With more than 3,000 stores spread across Australia and New Zealand, Woolworths’ prosperity affects multiple stakeholders. The success of our business is directly linked to that of our employees, suppliers, shareholders and the communities we serve. It is our responsibility to manage our relationships with these stakeholders in a way that maximises prosperity without compromising our corporate responsibilities.
JOBS AND EMPLOYMENT
Creating jobs for Australians and Kiwis
- More than 188,000 employees – Australia
- Close to 18,000 employees – New Zealand
- 805,000 indirect jobs
- 79,096 young employees 2
Woolworths is committed to growing our business, and with growth comes new opportunities for employment. Over the past year, 44,991 people joined Woolworths in Australia, New Zealand and our international sourcing offices.
Having a part time job at our Supermarkets is a rite of passage for young Australians and Kiwis, so it is not surprising that many of our new hires during FY16 were young people, many of them starting out in the workforce.
Our economic contribution in FY16
- $58.1B total sales 3
- $1.0B dividends to shareholders
- $2.56B EBIT 3
- $1.6B net profit after tax 3
- $118B indirect contribution to economy 4
The financial results for the year were disappointing, with sales from continuing operations down marginally to $58.1 billion and net profit after tax 5 down 39.2% to $1.6 billion. Our Board announced a reduced final dividend of 33 cents per share, down 54.2% on the previous year.
FY16 was a year of significant progress, with a new operating model, some hard decisions around underperforming businesses and a new focus on providing a great all-round shopping experience for customers.
However, there is still much to do. Across the business, we will be working in FY17 to build a culture where we listen to and collaborate more with our customers, team members and suppliers. Our ultimate goal is to increase the prosperity of all our stakeholders by leveraging these trusted relationships to improve our market performance, cost base and profitability.
Suppliers are a critical stakeholder group for Woolworths, whether we stock their brands in our stores or they produce our Own Brand products. Having their cooperation and collaboration is essential for the success of our 2020 Corporate Responsibility Strategy. Building positive, productive relationships with local, national and international suppliers is a key plank in the Strategy.
During 2015/16 we continued to work closely with the Advantage Group to better understand our suppliers. We received more regular feedback and obtained additional feedback that was specific to the Woolworths Own Brand business.
We are moving from annual surveys to twice-yearly surveys and developing a bi-monthly Voice of Supplier Pulse survey. These actions will support earlier intervention with issues and help us to build closer supplier relationships.
Improving supply chain working conditions
Woolworths upholds human rights for both our employees and for people working in our supply chain.
Our long-established ethical sourcing policy enshrines the International Labour Organisation (ILO) Conventions and the UN Global Compact’s core values of human rights, labour standards, the environment and anti-corruption.
We expect all suppliers to comply with our ethical sourcing policy, which has a compliance audit program for factories making our Own Brand products. We prioritise the audits according to the human rights risks of the country where the factory is located and the product category.
We engage experienced third-party certification bodies to conduct the audits and to rate factories as approved, conditionally approved or at risk. Factories at risk or that need critical corrective actions cannot start production for Woolworths until these issues are resolved.
Woolworths is committed to increasing supply chain transparency. In 2016, BIG W disclosed details about sourcing from high risk countries.
The factories we deal with are listed on the Woolworths Limited website and we keep the list updated. We also provide information about audit outcomes in our annual Corporate Responsibility report (see diagrams).
Ethical sourcing – overseas workers
Woolworths expects all local suppliers to comply with Australian and New Zealand workplace laws and ethical standards. To remain part of the Woolworths supply chain, these laws and standards must guide suppliers’ treatment of all workers, including the seasonal migrant workers who are so essential for our produce suppliers during peak harvesting periods. We also expect our suppliers to be responsible for ensuring their suppliers and labour hire companies are legally compliant.
Australia has a strong rule of law around this issue and well-established independent agencies that monitor and enforce the laws more effectively than private sector companies can. However, we acknowledge there are issues with some unscrupulous labour hire companies and accept our responsibility to work with key industry bodies and other stakeholders to help improve labour practices in our supply chain.
As part of our commitment to being part of the solution, Woolworths belongs to a working group convened and led by the National Farmers’ Federation (NFF) and the Produce Marketing Association (PMA). The working group is developing a best practice scheme for agricultural employment.
Our new Supplier Excellence Audit program, which we announced in April 2016, incorporates our policy for engaging and employing overseas workers. The program focuses on improving quality and product safety standards across Woolworths’ extensive global sourcing network.
We conduct regular internal training sessions with staff who interact with suppliers to make sure they stay up to date with the latest workplace laws and Woolworths’ expectations.
FACTORY AUDITS BEFORE THEY START PRODUCTION FOR US
Woolworths is proud to be an important contributor to communities across Australia and New Zealand. Our goal is to contribute the equivalent to at least 1% of our pre-tax profits (on a three-year rolling average) every year to the communities in which we operate.
Being part of the community fabric has mutual benefits. It helps to strengthen our relationships with local customers, employees and suppliers so we understand each other better and build trust. We build on these relationships to encourage people to support a range of charitable organisations and community programs and to drive real change in the areas of nutrition and health, employment and food waste reduction.
Our community contribution 2015/16
Contribution to the community 6 as a % of pre-tax profit 7
= 0.92% on a rolling average basis
Woolworths has a long history of helping communities to recover from droughts, floods, cyclones, bushfires and other natural disasters.
Since 2010, we have partnered with The Salvation Army to do this work, contributing more than $29 million in cash donations from the business, in-kind materials and staff and customer donations. In 2015/16, we contributed a total of $1.1 million.
TAKING A STAND: BUILDING OUR PARTNERSHIP WITH THE SALVOS
Woolworths has supported The Salvation Army (The Salvos) since 1954. Over the past five years we have averaged more than $2 million a year in contributions, with a further $3 million a year donated by our customers.
This year, Woolworths and The Salvos 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.
It will operate at two levels: year-round contributions and support to The Salvos, and a higher level of engagement if disaster strikes, in the form of collecting customer donations, providing the opportunity for staff to volunteer and deploying on the ground resources to support Salvos Emergency Services.
STAND will deliver shared value through adherence to clear metrics. We will reinforce our commitment through staff engagement and initiatives such as volunteering at times of disaster and seconding senior staff to act as strategic advisors to The Salvos’ operations.
Young Australian of the Year
As the principal sponsor of the Young Australian of the Year Award, Woolworths is working with the National Australia Day Council (NADC) to raise awareness of the Award and highlight the exceptional contribution young people make to our country every day.
As a major employer of young Australians, we are proud to be associated with an Award that recognises their leadership achievements.
The 2015 Young Australian of the Year, Drisana Levitzke-Gray, was working for Woolworths in Western Australia as a nightfill worker when she won the Award for her advocacy work on behalf of Australia’s deaf community. Drisana continues to work with Woolworths as our Young Australian of the Year Ambassador and, as Workplace Advocate, she is helping us to improve accessibility and inclusion for deaf people and raising our employees’ awareness of Auslan.
IMAGE: 2015 Young Australian of the Year, Drisana Levitzke-Gray.
Given the Chance
During FY15, Woolworths began partnering with the Brotherhood of St Laurence and its Given the Chance for Asylum Seekers program to help transition asylum seekers with work rights into full- and part-employment so they can gain confidence and experience. Nearly one third of program participants are tertiary qualified and others are undertaking education and traineeships while they work.
So far, 20 new asylum seekers have found new jobs with Woolworths and more than 60 have gained valuable work experience.
- Flow-on from value of sales. Based on 2009 multiplier.
- Aged under 25 years.
- Before significant items.
- Flow-on from value of sales.
- Based on continuing operations.
- Excludes leveraged funds.
- Before significant items.