preliminary results 2009/2010 - presentation€¦ · preliminary results 2009/2010 - presentation...
TRANSCRIPT
![Page 1: Preliminary Results 2009/2010 - Presentation€¦ · Preliminary Results 2009/2010 - Presentation Keywords: Preliminary Results 2009/2010 - Presentation Created Date: 4/20/2010 12:26:28](https://reader034.vdocuments.site/reader034/viewer/2022050101/5f4073fb6737107ada499055/html5/thumbnails/1.jpg)
Preliminary Results
20 April 2010
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David Reid
Chairman
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Progress - 09/10TescoBank
Korea
China
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Growing dividends
13.05
Pence per share
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ClubcardDouble points
Poland
Slovakia
Thailand
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EnvironmentGreen stores
Zerocarbon
store
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Community £60mraised for
good causes
CommunityChampions
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People
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Laurie McIlwee
Group Finance Director
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Financial headlines
• Broadly-based, double-digit profit growth
• Increased investment in the shopping trip, funded by Step Change
• Debt reduction more than our £1bn target
• £1.8bn property sold at attractive yields
• Excellent prospects for improving returns
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Group performance
• Sales £62.5bn, up 7%
• Trading profit rose 12% to £3.4bn
• Pre-tax profit and underlying profit before tax grew by 10%
*
* growth on a 52 week basis
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• Underlying diluted earnings per share up 9% to 31.66p
• Full-year dividend also up 9%
• Proposed final dividend 9.16p
Returns to shareholders
* On a constant tax-rate basis
*
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Group ROCE
12.7%
0.4% 13.1% 0.6%
12.1%
0.4%
*On a 52 week basis, restated for IFRIC13 and IFRS2
2008/09* Underlyingperformance
JapanImpairment
Acquisitions 2009/10
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• Sales up 6.1%
• 3.2% growth from like-for-like
• Trading profit up 7%
UK
* Ex-petrol, VAT-adjusted
*
*
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(1.5)
(1.0)
(0.5)
0.0
0.5
1.0
1.5
Q1 Q2 Q3 Q4
Tesco sales growth vs competitors
Source: Kantar WorldpanelNote: Competitor set comprises Asda, J Sainsbury, Morrisons, Co-Op, Somerfield, Iceland,
Waitrose, Budgens, M&S
%
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Maintaining success in the UK
• Improving shopping trip for customers and funding this investment
• Sustaining optimum level of new space to grow profitably into the long-term
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Step Change
• £550m incremental savings this year
• ‘Better, simpler and cheaper’
• Targeting £800m global savings this year
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Stock reductionBefore
After
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• 3-4% like-for-like growth
• New space pipeline to deliver a further 3-4% of new sales
• Excellent potential in non-food
Long-term UK growth
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International
Korea Slovakia
Turkey China
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International LFL
%
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Asia
• Sales up by 20%
• Trading profit rose 24%
• Turned around acquired Korean stores thathad been loss-making
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China
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China
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Japan
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Europe
• Sales stable
• Trading profit performance resilient
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Ireland
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United States
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International returns
• Like-for-like CROI down by 0.5%
• Continued investment through downturn
• Benefits of investment already being seen in Asia
• Drivers of improvement:– scale– asset maturity– market position
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All countries No 1 or 2 marketposition
No 1 or 2 marketposition - mature
assets
130
170
100
All countries No 1 or 2 marketposition
No 1 or 2 marketposition - mature
assets
130
170
100
Index
International returns
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Retailing Services
• Profits £540m, up 18%
• Contributed a quarter of Group profit growth
• Significant potential for future growth
*
* including Tesco Bank on a pro-forma basis
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Tesco Bank
• Focus on setting up systems and infrastructure
• Migration progressing well
• Profits rose 13% to £250m
• Bad debt trends improving and better than industry average
• Balance sheet in net surplus, with strong tier-1 capital ratio over 12%
* including Tesco Bank on a pro-forma basis
*
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Balance sheet
• Net debt reduction on £1.7bn, ahead of £1bn target
• Reduction achieved through:– managing capital expenditure back to a normal level– £0.6bn working capital improvement– release of value from property
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UK cashflow
£bn
EBITDA
Capex
’ ‘ ’ ’ ’ ’ ’ ’ ’ ’ ’ ’
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International cashflow
£bn
EBITDA
Capex
Note: Excludes China Property and U.S.
’ ’ ’ ’ ’ ’ ’ ’ ’ ’ ’
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Balance sheet
• Improved key credit metrics
• Financing and liquidity positions remain strong
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Debt maturity profile
£m
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Balance sheet
• Group capex this year about £3.5bn
• Target to reduce debt to £7.5bn by year-end
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PropertyIrlam
Fushun
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Property
• Solid UK margin progress as increased rents absorbed
• Yields substantial and sustainable profits
• Useful source of funds for financing growth
• Property worth significantly more than book value
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Conclusion
• Delivering for shareholders
• Strengthening the balance sheet
• Continued investment in our strategy
• Strong outlook for returns
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Terry Leahy
Chief Executive
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International
China Hungary
Ireland Malaysia
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Central Europe market share
2008 2009
Hungary 15.8 16.8
Slovakia 15.5 15.6
Czech Republic 7.8 8.1
Poland 4.8 4.9
Source: GFK
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Central EuropePoland
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Central EuropeCzech
Republic
Slovakia
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Slovakia
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Central EuropeHungary
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EuropeTurkey
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Ireland
• Completed operational changes
• 12,000 price reductions, averaging 20%
• Like-for-like turnaround – now strongly positive
• Growing market share
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Korea
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China
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Asia
Malaysia
Thailand
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Japan
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India
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Fresh & EasyCompton
ManhattanBeach
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Fresh & Easy
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Fresh & Easy
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Fresh & Easy
• Store economics improving steadily
• We’ll grow sales by more than 50% this year
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UK
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94.5%
95.5%
96.5%
97.5%
Mar May July Sept Nov Jan
2005
2008
2009
2007
Availability
2006
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Service
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RangeDiscount
brands
Finest
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Quality
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Clubcard
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Non-food
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UK - clothing
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International - clothing
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Tesco Bank
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tesco.com
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Tesco direct
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Telecoms
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dunnhumby
dunnhumby is now present in 26 markets
… and analyses the shopping transactions of 350 million customers
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Environment – long-term targets
• Become a zero carbon business by 2050
• Reduce the carbon impact of the products we sell by 30% by 2020
• Help our customers halve their own footprint by 2020
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Good jobs and careers
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Conclusion
• Strong, flexible business model
• Well-geared into the global recovery
• Emerging from recession even stronger
• Delivering for all stakeholders
• Good outlook for higher returns
• Renewed target to increase ROCE to 14.6%
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Q & A
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Preliminary Results
20 April 2010
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International returns – 2009/10
Korea
ROI
Thailand
Hungary
Malaysia
Slovakia
Czech Republic
Poland
Japan
Turkey
China
0
500
1,000
1,500
2,000
2,500
3,000
-8.0% -6.0% -4.0% -2.0% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0% 18.0% 20.0%c.7-10% c.10% c.15% c.20%
LFL CROI
£m capital invested