Managing Director's Report

As Australia’s second largest private sector employer and New Zealand’s largest private sector employer, Woolworths has a significant role to play in the lives of our team members and the customers and communities we serve.

While we are in a period of unprecedented change at Woolworths, we are firmly focused on rebuilding a sustainable business for our team, our customers and our suppliers.

Since becoming Woolworths Food Group Managing Director in 2015 and Woolworths Group CEO in February 2016, I have been determined to be clear with our team, whether they are in a support function or serving our customers in one of our more than 970 Woolworths Supermarkets, on what it is we collectively need to do to deliver on our customers’ expectations. We are united under the banner of ‘Good Food, Good Prices, Good Acts’ and focused on the things that really matter. In short, ‘We bring a little good to everyone, everyday’ is the core of what we are here to do.

Woolworths Supermarkets are 80% of our Company revenue and getting this right will have significant benefits for the entire Woolworths Group and for communities across Australia. I am pleased that Countdown, Endeavour Drinks Group and BIG W are also doing good work and their progress is included in this report.

HIGHLIGHTS

• Safety rates at work improved with a Lost Time Injury Frequency Rate (LTIFR) of 8.43, a reduction on 2015. Our Total Recordable Injury Frequency Rate (TRIFR) was 16.29, which was also a reduction on 2015.
• Woolworths is undertaking extensive work and analysis to understand any gender wage gaps and our Diversity and Inclusion strategy and remuneration principles will drive improvement in this area. Major initiatives within this strategy will be launched in November 2016, including a gender equity pay review effective 1st November which will deliver a step change towards closing the gap.
• During 2015, our Dan Murphy’s business mapped community demographics across 250 stores so managers could make better-informed decisions about product ranging and recruitment.
• This year, Woolworths and The Salvation Army decided to formalise our partnership by establishing an advisory board and an ongoing formal partnership called STAND (Support Through Australian Natural Disasters). STAND will fund natural disaster response, recovery and resilience works in the community.

Woolworths was the first Australian retailer to commit to implementing the Australian Federal Government’s voluntary Health Star Rating (HSR) front of pack labelling program. At year end FY16, over 50% of products in the Woolworths Own Brand portfolio had applied the star rating. We are on track to have stars across all eligible products within four years, well ahead of the Federal Government's five-year timeframe for completion.

2020 CORPORATE RESPONSIBILITY STRATEGY

Woolworths will soon release our goals and commitments under the Corporate Responsibility Strategy 2020. We have identified 20 targets under a framework of three priority areas of People, Planet and Prosperity.

I am passionate about ensuring the Woolworths team reflects the communities we serve and we will take further steps to encourage gender, cultural and LGBTI diversity in our team and to support inclusion and participation.

We want to play our part in contributing to a healthier Australia under our Planet commitments. This includes a move towards zero food waste and recyclable Woolworths Own Brand packaging. We are also committed to sustainable sourcing and reducing our carbon emissions.

Woolworths is a significant contributor to the prosperity of the communities we serve and believe these need to be founded on trusted relationships. We are committed to improving our relationships with our business partners and re‑establishing a virtuous loop that also benefits our customers and community partners.

We will be transparent on our progress and provide regular updates going forward.

Thank you for your interest in Woolworths and I look forward to updating you on our progress soon.

Brad Banducci
MANAGING DIRECTOR AND CHIEF EXECUTIVE OFFICER