J Sainsbury Plc · LSE:SBRY
J Sainsbury — H1 2024/25 Earnings Presentation
73 slides from J Sainsbury's earnings presentation, November 2024
Slide 1: Interim Results 2024/25
Interim Results 2024/25 Sainsbury's
Slide 2: Next Level Sainsbury's
Introduction Sainsbury's Next Level Sainsbury’s We make good food joyful, accessible and affordable for everyone, every day . . Loyalt First choice ev a a More Argos, save and for food 1 y more often 5 oves to win Attract many more people Build a world-leading Unleash and transform Save £1 billion a
Slide 3: Our winning combination is delivering
Introduction Sainsbury's Our winning combination is delivering Continued outperformance on customer satisfaction’ Sainsbury’s Sn _ Asda oo oaisns Qi Q2 es Q4 2023/24 Qi Q2 2024/25 Q3to date 1. CSAT Supermarket Competitor Benchmarking data— Overall Supermarket Satisfaction. Q3 to date covers 4 weeks
Slide 4: More customers choosing Sainsbury's for their big food shop
Introduction Sainsbury's More and more customers are choosing Sainsbury’s for their big food shop Winning more big basket One quarter of new primary shoppers primary customers: are new to Sainsbury’s’ Primary shopper growth (YoY %) New Sainsbury’s primary shoppers (%) Sainsbury’s Market Traded up fr
Slide 5: Biggest grocery volume share gains in the market
Introduction Sainsbury's Biggest grocery volume share gains in the market Six quarters of volume and value market share gains’ Strongest switching gains of all retailers’ bps 80 60 Volume 40 Value 20 Q123/24 Q223/24 Q323/24 Q423/24 Q124/25 Q224/25 Net volume gains (m) 200 Sainsbury’s 100 Morrisons 0
Slide 6: Strong start to our Next Level plan
Introduction Sainsbury's Strong start to our Next Level plan Operating profit growth Growing our supermarket Delivering enhanced ahead of sales coverage in key locations shareholder returns B2ai25 Sainsbury’s 7 contribution growth? @ fo) ° H1 Cash return e [ to shareholders £353m Number of Supermark
Slide 7: Our Commitments
Introduction Sainsbury's Our Commitments Food volume growth ahead of the market Deliver profit leverage from sales growth: Customer satisfaction higher: 26127 vs 23/04 etbn cost savings over three years to 26/27 Colleague engagement higher 26/27 v vs 23/24 £1. 6bn+ retail free cash flow over three y
Slide 8: Get lower prices
Get lower prices Blathnaid Bergin Chief Financial Officer
Slide 9: Our financial framework
Financials Our financial framework a Food volume growth hs ( + 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 JSainsbury ple No
Slide 10: Retail sales growth by category
Financials Sainsbury's Retail sales growth by category Sainsbury's sales growth’ Argossales growth’ Total Retail sales growth’ Hi H1 Grocer H1 16% 5 5.0% H1 3.1% . —— (5.0)% 5.3% — 4.8% Qi Q2 4.2% (1.4)% az H1 Excl. Fuel Qi Q2 ice sales growth growth 1. Excl. Fuel, inc. VAT 2. Including Republic of
Slide 11: Retail underlying operating profit
Financials Retail underlying operating profit Retail Underlying Operating Profit +3.7% Sainsbury’s contribution’ YoY £503m 48.7% Sainsbury's 2024/25 Guidance We continue to expect to deliver retail underlying operating profit of between £1,010m and £1,060m, growth of between five per cent and ten pe
Slide 12: Profit leverage from sales growth
Financials Profit leverage from sales growth Grocery volume growth delivering profit leverage H1 24/25 Sainsbury’s contribution growth? Sales growth" RUOP growth Total Retail Sainsbury’s 1 Inc. VAT, excl. Fuel 2. £m contribution, Sainsbury's operating profit before group cost allocation JSainsbury p
Slide 13: Financial Services
Financials Financial Services Sainsbury's H1 H1 Financial Services' 2024/25 2023/24 Underlying revenue £320m £318m Total Underlying operating profit £18m £13m Net interest margin? 4A% 47% Cost/income ratio? 69% 70% Bad debt as a percentage of lending: 21% 21% Total Capital Ratio® 18.4% 18.1% 2024/25
Slide 14: Financial Services guidance
Financials Sainsbury's Financial Services guidance Financial Services phased withdrawal Guidance Sale of Argos * Income, together with commission Sale of personal loan, credit Financial sevice income from insurance, travel money card & retail deposit portfolios Newb ear 4 and ATMs to deliver sustain
Slide 15: Underlying profit before tax
Financials Sainsbury's eo oe Underlying profit before tax UPBT YoY movement’ Earnings per Share’ UPBT up up 1.9% 2024/25 Guidance £18m £5m £(7)m_ 4.7% YoY YoY We expect an underlying tax Financial, Krone rate of around 30 per cent. Retail Services costs We expect underlying net finance costs of betw
Slide 16: Items excluded from underlying results
Financials Items excluded from underlying results Sainsbury's 2024/25 Guidance We expect to incur non- underlying Retail cash costs of around £100m in 2024/25, of which £29m were incurred in H124/25 H1 H1 £m 2024/25 2023/24 Retail restructuring programme (37) (32) Impairment of non-financial assets
Slide 17: Cash flow metrics
Financials Cash flow metrics Working Capital Retail Free Cash Flow movement H1 H1 H1 H1 23/24 24/25 23/24 24/25 JSainsbury ple November 2024 Sainsbury's Net debt Net debt excluding leases including leases H1 H1 H1 H1 23/24 24/25 23/24 24/25 Interim Results 2024/25 L_17)
Slide 18: Net debt and Retail free cash flow
Financials Net debt and Retail free cash flow H1 H1 £m 2024/25 2023/24 Net cash from operating activities 1,074 1145 of which working capital movements' 179 273 of which pension cash contributions (23) (23) Capital expenditure (394) (389) Disposal proceeds, Interest income 22 27 Lease repayments* (2
Slide 19: Balance sheet metrics
Financials Balance sheet metrics Net debt / EBITDA’ H1 FY H1 23/24 23/24 24/25 Guidance We continue to target leverage of net debt to EBITDA of 3.0x to 2.4x JSainsbury ple November 2024 Return on capital employed’ H1 FY H1 23/24 23/24 24/25 Sainsbury's FY 25-27 commitment: Higher return on capital e
Slide 20: Shareholder returns
Financials Shareholder returns Interim Dividend per Share Free Cash Flow = Buyback -_> Dividend H1 H1 FY 23/24 24/25 24/25e JSainsbury ple November 2024 Sainsbury's 2024/25 Guidance £200m Share Buyback * £150m tranche 1 completed * £50m tranche 2 commencing tomorrow Interim Results 2024/25 L 20)
Slide 21: Summary
Financials Sainsbury's Summary What we’ve delivered in H1 24/25 * Strong grocery sales and volume growth in * Retail operating profit growth of both quarters between £1,010m and £1,060m * Retail operating profit up 3.7%; strong * £500m+ Retail free cash flow Sainsbury's and Nectar growth partially o
Slide 22: Simon Roberts, Chief Executive
Simon Roberts Chief Executive
Slide 23: 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 UK food system Interim Results 2024/25
Slide 24: Biggest share gains in Main Shop mission
Strategic outcomes First choice for food More customers, more often, with bigger baskets Biggest share gains in Main Shop mission’ Sainsbury’s Lidl Tesco mes = Waitrose a Aldi Asda 1. Kantar Panel, total FMCG (exc. Kiosk and Tobacco), Volume Share of Market by Mission - Main Shop, YoY share % change
Slide 25: Value perception catching up with reality
Strategic outcomes First choice Value perception catching up with reality for food Biggest ever improvement in value perception“... +8.5ppt Maintaining strong yoV (02) competitive price position Extended Aldi Price Match a @ 8 ala e2 3 alfa | to >650 Products 22/23 23/24 24/25 ..With strong progress
Slide 26: Launched >540 new products during H1
Launched >540 new products during H1 BANG BANG NOODLE Z P 4 GOLDEN * INDIAN STYLE mio J SUMMER GREEN BUTTERFLY - F) VEGETABLE ICHICKEN BREAST] ~ ‘ ; MEDLEY Taste the Baskets contain 1 Total Taste the Difference sales growth - Q2 2024/25 Difference Taste the Taste the 2. Kantar Panel, total FMCG (exc
Slide 27: Strongest Premium Own Label performance in the market
Strategic outcomes First choice Strongest Premium Own Label performance for food in the market YoY % Value growth’ Sainsbury’s 20% . | | Asda Morrisons Tesco Market Marks & Aldi Lidl Waitrose Spencer -10% -20% 1 Kantar Panel, total FMCG (exc. Kiosk and Tobacco), Premium Own Label tier, YoY % value g
Slide 28: Championing resilience in the UK food system
Strategic outcomes Sainsbury's Championing resilience in the UK food system Driving greater sustainability Innovation in product and packaging First UK supermarket to introduce peat-free conventional mushrooms First major retailer to vacuum pack all lamb mince, using 65% less plastic New bakery pack
Slide 29: Simple and frictionless shopping missions
November 2024 More of the right range & propositions accessible to more customers Simple and frictionless shopping missions Connecting Leading digital customers to our capabilities driving brand and value greater relevancy & profitability Interim Results 2024/25
Slide 30: More for More: rebalancing space towards food
Strategic outcomes First choice More for More: for food Leveraging our unique opportunity to rebalance space and drive volume gains Rebalancing supermarket space towards food Projected cumulative Food sales uplift (£m) _ c.300,000 sqft Projected Food space growth (sq ft) 2024/25 2025/26 2026/27 2024
Slide 31: Investing to grow our supermarket coverage
Strategic outcomes Sainsbury's Investing to grow our supermarket coverage Acquisitions in key target locations: Bringing our quality and value * 11 stores acquired from Homebase to new customers * 2 stores acquired from Co-op’ ) * c.20 new supermarkets to open over the next 18 months (including acqu
Slide 32: Strong sales growth and share gains in Convenience
Strategic outcomes First choice Strong sales growth and share gains in Convenience Mia Convenience sales growth Availability (Guay | Customer satisfaction’ Quality’ Market share’ MoAdi H1 H1 23/24 24/25 1 CSAT Convenience Competitor Benchmarking data - Q2 2024/25. Availability of Products, Quality o
Slide 33: Enhancing our Convenience store offering
Strategic outcomes First choice Enhancing our Convenience store offering for food Rebalancing space and Only grocer to launch Aldi optimising range Price Match in Convenience {2 Breakfast, - lunch and dinner favourites, oe price matched = to Aldi Sainsburys God Food fy allot us * Two-week transforma
Slide 34: Strengthening Online and OnDemand
Strategic outcomes Continuing to strengthen Online and OnDemand “for food Leading Online customer satisfaction heading into Christmas' Strong growth in OnDemand Overall Satisfaction Sales Number of stores Sainsbury’s +86% YoY Tesco Quality 4 +4ppts Morrisons YoY Availability eda of slots a a2 3 a! a
Slide 35: Renewed focus on design in Tu Clothing
Strategic outcomes Sainsbury's Renewed focus on design in Tu Clothing Tu Clothing Th Renewed focus on design U in Womenswear: wonxs iveny Q2 sales +10% Market share gains’ Significant improvement in availability Improving our essentials range Strong performance in kids and babywear with further oppo
Slide 36: Growing Smart Charge participation
Strategic outcomes Sainsbury's Growing Smart Charge participation Ultra-rapid electric vehicle charging network, powered by Sainsbury’s >500 Charging bays 62 Locations * Nectar partnership: 60% of Nectar Smart Charge customers are shopping with Sainsbury’s whilst charging * New tech capability enabl
Slide 37: 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 Interim Results 2024/25 [_37)
Slide 38: On track to deliver at least £100m incremental profit
Strategic outcomes Loyalty On track to deliver at least £100m everyone incremental profit Forecast incremental profit contribution... .. driven by strong growth in Retail Media’ +£100m additional profit by March 2027 Ela §©6Retail Media Data & Insights come Loyalty \ \ Z| 23/24 24/25 25/26 26/27 23/
Slide 39: Personalised and rewarding Nectar loyalty scheme
Strategic outcomes Loyalty Personalised and rewarding Nectar loyalty scheme [is Strong growth Significant improvement in Nectar participation’ in Nectar value perception’ + . or Og =: £2bn nectar saved since launch Tt fT prices 2 5m customers per week £70m saved in the last year 1m March H1 H1 March
Slide 40: Growing our Nectar360 capabilities
Strategic outcomes Loyalty Growing our Nectar360 capabilities “oves. AIVIERICAN| EXPRESS ah on ©: Néfo STORE Viking Meta sky G et DubMatic ROKT Extending the Nectar coalition Strengthening agency and digital partnerships MARRIOTT —, a = BONV°Y PRITISH a TRENT » sig Pa % : IG OMG ns Digitising instor
Slide 41: More Argos, more often
PAID ONLINE? LICK & COLLECT aAnsToOrmM APT always made it range, fam vi cere nd grea lue=s0 more cust ompl baskets more often ~ —_ More Argos, more often * Famous for convenience * Inspiring choice, always great value * Supercharged digital capabilities * Accessible and relevant credit, care and ser
Slide 42: Tough Q1, stronger Q2
Strategic outcomes More Argos, more often Tough Q1, stronger Q2 |_ Qt | * Weather-impacted slow start to summer Argos vs BRC market (YoY growth %)' woe . . * Reduction in online traffic “iokis * Weaker consumer demand for large Argos ticket items: impact on ASP . $uus 0% Volume Traffic Market —__ Sh
Slide 43: Improving our digital experience
Strategic outcomes Improving our digital experience Driving traffic and improving conversion ren - | iGtas Growing our digital Homepage personalisation presence to ensure Argos is driving increased click top of mind for customers through rates JSainsbury plc November 2024 More Argos, more often Enha
Slide 44: Strengthening the breadth of our range
Strategic outcomes Strengthening the breadth of our range Extending our offer through Supplier Direct Fulfilment 1,600 new products 25 new brands +7% sales growth Securing supplier support for biggest global launches ‘8 Pm. a Refocusing on our own brand j More Argos, more often Launched Made to Orde
Slide 45: Resetting our trading events
Strategic outcomes More Argos, more often Resetting our trading events Hero products — 5 sfitbit — ByBaw = ) 9 we @ic SAMSUNG Appealing Promotions! | dyson +3ppts YoY ~ ¢ Impactful and focused value activity og ; * Biggest and most popular brands included ef ' * Nectar points multiplier eS. e habita
Slide 46: Improving efficiency and working capital
Strategic outcomes Improving efficiency and working capital * Delivering simpler stock flow — Optimising availability and immediacy — Reducing stock holding * Flexing collection and delivery propositions * Continued transformation to more digital experience — 78 fewer standalone stores vs year end 2
Slide 47: 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 Save and invest to win ¢ £1 billion of structural cost reduction ° Well-invested technology pl
Slide 48: Operating cost savings
Strategic outcomes Save and invest to win Operating cost savings £1bn savings commitment by March 2027 £1.3bn savings delivered |, £1bn ————— £ibn —_—" ~eL savings commitment -————__, Structure and proposition SG&A / sales % Cost savings £m Productivity Automation and technology 17/18 18/19 19/20 20
Slide 49: Technology capabilities enabling our next phase of growth
Strategic outcomes Save and Technology capabilities enabling nee our next phase of growth . I t fi Why: Invest to Invest to Next Protect Compete Level How: @ ° ae SS Streamlining and _ Efficient & intelligent Maximising simplifying customer centricity existing platforms JSainsbury ple November 2024
Slide 50: High returning investments in technology driving efficiencies
Strategic outcomes High returning investments in technology driving efficiencies Invest to Protect Shrink protection technology * Shrink video analytics technology being rolled out to up to 200 stores by year end * Positive early results in identifying mis-scanned items © Looks like that last item d
Slide 51: Delivering productivity benefits through end-to-end programmes
Strategic outcomes Save and invest to win Delivering productivity benefits through end-to-end programmes Migration of all Food products to Simplifying replenishment machine learning forecasting * Rollout of pushers and dividers in * Category resets: Soft Drinks Availability ambient categories case s
Slide 52: Delivering on cost and efficiency
Strategic outcomes Save and invest to win Delivering on cost and efficiency Productivity improved and service maintained Colleague service CSAT' ee ON >100 bps improvement? Sainsbury’s hourly paid retail rate’ £ Sainsbury’s labour costs/ sales % Qt Q2 Q8 Q4] AA Q2 QB Q4} QA QZ QWs Qs} QA gq 2021/22
Slide 53: November 2024
November 2024 Interim Results 2024/25
Slide 54: Appendices
Slide 55: Guidance for 2024/25
Appendix Guidance for 2024/25 Profit * We expect Retail underlying operating profit of between £1,010 million and £1,060 million, growth of between five per cent and 10 per cent * We expect total Financial Services underlying operating profit (including discontinued operations) of between £15 and £2
Slide 56: Sales growth by quarter
Appendix Sainsbury's Sales growth by quarter Like-for-like sales growth 2023/24 2024/25 qi Q2 Q@3 Q4 qi Q2 H1 Like-for-like sales (exc. fuel) 9.8% 6.6% 7.4% 48% 2.7% 42% 3.4% Like-for-like sales (inc. fuel) 3.9% 2.2% 5.3% 2.9% 2.4% 19% 2.2% 2024/25 Total sales performance 2023/24 2024/25 Excl. Argos
Slide 57: Sales performance by category and channel
Appendix Sainsbury's Sales performance by category and channel Total sales! performance HI Hi Hi 2024/2 5 by category 2024/25 =. 2023/24 Change Proportion £bn £bn %o %o Sainsbury's 14.0 13.4 46 74 Grocery 13.1 12.4 5.0 69 GM (Sainsbury's) + Clothing 0.9 0.9 (1.5) 5 Argos 23 24 (5.0) 12 Total Retail
Slide 58: Retail margin
Appendix Sainsbury's Retail margin As of 14 September 2024 H1 H1 2024/25 2023/24 Change Retail sales (exc. VAT, inc fuel) £m 17,050 16,665 2.3% Retail underlying EBITDA’ £m 1,119 1,082 3.4% Retail underlying EBITDA margin? % —_— 6.56 ~~ 6.49 — Tops Retail underlying operating profit? £m 503 485 3.7%
Slide 59: Cash flow and net debt
Appendix Cash flow and net debt Sainsbury's H1 24/25 Cash Flow £m Working Net interest capital paid, Adjustments for movements WearEhitom ian: D&A, share based 179 = a payments & other (2) : Non- 648 eh underlying operating cash flows! fenee’ (394) 7 repayments” Proceeds on a disposal Dividends (277
Slide 60: Financial metrics
Appendix Sainsbury's Financial metrics As of 14 September 2024 H1 H1 2024/25 2023/24 Return on capital employed* 8.5% 7.9% Net debt to EBITDA’ 2.6x 2.6x Fixed charge cover? 27x 2.6x Underlying tax rate 29.2% 27.6% 1. Return is defined as a 52 week rolling underlying operating profit. Capital employe
Slide 61: Sainsbury's sales area and store numbers
Sainsbury’s sales area and store numbers Appendix Sainsbury's As at 14 September 2024 Supermarkets Convenience Total Area Area Area (000sq ft) Number (‘000 sqft) Number (000sqft) Number Opening figures 23/24" 20,857 597 Opening figures 23/24" 2,016 834 Opening figures 23/24" 22,873 1,431 New stores
Slide 62: Sainsbury's store estate
Appendix Sainsbury's e 9 Sainsbury’s store estate As at 14 September 2024 Number of stores Argos store numbers Sqft Under 10,000to 20,000to 40,000 to Over As at Asat sales area 10,000 20,000 40,000 60,000 60,000 Total 2March New Disposals/ 14 September Convenience 838 0 0 0 0 838 2024 stores closure
Slide 63: Sainsbury's store openings and closures
Sainsbury’s store openings and closures Appendix H1 2024/25 Supermarket Convenience New stores New stores Winchburgh Qi Liverpool — Princes Dock Local Qi OO Bradwell —Bluebell Meadow Local qu Clapham — Northcote Road Local Qu Lewisham — Lee High Road Local Q2 Tower Hamlets — Norton Folgate Local Q2
Slide 64: Breadth of our online grocery options
Appendix Sainsbury's Breadth of our online grocery options Grocery Click & Collect GOL Chop Chop Deliveroo / Delivery Click & Collect — Uber Eats / Just Eat Stores 263 319 293 1,126 Cities & towns 99% UK population 105 316 Average basket size £100-£110 £90-£100 £30-£40 £20-£30 Average weekly orders
Slide 65: Plc Board
Appendix Sainsbury's Plc Board s py Martin Scicluna Simon Roberts Blathnaid Bergin Jo Bertram Brian Cassin Chair Chief Executive Chief Financial Officer Non-Executive Director Senior Independent Director Jo Harlow Adrian Hennah Tanuj Kapilashrami Keith Weed CBE Nick Grant Non-Executive Director Non-
Slide 66: Plc Board: Martin Scicluna
Appendix Plc Board Martin Scicluna Chair Date of Appointment: March 2019 (joined the Board November 2018) Skills and experience Martin joined the Board as Chair Designate and Non-Executive Director on 1 November 2018. He was appointed Chair of the Board on 10 March 2019, and is also Chair of the Nom
Slide 67: Plc Board: Jo Bertram, Brian Cassin
Plc Board Jo Bertram Non-Executive Director Date of Appointment: July 2022 Skills and experience Jo joined the Board on 7 July 2022 and is amember of the Nomination and Governance Committee and the Corporate Responsibility and Sustainability Committee. Jo is a highly talented strategic business lead
Slide 68: Plc Board: Adrian Hennah, Tanuj Kapilashrami
Appendix Sainsbury's Plc Board Adrian Hennah Tanuj Kapilashrami Non-Executive Director Non-Executive Director Date of Appointment: Date of Appointment: April 2021 July 2020 Skills and experience Skills and experience Adrian joined the Board on 1 April 2021. He is Chair of the Audit Committee and a m
Slide 69: Plc Board: Keith Weed CBE
Appendix Plc Board Keith Weed CBE Non-Executive Director Date of Appointment: July 2020 Skills and experience Keith joined the Board on 1 July 2020 and became Chair of the Corporate Responsibility and Sustainability Committee on 7 July 2022. He is also a member of the Audit Committee and the Nominat
Slide 70: Operating Board
Appendix Sainsbury's Operating Board Simon Roberts Blathnaid Bergin Rhian Bartlett Graham Biggart Chief Executive Chief Financial Officer Chief Food Commercial Officer Chief Transformation & General Merchandise Commercial Officer Mark Given Prerana Issar ___ Clodagh Moriarty Chief Marketing Officer
Slide 71: Operating Board
Appendix Operating Board Simon Roberts Rhian Bartlett Chief Executive Chief Food Commercial Officer See Appendix 12 Date of Appointment: November 2020 Skills and experience Rhian joined the Operating Board in November 2020, having returned to Sainsbury's in 2019 as Director of Fresh Food. She is res
Slide 72: Operating Board: Mark Given
Appendix Operating Board Mark Given Chief Marketing Officer Date of Appointment: June 2020 Skills and experience Mark joined the Operating Board in June 2020. He has significant experience in customer insight, brand communication and digital marketing. Mark joined Sainsbury's in 2012, becoming Marke
Slide 73: Supplementary financial details
Appendix Supplementary financial details 1. Weighted average number of shares Hi H1 2024/25 2023/24 Weighted average number of shares (m) Diluted weighted average number of shares (m) 2,346.3 2,332.5 2,387.9 2,386.9 2. Share count Sainsbury's 3. Dividend 4. Financial calendar Q3 Trading Statement 10