Woolworths Holdings Limited

Group turnover was ZAR 42.5 billion, up over 6% in constant currency. Adjusted EBITDA was ZAR 4.6 billion, up 4.2% in constant currency, and adjusted EBIT was ZAR 2.9 billion, up 4.1%. adHEPS was ZAR 1.70 per share, up 3.8% in constant currency and 0.7% in rand terms. The interim dividend was ZAR 1.18 per share, in line with a 70% payout ratio. Group net borrowings were ZAR 5.8 billion, net debt-to-EBITDA was 1.48x including leases, and cash conversion was 110%. Looking ahead, management said H2 Food price movement is expected to be 3% to 4% excluding meat, FBH price movement is expected to be 3% to 3.5%, Food growth in the first 8 weeks of H2 is 5.4%, FBH sales are up 12%, and CRG sales are up 1.6%.

Roy Bagattini framed the half as evidence that the group’s multi-year rebuilding work is now showing up in operating results rather than just inputs. He said the company is moving from fixes and turnarounds to growth, with stronger customer experience, loyalty, new formats, AI tools and selective expansion into adjacent categories and markets. His tone was constructive and confident, but he repeatedly noted that lower inflation, weather disruptions, foot and mouth disease and a difficult Australian retail market remain real constraints.

Zaid Manjra emphasized that each business is now in positive territory, but gross margin pressure remained a feature of the half for different reasons across the portfolio. He cited ZAR 42.5 billion turnover, ZAR 4.6 billion adjusted EBITDA, ZAR 2.9 billion adjusted EBIT, ZAR 1.70 adHEPS, ZAR 5.8 billion net borrowings, 110% cash conversion, ZAR 4.8 billion cash from trading and free cash flow of over ZAR 2 billion. He also pointed to a ZAR 300 million working-capital release, ZAR 356 million of share buybacks in the half, and ZAR 1.4 billion of capex in H1 with another ZAR 1.2 billion planned for H2.

Analysts pressed on FBH’s lower GP margin and the kids pricing strategy, and Roy said the margin sacrifice was deliberate and justified by market share gains, citing 30% more volume in the summer kids basket and 28% volume growth in the winter basket so far. Questions also focused on Food momentum, Food inflation and foot-and-mouth disease; management said inflation in the first 8 weeks of H2 is broadly in line with H1, meat prices are up around 30% year over year, and the business is selling about 70 tonnes less meat per week, though supply has been managed through alternative sourcing. On costs and inventory, Zaid said H2 cost growth should be broadly similar to H1, while inventory has improved across the group, with CRG inventory 15% lower year over year and FBH inventory 7% lower than June 2025.