Everyone, and welcome to the first day of the Macquarie Conference. My name is Caleb Wheatley, Head of the Consumer Team here at Macquarie, and it's my pleasure today to be hosting Rob Scott, Managing Director and CEO at Wesfarmers. Rob was appointed Managing Director and CEO in November 2017, having initially joined the company in 1993, and led the company through several significant changes, including the demerger of Coles and, more recently, COVID. As a reminder to those in the audience, if you would like to ask a question, please use the app, and I'll ask it on your behalf. We've already had the tariff conversation come up a couple of times this morning, but I'll be keen to get your thoughts on how it impacts the broader Wesfarmers business and through the divisions.
I would agree with all the comments that there is such a high degree of uncertainty, so it is very difficult to predict. Our philosophy at Wesfarmers is it is really not about predicting the future; it is all about making sure we can withstand a range of scenarios. Number one, keep our balance sheet strong. Number two, make sure our businesses are performing as well as they can be. Some of the things that we are seeing, we are seeing that, or we are expecting there will be some changes in supply chain. We feel that we are very well positioned across businesses like Kmart, Bunnings, and so forth, given the extent and depth of our sourcing and supply chain to adapt quickly.
We have done a bit of research to look at suppliers that could be exposed if the U.S. took a very draconian approach to tariffs, and we do not see a lot of suppliers to our businesses that are in that category. We are, you know, I think one of the controlling factors, I think, or normalizing factors will be that the U.S. administration seems to be very sensitive to what the market impact is of any changes, and also will be very sensitive to what the consumer impact is of any changes. We know that if there are 100%+ tariffs introduced, there are a lot of products where the U.S. cannot quickly adjust and source elsewhere. Therefore, if there were no changes, American consumers are going to have a lot of pain. We have seen already some adjustments in areas like electronics.
We expect a fair bit of short-term volatility. I agree with the comments made earlier that I would say the Australian market, I think, is quite strong and resilient. The issues that we're more mindful of is the second-order impact of tariffs on Australia, and that would be if it slows down economic growth globally, particularly of China. In that scenario, you know, slowing down economic growth in China is not good for Australia. Across our businesses, I guess the businesses we have in our portfolio have a unique combination of resilience and growth, and our retail businesses tend to perform in relative terms a bit better when consumers and businesses are very value-conscious. Hard to predict the future, but we feel that we're well positioned to manage those scenarios.
Yeah. To follow up on your comments there on the consumer, clearly very topical in the media and across markets in terms of these cost of living pressures, what are you seeing across your businesses in terms of the health of consumer and any thoughts over the next 12 months on how this might play out?
We haven't really seen much of a change this year. I'd say the consumer is in okay shape, but it's important to dive into the different cohorts of households. We are still seeing that lower-income families with mortgages are still doing it pretty tough. Higher interest rates, the inflation that we have seen is causing some pain. There are a lot of customers out there that are making very deliberate decisions to put fewer items into the basket. We've been talking about that now for over six months or so, so this isn't a new trend. We are also seeing other households where they might own their home, they might not have much in the way of a mortgage, and they're still able to spend quite well.
I think the area that we're watching at the moment and what's not getting a lot of attention is what's happening to the business consumer. We are seeing a fair bit of pressure out there, and this pressure has been there for a while, but it's not getting a lot of attention. Small businesses are doing it pretty tough because all of these inflationary pressures, the cost of doing business pressures, the additional regulation that many businesses are having to grapple with is making it more expensive and more difficult to do business in Australia. We are seeing across some of our B2B businesses that small, medium-sized businesses are doing it pretty tough. We're also seeing that in the residential construction sector as well. Fortunately, we have such a diversity of customers across our businesses that they're generally holding up pretty well.
I would just call out that B2B customer as one to watch as we get through this calendar year.
Yeah. Obviously, a federal election over the weekend as well, Labor winning out for the second time in a row. Any thoughts on policies and how it impacts your broader business and the consumer?
I think just given the really strong majority that the Labor government has now, I think it creates a very unique opportunity for the federal government to drive some much-needed reform. Look, unfortunately, these days, politics is a real game of short-termism, and I appreciate that. It's a business I'm glad I'm not in. The great thing in Wesfarmers is we are paid to take a long-term view. We are paid to make decisions for the long-term interests of our shareholders. Unfortunately, politics doesn't play that way. I think we have this very unique opportunity at the moment for the federal government to lean into some much-needed reforms. Because if I go back to that point I mentioned earlier about business doing it tough, Australia will not be a prosperous nation, and the economy will not continue to grow unless business grows.
Business provides six out of seven jobs in Australia. High levels of government spending and stimulus and handouts will only keep us going for so long. I think there has never been a more important time for reform, and I was really heartened to hear the comments from the treasurer that he and his government are very determined to phase into productivity in the next term.
Yeah. We've had a question come through just back on tariffs and more specifically for supply chains on Anko, but maybe worth commenting on Bunnings as well. What may the potential impact be, appreciating that it's continually evolving, but if we do see this significant impact on China, how does that flow through from both an Anko and a Bunnings perspective?
If I start with Anko, about 80% of the products that we sell in Kmart, we source them directly. We have over 1,000 people in Asia across different technology roles and sourcing roles. We have very deep networks across our sourcing nations, and China is one of many nations that we source from. The issues that we're mindful of are, as I touched on earlier, some suppliers that have a very high degree of exposure to the U.S., that creates some risk. Now, fortunately, across our businesses, we do not have many suppliers in that category. As Chinese suppliers start to look for other markets to find new sources of demand, we may well see that that has a deflationary impact on pricing, which I think will be good for Australians to some degree.
I believe that our businesses, just given the capabilities we have around manufacturing, sourcing, supply chain, more often than not, we will capture more of that benefit than others that are dealing through third parties and wholesalers and distributors. That may be a bit of a positive. The final point, as I mentioned, is whenever there are significant shocks to international trade, there will be flow and implications to transportation and supply chain. In the short term, that can be difficult to work through. That is some of the things that we're conscious of. In terms of our Anko global business, we're still seeing very strong demand for that around the world. You know, in some of the discussions we're having with U.S.-based customers for Anko product, they are being very cautious at the moment.
I agree with the comments earlier that a lot of U.S. companies are cautious about making decisions and investing with all of this uncertainty. Overall, I think that Anko will be very well positioned to adjust. Similarly, with Bunnings, they have a real diversity of suppliers. Many of their suppliers have branched out into areas outside of China. Even if there is less demand from the U.S., we will see, hopefully, some better prices that will be able to flow into our businesses at a time when customers will need value even more.
Yeah. If we do see this potential deflationary impact coming through, how do you think about the pass-through on a pricing perspective across the retail businesses?
I know this isn't a very popular comment with our customers. It's not a very popular comment with investors, but we have for many years across our EDLP businesses always sought to deliver the lowest prices every day on our products. You probably remember a few years back when inflation started to creep in, and I made the very unpopular comment that our businesses would remain committed to keeping prices low. Thank God we did, because that has enabled us to continue to win trust and build trust with our customers and drive profitable sales growth. If we do find opportunities to generate more COGS benefits, then we would unquestionably flow that through to customers. You know, as I said, one of the most enduring trends in retail is value. Value wins through the cycle.
You know, particularly in an environment where economic growth might be on the lower side in the coming years, that is really an important time to double down on value.
Yeah. I've had a question come through just around CapEx as well in the broader environment. How are you thinking about that?
Look, we've got strong plans to continue to invest in our businesses. I'm really pleased with how the portfolio is set up at the moment in that I'd say our portfolio is quite capital efficient. I'll explain what I mean by that. If I think about the opportunity for growth within Bunnings and Kmart, a lot of it doesn't require material CapEx in store expansion. We talked at our strategy day the other day in Bunnings about the amazing opportunity we have to continue to drive sales density. We've been able to double our sales in Bunnings over the last decade with a 27% growth in store network. When we look at U.S. home improvement retailers, some of the leading U.S. home improvement retailers are double the sales density of Bunnings.
They were able to take Home Depot as an example with 2.2% sales growth in the last decade, were able to grow 2.2% store growth in the last decade, were able to grow sales by 93%. We will continue to invest in our businesses. We are investing in data and digital. We will be opening some new stores. We are upgrading our stores. The latest reformat and renewal of our tool shops through Bunnings is a great example of that. We're continuing to invest in supply chain. We're getting to the end of the investment in our lithium refinery. You know, I feel that over the next few years, whilst there is still investment to make, it's an opportunity for us to realize greater return on the investment that we've made.
Before we step into the divisions more specifically, just one final question we had just around the broader portfolio and as you see it at the moment, particularly around either opportunities to go out and acquire or thinking about potential opportunities to crystallize as well. What are your thoughts on the broader portfolio as it stands right now?
I feel really good about the composition of the portfolio at the moment. As I said earlier, I think Wesfarmers, when you think about the businesses in our portfolio, we have a very unique mix of both resilience and growth. You know, I think businesses like Bunnings and Kmart are just some of the best businesses that you'll find in Australia. Not only are they very resilient businesses, but they're also businesses that I feel have a good amount of growth. The Wesfarmers division has multiple opportunities for further capital expansion, de-bottlenecking. We have other businesses like lithium and health that, frankly, do not even register in the earnings of our business at the moment, but over the next five years, we think have a lot of potential.
From my point of view, I feel that the portfolio is in better shape now than it was five years ago or 10 years ago because we have more growth opportunity. We have businesses that are very capital efficient, and we have a few irons in the fire that, frankly, you know, as I said, aren't contributing to earnings, but over the next five years could become quite valuable businesses in their own right.
Great. Maybe to step into Bunnings then, you mentioned sort of the category expansion side a little bit previously, but it's quite impressive the way that it's continued to support comp sales growth and growth in the businesses, as you alluded to. Can you just talk through kind of the process in terms of assessing these new categories, the conversations you're having with customers, suppliers, and how that flows through in terms of execution for Bunnings?
I'd start by saying Bunnings has a very long track record of continually developing and expanding the addressable market in which they participate. For the last 30 years, there's been a track record of that. When the Bunnings team thinks about new categories, they always ask themselves the question, what gives them the right to play in this space? The kind of questions that they will look at is, are they able to deliver the lowest price? Because if they're not able to deliver the lowest price, then it goes against their reason for being. Are they able to bring innovation to the category, something different to the category? Does it lend itself to the warehouse look and feel? Is it a sizable enough addressable market to make it worth their while? And is the return they're getting on the space that is allocated worth it as well?
More recently, we've seen moves into the pet category, expansion of cleaning, more recently, auto assisted living. Like auto is about a, we said is about a AUD 1.5 billion market, assisted living AUD 1.7 billion. I wouldn't overlook the categories that are existing categories where there's still a lot of room for expansion. Kitchens, we only have quite a limited kitchen offer in Bunnings, but we are looking to expand that. That's a AUD 5 billion category. Plumbing, we have a limited range of products in the plumbing space, further opportunities to grow into what is the AUD 7 billion market, or even categories such as electrical and lighting, AUD 10 billion market. The opportunities are not just within the warehouse format. There are also opportunities that exist through our e-commerce channels and through our commercial channels as well.
You mentioned the comparison to the U.S. peers as well in terms of a benchmark, in terms of that growth. We've had a question come through just noting that a large portion of that is to do with white goods in those U.S. retailers. Is that an area that you could look to, or how do you think about sort of bridging that gap? I suspect some of those categories play a part in that.
I think it's a good comment. There are some structural differences between the U.S. market and the Australian market. White goods are one, but frankly, white goods isn't a highly productive use of space. We have looked at it, and frankly, I wouldn't want to take away a whole lot of other products we sell in Bunnings and replace them with white goods. There may well be opportunities over time to think about what we could do differently in that space. Another difference in our format is we set up our warehouses that enable tradies and commercial customers to drive in and out. That is somewhat unique to the Australian context. You don't see that across all home improvement operations in the U.S. There are differences. If you step back and say, why are there gaps in sales density?
I think there's some very common themes there. A lot of the growth in sales density in the U.S. has come from as the network matures, they just manage their space more intensely. We are going through the process of optimizing our space, also more localized ranging. Clearly, the types of products you have in Rose Bay are going to be very different to the types of products you have in Dural. A lot of opportunities there. Also, e-commerce, we're still relatively low levels of digitally enabled sales, circa 5% within Bunnings, remembering that five years ago it was close to zero, whereas someone like Home Depot is closer to 15%. The other interesting opportunity that we are making great inroads into at the moment is a lot of direct-to-commercial or builder fulfillment through our regional distribution centers.
This is growth that doesn't rely on continued growth of our retail network. We can fulfill a lot of the growth of commercial customers through our regional distribution network. I think there's still plenty of learnings from the U.S. and plenty of opportunity for us to grow in those areas.
Yeah. Known that e-commerce pace and some products not necessarily fitting in store. Can you maybe just talk through the importance of the marketplace that Bunnings offers as well in terms of kind of fulfilling the full customer journey, if you will?
Yeah, we've been, look, we've across the group, we've dabbled with different ways of participating in extended range and marketplace. The Bunnings team have done a great job of developing their marketplace. There's a logic and an adjacency to the type of products that they offer. We've been able to get really good growth, deliver on the needs of customers, and also do so in a very profitable way, a low-capital profitable way, leveraging the phenomenal traffic that goes to the Bunnings website. We would have over 40 million website visits. Quite often when people are renovating their home or doing work around their home, a great example would be, you know, particularly through COVID, people were setting up home gyms. We don't want to start selling exercise equipment in a Bunnings. That's not really what we want to have in a Bunnings store.
Customers are showing a willingness to buy that online through our marketplace with trusted suppliers. That is a very logical adjacent purchase. There are many other examples as well. It also gives us the opportunity to offer a broader range of products than what we are able to offer in store. It has been a pleasing project. I would say with Bunnings, when we think about marketplace, it is more of a curated marketplace, right? We are not trying to be all things to all people. The other thing that is really important for us in the marketplace side is really having trusted suppliers. When you have a brand like Bunnings, you do not want to just let anyone on your marketplace.
Yeah. I've had a couple of questions come through as well just around potential for further RBA rate cuts and what that might mean. You mentioned the pressure that small businesses are feeling in particular across the economy. How do you think about the potential for rate cuts to flow through? Have you seen any impact from the initial one that we've had so far? How does that play through more broadly for your Bunnings customers, said in particular, obviously those SME customers?
Yeah. Look, I think there may well be the opportunity for some further rate cuts if we do see inflation continue to normalize. You know, we're seeing that there is a degree of COGS deflation. I talked about some of the opportunities we may see as a result of the tariff issues out of Asia, where we may see some imported deflation, I guess, assuming that the AUD holds up reasonably well. On the other hand, the other area where I'm cautious about the outlook for inflation is that there are still a lot of quite significant domestic cost pressures. We're still seeing fairly high levels of domestic wage growth. Areas such as transportation, supply chain, power costs, electricity, those items remain quite pressured around or quite inflationary.
Look, if we were to see some easing of interest rates, that would certainly help a lot of B2B customers, certainly help a lot of builders. I mentioned earlier that we are seeing the building space, the residential building space still pretty subdued. Now, there are lots of reasons for that. There are lots of reasons around the regulatory environment, access to skills, but financing is one of those issues as well. I think a decline in interest rates would certainly ease a bit of pressure on businesses and certainly on the residential side of construction, which would be helpful for Bunnings.
Yeah. How do you think about sort of the commercial piece in particular and the leverage to the upside if we were to see a housing activity pick up materially?
I think that is a real upside for Bunnings over the next couple of years. I think at some point in time, Australia needs to, well, we need to start building more homes. We are still well below the, I think we need to build as a nation around 220,000-240,000 homes a year in order to hit the target that the government had set. We are currently on around 160,000 a year. Supply is the problem in housing. There is a critical need to get on with this. It is going to have to happen at some point in time. It is just a question of when. At the moment, if I look at our Bunnings business, we are really pleased with our commercial offer. We are growing our commercial offer, but growing at a relatively low rate. We are achieving much stronger growth on the DIY side of Bunnings.
Clearly, if we were to see greater business confidence, greater activity on the building side, that would be an upside for Bunnings.
Maybe to move on then to Kmart Group, the growth and the execution and the value offering of the Anko brand has been impressive. Can you maybe just talk through the genesis, the development of that brand, the thinking behind it, because it has been such a strong success for Kmart?
The whole direct sourcing model and the Anko model goes back over 10 years or so, going back to the early days of Guy Russo and Ian Bailey with the transformation of Kmart. There was a recognition that when you look at more traditional department stores, it was pretty obvious that traditional department stores that do not have a point of difference and just rely on a whole range of national, international brands do not really have a point of differentiation in a market where particularly e-commerce is so prevalent as well. The idea of developing a direct sourcing model that was unquestionably the lowest price proposition of everyday household and apparel items made a lot of sense for Kmart. This has evolved over time to the point where through COVID, we went through another level of innovation through digitizing a lot of our processes.
Now we have an opportunity that we have a really world-class sourcing product design capability with very sophisticated supply chains. I guess as a testament of that is that we are now seeing that other retailers around the world see value in what we're able to offer. That's the Anko Global business that we're trying to develop. You know, when I look at a business like Kmart, I'd say Kmart is as much a product development company as it is a retail company. We are finding that those capabilities in product design and sourcing are able to be expanded across categories. In recent years, the growth that we've seen in the health and beauty category is a great example of that. We're seeing good growth in areas like furniture. We still are quite optimistic about the opportunities there.
Yeah. On the manufacturing side for Anko in particular, if we were to see kind of the tariff situation play out as we understand it today, does that help or hinder Anko Global?
I think there's two ways of looking at it, I guess. We touched on the potential for some deflationary impact. That would be great. That would be great for consumers. We'd certainly tap into that. The other point that I think is really important to acknowledge in the retail market is what happens from a relative point of view. Whenever there are changes in the market, it's not just to focus on what happens in absolute terms, it's how well we can adapt relative to our competitors. What we often find, because of, as I mentioned earlier, there wouldn't be a lot of Australian retailers that have such a significant base of capability on the ground in Asia. There wouldn't be many Australian retailers that have the sophistication of the digital systems and processes that the Kmart team have developed.
What also matters when we are going through changes globally is how well we can adapt to those changes and how well we can capture the benefits. One of the challenges in retail is when you have so many people in the value chain, so many distributors and agents and brokers, by the time you as the retailer pay for the product, there are so many people that have taken a piece of the action. The advantage with Kmart is that through the Anko model, we're able to get to the point of actually negotiating raw material contracts that are going into the factory to produce the goods that we're selling. Any environment where there's a lot of change, a lot of volatility or uncertainty should be an area we can in relative terms do a bit better.
Yeah. How do you think about the growth in some of these low-cost specialist online retailers, the SHEINs, Temus, the world obviously growing, particularly in Australia? Is that a risk or a concern from a Kmart point of view, or how do you maintain your market share with the growth in those sorts of groups?
I think the retail market is very competitive. It's not just the domestic competitors. There are a lot of international competitors. You named a few of the e-commerce specialist competitors. There are also others that we're seeing develop here, like Dollarama and others potentially coming to Australia. We obviously study retailers all around the world. We continue to go harder on price. Like, you need to start with delivering the best price. A lot of our analysis says that we are the lowest price, and we will continue to invest in lowest price. The other thing that's really important is to make sure we have really sophisticated omnichannel capabilities and e-commerce in particular. Aleks Spaseska, the new MD of Kmart, will talk more about her vision for omnichannel and digital when we do our strategy day later this month.
The other thing that matters when trust matters and availability matters, and when you're dealing with everyday household items, not just novelty items, everyday household items and apparel, customers want to know that you will have the availability, you'll have the supply. They want to trade with brands that they trust. That is something that obviously is really important with the Anko brand.
We had a question come through on the margin improvement that we've seen come through Kmart, despite some of these broader cost pressures, which we've spoken through. How easily achievable were those efficiencies, and how easily, or how much more productivity gains may there be going forward?
The changes, no changes on the productivity side are easy. Of all of our divisions, I'd say Kmart deserves some real credit for facing into digitizing so many of their business processes. Whether it's the product design and sourcing capabilities I talked about earlier, whether it's the use of RFID in store to improve availability and to help team members manage stock to improve availability for e-commerce, a whole range of areas they have done a lot of great work. I guess the other point is, as I mentioned, Kmart is a product development company as much as a retail company. We should generate a higher profit margin than many of our competitors. I would caution, the way we think about profit margin is profit margin is an outcome.
There is no one in Kmart that is saying, right, we must hit this profit margin. The profit margin will be the outcome of what do we need to do to ensure we have lowest price? What do we need to do to keep reinvesting in the growth of the business? Ultimately, the profit margin will be what it will be. As a result of the productivity initiatives, as a result of the improvements in the efficiencies in sourcing, we have seen some improvement in margin. The other driver of that as well is we have integrated the Target business into Kmart. We are running now Kmart and Target as one business, two brands. That has been an enormous benefit for Target.
Target, as a standalone business over the years, hasn't had the capacity to invest in a lot of the platforms and systems and capabilities that Kmart have. As a result of benefiting from that, that has driven another level of profitability and improvement. Target, although we don't separate out the results for Target, Target is a profitable business. We've seen a good step up in profitability over the last year as a result of integrating a lot of the back office and leveraging a lot of the sophistication that Kmart has on the system side.
Yeah. Perhaps moving on then to one of the segments where you said there's still quite a material opportunity on the health side. Can you maybe just talk through more specifically where you're seeing those opportunities between wholesaling, the retail brands, obviously recently launching atomica as well? Maybe just talk through how you're thinking about the outlook for health.
Yeah, we still feel quite positive about the outlook for health. I'd say that we're probably a year or two behind where we would have liked to have been. We found that there was more investment required, certainly on the wholesale side of the business, and there were a few cost headwinds that we've been navigating on the wholesale side, which has meant that it's just taken a bit longer to realize the opportunity there. On the positive side, we're really pleased with the progress we're making on the retail side of the business. Priceline is performing a lot better. We feel that we're now getting the proposition to a point where it is more scalable and we are able to put the foot on the accelerator around growth.
That goes to just a lot of really simple retail basics that we're putting into, we're doing a lot better in Priceline. You mentioned atomica, we have 69 company-owned stores, and we're opening a few more atomica stores over the coming months. Early progress with the pilot stores has been positive. We feel that there is an opportunity in the beauty space to sit somewhere between the supermarkets at the lower end and the specialists or the Meccas at the higher end. There is still a lot of space around value, and we feel that there's a great opportunity for a more value-based specialist. Since we've opened a few stores, we've actually seen a lot of interest from a lot of international and domestic suppliers that historically would not have wanted to have their products in a Priceline, but are really excited about partnering with atomica.
The other area is on the digital side of health and e-commerce and leveraging the Sister Club program, where we're only just at the early stages of that. In summary, still very excited about the longer-term opportunities. Wholesale has been a bit tougher, a bit slower going than we would have liked, but very confident about the future of the retail business.
Yeah. Particularly on that Priceline side as well, can you just speak through, you mentioned changes from a basic retailing perspective. What does that look like? Is that a product category perspective? Is that the kind of back-end stuff? What's changed from a Priceline point of view?
I think, look, quite a few things. I'd say, first of all, one of the unique challenges within the pharmacy sector is the franchise-type models, which different forms of franchise-type models exist across all players, including even a Chemist Warehouse. I'd say one of the reasons why Chemist Warehouse has been such a strong business has been the consistency and the discipline of their offer. Whereas if you look at a lot of the other groups, and Priceline was one of these, we had about a third of our Priceline stores that were performing exceptionally well, but there was a high degree of inconsistency. Now, why was there inconsistency? It was because historically, there wasn't the same level of trust from the franchisees that Priceline, the group, would deliver the products, the pricing, the consistency, the availability, the digital tools that were so essential.
We've really improved a lot of those capabilities, and we're seeing much better alignment and compliance. That goes to better availability, better products. We've also worked hard to sharpen our pricing on around 150 key value lines. There are some products that customers just aren't prepared to pay more for. They're happy to go to a Priceline if they can get these basic items at a really competitive price, but they're more than happy to come to Priceline because we'll have a broader range of products. When you shop at a, when you go into a pharmacy, you're not just buying a product, you're often seeking some level of advice. You want to engage with a pharmacist to actually talk about your health and talk about solutions there. That is an area where someone like a Priceline can do a lot better than the discount competitors.
It's a whole range of transformational activities across pricing, availability, better leveraging our loyalty program, even now starting to get into the retail media space, which we are able to do within Priceline in a way leveraging our loyalty program, which not many other groups have to that level of detail. Of course, it's the advice element. These are all the ways that we feel that we can compete really effectively.
Conscious we're running out of time, but perhaps one final question from us. Looking forward over the next 12 months, what opportunity are you most excited about for Wesfarmers?
12 months is a very short period of time for a company who strives to deliver a long-term top quarter of TSR. I will say two things. I know you said just one thing, but during times of volatility and uncertainty, Wesfarmers tends to do better. Generally, that's a combination of having a strong balance sheet. A divisional autonomy model allows our businesses to be more agile, more adaptive. We continue to allow our divisions to have capital at a time when others are tightening their belt. If we do see more disruption, more turmoil as a result of what's happening globally, then I'm really confident that we'll come out the other end even stronger. Across the portfolio, I'm really pleased that Bunnings is the largest part of our portfolio, and there's a lot of growth ahead within Bunnings.
In the short term, that excites me. There are many other things that excite me, but that's beyond 12 months.
Okay. As always, a lot happening at Wesfarmers. Thank you very much for your time, Rob. Could everyone please join me in thanking Rob?
Thanks.