Annual General Meeting 11 July 2012 David Tyler Chairman Justin - PowerPoint PPT Presentation

Annual General Meeting 11 July 2012

David Tyler Chairman

Justin King Chief Executive

2011/12 operating review  Good sales and profit growth against challenging market backdrop  Helping our customers Live Well for Less  Continuing to deliver our long term vision for growth

Group performance 2011/12 2010/11 Change Underlying results £m £m % Sales (inc VAT) 24,511 22,943 6.8 Sales (inc VAT, ex fuel) 4.5 Operating profit 789 738 6.9 Net finance costs (109) (97) (12.4) Share of JV profits 32 24 33.3 Profit before tax 712 665 7.1 Tax rate 26.1 26.0 (12) % % bps Basic EPS 28.1 26.5 6.0 p p Full year dividend per share 16.1 15.1 6.6 p p Statutory results Items excluded from underlying results 87 162 n/a Profit before tax 799 827 (3.4)

Market backdrop Customers shopping more frequently 6 Frequency contribution 2010/11 2011/12 4 Contribution 2 to growth % 0 Overall volume contribution (2) (4) Items per basket contribution (6)  Customers shopping more frequently, locally, to manage total spend and waste  Trend reflected in convenience and online growth  Negative volumes expected to continue through 2012/13 Source: Kantar Worldpanel 12we Total Grocery data to 22 Jan 12

Market backdrop Savvy shopper managing budget over time 12 2011/12 2009/10 2010/11 Royal wedding 10 & Spend Easter 8 % Easter Christmas Christmas Christmas 6 Easter 4 2 Save Grocery market growth Kantar total till roll, 4 w/e

Live Well For Less Reflecting the customer mood

Live Well For Less Our values make us different  Launched our 20 by 20 commitments – better for our customers, colleagues, suppliers and communities  Customers continue to endorse our commitment to our values

Live Well For Less Nectar is a key driver of customer loyalty and insight  Almost £200m in points redeemed in the year  375m coupons at till issued to customers  125 suppliers used coupon at till to promote their products across 650 campaigns

Live Well For Less Brand Match reinforces competitiveness of our pricing  ‘Cheaper here today’ coupons >50% of time More customers now agree that Sainsbury’s sells brands at the same price as other Supermarkets 100 Source: Weekly Sainsbury’s Brand Match Nectar Customer Tracking 90 % 80 70 60 Launch Today

A long-term vision for growth

Great Food Own label a point of difference  Continuous development to retain our quality lead  Converted 60% of by Sainsbury’s range this year – 70% of which is new or improved  In last 2 years launched or improved 9,000 products across own label Contribution to food sales growth 30 Contribution 20 to total food sales growth (%) 10 2 4 6 8 10 Year on year sales growth (%)

Great Food Great service and inspiration from our counters  18,000 colleagues trained at our Food & Bakery colleges  Great Food counters rolled out to 333 stores so far  Fastest growing counter sales of any major retailer

Compelling General Merchandise & Clothing Complementary to a great weekly food shop  Best food store in town, complemented by great non-food  Focus on ‘hero’ categories: home, TU clothing, papershop  Growing faster than food and gaining market share Average store space allocation Non Total Food Store Space (‘000 sq ft) Food 25 25 0 40 35 5 60 40 20 80 50 30

Complementary channels & services Fast growing businesses of scale  Convenience business of £1.3bn and online business of £0.8bn  Adding 1-2 stores per week to reach 500th convenience store in 2012/13  Over 50 stores delivering 1,000+ online orders per week Sainsbury’s vs Market Growth Convenience Online 30 30 Sainsbury’s Sainsbury’s 25 25 IGD Groceries online IGD Convenience and forecourt % growth % growth 20 20 15 15 10 10 5 5 0 0 08/09 09/10 10/11 11/12 08/09 09/10 10/11 11/12

Developing new business Investing to build our multi-channel capability  Most Click & Collect sites of any UK supermarket retailer – over 900 stores  Launched online music download service, recent acquisition of Anobii  Investing in IT systems to support growing digital and multi-channel platforms

Developing new business Sainsbury’s Bank  Driving growth by rewarding the Sainsbury’s shopper  Preferential pricing on Home and Car insurance for Nectar Card holders Sainsbury’s Bank operating profit 50 Sainsbury’s Bank operating profit 40 Sainsbury’s share of post tax profits 30 20 £m 10 0 (10) (20) 07/08 08/09 09/10 10/11 11/12

Growing space & creating property value A unique space growth opportunity  1.4m square feet added in 2011/12, circa 1m square feet ongoing  25% of the UK population not within 15 minute drive of a Sainsbury’s  Market share below 10% in 60% of UK postcodes Supermarket space added 2011/12 Market share weighted to the South Extensions New Stores Space Growth by region (%) Market Share (%) 20% plus 10% to 12% 15% to 20% 8% to 10% 10% to 15% 4% to 6% 5% to 10% 2% to 4% 0% to 2%

Summary  Good sales and profit performance  Challenging economic environment to continue  Live Well for Less reflects the customer mood  Consistent delivery of our long term vision for growth  2012 – A year like no other

Annual General Meeting 11 July 2012