Sainsbury`s Supermarkets

Transcription

Investor Briefing
June 2003
J Sainsbury Group operations
Food retailing and related activities
§ UK business
- no. 2 position
- 498 stores *
- strong brand
- Sainsbury’s to You
- Sainsbury’s Bank
- property – unlocking value
§ US business – Shaw’s
- no.2 in New England
- 185 stores *
* As at March 2003
Page 1
Group performance
Underlying Group profit before tax*
£m
Growth 10.8%
756
14.2%
695
627
1998/99
580
549
1999/00
2000/01
Growth at constant exchange rates
2001/02
2002/03
13.4%
12.1%
* Before exceptional items and amortisation of goodwill
Page 2
Sainsbury’s Supermarkets
Recovery
§ First actions
- stabilised customer numbers
- sold Homebase
- closed Egypt
- business review
§ Business transformation
- announced October 2000, work commenced April 2001
- update all systems
- reinvigorate store estate
- new supply chain
§ Business re-engineering
- reduce cost of operations
- deliver cost savings of £600m, updated to £960m
- increase operating margins
- balance sales and profits growth
The cost savings were increased to £960m in May 2003
Page 3
Information Technology
§ Outsourced all IT operations, maintenance and development to
Accenture in 2000
§ Store systems now in 431 stores and 158 petrol stations
- equivalent to over 11,000 tills and 4,500 pc’s installed so far
§ Infrastructure systems
- knowledge portal - Connect
- Oracle projects and accounts receivable
- customer data warehouse
§ Major systems delivery going forward
- store ranging and layout
rollout begun
- merchandising
- labour scheduling
in early stages
- new depot systems
}
}
Stores systems, encompasses:
Repos, desktop, customer information systems, checkouts, cash
office, back office, petrol filling stations, Fast Track, customers
contact management
Major systems delivery, providing new systems that; enables
the movement of goods, their ranging to store and supports the
management of deals/promotional monies, include:
Marketmax - supports the Range and Space Planning process
RMS (Retek Merchandising System) - the leading "off-theshelf" software solution providing a central data bank for all
product information
RDF (Retek Demand Forecasting) - links the store and depot
ordering systems creating an order and delivery for stores
TDW (Trading Data Warehouse) - creates new reports detailing
trading profitability and is the forerunner to EDW (Enterprise
Data Warehouse) that tracks data to deliver consistent
reporting
Page 4
Store estate
§ Major progress on our store reinvigoration
§ Successful extension programme
- 90 completed to March 2003
- planning 23 for 2003/04
§ 152 stores over 40,000 sq ft
- 30% of existing portfolio, compared with 10% 5 years ago
§ Successful convenience format
- currently 58 locals
- Shell deal signed – 100 more Locals to follow over 3 years
§ Average capital investment decreased by 10% last year
§ New systems capability enables better tailored ranges for each store
Main +: Main shop, extra services, general merchandise. These are the larger
out of town stores, typically over 46,000 sq ft
savacentre: Lower prices, greater emphasis on value, focus on family and those
on a tight budget. Main Shop with more general merchandise, limited premium
lines and more family-oriented simple good food and non-food
Core: Caters for the main grocery shop which are typically the edge-of-town
stores or the larger of the in-town stores. These typically range from between
20,000 – 46,000 sq ft sales area
Convenience: Meal solutions, fresh top-up, snacks & Grab & Go. Located within
the high street, urban and suburban areas. Typically the smallest in the estate,
trading under the Sainsbury’s Central and Sainsbury’s Local fascias
Number of stores
Refurbishments
Extensions
Total
Brought forward
New stores
Total
34
34
2000/01
16
34
50
27
77
2001/02
90
27
117
25
142
2002/03
40
29
69
39
146
90
236
125
10
23
33
43
156
113
367
Total
Forecast 2003/04
To complete
(1)
Total
(1)
Net of closures
(2)
15 supermarkets and 24 locals
(3)
18 supermarkets and 25 locals
Page 5
108
361
(3)
76
98
98
Expected total portfolio at March 2003
(2)
168
535
Supply chain
§ Hams Hall
- first fully automated depot now in ramp up
- will serve 80 stores with full service, excluding frozen foods
and slow moving items
- huge efficiencies for stores – deliveries from only 3 depots
- store friendly deliveries
§ Stoke
- opened in February, ramp up continues
- handles 16,000 slow moving lines
- serves half the country
§ Waltham Point
- in first phase of opening
- mirror image of Hams Hall
§ New Hoddesdon
- construction on target
§ 70% of stock will be delivered from new depots by summer 2004
Supply Chain
Depots
Operational
Fulfilment
Frozen
Slow
Moving
Emerald Park
Haydock
Langlands Park
Hams Hall
Under
Development
Status
Waltham Point
Purchased
Extended
Refitted
Operational
In construction
Elstree
Stone
Stoke
Size (sq ft)
350,000
500,000
248,000
700,000
690,000
Existing
Existing
New Hoddesdon
In construction
Operational
380,000
550,000
Fulfilment
Depots which facilitate distribution of chilled, produce and fast moving
ambient goods to store
Slow moving
Two specialist distribution centres using highly automated picking systems
enabling them to efficiently pick low volumes of a wide range of up to
16,000 slow moving and bulky products.
Page 6
Cost savings
£m
1000
800
600
400
200
0
2000/01
2001/02
2002/03
2003/04f
2004/05f
§ £210m delivered in 2002/03, £10m over target
§ On track to deliver
- £250m for 2003/04
- achieving £700m target (raised from £600m)
§ Extra year added bringing total to £960m by 2004/05
Buying
efficiencies
Operating
costs
Total
2000/01
2001/02
25
75
65
85
90
160
2002/03
110
100
210
210
250
460
£m
2003/04 forecast
2004/05 forecast
250
250
960
Page 7
Operating margin*
VAT inclusive
VAT Exclusive
%
%
3.8
4.1
Change
0.2
0.2
Operating margin:* 2002/03
4.0
4.3
%
Operating margin:* 2001/02
Gross margin
(0.1)
Cost savings - buying efficiencies
0.7
Cost savings - other
0.7
Investment in brand
(0.3)
Investment in infrastructure
(0.8)
Progress on all fronts – steady sales growth,
double digit profit growth and sustainable
improvements in operating margin
•Pre StY and exceptional costs
Total costs savings delivered were £210m, 1.4% of sales
Page 8
First for food quality, choice,
innovation and service
§ Continuing to lead on quality
- sub-brand sales up 20%
- 2,400 new own label lines
§ Widest food choice in UK
§ Concept store innovation pipeline
- Hazel Grove Retail Launch of the Year
- ‘passion for food’ at Bluebird
Page 9
Non food
§ Customers want quality non food at affordable prices
§ Recruited strong team
§ Focus on home and cookshop and then clothing and kids
§ In 2003/04
- on target for implementation of around 80 stores with new
equipment and look
- 220 stores will have new products in existing space this year
- Health and Beauty new range in about 80 stores this year
§ Converted Rugby depot for non food
Page 10
Sainsbury’s Bank
§ Year of outstanding growth
§ Nearly 600,000 new customer accounts
- credit cards, loans and insurance growth
- customers taking second and third product
§ Key metrics sound
- accept rates stable
- bad debts low
- profits maintained, reinvested into business for future
§ Exciting future growth opportunity in coming years
Period when customers last account was opened
120,000
20,000
1 Product
2 Products
100,000
3 Products
15,000
80,000
60,000
10,000
40,000
5,000
20,000
Month opened
JV with HBOS, 55% owned by Sainsbury’s, 45% by HBOS
Page 11
y.Feb03-Apr03
x.Nov02-Jan03
v.May02-Jul02
w.Aug02-Oct02
t.Nov01-Jan02
u.Feb02-Apr02
r.May01-Jul01
s.Aug01-Oct01
q.Feb01-Apr01
p.Nov00-Jan01
n.May00-Jul00
o.Aug00-Oct00
l.Nov99-Jan00
m.Feb00-Apr00
j.May99-Jul99
k.Aug99-Oct99
i.Feb99-Apr99
h.Nov98-Jan99
f.May98-Jul98
g.Aug98-Oct98
e.Feb98-Apr98
d.Nov97-Jan98
b.May97-Jul97
0
c.Aug97-Oct97
0
No. of customers who have taken
2nd or 3rd products
25,000
a.Feb97-Apr97
No. of customers
140,000
Shaw’s Supermarkets
Store locations
20
15
27
23
20
87
27
13
15
87
as at 29 March 2003
23
13
Major regional player – number 2 in New England operating in all six states
with more than 20% market share
Major competitors – Ahold’s Stop & Shop (29%)
- Delhaize’s Hannaford (9%)
Page 12
Operating profit
Over 5 year
- CAGR sales
Growth
10%
- CAGR operating profit 26%
9.7%
14.6%
196
$m
215
171
129
88
1998/99
1999/00
2000/01
2001/02
Growth excluding Ames
2002/03
11.7%
Sales (inc sales tax)
2002/03
$m
2001/02
$m
(2)
Change LfL growth
4,436
4,385
1.2%
(1)
215
196
9.7%
Operating margin
4.8%
4.5%
Operating profit
(1)
0.9%
0.3% pt
(1)
Before exceptional operating costs and amortisation of goodwill
(2)
Easter adjusted
Page 13
Store estate
§ Considerable progress on improving estate
- further 15% space addition in 2003/04
§ Signature store in Prudential Center (Boston) opened
§ Acquisition opportunities in and around New England
Prudential Center store is 40,000 sq ft and offers a wide range of
everyday and speciality products
Opening figures
New openings
Shaw’s
Ames
2002/03
Actual
Actual
no.
‘000 sq ft
185
6,261
2003/04
Forecast
Forecast
no. ‘000 sq ft
185
6,330
2
70
11
2
534
90
(2)
(49)
-
-
21
13
624
[4]
48
[10]
113
Remodels and upgrades
[20]
-
[6]
Star Markets rebadged
[7]
-
Closures
Net new stores opened
Extensions
Relocated stores
Closing figures
Page 14
203
6,330
[11]
191
198
7,258
Group performance
Year of major progress
§ Double digit profit growth – second year running
§ Improved operating margins and return on capital
§ Invested significantly in stores, extensions and supply chain
- driving future growth and operating efficiencies
§ Maintained strong balance sheet
§ Dividend increase of 5%
§ Growth opportunities
- Shaw’s
- Sainsbury’s Bank
- Sainsbury’s to You
- industry consolidation
See Appendix page 27 for details of gearing and ROCE
Page 15
Appendix
Group strategy
§ Sainsbury’s Supermarkets
- implement transformation programme
- to differentiate market position through ‘First for Food’ and
complementary non-food
- restore margins to industry leading levels
§ Sainsbury’s Bank
- exploit brand and in-store advantages to drive rapid growth
§ Property
- unlock value from the portfolio
§ Shaw’s
- drive further organic growth
- exploit potential expansion opportunities
Appendix Page 1
Group results
Sales
£18,495m
Sainsbury’s
Supermarkets
Sainsbury’s Bank
Shaw’s
Supermarkets
Operating Profit
£752m
Sainsbury’s
Supermarkets
JS Developments
Sainsbury’s Bank
Shaw’s
Supermarkets
2002/03
Sales
£m
%
Sainsbury’s Supermarkets 15,301
Sainsbury’s Bank
Shaw’s
JS Developments
Operating Profit*
£m
%
83
572
76
183
1
22
3
2,866
15
139
18
145
1
19
3
18,495
100
752
100
Sales
£m
Sainsbury’s Bank
Shaw’s
JS Developments
Continuing Operations
2002/03
2001/02
Inclusive
of VAT
Exclusive
of VAT
Inclusive
of VAT
Exclusive
of VAT
15,301
14,258
14,860
13,841
183
183
165
165
2,866
2,844
3,061
3,036
145
145
112
112
18,495
17,430
18,198
17,154
8
8
18,206
17,162
Discontinued Operations
Group Total
Appendix Page 2
18,495
17,430
Group performance
2002/03
£m
2001/02
£m
Change
%
18,495
18,198
1.6
Underlying pre tax profit
695
627
10.8
Profit before tax
667
571
16.8
Underlying EPS*
24.2p
21.5p
12.6
15.58p
14.84p
5.0
Sales (inc VAT)
- continuing operations
DPS
*Before exceptional items of £15m (2001/02: £42m) and
amortisation of goodwill of £13m (2001/02: £14m)
1998/99
1999/00
2000/01
2001/02
2002/03
%
increase
4.02
4.02
4.02
4.02
4.22
5%
Final
10.30*
10.30
10.30
10.82
11.36
5%
Total
14.32*
14.32
14.32
14.84
15.58
5%
Dividend cover 2.03x
1.27x
1.01x
1.28x
1.52x
79%
99%
78%
66%
Interim
Payout ratio
49%
Dividend cover is calculated by dividing the profit for the financial year by
equity dividends. The payout ratio is the inverse.
* In addition, the final dividend in 1998/99 included a one-off payment of 1p
in consideration of the 56 week accounting period
The dividend dates:
Ex dividend
28 May 2003
(2 June for ADR)
Record
30 May 2003
(4 June for ADR)
Payment
25 July 2003
(shortly after this)
Appendix Page 3
Market share by region
Scotland
3.2
Total market share
11.4%
North East
Lancashire 4.3
6.4
Yorkshire
6.9
Wales & Midlands E England
West
12.2
12.2
7.6
London
20.4
South
South West
15.1
11.2
For 52 weeks to 29 March 2003
Only 50% of the population is within an easy drive of a
Sainsbury’s store
Total Market
London
Midlands
North East
Yorkshire
Lancashire
South
Scotland
E.England
Wales+W
S.West
Total
Total Sainsbury
Spend
(£000's)
Share of
Total
Region
Spend
(£000's)
21,383,620
15,219,900
5,073,396
9,611,477
11,468,340
10,058,710
10,101,570
7,373,612
7,984,336
3,100,798
21.1
15.0
5.0
9.5
11.3
9.9
10.0
7.3
7.9
3.1
4,356,754
1,858,801
219,573
666,099
736,003
1,517,252
325,910
902,897
608,025
348,417
37.8
16.1
1.9
5.8
6.4
13.1
2.8
7.8
5.3
3.0
20.4
12.2
4.3
6.9
6.4
15.1
3.2
12.2
7.6
11.2
101,375,759
100
11,539,731
100
11.4
Source: TNS, Till Roll
Appendix Page 4
Share of SSL share
total
of total
region
market
Underlying operating profit*
£m
Growth
13.3%
671
9.3%
509
1998/99
505
462
1999/00
572
2000/01
2001/02
2002/03
* Before exceptional operating costs
2002/03
£m
(1)
Change
£m
%
2001/02
£m
572
505
67
13.3
139
137
2
1.5
Sainsbury’s Bank
22
22
-
0.0
JS Developments
19
15
4
26.7
73
10.8
(1)
752
679
(2)
(1)
Before exceptional operating costs and amortisation of goodwill
(2)
Continuing operations
2002/03
£m
Exceptional operating costs
55
10
Amortisation of goodwill
13
Appendix Page 5
performance
2002/03 2001/02 Change LfL growth
%
%
£m
£m
Sales (inc VAT)
15,301
14,860
3.0
Underlying operating profit
(1)
pre StY
601
555
8.3
Sainsbury’s to You
(29)
(50)
42.0
Underlying operating profit (1)
572
505
13.3
(1)
Before exceptional operating costs of £55m
(2)
Including petrol and Easter adjusted
LfL growth (including petrol)
5.4
%
2.3
2.2
2.3
0.2
1998/99
1999/00
Appendix Page 6
2000/01
2001/02
2002/03
2.3
(2)
Customer perception
- better at quality, choice and innovation
% Differential
80
60
40
Example : amongst customers who shop at
both SSL and M&S, 75% selected Sainsbury's
as offering outstanding choice of food, versus
49% selecting M&S.
20
M&S
Waitrose
Safeway
0
Tesco
-20
Asda
-40
Morrisons
-60
Outstanding
choice of food
Always coming up
with new ideas
Outstanding
quality food
Have low prices
§ Better choice
§ More new ideas
§ Outstanding quality food
§ At a price premium
Millward Brown Telephone Survey - Nationally Representative Sample
15.4.02 to 30.3.03
Sample Sizes:
M&S – 1383, Waitrose – 424, Safeway – 939, Tesco – 1481, Asda – 1160,
Morrisons - 480
Appendix Page 7
Quality and Innovation
Freefrom and Way to Five were launched in May 2002
Appendix Page 8
Improved product ranges
750 lines
150 lines
320 lines
180 lines
Taste the difference, our biggest selling brand, launched in November 2000,
is our premium range of foods which have all been grown or produced with
extra time and attention,
In March 2001 we launched our Blue Parrot Café range comprising 150
products developed specifically for children. The range addresses key
nutritional concerns and provides comprehensive but clear labelling to allow
parents to make an informed choice about the products they buy for their
children.
Other ranges are Italian, Oriental and Be Good to Yourself.
Appendix Page 9
Awards
International Wine Challenge
Supermarket Retailer
of the Year
Retail Industry Awards
Fresh Produce Retailer of the Year,
2nd year running
Soil Association
Organic Supermarket
of the Year
Taste the difference, our biggest selling brand, launched in November 2000,
is our premium range of foods which have all been grown or produced with
extra time and attention,
In March 2001 we launched our Blue Parrot Café range comprising 150
products developed specifically for children. The range addresses key
nutritional concerns and provides comprehensive but clear labelling to allow
parents to make an informed choice about the products they buy for their
children.
Other ranges are Italian, Oriental and Be Good to Yourself.
Appendix Page 10
The Grocer 33
– June 2002 to March 2003
Total stores visited
43
32
42
46
42
22
Cheapest full basket £35.69
£35.86
£37.09
£36.70
£37.58
£39.17
Average full basket
£36.87
£37.50
£37.78
£38.44
£40.00
£40.49
% price comparison
v Sainsbury’s
-4.1%
-2.5%
-1.7%
+4.1%
+5.3%
20
17
11
16
11
Price
Number of full baskets
22
The Grocer 33 confirms 1.7% price difference after promotions against
Tesco
Source: The Grocer 8 March 2003
Appendix Page 11
Price comparison – coffee
Range Count
Price index
(before promotions)
300
250
51 Premium
104.1
123 Standard
102.3
33 Premium
200
150
113 Standard Plus
Plus
100
50
0
92 Standard
104 Standard
102.2
3 Economy
1 Economy
100.0
Average index = 102.7
Matched lines
Average Price Paid
Sainsbury’s average retail price
£2.65
Tesco average retail price
£2.47
Index of average retails
107.3
Appendix Page 12
Customer segments – quality opportunity
Quality - £40 billion
Other
8.9m households
Family - £36 billion
Traditional - £21 billion
Other
Other
9.1m households
5.7m households
Other
%
Quality Driven
Family
Traditional
14.1
21.9
8.4
58.6
8.7
18.7
14.0
58.6
11.2
11.1
9.0
68.7
Quality
Family
Less
Affluent
Family
Organics
Time
Poor
Cash
Rich
Typical
Family
Foodies
Health
Conscious
New
Family
Traditional
Lads &
Lasses
Economy
Traditional
Appendix Page 13
Source: TNS, Till Roll
Delivering great service
§ 3 key sales drivers
- first for fresh
- non food
- service
§ Main focus is checkouts
- short queues
- more checkouts open
- ‘scan and pack’
§ 10,000 new jobs in store
§ Performance improving – 24% shorter queues in 6 weeks
Appendix Page 14
Nectar
§ A very promising start
- more than 11m customers
- excellent take up – 85% customers reconnected
- customers earning faster and redeeming more widely
§ Further steps to success
- new mailing programmes underway
- major new partners added in June
- key to driving sales to StY and Sainsbury’s Bank
- confident in future sales potential
Four companies create revolutionary loyalty programme Sainsbury's, Barclaycard, Debenhams and BP, 1,800 outlets and
Barclaycard purchases.
First Quench is to become fifth partner to join in Spring 2003, when
cardholders will be able to collect points at 2,000 specialist drinks
outlets, including Thresher Wine, Wine Rack, Bottoms Up, Haddows,
Victoria Wine and Drinkers Cabin. New partners joining in June
2003 are Vodafone, Ford and Adam’s children’s clothing.
Exchangeable for wide range of rewards, shopping at Sainsbury’s
(including Petrol and Bank), Argos, McDonalds, Virgin, BMI, Lunn
Poly, Blockbuster and Odeon for flights, holidays, restaurant meals,
family days out, cinema tickets.
Canada - yearly spend
Indexed Grocer Spend
126
142
153
Canada - retention
174
114 117
120
123 125
128 129 130
133
109
100
100
1
Indexed Sponsor
Attention Rate
2
3
4
5+
1
2
3
4
5
6
7
8
9 10 11+
number of sponsors visited in the past
12 months (Cross Sponsor Rate)
§ Yearly spend at the grocery partner increased with multi-sponsor
usage
§ Multi-sponsor behaviour is leading to improved retention of
customers
Appendix Page 15
Supply chain consolidation
§ Closure dates confirmed for Buntingford and Shire Park depots,
making total of 10 depots closed
§ Rugby conversion complete to handle new non-food ranges
§ Chile, our third international consolidation depot has opened
handling 11 suppliers’ products
- better service to stores
- lower stock holding for us
- lower freight costs
Appendix Page 16
Sainsbury’s to You
§ Continued solid progress
- losses down from
£50m to £29m
§ Growing market share
- total sales up 71%
- LfL sales within existing postcodes up 41%
§ Picking from 82 stores and 1 picking centre,
covering 72% of UK housegholds
§ Reducing costs per order
- 46% lower marketing
- 27% lower fulfilment
§ On track for breakeven in second half of 2003/04
Appendix Page 17
Store Modules
Wild Harvest
shop the world
Kosher
Italian
Appendix Page 18
Store Modules
La carte
Sushi
C Shaw & Co, Coffee
Italian
Kitchen shop
Appendix Page 19
Store Modules
Own brand - Signature
Appendix Page 20
Store information for 2002/03
Openings
First Half (14)
Bennetts Hill, Birmingham - Local
Battersea Park Rd - Local
Northfield*
Hazel Grove
Northgate, Oxford - Local
Holloway Road - Local
Glasgow, Shawlands Arcade - Local
Fenchurch Street - Local
Manchester Piccadilly Station - Local
Ashton Moss
Manchester, Whitworth St - Local
Edinburgh, Lothian Road - Local
Fulham Broadway
Knightsbridge, Brompton Rd – Local
First Half Total (including 10 Locals)
Second Half (25)
High Holborn, Mid City Place - Local
Bristol, Dingles
Covent Garden, Southampton St - Local
Warren Street
Devizes
Glasgow, Sauchiehall Street - Local
Cannon Steet - Local
Paddington Basin - Local
Wood Green*
Derby, Osmaston
Glasgow, Queens Street - Local
Liverpool, Castle Street - Local
London, Mortimer Street - Local
Glasgow, Bothwell Street - Local
London, Oxford Street - Local
Hammersmith
Herne Hill - Local
Stoke, Royal Doulton
Bournemouth, Castle Point (Hampshire Centre)*
London, 101 Waterloo Road - Local
Loughton
London, Victoria Place Shopping Centre - Local
Manchester, Deansgate - Local
Birmingham, Maypole
Bolton*
Second Half Total (including 14 Locals)
Full Year Total (39)
Average Size
* replacing a closed store
Appendix Page 21
Total sales
Date area (sq ft)
Apr-02
Apr-02
May-02
Jun-02
Jun-02
Jun-02
Jul-02
Jul-02
Aug-02
Aug-02
Sep-02
Sep-02
Oct-02
Oct-02
3,000
3,000
35,000
40,000
5,000
3,000
3,000
3,000
3,000
50,000
3,000
3,000
13,000
3,000
170,000
Oct-02
Nov-02
Nov-02
Dec-02
Dec-02
Dec-02
Jan-03
Jan-03
Jan-03
Jan-03
Feb-03
Feb-03
Feb-03
Mar-03
Mar-03
Mar-03
Mar-03
Mar-03
Mar-03
Mar-03
Mar-03
Mar-03
Mar-03
Mar-03
Mar-03
3,000
9,000
6,000
12,000
13,000
3,000
5,000
4,000
15,000
34,000
3,000
2,000
4,000
3,000
3,000
9,000
3,000
51,000
51,000
3,000
28,000
5,000
2,000
41,000
50,000
362,000
532,000
13,600
Date
Total sales
area (sq ft)
Closures
First Half (1)
Northfield*
May-02
(25,000)
First Half Total
Second Half (3)
Wood Green*
Winton, Bournemouth
Bolton*
(25,000)
Jan-03
Mar-03
Mar-03
(22,000)
(16,000)
(31,000)
Second Half Total
(69,000)
Full Year Total (4)
(94,000)
Average Size
*Replaced by new store
23,500
Extensions
First Half (7)
Second Half (22)
96,000
312,000
408,000
Refurbishments
First Half (28)
Second Half (12)
Extension & Refurbishment Total
Appendix Page 22
6,000
(2,000)
4,000
412,000
Openings
First Half (22)
Sq Ft
Locals (17)
50,000
Supermarkets and Central (5)
107,000
Forecast First Half Total
157,000
Closures
Sq Ft
First Half (2)
(104,000)
Forecast Second Half (21)
Locals (8)
Supermarkets and Centrals (13)
26,000
341,000
Forecast Second Half Total
367,000
Forecast Second Half Total (4)
Forecast Full Year Total (43)
524,000
Extensions
First Half Total (10)
114,000
Forecast Second Half Total (13)
168,000
282,000
Appendix Page 23
(78,000)
(182,000)
Group Profit and Loss Account
£m
2002/03
2001/02
17,430
17,162
Turnover excluding VAT and sales tax
Continuing operations - operating profit before
exceptional costs and amortisation of goodwill
Exceptional operating costs
Continuing operations - operating profit
Discontinued operations
752
(65)
(13)
674
-
679
(38)
(14)
627
(2)
Operating profit
Share of operating profit / (loss) in joint ventures
Loss on sale of properties
Disposal of operations – discontinued
674
3
(11)
61
625
(1)
(4)
-
Profit on ordinary activities before interest
Net interest payable and similar items
727
(60)
620
(49)
Underlying profit on ordinary activities before tax*
Exceptional items
695
(15)
(13)
627
(42)
(14)
667
(206)
571
(200)
461
(7)
371
(7)
454
(298)
364
(285)
Profit on ordinary activities before tax
Taxation
Profit on ordinary activities after tax
Equity minority interest
Profit for the financial period
Equity dividends
Retained profit for the financial period
Underlying earnings per share*
Basic earnings per share
156
24.2p
23.7p
Appendix Page 24
79
21.5p
19.1p
Group performance
Exceptional items
2002/03
£m
2001/02
£m
Operating Exceptionals
UK – Business Transformation
Reorganisation costs
Store / depot costs
Taste JV closure
8
10
47
15
-
5
55
30
10
-
Shaw’s
Ames integration costs
East Bridgewater depot closure
8
65
(1)
38
Non operating exceptionals
Homebase profit on disposal
(2)
(3)
Property losses
Net exceptional cost
(61)
-
11
4
15
42
(1)
Cash costs £41m, asset write off £24m
(2)
Gross cash proceeds – £1.1 bn total deal, total profit £125m
(3)
Cash proceeds - £130m this year
Appendix Page 25
Group performance
UK capital expenditure
1,023
1,035
£m
800
705
645
632
1998/99 1999/00 2000/01 2001/02 2002/03 2003/04f
Cumulative sales uplifts
Post tax real returns
Other
New stores
UK
Extensions
23%
13%
Extensions
Refurbishments
7%
9%
Refurbishments
Supply chain
1998/99 1999/00 2000/01 2001/02 2002/03 2003/04f
£m
£m
£m
£m
£m
£m
Other
120
107
127
191
176
New stores
322
261
291
221
321
Extensions
160*
155
202
210
242
Refurbishments
Supply chain
Total SSL
Shaw’s
-
76
29
230
93
30
46
56
171
203
632
645
705
1,023
1,035
800
62
50
149
133
155
280
2
3
7
20
856
1,159
1,197
1,100
Sainsbury’s Bank
-
694
695
* total refurbishment and extension and maintenance capital expenditure
Appendix Page 26
Group performance
Cash flow
2002/03
£m
2001/02
£m
Change
10%
Underlying EBITDA*
1,135
1,029
Operating cash flow
1,070
1,067
Net debt
1,404
1,156
Gearing
28%
24%
4.0%pt
11.5%
11.1%
0.4%pt
2002/03
£m
2001/02
£m
1,135
1,029
(41)
(25)
3
78
Investment in Bank
(27)
(15)
Operating cash flow
1,070
1,067
(566)
(515)
(1,172)
(1,073)
130
218
(538)
(303)
Sale of business and investments in JV’s 210
(3)
ROCE
Underlying EBITDA*
Exceptionals and other
Working capital
Interest, taxation and dividends
Payments for fixed assets
Sale of fixed assets
Net cash outflow before financing
and corporate activity
Net cash outflow before financing
(328)
(306)
80
9
(248)
(297)
Opening net debt
(1,156)
(859)
Closing net debt
(1,404)
(1,156)
Issue of share capital and
non cash movements
Increase in net debt
Appendix Page 27
Group sales area and
store numbers
2000/01 2001/02 2002/03 2003/04
Actual
Actual
Actual Forecast
Total Group Sales Area ('000 sq. ft)
13,746
Sainsbury's Supermarkets
6,124
Shaw’s*
14,349
6,261
15,199
6,330
15,823
7,258
Group Total
19,870
20,610
21,529
23,081
6.4%
3.7%
4.5%
7.2%
Sainsbury's Supermarkets
Shaw’s
453
185
463
185
498
185
535
198
Group Total
638
648
683
733
Increase after Closures
Total Group Store Numbers
*2000/01 included 344,000 sq. ft. in relation to 19 Grand Union stores at acquisition
2000/01 2001/02 2002/03 2003/04
Actual
Actual
Actual Forecast
Sainsbury's Supermarkets ('000 sq. ft)
New stores (including Local's)
Extensions/Refurbishments
Closures
352
426
(86)
422
467
(286)
532
412
(94)
524
282
(182)
Net increase in supermarket sales area 692
% Increase
5.3%
New supermarket openings (excl Locals) 14
New Local openings
13
Average size of new supermarkets
22,600
(sq. ft) - excl. Locals
603
4.4%
10
15
37,700
850
5.9%
15
24
30,100
624
4.1%
18
25
24,900
231
50
(144)
70
48
(49)
624
304
-
137
2.2%
5
46,100
69
1.1%
2
35,200
928
15%
13
48,000
Shaw's ('000 sq. ft)
New stores*
485
Extensions/Refurbishments/Relocations 24
Closures
(181)
Net increase in supermarket sales area 328
% Increase
5.8%
New openings*
22
Average size of new supermarkets
47,000
(sq. ft) - excl. G.U.
*2000/01 including 344,000 sq. ft. in relation to 19 Grand Union stores at
acquisition
Appendix Page 28
Pensions update
§ Proactively managed pension deficit and long term liabilities
§ Schemes well covered, over 120% on Minimum Funding Rate
(MFR) basis
§ Tri annual valuation at 29 March 2003
- estimated profit and loss impact £15m
§ FRS 17 valuation – post tax deficit of £607m (2002 - £257m)
- since year end deficit already reduced by 10%
- profit and loss account charge would have been a net
£13m higher*
* Excluding one-off reductions in FRS17 charge relating to the
disposal of Homebase
Pro actively managed liabilities
1998 § Deferred Entry to Defined Benefits Scheme until 5 year of
service
2001 § Additional voluntary contributions - £15m in 01/02 and 02/03
2002 § Closed DB scheme to new entrants
- active membership 1998: 60,000
2002: 30,000
§ Wages and salaries policy geared towards performance
related bonuses and share options – both non pensionable
2003 § Offered employees a choice – effective from 2003/04
§ Increased employee contributions (4.25% to 7%) for final
salary benefits
§ Same employee contributions (4.25%) for career average
re-valued benefits
§ Further reviews dependent on market conditions
Appendix Page 29
Broker Forecasts
Y/e 2003/04 Y/e 2004/05
House
Analyst
Updated
Recommendation
price PBT DPS
target (£m) (p)
ABN Amro (9)
James Collins
21 May 03
Hold
250p
Bernstein (10)
Mia Kirchgaessner
12 Mar 03
Market perform
-
BNP Paribas
Tim Attenborough
20 May 03
Underperform
235p
754 16.3p
843 17.3p
CDC IXIS
Jerome Samuel
26 May 03
Add
300p
771
16.3p
869 17.1p
Charles Stanley
Simon Proctor
28 Feb 03
Hold
-
740 16.5p
898 17.5p
Cheuvreux
Mike Dennis
01 Apr 03
Underperform
-
740 16.4p
825 17.5p
Citigroup Smith Barney (2)
Dave McCarthy / James Anstead
22 May 03
In-line, High Risk
225p
750 16.4p
795 17.2p
Commerzbank
Juergen Elfers
17 Jan 03
Hold
300p
Credit Lyonnais
Kien Tan
02 Apr 03
Sell
-
748 16.4p
802 17.2p
CSFB (3)
Andrew Kasoulis
22 May 03
Underperform
200p
735 16.0p
768 16.4p
Deutsche Bank (1)
Esther Bannister
21 May 03
Hold
200p
735 16.4p
785 17.2p
Dresdner Kleinwort Wasserstein (6)
Simon Dunn
28 Mar 03
Reduce
220p
725 16.0p
760 16.5p
Fortis Bank
Jurgen Veenker
03 Apr 03
Reduce
-
763 19.2p
904 22.8p
Goldman Sachs (7)
Nick Jones
22 May 03
In-Line
-
760 16.2p
843 16.6p
HSBC
David Harrington
22 May 03
Reduce
220p
740 15.7p
792 16.0p
ING (8)
John Kershaw
21 May 03
Hold
220p
750 16.4p
820 17.2p
Lehman Bros.
Christopher Gower / Nick Coulter
27 Mar 03
Undereview
-
Merrill Lynch(4)
Andrew Fowler
22 May 03
Neutral
-
747 15.9p
809 16.7p
Morgan Stanley
Ben Britz / Caroline Eason
01 Apr 03
Not Rated
-
740 17.2p
775 18.1p
Numis Securities
Mark Hughes
27 Mar 03
Reduce
225p
757 16.3p
-
-
Peel Hunt
Robert Brent
30 Jan 03
Hold
-
732 16.6p
-
-
Robert W Baird
Paul Smiddy
21 May 03
Neutral
-
740 16.0p
Seymour Pearce
Richard Ratner
31 Mar 03
Hold
-
700 16.3p
SG Securities
Nicholas Mora
22 May 03
Hold
250p
Teather & Greenwood
David Stoddart
22 May 03
Sell
-
763 16.4p
799 17.2p
UBS Warburg (5)
Jonathan Pritchard
21 May 03
Neutral 2
225p
750 16.4p
830 17.2p
West LB
Philip Dorgan
08 Apr 03
Hold
250p
717
William de Broe
Tom Gadsby
02 Oct 02
Hold
Footnote: 2003 Institutional Investor Rankings
Appendix Page 30
-
-
-
-
16.6p
16.5p
-
16.3p
850 17.2p
-
-
-
17.4p
-
-
792 17.0p
-
-
-
17.0p
15.5p
-
-
754 16.7p
-
-
TOTAL CONSENSUS
237p
744 16.4p
819
17.3p
Total minimum
200p
700 15.5p
760 16.0p
Total maximum
300p
771
904 22.8p
NB: PBT figures are pre amortisation of goodwill, exceptional costs and non-operating items i.e. £695m in 2002/03
Updated on 28 May 03
750 16.4p
PBT DPS
(£m) (p)
19.2p
-
Contacts
Lynda Ashton
Head of Investor Relations
Tel / fax: + 44 (0) 20 7695 7162
[email protected]
Michael Snape
Investor Relations Manager
Tel / fax: + 44 (0) 20 7695 6227
[email protected]
www.j-sainsbury.co.uk
J Sainsbury plc, 33 Holborn, London EC1N 2HT

Sainsbury`s Supermarkets

Transcription

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