Richard Goyder - MD Terry Bowen - Finance Director John Durkan - MD Coles John Gillam - MD Home Improvement and Office Supplies Guy Russo - MD Target Ian Bailey - MD Kmart Mark Ward - MD Officeworks Rob Scott - MD Industrials

David Errington - Merrill Lynch Ben Gilbert - UBS Craig Woolford - Citigroup Tom Kierath - Morgan Stanley Adam Alexander - Goldman Sachs Michael Simotas - Deutsche Bank Andrew McLennan - Macquarie Grant Saligari - Credit Suisse Richard Barwick - CLSA Shaun Cousins - JPMorgan Craig Woolford - Citigroup

Ladies and gentlemen, thank you for holding and welcome to the Wesfarmers 2016 Full Year Results Briefing. [Operator Instructions] This call is also being webcast live on the Wesfarmers website and can be accessed from the home page at wesfarmers.com.au. I’d now like to hand the floor over to the Managing Director of Wesfarmers Limited, Mr. Richard Goyder.

Well, good afternoon to those of you on the East Coast and good morning to those on the West Coast. And welcome to the Wesfarmers 2016 full year results briefing. I’ll cover off the groups’ performance overview, following which Terry will provide commentary on the groups’ other businesses, our balance sheet and cash flows and then the Divisional Managing Directors will provide a performance summary and outlook for their respective businesses. And to conclude, I’ll come back and provide an outlook for the group and then as always we’ll have an opportunity for questions at the end of the briefing. So if you move to slide 4, the group reported net profit after tax of $2.35 billion after excluding significant items which was down 3.6% on last year. Reported net profit after tax for the year was $407 million, which includes a pretax non-cash impairment of $2.116 billion for Target and Curragh and $145 million in pretax restructuring costs and provisions for Target which regarded to back in May. The groups’ retail portfolio and the Wesfarmers chemical engineering and fertilizer division delivered strong results and those were driven by investments across customer value merchandizing store networks in the retail portfolio and a strong operating performance WesCEF. These results were offset by losses at Target and Resources. Excluding significant items earnings per share were 3.1% lower on the prior year at 209.5 cents per share and return on equity on a rolling 12 months basis was 9.6%. The group’s declared a fully-franked final dividend of $0.95 per share, bringing the full year dividend to $1.86 per share fully-franked. Turning to slide 5, the group recorded revenue of $66 billion up 5.7% on last year and EBITDA excluding significant items of $4.9 billion. Net capital expenditure was 13.9% as we continued to maintain strong financial discipline ensuring satisfactory incremental returns received on capital deployed. Turning to slide 6, as I mentioned earlier, our retail portfolio excluding Target and WesCEF delivered strong earnings over the year. Each of the Divisional Managing Directors will cover their business in more detail, but I briefly wanted to touch on the performances of each business. Excluding Target, the retail businesses combined delivered earnings growth of 7.5 %. Coles grew its earnings by 4.3% driven by continued reinvestment in providing customers with better value quality above billion service, leading to growth in transactions basket size and fresh participation. Pleasingly the liquid transformation now, a second of a five year plan is progressing well with positive comparable sales growth achieved over the past year. Bunnings has continued its strong performance with earnings up 11.6% driven by solid execution of its strategic agenda. A highlight for the year was Bunnings acquisition of Homebase and the team have made good progress today reshaping with results in line with the acquisition case. The acquisition would deliver growth over the long term and create value for our shareholders. Kmart’s growth momentum was sustained through improvements in large end-to-end productivity which lead to 8.8% increase in earnings for the year. Consistent with guidance provided in May, Target reported loss of $195 million including $145 million of restructuring cost to significantly reset the business. The underlying loss of $50 million reflected high levels of seasonal clearance and the impact of a depreciating Australian dollar. Officeworks continues to go from strength to strength delivering 13.6% earnings growth driven by successful execution of its every channel strategy. Wesfarmers chemical engineering and fertilizer division achieved earnings growth across all three business units with total earnings up 26.2%. Business benefited from strong production growth in natural gas retailing and strong demand for fertilizers respectively. Our Industrial and Safety business earnings fell by 10% as the business continued to experience weaker trading conditions and undertook a significant number of restructuring initiatives over the year to provide a stronger platform for future growth. And finally, Resources reported a significant loss due to further declines in export, coal prices, lower sales volumes due to wet weather events and unfavorable currency hedges. Despite these challenges, the business delivered cost reductions and strong safety performance. Turning to slide 7, in terms of return on capital the group continues its strong focus on generating an exceptional return on capital to deliver satisfactory terms to our shareholders. The majority of our retail portfolio and WesCEF continued to deliver strong returns driven by solid earnings growth and disciplined capital expenditure. Our Target, Industrial and Safety and Resources all delivered unsatisfactory returns on capital, we’ve always maintained long term view on the portfolio and holding assets through the cycle. We understand from time to time, our business has made face headwinds, which means we have to accept short-term reductions in return on capital. Having said that, we don’t like it and we’re very focused on achieving better results in Target and Resources. Turning to slide 8, as a largest trading company, we recognize the significant that we have on the broader economy and our diverse stakeholders. Strong and growing Australian companies support the economy beyond just their direct stakeholders and our focus on sustainability ensures that we will continue to make a significant contribution to the Australian, New Zealand and UK economies into the future. In FY 16, we paid nearly $45 billion to our suppliers making a significant indirect contribution of employment. As Australia’s largest private sector employee, we also paid $8.8 billion directly to add 220 employees, money that would have gone on to support businesses large and small in the Australian, UK and New Zealand families. Of our $3.5 billion in EBIT, $1 billion went to the government in taxes and $300 million was paid to lenders in interest. Given our desires to put franked credits in the hands of our shareholders who are most valuable, the majority of our profits are distributed to our 530,000 shareholders, most of whom are Australian. Also notably over the past year, we made direct and indirect contributions of over $110 million to communities across a number of film tropic programs in support of arts, education, medical research and a variety of community projects. Finally, we invested something like $2.7 billion in capital expenditure and the acquisitions of Homebase suburban and increasing our inventory in the Homebase business. That investment will continue to drive sustainable growth in employment and shareholder returns over the long term as well as ongoing value creation for all our stakeholders and the broader economies in which we operate. Turning to slide 9, the group continues its strong focus on sustainability and over the year a number of milestones were achieved. The quality and wellbeing of our people is one of the most important assets for the group and it was pleasing to see improvements made to our safety record. The total recordable injury frequency rate fell 15% over the year. Our businesses continued their good work to ensure the workplace is safe for all, but we’ll be doing more. Over the year there was increased focus on the more inclusive work environment specifically around diversity including gender, age and ethnicity, in particular the inclusion of Aboriginal and Torres Strait Islander’s within our workforce. The group made good progress on increasing indigenous sustained representation and is on track to achieving our target indigenous employee representation by 2020. Over the year we increased a number of indigenous employees by nearly 20%. Finally, we continue to focus on women in leadership roles and over the year made improvements. However, we have more work to do in this area. I’ll now hand over to Terry, who’ll talk through the other businesses; group balances sheet and cash flow.

Thanks Richard. Hello everyone. I’ll start with an overview of the other business performances, so I’ll be on slide 11. In total other businesses and corporate overheads excluding non-trading items reported a net expense of $68 million for the year, compared to an expense of $105 million last year. Within this; earnings from associates was $82 million or $17 million higher and this growth was due to increased BWP trust earnings. Higher earnings from associates were largely offset by lower interest received and this was due to reduced cash on deposit over the year. Despite a very busy year for the corporate office, productivity improvements means overhead costs were kept in line with last year. And as Richard mentioned, we booked $2.1 million for non-cash impairments in Curragh and Target during the year in line with the guidance. Now turning to the balance sheet and working capital on slide 12, the group reported a net working capital outflow of $236 million for the year, compared to a cash inflow of $138 million in the prior year. This reflected investments made to improve stock availability in Homebase, growths generally across our retail businesses in Australia particularly Bunnings and the impact of a depreciating Australian dollar. Working capital was lower in the Industrials division mainly due to lower coal production and the timing of fertilizer and ammonia shipments. Overall, the group’s net working capital days was slightly better again this year than last, despite strong growth in Bunnings and this is due ongoing productivity improvements in inventory. Further information on the balance sheet and working capital was included in the supplementary pecks on slides 4 and 5. Turning now to cash flow generation on slide 13, the investments made in working capital during the year resulting in a cash realization ratio of 95% with our operating cash flow of $3.4 billion. Excluding the investment to improve stock availability in Homebase, the cash realization for the rest was group was broadly at 100%, in line with our previous guidance. Turning to capital expenditure on slide 14, the group retained very strong capital discipline and that meant expenditure in the group’s industrials was very tightly managed. This resulted in CapEx again being strongly waded towards the group’s retail businesses and in particular towards Coles and Bunnings, where strong incremental returns on capital were being delivered. In total, a gross capital expenditure of $1.9 billion was down 15% on last year, largely due to lower new store activity. Our proceeds from disposals were $124 million lower than last year due to fewer retail property sales as well as the fall of the group’s East Coast LPG assets that we made in the prior year. Overall our net capital expenditure was $1.3 billion and that was $260 million lower than last year. For the 2017 financial year coming up, we currently expect that net capital expenditure again will be tightly managed somewhere between $1.3 billion and $1.6 billion, but as always, this will be dependent on the level of free held property activity that we undertake. Turning to slide 15 and our group’s financing. At the end of the period our net financial debt finished at $6.5 billion, this was $1 billion above last year due to the acquisition of Homebase and the investments made in working capital that I referred to. During the year we repaid EUR500 million bond, $650 million U.S. bond. These were partially replaced through the establishment of an additional $500 million of bank facility through our normal bankers. The group also established bank facilities totaling 630 million pounds to not only fund the Homebase acquisition but also provide working capital to this business. Overall our access to debt and our repayment profile remain in a very healthy position. Turning to funding cost on slide 16, despite the higher debt the group’s finance costs of $308 million were marginally lower than the same time last year. This was due to a reduction in the group’s all-in effective interest rate cost, which takes again all cost of debt including the establishment face and like [ph]. We reduced that by nearly 100 basis points to 4.5% during the year. This not only reflects lower base rates, but also the good work our treasury team continues to do. The group maintained very solid credit metrics for the year with cash interest cover at 16.8 times and fixed charges cover at 2.7 times. Our strong credit ratings remained unchanged during the year for both S&P and Moody’s although S&P has adjusted the outlook from stable to negative due to the short-term impact of the Homebase acquisition. Turning to slide 17 and the dividend, as Richard mentioned, the board has declared a fully-franked final dividend of $0.97 per share, bringing the full-year dividend to $1.86 per share. This will be paid on the 5th of October to shareholders on the company’s register on the 30th of August being the record day. The group will again provide shareholders with the option to participate in the dividend investment plan. Shares for this plan are likely this time to be issued on market with no material earnings dilution. Shares will be issued at no discount and the plan will not be underwritten. And with that I’ll now handover to John Durkan, who can take us through Coles.

Thank you, Terry. I’m proud of the growth that we’ve achieved in FY 16. It has been the result of the consistent effort to improve our customer offer from our 100,000 plus team members. And I’d like to take this chance to thank them for their hard work over the last year. Our team members are passionate about delivering customers better value and the better shopping experience. We’re listening to over 17,000 to customers every week through tell calls and social media, so that we can improve on the things that matter most. The quality of our stores matters to our customers and over FY 16 we’ve improved our network by either opening or renewing almost 300 sites across us supermarket Liquor and Coles Express network. Service matters to our customers and last year we trained almost 10% of our customer store team and craft skill to enhance our customer experience and we’ve invested more hours in service to sight customer time. Choice matters to customers, we’ve now got over 400 Coles on line delivery vans on the road to make sure that customers can shop in this in the way that’s easiest for them. Convenience matters to our customers and Coles Express has embedded supermarket pricing in the convenience market, so customers get great value across our 690 express sites we’ve taken great steps to reposition our liquor offering to give our customers the right range at a fantastic price. And value matters to customers, we finished the year with over 3,100 products on every day proxies in supermarkets and in liquor. Our wavering effort to continue improving our customer offer is why we now have over 21 million transactions per week across our business. We compete in an increasingly competitive market and we believe that the best way to drive sustainable growth over the long-term is to focus on improving our customer offer day-in day-out. I will now turn to the results on slide 19. Total revenue increased by 2.7% to $39.2 billion. Our EBIT increased 4.3% to $1.86 billion and our EBITDA was up 5.5% to $2.48 billion. Food and Liquor revenues increased 5.8% to $32.6 billion and our headline sales grew by 5.1%, our comparable sales grew by 4.1%. Deflation for the year was 1.7% marking the seventh year in a row of lowering prices for our customers which is something that we are very proud of. In fact our comp customer growth, transaction growth in the fourth quarter was the strongest it’s been for the last two years. Convenience revenue was down 10% on last year. Our convenience store sales continued for strongly increasing 11.1% over the year. However, this was offset by a 13% decline in fuel sales which have been driven by declining comp fuel volume of 7.9% and lower fuel prices. I will now turn to slide 20. We’ve been working closely with suppliers to improve the quality and availability of our fresh food. Our customers have been noticing with our key fresh metrics of items per basket, basket size and transactions per week continue to grow in quarter four. We also continued to lower the price of fresh products our customers buy the most, including whole chickens and chicken schnitzel. Not only do we want to deliver a market leading fresh offer, we want to be famous for our market leading customer service. In 2016, we trained over 8,000 store team members in a craft skill. We’re also investing more in check outs and service hours to make shopping easier at Coles. In the second half of 2016, we invested an additional 450,000 hours to make sure we improve the way we serve our customers. Our strategy to keep lowering the cost for the weekly shop for our customers remains the same. Over the year, we invested more in trusted pricing. We now have more than 3,100 products on every day pricing. And in June and July we announced one of our biggest prize promises to date with nearly 1,000 Coles brand products added on to everyday pricing. Our everyday prices give customers value they can trust every time they shop with us. I mean they don’t have to wait for a special provider great price. This trusted value relationship with customers remains important at a time when the cost of living continues to put pressure on the household budget. I will now turn to slide 21. Driving great end-to-end simplicity remains core to the strategy and enables us to invest more in the customer experience. One element of business simplification for Coles is continuing to build long-term strategic partnerships with Australian producers. In April, we announced a new three year contract with Annex Foods, , a recipient of the Coles Nurture Fund to supply Coles exclusively with locally grown Western Australian and processed White King mould [ph]. This is the first for a major Australian supermarket and reflects Coles’ support of locally grown products and Australian Small Business Innovation. We continue to improve the efficiency of our supply chain to deliver more freshness and better availability. We’re also rolling out smarter systems to all stores in Q1 which will enable better forecasting in the delivery of the right products to the right stores at the most cost effective time. We’re also making our store simpler for team members and our customers. We’re speeding up the rollout of one team in FY17. We’ve also reduced the number of average items per store making our stores easier to the customers to shop. I will now turn to slide 22. Coles Online continues to grow strongly with transaction and sales growing at around 25% for FY16. We continue our journey to improve our online offer, opening our first standalone online supermarket in April. We’re building a world class customer experience and we’re launching a new online website in early FY17. Turning to flybuys, there are now over 5.7 million active flybuy households, that’s two thirds of all Australian households. Flybuys continues to be another avenue to deliver personalized value to our customers. We’ve seen double-digit growth in our points redeemed [ph] this year, showing that we’re engaging our members in a meaningful way. We’re also providing our customers more choice through new partnerships and services such as the launch of flybuys travel and our partnerships with Etihad. Coles financial services continues to grow strongly in the key milestones. There are now over 1 million customer accounts and we were recently announced as the winner of Money Magazine’s credit card issuer of the year. I will now turn to slide 23. FY16 saw the liquor business return to positive comp sales growth for the first time in many years. This is an encouraging early sign that the five year turnaround is getting traction with our customers. Over the year, we continue to optimize the quality of the liquor network, closing 30 underperforming stores and opening 37 new stores. Furthermore, we have renewed over 120 Liquorland stores through the year and we’ll continue to accelerate this program with over 200 planned for FY17. Whilst these are encouraging signs there remains much to be done. As we’ve previously stated improving the profitability in liquor remains an opportunity as that the repositioning of first choice. I will now turn to convenience for slide 24. Our convenience shop sales continue to grow strongly with 11% sales growth over the year. Driving this growth is our improved food-to-go range which now includes new sandwich and bakery ranges and we’ll continue to improve our offer further. We continue to deliver compelling value by extending every day pricing and growing Coles brand in our Coles Express stores. As I mentioned previously Coles Express continues to experience pressures on fuel volumes. Our current trend in volumes is not where we would like them to be and we’re working to stabilize these volumes. This has led to an improving trend through the first quarter. I will now turn to slide 25. The food retail sector in Australia has become more competitive, so in my view this remains a rational market with room for growth. We believe that long-term growth will be delivered by putting the customer first in everything we do. We’re working harder than ever before to improve the customer offer in a consistent and returns focused manner. To achieve our aim of being known as Australia’s best food retailer we’ll continue to invest in creating a market leading fresh offer, a better store network and new channels and services also staying true to our commitment to provide trusted value to our customers. As I’ve consistently said, this investment will be funded by continued focus on end-to-end simplicity throughout the business. In liquor we’ll continue to progress the transformation. FY16 saw some important milestones on the journey, but there remains considerable work to be done in order to deliver our five year plan and the teams are really excited about this opportunity. I’m proud of what we’ve achieved this year, but there are still many opportunities. Thank you, I’ll now hand over to John Gillam.

Thanks John. And good afternoon or good morning wherever you are. I’m going to start on slide 27. It’s a very busy time for Bunnings with a lot achieved in the year and looking at the headline numbers. What is evident is the pleasing momentum in revenue earnings and returns. The numbers include four months of trading results from the acquisition of Homebase which completed at the end of February. All of the drivers within our strategic agenda are delivering good outcomes, as are the many actions we continue to implement to make our business stronger and healthier. We are pleased to report another year of improved safety performance and increase returns within Australia and New Zealand operations. Turning to slide 28, you can see revenue and EBIT reported for both the Australian and New Zealand business and the acquired UK and Irish business with the latter information expressed in both pounds and I dollars. This is in-line with our previously advised disclosure format following the Homebase acquisition. And their three points of interest here. Firstly, you can see the strong revenue in EBIT performance for the Australian and New Zealand business with EBIT margin a point better on a like-to-like basis at 11.5%. Secondly, the modest results from the Homebase business are after incurring sizable restructuring repletion expenses in line with their previous guidance. Moving to slide 29, I’ll talk firstly to our Australian and New Zealand business. Total store sales growth 11.1% the year was pleasing with underlying store-on-store growth of 8.1% over the same period. We were cycling strong numbers throughout the year and given that it was great to see revenue increases in every major trading region, in all merchandising categories and from both consumer and commercial. The breadth of contribution to increased revenue highlights our total market capability. We reported a good increase in trading EBIT, which as noted here came from all parts of our strategic agenda. The good trading performance was supported by ongoing productivity improvement and disciplined cost management. This allowed us to absorb network development impacts and define the creation of more value for customers. As I mentioned at the half year results, our property development activity has been intense across the past six or so years and divestment outcomes being achieved in what our favorable market conditions are a good reward, lease terms are being enhanced alongside good development outcomes. The level of ROC continues to lift as shown on bottom right, pleasingly you can see a healthy continued level of investment for growth within the Australia and New Zealand markets with CapEx for the year of $534 million taking the total level of CapEx across the past six years to $3.5 billion. Turning to slide 30, the continuing acceleration our brand reach is exciting. The investments being made into a digital eco-system and our physical network are delivering good results, 22 new trading locations opened with major expansion works completed at a further five locations. And as you can see in the graph top right, our digital strategies are supporting large increases in customer engagement. This data is a three year view of monthly visitation to the colebunnings.com.au site, as explained before our digital eco-system is much broader and wider reaching in this. We continue to invest in our team helping build more product and project, making our way places safer and strengthening diversity. Same is the heart of our business and a performance has been top notch across this year. There's been a smooth transition to new leadership structures to support the business in Australia, New Zealand and in the UK and Ireland. Making our offer better for customers than ever before is how we challenge ourselves that's resulted a more value creation great new products, range enhancements and improvements in service, which support placing customer engagement trends with consumers and with commercial customers. I’ll now move to slide 31 and comment on the Homebase business. In January, we announced our plans to enter the UK and Irish markets for the acquisition of Homebase with completion of caring at the end of February. It's been a very busy first few months of ownership with good progress made on all fronts. I won't repeat our acquisition rationale in this forum, but you can find that detail in our June strategy day briefing and in the acquisition announcements. We've rolled our sleeves up and dogged into a comprehensive and rapid repositioning of the Homebase business from a due diligence works we knew that the business we acquired had a poor and confusing offer with a very large stock availability and weak stock levels. New trading strategies have been formulated and implemented across merchandising, pricing marketing and operations. We are exceeding all non-core products, as well as removing all the concession operations in the store network. The offer is now very firmly focused on the home improvement and garden market and to support the repositioning we've invested approximately £60 million pound to both widened product choices and increase stock tips. We've also completed a restructure of the support team and incurred costs associated with the repositioning agenda. This has resulted in £30 million pound of costs in total and the modest EBIT result we reported for the period is after that amount. Behind by this team I energized by the opportunity and we have commenced a strong supporting investment program and developing our new team. All this work is essential to creating a platform we need to implement our acquisition plans and we place that inevitable disruption has been well managed. Encouragingly we've seen store transaction increased by 7.5% on a like-for-like basis across the period of ownership and that trend has continued at a similar level into July. Turning to slide 32, as we commented at the June Strategy Day, our leadership team in the UK is now well established, and we have supported by a special purpose advisory board which is assisting us with strategic outsight and insights into the UK and Irish markets. There has been substantial activity in progress made in integrating Homebase into Bunnings and into the Wesfarmers Group, and this involves transitioning is separating Homebase from his previous owner. Detail planning has commenced the opening of Bunnings Warehouse pilot stores as we commented in June proof of concept is a critical step and will take our time to get this right. Both of these stores will hopefully be open early in the New Year as part of a plan to have four to six pilot stores open for trialing by the end of June 2017. Turning now to outlook and I'm on slide 33. Our strategic agenda is giving the Bunnings business in Australia and New Zealand great drive. We see favorable long term prospects and we will invest to best position ourselves for those prospects. As we outlined in June, we have expressed our strategic agenda with three mine work streams, creating better experiences, strengthening the core and driving stronger growth. In relation to Homebase, the outlook for the year ahead is very clear. We have a laser focus on the high quality execution needed to successfully implement the first five of our acquisition plans. We must establish strong foundations for the business we're aspiring to create. As we implement the Homebase plans our ROC will decline in similar fashion to previous periods of growth loaded investment. In that regard, we can see in the financial guidance provided at the time of the Homebase acquisition announcement. Before I close, I'd like to thank everyone in our expanded Bunnings team for the high quality of their work across the year. And I would especially like to commend the tremendous team efforts and commitment at all levels of our businesses that underpin all that we've achieved. I’ll now hand over to Guy Russo.

Thanks John and good morning or good afternoon everyone. Today I'll take you through an overview of the performance of the Department Store division for 2016, I’ll also provide a summary of targets performance highlights and outlook and then invite Ian Bailey, Managing Director, Kmart to run through Kmart results. Turning to slide 35, the Department Store division delivered revenue of $8.6 billion for the year up 8.2% on last year, as noted earnings were down 47% to $275 million impacted by the restructuring costs and provisions recorded in target. Another very strong year as also noted in the Kmart performance. Turning to slide 36, I’ll now take you through the Target results. On slide 37, Target’s revenue for the year increased 0.5% to $3.4 billion dollars with an EBIT loss of $195 million. And as expected and outlined in our May announcement this result included restructuring costs and provisions of $145 million incurred in the second half of the financial year to significantly reset the business. Including initiatives to restructure and relocate the store support center and streamline the supply chain and reduce inventory. On an underlying basis the business recorded an EBIT loss of $50 million due to high levels of stock clearance and the impact of our lower Australian dollar. A pretax non-cash impairment of $1.266 billion was recorded in the carrying value of Target as the end of the financial year with a $1.208 billion recorded as a write down of Target share of goodwill arising on the acquisition of the Coles group. The impairment charge reflected the short term outlook for the business as well as changes in its strategic plan in relation to sales, Target store sales increased by 0.2% for the year with comparable sales declining 0.4%. For the fourth quarter total sales decreased 4.9% with comparable sales declining 6.3%. The decline in sales during the quarter was driven by the clearance of slow moving and deleted products the impact of a slower start to winter across much of Australia and underlining trading weaknesses across home and entertainment categories. Adjusting for earlier time of Easter in 2016 comparable sales decreased 5.1% for the quarter. Turning to slide 38, in the highlights, pleasing Target continue to make improvements in safety performance during the year with a 10.4% reduction in its safety record and a reduction in new claims of 18% reflecting the very strong focus on safety throughout the business. Well Target has made operational progress in recent years market competition and disruption have continued to accelerate. Following the creation of the Department Store division in February, 2016 a detail assessment of the business opportunities was undertaken including a reset of Target strategic plan. During the fourth quarter decisive steps were taken to reduce Target’s cost base and reset in between in line with the revised strategic plan. Restructuring activity completed included 257 largely voluntary redundancies and closure planning for eight surplus multi outside facilities. Planning is also underway to relocate Target support office to a modern and more suitable facility. Good progress was made to reduce inventory through accelerated range rationalization with a thirty 32% reduction in the number of skews in the fourth quarter and a reduction in inventory cover to approximately 15 weeks from approximately 20 weeks in March of 2016, although more work remains to be done. During the quarter the review of the store network was advanced to including a reset of the renewal program to ensure the economics of any format roll at positive. Target opened six stores during the year including two replacement stores, and closed five stores. There was 306 stores at the end of the year. Turning to slide 39 on outlook, the 2017 financial year is a transitional year for Target with a focus on embedding the revised strategy accelerating the conversion to EDLP exiting on profitable ranges including the removal of toys [ph] prioritizing volume every day lines and further reducing inventory levels and improving the quality of ranges. These priorities will be supported by increased levels of direct sourcing improved merchandise disciplines and planning systems and operational simplification. A strong focus on capital efficiency is expected to moderate capital expenditure which includes a reset of the renewal format and also improve working capital management to support increased cash flow generation. In addition, two Target stores will be rebadged to Kmart during the first half of this year. In regards to current trading the trend we witnessed in the fourth quarter of 2016 financial year has continued in the first quarter of this financial year. Also in July, we removed the toy sale and convinced the conversion of the toys category to EDLP offer. Whilst this has impacted sales of toys and adjacent categories some $75 million in the first quarter the decision to remove two toys up is the right one for the long-term and is consistent with our transition to EDLP. Thank you. I will now hand over to Ian Bailey.

Thanks, Guy. Kmart has had another great year and I’m glad to be here today to share results of 2016. Turning to slide 41, Kmart delivered revenue of $5.2 billion for the year on 14% on last year with comparable store sales growth of 10.5%. Sales growth was delivered to increase customer transactions units sold and a small increase in average selling price as a result of a shift in product mix. All categories achieved sales growth driven by core ranges in home, apparel and kids’ general merchandise, turning to 8.8% to $470 million for the year driven by sales growth and cost control through improvements in productivity particularly across stores and supply chain. Return on capital improved 480 basis points on last year to 37.7% driven by continue focus on working capital and safety improved for the year with lost time injury frequency right decreasing by 4.3%. Turning to slide 42, double-digit comparable sales growth was achieved for the very first time which we are very proud of custom and transactions grew by $14 million or 9% with units growing by $75 million or 11%. Kmart continue to improve its products and remains committed to improve the customer experience by providing better products and even lower prices. Managing the exchange rate headwind was a significant highlight this year and required seeing work across the entire organization to get right. We continue to improve at moving high volumes of inventory efficiently. We continue to invest with our networks by opening six new stores and completing 37 major reservations. Turning to slide 43, our vision remains the same that is to provide a great everyday products to Australian, New Zealand families at the lowest prices. We’ll continue to achieve our sustainable growth to the following strategies focus on growing volume, driving operational efficiency having adaptable stores maintaining a high performance culture and all supported by a relentless pursuit of lowest cost. Before we will focus harder on understanding a customer to ensure we make better commercial decisions. This understanding will help us to deliver better products and even lower prices and deliver a great place to shop that simple to run. We will continue best to invest in our store network with 11 new stores and 33 refurbishments planned this financial year. The safety of our staff the diversity of our team and our culture as well as of course also remains high priorities for the business. Kmart has achieved another great result this year we could not have got where we are now without it well in the sense of that people are like to take this opportunity to thank the team members and congratulate everyone for this fantastic result. Thanks for your time today. I will now hand over to Mark Ward.

Thanks, Ian. I’m now on slide 45. Good morning and good afternoon. I’m really pleased to report another strong full year performance which is a credit to the hard work of the entire Officeworks team. Turning to slide 46, revenue grew 8% across the year were sales growing strongly across every channel and every region. It was really pleasing on the back of strong growth in recent years and shows that our sustained focus on delivering a compelling offer to customers continues to resonate. Across the year we had record results in key trading periods of back to school tax time driven by well partly rather substantial investments we’ve made in lowering prices to the river even stronger value to customers. The revenue lift coupled with their ongoing focus on capital and cost productivity helped drive a 7.6% increase in EBIT. Over the last six years, we’ve delivered compound annual growth and we are close to 11%. Productivity improvements together with earnings growth and this is disciplined capital and in between management also enabled us to achieve another strong improvement in return on capital lifting to 13.5%. We’ve maintained a strong focus on reducing cost and complexity. Process improvement and automation is helping our team members to focus on saving customers rather than performing tasks delivering by service and efficiency benefits. For the market continues to be very competitive with patchy trading conditions the investments in every channel strategy and the customer offer continue to deliver growth and provide a very clear focus for us as a business. We’ll continue to invest in making sure that customers have a great and same as experience with us where they’re in-store over the phone, on the road or online. It’s also worth noting that this year we’ve invested more capital than we have since the 2009 financial year. We continue to look for ways for clicks and bricks to work together and a good example of this is our installed case [ph] where customers are able to access an extended range which is not available in all stores. We opened six new stores during the year well upgrades to store layout design has delivered pleasing sales and margin growth. And we continue to invest in our online offer including mobile to enhance the customer experience. And want a centered around being a one stop shop for those looking to start run or grow a business as well as for students and to have sold. We’ve got a relentless focus on making sure their offer is kept fresh and relevant and keeps customers coming back. This includes the evolution and the innovation within merchandiser’s categories including the introduction of new ranges and leading international brands. And ongoing investment in process to deliver more and more value to customers and making sure that they’re in their team enjoys what they do and that we give them the tools and the skills to deliver great service to help customers achieve their big ideas and investments in our business to business sales team has allowed us to maintain strong momentum in the B2B segment. Turning to slide 47, looking forward we anticipate variable trading conditions will continue in our market with a confidence expect to remain subdued in competitive intensity expecting to remain high, having said that, we remain 100% focused on continuing to drive growth and productivity by executing our strategic agenda. We see plenty of opportunities to continue to inspire customers with innovative products and services and by making customer shopping experiences as convenient and as seamless as possible across every channel anywhere, anyhow and any time. And we also recognize the importance of our success of maintaining very strong relationships with our customers our suppliers and our communities. Once again I would like to thank the Officeworks team for a terrific year. I will now hand over to Rob Scott.

Thanks, Mark. I will start on slide 49 with the industrials performance summary. Whilst our three industrial divisions share an exposure to the mining resources sector, their financial performance for the year was reflective of the different nature of their exposure. In chemicals energy and fertilizers we had a strong performance with the record results of the division and improved return on capital. Industrial and safety is a business undergoing transformation. As a result of the changes undertaken last year we’ve been able to improve underlying earnings but there is more work to do. And our resources division reported a disappointing result and this was impacted by lower Cole prices, lower production, effects has hedge losses and an onerous coal supply agreement. I will now run through each of these divisions starting with chemicals energy and fertilizes on slide 50. I’d like to start by thanking our chemicals energy fertilizes team for a strong result and also I recognize Tom O’Leary for his leadership of this division in recent years. All business units in the division improved operating performance with a record EBIT of $294 million. This reported earnings included $32 million of costs associated with the closure of PVC production facilities at Australian vandals [ph]. Return on capital increase 3.7% to 18.9%. On safety, whilst was disappointing to see an increase in [indiscernible] for the year. We have continued to increase our focus on safety and have seen a reduction in more serious injuries through the year. Now turning to highlights on slide 51. In chemicals, increases in both production and sales volumes across ammonia, ammonium nitrate and sodium cyanide businesses was particularly placing given the current environment. With the exception of the planned major shutdown of the ammonia plant, a chemicals plan operated at full capacity through the year. Kleenheat reported higher earnings largely as a result of improved gas feedstock terms that were negotiated mid last year. In addition we’ve experienced strong growth in our natural gas retailing business with customers now exceeding 100,000 representing about 14% of the market. Over 1,700 commercial customers have also made to switch to Kleenheat. In Fertilizers WA farm has benefited from another strong harvest in late 2015, as well as an early seasonal break in the second quarter of this year and this is an increase application of cropping in oxygen based fertilizers. The results for WesCEF also included earnings from Wesfarmers 13.7% interest in Quadrant Energy, which is performing in line with our investment case. Now turning to industrial and safety on slide 52, revenue grew by 4% to $1.84 billion primarily due to the full year contribution from Workwear Group which was acquired in December 2014. Reported EBIT of $63 million was 10% down on the prior year and this is up to $35 million of restructuring costs associated with our Fit For Growth transformation program. As I've mentioned this year marked a significant rate structure to simplify our business and rate based our cost structure. And as a result of the changes we're able to improve EBIT excluding rate structuring costs for the year. Turning to slide 53, the challenging market conditions in mining and resources continue to impact sales and margins across by Blackwoods and the Workwear Group industrial wear business. The impact on margin has been most severe in recent years with larger customers. This was partially offset by revenue growth in Coregas and Workwear Group’s copperware business. Coregas continues to grow market share driven by the development of new distribution channels through Blackwoods and the rollout of our Trident go offer. That fits the growth rate structure delivered on a number of key initiatives for the year including the appointment of a new leadership team in Blackwoods and Workwear. The merger of 17 branches and four distribution centers in Australia and seven branches in New Zealand, the consolidation of regional sales service and merchandise functions and a reduction in the number of employees by over 700 across the division. This is resulted in annualized cost savings of $35 million of which approximately $20 million was achieved in 2016 financial year. There is still much to do as we focus on improving core capabilities across sales, supply chain merchandising in digital that will ultimately enhanced our offer to customers. As a result some of the cost savings achieved will be reinvested in building those capabilities in the future. Feedback from customers towards the changes have been positive, especially as we've now introduced enhanced customer service feedback and are addressing issues associated with product availability. Our focus in the new Blackwoods is to lift out delivery standard from a product based delivering full on time standard to an order based order in full on time standard which is a more relevant measure for our customers. Now turning to Resources on slide 54, the Resources division reported an EBIT loss of $310 for the year, and this was prior to the impairment charge of $850 million pretax associated with Curragh. Turning to slide 55, I will talk through the key factors impacting performance. On safety Curragh has been LTI free for 21 months which sets a new benchmark for our group. Total revenue for Resources declined by $366 million with average U.S. dollar export prices for Curragh down 21% and for Bengalla down 13%. The benefit of the lower Australian dollar was offset by $147 million hedge book losses. Sales volume and production where impacted by major weather events in the second half in Curragh resulting in water in open cut mining pits and force measure notices being issued to customers. Curragh’s performance continues to be negatively impacted by obligations to Stanwell Corporation. The combined impact of the Stanwell rebate and losses on domestic coal supply reduced at 2016 EBIT by $148 million. Notwithstanding the wet weather impacts on production we were able to reduce our controllable unit mine cash costs by 3% in Curragh for the year. However our total mining and other costs increased as a result of releases from inventory to support sales, which largely offset lower mining costs. Higher port costs an increase in rehabilitation liabilities driven predominately by lower bond yields [ph] and legal costs associated with the current litigation process with Stanwell. This calendar year, we kicked off some new initiatives to further reduce our cost base, this included employee headcount reducing by 18% during the year and an expert panel was commissioned to focus in on how we can go again on mine cost of Curragh. During the year state mining leases were granted our MDL 162 reserves and this was an important - this is a very important resource that will extend Curragh’s mine life. Commonwealth approvals are underwriting and are expected to be completed this financial year - this current financial year. At Bengalla internalization of management team has now been complete. And also I like to thank Stewart Butel who retired as managing director last month after 16 years with our group and congratulate Craig McCabe on his new leadership role in Resources. Now I’ll turn to the industrials outlook on slide 56. In Chemicals Energy & Fertilisers we were focused on maintaining the strong operational performance achieved in the past year. Maintaining this performance will be important to offset some risks and headwinds in the year ahead. Ammonia and Saudi CP indicated a pricing are lower than last year. Fertilizer demand and earnings will depend on future seasonal outcomes and we will be cycling consecutive strong harvests and competitive pressures in our core chemicals products with the new bar of [ph] iron plant coming online later this year, and greater competition in the sodium cyanide market. In industrial and safety, we expect market conditions to remain challenging in the near term particularly in Blackwoods traditional segments. On the positive side in recent months we have achieved modest price increases with the majority of our customers to help cover product cost increases and to assure certainty of future supply. This will further assist the recovery of margin. There remains a significant opportunity to improve capability and performance across sales, service, merchandising, digital and supply chain in Blackwoods and Workwear Group. This will require some reinvestment of cost savings. We will also be in increasing our investment in our team through new development programs supporting commercial and leadership skill development. Now turning to Resources on slide 57, recently we've seen increases in spot market pricing of export met and thermal coal, as a result of Chinese policy changes constraining domestic coal production. We expect that there will be ongoing volatility in the market. It will require more sustained levels of pricing for this to flow through and benefit Curragh. Since quarterly contract prices in Curragh generally lag the spot price increases that was saying. PCI and semi soft pricing has not increased to the same extend as the current hard coking coal spot price. And following the wet weather in 2016 financial year Curragh has around one million tons of carry over the tons that will not benefit from an increase in pricing until the second quarter of this year. Accordingly the focus remains on operational productivity cost control and capital discipline. We will continue to further improve our mine cash cost performance and we expect the benefits from the recent expert panel review to be realized towards the latter half of 2017 financial year. Subject to weather an infrastructure of availability Curragh’s 2017 financial year forecast met coal sales volume and is expected to be in the range of eight million tons to 8.5 million tons an increase from the 7.5 million tons sold in FY16. Curragh’s earnings in 2017 will continue to be impacted by domestic supply obligations to Stanwell of between $130 million and $150 million as well as locked in hedge losses as previously disclosed of $92 million. I will now pass back to Richard.

Thanks Rob and can I endorse your comments a bit. Tom O'Leary and Stewart Butel and thank them for the significant contributions to the group over the time with us. I'll just turn now to slide 59 on outlook for our businesses. Our retail businesses are well positioned to grow within their respective markets with interest rights of the lowest level on record and customers remaining value focused. Our retail businesses remained focused on improving the value proposition through innovation and productivity improvements. We will have ongoing investment in store networks and digital engagement which we anticipate will deliver growth for greater brand penetration. As John mentioned planning [ph] UK and Holland will be rolling out pilot stores in this financial year which will form the platform for future store rollout and rebranding of the existing Homebase stores. And as Guy mentioned, 2017 it will be a transitional year for Target with the business focused on the embedding as revised strategy including acceleration to everyday low pricing and improvements to range. Short term outlook for number of our rate industrial businesses as Rob mentioned remains challenging, and in this environment all are focused on operating more efficiently and being as efficient as we can on costs. Resources is expected to deliver further cost improvements in the second half of the financial year to offset low - a low commodity prices we’re dealing with. And I think Rob got a pretty good outlook on the other two businesses. Finally, turning to slide 60, the group will retire a strong balance a allowing us to be opportunistic is growth opportunities arise. We will continue to build and invest in the people ensuring we have sufficient type of building capacity when the within the group as required. So first to say we have a positive view on the future of the group. Thanks. That brings us to the end of the briefing and we’ll now be pleased to take any questions that you have.

We will now begin the question and answer session. [Operator Instructions] Our first question comes from the line of David Errington from Merrill Lynch. Please ask your question.

Well, first time I didn’t realize as I am. Richard, my question

We all want a lot of money on that.

Did you ask then [indiscernible] probably would have one of my - and I’m usually one of the last. The balance sheet and cash flow is my first question. If I could ask two when you look at your operating cash flow are random at that $3.4 billion and you CapEx before selling properties is around that $1.9 billion, which means your free cash flow is around that $1.45 billion, $1.5 billion which is around under a $30 a share. Now the strategy of the group is to pay 100% out of your earnings dividends, say you’re up at $182 line but mainly year or selling a properties to fund your dividend and or chunk of it or increasing borrowings. Now with the taking out of time base and I mean how long can you sustain doing this to maintain that dividend because you’re a Terry probably if going to highlight that the fix charges dropped 2.7, but my estimate is that’s probably going to drop further because you have to analyze the Homebase rent, I suppose the question is how long can you sustain timing at such a high dividend that’s well above your free cash flow are by recycling properties.

Yes, David I don’t stick your numbers. Terry you want to go through the numbers.

Yes, you’re right for this year, David. I think - the things I’d point you towards is obviously working capital investment is pretty significant this year. And we’ve said obviously high invoice [ph] needed a fairly investment in that area so that driving and sorry I think I have a time we are good cash generally group and you’d normally see working capital somewhere around 100% level for the group level. So I think that gives us probably on the numbers some - some upside. In terms of the CapEx, we’re obviously focusing really heavily on CapEx discipline and our guarded towards a lower level of CapEx as well. I think is in terms of the iro [ph] net CapEx and are not going towards gross CapEx but you should take into consideration that we’re obviously looking at capital really cautiously, we’re also looking at other areas around the great that potentially could us some additional cash I mean you’ve got, you would expect over time in need expect new Sybase [ph] it’s earrings growth from the growth. So we’ve had, we’ve had some poor results as we’ve said in resources this year poor result in target and as Rich said we saw 7.5% growth across the other retail businesses and so in terms of at dividend, I think we’ve got a good record on - on growing dividends overtime and being able to do that in a way that keeps the balance sheet in good shape and that’s what we’re focused on doing now on I guess what I’ve alluded to. We’ll look at every label which is anyone’s working capital, capital discipline and other opportunities as by present themselves and looking at a few of those.

Okay. The second one, if I could just done through deflation in this my [ph] to John - John Durkan. At the investor day, I got the impression through deflation was going to be a bit more aggressive than that I think 2.4% in the quarter. I mean I think projects was running at double-digits and it was on ongoing competitiveness with three promotions et cetera. I came away of I thinking that the deflation was going to be a lot higher than 2.4 [ph]. Can John, give a bit of an explanation as to what happened through the quarter in terms of product, in terms of in deflation in that - in that period.

Hi, David. Yes, no problem doing that. So we saw high deflation in projects as I said its strategy day, we’ve seen some offset in terms of meet inflation being still very strong particularly base during - during that period. Grocery deflation in fact was still very strong through the whole quarter and probably our highest quarter incense of grocery deflation this year. So it’s been a mix of how mix of - of things in the quarter but even at 2.4%, it’s a very high number and if I compare that to the first half we’ve gone nearly - nearly double in terms of our - in terms of our deflation half or half. So there’s no one thing that happened in that quarter and as I said we’ve we continue to invest in low prices. I think right around in fresh foods.

And it has subsided in a second quarter - in its first quarter. John, is it to be come off the pedal a bit.

So produce is - towards the back end of the last couple of weeks is as saw less deflation rate when we’re saying that at the same time soft a meet inflation so that meets inflation start come back a little bit. But broadly it’s not far off where it’s being.

Okay. Thank you.

The question comes from the line of Ben Gilbert from UBS. Please ask your question.

Where in take just the first question is on the hedging sort of things maybe Terry, the big move in the derivatives book on the balance sheet is that to do with sort of taking some shorter term views around hedging, could you just explain us.

We’re about [indiscernible], Ben. Sorry on a minute when you say the one big.

Public on the balance sheet are other not as well.

Yeah, well partly that’s been the movement in the Australian dollar and it’s also as we obviously use our analyze derivatives in terms of as - as funds roll off the balance sheet, so this a combination of those two things. But I think what you should see what you should know is that other than the high Homebase day which is in UK pounds, all of the other day we swapped back into the local currency that we meet into Australian currency when we take note - to take note on currency risk on final day and that means that and he’s right. When you look at our balance sheet the way[ph] we are here to take a growth level of day, less cash and then less attributable [ph] balances because out of my value which you seen out that we have to reply and that’s exactly why we do it.

Okay. Great. And this is the second from me on the Coles sort of things. Just wondering if you might better talk around the profitability trends through that second half in terms of liquor versus grocery store in the last year he said he served 20 buys for leave to profitability in the quarter certainly could have vision, just wondering if there were signs of improvement that contradictory where he started because of the gap in terms of profitability within liquor. Yes or it’s sort of pretty consistent trends.

Well we’ve still got a bit to go in terms of the liquor profit that [indiscernible] I called out. On - on what I was saying, we’ve seen good transaction growth in all liquor business and for the whole year we’ve seen positive comp right [ph] in liquor as the first time we’ve seen in quite a few years for a whole period chance of a scene a more sustainable business we still have yet because we’ve been investing in the business which still coachmen [ph] turn anti-material profit growth. But that obviously will come overtime, as we grow customers card transactions and their baskets.

And within the supermarket side, how much is left on the cost front like I know it’s an ongoing project to sort of hatred take us out of the business. But every sort of done all the vehicle experiments or the efficiency programs etc. within the - the core grocery business.

Well as - as I’ve been saying for a while now there’s our investment in terms of value and other things is - is really going to be funded by all of the efficiencies and productivity that come out of come out of the business and we still say as - as a present some strategies I wish sales still see plenty of opportunities in the business to become much more productive and efficient in - in our supply chain at the end-to-end supply chain. And a lot of is or some of it other service not always not true, but a part of it is the fact that we're rationalizing our range size to bringing that down which brings a whole raft of productivity and efficiencies to every piece of our supply chain. And as I called we're on our way in terms of that journey. So making progress, but this is still plenty of opportunity for cost efficiencies in the business.

Got you. Thanks very much.

Our next question comes from the line Craig Woolford from Citigroup. Please go ahead.

Good afternoon Rich and Terry. I’m curious ask question about the Kmart result it’s still somewhat possible in particularly in the second half and what I’m refereeing to for the fairly small increase in EBIT for decent increase in sales, but to give you the numbers having $29 million in closing revenue and $8 million in closing EBIT, so it’s only a 2% EBIT margin on the incremental. I’m just try to understand how could that show that result with comp store sales growth have move 10%?

Yes, I think obviously we’re seeing those exchange rate headwinds we’ve talked about coming towards throughout the year, which is a sizable cost impact. We were pretty pleased with the sales growth to be generated clearly to reduce margin because of those costs and that flow through ultimately to the EBIT line and the more modest improvement, I guess we're still very pleased that we've got that profit improvement even with that with a headwind. Operationally we still manage to take our cost too through productivity gains which helped offset some of those cost increases.

The games continue and FX headwinds continue in FY17?

They will for the first half obviously it depends on what happens with Australian dollar and we just sitting at $0.76 we start to level out as we go through with regard to the second half of the year. So I don't see them being as big an imposed on us in the year ahead as we just had.

Okay. I just wanted to clarify the group level the restructuring cost - sorry.

I can add to that to just help you if you look the side of comprehensive income to give I guess a bit more favor on as result was in that environment if you with that the first half realize gains transferred to non-financial assets which is effectively hedge book gains going into inventory we realized $251 million worth of gain in the first half and in the second half realized $6 million gain which is basically no currency and put a gain until on any hedges that were implied. So there’s been a $250 million if you like absorption in the second half and obviously that split between Kmart and Target, but I think that’s gives you perhaps a bit more favor on the gains coming.

Right, so what was that - when is the hedge book will climb up in FY16?

That is no hedge book gain being transit on financial assets goes to pretty closest spot [indiscernible] for that period.

Okay, thank you. So I have the other question was just on the structuring costs. So great level, there are four divisions that had instruction cost you obsessed industrial and safety Homebase and Target, I’m trying to get an understanding of what the structuring cost we can expect FY17 and all up with becomes quite mainly for [indiscernibleFY16 so I’m trying to work out what sort of impact we could expect in FY17 across those four segments and restructuring costs?

We wouldn't expect any in Target. We wouldn't inspect any in industrial and safety or in Resources and Homebase, John?

There will be some…

There’s little insight Homebase more repositioning costs, I think that go rather than restructuring we've through the big restructuring activities. And we tried really hard to get that done in the first four months, but it's very early days Craig, so as a general rule we've not had them at all in Bunnings, we've absorb them, but we're still in very early days behind, but so there's a bit of repositioning work to do a across FY17.

Okay, thanks guys.

Our next question comes from the line of Tom Kierath from Morgan Stanley. Please go ahead.

Good day guys. I’ve got a couple questions on Coles for John Durkan. Can you give us an indication of where supermarkets profit growth is relative to licker relative to convenience, if not obviously that the growth rate for just a relativity so we can assess what's happening within the business there?

Tom, obviously we want to play out a result, but we're happy with the result that we've achieved during the year. As you saw from the fourth quarter particularly in [indiscernible] we saw a bit of headwinds in terms of strong deflation and a little bit of price competition. And absent and we're taking a long term strategy as you know of continue to invest in pricing, continue to invest in customer service, and continue to invest in the quality of our fresh food and we absolutely believe that's fairly way to sustain our growth going forward. So if you take the deflation that we saw that was fairly large in fruit and veg business, we would have grown our profits broadly in line with our sales number.

Just in supermarkets?

Well across the board, when it was - you can assume the early deflation was in supermarkets so therefore they growth would have been there as well.

Okay, okay. And then just the second one is on the skewed auction [ph] that you’ve spoken about, how should we think about a normal coal store and how many skews it has. And then potentially where that gets to in three or five years’ time obviously the skewed auction has been driving a lot of the deflation that you've been reporting and oversee the price reductions that you are able to give?

Yes, we should and you should expect over the next couple of years two to three years that will take our skews somewhere in the range to 10% to 15% net down in the business. Now to that point give me an absolute figure because they vary by store size in terms of mass skews in store, but roughly 10% to 15% across the business on a net basis, because we'll be bringing obviously new skews into the business both Coles brand and branded and therefore removing the tail of the underperforming skews. And as I said it really does drive efficiency and productivity throughout the business, and of course we're going to do in the right customer facing why, so we're never going to - we're going ever going to move from being a customer facing business therefore we do it very carefully and we do on a category by category and a store by store basis.

Right. Thanks very much.

Our next question comes from the line of Adam Alexander from Goldman Sachs. Please go ahead.

Good morning. First question I had maybe to John Gillam on Bunnings. We've seen a couple of other companies this reporting phase and pull out some extra discounting on the mater's front impacting results, but certainly on the Bunnings result that doesn't have a pit of any impact, just wondering you ever manage it better or you haven't really seen any extra discounting or step up in those operating conditions?

Thanks Adam. I think you might recall back in February, we did call out some but some we felt that there would be some different dynamics from a sort of one off competitor activity in the market and that's what you're alluding to in your question. We were able to navigate their way through that with minimal impact across the months sort of transpired since we spoke in February, but I think when I look out for the next couple of months what we're dealing with is probably an unprecedented quantum of stock that looks likely to be liquidated. And that's going to create short term trading margin challenges. And I will just have to navigate why through that as best we can and our focus is always on doing making sure that we position ourselves for long term success numbers have to work our way through it. So nothing of note in the second half, but certainly cautionary regarding what's looking like is just ahead of us.

Yes, thanks John that’s helpful on the time. And then just a second question for to Mark Ward actually on Officeworks a very strong fourth quarter sales there despite quite a strong component PCP. Just wonder if you can mark for the data way you think what sort of drive that outcome you taking share of a closed competitor or other strategies there.

Thanks. I don't think it's come from a competitor although, I think you're alluding to Dick Smith going out of the market. And we would think that we've picked up some of those as a result of that change in the marketplace, but generally the last quarter is a very heavy run for Officeworks, because it's the end of the financial year in tax time, and we've put forward a pretty good offer we've put forward a pretty good offer we believe into the market and enjoy the success of that particular through June the month of June.

All right. And thank you.

Our next question comes from the line of Michael Simotas from Deutsche Bank. Please ask your question.

Hi, good afternoon everyone. Just a question on the Coles convenience business to start with if I can and it looks like margins for that business should have increased quite materially given the decline in sales the increase in non-fuel files as well as an industry data which - which suggests Coles pricing was a little bit above the market. Can you just talk about what tailwind that was full for the Coles business from margin respective place.

Some are not been described as a tailwind. The if I just describe that business so if we if we take the shop sales. The shop sales have grown on the back of us investing in effectively supermarket pricing. So we put in our everyday pricing into our Coles express business which is driven a reasonable amount of growth in terms of that sales but to eventually invested behind our gross margin to get those sales and secondly about the shop sales, in comparison to the overall supermarkets business as a proportion of food. It is quite small. So it wouldn’t have a material effect on the profitability from move to fuel. Our fuel business isn’t the same way as others have been reported in the in the marketplace and of course we don’t have the subsiding supplier arrangements as others and in fact we have a new partner in, in the last two years. And it’s not it’s - it’s not safe to assume that actually we would have seen the same effect as others in that space. What we what we’ve certainly seen is the three things that are called out on a regular basis which is increased regulation which is caused a slowdown in sales of this is ethanol effectively very aggressive new sites from competitive love the last 12 to 18 months. And we’ve seen very, very aggressive pricing in the marketplace that we’ve not always followed to the same level. It doesn’t mean that we’re not cross competitive we view ourselves as very cross competitive across - across the country and in reality there’s been no material change in the shape of - in the shape of our business.

Okay. That’s helpful. And then maybe one at a group level on the dividend, for the payout ratio has come down a little bit. Should we think about the sort of payout ratio is the sustainable level going forward and I just want to confirm that the day after a white be offset with an on market buyback from this point onwards.

I would assume that for as long as we can we’ll have a high payer [ph] ratio market because we want to transfer the franking credits to a shareholders.

Yes.

But we take into account the things that David and Terry talked about earlier we take into account outlook. We take into account the balance sheet, underlying cash flows, our projections, rising and all of those things are I wouldn’t sort of plug in a particular number if you feel a player number I’d look at the last average of the last five years probably in a concern is Terry indicated there are others are is to - is to increase dividends over time subject to the performance of the group obviously and transfer franking credits to shareholders. [Indiscernible] in there not in [indiscernible] any other point on me they have the as I said its likely we are [indiscernible] this time that said as positive of A that we haven’t find lines that strategic [indiscernible] making the dividend.

Okay. All right thanks for that.

Michael, is eighty one sitting in place of dividend isn’t a lot of money.

No, it looking to make a long the reaction in it was sort of more of a signal rather than actually cash different.

Yes, shareholders will they never liked dividends falling back without completely understand where we’re coming from when we take all factors into account the way we see the dividend in this year.

Yes, okay. Thanks

Our next question comes from the line of Andrew McLennan from Macquarie. Please ask your question.

Good afternoon. On one of the follow on question on Coles depending on your assumptions on the convenience business it looks like the margin may compressed in second are 2016. I don’t think given the deflation and price competition that should be a huge surprise. But I just want to if you could confirm. What kind of margin compression to price in within food and liquor if possible.

It would without break out our result and as I just said that hasn’t been a material shift in - in our businesses and apps and that deflation we would have grown our have affectively our food and liquor profits in along with our sales.

Okay. And - and maybe if you can provide a bit more detail obviously with the deflation and the sales growth we can back out volume there could you give us a bit more color particularly around the fourth quarter and how it compared to previous quarters either PC [ph] third quarter just around transactions basket the et cetera.

Well it said so interesting our transactions in our fourth quarter of being the strongest we’ve seen our comp transactions have been the strongest we’ve seen in over two years. And if we look at the volume plus the deflation, it would be a very strong performance in terms of that overall number because our - our comp volume growth also has been very, very strong during the fourth quarter. So underlying and this goes to the point of thinking about this for the long term. Our continued investment in the areas of - of lower prices fresh foods and service in our stores means that our customers will keep returning and we just have to ride through the high deflationary periods that we’re seeing if there’s if - if there’s issues like we saw in during Q4.

You also mentioned the impact of increased price competition even for changing the why you look at the amount of processing investment on a plane versus an unplanned bases.

Or what might - might my point on increase competition is that we’ve seen new entrants move into the South Australian and Western Australian market we’d planned for that and also planned our business to make sure that we were within our strategy doing exactly the same as we do on the East Coast, but we and as I said before we will invest in terms of our business through the fact that we take the savings out to reverse back in the business. So it’s planned in the sense that all of our investment is planned on - on that efficiency and productivity coming out of our business and of course with the strong and rigorous hurdles in terms of capital employment through Wesfarmers where we were very, very rigorous in terms of how we had to redeploy our - our investment going forward. So all of those, all of that rigor still remains the same and we’re very rational about how we do that.

And just this is upon how demand and on the returns have continued to improve been in Coles that reminds me of the prices that happened at Bunnings where price and price investments taken price margins compress but returns continue to improve. So that the - the ideal for Coles as well.

Well, margins is just an outcome so we will we get back to the boringly. But crucial elements of - of being customer focused and investing behind those customers driving our transactions which drives our sales in our OpEx [ph] scale and therefore we get our all of our profit out of an increase in terms of comp transactions particularly income volume in sales. And therefore the margin naturally will just be an outcome in terms of that. As I said before, we’re pretty rigorous and prudent about the investment that goes in and we’ve got to make sure that we’ve got that investment driven out of the business through efficiency in [indiscernible] we have to do that.

Thanks very much.

Our next question comes from the line of Grant Saligari from Credit Suisse. Please ask your questions.

Thank you. The first question if I could just follow on from that sales on Coles try to draw together a few points. I think you’re suggesting that the - the Coles business it’s in taint is the funded so price position with efficiency guidance and then you pointing to the South Australian, Western Australian and obvious entry of [indiscernible] the that we’ve had there and that should actually planned that have been, so I use to indicating that if we looked at the East Coast separately that the efficiencies that you've got would by broadly match the price investment, and what we've actually seen in the lower profit growth in the second half is you’re resetting the business in South Australia and Western Australia.

The way we think about the business is the way you’ve just described it through the efficiency productivity savings we’ve been invested [ph] also on top of this as we grow our sales and particularly our comp sales we fractionalized the cost within our business naturally. And we take all of those savings, and also out of the business and put them back in to create the [indiscernible] that we see and we we've been on for a while. In South Australia and Western Australia we are and have been just deploying the same strategy across the country. They just happen to be different markets now with more competitors in them and as I’ve continually said as long as we focus on our customers will absolutely deliver behind that strategy, and it is worth remembering that this isn't just a price discussion alone this is a value equation that certainly includes fantastic customer service and of course the supply chain that we've set up as many years, gives us a benefit in terms of the products that we sell over many of our competitors.

Okay. That's helpful. Thanks, John. If I get asked a second question just around the Resources business maybe just to help me clarify couple of points there. It just looked to me when I looked at the export revenue per ton in the second half that saying to lot lower than I would have expected just given the mix change that occurred between [indiscernible] in the business. And also on the cost side in the second half. I note Rob's point earlier around some one-off costs, some litigation costs and some for extra provisioning that have to occur, but it still looks to me like the costs in the second half for export mining and other costs were a lot higher than I would have expected just given the commentary around mine cost to Curragh so I just wondering if you could help me clarify those points please.

Sure Grant, so you look on the revenue side, it's largely a function of volumes, but if you look year-on-year, half-on-half the volume issue was a significant driver there. So I think that's probably the major point there. On the cost side it was in the second half when we had - we had the weather impacts which required us to drawdown materially on an inventory in order to deliver on sales. So whilst you would expect the cost to reduce materially in the second half because of production, the reduction in mine cash costs that largely offset by inventory drawdown and given that we've been reducing our costs overtime, the actual infantry costs were at a slightly higher cost than our more recent run rate. Some of the other factors I’ve talked to in terms of the increase in Port costs, the impact on rehabilitation movements also rehabilitation provisions also flowed through in the second half, but I guess if I flow on the most material issue it was the inventory movements.

Thank you. That's helpful.

Our next question comes from the line of Richard Barwick from CLSA. Please ask your question.

Hi everybody. My first question for John Durkan please. John, how many or what proportion of the Aussie supermarket fleet is in the renewal format currently and what are your plans there in across FY17 and beyond?

We would have, so I don't have the exact numbers, I get them few after, but we would have at least 200 supermarkets left to renew. We went renew all of those, because many of them will come to the end of their leases or will divest of them over repaired of time. This year we will renew between 50 and 70 of our supermarkets.

And is that number in addition to any stores that you open that you initially executing…

Yes, yes, so. Net we’ll open probably around 10 stores roughly 10 stores this year obviously to be closures within that. So the gross number be slightly high.

Yes, okay. All right thank you. And then the other question was for Guy on Target. You made the comment Guy at the Strategy Day that you thought that Target would be proper role in FY17 discipline to check if you still prepared to stand by that statement.

Well that's the plan. So we've obviously still going through this transitional year, which I’ve pointed that goes on the Strategy Day, but we're making significant changes to this operating model and probably not going as fast as what I intended to after reviewing uncovering different elements of this strategy, but sticking to the fashion piece of this puzzle for Target our new product that we've that we've decided that we will go with still doesn't land to after back to school where the store and the stock that we've got between now and Christmas was preordered [indiscernible] so we're still going to work through that but being commercially minded about delivering proper returns or positive returns, which it is still the goal and net of the team.

Results wondered and sounds like the sales momentum is perhaps weaker than what you had anticipated particularly with the absence of the toy sale and so, really I guess the question around how much of it was within your control around costs versus a getting a sales response.

Well I think the current trading that we have experience in that was on the fourth quarter of 2016 obviously it continued into the first quarter. The toy stall event removal putting that $75 million into toys in the adjacencies that came with it. Yes, predominately is laid by a sale that ends up being knocked back or big proportion of it gets returned back by consumers. And my mind goes still is committed to an ADLP [ph] model but to do that last model I think I quoted that I think the team before me had moved to about 70% to 80% ADLP this last 20% feels a little bit more difficult to change, I would do say, I have instructed the team lost with riddled with high lows and percentage offs in the last - comparing to the last year. We don't get first prize to go to a clean ADLP model and hurt margins at the same time. So I'm going to take my time to go a little bit slow on transferring to ADLP as I circle through some of the promotional events that happened in the business. I'm happy with where we've got stuck to, I mean that was pretty dramatic drop from 20 odd weeks to 15 are still got more to do and we’d still like to get down to 10 weeks and we still have some more upside although we have to carefully select the factories on increasing the amount of direct sourcing that needs to be done.

Okay, thank you. And just a very quick one for John Gillam, John did you say there was £30 million of restructuring in FY16 or FY13 you said?

FY13, 13.

13, okay, great, thank you.

Our next question comes from the line of Shaun Cousins from JPMorgan. Please ask you questions.

Thanks, good afternoon. Just a question for Guy, you’ve talked about the difference between Kmart t and Target, I understand you've highlighted that Kmart has a lowest process and Target has a low prospects. How are you looking to differentiate these two businesses, but also then where are they the same and where can you share product if at all please?

Yeah, sure. Maybe I'll do the second question - the last part of your question first about where can we share. Within the group Shaun and the department piece and Ian and Marina [ph] and now meeting monthly in regards to both businesses. We're still only have pushed the button on property and we continue to really look at that with a really fine lands these two stores that we will convert pretty Christmas, which will be added to the two shops that I mentioned to you that we did last year will give us another read. So benefits between the two groups real estates a piece of it, the sourcing piece we've just started to talk about that of recent Kmart has got a significant advantage not over just target the probably many competitors in Australia with a really fine model there of direct sourcing. So Ian and I were talking about that, but benefits of even if I was to do any of the basic line items from Kmart straight sourcing to target you could expect that that would be a good year or why just to get through the processes and more importantly ensure that accountability for target stays with the target team members. And then the first part of your question, Shaun was.

What’s the difference between the two businesses apart from Kmart being lowest process and target like process and target quite a bit more fashionability it’s curious that I had a consumer sort of realizing a target or not a Kmart.

I think they just look at the sign to check that they’re in attack of it. I mean that there isn’t a minute. So I pointed shouldn’t give a juggling answer because that’s normally the way to check out where you are. But it’s a large market and I think you’ve already worded the differences between the two I mean one is going to last $5[ph] billion base and the other one’s got a $3 billion price in revenue. One’s a little bit more upscale than the other but it’s a difference between a [indiscernible] and a small coverage [ph] and medium size [indiscernible] when you look at the price, RM [ph] differentiation between the two elements. One’s a little bit more feminine than the other. But the critical thing for me is - is making sure that and for a [indiscernible] we where we have got allocations to make sure that each one of them a profitable. And if we’ve added one or two too many over the over the years because of the separation this joint group allows us to have less emotion attached to decisions and making sure that we’re very commercial about every real estate business. There’s a lot of right target sites that do revenue as good as it’s all better than Kmart. The first year of this transitional years just to get the model right what’s - what’s hurting target is the process and product, the way we process and the why we bring product in.

Okay. And just a question, thanks. And this question for Rob Scott, just in terms of what’s if are you highlighted some challenges that business is facing for fiscal 2017. Should we look at fiscal 2015 as the base level of EBIT there, just curious about how things play out in terms of how they’re how much earnings could moderate, little bit there are all just or - or you confident that are earnings can actually be flat in the phase of those challenges plus.

Shaun really all I was doing was highlighting two things. One that 2016 was a very strong year where a lot of things were now why really strong operational performance in chemicals combined with a very strong one of the strongest fertilizer result ever now we are in a sector where not - not everything always right all the time. So I’m just signaling that there are variables, there are market variables and sensational conditions and some pricing factors such as [indiscernible] bit lower minor process currently quite large that just need to be bedded in the mine intent of the future.

Okay. Fantastic. Thank you.

Our next question comes from the line of [indiscernible] Evans and Partners. Please go ahead.

Hi, just a question on Coles and I wants getting back on these convenience business but listening to your answer I would actually so earnings probably went down in that business or at least on the pressure would that be the right way to think about it. If you’re signing your fuel volumes there which seeks cost leverage your non-fuel shows went up but it was because he lowered prices and to [indiscernible] and there was increased competitor activity on all of our same suggests it was more largely that business sized earnings pressure than actually had earnings growth.

I think the way to look at it, that there was that material change in the overall the overall business. As I said the shop business good growth we’ve invested in it. But it doesn’t have a material effect on the overall Coles earnings as it stands and on the fuel business we talked about that the volume and price but I would rule. As in the cost price is coming down as well as the headline process in terms of feel [ph] but the whites look at it in reality is that there’s no material change.

Okay. And then one are just sick clarification, John in Bunnings. Could you say Bunnings Australia and New Zealand sounds strange in the first quarter of 2017 similar to the fourth quarter of 2016.

I felt no, I’m, I comment is on you U.K and Holland where are talks about the store transaction grows store transaction growth that we’ve seen on a large block basis across completion through the end of June has continued into July.

Okay. Can you mention how things are tracking today in a Australia and New Zealand and we locked lot go I was mentioning the target.

We don’t have Toys house [ph] feel sorry. So I just enjoyed a little moment there we thought of placing stock through the new financial year but very early days and generally we rejoined more to get too far ahead of ourselves is like as I mentioned before and one of the questions is a fairly significant one of event that’s learning.

The trial by your side is a nice byproduct of suggesting that stop more actually be purchased by someone cited in that case it might not be clean in Australia.

I’m not sure, I would believe that at all.

Okay.

I think the firmness referred very referred might have an engagement to clear all of it here.

Okay, not offshore. Thanks.

Our next question comes from the line of Craig Woolford from Citigroup. Please go ahead.

I think guys had a [indiscernible] I joined I can carry a lot of questions for more for. The first one is just around the CapEx, the other of CapEx fell by just one time a minimum there was another about far less store I’ve been FY16 versus FY15 in the season market saw that wouldn’t fully explained just want a feel of the ongoing CapEx in a [indiscernible] Cole business.

Hey, Craig no problem. And so we’ve been as we as you know we’ve been investing in some material projects over the last 12 one shop and others like that - that don’t repeat themselves going forward. We will see we renewed our stores our last years than in the last couple. What - what we’re looking at CapEx is in line with our growth and our earnings so need the same hurdle rights is as we’ve had in place all the time. So you should say as Terry said you should see a moderate approach to [indiscernible] spend going forward than and you’ve seen in the past.

Okay. We could [ph] so there’s no lumpy CapEx I thought there was a potential for supply chain what distribution center investments would rate on the [indiscernible]. number one the damage track.

Well said we don’t have any we don’t have any at the moment on the books any major extraordinary capital expenditures coming forward.

Okay. When we have just in a number of products on [indiscernible] we claim quality 3100 is that referring to Coles supermarkets alone or is that included with that.

No, it is Coles sheet [ph] markets.

Yes. I think that the strategy guy…

A smaller mission a smaller [indiscernible] that.

Yes. That that strategy guy was 2700 from memory and then relationships where they could thousand problem [ph]I would there were added on to that name by imprint the whole bottle branded on the take and offered your pay [ph]in the last two months.

No, it doesn’t do that sort of the number we created on it was the fourth quarter number, third quarter number. We form, we always products come on off every day value on a regular basis. Some are better than - than others. But I would have to give you that direct call that they’re not comparable numbers in terms of the 3100 versus 2700 in terms of just naturally 400 come off on all, and if you’re referring to prices going up, they clearly haven’t done over that back quarter. In fact we’ve seen process come down as I said our deflation in grocery was as strong as it’s been all year.

Yes, okay. Thanks, John.

There are no further questions. So I now hand back to Richard.

All right well thank you for your time and we’ll look forward to catching up with you in the near future if you’ve got any follow-up questions. Please come through Alex and we’ll deal them. Have a great day.

Thank you very much. Ladies and gentlemen that does conclude our conference for today. Thank you so much fear attendance. You may now disconnect.