26November2015
AGM2015–Chairman’sAddress
CanIstartbyacknowledgingyourdisappointment,andours,atwherewefindourselves.The
resultsfor2015werefranklyunacceptable,andthedisappointingsharepriceperformancehas
reflectedthis.Theentireseniorleadershipgrouptakesresponsibilityforthepoorresults,and
theCompany’smostseniorleaders-RalphWatersasChairmanandGrantO’BrienasCEO–
havesteppedasidetomakewayfornewleadership.NowIfeelisthetimetomoveon,aswe
cannotchangethepast,butwemustlearnfromit,andurgentlyaddressthefuture.
WhilstIonlyjoinedtheBoardrecently,IhavebeenservingWoolworthsasasuppliersince
1987,soIthinkIhaveaninformedperspectiveonthebusiness.Ihaveseenthegooddays,and
thenotsogooddays.
Buttodaywefindourselvesinaverydifferentposition.Iamconvincedthatwhilstthebusiness
hasstalled,itcanbereturnedtothosegreatdays.Wehavemadesomemistakes,
acknowledgedthosemistakes,publiclylearnedfromthem,andnowaregoingaboutfixing
them.Butthiswilltaketime,andweasaBoardandmanagementteam,willnotberushedto
quickfixes.Thepotentialinthisorganisationisimmense,butweneedtobeclearonourgame
plan.
Andinordertointegratethisintothebusiness,weneedtochangefromaknowingculturetoa
listeningculture:listeningtoourstorestaffastowhatwecoulddobetter,listeningtoour
customersonwhetherweprovidevalue,andlisteningtooursuppliersonhowweimprovethe
partnerships.
Thisculturaltransformationisfundamentalandwillensurethatthestrategiesandprograms
weimplementwillstick.
Wecontinuallyreviewourportfolioofcompaniesandassets.YourBoardisveryfocusedright
nowoncapitalallocation–makingsurewedothisproductively,tobalancetheneedsofthe
businesswiththereturnstoshareholders,whichweknowareespeciallyimportanttomanyof
you.
Inadditiontothiswehavethreeimmediateandurgentpriorities.
Announcement
Weneedtorestorethecultureofcustomercentricity,whichwasourhallmarkforyears.The
mostimportantpeopleinourbusinessareourfrontlinestaff,fortheyinteractwiththe
customersonadailybasis.Theyknowwhatweneedtodobetter,andwemustlistentothem,
andempowerthemtoact.
Firstly,wehavetoreinvigorateourSupermarketsbusiness,whichis70%ofourprofit.Toensurewe
arecompetingvigorously,BradBanducciandhisteamhavebroughtourpricesdowntobe
competitive,and,asaBoard,wehavebeenpreparedtoinvestover$300millioninpricetodate.We
haveimprovedtheservicelevelinstoresbyaddingstaff,andensuringavailability,andareupgrading
thelookandfeelofstores.Butagainwehavetobepatienthere.Customerswhoabandonedus
becausewewereuncompetitivewillnotsuddenlyswitchback,andlayingdownourfuturepathway
willnothappenovernight.
OursecondpriorityhastobeMasters.Theopportunityinhomeimprovementsiscompelling.Itisa
growingmarket,withahighdegreeoffragmentation.Thereisplentyofroomforastrongnumber
two.Wehaveidentifiedourcompetitiveadvantage.Butexecutionhasletusdown.Anditisclear
thatwecannotaffordasabusinesstocontinuelosingover$200millionayear.WhenIjoinedIsaidI
hadanopenmindonMasters,andthattheBoardwouldbeinformedbythenumbersfromthefive
yearplanandouroptionsfromthat.ThisiswhatweasaBoardareworkingon.
ThethirdpriorityisBIGW.Itismakinghalftheprofititwasfiveyearsago.TheDiscountDepartment
Storesectorisrapidlychangingandishighlycompetitive.Butwehavenothelpedourselveswithour
valueproposition,someexecutionissuesinIT,andalackofleadership.Withgoodleadershipin
place,thereisaclearpathtoimprovereturnsandprovideuswithmoreoptionsgoingforward.
Soletmemovenowfromourtopthreeprioritiestogovernancematters.
OurfirstjobhereistofindareplacementCEOfortheGroup.Iamcurrentlyinterviewing,butthe
Boardwillnotberushed,aswearebeingparticularlythoughtfulandcareful.Inthemeantime,Ihave
tosaythatGranthasbeeninvaluableinprovidinguswithwisecounselanddeepexperience.Heis,
ineverysense,theCEOandheisfullyactiveinthebusiness.Hehassixkeyprioritiesthathewill
sharewithyoushortly.
WehavealsomadechangesattheBoardlevel.RalphWaters,DaveMackayandChristineCrossall
announcedtheirretirement,andIwanttothankthemfortheircontributionovermanyyears,and,
recently,duringadifficulttime.
OurprocessofBoardrenewaliswellunderway.Lastweek,weannouncedthatHollyKramerhas
agreedtojoinus.HollywasmostrecentlytheCEOofBestandLesswheresheledasuccessful
turnaround.PriortothatshewasadivisionalCEOatPacBrands,andalsoservedatTelstraandFord
MotorCompany.WearedelightedtoaddHolly’sretailexpertisetotheBoard.
WearewelladvancedinourdiscussionswithseveralotherpotentialdirectorsandIexpecttobe
abletoannouncefurtherappointmentstothemarketverysoon.
EarlierthisweekwealsoannouncedthatRogerCorbetthasagreedtojoinusasanadvisor.Roger
needsnointroductionfromme,andhisrecordatWoolworthsspeaksforitself.Wewillbenefit
immenselyasaBoardfromhisdeepexpertiseasaretailer,hisunderstandingoftheAustralian
market,andhisknowledgeofWoolies.
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Iamconfident,giventhechallengeswefaceoverthenextfewyears,thatwewillhaveaBoardto
providetheappropriateoversightofmanagement,andholdthemtoaccount.AndIamalso
confidentthatwesupplementthiswithRoger’swisdom.
Andsoinconclusion,ladiesandgentlemen,thankyouforyourpatienceandunderstandingoverthe
last12months.Wehavelearnedfromourmistakes,andarefocusedonthepriorities.Weknow
whatneedstobedone,andwearealldeterminedtoexecuteit.Wecannotpromisethatthepathto
achievingourfullpotentialwillbesmooth.However,Icanassureyouthatyouhavemy
commitment,andthewholeBoard’s,todoeverythinginourpowertoreturnWoolworthstoits
rightfulpositionasagreatcompany.
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