Risk Reward Update

Research evidence excerpt

Risk Reward Update

UpdateM

Risk Reward – Woolworths Holdings Ltd (WHLJ.J)

KEY EARNINGS INPUTS CATALYST CALENDAR

Drivers Jun 2025 Jun 2026e Jun 2027e Jun 2028e Date Event Source: Refinitiv, Morgan Stanley

17 Nov 2026 -

ROIC (%) 14.7 13.4 16.0 17.4 Woolworths Holdings Ltd Annual Shareholders Meeting

21 Nov 2026

Gross Margin (%) 34.3 34.0 34.1 34.0

Operating Margin (%) 6.3 6.2 6.7 7.0

INVESTMENT DRIVERS RISKS TO PT/RATING MS ESTIMATES VS. CONSENSUS

Announcement of meaningful strategic initiatives. RISKS TO UPSIDE FY Jun 2026e

GP margin expansion for Woolies FBH

GLOBAL REVENUE EXPOSURE Further market share gains in Woolies Food Sales / 83,345

Cost reduction in SA and AUS Revenue 82,848 84,431

Market share gains for CRG (ZAR, mn) 83,726

APAC, ex Japan, Mainland 10-20% China and India RISKS TO DOWNSIDE

80-90% MEA A reduction in dividend payout ratio to fund

EBITDA

new growth initiatives 5,897 9,306

(ZAR, mn)

Higher capex required to grow Food and FBH 8,009Source: Morgan Stanley Research Estimate

No EBIT margin recovery in FBHView explanation of regional hierarchies here

Persistent market share losses for FBH

Prolonged consumer downturn in Australia Net income

MS ALPHA MODELS 2,514 3,131 (ZAR, mn)

2,960

OWNERSHIP POSITIONING

3/5 3 Month

MOST Horizon Inst. Owners, % Active 56.5% 314

EPS

Source: Refinitiv, FactSet, Morgan Stanley Research; 1 is HF Sector Long/Short Ratio 1.6x (ZAc) 307 355

the highest favored Quintile and 5 is the least favored 334

HF Sector Net Exposure 7.6%

Quintile

Refinitiv; MSPB Content. Includes certain hedge fund Mean Morgan Stanley Estimates

exposures held with MSPB. Information may be Source: Refinitiv, Morgan Stanley Research

inconsistent with or may not reflect broader market

trends. Long/Short Ratio = Long Exposure / Short

exposure.