Tesco Plc · LSE:TSCO
Tesco — Q2 2027 Earnings Presentation
48 slides from Tesco's earnings presentation, Oct 8, 2026
Slide 1: Interim Results 2026/27
Interim Results 2026/27 Ken Murphy, Group Chief Executive Imran Nawaz, Chief Financial Officer 8 October 2026
Slide 2: Continuing to strengthen the customer offer and create long-term value
Continuing to strengthen the customer offer and create long- term value Highest ever customer satisfaction Strong financial performance Strong progress against our strategic ambitions Pictures will be updated post in-store photo shoot 2
Slide 3: Significant growth across all customer satisfaction measures
Significant growth across all customer satisfaction measures Our NPS has increased +16ppts since August 20211 Progress across all measures in the first half1 +209bps 33 +168bps +162bps +162bps 17 +90bps +47bps Aug Aug Ease Quality Range Reputation Reward Value 21 26 3 1. BASIS Global Brand Tracker 1
Slide 4: Highlights across the first half
Highlights across the first half Significant progress for customers and laying the foundations for future growth Aug Aug 21 26 Customer satisfaction at Over 800 new and More Your Clubcard Prices; UK’s #1 for rapid grocery New F&F website an all-time high improved products rolling out AI meal planner
Slide 5: Our colleagues are our greatest ambassadors
Our colleagues are our greatest ambassadors Over £200m invested in UK store colleague pay1, alongside broad package of benefits Rolled out cross-store shifts, giving colleagues more flexibility Our largest investment in colleague training for over five years Creating 5,000 work experience placements
Slide 6: Delivering for all our stakeholders
Delivering for all our stakeholders Suppliers Communities Planet Shareholders #1 in Advantage supplier survey Doubling our Free Fruit & Veg for Six new and updated Further returns via dividends for 11th year Schools programme sustainability commitments and buyback 6
Slide 7: Financial Performance
Financial Performance Imran Nawaz, Chief Financial Officer 7
Slide 8: Performance headlines
Performance headlines Further sales growth, building on strong performance Group sales1 Group adj. op. profit1 last year +1.6% £1,783m Like-for-like2 +1.0% +6.3% vs. last year Strong profit growth: improved mix and S2I delivery offsetting customer investments and cost inflation EPS3 Free cash flow I
Slide 9: Segmental performance
Segmental performance • Further sales growth on top of strong performance last year • Profit growth ahead of sales in all segments, supported by strong Save to Invest delivery Sales change Adj. operating profit Change at Change at Sales1 1-year 2-year Profit Margin H1 26/27 constant constant Margin5
Slide 10: UK
UK Further sales growth Large stores grow against Particularly strong growth in demanding base Finest and Online 2.1% 1.5% Large store LFL +1.1% Tesco Finest sales +8.9% Total sales LFL sales growth growth Online LFL +8.4%, with market Tesco Express sales broadly flat share1 up +16bps Total convenie
Slide 11: Market share performance
Market share performance Worldpanel1 Nielsen2 (includes rapid grocery) +113bps One-year Worldpanel change reflects exceptionally strong prior year base, as anticipated +14bps Four-year Worldpanel share gain now +113bps1 (24)bps One-year Four-year One-year change change change (12-week) (12-week) (4-
Slide 12: ROI
ROI Strong sales growth1 Sales and volume growth across Strong market share and all channels further reach 6.7% 4.1% Large +3.3% Market share2 +44bps to 24.1% supported by LFL and new space Total sales LFL sales growth growth Online +11.9% 9 new stores in the last 12 months including 4 Large stores
Slide 13: Booker
Booker Sales 2-year LFL Underlying progress during the period (£m) LFL Core retail1 1,714 (0.6)% 3.3% 1-year LFL performance reflects contract exit in core Core catering 1,418 (3.2)% 2.3% retail1, strong base in catering & tobacco Best Food Logistics 744 0.6% 2.1% 2-year LFL sales up 2.7% (exc. toba
Slide 14: Central Europe
Central Europe Volume-led sales growth Strong profit growth, Extending our reach supported by sales 1.1% 0.4% Online LFL +19.2% 6 new stores opened in the first half, including 3 Large stores Total sales LFL sales growth growth Large and Convenience LFL sales 17 new dotcom sites opened broadly flat
Slide 15: Group adjusted operating profit
Group adjusted operating profit Group adjusted operating profit bridge2 £17m £3m £1,783m Group adjusted operating profit up +6.5%1 £88m £1m £1,674m +6.5% Sales growth, Save to Invest and newer income growth streams helping drive profit growth Central Currency Ongoing investments into price, quality
Slide 16: Further Save to Invest progress
Further Save to Invest progress Cumulative Save to Invest £3.0bn £2.5bn On track to deliver £500m Save to Invest this year, contributing to >£2.7bn in five years £2.0bn £1.5bn In-year savings include: • Online picking optimisation £1.0bn • AI-led in-store replenishment improvement £0.5bn • Energy ef
Slide 17: A meaningful and growing contribution from newer income streams
A meaningful and growing contribution from newer income streams Complementary to our core food business Leverage our existing asset base Strong sales growth and highly attractive returns 17
Slide 18: Adjusted and statutory profit after tax
Adjusted and statutory profit after tax £m H1 26/27 H1 25/26 Change Adjusted operating profit 1,783 1,674 +6.5% Adjusted profit after tax up +6.8% Adjusted net finance costs (274) (263) • Adjusted net finance cost increase reflects return of Bank proceeds during FY 25/26 JVs and associates (4) (1) •
Slide 19: Adjusted diluted EPS
Adjusted diluted EPS Adjusted diluted EPS bridge1 0.4p 17.3p 0.5p 1.0p 15.4p +6.7ppts driven by strong growth in 12.2% adjusted profit after tax EPS growth +5.5ppts total share buyback benefit Ongoing Return of Adj. profit H1 25/26 share Bank H1 26/27 after tax buyback proceeds2 +6.7ppts +3.2ppts +2
Slide 20: Free cash flow
Free cash flow £m H1 26/27 H1 25/26 Cash generated pre-working capital 2,638 2,426 Strong Free cash flow delivery Decrease in working capital 567 408 • Underlying Free cash flow in line with H1 25/26 Operating cash flow 3,205 2,834 • Also includes a c.£250m net benefit, primarily due Cash capex1 (75
Slide 21: Clear priorities for capital allocation
Clear priorities for capital allocation Our capital allocation framework 1 Reinvest in business and customer offer FY 26/27: c.£1.7bn of Capex 2 Maintain a solid investment grade balance sheet Net debt/EBITDA c.2.3—2.8x 3 Pay a progressive dividend Target a pay-out ratio of c.50% of earnings 4 Consi
Slide 22: Increasing FY 26/27 Capex and share buyback
Increasing FY 26/27 Capex and share buyback ROCE 14.6% 15.2% 14.4% 13.4% 12.1% 11.8% FY 25/26 WACC Now expect c.£1.7bn of FY Capex; includes spend on energy efficiency & distribution transformation1 FY 21/22 FY 22/23 FY 23/24 FY 24/25 FY 25/26 H1 26/27 Share Buyback WACC Disciplined approach, with R
Slide 23: FY 26/27 Outlook
FY 26/27 Outlook Group adjusted operating profit between £3.15bn and £3.30bn (previously £3.0bn to £3.3bn) Free cash flow within our £1.5bn to £2.0bn medium-term guidance range 23
Slide 24: Strong delivery against our multi-year performance framework
Strong delivery Group sales Group adj. op profit against our multi-year £33.1bn £33.8bn £1,783m performance £1,649m £1,674m framework £31.5bn £30.4bn £1,426m 3.6% CAGR 7.7% CAGR H1 23/24 H1 24/25 H1 25/26 H1 26/27 H1 23/24 H1 24/25 H1 25/26 H1 26/27 EPS (p)1 Free cash flow 17.3 H1 26/27 timing £1,57
Slide 25: Strategic Update
Strategic Update Ken Murphy, Group Chief Executive 25
Slide 26: Creating a leading food-first retail ecosystem
Creating a leading food-first retail ecosystem Meeting more everyday customer needs Winning in food Connected, personalised and loved by customers Being the most strategic partner for suppliers 26
Slide 27: Continuing to deliver against our multi-year performance framework
Continuing to deliver against our multi-year performance framework Drive top-line • Increasing customer satisfaction relative to the market growth • Growing or at least maintaining our core UK market share In doing so, generate £1.5bn to £2.0bn free cash flow per year Grow absolute • Leveraging our
Slide 28: Our strategy begins and ends with food
Our strategy begins and ends with food 28
Slide 29: Delivering the best value to customers
Winning in food Delivering the best value to customers Full-line grocers Tesco 104 102 100 Now in 98 FY 24/25 H1 25/26 FY 25/26 H1 26/27 Tesco Express Maintained our strong price position Expanded Aldi Price Match to over Around 2.5m customers offered Your versus the market1 2,000 Express stores Clu
Slide 30: Strong innovation across our ranges
Winning in food Strong innovation across our ranges +6ppts Increase in quality perception over 5 years , supported by innovation 1 800+ New and improved products launched in the first half 8.9% Finest sales growth in H1 £3bn+ Annualised Finest sales 30 1. BASIS Global Brand Tracker 13 weeks rolling
Slide 31: Award-winning quality
Winning in food Award-winning quality 35 Great Taste 2026 Awards, including 4 three-star Great Taste cheeses 187 Award wins at the IWSC and IWC wine awards, including 7 Gold medals 2026 Free From Awards Retailer of the Year 86 Blas na hÉireann Irish Food award wins 31
Slide 32: The UK's leading rapid grocery offer
Winning in food The UK’s leading rapid grocery offer No.1 Customer choice for rapid grocery1 Over 2,100 Whoosh locations (up +436); over 75% population coverage +37% Whoosh sales growth in H1 New rapid grocery partnerships, complementing 32 1. Whoosh leading position metrics based on Multi channel t
Slide 33: Scaling online capacity
Winning in food Scaling online capacity +11% Increase in active customers during the half c.10% More slot capacity added across our estate in the last month 6am Delivery slots now available in our most popular locations Over 2,000 Electric delivery vans in operation, doubled in the last year 33
Slide 34: Making healthy food choices even easier for customers
Winning in food Making healthy food choices even easier for customers Enhancing nutrient profiles; Simplifying ingredients, inc. new Own-brand innovation including The most strategic partner for fibre-enriched bakery lines ‘Finest Just X Ingredients’ range high-protein ready meals scaling health bra
Slide 35: Unlocking F&F's online growth
Meeting more everyday customer needs Unlocking F&F’s online growth New website with hundreds of additional styles, more sizes and exclusive online collections Easier for customers to browse, discover and buy our full range On-site video and ‘Shop the look’ functionality 35
Slide 36: Progress in meeting more everyday customer needs
Meeting more everyday customer needs Progress in meeting more everyday customer needs 10% Clubcard discount on Barclays’ Cashback Rewards on Refreshed 201 in-store Over 1,000 sellers now on motor insurance through Tesco fuel purchases at Tesco, leveraging phone shops1 Marketplace, supported by AI- I
Slide 37: Tesco Media creates value at every point in the customer journey
Being the most strategic partner for suppliers Tesco Media creates value at every point in the customer journey Connecting customers with a new favourite: the Poppi launch story At home Branded Push Whoosh Strong revenue and profit growth; +17% growth in active Page Notification Sponsorship advertis
Slide 38: Further unlocking the power of Clubcard
Connected, personalised and loved by customers Further unlocking the power of Clubcard Rewards and surprises including Freebie Thursdays Nudges to customers to showcase Clubcard benefits Adobe x Tesco Innovation Lab helping us optimise helpful nudges for customers 38
Slide 39: Refreshing our store network
Connected, personalised and loved by customers Refreshing our store network Helping Tesco to be the preferred store in every community Putting fresh food at the heart of our stores 69 refreshes in the half including Sandhurst, one of our largest UK stores 39
Slide 40: Investing in digital infrastructure
Long-term business sustainability Investing in digital infrastructure Electronic shelf-edge labels in all UK stores across the next two years as part of Save to Invest Replacing over 40k paper labels in each large store; freeing up colleague hours for customers Other opportunities include smarter re
Slide 41: Investing in retail innovation
Long-term business sustainability Investing in retail innovation In-house R&D capability Retail innovators have direct One of five global grocers Committed £20m as anchor through Group Innovation & access to Tesco including through behind W23 Global, a $125m investor in new Bramble Fund, Tesco Labs
Slide 42: Enhancing our long-term resilience
Long-term business sustainability Enhancing our long-term resilience AI-powered demand forecasting; Six Sustainable Farming Groups: Collaborating to improve longer-term key commodity modelling across premiums offered for meeting higher resilience on the ground 20 markets standards and sustainability
Slide 43: Summary
Summary Strong financial and strategic progress Customer satisfaction at an all-time high Focused on delivering for customers and creating long-term value for all our stakeholders 43
Slide 44: Appendix
TESCO ME a a ae Appendix
Slide 45: Adjusting items H1 26/27
Adjusting items H1 26/27 H1 26/27 H1 25/26 £m £m Amortisation of acquired intangible assets (38) (38) Separation costs related to disposal of Banking operations (25) (13) Restructuring and adjusting property transactions (11) (20) Total adjusting items included within operating profit (74) (71) Net
Slide 46: Debt and liquidity
Debt and liquidity Debt maturity profile (£bn) Smooth debt maturity profile 1.00 Debt Maturities 2026 Issuance Less than £1bn maturing in any one year Weighted average maturity of c.6 years 0.75 0.50 Weighted average interest cost of c.4.8% (excluding leases) 0.25 Strong liquidity position £3.1bn ca
Slide 47: Guidance FY 26/27
Guidance FY 26/27 Group profit Adjusted operating profit between £3.15bn and £3.30bn Free cash flow Within our medium-term guidance range of £1.5bn to £2.0bn Capex Invest £1.7bn with continued focus on high-returning projects Net finance costs1 Adjusted net finance costs, which principally comprise
Slide 48: Disclaimer
Disclaimer Certain statements made in this document are forward-looking statements. For example, statements regarding future financial performance, market trends and our product pipeline are forward-looking statements. Phrases such as "aim", "plan", "intend", “should”, "anticipate", "well-placed", "