Endeavour Drinks Group

TRADING PERFORMANCE

Endeavour Drinks Group (EDG) sales increased by 4.7% to $7,589 million in FY16 driven by an increase in comparable sales of 2.0% in FY16 resulting in an increase in market share. Our retail businesses (Dan Murphy’s and BWS) both recorded positive comparable growth for the year. Dan Murphy’s retained its market leading Net Promoter Score (NPS) with BWS also showing a strong improvement over the year. Sales per square metre increased by 0.7% driven by the increase in comparable sales.

Dan Murphy’s delivered another year of strong total and comparable sales growth with 11 net new stores opened during the year. Our execution around key events was strong and Dan Murphy’s online continued to deliver strong double digit sales growth. My Dan Murphy’s continued to grow and evolve with 1.7 million members by the end of the year.

BWS also reported positive comparable sales growth with an improving trend in the second half as we renewed our focus on value. We opened 56 new BWS stores in FY16 and closed 24 stores.

Gross margin increased by 43 bps to 23.41% due to better buying facilitated by strong volume growth despite price deflation during the year and negative category mix with beer and spirits outgrowing wine.

CODB as a percentage of sales increased by 53 bps reflecting the impact of costs associated with higher store numbers as well as an increase in team performance-based bonuses as we rebuild our team incentives. Excluding the increase in bonuses, CODB was well controlled.

EBIT increased 3.0% to $483.8 million in FY16.

1. In FY16, total significant items of $4,013.7 million before tax ($2,627.8 million after tax attributable to shareholders of Woolworths) were recognised. In FY15, total significant items of $425.9 million before tax ($307.3 million after tax attributable to shareholders of Woolworths) were recognised. Where noted, profit and loss items have been adjusted to reflect these significant items.