Coles Group (COL) investor relations material

Executive summary

• Group sales revenue rose 2.5% year-over-year to AUD 23.6 billion, with EBIT up 10.2% and NPAT up 12.5% excluding significant items, driven by strong Supermarkets and e-commerce growth, while Liquor declined.

• Supermarkets delivered EBIT growth of 14.6% and e-commerce sales surged 27%, now representing over 13% penetration.

• Customer satisfaction improved across all key metrics, and over 500 new exclusive products were launched.

• Liquor segment faced subdued market conditions, with sales down 3.2% and EBIT down 37.3%, but convenience formats delivered positive growth.

• Automation and AI initiatives delivered AUD 133 million in cost savings, supporting reinvestment in customer value.

Financial highlights

• Group EBITDA rose 7.8% to AUD 2.2 billion; NPAT (excluding significant items) increased by 12.5%.

• Supermarkets EBIT increased 14.6% year-over-year, with EBIT margin expanding by 55 basis points to 5.8%.

• Liquor sales revenue declined 3.2%, with EBIT impacted by AUD 13 million in one-off costs from store conversions.

• Interim dividend of AUD 0.41 per share declared, fully franked, with a Dividend Reinvestment Plan available.

• Operating cash flow (ex-interest and tax) was AUD 1.5 billion; cash realization ratio adjusted for timing was 94%.

Outlook and guidance

• Supermarket revenue in the first seven weeks of Q3 grew 3.7% (5.3% ex-tobacco), above market growth.

• Liquor sales decline moderated to (2.5%) in early Q3, with continued positive growth in the convenience portfolio.

• Full-year capital expenditure expected at approximately AUD 1.2 billion.

• Cash realization for the full year expected to normalize at 100%.

• The business expects continued benefits from automation and operational efficiency, but faces ongoing legal and regulatory uncertainties.