WOW - Woolworths Group

Retirement of Michael Ullmer AO, and appointment of Philip Chronican
Woolworths Group today announces that Michael Ullmer AO will retire at the conclusion of the 2021 Annual General Meeting (AGM) after more than nine years of distinguished service as a non-executive director. Woolworths Group Chairman, Gordon Cairns, said: “I’d like to thank Michael Ullmer for his invaluable contribution during a period of significant transformation and growth for Woolworths Group. Michael has been a source of wisdom and sage advice for the Board, the executive team and for me personally.” Michael Ullmer is currently a member of Woolworths Group’s Audit & Finance Committee, the Risk Committee, the People Committee and the Nomination Committee. As part of the Board renewal program, the Board undertook a process to identify a suitable candidate to succeed Michael Ullmer, and today announced that Philip Chronican will join the Board as a non-executive director effective 1 October 2021, subject to completion of relevant licensing approvals. Philip Chronican is currently Chair, National Australia Bank, Chair, Westmead Institute for Medical Research, and Non-executive Director, National Foundation for Australia-China Relations. His former directorships include Bank of New Zealand, NSW Treasury Corporation and the Juvenile Diabetes Research Foundation. Philip Chronican has more than 38 years of experience in banking and finance across Australia and New Zealand, having led significant businesses at Westpac and ANZ Bank. He was the Group Chief Financial Officer of Westpac and its Institutional business consecutively. At ANZ he was CEO Australia responsible for the bank’s retail and commercial businesses from 2009 to 2015. He has broad experience in mergers & acquisitions and post-merger integration, and has taken an active role in advocating for greater transparency and ethics in banking, and promoting workforce diversity. Woolworths Group Chairman, Gordon Cairns, said: “I am delighted that the Board was able to find an experienced and outstanding candidate in Philip, following the conclusion of a thorough and externally-supported search process.” Philip Chronican will stand for election at the 2021 AGM.

DYOR

i hold WOW ( and have sold down 90% of the inherited holding in the last 10 years )

hoping to buy their way out of trouble perhaps ( more acquisitions ?? )

am not sure what another banker can do to turn around WOW now it has finally shed the drinks division ( EDV )

I love these off-market buy backs. Fully franked dividend of $30.15, with a capital loss to allocate against other capital gains

KH

Woolworths Group H1 F22 trading update
Summary
● Australian Food sales and customer NPS remain strong relative to the overall market
● Direct and indirect COVID costs have impacted H1 F22 EBIT, with Australian Food
EBIT expected to be $1,190 million to $1,220 million
● Positive sales momentum going into Christmas with improved Group financial
performance expected in H2
Overview
Woolworths Group today provides an update on its financial year 2022 first half trading
performance.
Woolworths Group CEO, Brad Banducci, said: “The first half of F22 has been one of the
most challenging halves we have experienced in recent memory due to the far-reaching
impacts of the COVID Delta strain and its impact on our end-to-end stock flow and operating
rhythm. We have continued to put the health, safety and wellbeing of our customers and
team first in the context of this challenging and volatile operating environment.
“Sales growth in Australian Food is positive on a one-year basis and strong on a two-year
basis but moderated in Q2 following the easing of restrictions in NSW and Victoria. We are
pleased with our sales growth compared to the overall market and our customer NPS scores
have remained strong. As we head into the key Christmas trading period we have a good
in-stock position and positive trading momentum, and our team is working hard to ensure
that our customers have access to all they need to make this a special Christmas.
“However, the ongoing material costs of operating in a COVID environment has impacted
our expected earnings in H1. COVID has had a significant impact on costs, even more so
than last year due to the combination of both direct COVID-related costs, together with the
indirect impacts from disruption caused by COVID. This includes the significant disruptions
we have seen across the end-to-end supply chain, and the material inefficiency this causes
in our stores, distribution centres and transportation.
“In addition, to recognise the significant efforts of all the Group’s front line teams across
Australia and New Zealand, our H1 results will also include a special Group Team
Christmas Thank You bonus payment of $35 million to $40 million as previously disclosed.
“Despite the various disruptions, we have made good progress activating our strategy and
have continued to selectively invest in building out our customer proposition and broader
retail ecosystem. As customer behaviours begin to normalise and COVID-related supply
volatility reduces, we expect an improvement in our underlying operating performance and
Woolworths Group Limited ABN 88 000 014 675
1 Woolworths Way, Bella Vista NSW 2153
we will provide a more detailed update on the outlook for the remainder of F22 at our H1
results in late February.”
Australian Food
Following the easing of lockdowns in NSW and Victoria during October, sales in Australian
Food have moderated as customers return to more normal shopping habits. Sales have also
been impacted by inclement weather, primarily in NSW, which has reduced outdoor
entertaining occasions, as well as a material ongoing decline in tobacco sales. Total sales in
Q2 to date increased by 2.0% compared to the same period in the prior year (Q1’22: 3.9%),
1
while sales on a two-year average basis have increased by 5.2% (Q1’22: 8.7%). Total sales
in H1 to date have increased by 3.0% (two-year CAGR: 6.9%).
For H1, direct COVID costs in Australian Food are expected to be approximately
$150 million (0.6% of sales), with the costs split between supply chain (including customer
2
fulfilment centres), and stores, to ensure the safety of customers and team.
In addition, the indirect disruption to stores and distribution centres from operating in a
COVID environment has led to elevated operating costs of approximately $60 million to
$70 million in the half. This includes the deferral of a number of planned performance
improvement initiatives that have been delayed to allow teams to focus on serving
customers in the lead up to Christmas. Supply chain costs were also impacted by higher
volumes, fuel price increases and the impact of balancing supply across distribution centres
on the Eastern Seaboard.
Both direct and indirect COVID costs are expected to reduce significantly in H2, subject to
no further widespread COVID disruptions; with direct COVID costs reducing in line with
reduced COVID safety settings, and efficiency levels expected to improve over Q3 as the
business returns to a more sustainable, predictable and productive operating rhythm.
eCommerce sales have continued to grow strongly, increasing by approximately 50%
(two-year CAGR: over 60%) in the half. In H1 to date, eCommerce has comprised over
100% of Woolworths Supermarkets sales growth with eCommerce sales penetration of
11.0%. While the profitability of eCommerce continues to improve, eCommerce sales are
lower margin, which together with a decline in store-originated sales has also impacted
overall profitability in the half.
Approximately $40 million has also been invested in continuing to build eCommerce
capabilities, leveraging advanced analytics, and growing digital demand generation.
Initiatives include improvements to the Delivery Unlimited subscription proposition, standing
2 Excludes Group Team Christmas Thank You bonus which will be recorded at a Group level
1 10 weeks to Sunday 12 December
Woolworths Group Limited ABN 88 000 014 675
1 Woolworths Way, Bella Vista NSW 2153
up Q-Retail, the launch of HealthyLife and Everyday Market, and investments in digital and
data talent more broadly.
For H1 F22, Australian Food’s EBIT is currently expected to be $1,190 million to
$1,220 million (H1 F21: $1,312 million) .
3
Other businesses
BIG W’s sales momentum in Q2 has improved on Q1, as stores in NSW and Victoria
reopened to customers during October. Sales in Q2 to date have decreased by 3.3% (Q1’22:
-17.5%) but increased over two years at a CAGR of 8.2%. Despite the improvement in Q2,
given the impact of closures for much of the first four months of the half, BIG W’s EBIT for
H1 F22 is expected to be $20 million to $30 million (H1 F21: $133 million).
New Zealand Food’s sales growth has been strong in H1, benefitting from extended
lockdowns and higher inflation in the country.
All figures are subject to half-year finalisation and review.
Woolworths Group will host a conference call to discuss the trading update at 10.15 am
AEDT and will be webcast live at www.woolworthsgroup.com.au.


DYOR

i hold WOW ( but have sold down 90% of the inherited holding over the last few years )

I'm liking WOW at the moment. I have been shopping at Coles for a long time, even though it was 300m further up the road, because their fruit, veg and meat sections seem to be fresher and higher quality but recently they'd dropped off. I tried Woolies a few days ago to see if things had changed there and wow! so much better. The suppliers they now have on board are providing outstanding strawberries and rasberries. Even the oysters are good.

Hasn't helped the sp tank 8%, so far.

Sean K said:

I'm liking WOW at the moment. I have been shopping at Coles for a long time, even though it was 300m further up the road, because their fruit, veg and meat sections seem to be fresher and higher quality but recently they'd dropped off. I tried Woolies a few days ago to see if things had changed there and wow! so much better. The suppliers they now have on board are providing outstanding strawberries and rasberries. Even the oysters are good.

Hasn't helped the sp tank 8%, so far.

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Hello @Sean K

I've been shopping at WOW for a long time now, solely because of the fresh F & V. The COL store near me sells F & V that appear to have much less fridge life, so WOW has been the choice.

I bought some WOW this morning .... no reason other than the computer told me to. Don't hold COL.

KH

KevinBB said:

Hello @Sean K

I've been shopping at WOW for a long time now, solely because of the fresh F & V. The COL store near me sells F & V that appear to have much less fridge life, so WOW has been the choice.

I bought some WOW this morning .... no reason other than the computer told me to. Don't hold COL.

KH

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I've got it on my longer term buy and hold stock watch list, waiting for an opportunity... Done.

having worked for WOW circa 1972 ( ish ) when they were a clear second to the Cole-Myer empire , i am unimpressed on what they have achieved despite the Coles-Myer stumble and several other market changes

probably my first major wake-up call when when i was given a Dick Smith Electronics gift voucher and realized the Woolworths chain was NOT putting simple products across all outlets , sure 'exclusive brands ' has it's charms , but say i had an electronics project in progress but have to go between D.S.E. and Big W. and a real hardware when i could have just gone to Jaycar , and be back home getting on with it but maybe a few cents poorer

then we get to the hardware fiasco ( but heck i bet MTS are still smiling )

then 'the Woke madness ' demerging the alcohol/gambling ( profit-making ) arm but at least EDV was a one for one split ( i was half expecting a similar deal to the SCP demerger )

but i guess time will tell

currently i hold more COL ( 10% more , all courtesy of the WES demerger ) than WOW slightly less EDV ( than WOW due to the WOW DRP ) and about two and a half times more WES than COL ( because i bought extra WES during the dip when they offloaded COL )

sadly i dumped MTS in 2015 ( i don't always make the right decision )

PS i also hold SCP , BWP and HPI ( and am happy with those )

Woolworths has one of its worst half-years​

DYOR

early in my investing adventure , i tried to create a 'core holding strategy ' ( too important to fail )

those three stocks selected were AMP ( exited in 2018 @ $3.25 , but did do a bigger sell down in 2015 @ $5.65 ) ORG ( exited in December @ $9.45 ) and WOW ( since REDUCED by 90% and removed from the list )

today the sole stock on that list is the ever-shrinking BHP ( nicely up but still shrinking hand over fist )

( sigh ) it sounded like a good strategy at the time

DYOR

Yes @divs4ever , I had a similar strategy I had heavy weighting to the banks, Wes and Wow, I sold Wow a while back and replaced them with AFI and will be lightening up on the banks when opportunity presents.
I will be moving the core from the above mentioned stocks, to etf's and LIC's, and stocks that are bought with a view to selling.
Times change, I have to move with them.lol

i have done very well in places i DIDN'T expect to but it seems buy and hold with 'blue chips ' is very much a hit or miss affair

of the ASX top 20 stocks ( XTL ) MQG has been the BIG winner for me , and FMG MIGHT be a good gainer in the future along with WES ( depending on what they decide with Office-Works )

in the event of a LARGE meltdown , i had planned to buy VLC or ILC , but am not sure now that cherry-picking distressed stocks won't suit me better

WPL will soon become a bigger company , but will it become a better performer

the next big shake-up could leave reputations scattered all over the place

but yes i have found innate nervousness and flexibility solid allies ( so far ) in this investment adventure

( but watch EDV , it used to be the profit-generating part of the WOW empire , maybe it still has some twinkle left )

divs4ever said:

WPL will soon become a bigger company , but will it become a better performer

Click to expand...

I've never owned WPL, but I'm interested now it is looking to expand into H2, mainly because I think the push to H2 is going to far outstrip the ability to produce it cleanly especially in the initial stages.
Time is of the essence and 2050 isn't a long way off, so I'm guessing countries will be wanting to burn it, sooner than anyone has enough installed capacity to make it cleanly, which will give rise to demand for blue H2. Just a guess and we are definitely moving away from a supermarket thread topic. ?
As with all these comments, they are just personal thoughts and not advice, if you want reliable advice, buy a dart board.

I notice MMM Marley Spoon also taking a dive around the same as wow.

I am unable to insert the link to my twitter. You can find the twit then clicking the images to see the details of the charts.

sptrawler said:

I've never owned WPL, but I'm interested now it is looking to expand into H2, mainly because I think the push to H2 is going to far outstrip the ability to produce it cleanly especially in the initial stages.
Time is of the essence and 2050 isn't a long way off, so I'm guessing countries will be wanting to burn it, sooner than anyone has enough installed capacity to make it cleanly, which will give rise to demand for blue H2. Just a guess and we are definitely moving away from a supermarket thread topic. ?
As with all these comments, they are just personal thoughts and not advice, if you want reliable advice, buy a dart board.

Click to expand...

WPL will get a big chunk of BHP assets so while in time ( not that long ) it will be a bigger company , but will it be a better one

if i were running WPL ( but i don't ) i would be having detailed looks at the CVs of the BHP staff liable to be joining the enlarged WPL , yeah sure i expect some office staff to go and some BHP staff might decide to retire or move on , WPL has a good chance to improve staff quality ... but will they take that opportunity

now back to WOW it is my opinion ( and i haven't worked for them since 1975 ) they are a corporate vampire , and suck the essence out of their 'partners ' .. Gage Road Breweries comes to mind , but what of Marley Spoon and Ecargo ?

now spinning out EDV might be a winner for me , i haven't bought extra yet ( but got some courtesy of the demerger )

it should be interesting to watch the COL v WOW battle in the years to come , but don't neglect MTS ( i do not currently hold MTS )

i will be more focused on COL v. EDV ( although EDV looks overly complicated to me ) i hold them both courtesy of the spin-offs

The 26 per cent cut in the interim dividend to 39¢ a share largely reflects the exclusion of Endeavour’s earnings post-demerger.

• Woolworths increased first half sales 8 per cent to $31.9 billion,
• Earnings from its supermarkets fell 7.6 per cent thanks to COVID-19 costs and stock shortages on shelves due to supply chain disruption.
• Group earnings before interest and tax fell 11 per cent to $1.38 billion.
• Group net profit rose 522 per cent to $7.063 billion in the half year to January 2 after the gain on the demerger of the Endeavour Group pubs and drinks business.
• Normalised net profit after tax from continuing operations fell 6.5 per cent to $795 million.
• Significant items included a $6.387 million gain on the Endeavour demerger and a post-tax charge of $119 million.

divs4ever said:

WPL will get a big chunk of BHP assets so while in time ( not that long ) it will be a bigger company , but will it be a better one

if i were running WPL ( but i don't ) i would be having detailed looks at the CVs of the BHP staff liable to be joining the enlarged WPL , yeah sure i expect some office staff to go and some BHP staff might decide to retire or move on , WPL has a good chance to improve staff quality ... but will they take that opportunity

now back to WOW it is my opinion ( and i haven't worked for them since 1975 ) they are a corporate vampire , and suck the essence out of their 'partners ' .. Gage Road Breweries comes to mind , but what of Marley Spoon and Ecargo ?

now spinning out EDV might be a winner for me , i haven't bought extra yet ( but got some courtesy of the demerger )

it should be interesting to watch the COL v WOW battle in the years to come , but don't neglect MTS ( i do not currently hold MTS )

i will be more focused on COL v. EDV ( although EDV looks overly complicated to me ) i hold them both courtesy of the spin-offs

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Was watching WOW and COL when they went ex dividend yesterday. Watching both today. Noticed the change in depth this morning. Are investors thinking of hiding in another safe haven I wonder. Consumer staples the only sector in the green today

eskys said:

Was watching WOW and COL when they went ex dividend yesterday. Watching both today. Noticed the change in depth this morning. Are investors thinking of hiding in another safe haven I wonder. Consumer staples the only sector in the green today

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Or more accurately, perceived safe haven?

eskys said:

Was watching WOW and COL when they went ex dividend yesterday. Watching both today. Noticed the change in depth this morning. Are investors thinking of hiding in another safe haven I wonder. Consumer staples the only sector in the green today

Click to expand...

that is a tradition over here , especially after the Hayne Royal Commission popped the 'reputation bubble ' of the banks

if the market melts down which businesses would you expect to survive ( rhetorical question )

now we know there is the strategy in place for the big banks to be ' bailed in' ( so you can't automatically think the Federal Government will rush to the rescue ) the recent slew of Australian Power utility company take-overs , hint they are no longer a 'protected species '


so the average long term investor ( that still shuffles around the portfolio ) will be searching for a slightly different list of 'safe-havens this time

Dona Ferentes said:

• Earnings from its supermarkets fell 7.6 per cent thanks to COVID-19 costs and stock shortages on shelves due to supply chain disruption.

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Earnings from this particular Woolies store will fall a bit more than that I suspect.

Country Lad said:

Earnings from this particular Woolies store will fall a bit more than that I suspect.

View attachment 138559

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yes Qld has several well-chosen shopping centre sites ( sarcasm ) ( and they have had decades to figure that out with some of them )

but MAYBE that is the strategy the landlord uses to 'refresh the centres without businesses belly-aching