21 November 2012 The Manager Companies Australian Securities Exchange Limited Company Announcements Office Level 4 20 Bridge Street SYDNEY NSW 2000 Dear Sir/Madam RE: Woolworths Limited – Corporate Responsibility Report 2012 Attached is a copy of the Woolworths Limited Corporate Responsibility Report for 2012. For and on behalf of WOOLWORTHS LIMITED PETER J HORTON Group General Counsel and Company Secretary For personal use only 2012CORPORATE RESPONSIBILITY REPORT For personal use only CONTENTS Key Statistics about our Business 2 CEO’s Statement 4 Future of Retailing 7 Important Issues for our Stakeholders 10 Issues of Public Interest 12 Earning Trust 16 Serving our Community 26 Using Resources Wisely 32 Building the Best Retail Team 42 Our approach to Corporate Responsibility and Sustainability 54 United Nations Global Compact 56 Global Reporting Initiative 57 Independent Assurance Statement 59 Store and Trading Area Analysis 61 Glossary 62 Corporate Directory 64 SCOPE OF REPORT Unless otherwise stated, this report covers all of our operations in Australia and New Zealand for the 2012 fi nancial year (1 July 2011 to 30 June 2012). Data for Croma For personal use only (our electronics joint venture with Tata in India which provides wholesale services to 64 stores) is only included in the Our Business and Building the Best Team (excluding Safety ) sections. Data for global sourcing offi ces in Hong Kong and China is only included in the Building the Best Team section (excluding Safety ). With only 25% ownership and no operational control of Gage Road Brewery , there is no information reported for this business. WOOLWORTHS LIMITED ABN 88 000 014 675 CORPORATE RESPONSIBILITY REPORT 2012 EARNING SERVING TRUST OUR • 67.6% of factories making our own COMMUNITY brand products were audited on Ethical Sourcing criteria • Invested the total equivalent of $36.6 million • Our stores are the most regular places through our community programs of purchase for Australians buying Contributed $2.1 billion in taxes Fairtrade certified products • to Governments 98% of our fresh pork supply comes from • Contributed $108 billion in flow on farms that no longer use gestation stalls • indirect economic contribution to the • Increased sales of free range eggs by 20.9% Australian economy resulting from our retail and construction activities • Introduced 16 new certified sustainable fish products in our own Select brand • Homebrand tissue and toilet paper was certified sustainable by the Forest Stewardship Council USING BUILDING RESOURCES THE BEST WISELY RETAIL TEAM • 16.5% reduction in carbon emissions • We employ more than 195,000 people compared to our original projected across our business growth emissions for 2012 • Recruited over 57,000 new people to • 25.6% reduction in carbon emissions our Australian and overseas businesses per carton delivered in more than 3,000 locations • Prevented 8,390 tonnes of food from going • Made 175 executive appointments, For personal use only to landfill through donations to food relief of which 37.7% were female and 40.0% organisations, and diverting food waste were internal promotions to composting and energy generation • Provided training to more than 1 million • 208 ML of water saved through efficiencies participants including core training and 23.2 ML of rainwater harvested at our programs, training for new employees distribution centres and leadership programs for managers and executives 1 KEY STATISTICS SINCE 1924 WOOLWORTHS HAS GROWN FROM A SINGLE ABOUT OUR BUSINESS STORE IN SYDNEY’S PITT STREET INTO ONE OF THE MOST RECOGNISABLE BRANDS IN AUSTRALIA, WITH STORES IN MOST METROPOLITAN AND REGIONAL AREAS IN AUSTRALIA AND NEW ZEALAND. WOOLWORTHS HAS BEEN LISTED ON THE AUSTRALIAN STOCK EXCHANGE SINCE 1993, UNDER THE CODE WOW. SHAREHOLDERS ESTIMATED EMPLOYEE SHAREHOLDERS TOTAL EMPLOYEES 416,638 45,000 195,206 SALES INCREASED TO EBIT INCREASED TO $ B$ M UP BY 56.7 UP BY 3,377 % % 4.7 S 3.1 S DIRECT ECONOMIC CONTRIBUTION $ B $ B $ M For personal use only 6.6 2.1 36.6 IN WAGES AND BENEFITS IN TAXES TO INVESTMENT IN FOR OUR EMPLOYEES GOVERNMENTS LOCAL COMMUNITIES 2 WOOLWORTHS LIMITED CORPORATE RESPONSIBILITY REPORT 2012 RANKED GLOBAL RANKING OF SUPERMARKET CHAINS WITH STORES IN AUSTRALIA Costco Wholesale Corp (USA) 7 IN GLOBAL RETAILING, Aldi Einkauf GmbH & Co oHG (Germany) 10 BASED ON SALES REVENUE – Woolworths Limited 18 TH Wesfarmers Limited (owns Coles) 21 THE HIGHEST RANKING 18 AUSTRALIAN RETAILER Source: Deloitt e, Global Powers of Retailing 2012. AVERAGE CUSTOMERS SERVED WEEKLY RETAIL STORES NEW ACQUISITIONS During 2012, Woolworths M acquired Tait Timber and 28 3,329 Hardware in Victoria and Mitt agong Timber and Hardware in New South Wales, as part of NET PROFIT AFTER TAX INCREASED TO EARNINGS PER SHARE INCREASED TO its growth into the Home Improvement sector. In November 2011, we completed the acquisition of 12 hotels from the $ M ¢ receivers of the Compass Hotel Group located in Western Australia. UP BY 2,200 UP179 BY As at 24 September % %* 2012, 28 hotels have S S been acquired from the 3.6 3.1 Laundy, Waugh and DeAngelis Hotel Groups with the acquisition INDIRECT ECONOMIC CONTRIBUTION of an additional hotel pending fi nalisation. An additional two sites, which are part of this $ B transaction, remain subject to ACCC approval. For personal use only 729,900 108 FULL-TIME CONTRIBUTION TO • All results (excluding Earnings EQUIVALENT JOBS AUSTRALIAN ECONOMY Per Share) are Total Group before Consumer Electronics Provision. * Continuing Operations Only. 3 MANAGING DIRECTOR AS WE LOOK TO THE FUTURE MULTI-OPTION RETAILING IS A KEY STRATEGIC PRIORITY FOR AND WOOLWORTHS. WE ARE ALREADY For personal use only AUSTRALIA’S AND NEW ZEALAND’S CEO LARGEST ONLINE RETAILER … GRANT O’BRIEN 4 CEO’S STATEMENT Woolworths aims to be Australia’s and New Zealand’s most EARNING TRUST, trusted brand. As we serve more than 28 million people a week, which will be achieved by acting responsibly both in our it is a goal that is central to ensuring our business can evolve stores and beyond through sustainable and ethical sourcing, and grow through this rapidly transforming era in retail. and enabling our customers to make informed choices. In 2012, That is why we are committ ed to stretching ourselves beyond we worked with our suppliers on improving animal welfare the basic expectations in all areas where we operate. practices in farms supplying our fresh pork meat, with 98% of the production no longer using gestation stalls. We have In 2012, Woolworths once again demonstrated its capacity achieved this well ahead of the industry target date of 2017. to evolve the business to meet the challenges of a changing We have increased the sales of free range eggs lines – with two economic and consumer environment. We delivered a profi t of our own brand eggs Select and Macro. within our guidance in a year when our customers benefi tt ed substantially from lower prices across our brands. We have continued our commitment in the responsible service of gaming and alcohol and responsible marketing As we look to the future, multi-option retailing is a key across all facets of our business. strategic priority for Woolworths. We are already Australia’s and New Zealand’s largest online retailer, and it is something SERVING OUR COMMUNITY, that our entire business is actively embracing, providing which we believe is demonstrated through investing to create a opportunity in our core business, providing new growth positive impact for both the community and the business. opportunity and infl uencing the type of retail talent we Woolworths contributed the equivalent of $36.6 million in recruit and foster. We are investing in innovation and working our communities through cash donations, leverage, in-kind towards an ambitious target to reach $1 billion in online sales support and through staff and management time. by the end of 2014. Community programs undertaken by our businesses We will only achieve our aspirations if we maintain and align closely to their strategic priorities. Of particular note continue to build on our reputation as a responsible business. is the investment we are making in Australian farming In particular, we are currently focused on building trust and agriculture through the Fresh Food Future Program with customers, building bett er relationships with suppliers (refer pages 30-31) designed to advance farming innovation, and being the most responsible operator of hotels. productivity and long-term sustainability and support the next generation of farmers and industry leaders. Since 2007, We are proud of our relationship with our suppliers. We are $9 million has been invested in this program and we continue taking a number of measures internally and externally to to invest every year to support the sector. further strengthen this relationship and to address areas of mutual concern. We employ more than 195,000 people and create new jobs with every new store we open. In addition to the $6.6 billion Our performance in 2012 is detailed in this report under the paid in wages and benefi ts and return to our shareholders, following four themes: the fl ow-on eff ect of our business activity contributed an estimated $108.3 billion to the Australian economy and about 229,000 full-time equivalent jobs. AWARD USING RESOURCES WISELY, WOOLWORTHS WAS VOTED THE SUSTAINABLE which involves minimising our carbon footprint to strengthen RETAILER OF THE YEAR BY BRW AMP SHOPPING our ability to supply low price fresh produce to our customers; CENTRES AUSTRALIAN RETAILER OF THE YEAR fi nding cost-eff ective ways to reduce packaging and minimising waste from own brand products; and moving to zero food waste AWARDS 2012. to landfi ll. In 2007, we took the initiative to set our carbon reduction targets. We could see that carbon was going to be priced in the For personal use only future and wanted to be prepared, reduce our business costs, manage our risk and make sure we remained competitive in prices for our customers.