• Stable revenue and strong cashflow
• Retail H1 Operating EBIT margin of 7.2%, within previously announced guidance range
• Hotels sales momentum increased during the half, with all business drivers in growth
• Strong cash flow generation driving lower net debt and improved balance sheet metrics

Endeavour Group reported first half sales of $6.6 billion, broadly in line with H1 FY24. Retail sales fell by 1.5% to $5.5 billion, reflecting subdued consumer spending in Q1 and an estimated $40 million to $50 million in lost sales due to Victorian supply chain disruption. However, the Group delivered a strong trading performance in December, with Dan Murphy's and BWS achieving record sales results. Hotels sales grew by 3.3% to $1.1 billion, with momentum increasing throughout the half. Group gross margin as a percentage of sales increased to 34.9%, reflecting improvements in both Retail and Hotels. The Group delivered operating cash flow of $1 billion, representing an improved cash realisation rate of 168%. Net debt fell by $273 million due to improved working capital, and the leverage ratio decreased to 3.2x. The Group incurred $13 million in one-off restructuring costs, and EBIT fell by 10.0% to $595 million. The Board declared a fully franked interim dividend of 12.5 cents per share, representing a payout ratio of 75%. The Group's One Endeavour program to separate from Woolworths systems and simplify the technology landscape remains on track, and the Group continued to pursue opportunities to unlock value in its property portfolio.

In FY25, the Group expects capital expenditure of between $375 million and $425 million, including One Endeavour, and finance costs of between $305 million and $315 million.

Sales growth for the first seven weeks of H2 was -0.8% for Retail and +4.7% for Hotels. Retail sales in the first 7 weeks have been impacted by ongoing effects of supply chain disruption, but Hotel sales have accelerated in Q3. The Group expects Retail market conditions to improve as inflation moderates, and its commitment to price and value leadership is expected to drive improved sales momentum in the second half. The Group will continue to prioritise operating efficiency and cost savings, and maintain capital discipline to support continued balance sheet strength.