Tesco Plc · LSE:TSCO
Tesco — Shareholder Meeting (2016)
30 slides from Tesco's shareholder meeting presentation, 2016
Slide 1: Welcome to the Tesco AGM 2016
Welcome to the Tesco AGM 2016
Slide 2: John Allan, Chairman
John Allan Chairman
Slide 3: Dave Lewis, Group Chief Executive
Dave Lewis Group Chief Executive
Slide 4: Agenda
Agenda • Significant progress • Our three priorities • Q1 update • Looking ahead
Slide 5: Broad-based improvement
Broad-based improvement Improving like-for-like sales 4.0% 4.1% 3.5% 0.9% 1.0% 3.3% 2.4% 1Q 2Q 3Q 1Q 2Q 3Q 1Q 2Q 3Q 4Q 4Q 2.2% 0.1% 1Q 4Q (1.2)% 1Q 2Q 3Q 4Q (1.0)% (2.9)% (1.3)% (1.5)% (4.4)% 1Q 2Q 3Q 4Q (3.4)% UK ROI Europe Asia
Slide 6: Broad-based improvement
Broad-based improvement Group LFL Group operating 1.6% profit1 £590m £2.6bn 1Q 2Q 3Q £354m 4Q (0.3)% £161m (0.5)% (1.2)% 2H 14/15 1H 15/16 2H 15/16 Sales momentum Improving Retail operating profitability cash generation 1. Group operating profit before exceptional items.
Slide 7: Broad-based improvement
Broad-based improvement 68% 75% 60% 85 51% 80 76 71 71 40% Oct-14 Feb-16 2014 2016 FY 14/15 1H 15/16 2H 15/16 Customer Colleague Supplier satisfaction1 engagement2 viewpoint3 1. Reflects % customers rating overall service and colleague helpfulness as excellent as part of the weekly Customer Viewpoin
Slide 8: Three priorities
Three priorities 1 Regaining competitiveness in core UK business 2 Protecting and strengthening the balance sheet 3 Rebuilding trust and transparency
Slide 9: Improved customer offer
Improved customer offer 75% 80% 65% 80% 40% 55% 35% 55% Oct-14 Feb-16 Oct-14 Feb-16 Oct-14 Feb-16 Oct-14 Feb-16 Service1 Availability2 Price3 Range4 1. Reflects % of customers rating overall service and colleague helpfulness as excellent as part of the weekly Customer Viewpoint survey. 2. Reflects %
Slide 10: Better service
Better service 70% 85 114 104 71 71 76 80 52% 1 PI 2014 2016 Oct '14 Feb '16 More hours Colleague Customer engagement2 feedback3 1. Productivity Index. 2. Reflects % of colleagues recommending Tesco as a great place to work as part of What Matters To You Survey undertaken every January and August. 3
Slide 11: Record availability
Record availability Stock down 96% 10% 82% 94% Sales-based Clearer backrooms Optimum shelf availability capacity
Slide 12: Lower, more stable prices
Lower, more stable prices £46.98 7% 2Q 3Q 4Q 1Q £45.48 down 37% (15)% (26)% £44.73 (32)% Price investment1 Fewer coupons Multibuy promotions2 1. Price data shows the price paid for a typical basket of products as at August 2014, August 2015 and February 2016. 2. Reflects the year-on-year movement in
Slide 13: Brand Guarantee
Brand Guarantee Money off your bill at the till Ifyour branded shop of 10 or more different products is cheaper at Asda, Morrisons or Sainsbury’s, we'll give you the money back instantly
Slide 14: Right range for customers
Right range for customers + 2,011 new lines 33 18% Seeded Folded Flatbreads New All food categories Average range Innovation reviewed reduction
Slide 15: UK volume-based recovery
UK volume-based recovery UK like-for-like volume 4.0% 3.3% (7.0)% 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q1 4Q 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 1. 3Q 15/16 adjusted for the impact of non-repeated coupons in the prior year.
Slide 16: Protecting and strengthening the balance sheet
Protecting and strengthening the balance sheet £3bn £2bn £1bn 13/14 14/15 15/16 Pension transition Sale of Homeplus Capital discipline complete
Slide 17: Protecting and strengthening the balance sheet
Protecting and strengthening the balance sheet Acquired Acquired Agreed sale freehold: freehold: of 14 sites 36 superstores 21 superstores for £250m 13 Extras March 2015 October 2015 February 2016
Slide 18: Rebuilding trust and transparency
Rebuilding trust and transparency Supplier viewpoint1 68% 60% 51% 5 24 5 <£100k = 14 days FY 14/15 1H 15/16 2H 15/16 Accept GCA New commercial Payment terms Encouraging findings approach and on-time progress payment 1. Reflects % of UK suppliers responding positively when asked “overall how satisfie
Slide 19: Rebuilding trust and transparency
Rebuilding trust and transparency No surplus food waste by 2017 Charity Community Food Local community partnership Connection grant scheme
Slide 20: Rebuilding trust and transparency
Rebuilding trust and transparency BrandIndex Index Score – an overall measure of brand health 18.0 0.0 Jan 2014 Feb 2016 Source: YouGov Brand Index
Slide 21: Three priorities
Three priorities 1 Regaining competitiveness in core UK business UK transactions up 2.8% in 4Q 2 Protecting and strengthening the balance sheet Total indebtedness £6.2bn lower 3 Rebuilding trust and transparency Customer, colleague, supplier measures all improved
Slide 22: Q1: Positive like-for-like sales growth maintained
Q1: Positive like-for-like sales growth maintained + 0.3% + 2.8% + 3.3% UK & ROI Europe Asia
Slide 23: Q1: Continued volume growth
Q1: Continued volume growth + 2.2% + 5% +2.7% UK Fresh meat and produce International outperformance
Slide 24: Underpinned by improving customer offer
Underpinned by improving customer offer 75% - 6% 60% 15/16 16/17 May-15 May-16 Lower prices Simpler model Better service
Slide 25: Greater focus on our core business
Greater focus on our core business
Slide 26: “Britain’s Favourite Supermarket”
“Britain’s Favourite Supermarket”
Slide 27: What’s next?
What’s next? • The customer remains our number one priority • Remove reasons to shop elsewhere • Do more of what makes Tesco unique • Continue to simplify our service model • Rebuild longer-term profitability….sustainably • Challenging, deflationary and uncertain market
Slide 28: Removing reasons to shop elsewhere
Removing reasons to shop elsewhere Unique Value Equation Tesco offering
Slide 29: “Little Helps” for customers
“Little Helps” for customers
Slide 30: Serving Britain’s shoppers a little better every day
Serving Britain’s shoppers a little better every day