Woolworths Group Limited (WOW) Earnings Call Transcript & Summary

Good morning, everyone. I'm Scott Perkins, the Chair of Woolworths Group. I welcome you to the 2024 Annual General Meeting of Woolworths Group and look forward to engaging with you during the course of today's AGM. I would like to welcome Trevor Eastwood and Jason Douglas from DelMari to our AGM and thank them for joining us today. I'd like now to hand over to Trevor and to Jason.

[Foreign Language] means hello, good to see you, friends. My name is Trevor Eastwood. I'm a proud [ Dharug ] man, and we've got Jason Douglas. I'm very fortunate, my father -- Uncle Danny Eastwood. He's a local Older. And now normally, he would do a Welcome to Country. But -- He's given me permission to welcome you on to the country. Now we've walked these lands, on Dharug Land for thousands of years. We now all walk as one. So it's a good way to come together and share this beautiful land and work together towards reconciliation. So on my father, Danny Eastwoods behalf. I'd like to welcome you all the way to the tops of the treetops. I'll welcome you down to the deep roots of the ground. I welcome you into all the life-giving waterways. But most importantly, I welcome you under the stars, which our ancestors watch over us. So on behalf of the Elders Group, welcome, welcome, welcome on to Dharug Land. Now you've been welcomed on the Dharug Land. We become custodians. We never own the land, but it was our job to care for the land. So while we walk on Dharug land, it's important to care for country, but for care for each other while we're on this land, on this journey together. So once again, welcome on to Dharug Land. I want to pay my respects to all the Elders past and present. I want to pay my respects to any emerging Elders that are here, but most importantly, I want to pay my respects to you guys because, we've all shared journey and we're all in this together. And a little side note -- I said we work with Dalmarri. We've had probably about a 14-year relationship with Woolworths, and they gave us our first start from the very beginning. We started off in their garages. And now because of that start Woolworths gave us, we own a factory, we've got about 6 different employees. And we see first -- the media really hop on all the negative stuff, but we see firsthand the good work that Woolworths do and the rippling effect that can have across Australia, particularly in employment and just in closing the gap. We work with the Resourcing the Future program. We're heavily involved as mentors, traveled all across Australia and seen some really good outcomes through employment. We recently started up our own art gallery, and artwork. And as you walk around the building, you'll see lots of -- lots of our artwork throughout the building. So I always say, I'll put my hand on my heart, a big [Foreign Language] in Dharug [indiscernible], means thank you from the heart for all the support that you give small businesses and the opportunities that you arise. So once again, welcome on to Dharug Land. Thank you.

Thank you, Trevor. And also to Jason, we're very pleased to be meeting here, and thank you for joining us today. I also acknowledge the traditional owners of Dharug country and pay my respects to Elders past and present, and to any Aboriginal Torres Strait Islander people here or online today. Turning to today's AGM. We are pleased to offer Woolworths Group shareholders the option of participating in today's meeting in person and online. Our group Company Secretary has informed me that a quorum is present, so I declare a 2024 AGM open. For those in the room, I'd like to first outline the emergency procedures for this venue. Please take a moment to identify the emergency exit closest to you. In the event of an emergency, one of two alarms may sound. The alert alarm is a series of warning beeps. If this alarm sounds, please stand by for further instructions from the wardens. If the evacuation alarm sounds, a whooping alarm, all occupants will be directed by the wardens to leave via the nearest emergency exit and quickly and calmly to make their way to the assembly area. This is located through reception leading to our on-ground car parking. Once there, please remain at this location until Woolworths Group team members advise you it is safe to return to the venue. If we are required to evacuate, please leave your voting handsets and smart card on your chair. I would now like to introduce my colleagues on the stage today. Starting on my right, our Managing Director and CEO, Amanda Bardwell; Philip Chronican, Non-Executive Director; Chair of our Risk Committee. Philip is standing for reelection at this meeting, and will address the meeting later today. Warwick Bray, Non-Executive Director and Chair of our Audit and Finance Committee; Holly Kramer, Non-Executive Director; and Chair of our Sustainability Committee; and Jennifer Karsmith, Non-Executive Director. Starting on my left is Dom Millgate, our Group Company Secretary; Maxine Brenner, Non-Executive Director and Chair of our People Committee. Maxine is standing for re-election at this meeting, will address the meeting later today. Tracy Fellows, Non-Executive Director; and Kathy Tessa, Non-Executive Director. Also in attendance today is Tom and Besse, the company's lead audit partner from Deloitte and members of the Woolworths Group executive team. I will now talk through the procedural matters relating to this meeting. Instruction to help you navigate the online platform are available in the Notice of Meeting and in the online portal guide, both of which are available on our website. The Notice of Meeting sets out the business of the meeting and explanatory information for each resolution, and I propose to be taken as read. If you have trouble using the online platform, please contact Lumi on the phone number showing on the screen of your webcast. If we experience significant technical issue or if we are required to evacuate the building, I will suspend the meeting until we are able to recommence or if we are unable to recommence within a reasonable time, I will adjourn the meeting for another day and time. We will provide shareholders with details of any adjournment via the ASX and our website. Those of you participating online today will see a split screen with instructions on the left and the broadcast and presentation slides on the right. You can maximize the broadcast window by clicking on the full screen icon on the top right-hand side of the window. To vote at today's meeting, you need to be registered as a shareholder. This includes body corporate representatives and attorneys or as a proxy. We will vote on each resolution by way of a poll, which will remain open until the conclusion of the final item of business. The final votes For and Against each resolution will be released to the ASX after the meeting is closed. For those participating online, you can vote by clicking on the voting tab at the top of the screen, which will open a list of all solutions and the voting options. You can vote For, Against or Abstain, by selecting the option for each resolution once the poll is opened. If you have multiple holdings, you will need to log in separately with each individual holding to lodge your votes. For those in the room, eligible to vote, votes will be submitted using electronic voting handsets. I'm sure everybody in the room is well accustomed to using the handsets. However, if you have any issues, or you are voting and you do not yet have a handset, please raise your hand now and one of the LUMI registry assistants will help you. If you have not already done so, please insert the smart card into the top of the handset with the bar code at the bottom facing towards you. Your name should now be displayed across the top of the screen of your handset. To vote using our handset select 1, to vote For, 2 to vote Against, or 3 if you wish to Abstain from voting on any resolution. Confirmation that your vote has been received will appear on your handset screen. Your vote is automatically counted. You can change your vote any time while the poll is open. If you wish to cancel your vote and have no selection recorded, press the X button. Only shareholders or proxy holders may ask a question or make a comment during today's meeting. I ask that all questions or comments are directed to me. I may also direct questions of a more detailed nature to the CEO, Amanda Bardwell; or the CFO, Stephen Harrison or any other lucky members of the executive team. To allow us to work through the questions and give shareholders an opportunity to voice the largest range of questions, I have asked moderator to take the following steps for the smooth functioning of the AGM. Firstly, shareholders who have not already asked a question on the relevant item of business will be prioritized. Secondly, if we receive multiple questions via the online portal that are largely identical, One of these questions will be read and the related questions answered together. Finally, we will conduct the meeting in a responsible manner, and ask that shareholders are respectful when asking questions as we will be when answering them. There are two ways to ask questions. In the room by using a microphone in the auditorium or online by submitting written and audio questions via online platform. For those attending in person, please see the attendant at the microphone nearest to you. We have two fixed microphone stands in the middle of the auditorium for ease of access. In the interest of giving all shareholders a fair opportunity to have their questions addressed. I ask all shareholders please ask one question at a time. If you have additional questions, there will be an opportunity for you to ask them once other shareholders have had the opportunity to speak. If you're asking your question as a representative of an organization or a group of shareholders, please include that information in your question. To submit a written question of the online portal click the messaging tab at the top of the screen, type out your written question and select the Send icon. To submit an audio question via the online portal select the Home tab and follow the asking audio questions, instructions. Enter the requested details and click Submit Request to join the audio questions queue. Shareholders will be able to listen to the meeting while waiting to ask the question. If you do have questions, I encourage you to submit them as soon as possible. A member of our internal communications team here at Woolworths will read aloud the questions in the meeting. I will deal with questions in accordance with the item of business they refer to. Every year, we receive a number of questions about individual customer service, product or store-related matters. For those in the room, you can speak with one of our customer service team members in the foyer area after the meeting finishes. For those of you online, if you submit a question about an individual customer or administrative share registry matter. I've asked the team to inform you that the best way to get resolution of your matter is through our customer service channels or through the share registry. Those contact details can be found in the Notice of Meeting and also on the Woolworths Group website. Now ladies and gentlemen, and fellow shareholders on to my address as Chair of Woolworths Group. I am honored to address you at our AGM today with this year marking the Group's 100th anniversary in 35 days on the 5th of December. Having grown from humble beginnings, as Woolworths stupendous bargain basement to a group of iconic retail brands, we are proud today to serve across communities in Australia and New Zealand. I hope you got the opportunity to view some of the displays on the way in today and the chance to read some of the great stories over the long and proud history of our business. For my address today, I will start with a summary of the group's performance for the 2024 financial year, including the challenging customer and macro environment. I will also cover the key areas of focus for the Board in the year, including team safety, Amanda's appointment as our CEO and updates to our sustainability ambitions. I also look forward to the opportunity to meet many of you and address questions from shareholders during the course of the meeting. Woolworths Group's performance during 2024 financial year reflected the challenging operating environment as the cumulative impact of high inflation since 2021 drove real cost of living pressure for our customers. While food inflation has not been out of line with other goods and services in Australia and indeed below many other OECD countries, the more regular and controllable nature of food and everyday needs purchases, has placed greater pressure and increased scrutiny on those categories as customers sought to balance their budgets. Pleasingly, we saw a recovery in both customer metrics and trading performance in Q4. The positive momentum in sales has continued into the first quarter this year, as our teams focused on improving in-store execution and delivering even more value for our customers. Normalized group sales for FY '24 increased by 3.7% and with sales growth slowing in the second half of the year due to moderating inflation in our food business and weak consumer sentiment impacting discretionary spending, which was felt most acutely in BIG W. Normalized group EBIT increased by 1.1% compared to the prior year and group NPAT before significant items declined 0.6%, reflecting higher finance costs and tax expense. The group's financial performance, however, in FY '24 fell short of our expectations. However, the fundamentals of our group remains strong. The investments we have made in building a leading digital, rewards, retail media and e-commerce platform, the years of investment into improving the efficiency of our supply chain, the opportunities available in PFD are now wholly owned food service business, these are all distinctive competitive strengths. These complement the backbone of our business our store network, which delivers the convenience and the customer service experienced by more than 25 million customers each week. There are, however, some areas of underperformance and addressing these is a matter of utmost focus for the Board and Amanda. You should expect to see even greater emphasis on in-store execution, improving availability, the positioning of our own brands, the quality of our fresh produce, alongside a concerted effort to simplify our operations. We also need to deliver on the benefits of the adjacent businesses that complement our food business. In particular, we have transformations in flight in New Zealand and BIG W. The early results from New Zealand are encouraging. Progress in BIG W is slower, given the market dynamics and more discretionary nature of general merchandise. We are also excited about the prospects of better meeting our customers' everyday pet needs working alongside the founders of Pet stock Group, in which we acquired a 55% interest during the year. As a result of the challenging trading conditions and our overall performance. The short-term incentive payout this year reduced to 51.3% of target or 34.2% of maximum, and the long-term incentive award had a nil-vesting outcome this year, reflecting the outcomes for relative total shareholder return, return on funds employed and reputation. These were below our expectations but we're aligned with the experience of our shareholders. I would also like to address the current regulatory environment. The dramatically changed political and economic conditions have led to increased regulatory oversight of Australian supermarkets. Woolworths Group participated in a number of government inquiries during the year, including the ongoing ACCC supermarkets inquiry and the Food & Grocery Code of Conduct review. A number of our shareholders have expressed both support for the company and their frustration at the relative merits of some of these inquiries. Many of you here today here today and indeed, many of our team working in our stores every day, look at some of these allegations and ask questions. Public opinion on these matters can shift quickly. Our approach is to calmly and methodically address these issues, present the evidence and pursue all options that give us the best possible opportunity for reasoned outcomes to prevail. Woolworths Group is not perfect, and I'm sure we will learn things from some of these inquiries. But we remain firmly supportive of our teams and their conduct and the customer-first culture that so strongly underpins Woolworths Group today. Specifically, we were disappointed with the ACCC's announcement to commence proceedings. And while we disagree with their assessment that the price dropped program was misleading, we are committed to working constructively with them. I want to stress that we take our responsibility on pricing very seriously, in line with our Australian consumer law compliance efforts. We track our price competitiveness closely, and we know that our customers do as well, and have more choice than ever. If we don't offer great value alongside quality, range and convenience, customers will choose to shop elsewhere. We are reviewing the ACCC's interim report into the grocery sector that was released last month, in detail. We will provide further submissions and appear at the appropriate public hearings over the coming months. We are reminded every day that the Australian grocery sector has never been more competitive. We line up next to some of the most accomplished global and local retailers many of whom were not present in grocery categories in 2008. Ladies and gentlemen, we are up for that challenge. And we believe what -- we have what it takes to compete vigorously and sustainably. However, we know that customer trust in our brand has been impacted, and we have work to do to restore this trust. Turning now to our team. At last year's AGM, I spoke about our commitment to team safety, including contractors and customers in the context of the tragic circumstances of 2 workplace fatalities in FY '23. At the 2023 AGM, we received a first strike against the remuneration report. Some shareholders felt that the safety metric should have had a fatality gateway and that the reduction in FY '23 STI outcomes did not sufficiently impact executive incentives. For FY '24, after consultation, the Group's STI scorecard has been updated to include a fatality gateway for the safety component and to reintroduce TRIFR to complement the existing severity rate to emphasize the importance of safety in our business. We are pleased with the broad base of support we have received from shareholders in response to these changes. We also committed to consider whether any further adjustments to FY '23 STI outcomes were appropriate once all relevant investigations were complete. The regulatory investigations are expected to be completed by the end of FY '25, at which point the Board will reconsider these issues. While severity rate improved in FY '24 due to fewer severe injuries and improved reporting, our total recordable injury frequency rate deteriorated due to an increase in medical treatment and restricted work cases driven by manual handling injuries. We have comprehensively reviewed our safety strategy. This has resulted in significant investment in safety, health and well-being teams to strengthen our ability to drive reductions in our most frequent injury types. We expect these combined efforts to improve our work practices and will lead to safer and better outcomes. I would now like to focus on Amanda's appointment as Woolworths Group's 13th CEO. In February of this year, Brad Banducci announced his attention to retire as Managing Director and Group CEO after 13 years with Woolworths Group and over 8 years as CEO. I want to take this moment to acknowledge Brad's enormous contribution to the Group. Brad has engendered a culture of putting our customers and team first, built market-leading digital, eCommerce and analytics capabilities which will position the group well for many years to come. Most importantly, he's built a high-caliber team. Woolworths Group has been fortunate to have had Brad as leader and he has indeed helped us be better together. Managing CEO succession as one of the most important tasks for a Board. We refreshed our future CEO criteria in 2022 and work closely with our team on their development. In the middle of 2023, the Board commenced formal planning for CEO succession and work with advisers to conduct an extensive search, which included international candidates alongside our internal candidates. We were thrilled to announce the appointment of Amanda Bardwell as Brad's successor. Amanda has been with Woolworths Group for 23 years and commenced as CEO a little over a month ago on the 1st of September. The Board is confident Amanda is the right person to lead the group as a proven people leader, business builder and modern retailer. I know Amanda will live our purpose and work hard to achieve Woolworths Group's full potential. Moving now to the group's sustainability agenda. As a food retailer, we are working to promote sustainable food production in the years ahead, by reducing the impact of our business on climate change and nature loss. We have evaluated the impact of various climate change scenarios on our business and the food and supply chain. It is clear that unmitigated, the effects of climate change will expose all of our stakeholders to the risks of higher prices and disrupted supply chains. As part of this year, we updated our Climate and Nature Scope 3 strategy, including reviewing our Scope 1 and 2 and 3 emissions. Reductions targets in line with validation from the science-based targets initiative, or SBTI, and its forestry land and agriculture guidance, all consistent with a 1.5-degree pathway. We recognize the importance of working collaboratively with our suppliers and other supply chain participants in managing the transition towards our Scope 3 ambitions and appropriate responses to SBTI's flag deforestation guidance. In the year, we achieved a 42% cumulative emissions reduction from our original 2015 levels which is on track to reach our existing 63% reduction in Scope 1 and 2 emissions by 2030. This was supported by an increase in green electricity usage, solar units and the adoption of electric home delivery vehicles. While our ambition is not without challenge, as a group, we are committed to work on emissions reductions and opportunities and invest in innovative solutions. I would like to take this opportunity to address the shareholder resolutions that will be put to the meeting later today. The resolutions relate to farm seafood from Macquarie Harbour and Tasmania and propose the reporting of farm seafood on threatened species and ceasing the procurement of own brand Salmon by the end of April 2025. The Board does not support the proposed resolutions, and I would like to explain why. We take these issues very seriously and are actively engaging with a broad range of interest groups and stakeholders to inform our decisions and our actions. The issues surrounding salmon production in Macquarie Harbour are complex with a range of direct and indirect environmental, industry, social and economic factors to consider. We believe that an evidence-based approach is important in the collective efforts to secure the future of the Maugean Skate. We support the approach being led by State and Federal Governments on this issue. We believe it's not only prudent, but critical that we await the outcome of the Federal Government review and the scientific research currently underway. We understand that oxygenation and captive breeding initiatives led by the Institute for Marine and Antarctic studies are showing early positive results, but we will continue to monitor the outcomes of these projects. Responsible sourcing of seafood is important to our business and underpinned by our seafood sourcing policy. Our policy requires all own branded seafood sold in Australia to be third-party certified or independently verified as ecologically responsible. As third-party certifications develop over time, we continue to work with our suppliers to adopt higher standards. We acknowledge our shareholders' response to our disclosure on this issue. We are committed to providing appropriate transparent reporting to our shareholders and other stakeholders and will include appropriate information in future reports. In closing, I want to thank all of our hard-working teams for their commitment to Woolworths and serving our customers. While our operating environment remains uncertain, your Board is reassured by Amanda's new leadership, her clear plans and the underlying health of Woolworths Group. We will be relentless in providing value for our customers and supporting our team across the group. We are addressing rapid changes in trading patterns and associated margin impacts. However, we have well-developed performance improvement initiatives in flight and will increase our productivity ambition through 2025. As I mentioned at the outset, the fundamentals of our group are very strong, and we are energized by the opportunities that lie ahead of us. Woolworths Group is at the heart of nearly every community in Australia and New Zealand. We look forward to the future with a sense of both responsibility and optimism guided by the potential of working together for a better tomorrow. Thank you, and I now invite Amanda to address the meeting.

Thank you, Scott, and good morning, everyone. I also acknowledge the traditional owners of Dharug Country and pay my respects to elders past and present and any aboriginal or Torres Strait Islander people joining us today. It is a privilege to be with you all today at my first AGM as CEO of the Woolworths Group in the group's centenary year. Today, I want to speak to you about this great company and in particular, the achievements of our team and my focus areas for the year ahead. I also want to take the opportunity to recognize and thank our former CEO, Brad Banaducci, who retired at the end of August. But first, as your new CEO, I'd like to introduce myself. I have spent my entire career in retail, more than 35 years and began working in the industry when I was 14 years old. My first job was working at a local food store in suburban Brisbane. My motivation was to save money for a car, and I realized pretty quickly how much I enjoyed retail. I joined Woolworths Group 2 decades ago and worked my way through supermarkets to run some of our liquor businesses. And more recently, I've led WooliesX, our digital, eCommerce and loyalty business. Today, I am humbled to be leading Woolworths Group. I am passionate about retail as I was when I started and our customers and team remain at the heart of our business. Serving our customers is our privilege and not one that I take lightly. Every day, our customers make choices. Now more than ever, they have a wide variety of options in how, where and when they shop. I am acutely aware of the pressure on Australians families as a result of cost of living increases and delivering meaningful value is our key priority. Price is important, of course, but value is more than price alone. It is about ensuring we provide consistently good shopping experiences every time our customers shop with us. This means getting the fundamentals right by providing customers with the best value, availability, range, whilst also enabling convenient and connected ways to shop. I also want to acknowledge the increased regulatory scrutiny in the food and grocery sector over the last year. We have openly and constructively participated in a number of inquiries and reviews and we've appreciated the opportunity to explain how we are working to balance the needs of all of our stakeholders. To that end, we will continue to work constructively with the ACCC and others, focusing now on our efforts to deliver for customers in F '24. During the year, we took steps to address the areas that matter most to customers. These included making our price ticket and unit prices easier to read, and we continue to grow our own brand range to create affordable quality products that provide on average, a saving of around 30% to branded equivalents. We provided customers with a range of digital tools, including shopping lists, best unit price filters, recipes and catalogs to help them plan and shop. And we'll continue to enhance these in the year ahead. Importantly, for customers, inflation in our food businesses and BIG W moderated significantly through year as supplier cost price increases reduced and we passed lower prices to customers. Turning now to our team. As I mentioned, I have worked at Woolworths Group for most of my career, and I've been fortunate to be part of this incredible team in a number of different roles. A century after we opened our very first store Woolworths Group is now one of the largest employers in Australia and New Zealand with over 200,000 team members. I'm so proud and dedicated of our hard working team. Keeping our customers and our team and our contract is safe is our primary responsibility. Our commitment is to ensure every team member goes home safely. So I was disappointed in our safety outcomes last year. In response, we have updated our safety strategy, enhancing our safety, health and well-being teams providing new training to address risks like plant and vehicle-related incidents and strengthened the link between safety outcomes and our leaders short-term incentive payments. To address the impact of cost of living pressures for our team, we've made meaningful investments in our team benefits program and ensured salaries and wages kept pace with rising inflation. We've continued to focus on providing our team with meaningful careers and transforming our team proposition. Our multiskilling program has supported our team and their earning potential through upskilling across a number of different departments to provide them with access to more shifts across the store. 2025, is the final year of our current sustainability plan. As a large business and employer, we recognize the important role that we play in driving positive change. In F '24, we delivered more than $500 million in net societal benefit, including $143 million in direct contributions to the community. We provided 36 million meals to those in need and $15 million in financial support to our food relief partners, including OzHarvest, Foodbank, Fareshare in Australia and Kiwi Harvest and The Salvation Army in New Zealand. In Australia, the Group's support through Australian National Disasters Program helped local communities impacted by natural disasters, including Cyclone Jasper in Queensland, flooding in Victoria and fires in Western Australia. We launched our much loved Mini Woolies program in New Zealand and expanded the program to every Australian state and territory, providing hands-on learning experiences for students and job candidates with disabilities. Today, we have more than 80 sites and 5,800 students have completed the program since it launched. Turning now to some of our key strategic initiatives in the year. Despite the challenging operating environment in F '24, we continue to make progress on our everyday retail strategy. Our food business remains the cornerstone of our group, but our growing adjacent businesses and complementary services like e-commerce and retail media as well as investing in specialty businesses like PFD and PetStock. We aim to meet more of our customers' everyday needs and create value for the group. Digital is the virtual front door to our stores. Incredibly since January, weekly visits to our digital platforms, including our apps and websites have exceeded the number of transactions in our physical stores. In F '24, average traffic to our group digital platform was up 20% year-on-year. Strong digital and eCommerce growth was a key highlight with half of last year's sales growth driven by eCommerce sales, which increased by 18.5%. Convenient, same-day delivery options continued to grow strongly with 86% of eCommerce orders now fulfilled within 24 hours, supported by increased capacity and investment in our network. Our Everyday Rewards member base grew strongly with more than 770,000 new members joining the program during the year. And in this quarter, active members have exceeded 10 million. I'm also delighted that Everyday Rewards is officially a trans-Tasman business meaning we're able to deliver more benefits for our Kiwi customers. Our supply chain transformation continues to progress with several major automation projects near completion including a customer fulfillment center in Auburn and a regional and national distribution centers at Moorebank. These will materially improve the experience for our team while at the same time, improving efficiency. We continue to see increasing contribution from our retail platforms and adjacencies. Our Retail Media business, Cartology has grown rapidly since it was established in 2019 and is delivering EBIT growth and valuable media inventory for the group. The group's analytics platform Wiq is also delivering material benefits across the group through its high-value use cases and tools, which are providing actionable data-led insights to drive operational efficiencies and productivity. Finally, in January this year, we completed the acquisition of the Petstock Group, helping our customers meet more of their everyday needs as part of our connected group. Yesterday, we released our sales results from the first quarter of F '25. We worked hard to deliver much needed value to our customers in the quarter. We offered our customers more value, increased shelf capacity to improve the availability of our own brands and made it easier for our customers to find the best unit prices. We also provided extra value through Everyday rewards and brought a little bit of joy to families through our first group-wide collectible campaign, Disney World of Wonder. Group sales increased by 4.5%, with solid item growth in our food businesses, along with ongoing strength in e-commerce. Australian Food total sales increased by 3.8% due to strong focus on value in the quarter, improved availability, Disney Collectibles and eCommerce sales growth of 23.6%. Australian B2B sales increased by 6.9% with PFD sales growth remaining strong at 8%. In New Zealand Food, customer scores improved further in the quarter, particularly in the key focus areas of value for money and fresh. Total sales increased by 2.7% due to item growth and strong eCommerce sales with momentum increasing as the quarter progressed. W Living sales increased by 17%, reflecting the acquisition of the Petstock Group in January 2024. BIG W sales were down 0.9% in the quarter with strong item growth being offset by lower average selling prices as we increased the range at our opening price points, lowered prices and customers traded down to more affordable options. We also provided an update on our earnings outlook for Australian Food business for the first half of F '25, which is forecast to be below previous expectations. As we focused on delivering more value to our customers during the quarter and building sales momentum, promotional activity in Australian Food increased as customers responded strongly to specials and, in particular, larger savings. While this has contributed to improved sales momentum, it has also led to a lower margin sales mix. Additionally, eCommerce growth has remained stronger than anticipated in the quarter, which has also impacted margins. While responding to customers' needs and maintaining our trading momentum remains our priority, we are taking steps to improve our financial performance. We are optimizing our commercial program to offer compelling value to customers while improving promotional effectiveness as well as uplifting our productivity agenda. In closing, I wanted to finish my address as I began with customers top of mind. As we look ahead, our priorities are extremely clear. We know we need to get it right for customers, rebuild trust and continue to put them first so that they continue to choose us. We need to continue building on the great strengths we have and remain focused on executing our trade plans. This means getting the basics right every day on value, availability, range, service and convenience. As we begin the run into Christmas, there is no better time to be in retail. And I'm energized by the plans that we have in place to help our customers through the Christmas and holiday season. Looking ahead, we are focused on unlocking the potential of the group, leveraging technology and AI to transform how we work and how our customers and members shop our brands. And we continue to look for ways to make it easier for our team to have an impact and to care for our customers. The operating environment remains challenging, but I'm confident that we have all the right building blocks in place. We understand the need to prioritize the areas that can deliver the most impact and simplify the way that we work to deliver strong, long-term sustainable value for our shareholders. I want to take this opportunity to thank our team for their incredible efforts during the year. I would also like to thank our customers for choosing Woolworths and giving us the privilege of serving them every day. Finally, I would like to thank you, our shareholders. for your continued support as we celebrate our centenary and look ahead to the future. I will now hand back to Scott. Thank you.

Thank you, Amanda. We will now turn to the more formal items of business for this meeting. But before I do so, I would like to acknowledge the presence in the room of a very distinguished and esteemed former Woolworths team member. And I pay no disrespect by calling Paul Simons the CEO from 1974 to 1980, the chair from 1987 to 1995, a proud Woolworths team member. Paul, I would just like to acknowledge your presence in the room and thank you for your incredible service and continued interest and dedication to what we do here in the company. Thank you, Paul. A living example of the longevity benefits of the fish food people, I think so, absolutely fantastic. The items of business for today's AGM are set out in the Notice of Meeting and will be voted on by a poll, which is now open. As set out in the Notice of Meeting, I intend to vote all open proxies in favor each -- of each of the Resolutions 2, 3 and 4 and against resolutions 5 and 6A, 6B and 6C. I remind shareholders that only resolutions 2, 3 and 4 to be voted on at today's meeting are supported by your Board. Our share registry, Link Market Services will act as returning officer for the poll. The first item of business is to receive the Financial Report and the report of the directors and of the external auditor for the year ended 30 June 2024. There is no vote on this item. A copy of these statements and reports was published in the 2024 Annual Report and sent to those shareholders who requested copies. Shareholders have also had the opportunity to view the statements and reports as well as the 2024 Sustainability Report on our website. I now invite comments or questions on the financial statements and reports. All questions to the auditor should, in the first instance, be addressed to me as Chair. And if appropriate, I will ask Tom and Besi to address the meeting. I will firstly deal with questions from the floor and then questions submitted online during the meeting. Are there any questions in the room?

Chair, I have a question from Natasha Lee.

Natasha, good to see you again.

I know you've been waiting for my question. I'd like to firstly thank the Board and the team for their efforts. I know that it's been a tough year as far as the trading environment. I suppose the first comment is the online layout of your Annual Report being double paged which for people like me trying to read it online is very annoying. So I'm not sure whether you could have either put it all on single page, so you can just read down or make two versions of those who've got giant screens to read everything at once. But it just saving me having to page across and then back up and down. So -- and especially as my eyesight is getting worse with age.

Thank you, Natasha. We'll take that request and go away and consider it. Because we probably have a competition between the two of us who's got the worst eye sight. But yes, it's difficult.

It's nice to have people have bad eyesight looking at these things because they you see the problems.

I understand.

The first question concerns, there's been a bit of an uptake in borrowings, which is partly expected because of your expansion and things like that. But also the increase in the interest payments whilst we're expecting interest rates to come down a bit in the future. So can you just talk about what are your plans and strategies? For managing the level of borrowings. Are you comfortable with the current level? are you planning to pay down? I suppose, tied up with that is there was an increase in derivatives, which was supposed to be hedging against interest rate as well as ForEx transactions. And I'm not sure to what degree since a lot of the borrowings seems to be on the floating exchange rates. What is the overall plan -- strategy as far as managing those interest rate costs?

Yes. So let me address a couple of different aspects in there. I think in an overarching sense, the balance sheet of Woolworths is strong, and we intend to keep it that way. When we're considering capital structure, we're always thinking about the level of free cash flow that comes out of the business, our reinvestment opportunities, which in recent years have been quite significant as we've been investing into supply chain, and making some carefully judged, but we think quite strategic acquisitions to build out our adjacency businesses and of course, maintaining an attractive dividend for shareholders. This year, we are obviously pleased to include the $0.40 special dividend as part of our distributions to shareholders. So when we look at balancing all of those factors, we think our capital structure is about right and the level of borrowings we're very comfortable with. It gives us room to maneuver. But we're also mindful of maintaining the optimal capital structure and not having too much financial slack in the organization. But at this point in time, we're very comfortable with our capital structure. You're right, the year-end variations of interest payments and the derivatives just reflected ordinary course of business, hedging activities on some borrowings that we undertook and just that slight movement in interest rates, but nothing untoward there.

Can I say -- I I've got a number of questions. Can i ask another quick question, if you don't mind?

Well, we did ask you to ask one -- why don't you come back and -- thank you, Natasha. Thank you.

Chair, I'd like to introduce Nathaniel [ Appel ] on behalf of Andrew [ Good ].

Thanks, Chair. So a great deal more attention has been to nature-related risks in this year's Annual Report compared last year, which is good to see. And I guess I'm interested in how far progressed Woolworths is in managing those risks? Noting that TNFD and reporting on TNFD is an ambition. And the first step in TNFD to locate potential impacts and dependencies on nature, and the scape which is coming up later as a good example, had Woolworths noted that there was a risk in Macquarie Harbour earlier, it might have anticipated how to manage those risks. So I guess the question is, to what extent has Woolworths located other potential risks from nature -- or to nature through its value chain -- through geolocation. I appreciate it's a challenge. And you're probably only partially there, but I guess how it progressed are you on that -- for example, know how much I don't know, sugar you get from the Great Barrier Reef catchment area for beef?

Shareholder, I think that's a terrific question. Thank you for that question. As you rightly point out, both from a financial reporting perspective and through our own internal focus and energies, we are embarking on a new chapter of elevated awareness as to the nature-based risks in our business. And if you look at our Sustainability Report, we called out the 6 areas of real sustainability impact we thought we could have going forward. And our contribution to nature-based solutions was one of those 6 priority areas. So it's certainly being recognized as such. Yes, we have started that process. I think it's still reasonably early days, but quite a lot of work has been done on infrastructure resilience and determining the impacts of climate on key food commodity groups as well as our physical infrastructure. So yes, we are starting to identify those food groups that might be more dislocated by various extreme -- more extreme climate scenarios. And we, of course, model a number of those scenarios through our supply chain to determine those packs. I think what you'll see going forward -- and by the way, I'll reserve a full answer to the issues of Macquarie Harbour when I think one of the members of 6, we're going to invite to address the meeting. I will reserve my answer to that point in time. But we do expect that we will discover further more of these issues going forward. I think it's absolutely inevitable. Of course, the big change this year was our decision to continue to be validated by SBTI in terms of our Scope 3 emissions. And that decision really drew us into being covered by their flag guidance because we, as an organization, are impacted by forest land and agriculture risks. So our Scope 3 emissions are now assessed under flag and a nonflagged basis, which has given us the opportunity to recast our Scope 3 aspirations in those two areas, 40% by 2033, 72% by 2050 and 55% for non-flag leading to 90%, again, in 2033, 90% by 2050. That is opening up, I think, a broad range of opportunities for discussions with our suppliers and our key commodity groups, which as you probably read no doubt in sustainability reporting includes pulp, paper and packaging, palm oil, cocoa, soybean for stock feed and critically fresh beef. And that process of engaging with our supply chain partners, with the industry in general, it's very much a shared endeavor because all of our major suppliers and the peak bodies in agriculture in Australia have Net Zero ambitions as well. So I think, hopefully, it's given you a reasonably full answer to how -- way we're thinking about it, looking to quantify it, our commitments to reporting on it. And I think governed by flag guidance, you'll continue to see elevated information as a shareholder.

Yes, I guess I'm I don't know how far progressed you are in anticipating the next scape risk? And I'm not here about this scape. I guess -- I am here broadly about that nature risk and process. So maybe you don't know how far along you are in terms of locating your interfaces with nature, but that's what I'm after, I guess, with the question.

And I think you'll hear more from us in the future. I think I've given you a sense for the work that's being undertaken in the preparation for that. But we're certainly not aware of any other species in an endangered classification, that is approximate to our operations. But I'm sure we'll continue to learn more about that as indeed will all of Australian business and society. Thank you for your question.

Chair, I have a question from proxy for shareholders, Sarah Walsh.

In 2024, as you mentioned, Woolworths announced a new target to eliminate deforestation from its supply chain, and in its 2024 Annual Report Woolworths states that the targets are based on information from and commitments by its suppliers. Has has Woolworths sought a commitment from its suppliers to provide data in relation to the production and supply of its products in accordance with the science-based targets initiative, forest land and agriculture guidance that you mentioned and the definitions in the guidance?

Thank you, shareholder, for the question. It's a very topical one and thank you for taking the time to read our Disclosure in our Sustainability Report. We -- in order to meet our Scope 3 targets and I'll talk -- come back to flag in a minute. We absolutely will rely on working very closely with our suppliers because our Scope 3s are pretty much their Scope 1 and 2s. And when we look at our -- through all our suppliers, and we've done all that analysis, the majority of them have actually quite well-developed plans. So yes, we will be working very closely with our suppliers in order to meet our Scope 3 targets. In respect to flag, flagged guidance being just to remind all shareholders, our Scope 3 emissions, which are those emissions that are not in our operational control. Scope 1 and 2 are in our operational control. Scope 3 are our supply chain, downstream and upstream. We are required to report on those, and we've chosen to report under SBTi. SBTi requires us to bifurcate those into flag and non-flag. Flagged are the five commodity groups that I referred to, and no deforestation applies to all of them. And at the moment, by the way, all our own brands are certified in respect of soy and palm oil has no deforestation. The big challenge, of course, is fresh beef. And I think we will be working closely with industry bodies over the next 12 months before the December deadline to develop a workable and just definition of no deforestation. Because at a high level, not destroying native forest or natural forest make sense to everybody. How that is implemented and the nuances of that definition is something that we are working on. Thank you, shareholder.

Thank you. There is just on your last point here, there is actually a definition of deforestation in the [indiscernible] guidance. So was interested to see whether Woolworths will stick to that definition in order to stick to its EBITDA target?

We are aware of that definition, and that's a good starting point to engage with the domestic industry on. So thank you for your question.

Chair, I have a question from Bonnie Gram.

Good morning. Great to see Woolworths is elevating deforestation risk in your recent report and specifically the updated targets around deforestation, free beef which is fantastic. But there are a huge range of other nature-related issues that are relevant with Woolworth's agricultural supply chains, including things like water use and chemical pollution and soil degradation just to name a few. So I'm really interested to know what are the nature-related issues Woolworths has begun to quantify in terms of risks, impacts, opportunities in dependencies? And also what specific value chains of commodities the company has identified as risk material regarding nature moving forwards?

Yes. Thank you for the question, shareholder. I do believe I've substantially answered that question. in the -- with the prior question that was asked, but I'll repeat the high points just as a matter -- out of due courtesy and respect. So we absolutely are working very hard in this new era. Bearing in mind, we are at the starting point of needing to disclose more on our nature-based related risks of identifying these various risks in our supply chain. And that work has started. I also, I think, mentioned what our five key high-risk commodities were and they pertain to pulp, paper, packaging to cocoa, to palm oil, to soy and stock feed and fresh beef.

I understand that they are for deforestation, but for nature risks more broadly outside of the deforestation.

Yes, again, early days on identifying those risks and I think you'll hear more from us going forward in our Sustainability Report.

Chair, I have a question from Robert Caterson.

It's good to be back at Woolworths shareholders' meeting, and congratulate you on your appointment and your appointment to Amanda. The first point I want to make is -- we still haven't seen any radical reduction in the use of plastic packaging. That's one point. The second point is, I've been to my local supermarket and Amanda made the point of about unit pricing and price ticketing and that. I too like our colleague here have a bit of sight impairment. And I can't read them compared to the other ones. There are too dark, they're very bad in contrast. And the next point I want to make and maybe Amanda or yourself, can enlighten us because we've had so much inflation, why is the cost of a lot of things supplied to us by major suppliers going up by probably 100% or 200% recently compared to the inflation rate. And what is our buying practices and what is the influence we have on our suppliers? Or is this -- or is there some sort of -- maybe you don't know, is there any sort of collusion we have with suppliers and our competitors in buying product that we put on our shelves?

Well, let me take the last point first, there is absolutely no collusion whatsoever. But you raised three very good points there. So I'm clearly not being very effective with my one question rule in this AGM so far. But let me -- I'll answer through all three of your questions. The first question is in respect to plastic. We actually are making very good progress on plastic, but it's a huge task, 2,500 tonnes of plastic were removed last year from Woolworths supermarkets. We have stood up from scratch working with other industry partners, an industry trying to recycle flexible plastic after the collapse of red cycle. We've moved all of those -- that plastic that was not adequately stored into new premises. We've started trial plants in Tari, but it's a global challenge how to do this. But you're absolutely right to continue to hold us to account because in terms of sustainability, this is one of the areas where our customers expect us to do more and I think we can do more.

because we have got to get rid of it.

We've got to get rid of it. Absolutely.

[indiscernible] fruit and veggie, all. There's a lot of stuff in plastic, which could be lose anyway, and could be sort of sold at a more realistic price overall. Particularly people need, not sort of -- 10-kilo back of potatoes in a plastic bag.

Yes. What I'm particularly pleased with is the progress that our own brand business has made on packaging, which if I'm -- and Guy Brent will either nod in agreement or otherwise, is, I think, approximately 85% -- we've removed 85% of plastic out of nonrecyclable material out of all of our own brand goods.

Well, another thing to say your macro brand with meats are in paper right? But all the rest of them in plastic. So why can't that be sort of translated along to the whole range of meat.

Shareholder, you're absolutely right. I think we are making good progress. But there's more to do, and our shareholders and our customers want us to do more. And I think you'll continue to see us do more. But I do want to acknowledge the efforts that have been made to date. And that 2,500 tonnes last year was no mean fit. In terms of the ESLs, the electronic store labels, let us take that on notice.

It's not those ones -- that's the other ones you've replaced. Very bright looking and from my point of view, I can't see properly.

Okay. Let me take that on notice and we'll consider that. And Amanda will connect with Rob right afterwards.

Paper, special label was far more readable.

Right. And then the final question you asked -- this is a very important question is the issue of inflation. During the COVID period and after and into the Ukraine war, food price inflation globally sword. And you're absolutely right. The source of inflation and indeed, excluding our own brands, which, of course, we are subject to the same imports, all 260 instances of the prices dropped allegations made to us by the ACCC were for price increases initiated by suppliers. Now we validated those. We tested and we probed because we just don't accept price increases willy-nilly, we have our grocery Code of Conduct obligations, but we also have the diligence those to ensure that they were actually fact-based, and we believe they were. So food price inflation was a global phenomenon as it turns out, Australia was actually a much better place than most of the OECD in terms of the amount of food price inflation that ultimately got transmitted to shelf prices, but that's cold comfort. We've all been grappling with the issue of food price inflation. So your observation around input cost is absolutely right. What is good news shareholder is that food price inflation has declined outside of normal produce cycle to almost 0. But -- it's come all the way back down.

You've seen in the media, right? It's a bit laughable. But you could fly over England, got to Sainsbury's or Tescos and buy your Tim Tams or [indiscernible] far cheaper than you can buy them in Malls and [ carts ]. And I looked at a packet of Tim Tams, and I thought, well, the last time I bought one they had 12 in them and now they're only got 9 in them. Now do we have any influence over that?

No, we do not.

The shrinking of the packaging sizes?

Well, we work with our suppliers and all sorts of packaging formulations the whole time, but we don't control the price of Tim Tams.

No, no, people who are packaging these items because it really sort of at a customer level, you get that dissatisfaction when you bought something for 200 in and out of 200 grams and now it's 170 grams.

Yes, we also have -- and I'll draw this -- this will be the last question, Shareholder, if you wouldn't mind, just to give everybody else a go. We also get lots of feedback from customers saying, "Thank you for unit pricing". Sorry, you can't quite read the labels, but unit pricing to enable our customers to make a unit price-based decision but also more affordable pack sizes to assist them with their budgeting. So we understand that provided we are transparent Customers can make their own mines up and actually adjust their budget spend on unit price and units themselves as they see fit. Thank you for your questions, shareholder. We appreciate it.

Chair a question from Stephen Wei on behalf of Damian Wei.

Good morning. I'm making a comment and a question. This morning, not only have you given us a Welcome to Country is what most company does. But you have also allow us to see and to hear for ourselves the things that you have done to improve the wellbeing or the economic well-being of the first intermittent service land. An as a Woolies shareholders, I'm very proud that in any country, you don't -- you can't have social harmony unless you have -- why you While you have economic imbalance. The question I have is regarding the Annual Report. Among the four business segments, you've got Australian Food where you have return of funds employed of about 32%. For New Zealand Food, which is very similar for a different country is only 3%. So I was wondering why is the difference in the return of fund employed? Is it because you're squeezing your Australian consumer or yoyou're Australian supplier?

So thank you for your question, shareholder, and thank you for kindly acknowledging our continuing efforts in respect of reconciliation. There are a number of different inputs that go into obviously return on funds employed. And if you look at Australian returns, our return on funds employed is higher than in New Zealand, simply because at the moment, our New Zealand business is in the middle of a transformation and not nearly performing to its full potential. And whilst Amanda and I have shared, I think, in the encouraging signs of some momentum in that turnaround, it's still early days. So we certainly hope to improve the performance of our New Zealand business and return -- and improve return on funds employed. Overall, group return on funds employed, if you aggregate all of the businesses up. It's about 15% pretax, 10% after tax. And we sometimes get queries about our degrees of profitability. Which, in our view, are not out of line with other benchmarks. And when you think about it, for every dollar of sales that Woolies has, once we pay our suppliers, pay our teams, invest in our supply chain, pay tax, payroll tax, income tax, invest for the future. We have about 2.5% left to pay you a dividend out of. So we don't believe that overall return -- overall levels of return at Woolies are excessively high. And of course, we live in an extremely competitive market. Having said that, we do want to invest to improve returns over time. That's what our business is about. And we are investing into the future in terms of not only supply chain, but a very exciting pipeline of technology and related improvements to the customer experience and to the team experience. So we're trying to get that balance right, high price competitiveness for our customers, paying our teams fairly, investing in the future, and in a very competitive environment, generating competitively attractive returns for you as a shareholder.

Chair, I have a question from Tony Lonegan on behalf of shareholder Amanda Schue.

Thanks for the opportunity here to ask the question. I come from [indiscernible]. I have been in the family farm there since 1981. We are a mixed farm that, for the last 30 years we have mainly been producing beef. And nin that time, I've changed my own farming practices, I have been aware of the environmental impact of the farm and I've been moving towards more sustainable practices. And that's not necessarily the most financial rewarding depending on the circumstances. So -- but when you say you're working with industry groups, in a lot ways, you're dealing with the status quo. There's been a growing movement towards regenerative farming and sustainable farming practices in general. So do you have any plans to incentivize like regenerative produce from regenerative farms and as I say, more sustainable agriculture. I know, it's not easy, but there are organizations that represent regenerative farmers with the emphasis is on environmental sustainability rather than actually producing. A friend of mine says he doesn't produce cattle, he produces pasture, and that product certainly look after the soil. So if you're going to be addressing climate, addressing sustainability, addressing biodiversity then you need to be working with those groups as well as the status quo being producers.

Shareholder, thank you for the question. I think it's a terrific question, and congratulations on your foresight. In our Sustainability Report, we actually call out regenerative agriculture as we think a significant area of opportunity. And yes, we have done quite a lot of research into what that might mean for the business. It's obviously the trade-off is always how can we land in the right kind of value outcomes for our customers. But we believe that there will be quite some interest from our customers and our suppliers to learn more about this because as you're living this, but the research that we get as a Board and this comes up through our Sustainability Committee is that the returns potentially to farmers from regenerative practices. The reduction of fertilizer, carbon sequestration, improvement in quality outcomes may well make it economically sensible over the longer run as well. So we'd like to learn more, and we'd like to be doing more.

Is their financial reward at the moment. And their is no -- the customers would be keen to know -- our information, how produce is produced and there's no -- that's not happening at the moment.

Well, we should certainly introduce you to our green stock people. I don't know if Ana is in the audience at all, but will -- Guy, maybe -- could Guy, if you put your hand up, Guy, we'll have a chat to you after the meeting. But keep up the good work, and we'd love to learn more.

Chair, I'd like to introduce Jonathan [ Moylan ] with a question on behalf of Adam Neeson.

Thank you, Chair. I have one question. Congratulations again on your zero-deforestation commitment this year. It's great to see some distance between Woolworths and Coles. I'm sure you're happy about that as well. Obviously, big supply chains are complex. There are a number of factors along the supply chains from the producer, to the feedlot, to be abattoir, to the processor, to the super market and finally to the customer. So I was wondering, I'm not expecting a precise answer, but your -- how much fund for traceability you have -- the proportion of the fresh beef particularly you sell? And by when do you hope to achieve full farm to fork traceability so that you can assure yourself that you're meeting your Zero Deforestation target?

So I don't have all the stats on this, and I'm not sure though Amanda whether you do either, it's probably a question of a detail that I would love to follow up with you on. What I can say is that through green stock, which is an end-to-end supply chain operation we have from animal selection through our JV with Hilton right on to high-quality product in our supermarkets. That gives us a unique seat at the table to deliver on end-to-end supply chain visibility, it's the first thing. The second point I would make is, I think, inevitably, as fresh food continues to evolve and our commitment to leading in fresh food involves, it leads us further down the issue of supply chain traceability, not only from a provenance perspective, but also from a supply chain integrity perspective. Keeping things in temperature control, for example, minimizing vibrations. I understood recently that package of chips can explode in trucks if the trucks get too high. So there are sensors out there that can measure altitude. There are all sorts of new innovations that I think are going to give us more insight into our supply chains and give customers more choice.

Chair I introduce a proxyholder for Shareholder Clare Hutchinson.

Thanks for the opportunity to ask the question. I'd also like to acknowledge your new Zero Deforestation target in the Sustainability Report and congratulate you on it being validated by the science-based targets initiative. As you said before, the SBTI mandates no deforestation targets for companies in food, land and agricultural sectors. But it also recommends no conversion targets. So for companies to set a target to eliminate the conversion of natural ecosystems from its supply chains by 2025. Has Woolworths considered the establishment of such a target. And if not, has it assessed whether the absence of a conversion target is compatible with your climate plans and production, carbon reduction targets?

So thank you, shareholder, for the question. And so I think as I mentioned earlier, the no deforestation commitment, the definition of which we are working with industry on to ensure that it is fit for purpose from the Australian context. When -- We hope to get that done, we would need to get that done by December next year. This is going to raise all the issues you talk about. Yes, we are aware of the definitions no destruction of recovering forestry as well and the broader nature considerations that other shareholders have talked about. So all things are being considered at this point in time as we work cooperatively with our supply partners industry peak bodies, to land at the right nuanced definition with all the detail you talk to of no net deforestation. Thank you for your question.

I'll just reiterate that the SBTi actually recommends a no conversion target. So that's more than deforestation. And we've seen Aldi commit to this as well. So it would be great to see Woolworths make that pledge as well.

Chair, I have a question from Julian Mills from the Australian Shareholders Association.

Thank you for taking my question. It's short today. Firstly, I'd like to thank the Board and the previous Chair -- previous CEO for his time at Woolworths and congratulate Amanda Bardwell for her position. And just to say that it really does go to -- does reflect what a great job he has done being able to bring someone from inside the company up to this level. The question we have today is actually about your role. In 2023 -- in '23, you were -- you have three -- I'll start again. You have -- you have two chair roles on two ASX-listed companies and a role as a Director on Brambles. So Origin, Woolworths and Brambles. We appreciate the ASIC sees our Chair role as two roles. And although you're well within our sixth role limit, we just wonder whether you considered having a Vice President or Vice Chair as -- in that role as a backup because although we realize that you can probably manage this, we'd like to -- it's probably not optimal to scenario.

Thank you for your question. Just to clarify that I've retired from the Brambles Board a couple of weeks ago at their AGM. And as you, I think, appropriately note the ASA's guidelines, as indeed most proxy firms guidelines mean that I'm well within the definitions of if you like, the definitions of workload. That's not really the point, though. To be honest, the point is that have I got the time, resources, passion and energy to commit myself to the Woolworths task. That is a question that we all ask ourselves as Directors. It's a question that we all participate in third-party reviews and feedback every year. So this board, each of the Directors up here are assessed in terms of their capacity and their performance. It's a very rigorous assessment, as I said, conducted by a third party. And I'm pleased to say that my colleagues wish to continue with me in the job. And I believe I've got both the time and the passion and the commitment to Woolworths to fulfill my duties.

I'll reintroduced Natasha Lee, who has a follow-up question.

Yes, Natasha Lee. Just a bit of a clarification. I noticed that there's been an increase in provision for [ self-insurance ]. And I do understand self-insurance. I was involved with the New South Wales Treasury managed fund previously. But just a clarification of what particular aspects of the businesses is covered by self-insurance. And I suppose if these large things like buildings to a degree, which you're covered by reinsurance products.

So the drivers of self-insurance, of course, claims -- expected claims outcomes and how the business is traveling. I think the provisions you might be talking about might also include some public liability and workers' compensation provisions as well. And as you know full well, those are driven by claims outcomes, expenses and what's going on in the underlying trends in the business. There's nothing extraordinary in those numbers. There's no radical departure from prior experience. So -- And no change to our accounting policies in that regard Natasha. So there's really nothing of any materiality to report there.

Yes. The self insurance is, just to clarify, it's more about like those liabilities versus the physical assets?

Yes.

Okay, yes, just wasn't quite clear in your report.

Thank you. If there are no more questions in the room, I'll turn to online questions. Sorry.

Sorry. I'll stick into your one question rule. Just -- since there's no one else, I just wanted to make a comment about your online platform, whilst it's very good and it does have a function, which shows availability of stocks in nearby stores, one thing as a customer, which I do find annoying is that there are times when there's price divergence between what's advertised online and when you turn up at a store, there is a difference. It's -- I think whilst it might not seem important, I think that it is an important issue for customer satisfaction as well as not wanting to get off side with the ACCC about being charged a different price than what was advertised.

Amanda will add if I don't answer this comprehensively. That actually shouldn't be the case, Natasha, unless it's a metro store, which just by virtue of their convenience, locations and smaller footprint may have somewhat fewer promotions, but there should be -- it should be the same pricing. So if you're detecting any of that, I mean, is there anything else you would like to add?

Because I was live in a city, the normal supermarkets have all been converted to metros.

Yes. I think what we should take the opportunity to do is to also look at the settings on the app or on the website to make sure that you attach the store you're intending to shop at and that should be then showing through in sort of 5-minute updates actually in terms of inventory availability alongside price, the right information for you. So again, let's connect after the AGM's finished and we'll just help you on that one. Thank you.

Thank you.

Thanks, Natasha.

Thank you, Chair. This question is from [ Peter Calero ]. With customers feeling cost-of-living rises and trading down, why is BIG W struggling, our competitor in the same market segment, Kmart, is going gangbusters in this market segment. What are they doing right that we are at BIG W doing wrong?

So look, I think there are a number of reasons that are explaining BIG W's performance. And I want to stress that actually, we have got confidence in BIG W, confidence in the plans. The current trading environment is obviously very, very challenging in respective discretionary items. And of course, we look around us, not just in Australia but globally, to see what we can learn in terms of best practice from every participant in both physical retail and general merchandise and online and general merchandise. So whether it being, I think, the significant reset and format in the pricing architecture, the way we've reset apparel for summer, the way in which our everyday needs offering in BIG W has really come to light. Some of the early signs and really quite positive signs coming out of health and beauty with stores within stores with new brands. I think there is cause for, I think, some optimism on BIG W, but we are not expecting this to take -- to happen in the near term. And yes, we look at all of the domestic competitors and will be not only extremely price competitive, but I'm sure we'll be able to learn from them and others.

Chair, I have three questions from Ronald Guy from the regional Trade Union Human Rights Shareholder Group. The first question is Pacific and International workers have been exploited in the agricultural industry. How is Woolworths ensure that this is not the case in the supply chain of Woolworths? Has there been any examples this year of Woolworths needing to approach suppliers this year with such concerns?

I think this is a very fair question. Shareholders, as we set out in our Modern Slavery report, the modern slavery risks, we do think are in some aspects of agricultural supply chains. And that's the reason why we have got a very strong program of due diligence and compliance monitoring through all of our produce suppliers, in particular, those ones that rely on migrant workers. And specifically to answer the shareholders' question, we did discover in some suppliers, some failures to adhere with our standards and oversaw and work with those suppliers to remediate those to the tune of around $300,000 in our agricultural supply chain in the last year. So it's an area of constant vigilance for us.

Chair, this is the second question from Ronald Guy. There have been concerns raised this year stress caused by constant monitoring of warehouse employee activities. In the interest of equal treatment of employees, will the Board commit to the same monitoring process so that shareholders can observe Board members utilizing around 100% of their time efficiently? This could be especially valuable where Board member representing more than one company.

Okay. Look, let me just allay any concerns. We are not monitoring our workers. There's some quite wild allegations that have been made that we're not tracking people after hours or tracking them. What we clearly -- it is important for us in the context of a business that moves 25 million cartons a week, it is vital for us to have an engaged, safe and productive supply chain. And at present, we do have some issues on certain sites as we are renegotiating employment arrangements with our teams, on the issue of engineered standards, which is a technical term for reasonably common place. They've been in the industry for more than 10 years, our productivity standards. So yes, it is important for Woolworths to keep low cost, to keep productive. Why? Because that flows straight through to price, it flows straight through to our ability to compete and ultimately, our ability to generate returns for shareholders. The test we apply for that engineering standards, we think is a very reasonable one. And to the reasonable person applying reasonable skill at a -- in a safe and conscientious pace over the course of a shift. So we are listening to our team members. We're listening to the union representatives on this matter, but it is a matter of vital importance for the continued productivity of the company that we maintain those standards of productivity measures in our workforce.

Chair, this is the third question from Ronald Guy. It is good to see that the direction that Bega is taking in the Bega Valley circular economy. Can you update us on the Woolworths approach to reduction of packaging and the reduction of plastics and CO2? How supportive is the state and federal government? And do you think any future liberal government will be supportive of the Paris agreement on climate change?

Right, on plastics, I think I answered the question earlier on, I think we have made tangibly real progress. Our own brand is out there leading the pack in this regard, and so that's very important. In our sustainability report, 1 of the 6 areas where we think we've got real potential for impact is in the area of circularity. And so we practice what we preach, whether it is through the application of fully recyclable and pooled plastic, crates, our pooling of wooden pellets. This is an area, I think of it's getting real focus within the organization. So I think circularity is something you can continue to expect to hear more from us on. I think it's already embedded as a concept, and we're looking for further instances where we can take advantage of the environmental and sustainability benefits of pooled and circular business models.

Chair, this is a question from shareholder, [ Brian Rathbone ]. Why don't you give the recommended retail price for all items so that people can see they are buying below the suppliers' price?

So if you look at the ticket on a shelf, you will see the price. You see its unit price. And if it's on promotion, you'll see the price that it was before. So I think all customers are presented with the information they need to make an informed decision. And of course, as Amanda mentioned in her address early on, a lot of the price inquiries starting online beforehand, which gives customers the ability to spend even more time determining where the best value is for them, which offers they want to take advantage of. So I don't think there's any shortage of information for customers to make an informed decision on pricing. Would you add anything to that, Amanda?

I would absolutely agree. I would just add that earlier comments, we want to be able to make sure that the price a customer is paying is clear and visible. When you also put some of the other information that's required on ticketing, best unit price, adding too many things actually just makes it very difficult as well for our customers to be able to read.

What we are also doing on the ticketing side, and as a Board, we actually [indiscernible] first hand on the store tour we did yesterday, he's also with 2D barcodes, which are like the code you scan, providing even more information to customers on best buy dates, when fresh goods were packaged. And from a health and safety perspective, as a further line of defense on checkout to make sure we're not selling anything that's passed it's used by date.

Thank you, Chair. I've got two more questions from shareholder Ronald Guy on behalf of the Regional Trade Union Human Right Shareholder Group. Does Woolworths ESG and procurement vet any agricultural product from illegal settlements in the West Bank? and how does Woolworths interpret the recent United Nations legal opinions and deal with the ongoing community concern?

I'm going to have to take that question on notice from the shareholder, and we will get back to the shareholder. I'm not aware of that risk or has not been elevated to the Board in any way, but I don't want to mislead the shareholder. We'll do some more research and come back to the shareholder.