records and
making estimates that are relevant to the
preparation of the subject matter, such that
it is free from material misstatement, whether
due to fraud or error.
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’) and the terms of reference for
this engagement as agreed with Wesfarmers
on 16 February 2024 and amended on
21 July 2024. That standard requires that
we plan and perform our engagement to
express a conclusion on whether anything
has come to our attention that causes
us to believe that the Subject Matter is
not prepared, in all material respects, in
accordance with the Criteria, and to issue
a report.
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.
The nature, timing, and extent of the
procedures selected depend on our
judgement, including an assessment of the
risk of material misstatement, whether due to
fraud or error. The procedures we performed
included, but were not limited to:
•
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
•
Assessing 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
•
Assessing the accuracy of calculations
performed
•
Obtaining evidence to support key
assumptions in calculations and other
data
•
Obtaining evidence for selected
management information
supporting assertions made in the
Subject Matter
•
Assessing that data and statements
had been accurately transcribed
from corporate systems and/or
supporting evidence
•
Assessing the presentation of
claims, case studies and data
against the relevant GRI principles
contained in the Criteria
•
Assessing the presentation of the
‘Climate-related disclosures’ with
reference to the Recommendations
of the Task Force on Climate-related
Financial Disclosures requirements
We believe that the evidence obtained
is sufficient and appropriate to provide a
basis for our review conclusion.
Inherent Limitations
Procedures performed in a review
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 review engagement is
substantially lower than the assurance
that would have been obtained had
a reasonable assurance engagement
been performed. Our procedures
were designed to obtain a limited level
of assurance on which to base our
conclusion and do not provide all the
evidence that would be required to
provide a reasonable level of assurance.
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.
The greenhouse gas quantification
process is subject to scientific
uncertainty, which arises because of
incomplete scientific knowledge about
the measurement of greenhouse
gases. Additionally, greenhouse gas
procedures are subject to estimation
and measurement uncertainty resulting
from the measurement and calculation
processes used to quantify emissions
within the bounds of existing scientific
knowledge.
Other matters
We have not performed assurance
procedures in respect of any information
relating to prior reporting periods,
including those presented in the
Subject Matter. Our report does not
extend to any disclosures or assertions
made by Wesfarmers relating to future
performance plans and/or strategies
disclosed in Wesfarmers’ report and
supporting disclosures online.
Use of our Assurance Report
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. Our
review included web-based information
that was available via web links as of the
date of this statement. We provide no
assurance over changes to the content
of this web-based information after the
date of this assurance statement.
Ernst & Young
Melbourne, Australia
28 August 2024
Operating and
financial review
Wesfarmers 2024 Annual Report
85
Independent Limited
Assurance Statement
Board of
Directors
Michael Chaney AO
CHAIRMAN
BSc, MBA, Hon. LLD W.Aust, FAICD
Age 74
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.
Michael was Chairman of National Australia Bank
Limited from 2005 to 2015 and of Woodside Petroleum
Limited from 2007 to 2018; a director of BHP and BHP
Billiton Limited from 1995 to 2005; Chancellor of The
University of Western Australia from 2005 to 2017 and
President of the Business Council of Australia from
2005 to 2007.
Directorships of listed entities (last three years),
other directorships/offices (current and recent):
- Director of Australians for Indigenous Constitutional
Recognition Ltd (since December 2022)
- Chairman of Northern Star Resources Limited
(since July 2021)
- Chairman of the National School Resourcing Board
(retired October 2023)
- Director of the Centre for Independent Studies
(retired July 2022)
- Member of the Gresham Resources Royalties Fund
Investment Committee (retired October 2022)
Rob Scott
MANAGING DIRECTOR
B.Comm, MAppFin, CA, GradDipAppFin, OLY
Age 55
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 Olympic Organising
Committee (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 Flybuys joint venture with Coles Group
Limited (since December 2018)
- Member of UWA Business School Advisory Board
(since August 2017)
- Chairman of Rowing Australia (retired June 2024)
Mike Roche
DIRECTOR
BSc, GAICD, FIA (London), FIAA (Australia)
Age 71
Term: Director since February 2019.
Skills and experience: Mike has more than 40 years’
experience in the finance sector where he held senior
positions firstly 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. He stepped down as Deutsche
Bank’s Chairman of Mergers and Acquisitions (Australia
and New Zealand) in 2016 and was a member of the
Takeovers Panel for two terms from 2008 to 2014.
Directorships of listed entities (last three years),
other directorships/offices (current and recent):
- Director of Macquarie Bank (since January 2021)
- Director of Macquarie Group (since January 2021)
- Director of MaxCap Group Pty Ltd (since April 2019)
- Director of Te Pahau Management Ltd
(since November 2017)
- Founder and Director of Sally Foundation
(since April 2013)
- Trustee Director of Energy Industries Superannuation
Scheme Pty Ltd (retired September 2021)
- Panel member of Adara Partners (Aust) Pty Ltd
(retired December 2022)
- Director of Six Park Asset Management
(retired February 2023)
Sharon Warburton
DIRECTOR
BBus (Accounting & Business Law), FCA, FAICD
Age 54
Term: Director since August 2019.
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. She was previously
Executive Director Strategy and Finance at Brookfield
Multiplex and held senior management roles with
ALDAR Properties PJSC in the United Arab Emirates,
Citigroup in Sydney and Rio Tinto Limited in London
and Perth.
Directorships of listed entities (last three years),
other directorships/offices (current and recent):
- Director of South 32 Limited (since November 2023)
- 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
(since July 2021)
- Director of Worley Limited (since February 2019)
- Director of Karlka Nyiyaparli Aboriginal Corporation
RNTBC (since December 2020)
- Member of the Australia Takeovers Panel
(retired April 2024)
- Director of Blackmores Limited (retired August 2023)
- Director of the Perth Children’s Hospital Foundation
(retired February 2023)
- Director of Gold Road Resources Limited
(retired September 2021)
Anil Sabharwal
DIRECTOR
BMath, BCompSc
Age 46
Term: Director since February 2021.
Skills and experience: Anil is Vice President of
Product Management at Google and the company’s
most senior product and engineering leader in Asia
Pacific. He is also an advisor to venture capital firm
AirTree Ventures. Anil’s experience in over 15 years
at Google includes leading the product strategy and
engineering team behind the launch of Google Photos
which reached more than 1 billion active users in less
than four years. He has also led product, design and
engineering for Google Chrome and ChromeOS, and
was on the founding team that built and launched
Google Drive. Anil currently leads Google’s Health
and Wearables division focussed on products that
safely help kids lead more active and independent
lives. Before joining Google, he 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. He holds an Honors Bachelor of
Mathematics in Computer Science from the University
of Waterloo.
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 at Google
(since April 2016, various other roles held at Google
since January 2009)
Governance
Wesfarmers 2024 Annual Report
86
The Right Honourable
Sir Bill English KNZM
DIRECTOR
BA(Hons), BCom (Otago)
Age 62
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. 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 TMG Cloudland (since January 2024)
- Director of Paul Ramsay Foundation
(since December 2021)
- Chairman of Jarden Wealth Investment Committee
(since June 2021)
- Director of The Todd Corporation Limited
(since May 2021)
- Director of Centre for Independent Studies
(since March 2021)
- 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)
- Director of The Instillery (resigned December 2023)
- Member of Macquarie Infrastructure and Real Assets’
Impact Advisory Group (resigned March 2022)
Jennifer Westacott AO
DIRECTOR
BA (Honours), FAICD, FIPAA, FANZSOG
Age 64
Term: Director since April 2013.
Skills and experience: Jennifer was Chief Executive
of the Business Council of Australia from 2011 to 2023.
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):
- Chancellor of Western Sydney University
(since January 2023)
- Director of Atco Australia Pty Ltd and ATCO Gas
Australia Networks Pty Ltd (since March 2024)
- Chair of Future Generation Global (since November 2023)
- Chair of Studio Schools of Australia (since July 2019)
- Chair of the Western Parkland City Authority
(since February 2019)
- Board member of Cyber Security Research Centre
(CSRC) Ltd (since February 2018)
- Special Advisor to KPMG (since July 2024)
- Business Champion to Indonesia for Department
of Foreign Affairs and Trade (since March 2024)
- Committee member of 2050 Point Paramatta
(since March 2024)
- Patron of The Pinnacle Foundation (since March 2019)
- Co-Patron of Pride in Diversity (since November 2017)
- Adjunct Professor at the City Futures Research Centre
of the University of New South Wales (since 2013)
- Patron of Fairbreak Global Pty Ltd
(retired December 2021)
Vanessa Wallace
DIRECTOR
B.Comm (UNSW), MBA (IMD Switzerland), MAICD
Age 60
Term: Director since July 2010.
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 was focussed
on financial services across the spectrum of wealth
management, retail banking and insurance as well as
the health providers and consumer products companies.
Her functional depth is in risk management, post-merger
integration and business growth associated with revenue
levers of channels, customers, and markets.
Directorships of listed entities (last three years),
other directorships/offices (current and recent):
- Chairman of Ecofibre Limited (since November 2021,
Director since July 2021)
- Director of SEEK Limited (since March 2017)
- Co-founder and Chairman of Drop Bio
Limited (since December 2018)
- Director of O’Connell Street Associates
(since June 2018)
- Director of Doctor Care Anywhere PLC
(retired March 2023)
- Director of Palladium Global Holdings Inc
(retired November 2023)
- Member of University of NSW Business School
Advisory Council (since April 2021)
- Managing Director of MF Advisory, providing advisory
services into Japan (since 2015)
Kate Munnings
DIRECTOR
LLB (UNSW), BHSc(Nursing) (UTS), AMP INSEAD
Age 57
Term: Director since August 2024.
Skills and experience: Kate holds a Bachelor
of Health Science (Nursing) (UTS) and a Bachelor
of Laws (UNSW). Kate is an accomplished senior
executive and director with a background in healthcare
and services, having commenced her career as
a registered nurse before studying law, practising
as a lawyer and working in senior executive and
board positions in healthcare organisations.
Directorships of listed entities (last three years),
other directorships/offices (current and recent):
- Chief Executive Officer of Vitrafy Life Sciences Ltd (since
January 2024)
- Director of Ryman Healthcare Limited (since November
2023)
- Chair of the Digital Health Cooperative Research Centre
(since November 2019)
- Managing Director and Chief Executive Officer of Virtus
Health Limited (from March 2020 to December 2023)
Alison Watkins AM
DIRECTOR
BCom, FCA, FAICD, F FIN
Age 61
Term: Director since September 2021.
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 from 1989 to 1999 and became a partner of
the firm in 1996 before moving to ANZ as Group General
Manager, Strategy.
Directorships of listed entities (last three years),
other directorships/offices (current and recent):
- Director of PGA Australia (since December 2022)
- Director of The Geoff Ogilvy Foundation (since
September 2022)
- 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)
- Director of Centre for Independent Studies (retired
June 2024)
- Member of Low Emissions Technology Roadmap
Ministerial Reference Panel (retired May 2023)
- Director of Business Council of Australia (retired
October 2021)
Alan Cransberg
DIRECTOR
BEng(Civil Eng) (Hons)
Age 65
Term: Director since October 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, processing and resources.
Alan joined Alcoa in 1980 and worked in a variety of
assignments and locations across their 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. Alan was previously a Director
and Chairman of the West Coast Eagles Football Club.
He was also a founding member of the Foundation to
Prevent Violence Against Women and Their Children,
as well as being a founding member of the CEO’s for
Gender Equity in Western Australia.
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 SAS 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
(resigned June 2023)
- Deputy Chairman of Peel Development Commission
(retired December 2021)
Governance
Wesfarmers 2024 Annual Report
87
Board of
Directors
Governance
Wesfarmers 2024 Annual Report
88
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 taking into account the interests of its stakeholders.
The 2024 Corporate Governance Statement on the company’s
website at wesfarmers.com.au/cg details the key aspects of the
governance framework and practices of Wesfarmers. Wesfarmers
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 2024 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 achieving its strategic plans
–
oversee good governance practice
–
set the Group’s risk appetite and review, approve and monitor
the Group’s financial and non-financial risk management systems
–
appoint the Group Managing Director and approve remuneration
of, and review the performance of, the Group Managing Director
and executive key management personnel
The Board aims to protect and enhance the interests of its
shareholders, while taking into account the interests of other
stakeholders, including team members, customers, suppliers,
government, regulators and the communities in which the Group’s
businesses operate.
A key area of responsibility of the Board is monitoring and guiding the
culture of the Group - with its unique focus on delivering satisfactory
returns to shareholders - and the reputation of the Group. The
Board maintains ultimate responsibility for strategy and control of
Wesfarmers and its businesses.
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 14 and 15 and in the corporate governance section of
the company’s website at wesfarmers.com.au/cg
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.
As at 30 June 2024, the Board comprised 10 directors, including nine
non-executive and independent directors. Detailed biographies of all
current directors are set out on pages 86 and 87.
Key focus areas of the Board during the 2024
financial year included:
– Overseeing the continuing development of the Covalent lithium
project through commissioning of the Mt Holland mine and
concentrator and construction and operational readiness
preparations at the Kwinana lithium hydroxide refinery
– Overseeing the continuing development of OnePass (the
Group's retail subscription program), shared data asset, online
marketplace offerings and omnichannel retail proposition
– Monitoring the Group’s safety performance, evaluating areas of
underperformance and overseeing implementation of strategies
to improve safety and enhance workplace safety awareness
– Reviewing and providing input into the business operations and
strategic plans of each division to drive 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 that leverage
Wesfarmers' capabilities and complement the existing portfolio
– Monitoring the Group’s operating and cash flow performance,
financial position and key metrics, including financial covenants
and credit ratings
– 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
– Overseeing sustainability risks, including by monitoring the
Group’s performance on key ESG metrics and overseeing
implementation of strategies to improve ESG performance and
enhance ESG awareness
– Evaluating cyber security and data privacy risks across the
Group and overseeing the implementation of measures to
manage those risks
– Overseeing the Group’s remuneration framework and
remuneration outcomes for senior management
– Reviewing the processes in place to attract, develop, motivate
and retain talent and overseeing succession planning
– Reviewing and updating policies, reporting and processes
to make improvements to the Group’s system of corporate
governance and compliance
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
as a diversified corporation. In fulfilling its roles and responsibilities, the
key focus areas of the Board during the 2024 financial year are set out
below.
Wesfarmers 2024 Annual Report
89
Corporate governance overview
Governance
Corporate governance
overview
Wesfarmers Board skills and experience
Leadership
Experience in a senior management position in a listed company, large or complex organisation
or government body.
5
5
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.
1
7
2
Financial acumen
Understanding of financial statements and reporting, key drivers of financial performance, corporate
finance and internal financial controls.
1
7
2
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.
6
4
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.
3
2
5
People and culture
Experience in overseeing workplace culture, people management, development and succession
planning, setting remuneration frameworks and promoting inclusion and diversity.
1
5
4
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.
5
5
Corporate transactions
Experience in assessing and completing complex business transactions, including mergers,
acquisitions, divestments, capital management, major projects and business integration.
1
6
3
Retail markets
Knowledge and experience in the retail and consumer goods industry, including merchandising, brand
development, customer relationships and supply chain.
3
2
5
Industrial, resources and infrastructure
Senior executive or non-executive director experience and expertise in the industrial, resources
or infrastructure sectors, including project construction.
3
4
3
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.
4
2
4
Government and regulatory engagement
Professional experience working or interacting with government and regulators.
3
4
3
Climate and decarbonisation
Understanding and experience in managing climate change risks and decarbonisation strategies.
6
3
1
Human rights and ethical sourcing
Understanding and experience in best practice in human rights and ethical sourcing.
5
4
1
Community engagement and social responsibility
Understanding and experience in community and stakeholder relations and corporate
social responsibility.
8
2
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.
6
2
2
Competent
Experienced
Expert
The Board, through the Nomination Committee, is responsible for
evaluating the composition, skills and experience of the Board to
ensure that the Board has the attributes required to fulfil its roles and
responsibilities. One aspect of this is an annual assessment of the
combined skills, experience and expertise of the Board against a skills
matrix which sets out the competencies relevant to the Wesfarmers
Board.
The process for completing the Board skills matrix requires each
director to complete an online self-assessment against the different
capability areas in the matrix, in which directors assess themselves
in each capability area on an ascending scale of competency -
‘competent’, ‘experienced’ and ‘expert’. While the description of what
is required to meet a particular level of competency varies by capability
area, the requirements generally move from:
–
at ‘competent’ level, a working understanding of the subject matter; to
–
at ‘experienced’ level, a sound knowledge of the subject matter
through time spent in the area as a director, executive or advisor, or
through formal study; to
–
at ‘expert level’, demonstrated and recognised expertise through
extensive tenure in the area as a director, executive or advisor.
Each director's self-assessment has been adjusted to account for
feedback from the other directors through the online platform's peer
review process. Directors have also been asked to provide evidence in
support of any capability areas in which they self-assessed as ‘expert’.
The adjusted Board skills matrix for the 2024 financial year is set out
below.1
The Board also augments its skills, experience and expertise through management and external advisors. The Board benefits from the
experience of David Cheesewright who has extensive experience in international retailing and manufacturing, including 19 years with Walmart.
He was appointed as an advisor to the Wesfarmers Board in August 2018.
1 Kate Munnings was appointed to the Wesfarmers Board on 1 August 2024 and did not participate in the Board skills matrix process in the 2024 financial year.
Governance
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90
Corporate governance overview
Director independence
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 30 June 2024 and considers that all nine non-executive
directors holding office at the time are independent.
Committees of the Board
The Board has established a Nomination Committee, a Remuneration
Committee, and an 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 2024 Corporate Governance Statement.
Role of the Nomination Committee
The Nomination Committee oversees Board succession planning.
As part of this role, the Nomination Committee is 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 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 the
longest-serving non-executive director). Periodically, a full evaluation
process is facilitated by an external consultant. More details are
available in the 2024 Corporate Governance Statement.
Key focus areas of the Nomination Committee
during the 2024 financial year included:
– Consideration of feedback from major shareholders during the
Chairman’s Roadshow conducted in late 2023
– Recommending to the Board the process for the Board,
committee and individual non-executive director performance
reviews, considering and discussing the outcomes and
recommendations from these review processes and agreeing
actions to be implemented
– Considering potential non-executive director candidates as part of
succession planning
– Considering and making recommendations to the Board regarding
director independence and tenure
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.
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 remuneration
package that includes fixed cash remuneration and a variable or
‘at risk’ component via participation in the Key Executive Equity
Performance Plan (KEEPP).
The Remuneration Committee and the Board conduct an annual
review of the fixed component of each executive KMP’s remuneration
package in which this is assessed against market remuneration
benchmarks for roles with comparable responsibilities in comparable
organisations.
The mix of remuneration components and the performance measures
used in the KEEPP have been chosen to ensure there is a strong link
between remuneration earned and the achievement of the Group’s
strategic 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 the Group Managing Director, for the 2024
financial year have been undertaken. More details about Wesfarmers’
performance and development review process for the executive KMP
are set out in the 2024 Corporate Governance Statement.
Key focus areas of the Remuneration Committee
during the 2024 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, including
consideration of any new plans
– Reviewing and making recommendations to the Board for the
vesting outcomes of the 2019 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 and reporting to the Workplace
Equality Agency
Wesfarmers 2024 Annual Report
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Corporate governance overview
Governance
Corporate governance
overview
Role of the Wesfarmers Audit and Risk
Committee
The Wesfarmers Audit and Risk Committee assists the Board in
fulfilling its responsibilities in overseeing the company’s financial
reporting, compliance with its requirements (legal and regulatory)
and other commitments. This includes setting, articulating and
monitoring 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.
Role of the external auditor
The company’s external auditor is Ernst & Young. 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. Ms Fiona Campbell will replace Mr Hammond as lead
audit partner for the year ending 30 June 2025 in line with the auditor
rotation requirements under the Corporations Act 2001.
Ernst & Young has provided the required independence declaration
to the Board for the financial year ended 30 June 2024. The
independence declaration forms part of the directors’ report and is
provided on page 97.
Governance policies
The corporate governance section of the company’s website at
wesfarmers.com.au/cg contains access to all relevant corporate
governance information, including Board and committee charters,
and Group policies referred to in the 2024 Corporate Governance
Statement.
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 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 their
own actions and decisions reference and reinforce Wesfarmers’
values, and 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.
The company’s share registry, Computershare, provides shareholders
with the option to receive communications from and send
communications to the registry electronically. Contact information
for Computershare and other information relating to shareholder
communications is available on the company’s website at
wesfarmers.com.au/investor-centre/your-shareholding/
shareholder-communications
For sustainability reasons, shareholders are encouraged to elect to
receive documents relating to their shareholding electronically.
Key focus areas of the Wesfarmers Audit and
Risk Committee during the 2024 financial year
included:
– Reviewing and assessing the Group’s processes to ensure the
integrity of financial statements and reporting, and associated
compliance with accounting, taxation, legal and regulatory
requirements
– Reviewing and recommending to the Board amendments to the
Group's data governance framework, including setting out the
requirements for data collection, classification, integrity, access,
security, use, retention and disposal
– Overseeing the Group's technology and cyber security governance
framework, including the evolution of the Group's maturity
assessment processes
– Reviewing and recommending to the Board for approval public
disclosures regarding climate and other sustainability-related
matters, including disclosures in the annual report and on the
company's sustainability website, the company's annual modern
slavery statement and other climate change reporting
– Reviewing, assessing and monitoring:
– the effectiveness of the Group’s relevant frameworks for emissions
reduction
– engagement with the company’s key stakeholders on material
sustainability topics
– the progress made towards achievement of the Group's sustainability-
related targets and commitments
– Preparing for the Group's compliance with new sustainability
reporting and governance requirements
– Monitoring the ethical sourcing of products and services throughout
the Group to ensure there are appropriate processes and controls
in place to manage the risk of modern slavery
– Reviewing the Group’s risk management framework and systems
of internal control, 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
– A review of the effectiveness of divisional risk management
frameworks
– Reviewing and recommending to the Board amendments to
the Group’s risk appetite statement to reflect existing, new and
emerging sources of financial and non-financial 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, sustainability,
the environment, legal liability, compliance with key governance
policies, including the Wesfarmers Code of Conduct, whistleblower
reporting, information technology, cyber security, data privacy and
the Group's approach to human rights
– Overseeing the Group’s internal audit program, including approving
the annual internal audit plan
– Overseeing the payroll assurance and remediation activities of the
relevant Group businesses
– Developing the framework for the review of the external auditor
– Reviewing and assessing the performance of the Group's external
auditor, including their independence, objectivity and professional
scepticism, quality of the engagement team and quality of
communications
Governance
Wesfarmers 2024 Annual Report
92
Corporate governance overview
Risk management
Wesfarmers believes that good risk management practice is crucial
for 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 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 that is underpinned by the
Wesfarmers Way, including Wesfarmers’ core values.
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.
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
–
reinforces the responsibility of divisional management and Group
management in:
• identifying, understanding and managing the risks within their
respective realms of responsibility
• seeking to ensure that business operations and risk-taking
remain within the risk appetite
• implementing appropriate action if risk exposure is deemed to
be either too conservative or outside risk appetite.
Risk Management Framework
The Wesfarmers Risk Management Framework is reviewed by the
Board on an annual basis 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 May 2024.
The Group Risk Appetite Statement was reviewed and updated
in May 2024 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 essential. 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 Wesfarmers is best
equipped for future growth.
Wesfarmers’ Diverse, Inclusive and Respectful Workplaces 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 pages 62 and 63
and in the 2024 Corporate Governance Statement.
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Structured and
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Wesfarmers 2024 Annual Report
93
Directors' report
Wesfarmers Limited and its controlled entities
Directors’
report
The information appearing on pages 6 to 92 forms part of the directors’ report for the financial year ended 30 June 2024 and is to be read in
conjunction with the following information:
Results and dividends
2024
2023
Year ended 30 June
$m
$m
Profit
Profit attributable to equity holders of the parent
2,557
2,465
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 2024:
(a) for the year ended 30 June 2023:
(i) fully-franked final dividend of 103 cents (2022: 100 cents) per share paid on 5 October 2023 (as disclosed in
last year’s directors’ report)
1,169
1,134
(b) for the year ended 30 June 2024:
(i) fully-franked interim dividend of 91 cents (2023: 88 cents) per share paid on 27 March 2024
1,033
998
(ii) fully-franked final dividend of 107 cents (2023: 103 cents) per share to be paid on 9 October 2024
1,214
1,169
*
The payment of dividends for the 2022 and 2023 Deferred Shares and Performance Shares issued under the Key Executive Equity Performance Plan (KEEPP)
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, see the remuneration report on
pages 98 to 127.
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 and provision of health, beauty and wellness products and services;
• management of retail subscription program shared data asset and online marketplace;
• wholesale distribution of pharmaceutical goods;
• manufacturing and distribution of chemicals and fertilisers;
• participation in a joint venture for an integrated lithium project, including operation of a mine and concentrator and development of a
refinery;
• industrial and safety product distribution;
• gas processing and distribution; and
• management of the Group's investments.
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
• K M Munnings
• 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 2023 to 30 June 2024, except for K M Munnings who was appointed as a director of
the company effective from 1 August 2024.
Wesfarmers has announced the appointment of F von Oertzen as a director of the company, with the appointment effective from
1 October 2024. Further information on Mr von Oertzen's appointment is available at wesfarmers.com.au
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.
Directors' report
Wesfarmers 2024 Annual Report
94
Directors' report
Wesfarmers Limited and its controlled entities
Directors' shareholdings
Securities in the company in which directors had a relevant interest as at the date of this report are:
Shares
M A Chaney
87,597
A J Cransberg
4,473
S W English
5,347
K M Munnings
1,375
M Roche
13,500
A Sabharwal
6,502
R G Scott*
1,073,216
V M Wallace
13,983
S L Warburton
7,536
A M Watkins
9,000
J A Westacott
6,788
*
R G Scott holds 336,879 KEEPP Deferred Shares (previously referred to as Restricted Shares) and 277,352 KEEPP Performance Shares. For further details, see the
remuneration report on pages 98 to 127.
Directors’ meetings
The following table sets out the number of directors’ meetings (including meetings of Board committees) held during the year ended
30 June 2024 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
M A Chaney3
7
7
-
-
8
8
4
4
A J Cransberg
7
7
-
-
8
8
4
4
S W English
7
7
7
7
-
-
4
4
M Roche
7
7
-
-
8
8
4
4
A Sabharwal
7
7
7
7
-
-
4
4
R G Scott
7
7
-
-
-
-
-
-
V M Wallace
7
7
-
-
8
7
4
4
S L Warburton4
7
7
7
7
-
-
4
4
A M Watkins
7
7
-
-
8
8
4
4
J A Westacott5
7
6
7
7
-
-
4
3
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 all meetings of the Audit and Risk Committee held during the year.
4 Notwithstanding she is not a member, S L Warburton attended all meetings of the Remuneration Committee held during the year.
5 J A Westacott was absent under a leave of absence approved by the Board for one meeting.
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 liabilities 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
–
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;
• provide for insurance against certain liabilities incurred as an officer; 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 from liability incurred as an officer of the company
or its related bodies corporate 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.
Wesfarmers 2024 Annual Report
95
Directors' report
Wesfarmers Limited and its controlled entities
Directors’
report
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.
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 in March 2020 and held the position of Company Secretary
of Wesfarmers Limited for the period 2 March 2020 to 30 October 2023. While in the role of Executive General Manager, Company Secretariat,
Vicki was a member of the Wesfarmers Leadership Team and she was the Company Secretary of a number of Wesfarmers Group subsidiary
companies. 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 is director of RACWA Holdings Pty Ltd, RAC Finance Ltd, St Ives Group Pty Ltd and Perron
Institute for Neurological and Translational Science Ltd. She was a member of the Methodist Ladies College Council from 2018 to 2024 and a
director of the Black Swan State Theatre company from 2009 to 2018. Vicki is a Fellow of the Governance Institute of Australia and a member
of the Australian Institute of Company Directors.
Following Vicki's retirement, Sheldon Renkema was appointed Executive General Manager, Company Secretariat on 30 October 2023 and was
appointed as Company Secretary of Wesfarmers Limited from this same date and a member of the Wesfarmers Leadership Team on that date.
From July 2021, Sheldon was General Manager of Business Development at Wesfarmers Chemicals, Energy & Fertilisers. Prior to that, Sheldon
held roles within the Wesfarmers Corporate Office, including leading the corporate and retail legal teams. He commenced at Wesfarmers in
2007 as a legal counsel and has a background in advising on corporate transactions. Sheldon holds a Bachelor of Laws (Honours) degree from
Murdoch University, a Master of Business Administration degree from the Australian Graduate School of Management at the University of New
South Wales and is a Graduate of the Australian Institute of Company Directors. He was admitted to practise as a barrister and solicitor in 2001.
From 2019 to 2024, Sheldon was a director of Activ Foundation Limited.
Significant changes in the state of affairs
Particulars of the significant changes in the state of affairs of the Group during the financial year are as follows:
• revenue from ordinary activities up from $43,550 million to $44,189 million
• net profit for the year up from $2,465 million to $2,557 million
• dividends per share of $1.98 (2023: $1.91 per share)
• total assets up from $26,546 million to $27,309 million
• shareholders’ equity up from $8,281 million to $8,585 million
• net debt up from $4,009 million to $4,272 million
• net cash flows from operating activities up from $4,179 million to $4,594 million
Review of results and operations
The operations, financial position, business strategies and prospects for future financial years of the Group are detailed in the operating and
financial review on pages 16 to 85.
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 107 cents per share resulting in a dividend payment of $1,214 million was determined with a payment date of
9 October 2024. The final dividend has not been provided for in the 30 June 2024 full-year financial statements.
Directors' report
Wesfarmers 2024 Annual Report
96
Directors' report
Wesfarmers Limited and its controlled entities
Non-audit services
Ernst & Young provided non-audit services to the Group during the year ended 30 June 2024 and received or is due to receive the following
amounts for the provision of these services:
$’000
Tax compliance
562
Other
-
Total
562
The total non-audit services fees of $562 thousand represents 8.1 per cent of the total fees paid or payable to Ernst & Young and related
practices for the year ended 30 June 2024. Total non-audit services fees and other assurance and agreed-upon procedures fees were
$1,302 thousand. Further details of amounts paid or payable to Ernst & Young and its related practices are disclosed in note 27 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).
External auditor quality review assessment
Wesfarmers conducts an external auditor quality review process annually following the completion of the audit of the Group's financial
statements and remuneration report. The quality review process considers a range of external and internal information sources to assess the:
• external auditor's independence, objectivity and professional scepticism;
• quality of the audit engagement team; and
• quality of the communications with the external auditor.
The findings of the annual review are considered by the Audit and Risk Committee as part of its consideration of the external auditor's
appointment and the feedback provided is used to improve the external audit process.
The annual review following the completion of the audit of the financial statements and remuneration report for the year ended 30 June 2023
reaffirmed the Group's position that, while there are some opportunities for improvement, the quality of Ernst & Young's service in their
performance of the external audit is sound.
The Audit and Risk Committee will also perform a periodic comprehensive review of the external auditor at least every five years, in accordance
with the guidelines issued by the Australian Institute of Company Directors, with the first comprehensive review to be completed for the year
ended 30 June 2024. The comprehensive review will have regard to the annual auditor quality review assessment but is extended to include
additional qualitative and quantitative data. The findings of the comprehensive review will be published in the 2025 annual report.
Wesfarmers 2024 Annual Report
97
Directors' report
Wesfarmers Limited and its controlled entities
Directors’
report
The directors received the declaration below from Ernst & Young:
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 2024,
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.
Ernst & Young
T S Hammond
Partner
28 August 2024
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
Environmental regulation and performance
The activities of the Group are subject to environmental regulation by various authorities throughout Australia and the other countries in which
the Group operates.
Licences granted to the Group 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.
Corporate governance
In recognising the need for high standards of corporate behaviour and accountability, the directors of Wesfarmers Limited believe the
governance policies and practices adopted for the year ended 30 June 2024 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. The full corporate governance statement is available in the corporate governance
section of the company’s website at 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.
Ernst & Young
11 Mounts Bay Road
Perth WA 6000 Australia
GPO Box M939 Perth WA 6843
Tel: +61 8 9429 2222
Fax: +61 8 9429 2436
ey.com/au
Wesfarmers 2024 Annual Report
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Remuneration report
Directors' report
Dear Shareholders,
On behalf of the Board, I am pleased to
present the 2024 Remuneration Report.
Over the 2024 financial year, our businesses have executed well and
the Board is pleased with the Group's overall financial performance.
Sustained improvements in productivity and efficiency have enabled
our divisions to continue to provide compelling value for customers
in uncertain trading and market conditions. Group net profit after tax
(NPAT) was $2,557 million, an increase of 3.7 per cent on the prior
year, and reflected pleasing earnings growth in the retail divisions.
We have continued to deliver long-term shareholder returns, with
dividends (determined) in the 2024 financial year increasing by 3.7
per cent to $1.98, and our five-year total shareholder return (TSR) of
17.4 per cent per annum outperforming the ASX 100 over the same
period (7.6 per cent per annum). In this report, we explain how our
remuneration for the executive key management personnel (KMP)
for the 2024 financial year and other remuneration-related decisions
taken by the Board reflect this performance.
Our approach and framework
The Key Executive Equity Performance Plan (KEEPP), which was
introduced in 2016, is the variable incentive plan for the executive
KMP. It is heavily weighted to long-dated equity, creating a strong
relationship between executive KMP remuneration and performance,
as well as alignment with shareholder outcomes. The Board did not
make any changes to fundamentals of the KEEPP structure during
the 2024 financial year.
The Board incorporates shareholder feedback into the approach
to remuneration, and shareholders have continued to support our
framework, with more than 96 per cent of votes in favour of the
Remuneration Report at the 2023 Annual General Meeting. 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 who are
also eligible to receive a portion of their KEEPP award in cash).
This equity is restricted for up to six years, thereby directly linking
long-term shareholder value and the value of current and prior
year share grants;
–
at least 50 per cent of all executive KMP's share awards are
subject to further performance testing over a four-year period
subsequent to grant against a range of measures, including
Wesfarmers' TSR performance relative to that of the S&P/ASX
100.
In the annual KEEPP scorecards, prior to 1 July 2021, the
weighting to financial performance measures was 60 per cent, with
a 30 per cent weighting attributed to the individual performance
objectives, and the balance being attributed to a safety performance
measure. These weightings were adjusted for the 2022 financial year
to 55 per cent and 20 per cent respectively to facilitate the inclusion
of a 15 per cent weighting to the Group ecosystem (including data
and digital initiatives) performance measure. This change was to
emphasise the importance of the Group ecosystem initiative to the
Group and to drive focus on this Group-wide initiative across the
retail businesses.
For the 2025 financial year, the Board has approved the removal of
the separately weighted Group ecosystem performance measure
from the annual KEEPP scorecards. Weightings will revert to
60 per cent to financial performance measures and 30 per cent to
individual performance objectives. This reflects the Board's comfort
that progress on Group data and digital initiatives is now well
embedded in strategic and operational plans and no longer requires
a separate measure in the scorecard.
Company performance
As noted above, the Board is pleased with the Group's overall
financial performance for the 2024 financial year.
Bunnings demonstrated the resilience of its offer and ability to deliver
growth through a range of market conditions. Kmart Group delivered
significant earnings growth, supported by its market-leading
value credentials. WesCEF's earnings were impacted by lower
global commodity prices, but operating performance was strong.
Officeworks and Industrial and Safety delivered continued earnings
growth, and the Wesfarmers Health result reflected ongoing
investment and transformation activities. The Catch result was
an improvement on the prior financial year, following actions
to reduce costs, clear inventory and shift focus towards the
third-party marketplace, although the result did include $23 million
in restructuring costs and a non-cash impairment to Catch's brand
value. Significant enhancements made to the OnePass program
during the financial year broadened the benefits to members, with
new retail partnerships and unique online and instore benefits
providing additional value. These benefits saw growth in OnePass’
member base, improved customer retention and drove incremental
sales for Wesfarmers’ businesses during the financial year.
Safety outcomes within Bunnings have again been disappointing.
Following a deterioration in the total recordable injury frequency rate
(TRIFR) in the 2023 financial year, Bunnings implemented strategies
to improve safety outcomes, but the impacts have not yet flowed
through to results. For the second year, the safety result in Bunnings
meant there was no award made to the Group Managing Director,
Group Chief Financial Officer, and Managing Director, Bunnings
Group in respect of the safety component in their annual KEEPP
scorecards for the 2024 financial year. The Board is supportive of
measures undertaken within Bunnings to address safety outcomes,
and looks forward to improved TRIFR in the 2025 financial year.
Remuneration outcomes
In relation to financial measures, the published financial results for
the 2024 financial year were adopted for remuneration purposes.
The Board considered the financial components of the scorecard
outcomes for the executive KMP to be fair and reasonable, and
did not make any adjustments. After considering the individual
contributions from each of the executive KMP, alongside the
business performance over the 2024 financial year measured
against the demanding and ambitious targets within the 2024
KEEPP scorecards, the Board has approved above target KEEPP
outcomes for all participants, except for the Managing Director,
Bunnings Group, as set out in more detail in sections 5.2 to 5.4.
Group Managing Director
The Board continues to be pleased with the performance of the
Group Managing Director. The financial component of his annual
KEEPP scorecard for the 2024 financial year was measured against
NPAT and return on equity (ROE) targets for the Group as a whole.
Group NPAT and Group ROE were above target for both measures
and therefore 89.8 per cent of the maximum KEEPP award was
made for the financial component. TRIFR for the Group did not
reach the threshold level of performance set by the Board in the
2024 KEEPP scorecard, as a result of the Bunnings Group TRIFR
outcome, resulting in no award for that component.
The remaining 35 per cent non-financial component was awarded
at an average level of 84.5 per cent of the maximum. The total 2024
Message from the Chairman of
the Remuneration Committee
Wesfarmers 2024 Annual Report
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Remuneration report
Directors’
report
KEEPP award represents 79.0 per cent of the Group Managing
Director's maximum variable remuneration opportunity.
Other executive KMP
The total 2024 KEEPP awards for the other executive KMP as a
percentage of their maximum variable incentive opportunities were
77.9 per cent for the Group Chief Financial Officer, 97.0 per cent
for the Managing Director, Kmart Group, and 63.6 per cent for the
Managing Director, Bunnings Group (inclusive of the minimum grant
of KEEPP Performance Shares).
Vesting of 2020 KEEPP Performance Shares
Following 30 June 2024, the Board assessed the vesting outcomes
of the 2020 KEEPP Performance Shares against the performance
conditions set for each participant.
The four-year TSR result accounts for 80 per cent of the vesting
result of the 2020 KEEPP Performance Shares for the Group
Managing Director and Group Chief Financial Officer – an increase
from 60 per cent under the 2019 KEEPP Performance Shares
following the removal of the ‘strategic objectives’ component.
For the divisional managing directors, the TSR result continues to
account for 50 per cent of the vesting result.
Over the four-year performance period, Wesfarmers Limited shares
recorded a TSR of 99.95 per cent, placing it at the 71st percentile
relative to peer companies in the S&P/ASX 100. As a result, the
component subject to the relative TSR performance condition vested
at 92.4 per cent.
For the Group Managing Director and Group Chief Financial Officer,
the Board’s assessment of their performance in relation to their
portfolio management and investment outcomes accounts for the
remaining 20 per cent of the vesting result. Performance over the
four-year period was assessed. The assessment resulted in vesting
of the portfolio management and investment outcomes component
at 60.0 per cent. Further details of these results are provided in
section 5.5.
For the divisional managing directors, the remaining 50 per cent
of the award was based on divisional outcomes over the four-year
performance period. The 2020 KEEPP was the first year annual
earnings before tax (EBT) results were measured against individually
weighted annual hurdles.
The Managing Director, Bunnings Group's divisional hurdle was
annual EBT subject to average return on capital (ROC). After
exceeding the ROC gate, Bunnings Group exceeded the annual EBT
targets for three out of the four years and partially met the targets in
one year resulting in this component vesting overall at 98.7 per cent
for the Managing Director, Bunnings Group.
The Managing Director, Kmart Group had a similarly structured
Kmart Group performance hurdle, plus, due to Catch being
included within Kmart Group at the start of the performance period,
a performance hurdle relating to Catch Gross Transaction Value
(GTV) and the customer lifetime value and cost per acquisition
ratio. 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 the Managing Director, Kmart Group's
2020 Performance Shares subject to divisional financial performance
will no longer be assessed against Catch, with Kmart Group EBT
and ROC being the relevant performance conditions from this time.
The performance hurdles were set during the COVID-19 pandemic.
Consistent with the approach taken to the KEEPP scorecard targets
in the 2021 and 2022 financial years and with the approach for
the 2019 KEEPP Performance Share hurdles, as detailed in the
2023 Annual Report, the Board determined it was appropriate to
make a corresponding COVID-19 adjustment to the respective EBT
and ROC performance targets for Kmart Group for the 2022 financial
year. There was no adjustment to the Catch targets, nor to the
Bunnings EBT and ROC targets.
Following assessment, Kmart Group exceeded the annual EBT
target in each year and partially met the Catch GTV target,
resulting in this component vesting overall at 94.0 per cent for
the Managing Director, Kmart Group. The Board acknowledges
that Catch has underperformed in recent years and this has been
recognised in the incentives for other Group executives.
Further details of these results are provided in section 5.5.
Fixed annual remuneration for executive KMP
As reported in the 2023 Remuneration Report, the Board approved
a four per cent increase to the annual fixed remuneration of the
Group Managing Director to $2,600,000, which became effective
on 1 October 2023. No other changes were made to the fixed
remuneration for the executive KMP during the 2024 financial year.
In July 2024, as part of the annual remuneration review cycle,
the Board considered the fixed remuneration for the executive
KMP. Following consideration, no change was approved to the
fixed remuneration for the Group Managing Director. The Board
determined there was a need to increase fixed remuneration for the
Group Chief Financial Officer, the Managing Director, Kmart Group
and the Managing Director, Bunnings Group. These are the first
increases in fixed remuneration for these three executive KMP since
2021. Further details are provided in section 5.1.
Non-executive director fees
In June 2024, the Board reviewed the fees payable to the
non-executive directors having regard to benchmark data, market
position and relative fees. Benchmarking data of the ASX 25
indicated that the Chairman's fee was below the median of our
peers. Following consideration, the Board, excluding the Chairman,
approved a 7.1 per cent increase to the Chairman's fee, effective
from 1 July 2024, from $770,000 to $825,000 per annum. This
was the first increase in the Chairman’s fee since January 2017. No
other changes to Board member or committee fees were approved.
Further details are provided in section 6.1.
The Board aggregate fee limit (AFL) was also reviewed by the
Board in June 2024. The Board endorsed an increase to the AFL,
from $3.6 million to $4.0 million, for which shareholder approval
will be sought at the 2024 Annual General Meeting. If approved by
shareholders, the increase to the AFL would be the first since 2015.
The table on the following page summarises the remuneration
outcomes for the executive KMP for 2024. Refer to the relevant
section of this report as indicated for further information.
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 2024 Annual Report
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Remuneration report
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Executive KMP 2024 remuneration outcomes summary
The information in the tables below summarises the remuneration outcomes for the executive KMP for the 2024 financial year. Refer to the
relevant section in this report for further information.
Rob Scott
Anthony Gianotti
Ian Bailey
Mike Schneider
Section
Group Managing
Director
Group Chief
Financial Officer
Managing Director,
Kmart Group
Managing Director,
Bunnings Group
Fixed remuneration
Fixed annual
remuneration (FAR)
The Board conducts
an annual review of the
remuneration for the executive
KMP, including benchmarking
to peer companies and roles.
Changes to FAR approved by
the Board in July 2023 that
became effective during the
2024 financial year
Increased by
$100,000 to
$2,600,000
effective
1 October 2023
Remained
unchanged at
$1,450,000
Remained
unchanged at
$1,550,000
Remained
unchanged at
$1,700,000
5.1
Changes to FAR approved by
the Board in July 2024 that will
become effective during the
2025 financial year
No change
approved
Increase to
$1,550,000
effective
1 October 2024
Increase to
$1,650,000
effective
1 October 2024
Increase to
$1,800,000
effective
1 October 2024
To determine the 2024 KEEPP outcomes, executive KMP performance for the 2024 financial year was measured against the performance
measures in the annual KEEPP scorecards for the 2024 financial year. 2024 KEEPP outcomes for each executive KMP are summarised below.
2024 KEEPP scorecard outcomes
Scorecard
measures
(weightings)
Financial (55%)
89.8% of
maximum
89.8% of
maximum
100% of
maximum
56.1% of
maximum
5.2
to
5.4
Group ecosystem (15%)
75.0% of
maximum
70.8% of
maximum
83.3% of
maximum
75.0% of
maximum
Safety (10%)
0.0% of
maximum
0.0% of
maximum
100% of
maximum
0.0% of
maximum
Business enhancing (10%)
and Sustainability (10%)
91.7% of
maximum
89.2% of
maximum
97.5% of
maximum
92.5% of
maximum
2024 KEEPP scorecard outcomes
Amount available for allocation, including minimum Performance
Shares
$6,161,691
79.0% of maximum
$3,387,390
77.9% of maximum
$4,510,500
97.0% of maximum
$3,244,980
63.6% of maximum
2024 KEEPP cash amount
To be paid in August 2024
N/A
KEEPP delivered
entirely in shares
N/A
KEEPP delivered
entirely in shares
30.0% of FAR
30.0% of FAR
2024 KEEPP Deferred Shares
To be allocated later in FY25, subject to vesting and
restriction conditions for up to 6 years
118.5% of FAR1
116.8% of FAR
130.5% of FAR
75.9% of FAR
2024 KEEPP Performance Shares
To be allocated later in FY25 and subject to vesting
and performance conditions for 4 years
118.5% of FAR1
116.8% of FAR
130.5% of FAR
85.0% of FAR
Following the end of the 2024 financial year, KEEPP Performance Share awards from prior years that were due to vest, were tested and vested
to the executive KMP, as set out in the table below.
Vesting of prior year performance share awards
2020 KEEPP
Performance Shares
vesting result
Vesting result
85.9%
85.9%
93.2%
95.5%
5.5
Number of shares vested
24,580
13,901
12,971
37,042
Number of shares
forfeited
4,029
2,278
947
1,726
Other information for the 2024 financial year is shown in the table below.
Vested and unrestricted shareholdings
Pre-vesting and pre-release risk and conduct check
completed by the Audit and Risk Committee for all
equity grants.
4(b)
As at the date of this report, the market value of
shareholding (direct or beneficial) for each executive
KMP is at least equal to or greater than FAR.
5.8
1 Allocation for the Group Managing Director is subject to shareholder approval at the 2024 Annual General Meeting.
Wesfarmers 2024 Annual Report
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Directors' report
1.
2024 Key management personnel
102
2.
Overview of Group performance
103
3.
KEEPP history for the Group Managing Director
104
Executive remuneration
4.
Executive KMP remuneration framework and policy
105
5.
Executive KMP remuneration
108
5.1
Fixed annual remuneration (FAR)
108
5.2
2024 KEEPP award outcomes
108
5.3
Details of the 2024 KEEPP scorecards
108
5.4
Assessment and outcome of the 2024 KEEPP scorecards
109
5.5
2020 KEEPP awards that vested during the 2024 financial year
114
5.6
Executive KMP remuneration (statutory presentation)
116
5.7
Details of equity allocated during the 2024 financial year
118
5.8
Executive KMP share ownership
122
5.9
Executive service agreements
122
Non-executive director remuneration
6.
Non-executive directors
123
6.1
Overview of non-executive director remuneration policy and arrangements
123
6.2
Non-executive director fees and other benefits
123
6.3
Non-executive director remuneration
124
6.4
Non-executive director share ownership
125
Other remuneration information
7.
Remuneration governance
126
7.1
Role of the Board and the Remuneration Committee
126
7.2
Non-executive director remuneration
126
7.3
Use of remuneration consultants
126
8.
Further information on remuneration
127
8.1
Share trading restrictions
127
8.2
Other transactions and balances with key management personnel
127
9.
Independent audit of remuneration report
127
Contents
Wesfarmers 2024 Annual Report
102
Remuneration report (audited)
Directors' report
1. 2024 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 2024 financial year are as follows:
Directors for the 2024 financial year
Michael Chaney AO (Chairman)
These directors were members of the Board of Wesfarmers Limited
throughout the whole of the 2024 financial year.
Vanessa Wallace
Jennifer Westacott AO
The Right Honourable Sir Bill English KNZM
Mike Roche
Sharon Warburton
Anil Sabharwal
Alison Watkins AM
Alan Cransberg
Executive KMP for the 2024 financial year
Rob Scott, Group Managing Director
These executive KMP held their positions throughout the whole of
the 2024 financial year.
Anthony Gianotti, Group Chief Financial Officer
Ian Bailey, Managing Director, Kmart Group
Michael Schneider, Managing Director, Bunnings Group
On 16 July 2024, Wesfarmers announced that Kate Munnings would join the Wesfarmers Limited Board as a non-executive director, effective
from 1 August 2024, and will stand for election at the 2024 AGM.
On 28 August 2024, Wesfarmers resolved to appoint Friedrich (Tom) von Oertzen as a non-executive director of the Wesfarmers Limited Board,
effective from 1 October 2024. Mr von Oertzen will stand for election at the 2024 AGM.
There have been no other changes to KMP since 30 June 2024.
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2. Overview of Group performance
Wesfarmers’ results for the 2024 financial year demonstrated the quality of the Group's portfolio of businesses and strength of execution
in a challenging market environment, which included cost of living pressures, rising costs of doing business, subdued activity in residential
construction and significant volatility in key commodities.
Wesfarmers' businesses executed well, with the retail divisions responding effectively as households increasingly shifted to value during the
financial year. Sales and earnings growth in the retail divisions was supported by everyday low price offerings and products with broad customer
appeal. The Group benefited from improvements in productivity and efficiency, which was the result of ongoing investment and a proactive focus
in recent years. These improvements enabled the retail divisions to provide compelling value for customers and mitigate cost of doing business
pressures.
Bunnings recorded sales growth in consumer and commercial segments, with pleasing growth in the second half. Kmart Group's performance
was a standout, delivering significant earnings growth supported by the market-leading value credentials of its Anko products, unique sourcing
capabilities and actions to reduce costs.
Lower global commodity prices impacted earnings at WesCEF but operating performance remained strong. Officeworks and
Industrial and Safety delivered continued earnings growth. Wesfarmers Health also increased earnings while continuing to invest in
transformation activities and integrate recent acquisitions. The Catch result was an improvement on the prior financial year following actions to
reduce costs, clear inventory and shift the focus towards the third-party marketplace. Actions are now shifting from remediation to scaling the
marketplace and better utilisation of supply chain assets and capabilities.
Benefits to members of the OnePass program were further expanded, generating growth in the member base, improving customer retention
and driving incremental sales for Wesfarmers’ businesses during the financial year.
The Group reported statutory NPAT of $2,557 million for the 2024 financial year.
Five-year statutory results
Financial year ended 30 June (as reported)
2020
2021
2022
2023
2024
Net profit after tax (NPAT) ($m)
1,697
2,380
2,352
2,465
2,557
NPAT (excluding significant items) ($m)1
2,075
2,421
2,352
2,465
2,557
Return on equity (ROE) (rolling 12 months) (%)2
17.83
25.83
29.4
31.4
31.3
ROE (excluding significant items) (rolling 12 months) (%)1
22.1
26.1
29.4
31.4
31.3
Earnings per share (EPS) (cents)
150.03
210.43
207.8
217.8
225.7
EPS (excluding significant items) (cents)1
183.4
214.1
207.8
217.8
225.7
1 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
financial year disposals of $83 million, offset by the $298 million non-cash impairment of the Industrial and Safety division, and the $520 million non-cash impairment
of the Target brand name and other assets and associated restructuring costs and provisions in the Kmart Group. The Board exercises its judgement in determining
whether these significant items are adjusted for when determining remuneration outcomes.
2 This is considered a non-IFRS measure.
3 2020, 2021 EPS and ROE include the items outlined in footnote 1 above.
Five-year shareholder returns
Financial year ended 30 June (as reported)
2020
2021
2022
2023
2024
Total dividends per share (determined) (cents)
1703
178
180
191
198
Closing share price ($ as at 30 June)1
44.83
59.10
41.91
49.34
65.18
Five-year rolling Total Shareholder Return (%, per annum)2
15.9
21.5
13.8
12.5
17.4
ASX 100 five-year rolling Total Shareholder Return (%, per annum)2
5.8
11.2
7.1
7.7
7.6
1 The opening share price on 1 July 2019 was $36.23.
2 Source: Bloomberg.
3 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.
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Remuneration report (audited)
Directors' report
3. KEEPP history for the Group Managing Director
The table below summarises the KEEPP scorecard outcomes, the associated awards of KEEPP Deferred Shares and KEEPP Performance
Shares, and the vesting levels for the KEEPP Performance Shares for the Group Managing Director.
The financial measures for the Group Managing Director in the KEEPP scorecards have been NPAT and ROE and these accounted for
60 per cent of the weighting for the scorecard in the 2018 to 2021 financial years and 55 per cent of the weighting for the scorecard in the
2022, 2023 and 2024 financial years.
Relative TSR accounted for 50 per cent of the performance conditions for the 2017 KEEPP Performance Shares, 60 per cent of the
performance conditions for the 2018 and 2019 KEEPP Performance Shares, and 80 per cent of the performance conditions since the 2020
KEEPP Performance Shares award.
KEEPP
scorecard
performance
period
Percentage of maximum
opportunity granted
KEEPP
Performance
Shares performance
period
Percentage of
Performance
Shares
vested
(%)
Deferred
Shares
(%)
Performance
Shares1
(%)
2017 KEEPP2
1 July 2016 – 30 June 2017
100.0
100.0
1 July 2017 – 30 June 2021
95.5
2018 KEEPP
1 July 2017 – 30 June 2018
84.4
84.4
1 July 2018 – 30 June 2022
95.0
2019 KEEPP
1 July 2018 – 30 June 2019
86.6
86.6
1 July 2019 – 30 June 2023
87.0
2020 KEEPP
1 July 2019 – 30 June 2020
37.0
37.0
1 July 2020 – 30 June 2024
85.9
2021 KEEPP
1 July 2020 – 30 June 2021
98.3
98.3
1 July 2021 – 30 June 2025
Not yet vested
2022 KEEPP
1 July 2021 – 30 June 2022
91.4
91.4
1 July 2022 – 30 June 2026
2023 KEEPP
1 July 2022 – 30 June 2023
65.0
66.7
1 July 2023 – 30 June 2027
2024 KEEPP
1 July 2023 – 30 June 2024
79.03
79.03
1 July 2024 – 30 June 2028
1 Including minimum Performance Shares where applicable.
2 The 2017 KEEPP scorecard outcome relates to Mr Scott's performance as Managing Director, Wesfarmers Industrials, and the 2017 KEEPP Performance Shares
performance period relates to his time as Group Managing Director.
3 Allocation of 2024 KEEPP Performance Shares and Deferred Shares to Mr Scott is subject to shareholder approval at the 2024 Annual General Meeting.
The charts below summarise the performance of the Group for two key performance measures under the KEEPP over the same time frames as
above.
Excluding significant items Including significant items
0
15
10
5
ROE (%)
25
45
20
35
40
30
2017
2019
2018
2020
2021
2022
2023
2024
TSR: Wesfarmers and ASX100
(3-month moving average)
0
200
150
100
300
350
250
2017
2019
2018
2020
2021
2022
2023
2024
WES
+233%
ASX100
+109%
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Remuneration report (audited)
Directors’
report
Executive remuneration
4. Executive KMP remuneration framework and policy
Wesfarmers’ primary objective is to provide satisfactory returns to shareholders over the long term. Wesfarmers considers that we can only
achieve our primary objective by: looking after our team members, customers and suppliers; taking care of the environment; by acting ethically
and honestly in all of our dealings; and by making meaningful contributions to the communities in which the Group operates.
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 16-17) and the Group’s overall strategies. The Board also believes embedding the right culture and
ensuring the Group operates within effective risk management protocols are enablers of strategic execution over the long term.
Our guiding remuneration principles
1
Attract, motivate and retain world-class talent and outstanding people to drive outcomes
2
Align executive and stakeholder interests through share ownership while strengthening focus on Group results through
awards of long-term, at-risk deferred equity
3
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
4
Recognise and reward high performance with a strong focus on the long term
5
Align effective risk management and demonstration of appropriate behaviours, ethics and values with rewards
6
Drive strategic achievement, which aligns with long-term shareholder interests
The Board considers these principles in setting the executive KMP remuneration framework.
(a) Remuneration mix
The charts below show each component of the remuneration framework for the executive KMP as a percentage of total remuneration.
1 The sum of the components of total remuneration do not equal 100 per cent in some instances, due to rounding.
2 Under the KEEPP scorecard process, 100 per cent of FAR as Performance Shares is the minimum allocation for the Group Managing Director and the
Group Chief Financial Officer, and 85 per cent of FAR for the divisional managing directors. These Performance Shares vest only to the extent the performance
conditions are met over the following four years. This ensures that variable remuneration is sufficiently tied to performance over time. Notwithstanding this, the Board
has discretion to reduce the number of Deferred Shares and/or Performance Shares to be allocated, or to award no Deferred Shares and/or Performance Shares if,
in its view, this outcome is fair and reasonable.
Group Managing Director and Group Chief Financial Officer1
Total
target
remuneration
33.3%
33.3%
33.3%
Total
maximum
remuneration
25.0%
37.5%
37.5%
50.0%
Total
minimum
remuneration2
10.0%
28.3%
28.3%
33.3%
Total
target
remuneration
7.5%
33.8%
33.8%
25.0%
Total
maximum
remuneration
Total
minimum
remuneration2
Other Executive KMP (divisional managing directors)1
50.0%
54.1%
45.9%
Fixed remuneration
(guaranteed)
KEEPP Deferred Shares
(variable and at-risk
remuneration)
KEEPP cash
(variable remuneration)
KEEPP Performance
Shares (variable and
at-risk remuneration)
Key:
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Directors' report
(b) 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.
FAR
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 our 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. For the 2024 financial year, this was split
into financial performance measures, 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,
target and stretch level of performance required for each performance 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 delivery vehicles. See section 5.2 to 5.4 for further information on the KEEPP scorecards. The
Board has discretion to adjust the scorecard measures or objectives where, in its opinion, it is appropriate to do so.
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, excluding any Performance Shares awarded to ensure
the minimum Performance Shares level is achieved. For awards above this level, a maximum of 30 per cent of FAR may be awarded in cash. This
represents 15 per cent of an 'at target' award or 10 per cent of a 'stretch level' award.
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.
KEEPP equity awards are 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 shares vest (with the
dividends then paid to the participant), or upon forfeiture (with the dividends then paid to the trustee). 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 relevant unquoted shares to be quoted on the ASX.
Where the KEEPP scorecard process results in an award 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 ensures variable remuneration is sufficiently tied to performance over time. Notwithstanding
this, the Board has discretion to reduce the number of Deferred Shares and/or Performance Shares to be allocated, or to award no Deferred Shares
and/or Performance Shares if, in its view, this outcome is fair and reasonable.
Determining outcomes
Performance outcomes against the KEEPP scorecard:
Vesting outcomes for KEEPP Performance Shares:
The financial performance measures and safety performance
measures are assessed after the preparation and audit of the
relevant results each financial 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.
Performance Shares allocated as a result of KEEPP scorecard outcomes are
subject to further performance conditions over a four-year performance period.
Performance against measures, including performance of Wesfarmers' TSR relative
to the TSR of the constituents of the S&P/ASX 100 Index, divisional financial
performance and Wesfarmers portfolio management and investment outcomes,
is measured over a four-year performance period. Vesting of Performance Shares
occurs only to the extent that performance conditions are met. These are tested
following the availability of audited results at the end of the performance period,
independent calculation of rTSR and assessment of any non-financial performance
conditions.
Board consideration of other factors
Prior to the Remuneration Committee recommending any variable remuneration outcomes to the Board (for example, for the KEEPP scorecards or
the vesting or release of KEEPP shares), the Audit and Risk Committee completes a risk and audit check for each executive KMP.
Prior to finalising the KEEPP scorecard outcome, the Board calibrates the scorecard result with the personal performance and behaviours of each
participant and the consideration of whether the calculated outcome is fair and reasonable, including that it is not inappropriate or simply formulaic.
Prior to finalising the vesting result for KEEPP Performance Shares, the Board considers whether the outcomes are fair and reasonable rather than
simply formulaic. Further, the Board has discretion to adjust the performance conditions in appropriate circumstances, so that participants are not
unfairly advantaged or disadvantaged by, for example, portfolio management activity or external events.
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(c) 2023 KEEPP life cycle
The life cycle for each element of the 2023 KEEPP is set out below. The 2023 KEEPP follows this life cycle and was awarded in the 2024
financial year, based on performance during the 2023 financial year. For further information on the timing for the 2023 KEEPP award, see
section 5.7.
Scorecards established
Scorecards are established at the beginning of the 12-month period, for each executive KMP, and include
financial and non-financial performance measures.
Scorecard period
12-month period (1 July 2022 to 30 June 2023)
Performance assessed
Performance was assessed after
the end of the 2023 financial year.
The financial and safety performance measures are assessed after the preparation and audit of the relevant
results each financial year. The Group ecosystem performance measures and individual performance outcomes
are simultaneously assessed after a review against the measures and objectives set.
Award determined
KEEPP awards were determined
following performance
assessment in August 2023,
after the end of the 12-month
scorecard period.
For details of the assessment
and outcomes of the 2023
KEEPP scorecards and
the determination of the
2023 KEEPP awards see
sections 5.2 - 5.4 of the
2023 Remuneration Report.
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, 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.
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 four-year performance period) will be allocated to achieve that level.
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 consideration by
the Board as to whether to exercise its judgement to apply modifiers to decrease or increase the amount of the
award. Prior to finalising the scorecard outcome, the Board calibrates 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.
KEEPP awards are then delivered as follows:
–
Equity: 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 'on target' or above awards, 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 equal to the 10-day, volume-weighted average
price (VWAP) of Wesfarmers shares typically over the period following the full-year results announcement 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 2023 KEEPP award was 30 August to 12 September 2023.
The allocation of equity generally occurs shortly after the Annual General Meeting. While the equity is
unquoted, the payment of any dividends on these shares 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.
–
Cash: KEEPP participants other than the Group Managing Director and the Group Chief Financial
Officer may receive a cash component where the award exceeds 100 per cent of FAR, excluding any
Performance Shares allocated to achieve the minimum award of Performance Shares. An award above
that level is paid in cash up to a maximum of 30 per cent of FAR, with the remainder then delivered in
equity. Any cash is generally paid in August, following the release of Wesfarmers’ full-year results.
Deferred Shares and
Performance Shares
allocated
Deferred Shares and
Performance Shares were
allocated following the 2023
Wesfarmers AGM.
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. Deferred Shares are also subject to
trading restrictions, which are lifted in three equal tranches after four, five and six years.
Performance Shares: Performance Shares remain at risk and will vest only to the extent further performance
conditions are met when tested over a future four-year performance period.
Deferred Shares and Performance Shares are granted as newly-issued, unquoted securities. An application to
quote the shares is made upon vesting or forfeiture of the shares.
Final number of vested
Performance Shares
determined
Performance Shares will vest
to the participant four years
after grant, to the extent that
performance conditions are met.
Performance Shares: four-year performance period
Performance Shares are held in trust and can only be transferred to the executive KMP once vested. The
performance conditions relating to the 2023 KEEPP Performance Shares are role-specific and will be tested
over a four-year period ending 30 June 2027. The Performance Shares will only vest to the extent that these
conditions are met. At the end of the 2027 financial year, the Board has discretion to adjust the vesting result for
the 2023 KEEPP Performance Shares to ensure participants are not unfairly advantaged or disadvantaged by, for
example, portfolio management or external events.
Deferred Shares released
Deferred Shares will be released
to the participant after four, five
and six years.
Deferred Shares: 12-month forfeiture and four-, five- and six-year trading restrictions
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 2023 KEEPP Deferred Shares, one-third will be released from the
trading restriction in August 2027, one-third will be released in August 2028 and the remainder released in August
2029.
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Directors' report
5. Executive KMP remuneration
5.1 Fixed annual remuneration (FAR)
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.
As outlined in the 2023 Remuneration Report, in July 2023, the Board approved an increase of $100,000 per annum for Mr Scott, taking
his FAR to $2,600,000, which took effect from 1 October 2023. This increase is the first change in FAR since Mr Scott's appointment as
Group Managing Director in November 2017.
There were no changes to FAR approved for the other executive KMP for the 2024 financial year.
In July 2024, the Board undertook a review of the remuneration for the executive KMP to apply from October 2024. Following this review,
the Board concluded that there was a need to increase the FAR for the Group Chief Financial Officer, Managing Director, Kmart Group and
Managing Director, Bunnings Group. This will be the first change in fixed remuneration for these executive KMP since October 2021.
The Board considered each executive KMP’s performance and leadership, the strong company performance delivered and the shareholder
value created, and the competitiveness of each remuneration package, including the impact on FAR in real terms given sustained elevated
inflation. In addition, the Board acknowledges the variable remuneration opportunity under the KEEPP is lower in comparison to some peer
companies, and is delivered in long-dated equity, has no cash component for the Group Managing Director and the Group Chief Financial Officer
and a smaller cash component for the other executive KMP. Further, the Board also acknowledges the KEEPP is subject to more rigorous
testing than most other plans in the market (with the initial award determined by annual performance and then at least half of the equity subject
to further performance conditions over the following four years). After considering these factors, the Board firmly believes these increases are
justified and in the best interests of the company, and therefore shareholders. Following consideration, there will be no change to the fixed
remuneration for the Group Managing Director.
5.2 2024 KEEPP award outcomes
The 2024 KEEPP award outcomes relate to performance from 1 July 2023 to 30 June 2024. The table below sets out specific information
relating to the actual award outcomes for the 2024 financial year.
Name
Balance available for allocation
Percentage of
maximum 2024 KEEPP
opportunity awarded
%
Percentage of
maximum 2024 KEEPP
opportunity forfeited
%
for Deferred
Shares
($)
for Performance
Shares1
($)
for cash
award
($)
R G Scott
3,080,845
3,080,845
Not eligible
79.0
21.0
A N Gianotti
1,693,695
1,693,695
Not eligible
77.9
22.1
I Bailey
2,022,750
2,022,750
465,000
97.0
3.0
M D Schneider
1,289,980
1,445,000
510,000
63.6
36.4
1 Inclusive of the minimum KEEPP Performance Shares award for Mr Schneider.
The cash component for the 2024 KEEPP award is expected to be paid to Mr Bailey and Mr Schneider on 30 August 2024. The KEEPP
Deferred Shares and KEEPP Performance Shares are expected to be allocated in November 2024 once performance conditions are set, subject
to shareholder approval at the 2024 Annual General Meeting in the case of the Group Managing Director. Further details of these grants will be
provided in the 2025 Remuneration Report.
5.3 Details of the 2024 KEEPP scorecards
The 2024 KEEPP scorecards comprise financial performance measures, 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. The Group ecosystem measures were introduced in 2022 KEEPP scorecards and it is expected that these will not be
included as a separately weighted measure in scorecards beyond the 2024 financial year. In the KEEPP scorecards, the performance measures
set by the Board are designed to drive strategic outcomes that benefit the Group and our shareholders. The Board takes a balanced approach
to setting the performance range for objectives, including setting the threshold and stretch performance targets, as well as in assessing the
outcomes. The maximum outcome under the KEEPP scorecards can only be achieved if all of the financial performance measures, safety
performance measures, the Group ecosystem performance measures and the individual performance objectives are assessed at stretch
performance and the Board judges this outcome to be fair and reasonable.
Targets set by the Board are assessed to seek to ensure they are 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
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. Section 5.4 contains further information on the KEEPP scorecards for the 2024 financial year.
Financial performance measures (55 per cent weighting)
Scorecard financial targets are set in relation to the annual budgets. 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 participants are not unfairly advantaged or disadvantaged by, for example, portfolio management activity.
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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) and sales growth 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
participants are not unfairly advantaged or disadvantaged by, for example, portfolio management activity.
Threshold performance is required for EBT and ROC before any award is made in respect of either of these measures. Threshold EBT
performance is also required before any award is made in respect of sales growth.
Safety performance measures (10 per cent weighting)
Safety targets are generally based upon an improvement on the previous financial year’s result. 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.
No award will be made in respect of the relevant safety measure if there is a fatality or a significant incident, for example, a workplace event that
resulted in serious harm or a life-altering injury or illness (physical or psychological) within a managed entity.
Group ecosystem performance measures (including data and digital initiatives) (15 per cent weighting)
The Board again approved that the scorecard measures should have an appropriate focus on the Group ecosystem and other data and digital
initiatives. As a result, to ensure the executive KMP are incentivised to deliver suitable returns from the Group ecosystem and other data and
digital initiatives, the Board approved the continuation of the 15 per cent weighting to the Group ecosystem performance measures in the 2024
KEEPP scorecards. The Group ecosystem measure will no longer be a separately weighted performance measure for future years. Instead,
targets relating to the Group ecosystem and other data and digital initiatives will be included within the individual performance objectives.
In the 2024 KEEPP scorecards, the Group ecosystem targets are customised based upon the participant’s role and the specific circumstances
and strategic priorities of the Group and/or division, as appropriate.
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 the
Group and divisional level. These 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. Progress against the Group ecosystem measures is assessed by the Board following a review of
performance against the objectives by the Group Managing Director or Chairman, as appropriate, as part of the performance review cycle.
Individual performance objectives (20 per cent weighting)
Individual performance objectives are specific to the participant’s role and the Group/division's circumstances and strategic priorities. Where
the Board considers 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.
The individual performance objectives are split into two categories, comprising business enhancing objectives and sustainability objectives,
each with 10 per cent weighting. The individual performance objectives were chosen because they are key focus areas in enabling the Group
to achieve our 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 are designed to maximise business and growth opportunities over the long term. Examples include assessing
growth and investment opportunities and operational optimisation projects. Sustainability objectives are set in several interrelated areas where
strong performance is recognised as a driver of long-term shareholder value. This includes our corporate reputation as well as Group-wide
initiatives, such as progress against emissions reduction targets and operational risk controls, including cyber security. Sustainability objectives
also have regard to team diversity measures, such as gender balance and Indigenous employment, recognising that maintaining diverse teams,
which reflect the diversity of the communities they serve, make our businesses more resilient and provides incremental growth opportunities.
5.4 Assessment and outcome of the 2024 KEEPP scorecards
In assessing the 2024 KEEPP scorecards, the Board reviewed performance against the financial measures and the non-financial measures in
the scorecard, plus any other factors it considers relevant, before determining the scorecard outcome and the allocation of any KEEPP Deferred
Shares and KEEPP Performance Shares. The divisional managing directors may also receive an allocation of cash where applicable.
Assessment and consideration of other factors
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 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 2024 KEEPP scorecard and final outcome for each of the executive KMP for the 2024 KEEPP
allocation are outlined on the following pages.
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Directors' report
Rob Scott - Group Managing Director
2024 KEEPP award
Mr Scott's total 2024 KEEPP outcome, being 79.0 per cent of the
maximum opportunity, will be allocated as:
Deferred Shares
Performance Shares
$3,080,845
$3,080,845
2024 Performance highlights
Financial (55% weighting)
Outcome: 89.8% of maximum opportunity / 148.2% of FAR
Wesfarmers 2024 financial results
Mr Scott's financial targets were set in relation to achievement of the Group's NPAT
and ROE targets. Threshold performance was set at 90% of target with maximum at
105%
The Board continues to be very pleased with the performance and strategic leadership
of Mr Scott in achieving the Group’s financial results for the 2024 financial year under
challenging economic conditions. As a result, Mr Scott achieved 89.8% of the maximum
opportunity on financial measures.
Group NPAT
Group ROE
Target
$2,448m
30.6%
Result
$2,557m
31.3%
Group ecosystem (15% weighting)
Outcome: 75.0% of maximum opportunity / 33.8% of FAR
The Board continues to be pleased with the work and progress made throughout the financial year in relation to the Group ecosystem,
specifically the development of the shared data platform and the OnePass program. The total number of OnePass accounts continues to
grow with the benefits attributable to divisions from increased transaction frequency and sales. The relaunch with the improved offering in the
first half of the financial year was well received by customers. Divisional alignment among the retail and health divisions in relation to the Group
ecosystem and digital and data initiatives is strong. As the Group's capabilities in data and digital continue to mature and are incorporated
in the retail and health division strategies, the Board is confident momentum will continue without the Group ecosystem being a separately
weighted measure in future years.
Safety (10% weighting)
Outcome: 0% of maximum opportunity / 0% of FAR
The Group TRIFR result was 10.99, which was below the Group TRIFR target of 9.43. This result was again largely due to the safety results in
Bunnings Group. Significant effort and investment was directed to Bunnings' safety reporting, processes and training throughout the financial year,
and this intensive focus will continue throughout the 2025 financial year. There were no fatalities and no significant incidents (being a workplace
event that resulted in serious harm or a life-altering injury or illness, either physical or psychological) across managed entities. As this result was
below the minimum performance level set by the Board, no award was made in respect of safety. The safety and wellbeing of all team members
across the Group remains the highest priority and therefore the 2024 financial year TRIFR result is disappointing. The Board looks forward to
improved results in the 2025 financial year, and is closely monitoring Bunnings Group's three-year safety improvement plan.
Business enhancing (10% weighting)
Outcome: 83.3% of maximum opportunity / 25.0% of FAR
Business growth: Progress continued on the construction of the Kwinana lithium hydroxide refinery, which was approximately 80 per cent
complete at the end of the financial year. The concentrator was commissioned and the first sale of spodumene concentrate occurred this
financial year. The supply chain projects across the Group have progressed with pleasing results from recent investments and initiatives and
solid progress towards longer-term plans.
Turnaround/newly acquired businesses: The Health division again ended the financial year with financial performance ahead of budget with
momentum building across retail and wholesale. Pleasingly, Industrial and Safety has continued to grow year on year. Remediation activities in
Catch have reduced losses and established a lower cost and capital-light model for scaling the marketplace, but further work and progress is
required to deliver satisfactory returns.
Sustainability (10% weighting)
Outcome: 100% of maximum opportunity / 30.0% of FAR
Strong progress was made with talent development and the Board is pleased with the quality of succession planning at a Group and divisional
level. The Group’s Scope 1 and Scope 2 (market-based) emissions reduced by 5.4 per cent, with the divisions continuing progress towards
their interim and long-term targets. Reductions in Scope 2 emissions were achieved by further increases in renewable electricity generation and
renewable electricity purchases. Gender balance has improved across all areas of management. Indigenous employment remains above parity
for Australian team members with 87 graduates of the Wesfarmers Indigenous Leadership Program earning a Cert II or Cert IV in Indigenous
Leadership. Based on internal and independent surveys and assessments of brand strength and reputation, the reputation of Wesfarmers and our
major divisions remains strong with Group and sustainability reporting highly regarded.
2024 KEEPP scorecard
Scorecard measure
Weighting
(%)
Threshold
not met
Threshold
achieved
Threshold
exceeded
Target
achieved
Target
exceeded
Maximum
achieved
Financial
55
Group ecosystem
15
Safety
10
Business enhancing
Business growth
10
Turnaround/newly acquired businesses
Sustainability
Reputation
10
Risk management
People and culture
Climate change-related initiatives
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Anthony Gianotti - Group Chief Financial Officer
2024 KEEPP award
Mr Gianotti's total 2024 KEEPP outcome, being 77.9 per cent of the
maximum opportunity, will be allocated as:
Deferred Shares
Performance Shares
$1,693,695
$1,693,695
2024 Performance highlights
Financial (55% weighting)
Wesfarmers 2024 financial results
Mr Gianotti has contributed significantly to the financial results of the Group for the
2024 financial year. Mr Gianotti's strong commercial and financial oversight of the
Group, combined with detailed attention to cash and capital management, were key in
delivering growth in profit and cash flows in difficult economic conditions.
As Group Chief Financial Officer, Mr Gianotti's Group financial measures were the
same as those of the Group Managing Director. As a result, Mr Gianotti achieved
89.8% of the maximum opportunity on financial measures.
Group NPAT
Group ROE
Target
$2,448m
30.6%
Result
$2,557m
31.3%
Group ecosystem (15% weighting)
Mr Gianotti has continued to provide support to the Group's digital ecosystem. His active involvement with the OneDigital Board, financial and
risk management oversight and commercial expertise have been significant to OneDigital's continued strengthening, including the OnePass
platform. In addition, during the financial year he has had a particular focus on the appointment of financially and commercially strong
individuals to support the program and assist with key strategic projects.
Safety (10% weighting)
Mr Gianotti's Group safety measure was the same as for the Group Managing Director. As this result was below the minimum performance level
set by the Board, no award was made in respect of safety.
Business enhancing (10% weighting)
As per prior years, Mr Gianotti continued to deliver very effective management of the Group's balance sheet and external relationships with
the capital markets, particularly debt providers, investors, analysts and rating agencies. Mr Gianotti has successfully supported a number of
business improvement projects across the Group, for example, within OneDigital, Health, WesCEF and Kmart Group, and has played a key role in
Group-wide supply chain initiatives. Mr Gianotti provided strong cash and capital management over the 2024 financial year. In addition, Mr Gianotti
has overseen pleasing improvements in cost and productivity within the Industrial and Safety division.
Sustainability (10% weighting)
Group risk, especially cyber risk, has again been a significant focus for Mr Gianotti throughout the financial year with continued maturation of the
risk and compliance frameworks at the Group and divisional level. Cyber risk and management strategies continue to evolve rapidly with good
progress during the financial year. Within his focus on talent management, Mr Gianotti plays a leading role in the attraction, development and
retention of key commercial and financial talent across the Corporate finance and business development teams, together with divisional roles. This
has enabled a strengthening of the succession pipelines. Further, Mr Gianotti has contributed to significant change processes to support readiness
to report pursuant to the new Australian sustainability reporting standards and to implement the Sphera ESG data system, and efforts to better
embed ESG considerations into annual risk and corporate planning processes.
2024 KEEPP scorecard
Scorecard measure
Weighting
(%)
Threshold
not met
Threshold
achieved
Threshold
exceeded
Target
achieved
Target
exceeded
Maximum
achieved
Financial
55
Group ecosystem
15
Safety
10
Business enhancing
Balance sheet and capital management
10
Business growth
Turnaround/newly acquired businesses
Sustainability
Reputation
10
Risk management
People and culture
Climate change-related initiatives
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Ian Bailey - Managing Director, Kmart Group
2024 KEEPP award
Mr Bailey's total 2024 KEEPP outcome,
being 97.0 per cent of the maximum opportunity,
will be allocated as:
KEEPP cash
Deferred Shares
Performance Shares
$465,000
$2,022,750
$2,022,750
2024 Performance highlights
Financial (55% weighting)
Mr Bailey's financial targets were set in relation to the achievement of Kmart Group EBT and ROC and Kmart comparable sales growth.
Threshold performance for the EBT and ROC measures was set at 90% of target with stretch performance at 105%.
Kmart Group 2024 financial results
The performance of Kmart Group throughout the 2024 financial year has been very
strong, reflecting the strength of Mr Bailey’s leadership, the continued transformation
of the division over this year and recent years, as well as other digitisation, growth and
productivity initiatives across a number of areas. Kmart Group has delivered strong
financial results for the financial year with EBT, ROC and sales growth more than 20%
above target. As a result, Mr Bailey achieved the maximum 2024 KEEPP outcome on
financial measures.
EBT
ROC
Kmart comparable
sales growth
$957.8m
65.7%
6.4%
Group ecosystem (15% weighting)
Mr Bailey has continued to make a significant contribution to the Group ecosystem through the OneDigital Board, and Kmart Group has taken
a leading role in the development of the OnePass program. His support to the Group Managing Director and to the OneDigital and Flybuys
boards is highly valued.
Safety (10% weighting)
Kmart Group TRIFR for the financial year was 6.45, which was 4.2% above target, and a 13.3% improvement on the prior year.
Business enhancing (10% weighting)
The transformation to more deeply integrate Target into the Kmart Group, led by Mr Bailey early in the 2024 financial year, was well-executed,
and has delivered the expected value. In addition, Mr Bailey has continued to drive Kmart Group's strategic priorities and to build the Anko
Global business, laying strong foundations for future performance.
Sustainability (10% weighting)
Kmart Group again achieved strong Aboriginal and Torres Strait Islander employment outcomes and maintained gender balance in all areas
of management. Kmart Group is on track to achieve its renewable energy target by the end of the 2025 financial year, progressing renewable
electricity contracts during the financial year. Kmart Group's ethical sourcing program remains leading. The risk and data governance
framework across Kmart Group, including cyber security, continues to mature. Talent management and succession planning within Kmart
Group continues to develop in a positive manner with strong development and promotion of talent within the division. Pleasingly, Kmart
continues to be one of the most trusted brands within Australia, further strengthening its corporate reputation.
2024 KEEPP scorecard
Scorecard measure
Weighting
(%)
Threshold
not met
Threshold
achieved
Threshold
exceeded
Target
achieved
Target
exceeded
Maximum
achieved
Financial
EBT
55
ROC
Kmart comparable sales growth
Group ecosystem
15
Safety
10
Business enhancing
Business growth
10
Turnaround/newly acquired businesses
Sustainability
Reputation
10
Risk management
People and culture
Climate change-related initiatives
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Michael Schneider – Managing Director, Bunnings Group
2024 KEEPP award
Mr Schneider’s total 2024 KEEPP outcome,
being 63.6 per cent of the maximum opportunity,
will be allocated as:
KEEPP cash
Deferred Shares
Performance Shares
$510,000
$1,289,980
$1,445,000
2024 Performance highlights
Financial (55% weighting)
Mr Schneider’s financial targets were set in relation to the achievement of Bunnings Group EBT, ROC and total sales growth. Threshold
performance for the EBT and ROC measures was set at 90% of target with stretch performance at 105%.
Bunnings Group 2024 financial results
Under Mr Schneider's leadership, Bunnings has continued to deliver pleasing financial
results and growth through a range of market conditions. Bunnings again delivered
record EBT for the year and very strong ROC although the EBT result was below the
Board-approved budget for the 2024 financial year by between 0 and 5%. ROC however,
was between 5 and 10% above target. Total sales growth (including trade centres) did not
meet threshold for the financial year. The Board acknowledges the Bunnings sales budget
for the 2024 financial year was ambitious, given the weakening economic environment,
especially in the commercial sector. In total, Mr Schneider's 2024 KEEPP outcome on
financial measures was 92.5% of FAR.
EBT
ROC
Sales growth
$2,250.6m
69.2%
2.3%
Group ecosystem (15% weighting)
Mr Schneider continues to play an active leadership and advocacy role within the Group ecosystem initiative, including with the shared data
platform and OnePass and as a director of OneDigital. OnePass was successfully extended into Bunnings during the year, and Bunnings'
capabilities in the data analytics area have improved materially through the financial year. Mr Schneider has also been deeply involved with
OneDigital on the development of retail media.
Safety (10% weighting)
Bunnings TRIFR was again disappointing at 16.97. While significant effort and investment was directed to Bunnings Group's safety reporting,
processes and training throughout the year, and this intensive focus will continue throughout the 2025 financial year, the TRIFR remained
above the target. This result was below the minimum performance level set by the Board, and therefore no payment was made in respect of
safety.
Business enhancing (10% weighting)
Mr Schneider oversaw a number of positive strategic initiatives throughout the 2024 financial year, including productivity improvements in store
operations, new category expansions and global sourcing initiatives. Bunnings Group's continued growth in sales and profit, in a challenging
market environment, has been supported by Mr Schneider's leadership on these important business enhancing projects, and is resulting in
relative outperformance to competitors.
Sustainability (10% weighting)
Very good progress has continued during the financial year towards Bunnings' climate change-related targets, by operating more efficiently,
generating behind the meter and procuring renewable electricity. Together, these measures have supported long term sustainable value
creation. There has also been strong progress in gender balance, Aboriginal and Torres Strait Islander employment and supplier diversity
strategies. Bunnings grew its community program with more than 79,000 activities during the year, contributing and helping community
organisations to raise $61.1 million.
Bunnings Group's talent development and succession plans have strengthened through the year, and enabled changes in organisational
and leadership structures to support future business growth and performance. Pleasingly, Bunnings continues to be one of the most trusted
brands within Australia further strengthening its corporate reputation.
2024 KEEPP scorecard
Scorecard measure
Weighting
(%)
Threshold
not met
Threshold
achieved
Threshold
exceeded
Target
achieved
Target
exceeded
Maximum
achieved
Financial
EBT
55
ROC
Sales growth
Group ecosystem
15
Safety
10
Business enhancing
Business growth
10
Turnaround/newly acquired businesses
Sustainability
Reputation
10
Risk management
People and culture
Climate change-related initiatives
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5.5 2020 KEEPP awards that vested during the 2024 financial year
In 2020, eligible executive KMP were awarded Deferred Shares and Performance Shares under the 2020 KEEPP. The four-year performance
period for the 2020 KEEPP Performance Shares ended on 30 June 2024. Further details of the terms of the 2020 KEEPP are set out in the
2021 Remuneration Report. All of the current executive KMP participated in the 2020 KEEPP. The table below summarises the applicable
performance conditions and the vesting outcome of the 2020 KEEPP Performance Shares for each, as approved by the Board in August 2024.
Consistent with the approach to the 2021 and 2022 KEEPP scorecard targets and the assessment last year regarding the 2019 KEEPP
Performance Share vesting outcomes for the divisional managing directors, the Board has considered the impact of the COVID-19 pandemic
on the segment results targets under the 2020 KEEPP Performance Shares, as set out on the following page. In addition, prior to approval of
the vesting outcome, the Board considered whether it needed to exercise any judgement to amend entitlements, however, concluded it did not.
Further information on each performance condition is provided below. Refer to section 5.7(a) of the 2021 Remuneration Report for the terms
applying to the 2020 KEEPP Performance Shares.
Vesting condition
Weighting
of vesting
condition
Performance condition result
(2020-2024)
% of
maximum
opportunity
Total % of
Performance
Shares vested
Number of
Performance
Shares vested
R G Scott
rTSR
80%
4-year TSR of 99.95% ranked at
the 71.2 percentile of the ASX 100
92.4%
85.9%
24,580
Portfolio management
and investment outcomes
20%
Met expectations
60.0%
A N Gianotti
rTSR
80%
4-year TSR of 99.95% ranked at
the 71.2 percentile of the ASX 100
92.4%
85.9%
13,901
Portfolio management
and investment outcomes
20%
Met expectations
60.0%
I Bailey
rTSR
50%
4-year TSR of 99.95% ranked at
the 71.2 percentile of the ASX 100
92.4%
93.2%
12,971
Segment result
43%1
Outcomes are detailed on the following page
100%
Catch GTV and
CLV/CPA ratio
7%1
Outcomes are detailed on the following page
57.1%
M D Schneider
rTSR
50%
4-year TSR of 99.95% ranked at
the 71.2 percentile of the ASX 100
92.4%
95.5%
37,042
Segment result
50%
Outcomes are detailed on the following page
98.7%
1 The weightings on the performance conditions relating to Mr Bailey's 2020 KEEPP Performance Shares were adjusted due to the removal of Catch from Kmart
Group, effective 1 July 2022. The adjustments are detailed on the following page.
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 our peers over the performance period with regard to rTSR and was ranked at the 71st 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. The Board considered the contribution
of the portfolio management and investment decisions and actions during the performance period and also the opportunities that had been
considered but not pursued. The early years of the performance period were characterised by COVID-19 and the unforeseen uncertainty that
the pandemic brought. During this period, the relevant portfolio management and investment decisions were more focused internally within the
Group with small organic changes rather than significant external portfolio-related activity. Overall, after weighing up the varying success of the
decisions over this period, the Board assessed Mr Scott as having achieved outcomes that met 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 that met expectations.
Segment result condition
This condition measures the annual segment result for each of the four years in the performance period against the relevant Corporate Plan
for the division, subject to a simple average ROC gate. Years one to four of the performance period are weighted 40 per cent, 30 per cent,
20 per cent and 10 per cent respectively. The EBT and ROC targets in the relevant Corporate Plan are not typically adjusted subsequently. 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 major external events or portfolio management activity.
Due to the significant and unforeseen impact of COVID-19, the EBT and ROC performance conditions were set equal to the annual financial
targets applicable for Kmart Group and Bunnings Group in the 2021 financial year, with the remainder of the performance conditions taken from
the 2021 Corporate Plan approved at the end of the 2021 financial year. As the impact of COVID-19 continued into the 2022 financial year, to
ensure a consistent approach, the Board considered the relevant relative increase or decrease to the financial targets within the Board-approved
KEEPP scorecards for the 2022 financial year for Kmart Group and Bunnings Group. These scorecard targets were set to drive a reasonable
but still demanding level of performance. The same relative increase or decrease was then applied to the 2020 Performance Share performance
conditions for Kmart Group and Bunnings Group for the 2022 financial year. For Mr Bailey, the Board determined to reduce the target EBT for
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2022 by 39.6 per cent, due mainly to mandated store closures. For Mr Schneider, the Board determined that there be no change to the EBT
target for 2022.
Over the four-year performance period, Kmart Group (excluding Catch) reported an average ROC of 51.8 per cent, which was above the
required average ROC condition of 50.5 per cent. The annual segment EBT result (excluding Catch) was met in each of the financial years, as
shown in the table below:
Financial Year
Weighting
Percentage of annual target achieved
2021
40%
100%
2022
30%
100%
2023
20%1
100%
2024
10%1
100%
1 The weightings for the 2023 and 2024 financial years became 22% and 11% respectively as a result of Catch no longer being included within Kmart Group (as
discussed below).
Over the four-year performance period, the Bunnings Group reported an average ROC of 72.5 per cent, which was above the required average
ROC condition of 58.9 per cent. The annual segment EBT target result was met in full in the 2021, 2022 and 2023 financial years, and partially
met (87.4 per cent) in the 2024 financial year, as shown in the table below. Overall, this resulted in 98.7 per cent of the award vesting.
Financial Year
Weighting
Percentage of annual target achieved
2021
40%
100%
2022
30%
100%
2023
20%
100%
2024
10%
87.4%
Catch GTV and CLV/CPA condition
Mr Bailey’s 2020 KEEPP Performance Shares also had a Catch gross transaction value (GTV) and customer lifetime value to the cost per
acquisition ratio (CLV/CPA) condition. This condition measures the annual total price paid by Catch's customers for all items sold via Catch,
subject to achieving the average CLV/CPA gate over the four-year performance period. The GTV targets and CLV/CPA gate were set by the
Board with reference to the original approved investment case. Once set by the Board, no adjustments were made to these targets as a result
of COVID-19.
Subject to the CLV/CPA ratio gate being passed, a portion of the Performance Shares would vest for achievement of the annual GTV targets.
The annual GTV target was 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.
As explained in the 2022 Remuneration Report, in June 2022, Catch ceased to be included within the Kmart Group from 1 July 2022 and
instead became part of the OneDigital division. In recognition of this, the Board approved that from 1 July 2022, the portion of Mr Bailey’s
2020 KEEPP Performance Shares subject to divisional financial performance would no longer be assessed against Catch GTV and
CLV/CPA, with Kmart Group EBT and ROC being the relevant performance conditions from that time. As a result, only years one and two of
the performance period have been tested subject to the GTV and CLV/CPA condition and this has effectively adjusted the weighting in the
performance conditions with the Catch GTV and CLV/CPA condition having an overall 7 per cent weighting and the segment result condition
having an overall weighting of 43 per cent.
Over the performance period, Catch reported an average CLV/CPA ratio of 2.1, which met the required average CLV/CPA ratio condition. The
annual GTV target was met in the 2021 financial year but not the 2022 financial year, as shown in the table below:
Financial Year
Weighting
Percentage of annual target achieved
2021
40%
100%
2022
30%
0.0%
2023
0.0%1
N/A
2024
0.0%1
N/A
1 Following the removal of Catch from Kmart Group, the original weightings for the 2023 and 2024 financial years for GTV and the CLV/CPA ratio were reduced with a
corresponding increase in the 2023 and 2024 financial year segment result weightings, as shown above. The 2023 and 2024 financial years are not, therefore, part
of the final performance period.
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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 2024, the service and performance conditions to determine vesting of the 2024 KEEPP Deferred
Shares and 2024 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.
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, as applicable.
– The portion of the 2020 KEEPP, 2021 KEEPP and 2022 KEEPP that continue to be expensed in the 2024 financial year based on probability of vesting (i.e.,
achieving service or non-market conditions), as these shares are subject to performance and service conditions, together referred to as the service period. The
amounts included for the 2023 KEEPP are detailed in section 5.7.
– The expensing for the Deferred Shares and Performance Shares that are yet to be granted under the 2024 KEEPP will be included in the remuneration table in the
2025 Remuneration Report.
4 The percentage performance related to the 2024 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 financial year. The percentage of total remuneration that consists of KEEPP shares only, being the
amount expensed in the 2024 financial year for the 2020, 2021, 2022 and 2023 KEEPP shares, as applicable, is as follows – R G Scott 63.0 per cent, A N Gianotti
63.3 per cent, I Bailey 58.8 per cent, and M D Schneider 51.9 per cent.
5 Cash payments expected to be made in August 2024 to eligible participants in relation to the KEEPP for the 2024 financial year.
6 Short-term benefits, ‘Non-monetary benefits’ (inclusive of FBT where applicable), include the cost to the company of providing vehicles, travel and the fair value of
discounts received for goods and services acquired by the executive KMP below retail price, 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).
7 The increase in Mr Scott's 2024 'Cash salary' for the 2024 financial year compared with the 2023 financial year was the result of the increase to his FAR which
became effective on 1 October 2023, and reduced salary packaged vehicle costs in the 2024 financial year.
Short-term benefits
Long-
term
benefits1
Post-
employment
benefits2
Share-
based
payments3
Termination
benefits
Total
Performance
related4
Cash
salary
($)
KEEPP
cash5
($)
Non-
monetary
benefits6
($)
Other
($)
Leave
($)
Super-
annuation
($)
KEEPP
and other
equity
($)
Termination
payments
($)
($)
(%)
Executive director
R G Scott – Group Managing Director, Wesfarmers Limited
2024
2,459,3057
–
105,456
–
42,916
27,399
4,482,168
–
7,117,244
63.0
2023
2,323,194
–
203,364
–
41,666
25,292
5,581,883
–
8,175,399
68.3
Senior executives
A N Gianotti – Group Chief Financial Officer, Wesfarmers Limited
2024
1,380,330
–
52,756
–
24,166
27,399
2,564,022
–
4,048,673
63.3
2023
1,371,182
–
63,885
–
24,166
25,292
3,151,563
–
4,636,088
68.0
I Bailey – Managing Director, Kmart Group
2024
1,522,500
465,000
1,143
–
25,833
27,500
2,917,086
–
4,959,062
68.2
2023
1,522,500
465,000
6,973
–
25,833
27,500
3,336,233
–
5,384,039
70.6
M D Schneider – Managing Director, Bunnings Group
2024
1,622,414
510,000
81,370
–
28,333
27,500
2,451,943
–
4,721,560
62.7
2023
1,589,418
510,000
137,236
–
28,333
27,500
3,229,011
–
5,521,498
67.7
Total
2024
6,984,549
975,000
240,725
–
121,248
109,798
12,415,219
–
20,846,539
–
2023
6,806,294
975,000
411,458
–
119,998
105,584
15,298,690
–
23,717,024
–
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(b)
Summary of KEEPP shares that were expensed during the 2024 financial year
The table below sets out details of the KEEPP shares that were expensed during the 2024 financial year. In addition, this table shows the
KEEPP shares that vested during the financial year.
Deferred Shares vested
during the year1
Performance Shares vested
during the year2
Range that
could be
expensed over
the remaining
performance
period3
($)
Name
Year
Number
%
Number
%
R G Scott
2020 KEEPP
–
–
24,580
85.9
-
2021 KEEPP
–
–
–
–
0 to 605,108
2022 KEEPP
73,204
100
–
–
0 to 1,198,344
2023 KEEPP
–
–
–
–
0 to 2,188,223
A N Gianotti
2020 KEEPP
–
–
13,901
85.9
–
2021 KEEPP
–
–
–
–
0 to 349,212
2022 KEEPP
41,142
100
–
–
0 to 673,492
2023 KEEPP
–
–
–
–
0 to 1,269,160
I Bailey
2020 KEEPP
–
–
12,971
93.2
–
2021 KEEPP
–
–
–
–
0 to 392,808
2022 KEEPP
30,584
100
–
–
0 to 568,327
2023 KEEPP
–
–
–
–
0 to 1,908,224
M D Schneider
2020 KEEPP
–
–
37,042
95.5
–
2021 KEEPP
–
–
–
–
0 to 420,328
2022 KEEPP
39,917
100
–
–
0 to 923,540
2023 KEEPP
–
–
–
–
0 to 1,232,472
1 The 2020 Deferred Shares were subject to a 12-month service condition and vested in December 2021, although these remained subject to a four-, five- and
six-year trading restriction until August 2024, August 2025 and August 2026 respectively. The 2021 Deferred Shares were subject to a 12-month service condition
and vested in December 2022, although these remain subject to a four-, five- and six-year trading restriction until August 2025, August 2026 and August 2027
respectively. The 2022 Deferred Shares were subject to a 12-month service condition and vested in November 2023, although these remain subject to a four-, five-,
and six-year trading restriction until August 2026, August 2027 and August 2028 respectively. The 2023 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.
2 The 2020 KEEPP Performance Shares were subject to a four-year performance period that ended on 30 June 2024 (see section 5.5 for further information). The
2021 KEEPP Performance Shares, 2022 KEEPP Performance Shares and 2023 KEEPP Performance Shares will reach the end of the four-year performance period
on 30 June 2025, 30 June 2026 and 30 June 2027 respectively. KEEPP Performance Shares are held in trust and can only be transferred to the executive KMP
once vested.
3 Should the executive KMP resign prior to vesting, the KEEPP Deferred Shares and KEEPP 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.
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5.7 Details of equity allocated during the 2024 financial year
The 2023 KEEPP outcomes were presented in section 5.2 of the 2023 Remuneration Report, including the percentage of the 2023 KEEPP
award opportunity that was forfeited.
The 2023 KEEPP Deferred Shares and Performance Shares were granted during the 2024 financial year, with any cash component paid on
29 August 2023. 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 2023 Annual General Meeting.
The terms applicable to the grant of Deferred Shares and Performance Shares for the 2023 KEEPP are set out on the following pages. Details of
prior year grants are set out in the Remuneration Report for the relevant year.
Name
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
Fair value of Deferred
Shares at grant date4
($)
Fair value of
Performance Shares at
grant date4
($)
R G Scott
45,549
46,700
2,294,303
1,858,379
A N Gianotti
26,418
27,086
1,330,675
1,077,857
I Bailey
37,966
37,966
1,912,347
1,661,392
M D Schneider
17,816
26,992
897,392
1,181,169
1 The 2023 KEEPP Deferred Shares were granted on 26 October 2023 and are still subject to restrictions, in accordance with the relevant service conditions and
ongoing tenure. No 2023 KEEPP Deferred Shares vested or were forfeited during the reporting period.
2 The 2023 KEEPP Performance Shares were granted on 26 October 2023 and are still subject to performance conditions until 30 June 2027. Accordingly, no
2023 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-dividend (i.e. 30 August to 12 September 2023) being $53.532995.
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. The value per Performance Share for the rTSR performance condition is $37.15 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 $50.37, valued as at 26 October 2023 following
approval of the grant to the Group Managing Director at the Wesfarmers 2023 Annual General Meeting. 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.
2023 KEEPP Deferred Shares
The 2023 KEEPP Deferred Shares were allocated in November 2023 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 2023 KEEPP
Deferred Shares of up to 15 years.
June 2023
2024
2025
2026
2027
2028
2029
12-month
performance
period
2023 KEEPP Deferred Shares
One-third of Deferred Shares are restricted from trading for six years
Restriction lifts
on one-third of
Deferred Shares
in August 2029
Restriction lifts
on one-third of
Deferred Shares
in August 2028
Unquoted
Deferred Shares
allocated in
November 2023
Forfeiture period ends
in November 2024.
Shares to be quoted
and dividends to be
paid to the participant
on vested shares
One-third of Deferred Shares are restricted from trading for five years
One-third of Deferred Shares are restricted from
trading for four years
Restriction lifts
on one-third of
Deferred Shares
in August 2027
July 2022
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2023 KEEPP Performance Shares
The 2023 KEEPP Performance Shares were allocated in November 2023. These have performance conditions over a four-year performance
period, from 1 July 2023 to 30 June 2027. The performance conditions will be tested shortly after the end of the performance period.
KEEPP Performance Shares will only vest based on the extent of the satisfaction of the performance conditions outlined below. Following
testing, any KEEPP Performance Shares that do not vest will be forfeited. The performance conditions applicable to the 2023 KEEPP
Performance Shares vary as set out below and on the following page.
2024
2025
2026
2028
12-month
performance
period
2023 KEEPP Performance Shares
Divisional managing directors:
rTSR (50% weighting) and divisional financial performance1
(50% weighting)
Performance
period ends and
conditions tested
as at 30 June 2027
Four-year
performance
period begins
1 July 2023
Unquoted
Performance
Shares allocated
in November 2023
June 2023
2027
Board approves testing
and vesting outcome,
expected to be in August
2027. Shares to be
quoted and accumulated
dividends to be paid to
the participant on vested
shares2
Group Managing Director and Group Chief Financial Officer:
rTSR (80% weighting) and portfolio management and investment
outcomes (20% weighting)
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 Bailey’s 2023 Performance Shares subject to divisional financial performance (being 50 per cent of his overall
Performance Shares allocation) will be wholly assessed against Kmart Group EBT and ROC.
• the portion of Mr Schneider’s 2023 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 table below provides further detail on the performance conditions, including how the testing and vesting, if applicable, will occur:
Measure
Detail
Relative TSR
For the Group Managing Director and the Group Chief Financial Officer, 80 per cent of their 2023 KEEPP Performance
Shares will be tested against the rTSR condition. For the divisional managing directors, 50 per cent of their 2023
KEEPP Performance Shares are tested against the rTSR condition.
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 TSR 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
0% vesting
Equal to the 50th percentile
50% vesting
Between the 50th and 75th percentile
Straight-line vesting between 50% and 100%, i.e. an additional 2% of
awards vest for each percentile increase
Equal to the 75th percentile or above
100% vesting
Wesfarmers’ rTSR was chosen because it provides a relative external market performance measure having regard
to Wesfarmers’ ASX 100 peers and ensures all executive KMP are remunerated in relation to Group results.
1 Set at a divisional level through annual budgeting and corporate planning processes.
2 Accumulated dividends on any unvested (forfeited) shares are paid to the trustee.
July 2022
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Wesfarmers’
portfolio
management
and investment
outcomes
For the Group Managing Director and the Group Chief Financial Officer, 20 per cent of their 2023 KEEPP Performance
Shares will be tested against the Wesfarmers' portfolio management and investment outcomes condition.
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.
Divisional financial
performance
For the divisional managing directors, 50 per cent of the 2023 KEEPP Performance Shares are tested against the
divisional financial performance condition.
The EBT condition measures the respective division’s before tax profit against its profit targets, subject to achieving a
weighted 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. The EBT targets and weighted average ROC gate have been
calculated using the division's 2024 financial year budget and targets in the respective division’s 2023 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 KEEPP 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. Similarly the weighted average ROC is calculated using the same
weighting profile.
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.
The vesting schedule against EBT and ROC is:
Subject to achieving the four-year weighted average ROC gate,
Annual EBT result
Percentage of awards vesting
Below 90% of target
0% vesting
Equal to 90% of target
50% vesting
Between 90% and 100% of target
Straight-line vesting between 50% and 100%
Equal to 100% of target or above
100% vesting
Divisional annual EBT, subject to weighted average ROC, was chosen to ensure 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 significant external events or portfolio management
activity.
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Further terms of the 2023 KEEPP
The table below sets out further terms applying to Deferred Shares and Performance Shares granted under the 2023 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
judgement to determine a different treatment to the treatment outlined below.
Reason
Deferred Shares
Performance Shares
Resignation
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.
The Performance Shares will be
forfeited.
Dismissal by the
Board for cause
or significant
underperformance
or in circumstances
justifying 'bad leaver'
treatment
The Deferred Shares will be forfeited.
The Performance Shares will be
forfeited.
Breach of restraint
under the executive’s
service contract
The Deferred Shares will be forfeited.
The Performance Shares will be
forfeited.
All other reasons
(including for
example, due to
death, disability or
serious injury)
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 KEEPP 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 KEEPP
Deferred Shares and KEEPP Performance Shares, having regard to any matter that the Board considers
relevant.
Clawback and
adjustment
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.
Dividend and voting
rights
The KEEPP Deferred Shares and the KEEPP Performance Shares carry 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 KEEPP Deferred Shares and the KEEPP Performance Shares vest, the dividends are paid to the
participant and where the KEEPP Deferred Shares and the KEEPP Performance Shares are forfeited, the dividends
are paid to the trustee. The participant does not therefore receive any dividends on unvested KEEPP Deferred
Shares or KEEPP Performance Shares.
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5.8 Executive KMP share ownership
The Board considers it an important foundation of the Wesfarmers remuneration framework that the executive KMP hold or have a beneficial
interest in a significant number of Wesfarmers shares to encourage them to behave like long-term owners. As at the date of this report, all
current executive KMP hold or have a beneficial interest in 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), and provides a summary of the number of shares available to the executive and the number of shares that remain under restriction. For
details of shares that vested and for which final expensing occurred during the 2024 financial year, refer to section 5.6(b).
Breakdown of balance at year-end
Name
Opening
balance
(at 1 July
2023)1
Allocated
under a
remuneration
framework2
Net change3
Closing
balance
(at 30 June
2024)4
Not vested5
Vested6
Ordinary
shares7
R G Scott
1,074,041
92,249
(93,074)
1,073,216
228,726
411,279
of which 195,548
are restricted
433,211
A N Gianotti
539,191
53,504
(83,578)
509,117
126,205
172,509
of which 105,864
are restricted
210,403
I Bailey
271,775
75,932
(16,547)
331,160
133,928
181,858
of which 75,923 are
restricted
15,374
M D Schneider
348,369
44,808
(63,181)
329,996
114,668
213,949
of which 111,214
are restricted
1,379
Total
2,233,376
266,493
(256,380)
2,243,489
603,527
979,595
660,367
1 This number reflects the fully-paid ordinary shares held directly or nominally, unvested and vested equity under the incentive plans. The unvested equity may include
the 2020 KEEPP Performance Shares, the 2021 KEEPP Performance Shares, and the 2022 KEEPP Deferred Shares and Performance Shares, as appropriate.
2 The number of KEEPP Deferred Shares and KEEPP Performance Shares allocated under the 2023 KEEPP, as appropriate. Refer to section 5.7 for details.
3 Includes personal trades, shares received under the dividend investment plan or other corporate actions.
4 This number reflects the fully-paid ordinary shares held directly or nominally, unvested and vested equity under the incentive plans.
5 The unvested equity includes the 2021 KEEPP Performance Shares, the 2022 KEEPP Performance Shares and the 2023 KEEPP Deferred Shares and Performance
Shares, as appropriate.
6 Vested equity reflects any share-based awards received by the executive KMP that are now fully vested, and includes shares that have vested but which remain
subject to a restriction within the incentive plans.
7 This number reflects the fully-paid ordinary shares held directly outside of an equity plan by the executive KMP including their related parties.
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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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
To safeguard and preserve independence: to not include any performance-related element in remuneration
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. In order to continue to provide the Board with sufficient flexibility to appoint additional directors, as required, and
adjust fees as appropriate, and noting that there has been no change to the aggregate fee pool since 2015, the Board is proposing an increase
in the aggregate fee pool for non-executive directors to $4,000,000, and this is subject to approval from shareholders at the 2024 Annual
General Meeting.
Regular reviews of remuneration
The Board annually reviews the level of fees paid to the non-executive directors, including consideration of external benchmarking. There was no
change to the fees paid to non-executive directors during the 2024 financial year.
In June 2024, the Board reviewed the Board fees and the committee fees payable to the non-executive directors and the Chairman of the Board
having regard to benchmark data, market position and relative fees to apply from 1 July 2024. Benchmarking data of the ASX 25 indicated that
the Chairman's fee was below the median of our peers. After consideration, there were no changes to the Board member fees or committee
fees for the 2025 financial year, but the Board, excluding the Chairman of the Board, approved an increase in the Chairman's annual fee from
$770,000 to $825,000 effective 1 July 2024.
6.2 Non-executive director fees and other benefits
The fees shown in the table below (inclusive of superannuation) took effect from 1 January 2021 and applied throughout the 2024 financial year.
Fees/benefits
Description
2024 ($)
Board fees
Chairman – M A Chaney
770,000
Members – all non-executive directors
240,000
Committee fees
Audit and Risk Committee
Chairman – S L Warburton
70,000
Members – J A Westacott, S W English, A Sabharwal
40,000
Remuneration Committee
Chairman – M Roche
60,000
Members – M A Chaney,1 V M Wallace, A M Watkins, A J Cransberg
30,000
Nomination Committee
Chairman – M A Chaney
No fees
Members – all non-executive directors
No fees
1 The Chairman of the Board does not receive a separate fee for membership of any of the Board’s committees.
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6.3 Non-executive director remuneration
The fees paid or payable to the non-executive directors in relation to the 2024 financial year are set out below. Kate Munnings joined the Board
after 30 June 2024, and has no reportable remuneration for the 2024 financial year.
T
Fees –
Wesfarmers
Limited
Superannuation1
Total fees
Other
benefits2
Grand total
($)
($)
($)
($)
($)
Non-executive directors
M A Chaney
2024
742,601
27,399
770,000
11,870
781,870
2023
744,708
25,292
770,000
16,120
786,120
A J Cransberg
2024
242,922
27,078
270,000
2,647
272,647
2023
244,708
25,292
270,000
–
270,000
S W English
2024
252,601
27,399
280,000
978
280,978
2023
254,708
25,292
280,000
–
280,000
M Roche
2024
293,150
6,850
300,000
–
300,000
2023
300,000
–
300,000
–
300,000
A Sabharwal
2024
280,000
–
280,000
–
280,000
2023
254,708
25,292
280,000
–
280,000
V M Wallace
2024
263,150
6,850
270,000
–
270,000
2023
244,708
25,292
270,000
–
270,000
S L Warburton
2024
282,601
27,399
310,000
–
310,000
2023
284,708
25,292
310,000
–
310,000
A M Watkins
2024
242,922
27,078
270,000
–
270,000
2023
244,708
25,292
270,000
–
270,000
J A Westacott
2024
259,451
20,549
280,000
11,339
291,339
2023
280,000
–
280,000
–
280,000
Total
2024
2,859,398
170,602
3,030,000
26,834
3,056,834
2023
2,852,956
177,044
3,030,000
16,120
3,046,120
1 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.
2 Other benefits include the cost of other expenses, including fringe benefits tax, if applicable, such as travel or retirement gifts for retired directors.
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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 five-years of appointment.
The following table sets out the number of shares held directly, indirectly or beneficially by directors (including their related parties), and includes
fully-paid ordinary shares held directly as well as vested and unrestricted equity under equity plans.
Name
Balance at beginning
of year
Net change1
Balance at year-end
Minimum shareholding
requirement compliance
M A Chaney
87,597
-
87,597
Compliant
A J Cransberg
4,473
-
4,473
Compliant2
S W English
5,175
172
5,347
Compliant
M Roche
12,060
1,440
13,500
Compliant
A Sabharwal
6,293
209
6,502
Compliant2
V M Wallace
13,983
-
13,983
Compliant
S L Warburton
7,536
-
7,536
Compliant2
A M Watkins
9,000
-
9,000
Compliant2
J A Westacott
6,788
-
6,788
Compliant
Total
152,905
1,821
154,726
1 The net change includes changes due to any reason, including personal trades during the year.
2 As at 30 June 2024, these directors were appointed to the Board within the last five years and therefore their minimum shareholding requirement is 1,000 shares.
For all other directors, the minimum shareholding requirement is to hold shares equivalent in value to their annual main Board fee.
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Other remuneration information
7. Remuneration governance
7.1 Role of the Board and the Remuneration Committee
The diagram below illustrates the roles of the Board, its Committees, and Wesfarmers management in making executive KMP remuneration
decisions.
7.2 Non-executive director remuneration
Non-executive directors' fees, including committee fees, are reviewed annually. The Remuneration Committee and the Board (or only the Board
if this relates to Remuneration Committee fees) consider benchmarking and 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.
The Remuneration Committee and the Board may seek an external opinion, where considered necessary. See section 6 for further information
on non-executive director remuneration.
7.3 Use of remuneration consultants
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.
No remuneration recommendations as defined in section 9B of the Corporations Act 2001 (Cth) were obtained from external remuneration
consultants during the financial year ended 30 June 2024.
The Board is responsible for setting remuneration policy and
determining non-executive director, executive director and
executive KMP remuneration and ensuring 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, for approving the
remuneration of the other executive KMP and approving all
targets and performance conditions set under the KEEPP.
The Remuneration Committee makes recommendations
to the Board in relation to the overall approach to
remuneration for the Group and regarding all aspects of
executive KMP remuneration.
In relation to the KEEPP, 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 KEEPP
Performance Shares (both the financial conditions and
the other non-financial performance conditions). As
part of setting performance conditions on the KEEPP
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.
Additional information and data is sought from management
and remuneration consultants, as required.
Further information regarding the objectives and role of the
Remuneration Committee is contained in its charter, which
is available in the corporate governance section of the
company’s website at wesfarmers.com.au/cg
The Group Managing Director provides updates and
makes recommendations to the Remuneration Committee
on remuneration and performance 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.
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 outcomes recommendations, ensuring
there is a tight linkage between behaviour, risk management
and remuneration outcomes.
Wesfarmers Board
Remuneration Committee
Management
Audit and Risk Committee Chairman
Wesfarmers 2024 Annual Report
127
Remuneration report (audited)
Directors’
report
8. Further information on remuneration
8.1 Share trading restrictions
Wesfarmers’ Securities Trading Policy reflects the Corporations Act 2001 (Cth) 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 (Cth) prohibition referred to above.
The policy is available in the corporate governance section of the company’s website at wesfarmers.com.au/cg
Breaches of the policy are subject to disciplinary action, which may include termination of employment.
8.2 Other transactions and balances with key management personnel
From time to time, the executive KMP and directors of the company or our 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 financial year, or remaining unsettled at 30 June 2024, between Wesfarmers and our directors or
executive KMP and/or their related parties.
9. Independent audit of remuneration report
The remuneration report has been audited by Ernst & Young. See page 187 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.
M A Chaney AO
R G Scott
Chairman
Managing Director
Perth
28 August 2024
Wesfarmers 2024 Annual Report
128
Financial statements
Income statement
130
Statement of comprehensive income
131
Balance sheet
132
Cash flow statement
133
Statement of changes in equity
134
Notes to the financial statements
About this report
135
Segment information
137
Group performance
1.
Revenue and other income
140
2.
Expenses
141
3.
Tax expense
142
Group balance sheet
4.
Cash and cash equivalents
143
5.
Receivables
143
6.
Inventories
144
7.
Property, plant and equipment
145
8.
Goodwill and intangible assets
146
9.
Leases
148
10.
Provisions
150
Capital
11.
Capital management
152
12.
Dividends and distributions
153
13.
Equity and reserves
153
14.
Earnings per share
154
15.
Interest-bearing loans and borrowings
155
Risk
16.
Financial risk management
156
17.
Hedging
161
18.
Impairment of non-financial assets
163
Group information
19.
Associates and joint arrangements
165
20.
Subsidiaries
167
21.
Business combinations
172
22.
Parent disclosures
173
23.
Deed of Cross Guarantee
173
24.
Related party transactions
174
Other
25.
Commitments and contingencies
175
26.
Tax transparency disclosures
175
27.
Auditors’ remuneration
175
28.
Events after the reporting period
175
29.
Other accounting policies
176
30.
Share-based payments
177
31.
Director and executive disclosures
178
Wesfarmers 2024 Annual Report
129
Financial statements
For the year ended 30 June 2024 – Wesfarmers Limited and its controlled entities
Financial
statements
Financial statements
Wesfarmers 2024 Annual Report
130
Income statement
For the year ended 30 June 2024
Consolidated
2024
2023
Note
$m
$m
Revenue
1
44,189
43,550
Expenses
Raw materials and inventory
(28,828)
(28,905)
Employee benefits expense
2
(6,639)
(6,333)
Freight and other related expenses
(687)
(704)
Occupancy-related expenses
2
(541)
(505)
Depreciation and amortisation
2
(1,800)
(1,701)
Impairment expenses
2
(44)
(36)
Other expenses
2
(1,840)
(1,677)
Total expenses
(40,379)
(39,861)
Other income
1
144
165
Share of net profits of associates and joint ventures
19
35
9
179
174
Earnings before finance costs and income tax expense
3,989
3,863
Interest on lease liabilities
9
(236)
(219)
Other finance costs
2
(166)
(135)
Profit before income tax expense
3,587
3,509
Income tax expense
3
(1,030)
(1,044)
Profit for the year attributable to equity holders of the parent
2,557
2,465
Earnings per share attributable to equity holders of the parent
14
cents
cents
Basic earnings per share
225.7
217.8
Diluted earnings per share
225.7
217.6
Wesfarmers 2024 Annual Report
131
Statement of comprehensive income
For the year ended 30 June 2024
Financial
statements
About
this report
Segment
information
Group
performance
Group
balance sheet
Capital
Risk
Group
information
Other
Consolidated
2024
2023
Note
$m
$m
Profit for the year
2,557
2,465
Other comprehensive income
Items that may be reclassified to profit or loss:
Foreign currency translation reserve
13
Exchange differences on translation of foreign operations
(4)
5
Cash flow hedge reserve
13
Fair value gains on cash flow hedges
80
229
Gains on cash flow hedges reclassified to income statement
(3)
-
Share of associates and joint ventures reserves
-
2
Tax effect
3
(23)
(70)
Items that will not be reclassified to profit or loss:
Financial assets reserve
13
Changes in the fair value of financial assets designated at
fair value through other comprehensive income
-
24
Share of associates and joint ventures reserves
(2)
6
Tax effect
3
-
(7)
Other comprehensive income for the year, net of tax
48
189
Total comprehensive income for the year, net of tax, attributable to equity holders of the parent
2,605
2,654
Financial statements
Wesfarmers 2024 Annual Report
132
Balance sheet
As at 30 June 2024
Consolidated
2024
2023
Note
$m
$m
ASSETS
Current assets
Cash and cash equivalents
4
835
673
Trade and other receivables
5
2,210
2,046
Inventories
6
6,102
6,039
Income tax receivable
-
43
Derivatives
17
19
116
Other
248
237
Total current assets
9,414
9,154
Non-current assets
Investments in associates and joint ventures
19
938
943
Deferred tax assets
3
641
624
Property, plant and equipment
7
5,653
5,365
Goodwill and intangible assets
8
5,051
4,692
Right-of-use assets
9
5,497
5,676
Derivatives
17
22
27
Other
93
65
Total non-current assets
17,895
17,392
Total assets
27,309
26,546
LIABILITIES
Current liabilities
Trade and other payables
5,377
5,268
Lease liabilities
9
1,165
1,135
Income tax payable
124
-
Provisions
10
1,163
1,117
Derivatives
17
36
10
Other
363
327
Total current liabilities
8,228
7,857
Non-current liabilities
Interest-bearing loans and borrowings
15
4,756
4,430
Lease liabilities
9
5,357
5,604
Provisions
10
383
374
Total non-current liabilities
10,496
10,408
Total liabilities
18,724
18,265
Net assets
8,585
8,281
EQUITY
Equity attributable to equity holders of the parent
Issued capital
13
13,574
13,574
Reserved shares
13
(102)
(102)
Retained earnings
1,173
818
Reserves
13
(6,060)
(6,009)
Total equity
8,585
8,281
Wesfarmers 2024 Annual Report
133
Cash flow statement
For the year ended 30 June 2024
Financial
statements
About
this report
Segment
information
Group
performance
Group
balance sheet
Capital
Risk
Group
information
Other
Consolidated
2024
2023
Note
$m
$m
Cash flows from operating activities
Receipts from customers
48,768
48,253
Payments to suppliers and employees
(43,039)
(42,684)
Dividends and distributions received from associates and joint ventures
62
48
Dividends received from other investments
19
25
Interest received
28
16
Interest component of lease payments
(236)
(219)
Borrowing costs
(152)
(140)
Income tax paid
(856)
(1,120)
Net cash flows from operating activities
4
4,594
4,179
Cash flows from investing activities
Payments for property, plant and equipment and intangibles
4
(1,047)
(1,286)
Payments for mineral exploration
4
(29)
(2)
Proceeds from sale of property, plant and equipment and intangibles
4
32
105
Net proceeds from sale of businesses
-
13
Net proceeds from disposal of other investments
-
686
Investments in associates and joint ventures
(23)
(42)
Acquisition of subsidiaries, net of cash acquired
21
(298)
(24)
Payments for other financial assets
(4)
(2)
Net cash flows used in investing activities
(1,369)
(552)
Cash flows from financing activities
Repayment of borrowings
(30)
(765)
Net proceeds from revolving facilities
347
380
Principal component of lease payments
(1,180)
(1,142)
Dividends paid
(2,200)
(2,132)
Net cash flows used in financing activities
(3,063)
(3,659)
Net increase/(decrease) in cash and cash equivalents
162
(32)
Cash and cash equivalents at beginning of year
673
705
Cash and cash equivalents at end of year
4
835
673
Financial statements
Wesfarmers 2024 Annual Report
134
Statement of changes in equity
For the year ended 30 June 2024
ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT
Issued
Reserved
Retained
Reserves
Total
capital
shares
earnings
equity
Consolidated
Note
$m
$m
$m
$m
$m
Balance at 1 July 2023
13,574
(102)
818
(6,009)
8,281
Net profit for the year
-
-
2,557
-
2,557
Other comprehensive income
Exchange differences on translation of foreign operations
13
-
-
-
(4)
(4)
Changes in the fair value of cash flow hedges, net of tax
13
-
-
-
54
54
Changes in the fair value of financial assets designated at
fair value through other comprehensive income, net of tax
13
-
-
-
(2)
(2)
Total other comprehensive income for the year, net of tax
-
-
-
48
48
Total comprehensive income for the year, net of tax
-
-
2,557
48
2,605
Share-based payment transactions
13
-
-
-
11
11
Dividends
12
-
-
(2,202)
-
(2,202)
Transfer of cash flow hedge reserve to non-financial assets, net of tax
13
-
-
-
(110)
(110)
-
-
(2,202)
(99)
(2,301)
Balance at 30 June 2024
13,574
(102)
1,173
(6,060)
8,585
Balance at 1 July 2022
13,574
(102)
485
(5,976)
7,981
Net profit for the year
-
-
2,465
-
2,465
Other comprehensive income
Exchange differences on translation of foreign operations
13
-
-
-
5
5
Changes in the fair value of cash flow hedges, net of tax
13
-
-
-
161
161
Changes in the fair value of financial assets designated at
fair value through other comprehensive income, net of tax
13
-
-
-
23
23
Total other comprehensive income for the year, net of tax
-
-
-
189
189
Total comprehensive income for the year, net of tax
-
-
2,465
189
2,654
Share-based payment transactions
13
-
-
-
14
14
Dividends
12
-
-
(2,132)
-
(2,132)
Transfer of cash flow hedge reserve to non-financial assets, net of tax
13
-
-
-
(229)
(229)
Other
-
-
-
(7)
(7)
-
-
(2,132)
(222)
(2,354)
Balance at 30 June 2023
13,574
(102)
818
(6,009)
8,281
Wesfarmers 2024 Annual Report
135
Notes to the financial statements: About this report
For the year ended 30 June 2024
Financial
statements
About
this report
Segment
information
Group
performance
Group
balance sheet
Capital
Risk
Group
information
Other
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 2024 (FY2024) was authorised for issue in accordance
with a resolution of the directors on 28 August 2024. 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 joint ventures 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 2023. Refer to note 29 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 20.
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. Acquisitions of
subsidiaries which qualify as business combinations are 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
the income statement. Any investment retained is initially 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 in relation to future events.
Judgements and estimates which are material to the financial report
are found in the following notes:
Page
140
Note 1
Revenue and other income
142
Note 3
Tax expense
143
Note 5
Receivables
144
Note 6
Inventories
145
Note 7
Property, plant and equipment
146
Note 8
Goodwill and intangible assets
148
Note 9
Leases
150
Note 10
Provisions
163
Note 18
Impairment of non-financial assets
165
Note 19
Associates and joint arrangements
Foreign currency
The functional currencies of overseas subsidiaries are disclosed in
note 20. 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.
Other accounting policies
Material 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.
Financial statements
Wesfarmers 2024 Annual Report
136
Notes to the financial statements: About this report
For the year ended 30 June 2024
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:
• the amount in question is significant because of its size
or nature;
• 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
impairments; 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;
• 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;
• Capital: provides information about the capital management
practices of the Group and shareholder returns for the year;
• 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 material
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 impacting the current reporting period
Acquisition of InstantScripts Pty Ltd
On 3 July 2023, Wesfarmers, through its wholly-owned subsidiary
Australian Pharmaceutical Industries Pty Ltd (API), completed the
acquisition of 100 per cent of the shares in InstantScripts Pty Ltd
(InstantScripts).
Total consideration was $142 million, or $133 million net of cash
acquired. Refer to note 21 for further details.
Acquisition of SILK Laser Australia Limited
On 29 November 2023, Wesfarmers, through its wholly-owned
subsidiary API, completed the acquisition of 100 per cent of the
shares in SILK Laser Australia Limited (SILK) by way of a Scheme of
Arrangement.
Total consideration was $175 million, or $160 million net of cash
acquired. At 30 June 2024, the acquisition accounting balances
are provisional due to the ongoing work finalising valuations and tax
matters that may impact acquisition accounting entries. Refer to
note 21 for further details.
Wesfarmers 2024 Annual Report
137
Notes to the financial statements: Segment information
For the year ended 30 June 2024
Financial
statements
About
this report
Segment
information
Group
performance
Group
balance sheet
Capital
Risk
Group
information
Other
Segment information
The Group’s operating segments are organised and managed
separately according to the nature of the products and
services provided.
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 Group
• Retailer of building materials and home, garden and lifestyle
improvement products; and
• Servicing households and commercial customers, including
builders, tradespeople and businesses.
Kmart Group
• Kmart is a retailer of apparel and general merchandise, including
toys, leisure, entertainment, home and consumables;
• Target is a retailer of apparel and general merchandise, including
toys and soft home products; and
• Developer of Anko-branded products which are sold in Kmart,
Target and internationally.
Chemicals, Energy and Fertilisers (WesCEF)
• Manufacturer and marketer of chemicals for industry, mining and
mineral processing;
• Manufacturer and marketer of broadacre and horticultural
fertilisers;
• Producer, marketer and distributor of LPG and LNG;
• Distributor of PVC and manufacturer of wood-plastic composite
decking and screening products; and
• 50 per cent joint operator of the Mt Holland lithium project.
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 marketer of industrial, specialty and medical
gases and equipment;
• Supplier, manufacturer and distributor of workwear clothing in
Australia and internationally; and
• Specialised supplier and distributor of industrial safety products
and services.
Wesfarmers Health (Health)
• Wholesaler and retailer of pharmaceutical goods, health, wellness
and beauty products;
• Provider of clinical cosmetic and skin care treatments;
• Provider of retail support services to pharmacies through
Priceline Pharmacy franchises and banner brands; and
• Provider of digital health services.
Catch
• Online retailer offering branded products on a first-party basis
and a third-party online marketplace.
Other
Includes:
• OneDigital: includes OnePass and supporting capabilities;
• Forest products: joint control of Wespine Industries Pty Ltd;
• Property: non-controlling interest in BWP Trust and joint control
of BPI No 1 Pty Ltd;
• Investment banking: joint control of Gresham Partners Group
Limited;
• Loyalty program: joint control of loyalty and data company
Loyalty Pacific Pty Ltd (Flybuys); 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.
$m
%
Bunnings Group
18,964
43.1
Kmart Group
11,033
25.0
WesCEF
2,741
6.2
Officeworks
3,418
7.7
Industrial and Safety
2,022
4.6
Health
5,624
12.8
Catch
220
0.5
Other
25
0.1
Total
44,047
Revenue from contracts with customers
by segment for FY2024
$m
%
Bunnings Group
2,251
60.0
Kmart Group
958
25.5
WesCEF
440
11.7
Officeworks
208
5.5
Industrial and Safety
109
2.9
Health
50
1.3
Catch
(96)
(2.6)
Other
(167)
(4.3)
Total
3,753
(500)
1,000
500
-
1,500
2,000
2,500
3,000
3,500
4,000
$m
Segment result for FY2024
Total segment result
Wesfarmers 2024 Annual Report
138
Notes to the financial statements: Segment information
For the year ended 30 June 2024
Financial statements
1 The 2024 Bunnings Group segment result includes a net property contribution of $2 million (2023: $38 million).
2 On 30 May 2024, WesCEF announced the sale of the LPG and LNG distribution businesses. The divestments are independent of each other and remain subject to
conditions precedent at 30 June 2024. The divestments are not material to the Group’s income statement or balance sheet.
3 The 2024 Catch segment result includes an impairment expense relating to Catch's brand name of $18 million and restructuring costs of $5 million. The 2023 Catch
segment result includes costs of $40 million in relation to inventory provisions, team member redundancies and asset write-offs.
4 The 2024 Other result includes an operating loss of $70 million (2023: $82 million) in relation to OnePass and supporting capabilities.
5 Segment assets and segment liabilities exclude intercompany financing arrangements and segment tax balances.
6 Capital expenditure, inclusive of capitalised interest, includes accruals for costs incurred during the year. The amount excluding movements in accruals is
$1,076 million (2023: $1,288 million). Refer to note 4 for further details.
Segment information
BUNNINGS GROUP1
KMART GROUP
WesCEF2
2024
2023
2024
2023
2024
2023
$m
$m
$m
$m
$m
$m
Revenue from contracts with customers
18,964
18,537
11,033
10,563
2,741
3,303
Other revenue
4
2
74
72
6
3
Segment revenue
18,968
18,539
11,107
10,635
2,747
3,306
EBITDA
3,195
3,127
1,546
1,347
578
769
Depreciation and amortisation
(821)
(782)
(505)
(498)
(137)
(99)
Interest on lease liabilities
(123)
(115)
(83)
(80)
(1)
(1)
Segment result
2,251
2,230
958
769
440
669
Other finance costs
Profit before income tax expense
Income tax expense
Profit attributable to equity holders of the parent
Other segment information
Segment assets5
8,673
8,900
5,646
5,582
4,152
3,811
Investments in associates and joint ventures
17
17
-
-
75
83
Tax assets
Total assets
Segment liabilities5
(5,542)
(5,593)
(4,362)
(4,359)
(665)
(594)
Tax liabilities
Interest-bearing loans and borrowings
Total liabilities
Net assets
Capital expenditure6
268
405
124
135
448
519
Share of net profit or loss of associates and joint ventures
included in segment result
-
-
-
-
16
13
Wesfarmers 2024 Annual Report
139
Notes to the financial statements: Segment information
For the year ended 30 June 2024
Financial
statements
About
this report
Segment
information
Group
performance
Group
balance sheet
Capital
Risk
Group
information
Other
OFFICEWORKS
INDUSTRIAL AND
SAFETY
HEALTH
CATCH3
OTHER4
CONSOLIDATED
2024
2023
2024
2023
2024
2023
2024
2023
2024
2023
2024
2023
$m
$m
$m
$m
$m
$m
$m
$m
$m
$m
$m
$m
3,418
3,342
2,022
1,992
5,624
5,312
220
348
25
20
44,047
43,417
16
15
-
-
-
-
7
6
35
35
142
133
3,434
3,357
2,022
1,992
5,624
5,312
227
354
60
55
44,189
43,550
360
335
195
184
133
124
(68)
(133)
(150)
(189)
5,789
5,564
(136)
(124)
(82)
(80)
(78)
(74)
(26)
(28)
(15)
(16)
(1,800)
(1,701)
(16)
(11)
(4)
(4)
(5)
(5)
(2)
(2)
(2)
(1)
(236)
(219)
208
200
109
100
50
45
(96)
(163)
(167)
(206)
3,753
3,644
(166)
(135)
3,587
3,509
(1,030)
(1,044)
2,557
2,465
2,224
2,141
1,778
1,787
2,649
2,088
149
209
459
418
25,730
24,936
2
3
-
1
1
-
-
-
843
839
938
943
641
667
641
667
27,309
26,546
(1,136)
(1,129)
(457)
(474)
(985)
(908)
(87)
(110)
(610)
(668)
(13,844)
(13,835)
(124)
-
(124)
-
(4,756)
(4,430)
(4,756)
(4,430)
(18,724)
(18,265)
8,585
8,281
64
71
79
73
48
40
5
9
38
29
1,074
1,281
-
-
-
-
-
-
-
-
19
(4)
35
9
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 are allocated to
a geography based on the location of the contracting entity selling
the goods and services. Non-current assets are allocated to a
geography based on the location of the operation.
Revenue
Non-current assets
2024
2023
2024
2023
$m
$m
$m
$m
Australia
41,192
40,587
16,385
15,954
New Zealand
2,852
2,786
769
720
Other
3
44
34
24
Total
44,047
43,417
17,188
16,698
$m
FY24
44,189
FY23
43,550
FY22
36,838
FY21
33,941
FY20
30,846
1.5%
$44,189m
Total revenue
FY20
-
5,000
10,000
15,000
20,000
25,000
30,000
40,000
35,000
45,000
$m
FY21
FY22
FY23
FY24
Financial statements
Wesfarmers 2024 Annual Report
140
Notes to the financial statements: Group performance
For the year ended 30 June 2024
Consolidated
2024
2023
$m
$m
Revenue from contracts with customers
Sale of retail goods in store
30,942
30,166
Sale of retail goods online
2,790
2,686
Sale of wholesale goods
5,211
5,024
Sale of chemicals, fertilisers and
commodities
2,731
3,294
Sale of industrial products
2,022
1,988
Services revenue
351
259
44,047
43,417
Other revenue
Interest revenue
28
16
Dividend revenue
19
25
Other
95
92
142
133
Total revenue
44,189
43,550
Other income
Gains on disposal of property, plant and
equipment and other assets
12
41
Other
132
124
Total other income
144
165
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 pharmaceuticals, building materials, household
and other retail goods. Control of goods typically passes upon
delivery of goods to the customer.
• Sale of chemicals, fertilisers and commodities: includes
revenue from the sale of chemicals, fertilisers and commodities
either manufactured or purchased by the Group.
• Sale of industrial products: includes revenue for which the
Group has distribution rights, principally related to industrial
maintenance and industrial safety.
• 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 obligation is satisfied.
The Group's contracts with customers for the sale of retail goods
generally incorporate a single performance obligation. 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 payment
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.
Dividend revenue
Revenue from dividends, other than those arising from associates,
is recognised when the Group’s right to receive the payment
is established.
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 2024, $172 million of
revenue is deferred in relation to gift cards (2023: $165 million)
included within other current liabilities. 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.
1. Revenue and other income
Wesfarmers 2024 Annual Report
141
Notes to the financial statements: Group performance
For the year ended 30 June 2024
Financial
statements
About
this report
Segment
information
Group
performance
Group
balance sheet
Capital
Risk
Group
information
Other
Consolidated
2024
2023
$m
$m
Remuneration, bonuses and on-costs
6,054
5,795
Superannuation expense
489
447
Share-based payments expense
96
91
Employee benefits expense
6,639
6,333
Short-term and low-value lease payments
41
35
Contingent rental payments
54
51
Outgoings and other
446
419
Occupancy-related expenses
541
505
Depreciation and amortisation of property, plant
and equipment
553
496
Amortisation of intangible assets
128
118
Depreciation of right-of-use assets
1,119
1,087
Depreciation and amortisation
1,800
1,701
Impairment of trade and other receivables
5
22
Impairment of property, plant and equipment
14
9
Impairment of goodwill and intangible assets
18
4
Impairment of right-of-use assets
7
1
Impairment expenses
44
36
Repairs and maintenance
319
315
Utilities and office expenses
686
608
Insurance expenses
72
52
Merchant fees
146
143
Other
617
559
Other expenses
1,840
1,677
Interest on interest-bearing loans and
borrowings, net of borrowing costs
capitalised
143
117
Discounting adjustments
8
6
Amortisation of debt establishment costs
5
4
Other finance-related costs
10
8
Other finance costs
166
135
Recognition and measurement
Employee benefits expense
The Group’s accounting policy for liabilities associated with employee
benefits is set out in note 10. The policy relating to share‑based
payments is set out in note 30.
The majority of employees in Australia and New Zealand are party
to a defined contribution superannuation scheme and receive
fixed contributions from Group companies. 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.
Bunnings Group
Kmart Group
WesCEF
Officeworks
Industrial and Safety
Health
Catch
Other
Employee benefits expense by segment
-
1,000
2,000
3,000
4,000
5,000
7,000
6,000
$m
FY24
FY23
Depreciation and amortisation
Refer to notes 7, 8 and 9 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 expected
credit losses, and note 18 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 discount unwinding and any changes to the discounting is shown
as a discounting adjustment in other 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. The weighted
average interest rate applicable for FY2024 was 3.69 per cent
(2023: 3.25 per cent) and $26 million (2023: $42 million) of interest
was capitalised to property, plant and equipment for the Mt Holland
lithium project. Capitalised borrowing costs are included within
WesCEF's capital expenditure.
2. Expenses
Financial statements
Wesfarmers 2024 Annual Report
142
Notes to the financial statements: Group performance
For the year ended 30 June 2024
3. Tax expense
Consolidated
2024
2023
The major components of tax expense are:
$m
$m
Income statement
Current income tax expense
Current year (paid or payable)
1,060
994
Adjustment for prior years
(39)
(3)
Deferred income tax expense
Temporary differences
6
50
Adjustment for prior years
3
3
Income tax expense reported in the
income statement
1,030
1,044
Statement of comprehensive income
Net movement on revaluing cash flow hedges
23
70
Net movement on revaluing financial assets
-
7
Income tax reported in statement of
comprehensive income
23
77
Tax reconciliation
Profit before tax
3,587
3,509
Income tax rate at the statutory rate of 30%
1,076
1,053
Adjustments relating to prior years
(36)
-
Non-deductible items
13
9
Share of results of associates and joint
ventures
5
(7)
Non-assessable dividends
(15)
(8)
Utilisation of previously unrecognised tax
losses
-
(2)
Other
(13)
(1)
Income tax on profit before tax
1,030
1,044
Deferred income tax in the balance
sheet relates to the following:
Provisions
116
95
Employee benefits
304
296
Accruals and other payables
85
73
Interest-bearing loans and borrowings
61
63
Leases
1,948
1,982
Derivatives
11
3
Inventories
69
81
Property, plant and equipment
258
249
Other individually immaterial balances
42
36
Deferred tax assets
2,894
2,878
Accelerated depreciation for tax purposes
238
222
Derivatives
12
43
Accrued income and other
199
155
Intangible assets
12
37
Leases
1,654
1,660
Other individually immaterial balances
138
137
Deferred tax liabilities
2,253
2,254
Net deferred tax asset
641
624
Deferred income tax in the income
statement relates to the following:
Provisions, employee benefits and leases
6
26
Depreciation, amortisation and impairment
10
14
Other individually immaterial balances
(7)
13
Deferred tax expense
9
53
Recognition and measurement
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 at the balance
sheet date.
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.
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 unused capital losses. Currently, it is not
certain that the Group will generate sufficient future taxable
capital gains required to recognise a deferred tax asset
for these carried forward capital losses. The unrecognised
deferred tax assets of $11 million (2023: $11 million) relate
wholly to capital losses in Australia.
Key judgement: unrecognised deferred tax
liabilities
Deferred tax liabilities have not been recognised on indefinite
life intangible assets 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.
Refer to note 26 for tax transparency disclosures.
Wesfarmers 2024 Annual Report
143
Notes to the financial statements: Group balance sheet
For the year ended 30 June 2024
Financial
statements
About
this report
Segment
information
Group
performance
Group
balance sheet
Capital
Risk
Group
information
Other
Cash held in joint operation
Cash held in joint operation is restricted and only available for use
within the joint operation.
Consolidated
2024
2023
$m
$m
Cash capital expenditure
Payments for property
73
100
Payments for plant and equipment
821
1,054
Payments for intangibles
153
132
Payments for mineral exploration
29
2
1,076
1,288
Proceeds from sale of property, plant,
equipment and intangibles
(32)
(105)
Net cash capital expenditure
1,044
1,183
$m
%
Bunnings Group
268
25.0
Kmart Group
136
12.6
WesCEF1
447
41.5
Officeworks
64
6.0
Industrial and Safety
79
7.3
Health
38
3.5
Catch
5
0.5
Other
39
3.6
Total
1,076
Cash capital expenditure by segment
for FY2024
1 Cash capital expenditure for WesCEF is net of $19 million received from
government grants and includes $26 million of capitalised borrowing costs.
5. Receivables
Consolidated
2024
2023
$m
$m
Trade and other receivables
Trade receivables
2,055
1,892
Other debtors
215
217
Allowance for credit losses
(60)
(63)
2,210
2,046
Allowance for credit losses
Movements in the allowance account for
expected credit losses were as follows:
Carrying amount at beginning of year
(63)
(55)
Net allowance for credit losses recognised
(5)
(22)
Acquisition of controlled entities
(2)
-
Write-offs
10
14
Carrying amount at the end of the year
(60)
(63)
4. Cash and cash equivalents
4. Cash and cash equivalents (continued)
Consolidated
2024
2023
$m
$m
For the purposes of the cash flow statement,
cash and cash equivalents comprise the
following:
Cash on hand
44
49
Cash in transit
307
203
Cash at bank and on deposit
371
254
Cash held in joint operation
113
167
835
673
Reconciliation of net profit after tax to
net cash flows from operations
Net profit
2,557
2,465
Adjusted for
Depreciation and amortisation
1,800
1,701
Impairment of assets
44
36
Net loss/(gain) on disposal of non-current
assets including investments and
associates
12
(32)
Share of net profits of associates and joint
ventures
(35)
(9)
Dividends and distributions received from
associates and joint ventures
62
48
Discounting adjustments in finance costs
8
6
Amortisation of debt establishment costs
5
4
Other
10
18
(Increase)/decrease in assets
Trade and other receivables
(146)
13
Inventories
(59)
57
Income tax receivable
43
(40)
Prepayments
(7)
28
Deferred tax assets
8
(37)
Other assets
(3)
(1)
Increase/(decrease) in liabilities
Trade and other payables
129
(48)
Income tax payable
124
-
Provisions
25
(62)
Other liabilities
17
32
Net cash flows from operating activities
4,594
4,179
Recognition and measurement
Cash in transit
Cash in transit includes physical cash in transit and receivables
from electronic funds transfers, credit card and debit card point of
sale transactions.
Cash at bank and on deposit
Cash and short-term deposits comprise cash at bank and 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 16(D)
for credit risk disclosures.
Financial statements
Wesfarmers 2024 Annual Report
144
Notes to the financial statements: Group balance sheet
For the year ended 30 June 2024
Recognition and measurement
Trade receivables and other debtors are 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.
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 16(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.
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 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.
Refer to note 16(D) for further information on the Group's
ECL matrix.
Consolidated
2024
2023
$m
$m
Raw materials
57
34
Finished goods
6,038
5,997
Right-of-return assets
7
8
6,102
6,039
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.
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.
• Finished goods - manufactured: cost of direct materials and
labour and a proportion of manufacturing overheads based on
normal operating capacity.
• Finished goods - wholesale and retail: 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: net realisable value
The key assumptions, which require the use of management
judgement, are the variables affecting costs recognised in
bringing the inventory to its 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
$8 million (2023: $50 million). Reasonably possible changes in
these estimates are 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.
5. Receivables (continued)
6. Inventories
Wesfarmers 2024 Annual Report
145
Notes to the financial statements: Group balance sheet
For the year ended 30 June 2024
Financial
statements
About
this report
Segment
information
Group
performance
Group
balance sheet
Capital
Risk
Group
information
Other
7. Property, plant and equipment
PROPERTY
PLANT AND EQUIPMENT
Land
Buildings
Leasehold
improvements
Plant,
vehicles and
equipment
Mine
properties
Total
Consolidated
$m
$m
$m
$m
$m
$m
Year ended 30 June 2024
Gross carrying amount - at cost
383
541
986
9,151
965
12,026
Accumulated depreciation and impairment
-
(220)
(672)
(5,466)
(15)
(6,373)
Net carrying amount
383
321
314
3,685
950
5,653
Movement
Net carrying amount at the beginning of the year
323
329
355
3,429
929
5,365
Additions1
73
-
33
753
36
895
Disposals and write-offs
(12)
(3)
(2)
(13)
-
(30)
Impairment
-
-
(1)
(13)
-
(14)
Depreciation and amortisation
-
(18)
(78)
(442)
(15)
(553)
Acquisition/(disposal) of controlled entities
-
-
7
15
-
22
Transfers
-
13
-
(43)
-
(30)
Other including foreign exchange movements
(1)
-
-
(1)
-
(2)
Net carrying amount at the end of the year
383
321
314
3,685
950
5,653
Assets under construction included above
-
67
28
972
24
1,091
Year ended 30 June 2023
Gross carrying amount - at cost
323
535
954
8,490
929
11,231
Accumulated depreciation and impairment
-
(206)
(599)
(5,061)
-
(5,866)
Net carrying amount
323
329
355
3,429
929
5,365
Movement
Net carrying amount at the beginning of the year
321
297
394
2,868
870
4,750
Additions1
7
93
39
978
59
1,176
Disposals and write-offs
(6)
(46)
(4)
(5)
-
(61)
Impairment
-
-
(1)
(8)
-
(9)
Depreciation and amortisation
-
(15)
(73)
(408)
-
(496)
Acquisition/(disposal) of controlled entities
-
-
-
2
-
2
Other including foreign exchange movements
1
-
-
2
-
3
Net carrying amount at the end of the year
323
329
355
3,429
929
5,365
Assets under construction included above
-
87
28
1,033
-
1,148
1 The 2024 additions include the capitalisation of $26 million of borrowing costs (2023: $42 million).
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 includes the cost of replacing parts that are
eligible for capitalisation, and the cost of major inspections. The
cost of mine properties comprises the mineral rights, subsequent
construction costs, any costs directly attributable to bringing the asset
into operation, and, for qualifying assets, borrowing costs.
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 48 years. Land is not depreciated.
Mine properties are depreciated over the life of mine, based on
the rate of depletion of economically recoverable reserves, once
production has commenced.
Leasehold improvements are amortised over the period of the lease or
the anticipated useful life of the improvements, whichever is shorter.
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.
Impairment
Refer to note 18 for details on impairment testing.
Financial statements
Wesfarmers 2024 Annual Report
146
Notes to the financial statements: Group balance sheet
For the year ended 30 June 2024
7. Property, plant and equipment (continued)
8. Goodwill and intangible assets
Goodwill
Brand
Contractual and
non-contractual
relationships
Software
Total
Consolidated
$m
$m
$m
$m
$m
Year ended 30 June 2024
Gross carrying amount - at cost
4,082
1,355
174
1,185
6,796
Accumulated amortisation and impairment
(494)
(516)
(49)
(686)
(1,745)
Net carrying amount
3,588
839
125
499
5,051
Movement
Net carrying amount at the beginning of the year
3,352
823
76
441
4,692
Additions
-
-
23
127
150
Disposals and write-offs
-
-
-
(8)
(8)
Impairment
-
(18)
-
-
(18)
Amortisation
-
-
(10)
(118)
(128)
Acquisition/(disposal) of controlled entities
236
34
36
27
333
Transfers
-
-
-
30
30
Net carrying amount at the end of the year
3,588
839
125
499
5,051
Year ended 30 June 2023
Gross carrying amount - at cost
3,846
1,321
131
1,013
6,311
Accumulated amortisation and impairment
(494)
(498)
(55)
(572)
(1,619)
Net carrying amount
3,352
823
76
441
4,692
Movement
Net carrying amount at the beginning of the year
3,337
824
84
439
4,684
Additions
-
-
-
112
112
Disposals and write-offs
-
-
-
(6)
(6)
Impairment
-
-
-
(4)
(4)
Amortisation
-
(1)
(8)
(109)
(118)
Acquisition/(disposal) of controlled entities
15
-
-
9
24
Net carrying amount at the end of the year
3,352
823
76
441
4,692
Key estimates: property, plant and equipment
The estimations of useful lives, residual value and depreciation 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 the specific assets or groups of assets, such as a change in store performance or the life of mine. 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 values or depreciation and amortisation methods.
Key judgement: assets under construction
The Mt Holland lithium project (the Project) predominantly consists of mine properties, and plant, vehicles and equipment. The
determination of when the individual components of the Project are substantially complete and ready for intended use, requires
management judgement, which considers the following factors:
• the level of capital expenditure incurred to date compared with the original construction cost estimates;
• whether the majority of the assets are substantially complete and ready for use;
• whether the completion of a reasonable period of testing each asset has occurred;
• whether the ability to produce mineral resources in a saleable form (within specifications) has been demonstrated; and
• whether the ability to sustain ongoing production has been demonstrated.
During FY2024, the Project’s concentrator (within plant, vehicles and equipment) was determined to be in production and commenced
depreciation, with mine properties having commenced depreciation in FY2023. The refinery continues to be classified as assets under
construction within plant, vehicles and equipment.
Wesfarmers 2024 Annual Report
147
Notes to the financial statements: Group balance sheet
For the year ended 30 June 2024
Financial
statements
About
this report
Segment
information
Group
performance
Group
balance sheet
Capital
Risk
Group
information
Other
8. Goodwill and intangible assets (continued)
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.
Intangible assets
The cost of intangible assets acquired in a business combination is
their fair value at the date of acquisition. Intangible assets not acquired
as part of a business combination are measured on initial recognition
at cost. Following initial recognition, intangible assets are carried at
cost less accumulated 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 are reviewed annually.
Intangible assets with indefinite useful lives are tested for impairment in
the same way as goodwill.
A summary of the useful lives of intangible assets is as follows:
Intangible asset
Useful life
Brand1
Indefinite
Contractual and non-contractual
relationships2
Indefinite and finite
(up to 15 years)
Software
Finite (up to 10 years)
1 Includes trade names and other intangible assets with characteristics of a
brand.
2 Contractual and non-contractual relationships are intangible assets that have
arisen through business combinations and asset acquisitions. They represent
the value of pre-existing customer and contractual relationships in the
acquired company.
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.
Impairment
Refer to note 18 for details on impairment testing.
Consolidated
2024
2023
$m
$m
Allocation of goodwill to groups of cash
generating units
Carrying amount of goodwill
Bunnings Group
883
877
Kmart Group
856
856
WesCEF
2
2
Officeworks
816
816
Industrial and Safety
418
418
Health
613
383
3,588
3,352
Allocation of indefinite life intangible assets to
groups of cash generating units1
Carrying amount of brand
Bunnings Group
14
14
Kmart Group
415
415
Officeworks
160
160
Industrial and Safety
22
22
Health
228
194
Catch
-
18
839
823
1 Contractual and non-contractual relationships includes $23 million (2023: nil) of
indefinite life intangible assets allocated to Other.
Key judgement: useful lives of intangible assets
Brands have been assessed as having indefinite useful lives
on the basis of brand strength, ongoing expected profitability
and continuing support.
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.
Financial statements
Wesfarmers 2024 Annual Report
148
Notes to the financial statements: Group balance sheet
For the year ended 30 June 2024
9. Leases
Group as a lessee
The Group has leases primarily in relation to retail and distribution properties, in addition to leases for 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
Land
Buildings
Vehicles
and other
Total
Consolidated
$m
$m
$m
$m
Year ended 30 June 2024
Gross carrying amount - at cost
117
10,302
74
10,493
Accumulated depreciation and impairment
(32)
(4,936)
(28)
(4,996)
Net carrying amount
85
5,366
46
5,497
Movement
Net carrying amount at the beginning of the year
89
5,536
51
5,676
Net additions1
6
924
5
935
Impairment, net of reversals
-
(7)
-
(7)
Depreciation
(10)
(1,099)
(10)
(1,119)
Acquisition/(disposal) of controlled entities
-
14
-
14
Other including foreign exchange movements
-
(2)
-
(2)
Net carrying amount at the end of the year
85
5,366
46
5,497
Year ended 30 June 2023
Gross carrying amount - at cost
111
9,442
73
9,626
Accumulated depreciation and impairment
(22)
(3,906)
(22)
(3,950)
Net carrying amount
89
5,536
51
5,676
Movement
Net carrying amount at the beginning of the year
72
5,896
46
6,014
Net additions1
24
709
14
747
Impairment, net of reversals
-
(1)
-
(1)
Depreciation
(7)
(1,072)
(8)
(1,087)
Acquisition/(disposal) of controlled entities
-
(3)
(1)
(4)
Other including foreign exchange movements
-
7
-
7
Net carrying amount at the end of the year
89
5,536
51
5,676
1 Includes new leases and remeasurements, net of terminated leases.
Wesfarmers 2024 Annual Report
149
Notes to the financial statements: Group balance sheet
For the year ended 30 June 2024
Financial
statements
About
this report
Segment
information
Group
performance
Group
balance sheet
Capital
Risk
Group
information
Other
Set out below are the carrying amounts of the lease liabilities and the
movements during the year.
Consolidated
2024
2023
$m
$m
Current
1,165
1,135
Non-current
5,357
5,604
Total lease liabilities
6,522
6,739
Movement
Net carrying amount at the beginning of the year
6,739
7,123
Net additions1
940
755
Accretion of interest
236
219
Gross lease payments
(1,416)
(1,361)
Acquisition/(disposal) of controlled entities
25
(4)
Other including foreign exchange movements
(2)
7
Net carrying amount at the end of the year
6,522
6,739
1 Includes new leases and remeasurements, net of terminated leases.
The maturity profile of the Group's lease liabilities based on contractual
undiscounted payments is provided in note 16(B).
The Group has a number of lease contracts that include
extension options. Management exercises 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
(2023: 75 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 $6,522 million
(2023: $6,739 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 2024.
The following are the lease-related amounts recognised in the income
statement.
Consolidated
2024
2023
$m
$m
Depreciation of right-of-use assets
1,119
1,087
Interest on lease liabilities
236
219
Included in occupancy-related expenses:
Short-term and low-value lease payments
41
35
Contingent rental payments
54
51
Outgoings and other
446
419
Total amount recognised in the income
statement
1,896
1,811
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 measured at cost, less any accumulated depreciation
and impairment losses, and adjusted for any remeasurement of
lease liabilities. The initial cost of right-of-use assets includes the
amount of lease liabilities recognised, initial direct costs incurred,
any restoration costs 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 where it is 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.
$m
%
Bunnings Group
3,402
52.2
Kmart Group
2,237
34.3
WesCEF
57
0.9
Officeworks
424
6.5
Industrial and Safety
109
1.7
Health
226
3.5
Catch
35
0.5
Other
32
0.4
Total
6,522
Lease liabilities by segment
as at 30 June 2024
9. Leases (continued)
Financial statements
Wesfarmers 2024 Annual Report
150
Notes to the financial statements: Group balance sheet
For the year ended 30 June 2024
Key judgements and estimates: leases
Lease term
The lease term is considered to be a key judgement. At lease
commencement, the Group 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. As at 30 June 2024, the rates were between
1.0 and 6.5 per cent (2023: between 1.0 and 5.9 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.
Stand-alone price of lease and non-lease
components
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.
Consolidated
2024
2023
$m
$m
Current
Employee benefits
940
869
Self-insured risks
98
123
Restoration and restructuring
49
48
Other
76
77
1,163
1,117
Non-current
Employee benefits
94
101
Self-insured risks
120
111
Restoration and restructuring
168
161
Other
1
1
383
374
Total provisions
1,546
1,491
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.
Key estimate: discounting
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.
As at 30 June 2024, the rates were between
5.0 and 5.5 per cent (2023: between 5.2 and 5.6 per cent).
10. Provisions
9. Leases (continued)
Wesfarmers 2024 Annual Report
151
Notes to the financial statements: Group balance sheet
For the year ended 30 June 2024
Financial
statements
About
this report
Segment
information
Group
performance
Group
balance sheet
Capital
Risk
Group
information
Other
10. 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 $439 million
(2023: $426 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 actuarial 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 is unlikely to have a material impact.
Restoration and restructuring
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.
Mine and plant rehabilitation
The Group's mining activities create obligations for site closure and
rehabilitation when the environmental disturbance occurs. Provisions
for closure and rehabilitation have been measured by calculating the
present value of future rehabilitation costs using a risk-free discount
rate over a period of up to 50 years.
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.
Self-insured
risks
Restoration and
restructuring
Other
Total
Consolidated
$m
$m
$m
$m
Carrying amount at 1 July 2023
234
209
78
521
Net provisions arising during the year
50
18
26
94
Utilised
(66)
(14)
(35)
(115)
Acquisition/(disposal) of controlled entities
-
4
8
12
Carrying amount at 30 June 2024
218
217
77
512
Carrying amount at 1 July 2022
235
202
90
527
Net provisions arising during the year
61
16
20
97
Utilised
(62)
(8)
(32)
(102)
Acquisition/(disposal) of controlled entities
-
(1)
-
(1)
Carrying amount at 30 June 2023
234
209
78
521
Financial statements
Wesfarmers 2024 Annual Report
152
Notes to the financial statements: Capital
For the year ended 30 June 2024
11. 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 debt (interest-bearing loans and borrowings, exclusive of lease
liabilities, less cash and cash equivalents). 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. The Group
aims to maintain a capital structure that is consistent with a stable
investment-grade credit rating.
Consolidated
2024
2023
$m
$m
Equity and reserves
Issued capital
13,574
13,574
Reserved shares
(102)
(102)
Retained earnings
1,173
818
Reserves
(6,060)
(6,009)
8,585
8,281
Debt (excluding lease liabilities)
Total interest-bearing loans and
borrowings
4,756
4,430
Less:
Cash and cash equivalents
(835)
(673)
3,921
3,757
Total capital
12,506
12,038
Net financial debt
Total interest-bearing loans and
borrowings
4,756
4,430
Less:
Cash at bank and on deposit and cash
held in joint operation1
(484)
(421)
Net debt
4,272
4,009
Less:
Cross-currency interest rate swaps
(5)
(14)
Interest rate swaps
(9)
(11)
Net financial debt
4,258
3,984
1 Exclusive of cash on hand and cash in transit. Refer to note 4 for further details.
Consolidated
2024
2023
$m
$m
Free cash flow
Net cash flows from operating activities
4,594
4,179
Less:
Capital expenditure
(1,076)
(1,288)
Net (acquisitions)/disposals
(325)
631
Add:
Proceeds from sale of property, plant
and equipment and intangibles
32
105
Free cash flow
3,225
3,627
Debt to EBITDA1
Total interest-bearing loans and
borrowings
4,756
4,430
Total lease liabilities
6,522
6,739
Less:
Cash and cash equivalents
(835)
(673)
Debt (inclusive of lease liabilities) (A)
10,443
10,496
Profit before income tax
3,587
3,509
Interest on lease liabilities
236
219
Other finance costs
166
135
Depreciation and amortisation
1,800
1,701
EBITDA (B)
5,789
5,564
Debt to EBITDA (times) (A/B)
1.8
1.9
Group credit ratings
S&P Global Ratings
A-(stable)
A-(stable)
Moody's Investors Service
A3(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.
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.
The Group 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 S&P Global Ratings and Moody’s Investors Service.
Wesfarmers 2024 Annual Report
153
Notes to the financial statements: Capital
For the year ended 30 June 2024
Financial
statements
About
this report
Segment
information
Group
performance
Group
balance sheet
Capital
Risk
Group
information
Other
12. Dividends and distributions
13. Equity and reserves
Consolidated
2024
2023
$m
$m
Determined during the year (dividends
fully-franked at 30 per cent)
Interim dividend for 2024: $0.91
(2023: $0.88) per share
1,033
998
Final dividend for 2023: $1.03
(2022: $1.00) per share
1,169
1,134
2,202
2,132
Proposed and unrecognised as a liability
(dividends fully-franked at 30 per cent)
Final dividend for 2024: $1.07
(2023: $1.03) per share
1,214
1,169
1,214
1,169
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
886
884
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
(520)
(501)
Wesfarmers’ dividend policy considers availability of franking credits,
current earnings, 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 ASX,
calculated with reference to a pricing period as determined by
the directors.
An issue of shares under the dividend investment plan could result in
an increase in issued capital unless the Group elects to purchase the
required number of shares on-market.
Interim dividend
Final dividend (2024: proposed)
Special dividend
Capital return
Shareholder distributions
-
1.0
2.0
3.0
4.0
$/share
2020
2021
2022
2023
2024
The nature of the Group’s contributed equity
Ordinary shares are fully paid and carry one vote per share and the
right to dividends.
Reserved shares are ordinary shares that have been issued (including
unquoted shares) or repurchased by the company and are being held
to satisfy the Key Executive Equity Performance Plan (KEEPP).
Incremental costs directly attributable to the issue of new shares are
shown in equity as a deduction, net of tax, from the proceeds.
Movement in shares
on issue
Ordinary shares1
Reserved shares
'000
$m
'000
$m
At 1 July 2023
1,134,514
13,574
(1,440)
(102)
KEEPP vested during
the year
-
-
372
-
2020
Performance-tested
shares vested during
the year
-
-
60
-
Issue of unquoted
fully-paid ordinary
shares for the
purposes of KEEPP
267
-
(267)
-
At 30 June 2024
1,134,781
13,574
(1,275)
(102)
At 1 July 2022
1,134,145
13,574
(2,349)
(102)
Exercise of
in-substance options
-
-
939
-
KEEPP vested during
the year
-
-
339
-
Issue of unquoted
fully-paid ordinary
shares for the
purposes of KEEPP
369
-
(369)
-
At 30 June 2023
1,134,514
13,574
(1,440)
(102)
1 As at 30 June 2024, there were 603,527 unquoted fully-paid ordinary shares
(2023: 521,881). The unquoted fully-paid ordinary shares rank equally with
other ordinary shares but the payment of dividend entitlements is deferred
until quotation.
Financial statements
Wesfarmers 2024 Annual Report
154
Notes to the financial statements: Capital
For the year ended 30 June 2024
13. Equity and reserves (continued)
14. Earnings per share
Consolidated
2024
2023
Profit attributable to ordinary equity holders
of the parent ($m)
2,557
2,465
WANOS1 used in the calculation of
basic EPS (shares, million)2
1,133
1,132
WANOS1 used in the calculation of
diluted EPS (shares, million)2
1,133
1,133
Basic EPS (cents per share)
225.7
217.8
Diluted EPS (cents per share)
225.7
217.6
1 Weighted average number of ordinary shares.
2 The variance in the WANOS used in the calculation of the basic earnings
per share (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 equity holders
of the parent, adjusted to exclude any costs of servicing equity
(other than dividends), divided by the weighted average number of
ordinary shares.
Diluted EPS
Diluted EPS is calculated as 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.
Reported basic EPS
Basic EPS adjusted for significant items
Reported
basic EPS
Adjusted
basic EPS
FY24
225.7
225.7
FY23
217.8
217.8
FY22
207.8
207.8
FY211
210.4
214.1
FY202
150.0
183.4
225.7 cents
Basic earnings per share
cents/share
-
50
100
150
200
250
FY20 FY21 FY22 FY23 FY24
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.
Consolidated
2024
2023
Nature and purpose
$m
$m
Cash flow hedge reserve
(18)
38
To record the portion of the unrealised 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 2024 includes the after-tax net
movement in the market value of cash flow hedges from 30 June 2023, and comprised
a $(63) million (2023: $(55) million) movement in foreign exchange rate contracts, a
$8 million (2023: $(22) million) movement in cross-currency interest rate swaps, a
$(2) million (2023: $8 million) movement in interest rate swaps, a $1 million (2023: nil)
movement in commodity swaps and a nil (2023: $1 million) movement in associates and
joint ventures reserves.
Demerger reserve
(5,860)
(5,860)
To recognise the gain on demerger of Coles and the demerger dividend.
Financial assets reserve
69
71
To record fair value changes on financial assets measured at fair value through other
comprehensive income.
Foreign currency
translation reserve
35
39
To record exchange differences arising from the translation of the financial statements
of foreign subsidiaries.
Leasing reserve
(518)
(518)
To recognise the cumulative effect of applying AASB 16 Leases at the date of initial
application.
Share-based
payments reserve
65
54
To recognise the value of equity-settled share-based payments provided to employees,
including key management personnel, as part of their remuneration.
Other reserves
167
167
Includes the restructure tax reserve, capital reserve and general reserve.
Total reserves
(6,060)
(6,009)
The following table details the Group’s reserves (net of tax), including the reserves’ nature and purpose.
Wesfarmers 2024 Annual Report
155
Notes to the financial statements: Capital
For the year ended 30 June 2024
Financial
statements
About
this report
Segment
information
Group
performance
Group
balance sheet
Capital
Risk
Group
information
Other
Consolidated
2024
2023
$m
$m
Non-current
Unsecured
Bank debt
2,797
2,452
Capital markets debt
1,959
1,978
Total interest-bearing loans and borrowings
4,756
4,430
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 the income statement 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. Fair value gains and losses are
recognised in the income statement.
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.
Throughout the period, a number of bilateral bank agreements have
been extended or entered into to maintain the Group’s debt capacity
and average maturity profile.
The Group had unused bank financing facilities available at
30 June 2024 of $1,947 million (2023: $2,625 million).
15. Interest-bearing loans and borrowings
Sustainability and climate targets in
sustainability-linked bonds and loans
As at 30 June 2024, the Group had outstanding
Australian dollar and Euro denominated sustainability-linked
bonds (SLBs) totalling A$1,959 million (2023: A$1,978 million).
The SLBs highlight the significance of the Group’s
sustainability priorities in supporting long-term funding and
value creation.
The interest rates payable on the SLBs are linked to two
sustainability performance targets (SPTs). The SPTs relate
to achieving 100 per cent renewable electricity in Bunnings,
Kmart, Target and Officeworks by 31 December 2025 and
limiting the CO2e emissions intensity in ammonium nitrate
production in the WesCEF division 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).
The Group has sustainability-linked loans (SLLs) totalling
$400 million (2023: $400 million). As at 30 June 2024, the
Group had drawn $119 million (2023: $50 million). The
interest rates payable on the SLLs are linked to the Group’s
progress on Indigenous employment and emissions intensity
in ammonium nitrate production in the WesCEF division
consistent with the SLBs.
LIABILITIES FROM FINANCING
ACTIVITIES
Borrowings due
within one year
Borrowings due
after one year
Derivatives
held to hedge
borrowings
Total
Consolidated
$m
$m
$m
$m
Balance as at 1 July 2023
-
4,430
(14)
4,416
Cash inflows
-
347
-
347
Cash outflows
(30)
-
-
(30)
Acquisition of controlled entities
30
-
-
30
Foreign exchange adjustments
-
(20)
20
-
Other non-cash movements
-
(1)
(11)
(12)
Balance as at 30 June 2024
-
4,756
(5)
4,751
Balance as at 1 July 2022
988
3,970
(195)
4,763
Cash inflows
-
380
-
380
Cash outflows
(765)
-
-
(765)
Acquisition of controlled entities
1
-
-
1
Foreign exchange adjustments
(224)
78
149
3
Other non-cash movements
-
2
32
34
Balance as at 30 June 2023
-
4,430
(14)
4,416
Financial statements
Wesfarmers 2024 Annual Report
156
Notes to the financial statements: Risk
For the year ended 30 June 2024
16. 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 debt, capital markets debt, cash and short-term deposits.
• Operational: the Group’s activities generate financial instruments, including cash, trade receivables and trade payables.
• Risk management: to reduce risks arising from the financial instruments described above, including cross-currency interest rate swaps,
interest rate swaps, foreign exchange contracts and commodity 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
Management
Liquidity risk (note 16(B))
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
S&P Global Ratings and Moody's Investors Service, which support its ability
to raise additional debt in capital markets when necessary.
Market risk (note 16(C))
Foreign
exchange
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.
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 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 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.
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 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.
Commodity
price risk
The Group’s exposure to commodity price
risk mainly 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). Some divisions also sell products that
are in the nature of commodities or are priced
with reference to commodity prices. Changes
in relevant commodity prices 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. The foreign exchange
risk component may be managed separately as part of the Group's foreign
exchange risk management policies.
Wesfarmers 2024 Annual Report
157
Notes to the financial statements: Risk
For the year ended 30 June 2024
Financial
statements
About
this report
Segment
information
Group
performance
Group
balance sheet
Capital
Risk
Group
information
Other
16. Financial risk management (continued)
Risk
Exposure
Management
Credit risk (note 16(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.
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.
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.
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.
16(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 17 represent the derivative financial assets and liabilities of the Group that are subject to the above arrangements,
and are presented on a gross basis.
16(B) Liquidity risk
As at 30 June 2024, the Group had unused bank financing facilities available of $1,947 million (2023: $2,625 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 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, hedge cross-currency interest rate swaps, hedge interest rate swaps, hedge foreign
exchange contracts and hedge commodity swaps, the amounts disclosed are the gross contractual cash flows to be paid estimated using
forward currency exchange rates, forward interest rates and forward commodity prices applicable at the reporting date.
Early payment facility for suppliers
The Group has a facility in place to assist its suppliers to manage their cash flows. Suppliers can elect to receive early payment of some or all
of their invoices by electing to sell their invoices to third-party financiers. They typically receive payment the same business day, or within one
business day, of election. Supplier participation in the program is optional and the Group does not use this as an opportunity to extend payment
terms or obtain any commission or financial benefit. The relevant invoices continue to be payable on their original due dates and continue to
be classified as trade and other payables in the balance sheet, as the prepayment arrangement is between the supplier, the financiers and the
third-party platform provider. The value of invoices sold by suppliers under the facility as at 30 June 2024 was $651 million (2023: $727 million).
Financial statements
Wesfarmers 2024 Annual Report
158
Notes to the financial statements: Risk
For the year ended 30 June 2024
16(B) Liquidity risk (continued)
Foreign exchange risk
The Group's exposures to the US dollar and Euro (prior to hedging contracts) at the reporting date were as follows:
2024
2023
USD
EUR
USD
EUR
Consolidated
A$m
A$m
A$m
A$m
Financial assets
Cash and cash equivalents
15
-
21
-
Trade and other receivables
55
-
40
-
Hedge cross-currency interest rate swaps
-
5
-
14
Hedge foreign exchange contracts
25
-
118
-
Hedge commodity swaps
2
-
-
-
Financial liabilities
Trade and other payables
(1,411)
(11)
(1,305)
(10)
Interest-bearing loans and borrowings
-
(966)
-
(987)
Hedge foreign exchange contracts
(35)
(1)
(10)
-
Net exposure
(1,349)
(973)
(1,136)
(983)
16(C) Market risk
On demand or
< 3 months
3-12 months
1-5 years
>5 years
Total
contractual
cash flows
Carrying
amount
(assets)/
liabilities
Consolidated
$m
$m
$m
$m
$m
$m
As at 30 June 2024
Trade and other payables
4,997
380
-
-
5,377
5,377
Lease liabilities
303
1,064
4,258
1,804
7,429
6,522
Expected future interest payments on loans and
borrowings
38
138
348
71
595
-
Loans and borrowings before swaps
-
-
3,058
1,897
4,955
4,756
Hedge cross-currency interest rate swaps
(gross settled)
-
20
76
(138)
(42)
(5)
Hedge interest rate swaps (net settled)
-
(4)
(5)
-
(9)
(9)
Hedge foreign exchange contracts
(gross settled)
6
15
(8)
-
13
11
Hedge commodity swaps (net settled)
(2)
-
-
-
(2)
(2)
Total
5,342
1,613
7,727
3,634
18,316
16,650
As at 30 June 2023
Trade and other payables
4,906
362
-
-
5,268
5,268
Lease liabilities
292
1,034
4,311
1,946
7,583
6,739
Expected future interest payments on loans and
borrowings
35
129
193
92
449
-
Loans and borrowings before swaps
-
-
3,105
1,552
4,657
4,430
Hedge cross-currency interest rate swaps
(gross settled)
-
20
75
(172)
(77)
(14)
Hedge interest rate swaps (net settled)
-
(5)
(10)
-
(15)
(11)
Hedge foreign exchange contracts
(gross settled)
(37)
(69)
(2)
-
(108)
(108)
Total
5,196
1,471
7,672
3,418
17,757
16,304
Wesfarmers 2024 Annual Report
159
Notes to the financial statements: Risk
For the year ended 30 June 2024
Financial
statements
About
this report
Segment
information
Group
performance
Group
balance sheet
Capital
Risk
Group
information
Other
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.
2024
2023
Consolidated
USD
EUR
USD
EUR
Actual
0.66
0.62
0.66
0.61
+10% (2023: +10%)
0.73
0.68
0.73
0.67
-10% (2023: -10%)
0.60
0.56
0.60
0.55
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.
The below sensitivity analysis does not include the impact on the
Group's equity from the translation of subsidiaries with differing
functional currencies (primarily the New Zealand dollar) to the Group's
presentation currency.
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 2024, 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.
2024
2023
Consolidated
A$m
A$m
AUD/USD +10% (2023: +10%)
- impact on profit
11
7
- impact on equity
(165)
(151)
AUD/USD -10% (2023: -10%)
- impact on profit
(14)
(8)
- impact on equity
222
182
AUD/EUR +10% (2023: +10%)
- impact on profit
-
-
- impact on equity
4
7
AUD/EUR -10% (2023: -10%)
- impact on profit
-
-
- impact on equity
(12)
(9)
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.
2024
2023
Consolidated
$m
$m
Financial assets
Fixed rate
Finance advances and loans
3
3
Floating rate
Cash at bank, on deposit and held in joint
operation
484
421
Financial liabilities
Fixed rate
Capital markets debt
1,959
1,978
Unsecured bank debt
500
500
Floating rate
Unsecured bank debt
2,297
1,952
At 30 June 2024, after taking into account the effect of interest
rate swaps and economic hedging relationships, approximately
48 per cent of the Group’s borrowings are exposed to movements in
variable rates (2023: approximately 45 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 and 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.
16(C) Market risk (continued)
Financial statements
Wesfarmers 2024 Annual Report
160
Notes to the financial statements: Risk
For the year ended 30 June 2024
16(C) Market risk (continued)
16(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:
2024
2023
Consolidated
$m
$m
Capital markets debt: carrying amount
1,959
1,978
Capital markets debt: fair value
1,636
1,563
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.
Derivatives
The Group enters into derivative financial instruments with various
counterparties, principally banks and financial institutions with
investment-grade credit ratings. Foreign exchange contracts, interest
rate swaps, cross-currency interest rate swaps and commodity
swaps are all valued using forward pricing techniques. These include
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.
Interest-bearing loans and borrowings
The fair value of capital markets debt as outlined above has been
calculated using quoted market prices or dealer quotes for similar
instruments. The fair value of bank debt is calculated by discounting
the expected future cash flows at prevailing interest rates using
market observable inputs and is not materially different to the
carrying amount.
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 fair value through other comprehensive income (FVOCI)
(Level 1) and shares in unlisted companies at fair value (Level 3), which
were $18 million at 30 June 2024 (2023: $14 million).
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.
The following sensitivity analysis is based on the Australian variable
interest rate risk exposures in existence at the balance sheet
date. If interest rates had moved by +/- 100bps (basis points)
(2023: +/- 100bps) 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.
2024
2023
Consolidated
$m
$m
+100bps (2023: +100bps)
- impact on profit
(12)
(12)
- impact on equity
50
57
-100bps (2023: -100bps)
- impact on profit
12
12
- impact on equity
(54)
(63)
16(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
Estimated total
gross carrying
amount at default
Expected
credit
loss rate
Lifetime
expected
credit
loss
$m
%
$m
2024
Current (not yet due)
1,916
0.4
7
Under one month
213
6.6
14
One to two months
61
4.9
3
Two to three months
14
21.4
3
Over three months
66
50.0
33
Total
2,270
60
2023
Current (not yet due)
1,762
0.5
8
Under one month
200
2.0
4
One to two months
56
1.8
1
Two to three months
34
29.4
10
Over three months
57
70.2
40
Total
2,109
63
Wesfarmers 2024 Annual Report
161
Notes to the financial statements: Risk
For the year ended 30 June 2024
Financial
statements
About
this report
Segment
information
Group
performance
Group
balance sheet
Capital
Risk
Group
information
Other
17. 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 16, the Group holds the following types of
derivative instruments:
Foreign exchange contracts: contracts denominated in US dollars,
Euro and other foreign currencies to hedge highly probable sale and
purchase transactions (cash flow hedges).
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.
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 income statement as a finance cost over the
remaining life of the borrowing.
Lithium hydroxide swaps: to manage the Group’s exposure to
price variability in its forecast sales of spodumene concentrate (cash
flow hedge).
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 16(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.
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.
2024
2023
Notional
Weighted
average
hedged rate
Asset
Liability
Notional
Weighted
average
hedged rate
Asset
Liability
Consolidated
A$m
A$m
A$m
A$m
Foreign exchange contracts
Cash flow hedge - sales (AUD)
US$77m
Asset: 0.65;
Liability: 0.67
1
-
US$34m
Asset: 0.66;
Liability: 0.68
-
(1)
Cash flow hedge - purchases (AUD)
US$2,512m
Asset: 0.68;
Liability: 0.66
21
(33)
US$2,204m
Asset: 0.69;
Liability: 0.65
109
(8)
Cash flow hedge - purchases (NZD)
US$209m
Asset: 0.62;
Liability: 0.60
3
(2)
US$188m
Asset: 0.63;
Liability: 0.59
9
(1)
Cash flow hedge - purchases (AUD)
€ 20m
Asset: 0.63;
Liability: 0.61
-
(1)
€ 19m
Asset: 0.62;
Liability: 0.60
-
-
Cross-currency interest rate swaps
Cash flow hedge
€ 600m
3.04% fixed
5
-
€ 600m
3.04% fixed
14
-
Interest rate swaps
Cash flow hedge
A$500m
3.42% fixed
9
-
A$500m
3.42% fixed
11
-
Lithium hydroxide swaps
Cash flow hedge
255 tonnes
US$19,656
per tonne
2
-
-
-
-
-
Total derivative asset/(liability)
41
(36)
143
(10)
Financial statements
Wesfarmers 2024 Annual Report
162
Notes to the financial statements: Risk
For the year ended 30 June 2024
17. 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.
If the hedged item is an unrecognised firm commitment, 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. As at 30 June 2024, the Group had no fair value hedges.
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, sale or settlement commitments in foreign currencies. The Group uses cash flow hedges to hedge variability in
cash flows due to interest rates on some of our borrowings and commodity hedges to hedge variability in cash flows due to commodity price
movements on some of our sales.
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 net amount recognised in the income statement in FY2024 was less than $2 million
(2023: less than $1 million). The maturity profile of these hedges is shown in note 16(B) with the recognition of the gain or loss expected to be
consistent with this profile.
2024
2023
Consolidated
Trade
Foreign
bonds
Domestic
debt
Spodumene
concentrate
sales
Trade
Foreign
bonds
Domestic
debt
$m
$m
$m
$m
$m
$m
$m
Change in the fair value of the hedged item
(119)
(9)
(2)
2
(125)
(181)
11
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.
Wesfarmers 2024 Annual Report
163
Notes to the financial statements: Risk
For the year ended 30 June 2024
Financial
statements
About
this report
Segment
information
Group
performance
Group
balance sheet
Capital
Risk
Group
information
Other
18. Impairment of non-financial assets
Testing for impairment
The Group tests property, plant and equipment, goodwill and
intangible assets, and right-of-use assets for impairment:
• at least annually for goodwill and indefinite life intangible
assets; 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 conditions causing a previously
recognised impairment (on assets other than goodwill) may no
longer exist.
Annual impairment testing of goodwill and indefinite life intangible
assets is performed at 31 March each year to coincide with the
timing of the annual corporate plan and business forecasts, which are
prepared by management and approved by the Board. The corporate
plans are typically based on a five-year outlook.
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.
Assets are impaired if their carrying amount 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
Fair value less costs of disposal
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, using
market observed inputs where available.
Cash flow projections are based on Wesfarmers’ corporate plans and
business forecasts along with reasonably available market participant
assumptions.
Value in use
In assessing VIU, the estimated future cash flows are discounted to
their present value. Cash flow projections are based on Wesfarmers’
corporate plans and business forecasts, and are adjusted to exclude
the costs and benefits of expansion capital.
Discount rates
Discount rates used in both calculations are based on the weighted
average cost of capital determined by prevailing or benchmarked
market inputs, and risk adjusted where necessary.
Terminal value
Cash flows beyond the 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 growth rate for the industry in which the
CGU operates.
Other
Other assumptions are determined with reference to external sources
of information and use consistent estimates for variables, such as
terminal cash flow multiples.
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.
Recognised impairment
During FY2024, impairment of $39 million, net of reversals, was
recognised in respect of non-financial assets (2023: $14 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 for
impairment reversal. Impairments recognised against goodwill are
not reversed.
There were no material reversals of impairment during FY2024. 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.
Climate-related risks
The Group's assessment of the potential financial impacts
of climate-related risks, including the associated costs of
achieving net zero Scope 1 and Scope 2 emissions targets for
Bunnings, Kmart Group and Officeworks by 2030, Industrial
and Safety (excluding Coregas) and Health by 2035 and
WesCEF and Coregas by 2050, continues to mature.
The potential financial impacts of climate-related risks have
been considered in the CGUs' impairment tests through the
inclusion of costs for committed initiatives or through downside
scenario analysis.
As at 30 June 2024, this analysis did not indicate a
climate-related risk of material impairment due to the current
headroom in each of the Group's affected CGUs.
The financial impact of this risk will continue to be assessed.
Financial statements
Wesfarmers 2024 Annual Report
164
Notes to the financial statements: Risk
For the year ended 30 June 2024
18. Impairment of non-financial assets (continued)
Key estimates: impairment of non-financial assets
Health CGU
The Health CGU represents the level at which goodwill has been allocated and tested for impairment. The impairment test included the
unallocated goodwill arising on the acquisition of SILK. Refer to note 21 for further details.
The recoverable amount has been determined using a FVLCOD discounted cash flow model. The key assumptions used for
assessing the recoverable amount of the Health CGU included a post-tax discount rate of 10.0 per cent (2023: 9.6 per cent) and a
terminal growth rate of 3.0 per cent (2023: 3.0 per cent). The post-tax discount rate incorporates a risk-adjustment relative to the
risks associated with the net post-tax cash flows being achieved, while the growth rates beyond the corporate plan are based on
consensus forecasts of the growth rate for the health industry.
The FVLCOD calculation determined headroom in excess of 10 per cent of the CGU's carrying value.
The recoverable amount of Health is sensitive to changes in the discount rate and the forecast terminal cash flow that drives the
terminal value. A 70 basis point increase in the discount rate or a 12 per cent reduction in its forecast terminal cash flow eliminates the
headroom in the recoverable amount.
Mt Holland lithium CGU
Mt Holland continues to be closely monitored for any indications of impairment, given price volatility, immaturity of the lithium market
and status of the project.
External sources of information considered by the Group include long-term lithium hydroxide (LiOH) price forecasts, AUD/USD
exchange rates and post-tax discount rates. Internal sources of information considered by the Group include estimated operating
costs, production volumes and remaining project capital expenditure.
LiOH price assumptions are based on the latest internal forecasts and reflect the Group’s long-term view of global supply and
demand for battery grade LiOH. The LiOH price assumptions considered a range of external sources, including broker consensus,
Wood Mackenzie, Fastmarkets and Benchmark Mineral Intelligence.
At 30 June 2024, the Group concluded that there were no indications that Mt Holland was impaired, but significant adverse
movements in key assumptions may lead to future impairment. In the event of an adverse movement in an assumption, the Group
would seek to take mitigating action.
Store and clinic CGUs
Store and clinic CGUs 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 or clinic CGU is determined using VIU calculations, based on forecast cash flows for the
store over its remaining life.
Other CGUs
The Group has assessed the recoverable amounts of CGUs with material goodwill and other indefinite life intangible assets using
a FVLCOD discounted cash flow model. Post-tax discount rates applied in the impairment testing for these CGUs ranged from
8.7 per cent to 11.7 per cent and terminal growth rates ranged from 2.0 per cent to 3.0 per cent. Key assumptions in the CGU's cash
flow projections include growth rates and gross margins, which are based on corporate plans that take into consideration historic
performance, forecast macroeconomic conditions and the estimated effect of strategies.
For CGUs with material goodwill and other indefinite life intangible assets, based on current economic conditions, the CGU's
performance and available headroom, 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.
Wesfarmers 2024 Annual Report
165
Notes to the financial statements: Group information
For the year ended 30 June 2024
Financial
statements
About
this report
Segment
information
Group
performance
Group
balance sheet
Capital
Risk
Group
information
Other
19. Associates and joint arrangements
Consolidated
2024
2023
$m
$m
Investments in associates
636
629
Investments in joint ventures
302
314
938
943
Movement in associates and joint ventures
Net carrying amount at the beginning of the
year
943
934
Share of net profits
35
9
Dividends received
(62)
(48)
Acquired during the year
-
15
Acquired as part of a business combination
2
-
Additional investment
23
27
Movements in reserves
(2)
8
Other
(1)
(2)
Net carrying amount at the end of the year
938
943
Total comprehensive income from associates
and joint ventures
Share of net profits of associates and joint
ventures
35
9
Other comprehensive (losses)/gains of
associates and joint ventures
(2)
8
Total comprehensive income for the year
33
17
Recognition and measurement
Investments 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 investments 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 associates.
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 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 associates.
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.
BWP Trust
During the financial year, BWP Trust acquired all of the issued
securities of Newmark Property REIT. As a result, the Group's interest
was diluted from 24.8 per cent to 22.3 per cent at 30 June 2024.
The fair value of the Group's interest, by reference to the closing unit
price of BWP Trust on 30 June 2024, materially approximated its
carrying value (Level 1 in the fair value hierarchy). The following table
summarises the financial information of the Group's investment in
BWP Trust.
2024
2023
$m
$m
Summarised balance sheet (100%)
Current assets
52
23
Non-current assets
3,535
2,937
Current liabilities
(107)
(86)
Non-current liabilities
(772)
(468)
Net assets
2,708
2,406
Group's share of BWP Trust's net assets
604
595
Fair value adjustment
(22)
(15)
Carrying amount at end of year
582
580
Summarised income statement (100%)
Revenue
174
158
Expenses
(55)
(45)
Unrealised gains/(losses) in fair value of
investment properties
61
(76)
Profit attributable to the unit holders of
BWP Trust
180
37
Group's share of profit for the year
40
9
Interests in joint arrangements
Joint operations
The Group recognises its share of the assets, liabilities, income and
expenses 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.
Key judgement: control and significant
influence
The management agreements establish whether the Group
has control, joint control or significant influence. The Group
assesses whether it has the power to direct the relevant
activities of the investee, including the rights it holds to appoint
or remove key management, other 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.
Financial statements
Wesfarmers 2024 Annual Report
166
Notes to the financial statements: Group information
For the year ended 30 June 2024
(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.
19. Associates and joint arrangements (continued)
Interests in associates and joint arrangements
Ownership
2024
2023
Associates
Principal activity
Reporting date
Country of incorporation/
place of business
%
%
BWP Trust
Property investment
30 June
Australia
22.3
24.8
Geared Up Culcha Pty Ltd
Industrial workwear supplier
30 June
Australia
49.0
49.0
Gresham AC Trust No. 2
Investment trust
30 June
Australia
(a)
(a)
Tecsa Limited
Data consultants
30 September
United Kingdom
30.0
30.0
World’s Biggest Garage Sale Pty Ltd
Restoration and resale
of used goods
30 June
Australia
21.4
21.4
Joint operations
Andreeva Enterprises Pty Ltd & Venture in
Broadmeadows Pty Ltd
Aesthetics clinic
30 June
Australia
50.0
-
ASC Altona Gate Pty Ltd & Venture in
Altona Gate Pty Ltd
Aesthetics clinic
30 June
Australia
50.0
-
Mt Holland Lithium
Lithium development
31 December
Australia
50.0
50.0
Sodium Cyanide
Sodium cyanide manufacture
30 June
Australia
75.0
75.0
Joint ventures
ASC Epping Franchise Pty Ltd
Aesthetics clinic
30 June
Australia
50.0
-
ASC Greensborough Pty Ltd
Aesthetics clinic
30 June
Australia
50.0
-
ASC North Lakes Joint Venture Pty Ltd
Aesthetics clinic
30 June
Australia
50.0
-
BPI No 1 Pty Ltd
Property investment
30 June
Australia
(b)
(b)
Covalent Lithium Pty Ltd
Management company
31 December
Australia
50.0
50.0
Gresham Partners Group Limited
Investment banking
30 September
Australia
50.0
50.0
Loyalty Pacific Pty Ltd
Loyalty programs
30 June
Australia
50.0
50.0
Queensland Nitrates Management Pty Ltd
Chemical manufacture
30 June
Australia
50.0
50.0
Queensland Nitrates Pty Ltd
Chemical manufacture
30 June
Australia
50.0
50.0
Silk Laser Clinic Glenelg Pty Ltd
Aesthetics clinic
30 June
Australia
55.0
-
Silk Tea Tree Plaza Pty Ltd
Aesthetics clinic
30 June
Australia
50.0
-
SLC Bunbury Pty Ltd
Aesthetics clinic
30 June
Australia
50.0
-
SLC Burnside Pty Ltd
Aesthetics clinic
30 June
Australia
51.0
-
SLC Castletown Pty Ltd
Aesthetics clinic
30 June
Australia
50.0
-
SLC Casuarina Pty Ltd
Aesthetics clinic
30 June
Australia
50.0
-
SLC Charlestown Pty Ltd
Aesthetics clinic
30 June
Australia
47.5
-
SLC Cockburn Pty Ltd
Aesthetics clinic
30 June
Australia
50.0
-
SLC Doncaster Pty Ltd
Aesthetics clinic
30 June
Australia
50.0
-
SLC Eastlands Pty Ltd
Aesthetics clinic
30 June
Australia
50.0
-
SLC Fairfield Pty Ltd
Aesthetics clinic
30 June
Australia
62.5
-
SLC Hornsby Pty Ltd
Aesthetics clinic
30 June
Australia
50.0
-
SLC Hurstville Pty Ltd
Aesthetics clinic
30 June
Australia
50.0
-
SLC Marion Pty Ltd
Aesthetics clinic
30 June
Australia
47.5
-
SLC Maroochydore Pty Ltd
Aesthetics clinic
30 June
Australia
50.0
-
SLC Palmerston Pty Ltd
Aesthetics clinic
30 June
Australia
50.0
-
SLC Southland Pty Ltd
Aesthetics clinic
30 June
Australia
50.0
-
SLC Toowoomba Pty Ltd
Aesthetics clinic
30 June
Australia
50.0
-
SLC Townsville Pty Ltd
Aesthetics clinic
30 June
Australia
50.0
-
SLC Wagga Pty Ltd
Aesthetics clinic
30 June
Australia
47.5
-
SLC West Lakes Pty Ltd
Aesthetics clinic
30 June
Australia
50.0
-
Wespine Industries Pty Ltd
Pine sawmillers
30 June
Australia
50.0
50.0
Wesfarmers 2024 Annual Report
167
Notes to the financial statements: Group information
For the year ended 30 June 2024
Financial
statements
About
this report
Segment
information
Group
performance
Group
balance sheet
Capital
Risk
Group
information
Other
20. Subsidiaries
The consolidated financial statements include the financial statements of Wesfarmers Limited and the subsidiaries listed in the following table:
Entity
2024
2023
%
%
Entity
2024
2023
%
%
A.C.N. 003 921 873 Pty Limited
100
100
A.C.N. 004 191 646 Pty Ltd
100
100
A.C.N. 061 462 593 Pty Ltd
100
100
A.C.N. 112 719 918 Pty Ltd
100
100
A.C.N. 645 670 711 Pty Ltd
100
100
A.C.N. 645 674 102 Pty Ltd
100
100
Aesthetics Skincare Pty Ltd
@
100
-
ANKO Global (France) SAS
(incorporated 19 December 2023)
Ⱶ
100
-
ANKO Global Holdings Pty Ltd
+
100
100
ANKO PH Holdings Pty Ltd (formerly
ConsortiumCo Pty Ltd)
100
100
ANKO Retail Incorporated
(deregistered, confirmed
18 December 2023)
z
-
100
API (Canberra) Pty Ltd
100
100
API Financial Services Australia Pty
Limited
100
100
API Healthcare Holdings (NZ) Limited
n
100
100
API Leasing Pty Ltd
100
100
API Owned CSC Pty Ltd
100
100
API Services Australia Pty Ltd
100
100
API Victoria Pty Ltd
+
100
100
ASC Coomera Pty Ltd
@
100
-
ASC Hold Co Pty Ltd
@
100
-
ASC IP Holdings Pty Ltd
@
100
-
ASC Marion Pty Ltd
@
100
-
ASC Master Franchise Pty Ltd
@
100
-
Australian Gold Reagents Pty Ltd
75
75
Australian International Insurance
Limited
+
100
100
Australian Light Minerals Pty Ltd
+
100
100
Australian Pharmaceutical Industries
(Queensland) Pty Ltd
+
100
100
Australian Pharmaceutical Industries
Pty Ltd
+
100
100
Australian Skin Clinics Marketing Fund
Pty Ltd
@
100
-
Australian Underwriting Holdings
Limited
+
100
100
Australian Underwriting Services Pty
Ltd
100
100
Australian Vinyls Corporation Pty Ltd
+
100
100
AVC Holdings Pty Ltd
+
100
100
AVC Trading Pty Ltd
+
100
100
BBC Hardware Limited
+
100
100
BBC Hardware Properties (NSW) Pty
Ltd
100
100
BBC Hardware Properties (Vic) Pty
Ltd
100
100
Beaumont Australia Pty Limited
100
100
Beaumont Bathrooms Renovator (SA)
Pty Limited
100
100
Beaumont Tiles (Vic) Pty Limited
100
100
Beaumont Tiles NZ Pty Limited
n
100
100
Beaumont’s Discount Tile Warehouse
Pty Limited
100
100
Beauty Services (New South Wales)
Pty Ltd
@
100
-
Beauty Services Holdings Pty Ltd
@
100
-
Beauty Services Pty Ltd
@
100
-
Blacksmith Jacks Pty Ltd
100
100
Blackwoods 4PL Pty Ltd
100
100
BPI Management Pty Ltd
100
100
BrandsExclusive (Australia) Pty Ltd
100
100
Bresnahan Exploration Pty Ltd
100
100
BUKI (Australia) Pty Ltd
+
100
100
Bullivants International Pty Ltd
100
100
Bullivants Pty Limited
+
100
100
Bunnings (NZ) Limited
n
100
100
Bunnings Group Limited
+
100
100
Bunnings Joondalup Pty Ltd
100
100
Bunnings Limited
n
100
100
Bunnings Management Services Pty
Ltd
+
100
100
Bunnings Properties Pty Ltd
+
100
100
Bunnings Technologies India Private
Limited
#
l
100
100
BWP Management Limited
<
100
100
C S Holdings Pty Limited
+
100
100
Campbells Hardware & Timber Pty
Limited
100
100
Canberra Pharmaceutical Supplies
Trust
n/a
n/a
Catch Essentials Pty Ltd
100
100
Catch Group Holdings Limited
+
100
100
Catch.com.au Pty Ltd
+
100
100
CGNZ Finance Limited
n
100
100
Chemical Holdings Kwinana Pty Ltd
+
100
100
Clearskincare Adelaide Street Pty Ltd
100
100
Clearskincare Bendigo Pty Ltd
100
100
Clearskincare Bondi Beach Pty Ltd
100
100
Clearskincare Bondi Junction Pty Ltd
100
100
Clearskincare Brighton Pty Ltd
100
100
Clearskincare Canberra City Pty Ltd
100
100
Clearskincare Carindale Pty Ltd
100
100
Clearskincare Carousel Pty Ltd
100
100
Clearskincare Chatswood Pty Ltd
100
100
Financial statements
Wesfarmers 2024 Annual Report
168
Notes to the financial statements: Group information
For the year ended 30 June 2024
20. Subsidiaries (continued)
Entity
2024
2023
%
%
Entity
2024
2023
%
%
Clearskincare Chermside Pty Ltd
100
100
Clearskincare Chirnside Park Pty Ltd
100
100
Clearskincare City Square Pty Ltd
100
100
Clearskincare Claremont Pty Ltd
100
100
Clearskincare Clarence Street Pty Ltd
100
100
Clearskincare Clinics Australia Pty Ltd
+
100
100
Clearskincare Clinics Payroll Pty Ltd
+
100
100
Clearskincare Clinics Pty Ltd
100
100
Clearskincare Cockburn Gateway
Pty Ltd
100
100
Clearskincare Collins Street Pty Ltd
100
100
Clearskincare Cremorne Pty Ltd
100
100
Clearskincare Cronulla Pty Ltd
100
100
Clearskincare Doncaster Pty Ltd
100
100
Clearskincare Fremantle Pty Ltd
100
100
Clearskincare Hurstville Pty Ltd
100
100
Clearskincare Leichhardt Pty Ltd
100
100
Clearskincare Macarthur Square Pty
Ltd
100
100
Clearskincare Macquarie Centre Pty
Ltd
100
100
Clearskincare Miranda Pty Ltd
100
100
Clearskincare Moonee Ponds Pty Ltd
100
100
Clearskincare Mt Lawley Pty Ltd
100
100
Clearskincare Newmarket Limited
n
100
100
Clearskincare Northland Pty Ltd
100
100
Clearskincare Norwood Pty Ltd
100
100
Clearskincare Parramatta Pty Ltd
100
100
Clearskincare Quentin Ave Pty Ltd
100
100
Clearskincare QV Melbourne Pty Ltd
100
100
Clearskincare Robina Pty Ltd
100
100
Clearskincare Rockdale Pty Ltd
100
100
Clearskincare South Australia Pty Ltd
100
100
Clearskincare South Yarra Pty Ltd
100
100
Clearskincare Southland Pty Ltd
100
100
Clearskincare Southport Pty Ltd
100
100
Clearskincare Sunshine Plaza Pty Ltd
100
100
Clearskincare Takapuna Limited
n
100
100
Clearskincare Toowong Pty Ltd
100
100
Clearskincare Ventures Pty Ltd
100
100
Clearskincare Warringah Mall Pty Ltd
100
100
Clearskincare West End Pty Ltd
100
100
Clinic Leasing Pty Ltd
@
100
-
CM3 Contractor Management Pty Ltd
100
100
CMNZ Investments Pty Ltd
100
100
Coo-ee Investments Pty Limited
100
100
Coregas NZ Limited
n
100
100
Coregas Pty Ltd
+
100
100
Crosby Tiles Pty Ltd
100
100
CSBP Ammonia Terminal Pty Ltd
100
100
CSBP Limited
+
100
100
CSC Ashfield Mall Pty Ltd
100
100
CSC Auckland Limited
n
100
100
CSC Bayside Frankston Pty Ltd
100
100
CSC Camberwell Pty Ltd
100
100
CSC Forest Hill Pty Ltd
100
100
CSC Forrest Chase Pty Ltd
100
100
CSC Franchising Pty Ltd
100
100
CSC Holdings Australia Pty Ltd
+
100
100
CSC Holdings New Zealand Limited
n
100
100
CSC Joondalup Pty Ltd
100
100
CSC Manuka Pty Ltd
100
100
CSC Mordialloc Pty Ltd
100
100
CSC Mt Ommaney Pty Ltd
100
100
CSC North Sydney Pty Ltd
100
100
CSC Northbridge Pty Ltd
100
100
CSC Ponsonby Limited
n
100
100
CSC Port Melbourne Pty Ltd
100
100
CSC Products Pty Ltd
100
100
CSC Riverton Pty Ltd
100
100
CSC Shared Services Pty Ltd
100
100
CSC West Lakes Pty Ltd
100
100
CSC Whitford Pty Ltd
100
100
CTE Pty Ltd
100
100
Cuming Smith and Company Limited
+
100
100
Dairy Properties Pty Ltd
100
100
Davyston Exploration Pty Ltd (formerly
Brenahan Exploration Pty Ltd)
100
100
Dowd Corporation Pty Ltd
100
100
Eastfarmers Pty Ltd
100
100
Eden Franchise Company Pty Ltd
@
100
-
Eden Holding Company Pty Ltd
@
100
-
Eden Laser Clinics (003) Pty Ltd
@
100
-
Eden Laser Clinics (004) Pty Ltd
@
55
-
Eden Laser Clinics (005) Pty Ltd
@
100
-
Eden Laser Clinics (006) Pty Ltd
@
100
-
Eden Laser Clinics (007) Pty Ltd
@
100
-
Eden Laser Clinics (008) Pty Ltd
@
100
-
Eden Laser Clinics (009) Pty Ltd
@
100
-
Eden Laser Clinics Pty Ltd
@
100
-
FIF Investments Pty Limited
100
100
Forward Scout Enterprises Pty Ltd
@
100
-
Fosseys (Australia) Pty Ltd
+
100
100
Garrett Investments Limited
n
100
100
Geeks2U Holdings Pty Limited
100
100
Wesfarmers 2024 Annual Report
169
Notes to the financial statements: Group information
For the year ended 30 June 2024
Financial
statements
About
this report
Segment
information
Group
performance
Group
balance sheet
Capital
Risk
Group
information
Other
20. Subsidiaries (continued)
Entity
2024
2023
%
%
Entity
2024
2023
%
%
Geeks2U International Pty Limited
100
100
Geeks2U IP Pty Limited
100
100
Geeks2U NZ Limited
n
100
100
Geeks2U Pty Limited
100
100
GPML Pty Ltd
100
100
HouseWorks Co Pty Ltd
100
100
Howard Smith Limited
+
100
100
InstantClinics Pty Ltd
^
100
-
InstantScripts Pty Ltd
^
100
-
J Blackwood & Son Pty Ltd
+
100
100
James Patrick & Co Pty Ltd (in
liquidation)
100
100
KAS Direct Sourcing Private Limited
#
l
100
100
KAS Global Trading Pty Limited
#
t
100
100
KAS International Sourcing
Bangladesh Pvt Ltd
x
100
100
KAS International Trading (Shanghai)
Company Limited
#
u
100
100
KAS Pty Limited
#
t
100
100
KAS Services India Private Limited
#
l
100
100
KGA Sourcing (Singapore) Pte. Ltd
#
z
100
100
Kidman Gold Pty Ltd
100
100
Kleenheat Pty Ltd
100
100
Kmart Australia Limited
+
100
100
Kmart Group Asia Pty Ltd
100
100
Kmart Holdings Pty Ltd
+
100
100
Kmart NZ Holdings Limited
n
100
100
Kwinana Nitrogen Company
Proprietary Limited
100
100
Lawvale Pty Ltd
100
100
Life’s Tiles Pty Ltd
100
100
Liftco Pty Limited
+
100
100
LMD2 Pty Ltd
@
100
-
Loggia Pty Ltd
+
100
100
M.L.E. Unit Trust
n/a
n/a
M3K Holdings Pty Ltd
@
100
-
M3K Services Pty Ltd
@
100
-
Making Life Easy - Mobility and
Independent Living Superstore Pty Ltd
100
100
Manacol Pty Limited
+
100
100
Meredith Distribution (NSW) Pty Ltd
100
100
Meredith Distribution Pty Ltd
100
100
MH Gold Pty Limited
+
100
100
Millars (WA) Pty Ltd
100
100
Modwood Technologies Pty Ltd
100
100
Montague Resources Australia Pty Ltd
100
100
Moonyoora Minerals Pty Ltd
100
100
Mumgo Pty Ltd
100
100
Neat N’ Trim Uniforms Pty Ltd
100
100
New Price Retail Finance Pty Ltd
+
100
100
New Price Retail Pty Ltd
+
100
100
New Price Retail Services Pty Ltd
100
100
New South Wales Hardwarehouse
Unit Trust
n/a
n/a
Nitrates Investments Pty Ltd
100
100
NPR Management Limited (acquired
27 March 2024)
<
100
-
NZ Finance Holdings Pty Limited
n
100
100
Officeworks Businessdirect Pty Ltd
100
100
Officeworks Holdings Pty Ltd
+
100
100
Officeworks Ltd
+
100
100
Officeworks NZ Limited
n
100
100
Officeworks Property Pty Ltd
100
100
One Data Pty Ltd
100
100
One Digital Pty Ltd
+
100
100
Pailou Pty Ltd
+
100
100
Patrick Operations Pty Ltd
100
100
Petersen Bros Pty Ltd
100
100
Pharma-Pack Pty Ltd
100
100
Premier Power Sales Pty Ltd
100
100
Priceline (NZ) Pty Limited
n
100
100
Priceline Proprietary Limited
+
100
100
Protector Alsafe Pty Ltd
100
100
PSM Healthcare Limited
n
100
100
PT Blackwoods Indonesia
m
100
100
R & N Palmer Pty Ltd
100
100
Relationship Services Pty Limited
100
100
Retail Australia Consortium Pty Ltd
100
100
Retail Investments Pty Ltd
100
100
RJ Beaumont & Co Pty Ltd
+
100
100
Scones Jam n Cream Pty Ltd
100
100
Second Priceline Unit Trust
n/a
n/a
Sellers (SA) Pty Ltd
100
100
Share Nominees Limited
100
100
Silk Laser & Skin Group Pty Ltd
@
100
-
Silk Laser & Skin Holdings Pty Ltd
@
100
-
Silk Laser Australia Limited
@
100
-
Silk Laser Clinic Adelaide Pty Ltd
@
100
-
Silk Laser Clinic Elizabeth Pty Ltd
@
100
-
Silk Laser Clinic Henley Beach Pty Ltd
@
100
-
Silk Laser Clinic Hyde Park Pty Ltd
@
100
-
Silk Laser Clinic Noarlunga Pty Ltd
@
100
-
Silk Laser Clinic Norwood Pty Ltd
@
100
-
Silk Laser Clinic Trust
@
n/a
-
Silk Laser Clinics Australia Pty Ltd
@
100
-
Silk Laser Clinics Pty Ltd
@
100
-
Financial statements
Wesfarmers 2024 Annual Report
170
Notes to the financial statements: Group information
For the year ended 30 June 2024
20. Subsidiaries (continued)
Entity
2024
2023
%
%
Entity
2024
2023
%
%
Silk Laser Corporate Pty Ltd
@
100
-
Silk Laser Franchise Holdings Pty Ltd
@
100
-
Silk Laser Franchising Pty Ltd
@
100
-
SiSU Wellness Pty Ltd
60
60
SLC Baldivis Pty Ltd
@
100
-
SLC Belconnen Pty Ltd
@
100
-
SLC Booragoon Pty Ltd
@
100
-
SLC Bundaberg Pty Ltd
@
100
-
SLC Burleigh Pty Ltd
@
75
-
SLC Carousel Pty Ltd
@
100
-
SLC Eastgardens Pty Ltd (formerly
Eden Laser Clinics (002) Pty Ltd)
@
100
-
SLC Ellenbrook Pty Ltd
@
75
-
SLC Figtree Pty Ltd
@
75
-
SLC Hobart Pty Ltd
@
75
-
SLC Innaloo Pty Ltd
@
100
-
SLC Ipswich Pty Ltd
@
75
-
SLC Joondalup Pty Ltd
@
75
-
SLC Karingal Pty Ltd
@
75
-
SLC Karrinyup Pty Ltd
@
100
-
SLC Leasing Pty Ltd
@
100
-
SLC Mackay Pty Ltd
@
90
-
SLC Mandurah Pty Ltd
@
100
-
SLC Midland Gate Pty Ltd
@
75
-
SLC Morayfield Pty Ltd
@
100
-
SLC Morley Pty Ltd
@
100
-
SLC Ocean Keys Pty Ltd
@
100
-
SLC Perth Pty Ltd
@
100
-
SLC Rockhampton Pty Ltd
@
75
-
SLC Rockingham Pty Ltd
@
100
-
SLC Rundle Place Pty Ltd
@
75
-
SLC Sandy Bay Pty Ltd
@
75
-
SLC Strathpine Pty Ltd
@
75
-
SLC Warringah Mall Pty Ltd
@
75
-
SLC Warwick Pty Ltd
@
100
-
SLC Whitford City Pty Ltd
@
100
-
SLC Woden Pty Ltd
@
100
-
Sotico Pty Ltd
100
100
Soul Pattinson (Manufacturing) Pty Ltd
100
100
Synapse Finance Pty Ltd
+
100
100
Target Australia Pty Ltd
+
100
100
Target Australia Sourcing (Shanghai)
Co Ltd
#
u
100
100
Target Australia Sourcing Limited
#
t
100
100
Target Holdings Pty Ltd
+
100
100
The Advanced Skills Academy Pty Ltd
@
100
-
The Builders Warehouse Group Pty
Limited
100
100
The Cosmetic Clinic Limited
n @
100
-
The Franked Income Fund
n/a
n/a
The Priceline Unit Trust
n/a
n/a
The Westralian Farmers Limited
+
100
100
The Workwear Group HK Limited
(deregistered 8 March 2024)
#
t
-
100
The Workwear Group Holding Pty Ltd
+
100
100
The Workwear Group Pty Ltd
+
100
100
Tilers Plus Pty Limited
100
100
Tilewerx Pty Limited
100
100
Tincorp Holdings Pty Ltd
100
100
TLL Silk Pty Ltd
@
100
-
Tyremaster (Wholesale) Pty Ltd
100
100
Ucone Pty Ltd
+
100
100
Valley Investments Pty Ltd
+
100
100
Venture in Altona Gate Pty Ltd
@
100
-
Venture in Broadmeadows Pty Ltd
@
100
-
Venture in Ferry Road Pty Ltd
@
100
-
Venture in Woodgrove Pty Ltd
@
100
-
Victorian Hardwarehouse Unit Trust
n/a
n/a
Viking Direct Pty Limited
100
100
W4K.World 4 Kids Pty Ltd
100
100
Wesfarmers Agribusiness Limited
+
100
100
Wesfarmers Bengalla Management
Pty Ltd
100
100
Wesfarmers Bengalla Pty Ltd
+
100
100
Wesfarmers Bunnings Limited
+
100
100
Wesfarmers Chemical US Holdings
Corp (deregistered, confirmed
15 May 2024)
z
-
100
Wesfarmers Chemicals, Energy &
Fertilisers Limited
+
100
100
Wesfarmers Coal Resources Pty Ltd
+
100
100
Wesfarmers Department Stores
Holdings Pty Ltd
+
100
100
Wesfarmers Emerging Ventures Pty
Ltd
100
100
Wesfarmers Employees Investment
Trust
n/a
n/a
Wesfarmers Employee Share Trust
n/a
n/a
Wesfarmers Energy (Gas Sales)
Limited
+
100
100
Wesfarmers Energy (Industrial Gas)
Pty Ltd
100
100
Wesfarmers Fertilizers Pty Ltd
+
100
100
Wesfarmers Gas Limited
+
100
100
Wesfarmers Holdings Pty Ltd
100
100
Wesfarmers Industrial & Safety
Holdings NZ Limited
n
100
100
Wesfarmers Industrial & Safety NZ
Limited
n
100
100
Wesfarmers 2024 Annual Report
171
Notes to the financial statements: Group information
For the year ended 30 June 2024
Financial
statements
About
this report
Segment
information
Group
performance
Group
balance sheet
Capital
Risk
Group
information
Other
20. Subsidiaries (continued)
Entity
2024
2023
%
%
Wesfarmers Industrial and Safety Pty
Ltd
+
100
100
Wesfarmers Insurance Investments
Pty Ltd
+
100
100
Wesfarmers International Holdings
Pty Ltd
100
100
Wesfarmers Investments Pty Ltd
100
100
Wesfarmers Kleenheat Gas Pty Ltd
+
100
100
Wesfarmers Lithium Pty Ltd
+
100
100
Wesfarmers LNG Pty Ltd
+
100
100
Wesfarmers Loyalty Management
Pty Ltd
+
100
100
Wesfarmers LPG Pty Ltd
+
100
100
Wesfarmers New Energy Holdings
Pty Ltd
+
100
100
Wesfarmers Oil & Gas Pty Ltd
100
100
Wesfarmers One Pass Pty Ltd
+
100
100
Wesfarmers Online Retail Holdings
Pty Ltd
+
100
100
Wesfarmers Provident Fund Pty Ltd
100
100
Wesfarmers Resources Pty Ltd
+
100
100
Wesfarmers Retail Holdings Pty Ltd
+
100
100
Wesfarmers Retail Pty Ltd
+
100
100
Wesfarmers Risk Management
(Singapore) Pte Ltd
#
z
100
100
Wesfarmers Securities Management
Pty Ltd
100
100
Wesfarmers Superannuation Pty Ltd
100
100
Wesfarmers TCS Investments Pty Ltd
100
100
Wesfarmers Transport Limited
+
100
100
Weskem Pty Ltd
100
100
Westralian Farmers Superphosphates
Limited
+
100
100
WEV Capital Investments Pty Ltd
100
100
WFCL Investments Pty Ltd
100
100
WFM Investments Pty Ltd
+
100
100
WIS International Pty Ltd
100
100
WIS Solutions Pty Ltd
100
100
WIS Supply Chain Management
(Shanghai) Co Ltd
#
u
100
100
WPEQ Pty Ltd
100
100
WPP Holdings Pty Ltd (deregistered
30 March 2024)
-
100
WWG Middle East Apparel Trading
LLC (deregistered 31 October 2023)
q
-
49
Yakka Pty Limited
100
100
Control obtained through the acquisition of InstantScripts.
Refer to note 21 for further details
^
Control obtained through the acquisition of SILK. Refer to
note 21 for further details
@
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
x
China
u
France
Ⱶ
Hong Kong
t
India
Indonesia
m
New Zealand
Singapore
z
United Arab Emirates
United States of America
z
All entities utilise the functional currency of the country
of incorporation with the exception of Wesfarmers Risk
Management (Singapore) Pte Ltd and WIS Supply Chain
Management (Shanghai) Co Ltd, which utilise the Australian
dollar and KAS International Trading (Shanghai) Company
Limited, PT Blackwoods Indonesia and Wesfarmers Oil & Gas
Pty Ltd, which utilise the US dollar.
Financial statements
Wesfarmers 2024 Annual Report
172
Notes to the financial statements: Group information
For the year ended 30 June 2024
Acquisition of InstantScripts Pty Ltd
On 3 July 2023, Wesfarmers, through its wholly-owned subsidiary
API, completed the acquisition of 100 per cent of the shares in
InstantScripts. Total consideration was $142 million, or $133 million
net of cash acquired. InstantScripts is included within the Wesfarmers
Health segment.
InstantScripts is complementary to the existing Wesfarmers Health
portfolio and provides opportunities to leverage its existing pharmacy
and medical aesthetics networks.
From the date of acquisition, the contribution to the Group's revenue
and profit is immaterial. Had the acquisition of InstantScripts occurred
at the beginning of the financial year and had the same fair values
detailed below applied, neither the profit nor revenue of the Group
would have been materially different from that reported.
Details of the fair values of identifiable assets and liabilities as at the
date of acquisition are:
Acquisition of SILK Laser Australia Limited
On 29 November 2023, Wesfarmers, through its wholly-owned
subsidiary API, completed the acquisition of 100 per cent of
the shares in SILK by way of a Scheme of Arrangement. Total
consideration was $175 million, or $160 million net of cash acquired.
SILK is included within the Wesfarmers Health segment.
SILK is complementary to Wesfarmers Health's existing Clear
Skincare Clinics and will provide scale and efficiency benefits through
an expanded presence in the growing market for medical aesthetics
products and services.
From the date of acquisition, the contribution to the Group's revenue
and profit is immaterial. Had the acquisition of SILK occurred at the
beginning of the financial year and had the same fair values detailed
below applied, neither the profit nor revenue of the Group would have
been materially different from that reported.
At 30 June 2024, the acquisition accounting balances are provisional
due to the ongoing work finalising valuations and tax matters that
may impact acquisition accounting entries. As at 30 June 2024, the
provisional goodwill remains unallocated to CGUs.
Details of the provisional fair values of identifiable assets and liabilities
as at the date of acquisition are:
21. Business combinations
Fair value
recognised on
acquisition
$m
Assets
Cash and cash equivalents
9
Intangible assets
35
Other
1
Liabilities
Trade and other payables
4
Provisions
3
Fair value of identifiable net assets
38
Goodwill arising on acquisition
104
Purchase consideration transferred
142
Cash outflow on acquisition
Cash paid
142
Net cash acquired
(9)
Net cash outflow on acquisition
133
Provisional
fair value
recognised on
acquisition
$m
Assets
Cash and cash equivalents
15
Trade and other receivables
13
Inventories
5
Investment in associates and joint ventures
2
Deferred tax assets
-
Property, plant and equipment
19
Intangible assets
72
Right-of-use assets
14
Other
10
Liabilities
Trade and other payables
18
Interest-bearing loans and borrowings
30
Lease liabilities
25
Provisions
13
Other
15
Fair value of identifiable net assets
49
Provisional goodwill arising on acquisition
126
Purchase consideration transferred
175
Cash outflow on acquisition
Cash paid
175
Net cash acquired
(15)
Net cash outflow on acquisition
160
Wesfarmers 2024 Annual Report
173
Notes to the financial statements: Group information
For the year ended 30 June 2024
Financial
statements
About
this report
Segment
information
Group
performance
Group
balance sheet
Capital
Risk
Group
information
Other
Parent
2024
2023
$m
$m
Assets
Current assets
11,025
10,877
Non-current assets
5,780
5,742
Total assets
16,805
16,619
Liabilities
Current liabilities
349
234
Non-current liabilities
4,762
4,362
Total liabilities
5,111
4,596
Net assets
11,694
12,023
Equity
Equity attributable to equity holders of the parent
Issued capital
13,467
13,467
Retained earnings1
1,783
2,131
Restructure tax reserve
150
150
Hedging reserve
(7)
(13)
Share-based payments reserve
65
52
Demerger reserve
(3,764)
(3,764)
Total equity
11,694
12,023
Profit attributable to equity holders of the
parent
1,854
2,389
Total comprehensive income for the year, net
of tax, attributable to equity holders of the
parent
1,860
2,375
Contingencies2
Trading guarantees
189
159
1 At 30 June 2024, retained earnings included a dividends reserve of
$292 million (30 June 2023: $292 million). The dividends reserve was
created by the parent entity for the purposes of segregating profits from
which dividends to shareholders can be paid.
2 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.
Guarantees
Wesfarmers Limited and certain Australian controlled entities are
parties to a Deed of Cross Guarantee (the Deed). Refer to note 23 for
further details.
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 are recognised in the parent entity’s profit or loss
when its right to receive the dividend is established.
The subsidiaries identified with a ‘+’ in note 20 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:
Deed
Consolidated income statement and
retained earnings
2024
2023
$m
$m
Profit before income tax expense
3,352
3,367
Income tax expense
(924)
(963)
Net profit for the year
2,428
2,404
Retained earnings at beginning of year
192
(32)
Adjustment for companies transferred into/out
of the Closed Group
-
(48)
Total available for appropriation
2,620
2,324
Dividends provided for or paid
(2,202)
(2,132)
Retained earnings at end of year
418
192
Deed
Consolidated statement of comprehensive
income
2024
2023
$m
$m
Profit for the year
2,428
2,404
Other comprehensive income
Items that may be reclassified to profit or loss:
Changes in the fair value of cash flow hedges,
net of tax
54
161
Items that will not be reclassified to profit or loss:
Changes in the fair value of financial assets
designated at FVOCI, net of tax
(2)
23
Other comprehensive income for the year,
net of tax
52
184
Total comprehensive income for the year,
net of tax
2,480
2,588
22. Parent disclosures
23. Deed of Cross Guarantee
Financial statements
Wesfarmers 2024 Annual Report
174
Notes to the financial statements: Group information
For the year ended 30 June 2024
The consolidated balance sheet of the entities that are members of
the Closed Group is as follows:
Deed
2024
2023
Consolidated balance sheet
$m
$m
Assets
Current assets
Cash and cash equivalents
494
388
Trade and other receivables
1,823
1,638
Related party receivables
502
162
Inventories
5,588
5,525
Income tax receivable
-
68
Derivatives
19
116
Other
209
204
Total current assets
8,635
8,101
Non-current assets
Investment in controlled entities
3,430
3,142
Investment in associates and joint ventures
304
318
Related party receivables
681
586
Deferred tax assets
711
685
Property, plant and equipment
5,293
5,033
Goodwill and intangible assets
4,584
4,575
Right-of-use assets
4,976
5,201
Derivatives
22
27
Other
37
52
Total non-current assets
20,038
19,619
Total assets
28,673
27,720
Liabilities
Current liabilities
Trade and other payables
4,814
4,309
Related party payables
91
79
Lease liabilities
1,051
1,026
Income tax payable
79
-
Provisions
1,063
1,037
Derivatives
36
10
Other
323
297
Total current liabilities
7,457
6,758
Non-current liabilities
Related party payables
1,601
1,605
Interest-bearing loans and borrowings
4,591
4,233
Lease liabilities
4,857
5,144
Provisions
371
363
Total non-current liabilities
11,420
11,345
Total liabilities
18,877
18,103
Net assets
9,796
9,617
Equity
Issued capital
13,574
13,574
Reserved shares
(102)
(102)
Retained earnings
418
192
Reserves
(4,094)
(4,047)
Total equity
9,796
9,617
Consolidated
2024
2023
$'000
$'000
Transactions with related parties
Associates
Lease rent paid
148,304
137,592
Receipts from associates
(19,180)
(18,217)
Payments to associates
774
560
Joint ventures
Receipts from loyalty program
(53,373)
(59,206)
Payments for loyalty program
75,771
60,628
Receipts from joint ventures
(9,491)
(3,003)
Payments to joint ventures
70,349
79,914
Outstanding balances with related
parties
Associates
Amounts receivable from associates
18,846
10,764
Amounts owing to associates
(212)
(1,355)
Joint ventures
Amounts receivable from joint ventures
14,692
8,114
Amounts owing to joint ventures
(200,547)
(239,923)
The Group entered into transactions with related parties during the
year, including the following:
• 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 BWP Trust and
BPI No 1 Pty Ltd, an associated entity and a joint venture
respectively, on normal commercial terms and conditions for staff
and other services provided.
• Amounts have been paid to and received from
Loyalty Pacific Pty Ltd for the operation of the Flybuys
loyalty program.
• Purchase of goods from Wespine Industries Pty Ltd, a
joint venture, on normal commercial terms and conditions.
• Management fees have been paid to Covalent Lithium Pty Ltd, a
joint venture, on normal commercial terms and conditions for the
management of the Mt Holland lithium project.
• Partly-owned subsidiaries of a joint venture of the Group,
Gresham Partners Group Limited, have provided advisory
services to Wesfarmers and were paid fees of $2,027 thousand
in FY2024 (2023: $5 thousand).
In addition to amounts disclosed above, the Group received
$12,000 thousand (2023: $1,505 thousand) from an associated entity,
BWP Trust, relating to the reimbursement of capital expenditure by the
Group on properties owned by BWP Trust.
23. Deed of Cross Guarantee (continued)
24. Related party transactions
Wesfarmers 2024 Annual Report
175
Notes to the financial statements: Other
For the year ended 30 June 2024
Financial
statements
About
this report
Segment
information
Group
performance
Group
balance sheet
Capital
Risk
Group
information
Other
27. Auditors’ remuneration
Consolidated
2024
2023
$m
$m
Capital commitments1
Within one year
290
364
Greater than one year but not more than
five years
2
15
292
379
Commitments for leases not yet
commenced (undiscounted)1, 2
Within one year
11
12
Greater than one year but not more than
five years
189
125
More than five years
332
271
532
408
Contingencies1
Trading guarantees
189
162
1 Capital commitments, commitments for leases not yet commenced
(undiscounted) and contingencies at balance date are not included in the
balance sheet.
2 Commitments mainly relate to lease agreements associated with new stores,
distribution centres and offices.
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.
26. Tax transparency disclosures
A reconciliation of the Group’s accounting profit to its tax expense and
material temporary and permanent 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.
Consolidated
2024
2023
$m
$m
Tax paid or payable reconciliation
Accounting profit
3,587
3,509
Income tax at the statutory rate of 30%
1,076
1,053
Non-deductible items
13
9
Temporary differences: deferred tax
(6)
(50)
Associates and other
(23)
(16)
Utilisation of previously unrecognised tax
losses
-
(2)
Current year tax paid or payable
1,060
994
Effective tax rate
Effective tax rate for Australian operations
28.8%
29.9%
Effective tax rate for global operations
28.7%
29.8%
Consolidated
2024
2023
$'000
$'000
Fees to Ernst & Young (Australia)
Fees for the audit and review of the financial
reports of the Group and any controlled
entities
5,197
4,602
Fees for other assurance and agreed-upon-
procedures1
740
730
Fees for other services
- tax compliance
448
539
- other
-
94
6,385
5,965
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
455
582
Fees for other services
- tax compliance
114
164
569
746
Total auditors' remuneration
6,954
6,711
1 The 2024 fees for other assurance and agreed-upon-procedures includes
$448 thousand (2023: $469 thousand) relating to the provision of limited
assurance services of the Group’s sustainability reporting.
Other assurance and agreed-upon-procedures services and other
services represent 18.7 per cent (2023: 22.8 per cent) of the total fees
paid or payable to Ernst & Young and related practices for the year
ended 30 June 2024.
Auditors’ remuneration includes amounts reimbursed to the auditors
for incidental costs incurred in completing their services.
28. Events after the reporting period
Dividends
A fully-franked final dividend of 107 cents per share resulting in
a dividend payment of $1,214 million was determined with a payment
date of 9 October 2024. The final dividend has not been provided for
in the 30 June 2024 full-year financial statements.
25. Commitments and contingencies
Financial statements
Wesfarmers 2024 Annual Report
176
Notes to the financial statements: Other
For the year ended 30 June 2024
29. Other accounting policies
(A) New and amended accounting standards and interpretations adopted from
1 July 2023
All new and amended Australian Accounting Standards and Interpretations mandatory to the Group as at 1 July 2023 have been adopted,
including as disclosed below. Other new and amended Australian Accounting Standards and Interpretations adopted in the current period were
not material to the Group.
Reference
Description
AASB 2023-2
Amendments to Australian
Accounting Standards –
International Tax Reform –
Pillar Two Model Rules
Pillar Two will be effective for the Group’s financial year commencing 1 July 2024. It is anticipated that Pillar Two
legislation will be progressively enacted in jurisdictions where the Group operates. The Group has applied the
mandatory temporary exception to recognising and disclosing information about the deferred tax assets and
liabilities related to Pillar Two income taxes. Based on the impact assessment performed to date, the Group
does not expect a material exposure to Pillar Two top-up tax liabilities.
AASB 2021-5
Amendments to Australian
Accounting Standards
– Deferred Tax related
to Assets and Liabilities
arising from a Single
Transaction
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. The adoption of this amendment has not had a
material impact on the Group’s income statement or balance sheet. The deferred tax balances relating to right-
of-use assets and lease liabilities have been disclosed on a gross basis in the current year, with the prior year
comparative restated accordingly. Refer to note 3 for further information.
(B) New and amended standards and interpretations issued but not yet effective
The Group has not early adopted any new and amended accounting standards and interpretations issued but not yet effective. The assessment
of the impact of the new and amended accounting standards and interpretations is ongoing.
Reference
Description
AASB 18 Presentation
and Disclosure in Financial
Statements
The application of this standard will be adopted by the Group on 1 July 2027, and replaces AASB 101
Presentation of Financial Statements. This new standard aims to improve comparability and transparency of
the financial performance of similar entities within the financial statements and introduces new requirements
on presentation within the statement of profit or loss, including specified totals and subtotals. It also requires
disclosure of management-defined performance measures and new requirements for aggregation and
disaggregation of financial information based on the identified ‘roles’ of the primary financial statements and
the notes. The Group’s assessment of the impact remains ongoing.
Amendments to the
Classification and
Measurement of Financial
Instruments (Amendments
to IFRS 9 and IFRS 7)
The application of this amendment will be adopted by the Group on 1 July 2026. The amendments clarify that
financial liabilities and financial assets are derecognised on the settlement date, with an accounting election
available for the derecognition of financial liabilities only.
As detailed in note 4, the Group includes cash in transit within the balance of cash and cash equivalents.
Following the adoption of these amendments, cash in transit will first be recognised as a receivable in the
Group’s financial statements and subsequently transferred to cash and cash equivalents on settlement. The
Group’s assessment of the impact remains ongoing.
AASB 2023-1 Amendments
to Australian Accounting
Standards – Supplier
Financing Arrangements
The application of this amendment will be adopted by the Group on 1 July 2024 and clarifies the
characteristics of supplier finance arrangements. The amendments require information about the impact
of supplier finance arrangements on liabilities and cash flows, including terms and conditions of those
arrangements as at the beginning and end of the reporting period and the type and effect of non-cash
changes in the carrying amount of those arrangements.
(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.
Wesfarmers 2024 Annual Report
177
Notes to the financial statements: Other
For the year ended 30 June 2024
Financial
statements
About
this report
Segment
information
Group
performance
Group
balance sheet
Capital
Risk
Group
information
Other
The Group provides benefits to employees (including the executive
director) 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 FY2024 to satisfy employee incentive
schemes was 1,945,804 (2023: 2,710,637) at an average price of
$52.70 (2023: $46.35 per share).
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.
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.
Additional information on award schemes
Key Executive Equity Performance Plan (KEEPP)
KEEPP was introduced in September 2016. Under the 2023 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.
2023 KEEPP Performance Shares
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) over a four-year performance period. For the divisional
managing directors, the performance conditions are Wesfarmers’
TSR relative to the TSR of the ASX 100 (50 per cent weighting)
and divisional financial performance (50 per cent weighting) 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:
Group MD, Group CFO
and Divisional MDs
Grant date
26 Oct 2023
Grant date share price ($)
50.37
Volatility (%)
24.52
Risk-free rate (%)
4.39
Fair value ($)
37.15
Equity-settled awards outstanding
Weighted average share price in FY2024 was $58.10 (2023: $47.83). The following table includes shares subject to trading restrictions.
KEEPP
WESAP
WLTIP
WESP
(shares)
(shares)
(shares)
(options)
Outstanding at the beginning of the year
1,710,519
5,562,313
104,371
292
Granted during the year
266,493
2,074,795
-
-
Exercised during the year
(456,548)
(1,772,835)
(60,569)
-
Lapsed during the year
(21,119)
(86,197)
-
-
Other adjustments
-
(22,137)
-
-
Outstanding at the end of the year
1,499,345
5,755,939
43,802
292
Exercisable at the end of the year
122,968
5,038,646
125,873
664,517
30. Share-based payments
Financial statements
Wesfarmers 2024 Annual Report
178
Notes to the financial statements: Other
For the year ended 30 June 2024
30. Share-based payments (continued)
Key Executive Equity Performance Plan (KEEPP)
(continued)
2023 KEEPP Deferred Shares
The 2023 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 Deferred Shares will be
forfeited. 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 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 FY2024 are provided in the remuneration report.
Wesfarmers Employee Share Acquisition Plan
(WESAP)
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.
WESAP – Executives
In November 2016, the WESAP was introduced to eligible executives.
Under the 2023 offer, eligible executives were invited to receive
Performance Shares and Deferred Shares in the company.
2023 WESAP Performance Shares
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
26 Oct 2023
Grant date share price ($)
50.37
Volatility (%)
24.52
Risk-free rate (%)
4.39
Fair value ($)
37.15
2023 WESAP Deferred Shares
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.
Annual incentive
In August 2023, 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 forfeit 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 Kmart-related 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.
The 2020 Kmart-related Performance-tested Shares vested and
became unrestricted in August 2023. The final outcomes were
reported in the 2023 remuneration report.
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.
31. Director and executive disclosures
Compensation of key management personnel
The remuneration disclosures are provided in sections one to nine
of the remuneration report on pages 98 to 127 of this annual report
designated as audited and forming part of the directors’ report.
Consolidated
2024
2023
$'000
$'000
Short-term benefits
11,087
11,061
Long-term benefits
121
120
Post-employment benefits
280
283
Share-based payments
12,415
15,299
23,903
26,763
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 2024 Annual Report
179
Consolidated entity disclosure statement
As at 30 June 2024
Consolidated entity
disclosure statement
Name of entity
% of share
capital
2024
Name of entity
% of share
capital
2024
Set out below is a list of entities that are consolidated in the financial statements at the end of the financial year.
Consolidated entities incorporated/formed in Australia and Australian tax residents
A.C.N. 003 921 873 Pty Limited
u
100
A.C.N. 004 191 646 Pty Ltd
u
100
A.C.N. 061 462 593 Pty Ltd
u
100
A.C.N. 112 719 918 Pty Ltd
u
100
A.C.N. 645 670 711 Pty Ltd
u
100
A.C.N. 645 674 102 Pty Ltd
u
100
Aesthetics Skincare Pty Ltd
u
100
ANKO Global Holdings Pty Ltd
u
100
ANKO PH Holdings Pty Ltd
u
100
API (Canberra) Pty Ltd
u
l
100
API Financial Services Australia Pty Limited
u
100
API Leasing Pty Ltd
u
100
API Owned CSC Pty Ltd
u
100
API Services Australia Pty Ltd
u
100
API Victoria Pty Ltd
u
100
ASC Coomera Pty Ltd
u
100
ASC Hold Co Pty Ltd
u
100
ASC IP Holdings Pty Ltd
u
100
ASC Marion Pty Ltd
u
100
ASC Master Franchise Pty Ltd
u
100
Australian Gold Reagents Pty Ltd
u
75
Australian International Insurance Limited
u
100
Australian Light Minerals Pty Ltd
u
100
Australian Pharmaceutical Industries
(Queensland) Pty Ltd
u
100
Australian Pharmaceutical Industries Pty Ltd
u
100
Australian Skin Clinics Marketing Fund Pty Ltd
u
100
Australian Underwriting Holdings Limited
u
100
Australian Underwriting Services Pty Ltd
u
100
Australian Vinyls Corporation Pty Ltd
u
100
AVC Holdings Pty Ltd
u
100
AVC Trading Pty Ltd
u
100
BBC Hardware Limited
u
100
BBC Hardware Properties (NSW) Pty Ltd
u
l
100
BBC Hardware Properties (Vic) Pty Ltd
u
l
100
Beaumont Australia Pty Limited
u
100
Beaumont Bathrooms Renovator (SA) Pty Limited
u
100
Beaumont Tiles (Vic) Pty Limited
u
100
Beaumont's Discount Tile Warehouse Pty Limited
u
100
Beauty Services (New South Wales) Pty Ltd
u
100
Beauty Services Holdings Pty Ltd
u
100
Beauty Services Pty Ltd
u
100
Blacksmith Jacks Pty Ltd
u
100
Blackwoods 4PL Pty Ltd
u
100
BPI Management Pty Ltd
u
100
BrandsExclusive (Australia) Pty Ltd
u
100
Bresnahan Exploration Pty Ltd
u
100
BUKI (Australia) Pty Ltd
u
100
Bullivants International Pty Ltd
u
100
Bullivants Pty Limited
u
100
Bunnings Group Limited
u
100
Bunnings Joondalup Pty Ltd
u
100
Bunnings Management Services Pty Ltd
u
100
Bunnings Properties Pty Ltd
u
100
BWP Management Limited
u
100
C S Holdings Pty Limited
u
100
Campbells Hardware & Timber Pty Limited
u
100
Canberra Pharmaceutical Supplies Trust
t
n/a
Catch Essentials Pty Ltd
u
100
Catch Group Holdings Limited
u
100
Catch.com.au Pty Ltd
u
100
Chemical Holdings Kwinana Pty Ltd
u
100
Clearskincare Adelaide Street Pty Ltd
u
100
Clearskincare Bendigo Pty Ltd
u
100
Clearskincare Bondi Beach Pty Ltd
u
100
Clearskincare Bondi Junction Pty Ltd
u
100
Clearskincare Brighton Pty Ltd
u
100
Clearskincare Canberra City Pty Ltd
u
100
Clearskincare Carindale Pty Ltd
u
100
Clearskincare Carousel Pty Ltd
u
100
Clearskincare Chatswood Pty Ltd
u
100
Clearskincare Chermside Pty Ltd
u
100
Clearskincare Chirnside Park Pty Ltd
u
100
Clearskincare City Square Pty Ltd
u
100
Clearskincare Claremont Pty Ltd
u
100
Clearskincare Clarence Street Pty Ltd
u
100
Clearskincare Clinics Australia Pty Ltd
u
100
Clearskincare Clinics Payroll Pty Ltd
u
100
Clearskincare Clinics Pty Ltd
u
100
Clearskincare Cockburn Gateway Pty Ltd
u
100
Clearskincare Collins Street Pty Ltd
u
100
Clearskincare Cremorne Pty Ltd
u
100
Clearskincare Cronulla Pty Ltd
u
100
Clearskincare Doncaster Pty Ltd
u
100
Clearskincare Fremantle Pty Ltd
u
100
Clearskincare Hurstville Pty Ltd
u
100
Clearskincare Leichhardt Pty Ltd
u
100
Clearskincare Macarthur Square Pty Ltd
u
100
Clearskincare Macquarie Centre Pty Ltd
u
100
Clearskincare Miranda Pty Ltd
u
100
Clearskincare Moonee Ponds Pty Ltd
u
100
Clearskincare Mt Lawley Pty Ltd
u
100
Clearskincare Northland Pty Ltd
u
100
Clearskincare Norwood Pty Ltd
u
100
Clearskincare Parramatta Pty Ltd
u
100
Clearskincare Quentin Ave Pty Ltd
u
100
Clearskincare QV Melbourne Pty Ltd
u
100
Clearskincare Robina Pty Ltd
u
100
Clearskincare Rockdale Pty Ltd
u
100
Clearskincare South Australia Pty Ltd
u
100
Clearskincare South Yarra Pty Ltd
u
100
Clearskincare Southland Pty Ltd
u
100
Clearskincare Southport Pty Ltd
u
100
Clearskincare Sunshine Plaza Pty Ltd
u
100
Clearskincare Toowong Pty Ltd
u
100
Clearskincare Ventures Pty Ltd
u
100
Clearskincare Warringah Mall Pty Ltd
u
100
Clearskincare West End Pty Ltd
u
100
Clinic Leasing Pty Ltd
u
100
CM3 Contractor Management Pty Ltd
u
100
Consolidated entity disclosure statement
Wesfarmers 2024 Annual Report
180
Consolidated entity disclosure statement
As at 30 June 2024
Name of entity
% of share
capital
2024
Name of entity
% of share
capital
2024
CMNZ Investments Pty Ltd
u
100
Coo-ee Investments Pty Limited
u
100
Coregas Pty Ltd
u
100
Crosby Tiles Pty Ltd
u
100
CSBP Ammonia Terminal Pty Ltd
u
100
CSBP Limited
u
100
CSC Ashfield Mall Pty Ltd
u
100
CSC Bayside Frankston Pty Ltd
u
100
CSC Camberwell Pty Ltd
u
100
CSC Forest Hill Pty Ltd
u
100
CSC Forrest Chase Pty Ltd
u
100
CSC Franchising Pty Ltd
u
100
CSC Holdings Australia Pty Ltd
u
100
CSC Joondalup Pty Ltd
u
100
CSC Manuka Pty Ltd
u
100
CSC Mordialloc Pty Ltd
u
100
CSC Mt Ommaney Pty Ltd
u
100
CSC North Sydney Pty Ltd
u
100
CSC Northbridge Pty Ltd
u
100
CSC Port Melbourne Pty Ltd
u
100
CSC Products Pty Ltd
u
100
CSC Riverton Pty Ltd
u
100
CSC Shared Services Pty Ltd
u
100
CSC West Lakes Pty Ltd
u
100
CSC Whitford Pty Ltd
u
100
CTE Pty Ltd
u
100
Cuming Smith and Company Limited
u
100
Dairy Properties Pty Ltd
u
100
Davyston Exploration Pty Ltd
u
100
Dowd Corporation Pty Ltd
u
100
Eastfarmers Pty Ltd
u
100
Eden Franchise Company Pty Ltd
u
100
Eden Holding Company Pty Ltd
u
100
Eden Laser Clinics (003) Pty Ltd
u
100
Eden Laser Clinics (004) Pty Ltd
u
55
Eden Laser Clinics (005) Pty Ltd
u
100
Eden Laser Clinics (006) Pty Ltd
u
100
Eden Laser Clinics (007) Pty Ltd
u
100
Eden Laser Clinics (008) Pty Ltd
u
100
Eden Laser Clinics (009) Pty Ltd
u
100
Eden Laser Clinics Pty Ltd
u
100
FIF Investments Pty Limited
u
100
Forward Scout Enterprises Pty Ltd
u
100
Fosseys (Australia) Pty Ltd
u
100
Geeks2U Holdings Pty Limited
u
100
Geeks2U International Pty Limited
u
100
Geeks2U IP Pty Limited
u
100
Geeks2U Pty Limited
u
100
GPML Pty Ltd
u
100
HouseWorks Co Pty Ltd
u
100
Howard Smith Limited
u
100
InstantClinics Pty Ltd
u
100
InstantScripts Pty Ltd
u
100
J Blackwood & Son Pty Ltd
u
100
James Patrick & Co Pty Ltd (in liquidation)
u
100
Kidman Gold Pty Ltd
u
100
Kleenheat Pty Ltd
u
100
Kmart Australia Limited
u
100
Kmart Group Asia Pty Ltd
u
100
Kmart Holdings Pty Ltd
u
100
Kwinana Nitrogen Company Proprietary Limited
u
100
Lawvale Pty Ltd
u
100
Life's Tiles Pty Ltd
u
100
Liftco Pty Limited
u
100
LMD2 Pty Ltd
u
100
Loggia Pty Ltd
u
100
M.L.E. Unit Trust
t
n/a
M3K Holdings Pty Ltd
u
100
M3K Services Pty Ltd
u
100
Making Life Easy - Mobility and Independent
Living Superstore Pty Ltd
u
l
100
Manacol Pty Limited
u
100
Meredith Distribution (NSW) Pty Ltd
u
100
Meredith Distribution Pty Ltd
u
100
MH Gold Pty Limited
u
100
Millars (WA) Pty Ltd
u
100
Modwood Technologies Pty Ltd
u
100
Montague Resources Australia Pty Ltd
u
100
Moonyoora Minerals Pty Ltd
u
100
Mumgo Pty Ltd
u
100
Neat N' Trim Uniforms Pty Ltd
u
100
New Price Retail Finance Pty Ltd
u
100
New Price Retail Pty Ltd
u
100
New Price Retail Services Pty Ltd
u
100
New South Wales Hardwarehouse Unit Trust
t
n/a
Nitrates Investments Pty Ltd
u
100
NPR Management Limited
u
100
Officeworks Businessdirect Pty Ltd
u
100
Officeworks Holdings Pty Ltd
u
100
Officeworks Ltd
u
100
Officeworks Property Pty Ltd
u
100
One Data Pty Ltd
u
100
One Digital Pty Ltd
u
100
Pailou Pty Ltd
u
100
Patrick Operations Pty Ltd
u
100
Petersen Bros Pty Ltd
u
100
Pharma-Pack Pty Ltd
u
100
Premier Power Sales Pty Ltd
u
100
Priceline Proprietary Limited
u
l
100
Protector Alsafe Pty Ltd
u
100
R & N Palmer Pty Ltd
u
100
Relationship Services Pty Limited
u
100
Retail Australia Consortium Pty Ltd
u
100
Retail Investments Pty Ltd
u
100
RJ Beaumont & Co Pty Ltd
u
100
Scones Jam n Cream Pty Ltd
u
100
Second Priceline Unit Trust
t
n/a
Sellers (SA) Pty Ltd
u
100
Share Nominees Limited
u
l
100
Silk Laser & Skin Group Pty Ltd
u
100
Silk Laser & Skin Holdings Pty Ltd
u
100
Silk Laser Australia Limited
u
100
Silk Laser Clinic Adelaide Pty Ltd
u
100
Silk Laser Clinic Elizabeth Pty Ltd
u
100
Silk Laser Clinic Henley Beach Pty Ltd
u
100
Consolidated entities incorporated/formed in Australia and Australian tax residents
(continued)
Wesfarmers 2024 Annual Report
181
Consolidated entity disclosure statement
As at 30 June 2024
Consolidated entity
disclosure statement
Name of entity
% of share
capital
2024
Name of entity
% of share
capital
2024
Silk Laser Clinic Hyde Park Pty Ltd
u
100
Silk Laser Clinic Noarlunga Pty Ltd
u
100
Silk Laser Clinic Norwood Pty Ltd
u
100
Silk Laser Clinic Trust
t
n/a
Silk Laser Clinics Australia Pty Ltd
u
100
Silk Laser Clinics Pty Ltd
u
100
Silk Laser Corporate Pty Ltd
u
l
100
Silk Laser Franchise Holdings Pty Ltd
u
100
Silk Laser Franchising Pty Ltd
u
100
SiSU Wellness Pty Ltd
u
60
SLC Baldivis Pty Ltd
u
100
SLC Belconnen Pty Ltd
u
100
SLC Booragoon Pty Ltd
u
100
SLC Bundaberg Pty Ltd
u
100
SLC Burleigh Pty Ltd
u
75
SLC Carousel Pty Ltd
u
100
SLC Eastgardens Pty Ltd
u
100
SLC Ellenbrook Pty Ltd
u
75
SLC Figtree Pty Ltd
u
75
SLC Hobart Pty Ltd
u
75
SLC Innaloo Pty Ltd
u
100
SLC Ipswich Pty Ltd
u
75
SLC Joondalup Pty Ltd
u
75
SLC Karingal Pty Ltd
u
75
SLC Karrinyup Pty Ltd
u
100
SLC Leasing Pty Ltd
u
100
SLC Mackay Pty Ltd
u
90
SLC Mandurah Pty Ltd
u
100
SLC Midland Gate Pty Ltd
u
75
SLC Morayfield Pty Ltd
u
100
SLC Morley Pty Ltd
u
100
SLC Ocean Keys Pty Ltd
u
100
SLC Perth Pty Ltd
u
100
SLC Rockhampton Pty Ltd
u
75
SLC Rockingham Pty Ltd
u
100
SLC Rundle Place Pty Ltd
u
75
SLC Sandy Bay Pty Ltd
u
75
SLC Strathpine Pty Ltd
u
75
SLC Warringah Mall Pty Ltd
u
75
SLC Warwick Pty Ltd
u
100
SLC Whitford City Pty Ltd
u
100
SLC Woden Pty Ltd
u
100
Sotico Pty Ltd
u
100
Soul Pattinson (Manufacturing) Pty Ltd
u
100
Synapse Finance Pty Ltd
u
100
Target Australia Pty Ltd
u
100
Target Holdings Pty Ltd
u
100
The Advanced Skills Academy Pty Ltd
u
100
The Builders Warehouse Group Pty Limited
u
100
The Franked Income Fund
t
n/a
The Priceline Unit Trust
t
n/a
The Westralian Farmers Limited
u
100
The Workwear Group Holding Pty Ltd
u
100
The Workwear Group Pty Ltd
u
100
Tilers Plus Pty Limited
u
100
Tilewerx Pty Limited
u
100
Tincorp Holdings Pty Ltd
u
100
TLL Silk Pty Ltd
u
100
Tyremaster (Wholesale) Pty Ltd
u
100
Ucone Pty Ltd
u
100
Valley Investments Pty Ltd
u
100
Venture in Altona Gate Pty Ltd
u
100
Venture in Broadmeadows Pty Ltd
u
100
Venture in Ferry Road Pty Ltd
u
100
Venture in Woodgrove Pty Ltd
u
100
Victorian Hardwarehouse Unit Trust
t
n/a
Viking Direct Pty Limited
u
100
W4K.World 4 Kids Pty Ltd
u
100
Wesfarmers Agribusiness Limited
u
100
Wesfarmers Bengalla Management Pty Ltd
u
100
Wesfarmers Bengalla Pty Ltd
u
100
Wesfarmers Bunnings Limited
u
100
Wesfarmers Chemicals, Energy & Fertilisers
Limited
u
100
Wesfarmers Coal Resources Pty Ltd
u
100
Wesfarmers Department Stores Holdings Pty Ltd
u
100
Wesfarmers Emerging Ventures Pty Ltd
u
100
Wesfarmers Employees Investment Trust
t
n/a
Wesfarmers Employee Share Trust
t
n/a
Wesfarmers Energy (Gas Sales) Limited
u
100
Wesfarmers Energy (Industrial Gas) Pty Ltd
u
100
Wesfarmers Fertilizers Pty Ltd
u
100
Wesfarmers Gas Limited
u
100
Wesfarmers Holdings Pty Ltd
u
100
Wesfarmers Industrial and Safety Pty Ltd
u
100
Wesfarmers Insurance Investments Pty Ltd
u
100
Wesfarmers International Holdings Pty Ltd
u
100
Wesfarmers Investments Pty Ltd
u
100
Wesfarmers Kleenheat Gas Pty Ltd
u
100
Wesfarmers Limited
u
n/a
Wesfarmers Lithium Pty Ltd
u
100
Wesfarmers LNG Pty Ltd
u
100
Wesfarmers Loyalty Management Pty Ltd
u
100
Wesfarmers LPG Pty Ltd
u
100
Wesfarmers New Energy Holdings Pty Ltd
u
100
Wesfarmers Oil & Gas Pty Ltd
u
100
Wesfarmers One Pass Pty Ltd
u
100
Wesfarmers Online Retail Holdings Pty Ltd
u
100
Wesfarmers Provident Fund Pty Ltd
u
100
Wesfarmers Resources Pty Ltd
u
100
Wesfarmers Retail Holdings Pty Ltd
u
100
Wesfarmers Retail Pty Ltd
u
100
Wesfarmers Securities Management Pty Ltd
u
l
100
Wesfarmers Superannuation Pty Ltd
u
100
Wesfarmers TCS Investments Pty Ltd
u
100
Wesfarmers Transport Limited
u
100
Weskem Pty Ltd
u
100
Westralian Farmers Superphosphates Limited
u
100
WEV Capital Investments Pty Ltd
u
100
WFCL Investments Pty Ltd
u
100
WFM Investments Pty Ltd
u
100
WIS International Pty Ltd
u
100
WIS Solutions Pty Ltd
u
100
WPEQ Pty Ltd
u
100
Yakka Pty Limited
u
100
Consolidated entities incorporated/formed in Australia and Australian tax residents
(continued)
Consolidated entity disclosure statement
Wesfarmers 2024 Annual Report
182
Consolidated entity disclosure statement
As at 30 June 2024
Consolidated entities incorporated/formed in countries other than Australia and
foreign tax residents
Name of entity
% of share
capital
Country of
incorporation
Jurisdiction for
foreign tax resident
2024
ANKO Global (France) SAS
u
100
France
France
API Healthcare Holdings (NZ) Limited
u
100
New Zealand
New Zealand
Beaumont Tiles NZ Pty Limited
u
100
New Zealand
New Zealand
Bunnings (NZ) Limited
u
100
New Zealand
New Zealand
Bunnings Limited
u
100
New Zealand
New Zealand
Bunnings Technologies India Private Limited
u
100
India
India
CGNZ Finance Limited
u
100
New Zealand
New Zealand
Clearskincare Newmarket Limited
u
100
New Zealand
New Zealand
Clearskincare Takapuna Limited
u
100
New Zealand
New Zealand
Coregas NZ Limited
u
100
New Zealand
New Zealand
CSC Auckland Limited
u
100
New Zealand
New Zealand
CSC Holdings New Zealand Limited
u
100
New Zealand
New Zealand
CSC Ponsonby Limited
u
100
New Zealand
New Zealand
Garrett Investments Limited
u
100
New Zealand
New Zealand
Geeks2U NZ Limited
u
100
New Zealand
New Zealand
KAS Direct Sourcing Private Limited
u
100
India
India
KAS Global Trading Pty Limited
u
100
Hong Kong
Hong Kong
KAS International Sourcing Bangladesh Pvt Ltd
u
100
Bangladesh
Bangladesh
KAS International Trading (Shanghai) Company Limited
u
100
China
China
KAS Pty Limited
u
100
Hong Kong
Hong Kong
KAS Services India Private Limited
u
100
India
India
KGA Sourcing (Singapore) Pte. Ltd
u
100
Singapore
Singapore
Kmart NZ Holdings Limited
u
100
New Zealand
New Zealand
NZ Finance Holdings Pty Limited
u
100
New Zealand
New Zealand
Officeworks NZ Limited
u
100
New Zealand
New Zealand
Priceline (NZ) Pty Limited
u
100
New Zealand
New Zealand
PSM Healthcare Limited
u
100
New Zealand
New Zealand
PT Blackwoods Indonesia
u
100
Indonesia
Indonesia
Target Australia Sourcing (Shanghai) Co Ltd
u
100
China
China
Target Australia Sourcing Limited
u
100
Hong Kong
Hong Kong
The Cosmetic Clinic Limited
u
100
New Zealand
New Zealand
Wesfarmers Industrial & Safety Holdings NZ Limited
u
100
New Zealand
New Zealand
Wesfarmers Industrial & Safety NZ Limited
u
100
New Zealand
New Zealand
Wesfarmers Risk Management (Singapore) Pte Ltd
u
100
Singapore
Singapore
WIS Supply Chain Management (Shanghai) Co Ltd
u
100
China
China
Body corporate
u
Trust
t
Trustee of a trust in the consolidated entity
Wesfarmers 2024 Annual Report
183
Directors' declaration
Wesfarmers Limited and its controlled entities
Signed reports
In accordance with a resolution of the directors of Wesfarmers Limited, we state that:
1.
In the opinion of the directors:
1.1
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 2024 are in accordance with the Corporations Act 2001,
including:
(a)
giving a true and fair view of the consolidated entity’s financial position as at 30 June 2024 and of its
performance for the year ended on that date; and
(b)
complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the
Corporations Regulations 2001; and
1.2
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 2024 Annual Report; and
1.3
there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due
and payable; and
1.4
the consolidated entity disclosure statement as disclosed on pages 179 to 182 of the 2024 Annual Report and required
by section 295(3A) of the Corporations Act 2001 is true and correct.
2.
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 2024.
3.
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 20 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 23.
On behalf of the Board:
M A Chaney AO
R G Scott
Chairman
Managing Director
Perth
28 August 2024
Signed reports
Wesfarmers 2024 Annual Report
184
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 2024, the consolidated income statement, consolidated statement of comprehensive income,
consolidated statement of changes in equity and consolidated cash flow statement for the year then ended, notes to the financial statements,
including material accounting policy information, the consolidated entity disclosure statement 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 2024 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.
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.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
Ernst & Young
11 Mounts Bay Road
Perth WA 6000 Australia
GPO Box M939 Perth WA 6843
Tel: +61 8 9429 2222
Fax: +61 8 9429 2436
ey.com/au
Wesfarmers 2024 Annual Report
185
Independent auditor's report
To the Members of Wesfarmers Limited
Signed reports
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
1.
Inventory valuation and existence
2.
Information Technology (IT) systems and controls over financial reporting
Why significant
At 30 June 2024, the Group held inventory balances of $6,102 million,
as disclosed in Note 6 Inventories.
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.
How our audit addressed the key audit matter
Our audit procedures included the following:
• Assessing the inventory management, procurement and
commercial income processes, including an evaluation of the
effectiveness of relevant controls
• Testing the accuracy of the weighted average costing systems
and performing overhead allocation testing on a sample of
inventory items
• Attending stocktakes at a sample of locations and assessing the
stocktake processes for compliance with internal policies
• Testing the subsequent reconciliation of the stock count results
into the inventory records and general ledger
• Testing 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
• Evaluating management’s assessment of stock obsolescence
provisions through attendance at stocktakes, enquiries and
analytical procedures
• Performing inventory cut-off testing on a sample of transactions
either side of financial year-end
• Reviewing key stock statistics, including stock aging and
stock turnover
• Performing an analysis of shrinkage results and provision
calculations
• We also assessed the adequacy and appropriateness of the
disclosures in the Notes to the financial report.
Why significant
A significant part of the Group’s financial reporting process is primarily
reliant on a range of diverse IT systems across the Group’s divisions,
which have automated processes and controls relating to the capture,
valuation and recording of a high volume of transactions.
A fundamental component of these IT systems and controls is
ensuring that risks relating to inappropriate user access management,
unauthorised program changes and IT operating protocols are
addressed.
This was identified as a key audit matter as our audit approach is
dependent on the effective operation of the IT control environment.
How our audit addressed the key audit matter
Our audit procedures included the following:
• Focusing on those IT systems and controls that are significant to
the financial reporting process
• Involving our IT specialists, as audit procedures over IT systems
and controls require specific expertise
• Assessing the design and implementation effectiveness of IT
controls. Where IT controls were designed and implemented
effectively, and were relevant to our audit strategy, we tested the
operating effectiveness of those controls, including those related
to:
• General security settings and authentication
• User access management and revalidation
• Change and release management
• Where we identified design and/or operating deficiencies in the
IT control environment, we assessed the integrity and reliability
of the systems and data related to financial reporting through the
following audit procedures:
• Assessed compensating or mitigating controls that were not
reliant on the IT control environment,
• Performed direct testing of IT application controls and/or IT
dependent manual controls; or
• Varied the nature, timing and extent of substantive
procedures performed.
Signed reports
Wesfarmers 2024 Annual Report
186
Independent auditor's report
To the Members of Wesfarmers Limited
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
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
2024 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 (other than the consolidated entity disclosure statement) that gives a true and fair view in accordance with
Australian Accounting Standards and the Corporations Act 2001; and
• The consolidated entity disclosure statement that is true and correct in accordance with the Corporations Act 2001; and
for such internal control as the directors determine is necessary to enable the preparation of:
• The financial report (other than the consolidated entity disclosure statement) that gives a true and fair view and is free from material
misstatement, whether due to fraud or error; and
• The consolidated entity disclosure statement that is true and correct and is free of 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
• 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.
Wesfarmers 2024 Annual Report
187
Independent auditor's report
To the Members of Wesfarmers Limited
Signed reports
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
Report on the audit of the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 101 to 127 of the directors’ report for the year ended 30 June 2024.
In our opinion, the Remuneration Report of Wesfarmers Limited for the year ended 30 June 2024, 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
M P Cunningham
Partner
Partner
Perth
Perth
28 August 2024
28 August 2024
Shareholder and ASX information
Wesfarmers 2024 Annual Report
188
Five-year financial performance and key metrics
All figures in $m unless shown otherwise1
2024
2023
2022
20212
20203
Summarised income statement
Revenue from contracts with customers
44,047
43,417
36,679
33,797
30,753
Other revenue
142
133
159
144
93
Total revenue
44,189
43,550
36,838
33,941
30,846
Operating profit before depreciation and amortisation,
finance costs and income tax
5,789
5,564
5,208
5,226
4,272
Depreciation and amortisation
(1,800)
(1,701)
(1,575)
(1,509)
(1,528)
Interest on lease liabilities
(236)
(219)
(217)
(226)
(237)
EBIT (after interest on lease liabilities)
3,753
3,644
3,416
3,491
2,507
Other finance costs
(166)
(135)
(96)
(118)
(133)
Income tax expense
(1,030)
(1,044)
(968)
(993)
(677)
Profit after tax from discontinued operations
-
-
-
-
75
Operating profit after income tax attributable to members of
Wesfarmers Limited
2,557
2,465
2,352
2,380
1,697
Capital and dividends
Ordinary shares on issue (number) 000's as at 30 June
1,134,781
1,134,514
1,134,145
1,133,840
1,133,840
Paid up ordinary capital as at 30 June
13,574
13,574
13,574
15,826
15,818
Fully-franked dividend per ordinary share (determined) (cents)
198
191
180
178
152
Fully-franked special dividend per ordinary share (determined)
(cents)4
-
-
-
-
18
Capital return per ordinary share (cents)5
-
-
-
200
-
Financial performance
Earnings per share (weighted average) (cents)
225.7
217.8
207.8
210.4
150.0
Earnings per share growth (%)
3.6
4.8
(1.2)
40.3
(69.2)
Return on average ordinary shareholders' equity (R12)
(excluding significant items) (%)
31.3
31.4
29.4
26.1
22.1
Financial position as at 30 June
Total assets
27,309
26,546
27,286
26,214
25,425
Total liabilities
18,724
18,265
19,305
16,499
16,081
Net assets
8,585
8,281
7,981
9,715
9,344
Net tangible asset backing per ordinary share ($)
3.12
3.17
2.91
5.14
4.89
Net debt to equity (%)6
49.8
48.4
56.3
2.3
(0.9)
Total liabilities/total assets (%)
68.6
68.8
70.8
62.9
63.2
Market capitalisation as at 30 June
73,965
55,977
47,532
67,010
50,830
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 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.
5 A capital return to shareholders of 200 cents per share was paid on 2 December 2021.
6 Net debt includes total interest-bearing loans and borrowings less cash at bank and on deposit and held in joint operation. Excludes cash on hand, cash in transit
and lease liabilities.
Group performance and key metrics
Wesfarmers 2024 Annual Report
189
Five-year financial performance and key metrics
Shareholder and
ASX information
Divisional performance and key metrics
All figures in $m unless shown otherwise
2024
2023
2022
2021
2020
Bunnings Group
Revenue
18,968
18,539
17,754
16,871
14,999
Earnings before tax1
2,251
2,230
2,204
2,185
1,826
Return on capital employed (R12) (%)1
69.2
65.4
77.2
82.4
58.0
Capital expenditure (cash basis)
268
405
349
445
511
Safety (R12, TRIFR)
17.0
16.5
11.3
11.3
10.3
Scope 1 and Scope 2 (market-based) emissions (ktCO2e)
49.4
59.9
104.9
110.3
n.r.
Scope 1 and Scope 2 (location-based) emissions (ktCO2e)
178.4
187.5
220.5
234.5
262.6
Aboriginal and Torres Strait Islander team members
1,531
1,246
1,288
1,026
853
Operational waste diverted from landfill (%)
60.6
57.1
54.9
52.5
53.1
Kmart Group2
Revenue
11,107
10,635
9,129
9,982
9,217
Earnings before tax3
958
769
505
693
410
Return on capital employed (R12) (%)3
65.7
47.0
32.2
52.1
20.4
Capital expenditure (cash basis)
136
127
105
185
142
Safety (R12, TRIFR)
6.5
7.4
8.5
9.2
12.8
Scope 1 and Scope 2 (market-based) emissions (ktCO2e)
184.6
218.1
250.9
262.5
n.r.
Scope 1 and Scope 2 (location-based) emissions (ktCO2e)
230.3
239.1
277.3
292.6
303.7
Aboriginal and Torres Strait Islander team members
2,200
1,986
1,847
1,512
708
Operational waste diverted from landfill (%)
82.1
82.0
80.6
78.8
80.5
WesCEF
Revenue
2,747
3,306
3,041
2,146
2,085
Earnings before tax4
440
669
540
384
394
Return on capital employed (R12) (%)4
13.4
21.6
21.6
17.7
20.3
Return on capital employed (R12) (%) (excluding ALM)4
31.4
39.7
36.3
28.6
30.5
Capital expenditure (cash basis)5
447
518
455
137
110
Safety (R12, TRIFR)
2.7
3.8
4.2
3.0
3.3
Scope 1 and Scope 2 (market-based) emissions (ktCO2e)6
833.5
849.5
795.4
873.9
n.r.
Scope 1 and Scope 2 (location-based) emissions (ktCO2e)6, 7
840.4
846.4
804.3
880.5
983.3
Aboriginal and Torres Strait Islander team members
53
50
48
43
33
Operational waste diverted from landfill (%)
90.1
87.4
85.9
71.4
89.7
1 Includes net property contribution for 2024 of $2 million; 2023 of $38 million; 2022 of $52 million; 2021 of ($10) million and 2020 of $16 million.
2 2021 includes Catch and 2020 includes Catch from 12 August 2019.
3 Earnings excludes pre-tax restructuring costs and provisions in 2021 of $59 million and 2020 of $110 million and pre-tax non-cash impairments relating to Target in
2020 of $525 million.
4 2020 includes $18 million of insurance proceeds relating to the five-month ammonia plant production disruption that commenced in February 2018.
5 Includes WesCEF’s share of capital expenditure for the development of the Covalent lithium project of $250 million in 2024; $394 million in 2023; $304 million
in 2022; and $30 million in 2021. 2024, 2023, and 2022 also include capitalised interest of $26 million; $42 million and $34 million respectively. Includes capital
expenditure made prior to the final investment decision of $22 million in 2021 and $24 million in 2020.
6 2022 Scope 1 and Scope 2 emissions includes the impact of the scheduled ammonia plant shutdown.
7 2020 Scope 1 and Scope 2 (location-based) emissions baseline is 955.5 ktCO2e, and differs from the reported value of 983.3 ktCO2e due to adjustments for the
current global warming potentials of relevant greenhouse gases. The 2020 baseline was established using the Scope 2 location-based accounting method and has
not been restated using the Scope 2 market-based method as they were not materially different for the baseline year.
Shareholder and ASX information
Wesfarmers 2024 Annual Report
190
Five-year financial performance and key metrics
All figures in $m unless shown otherwise
2024
2023
2022
2021
2020
Officeworks
Revenue
3,434
3,357
3,169
3,029
2,787
Earnings before tax
208
200
181
212
197
Return on capital employed (R12) (%)
18.7
18.3
17.8
22.3
20.2
Capital expenditure (cash basis)
64
71
68
65
40
Safety (R12, TRIFR)
5.1
5.4
5.8
6.1
7.9
Scope 1 and Scope 2 (market-based) emissions (ktCO2e)
25.0
27.1
30.8
34.4
n.r.
Scope 1 and Scope 2 (location-based) emissions (ktCO2e)
30.2
31.5
37.2
40.1
43.2
Aboriginal and Torres Strait Islander team members
271
302
323
328
190
Operational waste diverted from landfill (%)
87.3
87.8
80.8
91.1
85.6
Industrial and Safety1
Revenue
2,022
1,992
1,925
1,855
1,745
Earnings before tax2
109
100
92
70
39
Return on capital employed (R12) (%)2
8.3
8.0
7.9
6.2
2.7
Capital expenditure (cash basis)
79
73
64
62
59
Safety (R12, TRIFR)
1.8
3.3
3.5
4.3
4.8
Scope 1 and Scope 2 (market-based) emissions (ktCO2e)
26.7
27.2
26.4
27.4
n.r.
Scope 1 and Scope 2 (location-based) emissions (ktCO2e)
26.8
26.9
26.4
27.4
27.1
Aboriginal and Torres Strait Islander team members
102
97
92
83
72
Operational waste diverted from landfill (%)3
38.6
40.4
41.6
38.5
n.r.
Health4
Revenue
5,624
5,312
1,240
n.r.
n.r.
Earnings before tax
50
45
(25)
n.r.
n.r.
Return on capital employed (R12) (%)
3.2
4.2
n.r.
n.r.
n.r.
Capital expenditure (cash basis)
38
41
3
n.r.
n.r.
Safety (R12, TRIFR)
4.6
6.6
n.r.
n.r.
n.r.
Scope 1 and Scope 2 (market-based) emissions (ktCO2e)5
10.9
11.6
13.8
n.r.
n.r.
Scope 1 and Scope 2 (location-based) emissions (ktCO2e)5
10.9
12.1
15.0
n.r.
n.r.
Aboriginal and Torres Strait Islander team members
11
3
n.r.
n.r.
n.r.
Operational waste diverted from landfill (%)6
80.4
73.0
n.r.
n.r.
n.r.
Catch7
Reported separately
Included in Kmart Group
Gross transaction value
524
733
989
973
632
Revenue
227
354
510
528
364
Earnings before tax8
(96)
(163)
(88)
(46)
1
Capital expenditure (cash basis)
5
10
45
n.r.
n.r.
Safety (R12, TRIFR)
10.0
4.7
2.1
n.r.
n.r.
Scope 1 and Scope 2 (market-based) emissions (ktCO2e)
1.9
2.8
3.0
n.r.
n.r.
Scope 1 and Scope 2 (location-based) emissions (ktCO2e)
2.1
3.4
3.8
n.r.
n.r.
Aboriginal and Torres Strait Islander team members
2
2
-
n.r.
n.r.
Operational waste diverted from landfill (%)
57.2
66.2
72.7
n.r.
n.r.
Divisional performance and key metrics (continued)
1 Includes results from Greencap prior to its divestment on 1 August 2022.
2 2020 earnings excludes a $310 million pre-tax non-cash impairment and includes $15 million of payroll remediation costs.
3 Due to improved methodology, 2020 is no longer comparable and therefore not reported in this table.
4 2022 includes API's results from 31 March 2022 to 30 June 2022.
5 2022 full-year emissions estimated for comparison purposes.
6 2024 includes operational waste data for distribution centres and estimated operational waste data for retail stores and clinics. 2023 operational waste data is for
distribution centres only.
7 Catch is included in Kmart Group for 2021 and 2020 from 12 August 2019.
8 2024 includes a non-cash impairment to Catch's brand value of $18 million and restructuring costs of $5 million. 2023 includes restructuring costs of $40 million.
Wesfarmers 2024 Annual Report
191
Shareholder information
Shareholder and
ASX 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 6.01 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
Number of
shareholders
% of issued
capital
1 – 1,000
390,178
10.76
1,001 – 5,000
86,547
15.97
5,001 – 10,000
9,738
5.96
10,001 – 100,000
4,929
8.71
100,001 and over
129
58.60
There were 7,788 shareholders that held less than a marketable parcel of Wesfarmers ordinary shares.
There were 0.93 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 28 August 2024 were:
Name
Number of
shares
% of issued
capital
HSBC Custody Nominees (Australia) Limited
276,485,264
24.36
J P Morgan Nominees Australia Pty Limited
174,715,921
15.40
Citicorp Nominees Pty Limited
82,773,126
7.29
BNP Paribas Nominees Pty Ltd (Agency Lending A/C)
20,034,892
1.77
National Nominees Limited
12,677,276
1.12
BNP Paribas Noms Pty Ltd
12,231,045
1.08
HSBC Custody Nominees (Australia) Limited (Nt-Comnwlth Super Corp A/C)
8,211,959
0.72
Citicorp Nominees Pty Limited (Colonial First State Inv A/C)
6,753,810
0.60
Australian Foundation Investment Company Limited
6,578,000
0.58
BNP Paribas Nominees Pty Ltd (HUB24 Custodial Serv Ltd)
5,337,430
0.47
Netwealth Investments Limited (Wrap Services A/C)
4,924,780
0.43
Argo Investments Limited
4,409,027
0.39
HSBC Custody Nominees (Australia) Limited
2,919,200
0.26
IOOF Investment Services Limited (IPS Superfund A/C)
2,700,740
0.24
Citicorp Nominees Pty Limited (Citibank NY ADR DEP A/C)
2,603,262
0.23
IOOF Investment Services Limited (IOOF IDPS A/C)
2,171,179
0.19
Mutual Trust Pty Ltd
2,051,080
0.18
BNP Paribas Nominees Pty Ltd (Clearstream)
1,998,397
0.18
Washington H Soul Pattinson and Company Limited
1,889,278
0.17
Mr Peter Alexander Brown
1,556,000
0.14
The percentage holding of the 20 largest shareholders of Wesfarmers ordinary shares was 55.78.
Wesfarmers 2024 Annual Report
192
Shareholder and ASX information
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 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 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 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 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
wesdirect.com.au
Information on Wesfarmers
Wesfarmers website
Up-to-date information on the company can be obtained from the
company’s website 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 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 2024 Annual Report
193
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 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
The Right Honourable Sir Bill English KNZM
Kate Munnings (from 1 August 2024)
Mike Roche
Anil Sabharwal
Tom von Oertzen (from 1 October 2024)
Vanessa Wallace
Sharon Warburton
Alison Watkins AM
Jennifer Westacott AO
Chief Financial Officer
Anthony Gianotti
Company Secretary
Vicki Robinson (to 30 October 2023)
Sheldon Renkema (from 30 October 2023)
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 (+61 3) 9473 2500
Website investorcentre.com/wes
Financial calendar+
Record date for final dividend
4 September 2024
Final dividend paid
9 October 2024
Annual general meeting
31 October 2024
Half-year end
31 December 2024
Half-year profit announcement
February 2025
Record date for interim dividend
February 2025
Interim dividend payable
March 2025
Year-end
30 June 2025
+ Timing of events is subject to change.
Annual General Meeting
The 43rd Annual General Meeting of Wesfarmers Limited will be
held on Thursday 31 October 2024 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 2024 Notice of Meeting.
Website
To view shareholder and company information, news
announcements, background information on Wesfarmers’
businesses and historical information, visit the Wesfarmers website at
wesfarmers.com.au
This annual report has been printed utilising solar electricity onto
sustainable FSC-certified paper. Both printer and paper manufacturer
are ISO 14001 certified, the highest environmental standard.
Designed by Clarity Communications
wesfarmers.com.au