Woolworths Group profits hit $1.97bn as weekly traffic to digital assets increase 40.5%
Not surprisingly, Woolworths Group has reported a revenue increase of 5.7% to $67.3 billion, for the 2021 financial year, with group EBIT growth of 13.7% to $3.66 billion and net profit after tax of $1.97 billion, up 22.9% on FY 2020. The results are for the 12 months to 27 June 2021.
CEO Brad Banducci said that FY 2021 was a significant year in the history of Woolworths Group and “one we can look back on proudly”.
Group results FY21 [click to enlarge]
“We farewelled our Endeavour Group colleagues at the end of June following a multi-year journey to separate the business. It was a bittersweet moment but we are confident it was the right decision to enhance value for our shareholders. We also made progress in laying the foundations for the new Woolworths Group, a more focused food and everyday needs ecosystem with a Customer 1st Team 1st culture at its core, and enabled by data and technology.”“We also continued to progress our sustainability agenda and launched our new 2025 Sustainability Plan in November with ambitious targets in areas where we can make a difference.”
Australian Food, which includes supermarket Woolworths and WooliesX e-commerce, posted total sales of $44.4 billion, with EBIT of $2.34 billion, representing growth of 13.7% on FY 2020.
The group also posted positive results in the e-commerce sector, with sales through WooliesX increasing 74.7% compared to FY 2020. Weekly traffic to the group’s digital assets were also up 40.5% to 17.2 million driven by growth in apps, and Cartology’s advertising screens rollout across 1,218 Woolworths and Dan Murphy’s stores nationwide.
Australian Food results [click to enlarge]
“BIG W had another fantastic year with improved customer scores and strong sales and EBIT growth. After sales growth of 20.1% in H1, growth moderated in H2 but remained positive at 2.3%, despite the negative impact of lockdowns in the half. EBIT increased by over 300% in the year to $172 million.
“Endeavour Drinks (BWS and Dan Murphy’s) sales increased by 9.6% with EBIT increasing by 17.7% due to the continuation of the in-home consumption and premiumisation trends,” said Banducci. Hotels delivered materially higher earnings than the prior year, with EBIT increasing 52% to $261 million. While some disruption to trading continued due to lockdowns, sales and EBIT growth in H2 benefitted from cycling a period where venues were closed for most of the final four months of FY20.
“I wanted to recognise the enormous amount of work across the business that led to the successful demerger of Endeavour Group on 28 June. We look forward to being better together in partnership with Endeavour Group for many years to come.”
COVID associated costs across the group totalled $332 million, including PPE, cleaning, security and contractors, additional staff costs and supply chain costs, this compared with $404 million in FY 2020.
Results by business [click to enlarge]
Significant events across the year included the demerger with Endeavour Group, the results stated that a gain of approximately $6.4 billion will be recognised within discontinued operations in FY 2022.
The group also completed the acquisition of a 65% equity interest in PFD, resulting in the group gaining control of the business on 28 June 2021. The value of the business is expected to be approximately $431 million.
“We farewelled our Endeavour Group colleagues at the end of June following a multi-year journey to separate the business. It was a bittersweet moment but we are confident it was the right decision to enhance value for our shareholders. We also made progress in laying the foundations for the new Woolworths Group, a more focused food and everyday needs ecosystem with a Customer 1st Team 1st culture at its core, and enabled by data and technology,” said Banducci. “We also continued to progress our sustainability agenda and launched our new 2025 Sustainability Plan in November with ambitious targets in areas where we can make a difference.” Woolworths launched its new Green campaign last month, in line with this sustainability plan.
In January, Woolworths was ranked as the most valuable brand in Australia, with growth in the retail sector led Woolies for the second year running, and close competitor Coles.
Looking ahead, Banducci said that for the first eight weeks of FY 2022, Australian Food sales have increased by 4.5%, while restrictions have resulted in a total sales decline of 15.1% for Big W.
Banducci continued: “COVID will continue to have a profound impact in FY22 but making any further predictions about the year ahead remains very difficult. Our commitment to operating COVIDSafe remains our number one priority with the ability to respond quickly and effectively to restrictions becoming part of the way we do business. We are confident that we have the right foundations in place to continue to deliver value for all our key stakeholders in the years ahead.”
Woolworths Group’s market capitalisation is $51.74 billion and its daily share price is $40.82.
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Calum Jaspan was news editor at Mumbrella, based in Melbourne. He was also the producer and host of the Mumbrellacast. He left Mumbrella in May 2023.
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