Non-IFRS financial information

This Annual Report contains certain non-IFRS financial measures of historical financial performance, balance sheet or cash flows. Non-IFRS financial measures are financial measures other than those defined or specified under all relevant accounting standards. The measures therefore may not be directly comparable with other companies’ measures. Many of the measures used are common practice in the industry in which the Woolworths Group operates. Non-IFRS financial information should be considered in addition to, and is not intended to be a substitute for, or more important than, IFRS measures. The presentation of non-IFRS measures is in line with Regulatory Guide 230 issued by Australian Security and Investments Commission (ASIC) to promote full and clear disclosure for investors and other users of financial information, and minimise the possibility of those users being misled by such information.

These measures are used by management and the directors as the primary measures of assessing the financial performance of the Group and individual segments. The directors also believe that these non-IFRS measures assist in providing additional meaningful information on the underlying drivers of the business, performance and trends, as well as the position of the Woolworths Group. Non‑IFRS financial measures are also used to enhance the comparability of information between reporting periods (such as comparable sales), by adjusting for non-recurring or uncontrollable factors which affect IFRS measures, to aid the user in understanding the Woolworths Group’s performance. Consequently, non-IFRS measures are used by the directors and management for performance analysis, planning, reporting and incentive setting purposes and have remained consistent with the prior year.

The key non‑IFRS measures used in describing the business performance include:

  • Earnings before interest, tax, depreciation and amortisation (EBITDA)
  • Cost of doing business
  • Fixed charges cover ratio
  • Return on funds employed and lease adjusted return on funds employed
  • Earnings before interest, tax, depreciation, amortisation and rent (EBITDAR)
  • Comparable sales
  • Significant items

Non-IFRS measures used in describing the Balance Sheet (or ‘Consolidated Statement of Financial Position’) and cash flow statement (or ‘Consolidated Statement of Cash Flows’) include:

  • Funds employed
  • Net assets employed
  • Cash flow from operating activities before interest and tax
  • Free cash flow
  • Fixed assets and investments
  • Net repayable debt
  • Cash realisation ratio
  • Net investment in inventory
  • Free cash flow after equity related financing activities
  • Net assets held for sale
  • Net tax balances
  • Other financial assets and liabilities

The above non-IFRS measures have not been subject to audit or review.