Wesfarmers (WES) H1 2025 earnings summary

Executive summary

• Revenue rose 3.6% year-over-year to $23.5 billion, with net profit after tax up 2.9% to $1,467 million, and EBIT up 4.7% to $2,299 million, despite challenging economic and retail conditions.

• Bunnings and Kmart Group drove growth with strong value propositions and productivity initiatives, while Officeworks and WesCEF also contributed positively.

• Portfolio actions included the sale of Coregas for $770 million, wind-down of Catch, and divestment of WesCEF LPG and LNG businesses to improve returns and streamline operations.

• Interim fully-franked dividend increased 4.4% to $0.95 per share, reflecting strong execution and focus on shareholder returns.

• Continued investment in digital, supply chain, and transformation activities, particularly in Health and OneDigital.

Financial highlights

• Revenue: $23.5 billion (+3.6% YoY); NPAT: $1,467 million (+2.9% YoY); EBIT: $2,299 million (+4.7% YoY); basic EPS up 2.9% to 129.4 cents.

• Operating cash flows declined 11.1% to $2,575 million, mainly due to higher tax paid and working capital normalization.

• Free cash flow for the half was $2,025 million, stable year-over-year.

• Gross capital expenditure up 2.9% to $594 million; net capex down slightly to $555 million.

• Net financial debt at $3,938 million; debt to EBITDA improved to 1.7x; cash realisation ratio at 108%.

Outlook and guidance

• Focus remains on long-term value creation, portfolio discipline, and investment in digital and omnichannel capabilities.

• Retail divisions expected to benefit from strong value credentials and expanding addressable markets; Bunnings, Kmart Group, and Officeworks maintain sales momentum into H2 FY25.

• Domestic cost pressures (labour, energy, supply chain) and FX volatility expected to persist, but productivity and technology investments to help offset impacts.

• Covalent lithium refinery commissioning on track for mid-2025; net capital expenditure for FY25 expected between $1,100 million and $1,300 million.

• Catch wind-down to benefit FY26 earnings; cost pressures expected to persist but mitigated by productivity initiatives.