The appointment is effective immediately and Mr Banducci will continue to act in his current role as Managing Director of Woolworths Food Group, pending a new appointment.
Chairman Gordon Cairns says Woolworths undertook “a rigorous international search process” to find the best person to rebuild the Woolworths business and return it to sustainable growth.
“While there were several strong candidates, the board was unanimous that Brad was the strongest of the field,” he said.
“Brad has had 25 years in retail, including 15 years consulting to some of the world’s leading retailers, as well as private equity experience in retail. He has had five years with Woolworths, including his role in leading the growth of Woolworths Liquor Group. During this time he was instrumental in the development of Dan Murphy’s, one of Australia’s great retailers.
“This makes him uniquely positioned for this role. He clearly understands the Australian market, has a total commitment to our customers, and a great track record of growing valuable businesses and developing his people.”
Mr Banducci says he is honoured to be leading Woolworths into its next chapter.
“I am a true believer in the potential of Woolworths and I am excited about our future. We are at our best when we are innovative and focused on the customer and winning their trust,” he said.
“I am an entrepreneur at heart and a retailer by discipline, and I want us to take our company back to its best levels of performance. My goal as CEO will be to recapture the spirit of innovation and customer focus right across the business, and to grow a culture where our people once again feel a strong ownership of the business.”
Former Woolworths CEO Grant O’Brien, whose retirement was announced in June last year, will cease to be an employee on August 1, 2016, but will no longer exercise the responsibilities and powers of the CEO position with effect from today.
Half-year earnings
Woolworths Ltd reported net profit after tax attributable to shareholders of Woolworths of $925.8 million before significant items for HY16.
Mr Banducci says the results reflect the period of change that Woolworths is going through, “most notably the considerable investment in price, service and customer experience across Australian supermarkets”.
“The reported earnings result is also heavily impacted by the decision taken to exit the home improvement business and the subsequent provision for the impairment of assets, lease liabilities and other exit costs,” he said.
Woolworths’ Australian food, liquor and petrol reported a decrease in earnings before interest and tax of 31.7 per cent on the prior year, reflecting subdued sales growth driven primarily by deflation from significant investment in better prices for customers. Sales momentum improved slightly during Q2 ’16, with December being its best trading month of the half.
Liquor continued to perform strongly and gained market share with all formats (Dan Murphy’s, BWS and online) delivering an improved sales performance. Monthly sales in Woolworths’ retail liquor businesses exceeded $1 billion for the first time in December.
Countdown Supermarkets (NZ) delivered EBIT slightly above the prior year in a competitive market driven by a strong focus on costs.
General merchandise delivered an improved sales result during the second quarter with comparable sales decline of 1.7 per cent. However, comparable sales for the half were still negative, resulting in a lower profit than the prior year.
Woolworths also announced a provision for the impairment of assets, lease liabilities and other exit costs reflecting its announcement on January 18 that it intends to exit home improvement.
“The valuation process of Lowe’s shareholding is underway and will be determined by an independent expert process unless a negotiated outcome can be reached,” Mr Branducci said. “The sale process of Masters and Home Timber and Hardware has commenced and is expected to continue into FY17.
“Looking forward, we expect trading conditions to remain competitive as we continue on the journey of rebuilding Woolworths.”