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October 2004 1
Investor BriefingMichael Chaney Richard GoyderManaging Director & CEO Deputy Managing Director
October 2004
October 2004 2
Performance Summary
Year Ended 30 June (A$m) 2003 2004 %
Operating Revenue* 7,672.9 7,706.6 0.4
Net Profit (before goodwill) 623.9 958.6 53.6
Goodwill Amortisation (85.7) (85.5) (0.2)
Net Profit (after goodwill excluding Girrah/Landmark) 481.9 569.2 18.1
Earnings Per Share (before g/will ex. Girrah/Landmark) (cents)
150.7 174.2 15.7
* Excludes revenue from the sale of Girrah (2003) and Landmark (2004)
October 2004 3
Capital Employed
Chemicals & FertilisersA$433m
Hardware/DIY A$1,824m
EnergyA$750m
Insurance A$387mIndustrial &
Safety ProductsA$768m
OtherA$780m
June 2004
October 2004 4
Corporate Objective
To provide a satisfactoryreturn to shareholders
October 2004 5
Share Price vs Earnings Per Share(pre goodwill amortisation and abnormals)
-50
0
50
100
150
200
250
300
350
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004EPS
(cents)
-5
0
5
10
15
20
25
30
35
Share Price(A$)
EPS Share Price
October 2004 6
Australian Accumulation Indices1984 – 2004
0
20,000
40,000
60,000
80,000
100,000
120,000
84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04
All Ordinaries Wesfarmers Limited
October 2004 7
EBIT - 1985
Chemicals & Fertilisers
58%
Other9.2%
Energy12.7%
Rural Services20.1%
Total EBIT A$35.9m
October 2004 8
EBIT – 2004
Insurance9.2%
Industrial & Safety9.0%
Hardware/DIY35.3%
Energy24.4%
Other13.0%
Chemicals & Fertilisers
9.0%
Total EBIT A$965m
October 2004 9
Growth Philosophy
Logical Incrementalism
October 2004 10
Corporate Strategies
1. Improve performance of existing businesses
2. Expand existing businesses
3. Portfolio management
October 2004 11
Corporate Strategies
1. Improve performance of existing businesses
2. Expand existing businesses
3. Portfolio management
October 2004 12
Integrated Shareholder-Focused Systems
• Objective Setting
• Performance Measures
• Performance Targets
• Management Accounts
• Cash Management
• Corporate Planning
• Project Evaluation
• Remuneration
October 2004 13
Performance Targets
• Group ROEA = 19% after tax
• Divisions EBITA/Capital (ROC) = 20% before tax
• Projects IRR = 10% after tax
October 2004 14
Performance Requirements
41 2 3 5
Years
<10
10-20
>20
ROC %
A
B
C
October 2004 15
Divisional ROC & Capital Employed(before goodwill amortisation)
Rolling 12 months to 30 June 2004
EBITA A$m
Capital Employed
A$m
ROC % 2003
ROC %
Hardware 392.1 1,840.0 21.3 18.0
Energy 240.2 770.9 31.2 31.9*
Industrial & Safety 112.0 814.1 13.8 14.7
Chemicals & Fertilisers 85.6 482.6 17.7 16.1
Insurance 95.8 376.9 25.4 65.8
* Excluding Girrah
October 2004 16
Return on Shareholders’ Funds(before goodwill amortisation)
Target
0
5
10
15
20
2000 2001 2002 2003* 2004**
%
* Excluding Girrah
17.618.5
15.7 15.8
18.5
** Excluding Landmark
October 2004 17
Corporate Strategies
1. Improve performance of existing businesses
2. Expand existing businesses
3. Portfolio management
October 2004 18
Wesfarmers CSBP
October 2004 19
Sales Volumes - CSBP5 Year Trend
0.0
0.3
0.6
0.9
1.2
1.5
1.8
2000 2001 2002 2003 2004
mt
Chemicals Fertilisers
October 2004 20
EBITA and EBITA/Capital- CSBP 5 Year Trend
0
20
40
60
80
100
2000 2001 2002 2003 2004
A$m
02468101214161820
%
EBITA EBITA/Capital
EBITA EBITA/Capital
October 2004 21
Wesfarmers Energy
October 2004 22
Wesfarmers Energy: Principle Business Activities
Coal• Premier: steaming coal, Western Australia• Curragh: domestic steaming coal and export coking
coal, Queensland• Bengalla: domestic and export steaming coal, New
South Wales
Gas• Kleenheat: national LPG distribution• Wesfarmers LPG: LPG export• Air Liquide: industrial gases
Statewest Power
October 2004 23
Energy - Profitable Growth Financial Performance
EBITA*
0
50
100
150
200
250
300
1999 2000 2001 2002 2003 2004
A$mEBITA/Capital
0
5
10
15
20
25
30
35
1999 2000 2001 2002 2003 2004
%
* Excludes Girrah A$80.5m in 2003
October 2004 24
Coal Type and destination, 2004(million tonnes)
ExportExportDomestic
TotalCokingSteaming
12.84.61.76.5TOTAL
2.31.70.6Bengalla*
7.14.62.5Curragh
3.43.4Premier
* Represents Wesfarmers’ 40% interest
October 2004 25
Wesfarmers Coal Sales1999 to 2006
Coal
0
2
4
6
8
10
12
14
16
1999
2000
2001
2002
2003
2004
2005
F20
06F
mt
October 2004 26
JRP US$/Tonne FOB nominal
30
35
40
45
50
55
60
83 85 87 89 91 93 95 97 99 01 03
Energy 2003/04 EnvironmentHard Coking Coal Prices
04
October 2004 27
Energy 2003/04 EnvironmentThermal Coal Prices
0
US$/Tonne FOB nominal
-
10
20
30
40
50
60
70
Spot Price
Apr-04Apr-00 Apr-01 Apr-02 Apr-03Apr- 96 Apr-97 Apr-98 Apr-99
Source: Barlow Jonker
October 2004 28
Bunnings
October 2004 29
1
32
18
84
Totals
TraditionalStores
Warehouses125
85
3
2
2
7
41
923
24
5
31
18
WA SalvageStores18
As At 30 June 2004Excludes Frame & Truss Operations
Store Network Update
October 2004 30
Bunnings Operating Revenue
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
1991 1993 1995 1997 1999 2001 2003
A$m
October 2004 31
9.8%
282.3
50.0
332.3
3,375.3
2003
0.1%9.9%EBITA/Sales Ratio
15.0%324.6EBIT
0.0%50.0Amortisation
12.7%374.6EBITA*
11.7%3,771.6Revenue*
Change2004(A$m)
Full Year Result
Trading Result
*Excludes Revenue and EBITA from property and other
October 2004 32
Industrial and Safety
October 2004 33
Trading Stream Positioning
• Three markets- Maintenance repair &
operating (MRO)
- Safety
- Packaging (NZ only)
• Market leader AUS & NZ
• 500,000 SKU’s A$210m inventory
• 17 product trading departments
• 10 trading streams
October 2004 34
Distribution Network
AUCKLAND
HASTINGS
NEW PLYMOUTH
LOWER HUTT
CHRISTCHURH
DARWIN
ALICE SPRINGS
CAIRNS
TOWNSVILLE
MACKAY
ROCKHAMPTON
BRISBANE
TAMWORTH
NEWCASTLE
SYDNEY
CANBERRA
MELBOURNE
LAUNCESTON
HOBART
ADELAIDE
PERTH
BUNBURY
WOLLONGONG
ORANGE
WHYALLA
GRIFFITH
ALBURYSHEPPARTON
BENDIGO
DANDENONG
GOSFORD
DUBBO
SOUTHPORTTWEED HEADS
COFFS HARBOUR
IPSWICH
TOOWOOMBA
GYMPIE
BUNDABERG
GLADSTONE
MT. ISA
WAGGA WAGGA
MORWELL
MARYBOROUGH
LISMORE
KWINANA
KARRATHA
KALGOORLIE
BURNIE
PORT HEDLAND
BELL BAY
ROXBY DOWNS
GERALDTON
PORTLAND GEELONG
MT GAMBIER
BALLARAT
MILDURA
BROKEN HILL
SINGLETON
TRADING STYLES:Blackwoods 65Atkins 3Blackwoods Atkins 21Bakers 6Motion 10Metals 1Mullings 9Protector Alsafe 55NZ Safety 24Blackwoods (NZ) 6Protector (NZ) 22Pkg House 11 Paykel 21
TOTAL 254BRANCHES
New South Wales 38Victoria 29Queensland 38Western Australia 39South Australia 13 Tasmania 10Northern Territory 3New Zealand 84
TOTAL 254
Broome
Albany
Esperance
Newman
Kunnunurra
TAURANGA
PALMERSTON NTH
WANGEREI
GREYMOUTH
DUNEDIN
INVERCARGILL
NELSON WELLINGTON
ROTORUA
October 2004 35
Year ended 30 June (A$m) 2003 2004
Operating Revenue 1,112.0 1,150.6
EBITA 117.2 112.0
EBITA / Operating Revenue 10.5% 9.7%
EBITA / Capital 14.7% 13.8%
2004 Performance Summary
October 2004 36
Insurance
October 2004 37
Wesfarmers Insurance Division
• Wesfarmers Federation Insurance
• Lumley General (Australia)
• Lumley General (New Zealand)
• Lumley Finance
October 2004 38
Insurance EBIT
-20
0
20
40
60
80
100
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
Year
EBIT (A$m)
October 2004 39
Australian Railroad Group
• 50% owned
• Western Australian and South Australian rail networks
- above and below rail
• Organic expansion potential
October 2004 40
Gresham Private Equity Fund 1Remaining Investments
• EROC - mining / infrastructure contractor
• Norcros - UK – based building materials,
coatings
• Riviera - cruisers
• Virgin Active - health clubs in Europe and South Africa
• Raywood - vehicle control systems
October 2004 41
Corporate Strategies
1. Improve performance of existing businesses
2. Expand existing businesses
3. Portfolio management
October 2004 42
Portfolio Management Highlights 2004
• Sale of Landmark rural
• Purchase of Lumley Insurance
• Purchase of Paykel Industrial
• Sale of Sotico timber
October 2004 43
Key Success Factors
1. Financial Focus
2. Strict Disciplines
3. Building Growth-Enabling Competencies
4. Culture
October 2004 44
0
100
200
300
400
500
600
700
86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04
A$m
Capital Expenditure & Depreciation
Capex Acquisitions Depreciation
2018
October 2004 45
Capital Expenditure Programme 2005 Budget
Total: A$451m
Industrial & Safety A$19m
Chemicals & Fertilisers
A$40m
HardwareA$124m Insurance
A$18m
OtherA$3m
EnergyA$247m
October 2004 46
Net Debt/Equity
0
20
40
60
80
2000 2001 2002 2003 2004
%
Target
78.172.6
43.8
28.2
45.5
October 2004 47
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