Good morning, everyone, and welcome to the Woolworths Group Full Year Results for financial year 2019. I'm joined in the room today by my fellow presenters, Stephen Harrison, our recently appointed Chief Financial Officer; and David Marr, our Chief Operating Officer.

Also joining us in the room is the Managing Director of Woolworths Supermarkets, Claire Peters; the Managing Director of Endeavour Drinks, Steve Donohue; WooliesX Managing Director, Amanda Bardwell; BIG W Managing Director, David Walker; Managing Director of our Group Portfolio, Colin Storrie; and joining us on the phone from New Zealand is the Natalie Davis, Managing Director of Woolworths New Zealand. I will begin with a brief summary of key points for the year, followed by the progress we have made against our strategic priorities.

Stephen Harrison will then present our financials, followed by David Marr, who will provide an update on the Endeavor Drinks and our latest transaction, before turning back to me to provide an update on our outlook and any questions you might have. I wanted to start on Slide 4 of the presentation.

It's really just as a summary, a high-level summary for F19. The headline to us was despite a challenging start to the year, we made - we had a strong second half and ended the year with good momentum.

Critically important for us, our customer scores improved over the course of the year, in Australian Food VOC Net Promoter Score ended the year three points above the prior year, and our full controllable Voice of the Customer was resilient at 82%, despite a number of challenges starting with plastic bags and then in Q3 with some of the quality issues we had with fruit and vegetables, and even the droughts and floods in Far North Queensland. Group sales and profit momentum also improved in the second half, with normalized sales and EBIT growth of 4% and 10% for H2.

Group online sales continued to grow strongly, increasing by 32% on a normalized basis compared to the prior year to $2.5 billion, and online penetration is now 4.2% on group sales. BIG W's underlying trend performance continued to improve with comparable sales growth of 5.3% in F19 and 7.2% in Q4.

We are pleased with the strong improvement in sales growth in F19, but have not been satisfied with the rate of translational sales growth into profit growth as we talked about in March. And as a result, we announced the outcome of a store and DC network review to accelerate the path to profitability, and we have now confirmed three stores to be closed just after Christmas.

We also completed the sale of our Petrol business on 1st of April, with the proceeds returned to shareholders by an off-market buyback in May. Together with a dividends paid during the year, cumulatively, we returned $3.1 billion to shareholders during F19.

I'll just move briefly then to Slide 5. It is a reminder of the Woolworths Group priorities by F19, and this is how we measure our progress against our strategy.

[indiscernible] always update our priorities to ensure they remain relevant for the Group. The good news for our team is they remain relatively unchanged for 2020.

In terms of other priorities [indiscernible] how we feel we've gone against the priorities, and you'll see that on Slide 6 and then on Slide 7. [indiscernible] Purpose and Build, our customer first and team first culture.

As I mentioned, one of the highlights was the resilience we saw in our customer scores over the course of the year, despite a number of challenges, and the fact that in all of our businesses, we ended very strongly on both the customer and sales basis. I think this is testament to the customer first, team first culture we are embedding across the Group.

In addition to the improvement in the customer scores, we also launched a number of very important initiatives for our team in the business. Starting with new Parental Leave Policy and the fact we paid superannuation for 12 months with Parental Leave, a critically important mental health program: "I am here", and we had 22,000 people - team members inside the group, now participate in the program.

And last, but certainly not least is the implementation of Australia's largest enterprise agreement for Woolworths Supermarkets and Metro. As we move with our priorities, while we may progress, there are always many things to do.

And of course, in mid-20, as we look at this part of our half, we have another very busy change agenda. And the challenge for the Group will be to progress this change agenda, while continuing to improve the experience for our customers.

During the top of the half, our second priority is to create connected, personalized and convenient shopping experiences for our customers. Again, as mentioned in our highlights, online growth remained strong during the year with online penetration of 4.2% of group sales.

WooliesX and CountdownX continued to build on these foundations and Endeavour Drinks was established during the year, to ensure a consistent approach to digital and data across all of our Endeavour Drinks businesses. BIG W Online continued to grow strongly, more than doubling over the last 12 months with growth rate and pick-up remaining very strong.

Despite the rapid growth of online, we also worked on improving the operational performance of this business. And our margins in the X businesses and particularly WooliesX, continued to improve.

And at this stage, if I looked at the overall Australian Food Group margin, we've made material progress on reducing the gap between the margins we find in our stores and the margins we generate through our e-commerce business, a very pleasing customer and financial result additional. We provided our customers with a number of new ways to shop during the year, we now have 112 Drive ups and Drive thru, and materially increased our stores offering for on-demand, with over 730 stores across the Group at year-end, providing on-demand services.

This is primarily through BWS, but we really sort of ramped up diverted and in more recent times in supermarkets with 39 stores at the end of the year, providing on-demand. Committed to build on the online, we are also about offering more convenience over locations through our Metro stores and more convenience for our customers in the context of our supermarkets or our standard stores, of course.

Metro stores profit continued to grow strongly. And at the end of the year, we had 43 branded Metro stores, and in F20 we expect to add another 15 to 20 Metro stores as [indiscernible] gathers momentum.

Going forward in this space, the only challenge for us is keeping pace with our customers' expectations around convenience and ensuring that we leverage technology to help us do this very efficiently as possible. If I go to the rooms of our house, and that's really - you see it on page - just on the end of Page 6 and then going into Page 7.

In our food businesses, it's all about differentiation for us and trying to provide a differentiation in the minds of our customers as to our proportion relative to both of our customers - of our competitors. In this context, our renewal program continues to evolve, with our first smart store in Gregory Hills and new fresh experience in Mona Vale and Takapuna in New Zealand.

Our brands continued to grow strongly, supported by double-digit growth in Macro and are free from range. Differentiation is also critical for what we ranged to ensure new stock is derived for local customer preferences.

And in that regard, in terms of localized ranking, we've made really pleasing progress in international food, health and value-added fresh and Fresh Made Easy. We also continued to focus on developing our new exclusive brands across two point difference for Woolworths customers.

And as I mentioned in the media call, what I'm really proud about in the own brand space was the recognition we got as Australia's healthiest supermarket own brand portfolio. Moving on to Slide 7 in drinks business.

We have been speaking for some time about accelerating innovation in our drinks, and evolving the business to meet rapidly changing customer needs. While the financial performance of the Endeavour Drinks in F19 was slower aspirations, we have taken a number of positive steps during the year, driven by our ambition to connect everyone with the good experience and see some very pleasing early signs of improvement, somewhat you can see it in our Q4 results and that has certainly continued into the first eight weeks of F19.

The biggest changes are happening at Dan Murphy's, with the repositioning of the business focused on discovering customer first ranging, which has been very successful in our food business and in BWS, is well underway within Dan Murphy. In addition, at year end, we had 35 wine merchants working in key Dan Murphy's stores, providing authenticated discovery experience for customers.

As mentioned, EndeavorX was established during the year, to ensure consistent digital experience across Dan and BWS, and the other Endeavour Drinks businesses. And we have made very good progress in this context on increasing convenience to customers during the year.

As I mentioned through the scale up of on-demand, the rollout of 30-minute pick up to Dan Murphy's Metro stores and the continued expansion on Jimmy Brings. In F 2020, we have more work to do to continue to build operating momentum in Endeavour Drinks as we work towards the separation of Endeavour Drinks and ALH in calendar 2020.

Going to our portfolio, it was an incredibly busy year and successful year for our portfolio team as we made good progress in unlocking value for shareholders. We completed the sale of Woolworths Petrol to EG Group in April with the proceeds return for annual market buybacks.

We also announced the outcomes of the BIG W network review and while there was a decision not taken while to the closure of around 30 stores in 2 DCs over the next few years. We need to have more sustainable store and DC network and will support the operational improvements coming through the business as you will see high in our FNQ team performance.

We also announced one of the most significant transactions in the history of Woolworths Group with our intention to merge Endeavour Drinks and ALH followed by separation of Endeavour Group Holdings in calendar 2020, with an ongoing partnership with Woolworths Group going forward. There is a lot of work to be done, but we are well underway and David will provide a more detailed update shortly.

In an increasing digital world, we need to continue to work on being more efficient in everything we do and leveraging technology to help ensure that our interim processes are better and simpler for customers and for the life. We have a number of efficiency initiatives in place across the Group, and now are building momentum.

In Q4, we announced the first change to our Woolworth's Supermarkets operating model in a number of years that’s four levels to ensure that our four teams, our stores organized in a way that protects how our customers want to shop us. While these changes are never easy, we are confident that it will result in a better outcome for our customers and a more sustainable operating model for our team.

Stockloss in F19 was disappointing and we have implemented a number of initiatives to get it back on track. We started to see some signs of this improvement over the half in particular in June and we're very focused on that accelerate in June into F 2020.

Our Melbourne South Regional Distribution Centre or MSRDC is now at running and we're looking forward to the material improvements in Woolworth. However, we have decided to keep our two DC open until early calendar 2020 albeit operated at lower volumes to ensure there is no impact to our Victoria customers over the Christmas period.

As with all parts of our half and just looking at the bottom of our half our process is our work is never been done in the space. But we have a number of important initiatives underway, which I think will place us in a very good place in 2020 and the highlight to me on this part of the half is most of these initiatives started in Q4.

So, it's how we’ll build on them over the first and second half. Finally on Slide 6, I wanted to conclude with the Woolworths Group ecosystem, whole food and everyday needs to retail will remain the key part of our business going forward.

But we are increasingly excited about the opportunities to extend our brand into new channels and extend our range of products and services. New channels of course include a B2B wholesaling exports and new services, include same day pickup and delivery and on demand delivery.

None of us would be possible without the investments in our core Group platforms over the last couple of years. We have now during the end of a material systems upgrade program and which is a key part of our platform and I'm confident we now have our key and data platforms that are increasingly low cost in many areas.

So very pleasing progress towards the context of F19 on our strategic priorities, as I say particularly in the second half with a real momentum on these parts as with our financials into F 2020. I will now turn over to Stephen Harrison, who will present our financial results for F19 before David will provide an update on Endeavour Group transaction.

I will then come back and provide an update on our outlook.

Great, thanks Brad and good morning everybody. For those of you who I haven't had a chance to meet I look forward to meeting you over the coming weeks.

So let me start on page 11 of our results presentation where I'll give you a quick summary of the 2019 Group results. And I wanted to start, but just giving you some context on how we presented the results.

So three things before I get into the detail I just wanted to highlight. First the continued operation excludes our Petrol business which was classified as discontinued operations until the sale was completed on the 1st of April.

As Brad mentioned for FY 2019, we had a 53rd week so mostly I’ll refer to the normalized column which is adjusted to remove the impact of that extra week, just to help with comparability. And then finally in F19 we booked two significant items being the charge associated with the BW network review of AUD371 million before tax and the gain on the sale of Petrol of 1.1 billion.

So starting on the right hand side of Slide 11 for F19 on a statutory basis, the Group reported an EBIT of $3.6 billion, an increase of 29.5%. Group NPAT including discontinued operations and after significant items was 2.7 billion, up 56% on the prior year.

Moving to continued operations, sales from continued operations were 60 billion, up 3.4% on the prior year. All continue to be business units delivered higher sales growth in the second half compared to the first half which we’re very pleased.

EBIT from continuing operations was 2.7 billion, up 5% on the prior year driven by a 3.8% EBIT growth in Australian Food a 24% reduction in losses in BIG W and a reduction in central overheads, reflecting some individually non significant one-off items that I will explain shortly. These were partially offset by 9.7% reduction in EBIT in Endeavor Drinks.

Regarding the one-offs I mentioned, the Australian Food results in H2 includes a charge associated with the implementation of new operating models. In Endeavour Drinks, we recorded the impairment of the carrying value of the Group's investment in Summergate in China.

On the positive side of the ledger, however, with a $50 million payment from Caltex which we previously flagged and the reversal of the property impairment on our property held for sale at year-end in [indiscernible] where we now have a binding agreement for sale. NPAT from continuing operations was up 7.2% to 1.8 billion and EPS was up 6.8% and I'll cover dividends and ROFE shortly.

So turning over to Slide 12, Australian Food EBIT was up 3.8% to 1.9 billion, with broadly consistent growth across both halfs. Sales momentum improved in the second half, but GP was marginally - GP margin was below last year largely due to higher stock cost particularly in half two that Brad referred to.

On the flip side, CODB was well controlled and benefitted from our focus on productivity and cost control. As I mentioned half two CODB included a charge and the implementation of new operating models, which was broadly in line with one-off costs in the prior year.

While the Supermarkets and Metro EA was implemented in – early January. The cost of implementation have largely been provided for minimizing the P&L impact in half two.

As a result, the full impact of the new EA, we felt in F 2020 before any offsetting productivity initiatives. Turning to New Zealand Food, EBIT increased by 1% in New Zealand dollars reversing the 2% EBIT decline in the first half.

Online sales growth remains the highlight in New Zealand with normalised growth of 40% supported by the establishment of CountdownX during the year. Endeavor Drinks, EBIT declined by 9.7% to AUD74 million.

The underlying the performance of the business did improve though in the second half, but EBIT include a AUD21 million impairment charge related to intangibles associated with the Summergate in China. Excluding this EBIT declined by 6% in F19.

BIG W reported a loss before interest and tax of AUD85 million, a AUD25 million improvement on the prior-year. Sales growth in the second half was very strong with comparable growth of 7.3% with the highlight being improvement in apparel Hotels EBIT of 261 was broadly flat on the prior year.

Again, the business had a better second half with strong growth from Bars, Food and Accommodation with gaming more subdued. And central overheads, was AUD60 million in F19 and included some of the one-off gains that I mentioned earlier.

We still expect central overheads to be around 150 million per annum on average, before any costs associated with – the Endeavour Group transaction in F 2020. Turning to Slide 13 just quickly covering some balance sheet metrics, average inventory days from continuing operations, showed a further improvement on the prior-year declining by 0.2 a day to 38.8 days with improvements across each of Australian Food, New Zealand Food and BIG W.

And normalised return on average funds employed from continuing operations was up marginally benefiting from improved EBIT growth in half two and trade working capital improvements. We've also shown at least an adjusted royalty estimate on adoption of AASB 16 at 14.1%, which I'll talk to you a little bit further.

And in the coming slide. Turning to cash flow on Page 14.

We've presented the total Group, including discontinued operations and significant items. Cash flow generated from operating activities before interest and tax was 3.9 billion, up 0.5% on a prior year, due to higher EBITDA from continuing operations before significant items and improved trade working capital.

This was offset by the timing of the New Zealand - and New Zealand creditor payment run in the last week or 53rd week in a year, and a reduction in provisions and accruals. Interest paid declined by just under 10% due to the repayment of higher interest rate borrowings in the prior year and tax paid increased by 12.6% due to higher tax installment rates and higher refunds of tax in the prior year.

Cash used in investing activities were 246 million, a material reduction compared to the prior year as a result of the sale proceeds from Petrol, the entire proceeds of which as Brad referred to earlier, were returned to shareholders via the market buyback in May. Dividends increased to 1.3 billion compared to the prior year.

The F 2019 included the final F 2018 dividend with a special dividend of AUD 0.10, we had a higher into interim dividend and cash impact of the lower DRP following the removal of discount also reflected in our cash dividend payments. In terms of net debt, it increased by 377 million, largely as a result of the New Zealand creditor payment timing, high gross CapEx and higher dividends.

Our cash realization ratio was 74% for the year, but we've also shown a normalization of this because that 74% was impacted by some of the timing issues, I mentioned earlier. So on a normalized basis, excluding significant items and the New Zealand payment timing issue, the cash realization rate was 98%.

And as a reminder, cash realization is always lower in the second half due to seasonality as we flagged at the half. Turning to Slide 15, operating CapEx for the year was AUD1.8 billion at the top end of at 1.7 to 1.8 guidance range, largely as a result of AUD80 million of business acquisitions including CapEx and higher spend on MSRDC and renewals in Australian Food.

Renewals and refurbishments remain the biggest bucket of spending comprising 35% of operating CapEx, which is broadly in line with FY 2018. Turning to Slide 16, quickly on capital management.

The Board today has approved a fully-franked final dividend of AUD0.57 per share, which is up 14% on the prior year. The full-year dividend of AUD1.02 is broadly in line with the prior year total dividend, however last year did include a AUD0.10 special dividend.

The dividend represents a typical payout ratio of 70%, which we base of NPAT from continuing and discontinued operations but before significant items. The dividend includes earnings from the 53rd week and nine months of Petrol earnings.

Across the year and F 2019 we did return 3.1 billion to shareholders excluding franking credits, reflecting our strong focus on capital management in enhancing shareholder value. Quickly turning to Page 17.

The Group remains committed to a solid investment grade credit rating and we have BBB and Baa2 ratings with both our major rating agencies and a stable outlook. The Groups' sources of funding and liquidity remained strong, as highlighted by the recent Green Bond, which was materially oversubscribed at very attractive rates.

Turning to Slide 18. I wanted to just quickly provide an update on the new lease accounting standard, which comes into effect on 1 July, 2019 for the Group.

There are a few slides, but don't worry. I'm not going to talk through all of them.

So before the implementation of AASB 16 on the top of Slide 18, we held off balance sheet commitments of 21.8 billion. On adoption of IFRS 16, using the modified retrospective approach, our balance sheet as of 1 July will change with assets increasing to $36.4 billion as we recognized a lease asset of $12.2 billion while liabilities will increase to 27.1 billion, as we recognized a lease liability of 14.7 billion.

On the second chart on Slide 18, we show a reconciliation of our off balance sheet commitments of 21.8 billion as at 30 of June to the lease liability of 14.7 on 1 of July 2019 on adoption of the new standards. And in the reconciliation below, we tried to highlight the major differences between the off-balance sheet commitment and the new lease liability.

Quickly on Page 19, we provided a breakdown of the lease assets and leased liabilities by business unit. Not surprisingly, Australian Food makes up the majority of both the lease asset and the lease liability.

Finally on Slide 20. We've shown a more detailed analysis of the impact on the F 2019 P&L assuming the new lease accounting standard had been in place for the F 2019 year and the AASB 16 EBIT would have increased by around 600 million, if the straight line operating lease rental line is replaced by depreciation of the new leased asset and the service component of rent such as outgoings.

Of course, the new lease interest embedded in the lease will now be recognized below EBIT. Profit before tax on implementation will be lower under the new standard due to lease depreciation and interest excluding the - exceeding the rent under the old standard given the relative immaturity of our lease portfolio.

And finally as a reminder, there is no impact on the cash flows of the Group from the implementation of AASB. So that's it for me.

Thank you very much. And let me now hand over to David to provide an update on the Endeavour Drinks and ALH transaction.

Thank you. Steve.

Good morning, everyone. Let's turn to start on Slide 46 for those following in the pack and just run through three or four slides briefly.

So on 46, as we announced on 3rd of July, Woolworths Group is merging Endeavour Drinks and ALH into a combined entity, which we expect to call Endeavour Group. Following this merger, we intend to pursue a separation of that combined Endeavour Group.

Preparation for both the merger and separation is on track with dedicated internal team and advisory group working on the transaction itself, as well as the operational implementation aspects of both the merger and separation. We will be implementing the first date of the transaction via a Scheme of Arrangement, which will transfer the assets and liabilities of Endeavour Drinks to the new combined entity.

On Slide 47, we outline some of the key milestones for your information. This scheme is subject to both shareholder and court approval, we expect the first court hearing to be held in late October, after which we will dispense the scheme booked to shareholders in early November.

We're planning to shareholder approval to be sought on the same date as Woolworths Group AGM, which is now on scheduled for 16 of December. Following the shareholder vote, if shareholders approved this game we will go back to the court in late December and takes final approval for this game, let’s say merger and restructure than becoming effective in early Feb.

And of course, subsequent to which we'll continue to plan for the separation of the new Endeavour Group in calendar year 2020. Slide 48 for your reference, this highlights the mutual importance of ALH and Endeavour Group on each business.

As the table at the bottom point, Endeavour Drinks operates a network of almost 1600 BWS and Dan Murphy's stores approximately 600 of which or 38% of which are owned by the ALH entity. In F 2019, these 600 stores, accounted for 29% of the combined Endeavour Drinks hotels revenue, as you can see in the pie on the right hand side and 24% of the combined group's EBIT, which we will touch on now on the following slide.

So moving to the following slide on 49, it's quite a busy slide, let me just step you through it. This slide effectively highlights how ALH’s business is currently included in the Woolworths Group segment reporting and what a combined Endeavour Group would look like if we were to report that is a segment today.

Just on an indicative pro forma base. So, just stepping through, Endeavour Drinks includes both the wholly owned retail businesses , which is Column A and the purple on the left hand side, as well as the 600 retail stores owned by column - by ALH which is column B.

We do this because this effectively reflects how that business is managed, how we report internally and whereby Endeavour Group’s is primarily responsible for the management of the retail business and ALH is primarily responsible for the operation of the hotel. Also included in the Woolworths segment is the hotels themselves just Column C in the third, the blue column, third from the left.

It is included as Hotels, as the name suggest, not total ALH, includes of course the retail component is already included in drinks. The pro forma Endeavour Group, therefore is highlighted on the fourth column with the red outlined box, which is an indicative aggregation of all of retail as well as the hotels.

You'll see in that column, the outlined red box, we've included a pro forma NPAT for the Endeavour Group, which includes the impact of the current $1.9 billion of debt currently owned by ALH Group to Woolworths. This debt will need to be refinanced – restructured and refinance externally, prior to separation in 2020.

Under the merger of ALH Group and Endeavor Group, Bruce Mathieson Group will swap its 29% economic interest in ALH Group, for a 14.6% stake in Endeavour Group. This economic interest is greater than BMG 25% ownership, effectively reflecting other contractual entitlements they receive; most notably, a preference dividend.

Both the ownership, the ultimate ownership outcomes of Endeavour Group were derived by a number of valuation techniques and of course negotiation. The relative pro forma NPAT shown on this slide indicates transaction is a very fair outcome for both parties.

Thank you. I'll now pass back to Brad, to cover the outlook.

Thank you, David. And I'd like to congratulate Steve on his - for starting as the CFO, and David as COO, presenting possibly the most complex slide.

So clearly, we never put in a presentation on Slide 49, and I encourage many questions to go back to David. Turning to the outlook.

We ended F19 with good momentum, and this has continued into F20, with Australian Food as the highlight. Comparable growth in Australian Food, for the first eight weeks is around 7.5% Clearly this needs to be viewed in the context of the challenging sales we had last year; and on a two-year average basis, comp sales growth is around 4.5%.

While sales momentum has been good across the Group, we remain cautiously optimistic going forward, just given a lot of uncertainties we see in the consumer environment and the various input cost pressures we need to work through across the Group. In Australian Food, we have a number of initiatives that should support sales over the next 12 months, if we execute effectively.

Online sales are expected to continue to grow strongly, and we plan, as I mentioned at the outset, to ramp up the number of Metro stores being opened in F20. We do have some well documented headwinds.

Clearly, the impact of our new enterprise agreements and Australian Food, and these input cost pressures. However, our simpler initiatives are delivering productivity benefits, and we should also begin to get the benefits from MSRDC in the second half of F20.

In New Zealand Food, the team remains focused on value for customers, fresh and customer experience, while continuing to progress new version of Simpler stores. Endeavour Drinks will continue to evolve to improve the digital experiences, deliver more localized range and improved service and experience, and build on the operating momentum we started to experience in Q4; in particular, in Dan Murphy's.

In terms of BIG W, we expect a further reduction in losses in BIG W as we continue to focus on maintaining sales momentum, improving the operating performance of the business, and taking vegetables in more sustainable store network. In conclusion, as always, I would like to thank our customers, team and investors for their support.

And I will now hand back to the operator, to open the line for questions.

Just a question regards to Food and how the enterprise agreement burden will be offset in fiscal 2020. I assume the $35 million cost in food CODB won't repeat.

So that will help, and you'll get some operating leverage sort of benefits from the strong start, which won't be continued but still quite good. But maybe how you think you can get the benefits that you're getting and maybe if you could put them in buckets in terms of getting gross profit dollars out of supplier for mitigation, the automated DC, does that actually net help you out or are you - orders running do you see offset with the rostering benefits, are there any other benefits and maybe in the past you've highlighted D&A growing.

So maybe if you could go through a couple of buckets about where you see sort of benefits to help you out to offset and confirm it's $150 million the cost that you've got, the pay?

Shaun, I don't know if that's one question or 20 questions. But let me take a shot.

If I don't get it right, please come back and ask more specifically. Let me just - so I think the two components are, what we're doing in the GP and then what are we doing in the CODB.

In the GP, as we called out, we had a challenging year on the stockloss in F19. That does need to be seen in the context of a good 2018.

But we really decided to change our stockloss processes in January, February, unless we ended up with a good exit rate. So just to give you a sense of the numbers, because I think it's quite important, stockloss in H2 ran at about 3.2%.

Overall stockloss for the year ended about 3.1%. That's materially up of what we were in 2018.

But we exited, let's say, materially lower than that in June. And our key focus of course is to continue to focus on improving it.

The improved sales do help stockloss, unashamedly; but there is a number of other exciting initiatives underway that we can talk to in that space. But that is a key lever for us in the context of GP.

On CODB, we've been well aware of our need to drive, say, a series of programs across the whole of Woolworths. And they come in various manifestations of course.

The customer operating model we put in, which I'm alluding to, which we have provided in H2, does have material benefits to us both in terms of customer end experience, but also it does also help us with our overall operating costs, in particular as we work to deliver that underpin the new operating model. So that is a key platform for us.

That's why we provided for this, while we got it underway in late May or early June in Woolworths supermarket. In terms of other initiatives, we've got sit in there.

We have a number of other more specific process improvements under the Simpler moniker and Woolworths Supermarkets. Again, Claire, can talk to them.

But it's huge benefits in the middle of our store through just the whole way we flow product to shelf. And just to lift our overall [indiscernible] to that part of our business.

And then also additional benefits at our front end as we lift our scanned rate. This particular issue was one we were quite positive about realizing benefits from F19.

With plastic bags and everything, we never truly go to where we quite wanted to. But it is a material opportunity as we get into 2020.

So, our operating momentum was at this core process improvement frontend center of store, in particular. And then we also, in Q4 of F19, also worked very hard in simplifying our support office.

And so we did a whole simplification piece of work in the support office; which, again, is in that number we talked about that we provided for in the second half of F20, just to make sure we have the right exit rate on our overall above store cost structure to be. So lots underway, lots to do but really, a lot of benefit there.

If I turn there specifically to the MSRDC, we see material benefit improvements from this and we will start seeing those hopefully in H2 into F21. The reason we did not close [indiscernible] but extended it; the truth is, we have this great momentum down in Victoria and Tasmania in our business.

And it just was not a risk itself, sensible to take, given the momentum we see in the business. So it was a very considered decision.

It will cost us some money, but it's not - wouldn't overstate what it cost us. It really was just a very sensible taking if we wanted to put in the business.

So, Shaun, there's always lots to do in the P&L. But, actually, as I mentioned at the outset, these initiatives, we've been working on all year in 2019 and being very-very focused on the exit rate in June of 2019 to make sure we got flow into 2020.

Last year, the real challenge for us was, as you know, with the challenges about plastic bags and number of other things. We never quite got the right rhythm we aspired to in the first half.

And we're planning to change that this year.

And so maybe just to clarify just two specific points; D&A has been growing quite significantly, will that continue in fiscal 2020, or will that sort of moderate? And has Peter Marks been effective in getting some GP dollar growth out of suppliers…

So I'll let Steve talk specifically to depreciation/amortization, but as we called out in the release. It will continue as we are going to production on MSRDC.

And as we continue to build on our renewal program, which we are still very pleased with the results we're getting, but Steve do you want to talk about that and I'll come back to overall GP 40.17.

Yes Shaun so certainly we did see that big increase in depreciation in F 2019. We would continue to expect depreciation to grow in F 2020 and particularly as we start to depreciate MSRDC, but we continue to have depreciation on things like our renewal program, but also increased investment on some of our shorter life digital assets.

So we would expect depreciation to grow maybe not quite at the same rate, but certainly you should plan on that in F 2020.

In terms of overall GP for Australian through the Woolworths supermarkets and Shaun and we call this out in media call the biggest challenge, we actually had to GP before stockloss in 2019 really was in protein in particular in red protein and in our GP, which is still go down in 2019. We actually thought we couldn't pass on all of the input cost pressure we were bearing to our customers.

So that's one of the reasons you will see it come back that's been a real challenge for us, we do expect that part of our business still to be very challenging, as we go into 2020 and we talked about some of the other meet challenges we had there. So that's really - that's where the real challenge in GP is.

If I go to the low loss side of our business what we've been working very hard on is trying to get into more sustainable promotional plan and that's where our biggest upside is. It's not actually and how we negotiate with our suppliers, but I will come back to talk to that specifically, but just making sure that promotional moneys are well spent for everyone involved and so sustainable promotions and lot of work around with our promotional effectiveness tool.

We've actually reduced the number of promotions we had in the business as we had in the last couple of years, but actually the promotions we do have more impact. So you don't see it competing in the numbers, but it is a material benefit for us going into F 2020 to continue to have less, but better promotion.

So that is a big opportunity for us. In terms of how we deal with overall supplier cost increase request, it is dealt with as you know on a case-by-case basis we don't use the word mitigation in our business anymore, Shaun.

We actually deal with them as we should consider everything in the context in which is considered. We've had more than we usually do, we've actually accepted more than we usually do.

We just got to be very careful that we don't in any untoward way cost more to our customers who are full of course trying to balance their budgets.

So just first on Dan Murphy's can you elaborate Brad on the reset or repositioning of Dan Murphy's the liquor comp was a big itself did in the fourth quarter I don’t know whether that was indicative with the Dan Murphy's result. But if you could earlier elaborate on where you're at with the Dan Murphy's repositioning I guess what we should expect to see coming into FY 2020?

Yes thank you Grant it was you know year that we really did a lot of work on in many ways refocusing Dan Murphy's we set I think is too strong word. But I refocus on what made Dan Murphy's so successful in the first place, which is broadly covered under the topic of discovery and be in a place where you can start a great prices, great range, great service we’re taken on great adventures and so on.

So it was really staring to the business led by Steve, and I am going let him speak in a moment Donohue on this topic of discovery and how we get that right. And we've turned up every part of that Murphy's and how do we get the spirit of discovery back into the business.

On range it's been about our customer first ranging process but index to interest the first area that we rolled out, is that we just won't impact, which is a seven year bond and Steve will talk to us. We've not and shorten that we're willing to progress into the rate environment side but one just go back into our Q1 stores to really hand inside our customers.

We launched - my Dan Murphy's with the rebuild of the personalization engine to provide the right office into our customers. We move to the whole marketing program that sits around.

And so and then underpinning that has been just this work on convenience, which is a massive opportunity Dan Murphy's is very, very convenient in ways that actually no other retail can be in the team to lean into that. It took us the whole of the first half to really land these initiatives and as part of that quite pleasingly in the second half.

In terms of the specifics Steve of Q4 and Dan, can I turn to you, give a bit of color to that.

Let me start by saying Grant. It's really difficult to look at these two quarters in isolation given the movements of these even external these sorts of things.

So I have tended to have more of a focus on the half and really pleasingly both Dan and BWS accelerated their sales growth in the half. And Dan’s actually accelerated a little bit more than BWS so that was positive.

To Brad's points the big areas of movement around the range experience with customers, the service experience and customers and the convenient that we're giving them through the digital platforms. Now Brad mentioned the range working customer first ranging Dan's in the last half added about 260 new wines to the range and that's in stark contrast to what's happened over the last few years.

So it's becoming much more dynamic and specifically in Sauvignon Blanc, the customer first ranging program delivered 300 basis points of growth versus the prior category event that we had. So that one's working really well for us we just landed chardonnay and I were in the process of rolling out red wine.

So we are taking the learnings from supermarkets and from BWS which has been very successful with customer first ranging and started to apply to Dan. On the service experience, the wine merchants in 35 stores have really seen a nice uplift in customer feedback on team knowledge and we put these team members into stores where we have bigger baskets for wine and higher average bottle prices, but both the basket sizes and the bottle prices are moving very positively.

So that's good and , on all of our brand metrics - our customer brand metrics to Dan Murphy's we saw a nice pop in Q4 in the last we did right across the range of questions we ask customers. So that's been really good.

And then a brief note on so far this financial year the momentum has continued and we've had very positive results from the new Penfolds release which has actually surprised us on the upside. So that's been good too.

Second, just on food - I think there is a market expectation that the margin, the EBIT margin should be increasing in food and it's not. And you sound in your commentary quite a note of caution I guess, around price pass-through and the state of the customer and simultaneously you're putting a lot of change through your food business.

I'm just trying to get a sense of what we might be missing way in terms of the market might be missing in terms of that expectation for margin improvement. Given the sort of things you're talking about with the customer and the change that actually going through your business.

So anything you could elaborate on that?

Yes, thank you Grant. I'm just trying to be cautiously optimistic if I sound and I'm trying to get the balance between those two words.

So it sounds like I'm getting more index on cautious and optimism, but it really is cautious optimism we've got. So really pleasing start to F 2020 the number one risk in any business is humorous and that's not what we need.

We've got a clear plan we need to execute against this, should always plan against the downside and look for the upsides. So we are cautiously optimistic, as I said, when you look at the start it’s been great.

Not only have we got momentum risen into customers across our various products and services. But it's given us an ability to crack along with our strategic plan, which is the key to driving our growth.

So we don't feeling the bad place, but things can change very quickly. So it's good to have a very cautious approach to retail at all time.

Good morning Brad you’re following on from the last two questions. I thought Shaun's question was excellent and, but I have to say I'm completely non-plus with your answer.

And that's the worst kept secret in the world I am not that bright I like to keep things very simple. So if I could ask, have you got cost in costs going forward or if have you got cost tailwinds.

Because there's a lot of stuff happening there which Shaun point out. You've got your stockloss issue, you're EVAs you got one-off things you got the DC benefits.

You've got a lot of stuff there so straight to the bottom line have you got cost in costs or have you got some - are the tailwinds that you've got through non-recurring one-offs through the DC benefits coming through hopefully from stockloss all of that plus all the CapEx you've been spending that we should start seeing benefits. Should all of those tailwinds offset the cost or in costs that you've got from the EVA, straight - easy question easy answer will your tailwinds offset the cost in costs?

All comes out whether we’re executing against the plan. The straightforward as that.

It's all about executing…

Sorry, I missed that, sorry, what was that?

All about execution against the plan. We have a number of growth initiatives in place of the businesses hopefully been clear on, but it does require us to execute against them.

We got off to a great start, puts us in a good place, but it's all about execution. So as many, if not more positives we have right now then negatives, but it is about us executing against the plan.

So straightforward is that good start, judge us on the half.

But we pay you guys or you guys get paid a lot of money to execute at a reasonably good level. So if you execute at the level that we expect you to execute at a reasonable level.

And we're not expecting you to shoot the lights there, we're expecting you to perform adequately, will those plans that you got in place to offset the cost in costs. So is that you kind of get a nice level of growth going forward.

That’s the question.

Need to providing guidance, but our plan is not to go backwards. Let me be clear and that's certainly not our goal to progress at all times on the customer, on our return for our shareholders.

And what we do for us, so we're not in the business giving guidance, but what's not in the business going backwards.

Okay, well stockloss, what's going on there? Can you, what was happening with stockloss, was it 3.2% did you say for the year, is that what you said?

No, David, I think it was -- that was our number for the second half. It always runs higher in the second half, because you just don't have quite the sales, sales velocity.

And then you've got Easter, which is a quite a lot of public holidays and that there is some cyclicality to work on higher. But it's much higher than it should be and we exited June of F 2019 of about 2.9%.

So that needs to continue to go down, there's a lot of upside sitting there. Again it comes to execution, and that's the plan with the game for us, we will continue to build on that execution.

Really in stockloss as you well know, you've got a sort of look at it as a game of two hub. In fresh, it is all about how you manage through your markdown process and how you manage your freshness.

In long life, it really stock adjustment to making sure we have integrity and reduce unknown loss in the stores. So both sides, we work -- the biggest blowout for us was in the loan loss part of our business, where unknown stock adjustments really lifted that was as we went through the transition to out of single used plastic bags and as we saw a lot of changes in the markets certainly our competitors really sort of closing of their frontends and there was a lot of competitor activity.

We recognize this current team has start to take action in the second half to make sure we balance our customer experience versus managing the unknown loss look better and so as the half went on, we saw those improvements come through, which is why you saw us exceed at 2.9. Our aspiration is to be like a lot more progress against that in the context of the F 2020.

So a lot of upside potentially there it comes back to execution.

Good morning, Brad and Tim. Just interested just around the momentum that you've got for this Q1.

Just how you thinking about it strategically, it obviously it's not Phase 1 necessarily maintain that momentum, given the comps you start cycling but. But how do you think in terms of pull forward initiatives you've got previously pushing your database a bit harder on Woolworths Rewards.

Just trying to hold the customers' in store and I'm just interested in some of the learnings you might have had through wishes which is because obviously calls last year I think sort of customers return pretty quickly to where that usually result. How are you thinking about trying to hold on to those customers post wishes?

Look, I mean in general, what we're trying to do across the Group is used the momentum in every business headed to actually crack along with our strategic plan and deliver against the aspirations we have, which I alluded to in my answer to David. If I come to Australian Food in particular, we have faced quite an unusual confluence of events where we come out of the Lion King with only three weeks into Discovery Garden.

This is quite an unusual sort of almost back-to-back program. Now as I mentioned media call, they are very different programs Lion King is a traditional collectables program done in partnership with Disney over the context of the Europe partnership with Disney.

Whereas Discovery Garden is a much more community centric program and that’s more in a [indiscernible] and certainly follows on from our Discovery Tours which we did with our Fresh Food Kids. So it's quite unusual situation where we remain hopeful that in this process, we will be able to hold people having this we shopped us over a longer period, and hopefully if we execute well, there we’ll really get a sense of where we are with great prices with affordable health, with engaging service and just the overall experience in our stores.

So there is a lot of optimism we're having that, but it does require great execution. We do think if customer stay in the business and get habitually used to shopping us over 12 weeks.

They will stay, but I mean if we do a great job for them. So that's why I'm cautiously optimistic.

So it's quite unusual one program into the other, we wouldn't have designed it this way. It just happens to fall this way.

For those of who have an interest wide falls this ways. You can’t do Discovery Garden at least at spring.

So that actually the herds can grow. So, there was just a timing issue of how it falls but it could actually play to our benefits in treatment.

And second one from me, I know if you have done a bit about gross margin, but it was a pretty big shift in terms of going from upturn in the first half to down 52 in the second half of food. And appreciate it seasonally high period of shrink, but I think you said that the half team is just shrink target for probably got 30 basis points as well.

So it's a big step down and I think you also said you were previously you probably starting to pull back a little bit on your reinvestment back into protein so just -- I'm just interested did you take a step to absorb more price increases or to try and leverage some of the momentum you're seeing in the business to cement price positioning, specifically or was there something else because the delta, just sort of sense to be…

Look, I mean the major movement in H2 undeniable and I commit Claire Peters talk to this is just stockloss, we really, we were just challenged in H2. And it's just a material pull back from us and that really in many factors are going to make in the GP as you know, but it's just, just was just challenge on a whole ton of bases from January, from the get go from the second half.

And one thing, get a little bit away from you just take the world to catch them up. So it was, it was across every bit of our business, but actually this initiative we have in place are really getting great traction.

So the headline was stockloss. My comments on red meat were, the input pressure we had in the first half we were very hesitant to pass on to customers.

So with as much a first half story as in the second half. We're just simply in the context of where we needed to post a lot of the increases through and we've seen the whole industry do this I might add.

So that issue is not, we've ameliorated that issue somewhat in the second half, but it was a story of loss in the context of meat -- red meat been it really is how we managed the markdown process and with our new skin on process, skin on tax we risk started to fresh sealed. We starting to see materially benefits as we extend shelf life and that should provide a better quality and a better quality freezing for our customers so that program started to kick through, which is really good.

And then as a, say, some of the initiatives we've done in long loss in our system check out area, we've the weight scales or have been reactivated. But with a lot more shooting and precision to them we've been very thoughtful in how we manage to entry and exit out our business in a range of other initiatives.

So it was about stockloss. It's easy to react and create a bad customer experience, and we chose not to do that, we chose to be systematic what we did.

It's a great, was good and so far so good in if F 2020.

I will continue to focus on gross margin from, and if that’s okay. My first part is, can you just clear up what second half 2018 was, just so we can get the delta, I had 2.8 in my model, but that might be for the full year.

Could you just, so we get the basis point delta around that?

Is this for stockloss?

Stockloss, yes. Stockloss driven by 3.1 in the second half what wasn't…

I'm just looking at Steve. I've got to bump on to Steve, just on the half…

Yes. Second half of F 2018 would have run around 2.9.

Okay. So we've only got 20 basis points there.

27

27 if I was going to be offset, Bryan.

27 basis points. Okay.

So does that half of your gross margin move, how much of the, how much of it was down for the fuel discounting coming in. You talked about $38 million annualized.

But that was a deal that closed in April. What sort of dollars would that that would have contributed to the gross margin?

I think it'd be fair to take that number and take a quarter of it.

Just a quarter of that. Okay.

Thank you

Maybe had some other one-off costs on fuel in there as well. But I would call the mid-term.

And then just within other than that, I mean, we've been hearing across the market commercial intensity has dropped over the last 12 months by about 200 basis points. Sorry -- cut promotional participation that is, how does that compared where you guys are seeing and where do you think that your promoting a bit more than your competitors and that's helping your sales.

Could you just...

The other, the other cost that's GP is collectables, so to be clear and obviously we did with a Disney Words and then earn and learns so, those are in there as well. So just don’t forget about those.

As I mentioned to and also previous question. The number of promotions we do and is actually decreasing year-on-year -- healthful all three years.

However, our execution of promotions is improved as it has for last year's up commercial participation has not gone down as quickly as our number of promotions, and so that has reduced but the number of promotions that reduced much faster than promotional participation economy.

I understand. Okay.

That's helpful. Just my second question is, it's actually BIG W, you obviously have sustained gross margin compression there.

How are you thinking about that into F 2019 in terms of -- you mentioned loss is narrowing in that business, you are more price-competitive, but how do you see your gross margin profile in that business is that investment made and should be stable from here or do you think that there is further investment needed in price. What came out and after they’ve dropped prices again in 2019...

Look thanks, Bryan. I mean, and then David will add a bit of color, just look inside the food business you sort of got to think about the fresh showed very different to the loan loss in truth inside our BIG W business, sort of full learning way through it.

It's a hard goods versus soft are very different in terms of the composition of margin and how you manage and execute against margin. One of the challenges we've had at the GP level has been soft.

And if you don't get the range in flow in seasonal – seasonal-wise, you end up with a very large mark down process, which is to reach GP and so that has sort of been a big drag for us, over the last few years and starting to actually change as we get better at that and it was quite noticeable in Q4. So, the whole margin issue in empowered is how you hold that first margin and then diluted, which marked our process on the way through.

On the long-up or the hard good side of our business, we've been very price competitive actually arguably overly price competitive in some areas, and so we’ve been much more thoughtful on strategic pricing and price elasticity of different products and working very hard to get to wide shape to our price investments. We work in quite the same residents or impact with our customers as we expect to give it our competitive we also, so we’re working on a key value indicators inside hard goods and whole flow of soft goods, derisk in the fashion side of soft goods and better managing our markdown process, both of those are coming together to, it's really sort of improving our GP line.

Here, a little bit in the second half, but just start seeing it into F 2020 Endeavour.

I mean, you cover the two big ones Brad. I mean, price is clearly, really important for our customers.

So, getting that balance right we both staying very competitive but trying to find a way to change the efficiency of our business. Seasonal is important.

We saw a real kick in the fourth quarter with us to pull price sell through winter apparel, particularly. But the other key driver for us is just shifting the mix.

So, we've gone through customer first ranging through a lot of our areas of our range at the moment and we're seeing some real shifts in our mix within the categories and across the categories. So, customers are shifting from entry to slightly elevated good, better, best, but we're also seeing some of the higher margin categories starting to really far with stronger ranges.

So the combination of lots of different things are coming together and we we're pretty confident as we move forward that we can strengthen that.

I mean rules attract a lot of metrics. As you know, across all of our businesses and certainly on the comfortable side but probably experiencing shopping our store and the perceptions and our customer metrics in BIG W, have actually trended pretty pleasingly up, overall and in a relative sense.

Just my first question very quickly is, just on the voice of customer metrics for food the scores appear to be either plateau or starting to slow and I do appreciate that they are at all time highs. But could you just please provide some commentary on what's going on there, is the business running two lane like our staff hour was two lane and maybe also where you see opportunities for improvement there?

Well, there is room for improvement. We had sort of course gone through a higher level and we've done some re-waiting and we've made it harder for our teams to join us to get higher scores.

In truth and clear, we can talk to it. We were starting to get in the mid '90s and that's for a good number is always room to improve.

So we've done some re-weight in which we can talk to, the numbers of costs in the same way thing, but we were quite sensitive to making sure there is a some challenge for our team, the highlight for the year was the improvement in voice of the customer scores and in particular in online. So, sort of look you'll see the trend line go up on that, on voice of the customer scores the store level, we didn't get quite improvement we may have wanted, but actually in the context of the year, we had, we thought that was a really good really good results.

So in the first half, with plastic bags with a lot of other challenges, we had, we just -- it was very hard to actually provide the experience we aspire to and then at the start of the second half as I say droughts and floods , we really had a lot of quality issues out of stock issues, on support issues not out of stock issues increase. So there’s a lot of challenges there to bounce back in particular as we implemented our new customer operating model in May, which is relatively disruptive for our teams.

We thought it was worth calling out at the resilience and positive compared Claire, anything you'd like to add to that.

Thank you [indiscernible] kick that half one and half two and I think as we continue into this year, refine and the measures that matter to me that most of the customers, we will refine that we can even further by bringing our voice of customer of store level done to the key five metrics that our customers most important to them, but as you said, but whether it was this time last year with small crisis. We have [indiscernible]as you quite rightly said, we have to stocks increased and veg particularly which hit all of Australia, in February and March.

We thought in the store we closed last year for those of you rightly point out there was the whole crisis around [indiscernible] strawberries across Australia, which was material impact on everyone in particular, the guys of course.

And then just maybe one more question again on the food side. Just how should we think about pricing in the overall deflationary environment going forward.

And I guess I'm particularly interested on the dry-good side, it feels as though both you and Carl, was trying to delay price rises for as long as possible. So I guess my question is what's holding you back and can we expect to see some price rises push through more aggressively in FY 2020.

Yes, look, I mean I think. So we're looking everything on a situational specific, I think we've got a very rational market what now and everyone is leaning into the challenges on input cost pressure from all angles, as you would have seen in our results and our competitive results there has been a softening in deflation in long life products, -- fresh products in particular chilled inflationary at the moment.

But long-life is slowly transitioning out of being materially deflation where it should be neutral to slightly inflationary. We would expect that to continue into F 2020.

I can't tell you exactly where it will go. I can tell you, the market is rational, can tell you we're all of course nervous and making sure we whole price trust with customers, but it is clear that there is movement from a deflationary environment to neutral slightly positive inflationary environments in long life and that part of the market has been deflationary for at least four years that is out being in this part of business.

First question I have is just on the store rollout, pretty much across the board, other than BWS, the net store rollout was sort of under your expectations at the same time you've had tremendous success, pretty much across the board again, with respect to online. Is there a timing issue here or are you getting more and more comfort around your online growth and penetration rates to maybe review your store footprint requirements?

A great question. Look, we didn't open as many stores as we would have aspired to in F 2019 in truth.

And these things are many years in the planning and we're sort of pulled back a few years ago and it’s very hard to move things around. The store program we heading Woolworths supermarket the store openings, In F16 I think we opened were really to perform in line, if not ahead of expectations for us we really, really pleasing and clearly is moving ahead.

I think if we could have opened a few more with the quality head we wouldn't – but just very hard to find them. So I'll come back to the issue you have and it's a very important issue, but actually we would have opened a few more.

Dan Murphy is one of the reasons we had a tough year as we did, but I think this will help us going forward was we never opened a store really until mid-May I think. So we used to sort of opening ahead and we do not point and we make sure that one growth in mid May which New Town, Tasmania in Hobart was a fantastic store for us.

And we opened three in rapid succession in the last four weeks. We’ll get back to eight to 10 in Dan in 2021 and we can see up growth for them there.

All the stores so we would have opened more Dan’s in the life quality neighborhoods and more supermarkets if we could have. But we never want to get out of balance we're always about this balance.

So we're talking about moving to I'm sorry, the number is at the back of the deck, it's about [15% to 22%] a year about 8 to 10 Dan Murphy’s a year. In any part look at our convenience business, we are very excited by our Metro, but if you're going to fund the right price, it's even more important than it is a supermarket.

It has to be on the right and [indiscernible]. The instant issue here when you find it's very quick to open so you can open within 6 to 8 months, but finding it is the challenge.

So you don't have quite the lead time, but probably [the wine side]. So we are very positive about Metro’s to finding them is our challenge.

And in BWS we're happy with the number we have it continually rationalizing the tail – it's one of these churn businesses for us, but we're very happy with where we're at. And the real action in BWS is through our renewals, which are really doing very well when we reactivate BWS with the supermarket.

So you will see full sort of 1% to 2% growth in the number of larger stores we have in liquor and in food fairly BIG W, we're in a process of rationalizing our overall number of stores. If I then look at online yes, we do feel it's no longer a start-up.

It is a core part of what we do right now the immense benefits of having a core part of what we do. We will support this team, [indiscernible] and his team are working very collaboratively.

We’re now reengineering every process that we do online. And as we do that, we're becoming more and more efficient, whether it's just the way a truck roll works the yield we get out of the truck.

The amount of, the way we actually rent our trucks, which we rebuilt all those process the installed BIG process is the way we manage, is the way we operate. What were our dark stores are now manual CFCs.

We just had an opportunity we had at the back end of - mid 2020 with take on technologies, which will help us provide speed. So we're very excited.

If you look forward, so what is this all mean for our future store network. I think we will still be opening stores, but the size of them and the shape of them will change dramatically.

We have already been taken action of stripping general merchandise out of our stores, increasingly you will see that our supermarkets provide more room in the back second half to facilitate the E-commerce part of what they do and we fully expect them to shrink. But that will sort of be a glide part over few years as online grows and as traditional retail shrinks.

Hope that makes sense, sorry.

Yes.

One of our very hard question which I look forward to getting on the road show, it's like spend a lot of time on it.

Yes indeed and maybe one for David, just in relation to Endeavour Group you mentioned that there would be some costs incurred as part of this process. Obviously, it's not going to be a cheap process, but I'm just wondering given, particularly given the, the fact there is a merger and Bruce Mathison Group will take effectively a share of the store fleet that they didn't previously own.

Is there any requirement to look at the valuation of the assets, the inventory, et cetera. As part of this merger and demerger process, so if you could just explain may be what to expect on costs and then what to expect around the process?

Hi, Andrew thank you yes if I start with the second one. Look I don't think anything is going to jump out from an inventory perspective, although of course we may just look at that across the Group or assess more generally specifically as result of it.

So that I think there is anything at this point, but of course we will work through that. On the costs, we did say there would be some one-off costs associated with this move when we put the release out in July.

I think we quantified something in the order of 275 million. We obviously had a large number, in reality how much of this cost ultimately lands and what degree of standalone or stand-up costs and therefore what stranded costs sits within Woolworths ultimately really depends on the level of partnership we have to take 22 business.

So what we're very clear on is the separation provides greater simplicity and it gives you a good growth mandate certainly for Endeavour Group. But it's really trying to run underpin it with retaining some very strong partnership.

Depending on the extent of those partnerships how long they go forward and they'll vary by area will influence the level of cost incurred. So at the moment, we would stick with the one-off costs being in that order of to simplify.

Given the timeframe we're looking to majority of that cost would be incurred in 20 as there are previous discussions. So, but we’ll certainly continue to update the market as it seems to grow.

Not too, I'll come back to my question on food because I got a beat a dead horse too much. But I wonder if you could just talk in terms of fresh the comment I could make about fresh products in your supermarkets.

What categories you've seen that have been the most pleasing. In the second half and whether or not you've progressed any strategic initiatives to ensure the more consistent availability of fresh offerings please?

Thanks Scott, I will turn to Claire Peters to just give you a little bit of color of what happened in the second half as you would hope to know in fresh we have fruit and veg chilled now. We've moved chilled on our long-life business to manage this part of our fresh business and then obviously need [indiscernible] dairy over to Claire.

Thanks, Brad no in fact got to the question. And specifically in half two 2 in Fresh, we saw some good increase in some of those key categories that Brad touch predominantly produce also chiller and also in-store bakery be the kind of three key products of Fresh Food, which we saw continue to be strong throughout the year in share as well as in like-to-like.

So the question, specifically on what are some of the strategies within our hands and the same for fresh. We have two specific programs, one which is around being proud for fruits and veg, which is a accumulation of in-store training for our team on fruit and veg, new equipment and as well as low clients range into specific stores.

And then the other one that Brad even touch on it start around our Fresh Made Easy, which we've been trialing now in a number of our stores and across all our states, which has given our customers more of a choice to be able to have fresh made easier for them and particularly in the dinner space, and particularly in the dinner select which will be looking to rollout at the end of the fleet for the remainder of this year.

All right great, thank you. And then, could I just ask maybe instead of building into the data, which I think has been done let's say build around the two different margin metrics that you gave the foods.

I think it's probably fair to say that the supermarket retailers around the world deliver the most sustainable growth and the trend is of gross margin going down and cost of doing business going down as well. Obviously, you called out some gross margin impact, but not the sort of gross margin directional items that is like in terms of stockloss and some of the other.

And it looks to me like cost of doing business, you've got some one-off this year and last year that broadly balance out. But even you've had an ability to take some cost out even with the EVA cost coming through.

So I guess my question, Brad is, do you agree that yeah conceptually that what you're targeting is cost of doing business heading down, and the ability therefore to share some of that with your customers. And, yes, not talking about guidance or anything like that and quantifying, but broadly speaking, that comes as long as you execute well.

That's what we should be able to see over the next two or three years, now that you've made a lot of the investments that you need to make?

We think the two best retailers in the world are [HEB and Public's] and both of those - actually, both have a brilliant customer experience, they do it strategically. And through that, get, I think, very strong EBITs and have better market share in their markets than we do in ours, and compete with Walmart and Audi.

So I don't accept the proposition at the high level. It doesn't mean you're not right, that we don't need to work very hard on our CODB and GP, which we do.

Actually, we didn't think that - we felt in the context of F19 and also recognizing the provision we've taken against our customer operating model, that our CODB performance was pretty pleasing, to be honest with you. So, actually, we thought we made progress that was really on the back of the work we did in 2018 that we then wrapped around into 2019.

Now, clearly, we need to continue it into 2020, so no question. But we've got off to a good start on that, and we're not feeling uncomfortable.

So we need to work on our CODB, and we need to offset our costs. A little bit of inflation in this context would actually be very helpful.

We've battled negative leverage through not having it. But we don't speak it as an outcome, but if we do get it, it will help.

We actually think the CODB performance wasn't bad in the context of the challenges of the year. On GP, we fully agree with the call that actually it wasn't quite where we wanted it to be.

Actually, if you look at just the 30 basis points increase, it was stockloss, which we're not happy about. But the nice thing about stockloss, in a way, it's entirely in our control to manage that.

So it comes back to the point I made to David about execution for us. This is not an issue outside of our control that we can't manage, and we can manage it while providing even better experience to our customers in terms of fresh service.

So it is just pure upside opportunity to us. So we do need to improve - continue to improve our numbers, we agree.

But actually, most of the issues we need to deal with are inside of our control, and we're making good progress on that.

I guess I'm going back attacking the same topic but from a different angle. I know that you said, look, if you execute against the plan then ultimately you're expecting earnings growth within - we couldn’t accept that.

And I know that you're not giving any guidance here, I'm not asking for that either. But within those comments, there must be certain assumption around a minimum level of like-for-like growth that you can achieve to basically swing into earnings growth or earnings decline.

So is there an inflection point that you can actually talk to in underlying sort of assumption that you can give us some details on?

I don't know if I fully understand your question, Richard. Of course, we're aspiring to continuing to grow and we would like to grow at above market growth rates.

That is clearly our aspiration. As you well know, once you get above 2.2% comp growth, you really start getting quite a lot of leverage irrespective of what you do [indiscernible] and also you really do get a nice balance.

And that's certainly our plan to do that and get the leverage benefit that comes from it. So that is definitely our plan of record.

As you'll see from the numbers, we reported on our first eight weeks, we got out of the gate very quickly on that. Now, the challenge is how we sustain it.

Food retail, like, liquor retailing is all about Christmas; how we build on again to Christmas is the key. We're very fortunate, we think, to have Discovery Garden is another platform for us to build on into the rest of the year.

In liquor, we have all the great seasonal events starting this Sunday [indiscernible] make sure you buy something at Dan Murphy's. And then we're going to carnival through carnival, which is really important.

[Time is why we've re-engineered] [indiscernible]. So, yes, we're feeling – as I keep saying, cautiously optimistic.

The market is looking solid. We're growing ahead of mark of which our aspirations are in all of our businesses, and it's just how we hold them [indiscernible].

And online profitability, you said there's obviously an improvement there. How much of that has been driven by click and collect?

Is that taking a bigger share? And it would be helpful if you give little bit of an update on the sense of – is the online delivery model, that actually profitable as well?

Just a sense of the moving parts there and actually -

Yes, look, it's actually - you can get into the game of how you allocate overheads. I can tell, our head of CFO is Stephen Harrison [indiscernible] in a very detailed way.

How you allocate overheads becomes an interesting conversation. In truth, as we said, our e-commerce business, overall is possible.

It has become more so in the last year. And is still rate dilutive, but at a rapidly changing percentage.

So it is - clearly, pickup is our most profitable channel right now. And that's for obvious reasons that the customer drives through the store.

But we are making good progress on home delivery. And I really call that our new routing system which we use and which is really just changing the yield we get on drop density.

And actually, we started to get dynamic pricing and availability of capacity inside home delivery network, which has now close to 800 trucks on the road at any one time. So the whole thing is actually becoming better performing.

And in fact our newest channel, which is, on-demand, is in line with that. So we're not uncomfortable with mix.

The real challenge in online though, is which Management and the team are working very hard on, is we believe the future lies in same day. And that's truly [liquor add] in food.

And so how we improve our underlying process to get to speed is the key for us and not incur extra cost as we do that. So we think that's where the action is.

We think we can grow and continue to lift margin. And that's our plan in F20.

My question is just on the cost of doing business in the food business and the EVA. So in the second half, it looks like cost of doing business only grew about 1%.

Could you just clarify where you guys were able to take the cost out there, and I guess, how you achieved that result? And then also help me understand why there was no impact from the EVA in the second half and then how we should think about that going forward into FY20.

Yes, look, I mean, I think - let me answer the second one first. There was an impact of the EVA in the second half.

We had accrued conservatively in the first half the key part of the EVA was actually the one on signing benefit we provided our team at the end of January, which we had accrued over the course of the first half. But then of course, the rest of the cost of the EVA were in our run rate.

In terms of all the things we've done to offset that in the season in Australian Food level: firstly, I would call out the achievement of our facilities management team, our electricity costs have actually went done. That was really mainly through demand management, the way we upgraded our [indiscernible] it didn't change [indiscernible] just I think one of the great achievement for the Group [and the pressure coming through electricity] But actually, as we made online more efficient and effective, that also has provided benefit instead of being a negative leverage.

Actually, the efficiencies started to flow through. So that was a real benefit.

We did a lot of work on assembling the stores with Claire and her team and particularly in the middle of the store and just the whole way we manage our thought process to our shelves and getting an extra – getting our [indiscernible] that was a huge benefit. Third, we got two [indiscernible] and I will tell you as you're calling out.

So it was a real benefit on just that in-store process. That also actually made us better in-stock as well as getting the efficiency that flowed through.

Our customer operating model, which we initiated in May, which has two parts; it's the way we organize the store for success and how we roster efficiently and effectively. The reason we started that work in May, was to get ahead of the benefits we needed to bank in F20.

We realized in early 2019, that in order to offset the cost increases in 2020, we needed to start taking action in 2019. And so that's how we started that work in May of 2019, that's how we've provided for us in the Australian Food number, but that will materially help us into 2020.

I know many of you have heard me talk about rostering before, but actually we still don't get up the [watch yield] and roster of about 30% of our hours are not necessarily the right time of day that we serve. Hopefully that answered the question, but we're out of the gate through quickly on our productivity sales as we needed to be, and are on track.

Just a question on BIG W, the second half like-for-likes are fantastic. And the customer base there, I guess, lines up pretty well with the recent fiscal stimulus.

So you have to sort of comment at all on how your sales have gone in July and August in BIG W?

I think the point we made across the Group is that the momentum we've built in Q4, particularly in June, was actually sustained across the Group. We know, we don't give specific numbers, but we have continued to hold momentum across the Group already.

The one thing I would call out is, we had a good toy sale this year. We were quite worried it straddles the two financial years.

But that went ahead of expectations, I think that.

Yes, it did. It's a strong toy sale for us.

So that all flows into the first half of fiscal 2020?

Yes, absolutely. We just - yes, well, that's the plan.

And then one last quick one. Just on the so obviously, you had given the first eight weeks of trading update, and you mentioned before about typical like-for-likes of [indiscernible] to leverage at the store level.

And you're well above that at the moment. Is there anything on the flip side we should think about though in terms of unusual costs associated with that strong growth like there is meaningful cost in some of those promotional programs?

Look, on a trading basis, no. Just focusing on actually providing a great customer experience when sales have been strong as they have for us, actually keeping the stock growth from the - customer experience remains very challenging.

I would say that it's gone well for us. We are also though just in continuing with our new operating model, investing in the new roles and new team to give them the right capabilities, going into - into the end of fiscal.

So we have some key investments there, and we also really believe in the next generation of growth for us with fresh and food with Fresh Made Easy, which is really sort of continuing to evolve our thinking on our fresh business and how we make it more convenient by fresh food and prepare the norm or lunch or lunch boxes for our customers. And so we do some investments there, but we're comfortable that if we execute effectively, we'll get a return from that.

So it's about focus and execution, and not getting ahead of ourselves after eight weeks.

Just touching on the comments you made early on online, and that the future is in speed and one-day delivery; could you perhaps provide us a bit more color on the partnership with Takeoff Technologies? Basically, I understand it's a trial at the moment, but how big could it potentially get?

How many stores the technology be rolled into and how does that partnership look like? Will these pay for the CapEx or is it a fee-type partnership?

Look, as we analyze what our customers want, they want to be quite careful not to confuse what you provide with what customers want. And that's I think one of the growth for succeeding online.

Historically, retailers in Australia, in particular, provided next-day. And therefore, we think that's what customers want.

Actually as you look through the first pattern, we find that actually while – clearly, a number of customers do want pre-arranged time the next day, and many customers actually wanted same-day, whether it's the same day pick-up experience or same day home delivery arranged time experience or same day on-demand experience. So as we look at that, it changes the way you think about your network quite dramatically.

It means that a more distributed network becomes important. And it's in that context that we're piloting with Takeoff Technologies, who really provide macro performance in this - customer performance.

And so the three sides we've committed to in F20 are strategically very important even though they're not material in the context of capital, because that will help us improve the model, and helping form - how we go forward. When it will take off as a provider - there are increasingly a few providers out there, which Takeoff right now is clearly the leader.

But we'll see how the sector plays out. So, one form of feature the model with them has become a very traditional model in the space, partly about capital and partly about fleet of service.

So it's a combination of the two. It's not something that we look - would want to reveal the specifics of at this stage.

But if we execute against it, it will give us a decent ROI and as a critically important as we form the feature of it.

Just a quick one, it’s been a topic we've discussed on this call. If not for the stockloss, the Food EBIT margin would have risen by more than 20 basis points for the year, and that includes a significant headwind from depreciation rising faster than sales.

Broadly, does the Company have any concerns about EBIT margins rising? It's something that we haven't seen as much of with some decent sales in the past, but with a lower CODB and prospects for improving stockloss, it looks like margins could rise so here I am just wondering whether the Company is concerned about previous episodes of increasing EBIT margins?

We're always concerned about having price trust with our customers, Craig, and that's what we should and we continue to focus on that. It's all about price trust.

We don't have [indiscernible] from the rest of our P&L. So - but it has [indiscernible] of price trust and it has [indiscernible] great customer experience [indiscernible].

So, within that context, of course, we have our obligations to our shareholders. Rest assured, that's not the focus.

It just needs to be in the context of being competitive. And competition comes and goes, as you know, in different forms.

I can tell you at this stage, our price indices are in good shape. And we're very happy with where they are, and our price perception is also in good shape.

It doesn't mean they're not products and categories we don't need to continue to work on, but we've got the right series of settings right now.

Thank you, everyone, for your patience. It is a very complex time with a lot of moving pieces with the 52-week - what's happening with Petrol and [Celtics].

The one-off cost that we thought annualizing thought our business with fuel discounts, as well as impairments of BIG W, I wish I could tell you that our F20 results will be easier with AASB 16 and what happens [indiscernible], but it won't. But hopefully we can continue to work on making sure we give you a good, transparent look into where we are in a trading sense.

The message I was trying to land today, I hope I did. It was cautious optimism, as you look through our year with a very challenging start to the year, the team rallied.

We started to build some momentum in quite a challenging macro Q2 that continued in the second half of the year and it gives us some momentum into F20. The challenge for us as a team is how we use that momentum in the next few months.

And it's a good challenge to have, and we're excited by the challenge. So judge us from how we do it.

And thank you for your support and look forward to seeing many of you on investor roadshow. Thank you very much.