Wesfarmers (WES) H2 2024 earnings summary

Executive summary

• Net profit after tax rose 3.7% to AUD 2.6 billion, with operating cash flows up 9.9% to AUD 4.6 billion and revenue up 1.5% to AUD 44.2 billion, reflecting strong operational execution and retail growth.

• All major retail divisions grew sales and earnings, with Kmart Group delivering standout earnings growth of nearly 25%.

• A fully franked final dividend of AUD 1.07 per share was declared, bringing the total for the year to AUD 1.98, up 3.7%.

• Portfolio remains well-positioned for long-term growth, supported by a strong balance sheet, productivity, and efficiency initiatives.

• Progress made on key growth projects, including health and the Covalent lithium project, and a 5.4% reduction in Scope 1 and 2 emissions.

Financial highlights

• Revenue: AUD 44.2 billion (+1.5% YoY); NPAT: AUD 2.6 billion (+3.7% YoY); EBIT: AUD 3.99 billion (+3.3% YoY); EPS: 225.7c (+3.6% YoY).

• Operating cash flows: AUD 4.6 billion (+9.9% YoY); Free cash flows: AUD 3.2 billion (-11.1% YoY); Net capital expenditure: AUD 1.04 billion (-11.7% YoY).

• Bunnings, Kmart Group, and Officeworks combined increased earnings by 6.8% year-over-year.

• WesCEF revenue declined 16.9% and earnings fell 34.2% to AUD 440 million, mainly due to lower global commodity prices.

• Officeworks sales rose 2.3% and earnings increased 4% to AUD 208 million.

Outlook and guidance

• Inflation and interest rates remain elevated, with cost pressures expected to persist into FY 2025.

• Early FY 2025 trading: Kmart Group sales growth in line with 2H24, Bunnings positive but moderating, Officeworks slightly ahead of 2H24.

• Covalent Lithium refinery expected to deliver first product mid-2025, with sales in FY 2026 after ramp-up and qualification.

• FY25 net capital expenditure expected between AUD 1.1–1.3 billion.

• Industrial businesses' performance subject to commodity prices, FX, and seasonal factors.