WOOLWORTHS LIMITED                                   A.B.N 88 000 014 67518 November 2010The Manager, CompaniesAustralian ...
WOOLWORTHS LIMITED AGM 2010           CHAIRMAN’S ADDRESS TO SHAREHOLDERSCOMPANY RESULTSON BEHALF OF MY COLLEAGUES ON THE B...
SHAREHOLDER RETURNS & CAPITAL MANAGEMENTIN A YEAR MARKED BY FLUCTUATING ECONOMIC CIRCUMSTANCES,WOOLWORTHS MADE SHAREHOLDER...
IN FACT IT IS A REFLECTION OF THE STRENGTH OF WOOLWORTHSTHAT WE ARE ABLE TO RESPOND TO THESE CHALLENGES AND TAKEA LEAD ON ...
REPORTING STANDARDS HAS BEEN DEMONSTRATED BY ITS STRONGSHAREHOLDER COMMUNICATIONS AND INVESTOR SUPPORT, ASWELL AS ITS RECO...
THESE SUSTAINABLE PRINCIPLES HAVE BEEN INTEGRATEDTHROUGHOUT THE ORGANISATION AND IT IS EXTREMELY PLEASINGTO SEE THE DEGREE...
SHAREHOLDER QUESTIONS RECEIVED PRIOR TO THE AGMFOR THE SECOND YEAR, WE ASKED SHAREHOLDERS TO SUBMITQUESTIONS IN WRITING IN...
2. SOURCING AUSTRALIAN PRODUCTSTHE QUESTION ABOUT WOOLWORTHS’ POLICIES TOWARDSAUSTRALIAN SOURCED PRODUCTS WAS A VERY POPUL...
FAR RATHER RETURN PROFITS TO SHAREHOLDERS IN THE FORM OFINCREASED DIVIDENDS.4. GAMING OPERATIONSONCE AGAIN, WE RECEIVED PO...
ALSO KNOW THAT LARGE NUMBERS OF PEOPLE VIEW POKERMACHINES AS A LEGITIMATE RECREATIONAL ACTIVITY AND CHOOSETO PLAY THEM RES...
Upcoming SlideShare
Loading in...5
×

Default

346

Published on

Published in: Business
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total Views
346
On Slideshare
0
From Embeds
0
Number of Embeds
0
Actions
Shares
0
Downloads
5
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Transcript of "Default"

  1. 1. WOOLWORTHS LIMITED A.B.N 88 000 014 67518 November 2010The Manager, CompaniesAustralian Securities Exchange LimitedCompany Announcements OfficeLevel 420 Bridge StreetSYDNEY NSW 2000Dear Sir/MadamRE: Woolworths Limited – Chairman’s Address - Listing Rule 3.13.3Attached is a copy of the Chairman’s Address to the 2010 Woolworths Limited AnnualGeneral Meeting being held today.For and on behalf ofWOOLWORTHS LIMITEDPETER J HORTONCOMPANY SECRETARY 1 Woolworths Way, Bella Vista, NSW 2153 PO Box 8000, Baulkham Hills, NSW 2153 Australia Telephone (02) 8885 0000 Facsimile (02) 8888 0001
  2. 2. WOOLWORTHS LIMITED AGM 2010 CHAIRMAN’S ADDRESS TO SHAREHOLDERSCOMPANY RESULTSON BEHALF OF MY COLLEAGUES ON THE BOARD OF DIRECTORS, I AMPLEASED TO REPORT THAT ONCE AGAIN, SHAREHOLDERS INWOOLWORTHS LIMITED ENJOYED A REWARDING YEAR AS THECOMPANY POSTED STRONG FINANCIAL RETURNS IN WHAT WASCLEARLY AN UNCERTAIN ECONOMIC ENVIRONMENT.IN THE 2010 FINANCIAL YEAR, WOOLWORTHS ACHIEVED A NETPROFIT AFTER TAX OF $2.02 BILLION – AN INCREASE OF 10.1%AGAINST THE PREVIOUS YEAR. THIS RESULT WAS SUPPORTED BYPLEASING PERFORMANCES ACROSS OUR TRADING DIVISIONS INSPITE OF A NUMBER OF MACRO ECONOMIC CHALLENGES SUCH ASTHE CYCLING OF THE GOVERNMENT’S STIMULUS PAYMENTS, LOWINFLATION IN MANY CATEGORIES AND A STRONG AUSTRALIANDOLLAR.THESE AND OTHER GENERAL GLOBAL FACTORS HAVE CREATEDSOME UNCERTAINTY FOR CUSTOMERS IN AREAS OF DISCRETIONARYSPENDING, WHICH IN TURN HAS AFFECTED SOME OF OUR DIVISIONS.WOOLWORTHS’ COST CONSCIOUSNESS HAS LONG BEEN PIVOTAL TOITS BUSINESS MODEL AND THIS YEAR SAW THE COMPANY EMBARKON ANOTHER JOURNEY TO ACHIEVE GREATER PRODUCTIVITY ANDEFFICIENCY GAINS ACROSS ALL PARTS OF THE BUSINESS. THISCONTINUED FOCUS ON COST CONTROL IS A FUNDAMENTAL PART OFTHE COMPANY’S CULTURE AND PERFORMANCE. 1
  3. 3. SHAREHOLDER RETURNS & CAPITAL MANAGEMENTIN A YEAR MARKED BY FLUCTUATING ECONOMIC CIRCUMSTANCES,WOOLWORTHS MADE SHAREHOLDER RETURNS ITS ABSOLUTEPRIORITY. EARNINGS PER SHARE INCREASED BY 8.8% TO 164 CENTSAND THE DIVIDEND PER SHARE INCREASED BY 10.6% TO 115 CENTSPER SHARE.FURTHER STRENGTHENING THE COMPANY’S MARKET POSITION, THEBOARD APPROVED A TWO-PHASE CAPITAL MANAGEMENT STRATEGYINVOLVING MORE THAN $1 BILLION IN THE 2010 CALENDAR YEAR.THE FIRST STAGE INOLVED AN ON-MARKET BUY-BACK OF SOME $325MILLION, THE SECOND, ANNOUNCED IN AUGUST, WAS A $700 MILLIONOFF-MARKET BUY-BACK.THIS CAPITAL MANAGEMENT PROGRAM IS A REFLECTION OF THEBOARD’S CONFIDENCE IN WOOLWORTHS’ LONG TERMPERFORMANCE. FOR OUR 420,000 SHAREHOLDERS, THE STRATEGYWILL DELIVER FURTHER REWARDS IN TERMS OF IMPROVEDEARNINGS PER SHARE, IMPROVED DIVIDENDS PER SHARE ANDIMPROVED RETURN ON EQUITY.TRADING ENVIRONMENTAS I MENTIONED EARLIER, THIS HAS BEEN AN UNUSUAL YEAR FORRETAILERS WITH VERY LOW INFLATION AND CONSIDERABLEDEFLATION IN MANY CATEGORIES. EQUALLY, CYCLING OVER THEGOVERNMENT’S STIMULUS PACKAGE IN THE PRIOR YEAR HAS BEENA CHALLENGE FOR A BUSINESS THAT IS SO FREQUENTLY JUDGEDON ITS COMPARABLE STORE SALES. UNDER MICHAEL’SOUTSTANDING LEADERSHIP, THE COMPANY HAS KEPT A STEADYCOURSE AND MAINTAINED ITS FOCUS ON DELIVERING CUSTOMERVALUE IN ALL BRANDS. 2
  4. 4. IN FACT IT IS A REFLECTION OF THE STRENGTH OF WOOLWORTHSTHAT WE ARE ABLE TO RESPOND TO THESE CHALLENGES AND TAKEA LEAD ON LOWERING PRICES FOR OUR CUSTOMERS.GROWTH & DEVELOPMENTVIGOROUS GROWTH IN OUR EXISTING BUSINESS IS A FUNDAMENTALCOMPONENT OF WOOLWORTHS’ STRATEGY. THIS HAS PROVIDED ASOLID CORE OF EXPANSION AND MAINTAINED AN APPROPRIATEGROWTH OUTLOOK THROUGHOUT 2010.THERE ARE MANY OTHER EXCITING OPPORTUNITIES AHEAD AS WEEXPLORE NEW ADJACENCIES SUCH AS HOME IMPROVEMENT ANDNEW CHANNELS INCLUDING A RANGE OF ONLINE INITIATIVES.IN TERMS OF MAJOR ACQUISITIONS, THE BOARD REMAINS OPEN ANDALERT TO A WIDE RANGE OF POSSIBILITIES THAT COULD ADD VALUEFOR OUR SHAREHOLDERS.WE ARE AWARE THAT COMPLACENCY WOULD BE DANGEROUS ANDINCREASED COMPETITION FROM WITHIN AUSTRALIA AND FROMOVERSEAS MEANS WE HAVE TO STRIVE TO IMPROVE EVERYDAY.GOVERNANCETHE WOOLWORTHS BOARD OF DIRECTORS HAS HAD AN EXCELLENTWORKING RELATIONSHIP WITH THE CEO AND SENIOR MANAGEMENTTEAM OVER MANY YEARS. THERE IS A STRONG AND SHAREDCOMMITMENT TO ENSURE THE HIGHEST STANDARDS OFGOVERNANCE ARE APPLIED TO ALL ASPECTS OF THE BUSINESS ANDOUR INTERACTION WITH ALL STAKEHOLDERS.WE TRUST THAT YOU AS SHAREHOLDERS WOULD AGREE THAT THEBOARD’S COMMITMENT TO ALL PROPER GOVERNANCE AND 3
  5. 5. REPORTING STANDARDS HAS BEEN DEMONSTRATED BY ITS STRONGSHAREHOLDER COMMUNICATIONS AND INVESTOR SUPPORT, ASWELL AS ITS RECOGNISED STANDARDS OF ETHICAL AND FAIRDEALING IN ALL ITS STAKEHOLDER RELATIONSHIPS.A SUSTAINABLE BUSINESSAS A BOARD, WE PARTICULARLY SUPPORT THE POSITIVE STANCEWOOLWORTHS HAS TAKEN, UNDER MICHAEL’S GUIDANCE, TOWARDSITS CORPORATE RESPONSIBILTIES AND THE ADOPTION OFSUSTAINABLE PRACTICES ACROSS ALL BUSINESS OPERATIONS.WOOLWORTHS IS AT THE FOREFRONT OF SUSTAINABILITYREPORTING AND IS BECOMING RECOGNISED AROUND THE WORLDFOR ITS INNOVATIVE AND INSIGHTFUL STRATEGIES ON ISSUES SUCHAS FOOD WASTE, FOOD SECURITY AND ETHICAL SOURCING.THE BOARD IS ESPECIALLY PLEASED WITH THE DEGREE TO WHICHTHE COMPANY HAS TAKEN A LEADERSHIP ROLE IN MATTERSRELATING TO DIVERSITY, PARTICULARLY IN TERMS OF INCREASINGTHE REPRESENTATION OF WOMEN AT ALL LEVELS OF THE BUSINESS.WOMEN NOW MAKE UP 54% OF OUR WORKFORCE AND THEPERCENTAGE OF WOMEN IN LEADERSHIP ROLES HAS GROWN FROM17% IN 2004 TO 27% TODAY. WOOLWORTHS HAS ALSO COMMITTEDTO EARLY ADOPTION OF THE ASX CORPORATE GOVERNANCEPRINCIPLES BY SETTING TARGETS OF 33% FEMALEREPRESENTATION AT BOARD LEVEL AND WITHIN ITS SENIORMANAGEMENT GROUP BY 2015THE INTRODUCTION OF PAID PARENTAL LEAVE IN PARTICULAR, HASBEEN VERY SUCCESSFULLY EMBRACED WITH AND I COMMENDWOOLWORTHS FOR LEADING THE RETAIL SECTOR IN THE PROVISIONOF THIS BENEFIT FOR ITS EMPLOYEES. 4
  6. 6. THESE SUSTAINABLE PRINCIPLES HAVE BEEN INTEGRATEDTHROUGHOUT THE ORGANISATION AND IT IS EXTREMELY PLEASINGTO SEE THE DEGREE TO WHICH STAFF AT ALL LEVELS HAVEEMBRACED AND INSTIGATED CHANGE.IN ALL ITS OPERATIONS, WOOLWORTHS AIMS TO ACHIEVE BALANCE.NOT EVERY DECISION WE MAKE, NOT EVERYTHING WE DO WILLPLEASE ALL OUR STAKEHOLDERS BUT OUR COMMITMENT IS TOALWAYS BEHAVE WITH INTEGRITY AND TO ALWAYS ACTRESPONSIBLY.ACKNOWLEDGEMENTSFINALLY, I WOULD LIKE TO ACKNOWLEDGE ALL THOSE WHO HAVEBEEN A PART OF THE COMPANY’S SUCCESS IN THE PAST YEAR:• THE BOARD OF DIRECTORS WHO HAVE CONSISTENTLY WORKED WELL TOGETHER TO REPRESENT THE INTERESTS OF OUR SHAREHOLDERS;• THE CEO AND SENIOR MANAGEMENT IN ACHIEVING GOOD RESULTS IN A TOUGH COMPETITIVE MARKET;• THE 188,000 STAFF WHOSE EFFORTS, DAY IN AND DAY OUT, HAVE FORMED THE BASIS FOR THE DELIVERY OF OUTSTANDING SERVICE.• THE MANY THOUSANDS OF SUPPLIERS TO THE GROUP WHO WORK CLOSELY WITH US TO DELIVER VALUE TO OUR CUSTOMERS• YOU, THE SHAREHOLDERS WHO CONTINUE TO BE LONG TERM SUPPORTERS AND BENEFICIARIES OF WOOLWORTHS’ SUCCESS.THANK YOU 5
  7. 7. SHAREHOLDER QUESTIONS RECEIVED PRIOR TO THE AGMFOR THE SECOND YEAR, WE ASKED SHAREHOLDERS TO SUBMITQUESTIONS IN WRITING IN ADVANCE OF THE MEETING. OBVIOUSLYWE CAN’T ANSWER EVERY SPECIFIC QUESTION BUT THE PURPOSE ISTO MAKE SURE THAT WE ADDRESS THE GENERAL THEMES THAT AREMOST IMPORTANT TO OUR SHAREHOLDERS.1. EXECUTIVE REMUNERATIONWE RECEIVED QUESTIONS IN RELATION TO EXECUTIVEREMUNERATION, PARTICULARLY HOW WOOLWORTHS ENSURES THATPAY LEVELS ARE NOT EXCESSIVE.REMUNERATION FOR SENIOR EXECUTIVES IS SET BY THE PEOPLEPOLICY COMMITTEE AND THEY RECEIVE A MIX OF FIXED PAY ANDSHORT AND LONG TERM INCENTIVES. THE MIX IS DESIGNED TOREWARD PERFORMANCE WITHOUT ENCOURAGING EXCESSIVE RISKTAKING OR FOCUSING ON SHORT TERM GAINS AT THE EXPENSE OFLONGER TERM PERFORMANCE. OVERALL, PAY INCREASES ACROSSTHE COMPANY WERE AT THE 3% MARK FOR THIS FINANCIAL YEAR.THE CEO’S REMUNERATION IS APPROVED BY THE BOARD AND ISBELOW BOTH THE MEDIAN AND THE AVERAGE FOR THE ASX TOP 20COMPANIESIN TERMS OF DIRECTORS’ REMUNERATION, THE FEE STRUCTURE ISBASED ON INDEPENDENT RESEARCH AND EXTERNAL PROFESSIONALADVICE. FEE LEVELS ARE COMMENSURATE WITH THE SIZE ANDCOMPLEXITY OF AN ORGANISATION LIKE WOOLWORTHS AS WELL ASTHE RELATIVE WORKLOAD AND RESPONSIBILITIES OF EACHDIRECTOR. THE FEE INCREASE DIRECTORS RECEIVED LAST YEARWAS APPROXIMATELY 3%, CONSISTENT WITH THE AVERAGEINCREASE ACROSS THE COMPANY. 6
  8. 8. 2. SOURCING AUSTRALIAN PRODUCTSTHE QUESTION ABOUT WOOLWORTHS’ POLICIES TOWARDSAUSTRALIAN SOURCED PRODUCTS WAS A VERY POPULAR THEMELAST YEAR AND WAS RAISED AGAIN THIS YEAR.WE DO APPRECIATE THE FACT THAT THERE IS A PROPORTION OFCUSTOMERS WHO DO SEEK OUT AUSTRALIAN MADE PRODUCTS ANDFOR OUR PRIVATE LABEL PRODUCTS, WE DO POSITIVELYDISCRIMINATE IN FAVOUR OF AUSTRALIAN SUPPLIERS. THE MAJORITYOF OUR PRIVATE LABEL PRODUCTS – ABOUT 70% - ARE AUSTRALIANMADE AND 97% OF OUR FRESH FOOD IS GROWN, FARMED ORMANUFACTURED WITHIN AUSTRALIA. IN FACT WOOLWORTHS WOULDPROBABLY BE THE SINGLE LARGEST CUSTOMER OF AUSTRALIANMADE FOOD AND WE CERTAINLY INTEND TO MAINTAIN THAT.WHERE WE DO HAVE TO SOURCE PRODUCT OVERSEAS IT IS USUALLYBECAUSE WE SIMPLY CANNOT FIND A LOCAL SUPPLIER TO TENDERFOR THE CONTRACT. SOMETIMES THERE IS A VERY SIGNIFICANTCOST DIFFERENCE THAT WOULD MAKE OUR PRODUCTUNCOMPETITIVE. THESE ARE ALL ISSUES THAT WE NEED TOBALANCE.3. SHAREHOLDER DISCOUNT CARDONCE AGAIN, SEVERAL SHAREHOLDERS ASKED WHY WOOLWORTHSDOES NOT OFFER A STORE DISCOUNT TO SHAREHOLDERS.THIS COMPANY HAS IN EXCESS OF 400,000 SHAREHOLDERS – MORETHAN DOUBLE THE AMOUNT OF STAFF WHO RECEIVE A 5% DISCOUNT.GIVEN THAT WOOLWORTHS MAKES LESS THAN 4 CENTS IN THEDOLLAR PROFIT AFTER TAX, ANY SHAREHOLDER DISCOUNT SCHEMEWOULD BE A SIGNIFICANT COST TO THE BOTTOM LINE. WE WOULD 7
  9. 9. FAR RATHER RETURN PROFITS TO SHAREHOLDERS IN THE FORM OFINCREASED DIVIDENDS.4. GAMING OPERATIONSONCE AGAIN, WE RECEIVED POSITIVE AND NEGATIVE COMMENTSABOUT WOOLWORTHS’ OPERATION OF GAMING MACHINES IN HOTELS.MANY SHAREHOLDERS FULLY UNDERSTAND THE RATIONALE BEHINDWOOLWORTHS’ INVOLVEMENT IN THE HOTEL INDUSTRY, WHICHSTEMS FROM THE UNIQUE LIQUOR LICENSING REGULATIONS INQUEENSLAND WHERE YOU CAN ONLY OPERATE A RETAIL LIQUORSTORE UNDER THE UMBRELLA OF A HOTEL LICENCE. AS A SOURCE OFBUSINESS DIVERSIFICATION HOWEVER, HOTELS OFFERED OURSHAREHOLDERS A NEW REVENUE STREAM AND FURTHER EXTENDEDOUR CAPACITY TO CATER TO AUSTRALIAN CUSTOMERS WHO, FORTHE MOST PART, ENJOY VISITING HOTELS AS A SOCIAL ACTIVITY.MANY SHAREHOLDERS ALSO APPRECIATE THE FACT THAT AS A LARGECOMPANY, WOOLWORTHS BRINGS A GREAT DEAL OF INTEGRITY ANDOPERATIONAL RESPONSIBILITY TO GAMING.ON ARRIVAL TODAY, YOU SHOULD HAVE BEEN HANDED A COPY OFTHE ALH RESPONSIBLE GAMING CHARTER WHICH CLEARLY SPELLSOUT THE COMMITMENT THAT WE HAVE TO MANAGING OUR GAMINGOPERATIONS RESPONSIBLY. THIS INCLUDES DEVELOPINGVOLUNTARY PRE-COMMITMENT PROGRAMS AND THE SCREENING ORSEPARATION OF GAMING AREAS WITHIN OUR HOTELS.WOOLWORTHS FULLY ACCEPTS AND APPRECIATES THERESPONSIBILITY OF BEING AN OPERATOR OF VENUES WITHELECTRONIC GAMING MACHINES. WE DO UNDERSTAND THAT SOMEPEOPLE FEEL THAT GAMBLING IS NOT AN ACCEPTABLE SOCIALPRACTICE AND THAT GAMBLING ON POKER MACHINES IS IN SOME WAYUNSAVOURY. WE ALSO ACCEPT THAT GAMBLING CAN BECOMEPROBLEMATIC FOR A SMALL PROPORTION OF PEOPLE. HOWEVER WE 8
  10. 10. ALSO KNOW THAT LARGE NUMBERS OF PEOPLE VIEW POKERMACHINES AS A LEGITIMATE RECREATIONAL ACTIVITY AND CHOOSETO PLAY THEM RESPONSIBLY.WE ALSO UNDERSTAND THAT OUR OBLIGATION IS TO SETAPPROPRIATE GOVERNANCE STANDARDS FOR OUR BUSINESS ANDMANAGE POTENTIAL RISKS TO OUR COMPANY, OUR CUSTOMERS ANDTHE COMMUNITY. AS SUCH, THE MINIMISATION OF HARM IS A KEYPRIORITY FOR US, AS IT IS FOR STATE AND FEDERAL GOVERNMENTSWHO DETERMINE THE VERY RIGOROUS AND SUBSTANTIALREGULATIONS THAT GOVERN THE GAMING INDUSTRY. IT IS FOR THISREASON THAT ALH HAS PUT IN PLACE ITS HOTEL AND GAMINGCHARTER COPY OF WHICH YOU WOULD HAVE RECEIVED TODAY, ANDCAN BE VIEWED ON BOTH THE WOOLWORTHS AND ALH WEBSITES.THE OBLIGATIONS IN THIS CHARTER APPLY IN ADDITION TO THE VERYSTRICT STATE GOVERNMENT REGULATORY OBLIGATIONS THATEVERY VENUE WE OPERATE MUST COMPLY WITH. COMPLIANCE WITHTHESE OBLIGATIONS IS A MATTER OF ONGOING VIGILANCE FOR OURMANAGEMENT TEAM.WITHOUT DOUBT, ISSUES SURROUNDING GAMING WILL CONTINUE TOBE DEBATED IN THIS COUNTRY, IRRESPECTIVE OF WOOLWORTHS’INVOLVEMENT AND WILL ALWAYS INVOKE PASSIONATE OPINION FROMCERTAIN INTERESTED PARTIES. THESE DEBATES ARE SIMILAR TOTHOSE ON TOBACCO, OBESITY AND SUSTAINABILITY – ISSUES THATALSO FALL WITHIN THE FOCUS OF OUR CORPORATE RESPONSIBILITYMANDATE.I CAN ASSURE YOU THAT OUR GAMING OPERATIONS, AS WITH ALL OUROPERATIONS, ARE CAREFULLY MANAGED AND CONSTANTLYASSESSED. 9

×