Wesfarmers (WES) H2 2024 earnings summary

Executive summary

• Net profit after tax rose 3.7% to $2,557 million, with revenue up 1.5% to $44,189 million and operating cash flows up 9.9% to $4,594 million, reflecting strong operational execution amid challenging market conditions.

• Retail divisions, especially Kmart Group, delivered strong sales and record earnings growth, while WesCEF earnings declined due to lower global commodity prices.

• A fully franked final dividend of 107 cents per share was declared, bringing the total for the year to 198 cents, up 3.7%.

• Continued investment in technology, digitization, and productivity measures supported performance and customer value.

• Progress made on key growth projects, including health and the Covalent lithium project, and a 5.4% reduction in Scope 1 and 2 emissions.

Financial highlights

• Revenue: $44,189 million (+1.5% YoY); NPAT: $2,557 million (+3.7% YoY); EBIT: $3,989 million (+3.3% YoY); EPS: 225.7c (+3.6% YoY).

• Operating cash flows: $4,594 million (+9.9% YoY); Free cash flows: $3,225 million (-11.1% YoY); Net capital expenditure: $1,040 million (-11.7% YoY).

• Net financial debt increased to $4,258 million; Debt/EBITDA: 1.8x; Return on equity: 31.3%.

• Full-year fully-franked dividend: 198 cents per share (+3.7% YoY).

• Cash realisation ratio: 105%; inventory health and stock turns improved.

Outlook and guidance

• Inflation and interest rates remain elevated, with cost pressures expected to persist into FY25.

• Kmart Group and Officeworks delivered sales growth in the first eight weeks of FY25 in line with or ahead of 2H24; Bunnings' growth moderated due to softer building activity.

• Covalent Lithium refinery expected to deliver first product mid-2025, with sales in FY26 after ramp-up and qualification.

• Net capital expenditure guidance for FY25 is $1.1–1.3 billion.

• Focus remains on long-term value creation, investing in existing businesses and growth platforms.