WoolWorths holdings limited 2013 good BUsiness JoUrneY report

the broader whl group
woolworths financial services
Woolworths Financial Services
(Proprietary) Limited is operated jointly with
the ABSA group. Woolworths (Proprietary)
Limited owns 50% less one share and the
profits are equity accounted in the books
of Woolworths Holdings.
The business operates three key products
– the In-Store Card that can be used only
for purchases in Woolworths’ stores,
Woolworths Visa Credit Cards, and
Personal Loans. In addition to the yield
on these assets, the business generates
insurance and other non-interest
revenues in line with the regulations of
the National Credit Act.
The joint venture with ABSA showed
consistent growth throughout the year.
The average book was 13.0% higher,
and ended the year 15.8% ahead of the
previous year. New point-of-sale and
in-store kiosks came on-stream in July
2012 and have enhanced our capacity to
process credit applications and credit limit
increases. Woolworths Financial Services
contributes 4.75% of profit before tax.
Woolworths Financial Services will grow
by aligning itself to the Woolworths brand
values and differentiating its product
range. This means optimising existing
customer relationships and leveraging
the Woolworths WRewards programme
and customer database. We are making
significant investments in technology and
operations to support this goal.
Medium term target: ROE of 22%
To achieve this we plan to:
– Transform the WFS customer experience
by offering in-store kiosks that facilitate
a 15-minute card issue process. In
addition, we are improving our service
and are creating new technology
platforms.
– Grow the book by offering credit
limit increases at point of sale and
supporting this through campaigns.
– Grow non-credit revenue into a more
significant part of our business, starting
with a focus on insurance products.
ENVIRONMENT
In 2012 Woolworths rolled out
e-statements to customers in our store
card and loan statement categories,
following the launch of e-statements for
customers in our Woolworths black, gold
and silver credit card categories in 2011.
20% of accounts have been converted
to e-statements to date.
COMMUNITY
2012 was the first full year for the new
WFS CSI Committee. During the second
half of 2012 the CSI committee has been
involved in:
• Providing 5 primary schools with the
opportunity to enjoy a fun-filled day
of learning at the Cape Town Science
Centre by providing sponsorship and
staff to assist in facilitating the day.
WFS employees and their families also
had an opportunity to experience what
the Science Centre has to offer.
• Together with Woolworths, WFS built
1 home in the Mfuleni area in Cape Town
as part of Habitat for Humanity.
• In association with SHAWCO and the
Rags 2 Riches Foundation, WFS helped to
collect second-hand clothing, blankets
and shoes in saleable condition from
WFS Employees.
• Working with Fountain House, WFS raised
funds for organisations that provide a
service to people with disabilities. The
funding process is executed through the
process of selling Casual Day stickers at
a cost of R10 to WFS employees.
• Provided Rosewood Primary with
50 chairs.
• Provided sponsorship of student fees
to our neighbour Magnet Theatre.
• Sponsored the purchase of new
computers to Mary Kiln and Observatory
primary school
The focus for 2013 is based on 4 broad
pillars: Our community, the environment,
education and Woolworths integration.
Plans for classroom and playground
improvements are underway to support
Mary Kihn and Observatory primary
school and a wheelchair was sponsored
for a pupil at Mary Kihn.
WHL 92 / 2013 GOOD BUSINESS JOURNEY