Wesfarmers (WES) investor relations material

Executive summary

• Revenue increased 3.1% year-over-year to $24.2 billion, with net profit after tax up 9.3% to $1.6 billion, driven by strong performances in Bunnings, Kmart Group, and WesCEF, supported by productivity and digital initiatives.

• Interim fully-franked dividend rose 7.4% to $1.02 per share, and a $1.50 per share capital management distribution was paid in December.

• Sustainability progress included a 27.8% reduction in Scope 1 and 2 emissions, 100% renewable energy in retail, and increased rooftop solar capacity.

• All divisions except Officeworks grew earnings; Officeworks' decline was due to transformation program costs.

• Investments in technology, sustainability, and climate resilience advanced, with improved safety metrics.

Financial highlights

• EBIT increased 8.4% to $2,493 million; basic EPS rose 9.3% to 141.4 cents.

• Free cash flow increased 35.6% to $2,745 million, mainly from asset sales.

• Net financial debt increased to $4.9 billion, with Debt/EBITDA at 1.9x.

• Return on equity (excluding significant items) improved to 32.7%.

• Operating cash flows decreased 3.3% to $2,491 million due to higher tax paid.

Outlook and guidance

• Retail divisions are expected to drive profitable growth, leveraging value credentials and omnichannel investments.

• Bunnings and Officeworks sales growth in early 2H in line with 1H; Kmart Group sales growth stronger.

• Lithium JV refinery ramp-up extended due to odour issues, but 2H earnings expected to be slightly above 1H; excess spodumene to be sold profitably.

• Net capital expenditure for FY26 expected between $1 billion and $1.3 billion, excluding BPI sale proceeds.

• Health division to focus on consumer business growth and wholesale improvements.