WOOLWORTHS GROUP LIMITED — AGM Information 2019

Dec 15, 2019

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16 December 2019

ASX Market Announcements Office Australian Securities Exchange 20 Bridge Street Sydney NSW 2000

EGM Chairman’s Address and Presentation

Please see attached the Chairman’s address and presentation to today’s EGM Restructure Scheme meeting.

Marcin Firek Company Secretary Woolworths Group Limited

Woolworths Group Limited ABN 88 000 014 675

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Restructure Scheme Meeting (EGM) 2019 Chairman’s Address

International Convention Centre, Sydney Monday 16 December 2019, 10 am

At this EGM meeting we are seeking your approval for key aspects of the proposed internal Restructure of Woolworths Group to create Endeavour Group. This will allow combining the Woolworths Drinks Business and ALH Group in a single legal entity, in preparation for the subsequent separation of Endeavour Group through a demerger or other value accretive alternative.

The resolution requires approval by more than 50% of shareholders voting on the resolution, and at least 75% of the votes cast on the resolution.

Over the past three years, Woolworths Group has been simplifying its business portfolio. We have exited Masters, sold Petrol for $1.7 billion, and exited Ezibuy. Shareholders have benefited from this rationalisation with a total shareholder return of 64% over the three years to the end of June 2019. This transaction is the next stage in that journey.

By separating Endeavour Group from Woolworths Group, we believe both businesses will be able to focus on the changing customer needs and release the latent growth potential in both. Both businesses will have strong leadership positions in their respective markets, with balance sheets to enable them to capitalise on their growth potential. If the separation takes place by way of a demerger, Woolworths Group intends to maintain approximately a 15% shareholding in the new group.

What this proposal is not motivated by is Woolworths Group getting out of pokies and abandoning our commitment to the highest standards of responsible gaming. On the contrary, we are appointing a board and management, who believe and will commit to delivering on those standards.

To achieve this, we need to undertake a series of structural changes within Woolworths. Today’s Restructure Scheme Resolution is the first stage of the Endeavour transformation that will enable us to create Endeavour Group through the combination of our drinks and hospitality business, Endeavour Drinks and ALH Group.

The Restructure Scheme is subject to approval by Shareholders today, and by the Federal Court later this week. If approved by both, we intend to implement the Restructure in early February 2020.

Following this, we will seek to complete stage 2 in quick succession, being the ALH merger. Once implemented, this means that our joint venture partner, BMG, will own a 14.6% stake in the newly formed Endeavour Group.

Our third and final stage will be the separation of Endeavour Group by way of demerger or other value accretive alternative. Any separation is currently expected to take place in calendar year 2020. I stress, that any separation remains uncertain and should a separation proceed, we currently intend to seek Shareholder approval at an appropriate time in the future.

Today you are being asked to vote on the stage 1 Restructure Scheme Resolution. Importantly, the Restructure Scheme:

• Will not result in a change in the number of shares that you hold

• Will not cause any income tax consequences for you

• Will not negatively impact the ability of Woolworths to pay dividends

The Directors unanimously recommend that you vote in favour of this Restructure Scheme Resolution. Each Director intends to vote any Shares he or she holds or controls in favour of the Restructure Scheme Resolution.

Woolworths Group Limited ABN 88 000 014 675

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2019

Restructure Scheme Meeting (EGM)

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Proposed Restructure of Woolworths Group to create Endeavour Group

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Overview of Woolworths Group and Endeavour Group

Australia and New Zealand’s leading food and everyday needs business

Australia’s leading retail drinks and hospitality business

• Leader in e-commerce in Australia and New Zealand

• Focused on growing core food and everyday needs retail businesses

• Strong own and exclusive brands

• Multi-format retail brand proposition

• Highly integrated store-based and online offerings for a customer-centric operating model

• Strong, vertically integrated brands and production platforms

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 F19 pro forma revenue [1] $49.7B  F19 pro forma EBIT [1] $1,950M  F19 pro forma revenue [3] $ 10.3 B  F19 pro forma EBIT [3] $ 774 M
F19 pro forma EBIT by segment (continuing operations) [2]
Woolworths Drinks
Business
Australia New Zealand 43%
ALH Hotels
86% 14% ALH Drinks 34%
Business
23%
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Notes: 1. Woolworths Group revenue and EBIT from continuing operations before significant items (excluding Endeavour Drinks and Hotels revenue and EBIT). 2. EBIT by segment excluding central overheads. 3. Pro forma revenue and EBIT excludes Summergate. 4. Woolworths Drinks Business and ALH Drinks Business are together reported as Endeavour Drinks in Woolworths Group segment reporting. ALH Hotels is reported as Hotels in Woolworths Group segment reporting.

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The Endeavour transformation is expected to take place over three stages

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Stage 1 Stage 2 Stage 3
Restructure ALH Merger Separation
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			Stage 1 Restructure		Stage 2 ALH Merger		Stage 3 Separation
		•	Internal reorganisation of Woolworths		• Endeavour to acquire BMG’s interest in		• Separation of Endeavour Group from
Activity			Group to create a distinct legal entity,		ALH in exchange for issuing BMG with a		Woolworths Group via demerger or
			known as Endeavour Group		14.6% shareholding in Endeavour Group		other value accretive alternative
Purpose		• • •	To simplify Woolworths Group’s corporate structure To create a distinct legal entity To facilitate the ALH Merger and potential Separation		• To integrate the operations of the Woolworths Drinks Business and ALH Group • To facilitate potential Separation		• To create simpler, more focused, independent businesses ready for future growth
Expected timing		• •	To be voted on today Expected to be implemented 2 February 2020		• Expected to be completed 4 February 2020		• Expected to be completed calendar year 2020
			SUBJECT OF TODAY’S VOTE

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Stage 1: Restructure of Woolworths Group to create Endeavour Group

Advantages of the Restructure

Shareholder impact

• Enable a simpler corporate structure

• Create a distinct legal entity for Endeavour Group

• Better enable the ALH Merger and subsequent business integration

• Better enable Woolworths Group to pursue Separation of Endeavour Group

The Restructure Scheme will not:

• result in a change in the number of shares that you hold

• cause any income tax consequences for you

• negatively impact the ability of Woolworths Group to pay dividends

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The Directors UNANIMOUSLY recommend you
VOTE IN FAVOUR of the Restructure Scheme
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Disclaimer

This presentation contains summary information about Woolworths Group Limited (Woolworths Group) and its activities current as at the date of this presentation. It should be read in conjunction with Woolworths’ other periodic and continuous disclosure announcements filed with the Australian Securities Exchange, available at www.asx.com.au

This presentation has not been audited in accordance with Australian Auditing Standards.

This presentation contains certain non-IFRS measures that Woolworths Group believes are relevant and appropriate to understanding its business. Refer to the Full Year Profit/(Loss) and Dividend Announcement for further details.

This presentation is for information purposes only and is not a prospectus or product disclosure statement, financial product or investment advice or a recommendation to acquire Woolworths Group shares or other securities. It has been prepared without taking into account the objectives, financial situation or needs of individuals. Before making an investment decision, prospective investors should consider the appropriateness of the information having regard to their own objectives, financial situation and needs and seek legal and taxation advice appropriate to their jurisdiction. Past performance is no guarantee of future performance.

No representation or warranty, expressed or implied, is made as to the fairness, accuracy, completeness or correctness of the information, opinions and conclusions contained in this presentation. To the maximum extent permitted by law, none of Woolworths and its related bodies corporate, or their respective directors, employees or agents, nor any other person accepts liability for any loss arising from the use of this presentation or its contents or otherwise arising in connection with it, including, without limitation, any liability from fault or negligence.

This presentation may contain forward-looking statements including statements regarding our intent, belief or current expectations with respect to Woolworths Group’s business and operations, market conditions, results of operations and financial condition, specific provisions and risk management practices. When used in this presentation, the words ‘plan’, ‘will’, ‘anticipate’, ‘expect’, ‘may’, ‘should’ and similar expressions, as they relate to Woolworths Group and its management, are intended to identify forward-looking statements.

Forward looking statements involve known and unknown risks, uncertainties and assumptions and other important factors that could cause the actual results, performances or achievements of Woolworths Group to be materially different from future results, performances or achievements expressed or implied by such statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date thereof.

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