2014 Full-Year Results Supplementary Information 20 August 2014 (To be read in conjunction with the 2014 Full-Year Results Briefing presentation) 2014 Full-Year Results | 1 Presentation outline Item Page Coles 3 Home Improvement & Office Supplies 7 Kmart 13 Target 17 Chemicals, Energy & Fertilisers 22 Resources 28 Industrial & Safety 39 Insurance 42 Balance Sheet & Cash Flow 47 2014 Full-Year Results | 2 Coles 2014 Full-Year Results | 3 Coles network As at 30 June 2014 Selling Area Supermarkets (sqm) 1,692,642 6 7 11 Liquor (sqm) – ex hotels 205,179 157 220 76 762 Supermarkets 85 106 5 120 831 Liquor stores 68 56 34 7 90 Hotels 44 241 270 2 210 642 Convenience 201 194 174 16 15 2014 Full-Year Results | 4 Store network movements Open at Open at 30 June Re- 30 June 2013 Opened Closed branded 2014 Supermarkets Coles 722 19 (9) 13 745 Bi-Lo 34 - (4) (13) 17 Total Supermarkets 756 19 (13) - 762 Liquor 1st Choice 92 8 (2) - 98 Vintage Cellars 79 - (2) - 77 Liquorland 639 33 (16) - 656 Hotels 92 - (2) - 90 Total Liquor 902 41 (22) - 921 Convenience 636 11 (5) - 642 2014 Full-Year Results | 5 Revenue reconciliation 2014 2013 Food & Food & Year ended 30 June ($m) Liquor1 Convenience Total Liquor1 Convenience Total Segment revenue (Gregorian)1 29,220 8,171 37,391 27,933 7,847 35,780 Less: Other revenue (252) (12) (264) (236) (13) (249) Headline sales (Gregorian) 28,968 8,159 37,127 27,697 7,834 35,531 Plus/(less): Gregorian adjustment2 (72) (22) (94) 428 116 544 Headline sales revenue (Retail3) 28,896 8,137 37,033 28,125 7,950 36,075 Less: Additional retail week - - - (532) (130) (662) Headline sales revenue (Retail4) 28,896 8,137 37,033 27,593 7,820 35,413 1 Segment revenue for Food & Liquor includes property revenue for 2014 of $26 million & for 2013 of $28 million. 2 Adjustment to headline sales revenue to reflect 30 June financial year end. 3 Retail period relates to the 52 week period 1 July 2013 to 29 June 2014 for 2014 & to the 53 week period 25 June 2012 to 30 June 2013 for 2013. 4 Retail period relates to the 52 week period 1 July 2013 to 29 June 2014 for 2014 & to the 52 week period 2 July 2012 to 30 June 2013 for 2013. 2014 Full-Year Results | 6 Home Improvement & Office Supplies 2014 Half-Year Results | 7 Bunnings network As at 30 June 2014 3 223 Warehouse stores 64 Smaller format stores 36 6 9 33 Trade Centres 27 9 4 11 3 2 67 16 7 18 22 3 51 7 6 4 1 1 6 1 2014 Full-Year Results | 8 Officeworks network As at 30 June 2014 Retail Stores 151 Officeworks 1 1 Harris Technology Business 27 1 4 Fulfilment Centres 15 1 1 Service Centre 8 1 Print Hub 50 1 1 1 1 48 1 2 2014 Full-Year Results | 9 Store network movements Open at Open at Under 30 June 30 June construction 2013 Opened Closed 2014 30 June 2014 Home Improvement Bunnings Warehouse 210 20 (7) 223 16 Bunnings smaller formats 67 4 (7) 64 2 Bunnings Trade Centres 36 1 (4) 33 1 Office Supplies Officeworks 149 61 (4)1 151 3 Harris Technology1--1 - 1 Includes two store relocations. 2014 Full-Year Results | 10 Home Improvement performance summary Year ended 30 June ($m) 2014 2013 % Revenue 8,546 7,661 11.6 EBITDA 1,106 1,028 7.6 Depreciation & amortisation (127) (124) (2.4) EBIT 979 904 8.3 EBIT margin (%) 11.5 11.8 Less: Net property contribution1 13 8 62.5 Trading EBIT 966 896 7.8 Trading EBIT margin (%) 11.3 11.7 1 Net property contribution includes external property income & expenses & gain or losses on disposals of freehold property. 2014 Full-Year Results | 11 20 years of Bunnings Warehouse growth • August 1994: first Bunnings Warehouse commences trading –4th Australian business to invest in large-scale hardware format – Competing against significantly larger BBC & Mitre10 businesses – Leveraged hardware sector know-how – By June 1995, 3 Bunnings Warehouses open; all profitable • By 1999, 29 Bunnings Warehouses trading – Customer offer strengthened & business model enhanced – FY99: EBIT $85 million & ROC 16.4% • 20 year highlights – Relentless improvements to customer offer & business model – Innovated to develop a total market capability » Consumer & commercial (light & heavy) » Physical & digital – Ongoing Innovation growing the market & growing market share Australia’s most trusted retail brand for » “Hardware” to “Home Improvement & Outdoor Living” 9 consecutive years – Compound EBIT growth of 20.8% per annum – Median ROC of 23.7% for 20 years 2014 Full-Year Results | 12 Kmart 2014 Full-Year Results | 13 Kmart network As at 30 June 2014 192 Kmart stores 2 3 243 KTAS centres 38 51 21 26 15 17 51 74 12 44 68 4 5 4 2014 Full-Year Results | 14 Store network movements Open at Open at 30 June 2013 Opened Closed 30 June 2014 Kmart 190 5 (3) 192 Kmart Tyre & Auto 263 3 (23) 243 2014 Full-Year Results | 15 Revenue reconciliation Year ended 30 June ($m) 2014 2013 Segment revenue (Gregorian) 4,209 4,167 Less: Non sales revenue (5) (3) Headline sales (Gregorian) 4,204 4,164 Add: Gregorian adjustment1 (10) 73 Less: Additional retail week - (81) Headline sales revenue (Retail2) 4,194 4,156 1 Adjustment to headline sales revenue to reflect 30 June financial year end. 2 Retail period relates to the 52 week period 1 July 2013 to 29 June 2014 for 2014 & to the 52 week period 2 July 2012 to 30 June 2013 for 2013. 2014 Full-Year Results | 16 Target 2014 Half-Year Results | 17 Target network As at 30 June 2014 180 Large 2 1 128 Small 32 32 19 12 17 12 57 45 48 25 5 1 2014 Full-Year Results | 18 Store network movements Open at Open at Under 30 June 30 June construction at 2013 Opened Closed 2014 30 June 2014 Large1 178 6 (4) 180 3 Small2 130 5 (7) 128 - Total 308 11 (11) 308 3 1 30 June 2014 includes one outlet store. Large store numbers include two replacement stores. 2 30 June 2014 includes one outlet store. Small store numbers include one replacement store. 2014 Full-Year Results | 19 Revenue reconciliation Year ended 30 June ($m) 2014 2013 Segment revenue (Gregorian) 3,501 3,658 Less: Non sales revenue -- Headline sales (Gregorian) 3,501 3,658 Add: Gregorian adjustment1 (5) 61 Less: Additional retail week - (71) Headline sales revenue (Retail2) 3,496 3,648 1 Adjustment to headline sales revenue to reflect 30 June financial year end. 2 2014 retail period relates to the 52 week period 30 June 2013 to 28 June 2014 for 2014 & to the 52 week period 1 July 2012 to 29 June 2013 for 2013. 2014 Full-Year Results | 20 Target transformation plan Fixing the basics (FY14-15) Growth & efficiency (FY16-17) The Target difference (FY18) • Improve availability • Integrated ‘bricks & clicks’ • Maximise SKUs on replenishment • Enhance online functionality • Differentiated store format • Roll-out renewal program • Improve service & refresh stores • Outstanding customer service • Reduce SKUs • Right range in the right store • Edited ranges • Refresh in-house design & trend • Shorter lead times • On-trend & known for fashion & style capability • Consistent fit & quality backed by good quality • Restructure sourcing team & • Reinvest sourcing benefits • Amazing low prices for the fashion consolidate supplier base in price & quality provided • Simplify store rostering model • Realise benefits of investment in • Lean, flexible & sustainable • Rationalise supply chain network systems & processes operations • Optimise support structure • Top team & structure for • Our values are embedded, driving a transformation in place • Recruitment, development & high performance culture that has • Embed new values & performance performance aligned to values transformed our business management A clear plan for FY15 & beyond 2014 Full-Year Results | 21 Chemicals, Energy & Fertilisers 2014 Half-Year Results | 22 Fertiliser sales kt Increased 2H volumes, resulting in steady full-year sales 1,000 900 800 700 600 649 714 713 610 779 500 400 300 200 264 244 100 227 220 160 0 FY10 FY11 FY12 FY13 FY14 First half Second half 2014 Full-Year Results | 23 Global fertiliser & ammonia pricing US$/t Rebound in phosphate prices in second half of FY14, 800 albeit below FY13 700 600 500 400 300 200 100 0 Jun-09 Dec-09 Jun-10 Dec-10 Jun-11 Dec-11 Jun-12 Dec-12 Jun-13 Dec-13 Jun-14 Urea (FOB Middle East) DAP (FOB US Gulf) Ammonia (FOB Middle East) 2014 Full-Year Results | 24 PVC-VCM spread • The ‘PVC – VCM Spread’ refers to the difference between the Asian PVC selling price & VCM input cost $/t Some improvement in A$ spread in FY14 300 250 200 150 100 50 0 Jun-04 Jun-05 Jun-06 Jun-07 Jun-08 Jun-09 Jun-10 Jun-11 Jun-12 Jun-13 Jun-14 FY average US$/t FY average A$/t Source: Harriman Front Page Asian mid points 2014 Full-Year Results | 25 World LPG prices – Saudi CP $/t LPG prices declined in 2H14 following growth in 1H14 1,400 1,200 1,000 800 600 400 200 0 Jun-04 Jun-05 Jun-06 Jun-07 Jun-08 Jun-09 Jun-10 Jun-11 Jun-12 Jun-13 Jun-14 Saudi CP US$/t (propane) Saudi CP A$/t (propane) 2014 Full-Year Results | 26 LPG production Continued long-term trend of content decline kt Avg. t/TJ 200 1.2 160 1.0 120 0.8 80 0.6 40 0.4 0 0.2 FY10 FY11 FY12 FY13 FY14 H1 WLPG production (kt) H2 WLPG production (kt) H1 average LPG content (t/TJ) FY average LPG content (t/TJ) 2014 Full-Year Results | 27 Resources 2014 Full-Year Results | 28 Business environment • Continued challenging global trading conditions for export markets • Metallurgical coal supplies continue to exceed steel production demand – Supply-side responses have commenced in both Australia & globally – Demand-side variability (Japan strong, Eurozone weaker, China & India growth moderating) • Curragh’s July to September 2014 quarter pricing settlement remain unchanged from the previous quarter • Continued