Coles Group (COL) H2 2024 earnings summary

Executive summary

• Achieved strong financial and operational results, advancing strategic priorities in automation, digital growth, and cost management, with value and loyalty offers resonating.

• Opened and ramped up four automated distribution and customer fulfillment centers, enhancing supply chain and e-commerce capabilities.

• Delivered highest-ever team member engagement and advanced sustainability and inclusion initiatives, with emissions down 1.5% from FY23 and 34.5% from FY20.

• Cost management initiatives delivered $238 million in benefits, with improved availability and loss reduction.

• Strategic investments included new automated distribution and fulfilment centres, milk processing facilities, and liquor store acquisitions.

Financial highlights

• Group sales revenue rose 7.6% to $43.6bn (5.7% normalised) compared to FY23.

• Group EBIT from continuing operations (normalized) rose 5.7% to AUD 2.1 billion; underlying EBIT up 7.3% to AUD 2.2 billion.

• Reported NPAT from continuing operations increased 2.1% to AUD 1.1 billion; underlying NPAT up 4.1% to AUD 1.2 billion.

• Operating cash flow reached AUD 3.6 billion with a 98% cash realization ratio.

• Fully franked total dividend declared at 68cps, up 3% year-over-year.

Outlook and guidance

• FY25 capital expenditure expected at approximately AUD 1.2 billion, including finalization of automation projects.

• ADCs expected to be fully ramped by Q3 FY25; CFCs ramping up with full benefits anticipated in FY26.

• Implementation costs for ADCs and CFCs to fall away in FY26, improving operating leverage.

• Supermarket sales revenue grew 3.7% in first eight weeks of FY25; liquor sales declined 1.4% (impacted by CrowdStrike outage).

• Focus remains on value, digital transformation, and unlocking benefits from new ADCs and CFCs.