2023
Annual Report
We are better together
WOOLWORTHS GROUP LIMITED
ABN 88 000 014 675
Contents
SECTION 1
Performance highlights
F23 highlights
Chair Report
CEO Report
How we work together
Our business model
Our value chain
Delivering value for all of
our stakeholders
Group financial performance
SECTION 2
Business review
Australian Food
WooliesX
Australian B2B
New Zealand Food
BIG W
Addressing climate change
and nature together
Our pathway to net positive
Our material risks
SECTION 3
Directors’ Report
Governance
Board of Directors
Group Executive Committee
Directors’ Statutory Report
Remuneration Report
SECTION 4
Financial Report
Auditor’s
Independence Declaration
Financial Report
Directors’ Declaration
Independent Auditor’s Report
SECTION 5
Other information
Shareholder information
Subleases
Glossary
Company directory
2
4
6
8
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30
34
36
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40
42
46
60
66
68
71
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76
100
101
171
172
176
178
179
181
Acknowledgement of Country
Woolworths Group acknowledges
the many Traditional Owners of the lands
on which we operate, and pay our
respects to their Elders past and present.
We recognise their strengths and enduring
connection to lands, waters and skies
as the Custodians of the oldest continuing
cultures on the planet.
We remain committed to actively contributing
to Australia’s reconciliation journey through listening
and learning, empowering more diverse voices and
working together for a better tomorrow.
Woolworths Group reaffirms our support for the Uluru
Statement from the Heart, and its calls for a First Nations
Voice to Parliament enshrined in the Constitution.
Disclaimer
This report contains forward looking statements,
including, but not limited to statements regarding:
trends in consumer preferences; commodity prices;
goals, targets, plans, strategies and objectives of
Woolworths Group; assumed near and long-term
scenarios and transition pathways; potential global
responses to climate change; regulatory and policy
developments; the development and uptake of certain
technologies; and the potential effect of possible future
events on the value of Woolworths Group.
The forward looking statements in this report are based
on management’s good faith, current expectations
and reflect judgements, assumptions and estimates
and other information available as at the date of this
report. They are, by their nature, subject to significant
uncertainties, many of which are outside Woolworths
Group’s control. Actual results, circumstances and
developments may differ materially from those expressed
in this report and readers are cautioned not to place
undue reliance on these forward looking statements.
Forward looking statements should therefore be read
in conjunction with, and are qualified by reference to the
expectations, judgements, assumptions, estimates and
other information and risk factors, referred to above.
Woolworths Group is purpose-led;
our ambition is to create sustainable
value for all of our stakeholders
As one of Australia and New Zealand’s largest retailers,
we recognise the far-reaching impact we have on the
communities in which we serve and understand the
role we play in driving positive change.
Creating better experiences together
for a better tomorrow
About this report
The 2023 Annual Report provides a consolidated summary of Woolworths Group’s performance for the
financial year ended 25 June 2023, as well as progress against our strategic agenda and Sustainability Plan
2025 to create long-term value for our stakeholders.
• Our Directors’ Report and Operating and Financial Review are featured on pages 2 to 73 of this report
and the information in these sections has been verified through the Group’s internal verification process
• The Remuneration Report on pages 76 to 99 and the Financial Statements on pages 101 to 170 have been
audited by Deloitte.
This report should be read in conjunction with the other reports that comprise the 2023 reporting suite, including:
2023
Modern Slavery Statement
2023
Corporate Governance Statement
2023
Corporate Governance
Statement
Accelerating for change
WOOLWORTHS GROUP LIMITED
ABN 88 000 014 675
WOOLWORTHS GROUP LIMITED
ABN 88 000 014 675
2023
Sustainability
Report
2023
Sustainability
Data Pack
2023 Modern
Slavery
Statement
2023 Corporate
Governance
Statement
The 2023 Woolworths Group reporting suite can be accessed online at:
www.woolworthsgroup.com.au/au/en//investors/our-performance/reports.html
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2023 Sustainability ReportWOOLWORTHS GROUP LIMITEDABN 88 000 014 675Halfway to 20252023 Sustainability Data PackWOOLWORTHS GROUP LIMITEDABN 88 000 014 675Halfway to 2025
2
F23 highlights
Our reach
Customers
Team
Store network
Customers
served in store on
average per week
24.5M
Team
members
200,364
Our network
in Australia and
New Zealand
1,463
Australian Food
19.6M
New Zealand Food 2.9M
BIG W
2.0M
Women
Men
Different term
108,653
90,612
1,099
Australian Food
New Zealand Food
BIG W
1,095
191
177
Average weekly digital
traffic to Group platforms
Team members
<25 years of age
New stores and renewals 2
23M
16.3% from F22
Total Everyday
Rewards members 1
14.5M
+750,000 from F22
71,310
First Nations team
members in Australia
>4,500
23 new stores
57
renewals
Direct
to boot
sites 3
Customer
fulfilment
centres
708
11
1 Total number of members that have joined the program since inception.
2
3 Australian Food only.
Includes Woolworths Supermarkets, Metro Food Stores, Countdown Supermarkets and BIG W.
Our financial performance
Group sales
$64.3B
5.7% from F22
Australian Food
Australian B2B
New Zealand Food
BIG W
$48,047M
$4,324M
$7,240M
$4,785M
Group eCom sales 4,5
eCom sales penetration 5,6
Group EBIT 7
Group eCom Sales
$6,592M
eCom Sales Penetration
11.0%
Group EBIT
$3,116M
F23
F22
F21
F20
F19
$6,592M
$6,542M
$4,743M
$2,905M
$1,994M 8
F23
F22
F21
F20
F19
11.0%
11.4%
8.6%
5.5%
4.1% 8
F23
F22
F21
F20
F19
$3,116M
$2,690M
$2,764M
$2,485M
$2,343M 8
Our sustainability highlights
Voice of Team score for
‘sense of belonging’
Reduction in scope
1 & 2 emissions 9
Food waste diverted
from land fill
+4pts
Achieved
Platinum
Employer AWEI status
Awarded
WGEA
Employer of Choice Award
for the second year
Maintained
Rainbow Tick
certification for fifth
consecutive year
36%
from 2015 baseline
Renewable
electricity in SA
100%
Solar operating or
under construction
>60MW
50,826t
Equivalent of meals
donated to food rescue
>34M
Food waste from stores
diverted from landfill
80% Woolworths
Supermarkets
4 Continuing operations.
5 F22 and F21 restated to include Woolworths at Work as part of Australian Food.
6 Group eCommerce penetration is calculated based on Australian Food, New Zealand Food, BIG W and MyDeal sales only.
7 Continuing operations before significant items.
8 Excluding Endeavour Group and normalised to remove the impact of the 53rd week and AASB16 if it had been in place in F19.
9 Using the market-based method for calculating electricity emissions.
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Chair Report
The value
of a better
tomorrow
It is a pleasure to introduce to you Woolworths Group’s 2023 Annual
Report, the first since I assumed the role of Chair at last year’s AGM.
The review of F23 confirms that Woolworths Group is
performing well across most measures. The most important
driver of our performance has been Woolworths Group’s
team members. Throughout F23, we have seen first-hand
how their efforts have supported customers and their fellow
team members, despite the various challenges they again
faced during the year. I want to start by acknowledging this
and thanking every team member for their hard work and
dedication in F23.
I am also excited by our prospects. It has been a privilege to
have played a part in the successful transformation of the
business to date. However, as a result of the decisions we
have taken, it is clear we have very real opportunities for
sustainable long-term value creation for all our stakeholders.
F23 performance
Woolworths Group’s performance in the 2023 financial year
benefitted from a return to more stable operating conditions
following material disruption from COVID in prior years.
The improved profit result for the year reflected robust
sales growth, the more stable operating environment,
the absence of COVID costs incurred in the prior year,
and the benefits from ongoing investment in the business.
Reflecting the strong result, the Board declared a fully
franked final dividend of 58 cents per share which was
up 9.4% on last year, bringing the total dividend to 104
cents per share, up 13% compared to F22 and in line with
earnings growth for the year. This reflects both this year’s
performance and the long-term confidence in our prospects.
Keeping our team (including contractors) safe when they
come to work is our primary objective. Tragically we lost
two team members in the last 12 months and the Board
extends its sincere condolences to the families, friends and
colleagues of these team members. Investigations into these
events are ongoing; however, in the context of these tragic
circumstances, the Board determined that there should
be a 10% point reduction in the Group STI outcome for F23.
F23 strategic progress
While the overall operating environment for the Group
improved in F23 compared to previous years, global and local
inflationary impacts have created a new challenge as our
customers’ household budgets become increasingly stretched.
Amid this backdrop, we responded by delivering even
greater value across our Food and Everyday Needs
businesses. This included weekly specials and Low Price
programs in Food, expanding our loyalty offer, and investing
in our Own Brands to provide quality products and more
affordable choices. Ensuring that all of our customers
‘get their Woolies worth’ remains a key priority for F24.
Material investment in the Group’s digital and eCommerce
assets over many years has established a solid foundation
that has enabled the Group to respond to changing customer
preferences. This is reflected in Group eCom sales growth
of approximately 35% on a 4-yr CAGR as more customers
switch to convenient online delivery solutions. This has been
further supported by the transformation of the Group’s
supply chain including the launch of 11 CFCs since 2014 to help
optimise online home delivery in key areas for supermarkets.
The Group’s multi-year supply chain transformation is
a key driver of productivity improvement with the upgraded
facilities enabling a wider and fresher range for customers,
a material increase in capacity, and improved efficiencies.
Major new facilities opened over the last five years include
Looking ahead
As we move into our centenary year in 2024,
the Board remains focused on supporting our
CEO and management team as we execute
our ambitious strategy. While our operating
environment remains somewhat uncertain,
we are reassured by both the performance
and underlying health of the Group and
energised by the opportunities ahead of us.
We will be relentless in providing value for
our customers and supporting our team
across the Group. We will continue to realise
the benefits of our investments to date but
will also continue to invest, in a disciplined
fashion, to strengthen our cornerstone
businesses and platforms, grow our
adjacencies and evolve the Group to meet
the changing needs of our customers.
We will be guided by our values and continue
to do what is right for the communities
we serve. We will continue to progress our
Sustainability Plan 2025 to not only have
a positive impact but also make our business
stronger and more resilient for the future.
Woolworths Group is at the heart of
nearly every community in Australia and
New Zealand. We look to the future with
a sense of both responsibility and optimism,
guided by the potential of working better
together for a better tomorrow.
Thank you,
Scott Perkins | CHAIR
Melbourne South Regional DC and Melbourne Fresh DC
in Victoria; Adelaide Regional DC expansion in South
Australia; Palmerston North DC and Auckland Fresh DC
in New Zealand and Heathwood Chilled and Frozen DC
in Queensland. A new Fresh DC in Christchurch, New
Zealand, and Woolworths Group’s first automated CFC
in Auburn, Sydney, are on track to open in 2024.
Expansion into complementary adjacencies has
played an important role in the year to reinforce our
cornerstone retail businesses and support growth.
Our foodservice business, PFD Food Services, had
a strong year with growth of 28%. The acquisition of
retail media business, Shopper Media, in September,
helped deliver Cartology growth of 29%, despite the
challenging advertising market. The acquisition of an
equity stake in Petstock Group announced in December
2022, subject to ACCC approval, will also enable more
customers to conveniently shop for all their everyday
needs across our connected Group.
The value of a better tomorrow
Woolworths Group recognises that operating in
a sustainable way, having a positive impact on the
communities in which we operate and maintaining
the highest levels of governance, will benefit all
of our stakeholders.
Progress on our Sustainability Plan 2025 included the
launch of our latest innovate Reconciliation Action Plan
to drive meaningful progress towards reconciliation
with Indigenous Australia. Remediation of the first
identified case of modern slavery within our supply
chain was completed for 230 impacted workers, and
we committed to reducing our transport emissions
by 60% in 2030 compared to F22 as part of the Group’s
transport decarbonisation strategy.
We continued to improve our TCFD-aligned climate
and nature disclosures on pages 42 to 59 of this
report, to transition towards alignment with the new
standards for F24. To provide greater transparency,
as part of our F23 reporting suite, we increased
coverage of performance reporting against our 2025
Plan and released our first digitised sustainability data
pack on our website. There is still much to do to better
understand our role within the wider value chain and
the positive impact we can have for a better tomorrow.
Board updates
In March of this year, Tracey Fellows and Warwick
Bray joined the Woolworths Group Board as
non-executive directors.
We are delighted to have Tracey and Warwick’s wealth
of experience, knowledge and unique perspectives
available to the Board and are confident that they will
complement the Board’s existing skills.
Warwick has become Chair of the Audit and Finance
Committee, with Tracey joining the People Committee.
Both will stand for election at the 2023 Annual
General Meeting.
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CEO Report
Creating
value for
all of our
stakeholders
While the 2023 financial year marked a return to relative stability after several
years of material COVID-related disruption, the rising cost-of-living pressures
impacting our customers and team has now become our key challenge. To help
with this, we have continued to improve our value proposition for our customers
and increased support for our teams and this will be an ongoing focus in F24.
F23 reflections
F23 Group sales increased by 5.7% with sales momentum
increasing through the year due to cycling COVID impacts
in early F22 and inflation. The more stable operating
environment, phase out of material COVID-related costs,
and ongoing investment in recent years in Group platforms
led to Group EBIT growth before significant items of 15.8%.
More information on the Group’s financial performance
can be found on pages 22 to 40.
Group Voice of Customer (VOC) NPS ended F23 at 49
which was in line with the prior year. While we did see
some improvement in the second half, customer scores
are being impacted by inflation, customers returning to
shopping more on weekends and evenings, and product
availability challenges (although as I write, these are
materially reduced). Pleasingly, Customer Care remains
our highest Store-controllable VOC metric across the
Group at 80%. We recognise, as ever, we have more
to do in F24 to respond to our customer’s evolving
needs and improve customer advocacy.
Our latest Voice of Team (VOT) survey has seen team
scores improve on previous results, particularly for store
team members with an advocacy score of 17 compared
to eight in F22. This reflects higher scores relating to
psychological health, safety and wellbeing, recognition
and us taking action on team feedback.
Across our Food businesses, cost increases in
commodities, energy, and labour led to above-trend price
increases from suppliers during the year, particularly
in packaged products and dairy. The impact of extreme
weather events also affected some Fresh categories such
as Fruit & Vegetables, although both availability and prices
improved in H2. To support our customers to save money
and get their Woolies worth, we implemented a number of
value mechanics during the year, including a strong weekly
promotional program, seasonal Prices Dropped programs,
as well as invested in our Own Brands via Low Prices you
can Rely On, and our Everyday Rewards program which
continues to grow in popularity.
Tragically, two of our team members lost their lives at work
in the last 12 months. We are deeply affected by this loss,
and our thoughts are with their families and friends, and
colleagues affected. Investigations into these events are
ongoing and we are absolutely committed to ensuring
learnings are acknowledged and implemented.
In BIG W, the slowdown in consumer spending has been
more pronounced in H2, particularly in Q4. Customers
continue to shop BIG W to get great value on their
everyday needs; however, increasingly, customers are
buying only what they need, which has seen a decline
in items purchased compared to the prior year.
Progress against
our strategic priorities
During the year, we progressed our Group Strategic
Agenda and advanced our Sustainability Plan 2025
to ensure we create value for all of our stakeholders
over the medium to long-term.
Living our purpose and staying true to our core values
is critical to making the many decisions necessary
to meet the expectations of all of our stakeholders.
With Woolworths being named Most Trusted Brand
by Roy Morgan and Most Valuable Brand by Brand
Finance in F23, we continue to receive strong external
endorsement of our various efforts.
Sustainability is a core part of living our Better
Tomorrow purpose. Key progress on our 2025 Plan
included our commitment to transition our home
delivery fleet to be entirely electric, enabling a 60%
reduction in transport emissions by 2030; the removal
of reusable plastic bags nationwide, which at the end
of phase out equates to approximately 350 million fewer
plastic bags annually combined with the 3.2 billion
single-use plastic bags that used to be in circulation;
and the first retailer to be recognised with Platinum
Status by the Australian Workplace Equality Index.
We have continued to invest in our Australian and
New Zealand supermarkets with 22 new stores and
55 renewals completed in the year. Tailoring our
stores to the needs of individual communities is also
progressing well through our Value, Core and UP store
segmentation strategy. To meet the continued demand
for convenience, we have expanded our eCommerce
offer for customers. Group eCom sales increased by
11.1% in the second half with Same Day and On-Demand
in Australian Food growing rapidly compared to last year.
In general merchandise, a strong third party marketplace
offering has become a key part of the digital customer
experience. To accelerate our capabilities in this area, we
completed the acquisition of MyDeal in September 2022
and are well progressed in terms of how we leverage
these capabilities, particularly in BIG W.
In terms of our platforms, our supply chain
transformation continues to progress as planned with
MSRDC now delivering a consistent 2.4 million cartons
per week, and our new major facilities in Sydney
progressing to plan. Our Auburn eCom fulfilment centre
is on track to open in late 2024 and the initial phase of our
new Sydney NDC in Moorebank is now complete with an
operational launch scheduled before the end of 2024.
Our retail media business, Cartology, continued to grow
strongly with sales growth of 29% (including Shopper
Media) despite a more challenging advertising market
environment, with the business now servicing both New
Zealand and BIG W. wiq, the Group’s data and analytics
platform in partnership with Quantium, is building on the
continued success in optimising promotional effectiveness
and personalising customer experiences, and has
expanded its impact by consolidating over 30 high-impact
use cases into platform solutions. Finally, we continue
to grow and strengthen Everyday Rewards with a 6%
increase in active members and a 7% increase in members
accessing Booster offers compared to the prior year.
Investing for the future
Looking ahead, I am energised by the plans we
have in place to evolve and grow Woolworths
Group for the better. We are committed to
continuing to invest for all of our stakeholders
to ensure the foundations for the Group’s
long-term success.
The strong year we have had would not have
been possible without the tremendous effort
of our team. In July 2023 we increased the
retail wage paid to our store teams in Australia
by 5.75% and by 7% for our New Zealand
store teams. In F24 we are also focused on
further enhancing team benefits via Everyday
Rewards Plus.
Investing to make sure our customers get
their Woolies worth remains a key priority
and we have launched a number of ways to
help customers spend less on their shopping.
We will also continue to invest in renewing
our stores in Australia and New Zealand
and opening stores in new communities
where opportunities arise. From early 2024,
Countdown will be rebranded to Woolworths
Supermarkets New Zealand. This symbolises
our ambition to improve experiences for
our Kiwi customers by strengthening our
trans-Tasman connections and our proud
history in New Zealand, having opened our
first store there in 1929.
We continue to look after our communities
with an initial investment of $9 million in F24
as part of our updated goal to reduce hunger
and food waste, as announced in August. We
also continue to invest in our Group platforms
to leverage technology and analytics to
provide better and safer experiences for our
customers and team, greater end-to-end
operating efficiency, and strengthen our
supply chain resilience.
In 2024, we celebrate our centenary.
As we reflect on the first 100 years, and look
forward to the next chapter, we are united and
galvanised by our shared purpose of building
a better tomorrow.
In closing, I want to say thank you to all of our
stakeholders for supporting Woolworths Group
and for helping us create better experiences
in F23 for today and for a better tomorrow.
Brad Banducci | CHIEF EXECUTIVE OFFICER
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How we
work together
We are focused on ensuring all of our decisions and actions
reinforce our purpose of creating better experiences together
for a better tomorrow for our customers, team and the
communities we serve.
O u r s t r ategic priorities
Delivering
compelling
customer
propositions
Strengthening
our foundations
Living our
purpose
Our purpose
We create better
experiences
together for a
better tomorrow
e
r
p l y
a
e
W e c
e
d
We listen
and learn
O
u
r
c
o
r
e
v
a
l
u
e
s
C
W
u
e are
sto
m 1st
m
a
Te
er 1st
We are always
improving
We deliver
end-to-end
W e e n c o u r a g e
t h i n
r e e d o m w i
r a m e w o r k
f
f
a
g
n
i
k
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o
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-
f
o
-
s
y
a
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u
O
W
e alw
the right thing
ays do
p l e
p
s s i m
e
e
g
W e k
t h i n
People
Product
Planet
Our sustainabil i t y p i
s
l a r
l
Our strategic priorities
Our strategic priorities have a Customer 1st, Team 1st approach at their core and align
with our connected Group strategic framework:
Living our purpose
Build a better and
safer tomorrow for our
Customers and Team.
Leverage Everyday Rewards
to unlock even more value
for our members and team.
Delivering compelling
customer propositions
Strengthening
our foundations
Woolworths Retail: help all
customers find their Woolies worth.
Woolworths Food Company:
grow brands, products and
capabilities unique to Woolworths.
BIG W and Specialty (W Living):
help our customers find real value
and easy everyday solutions.
Retail Platforms: scale
value delivery in our Group
businesses and directly with
third parties.
Group Platforms: support
Group priorities and focus
on E2E productivity.
Our sustainability pillars
Access our 2023 Sustainability Report
Sustainability is intrinsic to our business and the way we operate, helping us make positive
change for a better tomorrow and enabling the creation of sustainable growth.
People
Planet
Product
Our People pillar focuses
on creating a diverse and
inclusive place for our teams
to work. It means supporting
our communities, building
partnerships and working with
our suppliers to make sure that
workers’ rights in our supply
chain are protected.
Our Planet pillar focuses
on protecting the world we
live in for current and future
generations. It means going
further than just limiting
negative impacts; it means
actively finding ways to create
positive benefits.
Our Product pillar focuses
on evolving the way we do
business to embrace circular
thinking, which means all waste
is a resource. It means making
it easy for our customers
to choose products that are
healthier, sustainably sourced
and responsibly packaged.
Our ways-of-working and core values
Ways-of-working
Core values
These define how we aspire to work
together end-to-end as one team.
These are the core values we expect everyone at Woolworths
Group to role model on an individual and ongoing basis.
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Our stakeholders See pages 14 to 21As one of Australia and New Zealand’s largest retailers, we recognise the impact Woolworths Group has across all of our stakeholders. Engaging with our stakeholders helps us to understand and prioritise our strategic agenda for the business to deliver sustainable value for all.CustomersTeamSuppliers and business partnersCommunitiesPlanetInvestors and shareholdersRisk management oversight See pages 60 to 65
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Our business model
Woolworths Group’s value drivers are essential for delivering
growth and change for our stakeholders. Our connected
Group comprises five key components that work to reinforce
each other to deliver sustainable value for the long-term.
Our value drivers
Our connected Group
Value created for
Trusted brands and products
Providing the best range and value, freshest
produce and everyday needs for our customers
in Australia and New Zealand.
Retail businesses, services and adjacencies
Connecting B2C and B2B customers with good food
and more every day through stores, convenient
services, seamless digital experiences and
partnerships, world-class fulfilment, complementary
adjacencies and a leading loyalty program.
Team members
Our Team 1st culture is focused on the workplace of
the future with a non-negotiable approach to safety,
and celebrates inclusion and belonging to reflect the
diversity of our communities.
Technology, innovation and data
Harnessing leading technology, leveraging digital
tools and analytics-enabled platforms, and investing
in innovations to deliver value.
Sustainability
A leader in sustainability focused on creating positive
change for current and future generations through
our pillars of People, Planet and Product.
Financial
Strong balance sheet and disciplined capital
allocation to drive sustainable long-term growth.
r e
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W e cre at e b
W e cre at e b
x p e r i e n ces together for a b
x p e r i e n ces together for a b
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Products
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Food services
Customers
Our connected Group enables us to provide all of
our customers with great value, a better range of
quality products and convenient shopping options.
Team
Our team members are critical to unlock value throughout the
Group’s value chain. We aspire to be the employer of choice
through a focus on creating safe work environments, meaningful
hours, inclusion and belonging, and the workplace of the future.
Suppliers and business partners
Maintaining good relationships with our suppliers and business
partners is essential to providing the quality goods and services our
customers expect from us. We also recognise the important role we
play in working together to build a rights-respecting culture across
our value chain to do better for workers and their communities.
Communities
We are committed to engaging, sharing and giving back to
have a positive impact on the communities we serve. We also
want our teams to reflect the diverse communities in which
we operate to better understand their needs.
Customer 1st
Customer 1st
Team 1st
Team 1st
R
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s – Memb e r
s – Memb e r
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B I G W a n d Specialt
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GM
Digital & data
Supply chain
& fulfill
S
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Network &
property
orted by our Teams and G r o u p P l a
orted by our Teams and G r o u p P l a
Health
Planet
Pet
r m s
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t f
t f
Building a better tomorrow for our planet means we
are committed to going beyond just limiting negative
impacts. We are actively finding ways to partner across
our value chain to drive the transformational change
required to transition to a lower carbon future whilst
working to protect and regenerate nature.
Investors and shareholders
A focus on investing for the future to deliver
sustainable growth whilst maintaining
a strong balance sheet and financial flexibility,
which sets the foundation for long-term value
creation for our shareholders.
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E
Our value chain
Our value chain
Woolworths Group’s value chain reflects the connected nature of our
operations. As a Group, we are constantly evolving to provide better
experiences for our customers and team, to become more efficient
to deliver value, to generate growth for our suppliers, and to deliver
on our commitment for a better tomorrow.
Agricultural and
raw materials
Data and insights
Suppliers, processors
and packaging
Warehouse and
distribution
Retail businesses
and services
Team members
Customers
Product stewardship
The farming and
sourcing of raw materials
is fundamental to our
promise as Today’s Fresh
Food people, as well as
the production of quality
own brand products.
By leveraging data and
sharing insights across
our entire value chain
we continue to shape the
Group for the future to
meet the ever-evolving
needs of our customers.
Working closely with our
suppliers, processors
and packaging partners
is important to delivering
on the range, freshness
and sustainability
of our products.
The Group’s DC
network and supply
chain primarily moves
products across
Australia and New
Zealand to support
our retail operations.
Our Australian and New
Zealand supermarkets
and eCommerce
businesses are the
cornerstone of our
retail operations
complemented by
adjacent businesses.
The Group employs
over 200,000 team
members across
our value chain and
we live our purpose
of creating better
experiences together
for a better tomorrow.
An average of 24.5 million
customers shop across
Woolworths Group every
week. Customers also
engage with us online
with 23 million average
weekly visits to our
digital platforms.
Programs designed
to recover and reuse
materials that would
otherwise go to landfill
at the end of their
product life.
•
• Regenerative
agriculture
• Sustainable sourcing of
high-risk commodities
• Animal welfare
• Human rights
• Food waste reduction
• Privacy
• Cyber security
• Code of conduct
• Scope 3 emissions
• Scope 1 and 2
• Scope 1 and 2
• Meaningful careers
reductions
• Sustainable packaging
and plastics reduction
• Health – product
reformulations
• Animal welfare
• Human rights
• Supporting First
Nations businesses
• Anti-bribery
and corruption
• Supplier trading terms
emissions reductions
• Renewable electricity
• Transport
decarbonisation
• Donations
• Anti-bribery
and corruption
• Code of conduct
emissions reductions
• Renewable electricity
• Food surplus donations
• Code of conduct
• Holistic wellbeing
• Sustainable sourcing of
high-risk commodities
• Responsible
packaging
•
Inclusion and belonging
• Responsible packaging
• Supporting
communities
• Code of conduct
• Animal welfare
• Green deliveries
• Food surplus
donations
• Regenerative
agriculture
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Delivering value
for all of our
stakeholders
Customers
Customers are at the heart of our strategy; by continuing to create better
shopping experiences, we want more Australians and New Zealanders
to choose Woolworths Group for all of their food and everyday needs.
Better value for money
Customer feedback in F23 was clear – our customers
wanted better value for money as household budgets
increasingly came under pressure from inflation. We know
value can mean different things to different people.
Across our Food businesses, Everyday Rewards platform
and BIG W, we provided many ways to help our customers
find better value for their individual needs.
For better value across Food, Woolworths Supermarkets
introduced a Price Freeze on 200 grocery essentials for
six months in the lead up to Christmas in 2022. We also
delivered four seasonal and a Christmas Prices Dropped
campaign, more than 3,000 products on our Low Price
you can Rely On range and maintained over 6,000 weekly
specials. Our Own and Exclusive Brands play a key role in
providing value for our customers including a wide range
of Own Brand products that retail at an average price of less
than 30% below the branded equivalents. In addition, price
increases across our own brands in F23 were materially
below overall store inflation.
Our loyalty program, Everyday Rewards, delivers hundreds
of millions in savings to members every year through
access to personalised offers on the items they regularly
buy. Members also have the opportunity to boost points
on selected items to unlock more savings for their next
shop or to bank their savings to spend at Christmas.
Our subscription offer, Everyday Extra, moved from pilot to
roll out in F23, with subscribers saving approximately $300
extra for the year. In August 2023, we launched Member
Pricing to provide our members with even greater value.
In BIG W, two new own brands, Openook in Home, and
Somersault in Toys, were launched with over 1,000 new
products to offer more affordable choices for customers.
BIG W also provided value for customers during key
seasonal events in the year, such as Christmas, Easter,
and Mother’s Day.
Supporting our most vulnerable communities is especially
critical in this environment, particularly to help address
food insecurity. We donated over 17,000 tonnes to our
food rescue partners in F23, which is the equivalent of
approximately 34 million meals as we work towards our
goal to reduce hunger and food waste as part of our
Sustainability Plan 2025.
Better customer shopping experiences
Customers’ behaviours increasingly returned to pre-COVID
habits during the year, including more frequent visits to our
stores as customer mobility improved. We continued to invest in
our supermarkets, opening 22 in the year and renewing a further
55 across Australia and New Zealand to deliver better and more
curated experiences for each of our communities. The curation
is achieved through the segmentation of stores into Value,
Core and UP, with a store’s features based on the needs of the
local community. We also tested and learnt from a number
of store upgrades in the year, including enhanced front of
store layouts for a better customer experience through the
conversion of express lanes into additional assisted checkouts,
expansion of the assisted checkout area for larger trolleys,
and a centralised service desk to easily access team support.
In F23, BIG W updated its latest store blueprint with a focus
on a new customer-led in store experience, opening one new
store with two renewals completed in the year. BIG W’s Kawana
Waters store in Queensland was relaunched in May 2023 using
the latest blueprint including new service navigational anchors,
an enhanced layby and pick up area and team space; as well
as an upgraded Direct to boot offer.
We continue to review the accessibility of our stores and have
introduced measures such as a low-sensory quiet hour in over
900 Australian supermarkets to reduce anxiety and sensory
stress for customers with specific needs, including autism.
We will do more in F24 to make our stores accessible for all.
During the year we saw a rapid increase in the demand for our
convenient online shopping propositions, particularly for express
delivery options such as Same Day and On-Demand delivery
within the hour. To support this, we continued to enhance our
infrastructure such as Direct to boot with a further 81 stores in F23
and made changes to our Woolworths and Everyday Rewards
apps and websites to make it easier for our customers to shop
online. To provide additional capacity to meet demand, we also
opened CFCs in Caringbah, NSW and Rochedale, Qld, bringing
the total number of Australian CFCs to seven at the end of F23.
Growing B2B
Woolworths Group’s customers
also include business and wholesale
customers in Australia and New
Zealand. In Australian B2B, F23
sales increased by 17.4%, driven
by strong sales growth in PFD Food
Services due to higher demand
from its customers as the consumer
environment normalised and new
customer acquisition. PC+, our
B2B supply chain business, also
performed strongly in F23 driven
by strong growth in primary freight
services as well as the establishment
of offshore consolidation capabilities
in India. Looking ahead, we will
continue to grow and optimise
our B2B offer under the banner
of Woolworths Food Company in our
connected Group. This will include
growing PFD and Australian Grocery
Wholesalers’ customer base through
exceptional customer service and
own brand opportunities.
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Healthiest Own Brand
In December 2022, Woolworths
Supermarkets’ Own Brand range
was ranked the healthiest of the four
major Australian retailers for the
fourth year in a row, by The George
Institute for Global Health based
on Health Star Ratings.
For more information access
our 2023 Sustainability Report
16
Stakeholder review
Team
Woolworths Group employs over 200,000 hard working team members in stores,
across our supply chain and in our support offices. Our team members are essential
to enable the Group to create value and are critical to our long-term success.
Better value for our team
As one of the largest private-sector employers in Australia
and New Zealand, providing our team with great value
every time they shop with us given the rising cost-of-living
pressures is important to us. A key component of our
benefits program launched in F23 is Everyday Extra for
Team, which includes an extra 5% discount off their shop
every month and the ability to earn three times as many
Everyday Rewards points on every shop at Woolworths
and BIG W. This is in addition to the existing discount of
5% off every shop and additional 5% extra on Woolworths’
Own Brand items and BIG W clothing.
Equally important is that over time salaries and wages for
our team keep pace with increases in the cost-of- living.
In F23, we increased store team member wages by 4.6%
in Australia and 12% for New Zealand. For F24, we have
committed to a further increase in retail wages for store
teams of 5.75% in Australia, in addition to a 0.5% increase
in superannuation, and 7.0% in New Zealand. Offering
meaningful hours is another key initiative to support our
team and their earning potential. This was enabled by the
national rollout of a new rostering and store standards
solution, RT3 (right team, right task and right time), across
Australian supermarkets in F23. By using individual store
data, the software provides a rostering solution that
matches the shopping behaviours of customers by store.
This will be further enhanced in F24 with the introduction
of cross-store working, which allows team members to
work across a number of stores. This is supplemented
by regular VOT feedback so we know how our team are
responding to the changes.
Our teams’ mental health and wellbeing is also critically
important, and to support this, we partnered with Sonder
to provide an app that provides unlimited access to safety,
mental health, physical health and wellbeing support.
Over 47,000 team members and their families have signed
up to Sonder since its launch in 2020, and in F23, team
members accessed professional support through the
app more than 18,000 times, for help with issues related
to medical, stress, acute mental health, anxiety, financial,
and safety concerns.
Inclusion and belonging
We recognise the value our teams’ diversity
brings to our business, our customers, and
our communities. To achieve our ambition of
being a truly inclusive workplace, our inclusion
strategy focuses on five key pillars: gender equity,
First Nations inclusion, disability inclusion, cultural
inclusion and LGBTQ+ inclusion; recognising the
intersectionality of our team. In F23, Woolworths
Group achieved platinum status in the Australian
LGBTQ+ Inclusion Awards, provided secure
employment opportunities for refugees through
our refugee employment program, increased
employment opportunities for over 4,500 First
Nations team members through the Resourcing the
Future program, and established a Disability Team
Network. However, we recognise there’s more to do.
For more information read our
2023 Sustainability Report
A better and safer place to work
Woolworths Group’s primary objective is the safety of our
team across all of our sites. Tragically two team members
lost their lives at work in the last 12 months. We are deeply
impacted by this loss and our thoughts are with all those
affected. Investigations into these events are ongoing but
we are committed to ensuring learnings are acknowledged
and properly implemented. Aggression towards team
members was an increasing area of concern in F23 with
more than 3,000 acts of violence, threats and abuse reported
in the past 12 months. To help protect our team, we invested
in CCTV upgrades, two-way radio headsets, as well as virtual
reality violence and aggression training, with further plans
to roll out body-worn cameras and personal safety alarms
to high-risk stores in F24. We also continued the rollout
of Scan Assist to 474 Australian supermarkets to support
accurate scanning at assisted checkouts.
Better and safer work experiences is a key priority for
our new and renewed stores as well as our supply chain
transformation. New features in Woolworths Supermarkets
in F23 include the removal of express checkouts and
centralising the service desk for simpler front of store
operations and supervision, increased team room
capacity and optimising Home Delivery and Direct to boot
spaces in stores to help simplify processes. As part of our
supply chain transformation we are creating better team
experiences through 5 Star Green Star-rated sites with
modern team facilities and canteens, increased natural light,
faith rooms, and improved amenities for visiting drivers.
At Woolworths Group we want our team to have fulfilling
careers with opportunities to grow and learn, particularly
as the industry evolves with technological advances
in automation, predictive analytics, artificial intelligence
and cloud computing. In February 2021, we announced
plans to invest $50 million over the next three years
in the Woolworths Future of Work Fund to upskill, reskill
and redeploy team members impacted by industry
disruption and technological change. Since its launch,
we have invested $22.8 million in programs, including new
technology to reimagine learning, virtual reality headsets
for training, and the Data4All program, completed by 600
senior leaders to date, to build data analytics capabilities.
Refugee Employment
Program
Woolworths Group’s Refugee
Employment Program, delivered
in partnership with Community
Corporate, is one of the nation’s
largest employer-led refugee-
specific sustainable employment
programs. Since 2018, Woolworths
Group has welcomed more than
245 refugees into its teams across
Woolworths Supermarkets, Metro
Food Stores, CFCs, and digital and
technology support functions.
In June 2022, Woolworths Group also
launched a targeted Refugee Digital
and Technology Cadetship Program
in partnership with Community
Corporate and Service Now to
create career pathways for refugees
who possess technology skills but
lack local experience in Australia.
WGEA and AWEI recognition
Woolworths Group was awarded the Workplace
Gender Equality Agency Employer of Choice
citation for the second time in F23, recognising
our active commitment to achieving workplace
gender equity. Woolworths Group was
also recognised for its support for LGBTQ+
communities in F23, achieving Platinum
Employer AWEI status, the first for any retailer,
and maintaining Rainbow Tick Accreditation
in New Zealand for five years.
External benchmarks
WGEA
Employer
of Choice
NZ
Rainbow Tick
Accreditation
AUSTRALIAN
LGBTQ INCLUSION
AWARDS 2022
AWEI
Platinum
Status
#1
retailer
globally, 2022
Corporate
Human Rights
Benchmark
17
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Stakeholder review
Suppliers and business partners
Communities
Only through maintaining strong relationships with our suppliers and business
partners can we deliver better outcomes for our customers and enable a greater
impact for change across our shared value chain.
Better together in partnership
By working closely with our small suppliers, we can deliver
a localised and curated range to our customers as well
as support the local communities in which we operate.
Key initiatives to help them include our Seedlab Australia
partnership which helps small suppliers to become retail
ready; sharing curated business performance data
through our analytics business, wiq; and small supplier
payment terms with 14-day terms to support cash flow.
Such initiatives have resulted in a four point improvement
in our Voice of Supplier score for small suppliers in F23.
Woolworths Group has one of the largest retail supply
chains in Australia and New Zealand. We are committed
to building a rights-respecting approach across our
business where modern slavery risks are identified,
managed and mitigated. We work directly with our global
trade and non-trade suppliers to embed respect for human
rights into our everyday decisions and throughout our
value chain. Our Human Rights Program underpins our
work with suppliers and defines our approach to managing
human rights risks across the Group’s supply chain. In F22,
Woolworths Group reported its first identified case of
modern slavery, and in F23, remediation was completed
for 230 (98%) of impacted workers. During the year, 885
supply chain audits across our fresh and own brand supply
chains were completed resulting in 238 critical findings,
with 67 closed and the remainder being actively monitored.
Work is also underway on supplier capacity building
to implement the Priority Industry Principles with all
own brand suppliers in Malaysia and Thailand.
Further information can be found in our
2023 Modern Slavery Statement
The value chain generates most of the Group’s scope
3 emissions, which are approximately 15 times greater
than our scope 1 and 2 emissions combined, with
purchased goods and services covering 80–85%. In 2022,
we commenced a pilot engagement program with our
suppliers in partnership with The Sustainability Consortium.
We invited 55 suppliers across Australia and New Zealand
from six categories significantly contributing to emissions
across our value chain. We piloted a multi-retailer,
science-based decision tool, THESIS on SupplyShift,
to capture emissions intensity data and, over time, its
trajectory through the value chain. The program aimed
to provide the opportunity to share progress as companies
work towards their own established goals and support
those starting out to understand their own emissions
profile and taking action to reduce it.
More detailed information can be found in our
climate and nature disclosure on pages 42 to 59
Supporting Indigenous suppliers
In 2022, Woolworths Group updated its Procurement
Policy, clarifying the definition of an Indigenous supplier
while providing greater flexibility in procurement
processes to support spend with Indigenous
suppliers. In the same year, we launched our internal
Indigenous business directory and participated in
Supply Nation’s connect event as an exhibitor, meeting
Indigenous businesses and industry leaders to build
relationships and connections. To support the growth
of Indigenous businesses we have committed to
increasing our influenceable spend with non-trade
First Nations suppliers to 3% by 2025 as part of our
latest Reconciliation Action Plan.
For more information read our
Reconciliation Action Plan
Supporting the communities in which
we serve is essential to the long-term
sustainability of the Group. As one
of Australia and New Zealand’s largest
retailers, we want to have a positive
impact on all communities through our
expansive retail and wholesale network.
Positive impact today and every day
We are committed to positively impacting our communities
by investing the equivalent of no less than 1% of our total
Group earnings before tax (EBT) in community partnerships
and programs, which totalled 3.61% of EBT on a rolling
two-year average in F23.
In February 2023, New Zealand faced devastating weather
events, including flooding and Cyclone Gabrielle. Given
Countdown’s national footprint, we played a crucial role
in helping with community recovery. In the first half of 2023,
we donated more than NZD$450,000 in food and funds to
our partners on the ground and government organisations
to support those affected. With our customers’ generous
support, Countdown raised over NZD$252,000 for the
Mayoral Relief Funds, New Zealand Red Cross, and local
community partners. We also donated more than 80 tonnes
of water, meat, fruit, vegetables and other essentials
to evacuation centres in Auckland, Gisborne, and Hawkes
Bay. In addition, Countdown announced support to help
growers recover from the impact, including NZD$700,000
in cash grants, a NZD$50,000 donation to Rural Support and
other in-kind assistance. In Australia, the Group’s Support
Through Australian Natural Disasters (S.T.A.N.D.) program
helps our communities during times of natural disasters,
such as the devastating floods that hit WA, Vic and NSW
in F23. Funds raised through our S.T.A.N.D. program this
past year, including our annual donation of $500,000,
enabled The Salvation Army to provide immediate relief
to affected communities.
Our latest innovate Reconciliation Action Plan, endorsed by
Reconciliation Australia, is part of our reconciliation strategy
and a call to action to our team, partners, and all Australians
to move from ‘safe’ to ‘brave’ in regard to reconciliation. The
plan details 97 deliverables to increase reconciliation through
a number of areas, including First Nations employment,
health, education, and sourcing. It also includes key initiatives
such as a $10 million investment in a national First Nations
residential college at the University of Technology in Sydney,
as well as ongoing commitments with our remote retailer
partnerships to ensure the supply of food and essential
goods to remote Indigenous communities.
Mini Woolies
This collaborative program between
Woolworths Supermarkets and
Fujitsu provides hands-on learning
experiences for students and job
candidates living with disabilities.
Since its inception in 2018, it has
grown to more than 41 locations
and offered experiences to more
than 3,000 young Australians.
BIG W partners with the Australian Literacy
and Numeracy Foundation (ALNF) to deliver
the innovative Breakfast Library program
to kids, supporting 30 schools each week.
In F23, over $220,000 was raised for the ALNF
during Book Week and the Back to School
campaign in H2. The program is focused
on First Nations and vulnerable communities,
and provides children with a healthy breakfast,
a new book each week, and reading sessions
to improve literacy outcomes. In 2023, BIG W
has helped to provide over 20,000 high quality
books for children as part of the Breakfast
Library program.
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20
Stakeholder review
Planet
As committed in our Sustainability Plan
2025, we aim to reduce our emissions,
improve our operations and communities’
resilience, work to improve food security
and reduce waste, and encourage
sustainable and regenerative practices
for future generations.
Towards a Better Tomorrow
In F23, we made progress on our 2050 ambition to be a net
positive carbon emission Group with scope 1 and 2 emissions
down 36% from the 2015 baseline. This was achieved
through ongoing energy upgrades such as LED lighting,
reduced refrigerant losses and overall grid decarbonisation.
Underpinning our 2030 target is our commitment to be
completely powered by green electricity by 2025. In the year,
approximately 500GWh of electricity was from renewable
sources and we installed 48MW of solar across 231 systems.
To support the Group’s next phase towards net positive
scope 1 and 2 emissions, a transport decarbonisation
strategy was established and we announced our
commitment to a fully electric home delivery vehicle fleet
by 2030 with 27 electric vehicles on the road by June 2023.
We recognise that most of our emissions are generated
in our value chain and we are working to improve visibility
of our supplier emissions through our value chain program.
More detail on our progress against our climate goals
can be found on pages 42 to 59 of this report.
This year we implemented a food waste diversion data
enhancement program across our Australian and New
Zealand supermarkets, Metro Food Stores and CFCs.
The program has significantly improved data capture
and reporting capability, helping the team select diversion
pathways for food waste based on the positive impact
such as food rescue. We can now report more accurately
on our performance and monitor progress against our
goal. In F23, we diverted 80% of food waste from landfill
from Woolworths Supermarkets and 69% across the
Group. We also achieved a 13% increase in our food rescue
donations. In August 2023, we updated our food waste
goal, reducing hunger and food waste, to improve explicit
mention of its impact on food security, and align with UN
Sustainable Development Goals, 2 – Zero hunger and,
12 – Responsible consumption.
We aim to have an influence beyond our operations to help
our wider value chain reduce industry and community
food waste. We support our farmers to reduce food waste
to landfill through initiatives such as Odd Bunch, which has
Further information can be found in our
2023 Sustainability Report
saved over 300,000 tonnes of fruit and vegetables
from landfill since 2015. We’re also working to help
educate and inspire our customers on methods
and benefits of food waste reduction. For example,
Reduced in Price, Just as Nice, launched in 2023,
helps customers in our Metro Food Stores save
money and reduce food waste with allocated
space for reduced and short shelf-life items.
The Group also invests in new innovations
through its W360 business, such as Goterra’s
black soldier fly larvae technology, rolled out to
90 stores, which turns food waste into sustainable
livestock feed; and ReFresh:Food, a digital food
marketplace for farmers to sell their excess
products to launch in F24.
Addressing soft plastics
REDcycle’s consumer soft plastics
recycling program was suspended
in November 2022 after it came to
light that the company had been
stockpiling collected soft plastics due
to insufficient processing capacity.
Pursuant to an ACCC authorisation,
Woolworths and other Australian
grocery retailers volunteered to
manage the REDcycle stockpiles
while recycling solutions are being
explored. Over the last five months,
Woolworths has also been working
as part of the Soft Plastics Taskforce
to identify potential processing
arrangements for the existing
stockpiles as well as reestablish
an in store soft plastics collection
scheme. There is currently relatively
limited domestic soft plastic
recycling, although further capacity
is expected to become available
over time. Given the importance
of maintaining public trust following
the collapse of the REDcycle program,
Woolworths and the other Soft
Plastics Taskforce members are
carefully working through the
necessary steps in order to restart
an in store soft plastics collection
program in a responsible manner.
Investors and shareholders
Ongoing progress against our strategic priorities, and a strong financial
performance and balance sheet sets the foundation for a Group that can
continue to deliver long-term value creation for our investors and shareholders.
Summergate in China, Fresh to Go (part of
PFD), as well as winding up our International
business. Other acquisitions in the year included
out-of-home media company Shopper Media
in September 2022 to grow our retail media offer
through Cartology, and MyDeal, in the same
month, to build our marketplace capability.
In December 2022, we announced our intention
to acquire an equity interest in Petstock Group
to support our aspiration to better meet the
everyday needs of our customers. Subject
to ACCC approval, Petstock Group will become
part of W Living, which will include BIG W and
our other online specialty businesses.
Better for
New Zealand
From early 2024, Countdown
Supermarkets will be rebranded
to Woolworths Supermarkets
to strengthen our trans-Tasman
connection and to bring the best
of the Group to our Kiwi customers.
This will include Everyday
Rewards to provide more value, an
accelerated store renewal program
to create better in store experiences
and a materially improved
fresh offer as we continue our
supply chain transformation.
Sustainable returns
The financial performance of the Group in F23 has enabled
strong returns for our investors and shareholders. Group
NPAT before significant items of $1,721 million increased
13.7% on last year with the profit growth reflecting the more
stable operating environment, the absence of COVID costs,
and ongoing investment in the business over many years.
Reflecting the higher profit, the Group declared a fully
franked final dividend of 58 cents which was up 9.4% on last
year, bringing the total dividend to 104, up 13% compared to
F22. Total shareholder return for Woolworths Group in F23
of 14.7% was broadly in line with ASX200.
A stronger Group for the future
The material investment in the Group’s multi-year supply
chain transformation will be a key driver of future growth.
In F23 we passed the mid-way point of the transformation
with major new facilities opened over the last five years
including Melbourne South Regional DC and Melbourne
Fresh DC in Victoria; the Adelaide Regional DC expansion
in South Australia; Palmerston North DC and Auckland Fresh
DC in New Zealand and Heathwood Chilled and Frozen DC
in Queensland. The new facilities are providing a wider
and fresher range for customers, increased capacity,
and improving efficiency as facilities build volume and
move from commissioning to operational phases.
A new Fresh DC in Christchurch, New Zealand, and
Woolworths Group’s first automated CFC in Auburn,
Sydney, are on track to open in 2024. The remaining
material investments in the transformation are two new
DCs in Moorebank, NSW and are progressing to plan with
the initial phase of our new Sydney NDC now complete
with an operational launch date also planned for late 2024.
Strong free cash flow during the year enables the Group
to invest for the future and at the same time maintain
strong dividend payments to shareholders. The Group’s net
debt/EBITDA ratio ended F23 at 2.6x compared to 3.2x in F22,
providing ample headroom to execute the Group’s strategy,
including investing in adjacent opportunities that strengthen
the core and deliver growth for the Group.
The acquisition of PFD Food Services in 2021 is an example
of an adjacency that is already adding value to the Group
with sales increasing 28% in F23. PFD has strengthened
our B2B offer as we look to refocus our proposition
in F23, including exiting international drinks importer,
21
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Group financial
performance
F23 marked a return to relative stability after several years of material COVID-related
disruption, with an improved financial performance driven by the non-recurrence
of direct COVID costs, elevated inflation and the benefits of ongoing investment.
Group sales
$64.3B
5.7% from F22
Group eCommerce sales
$6,592M
0.8% from F22
F23 sales summary
$ MILLION
Australian Food
Australian B2B 2
New Zealand Food (AUD)
New Zealand Food (NZD)
BIG W
Other 2,3
Total Group
The increase in Group sales in F23 was driven
by sales growth across all segments.
Group eCommerce sales in F23 increased by 0.8% with
a strong recovery in H2, growing by 11.1%. eCommerce
penetration for the year was 11.0%.
Total Group eCommerce sales
eCommerce sales penetration (%) 4
Average weekly traffic to Group digital platforms (million) 5
F23
F22 1
CHANGE
48,047
45,740
4,324
7,240
7,912
4,785
(102)
3,684
7,092
7,563
4,431
(98)
64,294
60,849
5.0%
17.4%
2.1%
4.6%
8.0%
4.4%
5.7%
6,592
11.0%
23.0
6,542
11.4%
19.8
0.8%
(46) bps
16.3%
F23
F22 1
CHANGE
2,865
2,406
63
228
249
145
(185)
3,116
(117)
2,999
56
296
316
55
(123)
2,690
6,388
9,078
19.1%
13.0%
(22.9)%
(21.0)%
165.3%
51.7%
15.8%
n.m.
(67.0)%
F23 EBIT summary
$ MILLION
Before significant items
Australian Food
Australian B2B
New Zealand Food (AUD)
New Zealand Food (NZD)
BIG W
Other 3
Group EBIT before significant items
Significant items
Group EBIT
1 F22 restated to include Woolworths at Work as part of Australian Food.
2 Revenue from the sales of goods and services in Australian B2B includes $351 million (2022: $302 million) of freight revenue. However,
at a Group level, this is reclassified and recognised as a reduction in cost of sales. As a result, $351 million (2022: $302 million) reduction
has been recognised in Other. This has not resulted in a change to earnings before interest and tax at a Group level.
3 Other comprises Quantium and MyDeal (which are not considered separately reportable segments), as well as various support functions,
including property and Group and overhead costs, the Group’s share of profit or loss of investments accounted for using the equity
method (including Endeavour Group), and consolidation and elimination journals.
4 Group eCommerce penetration is calculated based on Australian Food, New Zealand Food, BIG W and MyDeal sales only. F22 restated
to include Woolworths at Work as part of Australian Food.
5 F22 digital traffic has been restated to include Woolworths Mobile, Healthylife, gift cards, B2B and PetCulture digital platforms.
F23 includes MyDeal.
Note: all references to sales, EBITDA and EBIT are from continuing operations before significant items, unless stated otherwise.
23
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Gross margin as a % of sales
Cost of doing business as a % of sales
26.8%
51 bps from F22
21.9%
8 bps from F22
The gross margin (%) increase was driven by
Australian Food where the absence of COVID costs
across the supply chain, mix and growth in new
businesses more than offset an increase in stockloss.
Cost of doing business (%) increased marginally with higher
costs primarily driven by wage and other cost inflation
being somewhat offset by the absence of COVID costs,
improved productivity, and sales growth.
Group EBIT
$3,116M
15.8% from F22
Finance costs
$677M
12.7% from F22
Strong EBIT growth in Australian Food, Australian
B2B and BIG W in F23 was partly offset by lower
EBIT from New Zealand Food and higher net costs
in the Other segment.
Finance costs increased in F23 largely due to the
impact of higher interest rates on bank debt and
higher average net debt during the year.
Final dividend per share
58₵
9.4% from F22
Fully franked final dividend of 58 cents per share,
an increase of 9.4% reflecting profit growth
during the year.
NPAT from continuing operations
attributable to equity holders
of the parent entity after significant items
$1,618M
4.6% from F22
NPAT from continuing operations attributable to equity
holders of the parent entity after significant items
increased by 4.6% in F23.
24
Group financial performance
Group profit or loss for the 52 weeks ended 25 June 2023
Group balance sheet as at 25 June 2023
$ MILLION
Inventories
Trade payables
Net investment in inventory
Trade, other receivables and prepayments
Other creditors, provisions and other liabilities
25 JUNE 2023
26 JUNE 2022
CHANGE
3,698
(5,621)
(1,923)
1,319
(4,559)
3,593
(5,216)
(1,623)
1,203
(4,358)
Fixed assets, investments, loans to related parties and convertible notes
10,082
10,000
Net assets held for sale or distribution
Intangible assets
Lease assets
Other assets
Total funds employed
Net tax balances
Net assets employed
Cash and borrowings
Derivatives
Net debt (excluding lease liabilities)
Lease liabilities
Total net debt
Put option over non-controlling interest
Net assets
Non-controlling interests
Shareholders’ equity
Total equity
250
5,693
9,467
413
20,742
1,248
21,990
(2,620)
(60)
(2,680)
(11,980)
(14,660)
(765)
6,565
140
6,425
6,565
266
5,278
9,995
425
21,186
1,325
22,511
(3,260)
(46)
(3,306)
(12,471)
(15,777)
(630)
6,104
124
5,980
6,104
105
(405)
(300)
116
(201)
82
(16)
415
(528)
(12)
(444)
(77)
(521)
640
(14)
626
491
1,117
(135)
461
16
445
461
KEY RATIOS – BEFORE SIGNIFICANT ITEMS
Closing inventory days (based on cost of sales) 1
Closing trade payable days (based on cost of sales) 1
Group ROFE (%)
28.6
(43.6)
14.9
29.2
(42.3)
13.7
(0.6)
(1.3)
1.2 pts
1 F22 restated to reflect the reclassification of DC costs from CODB to gross margin and reclassification of eCom overheads from gross
margin to CODB.
$ MILLION
Group
EBITDA before significant items
Depreciation and amortisation 1
EBIT before significant items
Finance costs
Income tax expense
NPAT before significant items
Non-controlling interests
NPAT attributable to equity holders of the parent entity before
significant items
Significant items after tax
NPAT from continuing operations attributable to equity holders
of the parent entity after significant items
NPAT from discontinued operations attributable to equity holders
of the parent entity after significant items
NPAT attributable to equity holders of the parent entity after
significant items
MARGINS – CONTINUING OPERATIONS BEFORE SIGNIFICANT ITEMS
Gross margin (%) 2
Cost of doing business (CODB) (%) 2
EBIT (%)
SUSTAINABILITY
Scope 1 & 2 emissions (tonnes) 3
EARNINGS PER SHARE AND DIVIDENDS
Closing fully paid ordinary shares outstanding (million) 4
Weighted average number of ordinary shares used in basic EPS (million)
Total Group basic EPS (cents) before significant items
Total Group basic EPS (cents) after significant items
Total Group diluted EPS (cents) after significant items
Basic EPS (cents) – from continuing operations before significant items
Basic EPS (cents) – from continuing operations after significant items
Diluted EPS (cents) – from continuing operations before significant items
Diluted EPS (cents) – from continuing operations after significant items
Final dividend per share 5 (cents) – fully franked
Total dividend per share (cents) – fully franked
F23
F22
CHANGE
5,694
(2,578)
3,116
(677)
(707)
1,732
(11)
1,721
(103)
5,051
(2,361)
2,690
(600)
(566)
1,524
(10)
1,514
33
1,618
1,547
–
6,387
12.7%
9.2%
15.8%
12.7%
24.9%
13.7%
6.8%
13.7%
n.m.
4.6%
n.m.
1,618
7,934
(79.6)%
26.8
21.9
4.8
26.2
21.8
4.4
51 bps
8 bps
43 bps
1,941,581
2,117,157
(8.3)%
1,214.7
1,214.3
141.7
133.3
132.3
141.7
133.3
140.7
132.3
58
104
1,209.1
1,221.5
124.0
649.6
644.8
124.0
126.7
123.1
125.7
53
92
0.5%
(0.6)%
14.3%
(79.5)%
(79.5)%
14.3%
5.2%
14.3%
5.2%
9.4%
13.0%
1 Depreciation of $269 million is included in cost of sales (F22: $229 million).
2 F22 gross margin and cost of doing business restated primarily to reflect the reclassification of distribution centre costs from CODB
to gross margin and reclassification of eCom support costs and overheads from gross margin to CODB.
3 F23 & F22 emissions data reflect market-based scope 2 electricity reporting. F22 has been restated to also reflect new guidance from the
Clean Energy Regulator for treatment of Australian Carbon Credit Units. Further details of the emissions profile are available in the 2023
Sustainability Data Pack.
Includes the fully paid ordinary shares on issue of 1,218.7 million (F22: 1,213.9 million), net of shares held in trust of 4.0 million (F22: 4.8 million).
4
5 The 2023 final dividend is payable on or around 27 September 2023.
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26
Group financial performance
Inventories of $3,698 million increased by $105 million
compared to the prior year due to inflation on the cost
of goods, better availability as supply chains recovered,
and higher PFD inventory driven by revenue growth.
BIG W inventory was marginally higher than the prior year.
Closing inventory days decreased 0.6 days reflecting the
gradual reduction in inventory holdings as supply chains
normalise but average inventory days increased by 1.1 days
due to inflation and increased investment in inventory
over the year.
Trade payables of $5,621 million increased by $405 million
driven by inflation on goods purchased across all
businesses, partly offset by a reduction in BIG W payables
from reduced inventory purchases in Q4 to reflect
lower sales.
Trade, other receivables and prepayments
of $1,319 million increased by $116 million largely
driven by the timing of receipts and revenue growth
in PFD and Quantium as well as growth in Everyday
Insurance receivables.
Other creditors, provisions and other liabilities
of $4,559 million increased by $201 million driven mainly
by an increase in employee-related accruals due to timing
and team salary and wages growth.
Fixed assets, investments, loans to related parties and
convertible notes of $10,082 million was largely in line
with the prior year. Investment in new stores, property
development, and refurbishments of existing stores was
partly offset by a reduction in the Group’s investment
in Endeavour Group by $630 million following the sale
of a 5.5% stake in December 2022.
Intangible assets of $5,693 million increased by
$415 million following the recognition of intangibles
assets on the acquisitions of MyDeal and Shopper Media.
Lease assets of $9,467 million decreased by $528 million
driven by lease asset depreciation of $1,066 million, partially
offset by lease asset additions and remeasurements
of $559 million.
Total funds employed decreased by $444 million, due
to higher payables and a decrease in lease assets, partly
offset by an increase in inventory and intangible assets
driven by the acquisitions of MyDeal and Shopper Media.
Net debt (excluding lease liabilities) of $2,680 million
decreased by $626 million compared to F22 driven
by higher operating cash flows and the proceeds from
the sale of shares in Endeavour Group, partially offset
by the cash outflow associated with acquisitions.
Lease liabilities of $11,980 million decreased by
$491 million due to lease payments of $1,609 million,
partially offset by interest expense of $542 million and
new leases and remeasurements of $556 million.
Put option liabilities of $765 million increased
by $135 million mainly driven by the recognition of a put
option liability on acquisition of MyDeal of $79 million,
and an upward revaluation of $41 million driven
by higher than forecast earnings.
Group ROFE was 14.9%, an increase of 1.2 pts
compared to F22 largely due to higher Group EBIT
from continuing operations.
Group cash flows for the 52 weeks ended 25 June 2023
$ MILLION
Group EBITDA – continuing operations
Group EBITDA – discontinued operations
Group EBITDA
Working capital and non-cash
(Increase) in inventories
Increase in trade payables
(Decrease)/increase in provisions
Net change in other working capital and non-cash
Net change in working capital and non-cash – discontinued operations
Cash from operating activities before interest and tax
Interest paid – leases
Net interest paid – non-leases
Tax paid
F23
5,577
–
5,577
(119)
371
(37)
224
–
6,016
(542)
(133)
(587)
F22
CHANGE
5,052
6,387
11,439
(343)
165
175
(232)
(6,387)
4,817
(542)
(59)
(838)
10.4%
n.m.
(51.2)%
(65.3)%
124.8%
n.m.
n.m.
n.m.
24.9%
–
125.4%
(30.0)%
40.7%
Total cash provided by operating activities
4,754
3,378
Proceeds and advances from the sale of property, plant and equipment,
subsidiaries and investments, net of cash disposed
Payments for the purchase of property, plant and equipment and
intangible assets
Payments for the purchases of businesses net of cash acquired
Other
Total cash used in investing activities
Repayment of lease liabilities
Dividends paid (including to non-controlling interests)
Proceeds from loan to related party
Payments for share buy-backs
Payments for shares held in trust
Net cash flow
Cash realisation ratio (%)
1,020
385
165.2%
(2,519)
(2,416)
(373)
28
(425)
(1)
4.3%
(12.2)%
n.m.
(1,844)
(2,457)
(24.9)%
(1,067)
(1,031)
–
–
(110)
702
113
(1,019)
(1,012)
1,712
(2,000)
(125)
(1,523)
86 1
4.7%
1.9%
n.m.
n.m.
(12.0)%
n.m.
1 F22 adjusted for non-cash gain on demerger of Endeavour Group of $6,387 million. F22 unadjusted CRR was 33%.
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Group financial performance
EBITDA from continuing operations increased 10.4%
to $5,577 million reflecting higher EBITDA from Australian
Food, BIG W and Australian B2B, offset by lower EBITDA
from New Zealand Food and the Other segment.
Net interest paid – non-leases was $133 million,
an increase of $74 million compared to the prior year
due to the higher floating interest rates and higher
average net debt during the year.
Increase in inventories of $119 million was due to higher
inventory holdings across the Group reflecting the impact
of inflation. The increase was lower than the prior year
increase of $343 million where inventory holdings were
increased in Australian Food and New Zealand Food
to better manage supply chain disruption.
Increase in trade payables of $371 million reflects higher
purchases largely driven by inflation.
Decrease in provisions of $37 million reflects the cash
remediation of team members as well as the BIG W
onerous contract provision reversal. In the prior year,
the increase of $175 million reflected remediation costs
and self-insurance.
Net change in other working capital and non-cash
was an increase of $224 million primarily due to the
non-cash revaluation of put option liabilities, a decrease
in other receivables and an increase in the impairment
of non-financial assets.
Cash from operating activities before interest and tax
was $6,016 million, an increase of 24.9% or $1,199 million
on the prior year, driven by increased EBITDA and
favourable net working capital movements.
Interest paid – leases of $542 million was in line with
the prior year.
Tax paid decreased 30.0% compared to the prior year
primarily driven by lower taxable income for F22, paid in F23.
Proceeds and advances from the sale of property,
plant and equipment, subsidiaries and investments,
net of cash disposed was $1,020 million. The increase in
proceeds compared to the prior year was largely because
of the sale of 5.5% of Endeavour Group in December.
Payments for the purchase of property, plant and
equipment and intangible assets of $2,519 million
increased by 4.3% compared to the prior year primarily
due to an increase in property development expenditure
and stay-in-business capital expenditure.
Payments for the purchase of businesses, net of cash
acquired of $373 million relates mainly to the acquisition
of an 80.2% equity interest in MyDeal and 100% interest
in Shopper Media.
Dividends paid (including to non-controlling interests)
of $1,031 million increased by 1.9% compared to the prior
year primarily due to an increase in the interim dividend
per share, partially offset by a decline in shares on issue
for the final dividend payment.
The cash realisation ratio for F23 was 113% (F22: 86% 1)
with favourable net working capital movements and lower
cash tax paid compared to the current year’s tax expense.
Capital management
Non-IFRS Financial information
Capital management objectives
The Group manages its capital structure with the
objective of enhancing long-term shareholder value
through funding its business at an optimised weighted
average cost of capital.
The Group remains committed to solid investment
grade credit ratings. The Group’s credit ratings are BBB
(stable outlook) according to Standard & Poor’s and
Baa2 (stable outlook) according to Moody’s.
Financing transactions during F23
During F23 the Group refinanced or extended $1.9 billion
of bilateral and syndicated bank debt facilities to new
tenors ranging from 12 months to five years. These
facilities are used to manage the Group’s short term
cash flow requirements and support its liquidity position.
Upcoming maturities and transactions
The Group has $400 million of domestic medium-term
notes maturing in April 2024, which will be refinanced
or repaid from existing committed undrawn bank
facilities before maturity.
The 2023 Annual Report for the 52 weeks ended
25 June 2023 contains certain non-IFRS financial
measures of historical financial performance, balance
sheet or cash flows.
Non-IFRS financial measures are financial measures
other than those defined or specified under all
relevant accounting standards and may not be directly
comparable with other companies’ measures but are
common practice in the industry in which Woolworths
Group operates. Non-IFRS financial information should
be considered in addition to, and is not intended to be
a substitute for, or more important than, IFRS measures.
The presentation of non-IFRS measures is in line with
Regulatory Guide 230 issued by the Australian Security
and Investments Commission in December 2011 to
promote full and clear disclosure for investors and
other users of financial information and minimise the
possibility of being misled by such information.
These measures are used by management and the
directors as the primary measures of assessing the
financial performance of the Group and individual
segments. The directors also believe that these non-IFRS
measures assist in providing additional meaningful
information on the underlying drivers of the business,
performance and trends, as well as the financial
position of the Woolworths Group. Non-IFRS financial
measures are also used to enhance the comparability
of information between reporting periods (such as
comparable sales), by adjusting for non-recurring
or uncontrollable factors which affect IFRS measures,
to aid the user in understanding the Woolworths Group’s
performance. Consequently, non-IFRS measures are
used by the directors and management for performance
analysis, planning, reporting and incentive setting
purposes and have remained consistent with the prior
year. Non-IFRS measures are not subject to audit
or review.
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Business review
Sales
$48,047M
5.0% from F22
EBIT
$2,865M
19.1% from F22
ROFE
29.0%
4.1 pts from F22
Australian
Food
The performance of Australian Food in F23 reflects
a return to a more normal post-COVID operating
environment and improving stability across our
supply chain.
Trading performance
Australian Food sales increased 5.0% in F23 to $48.0 billion (4-yr CAGR: 5.8%)
driven by an increase in Woolworths Food Retail sales of 4.8% (4-yr CAGR:
5.7%), with H2 growth reflecting inflation, items returning to modest growth
from Q3, and eCom sales growth. WooliesX sales increased 3.9% with Direct
to boot and Same Day propositions driving online growth. Accelerators
revenue grew 236.5% compared to the prior year largely reflecting the growth
in sub-60 minute delivery.
Gross margin (%) increased 76 bps to 28.1% (H1: +78 bps; H2: +73 bps). Excluding
COVID costs in the prior year, gross margin increased 54 bps (H1: +51 bps;
H2: +55 bps). Growth was driven by category mix benefits, including a 16%
decline in Tobacco sales which contributed 16 bps to the increase; improved
promotional effectiveness supported by the Next Gen Promotions decision
tool; and growth from Cartology and Shopper Media. This was partly offset
by stockloss driven by higher rates of theft and increased Everyday Rewards
investment. To address rising stockloss, Scan Assist,
technology to support accurate scanning, has been
rolled out to 474 supermarkets by the end of the year.
CODB (%) increased 6 bps to 22.1%. Excluding direct
COVID costs incurred in the prior year, CODB increased
29 bps (H1: +43 bps; H2: +15 bps). H2 CODB % (excluding
COVID costs) reflects a return to a more consistent
operating rhythm, improved unit-based productivity
combined with the benefit of higher sales growth.
This was offset by inflation in team wages, depreciation
and amortisation, energy prices as well as business
growth initiatives.
Depreciation and amortisation increased 9.0% driven
by new stores, renewals, supply chain and shorter-life
digital investments.
F23 EBIT increased 19.1% to $2.9 billion (4-yr CAGR: 8.4%).
Excluding direct COVID costs incurred in the prior year
of $211 million, EBIT increased 9.5%.
Funds employed decreased 4.6% compared to F22
largely due to an increase in trade payables driven
by inflation, offset by investment in new stores, renewals,
eCom, supply chain and Shopper Media. ROFE increased
by 4.1 pts to 29.0% reflecting the EBIT increase.
$ MILLION
Total sales
EBITDA
Depreciation and
amortisation
EBIT
EBIT excluding direct
COVID costs
Gross margin (%)
CODB (%)
EBIT to sales (%)
Funds employed
ROFE (%)
F23
F22 1
CHANGE
48,047
4,651
45,740
5.0%
4,044
15.0%
(1,786)
2,865
(1,638)
9.0%
2,406
19.1%
2,865
2,617
9.5%
28.1
22.1
6.0
9,647
29.0
27.4
22.1
76 bps
6 bps
5.3
70 bps
10,117
(4.6)%
24.9
4.1 pts
Scope 1 & 2 emissions
(tonnes) 2
1,546,804
1,687,757
(8.4)%
1 Prior period restated to reflect Woolworths at Work.
2 F23 & F22 emissions data reflect market-based scope 2
electricity reporting. F22 has been restated to also reflect new
guidance from the Clean Energy Regulator for treatment of
Australian Carbon Credit Units.
Continuing to strengthen
our own brand range
Throughout the year, Woolworths Food
Company (WFC) continued to evolve
and differentiate its portfolio to provide
customers with great value through
affordable, quality products. WFC is
organised into three key portfolios with
quality and value at the centre of product
innovation. These portfolios include,
Woolworths Fresh Solutions (fresh
brands such as COOK, BBQ, Thomas
Dux), Woolworths Food & Exclusive
Brands (long life and grocery brands),
and Macro Wholefoods (health brand).
In F23, WFC launched 1,500 products
that were redesigned, reformulated
or new to the market and was ranked
Australia’s healthiest own brand for the
fourth consecutive year. As customers
continue to be impacted by cost-of-living
pressures, more customers are turning
to own brand products to improve the
value of their basket, with Pantry, Drinks
and Baby products showing strong
growth in F23.
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Business review
Woolworths Food Retail (Stores and eCom)
Trading performance
Customer metrics improved compared to Q3 with VOC
NPS (Store and Online) improving three points to 49,
and Store-controllable VOC improving two points to
78%. Higher scores reflect improved availability in store
and online, and improved Fruit & Vegetables supply.
Value for Money scores also stabilised compared
to Q3. Compared to F22, VOC NPS was flat and
Store-controllable VOC was up three points reflecting
improved availability as stock flows stabilised and higher
Fruit & Veg scores reflecting lower prices and quality.
Woolworths Food Retail sales in F23 increased 4.8%
(6.3% ex Tobacco) or 5.7% on a 4-yr CAGR (6.8% ex
Tobacco) with comparable sales for the year increasing
4.2% (5.6% ex Tobacco). After an increase of 2.5% in H1
(3.8% ex Tobacco) impacted by cycling COVID-driven
in-home consumption and supply challenges in
Fruit & Vegetables; sales increased by 7.4% (9.1% ex
Tobacco) in H2 with strong growth nationally across all
store segments (Value, Core, UP) with volume growth
strongest in UP stores. H2 sales growth was driven
by sustained inflation associated with elevated levels
of supplier cost increases and total items returning
to growth from mid-January. Shelf price inflation
moderated in Q4 compared to Q3 but remained elevated
due to industry-wide cost pressures.
Woolworths Supermarkets (store-originated) sales for
the year were $41.4 billion, an increase of 4.7% (6.3%
ex Tobacco) on the prior year. eCom sales increased
2.9% to $5.1 billion with sales penetration of 10.7%.
Woolworths Supermarkets (store-originated) sales
growth increased by 6.3% (8.0% ex Tobacco) in H2 and
eCom sales returned to strong growth of 13.2%.
Average prices in Q4 increased by 5.2% compared to the
prior year, below the Q3 increase of 5.8%. Lower prices
were passed on to customers as growing conditions
improved in Fruit & Vegetables, and lower beef and lamb
livestock prices, contributed to the moderation with both
Fruit & Vegetables and Meat in deflation in the quarter.
Metro Food Stores (store-originated) sales increased
by 21.6% to $1,156 million assisted by the opening of five
new Neighbourhood stores and a recovery in customer
mobility supporting On the Go stores.
$ MILLION
Total sales
EBITDA
Depreciation and
amortisation
EBIT
F23
F22 1
CHANGE
47,648
45,445
4.8%
4,550
3,982
14.3%
(1,712)
(1,583)
8.1%
2,838
2,399
18.3%
EBIT to sales (%)
6.0%
Sales per square metre ($) 2 18,921
5.3% 68 bps
18,364
3.0%
1 Prior period restated to reflect Woolworths at Work.
2 Prior year sales per square metre has been restated to conform
to the current year’s presentation of sales channel.
Healthier choices at our checkouts
As part of our commitment to making healthy eating easier
we have removed kids confectionery from all checkouts
nationally to help customers access healthier options.
Customers will now see healthier and more affordable
food choices at checkouts with at least 80% of products
having a Health Star Rating of 3.5 stars or above on the
Government’s Health Star Rating system. This initiative
is part of our broader program to help make healthier
alternatives more prominent across the store, including
featuring healthier products on promotional aisle ends,
in addition to Health Star Ratings on own brand products,
as well as Free Fruit for Kids across all of our stores.
Woolworths Food Company’s own and exclusive sales
grew 5.4% in F23 with a strong sales increase in H2.
H1 growth was impacted by availability issues in Fruit
& Vegetables and Meat with H2 growth of 9.1% driven
by strong item growth of 3.2% particularly across protein,
chiller, and pantry categories; and inflation. Customers
increasingly traded into own brand to improve the value
of their basket with Pantry essentials, Drinks such as long
life milk, and baby products showing particularly strong
growth. On a 4-yr CAGR, own and exclusive brand sales
increased by 8.3%.
Woolworths Food Company’s Retail business introduced
over 1,5001 new products in the year including further
rollout of the Macro protein range, Macro carbon neutral
eggs, and new bakery products to provide value to
customers. Fresh meal solutions brands such as COOK
and BBQ also continued to resonate with customers.
As cost-of-living pressures continued to impact customer
budgets, we continued to deliver value through the Get
your Woolies worth platform. This included four seasonal
and a Christmas Prices Dropped campaign; a Christmas
price freeze, more than 3,000 products on Low Price;
and personalised member offers and benefits through
Everyday Rewards. At the end of the year, categories
that account for half of Woolworths Supermarkets sales
were curated by Value, Core and UP with an increased
emphasis on value ranges and fresh categories.
Woolworths Food Retail’s sales per square metre
increased by 3.0% with sales growth higher than average
space growth of 1.9%. During the year 10 net new stores
were opened, 43 renewals were completed and 28 Mini
Woolies opened. At the end of the year, the total fleet
comprised 1,002 Woolworths Supermarkets, 93 Metro
Food Stores, 708 Direct to boot locations, seven CFCs,
two eStores and 41 Mini Woolies.
Woolworths Food Retail EBIT increased by 18.3%
to $2,838 million with the EBIT margin increasing 68 bps
to 6.0%.
During the year, Woolworths continued to tackle food
waste with 80% of food waste diverted from landfill
in F23 and over 300,000 tonnes of food waste saved
by our Odd Bunch program since its launch in 2015.
Kids confectionery was removed from checkouts in all
supermarkets with 80% of snacks at checkouts with
a Health Star Rating of 3.5 or above to help make it easier
for customers to access healthier food choices
1
Includes redesigned, reformulated, and new to market.
Launch of new
in store Proactive
Services business
In September 2022, Woolworths
Supermarkets and Woolworths 360
launched Proactive Services, which
brings in-house a team dedicated to store
cleaning, trolley collection and waste
management. Proactive Services, now
rolled out to 69 stores, aims to create
better experiences for customers through
improvements to the quality of services
in store, as well as provide more career
opportunities for our team to grow their
skills. Since its launch, the Proactive
Services team employed more than 800
new team members in F23, with a further
3,000 new team members expected
in F24, and around 10,000 new team
members once the program has been
rolled out across the Group. To date,
the program has delivered improvements
to VOC store presentation and trolley
availability metrics, as well as an
improvement in VOT advocacy scores
in the relevant stores.
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Business review
WooliesX (including eCom)
WooliesX comprises three platform businesses – eCom
(B2C eCom & Woolworths at Work), Digital & Media
including owned digital assets and media (Cartology
and Shopper Media) and Rewards & Services. Rewards
& Services includes Everyday Rewards, Everyday
Insurance, wPay and Everyday Mobile. eCom’s operating
profit is measured using DAP which includes costs
directly-attributable to the eCom business. DAP includes
costs such as picking, packing and delivery; marketing
costs; all eCom support costs; and variable DC costs.
DAP does not include an allocation of costs that are not
directly attributable to the eCom business and would
exist regardless of eCom activity. EBIT is used to measure
the profitability of the other businesses in WooliesX.
Trading performance
WooliesX total sales increased 5.6% in F23 to
$6,432 million, driven primarily by growth in Digital
& Media and Rewards & Services. DAP & EBIT increased
23.1% to $181 million reflecting strong sales growth and
improvements in productivity across all platforms with
the DAP & EBIT margin increasing by 40 bps to 2.8%.
eCom sales increased 2.9% in F23 to $5,079 million,
with eCommerce penetration reaching 11.4% in Q4,
an increase of 97 bps on the prior year. Strong demand
for convenience in H2 with sales growth of 13.2%
more than offset lower H1 sales due to cycling the
COVID-impacted prior year. Woolworths at Work sales
increased 29% on the prior year and was strong across
all quarters driven by increased customer acquisition.
B2C VOC NPS ended the year at 60, up four points
on Q3 and two points on the prior year, with
customer scores improving across all propositions
reflecting improvements in on-time deliveries, order
completeness and increased care for Pick up orders
(Direct to boot and in store). Active eCom customers
also grew 9% on the prior year to 0.9 million, above peak
COVID levels and with a higher share of loyal shoppers.
B2C customer demand for convenience continued
to increase with significant growth in Same Day
and on-demand delivery propositions. In June, over
80% of orders were fulfilled within 24 hours of order
placement, an increase of eight points compared to the
prior year enabled by improved fulfilment capabilities.
eCom DAP declined marginally on the prior year with
a 43.6% reduction in H1 offset by a strong recovery
in H2 with DAP growth of 68.9%. The H2 increase was
driven by sales growth, and efficiencies unlocked
by productivity initiatives including order pick
optimisation and delivery truck route efficiency.
Direct to boot is now available in 708 stores with
a further 81 sites added during the year, and two new
CFCs opened in Rochedale, Qld and Caringbah, NSW.
The Group’s commitment to an electric home delivery
fleet by 2030 was further progressed with 27 electric
vehicles added to the fleet in F23.
In Digital & Media, digital engagement continued
to grow with average weekly traffic to the Food
and Everyday digital platforms reaching 16.3 million
weekly visits in Q4, up 21.3% on the prior year.
The increased engagement was largely driven
by the Everyday Rewards and Woolworths apps
with weekly active users increasing by 42% and 36%
respectively. Weekly average traffic to Group digital
platforms reached 23.7 million in Q4, up 21.1% on the
prior year also due to growth in apps. Customers
are increasingly using digital platforms to save by
accessing personalised specials and using shopping
lists to manage their budgets with shopping list users
up 26% on prior year. Our new Real Time Loyalty
Platform, launched in September, has materially
increased the number of offers and content in real
time as well as enabling faster analysis of campaigns
to support more targeted member engagement.
Despite a more challenging environment for marketing
investment in F23, Cartology revenue increased by 29%
(including Shopper) supported by strong momentum in
the Food business and the launch of Cartology in BIG W.
Rewards & Services platform sales increased by 12.9%
in F23. Everyday Rewards members reached 14.5
million by the end of the year, reflecting the continued
focus on delivering personalised value, real time
loyalty improvements and enhancements to the
Everyday Rewards app. Member engagement and app
usage reached record levels in F23 with scan rates
and tag rates increasing 1.7 and 2.0 pts respectively.
Other highlights include the rebranding of Everyday
Insurance (from Woolworths Insurance) in February
2023 with the rebranding of Everyday Mobile taking
place in Q1 F24.
$ MILLION
Total sales
DAP & EBIT before
depreciation and
amortisation
Depreciation and
amortisation
DAP & EBIT
DAP & EBIT to sales (%)
F23
F22
CHANGE
6,432
6,090
5.6%
340
261
30.0%
(159)
(114)
38.9%
181
2.8
147
2.4
23.1%
40 bps
DAP & EBIT performance by platform
F23
89
F22
CHANGE
93
(4.9)%
$ MILLION
Q4’23
Q3’23
Q2’23
Q1’23
60
56
59
60
$ MILLION
eComX DAP
Digital & Media (idX/
Cartology), Rewards &
Services (EverydayX)
and TechX & Support EBIT
WooliesX DAP & EBIT
eCom metrics
Customer metrics
B2C Online VOC
NPS
eCommerce sales
metrics 1
eCommerce sales
($ million)
eCommerce sales
growth
eCommerce
penetration
Pick up mix (% of
eCommerce sales)
1,248
1,300
1,214
1,316
since inception.
17.2%
9.7%
(1.3)%
(9.6)%
11.4%
10.6%
10.0%
10.8%
39.4%
38.6%
37.4%
36.3%
Digital metrics
$ MILLION
Q4’23
Q3’23
Q2’23
Q1’23
Food and Everyday
digital platforms
Average weekly
traffic (million)
Average weekly
traffic growth
(year on year)
Group digital
platforms
Average weekly
traffic (million)
Average weekly
traffic growth
(year on year)
16.3
15.7
16.1
14.0
21.3% 28.4% 22.4%
4.0%
23.7
23.1
25.3
20.2
21.1% 27.6% 19.8% (0.5)%
$ MILLION
Q4’23
Q3’23
Q2’23
Q1’23
Total Everyday
Rewards members
(million) 2
Scan rate
(% of transactions)
Tag rate (% of sales)
14.5
14.3
14.1
13.9
55.7
69.2
54.9
68.8
54.5
68.2
53.9
67.1
1 eCom includes B2C and Woolworths at Work.
2 Total number of members that have joined the program
92
181
54
147
70.9%
23.1%
Everyday Rewards metrics
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Continued investment in our eCom network
Two new customer fulfilment centres (CFCs) were opened in F23
in Rochedale, Qld and Caringbah, NSW, as part of our multi-year
expansion plan of our eCommerce network. Both CFCs are located
within 30 kilometres of both Sydney and Brisbane CBD and aim
to service the growing demand for online grocery shopping
within these inner-city areas. Rochedale was the first CFC within
the national network to offer Direct to boot, with the service also
launched at Caringbah CFC in July 2023, supporting increased
capacity for Same Day delivery, Pick up, and delivery windows
for growing online demand.
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36
Business review
Sales
$4,324M
17.4% from F22
EBIT
$63M
13.0% from F22
ROFE 1
5.0%
83 bps from F22
1 F22 ROFE has been calculated
based on the average of mid
and closing funds employed.
Australian
B2B
B2B Food and B2B Supply Chain continued to deliver
growth in F23.
Australian B2B comprises B2B Food and B2B Supply Chain. B2B Food reflects the
third-party sales and profit of Woolworths Food Company which includes PFD,
Australian Grocery Wholesalers and Greenstock. B2B Food does not include the
sales and EBIT contribution from Woolworths Food Company’s own and exclusive
retail brands and Greenstock’s internal meat sales as this is reported in the
Australian Food segment. B2B Supply Chain comprises the Primary Connect 3rd
party business (PC+) which primarily provides transport services to Woolworths
suppliers and Endeavour Group, and Statewide Independent Wholesalers (SIW)
in Tasmania. B2B Supply Chain only includes the sales and EBIT contribution for
third-party supply chain services and not for supply chain services provided
to Woolworths Group businesses.
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$ MILLION
Total sales
EBITDA
Depreciation and
amortisation
EBIT
EBIT to sales (%)
Funds employed
ROFE (%) 2
Scope 1 & 2 emissions
(tonnes) 3
F23
F22 1
CHANGE
4,324
3,684
176
154
17.4%
14.8%
(113)
63
1.5%
1,286
5.0
(98)
56
15.8%
13.0%
1.5% (6) bps
1,280
0.5%
4.2
83 bps
73,585
78,483
(6.2)%
Sales performance by business
$ MILLION
B2B Food
B2B Supply Chain
Total Australian B2B sales
F23
F22 1
CHANGE
3,126
1,198
4,324
2,599
1,085
3,684
20.3%
10.4%
17.4%
1 Prior period restated to exclude Woolworths at Work which has
moved to Australian Food.
2 F22 ROFE has been calculated based on the average of mid and
closing funds employed.
3 F23 & F22 emissions data reflect market-based scope 2
electricity reporting. F22 has been restated to also reflect
new guidance from the Clean Energy Regulator for treatment
of Australian Carbon Credit Units.
new business wins, and the impact of inflation. PFD growth
was somewhat offset by lower AGW sales which declined
due to a reduction in unprofitable wholesale meat sales.
The sale of Summergate was completed in April 2023 and
the International business received final sales orders from
customers in Q4.
B2B Supply Chain sales increased by 10.4% to $1,198 million
with growth largely driven by new customers and fuel price
increases. PC+ delivered strong sales and EBIT growth in F23.
Primary Connect’s multi-year supply chain
transformation program is progressing to plan. During
the year, Auckland Fresh DC continued to ramp up since
its launch in June 2022, and MSRDC and Melbourne
Fresh DC in Victoria saw improved performance as the
sites mature, achieving consistent cartons per week of
2.4 million and 1.4 million respectively. In Q4, PC+ opened
three cross dock locations to create an east coast
temperature controlled commercial network to support
new customers into the network with an emphasis on
chilled and freezer capacity.
Development of key projects remain on track, including
the Moorebank precinct, which is transitioning to
commissioning and testing phase, with the National
DC on track for launch in H1 F25. The Auburn eCom
fulfilment centre is also on track to open in late 2024.
Trading performance
Australian B2B total sales increased by 17.4% to $4,324
million in F23 with B2B Food and B2B Supply Chain both
delivering strong sales growth.
EBITDA, which excludes the impact of the amortisation
of PFD intangibles, increased by 14.8% to $176 million.
Strong profit growth from PFD was offset by higher
losses and sale and exit costs related to Summergate
in China and the wind down of Woolworths International.
Depreciation and amortisation increased 15.8% and
was impacted by $7 million of accelerated depreciation
related to the wind down of Woolworths International
and higher depreciation on PC+ supply chain assets.
EBIT increased by 13.0% to $63 million at an EBIT
margin of 1.5%. EBIT includes $42 million of losses
(F22: $(6) million) and one-off costs associated with
the exit of Summergate, Woolworths International and
Fresh to Go. Excluding these costs in both years, the EBIT
margin would have increased from 1.9% in F22 to 2.7%
in F23.
B2B Food sales increased by 20.3% to $3,126 million
driven by strong PFD sales growth. PFD’s sales momentum
continued throughout the year due to higher demand from
its customers as the consumer environment normalised,
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AGW partnership
A new partnership agreement was
signed in F23 between our food
wholesale business, Australian Grocery
Wholesalers, and remote store operator
Community Enterprise Queensland (CEQ)
to better serve remote local communities.
Under the agreement, the partnership
brings Woolworths products to
CEQ’s extensive network of remote
stores across Far North Queensland,
the Torres Strait and Palm Island.
38
Business review
Sales
$7,912M
4.6% from F22
EBIT
$249M
21.0% from F22
ROFE
5.2%
1.8 pts from F22
New Zealand
Food
The performance of New Zealand Food in F23 reflects
a more challenging operating environment. Despite
this, the business made good progress on laying the
foundations for the future.
Trading performance
New Zealand Food’s customer metrics ended F23 up on the prior year despite
a dip in Q3 due to adverse weather events affecting availability, and the impact
of market-wide inflation and cost-of-living pressures on value perception.
A recovery in availability as H2 progressed led to the highest Availability
score since July 2021 with improvements in the customer experience also
contributing. VOC NPS (Store and Online) increased two points on Q3 and the
prior year to 39. Store-controllable VOC increased three points on Q3, and one
point compared to the prior year.
New Zealand Food’s total sales increased by 4.6% in F23 to $7,912 million
(4-yr CAGR: 4.8%). H1 total sales increased 1.3% despite cycling elevated sales
driven by COVID lockdowns in the prior period with a decline in items offset by
higher inflation. In H2, sales increased by 8.4% with Q4 total sales increasing
by 8.3% (comparable sales: 7.2%). Item declines during the half were more than
offset by inflation with item declines moderating in Q4 as availability began
to improve. Average prices in Q4 increased by 9.2% compared to Q4 F22,
a small reduction on the 9.5% increase in Q3.
FreshChoice and SuperValue sales increased by 0.8%,
with sales growth impacted by cycling COVID in the
prior year where sales benefitted from more customers
shopping locally. On a 4-yr CAGR, franchise store sales
have increased by 4.9%.
eCommerce sales declined 2.8% in F23 with penetration
decreasing 96 bps to 12.7% as customers returned to
in store shopping. On a 4-yr CAGR, eCommerce sales
have increased by 21.7% with penetration up 5.7 pts from
7.0% in F19. Online VOC NPS ended the year at 54, up four
points on Q3 and in line with the prior year. By the end
of F23, Drive solutions and eLockers had been rolled out
to 104 stores with Pick up at 42% of eCommerce sales.
Other digital highlights in F23 include strong growth
in Cartology, an increase in unique app users of 16.3%
and growth in Delivery Saver subscriptions, with 33,000
subscribers at the end of F23.
Sales per square metre increased by 1.8% reflecting
sales growth of 4.6%, offset by an increase in average
space of 2.7%. During the year three new stores and
one replacement store were opened, 12 renewals were
completed, two stores were permanently closed and
one replacement store was closed. At the end of the
year, the total store network of 263 stores comprised
191 Countdown stores, and 35 SuperValue and 37
FreshChoice franchise stores.
Gross margin (%) decreased by 9 bps in F23 to 23.1%.
In H1, gross margin was impacted by an increase in
costs primarily driven by freight, online delivery charges
and an increase in distribution centre costs, partly due
to the opening of the Auckland Fresh DC. Gross margin
in H2 increased by 26 bps to 23.4% driven by a focus on
promotional effectiveness, category mix benefits, and an
improvement in distribution centre cost management and
lower COVID costs. This was partially offset by stockloss.
CODB (%) increased by 94 bps primarily driven by higher
team member wages following the 12% increase in store
team wages in July 2022. H2 CODB (%) increased by 20 bps
with productivity initiatives, lower COVID costs and stronger
$ MILLION (NZD)
Total sales
EBITDA
Depreciation and
amortisation
EBIT
Gross margin (%)
CODB (%)
EBIT to sales (%)
F23
F22
CHANGE
7,912
7,563
4.6%
572
611
(6.3)%
(323)
(295)
9.5%
249
23.1
20.0
3.2
316
23.2
19.0
(21.0)%
(9) bps
94 bps
4.2 (102) bps
Sales per square metre ($)
18,208
17,881
Funds employed
4,745
4,635
1.8%
2.4%
ROFE (%)
5.2
7.0 (1.8) pts
Scope 1 & 2 emissions
(tonnes)
62,255
63,782
(2.4)%
Transformation of
Woolworths New Zealand
In July 2023, Countdown announced its
plans for a multi-year transformation
program, reaffirming the Group’s long-
term commitment to its New Zealand
customers. As part of the transformation,
Countdown will be rebranded to
Woolworths Supermarkets. The program
also includes a refreshed loyalty offer
through the roll out of Everyday Rewards
in early 2024, investment in the store
network, and a materially improved
fresh offer to create better experiences
for New Zealand customers and team.
The Bethlehem store in Tauranga was
the first to be rebranded in August 2023
sales momentum helping to partially offset the increase
in team wages. Other material cost increases included
a 9.5% increase in depreciation and amortisation arising
from investment in the store network, including spend
to facilitate eCommerce growth, investment in digital
capability and innovation, and supply chain transformation.
F23 EBIT declined 21.0% on the prior year to $249 million with
the EBIT margin down 102 bps to 3.2%. In H2, EBIT returned
to growth of 10.3% on the prior year with the EBIT margin
increasing 6 bps to 3.3%. Excluding direct COVID costs
of $61 million in the prior year, F23 EBIT declined by 34%.
ROFE declined 1.8 pts to 5.2%, primarily due to lower EBIT and
higher average funds employed due to investment in the store
network and the opening of the Auckland Fresh DC in F22.
Initiatives supporting our sustainability agenda included
fundraising support for communities impacted by adverse
weather events, including a support package of $750,000 for
fruit and vegetable growers impacted by Cyclone Gabrielle,
as well as the removal of approximately 50 million plastic
produce bags from circulation. During the year we launched
Sonder, a comprehensive health, safety and wellbeing app
for team members, and were proud to be awarded with
the New Zealand Safeguard Workplace Health and Safety
Wellbeing Award in recognition for our mental health and
wellbeing initiatives over the last two years.
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40
Business review
Sales
$4,785M
8.0% from F22
EBIT
$145M
165.3% from F22
ROFE
11.1%
6.5 pts from F22
BIG W
The trading environment for BIG W changed
significantly between the halves, impacting
financial performance. However, BIG W continued
to make good progress on its strategic agenda.
Trading performance
BIG W’s customer metrics remained broadly stable in F23 with Store-
controllable VOC at 83% – in line with Q3 and the prior year. VOC NPS (Store
and Online) ended the year at 62, down three points on Q3 and down two
points on the prior year driven by a decline in eCom NPS. Improving product
availability and wait times for Pick up and Home Delivery orders remains
a priority. Despite the pressure on consumer discretionary spend during the
year, BIG W’s continued focus on providing value to customers, including
the launch of new own brand ranges (Openook and Somersault), resulted
in Product and Price VOC improving by one point compared to the prior year.
BIG W’s total sales were up 8.0% in F23 to $4,785 million (4-yr CAGR: 6.5%).
Sales growth in H1 of 15.3% (4-yr CAGR: 6.9%) was driven by cycling the prior
year’s temporary store closures and customers returning to shop in store
more frequently. In H2, sales growth of -0.3% was broadly flat on prior year
(4-yr CAGR: 6.0%) with the decline in Q4 of 5.7% due to a notable softening
in discretionary spend and to a lesser extent by the timing of Easter. Everyday
Essentials including Health, Beauty & Baby and Pet Care categories; and
Leisure including Books, Electronic Gaming and Travel Goods continued
to see item growth but discretionary areas including Clothing and Home
were impacted by the rising cost of living on households.
eCommerce sales decreased 22.2% in F23 to $482 million,
largely driven by a 31.4% decline in H1 as customers
returned to shopping in store and cycling of COVID-driven
online purchasing behaviour. eCommerce sales declined
3.3% in H2 with penetration of 10.1%. The launch of a select
BIG W range on MyDeal in August has seen consistent
sales growth on the platform since launch.
The BIG W store network grew by one store during the
year to 177 stores following the opening of a new BIG W
in Q1 alongside a new Woolworths Supermarket at Town
Hall in Sydney. Sales per square metre increased by 7.9%
due to the strong sales growth in H1.
Gross margin (%) increased 9 bps in F23 to 31.6% driven
by an increase in H1 due to cycling higher markdowns
in the prior year and lower delivery costs due to the
decline in eCommerce sales. H2 gross margin (%)
decreased 87 bps with higher stockloss and increased
promotional activity being partly offset by mix and
category management changes.
CODB (%) declined by 170 bps due to higher sales
growth, the absence of direct COVID costs incurred
in the prior year, and key productivity measures
returning to pre-COVID levels. In H2, CODB (%) was
broadly flat despite higher wage rate increases due
to strong item-based cost control.
$ MILLION
Total sales
EBITDA
Depreciation and
amortisation
EBIT
Gross margin (%)
CODB (%)
EBIT to sales (%)
Sales per square metre ($)
Funds employed
ROFE (%)
Scope 1 & 2 emissions
(tonnes) 1
F23
F22
CHANGE
4,785
4,431
8.0%
348
245
41.6%
(203)
(190)
6.2%
145
31.6
28.6
3.0
4,756
1,424
11.1
55 165.3%
31.5
9 bps
30.3 (170) bps
1.2 180 bps
4,409
1,247
7.9%
14.2%
4.6
6.5 pts
103,061 125,533
(17.9)%
1 F23 & F22 emissions data reflect market-based scope 2
electricity reporting. F22 has been restated to also reflect
new guidance from the Clean Energy Regulator for treatment
of Australian Carbon Credit Units.
Despite a more challenging H2, F23 EBIT increased
165.3% to $145 million at an EBIT margin of 3.0% with
H2 EBIT declining 63.7% to $11 million. Excluding direct
COVID costs of $16 million in the prior year, F23 EBIT
increased by 104%.
Closing inventory was higher than the prior year with
cost inflation more than offsetting a reduction in units.
Despite the higher inventory, inventory health was strong
with the proportion of aged and quit stock below the
prior year.
ROFE increased 6.5 pts to 11.1% due to higher EBIT more
than offsetting an increase in average funds employed.
During the year, BIG W continued its partnership with the
Australian Literacy and Numeracy Foundation to grow
the Breakfast Library program, supporting 30 schools
each week, with over $220,000 raised in customer
donations during Book Week and the Back to School
campaign. In partnership with Good360, BIG W launched
a national fundraising campaign to support recovery
efforts for Victorian communities impacted by flooding
through donations of essential items to those in need.
BIG W’s commitment to a better tomorrow also saw its
Toys for Joy recycling program prevent an estimated
130 tonnes of toys going to landfill in F23.
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Two new own brand ranges
In F23, BIG W launched two new
own brands, Openook in Home, and
Somersault in Toys. The new Somersault
range is FSC certified with a great range
of toy products at entry level pricing.
All products in the range are designed
with diversity in mind and developed with
recyclable packaging and the use of FSC
timber. In F24, BIG W will expand the
Somersault brand into further categories,
such as kids stationery and craft.
42
Addressing
climate change
and nature together
Our approach
to reporting and
TCFD alignment
Woolworths Group will begin
reporting in line with the International
Sustainability Standards Board (ISSB)
from F24 to reflect our commitment
to transparency and the positive
direction of upcoming regulations.
Our F23 reporting aligns with the
recommendations of the Task Force on
Climate-Related Financial Disclosures
(TCFD), providing insight into our
strategy, governance, performance
and risk management. As we continue
to evolve our reporting, we will
leverage TCFD as a basis to transition
to the recently released ISSB. We
also intend to align to the upcoming
Taskforce on Nature-related Financial
Disclosures (TNFD).
For how we are aligning with
the TCFD recommendations,
see the Reports and Data
page on our website.
Australia and New Zealand are not
immune to climate change. As we
experience extreme weather events and
natural disasters, our business is feeling
the impacts of this first-hand, such as
food and supply chain disruptions from
severe weather events.
Woolworths Group supports the Paris Agreement,
which aims to pursue efforts to limit the global
temperature increase to 1.5̊ C above pre-industrial
levels. We aspire to reduce our emissions in line with
the Science Based Target Initiative (SBTi) and be a net
positive business by 2050 – partnering to remove more
carbon than we emit. The scale of our supply chain
has a material impact on climate and nature due to the
resources used to produce the food our customers
require. We are actively considering nature-based
solutions to help support our supply chain and
communities’ long-term viability.
Summary of our progress
towards net positive
Woolworths Group’s scope 1 and 2 emissions make up 6% of the
emissions in our end-to-end value chain. Over the last 12 months,
this has reduced by 8% through ongoing grid decarbonisation, energy
efficiency and refrigeration work, resulting in a cumulative reduction
of 36% from our 2015 baseline. We are on track to deliver 100%
renewable electricity by 2025 which will facilitate full decarbonisation
of our scope 2 purchased electricity emissions. The bulk of our
residual scope 1 emissions is transport and fuel. To address this,
in F23 we developed a transport decarbonisation strategy to reduce our
transport-related scope 1 emissions, underpinned by our commitment
to fully electrify our home delivery fleet by 2030 (see page 50).
Our scope 3 emissions are approximately 15 times greater than our
scope 1 and 2 emissions. This makes up 94% of total emissions in our
end-to-end value chain – the largest being purchased goods and
services. In F23, we adopted a test-and-learn approach to better
understand how we navigate the complexity of scope 3 emissions,
and to understand how nature and emissions interact in our value chain
(detailed in case studies on pages 52–54). Through these learnings,
we recognise that our pathway to net positive will require collective
action spanning industries, government and our supply chain network.
As emissions reduction opportunities evolve and our own maturity
in this space grows, we acknowledge that neither our footprint nor
our current SBTi reduction targets, which were set in 2020, are static.
In F24, we intend to update our SBTi target to reflect emissions related
to Forestry, Land and Agriculture Guidance (FLAG). This will see our
emissions pathway align to a 1.5̊ C reduction pathway.
43
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Scope 1, 2 and 3
emissions in our
end‑to‑end value chain
Scope 1 and 2
6%
R
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Scope 3
94%
l
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44
Our governance framework
Our climate and nature strategy
The Woolworths Group Board is responsible for appraising and approving the Group’s sustainability-related
strategies, targets and material investments to manage actual or potential impacts and opportunities on the Group.
The Board does so based on recommendations from the Board Sustainability Committee (SUSCO). The committee
reviews and monitors performance against the Woolworths Group Sustainability Plan 2025 (2025 Plan), and related
strategies, including climate and nature. It oversees the effectiveness of the Group’s frameworks and policies and
provides external perspectives on matters within the investment landscape. The CEO and Group Executive Committee,
including the Chief Sustainability Officer, have accountability for implementing our sustainability-related strategies
and report progress to SUSCO three times a year.
The Group Sustainability platform includes a dedicated general manager responsible for our climate and nature
strategies supported by robust processes for measuring and tracking progress.
Woolworths Group’s climate and nature strategy guides our actions to limit the potential impacts of climate
change and nature on and by our business and value chain. Our approach to climate and nature is complementary,
and we will continue to integrate these material areas as our understanding of their interrelationship matures.
Our strategic framework
Driving tangible action and effectively managing risk requires an end-to-end approach, considering implications
across our value chain and impacts on our stakeholders. Our climate and nature strategy focuses on reducing our
emissions and managing climate-related risks across our business and communities. It also details our approach
to reduce our impact on nature through the responsible stewardship of natural resources and the sustainable sourcing
of commodities, including protein in our supply chain. The strategy is approved by the Woolworths Group Board.
Woolworths Group Board
Responsible for appraising and approving the Group’s climate and nature strategy
Sustainability Committee
Audit and Finance Committee
Risk Committee
Monitors progress against the climate and
nature strategy and is responsible for
reviewing and endorsing our targets and
sustainability disclosures
Oversees financial reporting,
financial disclosures and the
Group’s accounting policies
Oversees the risk management
framework and the Group risk profile.
This includes sustainability-related
risks and opportunities
CEO and Group Executive Committee
Accountable for implementing our climate and nature strategy
Group Sustainability
Heads of business units
Woolworths360
Responsible for identifying business
strategies, risks and opportunities and
preparing our sustainability-related
financial and non-financial disclosures
Responsible for identifying, assessing,
responding to, managing and reporting on
risks within their scope, and implementing
Responsible for managing the
Board-endorsed energy strategy targeting
supply, demand and innovation opportunities to
appropriate risk treatments
reduce our carbon emissions
Our net positive commitment actions
Woolworths Group’s ability to meet net positive commitments is dependent upon the actions we take today
to embed climate and nature considerations into strategy, risk and opportunity management. As the majority
of our carbon footprint lies in our scope 3 emissions, this will require purposeful partnerships and collaboration
throughout our value chain.
Our climate and
nature strategy
Reducing our
scope 1 and 2 emissions
Partnering to reduce
our scope 3 emissions
Prioritising risk
management
read more
read more
read more
read more
Managing climate impacts across our business
Reducing our electricity and
making it greener:
Embedding low-carbon
technology and practices:
through energy efficiency and
transitioning to 100% renewable
electricity by 2025
by converting refrigeration
to low-carbon technology and
decarbonising our transport with
the aim of reducing scope 1 and 2
emissions by 63% by 2030
Increasing resilience
in our value chain:
monitoring and
responding to climate
impacts in our value chain
Supporting industry and community action
Partnering with industry to
support the transition to net zero:
Supporting community
climate change resilience:
driving industry action and engaging our
partners and suppliers on ways they can
reduce carbon emissions with the aim of reducing
our scope 3 emissions by 19% by 2030 1
supporting communities affected by natural
disasters using our scale to get fresh food
and supplies where they are most needed
Nurturing nature across our supply chain
Leading the future of protein:
providing affordable and
sustainable proteins across
traditional, plant and alternative
sources whilst aiming for the
highest animal welfare standards
Partnering on sustainable
and regenerative agriculture:
Having a positive
impact on nature:
supporting our growers and farmers
to improve farming practices,
collaborating throughout our supply
chain to identify barriers and drive
mutually beneficial outcomes
working to improve soil
health, water stewardship
and biodiversity
1
In F24, we intend to update our scope 3 SBTi target to align with 1.5̊ C in line with SBTi's FLAG Guidance.
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Our pathway
to net positive
This is Woolworths Group’s approach to drive decarbonisation
across scope 1, 2 and 3 across our value chain. As of today,
our pathway has quantified how we will reach net positive
scope 1 and 2 emissions. Next year we will integrate our
scope 3 pathway which considers nature‑based solutions.
What we've
achieved so far:
S
C
O
P
E 1 & 2 O
P
E
R
A
TIO
N
A
L E
M
IS
SIO
36%
scope 1 and 2 emissions
reduction since 2015
N
S T
R
A
J
E
C
T
O
R
Y
>60MW of solar operating
or under construction
We are
here
100% renewable electricity in SA
Commenced a value chain
emissions measurement program
80% food waste in Woolworths
supermarkets diverted from landfill
100% of own brand tea and coffee
now sustainably sourced
Piloted the Taskforce on
Nature-related Financial
Disclosure framework on
beef and salmon supply
Short term
Medium term
Long term
Accelerating action
across our operations
Leading the change
across our value chain
Delivering on our
net positive aspiration
42%
scope 1 and
2 emissions
reduction by 2025
100%
renewable
electricity
by 2025
63%
scope 1 and 2 emissions
reduction by 2030 1
Zero emissions home
delivery fleet
Scope 1 operational
transport emissions
reduced by 60% by 2030
19% scope 3 emissions
reduction by 2030 1, 2
Set nature related targets
and approaches that support
resilient food and fibre
production and help mitigate
impacts of climate change
Value chain emissions reduction aligned
to a 1.5°C pathway
All new property developments will
achieve a minimum 4 star Green Star rating
Understand the impact of priority fresh
supply chains on nature and increase
supplier adoption of sustainable and
regenerative practices in these categories
All high-impact own brand commodities
sourced from net zero-deforestation
supply chains
Source our animal, and alternative protein
sources in a sustainable manner through
minimising our impact on the environment
Aim for zero food waste to landfill from
our supermarkets
Woolworths own brand packaging widely
recyclable, reusable or compostable
We know we have more to do and
will invest in new technologies,
sustainable and regenerative
practices and make meaningful
changes to our products
and operations. We will work
towards complete value chain
decarbonisation.
By 2050, we aim to reach
net positive
emissions 3, 4
2015
2023
2025
2030
2050
1 Our 2030 SBTi emissions reduction goals will be achieved without the use of carbon offsets.
2
In F24, we intend to update our scope 3 SBTi target to align with 1.5°C in line with SBTi's FLAG Guidance.
3 Covers emissions from our own operations (scope 1 and 2 emissions).
4 We note that maintaining our science‑based ambition may require obtaining and surrendering carbon offsets
to cover any residual emissions once we reach our net positive target in 2050.
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Reducing our scope 1 and 2 emissions
Partnering to reduce scope 3 emissions
Scope 1 and 2 emissions are those directly within Woolworths Group’s operational control. Our material scope 1 emissions
sources include fugitive synthetic refrigerants, transport fuel for fleet cars and home delivery trucks, and natural gas.
Our scope 2 emissions comprise the largest part of our operational footprint which is the electricity we use across our
store network, distribution centres and offices.
Scope 1
(~20%)
Scope 2
(~80%)
Scope 1
Scope 2
Refrigeration, transport
fuels, natural gas
Electricity use across all stores, DCs and offices
Woolworths Group is committed to working towards achieving a 63% reduction in emissions from our operations (scope 1
and 2) by 2030, a commitment ratified by the SBTi 1 in 2020. F23 marks a transition to include market-based scope 2
electricity reporting. 2 This methodology enables us to account for the investment we are making in renewable electricity
and helps us track progress against the reduction trajectory shown on pages 46–47.
Over the past 12 months, our scope 1 and 2 emissions have reduced 8% due to ongoing grid decarbonisation, energy
efficiency work and ongoing transcritical refrigeration upgrades. Our cumulative emissions reduction since 2015 is now
up to 36%. This year, we launched our first transport decarbonisation strategy giving us a clear emissions trajectory
to address all material scope 1 and 2 emissions.
In November 2022, the Clean Energy Regulator (CER) provided new guidance on the treatment of Australian Carbon
Credit Units issued for projects registered with the Emissions Reduction Fund (ERF). Since 2016, Woolworths Group has
registered projects in the ERF, delivering emissions reductions through energy efficiency and waste reduction. We have
adjusted our F22 and F23 emissions to reflect the new guidance from the CER. Full details of our emissions footprint,
including these adjustments, can be found in the 2023 Sustainability Data Pack.
Actions completed to date contributing to our emissions reductions:
installed 231 solar systems across Australia and New Zealand, totalling 48MW, with a further >16MW
under construction. Also signed renewable energy contracts in SA (100%), WA (50%), and a pathway
secured in NSW for 100%
spent over $30 million on energy initiatives in F23 covering refrigeration and lighting upgrades and
improving our ability to monitor and control energy use
delivered 15 Green Star ratings with another 22 underway across the Group
formalised our transport decarbonisation strategy, which includes the commitment of a 100%
EV last-mile delivery fleet in Australia and New Zealand, helping reduce our transport emissions
by 60% in 2030 vs F22.
1
The SBTi assesses and approves companies’ targets through a scientific lens, ensuring alignment with the Paris Agreement goal
of limiting climate change to an increase of 1.5°C above pre-industrial levels.
2 Market-based reporting reflects emissions based upon the amount of renewable electricity a company procures. Location-based reporting
reflects the average emissions intensity of grids in which energy consumption occurs. It is best practice to report on both methods.
Woolworths Group’s scope 3 represents the majority of our emissions – at 29.7 million tonnes, these are approximately
15 times greater than our scope 1 and 2 emissions combined, with purchased goods and services representing 80–85%
of this. Our current aim under the SBTi, ratified in 2020, is to reduce scope 3 emissions by 19% by 2030, which
we acknowledge is not aligned with a 1.5°C pathway. In F24, we intend to update our SBTi target to reflect emissions
related to FLAG Guidance.
Achieving reductions across the value chain presents a new set of challenges that requires a total systems-based
approach. In addition to leveraging existing emissions reduction solutions, we continue to seek out different and
innovative solutions to define a path forward.
In F23, we applied a test-and-learn approach focused on partnerships and pilots to learn about our suppliers’
emissions footprints. Given the proportion of our footprint related to land use and agriculture, adoption of sustainable
and regenerative agriculture practices – as part of implementing broader nature-based solutions – will be crucial
to our decarbonisation strategy. This approach enables us and our suppliers to identify and implement targeted
interventions that both reduce emissions and improve our natural resources stewardship. Both our suppliers and our
customers are crucial to enable scope 3 emissions reductions, with supply and demand levers offering significant
emissions reduction opportunities. 1
Following the first disclosure of our scope 3 emissions footprint in F22, we have continued to improve our approach.
We introduced confidence ratings against our reported categories which acknowledges that we have differing levels
of visibility over our footprint. The development of an end-to-end scope 3 strategy – a key priority during F24 – will
allow us to forecast future emissions reductions across our whole value chain and work with our partners to realise
these reductions going forward.
Million tonnes CO2‑e
YOY
CHANGE
SCOPE 3
PROPORTION
EMISSIONS
CONFIDENCE
81.3%
Medium
CATEGORY
Purchased goods and services
Capital goods
Fuel- and energy-related activities
Upstream transportation and distribution
Waste generated in operations
F23
24.2
0.3
0.2
0.3
0.1
-2%
-9%
+12%
+18%
-5%
1.0%
0.6%
1.1%
0.4%
Business travel
<0.1
+54%
<0.1%
Employee commuting
Upstream leased assets
0.3
0.3
+5%
-15%
0.9%
1.1%
Medium
High
Medium
High
High
Low
Medium
)
m
a
e
r
t
s
p
U
(
3
e
p
o
c
S
1
2
3
4
5
6
7
8
3
e
p
o
c
S
)
m
a
e
r
t
s
n
w
o
D
9 11
12 14
15
Downstream transportation and distribution,
use of sold products, end-of-life treatment
of sold products, franchises, investments
4.0
+6%
13.5%
Low
(
TOTAL
29.7
‑1%
‑211,000 tonnes
Emissions confidence legend
High – supplier-specific emissions factors, or other calculations based on direct measurement
Medium – spend-based emissions factors, typically updated annually to reflect sectoral emissions reductions
Low – indirect estimates or calculations based upon industry/geographic averages, updated irregularly
1
IPCC AR6 Mitigation of Climate Change Demand-side mitigation options by 2050.
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Decarbonising our transport
– a material shift in our scope 1 and 3 emissions
Global transport activity is expected to more than double by 2050 1, yet emissions in this sector need to decrease
at least 3% annually to align with net zero by 2050. Transport is Australia's third largest emissions source,
and government projections forecast an emissions increase of approximately 5–10% in this sector by 2030. 2
The challenges and opportunities of a large, complex transport fleet
Woolworths Group’s transport network is one of the largest business supply chains in Australia and New Zealand,
with approximately 1.6 billion cartons moved annually through Primary Connect, and 19% growth in online delivery
volumes in the past year. Our directly managed fleet – scope 1 transport emissions – comprises some 3,500 assets,
from light vehicles to semi-trailers.
As with the rest of our value chain (described below), scope 3 emissions represent the larger part of our transport footprint,
which is outside of Woolworths Group’s direct control. Tackling transport decarbonisation will therefore require significant
effort due to the size and complexity of our own fleets and those of our logistics partners. We work with existing partners
to drive efficiency, and explore new industry solutions (e.g. hydrogen).
Our transport fleet
Delivering food to our customers every day is made possible through international freight movements via air and sea,
interstate connections via rail and road, and movements between DCs and stores. These emissions vary between direct
scope 1 and indirect scope 3 emissions.
International
freight
International movements to
Australia and New Zealand
Inbound delivery
Inbound transport
from suppliers to
distribution centres
Distribution centre
operations
Product storage and
yard operations
Store
delivery
Transport from DCs
to stores and CFCs
Shipping lines run by others,
importing internationally-
sourced products
Carrier transport partners
supplying Woolworths Group
ecosystem of companies
Scope 3 ~50,000t
Scope 3 included
in category 1 (see page 49)
DC yard operations by
Woolworths Group.
These are support vehicles
that stay on site
Refrigerated trailers owned by
Woolworths Group, trucks owned
by carrier transport partners.
Includes delivery into BIG W
Scope 1 ~1,000t
Scope 3 ~300,000t
B2B
delivery
Wholesale delivery
including PFD
Last mile
delivery
Online delivery from a store
or CFC to customer
Customers
and team
End customer pick up
and team transport
B2B including third party logistics,
PFD-owned delivery fleet
Home delivery fleet owned/leased
by Woolworths Group
Woolworths Group team and trade
vehicles, trolley collection, vehicles
Scope 1 ~30,000t
Scope 3 to be estimated
Scope 1 ~45,000t
Scope 1 ~5,000t; Scope 3
included in Category 9 (see page 49)
1 OECD International Transport Forum.
2 Commonwealth of Australia (Climate Change Authority) 2022. First Annual Progress Report, November 2022.
Our transport decarbonisation strategic priorities
Transport currently makes up less than 5% of the Group’s scope 1 and 2 emissions which is the equivalent
of approximately 100,000 tonnes of carbon dioxide. However, our internal modelling shows that following our
transition to renewable electricity by 2025, if no action is taken, transport emissions will represent approximately
40% of our scope 1 and 2 emissions by 2030.
In light of this, we launched Woolworths Group’s transport decarbonisation strategy in F23. This is anchored in our
commitment that by 2030, we aim to convert our Australian and New Zealand home delivery fleet to zero-emissions
vehicles. This goal, alongside changes to zero emissions technology in our heavy vehicle fleet, will reduce our
scope 1 transport emissions by approximately 60% compared to a 2023 baseline.
It has three pillars:
1. transitioning to a zero-emissions fleet and delivering cleaner, quieter neighbourhoods
2. leading low-carbon practices through efficient operations, such as offering customers the choice of Green
Delivery windows that minimise grocery delivery emissions
3. developing zero emissions transport infrastructure (e.g. EV chargers) across our network.
Transition readiness assessment for decarbonisation (F23)
With the limited current availability of zero-emissions vehicles for a fleet of our size and operational complexity,
we have gained valuable insights through trialling and testing a small number of low-carbon vehicles. In June 2023
Woolworths Supermarkets added 27 electric vehicles to its home delivery fleet. The new electric vehicles will start
delivering groceries to customers in Sydney and will operate out of the Mascot and Caringbah customer fulfilment
centres, which are dedicated to picking and packing online supermarket orders. Over 1,000 electric vehicles will
be added to the existing fleet over the next seven years as part of this commitment with the aim of reducing overall
transport emissions by around 60% by 2030.
Across international shipping and national logistics, we are exploring where we can support trials of lower emissions
fuels. These have the same challenges as our own fleets, requiring a combination of improved fuel, new propulsion
technology, and supporting infrastructure.
Commence transition
Monitor and engage
International
freight
Store
delivery
Home delivery
Transition now
Test and trial
DC
operations
Trailers
Light
vehicles
PFD
vehicles
Trolley
collection
h
g
H
i
l
y
t
i
x
e
p
m
o
C
n
o
i
t
i
s
n
a
r
T
w
o
L
High
Key:
Technology Maturity (vehicle availability)
Low
Scope 1 emissions
Scope 3 emissions
Size of circle = size of emissions
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Update on our scope 3 value chain emissions program
Improving our understanding of nature‑based risk
In 2022, Woolworths Group commenced a pilot engagement program in partnership with The Sustainability Consortium.
We invited 55 suppliers to participate across Australia and New Zealand from six categories that significantly contribute
to emissions across our value chain. We piloted a multi-retailer, science-based decision tool, THESIS on SupplyShift,
to capture emissions intensity data and, over time, its trajectory through the value chain. The program aims to meet
suppliers on their journey, providing both the opportunity to share progress as companies work towards their own
established goals and support those starting out to understand their own emissions profile and the actions to reduce it.
The pilot provided an encouraging start with:
• 79% of participants working towards their own scope 1 and 2 goals
• 87% of participants able to provide information on climate-specific KPIs
• 56% of participants with scope 3 emissions goals in place.
Woolworths Group’s value chain emissions program will continue to expand, with all suppliers now welcome to participate.
In partnership with our suppliers, industry and government, we will continue to identify, quantify and support implementation
of emissions reduction opportunities.
Agriculture is the backbone of our business and we aim to collaborate and encourage supplier adoption of sustainable
and regenerative practices. This, together with the responsible stewardship of natural resources, supports the resilience
of food and fibre production systems, helps to mitigate the impact of natural disasters and contributes to the reduction
of our scope 3 emissions.
This year, we continued our work on two key areas to drive nature-positive outcomes in our value chain:
• understanding the impact and dependencies of priority fresh categories 1 on nature and their adoption of sustainable
and regenerative practices. In F23, we surveyed over 120 suppliers across these categories, identifying those adopting
one or more of our principles of sustainable and regenerative practices, as evidenced by independent certification.
We will increase this engagement in F24 to capture the efforts of our suppliers and identify improvement opportunities
• sourcing high-risk commodities (e.g. pulp, paper, timber, palm oil, cocoa, tea, coffee, soy, fresh beef) in own brand
products from net zero-deforestation supply chains – traced back to land that has not been deforested since 2020.
Access our 2023 Sustainability Report for more information
Collaborating on sustainable and regenerative agriculture
Partnerships are critical to delivering impact in our value chain. Our active involvement in industry forums
and pilots enables us to understand drivers for change and test the value propositions for applying new
frameworks and practices.
We have joined the Australian Sustainable Agriculture Initiative Platform (SAI Platform) to improve our
understanding of Australian and global sustainable agriculture best practices and identify opportunities
to increase their adoption in our supply chains. We will work with SAI to build our teams’ and suppliers’
capabilities in the coming year.
In New Zealand, we progressed the Regenerative Management Systems for New Zealand Vegetable
Production project co-funded by the Ministry of Primary Industries’ Sustainable Food and Fibre Futures
Fund. The project is conducted in partnership with produce supplier LeaderBrand Produce and Crown
Research Institute, Plant and Food Research. It aims to understand and validate the feasibility of incorporating
regenerative practices into intensive vegetable production through on-farm trials. The project’s findings will
inform our approach to regenerative agriculture across Australia and New Zealand.
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Climate Leaders Coalition Scope 3 Collaboration
In 2022, we joined the Australian Climate Leaders Coalition (CLC), demonstrating our intent to approach
scope 3 collaboratively, and to work as part of a group of cross-sectoral companies supporting the Paris
Agreement. In the past 12 months, we led a working group to support the development of the CLC scope 3
roadmap, designed ‘by CEOs for CEOs’ to encourage more companies to take action on scope 3 emissions
and collaborate to find practical solutions.
We looked at emissions specifically in our beef value chain with our partners at Ampol Australia, Elders,
Hilton Foods Asia Pacific, Teys Australia, and Microsoft. We reviewed the impact of 25 potential interventions,
including nature-based solutions as a critical enabler to achieving a 1.5°C–aligned pathway for the beef
industry. The Group also acknowledged the risks associated with these types of solutions, such as reversal,
leakage, weak additionality and verification of baselines.
We will continue our association with the CLC by participating in its Nature and Circularity working groups
to build members’ knowledge of nature-based risk in their operations and supply chains. We will also develop
mitigation plans to improve natural ecosystems while working to understand nature-related investment
to deliver both private (e.g. emissions reduction, improved productivity and resilience) and public
(e.g. ecosystems services, improved waterway health) benefits.
1
Includes red meat, poultry and seafood, and fruit and vegetables.
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Sustainably sourcing our protein and high‑risk commodities
Prioritising risk management
In the past year, we have performed our first deforestation risk assessment, focusing on Queensland and Northern
New South Wales as it is a considerable source of Woolworths Supermarkets’ fresh beef. Our analysis approximated
sourcing distances based on transport guidelines detailed in our Animal Welfare Policy. As a result, the assessment
captured a broad geographic region and did not assess specific properties, identifying that 98% of areas assessed
exhibited no or less than 1% of primary forest loss and eight areas had over 1% of primary forest loss in 2021
(based on publicly available data).
This is a complex space and we are working to improve our understanding. In F24, we will use our baseline study
to continue to assess and understand our footprint, the extent of our interface with areas of primary loss and the
drivers of land use change in those areas (e.g. clearing for grazing, approved land management practices, fire,
drought and other land uses). This will enable us to implement targeted actions that deliver on our climate and
nature-related commitments in relation to beef.
TNFD pilot on nature‑related risks in the food value chain
We participated in the Department of Climate Change, Energy, the Environment and Water’s pilot of the
TNFD framework, applied across five sectors of national significance, including the food value chain.
Our pilot focused on beef and salmon; identifying that most nature-based risk in our value chain occurs in
primary production. The pilot reinforced that our suppliers' dependency on nature and capability to measure
their impact varied significantly. The measurement of biodiversity in particular was a challenge that required
a consistent and location appropriate approach. Definition aside, many of our suppliers and value chains are
already measuring the likes of waterway and soil health that can be used or adapted to report against the TNFD.
In F24, we will incorporate insights from the pilot to identify and manage nature-based risk. We will focus
on priority impact hotspots and dependencies to help us develop and implement solutions to mitigate and
restore nature loss in our value chain.
We will also participate in the Natural Capital Investment Initiative (NCII) convened by the Climateworks Centre.
Our involvement in the NCII will inform our approach to measuring natural capital in our supply chain, focused
initially on red meat. Measurement allows us to assign value to natural capital and consider ways to incentivise
improved natural resource stewardship and decarbonisation outcomes.
As part of our alignment with TCFD, we commenced climate scenario analysis in 2020. We have since evolved our
approach in response to the latest climate information, better coverage of Group operations, and feedback from
the business. The insights from scenario analysis arise from a stress test of our existing strategic priorities against
different, yet plausible futures to identify and assess material risks and opportunities.
Nature is an emerging focus area for Woolworths Group. In F24, enabled by the TNFD framework, we will work
to understand and report on our approach and management of nature-related risks and opportunities.
Scenario selection and focus areas 1
As part of this report we have included four physical climate scenarios selected based on plausible warming pathways
referenced by the IPCC. 2 These are bounded by a low warming pathway representing a 1.5°C world and a high warming
pathway representing a 4.5°C world. The in-between scenarios represent trajectories closer to the current rate
of emissions, existing global policy commitments and the Nationally Determined Contributions (NDCs) of Australia
and New Zealand (2–3°C warming).
When considering climate risk and opportunity, we build on a mix of physical and transition risks across our operations.
We also consider risks related to food security. This comprises a mix of physical and transition elements impacting the
food and products we sell.
• Building upon last year's findings, our transition risks are now more effectively mitigated through inclusion of our
transport decarbonisation strategy (page 50).
• Across physical infrastructure risk, there has been no significant increase in our exposure to losses associated with
extreme weather. Flooding remains the key physical risk across all property types. We will incorporate the potential
increase of future flood risk into existing site selection and design procedures.
• Food security remains the most material challenge, with both low and high warming scenarios presenting significant
costs to be borne across the value chain. Under low warming scenarios, food security costs are associated with the
required decarbonisation of the food supply chain and the potential carbon liability of residual emissions. Under high
warming scenarios, food security costs are mainly driven by reduced crop productivity and availability, and associated
price increases. How food security costs, under all scenarios, might be absorbed across the value chain is yet to play
out and remains unclear.
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1 A scenario describes a plausible, but hypothetical, path of development leading to a particular future outcome. Scenarios are not
forecasts or predictions – they are ‘what if’ narratives designed to inform and challenge strategic thinking.
2
IPCC, Climate Change 2021, The Physical Science Basis.
56
Climate risks and opportunities
The following table summarises the outcomes of our climate scenario modelling which presents an assessment
of climate risks and opportunities across our three themes – physical, transitional and food security. We also note
under which scenario the risk is most material, and the time horizon over which the risk applies. In future years,
this modelling work will enable us to quantify impacts.
IN WHICH
SCENARIO IS
THE RISK MOST
MATERIAL
RISK
Lower
1.5°C
Higher
4.5°C
MITIGATION AND OPPORTUNITY
TIME HORIZON
Short
now–2025
Medium
2026–2030
Long
2031–2050
IN WHICH
SCENARIO IS
THE RISK MOST
MATERIAL
RISK
Lower
1.5°C
Higher
4.5°C
MITIGATION AND OPPORTUNITY
TIME HORIZON
Short
now–2025
Medium
2026–2030
Long
2031–2050
Physical — Operations
In our review of physical risk across
more than 1,400 locations looking at
flood, heat, fire, wind and soil movement,
flooding represents the most material
risk of asset damage. This is due to the
fact that major flooding events usually
require a complete rebuild of the internal
store. We reviewed costs of cleaning
and store replacement and extrapolated
this to future expenditure under
different scenarios.
The most common event is likely to be
extreme heat that could affect product
safety. This could occur three to four
times more often by 2050.
Substantial growth in online shopping
will likely change the mix of asset types
requiring climate-resilient design.
We have more responsibility and control
over online CFCs than supermarkets
within leased shopping centres.
Transition — Policy and legal
Until we reach zero emissions, we are
exposed to costs related to increased
regulation of greenhouse gases.
Our latest scenario modelling accounts
for potential value chain financial risks
made up of (1) commodity price impacts,
and (2) scope 3 carbon liability. We now
see impacts in lower-warming scenarios
due to the potential cost associated with
industry-wide emissions reductions
alongside any residual carbon liabilities
of the goods we sell.
We work to improve our assets’
resilience through backup power
generation, flood barriers, rainwater
harvesting and roof strengthening.
To cater to extreme heat, we will review
and continue to adjust refrigeration
system designs to mitigate impacts
on product safety.
Most of our resilience work has so far
focused on supermarkets, but it will
expand to cover all assets at risk. We
will incorporate the potential increase
of future flood risk into existing site
selection and design procedures.
New developments targeting Green
Star ratings will also target the Climate
Change Resilience credit. This credit
requires all high risks to be addressed
during design, providing climate-
resilient buildings from day one. We also
incorporate heat resilient design through
appropriate roof selection, landscaping
and refrigeration designed for higher
than typical ambient temperatures.
We now have mitigation plans for
all material scope 1 and 2 emissions
representing approximately 80%
of our current footprint by 2030,
and approximately 99% of our footprint
by the time we reach net positive
emissions by 2050.
The financial risk associated with a carbon
liability in our value chain poses a shared
challenge of investing in decarbonisation.
We aim to mitigate this potential liability
through various approaches, with two
examples provided below.
For upstream emissions related to the
products we sell, our supplier value chain
emissions program continues to grow,
helping us and our suppliers understand
and quantify opportunities to support
emissions reductions (page 52).
From F24, we will begin incorporating
internal carbon shadow pricing into
material areas of capital expenditure.
Key:
Centres around 2025 strategy
Centres around 2050 climate horizon where physical change is clearer
Centres around 2030 climate horizon and most likely policy changes
Transition — Technological
Delayed adoption of new low emissions
technologies could reduce our
competitiveness. Developing our transport
decarbonisation strategy (page 50) has
highlighted the challenges to decarbonise
transport in the short-medium term.
Transition — Reputational
Customer expectations for sustainable
products continue to build, as do
investor expectations for corporate
behaviour. Being seen as a laggard
can impact both sales and investment.
This expectation is broader than just
climate, also covering animal welfare,
deforestation, and other natural impacts.
Transition — Market
Consumer preferences could affect our
mix of product sales and revenue.
We continue rolling out onsite
renewables and low-Global Warming
Potential (GWP) refrigeration.
Traditionally this has been difficult to
design in high-humidity areas. However,
we continue to expand locations where
we can install low-GWP refrigerants. Our
transport decarbonisation strategy aims
to enable reductions in scope 1 transport
carbon liability of ~60% by 2030.
We continue engaging with our
stakeholders, including investors
and customers, through the Voice
of Customer survey, team, and
supplier channels to improve
sustainability outcomes.
To provide truly sustainable
products, we need to reduce emissions
along all of our value chain. This is
discussed in more detail in our section
on Partnering to reduce scope 3
emissions. In addition, the continued
improvements we're making on
animal welfare and deforestation
contribute to providing customers
with more sustainable products
(see our 2023 Sustainability Report
for further detail).
Customer surveys suggest a growing
momentum towards less carbon
intensive products and more diverse
protein options. This implies a need
to decarbonise across all products,
starting with high emissions livestock-
based commodities. While there is
currently a difference between stated
preferences and sales data, we continue
to monitor evolving trends globally,
and are working on how to both better
communicate the emissions footprint
of our products and to ensure we provide
a product mix that aligns to consumer
preferences across emissions and other
sustainability indicators. We will continue
to improve our animal welfare practices.
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IN WHICH
SCENARIO IS
THE RISK MOST
MATERIAL
RISK
Lower
1.5°C
Higher
4.5°C
MITIGATION AND OPPORTUNITY
TIME HORIZON
Short
now–2025
Medium
2026–2030
Long
2031–2050
Food security
Food security represents the
most material and uncertain risk
for the Australian grocery sector.
Our prices are tightly linked with global
markets. The agricultural system will
likely evolve into one where the areas
harvested increase, but yields decrease
due to climate-related factors.
While we will be able to maintain our
existing product range, if not managed
proactively, this could result in lower
productivity, and potentially higher
costs to us and our customers.
The more specific commodity insights
we gained will help us prioritise where
to focus our sourcing efforts to mitigate
climate-related risks.
Rapid decarbonisation of the food
supply chain is needed, through
a combination of supply and
demand-side initiatives. Nature-based
solutions that simultaneously contribute
to carbon sequestration as well
as improve agricultural productivity
will play a big part, such as tree
planting to provide shelterbelts and
incorporation of perennial pastures
in livestock production.
As food security is such a broad
challenge, there is an opportunity to
partner across industry and government
to achieve the most effective outcome.
By proactively identifying where we
can take action to strengthen the
resilience of our supply chain, both
through agricultural productivity as well
as diversity of supply, we can continue
to provide value to our customers over
the long term.
Methodology for scenario analysis
Our key policy and development assumptions are drawn from the Shared Socioeconomic Pathways (SSPs) used in the
IPCC Sixth Assessment Report, and adapted to Australian trajectories where possible. These adaptations include the latest
Australian Energy Market Operator (AEMO) Integrated Service Plan 2022 for local insights about grid electricity emissions.
We drew further national parameters from the CSIRO’s Australian National Outlook. Climate scenario analysis before 2022
considered varied population metrics according to the SSPs. This variation dominated all financial modelling because
population heavily influences the Group’s financial outcomes. Because of that, we have retained a consistent population
forecast across all scenarios. Woolworths Group-specific inputs were standard across all scenarios. Material inputs
included applying our current climate and nature strategy, a consistent market share, store growth and store mix forecasts.
Costs of store-closure impacts relating to previous weather events were extrapolated for the different scenarios. This year,
a significant addition included our transition to zero-emissions transport, guided by our recently endorsed transport
decarbonisation strategy, rather than relying on national assumptions.
SCENARIO
1.5°C SCENARIO
2.0°C SCENARIO
2.7°C SCENARIO
4.5°C SCENARIO
IPCC reference and
socioeconomic pathway
SSP1-1.9
Sustainability
SSP1-2.6
Sustainability
SSP2-4.5
Middle of the Road
SSP5-8.5
Fossil-fuelled Development
Population growth
AEMO
(2022 Integrated
System Plan)
Australian National
Outlook (CSIRO)
SSP2
Step change
Progressive change
Slow change
Slow change
Green and Gold
Thriving Australia
Slow Decline
Slow Decline
As these relate to business strategy they are the same across all scenarios:
•
Existing emissions transition plans (e.g. green electricity, lower emissions refrigerants, Group transport
Woolworths
Group inputs
decarbonisation)
• Store growth as well as product mix integrated with business forecasts
• Consistent market share
• Revenue impacts to stores based on extreme weather-related closures
Way forward in F24
Governance
With the launch of the ISSB Climate-related disclosure framework, we are preparing for how
we best report against this whilst also aiming to align with the TNFD. We will assess climate
and nature risks, potential impacts and controls as part of the Group’s material risks.
Strategy
The scope 3 value chain emissions pilot has provided many learnings and insights that
will inform the development of a scope 3 emissions reduction strategy that integrates
climate and nature. This strategy will set out how we work across our value chain
to enable the implementation of emissions reduction solutions, including those that
have co-benefits in nature.
Commencing in F24, we will also pilot shadow carbon pricing across critical business areas
to accelerate our decarbonisation journey beyond the goods we sell.
Risk management
The development of climate change resilience plans for our physical assets and logistics
network will continue with mandated resilience measures for new builds and renewals.
We will track site-level progress to demonstrate our physical assets’ growing resilience.
In the coming year, we will use the insights from our climate scenario modelling, and findings
from TNFD and natural capital pilots, to explore opportunities offered by nature-based
solutions. These learnings can enable us to report on nature-related risks and opportunities.
Metrics and targets
SBTi’s recent release of guidance for forestry, land and agriculture sector (FLAG)
organisations requires us to reset our baseline and targets. We anticipate finalising
the process in F24. This will see our scope 3 emissions align to a 1.5°C reduction pathway.
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Our material risks
We continue to operate in a challenging macroeconomic environment characterised
by elevated inflation, global supply chain disruptions, severe weather events
and regulatory reform. A key challenge in F23 was rising cost‑of‑living pressures
which impacted our customers and communities, and resulted in increased levels
of theft and violence towards our team.
As recent events have shown, sophisticated cyber attacks
and data breaches have added layers of complexity
to our risk landscape and, as a result, there has been
a heightening of our data management and privacy risk.
We continue to monitor evolving threats and refine our
processes and controls as the digital environment grows.
Our risks are becoming increasingly interconnected and
complex, requiring a practical and straightforward risk
management approach that is consistently reviewed,
assessed, and where necessary, adjusted through the
appropriate governance forums. Our risk management
framework guides our approach to managing risks and
we continue to refine by listening and learning to our
customers, team, and communities.
As the shape of our Group continues to change, we have
embedded our risk management approach within each
of our businesses and throughout the acquisition lifecycle.
We are focused on equipping our teams with practical
tools and frameworks that allow them to confidently make
risk-informed choices, leading to better outcomes for our
customers, teams, shareholders, and communities.
This year we updated our Board approved risk appetite
statements to better align to our strategy, operational
environment and our purpose and ways-of-working.
Each risk appetite statement has a Group executive
sponsor (RAS Lead) who determines whether we are
meeting our risk objective.
We think about our risks in the following way:
• Operational – risks we manage as part of our daily
business activities
• Strategic – risks that should they materialise could
impact our ability to deliver our strategic goals
• Emerging – risks that could materialise over time
that we would need to respond to
Our most significant risks, those that if not managed
effectively would have material consequences, form our
material risks. For our material risks, we have taken
a consistent approach to how we implement, monitor
and test the effectiveness of controls, including response
plans. These risks are monitored formally by one of our
governance committees. For other risks, our response
is determined by our risk appetite posture, taking into
consideration the changing shape of the internal and
external environment.
Our risk approach and material risks reported have not
changed compared with our disclosures contained
within the 2022 Annual Report; however, there has
been a heightening of our outlook with regards to data
management and privacy, commensurate with the
increasing reliance on technology and the digitisation
of our operations. The material risks faced by our Group
and the risk management approach to each of them are
outlined on pages 62 to 65.
Further information in relation to risk management
can be found throughout the Annual Report and
in the Corporate Governance Statement.
Macro risk factors
Macro risk factors are attributes, characteristics or exposures that
increase the likelihood of a risk occurring. These are closely monitored
as they are a cause of many of our material risks, examples include:
Climate
Cyber
The material risks impacted by climate include:
strategy and transformation; customer; legal,
regulatory and governance; product safety; supply
chain and operational resilience; and sustainability.
The material risks impacted by cyber include: technology;
customer; supply chain and operational resilience; privacy
and data management; financial; legal, regulatory and
governance; and safety, health and wellbeing.
Risk management oversight
Below is an overview of Woolworths Group’s risk governance and management. This also includes
the key responsibilities of the Board and Board Committees, the Group Executive Committee, the risk
community, internal audit and business leaders. The Group applies a three lines of accountability
model approach to managing risk and compliance obligations.
RISK LEADERSHIP
The Board of Directors
(with input from Audit and Finance Committee, People Committee, Risk Committee,
Sustainability Committee and Nomination Committee)
Sets and
communicates
expectations for
risk management
Approves
Woolworths Group
ways-of-working, core
values and code of
conduct to underpin
the desired culture
Satisfies itself that
Woolworths Group
has in place an
appropriate risk
management
framework
Sets risk appetite and
provides oversight of
material risk
exposures and
risk-taking
Monitors the
effectiveness
of Woolworths
Group governance
practices
Group Executive Committee
Sets business direction
and resolves significant
enterprise risk issues
Provides recommendations
to the Board on risk policy,
frameworks and
risk practices
Manages material risks and
reporting on material risk
matters
Implements effective risk
management in the
business units
THREE LINES OF ACCOUNTABILITY
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1ST LINE OF
ACCOUNTABILITY
2ND LINE OF
ACCOUNTABILITY
3RD LINE OF
ACCOUNTABILITY
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Business
Oversight functions
Independent assurance
Owns and
manages risk
Oversees and sets frameworks and
standards. Independently monitors and
provides analysis and reporting on risks
and controls
Provides independent assurance
of frameworks and controls
effectiveness
Group businesses
Group platforms
Group Risk Enablement
People team
Internal Audit
External Audit
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Group Safety, Health & Wellbeing
Group Legal & Compliance
Group Finance
Group Sustainability
62
Product safety
Pay and entitlements
People
Risk movement:
Risk movement:
Risk movement:
Safety, health
and wellbeing
Privacy and data
management
Customer
Risk movement:
We consider the safety of our
customers to be paramount. Unsafe
products may result in injury, harm
or illness to our customers. If we are
unable to meet the requirements of our
product safety frameworks, we will be
subject to regulatory impacts, claims,
and reputational damage.
Our risk management
approach includes:
• dedicated product and food safety
teams across the Group who
lead our response to customer
complaints and the withdrawal
or recall of products when required
• clear end-to-end procedures and
processes for managing product
safety in our supply chain from
design, manufacturing, transport,
and storage to customer purchase
• ongoing review and monitoring
of controls throughout the product
lifecycle to confirm compliance
with mandatory and internal
safety requirements
• using diverse data sources
and analytics to identify product
safety issues.
Committee:
B
R
G
RAS Lead:
Managing Director,
Woolworths
Food Company
Paying our team correctly and rewarding
them fairly is critical to maintaining
trust, team member engagement,
reputation and living our values
of caring deeply and doing the right
thing. We acknowledge our historical
challenges in this area. We remain
focused on repaying pay shortfalls,
while bolstering our internal processes
and governance so we are confident
we are paying our team correctly.
Our risk management
approach includes:
• clear leadership and accountability
for our pay program across
the Group
• significant focus and investment
in understanding our obligations
and enhancing our pay processes
• ongoing review and monitoring
of controls across our end-to-end
pay processes, including changes
to our business, systems, and
external environment
• proactive reviews of our industrial
instruments (including over
30 enterprise and collective
agreements in Australia and New
Zealand) to confirm appropriate
system configuration
• continuing our remediation
programs, including making
repayments to current and
former team members
• a range of governance and
oversight mechanisms, including
specific management forums
and regular reporting.
Committee:
B
P
G
RAS Lead:
Chief People Officer
Committee:
A
B
G
Audit and Finance Committee
Board
Group Executive Committee
P
R
S
People Committee
Risk Committee
Sustainability Committee
Risk movement:
Increase
Decrease
No change
Our team is critical to our success.
We must attract, retain, and develop
team members with diverse skills,
capabilities and backgrounds. We know
that building a great team experience
is core to achieving this goal.
Our risk management
approach includes:
• attracting and retaining a diverse
workforce that reflects the
communities in which we operate,
with clear targets and inclusive
hiring program striving for an
inclusive, safe, and caring work
environment through deliberate
steps to address bullying,
harassment and discrimination
• building a Customer 1st,
•
•
Team 1st culture which aims
to provide a sense of belonging
and inclusion, giving everyone
an equal opportunity for growth
and development
investment in dedicated people
risk management initiatives
to understand and build
confidence across a range
of team-related risks (including
pay, resourcing, conduct and
behaviour, industrial action,
data, privacy, and safety, health
and wellbeing)
listening to our team members
through Voice of Team surveys
and other mechanisms to adapt
and refine our existing people
strategies and continuously
improve team experience
• embracing agile and flexible
working, including refreshed
physical spaces in many
of our support offices and
a ‘work from anywhere’ policy
(including internationally) within
certain guardrails
•
focused attention on proactive
talent management and strategic
workforce planning to confirm that
we have the skills we need today
and for the future.
Committee:
B
P
G
RAS Lead:
Chief People Officer
Changing customer expectations
requires us to continually evolve our
business model to meet their needs
and preferences, with impacts to
brand, reputation and market share
if not managed effectively. Our ability
to respond to our customers’
needs and expectations has been
particularly important in the context
of rising cost-of-living pressures
in Australia and New Zealand caused
by a high-inflationary environment and
rising interest rates.
Our risk management
approach includes:
• dedicated customer strategy,
marketing, and insight teams
working closely together to monitor
trends and developments both
locally and globally to assist
in a cross-functional and holistic
response to our customer
propositions across the Group
•
listening and engaging with our
customers through Voice of
Customer surveys and adopting
learnings into existing strategies
• sharing qualitative and quantitative
customer feedback from our
stores, customer hub, and online
channels with our teams to improve
our customer proposition in our
stores and online.
Committee:
B
G
RAS Lead:
Chief Transformation
Officer; Chief Marketing
Officer; Director of
Government Relations
and Industry Affairs
Risk movement:
Risk movement:
Quality data is one of our most
important organisational assets
which positively impacts how we
make investment, strategic, and
operational decisions. The misuse
of customer and team data has the
potential to result in significant brand
and reputational damage, adverse
regulatory outcomes, financial
impacts, and loss of customer trust.
Our risk management
approach includes:
• dedicated privacy, data ethics,
data stewards and risk experts
embedded across the business
to provide specialist support
•
•
•
•
the establishment of a
comprehensive set of frameworks
to manage privacy, data ethics,
and data management risk
regular training and awareness
programs to provide our teams with
an understanding of privacy and
data management commensurate
to their role and responsibilities
launching the Woolworths
Group Privacy Centre to provide
increased transparency to our
customers on how we manage their
personal information
the Woolworths Group Data
Governance Council establishes
best practices on how data is
managed across our business
• processes to respond to data
or privacy-related incidents
or complaints should they occur.
Committee:
B
R
G
RAS Lead:
Managing Director,
WooliesX; Chief
Information Officer
& Director, Group
Enablement
Providing a safe and healthy
workplace for our teams (including
contractors) and customers is one of
our foundational objectives, ensuring
all return home safely, every day.
We maintain high standards of control
to reduce the likelihood of serious
injury and fatality risk. Along with
physical health and safety, we are
committed to managing the risk of
psychosocial hazards in the workplace,
which could cause harm to our teams’
mental health and wellbeing, such as
bullying, harassment (including sexual
harassment, workplace violence,
aggression, and mental stress).
Our risk management
approach includes:
• ensuring all leaders are
accountable and provide active
leadership, along with their
teams, for creating a safe and
healthy workplace
• a dedicated safety, health and
wellbeing team who provide
technical expertise and support;
regular safety, health and wellbeing
training provided to all team
• an independently verified
safety management system
that proactively manages both
occupational injury and illness;
along with material events that
may lead to serious harm
• ongoing review and monitoring
of controls, supported by
independent assurance activities
to assess their effectiveness
• Board, management and
business-unit specific health and
safety governance to oversee
the key metrics and monitor the
effectiveness of related controls
• offering Good Shepherd,
a financial wellbeing program,
to provide support and solutions
for team members
• utilising Sonder proactive
wellbeing, alongside support
during challenging times or
after an incident.
Committee:
B
P
G
RAS Lead:
Chief People Officer
63
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64
Sustainability
Technology
Risk movement:
Risk movement:
Our commitment to sustainability
is a core part of living our purpose,
values, and ways-of-working. We are
also committed to protecting the
rights of workers across our global
supply chain. By focusing on how
we manage our environmental impacts,
our contribution to a healthier and more
inclusive society, how we source our
products, and how we protect the rights
of workers; we will maintain our position
as a responsible and trusted retailer.
Climate change-related risks such as
transition risk, physical infrastructure
risk, and food security risk could
impact our business operations
and fall short of stakeholder
and societal expectations if not
managed appropriately.
Our risk management
approach includes:
• monitoring our commitments
within our Group Sustainability
Plan 2025 and reporting our
progress to our governance
forums to demonstrate that we
are accountable, maintaining our
leadership intent and effectively
integrating sustainability across
our businesses and platforms
• annual review of the human rights
program, including assessment
against key external benchmarks
and stakeholder feedback for
continuous program improvement
and refinement of our controls.
Our programs include due diligence
requirements for specific suppliers,
plus self-assessments, audits, and
contractual requirements
• assessment and modelling
of climate change scenarios
which feeds into our operational
resilience planning and
decision making.
Further detail on our material
sustainability-related risks can
be found on pages 42 to 59 as well
as our Sustainability Report.
Committee:
B
S
G
RAS Lead:
Chief Sustainability
Officer
Our technology footprint continues
to grow in size and complexity due
to changing business or regulatory
requirements. Associated with this
is the increasing threat of cyber and
risk. As a result, we continue to evolve
our cyber and risk related capabilities
to strengthen operational and
data security.
Our risk management
approach includes:
• continually enhancing our critical
technology processes, and cyber
control frameworks and standards
supported by investment
in technologies, systems,
infrastructure, and capabilities
to provide secure, stable and
available platforms
•
regular review and monitoring
of our information technology
infrastructure and applications
to assess security threats,
supported by full incident response
and management programs
• engagement of independent
parties to provide assurance over
the adequacy and strength of our
cyber and security processes
and controls
•
replacing obsolete technology
assets and/or keeping our
technology assets current
• ongoing review and monitoring
of controls, supported by
independent assurance activities
to assess their effectiveness
• governance and oversight
mechanisms to adapt to the
ever-changing threats and
regulatory requirements that
support decisions and investment
towards technology enablement,
system availability, and
information security.
Committee:
B
R
G
RAS Lead:
Chief Information
Officer & Director,
Group Enablement
Supply chain and
operational resilience
Risk movement:
Minimising interruption in our
international and domestic supply chain
means that we are able to maintain the
availability of products and services
to the customers and communities
we serve. This includes understanding
the physical impacts of climate change
on our assets and operations. Over the
past 12 months the resilience of our
supply chain has been tested as we
responded to post pandemic-related
absenteeism, extreme weather events,
and geopolitical tensions.
Our risk management
approach includes:
•
review and approval of the
Group’s supply chain strategy
and network plans by the Board
with capital investment to build
network resilience by optimising
our distribution and customer
fulfilment centres, transport
operations, and last-mile deliveries
• business resilience frameworks,
standards and tools to provide
guidance on how we prevent,
prepare, respond to, and recover
from key events
• maintaining our critical infrastructure
risk management program to meet
our requirements under the SOCI Act
• monitoring and responding to key
events that threaten the continuity
of our operations through crisis and
emergency management teams
and protocols
• working closely with our supply chain
and transport partners to respond
to changes in our environment
internally and externally, including
the impacts of climate change
•
forward-looking scenario and
business continuity planning to
manage the flow and distribution
of product and maintain
operations for natural disasters
or pandemic-related events.
Committee:
B
G
RAS Lead:
Managing Director,
Primary Connect & Chief
Supply Chain Officer;
Chief Information
Officer & Director,
Group Enablement
Financial
Risk movement:
We are committed to providing
accurate, timely and transparent
financial disclosures whilst building
financial strength and optimising
our financial performance. We are
exposed to adverse movements in
foreign exchange, interest and inflation
rates that could impact profitability
and the availability of liquidity. Liquidity
management, including making timely
payments to team members and
suppliers, is an important operational
requirement and necessary to support
growth initiatives.
Our risk management
approach includes:
• managing specific treasury risks,
interest rates, foreign currency,
and counterparty risks in line with
our treasury policy
•
regular monitoring of financial
performance, including key
performance metrics, and revision
to short-term and longer-term
financial targets to incorporate
changes to the external market.
Results are subject to external audits
• conducting sensitivity analysis and
scenario planning to assess the
adequacy of our funding and long-
term liquidity position, including our
ability to deliver strategic initiatives
• establishing dedicated cross-
functional working groups to
monitor and respond to areas
of emerging risk. For example,
the impact of inflationary pressures
• an insurance program that
protects us against accidents,
natural disasters, and other events.
We have a range of externally
placed insurance policies and
self-insured programs which
we monitor to help us manage our
risk exposure. We consider our
insurance program to be sufficient
in the context of the nature and
scale of our business
• ongoing monitoring of new
accounting, financial and tax
regulations and implementing
required changes to
enable compliance.
Committee:
B
A
G
RAS Lead:
Chief Financial Officer
Strategy and
transformation
Legal, regulatory
and governance
Risk movement:
Risk movement:
We aspire to create better
experiences for our customers,
teams, communities, and other
stakeholders. Our Group businesses
and platforms come together
to deliver on our purpose and
strategic objectives in a competitive
retail environment.
Failure to execute our strategy
may impact our ability to remain
competitive and deliver our growth
plans. As such, we manage strategy
and transformation risks by working
with agility and end-to-end as
one team.
We are subject to a wide range of
legal and regulatory requirements,
in relation to health and safety, product
safety, employment, competition and
consumer, and corporate regulation.
Failure to comply with any legal
and regulatory requirements
could negatively impact our team,
customers, operations, shareholders
and reputation, and expose the
Group to investigations, litigation
or prosecution which may adversely
impact our financial performance
and licence to operate.
Our risk management
approach includes:
Our risk management
approach includes:
• dedicated strategy teams,
transformation teams and change
management capabilities that partner
with the business to assist with
evaluating and mitigating the impact
of continued and significant change
on our operations and our team
• considering risks in the operational
and strategic planning rhythms,
quarterly delivery cycles, and
through our M&A activities. Review
and approval of our strategies
by the Board and regular updates
on progress against agreed metrics
• consideration of risks when
developing significant projects
through our project risk framework
• assigning accountability of
our strategic objectives to key
management in the annual strategy
and quarterly delivery cycles
• key management and governance
forums to review and analyse key
metrics and trends with regards
to customer buying patterns,
supplier metrics, team results, the
competitive landscape, regulatory
changes, future sales propositions,
promotions, and marketing activities
to monitor and adjust priorities.
Committee:
B
G
RAS Lead:
Chief Executive Officer;
Chief Transformation
Officer
• dedicated legal compliance and
risk teams who partner with our
businesses and other operations
to advise on and monitor legal,
regulatory, and public policy
changes and issues and support
innovative opportunities
• our code of conduct which
provides clear guidance to all
of the Woolworths Group team
on our compliance and behavioural
expectations, and includes a clear
statement of our core values
• having a compliance risk
framework, business-specific
operational compliance plans,
and assurance programs, which
support effective operations
and identifying any emerging
or changing regulatory impact
• new starter and annual compliance
training programs which are
required to be completed by all
team members
• our ethics reporting service
(Speak Up), which encompasses
a formal whistleblowing process
through which we actively
encourage current and former
team members, suppliers, and their
families to report, anonymously
or otherwise, any wrongdoing
or breaches of the law.
Committee:
B
R
G
RAS Lead:
Chief Legal Officer
65
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66
Governance
Our purpose of creating better experiences together for a better tomorrow guides
us to better meet the needs of our customers, teams, shareholders, and other key
stakeholders. Woolworths Group is committed to a high standard of corporate
governance. Good governance goes beyond legal compliance; we see it as central to our
approach to creating sustainable growth and enhancing long‑term shareholder value.
The Board program is formulated each year to achieve an
appropriate balance between governance and oversight,
continuous learning focused on relevant industry
developments, awareness of emerging risks, and market
conditions. The program comprises formal meetings,
business briefings, presentations from internal and
external specialists and advisors, site visits, engagement
with team, and meetings with key stakeholders.
Board meetings are structured to balance recurring items,
such as strategy, team, customer and community, business
performance, financial and other reporting, sustainability,
financial and non-financial risks, legal, regulatory,
government and policy developments, with other material
matters arising from time to time. The Board actively
monitors performance against our strategic priorities,
our purpose and our values.
The Board Committees have an annual program of deep
dives, with 14 topics considered across F23.
Business engagement beyond formal meetings included
showcases on topics such as health, logistics and store
operations, and site visits in various locations across the
east coast of Australia and the North Island of New Zealand.
Woolworths Group has also followed each of the
recommendations of the ASX Corporate Governance
Council’s Corporate Governance Principles and
Recommendations (4th edition) throughout the reporting
period. Further details of the key corporate governance
policies and practices of Woolworths Group during the
year are set out in the Corporate Governance Statement,
which is available on the Woolworths Group website:
www.woolworthsgroup.com.au.
The members of the Board of Directors and the current
composition of the Board Committees are set out in the
Board of Directors section.
Board capability, composition and tenure
The Board is composed of a majority of independent non-executive directors with the skills and capabilities to fulfil their duty
to act in the best interests of Woolworths Group. The effective application of those skills and capabilities enables the Board’s
contribution to the decision making and governance of the Group. The Board is comprised of individuals with both relevant
skills and capabilities, and diversity of thinking. When combined with management, this leads to Woolworths Group fulfilling
its potential through living its purpose, observing its values and executing on its strategy.
As part of the ongoing succession planning for the Board, the Nomination Committee reviewed the Board capability matrix,
which took into consideration the skills and capabilities that the Board currently requires, together with those needed
in the future. An assessment of the optimum mix of these capabilities takes place at least once a year. This also informs
the identification and assessment of suitable future candidates for the Board.
A summary of the key skills and capabilities of directors is set out below:
Capability
Strategy and
transformation
Finance
Organisational
leadership
Retail
Operations
Digital and innovation
ESG
Governance
Risk
Board gender
diversity
Female
Male
56%
44%
Key:
Extensive
Practiced
Low
Strategy and transformation: Identifying and critically assessing strategic opportunities
and threats and associated business plans; overseeing successful transformation execution
in large, complex organisations to create sustained, resilient business outcomes.
Finance: Effective oversight of capital, financial accounting and corporate reporting,
including understanding key business financial drivers and the ability to evaluate the
adequacies of internal financial controls and systems.
Board tenure
Organisational leadership (including people): Developing and assessing organisational
structures and culture and its adherence to the Woolworths Group core values; people
management and succession planning; setting strategy linked remuneration frameworks;
and promoting inclusion and belonging.
Retail: Implementing customer-led transformation in the food, drinks or general merchandise
sectors in large complex organisations, including global experience.
Operations (including supply chain and property): Overseeing physical and digital
operations in large, complex organisations.
Digital and innovation: Evaluating and implementing new digital and physical technologies,
including in depth understanding of the use of data and data analytics to continue to
accelerate business transformation and meet evolving customer needs and expectations.
Environmental sustainability and governance: Developing and overseeing environmental
sustainability and governance initiatives and strategies, including climate change, nature,
carbon emissions reduction, human rights and responsible sourcing.
Governance (including regulatory and public policy): Identifying and managing governance,
legal, regulatory, public policy and corporate affairs issues, including experience working
or interacting with government and regulators.
Risk: Anticipating, identifying and managing key risks, including, financial, non-financial
and emerging risks; monitoring the appropriateness and effectiveness of risk management
frameworks and controls.
Further information about their skills and experience is set out on pages 67 to 70.
0–3 years
3–6 years
6–10 years
44%
12%
44%
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Board of Directors
Scott Perkins BCom, LLB (Hons)
INDEPENDENT CHAIR
Maxine Brenner BA, LLB
INDEPENDENT NON-EXECUTIVE DIRECTOR
Background and experience: Scott is an experienced public company director and has
extensive Australian and international experience as a leading corporate advisor on
strategy, mergers and acquisitions, and capital market matters. He held senior executive
leadership positions at Deutsche Bank from 1999 to 2013, including; Managing Director
and Head of Corporate Finance for Australia and New Zealand, membership of the Asia
Pacific Corporate and Investment Bank Management Committee and Chief Executive
Officer of Deutsche Bank New Zealand.
Other roles: Chair of Origin Energy since October 2020 (Director since September 2015)
and Director of Brambles (since June 2015).
Appointed Chair: 26 October 2022 Appointed Director: 1 September 2014
Committees: A R P S N
Brad Banducci MBA, LLB, BComm (Acc)
MANAGING DIRECTOR AND CHIEF EXECUTIVE OFFICER
Background and experience: Brad was appointed Managing Director and Chief
Executive Officer in February 2016. Prior to this appointment, Brad was Managing Director
of Woolworths Food Group from March 2015, and was Director of the Group’s Drinks
business between 2012 and 2015. Brad joined the Group in 2011 following the acquisition
of the Cellarmasters Group, where he was Chief Executive Officer of Cellarmasters
from 2007 to 2011. Prior to this, he was the Chief Financial Officer and Director at Tyro
Payments and a Vice President and Director with The Boston Consulting Group, where
he was a core member of their retail practice for 15 years.
Appointed: 26 February 2016
Warwick Bray BSci (Hons), MBA
INDEPENDENT NON-EXECUTIVE DIRECTOR
Background and experience: Warwick has extensive finance and strategy expertise,
bringing decades of experience from the international telecommunications, technology
and media sectors. He was the former Chief Financial Officer of Telstra, and held various
senior roles at Telstra, including Group Managing Director Mobile and Wireline Products,
and Executive Director, Head of Corporate Strategy. Earlier in his career he was a Partner
with McKinsey in Europe and was Managing Director and Head of Telecommunications
Equity Research with JP Morgan and Dresdner Kleinwort Wasserstein.
Other roles: Non-executive director of Spark New Zealand Limited since 2019.
Appointed: 1 March 2023 Committees: A N
Key:
A Audit and Finance
Committee
R Risk Committee
P People Committee
S
Sustainability
Committee
N
Nomination
Committee
Denotes Chair of Board/Committee
Denotes member of Board/Committee
Background and experience: Maxine has extensive corporate advisory experience,
particularly in mergers and acquisitions and corporate restructures. She is a former
Managing Director of Investment Banking at Investec Bank Limited Australia. She also
practised as a corporate lawyer with Freehill Hollingdale & Page (now Herbert Smith
Freehills) and spent several years as a lecturer in the Faculty of Law at both the
University of NSW and the University of Sydney. She was previously a Director of Orica
Limited (April 2013 to December 2022) and Growthpoint Properties Australia Limited
(March 2012 to November 2020).
Other roles: Director of Qantas Airways Limited (since August 2013), Origin Energy
(since November 2013), Telstra Group Limited (since February 2023) and a member
of the University of NSW Council.
Appointed: 1 December 2020 Committees: A R P N
Jennifer Carr-Smith BA Economics, MBA
INDEPENDENT NON-EXECUTIVE DIRECTOR
Background and experience: Jennifer is a seasoned board director and online
retail executive with experience across organisations undergoing rapid growth and
transformation in a number of sectors, including consumer packaged goods, apparel and
grocery. Jennifer has over 25 years’ experience with diverse organisations from start-ups
to large global companies. She is currently Chief Operating Officer of Athena Consumer
Acquisition Corporation. She has previously held roles as Senior Vice President, General
Manager of North America Local at Groupon, President and CEO of Peapod, an online
grocery delivery service and director of Full Harvest (January 2020 to December 2022).
Other roles: Chair of Blue Apron since September 2021 (Director since October 2020),
Local Bounty Corporation (since April 2023) and Perdue Farms (since February 2019).
Appointed: 17 May 2019 Committees: R S N
Philip Chronican BCom (Hons), MBA (Dist), GAICD, SF Fin
INDEPENDENT NON-EXECUTIVE DIRECTOR
Background and experience: Philip has extensive strategic, financial and management
expertise. He was responsible for the Retail and Commercial business of the Australia and
New Zealand Banking Group Limited (ANZ) in Australia. Prior to joining ANZ, Mr Chronican had
a long career at Westpac Banking Corporation (Westpac), including the roles of Group CFO
of Westpac and Group Executive of its institutional business consecutively. He also served as
NAB Interim Group CEO from March to November 2019. Philip also has broad experience in M&A
activity and post-merger integration, and has taken an active and public role in advocating
for greater transparency and ethics in banking and promoting workforce diversity.
Other roles: Chair of NAB since November 2019 (Director since May 2016).
Appointed: 1 October 2021 Committees: A R N
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Board of Directors
Group Executive Committee
Tracey Fellows BEc
INDEPENDENT NON-EXECUTIVE DIRECTOR
Background and experience: Tracey is an experienced global technology and digital
media executive. She was previously President of Global Digital Real Estate for News
Corp, responsible for driving the strategy and growth of News Corp’s digital real estate
interests, and Chief Executive Officer of REA Group for over four years leading its growth
within Australia and expansion into southeast Asia and India. Prior to this, Tracey was
Executive General Manager of Australia Post leading transformation and integration for
delivery of physical and digital mail for customers, President of Microsoft Asia Pacific,
and CEO of Microsoft Australia.
Other roles: Director of REA Group Ltd (since August 2014) and Hemnet Group AB
(since November 2020).
Appointed: 1 March 2023 Committees: P N
Holly Kramer BA (Hons), MBA
INDEPENDENT NON-EXECUTIVE DIRECTOR
Background and experience: Holly is an experienced non-executive director and chief
executive with extensive experience in retail and consumer markets across a range
of industries. She is the former CEO of Australian retailer, Best & Less, and has more than
25 years’ experience in general management, marketing and sales, including roles at the
Ford Motor Company (in the US and Australia), Telstra Corporation and Pacific Brands.
Holly was previously Deputy Chair of Australia Post, Chair of Lendi Group and director
of Abacus Property Group (2018 to 2022) and AMP Limited. In her role as Chair of the
Board Sustainability Committee, Holly is engaged with numerous sustainability activities.
Holly is a director of agtech start-up Nbryo Pty Ltd, the Goodes-O’Loughlin Foundation
and a Senior Advisor to climate investment firm Pollination.
Other roles: Director of Fonterra Co-operative Group Limited (since May 2020),
ANZ Group Holdings Limited (since 1 August 2023), Endeavour Group Limited (since
June 2021 retiring on 30 August 2023), and Pro Chancellor of Western Sydney University.
Appointed: 8 February 2016 Committees: R S N
Kathryn (Kathee) Tesija BSRMM (Fashion Merchandising) INDEPENDENT NON-EXECUTIVE DIRECTOR
Background and experience: Kathee has extensive retailing experience in the US market,
particularly in merchandising and supply chain management. During a 30-year executive
career with Target Corporation in the US, she served as Chief Merchandising and
Supply Chain Officer and Executive Vice President. Kathee continued her involvement
in Target as a Strategic Advisor until 2016. Ms Tesija was previously a Director of Verizon
Communications, Inc.
Other roles: Director of the Clorox Company (since May 2020) and a senior advisor and
consultant for Simpactful, a retail consulting agency in the US.
Appointed: 9 May 2016 Committees: P S N
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Brad Banducci MANAGING DIRECTOR AND CHIEF EXECUTIVE OFFICER
Biography available in Board of Directors, refer to page 68.
Amanda Bardwell MANAGING DIRECTOR, WOOLIESX
Amanda was appointed Managing Director of WooliesX in May 2017. Amanda joined the Group
in 2011 and has held a number of roles across both the Food and Drinks businesses. Amanda
holds an MBA from the University of New South Wales and a Bachelor of Business from the
University of Technology, Queensland and is a member of Chief Executive Women.
Guy Brent MANAGING DIRECTOR, WOOLWORTHS FOOD COMPANY
Guy was appointed Managing Director, Woolworths Food Company in 2019. Prior to this,
Guy was Director of BWS. Guy joined Woolworths Group in April 2011 after the acquisition
of the Cellarmasters Group. Guy is a Chartered Accountant and has a BSC from the
University of Bristol. Guy is also a non-executive director of OzHarvest.
Jane Danziger CHIEF TRANSFORMATION OFFICER
Jane was appointed Chief Transformation Officer in December 2022. Prior to joining
Woolworths Group, Jane was a Partner and Managing Director at the Boston Consulting
Group. Jane holds an MBA from Harvard Business School and a Bachelor of Engineering
(Chemical) from the University of Sydney. Jane is also a member of Chief Executive Women.
Natalie Davis MANAGING DIRECTOR, WOOLWORTHS SUPERMARKETS
Natalie was appointed Managing Director, Woolworths Supermarkets in October 2020. Prior
to this, Natalie was Managing Director, Woolworths New Zealand. Natalie joined the Group in 2015
as Director of Customer Transformation, Food Group. Prior to this, she was a Partner at McKinsey
& Co. Natalie holds an MBA from INSEAD and a Bachelor of Commerce and Law degrees from the
University of Sydney. She is also a member of Chief Executive Women.
Dan Hake MANAGING DIRECTOR, BIG W
Dan was appointed Managing Director, BIG W in November 2022. Prior to this, he held a number
of senior roles within Woolworths Supermarkets and WooliesX. Prior to this, Dan joined the
Group from the Boston Consulting Group. Dan holds a Master of Management Science from
the Vienna University of Business and Economics.
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Group Executive Committee
Stephen Harrison CHIEF FINANCIAL OFFICER
Stephen was appointed Chief Financial Officer in August 2019. Prior to his appointment, Stephen
held the role of Finance Director for Australian Food from 2015. Prior to this, Stephen worked
for a number of leading FMCG businesses in Australia and New Zealand and holds a Bachelor
of Economics, Accounting and Finance from Macquarie University and is a Chartered Accountant.
Caryn Katsikogianis CHIEF PEOPLE OFFICER
Caryn was appointed Chief People Officer in November 2016. Prior to this, Caryn held
a number of leadership roles within People and Culture across the Group. Caryn holds
a Bachelor of Commerce degree from the University of South Africa and is a member
of Chief Executive Women.
Andrew Hicks CHIEF MARKETING OFFICER
Andrew was appointed Chief Marketing Officer in June 2019. Andrew joined Woolworths
Group in 2008 and has held a number of leadership roles within the Food and Drinks
businesses. Andrew has a Bachelor of Social Science and Marketing Honours degrees
from the University of KwaZulu-Natal.
Alex Holt CHIEF SUSTAINABILITY OFFICER
Alex was appointed Chief Sustainability Officer in June 2021. Prior to this, Alex oversaw the
Group’s sustainability portfolio as General Manager of Sustainability, Health and Quality from
2016. Alex joined Woolworths Group in 2011 from Tesco and is also a non-executive director
of Foodbank Australia.
John Hunt CHIEF INFORMATION AND REPLENISHMENT OFFICER
John was appointed Chief Information and Replenishment Officer in September 2021.
An experienced retailer, prior to joining Woolworths Group in 2017 as Chief Information Officer,
John spent over 25 years at Woolworths Holdings, South Africa, holding a number of senior
positions including Senior Executive Replenishment Officer and Chief Information Officer.
Von Ingram
MANAGING DIRECTOR, W LIVING
Von was appointed Managing Director, W Living in September 2022. Von joined Woolworths
Group in July 2018 as Chief Transformation Officer. Prior to this, Von was Managing Director
and Partner at The Boston Consulting Group. Von holds an MBA from Melbourne Business
School and a Bachelor of Commerce from the University of Western Australia.
Annette Karantoni CHIEF SUPPLY CHAIN OFFICER AND MANAGING DIRECTOR, PRIMARY CONNECT
Annette was appointed Chief Supply Chain Officer and Managing Director, Primary Connect
in February 2022. Prior to this, Annette was Director of the B2C eCommerce business within
WooliesX and has held a number of leadership roles across the Group.
73
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Jaimie Lovell DIRECTOR OF GOVERNMENT RELATIONS AND INDUSTRY AFFAIRS
Jaimie was appointed Director of Government Relations and Industry Affairs in March 2023.
Prior to joining the Group, Jaimie was at Westpac Group as the Head of Government Affairs
and Public Policy. In addition to her corporate, industry and government experience, Jaimie
holds a Ph.D. from the University of Sydney and is a graduate of the AICD.
Amitabh Mall CHIEF ANALYTICS OFFICER AND MANAGING DIRECTOR, WIQ
Amitabh was appointed Chief Analytics Officer in July 2021 and is the Managing Director
of wiq. Prior to joining the Group, Amitabh was a Senior Partner & Managing Director at Boston
Consulting Group. Amitabh holds an MBA from the Indian Institute of Management, Bangalore
and a Bachelor of Commerce from Osmania University.
Rob McCartney MANAGING DIRECTOR, WOOLWORTHS 360
Rob was appointed Managing Director of Woolworths 360 in July 2020. Prior to this, Rob held
the role of Format Development Director for Australian Food. Rob is an experienced retailer
and has held a number of leadership roles within 7-Eleven, Coles and Target prior to joining
Woolworths Group in 2015.
Bill Reid CHIEF LEGAL OFFICER
Bill joined Woolworths Group as Chief Legal Officer in October 2019. Prior to his appointment,
Bill was a Senior Partner at Ashurst, leading the firm’s Competition team. Bill holds an MBA
from Melbourne Business School and a Bachelor of Laws from the University of Adelaide.
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David Walker CHIEF RISK OFFICER
David was appointed Chief Risk Officer in November 2020 and is also the Chair of the
Woolworths Group First Nations Advisory Board. Prior to this he was the Managing Director,
BIG W from 2016. David is a member of Chartered Accountants Australia and New Zealand.
Spencer Sonn MANAGING DIRECTOR, WOOLWORTHS NEW ZEALAND
Spencer was appointed Managing Director, Woolworths New Zealand in March 2021. Prior to this,
Spencer held the role of Managing Director, Food at Woolworths Holdings Limited, South Africa.
Spencer completed the General Management Program at Harvard Business School in 2015.
74
Directors’ Statutory Report
This is the report of the directors of Woolworths Group Limited (the Company) in respect of the Company and the entities
it controlled at the end of, or during, the financial period ended 25 June 2023 (together referred to as the Group).
Principal activities
The Group operates primarily in Australia and New Zealand, with 1,463 stores (F22: 1,453 stores) and approximately 200,000
employees at year‑end. The principal activities of the Group during the year were as follows:
• Australian Food: procurement of food and related products for resale and provision of services to retail customers
in Australia, operating 1,095 Woolworths Supermarkets and Metro Food Stores.
• Australian B2B: procurement and distribution of food and related products for resale to other businesses and provision
of supply chain services to business customers in Australia.
• New Zealand Food: procurement of food and drinks for resale and provision of services to retail customers
in New Zealand, operating 191 Countdown Supermarkets.
• BIG W and speciality: procurement of discount general merchandise products for resale to retail customers in Australia,
operating 177 BIG W stores.
• The Group also has online operations for its primary trading divisions, including data analytics and consulting services.
The Group has a wholesale operation which supplies a further 292 wholesale customer stores, comprising 220 stores
relating to Statewide Independent Wholesalers (SIW) and 72 stores relating to SuperValue and FreshChoice in New Zealand.
Meetings of directors
The table below sets out the directors of the Company and their attendance at Board and Committee meetings during the
financial period ended 25 June 2023.
BOARD
MEETINGS
AUDIT & FINANCE
COMMITTEE
PEOPLE
COMMITTEE
RISK
COMMITTEE
SUSTAINABILITY
COMMITTEE
NOMINATION
COMMITTEE
DIRECTOR
(A)
(B)
(A)
(B)
(A)
(B)
(A)
(B)
(A)
(B)
(A)
(B)
Non‑executive Directors
S Perkins
W Bray 1
M Brenner
J Carr‑Smith
P Chronican
T Fellows 2
H Kramer
K Tesija
Executive Director
B Banducci
Former Directors
G Cairns 3
S McKenna 3
11
3
11
11
11
3
11
11
11
4
4
11
3
11
11
11
3
11
11
11
4
4
4
1
4
–
4
–
–
–
–
1
1
4
1
4
–
4
–
–
–
–
1
1
2
–
2
3
3
2
–
5
–
3
3
2
–
2
3
3
2
–
5
–
3
3
3
–
3
1
3
–
3
–
–
1
–
3
–
3
1
3
–
2
–
–
1
–
3
–
–
3
–
–
3
3
–
2
–
3
–
–
3
–
–
3
3
–
2
–
5
–
5
5
5
–
5
5
–
2
2
5
–
5
5
5
–
5
5
–
2
2
(A) Number of scheduled meetings held during the time the director was a member of the Board or Board Committee.
(B) Number of scheduled Board or Committee meetings that the director attended as a member.
1 Warwick Bray was appointed as a director and Chair of the Audit and Finance Committee on 1 March 2023.
2 Tracey Fellows was appointed as a director and a member of the People Committee on 1 March 2023.
3 Gordon Cairns and Siobhan McKenna retired as directors on 26 October 2022 following the conclusion of the 2022 Annual General Meeting.
In addition to these formal meetings of the Board and its Committees, 13 further unscheduled or special purpose Board
Sub‑Committee meetings were held during the financial period ended 25 June 2023. Directors also attend meetings
of Committees of which they are not a member. This is not reflected in the attendance table above.
Details of director experience, qualifications, and other listed company directorships are set out on pages 68 to 70.
Company secretaries
Kate Eastoe and Michelle Hall were appointed as Company Secretaries in November 2020. Together, Ms Eastoe and Ms Hall
act as Company Secretaries of the Board and its Committees.
Prior to being appointed as Group Company Secretary and Group Counsel, Ms Eastoe was General Counsel for Woolworths’
Australian Food Group, since 2018. She has over 20 years’ experience in senior leadership positions in legal and governance
roles across media, FMCG and manufacturing industries in Australia, New Zealand and Asia‑Pacific. Ms Eastoe holds
a Bachelor of Arts and a Bachelor of Laws, and a Graduate Diploma in Legal Practice. She is a Graduate of the Australian
Institute of Company Directors. Ms Eastoe is also a non‑executive director of Australian Network on Disability Limited.
Ms Hall has over 15 years’ experience in legal, governance and compliance roles, including as company secretary
of a number of ASX listed entities across financial services, property and retail industries. Ms Hall holds a Bachelor
of Business, a Bachelor of Laws, and Graduate Diplomas in Legal Practice and Applied Corporate Governance.
She is a fellow of the Governance Institute of Australia.
Environmental regulation
The Group’s operations are subject to a range of environmental regulations under the law of the Commonwealth of Australia
and its states and territories. The Group is also subject to various state and local government food licensing requirements,
and may be subject to environmental and town planning regulations incidental to the development of shopping centre sites.
The Group has not incurred any significant liabilities under any environmental legislation.
Directors’ and officers’ indemnity/insurance
(i) The Constitution of the Company provides that the Company will indemnify to the maximum extent permitted by law, any
current or former director, secretary or other officer of the Company or a wholly owned subsidiary of the Company against:
(a) Any liability incurred by the person in that capacity (except a liability for legal costs);
(b) Legal costs incurred in defending or resisting, or otherwise in connection with proceedings, whether civil, criminal
or of an administrative or investigatory nature in which the person becomes involved because of that capacity; and
(c) Legal costs incurred in good faith in obtaining legal advice on issues relevant to the performance of their functions
and discharge of their duties as an officer of the Company or a wholly owned subsidiary, if the expenditure has been
approved in accordance with the Company’s policy.
(ii) Directors and officers of Woolworths Group Limited and certain subsidiaries have entered into a Deed of Access,
Insurance and Indemnity that provides for indemnity against liability as a director or officer, except to the extent
of indemnity under an insurance policy or where prohibited by statute. The Deed also entitles the director or officer
to access company documents and records, subject to undertakings as to confidentiality, and to receive directors’
and officers’ insurance cover paid for by the Company.
(iii) During or since the end of the financial period, the Company has paid or agreed to pay a premium in respect of a contract
of insurance insuring directors and officers, and any persons who will insure these in the future, and employees of the
Company and its subsidiaries, against certain liabilities incurred in that capacity. Disclosure of the total amount of the
premiums and the nature of the liabilities in respect of such insurance is prohibited by the contract of insurance.
Non-audit services
During the period, Deloitte Touche Tohmatsu Australia, the Company’s auditor, has performed certain other services
in addition to their statutory duties. The Board is satisfied that the provision of those non‑audit services during the period
by the auditor is compatible with, and did not compromise, the auditor independence requirements of the Corporations Act
2001 (Cth) or as set out in Code of Conduct APES 110 Code of Ethics for Professional Accountants issued by the Accounting
Professional & Ethical Standards Board, as they did not involve reviewing or auditing the auditor’s own work, acting
in a management or decision making capacity for the Company, acting as an advocate for the Company or jointly sharing
risks or rewards.
Details of amounts paid or payable to the auditor for non‑audit services provided during the year by the auditor are outlined
in Note 6.4 to the financial statements.
Other information
The following information, contained in other sections of this Annual Report, forms part of this Directors’ Report:
• Operating and Financial Review (Performance Highlights and Business Review) details on pages 2 to 65 inclusive
in the Annual Report.
• Details of dividends, including the Dividend Reinvestment Plan (DRP) and shares issued as a result of the DRP,
as outlined in Note 4.2 and Note 4.3 to the financial statements.
• Matters subsequent to the end of the financial period as outlined in Note 6.5 to the financial statements.
• Directors’ interests in shares and performance rights as set out in Sections 5.2 and 5.3 of the Remuneration Report.
These remain unchanged as at 23 August 2023.
• Performance rights granted during the financial period as outlined in Note 6.2 to the financial statements.
• Remuneration Report from pages 76 to 99.
• Auditor’s Independence Declaration on page 100.
This Report is made in accordance with a Resolution of the Directors of the Company and is dated 23 August 2023.
Scott Perkins
Chair
Brad Banducci
Managing Director and Chief Executive Officer
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76
Remuneration Report
Dear Shareholders,
On behalf of the Board, I am pleased to present my first
Remuneration Report as the Chair of the People Committee,
and look forward to engaging with shareholders over the
coming months.
Tragically, during the year, there were two fatalities in our
business, involving a team member and a contractor of
Woolworths. The Board and team are deeply saddened by
these events and our thoughts are with those affected.
Following a number of years of COVID-related disruption,
Woolworths Group delivered a strong F23 operating result.
This reflected the hard work of our teams in supporting our
customers and communities, and restoring the Group’s
operating rhythm. Our Customer Care scores remained
high across the Group as the team responded with care
to the escalating cost of living pressures for our customers.
Our remuneration framework is based on market
competitive fixed pay, a balanced scorecard for short-term
incentives (STI) to drive improvement across customer,
team, financial and operating performance, and a long-term
incentive (LTI) that aligns pay with disciplined financial
management, strengthening the Group’s reputation and
shareholder returns. As outlined below and reflected
in actions relating to this year’s STI, the Board retains
discretion on all STI and LTI outcomes.
F23 Reward Outcome: STI
A priority for F23 has been delivering everyday value for
customers facing cost of living pressures. At the same
time we have demonstrated progress on our strategic
agenda by delivering better E2E customer experiences,
growing our B2B offer and scaling our retail platforms and
Group capabilities. Particularly pleasing was the growing
contribution made to the Group results by the businesses
we acquired in F22. We see further growth potential through
our recent acquisition of the MILKRUN brand and proposed
majority acquisition of Pet Stock, which will provide more
convenience to our customers.
A more stable operating environment supported strong
sales and EBIT performance with both measures achieving
results ahead of targets set for F23. These measures were
offset by Working Capital Days which was below target,
reflecting intentional investment in inventory to secure supply
and improve availability for customers. Whilst our Voice of
Customer NPS scores remained strong in absolute terms,
the results were below the threshold performance level set.
These results need to be considered in the tragic context
of the fatalities during the year. Keeping our team safe
when they come to work is core to who we are and what
we do. Investigations into both matters are ongoing.
In these circumstances, the Board has determined that
there should be a 10% point reduction in F23 incentive
outcomes for all salaried team members aligned to the
Group scorecard. The Board will consider whether any
further action is appropriate as we learn more from the
current investigations.
Following the adjustment described above the overall
scorecard result was reduced from 89.8% to 79.8%
of Target (53.2% of Maximum).
F23 Reward Outcome: LTI
The F21–23 Woolworths Group Incentive Share Plan (WISP)
achieved an aggregate outcome of 49.9% of the maximum
performance rights vesting.
Sales per square metre continued to perform well and
Return on Funds Employed also improved in the context
of a stabilising operating environment resulting in both
measures achieving an outcome slightly ahead of Target.
Despite a strong absolute Total Shareholder Return
performance of 32.0% over the plan period, the Relative
Total Shareholder Return metric was below Entry, as other
companies in the comparator group benefited from cyclical
market conditions.
F24 Outlook
After reviewing pay and fees compared to the market the
Board approved some moderate increases to executive
fixed remuneration and director fees for the year ahead.
Details are included in this Report and increases are lower,
on average, than those awarded to our teams.
The Board does not intend to make any substantive
changes to STI and LTI plans in F24. It is the Committee’s
intention to review the remuneration framework next year
to test its ongoing effectiveness in supporting the Group’s
overall strategy.
In Summary
The remuneration outcomes for F23 appropriately reflect
the underlying performance and collective contribution of
hardworking teams who are well regarded in their industry
and in the wider market. While the overall result was
appropriately moderated by the impact of the workplace
fatalities, Woolworths Group ends the year in a strong
position. Our positive momentum will enable us to create
value for shareholders and customers, committed to the
safety and wellbeing of our teams and doing the best for
the communities we serve.
Remuneration Report 2023
Table of Contents
1
2
3
4
5
F23 Remuneration at a glance
1.1
1.2
1.3
Alignment of remuneration framework to our strategic priorities
F23 executive KMP remuneration mix
Link between performance and remuneration received
Executive KMP remuneration
2.1
2.2
2.3
2.4
2.5
Short-term incentive
Long-term incentive
What we paid executive KMP in F23 and their current shareholdings
Terms of executive KMP service agreements
F24 outlook
Governance
3.1
3.2
3.3
3.4
Role of the Board
Role of the People Committee (PC)
Treatment of unvested equity awards upon exit
Other governance requirements
Non–executive directors’ arrangements
4.1
4.2
4.3
Non-executive directors’ remuneration policy and structure
Non-executive directors’ minimum shareholding requirement
Non-executive directors’ equity plan
KMP statutory disclosures
5.1
KMP remuneration
5.2
KMP share right movements
5.3
KMP share movements
Share rights outstanding for executive KMP
5.4
78
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83
85
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89
90
90
91
92
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94
96
97
98
The report has been prepared and audited against the disclosure requirements of the Corporations Act 2001 (Cth).
Who is covered by this report?
This report outlines Woolworths Group’s remuneration framework and the outcomes for the year ended
25 June 2023 for Key Management Personnel (KMP). KMP have the authority and responsibility for planning,
directing and controlling the activities of Woolworths Group. F23 KMP are:
NAME
POSITION
Scott Perkins 1
Chair
P
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N
Warwick Bray 2
Non-executive director
Maxine Brenner
Non-executive director
Jennifer Carr-Smith Non-executive director
Philip Chronican
Non-executive director
Tracey Fellows 2
Non-executive director
Holly Kramer
Non-executive director
Kathryn Tesija
Non-executive director
Amanda Bardwell 3 Managing Director, WooliesX
Managing Director & CEO
Managing Director,
Woolworths Supermarkets
P Brad Banducci
M
K
e
v
Natalie Davis
i
t
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e
x
E
APPOINTED
PEOPLE
COMMITTEE
26 October 2022
1 March 2023
–
1 December 2020
Chair
– -
–
–
17 May 2019
1 October 2021
1 March 2023
8 February 2016
9 May 2016
26 February 2016
26 June 2017
1 October 2020
77
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Maxine Brenner
Chair – People Committee
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P Gordon Cairns 1
M
K
Chair
1 September 2015 to 26 October 2022
Siobhan McKenna 2 Non-executive director
8 February 2016 to 26 October 2022
1 Mr Perkins was appointed as Chair following Mr Cairns’ retirement from the Board on 26 October 2022. Mr Perkins was
appointed to the Board on 1 September 2014.
2 Mr Bray and Ms Fellows were appointed to the Board on 1 March 2023. Ms McKenna retired from the Board on 26 October 2022.
3 Ms Bardwell became KMP on 28 June 2021.
Stephen Harrison
Chief Financial Officer
1 August 2019
78
1 F23 Remuneration at a glance
F22 Remuneration
at a glance 1
1.1
Alignment of remuneration framework to our strategic priorities
1.1
Alignment of remuneration framework to our strategic priorities (continued)
Our remuneration framework is designed to support Woolworths Group’s strategic priorities. Clear principles guide our
remuneration decisions and design. As we operate in a dynamic and rapidly evolving market, we review our approach
to remuneration on a regular basis so that we remain aligned to market expectations and business objectives.
F23 remuneration framework
Our remuneration framework supports the Group strategy
Strategic priorities
Our purpose: We create better experiences together for a better tomorrow
Total Fixed
Remuneration (TFR)
Short‑Term
Incentive (STI)
Long‑Term
Incentive (LTI)
Living our purpose
Build a better and
safer tomorrow for our
customers and team
Leverage Everyday
Rewards to unlock more
value for our members
Delivering compelling
customer propositions
Strengthening our
foundations
Woolworths Retail: help all
customers find their Woolies worth
Woolworths Food Company:
grow brands, products and
capabilities unique to Woolworths
BIG W and Speciality (W Living):
help our customers find real value
and easy everyday solutions
Retail Platforms: scale
value delivery in our Group
businesses and directly with
third parties
Group Platforms: support
Group priorities and focus
on E2E productivity
Remuneration principles
Objective: Support our strategic priorities
Reinforce
our purpose,
customer 1st team
1st strategy and
ways of working
Build the retailer
of the future
by attracting,
retaining and
motivating team
members with
diverse skills,
capabilities
and backgrounds
Encourage our
team members to
think and behave
like owners
Drive short
and long-term
performance
consistent
with our
risk appetite
Be simple and
easily understood
Remuneration governance
In delivering remuneration outcomes to team members, the Board may apply discretion to deliver appropriate outcomes
for our shareholders, customers and team. The Board reviews People Committee (PC) recommendations based on the
CEO’s proposals for Group and individual performance and incentive outcomes. This review incorporates advice from
the Chief Legal Officer, Chief Risk Officer, Chief People Officer and Head of Internal Audit, as well as consultation with
committee chairs and all directors.
TFR consists of base salary,
superannuation and car allowance.
TFR is set in relation to the external
market and considers:
•
•
•
•
strategic value of the role
size and complexity of the role
individual responsibilities
experience and skills.
TFR is positioned so that total target
remuneration (TTR) is around the
median of our comparator group,
which includes the ASX25 plus
additional reference to major national
and international retailers as required.
Generally, an executive who is new to
a role will start on a TTR package below
the median and as they develop skills
and experience in the role their pay may
progress beyond the median position.
50% of the STI is delivered in cash
and the remaining 50% is deferred
as share rights for two years.
Performance rights vesting subject
to performance progress over
three years.
Business performance is
measured through a balanced STI
scorecard, with 60% weighted
on financial objectives and 40%
on non-financial objectives:
The LTI aligns executives to overall
company performance through
three measures focused on strategic
business drivers and long-term
shareholder return:
• Sales (20%)
• Relative Total Shareholder Return
• Earnings Before Interest and
Tax (EBIT), before significant
items (20%)
(rTSR) – 40% weighting
• Return on Funds Employed (ROFE)
– 40% weighting
• Working Capital Days (20%)
• Reputation – 20% weighting.
• Customer Satisfaction (20%)
• Safety (20%).
Individual performance
includes assessment against
business, strategic and ways
of working goals and core values.
The Reputation measure replaced the
Sales per square metre measure for
LTI plans vesting from F24.
1.2
F23 executive KMP remuneration mix
What is the
remuneration mix
for executive KMP?
Total Target Mix
Total fixed
remuneration 33.4%
Total Maximum Mix
Total fixed
remuneration 23.8%
A consistent remuneration mix applies for all executive KMP. It is strongly weighted
towards variable remuneration, with performance-based pay contributing 67%
of total target mix, and 50% of total target reward delivered in deferred equity.
Performance based
Target STI 33.3% (100% of TFR)
Target LTI 33.3% (100% of TFR)
16.65% cash
16.65% deferred
share rights
Performance rights
Equity
Performance based
Maximum STI 35.7% (150% of TFR)
Maximum LTI 40.5% (170% of TFR)
17.85% cash
17.85% deferred
share rights
Performance rights
Equity
79
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Remuneration Report
1.3
Link between performance and remuneration received
2 Executive KMP remuneration
Group five‑year
performance
summary
The remuneration outcomes for our executive KMP are aligned to short-term and long-term
performance outcomes. The graphs and table below show executive KMP remuneration
outcomes and the Group’s core financial performance measures over the past five years.
Short‑term measures
Long‑term measures
Sales
$M
EBIT 1
$M
Annual TSR 2
% Group
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F:
F:
F:
19
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F:
F:
19
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Woolworths Group
Endeavour Drinks
(continuing operations)
and Hotels
20
20
21
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Sales/sqm
(Australian Food)
STI and LTI outcomes
STI (% of Maximum)
STI (% of Target)
LTI (% of Maximum)
Woolworths Group ordinary share price closing ($) 7
Woolworths Group dividend (cents per share) 8
F19
45.4
68.1
78.4
28.15
102
F20
46.7 4
70.0 4
64.3
30.83
94
F21
77.0
115.5
77.5
36.78
108
F22
46.7 5
70.0 5
66.7
35.46
92
F23
53.2 6
79.8 6
49.9
39.86
104
1 EBIT from continuing operations before significant items. For F23, significant items from continuing operations was a net loss before tax
of $117 million. Details of significant items are included in the 2023 Financial Report.
2 Annual TSR is point to point TSR for the financial year. For F21, annual TSR includes the value of Endeavour Group shares distributed on demerger.
3 ROFE is defined on page 83.
4 The F20 STI scorecard outcome of 104% of Target was capped at 70% of Target (or 46.7% of Maximum) for the Group Executive Committee.
Mr Banducci waived his F20 STI.
5 Adjusted scorecard outcome. The F22 STI scorecard was adjusted after the Board exercised its discretion to set the Working Capital Days
metric to Entry.
6 Adjusted scorecard outcome. Further details relating to the adjustment are outlined on page 82.
7 Closing Woolworths Group share price on the last trading day of Woolworths Group’s financial year, adjusted to exclude Endeavour Group.
Source: FactSet.
Interim and final dividends paid in relation to the financial year.
8
F23 executive KMP remuneration received
The table below presents the remuneration actually paid during, or vesting at the conclusion of F23, for executive KMP.
This differs from the executive KMP statutory disclosures on page 95, which presents remuneration in accordance with statutory
obligations and accounting standards. Total remuneration received was higher in F23 than in F22 primarily due to comparatively
higher vested DSTI from F21 for all executive KMP. No vested DSTI was reported in F22 for Mr Banducci as he waived his F20 STI.
EXECUTIVE KMP
Brad Banducci
Managing Director & CEO
Amanda Bardwell
Managing Director, WooliesX
Natalie Davis
Managing Director,
Woolworths Supermarkets
Stephen Harrison
Chief Financial Officer
TOTAL FIXED
REMUNERATION
$
OTHER
BENEFITS 1
$
F23
CASH STI
$
VESTED F21
DSTI 2
$
VESTED
F21–23 LTI 2
$
TOTAL
$
2,600,000
3,905
1,193,010
1,837,569
3,011,418
8,645,902
1,056,666
3,905
471,818
665,984
1,013,385
3,211,758
1,056,666
3,905
471,818
604,931
1,009,927
3,147,247
970,833
3,905
393,015
578,220
1,042,362
2,988,335
1 Other benefits represents the deemed premium in respect of Directors’ and Officers’ Indemnity insurance.
2 Vested F21 Deferred STI and vested F21–23 LTI is based on the five-day volume weighted average price (VWAP) of Woolworths Group
shares up to and including 1 July 2023 ($39.7484).
2.1
Short‑term incentive
Our approach and rationale: F23 short‑term incentive
We believe that alignment of our STI arrangements from the CEO through to our store teams is an important recognition
of the shared accountability for performance at Woolworths Group. Individual STI outcomes reflect business performance
against the STI scorecard, individual contribution to these results, ways of working and core values. The Board also reviews
executive behaviour and any malus policy considerations when determining STI outcomes for executive KMP. All measures
and targets are reviewed annually so that STI drives the right outcomes each year.
Assessing business performance:
The STI balanced scorecard includes a mix of metrics,
with 60% weighting on financial metrics and 40%
weighting on non-financial metrics. Five equally weighted
business scorecard measures drive outcomes for
shareholders, customers and our team:
Sales
EBIT 1
Working Capital Days
Customer Satisfaction
Safety
Sales, EBIT 1 and Working Capital Days
It is critical for the sustainability of our business to
constantly work towards improving all elements of our
financial performance, including the productivity of
store selling space, the efficiency of our stores, supply
chain and overall management of costs and the effective
management of working capital, including inventory.
Sales, EBIT 1 and Working Capital Days performance are
all key financial performance metrics used to measure
the value creation for our shareholders.
1 Before significant items.
Customer Satisfaction
Our strategy is underpinned by customer experiences
and success is dependent on delivering convenient ways
to shop and competitive prices for customers so they
continue to choose us over our competitors. Our online
platforms are key to delivering new and improved ways
customers can shop with us. Customer feedback is
measured using Voice of Customer Net Promoter Score
(VOC NPS), based on 12-month rolling average outcomes.
Outcomes are weighted 30% to eCommerce customers
and 70% to in-store customers. Scores reflect outcomes
across the Group, weighted 75% to Australian Food,
15% to New Zealand Food and 10% to BIG W.
Safety
We are a people business and the safety of our team and
customers is of great importance. Safety performance
is measured by the Severity Rate, which is a blended
measure that includes all team and customer injuries/
illnesses and their severity. The higher the severity of an
incident (actual or potential), the higher its severity score.
The total of all severity scores is then divided by the event
count to determine the Severity Rate.
Assessing individual performance:
Two equally-weighted categories of goals are used
to review performance:
• business strategy and performance goals that
capture individual contributions to performance
during the year
• ways of working and people goals that capture
how leaders have delivered goals and set their
teams up for success.
The Board also has discretion to adjust STI or deferred
STI (DSTI) for individuals (see malus policy outlined
in Section 3.4).
Executive KMP STI outcomes:
Depending on performance:
•
•
•
•
zero for below Entry performance
50% of Target for Entry performance
100% of Target for Target performance
150% of Target for Stretch performance.
The Board has discretion to vary STI outcomes
beyond these performance measures so
that rewards appropriately reflect complete
performance. In F23, the Board exercised this
discretion (see page 82 for further details).
TFR
x
Target
STI
x
STI
Scorecard
x
Individual
Modifier
=
STI Outcome
Delivering STI outcomes:
Executive KMP STI awards are delivered:
•
•
50% as cash
50% deferred as share rights for two years.
81
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82
Remuneration Report
Executive KMP
remuneration 2
2.1
Short term incentive (continued)
2.2
Long‑term incentive
Performance against: F23 STI measures
Our approach and rationale: long-term incentive
Our focus on progressing the strategic agenda and consistently delivering a better Customer experience has continued
through F23, with a particular focus on delivering everyday value for customers facing cost of living pressures. The F23 STI
metric outcomes benefited from a more stable operating environment than recent years, with strong sales growth and an
improvement in EBIT following a challenging F22. These metrics were offset by Working Capital Days which was below Target
due to intentional investment in inventory to secure supply and improve availability. Customer Satisfaction was below Entry
with customer experience impacted by inflation and stock availability through the year. The F23 STI calculated scorecard
outcome of 89.8% reflects each of these factors. In finalising the F23 outcome the Board considered the tragic context that
a team member and a contractor each lost their lives at work during the year. The Board determined that there should be a 10%
point reduction in the Group STI scorecard outcome from 89.8% to 79.8% of Target. The circumstances of both fatalities are the
subject of investigation which will, in due course, further inform the Board’s discretion on this matter.
F23 performance against
the STI scorecard
was 89.8% of Target
(59.9% of Maximum).
Discretion exercised
to reduce the outcome
to 79.8% of Target
(53.2% of Maximum).
F23 STI MEASURE
OUTCOMES (% OF TARGET)
Stretch
Sales 1
Sales from continuing operations were $64,294 million, up 5.7% on F22. Sales were
strong across the Group, with PFD performance a highlight. In Australian Food,
elevated inflation was experienced through the year, with item growth stabilising
in H2 and eCommerce returning to growth having cycled the significant prior year
impacts of COVID in H1.
ENTRY: $62.9BN
TARGET: $64.0BN
STRETCH: $65.2BN
ACTUAL F23: $64.3BN
1 Sales is income from the sale of goods and services, excluding other income.
Earnings Before Interest and Tax
EBIT from continuing operations before significant items2 was $3,116 million,
up 15.8% on F22. EBIT growth was driven by strong sales growth, a focus
on returning to historic levels of productivity and the removal of COVID costs
incurred in the prior year. EBIT growth in Australian Food, Australian B2B and
BIG W was offset by a decline in New Zealand Food.
ENTRY: $2.97BN
TARGET: $3.09BN
STRETCH: $3.21BN
ACTUAL F23: $3.12BN
Target
2 Significant items for F23 was a net loss of $117 million before tax. Refer to 2023 Financial
Discretion exercised to
reduce STI by 10% points
Report for details.
Working Capital Days
Average Working Capital Days were -2.7 days, a reduction of 1.8 days compared
to F22, reflecting both incremental investment in inventory to improve availability
and mitigate the risk of further supply chain disruption, and increased receivables
driven by growth in non-Retail business.
ENTRY: (2.1) DAYS
TARGET: (3.3) DAYS STRETCH: (4.5) DAYS ACTUAL F23: (2.7) DAYS 3
3 The Group has recognised the costs of running its distribution centres within cost of sales
(refer to Note 1.1.1 of the 2023 Financial Report for further details, including the reclassification
of F22 comparatives). However, for the purposes of determining the F23 outcome, distribution
centre costs were reclassified from cost of sales to branch and administration expenses,
which is consistent with the basis used in setting the metric targets.
Customer Satisfaction
Group VOC NPS was in line with F22 as ongoing stock availability challenges and the
impact of inflation on value for money perception impacted customer experience
during the year. Despite being below aspiration, VOC NPS remains at a strong level
in absolute terms.
%
0
0
3
.
y
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a
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3
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Downward adjustment
ENTRY: 49.0
TARGET: 50.0
STRETCH: 52.0
ACTUAL F23: 48.3
Total (% of Target)
89.8%
Board Discretion
(10.0%)
Adjusted (% of Target) 79.8%
Adjusted (% of Max)
53.2%
Safety
The Safety Severity metric improved on the prior year with an outcome of 1.52, with
significantly improved reporting and transparency of incidents across the Group,
and focus on high potential events.
ENTRY: 1.72
TARGET: 1.69
STRETCH: 1.65
ACTUAL F23: 1.52
The Group’s LTI plan is called the Woolworths Incentive Share Plan (WISP). The plan is designed to align executives to overall
company performance by delivering on the Group’s strategic priorities and long-term shareholder returns. The LTI measures
represent financial and non-financial metrics. Reputation was introduced as an LTI metric to replace Sales per square metre
for the F22–24 plan onwards. Sales per square metre was applicable to the F21–23 plan which is reflected in the performance
against LTI measures described on page 84. LTI vesting for executive KMP is subject to Board discretion over and above meeting
performance hurdles. This includes consideration under the malus policy. Measures and targets are reviewed annually.
Assessing business performance:
The LTI rewards executives subject to performance against three measures over
a three-year performance period:
Relative TSR – 40% weighting
Return on Funds Employed – 40% weighting
Reputation – 20% weighting
Relative TSR
Relative TSR (rTSR) is used as a measure in our LTI plan to align executive
outcomes with long-term shareholder value creation. The peer group is the
top 30 ASX companies, excluding metals and mining companies 1. Vesting
of 50% is achieved when our peer group ranking is at the median and vesting
of 100% is achieved at the 75th percentile or higher. Between the median and the
75th percentile there is straight-line vesting from 50% to 100%. Peer group ranking
below the median results in zero vesting. rTSR outcomes are calculated by an
external provider.
Return on Funds Employed
ROFE is an important measure to drive behaviours consistent with the delivery
of long-term shareholder value. ROFE improvements can be delivered through
earnings growth as well as the disciplined allocation of capital and management
of assets and working capital. ROFE is defined as EBIT before significant items
for the previous 12 months as a percentage of average (opening, mid and closing)
funds employed.
Reputation
Reputation plays a key role in the extent to which customers choose to engage
with Woolworths Group. It represents delivery against our purpose, commitments
– including our response to climate change – and evolving expectations of our
customers and stakeholders. Reputation is measured using data from RepTrak,
and measures brand reputation across four key metrics: trust, admiration, positive
feeling and esteem. The score is calculated as the average of the previous 12
months rolling 12-month scores in the final year of the plan compared to baseline.
Reputation was introduced as an LTI metric to replace Sales per square metre for
the F22–24 plan onwards.
Vesting Schedule
The vesting schedule for these measures is:
Entry
Target
Stretch
rTSR 1,2
ROFE
Reputation
20%
n/a
40%
8%
24%
40%
4%
12%
20%
TOTAL
% MAX
32%
100%
1 The F23–25 rTSR peer group comprises the following ASX companies (ASX Code): ALL,
AMC, ANZ, APA, ASX, BXB, CBA, COH, COL, CPU, CSL, EDV, GMG, JHX, MQG, NAB, QBE,
RHC, RMD, SCG, SHL, STO, SUN, TCL, TLS, WBC, WDS, WES, WOW and XRO.
2 Consistent with market practice, 50% of the rTSR tranche vests at the 50th percentile,
the entry point for vesting to occur, with stretch achieved at the 75th percentile.
Assessing individual
performance:
The Board has discretion
to adjust the vesting
outcome for individuals
where it is appropriate
to do so (see malus policy
as outlined in Section 3.4).
Delivering LTI
outcomes:
Executive KMP are
awarded a maximum
value of 170% of TFR at the
beginning of the three-
year performance period.
Awards of performance
rights are made at face
value based on the five-day
VWAP up to and including
1 July at the beginning
of the performance
period. Dividends that
would have been earned
and reinvested over the
performance period vest
in the form of additional
shares subject to the
performance conditions.
The deferred nature of LTI
arrangements supports
retention and also provides
a risk management lever
to facilitate malus policy
application during the
performance period.
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Remuneration Report
Executive KMP
remuneration 2
2.3
What we paid executive KMP in F23 and their current shareholdings
The following pages compare actual, target, and maximum remuneration received during F23 for the executive KMP.
Amounts include:
• TFR received (including base salary, superannuation, and car allowance)
• other benefits received, including the deemed premium in respect of Directors’ and Officers’ Indemnity insurance
•
•
•
cash STI received for business and individual performance in F23
equity that vested or which has been performance tested as the end of F23 for the prior year plans
equity granted in F23 and all unvested equity awards (share rights for DSTI and performance rights for LTI).
Following market benchmarking completed by PwC, to maintain market competitiveness, it was determined that TFR
increases were warranted in F23 for the executive KMP other than the CEO. These increases, effective 1 September 2022
and the first in four years, were outlined in the F22 Remuneration Report.
The F21 DSTI plan vested on 1 July 2023, being the 50% portion of the F21 STI award that was deferred as share rights.
The F21 STI outcome was 115.5% of Target, higher than in F23.
At the conclusion of F23, performance was tested for the F21–23 WISP and the number of performance rights that convert
to shares was determined for the executive KMP. The disclosed value of the awards was determined using the Woolworths
Group five-day VWAP up to and including 1 July 2023.
For F21 DSTI and F21–23 WISP, both the increase in share price and the accumulated dividends that would have been
earned and reinvested over the period in the form of additional rights are contributing factors to the final value received
at vesting by the executive KMP. Additional rights are referred to as Dividend Equivalent Rights (DERs).
The individual tables on pages 85–87 also show progress against the minimum shareholding requirements (MSR)
as at 1 July 2023. The aggregate value of current shareholdings and unvested DSTI awards are used to determine
progress against MSR. Further detail on the MSR are included in Section 3.4. Each remuneration component in the
tables below has been rounded to the nearest thousand.
ENTRY: 14.0%
TARGET: 14.6%
STRETCH: 15.5%
ACTUAL RESULT:
14.9%
1 ROFE is calculated as EBIT before significant items for the previous 12 months as a percentage
of average (opening, mid and closing) funds employed.
Brad (4=100)
Brad Banducci Managing Director & CEO
Term as KMP: Full Year
Sales per square metre 2
Actual remuneration received for F23 v Target and Maximum ($000)
Actual Remuneration
2,600
Target Remuneration
2,600
1,193
1,838
3,011
8,646
1,300
1,300
2,600
7,804
4
4
4
Maximum Remuneration
2,600
1,950
1,950
4,420
10,924
2.2
Long term incentive (continued)
Performance against: F21–23 LTI measures
The F21–23 WISP was granted effective July 2020, with challenging performance targets and demanding stretch objectives
to reach maximum outcomes. For the F21–23 WISP, performance was assessed against three equally-weighted measures,
Relative TSR, ROFE and Sales per square metre and an overall outcome of 49.9% of the maximum award was achieved.
The F21–23 Award
achieved 49.9%
of Maximum
(84.9% of Target).
F21–23 LTI MEASURE
OUTCOMES (% OF MAXIMUM)
Stretch
Target
Entry
%
0
0
.
R
S
T
r
%
3
5
2
.
E
F
O
R
%
6
4
2
.
m
q
s
/
s
e
a
S
l
Total (% of Max)
49.9%
Total (% of Target)
84.9%
Relative Total Shareholder Return
Woolworths Group’s TSR for the F21–23 WISP plan period was 32% (9.7% CAGR).
Strong shareholder return was driven by share price appreciation over the plan
period reflecting the Group’s financial performance and a consistent dividend
payout ratio of 70–75%. Despite positive absolute TSR, the performance was
below the peer group median.
ENTRY: 50TH
PERCENTILE
TARGET: N/A
or LTI bar chart
TSR
ROFE 56
Sales 56
0
40.3
Return on Funds Employed 1
23
23
0
8
8
0
8
8
0
38.8
35.3
171
171
171
STRETCH: 75TH
PERCENTILE
ACTUAL RESULT:
36TH PERCENTILE
ROFE for F23 was 14.9% as a result of higher EBIT in F23 due to higher sales,
an improved operating rhythm, the absence of COVID costs, and the benefits
of ongoing investment in recent years.
Net Sales per square metre for F23 was $17,626, below F22 due to inclusion in the
F21–23 metric of BIG W, which has a significantly lower Sales per square metre
than Australian or NZ Food. Each business unit grew Sales per square metre
materially through the plan period, with an overall CAGR of 4.2% in sales and 1.3%
in space delivering a 2.2% compound increase in Sales per square metre.
ENTRY: $16,643
TARGET: $17,248
STRETCH:
$18,288
ACTUAL RESULT:
$17,626
2 Sales per square metre is calculated as annual reported turnover for Australian Food,
New Zealand Food, and BIG W divided by average trading square metres (based on market
reported trading square metres).
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Actual Remuneration
1,057
472
666
1,013
3,212
Target Remuneration
1,057
538
538
965
3,102
4
4
4
Maximum Remuneration
1,057
806
806
1,641
4,314
Progress on MSR
as at 1 July 2023 ($000)
Equity granted
($000)
Unvested LTI and STI
awards ($000)
Target
5,200
Target
1,075
F22 DSTI
848
Vested LTI and
STI awards ($000)
including share
price uplift and DERs
1,075
Target
Actual
15,538
Actual
2,595
F23 DSTI
F23–25 WISP
Total
1,193
4,890
6,083
Shares
F21 DSTI
9,841
1,838
F21–23 WISP
3,011
F22 DSTI
848
Total
15,538
F22–24 WISP
4,672
F23 DSTI
F23–25 WISP
1,193
4,890
Actual
6,914
F21 DSTI
F21–23 WISP
Total
11,603
Total
1,838
3,011
4,849
LEGEND
TFR
Other benefits
Cash STI
Vested DSTI
Vested LTI
Target
985
Actual
3,268
l
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Actual Remuneration
1,057
4
4
4
472
605
1,010
3,148
Actual Remuneration
971
393
578
1,042
2,988
Stephen Harrison (4=50)
4
4
4
971
971
Target Remuneration
1,057
538
538
965
3,102
Target Remuneration
493
493
900
2,861
Maximum Remuneration
1,057
806
806
1,641
4,314
Maximum Remuneration
739
739
1,530
3,983
Brad (4=100)
Amanda Bardwell (4=50)
Actual Remuneration
2,600
1,193
1,838
3,011
8,646
Actual Remuneration
1,057
472
666
1,013
3,212
Target Remuneration
2,600
1,300
1,300
2,600
7,804
Target Remuneration
1,057
538
538
965
3,102
Maximum Remuneration
2,600
1,950
1,950
4,420
10,924
Maximum Remuneration
1,057
806
806
1,641
4,314
4
4
4
4
4
4
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Remuneration Report
Executive KMP
remuneration 2
2.3
What we paid executive KMP in F23 and their current shareholdings (continued)
Brad (4=100)
2.3
What we paid executive KMP in F23 and their current shareholdings (continued)
Amanda Bardwell (4=50)
Actual Remuneration
2,600
1,193
1,838
3,011
8,646
Target Remuneration
2,600
1,300
1,300
2,600
7,804
Maximum Remuneration
2,600
1,950
1,950
4,420
10,924
Actual Remuneration
Target Remuneration
Actual Remuneration
1,057
2,600
1,057
Target Remuneration
Maximum Remuneration
Target Remuneration
1,057
2,600
1,057
Maximum Remuneration
Maximum Remuneration
1,057
1,057
4
4
4
4
4
472
1,300
472
605
1,300
666
1,010
2,600
1,013
3,148
7,804
3,212
4
4
538
1,950
538
538
538
1,950
965
965
3,102
4,420
3,102
10,924
4
806
806
806
806
1,641
1,641
4,314
4,314
Natalie Davis (4=50)
Amanda Bardwell (4=50)
Amanda Bardwell Managing Director, WooliesX
4
2,600
3,011
Actual remuneration received for F23 v Target and Maximum ($000)
Actual Remuneration
1,838
1,193
Term as KMP: Full Year
8,646
Stephen Harrison (4=50)
Stephen Harrison Chief Financial Officer
Actual remuneration received for F23 v Target and Maximum ($000)
1,013
Actual Remuneration
1,057
666
472
4
Term as KMP: Full Year
3,212
Actual Remuneration
Target Remuneration
971
1,057
Maximum Remuneration
Target Remuneration
971
1,057
4
393
4
493
4
4
4
538
578
538
1,042
965
2,988
3,102
806
493
806
900
2,861
1,641
4,314
Maximum Remuneration
971
739
739
1,530
3,983
Progress on MSR
as at 1 July 2023 ($000)
Equity granted
($000)
Unvested LTI and STI
awards ($000)
Target
1,075
Target
5,200
Target
1,075
F22 DSTI
Target
1,075
333
Vested LTI and STI
awards ($000)
including share price
uplift and DERs
985
Target
Target
1,075
Target
985
Progress on MSR
as at 1 July 2023 ($000)
Equity granted
($000)
Actual
2,595
Actual
15,538
Actual
F22–24 WISP
Actual
6,914
F23 DSTI
472
F23 DSTI
1,734
2,595
472
Actual
3,268
F21 DSTI
Actual
666
6,914
Actual
3,268
Shares
F21 DSTI
583
666
F21–23 WISP
1,013
F22 DSTI
Total
333
2,595
F23–25 WISP
1,815
F23–25 WISP
1,815
F21–23 WISP
1,013
Total
2,287
Total
4,354
Total
1,679
Shares
F21 DSTI
1,356
578
F21–23 WISP
1,042
F22 DSTI
Total
292
3,268
Unvested LTI and STI
awards ($000)
F22 DSTI
292
F22–24 WISP
1,617
Vested LTI and STI
awards ($000)
including share price
uplift and DERs
F23 DSTI
393
F23 DSTI
393
F21 DSTI
578
F23–25 WISP
1,693
F23–25 WISP
1,693
F21–23 WISP
1,042
Total
2,086
Total
3,995
Total
1,620
Actual Remuneration
1,057
472
605
1,010
Target Remuneration
1,057
538
538
965
3,148
3,102
Target Remuneration
Actual Remuneration
Maximum Remuneration
Target Remuneration
1,057
971
1,057
971
4
4
538
393
538
578
965
1,042
3,102
2,988
806
493
493
806
900
1,641
2,861
4,314
4
4
4
Maximum Remuneration
1,057
806
806
1,641
4,314
Maximum Remuneration
971
739
739
1,530
3,983
Natalie Davis (4=50)
Natalie Davis Managing Director, Woolworths Supermarkets
Stephen Harrison (4=50)
Actual remuneration received for F23 v Target and Maximum ($000)
Actual Remuneration
1,057
472
605
1,010
3,148
4
Term as KMP: Full Year
Stephen Harrison (4=50)
LEGEND
TFR
Other benefits
Cash STI
Vested DSTI
Vested LTI
Actual Remuneration
Target Remuneration
Maximum Remuneration
4
4
4
971
971
971
393
578
1,042
2,988
493
493
900
2,861
739
739
1,530
3,983
Progress on MSR
as at 1 July 2023 ($000)
Equity granted
($000)
Unvested LTI and STI
awards ($000)
Target
1,075
Target
985
F22 DSTI
Actual
6,914
Actual
3,268
F23 DSTI
F23–25 WISP
472
1,815
F22–24 WISP
F23 DSTI
F23–25 WISP
326
1,734
472
1,815
Vested LTI and STI
awards ($000)
including share price
uplift and DERs
F21 DSTI
F21–23 WISP
605
1,010
1,615
Total
2,287
Total
4,347
Total
Shares
F21 DSTI
4,973
605
F21–23 WISP
1,010
F22 DSTI
Total
326
6,914
LEGEND
TFR
Other benefits
Cash STI
Vested DSTI
Vested LTI
Brad (4=100)
Natalie Davis (4=50)
4
4
4
4
4
4
Target
5,200
Actual
15,538
Target
5,200
Actual
15,538
Target
1,075
Actual
2,595
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Remuneration Report
Executive KMP
remuneration 2
2.4
Terms of executive KMP service agreements
2.5
F24 outlook
All executive KMP are employed on service agreements that detail the components of remuneration paid but do not
prescribe how remuneration levels are to be modified from year to year. The agreements do not provide for a fixed term,
although the service agreements may be terminated on specified notice. The notice period is 12 months for the Managing
Director & CEO and 6 months for all other executive KMP. Below is a summary of the termination provisions for executive KMP.
Each year the Board reviews measures that are used in the STI and LTI plans to assess their relevance and alignment to the
Group’s strategic objectives. The Board does not intend to make any substantive changes to STI and LTI plans in F24. It is the
Committee’s intention to review the remuneration framework next year to test its ongoing effectiveness in supporting the
Group’s overall strategy.
Termination by Woolworths Group
Termination by executive KMP
Macroeconomic outlook and target setting
Where the notice period is worked:
Where the notice period is worked:
• TFR is paid in respect of and for the duration of the
• TFR is paid in respect of and for the duration of the
notice period.
notice period.
Where the notice period is paid in lieu:
Where the notice period is paid in lieu:
• TFR in respect of the notice period (and, if appropriate,
a reasonable estimate of STI) is paid as a lump sum.
In both circumstances:
•
the extent to which STI, DSTI and LTI arrangements
remain in place will be treated in accordance with the
relevant rules for the award, including any exercise
of discretion by the Board. Refer to Section 3.3 for
further details.
If termination is for cause:
• only accrued leave and unpaid total fixed remuneration
for days worked is paid
• STI, DSTI and LTI are forfeited.
• TFR in respect of the notice period is paid as a lump sum.
In both circumstances:
•
•
the extent to which STI is payable will be treated
in accordance with the relevant rules for the award,
including any exercise of discretion by the Board
unvested DSTI and LTI are treated in accordance with
the relevant rules for the award and at the discretion
of the Board. Refer to Section 3.3 for further details.
In addition, and upon further payment (where required),
the Company may invoke a restraint period of up to
12 months following separation, preventing executive KMP
from engaging in any business activity with competitors.
As operating conditions stabilise, the outlook for Woolworths Group for F24 continues to be shaped by the uncertain
domestic and international macroeconomic environment with generationally high levels of inflation and cost of living
pressure on our customers and team. F24 plans have been set cognisant of this ongoing uncertainty. Our focus will
be delivering the underlying plan while retaining the flexibility to respond to evolving customer behaviours and conditions.
Consistent with prior years, the Board will continue to monitor performance and may apply discretion to outcomes should
there be a significant divergence from the macro assumption underlying the plan.
F24 remuneration changes
The Board reviews the remuneration for executive KMP each year to test alignment to the remuneration framework outlined
in section 1.1. Following market benchmarking completed by PwC, in order to maintain market competitiveness of total target
reward packages, the Board has approved the following increases, effective 1 September 2023:
• Ms Bardwell’s TFR will increase by 2.3% to $1,100,000
• Ms Davis’ TFR will increase by 2.3% to $1,100,000
• Mr Harrison’s TFR will increase by 2.5% to $1,010,000.
The Board determined that there will be no increase for Mr Banducci in F24.
89
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Remuneration Report
3 Governance
3.1
Role of the Board
The Board reviews, challenges, applies judgement and, as appropriate, approves the People Committee’s (PC)
recommendations relating to the remuneration of executive KMP and of non-executive directors and the policies
and frameworks that govern both.
When reviewing performance and determining incentive outcomes, the Board starts from the presumption that
performance outcomes that determine incentive awards should align with market-reported outcomes, management
activity and shareholder outcomes. To achieve this alignment, the Board retains discretion over final performance and
incentive outcomes, and recognises that there are cases where adjustments should be made. The Board considers PC
recommendations and consequences of risk-related matters, including whether malus should be applied in the process
of finalising incentive and reward outcomes. In determining reward outcomes, the Board will also pay specific attention
to items that are:
• outside of the control of management
Governance 3
3.3
Treatment of unvested equity awards upon exit
For the DSTI and LTI plans, the Board has overriding discretion over the treatment of awards when an executive ceases
employment. At the 2020 AGM, shareholders again approved providing the Board with discretion to determine how unvested
share rights awards will be treated when an executive ceases employment. Shareholders will be asked to consider renewing
this approach at the 2023 AGM.
The approach the Board would expect to take when exercising this discretion is:
REASON FOR LEAVING
DEFERRED STI
UNVESTED LTI
Genuine retirement
Death, illness and incapacity
Termination for cause/gross
misconduct/poor performance
Remain on foot until the end
of the deferral period and vest
at that time
Award pro-rated for portion
of the performance period
participant has worked and
remains ‘on foot’ until the end
of the performance period
Award forfeited
Award forfeited
•
the result of portfolio/strategy changes implemented but not envisaged in the original performance targets
Resignation
Award forfeited
Award forfeited
• due to significant change in asset valuations outside the normal course of business
•
significant risk management and compliance matters.
3.2
Role of the People Committee (PC)
The PC operates under its own Charter and reports to the Board. The role of the PC is to provide advice and assistance to the
Board in relation to people management and remuneration policies, so that remuneration outcomes for senior executives
are appropriate and aligned to company performance and shareholder expectations.
The PC reviews the CEO’s proposal for performance and incentive outcomes with a risk lens. This incorporates advice
from the Chief Legal Officer, Chief Risk Officer, Chief People Officer and Head of Internal Audit, as well as consultation with
committee chairs and all directors to help inform its recommendations to the Board on the consequence of risk-related
matters on variable remuneration of the CEO and his direct reports, and overall Group STI and LTI outcomes. All directors
attend this meeting. The People Committee finalises its recommendations to the Board in a discussion where no member
of the management is present. The CEO is not present when his individual performance or remuneration is discussed.
A copy of the PC Charter is available on the website: https://www.woolworthsgroup.com.au/au/en/about-us/our-leadership-
team/board-committees.html.
The Chair of the Board and the Chair of the PC regularly engage with external stakeholders on remuneration arrangements.
Independent Remuneration Advisors
Where appropriate, the Board and the PC consult external remuneration advisors. When such external remuneration
advisors are selected, the Board considers potential conflicts of interest. Advisors’ terms of engagement regulate their
access to, and (where required) set out their independence from, members of Woolworths Group management.
The requirement for external remuneration advisor services is assessed in the context of matters the PC needs to address.
External advice is used as a guide, and does not serve as a substitute for directors’ thorough consideration of the
relevant matters.
The Board and PC engaged PwC as its independent remuneration advisor in F23 to provide market benchmarking reports.
No remuneration recommendations, as defined by the Corporations Act 2001 (Cth), were made by PwC in F23.
Mutual separation, redundancy, or other
reasons as determined by the Board
The Board will determine the treatment considering the circumstances
on a case by case basis
In cases of resignation, the Board will consider the circumstances surrounding each case. For instance, where the executive
is not resigning to join a direct competitor and all reasonable steps have been taken to continue to support the success of the
business through to their final date of employment, the Board may consider it appropriate to allow some incentive awards
to remain on foot.
In any case, where an award remains on foot post employment, the Board retains absolute discretion under the various
plan rules as to the final vesting outcome. The Board will continue to monitor the executive post employment and if they
do not meet their post-employment obligations, the Board may lapse any remaining awards. For example, in cases where:
•
•
the executive resigns to join a competitor organisation, or in the Board’s opinion the executive does not support the
business to their final day of employment, any unvested DSTI and LTI will generally lapse
the executive retires from Woolworths, but then at a later date (and prior to vesting of awards) undertakes actions
inconsistent with retirement, it may result in the Board reconsidering the treatment of any unvested awards.
The Board will disclose any exercise of discretion in relation to executive KMP in the Remuneration Report. No such discretion
was exercised in F23.
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Remuneration Report
Directors’ Arrangements 4
Non‑Executive
3.4
Other governance requirements
4 Non-executive directors’ arrangements
Hedging
policy
Malus policy
Minimum
shareholding
requirements
(MSR)
Under the securities trading policy, senior executives and other specified team members (Specified
Persons) may not enter into any derivative (including hedging) transaction that will protect the value
of either unvested securities or vested securities that are subject to a disposal restriction, issued
as part of our share plans. Compliance with the policy is a condition of participation in the plans.
The executive KMP STI and LTI arrangements are subject to malus provisions that enable the Board
to adjust unpaid and/or unvested awards (including to reduce to zero) where it is appropriate to do so.
The Board may determine that any unpaid cash STI or unvested DSTI or LTI awards will be forfeited
in the event of wilful misconduct, dishonesty or severe breach of our Code of Conduct by the
executive. The Board may also adjust these awards in cases of unexpected or unforeseen events
impacting performance outcomes, performance with regard to non-financial risk, an outcome
which would cause significant reputational damage to the Woolworths Group brand, or a broader
assessment of performance indicating there should be an adjustment.
• CEO: 200% of TFR
• Other executive KMP: 100% of TFR
• Compliance is required within five years of appointment (increased from four to five years
for CEO in F23)
• MSR includes the aggregate value of current shareholdings and unvested DSTI awards for
executive KMP.
Dividends
Shares equivalent to the value of dividends that would have been earned and reinvested over
the performance period are provided at the time of vesting. No dividend equivalent shares will
be provided on awards (or portions thereof) that do not vest.
Blackout
periods
Under the securities trading policy, Specified Persons and their closely related parties must not
deal in Woolworths Group securities during a blackout period. Blackout periods operate in the lead
up to certain key announcements, namely:
• quarter 1 sales results and Woolworths Group Annual General Meeting
• quarter 3 sales results
•
half and full year results.
The Chair, on recommendation of the Chief Legal Officer and Company Secretary, may vary
or impose a restriction during other periods where deemed appropriate. Woolworths Group
team members, including Specified Persons and their closely related parties, must also not deal
in securities if they possess inside information, whether or not a blackout period applies to them.
4.1
Non‑executive directors’ remuneration policy and structure
Non-executive director fees are paid from an aggregate annual fee pool of $4,000,000, as approved by shareholders
at the AGM on 18 November 2010. Total Board and Committee fees paid during F23 were $3,131,170 (refer to Section 5.1
for individual details).
Non-executive directors do not receive variable pay and no directors’ fees are paid to executive directors.
As outlined in the last year’s remuneration report, following a review of Board and Committee fees against the market,
the Board determined to increase the Board Chair fee to $825,000 (inclusive of superannuation) from 1 July 2022. This is the
first increase to the Board Chair’s fees since September 2017. Based on a further review conducted in F23, Board member
fees will increase by 3% to $262,640 inclusive of superannuation, effective September 2023. This is the first increase to these
fees since F19. No other changes are being made to non-executive director fees.
The table below provides a summary of the F23 Board and Committee fees:
BOARD AND COMMITTEE FEES ($)
Woolworths Group Board
Audit and Finance Committee
People Committee
Risk Committee
Sustainability Committee
Nomination Committee
CHAIR
MEMBER
F23 FEE
INCL. SUPER
F23 FEE
INCL. SUPER
825,000
254,990
65,000
65,000
65,000
65,000
Nil
32,500
32,500
32,500
32,500
Nil
4.2
Non‑executive directors’ minimum shareholding requirement
Non-executive directors are required to hold a minimum number of shares for alignment with other shareholders. The MSR is:
• Chair – 200% of the annual Chair fee within five years of appointment.
• Other non-executive directors – 100% of the annual base fee within three years of appointment.
The shares or share instruments may be held personally, by a close family member, within a self-managed superannuation
fund, or by a family trust or private company.
Details of the current shareholdings for non-executive directors as at 25 June 2023 are provided in Section 5.3.
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4.3
Non‑executive directors’ equity plan
The Non-Executive Director Equity Plan (NEDP) was introduced to encourage and facilitate share ownership. The NEDP
provides a pre-set automated mechanism for participants to acquire shares, recognising that non-executive directors can
often be limited in their ability to purchase shares because of Australian insider trading laws. Non-executive director share
rights are allocated quarterly at the same time as the underlying shares are issued to the plan’s trustee. For Australian-based
directors, these rights convert into ordinary shares each half year; and for US-based directors, these rights convert into
shares at the end of the director’s tenure or other prescribed events (with additional shares equivalent to the dividends that
would have been earned and reinvested on those rights), subject to compliance with the securities trading policy.
The NEDP supports the minimum shareholding requirement for Board members as it allows non-executive directors to reach
the minimum shareholding requirements more quickly, as shares are acquired on a pre-tax basis. Details of the share rights
allocated to non-executive directors are set out in Section 5.2.
The Group intends seeking shareholder approval to renew authorisation for the NEDP at the 2023 AGM.
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Remuneration Report
5 KMP statutory disclosures
5.1
KMP remuneration
The table below sets out the remuneration of non-executive directors of Woolworths Group Limited. Amounts represent the
payments relating to the period during which the individuals were KMP.
SHORT-TERM BENEFITS
DIRECTOR FEES
$
FEES SACRIFICED
UNDER NEDP 1
$
NON-MONETARY
AND OTHER
BENEFITS 2
$
POST EMPLOYMENT
BENEFITS 3
$
Non-executive directors
S R Perkins 4
W Bray 5
M N Brenner
J C Carr-Smith 6
P W Chronican 7
T Fellows 8
H S Kramer
K A Tesija 6
G M Cairns 4
S L McKenna 9
F23
F22
F23
F23
F22
F23
F22
F23
F22
F23
F23
F22
F23
F22
F23
F22
F23
F22
684,244
363,296
87,816
349,301
330,796
174,990
241,864
349,738
259,881
87,399
261,758
264,637
369,990
341,864
255,820
768,837
106,776
330,796
–
–
10,385
–
–
174,998
100,013
–
–
–
65,433
66,162
–
–
–
–
–
–
3,905
4,734
1,255
3,905
4,734
12,141
4,734
3,905
3,499
1,255
3,905
4,734
12,141
4,734
1,309
4,734
1,309
4,734
–
23,568
8,431
25,292
23,568
–
–
25,292
5,892
8,431
25,292
23,568
–
–
8,431
23,568
6,323
23,568
TOTAL
$
688,149
391,598
107,887
378,498
359,098
362,129
346,611
378,935
269,272
97,085
356,388
359,101
382,131
346,598
265,560
797,139
114,408
359,098
1 Fees sacrificed under NEDP represent non-executive directors’ fees sacrificed in the current period to purchase share rights under
the NEDP plus amounts sacrificed in previous periods but used to purchase share rights in the current period. Refer to Section 4.3
for further details.
2 Non-monetary and other benefits include the deemed premium in respect of the Directors’ and Officers’ Indemnity insurance and,
where applicable, travel benefits and associated fringe benefits tax.
3 Post employment benefits represent superannuation paid directly to the non-executive director’s nominated superannuation fund.
If the Group is not required to pay superannuation, the payment may be made as cash and included in director fees.
4 Mr Perkins was appointed as Chair, following the retirement of Mr Cairns as Chair, on 26 October 2022.
5 Mr Bray was appointed as a non-executive director on 1 March 2023.
6 Ms Carr-Smith’s and Ms Tesija’s director fees include an overseas director’s allowance of $10,000 per eligible flight taken during the
current and prior period.
7 During F22, Mr Chronican was appointed as a non-executive director on 1 October 2021.
8 Ms Fellows was appointed as a non-executive director on 1 March 2023.
9 Ms McKenna ceased being a non-executive director on 26 October 2022.
KMP statutory disclosure 5
5.1
KMP remuneration (continued)
The table below sets out the remuneration of executive KMP of Woolworths Group Limited. Amounts represent the payments
relating to the period during which the individuals were KMP.
SHORT-TERM BENEFITS
SHARE-BASED PAYMENTS 6
SALARY1
$
CASH
INCENTIVE 2
$
NON-
MONETARY
AND OTHER
BENEFITS 3
$
POST
EMPLOYMENT
BENEFITS 4
$
OTHER
LONG-
TERM
BENEFITS 5
$
EQUITY
GRANTS
AT RISK 7
$
OTHER
EQUITY
GRANTS 8
$
TOTAL
$
Executive KMP
B L Banducci F23 2,561,222
1,193,010
A Bardwell
F22 2,633,419
F23
F22
969,722
932,202
N Davis
F23 1,037,622
S Harrison
F22
F23
F22
947,280
933,365
887,665
766,627
471,818
300,967
471,818
294,850
393,015
263,985
3,905
4,734
3,905
4,734
3,905
4,734
3,905
4,734
27,500
27,500
97,841
85,273
27,500
27,500
27,500
27,500
36,160
2,650,623 1,239,075 7,711,495
36,490
3,227,557
861,130 7,557,457
47,767
1,041,036
460,180 3,092,269
60,158
1,047,193
312,095 2,742,622
26,583
13,785
970,204
428,321 2,965,953
931,687
283,488 2,503,324
25,394
945,385
400,840 2,729,404
12,708
1,018,755
270,978 2,486,325
1 Salary includes the net change in accrued annual leave within the period and a car allowance.
2 Cash incentive represents the cash component of the F23 STI, which was 50% of the total STI award. The remaining 50% is deferred
as share rights for two years.
3 Non-monetary and other benefits include the deemed premium in respect of the Directors’ and Officers’ Indemnity insurance and,
where applicable, relocation benefits and associated fringe benefits tax.
4 Post employment benefits represent superannuation paid directly to the executive KMP’s nominated superannuation fund. If the Group
is not required to pay superannuation, the payment may be made as cash and included in salary.
5 Other long-term benefits represents the net change in accrued long service leave within the period.
6 Share-based payments represent the portion of the fair value of share rights expected to vest and is recognised as an expense over
the vesting period. The amount recognised is adjusted to reflect the expected number of instruments that will vest for non-market
based performance conditions, including ROFE, sales per square metre and reputation. The reputation non-market based performance
condition is applicable to the F22 and F23 LTI plans, and measures brand reputation across four key metrics. No adjustment for non-vesting
is made for failure to achieve the relative TSR performance hurdle, as this is taken into account in the fair value at grant date.
7 For equity grants at risk, the fair value of share rights subject to the relative TSR performance measure is calculated at the date of grant
using a Monte Carlo simulation model, whilst the fair value of other share rights is calculated using a Black-Scholes option pricing model.
8 Other equity grants are grants which are not subject to any further performance conditions except continuous employment, subject
to the operation of the Group’s malus policy.
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KMP statutory disclosure 5
5.2
KMP share right movements
5.3
KMP share movements
The tables below summarise the movements in holdings of share right interests in Woolworths Group Limited relating to the
period during which individuals were KMP. A share right entitles the holder to one fully paid ordinary Woolworths Group Limited
share, and are subject to applicable performance and vesting conditions for executive KMPs.
SHARE RIGHTS GRANTED
UNDER THE NEDP
SHARE RIGHTS VESTED
NO.
–
–
$ 1
–
–
285
10,385
–
–
–
–
–
–
–
–
–
–
5,082
2,275
4,834
2,807
174,998
100,013
NO.
–
–
–
–
–
–
–
–
–
–
$ 2
–
–
–
–
–
–
–
–
–
–
1,816
1,810
65,433
66,162
(1,889)
(1,732)
69,865
66,539
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(1,275)
52,466
–
–
–
–
OPENING
BALANCE
NO.
–
–
–
–
–
–
–
–
951
873
–
–
–
1,275
–
–
CLOSING
BALANCE
NO.
–
–
285
–
–
9,916
5,082
–
–
–
878
951
–
–
–
–
–
–
F23
F22
F23
F23
F22
F23
F22
F23
F22
F23
F23
F22
F23
F22
F23
F22
F23
F22
Non-executive directors
S R Perkins
W Bray
M N Brenner
J C Carr-Smith
P W Chronican
T Fellows
H S Kramer
K A Tesija
G M Cairns
S L McKenna
Executive KMP
OPENING
BALANCE
NO.
SHARE RIGHTS GRANTED
SHARE RIGHTS VESTED
NO. 3
$ 4
NO.
$ 5
SHARE RIGHTS
LAPSED 6
NO.
CLOSING
BALANCE
NO.
B L Banducci
F23
480,989
152,828
4,005,508
(111,849)
(4,138,413)
(55,842)
466,126
A Bardwell 7
N Davis
S Harrison
F22
F23
F22
F23
F22
F23
F22
522,659
172,608
173,524
175,551
187,644
174,733
159,017
173,138
5,627,445
(174,586)
(7,171,993)
57,031
1,682,929
(44,655)
(1,652,235)
63,733
2,026,147
(52,711)
(2,165,368)
56,816
1,676,952
(47,718)
(1,765,566)
62,347
1,968,317
(60,410)
(2,481,643)
52,823
1,553,209
(48,371)
(1,789,727)
58,751
1,848,930
(33,351)
(1,370,059)
(40,222)
(17,183)
(11,938)
(18,729)
(14,030)
(19,330)
(9,684)
480,989
167,801
172,608
165,920
175,551
159,855
174,733
1 Amounts represent non-executive directors’ fees sacrificed in the current period to purchase share rights under the NEDP plus amounts
sacrificed in previous periods but used to purchase share rights in the current period.
2 The value of share rights vested under the NEDP during the period is calculated based on the VWAP of Woolworths Group Limited shares
traded in the five days prior to and including the date of vesting.
3 The number of share rights granted during the period includes those share rights granted in accordance with the period’s LTI and DSTI
awards. The holders of these share rights issued in accordance with the Group’s LTI and DSTI awards are entitled to dividends that would
have been paid on the underlying award over the vesting period, which are received as additional share rights (Dividend Equivalent Rights
(DERs)) on vesting of the award and as such, are included in the number of share rights granted.
4 The value of share rights granted is the total fair value of share rights granted during the period determined by an independent
actuary. This is recognised in employee benefits expense over the vesting period of the share right, in accordance with Australian
Accounting Standards.
5 The value of share rights vested during the period is calculated based on the VWAP of Woolworths Group Limited shares traded in the five
days prior to and including the date of vesting.
6 The number of share rights which lapsed as a result of failure to meet performance hurdles relates to the F20 LTI plans (F22: F19 LTI plans).
7 Ms Bardwell’s F22 opening balance is as at 28 June 2021, the date on which Ms Bardwell became an executive KMP, and includes awards
granted prior to the period during which Ms Bardwell was an executive KMP.
The table below summarises the movements of interests in shares of Woolworths Group Limited relating to the period during
which individuals were KMP.
Non-executive directors
OPENING
BALANCE
NO.
SHARES ISSUED
UNDER DRP
NO.
SHARES RECEIVED
ON VESTING OF
SHARE RIGHTS
NO.
NET SHARES
PURCHASED/
(DISPOSED)
NO.
S R Perkins
W Bray
M N Brenner
J C Carr-Smith 1
P W Chronican
T Fellows 2
H S Kramer
K A Tesija
G M Cairns
S L McKenna
Executive KMP
B L Banducci
A Bardwell 3
N Davis
S Harrison
F23
F22
F23
F23
F22
F23
F22
F23
F22
F23
F23
F22
F23
F22
F23
F22
F23
F22
F23
F22
F23
F22
F23
F22
F23
F22
17,473
17,473
–
4,040
2,731
–
–
7,000
–
193
15,007
13,275
8,980
8,980
39,956
38,681
10,897
10,815
365,729
332,643
–
8,166
159,387
98,977
37,752
58,401
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
48
82
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
1,889
1,732
–
–
–
1,275
–
–
111,849
174,586
44,655
52,711
47,718
60,410
48,371
33,351
28,500
–
–
2,700
1,309
–
–
5,000
7,000
2,513
–
–
–
–
–
–
–
–
(230,000)
(141,500)
(30,000)
(60,877)
(82,000)
–
(52,000)
(54,000)
CLOSING
BALANCE
NO.
45,973
17,473
–
6,740
4,040
–
–
12,000
7,000
2,706
16,896
15,007
8,980
8,980
39,956
39,956
10,945
10,897
247,578
365,729
14,655
–
125,105
159,387
34,123
37,752
1 The terms of the NEDP applying to US directors provide that share rights received, following salary sacrifice of NED fees, must not
vest and convert into shares before the cessation of their service as a director, or a number of other prescribed occurrences under
US securities laws. Ms Carr-Smith currently holds the equivalent of 9,916 Woolworths Group shares as set out in Section 5.2.
2 Ms Fellows’ opening balance is as at 1 March 2023, the date on which Ms Fellows became a non-executive director, and includes shares
acquired prior to the period during which Ms Fellows was a non-executive director.
3 Ms Bardwell’s F22 opening balance is as at 28 June 2021, the date on which Ms Bardwell became an executive KMP, and includes shares
acquired prior to the period during which Ms Bardwell was an executive KMP.
97
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98
Remuneration Report
KMP statutory disclosure 5
5.4
5.4
Share rights outstanding for executive KMP
Share rights outstanding for executive KMP
The table below sets out the grants and outstanding number of share rights for current executive KMP. No amounts
The table below sets out the grants and outstanding number of share rights for current executive KMP. No amounts
were paid or are payable by the recipient on receipt of the share rights and there are no outstanding vested share rights
were paid or are payable by the recipient on receipt of the share rights and there are no outstanding vested share rights
as at 25 June 2023.
as at 25 June 2023.
AWARD
AWARD
GRANT DATE 1
GRANT DATE 1
PERFORMANCE
PERFORMANCE
PERIOD START DATE
PERIOD START DATE
PERFORMANCE
PERFORMANCE
PERIOD END DATE 2
PERIOD END DATE 2
NO. OF RIGHTS
NO. OF RIGHTS
EXCLUDING DERS
EXCLUDING DERS
AS AT 25 JUNE 2023
AS AT 25 JUNE 2023
NO. OF DERS
NO. OF DERS
AS AT 25 JUNE 2023 3
AS AT 25 JUNE 2023 3
TOTAL
TOTAL
NO. OF RIGHTS
NO. OF RIGHTS
AS AT 25 JUNE
AS AT 25 JUNE
2023
2023
MAXIMUM VALUE
MAXIMUM VALUE
OF AWARD TO VEST
OF AWARD TO VEST
$ 4
$ 4
Executive KMP
Executive KMP
B L Banducci
B L Banducci
A Bardwell
A Bardwell
N Davis
N Davis
S Harrison
S Harrison
F21 WISP
F21 WISP
F21 DSTI
F21 DSTI
F22 WISP
F22 WISP
F22 DSTI
F22 DSTI
F23 WISP5
F23 WISP5
F21 WISP
F21 WISP
F21 DSTI
F21 DSTI
F22 WISP
F22 WISP
F22 DSTI
F22 DSTI
F23 WISP
F23 WISP
F21 WISP
F21 WISP
F21 DSTI
F21 DSTI
F22 WISP
F22 WISP
F22 DSTI
F22 DSTI
F23 WISP
F23 WISP
F21 WISP
F21 WISP
F21 DSTI
F21 DSTI
F22 WISP
F22 WISP
F22 DSTI
F22 DSTI
F23 WISP
F23 WISP
12/11/20
12/11/20
23/09/21
23/09/21
27/10/21
27/10/21
21/09/22
21/09/22
26/10/22
26/10/22
01/07/20
01/07/20
23/09/21
23/09/21
01/07/21
01/07/21
21/09/22
21/09/22
01/07/22
01/07/22
01/07/20
01/07/20
23/09/21
23/09/21
01/07/21
01/07/21
21/09/22
21/09/22
01/07/22
01/07/22
01/07/20
01/07/20
23/09/21
23/09/21
01/07/21
01/07/21
21/09/22
21/09/22
01/07/22
01/07/22
01/07/20
01/07/20
01/07/21
01/07/21
01/07/21
01/07/21
01/07/22
01/07/22
01/07/22
01/07/22
01/07/20
01/07/20
01/07/21
01/07/21
01/07/21
01/07/21
01/07/22
01/07/22
01/07/22
01/07/22
01/07/20
01/07/20
01/07/21
01/07/21
01/07/21
01/07/21
01/07/22
01/07/22
01/07/22
01/07/22
01/07/20
01/07/20
01/07/21
01/07/21
01/07/21
01/07/21
01/07/22
01/07/22
01/07/22
01/07/22
01/07/23
01/07/23
01/07/23
01/07/23
01/07/24
01/07/24
01/07/24
01/07/24
01/07/25
01/07/25
01/07/23
01/07/23
01/07/23
01/07/23
01/07/24
01/07/24
01/07/24
01/07/24
01/07/25
01/07/25
01/07/23
01/07/23
01/07/23
01/07/23
01/07/24
01/07/24
01/07/24
01/07/24
01/07/25
01/07/25
01/07/23
01/07/23
01/07/23
01/07/23
01/07/24
01/07/24
01/07/24
01/07/24
01/07/25
01/07/25
GRANT DATE FAIR VALUE OF PERFORMANCE
GRANT DATE FAIR VALUE OF PERFORMANCE
SHARE RIGHT 6
SHARE RIGHT 6
CEO
CEO
OTHER KMP
OTHER KMP
REPUTATION, ROFE,
REPUTATION, ROFE,
AND SALES PER SQM
AND SALES PER SQM
TSR
TSR
DSTI
DSTI
TSR
TSR
REPUTATION, ROFE, AND
REPUTATION, ROFE, AND
SALES PER SQM
SALES PER SQM
140,485
140,485
43,918
43,918
117,531
117,531
21,336
21,336
123,013
123,013
446,283
446,283
47,278
47,278
15,917
15,917
43,622
43,622
8,376
8,376
45,657
45,657
160,850
160,850
47,116
47,116
14,458
14,458
43,622
43,622
8,206
8,206
45,657
45,657
159,059
159,059
48,629
48,629
13,820
13,820
40,684
40,684
7,347
7,347
42,581
42,581
153,061
153,061
DSTI
DSTI
–
–
F21 WISP
F21 WISP
F21 DSTI
F21 DSTI
F22 WISP
F22 WISP
F22 DSTI
F22 DSTI
F23 WISP
F23 WISP
$22.13
$22.13
–
–
$19.37
$19.37
–
–
$13.47
$13.47
$38.88
$38.88
–
–
$21.07
$21.07
$36.90
$36.90
–
–
$39.76
$39.76
–
–
–
–
$39.76
$39.76
$39.85
$39.85
–
–
$20.80
$20.80
$37.51
$37.51
–
–
–
–
$35.16
$35.16
–
–
–
–
$35.16
$35.16
$32.96
$32.96
–
–
$19.77
$19.77
$35.73
$35.73
–
–
11,344
11,344
2,312
2,312
6,187
6,187
–
–
–
–
151,829
151,829
46,230
46,230
123,718
123,718
21,336
21,336
123,013
123,013
4,654,831
4,654,831
1,746,180
1,746,180
3,881,265
3,881,265
750,174
750,174
3,255,334
3,255,334
19,843
19,843
466,126
466,126
14,287,784
14,287,784
3,817
3,817
838
838
2,296
2,296
–
–
–
–
6,951
6,951
3,804
3,804
761
761
2,296
2,296
–
–
–
–
6,861
6,861
3,926
3,926
727
727
2,141
2,141
–
–
–
–
51,095
51,095
16,755
16,755
45,918
45,918
8,376
8,376
45,657
45,657
167,801
167,801
50,920
50,920
15,219
15,219
45,918
45,918
8,206
8,206
45,657
45,657
165,920
165,920
52,555
52,555
14,547
14,547
42,825
42,825
7,347
7,347
42,581
42,581
1,498,620
1,498,620
632,860
632,860
1,393,287
1,393,287
294,500
294,500
1,388,429
1,388,429
5,207,696
5,207,696
1,493,484
1,493,484
574,850
574,850
1,393,287
1,393,287
288,523
288,523
1,388,429
1,388,429
5,138,573
5,138,573
1,541,444
1,541,444
549,483
549,483
1,299,447
1,299,447
258,321
258,321
1,294,888
1,294,888
6,794
6,794
159,855
159,855
4,943,583
4,943,583
MODIFIED FAIR VALUE OF PERFORMANCE
MODIFIED FAIR VALUE OF PERFORMANCE
SHARE RIGHT 6
SHARE RIGHT 6
ALL KMP
ALL KMP
SALES PER
SALES PER
TRADING SQM AND
TRADING SQM AND
ROFE
ROFE
TSR
TSR
$18.01
$18.01
$39.22
$39.22
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
DSTI
DSTI
–
–
–
–
–
–
–
–
–
–
The minimum value of share rights is assessed as nil and has not been specifically detailed in the table above on the basis
The minimum value of share rights is assessed as nil and has not been specifically detailed in the table above on the basis
that no share rights will vest unless the performance or vesting criteria are satisfied.
that no share rights will vest unless the performance or vesting criteria are satisfied.
1 Grant date is the date on which there is a shared understanding of the terms and conditions of the share-based payment arrangement.
1 Grant date is the date on which there is a shared understanding of the terms and conditions of the share-based payment arrangement.
2 Exercise of share rights will occur the day after the full year results are announced to the market.
2 Exercise of share rights will occur the day after the full year results are announced to the market.
3 For awards commencing prior to 1 July 2022, DERs are allocated following each dividend payment and actual vesting is in line with the
3 For awards commencing prior to 1 July 2022, DERs are allocated following each dividend payment and actual vesting is in line with the
vesting of the underlying share rights. For awards commencing on or after 1 July 2022, DERs will be delivered as additional shares at the
vesting of the underlying share rights. For awards commencing on or after 1 July 2022, DERs will be delivered as additional shares at the
time of vesting on the share rights that actually vest.
time of vesting on the share rights that actually vest.
4 The maximum value of award to vest represents the total maximum value of employee benefits expense, as based on the value at grant
4 The maximum value of award to vest represents the total maximum value of employee benefits expense, as based on the value at grant
date that would be recorded if all share rights which remain outstanding at 25 June 2023 satisfied all relevant vesting conditions.
date that would be recorded if all share rights which remain outstanding at 25 June 2023 satisfied all relevant vesting conditions.
5 The F23 WISP grant to Mr Banducci was approved by shareholders at the 2022 AGM held on 26 October 2022 in accordance with listing rule 10.14.
6 The fair value of share rights with the relative TSR performance measure is calculated at the date of grant using a Monte Carlo
simulation model, taking into account the impact of the relative TSR condition whilst the fair value of other share rights are calculated
using a Black-Scholes option pricing model. The value disclosed is an input to the calculation of the grant date fair value of the share
rights recognised as an expense in each reporting period. No performance conditions, other than ongoing employment, are attached
to deferred STI share rights awards, subject to the operation of the Group’s malus policy.
7 At the end of F21, the demerger of Endeavour Group (ASX: EDV) had an impact on the operation of Woolworths Group’s share plans.
Unvested share rights or performance rights did not receive Endeavour Group shares upon demerger. This reduced the value of these
rights after Woolworths share price traded lower to reflect the demerger of Endeavour. To maintain the award values, executive KMP
received an adjustment increasing the number of share rights in the on foot plans as at 24 June 2021, being the date the team members
received an adjustment. The relative TSR performance measure is calculated using a Monte Carlo simulation model, taking into account
the impact of the relative TSR condition whilst the fair value of other share rights are calculated using a Black-Scholes option pricing
model. The value disclosed is an input to the calculation of the value of the share rights recognised as an expense in each reporting period.
99
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100
Auditor’s Independence Declaration
Deloitte Touche Tohmatsu
ABN 74 490 121 060
Quay Quarter Tower
50 Bridge Street
Sydney NSW 2000
Australia
Tel: (02) 9322 7000
www.deloitte.com.au
23 August 2023
Board of Directors
Woolworths Group Limited
1 Woolworths Way
Bella Vista NSW 2153
Dear Directors
Auditor’s Independence Declaration to Woolworths Group Limited
In accordance with section 307C of the Corporations Act 2001, we are pleased to provide the following declaration
of independence to the Board of Directors of Woolworths Group Limited.
As lead audit partners for the audit of the financial report of Woolworths Group Limited for the 52-week period
ended 25 June 2023, we declare that to the best of our knowledge and belief, there have been no contraventions of:
• The auditor independence requirements of the Corporations Act 2001 in relation to the audit;
• Any applicable code of professional conduct in relation to the audit.
Yours faithfully
DELOITTE TOUCHE TOHMATSU
Tom Imbesi
Partner
Chartered Accountants
Sydney, 23 August 2023
SIGNATURE
TO BE SUPPLIED
Travis Simkin
Partner
Chartered Accountants
Sydney, 23 August 2023
Liability limited by a scheme approved under Professional Standards Legislation.
Member of Deloitte Asia Pacific Limited and the Deloitte organisation.
2023
Financial Report
Table of Contents
Consolidated Financial Statements
Consolidated Statement of Profit or Loss
Consolidated Statement of Other Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Consolidated Financial Statements
1
General information
1.1
1.2
1.3
Basis of preparation
Other significant accounting policies
Critical accounting estimates and judgements
2
Group performance
2.1
2.2
2.3
2.4
2.5
Revenue and other income
Reportable segments
Branch and administration expenses
Employee benefits expense
Net finance costs
3
Assets and liabilities
Trade and other receivables
Inventories
3.1
3.2
3.3 Other financial assets and liabilities
3.4 Other assets
Leases
3.5
Property, plant and equipment
3.6
Commitments for capital expenditure
3.7
Intangible assets
3.8
Investments accounted for using the equity method
3.9
3.10 Impairment of non-financial assets
3.11
3.12 Trade and other payables
3.13 Provisions
Income taxes
4
Capital structure, financing, and risk management
$64,294M
Revenue, representing an
increase of 5.7% from the
prior year.
See page 111
Acquisition of
subsidiaries
During the period, the Group
acquired 100% of Shopper
Media Group Holdings Pty
Ltd and 80.2% of online
marketplace, MyDeal.com.au
Pty Limited.
See page 156
Earnings per share
Dividends
4.1
4.2
4.3 Contributed equity
4.4
4.5
Reserves
Reconciliation of profit for the period to net cash
provided by operating activities
Borrowings
Financial risk management
4.6
4.7
58 cents per
share
Final dividend declared,
representing an increase
of 9.4% compared to the
prior year.
See page 142
5
Group structure
5.1
5.2
5.3
5.4
Acquisition of subsidiaries
Subsidiaries
Parent entity information
Related parties
6
Other
Contingent liabilities
6.1
Share-based payments and share schemes
6.2
Retirement plans
6.3
6.4 Auditor’s remuneration
6.5
Subsequent events
Directors’ Declaration
Independent Auditor’s Report
101
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102
103
104
105
106
107
108
110
111
112
115
115
116
116
117
118
120
121
125
127
127
130
132
135
138
138
142
142
143
144
146
146
149
156
158
162
164
165
165
168
170
170
171
172
102
Consolidated Statement of Profit or Loss
Continuing operations
Revenue
Cost of sales
Gross profit
Other income
Branch expenses
Administration expenses
Earnings before interest and tax
Net finance costs
Profit before income tax
Income tax expense
Profit for the period from continuing operations
Discontinued operations
Profit for the period from discontinued operations, after tax
Profit for the period
Profit for the period attributable to:
Equity holders of the parent entity
Non-controlling interests
Profit for the period attributable to equity holders of the parent entity related to:
Profit from continuing operations
Profit from discontinued operations
NOTE
2.1
2.1
2.3
2.3
2.5
3.11.1
2023
$M
RESTATED 1
2022
$M
64,294
(47,118)
17,176
277
60,849
(44,878)
15,971
297
(10,770)
(10,388)
(3,684)
2,999
(677)
2,322
(693)
1,629
–
1,629
1,618
11
1,629
1,618
–
1,618
(3,189)
2,691
(600)
2,091
(534)
1,557
6,387
7,944
7,934
10
7,944
1,547
6,387
7,934
Earnings per share (EPS) attributable to equity holders of the parent entity
Basic EPS
Diluted EPS
EPS attributable to equity holders of the parent entity from continuing operations
Basic EPS
Diluted EPS
1
Refer to Note 1.1.1 for further details.
CENTS
CENTS
133.3
132.3
133.3
132.3
649.6
644.8
126.7
125.7
4.1
4.1
4.1
4.1
The above Consolidated Statement of Profit or Loss should be read in conjunction with the accompanying Notes to the
Consolidated Financial Statements.
Consolidated Statement of Other
Comprehensive Income
Profit for the period
Other comprehensive income
Items that may be subsequently reclassified to profit or loss, net of tax
Effective portion of changes in the fair value of cash flow hedges
Foreign currency translation of foreign operations
Share of other comprehensive income of associates, net of derecognition on partial disposal
Items that will not be subsequently reclassified to profit or loss, net of tax
Fair value (loss)/gain on equity investments designated as at fair value through
other comprehensive income
Actuarial (loss)/gain on defined benefit superannuation plans
Other comprehensive (loss)/income for the period
Total comprehensive income for the period
Total comprehensive income for the period attributable to:
Equity holders of the parent entity
Non-controlling interests
Total comprehensive income for the period from continuing operations attributable to:
Equity holders of the parent entity
Non-controlling interests
2023
$M
1,629
2022
$M
7,944
(80)
14
1
(6)
(2)
(73)
98
(53)
2
19
1
67
1,556
8,011
1,545
11
1,556
1,545
11
1,556
8,001
10
8,011
1,614
10
1,624
The above Consolidated Statement of Other Comprehensive Income should be read in conjunction with the accompanying
Notes to the Consolidated Financial Statements.
103
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104
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Other financial assets
Other assets
Assets held for sale
Total current assets
Non-current assets
Trade and other receivables
Other financial assets
Lease assets
Property, plant and equipment
Intangible assets
Investments accounted for using the equity method
Deferred tax assets
Other assets
Total non‑current assets
Total assets
Current liabilities
Trade and other payables
Lease liabilities
Borrowings
Current tax payable
Other financial liabilities
Provisions
Other current liabilities
Liabilities associated with assets held for sale
Total current liabilities
Non-current liabilities
Lease liabilities
Borrowings
Other financial liabilities
Provisions
Other non-current liabilities
Total non‑current liabilities
Total liabilities
Net assets
Equity
Contributed equity
Reserves
Retained earnings
Equity attributable to equity holders of the parent entity
Non-controlling interests
Total equity
NOTE
3.1
3.2
3.3
3.4
3.1
3.3
3.5.1
3.6
3.8
3.9.1
3.11.3
3.4
3.12
3.5.2
4.6.3
3.3
3.13
3.5.2
4.6.3
3.3
3.13
4.3
4.4
5.2.3
2023
$M
1,135
1,016
3,698
51
225
6,125
250
6,375
132
140
9,467
8,881
5,693
1,123
1,478
359
27,273
33,648
7,623
1,637
466
230
269
1,640
21
11,886
–
11,886
10,343
3,289
669
857
39
15,197
27,083
6,565
5,406
(7,567)
8,586
6,425
140
6,565
2022
$M
1,032
856
3,593
106
236
5,823
287
6,110
159
95
9,995
8,231
5,278
1,691
1,337
377
27,163
33,273
7,002
1,572
354
12
109
1,680
–
10,729
21
10,750
10,899
3,938
690
846
46
16,419
27,169
6,104
5,207
(7,400)
8,173
5,980
124
6,104
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying Notes
to the Consolidated Financial Statements.
ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT ENTITY
SHARE
CAPITAL
$M
SHARES
HELD IN
TRUST
$M
RESERVES
$M
RETAINED
EARNINGS
$M
2023
Balance at 26 June 2022
Profit for the period
Other comprehensive loss for the period
Total comprehensive (loss)/income for
the period
Dividends paid
Issue/(transfer) of shares to satisfy
employee long-term incentive plans
Issue of shares to satisfy the dividend
reinvestment plan
Purchase of shares by the Woolworths
Employee Share Trust
Deconsolidation of controlled entity
Recognition of non-controlling interest
from acquisition of subsidiary
Recognition of put option liability over
non-controlling interest
Share-based payments expense
5,379
(172)
(7,400)
–
–
–
–
–
–
–
–
–
–
(71)
(71)
–
132
(132)
177
–
–
–
–
–
–
(110)
–
–
–
–
–
–
3
–
(79)
112
TOTAL
$M
5,980
1,618
NON‑
CONTROLLING
INTERESTS
$M
124
11
–
TOTAL
EQUITY
$M
6,104
1,629
(73)
8,173
1,618
(2)
(73)
1,616
1,545
(1,203)
(1,203)
11
(5)
1,556
(1,208)
–
–
–
–
–
–
–
–
177
(110)
3
–
(79)
112
–
–
–
–
9
–
1
–
177
(110)
3
9
(79)
113
Balance at 25 June 2023
5,556
(150)
(7,567)
8,586
6,425
140
6,565
ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT ENTITY
2022
Balance at 27 June 2021
Profit for the period
Other comprehensive income for the
period
Total comprehensive income for the
period
Dividends paid
Share buy-back
Demerger of Endeavour Group
Issue/(transfer) of shares to satisfy
employee long-term incentive plans
Issue of shares to satisfy the dividend
reinvestment plan
Purchase of shares by the Woolworths
Employee Share Trust
Recognition of non-controlling interest
from acquisition of subsidiary
Recognition of put option liability over
non-controlling interest
Purchase of additional shares from non-
controlling interest
Share-based payments expense
SHARE
CAPITAL
$M
SHARES
HELD IN
TRUST
$M
RESERVES
$M
RETAINED
EARNINGS
$M
5,466
(213)
(6,989)
–
–
–
–
(250)
–
–
–
–
–
–
–
–
–
66
66
–
–
(43)
166
(166)
163
–
–
–
–
–
–
(125)
–
–
–
–
–
–
–
(411)
4
139
3,115
7,934
7,935
(1,170)
(1,750)
43
–
–
–
–
–
–
–
1
67
NON‑
CONTROLLING
INTERESTS
$M
360
10
–
10
(5)
–
(282)
–
–
–
TOTAL
EQUITY
$M
1,739
7,944
67
8,011
(1,175)
(2,000)
(282)
–
163
(125)
TOTAL
$M
1,379
7,934
8,001
(1,170)
(2,000)
–
–
163
(125)
–
45
45
(411)
4
139
–
(4)
–
(411)
–
139
6,104
Balance at 26 June 2022
5,379
(172)
(7,400)
8,173
5,980
124
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying Notes
to the Consolidated Financial Statements.
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Consolidated Statement of Cash Flows
Notes to the Consolidated Financial Statements
for the period ended 25 June 2023
NOTE
2023
$M
2022
$M
1 General information
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Payments for the interest component of lease liabilities
3.5.2
Finance costs paid on borrowings
Income tax paid
Net cash provided by operating activities
Cash flows from investing activities
Proceeds and advances from the sale of property, plant and equipment
Payments for property, plant and equipment and intangible assets
Proceeds from the sale of subsidiaries and investments, net of cash disposed
Payments for the purchase of businesses, net of cash acquired
Payments for the purchase of investments
Net proceeds from/(advances to) related parties
Dividends received
Net cash used in investing activities
Cash flows from financing activities
Repayment of principal component of lease liabilities
Proceeds from borrowings
Repayment of borrowings
Proceeds from loan to related party
Distribution to related party
Payments for share buy-back
Dividends paid
Dividends paid to non-controlling interests
Payments for shares held in trust
Net cash used in financing activities
Net increase/(decrease) in cash and cash equivalents
Effects of exchange rate changes on cash and cash equivalents
Cash and cash equivalents at start of period
Cash and cash equivalents at end of period 1
68,275
(62,259)
64,538
(59,721)
(542)
(133)
(587)
(542)
(59)
(838)
4.5
4,754
3,378
361
(2,519)
659
(373)
(30)
15
43
332
(2,416)
53
(425)
(32)
(20)
51
(1,844)
(2,457)
3.5.2
4.6.4
4.6.4
(1,067)
351
(952)
–
–
–
4.2
(1,026)
(5)
(110)
(1,019)
2,513
(969)
1,712
(437)
(2,000)
(1,007)
(5)
(125)
(2,809)
(1,337)
101
2
1,032
1,135
(416)
2
1,446
1,032
1
Included in cash and cash equivalents is $665 million (2022: $633 million) relating to receivables from credit card merchants for electronic
funds transfers, credit card and debit card point of sale transactions, of which $92 million (2022: $90 million) is relating to payables
to Endeavour Group Limited.
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying Notes to the
Consolidated Financial Statements.
107
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a
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2
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a
i
1.1
Basis of preparation
This section describes the financial reporting framework within which the Consolidated
Financial Statements are prepared.
Woolworths Group Limited (the Company) is a for-profit company which is incorporated and domiciled in Australia.
The Financial Report of the Company is for the 52-week period ended 25 June 2023 and comprises the Company and
its subsidiaries (together referred to as the Group). The comparative period is for the 52-week period ended 26 June 2022.
The Consolidated Financial Statements are presented in Australian dollars and amounts have been rounded to the nearest
million dollars unless otherwise stated, in accordance with ASIC Corporations (Rounding in Financial/Directors’ Reports)
Instrument 2016/191.
The Financial Report was authorised for issue by the directors on 23 August 2023.
1.1.1
Basis of accounting
The Consolidated Financial Statements of the Group are general purpose financial statements, which have been prepared
in accordance with the Corporations Act 2001, Australian Accounting Standards, and other authoritative pronouncements
issued by the Australian Accounting Standards Board (AASB). Compliance with Australian Accounting Standards ensures
that the Financial Report complies with International Financial Reporting Standards (IFRS) as issued by the International
Accounting Standards Board (IASB). Consequently, this Financial Report has been prepared in accordance with and complies
with IFRS as issued by the IASB.
The Consolidated Financial Statements have been prepared on the historical cost basis, except for financial instruments
that are measured at revalued amounts or fair values as at the end of each reporting period, as explained in the accounting
policies. The accounting policies have been applied consistently to all periods presented in the Consolidated Financial
Statements, unless otherwise stated.
Certain comparative amounts have been reclassified to conform with the current period’s presentation. This includes the
reclassification of the costs of running the distribution centres from branch and administration expenses to cost of sales,
which is consistent with the Group’s current recognition of freight costs within cost of sales. This has resulted in better
overall visibility of the margins of the products that the Group sells to enable appropriate accountability and support better
end-to-end decision making. Separately, the Group has reclassified the presentation of its eCommerce overheads from
cost of sales to branch and administration expenses to align with the current period’s presentation of other similar costs,
such as store labour in branch and administration expenses.
This has resulted in the following reclassifications for the comparative period within the Consolidated Statement of Profit or Loss:
2022
Revenue
Cost of sales
Gross profit
Other income
Branch and administration expenses
Earnings before interest and tax
AS PREVIOUSLY
REPORTED
$M
ADJUSTMENT
$M
RESTATED
$M
60,849
(42,807)
18,042
297
(15,648)
2,691
–
(2,071)
(2,071)
–
2,071
–
60,849
(44,878)
15,971
297
(13,577)
2,691
For segment reporting purposes, the Australian Food segment now includes amounts relating to Woolworths at Work,
the Group’s B2B-focused eCommerce business, which was previously reported in Australian B2B. This better reflects the
integrated nature of Woolworths at Work within Australian Food, in particular, the fulfilment of Woolworths at Work orders
from supermarkets and customer fulfilment centres. As a result, the comparative amounts for both the Australian Food
and Australian B2B reportable segments have been restated in Note 2.2.1 and Note 2.2.2.
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Notes to the Consolidated Financial Statements
General information 1
1.1
Basis of preparation (continued)
1.2
Other significant accounting policies (continued)
1.1.2
Going concern
The directors have, at the time of approving the Financial Report, a reasonable expectation that the Group has adequate
resources to continue in operational existence for the foreseeable future. The going concern basis of accounting has been
determined after taking into consideration all available information at the time of approving the Financial Report.
Notwithstanding that the Group’s working capital position is in a net current liability position as at 25 June 2023 of
$5,511 million (2022: net current liability position of $4,640 million), the directors continually monitor the Group’s working
capital position, including forecast working capital requirements, and are satisfied that the Group’s current cash reserves,
expected cash flows from operations, and available facilities will enable the Group to pay its debts as and when they fall
due. The net current liability position is principally due to the fast turning nature of inventories, the timing of payments
to suppliers, the use of available funds to support investments that are classified as non-current assets, and the Group’s
current lease obligations.
1.1.3
Basis of consolidation
The Consolidated Financial Statements incorporate the financial statements of the Company and entities controlled by the
Company (its subsidiaries) during the period. Control is achieved when the Company:
• Has power over the investee;
•
Is exposed to, or has rights to, variable returns from its involvement with the investee; and
• Has the ability to use its power to affect its returns.
The Company reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes
to one or more of the three elements of control listed above. When the Company has less than a majority of the voting rights
of an investee, it considers that it has power over the investee when the voting rights are sufficient to give it the practical
ability to direct the relevant activities of the investee unilaterally.
Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and ceases when the Company
loses control of the subsidiary. Specifically, the results of a subsidiary acquired or disposed of during the period is included
in the Consolidated Statement of Profit or Loss from the date the Company gains control until the date when the Company
ceases to control the subsidiary.
All intragroup assets and liabilities, equity, income, expenses, and cash flows relating to transactions between the Company
and its subsidiaries are eliminated on consolidation.
Non-controlling interests in subsidiaries are identified separately from the Group’s equity and are initially measured
at fair value or at the non-controlling interests’ proportionate share of the fair value of the identifiable net assets.
This election is made on an acquisition-by-acquisition basis. Subsequent to acquisition date, the carrying amounts
of non-controlling interests are adjusted for the non-controlling interests’ share of changes in equity.
1.2
Other significant accounting policies
This section sets out the significant accounting policies upon which the Group’s
Consolidated Financial Statements are prepared as a whole, and that are not
otherwise described in the Notes to the Consolidated Financial Statements.
Where a significant accounting policy is specific to a note to the Consolidated
Financial Statements, the policy is described within that note.
1.2.2
Foreign currency
(I)
FUNCTIONAL AND PRESENTATION CURRENCY
Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary
economic environment in which the entity operates (the functional currency). The Consolidated Financial Statements are
presented in Australian dollars (AUD), which is the Company’s functional currency.
(II)
FOREIGN CURRENCY TRANSACTIONS (ENTITIES WITH A FUNCTIONAL CURRENCY OF AUD)
Foreign currency transactions are translated into AUD using the exchange rates at the dates of the transactions. Assets
and liabilities denominated in foreign currencies are translated to AUD at the reporting date at the following exchange rates:
FOREIGN CURRENCY AMOUNT
Monetary assets and liabilities
APPLICABLE EXCHANGE RATE
Reporting date
Non-monetary assets and liabilities measured at historical cost
Date of transaction
Foreign exchange differences arising on translation are recognised in the Consolidated Statement of Profit or Loss in the
period in which they arise except:
• Exchange differences on transactions entered to hedge certain foreign currency risks (refer to Note 4.7); and
•
Items noted within paragraph (iii).
(III)
FOREIGN OPERATIONS (ENTITIES WITH A FUNCTIONAL CURRENCY OTHER THAN AUD)
The profit or loss and financial position of foreign operations are translated to AUD at the following exchange rates:
FOREIGN CURRENCY AMOUNT
Revenues and expenses
APPLICABLE EXCHANGE RATE
Average for the period
Assets and liabilities, including goodwill and fair value adjustments arising on consolidation
Reporting date
Equity items
Historical rates
The following foreign exchange differences are recognised in Consolidated Statement of Other Comprehensive Income:
•
Foreign currency differences arising on translation of foreign operations; and
• Exchange differences arising from a monetary item receivable from or payable to a foreign operation, the settlement
of which is neither planned nor likely in the foreseeable future. These monetary items and related hedges form part
of the net investment in a foreign operation, and are reclassified into the Consolidated Statement of Profit or Loss upon
disposal of the net investment.
1.2.3
Goods and Services Tax (GST)
Revenue, expenses, and assets are recognised net of GST, except where the GST incurred is not recoverable from the
taxation authority, in which case, the GST is recognised as part of the expense or cost of the asset. Receivables and payables
are stated with the amount of GST included. The net amounts of GST recoverable from or payable to the taxation authorities
are included as a current asset or current liability in the Consolidated Statement of Financial Position. Cash flows are
included in the Consolidated Statement of Cash Flows on a gross basis. The GST components of cash flows arising from
investing and financing activities, which are recoverable from or payable to taxation authorities, are classified as operating
cash flows.
1.2.4
New and amended standards that are effective for the current year
The Group has adopted all the new and amended standards and interpretations issued by the AASB, which are effective for
annual reporting periods beginning on or after 27 June 2022. None of the new standards or amendments to the standards
that are mandatory for the first time materially affected any of the amounts recognised in the current or prior period.
1.2.1
Non-current assets classified as held for sale
Non-current assets classified as held for sale are measured at the lower of carrying amount and fair value less costs to sell.
1.2.5
Issued standards and interpretations not early adopted
Non-current assets are classified as held for sale if their carrying amount will be recovered through a sale transaction rather
than through continuing use. This condition is met only when the sale is highly probable, the asset is available for immediate
sale in its present condition, and the sale is expected to occur within one year from the date of classification.
The AASB has issued a number of standards and interpretations, which are not effective until future reporting periods.
Notwithstanding that the Group has not yet adopted these issued standards and interpretations, the impact on adoption
is not expected to have a significant impact on the Consolidated Financial Statements.
109
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110
Notes to the Consolidated Financial Statements
Group performance 2
1.2
Other significant accounting policies (continued)
2 Group performance
SUSTAINABILITY DISCLOSURE STANDARDS
During the period, the International Sustainability Standards Board (ISSB) published the following sustainability
reporting standards:
•
•
IFRS S1 General Requirements of Sustainability-related Financial Information, which sets out the core content
for a complete set of sustainability-related financial disclosures, thereby establishing a comprehensive baseline
of sustainability-related financial information; and
IFRS S2 Climate-related Disclosures, which will require the Group to provide information that enables the users of its
financial statements to understand the Group’s governance, strategy, risk management, and metrics and targets
in relation to climate-related risks and opportunities.
Notwithstanding that these standards are not mandatory for adoption for the financial period ended 25 June 2023,
the Group acknowledges the growing importance of sustainability-related disclosures, and has considered the potential
impacts of sustainability-related matters within the following notes:
• Note 3.6 – Property, plant and equipment;
• Note 3.10 – Impairment of non-financial assets;
• Note 3.13 – Provisions; and
• Note 4.6 – Borrowings.
These standards will be effective for the Group for the annual reporting period beginning on or after 1 July 2024.
AASB 17 INSURANCE CONTRACTS
AASB 17 Insurance Contracts (AASB 17) establishes the principles for the recognition, measurement, presentation and
disclosure of insurance contracts and supersedes AASB 4 Insurance Contracts (AASB 4).
The date of initial application of AASB 17 is for the annual reporting period beginning on or after 26 June 2023. The parent
entity will be impacted by the application of AASB 17 as it is a licensed self-insurer for workers’ compensation insurance
in New South Wales, Queensland, Western Australia, South Australia, Tasmania and Northern Territory, and therefore
provides insurance to its subsidiaries. The Group is currently determining the final impact on the parent entity disclosures.
1.3
Critical accounting estimates and judgements
This section describes the critical accounting estimates and judgements that
have been applied and may have a material impact on the Group’s Consolidated
Financial Statements.
In applying the Group’s accounting policies, the directors are required to make estimates, judgements, and assumptions
that affect amounts reported in this Financial Report. The estimates, judgements, and assumptions are based on historical
experience, adjusted for current market conditions, and other factors that are believed to be reasonable under the
circumstances, and are reviewed on a regular basis. Actual results may differ from these estimates.
The estimates and judgements which involve a higher degree of complexity or that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities within the next period are included in the following notes:
• Note 3.3 – Other financial assets and liabilities;
• Note 3.5 – Leases;
• Note 3.10 – Impairment of non-financial assets; and
• Note 3.13 – Provisions.
Revisions to accounting estimates are recognised prospectively.
2.1
Revenue and other income
Revenue primarily comprises the sale of goods in‑store and online.
Revenue by category
Sale of goods in-store
Sale of goods online
Other revenue 1
Total revenue
Revenue by geographical location 2
Australia
New Zealand
Total revenue
Other income
Share of profit of investments accounted for using the equity method
Other3
Total other income
2023
$M
2022
$M
52,615
6,592
5,087
64,294
57,054
7,240
64,294
56
221
277
49,856
6,542
4,451
60,849
53,757
7,092
60,849
68
229
297
1 Other revenue primarily comprises revenue from the distribution of food and related products for resale to other businesses, provision
of supply chain services to business customers, revenue from the provision of financial services, consulting revenue, and revenue relating
to the Endeavour Group Partnership Agreements.
2 Revenue by geographical location is allocated based on either the location in which the sales originated or location of the operation to which
they relate.
3 Other income comprises operating lease rental income, income from non-operating activities across the Group, and other income earned
from the Endeavour Group Partnership Agreements.
Significant Accounting Policies
Sale of goods in‑store
Revenue from the sale of goods in‑store is recognised when control of the goods is transferred
to the customer. The amount recognised reflects the consideration to which the Group expects
to be entitled in exchange for those goods.
Sale of goods online
Revenue from the sale of goods online is recognised when control of the goods passes to the
customer, which is typically at the point the goods are delivered to, or collected by the customer.
Where payment is received prior to the transfer of control to the customer, the revenue is deferred
in contract liabilities within trade and other payables in the Consolidated Statement of Financial
Position until the goods have been delivered to, or collected by the customer.
111
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Notes to the Consolidated Financial Statements
Group performance 2
2.2
Reportable segments
2.2
Reportable segments (continued)
This section presents the financial performance of each reportable segment and
other individually significant items.
2022
Revenue 2
Other income
RESTATED 1
AUSTRALIAN
FOOD
$M
RESTATED 1
AUSTRALIAN
B2B
$M
NEW ZEALAND
FOOD
$M
BIG W
$M
45,740
3,684
7,092
4,431
–
–
–
–
2.2.1
Financial performance of the Group’s reportable segments
Total revenue and other income
45,740
3,684
7,092
4,431
CONSOLIDATED
CONTINUING
OPERATIONS
$M
60,849
297
61,146
OTHER
$M
(98)
297
199
Reportable segments are identified on the basis of internal reports on the business units of the Group that are regularly
reviewed by the Chief Operating Decision Makers, in order to allocate resources to the segment and assess its performance.
These reportable segments offer different products and services, or service different customer types, and are
managed separately.
The Group’s reportable segments are as follows:
• Australian Food – procurement of food and related products for resale and provision of services to retail customers
in Australia;
• Australian B2B – procurement and distribution of food and related products for resale to other businesses and provision
of supply chain services to business customers in Australia;
• New Zealand Food – procurement of food and drinks for resale and provision of services to retail and wholesale
customers in New Zealand;
• BIG W – procurement of discount general merchandise products for resale to retail customers in Australia; and
• Other – comprises Quantium and MyDeal, which are not considered separately reportable segments, as well as various
support functions, including property and Group overhead costs, the Group’s share of profit or loss of investments
accounted for using the equity method, and consolidation and elimination journals.
During the period, the Group restructured the way in which it reports Woolworths at Work, the Group’s B2B-focused
eCommerce business. Woolworths at Work is highly integrated with Australian Food through ranging and the fulfilment
of orders from supermarkets and customer fulfilment centres. As a result, the Group has realigned and represented the
reporting of Woolworths at Work from Australian B2B to Australian Food in the prior year. This also reflects the way in which
information is provided to and regularly reviewed by the Group’s Chief Operating Decision Makers.
The primary reporting measure of the reportable segments is earnings before interest, tax, and significant items which
is consistent with the way management monitors and reports the performance of these segments. The following is an analysis
of the Group’s revenue and results by reportable segment.
2023
Revenue 1
Other income
AUSTRALIAN
FOOD
$M
AUSTRALIAN
B2B
$M
NEW ZEALAND
FOOD
$M
BIG W
$M
48,047
4,324
7,240
4,785
–
–
–
–
Total revenue and other income
48,047
4,324
7,240
4,785
CONSOLIDATED
CONTINUING
OPERATIONS
$M
64,294
277
64,571
OTHER
$M
(102)
277
175
Earnings/(loss) before interest, tax,
and significant items
Significant items 2
Earnings before interest and tax
Finance costs
Profit before income tax
Income tax expense
Profit for the period from continuing
operations
2,865
63
228
145
(185)
3,116
(117)
2,999
(677)
2,322
(693)
1,629
1 Revenue in Australian B2B includes $351 million of freight revenue for products sold by the Group. However, at a Group level, this
is recognised as a reduction in cost of sales. As a result, a $351 million reduction in revenue, with a corresponding reduction in cost
of sales, has been recognised in the Other segment. At a Group level, this has not resulted in a change to earnings before interest and tax.
2 Refer to Note 2.2.3 for further details.
Earnings/(loss) before interest, tax,
and significant items
Significant items 3
Earnings before interest and tax
Finance costs
Profit before income tax
Income tax expense
Profit for the period from continuing
operations
2,406
56
296
55
(123)
2,690
1
2,691
(600)
2,091
(534)
1,557
1 Restated to conform with the current structure of the Group in which Woolworths at Work is included within the Australian Food
reportable segment. Refer to Note 1.1.1 for further details.
2 Revenue in Australian B2B includes $302 million of freight revenue for products sold by the Group. However, at a Group level, this
is recognised as a reduction in cost of sales. As a result, a $302 million reduction in revenue, with a corresponding reduction in cost
of sales, has been recognised in the Other segment. At a Group level, this has not resulted in a change to earnings before interest and tax.
3 Refer to Note 2.2.3 for further details.
2.2.2
Other disclosures of the Group’s reportable segments
2023
Depreciation – lease assets
Depreciation – property, plant and
equipment
Amortisation – intangible assets
Capital expenditure 1
2022
Depreciation – lease assets
Depreciation – property, plant and
equipment
Amortisation – intangible assets
Capital expenditure 1
AUSTRALIAN
FOOD
$M
AUSTRALIAN
B2B
$M
NEW ZEALAND
FOOD
$M
727
759
300
1,162
60
20
33
58
129
136
31
255
RESTATED 2
AUSTRALIAN
FOOD
$M
RESTATED 2
AUSTRALIAN
B2B
$M
NEW ZEALAND
FOOD
$M
703
692
243
1,331
58
16
24
70
122
125
30
274
BIG W
$M
99
71
33
135
BIG W
$M
105
60
25
148
CONSOLIDATED
CONTINUING
OPERATIONS
$M
1,066
1,023
489
2,482
CONSOLIDATED
CONTINUING
OPERATIONS
$M
1,039
935
387
2,407
OTHER
$M
51
37
92
872
OTHER
$M
51
42
65
584
1 Capital expenditure comprises the purchase of property, plant and equipment, and intangible assets.
2 Restated to conform with the current structure of the Group in which Woolworths at Work is included within the Australian Food
reportable segment. Refer to Note 1.1.1 for further details.
113
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a
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R
e
p
o
r
t
2
0
2
3
l
W
o
o
w
o
r
t
h
s
G
r
o
u
p
1
i
h
g
h
l
i
g
h
t
s
P
e
r
f
o
r
m
a
n
c
e
2
r
e
v
e
w
i
B
u
s
i
n
e
s
s
3
R
e
p
o
r
t
D
i
r
e
c
t
o
r
s
'
4
R
e
p
o
r
t
i
F
n
a
n
c
a
i
l
5
O
t
h
e
r
i
n
f
o
r
m
a
t
i
o
n
114
Notes to the Consolidated Financial Statements
Group performance 2
2.2
Reportable segments (continued)
2.3
Branch and administration expenses
2.2.3
Individually significant items
Individually significant items have been highlighted to help users of this Financial Report to understand the financial performance
of the Group during the period. The significant items recognised in the Consolidated Statement of Profit or Loss are as follows:
Continuing operations
Supply chain network review
Exit of the Summergate business
End-to-end payroll review remediation
Revaluation of put option liabilities over non-controlling interests
BIG W network review
Other
Total significant items before income tax from continuing operations
Income tax benefit 1
Total significant items from continuing operations
Discontinued operations
Gain on demerger of Endeavour Group
Total Group significant items
2023
$M
(32)
(30)
(61)
(41)
47
–
(117)
14
(103)
–
(103)
2022
$M
24
–
(165)
164
–
(22)
1
32
33
6,387
6,420
1 Comprises an income tax benefit of $28 million relating to end-to-end payroll review remediation and supply chain network review, offset
by an income tax expense of $14 million relating to the BIG W network review (2022: income tax benefit of $50 million relating to end-to-end
payroll review remediation, offset by an income tax expense of $7 million relating to supply chain network review and $11 million of other).
The individually significant items of $117 million recognised before income tax during the period, of which $28 million and
$89 million was recognised in cost of sales and branch and administration expenses respectively, are as follows:
Supply chain network review
As part of the Group’s ongoing supply chain network strategy and transformation, provisions for redundancy costs
associated with the announced closure of four distribution centres in New South Wales and Victoria were recognised
in prior periods. During the period, the Group reassessed the provision for redundancy costs and recognised an additional
$32 million predominantly relating to increases in wage rates and redundancy terms specific to the relevant Enterprise
Agreements (EAs) for impacted team members, as agreed in EA negotiations during the period.
Exit of the Summergate business
During the period, the Group completed the sale of Summergate, the Group’s alcoholic drinks distributor in China. The net
assets and liabilities of the business were sold, with the purchaser assuming all ongoing trading liabilities of the business.
This resulted in the Group recognising a net loss of $30 million during the period, reflecting the write down of net assets,
primarily inventory and receivables, as part of the exit process.
End-to-end payroll review remediation
As part of the Group’s end-to-end payroll review remediation program, the Group completed its remaining compliance testing
and finalised remediation estimates relating to its multi-year review program. The analysis included the Group’s supply chain
operations, which had not been previously reviewed. During the period, the Group recognised a significant item provision
of $61 million for prior period payment shortfalls due to non-compliance with EAs for hourly paid team members and other
one-off remediation charges, such as interest and oncosts, predominantly across the Group’s supply chain operations.
Revaluation of put option liabilities over non-controlling interests
The Group has recognised put option liabilities over its non-controlling interests of PFD, Quantium, and MyDeal. At each
reporting period, the put option liabilities are reassessed to reflect the present value of the Group’s best estimate of the
amounts expected to be paid at the time of exercise. During the period, a net revaluation expense of $41 million was
recognised, primarily driven by higher than forecast earnings and reductions in forecast net debt.
BIG W network review
The Group previously announced the planned closure of certain BIG W stores and recognised onerous contract provisions
relating to the anticipated costs of lease terminations. Ongoing negotiations with landlords resulted in a preferred strategy
to exit these stores at the end of their current lease term. As a consequence, exit payments are no longer required, and
therefore, the onerous contract provisions were reassessed and a $47 million gain was recognised during the period.
Branch and administration expenses mainly include employee benefits expense,
depreciation and amortisation expense, occupancy expenses, and contract
labour costs.
Employee benefits expense
Depreciation and amortisation expense 2
Occupancy expenses
Contract labour
Other3
Total branch and administration expenses
Branch expenses
Administration expenses
Total branch and administration expenses
1 Refer to Note 1.1.1 for further details.
2 Depreciation and amortisation expense included in cost of sales is $269 million (2022: $229 million).
3 Other primarily comprises light and power, IT and repairs and maintenance expenses.
2.4
Employee benefits expense
2023
$M
8,762
2,309
611
832
1,940
14,454
10,770
3,684
14,454
RESTATED 1
2022
$M
8,557
2,132
624
745
1,519
13,577
10,388
3,189
13,577
Employee benefits expense reflects employee entitlements recognised during the
period in the Consolidated Statement of Profit or Loss.
Remuneration and on-costs
Superannuation expense
Share-based payment expense
Total employee benefits expense
Cost of sales
Branch and administration expenses
Total employee benefits expense
2023
$M
9,125
749
113
9,987
1,225
8,762
9,987
2022
$M
8,812
687
139
9,638
1,081
8,557
9,638
Significant Accounting Policies
Employee benefits expense
Remuneration, on‑costs and superannuation costs are mainly expensed as the related service
is provided. A liability is recognised for the amount expected to be paid if the Group has a present
legal or constructive obligation to pay this amount as a result of past service provided by the
employee and the obligation can be estimated reliably. Refer to Note 3.13, Note 6.2 and Note 6.3 for
further details on employee provisions, share‑based payment expense, and superannuation expense.
115
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a
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e
p
o
r
t
2
0
2
3
l
W
o
o
w
o
r
t
h
s
G
r
o
u
p
1
i
h
g
h
l
i
g
h
t
s
P
e
r
f
o
r
m
a
n
c
e
2
r
e
v
e
w
i
B
u
s
i
n
e
s
s
3
R
e
p
o
r
t
D
i
r
e
c
t
o
r
s
'
4
R
e
p
o
r
t
i
F
n
a
n
c
a
i
l
5
O
t
h
e
r
i
n
f
o
r
m
a
t
i
o
n
116
Notes to the Consolidated Financial Statements
Assets and liabilities 3
2.5
Net finance costs
3.1
Trade and other receivables (continued)
Net finance costs mainly includes interest on borrowings, derivatives,
and lease liabilities.
Interest expense 1
Less: interest capitalised 2
Interest income 3
Total net finance costs
2023
$M
726
(28)
(21)
677
2022
$M
632
(13)
(19)
600
1
Interest expense includes interest on leases of $542 million (2022: $542 million), interest on borrowings and derivatives of $169 million
(2022: $77 million), and interest expense on put option liabilities of $15 million (2022: $13 million).
2 Weighted average capitalisation rate is 3.55% (2022: 2.02%).
3
Interest income recognised by the Group, in its capacity as a lessor, over the lease term. Refer to Note 3.4 for further details.
Significant Accounting Policies
Finance costs
Interest expense comprises interest on lease liabilities, which is calculated using the incremental
borrowing rate and interest on borrowings, which is calculated using the effective interest
method and interest on derivatives. Interest costs that are directly attributable to the acquisition,
construction, or production of an asset that takes a substantial period of time to complete and
prepare the asset for its intended use or sale are capitalised into the initial cost of the asset.
Interest income and all other finance costs are recognised in the Consolidated Statement of Profit
or Loss in the period in which they are incurred.
3 Assets and liabilities
3.1
Trade and other receivables
Trade and other receivables consist of amounts owed to the Group by customers
for the sale of goods and services in the ordinary course of business.
Current
Trade receivables
Loss allowance
Trade receivables
Other receivables 1
Loss allowance
Other receivables
Total current trade and other receivables
Non‑current
Trade and other receivables
Total non‑current trade and other receivables
Total trade and other receivables
1
Includes supplier rebates of $76 million (2022: $82 million).
2023
$M
395
(4)
391
629
(4)
625
1,016
132
132
1,148
2022
$M
278
(5)
273
586
(3)
583
856
159
159
1,015
Significant Accounting Policies
Trade and other receivables
Trade and other receivables are recognised initially at fair value and are subsequently measured
at amortised cost using the effective interest method, less a loss allowance. They generally have
terms of up to 30 days.
Impairment of trade and other receivables
The Group assesses the expected credit losses associated with its trade and other receivables
on a forward‑looking basis.
The Group applies the simplified approach to measuring expected credit losses, which requires
expected lifetime losses to be recognised from initial recognition of the receivables. To measure
the expected credit losses, trade and other receivables that share similar credit risk characteristics
are grouped together and then assessed for collectability as a whole.
3.2
Inventories
Inventories primarily comprises finished goods.
Inventories
Provision for inventory obsolescence
Total inventories
2023
$M
3,785
(87)
3,698
2022
$M
3,670
(77)
3,593
Cost of inventories recognised as an expense within cost of sales during the period was $46,057 million (2022: $43,901 million).
Significant Accounting Policies
Inventories
Inventories are stated at the lower of cost and net realisable value.
Cost comprises direct materials and, where applicable, direct labour costs and those overheads
that have been incurred in bringing the inventories to their present location and condition.
Cost is calculated using the weighted average cost method.
Net realisable value represents the estimated selling price less all estimated costs of completion
and all costs to be incurred in marketing, selling and distribution.
117
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0
2
3
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W
o
o
w
o
r
t
h
s
G
r
o
u
p
1
i
h
g
h
l
i
g
h
t
s
P
e
r
f
o
r
m
a
n
c
e
2
r
e
v
e
w
i
B
u
s
i
n
e
s
s
3
R
e
p
o
r
t
D
i
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e
c
t
o
r
s
'
4
R
e
p
o
r
t
i
F
n
a
n
c
a
i
l
5
O
t
h
e
r
i
n
f
o
r
m
a
t
i
o
n
118
Notes to the Consolidated Financial Statements
Assets and liabilities 3
3.3
Other financial assets and liabilities
3.3
Other financial assets and liabilities (continued)
Other financial assets and liabilities mainly comprise derivatives, investments in unlisted
equity securities, and put option liabilities over non‑controlling interests.
PUT OPTION LIABILITIES OVER NON-CONTROLLING INTERESTS
Put option liabilities over non-controlling interests were recognised for PFD, Quantium, and MyDeal based on the present
value of the amounts expected to be paid at the time of exercise.
2023
$M
2022
$M
PUT OPTION
LIABILITY
NON‑CONTROLLING
INTEREST
DATE EXERCISABLE
FROM
PUT OPTION LIABILITY MECHANISM
Other financial assets
Current
Derivatives
Total current other financial assets
Non‑current
Derivatives
Unlisted equity securities
Other
Total non‑current other financial assets
Total other financial assets
Other financial liabilities
Current
Derivatives
Put option liabilities over non-controlling interests
Total current other financial liabilities
Non‑current
Derivatives
Put option liabilities over non-controlling interests
Total non‑current other financial liabilities
Total other financial liabilities
DERIVATIVES
51
51
62
75
3
140
191
97
172
269
76
593
669
938
106
106
17
60
18
95
201
34
75
109
135
555
690
799
The Group uses various types of derivatives to hedge exposures to variability in both interest rates and foreign exchange
rates. Refer to Note 4.7.4 for further details.
UNLISTED EQUITY SECURITIES
The Group has various investments in unlisted equity securities. Refer to Note 4.7.4 for further details.
OTHER FINANCIAL ASSETS
Other includes $2 million (2022: $5 million) of SAFE (Simple Agreement for Future Equity) notes and $1 million (2022: $7 million)
of loan receivables. Included in prior year was $6 million of convertible notes which were converted during the current period
into additional preference shares.
Quantium 22.4%
30 June 2024
Calculated primarily based on a three-year revenue and EBITDA margin
growth, which is applied to the Last Twelve Months (LTM) revenue
at exercise date and is subject to a floor.
PFD
35.0%
30 June 2024
Calculated based on a LTM EBITDA multiple and is subject to a floor.
MyDeal
19.8%
30 September 2025 Primarily referenced to a Gross Transaction Value (GTV) multiple, where the
exit enterprise value is calculated as the exit LTM GTV multiplied by an exit
multiple which is adjusted for profitability factors, changes in working capital,
and net debt to arrive at an equity value.
The value of put option liabilities over non-controlling interests are determined using various assumptions. Any reasonably
possible changes to these inputs would result in a change to the valuation of these liabilities. Refer to Note 4.7.4 for details.
Significant Accounting Policies
Derivatives
Refer to Note 4.7 for details of derivatives.
Unlisted equity securities
Investments in unlisted equity securities are initially designated as financial assets at fair value
through profit or loss or as financial assets at fair value through other comprehensive income,
where investments are not held for trading.
Investments are initially measured at fair value net of transaction costs, and are subsequently
measured at fair value with any change recognised in profit or loss or other comprehensive
income, depending on their initial designation.
Dividends received from unlisted equity securities are recognised in profit or loss.
Put option liabilities over non-controlling interests
Put option liabilities over non‑controlling interests are initially recognised at the present value
of the amounts expected to be paid at the time of exercise with a corresponding entry to other
reserves.
R
e
p
o
r
t
At each reporting period, the put option liabilities over non‑controlling interests are reassessed
and any changes in the estimates of the amounts expected to be paid at the time of exercise are
recognised in the Consolidated Statement of Profit or Loss and the interest discount is unwound
in finance costs.
119
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R
e
p
o
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2
0
2
3
l
W
o
o
w
o
r
t
h
s
G
r
o
u
p
1
i
h
g
h
l
i
g
h
t
s
P
e
r
f
o
r
m
a
n
c
e
2
r
e
v
e
w
i
B
u
s
i
n
e
s
s
3
R
e
p
o
r
t
D
i
r
e
c
t
o
r
s
'
4
i
F
n
a
n
c
a
i
l
5
O
t
h
e
r
i
n
f
o
r
m
a
t
i
o
n
120
Notes to the Consolidated Financial Statements
Assets and liabilities 3
Critical accounting estimates
Put option liabilities over non-controlling interests
The estimates and judgements applied in determining the Group’s put option liabilities over
non‑controlling interests involve a high degree of complexity, as the amounts expected to be
paid may differ from the actual amounts paid at the time that the option is exercised. The values
of the put option liabilities over non‑controlling interests have been determined as the present value
of management’s best estimate of the amounts expected to be paid at the time of exercise.
Amount expected to be paid at the time of exercise
In the determination of the amount expected to be paid at the time of exercise, the Group
considers the key terms of the shareholders agreement and the business outlook. The valuations
used to determine the carrying amounts of put option liabilities are based on forward‑looking
key assumptions that are, by nature, uncertain, and include estimations of future performance,
such as growth in revenue, GTV, EBITDA, and forecast margins.
Discount rate
The amount expected to be paid at the time of exercise has been discounted using the Group’s
marginal cost of debt for borrowing over a similar term.
3.4
Other assets
Other assets primarily comprises lease receivables and amounts paid to suppliers
in advance.
Current
Lease receivables
Prepayments
Other assets
Total other current assets
Non‑current
Lease receivables
Prepayments
Total other non‑current assets
Total other assets
2023
$M
49
161
15
225
349
10
359
584
2022
$M
48
188
–
236
377
–
377
613
Significant Accounting Policies
Lease receivables
Where the Group is a lessor, leases are classified as finance leases whenever the terms of the
lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases
are classified as operating leases. Where the Group is an intermediate lessor, the sublease
classification is assessed with reference to the head lease asset.
Amounts due from lessees under finance leases are recorded as receivables at the amount of the
Group’s net investment in the lease. Finance lease income is allocated to periods in order to reflect
a constant periodic rate of return on the Group’s net investment in the lease.
3.5
Leases
The Group leases various properties, including stores, support offices, distribution
centres, warehouses, equipment, and vehicles.
3.5.1
Lease assets
2023
Cost
Less: accumulated depreciation and impairment
Carrying amount at end of period
Movement:
Carrying amount at start of period
Additions
Acquisition of businesses 1
Terminations
Remeasurements
Depreciation expense
Impairment expense
Other
PROPERTIES
$M
19,474
(10,218)
9,256
9,801
263
45
(23)
198
(1,000)
(23)
(5)
PLANT AND
EQUIPMENT
$M
OTHER
$M
335
(132)
203
178
87
–
–
6
(61)
–
(7)
53
(45)
8
16
5
–
(8)
–
(5)
–
–
8
Carrying amount at end of period
9,256
203
2022
Cost
Less: accumulated depreciation and impairment
Carrying amount at end of period
Movement:
Carrying amount at start of period
Additions
Acquisition of business 1
Terminations
Remeasurements
Transfer of assets to held for sale
Depreciation expense
Other
Carrying amount at end of period
PROPERTIES
$M
PLANT AND
EQUIPMENT
$M
OTHER
$M
19,063
(9,262)
9,801
9,406
514
330
(48)
603
(6)
(972)
(26)
9,801
281
(103)
178
136
69
39
(4)
(3)
(1)
(60)
2
178
60
(44)
16
11
11
–
–
1
–
(7)
–
16
TOTAL
$M
19,862
(10,395)
9,467
9,995
355
45
(31)
204
(1,066)
(23)
(12)
9,467
TOTAL
$M
19,404
(9,409)
9,995
9,553
594
369
(52)
601
(7)
(1,039)
(24)
9,995
1 Acquisition of businesses comprises $44 million of lease assets relating to the acquisition of Shopper and $1 million relating to other
individually immaterial acquisitions (2022: Acquisition of PFD).
121
A
n
n
u
a
l
R
e
p
o
r
t
2
0
2
3
l
W
o
o
w
o
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t
h
s
G
r
o
u
p
1
i
h
g
h
l
i
g
h
t
s
P
e
r
f
o
r
m
a
n
c
e
2
r
e
v
e
w
i
B
u
s
i
n
e
s
s
3
R
e
p
o
r
t
D
i
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e
c
t
o
r
s
'
4
R
e
p
o
r
t
i
F
n
a
n
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5
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i
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f
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a
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i
o
n
122
Notes to the Consolidated Financial Statements
Assets and liabilities 3
3.5
Leases (continued)
3.5.2
Lease liabilities
Movement:
Carrying amount at start of period
Additions
Acquisition of businesses 1
Terminations
Remeasurements
Transfer of liabilities to held for sale
Interest expense
Payments for the interest component of lease liabilities
Repayment of the principal component of lease liabilities
Other
Carrying amount at end of period
Current
Non-current
Carrying amount at end of period
3.5
Leases (continued)
2023
$M
2022
$M
Significant Accounting Policies
12,471
352
45
(26)
204
–
542
(542)
(1,067)
1
11,980
1,637
10,343
11,980
12,016
570
369
(44)
616
(8)
542
(542)
(1,019)
(29)
12,471
1,572
10,899
12,471
The Group assesses whether a contract is, or contains, a lease at inception of the contract.
A lease conveys the right to direct the use of and obtain substantially all of the economic benefits
from an identified asset for a period of time in exchange for consideration. A lease liability and
corresponding lease asset are recognised at commencement of the lease.
Lease liabilities
Lease liabilities are measured at the present value of lease payments during the lease term that
are not yet paid, discounted using the interest rate implicit in the lease or, if that rate cannot be
determined, at the Group’s incremental borrowing rate specific to the lease term. Lease payments
(excluding non‑lease components) include:
• Fixed payments (including in‑substance fixed payments), less any lease incentives receivable;
• Variable lease payments that are based on an index or a rate;
• Amounts expected to be payable by the Group under residual value guarantees;
• Exercise price of a purchase option that the Group is reasonably certain to exercise; and
• Payments of penalties for terminating the lease, if the lease term reflects the Group exercising
1 Acquisition of businesses comprises $44 million of lease liabilities relating to the acquisition of Shopper and $1 million relating to other
individually immaterial acquisitions (2022: Acquisition of PFD).
that option.
MATURITY PROFILE OF CONTRACTUAL UNDISCOUNTED CASH FLOWS
One year or less
One year to two years
Two years to five years
Five years to 10 years
Over 10 years
Total undiscounted lease liabilities
2023
$M
1,689
1,507
3,051
6,003
2,704
14,954
2022
$M
1,643
1,474
3,014
6,270
3,456
15,857
COMMITMENTS FOR LEASES NOT YET COMMENCED
As at 25 June 2023, the Group had committed to leases which had not yet commenced. Accordingly, these lease contracts
are not included in the calculation of the Group’s lease liabilities. The Group has estimated that the potential future
lease payments for these lease contracts as at the end of the financial period, including the Group’s contracts relating
to its Moorebank National and Regional Distribution Centres, would result in an increase in undiscounted lease liabilities
of $1,623 million (2022: $1,669 million).
3.5.3
Other amounts recognised
Consolidated Statement of Profit or Loss (included in branch and administration expenses)
Variable lease payments not included in the measurement of lease liabilities 1
Expense relating to short-term leases
Consolidated Statement of Cash Flows (included in payments to suppliers and employees)
2023
$M
115
12
Payments for short-term leases, service components of leases, and variable lease payments
723
1 Variable lease payments represent less than 5% of total lease payments (2022: less than 5% of total lease payments).
2022
$M
110
16
625
Lease liabilities are subsequently measured at amortised cost using the effective interest rate
method. When there is a change in lease term or a change in future lease payments, lease liabilities
are remeasured, with a corresponding adjustment to lease assets.
Lease assets
Lease assets are initially measured at cost comprising the initial lease liability, any lease payments
made at or before the commencement date (less any lease incentives received), any initial direct
costs, and restoration costs. Lease assets are subsequently depreciated on a straight‑line basis
over the shorter of the lease term or the useful life of the underlying asset. Lease assets are tested
for impairment in accordance with the policy for impairment of non‑financial assets as disclosed
in Note 3.10.
Short-term leases
Short‑term leases are those with a lease term of 12 months or less. The costs associated with these
leases are recognised as an expense in the Consolidated Statement of Profit or Loss as incurred.
Holdover leases
In assessing whether the Group is reasonably certain to extend or renew a lease in holdover, the
Group considers all relevant facts and circumstances that create an economic incentive to remain
in the leased premises and whether a lease asset and lease liability should be recognised.
Variable lease payments
The Group has some property leases, which contain variable payment terms that are linked to sales
generated from a store and are recognised in the Consolidated Statement of Profit or Loss in the
period in which it is incurred.
Non-lease components
The Group separates the non‑lease components for property leases based on a residual method
using property outgoings market data and separates the non‑lease components for other leases
based on the individual contract breakdown of these costs or otherwise best estimate of these costs.
Non‑lease components of lease payments are recognised as an expense in the Consolidated
Statement of Profit or Loss as incurred and include items such as embedded property outgoings,
repairs and maintenance.
123
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2
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o
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o
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h
s
G
r
o
u
p
1
i
h
g
h
l
i
g
h
t
s
P
e
r
f
o
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m
a
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c
e
2
r
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v
e
w
i
B
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s
i
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e
s
s
3
R
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p
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D
i
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t
o
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'
4
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5
O
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o
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a
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i
o
n
124
Notes to the Consolidated Financial Statements
Assets and liabilities 3
3.5
Leases (continued)
3.6
Property, plant and equipment
Critical accounting estimates
Determining the lease term
In determining the lease term, the Group considers all facts and circumstances that create
an economic incentive to exercise an extension option, or not to exercise a termination option.
The assessment is reviewed upon the occurrence of a significant event or change in circumstance.
Extension options are most common for property leases.
At the end of the reporting period, the weighted average remaining lease terms for the portfolio
of leases were:
Australian Food
Australian B2B
New Zealand Food
BIG W
Other
Group
WEIGHTED AVERAGE LEASE TERM 1 WEIGHTED AVERAGE LEASE EXPIRY2
2023
YEARS
2022
YEARS
2023
YEARS
2022
YEARS
9.0
8.2
9.3
8.8
7.7
9.0
9.9
8.1
9.2
9.4
7.1
9.6
7.8
8.2
8.0
6.7
6.9
7.7
8.2
7.4
7.8
6.7
6.4
7.6
1 Represents the weighted average number of years from the end of the reporting period to the end of the reasonably
certain lease term.
2 Represents the weighted average number of years from the end of the reporting period to the contractual lease end
date which has been disclosed for informative purposes.
During the current period, remeasurements include the impact of revising lease terms for
reasonably certain options, which resulted in an increase in recognised lease liabilities and lease
assets of $66 million (2022: $367 million).
Discount rates
In calculating the lease liability, the lease payments are discounted using the rate implicit in the
lease or the Group’s incremental borrowing rate.
Determining the incremental borrowing rate involves significant judgement and is derived from key
external market‑based rates and the Group’s credit margin, whilst considering the type of asset
being leased, and the length of the lease.
Property, plant and equipment represent the Group’s investments in tangible
assets, such as development properties, freehold land, warehouse, retail and
other properties, store fit‑outs, distribution infrastructure, and technology.
2023
Cost
Less: accumulated depreciation
and impairment
Carrying amount at end of period 1
Movement:
Carrying amount at start of period
Additions
Acquisition of businesses 2
Disposals
Transfer to assets held for sale
Depreciation expense
Impairment (expense)/reversal
Transfers and other
Effect of movements in foreign
exchange rates
Carrying amount at end of period 1
2022
Cost
Less: accumulated depreciation
and impairment
Carrying amount at end of period 1
Movement:
Carrying amount at start of period
Additions
Acquisition of business 2
Disposals
Transfer to assets held for sale
Depreciation expense
Impairment (expense)/reversal
Transfers and other
Effect of movements in foreign
exchange rates
Carrying amount at end of period 1
DEVELOPMENT
PROPERTIES
$M
FREEHOLD LAND,
WAREHOUSE,
RETAIL, AND OTHER
PROPERTIES
$M
LEASEHOLD
IMPROVEMENTS
$M
PLANT AND
EQUIPMENT
$M
TOTAL
$M
1,640
927
4,013
11,021
17,601
(61)
1,579
1,303
570
–
(60)
(9)
–
(19)
(206)
–
1,579
(114)
813
808
32
–
(8)
(185)
(18)
5
177
2
813
DEVELOPMENT
PROPERTIES
$M
FREEHOLD LAND,
WAREHOUSE,
RETAIL, AND OTHER
PROPERTIES
$M
1,369
(66)
1,303
1,025
418
–
(10)
(55)
–
–
(75)
–
1,303
924
(116)
808
864
71
–
(10)
(167)
(19)
–
76
(7)
808
(2,188)
1,825
1,712
347
–
(1)
–
(232)
(4)
2
1
(6,357)
4,664
4,408
1,009
19
(4)
(2)
(773)
(23)
27
3
(8,720)
8,881
8,231
1,958
19
(73)
(196)
(1,023)
(41)
–
6
1,825
4,664
8,881
LEASEHOLD
IMPROVEMENTS
$M
PLANT AND
EQUIPMENT
$M
TOTAL
$M
3,716
10,188
16,197
(2,004)
1,712
1,657
264
–
(6)
–
(215)
(11)
27
(4)
1,712
(5,780)
4,408
3,931
1,194
47
(5)
(3)
(701)
2
(42)
(15)
4,408
(7,966)
8,231
7,477
1,947
47
(31)
(225)
(935)
(9)
(14)
(26)
8,231
1 Carrying amount at the end of the period includes assets under construction of $1,102 million (2022: $974 million).
2 Acquisition of businesses comprises $18 million of property, plant and equipment relating to the acquisitions of Shopper and MyDeal
and $1 million relating to other individually immaterial acquisitions (2022: Acquisition of PFD).
125
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2
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o
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t
h
s
G
r
o
u
p
1
i
h
g
h
l
i
g
h
t
s
P
e
r
f
o
r
m
a
n
c
e
2
r
e
v
e
w
i
B
u
s
i
n
e
s
s
3
R
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p
o
r
t
D
i
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c
t
o
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s
'
4
R
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p
o
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t
i
F
n
a
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c
a
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l
5
O
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e
r
i
n
f
o
r
m
a
t
i
o
n
126
Notes to the Consolidated Financial Statements
Assets and liabilities 3
3.6
Property, plant and equipment (continued)
3.7
Commitments for capital expenditure
Significant Accounting Policies
Carrying value
The Group’s property, plant and equipment are measured at cost less accumulated depreciation
and impairment losses. The cost of self‑constructed assets includes the cost of materials, direct
labour, and a proportion of overheads. The cost of development properties includes borrowing,
holding, and development costs until the asset is complete.
Depreciation
Freehold land and development properties are not depreciated, while leasehold improvements are
depreciated on a straight‑line basis primarily over the shorter of the respective remaining lease term
and the estimated useful life of the underlying lease asset. All other property, plant and equipment
are depreciated on a straight‑line basis over their estimated useful lives to their residual values.
Useful lives and residual values are reassessed at each reporting period following the Group’s
consideration of physical, economic and environmental factors, which includes, but is not limited
to, asset condition, expected use, wear‑and‑tear, technology changes, and climate‑related risks.
Any changes to the estimate are accounted for on a prospective basis and where parts of an item
of property, plant and equipment have different useful lives, they are accounted for as separate
assets. The useful lives of the Group’s property, plant and equipment are as follows:
Buildings
Plant and equipment
Leasehold improvements
Disposal of assets
25–40 years
2.5–20 years
Up to 25 years
An item of property, plant and equipment is derecognised upon disposal or when no future
economic benefits are expected to arise from the continued use of the asset. The gain or loss
arising on the disposal or retirement of the asset is determined as the difference between the
sale proceeds and the carrying amount of the asset, and is recognised in the Consolidated
Statement of Profit or Loss.
Impairment
Property, plant and equipment are tested for impairment in accordance with the policy for
impairment of non‑financial assets as disclosed in Note 3.10.
Financial reporting impacts of sustainability‑related matters
The Group has identified climate‑related physical risks to its assets and is currently working
through actions to address these risks, including improving the resilience of its assets through
the implementation of generators for areas exposed to a high risk of power outages, flood barriers,
rainwater harvesting, and roof strengthening.
Useful lives
During the period, there were no changes to the useful lives of property, plant and equipment
as a result of climate‑related risks.
If in future reporting periods there are changes to the proposed useful lives and/or residual values
due to climate‑related risks, these changes will be accounted for on a prospective basis.
This section presents the Group’s contractual obligation to make a payment
in the future in relation to purchases of property, plant and equipment and
intangible assets.
Capital expenditure commitments of the Group at the reporting date are as follows:
Estimated capital expenditure under firm contracts, payable:
Not later than one year
Later than one year, not later than two years
Later than two years, not later than five years
Total capital expenditure commitments
3.8
Intangible assets
2023
$M
2022
$M
914
155
–
1,069
1,246
368
159
1,773
Intangible assets mainly represent goodwill, brand names, software, and customer
contracts and relationships.
2023
Cost
Less: accumulated amortisation
and impairment
Carrying amount at end of period
Movement:
Carrying amount at start of period
Acquisition of businesses 2
Additions
Disposals
Transfers
Amortisation expense
Impairment expense
GOODWILL
$M
3,581
(77)
3,504
3,198
297
–
–
(1)
–
–
Effect of movements in foreign
exchange rates
Carrying amount at end of period
10
3,504
CUSTOMER
CONTRACTS
AND
RELATIONSHIPS
$M
SOFTWARE 1
$M
3,515
265
(1,961)
1,554
1,484
31
516
(11)
(20)
(443)
(5)
2
(54)
211
224
10
5
–
–
(28)
–
–
BRAND
NAMES
$M
322
(3)
319
305
14
3
–
–
(3)
–
–
319
1,554
211
OTHER
$M
132
(27)
105
67
54
–
–
–
(15)
(1)
TOTAL
$M
7,815
(2,122)
5,693
5,278
406
524
(11)
(21)
(489)
(6)
–
105
12
5,693
1 Carrying amount at the end of the period for software includes assets under development of $507 million.
2 Acquisition of businesses comprises $391 million of intangible assets relating to the acquisition of Shopper and MyDeal and $15 million
relating to other individually immaterial acquisitions.
127
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e
p
o
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0
2
3
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W
o
o
w
o
r
t
h
s
G
r
o
u
p
1
i
h
g
h
l
i
g
h
t
s
P
e
r
f
o
r
m
a
n
c
e
2
r
e
v
e
w
i
B
u
s
i
n
e
s
s
3
R
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p
o
r
t
D
i
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c
t
o
r
s
'
4
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p
o
r
t
i
F
n
a
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l
5
O
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i
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f
o
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m
a
t
i
o
n
128
Notes to the Consolidated Financial Statements
Assets and liabilities 3
3.8
Intangible assets (continued)
3.8
Intangible assets (continued)
2022
Cost
Less: accumulated amortisation
and impairment
Carrying amount at end of period
Movement:
Carrying amount at start of period
Acquisition of businesses 2
Additions
Disposals
Transfers
Amortisation expense
Effect of movements in foreign
exchange rates
Carrying amount at end of period
GOODWILL
$M
3,308
(110)
3,198
2,881
384
–
–
(23)
–
(44)
3,198
CUSTOMER
CONTRACTS
AND
RELATIONSHIPS
$M
SOFTWARE 1
$M
3,015
(1,531)
1,484
1,358
4
460
(2)
14
(350)
–
1,484
250
(26)
224
91
168
–
–
(9)
(26)
–
224
BRAND
NAMES
$M
305
–
305
265
43
–
–
–
–
(3)
305
OTHER
$M
101
(34)
67
TOTAL
$M
6,979
(1,701)
5,278
76
4,671
2
–
–
–
(11)
–
67
601
460
(2)
(18)
(387)
(47)
5,278
1 Carrying amount at the end of the period for software includes assets under development of $433 million.
2 Acquisition of businesses primarily relates to the acquisition of PFD.
Significant Accounting Policies
Carrying value
Goodwill
Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any
non‑controlling interests in the acquiree, and the fair value of the Group’s previously held equity
interest in the acquiree (if any) over the net of the acquisition date amounts of the identifiable
assets acquired and the liabilities assumed. Goodwill is not amortised but is reviewed for
impairment at least annually.
Brand names
Brand names with indefinite useful lives are not amortised but are reviewed for impairment at least
annually, and are measured at cost less any accumulated impairment losses.
Brand names with finite useful lives are amortised and are subsequently carried at cost less
accumulated amortisation and impairment losses.
Software assets
Acquired intangible assets
Software assets with finite useful lives that are acquired separately are carried at cost less
accumulated amortisation and impairment losses. Assets that are acquired as part of a business
combination are initially recognised at fair value less accumulated amortisation and impairment losses.
Internally-generated intangible assets
An internally‑generated intangible asset arising from development (or from the development
phase of an internal project) is recognised if, and only if, all of the following conditions have
been demonstrated:
• The technical feasibility of completing the intangible asset so that it will be available for use or sale;
• The intention to complete the intangible asset and use or sell it;
• The ability to use or sell the intangible asset;
• How the intangible asset will generate probable future economic benefits;
• The availability of adequate technical, financial and other resources to complete the
development and to use or sell the intangible asset; and
• The ability to measure reliably the expenditure attributable to the intangible asset.
Significant Accounting Policies (continued)
Carrying value (continued)
Internally-generated intangible assets (continued)
Subsequent to initial recognition, internally‑generated intangible assets are reported at cost less
accumulated amortisation and impairment losses, on the same basis as intangible assets that are
acquired separately. Expenditure on research activities is recognised as an expense in the period
in which it is incurred.
Software as a service
Software as a service (SaaS) arrangements are service contracts providing the Group with the
right to access the cloud provider’s application software over the contract period. Costs incurred
to configure or customise, and the ongoing fees to obtain access to the cloud provider’s
application software, are recognised as operating expenses when the services are received.
Some of these costs incurred are for the development of a software code that enhances, modifies,
or creates additional capability to existing on‑premise systems and meets the definition of and
recognition criteria for an intangible asset. These costs are recognised as intangible software assets.
Customer contracts and relationships
Customer contracts and relationships are acquired through business combinations and are
recognised at fair value at the acquisition date and are subsequently carried at cost less
accumulated amortisation and impairment losses.
Other intangible assets
Other intangible assets mainly include intellectual property and algorithms, which are measured
at cost less accumulated amortisation and impairment losses.
Amortisation
Goodwill and brand names with indefinite useful lives are not amortised however are reviewed
for impairment at least annually.
Intangible assets with finite lives are amortised on a straight‑line basis over their estimated useful
lives. The useful lives of intangible assets have been assessed as follows:
Brand names with definite useful lives
One to five years
Core systems
Other software
Five to 10 years
Three to five years
Customer contracts and relationships
Three to 10 years
Other intangible assets
Nine years
Useful lives are reassessed annually and any changes to the estimate are accounted for
on a prospective basis.
Impairment
Intangible assets are tested for impairment in accordance with the policy for impairment
of non‑financial assets as disclosed in Note 3.10.
129
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2
3
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h
s
G
r
o
u
p
1
i
h
g
h
l
i
g
h
t
s
P
e
r
f
o
r
m
a
n
c
e
2
r
e
v
e
w
i
B
u
s
i
n
e
s
s
3
R
e
p
o
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t
D
i
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c
t
o
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s
'
4
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i
F
n
a
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5
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i
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f
o
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a
t
i
o
n
130
Notes to the Consolidated Financial Statements
Assets and liabilities 3
3.9
Investments accounted for using the equity method
3.9
Investments accounted for using the equity method (continued)
Investments accounted for using the equity method represent the Group’s
investments in associates and joint ventures in which the Group has significant
influence or joint control.
3.9.1
Details of investments accounted for using the equity method
2023
2022
OWNERSHIP
INTEREST
%
OWNERSHIP
INTEREST
%
$M
$M
Endeavour Group Limited
9.1
1,046
14.6
1,646
Other individually immaterial investments in associates
and joint ventures
77
1,123
45
1,691
On 16 December 2022, the Group sold 5.5% of the issued share capital of Endeavour Group Limited, an ASX listed company,
via a block trade at a price of $6.46 per share for a total cash consideration of $634 million (net of brokerage fees of $2 million).
Following the sale of shares during the period, the Group retains a 9.1% interest in Endeavour Group.
The Group therefore derecognised a portion of the carrying value of its investment of $630 million to reflect the sale of 5.5%
of the shares in Endeavour Group Limited. In addition, $2 million representing a portion of the Group’s share of the reserves
of Endeavour Group Limited was derecognised, resulting in a total gain of $6 million being recognised in the Consolidated
Statement of Profit or Loss during the period.
Notwithstanding that the Group’s ownership interest is less than 20%, the Group continues to exercise significant
influence through its existing Partnership Agreements, and therefore continues to apply the equity method of accounting.
The fair value of the Group’s interest in Endeavour Group as at the reporting date was $1,022 million (2022: $1,951 million)
based on the closing share price.
3.9.2 Results of investments accounted for using the equity method
The tables below present summarised financial information of the Group’s material associate, Endeavour Group Limited,
and aggregate information of individually immaterial investments in other associates and joint ventures.
2023
Revenue 1
Profit/(loss) for the period, net of tax 1
Other comprehensive income for the period, net of tax 1
Total comprehensive income/(loss) for the period
Group’s share of total comprehensive income/(loss)
recognised for the period 2
2022
Revenue 1
Profit/(loss) for the period, net of tax 1
Other comprehensive income for the period, net of tax 1
Total comprehensive income/(loss) for the period
Group’s share of total comprehensive income/(loss)
recognised for the period 2
ENDEAVOUR
GROUP LIMITED
$M
OTHER
INVESTMENTS
IN ASSOCIATES
$M
INVESTMENTS
IN JOINT
VENTURES
$M
11,884
212
529
–
529
73
(10)
–
(10)
(4)
75
(20)
–
(20)
(10)
ENDEAVOUR
GROUP LIMITED
$M
OTHER
INVESTMENTS
IN ASSOCIATES
$M
INVESTMENTS
IN JOINT
VENTURES
$M
TOTAL
$M
12,171
499
–
499
59
TOTAL
$M
11,597
199
45
11,841
495
34
529
74
2
–
2
–
(6)
–
(6)
(4)
491
34
525
70
1 Based on the latest available Financial Results or management accounts at the reporting date.
2 Based on consensus data for Endeavour Group Limited and the latest available management accounts for the Group’s remaining
investments at the reporting date.
3.9.3 Movements in carrying amount of investments accounted for using the equity method
2023
Carrying amount at start of period
Additions
Disposals
Impairment expense
Share of net profit/(loss) for the period, net of tax
Share of other comprehensive income for the period, net of tax
Dividends received
Carrying amount at end of period
2022
Carrying amount at start of period
Additions
Share of net profit/(loss) for the period, net of tax
Share of other comprehensive income for the period, net of tax
Dividends received
Carrying amount at end of period
ENDEAVOUR
GROUP LIMITED
$M
OTHER
INVESTMENTS
IN ASSOCIATES
$M
INVESTMENTS
IN JOINT
VENTURES
$M
1,646
–
(630)
–
70
3
(43)
26
13
–
(6)
(4)
–
–
1,046
29
19
40
–
(1)
(10)
–
–
48
ENDEAVOUR
GROUP LIMITED
$M
OTHER
INVESTMENTS
IN ASSOCIATES
$M
INVESTMENTS
IN JOINT
VENTURES
$M
–
1,623
72
2
(51)
1,646
26
–
–
–
–
26
4
19
(4)
–
–
19
TOTAL
$M
1,691
53
(630)
(7)
56
3
(43)
1,123
TOTAL
$M
30
1,642
68
2
(51)
1,691
3.9.4 Summary financial position of investment in associate that is material to the Group
ENDEAVOUR GROUP LIMITED
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Net assets
Group’s share of net assets 1
Fair value adjustment 2
Carrying amount at end of period
2023
$M
1,975
9,696
2022
$M
1,782
9,081
11,671
10,863
2,137
5,825
7,962
3,709
341
705
1,046
2,193
5,102
7,295
3,568
518
1,128
1,646
1 Group’s share of net assets is based on consensus data as at the reporting date.
2 Fair value adjustment represents the difference between (i) the Group’s retained investment in Endeavour Group Limited measured at fair
value following the loss of control on 28 June 2021 and the sale of 5.5% of the shares in Endeavour Group Limited during the current period,
and (ii) the carrying value of the Group’s investment as at the reporting date.
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132
Notes to the Consolidated Financial Statements
Assets and liabilities 3
3.9
Investments accounted for using the equity method (continued)
3.10
Impairment of non-financial assets (continued)
Significant Accounting Policies
Investments accounted for using the equity method
Investments accounted for using the equity method comprise investments in associates and joint
ventures. An associate is an entity over which the Group has significant influence and that is neither
a subsidiary nor an interest in a joint venture. Significant influence is the power to participate in the
financial and operating policy decisions of the investee but is not control or joint control.
A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement
have rights to the net assets of the joint arrangement. Joint control is the contractually agreed
sharing of control of an arrangement, which exists only when decisions about the relevant activities
require unanimous consent of the parties sharing control.
Investments accounted for using the equity method are initially recognised at cost, and are
subsequently accounted for using the equity method by including the Group’s share of profit
or loss and other comprehensive income or loss of the associate or joint venture in the carrying
amount of the investment until the date on which significant influence or joint control ceases.
Dividends received reduce the carrying amount of the investment in associate or joint venture.
3.10
Impairment of non-financial assets
An impairment loss is incurred when the carrying amount of an asset
or a cash‑generating unit exceeds its estimated recoverable amount.
At each reporting date, the Group assesses whether there is any indication that an asset may be impaired. If any indication
exists, the recoverable amount of the asset is estimated as the higher of fair value less costs of disposal (FVLCOD) or value
in use (VIU), and is determined for an individual asset where possible, otherwise, for the cash-generating unit (CGU) to which
it belongs. An impairment loss is incurred when the carrying amount of an asset or a CGU exceeds its recoverable amount.
For the purposes of impairment testing, indefinite life intangible assets are allocated to each of the Group’s CGUs that are
expected to benefit from the synergies relating to the business combination, grouped at the lowest levels for which the
assets are monitored for internal management purposes, as follows:
Australian Food
New Zealand Food
BIG W
PFD
Quantium
MyDeal
2023
2022
GOODWILL 1
$M
BRAND
NAMES 2
$M
GOODWILL
$M
866
2,077
50
360
143
8
3
240
–
43
19
–
627
2,067
–
361
143
–
BRAND
NAMES
$M
3
240
–
43
19
–
Carrying amount at end of period
3,504
305
3,198
305
1 During the period, the Group finalised its acquisition accounting and its allocation of the $182 million of goodwill relating to the acquisition
of MyDeal. As a result, $124 million and $50 million was allocated to the Australian Food and BIG W reportable segments respectively,
based on where the expected benefits from the MyDeal acquisition are expected to be earned. Also included in Australian Food is
$103 million of goodwill relating to the acquisition of Shopper during the period.
2 As at 25 June 2023, brand names includes $305 million of brand names with indefinite useful lives and $14 million with finite useful lives.
The recoverable amounts for all CGUs, which were determined based on VIU, exceeded their respective carrying amounts
and as a result, no impairment loss was recognised during the period.
Sensitivity analysis
Sensitivity analysis is performed to determine the point at which the recoverable amount is equal to the carrying amount
for each CGU. In addition, for all CGUs, other than New Zealand Food and MyDeal, the Group determined that based
on current economic conditions and CGU performance, any reasonably possible changes to the key assumptions used
in the determination of the recoverable amounts would not result in an impairment loss.
The Group assessed the recoverable amounts for both the New Zealand Food and MyDeal CGUs using VIU, which is primarily
based on the most recent Board approved three-year business plan. Cash flows beyond the three years were extrapolated
using a long-term growth rate.
NEW ZEALAND FOOD
Notwithstanding that the recoverable amount exceeded its carrying amount as at 25 June 2023, any reasonably possible
changes, such as adverse trading conditions, increased competition, or challenges impacting the Group’s ability to execute
the three-year business plan, may result in a future impairment loss.
Assuming all other variables are held constant, either a 0.6% increase in discount rate or a 4.8% reduction in EBITDA within
the terminal year, would result in the recoverable amount approximating its carrying amount.
MYDEAL
The acquisition of MyDeal continues to enhance the Group’s Marketplace capabilities in furniture, homewares and everyday
needs, and complements BIG W’s existing general merchandise offer and Australian Food’s ‘Everyday Market’ marketplace
proposition. As MyDeal was recently acquired during the period, the estimated recoverable amount approximates
its carrying amount as at 25 June 2023.
Any adverse changes to the discount rate applied or challenges in the achievement of the MyDeal strategic plan may lead
to an impairment loss. Therefore, management has performed a sensitivity analysis and assuming all other variables are
held constant, either a 1% increase in the discount rate or a 10% reduction in EBITDA within the terminal year, would result
in an impairment loss of approximately $16 million.
Significant Accounting Policies
Calculation of recoverable amount
The recoverable amount of an asset is the higher of its fair value less costs of disposal or value
in use. For an asset that does not generate largely independent cash inflows, the recoverable
amount is assessed at the CGU level, which is the smallest group of assets generating cash inflows
independent of other CGUs that benefit from the use of the asset.
An impairment loss is recognised in the Consolidated Statement of Profit or Loss when the
carrying amount of an asset or its CGU exceeds its recoverable amount. Impairment losses
that are recognised in respect of a CGU are allocated first to reduce the carrying amount of any
goodwill allocated to the CGU and then to reduce the carrying amount of other assets in the CGU
on a pro‑rata basis.
Reversal of impairment
An impairment loss is reversed, other than for goodwill, if there has been a change in the estimates
used to determine the recoverable amount. An impairment loss is reversed only to the extent
that the asset’s carrying amount does not exceed the carrying amount that would have been
determined, net of depreciation or amortisation, if no impairment loss had been recognised.
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134
Notes to the Consolidated Financial Statements
Assets and liabilities 3
3.10
Impairment of non-financial assets (continued)
3.11
Income taxes
This section presents the total income tax expense charged to the Group in respect
of amounts currently owing for taxable profits and future income taxes recoverable
or payable in respect of temporary differences.
3.11.1
Income tax expense recognised in the Consolidated Statement of Profit or Loss
Income tax expense
Current tax expense
Adjustments recognised during the period in relation to the current tax of prior periods
Deferred tax relating to the origination and reversal of temporary differences
3.11.2
Reconciliation between profit before income tax and income tax expense
Profit before income tax – continuing operations
Profit before income tax – discontinued operations
Profit before income tax
Income tax expense using the Australian corporate tax rate of 30%
Tax effect of amounts which are not deductible/(taxable) in calculating taxable income:
Non-deductible expenses
Non-assessable income 1
Share of profits of investments accounted for using the equity method
Share-based payments expense
Unrecognised tax losses from the current period
Impact of differences in offshore tax rates
Other
Adjustments relating to prior periods
Income tax expense
2023
$M
830
(11)
(126)
693
2023
$M
2,322
–
2,322
697
39
(2)
(17)
–
3
(1)
(15)
704
(11)
693
2022
$M
619
(30)
(55)
534
2022
$M
2,091
6,387
8,478
2,543
8
(1,976)
(20)
13
4
(2)
(6)
564
(30)
534
1
In the prior period, non-assessable income included the $1,916 million tax effect of the $6,387 million gain recognised on demerger of the
Endeavour Group. The demerger by the Group qualified for demerger capital gains tax relief, which resulted in none of the demerger gain
being subject to Australian capital gains tax.
Critical accounting estimates
Key assumptions used in the determination of the recoverable amount of an asset or CGU include
expected future cash flows, long‑term growth rates, and discount rates.
Expected future cash flows
A discounted cash flow model is used to determine the recoverable amount under VIU.
VIU calculations represent management’s best estimate of the economic conditions that will exist
over the remaining useful life of the asset or CGU in its current condition. In assessing VIU, forecast
future cash flows are based on the Group’s most recent Board approved three‑year plan and reflect
management’s best estimate of income, expenses, capital expenditure, and cash flows for each
asset or CGU. Cash flows beyond the three years are extrapolated using a long‑term growth rate.
Long-term growth rates
Long‑term growth rates are based on past experience, expectations of external market operating
conditions, and other assumptions which take into account the specific features of each business
unit. The current long‑term growth rate assumption is 2.5% (2022: 2.5%).
Discount rates
In the determination of the recoverable amount, the estimated future pre‑tax cash flows are
discounted to their present value using a pre‑tax discount rate, which reflects the current market
assessments of the time value of money and risks specific to the asset or CGU. The pre‑tax
discount rates applied vary depending on the nature of the business and the country of operation,
and are set out below:
Australian Food
New Zealand Food
BIG W
PFD
Quantium
MyDeal
2023
%
10.6
11.8
12.9
11.7
13.6
15.0
2022
%
10.4
11.3
12.4
11.4
13.2
n/a
Financial reporting impacts of sustainability‑related matters
The Group continues to develop its assessment of the potential impacts of climate change on its
impairment testing.
The Group has identified climate‑related physical risks to its assets and is currently working
through actions to address these risks. These actions include the replacement of its existing assets
with more environmentally‑friendly alternatives, such as refrigeration, solar and LED lighting, and
converting the Group’s home delivery fleet to zero emissions vehicles, as well as increasing the
resilience of the Group’s store and supply chain assets through the implementation of generators
for areas exposed to a high risk of power outages. Furthermore, the Group incorporates the
potential increase of future flood risk into its existing site selection and design procedures.
The Group performed a sensitivity analysis and determined that any reasonably possible changes
in the key assumptions used in the determination of the recoverable amounts would not result
in an impairment loss. However, should the impacts of climate change exceed the reasonably
possible changes assumed, this could result in the recognition of an impairment loss at the
CGU level.
135
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Notes to the Consolidated Financial Statements
Assets and liabilities 3
3.11
Income taxes (continued)
3.11
Income taxes (continued)
3.11.3 Deferred tax balances recognised in the Consolidated Statement of Financial Position
3.11.4
Tax consolidation
2023
Deferred tax assets
Property, plant and equipment
Revenue and capital losses
Lease liabilities
Provisions, accruals, and other liabilities
Cash flow and fair value hedges
Total deferred tax assets
Deferred tax liabilities
Intangible assets
Unrealised exchange differences
Lease assets
Investments accounted for using the equity
method
Prepayments
Other
Total deferred tax liabilities
Net deferred tax asset/(liability)
2022
Deferred tax assets
Property, plant and equipment
Revenue and capital losses
Lease liabilities
Provisions, accruals, and other liabilities
Cash flow and fair value hedges
Total deferred tax assets
Deferred tax liabilities
Intangible assets
Unrealised exchange differences
Lease assets
Investments accounted for using the equity
method
Prepayments
Other
Total deferred tax liabilities
Net deferred tax asset/(liability)
UNRECOGNISED DEFERRED TAX ASSETS
OPENING
BALANCE
$M
RECOGNISED IN
PROFIT OR LOSS
$M
RECOGNISED
IN OTHER
COMPREHENSIVE
INCOME
$M
ACQUISITIONS
AND OTHER
$M
CLOSING
BALANCE
$M
170
282
3,706
833
13
5,004
(175)
(74)
(3,099)
(278)
(2)
(39)
(3,667)
1,337
65
(77)
(64)
25
(3)
(54)
14
3
92
83
(4)
(8)
180
126
–
–
–
1
34
35
–
(1)
–
–
–
1
–
35
(4)
9
13
4
–
22
(28)
–
(13)
–
–
(1)
(42)
(20)
231
214
3,655
863
44
5,007
(189)
(72)
(3,020)
(195)
(6)
(47)
(3,529)
1,478
OPENING
BALANCE
$M
RECOGNISED IN
PROFIT OR LOSS
$M
RECOGNISED
IN OTHER
COMPREHENSIVE
INCOME
$M
ACQUISITIONS
AND OTHER
$M
CLOSING
BALANCE
$M
85
–
3,571
789
5
4,450
(122)
(29)
(2,883)
–
(5)
(40)
(3,079)
1,371
89
282
135
26
49
581
10
(50)
(216)
(278)
3
5
(526)
55
–
–
–
–
(41)
(41)
–
5
–
–
–
(2)
3
(38)
(4)
–
–
18
–
14
(63)
–
–
–
–
(2)
(65)
(51)
170
282
3,706
833
13
5,004
(175)
(74)
(3,099)
(278)
(2)
(39)
(3,667)
1,337
At the reporting date, the Group has unused capital losses of $166 million (2022: $203 million) available for offset against
future capital gains. A deferred tax asset has not been recognised in association with these capital losses as it is not probable
that there will be sufficient capital gains available against which these capital losses can be utilised in the foreseeable future.
At the reporting date, there were no unused revenue losses (2022: $65 million) as a result of the exit of the Summergate
business during the period.
The Company and its wholly-owned Australian resident entities formed a tax consolidated group with effect from 1 July 2002.
Woolworths Group Limited is the head entity of the tax consolidated group and has assumed the current tax liabilities of the
members in the tax consolidated group (the Woolworths tax group).
Income tax expense or benefit, deferred tax assets, and deferred tax liabilities arising from temporary differences of the
members of the tax consolidated group are recognised by each subsidiary where the subsidiary would have been able
to recognise the deferred tax asset or deferred tax liability on a standalone basis.
The members of the tax consolidated group have entered into a tax funding agreement with the Company which sets out the
funding obligations in respect of income tax amounts. The agreement requires payments by the subsidiary to the Company
equal to the income tax liability assumed by the Company. The Company is required to make payment to the subsidiary equal
to the current tax asset assumed by the Company.
In respect of carried forward tax losses brought into the group on consolidation by subsidiary members, the Company will
pay the subsidiary member for such losses when these losses are transferred to the tax consolidated group, where the
subsidiary member would have been entitled to recognise the benefit of these losses on a standalone basis.
Income tax expense of $173 million (2022: $163 million) was charged by the Company to subsidiaries during the period
through at call intercompany accounts.
Significant Accounting Policies
Income tax expense in the Consolidated Statement of Profit or Loss for the period presented
comprises current and deferred tax. Income tax is recognised in the Consolidated Statement
of Profit or Loss except to the extent that it relates to items recognised in other comprehensive
income, or directly in equity, in which case the tax is also recognised in other comprehensive
income, or directly in equity, respectively.
Current tax
Current tax payable represents the amount expected to be paid to taxation authorities on taxable
income for the period, using tax rates enacted or substantively enacted at the reporting date and
any adjustment to tax payable in respect of previous periods.
Deferred tax
Deferred tax is calculated using the balance sheet method, providing for temporary differences
between the carrying amounts of assets and liabilities for financial reporting and taxation
purposes. Deferred tax is measured at the rates that are expected to apply in the period in which
the liability is settled, or asset realised, based on tax rates enacted or substantively enacted
at the reporting date.
Deferred tax assets and liabilities are not recognised if the temporary difference arises from the
initial recognition (other than in a business combination) of assets and liabilities in a transaction that
affects neither the taxable profit nor the accounting profit or in relation to the initial recognition
of goodwill. Deferred tax assets and liabilities are offset when they relate to income taxes levied
by the same taxation authority and the Group intends to settle its current tax assets and liabilities
on a net basis.
A deferred tax asset is recognised only to the extent that it is probable that future taxable profits
will be available against which the deductible temporary differences or unused tax losses and tax
offsets can be utilised. Deferred tax assets are reduced to the extent that it is no longer probable
that the related tax benefit will be realised.
The benefits of intangible assets with indefinite useful lives will flow to the Group on an annual
basis, therefore the carrying amount will be recovered through use.
137
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P
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2
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3
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Notes to the Consolidated Financial Statements
3.12
Trade and other payables
3.13
Provisions (continued)
Trade and other payables comprise amounts owing to the Group’s suppliers that
have been invoiced or accrued and contract liabilities.
Movements in the team member remediation provisions during the period are as follows:
Trade payables
Accruals
Contract liabilities
Total trade and other payables
2023
$M
5,621
1,511
491
7,623
2022
$M
5,216
1,350
436
7,002
Significant Accounting Policies
Contract liabilities
Contract liabilities represent consideration received for performance obligations not yet satisfied
primarily relating to the Group’s loyalty programs, gift cards, and the provision of data analytics
and consulting services. Substantially all of the revenue deferred as at the end of the period
will be recognised in the following period.
3.13
Provisions
The main provisions held by the Group are in relation to employee benefits,
self‑insured risks, restructuring, and onerous contracts.
Current
Employee benefits
Self-insured risks
Restructuring, onerous contracts, and other
Total current provisions
Non‑current
Employee benefits
Self-insured risks
Restructuring, onerous contracts, and other
Total non‑current provisions
Total provisions
2023
$M
1,386
193
61
1,640
130
470
257
857
2022
$M
1,445
177
58
1,680
121
451
274
846
2,497
2,526
3.13.1 Team member remediation provisions
Included in the employee benefits provision is $252 million (2022: $291 million) relating to the team member remediation
provisions, of which $65 million (2022: $90 million) relates to salaried team members and $187 million (2022: $201 million)
relates to hourly paid team members.
Assets and liabilities 3
2023
$M
291
(124)
85
252
2022
$M
154
(64)
201
291
Balance at start of period
Cash payments
Additional provision
Balance at end of period
END-TO-END PAYROLL REVIEW
During the 2021 financial period, the Group established an end-to-end review across the Group’s payroll systems
and processes to test and ensure compliance with the Group’s obligations under the General Retail Industry Award (GRIA)
as well as other modern awards, EAs, and statutory entitlements for both salaried and hourly paid team members across the
Group. As part of this review, certain areas of non-compliance were identified.
The Group has applied extensive resources to the review and analysis of its records, and the calculation of the likely
remediation to affected team members. Notwithstanding this, uncertainty remains in relation to the Group’s exposure
as engagement with team members and the relevant regulators remains in progress.
During the period, the Group concluded its compliance testing and finalised remediation estimates relating to its multi-year
review program across the relevant awards and EAs covering all employees, including the Group’s supply chain operations
which had not been previously reviewed. The provisions recognised as at 25 June 2023 represent the Group’s best estimate
of the remaining payroll remediation obligations. The provisions remain subject to verification, finalisation of payments to the
respective team members, and the outcomes from any further interactions with the relevant regulatory bodies.
In August 2023, the Wage Inspectorate Victoria issued proceedings against Woolworths Group Limited and a subsidiary,
alleging they had failed to pay over $1 million in long service leave entitlements to 1,235 former employees. The proceedings
seek penalties against each company. The proceedings follow on from the Group having identified underpayments in reviewing
its long-service compliance, bringing those underpayments to the attention of Wage Inspectorate Victoria and other State
regulators, and proactively making full remediation payments to the affected Woolworths team members. Uncertainty remains
in relation to the Group’s exposure as a result of these proceedings, as the Group continues to engage with external counsel
and the relevant regulators. Based on the Group’s initial assessment, any obligation is not expected to be material.
Salaried team members
On 30 October 2019, the Group disclosed that a number of salaried team members had not been paid in full compliance
with the Group’s obligations under the GRIA. The Group has provided in excess of $500 million in relation to the remediation
of salaried team members. The Group has remediated all current impacted salaried team members and continues to
progress the payment of previously employed team members with $482 million paid to date. In June 2021, the Fair Work
Ombudsman (FWO) commenced legal proceedings against the Woolworths Group, seeking orders in relation to alleged
contraventions of the Fair Work Act and for further compensation of affected salaried team members. The trial of the FWO
proceedings in the Federal Court occurred in June and July 2023. The trial is intended to determine issues of liability, and
the principles and methodology applicable to the quantification of remediation for affected team members. Class action
proceedings brought by Adero Law Firm against the Woolworths Group in 2019 have been heard at the same time.
The Group is defending the FWO proceedings and the class action proceedings. While the Group has been guided
by extensive advice from external counsel, the outcome and total costs associated with the proceedings are uncertain.
There is a risk that the Court may determine these matters contrary to the Group’s current assessment of the position and
require the Group to make further material remediation payments. During the period, no changes to the estimate of the
provision for salaried team members have been made.
As at 25 June 2023, the Group has a provision of $65 million to settle any remaining obligations reflecting the Group’s
estimate of total remediation less the amounts paid to date. Any changes as a result of new information will be treated
as a change in accounting estimate and will be recognised in the Consolidated Statement of Profit or Loss in the period
in which the new information is available.
Hourly paid team members
In completing the remaining compliance testing and remediation estimates for hourly paid team members, the Group’s supply
chain operations have now been reviewed. As a result, the Group recognised a provision of $85 million during the period
relating to team member payment shortfalls (including interest and on-costs) predominantly as a result of non-compliance with
EAs for hourly paid team members across the Group’s supply chain operations for the 2017 to 2023 financial reporting periods.
139
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140
Notes to the Consolidated Financial Statements
Assets and liabilities 3
3.13
Provisions (continued)
3.13
Provisions (continued)
Of this provision, $61 million has been recognised as a significant item as it relates to prior periods (refer to Note 2.2.3 for further
details). The provision as at 25 June 2023 relating to team member pay remediation to settle any remaining obligations
for hourly paid team members is $187 million. To date, payments of $99 million have been made to impacted hourly paid
team members.
3.13.2
Movements in total self-insured risks, restructuring, onerous contracts, and other provisions
Movement:
Balance at start of period
Net provisions recognised
Cash payments
Other
Balance at end of period
Current
Non-current
Balance at end of period
SELF‑INSURED RISKS
RESTRUCTURING, ONEROUS
CONTRACTS, AND OTHER
2023
$M
628
178
(141)
(2)
663
193
470
663
2022
$M
591
160
(137)
14
628
177
451
628
2023
$M
332
26
(30)
(10)
318
61
257
318
2022
$M
395
(31)
(29)
(3)
332
58
274
332
Significant Accounting Policies
A provision is recognised when the Group has a present legal or constructive obligation as a result
of a past event, it is probable that an outflow of economic benefits will be required to settle the
obligation, and a reliable estimate can be made as to the amount of the obligation. The amount
recognised is the best estimate of the consideration required to settle the present obligation
at the reporting date, taking into account the risks and uncertainties surrounding the obligation.
Employee benefits
The provision for employee benefits comprises a liability for benefits accruing to employees
in respect of annual leave and long service leave and also includes any liability for the Group’s
team member pay remediation.
Liabilities expected to be settled within 12 months are measured at their nominal values using
the remuneration rate expected to apply at the time of settlement. Liabilities which are not
expected to be settled within 12 months are measured as the present value of the estimated
future cash outflows to be made by the Group in respect of services provided by employees
up to the reporting date.
Self-insurance
The provision for self‑insured risks primarily represents the estimated liability for workers’
compensation and public liability claims.
Restructuring
A provision for restructuring is recognised when the Group has approved a detailed and formal
restructuring plan, and the restructuring either has commenced or has been publicly announced.
Onerous contracts
An onerous contract is a contract in which the unavoidable costs of meeting the obligations under
the contract exceed the economic benefits expected to be received under it. The unavoidable costs
under a contract reflect the least net costs of exiting from the contract, which is the lower of the cost
of fulfilling the contract, and any compensation or penalties arising from failure to fulfil the contract.
Critical accounting estimates
The estimates and judgements applied in determining the Group’s provisions involve a high degree
of complexity and have a risk of causing a material adjustment in subsequent periods. Any changes
to the provision as a result of new information will be treated as a change in accounting estimate
and will be recognised in the Consolidated Statement of Profit or Loss in the period in which the
new information is available.
Discount rates
Where a provision is measured using the cash flows estimated to settle the obligation, with the
exception of employee benefits, the cash flows are discounted using a pre‑tax rate that reflects
current market assessments of the time value of money and the risks specific to the liability.
Employee benefits are discounted with reference to market yields at the end of the reporting
period on high quality corporate bonds. Rates are reviewed periodically, and given the nature
of the estimate, reasonably possible changes are not considered likely to have a material impact.
Other accounting estimates
Employee benefits
In estimating the value of employee benefits, consideration is given to expected future salary and
wage levels (including on‑cost rates), experience of employee departures, and periods of service.
The assumptions are reviewed periodically and, given the nature of the estimate, reasonably
possible changes in assumptions are not considered likely to have a material impact.
Included in employee benefits are the team member remediation provisions which represent
the Group’s best estimate of the expenditure required to settle the obligations in accordance
with the relevant EAs and GRIA.
Self-insured risks
Self‑insurance provisions are determined based on independent actuarial assessments, which
consider numbers, amounts, and duration of claims and allow for future inflation and investment
returns. Allowance is included for injuries which occurred before the reporting date, but where
the claim is expected to be notified after the reporting date. The assumptions are reviewed
periodically, and given the nature of the estimate, reasonably possible changes in assumptions
are not considered likely to have a material impact.
Restructuring and onerous contracts
Restructuring provisions are recognised based on the direct expenditures arising from the
restructuring, which are those amounts that are both necessarily entailed by the restructuring
and not associated with the ongoing activities of the Group.
Provisions for onerous contracts are recognised based on the lower of the estimated unavoidable
net costs of meeting all lease and other obligations under the store and associated contracts,
and the Group’s best estimate of the compensation expected to be payable to landlords and other
third parties as a result of early termination of contracts. Estimates differ depending on the rent,
location, lease exit terms, and the Group’s assessment of the timing and likely termination costs.
Financial reporting impacts of sustainability‑related matters
The impact from flooding during the period has not had a material impact on the Group’s
Consolidated Financial Position as it is insured against any damages to its inventories and property,
plant, and equipment. The impacts of acute weather events, such as flooding, on physical assets
and subsequent business interruptions includes, but is not limited to, an increase in the Group’s
cost of insurable risks primarily due to higher premiums, higher deductibles and policy exclusions.
141
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142
Notes to the Consolidated Financial Statements
financing and risk management 4
Capital structure,
4 Capital structure, financing, and risk management
4.1
Earnings per share
Earnings per share presents the amount of profit generated for the reporting
period attributable to shareholders divided by the weighted average number
of shares on issue. The potential for any share rights issued by the Group
to dilute existing shareholders’ ownership when the share rights are exercised
are also presented.
4.2
Dividends (continued)
Dividend Reinvestment Plan (DRP)
The DRP remains active. Eligible shareholders may participate in the DRP in respect of all or part of their shareholding.
There is currently no DRP discount applied and no limit on the number of shares that can participate in the DRP.
Shares will be allocated to shareholders under the DRP for the 2023 final dividend at an amount equal to the Average
Market Price of Shares over the Pricing Period less a discount (if any), and rounded to the nearest cent, or such other price
determined by the Board in its absolute discretion. The Average Market Price of Shares is the average of the daily volume
weighted average market price of ordinary shares of the Company traded on the ASX over the period of five trading
days commencing on 5 September 2023. The last date for receipt of election notices for the DRP is 4 September 2023.
The Company intends to issue new shares and transfer these to participants on or around 27 September 2023 to satisfy
its obligations under the DRP.
2023
2022
During the period, 14.7% (2022: 13.9%) of the dividends paid were reinvested in shares of the Company.
Profit for the period attributable to equity holders of the parent entity used
in earnings per share ($M)
Continuing operations
Discontinued operations
Weighted average number of shares used in earnings per share (shares, millions)
Basic earnings per share
Diluted earnings per share 1
Basic earnings per share (cents per share)
Continuing operations
Discontinued operations
Diluted earnings per share (cents per share)
Continuing operations
Discontinued operations
1,618
–
1,618
1,547
6,387
7,934
1,214.3
1,223.1
1,221.5
1,230.3
133.3
–
133.3
132.3
–
132.3
126.7
522.9
649.6
125.7
519.1
644.8
1
Includes 8.8 million shares (2022: 8.8 million shares) deemed to be issued for no consideration in respect of employee performance rights.
4.2
Dividends
Dividends are distributions of the Group’s profit after tax before significant items
and assets to its shareholders.
2023
2022
CENTS PER
SHARE
TOTAL
AMOUNT
$M
DATE OF
PAYMENT
CENTS PER
SHARE
46
53
560
13 April 2023
643 27 September 2022
39
55
TOTAL
AMOUNT
$M
473
697
DATE OF
PAYMENT
13 April 2022
8 October 2021
99
1,203
94
1,170
(177)
1,026
(163)
1,007
Current year interim
Prior year final
Dividends paid during
the period
Issue of shares to satisfy the
dividend reinvestment plan
Dividends paid in cash
On 23 August 2023, the Board of Directors declared a final dividend of 58 cents per share in respect of the 2023 financial
period, fully franked at a 30% tax rate. The amount will be paid on or around 27 September 2023 and is expected to be
$707 million. As the dividends were declared subsequent to 25 June 2023, no provision had been made at 25 June 2023.
Franking credit balance
Franking credits available for future financial periods (tax paid basis, 30% tax rate) 1
1 Excludes $73 million (2022: $57 million) attributable to non-controlling interests.
2023
$M
1,240
2022
$M
981
The above amount represents the balance of the franking accounts at the end of the period, adjusted for franking credits
that will arise from the payment of income tax payable at the end of the period and franking debits that will arise from the
payment of dividends provided at the end of the period.
4.3
Contributed equity
Contributed equity represents the number of ordinary shares on issue less shares
held by the Group.
2023
2022
NUMBER
M
$M
NUMBER
M
$M
Share capital
1,218,702,058 fully paid ordinary shares (2022: 1,213,902,476) 1
Movement:
Balance at start of period
Issue of shares to satisfy the dividend reinvestment plan
Share buy-back
Balance at end of period
Shares held in trust
Movement:
Balance at start of period
Issue of shares to satisfy employee long-term incentive plans 2
Purchase of shares by the Woolworths Employee Share Trust
Balance at end of period
Contributed equity at end of period
1,213.9
4.8
–
5,379
177
–
1,267.7
4.2
(58.0)
1,218.7
5,556
1,213.9
(4.8)
3.7
(2.9)
(4.0)
(172)
132
(110)
(150)
(5.1)
3.9
(3.6)
(4.8)
l
5
O
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f
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m
a
t
i
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n
5,466
163
(250)
5,379
(213)
166
(125)
(172)
1,214.7
5,406
1,209.1
5,207
1 Holders of ordinary shares are entitled to receive dividends as declared and are entitled to one vote per share at shareholders’ meetings.
In the event of winding up of the Company, ordinary shareholders rank after creditors and are fully entitled to any proceeds on liquidation.
2 Performance rights carry no voting rights. Refer to Note 6.2.
143
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144
Notes to the Consolidated Financial Statements
financing and risk management 4
Capital structure,
4.4
Reserves
4.4
Reserves (continued)
Reserves represent the cumulative gains or losses that have been recognised
primarily in relation to the Group’s derivatives, foreign currency translation
of foreign entities, remuneration, and demerger of Endeavour Group.
2023
CASH FLOW
HEDGE
RESERVE
$M
FOREIGN
CURRENCY
TRANSLATION
RESERVE
$M
REMUNERATION
RESERVE
$M
DEMERGER
RESERVE
$M
OTHER
RESERVES
$M
TOTAL
$M
Balance at start of period
85
18
223
(6,966)
(760)
(7,400)
Effective portion of changes in the
fair value of cash flow hedges,
net of tax
Transfers to initial carrying amount of
hedged items, net of tax
Foreign currency translation
of foreign operations, net of tax
Deconsolidation of controlled entity
Share-based payments expense
Transfer of shares to satisfy
employee long-term incentive plans
Recognition of put option liability over
non-controlling interest
Share of other comprehensive income
of associates, net of derecognition
on partial disposal
Change in the fair value of investments
in equity securities
Balance at end of period
(21)
(59)
–
–
–
–
–
–
–
5
–
–
14
3
–
–
–
–
–
35
–
–
–
–
112
(132)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(21)
(59)
14
3
112
(132)
(79)
(79)
1
(6)
1
(6)
Significant Accounting Policies
Cash flow hedge reserve
The cash flow hedge reserve comprises the effective portion of the cumulative net change in the
fair value of cash flow hedging instruments related to hedged transactions that have not yet
occurred. The cumulative deferred gain or loss on the hedge is recognised in the Consolidated
Statement of Profit or Loss when the hedged transaction impacts profit or loss, consistent with
the applicable accounting policy. Refer to Note 4.7 for details of hedging.
Foreign currency translation reserve (FCTR)
FCTR comprises all foreign exchange differences arising from the translation of the financial
statements of foreign operations where their functional currency is different to the Group’s
presentation currency. Gains and losses on hedging instruments that are designated as hedging
instruments for hedges of net investments in foreign operations are also included in the FCTR.
Refer to Note 4.7 for details of hedging.
Remuneration reserve
The employee remuneration reserve comprises the fair value of share‑based payment plans
recognised as an expense in the Consolidated Statement of Profit or Loss. Refer to Note 6.2
for details of share‑based payments.
Shares issued by the Woolworths Employee Share Trust are charged against the remuneration reserve.
Demerger reserve
The demerger reserve comprises the demerger dividend which represents the difference between
the fair value of Endeavour Group’s net assets distributed and the capital reduction on the
demerger date.
203
(6,966)
(844)
(7,567)
Other reserves
Other reserves comprise the following:
2022
CASH FLOW
HEDGE
RESERVE
$M
FOREIGN
CURRENCY
TRANSLATION
RESERVE
$M
REMUNERATION
RESERVE
$M
DEMERGER
RESERVE
$M
OTHER
RESERVES
$M
TOTAL
$M
Balance at start of period
(13)
71
259
(6,966)
(340)
(6,989)
Effective portion of changes in the
fair value of cash flow hedges,
net of tax
Transfers to initial carrying amount of
hedged items, net of tax
Foreign currency translation
of foreign operations, net of tax
Share-based payments expense
Transfer of shares to satisfy
employee long-term incentive plans
Demerger of Endeavour Group
Recognition of put option liability over
non-controlling interest
Purchase of additional shares from
non-controlling interest
Share of other comprehensive income
of associates
Change in the fair value of investments
in equity securities
Balance at end of period
85
13
–
–
–
–
–
–
–
–
85
–
–
(53)
–
–
–
–
–
–
–
18
–
–
–
139
(166)
(9)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
223
(6,966)
–
–
–
–
–
(34)
85
13
(53)
139
(166)
(43)
(411)
(411)
4
2
4
2
19
(760)
19
(7,400)
• Equity instrument reserve: arises on the revaluation of investments in unlisted equity securities.
Subsequent to initial recognition, these investments are measured at fair value with any
changes recognised in other comprehensive income.
• Put option liability reserve: arises on recognition of put option liabilities over non‑controlling
interests. Subsequent to initial recognition, the put option liabilities are measured at the
present value of the amounts expected to be paid at the time of exercise, with any changes
recognised in the Consolidated Statement of Profit or Loss.
145
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146
Notes to the Consolidated Financial Statements
financing and risk management 4
Capital structure,
4.5
Reconciliation of profit for the period to net cash provided by operating activities
4.6
Borrowings (continued)
This section presents a reconciliation of the Group’s profit for the period to net
cash flows provided by operating activities.
(II)
UPCOMING MATURITIES AND TRANSACTIONS
The Group has $400 million of domestic medium term notes maturing in April 2024, which will be refinanced or repaid from
existing committed undrawn bank facilities within the upcoming 12 months.
Profit for the period
Adjustments for:
Gain on demerger of Endeavour Group
Net share of profit of investments accounted for using the equity method
3.9.3
Depreciation and amortisation
Impairment expense/(reversal of impairment) of non-financial assets
Share-based payments expense
Net loss on disposal of businesses and investments
Net gain on disposal of assets
Revaluation of put option liabilities over non-controlling interests
6.2.1
4.7.4
Other
Changes in:
Increase in inventories
Increase in trade payables
(Decrease)/increase in provisions
Increase in trade and other receivables
Decrease/(increase) in other assets
Increase in other payables
Increase in deferred tax
Increase/(decrease) in income tax payable
Net cash provided by operating activities
4.6
Borrowings
NOTE
2023
$M
2022
$M
1,629
7,944
–
(56)
2,578
43
113
33
(64)
41
22
(119)
371
(37)
(129)
45
191
(132)
225
(6,387)
(68)
2,361
(27)
139
–
(73)
(164)
(58)
(343)
165
175
(96)
(19)
121
(42)
(250)
4,754
3,378
This section provides a summary of the capital management activities of the Group
during the period, including the Group’s borrowings.
4.6.1
Capital structure
The Group manages its capital structure with the objective of enhancing long-term shareholder value through funding
its business at an optimised weighted average cost of capital. The Group remains committed to solid investment grade
credit ratings. The Group’s credit ratings 1 are BBB (stable outlook) according to Standard & Poor’s and Baa2 (stable outlook)
according to Moody’s.
4.6.2
Borrowings
(I)
FINANCING TRANSACTIONS DURING THE CURRENT PERIOD
During the period, the Group refinanced or extended $1.9 billion of bilateral and syndicated bank debt facilities to new tenors,
ranging from 12 months to five years. These facilities are used to manage the Group’s short-term cash flow requirements and
to support the Group’s liquidity position.
1 These credit ratings have been issued by a credit rating agency which holds an Australian Financial Services Licence with an authorisation
to issue credit ratings to wholesale clients only and are for the benefit of the Group’s debt providers.
4.6.3
Composition of debt
Current, unsecured
Short-term money market loans
Bank loans
Securities
Total current borrowings
Non‑current, unsecured
Bank loans
Securities
Unamortised borrowing costs
Total non‑current borrowings
Total borrowings
4.6.4 Movements in borrowings
2023
$M
39
37
390
466
845
2,467
(23)
3,289
3,755
2023
Current, unsecured
Short-term money market loans
Bank loans
Securities
Total current borrowings
Non‑current, unsecured
Bank loans
Securities
Unamortised borrowing costs
Total non‑current borrowings
Total borrowings
NON‑CASH MOVEMENTS
CASH MOVEMENTS
TRANSFERS
FROM NON‑
CURRENT TO
CURRENT
$M
EFFECT OF
MOVEMENTS
IN FOREIGN
EXCHANGE
RATES 1
$M
OPENING
BALANCE
$M
OTHER 2
$M
PROCEEDS
$M
REPAYMENTS
$M
336
18
–
354
1,168
2,791
(21)
3,938
4,292
–
–
400
400
–
(400)
–
(400)
–
–
–
–
–
–
58
–
58
58
–
–
(10)
(10)
–
18
(2)
16
6
39
37
–
76
(336)
(18)
–
(354)
275
(598)
845
–
–
275
351
–
–
(598)
(952)
2,467
(23)
3,289
3,755
1 The $58 million effect of movements in foreign exchange rates represents the change in the carrying values of the European Medium Term
Notes which are hedged items in a cash flow hedge relationship. Refer to Note 4.7.1 for further details.
2 Other includes $18 million relating to the Medium Term Notes (Green Bond) and several Domestic Notes, which are hedged items in a fair
value hedge relationship and are subject to changes in the carrying amount due to fair value adjustments attached to each arrangement.
2022
$M
336
18
–
354
1,168
2,791
(21)
3,938
4,292
CLOSING
BALANCE
$M
39
37
390
466
147
A
n
n
u
a
l
R
e
p
o
r
t
2
0
2
3
l
W
o
o
w
o
r
t
h
s
G
r
o
u
p
1
i
h
g
h
l
i
g
h
t
s
P
e
r
f
o
r
m
a
n
c
e
2
r
e
v
e
w
i
B
u
s
i
n
e
s
s
3
R
e
p
o
r
t
D
i
r
e
c
t
o
r
s
'
4
R
e
p
o
r
t
i
F
n
a
n
c
a
i
l
5
O
t
h
e
r
i
n
f
o
r
m
a
t
i
o
n
148
Notes to the Consolidated Financial Statements
financing and risk management 4
Capital structure,
4.6
Borrowings (continued)
4.7
Financial risk management
2022
Current, unsecured
Short-term money market loans
Bank loans
Total current borrowings
Non‑current, unsecured
Bank loans
Securities
Unamortised borrowing costs
Total non‑current borrowings
Total borrowings
NON‑CASH MOVEMENTS
CASH MOVEMENTS
EFFECT OF
MOVEMENTS
IN FOREIGN
EXCHANGE
RATES 1
$M
–
–
–
–
(41)
–
(41)
(41)
OPENING
BALANCE
$M
44
75
119
1,350
1,416
(13)
2,753
2,872
OTHER 2
$M
PROCEEDS
$M
REPAYMENTS
$M
–
–
–
89
(164)
(8)
(83)
(83)
336
18
354
579
1,580
–
2,159
2,513
(44)
(75)
(119)
(850)
–
–
(850)
(969)
CLOSING
BALANCE
$M
336
18
354
1,168
2,791
(21)
3,938
4,292
1 The $41 million effect of movements in foreign exchange rates represents the change in the carrying values of the European Medium Term
Notes which are hedged items in a cash flow hedge relationship. Refer to Note 4.7.1 for further details.
2 Other includes $164 million relating to the Medium Term Notes (Green Bond) and several Domestic Notes, which are hedged items in a fair
value hedge relationship and are subject to changes in the carrying amount due to fair value adjustments attached to each arrangement.
Significant Accounting Policies
Borrowings
Borrowings are recognised initially at fair value less attributable transaction costs and are
subsequently stated at amortised cost. Any difference between the cost and the redemption value
is recognised in the Consolidated Statement of Profit or Loss over the period of the borrowings.
Financial reporting impacts of sustainability‑related matters
Included in the Group’s borrowings as at 25 June 2023 are $1.5 billion of Sustainability Linked
Bonds (SLBs), which have a direct link to the Group’s commitment to reducing emissions.
The SLB structure embeds a penalty (via a prospective margin increase of 0.25% per annum) into
the terms of the notes. This penalty applies if, at the respective testing dates of the notes, the
Group’s scope 1 and 2 emissions are not aligned with the forecast trajectory of the Group’s 2030
emissions reduction targets.
The Group has committed to reduce scope 1 and 2 emissions from its own operations by 63% by
2030 compared to a 2015 baseline. As at 25 June 2023, the Group also had a Green Bond on issue
that is certified by the Climate Bonds Initiative. The proceeds of the Green Bond have been fully
allocated to eligible assets as per the Climate Bonds Standards, being low emissions supermarkets,
solar energy installations, LED lighting upgrades and heating, ventilation, and air conditioning
optimisation projects.
This section provides a summary of the Group’s exposure to market, liquidity,
and credit risks, along with the Group’s policies and strategies in place to mitigate
these risks.
The Group’s Treasury function is responsible for managing its liquidity, funding, and capital requirements, and identifying
and managing financial risks relating to the Group’s operations. These financial risks include:
• Market risk (refer to Note 4.7.1);
•
Liquidity risk (refer to Note 4.7.2); and
• Credit risk (refer to Note 4.7.3).
These risks affect the fair value measurements applied by the Group, which are detailed in Note 4.7.4.
The Group adheres to a treasury policy approved by the Board, which has written principles relating to liquidity risk, interest
rate risk, foreign exchange risk, credit risk, and the use of derivatives for hedging purposes. The Treasury function reports
on its compliance with the policy to the Board.
The Group uses various types of derivatives to hedge its exposures to variability in interest rates and foreign exchange rates.
The Group does not enter into or trade financial instruments, including derivatives, for speculative purposes.
4.7.1
Market risk
(I)
INTEREST RATE RISK
Interest rate risk is the risk that a change in interest rates may negatively impact the Group’s cash flow or profitability
because the Group’s borrowings and associated hedging arrangements reset directly in accordance with interest rate
benchmarks or reset regularly to current rates influenced by interest rate benchmarks. The risk is managed by maintaining
an appropriate mix between floating and fixed rate borrowings and through the use of approved derivatives to hedge
the risk.
(II)
FOREIGN EXCHANGE RISK
Foreign exchange risk is the risk that a change in foreign exchange rates may negatively impact the Group’s cash flow
or profitability because the Group has an exposure to a foreign currency or has foreign currency denominated obligations.
The exposure to purchases denominated in foreign currencies is primarily managed through forward exchange contracts
and foreign currency options. These have been designated as cash flow hedges and the Group has established a 100%
hedge relationship against the identified exposure.
To hedge the risk of adverse movements in foreign exchange rates in relation to borrowings denominated in foreign
currency, the Group enters into cross currency swaps under which it agrees to exchange specified principal and interest
foreign currency amounts at an agreed future date at a specified exchange rate. The European Medium Term Notes are 100%
hedged in this way.
Foreign currency exposures arising on translation of net investments in foreign subsidiaries are predominantly unhedged.
149
A
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u
a
l
R
e
p
o
r
t
2
0
2
3
l
W
o
o
w
o
r
t
h
s
G
r
o
u
p
1
i
h
g
h
l
i
g
h
t
s
P
e
r
f
o
r
m
a
n
c
e
2
r
e
v
e
w
i
B
u
s
i
n
e
s
s
3
R
e
p
o
r
t
D
i
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t
o
r
s
'
4
R
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p
o
r
t
i
F
n
a
n
c
a
i
l
5
O
t
h
e
r
i
n
f
o
r
m
a
t
i
o
n
150
Notes to the Consolidated Financial Statements
financing and risk management 4
Capital structure,
4.7
Financial risk management (continued)
4.7
Financial risk management (continued)
(III)
HEDGE ACCOUNTING ARRANGEMENTS
Interest rate swaps – fair value hedges
At the reporting date, the fair value and notional amounts of derivatives entered into for hedging purposes for the Group are:
NOTIONAL VALUE
FAIR VALUE ASSET
FAIR VALUE LIABILITY
Cash flow hedges
Forward exchange contracts
Foreign currency options
2023
$M
865
802
2022
$M
1,911
–
2023
$M
21
22
43
Cross currency swaps
European Medium Term Notes
880
880
32
Interest rate swaps
Medium Term Notes (Green Bond)
400
–
3
Fair value hedges
Interest rate swaps
Medium Term Notes (Green Bond)
Domestic Medium Term Notes
Domestic Medium Term Notes
400
600
350
400
600
350
3
–
–
3
2022
$M
94
–
94
7
–
–
–
–
–
Total
81
101
2023
$M
2022
$M
(1)
–
(1)
(6)
–
(6)
(29)
(15)
–
–
(13)
(90)
(40)
(143)
(173)
(13)
(93)
(42)
(148)
(169)
Forward exchange contracts and foreign currency options
At the reporting date, the net amount of unrealised gains under forward exchange contracts and foreign currency options
that are hedging anticipated purchases of inventory and equipment is $42 million (2022: $88 million net unrealised gain).
The hedge relationships are all assessed as highly effective with insignificant hedge ineffectiveness and the unrealised gain
of $42 million has been recognised in the hedge reserve (2022: $88 million gain).
The weighted average exchange rates hedged by outstanding forward exchange contracts and foreign currency options are
AUD/USD 1: 0.68 (2022: 0.73) and AUD/EUR: 0.63 (2022: 0.64).
Cross currency swaps
At the reporting date, cross currency swaps have a net unrealised gain of $3 million (2022: $8 million net unrealised loss),
of which $17 million is attributable to an unrealised gain on the foreign exchange component (2022: $41 million net unrealised
loss) and $14 million is attributable to an unrealised loss on the interest rate component (2022: $33 million net unrealised gain).
The interest rate component of the cross currency swaps are designated as cash flow hedges, in a 100% hedge relationship
with the underlying debt. Accordingly, the unrealised loss of $14 million attributable to the interest rate component has been
recognised in the cash flow hedge reserve (2022: $33 million) at the reporting date, with insignificant hedge ineffectiveness.
The movement in the recognised gain attributable to the foreign exchange component of $17 million (2022: $41 million loss)
has been recognised in the Consolidated Statement of Profit or Loss during the period, completely offsetting the foreign
exchange revaluation of the underlying debt.
Interest rate swaps – cash flow hedges
At the reporting date, interest rate swaps designated as cash flow hedges have an unrealised gain of $3 million
(2022: nil). These interest rate swaps are designated to be in a 100% hedge relationship against the identified exposure,
and the movement in the unrealised gain of $3 million has been recognised in the cash flow hedge reserve (2022: nil) at the
reporting date, with insignificant hedge ineffectiveness.
1 The average rate includes foreign currency options measured at the floor rate.
At the reporting date, interest rate swaps designated as fair value hedges have an unrealised loss of $140 million
(2022: $148 million unrealised loss). These interest rate swaps are designated to be in a 100% hedge relationship against
the identified exposure, and the movement in the unrealised gain of $8 million has been recognised in the Consolidated
Statement of Profit or Loss (2022: $164 million unrealised loss), offsetting the movement in the fair value of the hedged item.
(IV)
CASH FLOW HEDGE RESERVE
The table below details the movements in the cash flow hedge reserve during the period:
Balance at start of period
Gain/(loss) arising on changes in fair value of hedging instruments entered into
for cash flow hedges:
Forward exchange contracts and foreign currency options
Cross currency swaps
Interest rate swaps
Income tax related to gains recognised in other comprehensive income
Transfers to initial carrying amount of hedged items:
Forward exchange contracts and foreign currency options
Income tax related to amounts transferred to initial carrying amount of hedged items
Balance at end of period
(V)
SENSITIVITY ANALYSIS
2023
$M
85
15
(47)
3
8
(21)
(85)
26
(59)
5
2022
$M
(13)
85
33
–
(33)
85
19
(6)
13
85
Reasonably possible changes at the reporting date of the Group’s exposure to floating interest rate risk and foreign currency
risk, after taking into consideration hedges of foreign currency payables, foreign currency borrowings and forecast foreign
currency transactions, could result in the following impacts:
INTEREST RATE RISK
FOREIGN EXCHANGE
RISK
•
•
1% change could result in either a $2 million increase or decrease on equity before tax and no impact
on profit before tax.
10% change could result in either a $141 million increase or $143 million decrease on equity before tax
and no impact on profit before tax.
(VI)
POWER PURCHASE AGREEMENT
In prior year, the Group entered into a power purchase agreement (PPA) for a period of 9.5 years. As at 25 June 2023, the fair
value of the PPA was $32 million (2022: $22 million).
The PPA is not a physical electricity supply contract but operates as a contract for difference where a strike price is agreed.
If the electricity spot price is higher than the strike price, the counterparty will pay the difference to the Group. Conversely,
if the electricity spot price is lower than the strike price, the Group will pay the difference to the counterparty. The PPA
is classified as a derivative and is measured at fair value through profit or loss.
4.7.2
Liquidity risk
Liquidity risk is the risk that the Group may not have sufficient cash balances and access to funding sources to meet its cash
obligations. This risk arises through events such as large amounts falling due for payment, an interruption to cash inflows due
to technology incidents or banking system interruption, or an interruption to funding sources and markets.
The treasury policy approved by the Board has set an appropriate liquidity risk management framework for short, medium,
and long-term funding requirements.
The Group maintains a minimum daily liquidity ratio, which the Treasury function monitors and forecasts over a 12-month
rolling period. The Group may decide to hold higher levels of liquidity from time to time in anticipation of expected requirements
or events. To minimise refinancing risk, the Group maintains a diversity of funding sources and debt maturities. Upcoming
maturities are included in the liquidity ratio calculation and must be covered by adequate liquidity to repay or refinance them.
151
A
n
n
u
a
l
R
e
p
o
r
t
2
0
2
3
l
W
o
o
w
o
r
t
h
s
G
r
o
u
p
1
i
h
g
h
l
i
g
h
t
s
P
e
r
f
o
r
m
a
n
c
e
2
r
e
v
e
w
i
B
u
s
i
n
e
s
s
3
R
e
p
o
r
t
D
i
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e
c
t
o
r
s
'
4
R
e
p
o
r
t
i
F
n
a
n
c
a
i
l
5
O
t
h
e
r
i
n
f
o
r
m
a
t
i
o
n
152
Notes to the Consolidated Financial Statements
financing and risk management 4
Capital structure,
4.7
Financial risk management (continued)
4.7
Financial risk management (continued)
At the reporting date, the Group has total undrawn committed facilities of $2,765 million (2022: $2,460 million) available.
These facilities may be drawn at any time, subject to the terms of the lending agreements. Some facilities are subject
to certain financial covenants and undertakings. No covenants have been breached during the period.
The following tables detail the Group’s undiscounted non-derivative liabilities and derivative assets and liabilities and
their contractual maturities. The maturity profile of the Group’s undiscounted lease liabilities is included in Note 3.5.2.
2023
Non‑derivative liabilities
Borrowings (floating)
Borrowings (fixed)
Put option liabilities over non-controlling interests
Trade and other payables 1
Derivative assets and liabilities
Foreign exchange contracts
Cross currency swaps
Interest rate swaps 2
Total
2022
Non‑derivative liabilities
Borrowings (floating)
Borrowings (fixed)
Put option liabilities over non-controlling interests
Trade and other payables 1
Derivative assets and liabilities
Foreign exchange contracts
Cross currency swaps
Interest rate swaps 2
(118)
(455)
(176)
(7,132)
(7,881)
21
(16)
(31)
(26)
MATURITY ANALYSIS OF FINANCIAL ASSETS AND LIABILITIES
ONE YEAR OR
LESS
$M
ONE TO TWO
YEARS
$M
TWO TO FIVE
YEARS
$M
OVER FIVE
YEARS
$M
(114)
(444)
–
–
(828)
(456)
(619)
–
–
(1,901)
–
–
(558)
(1,903)
(1,901)
(12,243)
TOTAL
$M
(1,060)
(3,256)
(795)
(7,132)
–
(16)
(23)
(39)
–
(47)
(56)
(103)
(2,006)
–
(7)
(28)
(35)
21
(86)
(138)
(203)
(1,936)
(12,446)
(7,907)
(597)
MATURITY ANALYSIS OF FINANCIAL ASSETS AND LIABILITIES
ONE YEAR OR
LESS
$M
ONE TO TWO
YEARS
$M
TWO TO FIVE
YEARS
$M
OVER FIVE
YEARS
$M
(380)
(55)
(76)
(6,566)
(7,077)
86
(16)
9
79
(472)
(455)
–
–
(754)
(516)
(587)
–
–
(2,284)
–
–
(927)
(1,857)
(2,284)
(7)
(16)
9
(14)
–
(48)
14
(34)
–
(23)
11
(12)
TOTAL
$M
(1,606)
(3,310)
(663)
(6,566)
(12,145)
79
(103)
43
19
4.7.3 Credit risk
Credit risk is the risk that counterparties who may be required to pay monies to the Group may fail and therefore not be able
to make those payments. Under the treasury policy approved by the Board, the Group can only invest surplus funds or
execute derivatives with counterparty banks and financial institutions that are rated BBB+ or higher by Standard & Poor’s
(or equivalent with other rating agencies).
The recognised financial assets of the Group include amounts receivable arising from unrealised gains on derivatives.
For derivatives, credit risk may also arise from the potential failure of the counterparties to meet their obligations under
the respective contracts at maturity.
At the reporting date, no material credit risk exposure existed in relation to potential counterparty failure on such financial
instruments. Other than the loss allowance recognised in relation to trade and other receivables in Note 3.1, no financial
assets were impaired or past due.
4.7.4
Fair value measurement of financial instruments
Some of the Group’s financial assets and financial liabilities are measured at fair value at the end of each reporting period.
They are grouped into the following levels based on the degree to which the fair value measurement inputs are observable:
Level 1
Fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets
or liabilities.
Level 2
Fair value measurements are those derived from inputs other than quoted prices included within level 1 that are
observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3
Fair value measurements are those derived from valuation techniques that include inputs for the asset or liability
that are not based on observable market data (unobservable inputs).
Forward exchange contracts and foreign
currency options
Cross currency, interest rate swaps and
fair value hedges
Power purchase agreement
Convertible and SAFE notes
Unlisted equity securities
Put option liabilities over non-controlling
interests
NOTE
4.7.1
4.7.1
3.3
3.3
FAIR VALUE ASSET
FAIR VALUE LIABILITY
2023
$M
2022
$M
2023
$M
2022
$M
FAIR VALUE
HIERARCHY
43
38
32
2
75
–
94
7
22
11
60
–
(1)
(6)
Level 2
(172)
(163)
–
–
–
–
–
–
Level 2
Level 2
Level 3
Level 3
(765)
(630)
Level 3
There were no transfers between level 1, level 2, or level 3 during the period.
Total
(6,998)
(941)
(1,891)
(2,296)
(12,126)
LEVEL 3 MOVEMENTS
1 Excludes contract liabilities.
2
Interest rate swaps are net settled.
For floating rate instruments, the amount disclosed is determined by reference to the interest rate at the last re-pricing
date and the loans are repaid at the respective facility maturity date. Cash flows represented are contractual and calculated
on an undiscounted basis, based on current rates at the reporting date.
The following table shows a reconciliation from the opening balances to the closing balances for Level 3 fair values:
Balance at start of the period
Additions
Interest unwind
Revaluation
Early acquisition of additional shares
Conversion
Balance at end of the period
CONVERTIBLE AND SAFE NOTES
UNLISTED EQUITY SECURITIES
PUT OPTION LIABILITIES OVER
NON‑CONTROLLING INTERESTS
2023
$M
11
–
–
(2)
–
(7)
2
2022
$M
62
3
–
–
–
(54)
11
2023
$M
60
19
–
(4)
–
–
75
2022
$M
33
8
–
19
–
–
60
2023
$M
(630)
(79)
(15)
(41)
–
–
(765)
2022
$M
(390)
(411)
(13)
164
20
–
(630)
153
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e
p
o
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t
2
0
2
3
l
W
o
o
w
o
r
t
h
s
G
r
o
u
p
1
i
h
g
h
l
i
g
h
t
s
P
e
r
f
o
r
m
a
n
c
e
2
r
e
v
e
w
i
B
u
s
i
n
e
s
s
3
R
e
p
o
r
t
D
i
r
e
c
t
o
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s
'
4
R
e
p
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i
F
n
a
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a
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5
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f
o
r
m
a
t
i
o
n
154
Notes to the Consolidated Financial Statements
financing and risk management 4
Capital structure,
4.7
Financial risk management (continued)
4.7
Financial risk management (continued)
FAIR VALUE OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES THAT ARE NOT MEASURED AT FAIR VALUE
ON A RECURRING BASIS
The carrying value of cash and cash equivalents, financial assets, bank and other loans, and non-interest bearing monetary
financial liabilities of the Group approximate their fair value.
ESTIMATION OF FAIR VALUES
At each reporting period, the Group reviews any material adjustments for level 3 fair values and assesses whether any
evidence can be obtained from third parties to support the conclusion that these valuations meet the requirements of the
Standards, including the level in the fair value hierarchy in which the valuations should be classified. Any material valuation
adjustments are reported to the Board.
The following summarises the major methods and assumptions used in estimating the fair values of financial assets and
liabilities categorised within level 2 and level 3 of the fair value hierarchy:
• The fair value of foreign exchange contracts is determined using a discounted cash flow model where future cash flows
are estimated based on market forward exchange rates as at the end of the reporting period and the contract forward
rate, discounted by the observable yield curves of the respective currency;
• The fair value of foreign currency options is determined using a Black-Scholes model;
• The fair value of cross currency and interest rate swaps is determined using a discounted cash flow model where future
cash flows are estimated based on market forward interest rates and in the case of cross currency swaps, market
forward exchange rates as at the end of the reporting period and the contract rates, discounted by the observable yield
curves, adjusted to reflect the credit risk of the various respective counterparties;
• The fair value of the power purchase arrangement is determined using a discounted cash flow model where the future
cash flows are estimated primarily based on forecast forward market prices, discounted at the Group’s incremental cost
of debt;
• The fair value of convertible and SAFE notes is determined using a Black-Scholes model or a Monte Carlo simulation model;
• The fair value of unlisted equity securities is determined using the pricing from the latest external fundraising of the
unlisted entity which represents the current market value of the investment or, where this is not available, using
an appropriate model such as a discounted cash flow model based on estimated future cash flows, discounted at a rate
that reflects the relative risks of the investment; and
• The fair value of put option liabilities over non-controlling interests is determined as the present value of the amounts
expected to be paid at the time of exercise, discounted at the Group’s cost of debt.
LEVEL 3 SENSITIVITY ANALYSIS
SAFE notes and unlisted equity securities
Reasonably possible changes at the reporting date to the significant unobservable inputs would not have resulted in a material
change in the values of the SAFE notes and unlisted equity securities.
Put option liabilities over non-controlling interests
Reasonably possible changes at the reporting date to the following significant unobservable inputs, assuming all other
variables remain constant, could result in a change in the value of the put option liabilities as follows:
QUANTIUM
PFD
MYDEAL
•
•
•
•
5% change in three-year trailing average revenue growth at the date of exercise could result in an increase
or decrease of $34 million, subject to a floor.
2% change in the three-year trailing average EBITDA margin could result in an increase or decrease
of $14 million, subject to a floor.
20% change in the expected EBITDA at the time of exercise could result in an increase or decrease
of $103 million, subject to a floor.
20% change in either the LTM GTV at the time of exercise or two-year average delivered margin at the time
of exercise could result in an increase or decrease of approximately $16 million.
Significant Accounting Policies
Derivatives
Derivatives are initially recognised at fair value. Subsequently, at each reporting date, the
derivatives are remeasured at fair value and the gain or loss on remeasurement is recognised
in the Consolidated Statement of Profit or Loss, unless the derivatives are designated
as the hedging instrument in a cash flow hedge where the gain or loss is recognised in other
comprehensive income. A derivative is presented as a non‑current asset or a non‑current liability
if the remaining maturity of the instrument is more than 12 months and it is not due to be realised
or settled within 12 months.
Cash flow hedge
A cash flow hedge is a hedge of an exposure to variability in cash flows that is attributable
to a particular risk associated with a recognised asset or liability or a highly probable forecast
transaction that could affect profit or loss.
Where a derivative is designated as the hedging instrument in a cash flow hedge, the effective part
of any gain or loss on the derivative is recognised in other comprehensive income and accumulated
in a separate cash flow hedge reserve within equity.
When the forecast transaction subsequently results in the recognition of a non‑financial asset
or non‑financial liability, the associated cumulative gain or loss is removed from equity and
included in the initial cost or other carrying amount of the non‑financial asset or liability. If the
forecast transaction subsequently results in the recognition of a financial asset or a financial
liability, then the associated gains and losses that were accumulated in equity will be reclassified
into profit or loss in the same period or periods during which the asset acquired or liability assumed
affects profit or loss. The ineffective part of any derivative designated as the hedging instrument
in a cash flow hedge is recognised immediately in the Consolidated Statement of Profit or Loss.
When a hedging instrument expires or is sold, terminated, or exercised, but the hedged forecast
transaction is still expected to occur, the cumulative gain or loss at that point remains in equity
and is recognised in accordance with the above policy when the transaction occurs. If the hedged
transaction is no longer expected to take place, the cumulative unrealised gain or loss accumulated
in equity is reclassified immediately into the Consolidated Statement of Profit or Loss. Gains
or losses removed from equity during the period in relation to interest rate hedge instruments are
recognised within finance costs in the Consolidated Statement of Profit or Loss.
Fair value hedge
A fair value hedge is a hedge of an exposure to changes in fair value of a recognised asset or liability
that is attributable to a particular risk and could affect profit or loss. Where a derivative is designated
as the hedging instrument in a fair value hedge, the gain or loss on the hedging instrument is
recognised in the Consolidated Statement of Profit or Loss, together with the gain or loss on the
hedged item attributable to the hedged risk, in the line item relating to the hedged item.
Hedge accounting is discontinued when the Group revokes the hedging relationship, when the
hedging instrument expires or is sold, terminated, or exercised, or when it no longer qualifies for
hedge accounting. The fair value adjustment to the carrying amount of the hedged item arising
from the hedged risk is amortised in the Consolidated Statement of Profit or Loss from that date.
155
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156
Notes to the Consolidated Financial Statements
5 Group structure
5.1
Acquisition of subsidiaries
This section presents information about material acquisitions that occurred
during the period.
During the period, the Group acquired 100% of Shopper Media Group Holdings Pty Ltd (Shopper), a leading Australian digital
out of home media company, and 80.2% of online marketplace MyDeal.com.au Pty Limited (MyDeal). This resulted in the
Group gaining control of Shopper and MyDeal for total consideration of $380 million. The acquisition of Shopper supports
the growth potential of Cartology, the Group’s existing retail media business, as it offers targeted shopper advertising
through a national screen network of more than 2,000 screens in over 400 shopping centres. The Group paid $162 million for
the acquisition of Shopper, which included initial consideration of $159 million and $3 million relating to both working capital
adjustments and an earn out arrangement as certain earning thresholds were achieved during the period.
Separately, the Group acquired 80.2% of the issued share capital of MyDeal for $218 million. MyDeal is one of Australia’s
leading online marketplaces and this investment enhances the Group’s marketplace capabilities, particularly in furniture,
homewares, and other bulky goods. MyDeal minority shareholders have a put option and the Group has an equivalent
call option over the remaining 19.8% of the shares in MyDeal, which is exercisable after three years from the acquisition
date. The put option liability is primarily referenced to a gross transaction value multiple, where the exit enterprise value
is calculated as the exit LTM GTV multiplied by an exit multiple which is adjusted for profitability factors, changes in working
capital, and net debt to arrive at an equity value (being the option price).
During the year, the Group finalised its acquisition accounting for Shopper and MyDeal and no material adjustments
to the amounts initially recognised were made. The identifiable net assets acquired and liabilities assumed at the date
of the acquisitions, including the fair value of Shopper and MyDeal’s intangible assets, is included below.
2023
Assets
Cash and cash equivalents
Trade and other receivables
Inventories
Lease assets
Property, plant and equipment
Intangible assets 2
Deferred tax assets
Other assets
Total assets
Liabilities
Trade and other payables
Lease liabilities
Provisions
Deferred tax liabilities
Other liabilities
Total liabilities
Total identifiable net assets acquired
NOTE
SHOPPER 1
$M
MYDEAL 1
$M
TOTAL
$M
3.5.1
3.5.2
6
8
–
44
17
57
–
2
134
6
44
6
19
–
75
59
9
–
11
–
1
49
11
1
82
21
–
1
13
2
37
45
15
8
11
44
18
106
11
3
216
27
44
7
32
2
112
104
1 From the date of acquisition, both Shopper’s and MyDeal’s contribution to the Group’s earnings during the period was not material.
Intangible assets include license agreements of $54 million, software of $28 million, brand names of $14 million, and customer
2
relationships of $10 million, which are amortised on a straight-line basis over their expected useful lives.
Group structure 5
5.1
Acquisition of subsidiaries (continued)
GOODWILL
The goodwill arising from these acquisitions has been recognised as follows:
Consideration
Non-controlling interest 1
Fair value of identifiable net assets acquired
Goodwill
SHOPPER
$M
MYDEAL
$M
162
–
(59)
103
218
9
(45)
182
TOTAL
$M
380
9
(104)
285
1 Based on the non-controlling interest’s proportion of the fair value of identifiable net assets of MyDeal.
The $285 million of goodwill is attributable mainly to the skills, expertise, and technical talent of the existing Shopper and
MyDeal team members in out of home media and online retail marketplace, and intangible assets that do not qualify for
separate recognition. The goodwill recognised on acquisition was allocated to the Group’s existing business units where
the expected synergies of the combination are expected to be earned.
PUT OPTION
The Group has a put option liability over the remaining 19.8% of the shares in MyDeal which is expected to be exercised after
30 September 2025. On acquisition, a put option liability of $79 million was recognised at the present value of the amount
expected to be paid at the time of exercise within other financial liabilities with a corresponding charge directly to equity.
During the period, the amount expected to be paid at the time of exercise was reassessed as the Group considered the key
terms of the shareholders agreement and the business outlook. In the period, no material change to the estimate of the
amount expected to be paid at the time of exercise was determined and a portion of the discount on the put option liability
was unwound through finance costs in the Consolidated Statement of Profit or Loss.
Significant Accounting Policies
Business combinations
The Group accounts for acquisitions of businesses using the acquisition method. The consideration
transferred in a business combination and the identifiable net assets acquired are recognised at fair
value. Goodwill is measured as the excess of the sum of the consideration transferred, the amount
of any non‑controlling interest in the acquiree, and the fair value of the Group’s previously held equity
interest in the acquiree (if any) over the identifiable assets acquired and liabilities assumed.
When the consideration transferred by the Group in a business combination includes contingent
consideration, the contingent amount is measured at fair value at the date of acquisition.
If the obligation to pay contingent consideration meets the definition of a financial instrument
classified as equity, then it is not remeasured and the settlement is accounted for within equity.
Other contingent consideration is remeasured at fair value at each reporting date and subsequent
changes in the fair value of the contingent consideration are recognised in the Consolidated
Statement of Profit or Loss.
When a business combination is achieved in stages, the Group’s previously held interest in the
acquired entity is remeasured to its acquisition date fair value. The resulting gain or loss
is recognised in the Consolidated Statement of Profit or Loss. Amounts arising from interests
in the acquiree prior to the acquisition date that have previously been recognised in the
Consolidated Statement of Other Comprehensive Income are reclassified to the Consolidated
Statement of Profit or Loss, where such treatment would be appropriate if that interest were
disposed of.
157
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158
Notes to the Consolidated Financial Statements
Group structure 5
5.2
Subsidiaries
5.2
Subsidiaries (continued)
The following section presents information relating to the Group’s subsidiaries.
5.2.1
Deed of cross guarantee
Woolworths Group Limited and each of the wholly owned Australian subsidiaries set out below (together referred to as the
Closed Group) have entered into a deed of cross guarantee (the Deed), as defined in ASIC Corporations (Wholly-owned
Companies) Instrument 2016/785 (the Instrument). The effect of the Deed is that each entity in the Closed Group guarantees
the payment in full of all debts of the other entities in the Closed Group in the event of their winding up. Pursuant to the
Instrument, the wholly-owned subsidiaries within the Closed Group are relieved from the requirement to prepare, audit,
and lodge separate financial reports.
PARTIES TO THE DEED DURING THE PERIOD
COMPANY
ACN 001 259 301 Pty Limited1
Josona Pty Ltd
Advantage Supermarkets Pty Ltd
Kiaora Lands Pty Limited
Advantage Supermarkets WA Pty Ltd
Leasehold Investments Pty Ltd
Andmist Pty. Limited
Macro Wholefoods Company Pty Limited
Australian Grocery Wholesalers Pty Limited
Masters Installation Pty Limited
Australian Independent Retailers Pty Ltd
Milkrun Delivery Pty Limited2
Australian Safeway Stores Pty. Ltd.
Nalos Pty Ltd
Barjok Pty Ltd
Calvartan Pty. Limited
Cartology Pty Limited
Cenijade Pty. Limited
Charmtex Pty Ltd1
Oxygen Nominees Pty. Ltd.
PEH (NZ IP) Pty Ltd
Philip Leong Stores Pty Limited
Primary Connect International Pty Limited
Progressive Enterprises Holdings Limited
DB Deals Online Pty Limited
QFD Pty. Limited1
Dentra Pty. Limited
Drumstar Pty Ltd
Drystone Pty Ltd1
Fabcot Pty Ltd
Fabsky Pty Ltd1
Gembond Pty. Limited
Grand Horizons Pty Ltd
GreenGrocer.com.au Pty Ltd
Grocery Wholesalers Pty Ltd
Healthylife Company Pty Limited
HP Distribution Pty Limited
Hydrogen Nominees Pty. Ltd
Hydrox Brands Pty Ltd
Jack Butler & Staff Pty. Ltd.
Queensland Property Investments Pty Ltd
Shopper Data Group Pty Ltd3
Shopper Media Group Pty Ltd3
Shopper Media Group Holdings Pty Ltd3
Shopper Media Group Operations Pty Ltd3
Spaurum Pty Ltd3
Universal Wholesalers Pty Limited
Vincentia Nominees Pty Ltd
W23 Pty Limited
W23 Incubator Pty Limited
W23 Investments Pty Limited
W23 Investments 4 Pty Limited
W23 Ventures Pty Limited
W360 R&D Pty Limited
1 These dormant subsidiaries were released from the Deed as a result of entering into a Revocation Deed on 12 April 2023.
2 Formerly Metro 60 Pty Limited.
3 These wholly-owned subsidiaries became a party to the Deed by way of an Assumption Deed on 16 June 2023.
COMPANY
Weetah Pty. Limited
WGP No 1 Pty Limited
WGP No 2 Pty Limited
Woolworths Executive Superannuation Scheme Pty Limited
Woolworths Format Development Pty Limited
Woolworths Group Foundation Pty Limited2
Woolies Liquor Stores Pty. Ltd.
Woolworths Group Payments Pty Limited
Woolstar Pty. Limited
Woolworths Group Superannuation Scheme Pty Ltd
Woolworths (International) Pty Limited
Woolworths International Trading Pty Limited
Woolworths (Project Finance) Pty. Limited1
Woolworths Management Pty Ltd
Woolworths (Q’land) Pty Limited
Woolworths (R & D) Pty Limited1
Woolworths Marketplace Pty Limited
Woolworths Properties Pty Limited
Woolworths (South Australia) Pty Limited
Woolworths Property Double Bay Pty Limited
Woolworths (Victoria) Pty Limited
Woolworths Townsville Nominee Pty Ltd
Woolworths (W.A.) Pty Limited
Woolworths360 Pty Limited
Woolworths Trust Management Pty Limited
Woolworths Trustee No. 2 Pty Limited
Woolworths360 Investments Pty Limited
WPay Pty Limited
Woolworths Custodian Pty Ltd
1 These dormant subsidiaries were released from the Deed as a result of entering into a Revocation Deed on 12 April 2023.
2 Formerly Woolworths Australian Communities Foundation Pty Limited.
A Statement of Profit or Loss and retained earnings, and Statement of Financial Position for the entities which were party
to the Deed during the period are as follows:
Continuing operations
Revenue from the sale of goods and services
Cost of sales
Gross profit
Other revenue
Branch expenses
Administration expenses
Earnings before interest and tax
Finance costs
Profit before income tax
Income tax expense
Profit for the period
RETAINED EARNINGS
Balance at start of period
Profit for the period 2
Dividends paid
Actuarial (loss)/gain on defined benefit superannuation plans
Share buy-back
Demerger of Endeavour Group
Balance at end of period
1 Refer to Note 1.1.1 for further details.
2
Included in prior year profit was the gain on demerger from Endeavour Group of $6,387 million.
2023
$M
RESTATED 1
2022
$M
53,652
(38,630)
15,022
303
(9,126)
(3,350)
2,849
(524)
2,325
(631)
1,694
2023
$M
6,960
1,694
(1,203)
(2)
–
–
7,449
50,999
(37,100)
13,899
7,272
(8,993)
(2,986)
9,192
(512)
8,680
(461)
8,219
2022
$M
1,617
8,219
(1,170)
1
(1,750)
43
6,960
159
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160
Notes to the Consolidated Financial Statements
Group structure 5
5.2
Subsidiaries (continued)
5.2
Subsidiaries (continued)
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Other financial assets
Other current assets
Assets held for sale
Total current assets
Non-current assets
Trade and other receivables
Other financial assets
Lease assets
Property, plant and equipment
Intangible assets
Investments accounted for using the equity method
Deferred tax assets
Other non-current assets
Total non‑current assets
Total assets
Current liabilities
Trade and other payables
Lease liabilities
Borrowings
Current tax payable
Other financial liabilities
Provisions
Other current liabilities
Total current liabilities
Non-current liabilities
Lease liabilities
Borrowings
Other financial liabilities
Provisions
Other non-current liabilities
Total non‑current liabilities
Total liabilities
Net assets
Equity
Contributed equity
Reserves
Retained earnings
Total equity
2023
$M
842
692
3,044
49
192
4,819
180
4,999
1,280
2,901
7,788
7,703
1,854
1,117
1,490
426
24,559
29,558
7,040
1,391
466
195
268
1,419
21
10,800
8,744
3,220
669
837
38
13,508
24,308
5,250
5,406
(7,605)
7,449
5,250
2022
$M
762
552
2,941
101
208
4,564
174
4,738
891
2,626
8,252
7,092
2,024
1,692
1,385
413
24,375
29,113
6,493
1,327
345
(9)
109
1,458
–
9,723
9,259
3,820
690
831
45
14,645
24,368
4,745
5,207
(7,422)
6,960
4,745
5.2.2
Details of wholly owned subsidiaries that are material to the Group
Material subsidiaries of Woolworths Group Limited are as follows:
COMPANY
COUNTRY OF INCORPORATION
ULTIMATE AUSTRALIAN CONTROLLING ENTITY
Woolworths New Zealand Group Limited
Woolworths New Zealand Limited
General Distributors Limited
New Zealand
New Zealand
New Zealand
Woolworths Group Limited
Woolworths Group Limited
Woolworths Group Limited
5.2.3
Details of non-wholly owned subsidiaries that have material non-controlling interests
NAME OF SUBSIDIARY
PFD Food Services Pty Ltd
The Quantium Group Holdings Pty Limited
The movement in non-controlling interests is as follows:
2023
Balance at start of period
Profit for the period
Other comprehensive income
Total comprehensive income for the period
Dividends paid
Recognition of non-controlling interest from
acquisition of subsidiary
Balance at end of period
PROPORTION OF VOTING RIGHTS
HELD BY NON‑CONTROLLING
INTERESTS
PRINCIPAL PLACE OF
BUSINESS
Australia
Australia
2023
%
35.0
22.4
2022
%
35.0
22.4
THE QUANTIUM
GROUP HOLDINGS
PTY LIMITED
$M
PFD FOOD
SERVICES PTY
LTD
$M
INDIVIDUALLY
IMMATERIAL
SUBSIDIARIES
$M
TOTAL NON‑
CONTROLLING
INTERESTS
$M
52
2
1
3
(5)
–
50
49
12
–
12
–
–
61
23
(3)
–
(3)
–
9
29
124
11
1
12
(5)
9
140
2022
Balance at start of period
Profit for the period
Total comprehensive income for the period
Dividends paid
Recognition of non-controlling interest from
acquisition of subsidiary
Purchase of additional shares from
non-controlling interest
Demerger of Endeavour Group
Balance at end of period
ENDEAVOUR
GROUP LIMITED
$M
THE QUANTIUM
GROUP HOLDINGS
PTY LIMITED
$M
PFD FOOD
SERVICES PTY
LTD
$M
INDIVIDUALLY
IMMATERIAL
SUBSIDIARIES
$M
TOTAL NON‑
CONTROLLING
INTERESTS
$M
282
55
–
–
–
–
–
(282)
–
6
6
(5)
–
(4)
–
52
–
4
4
–
45
–
–
49
23
360
–
–
–
–
–
–
23
10
10
(5)
45
(4)
(282)
124
161
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162
Notes to the Consolidated Financial Statements
5.2
Subsidiaries (continued)
5.3
Parent entity information (continued)
Summarised financial information in respect of each of the Group’s subsidiaries that has a material non-controlling interest
Summarised financial information in respect of each of the Group’s subsidiaries that has a material non-controlling interest
were as follows:
were as follows:
PFD FOOD SERVICES
PFD FOOD SERVICES
PTY LTD
PTY LTD
THE QUANTIUM GROUP HOLDINGS
THE QUANTIUM GROUP HOLDINGS
PTY LIMITED
PTY LIMITED
2023
2023
$M
$M
438
438
574
574
425
425
370
370
1
1
2022
2022
$M
$M
394
394
587
587
401
401
431
431
(4)
(4)
2023
2023
$M
$M
142
142
239
239
105
105
94
94
(7)
(7)
2022
2022
$M
$M
125
125
236
236
85
85
104
104
(13)
(13)
Current assets
Current assets
Non-current assets
Non-current assets
Current liabilities
Current liabilities
Non-current liabilities
Non-current liabilities
Net cash inflow/(outflow)
Net cash inflow/(outflow)
5.3
5.3
Parent entity information
Parent entity information
This section presents the stand‑alone financial information of Woolworths
This section presents the stand‑alone financial information of Woolworths
Group Limited.
Group Limited.
Assets
Assets
Current assets
Current assets
Non-current assets
Non-current assets
Total assets
Total assets
Liabilities
Liabilities
Current liabilities
Current liabilities
Non-current liabilities
Non-current liabilities
Total liabilities
Total liabilities
Net assets
Net assets
Equity
Equity
Contributed equity
Contributed equity
Reserves
Reserves
Retained earnings 1
Retained earnings 1
Total equity
Total equity
Profit for the period
Profit for the period
Other comprehensive income for the period
Other comprehensive income for the period
Total comprehensive income for the period
Total comprehensive income for the period
2023
2023
$M
$M
2022
2022
$M
$M
4,411
4,411
29,464
29,464
33,875
33,875
17,043
17,043
13,550
13,550
30,593
30,593
3,282
3,282
5,406
5,406
(7,639)
(7,639)
5,515
5,515
3,282
3,282
2023
2023
$M
$M
1,306
1,306
14
14
1,320
1,320
4,195
4,195
29,256
29,256
33,451
33,451
15,410
15,410
14,885
14,885
30,295
30,295
3,156
3,156
5,207
5,207
(7,465)
(7,465)
5,414
5,414
3,156
3,156
2022
2022
$M
$M
9,064
9,064
94
94
9,158
9,158
1 Retained earnings includes a profit reserve of $7,519 million and a loss reserve of $2,004 million (2022: profit reserve of $7,418 million and
1 Retained earnings includes a profit reserve of $7,519 million and a loss reserve of $2,004 million (2022: profit reserve of $7,418 million and
a loss reserve of $2,004 million).
a loss reserve of $2,004 million).
Group structure 5
NOTE
4.2
2023
$M
5,414
1,306
(1,203)
(2)
–
–
5,515
2022
$M
(774)
9,064
(1,170)
1
(1,750)
43
5,414
RETAINED EARNINGS
Balance at start of period
Profit for the period
Dividends paid
Actuarial gain on defined benefit superannuation plans
Share buy-back
Demerger of Endeavour Group
Balance at end of period
Guarantees
The parent entity has entered into a deed of cross guarantee with the effect that the Company guarantees debts in respect
of certain subsidiaries. Further details on the deed of cross guarantee and the subsidiaries subject to the deed are disclosed
in Note 5.2.1. Other guarantees held by the parent entity are the same as those held by the Group as disclosed in Note 6.1.
Commitments for capital expenditure
Estimated capital expenditure under firm contracts, payable:
Not later than one year
Later than one year, not later than two years
Later than two years, not later than five years
2023
$M
562
153
–
715
2022
$M
672
246
159
1,077
Significant Accounting Policies
Financial information for the Company, Woolworths Group Limited, has been prepared on the same
basis as the Consolidated Financial Statements. The following are accounting policies that are
significant to the Company only as the related transactions are either not material for the Group
or eliminated on consolidation.
Investments in subsidiaries
Investments in subsidiaries are accounted for at cost and are tested for impairment in accordance
with the policy for the impairment of non‑financial assets in Note 3.10. Dividends received from
subsidiaries are recognised in profit or loss when a right to receive the dividend is established.
Investments in associates
Investments in associates are initially recognised at cost, and are accounted for using the equity
method by including the Company’s share of profit or loss and other comprehensive income
or loss of the associate in the carrying amount of the investment until the date on which significant
influence or joint control ceases. Dividends received reduce the carrying amount of the investment
in associate.
Lessor accounting
The Company recognises amounts due from lessees under finance leases as receivables at the
amount of the Company’s net investment in the leases. Finance lease income is allocated
to accounting periods so as to reflect a constant periodic rate of return on the Company’s net
investment outstanding in respect of the leases. The Company recognises lease payments
received under operating leases as rental income on a straight‑line basis over the lease term.
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Notes to the Consolidated Financial Statements
Other 6
5.4
Related parties
This section outlines the Group’s transactions with its related parties, such as its
subsidiaries, Key Management Personnel, and material associates.
5.4.1
Transactions within the Group
During the period, Woolworths Group Limited advanced loans to, received and repaid loans from, and provided treasury,
accounting, legal, taxation, and administrative services to other entities within the Group. Entities within the Group also
exchanged goods and services in sale and purchase transactions. All transactions occurred on the basis of normal
commercial terms and conditions. Balances and transactions between the Company and its subsidiaries, which are related
parties of the Company, have been eliminated on consolidation and are not disclosed in this note.
5.4.2
Directors and Key Management Personnel
All transactions with directors and Key Management Personnel (including their related parties) were conducted at an arm’s
length basis in the ordinary course of business and under usual terms and conditions for customers and employees.
Related parties of Key Management Personnel who are employees received employee benefits on standard terms
and conditions. The total remuneration for Key Management Personnel of the Group is as follows:
Short-term employee benefits
Post employment benefits
Other long-term benefits
Share-based payments
2023
$
2022
$
11,070,890
10,270,422
287,833
135,904
291,505
123,141
8,135,664
7,952,883
19,630,291
18,637,951
5.4.3
Transactions with the Group’s material associate, Endeavour Group Limited
Effective from the separation date of 28 June 2021, long-term strategic Partnership Agreements were established which
document the close and mutually beneficial relationship between both parties and reflects the way in which Endeavour
Group Limited had historically operated as part of the Group. These agreements cover key business areas, including the
provision of goods and services related to supply chain and stores, IT, loyalty and FinTech, digital, media and business
support, and occur on the basis of normal commercial terms and conditions. In addition to the Partnership Agreements,
the Group supplies various goods and services to Endeavour Group Limited, which includes wholesale liquor in Tasmania,
food service products, and advanced analytical services.
In certain circumstances, the Group settles liabilities with third parties on behalf of Endeavour Group Limited and
subsequently recovers these costs directly from Endeavour Group Limited. As a result, these transactions have not been
disclosed as related party transactions. However, balances that remain unsettled with Endeavour Group Limited at the
reporting date, including amounts relating to third-party cost recoveries, are disclosed as related party receivables.
During the period, transactions with the Group’s material associate, Endeavour Group Limited, and the amounts outstanding
as at the reporting date are as follows:
Revenue 1
Other income
Purchase of goods and services
Amounts receivable from Endeavour Group 2
Amounts payable to Endeavour Group 3
2023
$M
520
85
(16)
420
(101)
2022
$M
487
86
(21)
392
(106)
1 Primarily includes revenue from the provision of supply chain services, loyalty and FinTech. Revenue excludes amounts relating to capital assets
2
3
that are purchased from third parties on behalf of Endeavour Group Limited as the costs are subsequently recovered without a margin.
Includes $284 million (2022: $310 million) of lease receivables relating to leases for BWS stores attached to Woolworths stores.
Includes $92 million (2022: $90 million) relating to payables for unsettled electronic funds transfers, credit card and debit card point
of sale transactions.
6 Other
6.1
Contingent liabilities
Contingent liabilities are potential future cash payments where the likelihood
of payment is not considered probable or cannot be measured reliably.
The Group has entered the following guarantees however the probability of having to make a payment under these
guarantees is considered remote:
• Guarantees in the normal course of business relating to conditions set out in development applications and for the
sale of properties; and
• Guarantees against workers’ compensation self-insurance liabilities as required by State WorkCover authorities.
The guarantees are based on independent actuarial advice of the outstanding liability.
No provision has been made in the Consolidated Financial Statements in respect of these contingencies however there
is a provision of $663 million for self-insured risks (2022: $628 million), which includes liabilities relating to workers’
compensation claims, that have been recognised in the Consolidated Statement of Financial Position at the reporting date.
From time to time, entities within the Group are party to various legal actions as well as inquiries from regulators and
government bodies that have arisen in the ordinary course of business. Consideration has been given to such matters
and it has been determined that these matters are not at a stage to support a reasonable evaluation of the likely outcome.
6.2
Share-based payments and share schemes
This section presents the Group’s benefits provided to its employees through
share schemes.
6.2.1
Share-based payments
LONG-TERM INCENTIVE (LTI) PLAN
Equity settled share-based payments form part of the remuneration of eligible employees of the Group. The Group continues
to operate the Woolworths Incentive Share Plan (WISP).
All sub-plans within the LTI plan are subject to performance hurdles being met. The Group’s sub-plans are as follows:
• Performance rights sub-plan – delivers a right to acquire a share at a future date;
• Performance shares sub-plan – delivers a right to acquire a share immediately; and
• Cash award sub-plan – delivers a right to acquire cash at a future date.
No grants have been made under the performance shares or cash award sub-plans.
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Notes to the Consolidated Financial Statements
Other 6
6.2
Share-based payments and share schemes (continued)
6.2
Share-based payments and share schemes (continued)
A summary of the LTI plan performance hurdles for all outstanding grants is as follows:
RECOGNITION SHARE PLAN
GRANT YEAR
F21 3
F224
F23 4
RELATIVE TOTAL SHAREHOLDER RETURN
(TSR) 1
SALES PER
SQUARE METRE
(SQM)/REPUTATION 2
RETURN ON FUNDS
EMPLOYED (ROFE) 2
VESTING
PERIOD
(YEARS)
Three
Three
Three
WEIGHTING
(%)
33.34
40.00
40.00
HURDLE/
RANGE
(PERCENTILE)
50th – 75th
50th – 75th
50th – 75th
WEIGHTING
(%)
WEIGHTING
(%)
33.33
20.00
20.00
33.33
40.00
40.00
1 The Group’s share price reset lower on 24 June 2021 to reflect the demerger of Endeavour Group which was implemented on 1 July 2021.
In these circumstances, an adjustment factor was applied by the ASX to historical share prices to recognise the impact of the demerger
from a share price perspective. Accordingly, the Group has made no change to the TSR performance hurdle of the impacted F21 LTI plan.
2 Hurdle/range not published for sales per SQM, reputation and ROFE as the Group does not provide market guidance on these metrics and
the targets are commercially sensitive. The LTI targets and performance will be published following the end of the performance period.
3 The TSR component vests progressively, where TSR equals or exceeds the 50th percentile of the comparator group up to the full 33.34%
vesting, where TSR equals the 75th percentile of the comparator group. SQM and ROFE components vest progressively, upon attaining
certain hurdles, to a maximum weighting of 33.33%.
4 The TSR component vests progressively where TSR equals or exceeds the 50th percentile of the comparator group up to the full
40% vesting, where TSR equals the 75th percentile of the comparator group. Reputation and ROFE components vest progressively,
upon attaining certain hurdles, to a maximum weighting of 20% and 40% respectively. The reputation non-market based performance
condition is only applicable to the F22 and F23 LTI plans and measures brand reputation across four key metrics.
The variables in the table below are used as inputs into the model to determine the fair value of performance rights.
Grant date 1
Performance period start date
Exercise date
Expected volatility2
Expected dividend yield
Risk-free interest rate
Weighted average fair value at grant date
2023
F23 WISP
2022
F22 WISP
1 Jul 2022
1 Jul 2021
1 Jul 2022
1 Jul 2021
1 Jul 2025
1 Jul 2024
22.0%
4.0%
3.10%
$29.35
17.0%
4.0%
0.20%
$31.70
1 Grant date represents the date on which there is a shared understanding of the terms and conditions of the arrangement.
2 The expected volatility is based on the historical implied volatility calculated based on the weighted average remaining life of the
performance rights adjusted for any expected changes to future volatility due to publicly available information.
DEFERRED SHORT-TERM INCENTIVE (DEFERRED STI)
The performance rights sub-plan has also been used to make offers of Deferred STI which have the following features:
•
•
For the F21, F22 and F23 Deferred STI plan, a one-year performance measure linked to sales, EBIT, working capital,
customer satisfaction, and safety; and
If the performance hurdles are met, participants are required to remain employed for a further two years to gain
access to the performance rights, or otherwise forfeit the performance rights unless the Board exercises its discretion
in accordance with the performance rights sub-plan rules.
SIGN-ON AND RETENTION RIGHTS
The performance rights sub-plan has also been used to compensate new hires for foregone equity, and ensure that key
employees are retained to protect and deliver on the Group’s strategic direction. It has been offered to:
• Executives of newly acquired businesses in order to retain intellectual property during transition periods; or
• Attract new executives.
Sign-on and retention rights generally do not have performance measures attached to them due to the objective of retaining
key talent and vest subject to the executive remaining employed by the Group, generally for two or more years.
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The performance rights sub-plan has also been used to reward employees of the Group. Participants are required to meet
a service condition to gain access to the performance rights.
MOVEMENTS IN OUTSTANDING PERFORMANCE RIGHTS
The following table summarises the movements in outstanding performance rights for all of the above plans:
Outstanding at start of period
Granted during the period
Vested during the period
Lapsed during the period
Outstanding at end of period
Share-based payments expense for the period was $113,425,421 (2022: $139,325,271).
2023
NO. OF RIGHTS
2022
NO. OF RIGHTS
11,925,879 11,873,338
4,634,582
5,125,637
(3,521,977)
(3,707,696)
(1,664,303)
(1,365,400)
11,374,181
11,925,879
Significant Accounting Policies
Share-based payments
Equity‑settled share‑based payments to employees are measured at the fair value of the
equity instruments at grant date. The fair value excludes the effect of non‑market based
vesting conditions.
The fair value of instruments with market‑based performance conditions is calculated at the
grant date using a Monte Carlo simulation model. The probability of achieving market‑based
performance conditions is incorporated into the determination of the fair value per instrument.
The fair value of instruments with non‑market‑based performance conditions, service conditions
and retention rights is calculated using a Black‑Scholes option pricing model.
The fair value determined at grant date is expensed on a straight‑line basis over the vesting period
based on the number of equity instruments that will eventually vest. At each reporting period,
the Group revises its estimate of the number of equity instruments expected to vest based on its
assessment of the non‑market based vesting conditions. Any change in the original estimates
are recognised in Consolidated Statement of Profit or Loss with a corresponding adjustment
to reserves.
6.2.2
Share schemes
The total shares purchased during the year were 3,377,355 (2022: 3,874,029) at an average price per share of $37.73
(2022: $35.28) to satisfy the vesting of share rights and allocation of shares under the Group’s employee share plans.
No additional expense is recognised in relation to the shares purchased under the Employee Share Purchase Plan and
the shares issued under the Non-executive Director Equity Plan as they are acquired out of salary sacrificed remuneration.
EMPLOYEE SHARE PURCHASE PLAN (SPP)
The SPP provides permanent full-time and part-time employees who are Australian tax residents and are aged 18 years
or over with the opportunity to purchase shares from pre-tax income via salary sacrifice. The Group pays the associated
brokerage costs.
NON-EXECUTIVE DIRECTOR EQUITY PLAN
The Non-executive Director Equity Plan allows non-executive directors to acquire share rights through a pre-tax fee
sacrifice plan.
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Notes to the Consolidated Financial Statements
Other 6
6.3
Retirement plans
6.3
Retirement plans (continued)
This section presents the Group’s benefits provided to its employees,
including superannuation and defined benefit plans.
(ii)
Movements in the present value of the defined benefit obligation and fair value of plan assets
The amount included in other non-current liabilities in the Consolidated Statement of Financial Position in respect of the net
defined benefit liability is as follows:
6.3.1
Defined contribution plans
The majority of employees in Australia and New Zealand are part of a defined contribution superannuation scheme and
receive fixed contributions from the Group in accordance with the rules of the WGSP and/or any statutory obligations.
The amount recognised as an expense for defined contribution plans is $744 million (2022: $681 million).
6.3.2
Defined benefit plans
The Company sponsors a defined benefit plan, the Woolworths Group Superannuation Plan (WGSP or the Plan), that provides
superannuation benefits for employees upon retirement. The WGSP consists of members with defined benefit entitlements
and defined contribution benefits. The defined benefit plan is closed to new members. The assets of the WGSP are held
in a sub-plan within AMP SignatureSuper that is legally separated from the Group. The WGSP invests entirely in pooled unit
trust products where prices are quoted on a daily basis.
The Group contributes to the WGSP at rates as set out in the Trust Deed and Rules and the Participation Deed between the
Group and AMP Superannuation Limited. Members contribute to the WGSP at rates dependent upon their membership
category. The plan provides lump sum defined benefits that are defined by salary and period of membership.
An actuarial valuation was carried out at both reporting dates by Willis Towers Watson. The principal actuarial assumptions
used for the purpose of the valuation are as follows:
Discount rate
Expected rate of salary increase
Rate of price inflation
2023
%
5.1
3.5
3.0
2022
%
4.3
3.0
2.6
At the reporting date, the Group’s exposure to reasonably possible changes of the discount rate or expected rate of salary
increase, while holding all other assumptions constant, is not considered material.
The average duration of the defined benefit obligation at the end of the reporting period is 5.4 years (2022: 5.4 years) which
relates wholly to active participants.
(i)
Categories of plan assets
The plan invests entirely in pooled superannuation trust products where prices are quoted daily. The asset allocation of the
plan has been set taking into account the membership profile, the liquidity requirements of the plan, and risk appetite of the
Group. The percentage invested in each asset class is as follows:
Equity instruments
Debt instruments
Real estate
Cash and cash equivalents
Other
Total
2023
%
55
17
14
6
8
2022
%
59
16
12
3
10
100
100
Balance at start of period
Recognised in Consolidated
Statement of Profit or Loss:
Current service cost
Finance income/(costs)
Contributions by plan participants
Total amount included in branch
expenses
Recognised in the Consolidated
Statement of Other
Comprehensive Income:
Return/(loss) on plan assets
Actuarial gain/(loss)
Total amount recognised in other
comprehensive income, before tax
Other movements:
Benefits paid
Contributions by employer
Administration costs and taxes
Balance at end of period
FAIR VALUE OF PLAN ASSETS
PRESENT VALUE OF DEFINED
BENEFIT OBLIGATION
NET DEFINED BENEFIT OBLIGATION
2023
$M
250
2022
$M
289
2023
$M
(288)
2022
$M
(335)
2023
$M
(38)
2022
$M
(46)
–
10
2
12
6
–
6
(44)
15
(3)
236
–
7
2
9
(21)
–
(21)
(37)
13
(3)
250
(3)
(12)
(2)
(17)
–
(9)
(9)
44
–
3
(267)
(5)
(8)
(2)
(15)
–
22
22
37
–
3
(288)
(3)
(2)
–
(5)
6
(9)
(3)
–
15
–
(31)
(5)
(1)
–
(6)
(21)
22
1
–
13
–
(38)
Significant Accounting Policies
Defined contribution plans
Payments to defined contribution plans are recognised as an expense when employees have
rendered service entitling them to the contributions.
Defined benefit plans
The net defined benefit asset or liability recognised in the Consolidated Statement of Financial
Position represents the surplus or deficit in the Group’s defined benefit plans which is calculated
by estimating the amount of future benefit that employees have earned in the current and prior
periods, discounting that amount, and deducting the fair value of the plan assets. The calculation
of the defined benefit obligation is performed at the end of each annual reporting period
by a qualified actuary using the projected unit credit method.
Remeasurements of the net defined benefit asset or liability, which comprise actuarial gains and
losses, and the return on plan assets (excluding interest), are recognised in the period in which
they occur, directly in other comprehensive income and will not be reclassified to profit or loss.
The Group determines the net interest income or expense on the net defined benefit asset or liability
for the period by applying the discount rate at the start of the period to the net defined benefit asset
or liability, taking into account any changes during the period as a result of contributions and benefit
payments. Net interest income or expense, service costs and other expenses related to defined
benefit plans are recognised in the Consolidated Statement of Profit or Loss.
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Notes to the Consolidated Financial Statements
Directors' Declaration
6.4
Auditor’s remuneration
This section presents the total remuneration of the Group’s external auditors.
The remuneration of the Group’s external auditors, Deloitte Touche Tohmatsu (Deloitte), is as follows:
Deloitte Touche Tohmatsu and related network firms
Audit or review of the financial reports
Group
Subsidiaries
Total audit or review of the financial reports
Statutory assurance services required by legislation to be provided by the auditor
Other assurance and agreed upon procedures under other legislation or contractual
agreements 1
Other services:
Tax compliance services
Consulting services 2
Other non-assurance services
Total other services
2023
$’000
2022
$’000
2,255
1,652
3,907
–
1,970
1,407
3,377
40
548
382
179
218
5
402
117
811
8
936
4,857
4,735
The directors declare that:
(a) in the directors’ opinion, there are reasonable grounds to believe that the Company will be able to pay its debts
as and when they become due and payable;
(b) in the directors’ opinion, the attached Consolidated Financial Statements are in compliance with International Financial
Reporting Standards, as stated in Note 1.1.1 to the Consolidated Financial Statements;
(c) in the directors’ opinion, the attached Consolidated Financial Statements and notes thereto are in accordance with the
Corporations Act 2001, including compliance with accounting standards and giving a true and fair view of the financial
position and performance of the Group; and
(d) the directors have been given the declarations required by s.295A of the Corporations Act 2001.
At the date of this declaration, the Company is within the class of companies affected by ASIC Corporations (Wholly-owned
Companies) Instrument 2016/785. The nature of the deed of cross guarantee is such that each company which is party to the
deed guarantees to each creditor payment in full of any debt in accordance with the deed of cross guarantee.
In the directors’ opinion, there are reasonable grounds to believe that the Company and the companies to which the
Instrument applies, as detailed in Note 5.2 to the Consolidated Financial Statements will, as a group, be able to meet
any obligations or liabilities to which they are, or may become, subject by virtue of the deed of cross guarantee.
Signed in accordance with a resolution of the directors made pursuant to s.295(5) of the Corporations Act 2001.
On behalf of the directors.
1 During the period, other assurance and agreed upon procedures mainly includes $266,000 relating to the review of the Sustainability
Report and $145,000 relating to review of turnover certificates (2022: $157,000 relating to the review of the Sustainability Report).
2 During the period, consulting services relates to cyber security services (2022: enterprise monitoring services of $587,000).
Scott Perkins
Chair
23 August 2023
Brad Banducci
Managing Director and Chief Executive Officer
6.5
Subsequent events
This section outlines events which have occurred between the reporting date
and the date the Financial Report is authorised for issue.
As at the date of this report, there are no other matters or circumstances occurring subsequent to the end of the reporting
period which would have a material impact on the 2023 Financial Report.
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Independent Auditor’s Report
Independent Auditor's Report
Deloitte Touche Tohmatsu
ABN 74 490 121 060
Quay Quarter Tower
50 Bridge Street
Sydney NSW 2000
Australia
Tel: (02) 9322 7000
www.deloitte.com.au
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the
financial report for the current period. These matters were addressed in the context of our audit of the financial report
as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Key Audit Matter
How the scope of our audit responded
to the Key Audit Matter
Technology environment
The Group’s technology environment is vital to the
operations of the business and to the integrity of the
Group’s financial reporting process. The technology
environment is complex, with a significant degree
of automation and varying levels of integration.
Our assessment of the technology environment forms
a key component of our external audit and is therefore
considered a key audit matter.
In conjunction with our IT specialists, our procedures
included:
• Obtaining an understanding of the technology
environment, the information systems and business
processes relevant to financial reporting and the
associated IT application controls and IT dependencies
in manual controls.
• Evaluating the design and testing the implementation
of relevant controls within the technology environment
relevant to financial reporting systems and processes
of the Group.
• Assessing changes to the technology environment
through the testing of remediated controls,
concluding on the sufficiency and appropriateness
of management’s changes.
Responding to deficiencies identified by designing and
performing additional procedures which include the
identification and testing of compensating controls and
varying the nature, timing and extent of our substantive
procedures performed.
Woolworths New Zealand: Recoverability of the cash
generating unit
As set out in Note 3.10, an annual impairment test was
conducted on the Woolworths New Zealand cash
generating unit (CGU) to assess the recoverability of its
carrying value.
The recoverable amount of the Woolworths New Zealand
CGU has been determined by management using the
‘value in use’ approach, which incorporates significant
judgement related to the estimation of future cash flows,
short term growth rates, long term growth rates and
an appropriate discount rate.
Accordingly this is considered to be a key audit matter.
Our audit procedures included:
• Agreeing forecast cash flows to the latest Board
approved budget and assessing the historical accuracy
of budgeting for the Woolworths New Zealand CGU.
•
In conjunction with our valuation specialists, assessing
the methodology used to estimate recoverable amount
for Woolworths New Zealand and the reasonableness
of key assumptions, including the discount rate and
growth rates.
• Performing independent sensitivity analysis to challenge
key assumptions.
• Evaluating the adequacy of the related disclosures
included within the financial statements in Note 3.10.
Independent Auditor’s Report to the Members of Woolworths Group Limited
REPORT ON THE AUDIT OF THE FINANCIAL REPORT
Opinion
We have audited the financial report of Woolworths Group Limited (the “Company”) and its subsidiaries (the “Group”)
which comprises the consolidated statement of financial position as at 25 June 2023, the consolidated statement of profit
or loss, the consolidated statement of other comprehensive income, the consolidated statement of changes in equity and
consolidated statement of cash flows for the 52-week period then ended, and notes to the financial statements, including
a summary of significant accounting policies, and the Directors’ Declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including:
• giving a true and fair view of the Group’s financial position as at 25 June 2023 and of its financial performance for the
52-week period then ended; and
•
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 confirm that the independence declaration required by the Corporations Act 2001, which has been given to the directors
of the Company, would be in the same terms if given to the directors as at the time of this auditor’s report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Liability limited by a scheme approved under Professional Standards Legislation.
Member of Deloitte Asia Pacific Limited and the Deloitte organisation.
173
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174
Independent Auditor's Report
Independent Auditor's Report
Auditor’s Responsibilities for the Audit of the Financial Report (continued)
From the matters communicated with the directors, we determine those matters that were of most significance in the
audit of the financial report of the current period and are therefore the key audit matters. We describe these matters
in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely
rare circumstances, we determine that a matter should not be communicated in our report because the adverse
consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 76 to 99 of the Directors’ Report for the 52-week period
ended 25 June 2023.
In our opinion, the Remuneration Report of Woolworths Group Limited, for the 52-week period ended 25 June 2023,
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.
DELOITTE TOUCHE TOHMATSU
Tom Imbesi
Partner
Chartered Accountants
Sydney, 23 August 2023
Travis Simkin
Partner
Chartered Accountants
Sydney, 23 August 2023
Other Information
The directors are responsible for the other information. The other information comprises the information included in the
Group’s annual report for the 52-week period ended 25 June 2023, 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 we do not express any form of assurance
conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit,
or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material
misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a true and fair view
in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the
directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free
from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue as a going
concern, disclosing, as applicable, matters related 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 has 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 judgement 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’s 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.
175
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Shareholder information (as at 1 August 2023)
Shareholder information (as at 1 August 2023)
The shareholder information set out below was applicable as at 1 August 2023.
Distribution of shares
Analysis of numbers of shareholders by size of holding:
RANGE OF SHARES
1–1,000
1,001–5,000
5,001–10,000
10,001–100,000
100,001 and over
Total
NUMBER OF
SHAREHOLDERS
PERCENTAGE OF
ISSUED CAPITAL
%
248,845
102,157
9,915
4,375
92
365,384
6.75
18.01
5.67
6.94
62.63
100.00
All shares above are fully paid ordinary shares. Each fully paid ordinary share carries one voting right.
There were 7,841 holders of less than a marketable parcel of shares based on the closing market price on 1 August 2023
of $39.09.
Top 20 largest shareholders
NAME
HSBC Custody Nominees (Australia) Limited
JP Morgan Nominees Australia Pty Limited
Citicorp Nominees Pty Limited
BNP Paribas Nominees Pty Ltd
National Nominees Limited
Pacific Custodians Pty Limited
Netwealth Investments Limited
Australian Foundation Investment Company Limited
Woolworths Custodian Pty Ltd
Custodial Services Limited
Argo Investments Limited
IOOF Investment Services Limited
Washington H Soul Pattinson & Company Limited
Mutual Trust Pty Ltd
BNP Paribas NOMS (NZ) Ltd
Neweconomy.com.au Nominees Pty Ltd
Navigator Australia Ltd
The Senior Master of the Supreme Court
BKI Investment Company Limited Ltd
Nulis Nominees (Australia) Limited
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
NUMBER OF SHARES
PERCENTAGE OF
ISSUED CAPITAL
297,019,686
206,138,629
102,634,544
67,392,717
29,823,573
9,952,334
6,682,670
6,667,000
4,233,917
3,984,037
3,479,526
2,483,487
2,113,271
1,754,724
1,488,142
1,399,092
1,355,439
1,170,020
1,159,906
991,055
24.37
16.91
8.42
5.53
2.45
0.82
0.55
0.55
0.35
0.33
0.29
0.20
0.17
0.14
0.12
0.11
0.11
0.10
0.10
0.08
Substantial shareholders
As at 1 August 2023, Woolworths Group Limited had been notified of the following substantial shareholdings:
HOLDER
BlackRock Group
State Street Corporation
Australian Super Pty Ltd
NOTICE
HELD AT DATE OF NOTICE
%
80,972,196
61,386,532
60,880,107
6.43
5.06
5.00
DATE OF NOTICE
29/05/2019
08/11/2021
30/03/2023
Shares held at date of percentage of shares
Unquoted equity securities
As at 1 August 2023, there were 10,889,922 rights over unissued ordinary shares.
Dividend
The final dividend of 58 cents per share is expected to be paid on or around 27 September 2023 to eligible shareholders.
No discount will apply to the dividend reinvestment plan for the 2023 final dividend. There is currently no limit on the number
of shares that can participate in the dividend reinvestment plan. The Company intends to issue new shares to satisfy its
obligations under the dividend reinvestment plan.
Stock exchange listings
Woolworths Group Limited ordinary shares are listed on the Australian Securities Exchange (ASX) under code: WOW.
Woolworths Group Limited shares may be traded in sponsored American Depository Receipts form in the United States.
Corporate Governance Statement
The Corporate Governance Statement is located on our website. Visit www.woolworthsgroup.com.au
Shareholder calendar 1
2023
2024
SEPTEMBER
1
Record date for final dividend
FEBRUARY
21 Announcement of 2024 half-year
SEPTEMBER 27
Payment date for final dividend
OCTOBER
25 Announcement of first quarter
sales results
OCTOBER
26 Annual General Meeting
1 Dates are subject to change.
financial results
FEBRUARY
29
Record date for interim dividend
APRIL
MAY
11
Payment date for interim dividend
2 Announcement of third quarter
sales results
AUGUST
28 Announcement of 2024 full-year
financial results
177
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Subleases
Glossary
The key terms and conditions of the subleases between Woolworths Group Limited and Endeavour Group Limited
are as follows:
GLOSSARY
TERM
DESCRIPTION
Head lease
The subleases contain an obligation on Endeavour to perform and observe Woolworths’
obligations as tenant under the head lease that relate to the liquor premises. There is an
obligation on Woolworths to observe and perform its obligations under the head lease.
Commencement
date and term
The term and further terms of each sublease align with the term and further terms under
the relevant head lease, minus one day.
Option terms
Where Woolworths exercises its option to renew the head lease, it must offer a further term
to Endeavour. However, in circumstances where head leases include an obligation to trade
as a liquor store, Endeavour is obliged to exercise its option if Woolworths does.
Occupancy costs
The rent and outgoings payable are calculated according to the proportion of the area of the
liquor premises against the area of the whole premises. All occupancy costs must be paid
by Endeavour to Woolworths, with any adjustments to outgoings to be made at the end of the
financial year.
Amenity
Dealings
Endeavour must not do anything that would detract from the amenity of the supermarket
premises or interfere with Woolworths’ business.
Endeavour must not assign, sublet or license without Woolworths’ consent. Consent may
be granted or withheld at Woolworths’ absolute discretion. A change in control of Endeavour
is a breach of the sublease.
Make good
obligations
Endeavour is required to leave the liquor premises in good and tenantable repair and condition.
Endeavour must comply with the make good requirements under the head lease.
Active eCom customer
Customers that have made a purchase online in the last four weeks
AGW
B2B
B2C
Australian Grocery Wholesalers Pty Limited
Business to business
Business to customer
Cash realisation ratio
(CRR)
Operating cash flow as a percentage of Group net profit after tax before depreciation
and amortisation
Comparable sales
Measure of sales excluding stores that have been opened or closed in the last 12 months
and existing stores where there has been a demonstrable impact from store disruption
because of store refurbishment or new store openings/closures
Cost of doing business
(CODB)
Customer fulfilment
centre (CFC)
DAP
Expenses relating to the operation of the business
Dedicated online distribution centre
Directly-attributable profit only includes costs directly attributable to the B2C eCommerce
business, such as picking, packing and delivery costs; CFC and variable DC costs; marketing
costs; eCommerce support costs; and CFC and eCommerce-specific asset depreciation
Delivery Unlimited
Subscription service that gives customers access to free delivery on any Next and Same Day
Delivery windows, or reduced fees for quicker delivery options (Delivery Now), free shipping
at Everyday Market and 2x Everyday Rewards points on all online orders
DC
Distribution centre
Direct to boot
Where a customer places an order online and drives to a dedicated area where a team
member places the order directly in the customer’s boot
eStore
Dedicated store for the fulfilment of online orders sometimes incorporating automation
Everyday Market
4‑yr CAGR
An integrated online marketplace that allows customers to shop products from other
Woolworths Group brands and partners alongside their groceries
Four-year compound annual growth rate. F23 results have been compared to normalised F19
results which have removed the impact of the 53rd week and if AASB 16 had been in place in F19
FSC
Forest Stewardship Council
Funds employed
Net assets employed, excluding net tax balances
GMV
HSR
MSRDC
Gross merchandise value
Health star rating
Melbourne South Regional Distribution Centre
Net assets employed
Net assets, excluding net debt and put option liabilities over non-controlling interests
Net cash flow
Cash flow generated by the Woolworths Group after equity related financing activities
including dividends, repayment of lease liabilities and proceeds from related party
Net Promoter Score
(NPS)
A loyalty measure based on a single question where a customer rates a business on a scale of
zero to 10. The score is the net result of the percentage of customers providing a score of nine
or 10 (promoters) less the percentage of customers providing a score of zero to six (detractors)
n.m
PC3
Pick up
PPE
Not meaningful
Primary Connect third-party logistics
A service which enables collection of online shopping orders in store or at selected locations
Personal protective equipment
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Glossary
GLOSSARY
Renewal
A total store transformation focused on the overall store environment, team, range and
process efficiency (including digital)
Return on Funds Employed
(ROFE)
Calculated as EBIT before significant items for the previous 12 months as a percentage
of average (opening, mid and closing) funds employed, including significant items provisions
RT3
A new team rostering and store standards solution in Woolworths Supermarkets
(Right team, right task, right time)
Sales per square metre
Total sales for the previous 12 months by business divided by average trading area of stores
and fulfilment centres
SIW
Statewide Independent Wholesalers Pty Limited
Total net debt
Borrowings less cash balances, including debt hedging derivatives and lease liabilities
TCFD
Task Force on Climate-Related Financial Disclosures
Total net debt
Borrowings less cash balances, including debt hedging derivatives and lease liabilities
TRIFR
Total recordable injury frequency rate
Two‑year/three‑year
average comparable
sales growth
Voice of Customer (VOC)
Simple average of the current period and prior period comparable sales growth
Externally facilitated survey of a sample of Woolworths Group customers where customers
rate Woolworths Group businesses on several criteria. Expressed as a percentage
of customers providing a rating of six or seven on a seven-point scale
VOC NPS
VOC NPS is based on feedback from Everyday Rewards members. VOC NPS is the number
of promoters (score of nine or 10) less the number of detractors (score of six or below)
Voice of Supplier (VOS)
A survey of a broad spectrum of suppliers facilitated by an external provider. The survey
is used to provide an ongoing measure of the effectiveness of business relationships
with the supplier community. VOS is the average of the suppliers’ rating across various
attributes, scored as a percentage of suppliers that provided a rating of six or seven
on a seven-point scale
Other non-IFRS measures used in describing the business performance include:
• Earnings before interest, tax, depreciation and
• Cash flow from operating activities before interest
amortisation (EBITDA)
and tax
• Volume productivity metrics including transaction
growth, items per basket and item growth
•
Free cash flow after equity related financing activities
excluding dividends
• Trading area
• Significant items
•
Fixed assets and investments
• Net investment in inventory
• Net tax balances
• Closing trade payable days
• Change in average prices
• Margins including gross profit, CODB and EBIT
• Net assets held for sale
• Closing inventory days
• Average inventory days
181
Company directory
Registered office
1 Woolworths Way
Bella Vista NSW 2153
Tel: (02) 8885 0000
Web: www.woolworthsgroup.com.au
Company Secretaries
Kate Eastoe
Michelle Hall
Investor relations
Paul van Meurs
Auditor
Deloitte Touche Tohmatsu
Quay Quarter Tower
50 Bridge Street, Sydney NSW 2000
Tel: (02) 9322 7000
Web: www.deloitte.com.au
Shareholder enquiries
Link Market Services
Locked Bag A14, Sydney South NSW 1235
Web: www.linkmarketservices.com.au
For shareholders:
Tel: 1300 368 664
Email: woolworths@linkmarketservices.com.au
For team members:
Tel: 1800 111 281
Email: wow.eps@linkmarketservices.com.au
Media
Tel: (02) 8885 1033
Email: media@woolworths.com.au
Five Year Summary
The Five Year Summary is available
on the Woolworths Group website.
Design Communication and Production by ARMSTRONG
Armstrong.Studio