Endeavour Drinks achieved record Net Promoter Score (NPS) and VOC scores for Dan Murphy’s and BWS during the year, continuing the momentum of solid growth in a competitive market.
TRADING PERFORMANCE
Endeavour Drinks sales increased by 4.3% to $7,913 million in FY17 with solid growth in comparable sales of 2.8% and a strong contribution from new store openings. Both retail banners, Dan Murphy's and BWS, reported comparable sales growth, with growth in attached BWS stores a particular highlight. In the fourth quarter, Easter adjusted comparable sales increased by 4.6% due to strong execution around seasonal events. The sales improvement was consistent with improvements in NPS and Voice of Customer.
Sales per square metre increased by 0.5% with total sales growth of 4.3% offset by net average space growth of 3.7%.
Dan Murphy’s delivered another year of strong sales with 12 net new stores opened and strong double digit sales growth in online. My Dan Murphy’s membership has now reached 2.4 million members less than three years after its launch. Dan Murphy’s retained its market leading NPS.
BWS reported solid comparable sales growth driven by improved growth in our attached BWS stores and a strong improvement in NPS. We opened 19 net new BWS stores opening in FY17, bringing the network to 1,298 stores at the end of the year. Other key milestones were the launch of BWS Online in October FY17 with one hour Click & Collect available at all stores and we are currently trialling fast delivery in around 50 BWS stores.
Endeavour Drinks gross margin declined by 33 bps to 23.1% due to the negative category mix with beer and spirits outgrowing wine as well as targeted price investments.
CODB as a percentage of sales decreased by 30 bps due to the gain on sale of a business of $8.4 million, strong cost management despite higher fixed costs associated with store openings during the year and minor reallocations between gross margin and CODB for the Summergate business.
EBIT increased 3.9% to $502.5 million in FY17.
ROFE improved by 62 bps driven by the increase in EBIT and reduction in funds employed despite a number of new store openings during the year.
| BEFORE SIGNIFICANT ITEMS1 | FY17 52 weeks |
FY16 52 weeks |
Change | |
| Sales | ($m) | 7,913 | 7,589 | 4.3% |
| EBIT | ($m) | 502.5 | 483.8 | 3.9% |
| Gross margin | (%) | 23.08 | 23.41 | (33) bps |
| Cost of doing business | (%) | 16.73 | 17.03 | (30) bps |
| EBIT to sales | (%) | 6.35 | 6.38 | (3) bps |
| Sales per square metre | ($) | 18,039 | 17,943 | 0.5% |
| Funds employed3 | ($m) | 3,017.3 | 3,070.0 | (1.7%) |
| ROFE3 | (%) | 16.9 | 16.3 | 62 bps |
n.c. Not comparable
n.m. Not meaningful
- There were no significant items recognised in FY17.
In FY16, total significant items of $4,013.7 million before tax ($2,627.8 million after tax attributable to equity holders of the parent entity) were recognised. Details of these costs have been provided in Note 1.4 of the Financial Report. Where noted, profit and loss items have been adjusted to reflect these significant items. - In line with the classification of Petrol as a discontinued operation, the financial performance and operating metrics previously disclosed under ‘Australian Food and Petrol’ has been split to disclose Australian Food separately from Petrol in this announcement. Funds employed and ROFE have also been separately presented for Endeavour Drinks.
- Return on funds employed (ROFE) is calculated as EBIT before significant items for the previous 12 months as a percentage of average (opening, mid and closing) funds employed. This methodology has been adopted for FY17 and FY16. In previous reporting periods, ROFE was calculated as EBIT before significant items for the reporting period as a percentage of average (opening and closing) funds employed. Lease adjusted ROFE adjusts funds employed for the present value of future lease obligations and EBIT for the implied interest on those obligations.
- Growth for New Zealand Food is quoted in New Zealand dollars.
- Operating cash flow as a percentage of group net profit after tax before depreciation and amortisation.
- Group earnings before interest, tax, depreciation, amortisation and rent (EBITDAR) divided by rent and interest costs. Rent and interest costs include capitalised interest but exclude foreign exchange gains/losses and dividend income.
- The credit ratings referred to in this document have been issued by a credit rating agency which holds an Australian Financial Services Licence with an authorisation to issue credit ratings to wholesale clients only. The credit ratings in this document are published for the benefit of Woolworths Group’s debt providers.
Sales
$7,913M
4.3% from 2016
EBIT
$502.5M
3.9% from 2016
"The staff are very friendly and helpful. There is quite a good range of spirits, wine & beer brands available."