J Sainsbury Plc · LSE:SBRY
J Sainsbury — Investor Day (February 2024)
74 slides from J Sainsbury's investor day presentation, Feb 7, 2024
Slide 1: Strategy Update 2024
Strategy Update 2024 7 February 2024
Slide 2: Martin Scicluna
Martin Scicluna
Slide 3: Our eight key metrics
. . Sainsbury's Our eight key metrics Operational Financial Grocery market share performance @Ga® UPBT growth @Ga® Strong customer satisfaction scores @a® 200bps*+ reduction in retail operating cost to sales @epD Maintain strong colleague engagement @a® Dependable retail free cash flow: £500m+ pa av
Slide 4: Simon Roberts
Simon Roberts
Slide 5: Our Operating Board
Sainsbury's Our Operating Board Simon Roberts Blathnaid Bergin Rhian Bartlett Graham Biggart Chief Executive Chief Financial Officer Chief Food Chief Transformation & Commercial Officer | General Merchandise Commercial Officer Mark Given Prerana Issar Clodagh Moriarty Chief Marketing Officer Chief P
Slide 6: Our Commitments
Our Commitments Sainsbury's
Slide 7: Our Commitments
. Sainsbury's Our Commitments Food volume growth ahead of the market Deliver Profit leverage from sales growth Customer satisfaction higher FY27 | vs sFY24 £ibn cost savings over three years to Fv27 a Colleague engagement higher FY27 v vs FY 24 £1 6bn+ retail free cash flow over three ears: to Fv27
Slide 8: Food First: Where we are
Slide 9: We are now a stronger company
Sainsbury's We are now a stronger company What we set out to do in 2020 From To Food as part of a portfolio of brands >> Food back at the heart of Sainsbury’s >> _ Portfolio brands supporting food, delivering for TEL ce AENE FS MSSOSy SIN customers and shareholders in their own right Cost savings of
Slide 10: Stronger financial performance
. . Sainsbury's Stronger financial performance Total UPBT Net debt exc.leases Retailfreecashflow shareholder return 19/20 23/24 £611m Miecoom: 3 years to Jan’20 3 years to (10)% Jan’24 19/20 23/24 £(1,179)m 19/20 23/24 Note: 23/24 based on latest guidance and forecast J Sainsbury ple Next Level Sain
Slide 11: Food is firmly back at the heart of Sainsbury's
Sainsbury Food is firmly back at the heart of Sainsbury’s ~~ Sainsbury’s Grocery volume growth Grocery volume growth across differential to the market the shopping basket YoY % volume differential to the market? YoY % volume differential to the market? Household, Baby & Pet Health & Beauty Frozen Me
Slide 12: Food is firmly back at the heart of Sainsbury's
Sainsbury Food is firmly back at the heart of Sainsbury’s ~~ We're gaining volume Gaining more, losing less to from our competitors limited choice supermarkets Sainsbury’s net volume switching! % volume switching (to)/from Aldi and Lidl? f sine volume asda] Morrisons \ Gaining rae volume Cold Losing
Slide 13: We have reset our competitiveness
Sainsbury's We have reset our competitiveness Price index vs Aldi Improved 1,630bps Price index vs Tesco Price index vs Lidl Improved 200bps Improved 1,320bps November —______ February 2020 2024 Price index vs Asda Improved 570bps November —____y February November 2020 2024 2020 February 2024 Price
Slide 14: We have reignited food innovation
. . . Sainsbury's We have reignited food innovation More than doubled our Larger proportion of premium Taste the Difference now performing rate of innovation volume than competitors’ ahead of the market’ New products launched ae 's ae et 1,500 y, 600 IN 19/20 23/24 Sainsbury's Tesco, Asda, Aldi, Lid
Slide 15: Highly engaged and productive colleagues
Highly engaged and productive colleagues Improved colleague engagement +8ppt Overall improvement! April November 2021 2023 1 eSATscores November 2023 vs April 2021 (baseline) 2. Rates of pay relate to the National rate (excluding London) 3. Reduction inlabour cost / sales (excl. fuel) % Q3 23/24 vs
Slide 16: Delivering leading customer satisfaction
. . . . . Sainsbury's Delivering leading customer satisfaction Overall supermarket satisfaction score Asda 18/19 | 19/20 20/21 21/22 22/23 23/24 Q4 YTD Source: CSAT Supermarket Competitor Benchmark - Overall Supermarket satisfaction score % J Sainsbury ple Next Level Sainsbury’s February 2024 Strate
Slide 17: Nectar is ahead of plan
Nectar is ahead of plan wiz apm o7on Nectar participation has significantly Incremental profit contribution increased’ ahead of forecast +£90m additional profit by March 2026 March January 21/22 922/23 23/24 = 24/25 25/26 2021 2024 This chart is not to scale 1. Supermarkets and Groceries Online J Sa
Slide 18: We've transformed our operating efficiency in Argos
; . ee Argos We’ve transformed our operating efficiency =a in Argos Rebalanced our store estate Argos stores in Sainsbury’s Collection points Standalone stores FY 19/20 H123/24 1,100 Points of Presence 1, SimilarWeb traffic share, 12 weeks to 6 January 2024 Better availability, more efficiently Hubs
Slide 19: A more resilient business in cyclical markets
A more resilient business in cyclical markets Significant cost base reduction Argos SG&A to sales down >300bps 19/20 22/23 Sainsbury ple Next Level Sainsbury’s February 2024 Lower fixed costs protecting profit base Gl Operating Profit — Sales 16/17 17/18 18/19 19/20 20/21 21/22 22/23 23/24 forecast
Slide 20: 'Save to Invest' delivering cost transformation
‘Save to Invest’ delivering cost transformation Doubling therunrate Retail SG&A of cost savings to sales % { 3years 3years 19/20 23/24 to19/20 to 23/24 Sainsbury ple Next Level Sainsbury’s February 2024 Sainsbury's Cost savings and Retail SG&Atosales % SG&A / sales % Cost savings £m 17/18 18/19 19/2
Slide 21: Next Level Sainsbury's
ud y Next Level Sainsbury’s February 2024 Strategy Overview
Slide 22: Market context
Slide 23: Industry challenges
% Industry profitability at record low Inflationary environment Next Level Sainsbury’s February 2024 Increased scrutiny af Pressure on food security and supply chain Increasing regulation Slowing space expansion Changing ownership structures Strategy Overview
Slide 24: Well placed to win
Well placed to win Scale advantage A ROMY Higher Winning productivity culture JSainsbury ple Next Level Sainsbury's February 2024 Growing customer base —", TH Financial strength Sainsbury's Targeted investment for growth Strategy Overview 1 2a)
Slide 25: Next Level Sainsbury's
Next Level Sainsbury’s February 2024 Strategy Overview
Slide 26: Our brand is our greatest asset
. Sainsbury's Our brand is our greatest asset We’re at our best when we’re at the heart of Britain’s relationship with food Since 1869 1959 1986 1991 1994 1999 - Providing safe First appearance of First supermarket to Simply Take recipe Co-founded 2000 food for all “Good food costs less” —_ offer or
Slide 27: Our brand is our greatest asset
. Sainsbury's Our brand is our greatest asset We’re at our best when we’re at the heart of Britain’s relationship with food 2005 2011 2020 2022 2023 “Try Something _ “Live well for less” Keeping Nourish the New brand promise: New Today” campaign launched customers and Nation “Good food for all of us
Slide 28: Next Level Sainsbury's
Slide 29: We make good food joyful, accessible and affordable
Sainsbury's We make good food joyful, accessible and affordable for everyone, every day
Slide 30: Our strategy: first choice, loyalty, Argos, save to win
Sainsbury's We make good food joyful, a accessible everyone loves and affordable for everyone, Save an every day to win
Slide 31: A leading role in a sustainable UK food system
and play a leading role in creating a sustainable food system in the UK Strategy Overview
Slide 32: More food choice for more customers
More food choice for more customers Consistent value, every day The leader in freshness, availability and innovation A complementary range of relevant products and services Amore resilient food system Strategy Overview
Slide 33: First choice for food, building on Food First momentum
First choice for food, building on Food First momentum Sainsbury ple Next Level Sainsbury’s February 2024 Value that sticks Innovate to lead Tailored and Personalised Suppliers More for as partners more “gs | Fh Sainsbury's Strategy Overview ea
Slide 34: We have significant further opportunity
Sainsbury’ We have significant further opportunity aunsnurys More customers are doing But there is further opportunity to more of their shopping with us increase our primary shopper numbers Sainsbury’s primary shopper numbers* % of total customers that are primary shoppers? T +10% 22/23 23/24 Sainsb
Slide 35: More for more: more food range for more customers
Sainsbury's More for more: more food range available for more customers Only 15% of our Solution tailored by store with a focus on fresh food supermarkets offer our full food range PREPPED G READY i= . imeger a Silver Bronze Number of stores J Sainsbury ple Next Level Sainsbury’s February 2024 Strat
Slide 36: Clear role for products and services that complement Food
. Sainsbury's Clear role for products and services that complement the Food offer Sainsbury's Ty Ghabitat és. J Sainsbury ple Next Level Sainsbury’s February 2024 Strategy Overview [acl
Slide 37: A Sainsbury's General Merchandise business
. . . Sainsbury's A Sainsbury’s General Merchandise business that complements our Food offer Rebalancing space to drive profit conversion * Tu and Habitat at the core of £ profit per sq ft our offer * More engaging physical and digital proposition * Seasonally relevant, accessible design at brillian
Slide 38: A rapidly growing market
A rapidly growing market Projected number of electric vehicles in the UK 30m 0m 2020 2040 Next Level Sainsbury’s February 2024 * Ultra-rapid 150kW+ charging * Up to 200 miles on 30 minute charge * Reliable offer in safe, well-lit Sainsbury’s car parks * Accessible and inclusive charging bays | a Sma
Slide 39: Integrating Plan for Better across our business
. . Sainsbury's Integrating Plan for Better across our business Health sustainable diets mn Reductio Reduction in An inclusive place issions food waste plastic packaging work and shop II Q x x Better for you Better for the planet Better for the planet Better for the planet Better for everyone 85% he
Slide 40: A more sustainable UK food system
Sainsbury's Our long term success depends on a more sustainable UK food system The way we source A more sustainable Led by food system customer demand Collaboration J Sainsbury ple Next Level Sainsbury’s February 2024 Strategy Overview qa
Slide 41: Loyalty everyone loves
— more personalised, joyful, rewarding and transparent — for everyone Strategy Overview
Slide 42: Personalised, rewarding and integrated loyalty
Personalised, rewarding and integrated loyalty Joy and connection beyond transactions World-leading Nectar360 capabilities Strong coalition of partners Always transparent use of data Strategy Overview
Slide 43: Loyalty schemes are increasingly popular with customers
Loyalty schemes are increasingly popular with customers What do consumers look for in a loyalty scheme? Balance effort and reward 44% 42% 36% "| Personalise offers Changing Consistent Simpleuser Datasecurity Extra benefits offers and offers and experience rewards rewards Source: YouGov ‘What the Bri
Slide 44: Where we need to focus to continue to deliver
NEC We know where we need to focus ay TAR to continue to deliver 3.60 Building engagement and Nectar360 is well positioned to be driving greater loyalty world leading in a growing Retail Media market Oo nectar prices — Digital Integration User Experience J Sainsbury ple Next Level Sainsbury’s Februa
Slide 45: Delivering on these aspirations will drive greater growth
Delivering on these aspirations will drive greater growth in contribution Previous guidance Forecast incremental profit contribution +£90m additional profit by March 2026 21/22 22/23 +23/24 24/25 25/26 This chart is not to scale Sainsbury ple Next Level Sainsbury’s February 2024 Forward guidance wiz
Slide 46: More Argos, more often
More Argos, Unleash and transform passe Argos around the three things that have always made it brilliant — curated range, famously convenient experience and great value — so more customers buy more complete baskets more often Strategy Overview qa
Slide 47: Argos: convenient experience, great value
PAID ONLINE? Collect here CLICK & COLLECT convenient experi ) —so more vse ers buy complete ba: are BOG fo} * Famous for convenience * Inspiring choice, always great value * Supercharged digital capabilities * Accessible and relevant credit, care and services * Next level service, efficiency and sto
Slide 48: Argos transformation: the next phase
A Argos transformation: the next phase Clear opportunity Half of UK households shop at Argos! 3 times per year 1-2 items in their basket 1. Kantar Worldpanel. UK households vs ONS Total UK households 2022 2. YouGov Brandindex - brand health metrics ranking. December 2023 J Sainsbury plc Next Level S
Slide 49: Famous for convenience, inspiring choice, supercharged digital
Famous for Inspiring choice, Supercharged convenience always great value digital capabilities Accessible and relevant credit, care and services Next Level Sainsbury’s February 2024 Strategy Overview
Slide 50: Save and invest to win
Save and invest to win Save £1 billion and invest in transforming our capabilities - taking another big leap forward in efficiency, productivity and customer focus, continuing to build a platform for growth Strategy Overview
Slide 51: Save and invest to win
Save and invest to win Save £1 billion and invest in transforming our capabilities —taking another big leap forward in efficiency, productivity and customer focus, continuing to build a platform for growth ¢ £1 billion of structural cost reduction ° Well-invested technology platform protecting, comp
Slide 52: Further structural opportunities, upside in automation and productivity
one Sainsbury's Further structural opportunities, upside in automation and end-to-end productivity £1.3bn £1bn Productivity Automation and technology _- 3 years to 23/24 3 years to 26/27 Structure and proposition J Sainsbury ple Next Level Sainsbury’s February 2024 Strategy Overview a
Slide 53: Technology capability will enable our next phase of growth
Sainsbury's Technology capability will enable our next phase of growth 7) Safe and secure for our Fit for the future | Core systems colleagues Industrialised machine learning & artificial intelligence platform plas tou can rely on Sainsbury’s powered by technology on _ stable and secure Digital plug
Slide 54: Focused capital investment to drive higher returns
. . Sainsbury's Focused capital investment to drive higher returns Disciplined investment to Building organisational capability drive growth to deliver for the future * Clear prioritisation * Resource matched to outcomes * Creating new capabilities * Leveraging strategic partnerships 22/23 23/24 24/
Slide 55: Sainsbury's Bank
Sainsbury's Sainsbury's Bank [alejggy ENANCIAY J Sainsbury ple Next Level Sainsbury’s February 2024 Strategy Overview [ss
Slide 56: Our strategy summary
Loyalty everyone loves First choice for food Attract many more Build a world- people to choose leading loyalty Sainsbury’s as the platform place they come to —more personalised, for good food joyful, rewarding and play a leading role in and transparent creating a sustainable ~ for everyone food syst
Slide 57: Blathnaid Bergin
Blathnaid Bergin
Slide 58: Our Commitments
Sainsbury's e Our Commitments Food volume growth ahead of the market Deliver Profit leverage from sales growth Customer satisfaction higher FY27 vs 5 FYV24 £1bn cost savings over three years to Fy27 Colleague engagement higher FY27v vs FY 24 £1 ebn+ retail free cash flow over three years: to Fv27 De
Slide 59: Our financial framework
Our financial framework ray Food volume growth ths ( + SG&A/sales reduction + Measured reinvestment in the customer proposition -_ Robust profitability + Disciplined capital investment . Strong sustained cash flows Profit leverage and from sales growth higher return on capital Sainsbury ple Next Lev
Slide 60: Delivering profit leverage through Grocery volume growth
Sainsbury's Delivering profit leverage yy. through Grocery volume growth ntl Sainsbury’s Grocery volume Sainsbury’s Grocery growth; growth relative to the market’ inflation and volume Inflation% et Volume % mi . EH ae ee 19/20 23/24 Next Level Q4 Qi Q2 Q3 Next Level Yo2Y Yo2Y Sainsbury’s 22/23 23/24
Slide 61: Driving operating leverage by lowering costs
Sainsbury's Driving operating leverage “A by lowering costs Tr Operating cost inflation Operating cost savings cl 3 years to 3 years to 3 years to 3 years to 3 years to 3 years to 19/20 23/24 26/27 19/20 23/24 26/27 FY 20/21 excluded due to impact of Covid-19 J Sainsbury ple Next Level Sainsbury’s F
Slide 62: Driving operating leverage by lowering costs
e 6 . Sainsbury's Driving operating leverage ye. by lowering costs ital Cost savings and SG&A to sales SG&A / sales % Cost savings £m 17/18 =618/19 19/20. 20/21.) 21/22 22/23) 23/24) 9 24/25 25/26 = 26/27 J Sainsbury ple Next Level Sainsbury’s February 2024 Strategy Overview ea
Slide 63: We have reset our competitiveness
We have reset our competitiveness Price index vs Aldi Improved 1,630bps Price index vs Tesco Sainsbury's Price index vs Lidl Improved 200bps Improved 1,320bps November —______ February 2020 2024 Price index vs Asda Improved 570bps November —____y February 2020 2024 November 2020 February 2024 Price
Slide 64: Delivering operating profit leverage from sales growth
Sainsbury's cay Delivering operating profit leverage from sales growth Se Other SG&A Y to sales improvement Uy SG&A to sales improvement Volume et leverage Volume leverage 19/20 23/24 26/27 This chart is not to scale Charts and arrows are illustrative and not to scale. ‘Other’ includes retail (inc.
Slide 65: Focused investing to sustain and enhance competitive advantage
° e ° Sainsbury's Focused investing to sustain and enhance competitive advantage ron Capital spend Investment examples * “More for more” food space rebalancing * Supply chain and commercial platforms * Integrated loyalty I Efficiency * Physical and digital automation BH Growth * Nectar360 capabiliti
Slide 66: Focused investing to sustain and enhance competitive advantage
Sainsbury's cay Focused investing to sustain and enhance competitive advantage Capital spend 22/23 23/24 24/25 25/26 26/27 J Sainsbury ple Next Level Sainsbury’s February 2024 Strategy Overview ea
Slide 67: Strong sustained cash flows, higher returns
Sainsbury's Strong sustained cash flows, higher returns as C] Retail free cash flow Return on capital employed %! a no 24/25 25/26 26/27 mM WT rote 18/19 19/20 20/21 21/22 22/23 23/24 26/27 1. Arrow is illustrative and not to scale J Sainsbury ple Next Level Sainsbury’s February 2024 Strategy Overvi
Slide 68: Capital allocation framework
Capital allocation framework Invest in the business to support our strategy 1 2 Aga ti lihinestirsas Grete Target leverage of 3,0x-2.4x net debt/EBITDA balance sheet 3 Deliver strong dividends for shareholders 4 Progressive dividend commitment Sainsbury's FY25-FY27: £2.6bn capex, retail free cash fl
Slide 69: Our financial framework
Our financial framework ray Food volume growth ths ( + SG&A/sales reduction + Measured reinvestment in the customer proposition -_ Robust profitability + Disciplined capital investment . Strong sustained cash flows Profit leverage and from sales growth higher return on capital Sainsbury ple Next Lev
Slide 70: Conclusion
Conclusion Simon Roberts Sainsbury's
Slide 71: Our Commitments
. Sainsbury's Our Commitments Food volume growth ahead of the market Deliver Profit leverage from sales growth Customer satisfaction higher FY27 | vs sFY24 £ibn cost savings over three years to Fv27 a Colleague engagement higher FY27 v vs FY 24 £1 6bn+ retail free cash flow over three ears: to Fv27
Slide 72: We make good food joyful, accessible and affordable
Sainsbury's We make good food joyful, a accessible everyone loves and affordable for everyone, Save an every day to win
Slide 73: Disclaimer
° . Sainsbury's Disclaimer Certain statements made in this announcement are forward-looking statements. Such statements are based on current expectations and are subject to a number of risks and uncertainties that could cause actual events or results to differ materially from any expected future eve
Slide 74: Investor Relations contacts
. Sainsbury's Investor Relations contacts James Collins Amy Morgan Susie Lynskey Director of Investor Relations Head of Investor Relations Head of Investor Relations Tel: + 44 (0) 20 7695 7112 Amy.Morgan1@sainsburys.co.uk Susie.Lynskey@sainsburys.co.uk James.Collins@sainsburys.co.uk Isabel Miao Chue