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

24,511 789 (109) 32 712 26.1 28.1 16.1 87 799 bps Underlying results Sales (inc VAT) Sales (inc VAT, ex fuel) Operating profit Net finance costs Share of JV profits Profit before tax Tax rate Basic EPS Full year dividend per share Statutory results Items excluded from underlying results Profit before tax

2011/12 £m 2010/11 £m

6.8 4.5 6.9 (12.4) 33.3 7.1 (12) 6.0 6.6 n/a (3.4)

Change %

% p p % p p 22,943 738 (97) 24 665 26.0 26.5 15.1 162 827

Market backdrop

Customers shopping more frequently

• 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

Contribution to growth %

Frequency contribution Items per basket contribution Overall volume contribution (6) (4) (2) 2 4 6 2011/12 2010/11

Market backdrop

Savvy shopper managing budget over time

Kantar total till roll, 4 w/e

2 4 6 8 10 12

Christmas Royal wedding & Easter Christmas Easter Christmas Easter

%

2009/10 2010/11 2011/12 Grocery market growth Spend Save

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

More customers now agree that Sainsbury’s sells brands at the same price as other Supermarkets

60 70 80 90 100

Launch Today

%

Source: Weekly Sainsbury’s Brand Match Nectar Customer Tracking

Live Well For Less

Brand Match reinforces competitiveness of our pricing

• ‘Cheaper here today’ coupons >50% of time

A long-term vision for growth

Contribution to total food sales growth (%) 10 20 30 2 4 6 8 10 Contribution to food sales growth Year on year sales 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

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

Store Space (‘000 sq ft)

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

25 35 40 50 Food 25 40 60 80 Total 5 20 30 Non Food

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 5 10 15 20 25 30 08/09 09/10 10/11 11/12 Sainsbury’s IGD Convenience and forecourt

% growth

Online 08/09 09/10 10/11 11/12 Sainsbury’s IGD Groceries online

% growth

5 10 15 20 25 30

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

(20) (10) 10 20 30 40 50

07/08 08/09 09/10 10/11 11/12

£m

Sainsbury’s Bank operating profit Sainsbury’s share of post tax profits

Supermarket space added 2011/12 New Stores Extensions Market share weighted to the South

Space Growth by region (%) Market Share (%)

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

20% plus 15% to 20% 10% to 15% 5% to 10% 10% to 12% 8% to 10% 4% to 6% 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