Interim Results 2016/17

5 October 2016

Colleague interview with Dave Lewis and Alan Stewart

View transcript PDF 0.04MB

Headlines

Positive like-for-like sales and volume growth in all regions across the Group

• UK like-for-like sales growth of 0.6% and Group like-for-like sales growth of 1.0%¹
• UK volumes up 2.1%; UK transactions up 1.6%
• International volumes up 3.3%; International transactions up 0.3%

Significant progress against all three priorities

• Competitive in the UK – all key customer metrics improving relative to the market
• More secure balance sheet – net debt reduced by further £0.8bn since year-end
• Rebuilding trust – brand health returned to highest level in more than four years²

Customer, colleague and supplier partner measures all improving

• Most improved retailer in terms of customer recommendations³
• 78% of colleagues recommend us as a ‘great place to work’ (up from 70% in 1H 2014/15)
• Very strong improvement in UK supplier satisfaction measure at 78% (up from 51% in 2014/15)

Well-placed against our plans – on track to deliver £1.2bn Group operating profit before exceptional items for the full year

• Rebuilding profitability whilst investing in our customer offer
• Group operating profit before exceptional items up 60% in the first half
• Exclusive fresh food brands performing ahead of plan; investment part-offset by mix benefit

Sharing our ambition to deliver 3.5-4.0% Group operating margin by 2019/20

• Underpinned by six strategic drivers, we will strengthen our customer offer whilst creating long-term, sustainable value for shareholders
• Includes £1.5bn further operating cost reductions, to be realised through a more efficient and responsive distribution system, a simpler store operating model & goods not for resale savings
• Total capex will average £1.4bn per year to support this programme

Statutory results: statutory revenue £27.3bn, up 1.4%; statutory profit before tax £71m, down (28.3)%

1. Like-for-like is the growth in sales from stores that have been open for at least a year at a constant foreign exchange rate and includes online sales.

2. As per YouGov BrandIndex, August 2016.

3. As per the periodic Customer Spotlight Tracker.