Interim Results 17/18 - Sainsbury's/media/Files/S... · 3 Interim Results 2019/20 - November 2019. Financial overview • First period reporting on an inc. IFRS 16 basis - Material
bull First period reporting on an inc IFRS 16 basis- Material impacts on depreciation finance costs and net debt
bull UPBT pound238m (H1 201819 pound279m)- Phasing of cost savings weather higher marketing costs- Delivering on our cost ambitions
bull Financial services profits up pound4m Modest underlying decline offset by change in transfer pricing
bull pound229m charges excluded from underlying profit- Largely non-cash relating to property strategy programme
bull Strong retail free cash flow generation of pound698m
bull New longer term asset-backed pension plan agreed
bull Interim dividend of 33p +6
4 Interim Results 201920 - November 2019
Group performance overview
Underlying resultsGroup sales (inc VAT)Retail operating profitFinancial Services operating profitUnderlying interest costsUnderlying profit before taxUnderlying basic EPSDividend per share
Statutory resultsItems excluded from underlying resultsProfit for the financial period before taxBasic EPS
ChangeH1
201920H1
2018191poundm
021025
415166
3392na
16884487
16(228)
27994p31p
(172)10751p
16856437
20(219)
23879p33p
(229)9
(22)p
1 H1 201819 restated for IFRS 16
5 Interim Results 201920 - November 2019
Retail sales
1 Sales including VAT excluding fuel
Expect to open 2 new Sainsburys supermarkets and up to 15 convenience stores
Expect to open around 25 Argos stores in Sainsburyrsquos (of which 11 are relocations) resulting in around 305 Argos stores in supermarkets
Expect to close 2 supermarkets around 25 convenience stores and around 20 Argos stores in FY201920 as part of announced property closure programme of 10-15 supermarkets 30-40 convenience stores and 60-70 Argos stores
201920 FY Guidance33
(45)
(20)
(31)
06(05)
Q1 Q2
98
502615(02)(11)
Grocery GeneralMerchandise
Clothing
Q1 Q2 Q1Q2
Convenience GroceriesOnline
Supermarkets
Q1 Q2 Q1 Q2 Q1 Q2
LFL sales growth1(10)
New space1304
Total sales growth1
(06)
2 Supermarket sales include Argos stores in Sainsburyrsquos sales3 Sales from net new space
6 Interim Results 201920 - November 2019
Sales performance versus market
GROCERY Volume growth1
Argos YoY
BRC YoY (excluding Argos)FY
201819H1
201920
ARGOS Sales growth v BRC2
CLOTHING Value Growth (YOY)3
Sainsburyrsquos
Total market
22 Aug 18 22 Sep 19
1 Kantar unit growth Q1 11 March ndash 30 June 2019 Q2 1 July 2019 ndash 22 September 20192 Argos v BRC non-food non-clothing market 52 weeks to 21 September 20193 Kantar World Panel 24 we 22nd September 2019
expected to be cpound45m including a cpound10m benefit as a result of a change in transfer pricing between Argos and Argos Financial Services
Financial Services non-underlying costs are expected to be around pound30m
No further capital injections into the Bank are expected following pound35m in H1 201920
08 0814 1917
19
3029
Personal loansCredit cardsMortgagesStorecards
FY 201819
7470
HY 201920
Customer assets (poundbn)
7 Total capital risk-weighted assets
8 Interim Results 201920 - November 2019
ChangeH1
201920H1
201819poundm
Financial services
Metrics inc AFS1
3100 bps40 bps
316663
Total Financial Services UPBTCostincome ratioROCE2
306759
1 H1 201819 restated for IFRS 162 Calculated on a post-tax basis Comparative reflects the 52 weeks to 9th March 2019 as the 52 weeks to 22 September 2018 cannot be calculated on a consistent basis due to changes in accounting standards
result of items excluded from underlying results should not exceed pound100m
Property strategy programme one-off costs expected to be pound230m-pound270m (of which pound30m-pound40m cash)
Sainsburyrsquos Bank Financial Services non-
underlying costs are expected to be around pound30m
201920 FY Guidance
10 Interim Results 201920 - November 2019
Retail capital expenditure
H1201920
H1201819
Core retail capital expenditureArgos integration capexRetail capital expenditure
248 -
248
24331
274
poundm Retail capital expenditure to
be around pound550m
Retail capital expenditure is expected to be around pound550m-pound600m per annum over the medium term
201920 FY Guidance
Core retail capital expenditure
MaintenanceGrowthEfficiency
pound243m201819
pound248m201920
11 Interim Results 201920 - November 2019
Pensions
Outcome
bull 2018 triennial valuation deficit down to pound538m from pound1055m in 2015
bull Greater asset-backed security for the Scheme
bull Immediate cash payments reduced
bull Reduced risk of over funding and trapped cash
Agreed long term sustainable and flexible funding plan
Annual cash contribution reduces by cpound50m
Annual cash commitment
under old plan
201920 202021 202122 202223
124
48
98
7669
12 Interim Results 201920 - November 2019
Retail free cash flow
2 Interest paid net of interest received interest elements of obligations under finance lease payments and dividends paid on perpetual securities
3 Excludes Argos integration capital expenditure
1 Operating cash flow before changes in working capital and pension contributions
4 Other non-cash includes new leases and lease modifications and fair value movements on derivatives linked to borrowings
Adjusted operating cash flow before changes in working capital1
Decrease in working capital
Pension contribution net interest paid2 corporation tax paidNet cash generated from operating activitiesCash capital expenditure before strategic capex3
Proceeds from disposal of property plant and equipmentRepayments of lease obligations and right-of-use assets direct costsBank capital injectionsDividends and distributions received from JVs net of capital injectionsRetail free cash flowDividends paid on ordinary sharesArgos integration capital expenditure
Repayment of borrowings other non-cash and net interest movements4
Movement in net debt5
Opening net debt including perpetual securities as debtClosing net debt including perpetual securities as debt
Of whichLease LiabilitiesNet Debt excluding Lease Liabilities
poundm ndash Restated for IFRS 161029
296
(279)1046
(243)34
(231)-11
617 (156)
(31)
-
430(7575)(7145)
(5873)(1272)
H1 201819Restated
H1 201920
1034 289
(282)1041 (248)
54 (232)
(35)118
698 (174)
-
44
568(7346)(6778)
(5770)(1008)
201920 FY Guidance
5 Net debt definition now excludes derivatives not linked to borrowings and includes perpetual securities as debt
Capital injections into the Bank are expected to be pound35m
Proceeds from disposal of property are expected to be in line with 201819
Expect underlying retail depreciation and amortisation of around pound12bn including cpound500m right of use asset depreciation
Net debt before fair value movements on derivatives to reduce by at least pound300m
Net finance costs of around pound405m including pound320m lease interest in 201920 following the introduction of IFRS 16
13 Interim Results 201920 - November 2019
1 Net debt definition now excludes derivatives not linked to borrowings and includes perpetual securities as debt2 Net debt (inc perpetual securities) on a post-IFRS 16 basis divided by Group underlying EBITDAR We previously disclosed
adjusted Net debt EBITDAR but net debt on a post-IFRS 16 basis now includes lease liabilities3 FY1819 Net Debt exc Leases of pound1522m compares to the previously reported Net Debt of pound1636m less pound(122)m of finance leases plus pound8m other (predominantly derivatives no longer reported within net debt)
Balance sheet targets
bull Net debt reduction of at least pound750m over the next three years
bull Medium leverage reduction targets- Net debtEBITDAR2 less than 3x
bull Dividend policy changed to 19x underlying eps cover versus 20x
- Adjusting for the impact of IFRS 16
FY1819
Net debt exc Lease liabilities1 (poundm)
FY1516
2125
15223
FY2122
(750)
Target
c800
H1201920
FY201819
Net DebtOf which lease liabilitiesNet Debt exc leases1
(6778) (5770) (1008)
(7346) (5824) (1522)3
poundm
(603)
14 Interim Results 201920 - November 2019
Summary and Outlook
bull Grocery sales improving relative to the market
bull General Merchandise and Clothing outperforming a difficult market
Sainsburyrsquos Meat Fish amp Poultry Value Own Label1
Gains
Losses
Incremental Switching within Sainsburyrsquos
Dec 17 Oct 19
+2Sales
+4Volume
Bread Investing across Own Label Tiers120+ EPP SKUs launched in H1 200 by end 201920
Repackaged and NPD within Premium
New Owned Brand Replacing Basics
NPD within Core+ Responding in Growth Areas
Repackaged Core bySainsburyrsquos
New
New
Improved
Improved
1 Kantar 12 we 6 October 2019 ndash rolling 12 weeks switching within total Market MFP
21 Interim Results 201920 - November 2019
Be competitive
on price
1
Lower prices on key volume lines
In-Store Volume Returns Examples
Chicken Wings 1kg+12 Volume
pound170was pound210
pound050Only
White Pittas x6+15 Volume
Chestnut Mushrooms 250g+45 Volume
pound080Only
1 Pre wave 3 lockdown (started 24th March to 15th June 19) YoY 2 Last 6 weeks since wave 4 lockdown (started 28th August 19) YoY
-4
0
4
8
12
16
-6 -5 -4 -3 -2 -1 0 1 2 3 4 5 6
Change in volumes ()
Pre1 Post2
22 Interim Results 201920 - November 2019
Be competitive
on price
1
We continue to be less dependent on promotions
230 228
207 209
Sainsburyrsquos Promotional Participation
1819 1920 19201819
Morrisons
Sainsburyrsquos
Tesco
Asda
Spend on Deal1
Q1 Q2
1 Source Nielsen 4 weekly data to 21 September 2019
10
20
30
4040
30
20
10Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep
2018 2019
H1 1920
H1 1920 AVERAGE
34 31
22 21
23 Interim Results 201920 - November 2019
Be competitive
on price
1
Improved grocery value
Base Price Index 2
-1
0
1
2
3
Grocery inflation (Kantar)1
-960bps
-550bps
Commodity VI 2
Aug 17 Jan 18 Jun 18 Nov 18 Apr 19 Oct 19
2004 2007 2010 2013 2016 2019
Morrisons
Sainsburyrsquos
Tesco
Asda
Total Market
Mar Apr May Jun Jul Aug Sep Oct2019
1 Kantar City Reads to Oct 20192 Sainsburyrsquos value index based on Brandview SKU matching data to Oct 2019
24 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
25 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Category tier performance
YoY value share change by tier
12 weeks to September 2019
-03
01
-01
-18
52 weeks to March 2019
Branded
PremiumOwn Brand
Branded
StandardOwn Brand
EconomyOwn Brand
02
-08
-04
00PremiumOwn Brand
StandardOwn Brand
EconomyOwn Brand
Source Nielsen Panel Total FMCG Market Universe Total outlets 52wks data to 9 March 2019 and 12wks data to 21 Sept 2019
26 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Premium private label
Taste the Difference re-launch
bull Over 350 products new repackaged or reformulated
bull Premium ready meals growth now outperforming the market
41
25 2419
Sainsburys Morrisons Tesco Asda
Premium Own Label volume share
Source Nielsen Panel Total FMCG 28 weeks data to 21 September 2019 Premium Own Label share of sales by retailer
27 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Distinctive brands
bull 57 of customers have bought Distinctive Brands since launch
bull On track for pound100m incremental sales
bull 37 new brands in H1 across Fresh and Grocery
bull lsquoTaste of the Futurersquo bays launched in 70 stores- 67 incremental sales
Leon
bull 3 year exclusive partnership
bull 14 products launched
28 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Beauty Rollout
bull Now rolled out to over 60 stores- Sales up over 40
bull Customer numbers up 7
bull Spend per customer up 25
bull Beauty range doubled 1200 additional lines
bull Double digit growth differential against the market
29 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Our values make us different
bull Committed to reduce plastic packaging by 50 by 2025
bull First retailer to remove single use plastic produce and bakery bags from our stores
- Launching reusable bags in fruit and veg aisles
bull Investing in our loose produce offer
bull Removed black plastic trays from ready meals
bull Fresh water stands in cafeacutes for customers to refill bottles
UKrsquos first major retailer to make significant commitment to reduce plastic
30 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Argos category and range focus
bull Availability improvement- Argos master range reduced by c30 over 3 years- Eliminating duplication removing low value items- Better availability of key lines in store
bull Rebalancing into higher margin categories- Gaining share in Furniture1
More distinctive rangemore reason to shop at Sainsburyrsquos
Reduced SKU count -20operational efficiencies
Higher cash gross profit +2 YOY
Volumes +8 operational efficiencies
41 Interim Results 201920 - November 2019
Drive efficiency
to invest in the customer
offer
4
BAU savings to offset cost inflation
Manages inflationary pressures
BAU savingsH1 201920
Procurement GNFR
Retail Technology Efficiencies
Retail HRRetail
management structures
Shrink Reduction
42 Interim Results 201920 - November 2019
Drive efficiency
to invest in the customer
offer
4
Strategic cost transformation 5 year plan
Converge Tackle fixed cost
End to end reviews
Retail Operations Marketing and Commercial Operations
Other central support
Logistics and Supply Chain
Project A
Project C
Project D
Shared Services BPO
Property strategy
Project BGNFR procurement
Capital prioritisation
Technology Digital and Corporate Services
pound250-pound350m
pound150-pound250m
pound400-pound600mExecution underway In planning Opportunities identified
pound5bn addressable cost base
43 Interim Results 201920 - November 2019
Grow connected
services
5
44 Interim Results 201920 - November 2019
Grow connected
services
5
Financial Services Priorities
To be the provider of financial services for loyal Sainsburyrsquos and Argos customers
An agile capital and cost efficient provider of simple mobile-led financial services
Vision
Objective
Priorities Reshape Simplify Strengthen
45 Interim Results 201920 - November 2019
Grow connected
services
5
Current Customer Base
Customer Credit Risk Balance Sheet Earnings
Argos Storecards 22m Prime Near Prime
Credit Cards 09m Prime
Personal Loans 05m Prime
Mortgages 9K Exit
Total Lending
Deposits 03m
Insurances 05m Very Low Risk
Travel Money 266 Sites
ATMs 1890
Financial Services reshaping the portfolio
46 Interim Results 201920 - November 2019
Grow connected
services
5
Increase connectivity and value for Group
Stop mortgage acquisition review back book options
No capital input from the Group from now1
Costincome c503 within 5 years
Double UPBT double digit ROCE within 5 years
Upstream cash within 5 years2
Financial Services key targets
Transform the cost base
Improve returns
Financial services cash generative
Reduce risk profile to Group
Stop putting cash in to Financial Services
2
4
6
3
1
5
Focus on Sainsburyrsquos customer base
1 Subject to regulatory changes requirements2 Subject to regulatory approval3 On a Group contribution basis
47 Interim Results 201920 - November 2019
Grow connected
services
5
Nectar
bull Biggest loyalty programme in the UK
bull Over 18 million collectors
bull Most recognised loyalty brand in the UK
bull Launch of Nectar digital- 21 million app users- Increase in overall Nectar participation- Increased levels of personalisation- 138000 new Nectar customers- 1 app on launch weekend
bull Coalition strengthened with addition of Esso in June 2019
48 Interim Results 201920 - November 2019
Provide a seamless customer
experience
6
49 Interim Results 201920 - November 2019
Provide a seamless customer
experience
6
Digital
bull Groceries Online sales penetration of 8- App accounts for over 20 of orders
bull 21 million digital Nectar app users
bull 14 million Argos Financial Services app downloads
bull Smartshop rollout in over 350 stores
Groceries online
Chop Chop
SmartShop
Universaldiscovery
Seamlessfinancialservices
Singlebasket
50 Interim Results 201920 - November 2019
We will help our customers live well for less
Confident in the core Integrated customer offer
One multi brand multi channel business
Strong cash generation supporting investment dividend and allowing deleverage
Financial flexibility and resilience
Sustainable cost reduction covering cost inflation and funding investment in our competitive offer
QampA
APPENDIX Interim Results 201920 - November 2019
Appendices
APPENDIX Interim Results 201920 - November 2019
Guidance for 201920
1
Spacebull Expect to open 2 new Sainsburyrsquos supermarkets and up to 15 convenience storesbull Expect to open around 25 Argos stores in Sainsburyrsquos (of which 11 are
relocations) resulting in around 305 Argos stores in supermarketsbull Expect to close 2 supermarkets around 25 convenience stores and around 20
Argos stores in FY201920 as part of announced property closure programme of 10-15 supermarkets 30-40 convenience stores and 60-70 Argos stores
Financial Servicesbull Financial services underlying operating profit expected to be cpound45m including a
cpound10m benefit as a result of a change in transfer pricing between Argos and Argos Financial Services
bull Financial Services non-underlying costs are expected to be around pound30mbull No further capital injections into the Bank are expected following pound35m in H1 201920
Depreciation and amortisationbull Expect underlying retail depreciation and amortisation of around pound12bn
including cpound500m right of use asset depreciation
CostsOperating cost inflationbull Cost inflation between 2 and 3Cost savingsbull Continue to deliver cost savings to at least offset the impact of cost inflation
Finance costsbull Net finance costs of around pound405m including pound320m lease interest in
201920 following the introduction of IFRS 16
One-off itemsbull In 201920 cash outflows as a result of items excluded from
underlying results should not exceed pound100mbull Property strategy programme one-off costs expected to be
pound230m-pound270m of which cash costs are pound30-40m
Dividendbull Sainsburyrsquos plans to change the full year dividend policy to 19x cover by
underlying earnings (versus 20x previously) to offset the dilutive (non cash) impact of IFRS 16 on underlying earnings
Capital expenditurebull Retail capital expenditure to be around pound550mbull Retail capital expenditure is expected to be around pound550m-pound600m per
annum over the medium term
Net debtbull Net debt before fair value movements on derivatives to reduce by at
least pound300m
Tax ratebull Underlying tax rate to be between 25 and 26
APPENDIX Interim Results 201920 - November 2019
Retail sales
1 Sales including VAT excluding fuel
LFL sales growth1
(10)
Sales from net new space1
04
Total sales growth1
(06)
Supermarkets2
(07)
Convenience20
Groceries Online
70
Channels
(01)(25)
(12)
2 Supermarket sales include Argos SiS sales FY 1819 16
pound139bn
pound103bnGrocery
pound30bnGeneralMerchandise
pound488mClothing
2
Chart1
201819
194
66
1
Sheet1
APPENDIX Interim Results 201920 - November 2019
Sainsburyrsquos sales area and store numbersAs at 21 September 2019
Sainsburyrsquos store estateAs at 21 September 2019
Sq ftsales area
82446
870
40001 to60000
20001 to40000
10000 to20000
Under10000 Total
Over60000
0122122
0197197
0175175
06767
824607
1431
Argos storesArgos in SainsburyrsquosArgos in HomebaseOtherArgos total store numbers
Habitat1
Collection points
594281
8-
883
16317
As at21 Sept 2019
Disposalsclosures
Newstores
As at9 March 2019
17--8
-1
(7)-
(2)-
(9)
-(36)
588288
6-
88216
282
ConvenienceSupermarketsTotal stores
Number of stores
Sq ftsales area
1929350
2279
40001 to60000
20001 to40000
10000 to20000
Under10000 Total
Over60000
-18441844
-58185818
-85018501
-46604660
19292117323102
ConvenienceSupermarketsTotal stores
Space by store size (lsquo000 sq ft)
Argos and Habitat store numbers
1 5 Habitat stores 11 Habitat stores in Sainsburys
4
APPENDIX Interim Results 201920 - November 2019
ClosureBitterne West
Sainsburyrsquos investment programme201920
Q1
Supermarkets ConvenienceNew storesMilton Keynes Brooklands District CentBromley High StLeeds Wike Ridge LaneSalford Harbour CityCanterbury High St
ReplacementMayfair Stratton St
ClosuresMayfairWarren St
Q1Q1Q1Q2Q2
Q2
Q1Q2
5
APPENDIX Interim Results 201920 - November 2019
Retail margin
Retail sales (inc VAT inc fuel)(exc VAT inc fuel)
Retail underlying EBITDAR1
Retail underlying EBITDAR margin 2
at constant fuel pricesRetail underlying operating profit3
Retail underlying operating margin 4
at constant fuel prices
1656714808
10677272
4373030
1661214856
11147575
4873333
030342
30 bps28 bps10333 bps32 bps
1 Retail underlying operating profit before net rental income of pound6 million and underlying depreciation and amortisation of pound636 million2 Retail underlying EBITDAR divided by underlying retail sales excluding VAT3 Retail underlying earnings before interest tax and Sainsburyrsquos underlying share of post-tax profit from joint ventures4 Retail underlying operating profit divided by underlying retail sales excluding VAT
poundm H1201920
H1201819
Change
6
APPENDIX Interim Results 201920 - November 2019
H1201920
H1201819
Group retail
Return on capital employed 1
Net debt to EBITDAR (times)23
Fixed charge cover (times)2
Underlying tax rate Core retail capex sales5
713126
26515
743326
25715
poundm
1 ROCE Return is defined as a 52 week rolling underlying profit before interest and tax Capital employed is defined as group net assets2 Net debt of pound6778 million includes lease obligations under IFRS 16 and perpetual securities treated as debt divided by Group underlying EBITDAR of pound2171 million calculated for a 52-week period to 21 September 20193 Group underlying EBITDAR divided by rent (both capital and interest) and net finance costs where interest on perpetual securities is treated as an underlying finance costs4 52 weeks to 22nd September 2018 is not available due to the implementation of IFRS 16 Comparatives therefore reflect the 52 weeks to 9th March 20195 Includes retail sales inc vat inc fuel
4
4
7
APPENDIX Interim Results 201920 - November 2019
Plc Board
Kevin OrsquoByrneChief Financial Officer
Mike Coupe Group Chief Executive
Dame Susan Rice Senior Independent Director
Matt BrittinNon-Executive Director
Jo HarlowNon-Executive Director
Brian CassinNon-Executive Director
David KeensNon-Executive Director
Jean Tomlin Non-Executive Director
Martin Scicluna Chairman
8
APPENDIX Interim Results 201920 - November 2019
Plc Board
Mike Coupe Group Chief Executive Officer
Skills and experienceAppointed Group Chief Executive Officer on 9 July 2014 Mike has been a member of the Operating Board since October 2004 Mike has vast retail industry experience in trading strategy marketing digital and online as well as multi-site store experience He joined Sainsburyrsquos from Big Food Group where he was a board director of Big Food Group PLC and Managing Director of Iceland Food Stores He previously worked for both Asda and Tesco PLC where he served in a variety of senior management roles
Date of appointment 1 August 2007Mike has served as an Executive Director since 1 August 2007 and as Chief Executive Officer since 9 July 2014
Committee membershipCorporate Responsibility and Sustainability Committee
Kevin OrsquoByrne Chief Financial Officer
Skills and experienceKevin brings to the Board a wealth of retail and finance experience Kevin was previously Chief Executive Officer of Poundland Group Limited until December 2016 and held executive roles at Kingfisher plc from 2008 to 2015 including Divisional Director UK China and Turkey Chief Executive Officer of BampQ UK amp Ireland and Group Finance Director He was previously Group Finance Director of Dixons Retail plc and European Finance Director of Quaker Oats He was a Non-Executive Director of Land Securities Group PLC from 2008 to September 2017 where he was Chairman of the Audit Committee and Senior Independent Director
Date of appointment 9 January 2017
Other current rolesNon-Executive Director of Greene King plc
Skills and experienceMartin brings a breadth of experience and leadership in both executive and non-executive roles His previous roles include positions as the Chairman of Great Portland Estates plc Senior Independent Director and Chair of the Audit Committee of Worldpay Inc and Non-Executive Director and Chair of the Audit Committee of Lloyds Banking Group plc He was a partner at Deloitte LLP for 26 years serving as Chairman from 1995 to 2007 where his clients included Dixons WH Smith Alliance Unichem and Cadburyrsquos
Other current rolesChairman of RSA Insurance Group plc
Martin Scicluna Chairman
Date of appointment 1 November 2018 Martin joined the Board as Chairman Designate and Non-Executive Director on 1 November 2018 He was appointed as Chairman of the Board on 10 March 2019
Committee membershipChair of the Nomination Committee
Dame Susan Rice Senior Independent Director
Skills and experienceSusan has extensive experience as a Non-Executive Director as well as in retail banking financial services leadership and sustainability Her career in retail bankingis particularly relevant to our ownership ofSainsburyrsquos Bank Previously Susan was a member of the First Ministerrsquos Council of Economic Advisors Managing Director of Lloyds Banking Group Scotland and was previously Chief Executive and then Chairman of Lloyds TSB Scotland plc She has also held a range of other non-executive directorships including at the Bank of England and SSE plc
Committee membershipChair of the Remuneration Committee and a member of the Nomination Committee
Date of appointment 1 June 2013
Other current rolesChair of Scottish Water and Business Stream Chair of the Scottish Fiscal Commission Non-Executive Director of the North American Income Trust C Hoare and Co and Senior Independent Director of the North American Income Trust
9
Other current rolesNon-Executive Director and Chairman of the Audit Committee of Centrica plc
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jean Tomlin Non-Executive Director
Skills and experienceJean has extensive experience and breadth of skills in human resources and corporate responsibility Jean was formerly Director of HR Workforce and Accreditation for The London OrganisingCommittee of the Olympic and Paralympic Games where she set the strategic direction to ensure the mobilisation of the combined 200000-strong workforce including paid staff volunteers and contractors which represented the recruitment and mobilisation of the largest peacetime workforce and set the industry standard for volunteering with the highly acclaimed Games She was previously Group HR Director at Marks and Spencer Group Plc HR Director and founder member of Egg plc and Sales amp Operations Director of Prudential Direct
Date of appointment 1 January 2013
Committee membershipAudit Committee Corporate Responsibility and Sustainability Committee and Nomination Committee
David Keens Non-Executive Director
Skills and experienceDavid has extensive retail experience and knowledge of consumer facing businesses together with his core skills in finance David was formerly Group Finance Director of next plc from 1991 to 2015 and their Group Treasurer from 1986 to 1991 Previous management experience includes nine years in the UK and overseas operations of multinational food manufacturer Nabisco and prior to that seven years in the accountancy profession
Date of appointment 29 April 2015
Committee membershipChair of the Audit Committee and a member of the Nomination Committee
Other current rolesIndependent Board member of Capri Holdings Limited Non-Executive Director of Hakluyt and Chief Executive Officer of Chanzo Limited
Other current rolesNon-Executive Director Senior Independent Director and Chair of the Audit Committee of Auto Trader Group plc
Matt BrittinNon-Executive Director
Skills and experienceMatt has extensive experience of running a high profile fast moving innovative digital business Since 2015 he has been responsible for Googlersquos business and operations in Europe the Middle East and Africa and hersquos been in leadership roles at Google since 2007 Prior to that Matt spent much of his career in media and marketing with particular interests in strategy commercial development and sales performance This included commercial and digital leadership roles in UK media
Date of appointment 27 January 2011
Committee membershipNomination Committee and Remuneration Committee
Other current rolesGooglersquos President ndash Europe Middle East and Africa and Director of The Media Trust
Brian Cassin Non-Executive Director
Skills and experienceBrian brings present day experience of running a FTSE40 group and of big data and analytics ndash topics of key importance to Sainsburyrsquos Brian joined Experian plc as Chief Financial Officer in April 2012 a post he held until his appointment as Chief Executive Officer in July 2014 Prior to this Brian spent his career in investment banking at Greenhill amp Co where he was Managing Director and Partner Brian has also held various roles at Baring Brothers International and at the London Stock Exchange
Date of appointment 1 April 2016
Committee membershipAudit Committee and Nomination Committee
Other current rolesChief Executive Officer of Experian plc
10
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jo Harlow Non-Executive Director
Skills and experienceJo brings a wealth of experience in consumer-facing businesses and in the telecoms and technology industry bothin the UK and internationally Jo spent 12 years in a variety of senior management roles with Nokia and Microsoft Prior to this she spent eight years at PampG and 11 years at Reebok in senior sales and marketing positions in both Europe and the US
Date of appointment 11 September 2017
Committee membershipChair of the Corporate Responsibility and Sustainability Committee and member of the Nomination Committee and Remuneration Committee
Life PresidentLord Sainsbury of Preston Candover KG
Other current rolesNon-Executive Director of InterContinental Hotels plc Non-Executive Director of Halmaplc and Member of the Supervisory Board of Ceconomy AG
11
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief Executive
Tim FallowfieldCompany Secretary amp Corporate Services Director
Kevin OrsquoByrne Chief Financial Officer
Jim BrownChief Executive Officer of Sainsburyrsquos Bank
Paul Mills-HicksFood Commercial Director
Angie RisleyGroup HR Director
Phil JordanGroup Chief InformationOfficer
Simon RobertsRetail and Operations Director
Clo MoriartyGroup Chief Digital Officer
12
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief ExecutiveSee Appendix page 9
Kevin OrsquoByrneChief Financial OfficerSee Appendix page 9
Tim FallowfieldCompany Secretary amp Corporate Services Director
Date of appointment September 2004
Skills and experienceTim joined Sainsburyrsquos in 2001 as Company Secretary and joined the Operating Board in September 2004 In addition to his role as Company Secretary Tim is responsible for the Corporate Services Division comprising Legal Services Data Governance Safety Shareholder Services Insurance and Central Security He chairs the Group Safety Committee and the Data Governance Committee Tim joined Sainsburyrsquos from Exelplc the global logistics company now part of DHL where he was Company Secretary and General Counsel He began his career at the international law firm Clifford Chance and is a qualified solicitor Tim is Chairman of the Disability Confident Business Leaders Group which works with Government in shaping the disability employment agenda and in raising awareness of the benefits of employing disabled people
Jim BrownCEO of Sainsburyrsquos Bank
Skills and experienceJim joined Sainsburyrsquos Bank as CEO in June 2019 and is also a member of the Sainsburyrsquos Group Operating Board He has held a number of senior international Financial Services roles - most recently for RBS in the UK as CEO of Williams and Glyn and prior to that CEO of Ulster Bank in Northern Ireland and the Republic of Ireland Before moving to Ireland he was based in Hong Kong and was CEO Retail and Commercial Banking Asia and the Middle East for RBS and ABN AMRO He has also been a member of the RBS Group Management Committee ABN AMRO Executive Group ABN AMRO Global Consumer Leadership Team and the RBSBank of China Joint Steering Committee Earlier in his career he held a number of senior executive roles for Citibank in Asia and Australia and New Zealand Jim has also held various Board positions including at Ulster Bank Saudi Hollandi Bank The Royal Bank of Scotland (China) Co Ltd and RBS (Pakistan) Ltd He is also a past President of the Institute of Banking in Ireland He is currently a Certified Bank Director
Date of appointment August 2019
Paul Mills-HicksFood Commercial Director
Skills and experiencePaul joined the Operating Board in May 2014 as Food Commercial Director having spent over ten years at Sainsburyrsquos He was closely involved in the formation and execution of the lsquoMaking Sainsburyrsquos Great Againrsquo strategy Following this he held a variety of roles in commercial strategy and finance most recently as Business Unit Director for Grocery Prior to Sainsburyrsquos Paul was European Controller at Marks and Spencer Group PLC and a Director at UBS Warburg
Date of appointment May 2014
13
APPENDIX Interim Results 201920 - November 2019
Operating Board
Angie RisleyGroup HR Director
Skills and experienceAngie was appointed Group HR Director and a member of the Operating Board in January 2013 with responsibility for human resources Angie is also a Director of Sainsburyrsquos Bank plc Angie was most recently Non-Executive Director and Chairman of the Remuneration Committee of Serco plc and prior to this was Group HR Director of Lloyds Banking Group and an Executive Director of Whitbread PLC with responsibility for HR and Corporate Social Responsibility Angie is currently Non-Executive Director and Chair of the Remuneration Committee at Smith amp Nephew plc
Date of appointment January 2013
Phil JordanGroup Chief Information Officer
Skills and experiencePhil joined the Board in January 2018 and has brought a fresh globalperspective on technology to the Operating Board in addition to a wealth of experience in digital data and business transformation Prior to joining Sainsburyrsquos Phil had a long and successful track record in telecommunications Most recently he was Global Chief Information Officer at Telefonica overseeing Digital Transformation and Information Technology and prior to that was Chief Information Officer for Vodafone UKIreland Phil has worked as a Non-Executive Advisor on Technology in the Investment amp Retail Banking sector and is currently a Non-Executive Director of TalkTalk Telecom Group PLC and chairs its Cyber-Security Committee
Date of appointment January 2018
Simon RobertsRetail and Operations Director
Skills and experienceSimon joined Sainsburyrsquos and the Operating Board in July 2017 as Central Retail amp Operations Director responsible for Stores Central operation and Logistics In his previous role he was Executive Vice President of Walgreens Boots Alliance and President of Boots with responsibility for commercial and retail operations across the UK and Ireland Prior to Boots Simon was at Marks and Spencer Group PLC where he held operational and customer leadership roles across stores divisions and central operations Simon is also the Non-Executive Chairman at the Institute ofCustomer Service
Date of appointment July 2017
Clodagh MoriartyGroup Chief Digital Officer
Skills and experienceClodagh was appointed Group Chief Digital Officer in June 2018 Clodagh leads the delivery of a consistent and first-rate digital experience for customers across Sainsburyrsquos Argos and Sainsburyrsquos BankClodagh joined Sainsburyrsquos in 2010 from Bain amp Co management consultants where she had gained experience working on a broad range of projects across multiple sectors and countries Following two years as Head of Strategy at Sainsburyrsquosshe moved into Food Commercial as Category Manager for Meal Solutions and then became Head of Online Trading spanning Food General Merchandise and Clothing before being promoted to Director of Online in 2016 In this role Clodagh was instrumental in driving innovation within Groceries Online and launching new initiatives including SmartShop and Chop Chop
Date of appointment June 2018
14
APPENDIX Interim Results 201920 - November 2019
Supplementary financial details
3 Financial calendarQ3 trading statement(15 weeks to 4 January 2020)
Preliminary results(52 weeks to 7 March 2020)
8 January 2020
30 April 2020
1 Weighted average number of shares
The interim dividend datesOrdinary shares
Ex-dividend 14 November 2019Record 15 November 2019Payment 20 December 2019
Product Quality Framework helps us fund investment
PQF cereals case study
BAU savings to offset cost inflation
Strategic cost transformation 5 year plan
Slide Number 43
Financial Services Priorities
Financial Services reshaping the portfolio
Financial Services key targets
Nectar
Slide Number 48
Digital
We will help our customers live well for less
Slide Number 51
Slide Number 52
Guidance for 201920
Retail sales
Sainsburyrsquos sales area and store numbers
Sainsburyrsquos store estate
Sainsburyrsquos investment programme
Retail margin
Group retail
Plc Board
Plc Board
Plc Board
Plc Board
Operating Board
Operating Board
Operating Board
Supplementary financial details
Contacts
Column1
201819
Grocery
19
GM
7
Clothing
1
To resize chart data range drag lower right corner of range
Grocery
GM
Clothing
Kevin OrsquoByrneChief Financial Officer
3 Interim Results 201920 - November 2019
Financial overview
bull First period reporting on an inc IFRS 16 basis- Material impacts on depreciation finance costs and net debt
bull UPBT pound238m (H1 201819 pound279m)- Phasing of cost savings weather higher marketing costs- Delivering on our cost ambitions
bull Financial services profits up pound4m Modest underlying decline offset by change in transfer pricing
bull pound229m charges excluded from underlying profit- Largely non-cash relating to property strategy programme
bull Strong retail free cash flow generation of pound698m
bull New longer term asset-backed pension plan agreed
bull Interim dividend of 33p +6
4 Interim Results 201920 - November 2019
Group performance overview
Underlying resultsGroup sales (inc VAT)Retail operating profitFinancial Services operating profitUnderlying interest costsUnderlying profit before taxUnderlying basic EPSDividend per share
Statutory resultsItems excluded from underlying resultsProfit for the financial period before taxBasic EPS
ChangeH1
201920H1
2018191poundm
021025
415166
3392na
16884487
16(228)
27994p31p
(172)10751p
16856437
20(219)
23879p33p
(229)9
(22)p
1 H1 201819 restated for IFRS 16
5 Interim Results 201920 - November 2019
Retail sales
1 Sales including VAT excluding fuel
Expect to open 2 new Sainsburys supermarkets and up to 15 convenience stores
Expect to open around 25 Argos stores in Sainsburyrsquos (of which 11 are relocations) resulting in around 305 Argos stores in supermarkets
Expect to close 2 supermarkets around 25 convenience stores and around 20 Argos stores in FY201920 as part of announced property closure programme of 10-15 supermarkets 30-40 convenience stores and 60-70 Argos stores
201920 FY Guidance33
(45)
(20)
(31)
06(05)
Q1 Q2
98
502615(02)(11)
Grocery GeneralMerchandise
Clothing
Q1 Q2 Q1Q2
Convenience GroceriesOnline
Supermarkets
Q1 Q2 Q1 Q2 Q1 Q2
LFL sales growth1(10)
New space1304
Total sales growth1
(06)
2 Supermarket sales include Argos stores in Sainsburyrsquos sales3 Sales from net new space
6 Interim Results 201920 - November 2019
Sales performance versus market
GROCERY Volume growth1
Argos YoY
BRC YoY (excluding Argos)FY
201819H1
201920
ARGOS Sales growth v BRC2
CLOTHING Value Growth (YOY)3
Sainsburyrsquos
Total market
22 Aug 18 22 Sep 19
1 Kantar unit growth Q1 11 March ndash 30 June 2019 Q2 1 July 2019 ndash 22 September 20192 Argos v BRC non-food non-clothing market 52 weeks to 21 September 20193 Kantar World Panel 24 we 22nd September 2019
expected to be cpound45m including a cpound10m benefit as a result of a change in transfer pricing between Argos and Argos Financial Services
Financial Services non-underlying costs are expected to be around pound30m
No further capital injections into the Bank are expected following pound35m in H1 201920
08 0814 1917
19
3029
Personal loansCredit cardsMortgagesStorecards
FY 201819
7470
HY 201920
Customer assets (poundbn)
7 Total capital risk-weighted assets
8 Interim Results 201920 - November 2019
ChangeH1
201920H1
201819poundm
Financial services
Metrics inc AFS1
3100 bps40 bps
316663
Total Financial Services UPBTCostincome ratioROCE2
306759
1 H1 201819 restated for IFRS 162 Calculated on a post-tax basis Comparative reflects the 52 weeks to 9th March 2019 as the 52 weeks to 22 September 2018 cannot be calculated on a consistent basis due to changes in accounting standards
result of items excluded from underlying results should not exceed pound100m
Property strategy programme one-off costs expected to be pound230m-pound270m (of which pound30m-pound40m cash)
Sainsburyrsquos Bank Financial Services non-
underlying costs are expected to be around pound30m
201920 FY Guidance
10 Interim Results 201920 - November 2019
Retail capital expenditure
H1201920
H1201819
Core retail capital expenditureArgos integration capexRetail capital expenditure
248 -
248
24331
274
poundm Retail capital expenditure to
be around pound550m
Retail capital expenditure is expected to be around pound550m-pound600m per annum over the medium term
201920 FY Guidance
Core retail capital expenditure
MaintenanceGrowthEfficiency
pound243m201819
pound248m201920
11 Interim Results 201920 - November 2019
Pensions
Outcome
bull 2018 triennial valuation deficit down to pound538m from pound1055m in 2015
bull Greater asset-backed security for the Scheme
bull Immediate cash payments reduced
bull Reduced risk of over funding and trapped cash
Agreed long term sustainable and flexible funding plan
Annual cash contribution reduces by cpound50m
Annual cash commitment
under old plan
201920 202021 202122 202223
124
48
98
7669
12 Interim Results 201920 - November 2019
Retail free cash flow
2 Interest paid net of interest received interest elements of obligations under finance lease payments and dividends paid on perpetual securities
3 Excludes Argos integration capital expenditure
1 Operating cash flow before changes in working capital and pension contributions
4 Other non-cash includes new leases and lease modifications and fair value movements on derivatives linked to borrowings
Adjusted operating cash flow before changes in working capital1
Decrease in working capital
Pension contribution net interest paid2 corporation tax paidNet cash generated from operating activitiesCash capital expenditure before strategic capex3
Proceeds from disposal of property plant and equipmentRepayments of lease obligations and right-of-use assets direct costsBank capital injectionsDividends and distributions received from JVs net of capital injectionsRetail free cash flowDividends paid on ordinary sharesArgos integration capital expenditure
Repayment of borrowings other non-cash and net interest movements4
Movement in net debt5
Opening net debt including perpetual securities as debtClosing net debt including perpetual securities as debt
Of whichLease LiabilitiesNet Debt excluding Lease Liabilities
poundm ndash Restated for IFRS 161029
296
(279)1046
(243)34
(231)-11
617 (156)
(31)
-
430(7575)(7145)
(5873)(1272)
H1 201819Restated
H1 201920
1034 289
(282)1041 (248)
54 (232)
(35)118
698 (174)
-
44
568(7346)(6778)
(5770)(1008)
201920 FY Guidance
5 Net debt definition now excludes derivatives not linked to borrowings and includes perpetual securities as debt
Capital injections into the Bank are expected to be pound35m
Proceeds from disposal of property are expected to be in line with 201819
Expect underlying retail depreciation and amortisation of around pound12bn including cpound500m right of use asset depreciation
Net debt before fair value movements on derivatives to reduce by at least pound300m
Net finance costs of around pound405m including pound320m lease interest in 201920 following the introduction of IFRS 16
13 Interim Results 201920 - November 2019
1 Net debt definition now excludes derivatives not linked to borrowings and includes perpetual securities as debt2 Net debt (inc perpetual securities) on a post-IFRS 16 basis divided by Group underlying EBITDAR We previously disclosed
adjusted Net debt EBITDAR but net debt on a post-IFRS 16 basis now includes lease liabilities3 FY1819 Net Debt exc Leases of pound1522m compares to the previously reported Net Debt of pound1636m less pound(122)m of finance leases plus pound8m other (predominantly derivatives no longer reported within net debt)
Balance sheet targets
bull Net debt reduction of at least pound750m over the next three years
bull Medium leverage reduction targets- Net debtEBITDAR2 less than 3x
bull Dividend policy changed to 19x underlying eps cover versus 20x
- Adjusting for the impact of IFRS 16
FY1819
Net debt exc Lease liabilities1 (poundm)
FY1516
2125
15223
FY2122
(750)
Target
c800
H1201920
FY201819
Net DebtOf which lease liabilitiesNet Debt exc leases1
(6778) (5770) (1008)
(7346) (5824) (1522)3
poundm
(603)
14 Interim Results 201920 - November 2019
Summary and Outlook
bull Grocery sales improving relative to the market
bull General Merchandise and Clothing outperforming a difficult market
Sainsburyrsquos Meat Fish amp Poultry Value Own Label1
Gains
Losses
Incremental Switching within Sainsburyrsquos
Dec 17 Oct 19
+2Sales
+4Volume
Bread Investing across Own Label Tiers120+ EPP SKUs launched in H1 200 by end 201920
Repackaged and NPD within Premium
New Owned Brand Replacing Basics
NPD within Core+ Responding in Growth Areas
Repackaged Core bySainsburyrsquos
New
New
Improved
Improved
1 Kantar 12 we 6 October 2019 ndash rolling 12 weeks switching within total Market MFP
21 Interim Results 201920 - November 2019
Be competitive
on price
1
Lower prices on key volume lines
In-Store Volume Returns Examples
Chicken Wings 1kg+12 Volume
pound170was pound210
pound050Only
White Pittas x6+15 Volume
Chestnut Mushrooms 250g+45 Volume
pound080Only
1 Pre wave 3 lockdown (started 24th March to 15th June 19) YoY 2 Last 6 weeks since wave 4 lockdown (started 28th August 19) YoY
-4
0
4
8
12
16
-6 -5 -4 -3 -2 -1 0 1 2 3 4 5 6
Change in volumes ()
Pre1 Post2
22 Interim Results 201920 - November 2019
Be competitive
on price
1
We continue to be less dependent on promotions
230 228
207 209
Sainsburyrsquos Promotional Participation
1819 1920 19201819
Morrisons
Sainsburyrsquos
Tesco
Asda
Spend on Deal1
Q1 Q2
1 Source Nielsen 4 weekly data to 21 September 2019
10
20
30
4040
30
20
10Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep
2018 2019
H1 1920
H1 1920 AVERAGE
34 31
22 21
23 Interim Results 201920 - November 2019
Be competitive
on price
1
Improved grocery value
Base Price Index 2
-1
0
1
2
3
Grocery inflation (Kantar)1
-960bps
-550bps
Commodity VI 2
Aug 17 Jan 18 Jun 18 Nov 18 Apr 19 Oct 19
2004 2007 2010 2013 2016 2019
Morrisons
Sainsburyrsquos
Tesco
Asda
Total Market
Mar Apr May Jun Jul Aug Sep Oct2019
1 Kantar City Reads to Oct 20192 Sainsburyrsquos value index based on Brandview SKU matching data to Oct 2019
24 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
25 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Category tier performance
YoY value share change by tier
12 weeks to September 2019
-03
01
-01
-18
52 weeks to March 2019
Branded
PremiumOwn Brand
Branded
StandardOwn Brand
EconomyOwn Brand
02
-08
-04
00PremiumOwn Brand
StandardOwn Brand
EconomyOwn Brand
Source Nielsen Panel Total FMCG Market Universe Total outlets 52wks data to 9 March 2019 and 12wks data to 21 Sept 2019
26 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Premium private label
Taste the Difference re-launch
bull Over 350 products new repackaged or reformulated
bull Premium ready meals growth now outperforming the market
41
25 2419
Sainsburys Morrisons Tesco Asda
Premium Own Label volume share
Source Nielsen Panel Total FMCG 28 weeks data to 21 September 2019 Premium Own Label share of sales by retailer
27 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Distinctive brands
bull 57 of customers have bought Distinctive Brands since launch
bull On track for pound100m incremental sales
bull 37 new brands in H1 across Fresh and Grocery
bull lsquoTaste of the Futurersquo bays launched in 70 stores- 67 incremental sales
Leon
bull 3 year exclusive partnership
bull 14 products launched
28 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Beauty Rollout
bull Now rolled out to over 60 stores- Sales up over 40
bull Customer numbers up 7
bull Spend per customer up 25
bull Beauty range doubled 1200 additional lines
bull Double digit growth differential against the market
29 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Our values make us different
bull Committed to reduce plastic packaging by 50 by 2025
bull First retailer to remove single use plastic produce and bakery bags from our stores
- Launching reusable bags in fruit and veg aisles
bull Investing in our loose produce offer
bull Removed black plastic trays from ready meals
bull Fresh water stands in cafeacutes for customers to refill bottles
UKrsquos first major retailer to make significant commitment to reduce plastic
30 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Argos category and range focus
bull Availability improvement- Argos master range reduced by c30 over 3 years- Eliminating duplication removing low value items- Better availability of key lines in store
bull Rebalancing into higher margin categories- Gaining share in Furniture1
More distinctive rangemore reason to shop at Sainsburyrsquos
Reduced SKU count -20operational efficiencies
Higher cash gross profit +2 YOY
Volumes +8 operational efficiencies
41 Interim Results 201920 - November 2019
Drive efficiency
to invest in the customer
offer
4
BAU savings to offset cost inflation
Manages inflationary pressures
BAU savingsH1 201920
Procurement GNFR
Retail Technology Efficiencies
Retail HRRetail
management structures
Shrink Reduction
42 Interim Results 201920 - November 2019
Drive efficiency
to invest in the customer
offer
4
Strategic cost transformation 5 year plan
Converge Tackle fixed cost
End to end reviews
Retail Operations Marketing and Commercial Operations
Other central support
Logistics and Supply Chain
Project A
Project C
Project D
Shared Services BPO
Property strategy
Project BGNFR procurement
Capital prioritisation
Technology Digital and Corporate Services
pound250-pound350m
pound150-pound250m
pound400-pound600mExecution underway In planning Opportunities identified
pound5bn addressable cost base
43 Interim Results 201920 - November 2019
Grow connected
services
5
44 Interim Results 201920 - November 2019
Grow connected
services
5
Financial Services Priorities
To be the provider of financial services for loyal Sainsburyrsquos and Argos customers
An agile capital and cost efficient provider of simple mobile-led financial services
Vision
Objective
Priorities Reshape Simplify Strengthen
45 Interim Results 201920 - November 2019
Grow connected
services
5
Current Customer Base
Customer Credit Risk Balance Sheet Earnings
Argos Storecards 22m Prime Near Prime
Credit Cards 09m Prime
Personal Loans 05m Prime
Mortgages 9K Exit
Total Lending
Deposits 03m
Insurances 05m Very Low Risk
Travel Money 266 Sites
ATMs 1890
Financial Services reshaping the portfolio
46 Interim Results 201920 - November 2019
Grow connected
services
5
Increase connectivity and value for Group
Stop mortgage acquisition review back book options
No capital input from the Group from now1
Costincome c503 within 5 years
Double UPBT double digit ROCE within 5 years
Upstream cash within 5 years2
Financial Services key targets
Transform the cost base
Improve returns
Financial services cash generative
Reduce risk profile to Group
Stop putting cash in to Financial Services
2
4
6
3
1
5
Focus on Sainsburyrsquos customer base
1 Subject to regulatory changes requirements2 Subject to regulatory approval3 On a Group contribution basis
47 Interim Results 201920 - November 2019
Grow connected
services
5
Nectar
bull Biggest loyalty programme in the UK
bull Over 18 million collectors
bull Most recognised loyalty brand in the UK
bull Launch of Nectar digital- 21 million app users- Increase in overall Nectar participation- Increased levels of personalisation- 138000 new Nectar customers- 1 app on launch weekend
bull Coalition strengthened with addition of Esso in June 2019
48 Interim Results 201920 - November 2019
Provide a seamless customer
experience
6
49 Interim Results 201920 - November 2019
Provide a seamless customer
experience
6
Digital
bull Groceries Online sales penetration of 8- App accounts for over 20 of orders
bull 21 million digital Nectar app users
bull 14 million Argos Financial Services app downloads
bull Smartshop rollout in over 350 stores
Groceries online
Chop Chop
SmartShop
Universaldiscovery
Seamlessfinancialservices
Singlebasket
50 Interim Results 201920 - November 2019
We will help our customers live well for less
Confident in the core Integrated customer offer
One multi brand multi channel business
Strong cash generation supporting investment dividend and allowing deleverage
Financial flexibility and resilience
Sustainable cost reduction covering cost inflation and funding investment in our competitive offer
QampA
APPENDIX Interim Results 201920 - November 2019
Appendices
APPENDIX Interim Results 201920 - November 2019
Guidance for 201920
1
Spacebull Expect to open 2 new Sainsburyrsquos supermarkets and up to 15 convenience storesbull Expect to open around 25 Argos stores in Sainsburyrsquos (of which 11 are
relocations) resulting in around 305 Argos stores in supermarketsbull Expect to close 2 supermarkets around 25 convenience stores and around 20
Argos stores in FY201920 as part of announced property closure programme of 10-15 supermarkets 30-40 convenience stores and 60-70 Argos stores
Financial Servicesbull Financial services underlying operating profit expected to be cpound45m including a
cpound10m benefit as a result of a change in transfer pricing between Argos and Argos Financial Services
bull Financial Services non-underlying costs are expected to be around pound30mbull No further capital injections into the Bank are expected following pound35m in H1 201920
Depreciation and amortisationbull Expect underlying retail depreciation and amortisation of around pound12bn
including cpound500m right of use asset depreciation
CostsOperating cost inflationbull Cost inflation between 2 and 3Cost savingsbull Continue to deliver cost savings to at least offset the impact of cost inflation
Finance costsbull Net finance costs of around pound405m including pound320m lease interest in
201920 following the introduction of IFRS 16
One-off itemsbull In 201920 cash outflows as a result of items excluded from
underlying results should not exceed pound100mbull Property strategy programme one-off costs expected to be
pound230m-pound270m of which cash costs are pound30-40m
Dividendbull Sainsburyrsquos plans to change the full year dividend policy to 19x cover by
underlying earnings (versus 20x previously) to offset the dilutive (non cash) impact of IFRS 16 on underlying earnings
Capital expenditurebull Retail capital expenditure to be around pound550mbull Retail capital expenditure is expected to be around pound550m-pound600m per
annum over the medium term
Net debtbull Net debt before fair value movements on derivatives to reduce by at
least pound300m
Tax ratebull Underlying tax rate to be between 25 and 26
APPENDIX Interim Results 201920 - November 2019
Retail sales
1 Sales including VAT excluding fuel
LFL sales growth1
(10)
Sales from net new space1
04
Total sales growth1
(06)
Supermarkets2
(07)
Convenience20
Groceries Online
70
Channels
(01)(25)
(12)
2 Supermarket sales include Argos SiS sales FY 1819 16
pound139bn
pound103bnGrocery
pound30bnGeneralMerchandise
pound488mClothing
2
Chart1
201819
194
66
1
Sheet1
APPENDIX Interim Results 201920 - November 2019
Sainsburyrsquos sales area and store numbersAs at 21 September 2019
Sainsburyrsquos store estateAs at 21 September 2019
Sq ftsales area
82446
870
40001 to60000
20001 to40000
10000 to20000
Under10000 Total
Over60000
0122122
0197197
0175175
06767
824607
1431
Argos storesArgos in SainsburyrsquosArgos in HomebaseOtherArgos total store numbers
Habitat1
Collection points
594281
8-
883
16317
As at21 Sept 2019
Disposalsclosures
Newstores
As at9 March 2019
17--8
-1
(7)-
(2)-
(9)
-(36)
588288
6-
88216
282
ConvenienceSupermarketsTotal stores
Number of stores
Sq ftsales area
1929350
2279
40001 to60000
20001 to40000
10000 to20000
Under10000 Total
Over60000
-18441844
-58185818
-85018501
-46604660
19292117323102
ConvenienceSupermarketsTotal stores
Space by store size (lsquo000 sq ft)
Argos and Habitat store numbers
1 5 Habitat stores 11 Habitat stores in Sainsburys
4
APPENDIX Interim Results 201920 - November 2019
ClosureBitterne West
Sainsburyrsquos investment programme201920
Q1
Supermarkets ConvenienceNew storesMilton Keynes Brooklands District CentBromley High StLeeds Wike Ridge LaneSalford Harbour CityCanterbury High St
ReplacementMayfair Stratton St
ClosuresMayfairWarren St
Q1Q1Q1Q2Q2
Q2
Q1Q2
5
APPENDIX Interim Results 201920 - November 2019
Retail margin
Retail sales (inc VAT inc fuel)(exc VAT inc fuel)
Retail underlying EBITDAR1
Retail underlying EBITDAR margin 2
at constant fuel pricesRetail underlying operating profit3
Retail underlying operating margin 4
at constant fuel prices
1656714808
10677272
4373030
1661214856
11147575
4873333
030342
30 bps28 bps10333 bps32 bps
1 Retail underlying operating profit before net rental income of pound6 million and underlying depreciation and amortisation of pound636 million2 Retail underlying EBITDAR divided by underlying retail sales excluding VAT3 Retail underlying earnings before interest tax and Sainsburyrsquos underlying share of post-tax profit from joint ventures4 Retail underlying operating profit divided by underlying retail sales excluding VAT
poundm H1201920
H1201819
Change
6
APPENDIX Interim Results 201920 - November 2019
H1201920
H1201819
Group retail
Return on capital employed 1
Net debt to EBITDAR (times)23
Fixed charge cover (times)2
Underlying tax rate Core retail capex sales5
713126
26515
743326
25715
poundm
1 ROCE Return is defined as a 52 week rolling underlying profit before interest and tax Capital employed is defined as group net assets2 Net debt of pound6778 million includes lease obligations under IFRS 16 and perpetual securities treated as debt divided by Group underlying EBITDAR of pound2171 million calculated for a 52-week period to 21 September 20193 Group underlying EBITDAR divided by rent (both capital and interest) and net finance costs where interest on perpetual securities is treated as an underlying finance costs4 52 weeks to 22nd September 2018 is not available due to the implementation of IFRS 16 Comparatives therefore reflect the 52 weeks to 9th March 20195 Includes retail sales inc vat inc fuel
4
4
7
APPENDIX Interim Results 201920 - November 2019
Plc Board
Kevin OrsquoByrneChief Financial Officer
Mike Coupe Group Chief Executive
Dame Susan Rice Senior Independent Director
Matt BrittinNon-Executive Director
Jo HarlowNon-Executive Director
Brian CassinNon-Executive Director
David KeensNon-Executive Director
Jean Tomlin Non-Executive Director
Martin Scicluna Chairman
8
APPENDIX Interim Results 201920 - November 2019
Plc Board
Mike Coupe Group Chief Executive Officer
Skills and experienceAppointed Group Chief Executive Officer on 9 July 2014 Mike has been a member of the Operating Board since October 2004 Mike has vast retail industry experience in trading strategy marketing digital and online as well as multi-site store experience He joined Sainsburyrsquos from Big Food Group where he was a board director of Big Food Group PLC and Managing Director of Iceland Food Stores He previously worked for both Asda and Tesco PLC where he served in a variety of senior management roles
Date of appointment 1 August 2007Mike has served as an Executive Director since 1 August 2007 and as Chief Executive Officer since 9 July 2014
Committee membershipCorporate Responsibility and Sustainability Committee
Kevin OrsquoByrne Chief Financial Officer
Skills and experienceKevin brings to the Board a wealth of retail and finance experience Kevin was previously Chief Executive Officer of Poundland Group Limited until December 2016 and held executive roles at Kingfisher plc from 2008 to 2015 including Divisional Director UK China and Turkey Chief Executive Officer of BampQ UK amp Ireland and Group Finance Director He was previously Group Finance Director of Dixons Retail plc and European Finance Director of Quaker Oats He was a Non-Executive Director of Land Securities Group PLC from 2008 to September 2017 where he was Chairman of the Audit Committee and Senior Independent Director
Date of appointment 9 January 2017
Other current rolesNon-Executive Director of Greene King plc
Skills and experienceMartin brings a breadth of experience and leadership in both executive and non-executive roles His previous roles include positions as the Chairman of Great Portland Estates plc Senior Independent Director and Chair of the Audit Committee of Worldpay Inc and Non-Executive Director and Chair of the Audit Committee of Lloyds Banking Group plc He was a partner at Deloitte LLP for 26 years serving as Chairman from 1995 to 2007 where his clients included Dixons WH Smith Alliance Unichem and Cadburyrsquos
Other current rolesChairman of RSA Insurance Group plc
Martin Scicluna Chairman
Date of appointment 1 November 2018 Martin joined the Board as Chairman Designate and Non-Executive Director on 1 November 2018 He was appointed as Chairman of the Board on 10 March 2019
Committee membershipChair of the Nomination Committee
Dame Susan Rice Senior Independent Director
Skills and experienceSusan has extensive experience as a Non-Executive Director as well as in retail banking financial services leadership and sustainability Her career in retail bankingis particularly relevant to our ownership ofSainsburyrsquos Bank Previously Susan was a member of the First Ministerrsquos Council of Economic Advisors Managing Director of Lloyds Banking Group Scotland and was previously Chief Executive and then Chairman of Lloyds TSB Scotland plc She has also held a range of other non-executive directorships including at the Bank of England and SSE plc
Committee membershipChair of the Remuneration Committee and a member of the Nomination Committee
Date of appointment 1 June 2013
Other current rolesChair of Scottish Water and Business Stream Chair of the Scottish Fiscal Commission Non-Executive Director of the North American Income Trust C Hoare and Co and Senior Independent Director of the North American Income Trust
9
Other current rolesNon-Executive Director and Chairman of the Audit Committee of Centrica plc
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jean Tomlin Non-Executive Director
Skills and experienceJean has extensive experience and breadth of skills in human resources and corporate responsibility Jean was formerly Director of HR Workforce and Accreditation for The London OrganisingCommittee of the Olympic and Paralympic Games where she set the strategic direction to ensure the mobilisation of the combined 200000-strong workforce including paid staff volunteers and contractors which represented the recruitment and mobilisation of the largest peacetime workforce and set the industry standard for volunteering with the highly acclaimed Games She was previously Group HR Director at Marks and Spencer Group Plc HR Director and founder member of Egg plc and Sales amp Operations Director of Prudential Direct
Date of appointment 1 January 2013
Committee membershipAudit Committee Corporate Responsibility and Sustainability Committee and Nomination Committee
David Keens Non-Executive Director
Skills and experienceDavid has extensive retail experience and knowledge of consumer facing businesses together with his core skills in finance David was formerly Group Finance Director of next plc from 1991 to 2015 and their Group Treasurer from 1986 to 1991 Previous management experience includes nine years in the UK and overseas operations of multinational food manufacturer Nabisco and prior to that seven years in the accountancy profession
Date of appointment 29 April 2015
Committee membershipChair of the Audit Committee and a member of the Nomination Committee
Other current rolesIndependent Board member of Capri Holdings Limited Non-Executive Director of Hakluyt and Chief Executive Officer of Chanzo Limited
Other current rolesNon-Executive Director Senior Independent Director and Chair of the Audit Committee of Auto Trader Group plc
Matt BrittinNon-Executive Director
Skills and experienceMatt has extensive experience of running a high profile fast moving innovative digital business Since 2015 he has been responsible for Googlersquos business and operations in Europe the Middle East and Africa and hersquos been in leadership roles at Google since 2007 Prior to that Matt spent much of his career in media and marketing with particular interests in strategy commercial development and sales performance This included commercial and digital leadership roles in UK media
Date of appointment 27 January 2011
Committee membershipNomination Committee and Remuneration Committee
Other current rolesGooglersquos President ndash Europe Middle East and Africa and Director of The Media Trust
Brian Cassin Non-Executive Director
Skills and experienceBrian brings present day experience of running a FTSE40 group and of big data and analytics ndash topics of key importance to Sainsburyrsquos Brian joined Experian plc as Chief Financial Officer in April 2012 a post he held until his appointment as Chief Executive Officer in July 2014 Prior to this Brian spent his career in investment banking at Greenhill amp Co where he was Managing Director and Partner Brian has also held various roles at Baring Brothers International and at the London Stock Exchange
Date of appointment 1 April 2016
Committee membershipAudit Committee and Nomination Committee
Other current rolesChief Executive Officer of Experian plc
10
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jo Harlow Non-Executive Director
Skills and experienceJo brings a wealth of experience in consumer-facing businesses and in the telecoms and technology industry bothin the UK and internationally Jo spent 12 years in a variety of senior management roles with Nokia and Microsoft Prior to this she spent eight years at PampG and 11 years at Reebok in senior sales and marketing positions in both Europe and the US
Date of appointment 11 September 2017
Committee membershipChair of the Corporate Responsibility and Sustainability Committee and member of the Nomination Committee and Remuneration Committee
Life PresidentLord Sainsbury of Preston Candover KG
Other current rolesNon-Executive Director of InterContinental Hotels plc Non-Executive Director of Halmaplc and Member of the Supervisory Board of Ceconomy AG
11
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief Executive
Tim FallowfieldCompany Secretary amp Corporate Services Director
Kevin OrsquoByrne Chief Financial Officer
Jim BrownChief Executive Officer of Sainsburyrsquos Bank
Paul Mills-HicksFood Commercial Director
Angie RisleyGroup HR Director
Phil JordanGroup Chief InformationOfficer
Simon RobertsRetail and Operations Director
Clo MoriartyGroup Chief Digital Officer
12
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief ExecutiveSee Appendix page 9
Kevin OrsquoByrneChief Financial OfficerSee Appendix page 9
Tim FallowfieldCompany Secretary amp Corporate Services Director
Date of appointment September 2004
Skills and experienceTim joined Sainsburyrsquos in 2001 as Company Secretary and joined the Operating Board in September 2004 In addition to his role as Company Secretary Tim is responsible for the Corporate Services Division comprising Legal Services Data Governance Safety Shareholder Services Insurance and Central Security He chairs the Group Safety Committee and the Data Governance Committee Tim joined Sainsburyrsquos from Exelplc the global logistics company now part of DHL where he was Company Secretary and General Counsel He began his career at the international law firm Clifford Chance and is a qualified solicitor Tim is Chairman of the Disability Confident Business Leaders Group which works with Government in shaping the disability employment agenda and in raising awareness of the benefits of employing disabled people
Jim BrownCEO of Sainsburyrsquos Bank
Skills and experienceJim joined Sainsburyrsquos Bank as CEO in June 2019 and is also a member of the Sainsburyrsquos Group Operating Board He has held a number of senior international Financial Services roles - most recently for RBS in the UK as CEO of Williams and Glyn and prior to that CEO of Ulster Bank in Northern Ireland and the Republic of Ireland Before moving to Ireland he was based in Hong Kong and was CEO Retail and Commercial Banking Asia and the Middle East for RBS and ABN AMRO He has also been a member of the RBS Group Management Committee ABN AMRO Executive Group ABN AMRO Global Consumer Leadership Team and the RBSBank of China Joint Steering Committee Earlier in his career he held a number of senior executive roles for Citibank in Asia and Australia and New Zealand Jim has also held various Board positions including at Ulster Bank Saudi Hollandi Bank The Royal Bank of Scotland (China) Co Ltd and RBS (Pakistan) Ltd He is also a past President of the Institute of Banking in Ireland He is currently a Certified Bank Director
Date of appointment August 2019
Paul Mills-HicksFood Commercial Director
Skills and experiencePaul joined the Operating Board in May 2014 as Food Commercial Director having spent over ten years at Sainsburyrsquos He was closely involved in the formation and execution of the lsquoMaking Sainsburyrsquos Great Againrsquo strategy Following this he held a variety of roles in commercial strategy and finance most recently as Business Unit Director for Grocery Prior to Sainsburyrsquos Paul was European Controller at Marks and Spencer Group PLC and a Director at UBS Warburg
Date of appointment May 2014
13
APPENDIX Interim Results 201920 - November 2019
Operating Board
Angie RisleyGroup HR Director
Skills and experienceAngie was appointed Group HR Director and a member of the Operating Board in January 2013 with responsibility for human resources Angie is also a Director of Sainsburyrsquos Bank plc Angie was most recently Non-Executive Director and Chairman of the Remuneration Committee of Serco plc and prior to this was Group HR Director of Lloyds Banking Group and an Executive Director of Whitbread PLC with responsibility for HR and Corporate Social Responsibility Angie is currently Non-Executive Director and Chair of the Remuneration Committee at Smith amp Nephew plc
Date of appointment January 2013
Phil JordanGroup Chief Information Officer
Skills and experiencePhil joined the Board in January 2018 and has brought a fresh globalperspective on technology to the Operating Board in addition to a wealth of experience in digital data and business transformation Prior to joining Sainsburyrsquos Phil had a long and successful track record in telecommunications Most recently he was Global Chief Information Officer at Telefonica overseeing Digital Transformation and Information Technology and prior to that was Chief Information Officer for Vodafone UKIreland Phil has worked as a Non-Executive Advisor on Technology in the Investment amp Retail Banking sector and is currently a Non-Executive Director of TalkTalk Telecom Group PLC and chairs its Cyber-Security Committee
Date of appointment January 2018
Simon RobertsRetail and Operations Director
Skills and experienceSimon joined Sainsburyrsquos and the Operating Board in July 2017 as Central Retail amp Operations Director responsible for Stores Central operation and Logistics In his previous role he was Executive Vice President of Walgreens Boots Alliance and President of Boots with responsibility for commercial and retail operations across the UK and Ireland Prior to Boots Simon was at Marks and Spencer Group PLC where he held operational and customer leadership roles across stores divisions and central operations Simon is also the Non-Executive Chairman at the Institute ofCustomer Service
Date of appointment July 2017
Clodagh MoriartyGroup Chief Digital Officer
Skills and experienceClodagh was appointed Group Chief Digital Officer in June 2018 Clodagh leads the delivery of a consistent and first-rate digital experience for customers across Sainsburyrsquos Argos and Sainsburyrsquos BankClodagh joined Sainsburyrsquos in 2010 from Bain amp Co management consultants where she had gained experience working on a broad range of projects across multiple sectors and countries Following two years as Head of Strategy at Sainsburyrsquosshe moved into Food Commercial as Category Manager for Meal Solutions and then became Head of Online Trading spanning Food General Merchandise and Clothing before being promoted to Director of Online in 2016 In this role Clodagh was instrumental in driving innovation within Groceries Online and launching new initiatives including SmartShop and Chop Chop
Date of appointment June 2018
14
APPENDIX Interim Results 201920 - November 2019
Supplementary financial details
3 Financial calendarQ3 trading statement(15 weeks to 4 January 2020)
Preliminary results(52 weeks to 7 March 2020)
8 January 2020
30 April 2020
1 Weighted average number of shares
The interim dividend datesOrdinary shares
Ex-dividend 14 November 2019Record 15 November 2019Payment 20 December 2019
Product Quality Framework helps us fund investment
PQF cereals case study
BAU savings to offset cost inflation
Strategic cost transformation 5 year plan
Slide Number 43
Financial Services Priorities
Financial Services reshaping the portfolio
Financial Services key targets
Nectar
Slide Number 48
Digital
We will help our customers live well for less
Slide Number 51
Slide Number 52
Guidance for 201920
Retail sales
Sainsburyrsquos sales area and store numbers
Sainsburyrsquos store estate
Sainsburyrsquos investment programme
Retail margin
Group retail
Plc Board
Plc Board
Plc Board
Plc Board
Operating Board
Operating Board
Operating Board
Supplementary financial details
Contacts
Column1
201819
Grocery
19
GM
7
Clothing
1
To resize chart data range drag lower right corner of range
Grocery
GM
Clothing
3 Interim Results 201920 - November 2019
Financial overview
bull First period reporting on an inc IFRS 16 basis- Material impacts on depreciation finance costs and net debt
bull UPBT pound238m (H1 201819 pound279m)- Phasing of cost savings weather higher marketing costs- Delivering on our cost ambitions
bull Financial services profits up pound4m Modest underlying decline offset by change in transfer pricing
bull pound229m charges excluded from underlying profit- Largely non-cash relating to property strategy programme
bull Strong retail free cash flow generation of pound698m
bull New longer term asset-backed pension plan agreed
bull Interim dividend of 33p +6
4 Interim Results 201920 - November 2019
Group performance overview
Underlying resultsGroup sales (inc VAT)Retail operating profitFinancial Services operating profitUnderlying interest costsUnderlying profit before taxUnderlying basic EPSDividend per share
Statutory resultsItems excluded from underlying resultsProfit for the financial period before taxBasic EPS
ChangeH1
201920H1
2018191poundm
021025
415166
3392na
16884487
16(228)
27994p31p
(172)10751p
16856437
20(219)
23879p33p
(229)9
(22)p
1 H1 201819 restated for IFRS 16
5 Interim Results 201920 - November 2019
Retail sales
1 Sales including VAT excluding fuel
Expect to open 2 new Sainsburys supermarkets and up to 15 convenience stores
Expect to open around 25 Argos stores in Sainsburyrsquos (of which 11 are relocations) resulting in around 305 Argos stores in supermarkets
Expect to close 2 supermarkets around 25 convenience stores and around 20 Argos stores in FY201920 as part of announced property closure programme of 10-15 supermarkets 30-40 convenience stores and 60-70 Argos stores
201920 FY Guidance33
(45)
(20)
(31)
06(05)
Q1 Q2
98
502615(02)(11)
Grocery GeneralMerchandise
Clothing
Q1 Q2 Q1Q2
Convenience GroceriesOnline
Supermarkets
Q1 Q2 Q1 Q2 Q1 Q2
LFL sales growth1(10)
New space1304
Total sales growth1
(06)
2 Supermarket sales include Argos stores in Sainsburyrsquos sales3 Sales from net new space
6 Interim Results 201920 - November 2019
Sales performance versus market
GROCERY Volume growth1
Argos YoY
BRC YoY (excluding Argos)FY
201819H1
201920
ARGOS Sales growth v BRC2
CLOTHING Value Growth (YOY)3
Sainsburyrsquos
Total market
22 Aug 18 22 Sep 19
1 Kantar unit growth Q1 11 March ndash 30 June 2019 Q2 1 July 2019 ndash 22 September 20192 Argos v BRC non-food non-clothing market 52 weeks to 21 September 20193 Kantar World Panel 24 we 22nd September 2019
expected to be cpound45m including a cpound10m benefit as a result of a change in transfer pricing between Argos and Argos Financial Services
Financial Services non-underlying costs are expected to be around pound30m
No further capital injections into the Bank are expected following pound35m in H1 201920
08 0814 1917
19
3029
Personal loansCredit cardsMortgagesStorecards
FY 201819
7470
HY 201920
Customer assets (poundbn)
7 Total capital risk-weighted assets
8 Interim Results 201920 - November 2019
ChangeH1
201920H1
201819poundm
Financial services
Metrics inc AFS1
3100 bps40 bps
316663
Total Financial Services UPBTCostincome ratioROCE2
306759
1 H1 201819 restated for IFRS 162 Calculated on a post-tax basis Comparative reflects the 52 weeks to 9th March 2019 as the 52 weeks to 22 September 2018 cannot be calculated on a consistent basis due to changes in accounting standards
result of items excluded from underlying results should not exceed pound100m
Property strategy programme one-off costs expected to be pound230m-pound270m (of which pound30m-pound40m cash)
Sainsburyrsquos Bank Financial Services non-
underlying costs are expected to be around pound30m
201920 FY Guidance
10 Interim Results 201920 - November 2019
Retail capital expenditure
H1201920
H1201819
Core retail capital expenditureArgos integration capexRetail capital expenditure
248 -
248
24331
274
poundm Retail capital expenditure to
be around pound550m
Retail capital expenditure is expected to be around pound550m-pound600m per annum over the medium term
201920 FY Guidance
Core retail capital expenditure
MaintenanceGrowthEfficiency
pound243m201819
pound248m201920
11 Interim Results 201920 - November 2019
Pensions
Outcome
bull 2018 triennial valuation deficit down to pound538m from pound1055m in 2015
bull Greater asset-backed security for the Scheme
bull Immediate cash payments reduced
bull Reduced risk of over funding and trapped cash
Agreed long term sustainable and flexible funding plan
Annual cash contribution reduces by cpound50m
Annual cash commitment
under old plan
201920 202021 202122 202223
124
48
98
7669
12 Interim Results 201920 - November 2019
Retail free cash flow
2 Interest paid net of interest received interest elements of obligations under finance lease payments and dividends paid on perpetual securities
3 Excludes Argos integration capital expenditure
1 Operating cash flow before changes in working capital and pension contributions
4 Other non-cash includes new leases and lease modifications and fair value movements on derivatives linked to borrowings
Adjusted operating cash flow before changes in working capital1
Decrease in working capital
Pension contribution net interest paid2 corporation tax paidNet cash generated from operating activitiesCash capital expenditure before strategic capex3
Proceeds from disposal of property plant and equipmentRepayments of lease obligations and right-of-use assets direct costsBank capital injectionsDividends and distributions received from JVs net of capital injectionsRetail free cash flowDividends paid on ordinary sharesArgos integration capital expenditure
Repayment of borrowings other non-cash and net interest movements4
Movement in net debt5
Opening net debt including perpetual securities as debtClosing net debt including perpetual securities as debt
Of whichLease LiabilitiesNet Debt excluding Lease Liabilities
poundm ndash Restated for IFRS 161029
296
(279)1046
(243)34
(231)-11
617 (156)
(31)
-
430(7575)(7145)
(5873)(1272)
H1 201819Restated
H1 201920
1034 289
(282)1041 (248)
54 (232)
(35)118
698 (174)
-
44
568(7346)(6778)
(5770)(1008)
201920 FY Guidance
5 Net debt definition now excludes derivatives not linked to borrowings and includes perpetual securities as debt
Capital injections into the Bank are expected to be pound35m
Proceeds from disposal of property are expected to be in line with 201819
Expect underlying retail depreciation and amortisation of around pound12bn including cpound500m right of use asset depreciation
Net debt before fair value movements on derivatives to reduce by at least pound300m
Net finance costs of around pound405m including pound320m lease interest in 201920 following the introduction of IFRS 16
13 Interim Results 201920 - November 2019
1 Net debt definition now excludes derivatives not linked to borrowings and includes perpetual securities as debt2 Net debt (inc perpetual securities) on a post-IFRS 16 basis divided by Group underlying EBITDAR We previously disclosed
adjusted Net debt EBITDAR but net debt on a post-IFRS 16 basis now includes lease liabilities3 FY1819 Net Debt exc Leases of pound1522m compares to the previously reported Net Debt of pound1636m less pound(122)m of finance leases plus pound8m other (predominantly derivatives no longer reported within net debt)
Balance sheet targets
bull Net debt reduction of at least pound750m over the next three years
bull Medium leverage reduction targets- Net debtEBITDAR2 less than 3x
bull Dividend policy changed to 19x underlying eps cover versus 20x
- Adjusting for the impact of IFRS 16
FY1819
Net debt exc Lease liabilities1 (poundm)
FY1516
2125
15223
FY2122
(750)
Target
c800
H1201920
FY201819
Net DebtOf which lease liabilitiesNet Debt exc leases1
(6778) (5770) (1008)
(7346) (5824) (1522)3
poundm
(603)
14 Interim Results 201920 - November 2019
Summary and Outlook
bull Grocery sales improving relative to the market
bull General Merchandise and Clothing outperforming a difficult market
Sainsburyrsquos Meat Fish amp Poultry Value Own Label1
Gains
Losses
Incremental Switching within Sainsburyrsquos
Dec 17 Oct 19
+2Sales
+4Volume
Bread Investing across Own Label Tiers120+ EPP SKUs launched in H1 200 by end 201920
Repackaged and NPD within Premium
New Owned Brand Replacing Basics
NPD within Core+ Responding in Growth Areas
Repackaged Core bySainsburyrsquos
New
New
Improved
Improved
1 Kantar 12 we 6 October 2019 ndash rolling 12 weeks switching within total Market MFP
21 Interim Results 201920 - November 2019
Be competitive
on price
1
Lower prices on key volume lines
In-Store Volume Returns Examples
Chicken Wings 1kg+12 Volume
pound170was pound210
pound050Only
White Pittas x6+15 Volume
Chestnut Mushrooms 250g+45 Volume
pound080Only
1 Pre wave 3 lockdown (started 24th March to 15th June 19) YoY 2 Last 6 weeks since wave 4 lockdown (started 28th August 19) YoY
-4
0
4
8
12
16
-6 -5 -4 -3 -2 -1 0 1 2 3 4 5 6
Change in volumes ()
Pre1 Post2
22 Interim Results 201920 - November 2019
Be competitive
on price
1
We continue to be less dependent on promotions
230 228
207 209
Sainsburyrsquos Promotional Participation
1819 1920 19201819
Morrisons
Sainsburyrsquos
Tesco
Asda
Spend on Deal1
Q1 Q2
1 Source Nielsen 4 weekly data to 21 September 2019
10
20
30
4040
30
20
10Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep
2018 2019
H1 1920
H1 1920 AVERAGE
34 31
22 21
23 Interim Results 201920 - November 2019
Be competitive
on price
1
Improved grocery value
Base Price Index 2
-1
0
1
2
3
Grocery inflation (Kantar)1
-960bps
-550bps
Commodity VI 2
Aug 17 Jan 18 Jun 18 Nov 18 Apr 19 Oct 19
2004 2007 2010 2013 2016 2019
Morrisons
Sainsburyrsquos
Tesco
Asda
Total Market
Mar Apr May Jun Jul Aug Sep Oct2019
1 Kantar City Reads to Oct 20192 Sainsburyrsquos value index based on Brandview SKU matching data to Oct 2019
24 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
25 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Category tier performance
YoY value share change by tier
12 weeks to September 2019
-03
01
-01
-18
52 weeks to March 2019
Branded
PremiumOwn Brand
Branded
StandardOwn Brand
EconomyOwn Brand
02
-08
-04
00PremiumOwn Brand
StandardOwn Brand
EconomyOwn Brand
Source Nielsen Panel Total FMCG Market Universe Total outlets 52wks data to 9 March 2019 and 12wks data to 21 Sept 2019
26 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Premium private label
Taste the Difference re-launch
bull Over 350 products new repackaged or reformulated
bull Premium ready meals growth now outperforming the market
41
25 2419
Sainsburys Morrisons Tesco Asda
Premium Own Label volume share
Source Nielsen Panel Total FMCG 28 weeks data to 21 September 2019 Premium Own Label share of sales by retailer
27 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Distinctive brands
bull 57 of customers have bought Distinctive Brands since launch
bull On track for pound100m incremental sales
bull 37 new brands in H1 across Fresh and Grocery
bull lsquoTaste of the Futurersquo bays launched in 70 stores- 67 incremental sales
Leon
bull 3 year exclusive partnership
bull 14 products launched
28 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Beauty Rollout
bull Now rolled out to over 60 stores- Sales up over 40
bull Customer numbers up 7
bull Spend per customer up 25
bull Beauty range doubled 1200 additional lines
bull Double digit growth differential against the market
29 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Our values make us different
bull Committed to reduce plastic packaging by 50 by 2025
bull First retailer to remove single use plastic produce and bakery bags from our stores
- Launching reusable bags in fruit and veg aisles
bull Investing in our loose produce offer
bull Removed black plastic trays from ready meals
bull Fresh water stands in cafeacutes for customers to refill bottles
UKrsquos first major retailer to make significant commitment to reduce plastic
30 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Argos category and range focus
bull Availability improvement- Argos master range reduced by c30 over 3 years- Eliminating duplication removing low value items- Better availability of key lines in store
bull Rebalancing into higher margin categories- Gaining share in Furniture1
More distinctive rangemore reason to shop at Sainsburyrsquos
Reduced SKU count -20operational efficiencies
Higher cash gross profit +2 YOY
Volumes +8 operational efficiencies
41 Interim Results 201920 - November 2019
Drive efficiency
to invest in the customer
offer
4
BAU savings to offset cost inflation
Manages inflationary pressures
BAU savingsH1 201920
Procurement GNFR
Retail Technology Efficiencies
Retail HRRetail
management structures
Shrink Reduction
42 Interim Results 201920 - November 2019
Drive efficiency
to invest in the customer
offer
4
Strategic cost transformation 5 year plan
Converge Tackle fixed cost
End to end reviews
Retail Operations Marketing and Commercial Operations
Other central support
Logistics and Supply Chain
Project A
Project C
Project D
Shared Services BPO
Property strategy
Project BGNFR procurement
Capital prioritisation
Technology Digital and Corporate Services
pound250-pound350m
pound150-pound250m
pound400-pound600mExecution underway In planning Opportunities identified
pound5bn addressable cost base
43 Interim Results 201920 - November 2019
Grow connected
services
5
44 Interim Results 201920 - November 2019
Grow connected
services
5
Financial Services Priorities
To be the provider of financial services for loyal Sainsburyrsquos and Argos customers
An agile capital and cost efficient provider of simple mobile-led financial services
Vision
Objective
Priorities Reshape Simplify Strengthen
45 Interim Results 201920 - November 2019
Grow connected
services
5
Current Customer Base
Customer Credit Risk Balance Sheet Earnings
Argos Storecards 22m Prime Near Prime
Credit Cards 09m Prime
Personal Loans 05m Prime
Mortgages 9K Exit
Total Lending
Deposits 03m
Insurances 05m Very Low Risk
Travel Money 266 Sites
ATMs 1890
Financial Services reshaping the portfolio
46 Interim Results 201920 - November 2019
Grow connected
services
5
Increase connectivity and value for Group
Stop mortgage acquisition review back book options
No capital input from the Group from now1
Costincome c503 within 5 years
Double UPBT double digit ROCE within 5 years
Upstream cash within 5 years2
Financial Services key targets
Transform the cost base
Improve returns
Financial services cash generative
Reduce risk profile to Group
Stop putting cash in to Financial Services
2
4
6
3
1
5
Focus on Sainsburyrsquos customer base
1 Subject to regulatory changes requirements2 Subject to regulatory approval3 On a Group contribution basis
47 Interim Results 201920 - November 2019
Grow connected
services
5
Nectar
bull Biggest loyalty programme in the UK
bull Over 18 million collectors
bull Most recognised loyalty brand in the UK
bull Launch of Nectar digital- 21 million app users- Increase in overall Nectar participation- Increased levels of personalisation- 138000 new Nectar customers- 1 app on launch weekend
bull Coalition strengthened with addition of Esso in June 2019
48 Interim Results 201920 - November 2019
Provide a seamless customer
experience
6
49 Interim Results 201920 - November 2019
Provide a seamless customer
experience
6
Digital
bull Groceries Online sales penetration of 8- App accounts for over 20 of orders
bull 21 million digital Nectar app users
bull 14 million Argos Financial Services app downloads
bull Smartshop rollout in over 350 stores
Groceries online
Chop Chop
SmartShop
Universaldiscovery
Seamlessfinancialservices
Singlebasket
50 Interim Results 201920 - November 2019
We will help our customers live well for less
Confident in the core Integrated customer offer
One multi brand multi channel business
Strong cash generation supporting investment dividend and allowing deleverage
Financial flexibility and resilience
Sustainable cost reduction covering cost inflation and funding investment in our competitive offer
QampA
APPENDIX Interim Results 201920 - November 2019
Appendices
APPENDIX Interim Results 201920 - November 2019
Guidance for 201920
1
Spacebull Expect to open 2 new Sainsburyrsquos supermarkets and up to 15 convenience storesbull Expect to open around 25 Argos stores in Sainsburyrsquos (of which 11 are
relocations) resulting in around 305 Argos stores in supermarketsbull Expect to close 2 supermarkets around 25 convenience stores and around 20
Argos stores in FY201920 as part of announced property closure programme of 10-15 supermarkets 30-40 convenience stores and 60-70 Argos stores
Financial Servicesbull Financial services underlying operating profit expected to be cpound45m including a
cpound10m benefit as a result of a change in transfer pricing between Argos and Argos Financial Services
bull Financial Services non-underlying costs are expected to be around pound30mbull No further capital injections into the Bank are expected following pound35m in H1 201920
Depreciation and amortisationbull Expect underlying retail depreciation and amortisation of around pound12bn
including cpound500m right of use asset depreciation
CostsOperating cost inflationbull Cost inflation between 2 and 3Cost savingsbull Continue to deliver cost savings to at least offset the impact of cost inflation
Finance costsbull Net finance costs of around pound405m including pound320m lease interest in
201920 following the introduction of IFRS 16
One-off itemsbull In 201920 cash outflows as a result of items excluded from
underlying results should not exceed pound100mbull Property strategy programme one-off costs expected to be
pound230m-pound270m of which cash costs are pound30-40m
Dividendbull Sainsburyrsquos plans to change the full year dividend policy to 19x cover by
underlying earnings (versus 20x previously) to offset the dilutive (non cash) impact of IFRS 16 on underlying earnings
Capital expenditurebull Retail capital expenditure to be around pound550mbull Retail capital expenditure is expected to be around pound550m-pound600m per
annum over the medium term
Net debtbull Net debt before fair value movements on derivatives to reduce by at
least pound300m
Tax ratebull Underlying tax rate to be between 25 and 26
APPENDIX Interim Results 201920 - November 2019
Retail sales
1 Sales including VAT excluding fuel
LFL sales growth1
(10)
Sales from net new space1
04
Total sales growth1
(06)
Supermarkets2
(07)
Convenience20
Groceries Online
70
Channels
(01)(25)
(12)
2 Supermarket sales include Argos SiS sales FY 1819 16
pound139bn
pound103bnGrocery
pound30bnGeneralMerchandise
pound488mClothing
2
Chart1
201819
194
66
1
Sheet1
APPENDIX Interim Results 201920 - November 2019
Sainsburyrsquos sales area and store numbersAs at 21 September 2019
Sainsburyrsquos store estateAs at 21 September 2019
Sq ftsales area
82446
870
40001 to60000
20001 to40000
10000 to20000
Under10000 Total
Over60000
0122122
0197197
0175175
06767
824607
1431
Argos storesArgos in SainsburyrsquosArgos in HomebaseOtherArgos total store numbers
Habitat1
Collection points
594281
8-
883
16317
As at21 Sept 2019
Disposalsclosures
Newstores
As at9 March 2019
17--8
-1
(7)-
(2)-
(9)
-(36)
588288
6-
88216
282
ConvenienceSupermarketsTotal stores
Number of stores
Sq ftsales area
1929350
2279
40001 to60000
20001 to40000
10000 to20000
Under10000 Total
Over60000
-18441844
-58185818
-85018501
-46604660
19292117323102
ConvenienceSupermarketsTotal stores
Space by store size (lsquo000 sq ft)
Argos and Habitat store numbers
1 5 Habitat stores 11 Habitat stores in Sainsburys
4
APPENDIX Interim Results 201920 - November 2019
ClosureBitterne West
Sainsburyrsquos investment programme201920
Q1
Supermarkets ConvenienceNew storesMilton Keynes Brooklands District CentBromley High StLeeds Wike Ridge LaneSalford Harbour CityCanterbury High St
ReplacementMayfair Stratton St
ClosuresMayfairWarren St
Q1Q1Q1Q2Q2
Q2
Q1Q2
5
APPENDIX Interim Results 201920 - November 2019
Retail margin
Retail sales (inc VAT inc fuel)(exc VAT inc fuel)
Retail underlying EBITDAR1
Retail underlying EBITDAR margin 2
at constant fuel pricesRetail underlying operating profit3
Retail underlying operating margin 4
at constant fuel prices
1656714808
10677272
4373030
1661214856
11147575
4873333
030342
30 bps28 bps10333 bps32 bps
1 Retail underlying operating profit before net rental income of pound6 million and underlying depreciation and amortisation of pound636 million2 Retail underlying EBITDAR divided by underlying retail sales excluding VAT3 Retail underlying earnings before interest tax and Sainsburyrsquos underlying share of post-tax profit from joint ventures4 Retail underlying operating profit divided by underlying retail sales excluding VAT
poundm H1201920
H1201819
Change
6
APPENDIX Interim Results 201920 - November 2019
H1201920
H1201819
Group retail
Return on capital employed 1
Net debt to EBITDAR (times)23
Fixed charge cover (times)2
Underlying tax rate Core retail capex sales5
713126
26515
743326
25715
poundm
1 ROCE Return is defined as a 52 week rolling underlying profit before interest and tax Capital employed is defined as group net assets2 Net debt of pound6778 million includes lease obligations under IFRS 16 and perpetual securities treated as debt divided by Group underlying EBITDAR of pound2171 million calculated for a 52-week period to 21 September 20193 Group underlying EBITDAR divided by rent (both capital and interest) and net finance costs where interest on perpetual securities is treated as an underlying finance costs4 52 weeks to 22nd September 2018 is not available due to the implementation of IFRS 16 Comparatives therefore reflect the 52 weeks to 9th March 20195 Includes retail sales inc vat inc fuel
4
4
7
APPENDIX Interim Results 201920 - November 2019
Plc Board
Kevin OrsquoByrneChief Financial Officer
Mike Coupe Group Chief Executive
Dame Susan Rice Senior Independent Director
Matt BrittinNon-Executive Director
Jo HarlowNon-Executive Director
Brian CassinNon-Executive Director
David KeensNon-Executive Director
Jean Tomlin Non-Executive Director
Martin Scicluna Chairman
8
APPENDIX Interim Results 201920 - November 2019
Plc Board
Mike Coupe Group Chief Executive Officer
Skills and experienceAppointed Group Chief Executive Officer on 9 July 2014 Mike has been a member of the Operating Board since October 2004 Mike has vast retail industry experience in trading strategy marketing digital and online as well as multi-site store experience He joined Sainsburyrsquos from Big Food Group where he was a board director of Big Food Group PLC and Managing Director of Iceland Food Stores He previously worked for both Asda and Tesco PLC where he served in a variety of senior management roles
Date of appointment 1 August 2007Mike has served as an Executive Director since 1 August 2007 and as Chief Executive Officer since 9 July 2014
Committee membershipCorporate Responsibility and Sustainability Committee
Kevin OrsquoByrne Chief Financial Officer
Skills and experienceKevin brings to the Board a wealth of retail and finance experience Kevin was previously Chief Executive Officer of Poundland Group Limited until December 2016 and held executive roles at Kingfisher plc from 2008 to 2015 including Divisional Director UK China and Turkey Chief Executive Officer of BampQ UK amp Ireland and Group Finance Director He was previously Group Finance Director of Dixons Retail plc and European Finance Director of Quaker Oats He was a Non-Executive Director of Land Securities Group PLC from 2008 to September 2017 where he was Chairman of the Audit Committee and Senior Independent Director
Date of appointment 9 January 2017
Other current rolesNon-Executive Director of Greene King plc
Skills and experienceMartin brings a breadth of experience and leadership in both executive and non-executive roles His previous roles include positions as the Chairman of Great Portland Estates plc Senior Independent Director and Chair of the Audit Committee of Worldpay Inc and Non-Executive Director and Chair of the Audit Committee of Lloyds Banking Group plc He was a partner at Deloitte LLP for 26 years serving as Chairman from 1995 to 2007 where his clients included Dixons WH Smith Alliance Unichem and Cadburyrsquos
Other current rolesChairman of RSA Insurance Group plc
Martin Scicluna Chairman
Date of appointment 1 November 2018 Martin joined the Board as Chairman Designate and Non-Executive Director on 1 November 2018 He was appointed as Chairman of the Board on 10 March 2019
Committee membershipChair of the Nomination Committee
Dame Susan Rice Senior Independent Director
Skills and experienceSusan has extensive experience as a Non-Executive Director as well as in retail banking financial services leadership and sustainability Her career in retail bankingis particularly relevant to our ownership ofSainsburyrsquos Bank Previously Susan was a member of the First Ministerrsquos Council of Economic Advisors Managing Director of Lloyds Banking Group Scotland and was previously Chief Executive and then Chairman of Lloyds TSB Scotland plc She has also held a range of other non-executive directorships including at the Bank of England and SSE plc
Committee membershipChair of the Remuneration Committee and a member of the Nomination Committee
Date of appointment 1 June 2013
Other current rolesChair of Scottish Water and Business Stream Chair of the Scottish Fiscal Commission Non-Executive Director of the North American Income Trust C Hoare and Co and Senior Independent Director of the North American Income Trust
9
Other current rolesNon-Executive Director and Chairman of the Audit Committee of Centrica plc
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jean Tomlin Non-Executive Director
Skills and experienceJean has extensive experience and breadth of skills in human resources and corporate responsibility Jean was formerly Director of HR Workforce and Accreditation for The London OrganisingCommittee of the Olympic and Paralympic Games where she set the strategic direction to ensure the mobilisation of the combined 200000-strong workforce including paid staff volunteers and contractors which represented the recruitment and mobilisation of the largest peacetime workforce and set the industry standard for volunteering with the highly acclaimed Games She was previously Group HR Director at Marks and Spencer Group Plc HR Director and founder member of Egg plc and Sales amp Operations Director of Prudential Direct
Date of appointment 1 January 2013
Committee membershipAudit Committee Corporate Responsibility and Sustainability Committee and Nomination Committee
David Keens Non-Executive Director
Skills and experienceDavid has extensive retail experience and knowledge of consumer facing businesses together with his core skills in finance David was formerly Group Finance Director of next plc from 1991 to 2015 and their Group Treasurer from 1986 to 1991 Previous management experience includes nine years in the UK and overseas operations of multinational food manufacturer Nabisco and prior to that seven years in the accountancy profession
Date of appointment 29 April 2015
Committee membershipChair of the Audit Committee and a member of the Nomination Committee
Other current rolesIndependent Board member of Capri Holdings Limited Non-Executive Director of Hakluyt and Chief Executive Officer of Chanzo Limited
Other current rolesNon-Executive Director Senior Independent Director and Chair of the Audit Committee of Auto Trader Group plc
Matt BrittinNon-Executive Director
Skills and experienceMatt has extensive experience of running a high profile fast moving innovative digital business Since 2015 he has been responsible for Googlersquos business and operations in Europe the Middle East and Africa and hersquos been in leadership roles at Google since 2007 Prior to that Matt spent much of his career in media and marketing with particular interests in strategy commercial development and sales performance This included commercial and digital leadership roles in UK media
Date of appointment 27 January 2011
Committee membershipNomination Committee and Remuneration Committee
Other current rolesGooglersquos President ndash Europe Middle East and Africa and Director of The Media Trust
Brian Cassin Non-Executive Director
Skills and experienceBrian brings present day experience of running a FTSE40 group and of big data and analytics ndash topics of key importance to Sainsburyrsquos Brian joined Experian plc as Chief Financial Officer in April 2012 a post he held until his appointment as Chief Executive Officer in July 2014 Prior to this Brian spent his career in investment banking at Greenhill amp Co where he was Managing Director and Partner Brian has also held various roles at Baring Brothers International and at the London Stock Exchange
Date of appointment 1 April 2016
Committee membershipAudit Committee and Nomination Committee
Other current rolesChief Executive Officer of Experian plc
10
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jo Harlow Non-Executive Director
Skills and experienceJo brings a wealth of experience in consumer-facing businesses and in the telecoms and technology industry bothin the UK and internationally Jo spent 12 years in a variety of senior management roles with Nokia and Microsoft Prior to this she spent eight years at PampG and 11 years at Reebok in senior sales and marketing positions in both Europe and the US
Date of appointment 11 September 2017
Committee membershipChair of the Corporate Responsibility and Sustainability Committee and member of the Nomination Committee and Remuneration Committee
Life PresidentLord Sainsbury of Preston Candover KG
Other current rolesNon-Executive Director of InterContinental Hotels plc Non-Executive Director of Halmaplc and Member of the Supervisory Board of Ceconomy AG
11
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief Executive
Tim FallowfieldCompany Secretary amp Corporate Services Director
Kevin OrsquoByrne Chief Financial Officer
Jim BrownChief Executive Officer of Sainsburyrsquos Bank
Paul Mills-HicksFood Commercial Director
Angie RisleyGroup HR Director
Phil JordanGroup Chief InformationOfficer
Simon RobertsRetail and Operations Director
Clo MoriartyGroup Chief Digital Officer
12
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief ExecutiveSee Appendix page 9
Kevin OrsquoByrneChief Financial OfficerSee Appendix page 9
Tim FallowfieldCompany Secretary amp Corporate Services Director
Date of appointment September 2004
Skills and experienceTim joined Sainsburyrsquos in 2001 as Company Secretary and joined the Operating Board in September 2004 In addition to his role as Company Secretary Tim is responsible for the Corporate Services Division comprising Legal Services Data Governance Safety Shareholder Services Insurance and Central Security He chairs the Group Safety Committee and the Data Governance Committee Tim joined Sainsburyrsquos from Exelplc the global logistics company now part of DHL where he was Company Secretary and General Counsel He began his career at the international law firm Clifford Chance and is a qualified solicitor Tim is Chairman of the Disability Confident Business Leaders Group which works with Government in shaping the disability employment agenda and in raising awareness of the benefits of employing disabled people
Jim BrownCEO of Sainsburyrsquos Bank
Skills and experienceJim joined Sainsburyrsquos Bank as CEO in June 2019 and is also a member of the Sainsburyrsquos Group Operating Board He has held a number of senior international Financial Services roles - most recently for RBS in the UK as CEO of Williams and Glyn and prior to that CEO of Ulster Bank in Northern Ireland and the Republic of Ireland Before moving to Ireland he was based in Hong Kong and was CEO Retail and Commercial Banking Asia and the Middle East for RBS and ABN AMRO He has also been a member of the RBS Group Management Committee ABN AMRO Executive Group ABN AMRO Global Consumer Leadership Team and the RBSBank of China Joint Steering Committee Earlier in his career he held a number of senior executive roles for Citibank in Asia and Australia and New Zealand Jim has also held various Board positions including at Ulster Bank Saudi Hollandi Bank The Royal Bank of Scotland (China) Co Ltd and RBS (Pakistan) Ltd He is also a past President of the Institute of Banking in Ireland He is currently a Certified Bank Director
Date of appointment August 2019
Paul Mills-HicksFood Commercial Director
Skills and experiencePaul joined the Operating Board in May 2014 as Food Commercial Director having spent over ten years at Sainsburyrsquos He was closely involved in the formation and execution of the lsquoMaking Sainsburyrsquos Great Againrsquo strategy Following this he held a variety of roles in commercial strategy and finance most recently as Business Unit Director for Grocery Prior to Sainsburyrsquos Paul was European Controller at Marks and Spencer Group PLC and a Director at UBS Warburg
Date of appointment May 2014
13
APPENDIX Interim Results 201920 - November 2019
Operating Board
Angie RisleyGroup HR Director
Skills and experienceAngie was appointed Group HR Director and a member of the Operating Board in January 2013 with responsibility for human resources Angie is also a Director of Sainsburyrsquos Bank plc Angie was most recently Non-Executive Director and Chairman of the Remuneration Committee of Serco plc and prior to this was Group HR Director of Lloyds Banking Group and an Executive Director of Whitbread PLC with responsibility for HR and Corporate Social Responsibility Angie is currently Non-Executive Director and Chair of the Remuneration Committee at Smith amp Nephew plc
Date of appointment January 2013
Phil JordanGroup Chief Information Officer
Skills and experiencePhil joined the Board in January 2018 and has brought a fresh globalperspective on technology to the Operating Board in addition to a wealth of experience in digital data and business transformation Prior to joining Sainsburyrsquos Phil had a long and successful track record in telecommunications Most recently he was Global Chief Information Officer at Telefonica overseeing Digital Transformation and Information Technology and prior to that was Chief Information Officer for Vodafone UKIreland Phil has worked as a Non-Executive Advisor on Technology in the Investment amp Retail Banking sector and is currently a Non-Executive Director of TalkTalk Telecom Group PLC and chairs its Cyber-Security Committee
Date of appointment January 2018
Simon RobertsRetail and Operations Director
Skills and experienceSimon joined Sainsburyrsquos and the Operating Board in July 2017 as Central Retail amp Operations Director responsible for Stores Central operation and Logistics In his previous role he was Executive Vice President of Walgreens Boots Alliance and President of Boots with responsibility for commercial and retail operations across the UK and Ireland Prior to Boots Simon was at Marks and Spencer Group PLC where he held operational and customer leadership roles across stores divisions and central operations Simon is also the Non-Executive Chairman at the Institute ofCustomer Service
Date of appointment July 2017
Clodagh MoriartyGroup Chief Digital Officer
Skills and experienceClodagh was appointed Group Chief Digital Officer in June 2018 Clodagh leads the delivery of a consistent and first-rate digital experience for customers across Sainsburyrsquos Argos and Sainsburyrsquos BankClodagh joined Sainsburyrsquos in 2010 from Bain amp Co management consultants where she had gained experience working on a broad range of projects across multiple sectors and countries Following two years as Head of Strategy at Sainsburyrsquosshe moved into Food Commercial as Category Manager for Meal Solutions and then became Head of Online Trading spanning Food General Merchandise and Clothing before being promoted to Director of Online in 2016 In this role Clodagh was instrumental in driving innovation within Groceries Online and launching new initiatives including SmartShop and Chop Chop
Date of appointment June 2018
14
APPENDIX Interim Results 201920 - November 2019
Supplementary financial details
3 Financial calendarQ3 trading statement(15 weeks to 4 January 2020)
Preliminary results(52 weeks to 7 March 2020)
8 January 2020
30 April 2020
1 Weighted average number of shares
The interim dividend datesOrdinary shares
Ex-dividend 14 November 2019Record 15 November 2019Payment 20 December 2019
Product Quality Framework helps us fund investment
PQF cereals case study
BAU savings to offset cost inflation
Strategic cost transformation 5 year plan
Slide Number 43
Financial Services Priorities
Financial Services reshaping the portfolio
Financial Services key targets
Nectar
Slide Number 48
Digital
We will help our customers live well for less
Slide Number 51
Slide Number 52
Guidance for 201920
Retail sales
Sainsburyrsquos sales area and store numbers
Sainsburyrsquos store estate
Sainsburyrsquos investment programme
Retail margin
Group retail
Plc Board
Plc Board
Plc Board
Plc Board
Operating Board
Operating Board
Operating Board
Supplementary financial details
Contacts
Column1
201819
Grocery
19
GM
7
Clothing
1
To resize chart data range drag lower right corner of range
Grocery
GM
Clothing
4 Interim Results 201920 - November 2019
Group performance overview
Underlying resultsGroup sales (inc VAT)Retail operating profitFinancial Services operating profitUnderlying interest costsUnderlying profit before taxUnderlying basic EPSDividend per share
Statutory resultsItems excluded from underlying resultsProfit for the financial period before taxBasic EPS
ChangeH1
201920H1
2018191poundm
021025
415166
3392na
16884487
16(228)
27994p31p
(172)10751p
16856437
20(219)
23879p33p
(229)9
(22)p
1 H1 201819 restated for IFRS 16
5 Interim Results 201920 - November 2019
Retail sales
1 Sales including VAT excluding fuel
Expect to open 2 new Sainsburys supermarkets and up to 15 convenience stores
Expect to open around 25 Argos stores in Sainsburyrsquos (of which 11 are relocations) resulting in around 305 Argos stores in supermarkets
Expect to close 2 supermarkets around 25 convenience stores and around 20 Argos stores in FY201920 as part of announced property closure programme of 10-15 supermarkets 30-40 convenience stores and 60-70 Argos stores
201920 FY Guidance33
(45)
(20)
(31)
06(05)
Q1 Q2
98
502615(02)(11)
Grocery GeneralMerchandise
Clothing
Q1 Q2 Q1Q2
Convenience GroceriesOnline
Supermarkets
Q1 Q2 Q1 Q2 Q1 Q2
LFL sales growth1(10)
New space1304
Total sales growth1
(06)
2 Supermarket sales include Argos stores in Sainsburyrsquos sales3 Sales from net new space
6 Interim Results 201920 - November 2019
Sales performance versus market
GROCERY Volume growth1
Argos YoY
BRC YoY (excluding Argos)FY
201819H1
201920
ARGOS Sales growth v BRC2
CLOTHING Value Growth (YOY)3
Sainsburyrsquos
Total market
22 Aug 18 22 Sep 19
1 Kantar unit growth Q1 11 March ndash 30 June 2019 Q2 1 July 2019 ndash 22 September 20192 Argos v BRC non-food non-clothing market 52 weeks to 21 September 20193 Kantar World Panel 24 we 22nd September 2019
expected to be cpound45m including a cpound10m benefit as a result of a change in transfer pricing between Argos and Argos Financial Services
Financial Services non-underlying costs are expected to be around pound30m
No further capital injections into the Bank are expected following pound35m in H1 201920
08 0814 1917
19
3029
Personal loansCredit cardsMortgagesStorecards
FY 201819
7470
HY 201920
Customer assets (poundbn)
7 Total capital risk-weighted assets
8 Interim Results 201920 - November 2019
ChangeH1
201920H1
201819poundm
Financial services
Metrics inc AFS1
3100 bps40 bps
316663
Total Financial Services UPBTCostincome ratioROCE2
306759
1 H1 201819 restated for IFRS 162 Calculated on a post-tax basis Comparative reflects the 52 weeks to 9th March 2019 as the 52 weeks to 22 September 2018 cannot be calculated on a consistent basis due to changes in accounting standards
result of items excluded from underlying results should not exceed pound100m
Property strategy programme one-off costs expected to be pound230m-pound270m (of which pound30m-pound40m cash)
Sainsburyrsquos Bank Financial Services non-
underlying costs are expected to be around pound30m
201920 FY Guidance
10 Interim Results 201920 - November 2019
Retail capital expenditure
H1201920
H1201819
Core retail capital expenditureArgos integration capexRetail capital expenditure
248 -
248
24331
274
poundm Retail capital expenditure to
be around pound550m
Retail capital expenditure is expected to be around pound550m-pound600m per annum over the medium term
201920 FY Guidance
Core retail capital expenditure
MaintenanceGrowthEfficiency
pound243m201819
pound248m201920
11 Interim Results 201920 - November 2019
Pensions
Outcome
bull 2018 triennial valuation deficit down to pound538m from pound1055m in 2015
bull Greater asset-backed security for the Scheme
bull Immediate cash payments reduced
bull Reduced risk of over funding and trapped cash
Agreed long term sustainable and flexible funding plan
Annual cash contribution reduces by cpound50m
Annual cash commitment
under old plan
201920 202021 202122 202223
124
48
98
7669
12 Interim Results 201920 - November 2019
Retail free cash flow
2 Interest paid net of interest received interest elements of obligations under finance lease payments and dividends paid on perpetual securities
3 Excludes Argos integration capital expenditure
1 Operating cash flow before changes in working capital and pension contributions
4 Other non-cash includes new leases and lease modifications and fair value movements on derivatives linked to borrowings
Adjusted operating cash flow before changes in working capital1
Decrease in working capital
Pension contribution net interest paid2 corporation tax paidNet cash generated from operating activitiesCash capital expenditure before strategic capex3
Proceeds from disposal of property plant and equipmentRepayments of lease obligations and right-of-use assets direct costsBank capital injectionsDividends and distributions received from JVs net of capital injectionsRetail free cash flowDividends paid on ordinary sharesArgos integration capital expenditure
Repayment of borrowings other non-cash and net interest movements4
Movement in net debt5
Opening net debt including perpetual securities as debtClosing net debt including perpetual securities as debt
Of whichLease LiabilitiesNet Debt excluding Lease Liabilities
poundm ndash Restated for IFRS 161029
296
(279)1046
(243)34
(231)-11
617 (156)
(31)
-
430(7575)(7145)
(5873)(1272)
H1 201819Restated
H1 201920
1034 289
(282)1041 (248)
54 (232)
(35)118
698 (174)
-
44
568(7346)(6778)
(5770)(1008)
201920 FY Guidance
5 Net debt definition now excludes derivatives not linked to borrowings and includes perpetual securities as debt
Capital injections into the Bank are expected to be pound35m
Proceeds from disposal of property are expected to be in line with 201819
Expect underlying retail depreciation and amortisation of around pound12bn including cpound500m right of use asset depreciation
Net debt before fair value movements on derivatives to reduce by at least pound300m
Net finance costs of around pound405m including pound320m lease interest in 201920 following the introduction of IFRS 16
13 Interim Results 201920 - November 2019
1 Net debt definition now excludes derivatives not linked to borrowings and includes perpetual securities as debt2 Net debt (inc perpetual securities) on a post-IFRS 16 basis divided by Group underlying EBITDAR We previously disclosed
adjusted Net debt EBITDAR but net debt on a post-IFRS 16 basis now includes lease liabilities3 FY1819 Net Debt exc Leases of pound1522m compares to the previously reported Net Debt of pound1636m less pound(122)m of finance leases plus pound8m other (predominantly derivatives no longer reported within net debt)
Balance sheet targets
bull Net debt reduction of at least pound750m over the next three years
bull Medium leverage reduction targets- Net debtEBITDAR2 less than 3x
bull Dividend policy changed to 19x underlying eps cover versus 20x
- Adjusting for the impact of IFRS 16
FY1819
Net debt exc Lease liabilities1 (poundm)
FY1516
2125
15223
FY2122
(750)
Target
c800
H1201920
FY201819
Net DebtOf which lease liabilitiesNet Debt exc leases1
(6778) (5770) (1008)
(7346) (5824) (1522)3
poundm
(603)
14 Interim Results 201920 - November 2019
Summary and Outlook
bull Grocery sales improving relative to the market
bull General Merchandise and Clothing outperforming a difficult market
Sainsburyrsquos Meat Fish amp Poultry Value Own Label1
Gains
Losses
Incremental Switching within Sainsburyrsquos
Dec 17 Oct 19
+2Sales
+4Volume
Bread Investing across Own Label Tiers120+ EPP SKUs launched in H1 200 by end 201920
Repackaged and NPD within Premium
New Owned Brand Replacing Basics
NPD within Core+ Responding in Growth Areas
Repackaged Core bySainsburyrsquos
New
New
Improved
Improved
1 Kantar 12 we 6 October 2019 ndash rolling 12 weeks switching within total Market MFP
21 Interim Results 201920 - November 2019
Be competitive
on price
1
Lower prices on key volume lines
In-Store Volume Returns Examples
Chicken Wings 1kg+12 Volume
pound170was pound210
pound050Only
White Pittas x6+15 Volume
Chestnut Mushrooms 250g+45 Volume
pound080Only
1 Pre wave 3 lockdown (started 24th March to 15th June 19) YoY 2 Last 6 weeks since wave 4 lockdown (started 28th August 19) YoY
-4
0
4
8
12
16
-6 -5 -4 -3 -2 -1 0 1 2 3 4 5 6
Change in volumes ()
Pre1 Post2
22 Interim Results 201920 - November 2019
Be competitive
on price
1
We continue to be less dependent on promotions
230 228
207 209
Sainsburyrsquos Promotional Participation
1819 1920 19201819
Morrisons
Sainsburyrsquos
Tesco
Asda
Spend on Deal1
Q1 Q2
1 Source Nielsen 4 weekly data to 21 September 2019
10
20
30
4040
30
20
10Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep
2018 2019
H1 1920
H1 1920 AVERAGE
34 31
22 21
23 Interim Results 201920 - November 2019
Be competitive
on price
1
Improved grocery value
Base Price Index 2
-1
0
1
2
3
Grocery inflation (Kantar)1
-960bps
-550bps
Commodity VI 2
Aug 17 Jan 18 Jun 18 Nov 18 Apr 19 Oct 19
2004 2007 2010 2013 2016 2019
Morrisons
Sainsburyrsquos
Tesco
Asda
Total Market
Mar Apr May Jun Jul Aug Sep Oct2019
1 Kantar City Reads to Oct 20192 Sainsburyrsquos value index based on Brandview SKU matching data to Oct 2019
24 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
25 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Category tier performance
YoY value share change by tier
12 weeks to September 2019
-03
01
-01
-18
52 weeks to March 2019
Branded
PremiumOwn Brand
Branded
StandardOwn Brand
EconomyOwn Brand
02
-08
-04
00PremiumOwn Brand
StandardOwn Brand
EconomyOwn Brand
Source Nielsen Panel Total FMCG Market Universe Total outlets 52wks data to 9 March 2019 and 12wks data to 21 Sept 2019
26 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Premium private label
Taste the Difference re-launch
bull Over 350 products new repackaged or reformulated
bull Premium ready meals growth now outperforming the market
41
25 2419
Sainsburys Morrisons Tesco Asda
Premium Own Label volume share
Source Nielsen Panel Total FMCG 28 weeks data to 21 September 2019 Premium Own Label share of sales by retailer
27 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Distinctive brands
bull 57 of customers have bought Distinctive Brands since launch
bull On track for pound100m incremental sales
bull 37 new brands in H1 across Fresh and Grocery
bull lsquoTaste of the Futurersquo bays launched in 70 stores- 67 incremental sales
Leon
bull 3 year exclusive partnership
bull 14 products launched
28 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Beauty Rollout
bull Now rolled out to over 60 stores- Sales up over 40
bull Customer numbers up 7
bull Spend per customer up 25
bull Beauty range doubled 1200 additional lines
bull Double digit growth differential against the market
29 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Our values make us different
bull Committed to reduce plastic packaging by 50 by 2025
bull First retailer to remove single use plastic produce and bakery bags from our stores
- Launching reusable bags in fruit and veg aisles
bull Investing in our loose produce offer
bull Removed black plastic trays from ready meals
bull Fresh water stands in cafeacutes for customers to refill bottles
UKrsquos first major retailer to make significant commitment to reduce plastic
30 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Argos category and range focus
bull Availability improvement- Argos master range reduced by c30 over 3 years- Eliminating duplication removing low value items- Better availability of key lines in store
bull Rebalancing into higher margin categories- Gaining share in Furniture1
More distinctive rangemore reason to shop at Sainsburyrsquos
Reduced SKU count -20operational efficiencies
Higher cash gross profit +2 YOY
Volumes +8 operational efficiencies
41 Interim Results 201920 - November 2019
Drive efficiency
to invest in the customer
offer
4
BAU savings to offset cost inflation
Manages inflationary pressures
BAU savingsH1 201920
Procurement GNFR
Retail Technology Efficiencies
Retail HRRetail
management structures
Shrink Reduction
42 Interim Results 201920 - November 2019
Drive efficiency
to invest in the customer
offer
4
Strategic cost transformation 5 year plan
Converge Tackle fixed cost
End to end reviews
Retail Operations Marketing and Commercial Operations
Other central support
Logistics and Supply Chain
Project A
Project C
Project D
Shared Services BPO
Property strategy
Project BGNFR procurement
Capital prioritisation
Technology Digital and Corporate Services
pound250-pound350m
pound150-pound250m
pound400-pound600mExecution underway In planning Opportunities identified
pound5bn addressable cost base
43 Interim Results 201920 - November 2019
Grow connected
services
5
44 Interim Results 201920 - November 2019
Grow connected
services
5
Financial Services Priorities
To be the provider of financial services for loyal Sainsburyrsquos and Argos customers
An agile capital and cost efficient provider of simple mobile-led financial services
Vision
Objective
Priorities Reshape Simplify Strengthen
45 Interim Results 201920 - November 2019
Grow connected
services
5
Current Customer Base
Customer Credit Risk Balance Sheet Earnings
Argos Storecards 22m Prime Near Prime
Credit Cards 09m Prime
Personal Loans 05m Prime
Mortgages 9K Exit
Total Lending
Deposits 03m
Insurances 05m Very Low Risk
Travel Money 266 Sites
ATMs 1890
Financial Services reshaping the portfolio
46 Interim Results 201920 - November 2019
Grow connected
services
5
Increase connectivity and value for Group
Stop mortgage acquisition review back book options
No capital input from the Group from now1
Costincome c503 within 5 years
Double UPBT double digit ROCE within 5 years
Upstream cash within 5 years2
Financial Services key targets
Transform the cost base
Improve returns
Financial services cash generative
Reduce risk profile to Group
Stop putting cash in to Financial Services
2
4
6
3
1
5
Focus on Sainsburyrsquos customer base
1 Subject to regulatory changes requirements2 Subject to regulatory approval3 On a Group contribution basis
47 Interim Results 201920 - November 2019
Grow connected
services
5
Nectar
bull Biggest loyalty programme in the UK
bull Over 18 million collectors
bull Most recognised loyalty brand in the UK
bull Launch of Nectar digital- 21 million app users- Increase in overall Nectar participation- Increased levels of personalisation- 138000 new Nectar customers- 1 app on launch weekend
bull Coalition strengthened with addition of Esso in June 2019
48 Interim Results 201920 - November 2019
Provide a seamless customer
experience
6
49 Interim Results 201920 - November 2019
Provide a seamless customer
experience
6
Digital
bull Groceries Online sales penetration of 8- App accounts for over 20 of orders
bull 21 million digital Nectar app users
bull 14 million Argos Financial Services app downloads
bull Smartshop rollout in over 350 stores
Groceries online
Chop Chop
SmartShop
Universaldiscovery
Seamlessfinancialservices
Singlebasket
50 Interim Results 201920 - November 2019
We will help our customers live well for less
Confident in the core Integrated customer offer
One multi brand multi channel business
Strong cash generation supporting investment dividend and allowing deleverage
Financial flexibility and resilience
Sustainable cost reduction covering cost inflation and funding investment in our competitive offer
QampA
APPENDIX Interim Results 201920 - November 2019
Appendices
APPENDIX Interim Results 201920 - November 2019
Guidance for 201920
1
Spacebull Expect to open 2 new Sainsburyrsquos supermarkets and up to 15 convenience storesbull Expect to open around 25 Argos stores in Sainsburyrsquos (of which 11 are
relocations) resulting in around 305 Argos stores in supermarketsbull Expect to close 2 supermarkets around 25 convenience stores and around 20
Argos stores in FY201920 as part of announced property closure programme of 10-15 supermarkets 30-40 convenience stores and 60-70 Argos stores
Financial Servicesbull Financial services underlying operating profit expected to be cpound45m including a
cpound10m benefit as a result of a change in transfer pricing between Argos and Argos Financial Services
bull Financial Services non-underlying costs are expected to be around pound30mbull No further capital injections into the Bank are expected following pound35m in H1 201920
Depreciation and amortisationbull Expect underlying retail depreciation and amortisation of around pound12bn
including cpound500m right of use asset depreciation
CostsOperating cost inflationbull Cost inflation between 2 and 3Cost savingsbull Continue to deliver cost savings to at least offset the impact of cost inflation
Finance costsbull Net finance costs of around pound405m including pound320m lease interest in
201920 following the introduction of IFRS 16
One-off itemsbull In 201920 cash outflows as a result of items excluded from
underlying results should not exceed pound100mbull Property strategy programme one-off costs expected to be
pound230m-pound270m of which cash costs are pound30-40m
Dividendbull Sainsburyrsquos plans to change the full year dividend policy to 19x cover by
underlying earnings (versus 20x previously) to offset the dilutive (non cash) impact of IFRS 16 on underlying earnings
Capital expenditurebull Retail capital expenditure to be around pound550mbull Retail capital expenditure is expected to be around pound550m-pound600m per
annum over the medium term
Net debtbull Net debt before fair value movements on derivatives to reduce by at
least pound300m
Tax ratebull Underlying tax rate to be between 25 and 26
APPENDIX Interim Results 201920 - November 2019
Retail sales
1 Sales including VAT excluding fuel
LFL sales growth1
(10)
Sales from net new space1
04
Total sales growth1
(06)
Supermarkets2
(07)
Convenience20
Groceries Online
70
Channels
(01)(25)
(12)
2 Supermarket sales include Argos SiS sales FY 1819 16
pound139bn
pound103bnGrocery
pound30bnGeneralMerchandise
pound488mClothing
2
Chart1
201819
194
66
1
Sheet1
APPENDIX Interim Results 201920 - November 2019
Sainsburyrsquos sales area and store numbersAs at 21 September 2019
Sainsburyrsquos store estateAs at 21 September 2019
Sq ftsales area
82446
870
40001 to60000
20001 to40000
10000 to20000
Under10000 Total
Over60000
0122122
0197197
0175175
06767
824607
1431
Argos storesArgos in SainsburyrsquosArgos in HomebaseOtherArgos total store numbers
Habitat1
Collection points
594281
8-
883
16317
As at21 Sept 2019
Disposalsclosures
Newstores
As at9 March 2019
17--8
-1
(7)-
(2)-
(9)
-(36)
588288
6-
88216
282
ConvenienceSupermarketsTotal stores
Number of stores
Sq ftsales area
1929350
2279
40001 to60000
20001 to40000
10000 to20000
Under10000 Total
Over60000
-18441844
-58185818
-85018501
-46604660
19292117323102
ConvenienceSupermarketsTotal stores
Space by store size (lsquo000 sq ft)
Argos and Habitat store numbers
1 5 Habitat stores 11 Habitat stores in Sainsburys
4
APPENDIX Interim Results 201920 - November 2019
ClosureBitterne West
Sainsburyrsquos investment programme201920
Q1
Supermarkets ConvenienceNew storesMilton Keynes Brooklands District CentBromley High StLeeds Wike Ridge LaneSalford Harbour CityCanterbury High St
ReplacementMayfair Stratton St
ClosuresMayfairWarren St
Q1Q1Q1Q2Q2
Q2
Q1Q2
5
APPENDIX Interim Results 201920 - November 2019
Retail margin
Retail sales (inc VAT inc fuel)(exc VAT inc fuel)
Retail underlying EBITDAR1
Retail underlying EBITDAR margin 2
at constant fuel pricesRetail underlying operating profit3
Retail underlying operating margin 4
at constant fuel prices
1656714808
10677272
4373030
1661214856
11147575
4873333
030342
30 bps28 bps10333 bps32 bps
1 Retail underlying operating profit before net rental income of pound6 million and underlying depreciation and amortisation of pound636 million2 Retail underlying EBITDAR divided by underlying retail sales excluding VAT3 Retail underlying earnings before interest tax and Sainsburyrsquos underlying share of post-tax profit from joint ventures4 Retail underlying operating profit divided by underlying retail sales excluding VAT
poundm H1201920
H1201819
Change
6
APPENDIX Interim Results 201920 - November 2019
H1201920
H1201819
Group retail
Return on capital employed 1
Net debt to EBITDAR (times)23
Fixed charge cover (times)2
Underlying tax rate Core retail capex sales5
713126
26515
743326
25715
poundm
1 ROCE Return is defined as a 52 week rolling underlying profit before interest and tax Capital employed is defined as group net assets2 Net debt of pound6778 million includes lease obligations under IFRS 16 and perpetual securities treated as debt divided by Group underlying EBITDAR of pound2171 million calculated for a 52-week period to 21 September 20193 Group underlying EBITDAR divided by rent (both capital and interest) and net finance costs where interest on perpetual securities is treated as an underlying finance costs4 52 weeks to 22nd September 2018 is not available due to the implementation of IFRS 16 Comparatives therefore reflect the 52 weeks to 9th March 20195 Includes retail sales inc vat inc fuel
4
4
7
APPENDIX Interim Results 201920 - November 2019
Plc Board
Kevin OrsquoByrneChief Financial Officer
Mike Coupe Group Chief Executive
Dame Susan Rice Senior Independent Director
Matt BrittinNon-Executive Director
Jo HarlowNon-Executive Director
Brian CassinNon-Executive Director
David KeensNon-Executive Director
Jean Tomlin Non-Executive Director
Martin Scicluna Chairman
8
APPENDIX Interim Results 201920 - November 2019
Plc Board
Mike Coupe Group Chief Executive Officer
Skills and experienceAppointed Group Chief Executive Officer on 9 July 2014 Mike has been a member of the Operating Board since October 2004 Mike has vast retail industry experience in trading strategy marketing digital and online as well as multi-site store experience He joined Sainsburyrsquos from Big Food Group where he was a board director of Big Food Group PLC and Managing Director of Iceland Food Stores He previously worked for both Asda and Tesco PLC where he served in a variety of senior management roles
Date of appointment 1 August 2007Mike has served as an Executive Director since 1 August 2007 and as Chief Executive Officer since 9 July 2014
Committee membershipCorporate Responsibility and Sustainability Committee
Kevin OrsquoByrne Chief Financial Officer
Skills and experienceKevin brings to the Board a wealth of retail and finance experience Kevin was previously Chief Executive Officer of Poundland Group Limited until December 2016 and held executive roles at Kingfisher plc from 2008 to 2015 including Divisional Director UK China and Turkey Chief Executive Officer of BampQ UK amp Ireland and Group Finance Director He was previously Group Finance Director of Dixons Retail plc and European Finance Director of Quaker Oats He was a Non-Executive Director of Land Securities Group PLC from 2008 to September 2017 where he was Chairman of the Audit Committee and Senior Independent Director
Date of appointment 9 January 2017
Other current rolesNon-Executive Director of Greene King plc
Skills and experienceMartin brings a breadth of experience and leadership in both executive and non-executive roles His previous roles include positions as the Chairman of Great Portland Estates plc Senior Independent Director and Chair of the Audit Committee of Worldpay Inc and Non-Executive Director and Chair of the Audit Committee of Lloyds Banking Group plc He was a partner at Deloitte LLP for 26 years serving as Chairman from 1995 to 2007 where his clients included Dixons WH Smith Alliance Unichem and Cadburyrsquos
Other current rolesChairman of RSA Insurance Group plc
Martin Scicluna Chairman
Date of appointment 1 November 2018 Martin joined the Board as Chairman Designate and Non-Executive Director on 1 November 2018 He was appointed as Chairman of the Board on 10 March 2019
Committee membershipChair of the Nomination Committee
Dame Susan Rice Senior Independent Director
Skills and experienceSusan has extensive experience as a Non-Executive Director as well as in retail banking financial services leadership and sustainability Her career in retail bankingis particularly relevant to our ownership ofSainsburyrsquos Bank Previously Susan was a member of the First Ministerrsquos Council of Economic Advisors Managing Director of Lloyds Banking Group Scotland and was previously Chief Executive and then Chairman of Lloyds TSB Scotland plc She has also held a range of other non-executive directorships including at the Bank of England and SSE plc
Committee membershipChair of the Remuneration Committee and a member of the Nomination Committee
Date of appointment 1 June 2013
Other current rolesChair of Scottish Water and Business Stream Chair of the Scottish Fiscal Commission Non-Executive Director of the North American Income Trust C Hoare and Co and Senior Independent Director of the North American Income Trust
9
Other current rolesNon-Executive Director and Chairman of the Audit Committee of Centrica plc
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jean Tomlin Non-Executive Director
Skills and experienceJean has extensive experience and breadth of skills in human resources and corporate responsibility Jean was formerly Director of HR Workforce and Accreditation for The London OrganisingCommittee of the Olympic and Paralympic Games where she set the strategic direction to ensure the mobilisation of the combined 200000-strong workforce including paid staff volunteers and contractors which represented the recruitment and mobilisation of the largest peacetime workforce and set the industry standard for volunteering with the highly acclaimed Games She was previously Group HR Director at Marks and Spencer Group Plc HR Director and founder member of Egg plc and Sales amp Operations Director of Prudential Direct
Date of appointment 1 January 2013
Committee membershipAudit Committee Corporate Responsibility and Sustainability Committee and Nomination Committee
David Keens Non-Executive Director
Skills and experienceDavid has extensive retail experience and knowledge of consumer facing businesses together with his core skills in finance David was formerly Group Finance Director of next plc from 1991 to 2015 and their Group Treasurer from 1986 to 1991 Previous management experience includes nine years in the UK and overseas operations of multinational food manufacturer Nabisco and prior to that seven years in the accountancy profession
Date of appointment 29 April 2015
Committee membershipChair of the Audit Committee and a member of the Nomination Committee
Other current rolesIndependent Board member of Capri Holdings Limited Non-Executive Director of Hakluyt and Chief Executive Officer of Chanzo Limited
Other current rolesNon-Executive Director Senior Independent Director and Chair of the Audit Committee of Auto Trader Group plc
Matt BrittinNon-Executive Director
Skills and experienceMatt has extensive experience of running a high profile fast moving innovative digital business Since 2015 he has been responsible for Googlersquos business and operations in Europe the Middle East and Africa and hersquos been in leadership roles at Google since 2007 Prior to that Matt spent much of his career in media and marketing with particular interests in strategy commercial development and sales performance This included commercial and digital leadership roles in UK media
Date of appointment 27 January 2011
Committee membershipNomination Committee and Remuneration Committee
Other current rolesGooglersquos President ndash Europe Middle East and Africa and Director of The Media Trust
Brian Cassin Non-Executive Director
Skills and experienceBrian brings present day experience of running a FTSE40 group and of big data and analytics ndash topics of key importance to Sainsburyrsquos Brian joined Experian plc as Chief Financial Officer in April 2012 a post he held until his appointment as Chief Executive Officer in July 2014 Prior to this Brian spent his career in investment banking at Greenhill amp Co where he was Managing Director and Partner Brian has also held various roles at Baring Brothers International and at the London Stock Exchange
Date of appointment 1 April 2016
Committee membershipAudit Committee and Nomination Committee
Other current rolesChief Executive Officer of Experian plc
10
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jo Harlow Non-Executive Director
Skills and experienceJo brings a wealth of experience in consumer-facing businesses and in the telecoms and technology industry bothin the UK and internationally Jo spent 12 years in a variety of senior management roles with Nokia and Microsoft Prior to this she spent eight years at PampG and 11 years at Reebok in senior sales and marketing positions in both Europe and the US
Date of appointment 11 September 2017
Committee membershipChair of the Corporate Responsibility and Sustainability Committee and member of the Nomination Committee and Remuneration Committee
Life PresidentLord Sainsbury of Preston Candover KG
Other current rolesNon-Executive Director of InterContinental Hotels plc Non-Executive Director of Halmaplc and Member of the Supervisory Board of Ceconomy AG
11
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief Executive
Tim FallowfieldCompany Secretary amp Corporate Services Director
Kevin OrsquoByrne Chief Financial Officer
Jim BrownChief Executive Officer of Sainsburyrsquos Bank
Paul Mills-HicksFood Commercial Director
Angie RisleyGroup HR Director
Phil JordanGroup Chief InformationOfficer
Simon RobertsRetail and Operations Director
Clo MoriartyGroup Chief Digital Officer
12
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief ExecutiveSee Appendix page 9
Kevin OrsquoByrneChief Financial OfficerSee Appendix page 9
Tim FallowfieldCompany Secretary amp Corporate Services Director
Date of appointment September 2004
Skills and experienceTim joined Sainsburyrsquos in 2001 as Company Secretary and joined the Operating Board in September 2004 In addition to his role as Company Secretary Tim is responsible for the Corporate Services Division comprising Legal Services Data Governance Safety Shareholder Services Insurance and Central Security He chairs the Group Safety Committee and the Data Governance Committee Tim joined Sainsburyrsquos from Exelplc the global logistics company now part of DHL where he was Company Secretary and General Counsel He began his career at the international law firm Clifford Chance and is a qualified solicitor Tim is Chairman of the Disability Confident Business Leaders Group which works with Government in shaping the disability employment agenda and in raising awareness of the benefits of employing disabled people
Jim BrownCEO of Sainsburyrsquos Bank
Skills and experienceJim joined Sainsburyrsquos Bank as CEO in June 2019 and is also a member of the Sainsburyrsquos Group Operating Board He has held a number of senior international Financial Services roles - most recently for RBS in the UK as CEO of Williams and Glyn and prior to that CEO of Ulster Bank in Northern Ireland and the Republic of Ireland Before moving to Ireland he was based in Hong Kong and was CEO Retail and Commercial Banking Asia and the Middle East for RBS and ABN AMRO He has also been a member of the RBS Group Management Committee ABN AMRO Executive Group ABN AMRO Global Consumer Leadership Team and the RBSBank of China Joint Steering Committee Earlier in his career he held a number of senior executive roles for Citibank in Asia and Australia and New Zealand Jim has also held various Board positions including at Ulster Bank Saudi Hollandi Bank The Royal Bank of Scotland (China) Co Ltd and RBS (Pakistan) Ltd He is also a past President of the Institute of Banking in Ireland He is currently a Certified Bank Director
Date of appointment August 2019
Paul Mills-HicksFood Commercial Director
Skills and experiencePaul joined the Operating Board in May 2014 as Food Commercial Director having spent over ten years at Sainsburyrsquos He was closely involved in the formation and execution of the lsquoMaking Sainsburyrsquos Great Againrsquo strategy Following this he held a variety of roles in commercial strategy and finance most recently as Business Unit Director for Grocery Prior to Sainsburyrsquos Paul was European Controller at Marks and Spencer Group PLC and a Director at UBS Warburg
Date of appointment May 2014
13
APPENDIX Interim Results 201920 - November 2019
Operating Board
Angie RisleyGroup HR Director
Skills and experienceAngie was appointed Group HR Director and a member of the Operating Board in January 2013 with responsibility for human resources Angie is also a Director of Sainsburyrsquos Bank plc Angie was most recently Non-Executive Director and Chairman of the Remuneration Committee of Serco plc and prior to this was Group HR Director of Lloyds Banking Group and an Executive Director of Whitbread PLC with responsibility for HR and Corporate Social Responsibility Angie is currently Non-Executive Director and Chair of the Remuneration Committee at Smith amp Nephew plc
Date of appointment January 2013
Phil JordanGroup Chief Information Officer
Skills and experiencePhil joined the Board in January 2018 and has brought a fresh globalperspective on technology to the Operating Board in addition to a wealth of experience in digital data and business transformation Prior to joining Sainsburyrsquos Phil had a long and successful track record in telecommunications Most recently he was Global Chief Information Officer at Telefonica overseeing Digital Transformation and Information Technology and prior to that was Chief Information Officer for Vodafone UKIreland Phil has worked as a Non-Executive Advisor on Technology in the Investment amp Retail Banking sector and is currently a Non-Executive Director of TalkTalk Telecom Group PLC and chairs its Cyber-Security Committee
Date of appointment January 2018
Simon RobertsRetail and Operations Director
Skills and experienceSimon joined Sainsburyrsquos and the Operating Board in July 2017 as Central Retail amp Operations Director responsible for Stores Central operation and Logistics In his previous role he was Executive Vice President of Walgreens Boots Alliance and President of Boots with responsibility for commercial and retail operations across the UK and Ireland Prior to Boots Simon was at Marks and Spencer Group PLC where he held operational and customer leadership roles across stores divisions and central operations Simon is also the Non-Executive Chairman at the Institute ofCustomer Service
Date of appointment July 2017
Clodagh MoriartyGroup Chief Digital Officer
Skills and experienceClodagh was appointed Group Chief Digital Officer in June 2018 Clodagh leads the delivery of a consistent and first-rate digital experience for customers across Sainsburyrsquos Argos and Sainsburyrsquos BankClodagh joined Sainsburyrsquos in 2010 from Bain amp Co management consultants where she had gained experience working on a broad range of projects across multiple sectors and countries Following two years as Head of Strategy at Sainsburyrsquosshe moved into Food Commercial as Category Manager for Meal Solutions and then became Head of Online Trading spanning Food General Merchandise and Clothing before being promoted to Director of Online in 2016 In this role Clodagh was instrumental in driving innovation within Groceries Online and launching new initiatives including SmartShop and Chop Chop
Date of appointment June 2018
14
APPENDIX Interim Results 201920 - November 2019
Supplementary financial details
3 Financial calendarQ3 trading statement(15 weeks to 4 January 2020)
Preliminary results(52 weeks to 7 March 2020)
8 January 2020
30 April 2020
1 Weighted average number of shares
The interim dividend datesOrdinary shares
Ex-dividend 14 November 2019Record 15 November 2019Payment 20 December 2019
Product Quality Framework helps us fund investment
PQF cereals case study
BAU savings to offset cost inflation
Strategic cost transformation 5 year plan
Slide Number 43
Financial Services Priorities
Financial Services reshaping the portfolio
Financial Services key targets
Nectar
Slide Number 48
Digital
We will help our customers live well for less
Slide Number 51
Slide Number 52
Guidance for 201920
Retail sales
Sainsburyrsquos sales area and store numbers
Sainsburyrsquos store estate
Sainsburyrsquos investment programme
Retail margin
Group retail
Plc Board
Plc Board
Plc Board
Plc Board
Operating Board
Operating Board
Operating Board
Supplementary financial details
Contacts
Column1
201819
Grocery
19
GM
7
Clothing
1
To resize chart data range drag lower right corner of range
Grocery
GM
Clothing
5 Interim Results 201920 - November 2019
Retail sales
1 Sales including VAT excluding fuel
Expect to open 2 new Sainsburys supermarkets and up to 15 convenience stores
Expect to open around 25 Argos stores in Sainsburyrsquos (of which 11 are relocations) resulting in around 305 Argos stores in supermarkets
Expect to close 2 supermarkets around 25 convenience stores and around 20 Argos stores in FY201920 as part of announced property closure programme of 10-15 supermarkets 30-40 convenience stores and 60-70 Argos stores
201920 FY Guidance33
(45)
(20)
(31)
06(05)
Q1 Q2
98
502615(02)(11)
Grocery GeneralMerchandise
Clothing
Q1 Q2 Q1Q2
Convenience GroceriesOnline
Supermarkets
Q1 Q2 Q1 Q2 Q1 Q2
LFL sales growth1(10)
New space1304
Total sales growth1
(06)
2 Supermarket sales include Argos stores in Sainsburyrsquos sales3 Sales from net new space
6 Interim Results 201920 - November 2019
Sales performance versus market
GROCERY Volume growth1
Argos YoY
BRC YoY (excluding Argos)FY
201819H1
201920
ARGOS Sales growth v BRC2
CLOTHING Value Growth (YOY)3
Sainsburyrsquos
Total market
22 Aug 18 22 Sep 19
1 Kantar unit growth Q1 11 March ndash 30 June 2019 Q2 1 July 2019 ndash 22 September 20192 Argos v BRC non-food non-clothing market 52 weeks to 21 September 20193 Kantar World Panel 24 we 22nd September 2019
expected to be cpound45m including a cpound10m benefit as a result of a change in transfer pricing between Argos and Argos Financial Services
Financial Services non-underlying costs are expected to be around pound30m
No further capital injections into the Bank are expected following pound35m in H1 201920
08 0814 1917
19
3029
Personal loansCredit cardsMortgagesStorecards
FY 201819
7470
HY 201920
Customer assets (poundbn)
7 Total capital risk-weighted assets
8 Interim Results 201920 - November 2019
ChangeH1
201920H1
201819poundm
Financial services
Metrics inc AFS1
3100 bps40 bps
316663
Total Financial Services UPBTCostincome ratioROCE2
306759
1 H1 201819 restated for IFRS 162 Calculated on a post-tax basis Comparative reflects the 52 weeks to 9th March 2019 as the 52 weeks to 22 September 2018 cannot be calculated on a consistent basis due to changes in accounting standards
result of items excluded from underlying results should not exceed pound100m
Property strategy programme one-off costs expected to be pound230m-pound270m (of which pound30m-pound40m cash)
Sainsburyrsquos Bank Financial Services non-
underlying costs are expected to be around pound30m
201920 FY Guidance
10 Interim Results 201920 - November 2019
Retail capital expenditure
H1201920
H1201819
Core retail capital expenditureArgos integration capexRetail capital expenditure
248 -
248
24331
274
poundm Retail capital expenditure to
be around pound550m
Retail capital expenditure is expected to be around pound550m-pound600m per annum over the medium term
201920 FY Guidance
Core retail capital expenditure
MaintenanceGrowthEfficiency
pound243m201819
pound248m201920
11 Interim Results 201920 - November 2019
Pensions
Outcome
bull 2018 triennial valuation deficit down to pound538m from pound1055m in 2015
bull Greater asset-backed security for the Scheme
bull Immediate cash payments reduced
bull Reduced risk of over funding and trapped cash
Agreed long term sustainable and flexible funding plan
Annual cash contribution reduces by cpound50m
Annual cash commitment
under old plan
201920 202021 202122 202223
124
48
98
7669
12 Interim Results 201920 - November 2019
Retail free cash flow
2 Interest paid net of interest received interest elements of obligations under finance lease payments and dividends paid on perpetual securities
3 Excludes Argos integration capital expenditure
1 Operating cash flow before changes in working capital and pension contributions
4 Other non-cash includes new leases and lease modifications and fair value movements on derivatives linked to borrowings
Adjusted operating cash flow before changes in working capital1
Decrease in working capital
Pension contribution net interest paid2 corporation tax paidNet cash generated from operating activitiesCash capital expenditure before strategic capex3
Proceeds from disposal of property plant and equipmentRepayments of lease obligations and right-of-use assets direct costsBank capital injectionsDividends and distributions received from JVs net of capital injectionsRetail free cash flowDividends paid on ordinary sharesArgos integration capital expenditure
Repayment of borrowings other non-cash and net interest movements4
Movement in net debt5
Opening net debt including perpetual securities as debtClosing net debt including perpetual securities as debt
Of whichLease LiabilitiesNet Debt excluding Lease Liabilities
poundm ndash Restated for IFRS 161029
296
(279)1046
(243)34
(231)-11
617 (156)
(31)
-
430(7575)(7145)
(5873)(1272)
H1 201819Restated
H1 201920
1034 289
(282)1041 (248)
54 (232)
(35)118
698 (174)
-
44
568(7346)(6778)
(5770)(1008)
201920 FY Guidance
5 Net debt definition now excludes derivatives not linked to borrowings and includes perpetual securities as debt
Capital injections into the Bank are expected to be pound35m
Proceeds from disposal of property are expected to be in line with 201819
Expect underlying retail depreciation and amortisation of around pound12bn including cpound500m right of use asset depreciation
Net debt before fair value movements on derivatives to reduce by at least pound300m
Net finance costs of around pound405m including pound320m lease interest in 201920 following the introduction of IFRS 16
13 Interim Results 201920 - November 2019
1 Net debt definition now excludes derivatives not linked to borrowings and includes perpetual securities as debt2 Net debt (inc perpetual securities) on a post-IFRS 16 basis divided by Group underlying EBITDAR We previously disclosed
adjusted Net debt EBITDAR but net debt on a post-IFRS 16 basis now includes lease liabilities3 FY1819 Net Debt exc Leases of pound1522m compares to the previously reported Net Debt of pound1636m less pound(122)m of finance leases plus pound8m other (predominantly derivatives no longer reported within net debt)
Balance sheet targets
bull Net debt reduction of at least pound750m over the next three years
bull Medium leverage reduction targets- Net debtEBITDAR2 less than 3x
bull Dividend policy changed to 19x underlying eps cover versus 20x
- Adjusting for the impact of IFRS 16
FY1819
Net debt exc Lease liabilities1 (poundm)
FY1516
2125
15223
FY2122
(750)
Target
c800
H1201920
FY201819
Net DebtOf which lease liabilitiesNet Debt exc leases1
(6778) (5770) (1008)
(7346) (5824) (1522)3
poundm
(603)
14 Interim Results 201920 - November 2019
Summary and Outlook
bull Grocery sales improving relative to the market
bull General Merchandise and Clothing outperforming a difficult market
Sainsburyrsquos Meat Fish amp Poultry Value Own Label1
Gains
Losses
Incremental Switching within Sainsburyrsquos
Dec 17 Oct 19
+2Sales
+4Volume
Bread Investing across Own Label Tiers120+ EPP SKUs launched in H1 200 by end 201920
Repackaged and NPD within Premium
New Owned Brand Replacing Basics
NPD within Core+ Responding in Growth Areas
Repackaged Core bySainsburyrsquos
New
New
Improved
Improved
1 Kantar 12 we 6 October 2019 ndash rolling 12 weeks switching within total Market MFP
21 Interim Results 201920 - November 2019
Be competitive
on price
1
Lower prices on key volume lines
In-Store Volume Returns Examples
Chicken Wings 1kg+12 Volume
pound170was pound210
pound050Only
White Pittas x6+15 Volume
Chestnut Mushrooms 250g+45 Volume
pound080Only
1 Pre wave 3 lockdown (started 24th March to 15th June 19) YoY 2 Last 6 weeks since wave 4 lockdown (started 28th August 19) YoY
-4
0
4
8
12
16
-6 -5 -4 -3 -2 -1 0 1 2 3 4 5 6
Change in volumes ()
Pre1 Post2
22 Interim Results 201920 - November 2019
Be competitive
on price
1
We continue to be less dependent on promotions
230 228
207 209
Sainsburyrsquos Promotional Participation
1819 1920 19201819
Morrisons
Sainsburyrsquos
Tesco
Asda
Spend on Deal1
Q1 Q2
1 Source Nielsen 4 weekly data to 21 September 2019
10
20
30
4040
30
20
10Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep
2018 2019
H1 1920
H1 1920 AVERAGE
34 31
22 21
23 Interim Results 201920 - November 2019
Be competitive
on price
1
Improved grocery value
Base Price Index 2
-1
0
1
2
3
Grocery inflation (Kantar)1
-960bps
-550bps
Commodity VI 2
Aug 17 Jan 18 Jun 18 Nov 18 Apr 19 Oct 19
2004 2007 2010 2013 2016 2019
Morrisons
Sainsburyrsquos
Tesco
Asda
Total Market
Mar Apr May Jun Jul Aug Sep Oct2019
1 Kantar City Reads to Oct 20192 Sainsburyrsquos value index based on Brandview SKU matching data to Oct 2019
24 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
25 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Category tier performance
YoY value share change by tier
12 weeks to September 2019
-03
01
-01
-18
52 weeks to March 2019
Branded
PremiumOwn Brand
Branded
StandardOwn Brand
EconomyOwn Brand
02
-08
-04
00PremiumOwn Brand
StandardOwn Brand
EconomyOwn Brand
Source Nielsen Panel Total FMCG Market Universe Total outlets 52wks data to 9 March 2019 and 12wks data to 21 Sept 2019
26 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Premium private label
Taste the Difference re-launch
bull Over 350 products new repackaged or reformulated
bull Premium ready meals growth now outperforming the market
41
25 2419
Sainsburys Morrisons Tesco Asda
Premium Own Label volume share
Source Nielsen Panel Total FMCG 28 weeks data to 21 September 2019 Premium Own Label share of sales by retailer
27 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Distinctive brands
bull 57 of customers have bought Distinctive Brands since launch
bull On track for pound100m incremental sales
bull 37 new brands in H1 across Fresh and Grocery
bull lsquoTaste of the Futurersquo bays launched in 70 stores- 67 incremental sales
Leon
bull 3 year exclusive partnership
bull 14 products launched
28 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Beauty Rollout
bull Now rolled out to over 60 stores- Sales up over 40
bull Customer numbers up 7
bull Spend per customer up 25
bull Beauty range doubled 1200 additional lines
bull Double digit growth differential against the market
29 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Our values make us different
bull Committed to reduce plastic packaging by 50 by 2025
bull First retailer to remove single use plastic produce and bakery bags from our stores
- Launching reusable bags in fruit and veg aisles
bull Investing in our loose produce offer
bull Removed black plastic trays from ready meals
bull Fresh water stands in cafeacutes for customers to refill bottles
UKrsquos first major retailer to make significant commitment to reduce plastic
30 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Argos category and range focus
bull Availability improvement- Argos master range reduced by c30 over 3 years- Eliminating duplication removing low value items- Better availability of key lines in store
bull Rebalancing into higher margin categories- Gaining share in Furniture1
More distinctive rangemore reason to shop at Sainsburyrsquos
Reduced SKU count -20operational efficiencies
Higher cash gross profit +2 YOY
Volumes +8 operational efficiencies
41 Interim Results 201920 - November 2019
Drive efficiency
to invest in the customer
offer
4
BAU savings to offset cost inflation
Manages inflationary pressures
BAU savingsH1 201920
Procurement GNFR
Retail Technology Efficiencies
Retail HRRetail
management structures
Shrink Reduction
42 Interim Results 201920 - November 2019
Drive efficiency
to invest in the customer
offer
4
Strategic cost transformation 5 year plan
Converge Tackle fixed cost
End to end reviews
Retail Operations Marketing and Commercial Operations
Other central support
Logistics and Supply Chain
Project A
Project C
Project D
Shared Services BPO
Property strategy
Project BGNFR procurement
Capital prioritisation
Technology Digital and Corporate Services
pound250-pound350m
pound150-pound250m
pound400-pound600mExecution underway In planning Opportunities identified
pound5bn addressable cost base
43 Interim Results 201920 - November 2019
Grow connected
services
5
44 Interim Results 201920 - November 2019
Grow connected
services
5
Financial Services Priorities
To be the provider of financial services for loyal Sainsburyrsquos and Argos customers
An agile capital and cost efficient provider of simple mobile-led financial services
Vision
Objective
Priorities Reshape Simplify Strengthen
45 Interim Results 201920 - November 2019
Grow connected
services
5
Current Customer Base
Customer Credit Risk Balance Sheet Earnings
Argos Storecards 22m Prime Near Prime
Credit Cards 09m Prime
Personal Loans 05m Prime
Mortgages 9K Exit
Total Lending
Deposits 03m
Insurances 05m Very Low Risk
Travel Money 266 Sites
ATMs 1890
Financial Services reshaping the portfolio
46 Interim Results 201920 - November 2019
Grow connected
services
5
Increase connectivity and value for Group
Stop mortgage acquisition review back book options
No capital input from the Group from now1
Costincome c503 within 5 years
Double UPBT double digit ROCE within 5 years
Upstream cash within 5 years2
Financial Services key targets
Transform the cost base
Improve returns
Financial services cash generative
Reduce risk profile to Group
Stop putting cash in to Financial Services
2
4
6
3
1
5
Focus on Sainsburyrsquos customer base
1 Subject to regulatory changes requirements2 Subject to regulatory approval3 On a Group contribution basis
47 Interim Results 201920 - November 2019
Grow connected
services
5
Nectar
bull Biggest loyalty programme in the UK
bull Over 18 million collectors
bull Most recognised loyalty brand in the UK
bull Launch of Nectar digital- 21 million app users- Increase in overall Nectar participation- Increased levels of personalisation- 138000 new Nectar customers- 1 app on launch weekend
bull Coalition strengthened with addition of Esso in June 2019
48 Interim Results 201920 - November 2019
Provide a seamless customer
experience
6
49 Interim Results 201920 - November 2019
Provide a seamless customer
experience
6
Digital
bull Groceries Online sales penetration of 8- App accounts for over 20 of orders
bull 21 million digital Nectar app users
bull 14 million Argos Financial Services app downloads
bull Smartshop rollout in over 350 stores
Groceries online
Chop Chop
SmartShop
Universaldiscovery
Seamlessfinancialservices
Singlebasket
50 Interim Results 201920 - November 2019
We will help our customers live well for less
Confident in the core Integrated customer offer
One multi brand multi channel business
Strong cash generation supporting investment dividend and allowing deleverage
Financial flexibility and resilience
Sustainable cost reduction covering cost inflation and funding investment in our competitive offer
QampA
APPENDIX Interim Results 201920 - November 2019
Appendices
APPENDIX Interim Results 201920 - November 2019
Guidance for 201920
1
Spacebull Expect to open 2 new Sainsburyrsquos supermarkets and up to 15 convenience storesbull Expect to open around 25 Argos stores in Sainsburyrsquos (of which 11 are
relocations) resulting in around 305 Argos stores in supermarketsbull Expect to close 2 supermarkets around 25 convenience stores and around 20
Argos stores in FY201920 as part of announced property closure programme of 10-15 supermarkets 30-40 convenience stores and 60-70 Argos stores
Financial Servicesbull Financial services underlying operating profit expected to be cpound45m including a
cpound10m benefit as a result of a change in transfer pricing between Argos and Argos Financial Services
bull Financial Services non-underlying costs are expected to be around pound30mbull No further capital injections into the Bank are expected following pound35m in H1 201920
Depreciation and amortisationbull Expect underlying retail depreciation and amortisation of around pound12bn
including cpound500m right of use asset depreciation
CostsOperating cost inflationbull Cost inflation between 2 and 3Cost savingsbull Continue to deliver cost savings to at least offset the impact of cost inflation
Finance costsbull Net finance costs of around pound405m including pound320m lease interest in
201920 following the introduction of IFRS 16
One-off itemsbull In 201920 cash outflows as a result of items excluded from
underlying results should not exceed pound100mbull Property strategy programme one-off costs expected to be
pound230m-pound270m of which cash costs are pound30-40m
Dividendbull Sainsburyrsquos plans to change the full year dividend policy to 19x cover by
underlying earnings (versus 20x previously) to offset the dilutive (non cash) impact of IFRS 16 on underlying earnings
Capital expenditurebull Retail capital expenditure to be around pound550mbull Retail capital expenditure is expected to be around pound550m-pound600m per
annum over the medium term
Net debtbull Net debt before fair value movements on derivatives to reduce by at
least pound300m
Tax ratebull Underlying tax rate to be between 25 and 26
APPENDIX Interim Results 201920 - November 2019
Retail sales
1 Sales including VAT excluding fuel
LFL sales growth1
(10)
Sales from net new space1
04
Total sales growth1
(06)
Supermarkets2
(07)
Convenience20
Groceries Online
70
Channels
(01)(25)
(12)
2 Supermarket sales include Argos SiS sales FY 1819 16
pound139bn
pound103bnGrocery
pound30bnGeneralMerchandise
pound488mClothing
2
Chart1
201819
194
66
1
Sheet1
APPENDIX Interim Results 201920 - November 2019
Sainsburyrsquos sales area and store numbersAs at 21 September 2019
Sainsburyrsquos store estateAs at 21 September 2019
Sq ftsales area
82446
870
40001 to60000
20001 to40000
10000 to20000
Under10000 Total
Over60000
0122122
0197197
0175175
06767
824607
1431
Argos storesArgos in SainsburyrsquosArgos in HomebaseOtherArgos total store numbers
Habitat1
Collection points
594281
8-
883
16317
As at21 Sept 2019
Disposalsclosures
Newstores
As at9 March 2019
17--8
-1
(7)-
(2)-
(9)
-(36)
588288
6-
88216
282
ConvenienceSupermarketsTotal stores
Number of stores
Sq ftsales area
1929350
2279
40001 to60000
20001 to40000
10000 to20000
Under10000 Total
Over60000
-18441844
-58185818
-85018501
-46604660
19292117323102
ConvenienceSupermarketsTotal stores
Space by store size (lsquo000 sq ft)
Argos and Habitat store numbers
1 5 Habitat stores 11 Habitat stores in Sainsburys
4
APPENDIX Interim Results 201920 - November 2019
ClosureBitterne West
Sainsburyrsquos investment programme201920
Q1
Supermarkets ConvenienceNew storesMilton Keynes Brooklands District CentBromley High StLeeds Wike Ridge LaneSalford Harbour CityCanterbury High St
ReplacementMayfair Stratton St
ClosuresMayfairWarren St
Q1Q1Q1Q2Q2
Q2
Q1Q2
5
APPENDIX Interim Results 201920 - November 2019
Retail margin
Retail sales (inc VAT inc fuel)(exc VAT inc fuel)
Retail underlying EBITDAR1
Retail underlying EBITDAR margin 2
at constant fuel pricesRetail underlying operating profit3
Retail underlying operating margin 4
at constant fuel prices
1656714808
10677272
4373030
1661214856
11147575
4873333
030342
30 bps28 bps10333 bps32 bps
1 Retail underlying operating profit before net rental income of pound6 million and underlying depreciation and amortisation of pound636 million2 Retail underlying EBITDAR divided by underlying retail sales excluding VAT3 Retail underlying earnings before interest tax and Sainsburyrsquos underlying share of post-tax profit from joint ventures4 Retail underlying operating profit divided by underlying retail sales excluding VAT
poundm H1201920
H1201819
Change
6
APPENDIX Interim Results 201920 - November 2019
H1201920
H1201819
Group retail
Return on capital employed 1
Net debt to EBITDAR (times)23
Fixed charge cover (times)2
Underlying tax rate Core retail capex sales5
713126
26515
743326
25715
poundm
1 ROCE Return is defined as a 52 week rolling underlying profit before interest and tax Capital employed is defined as group net assets2 Net debt of pound6778 million includes lease obligations under IFRS 16 and perpetual securities treated as debt divided by Group underlying EBITDAR of pound2171 million calculated for a 52-week period to 21 September 20193 Group underlying EBITDAR divided by rent (both capital and interest) and net finance costs where interest on perpetual securities is treated as an underlying finance costs4 52 weeks to 22nd September 2018 is not available due to the implementation of IFRS 16 Comparatives therefore reflect the 52 weeks to 9th March 20195 Includes retail sales inc vat inc fuel
4
4
7
APPENDIX Interim Results 201920 - November 2019
Plc Board
Kevin OrsquoByrneChief Financial Officer
Mike Coupe Group Chief Executive
Dame Susan Rice Senior Independent Director
Matt BrittinNon-Executive Director
Jo HarlowNon-Executive Director
Brian CassinNon-Executive Director
David KeensNon-Executive Director
Jean Tomlin Non-Executive Director
Martin Scicluna Chairman
8
APPENDIX Interim Results 201920 - November 2019
Plc Board
Mike Coupe Group Chief Executive Officer
Skills and experienceAppointed Group Chief Executive Officer on 9 July 2014 Mike has been a member of the Operating Board since October 2004 Mike has vast retail industry experience in trading strategy marketing digital and online as well as multi-site store experience He joined Sainsburyrsquos from Big Food Group where he was a board director of Big Food Group PLC and Managing Director of Iceland Food Stores He previously worked for both Asda and Tesco PLC where he served in a variety of senior management roles
Date of appointment 1 August 2007Mike has served as an Executive Director since 1 August 2007 and as Chief Executive Officer since 9 July 2014
Committee membershipCorporate Responsibility and Sustainability Committee
Kevin OrsquoByrne Chief Financial Officer
Skills and experienceKevin brings to the Board a wealth of retail and finance experience Kevin was previously Chief Executive Officer of Poundland Group Limited until December 2016 and held executive roles at Kingfisher plc from 2008 to 2015 including Divisional Director UK China and Turkey Chief Executive Officer of BampQ UK amp Ireland and Group Finance Director He was previously Group Finance Director of Dixons Retail plc and European Finance Director of Quaker Oats He was a Non-Executive Director of Land Securities Group PLC from 2008 to September 2017 where he was Chairman of the Audit Committee and Senior Independent Director
Date of appointment 9 January 2017
Other current rolesNon-Executive Director of Greene King plc
Skills and experienceMartin brings a breadth of experience and leadership in both executive and non-executive roles His previous roles include positions as the Chairman of Great Portland Estates plc Senior Independent Director and Chair of the Audit Committee of Worldpay Inc and Non-Executive Director and Chair of the Audit Committee of Lloyds Banking Group plc He was a partner at Deloitte LLP for 26 years serving as Chairman from 1995 to 2007 where his clients included Dixons WH Smith Alliance Unichem and Cadburyrsquos
Other current rolesChairman of RSA Insurance Group plc
Martin Scicluna Chairman
Date of appointment 1 November 2018 Martin joined the Board as Chairman Designate and Non-Executive Director on 1 November 2018 He was appointed as Chairman of the Board on 10 March 2019
Committee membershipChair of the Nomination Committee
Dame Susan Rice Senior Independent Director
Skills and experienceSusan has extensive experience as a Non-Executive Director as well as in retail banking financial services leadership and sustainability Her career in retail bankingis particularly relevant to our ownership ofSainsburyrsquos Bank Previously Susan was a member of the First Ministerrsquos Council of Economic Advisors Managing Director of Lloyds Banking Group Scotland and was previously Chief Executive and then Chairman of Lloyds TSB Scotland plc She has also held a range of other non-executive directorships including at the Bank of England and SSE plc
Committee membershipChair of the Remuneration Committee and a member of the Nomination Committee
Date of appointment 1 June 2013
Other current rolesChair of Scottish Water and Business Stream Chair of the Scottish Fiscal Commission Non-Executive Director of the North American Income Trust C Hoare and Co and Senior Independent Director of the North American Income Trust
9
Other current rolesNon-Executive Director and Chairman of the Audit Committee of Centrica plc
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jean Tomlin Non-Executive Director
Skills and experienceJean has extensive experience and breadth of skills in human resources and corporate responsibility Jean was formerly Director of HR Workforce and Accreditation for The London OrganisingCommittee of the Olympic and Paralympic Games where she set the strategic direction to ensure the mobilisation of the combined 200000-strong workforce including paid staff volunteers and contractors which represented the recruitment and mobilisation of the largest peacetime workforce and set the industry standard for volunteering with the highly acclaimed Games She was previously Group HR Director at Marks and Spencer Group Plc HR Director and founder member of Egg plc and Sales amp Operations Director of Prudential Direct
Date of appointment 1 January 2013
Committee membershipAudit Committee Corporate Responsibility and Sustainability Committee and Nomination Committee
David Keens Non-Executive Director
Skills and experienceDavid has extensive retail experience and knowledge of consumer facing businesses together with his core skills in finance David was formerly Group Finance Director of next plc from 1991 to 2015 and their Group Treasurer from 1986 to 1991 Previous management experience includes nine years in the UK and overseas operations of multinational food manufacturer Nabisco and prior to that seven years in the accountancy profession
Date of appointment 29 April 2015
Committee membershipChair of the Audit Committee and a member of the Nomination Committee
Other current rolesIndependent Board member of Capri Holdings Limited Non-Executive Director of Hakluyt and Chief Executive Officer of Chanzo Limited
Other current rolesNon-Executive Director Senior Independent Director and Chair of the Audit Committee of Auto Trader Group plc
Matt BrittinNon-Executive Director
Skills and experienceMatt has extensive experience of running a high profile fast moving innovative digital business Since 2015 he has been responsible for Googlersquos business and operations in Europe the Middle East and Africa and hersquos been in leadership roles at Google since 2007 Prior to that Matt spent much of his career in media and marketing with particular interests in strategy commercial development and sales performance This included commercial and digital leadership roles in UK media
Date of appointment 27 January 2011
Committee membershipNomination Committee and Remuneration Committee
Other current rolesGooglersquos President ndash Europe Middle East and Africa and Director of The Media Trust
Brian Cassin Non-Executive Director
Skills and experienceBrian brings present day experience of running a FTSE40 group and of big data and analytics ndash topics of key importance to Sainsburyrsquos Brian joined Experian plc as Chief Financial Officer in April 2012 a post he held until his appointment as Chief Executive Officer in July 2014 Prior to this Brian spent his career in investment banking at Greenhill amp Co where he was Managing Director and Partner Brian has also held various roles at Baring Brothers International and at the London Stock Exchange
Date of appointment 1 April 2016
Committee membershipAudit Committee and Nomination Committee
Other current rolesChief Executive Officer of Experian plc
10
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jo Harlow Non-Executive Director
Skills and experienceJo brings a wealth of experience in consumer-facing businesses and in the telecoms and technology industry bothin the UK and internationally Jo spent 12 years in a variety of senior management roles with Nokia and Microsoft Prior to this she spent eight years at PampG and 11 years at Reebok in senior sales and marketing positions in both Europe and the US
Date of appointment 11 September 2017
Committee membershipChair of the Corporate Responsibility and Sustainability Committee and member of the Nomination Committee and Remuneration Committee
Life PresidentLord Sainsbury of Preston Candover KG
Other current rolesNon-Executive Director of InterContinental Hotels plc Non-Executive Director of Halmaplc and Member of the Supervisory Board of Ceconomy AG
11
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief Executive
Tim FallowfieldCompany Secretary amp Corporate Services Director
Kevin OrsquoByrne Chief Financial Officer
Jim BrownChief Executive Officer of Sainsburyrsquos Bank
Paul Mills-HicksFood Commercial Director
Angie RisleyGroup HR Director
Phil JordanGroup Chief InformationOfficer
Simon RobertsRetail and Operations Director
Clo MoriartyGroup Chief Digital Officer
12
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief ExecutiveSee Appendix page 9
Kevin OrsquoByrneChief Financial OfficerSee Appendix page 9
Tim FallowfieldCompany Secretary amp Corporate Services Director
Date of appointment September 2004
Skills and experienceTim joined Sainsburyrsquos in 2001 as Company Secretary and joined the Operating Board in September 2004 In addition to his role as Company Secretary Tim is responsible for the Corporate Services Division comprising Legal Services Data Governance Safety Shareholder Services Insurance and Central Security He chairs the Group Safety Committee and the Data Governance Committee Tim joined Sainsburyrsquos from Exelplc the global logistics company now part of DHL where he was Company Secretary and General Counsel He began his career at the international law firm Clifford Chance and is a qualified solicitor Tim is Chairman of the Disability Confident Business Leaders Group which works with Government in shaping the disability employment agenda and in raising awareness of the benefits of employing disabled people
Jim BrownCEO of Sainsburyrsquos Bank
Skills and experienceJim joined Sainsburyrsquos Bank as CEO in June 2019 and is also a member of the Sainsburyrsquos Group Operating Board He has held a number of senior international Financial Services roles - most recently for RBS in the UK as CEO of Williams and Glyn and prior to that CEO of Ulster Bank in Northern Ireland and the Republic of Ireland Before moving to Ireland he was based in Hong Kong and was CEO Retail and Commercial Banking Asia and the Middle East for RBS and ABN AMRO He has also been a member of the RBS Group Management Committee ABN AMRO Executive Group ABN AMRO Global Consumer Leadership Team and the RBSBank of China Joint Steering Committee Earlier in his career he held a number of senior executive roles for Citibank in Asia and Australia and New Zealand Jim has also held various Board positions including at Ulster Bank Saudi Hollandi Bank The Royal Bank of Scotland (China) Co Ltd and RBS (Pakistan) Ltd He is also a past President of the Institute of Banking in Ireland He is currently a Certified Bank Director
Date of appointment August 2019
Paul Mills-HicksFood Commercial Director
Skills and experiencePaul joined the Operating Board in May 2014 as Food Commercial Director having spent over ten years at Sainsburyrsquos He was closely involved in the formation and execution of the lsquoMaking Sainsburyrsquos Great Againrsquo strategy Following this he held a variety of roles in commercial strategy and finance most recently as Business Unit Director for Grocery Prior to Sainsburyrsquos Paul was European Controller at Marks and Spencer Group PLC and a Director at UBS Warburg
Date of appointment May 2014
13
APPENDIX Interim Results 201920 - November 2019
Operating Board
Angie RisleyGroup HR Director
Skills and experienceAngie was appointed Group HR Director and a member of the Operating Board in January 2013 with responsibility for human resources Angie is also a Director of Sainsburyrsquos Bank plc Angie was most recently Non-Executive Director and Chairman of the Remuneration Committee of Serco plc and prior to this was Group HR Director of Lloyds Banking Group and an Executive Director of Whitbread PLC with responsibility for HR and Corporate Social Responsibility Angie is currently Non-Executive Director and Chair of the Remuneration Committee at Smith amp Nephew plc
Date of appointment January 2013
Phil JordanGroup Chief Information Officer
Skills and experiencePhil joined the Board in January 2018 and has brought a fresh globalperspective on technology to the Operating Board in addition to a wealth of experience in digital data and business transformation Prior to joining Sainsburyrsquos Phil had a long and successful track record in telecommunications Most recently he was Global Chief Information Officer at Telefonica overseeing Digital Transformation and Information Technology and prior to that was Chief Information Officer for Vodafone UKIreland Phil has worked as a Non-Executive Advisor on Technology in the Investment amp Retail Banking sector and is currently a Non-Executive Director of TalkTalk Telecom Group PLC and chairs its Cyber-Security Committee
Date of appointment January 2018
Simon RobertsRetail and Operations Director
Skills and experienceSimon joined Sainsburyrsquos and the Operating Board in July 2017 as Central Retail amp Operations Director responsible for Stores Central operation and Logistics In his previous role he was Executive Vice President of Walgreens Boots Alliance and President of Boots with responsibility for commercial and retail operations across the UK and Ireland Prior to Boots Simon was at Marks and Spencer Group PLC where he held operational and customer leadership roles across stores divisions and central operations Simon is also the Non-Executive Chairman at the Institute ofCustomer Service
Date of appointment July 2017
Clodagh MoriartyGroup Chief Digital Officer
Skills and experienceClodagh was appointed Group Chief Digital Officer in June 2018 Clodagh leads the delivery of a consistent and first-rate digital experience for customers across Sainsburyrsquos Argos and Sainsburyrsquos BankClodagh joined Sainsburyrsquos in 2010 from Bain amp Co management consultants where she had gained experience working on a broad range of projects across multiple sectors and countries Following two years as Head of Strategy at Sainsburyrsquosshe moved into Food Commercial as Category Manager for Meal Solutions and then became Head of Online Trading spanning Food General Merchandise and Clothing before being promoted to Director of Online in 2016 In this role Clodagh was instrumental in driving innovation within Groceries Online and launching new initiatives including SmartShop and Chop Chop
Date of appointment June 2018
14
APPENDIX Interim Results 201920 - November 2019
Supplementary financial details
3 Financial calendarQ3 trading statement(15 weeks to 4 January 2020)
Preliminary results(52 weeks to 7 March 2020)
8 January 2020
30 April 2020
1 Weighted average number of shares
The interim dividend datesOrdinary shares
Ex-dividend 14 November 2019Record 15 November 2019Payment 20 December 2019
Product Quality Framework helps us fund investment
PQF cereals case study
BAU savings to offset cost inflation
Strategic cost transformation 5 year plan
Slide Number 43
Financial Services Priorities
Financial Services reshaping the portfolio
Financial Services key targets
Nectar
Slide Number 48
Digital
We will help our customers live well for less
Slide Number 51
Slide Number 52
Guidance for 201920
Retail sales
Sainsburyrsquos sales area and store numbers
Sainsburyrsquos store estate
Sainsburyrsquos investment programme
Retail margin
Group retail
Plc Board
Plc Board
Plc Board
Plc Board
Operating Board
Operating Board
Operating Board
Supplementary financial details
Contacts
Column1
201819
Grocery
19
GM
7
Clothing
1
To resize chart data range drag lower right corner of range
Grocery
GM
Clothing
6 Interim Results 201920 - November 2019
Sales performance versus market
GROCERY Volume growth1
Argos YoY
BRC YoY (excluding Argos)FY
201819H1
201920
ARGOS Sales growth v BRC2
CLOTHING Value Growth (YOY)3
Sainsburyrsquos
Total market
22 Aug 18 22 Sep 19
1 Kantar unit growth Q1 11 March ndash 30 June 2019 Q2 1 July 2019 ndash 22 September 20192 Argos v BRC non-food non-clothing market 52 weeks to 21 September 20193 Kantar World Panel 24 we 22nd September 2019
expected to be cpound45m including a cpound10m benefit as a result of a change in transfer pricing between Argos and Argos Financial Services
Financial Services non-underlying costs are expected to be around pound30m
No further capital injections into the Bank are expected following pound35m in H1 201920
08 0814 1917
19
3029
Personal loansCredit cardsMortgagesStorecards
FY 201819
7470
HY 201920
Customer assets (poundbn)
7 Total capital risk-weighted assets
8 Interim Results 201920 - November 2019
ChangeH1
201920H1
201819poundm
Financial services
Metrics inc AFS1
3100 bps40 bps
316663
Total Financial Services UPBTCostincome ratioROCE2
306759
1 H1 201819 restated for IFRS 162 Calculated on a post-tax basis Comparative reflects the 52 weeks to 9th March 2019 as the 52 weeks to 22 September 2018 cannot be calculated on a consistent basis due to changes in accounting standards
result of items excluded from underlying results should not exceed pound100m
Property strategy programme one-off costs expected to be pound230m-pound270m (of which pound30m-pound40m cash)
Sainsburyrsquos Bank Financial Services non-
underlying costs are expected to be around pound30m
201920 FY Guidance
10 Interim Results 201920 - November 2019
Retail capital expenditure
H1201920
H1201819
Core retail capital expenditureArgos integration capexRetail capital expenditure
248 -
248
24331
274
poundm Retail capital expenditure to
be around pound550m
Retail capital expenditure is expected to be around pound550m-pound600m per annum over the medium term
201920 FY Guidance
Core retail capital expenditure
MaintenanceGrowthEfficiency
pound243m201819
pound248m201920
11 Interim Results 201920 - November 2019
Pensions
Outcome
bull 2018 triennial valuation deficit down to pound538m from pound1055m in 2015
bull Greater asset-backed security for the Scheme
bull Immediate cash payments reduced
bull Reduced risk of over funding and trapped cash
Agreed long term sustainable and flexible funding plan
Annual cash contribution reduces by cpound50m
Annual cash commitment
under old plan
201920 202021 202122 202223
124
48
98
7669
12 Interim Results 201920 - November 2019
Retail free cash flow
2 Interest paid net of interest received interest elements of obligations under finance lease payments and dividends paid on perpetual securities
3 Excludes Argos integration capital expenditure
1 Operating cash flow before changes in working capital and pension contributions
4 Other non-cash includes new leases and lease modifications and fair value movements on derivatives linked to borrowings
Adjusted operating cash flow before changes in working capital1
Decrease in working capital
Pension contribution net interest paid2 corporation tax paidNet cash generated from operating activitiesCash capital expenditure before strategic capex3
Proceeds from disposal of property plant and equipmentRepayments of lease obligations and right-of-use assets direct costsBank capital injectionsDividends and distributions received from JVs net of capital injectionsRetail free cash flowDividends paid on ordinary sharesArgos integration capital expenditure
Repayment of borrowings other non-cash and net interest movements4
Movement in net debt5
Opening net debt including perpetual securities as debtClosing net debt including perpetual securities as debt
Of whichLease LiabilitiesNet Debt excluding Lease Liabilities
poundm ndash Restated for IFRS 161029
296
(279)1046
(243)34
(231)-11
617 (156)
(31)
-
430(7575)(7145)
(5873)(1272)
H1 201819Restated
H1 201920
1034 289
(282)1041 (248)
54 (232)
(35)118
698 (174)
-
44
568(7346)(6778)
(5770)(1008)
201920 FY Guidance
5 Net debt definition now excludes derivatives not linked to borrowings and includes perpetual securities as debt
Capital injections into the Bank are expected to be pound35m
Proceeds from disposal of property are expected to be in line with 201819
Expect underlying retail depreciation and amortisation of around pound12bn including cpound500m right of use asset depreciation
Net debt before fair value movements on derivatives to reduce by at least pound300m
Net finance costs of around pound405m including pound320m lease interest in 201920 following the introduction of IFRS 16
13 Interim Results 201920 - November 2019
1 Net debt definition now excludes derivatives not linked to borrowings and includes perpetual securities as debt2 Net debt (inc perpetual securities) on a post-IFRS 16 basis divided by Group underlying EBITDAR We previously disclosed
adjusted Net debt EBITDAR but net debt on a post-IFRS 16 basis now includes lease liabilities3 FY1819 Net Debt exc Leases of pound1522m compares to the previously reported Net Debt of pound1636m less pound(122)m of finance leases plus pound8m other (predominantly derivatives no longer reported within net debt)
Balance sheet targets
bull Net debt reduction of at least pound750m over the next three years
bull Medium leverage reduction targets- Net debtEBITDAR2 less than 3x
bull Dividend policy changed to 19x underlying eps cover versus 20x
- Adjusting for the impact of IFRS 16
FY1819
Net debt exc Lease liabilities1 (poundm)
FY1516
2125
15223
FY2122
(750)
Target
c800
H1201920
FY201819
Net DebtOf which lease liabilitiesNet Debt exc leases1
(6778) (5770) (1008)
(7346) (5824) (1522)3
poundm
(603)
14 Interim Results 201920 - November 2019
Summary and Outlook
bull Grocery sales improving relative to the market
bull General Merchandise and Clothing outperforming a difficult market
Sainsburyrsquos Meat Fish amp Poultry Value Own Label1
Gains
Losses
Incremental Switching within Sainsburyrsquos
Dec 17 Oct 19
+2Sales
+4Volume
Bread Investing across Own Label Tiers120+ EPP SKUs launched in H1 200 by end 201920
Repackaged and NPD within Premium
New Owned Brand Replacing Basics
NPD within Core+ Responding in Growth Areas
Repackaged Core bySainsburyrsquos
New
New
Improved
Improved
1 Kantar 12 we 6 October 2019 ndash rolling 12 weeks switching within total Market MFP
21 Interim Results 201920 - November 2019
Be competitive
on price
1
Lower prices on key volume lines
In-Store Volume Returns Examples
Chicken Wings 1kg+12 Volume
pound170was pound210
pound050Only
White Pittas x6+15 Volume
Chestnut Mushrooms 250g+45 Volume
pound080Only
1 Pre wave 3 lockdown (started 24th March to 15th June 19) YoY 2 Last 6 weeks since wave 4 lockdown (started 28th August 19) YoY
-4
0
4
8
12
16
-6 -5 -4 -3 -2 -1 0 1 2 3 4 5 6
Change in volumes ()
Pre1 Post2
22 Interim Results 201920 - November 2019
Be competitive
on price
1
We continue to be less dependent on promotions
230 228
207 209
Sainsburyrsquos Promotional Participation
1819 1920 19201819
Morrisons
Sainsburyrsquos
Tesco
Asda
Spend on Deal1
Q1 Q2
1 Source Nielsen 4 weekly data to 21 September 2019
10
20
30
4040
30
20
10Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep
2018 2019
H1 1920
H1 1920 AVERAGE
34 31
22 21
23 Interim Results 201920 - November 2019
Be competitive
on price
1
Improved grocery value
Base Price Index 2
-1
0
1
2
3
Grocery inflation (Kantar)1
-960bps
-550bps
Commodity VI 2
Aug 17 Jan 18 Jun 18 Nov 18 Apr 19 Oct 19
2004 2007 2010 2013 2016 2019
Morrisons
Sainsburyrsquos
Tesco
Asda
Total Market
Mar Apr May Jun Jul Aug Sep Oct2019
1 Kantar City Reads to Oct 20192 Sainsburyrsquos value index based on Brandview SKU matching data to Oct 2019
24 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
25 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Category tier performance
YoY value share change by tier
12 weeks to September 2019
-03
01
-01
-18
52 weeks to March 2019
Branded
PremiumOwn Brand
Branded
StandardOwn Brand
EconomyOwn Brand
02
-08
-04
00PremiumOwn Brand
StandardOwn Brand
EconomyOwn Brand
Source Nielsen Panel Total FMCG Market Universe Total outlets 52wks data to 9 March 2019 and 12wks data to 21 Sept 2019
26 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Premium private label
Taste the Difference re-launch
bull Over 350 products new repackaged or reformulated
bull Premium ready meals growth now outperforming the market
41
25 2419
Sainsburys Morrisons Tesco Asda
Premium Own Label volume share
Source Nielsen Panel Total FMCG 28 weeks data to 21 September 2019 Premium Own Label share of sales by retailer
27 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Distinctive brands
bull 57 of customers have bought Distinctive Brands since launch
bull On track for pound100m incremental sales
bull 37 new brands in H1 across Fresh and Grocery
bull lsquoTaste of the Futurersquo bays launched in 70 stores- 67 incremental sales
Leon
bull 3 year exclusive partnership
bull 14 products launched
28 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Beauty Rollout
bull Now rolled out to over 60 stores- Sales up over 40
bull Customer numbers up 7
bull Spend per customer up 25
bull Beauty range doubled 1200 additional lines
bull Double digit growth differential against the market
29 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Our values make us different
bull Committed to reduce plastic packaging by 50 by 2025
bull First retailer to remove single use plastic produce and bakery bags from our stores
- Launching reusable bags in fruit and veg aisles
bull Investing in our loose produce offer
bull Removed black plastic trays from ready meals
bull Fresh water stands in cafeacutes for customers to refill bottles
UKrsquos first major retailer to make significant commitment to reduce plastic
30 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Argos category and range focus
bull Availability improvement- Argos master range reduced by c30 over 3 years- Eliminating duplication removing low value items- Better availability of key lines in store
bull Rebalancing into higher margin categories- Gaining share in Furniture1
More distinctive rangemore reason to shop at Sainsburyrsquos
Reduced SKU count -20operational efficiencies
Higher cash gross profit +2 YOY
Volumes +8 operational efficiencies
41 Interim Results 201920 - November 2019
Drive efficiency
to invest in the customer
offer
4
BAU savings to offset cost inflation
Manages inflationary pressures
BAU savingsH1 201920
Procurement GNFR
Retail Technology Efficiencies
Retail HRRetail
management structures
Shrink Reduction
42 Interim Results 201920 - November 2019
Drive efficiency
to invest in the customer
offer
4
Strategic cost transformation 5 year plan
Converge Tackle fixed cost
End to end reviews
Retail Operations Marketing and Commercial Operations
Other central support
Logistics and Supply Chain
Project A
Project C
Project D
Shared Services BPO
Property strategy
Project BGNFR procurement
Capital prioritisation
Technology Digital and Corporate Services
pound250-pound350m
pound150-pound250m
pound400-pound600mExecution underway In planning Opportunities identified
pound5bn addressable cost base
43 Interim Results 201920 - November 2019
Grow connected
services
5
44 Interim Results 201920 - November 2019
Grow connected
services
5
Financial Services Priorities
To be the provider of financial services for loyal Sainsburyrsquos and Argos customers
An agile capital and cost efficient provider of simple mobile-led financial services
Vision
Objective
Priorities Reshape Simplify Strengthen
45 Interim Results 201920 - November 2019
Grow connected
services
5
Current Customer Base
Customer Credit Risk Balance Sheet Earnings
Argos Storecards 22m Prime Near Prime
Credit Cards 09m Prime
Personal Loans 05m Prime
Mortgages 9K Exit
Total Lending
Deposits 03m
Insurances 05m Very Low Risk
Travel Money 266 Sites
ATMs 1890
Financial Services reshaping the portfolio
46 Interim Results 201920 - November 2019
Grow connected
services
5
Increase connectivity and value for Group
Stop mortgage acquisition review back book options
No capital input from the Group from now1
Costincome c503 within 5 years
Double UPBT double digit ROCE within 5 years
Upstream cash within 5 years2
Financial Services key targets
Transform the cost base
Improve returns
Financial services cash generative
Reduce risk profile to Group
Stop putting cash in to Financial Services
2
4
6
3
1
5
Focus on Sainsburyrsquos customer base
1 Subject to regulatory changes requirements2 Subject to regulatory approval3 On a Group contribution basis
47 Interim Results 201920 - November 2019
Grow connected
services
5
Nectar
bull Biggest loyalty programme in the UK
bull Over 18 million collectors
bull Most recognised loyalty brand in the UK
bull Launch of Nectar digital- 21 million app users- Increase in overall Nectar participation- Increased levels of personalisation- 138000 new Nectar customers- 1 app on launch weekend
bull Coalition strengthened with addition of Esso in June 2019
48 Interim Results 201920 - November 2019
Provide a seamless customer
experience
6
49 Interim Results 201920 - November 2019
Provide a seamless customer
experience
6
Digital
bull Groceries Online sales penetration of 8- App accounts for over 20 of orders
bull 21 million digital Nectar app users
bull 14 million Argos Financial Services app downloads
bull Smartshop rollout in over 350 stores
Groceries online
Chop Chop
SmartShop
Universaldiscovery
Seamlessfinancialservices
Singlebasket
50 Interim Results 201920 - November 2019
We will help our customers live well for less
Confident in the core Integrated customer offer
One multi brand multi channel business
Strong cash generation supporting investment dividend and allowing deleverage
Financial flexibility and resilience
Sustainable cost reduction covering cost inflation and funding investment in our competitive offer
QampA
APPENDIX Interim Results 201920 - November 2019
Appendices
APPENDIX Interim Results 201920 - November 2019
Guidance for 201920
1
Spacebull Expect to open 2 new Sainsburyrsquos supermarkets and up to 15 convenience storesbull Expect to open around 25 Argos stores in Sainsburyrsquos (of which 11 are
relocations) resulting in around 305 Argos stores in supermarketsbull Expect to close 2 supermarkets around 25 convenience stores and around 20
Argos stores in FY201920 as part of announced property closure programme of 10-15 supermarkets 30-40 convenience stores and 60-70 Argos stores
Financial Servicesbull Financial services underlying operating profit expected to be cpound45m including a
cpound10m benefit as a result of a change in transfer pricing between Argos and Argos Financial Services
bull Financial Services non-underlying costs are expected to be around pound30mbull No further capital injections into the Bank are expected following pound35m in H1 201920
Depreciation and amortisationbull Expect underlying retail depreciation and amortisation of around pound12bn
including cpound500m right of use asset depreciation
CostsOperating cost inflationbull Cost inflation between 2 and 3Cost savingsbull Continue to deliver cost savings to at least offset the impact of cost inflation
Finance costsbull Net finance costs of around pound405m including pound320m lease interest in
201920 following the introduction of IFRS 16
One-off itemsbull In 201920 cash outflows as a result of items excluded from
underlying results should not exceed pound100mbull Property strategy programme one-off costs expected to be
pound230m-pound270m of which cash costs are pound30-40m
Dividendbull Sainsburyrsquos plans to change the full year dividend policy to 19x cover by
underlying earnings (versus 20x previously) to offset the dilutive (non cash) impact of IFRS 16 on underlying earnings
Capital expenditurebull Retail capital expenditure to be around pound550mbull Retail capital expenditure is expected to be around pound550m-pound600m per
annum over the medium term
Net debtbull Net debt before fair value movements on derivatives to reduce by at
least pound300m
Tax ratebull Underlying tax rate to be between 25 and 26
APPENDIX Interim Results 201920 - November 2019
Retail sales
1 Sales including VAT excluding fuel
LFL sales growth1
(10)
Sales from net new space1
04
Total sales growth1
(06)
Supermarkets2
(07)
Convenience20
Groceries Online
70
Channels
(01)(25)
(12)
2 Supermarket sales include Argos SiS sales FY 1819 16
pound139bn
pound103bnGrocery
pound30bnGeneralMerchandise
pound488mClothing
2
Chart1
201819
194
66
1
Sheet1
APPENDIX Interim Results 201920 - November 2019
Sainsburyrsquos sales area and store numbersAs at 21 September 2019
Sainsburyrsquos store estateAs at 21 September 2019
Sq ftsales area
82446
870
40001 to60000
20001 to40000
10000 to20000
Under10000 Total
Over60000
0122122
0197197
0175175
06767
824607
1431
Argos storesArgos in SainsburyrsquosArgos in HomebaseOtherArgos total store numbers
Habitat1
Collection points
594281
8-
883
16317
As at21 Sept 2019
Disposalsclosures
Newstores
As at9 March 2019
17--8
-1
(7)-
(2)-
(9)
-(36)
588288
6-
88216
282
ConvenienceSupermarketsTotal stores
Number of stores
Sq ftsales area
1929350
2279
40001 to60000
20001 to40000
10000 to20000
Under10000 Total
Over60000
-18441844
-58185818
-85018501
-46604660
19292117323102
ConvenienceSupermarketsTotal stores
Space by store size (lsquo000 sq ft)
Argos and Habitat store numbers
1 5 Habitat stores 11 Habitat stores in Sainsburys
4
APPENDIX Interim Results 201920 - November 2019
ClosureBitterne West
Sainsburyrsquos investment programme201920
Q1
Supermarkets ConvenienceNew storesMilton Keynes Brooklands District CentBromley High StLeeds Wike Ridge LaneSalford Harbour CityCanterbury High St
ReplacementMayfair Stratton St
ClosuresMayfairWarren St
Q1Q1Q1Q2Q2
Q2
Q1Q2
5
APPENDIX Interim Results 201920 - November 2019
Retail margin
Retail sales (inc VAT inc fuel)(exc VAT inc fuel)
Retail underlying EBITDAR1
Retail underlying EBITDAR margin 2
at constant fuel pricesRetail underlying operating profit3
Retail underlying operating margin 4
at constant fuel prices
1656714808
10677272
4373030
1661214856
11147575
4873333
030342
30 bps28 bps10333 bps32 bps
1 Retail underlying operating profit before net rental income of pound6 million and underlying depreciation and amortisation of pound636 million2 Retail underlying EBITDAR divided by underlying retail sales excluding VAT3 Retail underlying earnings before interest tax and Sainsburyrsquos underlying share of post-tax profit from joint ventures4 Retail underlying operating profit divided by underlying retail sales excluding VAT
poundm H1201920
H1201819
Change
6
APPENDIX Interim Results 201920 - November 2019
H1201920
H1201819
Group retail
Return on capital employed 1
Net debt to EBITDAR (times)23
Fixed charge cover (times)2
Underlying tax rate Core retail capex sales5
713126
26515
743326
25715
poundm
1 ROCE Return is defined as a 52 week rolling underlying profit before interest and tax Capital employed is defined as group net assets2 Net debt of pound6778 million includes lease obligations under IFRS 16 and perpetual securities treated as debt divided by Group underlying EBITDAR of pound2171 million calculated for a 52-week period to 21 September 20193 Group underlying EBITDAR divided by rent (both capital and interest) and net finance costs where interest on perpetual securities is treated as an underlying finance costs4 52 weeks to 22nd September 2018 is not available due to the implementation of IFRS 16 Comparatives therefore reflect the 52 weeks to 9th March 20195 Includes retail sales inc vat inc fuel
4
4
7
APPENDIX Interim Results 201920 - November 2019
Plc Board
Kevin OrsquoByrneChief Financial Officer
Mike Coupe Group Chief Executive
Dame Susan Rice Senior Independent Director
Matt BrittinNon-Executive Director
Jo HarlowNon-Executive Director
Brian CassinNon-Executive Director
David KeensNon-Executive Director
Jean Tomlin Non-Executive Director
Martin Scicluna Chairman
8
APPENDIX Interim Results 201920 - November 2019
Plc Board
Mike Coupe Group Chief Executive Officer
Skills and experienceAppointed Group Chief Executive Officer on 9 July 2014 Mike has been a member of the Operating Board since October 2004 Mike has vast retail industry experience in trading strategy marketing digital and online as well as multi-site store experience He joined Sainsburyrsquos from Big Food Group where he was a board director of Big Food Group PLC and Managing Director of Iceland Food Stores He previously worked for both Asda and Tesco PLC where he served in a variety of senior management roles
Date of appointment 1 August 2007Mike has served as an Executive Director since 1 August 2007 and as Chief Executive Officer since 9 July 2014
Committee membershipCorporate Responsibility and Sustainability Committee
Kevin OrsquoByrne Chief Financial Officer
Skills and experienceKevin brings to the Board a wealth of retail and finance experience Kevin was previously Chief Executive Officer of Poundland Group Limited until December 2016 and held executive roles at Kingfisher plc from 2008 to 2015 including Divisional Director UK China and Turkey Chief Executive Officer of BampQ UK amp Ireland and Group Finance Director He was previously Group Finance Director of Dixons Retail plc and European Finance Director of Quaker Oats He was a Non-Executive Director of Land Securities Group PLC from 2008 to September 2017 where he was Chairman of the Audit Committee and Senior Independent Director
Date of appointment 9 January 2017
Other current rolesNon-Executive Director of Greene King plc
Skills and experienceMartin brings a breadth of experience and leadership in both executive and non-executive roles His previous roles include positions as the Chairman of Great Portland Estates plc Senior Independent Director and Chair of the Audit Committee of Worldpay Inc and Non-Executive Director and Chair of the Audit Committee of Lloyds Banking Group plc He was a partner at Deloitte LLP for 26 years serving as Chairman from 1995 to 2007 where his clients included Dixons WH Smith Alliance Unichem and Cadburyrsquos
Other current rolesChairman of RSA Insurance Group plc
Martin Scicluna Chairman
Date of appointment 1 November 2018 Martin joined the Board as Chairman Designate and Non-Executive Director on 1 November 2018 He was appointed as Chairman of the Board on 10 March 2019
Committee membershipChair of the Nomination Committee
Dame Susan Rice Senior Independent Director
Skills and experienceSusan has extensive experience as a Non-Executive Director as well as in retail banking financial services leadership and sustainability Her career in retail bankingis particularly relevant to our ownership ofSainsburyrsquos Bank Previously Susan was a member of the First Ministerrsquos Council of Economic Advisors Managing Director of Lloyds Banking Group Scotland and was previously Chief Executive and then Chairman of Lloyds TSB Scotland plc She has also held a range of other non-executive directorships including at the Bank of England and SSE plc
Committee membershipChair of the Remuneration Committee and a member of the Nomination Committee
Date of appointment 1 June 2013
Other current rolesChair of Scottish Water and Business Stream Chair of the Scottish Fiscal Commission Non-Executive Director of the North American Income Trust C Hoare and Co and Senior Independent Director of the North American Income Trust
9
Other current rolesNon-Executive Director and Chairman of the Audit Committee of Centrica plc
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jean Tomlin Non-Executive Director
Skills and experienceJean has extensive experience and breadth of skills in human resources and corporate responsibility Jean was formerly Director of HR Workforce and Accreditation for The London OrganisingCommittee of the Olympic and Paralympic Games where she set the strategic direction to ensure the mobilisation of the combined 200000-strong workforce including paid staff volunteers and contractors which represented the recruitment and mobilisation of the largest peacetime workforce and set the industry standard for volunteering with the highly acclaimed Games She was previously Group HR Director at Marks and Spencer Group Plc HR Director and founder member of Egg plc and Sales amp Operations Director of Prudential Direct
Date of appointment 1 January 2013
Committee membershipAudit Committee Corporate Responsibility and Sustainability Committee and Nomination Committee
David Keens Non-Executive Director
Skills and experienceDavid has extensive retail experience and knowledge of consumer facing businesses together with his core skills in finance David was formerly Group Finance Director of next plc from 1991 to 2015 and their Group Treasurer from 1986 to 1991 Previous management experience includes nine years in the UK and overseas operations of multinational food manufacturer Nabisco and prior to that seven years in the accountancy profession
Date of appointment 29 April 2015
Committee membershipChair of the Audit Committee and a member of the Nomination Committee
Other current rolesIndependent Board member of Capri Holdings Limited Non-Executive Director of Hakluyt and Chief Executive Officer of Chanzo Limited
Other current rolesNon-Executive Director Senior Independent Director and Chair of the Audit Committee of Auto Trader Group plc
Matt BrittinNon-Executive Director
Skills and experienceMatt has extensive experience of running a high profile fast moving innovative digital business Since 2015 he has been responsible for Googlersquos business and operations in Europe the Middle East and Africa and hersquos been in leadership roles at Google since 2007 Prior to that Matt spent much of his career in media and marketing with particular interests in strategy commercial development and sales performance This included commercial and digital leadership roles in UK media
Date of appointment 27 January 2011
Committee membershipNomination Committee and Remuneration Committee
Other current rolesGooglersquos President ndash Europe Middle East and Africa and Director of The Media Trust
Brian Cassin Non-Executive Director
Skills and experienceBrian brings present day experience of running a FTSE40 group and of big data and analytics ndash topics of key importance to Sainsburyrsquos Brian joined Experian plc as Chief Financial Officer in April 2012 a post he held until his appointment as Chief Executive Officer in July 2014 Prior to this Brian spent his career in investment banking at Greenhill amp Co where he was Managing Director and Partner Brian has also held various roles at Baring Brothers International and at the London Stock Exchange
Date of appointment 1 April 2016
Committee membershipAudit Committee and Nomination Committee
Other current rolesChief Executive Officer of Experian plc
10
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jo Harlow Non-Executive Director
Skills and experienceJo brings a wealth of experience in consumer-facing businesses and in the telecoms and technology industry bothin the UK and internationally Jo spent 12 years in a variety of senior management roles with Nokia and Microsoft Prior to this she spent eight years at PampG and 11 years at Reebok in senior sales and marketing positions in both Europe and the US
Date of appointment 11 September 2017
Committee membershipChair of the Corporate Responsibility and Sustainability Committee and member of the Nomination Committee and Remuneration Committee
Life PresidentLord Sainsbury of Preston Candover KG
Other current rolesNon-Executive Director of InterContinental Hotels plc Non-Executive Director of Halmaplc and Member of the Supervisory Board of Ceconomy AG
11
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief Executive
Tim FallowfieldCompany Secretary amp Corporate Services Director
Kevin OrsquoByrne Chief Financial Officer
Jim BrownChief Executive Officer of Sainsburyrsquos Bank
Paul Mills-HicksFood Commercial Director
Angie RisleyGroup HR Director
Phil JordanGroup Chief InformationOfficer
Simon RobertsRetail and Operations Director
Clo MoriartyGroup Chief Digital Officer
12
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief ExecutiveSee Appendix page 9
Kevin OrsquoByrneChief Financial OfficerSee Appendix page 9
Tim FallowfieldCompany Secretary amp Corporate Services Director
Date of appointment September 2004
Skills and experienceTim joined Sainsburyrsquos in 2001 as Company Secretary and joined the Operating Board in September 2004 In addition to his role as Company Secretary Tim is responsible for the Corporate Services Division comprising Legal Services Data Governance Safety Shareholder Services Insurance and Central Security He chairs the Group Safety Committee and the Data Governance Committee Tim joined Sainsburyrsquos from Exelplc the global logistics company now part of DHL where he was Company Secretary and General Counsel He began his career at the international law firm Clifford Chance and is a qualified solicitor Tim is Chairman of the Disability Confident Business Leaders Group which works with Government in shaping the disability employment agenda and in raising awareness of the benefits of employing disabled people
Jim BrownCEO of Sainsburyrsquos Bank
Skills and experienceJim joined Sainsburyrsquos Bank as CEO in June 2019 and is also a member of the Sainsburyrsquos Group Operating Board He has held a number of senior international Financial Services roles - most recently for RBS in the UK as CEO of Williams and Glyn and prior to that CEO of Ulster Bank in Northern Ireland and the Republic of Ireland Before moving to Ireland he was based in Hong Kong and was CEO Retail and Commercial Banking Asia and the Middle East for RBS and ABN AMRO He has also been a member of the RBS Group Management Committee ABN AMRO Executive Group ABN AMRO Global Consumer Leadership Team and the RBSBank of China Joint Steering Committee Earlier in his career he held a number of senior executive roles for Citibank in Asia and Australia and New Zealand Jim has also held various Board positions including at Ulster Bank Saudi Hollandi Bank The Royal Bank of Scotland (China) Co Ltd and RBS (Pakistan) Ltd He is also a past President of the Institute of Banking in Ireland He is currently a Certified Bank Director
Date of appointment August 2019
Paul Mills-HicksFood Commercial Director
Skills and experiencePaul joined the Operating Board in May 2014 as Food Commercial Director having spent over ten years at Sainsburyrsquos He was closely involved in the formation and execution of the lsquoMaking Sainsburyrsquos Great Againrsquo strategy Following this he held a variety of roles in commercial strategy and finance most recently as Business Unit Director for Grocery Prior to Sainsburyrsquos Paul was European Controller at Marks and Spencer Group PLC and a Director at UBS Warburg
Date of appointment May 2014
13
APPENDIX Interim Results 201920 - November 2019
Operating Board
Angie RisleyGroup HR Director
Skills and experienceAngie was appointed Group HR Director and a member of the Operating Board in January 2013 with responsibility for human resources Angie is also a Director of Sainsburyrsquos Bank plc Angie was most recently Non-Executive Director and Chairman of the Remuneration Committee of Serco plc and prior to this was Group HR Director of Lloyds Banking Group and an Executive Director of Whitbread PLC with responsibility for HR and Corporate Social Responsibility Angie is currently Non-Executive Director and Chair of the Remuneration Committee at Smith amp Nephew plc
Date of appointment January 2013
Phil JordanGroup Chief Information Officer
Skills and experiencePhil joined the Board in January 2018 and has brought a fresh globalperspective on technology to the Operating Board in addition to a wealth of experience in digital data and business transformation Prior to joining Sainsburyrsquos Phil had a long and successful track record in telecommunications Most recently he was Global Chief Information Officer at Telefonica overseeing Digital Transformation and Information Technology and prior to that was Chief Information Officer for Vodafone UKIreland Phil has worked as a Non-Executive Advisor on Technology in the Investment amp Retail Banking sector and is currently a Non-Executive Director of TalkTalk Telecom Group PLC and chairs its Cyber-Security Committee
Date of appointment January 2018
Simon RobertsRetail and Operations Director
Skills and experienceSimon joined Sainsburyrsquos and the Operating Board in July 2017 as Central Retail amp Operations Director responsible for Stores Central operation and Logistics In his previous role he was Executive Vice President of Walgreens Boots Alliance and President of Boots with responsibility for commercial and retail operations across the UK and Ireland Prior to Boots Simon was at Marks and Spencer Group PLC where he held operational and customer leadership roles across stores divisions and central operations Simon is also the Non-Executive Chairman at the Institute ofCustomer Service
Date of appointment July 2017
Clodagh MoriartyGroup Chief Digital Officer
Skills and experienceClodagh was appointed Group Chief Digital Officer in June 2018 Clodagh leads the delivery of a consistent and first-rate digital experience for customers across Sainsburyrsquos Argos and Sainsburyrsquos BankClodagh joined Sainsburyrsquos in 2010 from Bain amp Co management consultants where she had gained experience working on a broad range of projects across multiple sectors and countries Following two years as Head of Strategy at Sainsburyrsquosshe moved into Food Commercial as Category Manager for Meal Solutions and then became Head of Online Trading spanning Food General Merchandise and Clothing before being promoted to Director of Online in 2016 In this role Clodagh was instrumental in driving innovation within Groceries Online and launching new initiatives including SmartShop and Chop Chop
Date of appointment June 2018
14
APPENDIX Interim Results 201920 - November 2019
Supplementary financial details
3 Financial calendarQ3 trading statement(15 weeks to 4 January 2020)
Preliminary results(52 weeks to 7 March 2020)
8 January 2020
30 April 2020
1 Weighted average number of shares
The interim dividend datesOrdinary shares
Ex-dividend 14 November 2019Record 15 November 2019Payment 20 December 2019
expected to be cpound45m including a cpound10m benefit as a result of a change in transfer pricing between Argos and Argos Financial Services
Financial Services non-underlying costs are expected to be around pound30m
No further capital injections into the Bank are expected following pound35m in H1 201920
08 0814 1917
19
3029
Personal loansCredit cardsMortgagesStorecards
FY 201819
7470
HY 201920
Customer assets (poundbn)
7 Total capital risk-weighted assets
8 Interim Results 201920 - November 2019
ChangeH1
201920H1
201819poundm
Financial services
Metrics inc AFS1
3100 bps40 bps
316663
Total Financial Services UPBTCostincome ratioROCE2
306759
1 H1 201819 restated for IFRS 162 Calculated on a post-tax basis Comparative reflects the 52 weeks to 9th March 2019 as the 52 weeks to 22 September 2018 cannot be calculated on a consistent basis due to changes in accounting standards
result of items excluded from underlying results should not exceed pound100m
Property strategy programme one-off costs expected to be pound230m-pound270m (of which pound30m-pound40m cash)
Sainsburyrsquos Bank Financial Services non-
underlying costs are expected to be around pound30m
201920 FY Guidance
10 Interim Results 201920 - November 2019
Retail capital expenditure
H1201920
H1201819
Core retail capital expenditureArgos integration capexRetail capital expenditure
248 -
248
24331
274
poundm Retail capital expenditure to
be around pound550m
Retail capital expenditure is expected to be around pound550m-pound600m per annum over the medium term
201920 FY Guidance
Core retail capital expenditure
MaintenanceGrowthEfficiency
pound243m201819
pound248m201920
11 Interim Results 201920 - November 2019
Pensions
Outcome
bull 2018 triennial valuation deficit down to pound538m from pound1055m in 2015
bull Greater asset-backed security for the Scheme
bull Immediate cash payments reduced
bull Reduced risk of over funding and trapped cash
Agreed long term sustainable and flexible funding plan
Annual cash contribution reduces by cpound50m
Annual cash commitment
under old plan
201920 202021 202122 202223
124
48
98
7669
12 Interim Results 201920 - November 2019
Retail free cash flow
2 Interest paid net of interest received interest elements of obligations under finance lease payments and dividends paid on perpetual securities
3 Excludes Argos integration capital expenditure
1 Operating cash flow before changes in working capital and pension contributions
4 Other non-cash includes new leases and lease modifications and fair value movements on derivatives linked to borrowings
Adjusted operating cash flow before changes in working capital1
Decrease in working capital
Pension contribution net interest paid2 corporation tax paidNet cash generated from operating activitiesCash capital expenditure before strategic capex3
Proceeds from disposal of property plant and equipmentRepayments of lease obligations and right-of-use assets direct costsBank capital injectionsDividends and distributions received from JVs net of capital injectionsRetail free cash flowDividends paid on ordinary sharesArgos integration capital expenditure
Repayment of borrowings other non-cash and net interest movements4
Movement in net debt5
Opening net debt including perpetual securities as debtClosing net debt including perpetual securities as debt
Of whichLease LiabilitiesNet Debt excluding Lease Liabilities
poundm ndash Restated for IFRS 161029
296
(279)1046
(243)34
(231)-11
617 (156)
(31)
-
430(7575)(7145)
(5873)(1272)
H1 201819Restated
H1 201920
1034 289
(282)1041 (248)
54 (232)
(35)118
698 (174)
-
44
568(7346)(6778)
(5770)(1008)
201920 FY Guidance
5 Net debt definition now excludes derivatives not linked to borrowings and includes perpetual securities as debt
Capital injections into the Bank are expected to be pound35m
Proceeds from disposal of property are expected to be in line with 201819
Expect underlying retail depreciation and amortisation of around pound12bn including cpound500m right of use asset depreciation
Net debt before fair value movements on derivatives to reduce by at least pound300m
Net finance costs of around pound405m including pound320m lease interest in 201920 following the introduction of IFRS 16
13 Interim Results 201920 - November 2019
1 Net debt definition now excludes derivatives not linked to borrowings and includes perpetual securities as debt2 Net debt (inc perpetual securities) on a post-IFRS 16 basis divided by Group underlying EBITDAR We previously disclosed
adjusted Net debt EBITDAR but net debt on a post-IFRS 16 basis now includes lease liabilities3 FY1819 Net Debt exc Leases of pound1522m compares to the previously reported Net Debt of pound1636m less pound(122)m of finance leases plus pound8m other (predominantly derivatives no longer reported within net debt)
Balance sheet targets
bull Net debt reduction of at least pound750m over the next three years
bull Medium leverage reduction targets- Net debtEBITDAR2 less than 3x
bull Dividend policy changed to 19x underlying eps cover versus 20x
- Adjusting for the impact of IFRS 16
FY1819
Net debt exc Lease liabilities1 (poundm)
FY1516
2125
15223
FY2122
(750)
Target
c800
H1201920
FY201819
Net DebtOf which lease liabilitiesNet Debt exc leases1
(6778) (5770) (1008)
(7346) (5824) (1522)3
poundm
(603)
14 Interim Results 201920 - November 2019
Summary and Outlook
bull Grocery sales improving relative to the market
bull General Merchandise and Clothing outperforming a difficult market
Sainsburyrsquos Meat Fish amp Poultry Value Own Label1
Gains
Losses
Incremental Switching within Sainsburyrsquos
Dec 17 Oct 19
+2Sales
+4Volume
Bread Investing across Own Label Tiers120+ EPP SKUs launched in H1 200 by end 201920
Repackaged and NPD within Premium
New Owned Brand Replacing Basics
NPD within Core+ Responding in Growth Areas
Repackaged Core bySainsburyrsquos
New
New
Improved
Improved
1 Kantar 12 we 6 October 2019 ndash rolling 12 weeks switching within total Market MFP
21 Interim Results 201920 - November 2019
Be competitive
on price
1
Lower prices on key volume lines
In-Store Volume Returns Examples
Chicken Wings 1kg+12 Volume
pound170was pound210
pound050Only
White Pittas x6+15 Volume
Chestnut Mushrooms 250g+45 Volume
pound080Only
1 Pre wave 3 lockdown (started 24th March to 15th June 19) YoY 2 Last 6 weeks since wave 4 lockdown (started 28th August 19) YoY
-4
0
4
8
12
16
-6 -5 -4 -3 -2 -1 0 1 2 3 4 5 6
Change in volumes ()
Pre1 Post2
22 Interim Results 201920 - November 2019
Be competitive
on price
1
We continue to be less dependent on promotions
230 228
207 209
Sainsburyrsquos Promotional Participation
1819 1920 19201819
Morrisons
Sainsburyrsquos
Tesco
Asda
Spend on Deal1
Q1 Q2
1 Source Nielsen 4 weekly data to 21 September 2019
10
20
30
4040
30
20
10Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep
2018 2019
H1 1920
H1 1920 AVERAGE
34 31
22 21
23 Interim Results 201920 - November 2019
Be competitive
on price
1
Improved grocery value
Base Price Index 2
-1
0
1
2
3
Grocery inflation (Kantar)1
-960bps
-550bps
Commodity VI 2
Aug 17 Jan 18 Jun 18 Nov 18 Apr 19 Oct 19
2004 2007 2010 2013 2016 2019
Morrisons
Sainsburyrsquos
Tesco
Asda
Total Market
Mar Apr May Jun Jul Aug Sep Oct2019
1 Kantar City Reads to Oct 20192 Sainsburyrsquos value index based on Brandview SKU matching data to Oct 2019
24 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
25 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Category tier performance
YoY value share change by tier
12 weeks to September 2019
-03
01
-01
-18
52 weeks to March 2019
Branded
PremiumOwn Brand
Branded
StandardOwn Brand
EconomyOwn Brand
02
-08
-04
00PremiumOwn Brand
StandardOwn Brand
EconomyOwn Brand
Source Nielsen Panel Total FMCG Market Universe Total outlets 52wks data to 9 March 2019 and 12wks data to 21 Sept 2019
26 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Premium private label
Taste the Difference re-launch
bull Over 350 products new repackaged or reformulated
bull Premium ready meals growth now outperforming the market
41
25 2419
Sainsburys Morrisons Tesco Asda
Premium Own Label volume share
Source Nielsen Panel Total FMCG 28 weeks data to 21 September 2019 Premium Own Label share of sales by retailer
27 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Distinctive brands
bull 57 of customers have bought Distinctive Brands since launch
bull On track for pound100m incremental sales
bull 37 new brands in H1 across Fresh and Grocery
bull lsquoTaste of the Futurersquo bays launched in 70 stores- 67 incremental sales
Leon
bull 3 year exclusive partnership
bull 14 products launched
28 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Beauty Rollout
bull Now rolled out to over 60 stores- Sales up over 40
bull Customer numbers up 7
bull Spend per customer up 25
bull Beauty range doubled 1200 additional lines
bull Double digit growth differential against the market
29 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Our values make us different
bull Committed to reduce plastic packaging by 50 by 2025
bull First retailer to remove single use plastic produce and bakery bags from our stores
- Launching reusable bags in fruit and veg aisles
bull Investing in our loose produce offer
bull Removed black plastic trays from ready meals
bull Fresh water stands in cafeacutes for customers to refill bottles
UKrsquos first major retailer to make significant commitment to reduce plastic
30 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Argos category and range focus
bull Availability improvement- Argos master range reduced by c30 over 3 years- Eliminating duplication removing low value items- Better availability of key lines in store
bull Rebalancing into higher margin categories- Gaining share in Furniture1
More distinctive rangemore reason to shop at Sainsburyrsquos
Reduced SKU count -20operational efficiencies
Higher cash gross profit +2 YOY
Volumes +8 operational efficiencies
41 Interim Results 201920 - November 2019
Drive efficiency
to invest in the customer
offer
4
BAU savings to offset cost inflation
Manages inflationary pressures
BAU savingsH1 201920
Procurement GNFR
Retail Technology Efficiencies
Retail HRRetail
management structures
Shrink Reduction
42 Interim Results 201920 - November 2019
Drive efficiency
to invest in the customer
offer
4
Strategic cost transformation 5 year plan
Converge Tackle fixed cost
End to end reviews
Retail Operations Marketing and Commercial Operations
Other central support
Logistics and Supply Chain
Project A
Project C
Project D
Shared Services BPO
Property strategy
Project BGNFR procurement
Capital prioritisation
Technology Digital and Corporate Services
pound250-pound350m
pound150-pound250m
pound400-pound600mExecution underway In planning Opportunities identified
pound5bn addressable cost base
43 Interim Results 201920 - November 2019
Grow connected
services
5
44 Interim Results 201920 - November 2019
Grow connected
services
5
Financial Services Priorities
To be the provider of financial services for loyal Sainsburyrsquos and Argos customers
An agile capital and cost efficient provider of simple mobile-led financial services
Vision
Objective
Priorities Reshape Simplify Strengthen
45 Interim Results 201920 - November 2019
Grow connected
services
5
Current Customer Base
Customer Credit Risk Balance Sheet Earnings
Argos Storecards 22m Prime Near Prime
Credit Cards 09m Prime
Personal Loans 05m Prime
Mortgages 9K Exit
Total Lending
Deposits 03m
Insurances 05m Very Low Risk
Travel Money 266 Sites
ATMs 1890
Financial Services reshaping the portfolio
46 Interim Results 201920 - November 2019
Grow connected
services
5
Increase connectivity and value for Group
Stop mortgage acquisition review back book options
No capital input from the Group from now1
Costincome c503 within 5 years
Double UPBT double digit ROCE within 5 years
Upstream cash within 5 years2
Financial Services key targets
Transform the cost base
Improve returns
Financial services cash generative
Reduce risk profile to Group
Stop putting cash in to Financial Services
2
4
6
3
1
5
Focus on Sainsburyrsquos customer base
1 Subject to regulatory changes requirements2 Subject to regulatory approval3 On a Group contribution basis
47 Interim Results 201920 - November 2019
Grow connected
services
5
Nectar
bull Biggest loyalty programme in the UK
bull Over 18 million collectors
bull Most recognised loyalty brand in the UK
bull Launch of Nectar digital- 21 million app users- Increase in overall Nectar participation- Increased levels of personalisation- 138000 new Nectar customers- 1 app on launch weekend
bull Coalition strengthened with addition of Esso in June 2019
48 Interim Results 201920 - November 2019
Provide a seamless customer
experience
6
49 Interim Results 201920 - November 2019
Provide a seamless customer
experience
6
Digital
bull Groceries Online sales penetration of 8- App accounts for over 20 of orders
bull 21 million digital Nectar app users
bull 14 million Argos Financial Services app downloads
bull Smartshop rollout in over 350 stores
Groceries online
Chop Chop
SmartShop
Universaldiscovery
Seamlessfinancialservices
Singlebasket
50 Interim Results 201920 - November 2019
We will help our customers live well for less
Confident in the core Integrated customer offer
One multi brand multi channel business
Strong cash generation supporting investment dividend and allowing deleverage
Financial flexibility and resilience
Sustainable cost reduction covering cost inflation and funding investment in our competitive offer
QampA
APPENDIX Interim Results 201920 - November 2019
Appendices
APPENDIX Interim Results 201920 - November 2019
Guidance for 201920
1
Spacebull Expect to open 2 new Sainsburyrsquos supermarkets and up to 15 convenience storesbull Expect to open around 25 Argos stores in Sainsburyrsquos (of which 11 are
relocations) resulting in around 305 Argos stores in supermarketsbull Expect to close 2 supermarkets around 25 convenience stores and around 20
Argos stores in FY201920 as part of announced property closure programme of 10-15 supermarkets 30-40 convenience stores and 60-70 Argos stores
Financial Servicesbull Financial services underlying operating profit expected to be cpound45m including a
cpound10m benefit as a result of a change in transfer pricing between Argos and Argos Financial Services
bull Financial Services non-underlying costs are expected to be around pound30mbull No further capital injections into the Bank are expected following pound35m in H1 201920
Depreciation and amortisationbull Expect underlying retail depreciation and amortisation of around pound12bn
including cpound500m right of use asset depreciation
CostsOperating cost inflationbull Cost inflation between 2 and 3Cost savingsbull Continue to deliver cost savings to at least offset the impact of cost inflation
Finance costsbull Net finance costs of around pound405m including pound320m lease interest in
201920 following the introduction of IFRS 16
One-off itemsbull In 201920 cash outflows as a result of items excluded from
underlying results should not exceed pound100mbull Property strategy programme one-off costs expected to be
pound230m-pound270m of which cash costs are pound30-40m
Dividendbull Sainsburyrsquos plans to change the full year dividend policy to 19x cover by
underlying earnings (versus 20x previously) to offset the dilutive (non cash) impact of IFRS 16 on underlying earnings
Capital expenditurebull Retail capital expenditure to be around pound550mbull Retail capital expenditure is expected to be around pound550m-pound600m per
annum over the medium term
Net debtbull Net debt before fair value movements on derivatives to reduce by at
least pound300m
Tax ratebull Underlying tax rate to be between 25 and 26
APPENDIX Interim Results 201920 - November 2019
Retail sales
1 Sales including VAT excluding fuel
LFL sales growth1
(10)
Sales from net new space1
04
Total sales growth1
(06)
Supermarkets2
(07)
Convenience20
Groceries Online
70
Channels
(01)(25)
(12)
2 Supermarket sales include Argos SiS sales FY 1819 16
pound139bn
pound103bnGrocery
pound30bnGeneralMerchandise
pound488mClothing
2
Chart1
201819
194
66
1
Sheet1
APPENDIX Interim Results 201920 - November 2019
Sainsburyrsquos sales area and store numbersAs at 21 September 2019
Sainsburyrsquos store estateAs at 21 September 2019
Sq ftsales area
82446
870
40001 to60000
20001 to40000
10000 to20000
Under10000 Total
Over60000
0122122
0197197
0175175
06767
824607
1431
Argos storesArgos in SainsburyrsquosArgos in HomebaseOtherArgos total store numbers
Habitat1
Collection points
594281
8-
883
16317
As at21 Sept 2019
Disposalsclosures
Newstores
As at9 March 2019
17--8
-1
(7)-
(2)-
(9)
-(36)
588288
6-
88216
282
ConvenienceSupermarketsTotal stores
Number of stores
Sq ftsales area
1929350
2279
40001 to60000
20001 to40000
10000 to20000
Under10000 Total
Over60000
-18441844
-58185818
-85018501
-46604660
19292117323102
ConvenienceSupermarketsTotal stores
Space by store size (lsquo000 sq ft)
Argos and Habitat store numbers
1 5 Habitat stores 11 Habitat stores in Sainsburys
4
APPENDIX Interim Results 201920 - November 2019
ClosureBitterne West
Sainsburyrsquos investment programme201920
Q1
Supermarkets ConvenienceNew storesMilton Keynes Brooklands District CentBromley High StLeeds Wike Ridge LaneSalford Harbour CityCanterbury High St
ReplacementMayfair Stratton St
ClosuresMayfairWarren St
Q1Q1Q1Q2Q2
Q2
Q1Q2
5
APPENDIX Interim Results 201920 - November 2019
Retail margin
Retail sales (inc VAT inc fuel)(exc VAT inc fuel)
Retail underlying EBITDAR1
Retail underlying EBITDAR margin 2
at constant fuel pricesRetail underlying operating profit3
Retail underlying operating margin 4
at constant fuel prices
1656714808
10677272
4373030
1661214856
11147575
4873333
030342
30 bps28 bps10333 bps32 bps
1 Retail underlying operating profit before net rental income of pound6 million and underlying depreciation and amortisation of pound636 million2 Retail underlying EBITDAR divided by underlying retail sales excluding VAT3 Retail underlying earnings before interest tax and Sainsburyrsquos underlying share of post-tax profit from joint ventures4 Retail underlying operating profit divided by underlying retail sales excluding VAT
poundm H1201920
H1201819
Change
6
APPENDIX Interim Results 201920 - November 2019
H1201920
H1201819
Group retail
Return on capital employed 1
Net debt to EBITDAR (times)23
Fixed charge cover (times)2
Underlying tax rate Core retail capex sales5
713126
26515
743326
25715
poundm
1 ROCE Return is defined as a 52 week rolling underlying profit before interest and tax Capital employed is defined as group net assets2 Net debt of pound6778 million includes lease obligations under IFRS 16 and perpetual securities treated as debt divided by Group underlying EBITDAR of pound2171 million calculated for a 52-week period to 21 September 20193 Group underlying EBITDAR divided by rent (both capital and interest) and net finance costs where interest on perpetual securities is treated as an underlying finance costs4 52 weeks to 22nd September 2018 is not available due to the implementation of IFRS 16 Comparatives therefore reflect the 52 weeks to 9th March 20195 Includes retail sales inc vat inc fuel
4
4
7
APPENDIX Interim Results 201920 - November 2019
Plc Board
Kevin OrsquoByrneChief Financial Officer
Mike Coupe Group Chief Executive
Dame Susan Rice Senior Independent Director
Matt BrittinNon-Executive Director
Jo HarlowNon-Executive Director
Brian CassinNon-Executive Director
David KeensNon-Executive Director
Jean Tomlin Non-Executive Director
Martin Scicluna Chairman
8
APPENDIX Interim Results 201920 - November 2019
Plc Board
Mike Coupe Group Chief Executive Officer
Skills and experienceAppointed Group Chief Executive Officer on 9 July 2014 Mike has been a member of the Operating Board since October 2004 Mike has vast retail industry experience in trading strategy marketing digital and online as well as multi-site store experience He joined Sainsburyrsquos from Big Food Group where he was a board director of Big Food Group PLC and Managing Director of Iceland Food Stores He previously worked for both Asda and Tesco PLC where he served in a variety of senior management roles
Date of appointment 1 August 2007Mike has served as an Executive Director since 1 August 2007 and as Chief Executive Officer since 9 July 2014
Committee membershipCorporate Responsibility and Sustainability Committee
Kevin OrsquoByrne Chief Financial Officer
Skills and experienceKevin brings to the Board a wealth of retail and finance experience Kevin was previously Chief Executive Officer of Poundland Group Limited until December 2016 and held executive roles at Kingfisher plc from 2008 to 2015 including Divisional Director UK China and Turkey Chief Executive Officer of BampQ UK amp Ireland and Group Finance Director He was previously Group Finance Director of Dixons Retail plc and European Finance Director of Quaker Oats He was a Non-Executive Director of Land Securities Group PLC from 2008 to September 2017 where he was Chairman of the Audit Committee and Senior Independent Director
Date of appointment 9 January 2017
Other current rolesNon-Executive Director of Greene King plc
Skills and experienceMartin brings a breadth of experience and leadership in both executive and non-executive roles His previous roles include positions as the Chairman of Great Portland Estates plc Senior Independent Director and Chair of the Audit Committee of Worldpay Inc and Non-Executive Director and Chair of the Audit Committee of Lloyds Banking Group plc He was a partner at Deloitte LLP for 26 years serving as Chairman from 1995 to 2007 where his clients included Dixons WH Smith Alliance Unichem and Cadburyrsquos
Other current rolesChairman of RSA Insurance Group plc
Martin Scicluna Chairman
Date of appointment 1 November 2018 Martin joined the Board as Chairman Designate and Non-Executive Director on 1 November 2018 He was appointed as Chairman of the Board on 10 March 2019
Committee membershipChair of the Nomination Committee
Dame Susan Rice Senior Independent Director
Skills and experienceSusan has extensive experience as a Non-Executive Director as well as in retail banking financial services leadership and sustainability Her career in retail bankingis particularly relevant to our ownership ofSainsburyrsquos Bank Previously Susan was a member of the First Ministerrsquos Council of Economic Advisors Managing Director of Lloyds Banking Group Scotland and was previously Chief Executive and then Chairman of Lloyds TSB Scotland plc She has also held a range of other non-executive directorships including at the Bank of England and SSE plc
Committee membershipChair of the Remuneration Committee and a member of the Nomination Committee
Date of appointment 1 June 2013
Other current rolesChair of Scottish Water and Business Stream Chair of the Scottish Fiscal Commission Non-Executive Director of the North American Income Trust C Hoare and Co and Senior Independent Director of the North American Income Trust
9
Other current rolesNon-Executive Director and Chairman of the Audit Committee of Centrica plc
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jean Tomlin Non-Executive Director
Skills and experienceJean has extensive experience and breadth of skills in human resources and corporate responsibility Jean was formerly Director of HR Workforce and Accreditation for The London OrganisingCommittee of the Olympic and Paralympic Games where she set the strategic direction to ensure the mobilisation of the combined 200000-strong workforce including paid staff volunteers and contractors which represented the recruitment and mobilisation of the largest peacetime workforce and set the industry standard for volunteering with the highly acclaimed Games She was previously Group HR Director at Marks and Spencer Group Plc HR Director and founder member of Egg plc and Sales amp Operations Director of Prudential Direct
Date of appointment 1 January 2013
Committee membershipAudit Committee Corporate Responsibility and Sustainability Committee and Nomination Committee
David Keens Non-Executive Director
Skills and experienceDavid has extensive retail experience and knowledge of consumer facing businesses together with his core skills in finance David was formerly Group Finance Director of next plc from 1991 to 2015 and their Group Treasurer from 1986 to 1991 Previous management experience includes nine years in the UK and overseas operations of multinational food manufacturer Nabisco and prior to that seven years in the accountancy profession
Date of appointment 29 April 2015
Committee membershipChair of the Audit Committee and a member of the Nomination Committee
Other current rolesIndependent Board member of Capri Holdings Limited Non-Executive Director of Hakluyt and Chief Executive Officer of Chanzo Limited
Other current rolesNon-Executive Director Senior Independent Director and Chair of the Audit Committee of Auto Trader Group plc
Matt BrittinNon-Executive Director
Skills and experienceMatt has extensive experience of running a high profile fast moving innovative digital business Since 2015 he has been responsible for Googlersquos business and operations in Europe the Middle East and Africa and hersquos been in leadership roles at Google since 2007 Prior to that Matt spent much of his career in media and marketing with particular interests in strategy commercial development and sales performance This included commercial and digital leadership roles in UK media
Date of appointment 27 January 2011
Committee membershipNomination Committee and Remuneration Committee
Other current rolesGooglersquos President ndash Europe Middle East and Africa and Director of The Media Trust
Brian Cassin Non-Executive Director
Skills and experienceBrian brings present day experience of running a FTSE40 group and of big data and analytics ndash topics of key importance to Sainsburyrsquos Brian joined Experian plc as Chief Financial Officer in April 2012 a post he held until his appointment as Chief Executive Officer in July 2014 Prior to this Brian spent his career in investment banking at Greenhill amp Co where he was Managing Director and Partner Brian has also held various roles at Baring Brothers International and at the London Stock Exchange
Date of appointment 1 April 2016
Committee membershipAudit Committee and Nomination Committee
Other current rolesChief Executive Officer of Experian plc
10
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jo Harlow Non-Executive Director
Skills and experienceJo brings a wealth of experience in consumer-facing businesses and in the telecoms and technology industry bothin the UK and internationally Jo spent 12 years in a variety of senior management roles with Nokia and Microsoft Prior to this she spent eight years at PampG and 11 years at Reebok in senior sales and marketing positions in both Europe and the US
Date of appointment 11 September 2017
Committee membershipChair of the Corporate Responsibility and Sustainability Committee and member of the Nomination Committee and Remuneration Committee
Life PresidentLord Sainsbury of Preston Candover KG
Other current rolesNon-Executive Director of InterContinental Hotels plc Non-Executive Director of Halmaplc and Member of the Supervisory Board of Ceconomy AG
11
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief Executive
Tim FallowfieldCompany Secretary amp Corporate Services Director
Kevin OrsquoByrne Chief Financial Officer
Jim BrownChief Executive Officer of Sainsburyrsquos Bank
Paul Mills-HicksFood Commercial Director
Angie RisleyGroup HR Director
Phil JordanGroup Chief InformationOfficer
Simon RobertsRetail and Operations Director
Clo MoriartyGroup Chief Digital Officer
12
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief ExecutiveSee Appendix page 9
Kevin OrsquoByrneChief Financial OfficerSee Appendix page 9
Tim FallowfieldCompany Secretary amp Corporate Services Director
Date of appointment September 2004
Skills and experienceTim joined Sainsburyrsquos in 2001 as Company Secretary and joined the Operating Board in September 2004 In addition to his role as Company Secretary Tim is responsible for the Corporate Services Division comprising Legal Services Data Governance Safety Shareholder Services Insurance and Central Security He chairs the Group Safety Committee and the Data Governance Committee Tim joined Sainsburyrsquos from Exelplc the global logistics company now part of DHL where he was Company Secretary and General Counsel He began his career at the international law firm Clifford Chance and is a qualified solicitor Tim is Chairman of the Disability Confident Business Leaders Group which works with Government in shaping the disability employment agenda and in raising awareness of the benefits of employing disabled people
Jim BrownCEO of Sainsburyrsquos Bank
Skills and experienceJim joined Sainsburyrsquos Bank as CEO in June 2019 and is also a member of the Sainsburyrsquos Group Operating Board He has held a number of senior international Financial Services roles - most recently for RBS in the UK as CEO of Williams and Glyn and prior to that CEO of Ulster Bank in Northern Ireland and the Republic of Ireland Before moving to Ireland he was based in Hong Kong and was CEO Retail and Commercial Banking Asia and the Middle East for RBS and ABN AMRO He has also been a member of the RBS Group Management Committee ABN AMRO Executive Group ABN AMRO Global Consumer Leadership Team and the RBSBank of China Joint Steering Committee Earlier in his career he held a number of senior executive roles for Citibank in Asia and Australia and New Zealand Jim has also held various Board positions including at Ulster Bank Saudi Hollandi Bank The Royal Bank of Scotland (China) Co Ltd and RBS (Pakistan) Ltd He is also a past President of the Institute of Banking in Ireland He is currently a Certified Bank Director
Date of appointment August 2019
Paul Mills-HicksFood Commercial Director
Skills and experiencePaul joined the Operating Board in May 2014 as Food Commercial Director having spent over ten years at Sainsburyrsquos He was closely involved in the formation and execution of the lsquoMaking Sainsburyrsquos Great Againrsquo strategy Following this he held a variety of roles in commercial strategy and finance most recently as Business Unit Director for Grocery Prior to Sainsburyrsquos Paul was European Controller at Marks and Spencer Group PLC and a Director at UBS Warburg
Date of appointment May 2014
13
APPENDIX Interim Results 201920 - November 2019
Operating Board
Angie RisleyGroup HR Director
Skills and experienceAngie was appointed Group HR Director and a member of the Operating Board in January 2013 with responsibility for human resources Angie is also a Director of Sainsburyrsquos Bank plc Angie was most recently Non-Executive Director and Chairman of the Remuneration Committee of Serco plc and prior to this was Group HR Director of Lloyds Banking Group and an Executive Director of Whitbread PLC with responsibility for HR and Corporate Social Responsibility Angie is currently Non-Executive Director and Chair of the Remuneration Committee at Smith amp Nephew plc
Date of appointment January 2013
Phil JordanGroup Chief Information Officer
Skills and experiencePhil joined the Board in January 2018 and has brought a fresh globalperspective on technology to the Operating Board in addition to a wealth of experience in digital data and business transformation Prior to joining Sainsburyrsquos Phil had a long and successful track record in telecommunications Most recently he was Global Chief Information Officer at Telefonica overseeing Digital Transformation and Information Technology and prior to that was Chief Information Officer for Vodafone UKIreland Phil has worked as a Non-Executive Advisor on Technology in the Investment amp Retail Banking sector and is currently a Non-Executive Director of TalkTalk Telecom Group PLC and chairs its Cyber-Security Committee
Date of appointment January 2018
Simon RobertsRetail and Operations Director
Skills and experienceSimon joined Sainsburyrsquos and the Operating Board in July 2017 as Central Retail amp Operations Director responsible for Stores Central operation and Logistics In his previous role he was Executive Vice President of Walgreens Boots Alliance and President of Boots with responsibility for commercial and retail operations across the UK and Ireland Prior to Boots Simon was at Marks and Spencer Group PLC where he held operational and customer leadership roles across stores divisions and central operations Simon is also the Non-Executive Chairman at the Institute ofCustomer Service
Date of appointment July 2017
Clodagh MoriartyGroup Chief Digital Officer
Skills and experienceClodagh was appointed Group Chief Digital Officer in June 2018 Clodagh leads the delivery of a consistent and first-rate digital experience for customers across Sainsburyrsquos Argos and Sainsburyrsquos BankClodagh joined Sainsburyrsquos in 2010 from Bain amp Co management consultants where she had gained experience working on a broad range of projects across multiple sectors and countries Following two years as Head of Strategy at Sainsburyrsquosshe moved into Food Commercial as Category Manager for Meal Solutions and then became Head of Online Trading spanning Food General Merchandise and Clothing before being promoted to Director of Online in 2016 In this role Clodagh was instrumental in driving innovation within Groceries Online and launching new initiatives including SmartShop and Chop Chop
Date of appointment June 2018
14
APPENDIX Interim Results 201920 - November 2019
Supplementary financial details
3 Financial calendarQ3 trading statement(15 weeks to 4 January 2020)
Preliminary results(52 weeks to 7 March 2020)
8 January 2020
30 April 2020
1 Weighted average number of shares
The interim dividend datesOrdinary shares
Ex-dividend 14 November 2019Record 15 November 2019Payment 20 December 2019
Product Quality Framework helps us fund investment
PQF cereals case study
BAU savings to offset cost inflation
Strategic cost transformation 5 year plan
Slide Number 43
Financial Services Priorities
Financial Services reshaping the portfolio
Financial Services key targets
Nectar
Slide Number 48
Digital
We will help our customers live well for less
Slide Number 51
Slide Number 52
Guidance for 201920
Retail sales
Sainsburyrsquos sales area and store numbers
Sainsburyrsquos store estate
Sainsburyrsquos investment programme
Retail margin
Group retail
Plc Board
Plc Board
Plc Board
Plc Board
Operating Board
Operating Board
Operating Board
Supplementary financial details
Contacts
Column1
201819
Grocery
19
GM
7
Clothing
1
To resize chart data range drag lower right corner of range
Grocery
GM
Clothing
8 Interim Results 201920 - November 2019
ChangeH1
201920H1
201819poundm
Financial services
Metrics inc AFS1
3100 bps40 bps
316663
Total Financial Services UPBTCostincome ratioROCE2
306759
1 H1 201819 restated for IFRS 162 Calculated on a post-tax basis Comparative reflects the 52 weeks to 9th March 2019 as the 52 weeks to 22 September 2018 cannot be calculated on a consistent basis due to changes in accounting standards
result of items excluded from underlying results should not exceed pound100m
Property strategy programme one-off costs expected to be pound230m-pound270m (of which pound30m-pound40m cash)
Sainsburyrsquos Bank Financial Services non-
underlying costs are expected to be around pound30m
201920 FY Guidance
10 Interim Results 201920 - November 2019
Retail capital expenditure
H1201920
H1201819
Core retail capital expenditureArgos integration capexRetail capital expenditure
248 -
248
24331
274
poundm Retail capital expenditure to
be around pound550m
Retail capital expenditure is expected to be around pound550m-pound600m per annum over the medium term
201920 FY Guidance
Core retail capital expenditure
MaintenanceGrowthEfficiency
pound243m201819
pound248m201920
11 Interim Results 201920 - November 2019
Pensions
Outcome
bull 2018 triennial valuation deficit down to pound538m from pound1055m in 2015
bull Greater asset-backed security for the Scheme
bull Immediate cash payments reduced
bull Reduced risk of over funding and trapped cash
Agreed long term sustainable and flexible funding plan
Annual cash contribution reduces by cpound50m
Annual cash commitment
under old plan
201920 202021 202122 202223
124
48
98
7669
12 Interim Results 201920 - November 2019
Retail free cash flow
2 Interest paid net of interest received interest elements of obligations under finance lease payments and dividends paid on perpetual securities
3 Excludes Argos integration capital expenditure
1 Operating cash flow before changes in working capital and pension contributions
4 Other non-cash includes new leases and lease modifications and fair value movements on derivatives linked to borrowings
Adjusted operating cash flow before changes in working capital1
Decrease in working capital
Pension contribution net interest paid2 corporation tax paidNet cash generated from operating activitiesCash capital expenditure before strategic capex3
Proceeds from disposal of property plant and equipmentRepayments of lease obligations and right-of-use assets direct costsBank capital injectionsDividends and distributions received from JVs net of capital injectionsRetail free cash flowDividends paid on ordinary sharesArgos integration capital expenditure
Repayment of borrowings other non-cash and net interest movements4
Movement in net debt5
Opening net debt including perpetual securities as debtClosing net debt including perpetual securities as debt
Of whichLease LiabilitiesNet Debt excluding Lease Liabilities
poundm ndash Restated for IFRS 161029
296
(279)1046
(243)34
(231)-11
617 (156)
(31)
-
430(7575)(7145)
(5873)(1272)
H1 201819Restated
H1 201920
1034 289
(282)1041 (248)
54 (232)
(35)118
698 (174)
-
44
568(7346)(6778)
(5770)(1008)
201920 FY Guidance
5 Net debt definition now excludes derivatives not linked to borrowings and includes perpetual securities as debt
Capital injections into the Bank are expected to be pound35m
Proceeds from disposal of property are expected to be in line with 201819
Expect underlying retail depreciation and amortisation of around pound12bn including cpound500m right of use asset depreciation
Net debt before fair value movements on derivatives to reduce by at least pound300m
Net finance costs of around pound405m including pound320m lease interest in 201920 following the introduction of IFRS 16
13 Interim Results 201920 - November 2019
1 Net debt definition now excludes derivatives not linked to borrowings and includes perpetual securities as debt2 Net debt (inc perpetual securities) on a post-IFRS 16 basis divided by Group underlying EBITDAR We previously disclosed
adjusted Net debt EBITDAR but net debt on a post-IFRS 16 basis now includes lease liabilities3 FY1819 Net Debt exc Leases of pound1522m compares to the previously reported Net Debt of pound1636m less pound(122)m of finance leases plus pound8m other (predominantly derivatives no longer reported within net debt)
Balance sheet targets
bull Net debt reduction of at least pound750m over the next three years
bull Medium leverage reduction targets- Net debtEBITDAR2 less than 3x
bull Dividend policy changed to 19x underlying eps cover versus 20x
- Adjusting for the impact of IFRS 16
FY1819
Net debt exc Lease liabilities1 (poundm)
FY1516
2125
15223
FY2122
(750)
Target
c800
H1201920
FY201819
Net DebtOf which lease liabilitiesNet Debt exc leases1
(6778) (5770) (1008)
(7346) (5824) (1522)3
poundm
(603)
14 Interim Results 201920 - November 2019
Summary and Outlook
bull Grocery sales improving relative to the market
bull General Merchandise and Clothing outperforming a difficult market
Sainsburyrsquos Meat Fish amp Poultry Value Own Label1
Gains
Losses
Incremental Switching within Sainsburyrsquos
Dec 17 Oct 19
+2Sales
+4Volume
Bread Investing across Own Label Tiers120+ EPP SKUs launched in H1 200 by end 201920
Repackaged and NPD within Premium
New Owned Brand Replacing Basics
NPD within Core+ Responding in Growth Areas
Repackaged Core bySainsburyrsquos
New
New
Improved
Improved
1 Kantar 12 we 6 October 2019 ndash rolling 12 weeks switching within total Market MFP
21 Interim Results 201920 - November 2019
Be competitive
on price
1
Lower prices on key volume lines
In-Store Volume Returns Examples
Chicken Wings 1kg+12 Volume
pound170was pound210
pound050Only
White Pittas x6+15 Volume
Chestnut Mushrooms 250g+45 Volume
pound080Only
1 Pre wave 3 lockdown (started 24th March to 15th June 19) YoY 2 Last 6 weeks since wave 4 lockdown (started 28th August 19) YoY
-4
0
4
8
12
16
-6 -5 -4 -3 -2 -1 0 1 2 3 4 5 6
Change in volumes ()
Pre1 Post2
22 Interim Results 201920 - November 2019
Be competitive
on price
1
We continue to be less dependent on promotions
230 228
207 209
Sainsburyrsquos Promotional Participation
1819 1920 19201819
Morrisons
Sainsburyrsquos
Tesco
Asda
Spend on Deal1
Q1 Q2
1 Source Nielsen 4 weekly data to 21 September 2019
10
20
30
4040
30
20
10Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep
2018 2019
H1 1920
H1 1920 AVERAGE
34 31
22 21
23 Interim Results 201920 - November 2019
Be competitive
on price
1
Improved grocery value
Base Price Index 2
-1
0
1
2
3
Grocery inflation (Kantar)1
-960bps
-550bps
Commodity VI 2
Aug 17 Jan 18 Jun 18 Nov 18 Apr 19 Oct 19
2004 2007 2010 2013 2016 2019
Morrisons
Sainsburyrsquos
Tesco
Asda
Total Market
Mar Apr May Jun Jul Aug Sep Oct2019
1 Kantar City Reads to Oct 20192 Sainsburyrsquos value index based on Brandview SKU matching data to Oct 2019
24 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
25 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Category tier performance
YoY value share change by tier
12 weeks to September 2019
-03
01
-01
-18
52 weeks to March 2019
Branded
PremiumOwn Brand
Branded
StandardOwn Brand
EconomyOwn Brand
02
-08
-04
00PremiumOwn Brand
StandardOwn Brand
EconomyOwn Brand
Source Nielsen Panel Total FMCG Market Universe Total outlets 52wks data to 9 March 2019 and 12wks data to 21 Sept 2019
26 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Premium private label
Taste the Difference re-launch
bull Over 350 products new repackaged or reformulated
bull Premium ready meals growth now outperforming the market
41
25 2419
Sainsburys Morrisons Tesco Asda
Premium Own Label volume share
Source Nielsen Panel Total FMCG 28 weeks data to 21 September 2019 Premium Own Label share of sales by retailer
27 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Distinctive brands
bull 57 of customers have bought Distinctive Brands since launch
bull On track for pound100m incremental sales
bull 37 new brands in H1 across Fresh and Grocery
bull lsquoTaste of the Futurersquo bays launched in 70 stores- 67 incremental sales
Leon
bull 3 year exclusive partnership
bull 14 products launched
28 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Beauty Rollout
bull Now rolled out to over 60 stores- Sales up over 40
bull Customer numbers up 7
bull Spend per customer up 25
bull Beauty range doubled 1200 additional lines
bull Double digit growth differential against the market
29 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Our values make us different
bull Committed to reduce plastic packaging by 50 by 2025
bull First retailer to remove single use plastic produce and bakery bags from our stores
- Launching reusable bags in fruit and veg aisles
bull Investing in our loose produce offer
bull Removed black plastic trays from ready meals
bull Fresh water stands in cafeacutes for customers to refill bottles
UKrsquos first major retailer to make significant commitment to reduce plastic
30 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Argos category and range focus
bull Availability improvement- Argos master range reduced by c30 over 3 years- Eliminating duplication removing low value items- Better availability of key lines in store
bull Rebalancing into higher margin categories- Gaining share in Furniture1
More distinctive rangemore reason to shop at Sainsburyrsquos
Reduced SKU count -20operational efficiencies
Higher cash gross profit +2 YOY
Volumes +8 operational efficiencies
41 Interim Results 201920 - November 2019
Drive efficiency
to invest in the customer
offer
4
BAU savings to offset cost inflation
Manages inflationary pressures
BAU savingsH1 201920
Procurement GNFR
Retail Technology Efficiencies
Retail HRRetail
management structures
Shrink Reduction
42 Interim Results 201920 - November 2019
Drive efficiency
to invest in the customer
offer
4
Strategic cost transformation 5 year plan
Converge Tackle fixed cost
End to end reviews
Retail Operations Marketing and Commercial Operations
Other central support
Logistics and Supply Chain
Project A
Project C
Project D
Shared Services BPO
Property strategy
Project BGNFR procurement
Capital prioritisation
Technology Digital and Corporate Services
pound250-pound350m
pound150-pound250m
pound400-pound600mExecution underway In planning Opportunities identified
pound5bn addressable cost base
43 Interim Results 201920 - November 2019
Grow connected
services
5
44 Interim Results 201920 - November 2019
Grow connected
services
5
Financial Services Priorities
To be the provider of financial services for loyal Sainsburyrsquos and Argos customers
An agile capital and cost efficient provider of simple mobile-led financial services
Vision
Objective
Priorities Reshape Simplify Strengthen
45 Interim Results 201920 - November 2019
Grow connected
services
5
Current Customer Base
Customer Credit Risk Balance Sheet Earnings
Argos Storecards 22m Prime Near Prime
Credit Cards 09m Prime
Personal Loans 05m Prime
Mortgages 9K Exit
Total Lending
Deposits 03m
Insurances 05m Very Low Risk
Travel Money 266 Sites
ATMs 1890
Financial Services reshaping the portfolio
46 Interim Results 201920 - November 2019
Grow connected
services
5
Increase connectivity and value for Group
Stop mortgage acquisition review back book options
No capital input from the Group from now1
Costincome c503 within 5 years
Double UPBT double digit ROCE within 5 years
Upstream cash within 5 years2
Financial Services key targets
Transform the cost base
Improve returns
Financial services cash generative
Reduce risk profile to Group
Stop putting cash in to Financial Services
2
4
6
3
1
5
Focus on Sainsburyrsquos customer base
1 Subject to regulatory changes requirements2 Subject to regulatory approval3 On a Group contribution basis
47 Interim Results 201920 - November 2019
Grow connected
services
5
Nectar
bull Biggest loyalty programme in the UK
bull Over 18 million collectors
bull Most recognised loyalty brand in the UK
bull Launch of Nectar digital- 21 million app users- Increase in overall Nectar participation- Increased levels of personalisation- 138000 new Nectar customers- 1 app on launch weekend
bull Coalition strengthened with addition of Esso in June 2019
48 Interim Results 201920 - November 2019
Provide a seamless customer
experience
6
49 Interim Results 201920 - November 2019
Provide a seamless customer
experience
6
Digital
bull Groceries Online sales penetration of 8- App accounts for over 20 of orders
bull 21 million digital Nectar app users
bull 14 million Argos Financial Services app downloads
bull Smartshop rollout in over 350 stores
Groceries online
Chop Chop
SmartShop
Universaldiscovery
Seamlessfinancialservices
Singlebasket
50 Interim Results 201920 - November 2019
We will help our customers live well for less
Confident in the core Integrated customer offer
One multi brand multi channel business
Strong cash generation supporting investment dividend and allowing deleverage
Financial flexibility and resilience
Sustainable cost reduction covering cost inflation and funding investment in our competitive offer
QampA
APPENDIX Interim Results 201920 - November 2019
Appendices
APPENDIX Interim Results 201920 - November 2019
Guidance for 201920
1
Spacebull Expect to open 2 new Sainsburyrsquos supermarkets and up to 15 convenience storesbull Expect to open around 25 Argos stores in Sainsburyrsquos (of which 11 are
relocations) resulting in around 305 Argos stores in supermarketsbull Expect to close 2 supermarkets around 25 convenience stores and around 20
Argos stores in FY201920 as part of announced property closure programme of 10-15 supermarkets 30-40 convenience stores and 60-70 Argos stores
Financial Servicesbull Financial services underlying operating profit expected to be cpound45m including a
cpound10m benefit as a result of a change in transfer pricing between Argos and Argos Financial Services
bull Financial Services non-underlying costs are expected to be around pound30mbull No further capital injections into the Bank are expected following pound35m in H1 201920
Depreciation and amortisationbull Expect underlying retail depreciation and amortisation of around pound12bn
including cpound500m right of use asset depreciation
CostsOperating cost inflationbull Cost inflation between 2 and 3Cost savingsbull Continue to deliver cost savings to at least offset the impact of cost inflation
Finance costsbull Net finance costs of around pound405m including pound320m lease interest in
201920 following the introduction of IFRS 16
One-off itemsbull In 201920 cash outflows as a result of items excluded from
underlying results should not exceed pound100mbull Property strategy programme one-off costs expected to be
pound230m-pound270m of which cash costs are pound30-40m
Dividendbull Sainsburyrsquos plans to change the full year dividend policy to 19x cover by
underlying earnings (versus 20x previously) to offset the dilutive (non cash) impact of IFRS 16 on underlying earnings
Capital expenditurebull Retail capital expenditure to be around pound550mbull Retail capital expenditure is expected to be around pound550m-pound600m per
annum over the medium term
Net debtbull Net debt before fair value movements on derivatives to reduce by at
least pound300m
Tax ratebull Underlying tax rate to be between 25 and 26
APPENDIX Interim Results 201920 - November 2019
Retail sales
1 Sales including VAT excluding fuel
LFL sales growth1
(10)
Sales from net new space1
04
Total sales growth1
(06)
Supermarkets2
(07)
Convenience20
Groceries Online
70
Channels
(01)(25)
(12)
2 Supermarket sales include Argos SiS sales FY 1819 16
pound139bn
pound103bnGrocery
pound30bnGeneralMerchandise
pound488mClothing
2
Chart1
201819
194
66
1
Sheet1
APPENDIX Interim Results 201920 - November 2019
Sainsburyrsquos sales area and store numbersAs at 21 September 2019
Sainsburyrsquos store estateAs at 21 September 2019
Sq ftsales area
82446
870
40001 to60000
20001 to40000
10000 to20000
Under10000 Total
Over60000
0122122
0197197
0175175
06767
824607
1431
Argos storesArgos in SainsburyrsquosArgos in HomebaseOtherArgos total store numbers
Habitat1
Collection points
594281
8-
883
16317
As at21 Sept 2019
Disposalsclosures
Newstores
As at9 March 2019
17--8
-1
(7)-
(2)-
(9)
-(36)
588288
6-
88216
282
ConvenienceSupermarketsTotal stores
Number of stores
Sq ftsales area
1929350
2279
40001 to60000
20001 to40000
10000 to20000
Under10000 Total
Over60000
-18441844
-58185818
-85018501
-46604660
19292117323102
ConvenienceSupermarketsTotal stores
Space by store size (lsquo000 sq ft)
Argos and Habitat store numbers
1 5 Habitat stores 11 Habitat stores in Sainsburys
4
APPENDIX Interim Results 201920 - November 2019
ClosureBitterne West
Sainsburyrsquos investment programme201920
Q1
Supermarkets ConvenienceNew storesMilton Keynes Brooklands District CentBromley High StLeeds Wike Ridge LaneSalford Harbour CityCanterbury High St
ReplacementMayfair Stratton St
ClosuresMayfairWarren St
Q1Q1Q1Q2Q2
Q2
Q1Q2
5
APPENDIX Interim Results 201920 - November 2019
Retail margin
Retail sales (inc VAT inc fuel)(exc VAT inc fuel)
Retail underlying EBITDAR1
Retail underlying EBITDAR margin 2
at constant fuel pricesRetail underlying operating profit3
Retail underlying operating margin 4
at constant fuel prices
1656714808
10677272
4373030
1661214856
11147575
4873333
030342
30 bps28 bps10333 bps32 bps
1 Retail underlying operating profit before net rental income of pound6 million and underlying depreciation and amortisation of pound636 million2 Retail underlying EBITDAR divided by underlying retail sales excluding VAT3 Retail underlying earnings before interest tax and Sainsburyrsquos underlying share of post-tax profit from joint ventures4 Retail underlying operating profit divided by underlying retail sales excluding VAT
poundm H1201920
H1201819
Change
6
APPENDIX Interim Results 201920 - November 2019
H1201920
H1201819
Group retail
Return on capital employed 1
Net debt to EBITDAR (times)23
Fixed charge cover (times)2
Underlying tax rate Core retail capex sales5
713126
26515
743326
25715
poundm
1 ROCE Return is defined as a 52 week rolling underlying profit before interest and tax Capital employed is defined as group net assets2 Net debt of pound6778 million includes lease obligations under IFRS 16 and perpetual securities treated as debt divided by Group underlying EBITDAR of pound2171 million calculated for a 52-week period to 21 September 20193 Group underlying EBITDAR divided by rent (both capital and interest) and net finance costs where interest on perpetual securities is treated as an underlying finance costs4 52 weeks to 22nd September 2018 is not available due to the implementation of IFRS 16 Comparatives therefore reflect the 52 weeks to 9th March 20195 Includes retail sales inc vat inc fuel
4
4
7
APPENDIX Interim Results 201920 - November 2019
Plc Board
Kevin OrsquoByrneChief Financial Officer
Mike Coupe Group Chief Executive
Dame Susan Rice Senior Independent Director
Matt BrittinNon-Executive Director
Jo HarlowNon-Executive Director
Brian CassinNon-Executive Director
David KeensNon-Executive Director
Jean Tomlin Non-Executive Director
Martin Scicluna Chairman
8
APPENDIX Interim Results 201920 - November 2019
Plc Board
Mike Coupe Group Chief Executive Officer
Skills and experienceAppointed Group Chief Executive Officer on 9 July 2014 Mike has been a member of the Operating Board since October 2004 Mike has vast retail industry experience in trading strategy marketing digital and online as well as multi-site store experience He joined Sainsburyrsquos from Big Food Group where he was a board director of Big Food Group PLC and Managing Director of Iceland Food Stores He previously worked for both Asda and Tesco PLC where he served in a variety of senior management roles
Date of appointment 1 August 2007Mike has served as an Executive Director since 1 August 2007 and as Chief Executive Officer since 9 July 2014
Committee membershipCorporate Responsibility and Sustainability Committee
Kevin OrsquoByrne Chief Financial Officer
Skills and experienceKevin brings to the Board a wealth of retail and finance experience Kevin was previously Chief Executive Officer of Poundland Group Limited until December 2016 and held executive roles at Kingfisher plc from 2008 to 2015 including Divisional Director UK China and Turkey Chief Executive Officer of BampQ UK amp Ireland and Group Finance Director He was previously Group Finance Director of Dixons Retail plc and European Finance Director of Quaker Oats He was a Non-Executive Director of Land Securities Group PLC from 2008 to September 2017 where he was Chairman of the Audit Committee and Senior Independent Director
Date of appointment 9 January 2017
Other current rolesNon-Executive Director of Greene King plc
Skills and experienceMartin brings a breadth of experience and leadership in both executive and non-executive roles His previous roles include positions as the Chairman of Great Portland Estates plc Senior Independent Director and Chair of the Audit Committee of Worldpay Inc and Non-Executive Director and Chair of the Audit Committee of Lloyds Banking Group plc He was a partner at Deloitte LLP for 26 years serving as Chairman from 1995 to 2007 where his clients included Dixons WH Smith Alliance Unichem and Cadburyrsquos
Other current rolesChairman of RSA Insurance Group plc
Martin Scicluna Chairman
Date of appointment 1 November 2018 Martin joined the Board as Chairman Designate and Non-Executive Director on 1 November 2018 He was appointed as Chairman of the Board on 10 March 2019
Committee membershipChair of the Nomination Committee
Dame Susan Rice Senior Independent Director
Skills and experienceSusan has extensive experience as a Non-Executive Director as well as in retail banking financial services leadership and sustainability Her career in retail bankingis particularly relevant to our ownership ofSainsburyrsquos Bank Previously Susan was a member of the First Ministerrsquos Council of Economic Advisors Managing Director of Lloyds Banking Group Scotland and was previously Chief Executive and then Chairman of Lloyds TSB Scotland plc She has also held a range of other non-executive directorships including at the Bank of England and SSE plc
Committee membershipChair of the Remuneration Committee and a member of the Nomination Committee
Date of appointment 1 June 2013
Other current rolesChair of Scottish Water and Business Stream Chair of the Scottish Fiscal Commission Non-Executive Director of the North American Income Trust C Hoare and Co and Senior Independent Director of the North American Income Trust
9
Other current rolesNon-Executive Director and Chairman of the Audit Committee of Centrica plc
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jean Tomlin Non-Executive Director
Skills and experienceJean has extensive experience and breadth of skills in human resources and corporate responsibility Jean was formerly Director of HR Workforce and Accreditation for The London OrganisingCommittee of the Olympic and Paralympic Games where she set the strategic direction to ensure the mobilisation of the combined 200000-strong workforce including paid staff volunteers and contractors which represented the recruitment and mobilisation of the largest peacetime workforce and set the industry standard for volunteering with the highly acclaimed Games She was previously Group HR Director at Marks and Spencer Group Plc HR Director and founder member of Egg plc and Sales amp Operations Director of Prudential Direct
Date of appointment 1 January 2013
Committee membershipAudit Committee Corporate Responsibility and Sustainability Committee and Nomination Committee
David Keens Non-Executive Director
Skills and experienceDavid has extensive retail experience and knowledge of consumer facing businesses together with his core skills in finance David was formerly Group Finance Director of next plc from 1991 to 2015 and their Group Treasurer from 1986 to 1991 Previous management experience includes nine years in the UK and overseas operations of multinational food manufacturer Nabisco and prior to that seven years in the accountancy profession
Date of appointment 29 April 2015
Committee membershipChair of the Audit Committee and a member of the Nomination Committee
Other current rolesIndependent Board member of Capri Holdings Limited Non-Executive Director of Hakluyt and Chief Executive Officer of Chanzo Limited
Other current rolesNon-Executive Director Senior Independent Director and Chair of the Audit Committee of Auto Trader Group plc
Matt BrittinNon-Executive Director
Skills and experienceMatt has extensive experience of running a high profile fast moving innovative digital business Since 2015 he has been responsible for Googlersquos business and operations in Europe the Middle East and Africa and hersquos been in leadership roles at Google since 2007 Prior to that Matt spent much of his career in media and marketing with particular interests in strategy commercial development and sales performance This included commercial and digital leadership roles in UK media
Date of appointment 27 January 2011
Committee membershipNomination Committee and Remuneration Committee
Other current rolesGooglersquos President ndash Europe Middle East and Africa and Director of The Media Trust
Brian Cassin Non-Executive Director
Skills and experienceBrian brings present day experience of running a FTSE40 group and of big data and analytics ndash topics of key importance to Sainsburyrsquos Brian joined Experian plc as Chief Financial Officer in April 2012 a post he held until his appointment as Chief Executive Officer in July 2014 Prior to this Brian spent his career in investment banking at Greenhill amp Co where he was Managing Director and Partner Brian has also held various roles at Baring Brothers International and at the London Stock Exchange
Date of appointment 1 April 2016
Committee membershipAudit Committee and Nomination Committee
Other current rolesChief Executive Officer of Experian plc
10
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jo Harlow Non-Executive Director
Skills and experienceJo brings a wealth of experience in consumer-facing businesses and in the telecoms and technology industry bothin the UK and internationally Jo spent 12 years in a variety of senior management roles with Nokia and Microsoft Prior to this she spent eight years at PampG and 11 years at Reebok in senior sales and marketing positions in both Europe and the US
Date of appointment 11 September 2017
Committee membershipChair of the Corporate Responsibility and Sustainability Committee and member of the Nomination Committee and Remuneration Committee
Life PresidentLord Sainsbury of Preston Candover KG
Other current rolesNon-Executive Director of InterContinental Hotels plc Non-Executive Director of Halmaplc and Member of the Supervisory Board of Ceconomy AG
11
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief Executive
Tim FallowfieldCompany Secretary amp Corporate Services Director
Kevin OrsquoByrne Chief Financial Officer
Jim BrownChief Executive Officer of Sainsburyrsquos Bank
Paul Mills-HicksFood Commercial Director
Angie RisleyGroup HR Director
Phil JordanGroup Chief InformationOfficer
Simon RobertsRetail and Operations Director
Clo MoriartyGroup Chief Digital Officer
12
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief ExecutiveSee Appendix page 9
Kevin OrsquoByrneChief Financial OfficerSee Appendix page 9
Tim FallowfieldCompany Secretary amp Corporate Services Director
Date of appointment September 2004
Skills and experienceTim joined Sainsburyrsquos in 2001 as Company Secretary and joined the Operating Board in September 2004 In addition to his role as Company Secretary Tim is responsible for the Corporate Services Division comprising Legal Services Data Governance Safety Shareholder Services Insurance and Central Security He chairs the Group Safety Committee and the Data Governance Committee Tim joined Sainsburyrsquos from Exelplc the global logistics company now part of DHL where he was Company Secretary and General Counsel He began his career at the international law firm Clifford Chance and is a qualified solicitor Tim is Chairman of the Disability Confident Business Leaders Group which works with Government in shaping the disability employment agenda and in raising awareness of the benefits of employing disabled people
Jim BrownCEO of Sainsburyrsquos Bank
Skills and experienceJim joined Sainsburyrsquos Bank as CEO in June 2019 and is also a member of the Sainsburyrsquos Group Operating Board He has held a number of senior international Financial Services roles - most recently for RBS in the UK as CEO of Williams and Glyn and prior to that CEO of Ulster Bank in Northern Ireland and the Republic of Ireland Before moving to Ireland he was based in Hong Kong and was CEO Retail and Commercial Banking Asia and the Middle East for RBS and ABN AMRO He has also been a member of the RBS Group Management Committee ABN AMRO Executive Group ABN AMRO Global Consumer Leadership Team and the RBSBank of China Joint Steering Committee Earlier in his career he held a number of senior executive roles for Citibank in Asia and Australia and New Zealand Jim has also held various Board positions including at Ulster Bank Saudi Hollandi Bank The Royal Bank of Scotland (China) Co Ltd and RBS (Pakistan) Ltd He is also a past President of the Institute of Banking in Ireland He is currently a Certified Bank Director
Date of appointment August 2019
Paul Mills-HicksFood Commercial Director
Skills and experiencePaul joined the Operating Board in May 2014 as Food Commercial Director having spent over ten years at Sainsburyrsquos He was closely involved in the formation and execution of the lsquoMaking Sainsburyrsquos Great Againrsquo strategy Following this he held a variety of roles in commercial strategy and finance most recently as Business Unit Director for Grocery Prior to Sainsburyrsquos Paul was European Controller at Marks and Spencer Group PLC and a Director at UBS Warburg
Date of appointment May 2014
13
APPENDIX Interim Results 201920 - November 2019
Operating Board
Angie RisleyGroup HR Director
Skills and experienceAngie was appointed Group HR Director and a member of the Operating Board in January 2013 with responsibility for human resources Angie is also a Director of Sainsburyrsquos Bank plc Angie was most recently Non-Executive Director and Chairman of the Remuneration Committee of Serco plc and prior to this was Group HR Director of Lloyds Banking Group and an Executive Director of Whitbread PLC with responsibility for HR and Corporate Social Responsibility Angie is currently Non-Executive Director and Chair of the Remuneration Committee at Smith amp Nephew plc
Date of appointment January 2013
Phil JordanGroup Chief Information Officer
Skills and experiencePhil joined the Board in January 2018 and has brought a fresh globalperspective on technology to the Operating Board in addition to a wealth of experience in digital data and business transformation Prior to joining Sainsburyrsquos Phil had a long and successful track record in telecommunications Most recently he was Global Chief Information Officer at Telefonica overseeing Digital Transformation and Information Technology and prior to that was Chief Information Officer for Vodafone UKIreland Phil has worked as a Non-Executive Advisor on Technology in the Investment amp Retail Banking sector and is currently a Non-Executive Director of TalkTalk Telecom Group PLC and chairs its Cyber-Security Committee
Date of appointment January 2018
Simon RobertsRetail and Operations Director
Skills and experienceSimon joined Sainsburyrsquos and the Operating Board in July 2017 as Central Retail amp Operations Director responsible for Stores Central operation and Logistics In his previous role he was Executive Vice President of Walgreens Boots Alliance and President of Boots with responsibility for commercial and retail operations across the UK and Ireland Prior to Boots Simon was at Marks and Spencer Group PLC where he held operational and customer leadership roles across stores divisions and central operations Simon is also the Non-Executive Chairman at the Institute ofCustomer Service
Date of appointment July 2017
Clodagh MoriartyGroup Chief Digital Officer
Skills and experienceClodagh was appointed Group Chief Digital Officer in June 2018 Clodagh leads the delivery of a consistent and first-rate digital experience for customers across Sainsburyrsquos Argos and Sainsburyrsquos BankClodagh joined Sainsburyrsquos in 2010 from Bain amp Co management consultants where she had gained experience working on a broad range of projects across multiple sectors and countries Following two years as Head of Strategy at Sainsburyrsquosshe moved into Food Commercial as Category Manager for Meal Solutions and then became Head of Online Trading spanning Food General Merchandise and Clothing before being promoted to Director of Online in 2016 In this role Clodagh was instrumental in driving innovation within Groceries Online and launching new initiatives including SmartShop and Chop Chop
Date of appointment June 2018
14
APPENDIX Interim Results 201920 - November 2019
Supplementary financial details
3 Financial calendarQ3 trading statement(15 weeks to 4 January 2020)
Preliminary results(52 weeks to 7 March 2020)
8 January 2020
30 April 2020
1 Weighted average number of shares
The interim dividend datesOrdinary shares
Ex-dividend 14 November 2019Record 15 November 2019Payment 20 December 2019
result of items excluded from underlying results should not exceed pound100m
Property strategy programme one-off costs expected to be pound230m-pound270m (of which pound30m-pound40m cash)
Sainsburyrsquos Bank Financial Services non-
underlying costs are expected to be around pound30m
201920 FY Guidance
10 Interim Results 201920 - November 2019
Retail capital expenditure
H1201920
H1201819
Core retail capital expenditureArgos integration capexRetail capital expenditure
248 -
248
24331
274
poundm Retail capital expenditure to
be around pound550m
Retail capital expenditure is expected to be around pound550m-pound600m per annum over the medium term
201920 FY Guidance
Core retail capital expenditure
MaintenanceGrowthEfficiency
pound243m201819
pound248m201920
11 Interim Results 201920 - November 2019
Pensions
Outcome
bull 2018 triennial valuation deficit down to pound538m from pound1055m in 2015
bull Greater asset-backed security for the Scheme
bull Immediate cash payments reduced
bull Reduced risk of over funding and trapped cash
Agreed long term sustainable and flexible funding plan
Annual cash contribution reduces by cpound50m
Annual cash commitment
under old plan
201920 202021 202122 202223
124
48
98
7669
12 Interim Results 201920 - November 2019
Retail free cash flow
2 Interest paid net of interest received interest elements of obligations under finance lease payments and dividends paid on perpetual securities
3 Excludes Argos integration capital expenditure
1 Operating cash flow before changes in working capital and pension contributions
4 Other non-cash includes new leases and lease modifications and fair value movements on derivatives linked to borrowings
Adjusted operating cash flow before changes in working capital1
Decrease in working capital
Pension contribution net interest paid2 corporation tax paidNet cash generated from operating activitiesCash capital expenditure before strategic capex3
Proceeds from disposal of property plant and equipmentRepayments of lease obligations and right-of-use assets direct costsBank capital injectionsDividends and distributions received from JVs net of capital injectionsRetail free cash flowDividends paid on ordinary sharesArgos integration capital expenditure
Repayment of borrowings other non-cash and net interest movements4
Movement in net debt5
Opening net debt including perpetual securities as debtClosing net debt including perpetual securities as debt
Of whichLease LiabilitiesNet Debt excluding Lease Liabilities
poundm ndash Restated for IFRS 161029
296
(279)1046
(243)34
(231)-11
617 (156)
(31)
-
430(7575)(7145)
(5873)(1272)
H1 201819Restated
H1 201920
1034 289
(282)1041 (248)
54 (232)
(35)118
698 (174)
-
44
568(7346)(6778)
(5770)(1008)
201920 FY Guidance
5 Net debt definition now excludes derivatives not linked to borrowings and includes perpetual securities as debt
Capital injections into the Bank are expected to be pound35m
Proceeds from disposal of property are expected to be in line with 201819
Expect underlying retail depreciation and amortisation of around pound12bn including cpound500m right of use asset depreciation
Net debt before fair value movements on derivatives to reduce by at least pound300m
Net finance costs of around pound405m including pound320m lease interest in 201920 following the introduction of IFRS 16
13 Interim Results 201920 - November 2019
1 Net debt definition now excludes derivatives not linked to borrowings and includes perpetual securities as debt2 Net debt (inc perpetual securities) on a post-IFRS 16 basis divided by Group underlying EBITDAR We previously disclosed
adjusted Net debt EBITDAR but net debt on a post-IFRS 16 basis now includes lease liabilities3 FY1819 Net Debt exc Leases of pound1522m compares to the previously reported Net Debt of pound1636m less pound(122)m of finance leases plus pound8m other (predominantly derivatives no longer reported within net debt)
Balance sheet targets
bull Net debt reduction of at least pound750m over the next three years
bull Medium leverage reduction targets- Net debtEBITDAR2 less than 3x
bull Dividend policy changed to 19x underlying eps cover versus 20x
- Adjusting for the impact of IFRS 16
FY1819
Net debt exc Lease liabilities1 (poundm)
FY1516
2125
15223
FY2122
(750)
Target
c800
H1201920
FY201819
Net DebtOf which lease liabilitiesNet Debt exc leases1
(6778) (5770) (1008)
(7346) (5824) (1522)3
poundm
(603)
14 Interim Results 201920 - November 2019
Summary and Outlook
bull Grocery sales improving relative to the market
bull General Merchandise and Clothing outperforming a difficult market
Sainsburyrsquos Meat Fish amp Poultry Value Own Label1
Gains
Losses
Incremental Switching within Sainsburyrsquos
Dec 17 Oct 19
+2Sales
+4Volume
Bread Investing across Own Label Tiers120+ EPP SKUs launched in H1 200 by end 201920
Repackaged and NPD within Premium
New Owned Brand Replacing Basics
NPD within Core+ Responding in Growth Areas
Repackaged Core bySainsburyrsquos
New
New
Improved
Improved
1 Kantar 12 we 6 October 2019 ndash rolling 12 weeks switching within total Market MFP
21 Interim Results 201920 - November 2019
Be competitive
on price
1
Lower prices on key volume lines
In-Store Volume Returns Examples
Chicken Wings 1kg+12 Volume
pound170was pound210
pound050Only
White Pittas x6+15 Volume
Chestnut Mushrooms 250g+45 Volume
pound080Only
1 Pre wave 3 lockdown (started 24th March to 15th June 19) YoY 2 Last 6 weeks since wave 4 lockdown (started 28th August 19) YoY
-4
0
4
8
12
16
-6 -5 -4 -3 -2 -1 0 1 2 3 4 5 6
Change in volumes ()
Pre1 Post2
22 Interim Results 201920 - November 2019
Be competitive
on price
1
We continue to be less dependent on promotions
230 228
207 209
Sainsburyrsquos Promotional Participation
1819 1920 19201819
Morrisons
Sainsburyrsquos
Tesco
Asda
Spend on Deal1
Q1 Q2
1 Source Nielsen 4 weekly data to 21 September 2019
10
20
30
4040
30
20
10Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep
2018 2019
H1 1920
H1 1920 AVERAGE
34 31
22 21
23 Interim Results 201920 - November 2019
Be competitive
on price
1
Improved grocery value
Base Price Index 2
-1
0
1
2
3
Grocery inflation (Kantar)1
-960bps
-550bps
Commodity VI 2
Aug 17 Jan 18 Jun 18 Nov 18 Apr 19 Oct 19
2004 2007 2010 2013 2016 2019
Morrisons
Sainsburyrsquos
Tesco
Asda
Total Market
Mar Apr May Jun Jul Aug Sep Oct2019
1 Kantar City Reads to Oct 20192 Sainsburyrsquos value index based on Brandview SKU matching data to Oct 2019
24 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
25 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Category tier performance
YoY value share change by tier
12 weeks to September 2019
-03
01
-01
-18
52 weeks to March 2019
Branded
PremiumOwn Brand
Branded
StandardOwn Brand
EconomyOwn Brand
02
-08
-04
00PremiumOwn Brand
StandardOwn Brand
EconomyOwn Brand
Source Nielsen Panel Total FMCG Market Universe Total outlets 52wks data to 9 March 2019 and 12wks data to 21 Sept 2019
26 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Premium private label
Taste the Difference re-launch
bull Over 350 products new repackaged or reformulated
bull Premium ready meals growth now outperforming the market
41
25 2419
Sainsburys Morrisons Tesco Asda
Premium Own Label volume share
Source Nielsen Panel Total FMCG 28 weeks data to 21 September 2019 Premium Own Label share of sales by retailer
27 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Distinctive brands
bull 57 of customers have bought Distinctive Brands since launch
bull On track for pound100m incremental sales
bull 37 new brands in H1 across Fresh and Grocery
bull lsquoTaste of the Futurersquo bays launched in 70 stores- 67 incremental sales
Leon
bull 3 year exclusive partnership
bull 14 products launched
28 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Beauty Rollout
bull Now rolled out to over 60 stores- Sales up over 40
bull Customer numbers up 7
bull Spend per customer up 25
bull Beauty range doubled 1200 additional lines
bull Double digit growth differential against the market
29 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Our values make us different
bull Committed to reduce plastic packaging by 50 by 2025
bull First retailer to remove single use plastic produce and bakery bags from our stores
- Launching reusable bags in fruit and veg aisles
bull Investing in our loose produce offer
bull Removed black plastic trays from ready meals
bull Fresh water stands in cafeacutes for customers to refill bottles
UKrsquos first major retailer to make significant commitment to reduce plastic
30 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Argos category and range focus
bull Availability improvement- Argos master range reduced by c30 over 3 years- Eliminating duplication removing low value items- Better availability of key lines in store
bull Rebalancing into higher margin categories- Gaining share in Furniture1
More distinctive rangemore reason to shop at Sainsburyrsquos
Reduced SKU count -20operational efficiencies
Higher cash gross profit +2 YOY
Volumes +8 operational efficiencies
41 Interim Results 201920 - November 2019
Drive efficiency
to invest in the customer
offer
4
BAU savings to offset cost inflation
Manages inflationary pressures
BAU savingsH1 201920
Procurement GNFR
Retail Technology Efficiencies
Retail HRRetail
management structures
Shrink Reduction
42 Interim Results 201920 - November 2019
Drive efficiency
to invest in the customer
offer
4
Strategic cost transformation 5 year plan
Converge Tackle fixed cost
End to end reviews
Retail Operations Marketing and Commercial Operations
Other central support
Logistics and Supply Chain
Project A
Project C
Project D
Shared Services BPO
Property strategy
Project BGNFR procurement
Capital prioritisation
Technology Digital and Corporate Services
pound250-pound350m
pound150-pound250m
pound400-pound600mExecution underway In planning Opportunities identified
pound5bn addressable cost base
43 Interim Results 201920 - November 2019
Grow connected
services
5
44 Interim Results 201920 - November 2019
Grow connected
services
5
Financial Services Priorities
To be the provider of financial services for loyal Sainsburyrsquos and Argos customers
An agile capital and cost efficient provider of simple mobile-led financial services
Vision
Objective
Priorities Reshape Simplify Strengthen
45 Interim Results 201920 - November 2019
Grow connected
services
5
Current Customer Base
Customer Credit Risk Balance Sheet Earnings
Argos Storecards 22m Prime Near Prime
Credit Cards 09m Prime
Personal Loans 05m Prime
Mortgages 9K Exit
Total Lending
Deposits 03m
Insurances 05m Very Low Risk
Travel Money 266 Sites
ATMs 1890
Financial Services reshaping the portfolio
46 Interim Results 201920 - November 2019
Grow connected
services
5
Increase connectivity and value for Group
Stop mortgage acquisition review back book options
No capital input from the Group from now1
Costincome c503 within 5 years
Double UPBT double digit ROCE within 5 years
Upstream cash within 5 years2
Financial Services key targets
Transform the cost base
Improve returns
Financial services cash generative
Reduce risk profile to Group
Stop putting cash in to Financial Services
2
4
6
3
1
5
Focus on Sainsburyrsquos customer base
1 Subject to regulatory changes requirements2 Subject to regulatory approval3 On a Group contribution basis
47 Interim Results 201920 - November 2019
Grow connected
services
5
Nectar
bull Biggest loyalty programme in the UK
bull Over 18 million collectors
bull Most recognised loyalty brand in the UK
bull Launch of Nectar digital- 21 million app users- Increase in overall Nectar participation- Increased levels of personalisation- 138000 new Nectar customers- 1 app on launch weekend
bull Coalition strengthened with addition of Esso in June 2019
48 Interim Results 201920 - November 2019
Provide a seamless customer
experience
6
49 Interim Results 201920 - November 2019
Provide a seamless customer
experience
6
Digital
bull Groceries Online sales penetration of 8- App accounts for over 20 of orders
bull 21 million digital Nectar app users
bull 14 million Argos Financial Services app downloads
bull Smartshop rollout in over 350 stores
Groceries online
Chop Chop
SmartShop
Universaldiscovery
Seamlessfinancialservices
Singlebasket
50 Interim Results 201920 - November 2019
We will help our customers live well for less
Confident in the core Integrated customer offer
One multi brand multi channel business
Strong cash generation supporting investment dividend and allowing deleverage
Financial flexibility and resilience
Sustainable cost reduction covering cost inflation and funding investment in our competitive offer
QampA
APPENDIX Interim Results 201920 - November 2019
Appendices
APPENDIX Interim Results 201920 - November 2019
Guidance for 201920
1
Spacebull Expect to open 2 new Sainsburyrsquos supermarkets and up to 15 convenience storesbull Expect to open around 25 Argos stores in Sainsburyrsquos (of which 11 are
relocations) resulting in around 305 Argos stores in supermarketsbull Expect to close 2 supermarkets around 25 convenience stores and around 20
Argos stores in FY201920 as part of announced property closure programme of 10-15 supermarkets 30-40 convenience stores and 60-70 Argos stores
Financial Servicesbull Financial services underlying operating profit expected to be cpound45m including a
cpound10m benefit as a result of a change in transfer pricing between Argos and Argos Financial Services
bull Financial Services non-underlying costs are expected to be around pound30mbull No further capital injections into the Bank are expected following pound35m in H1 201920
Depreciation and amortisationbull Expect underlying retail depreciation and amortisation of around pound12bn
including cpound500m right of use asset depreciation
CostsOperating cost inflationbull Cost inflation between 2 and 3Cost savingsbull Continue to deliver cost savings to at least offset the impact of cost inflation
Finance costsbull Net finance costs of around pound405m including pound320m lease interest in
201920 following the introduction of IFRS 16
One-off itemsbull In 201920 cash outflows as a result of items excluded from
underlying results should not exceed pound100mbull Property strategy programme one-off costs expected to be
pound230m-pound270m of which cash costs are pound30-40m
Dividendbull Sainsburyrsquos plans to change the full year dividend policy to 19x cover by
underlying earnings (versus 20x previously) to offset the dilutive (non cash) impact of IFRS 16 on underlying earnings
Capital expenditurebull Retail capital expenditure to be around pound550mbull Retail capital expenditure is expected to be around pound550m-pound600m per
annum over the medium term
Net debtbull Net debt before fair value movements on derivatives to reduce by at
least pound300m
Tax ratebull Underlying tax rate to be between 25 and 26
APPENDIX Interim Results 201920 - November 2019
Retail sales
1 Sales including VAT excluding fuel
LFL sales growth1
(10)
Sales from net new space1
04
Total sales growth1
(06)
Supermarkets2
(07)
Convenience20
Groceries Online
70
Channels
(01)(25)
(12)
2 Supermarket sales include Argos SiS sales FY 1819 16
pound139bn
pound103bnGrocery
pound30bnGeneralMerchandise
pound488mClothing
2
Chart1
201819
194
66
1
Sheet1
APPENDIX Interim Results 201920 - November 2019
Sainsburyrsquos sales area and store numbersAs at 21 September 2019
Sainsburyrsquos store estateAs at 21 September 2019
Sq ftsales area
82446
870
40001 to60000
20001 to40000
10000 to20000
Under10000 Total
Over60000
0122122
0197197
0175175
06767
824607
1431
Argos storesArgos in SainsburyrsquosArgos in HomebaseOtherArgos total store numbers
Habitat1
Collection points
594281
8-
883
16317
As at21 Sept 2019
Disposalsclosures
Newstores
As at9 March 2019
17--8
-1
(7)-
(2)-
(9)
-(36)
588288
6-
88216
282
ConvenienceSupermarketsTotal stores
Number of stores
Sq ftsales area
1929350
2279
40001 to60000
20001 to40000
10000 to20000
Under10000 Total
Over60000
-18441844
-58185818
-85018501
-46604660
19292117323102
ConvenienceSupermarketsTotal stores
Space by store size (lsquo000 sq ft)
Argos and Habitat store numbers
1 5 Habitat stores 11 Habitat stores in Sainsburys
4
APPENDIX Interim Results 201920 - November 2019
ClosureBitterne West
Sainsburyrsquos investment programme201920
Q1
Supermarkets ConvenienceNew storesMilton Keynes Brooklands District CentBromley High StLeeds Wike Ridge LaneSalford Harbour CityCanterbury High St
ReplacementMayfair Stratton St
ClosuresMayfairWarren St
Q1Q1Q1Q2Q2
Q2
Q1Q2
5
APPENDIX Interim Results 201920 - November 2019
Retail margin
Retail sales (inc VAT inc fuel)(exc VAT inc fuel)
Retail underlying EBITDAR1
Retail underlying EBITDAR margin 2
at constant fuel pricesRetail underlying operating profit3
Retail underlying operating margin 4
at constant fuel prices
1656714808
10677272
4373030
1661214856
11147575
4873333
030342
30 bps28 bps10333 bps32 bps
1 Retail underlying operating profit before net rental income of pound6 million and underlying depreciation and amortisation of pound636 million2 Retail underlying EBITDAR divided by underlying retail sales excluding VAT3 Retail underlying earnings before interest tax and Sainsburyrsquos underlying share of post-tax profit from joint ventures4 Retail underlying operating profit divided by underlying retail sales excluding VAT
poundm H1201920
H1201819
Change
6
APPENDIX Interim Results 201920 - November 2019
H1201920
H1201819
Group retail
Return on capital employed 1
Net debt to EBITDAR (times)23
Fixed charge cover (times)2
Underlying tax rate Core retail capex sales5
713126
26515
743326
25715
poundm
1 ROCE Return is defined as a 52 week rolling underlying profit before interest and tax Capital employed is defined as group net assets2 Net debt of pound6778 million includes lease obligations under IFRS 16 and perpetual securities treated as debt divided by Group underlying EBITDAR of pound2171 million calculated for a 52-week period to 21 September 20193 Group underlying EBITDAR divided by rent (both capital and interest) and net finance costs where interest on perpetual securities is treated as an underlying finance costs4 52 weeks to 22nd September 2018 is not available due to the implementation of IFRS 16 Comparatives therefore reflect the 52 weeks to 9th March 20195 Includes retail sales inc vat inc fuel
4
4
7
APPENDIX Interim Results 201920 - November 2019
Plc Board
Kevin OrsquoByrneChief Financial Officer
Mike Coupe Group Chief Executive
Dame Susan Rice Senior Independent Director
Matt BrittinNon-Executive Director
Jo HarlowNon-Executive Director
Brian CassinNon-Executive Director
David KeensNon-Executive Director
Jean Tomlin Non-Executive Director
Martin Scicluna Chairman
8
APPENDIX Interim Results 201920 - November 2019
Plc Board
Mike Coupe Group Chief Executive Officer
Skills and experienceAppointed Group Chief Executive Officer on 9 July 2014 Mike has been a member of the Operating Board since October 2004 Mike has vast retail industry experience in trading strategy marketing digital and online as well as multi-site store experience He joined Sainsburyrsquos from Big Food Group where he was a board director of Big Food Group PLC and Managing Director of Iceland Food Stores He previously worked for both Asda and Tesco PLC where he served in a variety of senior management roles
Date of appointment 1 August 2007Mike has served as an Executive Director since 1 August 2007 and as Chief Executive Officer since 9 July 2014
Committee membershipCorporate Responsibility and Sustainability Committee
Kevin OrsquoByrne Chief Financial Officer
Skills and experienceKevin brings to the Board a wealth of retail and finance experience Kevin was previously Chief Executive Officer of Poundland Group Limited until December 2016 and held executive roles at Kingfisher plc from 2008 to 2015 including Divisional Director UK China and Turkey Chief Executive Officer of BampQ UK amp Ireland and Group Finance Director He was previously Group Finance Director of Dixons Retail plc and European Finance Director of Quaker Oats He was a Non-Executive Director of Land Securities Group PLC from 2008 to September 2017 where he was Chairman of the Audit Committee and Senior Independent Director
Date of appointment 9 January 2017
Other current rolesNon-Executive Director of Greene King plc
Skills and experienceMartin brings a breadth of experience and leadership in both executive and non-executive roles His previous roles include positions as the Chairman of Great Portland Estates plc Senior Independent Director and Chair of the Audit Committee of Worldpay Inc and Non-Executive Director and Chair of the Audit Committee of Lloyds Banking Group plc He was a partner at Deloitte LLP for 26 years serving as Chairman from 1995 to 2007 where his clients included Dixons WH Smith Alliance Unichem and Cadburyrsquos
Other current rolesChairman of RSA Insurance Group plc
Martin Scicluna Chairman
Date of appointment 1 November 2018 Martin joined the Board as Chairman Designate and Non-Executive Director on 1 November 2018 He was appointed as Chairman of the Board on 10 March 2019
Committee membershipChair of the Nomination Committee
Dame Susan Rice Senior Independent Director
Skills and experienceSusan has extensive experience as a Non-Executive Director as well as in retail banking financial services leadership and sustainability Her career in retail bankingis particularly relevant to our ownership ofSainsburyrsquos Bank Previously Susan was a member of the First Ministerrsquos Council of Economic Advisors Managing Director of Lloyds Banking Group Scotland and was previously Chief Executive and then Chairman of Lloyds TSB Scotland plc She has also held a range of other non-executive directorships including at the Bank of England and SSE plc
Committee membershipChair of the Remuneration Committee and a member of the Nomination Committee
Date of appointment 1 June 2013
Other current rolesChair of Scottish Water and Business Stream Chair of the Scottish Fiscal Commission Non-Executive Director of the North American Income Trust C Hoare and Co and Senior Independent Director of the North American Income Trust
9
Other current rolesNon-Executive Director and Chairman of the Audit Committee of Centrica plc
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jean Tomlin Non-Executive Director
Skills and experienceJean has extensive experience and breadth of skills in human resources and corporate responsibility Jean was formerly Director of HR Workforce and Accreditation for The London OrganisingCommittee of the Olympic and Paralympic Games where she set the strategic direction to ensure the mobilisation of the combined 200000-strong workforce including paid staff volunteers and contractors which represented the recruitment and mobilisation of the largest peacetime workforce and set the industry standard for volunteering with the highly acclaimed Games She was previously Group HR Director at Marks and Spencer Group Plc HR Director and founder member of Egg plc and Sales amp Operations Director of Prudential Direct
Date of appointment 1 January 2013
Committee membershipAudit Committee Corporate Responsibility and Sustainability Committee and Nomination Committee
David Keens Non-Executive Director
Skills and experienceDavid has extensive retail experience and knowledge of consumer facing businesses together with his core skills in finance David was formerly Group Finance Director of next plc from 1991 to 2015 and their Group Treasurer from 1986 to 1991 Previous management experience includes nine years in the UK and overseas operations of multinational food manufacturer Nabisco and prior to that seven years in the accountancy profession
Date of appointment 29 April 2015
Committee membershipChair of the Audit Committee and a member of the Nomination Committee
Other current rolesIndependent Board member of Capri Holdings Limited Non-Executive Director of Hakluyt and Chief Executive Officer of Chanzo Limited
Other current rolesNon-Executive Director Senior Independent Director and Chair of the Audit Committee of Auto Trader Group plc
Matt BrittinNon-Executive Director
Skills and experienceMatt has extensive experience of running a high profile fast moving innovative digital business Since 2015 he has been responsible for Googlersquos business and operations in Europe the Middle East and Africa and hersquos been in leadership roles at Google since 2007 Prior to that Matt spent much of his career in media and marketing with particular interests in strategy commercial development and sales performance This included commercial and digital leadership roles in UK media
Date of appointment 27 January 2011
Committee membershipNomination Committee and Remuneration Committee
Other current rolesGooglersquos President ndash Europe Middle East and Africa and Director of The Media Trust
Brian Cassin Non-Executive Director
Skills and experienceBrian brings present day experience of running a FTSE40 group and of big data and analytics ndash topics of key importance to Sainsburyrsquos Brian joined Experian plc as Chief Financial Officer in April 2012 a post he held until his appointment as Chief Executive Officer in July 2014 Prior to this Brian spent his career in investment banking at Greenhill amp Co where he was Managing Director and Partner Brian has also held various roles at Baring Brothers International and at the London Stock Exchange
Date of appointment 1 April 2016
Committee membershipAudit Committee and Nomination Committee
Other current rolesChief Executive Officer of Experian plc
10
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jo Harlow Non-Executive Director
Skills and experienceJo brings a wealth of experience in consumer-facing businesses and in the telecoms and technology industry bothin the UK and internationally Jo spent 12 years in a variety of senior management roles with Nokia and Microsoft Prior to this she spent eight years at PampG and 11 years at Reebok in senior sales and marketing positions in both Europe and the US
Date of appointment 11 September 2017
Committee membershipChair of the Corporate Responsibility and Sustainability Committee and member of the Nomination Committee and Remuneration Committee
Life PresidentLord Sainsbury of Preston Candover KG
Other current rolesNon-Executive Director of InterContinental Hotels plc Non-Executive Director of Halmaplc and Member of the Supervisory Board of Ceconomy AG
11
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief Executive
Tim FallowfieldCompany Secretary amp Corporate Services Director
Kevin OrsquoByrne Chief Financial Officer
Jim BrownChief Executive Officer of Sainsburyrsquos Bank
Paul Mills-HicksFood Commercial Director
Angie RisleyGroup HR Director
Phil JordanGroup Chief InformationOfficer
Simon RobertsRetail and Operations Director
Clo MoriartyGroup Chief Digital Officer
12
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief ExecutiveSee Appendix page 9
Kevin OrsquoByrneChief Financial OfficerSee Appendix page 9
Tim FallowfieldCompany Secretary amp Corporate Services Director
Date of appointment September 2004
Skills and experienceTim joined Sainsburyrsquos in 2001 as Company Secretary and joined the Operating Board in September 2004 In addition to his role as Company Secretary Tim is responsible for the Corporate Services Division comprising Legal Services Data Governance Safety Shareholder Services Insurance and Central Security He chairs the Group Safety Committee and the Data Governance Committee Tim joined Sainsburyrsquos from Exelplc the global logistics company now part of DHL where he was Company Secretary and General Counsel He began his career at the international law firm Clifford Chance and is a qualified solicitor Tim is Chairman of the Disability Confident Business Leaders Group which works with Government in shaping the disability employment agenda and in raising awareness of the benefits of employing disabled people
Jim BrownCEO of Sainsburyrsquos Bank
Skills and experienceJim joined Sainsburyrsquos Bank as CEO in June 2019 and is also a member of the Sainsburyrsquos Group Operating Board He has held a number of senior international Financial Services roles - most recently for RBS in the UK as CEO of Williams and Glyn and prior to that CEO of Ulster Bank in Northern Ireland and the Republic of Ireland Before moving to Ireland he was based in Hong Kong and was CEO Retail and Commercial Banking Asia and the Middle East for RBS and ABN AMRO He has also been a member of the RBS Group Management Committee ABN AMRO Executive Group ABN AMRO Global Consumer Leadership Team and the RBSBank of China Joint Steering Committee Earlier in his career he held a number of senior executive roles for Citibank in Asia and Australia and New Zealand Jim has also held various Board positions including at Ulster Bank Saudi Hollandi Bank The Royal Bank of Scotland (China) Co Ltd and RBS (Pakistan) Ltd He is also a past President of the Institute of Banking in Ireland He is currently a Certified Bank Director
Date of appointment August 2019
Paul Mills-HicksFood Commercial Director
Skills and experiencePaul joined the Operating Board in May 2014 as Food Commercial Director having spent over ten years at Sainsburyrsquos He was closely involved in the formation and execution of the lsquoMaking Sainsburyrsquos Great Againrsquo strategy Following this he held a variety of roles in commercial strategy and finance most recently as Business Unit Director for Grocery Prior to Sainsburyrsquos Paul was European Controller at Marks and Spencer Group PLC and a Director at UBS Warburg
Date of appointment May 2014
13
APPENDIX Interim Results 201920 - November 2019
Operating Board
Angie RisleyGroup HR Director
Skills and experienceAngie was appointed Group HR Director and a member of the Operating Board in January 2013 with responsibility for human resources Angie is also a Director of Sainsburyrsquos Bank plc Angie was most recently Non-Executive Director and Chairman of the Remuneration Committee of Serco plc and prior to this was Group HR Director of Lloyds Banking Group and an Executive Director of Whitbread PLC with responsibility for HR and Corporate Social Responsibility Angie is currently Non-Executive Director and Chair of the Remuneration Committee at Smith amp Nephew plc
Date of appointment January 2013
Phil JordanGroup Chief Information Officer
Skills and experiencePhil joined the Board in January 2018 and has brought a fresh globalperspective on technology to the Operating Board in addition to a wealth of experience in digital data and business transformation Prior to joining Sainsburyrsquos Phil had a long and successful track record in telecommunications Most recently he was Global Chief Information Officer at Telefonica overseeing Digital Transformation and Information Technology and prior to that was Chief Information Officer for Vodafone UKIreland Phil has worked as a Non-Executive Advisor on Technology in the Investment amp Retail Banking sector and is currently a Non-Executive Director of TalkTalk Telecom Group PLC and chairs its Cyber-Security Committee
Date of appointment January 2018
Simon RobertsRetail and Operations Director
Skills and experienceSimon joined Sainsburyrsquos and the Operating Board in July 2017 as Central Retail amp Operations Director responsible for Stores Central operation and Logistics In his previous role he was Executive Vice President of Walgreens Boots Alliance and President of Boots with responsibility for commercial and retail operations across the UK and Ireland Prior to Boots Simon was at Marks and Spencer Group PLC where he held operational and customer leadership roles across stores divisions and central operations Simon is also the Non-Executive Chairman at the Institute ofCustomer Service
Date of appointment July 2017
Clodagh MoriartyGroup Chief Digital Officer
Skills and experienceClodagh was appointed Group Chief Digital Officer in June 2018 Clodagh leads the delivery of a consistent and first-rate digital experience for customers across Sainsburyrsquos Argos and Sainsburyrsquos BankClodagh joined Sainsburyrsquos in 2010 from Bain amp Co management consultants where she had gained experience working on a broad range of projects across multiple sectors and countries Following two years as Head of Strategy at Sainsburyrsquosshe moved into Food Commercial as Category Manager for Meal Solutions and then became Head of Online Trading spanning Food General Merchandise and Clothing before being promoted to Director of Online in 2016 In this role Clodagh was instrumental in driving innovation within Groceries Online and launching new initiatives including SmartShop and Chop Chop
Date of appointment June 2018
14
APPENDIX Interim Results 201920 - November 2019
Supplementary financial details
3 Financial calendarQ3 trading statement(15 weeks to 4 January 2020)
Preliminary results(52 weeks to 7 March 2020)
8 January 2020
30 April 2020
1 Weighted average number of shares
The interim dividend datesOrdinary shares
Ex-dividend 14 November 2019Record 15 November 2019Payment 20 December 2019
Product Quality Framework helps us fund investment
PQF cereals case study
BAU savings to offset cost inflation
Strategic cost transformation 5 year plan
Slide Number 43
Financial Services Priorities
Financial Services reshaping the portfolio
Financial Services key targets
Nectar
Slide Number 48
Digital
We will help our customers live well for less
Slide Number 51
Slide Number 52
Guidance for 201920
Retail sales
Sainsburyrsquos sales area and store numbers
Sainsburyrsquos store estate
Sainsburyrsquos investment programme
Retail margin
Group retail
Plc Board
Plc Board
Plc Board
Plc Board
Operating Board
Operating Board
Operating Board
Supplementary financial details
Contacts
Column1
201819
Grocery
19
GM
7
Clothing
1
To resize chart data range drag lower right corner of range
Grocery
GM
Clothing
10 Interim Results 201920 - November 2019
Retail capital expenditure
H1201920
H1201819
Core retail capital expenditureArgos integration capexRetail capital expenditure
248 -
248
24331
274
poundm Retail capital expenditure to
be around pound550m
Retail capital expenditure is expected to be around pound550m-pound600m per annum over the medium term
201920 FY Guidance
Core retail capital expenditure
MaintenanceGrowthEfficiency
pound243m201819
pound248m201920
11 Interim Results 201920 - November 2019
Pensions
Outcome
bull 2018 triennial valuation deficit down to pound538m from pound1055m in 2015
bull Greater asset-backed security for the Scheme
bull Immediate cash payments reduced
bull Reduced risk of over funding and trapped cash
Agreed long term sustainable and flexible funding plan
Annual cash contribution reduces by cpound50m
Annual cash commitment
under old plan
201920 202021 202122 202223
124
48
98
7669
12 Interim Results 201920 - November 2019
Retail free cash flow
2 Interest paid net of interest received interest elements of obligations under finance lease payments and dividends paid on perpetual securities
3 Excludes Argos integration capital expenditure
1 Operating cash flow before changes in working capital and pension contributions
4 Other non-cash includes new leases and lease modifications and fair value movements on derivatives linked to borrowings
Adjusted operating cash flow before changes in working capital1
Decrease in working capital
Pension contribution net interest paid2 corporation tax paidNet cash generated from operating activitiesCash capital expenditure before strategic capex3
Proceeds from disposal of property plant and equipmentRepayments of lease obligations and right-of-use assets direct costsBank capital injectionsDividends and distributions received from JVs net of capital injectionsRetail free cash flowDividends paid on ordinary sharesArgos integration capital expenditure
Repayment of borrowings other non-cash and net interest movements4
Movement in net debt5
Opening net debt including perpetual securities as debtClosing net debt including perpetual securities as debt
Of whichLease LiabilitiesNet Debt excluding Lease Liabilities
poundm ndash Restated for IFRS 161029
296
(279)1046
(243)34
(231)-11
617 (156)
(31)
-
430(7575)(7145)
(5873)(1272)
H1 201819Restated
H1 201920
1034 289
(282)1041 (248)
54 (232)
(35)118
698 (174)
-
44
568(7346)(6778)
(5770)(1008)
201920 FY Guidance
5 Net debt definition now excludes derivatives not linked to borrowings and includes perpetual securities as debt
Capital injections into the Bank are expected to be pound35m
Proceeds from disposal of property are expected to be in line with 201819
Expect underlying retail depreciation and amortisation of around pound12bn including cpound500m right of use asset depreciation
Net debt before fair value movements on derivatives to reduce by at least pound300m
Net finance costs of around pound405m including pound320m lease interest in 201920 following the introduction of IFRS 16
13 Interim Results 201920 - November 2019
1 Net debt definition now excludes derivatives not linked to borrowings and includes perpetual securities as debt2 Net debt (inc perpetual securities) on a post-IFRS 16 basis divided by Group underlying EBITDAR We previously disclosed
adjusted Net debt EBITDAR but net debt on a post-IFRS 16 basis now includes lease liabilities3 FY1819 Net Debt exc Leases of pound1522m compares to the previously reported Net Debt of pound1636m less pound(122)m of finance leases plus pound8m other (predominantly derivatives no longer reported within net debt)
Balance sheet targets
bull Net debt reduction of at least pound750m over the next three years
bull Medium leverage reduction targets- Net debtEBITDAR2 less than 3x
bull Dividend policy changed to 19x underlying eps cover versus 20x
- Adjusting for the impact of IFRS 16
FY1819
Net debt exc Lease liabilities1 (poundm)
FY1516
2125
15223
FY2122
(750)
Target
c800
H1201920
FY201819
Net DebtOf which lease liabilitiesNet Debt exc leases1
(6778) (5770) (1008)
(7346) (5824) (1522)3
poundm
(603)
14 Interim Results 201920 - November 2019
Summary and Outlook
bull Grocery sales improving relative to the market
bull General Merchandise and Clothing outperforming a difficult market
Sainsburyrsquos Meat Fish amp Poultry Value Own Label1
Gains
Losses
Incremental Switching within Sainsburyrsquos
Dec 17 Oct 19
+2Sales
+4Volume
Bread Investing across Own Label Tiers120+ EPP SKUs launched in H1 200 by end 201920
Repackaged and NPD within Premium
New Owned Brand Replacing Basics
NPD within Core+ Responding in Growth Areas
Repackaged Core bySainsburyrsquos
New
New
Improved
Improved
1 Kantar 12 we 6 October 2019 ndash rolling 12 weeks switching within total Market MFP
21 Interim Results 201920 - November 2019
Be competitive
on price
1
Lower prices on key volume lines
In-Store Volume Returns Examples
Chicken Wings 1kg+12 Volume
pound170was pound210
pound050Only
White Pittas x6+15 Volume
Chestnut Mushrooms 250g+45 Volume
pound080Only
1 Pre wave 3 lockdown (started 24th March to 15th June 19) YoY 2 Last 6 weeks since wave 4 lockdown (started 28th August 19) YoY
-4
0
4
8
12
16
-6 -5 -4 -3 -2 -1 0 1 2 3 4 5 6
Change in volumes ()
Pre1 Post2
22 Interim Results 201920 - November 2019
Be competitive
on price
1
We continue to be less dependent on promotions
230 228
207 209
Sainsburyrsquos Promotional Participation
1819 1920 19201819
Morrisons
Sainsburyrsquos
Tesco
Asda
Spend on Deal1
Q1 Q2
1 Source Nielsen 4 weekly data to 21 September 2019
10
20
30
4040
30
20
10Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep
2018 2019
H1 1920
H1 1920 AVERAGE
34 31
22 21
23 Interim Results 201920 - November 2019
Be competitive
on price
1
Improved grocery value
Base Price Index 2
-1
0
1
2
3
Grocery inflation (Kantar)1
-960bps
-550bps
Commodity VI 2
Aug 17 Jan 18 Jun 18 Nov 18 Apr 19 Oct 19
2004 2007 2010 2013 2016 2019
Morrisons
Sainsburyrsquos
Tesco
Asda
Total Market
Mar Apr May Jun Jul Aug Sep Oct2019
1 Kantar City Reads to Oct 20192 Sainsburyrsquos value index based on Brandview SKU matching data to Oct 2019
24 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
25 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Category tier performance
YoY value share change by tier
12 weeks to September 2019
-03
01
-01
-18
52 weeks to March 2019
Branded
PremiumOwn Brand
Branded
StandardOwn Brand
EconomyOwn Brand
02
-08
-04
00PremiumOwn Brand
StandardOwn Brand
EconomyOwn Brand
Source Nielsen Panel Total FMCG Market Universe Total outlets 52wks data to 9 March 2019 and 12wks data to 21 Sept 2019
26 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Premium private label
Taste the Difference re-launch
bull Over 350 products new repackaged or reformulated
bull Premium ready meals growth now outperforming the market
41
25 2419
Sainsburys Morrisons Tesco Asda
Premium Own Label volume share
Source Nielsen Panel Total FMCG 28 weeks data to 21 September 2019 Premium Own Label share of sales by retailer
27 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Distinctive brands
bull 57 of customers have bought Distinctive Brands since launch
bull On track for pound100m incremental sales
bull 37 new brands in H1 across Fresh and Grocery
bull lsquoTaste of the Futurersquo bays launched in 70 stores- 67 incremental sales
Leon
bull 3 year exclusive partnership
bull 14 products launched
28 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Beauty Rollout
bull Now rolled out to over 60 stores- Sales up over 40
bull Customer numbers up 7
bull Spend per customer up 25
bull Beauty range doubled 1200 additional lines
bull Double digit growth differential against the market
29 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Our values make us different
bull Committed to reduce plastic packaging by 50 by 2025
bull First retailer to remove single use plastic produce and bakery bags from our stores
- Launching reusable bags in fruit and veg aisles
bull Investing in our loose produce offer
bull Removed black plastic trays from ready meals
bull Fresh water stands in cafeacutes for customers to refill bottles
UKrsquos first major retailer to make significant commitment to reduce plastic
30 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Argos category and range focus
bull Availability improvement- Argos master range reduced by c30 over 3 years- Eliminating duplication removing low value items- Better availability of key lines in store
bull Rebalancing into higher margin categories- Gaining share in Furniture1
More distinctive rangemore reason to shop at Sainsburyrsquos
Reduced SKU count -20operational efficiencies
Higher cash gross profit +2 YOY
Volumes +8 operational efficiencies
41 Interim Results 201920 - November 2019
Drive efficiency
to invest in the customer
offer
4
BAU savings to offset cost inflation
Manages inflationary pressures
BAU savingsH1 201920
Procurement GNFR
Retail Technology Efficiencies
Retail HRRetail
management structures
Shrink Reduction
42 Interim Results 201920 - November 2019
Drive efficiency
to invest in the customer
offer
4
Strategic cost transformation 5 year plan
Converge Tackle fixed cost
End to end reviews
Retail Operations Marketing and Commercial Operations
Other central support
Logistics and Supply Chain
Project A
Project C
Project D
Shared Services BPO
Property strategy
Project BGNFR procurement
Capital prioritisation
Technology Digital and Corporate Services
pound250-pound350m
pound150-pound250m
pound400-pound600mExecution underway In planning Opportunities identified
pound5bn addressable cost base
43 Interim Results 201920 - November 2019
Grow connected
services
5
44 Interim Results 201920 - November 2019
Grow connected
services
5
Financial Services Priorities
To be the provider of financial services for loyal Sainsburyrsquos and Argos customers
An agile capital and cost efficient provider of simple mobile-led financial services
Vision
Objective
Priorities Reshape Simplify Strengthen
45 Interim Results 201920 - November 2019
Grow connected
services
5
Current Customer Base
Customer Credit Risk Balance Sheet Earnings
Argos Storecards 22m Prime Near Prime
Credit Cards 09m Prime
Personal Loans 05m Prime
Mortgages 9K Exit
Total Lending
Deposits 03m
Insurances 05m Very Low Risk
Travel Money 266 Sites
ATMs 1890
Financial Services reshaping the portfolio
46 Interim Results 201920 - November 2019
Grow connected
services
5
Increase connectivity and value for Group
Stop mortgage acquisition review back book options
No capital input from the Group from now1
Costincome c503 within 5 years
Double UPBT double digit ROCE within 5 years
Upstream cash within 5 years2
Financial Services key targets
Transform the cost base
Improve returns
Financial services cash generative
Reduce risk profile to Group
Stop putting cash in to Financial Services
2
4
6
3
1
5
Focus on Sainsburyrsquos customer base
1 Subject to regulatory changes requirements2 Subject to regulatory approval3 On a Group contribution basis
47 Interim Results 201920 - November 2019
Grow connected
services
5
Nectar
bull Biggest loyalty programme in the UK
bull Over 18 million collectors
bull Most recognised loyalty brand in the UK
bull Launch of Nectar digital- 21 million app users- Increase in overall Nectar participation- Increased levels of personalisation- 138000 new Nectar customers- 1 app on launch weekend
bull Coalition strengthened with addition of Esso in June 2019
48 Interim Results 201920 - November 2019
Provide a seamless customer
experience
6
49 Interim Results 201920 - November 2019
Provide a seamless customer
experience
6
Digital
bull Groceries Online sales penetration of 8- App accounts for over 20 of orders
bull 21 million digital Nectar app users
bull 14 million Argos Financial Services app downloads
bull Smartshop rollout in over 350 stores
Groceries online
Chop Chop
SmartShop
Universaldiscovery
Seamlessfinancialservices
Singlebasket
50 Interim Results 201920 - November 2019
We will help our customers live well for less
Confident in the core Integrated customer offer
One multi brand multi channel business
Strong cash generation supporting investment dividend and allowing deleverage
Financial flexibility and resilience
Sustainable cost reduction covering cost inflation and funding investment in our competitive offer
QampA
APPENDIX Interim Results 201920 - November 2019
Appendices
APPENDIX Interim Results 201920 - November 2019
Guidance for 201920
1
Spacebull Expect to open 2 new Sainsburyrsquos supermarkets and up to 15 convenience storesbull Expect to open around 25 Argos stores in Sainsburyrsquos (of which 11 are
relocations) resulting in around 305 Argos stores in supermarketsbull Expect to close 2 supermarkets around 25 convenience stores and around 20
Argos stores in FY201920 as part of announced property closure programme of 10-15 supermarkets 30-40 convenience stores and 60-70 Argos stores
Financial Servicesbull Financial services underlying operating profit expected to be cpound45m including a
cpound10m benefit as a result of a change in transfer pricing between Argos and Argos Financial Services
bull Financial Services non-underlying costs are expected to be around pound30mbull No further capital injections into the Bank are expected following pound35m in H1 201920
Depreciation and amortisationbull Expect underlying retail depreciation and amortisation of around pound12bn
including cpound500m right of use asset depreciation
CostsOperating cost inflationbull Cost inflation between 2 and 3Cost savingsbull Continue to deliver cost savings to at least offset the impact of cost inflation
Finance costsbull Net finance costs of around pound405m including pound320m lease interest in
201920 following the introduction of IFRS 16
One-off itemsbull In 201920 cash outflows as a result of items excluded from
underlying results should not exceed pound100mbull Property strategy programme one-off costs expected to be
pound230m-pound270m of which cash costs are pound30-40m
Dividendbull Sainsburyrsquos plans to change the full year dividend policy to 19x cover by
underlying earnings (versus 20x previously) to offset the dilutive (non cash) impact of IFRS 16 on underlying earnings
Capital expenditurebull Retail capital expenditure to be around pound550mbull Retail capital expenditure is expected to be around pound550m-pound600m per
annum over the medium term
Net debtbull Net debt before fair value movements on derivatives to reduce by at
least pound300m
Tax ratebull Underlying tax rate to be between 25 and 26
APPENDIX Interim Results 201920 - November 2019
Retail sales
1 Sales including VAT excluding fuel
LFL sales growth1
(10)
Sales from net new space1
04
Total sales growth1
(06)
Supermarkets2
(07)
Convenience20
Groceries Online
70
Channels
(01)(25)
(12)
2 Supermarket sales include Argos SiS sales FY 1819 16
pound139bn
pound103bnGrocery
pound30bnGeneralMerchandise
pound488mClothing
2
Chart1
201819
194
66
1
Sheet1
APPENDIX Interim Results 201920 - November 2019
Sainsburyrsquos sales area and store numbersAs at 21 September 2019
Sainsburyrsquos store estateAs at 21 September 2019
Sq ftsales area
82446
870
40001 to60000
20001 to40000
10000 to20000
Under10000 Total
Over60000
0122122
0197197
0175175
06767
824607
1431
Argos storesArgos in SainsburyrsquosArgos in HomebaseOtherArgos total store numbers
Habitat1
Collection points
594281
8-
883
16317
As at21 Sept 2019
Disposalsclosures
Newstores
As at9 March 2019
17--8
-1
(7)-
(2)-
(9)
-(36)
588288
6-
88216
282
ConvenienceSupermarketsTotal stores
Number of stores
Sq ftsales area
1929350
2279
40001 to60000
20001 to40000
10000 to20000
Under10000 Total
Over60000
-18441844
-58185818
-85018501
-46604660
19292117323102
ConvenienceSupermarketsTotal stores
Space by store size (lsquo000 sq ft)
Argos and Habitat store numbers
1 5 Habitat stores 11 Habitat stores in Sainsburys
4
APPENDIX Interim Results 201920 - November 2019
ClosureBitterne West
Sainsburyrsquos investment programme201920
Q1
Supermarkets ConvenienceNew storesMilton Keynes Brooklands District CentBromley High StLeeds Wike Ridge LaneSalford Harbour CityCanterbury High St
ReplacementMayfair Stratton St
ClosuresMayfairWarren St
Q1Q1Q1Q2Q2
Q2
Q1Q2
5
APPENDIX Interim Results 201920 - November 2019
Retail margin
Retail sales (inc VAT inc fuel)(exc VAT inc fuel)
Retail underlying EBITDAR1
Retail underlying EBITDAR margin 2
at constant fuel pricesRetail underlying operating profit3
Retail underlying operating margin 4
at constant fuel prices
1656714808
10677272
4373030
1661214856
11147575
4873333
030342
30 bps28 bps10333 bps32 bps
1 Retail underlying operating profit before net rental income of pound6 million and underlying depreciation and amortisation of pound636 million2 Retail underlying EBITDAR divided by underlying retail sales excluding VAT3 Retail underlying earnings before interest tax and Sainsburyrsquos underlying share of post-tax profit from joint ventures4 Retail underlying operating profit divided by underlying retail sales excluding VAT
poundm H1201920
H1201819
Change
6
APPENDIX Interim Results 201920 - November 2019
H1201920
H1201819
Group retail
Return on capital employed 1
Net debt to EBITDAR (times)23
Fixed charge cover (times)2
Underlying tax rate Core retail capex sales5
713126
26515
743326
25715
poundm
1 ROCE Return is defined as a 52 week rolling underlying profit before interest and tax Capital employed is defined as group net assets2 Net debt of pound6778 million includes lease obligations under IFRS 16 and perpetual securities treated as debt divided by Group underlying EBITDAR of pound2171 million calculated for a 52-week period to 21 September 20193 Group underlying EBITDAR divided by rent (both capital and interest) and net finance costs where interest on perpetual securities is treated as an underlying finance costs4 52 weeks to 22nd September 2018 is not available due to the implementation of IFRS 16 Comparatives therefore reflect the 52 weeks to 9th March 20195 Includes retail sales inc vat inc fuel
4
4
7
APPENDIX Interim Results 201920 - November 2019
Plc Board
Kevin OrsquoByrneChief Financial Officer
Mike Coupe Group Chief Executive
Dame Susan Rice Senior Independent Director
Matt BrittinNon-Executive Director
Jo HarlowNon-Executive Director
Brian CassinNon-Executive Director
David KeensNon-Executive Director
Jean Tomlin Non-Executive Director
Martin Scicluna Chairman
8
APPENDIX Interim Results 201920 - November 2019
Plc Board
Mike Coupe Group Chief Executive Officer
Skills and experienceAppointed Group Chief Executive Officer on 9 July 2014 Mike has been a member of the Operating Board since October 2004 Mike has vast retail industry experience in trading strategy marketing digital and online as well as multi-site store experience He joined Sainsburyrsquos from Big Food Group where he was a board director of Big Food Group PLC and Managing Director of Iceland Food Stores He previously worked for both Asda and Tesco PLC where he served in a variety of senior management roles
Date of appointment 1 August 2007Mike has served as an Executive Director since 1 August 2007 and as Chief Executive Officer since 9 July 2014
Committee membershipCorporate Responsibility and Sustainability Committee
Kevin OrsquoByrne Chief Financial Officer
Skills and experienceKevin brings to the Board a wealth of retail and finance experience Kevin was previously Chief Executive Officer of Poundland Group Limited until December 2016 and held executive roles at Kingfisher plc from 2008 to 2015 including Divisional Director UK China and Turkey Chief Executive Officer of BampQ UK amp Ireland and Group Finance Director He was previously Group Finance Director of Dixons Retail plc and European Finance Director of Quaker Oats He was a Non-Executive Director of Land Securities Group PLC from 2008 to September 2017 where he was Chairman of the Audit Committee and Senior Independent Director
Date of appointment 9 January 2017
Other current rolesNon-Executive Director of Greene King plc
Skills and experienceMartin brings a breadth of experience and leadership in both executive and non-executive roles His previous roles include positions as the Chairman of Great Portland Estates plc Senior Independent Director and Chair of the Audit Committee of Worldpay Inc and Non-Executive Director and Chair of the Audit Committee of Lloyds Banking Group plc He was a partner at Deloitte LLP for 26 years serving as Chairman from 1995 to 2007 where his clients included Dixons WH Smith Alliance Unichem and Cadburyrsquos
Other current rolesChairman of RSA Insurance Group plc
Martin Scicluna Chairman
Date of appointment 1 November 2018 Martin joined the Board as Chairman Designate and Non-Executive Director on 1 November 2018 He was appointed as Chairman of the Board on 10 March 2019
Committee membershipChair of the Nomination Committee
Dame Susan Rice Senior Independent Director
Skills and experienceSusan has extensive experience as a Non-Executive Director as well as in retail banking financial services leadership and sustainability Her career in retail bankingis particularly relevant to our ownership ofSainsburyrsquos Bank Previously Susan was a member of the First Ministerrsquos Council of Economic Advisors Managing Director of Lloyds Banking Group Scotland and was previously Chief Executive and then Chairman of Lloyds TSB Scotland plc She has also held a range of other non-executive directorships including at the Bank of England and SSE plc
Committee membershipChair of the Remuneration Committee and a member of the Nomination Committee
Date of appointment 1 June 2013
Other current rolesChair of Scottish Water and Business Stream Chair of the Scottish Fiscal Commission Non-Executive Director of the North American Income Trust C Hoare and Co and Senior Independent Director of the North American Income Trust
9
Other current rolesNon-Executive Director and Chairman of the Audit Committee of Centrica plc
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jean Tomlin Non-Executive Director
Skills and experienceJean has extensive experience and breadth of skills in human resources and corporate responsibility Jean was formerly Director of HR Workforce and Accreditation for The London OrganisingCommittee of the Olympic and Paralympic Games where she set the strategic direction to ensure the mobilisation of the combined 200000-strong workforce including paid staff volunteers and contractors which represented the recruitment and mobilisation of the largest peacetime workforce and set the industry standard for volunteering with the highly acclaimed Games She was previously Group HR Director at Marks and Spencer Group Plc HR Director and founder member of Egg plc and Sales amp Operations Director of Prudential Direct
Date of appointment 1 January 2013
Committee membershipAudit Committee Corporate Responsibility and Sustainability Committee and Nomination Committee
David Keens Non-Executive Director
Skills and experienceDavid has extensive retail experience and knowledge of consumer facing businesses together with his core skills in finance David was formerly Group Finance Director of next plc from 1991 to 2015 and their Group Treasurer from 1986 to 1991 Previous management experience includes nine years in the UK and overseas operations of multinational food manufacturer Nabisco and prior to that seven years in the accountancy profession
Date of appointment 29 April 2015
Committee membershipChair of the Audit Committee and a member of the Nomination Committee
Other current rolesIndependent Board member of Capri Holdings Limited Non-Executive Director of Hakluyt and Chief Executive Officer of Chanzo Limited
Other current rolesNon-Executive Director Senior Independent Director and Chair of the Audit Committee of Auto Trader Group plc
Matt BrittinNon-Executive Director
Skills and experienceMatt has extensive experience of running a high profile fast moving innovative digital business Since 2015 he has been responsible for Googlersquos business and operations in Europe the Middle East and Africa and hersquos been in leadership roles at Google since 2007 Prior to that Matt spent much of his career in media and marketing with particular interests in strategy commercial development and sales performance This included commercial and digital leadership roles in UK media
Date of appointment 27 January 2011
Committee membershipNomination Committee and Remuneration Committee
Other current rolesGooglersquos President ndash Europe Middle East and Africa and Director of The Media Trust
Brian Cassin Non-Executive Director
Skills and experienceBrian brings present day experience of running a FTSE40 group and of big data and analytics ndash topics of key importance to Sainsburyrsquos Brian joined Experian plc as Chief Financial Officer in April 2012 a post he held until his appointment as Chief Executive Officer in July 2014 Prior to this Brian spent his career in investment banking at Greenhill amp Co where he was Managing Director and Partner Brian has also held various roles at Baring Brothers International and at the London Stock Exchange
Date of appointment 1 April 2016
Committee membershipAudit Committee and Nomination Committee
Other current rolesChief Executive Officer of Experian plc
10
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jo Harlow Non-Executive Director
Skills and experienceJo brings a wealth of experience in consumer-facing businesses and in the telecoms and technology industry bothin the UK and internationally Jo spent 12 years in a variety of senior management roles with Nokia and Microsoft Prior to this she spent eight years at PampG and 11 years at Reebok in senior sales and marketing positions in both Europe and the US
Date of appointment 11 September 2017
Committee membershipChair of the Corporate Responsibility and Sustainability Committee and member of the Nomination Committee and Remuneration Committee
Life PresidentLord Sainsbury of Preston Candover KG
Other current rolesNon-Executive Director of InterContinental Hotels plc Non-Executive Director of Halmaplc and Member of the Supervisory Board of Ceconomy AG
11
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief Executive
Tim FallowfieldCompany Secretary amp Corporate Services Director
Kevin OrsquoByrne Chief Financial Officer
Jim BrownChief Executive Officer of Sainsburyrsquos Bank
Paul Mills-HicksFood Commercial Director
Angie RisleyGroup HR Director
Phil JordanGroup Chief InformationOfficer
Simon RobertsRetail and Operations Director
Clo MoriartyGroup Chief Digital Officer
12
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief ExecutiveSee Appendix page 9
Kevin OrsquoByrneChief Financial OfficerSee Appendix page 9
Tim FallowfieldCompany Secretary amp Corporate Services Director
Date of appointment September 2004
Skills and experienceTim joined Sainsburyrsquos in 2001 as Company Secretary and joined the Operating Board in September 2004 In addition to his role as Company Secretary Tim is responsible for the Corporate Services Division comprising Legal Services Data Governance Safety Shareholder Services Insurance and Central Security He chairs the Group Safety Committee and the Data Governance Committee Tim joined Sainsburyrsquos from Exelplc the global logistics company now part of DHL where he was Company Secretary and General Counsel He began his career at the international law firm Clifford Chance and is a qualified solicitor Tim is Chairman of the Disability Confident Business Leaders Group which works with Government in shaping the disability employment agenda and in raising awareness of the benefits of employing disabled people
Jim BrownCEO of Sainsburyrsquos Bank
Skills and experienceJim joined Sainsburyrsquos Bank as CEO in June 2019 and is also a member of the Sainsburyrsquos Group Operating Board He has held a number of senior international Financial Services roles - most recently for RBS in the UK as CEO of Williams and Glyn and prior to that CEO of Ulster Bank in Northern Ireland and the Republic of Ireland Before moving to Ireland he was based in Hong Kong and was CEO Retail and Commercial Banking Asia and the Middle East for RBS and ABN AMRO He has also been a member of the RBS Group Management Committee ABN AMRO Executive Group ABN AMRO Global Consumer Leadership Team and the RBSBank of China Joint Steering Committee Earlier in his career he held a number of senior executive roles for Citibank in Asia and Australia and New Zealand Jim has also held various Board positions including at Ulster Bank Saudi Hollandi Bank The Royal Bank of Scotland (China) Co Ltd and RBS (Pakistan) Ltd He is also a past President of the Institute of Banking in Ireland He is currently a Certified Bank Director
Date of appointment August 2019
Paul Mills-HicksFood Commercial Director
Skills and experiencePaul joined the Operating Board in May 2014 as Food Commercial Director having spent over ten years at Sainsburyrsquos He was closely involved in the formation and execution of the lsquoMaking Sainsburyrsquos Great Againrsquo strategy Following this he held a variety of roles in commercial strategy and finance most recently as Business Unit Director for Grocery Prior to Sainsburyrsquos Paul was European Controller at Marks and Spencer Group PLC and a Director at UBS Warburg
Date of appointment May 2014
13
APPENDIX Interim Results 201920 - November 2019
Operating Board
Angie RisleyGroup HR Director
Skills and experienceAngie was appointed Group HR Director and a member of the Operating Board in January 2013 with responsibility for human resources Angie is also a Director of Sainsburyrsquos Bank plc Angie was most recently Non-Executive Director and Chairman of the Remuneration Committee of Serco plc and prior to this was Group HR Director of Lloyds Banking Group and an Executive Director of Whitbread PLC with responsibility for HR and Corporate Social Responsibility Angie is currently Non-Executive Director and Chair of the Remuneration Committee at Smith amp Nephew plc
Date of appointment January 2013
Phil JordanGroup Chief Information Officer
Skills and experiencePhil joined the Board in January 2018 and has brought a fresh globalperspective on technology to the Operating Board in addition to a wealth of experience in digital data and business transformation Prior to joining Sainsburyrsquos Phil had a long and successful track record in telecommunications Most recently he was Global Chief Information Officer at Telefonica overseeing Digital Transformation and Information Technology and prior to that was Chief Information Officer for Vodafone UKIreland Phil has worked as a Non-Executive Advisor on Technology in the Investment amp Retail Banking sector and is currently a Non-Executive Director of TalkTalk Telecom Group PLC and chairs its Cyber-Security Committee
Date of appointment January 2018
Simon RobertsRetail and Operations Director
Skills and experienceSimon joined Sainsburyrsquos and the Operating Board in July 2017 as Central Retail amp Operations Director responsible for Stores Central operation and Logistics In his previous role he was Executive Vice President of Walgreens Boots Alliance and President of Boots with responsibility for commercial and retail operations across the UK and Ireland Prior to Boots Simon was at Marks and Spencer Group PLC where he held operational and customer leadership roles across stores divisions and central operations Simon is also the Non-Executive Chairman at the Institute ofCustomer Service
Date of appointment July 2017
Clodagh MoriartyGroup Chief Digital Officer
Skills and experienceClodagh was appointed Group Chief Digital Officer in June 2018 Clodagh leads the delivery of a consistent and first-rate digital experience for customers across Sainsburyrsquos Argos and Sainsburyrsquos BankClodagh joined Sainsburyrsquos in 2010 from Bain amp Co management consultants where she had gained experience working on a broad range of projects across multiple sectors and countries Following two years as Head of Strategy at Sainsburyrsquosshe moved into Food Commercial as Category Manager for Meal Solutions and then became Head of Online Trading spanning Food General Merchandise and Clothing before being promoted to Director of Online in 2016 In this role Clodagh was instrumental in driving innovation within Groceries Online and launching new initiatives including SmartShop and Chop Chop
Date of appointment June 2018
14
APPENDIX Interim Results 201920 - November 2019
Supplementary financial details
3 Financial calendarQ3 trading statement(15 weeks to 4 January 2020)
Preliminary results(52 weeks to 7 March 2020)
8 January 2020
30 April 2020
1 Weighted average number of shares
The interim dividend datesOrdinary shares
Ex-dividend 14 November 2019Record 15 November 2019Payment 20 December 2019
Product Quality Framework helps us fund investment
PQF cereals case study
BAU savings to offset cost inflation
Strategic cost transformation 5 year plan
Slide Number 43
Financial Services Priorities
Financial Services reshaping the portfolio
Financial Services key targets
Nectar
Slide Number 48
Digital
We will help our customers live well for less
Slide Number 51
Slide Number 52
Guidance for 201920
Retail sales
Sainsburyrsquos sales area and store numbers
Sainsburyrsquos store estate
Sainsburyrsquos investment programme
Retail margin
Group retail
Plc Board
Plc Board
Plc Board
Plc Board
Operating Board
Operating Board
Operating Board
Supplementary financial details
Contacts
Column1
201819
Grocery
19
GM
7
Clothing
1
To resize chart data range drag lower right corner of range
Grocery
GM
Clothing
11 Interim Results 201920 - November 2019
Pensions
Outcome
bull 2018 triennial valuation deficit down to pound538m from pound1055m in 2015
bull Greater asset-backed security for the Scheme
bull Immediate cash payments reduced
bull Reduced risk of over funding and trapped cash
Agreed long term sustainable and flexible funding plan
Annual cash contribution reduces by cpound50m
Annual cash commitment
under old plan
201920 202021 202122 202223
124
48
98
7669
12 Interim Results 201920 - November 2019
Retail free cash flow
2 Interest paid net of interest received interest elements of obligations under finance lease payments and dividends paid on perpetual securities
3 Excludes Argos integration capital expenditure
1 Operating cash flow before changes in working capital and pension contributions
4 Other non-cash includes new leases and lease modifications and fair value movements on derivatives linked to borrowings
Adjusted operating cash flow before changes in working capital1
Decrease in working capital
Pension contribution net interest paid2 corporation tax paidNet cash generated from operating activitiesCash capital expenditure before strategic capex3
Proceeds from disposal of property plant and equipmentRepayments of lease obligations and right-of-use assets direct costsBank capital injectionsDividends and distributions received from JVs net of capital injectionsRetail free cash flowDividends paid on ordinary sharesArgos integration capital expenditure
Repayment of borrowings other non-cash and net interest movements4
Movement in net debt5
Opening net debt including perpetual securities as debtClosing net debt including perpetual securities as debt
Of whichLease LiabilitiesNet Debt excluding Lease Liabilities
poundm ndash Restated for IFRS 161029
296
(279)1046
(243)34
(231)-11
617 (156)
(31)
-
430(7575)(7145)
(5873)(1272)
H1 201819Restated
H1 201920
1034 289
(282)1041 (248)
54 (232)
(35)118
698 (174)
-
44
568(7346)(6778)
(5770)(1008)
201920 FY Guidance
5 Net debt definition now excludes derivatives not linked to borrowings and includes perpetual securities as debt
Capital injections into the Bank are expected to be pound35m
Proceeds from disposal of property are expected to be in line with 201819
Expect underlying retail depreciation and amortisation of around pound12bn including cpound500m right of use asset depreciation
Net debt before fair value movements on derivatives to reduce by at least pound300m
Net finance costs of around pound405m including pound320m lease interest in 201920 following the introduction of IFRS 16
13 Interim Results 201920 - November 2019
1 Net debt definition now excludes derivatives not linked to borrowings and includes perpetual securities as debt2 Net debt (inc perpetual securities) on a post-IFRS 16 basis divided by Group underlying EBITDAR We previously disclosed
adjusted Net debt EBITDAR but net debt on a post-IFRS 16 basis now includes lease liabilities3 FY1819 Net Debt exc Leases of pound1522m compares to the previously reported Net Debt of pound1636m less pound(122)m of finance leases plus pound8m other (predominantly derivatives no longer reported within net debt)
Balance sheet targets
bull Net debt reduction of at least pound750m over the next three years
bull Medium leverage reduction targets- Net debtEBITDAR2 less than 3x
bull Dividend policy changed to 19x underlying eps cover versus 20x
- Adjusting for the impact of IFRS 16
FY1819
Net debt exc Lease liabilities1 (poundm)
FY1516
2125
15223
FY2122
(750)
Target
c800
H1201920
FY201819
Net DebtOf which lease liabilitiesNet Debt exc leases1
(6778) (5770) (1008)
(7346) (5824) (1522)3
poundm
(603)
14 Interim Results 201920 - November 2019
Summary and Outlook
bull Grocery sales improving relative to the market
bull General Merchandise and Clothing outperforming a difficult market
Sainsburyrsquos Meat Fish amp Poultry Value Own Label1
Gains
Losses
Incremental Switching within Sainsburyrsquos
Dec 17 Oct 19
+2Sales
+4Volume
Bread Investing across Own Label Tiers120+ EPP SKUs launched in H1 200 by end 201920
Repackaged and NPD within Premium
New Owned Brand Replacing Basics
NPD within Core+ Responding in Growth Areas
Repackaged Core bySainsburyrsquos
New
New
Improved
Improved
1 Kantar 12 we 6 October 2019 ndash rolling 12 weeks switching within total Market MFP
21 Interim Results 201920 - November 2019
Be competitive
on price
1
Lower prices on key volume lines
In-Store Volume Returns Examples
Chicken Wings 1kg+12 Volume
pound170was pound210
pound050Only
White Pittas x6+15 Volume
Chestnut Mushrooms 250g+45 Volume
pound080Only
1 Pre wave 3 lockdown (started 24th March to 15th June 19) YoY 2 Last 6 weeks since wave 4 lockdown (started 28th August 19) YoY
-4
0
4
8
12
16
-6 -5 -4 -3 -2 -1 0 1 2 3 4 5 6
Change in volumes ()
Pre1 Post2
22 Interim Results 201920 - November 2019
Be competitive
on price
1
We continue to be less dependent on promotions
230 228
207 209
Sainsburyrsquos Promotional Participation
1819 1920 19201819
Morrisons
Sainsburyrsquos
Tesco
Asda
Spend on Deal1
Q1 Q2
1 Source Nielsen 4 weekly data to 21 September 2019
10
20
30
4040
30
20
10Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep
2018 2019
H1 1920
H1 1920 AVERAGE
34 31
22 21
23 Interim Results 201920 - November 2019
Be competitive
on price
1
Improved grocery value
Base Price Index 2
-1
0
1
2
3
Grocery inflation (Kantar)1
-960bps
-550bps
Commodity VI 2
Aug 17 Jan 18 Jun 18 Nov 18 Apr 19 Oct 19
2004 2007 2010 2013 2016 2019
Morrisons
Sainsburyrsquos
Tesco
Asda
Total Market
Mar Apr May Jun Jul Aug Sep Oct2019
1 Kantar City Reads to Oct 20192 Sainsburyrsquos value index based on Brandview SKU matching data to Oct 2019
24 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
25 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Category tier performance
YoY value share change by tier
12 weeks to September 2019
-03
01
-01
-18
52 weeks to March 2019
Branded
PremiumOwn Brand
Branded
StandardOwn Brand
EconomyOwn Brand
02
-08
-04
00PremiumOwn Brand
StandardOwn Brand
EconomyOwn Brand
Source Nielsen Panel Total FMCG Market Universe Total outlets 52wks data to 9 March 2019 and 12wks data to 21 Sept 2019
26 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Premium private label
Taste the Difference re-launch
bull Over 350 products new repackaged or reformulated
bull Premium ready meals growth now outperforming the market
41
25 2419
Sainsburys Morrisons Tesco Asda
Premium Own Label volume share
Source Nielsen Panel Total FMCG 28 weeks data to 21 September 2019 Premium Own Label share of sales by retailer
27 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Distinctive brands
bull 57 of customers have bought Distinctive Brands since launch
bull On track for pound100m incremental sales
bull 37 new brands in H1 across Fresh and Grocery
bull lsquoTaste of the Futurersquo bays launched in 70 stores- 67 incremental sales
Leon
bull 3 year exclusive partnership
bull 14 products launched
28 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Beauty Rollout
bull Now rolled out to over 60 stores- Sales up over 40
bull Customer numbers up 7
bull Spend per customer up 25
bull Beauty range doubled 1200 additional lines
bull Double digit growth differential against the market
29 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Our values make us different
bull Committed to reduce plastic packaging by 50 by 2025
bull First retailer to remove single use plastic produce and bakery bags from our stores
- Launching reusable bags in fruit and veg aisles
bull Investing in our loose produce offer
bull Removed black plastic trays from ready meals
bull Fresh water stands in cafeacutes for customers to refill bottles
UKrsquos first major retailer to make significant commitment to reduce plastic
30 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Argos category and range focus
bull Availability improvement- Argos master range reduced by c30 over 3 years- Eliminating duplication removing low value items- Better availability of key lines in store
bull Rebalancing into higher margin categories- Gaining share in Furniture1
More distinctive rangemore reason to shop at Sainsburyrsquos
Reduced SKU count -20operational efficiencies
Higher cash gross profit +2 YOY
Volumes +8 operational efficiencies
41 Interim Results 201920 - November 2019
Drive efficiency
to invest in the customer
offer
4
BAU savings to offset cost inflation
Manages inflationary pressures
BAU savingsH1 201920
Procurement GNFR
Retail Technology Efficiencies
Retail HRRetail
management structures
Shrink Reduction
42 Interim Results 201920 - November 2019
Drive efficiency
to invest in the customer
offer
4
Strategic cost transformation 5 year plan
Converge Tackle fixed cost
End to end reviews
Retail Operations Marketing and Commercial Operations
Other central support
Logistics and Supply Chain
Project A
Project C
Project D
Shared Services BPO
Property strategy
Project BGNFR procurement
Capital prioritisation
Technology Digital and Corporate Services
pound250-pound350m
pound150-pound250m
pound400-pound600mExecution underway In planning Opportunities identified
pound5bn addressable cost base
43 Interim Results 201920 - November 2019
Grow connected
services
5
44 Interim Results 201920 - November 2019
Grow connected
services
5
Financial Services Priorities
To be the provider of financial services for loyal Sainsburyrsquos and Argos customers
An agile capital and cost efficient provider of simple mobile-led financial services
Vision
Objective
Priorities Reshape Simplify Strengthen
45 Interim Results 201920 - November 2019
Grow connected
services
5
Current Customer Base
Customer Credit Risk Balance Sheet Earnings
Argos Storecards 22m Prime Near Prime
Credit Cards 09m Prime
Personal Loans 05m Prime
Mortgages 9K Exit
Total Lending
Deposits 03m
Insurances 05m Very Low Risk
Travel Money 266 Sites
ATMs 1890
Financial Services reshaping the portfolio
46 Interim Results 201920 - November 2019
Grow connected
services
5
Increase connectivity and value for Group
Stop mortgage acquisition review back book options
No capital input from the Group from now1
Costincome c503 within 5 years
Double UPBT double digit ROCE within 5 years
Upstream cash within 5 years2
Financial Services key targets
Transform the cost base
Improve returns
Financial services cash generative
Reduce risk profile to Group
Stop putting cash in to Financial Services
2
4
6
3
1
5
Focus on Sainsburyrsquos customer base
1 Subject to regulatory changes requirements2 Subject to regulatory approval3 On a Group contribution basis
47 Interim Results 201920 - November 2019
Grow connected
services
5
Nectar
bull Biggest loyalty programme in the UK
bull Over 18 million collectors
bull Most recognised loyalty brand in the UK
bull Launch of Nectar digital- 21 million app users- Increase in overall Nectar participation- Increased levels of personalisation- 138000 new Nectar customers- 1 app on launch weekend
bull Coalition strengthened with addition of Esso in June 2019
48 Interim Results 201920 - November 2019
Provide a seamless customer
experience
6
49 Interim Results 201920 - November 2019
Provide a seamless customer
experience
6
Digital
bull Groceries Online sales penetration of 8- App accounts for over 20 of orders
bull 21 million digital Nectar app users
bull 14 million Argos Financial Services app downloads
bull Smartshop rollout in over 350 stores
Groceries online
Chop Chop
SmartShop
Universaldiscovery
Seamlessfinancialservices
Singlebasket
50 Interim Results 201920 - November 2019
We will help our customers live well for less
Confident in the core Integrated customer offer
One multi brand multi channel business
Strong cash generation supporting investment dividend and allowing deleverage
Financial flexibility and resilience
Sustainable cost reduction covering cost inflation and funding investment in our competitive offer
QampA
APPENDIX Interim Results 201920 - November 2019
Appendices
APPENDIX Interim Results 201920 - November 2019
Guidance for 201920
1
Spacebull Expect to open 2 new Sainsburyrsquos supermarkets and up to 15 convenience storesbull Expect to open around 25 Argos stores in Sainsburyrsquos (of which 11 are
relocations) resulting in around 305 Argos stores in supermarketsbull Expect to close 2 supermarkets around 25 convenience stores and around 20
Argos stores in FY201920 as part of announced property closure programme of 10-15 supermarkets 30-40 convenience stores and 60-70 Argos stores
Financial Servicesbull Financial services underlying operating profit expected to be cpound45m including a
cpound10m benefit as a result of a change in transfer pricing between Argos and Argos Financial Services
bull Financial Services non-underlying costs are expected to be around pound30mbull No further capital injections into the Bank are expected following pound35m in H1 201920
Depreciation and amortisationbull Expect underlying retail depreciation and amortisation of around pound12bn
including cpound500m right of use asset depreciation
CostsOperating cost inflationbull Cost inflation between 2 and 3Cost savingsbull Continue to deliver cost savings to at least offset the impact of cost inflation
Finance costsbull Net finance costs of around pound405m including pound320m lease interest in
201920 following the introduction of IFRS 16
One-off itemsbull In 201920 cash outflows as a result of items excluded from
underlying results should not exceed pound100mbull Property strategy programme one-off costs expected to be
pound230m-pound270m of which cash costs are pound30-40m
Dividendbull Sainsburyrsquos plans to change the full year dividend policy to 19x cover by
underlying earnings (versus 20x previously) to offset the dilutive (non cash) impact of IFRS 16 on underlying earnings
Capital expenditurebull Retail capital expenditure to be around pound550mbull Retail capital expenditure is expected to be around pound550m-pound600m per
annum over the medium term
Net debtbull Net debt before fair value movements on derivatives to reduce by at
least pound300m
Tax ratebull Underlying tax rate to be between 25 and 26
APPENDIX Interim Results 201920 - November 2019
Retail sales
1 Sales including VAT excluding fuel
LFL sales growth1
(10)
Sales from net new space1
04
Total sales growth1
(06)
Supermarkets2
(07)
Convenience20
Groceries Online
70
Channels
(01)(25)
(12)
2 Supermarket sales include Argos SiS sales FY 1819 16
pound139bn
pound103bnGrocery
pound30bnGeneralMerchandise
pound488mClothing
2
Chart1
201819
194
66
1
Sheet1
APPENDIX Interim Results 201920 - November 2019
Sainsburyrsquos sales area and store numbersAs at 21 September 2019
Sainsburyrsquos store estateAs at 21 September 2019
Sq ftsales area
82446
870
40001 to60000
20001 to40000
10000 to20000
Under10000 Total
Over60000
0122122
0197197
0175175
06767
824607
1431
Argos storesArgos in SainsburyrsquosArgos in HomebaseOtherArgos total store numbers
Habitat1
Collection points
594281
8-
883
16317
As at21 Sept 2019
Disposalsclosures
Newstores
As at9 March 2019
17--8
-1
(7)-
(2)-
(9)
-(36)
588288
6-
88216
282
ConvenienceSupermarketsTotal stores
Number of stores
Sq ftsales area
1929350
2279
40001 to60000
20001 to40000
10000 to20000
Under10000 Total
Over60000
-18441844
-58185818
-85018501
-46604660
19292117323102
ConvenienceSupermarketsTotal stores
Space by store size (lsquo000 sq ft)
Argos and Habitat store numbers
1 5 Habitat stores 11 Habitat stores in Sainsburys
4
APPENDIX Interim Results 201920 - November 2019
ClosureBitterne West
Sainsburyrsquos investment programme201920
Q1
Supermarkets ConvenienceNew storesMilton Keynes Brooklands District CentBromley High StLeeds Wike Ridge LaneSalford Harbour CityCanterbury High St
ReplacementMayfair Stratton St
ClosuresMayfairWarren St
Q1Q1Q1Q2Q2
Q2
Q1Q2
5
APPENDIX Interim Results 201920 - November 2019
Retail margin
Retail sales (inc VAT inc fuel)(exc VAT inc fuel)
Retail underlying EBITDAR1
Retail underlying EBITDAR margin 2
at constant fuel pricesRetail underlying operating profit3
Retail underlying operating margin 4
at constant fuel prices
1656714808
10677272
4373030
1661214856
11147575
4873333
030342
30 bps28 bps10333 bps32 bps
1 Retail underlying operating profit before net rental income of pound6 million and underlying depreciation and amortisation of pound636 million2 Retail underlying EBITDAR divided by underlying retail sales excluding VAT3 Retail underlying earnings before interest tax and Sainsburyrsquos underlying share of post-tax profit from joint ventures4 Retail underlying operating profit divided by underlying retail sales excluding VAT
poundm H1201920
H1201819
Change
6
APPENDIX Interim Results 201920 - November 2019
H1201920
H1201819
Group retail
Return on capital employed 1
Net debt to EBITDAR (times)23
Fixed charge cover (times)2
Underlying tax rate Core retail capex sales5
713126
26515
743326
25715
poundm
1 ROCE Return is defined as a 52 week rolling underlying profit before interest and tax Capital employed is defined as group net assets2 Net debt of pound6778 million includes lease obligations under IFRS 16 and perpetual securities treated as debt divided by Group underlying EBITDAR of pound2171 million calculated for a 52-week period to 21 September 20193 Group underlying EBITDAR divided by rent (both capital and interest) and net finance costs where interest on perpetual securities is treated as an underlying finance costs4 52 weeks to 22nd September 2018 is not available due to the implementation of IFRS 16 Comparatives therefore reflect the 52 weeks to 9th March 20195 Includes retail sales inc vat inc fuel
4
4
7
APPENDIX Interim Results 201920 - November 2019
Plc Board
Kevin OrsquoByrneChief Financial Officer
Mike Coupe Group Chief Executive
Dame Susan Rice Senior Independent Director
Matt BrittinNon-Executive Director
Jo HarlowNon-Executive Director
Brian CassinNon-Executive Director
David KeensNon-Executive Director
Jean Tomlin Non-Executive Director
Martin Scicluna Chairman
8
APPENDIX Interim Results 201920 - November 2019
Plc Board
Mike Coupe Group Chief Executive Officer
Skills and experienceAppointed Group Chief Executive Officer on 9 July 2014 Mike has been a member of the Operating Board since October 2004 Mike has vast retail industry experience in trading strategy marketing digital and online as well as multi-site store experience He joined Sainsburyrsquos from Big Food Group where he was a board director of Big Food Group PLC and Managing Director of Iceland Food Stores He previously worked for both Asda and Tesco PLC where he served in a variety of senior management roles
Date of appointment 1 August 2007Mike has served as an Executive Director since 1 August 2007 and as Chief Executive Officer since 9 July 2014
Committee membershipCorporate Responsibility and Sustainability Committee
Kevin OrsquoByrne Chief Financial Officer
Skills and experienceKevin brings to the Board a wealth of retail and finance experience Kevin was previously Chief Executive Officer of Poundland Group Limited until December 2016 and held executive roles at Kingfisher plc from 2008 to 2015 including Divisional Director UK China and Turkey Chief Executive Officer of BampQ UK amp Ireland and Group Finance Director He was previously Group Finance Director of Dixons Retail plc and European Finance Director of Quaker Oats He was a Non-Executive Director of Land Securities Group PLC from 2008 to September 2017 where he was Chairman of the Audit Committee and Senior Independent Director
Date of appointment 9 January 2017
Other current rolesNon-Executive Director of Greene King plc
Skills and experienceMartin brings a breadth of experience and leadership in both executive and non-executive roles His previous roles include positions as the Chairman of Great Portland Estates plc Senior Independent Director and Chair of the Audit Committee of Worldpay Inc and Non-Executive Director and Chair of the Audit Committee of Lloyds Banking Group plc He was a partner at Deloitte LLP for 26 years serving as Chairman from 1995 to 2007 where his clients included Dixons WH Smith Alliance Unichem and Cadburyrsquos
Other current rolesChairman of RSA Insurance Group plc
Martin Scicluna Chairman
Date of appointment 1 November 2018 Martin joined the Board as Chairman Designate and Non-Executive Director on 1 November 2018 He was appointed as Chairman of the Board on 10 March 2019
Committee membershipChair of the Nomination Committee
Dame Susan Rice Senior Independent Director
Skills and experienceSusan has extensive experience as a Non-Executive Director as well as in retail banking financial services leadership and sustainability Her career in retail bankingis particularly relevant to our ownership ofSainsburyrsquos Bank Previously Susan was a member of the First Ministerrsquos Council of Economic Advisors Managing Director of Lloyds Banking Group Scotland and was previously Chief Executive and then Chairman of Lloyds TSB Scotland plc She has also held a range of other non-executive directorships including at the Bank of England and SSE plc
Committee membershipChair of the Remuneration Committee and a member of the Nomination Committee
Date of appointment 1 June 2013
Other current rolesChair of Scottish Water and Business Stream Chair of the Scottish Fiscal Commission Non-Executive Director of the North American Income Trust C Hoare and Co and Senior Independent Director of the North American Income Trust
9
Other current rolesNon-Executive Director and Chairman of the Audit Committee of Centrica plc
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jean Tomlin Non-Executive Director
Skills and experienceJean has extensive experience and breadth of skills in human resources and corporate responsibility Jean was formerly Director of HR Workforce and Accreditation for The London OrganisingCommittee of the Olympic and Paralympic Games where she set the strategic direction to ensure the mobilisation of the combined 200000-strong workforce including paid staff volunteers and contractors which represented the recruitment and mobilisation of the largest peacetime workforce and set the industry standard for volunteering with the highly acclaimed Games She was previously Group HR Director at Marks and Spencer Group Plc HR Director and founder member of Egg plc and Sales amp Operations Director of Prudential Direct
Date of appointment 1 January 2013
Committee membershipAudit Committee Corporate Responsibility and Sustainability Committee and Nomination Committee
David Keens Non-Executive Director
Skills and experienceDavid has extensive retail experience and knowledge of consumer facing businesses together with his core skills in finance David was formerly Group Finance Director of next plc from 1991 to 2015 and their Group Treasurer from 1986 to 1991 Previous management experience includes nine years in the UK and overseas operations of multinational food manufacturer Nabisco and prior to that seven years in the accountancy profession
Date of appointment 29 April 2015
Committee membershipChair of the Audit Committee and a member of the Nomination Committee
Other current rolesIndependent Board member of Capri Holdings Limited Non-Executive Director of Hakluyt and Chief Executive Officer of Chanzo Limited
Other current rolesNon-Executive Director Senior Independent Director and Chair of the Audit Committee of Auto Trader Group plc
Matt BrittinNon-Executive Director
Skills and experienceMatt has extensive experience of running a high profile fast moving innovative digital business Since 2015 he has been responsible for Googlersquos business and operations in Europe the Middle East and Africa and hersquos been in leadership roles at Google since 2007 Prior to that Matt spent much of his career in media and marketing with particular interests in strategy commercial development and sales performance This included commercial and digital leadership roles in UK media
Date of appointment 27 January 2011
Committee membershipNomination Committee and Remuneration Committee
Other current rolesGooglersquos President ndash Europe Middle East and Africa and Director of The Media Trust
Brian Cassin Non-Executive Director
Skills and experienceBrian brings present day experience of running a FTSE40 group and of big data and analytics ndash topics of key importance to Sainsburyrsquos Brian joined Experian plc as Chief Financial Officer in April 2012 a post he held until his appointment as Chief Executive Officer in July 2014 Prior to this Brian spent his career in investment banking at Greenhill amp Co where he was Managing Director and Partner Brian has also held various roles at Baring Brothers International and at the London Stock Exchange
Date of appointment 1 April 2016
Committee membershipAudit Committee and Nomination Committee
Other current rolesChief Executive Officer of Experian plc
10
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jo Harlow Non-Executive Director
Skills and experienceJo brings a wealth of experience in consumer-facing businesses and in the telecoms and technology industry bothin the UK and internationally Jo spent 12 years in a variety of senior management roles with Nokia and Microsoft Prior to this she spent eight years at PampG and 11 years at Reebok in senior sales and marketing positions in both Europe and the US
Date of appointment 11 September 2017
Committee membershipChair of the Corporate Responsibility and Sustainability Committee and member of the Nomination Committee and Remuneration Committee
Life PresidentLord Sainsbury of Preston Candover KG
Other current rolesNon-Executive Director of InterContinental Hotels plc Non-Executive Director of Halmaplc and Member of the Supervisory Board of Ceconomy AG
11
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief Executive
Tim FallowfieldCompany Secretary amp Corporate Services Director
Kevin OrsquoByrne Chief Financial Officer
Jim BrownChief Executive Officer of Sainsburyrsquos Bank
Paul Mills-HicksFood Commercial Director
Angie RisleyGroup HR Director
Phil JordanGroup Chief InformationOfficer
Simon RobertsRetail and Operations Director
Clo MoriartyGroup Chief Digital Officer
12
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief ExecutiveSee Appendix page 9
Kevin OrsquoByrneChief Financial OfficerSee Appendix page 9
Tim FallowfieldCompany Secretary amp Corporate Services Director
Date of appointment September 2004
Skills and experienceTim joined Sainsburyrsquos in 2001 as Company Secretary and joined the Operating Board in September 2004 In addition to his role as Company Secretary Tim is responsible for the Corporate Services Division comprising Legal Services Data Governance Safety Shareholder Services Insurance and Central Security He chairs the Group Safety Committee and the Data Governance Committee Tim joined Sainsburyrsquos from Exelplc the global logistics company now part of DHL where he was Company Secretary and General Counsel He began his career at the international law firm Clifford Chance and is a qualified solicitor Tim is Chairman of the Disability Confident Business Leaders Group which works with Government in shaping the disability employment agenda and in raising awareness of the benefits of employing disabled people
Jim BrownCEO of Sainsburyrsquos Bank
Skills and experienceJim joined Sainsburyrsquos Bank as CEO in June 2019 and is also a member of the Sainsburyrsquos Group Operating Board He has held a number of senior international Financial Services roles - most recently for RBS in the UK as CEO of Williams and Glyn and prior to that CEO of Ulster Bank in Northern Ireland and the Republic of Ireland Before moving to Ireland he was based in Hong Kong and was CEO Retail and Commercial Banking Asia and the Middle East for RBS and ABN AMRO He has also been a member of the RBS Group Management Committee ABN AMRO Executive Group ABN AMRO Global Consumer Leadership Team and the RBSBank of China Joint Steering Committee Earlier in his career he held a number of senior executive roles for Citibank in Asia and Australia and New Zealand Jim has also held various Board positions including at Ulster Bank Saudi Hollandi Bank The Royal Bank of Scotland (China) Co Ltd and RBS (Pakistan) Ltd He is also a past President of the Institute of Banking in Ireland He is currently a Certified Bank Director
Date of appointment August 2019
Paul Mills-HicksFood Commercial Director
Skills and experiencePaul joined the Operating Board in May 2014 as Food Commercial Director having spent over ten years at Sainsburyrsquos He was closely involved in the formation and execution of the lsquoMaking Sainsburyrsquos Great Againrsquo strategy Following this he held a variety of roles in commercial strategy and finance most recently as Business Unit Director for Grocery Prior to Sainsburyrsquos Paul was European Controller at Marks and Spencer Group PLC and a Director at UBS Warburg
Date of appointment May 2014
13
APPENDIX Interim Results 201920 - November 2019
Operating Board
Angie RisleyGroup HR Director
Skills and experienceAngie was appointed Group HR Director and a member of the Operating Board in January 2013 with responsibility for human resources Angie is also a Director of Sainsburyrsquos Bank plc Angie was most recently Non-Executive Director and Chairman of the Remuneration Committee of Serco plc and prior to this was Group HR Director of Lloyds Banking Group and an Executive Director of Whitbread PLC with responsibility for HR and Corporate Social Responsibility Angie is currently Non-Executive Director and Chair of the Remuneration Committee at Smith amp Nephew plc
Date of appointment January 2013
Phil JordanGroup Chief Information Officer
Skills and experiencePhil joined the Board in January 2018 and has brought a fresh globalperspective on technology to the Operating Board in addition to a wealth of experience in digital data and business transformation Prior to joining Sainsburyrsquos Phil had a long and successful track record in telecommunications Most recently he was Global Chief Information Officer at Telefonica overseeing Digital Transformation and Information Technology and prior to that was Chief Information Officer for Vodafone UKIreland Phil has worked as a Non-Executive Advisor on Technology in the Investment amp Retail Banking sector and is currently a Non-Executive Director of TalkTalk Telecom Group PLC and chairs its Cyber-Security Committee
Date of appointment January 2018
Simon RobertsRetail and Operations Director
Skills and experienceSimon joined Sainsburyrsquos and the Operating Board in July 2017 as Central Retail amp Operations Director responsible for Stores Central operation and Logistics In his previous role he was Executive Vice President of Walgreens Boots Alliance and President of Boots with responsibility for commercial and retail operations across the UK and Ireland Prior to Boots Simon was at Marks and Spencer Group PLC where he held operational and customer leadership roles across stores divisions and central operations Simon is also the Non-Executive Chairman at the Institute ofCustomer Service
Date of appointment July 2017
Clodagh MoriartyGroup Chief Digital Officer
Skills and experienceClodagh was appointed Group Chief Digital Officer in June 2018 Clodagh leads the delivery of a consistent and first-rate digital experience for customers across Sainsburyrsquos Argos and Sainsburyrsquos BankClodagh joined Sainsburyrsquos in 2010 from Bain amp Co management consultants where she had gained experience working on a broad range of projects across multiple sectors and countries Following two years as Head of Strategy at Sainsburyrsquosshe moved into Food Commercial as Category Manager for Meal Solutions and then became Head of Online Trading spanning Food General Merchandise and Clothing before being promoted to Director of Online in 2016 In this role Clodagh was instrumental in driving innovation within Groceries Online and launching new initiatives including SmartShop and Chop Chop
Date of appointment June 2018
14
APPENDIX Interim Results 201920 - November 2019
Supplementary financial details
3 Financial calendarQ3 trading statement(15 weeks to 4 January 2020)
Preliminary results(52 weeks to 7 March 2020)
8 January 2020
30 April 2020
1 Weighted average number of shares
The interim dividend datesOrdinary shares
Ex-dividend 14 November 2019Record 15 November 2019Payment 20 December 2019
Product Quality Framework helps us fund investment
PQF cereals case study
BAU savings to offset cost inflation
Strategic cost transformation 5 year plan
Slide Number 43
Financial Services Priorities
Financial Services reshaping the portfolio
Financial Services key targets
Nectar
Slide Number 48
Digital
We will help our customers live well for less
Slide Number 51
Slide Number 52
Guidance for 201920
Retail sales
Sainsburyrsquos sales area and store numbers
Sainsburyrsquos store estate
Sainsburyrsquos investment programme
Retail margin
Group retail
Plc Board
Plc Board
Plc Board
Plc Board
Operating Board
Operating Board
Operating Board
Supplementary financial details
Contacts
Column1
201819
Grocery
19
GM
7
Clothing
1
To resize chart data range drag lower right corner of range
Grocery
GM
Clothing
12 Interim Results 201920 - November 2019
Retail free cash flow
2 Interest paid net of interest received interest elements of obligations under finance lease payments and dividends paid on perpetual securities
3 Excludes Argos integration capital expenditure
1 Operating cash flow before changes in working capital and pension contributions
4 Other non-cash includes new leases and lease modifications and fair value movements on derivatives linked to borrowings
Adjusted operating cash flow before changes in working capital1
Decrease in working capital
Pension contribution net interest paid2 corporation tax paidNet cash generated from operating activitiesCash capital expenditure before strategic capex3
Proceeds from disposal of property plant and equipmentRepayments of lease obligations and right-of-use assets direct costsBank capital injectionsDividends and distributions received from JVs net of capital injectionsRetail free cash flowDividends paid on ordinary sharesArgos integration capital expenditure
Repayment of borrowings other non-cash and net interest movements4
Movement in net debt5
Opening net debt including perpetual securities as debtClosing net debt including perpetual securities as debt
Of whichLease LiabilitiesNet Debt excluding Lease Liabilities
poundm ndash Restated for IFRS 161029
296
(279)1046
(243)34
(231)-11
617 (156)
(31)
-
430(7575)(7145)
(5873)(1272)
H1 201819Restated
H1 201920
1034 289
(282)1041 (248)
54 (232)
(35)118
698 (174)
-
44
568(7346)(6778)
(5770)(1008)
201920 FY Guidance
5 Net debt definition now excludes derivatives not linked to borrowings and includes perpetual securities as debt
Capital injections into the Bank are expected to be pound35m
Proceeds from disposal of property are expected to be in line with 201819
Expect underlying retail depreciation and amortisation of around pound12bn including cpound500m right of use asset depreciation
Net debt before fair value movements on derivatives to reduce by at least pound300m
Net finance costs of around pound405m including pound320m lease interest in 201920 following the introduction of IFRS 16
13 Interim Results 201920 - November 2019
1 Net debt definition now excludes derivatives not linked to borrowings and includes perpetual securities as debt2 Net debt (inc perpetual securities) on a post-IFRS 16 basis divided by Group underlying EBITDAR We previously disclosed
adjusted Net debt EBITDAR but net debt on a post-IFRS 16 basis now includes lease liabilities3 FY1819 Net Debt exc Leases of pound1522m compares to the previously reported Net Debt of pound1636m less pound(122)m of finance leases plus pound8m other (predominantly derivatives no longer reported within net debt)
Balance sheet targets
bull Net debt reduction of at least pound750m over the next three years
bull Medium leverage reduction targets- Net debtEBITDAR2 less than 3x
bull Dividend policy changed to 19x underlying eps cover versus 20x
- Adjusting for the impact of IFRS 16
FY1819
Net debt exc Lease liabilities1 (poundm)
FY1516
2125
15223
FY2122
(750)
Target
c800
H1201920
FY201819
Net DebtOf which lease liabilitiesNet Debt exc leases1
(6778) (5770) (1008)
(7346) (5824) (1522)3
poundm
(603)
14 Interim Results 201920 - November 2019
Summary and Outlook
bull Grocery sales improving relative to the market
bull General Merchandise and Clothing outperforming a difficult market
Sainsburyrsquos Meat Fish amp Poultry Value Own Label1
Gains
Losses
Incremental Switching within Sainsburyrsquos
Dec 17 Oct 19
+2Sales
+4Volume
Bread Investing across Own Label Tiers120+ EPP SKUs launched in H1 200 by end 201920
Repackaged and NPD within Premium
New Owned Brand Replacing Basics
NPD within Core+ Responding in Growth Areas
Repackaged Core bySainsburyrsquos
New
New
Improved
Improved
1 Kantar 12 we 6 October 2019 ndash rolling 12 weeks switching within total Market MFP
21 Interim Results 201920 - November 2019
Be competitive
on price
1
Lower prices on key volume lines
In-Store Volume Returns Examples
Chicken Wings 1kg+12 Volume
pound170was pound210
pound050Only
White Pittas x6+15 Volume
Chestnut Mushrooms 250g+45 Volume
pound080Only
1 Pre wave 3 lockdown (started 24th March to 15th June 19) YoY 2 Last 6 weeks since wave 4 lockdown (started 28th August 19) YoY
-4
0
4
8
12
16
-6 -5 -4 -3 -2 -1 0 1 2 3 4 5 6
Change in volumes ()
Pre1 Post2
22 Interim Results 201920 - November 2019
Be competitive
on price
1
We continue to be less dependent on promotions
230 228
207 209
Sainsburyrsquos Promotional Participation
1819 1920 19201819
Morrisons
Sainsburyrsquos
Tesco
Asda
Spend on Deal1
Q1 Q2
1 Source Nielsen 4 weekly data to 21 September 2019
10
20
30
4040
30
20
10Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep
2018 2019
H1 1920
H1 1920 AVERAGE
34 31
22 21
23 Interim Results 201920 - November 2019
Be competitive
on price
1
Improved grocery value
Base Price Index 2
-1
0
1
2
3
Grocery inflation (Kantar)1
-960bps
-550bps
Commodity VI 2
Aug 17 Jan 18 Jun 18 Nov 18 Apr 19 Oct 19
2004 2007 2010 2013 2016 2019
Morrisons
Sainsburyrsquos
Tesco
Asda
Total Market
Mar Apr May Jun Jul Aug Sep Oct2019
1 Kantar City Reads to Oct 20192 Sainsburyrsquos value index based on Brandview SKU matching data to Oct 2019
24 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
25 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Category tier performance
YoY value share change by tier
12 weeks to September 2019
-03
01
-01
-18
52 weeks to March 2019
Branded
PremiumOwn Brand
Branded
StandardOwn Brand
EconomyOwn Brand
02
-08
-04
00PremiumOwn Brand
StandardOwn Brand
EconomyOwn Brand
Source Nielsen Panel Total FMCG Market Universe Total outlets 52wks data to 9 March 2019 and 12wks data to 21 Sept 2019
26 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Premium private label
Taste the Difference re-launch
bull Over 350 products new repackaged or reformulated
bull Premium ready meals growth now outperforming the market
41
25 2419
Sainsburys Morrisons Tesco Asda
Premium Own Label volume share
Source Nielsen Panel Total FMCG 28 weeks data to 21 September 2019 Premium Own Label share of sales by retailer
27 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Distinctive brands
bull 57 of customers have bought Distinctive Brands since launch
bull On track for pound100m incremental sales
bull 37 new brands in H1 across Fresh and Grocery
bull lsquoTaste of the Futurersquo bays launched in 70 stores- 67 incremental sales
Leon
bull 3 year exclusive partnership
bull 14 products launched
28 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Beauty Rollout
bull Now rolled out to over 60 stores- Sales up over 40
bull Customer numbers up 7
bull Spend per customer up 25
bull Beauty range doubled 1200 additional lines
bull Double digit growth differential against the market
29 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Our values make us different
bull Committed to reduce plastic packaging by 50 by 2025
bull First retailer to remove single use plastic produce and bakery bags from our stores
- Launching reusable bags in fruit and veg aisles
bull Investing in our loose produce offer
bull Removed black plastic trays from ready meals
bull Fresh water stands in cafeacutes for customers to refill bottles
UKrsquos first major retailer to make significant commitment to reduce plastic
30 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Argos category and range focus
bull Availability improvement- Argos master range reduced by c30 over 3 years- Eliminating duplication removing low value items- Better availability of key lines in store
bull Rebalancing into higher margin categories- Gaining share in Furniture1
More distinctive rangemore reason to shop at Sainsburyrsquos
Reduced SKU count -20operational efficiencies
Higher cash gross profit +2 YOY
Volumes +8 operational efficiencies
41 Interim Results 201920 - November 2019
Drive efficiency
to invest in the customer
offer
4
BAU savings to offset cost inflation
Manages inflationary pressures
BAU savingsH1 201920
Procurement GNFR
Retail Technology Efficiencies
Retail HRRetail
management structures
Shrink Reduction
42 Interim Results 201920 - November 2019
Drive efficiency
to invest in the customer
offer
4
Strategic cost transformation 5 year plan
Converge Tackle fixed cost
End to end reviews
Retail Operations Marketing and Commercial Operations
Other central support
Logistics and Supply Chain
Project A
Project C
Project D
Shared Services BPO
Property strategy
Project BGNFR procurement
Capital prioritisation
Technology Digital and Corporate Services
pound250-pound350m
pound150-pound250m
pound400-pound600mExecution underway In planning Opportunities identified
pound5bn addressable cost base
43 Interim Results 201920 - November 2019
Grow connected
services
5
44 Interim Results 201920 - November 2019
Grow connected
services
5
Financial Services Priorities
To be the provider of financial services for loyal Sainsburyrsquos and Argos customers
An agile capital and cost efficient provider of simple mobile-led financial services
Vision
Objective
Priorities Reshape Simplify Strengthen
45 Interim Results 201920 - November 2019
Grow connected
services
5
Current Customer Base
Customer Credit Risk Balance Sheet Earnings
Argos Storecards 22m Prime Near Prime
Credit Cards 09m Prime
Personal Loans 05m Prime
Mortgages 9K Exit
Total Lending
Deposits 03m
Insurances 05m Very Low Risk
Travel Money 266 Sites
ATMs 1890
Financial Services reshaping the portfolio
46 Interim Results 201920 - November 2019
Grow connected
services
5
Increase connectivity and value for Group
Stop mortgage acquisition review back book options
No capital input from the Group from now1
Costincome c503 within 5 years
Double UPBT double digit ROCE within 5 years
Upstream cash within 5 years2
Financial Services key targets
Transform the cost base
Improve returns
Financial services cash generative
Reduce risk profile to Group
Stop putting cash in to Financial Services
2
4
6
3
1
5
Focus on Sainsburyrsquos customer base
1 Subject to regulatory changes requirements2 Subject to regulatory approval3 On a Group contribution basis
47 Interim Results 201920 - November 2019
Grow connected
services
5
Nectar
bull Biggest loyalty programme in the UK
bull Over 18 million collectors
bull Most recognised loyalty brand in the UK
bull Launch of Nectar digital- 21 million app users- Increase in overall Nectar participation- Increased levels of personalisation- 138000 new Nectar customers- 1 app on launch weekend
bull Coalition strengthened with addition of Esso in June 2019
48 Interim Results 201920 - November 2019
Provide a seamless customer
experience
6
49 Interim Results 201920 - November 2019
Provide a seamless customer
experience
6
Digital
bull Groceries Online sales penetration of 8- App accounts for over 20 of orders
bull 21 million digital Nectar app users
bull 14 million Argos Financial Services app downloads
bull Smartshop rollout in over 350 stores
Groceries online
Chop Chop
SmartShop
Universaldiscovery
Seamlessfinancialservices
Singlebasket
50 Interim Results 201920 - November 2019
We will help our customers live well for less
Confident in the core Integrated customer offer
One multi brand multi channel business
Strong cash generation supporting investment dividend and allowing deleverage
Financial flexibility and resilience
Sustainable cost reduction covering cost inflation and funding investment in our competitive offer
QampA
APPENDIX Interim Results 201920 - November 2019
Appendices
APPENDIX Interim Results 201920 - November 2019
Guidance for 201920
1
Spacebull Expect to open 2 new Sainsburyrsquos supermarkets and up to 15 convenience storesbull Expect to open around 25 Argos stores in Sainsburyrsquos (of which 11 are
relocations) resulting in around 305 Argos stores in supermarketsbull Expect to close 2 supermarkets around 25 convenience stores and around 20
Argos stores in FY201920 as part of announced property closure programme of 10-15 supermarkets 30-40 convenience stores and 60-70 Argos stores
Financial Servicesbull Financial services underlying operating profit expected to be cpound45m including a
cpound10m benefit as a result of a change in transfer pricing between Argos and Argos Financial Services
bull Financial Services non-underlying costs are expected to be around pound30mbull No further capital injections into the Bank are expected following pound35m in H1 201920
Depreciation and amortisationbull Expect underlying retail depreciation and amortisation of around pound12bn
including cpound500m right of use asset depreciation
CostsOperating cost inflationbull Cost inflation between 2 and 3Cost savingsbull Continue to deliver cost savings to at least offset the impact of cost inflation
Finance costsbull Net finance costs of around pound405m including pound320m lease interest in
201920 following the introduction of IFRS 16
One-off itemsbull In 201920 cash outflows as a result of items excluded from
underlying results should not exceed pound100mbull Property strategy programme one-off costs expected to be
pound230m-pound270m of which cash costs are pound30-40m
Dividendbull Sainsburyrsquos plans to change the full year dividend policy to 19x cover by
underlying earnings (versus 20x previously) to offset the dilutive (non cash) impact of IFRS 16 on underlying earnings
Capital expenditurebull Retail capital expenditure to be around pound550mbull Retail capital expenditure is expected to be around pound550m-pound600m per
annum over the medium term
Net debtbull Net debt before fair value movements on derivatives to reduce by at
least pound300m
Tax ratebull Underlying tax rate to be between 25 and 26
APPENDIX Interim Results 201920 - November 2019
Retail sales
1 Sales including VAT excluding fuel
LFL sales growth1
(10)
Sales from net new space1
04
Total sales growth1
(06)
Supermarkets2
(07)
Convenience20
Groceries Online
70
Channels
(01)(25)
(12)
2 Supermarket sales include Argos SiS sales FY 1819 16
pound139bn
pound103bnGrocery
pound30bnGeneralMerchandise
pound488mClothing
2
Chart1
201819
194
66
1
Sheet1
APPENDIX Interim Results 201920 - November 2019
Sainsburyrsquos sales area and store numbersAs at 21 September 2019
Sainsburyrsquos store estateAs at 21 September 2019
Sq ftsales area
82446
870
40001 to60000
20001 to40000
10000 to20000
Under10000 Total
Over60000
0122122
0197197
0175175
06767
824607
1431
Argos storesArgos in SainsburyrsquosArgos in HomebaseOtherArgos total store numbers
Habitat1
Collection points
594281
8-
883
16317
As at21 Sept 2019
Disposalsclosures
Newstores
As at9 March 2019
17--8
-1
(7)-
(2)-
(9)
-(36)
588288
6-
88216
282
ConvenienceSupermarketsTotal stores
Number of stores
Sq ftsales area
1929350
2279
40001 to60000
20001 to40000
10000 to20000
Under10000 Total
Over60000
-18441844
-58185818
-85018501
-46604660
19292117323102
ConvenienceSupermarketsTotal stores
Space by store size (lsquo000 sq ft)
Argos and Habitat store numbers
1 5 Habitat stores 11 Habitat stores in Sainsburys
4
APPENDIX Interim Results 201920 - November 2019
ClosureBitterne West
Sainsburyrsquos investment programme201920
Q1
Supermarkets ConvenienceNew storesMilton Keynes Brooklands District CentBromley High StLeeds Wike Ridge LaneSalford Harbour CityCanterbury High St
ReplacementMayfair Stratton St
ClosuresMayfairWarren St
Q1Q1Q1Q2Q2
Q2
Q1Q2
5
APPENDIX Interim Results 201920 - November 2019
Retail margin
Retail sales (inc VAT inc fuel)(exc VAT inc fuel)
Retail underlying EBITDAR1
Retail underlying EBITDAR margin 2
at constant fuel pricesRetail underlying operating profit3
Retail underlying operating margin 4
at constant fuel prices
1656714808
10677272
4373030
1661214856
11147575
4873333
030342
30 bps28 bps10333 bps32 bps
1 Retail underlying operating profit before net rental income of pound6 million and underlying depreciation and amortisation of pound636 million2 Retail underlying EBITDAR divided by underlying retail sales excluding VAT3 Retail underlying earnings before interest tax and Sainsburyrsquos underlying share of post-tax profit from joint ventures4 Retail underlying operating profit divided by underlying retail sales excluding VAT
poundm H1201920
H1201819
Change
6
APPENDIX Interim Results 201920 - November 2019
H1201920
H1201819
Group retail
Return on capital employed 1
Net debt to EBITDAR (times)23
Fixed charge cover (times)2
Underlying tax rate Core retail capex sales5
713126
26515
743326
25715
poundm
1 ROCE Return is defined as a 52 week rolling underlying profit before interest and tax Capital employed is defined as group net assets2 Net debt of pound6778 million includes lease obligations under IFRS 16 and perpetual securities treated as debt divided by Group underlying EBITDAR of pound2171 million calculated for a 52-week period to 21 September 20193 Group underlying EBITDAR divided by rent (both capital and interest) and net finance costs where interest on perpetual securities is treated as an underlying finance costs4 52 weeks to 22nd September 2018 is not available due to the implementation of IFRS 16 Comparatives therefore reflect the 52 weeks to 9th March 20195 Includes retail sales inc vat inc fuel
4
4
7
APPENDIX Interim Results 201920 - November 2019
Plc Board
Kevin OrsquoByrneChief Financial Officer
Mike Coupe Group Chief Executive
Dame Susan Rice Senior Independent Director
Matt BrittinNon-Executive Director
Jo HarlowNon-Executive Director
Brian CassinNon-Executive Director
David KeensNon-Executive Director
Jean Tomlin Non-Executive Director
Martin Scicluna Chairman
8
APPENDIX Interim Results 201920 - November 2019
Plc Board
Mike Coupe Group Chief Executive Officer
Skills and experienceAppointed Group Chief Executive Officer on 9 July 2014 Mike has been a member of the Operating Board since October 2004 Mike has vast retail industry experience in trading strategy marketing digital and online as well as multi-site store experience He joined Sainsburyrsquos from Big Food Group where he was a board director of Big Food Group PLC and Managing Director of Iceland Food Stores He previously worked for both Asda and Tesco PLC where he served in a variety of senior management roles
Date of appointment 1 August 2007Mike has served as an Executive Director since 1 August 2007 and as Chief Executive Officer since 9 July 2014
Committee membershipCorporate Responsibility and Sustainability Committee
Kevin OrsquoByrne Chief Financial Officer
Skills and experienceKevin brings to the Board a wealth of retail and finance experience Kevin was previously Chief Executive Officer of Poundland Group Limited until December 2016 and held executive roles at Kingfisher plc from 2008 to 2015 including Divisional Director UK China and Turkey Chief Executive Officer of BampQ UK amp Ireland and Group Finance Director He was previously Group Finance Director of Dixons Retail plc and European Finance Director of Quaker Oats He was a Non-Executive Director of Land Securities Group PLC from 2008 to September 2017 where he was Chairman of the Audit Committee and Senior Independent Director
Date of appointment 9 January 2017
Other current rolesNon-Executive Director of Greene King plc
Skills and experienceMartin brings a breadth of experience and leadership in both executive and non-executive roles His previous roles include positions as the Chairman of Great Portland Estates plc Senior Independent Director and Chair of the Audit Committee of Worldpay Inc and Non-Executive Director and Chair of the Audit Committee of Lloyds Banking Group plc He was a partner at Deloitte LLP for 26 years serving as Chairman from 1995 to 2007 where his clients included Dixons WH Smith Alliance Unichem and Cadburyrsquos
Other current rolesChairman of RSA Insurance Group plc
Martin Scicluna Chairman
Date of appointment 1 November 2018 Martin joined the Board as Chairman Designate and Non-Executive Director on 1 November 2018 He was appointed as Chairman of the Board on 10 March 2019
Committee membershipChair of the Nomination Committee
Dame Susan Rice Senior Independent Director
Skills and experienceSusan has extensive experience as a Non-Executive Director as well as in retail banking financial services leadership and sustainability Her career in retail bankingis particularly relevant to our ownership ofSainsburyrsquos Bank Previously Susan was a member of the First Ministerrsquos Council of Economic Advisors Managing Director of Lloyds Banking Group Scotland and was previously Chief Executive and then Chairman of Lloyds TSB Scotland plc She has also held a range of other non-executive directorships including at the Bank of England and SSE plc
Committee membershipChair of the Remuneration Committee and a member of the Nomination Committee
Date of appointment 1 June 2013
Other current rolesChair of Scottish Water and Business Stream Chair of the Scottish Fiscal Commission Non-Executive Director of the North American Income Trust C Hoare and Co and Senior Independent Director of the North American Income Trust
9
Other current rolesNon-Executive Director and Chairman of the Audit Committee of Centrica plc
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jean Tomlin Non-Executive Director
Skills and experienceJean has extensive experience and breadth of skills in human resources and corporate responsibility Jean was formerly Director of HR Workforce and Accreditation for The London OrganisingCommittee of the Olympic and Paralympic Games where she set the strategic direction to ensure the mobilisation of the combined 200000-strong workforce including paid staff volunteers and contractors which represented the recruitment and mobilisation of the largest peacetime workforce and set the industry standard for volunteering with the highly acclaimed Games She was previously Group HR Director at Marks and Spencer Group Plc HR Director and founder member of Egg plc and Sales amp Operations Director of Prudential Direct
Date of appointment 1 January 2013
Committee membershipAudit Committee Corporate Responsibility and Sustainability Committee and Nomination Committee
David Keens Non-Executive Director
Skills and experienceDavid has extensive retail experience and knowledge of consumer facing businesses together with his core skills in finance David was formerly Group Finance Director of next plc from 1991 to 2015 and their Group Treasurer from 1986 to 1991 Previous management experience includes nine years in the UK and overseas operations of multinational food manufacturer Nabisco and prior to that seven years in the accountancy profession
Date of appointment 29 April 2015
Committee membershipChair of the Audit Committee and a member of the Nomination Committee
Other current rolesIndependent Board member of Capri Holdings Limited Non-Executive Director of Hakluyt and Chief Executive Officer of Chanzo Limited
Other current rolesNon-Executive Director Senior Independent Director and Chair of the Audit Committee of Auto Trader Group plc
Matt BrittinNon-Executive Director
Skills and experienceMatt has extensive experience of running a high profile fast moving innovative digital business Since 2015 he has been responsible for Googlersquos business and operations in Europe the Middle East and Africa and hersquos been in leadership roles at Google since 2007 Prior to that Matt spent much of his career in media and marketing with particular interests in strategy commercial development and sales performance This included commercial and digital leadership roles in UK media
Date of appointment 27 January 2011
Committee membershipNomination Committee and Remuneration Committee
Other current rolesGooglersquos President ndash Europe Middle East and Africa and Director of The Media Trust
Brian Cassin Non-Executive Director
Skills and experienceBrian brings present day experience of running a FTSE40 group and of big data and analytics ndash topics of key importance to Sainsburyrsquos Brian joined Experian plc as Chief Financial Officer in April 2012 a post he held until his appointment as Chief Executive Officer in July 2014 Prior to this Brian spent his career in investment banking at Greenhill amp Co where he was Managing Director and Partner Brian has also held various roles at Baring Brothers International and at the London Stock Exchange
Date of appointment 1 April 2016
Committee membershipAudit Committee and Nomination Committee
Other current rolesChief Executive Officer of Experian plc
10
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jo Harlow Non-Executive Director
Skills and experienceJo brings a wealth of experience in consumer-facing businesses and in the telecoms and technology industry bothin the UK and internationally Jo spent 12 years in a variety of senior management roles with Nokia and Microsoft Prior to this she spent eight years at PampG and 11 years at Reebok in senior sales and marketing positions in both Europe and the US
Date of appointment 11 September 2017
Committee membershipChair of the Corporate Responsibility and Sustainability Committee and member of the Nomination Committee and Remuneration Committee
Life PresidentLord Sainsbury of Preston Candover KG
Other current rolesNon-Executive Director of InterContinental Hotels plc Non-Executive Director of Halmaplc and Member of the Supervisory Board of Ceconomy AG
11
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief Executive
Tim FallowfieldCompany Secretary amp Corporate Services Director
Kevin OrsquoByrne Chief Financial Officer
Jim BrownChief Executive Officer of Sainsburyrsquos Bank
Paul Mills-HicksFood Commercial Director
Angie RisleyGroup HR Director
Phil JordanGroup Chief InformationOfficer
Simon RobertsRetail and Operations Director
Clo MoriartyGroup Chief Digital Officer
12
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief ExecutiveSee Appendix page 9
Kevin OrsquoByrneChief Financial OfficerSee Appendix page 9
Tim FallowfieldCompany Secretary amp Corporate Services Director
Date of appointment September 2004
Skills and experienceTim joined Sainsburyrsquos in 2001 as Company Secretary and joined the Operating Board in September 2004 In addition to his role as Company Secretary Tim is responsible for the Corporate Services Division comprising Legal Services Data Governance Safety Shareholder Services Insurance and Central Security He chairs the Group Safety Committee and the Data Governance Committee Tim joined Sainsburyrsquos from Exelplc the global logistics company now part of DHL where he was Company Secretary and General Counsel He began his career at the international law firm Clifford Chance and is a qualified solicitor Tim is Chairman of the Disability Confident Business Leaders Group which works with Government in shaping the disability employment agenda and in raising awareness of the benefits of employing disabled people
Jim BrownCEO of Sainsburyrsquos Bank
Skills and experienceJim joined Sainsburyrsquos Bank as CEO in June 2019 and is also a member of the Sainsburyrsquos Group Operating Board He has held a number of senior international Financial Services roles - most recently for RBS in the UK as CEO of Williams and Glyn and prior to that CEO of Ulster Bank in Northern Ireland and the Republic of Ireland Before moving to Ireland he was based in Hong Kong and was CEO Retail and Commercial Banking Asia and the Middle East for RBS and ABN AMRO He has also been a member of the RBS Group Management Committee ABN AMRO Executive Group ABN AMRO Global Consumer Leadership Team and the RBSBank of China Joint Steering Committee Earlier in his career he held a number of senior executive roles for Citibank in Asia and Australia and New Zealand Jim has also held various Board positions including at Ulster Bank Saudi Hollandi Bank The Royal Bank of Scotland (China) Co Ltd and RBS (Pakistan) Ltd He is also a past President of the Institute of Banking in Ireland He is currently a Certified Bank Director
Date of appointment August 2019
Paul Mills-HicksFood Commercial Director
Skills and experiencePaul joined the Operating Board in May 2014 as Food Commercial Director having spent over ten years at Sainsburyrsquos He was closely involved in the formation and execution of the lsquoMaking Sainsburyrsquos Great Againrsquo strategy Following this he held a variety of roles in commercial strategy and finance most recently as Business Unit Director for Grocery Prior to Sainsburyrsquos Paul was European Controller at Marks and Spencer Group PLC and a Director at UBS Warburg
Date of appointment May 2014
13
APPENDIX Interim Results 201920 - November 2019
Operating Board
Angie RisleyGroup HR Director
Skills and experienceAngie was appointed Group HR Director and a member of the Operating Board in January 2013 with responsibility for human resources Angie is also a Director of Sainsburyrsquos Bank plc Angie was most recently Non-Executive Director and Chairman of the Remuneration Committee of Serco plc and prior to this was Group HR Director of Lloyds Banking Group and an Executive Director of Whitbread PLC with responsibility for HR and Corporate Social Responsibility Angie is currently Non-Executive Director and Chair of the Remuneration Committee at Smith amp Nephew plc
Date of appointment January 2013
Phil JordanGroup Chief Information Officer
Skills and experiencePhil joined the Board in January 2018 and has brought a fresh globalperspective on technology to the Operating Board in addition to a wealth of experience in digital data and business transformation Prior to joining Sainsburyrsquos Phil had a long and successful track record in telecommunications Most recently he was Global Chief Information Officer at Telefonica overseeing Digital Transformation and Information Technology and prior to that was Chief Information Officer for Vodafone UKIreland Phil has worked as a Non-Executive Advisor on Technology in the Investment amp Retail Banking sector and is currently a Non-Executive Director of TalkTalk Telecom Group PLC and chairs its Cyber-Security Committee
Date of appointment January 2018
Simon RobertsRetail and Operations Director
Skills and experienceSimon joined Sainsburyrsquos and the Operating Board in July 2017 as Central Retail amp Operations Director responsible for Stores Central operation and Logistics In his previous role he was Executive Vice President of Walgreens Boots Alliance and President of Boots with responsibility for commercial and retail operations across the UK and Ireland Prior to Boots Simon was at Marks and Spencer Group PLC where he held operational and customer leadership roles across stores divisions and central operations Simon is also the Non-Executive Chairman at the Institute ofCustomer Service
Date of appointment July 2017
Clodagh MoriartyGroup Chief Digital Officer
Skills and experienceClodagh was appointed Group Chief Digital Officer in June 2018 Clodagh leads the delivery of a consistent and first-rate digital experience for customers across Sainsburyrsquos Argos and Sainsburyrsquos BankClodagh joined Sainsburyrsquos in 2010 from Bain amp Co management consultants where she had gained experience working on a broad range of projects across multiple sectors and countries Following two years as Head of Strategy at Sainsburyrsquosshe moved into Food Commercial as Category Manager for Meal Solutions and then became Head of Online Trading spanning Food General Merchandise and Clothing before being promoted to Director of Online in 2016 In this role Clodagh was instrumental in driving innovation within Groceries Online and launching new initiatives including SmartShop and Chop Chop
Date of appointment June 2018
14
APPENDIX Interim Results 201920 - November 2019
Supplementary financial details
3 Financial calendarQ3 trading statement(15 weeks to 4 January 2020)
Preliminary results(52 weeks to 7 March 2020)
8 January 2020
30 April 2020
1 Weighted average number of shares
The interim dividend datesOrdinary shares
Ex-dividend 14 November 2019Record 15 November 2019Payment 20 December 2019
Product Quality Framework helps us fund investment
PQF cereals case study
BAU savings to offset cost inflation
Strategic cost transformation 5 year plan
Slide Number 43
Financial Services Priorities
Financial Services reshaping the portfolio
Financial Services key targets
Nectar
Slide Number 48
Digital
We will help our customers live well for less
Slide Number 51
Slide Number 52
Guidance for 201920
Retail sales
Sainsburyrsquos sales area and store numbers
Sainsburyrsquos store estate
Sainsburyrsquos investment programme
Retail margin
Group retail
Plc Board
Plc Board
Plc Board
Plc Board
Operating Board
Operating Board
Operating Board
Supplementary financial details
Contacts
Column1
201819
Grocery
19
GM
7
Clothing
1
To resize chart data range drag lower right corner of range
Grocery
GM
Clothing
13 Interim Results 201920 - November 2019
1 Net debt definition now excludes derivatives not linked to borrowings and includes perpetual securities as debt2 Net debt (inc perpetual securities) on a post-IFRS 16 basis divided by Group underlying EBITDAR We previously disclosed
adjusted Net debt EBITDAR but net debt on a post-IFRS 16 basis now includes lease liabilities3 FY1819 Net Debt exc Leases of pound1522m compares to the previously reported Net Debt of pound1636m less pound(122)m of finance leases plus pound8m other (predominantly derivatives no longer reported within net debt)
Balance sheet targets
bull Net debt reduction of at least pound750m over the next three years
bull Medium leverage reduction targets- Net debtEBITDAR2 less than 3x
bull Dividend policy changed to 19x underlying eps cover versus 20x
- Adjusting for the impact of IFRS 16
FY1819
Net debt exc Lease liabilities1 (poundm)
FY1516
2125
15223
FY2122
(750)
Target
c800
H1201920
FY201819
Net DebtOf which lease liabilitiesNet Debt exc leases1
(6778) (5770) (1008)
(7346) (5824) (1522)3
poundm
(603)
14 Interim Results 201920 - November 2019
Summary and Outlook
bull Grocery sales improving relative to the market
bull General Merchandise and Clothing outperforming a difficult market
Sainsburyrsquos Meat Fish amp Poultry Value Own Label1
Gains
Losses
Incremental Switching within Sainsburyrsquos
Dec 17 Oct 19
+2Sales
+4Volume
Bread Investing across Own Label Tiers120+ EPP SKUs launched in H1 200 by end 201920
Repackaged and NPD within Premium
New Owned Brand Replacing Basics
NPD within Core+ Responding in Growth Areas
Repackaged Core bySainsburyrsquos
New
New
Improved
Improved
1 Kantar 12 we 6 October 2019 ndash rolling 12 weeks switching within total Market MFP
21 Interim Results 201920 - November 2019
Be competitive
on price
1
Lower prices on key volume lines
In-Store Volume Returns Examples
Chicken Wings 1kg+12 Volume
pound170was pound210
pound050Only
White Pittas x6+15 Volume
Chestnut Mushrooms 250g+45 Volume
pound080Only
1 Pre wave 3 lockdown (started 24th March to 15th June 19) YoY 2 Last 6 weeks since wave 4 lockdown (started 28th August 19) YoY
-4
0
4
8
12
16
-6 -5 -4 -3 -2 -1 0 1 2 3 4 5 6
Change in volumes ()
Pre1 Post2
22 Interim Results 201920 - November 2019
Be competitive
on price
1
We continue to be less dependent on promotions
230 228
207 209
Sainsburyrsquos Promotional Participation
1819 1920 19201819
Morrisons
Sainsburyrsquos
Tesco
Asda
Spend on Deal1
Q1 Q2
1 Source Nielsen 4 weekly data to 21 September 2019
10
20
30
4040
30
20
10Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep
2018 2019
H1 1920
H1 1920 AVERAGE
34 31
22 21
23 Interim Results 201920 - November 2019
Be competitive
on price
1
Improved grocery value
Base Price Index 2
-1
0
1
2
3
Grocery inflation (Kantar)1
-960bps
-550bps
Commodity VI 2
Aug 17 Jan 18 Jun 18 Nov 18 Apr 19 Oct 19
2004 2007 2010 2013 2016 2019
Morrisons
Sainsburyrsquos
Tesco
Asda
Total Market
Mar Apr May Jun Jul Aug Sep Oct2019
1 Kantar City Reads to Oct 20192 Sainsburyrsquos value index based on Brandview SKU matching data to Oct 2019
24 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
25 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Category tier performance
YoY value share change by tier
12 weeks to September 2019
-03
01
-01
-18
52 weeks to March 2019
Branded
PremiumOwn Brand
Branded
StandardOwn Brand
EconomyOwn Brand
02
-08
-04
00PremiumOwn Brand
StandardOwn Brand
EconomyOwn Brand
Source Nielsen Panel Total FMCG Market Universe Total outlets 52wks data to 9 March 2019 and 12wks data to 21 Sept 2019
26 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Premium private label
Taste the Difference re-launch
bull Over 350 products new repackaged or reformulated
bull Premium ready meals growth now outperforming the market
41
25 2419
Sainsburys Morrisons Tesco Asda
Premium Own Label volume share
Source Nielsen Panel Total FMCG 28 weeks data to 21 September 2019 Premium Own Label share of sales by retailer
27 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Distinctive brands
bull 57 of customers have bought Distinctive Brands since launch
bull On track for pound100m incremental sales
bull 37 new brands in H1 across Fresh and Grocery
bull lsquoTaste of the Futurersquo bays launched in 70 stores- 67 incremental sales
Leon
bull 3 year exclusive partnership
bull 14 products launched
28 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Beauty Rollout
bull Now rolled out to over 60 stores- Sales up over 40
bull Customer numbers up 7
bull Spend per customer up 25
bull Beauty range doubled 1200 additional lines
bull Double digit growth differential against the market
29 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Our values make us different
bull Committed to reduce plastic packaging by 50 by 2025
bull First retailer to remove single use plastic produce and bakery bags from our stores
- Launching reusable bags in fruit and veg aisles
bull Investing in our loose produce offer
bull Removed black plastic trays from ready meals
bull Fresh water stands in cafeacutes for customers to refill bottles
UKrsquos first major retailer to make significant commitment to reduce plastic
30 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Argos category and range focus
bull Availability improvement- Argos master range reduced by c30 over 3 years- Eliminating duplication removing low value items- Better availability of key lines in store
bull Rebalancing into higher margin categories- Gaining share in Furniture1
More distinctive rangemore reason to shop at Sainsburyrsquos
Reduced SKU count -20operational efficiencies
Higher cash gross profit +2 YOY
Volumes +8 operational efficiencies
41 Interim Results 201920 - November 2019
Drive efficiency
to invest in the customer
offer
4
BAU savings to offset cost inflation
Manages inflationary pressures
BAU savingsH1 201920
Procurement GNFR
Retail Technology Efficiencies
Retail HRRetail
management structures
Shrink Reduction
42 Interim Results 201920 - November 2019
Drive efficiency
to invest in the customer
offer
4
Strategic cost transformation 5 year plan
Converge Tackle fixed cost
End to end reviews
Retail Operations Marketing and Commercial Operations
Other central support
Logistics and Supply Chain
Project A
Project C
Project D
Shared Services BPO
Property strategy
Project BGNFR procurement
Capital prioritisation
Technology Digital and Corporate Services
pound250-pound350m
pound150-pound250m
pound400-pound600mExecution underway In planning Opportunities identified
pound5bn addressable cost base
43 Interim Results 201920 - November 2019
Grow connected
services
5
44 Interim Results 201920 - November 2019
Grow connected
services
5
Financial Services Priorities
To be the provider of financial services for loyal Sainsburyrsquos and Argos customers
An agile capital and cost efficient provider of simple mobile-led financial services
Vision
Objective
Priorities Reshape Simplify Strengthen
45 Interim Results 201920 - November 2019
Grow connected
services
5
Current Customer Base
Customer Credit Risk Balance Sheet Earnings
Argos Storecards 22m Prime Near Prime
Credit Cards 09m Prime
Personal Loans 05m Prime
Mortgages 9K Exit
Total Lending
Deposits 03m
Insurances 05m Very Low Risk
Travel Money 266 Sites
ATMs 1890
Financial Services reshaping the portfolio
46 Interim Results 201920 - November 2019
Grow connected
services
5
Increase connectivity and value for Group
Stop mortgage acquisition review back book options
No capital input from the Group from now1
Costincome c503 within 5 years
Double UPBT double digit ROCE within 5 years
Upstream cash within 5 years2
Financial Services key targets
Transform the cost base
Improve returns
Financial services cash generative
Reduce risk profile to Group
Stop putting cash in to Financial Services
2
4
6
3
1
5
Focus on Sainsburyrsquos customer base
1 Subject to regulatory changes requirements2 Subject to regulatory approval3 On a Group contribution basis
47 Interim Results 201920 - November 2019
Grow connected
services
5
Nectar
bull Biggest loyalty programme in the UK
bull Over 18 million collectors
bull Most recognised loyalty brand in the UK
bull Launch of Nectar digital- 21 million app users- Increase in overall Nectar participation- Increased levels of personalisation- 138000 new Nectar customers- 1 app on launch weekend
bull Coalition strengthened with addition of Esso in June 2019
48 Interim Results 201920 - November 2019
Provide a seamless customer
experience
6
49 Interim Results 201920 - November 2019
Provide a seamless customer
experience
6
Digital
bull Groceries Online sales penetration of 8- App accounts for over 20 of orders
bull 21 million digital Nectar app users
bull 14 million Argos Financial Services app downloads
bull Smartshop rollout in over 350 stores
Groceries online
Chop Chop
SmartShop
Universaldiscovery
Seamlessfinancialservices
Singlebasket
50 Interim Results 201920 - November 2019
We will help our customers live well for less
Confident in the core Integrated customer offer
One multi brand multi channel business
Strong cash generation supporting investment dividend and allowing deleverage
Financial flexibility and resilience
Sustainable cost reduction covering cost inflation and funding investment in our competitive offer
QampA
APPENDIX Interim Results 201920 - November 2019
Appendices
APPENDIX Interim Results 201920 - November 2019
Guidance for 201920
1
Spacebull Expect to open 2 new Sainsburyrsquos supermarkets and up to 15 convenience storesbull Expect to open around 25 Argos stores in Sainsburyrsquos (of which 11 are
relocations) resulting in around 305 Argos stores in supermarketsbull Expect to close 2 supermarkets around 25 convenience stores and around 20
Argos stores in FY201920 as part of announced property closure programme of 10-15 supermarkets 30-40 convenience stores and 60-70 Argos stores
Financial Servicesbull Financial services underlying operating profit expected to be cpound45m including a
cpound10m benefit as a result of a change in transfer pricing between Argos and Argos Financial Services
bull Financial Services non-underlying costs are expected to be around pound30mbull No further capital injections into the Bank are expected following pound35m in H1 201920
Depreciation and amortisationbull Expect underlying retail depreciation and amortisation of around pound12bn
including cpound500m right of use asset depreciation
CostsOperating cost inflationbull Cost inflation between 2 and 3Cost savingsbull Continue to deliver cost savings to at least offset the impact of cost inflation
Finance costsbull Net finance costs of around pound405m including pound320m lease interest in
201920 following the introduction of IFRS 16
One-off itemsbull In 201920 cash outflows as a result of items excluded from
underlying results should not exceed pound100mbull Property strategy programme one-off costs expected to be
pound230m-pound270m of which cash costs are pound30-40m
Dividendbull Sainsburyrsquos plans to change the full year dividend policy to 19x cover by
underlying earnings (versus 20x previously) to offset the dilutive (non cash) impact of IFRS 16 on underlying earnings
Capital expenditurebull Retail capital expenditure to be around pound550mbull Retail capital expenditure is expected to be around pound550m-pound600m per
annum over the medium term
Net debtbull Net debt before fair value movements on derivatives to reduce by at
least pound300m
Tax ratebull Underlying tax rate to be between 25 and 26
APPENDIX Interim Results 201920 - November 2019
Retail sales
1 Sales including VAT excluding fuel
LFL sales growth1
(10)
Sales from net new space1
04
Total sales growth1
(06)
Supermarkets2
(07)
Convenience20
Groceries Online
70
Channels
(01)(25)
(12)
2 Supermarket sales include Argos SiS sales FY 1819 16
pound139bn
pound103bnGrocery
pound30bnGeneralMerchandise
pound488mClothing
2
Chart1
201819
194
66
1
Sheet1
APPENDIX Interim Results 201920 - November 2019
Sainsburyrsquos sales area and store numbersAs at 21 September 2019
Sainsburyrsquos store estateAs at 21 September 2019
Sq ftsales area
82446
870
40001 to60000
20001 to40000
10000 to20000
Under10000 Total
Over60000
0122122
0197197
0175175
06767
824607
1431
Argos storesArgos in SainsburyrsquosArgos in HomebaseOtherArgos total store numbers
Habitat1
Collection points
594281
8-
883
16317
As at21 Sept 2019
Disposalsclosures
Newstores
As at9 March 2019
17--8
-1
(7)-
(2)-
(9)
-(36)
588288
6-
88216
282
ConvenienceSupermarketsTotal stores
Number of stores
Sq ftsales area
1929350
2279
40001 to60000
20001 to40000
10000 to20000
Under10000 Total
Over60000
-18441844
-58185818
-85018501
-46604660
19292117323102
ConvenienceSupermarketsTotal stores
Space by store size (lsquo000 sq ft)
Argos and Habitat store numbers
1 5 Habitat stores 11 Habitat stores in Sainsburys
4
APPENDIX Interim Results 201920 - November 2019
ClosureBitterne West
Sainsburyrsquos investment programme201920
Q1
Supermarkets ConvenienceNew storesMilton Keynes Brooklands District CentBromley High StLeeds Wike Ridge LaneSalford Harbour CityCanterbury High St
ReplacementMayfair Stratton St
ClosuresMayfairWarren St
Q1Q1Q1Q2Q2
Q2
Q1Q2
5
APPENDIX Interim Results 201920 - November 2019
Retail margin
Retail sales (inc VAT inc fuel)(exc VAT inc fuel)
Retail underlying EBITDAR1
Retail underlying EBITDAR margin 2
at constant fuel pricesRetail underlying operating profit3
Retail underlying operating margin 4
at constant fuel prices
1656714808
10677272
4373030
1661214856
11147575
4873333
030342
30 bps28 bps10333 bps32 bps
1 Retail underlying operating profit before net rental income of pound6 million and underlying depreciation and amortisation of pound636 million2 Retail underlying EBITDAR divided by underlying retail sales excluding VAT3 Retail underlying earnings before interest tax and Sainsburyrsquos underlying share of post-tax profit from joint ventures4 Retail underlying operating profit divided by underlying retail sales excluding VAT
poundm H1201920
H1201819
Change
6
APPENDIX Interim Results 201920 - November 2019
H1201920
H1201819
Group retail
Return on capital employed 1
Net debt to EBITDAR (times)23
Fixed charge cover (times)2
Underlying tax rate Core retail capex sales5
713126
26515
743326
25715
poundm
1 ROCE Return is defined as a 52 week rolling underlying profit before interest and tax Capital employed is defined as group net assets2 Net debt of pound6778 million includes lease obligations under IFRS 16 and perpetual securities treated as debt divided by Group underlying EBITDAR of pound2171 million calculated for a 52-week period to 21 September 20193 Group underlying EBITDAR divided by rent (both capital and interest) and net finance costs where interest on perpetual securities is treated as an underlying finance costs4 52 weeks to 22nd September 2018 is not available due to the implementation of IFRS 16 Comparatives therefore reflect the 52 weeks to 9th March 20195 Includes retail sales inc vat inc fuel
4
4
7
APPENDIX Interim Results 201920 - November 2019
Plc Board
Kevin OrsquoByrneChief Financial Officer
Mike Coupe Group Chief Executive
Dame Susan Rice Senior Independent Director
Matt BrittinNon-Executive Director
Jo HarlowNon-Executive Director
Brian CassinNon-Executive Director
David KeensNon-Executive Director
Jean Tomlin Non-Executive Director
Martin Scicluna Chairman
8
APPENDIX Interim Results 201920 - November 2019
Plc Board
Mike Coupe Group Chief Executive Officer
Skills and experienceAppointed Group Chief Executive Officer on 9 July 2014 Mike has been a member of the Operating Board since October 2004 Mike has vast retail industry experience in trading strategy marketing digital and online as well as multi-site store experience He joined Sainsburyrsquos from Big Food Group where he was a board director of Big Food Group PLC and Managing Director of Iceland Food Stores He previously worked for both Asda and Tesco PLC where he served in a variety of senior management roles
Date of appointment 1 August 2007Mike has served as an Executive Director since 1 August 2007 and as Chief Executive Officer since 9 July 2014
Committee membershipCorporate Responsibility and Sustainability Committee
Kevin OrsquoByrne Chief Financial Officer
Skills and experienceKevin brings to the Board a wealth of retail and finance experience Kevin was previously Chief Executive Officer of Poundland Group Limited until December 2016 and held executive roles at Kingfisher plc from 2008 to 2015 including Divisional Director UK China and Turkey Chief Executive Officer of BampQ UK amp Ireland and Group Finance Director He was previously Group Finance Director of Dixons Retail plc and European Finance Director of Quaker Oats He was a Non-Executive Director of Land Securities Group PLC from 2008 to September 2017 where he was Chairman of the Audit Committee and Senior Independent Director
Date of appointment 9 January 2017
Other current rolesNon-Executive Director of Greene King plc
Skills and experienceMartin brings a breadth of experience and leadership in both executive and non-executive roles His previous roles include positions as the Chairman of Great Portland Estates plc Senior Independent Director and Chair of the Audit Committee of Worldpay Inc and Non-Executive Director and Chair of the Audit Committee of Lloyds Banking Group plc He was a partner at Deloitte LLP for 26 years serving as Chairman from 1995 to 2007 where his clients included Dixons WH Smith Alliance Unichem and Cadburyrsquos
Other current rolesChairman of RSA Insurance Group plc
Martin Scicluna Chairman
Date of appointment 1 November 2018 Martin joined the Board as Chairman Designate and Non-Executive Director on 1 November 2018 He was appointed as Chairman of the Board on 10 March 2019
Committee membershipChair of the Nomination Committee
Dame Susan Rice Senior Independent Director
Skills and experienceSusan has extensive experience as a Non-Executive Director as well as in retail banking financial services leadership and sustainability Her career in retail bankingis particularly relevant to our ownership ofSainsburyrsquos Bank Previously Susan was a member of the First Ministerrsquos Council of Economic Advisors Managing Director of Lloyds Banking Group Scotland and was previously Chief Executive and then Chairman of Lloyds TSB Scotland plc She has also held a range of other non-executive directorships including at the Bank of England and SSE plc
Committee membershipChair of the Remuneration Committee and a member of the Nomination Committee
Date of appointment 1 June 2013
Other current rolesChair of Scottish Water and Business Stream Chair of the Scottish Fiscal Commission Non-Executive Director of the North American Income Trust C Hoare and Co and Senior Independent Director of the North American Income Trust
9
Other current rolesNon-Executive Director and Chairman of the Audit Committee of Centrica plc
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jean Tomlin Non-Executive Director
Skills and experienceJean has extensive experience and breadth of skills in human resources and corporate responsibility Jean was formerly Director of HR Workforce and Accreditation for The London OrganisingCommittee of the Olympic and Paralympic Games where she set the strategic direction to ensure the mobilisation of the combined 200000-strong workforce including paid staff volunteers and contractors which represented the recruitment and mobilisation of the largest peacetime workforce and set the industry standard for volunteering with the highly acclaimed Games She was previously Group HR Director at Marks and Spencer Group Plc HR Director and founder member of Egg plc and Sales amp Operations Director of Prudential Direct
Date of appointment 1 January 2013
Committee membershipAudit Committee Corporate Responsibility and Sustainability Committee and Nomination Committee
David Keens Non-Executive Director
Skills and experienceDavid has extensive retail experience and knowledge of consumer facing businesses together with his core skills in finance David was formerly Group Finance Director of next plc from 1991 to 2015 and their Group Treasurer from 1986 to 1991 Previous management experience includes nine years in the UK and overseas operations of multinational food manufacturer Nabisco and prior to that seven years in the accountancy profession
Date of appointment 29 April 2015
Committee membershipChair of the Audit Committee and a member of the Nomination Committee
Other current rolesIndependent Board member of Capri Holdings Limited Non-Executive Director of Hakluyt and Chief Executive Officer of Chanzo Limited
Other current rolesNon-Executive Director Senior Independent Director and Chair of the Audit Committee of Auto Trader Group plc
Matt BrittinNon-Executive Director
Skills and experienceMatt has extensive experience of running a high profile fast moving innovative digital business Since 2015 he has been responsible for Googlersquos business and operations in Europe the Middle East and Africa and hersquos been in leadership roles at Google since 2007 Prior to that Matt spent much of his career in media and marketing with particular interests in strategy commercial development and sales performance This included commercial and digital leadership roles in UK media
Date of appointment 27 January 2011
Committee membershipNomination Committee and Remuneration Committee
Other current rolesGooglersquos President ndash Europe Middle East and Africa and Director of The Media Trust
Brian Cassin Non-Executive Director
Skills and experienceBrian brings present day experience of running a FTSE40 group and of big data and analytics ndash topics of key importance to Sainsburyrsquos Brian joined Experian plc as Chief Financial Officer in April 2012 a post he held until his appointment as Chief Executive Officer in July 2014 Prior to this Brian spent his career in investment banking at Greenhill amp Co where he was Managing Director and Partner Brian has also held various roles at Baring Brothers International and at the London Stock Exchange
Date of appointment 1 April 2016
Committee membershipAudit Committee and Nomination Committee
Other current rolesChief Executive Officer of Experian plc
10
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jo Harlow Non-Executive Director
Skills and experienceJo brings a wealth of experience in consumer-facing businesses and in the telecoms and technology industry bothin the UK and internationally Jo spent 12 years in a variety of senior management roles with Nokia and Microsoft Prior to this she spent eight years at PampG and 11 years at Reebok in senior sales and marketing positions in both Europe and the US
Date of appointment 11 September 2017
Committee membershipChair of the Corporate Responsibility and Sustainability Committee and member of the Nomination Committee and Remuneration Committee
Life PresidentLord Sainsbury of Preston Candover KG
Other current rolesNon-Executive Director of InterContinental Hotels plc Non-Executive Director of Halmaplc and Member of the Supervisory Board of Ceconomy AG
11
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief Executive
Tim FallowfieldCompany Secretary amp Corporate Services Director
Kevin OrsquoByrne Chief Financial Officer
Jim BrownChief Executive Officer of Sainsburyrsquos Bank
Paul Mills-HicksFood Commercial Director
Angie RisleyGroup HR Director
Phil JordanGroup Chief InformationOfficer
Simon RobertsRetail and Operations Director
Clo MoriartyGroup Chief Digital Officer
12
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief ExecutiveSee Appendix page 9
Kevin OrsquoByrneChief Financial OfficerSee Appendix page 9
Tim FallowfieldCompany Secretary amp Corporate Services Director
Date of appointment September 2004
Skills and experienceTim joined Sainsburyrsquos in 2001 as Company Secretary and joined the Operating Board in September 2004 In addition to his role as Company Secretary Tim is responsible for the Corporate Services Division comprising Legal Services Data Governance Safety Shareholder Services Insurance and Central Security He chairs the Group Safety Committee and the Data Governance Committee Tim joined Sainsburyrsquos from Exelplc the global logistics company now part of DHL where he was Company Secretary and General Counsel He began his career at the international law firm Clifford Chance and is a qualified solicitor Tim is Chairman of the Disability Confident Business Leaders Group which works with Government in shaping the disability employment agenda and in raising awareness of the benefits of employing disabled people
Jim BrownCEO of Sainsburyrsquos Bank
Skills and experienceJim joined Sainsburyrsquos Bank as CEO in June 2019 and is also a member of the Sainsburyrsquos Group Operating Board He has held a number of senior international Financial Services roles - most recently for RBS in the UK as CEO of Williams and Glyn and prior to that CEO of Ulster Bank in Northern Ireland and the Republic of Ireland Before moving to Ireland he was based in Hong Kong and was CEO Retail and Commercial Banking Asia and the Middle East for RBS and ABN AMRO He has also been a member of the RBS Group Management Committee ABN AMRO Executive Group ABN AMRO Global Consumer Leadership Team and the RBSBank of China Joint Steering Committee Earlier in his career he held a number of senior executive roles for Citibank in Asia and Australia and New Zealand Jim has also held various Board positions including at Ulster Bank Saudi Hollandi Bank The Royal Bank of Scotland (China) Co Ltd and RBS (Pakistan) Ltd He is also a past President of the Institute of Banking in Ireland He is currently a Certified Bank Director
Date of appointment August 2019
Paul Mills-HicksFood Commercial Director
Skills and experiencePaul joined the Operating Board in May 2014 as Food Commercial Director having spent over ten years at Sainsburyrsquos He was closely involved in the formation and execution of the lsquoMaking Sainsburyrsquos Great Againrsquo strategy Following this he held a variety of roles in commercial strategy and finance most recently as Business Unit Director for Grocery Prior to Sainsburyrsquos Paul was European Controller at Marks and Spencer Group PLC and a Director at UBS Warburg
Date of appointment May 2014
13
APPENDIX Interim Results 201920 - November 2019
Operating Board
Angie RisleyGroup HR Director
Skills and experienceAngie was appointed Group HR Director and a member of the Operating Board in January 2013 with responsibility for human resources Angie is also a Director of Sainsburyrsquos Bank plc Angie was most recently Non-Executive Director and Chairman of the Remuneration Committee of Serco plc and prior to this was Group HR Director of Lloyds Banking Group and an Executive Director of Whitbread PLC with responsibility for HR and Corporate Social Responsibility Angie is currently Non-Executive Director and Chair of the Remuneration Committee at Smith amp Nephew plc
Date of appointment January 2013
Phil JordanGroup Chief Information Officer
Skills and experiencePhil joined the Board in January 2018 and has brought a fresh globalperspective on technology to the Operating Board in addition to a wealth of experience in digital data and business transformation Prior to joining Sainsburyrsquos Phil had a long and successful track record in telecommunications Most recently he was Global Chief Information Officer at Telefonica overseeing Digital Transformation and Information Technology and prior to that was Chief Information Officer for Vodafone UKIreland Phil has worked as a Non-Executive Advisor on Technology in the Investment amp Retail Banking sector and is currently a Non-Executive Director of TalkTalk Telecom Group PLC and chairs its Cyber-Security Committee
Date of appointment January 2018
Simon RobertsRetail and Operations Director
Skills and experienceSimon joined Sainsburyrsquos and the Operating Board in July 2017 as Central Retail amp Operations Director responsible for Stores Central operation and Logistics In his previous role he was Executive Vice President of Walgreens Boots Alliance and President of Boots with responsibility for commercial and retail operations across the UK and Ireland Prior to Boots Simon was at Marks and Spencer Group PLC where he held operational and customer leadership roles across stores divisions and central operations Simon is also the Non-Executive Chairman at the Institute ofCustomer Service
Date of appointment July 2017
Clodagh MoriartyGroup Chief Digital Officer
Skills and experienceClodagh was appointed Group Chief Digital Officer in June 2018 Clodagh leads the delivery of a consistent and first-rate digital experience for customers across Sainsburyrsquos Argos and Sainsburyrsquos BankClodagh joined Sainsburyrsquos in 2010 from Bain amp Co management consultants where she had gained experience working on a broad range of projects across multiple sectors and countries Following two years as Head of Strategy at Sainsburyrsquosshe moved into Food Commercial as Category Manager for Meal Solutions and then became Head of Online Trading spanning Food General Merchandise and Clothing before being promoted to Director of Online in 2016 In this role Clodagh was instrumental in driving innovation within Groceries Online and launching new initiatives including SmartShop and Chop Chop
Date of appointment June 2018
14
APPENDIX Interim Results 201920 - November 2019
Supplementary financial details
3 Financial calendarQ3 trading statement(15 weeks to 4 January 2020)
Preliminary results(52 weeks to 7 March 2020)
8 January 2020
30 April 2020
1 Weighted average number of shares
The interim dividend datesOrdinary shares
Ex-dividend 14 November 2019Record 15 November 2019Payment 20 December 2019
Sainsburyrsquos Meat Fish amp Poultry Value Own Label1
Gains
Losses
Incremental Switching within Sainsburyrsquos
Dec 17 Oct 19
+2Sales
+4Volume
Bread Investing across Own Label Tiers120+ EPP SKUs launched in H1 200 by end 201920
Repackaged and NPD within Premium
New Owned Brand Replacing Basics
NPD within Core+ Responding in Growth Areas
Repackaged Core bySainsburyrsquos
New
New
Improved
Improved
1 Kantar 12 we 6 October 2019 ndash rolling 12 weeks switching within total Market MFP
21 Interim Results 201920 - November 2019
Be competitive
on price
1
Lower prices on key volume lines
In-Store Volume Returns Examples
Chicken Wings 1kg+12 Volume
pound170was pound210
pound050Only
White Pittas x6+15 Volume
Chestnut Mushrooms 250g+45 Volume
pound080Only
1 Pre wave 3 lockdown (started 24th March to 15th June 19) YoY 2 Last 6 weeks since wave 4 lockdown (started 28th August 19) YoY
-4
0
4
8
12
16
-6 -5 -4 -3 -2 -1 0 1 2 3 4 5 6
Change in volumes ()
Pre1 Post2
22 Interim Results 201920 - November 2019
Be competitive
on price
1
We continue to be less dependent on promotions
230 228
207 209
Sainsburyrsquos Promotional Participation
1819 1920 19201819
Morrisons
Sainsburyrsquos
Tesco
Asda
Spend on Deal1
Q1 Q2
1 Source Nielsen 4 weekly data to 21 September 2019
10
20
30
4040
30
20
10Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep
2018 2019
H1 1920
H1 1920 AVERAGE
34 31
22 21
23 Interim Results 201920 - November 2019
Be competitive
on price
1
Improved grocery value
Base Price Index 2
-1
0
1
2
3
Grocery inflation (Kantar)1
-960bps
-550bps
Commodity VI 2
Aug 17 Jan 18 Jun 18 Nov 18 Apr 19 Oct 19
2004 2007 2010 2013 2016 2019
Morrisons
Sainsburyrsquos
Tesco
Asda
Total Market
Mar Apr May Jun Jul Aug Sep Oct2019
1 Kantar City Reads to Oct 20192 Sainsburyrsquos value index based on Brandview SKU matching data to Oct 2019
24 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
25 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Category tier performance
YoY value share change by tier
12 weeks to September 2019
-03
01
-01
-18
52 weeks to March 2019
Branded
PremiumOwn Brand
Branded
StandardOwn Brand
EconomyOwn Brand
02
-08
-04
00PremiumOwn Brand
StandardOwn Brand
EconomyOwn Brand
Source Nielsen Panel Total FMCG Market Universe Total outlets 52wks data to 9 March 2019 and 12wks data to 21 Sept 2019
26 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Premium private label
Taste the Difference re-launch
bull Over 350 products new repackaged or reformulated
bull Premium ready meals growth now outperforming the market
41
25 2419
Sainsburys Morrisons Tesco Asda
Premium Own Label volume share
Source Nielsen Panel Total FMCG 28 weeks data to 21 September 2019 Premium Own Label share of sales by retailer
27 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Distinctive brands
bull 57 of customers have bought Distinctive Brands since launch
bull On track for pound100m incremental sales
bull 37 new brands in H1 across Fresh and Grocery
bull lsquoTaste of the Futurersquo bays launched in 70 stores- 67 incremental sales
Leon
bull 3 year exclusive partnership
bull 14 products launched
28 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Beauty Rollout
bull Now rolled out to over 60 stores- Sales up over 40
bull Customer numbers up 7
bull Spend per customer up 25
bull Beauty range doubled 1200 additional lines
bull Double digit growth differential against the market
29 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Our values make us different
bull Committed to reduce plastic packaging by 50 by 2025
bull First retailer to remove single use plastic produce and bakery bags from our stores
- Launching reusable bags in fruit and veg aisles
bull Investing in our loose produce offer
bull Removed black plastic trays from ready meals
bull Fresh water stands in cafeacutes for customers to refill bottles
UKrsquos first major retailer to make significant commitment to reduce plastic
30 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Argos category and range focus
bull Availability improvement- Argos master range reduced by c30 over 3 years- Eliminating duplication removing low value items- Better availability of key lines in store
bull Rebalancing into higher margin categories- Gaining share in Furniture1
More distinctive rangemore reason to shop at Sainsburyrsquos
Reduced SKU count -20operational efficiencies
Higher cash gross profit +2 YOY
Volumes +8 operational efficiencies
41 Interim Results 201920 - November 2019
Drive efficiency
to invest in the customer
offer
4
BAU savings to offset cost inflation
Manages inflationary pressures
BAU savingsH1 201920
Procurement GNFR
Retail Technology Efficiencies
Retail HRRetail
management structures
Shrink Reduction
42 Interim Results 201920 - November 2019
Drive efficiency
to invest in the customer
offer
4
Strategic cost transformation 5 year plan
Converge Tackle fixed cost
End to end reviews
Retail Operations Marketing and Commercial Operations
Other central support
Logistics and Supply Chain
Project A
Project C
Project D
Shared Services BPO
Property strategy
Project BGNFR procurement
Capital prioritisation
Technology Digital and Corporate Services
pound250-pound350m
pound150-pound250m
pound400-pound600mExecution underway In planning Opportunities identified
pound5bn addressable cost base
43 Interim Results 201920 - November 2019
Grow connected
services
5
44 Interim Results 201920 - November 2019
Grow connected
services
5
Financial Services Priorities
To be the provider of financial services for loyal Sainsburyrsquos and Argos customers
An agile capital and cost efficient provider of simple mobile-led financial services
Vision
Objective
Priorities Reshape Simplify Strengthen
45 Interim Results 201920 - November 2019
Grow connected
services
5
Current Customer Base
Customer Credit Risk Balance Sheet Earnings
Argos Storecards 22m Prime Near Prime
Credit Cards 09m Prime
Personal Loans 05m Prime
Mortgages 9K Exit
Total Lending
Deposits 03m
Insurances 05m Very Low Risk
Travel Money 266 Sites
ATMs 1890
Financial Services reshaping the portfolio
46 Interim Results 201920 - November 2019
Grow connected
services
5
Increase connectivity and value for Group
Stop mortgage acquisition review back book options
No capital input from the Group from now1
Costincome c503 within 5 years
Double UPBT double digit ROCE within 5 years
Upstream cash within 5 years2
Financial Services key targets
Transform the cost base
Improve returns
Financial services cash generative
Reduce risk profile to Group
Stop putting cash in to Financial Services
2
4
6
3
1
5
Focus on Sainsburyrsquos customer base
1 Subject to regulatory changes requirements2 Subject to regulatory approval3 On a Group contribution basis
47 Interim Results 201920 - November 2019
Grow connected
services
5
Nectar
bull Biggest loyalty programme in the UK
bull Over 18 million collectors
bull Most recognised loyalty brand in the UK
bull Launch of Nectar digital- 21 million app users- Increase in overall Nectar participation- Increased levels of personalisation- 138000 new Nectar customers- 1 app on launch weekend
bull Coalition strengthened with addition of Esso in June 2019
48 Interim Results 201920 - November 2019
Provide a seamless customer
experience
6
49 Interim Results 201920 - November 2019
Provide a seamless customer
experience
6
Digital
bull Groceries Online sales penetration of 8- App accounts for over 20 of orders
bull 21 million digital Nectar app users
bull 14 million Argos Financial Services app downloads
bull Smartshop rollout in over 350 stores
Groceries online
Chop Chop
SmartShop
Universaldiscovery
Seamlessfinancialservices
Singlebasket
50 Interim Results 201920 - November 2019
We will help our customers live well for less
Confident in the core Integrated customer offer
One multi brand multi channel business
Strong cash generation supporting investment dividend and allowing deleverage
Financial flexibility and resilience
Sustainable cost reduction covering cost inflation and funding investment in our competitive offer
QampA
APPENDIX Interim Results 201920 - November 2019
Appendices
APPENDIX Interim Results 201920 - November 2019
Guidance for 201920
1
Spacebull Expect to open 2 new Sainsburyrsquos supermarkets and up to 15 convenience storesbull Expect to open around 25 Argos stores in Sainsburyrsquos (of which 11 are
relocations) resulting in around 305 Argos stores in supermarketsbull Expect to close 2 supermarkets around 25 convenience stores and around 20
Argos stores in FY201920 as part of announced property closure programme of 10-15 supermarkets 30-40 convenience stores and 60-70 Argos stores
Financial Servicesbull Financial services underlying operating profit expected to be cpound45m including a
cpound10m benefit as a result of a change in transfer pricing between Argos and Argos Financial Services
bull Financial Services non-underlying costs are expected to be around pound30mbull No further capital injections into the Bank are expected following pound35m in H1 201920
Depreciation and amortisationbull Expect underlying retail depreciation and amortisation of around pound12bn
including cpound500m right of use asset depreciation
CostsOperating cost inflationbull Cost inflation between 2 and 3Cost savingsbull Continue to deliver cost savings to at least offset the impact of cost inflation
Finance costsbull Net finance costs of around pound405m including pound320m lease interest in
201920 following the introduction of IFRS 16
One-off itemsbull In 201920 cash outflows as a result of items excluded from
underlying results should not exceed pound100mbull Property strategy programme one-off costs expected to be
pound230m-pound270m of which cash costs are pound30-40m
Dividendbull Sainsburyrsquos plans to change the full year dividend policy to 19x cover by
underlying earnings (versus 20x previously) to offset the dilutive (non cash) impact of IFRS 16 on underlying earnings
Capital expenditurebull Retail capital expenditure to be around pound550mbull Retail capital expenditure is expected to be around pound550m-pound600m per
annum over the medium term
Net debtbull Net debt before fair value movements on derivatives to reduce by at
least pound300m
Tax ratebull Underlying tax rate to be between 25 and 26
APPENDIX Interim Results 201920 - November 2019
Retail sales
1 Sales including VAT excluding fuel
LFL sales growth1
(10)
Sales from net new space1
04
Total sales growth1
(06)
Supermarkets2
(07)
Convenience20
Groceries Online
70
Channels
(01)(25)
(12)
2 Supermarket sales include Argos SiS sales FY 1819 16
pound139bn
pound103bnGrocery
pound30bnGeneralMerchandise
pound488mClothing
2
Chart1
201819
194
66
1
Sheet1
APPENDIX Interim Results 201920 - November 2019
Sainsburyrsquos sales area and store numbersAs at 21 September 2019
Sainsburyrsquos store estateAs at 21 September 2019
Sq ftsales area
82446
870
40001 to60000
20001 to40000
10000 to20000
Under10000 Total
Over60000
0122122
0197197
0175175
06767
824607
1431
Argos storesArgos in SainsburyrsquosArgos in HomebaseOtherArgos total store numbers
Habitat1
Collection points
594281
8-
883
16317
As at21 Sept 2019
Disposalsclosures
Newstores
As at9 March 2019
17--8
-1
(7)-
(2)-
(9)
-(36)
588288
6-
88216
282
ConvenienceSupermarketsTotal stores
Number of stores
Sq ftsales area
1929350
2279
40001 to60000
20001 to40000
10000 to20000
Under10000 Total
Over60000
-18441844
-58185818
-85018501
-46604660
19292117323102
ConvenienceSupermarketsTotal stores
Space by store size (lsquo000 sq ft)
Argos and Habitat store numbers
1 5 Habitat stores 11 Habitat stores in Sainsburys
4
APPENDIX Interim Results 201920 - November 2019
ClosureBitterne West
Sainsburyrsquos investment programme201920
Q1
Supermarkets ConvenienceNew storesMilton Keynes Brooklands District CentBromley High StLeeds Wike Ridge LaneSalford Harbour CityCanterbury High St
ReplacementMayfair Stratton St
ClosuresMayfairWarren St
Q1Q1Q1Q2Q2
Q2
Q1Q2
5
APPENDIX Interim Results 201920 - November 2019
Retail margin
Retail sales (inc VAT inc fuel)(exc VAT inc fuel)
Retail underlying EBITDAR1
Retail underlying EBITDAR margin 2
at constant fuel pricesRetail underlying operating profit3
Retail underlying operating margin 4
at constant fuel prices
1656714808
10677272
4373030
1661214856
11147575
4873333
030342
30 bps28 bps10333 bps32 bps
1 Retail underlying operating profit before net rental income of pound6 million and underlying depreciation and amortisation of pound636 million2 Retail underlying EBITDAR divided by underlying retail sales excluding VAT3 Retail underlying earnings before interest tax and Sainsburyrsquos underlying share of post-tax profit from joint ventures4 Retail underlying operating profit divided by underlying retail sales excluding VAT
poundm H1201920
H1201819
Change
6
APPENDIX Interim Results 201920 - November 2019
H1201920
H1201819
Group retail
Return on capital employed 1
Net debt to EBITDAR (times)23
Fixed charge cover (times)2
Underlying tax rate Core retail capex sales5
713126
26515
743326
25715
poundm
1 ROCE Return is defined as a 52 week rolling underlying profit before interest and tax Capital employed is defined as group net assets2 Net debt of pound6778 million includes lease obligations under IFRS 16 and perpetual securities treated as debt divided by Group underlying EBITDAR of pound2171 million calculated for a 52-week period to 21 September 20193 Group underlying EBITDAR divided by rent (both capital and interest) and net finance costs where interest on perpetual securities is treated as an underlying finance costs4 52 weeks to 22nd September 2018 is not available due to the implementation of IFRS 16 Comparatives therefore reflect the 52 weeks to 9th March 20195 Includes retail sales inc vat inc fuel
4
4
7
APPENDIX Interim Results 201920 - November 2019
Plc Board
Kevin OrsquoByrneChief Financial Officer
Mike Coupe Group Chief Executive
Dame Susan Rice Senior Independent Director
Matt BrittinNon-Executive Director
Jo HarlowNon-Executive Director
Brian CassinNon-Executive Director
David KeensNon-Executive Director
Jean Tomlin Non-Executive Director
Martin Scicluna Chairman
8
APPENDIX Interim Results 201920 - November 2019
Plc Board
Mike Coupe Group Chief Executive Officer
Skills and experienceAppointed Group Chief Executive Officer on 9 July 2014 Mike has been a member of the Operating Board since October 2004 Mike has vast retail industry experience in trading strategy marketing digital and online as well as multi-site store experience He joined Sainsburyrsquos from Big Food Group where he was a board director of Big Food Group PLC and Managing Director of Iceland Food Stores He previously worked for both Asda and Tesco PLC where he served in a variety of senior management roles
Date of appointment 1 August 2007Mike has served as an Executive Director since 1 August 2007 and as Chief Executive Officer since 9 July 2014
Committee membershipCorporate Responsibility and Sustainability Committee
Kevin OrsquoByrne Chief Financial Officer
Skills and experienceKevin brings to the Board a wealth of retail and finance experience Kevin was previously Chief Executive Officer of Poundland Group Limited until December 2016 and held executive roles at Kingfisher plc from 2008 to 2015 including Divisional Director UK China and Turkey Chief Executive Officer of BampQ UK amp Ireland and Group Finance Director He was previously Group Finance Director of Dixons Retail plc and European Finance Director of Quaker Oats He was a Non-Executive Director of Land Securities Group PLC from 2008 to September 2017 where he was Chairman of the Audit Committee and Senior Independent Director
Date of appointment 9 January 2017
Other current rolesNon-Executive Director of Greene King plc
Skills and experienceMartin brings a breadth of experience and leadership in both executive and non-executive roles His previous roles include positions as the Chairman of Great Portland Estates plc Senior Independent Director and Chair of the Audit Committee of Worldpay Inc and Non-Executive Director and Chair of the Audit Committee of Lloyds Banking Group plc He was a partner at Deloitte LLP for 26 years serving as Chairman from 1995 to 2007 where his clients included Dixons WH Smith Alliance Unichem and Cadburyrsquos
Other current rolesChairman of RSA Insurance Group plc
Martin Scicluna Chairman
Date of appointment 1 November 2018 Martin joined the Board as Chairman Designate and Non-Executive Director on 1 November 2018 He was appointed as Chairman of the Board on 10 March 2019
Committee membershipChair of the Nomination Committee
Dame Susan Rice Senior Independent Director
Skills and experienceSusan has extensive experience as a Non-Executive Director as well as in retail banking financial services leadership and sustainability Her career in retail bankingis particularly relevant to our ownership ofSainsburyrsquos Bank Previously Susan was a member of the First Ministerrsquos Council of Economic Advisors Managing Director of Lloyds Banking Group Scotland and was previously Chief Executive and then Chairman of Lloyds TSB Scotland plc She has also held a range of other non-executive directorships including at the Bank of England and SSE plc
Committee membershipChair of the Remuneration Committee and a member of the Nomination Committee
Date of appointment 1 June 2013
Other current rolesChair of Scottish Water and Business Stream Chair of the Scottish Fiscal Commission Non-Executive Director of the North American Income Trust C Hoare and Co and Senior Independent Director of the North American Income Trust
9
Other current rolesNon-Executive Director and Chairman of the Audit Committee of Centrica plc
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jean Tomlin Non-Executive Director
Skills and experienceJean has extensive experience and breadth of skills in human resources and corporate responsibility Jean was formerly Director of HR Workforce and Accreditation for The London OrganisingCommittee of the Olympic and Paralympic Games where she set the strategic direction to ensure the mobilisation of the combined 200000-strong workforce including paid staff volunteers and contractors which represented the recruitment and mobilisation of the largest peacetime workforce and set the industry standard for volunteering with the highly acclaimed Games She was previously Group HR Director at Marks and Spencer Group Plc HR Director and founder member of Egg plc and Sales amp Operations Director of Prudential Direct
Date of appointment 1 January 2013
Committee membershipAudit Committee Corporate Responsibility and Sustainability Committee and Nomination Committee
David Keens Non-Executive Director
Skills and experienceDavid has extensive retail experience and knowledge of consumer facing businesses together with his core skills in finance David was formerly Group Finance Director of next plc from 1991 to 2015 and their Group Treasurer from 1986 to 1991 Previous management experience includes nine years in the UK and overseas operations of multinational food manufacturer Nabisco and prior to that seven years in the accountancy profession
Date of appointment 29 April 2015
Committee membershipChair of the Audit Committee and a member of the Nomination Committee
Other current rolesIndependent Board member of Capri Holdings Limited Non-Executive Director of Hakluyt and Chief Executive Officer of Chanzo Limited
Other current rolesNon-Executive Director Senior Independent Director and Chair of the Audit Committee of Auto Trader Group plc
Matt BrittinNon-Executive Director
Skills and experienceMatt has extensive experience of running a high profile fast moving innovative digital business Since 2015 he has been responsible for Googlersquos business and operations in Europe the Middle East and Africa and hersquos been in leadership roles at Google since 2007 Prior to that Matt spent much of his career in media and marketing with particular interests in strategy commercial development and sales performance This included commercial and digital leadership roles in UK media
Date of appointment 27 January 2011
Committee membershipNomination Committee and Remuneration Committee
Other current rolesGooglersquos President ndash Europe Middle East and Africa and Director of The Media Trust
Brian Cassin Non-Executive Director
Skills and experienceBrian brings present day experience of running a FTSE40 group and of big data and analytics ndash topics of key importance to Sainsburyrsquos Brian joined Experian plc as Chief Financial Officer in April 2012 a post he held until his appointment as Chief Executive Officer in July 2014 Prior to this Brian spent his career in investment banking at Greenhill amp Co where he was Managing Director and Partner Brian has also held various roles at Baring Brothers International and at the London Stock Exchange
Date of appointment 1 April 2016
Committee membershipAudit Committee and Nomination Committee
Other current rolesChief Executive Officer of Experian plc
10
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jo Harlow Non-Executive Director
Skills and experienceJo brings a wealth of experience in consumer-facing businesses and in the telecoms and technology industry bothin the UK and internationally Jo spent 12 years in a variety of senior management roles with Nokia and Microsoft Prior to this she spent eight years at PampG and 11 years at Reebok in senior sales and marketing positions in both Europe and the US
Date of appointment 11 September 2017
Committee membershipChair of the Corporate Responsibility and Sustainability Committee and member of the Nomination Committee and Remuneration Committee
Life PresidentLord Sainsbury of Preston Candover KG
Other current rolesNon-Executive Director of InterContinental Hotels plc Non-Executive Director of Halmaplc and Member of the Supervisory Board of Ceconomy AG
11
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief Executive
Tim FallowfieldCompany Secretary amp Corporate Services Director
Kevin OrsquoByrne Chief Financial Officer
Jim BrownChief Executive Officer of Sainsburyrsquos Bank
Paul Mills-HicksFood Commercial Director
Angie RisleyGroup HR Director
Phil JordanGroup Chief InformationOfficer
Simon RobertsRetail and Operations Director
Clo MoriartyGroup Chief Digital Officer
12
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief ExecutiveSee Appendix page 9
Kevin OrsquoByrneChief Financial OfficerSee Appendix page 9
Tim FallowfieldCompany Secretary amp Corporate Services Director
Date of appointment September 2004
Skills and experienceTim joined Sainsburyrsquos in 2001 as Company Secretary and joined the Operating Board in September 2004 In addition to his role as Company Secretary Tim is responsible for the Corporate Services Division comprising Legal Services Data Governance Safety Shareholder Services Insurance and Central Security He chairs the Group Safety Committee and the Data Governance Committee Tim joined Sainsburyrsquos from Exelplc the global logistics company now part of DHL where he was Company Secretary and General Counsel He began his career at the international law firm Clifford Chance and is a qualified solicitor Tim is Chairman of the Disability Confident Business Leaders Group which works with Government in shaping the disability employment agenda and in raising awareness of the benefits of employing disabled people
Jim BrownCEO of Sainsburyrsquos Bank
Skills and experienceJim joined Sainsburyrsquos Bank as CEO in June 2019 and is also a member of the Sainsburyrsquos Group Operating Board He has held a number of senior international Financial Services roles - most recently for RBS in the UK as CEO of Williams and Glyn and prior to that CEO of Ulster Bank in Northern Ireland and the Republic of Ireland Before moving to Ireland he was based in Hong Kong and was CEO Retail and Commercial Banking Asia and the Middle East for RBS and ABN AMRO He has also been a member of the RBS Group Management Committee ABN AMRO Executive Group ABN AMRO Global Consumer Leadership Team and the RBSBank of China Joint Steering Committee Earlier in his career he held a number of senior executive roles for Citibank in Asia and Australia and New Zealand Jim has also held various Board positions including at Ulster Bank Saudi Hollandi Bank The Royal Bank of Scotland (China) Co Ltd and RBS (Pakistan) Ltd He is also a past President of the Institute of Banking in Ireland He is currently a Certified Bank Director
Date of appointment August 2019
Paul Mills-HicksFood Commercial Director
Skills and experiencePaul joined the Operating Board in May 2014 as Food Commercial Director having spent over ten years at Sainsburyrsquos He was closely involved in the formation and execution of the lsquoMaking Sainsburyrsquos Great Againrsquo strategy Following this he held a variety of roles in commercial strategy and finance most recently as Business Unit Director for Grocery Prior to Sainsburyrsquos Paul was European Controller at Marks and Spencer Group PLC and a Director at UBS Warburg
Date of appointment May 2014
13
APPENDIX Interim Results 201920 - November 2019
Operating Board
Angie RisleyGroup HR Director
Skills and experienceAngie was appointed Group HR Director and a member of the Operating Board in January 2013 with responsibility for human resources Angie is also a Director of Sainsburyrsquos Bank plc Angie was most recently Non-Executive Director and Chairman of the Remuneration Committee of Serco plc and prior to this was Group HR Director of Lloyds Banking Group and an Executive Director of Whitbread PLC with responsibility for HR and Corporate Social Responsibility Angie is currently Non-Executive Director and Chair of the Remuneration Committee at Smith amp Nephew plc
Date of appointment January 2013
Phil JordanGroup Chief Information Officer
Skills and experiencePhil joined the Board in January 2018 and has brought a fresh globalperspective on technology to the Operating Board in addition to a wealth of experience in digital data and business transformation Prior to joining Sainsburyrsquos Phil had a long and successful track record in telecommunications Most recently he was Global Chief Information Officer at Telefonica overseeing Digital Transformation and Information Technology and prior to that was Chief Information Officer for Vodafone UKIreland Phil has worked as a Non-Executive Advisor on Technology in the Investment amp Retail Banking sector and is currently a Non-Executive Director of TalkTalk Telecom Group PLC and chairs its Cyber-Security Committee
Date of appointment January 2018
Simon RobertsRetail and Operations Director
Skills and experienceSimon joined Sainsburyrsquos and the Operating Board in July 2017 as Central Retail amp Operations Director responsible for Stores Central operation and Logistics In his previous role he was Executive Vice President of Walgreens Boots Alliance and President of Boots with responsibility for commercial and retail operations across the UK and Ireland Prior to Boots Simon was at Marks and Spencer Group PLC where he held operational and customer leadership roles across stores divisions and central operations Simon is also the Non-Executive Chairman at the Institute ofCustomer Service
Date of appointment July 2017
Clodagh MoriartyGroup Chief Digital Officer
Skills and experienceClodagh was appointed Group Chief Digital Officer in June 2018 Clodagh leads the delivery of a consistent and first-rate digital experience for customers across Sainsburyrsquos Argos and Sainsburyrsquos BankClodagh joined Sainsburyrsquos in 2010 from Bain amp Co management consultants where she had gained experience working on a broad range of projects across multiple sectors and countries Following two years as Head of Strategy at Sainsburyrsquosshe moved into Food Commercial as Category Manager for Meal Solutions and then became Head of Online Trading spanning Food General Merchandise and Clothing before being promoted to Director of Online in 2016 In this role Clodagh was instrumental in driving innovation within Groceries Online and launching new initiatives including SmartShop and Chop Chop
Date of appointment June 2018
14
APPENDIX Interim Results 201920 - November 2019
Supplementary financial details
3 Financial calendarQ3 trading statement(15 weeks to 4 January 2020)
Preliminary results(52 weeks to 7 March 2020)
8 January 2020
30 April 2020
1 Weighted average number of shares
The interim dividend datesOrdinary shares
Ex-dividend 14 November 2019Record 15 November 2019Payment 20 December 2019
Sainsburyrsquos Meat Fish amp Poultry Value Own Label1
Gains
Losses
Incremental Switching within Sainsburyrsquos
Dec 17 Oct 19
+2Sales
+4Volume
Bread Investing across Own Label Tiers120+ EPP SKUs launched in H1 200 by end 201920
Repackaged and NPD within Premium
New Owned Brand Replacing Basics
NPD within Core+ Responding in Growth Areas
Repackaged Core bySainsburyrsquos
New
New
Improved
Improved
1 Kantar 12 we 6 October 2019 ndash rolling 12 weeks switching within total Market MFP
21 Interim Results 201920 - November 2019
Be competitive
on price
1
Lower prices on key volume lines
In-Store Volume Returns Examples
Chicken Wings 1kg+12 Volume
pound170was pound210
pound050Only
White Pittas x6+15 Volume
Chestnut Mushrooms 250g+45 Volume
pound080Only
1 Pre wave 3 lockdown (started 24th March to 15th June 19) YoY 2 Last 6 weeks since wave 4 lockdown (started 28th August 19) YoY
-4
0
4
8
12
16
-6 -5 -4 -3 -2 -1 0 1 2 3 4 5 6
Change in volumes ()
Pre1 Post2
22 Interim Results 201920 - November 2019
Be competitive
on price
1
We continue to be less dependent on promotions
230 228
207 209
Sainsburyrsquos Promotional Participation
1819 1920 19201819
Morrisons
Sainsburyrsquos
Tesco
Asda
Spend on Deal1
Q1 Q2
1 Source Nielsen 4 weekly data to 21 September 2019
10
20
30
4040
30
20
10Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep
2018 2019
H1 1920
H1 1920 AVERAGE
34 31
22 21
23 Interim Results 201920 - November 2019
Be competitive
on price
1
Improved grocery value
Base Price Index 2
-1
0
1
2
3
Grocery inflation (Kantar)1
-960bps
-550bps
Commodity VI 2
Aug 17 Jan 18 Jun 18 Nov 18 Apr 19 Oct 19
2004 2007 2010 2013 2016 2019
Morrisons
Sainsburyrsquos
Tesco
Asda
Total Market
Mar Apr May Jun Jul Aug Sep Oct2019
1 Kantar City Reads to Oct 20192 Sainsburyrsquos value index based on Brandview SKU matching data to Oct 2019
24 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
25 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Category tier performance
YoY value share change by tier
12 weeks to September 2019
-03
01
-01
-18
52 weeks to March 2019
Branded
PremiumOwn Brand
Branded
StandardOwn Brand
EconomyOwn Brand
02
-08
-04
00PremiumOwn Brand
StandardOwn Brand
EconomyOwn Brand
Source Nielsen Panel Total FMCG Market Universe Total outlets 52wks data to 9 March 2019 and 12wks data to 21 Sept 2019
26 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Premium private label
Taste the Difference re-launch
bull Over 350 products new repackaged or reformulated
bull Premium ready meals growth now outperforming the market
41
25 2419
Sainsburys Morrisons Tesco Asda
Premium Own Label volume share
Source Nielsen Panel Total FMCG 28 weeks data to 21 September 2019 Premium Own Label share of sales by retailer
27 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Distinctive brands
bull 57 of customers have bought Distinctive Brands since launch
bull On track for pound100m incremental sales
bull 37 new brands in H1 across Fresh and Grocery
bull lsquoTaste of the Futurersquo bays launched in 70 stores- 67 incremental sales
Leon
bull 3 year exclusive partnership
bull 14 products launched
28 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Beauty Rollout
bull Now rolled out to over 60 stores- Sales up over 40
bull Customer numbers up 7
bull Spend per customer up 25
bull Beauty range doubled 1200 additional lines
bull Double digit growth differential against the market
29 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Our values make us different
bull Committed to reduce plastic packaging by 50 by 2025
bull First retailer to remove single use plastic produce and bakery bags from our stores
- Launching reusable bags in fruit and veg aisles
bull Investing in our loose produce offer
bull Removed black plastic trays from ready meals
bull Fresh water stands in cafeacutes for customers to refill bottles
UKrsquos first major retailer to make significant commitment to reduce plastic
30 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Argos category and range focus
bull Availability improvement- Argos master range reduced by c30 over 3 years- Eliminating duplication removing low value items- Better availability of key lines in store
bull Rebalancing into higher margin categories- Gaining share in Furniture1
More distinctive rangemore reason to shop at Sainsburyrsquos
Reduced SKU count -20operational efficiencies
Higher cash gross profit +2 YOY
Volumes +8 operational efficiencies
41 Interim Results 201920 - November 2019
Drive efficiency
to invest in the customer
offer
4
BAU savings to offset cost inflation
Manages inflationary pressures
BAU savingsH1 201920
Procurement GNFR
Retail Technology Efficiencies
Retail HRRetail
management structures
Shrink Reduction
42 Interim Results 201920 - November 2019
Drive efficiency
to invest in the customer
offer
4
Strategic cost transformation 5 year plan
Converge Tackle fixed cost
End to end reviews
Retail Operations Marketing and Commercial Operations
Other central support
Logistics and Supply Chain
Project A
Project C
Project D
Shared Services BPO
Property strategy
Project BGNFR procurement
Capital prioritisation
Technology Digital and Corporate Services
pound250-pound350m
pound150-pound250m
pound400-pound600mExecution underway In planning Opportunities identified
pound5bn addressable cost base
43 Interim Results 201920 - November 2019
Grow connected
services
5
44 Interim Results 201920 - November 2019
Grow connected
services
5
Financial Services Priorities
To be the provider of financial services for loyal Sainsburyrsquos and Argos customers
An agile capital and cost efficient provider of simple mobile-led financial services
Vision
Objective
Priorities Reshape Simplify Strengthen
45 Interim Results 201920 - November 2019
Grow connected
services
5
Current Customer Base
Customer Credit Risk Balance Sheet Earnings
Argos Storecards 22m Prime Near Prime
Credit Cards 09m Prime
Personal Loans 05m Prime
Mortgages 9K Exit
Total Lending
Deposits 03m
Insurances 05m Very Low Risk
Travel Money 266 Sites
ATMs 1890
Financial Services reshaping the portfolio
46 Interim Results 201920 - November 2019
Grow connected
services
5
Increase connectivity and value for Group
Stop mortgage acquisition review back book options
No capital input from the Group from now1
Costincome c503 within 5 years
Double UPBT double digit ROCE within 5 years
Upstream cash within 5 years2
Financial Services key targets
Transform the cost base
Improve returns
Financial services cash generative
Reduce risk profile to Group
Stop putting cash in to Financial Services
2
4
6
3
1
5
Focus on Sainsburyrsquos customer base
1 Subject to regulatory changes requirements2 Subject to regulatory approval3 On a Group contribution basis
47 Interim Results 201920 - November 2019
Grow connected
services
5
Nectar
bull Biggest loyalty programme in the UK
bull Over 18 million collectors
bull Most recognised loyalty brand in the UK
bull Launch of Nectar digital- 21 million app users- Increase in overall Nectar participation- Increased levels of personalisation- 138000 new Nectar customers- 1 app on launch weekend
bull Coalition strengthened with addition of Esso in June 2019
48 Interim Results 201920 - November 2019
Provide a seamless customer
experience
6
49 Interim Results 201920 - November 2019
Provide a seamless customer
experience
6
Digital
bull Groceries Online sales penetration of 8- App accounts for over 20 of orders
bull 21 million digital Nectar app users
bull 14 million Argos Financial Services app downloads
bull Smartshop rollout in over 350 stores
Groceries online
Chop Chop
SmartShop
Universaldiscovery
Seamlessfinancialservices
Singlebasket
50 Interim Results 201920 - November 2019
We will help our customers live well for less
Confident in the core Integrated customer offer
One multi brand multi channel business
Strong cash generation supporting investment dividend and allowing deleverage
Financial flexibility and resilience
Sustainable cost reduction covering cost inflation and funding investment in our competitive offer
QampA
APPENDIX Interim Results 201920 - November 2019
Appendices
APPENDIX Interim Results 201920 - November 2019
Guidance for 201920
1
Spacebull Expect to open 2 new Sainsburyrsquos supermarkets and up to 15 convenience storesbull Expect to open around 25 Argos stores in Sainsburyrsquos (of which 11 are
relocations) resulting in around 305 Argos stores in supermarketsbull Expect to close 2 supermarkets around 25 convenience stores and around 20
Argos stores in FY201920 as part of announced property closure programme of 10-15 supermarkets 30-40 convenience stores and 60-70 Argos stores
Financial Servicesbull Financial services underlying operating profit expected to be cpound45m including a
cpound10m benefit as a result of a change in transfer pricing between Argos and Argos Financial Services
bull Financial Services non-underlying costs are expected to be around pound30mbull No further capital injections into the Bank are expected following pound35m in H1 201920
Depreciation and amortisationbull Expect underlying retail depreciation and amortisation of around pound12bn
including cpound500m right of use asset depreciation
CostsOperating cost inflationbull Cost inflation between 2 and 3Cost savingsbull Continue to deliver cost savings to at least offset the impact of cost inflation
Finance costsbull Net finance costs of around pound405m including pound320m lease interest in
201920 following the introduction of IFRS 16
One-off itemsbull In 201920 cash outflows as a result of items excluded from
underlying results should not exceed pound100mbull Property strategy programme one-off costs expected to be
pound230m-pound270m of which cash costs are pound30-40m
Dividendbull Sainsburyrsquos plans to change the full year dividend policy to 19x cover by
underlying earnings (versus 20x previously) to offset the dilutive (non cash) impact of IFRS 16 on underlying earnings
Capital expenditurebull Retail capital expenditure to be around pound550mbull Retail capital expenditure is expected to be around pound550m-pound600m per
annum over the medium term
Net debtbull Net debt before fair value movements on derivatives to reduce by at
least pound300m
Tax ratebull Underlying tax rate to be between 25 and 26
APPENDIX Interim Results 201920 - November 2019
Retail sales
1 Sales including VAT excluding fuel
LFL sales growth1
(10)
Sales from net new space1
04
Total sales growth1
(06)
Supermarkets2
(07)
Convenience20
Groceries Online
70
Channels
(01)(25)
(12)
2 Supermarket sales include Argos SiS sales FY 1819 16
pound139bn
pound103bnGrocery
pound30bnGeneralMerchandise
pound488mClothing
2
Chart1
201819
194
66
1
Sheet1
APPENDIX Interim Results 201920 - November 2019
Sainsburyrsquos sales area and store numbersAs at 21 September 2019
Sainsburyrsquos store estateAs at 21 September 2019
Sq ftsales area
82446
870
40001 to60000
20001 to40000
10000 to20000
Under10000 Total
Over60000
0122122
0197197
0175175
06767
824607
1431
Argos storesArgos in SainsburyrsquosArgos in HomebaseOtherArgos total store numbers
Habitat1
Collection points
594281
8-
883
16317
As at21 Sept 2019
Disposalsclosures
Newstores
As at9 March 2019
17--8
-1
(7)-
(2)-
(9)
-(36)
588288
6-
88216
282
ConvenienceSupermarketsTotal stores
Number of stores
Sq ftsales area
1929350
2279
40001 to60000
20001 to40000
10000 to20000
Under10000 Total
Over60000
-18441844
-58185818
-85018501
-46604660
19292117323102
ConvenienceSupermarketsTotal stores
Space by store size (lsquo000 sq ft)
Argos and Habitat store numbers
1 5 Habitat stores 11 Habitat stores in Sainsburys
4
APPENDIX Interim Results 201920 - November 2019
ClosureBitterne West
Sainsburyrsquos investment programme201920
Q1
Supermarkets ConvenienceNew storesMilton Keynes Brooklands District CentBromley High StLeeds Wike Ridge LaneSalford Harbour CityCanterbury High St
ReplacementMayfair Stratton St
ClosuresMayfairWarren St
Q1Q1Q1Q2Q2
Q2
Q1Q2
5
APPENDIX Interim Results 201920 - November 2019
Retail margin
Retail sales (inc VAT inc fuel)(exc VAT inc fuel)
Retail underlying EBITDAR1
Retail underlying EBITDAR margin 2
at constant fuel pricesRetail underlying operating profit3
Retail underlying operating margin 4
at constant fuel prices
1656714808
10677272
4373030
1661214856
11147575
4873333
030342
30 bps28 bps10333 bps32 bps
1 Retail underlying operating profit before net rental income of pound6 million and underlying depreciation and amortisation of pound636 million2 Retail underlying EBITDAR divided by underlying retail sales excluding VAT3 Retail underlying earnings before interest tax and Sainsburyrsquos underlying share of post-tax profit from joint ventures4 Retail underlying operating profit divided by underlying retail sales excluding VAT
poundm H1201920
H1201819
Change
6
APPENDIX Interim Results 201920 - November 2019
H1201920
H1201819
Group retail
Return on capital employed 1
Net debt to EBITDAR (times)23
Fixed charge cover (times)2
Underlying tax rate Core retail capex sales5
713126
26515
743326
25715
poundm
1 ROCE Return is defined as a 52 week rolling underlying profit before interest and tax Capital employed is defined as group net assets2 Net debt of pound6778 million includes lease obligations under IFRS 16 and perpetual securities treated as debt divided by Group underlying EBITDAR of pound2171 million calculated for a 52-week period to 21 September 20193 Group underlying EBITDAR divided by rent (both capital and interest) and net finance costs where interest on perpetual securities is treated as an underlying finance costs4 52 weeks to 22nd September 2018 is not available due to the implementation of IFRS 16 Comparatives therefore reflect the 52 weeks to 9th March 20195 Includes retail sales inc vat inc fuel
4
4
7
APPENDIX Interim Results 201920 - November 2019
Plc Board
Kevin OrsquoByrneChief Financial Officer
Mike Coupe Group Chief Executive
Dame Susan Rice Senior Independent Director
Matt BrittinNon-Executive Director
Jo HarlowNon-Executive Director
Brian CassinNon-Executive Director
David KeensNon-Executive Director
Jean Tomlin Non-Executive Director
Martin Scicluna Chairman
8
APPENDIX Interim Results 201920 - November 2019
Plc Board
Mike Coupe Group Chief Executive Officer
Skills and experienceAppointed Group Chief Executive Officer on 9 July 2014 Mike has been a member of the Operating Board since October 2004 Mike has vast retail industry experience in trading strategy marketing digital and online as well as multi-site store experience He joined Sainsburyrsquos from Big Food Group where he was a board director of Big Food Group PLC and Managing Director of Iceland Food Stores He previously worked for both Asda and Tesco PLC where he served in a variety of senior management roles
Date of appointment 1 August 2007Mike has served as an Executive Director since 1 August 2007 and as Chief Executive Officer since 9 July 2014
Committee membershipCorporate Responsibility and Sustainability Committee
Kevin OrsquoByrne Chief Financial Officer
Skills and experienceKevin brings to the Board a wealth of retail and finance experience Kevin was previously Chief Executive Officer of Poundland Group Limited until December 2016 and held executive roles at Kingfisher plc from 2008 to 2015 including Divisional Director UK China and Turkey Chief Executive Officer of BampQ UK amp Ireland and Group Finance Director He was previously Group Finance Director of Dixons Retail plc and European Finance Director of Quaker Oats He was a Non-Executive Director of Land Securities Group PLC from 2008 to September 2017 where he was Chairman of the Audit Committee and Senior Independent Director
Date of appointment 9 January 2017
Other current rolesNon-Executive Director of Greene King plc
Skills and experienceMartin brings a breadth of experience and leadership in both executive and non-executive roles His previous roles include positions as the Chairman of Great Portland Estates plc Senior Independent Director and Chair of the Audit Committee of Worldpay Inc and Non-Executive Director and Chair of the Audit Committee of Lloyds Banking Group plc He was a partner at Deloitte LLP for 26 years serving as Chairman from 1995 to 2007 where his clients included Dixons WH Smith Alliance Unichem and Cadburyrsquos
Other current rolesChairman of RSA Insurance Group plc
Martin Scicluna Chairman
Date of appointment 1 November 2018 Martin joined the Board as Chairman Designate and Non-Executive Director on 1 November 2018 He was appointed as Chairman of the Board on 10 March 2019
Committee membershipChair of the Nomination Committee
Dame Susan Rice Senior Independent Director
Skills and experienceSusan has extensive experience as a Non-Executive Director as well as in retail banking financial services leadership and sustainability Her career in retail bankingis particularly relevant to our ownership ofSainsburyrsquos Bank Previously Susan was a member of the First Ministerrsquos Council of Economic Advisors Managing Director of Lloyds Banking Group Scotland and was previously Chief Executive and then Chairman of Lloyds TSB Scotland plc She has also held a range of other non-executive directorships including at the Bank of England and SSE plc
Committee membershipChair of the Remuneration Committee and a member of the Nomination Committee
Date of appointment 1 June 2013
Other current rolesChair of Scottish Water and Business Stream Chair of the Scottish Fiscal Commission Non-Executive Director of the North American Income Trust C Hoare and Co and Senior Independent Director of the North American Income Trust
9
Other current rolesNon-Executive Director and Chairman of the Audit Committee of Centrica plc
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jean Tomlin Non-Executive Director
Skills and experienceJean has extensive experience and breadth of skills in human resources and corporate responsibility Jean was formerly Director of HR Workforce and Accreditation for The London OrganisingCommittee of the Olympic and Paralympic Games where she set the strategic direction to ensure the mobilisation of the combined 200000-strong workforce including paid staff volunteers and contractors which represented the recruitment and mobilisation of the largest peacetime workforce and set the industry standard for volunteering with the highly acclaimed Games She was previously Group HR Director at Marks and Spencer Group Plc HR Director and founder member of Egg plc and Sales amp Operations Director of Prudential Direct
Date of appointment 1 January 2013
Committee membershipAudit Committee Corporate Responsibility and Sustainability Committee and Nomination Committee
David Keens Non-Executive Director
Skills and experienceDavid has extensive retail experience and knowledge of consumer facing businesses together with his core skills in finance David was formerly Group Finance Director of next plc from 1991 to 2015 and their Group Treasurer from 1986 to 1991 Previous management experience includes nine years in the UK and overseas operations of multinational food manufacturer Nabisco and prior to that seven years in the accountancy profession
Date of appointment 29 April 2015
Committee membershipChair of the Audit Committee and a member of the Nomination Committee
Other current rolesIndependent Board member of Capri Holdings Limited Non-Executive Director of Hakluyt and Chief Executive Officer of Chanzo Limited
Other current rolesNon-Executive Director Senior Independent Director and Chair of the Audit Committee of Auto Trader Group plc
Matt BrittinNon-Executive Director
Skills and experienceMatt has extensive experience of running a high profile fast moving innovative digital business Since 2015 he has been responsible for Googlersquos business and operations in Europe the Middle East and Africa and hersquos been in leadership roles at Google since 2007 Prior to that Matt spent much of his career in media and marketing with particular interests in strategy commercial development and sales performance This included commercial and digital leadership roles in UK media
Date of appointment 27 January 2011
Committee membershipNomination Committee and Remuneration Committee
Other current rolesGooglersquos President ndash Europe Middle East and Africa and Director of The Media Trust
Brian Cassin Non-Executive Director
Skills and experienceBrian brings present day experience of running a FTSE40 group and of big data and analytics ndash topics of key importance to Sainsburyrsquos Brian joined Experian plc as Chief Financial Officer in April 2012 a post he held until his appointment as Chief Executive Officer in July 2014 Prior to this Brian spent his career in investment banking at Greenhill amp Co where he was Managing Director and Partner Brian has also held various roles at Baring Brothers International and at the London Stock Exchange
Date of appointment 1 April 2016
Committee membershipAudit Committee and Nomination Committee
Other current rolesChief Executive Officer of Experian plc
10
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jo Harlow Non-Executive Director
Skills and experienceJo brings a wealth of experience in consumer-facing businesses and in the telecoms and technology industry bothin the UK and internationally Jo spent 12 years in a variety of senior management roles with Nokia and Microsoft Prior to this she spent eight years at PampG and 11 years at Reebok in senior sales and marketing positions in both Europe and the US
Date of appointment 11 September 2017
Committee membershipChair of the Corporate Responsibility and Sustainability Committee and member of the Nomination Committee and Remuneration Committee
Life PresidentLord Sainsbury of Preston Candover KG
Other current rolesNon-Executive Director of InterContinental Hotels plc Non-Executive Director of Halmaplc and Member of the Supervisory Board of Ceconomy AG
11
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief Executive
Tim FallowfieldCompany Secretary amp Corporate Services Director
Kevin OrsquoByrne Chief Financial Officer
Jim BrownChief Executive Officer of Sainsburyrsquos Bank
Paul Mills-HicksFood Commercial Director
Angie RisleyGroup HR Director
Phil JordanGroup Chief InformationOfficer
Simon RobertsRetail and Operations Director
Clo MoriartyGroup Chief Digital Officer
12
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief ExecutiveSee Appendix page 9
Kevin OrsquoByrneChief Financial OfficerSee Appendix page 9
Tim FallowfieldCompany Secretary amp Corporate Services Director
Date of appointment September 2004
Skills and experienceTim joined Sainsburyrsquos in 2001 as Company Secretary and joined the Operating Board in September 2004 In addition to his role as Company Secretary Tim is responsible for the Corporate Services Division comprising Legal Services Data Governance Safety Shareholder Services Insurance and Central Security He chairs the Group Safety Committee and the Data Governance Committee Tim joined Sainsburyrsquos from Exelplc the global logistics company now part of DHL where he was Company Secretary and General Counsel He began his career at the international law firm Clifford Chance and is a qualified solicitor Tim is Chairman of the Disability Confident Business Leaders Group which works with Government in shaping the disability employment agenda and in raising awareness of the benefits of employing disabled people
Jim BrownCEO of Sainsburyrsquos Bank
Skills and experienceJim joined Sainsburyrsquos Bank as CEO in June 2019 and is also a member of the Sainsburyrsquos Group Operating Board He has held a number of senior international Financial Services roles - most recently for RBS in the UK as CEO of Williams and Glyn and prior to that CEO of Ulster Bank in Northern Ireland and the Republic of Ireland Before moving to Ireland he was based in Hong Kong and was CEO Retail and Commercial Banking Asia and the Middle East for RBS and ABN AMRO He has also been a member of the RBS Group Management Committee ABN AMRO Executive Group ABN AMRO Global Consumer Leadership Team and the RBSBank of China Joint Steering Committee Earlier in his career he held a number of senior executive roles for Citibank in Asia and Australia and New Zealand Jim has also held various Board positions including at Ulster Bank Saudi Hollandi Bank The Royal Bank of Scotland (China) Co Ltd and RBS (Pakistan) Ltd He is also a past President of the Institute of Banking in Ireland He is currently a Certified Bank Director
Date of appointment August 2019
Paul Mills-HicksFood Commercial Director
Skills and experiencePaul joined the Operating Board in May 2014 as Food Commercial Director having spent over ten years at Sainsburyrsquos He was closely involved in the formation and execution of the lsquoMaking Sainsburyrsquos Great Againrsquo strategy Following this he held a variety of roles in commercial strategy and finance most recently as Business Unit Director for Grocery Prior to Sainsburyrsquos Paul was European Controller at Marks and Spencer Group PLC and a Director at UBS Warburg
Date of appointment May 2014
13
APPENDIX Interim Results 201920 - November 2019
Operating Board
Angie RisleyGroup HR Director
Skills and experienceAngie was appointed Group HR Director and a member of the Operating Board in January 2013 with responsibility for human resources Angie is also a Director of Sainsburyrsquos Bank plc Angie was most recently Non-Executive Director and Chairman of the Remuneration Committee of Serco plc and prior to this was Group HR Director of Lloyds Banking Group and an Executive Director of Whitbread PLC with responsibility for HR and Corporate Social Responsibility Angie is currently Non-Executive Director and Chair of the Remuneration Committee at Smith amp Nephew plc
Date of appointment January 2013
Phil JordanGroup Chief Information Officer
Skills and experiencePhil joined the Board in January 2018 and has brought a fresh globalperspective on technology to the Operating Board in addition to a wealth of experience in digital data and business transformation Prior to joining Sainsburyrsquos Phil had a long and successful track record in telecommunications Most recently he was Global Chief Information Officer at Telefonica overseeing Digital Transformation and Information Technology and prior to that was Chief Information Officer for Vodafone UKIreland Phil has worked as a Non-Executive Advisor on Technology in the Investment amp Retail Banking sector and is currently a Non-Executive Director of TalkTalk Telecom Group PLC and chairs its Cyber-Security Committee
Date of appointment January 2018
Simon RobertsRetail and Operations Director
Skills and experienceSimon joined Sainsburyrsquos and the Operating Board in July 2017 as Central Retail amp Operations Director responsible for Stores Central operation and Logistics In his previous role he was Executive Vice President of Walgreens Boots Alliance and President of Boots with responsibility for commercial and retail operations across the UK and Ireland Prior to Boots Simon was at Marks and Spencer Group PLC where he held operational and customer leadership roles across stores divisions and central operations Simon is also the Non-Executive Chairman at the Institute ofCustomer Service
Date of appointment July 2017
Clodagh MoriartyGroup Chief Digital Officer
Skills and experienceClodagh was appointed Group Chief Digital Officer in June 2018 Clodagh leads the delivery of a consistent and first-rate digital experience for customers across Sainsburyrsquos Argos and Sainsburyrsquos BankClodagh joined Sainsburyrsquos in 2010 from Bain amp Co management consultants where she had gained experience working on a broad range of projects across multiple sectors and countries Following two years as Head of Strategy at Sainsburyrsquosshe moved into Food Commercial as Category Manager for Meal Solutions and then became Head of Online Trading spanning Food General Merchandise and Clothing before being promoted to Director of Online in 2016 In this role Clodagh was instrumental in driving innovation within Groceries Online and launching new initiatives including SmartShop and Chop Chop
Date of appointment June 2018
14
APPENDIX Interim Results 201920 - November 2019
Supplementary financial details
3 Financial calendarQ3 trading statement(15 weeks to 4 January 2020)
Preliminary results(52 weeks to 7 March 2020)
8 January 2020
30 April 2020
1 Weighted average number of shares
The interim dividend datesOrdinary shares
Ex-dividend 14 November 2019Record 15 November 2019Payment 20 December 2019
Sainsburyrsquos Meat Fish amp Poultry Value Own Label1
Gains
Losses
Incremental Switching within Sainsburyrsquos
Dec 17 Oct 19
+2Sales
+4Volume
Bread Investing across Own Label Tiers120+ EPP SKUs launched in H1 200 by end 201920
Repackaged and NPD within Premium
New Owned Brand Replacing Basics
NPD within Core+ Responding in Growth Areas
Repackaged Core bySainsburyrsquos
New
New
Improved
Improved
1 Kantar 12 we 6 October 2019 ndash rolling 12 weeks switching within total Market MFP
21 Interim Results 201920 - November 2019
Be competitive
on price
1
Lower prices on key volume lines
In-Store Volume Returns Examples
Chicken Wings 1kg+12 Volume
pound170was pound210
pound050Only
White Pittas x6+15 Volume
Chestnut Mushrooms 250g+45 Volume
pound080Only
1 Pre wave 3 lockdown (started 24th March to 15th June 19) YoY 2 Last 6 weeks since wave 4 lockdown (started 28th August 19) YoY
-4
0
4
8
12
16
-6 -5 -4 -3 -2 -1 0 1 2 3 4 5 6
Change in volumes ()
Pre1 Post2
22 Interim Results 201920 - November 2019
Be competitive
on price
1
We continue to be less dependent on promotions
230 228
207 209
Sainsburyrsquos Promotional Participation
1819 1920 19201819
Morrisons
Sainsburyrsquos
Tesco
Asda
Spend on Deal1
Q1 Q2
1 Source Nielsen 4 weekly data to 21 September 2019
10
20
30
4040
30
20
10Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep
2018 2019
H1 1920
H1 1920 AVERAGE
34 31
22 21
23 Interim Results 201920 - November 2019
Be competitive
on price
1
Improved grocery value
Base Price Index 2
-1
0
1
2
3
Grocery inflation (Kantar)1
-960bps
-550bps
Commodity VI 2
Aug 17 Jan 18 Jun 18 Nov 18 Apr 19 Oct 19
2004 2007 2010 2013 2016 2019
Morrisons
Sainsburyrsquos
Tesco
Asda
Total Market
Mar Apr May Jun Jul Aug Sep Oct2019
1 Kantar City Reads to Oct 20192 Sainsburyrsquos value index based on Brandview SKU matching data to Oct 2019
24 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
25 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Category tier performance
YoY value share change by tier
12 weeks to September 2019
-03
01
-01
-18
52 weeks to March 2019
Branded
PremiumOwn Brand
Branded
StandardOwn Brand
EconomyOwn Brand
02
-08
-04
00PremiumOwn Brand
StandardOwn Brand
EconomyOwn Brand
Source Nielsen Panel Total FMCG Market Universe Total outlets 52wks data to 9 March 2019 and 12wks data to 21 Sept 2019
26 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Premium private label
Taste the Difference re-launch
bull Over 350 products new repackaged or reformulated
bull Premium ready meals growth now outperforming the market
41
25 2419
Sainsburys Morrisons Tesco Asda
Premium Own Label volume share
Source Nielsen Panel Total FMCG 28 weeks data to 21 September 2019 Premium Own Label share of sales by retailer
27 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Distinctive brands
bull 57 of customers have bought Distinctive Brands since launch
bull On track for pound100m incremental sales
bull 37 new brands in H1 across Fresh and Grocery
bull lsquoTaste of the Futurersquo bays launched in 70 stores- 67 incremental sales
Leon
bull 3 year exclusive partnership
bull 14 products launched
28 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Beauty Rollout
bull Now rolled out to over 60 stores- Sales up over 40
bull Customer numbers up 7
bull Spend per customer up 25
bull Beauty range doubled 1200 additional lines
bull Double digit growth differential against the market
29 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Our values make us different
bull Committed to reduce plastic packaging by 50 by 2025
bull First retailer to remove single use plastic produce and bakery bags from our stores
- Launching reusable bags in fruit and veg aisles
bull Investing in our loose produce offer
bull Removed black plastic trays from ready meals
bull Fresh water stands in cafeacutes for customers to refill bottles
UKrsquos first major retailer to make significant commitment to reduce plastic
30 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Argos category and range focus
bull Availability improvement- Argos master range reduced by c30 over 3 years- Eliminating duplication removing low value items- Better availability of key lines in store
bull Rebalancing into higher margin categories- Gaining share in Furniture1
More distinctive rangemore reason to shop at Sainsburyrsquos
Reduced SKU count -20operational efficiencies
Higher cash gross profit +2 YOY
Volumes +8 operational efficiencies
41 Interim Results 201920 - November 2019
Drive efficiency
to invest in the customer
offer
4
BAU savings to offset cost inflation
Manages inflationary pressures
BAU savingsH1 201920
Procurement GNFR
Retail Technology Efficiencies
Retail HRRetail
management structures
Shrink Reduction
42 Interim Results 201920 - November 2019
Drive efficiency
to invest in the customer
offer
4
Strategic cost transformation 5 year plan
Converge Tackle fixed cost
End to end reviews
Retail Operations Marketing and Commercial Operations
Other central support
Logistics and Supply Chain
Project A
Project C
Project D
Shared Services BPO
Property strategy
Project BGNFR procurement
Capital prioritisation
Technology Digital and Corporate Services
pound250-pound350m
pound150-pound250m
pound400-pound600mExecution underway In planning Opportunities identified
pound5bn addressable cost base
43 Interim Results 201920 - November 2019
Grow connected
services
5
44 Interim Results 201920 - November 2019
Grow connected
services
5
Financial Services Priorities
To be the provider of financial services for loyal Sainsburyrsquos and Argos customers
An agile capital and cost efficient provider of simple mobile-led financial services
Vision
Objective
Priorities Reshape Simplify Strengthen
45 Interim Results 201920 - November 2019
Grow connected
services
5
Current Customer Base
Customer Credit Risk Balance Sheet Earnings
Argos Storecards 22m Prime Near Prime
Credit Cards 09m Prime
Personal Loans 05m Prime
Mortgages 9K Exit
Total Lending
Deposits 03m
Insurances 05m Very Low Risk
Travel Money 266 Sites
ATMs 1890
Financial Services reshaping the portfolio
46 Interim Results 201920 - November 2019
Grow connected
services
5
Increase connectivity and value for Group
Stop mortgage acquisition review back book options
No capital input from the Group from now1
Costincome c503 within 5 years
Double UPBT double digit ROCE within 5 years
Upstream cash within 5 years2
Financial Services key targets
Transform the cost base
Improve returns
Financial services cash generative
Reduce risk profile to Group
Stop putting cash in to Financial Services
2
4
6
3
1
5
Focus on Sainsburyrsquos customer base
1 Subject to regulatory changes requirements2 Subject to regulatory approval3 On a Group contribution basis
47 Interim Results 201920 - November 2019
Grow connected
services
5
Nectar
bull Biggest loyalty programme in the UK
bull Over 18 million collectors
bull Most recognised loyalty brand in the UK
bull Launch of Nectar digital- 21 million app users- Increase in overall Nectar participation- Increased levels of personalisation- 138000 new Nectar customers- 1 app on launch weekend
bull Coalition strengthened with addition of Esso in June 2019
48 Interim Results 201920 - November 2019
Provide a seamless customer
experience
6
49 Interim Results 201920 - November 2019
Provide a seamless customer
experience
6
Digital
bull Groceries Online sales penetration of 8- App accounts for over 20 of orders
bull 21 million digital Nectar app users
bull 14 million Argos Financial Services app downloads
bull Smartshop rollout in over 350 stores
Groceries online
Chop Chop
SmartShop
Universaldiscovery
Seamlessfinancialservices
Singlebasket
50 Interim Results 201920 - November 2019
We will help our customers live well for less
Confident in the core Integrated customer offer
One multi brand multi channel business
Strong cash generation supporting investment dividend and allowing deleverage
Financial flexibility and resilience
Sustainable cost reduction covering cost inflation and funding investment in our competitive offer
QampA
APPENDIX Interim Results 201920 - November 2019
Appendices
APPENDIX Interim Results 201920 - November 2019
Guidance for 201920
1
Spacebull Expect to open 2 new Sainsburyrsquos supermarkets and up to 15 convenience storesbull Expect to open around 25 Argos stores in Sainsburyrsquos (of which 11 are
relocations) resulting in around 305 Argos stores in supermarketsbull Expect to close 2 supermarkets around 25 convenience stores and around 20
Argos stores in FY201920 as part of announced property closure programme of 10-15 supermarkets 30-40 convenience stores and 60-70 Argos stores
Financial Servicesbull Financial services underlying operating profit expected to be cpound45m including a
cpound10m benefit as a result of a change in transfer pricing between Argos and Argos Financial Services
bull Financial Services non-underlying costs are expected to be around pound30mbull No further capital injections into the Bank are expected following pound35m in H1 201920
Depreciation and amortisationbull Expect underlying retail depreciation and amortisation of around pound12bn
including cpound500m right of use asset depreciation
CostsOperating cost inflationbull Cost inflation between 2 and 3Cost savingsbull Continue to deliver cost savings to at least offset the impact of cost inflation
Finance costsbull Net finance costs of around pound405m including pound320m lease interest in
201920 following the introduction of IFRS 16
One-off itemsbull In 201920 cash outflows as a result of items excluded from
underlying results should not exceed pound100mbull Property strategy programme one-off costs expected to be
pound230m-pound270m of which cash costs are pound30-40m
Dividendbull Sainsburyrsquos plans to change the full year dividend policy to 19x cover by
underlying earnings (versus 20x previously) to offset the dilutive (non cash) impact of IFRS 16 on underlying earnings
Capital expenditurebull Retail capital expenditure to be around pound550mbull Retail capital expenditure is expected to be around pound550m-pound600m per
annum over the medium term
Net debtbull Net debt before fair value movements on derivatives to reduce by at
least pound300m
Tax ratebull Underlying tax rate to be between 25 and 26
APPENDIX Interim Results 201920 - November 2019
Retail sales
1 Sales including VAT excluding fuel
LFL sales growth1
(10)
Sales from net new space1
04
Total sales growth1
(06)
Supermarkets2
(07)
Convenience20
Groceries Online
70
Channels
(01)(25)
(12)
2 Supermarket sales include Argos SiS sales FY 1819 16
pound139bn
pound103bnGrocery
pound30bnGeneralMerchandise
pound488mClothing
2
Chart1
201819
194
66
1
Sheet1
APPENDIX Interim Results 201920 - November 2019
Sainsburyrsquos sales area and store numbersAs at 21 September 2019
Sainsburyrsquos store estateAs at 21 September 2019
Sq ftsales area
82446
870
40001 to60000
20001 to40000
10000 to20000
Under10000 Total
Over60000
0122122
0197197
0175175
06767
824607
1431
Argos storesArgos in SainsburyrsquosArgos in HomebaseOtherArgos total store numbers
Habitat1
Collection points
594281
8-
883
16317
As at21 Sept 2019
Disposalsclosures
Newstores
As at9 March 2019
17--8
-1
(7)-
(2)-
(9)
-(36)
588288
6-
88216
282
ConvenienceSupermarketsTotal stores
Number of stores
Sq ftsales area
1929350
2279
40001 to60000
20001 to40000
10000 to20000
Under10000 Total
Over60000
-18441844
-58185818
-85018501
-46604660
19292117323102
ConvenienceSupermarketsTotal stores
Space by store size (lsquo000 sq ft)
Argos and Habitat store numbers
1 5 Habitat stores 11 Habitat stores in Sainsburys
4
APPENDIX Interim Results 201920 - November 2019
ClosureBitterne West
Sainsburyrsquos investment programme201920
Q1
Supermarkets ConvenienceNew storesMilton Keynes Brooklands District CentBromley High StLeeds Wike Ridge LaneSalford Harbour CityCanterbury High St
ReplacementMayfair Stratton St
ClosuresMayfairWarren St
Q1Q1Q1Q2Q2
Q2
Q1Q2
5
APPENDIX Interim Results 201920 - November 2019
Retail margin
Retail sales (inc VAT inc fuel)(exc VAT inc fuel)
Retail underlying EBITDAR1
Retail underlying EBITDAR margin 2
at constant fuel pricesRetail underlying operating profit3
Retail underlying operating margin 4
at constant fuel prices
1656714808
10677272
4373030
1661214856
11147575
4873333
030342
30 bps28 bps10333 bps32 bps
1 Retail underlying operating profit before net rental income of pound6 million and underlying depreciation and amortisation of pound636 million2 Retail underlying EBITDAR divided by underlying retail sales excluding VAT3 Retail underlying earnings before interest tax and Sainsburyrsquos underlying share of post-tax profit from joint ventures4 Retail underlying operating profit divided by underlying retail sales excluding VAT
poundm H1201920
H1201819
Change
6
APPENDIX Interim Results 201920 - November 2019
H1201920
H1201819
Group retail
Return on capital employed 1
Net debt to EBITDAR (times)23
Fixed charge cover (times)2
Underlying tax rate Core retail capex sales5
713126
26515
743326
25715
poundm
1 ROCE Return is defined as a 52 week rolling underlying profit before interest and tax Capital employed is defined as group net assets2 Net debt of pound6778 million includes lease obligations under IFRS 16 and perpetual securities treated as debt divided by Group underlying EBITDAR of pound2171 million calculated for a 52-week period to 21 September 20193 Group underlying EBITDAR divided by rent (both capital and interest) and net finance costs where interest on perpetual securities is treated as an underlying finance costs4 52 weeks to 22nd September 2018 is not available due to the implementation of IFRS 16 Comparatives therefore reflect the 52 weeks to 9th March 20195 Includes retail sales inc vat inc fuel
4
4
7
APPENDIX Interim Results 201920 - November 2019
Plc Board
Kevin OrsquoByrneChief Financial Officer
Mike Coupe Group Chief Executive
Dame Susan Rice Senior Independent Director
Matt BrittinNon-Executive Director
Jo HarlowNon-Executive Director
Brian CassinNon-Executive Director
David KeensNon-Executive Director
Jean Tomlin Non-Executive Director
Martin Scicluna Chairman
8
APPENDIX Interim Results 201920 - November 2019
Plc Board
Mike Coupe Group Chief Executive Officer
Skills and experienceAppointed Group Chief Executive Officer on 9 July 2014 Mike has been a member of the Operating Board since October 2004 Mike has vast retail industry experience in trading strategy marketing digital and online as well as multi-site store experience He joined Sainsburyrsquos from Big Food Group where he was a board director of Big Food Group PLC and Managing Director of Iceland Food Stores He previously worked for both Asda and Tesco PLC where he served in a variety of senior management roles
Date of appointment 1 August 2007Mike has served as an Executive Director since 1 August 2007 and as Chief Executive Officer since 9 July 2014
Committee membershipCorporate Responsibility and Sustainability Committee
Kevin OrsquoByrne Chief Financial Officer
Skills and experienceKevin brings to the Board a wealth of retail and finance experience Kevin was previously Chief Executive Officer of Poundland Group Limited until December 2016 and held executive roles at Kingfisher plc from 2008 to 2015 including Divisional Director UK China and Turkey Chief Executive Officer of BampQ UK amp Ireland and Group Finance Director He was previously Group Finance Director of Dixons Retail plc and European Finance Director of Quaker Oats He was a Non-Executive Director of Land Securities Group PLC from 2008 to September 2017 where he was Chairman of the Audit Committee and Senior Independent Director
Date of appointment 9 January 2017
Other current rolesNon-Executive Director of Greene King plc
Skills and experienceMartin brings a breadth of experience and leadership in both executive and non-executive roles His previous roles include positions as the Chairman of Great Portland Estates plc Senior Independent Director and Chair of the Audit Committee of Worldpay Inc and Non-Executive Director and Chair of the Audit Committee of Lloyds Banking Group plc He was a partner at Deloitte LLP for 26 years serving as Chairman from 1995 to 2007 where his clients included Dixons WH Smith Alliance Unichem and Cadburyrsquos
Other current rolesChairman of RSA Insurance Group plc
Martin Scicluna Chairman
Date of appointment 1 November 2018 Martin joined the Board as Chairman Designate and Non-Executive Director on 1 November 2018 He was appointed as Chairman of the Board on 10 March 2019
Committee membershipChair of the Nomination Committee
Dame Susan Rice Senior Independent Director
Skills and experienceSusan has extensive experience as a Non-Executive Director as well as in retail banking financial services leadership and sustainability Her career in retail bankingis particularly relevant to our ownership ofSainsburyrsquos Bank Previously Susan was a member of the First Ministerrsquos Council of Economic Advisors Managing Director of Lloyds Banking Group Scotland and was previously Chief Executive and then Chairman of Lloyds TSB Scotland plc She has also held a range of other non-executive directorships including at the Bank of England and SSE plc
Committee membershipChair of the Remuneration Committee and a member of the Nomination Committee
Date of appointment 1 June 2013
Other current rolesChair of Scottish Water and Business Stream Chair of the Scottish Fiscal Commission Non-Executive Director of the North American Income Trust C Hoare and Co and Senior Independent Director of the North American Income Trust
9
Other current rolesNon-Executive Director and Chairman of the Audit Committee of Centrica plc
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jean Tomlin Non-Executive Director
Skills and experienceJean has extensive experience and breadth of skills in human resources and corporate responsibility Jean was formerly Director of HR Workforce and Accreditation for The London OrganisingCommittee of the Olympic and Paralympic Games where she set the strategic direction to ensure the mobilisation of the combined 200000-strong workforce including paid staff volunteers and contractors which represented the recruitment and mobilisation of the largest peacetime workforce and set the industry standard for volunteering with the highly acclaimed Games She was previously Group HR Director at Marks and Spencer Group Plc HR Director and founder member of Egg plc and Sales amp Operations Director of Prudential Direct
Date of appointment 1 January 2013
Committee membershipAudit Committee Corporate Responsibility and Sustainability Committee and Nomination Committee
David Keens Non-Executive Director
Skills and experienceDavid has extensive retail experience and knowledge of consumer facing businesses together with his core skills in finance David was formerly Group Finance Director of next plc from 1991 to 2015 and their Group Treasurer from 1986 to 1991 Previous management experience includes nine years in the UK and overseas operations of multinational food manufacturer Nabisco and prior to that seven years in the accountancy profession
Date of appointment 29 April 2015
Committee membershipChair of the Audit Committee and a member of the Nomination Committee
Other current rolesIndependent Board member of Capri Holdings Limited Non-Executive Director of Hakluyt and Chief Executive Officer of Chanzo Limited
Other current rolesNon-Executive Director Senior Independent Director and Chair of the Audit Committee of Auto Trader Group plc
Matt BrittinNon-Executive Director
Skills and experienceMatt has extensive experience of running a high profile fast moving innovative digital business Since 2015 he has been responsible for Googlersquos business and operations in Europe the Middle East and Africa and hersquos been in leadership roles at Google since 2007 Prior to that Matt spent much of his career in media and marketing with particular interests in strategy commercial development and sales performance This included commercial and digital leadership roles in UK media
Date of appointment 27 January 2011
Committee membershipNomination Committee and Remuneration Committee
Other current rolesGooglersquos President ndash Europe Middle East and Africa and Director of The Media Trust
Brian Cassin Non-Executive Director
Skills and experienceBrian brings present day experience of running a FTSE40 group and of big data and analytics ndash topics of key importance to Sainsburyrsquos Brian joined Experian plc as Chief Financial Officer in April 2012 a post he held until his appointment as Chief Executive Officer in July 2014 Prior to this Brian spent his career in investment banking at Greenhill amp Co where he was Managing Director and Partner Brian has also held various roles at Baring Brothers International and at the London Stock Exchange
Date of appointment 1 April 2016
Committee membershipAudit Committee and Nomination Committee
Other current rolesChief Executive Officer of Experian plc
10
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jo Harlow Non-Executive Director
Skills and experienceJo brings a wealth of experience in consumer-facing businesses and in the telecoms and technology industry bothin the UK and internationally Jo spent 12 years in a variety of senior management roles with Nokia and Microsoft Prior to this she spent eight years at PampG and 11 years at Reebok in senior sales and marketing positions in both Europe and the US
Date of appointment 11 September 2017
Committee membershipChair of the Corporate Responsibility and Sustainability Committee and member of the Nomination Committee and Remuneration Committee
Life PresidentLord Sainsbury of Preston Candover KG
Other current rolesNon-Executive Director of InterContinental Hotels plc Non-Executive Director of Halmaplc and Member of the Supervisory Board of Ceconomy AG
11
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief Executive
Tim FallowfieldCompany Secretary amp Corporate Services Director
Kevin OrsquoByrne Chief Financial Officer
Jim BrownChief Executive Officer of Sainsburyrsquos Bank
Paul Mills-HicksFood Commercial Director
Angie RisleyGroup HR Director
Phil JordanGroup Chief InformationOfficer
Simon RobertsRetail and Operations Director
Clo MoriartyGroup Chief Digital Officer
12
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief ExecutiveSee Appendix page 9
Kevin OrsquoByrneChief Financial OfficerSee Appendix page 9
Tim FallowfieldCompany Secretary amp Corporate Services Director
Date of appointment September 2004
Skills and experienceTim joined Sainsburyrsquos in 2001 as Company Secretary and joined the Operating Board in September 2004 In addition to his role as Company Secretary Tim is responsible for the Corporate Services Division comprising Legal Services Data Governance Safety Shareholder Services Insurance and Central Security He chairs the Group Safety Committee and the Data Governance Committee Tim joined Sainsburyrsquos from Exelplc the global logistics company now part of DHL where he was Company Secretary and General Counsel He began his career at the international law firm Clifford Chance and is a qualified solicitor Tim is Chairman of the Disability Confident Business Leaders Group which works with Government in shaping the disability employment agenda and in raising awareness of the benefits of employing disabled people
Jim BrownCEO of Sainsburyrsquos Bank
Skills and experienceJim joined Sainsburyrsquos Bank as CEO in June 2019 and is also a member of the Sainsburyrsquos Group Operating Board He has held a number of senior international Financial Services roles - most recently for RBS in the UK as CEO of Williams and Glyn and prior to that CEO of Ulster Bank in Northern Ireland and the Republic of Ireland Before moving to Ireland he was based in Hong Kong and was CEO Retail and Commercial Banking Asia and the Middle East for RBS and ABN AMRO He has also been a member of the RBS Group Management Committee ABN AMRO Executive Group ABN AMRO Global Consumer Leadership Team and the RBSBank of China Joint Steering Committee Earlier in his career he held a number of senior executive roles for Citibank in Asia and Australia and New Zealand Jim has also held various Board positions including at Ulster Bank Saudi Hollandi Bank The Royal Bank of Scotland (China) Co Ltd and RBS (Pakistan) Ltd He is also a past President of the Institute of Banking in Ireland He is currently a Certified Bank Director
Date of appointment August 2019
Paul Mills-HicksFood Commercial Director
Skills and experiencePaul joined the Operating Board in May 2014 as Food Commercial Director having spent over ten years at Sainsburyrsquos He was closely involved in the formation and execution of the lsquoMaking Sainsburyrsquos Great Againrsquo strategy Following this he held a variety of roles in commercial strategy and finance most recently as Business Unit Director for Grocery Prior to Sainsburyrsquos Paul was European Controller at Marks and Spencer Group PLC and a Director at UBS Warburg
Date of appointment May 2014
13
APPENDIX Interim Results 201920 - November 2019
Operating Board
Angie RisleyGroup HR Director
Skills and experienceAngie was appointed Group HR Director and a member of the Operating Board in January 2013 with responsibility for human resources Angie is also a Director of Sainsburyrsquos Bank plc Angie was most recently Non-Executive Director and Chairman of the Remuneration Committee of Serco plc and prior to this was Group HR Director of Lloyds Banking Group and an Executive Director of Whitbread PLC with responsibility for HR and Corporate Social Responsibility Angie is currently Non-Executive Director and Chair of the Remuneration Committee at Smith amp Nephew plc
Date of appointment January 2013
Phil JordanGroup Chief Information Officer
Skills and experiencePhil joined the Board in January 2018 and has brought a fresh globalperspective on technology to the Operating Board in addition to a wealth of experience in digital data and business transformation Prior to joining Sainsburyrsquos Phil had a long and successful track record in telecommunications Most recently he was Global Chief Information Officer at Telefonica overseeing Digital Transformation and Information Technology and prior to that was Chief Information Officer for Vodafone UKIreland Phil has worked as a Non-Executive Advisor on Technology in the Investment amp Retail Banking sector and is currently a Non-Executive Director of TalkTalk Telecom Group PLC and chairs its Cyber-Security Committee
Date of appointment January 2018
Simon RobertsRetail and Operations Director
Skills and experienceSimon joined Sainsburyrsquos and the Operating Board in July 2017 as Central Retail amp Operations Director responsible for Stores Central operation and Logistics In his previous role he was Executive Vice President of Walgreens Boots Alliance and President of Boots with responsibility for commercial and retail operations across the UK and Ireland Prior to Boots Simon was at Marks and Spencer Group PLC where he held operational and customer leadership roles across stores divisions and central operations Simon is also the Non-Executive Chairman at the Institute ofCustomer Service
Date of appointment July 2017
Clodagh MoriartyGroup Chief Digital Officer
Skills and experienceClodagh was appointed Group Chief Digital Officer in June 2018 Clodagh leads the delivery of a consistent and first-rate digital experience for customers across Sainsburyrsquos Argos and Sainsburyrsquos BankClodagh joined Sainsburyrsquos in 2010 from Bain amp Co management consultants where she had gained experience working on a broad range of projects across multiple sectors and countries Following two years as Head of Strategy at Sainsburyrsquosshe moved into Food Commercial as Category Manager for Meal Solutions and then became Head of Online Trading spanning Food General Merchandise and Clothing before being promoted to Director of Online in 2016 In this role Clodagh was instrumental in driving innovation within Groceries Online and launching new initiatives including SmartShop and Chop Chop
Date of appointment June 2018
14
APPENDIX Interim Results 201920 - November 2019
Supplementary financial details
3 Financial calendarQ3 trading statement(15 weeks to 4 January 2020)
Preliminary results(52 weeks to 7 March 2020)
8 January 2020
30 April 2020
1 Weighted average number of shares
The interim dividend datesOrdinary shares
Ex-dividend 14 November 2019Record 15 November 2019Payment 20 December 2019
Sainsburyrsquos Meat Fish amp Poultry Value Own Label1
Gains
Losses
Incremental Switching within Sainsburyrsquos
Dec 17 Oct 19
+2Sales
+4Volume
Bread Investing across Own Label Tiers120+ EPP SKUs launched in H1 200 by end 201920
Repackaged and NPD within Premium
New Owned Brand Replacing Basics
NPD within Core+ Responding in Growth Areas
Repackaged Core bySainsburyrsquos
New
New
Improved
Improved
1 Kantar 12 we 6 October 2019 ndash rolling 12 weeks switching within total Market MFP
21 Interim Results 201920 - November 2019
Be competitive
on price
1
Lower prices on key volume lines
In-Store Volume Returns Examples
Chicken Wings 1kg+12 Volume
pound170was pound210
pound050Only
White Pittas x6+15 Volume
Chestnut Mushrooms 250g+45 Volume
pound080Only
1 Pre wave 3 lockdown (started 24th March to 15th June 19) YoY 2 Last 6 weeks since wave 4 lockdown (started 28th August 19) YoY
-4
0
4
8
12
16
-6 -5 -4 -3 -2 -1 0 1 2 3 4 5 6
Change in volumes ()
Pre1 Post2
22 Interim Results 201920 - November 2019
Be competitive
on price
1
We continue to be less dependent on promotions
230 228
207 209
Sainsburyrsquos Promotional Participation
1819 1920 19201819
Morrisons
Sainsburyrsquos
Tesco
Asda
Spend on Deal1
Q1 Q2
1 Source Nielsen 4 weekly data to 21 September 2019
10
20
30
4040
30
20
10Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep
2018 2019
H1 1920
H1 1920 AVERAGE
34 31
22 21
23 Interim Results 201920 - November 2019
Be competitive
on price
1
Improved grocery value
Base Price Index 2
-1
0
1
2
3
Grocery inflation (Kantar)1
-960bps
-550bps
Commodity VI 2
Aug 17 Jan 18 Jun 18 Nov 18 Apr 19 Oct 19
2004 2007 2010 2013 2016 2019
Morrisons
Sainsburyrsquos
Tesco
Asda
Total Market
Mar Apr May Jun Jul Aug Sep Oct2019
1 Kantar City Reads to Oct 20192 Sainsburyrsquos value index based on Brandview SKU matching data to Oct 2019
24 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
25 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Category tier performance
YoY value share change by tier
12 weeks to September 2019
-03
01
-01
-18
52 weeks to March 2019
Branded
PremiumOwn Brand
Branded
StandardOwn Brand
EconomyOwn Brand
02
-08
-04
00PremiumOwn Brand
StandardOwn Brand
EconomyOwn Brand
Source Nielsen Panel Total FMCG Market Universe Total outlets 52wks data to 9 March 2019 and 12wks data to 21 Sept 2019
26 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Premium private label
Taste the Difference re-launch
bull Over 350 products new repackaged or reformulated
bull Premium ready meals growth now outperforming the market
41
25 2419
Sainsburys Morrisons Tesco Asda
Premium Own Label volume share
Source Nielsen Panel Total FMCG 28 weeks data to 21 September 2019 Premium Own Label share of sales by retailer
27 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Distinctive brands
bull 57 of customers have bought Distinctive Brands since launch
bull On track for pound100m incremental sales
bull 37 new brands in H1 across Fresh and Grocery
bull lsquoTaste of the Futurersquo bays launched in 70 stores- 67 incremental sales
Leon
bull 3 year exclusive partnership
bull 14 products launched
28 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Beauty Rollout
bull Now rolled out to over 60 stores- Sales up over 40
bull Customer numbers up 7
bull Spend per customer up 25
bull Beauty range doubled 1200 additional lines
bull Double digit growth differential against the market
29 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Our values make us different
bull Committed to reduce plastic packaging by 50 by 2025
bull First retailer to remove single use plastic produce and bakery bags from our stores
- Launching reusable bags in fruit and veg aisles
bull Investing in our loose produce offer
bull Removed black plastic trays from ready meals
bull Fresh water stands in cafeacutes for customers to refill bottles
UKrsquos first major retailer to make significant commitment to reduce plastic
30 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Argos category and range focus
bull Availability improvement- Argos master range reduced by c30 over 3 years- Eliminating duplication removing low value items- Better availability of key lines in store
bull Rebalancing into higher margin categories- Gaining share in Furniture1
More distinctive rangemore reason to shop at Sainsburyrsquos
Reduced SKU count -20operational efficiencies
Higher cash gross profit +2 YOY
Volumes +8 operational efficiencies
41 Interim Results 201920 - November 2019
Drive efficiency
to invest in the customer
offer
4
BAU savings to offset cost inflation
Manages inflationary pressures
BAU savingsH1 201920
Procurement GNFR
Retail Technology Efficiencies
Retail HRRetail
management structures
Shrink Reduction
42 Interim Results 201920 - November 2019
Drive efficiency
to invest in the customer
offer
4
Strategic cost transformation 5 year plan
Converge Tackle fixed cost
End to end reviews
Retail Operations Marketing and Commercial Operations
Other central support
Logistics and Supply Chain
Project A
Project C
Project D
Shared Services BPO
Property strategy
Project BGNFR procurement
Capital prioritisation
Technology Digital and Corporate Services
pound250-pound350m
pound150-pound250m
pound400-pound600mExecution underway In planning Opportunities identified
pound5bn addressable cost base
43 Interim Results 201920 - November 2019
Grow connected
services
5
44 Interim Results 201920 - November 2019
Grow connected
services
5
Financial Services Priorities
To be the provider of financial services for loyal Sainsburyrsquos and Argos customers
An agile capital and cost efficient provider of simple mobile-led financial services
Vision
Objective
Priorities Reshape Simplify Strengthen
45 Interim Results 201920 - November 2019
Grow connected
services
5
Current Customer Base
Customer Credit Risk Balance Sheet Earnings
Argos Storecards 22m Prime Near Prime
Credit Cards 09m Prime
Personal Loans 05m Prime
Mortgages 9K Exit
Total Lending
Deposits 03m
Insurances 05m Very Low Risk
Travel Money 266 Sites
ATMs 1890
Financial Services reshaping the portfolio
46 Interim Results 201920 - November 2019
Grow connected
services
5
Increase connectivity and value for Group
Stop mortgage acquisition review back book options
No capital input from the Group from now1
Costincome c503 within 5 years
Double UPBT double digit ROCE within 5 years
Upstream cash within 5 years2
Financial Services key targets
Transform the cost base
Improve returns
Financial services cash generative
Reduce risk profile to Group
Stop putting cash in to Financial Services
2
4
6
3
1
5
Focus on Sainsburyrsquos customer base
1 Subject to regulatory changes requirements2 Subject to regulatory approval3 On a Group contribution basis
47 Interim Results 201920 - November 2019
Grow connected
services
5
Nectar
bull Biggest loyalty programme in the UK
bull Over 18 million collectors
bull Most recognised loyalty brand in the UK
bull Launch of Nectar digital- 21 million app users- Increase in overall Nectar participation- Increased levels of personalisation- 138000 new Nectar customers- 1 app on launch weekend
bull Coalition strengthened with addition of Esso in June 2019
48 Interim Results 201920 - November 2019
Provide a seamless customer
experience
6
49 Interim Results 201920 - November 2019
Provide a seamless customer
experience
6
Digital
bull Groceries Online sales penetration of 8- App accounts for over 20 of orders
bull 21 million digital Nectar app users
bull 14 million Argos Financial Services app downloads
bull Smartshop rollout in over 350 stores
Groceries online
Chop Chop
SmartShop
Universaldiscovery
Seamlessfinancialservices
Singlebasket
50 Interim Results 201920 - November 2019
We will help our customers live well for less
Confident in the core Integrated customer offer
One multi brand multi channel business
Strong cash generation supporting investment dividend and allowing deleverage
Financial flexibility and resilience
Sustainable cost reduction covering cost inflation and funding investment in our competitive offer
QampA
APPENDIX Interim Results 201920 - November 2019
Appendices
APPENDIX Interim Results 201920 - November 2019
Guidance for 201920
1
Spacebull Expect to open 2 new Sainsburyrsquos supermarkets and up to 15 convenience storesbull Expect to open around 25 Argos stores in Sainsburyrsquos (of which 11 are
relocations) resulting in around 305 Argos stores in supermarketsbull Expect to close 2 supermarkets around 25 convenience stores and around 20
Argos stores in FY201920 as part of announced property closure programme of 10-15 supermarkets 30-40 convenience stores and 60-70 Argos stores
Financial Servicesbull Financial services underlying operating profit expected to be cpound45m including a
cpound10m benefit as a result of a change in transfer pricing between Argos and Argos Financial Services
bull Financial Services non-underlying costs are expected to be around pound30mbull No further capital injections into the Bank are expected following pound35m in H1 201920
Depreciation and amortisationbull Expect underlying retail depreciation and amortisation of around pound12bn
including cpound500m right of use asset depreciation
CostsOperating cost inflationbull Cost inflation between 2 and 3Cost savingsbull Continue to deliver cost savings to at least offset the impact of cost inflation
Finance costsbull Net finance costs of around pound405m including pound320m lease interest in
201920 following the introduction of IFRS 16
One-off itemsbull In 201920 cash outflows as a result of items excluded from
underlying results should not exceed pound100mbull Property strategy programme one-off costs expected to be
pound230m-pound270m of which cash costs are pound30-40m
Dividendbull Sainsburyrsquos plans to change the full year dividend policy to 19x cover by
underlying earnings (versus 20x previously) to offset the dilutive (non cash) impact of IFRS 16 on underlying earnings
Capital expenditurebull Retail capital expenditure to be around pound550mbull Retail capital expenditure is expected to be around pound550m-pound600m per
annum over the medium term
Net debtbull Net debt before fair value movements on derivatives to reduce by at
least pound300m
Tax ratebull Underlying tax rate to be between 25 and 26
APPENDIX Interim Results 201920 - November 2019
Retail sales
1 Sales including VAT excluding fuel
LFL sales growth1
(10)
Sales from net new space1
04
Total sales growth1
(06)
Supermarkets2
(07)
Convenience20
Groceries Online
70
Channels
(01)(25)
(12)
2 Supermarket sales include Argos SiS sales FY 1819 16
pound139bn
pound103bnGrocery
pound30bnGeneralMerchandise
pound488mClothing
2
Chart1
201819
194
66
1
Sheet1
APPENDIX Interim Results 201920 - November 2019
Sainsburyrsquos sales area and store numbersAs at 21 September 2019
Sainsburyrsquos store estateAs at 21 September 2019
Sq ftsales area
82446
870
40001 to60000
20001 to40000
10000 to20000
Under10000 Total
Over60000
0122122
0197197
0175175
06767
824607
1431
Argos storesArgos in SainsburyrsquosArgos in HomebaseOtherArgos total store numbers
Habitat1
Collection points
594281
8-
883
16317
As at21 Sept 2019
Disposalsclosures
Newstores
As at9 March 2019
17--8
-1
(7)-
(2)-
(9)
-(36)
588288
6-
88216
282
ConvenienceSupermarketsTotal stores
Number of stores
Sq ftsales area
1929350
2279
40001 to60000
20001 to40000
10000 to20000
Under10000 Total
Over60000
-18441844
-58185818
-85018501
-46604660
19292117323102
ConvenienceSupermarketsTotal stores
Space by store size (lsquo000 sq ft)
Argos and Habitat store numbers
1 5 Habitat stores 11 Habitat stores in Sainsburys
4
APPENDIX Interim Results 201920 - November 2019
ClosureBitterne West
Sainsburyrsquos investment programme201920
Q1
Supermarkets ConvenienceNew storesMilton Keynes Brooklands District CentBromley High StLeeds Wike Ridge LaneSalford Harbour CityCanterbury High St
ReplacementMayfair Stratton St
ClosuresMayfairWarren St
Q1Q1Q1Q2Q2
Q2
Q1Q2
5
APPENDIX Interim Results 201920 - November 2019
Retail margin
Retail sales (inc VAT inc fuel)(exc VAT inc fuel)
Retail underlying EBITDAR1
Retail underlying EBITDAR margin 2
at constant fuel pricesRetail underlying operating profit3
Retail underlying operating margin 4
at constant fuel prices
1656714808
10677272
4373030
1661214856
11147575
4873333
030342
30 bps28 bps10333 bps32 bps
1 Retail underlying operating profit before net rental income of pound6 million and underlying depreciation and amortisation of pound636 million2 Retail underlying EBITDAR divided by underlying retail sales excluding VAT3 Retail underlying earnings before interest tax and Sainsburyrsquos underlying share of post-tax profit from joint ventures4 Retail underlying operating profit divided by underlying retail sales excluding VAT
poundm H1201920
H1201819
Change
6
APPENDIX Interim Results 201920 - November 2019
H1201920
H1201819
Group retail
Return on capital employed 1
Net debt to EBITDAR (times)23
Fixed charge cover (times)2
Underlying tax rate Core retail capex sales5
713126
26515
743326
25715
poundm
1 ROCE Return is defined as a 52 week rolling underlying profit before interest and tax Capital employed is defined as group net assets2 Net debt of pound6778 million includes lease obligations under IFRS 16 and perpetual securities treated as debt divided by Group underlying EBITDAR of pound2171 million calculated for a 52-week period to 21 September 20193 Group underlying EBITDAR divided by rent (both capital and interest) and net finance costs where interest on perpetual securities is treated as an underlying finance costs4 52 weeks to 22nd September 2018 is not available due to the implementation of IFRS 16 Comparatives therefore reflect the 52 weeks to 9th March 20195 Includes retail sales inc vat inc fuel
4
4
7
APPENDIX Interim Results 201920 - November 2019
Plc Board
Kevin OrsquoByrneChief Financial Officer
Mike Coupe Group Chief Executive
Dame Susan Rice Senior Independent Director
Matt BrittinNon-Executive Director
Jo HarlowNon-Executive Director
Brian CassinNon-Executive Director
David KeensNon-Executive Director
Jean Tomlin Non-Executive Director
Martin Scicluna Chairman
8
APPENDIX Interim Results 201920 - November 2019
Plc Board
Mike Coupe Group Chief Executive Officer
Skills and experienceAppointed Group Chief Executive Officer on 9 July 2014 Mike has been a member of the Operating Board since October 2004 Mike has vast retail industry experience in trading strategy marketing digital and online as well as multi-site store experience He joined Sainsburyrsquos from Big Food Group where he was a board director of Big Food Group PLC and Managing Director of Iceland Food Stores He previously worked for both Asda and Tesco PLC where he served in a variety of senior management roles
Date of appointment 1 August 2007Mike has served as an Executive Director since 1 August 2007 and as Chief Executive Officer since 9 July 2014
Committee membershipCorporate Responsibility and Sustainability Committee
Kevin OrsquoByrne Chief Financial Officer
Skills and experienceKevin brings to the Board a wealth of retail and finance experience Kevin was previously Chief Executive Officer of Poundland Group Limited until December 2016 and held executive roles at Kingfisher plc from 2008 to 2015 including Divisional Director UK China and Turkey Chief Executive Officer of BampQ UK amp Ireland and Group Finance Director He was previously Group Finance Director of Dixons Retail plc and European Finance Director of Quaker Oats He was a Non-Executive Director of Land Securities Group PLC from 2008 to September 2017 where he was Chairman of the Audit Committee and Senior Independent Director
Date of appointment 9 January 2017
Other current rolesNon-Executive Director of Greene King plc
Skills and experienceMartin brings a breadth of experience and leadership in both executive and non-executive roles His previous roles include positions as the Chairman of Great Portland Estates plc Senior Independent Director and Chair of the Audit Committee of Worldpay Inc and Non-Executive Director and Chair of the Audit Committee of Lloyds Banking Group plc He was a partner at Deloitte LLP for 26 years serving as Chairman from 1995 to 2007 where his clients included Dixons WH Smith Alliance Unichem and Cadburyrsquos
Other current rolesChairman of RSA Insurance Group plc
Martin Scicluna Chairman
Date of appointment 1 November 2018 Martin joined the Board as Chairman Designate and Non-Executive Director on 1 November 2018 He was appointed as Chairman of the Board on 10 March 2019
Committee membershipChair of the Nomination Committee
Dame Susan Rice Senior Independent Director
Skills and experienceSusan has extensive experience as a Non-Executive Director as well as in retail banking financial services leadership and sustainability Her career in retail bankingis particularly relevant to our ownership ofSainsburyrsquos Bank Previously Susan was a member of the First Ministerrsquos Council of Economic Advisors Managing Director of Lloyds Banking Group Scotland and was previously Chief Executive and then Chairman of Lloyds TSB Scotland plc She has also held a range of other non-executive directorships including at the Bank of England and SSE plc
Committee membershipChair of the Remuneration Committee and a member of the Nomination Committee
Date of appointment 1 June 2013
Other current rolesChair of Scottish Water and Business Stream Chair of the Scottish Fiscal Commission Non-Executive Director of the North American Income Trust C Hoare and Co and Senior Independent Director of the North American Income Trust
9
Other current rolesNon-Executive Director and Chairman of the Audit Committee of Centrica plc
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jean Tomlin Non-Executive Director
Skills and experienceJean has extensive experience and breadth of skills in human resources and corporate responsibility Jean was formerly Director of HR Workforce and Accreditation for The London OrganisingCommittee of the Olympic and Paralympic Games where she set the strategic direction to ensure the mobilisation of the combined 200000-strong workforce including paid staff volunteers and contractors which represented the recruitment and mobilisation of the largest peacetime workforce and set the industry standard for volunteering with the highly acclaimed Games She was previously Group HR Director at Marks and Spencer Group Plc HR Director and founder member of Egg plc and Sales amp Operations Director of Prudential Direct
Date of appointment 1 January 2013
Committee membershipAudit Committee Corporate Responsibility and Sustainability Committee and Nomination Committee
David Keens Non-Executive Director
Skills and experienceDavid has extensive retail experience and knowledge of consumer facing businesses together with his core skills in finance David was formerly Group Finance Director of next plc from 1991 to 2015 and their Group Treasurer from 1986 to 1991 Previous management experience includes nine years in the UK and overseas operations of multinational food manufacturer Nabisco and prior to that seven years in the accountancy profession
Date of appointment 29 April 2015
Committee membershipChair of the Audit Committee and a member of the Nomination Committee
Other current rolesIndependent Board member of Capri Holdings Limited Non-Executive Director of Hakluyt and Chief Executive Officer of Chanzo Limited
Other current rolesNon-Executive Director Senior Independent Director and Chair of the Audit Committee of Auto Trader Group plc
Matt BrittinNon-Executive Director
Skills and experienceMatt has extensive experience of running a high profile fast moving innovative digital business Since 2015 he has been responsible for Googlersquos business and operations in Europe the Middle East and Africa and hersquos been in leadership roles at Google since 2007 Prior to that Matt spent much of his career in media and marketing with particular interests in strategy commercial development and sales performance This included commercial and digital leadership roles in UK media
Date of appointment 27 January 2011
Committee membershipNomination Committee and Remuneration Committee
Other current rolesGooglersquos President ndash Europe Middle East and Africa and Director of The Media Trust
Brian Cassin Non-Executive Director
Skills and experienceBrian brings present day experience of running a FTSE40 group and of big data and analytics ndash topics of key importance to Sainsburyrsquos Brian joined Experian plc as Chief Financial Officer in April 2012 a post he held until his appointment as Chief Executive Officer in July 2014 Prior to this Brian spent his career in investment banking at Greenhill amp Co where he was Managing Director and Partner Brian has also held various roles at Baring Brothers International and at the London Stock Exchange
Date of appointment 1 April 2016
Committee membershipAudit Committee and Nomination Committee
Other current rolesChief Executive Officer of Experian plc
10
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jo Harlow Non-Executive Director
Skills and experienceJo brings a wealth of experience in consumer-facing businesses and in the telecoms and technology industry bothin the UK and internationally Jo spent 12 years in a variety of senior management roles with Nokia and Microsoft Prior to this she spent eight years at PampG and 11 years at Reebok in senior sales and marketing positions in both Europe and the US
Date of appointment 11 September 2017
Committee membershipChair of the Corporate Responsibility and Sustainability Committee and member of the Nomination Committee and Remuneration Committee
Life PresidentLord Sainsbury of Preston Candover KG
Other current rolesNon-Executive Director of InterContinental Hotels plc Non-Executive Director of Halmaplc and Member of the Supervisory Board of Ceconomy AG
11
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief Executive
Tim FallowfieldCompany Secretary amp Corporate Services Director
Kevin OrsquoByrne Chief Financial Officer
Jim BrownChief Executive Officer of Sainsburyrsquos Bank
Paul Mills-HicksFood Commercial Director
Angie RisleyGroup HR Director
Phil JordanGroup Chief InformationOfficer
Simon RobertsRetail and Operations Director
Clo MoriartyGroup Chief Digital Officer
12
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief ExecutiveSee Appendix page 9
Kevin OrsquoByrneChief Financial OfficerSee Appendix page 9
Tim FallowfieldCompany Secretary amp Corporate Services Director
Date of appointment September 2004
Skills and experienceTim joined Sainsburyrsquos in 2001 as Company Secretary and joined the Operating Board in September 2004 In addition to his role as Company Secretary Tim is responsible for the Corporate Services Division comprising Legal Services Data Governance Safety Shareholder Services Insurance and Central Security He chairs the Group Safety Committee and the Data Governance Committee Tim joined Sainsburyrsquos from Exelplc the global logistics company now part of DHL where he was Company Secretary and General Counsel He began his career at the international law firm Clifford Chance and is a qualified solicitor Tim is Chairman of the Disability Confident Business Leaders Group which works with Government in shaping the disability employment agenda and in raising awareness of the benefits of employing disabled people
Jim BrownCEO of Sainsburyrsquos Bank
Skills and experienceJim joined Sainsburyrsquos Bank as CEO in June 2019 and is also a member of the Sainsburyrsquos Group Operating Board He has held a number of senior international Financial Services roles - most recently for RBS in the UK as CEO of Williams and Glyn and prior to that CEO of Ulster Bank in Northern Ireland and the Republic of Ireland Before moving to Ireland he was based in Hong Kong and was CEO Retail and Commercial Banking Asia and the Middle East for RBS and ABN AMRO He has also been a member of the RBS Group Management Committee ABN AMRO Executive Group ABN AMRO Global Consumer Leadership Team and the RBSBank of China Joint Steering Committee Earlier in his career he held a number of senior executive roles for Citibank in Asia and Australia and New Zealand Jim has also held various Board positions including at Ulster Bank Saudi Hollandi Bank The Royal Bank of Scotland (China) Co Ltd and RBS (Pakistan) Ltd He is also a past President of the Institute of Banking in Ireland He is currently a Certified Bank Director
Date of appointment August 2019
Paul Mills-HicksFood Commercial Director
Skills and experiencePaul joined the Operating Board in May 2014 as Food Commercial Director having spent over ten years at Sainsburyrsquos He was closely involved in the formation and execution of the lsquoMaking Sainsburyrsquos Great Againrsquo strategy Following this he held a variety of roles in commercial strategy and finance most recently as Business Unit Director for Grocery Prior to Sainsburyrsquos Paul was European Controller at Marks and Spencer Group PLC and a Director at UBS Warburg
Date of appointment May 2014
13
APPENDIX Interim Results 201920 - November 2019
Operating Board
Angie RisleyGroup HR Director
Skills and experienceAngie was appointed Group HR Director and a member of the Operating Board in January 2013 with responsibility for human resources Angie is also a Director of Sainsburyrsquos Bank plc Angie was most recently Non-Executive Director and Chairman of the Remuneration Committee of Serco plc and prior to this was Group HR Director of Lloyds Banking Group and an Executive Director of Whitbread PLC with responsibility for HR and Corporate Social Responsibility Angie is currently Non-Executive Director and Chair of the Remuneration Committee at Smith amp Nephew plc
Date of appointment January 2013
Phil JordanGroup Chief Information Officer
Skills and experiencePhil joined the Board in January 2018 and has brought a fresh globalperspective on technology to the Operating Board in addition to a wealth of experience in digital data and business transformation Prior to joining Sainsburyrsquos Phil had a long and successful track record in telecommunications Most recently he was Global Chief Information Officer at Telefonica overseeing Digital Transformation and Information Technology and prior to that was Chief Information Officer for Vodafone UKIreland Phil has worked as a Non-Executive Advisor on Technology in the Investment amp Retail Banking sector and is currently a Non-Executive Director of TalkTalk Telecom Group PLC and chairs its Cyber-Security Committee
Date of appointment January 2018
Simon RobertsRetail and Operations Director
Skills and experienceSimon joined Sainsburyrsquos and the Operating Board in July 2017 as Central Retail amp Operations Director responsible for Stores Central operation and Logistics In his previous role he was Executive Vice President of Walgreens Boots Alliance and President of Boots with responsibility for commercial and retail operations across the UK and Ireland Prior to Boots Simon was at Marks and Spencer Group PLC where he held operational and customer leadership roles across stores divisions and central operations Simon is also the Non-Executive Chairman at the Institute ofCustomer Service
Date of appointment July 2017
Clodagh MoriartyGroup Chief Digital Officer
Skills and experienceClodagh was appointed Group Chief Digital Officer in June 2018 Clodagh leads the delivery of a consistent and first-rate digital experience for customers across Sainsburyrsquos Argos and Sainsburyrsquos BankClodagh joined Sainsburyrsquos in 2010 from Bain amp Co management consultants where she had gained experience working on a broad range of projects across multiple sectors and countries Following two years as Head of Strategy at Sainsburyrsquosshe moved into Food Commercial as Category Manager for Meal Solutions and then became Head of Online Trading spanning Food General Merchandise and Clothing before being promoted to Director of Online in 2016 In this role Clodagh was instrumental in driving innovation within Groceries Online and launching new initiatives including SmartShop and Chop Chop
Date of appointment June 2018
14
APPENDIX Interim Results 201920 - November 2019
Supplementary financial details
3 Financial calendarQ3 trading statement(15 weeks to 4 January 2020)
Preliminary results(52 weeks to 7 March 2020)
8 January 2020
30 April 2020
1 Weighted average number of shares
The interim dividend datesOrdinary shares
Ex-dividend 14 November 2019Record 15 November 2019Payment 20 December 2019
Sainsburyrsquos Meat Fish amp Poultry Value Own Label1
Gains
Losses
Incremental Switching within Sainsburyrsquos
Dec 17 Oct 19
+2Sales
+4Volume
Bread Investing across Own Label Tiers120+ EPP SKUs launched in H1 200 by end 201920
Repackaged and NPD within Premium
New Owned Brand Replacing Basics
NPD within Core+ Responding in Growth Areas
Repackaged Core bySainsburyrsquos
New
New
Improved
Improved
1 Kantar 12 we 6 October 2019 ndash rolling 12 weeks switching within total Market MFP
21 Interim Results 201920 - November 2019
Be competitive
on price
1
Lower prices on key volume lines
In-Store Volume Returns Examples
Chicken Wings 1kg+12 Volume
pound170was pound210
pound050Only
White Pittas x6+15 Volume
Chestnut Mushrooms 250g+45 Volume
pound080Only
1 Pre wave 3 lockdown (started 24th March to 15th June 19) YoY 2 Last 6 weeks since wave 4 lockdown (started 28th August 19) YoY
-4
0
4
8
12
16
-6 -5 -4 -3 -2 -1 0 1 2 3 4 5 6
Change in volumes ()
Pre1 Post2
22 Interim Results 201920 - November 2019
Be competitive
on price
1
We continue to be less dependent on promotions
230 228
207 209
Sainsburyrsquos Promotional Participation
1819 1920 19201819
Morrisons
Sainsburyrsquos
Tesco
Asda
Spend on Deal1
Q1 Q2
1 Source Nielsen 4 weekly data to 21 September 2019
10
20
30
4040
30
20
10Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep
2018 2019
H1 1920
H1 1920 AVERAGE
34 31
22 21
23 Interim Results 201920 - November 2019
Be competitive
on price
1
Improved grocery value
Base Price Index 2
-1
0
1
2
3
Grocery inflation (Kantar)1
-960bps
-550bps
Commodity VI 2
Aug 17 Jan 18 Jun 18 Nov 18 Apr 19 Oct 19
2004 2007 2010 2013 2016 2019
Morrisons
Sainsburyrsquos
Tesco
Asda
Total Market
Mar Apr May Jun Jul Aug Sep Oct2019
1 Kantar City Reads to Oct 20192 Sainsburyrsquos value index based on Brandview SKU matching data to Oct 2019
24 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
25 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Category tier performance
YoY value share change by tier
12 weeks to September 2019
-03
01
-01
-18
52 weeks to March 2019
Branded
PremiumOwn Brand
Branded
StandardOwn Brand
EconomyOwn Brand
02
-08
-04
00PremiumOwn Brand
StandardOwn Brand
EconomyOwn Brand
Source Nielsen Panel Total FMCG Market Universe Total outlets 52wks data to 9 March 2019 and 12wks data to 21 Sept 2019
26 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Premium private label
Taste the Difference re-launch
bull Over 350 products new repackaged or reformulated
bull Premium ready meals growth now outperforming the market
41
25 2419
Sainsburys Morrisons Tesco Asda
Premium Own Label volume share
Source Nielsen Panel Total FMCG 28 weeks data to 21 September 2019 Premium Own Label share of sales by retailer
27 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Distinctive brands
bull 57 of customers have bought Distinctive Brands since launch
bull On track for pound100m incremental sales
bull 37 new brands in H1 across Fresh and Grocery
bull lsquoTaste of the Futurersquo bays launched in 70 stores- 67 incremental sales
Leon
bull 3 year exclusive partnership
bull 14 products launched
28 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Beauty Rollout
bull Now rolled out to over 60 stores- Sales up over 40
bull Customer numbers up 7
bull Spend per customer up 25
bull Beauty range doubled 1200 additional lines
bull Double digit growth differential against the market
29 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Our values make us different
bull Committed to reduce plastic packaging by 50 by 2025
bull First retailer to remove single use plastic produce and bakery bags from our stores
- Launching reusable bags in fruit and veg aisles
bull Investing in our loose produce offer
bull Removed black plastic trays from ready meals
bull Fresh water stands in cafeacutes for customers to refill bottles
UKrsquos first major retailer to make significant commitment to reduce plastic
30 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Argos category and range focus
bull Availability improvement- Argos master range reduced by c30 over 3 years- Eliminating duplication removing low value items- Better availability of key lines in store
bull Rebalancing into higher margin categories- Gaining share in Furniture1
More distinctive rangemore reason to shop at Sainsburyrsquos
Reduced SKU count -20operational efficiencies
Higher cash gross profit +2 YOY
Volumes +8 operational efficiencies
41 Interim Results 201920 - November 2019
Drive efficiency
to invest in the customer
offer
4
BAU savings to offset cost inflation
Manages inflationary pressures
BAU savingsH1 201920
Procurement GNFR
Retail Technology Efficiencies
Retail HRRetail
management structures
Shrink Reduction
42 Interim Results 201920 - November 2019
Drive efficiency
to invest in the customer
offer
4
Strategic cost transformation 5 year plan
Converge Tackle fixed cost
End to end reviews
Retail Operations Marketing and Commercial Operations
Other central support
Logistics and Supply Chain
Project A
Project C
Project D
Shared Services BPO
Property strategy
Project BGNFR procurement
Capital prioritisation
Technology Digital and Corporate Services
pound250-pound350m
pound150-pound250m
pound400-pound600mExecution underway In planning Opportunities identified
pound5bn addressable cost base
43 Interim Results 201920 - November 2019
Grow connected
services
5
44 Interim Results 201920 - November 2019
Grow connected
services
5
Financial Services Priorities
To be the provider of financial services for loyal Sainsburyrsquos and Argos customers
An agile capital and cost efficient provider of simple mobile-led financial services
Vision
Objective
Priorities Reshape Simplify Strengthen
45 Interim Results 201920 - November 2019
Grow connected
services
5
Current Customer Base
Customer Credit Risk Balance Sheet Earnings
Argos Storecards 22m Prime Near Prime
Credit Cards 09m Prime
Personal Loans 05m Prime
Mortgages 9K Exit
Total Lending
Deposits 03m
Insurances 05m Very Low Risk
Travel Money 266 Sites
ATMs 1890
Financial Services reshaping the portfolio
46 Interim Results 201920 - November 2019
Grow connected
services
5
Increase connectivity and value for Group
Stop mortgage acquisition review back book options
No capital input from the Group from now1
Costincome c503 within 5 years
Double UPBT double digit ROCE within 5 years
Upstream cash within 5 years2
Financial Services key targets
Transform the cost base
Improve returns
Financial services cash generative
Reduce risk profile to Group
Stop putting cash in to Financial Services
2
4
6
3
1
5
Focus on Sainsburyrsquos customer base
1 Subject to regulatory changes requirements2 Subject to regulatory approval3 On a Group contribution basis
47 Interim Results 201920 - November 2019
Grow connected
services
5
Nectar
bull Biggest loyalty programme in the UK
bull Over 18 million collectors
bull Most recognised loyalty brand in the UK
bull Launch of Nectar digital- 21 million app users- Increase in overall Nectar participation- Increased levels of personalisation- 138000 new Nectar customers- 1 app on launch weekend
bull Coalition strengthened with addition of Esso in June 2019
48 Interim Results 201920 - November 2019
Provide a seamless customer
experience
6
49 Interim Results 201920 - November 2019
Provide a seamless customer
experience
6
Digital
bull Groceries Online sales penetration of 8- App accounts for over 20 of orders
bull 21 million digital Nectar app users
bull 14 million Argos Financial Services app downloads
bull Smartshop rollout in over 350 stores
Groceries online
Chop Chop
SmartShop
Universaldiscovery
Seamlessfinancialservices
Singlebasket
50 Interim Results 201920 - November 2019
We will help our customers live well for less
Confident in the core Integrated customer offer
One multi brand multi channel business
Strong cash generation supporting investment dividend and allowing deleverage
Financial flexibility and resilience
Sustainable cost reduction covering cost inflation and funding investment in our competitive offer
QampA
APPENDIX Interim Results 201920 - November 2019
Appendices
APPENDIX Interim Results 201920 - November 2019
Guidance for 201920
1
Spacebull Expect to open 2 new Sainsburyrsquos supermarkets and up to 15 convenience storesbull Expect to open around 25 Argos stores in Sainsburyrsquos (of which 11 are
relocations) resulting in around 305 Argos stores in supermarketsbull Expect to close 2 supermarkets around 25 convenience stores and around 20
Argos stores in FY201920 as part of announced property closure programme of 10-15 supermarkets 30-40 convenience stores and 60-70 Argos stores
Financial Servicesbull Financial services underlying operating profit expected to be cpound45m including a
cpound10m benefit as a result of a change in transfer pricing between Argos and Argos Financial Services
bull Financial Services non-underlying costs are expected to be around pound30mbull No further capital injections into the Bank are expected following pound35m in H1 201920
Depreciation and amortisationbull Expect underlying retail depreciation and amortisation of around pound12bn
including cpound500m right of use asset depreciation
CostsOperating cost inflationbull Cost inflation between 2 and 3Cost savingsbull Continue to deliver cost savings to at least offset the impact of cost inflation
Finance costsbull Net finance costs of around pound405m including pound320m lease interest in
201920 following the introduction of IFRS 16
One-off itemsbull In 201920 cash outflows as a result of items excluded from
underlying results should not exceed pound100mbull Property strategy programme one-off costs expected to be
pound230m-pound270m of which cash costs are pound30-40m
Dividendbull Sainsburyrsquos plans to change the full year dividend policy to 19x cover by
underlying earnings (versus 20x previously) to offset the dilutive (non cash) impact of IFRS 16 on underlying earnings
Capital expenditurebull Retail capital expenditure to be around pound550mbull Retail capital expenditure is expected to be around pound550m-pound600m per
annum over the medium term
Net debtbull Net debt before fair value movements on derivatives to reduce by at
least pound300m
Tax ratebull Underlying tax rate to be between 25 and 26
APPENDIX Interim Results 201920 - November 2019
Retail sales
1 Sales including VAT excluding fuel
LFL sales growth1
(10)
Sales from net new space1
04
Total sales growth1
(06)
Supermarkets2
(07)
Convenience20
Groceries Online
70
Channels
(01)(25)
(12)
2 Supermarket sales include Argos SiS sales FY 1819 16
pound139bn
pound103bnGrocery
pound30bnGeneralMerchandise
pound488mClothing
2
Chart1
201819
194
66
1
Sheet1
APPENDIX Interim Results 201920 - November 2019
Sainsburyrsquos sales area and store numbersAs at 21 September 2019
Sainsburyrsquos store estateAs at 21 September 2019
Sq ftsales area
82446
870
40001 to60000
20001 to40000
10000 to20000
Under10000 Total
Over60000
0122122
0197197
0175175
06767
824607
1431
Argos storesArgos in SainsburyrsquosArgos in HomebaseOtherArgos total store numbers
Habitat1
Collection points
594281
8-
883
16317
As at21 Sept 2019
Disposalsclosures
Newstores
As at9 March 2019
17--8
-1
(7)-
(2)-
(9)
-(36)
588288
6-
88216
282
ConvenienceSupermarketsTotal stores
Number of stores
Sq ftsales area
1929350
2279
40001 to60000
20001 to40000
10000 to20000
Under10000 Total
Over60000
-18441844
-58185818
-85018501
-46604660
19292117323102
ConvenienceSupermarketsTotal stores
Space by store size (lsquo000 sq ft)
Argos and Habitat store numbers
1 5 Habitat stores 11 Habitat stores in Sainsburys
4
APPENDIX Interim Results 201920 - November 2019
ClosureBitterne West
Sainsburyrsquos investment programme201920
Q1
Supermarkets ConvenienceNew storesMilton Keynes Brooklands District CentBromley High StLeeds Wike Ridge LaneSalford Harbour CityCanterbury High St
ReplacementMayfair Stratton St
ClosuresMayfairWarren St
Q1Q1Q1Q2Q2
Q2
Q1Q2
5
APPENDIX Interim Results 201920 - November 2019
Retail margin
Retail sales (inc VAT inc fuel)(exc VAT inc fuel)
Retail underlying EBITDAR1
Retail underlying EBITDAR margin 2
at constant fuel pricesRetail underlying operating profit3
Retail underlying operating margin 4
at constant fuel prices
1656714808
10677272
4373030
1661214856
11147575
4873333
030342
30 bps28 bps10333 bps32 bps
1 Retail underlying operating profit before net rental income of pound6 million and underlying depreciation and amortisation of pound636 million2 Retail underlying EBITDAR divided by underlying retail sales excluding VAT3 Retail underlying earnings before interest tax and Sainsburyrsquos underlying share of post-tax profit from joint ventures4 Retail underlying operating profit divided by underlying retail sales excluding VAT
poundm H1201920
H1201819
Change
6
APPENDIX Interim Results 201920 - November 2019
H1201920
H1201819
Group retail
Return on capital employed 1
Net debt to EBITDAR (times)23
Fixed charge cover (times)2
Underlying tax rate Core retail capex sales5
713126
26515
743326
25715
poundm
1 ROCE Return is defined as a 52 week rolling underlying profit before interest and tax Capital employed is defined as group net assets2 Net debt of pound6778 million includes lease obligations under IFRS 16 and perpetual securities treated as debt divided by Group underlying EBITDAR of pound2171 million calculated for a 52-week period to 21 September 20193 Group underlying EBITDAR divided by rent (both capital and interest) and net finance costs where interest on perpetual securities is treated as an underlying finance costs4 52 weeks to 22nd September 2018 is not available due to the implementation of IFRS 16 Comparatives therefore reflect the 52 weeks to 9th March 20195 Includes retail sales inc vat inc fuel
4
4
7
APPENDIX Interim Results 201920 - November 2019
Plc Board
Kevin OrsquoByrneChief Financial Officer
Mike Coupe Group Chief Executive
Dame Susan Rice Senior Independent Director
Matt BrittinNon-Executive Director
Jo HarlowNon-Executive Director
Brian CassinNon-Executive Director
David KeensNon-Executive Director
Jean Tomlin Non-Executive Director
Martin Scicluna Chairman
8
APPENDIX Interim Results 201920 - November 2019
Plc Board
Mike Coupe Group Chief Executive Officer
Skills and experienceAppointed Group Chief Executive Officer on 9 July 2014 Mike has been a member of the Operating Board since October 2004 Mike has vast retail industry experience in trading strategy marketing digital and online as well as multi-site store experience He joined Sainsburyrsquos from Big Food Group where he was a board director of Big Food Group PLC and Managing Director of Iceland Food Stores He previously worked for both Asda and Tesco PLC where he served in a variety of senior management roles
Date of appointment 1 August 2007Mike has served as an Executive Director since 1 August 2007 and as Chief Executive Officer since 9 July 2014
Committee membershipCorporate Responsibility and Sustainability Committee
Kevin OrsquoByrne Chief Financial Officer
Skills and experienceKevin brings to the Board a wealth of retail and finance experience Kevin was previously Chief Executive Officer of Poundland Group Limited until December 2016 and held executive roles at Kingfisher plc from 2008 to 2015 including Divisional Director UK China and Turkey Chief Executive Officer of BampQ UK amp Ireland and Group Finance Director He was previously Group Finance Director of Dixons Retail plc and European Finance Director of Quaker Oats He was a Non-Executive Director of Land Securities Group PLC from 2008 to September 2017 where he was Chairman of the Audit Committee and Senior Independent Director
Date of appointment 9 January 2017
Other current rolesNon-Executive Director of Greene King plc
Skills and experienceMartin brings a breadth of experience and leadership in both executive and non-executive roles His previous roles include positions as the Chairman of Great Portland Estates plc Senior Independent Director and Chair of the Audit Committee of Worldpay Inc and Non-Executive Director and Chair of the Audit Committee of Lloyds Banking Group plc He was a partner at Deloitte LLP for 26 years serving as Chairman from 1995 to 2007 where his clients included Dixons WH Smith Alliance Unichem and Cadburyrsquos
Other current rolesChairman of RSA Insurance Group plc
Martin Scicluna Chairman
Date of appointment 1 November 2018 Martin joined the Board as Chairman Designate and Non-Executive Director on 1 November 2018 He was appointed as Chairman of the Board on 10 March 2019
Committee membershipChair of the Nomination Committee
Dame Susan Rice Senior Independent Director
Skills and experienceSusan has extensive experience as a Non-Executive Director as well as in retail banking financial services leadership and sustainability Her career in retail bankingis particularly relevant to our ownership ofSainsburyrsquos Bank Previously Susan was a member of the First Ministerrsquos Council of Economic Advisors Managing Director of Lloyds Banking Group Scotland and was previously Chief Executive and then Chairman of Lloyds TSB Scotland plc She has also held a range of other non-executive directorships including at the Bank of England and SSE plc
Committee membershipChair of the Remuneration Committee and a member of the Nomination Committee
Date of appointment 1 June 2013
Other current rolesChair of Scottish Water and Business Stream Chair of the Scottish Fiscal Commission Non-Executive Director of the North American Income Trust C Hoare and Co and Senior Independent Director of the North American Income Trust
9
Other current rolesNon-Executive Director and Chairman of the Audit Committee of Centrica plc
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jean Tomlin Non-Executive Director
Skills and experienceJean has extensive experience and breadth of skills in human resources and corporate responsibility Jean was formerly Director of HR Workforce and Accreditation for The London OrganisingCommittee of the Olympic and Paralympic Games where she set the strategic direction to ensure the mobilisation of the combined 200000-strong workforce including paid staff volunteers and contractors which represented the recruitment and mobilisation of the largest peacetime workforce and set the industry standard for volunteering with the highly acclaimed Games She was previously Group HR Director at Marks and Spencer Group Plc HR Director and founder member of Egg plc and Sales amp Operations Director of Prudential Direct
Date of appointment 1 January 2013
Committee membershipAudit Committee Corporate Responsibility and Sustainability Committee and Nomination Committee
David Keens Non-Executive Director
Skills and experienceDavid has extensive retail experience and knowledge of consumer facing businesses together with his core skills in finance David was formerly Group Finance Director of next plc from 1991 to 2015 and their Group Treasurer from 1986 to 1991 Previous management experience includes nine years in the UK and overseas operations of multinational food manufacturer Nabisco and prior to that seven years in the accountancy profession
Date of appointment 29 April 2015
Committee membershipChair of the Audit Committee and a member of the Nomination Committee
Other current rolesIndependent Board member of Capri Holdings Limited Non-Executive Director of Hakluyt and Chief Executive Officer of Chanzo Limited
Other current rolesNon-Executive Director Senior Independent Director and Chair of the Audit Committee of Auto Trader Group plc
Matt BrittinNon-Executive Director
Skills and experienceMatt has extensive experience of running a high profile fast moving innovative digital business Since 2015 he has been responsible for Googlersquos business and operations in Europe the Middle East and Africa and hersquos been in leadership roles at Google since 2007 Prior to that Matt spent much of his career in media and marketing with particular interests in strategy commercial development and sales performance This included commercial and digital leadership roles in UK media
Date of appointment 27 January 2011
Committee membershipNomination Committee and Remuneration Committee
Other current rolesGooglersquos President ndash Europe Middle East and Africa and Director of The Media Trust
Brian Cassin Non-Executive Director
Skills and experienceBrian brings present day experience of running a FTSE40 group and of big data and analytics ndash topics of key importance to Sainsburyrsquos Brian joined Experian plc as Chief Financial Officer in April 2012 a post he held until his appointment as Chief Executive Officer in July 2014 Prior to this Brian spent his career in investment banking at Greenhill amp Co where he was Managing Director and Partner Brian has also held various roles at Baring Brothers International and at the London Stock Exchange
Date of appointment 1 April 2016
Committee membershipAudit Committee and Nomination Committee
Other current rolesChief Executive Officer of Experian plc
10
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jo Harlow Non-Executive Director
Skills and experienceJo brings a wealth of experience in consumer-facing businesses and in the telecoms and technology industry bothin the UK and internationally Jo spent 12 years in a variety of senior management roles with Nokia and Microsoft Prior to this she spent eight years at PampG and 11 years at Reebok in senior sales and marketing positions in both Europe and the US
Date of appointment 11 September 2017
Committee membershipChair of the Corporate Responsibility and Sustainability Committee and member of the Nomination Committee and Remuneration Committee
Life PresidentLord Sainsbury of Preston Candover KG
Other current rolesNon-Executive Director of InterContinental Hotels plc Non-Executive Director of Halmaplc and Member of the Supervisory Board of Ceconomy AG
11
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief Executive
Tim FallowfieldCompany Secretary amp Corporate Services Director
Kevin OrsquoByrne Chief Financial Officer
Jim BrownChief Executive Officer of Sainsburyrsquos Bank
Paul Mills-HicksFood Commercial Director
Angie RisleyGroup HR Director
Phil JordanGroup Chief InformationOfficer
Simon RobertsRetail and Operations Director
Clo MoriartyGroup Chief Digital Officer
12
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief ExecutiveSee Appendix page 9
Kevin OrsquoByrneChief Financial OfficerSee Appendix page 9
Tim FallowfieldCompany Secretary amp Corporate Services Director
Date of appointment September 2004
Skills and experienceTim joined Sainsburyrsquos in 2001 as Company Secretary and joined the Operating Board in September 2004 In addition to his role as Company Secretary Tim is responsible for the Corporate Services Division comprising Legal Services Data Governance Safety Shareholder Services Insurance and Central Security He chairs the Group Safety Committee and the Data Governance Committee Tim joined Sainsburyrsquos from Exelplc the global logistics company now part of DHL where he was Company Secretary and General Counsel He began his career at the international law firm Clifford Chance and is a qualified solicitor Tim is Chairman of the Disability Confident Business Leaders Group which works with Government in shaping the disability employment agenda and in raising awareness of the benefits of employing disabled people
Jim BrownCEO of Sainsburyrsquos Bank
Skills and experienceJim joined Sainsburyrsquos Bank as CEO in June 2019 and is also a member of the Sainsburyrsquos Group Operating Board He has held a number of senior international Financial Services roles - most recently for RBS in the UK as CEO of Williams and Glyn and prior to that CEO of Ulster Bank in Northern Ireland and the Republic of Ireland Before moving to Ireland he was based in Hong Kong and was CEO Retail and Commercial Banking Asia and the Middle East for RBS and ABN AMRO He has also been a member of the RBS Group Management Committee ABN AMRO Executive Group ABN AMRO Global Consumer Leadership Team and the RBSBank of China Joint Steering Committee Earlier in his career he held a number of senior executive roles for Citibank in Asia and Australia and New Zealand Jim has also held various Board positions including at Ulster Bank Saudi Hollandi Bank The Royal Bank of Scotland (China) Co Ltd and RBS (Pakistan) Ltd He is also a past President of the Institute of Banking in Ireland He is currently a Certified Bank Director
Date of appointment August 2019
Paul Mills-HicksFood Commercial Director
Skills and experiencePaul joined the Operating Board in May 2014 as Food Commercial Director having spent over ten years at Sainsburyrsquos He was closely involved in the formation and execution of the lsquoMaking Sainsburyrsquos Great Againrsquo strategy Following this he held a variety of roles in commercial strategy and finance most recently as Business Unit Director for Grocery Prior to Sainsburyrsquos Paul was European Controller at Marks and Spencer Group PLC and a Director at UBS Warburg
Date of appointment May 2014
13
APPENDIX Interim Results 201920 - November 2019
Operating Board
Angie RisleyGroup HR Director
Skills and experienceAngie was appointed Group HR Director and a member of the Operating Board in January 2013 with responsibility for human resources Angie is also a Director of Sainsburyrsquos Bank plc Angie was most recently Non-Executive Director and Chairman of the Remuneration Committee of Serco plc and prior to this was Group HR Director of Lloyds Banking Group and an Executive Director of Whitbread PLC with responsibility for HR and Corporate Social Responsibility Angie is currently Non-Executive Director and Chair of the Remuneration Committee at Smith amp Nephew plc
Date of appointment January 2013
Phil JordanGroup Chief Information Officer
Skills and experiencePhil joined the Board in January 2018 and has brought a fresh globalperspective on technology to the Operating Board in addition to a wealth of experience in digital data and business transformation Prior to joining Sainsburyrsquos Phil had a long and successful track record in telecommunications Most recently he was Global Chief Information Officer at Telefonica overseeing Digital Transformation and Information Technology and prior to that was Chief Information Officer for Vodafone UKIreland Phil has worked as a Non-Executive Advisor on Technology in the Investment amp Retail Banking sector and is currently a Non-Executive Director of TalkTalk Telecom Group PLC and chairs its Cyber-Security Committee
Date of appointment January 2018
Simon RobertsRetail and Operations Director
Skills and experienceSimon joined Sainsburyrsquos and the Operating Board in July 2017 as Central Retail amp Operations Director responsible for Stores Central operation and Logistics In his previous role he was Executive Vice President of Walgreens Boots Alliance and President of Boots with responsibility for commercial and retail operations across the UK and Ireland Prior to Boots Simon was at Marks and Spencer Group PLC where he held operational and customer leadership roles across stores divisions and central operations Simon is also the Non-Executive Chairman at the Institute ofCustomer Service
Date of appointment July 2017
Clodagh MoriartyGroup Chief Digital Officer
Skills and experienceClodagh was appointed Group Chief Digital Officer in June 2018 Clodagh leads the delivery of a consistent and first-rate digital experience for customers across Sainsburyrsquos Argos and Sainsburyrsquos BankClodagh joined Sainsburyrsquos in 2010 from Bain amp Co management consultants where she had gained experience working on a broad range of projects across multiple sectors and countries Following two years as Head of Strategy at Sainsburyrsquosshe moved into Food Commercial as Category Manager for Meal Solutions and then became Head of Online Trading spanning Food General Merchandise and Clothing before being promoted to Director of Online in 2016 In this role Clodagh was instrumental in driving innovation within Groceries Online and launching new initiatives including SmartShop and Chop Chop
Date of appointment June 2018
14
APPENDIX Interim Results 201920 - November 2019
Supplementary financial details
3 Financial calendarQ3 trading statement(15 weeks to 4 January 2020)
Preliminary results(52 weeks to 7 March 2020)
8 January 2020
30 April 2020
1 Weighted average number of shares
The interim dividend datesOrdinary shares
Ex-dividend 14 November 2019Record 15 November 2019Payment 20 December 2019
Product Quality Framework helps us fund investment
PQF cereals case study
BAU savings to offset cost inflation
Strategic cost transformation 5 year plan
Slide Number 43
Financial Services Priorities
Financial Services reshaping the portfolio
Financial Services key targets
Nectar
Slide Number 48
Digital
We will help our customers live well for less
Slide Number 51
Slide Number 52
Guidance for 201920
Retail sales
Sainsburyrsquos sales area and store numbers
Sainsburyrsquos store estate
Sainsburyrsquos investment programme
Retail margin
Group retail
Plc Board
Plc Board
Plc Board
Plc Board
Operating Board
Operating Board
Operating Board
Supplementary financial details
Contacts
Column1
201819
Grocery
19
GM
7
Clothing
1
To resize chart data range drag lower right corner of range
Grocery
GM
Clothing
19 Interim Results 201920 - November 2019
Be competitive
on price
1
20 Interim Results 201920 - November 2019
Be competitive
on price
1
Value brand investment
Sainsburyrsquos Meat Fish amp Poultry Value Own Label1
Gains
Losses
Incremental Switching within Sainsburyrsquos
Dec 17 Oct 19
+2Sales
+4Volume
Bread Investing across Own Label Tiers120+ EPP SKUs launched in H1 200 by end 201920
Repackaged and NPD within Premium
New Owned Brand Replacing Basics
NPD within Core+ Responding in Growth Areas
Repackaged Core bySainsburyrsquos
New
New
Improved
Improved
1 Kantar 12 we 6 October 2019 ndash rolling 12 weeks switching within total Market MFP
21 Interim Results 201920 - November 2019
Be competitive
on price
1
Lower prices on key volume lines
In-Store Volume Returns Examples
Chicken Wings 1kg+12 Volume
pound170was pound210
pound050Only
White Pittas x6+15 Volume
Chestnut Mushrooms 250g+45 Volume
pound080Only
1 Pre wave 3 lockdown (started 24th March to 15th June 19) YoY 2 Last 6 weeks since wave 4 lockdown (started 28th August 19) YoY
-4
0
4
8
12
16
-6 -5 -4 -3 -2 -1 0 1 2 3 4 5 6
Change in volumes ()
Pre1 Post2
22 Interim Results 201920 - November 2019
Be competitive
on price
1
We continue to be less dependent on promotions
230 228
207 209
Sainsburyrsquos Promotional Participation
1819 1920 19201819
Morrisons
Sainsburyrsquos
Tesco
Asda
Spend on Deal1
Q1 Q2
1 Source Nielsen 4 weekly data to 21 September 2019
10
20
30
4040
30
20
10Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep
2018 2019
H1 1920
H1 1920 AVERAGE
34 31
22 21
23 Interim Results 201920 - November 2019
Be competitive
on price
1
Improved grocery value
Base Price Index 2
-1
0
1
2
3
Grocery inflation (Kantar)1
-960bps
-550bps
Commodity VI 2
Aug 17 Jan 18 Jun 18 Nov 18 Apr 19 Oct 19
2004 2007 2010 2013 2016 2019
Morrisons
Sainsburyrsquos
Tesco
Asda
Total Market
Mar Apr May Jun Jul Aug Sep Oct2019
1 Kantar City Reads to Oct 20192 Sainsburyrsquos value index based on Brandview SKU matching data to Oct 2019
24 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
25 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Category tier performance
YoY value share change by tier
12 weeks to September 2019
-03
01
-01
-18
52 weeks to March 2019
Branded
PremiumOwn Brand
Branded
StandardOwn Brand
EconomyOwn Brand
02
-08
-04
00PremiumOwn Brand
StandardOwn Brand
EconomyOwn Brand
Source Nielsen Panel Total FMCG Market Universe Total outlets 52wks data to 9 March 2019 and 12wks data to 21 Sept 2019
26 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Premium private label
Taste the Difference re-launch
bull Over 350 products new repackaged or reformulated
bull Premium ready meals growth now outperforming the market
41
25 2419
Sainsburys Morrisons Tesco Asda
Premium Own Label volume share
Source Nielsen Panel Total FMCG 28 weeks data to 21 September 2019 Premium Own Label share of sales by retailer
27 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Distinctive brands
bull 57 of customers have bought Distinctive Brands since launch
bull On track for pound100m incremental sales
bull 37 new brands in H1 across Fresh and Grocery
bull lsquoTaste of the Futurersquo bays launched in 70 stores- 67 incremental sales
Leon
bull 3 year exclusive partnership
bull 14 products launched
28 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Beauty Rollout
bull Now rolled out to over 60 stores- Sales up over 40
bull Customer numbers up 7
bull Spend per customer up 25
bull Beauty range doubled 1200 additional lines
bull Double digit growth differential against the market
29 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Our values make us different
bull Committed to reduce plastic packaging by 50 by 2025
bull First retailer to remove single use plastic produce and bakery bags from our stores
- Launching reusable bags in fruit and veg aisles
bull Investing in our loose produce offer
bull Removed black plastic trays from ready meals
bull Fresh water stands in cafeacutes for customers to refill bottles
UKrsquos first major retailer to make significant commitment to reduce plastic
30 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Argos category and range focus
bull Availability improvement- Argos master range reduced by c30 over 3 years- Eliminating duplication removing low value items- Better availability of key lines in store
bull Rebalancing into higher margin categories- Gaining share in Furniture1
More distinctive rangemore reason to shop at Sainsburyrsquos
Reduced SKU count -20operational efficiencies
Higher cash gross profit +2 YOY
Volumes +8 operational efficiencies
41 Interim Results 201920 - November 2019
Drive efficiency
to invest in the customer
offer
4
BAU savings to offset cost inflation
Manages inflationary pressures
BAU savingsH1 201920
Procurement GNFR
Retail Technology Efficiencies
Retail HRRetail
management structures
Shrink Reduction
42 Interim Results 201920 - November 2019
Drive efficiency
to invest in the customer
offer
4
Strategic cost transformation 5 year plan
Converge Tackle fixed cost
End to end reviews
Retail Operations Marketing and Commercial Operations
Other central support
Logistics and Supply Chain
Project A
Project C
Project D
Shared Services BPO
Property strategy
Project BGNFR procurement
Capital prioritisation
Technology Digital and Corporate Services
pound250-pound350m
pound150-pound250m
pound400-pound600mExecution underway In planning Opportunities identified
pound5bn addressable cost base
43 Interim Results 201920 - November 2019
Grow connected
services
5
44 Interim Results 201920 - November 2019
Grow connected
services
5
Financial Services Priorities
To be the provider of financial services for loyal Sainsburyrsquos and Argos customers
An agile capital and cost efficient provider of simple mobile-led financial services
Vision
Objective
Priorities Reshape Simplify Strengthen
45 Interim Results 201920 - November 2019
Grow connected
services
5
Current Customer Base
Customer Credit Risk Balance Sheet Earnings
Argos Storecards 22m Prime Near Prime
Credit Cards 09m Prime
Personal Loans 05m Prime
Mortgages 9K Exit
Total Lending
Deposits 03m
Insurances 05m Very Low Risk
Travel Money 266 Sites
ATMs 1890
Financial Services reshaping the portfolio
46 Interim Results 201920 - November 2019
Grow connected
services
5
Increase connectivity and value for Group
Stop mortgage acquisition review back book options
No capital input from the Group from now1
Costincome c503 within 5 years
Double UPBT double digit ROCE within 5 years
Upstream cash within 5 years2
Financial Services key targets
Transform the cost base
Improve returns
Financial services cash generative
Reduce risk profile to Group
Stop putting cash in to Financial Services
2
4
6
3
1
5
Focus on Sainsburyrsquos customer base
1 Subject to regulatory changes requirements2 Subject to regulatory approval3 On a Group contribution basis
47 Interim Results 201920 - November 2019
Grow connected
services
5
Nectar
bull Biggest loyalty programme in the UK
bull Over 18 million collectors
bull Most recognised loyalty brand in the UK
bull Launch of Nectar digital- 21 million app users- Increase in overall Nectar participation- Increased levels of personalisation- 138000 new Nectar customers- 1 app on launch weekend
bull Coalition strengthened with addition of Esso in June 2019
48 Interim Results 201920 - November 2019
Provide a seamless customer
experience
6
49 Interim Results 201920 - November 2019
Provide a seamless customer
experience
6
Digital
bull Groceries Online sales penetration of 8- App accounts for over 20 of orders
bull 21 million digital Nectar app users
bull 14 million Argos Financial Services app downloads
bull Smartshop rollout in over 350 stores
Groceries online
Chop Chop
SmartShop
Universaldiscovery
Seamlessfinancialservices
Singlebasket
50 Interim Results 201920 - November 2019
We will help our customers live well for less
Confident in the core Integrated customer offer
One multi brand multi channel business
Strong cash generation supporting investment dividend and allowing deleverage
Financial flexibility and resilience
Sustainable cost reduction covering cost inflation and funding investment in our competitive offer
QampA
APPENDIX Interim Results 201920 - November 2019
Appendices
APPENDIX Interim Results 201920 - November 2019
Guidance for 201920
1
Spacebull Expect to open 2 new Sainsburyrsquos supermarkets and up to 15 convenience storesbull Expect to open around 25 Argos stores in Sainsburyrsquos (of which 11 are
relocations) resulting in around 305 Argos stores in supermarketsbull Expect to close 2 supermarkets around 25 convenience stores and around 20
Argos stores in FY201920 as part of announced property closure programme of 10-15 supermarkets 30-40 convenience stores and 60-70 Argos stores
Financial Servicesbull Financial services underlying operating profit expected to be cpound45m including a
cpound10m benefit as a result of a change in transfer pricing between Argos and Argos Financial Services
bull Financial Services non-underlying costs are expected to be around pound30mbull No further capital injections into the Bank are expected following pound35m in H1 201920
Depreciation and amortisationbull Expect underlying retail depreciation and amortisation of around pound12bn
including cpound500m right of use asset depreciation
CostsOperating cost inflationbull Cost inflation between 2 and 3Cost savingsbull Continue to deliver cost savings to at least offset the impact of cost inflation
Finance costsbull Net finance costs of around pound405m including pound320m lease interest in
201920 following the introduction of IFRS 16
One-off itemsbull In 201920 cash outflows as a result of items excluded from
underlying results should not exceed pound100mbull Property strategy programme one-off costs expected to be
pound230m-pound270m of which cash costs are pound30-40m
Dividendbull Sainsburyrsquos plans to change the full year dividend policy to 19x cover by
underlying earnings (versus 20x previously) to offset the dilutive (non cash) impact of IFRS 16 on underlying earnings
Capital expenditurebull Retail capital expenditure to be around pound550mbull Retail capital expenditure is expected to be around pound550m-pound600m per
annum over the medium term
Net debtbull Net debt before fair value movements on derivatives to reduce by at
least pound300m
Tax ratebull Underlying tax rate to be between 25 and 26
APPENDIX Interim Results 201920 - November 2019
Retail sales
1 Sales including VAT excluding fuel
LFL sales growth1
(10)
Sales from net new space1
04
Total sales growth1
(06)
Supermarkets2
(07)
Convenience20
Groceries Online
70
Channels
(01)(25)
(12)
2 Supermarket sales include Argos SiS sales FY 1819 16
pound139bn
pound103bnGrocery
pound30bnGeneralMerchandise
pound488mClothing
2
Chart1
201819
194
66
1
Sheet1
APPENDIX Interim Results 201920 - November 2019
Sainsburyrsquos sales area and store numbersAs at 21 September 2019
Sainsburyrsquos store estateAs at 21 September 2019
Sq ftsales area
82446
870
40001 to60000
20001 to40000
10000 to20000
Under10000 Total
Over60000
0122122
0197197
0175175
06767
824607
1431
Argos storesArgos in SainsburyrsquosArgos in HomebaseOtherArgos total store numbers
Habitat1
Collection points
594281
8-
883
16317
As at21 Sept 2019
Disposalsclosures
Newstores
As at9 March 2019
17--8
-1
(7)-
(2)-
(9)
-(36)
588288
6-
88216
282
ConvenienceSupermarketsTotal stores
Number of stores
Sq ftsales area
1929350
2279
40001 to60000
20001 to40000
10000 to20000
Under10000 Total
Over60000
-18441844
-58185818
-85018501
-46604660
19292117323102
ConvenienceSupermarketsTotal stores
Space by store size (lsquo000 sq ft)
Argos and Habitat store numbers
1 5 Habitat stores 11 Habitat stores in Sainsburys
4
APPENDIX Interim Results 201920 - November 2019
ClosureBitterne West
Sainsburyrsquos investment programme201920
Q1
Supermarkets ConvenienceNew storesMilton Keynes Brooklands District CentBromley High StLeeds Wike Ridge LaneSalford Harbour CityCanterbury High St
ReplacementMayfair Stratton St
ClosuresMayfairWarren St
Q1Q1Q1Q2Q2
Q2
Q1Q2
5
APPENDIX Interim Results 201920 - November 2019
Retail margin
Retail sales (inc VAT inc fuel)(exc VAT inc fuel)
Retail underlying EBITDAR1
Retail underlying EBITDAR margin 2
at constant fuel pricesRetail underlying operating profit3
Retail underlying operating margin 4
at constant fuel prices
1656714808
10677272
4373030
1661214856
11147575
4873333
030342
30 bps28 bps10333 bps32 bps
1 Retail underlying operating profit before net rental income of pound6 million and underlying depreciation and amortisation of pound636 million2 Retail underlying EBITDAR divided by underlying retail sales excluding VAT3 Retail underlying earnings before interest tax and Sainsburyrsquos underlying share of post-tax profit from joint ventures4 Retail underlying operating profit divided by underlying retail sales excluding VAT
poundm H1201920
H1201819
Change
6
APPENDIX Interim Results 201920 - November 2019
H1201920
H1201819
Group retail
Return on capital employed 1
Net debt to EBITDAR (times)23
Fixed charge cover (times)2
Underlying tax rate Core retail capex sales5
713126
26515
743326
25715
poundm
1 ROCE Return is defined as a 52 week rolling underlying profit before interest and tax Capital employed is defined as group net assets2 Net debt of pound6778 million includes lease obligations under IFRS 16 and perpetual securities treated as debt divided by Group underlying EBITDAR of pound2171 million calculated for a 52-week period to 21 September 20193 Group underlying EBITDAR divided by rent (both capital and interest) and net finance costs where interest on perpetual securities is treated as an underlying finance costs4 52 weeks to 22nd September 2018 is not available due to the implementation of IFRS 16 Comparatives therefore reflect the 52 weeks to 9th March 20195 Includes retail sales inc vat inc fuel
4
4
7
APPENDIX Interim Results 201920 - November 2019
Plc Board
Kevin OrsquoByrneChief Financial Officer
Mike Coupe Group Chief Executive
Dame Susan Rice Senior Independent Director
Matt BrittinNon-Executive Director
Jo HarlowNon-Executive Director
Brian CassinNon-Executive Director
David KeensNon-Executive Director
Jean Tomlin Non-Executive Director
Martin Scicluna Chairman
8
APPENDIX Interim Results 201920 - November 2019
Plc Board
Mike Coupe Group Chief Executive Officer
Skills and experienceAppointed Group Chief Executive Officer on 9 July 2014 Mike has been a member of the Operating Board since October 2004 Mike has vast retail industry experience in trading strategy marketing digital and online as well as multi-site store experience He joined Sainsburyrsquos from Big Food Group where he was a board director of Big Food Group PLC and Managing Director of Iceland Food Stores He previously worked for both Asda and Tesco PLC where he served in a variety of senior management roles
Date of appointment 1 August 2007Mike has served as an Executive Director since 1 August 2007 and as Chief Executive Officer since 9 July 2014
Committee membershipCorporate Responsibility and Sustainability Committee
Kevin OrsquoByrne Chief Financial Officer
Skills and experienceKevin brings to the Board a wealth of retail and finance experience Kevin was previously Chief Executive Officer of Poundland Group Limited until December 2016 and held executive roles at Kingfisher plc from 2008 to 2015 including Divisional Director UK China and Turkey Chief Executive Officer of BampQ UK amp Ireland and Group Finance Director He was previously Group Finance Director of Dixons Retail plc and European Finance Director of Quaker Oats He was a Non-Executive Director of Land Securities Group PLC from 2008 to September 2017 where he was Chairman of the Audit Committee and Senior Independent Director
Date of appointment 9 January 2017
Other current rolesNon-Executive Director of Greene King plc
Skills and experienceMartin brings a breadth of experience and leadership in both executive and non-executive roles His previous roles include positions as the Chairman of Great Portland Estates plc Senior Independent Director and Chair of the Audit Committee of Worldpay Inc and Non-Executive Director and Chair of the Audit Committee of Lloyds Banking Group plc He was a partner at Deloitte LLP for 26 years serving as Chairman from 1995 to 2007 where his clients included Dixons WH Smith Alliance Unichem and Cadburyrsquos
Other current rolesChairman of RSA Insurance Group plc
Martin Scicluna Chairman
Date of appointment 1 November 2018 Martin joined the Board as Chairman Designate and Non-Executive Director on 1 November 2018 He was appointed as Chairman of the Board on 10 March 2019
Committee membershipChair of the Nomination Committee
Dame Susan Rice Senior Independent Director
Skills and experienceSusan has extensive experience as a Non-Executive Director as well as in retail banking financial services leadership and sustainability Her career in retail bankingis particularly relevant to our ownership ofSainsburyrsquos Bank Previously Susan was a member of the First Ministerrsquos Council of Economic Advisors Managing Director of Lloyds Banking Group Scotland and was previously Chief Executive and then Chairman of Lloyds TSB Scotland plc She has also held a range of other non-executive directorships including at the Bank of England and SSE plc
Committee membershipChair of the Remuneration Committee and a member of the Nomination Committee
Date of appointment 1 June 2013
Other current rolesChair of Scottish Water and Business Stream Chair of the Scottish Fiscal Commission Non-Executive Director of the North American Income Trust C Hoare and Co and Senior Independent Director of the North American Income Trust
9
Other current rolesNon-Executive Director and Chairman of the Audit Committee of Centrica plc
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jean Tomlin Non-Executive Director
Skills and experienceJean has extensive experience and breadth of skills in human resources and corporate responsibility Jean was formerly Director of HR Workforce and Accreditation for The London OrganisingCommittee of the Olympic and Paralympic Games where she set the strategic direction to ensure the mobilisation of the combined 200000-strong workforce including paid staff volunteers and contractors which represented the recruitment and mobilisation of the largest peacetime workforce and set the industry standard for volunteering with the highly acclaimed Games She was previously Group HR Director at Marks and Spencer Group Plc HR Director and founder member of Egg plc and Sales amp Operations Director of Prudential Direct
Date of appointment 1 January 2013
Committee membershipAudit Committee Corporate Responsibility and Sustainability Committee and Nomination Committee
David Keens Non-Executive Director
Skills and experienceDavid has extensive retail experience and knowledge of consumer facing businesses together with his core skills in finance David was formerly Group Finance Director of next plc from 1991 to 2015 and their Group Treasurer from 1986 to 1991 Previous management experience includes nine years in the UK and overseas operations of multinational food manufacturer Nabisco and prior to that seven years in the accountancy profession
Date of appointment 29 April 2015
Committee membershipChair of the Audit Committee and a member of the Nomination Committee
Other current rolesIndependent Board member of Capri Holdings Limited Non-Executive Director of Hakluyt and Chief Executive Officer of Chanzo Limited
Other current rolesNon-Executive Director Senior Independent Director and Chair of the Audit Committee of Auto Trader Group plc
Matt BrittinNon-Executive Director
Skills and experienceMatt has extensive experience of running a high profile fast moving innovative digital business Since 2015 he has been responsible for Googlersquos business and operations in Europe the Middle East and Africa and hersquos been in leadership roles at Google since 2007 Prior to that Matt spent much of his career in media and marketing with particular interests in strategy commercial development and sales performance This included commercial and digital leadership roles in UK media
Date of appointment 27 January 2011
Committee membershipNomination Committee and Remuneration Committee
Other current rolesGooglersquos President ndash Europe Middle East and Africa and Director of The Media Trust
Brian Cassin Non-Executive Director
Skills and experienceBrian brings present day experience of running a FTSE40 group and of big data and analytics ndash topics of key importance to Sainsburyrsquos Brian joined Experian plc as Chief Financial Officer in April 2012 a post he held until his appointment as Chief Executive Officer in July 2014 Prior to this Brian spent his career in investment banking at Greenhill amp Co where he was Managing Director and Partner Brian has also held various roles at Baring Brothers International and at the London Stock Exchange
Date of appointment 1 April 2016
Committee membershipAudit Committee and Nomination Committee
Other current rolesChief Executive Officer of Experian plc
10
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jo Harlow Non-Executive Director
Skills and experienceJo brings a wealth of experience in consumer-facing businesses and in the telecoms and technology industry bothin the UK and internationally Jo spent 12 years in a variety of senior management roles with Nokia and Microsoft Prior to this she spent eight years at PampG and 11 years at Reebok in senior sales and marketing positions in both Europe and the US
Date of appointment 11 September 2017
Committee membershipChair of the Corporate Responsibility and Sustainability Committee and member of the Nomination Committee and Remuneration Committee
Life PresidentLord Sainsbury of Preston Candover KG
Other current rolesNon-Executive Director of InterContinental Hotels plc Non-Executive Director of Halmaplc and Member of the Supervisory Board of Ceconomy AG
11
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief Executive
Tim FallowfieldCompany Secretary amp Corporate Services Director
Kevin OrsquoByrne Chief Financial Officer
Jim BrownChief Executive Officer of Sainsburyrsquos Bank
Paul Mills-HicksFood Commercial Director
Angie RisleyGroup HR Director
Phil JordanGroup Chief InformationOfficer
Simon RobertsRetail and Operations Director
Clo MoriartyGroup Chief Digital Officer
12
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief ExecutiveSee Appendix page 9
Kevin OrsquoByrneChief Financial OfficerSee Appendix page 9
Tim FallowfieldCompany Secretary amp Corporate Services Director
Date of appointment September 2004
Skills and experienceTim joined Sainsburyrsquos in 2001 as Company Secretary and joined the Operating Board in September 2004 In addition to his role as Company Secretary Tim is responsible for the Corporate Services Division comprising Legal Services Data Governance Safety Shareholder Services Insurance and Central Security He chairs the Group Safety Committee and the Data Governance Committee Tim joined Sainsburyrsquos from Exelplc the global logistics company now part of DHL where he was Company Secretary and General Counsel He began his career at the international law firm Clifford Chance and is a qualified solicitor Tim is Chairman of the Disability Confident Business Leaders Group which works with Government in shaping the disability employment agenda and in raising awareness of the benefits of employing disabled people
Jim BrownCEO of Sainsburyrsquos Bank
Skills and experienceJim joined Sainsburyrsquos Bank as CEO in June 2019 and is also a member of the Sainsburyrsquos Group Operating Board He has held a number of senior international Financial Services roles - most recently for RBS in the UK as CEO of Williams and Glyn and prior to that CEO of Ulster Bank in Northern Ireland and the Republic of Ireland Before moving to Ireland he was based in Hong Kong and was CEO Retail and Commercial Banking Asia and the Middle East for RBS and ABN AMRO He has also been a member of the RBS Group Management Committee ABN AMRO Executive Group ABN AMRO Global Consumer Leadership Team and the RBSBank of China Joint Steering Committee Earlier in his career he held a number of senior executive roles for Citibank in Asia and Australia and New Zealand Jim has also held various Board positions including at Ulster Bank Saudi Hollandi Bank The Royal Bank of Scotland (China) Co Ltd and RBS (Pakistan) Ltd He is also a past President of the Institute of Banking in Ireland He is currently a Certified Bank Director
Date of appointment August 2019
Paul Mills-HicksFood Commercial Director
Skills and experiencePaul joined the Operating Board in May 2014 as Food Commercial Director having spent over ten years at Sainsburyrsquos He was closely involved in the formation and execution of the lsquoMaking Sainsburyrsquos Great Againrsquo strategy Following this he held a variety of roles in commercial strategy and finance most recently as Business Unit Director for Grocery Prior to Sainsburyrsquos Paul was European Controller at Marks and Spencer Group PLC and a Director at UBS Warburg
Date of appointment May 2014
13
APPENDIX Interim Results 201920 - November 2019
Operating Board
Angie RisleyGroup HR Director
Skills and experienceAngie was appointed Group HR Director and a member of the Operating Board in January 2013 with responsibility for human resources Angie is also a Director of Sainsburyrsquos Bank plc Angie was most recently Non-Executive Director and Chairman of the Remuneration Committee of Serco plc and prior to this was Group HR Director of Lloyds Banking Group and an Executive Director of Whitbread PLC with responsibility for HR and Corporate Social Responsibility Angie is currently Non-Executive Director and Chair of the Remuneration Committee at Smith amp Nephew plc
Date of appointment January 2013
Phil JordanGroup Chief Information Officer
Skills and experiencePhil joined the Board in January 2018 and has brought a fresh globalperspective on technology to the Operating Board in addition to a wealth of experience in digital data and business transformation Prior to joining Sainsburyrsquos Phil had a long and successful track record in telecommunications Most recently he was Global Chief Information Officer at Telefonica overseeing Digital Transformation and Information Technology and prior to that was Chief Information Officer for Vodafone UKIreland Phil has worked as a Non-Executive Advisor on Technology in the Investment amp Retail Banking sector and is currently a Non-Executive Director of TalkTalk Telecom Group PLC and chairs its Cyber-Security Committee
Date of appointment January 2018
Simon RobertsRetail and Operations Director
Skills and experienceSimon joined Sainsburyrsquos and the Operating Board in July 2017 as Central Retail amp Operations Director responsible for Stores Central operation and Logistics In his previous role he was Executive Vice President of Walgreens Boots Alliance and President of Boots with responsibility for commercial and retail operations across the UK and Ireland Prior to Boots Simon was at Marks and Spencer Group PLC where he held operational and customer leadership roles across stores divisions and central operations Simon is also the Non-Executive Chairman at the Institute ofCustomer Service
Date of appointment July 2017
Clodagh MoriartyGroup Chief Digital Officer
Skills and experienceClodagh was appointed Group Chief Digital Officer in June 2018 Clodagh leads the delivery of a consistent and first-rate digital experience for customers across Sainsburyrsquos Argos and Sainsburyrsquos BankClodagh joined Sainsburyrsquos in 2010 from Bain amp Co management consultants where she had gained experience working on a broad range of projects across multiple sectors and countries Following two years as Head of Strategy at Sainsburyrsquosshe moved into Food Commercial as Category Manager for Meal Solutions and then became Head of Online Trading spanning Food General Merchandise and Clothing before being promoted to Director of Online in 2016 In this role Clodagh was instrumental in driving innovation within Groceries Online and launching new initiatives including SmartShop and Chop Chop
Date of appointment June 2018
14
APPENDIX Interim Results 201920 - November 2019
Supplementary financial details
3 Financial calendarQ3 trading statement(15 weeks to 4 January 2020)
Preliminary results(52 weeks to 7 March 2020)
8 January 2020
30 April 2020
1 Weighted average number of shares
The interim dividend datesOrdinary shares
Ex-dividend 14 November 2019Record 15 November 2019Payment 20 December 2019
Product Quality Framework helps us fund investment
PQF cereals case study
BAU savings to offset cost inflation
Strategic cost transformation 5 year plan
Slide Number 43
Financial Services Priorities
Financial Services reshaping the portfolio
Financial Services key targets
Nectar
Slide Number 48
Digital
We will help our customers live well for less
Slide Number 51
Slide Number 52
Guidance for 201920
Retail sales
Sainsburyrsquos sales area and store numbers
Sainsburyrsquos store estate
Sainsburyrsquos investment programme
Retail margin
Group retail
Plc Board
Plc Board
Plc Board
Plc Board
Operating Board
Operating Board
Operating Board
Supplementary financial details
Contacts
Column1
201819
Grocery
19
GM
7
Clothing
1
To resize chart data range drag lower right corner of range
Grocery
GM
Clothing
20 Interim Results 201920 - November 2019
Be competitive
on price
1
Value brand investment
Sainsburyrsquos Meat Fish amp Poultry Value Own Label1
Gains
Losses
Incremental Switching within Sainsburyrsquos
Dec 17 Oct 19
+2Sales
+4Volume
Bread Investing across Own Label Tiers120+ EPP SKUs launched in H1 200 by end 201920
Repackaged and NPD within Premium
New Owned Brand Replacing Basics
NPD within Core+ Responding in Growth Areas
Repackaged Core bySainsburyrsquos
New
New
Improved
Improved
1 Kantar 12 we 6 October 2019 ndash rolling 12 weeks switching within total Market MFP
21 Interim Results 201920 - November 2019
Be competitive
on price
1
Lower prices on key volume lines
In-Store Volume Returns Examples
Chicken Wings 1kg+12 Volume
pound170was pound210
pound050Only
White Pittas x6+15 Volume
Chestnut Mushrooms 250g+45 Volume
pound080Only
1 Pre wave 3 lockdown (started 24th March to 15th June 19) YoY 2 Last 6 weeks since wave 4 lockdown (started 28th August 19) YoY
-4
0
4
8
12
16
-6 -5 -4 -3 -2 -1 0 1 2 3 4 5 6
Change in volumes ()
Pre1 Post2
22 Interim Results 201920 - November 2019
Be competitive
on price
1
We continue to be less dependent on promotions
230 228
207 209
Sainsburyrsquos Promotional Participation
1819 1920 19201819
Morrisons
Sainsburyrsquos
Tesco
Asda
Spend on Deal1
Q1 Q2
1 Source Nielsen 4 weekly data to 21 September 2019
10
20
30
4040
30
20
10Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep
2018 2019
H1 1920
H1 1920 AVERAGE
34 31
22 21
23 Interim Results 201920 - November 2019
Be competitive
on price
1
Improved grocery value
Base Price Index 2
-1
0
1
2
3
Grocery inflation (Kantar)1
-960bps
-550bps
Commodity VI 2
Aug 17 Jan 18 Jun 18 Nov 18 Apr 19 Oct 19
2004 2007 2010 2013 2016 2019
Morrisons
Sainsburyrsquos
Tesco
Asda
Total Market
Mar Apr May Jun Jul Aug Sep Oct2019
1 Kantar City Reads to Oct 20192 Sainsburyrsquos value index based on Brandview SKU matching data to Oct 2019
24 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
25 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Category tier performance
YoY value share change by tier
12 weeks to September 2019
-03
01
-01
-18
52 weeks to March 2019
Branded
PremiumOwn Brand
Branded
StandardOwn Brand
EconomyOwn Brand
02
-08
-04
00PremiumOwn Brand
StandardOwn Brand
EconomyOwn Brand
Source Nielsen Panel Total FMCG Market Universe Total outlets 52wks data to 9 March 2019 and 12wks data to 21 Sept 2019
26 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Premium private label
Taste the Difference re-launch
bull Over 350 products new repackaged or reformulated
bull Premium ready meals growth now outperforming the market
41
25 2419
Sainsburys Morrisons Tesco Asda
Premium Own Label volume share
Source Nielsen Panel Total FMCG 28 weeks data to 21 September 2019 Premium Own Label share of sales by retailer
27 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Distinctive brands
bull 57 of customers have bought Distinctive Brands since launch
bull On track for pound100m incremental sales
bull 37 new brands in H1 across Fresh and Grocery
bull lsquoTaste of the Futurersquo bays launched in 70 stores- 67 incremental sales
Leon
bull 3 year exclusive partnership
bull 14 products launched
28 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Beauty Rollout
bull Now rolled out to over 60 stores- Sales up over 40
bull Customer numbers up 7
bull Spend per customer up 25
bull Beauty range doubled 1200 additional lines
bull Double digit growth differential against the market
29 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Our values make us different
bull Committed to reduce plastic packaging by 50 by 2025
bull First retailer to remove single use plastic produce and bakery bags from our stores
- Launching reusable bags in fruit and veg aisles
bull Investing in our loose produce offer
bull Removed black plastic trays from ready meals
bull Fresh water stands in cafeacutes for customers to refill bottles
UKrsquos first major retailer to make significant commitment to reduce plastic
30 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Argos category and range focus
bull Availability improvement- Argos master range reduced by c30 over 3 years- Eliminating duplication removing low value items- Better availability of key lines in store
bull Rebalancing into higher margin categories- Gaining share in Furniture1
More distinctive rangemore reason to shop at Sainsburyrsquos
Reduced SKU count -20operational efficiencies
Higher cash gross profit +2 YOY
Volumes +8 operational efficiencies
41 Interim Results 201920 - November 2019
Drive efficiency
to invest in the customer
offer
4
BAU savings to offset cost inflation
Manages inflationary pressures
BAU savingsH1 201920
Procurement GNFR
Retail Technology Efficiencies
Retail HRRetail
management structures
Shrink Reduction
42 Interim Results 201920 - November 2019
Drive efficiency
to invest in the customer
offer
4
Strategic cost transformation 5 year plan
Converge Tackle fixed cost
End to end reviews
Retail Operations Marketing and Commercial Operations
Other central support
Logistics and Supply Chain
Project A
Project C
Project D
Shared Services BPO
Property strategy
Project BGNFR procurement
Capital prioritisation
Technology Digital and Corporate Services
pound250-pound350m
pound150-pound250m
pound400-pound600mExecution underway In planning Opportunities identified
pound5bn addressable cost base
43 Interim Results 201920 - November 2019
Grow connected
services
5
44 Interim Results 201920 - November 2019
Grow connected
services
5
Financial Services Priorities
To be the provider of financial services for loyal Sainsburyrsquos and Argos customers
An agile capital and cost efficient provider of simple mobile-led financial services
Vision
Objective
Priorities Reshape Simplify Strengthen
45 Interim Results 201920 - November 2019
Grow connected
services
5
Current Customer Base
Customer Credit Risk Balance Sheet Earnings
Argos Storecards 22m Prime Near Prime
Credit Cards 09m Prime
Personal Loans 05m Prime
Mortgages 9K Exit
Total Lending
Deposits 03m
Insurances 05m Very Low Risk
Travel Money 266 Sites
ATMs 1890
Financial Services reshaping the portfolio
46 Interim Results 201920 - November 2019
Grow connected
services
5
Increase connectivity and value for Group
Stop mortgage acquisition review back book options
No capital input from the Group from now1
Costincome c503 within 5 years
Double UPBT double digit ROCE within 5 years
Upstream cash within 5 years2
Financial Services key targets
Transform the cost base
Improve returns
Financial services cash generative
Reduce risk profile to Group
Stop putting cash in to Financial Services
2
4
6
3
1
5
Focus on Sainsburyrsquos customer base
1 Subject to regulatory changes requirements2 Subject to regulatory approval3 On a Group contribution basis
47 Interim Results 201920 - November 2019
Grow connected
services
5
Nectar
bull Biggest loyalty programme in the UK
bull Over 18 million collectors
bull Most recognised loyalty brand in the UK
bull Launch of Nectar digital- 21 million app users- Increase in overall Nectar participation- Increased levels of personalisation- 138000 new Nectar customers- 1 app on launch weekend
bull Coalition strengthened with addition of Esso in June 2019
48 Interim Results 201920 - November 2019
Provide a seamless customer
experience
6
49 Interim Results 201920 - November 2019
Provide a seamless customer
experience
6
Digital
bull Groceries Online sales penetration of 8- App accounts for over 20 of orders
bull 21 million digital Nectar app users
bull 14 million Argos Financial Services app downloads
bull Smartshop rollout in over 350 stores
Groceries online
Chop Chop
SmartShop
Universaldiscovery
Seamlessfinancialservices
Singlebasket
50 Interim Results 201920 - November 2019
We will help our customers live well for less
Confident in the core Integrated customer offer
One multi brand multi channel business
Strong cash generation supporting investment dividend and allowing deleverage
Financial flexibility and resilience
Sustainable cost reduction covering cost inflation and funding investment in our competitive offer
QampA
APPENDIX Interim Results 201920 - November 2019
Appendices
APPENDIX Interim Results 201920 - November 2019
Guidance for 201920
1
Spacebull Expect to open 2 new Sainsburyrsquos supermarkets and up to 15 convenience storesbull Expect to open around 25 Argos stores in Sainsburyrsquos (of which 11 are
relocations) resulting in around 305 Argos stores in supermarketsbull Expect to close 2 supermarkets around 25 convenience stores and around 20
Argos stores in FY201920 as part of announced property closure programme of 10-15 supermarkets 30-40 convenience stores and 60-70 Argos stores
Financial Servicesbull Financial services underlying operating profit expected to be cpound45m including a
cpound10m benefit as a result of a change in transfer pricing between Argos and Argos Financial Services
bull Financial Services non-underlying costs are expected to be around pound30mbull No further capital injections into the Bank are expected following pound35m in H1 201920
Depreciation and amortisationbull Expect underlying retail depreciation and amortisation of around pound12bn
including cpound500m right of use asset depreciation
CostsOperating cost inflationbull Cost inflation between 2 and 3Cost savingsbull Continue to deliver cost savings to at least offset the impact of cost inflation
Finance costsbull Net finance costs of around pound405m including pound320m lease interest in
201920 following the introduction of IFRS 16
One-off itemsbull In 201920 cash outflows as a result of items excluded from
underlying results should not exceed pound100mbull Property strategy programme one-off costs expected to be
pound230m-pound270m of which cash costs are pound30-40m
Dividendbull Sainsburyrsquos plans to change the full year dividend policy to 19x cover by
underlying earnings (versus 20x previously) to offset the dilutive (non cash) impact of IFRS 16 on underlying earnings
Capital expenditurebull Retail capital expenditure to be around pound550mbull Retail capital expenditure is expected to be around pound550m-pound600m per
annum over the medium term
Net debtbull Net debt before fair value movements on derivatives to reduce by at
least pound300m
Tax ratebull Underlying tax rate to be between 25 and 26
APPENDIX Interim Results 201920 - November 2019
Retail sales
1 Sales including VAT excluding fuel
LFL sales growth1
(10)
Sales from net new space1
04
Total sales growth1
(06)
Supermarkets2
(07)
Convenience20
Groceries Online
70
Channels
(01)(25)
(12)
2 Supermarket sales include Argos SiS sales FY 1819 16
pound139bn
pound103bnGrocery
pound30bnGeneralMerchandise
pound488mClothing
2
Chart1
201819
194
66
1
Sheet1
APPENDIX Interim Results 201920 - November 2019
Sainsburyrsquos sales area and store numbersAs at 21 September 2019
Sainsburyrsquos store estateAs at 21 September 2019
Sq ftsales area
82446
870
40001 to60000
20001 to40000
10000 to20000
Under10000 Total
Over60000
0122122
0197197
0175175
06767
824607
1431
Argos storesArgos in SainsburyrsquosArgos in HomebaseOtherArgos total store numbers
Habitat1
Collection points
594281
8-
883
16317
As at21 Sept 2019
Disposalsclosures
Newstores
As at9 March 2019
17--8
-1
(7)-
(2)-
(9)
-(36)
588288
6-
88216
282
ConvenienceSupermarketsTotal stores
Number of stores
Sq ftsales area
1929350
2279
40001 to60000
20001 to40000
10000 to20000
Under10000 Total
Over60000
-18441844
-58185818
-85018501
-46604660
19292117323102
ConvenienceSupermarketsTotal stores
Space by store size (lsquo000 sq ft)
Argos and Habitat store numbers
1 5 Habitat stores 11 Habitat stores in Sainsburys
4
APPENDIX Interim Results 201920 - November 2019
ClosureBitterne West
Sainsburyrsquos investment programme201920
Q1
Supermarkets ConvenienceNew storesMilton Keynes Brooklands District CentBromley High StLeeds Wike Ridge LaneSalford Harbour CityCanterbury High St
ReplacementMayfair Stratton St
ClosuresMayfairWarren St
Q1Q1Q1Q2Q2
Q2
Q1Q2
5
APPENDIX Interim Results 201920 - November 2019
Retail margin
Retail sales (inc VAT inc fuel)(exc VAT inc fuel)
Retail underlying EBITDAR1
Retail underlying EBITDAR margin 2
at constant fuel pricesRetail underlying operating profit3
Retail underlying operating margin 4
at constant fuel prices
1656714808
10677272
4373030
1661214856
11147575
4873333
030342
30 bps28 bps10333 bps32 bps
1 Retail underlying operating profit before net rental income of pound6 million and underlying depreciation and amortisation of pound636 million2 Retail underlying EBITDAR divided by underlying retail sales excluding VAT3 Retail underlying earnings before interest tax and Sainsburyrsquos underlying share of post-tax profit from joint ventures4 Retail underlying operating profit divided by underlying retail sales excluding VAT
poundm H1201920
H1201819
Change
6
APPENDIX Interim Results 201920 - November 2019
H1201920
H1201819
Group retail
Return on capital employed 1
Net debt to EBITDAR (times)23
Fixed charge cover (times)2
Underlying tax rate Core retail capex sales5
713126
26515
743326
25715
poundm
1 ROCE Return is defined as a 52 week rolling underlying profit before interest and tax Capital employed is defined as group net assets2 Net debt of pound6778 million includes lease obligations under IFRS 16 and perpetual securities treated as debt divided by Group underlying EBITDAR of pound2171 million calculated for a 52-week period to 21 September 20193 Group underlying EBITDAR divided by rent (both capital and interest) and net finance costs where interest on perpetual securities is treated as an underlying finance costs4 52 weeks to 22nd September 2018 is not available due to the implementation of IFRS 16 Comparatives therefore reflect the 52 weeks to 9th March 20195 Includes retail sales inc vat inc fuel
4
4
7
APPENDIX Interim Results 201920 - November 2019
Plc Board
Kevin OrsquoByrneChief Financial Officer
Mike Coupe Group Chief Executive
Dame Susan Rice Senior Independent Director
Matt BrittinNon-Executive Director
Jo HarlowNon-Executive Director
Brian CassinNon-Executive Director
David KeensNon-Executive Director
Jean Tomlin Non-Executive Director
Martin Scicluna Chairman
8
APPENDIX Interim Results 201920 - November 2019
Plc Board
Mike Coupe Group Chief Executive Officer
Skills and experienceAppointed Group Chief Executive Officer on 9 July 2014 Mike has been a member of the Operating Board since October 2004 Mike has vast retail industry experience in trading strategy marketing digital and online as well as multi-site store experience He joined Sainsburyrsquos from Big Food Group where he was a board director of Big Food Group PLC and Managing Director of Iceland Food Stores He previously worked for both Asda and Tesco PLC where he served in a variety of senior management roles
Date of appointment 1 August 2007Mike has served as an Executive Director since 1 August 2007 and as Chief Executive Officer since 9 July 2014
Committee membershipCorporate Responsibility and Sustainability Committee
Kevin OrsquoByrne Chief Financial Officer
Skills and experienceKevin brings to the Board a wealth of retail and finance experience Kevin was previously Chief Executive Officer of Poundland Group Limited until December 2016 and held executive roles at Kingfisher plc from 2008 to 2015 including Divisional Director UK China and Turkey Chief Executive Officer of BampQ UK amp Ireland and Group Finance Director He was previously Group Finance Director of Dixons Retail plc and European Finance Director of Quaker Oats He was a Non-Executive Director of Land Securities Group PLC from 2008 to September 2017 where he was Chairman of the Audit Committee and Senior Independent Director
Date of appointment 9 January 2017
Other current rolesNon-Executive Director of Greene King plc
Skills and experienceMartin brings a breadth of experience and leadership in both executive and non-executive roles His previous roles include positions as the Chairman of Great Portland Estates plc Senior Independent Director and Chair of the Audit Committee of Worldpay Inc and Non-Executive Director and Chair of the Audit Committee of Lloyds Banking Group plc He was a partner at Deloitte LLP for 26 years serving as Chairman from 1995 to 2007 where his clients included Dixons WH Smith Alliance Unichem and Cadburyrsquos
Other current rolesChairman of RSA Insurance Group plc
Martin Scicluna Chairman
Date of appointment 1 November 2018 Martin joined the Board as Chairman Designate and Non-Executive Director on 1 November 2018 He was appointed as Chairman of the Board on 10 March 2019
Committee membershipChair of the Nomination Committee
Dame Susan Rice Senior Independent Director
Skills and experienceSusan has extensive experience as a Non-Executive Director as well as in retail banking financial services leadership and sustainability Her career in retail bankingis particularly relevant to our ownership ofSainsburyrsquos Bank Previously Susan was a member of the First Ministerrsquos Council of Economic Advisors Managing Director of Lloyds Banking Group Scotland and was previously Chief Executive and then Chairman of Lloyds TSB Scotland plc She has also held a range of other non-executive directorships including at the Bank of England and SSE plc
Committee membershipChair of the Remuneration Committee and a member of the Nomination Committee
Date of appointment 1 June 2013
Other current rolesChair of Scottish Water and Business Stream Chair of the Scottish Fiscal Commission Non-Executive Director of the North American Income Trust C Hoare and Co and Senior Independent Director of the North American Income Trust
9
Other current rolesNon-Executive Director and Chairman of the Audit Committee of Centrica plc
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jean Tomlin Non-Executive Director
Skills and experienceJean has extensive experience and breadth of skills in human resources and corporate responsibility Jean was formerly Director of HR Workforce and Accreditation for The London OrganisingCommittee of the Olympic and Paralympic Games where she set the strategic direction to ensure the mobilisation of the combined 200000-strong workforce including paid staff volunteers and contractors which represented the recruitment and mobilisation of the largest peacetime workforce and set the industry standard for volunteering with the highly acclaimed Games She was previously Group HR Director at Marks and Spencer Group Plc HR Director and founder member of Egg plc and Sales amp Operations Director of Prudential Direct
Date of appointment 1 January 2013
Committee membershipAudit Committee Corporate Responsibility and Sustainability Committee and Nomination Committee
David Keens Non-Executive Director
Skills and experienceDavid has extensive retail experience and knowledge of consumer facing businesses together with his core skills in finance David was formerly Group Finance Director of next plc from 1991 to 2015 and their Group Treasurer from 1986 to 1991 Previous management experience includes nine years in the UK and overseas operations of multinational food manufacturer Nabisco and prior to that seven years in the accountancy profession
Date of appointment 29 April 2015
Committee membershipChair of the Audit Committee and a member of the Nomination Committee
Other current rolesIndependent Board member of Capri Holdings Limited Non-Executive Director of Hakluyt and Chief Executive Officer of Chanzo Limited
Other current rolesNon-Executive Director Senior Independent Director and Chair of the Audit Committee of Auto Trader Group plc
Matt BrittinNon-Executive Director
Skills and experienceMatt has extensive experience of running a high profile fast moving innovative digital business Since 2015 he has been responsible for Googlersquos business and operations in Europe the Middle East and Africa and hersquos been in leadership roles at Google since 2007 Prior to that Matt spent much of his career in media and marketing with particular interests in strategy commercial development and sales performance This included commercial and digital leadership roles in UK media
Date of appointment 27 January 2011
Committee membershipNomination Committee and Remuneration Committee
Other current rolesGooglersquos President ndash Europe Middle East and Africa and Director of The Media Trust
Brian Cassin Non-Executive Director
Skills and experienceBrian brings present day experience of running a FTSE40 group and of big data and analytics ndash topics of key importance to Sainsburyrsquos Brian joined Experian plc as Chief Financial Officer in April 2012 a post he held until his appointment as Chief Executive Officer in July 2014 Prior to this Brian spent his career in investment banking at Greenhill amp Co where he was Managing Director and Partner Brian has also held various roles at Baring Brothers International and at the London Stock Exchange
Date of appointment 1 April 2016
Committee membershipAudit Committee and Nomination Committee
Other current rolesChief Executive Officer of Experian plc
10
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jo Harlow Non-Executive Director
Skills and experienceJo brings a wealth of experience in consumer-facing businesses and in the telecoms and technology industry bothin the UK and internationally Jo spent 12 years in a variety of senior management roles with Nokia and Microsoft Prior to this she spent eight years at PampG and 11 years at Reebok in senior sales and marketing positions in both Europe and the US
Date of appointment 11 September 2017
Committee membershipChair of the Corporate Responsibility and Sustainability Committee and member of the Nomination Committee and Remuneration Committee
Life PresidentLord Sainsbury of Preston Candover KG
Other current rolesNon-Executive Director of InterContinental Hotels plc Non-Executive Director of Halmaplc and Member of the Supervisory Board of Ceconomy AG
11
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief Executive
Tim FallowfieldCompany Secretary amp Corporate Services Director
Kevin OrsquoByrne Chief Financial Officer
Jim BrownChief Executive Officer of Sainsburyrsquos Bank
Paul Mills-HicksFood Commercial Director
Angie RisleyGroup HR Director
Phil JordanGroup Chief InformationOfficer
Simon RobertsRetail and Operations Director
Clo MoriartyGroup Chief Digital Officer
12
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief ExecutiveSee Appendix page 9
Kevin OrsquoByrneChief Financial OfficerSee Appendix page 9
Tim FallowfieldCompany Secretary amp Corporate Services Director
Date of appointment September 2004
Skills and experienceTim joined Sainsburyrsquos in 2001 as Company Secretary and joined the Operating Board in September 2004 In addition to his role as Company Secretary Tim is responsible for the Corporate Services Division comprising Legal Services Data Governance Safety Shareholder Services Insurance and Central Security He chairs the Group Safety Committee and the Data Governance Committee Tim joined Sainsburyrsquos from Exelplc the global logistics company now part of DHL where he was Company Secretary and General Counsel He began his career at the international law firm Clifford Chance and is a qualified solicitor Tim is Chairman of the Disability Confident Business Leaders Group which works with Government in shaping the disability employment agenda and in raising awareness of the benefits of employing disabled people
Jim BrownCEO of Sainsburyrsquos Bank
Skills and experienceJim joined Sainsburyrsquos Bank as CEO in June 2019 and is also a member of the Sainsburyrsquos Group Operating Board He has held a number of senior international Financial Services roles - most recently for RBS in the UK as CEO of Williams and Glyn and prior to that CEO of Ulster Bank in Northern Ireland and the Republic of Ireland Before moving to Ireland he was based in Hong Kong and was CEO Retail and Commercial Banking Asia and the Middle East for RBS and ABN AMRO He has also been a member of the RBS Group Management Committee ABN AMRO Executive Group ABN AMRO Global Consumer Leadership Team and the RBSBank of China Joint Steering Committee Earlier in his career he held a number of senior executive roles for Citibank in Asia and Australia and New Zealand Jim has also held various Board positions including at Ulster Bank Saudi Hollandi Bank The Royal Bank of Scotland (China) Co Ltd and RBS (Pakistan) Ltd He is also a past President of the Institute of Banking in Ireland He is currently a Certified Bank Director
Date of appointment August 2019
Paul Mills-HicksFood Commercial Director
Skills and experiencePaul joined the Operating Board in May 2014 as Food Commercial Director having spent over ten years at Sainsburyrsquos He was closely involved in the formation and execution of the lsquoMaking Sainsburyrsquos Great Againrsquo strategy Following this he held a variety of roles in commercial strategy and finance most recently as Business Unit Director for Grocery Prior to Sainsburyrsquos Paul was European Controller at Marks and Spencer Group PLC and a Director at UBS Warburg
Date of appointment May 2014
13
APPENDIX Interim Results 201920 - November 2019
Operating Board
Angie RisleyGroup HR Director
Skills and experienceAngie was appointed Group HR Director and a member of the Operating Board in January 2013 with responsibility for human resources Angie is also a Director of Sainsburyrsquos Bank plc Angie was most recently Non-Executive Director and Chairman of the Remuneration Committee of Serco plc and prior to this was Group HR Director of Lloyds Banking Group and an Executive Director of Whitbread PLC with responsibility for HR and Corporate Social Responsibility Angie is currently Non-Executive Director and Chair of the Remuneration Committee at Smith amp Nephew plc
Date of appointment January 2013
Phil JordanGroup Chief Information Officer
Skills and experiencePhil joined the Board in January 2018 and has brought a fresh globalperspective on technology to the Operating Board in addition to a wealth of experience in digital data and business transformation Prior to joining Sainsburyrsquos Phil had a long and successful track record in telecommunications Most recently he was Global Chief Information Officer at Telefonica overseeing Digital Transformation and Information Technology and prior to that was Chief Information Officer for Vodafone UKIreland Phil has worked as a Non-Executive Advisor on Technology in the Investment amp Retail Banking sector and is currently a Non-Executive Director of TalkTalk Telecom Group PLC and chairs its Cyber-Security Committee
Date of appointment January 2018
Simon RobertsRetail and Operations Director
Skills and experienceSimon joined Sainsburyrsquos and the Operating Board in July 2017 as Central Retail amp Operations Director responsible for Stores Central operation and Logistics In his previous role he was Executive Vice President of Walgreens Boots Alliance and President of Boots with responsibility for commercial and retail operations across the UK and Ireland Prior to Boots Simon was at Marks and Spencer Group PLC where he held operational and customer leadership roles across stores divisions and central operations Simon is also the Non-Executive Chairman at the Institute ofCustomer Service
Date of appointment July 2017
Clodagh MoriartyGroup Chief Digital Officer
Skills and experienceClodagh was appointed Group Chief Digital Officer in June 2018 Clodagh leads the delivery of a consistent and first-rate digital experience for customers across Sainsburyrsquos Argos and Sainsburyrsquos BankClodagh joined Sainsburyrsquos in 2010 from Bain amp Co management consultants where she had gained experience working on a broad range of projects across multiple sectors and countries Following two years as Head of Strategy at Sainsburyrsquosshe moved into Food Commercial as Category Manager for Meal Solutions and then became Head of Online Trading spanning Food General Merchandise and Clothing before being promoted to Director of Online in 2016 In this role Clodagh was instrumental in driving innovation within Groceries Online and launching new initiatives including SmartShop and Chop Chop
Date of appointment June 2018
14
APPENDIX Interim Results 201920 - November 2019
Supplementary financial details
3 Financial calendarQ3 trading statement(15 weeks to 4 January 2020)
Preliminary results(52 weeks to 7 March 2020)
8 January 2020
30 April 2020
1 Weighted average number of shares
The interim dividend datesOrdinary shares
Ex-dividend 14 November 2019Record 15 November 2019Payment 20 December 2019
Product Quality Framework helps us fund investment
PQF cereals case study
BAU savings to offset cost inflation
Strategic cost transformation 5 year plan
Slide Number 43
Financial Services Priorities
Financial Services reshaping the portfolio
Financial Services key targets
Nectar
Slide Number 48
Digital
We will help our customers live well for less
Slide Number 51
Slide Number 52
Guidance for 201920
Retail sales
Sainsburyrsquos sales area and store numbers
Sainsburyrsquos store estate
Sainsburyrsquos investment programme
Retail margin
Group retail
Plc Board
Plc Board
Plc Board
Plc Board
Operating Board
Operating Board
Operating Board
Supplementary financial details
Contacts
Column1
201819
Grocery
19
GM
7
Clothing
1
To resize chart data range drag lower right corner of range
Grocery
GM
Clothing
21 Interim Results 201920 - November 2019
Be competitive
on price
1
Lower prices on key volume lines
In-Store Volume Returns Examples
Chicken Wings 1kg+12 Volume
pound170was pound210
pound050Only
White Pittas x6+15 Volume
Chestnut Mushrooms 250g+45 Volume
pound080Only
1 Pre wave 3 lockdown (started 24th March to 15th June 19) YoY 2 Last 6 weeks since wave 4 lockdown (started 28th August 19) YoY
-4
0
4
8
12
16
-6 -5 -4 -3 -2 -1 0 1 2 3 4 5 6
Change in volumes ()
Pre1 Post2
22 Interim Results 201920 - November 2019
Be competitive
on price
1
We continue to be less dependent on promotions
230 228
207 209
Sainsburyrsquos Promotional Participation
1819 1920 19201819
Morrisons
Sainsburyrsquos
Tesco
Asda
Spend on Deal1
Q1 Q2
1 Source Nielsen 4 weekly data to 21 September 2019
10
20
30
4040
30
20
10Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep
2018 2019
H1 1920
H1 1920 AVERAGE
34 31
22 21
23 Interim Results 201920 - November 2019
Be competitive
on price
1
Improved grocery value
Base Price Index 2
-1
0
1
2
3
Grocery inflation (Kantar)1
-960bps
-550bps
Commodity VI 2
Aug 17 Jan 18 Jun 18 Nov 18 Apr 19 Oct 19
2004 2007 2010 2013 2016 2019
Morrisons
Sainsburyrsquos
Tesco
Asda
Total Market
Mar Apr May Jun Jul Aug Sep Oct2019
1 Kantar City Reads to Oct 20192 Sainsburyrsquos value index based on Brandview SKU matching data to Oct 2019
24 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
25 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Category tier performance
YoY value share change by tier
12 weeks to September 2019
-03
01
-01
-18
52 weeks to March 2019
Branded
PremiumOwn Brand
Branded
StandardOwn Brand
EconomyOwn Brand
02
-08
-04
00PremiumOwn Brand
StandardOwn Brand
EconomyOwn Brand
Source Nielsen Panel Total FMCG Market Universe Total outlets 52wks data to 9 March 2019 and 12wks data to 21 Sept 2019
26 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Premium private label
Taste the Difference re-launch
bull Over 350 products new repackaged or reformulated
bull Premium ready meals growth now outperforming the market
41
25 2419
Sainsburys Morrisons Tesco Asda
Premium Own Label volume share
Source Nielsen Panel Total FMCG 28 weeks data to 21 September 2019 Premium Own Label share of sales by retailer
27 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Distinctive brands
bull 57 of customers have bought Distinctive Brands since launch
bull On track for pound100m incremental sales
bull 37 new brands in H1 across Fresh and Grocery
bull lsquoTaste of the Futurersquo bays launched in 70 stores- 67 incremental sales
Leon
bull 3 year exclusive partnership
bull 14 products launched
28 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Beauty Rollout
bull Now rolled out to over 60 stores- Sales up over 40
bull Customer numbers up 7
bull Spend per customer up 25
bull Beauty range doubled 1200 additional lines
bull Double digit growth differential against the market
29 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Our values make us different
bull Committed to reduce plastic packaging by 50 by 2025
bull First retailer to remove single use plastic produce and bakery bags from our stores
- Launching reusable bags in fruit and veg aisles
bull Investing in our loose produce offer
bull Removed black plastic trays from ready meals
bull Fresh water stands in cafeacutes for customers to refill bottles
UKrsquos first major retailer to make significant commitment to reduce plastic
30 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Argos category and range focus
bull Availability improvement- Argos master range reduced by c30 over 3 years- Eliminating duplication removing low value items- Better availability of key lines in store
bull Rebalancing into higher margin categories- Gaining share in Furniture1
More distinctive rangemore reason to shop at Sainsburyrsquos
Reduced SKU count -20operational efficiencies
Higher cash gross profit +2 YOY
Volumes +8 operational efficiencies
41 Interim Results 201920 - November 2019
Drive efficiency
to invest in the customer
offer
4
BAU savings to offset cost inflation
Manages inflationary pressures
BAU savingsH1 201920
Procurement GNFR
Retail Technology Efficiencies
Retail HRRetail
management structures
Shrink Reduction
42 Interim Results 201920 - November 2019
Drive efficiency
to invest in the customer
offer
4
Strategic cost transformation 5 year plan
Converge Tackle fixed cost
End to end reviews
Retail Operations Marketing and Commercial Operations
Other central support
Logistics and Supply Chain
Project A
Project C
Project D
Shared Services BPO
Property strategy
Project BGNFR procurement
Capital prioritisation
Technology Digital and Corporate Services
pound250-pound350m
pound150-pound250m
pound400-pound600mExecution underway In planning Opportunities identified
pound5bn addressable cost base
43 Interim Results 201920 - November 2019
Grow connected
services
5
44 Interim Results 201920 - November 2019
Grow connected
services
5
Financial Services Priorities
To be the provider of financial services for loyal Sainsburyrsquos and Argos customers
An agile capital and cost efficient provider of simple mobile-led financial services
Vision
Objective
Priorities Reshape Simplify Strengthen
45 Interim Results 201920 - November 2019
Grow connected
services
5
Current Customer Base
Customer Credit Risk Balance Sheet Earnings
Argos Storecards 22m Prime Near Prime
Credit Cards 09m Prime
Personal Loans 05m Prime
Mortgages 9K Exit
Total Lending
Deposits 03m
Insurances 05m Very Low Risk
Travel Money 266 Sites
ATMs 1890
Financial Services reshaping the portfolio
46 Interim Results 201920 - November 2019
Grow connected
services
5
Increase connectivity and value for Group
Stop mortgage acquisition review back book options
No capital input from the Group from now1
Costincome c503 within 5 years
Double UPBT double digit ROCE within 5 years
Upstream cash within 5 years2
Financial Services key targets
Transform the cost base
Improve returns
Financial services cash generative
Reduce risk profile to Group
Stop putting cash in to Financial Services
2
4
6
3
1
5
Focus on Sainsburyrsquos customer base
1 Subject to regulatory changes requirements2 Subject to regulatory approval3 On a Group contribution basis
47 Interim Results 201920 - November 2019
Grow connected
services
5
Nectar
bull Biggest loyalty programme in the UK
bull Over 18 million collectors
bull Most recognised loyalty brand in the UK
bull Launch of Nectar digital- 21 million app users- Increase in overall Nectar participation- Increased levels of personalisation- 138000 new Nectar customers- 1 app on launch weekend
bull Coalition strengthened with addition of Esso in June 2019
48 Interim Results 201920 - November 2019
Provide a seamless customer
experience
6
49 Interim Results 201920 - November 2019
Provide a seamless customer
experience
6
Digital
bull Groceries Online sales penetration of 8- App accounts for over 20 of orders
bull 21 million digital Nectar app users
bull 14 million Argos Financial Services app downloads
bull Smartshop rollout in over 350 stores
Groceries online
Chop Chop
SmartShop
Universaldiscovery
Seamlessfinancialservices
Singlebasket
50 Interim Results 201920 - November 2019
We will help our customers live well for less
Confident in the core Integrated customer offer
One multi brand multi channel business
Strong cash generation supporting investment dividend and allowing deleverage
Financial flexibility and resilience
Sustainable cost reduction covering cost inflation and funding investment in our competitive offer
QampA
APPENDIX Interim Results 201920 - November 2019
Appendices
APPENDIX Interim Results 201920 - November 2019
Guidance for 201920
1
Spacebull Expect to open 2 new Sainsburyrsquos supermarkets and up to 15 convenience storesbull Expect to open around 25 Argos stores in Sainsburyrsquos (of which 11 are
relocations) resulting in around 305 Argos stores in supermarketsbull Expect to close 2 supermarkets around 25 convenience stores and around 20
Argos stores in FY201920 as part of announced property closure programme of 10-15 supermarkets 30-40 convenience stores and 60-70 Argos stores
Financial Servicesbull Financial services underlying operating profit expected to be cpound45m including a
cpound10m benefit as a result of a change in transfer pricing between Argos and Argos Financial Services
bull Financial Services non-underlying costs are expected to be around pound30mbull No further capital injections into the Bank are expected following pound35m in H1 201920
Depreciation and amortisationbull Expect underlying retail depreciation and amortisation of around pound12bn
including cpound500m right of use asset depreciation
CostsOperating cost inflationbull Cost inflation between 2 and 3Cost savingsbull Continue to deliver cost savings to at least offset the impact of cost inflation
Finance costsbull Net finance costs of around pound405m including pound320m lease interest in
201920 following the introduction of IFRS 16
One-off itemsbull In 201920 cash outflows as a result of items excluded from
underlying results should not exceed pound100mbull Property strategy programme one-off costs expected to be
pound230m-pound270m of which cash costs are pound30-40m
Dividendbull Sainsburyrsquos plans to change the full year dividend policy to 19x cover by
underlying earnings (versus 20x previously) to offset the dilutive (non cash) impact of IFRS 16 on underlying earnings
Capital expenditurebull Retail capital expenditure to be around pound550mbull Retail capital expenditure is expected to be around pound550m-pound600m per
annum over the medium term
Net debtbull Net debt before fair value movements on derivatives to reduce by at
least pound300m
Tax ratebull Underlying tax rate to be between 25 and 26
APPENDIX Interim Results 201920 - November 2019
Retail sales
1 Sales including VAT excluding fuel
LFL sales growth1
(10)
Sales from net new space1
04
Total sales growth1
(06)
Supermarkets2
(07)
Convenience20
Groceries Online
70
Channels
(01)(25)
(12)
2 Supermarket sales include Argos SiS sales FY 1819 16
pound139bn
pound103bnGrocery
pound30bnGeneralMerchandise
pound488mClothing
2
Chart1
201819
194
66
1
Sheet1
APPENDIX Interim Results 201920 - November 2019
Sainsburyrsquos sales area and store numbersAs at 21 September 2019
Sainsburyrsquos store estateAs at 21 September 2019
Sq ftsales area
82446
870
40001 to60000
20001 to40000
10000 to20000
Under10000 Total
Over60000
0122122
0197197
0175175
06767
824607
1431
Argos storesArgos in SainsburyrsquosArgos in HomebaseOtherArgos total store numbers
Habitat1
Collection points
594281
8-
883
16317
As at21 Sept 2019
Disposalsclosures
Newstores
As at9 March 2019
17--8
-1
(7)-
(2)-
(9)
-(36)
588288
6-
88216
282
ConvenienceSupermarketsTotal stores
Number of stores
Sq ftsales area
1929350
2279
40001 to60000
20001 to40000
10000 to20000
Under10000 Total
Over60000
-18441844
-58185818
-85018501
-46604660
19292117323102
ConvenienceSupermarketsTotal stores
Space by store size (lsquo000 sq ft)
Argos and Habitat store numbers
1 5 Habitat stores 11 Habitat stores in Sainsburys
4
APPENDIX Interim Results 201920 - November 2019
ClosureBitterne West
Sainsburyrsquos investment programme201920
Q1
Supermarkets ConvenienceNew storesMilton Keynes Brooklands District CentBromley High StLeeds Wike Ridge LaneSalford Harbour CityCanterbury High St
ReplacementMayfair Stratton St
ClosuresMayfairWarren St
Q1Q1Q1Q2Q2
Q2
Q1Q2
5
APPENDIX Interim Results 201920 - November 2019
Retail margin
Retail sales (inc VAT inc fuel)(exc VAT inc fuel)
Retail underlying EBITDAR1
Retail underlying EBITDAR margin 2
at constant fuel pricesRetail underlying operating profit3
Retail underlying operating margin 4
at constant fuel prices
1656714808
10677272
4373030
1661214856
11147575
4873333
030342
30 bps28 bps10333 bps32 bps
1 Retail underlying operating profit before net rental income of pound6 million and underlying depreciation and amortisation of pound636 million2 Retail underlying EBITDAR divided by underlying retail sales excluding VAT3 Retail underlying earnings before interest tax and Sainsburyrsquos underlying share of post-tax profit from joint ventures4 Retail underlying operating profit divided by underlying retail sales excluding VAT
poundm H1201920
H1201819
Change
6
APPENDIX Interim Results 201920 - November 2019
H1201920
H1201819
Group retail
Return on capital employed 1
Net debt to EBITDAR (times)23
Fixed charge cover (times)2
Underlying tax rate Core retail capex sales5
713126
26515
743326
25715
poundm
1 ROCE Return is defined as a 52 week rolling underlying profit before interest and tax Capital employed is defined as group net assets2 Net debt of pound6778 million includes lease obligations under IFRS 16 and perpetual securities treated as debt divided by Group underlying EBITDAR of pound2171 million calculated for a 52-week period to 21 September 20193 Group underlying EBITDAR divided by rent (both capital and interest) and net finance costs where interest on perpetual securities is treated as an underlying finance costs4 52 weeks to 22nd September 2018 is not available due to the implementation of IFRS 16 Comparatives therefore reflect the 52 weeks to 9th March 20195 Includes retail sales inc vat inc fuel
4
4
7
APPENDIX Interim Results 201920 - November 2019
Plc Board
Kevin OrsquoByrneChief Financial Officer
Mike Coupe Group Chief Executive
Dame Susan Rice Senior Independent Director
Matt BrittinNon-Executive Director
Jo HarlowNon-Executive Director
Brian CassinNon-Executive Director
David KeensNon-Executive Director
Jean Tomlin Non-Executive Director
Martin Scicluna Chairman
8
APPENDIX Interim Results 201920 - November 2019
Plc Board
Mike Coupe Group Chief Executive Officer
Skills and experienceAppointed Group Chief Executive Officer on 9 July 2014 Mike has been a member of the Operating Board since October 2004 Mike has vast retail industry experience in trading strategy marketing digital and online as well as multi-site store experience He joined Sainsburyrsquos from Big Food Group where he was a board director of Big Food Group PLC and Managing Director of Iceland Food Stores He previously worked for both Asda and Tesco PLC where he served in a variety of senior management roles
Date of appointment 1 August 2007Mike has served as an Executive Director since 1 August 2007 and as Chief Executive Officer since 9 July 2014
Committee membershipCorporate Responsibility and Sustainability Committee
Kevin OrsquoByrne Chief Financial Officer
Skills and experienceKevin brings to the Board a wealth of retail and finance experience Kevin was previously Chief Executive Officer of Poundland Group Limited until December 2016 and held executive roles at Kingfisher plc from 2008 to 2015 including Divisional Director UK China and Turkey Chief Executive Officer of BampQ UK amp Ireland and Group Finance Director He was previously Group Finance Director of Dixons Retail plc and European Finance Director of Quaker Oats He was a Non-Executive Director of Land Securities Group PLC from 2008 to September 2017 where he was Chairman of the Audit Committee and Senior Independent Director
Date of appointment 9 January 2017
Other current rolesNon-Executive Director of Greene King plc
Skills and experienceMartin brings a breadth of experience and leadership in both executive and non-executive roles His previous roles include positions as the Chairman of Great Portland Estates plc Senior Independent Director and Chair of the Audit Committee of Worldpay Inc and Non-Executive Director and Chair of the Audit Committee of Lloyds Banking Group plc He was a partner at Deloitte LLP for 26 years serving as Chairman from 1995 to 2007 where his clients included Dixons WH Smith Alliance Unichem and Cadburyrsquos
Other current rolesChairman of RSA Insurance Group plc
Martin Scicluna Chairman
Date of appointment 1 November 2018 Martin joined the Board as Chairman Designate and Non-Executive Director on 1 November 2018 He was appointed as Chairman of the Board on 10 March 2019
Committee membershipChair of the Nomination Committee
Dame Susan Rice Senior Independent Director
Skills and experienceSusan has extensive experience as a Non-Executive Director as well as in retail banking financial services leadership and sustainability Her career in retail bankingis particularly relevant to our ownership ofSainsburyrsquos Bank Previously Susan was a member of the First Ministerrsquos Council of Economic Advisors Managing Director of Lloyds Banking Group Scotland and was previously Chief Executive and then Chairman of Lloyds TSB Scotland plc She has also held a range of other non-executive directorships including at the Bank of England and SSE plc
Committee membershipChair of the Remuneration Committee and a member of the Nomination Committee
Date of appointment 1 June 2013
Other current rolesChair of Scottish Water and Business Stream Chair of the Scottish Fiscal Commission Non-Executive Director of the North American Income Trust C Hoare and Co and Senior Independent Director of the North American Income Trust
9
Other current rolesNon-Executive Director and Chairman of the Audit Committee of Centrica plc
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jean Tomlin Non-Executive Director
Skills and experienceJean has extensive experience and breadth of skills in human resources and corporate responsibility Jean was formerly Director of HR Workforce and Accreditation for The London OrganisingCommittee of the Olympic and Paralympic Games where she set the strategic direction to ensure the mobilisation of the combined 200000-strong workforce including paid staff volunteers and contractors which represented the recruitment and mobilisation of the largest peacetime workforce and set the industry standard for volunteering with the highly acclaimed Games She was previously Group HR Director at Marks and Spencer Group Plc HR Director and founder member of Egg plc and Sales amp Operations Director of Prudential Direct
Date of appointment 1 January 2013
Committee membershipAudit Committee Corporate Responsibility and Sustainability Committee and Nomination Committee
David Keens Non-Executive Director
Skills and experienceDavid has extensive retail experience and knowledge of consumer facing businesses together with his core skills in finance David was formerly Group Finance Director of next plc from 1991 to 2015 and their Group Treasurer from 1986 to 1991 Previous management experience includes nine years in the UK and overseas operations of multinational food manufacturer Nabisco and prior to that seven years in the accountancy profession
Date of appointment 29 April 2015
Committee membershipChair of the Audit Committee and a member of the Nomination Committee
Other current rolesIndependent Board member of Capri Holdings Limited Non-Executive Director of Hakluyt and Chief Executive Officer of Chanzo Limited
Other current rolesNon-Executive Director Senior Independent Director and Chair of the Audit Committee of Auto Trader Group plc
Matt BrittinNon-Executive Director
Skills and experienceMatt has extensive experience of running a high profile fast moving innovative digital business Since 2015 he has been responsible for Googlersquos business and operations in Europe the Middle East and Africa and hersquos been in leadership roles at Google since 2007 Prior to that Matt spent much of his career in media and marketing with particular interests in strategy commercial development and sales performance This included commercial and digital leadership roles in UK media
Date of appointment 27 January 2011
Committee membershipNomination Committee and Remuneration Committee
Other current rolesGooglersquos President ndash Europe Middle East and Africa and Director of The Media Trust
Brian Cassin Non-Executive Director
Skills and experienceBrian brings present day experience of running a FTSE40 group and of big data and analytics ndash topics of key importance to Sainsburyrsquos Brian joined Experian plc as Chief Financial Officer in April 2012 a post he held until his appointment as Chief Executive Officer in July 2014 Prior to this Brian spent his career in investment banking at Greenhill amp Co where he was Managing Director and Partner Brian has also held various roles at Baring Brothers International and at the London Stock Exchange
Date of appointment 1 April 2016
Committee membershipAudit Committee and Nomination Committee
Other current rolesChief Executive Officer of Experian plc
10
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jo Harlow Non-Executive Director
Skills and experienceJo brings a wealth of experience in consumer-facing businesses and in the telecoms and technology industry bothin the UK and internationally Jo spent 12 years in a variety of senior management roles with Nokia and Microsoft Prior to this she spent eight years at PampG and 11 years at Reebok in senior sales and marketing positions in both Europe and the US
Date of appointment 11 September 2017
Committee membershipChair of the Corporate Responsibility and Sustainability Committee and member of the Nomination Committee and Remuneration Committee
Life PresidentLord Sainsbury of Preston Candover KG
Other current rolesNon-Executive Director of InterContinental Hotels plc Non-Executive Director of Halmaplc and Member of the Supervisory Board of Ceconomy AG
11
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief Executive
Tim FallowfieldCompany Secretary amp Corporate Services Director
Kevin OrsquoByrne Chief Financial Officer
Jim BrownChief Executive Officer of Sainsburyrsquos Bank
Paul Mills-HicksFood Commercial Director
Angie RisleyGroup HR Director
Phil JordanGroup Chief InformationOfficer
Simon RobertsRetail and Operations Director
Clo MoriartyGroup Chief Digital Officer
12
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief ExecutiveSee Appendix page 9
Kevin OrsquoByrneChief Financial OfficerSee Appendix page 9
Tim FallowfieldCompany Secretary amp Corporate Services Director
Date of appointment September 2004
Skills and experienceTim joined Sainsburyrsquos in 2001 as Company Secretary and joined the Operating Board in September 2004 In addition to his role as Company Secretary Tim is responsible for the Corporate Services Division comprising Legal Services Data Governance Safety Shareholder Services Insurance and Central Security He chairs the Group Safety Committee and the Data Governance Committee Tim joined Sainsburyrsquos from Exelplc the global logistics company now part of DHL where he was Company Secretary and General Counsel He began his career at the international law firm Clifford Chance and is a qualified solicitor Tim is Chairman of the Disability Confident Business Leaders Group which works with Government in shaping the disability employment agenda and in raising awareness of the benefits of employing disabled people
Jim BrownCEO of Sainsburyrsquos Bank
Skills and experienceJim joined Sainsburyrsquos Bank as CEO in June 2019 and is also a member of the Sainsburyrsquos Group Operating Board He has held a number of senior international Financial Services roles - most recently for RBS in the UK as CEO of Williams and Glyn and prior to that CEO of Ulster Bank in Northern Ireland and the Republic of Ireland Before moving to Ireland he was based in Hong Kong and was CEO Retail and Commercial Banking Asia and the Middle East for RBS and ABN AMRO He has also been a member of the RBS Group Management Committee ABN AMRO Executive Group ABN AMRO Global Consumer Leadership Team and the RBSBank of China Joint Steering Committee Earlier in his career he held a number of senior executive roles for Citibank in Asia and Australia and New Zealand Jim has also held various Board positions including at Ulster Bank Saudi Hollandi Bank The Royal Bank of Scotland (China) Co Ltd and RBS (Pakistan) Ltd He is also a past President of the Institute of Banking in Ireland He is currently a Certified Bank Director
Date of appointment August 2019
Paul Mills-HicksFood Commercial Director
Skills and experiencePaul joined the Operating Board in May 2014 as Food Commercial Director having spent over ten years at Sainsburyrsquos He was closely involved in the formation and execution of the lsquoMaking Sainsburyrsquos Great Againrsquo strategy Following this he held a variety of roles in commercial strategy and finance most recently as Business Unit Director for Grocery Prior to Sainsburyrsquos Paul was European Controller at Marks and Spencer Group PLC and a Director at UBS Warburg
Date of appointment May 2014
13
APPENDIX Interim Results 201920 - November 2019
Operating Board
Angie RisleyGroup HR Director
Skills and experienceAngie was appointed Group HR Director and a member of the Operating Board in January 2013 with responsibility for human resources Angie is also a Director of Sainsburyrsquos Bank plc Angie was most recently Non-Executive Director and Chairman of the Remuneration Committee of Serco plc and prior to this was Group HR Director of Lloyds Banking Group and an Executive Director of Whitbread PLC with responsibility for HR and Corporate Social Responsibility Angie is currently Non-Executive Director and Chair of the Remuneration Committee at Smith amp Nephew plc
Date of appointment January 2013
Phil JordanGroup Chief Information Officer
Skills and experiencePhil joined the Board in January 2018 and has brought a fresh globalperspective on technology to the Operating Board in addition to a wealth of experience in digital data and business transformation Prior to joining Sainsburyrsquos Phil had a long and successful track record in telecommunications Most recently he was Global Chief Information Officer at Telefonica overseeing Digital Transformation and Information Technology and prior to that was Chief Information Officer for Vodafone UKIreland Phil has worked as a Non-Executive Advisor on Technology in the Investment amp Retail Banking sector and is currently a Non-Executive Director of TalkTalk Telecom Group PLC and chairs its Cyber-Security Committee
Date of appointment January 2018
Simon RobertsRetail and Operations Director
Skills and experienceSimon joined Sainsburyrsquos and the Operating Board in July 2017 as Central Retail amp Operations Director responsible for Stores Central operation and Logistics In his previous role he was Executive Vice President of Walgreens Boots Alliance and President of Boots with responsibility for commercial and retail operations across the UK and Ireland Prior to Boots Simon was at Marks and Spencer Group PLC where he held operational and customer leadership roles across stores divisions and central operations Simon is also the Non-Executive Chairman at the Institute ofCustomer Service
Date of appointment July 2017
Clodagh MoriartyGroup Chief Digital Officer
Skills and experienceClodagh was appointed Group Chief Digital Officer in June 2018 Clodagh leads the delivery of a consistent and first-rate digital experience for customers across Sainsburyrsquos Argos and Sainsburyrsquos BankClodagh joined Sainsburyrsquos in 2010 from Bain amp Co management consultants where she had gained experience working on a broad range of projects across multiple sectors and countries Following two years as Head of Strategy at Sainsburyrsquosshe moved into Food Commercial as Category Manager for Meal Solutions and then became Head of Online Trading spanning Food General Merchandise and Clothing before being promoted to Director of Online in 2016 In this role Clodagh was instrumental in driving innovation within Groceries Online and launching new initiatives including SmartShop and Chop Chop
Date of appointment June 2018
14
APPENDIX Interim Results 201920 - November 2019
Supplementary financial details
3 Financial calendarQ3 trading statement(15 weeks to 4 January 2020)
Preliminary results(52 weeks to 7 March 2020)
8 January 2020
30 April 2020
1 Weighted average number of shares
The interim dividend datesOrdinary shares
Ex-dividend 14 November 2019Record 15 November 2019Payment 20 December 2019
Product Quality Framework helps us fund investment
PQF cereals case study
BAU savings to offset cost inflation
Strategic cost transformation 5 year plan
Slide Number 43
Financial Services Priorities
Financial Services reshaping the portfolio
Financial Services key targets
Nectar
Slide Number 48
Digital
We will help our customers live well for less
Slide Number 51
Slide Number 52
Guidance for 201920
Retail sales
Sainsburyrsquos sales area and store numbers
Sainsburyrsquos store estate
Sainsburyrsquos investment programme
Retail margin
Group retail
Plc Board
Plc Board
Plc Board
Plc Board
Operating Board
Operating Board
Operating Board
Supplementary financial details
Contacts
Column1
201819
Grocery
19
GM
7
Clothing
1
To resize chart data range drag lower right corner of range
Grocery
GM
Clothing
22 Interim Results 201920 - November 2019
Be competitive
on price
1
We continue to be less dependent on promotions
230 228
207 209
Sainsburyrsquos Promotional Participation
1819 1920 19201819
Morrisons
Sainsburyrsquos
Tesco
Asda
Spend on Deal1
Q1 Q2
1 Source Nielsen 4 weekly data to 21 September 2019
10
20
30
4040
30
20
10Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep
2018 2019
H1 1920
H1 1920 AVERAGE
34 31
22 21
23 Interim Results 201920 - November 2019
Be competitive
on price
1
Improved grocery value
Base Price Index 2
-1
0
1
2
3
Grocery inflation (Kantar)1
-960bps
-550bps
Commodity VI 2
Aug 17 Jan 18 Jun 18 Nov 18 Apr 19 Oct 19
2004 2007 2010 2013 2016 2019
Morrisons
Sainsburyrsquos
Tesco
Asda
Total Market
Mar Apr May Jun Jul Aug Sep Oct2019
1 Kantar City Reads to Oct 20192 Sainsburyrsquos value index based on Brandview SKU matching data to Oct 2019
24 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
25 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Category tier performance
YoY value share change by tier
12 weeks to September 2019
-03
01
-01
-18
52 weeks to March 2019
Branded
PremiumOwn Brand
Branded
StandardOwn Brand
EconomyOwn Brand
02
-08
-04
00PremiumOwn Brand
StandardOwn Brand
EconomyOwn Brand
Source Nielsen Panel Total FMCG Market Universe Total outlets 52wks data to 9 March 2019 and 12wks data to 21 Sept 2019
26 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Premium private label
Taste the Difference re-launch
bull Over 350 products new repackaged or reformulated
bull Premium ready meals growth now outperforming the market
41
25 2419
Sainsburys Morrisons Tesco Asda
Premium Own Label volume share
Source Nielsen Panel Total FMCG 28 weeks data to 21 September 2019 Premium Own Label share of sales by retailer
27 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Distinctive brands
bull 57 of customers have bought Distinctive Brands since launch
bull On track for pound100m incremental sales
bull 37 new brands in H1 across Fresh and Grocery
bull lsquoTaste of the Futurersquo bays launched in 70 stores- 67 incremental sales
Leon
bull 3 year exclusive partnership
bull 14 products launched
28 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Beauty Rollout
bull Now rolled out to over 60 stores- Sales up over 40
bull Customer numbers up 7
bull Spend per customer up 25
bull Beauty range doubled 1200 additional lines
bull Double digit growth differential against the market
29 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Our values make us different
bull Committed to reduce plastic packaging by 50 by 2025
bull First retailer to remove single use plastic produce and bakery bags from our stores
- Launching reusable bags in fruit and veg aisles
bull Investing in our loose produce offer
bull Removed black plastic trays from ready meals
bull Fresh water stands in cafeacutes for customers to refill bottles
UKrsquos first major retailer to make significant commitment to reduce plastic
30 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Argos category and range focus
bull Availability improvement- Argos master range reduced by c30 over 3 years- Eliminating duplication removing low value items- Better availability of key lines in store
bull Rebalancing into higher margin categories- Gaining share in Furniture1
More distinctive rangemore reason to shop at Sainsburyrsquos
Reduced SKU count -20operational efficiencies
Higher cash gross profit +2 YOY
Volumes +8 operational efficiencies
41 Interim Results 201920 - November 2019
Drive efficiency
to invest in the customer
offer
4
BAU savings to offset cost inflation
Manages inflationary pressures
BAU savingsH1 201920
Procurement GNFR
Retail Technology Efficiencies
Retail HRRetail
management structures
Shrink Reduction
42 Interim Results 201920 - November 2019
Drive efficiency
to invest in the customer
offer
4
Strategic cost transformation 5 year plan
Converge Tackle fixed cost
End to end reviews
Retail Operations Marketing and Commercial Operations
Other central support
Logistics and Supply Chain
Project A
Project C
Project D
Shared Services BPO
Property strategy
Project BGNFR procurement
Capital prioritisation
Technology Digital and Corporate Services
pound250-pound350m
pound150-pound250m
pound400-pound600mExecution underway In planning Opportunities identified
pound5bn addressable cost base
43 Interim Results 201920 - November 2019
Grow connected
services
5
44 Interim Results 201920 - November 2019
Grow connected
services
5
Financial Services Priorities
To be the provider of financial services for loyal Sainsburyrsquos and Argos customers
An agile capital and cost efficient provider of simple mobile-led financial services
Vision
Objective
Priorities Reshape Simplify Strengthen
45 Interim Results 201920 - November 2019
Grow connected
services
5
Current Customer Base
Customer Credit Risk Balance Sheet Earnings
Argos Storecards 22m Prime Near Prime
Credit Cards 09m Prime
Personal Loans 05m Prime
Mortgages 9K Exit
Total Lending
Deposits 03m
Insurances 05m Very Low Risk
Travel Money 266 Sites
ATMs 1890
Financial Services reshaping the portfolio
46 Interim Results 201920 - November 2019
Grow connected
services
5
Increase connectivity and value for Group
Stop mortgage acquisition review back book options
No capital input from the Group from now1
Costincome c503 within 5 years
Double UPBT double digit ROCE within 5 years
Upstream cash within 5 years2
Financial Services key targets
Transform the cost base
Improve returns
Financial services cash generative
Reduce risk profile to Group
Stop putting cash in to Financial Services
2
4
6
3
1
5
Focus on Sainsburyrsquos customer base
1 Subject to regulatory changes requirements2 Subject to regulatory approval3 On a Group contribution basis
47 Interim Results 201920 - November 2019
Grow connected
services
5
Nectar
bull Biggest loyalty programme in the UK
bull Over 18 million collectors
bull Most recognised loyalty brand in the UK
bull Launch of Nectar digital- 21 million app users- Increase in overall Nectar participation- Increased levels of personalisation- 138000 new Nectar customers- 1 app on launch weekend
bull Coalition strengthened with addition of Esso in June 2019
48 Interim Results 201920 - November 2019
Provide a seamless customer
experience
6
49 Interim Results 201920 - November 2019
Provide a seamless customer
experience
6
Digital
bull Groceries Online sales penetration of 8- App accounts for over 20 of orders
bull 21 million digital Nectar app users
bull 14 million Argos Financial Services app downloads
bull Smartshop rollout in over 350 stores
Groceries online
Chop Chop
SmartShop
Universaldiscovery
Seamlessfinancialservices
Singlebasket
50 Interim Results 201920 - November 2019
We will help our customers live well for less
Confident in the core Integrated customer offer
One multi brand multi channel business
Strong cash generation supporting investment dividend and allowing deleverage
Financial flexibility and resilience
Sustainable cost reduction covering cost inflation and funding investment in our competitive offer
QampA
APPENDIX Interim Results 201920 - November 2019
Appendices
APPENDIX Interim Results 201920 - November 2019
Guidance for 201920
1
Spacebull Expect to open 2 new Sainsburyrsquos supermarkets and up to 15 convenience storesbull Expect to open around 25 Argos stores in Sainsburyrsquos (of which 11 are
relocations) resulting in around 305 Argos stores in supermarketsbull Expect to close 2 supermarkets around 25 convenience stores and around 20
Argos stores in FY201920 as part of announced property closure programme of 10-15 supermarkets 30-40 convenience stores and 60-70 Argos stores
Financial Servicesbull Financial services underlying operating profit expected to be cpound45m including a
cpound10m benefit as a result of a change in transfer pricing between Argos and Argos Financial Services
bull Financial Services non-underlying costs are expected to be around pound30mbull No further capital injections into the Bank are expected following pound35m in H1 201920
Depreciation and amortisationbull Expect underlying retail depreciation and amortisation of around pound12bn
including cpound500m right of use asset depreciation
CostsOperating cost inflationbull Cost inflation between 2 and 3Cost savingsbull Continue to deliver cost savings to at least offset the impact of cost inflation
Finance costsbull Net finance costs of around pound405m including pound320m lease interest in
201920 following the introduction of IFRS 16
One-off itemsbull In 201920 cash outflows as a result of items excluded from
underlying results should not exceed pound100mbull Property strategy programme one-off costs expected to be
pound230m-pound270m of which cash costs are pound30-40m
Dividendbull Sainsburyrsquos plans to change the full year dividend policy to 19x cover by
underlying earnings (versus 20x previously) to offset the dilutive (non cash) impact of IFRS 16 on underlying earnings
Capital expenditurebull Retail capital expenditure to be around pound550mbull Retail capital expenditure is expected to be around pound550m-pound600m per
annum over the medium term
Net debtbull Net debt before fair value movements on derivatives to reduce by at
least pound300m
Tax ratebull Underlying tax rate to be between 25 and 26
APPENDIX Interim Results 201920 - November 2019
Retail sales
1 Sales including VAT excluding fuel
LFL sales growth1
(10)
Sales from net new space1
04
Total sales growth1
(06)
Supermarkets2
(07)
Convenience20
Groceries Online
70
Channels
(01)(25)
(12)
2 Supermarket sales include Argos SiS sales FY 1819 16
pound139bn
pound103bnGrocery
pound30bnGeneralMerchandise
pound488mClothing
2
Chart1
201819
194
66
1
Sheet1
APPENDIX Interim Results 201920 - November 2019
Sainsburyrsquos sales area and store numbersAs at 21 September 2019
Sainsburyrsquos store estateAs at 21 September 2019
Sq ftsales area
82446
870
40001 to60000
20001 to40000
10000 to20000
Under10000 Total
Over60000
0122122
0197197
0175175
06767
824607
1431
Argos storesArgos in SainsburyrsquosArgos in HomebaseOtherArgos total store numbers
Habitat1
Collection points
594281
8-
883
16317
As at21 Sept 2019
Disposalsclosures
Newstores
As at9 March 2019
17--8
-1
(7)-
(2)-
(9)
-(36)
588288
6-
88216
282
ConvenienceSupermarketsTotal stores
Number of stores
Sq ftsales area
1929350
2279
40001 to60000
20001 to40000
10000 to20000
Under10000 Total
Over60000
-18441844
-58185818
-85018501
-46604660
19292117323102
ConvenienceSupermarketsTotal stores
Space by store size (lsquo000 sq ft)
Argos and Habitat store numbers
1 5 Habitat stores 11 Habitat stores in Sainsburys
4
APPENDIX Interim Results 201920 - November 2019
ClosureBitterne West
Sainsburyrsquos investment programme201920
Q1
Supermarkets ConvenienceNew storesMilton Keynes Brooklands District CentBromley High StLeeds Wike Ridge LaneSalford Harbour CityCanterbury High St
ReplacementMayfair Stratton St
ClosuresMayfairWarren St
Q1Q1Q1Q2Q2
Q2
Q1Q2
5
APPENDIX Interim Results 201920 - November 2019
Retail margin
Retail sales (inc VAT inc fuel)(exc VAT inc fuel)
Retail underlying EBITDAR1
Retail underlying EBITDAR margin 2
at constant fuel pricesRetail underlying operating profit3
Retail underlying operating margin 4
at constant fuel prices
1656714808
10677272
4373030
1661214856
11147575
4873333
030342
30 bps28 bps10333 bps32 bps
1 Retail underlying operating profit before net rental income of pound6 million and underlying depreciation and amortisation of pound636 million2 Retail underlying EBITDAR divided by underlying retail sales excluding VAT3 Retail underlying earnings before interest tax and Sainsburyrsquos underlying share of post-tax profit from joint ventures4 Retail underlying operating profit divided by underlying retail sales excluding VAT
poundm H1201920
H1201819
Change
6
APPENDIX Interim Results 201920 - November 2019
H1201920
H1201819
Group retail
Return on capital employed 1
Net debt to EBITDAR (times)23
Fixed charge cover (times)2
Underlying tax rate Core retail capex sales5
713126
26515
743326
25715
poundm
1 ROCE Return is defined as a 52 week rolling underlying profit before interest and tax Capital employed is defined as group net assets2 Net debt of pound6778 million includes lease obligations under IFRS 16 and perpetual securities treated as debt divided by Group underlying EBITDAR of pound2171 million calculated for a 52-week period to 21 September 20193 Group underlying EBITDAR divided by rent (both capital and interest) and net finance costs where interest on perpetual securities is treated as an underlying finance costs4 52 weeks to 22nd September 2018 is not available due to the implementation of IFRS 16 Comparatives therefore reflect the 52 weeks to 9th March 20195 Includes retail sales inc vat inc fuel
4
4
7
APPENDIX Interim Results 201920 - November 2019
Plc Board
Kevin OrsquoByrneChief Financial Officer
Mike Coupe Group Chief Executive
Dame Susan Rice Senior Independent Director
Matt BrittinNon-Executive Director
Jo HarlowNon-Executive Director
Brian CassinNon-Executive Director
David KeensNon-Executive Director
Jean Tomlin Non-Executive Director
Martin Scicluna Chairman
8
APPENDIX Interim Results 201920 - November 2019
Plc Board
Mike Coupe Group Chief Executive Officer
Skills and experienceAppointed Group Chief Executive Officer on 9 July 2014 Mike has been a member of the Operating Board since October 2004 Mike has vast retail industry experience in trading strategy marketing digital and online as well as multi-site store experience He joined Sainsburyrsquos from Big Food Group where he was a board director of Big Food Group PLC and Managing Director of Iceland Food Stores He previously worked for both Asda and Tesco PLC where he served in a variety of senior management roles
Date of appointment 1 August 2007Mike has served as an Executive Director since 1 August 2007 and as Chief Executive Officer since 9 July 2014
Committee membershipCorporate Responsibility and Sustainability Committee
Kevin OrsquoByrne Chief Financial Officer
Skills and experienceKevin brings to the Board a wealth of retail and finance experience Kevin was previously Chief Executive Officer of Poundland Group Limited until December 2016 and held executive roles at Kingfisher plc from 2008 to 2015 including Divisional Director UK China and Turkey Chief Executive Officer of BampQ UK amp Ireland and Group Finance Director He was previously Group Finance Director of Dixons Retail plc and European Finance Director of Quaker Oats He was a Non-Executive Director of Land Securities Group PLC from 2008 to September 2017 where he was Chairman of the Audit Committee and Senior Independent Director
Date of appointment 9 January 2017
Other current rolesNon-Executive Director of Greene King plc
Skills and experienceMartin brings a breadth of experience and leadership in both executive and non-executive roles His previous roles include positions as the Chairman of Great Portland Estates plc Senior Independent Director and Chair of the Audit Committee of Worldpay Inc and Non-Executive Director and Chair of the Audit Committee of Lloyds Banking Group plc He was a partner at Deloitte LLP for 26 years serving as Chairman from 1995 to 2007 where his clients included Dixons WH Smith Alliance Unichem and Cadburyrsquos
Other current rolesChairman of RSA Insurance Group plc
Martin Scicluna Chairman
Date of appointment 1 November 2018 Martin joined the Board as Chairman Designate and Non-Executive Director on 1 November 2018 He was appointed as Chairman of the Board on 10 March 2019
Committee membershipChair of the Nomination Committee
Dame Susan Rice Senior Independent Director
Skills and experienceSusan has extensive experience as a Non-Executive Director as well as in retail banking financial services leadership and sustainability Her career in retail bankingis particularly relevant to our ownership ofSainsburyrsquos Bank Previously Susan was a member of the First Ministerrsquos Council of Economic Advisors Managing Director of Lloyds Banking Group Scotland and was previously Chief Executive and then Chairman of Lloyds TSB Scotland plc She has also held a range of other non-executive directorships including at the Bank of England and SSE plc
Committee membershipChair of the Remuneration Committee and a member of the Nomination Committee
Date of appointment 1 June 2013
Other current rolesChair of Scottish Water and Business Stream Chair of the Scottish Fiscal Commission Non-Executive Director of the North American Income Trust C Hoare and Co and Senior Independent Director of the North American Income Trust
9
Other current rolesNon-Executive Director and Chairman of the Audit Committee of Centrica plc
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jean Tomlin Non-Executive Director
Skills and experienceJean has extensive experience and breadth of skills in human resources and corporate responsibility Jean was formerly Director of HR Workforce and Accreditation for The London OrganisingCommittee of the Olympic and Paralympic Games where she set the strategic direction to ensure the mobilisation of the combined 200000-strong workforce including paid staff volunteers and contractors which represented the recruitment and mobilisation of the largest peacetime workforce and set the industry standard for volunteering with the highly acclaimed Games She was previously Group HR Director at Marks and Spencer Group Plc HR Director and founder member of Egg plc and Sales amp Operations Director of Prudential Direct
Date of appointment 1 January 2013
Committee membershipAudit Committee Corporate Responsibility and Sustainability Committee and Nomination Committee
David Keens Non-Executive Director
Skills and experienceDavid has extensive retail experience and knowledge of consumer facing businesses together with his core skills in finance David was formerly Group Finance Director of next plc from 1991 to 2015 and their Group Treasurer from 1986 to 1991 Previous management experience includes nine years in the UK and overseas operations of multinational food manufacturer Nabisco and prior to that seven years in the accountancy profession
Date of appointment 29 April 2015
Committee membershipChair of the Audit Committee and a member of the Nomination Committee
Other current rolesIndependent Board member of Capri Holdings Limited Non-Executive Director of Hakluyt and Chief Executive Officer of Chanzo Limited
Other current rolesNon-Executive Director Senior Independent Director and Chair of the Audit Committee of Auto Trader Group plc
Matt BrittinNon-Executive Director
Skills and experienceMatt has extensive experience of running a high profile fast moving innovative digital business Since 2015 he has been responsible for Googlersquos business and operations in Europe the Middle East and Africa and hersquos been in leadership roles at Google since 2007 Prior to that Matt spent much of his career in media and marketing with particular interests in strategy commercial development and sales performance This included commercial and digital leadership roles in UK media
Date of appointment 27 January 2011
Committee membershipNomination Committee and Remuneration Committee
Other current rolesGooglersquos President ndash Europe Middle East and Africa and Director of The Media Trust
Brian Cassin Non-Executive Director
Skills and experienceBrian brings present day experience of running a FTSE40 group and of big data and analytics ndash topics of key importance to Sainsburyrsquos Brian joined Experian plc as Chief Financial Officer in April 2012 a post he held until his appointment as Chief Executive Officer in July 2014 Prior to this Brian spent his career in investment banking at Greenhill amp Co where he was Managing Director and Partner Brian has also held various roles at Baring Brothers International and at the London Stock Exchange
Date of appointment 1 April 2016
Committee membershipAudit Committee and Nomination Committee
Other current rolesChief Executive Officer of Experian plc
10
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jo Harlow Non-Executive Director
Skills and experienceJo brings a wealth of experience in consumer-facing businesses and in the telecoms and technology industry bothin the UK and internationally Jo spent 12 years in a variety of senior management roles with Nokia and Microsoft Prior to this she spent eight years at PampG and 11 years at Reebok in senior sales and marketing positions in both Europe and the US
Date of appointment 11 September 2017
Committee membershipChair of the Corporate Responsibility and Sustainability Committee and member of the Nomination Committee and Remuneration Committee
Life PresidentLord Sainsbury of Preston Candover KG
Other current rolesNon-Executive Director of InterContinental Hotels plc Non-Executive Director of Halmaplc and Member of the Supervisory Board of Ceconomy AG
11
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief Executive
Tim FallowfieldCompany Secretary amp Corporate Services Director
Kevin OrsquoByrne Chief Financial Officer
Jim BrownChief Executive Officer of Sainsburyrsquos Bank
Paul Mills-HicksFood Commercial Director
Angie RisleyGroup HR Director
Phil JordanGroup Chief InformationOfficer
Simon RobertsRetail and Operations Director
Clo MoriartyGroup Chief Digital Officer
12
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief ExecutiveSee Appendix page 9
Kevin OrsquoByrneChief Financial OfficerSee Appendix page 9
Tim FallowfieldCompany Secretary amp Corporate Services Director
Date of appointment September 2004
Skills and experienceTim joined Sainsburyrsquos in 2001 as Company Secretary and joined the Operating Board in September 2004 In addition to his role as Company Secretary Tim is responsible for the Corporate Services Division comprising Legal Services Data Governance Safety Shareholder Services Insurance and Central Security He chairs the Group Safety Committee and the Data Governance Committee Tim joined Sainsburyrsquos from Exelplc the global logistics company now part of DHL where he was Company Secretary and General Counsel He began his career at the international law firm Clifford Chance and is a qualified solicitor Tim is Chairman of the Disability Confident Business Leaders Group which works with Government in shaping the disability employment agenda and in raising awareness of the benefits of employing disabled people
Jim BrownCEO of Sainsburyrsquos Bank
Skills and experienceJim joined Sainsburyrsquos Bank as CEO in June 2019 and is also a member of the Sainsburyrsquos Group Operating Board He has held a number of senior international Financial Services roles - most recently for RBS in the UK as CEO of Williams and Glyn and prior to that CEO of Ulster Bank in Northern Ireland and the Republic of Ireland Before moving to Ireland he was based in Hong Kong and was CEO Retail and Commercial Banking Asia and the Middle East for RBS and ABN AMRO He has also been a member of the RBS Group Management Committee ABN AMRO Executive Group ABN AMRO Global Consumer Leadership Team and the RBSBank of China Joint Steering Committee Earlier in his career he held a number of senior executive roles for Citibank in Asia and Australia and New Zealand Jim has also held various Board positions including at Ulster Bank Saudi Hollandi Bank The Royal Bank of Scotland (China) Co Ltd and RBS (Pakistan) Ltd He is also a past President of the Institute of Banking in Ireland He is currently a Certified Bank Director
Date of appointment August 2019
Paul Mills-HicksFood Commercial Director
Skills and experiencePaul joined the Operating Board in May 2014 as Food Commercial Director having spent over ten years at Sainsburyrsquos He was closely involved in the formation and execution of the lsquoMaking Sainsburyrsquos Great Againrsquo strategy Following this he held a variety of roles in commercial strategy and finance most recently as Business Unit Director for Grocery Prior to Sainsburyrsquos Paul was European Controller at Marks and Spencer Group PLC and a Director at UBS Warburg
Date of appointment May 2014
13
APPENDIX Interim Results 201920 - November 2019
Operating Board
Angie RisleyGroup HR Director
Skills and experienceAngie was appointed Group HR Director and a member of the Operating Board in January 2013 with responsibility for human resources Angie is also a Director of Sainsburyrsquos Bank plc Angie was most recently Non-Executive Director and Chairman of the Remuneration Committee of Serco plc and prior to this was Group HR Director of Lloyds Banking Group and an Executive Director of Whitbread PLC with responsibility for HR and Corporate Social Responsibility Angie is currently Non-Executive Director and Chair of the Remuneration Committee at Smith amp Nephew plc
Date of appointment January 2013
Phil JordanGroup Chief Information Officer
Skills and experiencePhil joined the Board in January 2018 and has brought a fresh globalperspective on technology to the Operating Board in addition to a wealth of experience in digital data and business transformation Prior to joining Sainsburyrsquos Phil had a long and successful track record in telecommunications Most recently he was Global Chief Information Officer at Telefonica overseeing Digital Transformation and Information Technology and prior to that was Chief Information Officer for Vodafone UKIreland Phil has worked as a Non-Executive Advisor on Technology in the Investment amp Retail Banking sector and is currently a Non-Executive Director of TalkTalk Telecom Group PLC and chairs its Cyber-Security Committee
Date of appointment January 2018
Simon RobertsRetail and Operations Director
Skills and experienceSimon joined Sainsburyrsquos and the Operating Board in July 2017 as Central Retail amp Operations Director responsible for Stores Central operation and Logistics In his previous role he was Executive Vice President of Walgreens Boots Alliance and President of Boots with responsibility for commercial and retail operations across the UK and Ireland Prior to Boots Simon was at Marks and Spencer Group PLC where he held operational and customer leadership roles across stores divisions and central operations Simon is also the Non-Executive Chairman at the Institute ofCustomer Service
Date of appointment July 2017
Clodagh MoriartyGroup Chief Digital Officer
Skills and experienceClodagh was appointed Group Chief Digital Officer in June 2018 Clodagh leads the delivery of a consistent and first-rate digital experience for customers across Sainsburyrsquos Argos and Sainsburyrsquos BankClodagh joined Sainsburyrsquos in 2010 from Bain amp Co management consultants where she had gained experience working on a broad range of projects across multiple sectors and countries Following two years as Head of Strategy at Sainsburyrsquosshe moved into Food Commercial as Category Manager for Meal Solutions and then became Head of Online Trading spanning Food General Merchandise and Clothing before being promoted to Director of Online in 2016 In this role Clodagh was instrumental in driving innovation within Groceries Online and launching new initiatives including SmartShop and Chop Chop
Date of appointment June 2018
14
APPENDIX Interim Results 201920 - November 2019
Supplementary financial details
3 Financial calendarQ3 trading statement(15 weeks to 4 January 2020)
Preliminary results(52 weeks to 7 March 2020)
8 January 2020
30 April 2020
1 Weighted average number of shares
The interim dividend datesOrdinary shares
Ex-dividend 14 November 2019Record 15 November 2019Payment 20 December 2019
Product Quality Framework helps us fund investment
PQF cereals case study
BAU savings to offset cost inflation
Strategic cost transformation 5 year plan
Slide Number 43
Financial Services Priorities
Financial Services reshaping the portfolio
Financial Services key targets
Nectar
Slide Number 48
Digital
We will help our customers live well for less
Slide Number 51
Slide Number 52
Guidance for 201920
Retail sales
Sainsburyrsquos sales area and store numbers
Sainsburyrsquos store estate
Sainsburyrsquos investment programme
Retail margin
Group retail
Plc Board
Plc Board
Plc Board
Plc Board
Operating Board
Operating Board
Operating Board
Supplementary financial details
Contacts
Column1
201819
Grocery
19
GM
7
Clothing
1
To resize chart data range drag lower right corner of range
Grocery
GM
Clothing
23 Interim Results 201920 - November 2019
Be competitive
on price
1
Improved grocery value
Base Price Index 2
-1
0
1
2
3
Grocery inflation (Kantar)1
-960bps
-550bps
Commodity VI 2
Aug 17 Jan 18 Jun 18 Nov 18 Apr 19 Oct 19
2004 2007 2010 2013 2016 2019
Morrisons
Sainsburyrsquos
Tesco
Asda
Total Market
Mar Apr May Jun Jul Aug Sep Oct2019
1 Kantar City Reads to Oct 20192 Sainsburyrsquos value index based on Brandview SKU matching data to Oct 2019
24 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
25 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Category tier performance
YoY value share change by tier
12 weeks to September 2019
-03
01
-01
-18
52 weeks to March 2019
Branded
PremiumOwn Brand
Branded
StandardOwn Brand
EconomyOwn Brand
02
-08
-04
00PremiumOwn Brand
StandardOwn Brand
EconomyOwn Brand
Source Nielsen Panel Total FMCG Market Universe Total outlets 52wks data to 9 March 2019 and 12wks data to 21 Sept 2019
26 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Premium private label
Taste the Difference re-launch
bull Over 350 products new repackaged or reformulated
bull Premium ready meals growth now outperforming the market
41
25 2419
Sainsburys Morrisons Tesco Asda
Premium Own Label volume share
Source Nielsen Panel Total FMCG 28 weeks data to 21 September 2019 Premium Own Label share of sales by retailer
27 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Distinctive brands
bull 57 of customers have bought Distinctive Brands since launch
bull On track for pound100m incremental sales
bull 37 new brands in H1 across Fresh and Grocery
bull lsquoTaste of the Futurersquo bays launched in 70 stores- 67 incremental sales
Leon
bull 3 year exclusive partnership
bull 14 products launched
28 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Beauty Rollout
bull Now rolled out to over 60 stores- Sales up over 40
bull Customer numbers up 7
bull Spend per customer up 25
bull Beauty range doubled 1200 additional lines
bull Double digit growth differential against the market
29 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Our values make us different
bull Committed to reduce plastic packaging by 50 by 2025
bull First retailer to remove single use plastic produce and bakery bags from our stores
- Launching reusable bags in fruit and veg aisles
bull Investing in our loose produce offer
bull Removed black plastic trays from ready meals
bull Fresh water stands in cafeacutes for customers to refill bottles
UKrsquos first major retailer to make significant commitment to reduce plastic
30 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Argos category and range focus
bull Availability improvement- Argos master range reduced by c30 over 3 years- Eliminating duplication removing low value items- Better availability of key lines in store
bull Rebalancing into higher margin categories- Gaining share in Furniture1
More distinctive rangemore reason to shop at Sainsburyrsquos
Reduced SKU count -20operational efficiencies
Higher cash gross profit +2 YOY
Volumes +8 operational efficiencies
41 Interim Results 201920 - November 2019
Drive efficiency
to invest in the customer
offer
4
BAU savings to offset cost inflation
Manages inflationary pressures
BAU savingsH1 201920
Procurement GNFR
Retail Technology Efficiencies
Retail HRRetail
management structures
Shrink Reduction
42 Interim Results 201920 - November 2019
Drive efficiency
to invest in the customer
offer
4
Strategic cost transformation 5 year plan
Converge Tackle fixed cost
End to end reviews
Retail Operations Marketing and Commercial Operations
Other central support
Logistics and Supply Chain
Project A
Project C
Project D
Shared Services BPO
Property strategy
Project BGNFR procurement
Capital prioritisation
Technology Digital and Corporate Services
pound250-pound350m
pound150-pound250m
pound400-pound600mExecution underway In planning Opportunities identified
pound5bn addressable cost base
43 Interim Results 201920 - November 2019
Grow connected
services
5
44 Interim Results 201920 - November 2019
Grow connected
services
5
Financial Services Priorities
To be the provider of financial services for loyal Sainsburyrsquos and Argos customers
An agile capital and cost efficient provider of simple mobile-led financial services
Vision
Objective
Priorities Reshape Simplify Strengthen
45 Interim Results 201920 - November 2019
Grow connected
services
5
Current Customer Base
Customer Credit Risk Balance Sheet Earnings
Argos Storecards 22m Prime Near Prime
Credit Cards 09m Prime
Personal Loans 05m Prime
Mortgages 9K Exit
Total Lending
Deposits 03m
Insurances 05m Very Low Risk
Travel Money 266 Sites
ATMs 1890
Financial Services reshaping the portfolio
46 Interim Results 201920 - November 2019
Grow connected
services
5
Increase connectivity and value for Group
Stop mortgage acquisition review back book options
No capital input from the Group from now1
Costincome c503 within 5 years
Double UPBT double digit ROCE within 5 years
Upstream cash within 5 years2
Financial Services key targets
Transform the cost base
Improve returns
Financial services cash generative
Reduce risk profile to Group
Stop putting cash in to Financial Services
2
4
6
3
1
5
Focus on Sainsburyrsquos customer base
1 Subject to regulatory changes requirements2 Subject to regulatory approval3 On a Group contribution basis
47 Interim Results 201920 - November 2019
Grow connected
services
5
Nectar
bull Biggest loyalty programme in the UK
bull Over 18 million collectors
bull Most recognised loyalty brand in the UK
bull Launch of Nectar digital- 21 million app users- Increase in overall Nectar participation- Increased levels of personalisation- 138000 new Nectar customers- 1 app on launch weekend
bull Coalition strengthened with addition of Esso in June 2019
48 Interim Results 201920 - November 2019
Provide a seamless customer
experience
6
49 Interim Results 201920 - November 2019
Provide a seamless customer
experience
6
Digital
bull Groceries Online sales penetration of 8- App accounts for over 20 of orders
bull 21 million digital Nectar app users
bull 14 million Argos Financial Services app downloads
bull Smartshop rollout in over 350 stores
Groceries online
Chop Chop
SmartShop
Universaldiscovery
Seamlessfinancialservices
Singlebasket
50 Interim Results 201920 - November 2019
We will help our customers live well for less
Confident in the core Integrated customer offer
One multi brand multi channel business
Strong cash generation supporting investment dividend and allowing deleverage
Financial flexibility and resilience
Sustainable cost reduction covering cost inflation and funding investment in our competitive offer
QampA
APPENDIX Interim Results 201920 - November 2019
Appendices
APPENDIX Interim Results 201920 - November 2019
Guidance for 201920
1
Spacebull Expect to open 2 new Sainsburyrsquos supermarkets and up to 15 convenience storesbull Expect to open around 25 Argos stores in Sainsburyrsquos (of which 11 are
relocations) resulting in around 305 Argos stores in supermarketsbull Expect to close 2 supermarkets around 25 convenience stores and around 20
Argos stores in FY201920 as part of announced property closure programme of 10-15 supermarkets 30-40 convenience stores and 60-70 Argos stores
Financial Servicesbull Financial services underlying operating profit expected to be cpound45m including a
cpound10m benefit as a result of a change in transfer pricing between Argos and Argos Financial Services
bull Financial Services non-underlying costs are expected to be around pound30mbull No further capital injections into the Bank are expected following pound35m in H1 201920
Depreciation and amortisationbull Expect underlying retail depreciation and amortisation of around pound12bn
including cpound500m right of use asset depreciation
CostsOperating cost inflationbull Cost inflation between 2 and 3Cost savingsbull Continue to deliver cost savings to at least offset the impact of cost inflation
Finance costsbull Net finance costs of around pound405m including pound320m lease interest in
201920 following the introduction of IFRS 16
One-off itemsbull In 201920 cash outflows as a result of items excluded from
underlying results should not exceed pound100mbull Property strategy programme one-off costs expected to be
pound230m-pound270m of which cash costs are pound30-40m
Dividendbull Sainsburyrsquos plans to change the full year dividend policy to 19x cover by
underlying earnings (versus 20x previously) to offset the dilutive (non cash) impact of IFRS 16 on underlying earnings
Capital expenditurebull Retail capital expenditure to be around pound550mbull Retail capital expenditure is expected to be around pound550m-pound600m per
annum over the medium term
Net debtbull Net debt before fair value movements on derivatives to reduce by at
least pound300m
Tax ratebull Underlying tax rate to be between 25 and 26
APPENDIX Interim Results 201920 - November 2019
Retail sales
1 Sales including VAT excluding fuel
LFL sales growth1
(10)
Sales from net new space1
04
Total sales growth1
(06)
Supermarkets2
(07)
Convenience20
Groceries Online
70
Channels
(01)(25)
(12)
2 Supermarket sales include Argos SiS sales FY 1819 16
pound139bn
pound103bnGrocery
pound30bnGeneralMerchandise
pound488mClothing
2
Chart1
201819
194
66
1
Sheet1
APPENDIX Interim Results 201920 - November 2019
Sainsburyrsquos sales area and store numbersAs at 21 September 2019
Sainsburyrsquos store estateAs at 21 September 2019
Sq ftsales area
82446
870
40001 to60000
20001 to40000
10000 to20000
Under10000 Total
Over60000
0122122
0197197
0175175
06767
824607
1431
Argos storesArgos in SainsburyrsquosArgos in HomebaseOtherArgos total store numbers
Habitat1
Collection points
594281
8-
883
16317
As at21 Sept 2019
Disposalsclosures
Newstores
As at9 March 2019
17--8
-1
(7)-
(2)-
(9)
-(36)
588288
6-
88216
282
ConvenienceSupermarketsTotal stores
Number of stores
Sq ftsales area
1929350
2279
40001 to60000
20001 to40000
10000 to20000
Under10000 Total
Over60000
-18441844
-58185818
-85018501
-46604660
19292117323102
ConvenienceSupermarketsTotal stores
Space by store size (lsquo000 sq ft)
Argos and Habitat store numbers
1 5 Habitat stores 11 Habitat stores in Sainsburys
4
APPENDIX Interim Results 201920 - November 2019
ClosureBitterne West
Sainsburyrsquos investment programme201920
Q1
Supermarkets ConvenienceNew storesMilton Keynes Brooklands District CentBromley High StLeeds Wike Ridge LaneSalford Harbour CityCanterbury High St
ReplacementMayfair Stratton St
ClosuresMayfairWarren St
Q1Q1Q1Q2Q2
Q2
Q1Q2
5
APPENDIX Interim Results 201920 - November 2019
Retail margin
Retail sales (inc VAT inc fuel)(exc VAT inc fuel)
Retail underlying EBITDAR1
Retail underlying EBITDAR margin 2
at constant fuel pricesRetail underlying operating profit3
Retail underlying operating margin 4
at constant fuel prices
1656714808
10677272
4373030
1661214856
11147575
4873333
030342
30 bps28 bps10333 bps32 bps
1 Retail underlying operating profit before net rental income of pound6 million and underlying depreciation and amortisation of pound636 million2 Retail underlying EBITDAR divided by underlying retail sales excluding VAT3 Retail underlying earnings before interest tax and Sainsburyrsquos underlying share of post-tax profit from joint ventures4 Retail underlying operating profit divided by underlying retail sales excluding VAT
poundm H1201920
H1201819
Change
6
APPENDIX Interim Results 201920 - November 2019
H1201920
H1201819
Group retail
Return on capital employed 1
Net debt to EBITDAR (times)23
Fixed charge cover (times)2
Underlying tax rate Core retail capex sales5
713126
26515
743326
25715
poundm
1 ROCE Return is defined as a 52 week rolling underlying profit before interest and tax Capital employed is defined as group net assets2 Net debt of pound6778 million includes lease obligations under IFRS 16 and perpetual securities treated as debt divided by Group underlying EBITDAR of pound2171 million calculated for a 52-week period to 21 September 20193 Group underlying EBITDAR divided by rent (both capital and interest) and net finance costs where interest on perpetual securities is treated as an underlying finance costs4 52 weeks to 22nd September 2018 is not available due to the implementation of IFRS 16 Comparatives therefore reflect the 52 weeks to 9th March 20195 Includes retail sales inc vat inc fuel
4
4
7
APPENDIX Interim Results 201920 - November 2019
Plc Board
Kevin OrsquoByrneChief Financial Officer
Mike Coupe Group Chief Executive
Dame Susan Rice Senior Independent Director
Matt BrittinNon-Executive Director
Jo HarlowNon-Executive Director
Brian CassinNon-Executive Director
David KeensNon-Executive Director
Jean Tomlin Non-Executive Director
Martin Scicluna Chairman
8
APPENDIX Interim Results 201920 - November 2019
Plc Board
Mike Coupe Group Chief Executive Officer
Skills and experienceAppointed Group Chief Executive Officer on 9 July 2014 Mike has been a member of the Operating Board since October 2004 Mike has vast retail industry experience in trading strategy marketing digital and online as well as multi-site store experience He joined Sainsburyrsquos from Big Food Group where he was a board director of Big Food Group PLC and Managing Director of Iceland Food Stores He previously worked for both Asda and Tesco PLC where he served in a variety of senior management roles
Date of appointment 1 August 2007Mike has served as an Executive Director since 1 August 2007 and as Chief Executive Officer since 9 July 2014
Committee membershipCorporate Responsibility and Sustainability Committee
Kevin OrsquoByrne Chief Financial Officer
Skills and experienceKevin brings to the Board a wealth of retail and finance experience Kevin was previously Chief Executive Officer of Poundland Group Limited until December 2016 and held executive roles at Kingfisher plc from 2008 to 2015 including Divisional Director UK China and Turkey Chief Executive Officer of BampQ UK amp Ireland and Group Finance Director He was previously Group Finance Director of Dixons Retail plc and European Finance Director of Quaker Oats He was a Non-Executive Director of Land Securities Group PLC from 2008 to September 2017 where he was Chairman of the Audit Committee and Senior Independent Director
Date of appointment 9 January 2017
Other current rolesNon-Executive Director of Greene King plc
Skills and experienceMartin brings a breadth of experience and leadership in both executive and non-executive roles His previous roles include positions as the Chairman of Great Portland Estates plc Senior Independent Director and Chair of the Audit Committee of Worldpay Inc and Non-Executive Director and Chair of the Audit Committee of Lloyds Banking Group plc He was a partner at Deloitte LLP for 26 years serving as Chairman from 1995 to 2007 where his clients included Dixons WH Smith Alliance Unichem and Cadburyrsquos
Other current rolesChairman of RSA Insurance Group plc
Martin Scicluna Chairman
Date of appointment 1 November 2018 Martin joined the Board as Chairman Designate and Non-Executive Director on 1 November 2018 He was appointed as Chairman of the Board on 10 March 2019
Committee membershipChair of the Nomination Committee
Dame Susan Rice Senior Independent Director
Skills and experienceSusan has extensive experience as a Non-Executive Director as well as in retail banking financial services leadership and sustainability Her career in retail bankingis particularly relevant to our ownership ofSainsburyrsquos Bank Previously Susan was a member of the First Ministerrsquos Council of Economic Advisors Managing Director of Lloyds Banking Group Scotland and was previously Chief Executive and then Chairman of Lloyds TSB Scotland plc She has also held a range of other non-executive directorships including at the Bank of England and SSE plc
Committee membershipChair of the Remuneration Committee and a member of the Nomination Committee
Date of appointment 1 June 2013
Other current rolesChair of Scottish Water and Business Stream Chair of the Scottish Fiscal Commission Non-Executive Director of the North American Income Trust C Hoare and Co and Senior Independent Director of the North American Income Trust
9
Other current rolesNon-Executive Director and Chairman of the Audit Committee of Centrica plc
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jean Tomlin Non-Executive Director
Skills and experienceJean has extensive experience and breadth of skills in human resources and corporate responsibility Jean was formerly Director of HR Workforce and Accreditation for The London OrganisingCommittee of the Olympic and Paralympic Games where she set the strategic direction to ensure the mobilisation of the combined 200000-strong workforce including paid staff volunteers and contractors which represented the recruitment and mobilisation of the largest peacetime workforce and set the industry standard for volunteering with the highly acclaimed Games She was previously Group HR Director at Marks and Spencer Group Plc HR Director and founder member of Egg plc and Sales amp Operations Director of Prudential Direct
Date of appointment 1 January 2013
Committee membershipAudit Committee Corporate Responsibility and Sustainability Committee and Nomination Committee
David Keens Non-Executive Director
Skills and experienceDavid has extensive retail experience and knowledge of consumer facing businesses together with his core skills in finance David was formerly Group Finance Director of next plc from 1991 to 2015 and their Group Treasurer from 1986 to 1991 Previous management experience includes nine years in the UK and overseas operations of multinational food manufacturer Nabisco and prior to that seven years in the accountancy profession
Date of appointment 29 April 2015
Committee membershipChair of the Audit Committee and a member of the Nomination Committee
Other current rolesIndependent Board member of Capri Holdings Limited Non-Executive Director of Hakluyt and Chief Executive Officer of Chanzo Limited
Other current rolesNon-Executive Director Senior Independent Director and Chair of the Audit Committee of Auto Trader Group plc
Matt BrittinNon-Executive Director
Skills and experienceMatt has extensive experience of running a high profile fast moving innovative digital business Since 2015 he has been responsible for Googlersquos business and operations in Europe the Middle East and Africa and hersquos been in leadership roles at Google since 2007 Prior to that Matt spent much of his career in media and marketing with particular interests in strategy commercial development and sales performance This included commercial and digital leadership roles in UK media
Date of appointment 27 January 2011
Committee membershipNomination Committee and Remuneration Committee
Other current rolesGooglersquos President ndash Europe Middle East and Africa and Director of The Media Trust
Brian Cassin Non-Executive Director
Skills and experienceBrian brings present day experience of running a FTSE40 group and of big data and analytics ndash topics of key importance to Sainsburyrsquos Brian joined Experian plc as Chief Financial Officer in April 2012 a post he held until his appointment as Chief Executive Officer in July 2014 Prior to this Brian spent his career in investment banking at Greenhill amp Co where he was Managing Director and Partner Brian has also held various roles at Baring Brothers International and at the London Stock Exchange
Date of appointment 1 April 2016
Committee membershipAudit Committee and Nomination Committee
Other current rolesChief Executive Officer of Experian plc
10
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jo Harlow Non-Executive Director
Skills and experienceJo brings a wealth of experience in consumer-facing businesses and in the telecoms and technology industry bothin the UK and internationally Jo spent 12 years in a variety of senior management roles with Nokia and Microsoft Prior to this she spent eight years at PampG and 11 years at Reebok in senior sales and marketing positions in both Europe and the US
Date of appointment 11 September 2017
Committee membershipChair of the Corporate Responsibility and Sustainability Committee and member of the Nomination Committee and Remuneration Committee
Life PresidentLord Sainsbury of Preston Candover KG
Other current rolesNon-Executive Director of InterContinental Hotels plc Non-Executive Director of Halmaplc and Member of the Supervisory Board of Ceconomy AG
11
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief Executive
Tim FallowfieldCompany Secretary amp Corporate Services Director
Kevin OrsquoByrne Chief Financial Officer
Jim BrownChief Executive Officer of Sainsburyrsquos Bank
Paul Mills-HicksFood Commercial Director
Angie RisleyGroup HR Director
Phil JordanGroup Chief InformationOfficer
Simon RobertsRetail and Operations Director
Clo MoriartyGroup Chief Digital Officer
12
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief ExecutiveSee Appendix page 9
Kevin OrsquoByrneChief Financial OfficerSee Appendix page 9
Tim FallowfieldCompany Secretary amp Corporate Services Director
Date of appointment September 2004
Skills and experienceTim joined Sainsburyrsquos in 2001 as Company Secretary and joined the Operating Board in September 2004 In addition to his role as Company Secretary Tim is responsible for the Corporate Services Division comprising Legal Services Data Governance Safety Shareholder Services Insurance and Central Security He chairs the Group Safety Committee and the Data Governance Committee Tim joined Sainsburyrsquos from Exelplc the global logistics company now part of DHL where he was Company Secretary and General Counsel He began his career at the international law firm Clifford Chance and is a qualified solicitor Tim is Chairman of the Disability Confident Business Leaders Group which works with Government in shaping the disability employment agenda and in raising awareness of the benefits of employing disabled people
Jim BrownCEO of Sainsburyrsquos Bank
Skills and experienceJim joined Sainsburyrsquos Bank as CEO in June 2019 and is also a member of the Sainsburyrsquos Group Operating Board He has held a number of senior international Financial Services roles - most recently for RBS in the UK as CEO of Williams and Glyn and prior to that CEO of Ulster Bank in Northern Ireland and the Republic of Ireland Before moving to Ireland he was based in Hong Kong and was CEO Retail and Commercial Banking Asia and the Middle East for RBS and ABN AMRO He has also been a member of the RBS Group Management Committee ABN AMRO Executive Group ABN AMRO Global Consumer Leadership Team and the RBSBank of China Joint Steering Committee Earlier in his career he held a number of senior executive roles for Citibank in Asia and Australia and New Zealand Jim has also held various Board positions including at Ulster Bank Saudi Hollandi Bank The Royal Bank of Scotland (China) Co Ltd and RBS (Pakistan) Ltd He is also a past President of the Institute of Banking in Ireland He is currently a Certified Bank Director
Date of appointment August 2019
Paul Mills-HicksFood Commercial Director
Skills and experiencePaul joined the Operating Board in May 2014 as Food Commercial Director having spent over ten years at Sainsburyrsquos He was closely involved in the formation and execution of the lsquoMaking Sainsburyrsquos Great Againrsquo strategy Following this he held a variety of roles in commercial strategy and finance most recently as Business Unit Director for Grocery Prior to Sainsburyrsquos Paul was European Controller at Marks and Spencer Group PLC and a Director at UBS Warburg
Date of appointment May 2014
13
APPENDIX Interim Results 201920 - November 2019
Operating Board
Angie RisleyGroup HR Director
Skills and experienceAngie was appointed Group HR Director and a member of the Operating Board in January 2013 with responsibility for human resources Angie is also a Director of Sainsburyrsquos Bank plc Angie was most recently Non-Executive Director and Chairman of the Remuneration Committee of Serco plc and prior to this was Group HR Director of Lloyds Banking Group and an Executive Director of Whitbread PLC with responsibility for HR and Corporate Social Responsibility Angie is currently Non-Executive Director and Chair of the Remuneration Committee at Smith amp Nephew plc
Date of appointment January 2013
Phil JordanGroup Chief Information Officer
Skills and experiencePhil joined the Board in January 2018 and has brought a fresh globalperspective on technology to the Operating Board in addition to a wealth of experience in digital data and business transformation Prior to joining Sainsburyrsquos Phil had a long and successful track record in telecommunications Most recently he was Global Chief Information Officer at Telefonica overseeing Digital Transformation and Information Technology and prior to that was Chief Information Officer for Vodafone UKIreland Phil has worked as a Non-Executive Advisor on Technology in the Investment amp Retail Banking sector and is currently a Non-Executive Director of TalkTalk Telecom Group PLC and chairs its Cyber-Security Committee
Date of appointment January 2018
Simon RobertsRetail and Operations Director
Skills and experienceSimon joined Sainsburyrsquos and the Operating Board in July 2017 as Central Retail amp Operations Director responsible for Stores Central operation and Logistics In his previous role he was Executive Vice President of Walgreens Boots Alliance and President of Boots with responsibility for commercial and retail operations across the UK and Ireland Prior to Boots Simon was at Marks and Spencer Group PLC where he held operational and customer leadership roles across stores divisions and central operations Simon is also the Non-Executive Chairman at the Institute ofCustomer Service
Date of appointment July 2017
Clodagh MoriartyGroup Chief Digital Officer
Skills and experienceClodagh was appointed Group Chief Digital Officer in June 2018 Clodagh leads the delivery of a consistent and first-rate digital experience for customers across Sainsburyrsquos Argos and Sainsburyrsquos BankClodagh joined Sainsburyrsquos in 2010 from Bain amp Co management consultants where she had gained experience working on a broad range of projects across multiple sectors and countries Following two years as Head of Strategy at Sainsburyrsquosshe moved into Food Commercial as Category Manager for Meal Solutions and then became Head of Online Trading spanning Food General Merchandise and Clothing before being promoted to Director of Online in 2016 In this role Clodagh was instrumental in driving innovation within Groceries Online and launching new initiatives including SmartShop and Chop Chop
Date of appointment June 2018
14
APPENDIX Interim Results 201920 - November 2019
Supplementary financial details
3 Financial calendarQ3 trading statement(15 weeks to 4 January 2020)
Preliminary results(52 weeks to 7 March 2020)
8 January 2020
30 April 2020
1 Weighted average number of shares
The interim dividend datesOrdinary shares
Ex-dividend 14 November 2019Record 15 November 2019Payment 20 December 2019
Product Quality Framework helps us fund investment
PQF cereals case study
BAU savings to offset cost inflation
Strategic cost transformation 5 year plan
Slide Number 43
Financial Services Priorities
Financial Services reshaping the portfolio
Financial Services key targets
Nectar
Slide Number 48
Digital
We will help our customers live well for less
Slide Number 51
Slide Number 52
Guidance for 201920
Retail sales
Sainsburyrsquos sales area and store numbers
Sainsburyrsquos store estate
Sainsburyrsquos investment programme
Retail margin
Group retail
Plc Board
Plc Board
Plc Board
Plc Board
Operating Board
Operating Board
Operating Board
Supplementary financial details
Contacts
Column1
201819
Grocery
19
GM
7
Clothing
1
To resize chart data range drag lower right corner of range
Grocery
GM
Clothing
24 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
25 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Category tier performance
YoY value share change by tier
12 weeks to September 2019
-03
01
-01
-18
52 weeks to March 2019
Branded
PremiumOwn Brand
Branded
StandardOwn Brand
EconomyOwn Brand
02
-08
-04
00PremiumOwn Brand
StandardOwn Brand
EconomyOwn Brand
Source Nielsen Panel Total FMCG Market Universe Total outlets 52wks data to 9 March 2019 and 12wks data to 21 Sept 2019
26 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Premium private label
Taste the Difference re-launch
bull Over 350 products new repackaged or reformulated
bull Premium ready meals growth now outperforming the market
41
25 2419
Sainsburys Morrisons Tesco Asda
Premium Own Label volume share
Source Nielsen Panel Total FMCG 28 weeks data to 21 September 2019 Premium Own Label share of sales by retailer
27 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Distinctive brands
bull 57 of customers have bought Distinctive Brands since launch
bull On track for pound100m incremental sales
bull 37 new brands in H1 across Fresh and Grocery
bull lsquoTaste of the Futurersquo bays launched in 70 stores- 67 incremental sales
Leon
bull 3 year exclusive partnership
bull 14 products launched
28 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Beauty Rollout
bull Now rolled out to over 60 stores- Sales up over 40
bull Customer numbers up 7
bull Spend per customer up 25
bull Beauty range doubled 1200 additional lines
bull Double digit growth differential against the market
29 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Our values make us different
bull Committed to reduce plastic packaging by 50 by 2025
bull First retailer to remove single use plastic produce and bakery bags from our stores
- Launching reusable bags in fruit and veg aisles
bull Investing in our loose produce offer
bull Removed black plastic trays from ready meals
bull Fresh water stands in cafeacutes for customers to refill bottles
UKrsquos first major retailer to make significant commitment to reduce plastic
30 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Argos category and range focus
bull Availability improvement- Argos master range reduced by c30 over 3 years- Eliminating duplication removing low value items- Better availability of key lines in store
bull Rebalancing into higher margin categories- Gaining share in Furniture1
More distinctive rangemore reason to shop at Sainsburyrsquos
Reduced SKU count -20operational efficiencies
Higher cash gross profit +2 YOY
Volumes +8 operational efficiencies
41 Interim Results 201920 - November 2019
Drive efficiency
to invest in the customer
offer
4
BAU savings to offset cost inflation
Manages inflationary pressures
BAU savingsH1 201920
Procurement GNFR
Retail Technology Efficiencies
Retail HRRetail
management structures
Shrink Reduction
42 Interim Results 201920 - November 2019
Drive efficiency
to invest in the customer
offer
4
Strategic cost transformation 5 year plan
Converge Tackle fixed cost
End to end reviews
Retail Operations Marketing and Commercial Operations
Other central support
Logistics and Supply Chain
Project A
Project C
Project D
Shared Services BPO
Property strategy
Project BGNFR procurement
Capital prioritisation
Technology Digital and Corporate Services
pound250-pound350m
pound150-pound250m
pound400-pound600mExecution underway In planning Opportunities identified
pound5bn addressable cost base
43 Interim Results 201920 - November 2019
Grow connected
services
5
44 Interim Results 201920 - November 2019
Grow connected
services
5
Financial Services Priorities
To be the provider of financial services for loyal Sainsburyrsquos and Argos customers
An agile capital and cost efficient provider of simple mobile-led financial services
Vision
Objective
Priorities Reshape Simplify Strengthen
45 Interim Results 201920 - November 2019
Grow connected
services
5
Current Customer Base
Customer Credit Risk Balance Sheet Earnings
Argos Storecards 22m Prime Near Prime
Credit Cards 09m Prime
Personal Loans 05m Prime
Mortgages 9K Exit
Total Lending
Deposits 03m
Insurances 05m Very Low Risk
Travel Money 266 Sites
ATMs 1890
Financial Services reshaping the portfolio
46 Interim Results 201920 - November 2019
Grow connected
services
5
Increase connectivity and value for Group
Stop mortgage acquisition review back book options
No capital input from the Group from now1
Costincome c503 within 5 years
Double UPBT double digit ROCE within 5 years
Upstream cash within 5 years2
Financial Services key targets
Transform the cost base
Improve returns
Financial services cash generative
Reduce risk profile to Group
Stop putting cash in to Financial Services
2
4
6
3
1
5
Focus on Sainsburyrsquos customer base
1 Subject to regulatory changes requirements2 Subject to regulatory approval3 On a Group contribution basis
47 Interim Results 201920 - November 2019
Grow connected
services
5
Nectar
bull Biggest loyalty programme in the UK
bull Over 18 million collectors
bull Most recognised loyalty brand in the UK
bull Launch of Nectar digital- 21 million app users- Increase in overall Nectar participation- Increased levels of personalisation- 138000 new Nectar customers- 1 app on launch weekend
bull Coalition strengthened with addition of Esso in June 2019
48 Interim Results 201920 - November 2019
Provide a seamless customer
experience
6
49 Interim Results 201920 - November 2019
Provide a seamless customer
experience
6
Digital
bull Groceries Online sales penetration of 8- App accounts for over 20 of orders
bull 21 million digital Nectar app users
bull 14 million Argos Financial Services app downloads
bull Smartshop rollout in over 350 stores
Groceries online
Chop Chop
SmartShop
Universaldiscovery
Seamlessfinancialservices
Singlebasket
50 Interim Results 201920 - November 2019
We will help our customers live well for less
Confident in the core Integrated customer offer
One multi brand multi channel business
Strong cash generation supporting investment dividend and allowing deleverage
Financial flexibility and resilience
Sustainable cost reduction covering cost inflation and funding investment in our competitive offer
QampA
APPENDIX Interim Results 201920 - November 2019
Appendices
APPENDIX Interim Results 201920 - November 2019
Guidance for 201920
1
Spacebull Expect to open 2 new Sainsburyrsquos supermarkets and up to 15 convenience storesbull Expect to open around 25 Argos stores in Sainsburyrsquos (of which 11 are
relocations) resulting in around 305 Argos stores in supermarketsbull Expect to close 2 supermarkets around 25 convenience stores and around 20
Argos stores in FY201920 as part of announced property closure programme of 10-15 supermarkets 30-40 convenience stores and 60-70 Argos stores
Financial Servicesbull Financial services underlying operating profit expected to be cpound45m including a
cpound10m benefit as a result of a change in transfer pricing between Argos and Argos Financial Services
bull Financial Services non-underlying costs are expected to be around pound30mbull No further capital injections into the Bank are expected following pound35m in H1 201920
Depreciation and amortisationbull Expect underlying retail depreciation and amortisation of around pound12bn
including cpound500m right of use asset depreciation
CostsOperating cost inflationbull Cost inflation between 2 and 3Cost savingsbull Continue to deliver cost savings to at least offset the impact of cost inflation
Finance costsbull Net finance costs of around pound405m including pound320m lease interest in
201920 following the introduction of IFRS 16
One-off itemsbull In 201920 cash outflows as a result of items excluded from
underlying results should not exceed pound100mbull Property strategy programme one-off costs expected to be
pound230m-pound270m of which cash costs are pound30-40m
Dividendbull Sainsburyrsquos plans to change the full year dividend policy to 19x cover by
underlying earnings (versus 20x previously) to offset the dilutive (non cash) impact of IFRS 16 on underlying earnings
Capital expenditurebull Retail capital expenditure to be around pound550mbull Retail capital expenditure is expected to be around pound550m-pound600m per
annum over the medium term
Net debtbull Net debt before fair value movements on derivatives to reduce by at
least pound300m
Tax ratebull Underlying tax rate to be between 25 and 26
APPENDIX Interim Results 201920 - November 2019
Retail sales
1 Sales including VAT excluding fuel
LFL sales growth1
(10)
Sales from net new space1
04
Total sales growth1
(06)
Supermarkets2
(07)
Convenience20
Groceries Online
70
Channels
(01)(25)
(12)
2 Supermarket sales include Argos SiS sales FY 1819 16
pound139bn
pound103bnGrocery
pound30bnGeneralMerchandise
pound488mClothing
2
Chart1
201819
194
66
1
Sheet1
APPENDIX Interim Results 201920 - November 2019
Sainsburyrsquos sales area and store numbersAs at 21 September 2019
Sainsburyrsquos store estateAs at 21 September 2019
Sq ftsales area
82446
870
40001 to60000
20001 to40000
10000 to20000
Under10000 Total
Over60000
0122122
0197197
0175175
06767
824607
1431
Argos storesArgos in SainsburyrsquosArgos in HomebaseOtherArgos total store numbers
Habitat1
Collection points
594281
8-
883
16317
As at21 Sept 2019
Disposalsclosures
Newstores
As at9 March 2019
17--8
-1
(7)-
(2)-
(9)
-(36)
588288
6-
88216
282
ConvenienceSupermarketsTotal stores
Number of stores
Sq ftsales area
1929350
2279
40001 to60000
20001 to40000
10000 to20000
Under10000 Total
Over60000
-18441844
-58185818
-85018501
-46604660
19292117323102
ConvenienceSupermarketsTotal stores
Space by store size (lsquo000 sq ft)
Argos and Habitat store numbers
1 5 Habitat stores 11 Habitat stores in Sainsburys
4
APPENDIX Interim Results 201920 - November 2019
ClosureBitterne West
Sainsburyrsquos investment programme201920
Q1
Supermarkets ConvenienceNew storesMilton Keynes Brooklands District CentBromley High StLeeds Wike Ridge LaneSalford Harbour CityCanterbury High St
ReplacementMayfair Stratton St
ClosuresMayfairWarren St
Q1Q1Q1Q2Q2
Q2
Q1Q2
5
APPENDIX Interim Results 201920 - November 2019
Retail margin
Retail sales (inc VAT inc fuel)(exc VAT inc fuel)
Retail underlying EBITDAR1
Retail underlying EBITDAR margin 2
at constant fuel pricesRetail underlying operating profit3
Retail underlying operating margin 4
at constant fuel prices
1656714808
10677272
4373030
1661214856
11147575
4873333
030342
30 bps28 bps10333 bps32 bps
1 Retail underlying operating profit before net rental income of pound6 million and underlying depreciation and amortisation of pound636 million2 Retail underlying EBITDAR divided by underlying retail sales excluding VAT3 Retail underlying earnings before interest tax and Sainsburyrsquos underlying share of post-tax profit from joint ventures4 Retail underlying operating profit divided by underlying retail sales excluding VAT
poundm H1201920
H1201819
Change
6
APPENDIX Interim Results 201920 - November 2019
H1201920
H1201819
Group retail
Return on capital employed 1
Net debt to EBITDAR (times)23
Fixed charge cover (times)2
Underlying tax rate Core retail capex sales5
713126
26515
743326
25715
poundm
1 ROCE Return is defined as a 52 week rolling underlying profit before interest and tax Capital employed is defined as group net assets2 Net debt of pound6778 million includes lease obligations under IFRS 16 and perpetual securities treated as debt divided by Group underlying EBITDAR of pound2171 million calculated for a 52-week period to 21 September 20193 Group underlying EBITDAR divided by rent (both capital and interest) and net finance costs where interest on perpetual securities is treated as an underlying finance costs4 52 weeks to 22nd September 2018 is not available due to the implementation of IFRS 16 Comparatives therefore reflect the 52 weeks to 9th March 20195 Includes retail sales inc vat inc fuel
4
4
7
APPENDIX Interim Results 201920 - November 2019
Plc Board
Kevin OrsquoByrneChief Financial Officer
Mike Coupe Group Chief Executive
Dame Susan Rice Senior Independent Director
Matt BrittinNon-Executive Director
Jo HarlowNon-Executive Director
Brian CassinNon-Executive Director
David KeensNon-Executive Director
Jean Tomlin Non-Executive Director
Martin Scicluna Chairman
8
APPENDIX Interim Results 201920 - November 2019
Plc Board
Mike Coupe Group Chief Executive Officer
Skills and experienceAppointed Group Chief Executive Officer on 9 July 2014 Mike has been a member of the Operating Board since October 2004 Mike has vast retail industry experience in trading strategy marketing digital and online as well as multi-site store experience He joined Sainsburyrsquos from Big Food Group where he was a board director of Big Food Group PLC and Managing Director of Iceland Food Stores He previously worked for both Asda and Tesco PLC where he served in a variety of senior management roles
Date of appointment 1 August 2007Mike has served as an Executive Director since 1 August 2007 and as Chief Executive Officer since 9 July 2014
Committee membershipCorporate Responsibility and Sustainability Committee
Kevin OrsquoByrne Chief Financial Officer
Skills and experienceKevin brings to the Board a wealth of retail and finance experience Kevin was previously Chief Executive Officer of Poundland Group Limited until December 2016 and held executive roles at Kingfisher plc from 2008 to 2015 including Divisional Director UK China and Turkey Chief Executive Officer of BampQ UK amp Ireland and Group Finance Director He was previously Group Finance Director of Dixons Retail plc and European Finance Director of Quaker Oats He was a Non-Executive Director of Land Securities Group PLC from 2008 to September 2017 where he was Chairman of the Audit Committee and Senior Independent Director
Date of appointment 9 January 2017
Other current rolesNon-Executive Director of Greene King plc
Skills and experienceMartin brings a breadth of experience and leadership in both executive and non-executive roles His previous roles include positions as the Chairman of Great Portland Estates plc Senior Independent Director and Chair of the Audit Committee of Worldpay Inc and Non-Executive Director and Chair of the Audit Committee of Lloyds Banking Group plc He was a partner at Deloitte LLP for 26 years serving as Chairman from 1995 to 2007 where his clients included Dixons WH Smith Alliance Unichem and Cadburyrsquos
Other current rolesChairman of RSA Insurance Group plc
Martin Scicluna Chairman
Date of appointment 1 November 2018 Martin joined the Board as Chairman Designate and Non-Executive Director on 1 November 2018 He was appointed as Chairman of the Board on 10 March 2019
Committee membershipChair of the Nomination Committee
Dame Susan Rice Senior Independent Director
Skills and experienceSusan has extensive experience as a Non-Executive Director as well as in retail banking financial services leadership and sustainability Her career in retail bankingis particularly relevant to our ownership ofSainsburyrsquos Bank Previously Susan was a member of the First Ministerrsquos Council of Economic Advisors Managing Director of Lloyds Banking Group Scotland and was previously Chief Executive and then Chairman of Lloyds TSB Scotland plc She has also held a range of other non-executive directorships including at the Bank of England and SSE plc
Committee membershipChair of the Remuneration Committee and a member of the Nomination Committee
Date of appointment 1 June 2013
Other current rolesChair of Scottish Water and Business Stream Chair of the Scottish Fiscal Commission Non-Executive Director of the North American Income Trust C Hoare and Co and Senior Independent Director of the North American Income Trust
9
Other current rolesNon-Executive Director and Chairman of the Audit Committee of Centrica plc
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jean Tomlin Non-Executive Director
Skills and experienceJean has extensive experience and breadth of skills in human resources and corporate responsibility Jean was formerly Director of HR Workforce and Accreditation for The London OrganisingCommittee of the Olympic and Paralympic Games where she set the strategic direction to ensure the mobilisation of the combined 200000-strong workforce including paid staff volunteers and contractors which represented the recruitment and mobilisation of the largest peacetime workforce and set the industry standard for volunteering with the highly acclaimed Games She was previously Group HR Director at Marks and Spencer Group Plc HR Director and founder member of Egg plc and Sales amp Operations Director of Prudential Direct
Date of appointment 1 January 2013
Committee membershipAudit Committee Corporate Responsibility and Sustainability Committee and Nomination Committee
David Keens Non-Executive Director
Skills and experienceDavid has extensive retail experience and knowledge of consumer facing businesses together with his core skills in finance David was formerly Group Finance Director of next plc from 1991 to 2015 and their Group Treasurer from 1986 to 1991 Previous management experience includes nine years in the UK and overseas operations of multinational food manufacturer Nabisco and prior to that seven years in the accountancy profession
Date of appointment 29 April 2015
Committee membershipChair of the Audit Committee and a member of the Nomination Committee
Other current rolesIndependent Board member of Capri Holdings Limited Non-Executive Director of Hakluyt and Chief Executive Officer of Chanzo Limited
Other current rolesNon-Executive Director Senior Independent Director and Chair of the Audit Committee of Auto Trader Group plc
Matt BrittinNon-Executive Director
Skills and experienceMatt has extensive experience of running a high profile fast moving innovative digital business Since 2015 he has been responsible for Googlersquos business and operations in Europe the Middle East and Africa and hersquos been in leadership roles at Google since 2007 Prior to that Matt spent much of his career in media and marketing with particular interests in strategy commercial development and sales performance This included commercial and digital leadership roles in UK media
Date of appointment 27 January 2011
Committee membershipNomination Committee and Remuneration Committee
Other current rolesGooglersquos President ndash Europe Middle East and Africa and Director of The Media Trust
Brian Cassin Non-Executive Director
Skills and experienceBrian brings present day experience of running a FTSE40 group and of big data and analytics ndash topics of key importance to Sainsburyrsquos Brian joined Experian plc as Chief Financial Officer in April 2012 a post he held until his appointment as Chief Executive Officer in July 2014 Prior to this Brian spent his career in investment banking at Greenhill amp Co where he was Managing Director and Partner Brian has also held various roles at Baring Brothers International and at the London Stock Exchange
Date of appointment 1 April 2016
Committee membershipAudit Committee and Nomination Committee
Other current rolesChief Executive Officer of Experian plc
10
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jo Harlow Non-Executive Director
Skills and experienceJo brings a wealth of experience in consumer-facing businesses and in the telecoms and technology industry bothin the UK and internationally Jo spent 12 years in a variety of senior management roles with Nokia and Microsoft Prior to this she spent eight years at PampG and 11 years at Reebok in senior sales and marketing positions in both Europe and the US
Date of appointment 11 September 2017
Committee membershipChair of the Corporate Responsibility and Sustainability Committee and member of the Nomination Committee and Remuneration Committee
Life PresidentLord Sainsbury of Preston Candover KG
Other current rolesNon-Executive Director of InterContinental Hotels plc Non-Executive Director of Halmaplc and Member of the Supervisory Board of Ceconomy AG
11
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief Executive
Tim FallowfieldCompany Secretary amp Corporate Services Director
Kevin OrsquoByrne Chief Financial Officer
Jim BrownChief Executive Officer of Sainsburyrsquos Bank
Paul Mills-HicksFood Commercial Director
Angie RisleyGroup HR Director
Phil JordanGroup Chief InformationOfficer
Simon RobertsRetail and Operations Director
Clo MoriartyGroup Chief Digital Officer
12
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief ExecutiveSee Appendix page 9
Kevin OrsquoByrneChief Financial OfficerSee Appendix page 9
Tim FallowfieldCompany Secretary amp Corporate Services Director
Date of appointment September 2004
Skills and experienceTim joined Sainsburyrsquos in 2001 as Company Secretary and joined the Operating Board in September 2004 In addition to his role as Company Secretary Tim is responsible for the Corporate Services Division comprising Legal Services Data Governance Safety Shareholder Services Insurance and Central Security He chairs the Group Safety Committee and the Data Governance Committee Tim joined Sainsburyrsquos from Exelplc the global logistics company now part of DHL where he was Company Secretary and General Counsel He began his career at the international law firm Clifford Chance and is a qualified solicitor Tim is Chairman of the Disability Confident Business Leaders Group which works with Government in shaping the disability employment agenda and in raising awareness of the benefits of employing disabled people
Jim BrownCEO of Sainsburyrsquos Bank
Skills and experienceJim joined Sainsburyrsquos Bank as CEO in June 2019 and is also a member of the Sainsburyrsquos Group Operating Board He has held a number of senior international Financial Services roles - most recently for RBS in the UK as CEO of Williams and Glyn and prior to that CEO of Ulster Bank in Northern Ireland and the Republic of Ireland Before moving to Ireland he was based in Hong Kong and was CEO Retail and Commercial Banking Asia and the Middle East for RBS and ABN AMRO He has also been a member of the RBS Group Management Committee ABN AMRO Executive Group ABN AMRO Global Consumer Leadership Team and the RBSBank of China Joint Steering Committee Earlier in his career he held a number of senior executive roles for Citibank in Asia and Australia and New Zealand Jim has also held various Board positions including at Ulster Bank Saudi Hollandi Bank The Royal Bank of Scotland (China) Co Ltd and RBS (Pakistan) Ltd He is also a past President of the Institute of Banking in Ireland He is currently a Certified Bank Director
Date of appointment August 2019
Paul Mills-HicksFood Commercial Director
Skills and experiencePaul joined the Operating Board in May 2014 as Food Commercial Director having spent over ten years at Sainsburyrsquos He was closely involved in the formation and execution of the lsquoMaking Sainsburyrsquos Great Againrsquo strategy Following this he held a variety of roles in commercial strategy and finance most recently as Business Unit Director for Grocery Prior to Sainsburyrsquos Paul was European Controller at Marks and Spencer Group PLC and a Director at UBS Warburg
Date of appointment May 2014
13
APPENDIX Interim Results 201920 - November 2019
Operating Board
Angie RisleyGroup HR Director
Skills and experienceAngie was appointed Group HR Director and a member of the Operating Board in January 2013 with responsibility for human resources Angie is also a Director of Sainsburyrsquos Bank plc Angie was most recently Non-Executive Director and Chairman of the Remuneration Committee of Serco plc and prior to this was Group HR Director of Lloyds Banking Group and an Executive Director of Whitbread PLC with responsibility for HR and Corporate Social Responsibility Angie is currently Non-Executive Director and Chair of the Remuneration Committee at Smith amp Nephew plc
Date of appointment January 2013
Phil JordanGroup Chief Information Officer
Skills and experiencePhil joined the Board in January 2018 and has brought a fresh globalperspective on technology to the Operating Board in addition to a wealth of experience in digital data and business transformation Prior to joining Sainsburyrsquos Phil had a long and successful track record in telecommunications Most recently he was Global Chief Information Officer at Telefonica overseeing Digital Transformation and Information Technology and prior to that was Chief Information Officer for Vodafone UKIreland Phil has worked as a Non-Executive Advisor on Technology in the Investment amp Retail Banking sector and is currently a Non-Executive Director of TalkTalk Telecom Group PLC and chairs its Cyber-Security Committee
Date of appointment January 2018
Simon RobertsRetail and Operations Director
Skills and experienceSimon joined Sainsburyrsquos and the Operating Board in July 2017 as Central Retail amp Operations Director responsible for Stores Central operation and Logistics In his previous role he was Executive Vice President of Walgreens Boots Alliance and President of Boots with responsibility for commercial and retail operations across the UK and Ireland Prior to Boots Simon was at Marks and Spencer Group PLC where he held operational and customer leadership roles across stores divisions and central operations Simon is also the Non-Executive Chairman at the Institute ofCustomer Service
Date of appointment July 2017
Clodagh MoriartyGroup Chief Digital Officer
Skills and experienceClodagh was appointed Group Chief Digital Officer in June 2018 Clodagh leads the delivery of a consistent and first-rate digital experience for customers across Sainsburyrsquos Argos and Sainsburyrsquos BankClodagh joined Sainsburyrsquos in 2010 from Bain amp Co management consultants where she had gained experience working on a broad range of projects across multiple sectors and countries Following two years as Head of Strategy at Sainsburyrsquosshe moved into Food Commercial as Category Manager for Meal Solutions and then became Head of Online Trading spanning Food General Merchandise and Clothing before being promoted to Director of Online in 2016 In this role Clodagh was instrumental in driving innovation within Groceries Online and launching new initiatives including SmartShop and Chop Chop
Date of appointment June 2018
14
APPENDIX Interim Results 201920 - November 2019
Supplementary financial details
3 Financial calendarQ3 trading statement(15 weeks to 4 January 2020)
Preliminary results(52 weeks to 7 March 2020)
8 January 2020
30 April 2020
1 Weighted average number of shares
The interim dividend datesOrdinary shares
Ex-dividend 14 November 2019Record 15 November 2019Payment 20 December 2019
Product Quality Framework helps us fund investment
PQF cereals case study
BAU savings to offset cost inflation
Strategic cost transformation 5 year plan
Slide Number 43
Financial Services Priorities
Financial Services reshaping the portfolio
Financial Services key targets
Nectar
Slide Number 48
Digital
We will help our customers live well for less
Slide Number 51
Slide Number 52
Guidance for 201920
Retail sales
Sainsburyrsquos sales area and store numbers
Sainsburyrsquos store estate
Sainsburyrsquos investment programme
Retail margin
Group retail
Plc Board
Plc Board
Plc Board
Plc Board
Operating Board
Operating Board
Operating Board
Supplementary financial details
Contacts
Column1
201819
Grocery
19
GM
7
Clothing
1
To resize chart data range drag lower right corner of range
Grocery
GM
Clothing
25 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Category tier performance
YoY value share change by tier
12 weeks to September 2019
-03
01
-01
-18
52 weeks to March 2019
Branded
PremiumOwn Brand
Branded
StandardOwn Brand
EconomyOwn Brand
02
-08
-04
00PremiumOwn Brand
StandardOwn Brand
EconomyOwn Brand
Source Nielsen Panel Total FMCG Market Universe Total outlets 52wks data to 9 March 2019 and 12wks data to 21 Sept 2019
26 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Premium private label
Taste the Difference re-launch
bull Over 350 products new repackaged or reformulated
bull Premium ready meals growth now outperforming the market
41
25 2419
Sainsburys Morrisons Tesco Asda
Premium Own Label volume share
Source Nielsen Panel Total FMCG 28 weeks data to 21 September 2019 Premium Own Label share of sales by retailer
27 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Distinctive brands
bull 57 of customers have bought Distinctive Brands since launch
bull On track for pound100m incremental sales
bull 37 new brands in H1 across Fresh and Grocery
bull lsquoTaste of the Futurersquo bays launched in 70 stores- 67 incremental sales
Leon
bull 3 year exclusive partnership
bull 14 products launched
28 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Beauty Rollout
bull Now rolled out to over 60 stores- Sales up over 40
bull Customer numbers up 7
bull Spend per customer up 25
bull Beauty range doubled 1200 additional lines
bull Double digit growth differential against the market
29 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Our values make us different
bull Committed to reduce plastic packaging by 50 by 2025
bull First retailer to remove single use plastic produce and bakery bags from our stores
- Launching reusable bags in fruit and veg aisles
bull Investing in our loose produce offer
bull Removed black plastic trays from ready meals
bull Fresh water stands in cafeacutes for customers to refill bottles
UKrsquos first major retailer to make significant commitment to reduce plastic
30 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Argos category and range focus
bull Availability improvement- Argos master range reduced by c30 over 3 years- Eliminating duplication removing low value items- Better availability of key lines in store
bull Rebalancing into higher margin categories- Gaining share in Furniture1
More distinctive rangemore reason to shop at Sainsburyrsquos
Reduced SKU count -20operational efficiencies
Higher cash gross profit +2 YOY
Volumes +8 operational efficiencies
41 Interim Results 201920 - November 2019
Drive efficiency
to invest in the customer
offer
4
BAU savings to offset cost inflation
Manages inflationary pressures
BAU savingsH1 201920
Procurement GNFR
Retail Technology Efficiencies
Retail HRRetail
management structures
Shrink Reduction
42 Interim Results 201920 - November 2019
Drive efficiency
to invest in the customer
offer
4
Strategic cost transformation 5 year plan
Converge Tackle fixed cost
End to end reviews
Retail Operations Marketing and Commercial Operations
Other central support
Logistics and Supply Chain
Project A
Project C
Project D
Shared Services BPO
Property strategy
Project BGNFR procurement
Capital prioritisation
Technology Digital and Corporate Services
pound250-pound350m
pound150-pound250m
pound400-pound600mExecution underway In planning Opportunities identified
pound5bn addressable cost base
43 Interim Results 201920 - November 2019
Grow connected
services
5
44 Interim Results 201920 - November 2019
Grow connected
services
5
Financial Services Priorities
To be the provider of financial services for loyal Sainsburyrsquos and Argos customers
An agile capital and cost efficient provider of simple mobile-led financial services
Vision
Objective
Priorities Reshape Simplify Strengthen
45 Interim Results 201920 - November 2019
Grow connected
services
5
Current Customer Base
Customer Credit Risk Balance Sheet Earnings
Argos Storecards 22m Prime Near Prime
Credit Cards 09m Prime
Personal Loans 05m Prime
Mortgages 9K Exit
Total Lending
Deposits 03m
Insurances 05m Very Low Risk
Travel Money 266 Sites
ATMs 1890
Financial Services reshaping the portfolio
46 Interim Results 201920 - November 2019
Grow connected
services
5
Increase connectivity and value for Group
Stop mortgage acquisition review back book options
No capital input from the Group from now1
Costincome c503 within 5 years
Double UPBT double digit ROCE within 5 years
Upstream cash within 5 years2
Financial Services key targets
Transform the cost base
Improve returns
Financial services cash generative
Reduce risk profile to Group
Stop putting cash in to Financial Services
2
4
6
3
1
5
Focus on Sainsburyrsquos customer base
1 Subject to regulatory changes requirements2 Subject to regulatory approval3 On a Group contribution basis
47 Interim Results 201920 - November 2019
Grow connected
services
5
Nectar
bull Biggest loyalty programme in the UK
bull Over 18 million collectors
bull Most recognised loyalty brand in the UK
bull Launch of Nectar digital- 21 million app users- Increase in overall Nectar participation- Increased levels of personalisation- 138000 new Nectar customers- 1 app on launch weekend
bull Coalition strengthened with addition of Esso in June 2019
48 Interim Results 201920 - November 2019
Provide a seamless customer
experience
6
49 Interim Results 201920 - November 2019
Provide a seamless customer
experience
6
Digital
bull Groceries Online sales penetration of 8- App accounts for over 20 of orders
bull 21 million digital Nectar app users
bull 14 million Argos Financial Services app downloads
bull Smartshop rollout in over 350 stores
Groceries online
Chop Chop
SmartShop
Universaldiscovery
Seamlessfinancialservices
Singlebasket
50 Interim Results 201920 - November 2019
We will help our customers live well for less
Confident in the core Integrated customer offer
One multi brand multi channel business
Strong cash generation supporting investment dividend and allowing deleverage
Financial flexibility and resilience
Sustainable cost reduction covering cost inflation and funding investment in our competitive offer
QampA
APPENDIX Interim Results 201920 - November 2019
Appendices
APPENDIX Interim Results 201920 - November 2019
Guidance for 201920
1
Spacebull Expect to open 2 new Sainsburyrsquos supermarkets and up to 15 convenience storesbull Expect to open around 25 Argos stores in Sainsburyrsquos (of which 11 are
relocations) resulting in around 305 Argos stores in supermarketsbull Expect to close 2 supermarkets around 25 convenience stores and around 20
Argos stores in FY201920 as part of announced property closure programme of 10-15 supermarkets 30-40 convenience stores and 60-70 Argos stores
Financial Servicesbull Financial services underlying operating profit expected to be cpound45m including a
cpound10m benefit as a result of a change in transfer pricing between Argos and Argos Financial Services
bull Financial Services non-underlying costs are expected to be around pound30mbull No further capital injections into the Bank are expected following pound35m in H1 201920
Depreciation and amortisationbull Expect underlying retail depreciation and amortisation of around pound12bn
including cpound500m right of use asset depreciation
CostsOperating cost inflationbull Cost inflation between 2 and 3Cost savingsbull Continue to deliver cost savings to at least offset the impact of cost inflation
Finance costsbull Net finance costs of around pound405m including pound320m lease interest in
201920 following the introduction of IFRS 16
One-off itemsbull In 201920 cash outflows as a result of items excluded from
underlying results should not exceed pound100mbull Property strategy programme one-off costs expected to be
pound230m-pound270m of which cash costs are pound30-40m
Dividendbull Sainsburyrsquos plans to change the full year dividend policy to 19x cover by
underlying earnings (versus 20x previously) to offset the dilutive (non cash) impact of IFRS 16 on underlying earnings
Capital expenditurebull Retail capital expenditure to be around pound550mbull Retail capital expenditure is expected to be around pound550m-pound600m per
annum over the medium term
Net debtbull Net debt before fair value movements on derivatives to reduce by at
least pound300m
Tax ratebull Underlying tax rate to be between 25 and 26
APPENDIX Interim Results 201920 - November 2019
Retail sales
1 Sales including VAT excluding fuel
LFL sales growth1
(10)
Sales from net new space1
04
Total sales growth1
(06)
Supermarkets2
(07)
Convenience20
Groceries Online
70
Channels
(01)(25)
(12)
2 Supermarket sales include Argos SiS sales FY 1819 16
pound139bn
pound103bnGrocery
pound30bnGeneralMerchandise
pound488mClothing
2
Chart1
201819
194
66
1
Sheet1
APPENDIX Interim Results 201920 - November 2019
Sainsburyrsquos sales area and store numbersAs at 21 September 2019
Sainsburyrsquos store estateAs at 21 September 2019
Sq ftsales area
82446
870
40001 to60000
20001 to40000
10000 to20000
Under10000 Total
Over60000
0122122
0197197
0175175
06767
824607
1431
Argos storesArgos in SainsburyrsquosArgos in HomebaseOtherArgos total store numbers
Habitat1
Collection points
594281
8-
883
16317
As at21 Sept 2019
Disposalsclosures
Newstores
As at9 March 2019
17--8
-1
(7)-
(2)-
(9)
-(36)
588288
6-
88216
282
ConvenienceSupermarketsTotal stores
Number of stores
Sq ftsales area
1929350
2279
40001 to60000
20001 to40000
10000 to20000
Under10000 Total
Over60000
-18441844
-58185818
-85018501
-46604660
19292117323102
ConvenienceSupermarketsTotal stores
Space by store size (lsquo000 sq ft)
Argos and Habitat store numbers
1 5 Habitat stores 11 Habitat stores in Sainsburys
4
APPENDIX Interim Results 201920 - November 2019
ClosureBitterne West
Sainsburyrsquos investment programme201920
Q1
Supermarkets ConvenienceNew storesMilton Keynes Brooklands District CentBromley High StLeeds Wike Ridge LaneSalford Harbour CityCanterbury High St
ReplacementMayfair Stratton St
ClosuresMayfairWarren St
Q1Q1Q1Q2Q2
Q2
Q1Q2
5
APPENDIX Interim Results 201920 - November 2019
Retail margin
Retail sales (inc VAT inc fuel)(exc VAT inc fuel)
Retail underlying EBITDAR1
Retail underlying EBITDAR margin 2
at constant fuel pricesRetail underlying operating profit3
Retail underlying operating margin 4
at constant fuel prices
1656714808
10677272
4373030
1661214856
11147575
4873333
030342
30 bps28 bps10333 bps32 bps
1 Retail underlying operating profit before net rental income of pound6 million and underlying depreciation and amortisation of pound636 million2 Retail underlying EBITDAR divided by underlying retail sales excluding VAT3 Retail underlying earnings before interest tax and Sainsburyrsquos underlying share of post-tax profit from joint ventures4 Retail underlying operating profit divided by underlying retail sales excluding VAT
poundm H1201920
H1201819
Change
6
APPENDIX Interim Results 201920 - November 2019
H1201920
H1201819
Group retail
Return on capital employed 1
Net debt to EBITDAR (times)23
Fixed charge cover (times)2
Underlying tax rate Core retail capex sales5
713126
26515
743326
25715
poundm
1 ROCE Return is defined as a 52 week rolling underlying profit before interest and tax Capital employed is defined as group net assets2 Net debt of pound6778 million includes lease obligations under IFRS 16 and perpetual securities treated as debt divided by Group underlying EBITDAR of pound2171 million calculated for a 52-week period to 21 September 20193 Group underlying EBITDAR divided by rent (both capital and interest) and net finance costs where interest on perpetual securities is treated as an underlying finance costs4 52 weeks to 22nd September 2018 is not available due to the implementation of IFRS 16 Comparatives therefore reflect the 52 weeks to 9th March 20195 Includes retail sales inc vat inc fuel
4
4
7
APPENDIX Interim Results 201920 - November 2019
Plc Board
Kevin OrsquoByrneChief Financial Officer
Mike Coupe Group Chief Executive
Dame Susan Rice Senior Independent Director
Matt BrittinNon-Executive Director
Jo HarlowNon-Executive Director
Brian CassinNon-Executive Director
David KeensNon-Executive Director
Jean Tomlin Non-Executive Director
Martin Scicluna Chairman
8
APPENDIX Interim Results 201920 - November 2019
Plc Board
Mike Coupe Group Chief Executive Officer
Skills and experienceAppointed Group Chief Executive Officer on 9 July 2014 Mike has been a member of the Operating Board since October 2004 Mike has vast retail industry experience in trading strategy marketing digital and online as well as multi-site store experience He joined Sainsburyrsquos from Big Food Group where he was a board director of Big Food Group PLC and Managing Director of Iceland Food Stores He previously worked for both Asda and Tesco PLC where he served in a variety of senior management roles
Date of appointment 1 August 2007Mike has served as an Executive Director since 1 August 2007 and as Chief Executive Officer since 9 July 2014
Committee membershipCorporate Responsibility and Sustainability Committee
Kevin OrsquoByrne Chief Financial Officer
Skills and experienceKevin brings to the Board a wealth of retail and finance experience Kevin was previously Chief Executive Officer of Poundland Group Limited until December 2016 and held executive roles at Kingfisher plc from 2008 to 2015 including Divisional Director UK China and Turkey Chief Executive Officer of BampQ UK amp Ireland and Group Finance Director He was previously Group Finance Director of Dixons Retail plc and European Finance Director of Quaker Oats He was a Non-Executive Director of Land Securities Group PLC from 2008 to September 2017 where he was Chairman of the Audit Committee and Senior Independent Director
Date of appointment 9 January 2017
Other current rolesNon-Executive Director of Greene King plc
Skills and experienceMartin brings a breadth of experience and leadership in both executive and non-executive roles His previous roles include positions as the Chairman of Great Portland Estates plc Senior Independent Director and Chair of the Audit Committee of Worldpay Inc and Non-Executive Director and Chair of the Audit Committee of Lloyds Banking Group plc He was a partner at Deloitte LLP for 26 years serving as Chairman from 1995 to 2007 where his clients included Dixons WH Smith Alliance Unichem and Cadburyrsquos
Other current rolesChairman of RSA Insurance Group plc
Martin Scicluna Chairman
Date of appointment 1 November 2018 Martin joined the Board as Chairman Designate and Non-Executive Director on 1 November 2018 He was appointed as Chairman of the Board on 10 March 2019
Committee membershipChair of the Nomination Committee
Dame Susan Rice Senior Independent Director
Skills and experienceSusan has extensive experience as a Non-Executive Director as well as in retail banking financial services leadership and sustainability Her career in retail bankingis particularly relevant to our ownership ofSainsburyrsquos Bank Previously Susan was a member of the First Ministerrsquos Council of Economic Advisors Managing Director of Lloyds Banking Group Scotland and was previously Chief Executive and then Chairman of Lloyds TSB Scotland plc She has also held a range of other non-executive directorships including at the Bank of England and SSE plc
Committee membershipChair of the Remuneration Committee and a member of the Nomination Committee
Date of appointment 1 June 2013
Other current rolesChair of Scottish Water and Business Stream Chair of the Scottish Fiscal Commission Non-Executive Director of the North American Income Trust C Hoare and Co and Senior Independent Director of the North American Income Trust
9
Other current rolesNon-Executive Director and Chairman of the Audit Committee of Centrica plc
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jean Tomlin Non-Executive Director
Skills and experienceJean has extensive experience and breadth of skills in human resources and corporate responsibility Jean was formerly Director of HR Workforce and Accreditation for The London OrganisingCommittee of the Olympic and Paralympic Games where she set the strategic direction to ensure the mobilisation of the combined 200000-strong workforce including paid staff volunteers and contractors which represented the recruitment and mobilisation of the largest peacetime workforce and set the industry standard for volunteering with the highly acclaimed Games She was previously Group HR Director at Marks and Spencer Group Plc HR Director and founder member of Egg plc and Sales amp Operations Director of Prudential Direct
Date of appointment 1 January 2013
Committee membershipAudit Committee Corporate Responsibility and Sustainability Committee and Nomination Committee
David Keens Non-Executive Director
Skills and experienceDavid has extensive retail experience and knowledge of consumer facing businesses together with his core skills in finance David was formerly Group Finance Director of next plc from 1991 to 2015 and their Group Treasurer from 1986 to 1991 Previous management experience includes nine years in the UK and overseas operations of multinational food manufacturer Nabisco and prior to that seven years in the accountancy profession
Date of appointment 29 April 2015
Committee membershipChair of the Audit Committee and a member of the Nomination Committee
Other current rolesIndependent Board member of Capri Holdings Limited Non-Executive Director of Hakluyt and Chief Executive Officer of Chanzo Limited
Other current rolesNon-Executive Director Senior Independent Director and Chair of the Audit Committee of Auto Trader Group plc
Matt BrittinNon-Executive Director
Skills and experienceMatt has extensive experience of running a high profile fast moving innovative digital business Since 2015 he has been responsible for Googlersquos business and operations in Europe the Middle East and Africa and hersquos been in leadership roles at Google since 2007 Prior to that Matt spent much of his career in media and marketing with particular interests in strategy commercial development and sales performance This included commercial and digital leadership roles in UK media
Date of appointment 27 January 2011
Committee membershipNomination Committee and Remuneration Committee
Other current rolesGooglersquos President ndash Europe Middle East and Africa and Director of The Media Trust
Brian Cassin Non-Executive Director
Skills and experienceBrian brings present day experience of running a FTSE40 group and of big data and analytics ndash topics of key importance to Sainsburyrsquos Brian joined Experian plc as Chief Financial Officer in April 2012 a post he held until his appointment as Chief Executive Officer in July 2014 Prior to this Brian spent his career in investment banking at Greenhill amp Co where he was Managing Director and Partner Brian has also held various roles at Baring Brothers International and at the London Stock Exchange
Date of appointment 1 April 2016
Committee membershipAudit Committee and Nomination Committee
Other current rolesChief Executive Officer of Experian plc
10
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jo Harlow Non-Executive Director
Skills and experienceJo brings a wealth of experience in consumer-facing businesses and in the telecoms and technology industry bothin the UK and internationally Jo spent 12 years in a variety of senior management roles with Nokia and Microsoft Prior to this she spent eight years at PampG and 11 years at Reebok in senior sales and marketing positions in both Europe and the US
Date of appointment 11 September 2017
Committee membershipChair of the Corporate Responsibility and Sustainability Committee and member of the Nomination Committee and Remuneration Committee
Life PresidentLord Sainsbury of Preston Candover KG
Other current rolesNon-Executive Director of InterContinental Hotels plc Non-Executive Director of Halmaplc and Member of the Supervisory Board of Ceconomy AG
11
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief Executive
Tim FallowfieldCompany Secretary amp Corporate Services Director
Kevin OrsquoByrne Chief Financial Officer
Jim BrownChief Executive Officer of Sainsburyrsquos Bank
Paul Mills-HicksFood Commercial Director
Angie RisleyGroup HR Director
Phil JordanGroup Chief InformationOfficer
Simon RobertsRetail and Operations Director
Clo MoriartyGroup Chief Digital Officer
12
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief ExecutiveSee Appendix page 9
Kevin OrsquoByrneChief Financial OfficerSee Appendix page 9
Tim FallowfieldCompany Secretary amp Corporate Services Director
Date of appointment September 2004
Skills and experienceTim joined Sainsburyrsquos in 2001 as Company Secretary and joined the Operating Board in September 2004 In addition to his role as Company Secretary Tim is responsible for the Corporate Services Division comprising Legal Services Data Governance Safety Shareholder Services Insurance and Central Security He chairs the Group Safety Committee and the Data Governance Committee Tim joined Sainsburyrsquos from Exelplc the global logistics company now part of DHL where he was Company Secretary and General Counsel He began his career at the international law firm Clifford Chance and is a qualified solicitor Tim is Chairman of the Disability Confident Business Leaders Group which works with Government in shaping the disability employment agenda and in raising awareness of the benefits of employing disabled people
Jim BrownCEO of Sainsburyrsquos Bank
Skills and experienceJim joined Sainsburyrsquos Bank as CEO in June 2019 and is also a member of the Sainsburyrsquos Group Operating Board He has held a number of senior international Financial Services roles - most recently for RBS in the UK as CEO of Williams and Glyn and prior to that CEO of Ulster Bank in Northern Ireland and the Republic of Ireland Before moving to Ireland he was based in Hong Kong and was CEO Retail and Commercial Banking Asia and the Middle East for RBS and ABN AMRO He has also been a member of the RBS Group Management Committee ABN AMRO Executive Group ABN AMRO Global Consumer Leadership Team and the RBSBank of China Joint Steering Committee Earlier in his career he held a number of senior executive roles for Citibank in Asia and Australia and New Zealand Jim has also held various Board positions including at Ulster Bank Saudi Hollandi Bank The Royal Bank of Scotland (China) Co Ltd and RBS (Pakistan) Ltd He is also a past President of the Institute of Banking in Ireland He is currently a Certified Bank Director
Date of appointment August 2019
Paul Mills-HicksFood Commercial Director
Skills and experiencePaul joined the Operating Board in May 2014 as Food Commercial Director having spent over ten years at Sainsburyrsquos He was closely involved in the formation and execution of the lsquoMaking Sainsburyrsquos Great Againrsquo strategy Following this he held a variety of roles in commercial strategy and finance most recently as Business Unit Director for Grocery Prior to Sainsburyrsquos Paul was European Controller at Marks and Spencer Group PLC and a Director at UBS Warburg
Date of appointment May 2014
13
APPENDIX Interim Results 201920 - November 2019
Operating Board
Angie RisleyGroup HR Director
Skills and experienceAngie was appointed Group HR Director and a member of the Operating Board in January 2013 with responsibility for human resources Angie is also a Director of Sainsburyrsquos Bank plc Angie was most recently Non-Executive Director and Chairman of the Remuneration Committee of Serco plc and prior to this was Group HR Director of Lloyds Banking Group and an Executive Director of Whitbread PLC with responsibility for HR and Corporate Social Responsibility Angie is currently Non-Executive Director and Chair of the Remuneration Committee at Smith amp Nephew plc
Date of appointment January 2013
Phil JordanGroup Chief Information Officer
Skills and experiencePhil joined the Board in January 2018 and has brought a fresh globalperspective on technology to the Operating Board in addition to a wealth of experience in digital data and business transformation Prior to joining Sainsburyrsquos Phil had a long and successful track record in telecommunications Most recently he was Global Chief Information Officer at Telefonica overseeing Digital Transformation and Information Technology and prior to that was Chief Information Officer for Vodafone UKIreland Phil has worked as a Non-Executive Advisor on Technology in the Investment amp Retail Banking sector and is currently a Non-Executive Director of TalkTalk Telecom Group PLC and chairs its Cyber-Security Committee
Date of appointment January 2018
Simon RobertsRetail and Operations Director
Skills and experienceSimon joined Sainsburyrsquos and the Operating Board in July 2017 as Central Retail amp Operations Director responsible for Stores Central operation and Logistics In his previous role he was Executive Vice President of Walgreens Boots Alliance and President of Boots with responsibility for commercial and retail operations across the UK and Ireland Prior to Boots Simon was at Marks and Spencer Group PLC where he held operational and customer leadership roles across stores divisions and central operations Simon is also the Non-Executive Chairman at the Institute ofCustomer Service
Date of appointment July 2017
Clodagh MoriartyGroup Chief Digital Officer
Skills and experienceClodagh was appointed Group Chief Digital Officer in June 2018 Clodagh leads the delivery of a consistent and first-rate digital experience for customers across Sainsburyrsquos Argos and Sainsburyrsquos BankClodagh joined Sainsburyrsquos in 2010 from Bain amp Co management consultants where she had gained experience working on a broad range of projects across multiple sectors and countries Following two years as Head of Strategy at Sainsburyrsquosshe moved into Food Commercial as Category Manager for Meal Solutions and then became Head of Online Trading spanning Food General Merchandise and Clothing before being promoted to Director of Online in 2016 In this role Clodagh was instrumental in driving innovation within Groceries Online and launching new initiatives including SmartShop and Chop Chop
Date of appointment June 2018
14
APPENDIX Interim Results 201920 - November 2019
Supplementary financial details
3 Financial calendarQ3 trading statement(15 weeks to 4 January 2020)
Preliminary results(52 weeks to 7 March 2020)
8 January 2020
30 April 2020
1 Weighted average number of shares
The interim dividend datesOrdinary shares
Ex-dividend 14 November 2019Record 15 November 2019Payment 20 December 2019
Product Quality Framework helps us fund investment
PQF cereals case study
BAU savings to offset cost inflation
Strategic cost transformation 5 year plan
Slide Number 43
Financial Services Priorities
Financial Services reshaping the portfolio
Financial Services key targets
Nectar
Slide Number 48
Digital
We will help our customers live well for less
Slide Number 51
Slide Number 52
Guidance for 201920
Retail sales
Sainsburyrsquos sales area and store numbers
Sainsburyrsquos store estate
Sainsburyrsquos investment programme
Retail margin
Group retail
Plc Board
Plc Board
Plc Board
Plc Board
Operating Board
Operating Board
Operating Board
Supplementary financial details
Contacts
Column1
201819
Grocery
19
GM
7
Clothing
1
To resize chart data range drag lower right corner of range
Grocery
GM
Clothing
26 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Premium private label
Taste the Difference re-launch
bull Over 350 products new repackaged or reformulated
bull Premium ready meals growth now outperforming the market
41
25 2419
Sainsburys Morrisons Tesco Asda
Premium Own Label volume share
Source Nielsen Panel Total FMCG 28 weeks data to 21 September 2019 Premium Own Label share of sales by retailer
27 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Distinctive brands
bull 57 of customers have bought Distinctive Brands since launch
bull On track for pound100m incremental sales
bull 37 new brands in H1 across Fresh and Grocery
bull lsquoTaste of the Futurersquo bays launched in 70 stores- 67 incremental sales
Leon
bull 3 year exclusive partnership
bull 14 products launched
28 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Beauty Rollout
bull Now rolled out to over 60 stores- Sales up over 40
bull Customer numbers up 7
bull Spend per customer up 25
bull Beauty range doubled 1200 additional lines
bull Double digit growth differential against the market
29 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Our values make us different
bull Committed to reduce plastic packaging by 50 by 2025
bull First retailer to remove single use plastic produce and bakery bags from our stores
- Launching reusable bags in fruit and veg aisles
bull Investing in our loose produce offer
bull Removed black plastic trays from ready meals
bull Fresh water stands in cafeacutes for customers to refill bottles
UKrsquos first major retailer to make significant commitment to reduce plastic
30 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Argos category and range focus
bull Availability improvement- Argos master range reduced by c30 over 3 years- Eliminating duplication removing low value items- Better availability of key lines in store
bull Rebalancing into higher margin categories- Gaining share in Furniture1
More distinctive rangemore reason to shop at Sainsburyrsquos
Reduced SKU count -20operational efficiencies
Higher cash gross profit +2 YOY
Volumes +8 operational efficiencies
41 Interim Results 201920 - November 2019
Drive efficiency
to invest in the customer
offer
4
BAU savings to offset cost inflation
Manages inflationary pressures
BAU savingsH1 201920
Procurement GNFR
Retail Technology Efficiencies
Retail HRRetail
management structures
Shrink Reduction
42 Interim Results 201920 - November 2019
Drive efficiency
to invest in the customer
offer
4
Strategic cost transformation 5 year plan
Converge Tackle fixed cost
End to end reviews
Retail Operations Marketing and Commercial Operations
Other central support
Logistics and Supply Chain
Project A
Project C
Project D
Shared Services BPO
Property strategy
Project BGNFR procurement
Capital prioritisation
Technology Digital and Corporate Services
pound250-pound350m
pound150-pound250m
pound400-pound600mExecution underway In planning Opportunities identified
pound5bn addressable cost base
43 Interim Results 201920 - November 2019
Grow connected
services
5
44 Interim Results 201920 - November 2019
Grow connected
services
5
Financial Services Priorities
To be the provider of financial services for loyal Sainsburyrsquos and Argos customers
An agile capital and cost efficient provider of simple mobile-led financial services
Vision
Objective
Priorities Reshape Simplify Strengthen
45 Interim Results 201920 - November 2019
Grow connected
services
5
Current Customer Base
Customer Credit Risk Balance Sheet Earnings
Argos Storecards 22m Prime Near Prime
Credit Cards 09m Prime
Personal Loans 05m Prime
Mortgages 9K Exit
Total Lending
Deposits 03m
Insurances 05m Very Low Risk
Travel Money 266 Sites
ATMs 1890
Financial Services reshaping the portfolio
46 Interim Results 201920 - November 2019
Grow connected
services
5
Increase connectivity and value for Group
Stop mortgage acquisition review back book options
No capital input from the Group from now1
Costincome c503 within 5 years
Double UPBT double digit ROCE within 5 years
Upstream cash within 5 years2
Financial Services key targets
Transform the cost base
Improve returns
Financial services cash generative
Reduce risk profile to Group
Stop putting cash in to Financial Services
2
4
6
3
1
5
Focus on Sainsburyrsquos customer base
1 Subject to regulatory changes requirements2 Subject to regulatory approval3 On a Group contribution basis
47 Interim Results 201920 - November 2019
Grow connected
services
5
Nectar
bull Biggest loyalty programme in the UK
bull Over 18 million collectors
bull Most recognised loyalty brand in the UK
bull Launch of Nectar digital- 21 million app users- Increase in overall Nectar participation- Increased levels of personalisation- 138000 new Nectar customers- 1 app on launch weekend
bull Coalition strengthened with addition of Esso in June 2019
48 Interim Results 201920 - November 2019
Provide a seamless customer
experience
6
49 Interim Results 201920 - November 2019
Provide a seamless customer
experience
6
Digital
bull Groceries Online sales penetration of 8- App accounts for over 20 of orders
bull 21 million digital Nectar app users
bull 14 million Argos Financial Services app downloads
bull Smartshop rollout in over 350 stores
Groceries online
Chop Chop
SmartShop
Universaldiscovery
Seamlessfinancialservices
Singlebasket
50 Interim Results 201920 - November 2019
We will help our customers live well for less
Confident in the core Integrated customer offer
One multi brand multi channel business
Strong cash generation supporting investment dividend and allowing deleverage
Financial flexibility and resilience
Sustainable cost reduction covering cost inflation and funding investment in our competitive offer
QampA
APPENDIX Interim Results 201920 - November 2019
Appendices
APPENDIX Interim Results 201920 - November 2019
Guidance for 201920
1
Spacebull Expect to open 2 new Sainsburyrsquos supermarkets and up to 15 convenience storesbull Expect to open around 25 Argos stores in Sainsburyrsquos (of which 11 are
relocations) resulting in around 305 Argos stores in supermarketsbull Expect to close 2 supermarkets around 25 convenience stores and around 20
Argos stores in FY201920 as part of announced property closure programme of 10-15 supermarkets 30-40 convenience stores and 60-70 Argos stores
Financial Servicesbull Financial services underlying operating profit expected to be cpound45m including a
cpound10m benefit as a result of a change in transfer pricing between Argos and Argos Financial Services
bull Financial Services non-underlying costs are expected to be around pound30mbull No further capital injections into the Bank are expected following pound35m in H1 201920
Depreciation and amortisationbull Expect underlying retail depreciation and amortisation of around pound12bn
including cpound500m right of use asset depreciation
CostsOperating cost inflationbull Cost inflation between 2 and 3Cost savingsbull Continue to deliver cost savings to at least offset the impact of cost inflation
Finance costsbull Net finance costs of around pound405m including pound320m lease interest in
201920 following the introduction of IFRS 16
One-off itemsbull In 201920 cash outflows as a result of items excluded from
underlying results should not exceed pound100mbull Property strategy programme one-off costs expected to be
pound230m-pound270m of which cash costs are pound30-40m
Dividendbull Sainsburyrsquos plans to change the full year dividend policy to 19x cover by
underlying earnings (versus 20x previously) to offset the dilutive (non cash) impact of IFRS 16 on underlying earnings
Capital expenditurebull Retail capital expenditure to be around pound550mbull Retail capital expenditure is expected to be around pound550m-pound600m per
annum over the medium term
Net debtbull Net debt before fair value movements on derivatives to reduce by at
least pound300m
Tax ratebull Underlying tax rate to be between 25 and 26
APPENDIX Interim Results 201920 - November 2019
Retail sales
1 Sales including VAT excluding fuel
LFL sales growth1
(10)
Sales from net new space1
04
Total sales growth1
(06)
Supermarkets2
(07)
Convenience20
Groceries Online
70
Channels
(01)(25)
(12)
2 Supermarket sales include Argos SiS sales FY 1819 16
pound139bn
pound103bnGrocery
pound30bnGeneralMerchandise
pound488mClothing
2
Chart1
201819
194
66
1
Sheet1
APPENDIX Interim Results 201920 - November 2019
Sainsburyrsquos sales area and store numbersAs at 21 September 2019
Sainsburyrsquos store estateAs at 21 September 2019
Sq ftsales area
82446
870
40001 to60000
20001 to40000
10000 to20000
Under10000 Total
Over60000
0122122
0197197
0175175
06767
824607
1431
Argos storesArgos in SainsburyrsquosArgos in HomebaseOtherArgos total store numbers
Habitat1
Collection points
594281
8-
883
16317
As at21 Sept 2019
Disposalsclosures
Newstores
As at9 March 2019
17--8
-1
(7)-
(2)-
(9)
-(36)
588288
6-
88216
282
ConvenienceSupermarketsTotal stores
Number of stores
Sq ftsales area
1929350
2279
40001 to60000
20001 to40000
10000 to20000
Under10000 Total
Over60000
-18441844
-58185818
-85018501
-46604660
19292117323102
ConvenienceSupermarketsTotal stores
Space by store size (lsquo000 sq ft)
Argos and Habitat store numbers
1 5 Habitat stores 11 Habitat stores in Sainsburys
4
APPENDIX Interim Results 201920 - November 2019
ClosureBitterne West
Sainsburyrsquos investment programme201920
Q1
Supermarkets ConvenienceNew storesMilton Keynes Brooklands District CentBromley High StLeeds Wike Ridge LaneSalford Harbour CityCanterbury High St
ReplacementMayfair Stratton St
ClosuresMayfairWarren St
Q1Q1Q1Q2Q2
Q2
Q1Q2
5
APPENDIX Interim Results 201920 - November 2019
Retail margin
Retail sales (inc VAT inc fuel)(exc VAT inc fuel)
Retail underlying EBITDAR1
Retail underlying EBITDAR margin 2
at constant fuel pricesRetail underlying operating profit3
Retail underlying operating margin 4
at constant fuel prices
1656714808
10677272
4373030
1661214856
11147575
4873333
030342
30 bps28 bps10333 bps32 bps
1 Retail underlying operating profit before net rental income of pound6 million and underlying depreciation and amortisation of pound636 million2 Retail underlying EBITDAR divided by underlying retail sales excluding VAT3 Retail underlying earnings before interest tax and Sainsburyrsquos underlying share of post-tax profit from joint ventures4 Retail underlying operating profit divided by underlying retail sales excluding VAT
poundm H1201920
H1201819
Change
6
APPENDIX Interim Results 201920 - November 2019
H1201920
H1201819
Group retail
Return on capital employed 1
Net debt to EBITDAR (times)23
Fixed charge cover (times)2
Underlying tax rate Core retail capex sales5
713126
26515
743326
25715
poundm
1 ROCE Return is defined as a 52 week rolling underlying profit before interest and tax Capital employed is defined as group net assets2 Net debt of pound6778 million includes lease obligations under IFRS 16 and perpetual securities treated as debt divided by Group underlying EBITDAR of pound2171 million calculated for a 52-week period to 21 September 20193 Group underlying EBITDAR divided by rent (both capital and interest) and net finance costs where interest on perpetual securities is treated as an underlying finance costs4 52 weeks to 22nd September 2018 is not available due to the implementation of IFRS 16 Comparatives therefore reflect the 52 weeks to 9th March 20195 Includes retail sales inc vat inc fuel
4
4
7
APPENDIX Interim Results 201920 - November 2019
Plc Board
Kevin OrsquoByrneChief Financial Officer
Mike Coupe Group Chief Executive
Dame Susan Rice Senior Independent Director
Matt BrittinNon-Executive Director
Jo HarlowNon-Executive Director
Brian CassinNon-Executive Director
David KeensNon-Executive Director
Jean Tomlin Non-Executive Director
Martin Scicluna Chairman
8
APPENDIX Interim Results 201920 - November 2019
Plc Board
Mike Coupe Group Chief Executive Officer
Skills and experienceAppointed Group Chief Executive Officer on 9 July 2014 Mike has been a member of the Operating Board since October 2004 Mike has vast retail industry experience in trading strategy marketing digital and online as well as multi-site store experience He joined Sainsburyrsquos from Big Food Group where he was a board director of Big Food Group PLC and Managing Director of Iceland Food Stores He previously worked for both Asda and Tesco PLC where he served in a variety of senior management roles
Date of appointment 1 August 2007Mike has served as an Executive Director since 1 August 2007 and as Chief Executive Officer since 9 July 2014
Committee membershipCorporate Responsibility and Sustainability Committee
Kevin OrsquoByrne Chief Financial Officer
Skills and experienceKevin brings to the Board a wealth of retail and finance experience Kevin was previously Chief Executive Officer of Poundland Group Limited until December 2016 and held executive roles at Kingfisher plc from 2008 to 2015 including Divisional Director UK China and Turkey Chief Executive Officer of BampQ UK amp Ireland and Group Finance Director He was previously Group Finance Director of Dixons Retail plc and European Finance Director of Quaker Oats He was a Non-Executive Director of Land Securities Group PLC from 2008 to September 2017 where he was Chairman of the Audit Committee and Senior Independent Director
Date of appointment 9 January 2017
Other current rolesNon-Executive Director of Greene King plc
Skills and experienceMartin brings a breadth of experience and leadership in both executive and non-executive roles His previous roles include positions as the Chairman of Great Portland Estates plc Senior Independent Director and Chair of the Audit Committee of Worldpay Inc and Non-Executive Director and Chair of the Audit Committee of Lloyds Banking Group plc He was a partner at Deloitte LLP for 26 years serving as Chairman from 1995 to 2007 where his clients included Dixons WH Smith Alliance Unichem and Cadburyrsquos
Other current rolesChairman of RSA Insurance Group plc
Martin Scicluna Chairman
Date of appointment 1 November 2018 Martin joined the Board as Chairman Designate and Non-Executive Director on 1 November 2018 He was appointed as Chairman of the Board on 10 March 2019
Committee membershipChair of the Nomination Committee
Dame Susan Rice Senior Independent Director
Skills and experienceSusan has extensive experience as a Non-Executive Director as well as in retail banking financial services leadership and sustainability Her career in retail bankingis particularly relevant to our ownership ofSainsburyrsquos Bank Previously Susan was a member of the First Ministerrsquos Council of Economic Advisors Managing Director of Lloyds Banking Group Scotland and was previously Chief Executive and then Chairman of Lloyds TSB Scotland plc She has also held a range of other non-executive directorships including at the Bank of England and SSE plc
Committee membershipChair of the Remuneration Committee and a member of the Nomination Committee
Date of appointment 1 June 2013
Other current rolesChair of Scottish Water and Business Stream Chair of the Scottish Fiscal Commission Non-Executive Director of the North American Income Trust C Hoare and Co and Senior Independent Director of the North American Income Trust
9
Other current rolesNon-Executive Director and Chairman of the Audit Committee of Centrica plc
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jean Tomlin Non-Executive Director
Skills and experienceJean has extensive experience and breadth of skills in human resources and corporate responsibility Jean was formerly Director of HR Workforce and Accreditation for The London OrganisingCommittee of the Olympic and Paralympic Games where she set the strategic direction to ensure the mobilisation of the combined 200000-strong workforce including paid staff volunteers and contractors which represented the recruitment and mobilisation of the largest peacetime workforce and set the industry standard for volunteering with the highly acclaimed Games She was previously Group HR Director at Marks and Spencer Group Plc HR Director and founder member of Egg plc and Sales amp Operations Director of Prudential Direct
Date of appointment 1 January 2013
Committee membershipAudit Committee Corporate Responsibility and Sustainability Committee and Nomination Committee
David Keens Non-Executive Director
Skills and experienceDavid has extensive retail experience and knowledge of consumer facing businesses together with his core skills in finance David was formerly Group Finance Director of next plc from 1991 to 2015 and their Group Treasurer from 1986 to 1991 Previous management experience includes nine years in the UK and overseas operations of multinational food manufacturer Nabisco and prior to that seven years in the accountancy profession
Date of appointment 29 April 2015
Committee membershipChair of the Audit Committee and a member of the Nomination Committee
Other current rolesIndependent Board member of Capri Holdings Limited Non-Executive Director of Hakluyt and Chief Executive Officer of Chanzo Limited
Other current rolesNon-Executive Director Senior Independent Director and Chair of the Audit Committee of Auto Trader Group plc
Matt BrittinNon-Executive Director
Skills and experienceMatt has extensive experience of running a high profile fast moving innovative digital business Since 2015 he has been responsible for Googlersquos business and operations in Europe the Middle East and Africa and hersquos been in leadership roles at Google since 2007 Prior to that Matt spent much of his career in media and marketing with particular interests in strategy commercial development and sales performance This included commercial and digital leadership roles in UK media
Date of appointment 27 January 2011
Committee membershipNomination Committee and Remuneration Committee
Other current rolesGooglersquos President ndash Europe Middle East and Africa and Director of The Media Trust
Brian Cassin Non-Executive Director
Skills and experienceBrian brings present day experience of running a FTSE40 group and of big data and analytics ndash topics of key importance to Sainsburyrsquos Brian joined Experian plc as Chief Financial Officer in April 2012 a post he held until his appointment as Chief Executive Officer in July 2014 Prior to this Brian spent his career in investment banking at Greenhill amp Co where he was Managing Director and Partner Brian has also held various roles at Baring Brothers International and at the London Stock Exchange
Date of appointment 1 April 2016
Committee membershipAudit Committee and Nomination Committee
Other current rolesChief Executive Officer of Experian plc
10
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jo Harlow Non-Executive Director
Skills and experienceJo brings a wealth of experience in consumer-facing businesses and in the telecoms and technology industry bothin the UK and internationally Jo spent 12 years in a variety of senior management roles with Nokia and Microsoft Prior to this she spent eight years at PampG and 11 years at Reebok in senior sales and marketing positions in both Europe and the US
Date of appointment 11 September 2017
Committee membershipChair of the Corporate Responsibility and Sustainability Committee and member of the Nomination Committee and Remuneration Committee
Life PresidentLord Sainsbury of Preston Candover KG
Other current rolesNon-Executive Director of InterContinental Hotels plc Non-Executive Director of Halmaplc and Member of the Supervisory Board of Ceconomy AG
11
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief Executive
Tim FallowfieldCompany Secretary amp Corporate Services Director
Kevin OrsquoByrne Chief Financial Officer
Jim BrownChief Executive Officer of Sainsburyrsquos Bank
Paul Mills-HicksFood Commercial Director
Angie RisleyGroup HR Director
Phil JordanGroup Chief InformationOfficer
Simon RobertsRetail and Operations Director
Clo MoriartyGroup Chief Digital Officer
12
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief ExecutiveSee Appendix page 9
Kevin OrsquoByrneChief Financial OfficerSee Appendix page 9
Tim FallowfieldCompany Secretary amp Corporate Services Director
Date of appointment September 2004
Skills and experienceTim joined Sainsburyrsquos in 2001 as Company Secretary and joined the Operating Board in September 2004 In addition to his role as Company Secretary Tim is responsible for the Corporate Services Division comprising Legal Services Data Governance Safety Shareholder Services Insurance and Central Security He chairs the Group Safety Committee and the Data Governance Committee Tim joined Sainsburyrsquos from Exelplc the global logistics company now part of DHL where he was Company Secretary and General Counsel He began his career at the international law firm Clifford Chance and is a qualified solicitor Tim is Chairman of the Disability Confident Business Leaders Group which works with Government in shaping the disability employment agenda and in raising awareness of the benefits of employing disabled people
Jim BrownCEO of Sainsburyrsquos Bank
Skills and experienceJim joined Sainsburyrsquos Bank as CEO in June 2019 and is also a member of the Sainsburyrsquos Group Operating Board He has held a number of senior international Financial Services roles - most recently for RBS in the UK as CEO of Williams and Glyn and prior to that CEO of Ulster Bank in Northern Ireland and the Republic of Ireland Before moving to Ireland he was based in Hong Kong and was CEO Retail and Commercial Banking Asia and the Middle East for RBS and ABN AMRO He has also been a member of the RBS Group Management Committee ABN AMRO Executive Group ABN AMRO Global Consumer Leadership Team and the RBSBank of China Joint Steering Committee Earlier in his career he held a number of senior executive roles for Citibank in Asia and Australia and New Zealand Jim has also held various Board positions including at Ulster Bank Saudi Hollandi Bank The Royal Bank of Scotland (China) Co Ltd and RBS (Pakistan) Ltd He is also a past President of the Institute of Banking in Ireland He is currently a Certified Bank Director
Date of appointment August 2019
Paul Mills-HicksFood Commercial Director
Skills and experiencePaul joined the Operating Board in May 2014 as Food Commercial Director having spent over ten years at Sainsburyrsquos He was closely involved in the formation and execution of the lsquoMaking Sainsburyrsquos Great Againrsquo strategy Following this he held a variety of roles in commercial strategy and finance most recently as Business Unit Director for Grocery Prior to Sainsburyrsquos Paul was European Controller at Marks and Spencer Group PLC and a Director at UBS Warburg
Date of appointment May 2014
13
APPENDIX Interim Results 201920 - November 2019
Operating Board
Angie RisleyGroup HR Director
Skills and experienceAngie was appointed Group HR Director and a member of the Operating Board in January 2013 with responsibility for human resources Angie is also a Director of Sainsburyrsquos Bank plc Angie was most recently Non-Executive Director and Chairman of the Remuneration Committee of Serco plc and prior to this was Group HR Director of Lloyds Banking Group and an Executive Director of Whitbread PLC with responsibility for HR and Corporate Social Responsibility Angie is currently Non-Executive Director and Chair of the Remuneration Committee at Smith amp Nephew plc
Date of appointment January 2013
Phil JordanGroup Chief Information Officer
Skills and experiencePhil joined the Board in January 2018 and has brought a fresh globalperspective on technology to the Operating Board in addition to a wealth of experience in digital data and business transformation Prior to joining Sainsburyrsquos Phil had a long and successful track record in telecommunications Most recently he was Global Chief Information Officer at Telefonica overseeing Digital Transformation and Information Technology and prior to that was Chief Information Officer for Vodafone UKIreland Phil has worked as a Non-Executive Advisor on Technology in the Investment amp Retail Banking sector and is currently a Non-Executive Director of TalkTalk Telecom Group PLC and chairs its Cyber-Security Committee
Date of appointment January 2018
Simon RobertsRetail and Operations Director
Skills and experienceSimon joined Sainsburyrsquos and the Operating Board in July 2017 as Central Retail amp Operations Director responsible for Stores Central operation and Logistics In his previous role he was Executive Vice President of Walgreens Boots Alliance and President of Boots with responsibility for commercial and retail operations across the UK and Ireland Prior to Boots Simon was at Marks and Spencer Group PLC where he held operational and customer leadership roles across stores divisions and central operations Simon is also the Non-Executive Chairman at the Institute ofCustomer Service
Date of appointment July 2017
Clodagh MoriartyGroup Chief Digital Officer
Skills and experienceClodagh was appointed Group Chief Digital Officer in June 2018 Clodagh leads the delivery of a consistent and first-rate digital experience for customers across Sainsburyrsquos Argos and Sainsburyrsquos BankClodagh joined Sainsburyrsquos in 2010 from Bain amp Co management consultants where she had gained experience working on a broad range of projects across multiple sectors and countries Following two years as Head of Strategy at Sainsburyrsquosshe moved into Food Commercial as Category Manager for Meal Solutions and then became Head of Online Trading spanning Food General Merchandise and Clothing before being promoted to Director of Online in 2016 In this role Clodagh was instrumental in driving innovation within Groceries Online and launching new initiatives including SmartShop and Chop Chop
Date of appointment June 2018
14
APPENDIX Interim Results 201920 - November 2019
Supplementary financial details
3 Financial calendarQ3 trading statement(15 weeks to 4 January 2020)
Preliminary results(52 weeks to 7 March 2020)
8 January 2020
30 April 2020
1 Weighted average number of shares
The interim dividend datesOrdinary shares
Ex-dividend 14 November 2019Record 15 November 2019Payment 20 December 2019
Product Quality Framework helps us fund investment
PQF cereals case study
BAU savings to offset cost inflation
Strategic cost transformation 5 year plan
Slide Number 43
Financial Services Priorities
Financial Services reshaping the portfolio
Financial Services key targets
Nectar
Slide Number 48
Digital
We will help our customers live well for less
Slide Number 51
Slide Number 52
Guidance for 201920
Retail sales
Sainsburyrsquos sales area and store numbers
Sainsburyrsquos store estate
Sainsburyrsquos investment programme
Retail margin
Group retail
Plc Board
Plc Board
Plc Board
Plc Board
Operating Board
Operating Board
Operating Board
Supplementary financial details
Contacts
Column1
201819
Grocery
19
GM
7
Clothing
1
To resize chart data range drag lower right corner of range
Grocery
GM
Clothing
27 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Distinctive brands
bull 57 of customers have bought Distinctive Brands since launch
bull On track for pound100m incremental sales
bull 37 new brands in H1 across Fresh and Grocery
bull lsquoTaste of the Futurersquo bays launched in 70 stores- 67 incremental sales
Leon
bull 3 year exclusive partnership
bull 14 products launched
28 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Beauty Rollout
bull Now rolled out to over 60 stores- Sales up over 40
bull Customer numbers up 7
bull Spend per customer up 25
bull Beauty range doubled 1200 additional lines
bull Double digit growth differential against the market
29 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Our values make us different
bull Committed to reduce plastic packaging by 50 by 2025
bull First retailer to remove single use plastic produce and bakery bags from our stores
- Launching reusable bags in fruit and veg aisles
bull Investing in our loose produce offer
bull Removed black plastic trays from ready meals
bull Fresh water stands in cafeacutes for customers to refill bottles
UKrsquos first major retailer to make significant commitment to reduce plastic
30 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Argos category and range focus
bull Availability improvement- Argos master range reduced by c30 over 3 years- Eliminating duplication removing low value items- Better availability of key lines in store
bull Rebalancing into higher margin categories- Gaining share in Furniture1
More distinctive rangemore reason to shop at Sainsburyrsquos
Reduced SKU count -20operational efficiencies
Higher cash gross profit +2 YOY
Volumes +8 operational efficiencies
41 Interim Results 201920 - November 2019
Drive efficiency
to invest in the customer
offer
4
BAU savings to offset cost inflation
Manages inflationary pressures
BAU savingsH1 201920
Procurement GNFR
Retail Technology Efficiencies
Retail HRRetail
management structures
Shrink Reduction
42 Interim Results 201920 - November 2019
Drive efficiency
to invest in the customer
offer
4
Strategic cost transformation 5 year plan
Converge Tackle fixed cost
End to end reviews
Retail Operations Marketing and Commercial Operations
Other central support
Logistics and Supply Chain
Project A
Project C
Project D
Shared Services BPO
Property strategy
Project BGNFR procurement
Capital prioritisation
Technology Digital and Corporate Services
pound250-pound350m
pound150-pound250m
pound400-pound600mExecution underway In planning Opportunities identified
pound5bn addressable cost base
43 Interim Results 201920 - November 2019
Grow connected
services
5
44 Interim Results 201920 - November 2019
Grow connected
services
5
Financial Services Priorities
To be the provider of financial services for loyal Sainsburyrsquos and Argos customers
An agile capital and cost efficient provider of simple mobile-led financial services
Vision
Objective
Priorities Reshape Simplify Strengthen
45 Interim Results 201920 - November 2019
Grow connected
services
5
Current Customer Base
Customer Credit Risk Balance Sheet Earnings
Argos Storecards 22m Prime Near Prime
Credit Cards 09m Prime
Personal Loans 05m Prime
Mortgages 9K Exit
Total Lending
Deposits 03m
Insurances 05m Very Low Risk
Travel Money 266 Sites
ATMs 1890
Financial Services reshaping the portfolio
46 Interim Results 201920 - November 2019
Grow connected
services
5
Increase connectivity and value for Group
Stop mortgage acquisition review back book options
No capital input from the Group from now1
Costincome c503 within 5 years
Double UPBT double digit ROCE within 5 years
Upstream cash within 5 years2
Financial Services key targets
Transform the cost base
Improve returns
Financial services cash generative
Reduce risk profile to Group
Stop putting cash in to Financial Services
2
4
6
3
1
5
Focus on Sainsburyrsquos customer base
1 Subject to regulatory changes requirements2 Subject to regulatory approval3 On a Group contribution basis
47 Interim Results 201920 - November 2019
Grow connected
services
5
Nectar
bull Biggest loyalty programme in the UK
bull Over 18 million collectors
bull Most recognised loyalty brand in the UK
bull Launch of Nectar digital- 21 million app users- Increase in overall Nectar participation- Increased levels of personalisation- 138000 new Nectar customers- 1 app on launch weekend
bull Coalition strengthened with addition of Esso in June 2019
48 Interim Results 201920 - November 2019
Provide a seamless customer
experience
6
49 Interim Results 201920 - November 2019
Provide a seamless customer
experience
6
Digital
bull Groceries Online sales penetration of 8- App accounts for over 20 of orders
bull 21 million digital Nectar app users
bull 14 million Argos Financial Services app downloads
bull Smartshop rollout in over 350 stores
Groceries online
Chop Chop
SmartShop
Universaldiscovery
Seamlessfinancialservices
Singlebasket
50 Interim Results 201920 - November 2019
We will help our customers live well for less
Confident in the core Integrated customer offer
One multi brand multi channel business
Strong cash generation supporting investment dividend and allowing deleverage
Financial flexibility and resilience
Sustainable cost reduction covering cost inflation and funding investment in our competitive offer
QampA
APPENDIX Interim Results 201920 - November 2019
Appendices
APPENDIX Interim Results 201920 - November 2019
Guidance for 201920
1
Spacebull Expect to open 2 new Sainsburyrsquos supermarkets and up to 15 convenience storesbull Expect to open around 25 Argos stores in Sainsburyrsquos (of which 11 are
relocations) resulting in around 305 Argos stores in supermarketsbull Expect to close 2 supermarkets around 25 convenience stores and around 20
Argos stores in FY201920 as part of announced property closure programme of 10-15 supermarkets 30-40 convenience stores and 60-70 Argos stores
Financial Servicesbull Financial services underlying operating profit expected to be cpound45m including a
cpound10m benefit as a result of a change in transfer pricing between Argos and Argos Financial Services
bull Financial Services non-underlying costs are expected to be around pound30mbull No further capital injections into the Bank are expected following pound35m in H1 201920
Depreciation and amortisationbull Expect underlying retail depreciation and amortisation of around pound12bn
including cpound500m right of use asset depreciation
CostsOperating cost inflationbull Cost inflation between 2 and 3Cost savingsbull Continue to deliver cost savings to at least offset the impact of cost inflation
Finance costsbull Net finance costs of around pound405m including pound320m lease interest in
201920 following the introduction of IFRS 16
One-off itemsbull In 201920 cash outflows as a result of items excluded from
underlying results should not exceed pound100mbull Property strategy programme one-off costs expected to be
pound230m-pound270m of which cash costs are pound30-40m
Dividendbull Sainsburyrsquos plans to change the full year dividend policy to 19x cover by
underlying earnings (versus 20x previously) to offset the dilutive (non cash) impact of IFRS 16 on underlying earnings
Capital expenditurebull Retail capital expenditure to be around pound550mbull Retail capital expenditure is expected to be around pound550m-pound600m per
annum over the medium term
Net debtbull Net debt before fair value movements on derivatives to reduce by at
least pound300m
Tax ratebull Underlying tax rate to be between 25 and 26
APPENDIX Interim Results 201920 - November 2019
Retail sales
1 Sales including VAT excluding fuel
LFL sales growth1
(10)
Sales from net new space1
04
Total sales growth1
(06)
Supermarkets2
(07)
Convenience20
Groceries Online
70
Channels
(01)(25)
(12)
2 Supermarket sales include Argos SiS sales FY 1819 16
pound139bn
pound103bnGrocery
pound30bnGeneralMerchandise
pound488mClothing
2
Chart1
201819
194
66
1
Sheet1
APPENDIX Interim Results 201920 - November 2019
Sainsburyrsquos sales area and store numbersAs at 21 September 2019
Sainsburyrsquos store estateAs at 21 September 2019
Sq ftsales area
82446
870
40001 to60000
20001 to40000
10000 to20000
Under10000 Total
Over60000
0122122
0197197
0175175
06767
824607
1431
Argos storesArgos in SainsburyrsquosArgos in HomebaseOtherArgos total store numbers
Habitat1
Collection points
594281
8-
883
16317
As at21 Sept 2019
Disposalsclosures
Newstores
As at9 March 2019
17--8
-1
(7)-
(2)-
(9)
-(36)
588288
6-
88216
282
ConvenienceSupermarketsTotal stores
Number of stores
Sq ftsales area
1929350
2279
40001 to60000
20001 to40000
10000 to20000
Under10000 Total
Over60000
-18441844
-58185818
-85018501
-46604660
19292117323102
ConvenienceSupermarketsTotal stores
Space by store size (lsquo000 sq ft)
Argos and Habitat store numbers
1 5 Habitat stores 11 Habitat stores in Sainsburys
4
APPENDIX Interim Results 201920 - November 2019
ClosureBitterne West
Sainsburyrsquos investment programme201920
Q1
Supermarkets ConvenienceNew storesMilton Keynes Brooklands District CentBromley High StLeeds Wike Ridge LaneSalford Harbour CityCanterbury High St
ReplacementMayfair Stratton St
ClosuresMayfairWarren St
Q1Q1Q1Q2Q2
Q2
Q1Q2
5
APPENDIX Interim Results 201920 - November 2019
Retail margin
Retail sales (inc VAT inc fuel)(exc VAT inc fuel)
Retail underlying EBITDAR1
Retail underlying EBITDAR margin 2
at constant fuel pricesRetail underlying operating profit3
Retail underlying operating margin 4
at constant fuel prices
1656714808
10677272
4373030
1661214856
11147575
4873333
030342
30 bps28 bps10333 bps32 bps
1 Retail underlying operating profit before net rental income of pound6 million and underlying depreciation and amortisation of pound636 million2 Retail underlying EBITDAR divided by underlying retail sales excluding VAT3 Retail underlying earnings before interest tax and Sainsburyrsquos underlying share of post-tax profit from joint ventures4 Retail underlying operating profit divided by underlying retail sales excluding VAT
poundm H1201920
H1201819
Change
6
APPENDIX Interim Results 201920 - November 2019
H1201920
H1201819
Group retail
Return on capital employed 1
Net debt to EBITDAR (times)23
Fixed charge cover (times)2
Underlying tax rate Core retail capex sales5
713126
26515
743326
25715
poundm
1 ROCE Return is defined as a 52 week rolling underlying profit before interest and tax Capital employed is defined as group net assets2 Net debt of pound6778 million includes lease obligations under IFRS 16 and perpetual securities treated as debt divided by Group underlying EBITDAR of pound2171 million calculated for a 52-week period to 21 September 20193 Group underlying EBITDAR divided by rent (both capital and interest) and net finance costs where interest on perpetual securities is treated as an underlying finance costs4 52 weeks to 22nd September 2018 is not available due to the implementation of IFRS 16 Comparatives therefore reflect the 52 weeks to 9th March 20195 Includes retail sales inc vat inc fuel
4
4
7
APPENDIX Interim Results 201920 - November 2019
Plc Board
Kevin OrsquoByrneChief Financial Officer
Mike Coupe Group Chief Executive
Dame Susan Rice Senior Independent Director
Matt BrittinNon-Executive Director
Jo HarlowNon-Executive Director
Brian CassinNon-Executive Director
David KeensNon-Executive Director
Jean Tomlin Non-Executive Director
Martin Scicluna Chairman
8
APPENDIX Interim Results 201920 - November 2019
Plc Board
Mike Coupe Group Chief Executive Officer
Skills and experienceAppointed Group Chief Executive Officer on 9 July 2014 Mike has been a member of the Operating Board since October 2004 Mike has vast retail industry experience in trading strategy marketing digital and online as well as multi-site store experience He joined Sainsburyrsquos from Big Food Group where he was a board director of Big Food Group PLC and Managing Director of Iceland Food Stores He previously worked for both Asda and Tesco PLC where he served in a variety of senior management roles
Date of appointment 1 August 2007Mike has served as an Executive Director since 1 August 2007 and as Chief Executive Officer since 9 July 2014
Committee membershipCorporate Responsibility and Sustainability Committee
Kevin OrsquoByrne Chief Financial Officer
Skills and experienceKevin brings to the Board a wealth of retail and finance experience Kevin was previously Chief Executive Officer of Poundland Group Limited until December 2016 and held executive roles at Kingfisher plc from 2008 to 2015 including Divisional Director UK China and Turkey Chief Executive Officer of BampQ UK amp Ireland and Group Finance Director He was previously Group Finance Director of Dixons Retail plc and European Finance Director of Quaker Oats He was a Non-Executive Director of Land Securities Group PLC from 2008 to September 2017 where he was Chairman of the Audit Committee and Senior Independent Director
Date of appointment 9 January 2017
Other current rolesNon-Executive Director of Greene King plc
Skills and experienceMartin brings a breadth of experience and leadership in both executive and non-executive roles His previous roles include positions as the Chairman of Great Portland Estates plc Senior Independent Director and Chair of the Audit Committee of Worldpay Inc and Non-Executive Director and Chair of the Audit Committee of Lloyds Banking Group plc He was a partner at Deloitte LLP for 26 years serving as Chairman from 1995 to 2007 where his clients included Dixons WH Smith Alliance Unichem and Cadburyrsquos
Other current rolesChairman of RSA Insurance Group plc
Martin Scicluna Chairman
Date of appointment 1 November 2018 Martin joined the Board as Chairman Designate and Non-Executive Director on 1 November 2018 He was appointed as Chairman of the Board on 10 March 2019
Committee membershipChair of the Nomination Committee
Dame Susan Rice Senior Independent Director
Skills and experienceSusan has extensive experience as a Non-Executive Director as well as in retail banking financial services leadership and sustainability Her career in retail bankingis particularly relevant to our ownership ofSainsburyrsquos Bank Previously Susan was a member of the First Ministerrsquos Council of Economic Advisors Managing Director of Lloyds Banking Group Scotland and was previously Chief Executive and then Chairman of Lloyds TSB Scotland plc She has also held a range of other non-executive directorships including at the Bank of England and SSE plc
Committee membershipChair of the Remuneration Committee and a member of the Nomination Committee
Date of appointment 1 June 2013
Other current rolesChair of Scottish Water and Business Stream Chair of the Scottish Fiscal Commission Non-Executive Director of the North American Income Trust C Hoare and Co and Senior Independent Director of the North American Income Trust
9
Other current rolesNon-Executive Director and Chairman of the Audit Committee of Centrica plc
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jean Tomlin Non-Executive Director
Skills and experienceJean has extensive experience and breadth of skills in human resources and corporate responsibility Jean was formerly Director of HR Workforce and Accreditation for The London OrganisingCommittee of the Olympic and Paralympic Games where she set the strategic direction to ensure the mobilisation of the combined 200000-strong workforce including paid staff volunteers and contractors which represented the recruitment and mobilisation of the largest peacetime workforce and set the industry standard for volunteering with the highly acclaimed Games She was previously Group HR Director at Marks and Spencer Group Plc HR Director and founder member of Egg plc and Sales amp Operations Director of Prudential Direct
Date of appointment 1 January 2013
Committee membershipAudit Committee Corporate Responsibility and Sustainability Committee and Nomination Committee
David Keens Non-Executive Director
Skills and experienceDavid has extensive retail experience and knowledge of consumer facing businesses together with his core skills in finance David was formerly Group Finance Director of next plc from 1991 to 2015 and their Group Treasurer from 1986 to 1991 Previous management experience includes nine years in the UK and overseas operations of multinational food manufacturer Nabisco and prior to that seven years in the accountancy profession
Date of appointment 29 April 2015
Committee membershipChair of the Audit Committee and a member of the Nomination Committee
Other current rolesIndependent Board member of Capri Holdings Limited Non-Executive Director of Hakluyt and Chief Executive Officer of Chanzo Limited
Other current rolesNon-Executive Director Senior Independent Director and Chair of the Audit Committee of Auto Trader Group plc
Matt BrittinNon-Executive Director
Skills and experienceMatt has extensive experience of running a high profile fast moving innovative digital business Since 2015 he has been responsible for Googlersquos business and operations in Europe the Middle East and Africa and hersquos been in leadership roles at Google since 2007 Prior to that Matt spent much of his career in media and marketing with particular interests in strategy commercial development and sales performance This included commercial and digital leadership roles in UK media
Date of appointment 27 January 2011
Committee membershipNomination Committee and Remuneration Committee
Other current rolesGooglersquos President ndash Europe Middle East and Africa and Director of The Media Trust
Brian Cassin Non-Executive Director
Skills and experienceBrian brings present day experience of running a FTSE40 group and of big data and analytics ndash topics of key importance to Sainsburyrsquos Brian joined Experian plc as Chief Financial Officer in April 2012 a post he held until his appointment as Chief Executive Officer in July 2014 Prior to this Brian spent his career in investment banking at Greenhill amp Co where he was Managing Director and Partner Brian has also held various roles at Baring Brothers International and at the London Stock Exchange
Date of appointment 1 April 2016
Committee membershipAudit Committee and Nomination Committee
Other current rolesChief Executive Officer of Experian plc
10
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jo Harlow Non-Executive Director
Skills and experienceJo brings a wealth of experience in consumer-facing businesses and in the telecoms and technology industry bothin the UK and internationally Jo spent 12 years in a variety of senior management roles with Nokia and Microsoft Prior to this she spent eight years at PampG and 11 years at Reebok in senior sales and marketing positions in both Europe and the US
Date of appointment 11 September 2017
Committee membershipChair of the Corporate Responsibility and Sustainability Committee and member of the Nomination Committee and Remuneration Committee
Life PresidentLord Sainsbury of Preston Candover KG
Other current rolesNon-Executive Director of InterContinental Hotels plc Non-Executive Director of Halmaplc and Member of the Supervisory Board of Ceconomy AG
11
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief Executive
Tim FallowfieldCompany Secretary amp Corporate Services Director
Kevin OrsquoByrne Chief Financial Officer
Jim BrownChief Executive Officer of Sainsburyrsquos Bank
Paul Mills-HicksFood Commercial Director
Angie RisleyGroup HR Director
Phil JordanGroup Chief InformationOfficer
Simon RobertsRetail and Operations Director
Clo MoriartyGroup Chief Digital Officer
12
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief ExecutiveSee Appendix page 9
Kevin OrsquoByrneChief Financial OfficerSee Appendix page 9
Tim FallowfieldCompany Secretary amp Corporate Services Director
Date of appointment September 2004
Skills and experienceTim joined Sainsburyrsquos in 2001 as Company Secretary and joined the Operating Board in September 2004 In addition to his role as Company Secretary Tim is responsible for the Corporate Services Division comprising Legal Services Data Governance Safety Shareholder Services Insurance and Central Security He chairs the Group Safety Committee and the Data Governance Committee Tim joined Sainsburyrsquos from Exelplc the global logistics company now part of DHL where he was Company Secretary and General Counsel He began his career at the international law firm Clifford Chance and is a qualified solicitor Tim is Chairman of the Disability Confident Business Leaders Group which works with Government in shaping the disability employment agenda and in raising awareness of the benefits of employing disabled people
Jim BrownCEO of Sainsburyrsquos Bank
Skills and experienceJim joined Sainsburyrsquos Bank as CEO in June 2019 and is also a member of the Sainsburyrsquos Group Operating Board He has held a number of senior international Financial Services roles - most recently for RBS in the UK as CEO of Williams and Glyn and prior to that CEO of Ulster Bank in Northern Ireland and the Republic of Ireland Before moving to Ireland he was based in Hong Kong and was CEO Retail and Commercial Banking Asia and the Middle East for RBS and ABN AMRO He has also been a member of the RBS Group Management Committee ABN AMRO Executive Group ABN AMRO Global Consumer Leadership Team and the RBSBank of China Joint Steering Committee Earlier in his career he held a number of senior executive roles for Citibank in Asia and Australia and New Zealand Jim has also held various Board positions including at Ulster Bank Saudi Hollandi Bank The Royal Bank of Scotland (China) Co Ltd and RBS (Pakistan) Ltd He is also a past President of the Institute of Banking in Ireland He is currently a Certified Bank Director
Date of appointment August 2019
Paul Mills-HicksFood Commercial Director
Skills and experiencePaul joined the Operating Board in May 2014 as Food Commercial Director having spent over ten years at Sainsburyrsquos He was closely involved in the formation and execution of the lsquoMaking Sainsburyrsquos Great Againrsquo strategy Following this he held a variety of roles in commercial strategy and finance most recently as Business Unit Director for Grocery Prior to Sainsburyrsquos Paul was European Controller at Marks and Spencer Group PLC and a Director at UBS Warburg
Date of appointment May 2014
13
APPENDIX Interim Results 201920 - November 2019
Operating Board
Angie RisleyGroup HR Director
Skills and experienceAngie was appointed Group HR Director and a member of the Operating Board in January 2013 with responsibility for human resources Angie is also a Director of Sainsburyrsquos Bank plc Angie was most recently Non-Executive Director and Chairman of the Remuneration Committee of Serco plc and prior to this was Group HR Director of Lloyds Banking Group and an Executive Director of Whitbread PLC with responsibility for HR and Corporate Social Responsibility Angie is currently Non-Executive Director and Chair of the Remuneration Committee at Smith amp Nephew plc
Date of appointment January 2013
Phil JordanGroup Chief Information Officer
Skills and experiencePhil joined the Board in January 2018 and has brought a fresh globalperspective on technology to the Operating Board in addition to a wealth of experience in digital data and business transformation Prior to joining Sainsburyrsquos Phil had a long and successful track record in telecommunications Most recently he was Global Chief Information Officer at Telefonica overseeing Digital Transformation and Information Technology and prior to that was Chief Information Officer for Vodafone UKIreland Phil has worked as a Non-Executive Advisor on Technology in the Investment amp Retail Banking sector and is currently a Non-Executive Director of TalkTalk Telecom Group PLC and chairs its Cyber-Security Committee
Date of appointment January 2018
Simon RobertsRetail and Operations Director
Skills and experienceSimon joined Sainsburyrsquos and the Operating Board in July 2017 as Central Retail amp Operations Director responsible for Stores Central operation and Logistics In his previous role he was Executive Vice President of Walgreens Boots Alliance and President of Boots with responsibility for commercial and retail operations across the UK and Ireland Prior to Boots Simon was at Marks and Spencer Group PLC where he held operational and customer leadership roles across stores divisions and central operations Simon is also the Non-Executive Chairman at the Institute ofCustomer Service
Date of appointment July 2017
Clodagh MoriartyGroup Chief Digital Officer
Skills and experienceClodagh was appointed Group Chief Digital Officer in June 2018 Clodagh leads the delivery of a consistent and first-rate digital experience for customers across Sainsburyrsquos Argos and Sainsburyrsquos BankClodagh joined Sainsburyrsquos in 2010 from Bain amp Co management consultants where she had gained experience working on a broad range of projects across multiple sectors and countries Following two years as Head of Strategy at Sainsburyrsquosshe moved into Food Commercial as Category Manager for Meal Solutions and then became Head of Online Trading spanning Food General Merchandise and Clothing before being promoted to Director of Online in 2016 In this role Clodagh was instrumental in driving innovation within Groceries Online and launching new initiatives including SmartShop and Chop Chop
Date of appointment June 2018
14
APPENDIX Interim Results 201920 - November 2019
Supplementary financial details
3 Financial calendarQ3 trading statement(15 weeks to 4 January 2020)
Preliminary results(52 weeks to 7 March 2020)
8 January 2020
30 April 2020
1 Weighted average number of shares
The interim dividend datesOrdinary shares
Ex-dividend 14 November 2019Record 15 November 2019Payment 20 December 2019
Product Quality Framework helps us fund investment
PQF cereals case study
BAU savings to offset cost inflation
Strategic cost transformation 5 year plan
Slide Number 43
Financial Services Priorities
Financial Services reshaping the portfolio
Financial Services key targets
Nectar
Slide Number 48
Digital
We will help our customers live well for less
Slide Number 51
Slide Number 52
Guidance for 201920
Retail sales
Sainsburyrsquos sales area and store numbers
Sainsburyrsquos store estate
Sainsburyrsquos investment programme
Retail margin
Group retail
Plc Board
Plc Board
Plc Board
Plc Board
Operating Board
Operating Board
Operating Board
Supplementary financial details
Contacts
Column1
201819
Grocery
19
GM
7
Clothing
1
To resize chart data range drag lower right corner of range
Grocery
GM
Clothing
28 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Beauty Rollout
bull Now rolled out to over 60 stores- Sales up over 40
bull Customer numbers up 7
bull Spend per customer up 25
bull Beauty range doubled 1200 additional lines
bull Double digit growth differential against the market
29 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Our values make us different
bull Committed to reduce plastic packaging by 50 by 2025
bull First retailer to remove single use plastic produce and bakery bags from our stores
- Launching reusable bags in fruit and veg aisles
bull Investing in our loose produce offer
bull Removed black plastic trays from ready meals
bull Fresh water stands in cafeacutes for customers to refill bottles
UKrsquos first major retailer to make significant commitment to reduce plastic
30 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Argos category and range focus
bull Availability improvement- Argos master range reduced by c30 over 3 years- Eliminating duplication removing low value items- Better availability of key lines in store
bull Rebalancing into higher margin categories- Gaining share in Furniture1
More distinctive rangemore reason to shop at Sainsburyrsquos
Reduced SKU count -20operational efficiencies
Higher cash gross profit +2 YOY
Volumes +8 operational efficiencies
41 Interim Results 201920 - November 2019
Drive efficiency
to invest in the customer
offer
4
BAU savings to offset cost inflation
Manages inflationary pressures
BAU savingsH1 201920
Procurement GNFR
Retail Technology Efficiencies
Retail HRRetail
management structures
Shrink Reduction
42 Interim Results 201920 - November 2019
Drive efficiency
to invest in the customer
offer
4
Strategic cost transformation 5 year plan
Converge Tackle fixed cost
End to end reviews
Retail Operations Marketing and Commercial Operations
Other central support
Logistics and Supply Chain
Project A
Project C
Project D
Shared Services BPO
Property strategy
Project BGNFR procurement
Capital prioritisation
Technology Digital and Corporate Services
pound250-pound350m
pound150-pound250m
pound400-pound600mExecution underway In planning Opportunities identified
pound5bn addressable cost base
43 Interim Results 201920 - November 2019
Grow connected
services
5
44 Interim Results 201920 - November 2019
Grow connected
services
5
Financial Services Priorities
To be the provider of financial services for loyal Sainsburyrsquos and Argos customers
An agile capital and cost efficient provider of simple mobile-led financial services
Vision
Objective
Priorities Reshape Simplify Strengthen
45 Interim Results 201920 - November 2019
Grow connected
services
5
Current Customer Base
Customer Credit Risk Balance Sheet Earnings
Argos Storecards 22m Prime Near Prime
Credit Cards 09m Prime
Personal Loans 05m Prime
Mortgages 9K Exit
Total Lending
Deposits 03m
Insurances 05m Very Low Risk
Travel Money 266 Sites
ATMs 1890
Financial Services reshaping the portfolio
46 Interim Results 201920 - November 2019
Grow connected
services
5
Increase connectivity and value for Group
Stop mortgage acquisition review back book options
No capital input from the Group from now1
Costincome c503 within 5 years
Double UPBT double digit ROCE within 5 years
Upstream cash within 5 years2
Financial Services key targets
Transform the cost base
Improve returns
Financial services cash generative
Reduce risk profile to Group
Stop putting cash in to Financial Services
2
4
6
3
1
5
Focus on Sainsburyrsquos customer base
1 Subject to regulatory changes requirements2 Subject to regulatory approval3 On a Group contribution basis
47 Interim Results 201920 - November 2019
Grow connected
services
5
Nectar
bull Biggest loyalty programme in the UK
bull Over 18 million collectors
bull Most recognised loyalty brand in the UK
bull Launch of Nectar digital- 21 million app users- Increase in overall Nectar participation- Increased levels of personalisation- 138000 new Nectar customers- 1 app on launch weekend
bull Coalition strengthened with addition of Esso in June 2019
48 Interim Results 201920 - November 2019
Provide a seamless customer
experience
6
49 Interim Results 201920 - November 2019
Provide a seamless customer
experience
6
Digital
bull Groceries Online sales penetration of 8- App accounts for over 20 of orders
bull 21 million digital Nectar app users
bull 14 million Argos Financial Services app downloads
bull Smartshop rollout in over 350 stores
Groceries online
Chop Chop
SmartShop
Universaldiscovery
Seamlessfinancialservices
Singlebasket
50 Interim Results 201920 - November 2019
We will help our customers live well for less
Confident in the core Integrated customer offer
One multi brand multi channel business
Strong cash generation supporting investment dividend and allowing deleverage
Financial flexibility and resilience
Sustainable cost reduction covering cost inflation and funding investment in our competitive offer
QampA
APPENDIX Interim Results 201920 - November 2019
Appendices
APPENDIX Interim Results 201920 - November 2019
Guidance for 201920
1
Spacebull Expect to open 2 new Sainsburyrsquos supermarkets and up to 15 convenience storesbull Expect to open around 25 Argos stores in Sainsburyrsquos (of which 11 are
relocations) resulting in around 305 Argos stores in supermarketsbull Expect to close 2 supermarkets around 25 convenience stores and around 20
Argos stores in FY201920 as part of announced property closure programme of 10-15 supermarkets 30-40 convenience stores and 60-70 Argos stores
Financial Servicesbull Financial services underlying operating profit expected to be cpound45m including a
cpound10m benefit as a result of a change in transfer pricing between Argos and Argos Financial Services
bull Financial Services non-underlying costs are expected to be around pound30mbull No further capital injections into the Bank are expected following pound35m in H1 201920
Depreciation and amortisationbull Expect underlying retail depreciation and amortisation of around pound12bn
including cpound500m right of use asset depreciation
CostsOperating cost inflationbull Cost inflation between 2 and 3Cost savingsbull Continue to deliver cost savings to at least offset the impact of cost inflation
Finance costsbull Net finance costs of around pound405m including pound320m lease interest in
201920 following the introduction of IFRS 16
One-off itemsbull In 201920 cash outflows as a result of items excluded from
underlying results should not exceed pound100mbull Property strategy programme one-off costs expected to be
pound230m-pound270m of which cash costs are pound30-40m
Dividendbull Sainsburyrsquos plans to change the full year dividend policy to 19x cover by
underlying earnings (versus 20x previously) to offset the dilutive (non cash) impact of IFRS 16 on underlying earnings
Capital expenditurebull Retail capital expenditure to be around pound550mbull Retail capital expenditure is expected to be around pound550m-pound600m per
annum over the medium term
Net debtbull Net debt before fair value movements on derivatives to reduce by at
least pound300m
Tax ratebull Underlying tax rate to be between 25 and 26
APPENDIX Interim Results 201920 - November 2019
Retail sales
1 Sales including VAT excluding fuel
LFL sales growth1
(10)
Sales from net new space1
04
Total sales growth1
(06)
Supermarkets2
(07)
Convenience20
Groceries Online
70
Channels
(01)(25)
(12)
2 Supermarket sales include Argos SiS sales FY 1819 16
pound139bn
pound103bnGrocery
pound30bnGeneralMerchandise
pound488mClothing
2
Chart1
201819
194
66
1
Sheet1
APPENDIX Interim Results 201920 - November 2019
Sainsburyrsquos sales area and store numbersAs at 21 September 2019
Sainsburyrsquos store estateAs at 21 September 2019
Sq ftsales area
82446
870
40001 to60000
20001 to40000
10000 to20000
Under10000 Total
Over60000
0122122
0197197
0175175
06767
824607
1431
Argos storesArgos in SainsburyrsquosArgos in HomebaseOtherArgos total store numbers
Habitat1
Collection points
594281
8-
883
16317
As at21 Sept 2019
Disposalsclosures
Newstores
As at9 March 2019
17--8
-1
(7)-
(2)-
(9)
-(36)
588288
6-
88216
282
ConvenienceSupermarketsTotal stores
Number of stores
Sq ftsales area
1929350
2279
40001 to60000
20001 to40000
10000 to20000
Under10000 Total
Over60000
-18441844
-58185818
-85018501
-46604660
19292117323102
ConvenienceSupermarketsTotal stores
Space by store size (lsquo000 sq ft)
Argos and Habitat store numbers
1 5 Habitat stores 11 Habitat stores in Sainsburys
4
APPENDIX Interim Results 201920 - November 2019
ClosureBitterne West
Sainsburyrsquos investment programme201920
Q1
Supermarkets ConvenienceNew storesMilton Keynes Brooklands District CentBromley High StLeeds Wike Ridge LaneSalford Harbour CityCanterbury High St
ReplacementMayfair Stratton St
ClosuresMayfairWarren St
Q1Q1Q1Q2Q2
Q2
Q1Q2
5
APPENDIX Interim Results 201920 - November 2019
Retail margin
Retail sales (inc VAT inc fuel)(exc VAT inc fuel)
Retail underlying EBITDAR1
Retail underlying EBITDAR margin 2
at constant fuel pricesRetail underlying operating profit3
Retail underlying operating margin 4
at constant fuel prices
1656714808
10677272
4373030
1661214856
11147575
4873333
030342
30 bps28 bps10333 bps32 bps
1 Retail underlying operating profit before net rental income of pound6 million and underlying depreciation and amortisation of pound636 million2 Retail underlying EBITDAR divided by underlying retail sales excluding VAT3 Retail underlying earnings before interest tax and Sainsburyrsquos underlying share of post-tax profit from joint ventures4 Retail underlying operating profit divided by underlying retail sales excluding VAT
poundm H1201920
H1201819
Change
6
APPENDIX Interim Results 201920 - November 2019
H1201920
H1201819
Group retail
Return on capital employed 1
Net debt to EBITDAR (times)23
Fixed charge cover (times)2
Underlying tax rate Core retail capex sales5
713126
26515
743326
25715
poundm
1 ROCE Return is defined as a 52 week rolling underlying profit before interest and tax Capital employed is defined as group net assets2 Net debt of pound6778 million includes lease obligations under IFRS 16 and perpetual securities treated as debt divided by Group underlying EBITDAR of pound2171 million calculated for a 52-week period to 21 September 20193 Group underlying EBITDAR divided by rent (both capital and interest) and net finance costs where interest on perpetual securities is treated as an underlying finance costs4 52 weeks to 22nd September 2018 is not available due to the implementation of IFRS 16 Comparatives therefore reflect the 52 weeks to 9th March 20195 Includes retail sales inc vat inc fuel
4
4
7
APPENDIX Interim Results 201920 - November 2019
Plc Board
Kevin OrsquoByrneChief Financial Officer
Mike Coupe Group Chief Executive
Dame Susan Rice Senior Independent Director
Matt BrittinNon-Executive Director
Jo HarlowNon-Executive Director
Brian CassinNon-Executive Director
David KeensNon-Executive Director
Jean Tomlin Non-Executive Director
Martin Scicluna Chairman
8
APPENDIX Interim Results 201920 - November 2019
Plc Board
Mike Coupe Group Chief Executive Officer
Skills and experienceAppointed Group Chief Executive Officer on 9 July 2014 Mike has been a member of the Operating Board since October 2004 Mike has vast retail industry experience in trading strategy marketing digital and online as well as multi-site store experience He joined Sainsburyrsquos from Big Food Group where he was a board director of Big Food Group PLC and Managing Director of Iceland Food Stores He previously worked for both Asda and Tesco PLC where he served in a variety of senior management roles
Date of appointment 1 August 2007Mike has served as an Executive Director since 1 August 2007 and as Chief Executive Officer since 9 July 2014
Committee membershipCorporate Responsibility and Sustainability Committee
Kevin OrsquoByrne Chief Financial Officer
Skills and experienceKevin brings to the Board a wealth of retail and finance experience Kevin was previously Chief Executive Officer of Poundland Group Limited until December 2016 and held executive roles at Kingfisher plc from 2008 to 2015 including Divisional Director UK China and Turkey Chief Executive Officer of BampQ UK amp Ireland and Group Finance Director He was previously Group Finance Director of Dixons Retail plc and European Finance Director of Quaker Oats He was a Non-Executive Director of Land Securities Group PLC from 2008 to September 2017 where he was Chairman of the Audit Committee and Senior Independent Director
Date of appointment 9 January 2017
Other current rolesNon-Executive Director of Greene King plc
Skills and experienceMartin brings a breadth of experience and leadership in both executive and non-executive roles His previous roles include positions as the Chairman of Great Portland Estates plc Senior Independent Director and Chair of the Audit Committee of Worldpay Inc and Non-Executive Director and Chair of the Audit Committee of Lloyds Banking Group plc He was a partner at Deloitte LLP for 26 years serving as Chairman from 1995 to 2007 where his clients included Dixons WH Smith Alliance Unichem and Cadburyrsquos
Other current rolesChairman of RSA Insurance Group plc
Martin Scicluna Chairman
Date of appointment 1 November 2018 Martin joined the Board as Chairman Designate and Non-Executive Director on 1 November 2018 He was appointed as Chairman of the Board on 10 March 2019
Committee membershipChair of the Nomination Committee
Dame Susan Rice Senior Independent Director
Skills and experienceSusan has extensive experience as a Non-Executive Director as well as in retail banking financial services leadership and sustainability Her career in retail bankingis particularly relevant to our ownership ofSainsburyrsquos Bank Previously Susan was a member of the First Ministerrsquos Council of Economic Advisors Managing Director of Lloyds Banking Group Scotland and was previously Chief Executive and then Chairman of Lloyds TSB Scotland plc She has also held a range of other non-executive directorships including at the Bank of England and SSE plc
Committee membershipChair of the Remuneration Committee and a member of the Nomination Committee
Date of appointment 1 June 2013
Other current rolesChair of Scottish Water and Business Stream Chair of the Scottish Fiscal Commission Non-Executive Director of the North American Income Trust C Hoare and Co and Senior Independent Director of the North American Income Trust
9
Other current rolesNon-Executive Director and Chairman of the Audit Committee of Centrica plc
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jean Tomlin Non-Executive Director
Skills and experienceJean has extensive experience and breadth of skills in human resources and corporate responsibility Jean was formerly Director of HR Workforce and Accreditation for The London OrganisingCommittee of the Olympic and Paralympic Games where she set the strategic direction to ensure the mobilisation of the combined 200000-strong workforce including paid staff volunteers and contractors which represented the recruitment and mobilisation of the largest peacetime workforce and set the industry standard for volunteering with the highly acclaimed Games She was previously Group HR Director at Marks and Spencer Group Plc HR Director and founder member of Egg plc and Sales amp Operations Director of Prudential Direct
Date of appointment 1 January 2013
Committee membershipAudit Committee Corporate Responsibility and Sustainability Committee and Nomination Committee
David Keens Non-Executive Director
Skills and experienceDavid has extensive retail experience and knowledge of consumer facing businesses together with his core skills in finance David was formerly Group Finance Director of next plc from 1991 to 2015 and their Group Treasurer from 1986 to 1991 Previous management experience includes nine years in the UK and overseas operations of multinational food manufacturer Nabisco and prior to that seven years in the accountancy profession
Date of appointment 29 April 2015
Committee membershipChair of the Audit Committee and a member of the Nomination Committee
Other current rolesIndependent Board member of Capri Holdings Limited Non-Executive Director of Hakluyt and Chief Executive Officer of Chanzo Limited
Other current rolesNon-Executive Director Senior Independent Director and Chair of the Audit Committee of Auto Trader Group plc
Matt BrittinNon-Executive Director
Skills and experienceMatt has extensive experience of running a high profile fast moving innovative digital business Since 2015 he has been responsible for Googlersquos business and operations in Europe the Middle East and Africa and hersquos been in leadership roles at Google since 2007 Prior to that Matt spent much of his career in media and marketing with particular interests in strategy commercial development and sales performance This included commercial and digital leadership roles in UK media
Date of appointment 27 January 2011
Committee membershipNomination Committee and Remuneration Committee
Other current rolesGooglersquos President ndash Europe Middle East and Africa and Director of The Media Trust
Brian Cassin Non-Executive Director
Skills and experienceBrian brings present day experience of running a FTSE40 group and of big data and analytics ndash topics of key importance to Sainsburyrsquos Brian joined Experian plc as Chief Financial Officer in April 2012 a post he held until his appointment as Chief Executive Officer in July 2014 Prior to this Brian spent his career in investment banking at Greenhill amp Co where he was Managing Director and Partner Brian has also held various roles at Baring Brothers International and at the London Stock Exchange
Date of appointment 1 April 2016
Committee membershipAudit Committee and Nomination Committee
Other current rolesChief Executive Officer of Experian plc
10
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jo Harlow Non-Executive Director
Skills and experienceJo brings a wealth of experience in consumer-facing businesses and in the telecoms and technology industry bothin the UK and internationally Jo spent 12 years in a variety of senior management roles with Nokia and Microsoft Prior to this she spent eight years at PampG and 11 years at Reebok in senior sales and marketing positions in both Europe and the US
Date of appointment 11 September 2017
Committee membershipChair of the Corporate Responsibility and Sustainability Committee and member of the Nomination Committee and Remuneration Committee
Life PresidentLord Sainsbury of Preston Candover KG
Other current rolesNon-Executive Director of InterContinental Hotels plc Non-Executive Director of Halmaplc and Member of the Supervisory Board of Ceconomy AG
11
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief Executive
Tim FallowfieldCompany Secretary amp Corporate Services Director
Kevin OrsquoByrne Chief Financial Officer
Jim BrownChief Executive Officer of Sainsburyrsquos Bank
Paul Mills-HicksFood Commercial Director
Angie RisleyGroup HR Director
Phil JordanGroup Chief InformationOfficer
Simon RobertsRetail and Operations Director
Clo MoriartyGroup Chief Digital Officer
12
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief ExecutiveSee Appendix page 9
Kevin OrsquoByrneChief Financial OfficerSee Appendix page 9
Tim FallowfieldCompany Secretary amp Corporate Services Director
Date of appointment September 2004
Skills and experienceTim joined Sainsburyrsquos in 2001 as Company Secretary and joined the Operating Board in September 2004 In addition to his role as Company Secretary Tim is responsible for the Corporate Services Division comprising Legal Services Data Governance Safety Shareholder Services Insurance and Central Security He chairs the Group Safety Committee and the Data Governance Committee Tim joined Sainsburyrsquos from Exelplc the global logistics company now part of DHL where he was Company Secretary and General Counsel He began his career at the international law firm Clifford Chance and is a qualified solicitor Tim is Chairman of the Disability Confident Business Leaders Group which works with Government in shaping the disability employment agenda and in raising awareness of the benefits of employing disabled people
Jim BrownCEO of Sainsburyrsquos Bank
Skills and experienceJim joined Sainsburyrsquos Bank as CEO in June 2019 and is also a member of the Sainsburyrsquos Group Operating Board He has held a number of senior international Financial Services roles - most recently for RBS in the UK as CEO of Williams and Glyn and prior to that CEO of Ulster Bank in Northern Ireland and the Republic of Ireland Before moving to Ireland he was based in Hong Kong and was CEO Retail and Commercial Banking Asia and the Middle East for RBS and ABN AMRO He has also been a member of the RBS Group Management Committee ABN AMRO Executive Group ABN AMRO Global Consumer Leadership Team and the RBSBank of China Joint Steering Committee Earlier in his career he held a number of senior executive roles for Citibank in Asia and Australia and New Zealand Jim has also held various Board positions including at Ulster Bank Saudi Hollandi Bank The Royal Bank of Scotland (China) Co Ltd and RBS (Pakistan) Ltd He is also a past President of the Institute of Banking in Ireland He is currently a Certified Bank Director
Date of appointment August 2019
Paul Mills-HicksFood Commercial Director
Skills and experiencePaul joined the Operating Board in May 2014 as Food Commercial Director having spent over ten years at Sainsburyrsquos He was closely involved in the formation and execution of the lsquoMaking Sainsburyrsquos Great Againrsquo strategy Following this he held a variety of roles in commercial strategy and finance most recently as Business Unit Director for Grocery Prior to Sainsburyrsquos Paul was European Controller at Marks and Spencer Group PLC and a Director at UBS Warburg
Date of appointment May 2014
13
APPENDIX Interim Results 201920 - November 2019
Operating Board
Angie RisleyGroup HR Director
Skills and experienceAngie was appointed Group HR Director and a member of the Operating Board in January 2013 with responsibility for human resources Angie is also a Director of Sainsburyrsquos Bank plc Angie was most recently Non-Executive Director and Chairman of the Remuneration Committee of Serco plc and prior to this was Group HR Director of Lloyds Banking Group and an Executive Director of Whitbread PLC with responsibility for HR and Corporate Social Responsibility Angie is currently Non-Executive Director and Chair of the Remuneration Committee at Smith amp Nephew plc
Date of appointment January 2013
Phil JordanGroup Chief Information Officer
Skills and experiencePhil joined the Board in January 2018 and has brought a fresh globalperspective on technology to the Operating Board in addition to a wealth of experience in digital data and business transformation Prior to joining Sainsburyrsquos Phil had a long and successful track record in telecommunications Most recently he was Global Chief Information Officer at Telefonica overseeing Digital Transformation and Information Technology and prior to that was Chief Information Officer for Vodafone UKIreland Phil has worked as a Non-Executive Advisor on Technology in the Investment amp Retail Banking sector and is currently a Non-Executive Director of TalkTalk Telecom Group PLC and chairs its Cyber-Security Committee
Date of appointment January 2018
Simon RobertsRetail and Operations Director
Skills and experienceSimon joined Sainsburyrsquos and the Operating Board in July 2017 as Central Retail amp Operations Director responsible for Stores Central operation and Logistics In his previous role he was Executive Vice President of Walgreens Boots Alliance and President of Boots with responsibility for commercial and retail operations across the UK and Ireland Prior to Boots Simon was at Marks and Spencer Group PLC where he held operational and customer leadership roles across stores divisions and central operations Simon is also the Non-Executive Chairman at the Institute ofCustomer Service
Date of appointment July 2017
Clodagh MoriartyGroup Chief Digital Officer
Skills and experienceClodagh was appointed Group Chief Digital Officer in June 2018 Clodagh leads the delivery of a consistent and first-rate digital experience for customers across Sainsburyrsquos Argos and Sainsburyrsquos BankClodagh joined Sainsburyrsquos in 2010 from Bain amp Co management consultants where she had gained experience working on a broad range of projects across multiple sectors and countries Following two years as Head of Strategy at Sainsburyrsquosshe moved into Food Commercial as Category Manager for Meal Solutions and then became Head of Online Trading spanning Food General Merchandise and Clothing before being promoted to Director of Online in 2016 In this role Clodagh was instrumental in driving innovation within Groceries Online and launching new initiatives including SmartShop and Chop Chop
Date of appointment June 2018
14
APPENDIX Interim Results 201920 - November 2019
Supplementary financial details
3 Financial calendarQ3 trading statement(15 weeks to 4 January 2020)
Preliminary results(52 weeks to 7 March 2020)
8 January 2020
30 April 2020
1 Weighted average number of shares
The interim dividend datesOrdinary shares
Ex-dividend 14 November 2019Record 15 November 2019Payment 20 December 2019
Product Quality Framework helps us fund investment
PQF cereals case study
BAU savings to offset cost inflation
Strategic cost transformation 5 year plan
Slide Number 43
Financial Services Priorities
Financial Services reshaping the portfolio
Financial Services key targets
Nectar
Slide Number 48
Digital
We will help our customers live well for less
Slide Number 51
Slide Number 52
Guidance for 201920
Retail sales
Sainsburyrsquos sales area and store numbers
Sainsburyrsquos store estate
Sainsburyrsquos investment programme
Retail margin
Group retail
Plc Board
Plc Board
Plc Board
Plc Board
Operating Board
Operating Board
Operating Board
Supplementary financial details
Contacts
Column1
201819
Grocery
19
GM
7
Clothing
1
To resize chart data range drag lower right corner of range
Grocery
GM
Clothing
29 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Our values make us different
bull Committed to reduce plastic packaging by 50 by 2025
bull First retailer to remove single use plastic produce and bakery bags from our stores
- Launching reusable bags in fruit and veg aisles
bull Investing in our loose produce offer
bull Removed black plastic trays from ready meals
bull Fresh water stands in cafeacutes for customers to refill bottles
UKrsquos first major retailer to make significant commitment to reduce plastic
30 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Argos category and range focus
bull Availability improvement- Argos master range reduced by c30 over 3 years- Eliminating duplication removing low value items- Better availability of key lines in store
bull Rebalancing into higher margin categories- Gaining share in Furniture1
More distinctive rangemore reason to shop at Sainsburyrsquos
Reduced SKU count -20operational efficiencies
Higher cash gross profit +2 YOY
Volumes +8 operational efficiencies
41 Interim Results 201920 - November 2019
Drive efficiency
to invest in the customer
offer
4
BAU savings to offset cost inflation
Manages inflationary pressures
BAU savingsH1 201920
Procurement GNFR
Retail Technology Efficiencies
Retail HRRetail
management structures
Shrink Reduction
42 Interim Results 201920 - November 2019
Drive efficiency
to invest in the customer
offer
4
Strategic cost transformation 5 year plan
Converge Tackle fixed cost
End to end reviews
Retail Operations Marketing and Commercial Operations
Other central support
Logistics and Supply Chain
Project A
Project C
Project D
Shared Services BPO
Property strategy
Project BGNFR procurement
Capital prioritisation
Technology Digital and Corporate Services
pound250-pound350m
pound150-pound250m
pound400-pound600mExecution underway In planning Opportunities identified
pound5bn addressable cost base
43 Interim Results 201920 - November 2019
Grow connected
services
5
44 Interim Results 201920 - November 2019
Grow connected
services
5
Financial Services Priorities
To be the provider of financial services for loyal Sainsburyrsquos and Argos customers
An agile capital and cost efficient provider of simple mobile-led financial services
Vision
Objective
Priorities Reshape Simplify Strengthen
45 Interim Results 201920 - November 2019
Grow connected
services
5
Current Customer Base
Customer Credit Risk Balance Sheet Earnings
Argos Storecards 22m Prime Near Prime
Credit Cards 09m Prime
Personal Loans 05m Prime
Mortgages 9K Exit
Total Lending
Deposits 03m
Insurances 05m Very Low Risk
Travel Money 266 Sites
ATMs 1890
Financial Services reshaping the portfolio
46 Interim Results 201920 - November 2019
Grow connected
services
5
Increase connectivity and value for Group
Stop mortgage acquisition review back book options
No capital input from the Group from now1
Costincome c503 within 5 years
Double UPBT double digit ROCE within 5 years
Upstream cash within 5 years2
Financial Services key targets
Transform the cost base
Improve returns
Financial services cash generative
Reduce risk profile to Group
Stop putting cash in to Financial Services
2
4
6
3
1
5
Focus on Sainsburyrsquos customer base
1 Subject to regulatory changes requirements2 Subject to regulatory approval3 On a Group contribution basis
47 Interim Results 201920 - November 2019
Grow connected
services
5
Nectar
bull Biggest loyalty programme in the UK
bull Over 18 million collectors
bull Most recognised loyalty brand in the UK
bull Launch of Nectar digital- 21 million app users- Increase in overall Nectar participation- Increased levels of personalisation- 138000 new Nectar customers- 1 app on launch weekend
bull Coalition strengthened with addition of Esso in June 2019
48 Interim Results 201920 - November 2019
Provide a seamless customer
experience
6
49 Interim Results 201920 - November 2019
Provide a seamless customer
experience
6
Digital
bull Groceries Online sales penetration of 8- App accounts for over 20 of orders
bull 21 million digital Nectar app users
bull 14 million Argos Financial Services app downloads
bull Smartshop rollout in over 350 stores
Groceries online
Chop Chop
SmartShop
Universaldiscovery
Seamlessfinancialservices
Singlebasket
50 Interim Results 201920 - November 2019
We will help our customers live well for less
Confident in the core Integrated customer offer
One multi brand multi channel business
Strong cash generation supporting investment dividend and allowing deleverage
Financial flexibility and resilience
Sustainable cost reduction covering cost inflation and funding investment in our competitive offer
QampA
APPENDIX Interim Results 201920 - November 2019
Appendices
APPENDIX Interim Results 201920 - November 2019
Guidance for 201920
1
Spacebull Expect to open 2 new Sainsburyrsquos supermarkets and up to 15 convenience storesbull Expect to open around 25 Argos stores in Sainsburyrsquos (of which 11 are
relocations) resulting in around 305 Argos stores in supermarketsbull Expect to close 2 supermarkets around 25 convenience stores and around 20
Argos stores in FY201920 as part of announced property closure programme of 10-15 supermarkets 30-40 convenience stores and 60-70 Argos stores
Financial Servicesbull Financial services underlying operating profit expected to be cpound45m including a
cpound10m benefit as a result of a change in transfer pricing between Argos and Argos Financial Services
bull Financial Services non-underlying costs are expected to be around pound30mbull No further capital injections into the Bank are expected following pound35m in H1 201920
Depreciation and amortisationbull Expect underlying retail depreciation and amortisation of around pound12bn
including cpound500m right of use asset depreciation
CostsOperating cost inflationbull Cost inflation between 2 and 3Cost savingsbull Continue to deliver cost savings to at least offset the impact of cost inflation
Finance costsbull Net finance costs of around pound405m including pound320m lease interest in
201920 following the introduction of IFRS 16
One-off itemsbull In 201920 cash outflows as a result of items excluded from
underlying results should not exceed pound100mbull Property strategy programme one-off costs expected to be
pound230m-pound270m of which cash costs are pound30-40m
Dividendbull Sainsburyrsquos plans to change the full year dividend policy to 19x cover by
underlying earnings (versus 20x previously) to offset the dilutive (non cash) impact of IFRS 16 on underlying earnings
Capital expenditurebull Retail capital expenditure to be around pound550mbull Retail capital expenditure is expected to be around pound550m-pound600m per
annum over the medium term
Net debtbull Net debt before fair value movements on derivatives to reduce by at
least pound300m
Tax ratebull Underlying tax rate to be between 25 and 26
APPENDIX Interim Results 201920 - November 2019
Retail sales
1 Sales including VAT excluding fuel
LFL sales growth1
(10)
Sales from net new space1
04
Total sales growth1
(06)
Supermarkets2
(07)
Convenience20
Groceries Online
70
Channels
(01)(25)
(12)
2 Supermarket sales include Argos SiS sales FY 1819 16
pound139bn
pound103bnGrocery
pound30bnGeneralMerchandise
pound488mClothing
2
Chart1
201819
194
66
1
Sheet1
APPENDIX Interim Results 201920 - November 2019
Sainsburyrsquos sales area and store numbersAs at 21 September 2019
Sainsburyrsquos store estateAs at 21 September 2019
Sq ftsales area
82446
870
40001 to60000
20001 to40000
10000 to20000
Under10000 Total
Over60000
0122122
0197197
0175175
06767
824607
1431
Argos storesArgos in SainsburyrsquosArgos in HomebaseOtherArgos total store numbers
Habitat1
Collection points
594281
8-
883
16317
As at21 Sept 2019
Disposalsclosures
Newstores
As at9 March 2019
17--8
-1
(7)-
(2)-
(9)
-(36)
588288
6-
88216
282
ConvenienceSupermarketsTotal stores
Number of stores
Sq ftsales area
1929350
2279
40001 to60000
20001 to40000
10000 to20000
Under10000 Total
Over60000
-18441844
-58185818
-85018501
-46604660
19292117323102
ConvenienceSupermarketsTotal stores
Space by store size (lsquo000 sq ft)
Argos and Habitat store numbers
1 5 Habitat stores 11 Habitat stores in Sainsburys
4
APPENDIX Interim Results 201920 - November 2019
ClosureBitterne West
Sainsburyrsquos investment programme201920
Q1
Supermarkets ConvenienceNew storesMilton Keynes Brooklands District CentBromley High StLeeds Wike Ridge LaneSalford Harbour CityCanterbury High St
ReplacementMayfair Stratton St
ClosuresMayfairWarren St
Q1Q1Q1Q2Q2
Q2
Q1Q2
5
APPENDIX Interim Results 201920 - November 2019
Retail margin
Retail sales (inc VAT inc fuel)(exc VAT inc fuel)
Retail underlying EBITDAR1
Retail underlying EBITDAR margin 2
at constant fuel pricesRetail underlying operating profit3
Retail underlying operating margin 4
at constant fuel prices
1656714808
10677272
4373030
1661214856
11147575
4873333
030342
30 bps28 bps10333 bps32 bps
1 Retail underlying operating profit before net rental income of pound6 million and underlying depreciation and amortisation of pound636 million2 Retail underlying EBITDAR divided by underlying retail sales excluding VAT3 Retail underlying earnings before interest tax and Sainsburyrsquos underlying share of post-tax profit from joint ventures4 Retail underlying operating profit divided by underlying retail sales excluding VAT
poundm H1201920
H1201819
Change
6
APPENDIX Interim Results 201920 - November 2019
H1201920
H1201819
Group retail
Return on capital employed 1
Net debt to EBITDAR (times)23
Fixed charge cover (times)2
Underlying tax rate Core retail capex sales5
713126
26515
743326
25715
poundm
1 ROCE Return is defined as a 52 week rolling underlying profit before interest and tax Capital employed is defined as group net assets2 Net debt of pound6778 million includes lease obligations under IFRS 16 and perpetual securities treated as debt divided by Group underlying EBITDAR of pound2171 million calculated for a 52-week period to 21 September 20193 Group underlying EBITDAR divided by rent (both capital and interest) and net finance costs where interest on perpetual securities is treated as an underlying finance costs4 52 weeks to 22nd September 2018 is not available due to the implementation of IFRS 16 Comparatives therefore reflect the 52 weeks to 9th March 20195 Includes retail sales inc vat inc fuel
4
4
7
APPENDIX Interim Results 201920 - November 2019
Plc Board
Kevin OrsquoByrneChief Financial Officer
Mike Coupe Group Chief Executive
Dame Susan Rice Senior Independent Director
Matt BrittinNon-Executive Director
Jo HarlowNon-Executive Director
Brian CassinNon-Executive Director
David KeensNon-Executive Director
Jean Tomlin Non-Executive Director
Martin Scicluna Chairman
8
APPENDIX Interim Results 201920 - November 2019
Plc Board
Mike Coupe Group Chief Executive Officer
Skills and experienceAppointed Group Chief Executive Officer on 9 July 2014 Mike has been a member of the Operating Board since October 2004 Mike has vast retail industry experience in trading strategy marketing digital and online as well as multi-site store experience He joined Sainsburyrsquos from Big Food Group where he was a board director of Big Food Group PLC and Managing Director of Iceland Food Stores He previously worked for both Asda and Tesco PLC where he served in a variety of senior management roles
Date of appointment 1 August 2007Mike has served as an Executive Director since 1 August 2007 and as Chief Executive Officer since 9 July 2014
Committee membershipCorporate Responsibility and Sustainability Committee
Kevin OrsquoByrne Chief Financial Officer
Skills and experienceKevin brings to the Board a wealth of retail and finance experience Kevin was previously Chief Executive Officer of Poundland Group Limited until December 2016 and held executive roles at Kingfisher plc from 2008 to 2015 including Divisional Director UK China and Turkey Chief Executive Officer of BampQ UK amp Ireland and Group Finance Director He was previously Group Finance Director of Dixons Retail plc and European Finance Director of Quaker Oats He was a Non-Executive Director of Land Securities Group PLC from 2008 to September 2017 where he was Chairman of the Audit Committee and Senior Independent Director
Date of appointment 9 January 2017
Other current rolesNon-Executive Director of Greene King plc
Skills and experienceMartin brings a breadth of experience and leadership in both executive and non-executive roles His previous roles include positions as the Chairman of Great Portland Estates plc Senior Independent Director and Chair of the Audit Committee of Worldpay Inc and Non-Executive Director and Chair of the Audit Committee of Lloyds Banking Group plc He was a partner at Deloitte LLP for 26 years serving as Chairman from 1995 to 2007 where his clients included Dixons WH Smith Alliance Unichem and Cadburyrsquos
Other current rolesChairman of RSA Insurance Group plc
Martin Scicluna Chairman
Date of appointment 1 November 2018 Martin joined the Board as Chairman Designate and Non-Executive Director on 1 November 2018 He was appointed as Chairman of the Board on 10 March 2019
Committee membershipChair of the Nomination Committee
Dame Susan Rice Senior Independent Director
Skills and experienceSusan has extensive experience as a Non-Executive Director as well as in retail banking financial services leadership and sustainability Her career in retail bankingis particularly relevant to our ownership ofSainsburyrsquos Bank Previously Susan was a member of the First Ministerrsquos Council of Economic Advisors Managing Director of Lloyds Banking Group Scotland and was previously Chief Executive and then Chairman of Lloyds TSB Scotland plc She has also held a range of other non-executive directorships including at the Bank of England and SSE plc
Committee membershipChair of the Remuneration Committee and a member of the Nomination Committee
Date of appointment 1 June 2013
Other current rolesChair of Scottish Water and Business Stream Chair of the Scottish Fiscal Commission Non-Executive Director of the North American Income Trust C Hoare and Co and Senior Independent Director of the North American Income Trust
9
Other current rolesNon-Executive Director and Chairman of the Audit Committee of Centrica plc
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jean Tomlin Non-Executive Director
Skills and experienceJean has extensive experience and breadth of skills in human resources and corporate responsibility Jean was formerly Director of HR Workforce and Accreditation for The London OrganisingCommittee of the Olympic and Paralympic Games where she set the strategic direction to ensure the mobilisation of the combined 200000-strong workforce including paid staff volunteers and contractors which represented the recruitment and mobilisation of the largest peacetime workforce and set the industry standard for volunteering with the highly acclaimed Games She was previously Group HR Director at Marks and Spencer Group Plc HR Director and founder member of Egg plc and Sales amp Operations Director of Prudential Direct
Date of appointment 1 January 2013
Committee membershipAudit Committee Corporate Responsibility and Sustainability Committee and Nomination Committee
David Keens Non-Executive Director
Skills and experienceDavid has extensive retail experience and knowledge of consumer facing businesses together with his core skills in finance David was formerly Group Finance Director of next plc from 1991 to 2015 and their Group Treasurer from 1986 to 1991 Previous management experience includes nine years in the UK and overseas operations of multinational food manufacturer Nabisco and prior to that seven years in the accountancy profession
Date of appointment 29 April 2015
Committee membershipChair of the Audit Committee and a member of the Nomination Committee
Other current rolesIndependent Board member of Capri Holdings Limited Non-Executive Director of Hakluyt and Chief Executive Officer of Chanzo Limited
Other current rolesNon-Executive Director Senior Independent Director and Chair of the Audit Committee of Auto Trader Group plc
Matt BrittinNon-Executive Director
Skills and experienceMatt has extensive experience of running a high profile fast moving innovative digital business Since 2015 he has been responsible for Googlersquos business and operations in Europe the Middle East and Africa and hersquos been in leadership roles at Google since 2007 Prior to that Matt spent much of his career in media and marketing with particular interests in strategy commercial development and sales performance This included commercial and digital leadership roles in UK media
Date of appointment 27 January 2011
Committee membershipNomination Committee and Remuneration Committee
Other current rolesGooglersquos President ndash Europe Middle East and Africa and Director of The Media Trust
Brian Cassin Non-Executive Director
Skills and experienceBrian brings present day experience of running a FTSE40 group and of big data and analytics ndash topics of key importance to Sainsburyrsquos Brian joined Experian plc as Chief Financial Officer in April 2012 a post he held until his appointment as Chief Executive Officer in July 2014 Prior to this Brian spent his career in investment banking at Greenhill amp Co where he was Managing Director and Partner Brian has also held various roles at Baring Brothers International and at the London Stock Exchange
Date of appointment 1 April 2016
Committee membershipAudit Committee and Nomination Committee
Other current rolesChief Executive Officer of Experian plc
10
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jo Harlow Non-Executive Director
Skills and experienceJo brings a wealth of experience in consumer-facing businesses and in the telecoms and technology industry bothin the UK and internationally Jo spent 12 years in a variety of senior management roles with Nokia and Microsoft Prior to this she spent eight years at PampG and 11 years at Reebok in senior sales and marketing positions in both Europe and the US
Date of appointment 11 September 2017
Committee membershipChair of the Corporate Responsibility and Sustainability Committee and member of the Nomination Committee and Remuneration Committee
Life PresidentLord Sainsbury of Preston Candover KG
Other current rolesNon-Executive Director of InterContinental Hotels plc Non-Executive Director of Halmaplc and Member of the Supervisory Board of Ceconomy AG
11
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief Executive
Tim FallowfieldCompany Secretary amp Corporate Services Director
Kevin OrsquoByrne Chief Financial Officer
Jim BrownChief Executive Officer of Sainsburyrsquos Bank
Paul Mills-HicksFood Commercial Director
Angie RisleyGroup HR Director
Phil JordanGroup Chief InformationOfficer
Simon RobertsRetail and Operations Director
Clo MoriartyGroup Chief Digital Officer
12
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief ExecutiveSee Appendix page 9
Kevin OrsquoByrneChief Financial OfficerSee Appendix page 9
Tim FallowfieldCompany Secretary amp Corporate Services Director
Date of appointment September 2004
Skills and experienceTim joined Sainsburyrsquos in 2001 as Company Secretary and joined the Operating Board in September 2004 In addition to his role as Company Secretary Tim is responsible for the Corporate Services Division comprising Legal Services Data Governance Safety Shareholder Services Insurance and Central Security He chairs the Group Safety Committee and the Data Governance Committee Tim joined Sainsburyrsquos from Exelplc the global logistics company now part of DHL where he was Company Secretary and General Counsel He began his career at the international law firm Clifford Chance and is a qualified solicitor Tim is Chairman of the Disability Confident Business Leaders Group which works with Government in shaping the disability employment agenda and in raising awareness of the benefits of employing disabled people
Jim BrownCEO of Sainsburyrsquos Bank
Skills and experienceJim joined Sainsburyrsquos Bank as CEO in June 2019 and is also a member of the Sainsburyrsquos Group Operating Board He has held a number of senior international Financial Services roles - most recently for RBS in the UK as CEO of Williams and Glyn and prior to that CEO of Ulster Bank in Northern Ireland and the Republic of Ireland Before moving to Ireland he was based in Hong Kong and was CEO Retail and Commercial Banking Asia and the Middle East for RBS and ABN AMRO He has also been a member of the RBS Group Management Committee ABN AMRO Executive Group ABN AMRO Global Consumer Leadership Team and the RBSBank of China Joint Steering Committee Earlier in his career he held a number of senior executive roles for Citibank in Asia and Australia and New Zealand Jim has also held various Board positions including at Ulster Bank Saudi Hollandi Bank The Royal Bank of Scotland (China) Co Ltd and RBS (Pakistan) Ltd He is also a past President of the Institute of Banking in Ireland He is currently a Certified Bank Director
Date of appointment August 2019
Paul Mills-HicksFood Commercial Director
Skills and experiencePaul joined the Operating Board in May 2014 as Food Commercial Director having spent over ten years at Sainsburyrsquos He was closely involved in the formation and execution of the lsquoMaking Sainsburyrsquos Great Againrsquo strategy Following this he held a variety of roles in commercial strategy and finance most recently as Business Unit Director for Grocery Prior to Sainsburyrsquos Paul was European Controller at Marks and Spencer Group PLC and a Director at UBS Warburg
Date of appointment May 2014
13
APPENDIX Interim Results 201920 - November 2019
Operating Board
Angie RisleyGroup HR Director
Skills and experienceAngie was appointed Group HR Director and a member of the Operating Board in January 2013 with responsibility for human resources Angie is also a Director of Sainsburyrsquos Bank plc Angie was most recently Non-Executive Director and Chairman of the Remuneration Committee of Serco plc and prior to this was Group HR Director of Lloyds Banking Group and an Executive Director of Whitbread PLC with responsibility for HR and Corporate Social Responsibility Angie is currently Non-Executive Director and Chair of the Remuneration Committee at Smith amp Nephew plc
Date of appointment January 2013
Phil JordanGroup Chief Information Officer
Skills and experiencePhil joined the Board in January 2018 and has brought a fresh globalperspective on technology to the Operating Board in addition to a wealth of experience in digital data and business transformation Prior to joining Sainsburyrsquos Phil had a long and successful track record in telecommunications Most recently he was Global Chief Information Officer at Telefonica overseeing Digital Transformation and Information Technology and prior to that was Chief Information Officer for Vodafone UKIreland Phil has worked as a Non-Executive Advisor on Technology in the Investment amp Retail Banking sector and is currently a Non-Executive Director of TalkTalk Telecom Group PLC and chairs its Cyber-Security Committee
Date of appointment January 2018
Simon RobertsRetail and Operations Director
Skills and experienceSimon joined Sainsburyrsquos and the Operating Board in July 2017 as Central Retail amp Operations Director responsible for Stores Central operation and Logistics In his previous role he was Executive Vice President of Walgreens Boots Alliance and President of Boots with responsibility for commercial and retail operations across the UK and Ireland Prior to Boots Simon was at Marks and Spencer Group PLC where he held operational and customer leadership roles across stores divisions and central operations Simon is also the Non-Executive Chairman at the Institute ofCustomer Service
Date of appointment July 2017
Clodagh MoriartyGroup Chief Digital Officer
Skills and experienceClodagh was appointed Group Chief Digital Officer in June 2018 Clodagh leads the delivery of a consistent and first-rate digital experience for customers across Sainsburyrsquos Argos and Sainsburyrsquos BankClodagh joined Sainsburyrsquos in 2010 from Bain amp Co management consultants where she had gained experience working on a broad range of projects across multiple sectors and countries Following two years as Head of Strategy at Sainsburyrsquosshe moved into Food Commercial as Category Manager for Meal Solutions and then became Head of Online Trading spanning Food General Merchandise and Clothing before being promoted to Director of Online in 2016 In this role Clodagh was instrumental in driving innovation within Groceries Online and launching new initiatives including SmartShop and Chop Chop
Date of appointment June 2018
14
APPENDIX Interim Results 201920 - November 2019
Supplementary financial details
3 Financial calendarQ3 trading statement(15 weeks to 4 January 2020)
Preliminary results(52 weeks to 7 March 2020)
8 January 2020
30 April 2020
1 Weighted average number of shares
The interim dividend datesOrdinary shares
Ex-dividend 14 November 2019Record 15 November 2019Payment 20 December 2019
Product Quality Framework helps us fund investment
PQF cereals case study
BAU savings to offset cost inflation
Strategic cost transformation 5 year plan
Slide Number 43
Financial Services Priorities
Financial Services reshaping the portfolio
Financial Services key targets
Nectar
Slide Number 48
Digital
We will help our customers live well for less
Slide Number 51
Slide Number 52
Guidance for 201920
Retail sales
Sainsburyrsquos sales area and store numbers
Sainsburyrsquos store estate
Sainsburyrsquos investment programme
Retail margin
Group retail
Plc Board
Plc Board
Plc Board
Plc Board
Operating Board
Operating Board
Operating Board
Supplementary financial details
Contacts
Column1
201819
Grocery
19
GM
7
Clothing
1
To resize chart data range drag lower right corner of range
Grocery
GM
Clothing
30 Interim Results 201920 - November 2019
Offer distinctive products and new
categories
2
Argos category and range focus
bull Availability improvement- Argos master range reduced by c30 over 3 years- Eliminating duplication removing low value items- Better availability of key lines in store
bull Rebalancing into higher margin categories- Gaining share in Furniture1
More distinctive rangemore reason to shop at Sainsburyrsquos
Reduced SKU count -20operational efficiencies
Higher cash gross profit +2 YOY
Volumes +8 operational efficiencies
41 Interim Results 201920 - November 2019
Drive efficiency
to invest in the customer
offer
4
BAU savings to offset cost inflation
Manages inflationary pressures
BAU savingsH1 201920
Procurement GNFR
Retail Technology Efficiencies
Retail HRRetail
management structures
Shrink Reduction
42 Interim Results 201920 - November 2019
Drive efficiency
to invest in the customer
offer
4
Strategic cost transformation 5 year plan
Converge Tackle fixed cost
End to end reviews
Retail Operations Marketing and Commercial Operations
Other central support
Logistics and Supply Chain
Project A
Project C
Project D
Shared Services BPO
Property strategy
Project BGNFR procurement
Capital prioritisation
Technology Digital and Corporate Services
pound250-pound350m
pound150-pound250m
pound400-pound600mExecution underway In planning Opportunities identified
pound5bn addressable cost base
43 Interim Results 201920 - November 2019
Grow connected
services
5
44 Interim Results 201920 - November 2019
Grow connected
services
5
Financial Services Priorities
To be the provider of financial services for loyal Sainsburyrsquos and Argos customers
An agile capital and cost efficient provider of simple mobile-led financial services
Vision
Objective
Priorities Reshape Simplify Strengthen
45 Interim Results 201920 - November 2019
Grow connected
services
5
Current Customer Base
Customer Credit Risk Balance Sheet Earnings
Argos Storecards 22m Prime Near Prime
Credit Cards 09m Prime
Personal Loans 05m Prime
Mortgages 9K Exit
Total Lending
Deposits 03m
Insurances 05m Very Low Risk
Travel Money 266 Sites
ATMs 1890
Financial Services reshaping the portfolio
46 Interim Results 201920 - November 2019
Grow connected
services
5
Increase connectivity and value for Group
Stop mortgage acquisition review back book options
No capital input from the Group from now1
Costincome c503 within 5 years
Double UPBT double digit ROCE within 5 years
Upstream cash within 5 years2
Financial Services key targets
Transform the cost base
Improve returns
Financial services cash generative
Reduce risk profile to Group
Stop putting cash in to Financial Services
2
4
6
3
1
5
Focus on Sainsburyrsquos customer base
1 Subject to regulatory changes requirements2 Subject to regulatory approval3 On a Group contribution basis
47 Interim Results 201920 - November 2019
Grow connected
services
5
Nectar
bull Biggest loyalty programme in the UK
bull Over 18 million collectors
bull Most recognised loyalty brand in the UK
bull Launch of Nectar digital- 21 million app users- Increase in overall Nectar participation- Increased levels of personalisation- 138000 new Nectar customers- 1 app on launch weekend
bull Coalition strengthened with addition of Esso in June 2019
48 Interim Results 201920 - November 2019
Provide a seamless customer
experience
6
49 Interim Results 201920 - November 2019
Provide a seamless customer
experience
6
Digital
bull Groceries Online sales penetration of 8- App accounts for over 20 of orders
bull 21 million digital Nectar app users
bull 14 million Argos Financial Services app downloads
bull Smartshop rollout in over 350 stores
Groceries online
Chop Chop
SmartShop
Universaldiscovery
Seamlessfinancialservices
Singlebasket
50 Interim Results 201920 - November 2019
We will help our customers live well for less
Confident in the core Integrated customer offer
One multi brand multi channel business
Strong cash generation supporting investment dividend and allowing deleverage
Financial flexibility and resilience
Sustainable cost reduction covering cost inflation and funding investment in our competitive offer
QampA
APPENDIX Interim Results 201920 - November 2019
Appendices
APPENDIX Interim Results 201920 - November 2019
Guidance for 201920
1
Spacebull Expect to open 2 new Sainsburyrsquos supermarkets and up to 15 convenience storesbull Expect to open around 25 Argos stores in Sainsburyrsquos (of which 11 are
relocations) resulting in around 305 Argos stores in supermarketsbull Expect to close 2 supermarkets around 25 convenience stores and around 20
Argos stores in FY201920 as part of announced property closure programme of 10-15 supermarkets 30-40 convenience stores and 60-70 Argos stores
Financial Servicesbull Financial services underlying operating profit expected to be cpound45m including a
cpound10m benefit as a result of a change in transfer pricing between Argos and Argos Financial Services
bull Financial Services non-underlying costs are expected to be around pound30mbull No further capital injections into the Bank are expected following pound35m in H1 201920
Depreciation and amortisationbull Expect underlying retail depreciation and amortisation of around pound12bn
including cpound500m right of use asset depreciation
CostsOperating cost inflationbull Cost inflation between 2 and 3Cost savingsbull Continue to deliver cost savings to at least offset the impact of cost inflation
Finance costsbull Net finance costs of around pound405m including pound320m lease interest in
201920 following the introduction of IFRS 16
One-off itemsbull In 201920 cash outflows as a result of items excluded from
underlying results should not exceed pound100mbull Property strategy programme one-off costs expected to be
pound230m-pound270m of which cash costs are pound30-40m
Dividendbull Sainsburyrsquos plans to change the full year dividend policy to 19x cover by
underlying earnings (versus 20x previously) to offset the dilutive (non cash) impact of IFRS 16 on underlying earnings
Capital expenditurebull Retail capital expenditure to be around pound550mbull Retail capital expenditure is expected to be around pound550m-pound600m per
annum over the medium term
Net debtbull Net debt before fair value movements on derivatives to reduce by at
least pound300m
Tax ratebull Underlying tax rate to be between 25 and 26
APPENDIX Interim Results 201920 - November 2019
Retail sales
1 Sales including VAT excluding fuel
LFL sales growth1
(10)
Sales from net new space1
04
Total sales growth1
(06)
Supermarkets2
(07)
Convenience20
Groceries Online
70
Channels
(01)(25)
(12)
2 Supermarket sales include Argos SiS sales FY 1819 16
pound139bn
pound103bnGrocery
pound30bnGeneralMerchandise
pound488mClothing
2
Chart1
201819
194
66
1
Sheet1
APPENDIX Interim Results 201920 - November 2019
Sainsburyrsquos sales area and store numbersAs at 21 September 2019
Sainsburyrsquos store estateAs at 21 September 2019
Sq ftsales area
82446
870
40001 to60000
20001 to40000
10000 to20000
Under10000 Total
Over60000
0122122
0197197
0175175
06767
824607
1431
Argos storesArgos in SainsburyrsquosArgos in HomebaseOtherArgos total store numbers
Habitat1
Collection points
594281
8-
883
16317
As at21 Sept 2019
Disposalsclosures
Newstores
As at9 March 2019
17--8
-1
(7)-
(2)-
(9)
-(36)
588288
6-
88216
282
ConvenienceSupermarketsTotal stores
Number of stores
Sq ftsales area
1929350
2279
40001 to60000
20001 to40000
10000 to20000
Under10000 Total
Over60000
-18441844
-58185818
-85018501
-46604660
19292117323102
ConvenienceSupermarketsTotal stores
Space by store size (lsquo000 sq ft)
Argos and Habitat store numbers
1 5 Habitat stores 11 Habitat stores in Sainsburys
4
APPENDIX Interim Results 201920 - November 2019
ClosureBitterne West
Sainsburyrsquos investment programme201920
Q1
Supermarkets ConvenienceNew storesMilton Keynes Brooklands District CentBromley High StLeeds Wike Ridge LaneSalford Harbour CityCanterbury High St
ReplacementMayfair Stratton St
ClosuresMayfairWarren St
Q1Q1Q1Q2Q2
Q2
Q1Q2
5
APPENDIX Interim Results 201920 - November 2019
Retail margin
Retail sales (inc VAT inc fuel)(exc VAT inc fuel)
Retail underlying EBITDAR1
Retail underlying EBITDAR margin 2
at constant fuel pricesRetail underlying operating profit3
Retail underlying operating margin 4
at constant fuel prices
1656714808
10677272
4373030
1661214856
11147575
4873333
030342
30 bps28 bps10333 bps32 bps
1 Retail underlying operating profit before net rental income of pound6 million and underlying depreciation and amortisation of pound636 million2 Retail underlying EBITDAR divided by underlying retail sales excluding VAT3 Retail underlying earnings before interest tax and Sainsburyrsquos underlying share of post-tax profit from joint ventures4 Retail underlying operating profit divided by underlying retail sales excluding VAT
poundm H1201920
H1201819
Change
6
APPENDIX Interim Results 201920 - November 2019
H1201920
H1201819
Group retail
Return on capital employed 1
Net debt to EBITDAR (times)23
Fixed charge cover (times)2
Underlying tax rate Core retail capex sales5
713126
26515
743326
25715
poundm
1 ROCE Return is defined as a 52 week rolling underlying profit before interest and tax Capital employed is defined as group net assets2 Net debt of pound6778 million includes lease obligations under IFRS 16 and perpetual securities treated as debt divided by Group underlying EBITDAR of pound2171 million calculated for a 52-week period to 21 September 20193 Group underlying EBITDAR divided by rent (both capital and interest) and net finance costs where interest on perpetual securities is treated as an underlying finance costs4 52 weeks to 22nd September 2018 is not available due to the implementation of IFRS 16 Comparatives therefore reflect the 52 weeks to 9th March 20195 Includes retail sales inc vat inc fuel
4
4
7
APPENDIX Interim Results 201920 - November 2019
Plc Board
Kevin OrsquoByrneChief Financial Officer
Mike Coupe Group Chief Executive
Dame Susan Rice Senior Independent Director
Matt BrittinNon-Executive Director
Jo HarlowNon-Executive Director
Brian CassinNon-Executive Director
David KeensNon-Executive Director
Jean Tomlin Non-Executive Director
Martin Scicluna Chairman
8
APPENDIX Interim Results 201920 - November 2019
Plc Board
Mike Coupe Group Chief Executive Officer
Skills and experienceAppointed Group Chief Executive Officer on 9 July 2014 Mike has been a member of the Operating Board since October 2004 Mike has vast retail industry experience in trading strategy marketing digital and online as well as multi-site store experience He joined Sainsburyrsquos from Big Food Group where he was a board director of Big Food Group PLC and Managing Director of Iceland Food Stores He previously worked for both Asda and Tesco PLC where he served in a variety of senior management roles
Date of appointment 1 August 2007Mike has served as an Executive Director since 1 August 2007 and as Chief Executive Officer since 9 July 2014
Committee membershipCorporate Responsibility and Sustainability Committee
Kevin OrsquoByrne Chief Financial Officer
Skills and experienceKevin brings to the Board a wealth of retail and finance experience Kevin was previously Chief Executive Officer of Poundland Group Limited until December 2016 and held executive roles at Kingfisher plc from 2008 to 2015 including Divisional Director UK China and Turkey Chief Executive Officer of BampQ UK amp Ireland and Group Finance Director He was previously Group Finance Director of Dixons Retail plc and European Finance Director of Quaker Oats He was a Non-Executive Director of Land Securities Group PLC from 2008 to September 2017 where he was Chairman of the Audit Committee and Senior Independent Director
Date of appointment 9 January 2017
Other current rolesNon-Executive Director of Greene King plc
Skills and experienceMartin brings a breadth of experience and leadership in both executive and non-executive roles His previous roles include positions as the Chairman of Great Portland Estates plc Senior Independent Director and Chair of the Audit Committee of Worldpay Inc and Non-Executive Director and Chair of the Audit Committee of Lloyds Banking Group plc He was a partner at Deloitte LLP for 26 years serving as Chairman from 1995 to 2007 where his clients included Dixons WH Smith Alliance Unichem and Cadburyrsquos
Other current rolesChairman of RSA Insurance Group plc
Martin Scicluna Chairman
Date of appointment 1 November 2018 Martin joined the Board as Chairman Designate and Non-Executive Director on 1 November 2018 He was appointed as Chairman of the Board on 10 March 2019
Committee membershipChair of the Nomination Committee
Dame Susan Rice Senior Independent Director
Skills and experienceSusan has extensive experience as a Non-Executive Director as well as in retail banking financial services leadership and sustainability Her career in retail bankingis particularly relevant to our ownership ofSainsburyrsquos Bank Previously Susan was a member of the First Ministerrsquos Council of Economic Advisors Managing Director of Lloyds Banking Group Scotland and was previously Chief Executive and then Chairman of Lloyds TSB Scotland plc She has also held a range of other non-executive directorships including at the Bank of England and SSE plc
Committee membershipChair of the Remuneration Committee and a member of the Nomination Committee
Date of appointment 1 June 2013
Other current rolesChair of Scottish Water and Business Stream Chair of the Scottish Fiscal Commission Non-Executive Director of the North American Income Trust C Hoare and Co and Senior Independent Director of the North American Income Trust
9
Other current rolesNon-Executive Director and Chairman of the Audit Committee of Centrica plc
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jean Tomlin Non-Executive Director
Skills and experienceJean has extensive experience and breadth of skills in human resources and corporate responsibility Jean was formerly Director of HR Workforce and Accreditation for The London OrganisingCommittee of the Olympic and Paralympic Games where she set the strategic direction to ensure the mobilisation of the combined 200000-strong workforce including paid staff volunteers and contractors which represented the recruitment and mobilisation of the largest peacetime workforce and set the industry standard for volunteering with the highly acclaimed Games She was previously Group HR Director at Marks and Spencer Group Plc HR Director and founder member of Egg plc and Sales amp Operations Director of Prudential Direct
Date of appointment 1 January 2013
Committee membershipAudit Committee Corporate Responsibility and Sustainability Committee and Nomination Committee
David Keens Non-Executive Director
Skills and experienceDavid has extensive retail experience and knowledge of consumer facing businesses together with his core skills in finance David was formerly Group Finance Director of next plc from 1991 to 2015 and their Group Treasurer from 1986 to 1991 Previous management experience includes nine years in the UK and overseas operations of multinational food manufacturer Nabisco and prior to that seven years in the accountancy profession
Date of appointment 29 April 2015
Committee membershipChair of the Audit Committee and a member of the Nomination Committee
Other current rolesIndependent Board member of Capri Holdings Limited Non-Executive Director of Hakluyt and Chief Executive Officer of Chanzo Limited
Other current rolesNon-Executive Director Senior Independent Director and Chair of the Audit Committee of Auto Trader Group plc
Matt BrittinNon-Executive Director
Skills and experienceMatt has extensive experience of running a high profile fast moving innovative digital business Since 2015 he has been responsible for Googlersquos business and operations in Europe the Middle East and Africa and hersquos been in leadership roles at Google since 2007 Prior to that Matt spent much of his career in media and marketing with particular interests in strategy commercial development and sales performance This included commercial and digital leadership roles in UK media
Date of appointment 27 January 2011
Committee membershipNomination Committee and Remuneration Committee
Other current rolesGooglersquos President ndash Europe Middle East and Africa and Director of The Media Trust
Brian Cassin Non-Executive Director
Skills and experienceBrian brings present day experience of running a FTSE40 group and of big data and analytics ndash topics of key importance to Sainsburyrsquos Brian joined Experian plc as Chief Financial Officer in April 2012 a post he held until his appointment as Chief Executive Officer in July 2014 Prior to this Brian spent his career in investment banking at Greenhill amp Co where he was Managing Director and Partner Brian has also held various roles at Baring Brothers International and at the London Stock Exchange
Date of appointment 1 April 2016
Committee membershipAudit Committee and Nomination Committee
Other current rolesChief Executive Officer of Experian plc
10
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jo Harlow Non-Executive Director
Skills and experienceJo brings a wealth of experience in consumer-facing businesses and in the telecoms and technology industry bothin the UK and internationally Jo spent 12 years in a variety of senior management roles with Nokia and Microsoft Prior to this she spent eight years at PampG and 11 years at Reebok in senior sales and marketing positions in both Europe and the US
Date of appointment 11 September 2017
Committee membershipChair of the Corporate Responsibility and Sustainability Committee and member of the Nomination Committee and Remuneration Committee
Life PresidentLord Sainsbury of Preston Candover KG
Other current rolesNon-Executive Director of InterContinental Hotels plc Non-Executive Director of Halmaplc and Member of the Supervisory Board of Ceconomy AG
11
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief Executive
Tim FallowfieldCompany Secretary amp Corporate Services Director
Kevin OrsquoByrne Chief Financial Officer
Jim BrownChief Executive Officer of Sainsburyrsquos Bank
Paul Mills-HicksFood Commercial Director
Angie RisleyGroup HR Director
Phil JordanGroup Chief InformationOfficer
Simon RobertsRetail and Operations Director
Clo MoriartyGroup Chief Digital Officer
12
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief ExecutiveSee Appendix page 9
Kevin OrsquoByrneChief Financial OfficerSee Appendix page 9
Tim FallowfieldCompany Secretary amp Corporate Services Director
Date of appointment September 2004
Skills and experienceTim joined Sainsburyrsquos in 2001 as Company Secretary and joined the Operating Board in September 2004 In addition to his role as Company Secretary Tim is responsible for the Corporate Services Division comprising Legal Services Data Governance Safety Shareholder Services Insurance and Central Security He chairs the Group Safety Committee and the Data Governance Committee Tim joined Sainsburyrsquos from Exelplc the global logistics company now part of DHL where he was Company Secretary and General Counsel He began his career at the international law firm Clifford Chance and is a qualified solicitor Tim is Chairman of the Disability Confident Business Leaders Group which works with Government in shaping the disability employment agenda and in raising awareness of the benefits of employing disabled people
Jim BrownCEO of Sainsburyrsquos Bank
Skills and experienceJim joined Sainsburyrsquos Bank as CEO in June 2019 and is also a member of the Sainsburyrsquos Group Operating Board He has held a number of senior international Financial Services roles - most recently for RBS in the UK as CEO of Williams and Glyn and prior to that CEO of Ulster Bank in Northern Ireland and the Republic of Ireland Before moving to Ireland he was based in Hong Kong and was CEO Retail and Commercial Banking Asia and the Middle East for RBS and ABN AMRO He has also been a member of the RBS Group Management Committee ABN AMRO Executive Group ABN AMRO Global Consumer Leadership Team and the RBSBank of China Joint Steering Committee Earlier in his career he held a number of senior executive roles for Citibank in Asia and Australia and New Zealand Jim has also held various Board positions including at Ulster Bank Saudi Hollandi Bank The Royal Bank of Scotland (China) Co Ltd and RBS (Pakistan) Ltd He is also a past President of the Institute of Banking in Ireland He is currently a Certified Bank Director
Date of appointment August 2019
Paul Mills-HicksFood Commercial Director
Skills and experiencePaul joined the Operating Board in May 2014 as Food Commercial Director having spent over ten years at Sainsburyrsquos He was closely involved in the formation and execution of the lsquoMaking Sainsburyrsquos Great Againrsquo strategy Following this he held a variety of roles in commercial strategy and finance most recently as Business Unit Director for Grocery Prior to Sainsburyrsquos Paul was European Controller at Marks and Spencer Group PLC and a Director at UBS Warburg
Date of appointment May 2014
13
APPENDIX Interim Results 201920 - November 2019
Operating Board
Angie RisleyGroup HR Director
Skills and experienceAngie was appointed Group HR Director and a member of the Operating Board in January 2013 with responsibility for human resources Angie is also a Director of Sainsburyrsquos Bank plc Angie was most recently Non-Executive Director and Chairman of the Remuneration Committee of Serco plc and prior to this was Group HR Director of Lloyds Banking Group and an Executive Director of Whitbread PLC with responsibility for HR and Corporate Social Responsibility Angie is currently Non-Executive Director and Chair of the Remuneration Committee at Smith amp Nephew plc
Date of appointment January 2013
Phil JordanGroup Chief Information Officer
Skills and experiencePhil joined the Board in January 2018 and has brought a fresh globalperspective on technology to the Operating Board in addition to a wealth of experience in digital data and business transformation Prior to joining Sainsburyrsquos Phil had a long and successful track record in telecommunications Most recently he was Global Chief Information Officer at Telefonica overseeing Digital Transformation and Information Technology and prior to that was Chief Information Officer for Vodafone UKIreland Phil has worked as a Non-Executive Advisor on Technology in the Investment amp Retail Banking sector and is currently a Non-Executive Director of TalkTalk Telecom Group PLC and chairs its Cyber-Security Committee
Date of appointment January 2018
Simon RobertsRetail and Operations Director
Skills and experienceSimon joined Sainsburyrsquos and the Operating Board in July 2017 as Central Retail amp Operations Director responsible for Stores Central operation and Logistics In his previous role he was Executive Vice President of Walgreens Boots Alliance and President of Boots with responsibility for commercial and retail operations across the UK and Ireland Prior to Boots Simon was at Marks and Spencer Group PLC where he held operational and customer leadership roles across stores divisions and central operations Simon is also the Non-Executive Chairman at the Institute ofCustomer Service
Date of appointment July 2017
Clodagh MoriartyGroup Chief Digital Officer
Skills and experienceClodagh was appointed Group Chief Digital Officer in June 2018 Clodagh leads the delivery of a consistent and first-rate digital experience for customers across Sainsburyrsquos Argos and Sainsburyrsquos BankClodagh joined Sainsburyrsquos in 2010 from Bain amp Co management consultants where she had gained experience working on a broad range of projects across multiple sectors and countries Following two years as Head of Strategy at Sainsburyrsquosshe moved into Food Commercial as Category Manager for Meal Solutions and then became Head of Online Trading spanning Food General Merchandise and Clothing before being promoted to Director of Online in 2016 In this role Clodagh was instrumental in driving innovation within Groceries Online and launching new initiatives including SmartShop and Chop Chop
Date of appointment June 2018
14
APPENDIX Interim Results 201920 - November 2019
Supplementary financial details
3 Financial calendarQ3 trading statement(15 weeks to 4 January 2020)
Preliminary results(52 weeks to 7 March 2020)
8 January 2020
30 April 2020
1 Weighted average number of shares
The interim dividend datesOrdinary shares
Ex-dividend 14 November 2019Record 15 November 2019Payment 20 December 2019
More distinctive rangemore reason to shop at Sainsburyrsquos
Reduced SKU count -20operational efficiencies
Higher cash gross profit +2 YOY
Volumes +8 operational efficiencies
41 Interim Results 201920 - November 2019
Drive efficiency
to invest in the customer
offer
4
BAU savings to offset cost inflation
Manages inflationary pressures
BAU savingsH1 201920
Procurement GNFR
Retail Technology Efficiencies
Retail HRRetail
management structures
Shrink Reduction
42 Interim Results 201920 - November 2019
Drive efficiency
to invest in the customer
offer
4
Strategic cost transformation 5 year plan
Converge Tackle fixed cost
End to end reviews
Retail Operations Marketing and Commercial Operations
Other central support
Logistics and Supply Chain
Project A
Project C
Project D
Shared Services BPO
Property strategy
Project BGNFR procurement
Capital prioritisation
Technology Digital and Corporate Services
pound250-pound350m
pound150-pound250m
pound400-pound600mExecution underway In planning Opportunities identified
pound5bn addressable cost base
43 Interim Results 201920 - November 2019
Grow connected
services
5
44 Interim Results 201920 - November 2019
Grow connected
services
5
Financial Services Priorities
To be the provider of financial services for loyal Sainsburyrsquos and Argos customers
An agile capital and cost efficient provider of simple mobile-led financial services
Vision
Objective
Priorities Reshape Simplify Strengthen
45 Interim Results 201920 - November 2019
Grow connected
services
5
Current Customer Base
Customer Credit Risk Balance Sheet Earnings
Argos Storecards 22m Prime Near Prime
Credit Cards 09m Prime
Personal Loans 05m Prime
Mortgages 9K Exit
Total Lending
Deposits 03m
Insurances 05m Very Low Risk
Travel Money 266 Sites
ATMs 1890
Financial Services reshaping the portfolio
46 Interim Results 201920 - November 2019
Grow connected
services
5
Increase connectivity and value for Group
Stop mortgage acquisition review back book options
No capital input from the Group from now1
Costincome c503 within 5 years
Double UPBT double digit ROCE within 5 years
Upstream cash within 5 years2
Financial Services key targets
Transform the cost base
Improve returns
Financial services cash generative
Reduce risk profile to Group
Stop putting cash in to Financial Services
2
4
6
3
1
5
Focus on Sainsburyrsquos customer base
1 Subject to regulatory changes requirements2 Subject to regulatory approval3 On a Group contribution basis
47 Interim Results 201920 - November 2019
Grow connected
services
5
Nectar
bull Biggest loyalty programme in the UK
bull Over 18 million collectors
bull Most recognised loyalty brand in the UK
bull Launch of Nectar digital- 21 million app users- Increase in overall Nectar participation- Increased levels of personalisation- 138000 new Nectar customers- 1 app on launch weekend
bull Coalition strengthened with addition of Esso in June 2019
48 Interim Results 201920 - November 2019
Provide a seamless customer
experience
6
49 Interim Results 201920 - November 2019
Provide a seamless customer
experience
6
Digital
bull Groceries Online sales penetration of 8- App accounts for over 20 of orders
bull 21 million digital Nectar app users
bull 14 million Argos Financial Services app downloads
bull Smartshop rollout in over 350 stores
Groceries online
Chop Chop
SmartShop
Universaldiscovery
Seamlessfinancialservices
Singlebasket
50 Interim Results 201920 - November 2019
We will help our customers live well for less
Confident in the core Integrated customer offer
One multi brand multi channel business
Strong cash generation supporting investment dividend and allowing deleverage
Financial flexibility and resilience
Sustainable cost reduction covering cost inflation and funding investment in our competitive offer
QampA
APPENDIX Interim Results 201920 - November 2019
Appendices
APPENDIX Interim Results 201920 - November 2019
Guidance for 201920
1
Spacebull Expect to open 2 new Sainsburyrsquos supermarkets and up to 15 convenience storesbull Expect to open around 25 Argos stores in Sainsburyrsquos (of which 11 are
relocations) resulting in around 305 Argos stores in supermarketsbull Expect to close 2 supermarkets around 25 convenience stores and around 20
Argos stores in FY201920 as part of announced property closure programme of 10-15 supermarkets 30-40 convenience stores and 60-70 Argos stores
Financial Servicesbull Financial services underlying operating profit expected to be cpound45m including a
cpound10m benefit as a result of a change in transfer pricing between Argos and Argos Financial Services
bull Financial Services non-underlying costs are expected to be around pound30mbull No further capital injections into the Bank are expected following pound35m in H1 201920
Depreciation and amortisationbull Expect underlying retail depreciation and amortisation of around pound12bn
including cpound500m right of use asset depreciation
CostsOperating cost inflationbull Cost inflation between 2 and 3Cost savingsbull Continue to deliver cost savings to at least offset the impact of cost inflation
Finance costsbull Net finance costs of around pound405m including pound320m lease interest in
201920 following the introduction of IFRS 16
One-off itemsbull In 201920 cash outflows as a result of items excluded from
underlying results should not exceed pound100mbull Property strategy programme one-off costs expected to be
pound230m-pound270m of which cash costs are pound30-40m
Dividendbull Sainsburyrsquos plans to change the full year dividend policy to 19x cover by
underlying earnings (versus 20x previously) to offset the dilutive (non cash) impact of IFRS 16 on underlying earnings
Capital expenditurebull Retail capital expenditure to be around pound550mbull Retail capital expenditure is expected to be around pound550m-pound600m per
annum over the medium term
Net debtbull Net debt before fair value movements on derivatives to reduce by at
least pound300m
Tax ratebull Underlying tax rate to be between 25 and 26
APPENDIX Interim Results 201920 - November 2019
Retail sales
1 Sales including VAT excluding fuel
LFL sales growth1
(10)
Sales from net new space1
04
Total sales growth1
(06)
Supermarkets2
(07)
Convenience20
Groceries Online
70
Channels
(01)(25)
(12)
2 Supermarket sales include Argos SiS sales FY 1819 16
pound139bn
pound103bnGrocery
pound30bnGeneralMerchandise
pound488mClothing
2
Chart1
201819
194
66
1
Sheet1
APPENDIX Interim Results 201920 - November 2019
Sainsburyrsquos sales area and store numbersAs at 21 September 2019
Sainsburyrsquos store estateAs at 21 September 2019
Sq ftsales area
82446
870
40001 to60000
20001 to40000
10000 to20000
Under10000 Total
Over60000
0122122
0197197
0175175
06767
824607
1431
Argos storesArgos in SainsburyrsquosArgos in HomebaseOtherArgos total store numbers
Habitat1
Collection points
594281
8-
883
16317
As at21 Sept 2019
Disposalsclosures
Newstores
As at9 March 2019
17--8
-1
(7)-
(2)-
(9)
-(36)
588288
6-
88216
282
ConvenienceSupermarketsTotal stores
Number of stores
Sq ftsales area
1929350
2279
40001 to60000
20001 to40000
10000 to20000
Under10000 Total
Over60000
-18441844
-58185818
-85018501
-46604660
19292117323102
ConvenienceSupermarketsTotal stores
Space by store size (lsquo000 sq ft)
Argos and Habitat store numbers
1 5 Habitat stores 11 Habitat stores in Sainsburys
4
APPENDIX Interim Results 201920 - November 2019
ClosureBitterne West
Sainsburyrsquos investment programme201920
Q1
Supermarkets ConvenienceNew storesMilton Keynes Brooklands District CentBromley High StLeeds Wike Ridge LaneSalford Harbour CityCanterbury High St
ReplacementMayfair Stratton St
ClosuresMayfairWarren St
Q1Q1Q1Q2Q2
Q2
Q1Q2
5
APPENDIX Interim Results 201920 - November 2019
Retail margin
Retail sales (inc VAT inc fuel)(exc VAT inc fuel)
Retail underlying EBITDAR1
Retail underlying EBITDAR margin 2
at constant fuel pricesRetail underlying operating profit3
Retail underlying operating margin 4
at constant fuel prices
1656714808
10677272
4373030
1661214856
11147575
4873333
030342
30 bps28 bps10333 bps32 bps
1 Retail underlying operating profit before net rental income of pound6 million and underlying depreciation and amortisation of pound636 million2 Retail underlying EBITDAR divided by underlying retail sales excluding VAT3 Retail underlying earnings before interest tax and Sainsburyrsquos underlying share of post-tax profit from joint ventures4 Retail underlying operating profit divided by underlying retail sales excluding VAT
poundm H1201920
H1201819
Change
6
APPENDIX Interim Results 201920 - November 2019
H1201920
H1201819
Group retail
Return on capital employed 1
Net debt to EBITDAR (times)23
Fixed charge cover (times)2
Underlying tax rate Core retail capex sales5
713126
26515
743326
25715
poundm
1 ROCE Return is defined as a 52 week rolling underlying profit before interest and tax Capital employed is defined as group net assets2 Net debt of pound6778 million includes lease obligations under IFRS 16 and perpetual securities treated as debt divided by Group underlying EBITDAR of pound2171 million calculated for a 52-week period to 21 September 20193 Group underlying EBITDAR divided by rent (both capital and interest) and net finance costs where interest on perpetual securities is treated as an underlying finance costs4 52 weeks to 22nd September 2018 is not available due to the implementation of IFRS 16 Comparatives therefore reflect the 52 weeks to 9th March 20195 Includes retail sales inc vat inc fuel
4
4
7
APPENDIX Interim Results 201920 - November 2019
Plc Board
Kevin OrsquoByrneChief Financial Officer
Mike Coupe Group Chief Executive
Dame Susan Rice Senior Independent Director
Matt BrittinNon-Executive Director
Jo HarlowNon-Executive Director
Brian CassinNon-Executive Director
David KeensNon-Executive Director
Jean Tomlin Non-Executive Director
Martin Scicluna Chairman
8
APPENDIX Interim Results 201920 - November 2019
Plc Board
Mike Coupe Group Chief Executive Officer
Skills and experienceAppointed Group Chief Executive Officer on 9 July 2014 Mike has been a member of the Operating Board since October 2004 Mike has vast retail industry experience in trading strategy marketing digital and online as well as multi-site store experience He joined Sainsburyrsquos from Big Food Group where he was a board director of Big Food Group PLC and Managing Director of Iceland Food Stores He previously worked for both Asda and Tesco PLC where he served in a variety of senior management roles
Date of appointment 1 August 2007Mike has served as an Executive Director since 1 August 2007 and as Chief Executive Officer since 9 July 2014
Committee membershipCorporate Responsibility and Sustainability Committee
Kevin OrsquoByrne Chief Financial Officer
Skills and experienceKevin brings to the Board a wealth of retail and finance experience Kevin was previously Chief Executive Officer of Poundland Group Limited until December 2016 and held executive roles at Kingfisher plc from 2008 to 2015 including Divisional Director UK China and Turkey Chief Executive Officer of BampQ UK amp Ireland and Group Finance Director He was previously Group Finance Director of Dixons Retail plc and European Finance Director of Quaker Oats He was a Non-Executive Director of Land Securities Group PLC from 2008 to September 2017 where he was Chairman of the Audit Committee and Senior Independent Director
Date of appointment 9 January 2017
Other current rolesNon-Executive Director of Greene King plc
Skills and experienceMartin brings a breadth of experience and leadership in both executive and non-executive roles His previous roles include positions as the Chairman of Great Portland Estates plc Senior Independent Director and Chair of the Audit Committee of Worldpay Inc and Non-Executive Director and Chair of the Audit Committee of Lloyds Banking Group plc He was a partner at Deloitte LLP for 26 years serving as Chairman from 1995 to 2007 where his clients included Dixons WH Smith Alliance Unichem and Cadburyrsquos
Other current rolesChairman of RSA Insurance Group plc
Martin Scicluna Chairman
Date of appointment 1 November 2018 Martin joined the Board as Chairman Designate and Non-Executive Director on 1 November 2018 He was appointed as Chairman of the Board on 10 March 2019
Committee membershipChair of the Nomination Committee
Dame Susan Rice Senior Independent Director
Skills and experienceSusan has extensive experience as a Non-Executive Director as well as in retail banking financial services leadership and sustainability Her career in retail bankingis particularly relevant to our ownership ofSainsburyrsquos Bank Previously Susan was a member of the First Ministerrsquos Council of Economic Advisors Managing Director of Lloyds Banking Group Scotland and was previously Chief Executive and then Chairman of Lloyds TSB Scotland plc She has also held a range of other non-executive directorships including at the Bank of England and SSE plc
Committee membershipChair of the Remuneration Committee and a member of the Nomination Committee
Date of appointment 1 June 2013
Other current rolesChair of Scottish Water and Business Stream Chair of the Scottish Fiscal Commission Non-Executive Director of the North American Income Trust C Hoare and Co and Senior Independent Director of the North American Income Trust
9
Other current rolesNon-Executive Director and Chairman of the Audit Committee of Centrica plc
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jean Tomlin Non-Executive Director
Skills and experienceJean has extensive experience and breadth of skills in human resources and corporate responsibility Jean was formerly Director of HR Workforce and Accreditation for The London OrganisingCommittee of the Olympic and Paralympic Games where she set the strategic direction to ensure the mobilisation of the combined 200000-strong workforce including paid staff volunteers and contractors which represented the recruitment and mobilisation of the largest peacetime workforce and set the industry standard for volunteering with the highly acclaimed Games She was previously Group HR Director at Marks and Spencer Group Plc HR Director and founder member of Egg plc and Sales amp Operations Director of Prudential Direct
Date of appointment 1 January 2013
Committee membershipAudit Committee Corporate Responsibility and Sustainability Committee and Nomination Committee
David Keens Non-Executive Director
Skills and experienceDavid has extensive retail experience and knowledge of consumer facing businesses together with his core skills in finance David was formerly Group Finance Director of next plc from 1991 to 2015 and their Group Treasurer from 1986 to 1991 Previous management experience includes nine years in the UK and overseas operations of multinational food manufacturer Nabisco and prior to that seven years in the accountancy profession
Date of appointment 29 April 2015
Committee membershipChair of the Audit Committee and a member of the Nomination Committee
Other current rolesIndependent Board member of Capri Holdings Limited Non-Executive Director of Hakluyt and Chief Executive Officer of Chanzo Limited
Other current rolesNon-Executive Director Senior Independent Director and Chair of the Audit Committee of Auto Trader Group plc
Matt BrittinNon-Executive Director
Skills and experienceMatt has extensive experience of running a high profile fast moving innovative digital business Since 2015 he has been responsible for Googlersquos business and operations in Europe the Middle East and Africa and hersquos been in leadership roles at Google since 2007 Prior to that Matt spent much of his career in media and marketing with particular interests in strategy commercial development and sales performance This included commercial and digital leadership roles in UK media
Date of appointment 27 January 2011
Committee membershipNomination Committee and Remuneration Committee
Other current rolesGooglersquos President ndash Europe Middle East and Africa and Director of The Media Trust
Brian Cassin Non-Executive Director
Skills and experienceBrian brings present day experience of running a FTSE40 group and of big data and analytics ndash topics of key importance to Sainsburyrsquos Brian joined Experian plc as Chief Financial Officer in April 2012 a post he held until his appointment as Chief Executive Officer in July 2014 Prior to this Brian spent his career in investment banking at Greenhill amp Co where he was Managing Director and Partner Brian has also held various roles at Baring Brothers International and at the London Stock Exchange
Date of appointment 1 April 2016
Committee membershipAudit Committee and Nomination Committee
Other current rolesChief Executive Officer of Experian plc
10
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jo Harlow Non-Executive Director
Skills and experienceJo brings a wealth of experience in consumer-facing businesses and in the telecoms and technology industry bothin the UK and internationally Jo spent 12 years in a variety of senior management roles with Nokia and Microsoft Prior to this she spent eight years at PampG and 11 years at Reebok in senior sales and marketing positions in both Europe and the US
Date of appointment 11 September 2017
Committee membershipChair of the Corporate Responsibility and Sustainability Committee and member of the Nomination Committee and Remuneration Committee
Life PresidentLord Sainsbury of Preston Candover KG
Other current rolesNon-Executive Director of InterContinental Hotels plc Non-Executive Director of Halmaplc and Member of the Supervisory Board of Ceconomy AG
11
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief Executive
Tim FallowfieldCompany Secretary amp Corporate Services Director
Kevin OrsquoByrne Chief Financial Officer
Jim BrownChief Executive Officer of Sainsburyrsquos Bank
Paul Mills-HicksFood Commercial Director
Angie RisleyGroup HR Director
Phil JordanGroup Chief InformationOfficer
Simon RobertsRetail and Operations Director
Clo MoriartyGroup Chief Digital Officer
12
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief ExecutiveSee Appendix page 9
Kevin OrsquoByrneChief Financial OfficerSee Appendix page 9
Tim FallowfieldCompany Secretary amp Corporate Services Director
Date of appointment September 2004
Skills and experienceTim joined Sainsburyrsquos in 2001 as Company Secretary and joined the Operating Board in September 2004 In addition to his role as Company Secretary Tim is responsible for the Corporate Services Division comprising Legal Services Data Governance Safety Shareholder Services Insurance and Central Security He chairs the Group Safety Committee and the Data Governance Committee Tim joined Sainsburyrsquos from Exelplc the global logistics company now part of DHL where he was Company Secretary and General Counsel He began his career at the international law firm Clifford Chance and is a qualified solicitor Tim is Chairman of the Disability Confident Business Leaders Group which works with Government in shaping the disability employment agenda and in raising awareness of the benefits of employing disabled people
Jim BrownCEO of Sainsburyrsquos Bank
Skills and experienceJim joined Sainsburyrsquos Bank as CEO in June 2019 and is also a member of the Sainsburyrsquos Group Operating Board He has held a number of senior international Financial Services roles - most recently for RBS in the UK as CEO of Williams and Glyn and prior to that CEO of Ulster Bank in Northern Ireland and the Republic of Ireland Before moving to Ireland he was based in Hong Kong and was CEO Retail and Commercial Banking Asia and the Middle East for RBS and ABN AMRO He has also been a member of the RBS Group Management Committee ABN AMRO Executive Group ABN AMRO Global Consumer Leadership Team and the RBSBank of China Joint Steering Committee Earlier in his career he held a number of senior executive roles for Citibank in Asia and Australia and New Zealand Jim has also held various Board positions including at Ulster Bank Saudi Hollandi Bank The Royal Bank of Scotland (China) Co Ltd and RBS (Pakistan) Ltd He is also a past President of the Institute of Banking in Ireland He is currently a Certified Bank Director
Date of appointment August 2019
Paul Mills-HicksFood Commercial Director
Skills and experiencePaul joined the Operating Board in May 2014 as Food Commercial Director having spent over ten years at Sainsburyrsquos He was closely involved in the formation and execution of the lsquoMaking Sainsburyrsquos Great Againrsquo strategy Following this he held a variety of roles in commercial strategy and finance most recently as Business Unit Director for Grocery Prior to Sainsburyrsquos Paul was European Controller at Marks and Spencer Group PLC and a Director at UBS Warburg
Date of appointment May 2014
13
APPENDIX Interim Results 201920 - November 2019
Operating Board
Angie RisleyGroup HR Director
Skills and experienceAngie was appointed Group HR Director and a member of the Operating Board in January 2013 with responsibility for human resources Angie is also a Director of Sainsburyrsquos Bank plc Angie was most recently Non-Executive Director and Chairman of the Remuneration Committee of Serco plc and prior to this was Group HR Director of Lloyds Banking Group and an Executive Director of Whitbread PLC with responsibility for HR and Corporate Social Responsibility Angie is currently Non-Executive Director and Chair of the Remuneration Committee at Smith amp Nephew plc
Date of appointment January 2013
Phil JordanGroup Chief Information Officer
Skills and experiencePhil joined the Board in January 2018 and has brought a fresh globalperspective on technology to the Operating Board in addition to a wealth of experience in digital data and business transformation Prior to joining Sainsburyrsquos Phil had a long and successful track record in telecommunications Most recently he was Global Chief Information Officer at Telefonica overseeing Digital Transformation and Information Technology and prior to that was Chief Information Officer for Vodafone UKIreland Phil has worked as a Non-Executive Advisor on Technology in the Investment amp Retail Banking sector and is currently a Non-Executive Director of TalkTalk Telecom Group PLC and chairs its Cyber-Security Committee
Date of appointment January 2018
Simon RobertsRetail and Operations Director
Skills and experienceSimon joined Sainsburyrsquos and the Operating Board in July 2017 as Central Retail amp Operations Director responsible for Stores Central operation and Logistics In his previous role he was Executive Vice President of Walgreens Boots Alliance and President of Boots with responsibility for commercial and retail operations across the UK and Ireland Prior to Boots Simon was at Marks and Spencer Group PLC where he held operational and customer leadership roles across stores divisions and central operations Simon is also the Non-Executive Chairman at the Institute ofCustomer Service
Date of appointment July 2017
Clodagh MoriartyGroup Chief Digital Officer
Skills and experienceClodagh was appointed Group Chief Digital Officer in June 2018 Clodagh leads the delivery of a consistent and first-rate digital experience for customers across Sainsburyrsquos Argos and Sainsburyrsquos BankClodagh joined Sainsburyrsquos in 2010 from Bain amp Co management consultants where she had gained experience working on a broad range of projects across multiple sectors and countries Following two years as Head of Strategy at Sainsburyrsquosshe moved into Food Commercial as Category Manager for Meal Solutions and then became Head of Online Trading spanning Food General Merchandise and Clothing before being promoted to Director of Online in 2016 In this role Clodagh was instrumental in driving innovation within Groceries Online and launching new initiatives including SmartShop and Chop Chop
Date of appointment June 2018
14
APPENDIX Interim Results 201920 - November 2019
Supplementary financial details
3 Financial calendarQ3 trading statement(15 weeks to 4 January 2020)
Preliminary results(52 weeks to 7 March 2020)
8 January 2020
30 April 2020
1 Weighted average number of shares
The interim dividend datesOrdinary shares
Ex-dividend 14 November 2019Record 15 November 2019Payment 20 December 2019
More distinctive rangemore reason to shop at Sainsburyrsquos
Reduced SKU count -20operational efficiencies
Higher cash gross profit +2 YOY
Volumes +8 operational efficiencies
41 Interim Results 201920 - November 2019
Drive efficiency
to invest in the customer
offer
4
BAU savings to offset cost inflation
Manages inflationary pressures
BAU savingsH1 201920
Procurement GNFR
Retail Technology Efficiencies
Retail HRRetail
management structures
Shrink Reduction
42 Interim Results 201920 - November 2019
Drive efficiency
to invest in the customer
offer
4
Strategic cost transformation 5 year plan
Converge Tackle fixed cost
End to end reviews
Retail Operations Marketing and Commercial Operations
Other central support
Logistics and Supply Chain
Project A
Project C
Project D
Shared Services BPO
Property strategy
Project BGNFR procurement
Capital prioritisation
Technology Digital and Corporate Services
pound250-pound350m
pound150-pound250m
pound400-pound600mExecution underway In planning Opportunities identified
pound5bn addressable cost base
43 Interim Results 201920 - November 2019
Grow connected
services
5
44 Interim Results 201920 - November 2019
Grow connected
services
5
Financial Services Priorities
To be the provider of financial services for loyal Sainsburyrsquos and Argos customers
An agile capital and cost efficient provider of simple mobile-led financial services
Vision
Objective
Priorities Reshape Simplify Strengthen
45 Interim Results 201920 - November 2019
Grow connected
services
5
Current Customer Base
Customer Credit Risk Balance Sheet Earnings
Argos Storecards 22m Prime Near Prime
Credit Cards 09m Prime
Personal Loans 05m Prime
Mortgages 9K Exit
Total Lending
Deposits 03m
Insurances 05m Very Low Risk
Travel Money 266 Sites
ATMs 1890
Financial Services reshaping the portfolio
46 Interim Results 201920 - November 2019
Grow connected
services
5
Increase connectivity and value for Group
Stop mortgage acquisition review back book options
No capital input from the Group from now1
Costincome c503 within 5 years
Double UPBT double digit ROCE within 5 years
Upstream cash within 5 years2
Financial Services key targets
Transform the cost base
Improve returns
Financial services cash generative
Reduce risk profile to Group
Stop putting cash in to Financial Services
2
4
6
3
1
5
Focus on Sainsburyrsquos customer base
1 Subject to regulatory changes requirements2 Subject to regulatory approval3 On a Group contribution basis
47 Interim Results 201920 - November 2019
Grow connected
services
5
Nectar
bull Biggest loyalty programme in the UK
bull Over 18 million collectors
bull Most recognised loyalty brand in the UK
bull Launch of Nectar digital- 21 million app users- Increase in overall Nectar participation- Increased levels of personalisation- 138000 new Nectar customers- 1 app on launch weekend
bull Coalition strengthened with addition of Esso in June 2019
48 Interim Results 201920 - November 2019
Provide a seamless customer
experience
6
49 Interim Results 201920 - November 2019
Provide a seamless customer
experience
6
Digital
bull Groceries Online sales penetration of 8- App accounts for over 20 of orders
bull 21 million digital Nectar app users
bull 14 million Argos Financial Services app downloads
bull Smartshop rollout in over 350 stores
Groceries online
Chop Chop
SmartShop
Universaldiscovery
Seamlessfinancialservices
Singlebasket
50 Interim Results 201920 - November 2019
We will help our customers live well for less
Confident in the core Integrated customer offer
One multi brand multi channel business
Strong cash generation supporting investment dividend and allowing deleverage
Financial flexibility and resilience
Sustainable cost reduction covering cost inflation and funding investment in our competitive offer
QampA
APPENDIX Interim Results 201920 - November 2019
Appendices
APPENDIX Interim Results 201920 - November 2019
Guidance for 201920
1
Spacebull Expect to open 2 new Sainsburyrsquos supermarkets and up to 15 convenience storesbull Expect to open around 25 Argos stores in Sainsburyrsquos (of which 11 are
relocations) resulting in around 305 Argos stores in supermarketsbull Expect to close 2 supermarkets around 25 convenience stores and around 20
Argos stores in FY201920 as part of announced property closure programme of 10-15 supermarkets 30-40 convenience stores and 60-70 Argos stores
Financial Servicesbull Financial services underlying operating profit expected to be cpound45m including a
cpound10m benefit as a result of a change in transfer pricing between Argos and Argos Financial Services
bull Financial Services non-underlying costs are expected to be around pound30mbull No further capital injections into the Bank are expected following pound35m in H1 201920
Depreciation and amortisationbull Expect underlying retail depreciation and amortisation of around pound12bn
including cpound500m right of use asset depreciation
CostsOperating cost inflationbull Cost inflation between 2 and 3Cost savingsbull Continue to deliver cost savings to at least offset the impact of cost inflation
Finance costsbull Net finance costs of around pound405m including pound320m lease interest in
201920 following the introduction of IFRS 16
One-off itemsbull In 201920 cash outflows as a result of items excluded from
underlying results should not exceed pound100mbull Property strategy programme one-off costs expected to be
pound230m-pound270m of which cash costs are pound30-40m
Dividendbull Sainsburyrsquos plans to change the full year dividend policy to 19x cover by
underlying earnings (versus 20x previously) to offset the dilutive (non cash) impact of IFRS 16 on underlying earnings
Capital expenditurebull Retail capital expenditure to be around pound550mbull Retail capital expenditure is expected to be around pound550m-pound600m per
annum over the medium term
Net debtbull Net debt before fair value movements on derivatives to reduce by at
least pound300m
Tax ratebull Underlying tax rate to be between 25 and 26
APPENDIX Interim Results 201920 - November 2019
Retail sales
1 Sales including VAT excluding fuel
LFL sales growth1
(10)
Sales from net new space1
04
Total sales growth1
(06)
Supermarkets2
(07)
Convenience20
Groceries Online
70
Channels
(01)(25)
(12)
2 Supermarket sales include Argos SiS sales FY 1819 16
pound139bn
pound103bnGrocery
pound30bnGeneralMerchandise
pound488mClothing
2
Chart1
201819
194
66
1
Sheet1
APPENDIX Interim Results 201920 - November 2019
Sainsburyrsquos sales area and store numbersAs at 21 September 2019
Sainsburyrsquos store estateAs at 21 September 2019
Sq ftsales area
82446
870
40001 to60000
20001 to40000
10000 to20000
Under10000 Total
Over60000
0122122
0197197
0175175
06767
824607
1431
Argos storesArgos in SainsburyrsquosArgos in HomebaseOtherArgos total store numbers
Habitat1
Collection points
594281
8-
883
16317
As at21 Sept 2019
Disposalsclosures
Newstores
As at9 March 2019
17--8
-1
(7)-
(2)-
(9)
-(36)
588288
6-
88216
282
ConvenienceSupermarketsTotal stores
Number of stores
Sq ftsales area
1929350
2279
40001 to60000
20001 to40000
10000 to20000
Under10000 Total
Over60000
-18441844
-58185818
-85018501
-46604660
19292117323102
ConvenienceSupermarketsTotal stores
Space by store size (lsquo000 sq ft)
Argos and Habitat store numbers
1 5 Habitat stores 11 Habitat stores in Sainsburys
4
APPENDIX Interim Results 201920 - November 2019
ClosureBitterne West
Sainsburyrsquos investment programme201920
Q1
Supermarkets ConvenienceNew storesMilton Keynes Brooklands District CentBromley High StLeeds Wike Ridge LaneSalford Harbour CityCanterbury High St
ReplacementMayfair Stratton St
ClosuresMayfairWarren St
Q1Q1Q1Q2Q2
Q2
Q1Q2
5
APPENDIX Interim Results 201920 - November 2019
Retail margin
Retail sales (inc VAT inc fuel)(exc VAT inc fuel)
Retail underlying EBITDAR1
Retail underlying EBITDAR margin 2
at constant fuel pricesRetail underlying operating profit3
Retail underlying operating margin 4
at constant fuel prices
1656714808
10677272
4373030
1661214856
11147575
4873333
030342
30 bps28 bps10333 bps32 bps
1 Retail underlying operating profit before net rental income of pound6 million and underlying depreciation and amortisation of pound636 million2 Retail underlying EBITDAR divided by underlying retail sales excluding VAT3 Retail underlying earnings before interest tax and Sainsburyrsquos underlying share of post-tax profit from joint ventures4 Retail underlying operating profit divided by underlying retail sales excluding VAT
poundm H1201920
H1201819
Change
6
APPENDIX Interim Results 201920 - November 2019
H1201920
H1201819
Group retail
Return on capital employed 1
Net debt to EBITDAR (times)23
Fixed charge cover (times)2
Underlying tax rate Core retail capex sales5
713126
26515
743326
25715
poundm
1 ROCE Return is defined as a 52 week rolling underlying profit before interest and tax Capital employed is defined as group net assets2 Net debt of pound6778 million includes lease obligations under IFRS 16 and perpetual securities treated as debt divided by Group underlying EBITDAR of pound2171 million calculated for a 52-week period to 21 September 20193 Group underlying EBITDAR divided by rent (both capital and interest) and net finance costs where interest on perpetual securities is treated as an underlying finance costs4 52 weeks to 22nd September 2018 is not available due to the implementation of IFRS 16 Comparatives therefore reflect the 52 weeks to 9th March 20195 Includes retail sales inc vat inc fuel
4
4
7
APPENDIX Interim Results 201920 - November 2019
Plc Board
Kevin OrsquoByrneChief Financial Officer
Mike Coupe Group Chief Executive
Dame Susan Rice Senior Independent Director
Matt BrittinNon-Executive Director
Jo HarlowNon-Executive Director
Brian CassinNon-Executive Director
David KeensNon-Executive Director
Jean Tomlin Non-Executive Director
Martin Scicluna Chairman
8
APPENDIX Interim Results 201920 - November 2019
Plc Board
Mike Coupe Group Chief Executive Officer
Skills and experienceAppointed Group Chief Executive Officer on 9 July 2014 Mike has been a member of the Operating Board since October 2004 Mike has vast retail industry experience in trading strategy marketing digital and online as well as multi-site store experience He joined Sainsburyrsquos from Big Food Group where he was a board director of Big Food Group PLC and Managing Director of Iceland Food Stores He previously worked for both Asda and Tesco PLC where he served in a variety of senior management roles
Date of appointment 1 August 2007Mike has served as an Executive Director since 1 August 2007 and as Chief Executive Officer since 9 July 2014
Committee membershipCorporate Responsibility and Sustainability Committee
Kevin OrsquoByrne Chief Financial Officer
Skills and experienceKevin brings to the Board a wealth of retail and finance experience Kevin was previously Chief Executive Officer of Poundland Group Limited until December 2016 and held executive roles at Kingfisher plc from 2008 to 2015 including Divisional Director UK China and Turkey Chief Executive Officer of BampQ UK amp Ireland and Group Finance Director He was previously Group Finance Director of Dixons Retail plc and European Finance Director of Quaker Oats He was a Non-Executive Director of Land Securities Group PLC from 2008 to September 2017 where he was Chairman of the Audit Committee and Senior Independent Director
Date of appointment 9 January 2017
Other current rolesNon-Executive Director of Greene King plc
Skills and experienceMartin brings a breadth of experience and leadership in both executive and non-executive roles His previous roles include positions as the Chairman of Great Portland Estates plc Senior Independent Director and Chair of the Audit Committee of Worldpay Inc and Non-Executive Director and Chair of the Audit Committee of Lloyds Banking Group plc He was a partner at Deloitte LLP for 26 years serving as Chairman from 1995 to 2007 where his clients included Dixons WH Smith Alliance Unichem and Cadburyrsquos
Other current rolesChairman of RSA Insurance Group plc
Martin Scicluna Chairman
Date of appointment 1 November 2018 Martin joined the Board as Chairman Designate and Non-Executive Director on 1 November 2018 He was appointed as Chairman of the Board on 10 March 2019
Committee membershipChair of the Nomination Committee
Dame Susan Rice Senior Independent Director
Skills and experienceSusan has extensive experience as a Non-Executive Director as well as in retail banking financial services leadership and sustainability Her career in retail bankingis particularly relevant to our ownership ofSainsburyrsquos Bank Previously Susan was a member of the First Ministerrsquos Council of Economic Advisors Managing Director of Lloyds Banking Group Scotland and was previously Chief Executive and then Chairman of Lloyds TSB Scotland plc She has also held a range of other non-executive directorships including at the Bank of England and SSE plc
Committee membershipChair of the Remuneration Committee and a member of the Nomination Committee
Date of appointment 1 June 2013
Other current rolesChair of Scottish Water and Business Stream Chair of the Scottish Fiscal Commission Non-Executive Director of the North American Income Trust C Hoare and Co and Senior Independent Director of the North American Income Trust
9
Other current rolesNon-Executive Director and Chairman of the Audit Committee of Centrica plc
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jean Tomlin Non-Executive Director
Skills and experienceJean has extensive experience and breadth of skills in human resources and corporate responsibility Jean was formerly Director of HR Workforce and Accreditation for The London OrganisingCommittee of the Olympic and Paralympic Games where she set the strategic direction to ensure the mobilisation of the combined 200000-strong workforce including paid staff volunteers and contractors which represented the recruitment and mobilisation of the largest peacetime workforce and set the industry standard for volunteering with the highly acclaimed Games She was previously Group HR Director at Marks and Spencer Group Plc HR Director and founder member of Egg plc and Sales amp Operations Director of Prudential Direct
Date of appointment 1 January 2013
Committee membershipAudit Committee Corporate Responsibility and Sustainability Committee and Nomination Committee
David Keens Non-Executive Director
Skills and experienceDavid has extensive retail experience and knowledge of consumer facing businesses together with his core skills in finance David was formerly Group Finance Director of next plc from 1991 to 2015 and their Group Treasurer from 1986 to 1991 Previous management experience includes nine years in the UK and overseas operations of multinational food manufacturer Nabisco and prior to that seven years in the accountancy profession
Date of appointment 29 April 2015
Committee membershipChair of the Audit Committee and a member of the Nomination Committee
Other current rolesIndependent Board member of Capri Holdings Limited Non-Executive Director of Hakluyt and Chief Executive Officer of Chanzo Limited
Other current rolesNon-Executive Director Senior Independent Director and Chair of the Audit Committee of Auto Trader Group plc
Matt BrittinNon-Executive Director
Skills and experienceMatt has extensive experience of running a high profile fast moving innovative digital business Since 2015 he has been responsible for Googlersquos business and operations in Europe the Middle East and Africa and hersquos been in leadership roles at Google since 2007 Prior to that Matt spent much of his career in media and marketing with particular interests in strategy commercial development and sales performance This included commercial and digital leadership roles in UK media
Date of appointment 27 January 2011
Committee membershipNomination Committee and Remuneration Committee
Other current rolesGooglersquos President ndash Europe Middle East and Africa and Director of The Media Trust
Brian Cassin Non-Executive Director
Skills and experienceBrian brings present day experience of running a FTSE40 group and of big data and analytics ndash topics of key importance to Sainsburyrsquos Brian joined Experian plc as Chief Financial Officer in April 2012 a post he held until his appointment as Chief Executive Officer in July 2014 Prior to this Brian spent his career in investment banking at Greenhill amp Co where he was Managing Director and Partner Brian has also held various roles at Baring Brothers International and at the London Stock Exchange
Date of appointment 1 April 2016
Committee membershipAudit Committee and Nomination Committee
Other current rolesChief Executive Officer of Experian plc
10
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jo Harlow Non-Executive Director
Skills and experienceJo brings a wealth of experience in consumer-facing businesses and in the telecoms and technology industry bothin the UK and internationally Jo spent 12 years in a variety of senior management roles with Nokia and Microsoft Prior to this she spent eight years at PampG and 11 years at Reebok in senior sales and marketing positions in both Europe and the US
Date of appointment 11 September 2017
Committee membershipChair of the Corporate Responsibility and Sustainability Committee and member of the Nomination Committee and Remuneration Committee
Life PresidentLord Sainsbury of Preston Candover KG
Other current rolesNon-Executive Director of InterContinental Hotels plc Non-Executive Director of Halmaplc and Member of the Supervisory Board of Ceconomy AG
11
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief Executive
Tim FallowfieldCompany Secretary amp Corporate Services Director
Kevin OrsquoByrne Chief Financial Officer
Jim BrownChief Executive Officer of Sainsburyrsquos Bank
Paul Mills-HicksFood Commercial Director
Angie RisleyGroup HR Director
Phil JordanGroup Chief InformationOfficer
Simon RobertsRetail and Operations Director
Clo MoriartyGroup Chief Digital Officer
12
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief ExecutiveSee Appendix page 9
Kevin OrsquoByrneChief Financial OfficerSee Appendix page 9
Tim FallowfieldCompany Secretary amp Corporate Services Director
Date of appointment September 2004
Skills and experienceTim joined Sainsburyrsquos in 2001 as Company Secretary and joined the Operating Board in September 2004 In addition to his role as Company Secretary Tim is responsible for the Corporate Services Division comprising Legal Services Data Governance Safety Shareholder Services Insurance and Central Security He chairs the Group Safety Committee and the Data Governance Committee Tim joined Sainsburyrsquos from Exelplc the global logistics company now part of DHL where he was Company Secretary and General Counsel He began his career at the international law firm Clifford Chance and is a qualified solicitor Tim is Chairman of the Disability Confident Business Leaders Group which works with Government in shaping the disability employment agenda and in raising awareness of the benefits of employing disabled people
Jim BrownCEO of Sainsburyrsquos Bank
Skills and experienceJim joined Sainsburyrsquos Bank as CEO in June 2019 and is also a member of the Sainsburyrsquos Group Operating Board He has held a number of senior international Financial Services roles - most recently for RBS in the UK as CEO of Williams and Glyn and prior to that CEO of Ulster Bank in Northern Ireland and the Republic of Ireland Before moving to Ireland he was based in Hong Kong and was CEO Retail and Commercial Banking Asia and the Middle East for RBS and ABN AMRO He has also been a member of the RBS Group Management Committee ABN AMRO Executive Group ABN AMRO Global Consumer Leadership Team and the RBSBank of China Joint Steering Committee Earlier in his career he held a number of senior executive roles for Citibank in Asia and Australia and New Zealand Jim has also held various Board positions including at Ulster Bank Saudi Hollandi Bank The Royal Bank of Scotland (China) Co Ltd and RBS (Pakistan) Ltd He is also a past President of the Institute of Banking in Ireland He is currently a Certified Bank Director
Date of appointment August 2019
Paul Mills-HicksFood Commercial Director
Skills and experiencePaul joined the Operating Board in May 2014 as Food Commercial Director having spent over ten years at Sainsburyrsquos He was closely involved in the formation and execution of the lsquoMaking Sainsburyrsquos Great Againrsquo strategy Following this he held a variety of roles in commercial strategy and finance most recently as Business Unit Director for Grocery Prior to Sainsburyrsquos Paul was European Controller at Marks and Spencer Group PLC and a Director at UBS Warburg
Date of appointment May 2014
13
APPENDIX Interim Results 201920 - November 2019
Operating Board
Angie RisleyGroup HR Director
Skills and experienceAngie was appointed Group HR Director and a member of the Operating Board in January 2013 with responsibility for human resources Angie is also a Director of Sainsburyrsquos Bank plc Angie was most recently Non-Executive Director and Chairman of the Remuneration Committee of Serco plc and prior to this was Group HR Director of Lloyds Banking Group and an Executive Director of Whitbread PLC with responsibility for HR and Corporate Social Responsibility Angie is currently Non-Executive Director and Chair of the Remuneration Committee at Smith amp Nephew plc
Date of appointment January 2013
Phil JordanGroup Chief Information Officer
Skills and experiencePhil joined the Board in January 2018 and has brought a fresh globalperspective on technology to the Operating Board in addition to a wealth of experience in digital data and business transformation Prior to joining Sainsburyrsquos Phil had a long and successful track record in telecommunications Most recently he was Global Chief Information Officer at Telefonica overseeing Digital Transformation and Information Technology and prior to that was Chief Information Officer for Vodafone UKIreland Phil has worked as a Non-Executive Advisor on Technology in the Investment amp Retail Banking sector and is currently a Non-Executive Director of TalkTalk Telecom Group PLC and chairs its Cyber-Security Committee
Date of appointment January 2018
Simon RobertsRetail and Operations Director
Skills and experienceSimon joined Sainsburyrsquos and the Operating Board in July 2017 as Central Retail amp Operations Director responsible for Stores Central operation and Logistics In his previous role he was Executive Vice President of Walgreens Boots Alliance and President of Boots with responsibility for commercial and retail operations across the UK and Ireland Prior to Boots Simon was at Marks and Spencer Group PLC where he held operational and customer leadership roles across stores divisions and central operations Simon is also the Non-Executive Chairman at the Institute ofCustomer Service
Date of appointment July 2017
Clodagh MoriartyGroup Chief Digital Officer
Skills and experienceClodagh was appointed Group Chief Digital Officer in June 2018 Clodagh leads the delivery of a consistent and first-rate digital experience for customers across Sainsburyrsquos Argos and Sainsburyrsquos BankClodagh joined Sainsburyrsquos in 2010 from Bain amp Co management consultants where she had gained experience working on a broad range of projects across multiple sectors and countries Following two years as Head of Strategy at Sainsburyrsquosshe moved into Food Commercial as Category Manager for Meal Solutions and then became Head of Online Trading spanning Food General Merchandise and Clothing before being promoted to Director of Online in 2016 In this role Clodagh was instrumental in driving innovation within Groceries Online and launching new initiatives including SmartShop and Chop Chop
Date of appointment June 2018
14
APPENDIX Interim Results 201920 - November 2019
Supplementary financial details
3 Financial calendarQ3 trading statement(15 weeks to 4 January 2020)
Preliminary results(52 weeks to 7 March 2020)
8 January 2020
30 April 2020
1 Weighted average number of shares
The interim dividend datesOrdinary shares
Ex-dividend 14 November 2019Record 15 November 2019Payment 20 December 2019
More distinctive rangemore reason to shop at Sainsburyrsquos
Reduced SKU count -20operational efficiencies
Higher cash gross profit +2 YOY
Volumes +8 operational efficiencies
41 Interim Results 201920 - November 2019
Drive efficiency
to invest in the customer
offer
4
BAU savings to offset cost inflation
Manages inflationary pressures
BAU savingsH1 201920
Procurement GNFR
Retail Technology Efficiencies
Retail HRRetail
management structures
Shrink Reduction
42 Interim Results 201920 - November 2019
Drive efficiency
to invest in the customer
offer
4
Strategic cost transformation 5 year plan
Converge Tackle fixed cost
End to end reviews
Retail Operations Marketing and Commercial Operations
Other central support
Logistics and Supply Chain
Project A
Project C
Project D
Shared Services BPO
Property strategy
Project BGNFR procurement
Capital prioritisation
Technology Digital and Corporate Services
pound250-pound350m
pound150-pound250m
pound400-pound600mExecution underway In planning Opportunities identified
pound5bn addressable cost base
43 Interim Results 201920 - November 2019
Grow connected
services
5
44 Interim Results 201920 - November 2019
Grow connected
services
5
Financial Services Priorities
To be the provider of financial services for loyal Sainsburyrsquos and Argos customers
An agile capital and cost efficient provider of simple mobile-led financial services
Vision
Objective
Priorities Reshape Simplify Strengthen
45 Interim Results 201920 - November 2019
Grow connected
services
5
Current Customer Base
Customer Credit Risk Balance Sheet Earnings
Argos Storecards 22m Prime Near Prime
Credit Cards 09m Prime
Personal Loans 05m Prime
Mortgages 9K Exit
Total Lending
Deposits 03m
Insurances 05m Very Low Risk
Travel Money 266 Sites
ATMs 1890
Financial Services reshaping the portfolio
46 Interim Results 201920 - November 2019
Grow connected
services
5
Increase connectivity and value for Group
Stop mortgage acquisition review back book options
No capital input from the Group from now1
Costincome c503 within 5 years
Double UPBT double digit ROCE within 5 years
Upstream cash within 5 years2
Financial Services key targets
Transform the cost base
Improve returns
Financial services cash generative
Reduce risk profile to Group
Stop putting cash in to Financial Services
2
4
6
3
1
5
Focus on Sainsburyrsquos customer base
1 Subject to regulatory changes requirements2 Subject to regulatory approval3 On a Group contribution basis
47 Interim Results 201920 - November 2019
Grow connected
services
5
Nectar
bull Biggest loyalty programme in the UK
bull Over 18 million collectors
bull Most recognised loyalty brand in the UK
bull Launch of Nectar digital- 21 million app users- Increase in overall Nectar participation- Increased levels of personalisation- 138000 new Nectar customers- 1 app on launch weekend
bull Coalition strengthened with addition of Esso in June 2019
48 Interim Results 201920 - November 2019
Provide a seamless customer
experience
6
49 Interim Results 201920 - November 2019
Provide a seamless customer
experience
6
Digital
bull Groceries Online sales penetration of 8- App accounts for over 20 of orders
bull 21 million digital Nectar app users
bull 14 million Argos Financial Services app downloads
bull Smartshop rollout in over 350 stores
Groceries online
Chop Chop
SmartShop
Universaldiscovery
Seamlessfinancialservices
Singlebasket
50 Interim Results 201920 - November 2019
We will help our customers live well for less
Confident in the core Integrated customer offer
One multi brand multi channel business
Strong cash generation supporting investment dividend and allowing deleverage
Financial flexibility and resilience
Sustainable cost reduction covering cost inflation and funding investment in our competitive offer
QampA
APPENDIX Interim Results 201920 - November 2019
Appendices
APPENDIX Interim Results 201920 - November 2019
Guidance for 201920
1
Spacebull Expect to open 2 new Sainsburyrsquos supermarkets and up to 15 convenience storesbull Expect to open around 25 Argos stores in Sainsburyrsquos (of which 11 are
relocations) resulting in around 305 Argos stores in supermarketsbull Expect to close 2 supermarkets around 25 convenience stores and around 20
Argos stores in FY201920 as part of announced property closure programme of 10-15 supermarkets 30-40 convenience stores and 60-70 Argos stores
Financial Servicesbull Financial services underlying operating profit expected to be cpound45m including a
cpound10m benefit as a result of a change in transfer pricing between Argos and Argos Financial Services
bull Financial Services non-underlying costs are expected to be around pound30mbull No further capital injections into the Bank are expected following pound35m in H1 201920
Depreciation and amortisationbull Expect underlying retail depreciation and amortisation of around pound12bn
including cpound500m right of use asset depreciation
CostsOperating cost inflationbull Cost inflation between 2 and 3Cost savingsbull Continue to deliver cost savings to at least offset the impact of cost inflation
Finance costsbull Net finance costs of around pound405m including pound320m lease interest in
201920 following the introduction of IFRS 16
One-off itemsbull In 201920 cash outflows as a result of items excluded from
underlying results should not exceed pound100mbull Property strategy programme one-off costs expected to be
pound230m-pound270m of which cash costs are pound30-40m
Dividendbull Sainsburyrsquos plans to change the full year dividend policy to 19x cover by
underlying earnings (versus 20x previously) to offset the dilutive (non cash) impact of IFRS 16 on underlying earnings
Capital expenditurebull Retail capital expenditure to be around pound550mbull Retail capital expenditure is expected to be around pound550m-pound600m per
annum over the medium term
Net debtbull Net debt before fair value movements on derivatives to reduce by at
least pound300m
Tax ratebull Underlying tax rate to be between 25 and 26
APPENDIX Interim Results 201920 - November 2019
Retail sales
1 Sales including VAT excluding fuel
LFL sales growth1
(10)
Sales from net new space1
04
Total sales growth1
(06)
Supermarkets2
(07)
Convenience20
Groceries Online
70
Channels
(01)(25)
(12)
2 Supermarket sales include Argos SiS sales FY 1819 16
pound139bn
pound103bnGrocery
pound30bnGeneralMerchandise
pound488mClothing
2
Chart1
201819
194
66
1
Sheet1
APPENDIX Interim Results 201920 - November 2019
Sainsburyrsquos sales area and store numbersAs at 21 September 2019
Sainsburyrsquos store estateAs at 21 September 2019
Sq ftsales area
82446
870
40001 to60000
20001 to40000
10000 to20000
Under10000 Total
Over60000
0122122
0197197
0175175
06767
824607
1431
Argos storesArgos in SainsburyrsquosArgos in HomebaseOtherArgos total store numbers
Habitat1
Collection points
594281
8-
883
16317
As at21 Sept 2019
Disposalsclosures
Newstores
As at9 March 2019
17--8
-1
(7)-
(2)-
(9)
-(36)
588288
6-
88216
282
ConvenienceSupermarketsTotal stores
Number of stores
Sq ftsales area
1929350
2279
40001 to60000
20001 to40000
10000 to20000
Under10000 Total
Over60000
-18441844
-58185818
-85018501
-46604660
19292117323102
ConvenienceSupermarketsTotal stores
Space by store size (lsquo000 sq ft)
Argos and Habitat store numbers
1 5 Habitat stores 11 Habitat stores in Sainsburys
4
APPENDIX Interim Results 201920 - November 2019
ClosureBitterne West
Sainsburyrsquos investment programme201920
Q1
Supermarkets ConvenienceNew storesMilton Keynes Brooklands District CentBromley High StLeeds Wike Ridge LaneSalford Harbour CityCanterbury High St
ReplacementMayfair Stratton St
ClosuresMayfairWarren St
Q1Q1Q1Q2Q2
Q2
Q1Q2
5
APPENDIX Interim Results 201920 - November 2019
Retail margin
Retail sales (inc VAT inc fuel)(exc VAT inc fuel)
Retail underlying EBITDAR1
Retail underlying EBITDAR margin 2
at constant fuel pricesRetail underlying operating profit3
Retail underlying operating margin 4
at constant fuel prices
1656714808
10677272
4373030
1661214856
11147575
4873333
030342
30 bps28 bps10333 bps32 bps
1 Retail underlying operating profit before net rental income of pound6 million and underlying depreciation and amortisation of pound636 million2 Retail underlying EBITDAR divided by underlying retail sales excluding VAT3 Retail underlying earnings before interest tax and Sainsburyrsquos underlying share of post-tax profit from joint ventures4 Retail underlying operating profit divided by underlying retail sales excluding VAT
poundm H1201920
H1201819
Change
6
APPENDIX Interim Results 201920 - November 2019
H1201920
H1201819
Group retail
Return on capital employed 1
Net debt to EBITDAR (times)23
Fixed charge cover (times)2
Underlying tax rate Core retail capex sales5
713126
26515
743326
25715
poundm
1 ROCE Return is defined as a 52 week rolling underlying profit before interest and tax Capital employed is defined as group net assets2 Net debt of pound6778 million includes lease obligations under IFRS 16 and perpetual securities treated as debt divided by Group underlying EBITDAR of pound2171 million calculated for a 52-week period to 21 September 20193 Group underlying EBITDAR divided by rent (both capital and interest) and net finance costs where interest on perpetual securities is treated as an underlying finance costs4 52 weeks to 22nd September 2018 is not available due to the implementation of IFRS 16 Comparatives therefore reflect the 52 weeks to 9th March 20195 Includes retail sales inc vat inc fuel
4
4
7
APPENDIX Interim Results 201920 - November 2019
Plc Board
Kevin OrsquoByrneChief Financial Officer
Mike Coupe Group Chief Executive
Dame Susan Rice Senior Independent Director
Matt BrittinNon-Executive Director
Jo HarlowNon-Executive Director
Brian CassinNon-Executive Director
David KeensNon-Executive Director
Jean Tomlin Non-Executive Director
Martin Scicluna Chairman
8
APPENDIX Interim Results 201920 - November 2019
Plc Board
Mike Coupe Group Chief Executive Officer
Skills and experienceAppointed Group Chief Executive Officer on 9 July 2014 Mike has been a member of the Operating Board since October 2004 Mike has vast retail industry experience in trading strategy marketing digital and online as well as multi-site store experience He joined Sainsburyrsquos from Big Food Group where he was a board director of Big Food Group PLC and Managing Director of Iceland Food Stores He previously worked for both Asda and Tesco PLC where he served in a variety of senior management roles
Date of appointment 1 August 2007Mike has served as an Executive Director since 1 August 2007 and as Chief Executive Officer since 9 July 2014
Committee membershipCorporate Responsibility and Sustainability Committee
Kevin OrsquoByrne Chief Financial Officer
Skills and experienceKevin brings to the Board a wealth of retail and finance experience Kevin was previously Chief Executive Officer of Poundland Group Limited until December 2016 and held executive roles at Kingfisher plc from 2008 to 2015 including Divisional Director UK China and Turkey Chief Executive Officer of BampQ UK amp Ireland and Group Finance Director He was previously Group Finance Director of Dixons Retail plc and European Finance Director of Quaker Oats He was a Non-Executive Director of Land Securities Group PLC from 2008 to September 2017 where he was Chairman of the Audit Committee and Senior Independent Director
Date of appointment 9 January 2017
Other current rolesNon-Executive Director of Greene King plc
Skills and experienceMartin brings a breadth of experience and leadership in both executive and non-executive roles His previous roles include positions as the Chairman of Great Portland Estates plc Senior Independent Director and Chair of the Audit Committee of Worldpay Inc and Non-Executive Director and Chair of the Audit Committee of Lloyds Banking Group plc He was a partner at Deloitte LLP for 26 years serving as Chairman from 1995 to 2007 where his clients included Dixons WH Smith Alliance Unichem and Cadburyrsquos
Other current rolesChairman of RSA Insurance Group plc
Martin Scicluna Chairman
Date of appointment 1 November 2018 Martin joined the Board as Chairman Designate and Non-Executive Director on 1 November 2018 He was appointed as Chairman of the Board on 10 March 2019
Committee membershipChair of the Nomination Committee
Dame Susan Rice Senior Independent Director
Skills and experienceSusan has extensive experience as a Non-Executive Director as well as in retail banking financial services leadership and sustainability Her career in retail bankingis particularly relevant to our ownership ofSainsburyrsquos Bank Previously Susan was a member of the First Ministerrsquos Council of Economic Advisors Managing Director of Lloyds Banking Group Scotland and was previously Chief Executive and then Chairman of Lloyds TSB Scotland plc She has also held a range of other non-executive directorships including at the Bank of England and SSE plc
Committee membershipChair of the Remuneration Committee and a member of the Nomination Committee
Date of appointment 1 June 2013
Other current rolesChair of Scottish Water and Business Stream Chair of the Scottish Fiscal Commission Non-Executive Director of the North American Income Trust C Hoare and Co and Senior Independent Director of the North American Income Trust
9
Other current rolesNon-Executive Director and Chairman of the Audit Committee of Centrica plc
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jean Tomlin Non-Executive Director
Skills and experienceJean has extensive experience and breadth of skills in human resources and corporate responsibility Jean was formerly Director of HR Workforce and Accreditation for The London OrganisingCommittee of the Olympic and Paralympic Games where she set the strategic direction to ensure the mobilisation of the combined 200000-strong workforce including paid staff volunteers and contractors which represented the recruitment and mobilisation of the largest peacetime workforce and set the industry standard for volunteering with the highly acclaimed Games She was previously Group HR Director at Marks and Spencer Group Plc HR Director and founder member of Egg plc and Sales amp Operations Director of Prudential Direct
Date of appointment 1 January 2013
Committee membershipAudit Committee Corporate Responsibility and Sustainability Committee and Nomination Committee
David Keens Non-Executive Director
Skills and experienceDavid has extensive retail experience and knowledge of consumer facing businesses together with his core skills in finance David was formerly Group Finance Director of next plc from 1991 to 2015 and their Group Treasurer from 1986 to 1991 Previous management experience includes nine years in the UK and overseas operations of multinational food manufacturer Nabisco and prior to that seven years in the accountancy profession
Date of appointment 29 April 2015
Committee membershipChair of the Audit Committee and a member of the Nomination Committee
Other current rolesIndependent Board member of Capri Holdings Limited Non-Executive Director of Hakluyt and Chief Executive Officer of Chanzo Limited
Other current rolesNon-Executive Director Senior Independent Director and Chair of the Audit Committee of Auto Trader Group plc
Matt BrittinNon-Executive Director
Skills and experienceMatt has extensive experience of running a high profile fast moving innovative digital business Since 2015 he has been responsible for Googlersquos business and operations in Europe the Middle East and Africa and hersquos been in leadership roles at Google since 2007 Prior to that Matt spent much of his career in media and marketing with particular interests in strategy commercial development and sales performance This included commercial and digital leadership roles in UK media
Date of appointment 27 January 2011
Committee membershipNomination Committee and Remuneration Committee
Other current rolesGooglersquos President ndash Europe Middle East and Africa and Director of The Media Trust
Brian Cassin Non-Executive Director
Skills and experienceBrian brings present day experience of running a FTSE40 group and of big data and analytics ndash topics of key importance to Sainsburyrsquos Brian joined Experian plc as Chief Financial Officer in April 2012 a post he held until his appointment as Chief Executive Officer in July 2014 Prior to this Brian spent his career in investment banking at Greenhill amp Co where he was Managing Director and Partner Brian has also held various roles at Baring Brothers International and at the London Stock Exchange
Date of appointment 1 April 2016
Committee membershipAudit Committee and Nomination Committee
Other current rolesChief Executive Officer of Experian plc
10
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jo Harlow Non-Executive Director
Skills and experienceJo brings a wealth of experience in consumer-facing businesses and in the telecoms and technology industry bothin the UK and internationally Jo spent 12 years in a variety of senior management roles with Nokia and Microsoft Prior to this she spent eight years at PampG and 11 years at Reebok in senior sales and marketing positions in both Europe and the US
Date of appointment 11 September 2017
Committee membershipChair of the Corporate Responsibility and Sustainability Committee and member of the Nomination Committee and Remuneration Committee
Life PresidentLord Sainsbury of Preston Candover KG
Other current rolesNon-Executive Director of InterContinental Hotels plc Non-Executive Director of Halmaplc and Member of the Supervisory Board of Ceconomy AG
11
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief Executive
Tim FallowfieldCompany Secretary amp Corporate Services Director
Kevin OrsquoByrne Chief Financial Officer
Jim BrownChief Executive Officer of Sainsburyrsquos Bank
Paul Mills-HicksFood Commercial Director
Angie RisleyGroup HR Director
Phil JordanGroup Chief InformationOfficer
Simon RobertsRetail and Operations Director
Clo MoriartyGroup Chief Digital Officer
12
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief ExecutiveSee Appendix page 9
Kevin OrsquoByrneChief Financial OfficerSee Appendix page 9
Tim FallowfieldCompany Secretary amp Corporate Services Director
Date of appointment September 2004
Skills and experienceTim joined Sainsburyrsquos in 2001 as Company Secretary and joined the Operating Board in September 2004 In addition to his role as Company Secretary Tim is responsible for the Corporate Services Division comprising Legal Services Data Governance Safety Shareholder Services Insurance and Central Security He chairs the Group Safety Committee and the Data Governance Committee Tim joined Sainsburyrsquos from Exelplc the global logistics company now part of DHL where he was Company Secretary and General Counsel He began his career at the international law firm Clifford Chance and is a qualified solicitor Tim is Chairman of the Disability Confident Business Leaders Group which works with Government in shaping the disability employment agenda and in raising awareness of the benefits of employing disabled people
Jim BrownCEO of Sainsburyrsquos Bank
Skills and experienceJim joined Sainsburyrsquos Bank as CEO in June 2019 and is also a member of the Sainsburyrsquos Group Operating Board He has held a number of senior international Financial Services roles - most recently for RBS in the UK as CEO of Williams and Glyn and prior to that CEO of Ulster Bank in Northern Ireland and the Republic of Ireland Before moving to Ireland he was based in Hong Kong and was CEO Retail and Commercial Banking Asia and the Middle East for RBS and ABN AMRO He has also been a member of the RBS Group Management Committee ABN AMRO Executive Group ABN AMRO Global Consumer Leadership Team and the RBSBank of China Joint Steering Committee Earlier in his career he held a number of senior executive roles for Citibank in Asia and Australia and New Zealand Jim has also held various Board positions including at Ulster Bank Saudi Hollandi Bank The Royal Bank of Scotland (China) Co Ltd and RBS (Pakistan) Ltd He is also a past President of the Institute of Banking in Ireland He is currently a Certified Bank Director
Date of appointment August 2019
Paul Mills-HicksFood Commercial Director
Skills and experiencePaul joined the Operating Board in May 2014 as Food Commercial Director having spent over ten years at Sainsburyrsquos He was closely involved in the formation and execution of the lsquoMaking Sainsburyrsquos Great Againrsquo strategy Following this he held a variety of roles in commercial strategy and finance most recently as Business Unit Director for Grocery Prior to Sainsburyrsquos Paul was European Controller at Marks and Spencer Group PLC and a Director at UBS Warburg
Date of appointment May 2014
13
APPENDIX Interim Results 201920 - November 2019
Operating Board
Angie RisleyGroup HR Director
Skills and experienceAngie was appointed Group HR Director and a member of the Operating Board in January 2013 with responsibility for human resources Angie is also a Director of Sainsburyrsquos Bank plc Angie was most recently Non-Executive Director and Chairman of the Remuneration Committee of Serco plc and prior to this was Group HR Director of Lloyds Banking Group and an Executive Director of Whitbread PLC with responsibility for HR and Corporate Social Responsibility Angie is currently Non-Executive Director and Chair of the Remuneration Committee at Smith amp Nephew plc
Date of appointment January 2013
Phil JordanGroup Chief Information Officer
Skills and experiencePhil joined the Board in January 2018 and has brought a fresh globalperspective on technology to the Operating Board in addition to a wealth of experience in digital data and business transformation Prior to joining Sainsburyrsquos Phil had a long and successful track record in telecommunications Most recently he was Global Chief Information Officer at Telefonica overseeing Digital Transformation and Information Technology and prior to that was Chief Information Officer for Vodafone UKIreland Phil has worked as a Non-Executive Advisor on Technology in the Investment amp Retail Banking sector and is currently a Non-Executive Director of TalkTalk Telecom Group PLC and chairs its Cyber-Security Committee
Date of appointment January 2018
Simon RobertsRetail and Operations Director
Skills and experienceSimon joined Sainsburyrsquos and the Operating Board in July 2017 as Central Retail amp Operations Director responsible for Stores Central operation and Logistics In his previous role he was Executive Vice President of Walgreens Boots Alliance and President of Boots with responsibility for commercial and retail operations across the UK and Ireland Prior to Boots Simon was at Marks and Spencer Group PLC where he held operational and customer leadership roles across stores divisions and central operations Simon is also the Non-Executive Chairman at the Institute ofCustomer Service
Date of appointment July 2017
Clodagh MoriartyGroup Chief Digital Officer
Skills and experienceClodagh was appointed Group Chief Digital Officer in June 2018 Clodagh leads the delivery of a consistent and first-rate digital experience for customers across Sainsburyrsquos Argos and Sainsburyrsquos BankClodagh joined Sainsburyrsquos in 2010 from Bain amp Co management consultants where she had gained experience working on a broad range of projects across multiple sectors and countries Following two years as Head of Strategy at Sainsburyrsquosshe moved into Food Commercial as Category Manager for Meal Solutions and then became Head of Online Trading spanning Food General Merchandise and Clothing before being promoted to Director of Online in 2016 In this role Clodagh was instrumental in driving innovation within Groceries Online and launching new initiatives including SmartShop and Chop Chop
Date of appointment June 2018
14
APPENDIX Interim Results 201920 - November 2019
Supplementary financial details
3 Financial calendarQ3 trading statement(15 weeks to 4 January 2020)
Preliminary results(52 weeks to 7 March 2020)
8 January 2020
30 April 2020
1 Weighted average number of shares
The interim dividend datesOrdinary shares
Ex-dividend 14 November 2019Record 15 November 2019Payment 20 December 2019
More distinctive rangemore reason to shop at Sainsburyrsquos
Reduced SKU count -20operational efficiencies
Higher cash gross profit +2 YOY
Volumes +8 operational efficiencies
41 Interim Results 201920 - November 2019
Drive efficiency
to invest in the customer
offer
4
BAU savings to offset cost inflation
Manages inflationary pressures
BAU savingsH1 201920
Procurement GNFR
Retail Technology Efficiencies
Retail HRRetail
management structures
Shrink Reduction
42 Interim Results 201920 - November 2019
Drive efficiency
to invest in the customer
offer
4
Strategic cost transformation 5 year plan
Converge Tackle fixed cost
End to end reviews
Retail Operations Marketing and Commercial Operations
Other central support
Logistics and Supply Chain
Project A
Project C
Project D
Shared Services BPO
Property strategy
Project BGNFR procurement
Capital prioritisation
Technology Digital and Corporate Services
pound250-pound350m
pound150-pound250m
pound400-pound600mExecution underway In planning Opportunities identified
pound5bn addressable cost base
43 Interim Results 201920 - November 2019
Grow connected
services
5
44 Interim Results 201920 - November 2019
Grow connected
services
5
Financial Services Priorities
To be the provider of financial services for loyal Sainsburyrsquos and Argos customers
An agile capital and cost efficient provider of simple mobile-led financial services
Vision
Objective
Priorities Reshape Simplify Strengthen
45 Interim Results 201920 - November 2019
Grow connected
services
5
Current Customer Base
Customer Credit Risk Balance Sheet Earnings
Argos Storecards 22m Prime Near Prime
Credit Cards 09m Prime
Personal Loans 05m Prime
Mortgages 9K Exit
Total Lending
Deposits 03m
Insurances 05m Very Low Risk
Travel Money 266 Sites
ATMs 1890
Financial Services reshaping the portfolio
46 Interim Results 201920 - November 2019
Grow connected
services
5
Increase connectivity and value for Group
Stop mortgage acquisition review back book options
No capital input from the Group from now1
Costincome c503 within 5 years
Double UPBT double digit ROCE within 5 years
Upstream cash within 5 years2
Financial Services key targets
Transform the cost base
Improve returns
Financial services cash generative
Reduce risk profile to Group
Stop putting cash in to Financial Services
2
4
6
3
1
5
Focus on Sainsburyrsquos customer base
1 Subject to regulatory changes requirements2 Subject to regulatory approval3 On a Group contribution basis
47 Interim Results 201920 - November 2019
Grow connected
services
5
Nectar
bull Biggest loyalty programme in the UK
bull Over 18 million collectors
bull Most recognised loyalty brand in the UK
bull Launch of Nectar digital- 21 million app users- Increase in overall Nectar participation- Increased levels of personalisation- 138000 new Nectar customers- 1 app on launch weekend
bull Coalition strengthened with addition of Esso in June 2019
48 Interim Results 201920 - November 2019
Provide a seamless customer
experience
6
49 Interim Results 201920 - November 2019
Provide a seamless customer
experience
6
Digital
bull Groceries Online sales penetration of 8- App accounts for over 20 of orders
bull 21 million digital Nectar app users
bull 14 million Argos Financial Services app downloads
bull Smartshop rollout in over 350 stores
Groceries online
Chop Chop
SmartShop
Universaldiscovery
Seamlessfinancialservices
Singlebasket
50 Interim Results 201920 - November 2019
We will help our customers live well for less
Confident in the core Integrated customer offer
One multi brand multi channel business
Strong cash generation supporting investment dividend and allowing deleverage
Financial flexibility and resilience
Sustainable cost reduction covering cost inflation and funding investment in our competitive offer
QampA
APPENDIX Interim Results 201920 - November 2019
Appendices
APPENDIX Interim Results 201920 - November 2019
Guidance for 201920
1
Spacebull Expect to open 2 new Sainsburyrsquos supermarkets and up to 15 convenience storesbull Expect to open around 25 Argos stores in Sainsburyrsquos (of which 11 are
relocations) resulting in around 305 Argos stores in supermarketsbull Expect to close 2 supermarkets around 25 convenience stores and around 20
Argos stores in FY201920 as part of announced property closure programme of 10-15 supermarkets 30-40 convenience stores and 60-70 Argos stores
Financial Servicesbull Financial services underlying operating profit expected to be cpound45m including a
cpound10m benefit as a result of a change in transfer pricing between Argos and Argos Financial Services
bull Financial Services non-underlying costs are expected to be around pound30mbull No further capital injections into the Bank are expected following pound35m in H1 201920
Depreciation and amortisationbull Expect underlying retail depreciation and amortisation of around pound12bn
including cpound500m right of use asset depreciation
CostsOperating cost inflationbull Cost inflation between 2 and 3Cost savingsbull Continue to deliver cost savings to at least offset the impact of cost inflation
Finance costsbull Net finance costs of around pound405m including pound320m lease interest in
201920 following the introduction of IFRS 16
One-off itemsbull In 201920 cash outflows as a result of items excluded from
underlying results should not exceed pound100mbull Property strategy programme one-off costs expected to be
pound230m-pound270m of which cash costs are pound30-40m
Dividendbull Sainsburyrsquos plans to change the full year dividend policy to 19x cover by
underlying earnings (versus 20x previously) to offset the dilutive (non cash) impact of IFRS 16 on underlying earnings
Capital expenditurebull Retail capital expenditure to be around pound550mbull Retail capital expenditure is expected to be around pound550m-pound600m per
annum over the medium term
Net debtbull Net debt before fair value movements on derivatives to reduce by at
least pound300m
Tax ratebull Underlying tax rate to be between 25 and 26
APPENDIX Interim Results 201920 - November 2019
Retail sales
1 Sales including VAT excluding fuel
LFL sales growth1
(10)
Sales from net new space1
04
Total sales growth1
(06)
Supermarkets2
(07)
Convenience20
Groceries Online
70
Channels
(01)(25)
(12)
2 Supermarket sales include Argos SiS sales FY 1819 16
pound139bn
pound103bnGrocery
pound30bnGeneralMerchandise
pound488mClothing
2
Chart1
201819
194
66
1
Sheet1
APPENDIX Interim Results 201920 - November 2019
Sainsburyrsquos sales area and store numbersAs at 21 September 2019
Sainsburyrsquos store estateAs at 21 September 2019
Sq ftsales area
82446
870
40001 to60000
20001 to40000
10000 to20000
Under10000 Total
Over60000
0122122
0197197
0175175
06767
824607
1431
Argos storesArgos in SainsburyrsquosArgos in HomebaseOtherArgos total store numbers
Habitat1
Collection points
594281
8-
883
16317
As at21 Sept 2019
Disposalsclosures
Newstores
As at9 March 2019
17--8
-1
(7)-
(2)-
(9)
-(36)
588288
6-
88216
282
ConvenienceSupermarketsTotal stores
Number of stores
Sq ftsales area
1929350
2279
40001 to60000
20001 to40000
10000 to20000
Under10000 Total
Over60000
-18441844
-58185818
-85018501
-46604660
19292117323102
ConvenienceSupermarketsTotal stores
Space by store size (lsquo000 sq ft)
Argos and Habitat store numbers
1 5 Habitat stores 11 Habitat stores in Sainsburys
4
APPENDIX Interim Results 201920 - November 2019
ClosureBitterne West
Sainsburyrsquos investment programme201920
Q1
Supermarkets ConvenienceNew storesMilton Keynes Brooklands District CentBromley High StLeeds Wike Ridge LaneSalford Harbour CityCanterbury High St
ReplacementMayfair Stratton St
ClosuresMayfairWarren St
Q1Q1Q1Q2Q2
Q2
Q1Q2
5
APPENDIX Interim Results 201920 - November 2019
Retail margin
Retail sales (inc VAT inc fuel)(exc VAT inc fuel)
Retail underlying EBITDAR1
Retail underlying EBITDAR margin 2
at constant fuel pricesRetail underlying operating profit3
Retail underlying operating margin 4
at constant fuel prices
1656714808
10677272
4373030
1661214856
11147575
4873333
030342
30 bps28 bps10333 bps32 bps
1 Retail underlying operating profit before net rental income of pound6 million and underlying depreciation and amortisation of pound636 million2 Retail underlying EBITDAR divided by underlying retail sales excluding VAT3 Retail underlying earnings before interest tax and Sainsburyrsquos underlying share of post-tax profit from joint ventures4 Retail underlying operating profit divided by underlying retail sales excluding VAT
poundm H1201920
H1201819
Change
6
APPENDIX Interim Results 201920 - November 2019
H1201920
H1201819
Group retail
Return on capital employed 1
Net debt to EBITDAR (times)23
Fixed charge cover (times)2
Underlying tax rate Core retail capex sales5
713126
26515
743326
25715
poundm
1 ROCE Return is defined as a 52 week rolling underlying profit before interest and tax Capital employed is defined as group net assets2 Net debt of pound6778 million includes lease obligations under IFRS 16 and perpetual securities treated as debt divided by Group underlying EBITDAR of pound2171 million calculated for a 52-week period to 21 September 20193 Group underlying EBITDAR divided by rent (both capital and interest) and net finance costs where interest on perpetual securities is treated as an underlying finance costs4 52 weeks to 22nd September 2018 is not available due to the implementation of IFRS 16 Comparatives therefore reflect the 52 weeks to 9th March 20195 Includes retail sales inc vat inc fuel
4
4
7
APPENDIX Interim Results 201920 - November 2019
Plc Board
Kevin OrsquoByrneChief Financial Officer
Mike Coupe Group Chief Executive
Dame Susan Rice Senior Independent Director
Matt BrittinNon-Executive Director
Jo HarlowNon-Executive Director
Brian CassinNon-Executive Director
David KeensNon-Executive Director
Jean Tomlin Non-Executive Director
Martin Scicluna Chairman
8
APPENDIX Interim Results 201920 - November 2019
Plc Board
Mike Coupe Group Chief Executive Officer
Skills and experienceAppointed Group Chief Executive Officer on 9 July 2014 Mike has been a member of the Operating Board since October 2004 Mike has vast retail industry experience in trading strategy marketing digital and online as well as multi-site store experience He joined Sainsburyrsquos from Big Food Group where he was a board director of Big Food Group PLC and Managing Director of Iceland Food Stores He previously worked for both Asda and Tesco PLC where he served in a variety of senior management roles
Date of appointment 1 August 2007Mike has served as an Executive Director since 1 August 2007 and as Chief Executive Officer since 9 July 2014
Committee membershipCorporate Responsibility and Sustainability Committee
Kevin OrsquoByrne Chief Financial Officer
Skills and experienceKevin brings to the Board a wealth of retail and finance experience Kevin was previously Chief Executive Officer of Poundland Group Limited until December 2016 and held executive roles at Kingfisher plc from 2008 to 2015 including Divisional Director UK China and Turkey Chief Executive Officer of BampQ UK amp Ireland and Group Finance Director He was previously Group Finance Director of Dixons Retail plc and European Finance Director of Quaker Oats He was a Non-Executive Director of Land Securities Group PLC from 2008 to September 2017 where he was Chairman of the Audit Committee and Senior Independent Director
Date of appointment 9 January 2017
Other current rolesNon-Executive Director of Greene King plc
Skills and experienceMartin brings a breadth of experience and leadership in both executive and non-executive roles His previous roles include positions as the Chairman of Great Portland Estates plc Senior Independent Director and Chair of the Audit Committee of Worldpay Inc and Non-Executive Director and Chair of the Audit Committee of Lloyds Banking Group plc He was a partner at Deloitte LLP for 26 years serving as Chairman from 1995 to 2007 where his clients included Dixons WH Smith Alliance Unichem and Cadburyrsquos
Other current rolesChairman of RSA Insurance Group plc
Martin Scicluna Chairman
Date of appointment 1 November 2018 Martin joined the Board as Chairman Designate and Non-Executive Director on 1 November 2018 He was appointed as Chairman of the Board on 10 March 2019
Committee membershipChair of the Nomination Committee
Dame Susan Rice Senior Independent Director
Skills and experienceSusan has extensive experience as a Non-Executive Director as well as in retail banking financial services leadership and sustainability Her career in retail bankingis particularly relevant to our ownership ofSainsburyrsquos Bank Previously Susan was a member of the First Ministerrsquos Council of Economic Advisors Managing Director of Lloyds Banking Group Scotland and was previously Chief Executive and then Chairman of Lloyds TSB Scotland plc She has also held a range of other non-executive directorships including at the Bank of England and SSE plc
Committee membershipChair of the Remuneration Committee and a member of the Nomination Committee
Date of appointment 1 June 2013
Other current rolesChair of Scottish Water and Business Stream Chair of the Scottish Fiscal Commission Non-Executive Director of the North American Income Trust C Hoare and Co and Senior Independent Director of the North American Income Trust
9
Other current rolesNon-Executive Director and Chairman of the Audit Committee of Centrica plc
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jean Tomlin Non-Executive Director
Skills and experienceJean has extensive experience and breadth of skills in human resources and corporate responsibility Jean was formerly Director of HR Workforce and Accreditation for The London OrganisingCommittee of the Olympic and Paralympic Games where she set the strategic direction to ensure the mobilisation of the combined 200000-strong workforce including paid staff volunteers and contractors which represented the recruitment and mobilisation of the largest peacetime workforce and set the industry standard for volunteering with the highly acclaimed Games She was previously Group HR Director at Marks and Spencer Group Plc HR Director and founder member of Egg plc and Sales amp Operations Director of Prudential Direct
Date of appointment 1 January 2013
Committee membershipAudit Committee Corporate Responsibility and Sustainability Committee and Nomination Committee
David Keens Non-Executive Director
Skills and experienceDavid has extensive retail experience and knowledge of consumer facing businesses together with his core skills in finance David was formerly Group Finance Director of next plc from 1991 to 2015 and their Group Treasurer from 1986 to 1991 Previous management experience includes nine years in the UK and overseas operations of multinational food manufacturer Nabisco and prior to that seven years in the accountancy profession
Date of appointment 29 April 2015
Committee membershipChair of the Audit Committee and a member of the Nomination Committee
Other current rolesIndependent Board member of Capri Holdings Limited Non-Executive Director of Hakluyt and Chief Executive Officer of Chanzo Limited
Other current rolesNon-Executive Director Senior Independent Director and Chair of the Audit Committee of Auto Trader Group plc
Matt BrittinNon-Executive Director
Skills and experienceMatt has extensive experience of running a high profile fast moving innovative digital business Since 2015 he has been responsible for Googlersquos business and operations in Europe the Middle East and Africa and hersquos been in leadership roles at Google since 2007 Prior to that Matt spent much of his career in media and marketing with particular interests in strategy commercial development and sales performance This included commercial and digital leadership roles in UK media
Date of appointment 27 January 2011
Committee membershipNomination Committee and Remuneration Committee
Other current rolesGooglersquos President ndash Europe Middle East and Africa and Director of The Media Trust
Brian Cassin Non-Executive Director
Skills and experienceBrian brings present day experience of running a FTSE40 group and of big data and analytics ndash topics of key importance to Sainsburyrsquos Brian joined Experian plc as Chief Financial Officer in April 2012 a post he held until his appointment as Chief Executive Officer in July 2014 Prior to this Brian spent his career in investment banking at Greenhill amp Co where he was Managing Director and Partner Brian has also held various roles at Baring Brothers International and at the London Stock Exchange
Date of appointment 1 April 2016
Committee membershipAudit Committee and Nomination Committee
Other current rolesChief Executive Officer of Experian plc
10
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jo Harlow Non-Executive Director
Skills and experienceJo brings a wealth of experience in consumer-facing businesses and in the telecoms and technology industry bothin the UK and internationally Jo spent 12 years in a variety of senior management roles with Nokia and Microsoft Prior to this she spent eight years at PampG and 11 years at Reebok in senior sales and marketing positions in both Europe and the US
Date of appointment 11 September 2017
Committee membershipChair of the Corporate Responsibility and Sustainability Committee and member of the Nomination Committee and Remuneration Committee
Life PresidentLord Sainsbury of Preston Candover KG
Other current rolesNon-Executive Director of InterContinental Hotels plc Non-Executive Director of Halmaplc and Member of the Supervisory Board of Ceconomy AG
11
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief Executive
Tim FallowfieldCompany Secretary amp Corporate Services Director
Kevin OrsquoByrne Chief Financial Officer
Jim BrownChief Executive Officer of Sainsburyrsquos Bank
Paul Mills-HicksFood Commercial Director
Angie RisleyGroup HR Director
Phil JordanGroup Chief InformationOfficer
Simon RobertsRetail and Operations Director
Clo MoriartyGroup Chief Digital Officer
12
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief ExecutiveSee Appendix page 9
Kevin OrsquoByrneChief Financial OfficerSee Appendix page 9
Tim FallowfieldCompany Secretary amp Corporate Services Director
Date of appointment September 2004
Skills and experienceTim joined Sainsburyrsquos in 2001 as Company Secretary and joined the Operating Board in September 2004 In addition to his role as Company Secretary Tim is responsible for the Corporate Services Division comprising Legal Services Data Governance Safety Shareholder Services Insurance and Central Security He chairs the Group Safety Committee and the Data Governance Committee Tim joined Sainsburyrsquos from Exelplc the global logistics company now part of DHL where he was Company Secretary and General Counsel He began his career at the international law firm Clifford Chance and is a qualified solicitor Tim is Chairman of the Disability Confident Business Leaders Group which works with Government in shaping the disability employment agenda and in raising awareness of the benefits of employing disabled people
Jim BrownCEO of Sainsburyrsquos Bank
Skills and experienceJim joined Sainsburyrsquos Bank as CEO in June 2019 and is also a member of the Sainsburyrsquos Group Operating Board He has held a number of senior international Financial Services roles - most recently for RBS in the UK as CEO of Williams and Glyn and prior to that CEO of Ulster Bank in Northern Ireland and the Republic of Ireland Before moving to Ireland he was based in Hong Kong and was CEO Retail and Commercial Banking Asia and the Middle East for RBS and ABN AMRO He has also been a member of the RBS Group Management Committee ABN AMRO Executive Group ABN AMRO Global Consumer Leadership Team and the RBSBank of China Joint Steering Committee Earlier in his career he held a number of senior executive roles for Citibank in Asia and Australia and New Zealand Jim has also held various Board positions including at Ulster Bank Saudi Hollandi Bank The Royal Bank of Scotland (China) Co Ltd and RBS (Pakistan) Ltd He is also a past President of the Institute of Banking in Ireland He is currently a Certified Bank Director
Date of appointment August 2019
Paul Mills-HicksFood Commercial Director
Skills and experiencePaul joined the Operating Board in May 2014 as Food Commercial Director having spent over ten years at Sainsburyrsquos He was closely involved in the formation and execution of the lsquoMaking Sainsburyrsquos Great Againrsquo strategy Following this he held a variety of roles in commercial strategy and finance most recently as Business Unit Director for Grocery Prior to Sainsburyrsquos Paul was European Controller at Marks and Spencer Group PLC and a Director at UBS Warburg
Date of appointment May 2014
13
APPENDIX Interim Results 201920 - November 2019
Operating Board
Angie RisleyGroup HR Director
Skills and experienceAngie was appointed Group HR Director and a member of the Operating Board in January 2013 with responsibility for human resources Angie is also a Director of Sainsburyrsquos Bank plc Angie was most recently Non-Executive Director and Chairman of the Remuneration Committee of Serco plc and prior to this was Group HR Director of Lloyds Banking Group and an Executive Director of Whitbread PLC with responsibility for HR and Corporate Social Responsibility Angie is currently Non-Executive Director and Chair of the Remuneration Committee at Smith amp Nephew plc
Date of appointment January 2013
Phil JordanGroup Chief Information Officer
Skills and experiencePhil joined the Board in January 2018 and has brought a fresh globalperspective on technology to the Operating Board in addition to a wealth of experience in digital data and business transformation Prior to joining Sainsburyrsquos Phil had a long and successful track record in telecommunications Most recently he was Global Chief Information Officer at Telefonica overseeing Digital Transformation and Information Technology and prior to that was Chief Information Officer for Vodafone UKIreland Phil has worked as a Non-Executive Advisor on Technology in the Investment amp Retail Banking sector and is currently a Non-Executive Director of TalkTalk Telecom Group PLC and chairs its Cyber-Security Committee
Date of appointment January 2018
Simon RobertsRetail and Operations Director
Skills and experienceSimon joined Sainsburyrsquos and the Operating Board in July 2017 as Central Retail amp Operations Director responsible for Stores Central operation and Logistics In his previous role he was Executive Vice President of Walgreens Boots Alliance and President of Boots with responsibility for commercial and retail operations across the UK and Ireland Prior to Boots Simon was at Marks and Spencer Group PLC where he held operational and customer leadership roles across stores divisions and central operations Simon is also the Non-Executive Chairman at the Institute ofCustomer Service
Date of appointment July 2017
Clodagh MoriartyGroup Chief Digital Officer
Skills and experienceClodagh was appointed Group Chief Digital Officer in June 2018 Clodagh leads the delivery of a consistent and first-rate digital experience for customers across Sainsburyrsquos Argos and Sainsburyrsquos BankClodagh joined Sainsburyrsquos in 2010 from Bain amp Co management consultants where she had gained experience working on a broad range of projects across multiple sectors and countries Following two years as Head of Strategy at Sainsburyrsquosshe moved into Food Commercial as Category Manager for Meal Solutions and then became Head of Online Trading spanning Food General Merchandise and Clothing before being promoted to Director of Online in 2016 In this role Clodagh was instrumental in driving innovation within Groceries Online and launching new initiatives including SmartShop and Chop Chop
Date of appointment June 2018
14
APPENDIX Interim Results 201920 - November 2019
Supplementary financial details
3 Financial calendarQ3 trading statement(15 weeks to 4 January 2020)
Preliminary results(52 weeks to 7 March 2020)
8 January 2020
30 April 2020
1 Weighted average number of shares
The interim dividend datesOrdinary shares
Ex-dividend 14 November 2019Record 15 November 2019Payment 20 December 2019
More distinctive rangemore reason to shop at Sainsburyrsquos
Reduced SKU count -20operational efficiencies
Higher cash gross profit +2 YOY
Volumes +8 operational efficiencies
41 Interim Results 201920 - November 2019
Drive efficiency
to invest in the customer
offer
4
BAU savings to offset cost inflation
Manages inflationary pressures
BAU savingsH1 201920
Procurement GNFR
Retail Technology Efficiencies
Retail HRRetail
management structures
Shrink Reduction
42 Interim Results 201920 - November 2019
Drive efficiency
to invest in the customer
offer
4
Strategic cost transformation 5 year plan
Converge Tackle fixed cost
End to end reviews
Retail Operations Marketing and Commercial Operations
Other central support
Logistics and Supply Chain
Project A
Project C
Project D
Shared Services BPO
Property strategy
Project BGNFR procurement
Capital prioritisation
Technology Digital and Corporate Services
pound250-pound350m
pound150-pound250m
pound400-pound600mExecution underway In planning Opportunities identified
pound5bn addressable cost base
43 Interim Results 201920 - November 2019
Grow connected
services
5
44 Interim Results 201920 - November 2019
Grow connected
services
5
Financial Services Priorities
To be the provider of financial services for loyal Sainsburyrsquos and Argos customers
An agile capital and cost efficient provider of simple mobile-led financial services
Vision
Objective
Priorities Reshape Simplify Strengthen
45 Interim Results 201920 - November 2019
Grow connected
services
5
Current Customer Base
Customer Credit Risk Balance Sheet Earnings
Argos Storecards 22m Prime Near Prime
Credit Cards 09m Prime
Personal Loans 05m Prime
Mortgages 9K Exit
Total Lending
Deposits 03m
Insurances 05m Very Low Risk
Travel Money 266 Sites
ATMs 1890
Financial Services reshaping the portfolio
46 Interim Results 201920 - November 2019
Grow connected
services
5
Increase connectivity and value for Group
Stop mortgage acquisition review back book options
No capital input from the Group from now1
Costincome c503 within 5 years
Double UPBT double digit ROCE within 5 years
Upstream cash within 5 years2
Financial Services key targets
Transform the cost base
Improve returns
Financial services cash generative
Reduce risk profile to Group
Stop putting cash in to Financial Services
2
4
6
3
1
5
Focus on Sainsburyrsquos customer base
1 Subject to regulatory changes requirements2 Subject to regulatory approval3 On a Group contribution basis
47 Interim Results 201920 - November 2019
Grow connected
services
5
Nectar
bull Biggest loyalty programme in the UK
bull Over 18 million collectors
bull Most recognised loyalty brand in the UK
bull Launch of Nectar digital- 21 million app users- Increase in overall Nectar participation- Increased levels of personalisation- 138000 new Nectar customers- 1 app on launch weekend
bull Coalition strengthened with addition of Esso in June 2019
48 Interim Results 201920 - November 2019
Provide a seamless customer
experience
6
49 Interim Results 201920 - November 2019
Provide a seamless customer
experience
6
Digital
bull Groceries Online sales penetration of 8- App accounts for over 20 of orders
bull 21 million digital Nectar app users
bull 14 million Argos Financial Services app downloads
bull Smartshop rollout in over 350 stores
Groceries online
Chop Chop
SmartShop
Universaldiscovery
Seamlessfinancialservices
Singlebasket
50 Interim Results 201920 - November 2019
We will help our customers live well for less
Confident in the core Integrated customer offer
One multi brand multi channel business
Strong cash generation supporting investment dividend and allowing deleverage
Financial flexibility and resilience
Sustainable cost reduction covering cost inflation and funding investment in our competitive offer
QampA
APPENDIX Interim Results 201920 - November 2019
Appendices
APPENDIX Interim Results 201920 - November 2019
Guidance for 201920
1
Spacebull Expect to open 2 new Sainsburyrsquos supermarkets and up to 15 convenience storesbull Expect to open around 25 Argos stores in Sainsburyrsquos (of which 11 are
relocations) resulting in around 305 Argos stores in supermarketsbull Expect to close 2 supermarkets around 25 convenience stores and around 20
Argos stores in FY201920 as part of announced property closure programme of 10-15 supermarkets 30-40 convenience stores and 60-70 Argos stores
Financial Servicesbull Financial services underlying operating profit expected to be cpound45m including a
cpound10m benefit as a result of a change in transfer pricing between Argos and Argos Financial Services
bull Financial Services non-underlying costs are expected to be around pound30mbull No further capital injections into the Bank are expected following pound35m in H1 201920
Depreciation and amortisationbull Expect underlying retail depreciation and amortisation of around pound12bn
including cpound500m right of use asset depreciation
CostsOperating cost inflationbull Cost inflation between 2 and 3Cost savingsbull Continue to deliver cost savings to at least offset the impact of cost inflation
Finance costsbull Net finance costs of around pound405m including pound320m lease interest in
201920 following the introduction of IFRS 16
One-off itemsbull In 201920 cash outflows as a result of items excluded from
underlying results should not exceed pound100mbull Property strategy programme one-off costs expected to be
pound230m-pound270m of which cash costs are pound30-40m
Dividendbull Sainsburyrsquos plans to change the full year dividend policy to 19x cover by
underlying earnings (versus 20x previously) to offset the dilutive (non cash) impact of IFRS 16 on underlying earnings
Capital expenditurebull Retail capital expenditure to be around pound550mbull Retail capital expenditure is expected to be around pound550m-pound600m per
annum over the medium term
Net debtbull Net debt before fair value movements on derivatives to reduce by at
least pound300m
Tax ratebull Underlying tax rate to be between 25 and 26
APPENDIX Interim Results 201920 - November 2019
Retail sales
1 Sales including VAT excluding fuel
LFL sales growth1
(10)
Sales from net new space1
04
Total sales growth1
(06)
Supermarkets2
(07)
Convenience20
Groceries Online
70
Channels
(01)(25)
(12)
2 Supermarket sales include Argos SiS sales FY 1819 16
pound139bn
pound103bnGrocery
pound30bnGeneralMerchandise
pound488mClothing
2
Chart1
201819
194
66
1
Sheet1
APPENDIX Interim Results 201920 - November 2019
Sainsburyrsquos sales area and store numbersAs at 21 September 2019
Sainsburyrsquos store estateAs at 21 September 2019
Sq ftsales area
82446
870
40001 to60000
20001 to40000
10000 to20000
Under10000 Total
Over60000
0122122
0197197
0175175
06767
824607
1431
Argos storesArgos in SainsburyrsquosArgos in HomebaseOtherArgos total store numbers
Habitat1
Collection points
594281
8-
883
16317
As at21 Sept 2019
Disposalsclosures
Newstores
As at9 March 2019
17--8
-1
(7)-
(2)-
(9)
-(36)
588288
6-
88216
282
ConvenienceSupermarketsTotal stores
Number of stores
Sq ftsales area
1929350
2279
40001 to60000
20001 to40000
10000 to20000
Under10000 Total
Over60000
-18441844
-58185818
-85018501
-46604660
19292117323102
ConvenienceSupermarketsTotal stores
Space by store size (lsquo000 sq ft)
Argos and Habitat store numbers
1 5 Habitat stores 11 Habitat stores in Sainsburys
4
APPENDIX Interim Results 201920 - November 2019
ClosureBitterne West
Sainsburyrsquos investment programme201920
Q1
Supermarkets ConvenienceNew storesMilton Keynes Brooklands District CentBromley High StLeeds Wike Ridge LaneSalford Harbour CityCanterbury High St
ReplacementMayfair Stratton St
ClosuresMayfairWarren St
Q1Q1Q1Q2Q2
Q2
Q1Q2
5
APPENDIX Interim Results 201920 - November 2019
Retail margin
Retail sales (inc VAT inc fuel)(exc VAT inc fuel)
Retail underlying EBITDAR1
Retail underlying EBITDAR margin 2
at constant fuel pricesRetail underlying operating profit3
Retail underlying operating margin 4
at constant fuel prices
1656714808
10677272
4373030
1661214856
11147575
4873333
030342
30 bps28 bps10333 bps32 bps
1 Retail underlying operating profit before net rental income of pound6 million and underlying depreciation and amortisation of pound636 million2 Retail underlying EBITDAR divided by underlying retail sales excluding VAT3 Retail underlying earnings before interest tax and Sainsburyrsquos underlying share of post-tax profit from joint ventures4 Retail underlying operating profit divided by underlying retail sales excluding VAT
poundm H1201920
H1201819
Change
6
APPENDIX Interim Results 201920 - November 2019
H1201920
H1201819
Group retail
Return on capital employed 1
Net debt to EBITDAR (times)23
Fixed charge cover (times)2
Underlying tax rate Core retail capex sales5
713126
26515
743326
25715
poundm
1 ROCE Return is defined as a 52 week rolling underlying profit before interest and tax Capital employed is defined as group net assets2 Net debt of pound6778 million includes lease obligations under IFRS 16 and perpetual securities treated as debt divided by Group underlying EBITDAR of pound2171 million calculated for a 52-week period to 21 September 20193 Group underlying EBITDAR divided by rent (both capital and interest) and net finance costs where interest on perpetual securities is treated as an underlying finance costs4 52 weeks to 22nd September 2018 is not available due to the implementation of IFRS 16 Comparatives therefore reflect the 52 weeks to 9th March 20195 Includes retail sales inc vat inc fuel
4
4
7
APPENDIX Interim Results 201920 - November 2019
Plc Board
Kevin OrsquoByrneChief Financial Officer
Mike Coupe Group Chief Executive
Dame Susan Rice Senior Independent Director
Matt BrittinNon-Executive Director
Jo HarlowNon-Executive Director
Brian CassinNon-Executive Director
David KeensNon-Executive Director
Jean Tomlin Non-Executive Director
Martin Scicluna Chairman
8
APPENDIX Interim Results 201920 - November 2019
Plc Board
Mike Coupe Group Chief Executive Officer
Skills and experienceAppointed Group Chief Executive Officer on 9 July 2014 Mike has been a member of the Operating Board since October 2004 Mike has vast retail industry experience in trading strategy marketing digital and online as well as multi-site store experience He joined Sainsburyrsquos from Big Food Group where he was a board director of Big Food Group PLC and Managing Director of Iceland Food Stores He previously worked for both Asda and Tesco PLC where he served in a variety of senior management roles
Date of appointment 1 August 2007Mike has served as an Executive Director since 1 August 2007 and as Chief Executive Officer since 9 July 2014
Committee membershipCorporate Responsibility and Sustainability Committee
Kevin OrsquoByrne Chief Financial Officer
Skills and experienceKevin brings to the Board a wealth of retail and finance experience Kevin was previously Chief Executive Officer of Poundland Group Limited until December 2016 and held executive roles at Kingfisher plc from 2008 to 2015 including Divisional Director UK China and Turkey Chief Executive Officer of BampQ UK amp Ireland and Group Finance Director He was previously Group Finance Director of Dixons Retail plc and European Finance Director of Quaker Oats He was a Non-Executive Director of Land Securities Group PLC from 2008 to September 2017 where he was Chairman of the Audit Committee and Senior Independent Director
Date of appointment 9 January 2017
Other current rolesNon-Executive Director of Greene King plc
Skills and experienceMartin brings a breadth of experience and leadership in both executive and non-executive roles His previous roles include positions as the Chairman of Great Portland Estates plc Senior Independent Director and Chair of the Audit Committee of Worldpay Inc and Non-Executive Director and Chair of the Audit Committee of Lloyds Banking Group plc He was a partner at Deloitte LLP for 26 years serving as Chairman from 1995 to 2007 where his clients included Dixons WH Smith Alliance Unichem and Cadburyrsquos
Other current rolesChairman of RSA Insurance Group plc
Martin Scicluna Chairman
Date of appointment 1 November 2018 Martin joined the Board as Chairman Designate and Non-Executive Director on 1 November 2018 He was appointed as Chairman of the Board on 10 March 2019
Committee membershipChair of the Nomination Committee
Dame Susan Rice Senior Independent Director
Skills and experienceSusan has extensive experience as a Non-Executive Director as well as in retail banking financial services leadership and sustainability Her career in retail bankingis particularly relevant to our ownership ofSainsburyrsquos Bank Previously Susan was a member of the First Ministerrsquos Council of Economic Advisors Managing Director of Lloyds Banking Group Scotland and was previously Chief Executive and then Chairman of Lloyds TSB Scotland plc She has also held a range of other non-executive directorships including at the Bank of England and SSE plc
Committee membershipChair of the Remuneration Committee and a member of the Nomination Committee
Date of appointment 1 June 2013
Other current rolesChair of Scottish Water and Business Stream Chair of the Scottish Fiscal Commission Non-Executive Director of the North American Income Trust C Hoare and Co and Senior Independent Director of the North American Income Trust
9
Other current rolesNon-Executive Director and Chairman of the Audit Committee of Centrica plc
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jean Tomlin Non-Executive Director
Skills and experienceJean has extensive experience and breadth of skills in human resources and corporate responsibility Jean was formerly Director of HR Workforce and Accreditation for The London OrganisingCommittee of the Olympic and Paralympic Games where she set the strategic direction to ensure the mobilisation of the combined 200000-strong workforce including paid staff volunteers and contractors which represented the recruitment and mobilisation of the largest peacetime workforce and set the industry standard for volunteering with the highly acclaimed Games She was previously Group HR Director at Marks and Spencer Group Plc HR Director and founder member of Egg plc and Sales amp Operations Director of Prudential Direct
Date of appointment 1 January 2013
Committee membershipAudit Committee Corporate Responsibility and Sustainability Committee and Nomination Committee
David Keens Non-Executive Director
Skills and experienceDavid has extensive retail experience and knowledge of consumer facing businesses together with his core skills in finance David was formerly Group Finance Director of next plc from 1991 to 2015 and their Group Treasurer from 1986 to 1991 Previous management experience includes nine years in the UK and overseas operations of multinational food manufacturer Nabisco and prior to that seven years in the accountancy profession
Date of appointment 29 April 2015
Committee membershipChair of the Audit Committee and a member of the Nomination Committee
Other current rolesIndependent Board member of Capri Holdings Limited Non-Executive Director of Hakluyt and Chief Executive Officer of Chanzo Limited
Other current rolesNon-Executive Director Senior Independent Director and Chair of the Audit Committee of Auto Trader Group plc
Matt BrittinNon-Executive Director
Skills and experienceMatt has extensive experience of running a high profile fast moving innovative digital business Since 2015 he has been responsible for Googlersquos business and operations in Europe the Middle East and Africa and hersquos been in leadership roles at Google since 2007 Prior to that Matt spent much of his career in media and marketing with particular interests in strategy commercial development and sales performance This included commercial and digital leadership roles in UK media
Date of appointment 27 January 2011
Committee membershipNomination Committee and Remuneration Committee
Other current rolesGooglersquos President ndash Europe Middle East and Africa and Director of The Media Trust
Brian Cassin Non-Executive Director
Skills and experienceBrian brings present day experience of running a FTSE40 group and of big data and analytics ndash topics of key importance to Sainsburyrsquos Brian joined Experian plc as Chief Financial Officer in April 2012 a post he held until his appointment as Chief Executive Officer in July 2014 Prior to this Brian spent his career in investment banking at Greenhill amp Co where he was Managing Director and Partner Brian has also held various roles at Baring Brothers International and at the London Stock Exchange
Date of appointment 1 April 2016
Committee membershipAudit Committee and Nomination Committee
Other current rolesChief Executive Officer of Experian plc
10
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jo Harlow Non-Executive Director
Skills and experienceJo brings a wealth of experience in consumer-facing businesses and in the telecoms and technology industry bothin the UK and internationally Jo spent 12 years in a variety of senior management roles with Nokia and Microsoft Prior to this she spent eight years at PampG and 11 years at Reebok in senior sales and marketing positions in both Europe and the US
Date of appointment 11 September 2017
Committee membershipChair of the Corporate Responsibility and Sustainability Committee and member of the Nomination Committee and Remuneration Committee
Life PresidentLord Sainsbury of Preston Candover KG
Other current rolesNon-Executive Director of InterContinental Hotels plc Non-Executive Director of Halmaplc and Member of the Supervisory Board of Ceconomy AG
11
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief Executive
Tim FallowfieldCompany Secretary amp Corporate Services Director
Kevin OrsquoByrne Chief Financial Officer
Jim BrownChief Executive Officer of Sainsburyrsquos Bank
Paul Mills-HicksFood Commercial Director
Angie RisleyGroup HR Director
Phil JordanGroup Chief InformationOfficer
Simon RobertsRetail and Operations Director
Clo MoriartyGroup Chief Digital Officer
12
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief ExecutiveSee Appendix page 9
Kevin OrsquoByrneChief Financial OfficerSee Appendix page 9
Tim FallowfieldCompany Secretary amp Corporate Services Director
Date of appointment September 2004
Skills and experienceTim joined Sainsburyrsquos in 2001 as Company Secretary and joined the Operating Board in September 2004 In addition to his role as Company Secretary Tim is responsible for the Corporate Services Division comprising Legal Services Data Governance Safety Shareholder Services Insurance and Central Security He chairs the Group Safety Committee and the Data Governance Committee Tim joined Sainsburyrsquos from Exelplc the global logistics company now part of DHL where he was Company Secretary and General Counsel He began his career at the international law firm Clifford Chance and is a qualified solicitor Tim is Chairman of the Disability Confident Business Leaders Group which works with Government in shaping the disability employment agenda and in raising awareness of the benefits of employing disabled people
Jim BrownCEO of Sainsburyrsquos Bank
Skills and experienceJim joined Sainsburyrsquos Bank as CEO in June 2019 and is also a member of the Sainsburyrsquos Group Operating Board He has held a number of senior international Financial Services roles - most recently for RBS in the UK as CEO of Williams and Glyn and prior to that CEO of Ulster Bank in Northern Ireland and the Republic of Ireland Before moving to Ireland he was based in Hong Kong and was CEO Retail and Commercial Banking Asia and the Middle East for RBS and ABN AMRO He has also been a member of the RBS Group Management Committee ABN AMRO Executive Group ABN AMRO Global Consumer Leadership Team and the RBSBank of China Joint Steering Committee Earlier in his career he held a number of senior executive roles for Citibank in Asia and Australia and New Zealand Jim has also held various Board positions including at Ulster Bank Saudi Hollandi Bank The Royal Bank of Scotland (China) Co Ltd and RBS (Pakistan) Ltd He is also a past President of the Institute of Banking in Ireland He is currently a Certified Bank Director
Date of appointment August 2019
Paul Mills-HicksFood Commercial Director
Skills and experiencePaul joined the Operating Board in May 2014 as Food Commercial Director having spent over ten years at Sainsburyrsquos He was closely involved in the formation and execution of the lsquoMaking Sainsburyrsquos Great Againrsquo strategy Following this he held a variety of roles in commercial strategy and finance most recently as Business Unit Director for Grocery Prior to Sainsburyrsquos Paul was European Controller at Marks and Spencer Group PLC and a Director at UBS Warburg
Date of appointment May 2014
13
APPENDIX Interim Results 201920 - November 2019
Operating Board
Angie RisleyGroup HR Director
Skills and experienceAngie was appointed Group HR Director and a member of the Operating Board in January 2013 with responsibility for human resources Angie is also a Director of Sainsburyrsquos Bank plc Angie was most recently Non-Executive Director and Chairman of the Remuneration Committee of Serco plc and prior to this was Group HR Director of Lloyds Banking Group and an Executive Director of Whitbread PLC with responsibility for HR and Corporate Social Responsibility Angie is currently Non-Executive Director and Chair of the Remuneration Committee at Smith amp Nephew plc
Date of appointment January 2013
Phil JordanGroup Chief Information Officer
Skills and experiencePhil joined the Board in January 2018 and has brought a fresh globalperspective on technology to the Operating Board in addition to a wealth of experience in digital data and business transformation Prior to joining Sainsburyrsquos Phil had a long and successful track record in telecommunications Most recently he was Global Chief Information Officer at Telefonica overseeing Digital Transformation and Information Technology and prior to that was Chief Information Officer for Vodafone UKIreland Phil has worked as a Non-Executive Advisor on Technology in the Investment amp Retail Banking sector and is currently a Non-Executive Director of TalkTalk Telecom Group PLC and chairs its Cyber-Security Committee
Date of appointment January 2018
Simon RobertsRetail and Operations Director
Skills and experienceSimon joined Sainsburyrsquos and the Operating Board in July 2017 as Central Retail amp Operations Director responsible for Stores Central operation and Logistics In his previous role he was Executive Vice President of Walgreens Boots Alliance and President of Boots with responsibility for commercial and retail operations across the UK and Ireland Prior to Boots Simon was at Marks and Spencer Group PLC where he held operational and customer leadership roles across stores divisions and central operations Simon is also the Non-Executive Chairman at the Institute ofCustomer Service
Date of appointment July 2017
Clodagh MoriartyGroup Chief Digital Officer
Skills and experienceClodagh was appointed Group Chief Digital Officer in June 2018 Clodagh leads the delivery of a consistent and first-rate digital experience for customers across Sainsburyrsquos Argos and Sainsburyrsquos BankClodagh joined Sainsburyrsquos in 2010 from Bain amp Co management consultants where she had gained experience working on a broad range of projects across multiple sectors and countries Following two years as Head of Strategy at Sainsburyrsquosshe moved into Food Commercial as Category Manager for Meal Solutions and then became Head of Online Trading spanning Food General Merchandise and Clothing before being promoted to Director of Online in 2016 In this role Clodagh was instrumental in driving innovation within Groceries Online and launching new initiatives including SmartShop and Chop Chop
Date of appointment June 2018
14
APPENDIX Interim Results 201920 - November 2019
Supplementary financial details
3 Financial calendarQ3 trading statement(15 weeks to 4 January 2020)
Preliminary results(52 weeks to 7 March 2020)
8 January 2020
30 April 2020
1 Weighted average number of shares
The interim dividend datesOrdinary shares
Ex-dividend 14 November 2019Record 15 November 2019Payment 20 December 2019
More distinctive rangemore reason to shop at Sainsburyrsquos
Reduced SKU count -20operational efficiencies
Higher cash gross profit +2 YOY
Volumes +8 operational efficiencies
41 Interim Results 201920 - November 2019
Drive efficiency
to invest in the customer
offer
4
BAU savings to offset cost inflation
Manages inflationary pressures
BAU savingsH1 201920
Procurement GNFR
Retail Technology Efficiencies
Retail HRRetail
management structures
Shrink Reduction
42 Interim Results 201920 - November 2019
Drive efficiency
to invest in the customer
offer
4
Strategic cost transformation 5 year plan
Converge Tackle fixed cost
End to end reviews
Retail Operations Marketing and Commercial Operations
Other central support
Logistics and Supply Chain
Project A
Project C
Project D
Shared Services BPO
Property strategy
Project BGNFR procurement
Capital prioritisation
Technology Digital and Corporate Services
pound250-pound350m
pound150-pound250m
pound400-pound600mExecution underway In planning Opportunities identified
pound5bn addressable cost base
43 Interim Results 201920 - November 2019
Grow connected
services
5
44 Interim Results 201920 - November 2019
Grow connected
services
5
Financial Services Priorities
To be the provider of financial services for loyal Sainsburyrsquos and Argos customers
An agile capital and cost efficient provider of simple mobile-led financial services
Vision
Objective
Priorities Reshape Simplify Strengthen
45 Interim Results 201920 - November 2019
Grow connected
services
5
Current Customer Base
Customer Credit Risk Balance Sheet Earnings
Argos Storecards 22m Prime Near Prime
Credit Cards 09m Prime
Personal Loans 05m Prime
Mortgages 9K Exit
Total Lending
Deposits 03m
Insurances 05m Very Low Risk
Travel Money 266 Sites
ATMs 1890
Financial Services reshaping the portfolio
46 Interim Results 201920 - November 2019
Grow connected
services
5
Increase connectivity and value for Group
Stop mortgage acquisition review back book options
No capital input from the Group from now1
Costincome c503 within 5 years
Double UPBT double digit ROCE within 5 years
Upstream cash within 5 years2
Financial Services key targets
Transform the cost base
Improve returns
Financial services cash generative
Reduce risk profile to Group
Stop putting cash in to Financial Services
2
4
6
3
1
5
Focus on Sainsburyrsquos customer base
1 Subject to regulatory changes requirements2 Subject to regulatory approval3 On a Group contribution basis
47 Interim Results 201920 - November 2019
Grow connected
services
5
Nectar
bull Biggest loyalty programme in the UK
bull Over 18 million collectors
bull Most recognised loyalty brand in the UK
bull Launch of Nectar digital- 21 million app users- Increase in overall Nectar participation- Increased levels of personalisation- 138000 new Nectar customers- 1 app on launch weekend
bull Coalition strengthened with addition of Esso in June 2019
48 Interim Results 201920 - November 2019
Provide a seamless customer
experience
6
49 Interim Results 201920 - November 2019
Provide a seamless customer
experience
6
Digital
bull Groceries Online sales penetration of 8- App accounts for over 20 of orders
bull 21 million digital Nectar app users
bull 14 million Argos Financial Services app downloads
bull Smartshop rollout in over 350 stores
Groceries online
Chop Chop
SmartShop
Universaldiscovery
Seamlessfinancialservices
Singlebasket
50 Interim Results 201920 - November 2019
We will help our customers live well for less
Confident in the core Integrated customer offer
One multi brand multi channel business
Strong cash generation supporting investment dividend and allowing deleverage
Financial flexibility and resilience
Sustainable cost reduction covering cost inflation and funding investment in our competitive offer
QampA
APPENDIX Interim Results 201920 - November 2019
Appendices
APPENDIX Interim Results 201920 - November 2019
Guidance for 201920
1
Spacebull Expect to open 2 new Sainsburyrsquos supermarkets and up to 15 convenience storesbull Expect to open around 25 Argos stores in Sainsburyrsquos (of which 11 are
relocations) resulting in around 305 Argos stores in supermarketsbull Expect to close 2 supermarkets around 25 convenience stores and around 20
Argos stores in FY201920 as part of announced property closure programme of 10-15 supermarkets 30-40 convenience stores and 60-70 Argos stores
Financial Servicesbull Financial services underlying operating profit expected to be cpound45m including a
cpound10m benefit as a result of a change in transfer pricing between Argos and Argos Financial Services
bull Financial Services non-underlying costs are expected to be around pound30mbull No further capital injections into the Bank are expected following pound35m in H1 201920
Depreciation and amortisationbull Expect underlying retail depreciation and amortisation of around pound12bn
including cpound500m right of use asset depreciation
CostsOperating cost inflationbull Cost inflation between 2 and 3Cost savingsbull Continue to deliver cost savings to at least offset the impact of cost inflation
Finance costsbull Net finance costs of around pound405m including pound320m lease interest in
201920 following the introduction of IFRS 16
One-off itemsbull In 201920 cash outflows as a result of items excluded from
underlying results should not exceed pound100mbull Property strategy programme one-off costs expected to be
pound230m-pound270m of which cash costs are pound30-40m
Dividendbull Sainsburyrsquos plans to change the full year dividend policy to 19x cover by
underlying earnings (versus 20x previously) to offset the dilutive (non cash) impact of IFRS 16 on underlying earnings
Capital expenditurebull Retail capital expenditure to be around pound550mbull Retail capital expenditure is expected to be around pound550m-pound600m per
annum over the medium term
Net debtbull Net debt before fair value movements on derivatives to reduce by at
least pound300m
Tax ratebull Underlying tax rate to be between 25 and 26
APPENDIX Interim Results 201920 - November 2019
Retail sales
1 Sales including VAT excluding fuel
LFL sales growth1
(10)
Sales from net new space1
04
Total sales growth1
(06)
Supermarkets2
(07)
Convenience20
Groceries Online
70
Channels
(01)(25)
(12)
2 Supermarket sales include Argos SiS sales FY 1819 16
pound139bn
pound103bnGrocery
pound30bnGeneralMerchandise
pound488mClothing
2
Chart1
201819
194
66
1
Sheet1
APPENDIX Interim Results 201920 - November 2019
Sainsburyrsquos sales area and store numbersAs at 21 September 2019
Sainsburyrsquos store estateAs at 21 September 2019
Sq ftsales area
82446
870
40001 to60000
20001 to40000
10000 to20000
Under10000 Total
Over60000
0122122
0197197
0175175
06767
824607
1431
Argos storesArgos in SainsburyrsquosArgos in HomebaseOtherArgos total store numbers
Habitat1
Collection points
594281
8-
883
16317
As at21 Sept 2019
Disposalsclosures
Newstores
As at9 March 2019
17--8
-1
(7)-
(2)-
(9)
-(36)
588288
6-
88216
282
ConvenienceSupermarketsTotal stores
Number of stores
Sq ftsales area
1929350
2279
40001 to60000
20001 to40000
10000 to20000
Under10000 Total
Over60000
-18441844
-58185818
-85018501
-46604660
19292117323102
ConvenienceSupermarketsTotal stores
Space by store size (lsquo000 sq ft)
Argos and Habitat store numbers
1 5 Habitat stores 11 Habitat stores in Sainsburys
4
APPENDIX Interim Results 201920 - November 2019
ClosureBitterne West
Sainsburyrsquos investment programme201920
Q1
Supermarkets ConvenienceNew storesMilton Keynes Brooklands District CentBromley High StLeeds Wike Ridge LaneSalford Harbour CityCanterbury High St
ReplacementMayfair Stratton St
ClosuresMayfairWarren St
Q1Q1Q1Q2Q2
Q2
Q1Q2
5
APPENDIX Interim Results 201920 - November 2019
Retail margin
Retail sales (inc VAT inc fuel)(exc VAT inc fuel)
Retail underlying EBITDAR1
Retail underlying EBITDAR margin 2
at constant fuel pricesRetail underlying operating profit3
Retail underlying operating margin 4
at constant fuel prices
1656714808
10677272
4373030
1661214856
11147575
4873333
030342
30 bps28 bps10333 bps32 bps
1 Retail underlying operating profit before net rental income of pound6 million and underlying depreciation and amortisation of pound636 million2 Retail underlying EBITDAR divided by underlying retail sales excluding VAT3 Retail underlying earnings before interest tax and Sainsburyrsquos underlying share of post-tax profit from joint ventures4 Retail underlying operating profit divided by underlying retail sales excluding VAT
poundm H1201920
H1201819
Change
6
APPENDIX Interim Results 201920 - November 2019
H1201920
H1201819
Group retail
Return on capital employed 1
Net debt to EBITDAR (times)23
Fixed charge cover (times)2
Underlying tax rate Core retail capex sales5
713126
26515
743326
25715
poundm
1 ROCE Return is defined as a 52 week rolling underlying profit before interest and tax Capital employed is defined as group net assets2 Net debt of pound6778 million includes lease obligations under IFRS 16 and perpetual securities treated as debt divided by Group underlying EBITDAR of pound2171 million calculated for a 52-week period to 21 September 20193 Group underlying EBITDAR divided by rent (both capital and interest) and net finance costs where interest on perpetual securities is treated as an underlying finance costs4 52 weeks to 22nd September 2018 is not available due to the implementation of IFRS 16 Comparatives therefore reflect the 52 weeks to 9th March 20195 Includes retail sales inc vat inc fuel
4
4
7
APPENDIX Interim Results 201920 - November 2019
Plc Board
Kevin OrsquoByrneChief Financial Officer
Mike Coupe Group Chief Executive
Dame Susan Rice Senior Independent Director
Matt BrittinNon-Executive Director
Jo HarlowNon-Executive Director
Brian CassinNon-Executive Director
David KeensNon-Executive Director
Jean Tomlin Non-Executive Director
Martin Scicluna Chairman
8
APPENDIX Interim Results 201920 - November 2019
Plc Board
Mike Coupe Group Chief Executive Officer
Skills and experienceAppointed Group Chief Executive Officer on 9 July 2014 Mike has been a member of the Operating Board since October 2004 Mike has vast retail industry experience in trading strategy marketing digital and online as well as multi-site store experience He joined Sainsburyrsquos from Big Food Group where he was a board director of Big Food Group PLC and Managing Director of Iceland Food Stores He previously worked for both Asda and Tesco PLC where he served in a variety of senior management roles
Date of appointment 1 August 2007Mike has served as an Executive Director since 1 August 2007 and as Chief Executive Officer since 9 July 2014
Committee membershipCorporate Responsibility and Sustainability Committee
Kevin OrsquoByrne Chief Financial Officer
Skills and experienceKevin brings to the Board a wealth of retail and finance experience Kevin was previously Chief Executive Officer of Poundland Group Limited until December 2016 and held executive roles at Kingfisher plc from 2008 to 2015 including Divisional Director UK China and Turkey Chief Executive Officer of BampQ UK amp Ireland and Group Finance Director He was previously Group Finance Director of Dixons Retail plc and European Finance Director of Quaker Oats He was a Non-Executive Director of Land Securities Group PLC from 2008 to September 2017 where he was Chairman of the Audit Committee and Senior Independent Director
Date of appointment 9 January 2017
Other current rolesNon-Executive Director of Greene King plc
Skills and experienceMartin brings a breadth of experience and leadership in both executive and non-executive roles His previous roles include positions as the Chairman of Great Portland Estates plc Senior Independent Director and Chair of the Audit Committee of Worldpay Inc and Non-Executive Director and Chair of the Audit Committee of Lloyds Banking Group plc He was a partner at Deloitte LLP for 26 years serving as Chairman from 1995 to 2007 where his clients included Dixons WH Smith Alliance Unichem and Cadburyrsquos
Other current rolesChairman of RSA Insurance Group plc
Martin Scicluna Chairman
Date of appointment 1 November 2018 Martin joined the Board as Chairman Designate and Non-Executive Director on 1 November 2018 He was appointed as Chairman of the Board on 10 March 2019
Committee membershipChair of the Nomination Committee
Dame Susan Rice Senior Independent Director
Skills and experienceSusan has extensive experience as a Non-Executive Director as well as in retail banking financial services leadership and sustainability Her career in retail bankingis particularly relevant to our ownership ofSainsburyrsquos Bank Previously Susan was a member of the First Ministerrsquos Council of Economic Advisors Managing Director of Lloyds Banking Group Scotland and was previously Chief Executive and then Chairman of Lloyds TSB Scotland plc She has also held a range of other non-executive directorships including at the Bank of England and SSE plc
Committee membershipChair of the Remuneration Committee and a member of the Nomination Committee
Date of appointment 1 June 2013
Other current rolesChair of Scottish Water and Business Stream Chair of the Scottish Fiscal Commission Non-Executive Director of the North American Income Trust C Hoare and Co and Senior Independent Director of the North American Income Trust
9
Other current rolesNon-Executive Director and Chairman of the Audit Committee of Centrica plc
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jean Tomlin Non-Executive Director
Skills and experienceJean has extensive experience and breadth of skills in human resources and corporate responsibility Jean was formerly Director of HR Workforce and Accreditation for The London OrganisingCommittee of the Olympic and Paralympic Games where she set the strategic direction to ensure the mobilisation of the combined 200000-strong workforce including paid staff volunteers and contractors which represented the recruitment and mobilisation of the largest peacetime workforce and set the industry standard for volunteering with the highly acclaimed Games She was previously Group HR Director at Marks and Spencer Group Plc HR Director and founder member of Egg plc and Sales amp Operations Director of Prudential Direct
Date of appointment 1 January 2013
Committee membershipAudit Committee Corporate Responsibility and Sustainability Committee and Nomination Committee
David Keens Non-Executive Director
Skills and experienceDavid has extensive retail experience and knowledge of consumer facing businesses together with his core skills in finance David was formerly Group Finance Director of next plc from 1991 to 2015 and their Group Treasurer from 1986 to 1991 Previous management experience includes nine years in the UK and overseas operations of multinational food manufacturer Nabisco and prior to that seven years in the accountancy profession
Date of appointment 29 April 2015
Committee membershipChair of the Audit Committee and a member of the Nomination Committee
Other current rolesIndependent Board member of Capri Holdings Limited Non-Executive Director of Hakluyt and Chief Executive Officer of Chanzo Limited
Other current rolesNon-Executive Director Senior Independent Director and Chair of the Audit Committee of Auto Trader Group plc
Matt BrittinNon-Executive Director
Skills and experienceMatt has extensive experience of running a high profile fast moving innovative digital business Since 2015 he has been responsible for Googlersquos business and operations in Europe the Middle East and Africa and hersquos been in leadership roles at Google since 2007 Prior to that Matt spent much of his career in media and marketing with particular interests in strategy commercial development and sales performance This included commercial and digital leadership roles in UK media
Date of appointment 27 January 2011
Committee membershipNomination Committee and Remuneration Committee
Other current rolesGooglersquos President ndash Europe Middle East and Africa and Director of The Media Trust
Brian Cassin Non-Executive Director
Skills and experienceBrian brings present day experience of running a FTSE40 group and of big data and analytics ndash topics of key importance to Sainsburyrsquos Brian joined Experian plc as Chief Financial Officer in April 2012 a post he held until his appointment as Chief Executive Officer in July 2014 Prior to this Brian spent his career in investment banking at Greenhill amp Co where he was Managing Director and Partner Brian has also held various roles at Baring Brothers International and at the London Stock Exchange
Date of appointment 1 April 2016
Committee membershipAudit Committee and Nomination Committee
Other current rolesChief Executive Officer of Experian plc
10
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jo Harlow Non-Executive Director
Skills and experienceJo brings a wealth of experience in consumer-facing businesses and in the telecoms and technology industry bothin the UK and internationally Jo spent 12 years in a variety of senior management roles with Nokia and Microsoft Prior to this she spent eight years at PampG and 11 years at Reebok in senior sales and marketing positions in both Europe and the US
Date of appointment 11 September 2017
Committee membershipChair of the Corporate Responsibility and Sustainability Committee and member of the Nomination Committee and Remuneration Committee
Life PresidentLord Sainsbury of Preston Candover KG
Other current rolesNon-Executive Director of InterContinental Hotels plc Non-Executive Director of Halmaplc and Member of the Supervisory Board of Ceconomy AG
11
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief Executive
Tim FallowfieldCompany Secretary amp Corporate Services Director
Kevin OrsquoByrne Chief Financial Officer
Jim BrownChief Executive Officer of Sainsburyrsquos Bank
Paul Mills-HicksFood Commercial Director
Angie RisleyGroup HR Director
Phil JordanGroup Chief InformationOfficer
Simon RobertsRetail and Operations Director
Clo MoriartyGroup Chief Digital Officer
12
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief ExecutiveSee Appendix page 9
Kevin OrsquoByrneChief Financial OfficerSee Appendix page 9
Tim FallowfieldCompany Secretary amp Corporate Services Director
Date of appointment September 2004
Skills and experienceTim joined Sainsburyrsquos in 2001 as Company Secretary and joined the Operating Board in September 2004 In addition to his role as Company Secretary Tim is responsible for the Corporate Services Division comprising Legal Services Data Governance Safety Shareholder Services Insurance and Central Security He chairs the Group Safety Committee and the Data Governance Committee Tim joined Sainsburyrsquos from Exelplc the global logistics company now part of DHL where he was Company Secretary and General Counsel He began his career at the international law firm Clifford Chance and is a qualified solicitor Tim is Chairman of the Disability Confident Business Leaders Group which works with Government in shaping the disability employment agenda and in raising awareness of the benefits of employing disabled people
Jim BrownCEO of Sainsburyrsquos Bank
Skills and experienceJim joined Sainsburyrsquos Bank as CEO in June 2019 and is also a member of the Sainsburyrsquos Group Operating Board He has held a number of senior international Financial Services roles - most recently for RBS in the UK as CEO of Williams and Glyn and prior to that CEO of Ulster Bank in Northern Ireland and the Republic of Ireland Before moving to Ireland he was based in Hong Kong and was CEO Retail and Commercial Banking Asia and the Middle East for RBS and ABN AMRO He has also been a member of the RBS Group Management Committee ABN AMRO Executive Group ABN AMRO Global Consumer Leadership Team and the RBSBank of China Joint Steering Committee Earlier in his career he held a number of senior executive roles for Citibank in Asia and Australia and New Zealand Jim has also held various Board positions including at Ulster Bank Saudi Hollandi Bank The Royal Bank of Scotland (China) Co Ltd and RBS (Pakistan) Ltd He is also a past President of the Institute of Banking in Ireland He is currently a Certified Bank Director
Date of appointment August 2019
Paul Mills-HicksFood Commercial Director
Skills and experiencePaul joined the Operating Board in May 2014 as Food Commercial Director having spent over ten years at Sainsburyrsquos He was closely involved in the formation and execution of the lsquoMaking Sainsburyrsquos Great Againrsquo strategy Following this he held a variety of roles in commercial strategy and finance most recently as Business Unit Director for Grocery Prior to Sainsburyrsquos Paul was European Controller at Marks and Spencer Group PLC and a Director at UBS Warburg
Date of appointment May 2014
13
APPENDIX Interim Results 201920 - November 2019
Operating Board
Angie RisleyGroup HR Director
Skills and experienceAngie was appointed Group HR Director and a member of the Operating Board in January 2013 with responsibility for human resources Angie is also a Director of Sainsburyrsquos Bank plc Angie was most recently Non-Executive Director and Chairman of the Remuneration Committee of Serco plc and prior to this was Group HR Director of Lloyds Banking Group and an Executive Director of Whitbread PLC with responsibility for HR and Corporate Social Responsibility Angie is currently Non-Executive Director and Chair of the Remuneration Committee at Smith amp Nephew plc
Date of appointment January 2013
Phil JordanGroup Chief Information Officer
Skills and experiencePhil joined the Board in January 2018 and has brought a fresh globalperspective on technology to the Operating Board in addition to a wealth of experience in digital data and business transformation Prior to joining Sainsburyrsquos Phil had a long and successful track record in telecommunications Most recently he was Global Chief Information Officer at Telefonica overseeing Digital Transformation and Information Technology and prior to that was Chief Information Officer for Vodafone UKIreland Phil has worked as a Non-Executive Advisor on Technology in the Investment amp Retail Banking sector and is currently a Non-Executive Director of TalkTalk Telecom Group PLC and chairs its Cyber-Security Committee
Date of appointment January 2018
Simon RobertsRetail and Operations Director
Skills and experienceSimon joined Sainsburyrsquos and the Operating Board in July 2017 as Central Retail amp Operations Director responsible for Stores Central operation and Logistics In his previous role he was Executive Vice President of Walgreens Boots Alliance and President of Boots with responsibility for commercial and retail operations across the UK and Ireland Prior to Boots Simon was at Marks and Spencer Group PLC where he held operational and customer leadership roles across stores divisions and central operations Simon is also the Non-Executive Chairman at the Institute ofCustomer Service
Date of appointment July 2017
Clodagh MoriartyGroup Chief Digital Officer
Skills and experienceClodagh was appointed Group Chief Digital Officer in June 2018 Clodagh leads the delivery of a consistent and first-rate digital experience for customers across Sainsburyrsquos Argos and Sainsburyrsquos BankClodagh joined Sainsburyrsquos in 2010 from Bain amp Co management consultants where she had gained experience working on a broad range of projects across multiple sectors and countries Following two years as Head of Strategy at Sainsburyrsquosshe moved into Food Commercial as Category Manager for Meal Solutions and then became Head of Online Trading spanning Food General Merchandise and Clothing before being promoted to Director of Online in 2016 In this role Clodagh was instrumental in driving innovation within Groceries Online and launching new initiatives including SmartShop and Chop Chop
Date of appointment June 2018
14
APPENDIX Interim Results 201920 - November 2019
Supplementary financial details
3 Financial calendarQ3 trading statement(15 weeks to 4 January 2020)
Preliminary results(52 weeks to 7 March 2020)
8 January 2020
30 April 2020
1 Weighted average number of shares
The interim dividend datesOrdinary shares
Ex-dividend 14 November 2019Record 15 November 2019Payment 20 December 2019
More distinctive rangemore reason to shop at Sainsburyrsquos
Reduced SKU count -20operational efficiencies
Higher cash gross profit +2 YOY
Volumes +8 operational efficiencies
41 Interim Results 201920 - November 2019
Drive efficiency
to invest in the customer
offer
4
BAU savings to offset cost inflation
Manages inflationary pressures
BAU savingsH1 201920
Procurement GNFR
Retail Technology Efficiencies
Retail HRRetail
management structures
Shrink Reduction
42 Interim Results 201920 - November 2019
Drive efficiency
to invest in the customer
offer
4
Strategic cost transformation 5 year plan
Converge Tackle fixed cost
End to end reviews
Retail Operations Marketing and Commercial Operations
Other central support
Logistics and Supply Chain
Project A
Project C
Project D
Shared Services BPO
Property strategy
Project BGNFR procurement
Capital prioritisation
Technology Digital and Corporate Services
pound250-pound350m
pound150-pound250m
pound400-pound600mExecution underway In planning Opportunities identified
pound5bn addressable cost base
43 Interim Results 201920 - November 2019
Grow connected
services
5
44 Interim Results 201920 - November 2019
Grow connected
services
5
Financial Services Priorities
To be the provider of financial services for loyal Sainsburyrsquos and Argos customers
An agile capital and cost efficient provider of simple mobile-led financial services
Vision
Objective
Priorities Reshape Simplify Strengthen
45 Interim Results 201920 - November 2019
Grow connected
services
5
Current Customer Base
Customer Credit Risk Balance Sheet Earnings
Argos Storecards 22m Prime Near Prime
Credit Cards 09m Prime
Personal Loans 05m Prime
Mortgages 9K Exit
Total Lending
Deposits 03m
Insurances 05m Very Low Risk
Travel Money 266 Sites
ATMs 1890
Financial Services reshaping the portfolio
46 Interim Results 201920 - November 2019
Grow connected
services
5
Increase connectivity and value for Group
Stop mortgage acquisition review back book options
No capital input from the Group from now1
Costincome c503 within 5 years
Double UPBT double digit ROCE within 5 years
Upstream cash within 5 years2
Financial Services key targets
Transform the cost base
Improve returns
Financial services cash generative
Reduce risk profile to Group
Stop putting cash in to Financial Services
2
4
6
3
1
5
Focus on Sainsburyrsquos customer base
1 Subject to regulatory changes requirements2 Subject to regulatory approval3 On a Group contribution basis
47 Interim Results 201920 - November 2019
Grow connected
services
5
Nectar
bull Biggest loyalty programme in the UK
bull Over 18 million collectors
bull Most recognised loyalty brand in the UK
bull Launch of Nectar digital- 21 million app users- Increase in overall Nectar participation- Increased levels of personalisation- 138000 new Nectar customers- 1 app on launch weekend
bull Coalition strengthened with addition of Esso in June 2019
48 Interim Results 201920 - November 2019
Provide a seamless customer
experience
6
49 Interim Results 201920 - November 2019
Provide a seamless customer
experience
6
Digital
bull Groceries Online sales penetration of 8- App accounts for over 20 of orders
bull 21 million digital Nectar app users
bull 14 million Argos Financial Services app downloads
bull Smartshop rollout in over 350 stores
Groceries online
Chop Chop
SmartShop
Universaldiscovery
Seamlessfinancialservices
Singlebasket
50 Interim Results 201920 - November 2019
We will help our customers live well for less
Confident in the core Integrated customer offer
One multi brand multi channel business
Strong cash generation supporting investment dividend and allowing deleverage
Financial flexibility and resilience
Sustainable cost reduction covering cost inflation and funding investment in our competitive offer
QampA
APPENDIX Interim Results 201920 - November 2019
Appendices
APPENDIX Interim Results 201920 - November 2019
Guidance for 201920
1
Spacebull Expect to open 2 new Sainsburyrsquos supermarkets and up to 15 convenience storesbull Expect to open around 25 Argos stores in Sainsburyrsquos (of which 11 are
relocations) resulting in around 305 Argos stores in supermarketsbull Expect to close 2 supermarkets around 25 convenience stores and around 20
Argos stores in FY201920 as part of announced property closure programme of 10-15 supermarkets 30-40 convenience stores and 60-70 Argos stores
Financial Servicesbull Financial services underlying operating profit expected to be cpound45m including a
cpound10m benefit as a result of a change in transfer pricing between Argos and Argos Financial Services
bull Financial Services non-underlying costs are expected to be around pound30mbull No further capital injections into the Bank are expected following pound35m in H1 201920
Depreciation and amortisationbull Expect underlying retail depreciation and amortisation of around pound12bn
including cpound500m right of use asset depreciation
CostsOperating cost inflationbull Cost inflation between 2 and 3Cost savingsbull Continue to deliver cost savings to at least offset the impact of cost inflation
Finance costsbull Net finance costs of around pound405m including pound320m lease interest in
201920 following the introduction of IFRS 16
One-off itemsbull In 201920 cash outflows as a result of items excluded from
underlying results should not exceed pound100mbull Property strategy programme one-off costs expected to be
pound230m-pound270m of which cash costs are pound30-40m
Dividendbull Sainsburyrsquos plans to change the full year dividend policy to 19x cover by
underlying earnings (versus 20x previously) to offset the dilutive (non cash) impact of IFRS 16 on underlying earnings
Capital expenditurebull Retail capital expenditure to be around pound550mbull Retail capital expenditure is expected to be around pound550m-pound600m per
annum over the medium term
Net debtbull Net debt before fair value movements on derivatives to reduce by at
least pound300m
Tax ratebull Underlying tax rate to be between 25 and 26
APPENDIX Interim Results 201920 - November 2019
Retail sales
1 Sales including VAT excluding fuel
LFL sales growth1
(10)
Sales from net new space1
04
Total sales growth1
(06)
Supermarkets2
(07)
Convenience20
Groceries Online
70
Channels
(01)(25)
(12)
2 Supermarket sales include Argos SiS sales FY 1819 16
pound139bn
pound103bnGrocery
pound30bnGeneralMerchandise
pound488mClothing
2
Chart1
201819
194
66
1
Sheet1
APPENDIX Interim Results 201920 - November 2019
Sainsburyrsquos sales area and store numbersAs at 21 September 2019
Sainsburyrsquos store estateAs at 21 September 2019
Sq ftsales area
82446
870
40001 to60000
20001 to40000
10000 to20000
Under10000 Total
Over60000
0122122
0197197
0175175
06767
824607
1431
Argos storesArgos in SainsburyrsquosArgos in HomebaseOtherArgos total store numbers
Habitat1
Collection points
594281
8-
883
16317
As at21 Sept 2019
Disposalsclosures
Newstores
As at9 March 2019
17--8
-1
(7)-
(2)-
(9)
-(36)
588288
6-
88216
282
ConvenienceSupermarketsTotal stores
Number of stores
Sq ftsales area
1929350
2279
40001 to60000
20001 to40000
10000 to20000
Under10000 Total
Over60000
-18441844
-58185818
-85018501
-46604660
19292117323102
ConvenienceSupermarketsTotal stores
Space by store size (lsquo000 sq ft)
Argos and Habitat store numbers
1 5 Habitat stores 11 Habitat stores in Sainsburys
4
APPENDIX Interim Results 201920 - November 2019
ClosureBitterne West
Sainsburyrsquos investment programme201920
Q1
Supermarkets ConvenienceNew storesMilton Keynes Brooklands District CentBromley High StLeeds Wike Ridge LaneSalford Harbour CityCanterbury High St
ReplacementMayfair Stratton St
ClosuresMayfairWarren St
Q1Q1Q1Q2Q2
Q2
Q1Q2
5
APPENDIX Interim Results 201920 - November 2019
Retail margin
Retail sales (inc VAT inc fuel)(exc VAT inc fuel)
Retail underlying EBITDAR1
Retail underlying EBITDAR margin 2
at constant fuel pricesRetail underlying operating profit3
Retail underlying operating margin 4
at constant fuel prices
1656714808
10677272
4373030
1661214856
11147575
4873333
030342
30 bps28 bps10333 bps32 bps
1 Retail underlying operating profit before net rental income of pound6 million and underlying depreciation and amortisation of pound636 million2 Retail underlying EBITDAR divided by underlying retail sales excluding VAT3 Retail underlying earnings before interest tax and Sainsburyrsquos underlying share of post-tax profit from joint ventures4 Retail underlying operating profit divided by underlying retail sales excluding VAT
poundm H1201920
H1201819
Change
6
APPENDIX Interim Results 201920 - November 2019
H1201920
H1201819
Group retail
Return on capital employed 1
Net debt to EBITDAR (times)23
Fixed charge cover (times)2
Underlying tax rate Core retail capex sales5
713126
26515
743326
25715
poundm
1 ROCE Return is defined as a 52 week rolling underlying profit before interest and tax Capital employed is defined as group net assets2 Net debt of pound6778 million includes lease obligations under IFRS 16 and perpetual securities treated as debt divided by Group underlying EBITDAR of pound2171 million calculated for a 52-week period to 21 September 20193 Group underlying EBITDAR divided by rent (both capital and interest) and net finance costs where interest on perpetual securities is treated as an underlying finance costs4 52 weeks to 22nd September 2018 is not available due to the implementation of IFRS 16 Comparatives therefore reflect the 52 weeks to 9th March 20195 Includes retail sales inc vat inc fuel
4
4
7
APPENDIX Interim Results 201920 - November 2019
Plc Board
Kevin OrsquoByrneChief Financial Officer
Mike Coupe Group Chief Executive
Dame Susan Rice Senior Independent Director
Matt BrittinNon-Executive Director
Jo HarlowNon-Executive Director
Brian CassinNon-Executive Director
David KeensNon-Executive Director
Jean Tomlin Non-Executive Director
Martin Scicluna Chairman
8
APPENDIX Interim Results 201920 - November 2019
Plc Board
Mike Coupe Group Chief Executive Officer
Skills and experienceAppointed Group Chief Executive Officer on 9 July 2014 Mike has been a member of the Operating Board since October 2004 Mike has vast retail industry experience in trading strategy marketing digital and online as well as multi-site store experience He joined Sainsburyrsquos from Big Food Group where he was a board director of Big Food Group PLC and Managing Director of Iceland Food Stores He previously worked for both Asda and Tesco PLC where he served in a variety of senior management roles
Date of appointment 1 August 2007Mike has served as an Executive Director since 1 August 2007 and as Chief Executive Officer since 9 July 2014
Committee membershipCorporate Responsibility and Sustainability Committee
Kevin OrsquoByrne Chief Financial Officer
Skills and experienceKevin brings to the Board a wealth of retail and finance experience Kevin was previously Chief Executive Officer of Poundland Group Limited until December 2016 and held executive roles at Kingfisher plc from 2008 to 2015 including Divisional Director UK China and Turkey Chief Executive Officer of BampQ UK amp Ireland and Group Finance Director He was previously Group Finance Director of Dixons Retail plc and European Finance Director of Quaker Oats He was a Non-Executive Director of Land Securities Group PLC from 2008 to September 2017 where he was Chairman of the Audit Committee and Senior Independent Director
Date of appointment 9 January 2017
Other current rolesNon-Executive Director of Greene King plc
Skills and experienceMartin brings a breadth of experience and leadership in both executive and non-executive roles His previous roles include positions as the Chairman of Great Portland Estates plc Senior Independent Director and Chair of the Audit Committee of Worldpay Inc and Non-Executive Director and Chair of the Audit Committee of Lloyds Banking Group plc He was a partner at Deloitte LLP for 26 years serving as Chairman from 1995 to 2007 where his clients included Dixons WH Smith Alliance Unichem and Cadburyrsquos
Other current rolesChairman of RSA Insurance Group plc
Martin Scicluna Chairman
Date of appointment 1 November 2018 Martin joined the Board as Chairman Designate and Non-Executive Director on 1 November 2018 He was appointed as Chairman of the Board on 10 March 2019
Committee membershipChair of the Nomination Committee
Dame Susan Rice Senior Independent Director
Skills and experienceSusan has extensive experience as a Non-Executive Director as well as in retail banking financial services leadership and sustainability Her career in retail bankingis particularly relevant to our ownership ofSainsburyrsquos Bank Previously Susan was a member of the First Ministerrsquos Council of Economic Advisors Managing Director of Lloyds Banking Group Scotland and was previously Chief Executive and then Chairman of Lloyds TSB Scotland plc She has also held a range of other non-executive directorships including at the Bank of England and SSE plc
Committee membershipChair of the Remuneration Committee and a member of the Nomination Committee
Date of appointment 1 June 2013
Other current rolesChair of Scottish Water and Business Stream Chair of the Scottish Fiscal Commission Non-Executive Director of the North American Income Trust C Hoare and Co and Senior Independent Director of the North American Income Trust
9
Other current rolesNon-Executive Director and Chairman of the Audit Committee of Centrica plc
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jean Tomlin Non-Executive Director
Skills and experienceJean has extensive experience and breadth of skills in human resources and corporate responsibility Jean was formerly Director of HR Workforce and Accreditation for The London OrganisingCommittee of the Olympic and Paralympic Games where she set the strategic direction to ensure the mobilisation of the combined 200000-strong workforce including paid staff volunteers and contractors which represented the recruitment and mobilisation of the largest peacetime workforce and set the industry standard for volunteering with the highly acclaimed Games She was previously Group HR Director at Marks and Spencer Group Plc HR Director and founder member of Egg plc and Sales amp Operations Director of Prudential Direct
Date of appointment 1 January 2013
Committee membershipAudit Committee Corporate Responsibility and Sustainability Committee and Nomination Committee
David Keens Non-Executive Director
Skills and experienceDavid has extensive retail experience and knowledge of consumer facing businesses together with his core skills in finance David was formerly Group Finance Director of next plc from 1991 to 2015 and their Group Treasurer from 1986 to 1991 Previous management experience includes nine years in the UK and overseas operations of multinational food manufacturer Nabisco and prior to that seven years in the accountancy profession
Date of appointment 29 April 2015
Committee membershipChair of the Audit Committee and a member of the Nomination Committee
Other current rolesIndependent Board member of Capri Holdings Limited Non-Executive Director of Hakluyt and Chief Executive Officer of Chanzo Limited
Other current rolesNon-Executive Director Senior Independent Director and Chair of the Audit Committee of Auto Trader Group plc
Matt BrittinNon-Executive Director
Skills and experienceMatt has extensive experience of running a high profile fast moving innovative digital business Since 2015 he has been responsible for Googlersquos business and operations in Europe the Middle East and Africa and hersquos been in leadership roles at Google since 2007 Prior to that Matt spent much of his career in media and marketing with particular interests in strategy commercial development and sales performance This included commercial and digital leadership roles in UK media
Date of appointment 27 January 2011
Committee membershipNomination Committee and Remuneration Committee
Other current rolesGooglersquos President ndash Europe Middle East and Africa and Director of The Media Trust
Brian Cassin Non-Executive Director
Skills and experienceBrian brings present day experience of running a FTSE40 group and of big data and analytics ndash topics of key importance to Sainsburyrsquos Brian joined Experian plc as Chief Financial Officer in April 2012 a post he held until his appointment as Chief Executive Officer in July 2014 Prior to this Brian spent his career in investment banking at Greenhill amp Co where he was Managing Director and Partner Brian has also held various roles at Baring Brothers International and at the London Stock Exchange
Date of appointment 1 April 2016
Committee membershipAudit Committee and Nomination Committee
Other current rolesChief Executive Officer of Experian plc
10
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jo Harlow Non-Executive Director
Skills and experienceJo brings a wealth of experience in consumer-facing businesses and in the telecoms and technology industry bothin the UK and internationally Jo spent 12 years in a variety of senior management roles with Nokia and Microsoft Prior to this she spent eight years at PampG and 11 years at Reebok in senior sales and marketing positions in both Europe and the US
Date of appointment 11 September 2017
Committee membershipChair of the Corporate Responsibility and Sustainability Committee and member of the Nomination Committee and Remuneration Committee
Life PresidentLord Sainsbury of Preston Candover KG
Other current rolesNon-Executive Director of InterContinental Hotels plc Non-Executive Director of Halmaplc and Member of the Supervisory Board of Ceconomy AG
11
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief Executive
Tim FallowfieldCompany Secretary amp Corporate Services Director
Kevin OrsquoByrne Chief Financial Officer
Jim BrownChief Executive Officer of Sainsburyrsquos Bank
Paul Mills-HicksFood Commercial Director
Angie RisleyGroup HR Director
Phil JordanGroup Chief InformationOfficer
Simon RobertsRetail and Operations Director
Clo MoriartyGroup Chief Digital Officer
12
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief ExecutiveSee Appendix page 9
Kevin OrsquoByrneChief Financial OfficerSee Appendix page 9
Tim FallowfieldCompany Secretary amp Corporate Services Director
Date of appointment September 2004
Skills and experienceTim joined Sainsburyrsquos in 2001 as Company Secretary and joined the Operating Board in September 2004 In addition to his role as Company Secretary Tim is responsible for the Corporate Services Division comprising Legal Services Data Governance Safety Shareholder Services Insurance and Central Security He chairs the Group Safety Committee and the Data Governance Committee Tim joined Sainsburyrsquos from Exelplc the global logistics company now part of DHL where he was Company Secretary and General Counsel He began his career at the international law firm Clifford Chance and is a qualified solicitor Tim is Chairman of the Disability Confident Business Leaders Group which works with Government in shaping the disability employment agenda and in raising awareness of the benefits of employing disabled people
Jim BrownCEO of Sainsburyrsquos Bank
Skills and experienceJim joined Sainsburyrsquos Bank as CEO in June 2019 and is also a member of the Sainsburyrsquos Group Operating Board He has held a number of senior international Financial Services roles - most recently for RBS in the UK as CEO of Williams and Glyn and prior to that CEO of Ulster Bank in Northern Ireland and the Republic of Ireland Before moving to Ireland he was based in Hong Kong and was CEO Retail and Commercial Banking Asia and the Middle East for RBS and ABN AMRO He has also been a member of the RBS Group Management Committee ABN AMRO Executive Group ABN AMRO Global Consumer Leadership Team and the RBSBank of China Joint Steering Committee Earlier in his career he held a number of senior executive roles for Citibank in Asia and Australia and New Zealand Jim has also held various Board positions including at Ulster Bank Saudi Hollandi Bank The Royal Bank of Scotland (China) Co Ltd and RBS (Pakistan) Ltd He is also a past President of the Institute of Banking in Ireland He is currently a Certified Bank Director
Date of appointment August 2019
Paul Mills-HicksFood Commercial Director
Skills and experiencePaul joined the Operating Board in May 2014 as Food Commercial Director having spent over ten years at Sainsburyrsquos He was closely involved in the formation and execution of the lsquoMaking Sainsburyrsquos Great Againrsquo strategy Following this he held a variety of roles in commercial strategy and finance most recently as Business Unit Director for Grocery Prior to Sainsburyrsquos Paul was European Controller at Marks and Spencer Group PLC and a Director at UBS Warburg
Date of appointment May 2014
13
APPENDIX Interim Results 201920 - November 2019
Operating Board
Angie RisleyGroup HR Director
Skills and experienceAngie was appointed Group HR Director and a member of the Operating Board in January 2013 with responsibility for human resources Angie is also a Director of Sainsburyrsquos Bank plc Angie was most recently Non-Executive Director and Chairman of the Remuneration Committee of Serco plc and prior to this was Group HR Director of Lloyds Banking Group and an Executive Director of Whitbread PLC with responsibility for HR and Corporate Social Responsibility Angie is currently Non-Executive Director and Chair of the Remuneration Committee at Smith amp Nephew plc
Date of appointment January 2013
Phil JordanGroup Chief Information Officer
Skills and experiencePhil joined the Board in January 2018 and has brought a fresh globalperspective on technology to the Operating Board in addition to a wealth of experience in digital data and business transformation Prior to joining Sainsburyrsquos Phil had a long and successful track record in telecommunications Most recently he was Global Chief Information Officer at Telefonica overseeing Digital Transformation and Information Technology and prior to that was Chief Information Officer for Vodafone UKIreland Phil has worked as a Non-Executive Advisor on Technology in the Investment amp Retail Banking sector and is currently a Non-Executive Director of TalkTalk Telecom Group PLC and chairs its Cyber-Security Committee
Date of appointment January 2018
Simon RobertsRetail and Operations Director
Skills and experienceSimon joined Sainsburyrsquos and the Operating Board in July 2017 as Central Retail amp Operations Director responsible for Stores Central operation and Logistics In his previous role he was Executive Vice President of Walgreens Boots Alliance and President of Boots with responsibility for commercial and retail operations across the UK and Ireland Prior to Boots Simon was at Marks and Spencer Group PLC where he held operational and customer leadership roles across stores divisions and central operations Simon is also the Non-Executive Chairman at the Institute ofCustomer Service
Date of appointment July 2017
Clodagh MoriartyGroup Chief Digital Officer
Skills and experienceClodagh was appointed Group Chief Digital Officer in June 2018 Clodagh leads the delivery of a consistent and first-rate digital experience for customers across Sainsburyrsquos Argos and Sainsburyrsquos BankClodagh joined Sainsburyrsquos in 2010 from Bain amp Co management consultants where she had gained experience working on a broad range of projects across multiple sectors and countries Following two years as Head of Strategy at Sainsburyrsquosshe moved into Food Commercial as Category Manager for Meal Solutions and then became Head of Online Trading spanning Food General Merchandise and Clothing before being promoted to Director of Online in 2016 In this role Clodagh was instrumental in driving innovation within Groceries Online and launching new initiatives including SmartShop and Chop Chop
Date of appointment June 2018
14
APPENDIX Interim Results 201920 - November 2019
Supplementary financial details
3 Financial calendarQ3 trading statement(15 weeks to 4 January 2020)
Preliminary results(52 weeks to 7 March 2020)
8 January 2020
30 April 2020
1 Weighted average number of shares
The interim dividend datesOrdinary shares
Ex-dividend 14 November 2019Record 15 November 2019Payment 20 December 2019
More distinctive rangemore reason to shop at Sainsburyrsquos
Reduced SKU count -20operational efficiencies
Higher cash gross profit +2 YOY
Volumes +8 operational efficiencies
41 Interim Results 201920 - November 2019
Drive efficiency
to invest in the customer
offer
4
BAU savings to offset cost inflation
Manages inflationary pressures
BAU savingsH1 201920
Procurement GNFR
Retail Technology Efficiencies
Retail HRRetail
management structures
Shrink Reduction
42 Interim Results 201920 - November 2019
Drive efficiency
to invest in the customer
offer
4
Strategic cost transformation 5 year plan
Converge Tackle fixed cost
End to end reviews
Retail Operations Marketing and Commercial Operations
Other central support
Logistics and Supply Chain
Project A
Project C
Project D
Shared Services BPO
Property strategy
Project BGNFR procurement
Capital prioritisation
Technology Digital and Corporate Services
pound250-pound350m
pound150-pound250m
pound400-pound600mExecution underway In planning Opportunities identified
pound5bn addressable cost base
43 Interim Results 201920 - November 2019
Grow connected
services
5
44 Interim Results 201920 - November 2019
Grow connected
services
5
Financial Services Priorities
To be the provider of financial services for loyal Sainsburyrsquos and Argos customers
An agile capital and cost efficient provider of simple mobile-led financial services
Vision
Objective
Priorities Reshape Simplify Strengthen
45 Interim Results 201920 - November 2019
Grow connected
services
5
Current Customer Base
Customer Credit Risk Balance Sheet Earnings
Argos Storecards 22m Prime Near Prime
Credit Cards 09m Prime
Personal Loans 05m Prime
Mortgages 9K Exit
Total Lending
Deposits 03m
Insurances 05m Very Low Risk
Travel Money 266 Sites
ATMs 1890
Financial Services reshaping the portfolio
46 Interim Results 201920 - November 2019
Grow connected
services
5
Increase connectivity and value for Group
Stop mortgage acquisition review back book options
No capital input from the Group from now1
Costincome c503 within 5 years
Double UPBT double digit ROCE within 5 years
Upstream cash within 5 years2
Financial Services key targets
Transform the cost base
Improve returns
Financial services cash generative
Reduce risk profile to Group
Stop putting cash in to Financial Services
2
4
6
3
1
5
Focus on Sainsburyrsquos customer base
1 Subject to regulatory changes requirements2 Subject to regulatory approval3 On a Group contribution basis
47 Interim Results 201920 - November 2019
Grow connected
services
5
Nectar
bull Biggest loyalty programme in the UK
bull Over 18 million collectors
bull Most recognised loyalty brand in the UK
bull Launch of Nectar digital- 21 million app users- Increase in overall Nectar participation- Increased levels of personalisation- 138000 new Nectar customers- 1 app on launch weekend
bull Coalition strengthened with addition of Esso in June 2019
48 Interim Results 201920 - November 2019
Provide a seamless customer
experience
6
49 Interim Results 201920 - November 2019
Provide a seamless customer
experience
6
Digital
bull Groceries Online sales penetration of 8- App accounts for over 20 of orders
bull 21 million digital Nectar app users
bull 14 million Argos Financial Services app downloads
bull Smartshop rollout in over 350 stores
Groceries online
Chop Chop
SmartShop
Universaldiscovery
Seamlessfinancialservices
Singlebasket
50 Interim Results 201920 - November 2019
We will help our customers live well for less
Confident in the core Integrated customer offer
One multi brand multi channel business
Strong cash generation supporting investment dividend and allowing deleverage
Financial flexibility and resilience
Sustainable cost reduction covering cost inflation and funding investment in our competitive offer
QampA
APPENDIX Interim Results 201920 - November 2019
Appendices
APPENDIX Interim Results 201920 - November 2019
Guidance for 201920
1
Spacebull Expect to open 2 new Sainsburyrsquos supermarkets and up to 15 convenience storesbull Expect to open around 25 Argos stores in Sainsburyrsquos (of which 11 are
relocations) resulting in around 305 Argos stores in supermarketsbull Expect to close 2 supermarkets around 25 convenience stores and around 20
Argos stores in FY201920 as part of announced property closure programme of 10-15 supermarkets 30-40 convenience stores and 60-70 Argos stores
Financial Servicesbull Financial services underlying operating profit expected to be cpound45m including a
cpound10m benefit as a result of a change in transfer pricing between Argos and Argos Financial Services
bull Financial Services non-underlying costs are expected to be around pound30mbull No further capital injections into the Bank are expected following pound35m in H1 201920
Depreciation and amortisationbull Expect underlying retail depreciation and amortisation of around pound12bn
including cpound500m right of use asset depreciation
CostsOperating cost inflationbull Cost inflation between 2 and 3Cost savingsbull Continue to deliver cost savings to at least offset the impact of cost inflation
Finance costsbull Net finance costs of around pound405m including pound320m lease interest in
201920 following the introduction of IFRS 16
One-off itemsbull In 201920 cash outflows as a result of items excluded from
underlying results should not exceed pound100mbull Property strategy programme one-off costs expected to be
pound230m-pound270m of which cash costs are pound30-40m
Dividendbull Sainsburyrsquos plans to change the full year dividend policy to 19x cover by
underlying earnings (versus 20x previously) to offset the dilutive (non cash) impact of IFRS 16 on underlying earnings
Capital expenditurebull Retail capital expenditure to be around pound550mbull Retail capital expenditure is expected to be around pound550m-pound600m per
annum over the medium term
Net debtbull Net debt before fair value movements on derivatives to reduce by at
least pound300m
Tax ratebull Underlying tax rate to be between 25 and 26
APPENDIX Interim Results 201920 - November 2019
Retail sales
1 Sales including VAT excluding fuel
LFL sales growth1
(10)
Sales from net new space1
04
Total sales growth1
(06)
Supermarkets2
(07)
Convenience20
Groceries Online
70
Channels
(01)(25)
(12)
2 Supermarket sales include Argos SiS sales FY 1819 16
pound139bn
pound103bnGrocery
pound30bnGeneralMerchandise
pound488mClothing
2
Chart1
201819
194
66
1
Sheet1
APPENDIX Interim Results 201920 - November 2019
Sainsburyrsquos sales area and store numbersAs at 21 September 2019
Sainsburyrsquos store estateAs at 21 September 2019
Sq ftsales area
82446
870
40001 to60000
20001 to40000
10000 to20000
Under10000 Total
Over60000
0122122
0197197
0175175
06767
824607
1431
Argos storesArgos in SainsburyrsquosArgos in HomebaseOtherArgos total store numbers
Habitat1
Collection points
594281
8-
883
16317
As at21 Sept 2019
Disposalsclosures
Newstores
As at9 March 2019
17--8
-1
(7)-
(2)-
(9)
-(36)
588288
6-
88216
282
ConvenienceSupermarketsTotal stores
Number of stores
Sq ftsales area
1929350
2279
40001 to60000
20001 to40000
10000 to20000
Under10000 Total
Over60000
-18441844
-58185818
-85018501
-46604660
19292117323102
ConvenienceSupermarketsTotal stores
Space by store size (lsquo000 sq ft)
Argos and Habitat store numbers
1 5 Habitat stores 11 Habitat stores in Sainsburys
4
APPENDIX Interim Results 201920 - November 2019
ClosureBitterne West
Sainsburyrsquos investment programme201920
Q1
Supermarkets ConvenienceNew storesMilton Keynes Brooklands District CentBromley High StLeeds Wike Ridge LaneSalford Harbour CityCanterbury High St
ReplacementMayfair Stratton St
ClosuresMayfairWarren St
Q1Q1Q1Q2Q2
Q2
Q1Q2
5
APPENDIX Interim Results 201920 - November 2019
Retail margin
Retail sales (inc VAT inc fuel)(exc VAT inc fuel)
Retail underlying EBITDAR1
Retail underlying EBITDAR margin 2
at constant fuel pricesRetail underlying operating profit3
Retail underlying operating margin 4
at constant fuel prices
1656714808
10677272
4373030
1661214856
11147575
4873333
030342
30 bps28 bps10333 bps32 bps
1 Retail underlying operating profit before net rental income of pound6 million and underlying depreciation and amortisation of pound636 million2 Retail underlying EBITDAR divided by underlying retail sales excluding VAT3 Retail underlying earnings before interest tax and Sainsburyrsquos underlying share of post-tax profit from joint ventures4 Retail underlying operating profit divided by underlying retail sales excluding VAT
poundm H1201920
H1201819
Change
6
APPENDIX Interim Results 201920 - November 2019
H1201920
H1201819
Group retail
Return on capital employed 1
Net debt to EBITDAR (times)23
Fixed charge cover (times)2
Underlying tax rate Core retail capex sales5
713126
26515
743326
25715
poundm
1 ROCE Return is defined as a 52 week rolling underlying profit before interest and tax Capital employed is defined as group net assets2 Net debt of pound6778 million includes lease obligations under IFRS 16 and perpetual securities treated as debt divided by Group underlying EBITDAR of pound2171 million calculated for a 52-week period to 21 September 20193 Group underlying EBITDAR divided by rent (both capital and interest) and net finance costs where interest on perpetual securities is treated as an underlying finance costs4 52 weeks to 22nd September 2018 is not available due to the implementation of IFRS 16 Comparatives therefore reflect the 52 weeks to 9th March 20195 Includes retail sales inc vat inc fuel
4
4
7
APPENDIX Interim Results 201920 - November 2019
Plc Board
Kevin OrsquoByrneChief Financial Officer
Mike Coupe Group Chief Executive
Dame Susan Rice Senior Independent Director
Matt BrittinNon-Executive Director
Jo HarlowNon-Executive Director
Brian CassinNon-Executive Director
David KeensNon-Executive Director
Jean Tomlin Non-Executive Director
Martin Scicluna Chairman
8
APPENDIX Interim Results 201920 - November 2019
Plc Board
Mike Coupe Group Chief Executive Officer
Skills and experienceAppointed Group Chief Executive Officer on 9 July 2014 Mike has been a member of the Operating Board since October 2004 Mike has vast retail industry experience in trading strategy marketing digital and online as well as multi-site store experience He joined Sainsburyrsquos from Big Food Group where he was a board director of Big Food Group PLC and Managing Director of Iceland Food Stores He previously worked for both Asda and Tesco PLC where he served in a variety of senior management roles
Date of appointment 1 August 2007Mike has served as an Executive Director since 1 August 2007 and as Chief Executive Officer since 9 July 2014
Committee membershipCorporate Responsibility and Sustainability Committee
Kevin OrsquoByrne Chief Financial Officer
Skills and experienceKevin brings to the Board a wealth of retail and finance experience Kevin was previously Chief Executive Officer of Poundland Group Limited until December 2016 and held executive roles at Kingfisher plc from 2008 to 2015 including Divisional Director UK China and Turkey Chief Executive Officer of BampQ UK amp Ireland and Group Finance Director He was previously Group Finance Director of Dixons Retail plc and European Finance Director of Quaker Oats He was a Non-Executive Director of Land Securities Group PLC from 2008 to September 2017 where he was Chairman of the Audit Committee and Senior Independent Director
Date of appointment 9 January 2017
Other current rolesNon-Executive Director of Greene King plc
Skills and experienceMartin brings a breadth of experience and leadership in both executive and non-executive roles His previous roles include positions as the Chairman of Great Portland Estates plc Senior Independent Director and Chair of the Audit Committee of Worldpay Inc and Non-Executive Director and Chair of the Audit Committee of Lloyds Banking Group plc He was a partner at Deloitte LLP for 26 years serving as Chairman from 1995 to 2007 where his clients included Dixons WH Smith Alliance Unichem and Cadburyrsquos
Other current rolesChairman of RSA Insurance Group plc
Martin Scicluna Chairman
Date of appointment 1 November 2018 Martin joined the Board as Chairman Designate and Non-Executive Director on 1 November 2018 He was appointed as Chairman of the Board on 10 March 2019
Committee membershipChair of the Nomination Committee
Dame Susan Rice Senior Independent Director
Skills and experienceSusan has extensive experience as a Non-Executive Director as well as in retail banking financial services leadership and sustainability Her career in retail bankingis particularly relevant to our ownership ofSainsburyrsquos Bank Previously Susan was a member of the First Ministerrsquos Council of Economic Advisors Managing Director of Lloyds Banking Group Scotland and was previously Chief Executive and then Chairman of Lloyds TSB Scotland plc She has also held a range of other non-executive directorships including at the Bank of England and SSE plc
Committee membershipChair of the Remuneration Committee and a member of the Nomination Committee
Date of appointment 1 June 2013
Other current rolesChair of Scottish Water and Business Stream Chair of the Scottish Fiscal Commission Non-Executive Director of the North American Income Trust C Hoare and Co and Senior Independent Director of the North American Income Trust
9
Other current rolesNon-Executive Director and Chairman of the Audit Committee of Centrica plc
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jean Tomlin Non-Executive Director
Skills and experienceJean has extensive experience and breadth of skills in human resources and corporate responsibility Jean was formerly Director of HR Workforce and Accreditation for The London OrganisingCommittee of the Olympic and Paralympic Games where she set the strategic direction to ensure the mobilisation of the combined 200000-strong workforce including paid staff volunteers and contractors which represented the recruitment and mobilisation of the largest peacetime workforce and set the industry standard for volunteering with the highly acclaimed Games She was previously Group HR Director at Marks and Spencer Group Plc HR Director and founder member of Egg plc and Sales amp Operations Director of Prudential Direct
Date of appointment 1 January 2013
Committee membershipAudit Committee Corporate Responsibility and Sustainability Committee and Nomination Committee
David Keens Non-Executive Director
Skills and experienceDavid has extensive retail experience and knowledge of consumer facing businesses together with his core skills in finance David was formerly Group Finance Director of next plc from 1991 to 2015 and their Group Treasurer from 1986 to 1991 Previous management experience includes nine years in the UK and overseas operations of multinational food manufacturer Nabisco and prior to that seven years in the accountancy profession
Date of appointment 29 April 2015
Committee membershipChair of the Audit Committee and a member of the Nomination Committee
Other current rolesIndependent Board member of Capri Holdings Limited Non-Executive Director of Hakluyt and Chief Executive Officer of Chanzo Limited
Other current rolesNon-Executive Director Senior Independent Director and Chair of the Audit Committee of Auto Trader Group plc
Matt BrittinNon-Executive Director
Skills and experienceMatt has extensive experience of running a high profile fast moving innovative digital business Since 2015 he has been responsible for Googlersquos business and operations in Europe the Middle East and Africa and hersquos been in leadership roles at Google since 2007 Prior to that Matt spent much of his career in media and marketing with particular interests in strategy commercial development and sales performance This included commercial and digital leadership roles in UK media
Date of appointment 27 January 2011
Committee membershipNomination Committee and Remuneration Committee
Other current rolesGooglersquos President ndash Europe Middle East and Africa and Director of The Media Trust
Brian Cassin Non-Executive Director
Skills and experienceBrian brings present day experience of running a FTSE40 group and of big data and analytics ndash topics of key importance to Sainsburyrsquos Brian joined Experian plc as Chief Financial Officer in April 2012 a post he held until his appointment as Chief Executive Officer in July 2014 Prior to this Brian spent his career in investment banking at Greenhill amp Co where he was Managing Director and Partner Brian has also held various roles at Baring Brothers International and at the London Stock Exchange
Date of appointment 1 April 2016
Committee membershipAudit Committee and Nomination Committee
Other current rolesChief Executive Officer of Experian plc
10
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jo Harlow Non-Executive Director
Skills and experienceJo brings a wealth of experience in consumer-facing businesses and in the telecoms and technology industry bothin the UK and internationally Jo spent 12 years in a variety of senior management roles with Nokia and Microsoft Prior to this she spent eight years at PampG and 11 years at Reebok in senior sales and marketing positions in both Europe and the US
Date of appointment 11 September 2017
Committee membershipChair of the Corporate Responsibility and Sustainability Committee and member of the Nomination Committee and Remuneration Committee
Life PresidentLord Sainsbury of Preston Candover KG
Other current rolesNon-Executive Director of InterContinental Hotels plc Non-Executive Director of Halmaplc and Member of the Supervisory Board of Ceconomy AG
11
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief Executive
Tim FallowfieldCompany Secretary amp Corporate Services Director
Kevin OrsquoByrne Chief Financial Officer
Jim BrownChief Executive Officer of Sainsburyrsquos Bank
Paul Mills-HicksFood Commercial Director
Angie RisleyGroup HR Director
Phil JordanGroup Chief InformationOfficer
Simon RobertsRetail and Operations Director
Clo MoriartyGroup Chief Digital Officer
12
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief ExecutiveSee Appendix page 9
Kevin OrsquoByrneChief Financial OfficerSee Appendix page 9
Tim FallowfieldCompany Secretary amp Corporate Services Director
Date of appointment September 2004
Skills and experienceTim joined Sainsburyrsquos in 2001 as Company Secretary and joined the Operating Board in September 2004 In addition to his role as Company Secretary Tim is responsible for the Corporate Services Division comprising Legal Services Data Governance Safety Shareholder Services Insurance and Central Security He chairs the Group Safety Committee and the Data Governance Committee Tim joined Sainsburyrsquos from Exelplc the global logistics company now part of DHL where he was Company Secretary and General Counsel He began his career at the international law firm Clifford Chance and is a qualified solicitor Tim is Chairman of the Disability Confident Business Leaders Group which works with Government in shaping the disability employment agenda and in raising awareness of the benefits of employing disabled people
Jim BrownCEO of Sainsburyrsquos Bank
Skills and experienceJim joined Sainsburyrsquos Bank as CEO in June 2019 and is also a member of the Sainsburyrsquos Group Operating Board He has held a number of senior international Financial Services roles - most recently for RBS in the UK as CEO of Williams and Glyn and prior to that CEO of Ulster Bank in Northern Ireland and the Republic of Ireland Before moving to Ireland he was based in Hong Kong and was CEO Retail and Commercial Banking Asia and the Middle East for RBS and ABN AMRO He has also been a member of the RBS Group Management Committee ABN AMRO Executive Group ABN AMRO Global Consumer Leadership Team and the RBSBank of China Joint Steering Committee Earlier in his career he held a number of senior executive roles for Citibank in Asia and Australia and New Zealand Jim has also held various Board positions including at Ulster Bank Saudi Hollandi Bank The Royal Bank of Scotland (China) Co Ltd and RBS (Pakistan) Ltd He is also a past President of the Institute of Banking in Ireland He is currently a Certified Bank Director
Date of appointment August 2019
Paul Mills-HicksFood Commercial Director
Skills and experiencePaul joined the Operating Board in May 2014 as Food Commercial Director having spent over ten years at Sainsburyrsquos He was closely involved in the formation and execution of the lsquoMaking Sainsburyrsquos Great Againrsquo strategy Following this he held a variety of roles in commercial strategy and finance most recently as Business Unit Director for Grocery Prior to Sainsburyrsquos Paul was European Controller at Marks and Spencer Group PLC and a Director at UBS Warburg
Date of appointment May 2014
13
APPENDIX Interim Results 201920 - November 2019
Operating Board
Angie RisleyGroup HR Director
Skills and experienceAngie was appointed Group HR Director and a member of the Operating Board in January 2013 with responsibility for human resources Angie is also a Director of Sainsburyrsquos Bank plc Angie was most recently Non-Executive Director and Chairman of the Remuneration Committee of Serco plc and prior to this was Group HR Director of Lloyds Banking Group and an Executive Director of Whitbread PLC with responsibility for HR and Corporate Social Responsibility Angie is currently Non-Executive Director and Chair of the Remuneration Committee at Smith amp Nephew plc
Date of appointment January 2013
Phil JordanGroup Chief Information Officer
Skills and experiencePhil joined the Board in January 2018 and has brought a fresh globalperspective on technology to the Operating Board in addition to a wealth of experience in digital data and business transformation Prior to joining Sainsburyrsquos Phil had a long and successful track record in telecommunications Most recently he was Global Chief Information Officer at Telefonica overseeing Digital Transformation and Information Technology and prior to that was Chief Information Officer for Vodafone UKIreland Phil has worked as a Non-Executive Advisor on Technology in the Investment amp Retail Banking sector and is currently a Non-Executive Director of TalkTalk Telecom Group PLC and chairs its Cyber-Security Committee
Date of appointment January 2018
Simon RobertsRetail and Operations Director
Skills and experienceSimon joined Sainsburyrsquos and the Operating Board in July 2017 as Central Retail amp Operations Director responsible for Stores Central operation and Logistics In his previous role he was Executive Vice President of Walgreens Boots Alliance and President of Boots with responsibility for commercial and retail operations across the UK and Ireland Prior to Boots Simon was at Marks and Spencer Group PLC where he held operational and customer leadership roles across stores divisions and central operations Simon is also the Non-Executive Chairman at the Institute ofCustomer Service
Date of appointment July 2017
Clodagh MoriartyGroup Chief Digital Officer
Skills and experienceClodagh was appointed Group Chief Digital Officer in June 2018 Clodagh leads the delivery of a consistent and first-rate digital experience for customers across Sainsburyrsquos Argos and Sainsburyrsquos BankClodagh joined Sainsburyrsquos in 2010 from Bain amp Co management consultants where she had gained experience working on a broad range of projects across multiple sectors and countries Following two years as Head of Strategy at Sainsburyrsquosshe moved into Food Commercial as Category Manager for Meal Solutions and then became Head of Online Trading spanning Food General Merchandise and Clothing before being promoted to Director of Online in 2016 In this role Clodagh was instrumental in driving innovation within Groceries Online and launching new initiatives including SmartShop and Chop Chop
Date of appointment June 2018
14
APPENDIX Interim Results 201920 - November 2019
Supplementary financial details
3 Financial calendarQ3 trading statement(15 weeks to 4 January 2020)
Preliminary results(52 weeks to 7 March 2020)
8 January 2020
30 April 2020
1 Weighted average number of shares
The interim dividend datesOrdinary shares
Ex-dividend 14 November 2019Record 15 November 2019Payment 20 December 2019
More distinctive rangemore reason to shop at Sainsburyrsquos
Reduced SKU count -20operational efficiencies
Higher cash gross profit +2 YOY
Volumes +8 operational efficiencies
41 Interim Results 201920 - November 2019
Drive efficiency
to invest in the customer
offer
4
BAU savings to offset cost inflation
Manages inflationary pressures
BAU savingsH1 201920
Procurement GNFR
Retail Technology Efficiencies
Retail HRRetail
management structures
Shrink Reduction
42 Interim Results 201920 - November 2019
Drive efficiency
to invest in the customer
offer
4
Strategic cost transformation 5 year plan
Converge Tackle fixed cost
End to end reviews
Retail Operations Marketing and Commercial Operations
Other central support
Logistics and Supply Chain
Project A
Project C
Project D
Shared Services BPO
Property strategy
Project BGNFR procurement
Capital prioritisation
Technology Digital and Corporate Services
pound250-pound350m
pound150-pound250m
pound400-pound600mExecution underway In planning Opportunities identified
pound5bn addressable cost base
43 Interim Results 201920 - November 2019
Grow connected
services
5
44 Interim Results 201920 - November 2019
Grow connected
services
5
Financial Services Priorities
To be the provider of financial services for loyal Sainsburyrsquos and Argos customers
An agile capital and cost efficient provider of simple mobile-led financial services
Vision
Objective
Priorities Reshape Simplify Strengthen
45 Interim Results 201920 - November 2019
Grow connected
services
5
Current Customer Base
Customer Credit Risk Balance Sheet Earnings
Argos Storecards 22m Prime Near Prime
Credit Cards 09m Prime
Personal Loans 05m Prime
Mortgages 9K Exit
Total Lending
Deposits 03m
Insurances 05m Very Low Risk
Travel Money 266 Sites
ATMs 1890
Financial Services reshaping the portfolio
46 Interim Results 201920 - November 2019
Grow connected
services
5
Increase connectivity and value for Group
Stop mortgage acquisition review back book options
No capital input from the Group from now1
Costincome c503 within 5 years
Double UPBT double digit ROCE within 5 years
Upstream cash within 5 years2
Financial Services key targets
Transform the cost base
Improve returns
Financial services cash generative
Reduce risk profile to Group
Stop putting cash in to Financial Services
2
4
6
3
1
5
Focus on Sainsburyrsquos customer base
1 Subject to regulatory changes requirements2 Subject to regulatory approval3 On a Group contribution basis
47 Interim Results 201920 - November 2019
Grow connected
services
5
Nectar
bull Biggest loyalty programme in the UK
bull Over 18 million collectors
bull Most recognised loyalty brand in the UK
bull Launch of Nectar digital- 21 million app users- Increase in overall Nectar participation- Increased levels of personalisation- 138000 new Nectar customers- 1 app on launch weekend
bull Coalition strengthened with addition of Esso in June 2019
48 Interim Results 201920 - November 2019
Provide a seamless customer
experience
6
49 Interim Results 201920 - November 2019
Provide a seamless customer
experience
6
Digital
bull Groceries Online sales penetration of 8- App accounts for over 20 of orders
bull 21 million digital Nectar app users
bull 14 million Argos Financial Services app downloads
bull Smartshop rollout in over 350 stores
Groceries online
Chop Chop
SmartShop
Universaldiscovery
Seamlessfinancialservices
Singlebasket
50 Interim Results 201920 - November 2019
We will help our customers live well for less
Confident in the core Integrated customer offer
One multi brand multi channel business
Strong cash generation supporting investment dividend and allowing deleverage
Financial flexibility and resilience
Sustainable cost reduction covering cost inflation and funding investment in our competitive offer
QampA
APPENDIX Interim Results 201920 - November 2019
Appendices
APPENDIX Interim Results 201920 - November 2019
Guidance for 201920
1
Spacebull Expect to open 2 new Sainsburyrsquos supermarkets and up to 15 convenience storesbull Expect to open around 25 Argos stores in Sainsburyrsquos (of which 11 are
relocations) resulting in around 305 Argos stores in supermarketsbull Expect to close 2 supermarkets around 25 convenience stores and around 20
Argos stores in FY201920 as part of announced property closure programme of 10-15 supermarkets 30-40 convenience stores and 60-70 Argos stores
Financial Servicesbull Financial services underlying operating profit expected to be cpound45m including a
cpound10m benefit as a result of a change in transfer pricing between Argos and Argos Financial Services
bull Financial Services non-underlying costs are expected to be around pound30mbull No further capital injections into the Bank are expected following pound35m in H1 201920
Depreciation and amortisationbull Expect underlying retail depreciation and amortisation of around pound12bn
including cpound500m right of use asset depreciation
CostsOperating cost inflationbull Cost inflation between 2 and 3Cost savingsbull Continue to deliver cost savings to at least offset the impact of cost inflation
Finance costsbull Net finance costs of around pound405m including pound320m lease interest in
201920 following the introduction of IFRS 16
One-off itemsbull In 201920 cash outflows as a result of items excluded from
underlying results should not exceed pound100mbull Property strategy programme one-off costs expected to be
pound230m-pound270m of which cash costs are pound30-40m
Dividendbull Sainsburyrsquos plans to change the full year dividend policy to 19x cover by
underlying earnings (versus 20x previously) to offset the dilutive (non cash) impact of IFRS 16 on underlying earnings
Capital expenditurebull Retail capital expenditure to be around pound550mbull Retail capital expenditure is expected to be around pound550m-pound600m per
annum over the medium term
Net debtbull Net debt before fair value movements on derivatives to reduce by at
least pound300m
Tax ratebull Underlying tax rate to be between 25 and 26
APPENDIX Interim Results 201920 - November 2019
Retail sales
1 Sales including VAT excluding fuel
LFL sales growth1
(10)
Sales from net new space1
04
Total sales growth1
(06)
Supermarkets2
(07)
Convenience20
Groceries Online
70
Channels
(01)(25)
(12)
2 Supermarket sales include Argos SiS sales FY 1819 16
pound139bn
pound103bnGrocery
pound30bnGeneralMerchandise
pound488mClothing
2
Chart1
201819
194
66
1
Sheet1
APPENDIX Interim Results 201920 - November 2019
Sainsburyrsquos sales area and store numbersAs at 21 September 2019
Sainsburyrsquos store estateAs at 21 September 2019
Sq ftsales area
82446
870
40001 to60000
20001 to40000
10000 to20000
Under10000 Total
Over60000
0122122
0197197
0175175
06767
824607
1431
Argos storesArgos in SainsburyrsquosArgos in HomebaseOtherArgos total store numbers
Habitat1
Collection points
594281
8-
883
16317
As at21 Sept 2019
Disposalsclosures
Newstores
As at9 March 2019
17--8
-1
(7)-
(2)-
(9)
-(36)
588288
6-
88216
282
ConvenienceSupermarketsTotal stores
Number of stores
Sq ftsales area
1929350
2279
40001 to60000
20001 to40000
10000 to20000
Under10000 Total
Over60000
-18441844
-58185818
-85018501
-46604660
19292117323102
ConvenienceSupermarketsTotal stores
Space by store size (lsquo000 sq ft)
Argos and Habitat store numbers
1 5 Habitat stores 11 Habitat stores in Sainsburys
4
APPENDIX Interim Results 201920 - November 2019
ClosureBitterne West
Sainsburyrsquos investment programme201920
Q1
Supermarkets ConvenienceNew storesMilton Keynes Brooklands District CentBromley High StLeeds Wike Ridge LaneSalford Harbour CityCanterbury High St
ReplacementMayfair Stratton St
ClosuresMayfairWarren St
Q1Q1Q1Q2Q2
Q2
Q1Q2
5
APPENDIX Interim Results 201920 - November 2019
Retail margin
Retail sales (inc VAT inc fuel)(exc VAT inc fuel)
Retail underlying EBITDAR1
Retail underlying EBITDAR margin 2
at constant fuel pricesRetail underlying operating profit3
Retail underlying operating margin 4
at constant fuel prices
1656714808
10677272
4373030
1661214856
11147575
4873333
030342
30 bps28 bps10333 bps32 bps
1 Retail underlying operating profit before net rental income of pound6 million and underlying depreciation and amortisation of pound636 million2 Retail underlying EBITDAR divided by underlying retail sales excluding VAT3 Retail underlying earnings before interest tax and Sainsburyrsquos underlying share of post-tax profit from joint ventures4 Retail underlying operating profit divided by underlying retail sales excluding VAT
poundm H1201920
H1201819
Change
6
APPENDIX Interim Results 201920 - November 2019
H1201920
H1201819
Group retail
Return on capital employed 1
Net debt to EBITDAR (times)23
Fixed charge cover (times)2
Underlying tax rate Core retail capex sales5
713126
26515
743326
25715
poundm
1 ROCE Return is defined as a 52 week rolling underlying profit before interest and tax Capital employed is defined as group net assets2 Net debt of pound6778 million includes lease obligations under IFRS 16 and perpetual securities treated as debt divided by Group underlying EBITDAR of pound2171 million calculated for a 52-week period to 21 September 20193 Group underlying EBITDAR divided by rent (both capital and interest) and net finance costs where interest on perpetual securities is treated as an underlying finance costs4 52 weeks to 22nd September 2018 is not available due to the implementation of IFRS 16 Comparatives therefore reflect the 52 weeks to 9th March 20195 Includes retail sales inc vat inc fuel
4
4
7
APPENDIX Interim Results 201920 - November 2019
Plc Board
Kevin OrsquoByrneChief Financial Officer
Mike Coupe Group Chief Executive
Dame Susan Rice Senior Independent Director
Matt BrittinNon-Executive Director
Jo HarlowNon-Executive Director
Brian CassinNon-Executive Director
David KeensNon-Executive Director
Jean Tomlin Non-Executive Director
Martin Scicluna Chairman
8
APPENDIX Interim Results 201920 - November 2019
Plc Board
Mike Coupe Group Chief Executive Officer
Skills and experienceAppointed Group Chief Executive Officer on 9 July 2014 Mike has been a member of the Operating Board since October 2004 Mike has vast retail industry experience in trading strategy marketing digital and online as well as multi-site store experience He joined Sainsburyrsquos from Big Food Group where he was a board director of Big Food Group PLC and Managing Director of Iceland Food Stores He previously worked for both Asda and Tesco PLC where he served in a variety of senior management roles
Date of appointment 1 August 2007Mike has served as an Executive Director since 1 August 2007 and as Chief Executive Officer since 9 July 2014
Committee membershipCorporate Responsibility and Sustainability Committee
Kevin OrsquoByrne Chief Financial Officer
Skills and experienceKevin brings to the Board a wealth of retail and finance experience Kevin was previously Chief Executive Officer of Poundland Group Limited until December 2016 and held executive roles at Kingfisher plc from 2008 to 2015 including Divisional Director UK China and Turkey Chief Executive Officer of BampQ UK amp Ireland and Group Finance Director He was previously Group Finance Director of Dixons Retail plc and European Finance Director of Quaker Oats He was a Non-Executive Director of Land Securities Group PLC from 2008 to September 2017 where he was Chairman of the Audit Committee and Senior Independent Director
Date of appointment 9 January 2017
Other current rolesNon-Executive Director of Greene King plc
Skills and experienceMartin brings a breadth of experience and leadership in both executive and non-executive roles His previous roles include positions as the Chairman of Great Portland Estates plc Senior Independent Director and Chair of the Audit Committee of Worldpay Inc and Non-Executive Director and Chair of the Audit Committee of Lloyds Banking Group plc He was a partner at Deloitte LLP for 26 years serving as Chairman from 1995 to 2007 where his clients included Dixons WH Smith Alliance Unichem and Cadburyrsquos
Other current rolesChairman of RSA Insurance Group plc
Martin Scicluna Chairman
Date of appointment 1 November 2018 Martin joined the Board as Chairman Designate and Non-Executive Director on 1 November 2018 He was appointed as Chairman of the Board on 10 March 2019
Committee membershipChair of the Nomination Committee
Dame Susan Rice Senior Independent Director
Skills and experienceSusan has extensive experience as a Non-Executive Director as well as in retail banking financial services leadership and sustainability Her career in retail bankingis particularly relevant to our ownership ofSainsburyrsquos Bank Previously Susan was a member of the First Ministerrsquos Council of Economic Advisors Managing Director of Lloyds Banking Group Scotland and was previously Chief Executive and then Chairman of Lloyds TSB Scotland plc She has also held a range of other non-executive directorships including at the Bank of England and SSE plc
Committee membershipChair of the Remuneration Committee and a member of the Nomination Committee
Date of appointment 1 June 2013
Other current rolesChair of Scottish Water and Business Stream Chair of the Scottish Fiscal Commission Non-Executive Director of the North American Income Trust C Hoare and Co and Senior Independent Director of the North American Income Trust
9
Other current rolesNon-Executive Director and Chairman of the Audit Committee of Centrica plc
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jean Tomlin Non-Executive Director
Skills and experienceJean has extensive experience and breadth of skills in human resources and corporate responsibility Jean was formerly Director of HR Workforce and Accreditation for The London OrganisingCommittee of the Olympic and Paralympic Games where she set the strategic direction to ensure the mobilisation of the combined 200000-strong workforce including paid staff volunteers and contractors which represented the recruitment and mobilisation of the largest peacetime workforce and set the industry standard for volunteering with the highly acclaimed Games She was previously Group HR Director at Marks and Spencer Group Plc HR Director and founder member of Egg plc and Sales amp Operations Director of Prudential Direct
Date of appointment 1 January 2013
Committee membershipAudit Committee Corporate Responsibility and Sustainability Committee and Nomination Committee
David Keens Non-Executive Director
Skills and experienceDavid has extensive retail experience and knowledge of consumer facing businesses together with his core skills in finance David was formerly Group Finance Director of next plc from 1991 to 2015 and their Group Treasurer from 1986 to 1991 Previous management experience includes nine years in the UK and overseas operations of multinational food manufacturer Nabisco and prior to that seven years in the accountancy profession
Date of appointment 29 April 2015
Committee membershipChair of the Audit Committee and a member of the Nomination Committee
Other current rolesIndependent Board member of Capri Holdings Limited Non-Executive Director of Hakluyt and Chief Executive Officer of Chanzo Limited
Other current rolesNon-Executive Director Senior Independent Director and Chair of the Audit Committee of Auto Trader Group plc
Matt BrittinNon-Executive Director
Skills and experienceMatt has extensive experience of running a high profile fast moving innovative digital business Since 2015 he has been responsible for Googlersquos business and operations in Europe the Middle East and Africa and hersquos been in leadership roles at Google since 2007 Prior to that Matt spent much of his career in media and marketing with particular interests in strategy commercial development and sales performance This included commercial and digital leadership roles in UK media
Date of appointment 27 January 2011
Committee membershipNomination Committee and Remuneration Committee
Other current rolesGooglersquos President ndash Europe Middle East and Africa and Director of The Media Trust
Brian Cassin Non-Executive Director
Skills and experienceBrian brings present day experience of running a FTSE40 group and of big data and analytics ndash topics of key importance to Sainsburyrsquos Brian joined Experian plc as Chief Financial Officer in April 2012 a post he held until his appointment as Chief Executive Officer in July 2014 Prior to this Brian spent his career in investment banking at Greenhill amp Co where he was Managing Director and Partner Brian has also held various roles at Baring Brothers International and at the London Stock Exchange
Date of appointment 1 April 2016
Committee membershipAudit Committee and Nomination Committee
Other current rolesChief Executive Officer of Experian plc
10
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jo Harlow Non-Executive Director
Skills and experienceJo brings a wealth of experience in consumer-facing businesses and in the telecoms and technology industry bothin the UK and internationally Jo spent 12 years in a variety of senior management roles with Nokia and Microsoft Prior to this she spent eight years at PampG and 11 years at Reebok in senior sales and marketing positions in both Europe and the US
Date of appointment 11 September 2017
Committee membershipChair of the Corporate Responsibility and Sustainability Committee and member of the Nomination Committee and Remuneration Committee
Life PresidentLord Sainsbury of Preston Candover KG
Other current rolesNon-Executive Director of InterContinental Hotels plc Non-Executive Director of Halmaplc and Member of the Supervisory Board of Ceconomy AG
11
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief Executive
Tim FallowfieldCompany Secretary amp Corporate Services Director
Kevin OrsquoByrne Chief Financial Officer
Jim BrownChief Executive Officer of Sainsburyrsquos Bank
Paul Mills-HicksFood Commercial Director
Angie RisleyGroup HR Director
Phil JordanGroup Chief InformationOfficer
Simon RobertsRetail and Operations Director
Clo MoriartyGroup Chief Digital Officer
12
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief ExecutiveSee Appendix page 9
Kevin OrsquoByrneChief Financial OfficerSee Appendix page 9
Tim FallowfieldCompany Secretary amp Corporate Services Director
Date of appointment September 2004
Skills and experienceTim joined Sainsburyrsquos in 2001 as Company Secretary and joined the Operating Board in September 2004 In addition to his role as Company Secretary Tim is responsible for the Corporate Services Division comprising Legal Services Data Governance Safety Shareholder Services Insurance and Central Security He chairs the Group Safety Committee and the Data Governance Committee Tim joined Sainsburyrsquos from Exelplc the global logistics company now part of DHL where he was Company Secretary and General Counsel He began his career at the international law firm Clifford Chance and is a qualified solicitor Tim is Chairman of the Disability Confident Business Leaders Group which works with Government in shaping the disability employment agenda and in raising awareness of the benefits of employing disabled people
Jim BrownCEO of Sainsburyrsquos Bank
Skills and experienceJim joined Sainsburyrsquos Bank as CEO in June 2019 and is also a member of the Sainsburyrsquos Group Operating Board He has held a number of senior international Financial Services roles - most recently for RBS in the UK as CEO of Williams and Glyn and prior to that CEO of Ulster Bank in Northern Ireland and the Republic of Ireland Before moving to Ireland he was based in Hong Kong and was CEO Retail and Commercial Banking Asia and the Middle East for RBS and ABN AMRO He has also been a member of the RBS Group Management Committee ABN AMRO Executive Group ABN AMRO Global Consumer Leadership Team and the RBSBank of China Joint Steering Committee Earlier in his career he held a number of senior executive roles for Citibank in Asia and Australia and New Zealand Jim has also held various Board positions including at Ulster Bank Saudi Hollandi Bank The Royal Bank of Scotland (China) Co Ltd and RBS (Pakistan) Ltd He is also a past President of the Institute of Banking in Ireland He is currently a Certified Bank Director
Date of appointment August 2019
Paul Mills-HicksFood Commercial Director
Skills and experiencePaul joined the Operating Board in May 2014 as Food Commercial Director having spent over ten years at Sainsburyrsquos He was closely involved in the formation and execution of the lsquoMaking Sainsburyrsquos Great Againrsquo strategy Following this he held a variety of roles in commercial strategy and finance most recently as Business Unit Director for Grocery Prior to Sainsburyrsquos Paul was European Controller at Marks and Spencer Group PLC and a Director at UBS Warburg
Date of appointment May 2014
13
APPENDIX Interim Results 201920 - November 2019
Operating Board
Angie RisleyGroup HR Director
Skills and experienceAngie was appointed Group HR Director and a member of the Operating Board in January 2013 with responsibility for human resources Angie is also a Director of Sainsburyrsquos Bank plc Angie was most recently Non-Executive Director and Chairman of the Remuneration Committee of Serco plc and prior to this was Group HR Director of Lloyds Banking Group and an Executive Director of Whitbread PLC with responsibility for HR and Corporate Social Responsibility Angie is currently Non-Executive Director and Chair of the Remuneration Committee at Smith amp Nephew plc
Date of appointment January 2013
Phil JordanGroup Chief Information Officer
Skills and experiencePhil joined the Board in January 2018 and has brought a fresh globalperspective on technology to the Operating Board in addition to a wealth of experience in digital data and business transformation Prior to joining Sainsburyrsquos Phil had a long and successful track record in telecommunications Most recently he was Global Chief Information Officer at Telefonica overseeing Digital Transformation and Information Technology and prior to that was Chief Information Officer for Vodafone UKIreland Phil has worked as a Non-Executive Advisor on Technology in the Investment amp Retail Banking sector and is currently a Non-Executive Director of TalkTalk Telecom Group PLC and chairs its Cyber-Security Committee
Date of appointment January 2018
Simon RobertsRetail and Operations Director
Skills and experienceSimon joined Sainsburyrsquos and the Operating Board in July 2017 as Central Retail amp Operations Director responsible for Stores Central operation and Logistics In his previous role he was Executive Vice President of Walgreens Boots Alliance and President of Boots with responsibility for commercial and retail operations across the UK and Ireland Prior to Boots Simon was at Marks and Spencer Group PLC where he held operational and customer leadership roles across stores divisions and central operations Simon is also the Non-Executive Chairman at the Institute ofCustomer Service
Date of appointment July 2017
Clodagh MoriartyGroup Chief Digital Officer
Skills and experienceClodagh was appointed Group Chief Digital Officer in June 2018 Clodagh leads the delivery of a consistent and first-rate digital experience for customers across Sainsburyrsquos Argos and Sainsburyrsquos BankClodagh joined Sainsburyrsquos in 2010 from Bain amp Co management consultants where she had gained experience working on a broad range of projects across multiple sectors and countries Following two years as Head of Strategy at Sainsburyrsquosshe moved into Food Commercial as Category Manager for Meal Solutions and then became Head of Online Trading spanning Food General Merchandise and Clothing before being promoted to Director of Online in 2016 In this role Clodagh was instrumental in driving innovation within Groceries Online and launching new initiatives including SmartShop and Chop Chop
Date of appointment June 2018
14
APPENDIX Interim Results 201920 - November 2019
Supplementary financial details
3 Financial calendarQ3 trading statement(15 weeks to 4 January 2020)
Preliminary results(52 weeks to 7 March 2020)
8 January 2020
30 April 2020
1 Weighted average number of shares
The interim dividend datesOrdinary shares
Ex-dividend 14 November 2019Record 15 November 2019Payment 20 December 2019
Product Quality Framework helps us fund investment
PQF cereals case study
BAU savings to offset cost inflation
Strategic cost transformation 5 year plan
Slide Number 43
Financial Services Priorities
Financial Services reshaping the portfolio
Financial Services key targets
Nectar
Slide Number 48
Digital
We will help our customers live well for less
Slide Number 51
Slide Number 52
Guidance for 201920
Retail sales
Sainsburyrsquos sales area and store numbers
Sainsburyrsquos store estate
Sainsburyrsquos investment programme
Retail margin
Group retail
Plc Board
Plc Board
Plc Board
Plc Board
Operating Board
Operating Board
Operating Board
Supplementary financial details
Contacts
Column1
201819
Grocery
19
GM
7
Clothing
1
To resize chart data range drag lower right corner of range
Grocery
GM
Clothing
40 Interim Results 201920 - November 2019
Drive efficiency
to invest in the customer
offer
4
PQF cereals case study
Improved Value Index gt100bpsmore competitive
More distinctive rangemore reason to shop at Sainsburyrsquos
Reduced SKU count -20operational efficiencies
Higher cash gross profit +2 YOY
Volumes +8 operational efficiencies
41 Interim Results 201920 - November 2019
Drive efficiency
to invest in the customer
offer
4
BAU savings to offset cost inflation
Manages inflationary pressures
BAU savingsH1 201920
Procurement GNFR
Retail Technology Efficiencies
Retail HRRetail
management structures
Shrink Reduction
42 Interim Results 201920 - November 2019
Drive efficiency
to invest in the customer
offer
4
Strategic cost transformation 5 year plan
Converge Tackle fixed cost
End to end reviews
Retail Operations Marketing and Commercial Operations
Other central support
Logistics and Supply Chain
Project A
Project C
Project D
Shared Services BPO
Property strategy
Project BGNFR procurement
Capital prioritisation
Technology Digital and Corporate Services
pound250-pound350m
pound150-pound250m
pound400-pound600mExecution underway In planning Opportunities identified
pound5bn addressable cost base
43 Interim Results 201920 - November 2019
Grow connected
services
5
44 Interim Results 201920 - November 2019
Grow connected
services
5
Financial Services Priorities
To be the provider of financial services for loyal Sainsburyrsquos and Argos customers
An agile capital and cost efficient provider of simple mobile-led financial services
Vision
Objective
Priorities Reshape Simplify Strengthen
45 Interim Results 201920 - November 2019
Grow connected
services
5
Current Customer Base
Customer Credit Risk Balance Sheet Earnings
Argos Storecards 22m Prime Near Prime
Credit Cards 09m Prime
Personal Loans 05m Prime
Mortgages 9K Exit
Total Lending
Deposits 03m
Insurances 05m Very Low Risk
Travel Money 266 Sites
ATMs 1890
Financial Services reshaping the portfolio
46 Interim Results 201920 - November 2019
Grow connected
services
5
Increase connectivity and value for Group
Stop mortgage acquisition review back book options
No capital input from the Group from now1
Costincome c503 within 5 years
Double UPBT double digit ROCE within 5 years
Upstream cash within 5 years2
Financial Services key targets
Transform the cost base
Improve returns
Financial services cash generative
Reduce risk profile to Group
Stop putting cash in to Financial Services
2
4
6
3
1
5
Focus on Sainsburyrsquos customer base
1 Subject to regulatory changes requirements2 Subject to regulatory approval3 On a Group contribution basis
47 Interim Results 201920 - November 2019
Grow connected
services
5
Nectar
bull Biggest loyalty programme in the UK
bull Over 18 million collectors
bull Most recognised loyalty brand in the UK
bull Launch of Nectar digital- 21 million app users- Increase in overall Nectar participation- Increased levels of personalisation- 138000 new Nectar customers- 1 app on launch weekend
bull Coalition strengthened with addition of Esso in June 2019
48 Interim Results 201920 - November 2019
Provide a seamless customer
experience
6
49 Interim Results 201920 - November 2019
Provide a seamless customer
experience
6
Digital
bull Groceries Online sales penetration of 8- App accounts for over 20 of orders
bull 21 million digital Nectar app users
bull 14 million Argos Financial Services app downloads
bull Smartshop rollout in over 350 stores
Groceries online
Chop Chop
SmartShop
Universaldiscovery
Seamlessfinancialservices
Singlebasket
50 Interim Results 201920 - November 2019
We will help our customers live well for less
Confident in the core Integrated customer offer
One multi brand multi channel business
Strong cash generation supporting investment dividend and allowing deleverage
Financial flexibility and resilience
Sustainable cost reduction covering cost inflation and funding investment in our competitive offer
QampA
APPENDIX Interim Results 201920 - November 2019
Appendices
APPENDIX Interim Results 201920 - November 2019
Guidance for 201920
1
Spacebull Expect to open 2 new Sainsburyrsquos supermarkets and up to 15 convenience storesbull Expect to open around 25 Argos stores in Sainsburyrsquos (of which 11 are
relocations) resulting in around 305 Argos stores in supermarketsbull Expect to close 2 supermarkets around 25 convenience stores and around 20
Argos stores in FY201920 as part of announced property closure programme of 10-15 supermarkets 30-40 convenience stores and 60-70 Argos stores
Financial Servicesbull Financial services underlying operating profit expected to be cpound45m including a
cpound10m benefit as a result of a change in transfer pricing between Argos and Argos Financial Services
bull Financial Services non-underlying costs are expected to be around pound30mbull No further capital injections into the Bank are expected following pound35m in H1 201920
Depreciation and amortisationbull Expect underlying retail depreciation and amortisation of around pound12bn
including cpound500m right of use asset depreciation
CostsOperating cost inflationbull Cost inflation between 2 and 3Cost savingsbull Continue to deliver cost savings to at least offset the impact of cost inflation
Finance costsbull Net finance costs of around pound405m including pound320m lease interest in
201920 following the introduction of IFRS 16
One-off itemsbull In 201920 cash outflows as a result of items excluded from
underlying results should not exceed pound100mbull Property strategy programme one-off costs expected to be
pound230m-pound270m of which cash costs are pound30-40m
Dividendbull Sainsburyrsquos plans to change the full year dividend policy to 19x cover by
underlying earnings (versus 20x previously) to offset the dilutive (non cash) impact of IFRS 16 on underlying earnings
Capital expenditurebull Retail capital expenditure to be around pound550mbull Retail capital expenditure is expected to be around pound550m-pound600m per
annum over the medium term
Net debtbull Net debt before fair value movements on derivatives to reduce by at
least pound300m
Tax ratebull Underlying tax rate to be between 25 and 26
APPENDIX Interim Results 201920 - November 2019
Retail sales
1 Sales including VAT excluding fuel
LFL sales growth1
(10)
Sales from net new space1
04
Total sales growth1
(06)
Supermarkets2
(07)
Convenience20
Groceries Online
70
Channels
(01)(25)
(12)
2 Supermarket sales include Argos SiS sales FY 1819 16
pound139bn
pound103bnGrocery
pound30bnGeneralMerchandise
pound488mClothing
2
Chart1
201819
194
66
1
Sheet1
APPENDIX Interim Results 201920 - November 2019
Sainsburyrsquos sales area and store numbersAs at 21 September 2019
Sainsburyrsquos store estateAs at 21 September 2019
Sq ftsales area
82446
870
40001 to60000
20001 to40000
10000 to20000
Under10000 Total
Over60000
0122122
0197197
0175175
06767
824607
1431
Argos storesArgos in SainsburyrsquosArgos in HomebaseOtherArgos total store numbers
Habitat1
Collection points
594281
8-
883
16317
As at21 Sept 2019
Disposalsclosures
Newstores
As at9 March 2019
17--8
-1
(7)-
(2)-
(9)
-(36)
588288
6-
88216
282
ConvenienceSupermarketsTotal stores
Number of stores
Sq ftsales area
1929350
2279
40001 to60000
20001 to40000
10000 to20000
Under10000 Total
Over60000
-18441844
-58185818
-85018501
-46604660
19292117323102
ConvenienceSupermarketsTotal stores
Space by store size (lsquo000 sq ft)
Argos and Habitat store numbers
1 5 Habitat stores 11 Habitat stores in Sainsburys
4
APPENDIX Interim Results 201920 - November 2019
ClosureBitterne West
Sainsburyrsquos investment programme201920
Q1
Supermarkets ConvenienceNew storesMilton Keynes Brooklands District CentBromley High StLeeds Wike Ridge LaneSalford Harbour CityCanterbury High St
ReplacementMayfair Stratton St
ClosuresMayfairWarren St
Q1Q1Q1Q2Q2
Q2
Q1Q2
5
APPENDIX Interim Results 201920 - November 2019
Retail margin
Retail sales (inc VAT inc fuel)(exc VAT inc fuel)
Retail underlying EBITDAR1
Retail underlying EBITDAR margin 2
at constant fuel pricesRetail underlying operating profit3
Retail underlying operating margin 4
at constant fuel prices
1656714808
10677272
4373030
1661214856
11147575
4873333
030342
30 bps28 bps10333 bps32 bps
1 Retail underlying operating profit before net rental income of pound6 million and underlying depreciation and amortisation of pound636 million2 Retail underlying EBITDAR divided by underlying retail sales excluding VAT3 Retail underlying earnings before interest tax and Sainsburyrsquos underlying share of post-tax profit from joint ventures4 Retail underlying operating profit divided by underlying retail sales excluding VAT
poundm H1201920
H1201819
Change
6
APPENDIX Interim Results 201920 - November 2019
H1201920
H1201819
Group retail
Return on capital employed 1
Net debt to EBITDAR (times)23
Fixed charge cover (times)2
Underlying tax rate Core retail capex sales5
713126
26515
743326
25715
poundm
1 ROCE Return is defined as a 52 week rolling underlying profit before interest and tax Capital employed is defined as group net assets2 Net debt of pound6778 million includes lease obligations under IFRS 16 and perpetual securities treated as debt divided by Group underlying EBITDAR of pound2171 million calculated for a 52-week period to 21 September 20193 Group underlying EBITDAR divided by rent (both capital and interest) and net finance costs where interest on perpetual securities is treated as an underlying finance costs4 52 weeks to 22nd September 2018 is not available due to the implementation of IFRS 16 Comparatives therefore reflect the 52 weeks to 9th March 20195 Includes retail sales inc vat inc fuel
4
4
7
APPENDIX Interim Results 201920 - November 2019
Plc Board
Kevin OrsquoByrneChief Financial Officer
Mike Coupe Group Chief Executive
Dame Susan Rice Senior Independent Director
Matt BrittinNon-Executive Director
Jo HarlowNon-Executive Director
Brian CassinNon-Executive Director
David KeensNon-Executive Director
Jean Tomlin Non-Executive Director
Martin Scicluna Chairman
8
APPENDIX Interim Results 201920 - November 2019
Plc Board
Mike Coupe Group Chief Executive Officer
Skills and experienceAppointed Group Chief Executive Officer on 9 July 2014 Mike has been a member of the Operating Board since October 2004 Mike has vast retail industry experience in trading strategy marketing digital and online as well as multi-site store experience He joined Sainsburyrsquos from Big Food Group where he was a board director of Big Food Group PLC and Managing Director of Iceland Food Stores He previously worked for both Asda and Tesco PLC where he served in a variety of senior management roles
Date of appointment 1 August 2007Mike has served as an Executive Director since 1 August 2007 and as Chief Executive Officer since 9 July 2014
Committee membershipCorporate Responsibility and Sustainability Committee
Kevin OrsquoByrne Chief Financial Officer
Skills and experienceKevin brings to the Board a wealth of retail and finance experience Kevin was previously Chief Executive Officer of Poundland Group Limited until December 2016 and held executive roles at Kingfisher plc from 2008 to 2015 including Divisional Director UK China and Turkey Chief Executive Officer of BampQ UK amp Ireland and Group Finance Director He was previously Group Finance Director of Dixons Retail plc and European Finance Director of Quaker Oats He was a Non-Executive Director of Land Securities Group PLC from 2008 to September 2017 where he was Chairman of the Audit Committee and Senior Independent Director
Date of appointment 9 January 2017
Other current rolesNon-Executive Director of Greene King plc
Skills and experienceMartin brings a breadth of experience and leadership in both executive and non-executive roles His previous roles include positions as the Chairman of Great Portland Estates plc Senior Independent Director and Chair of the Audit Committee of Worldpay Inc and Non-Executive Director and Chair of the Audit Committee of Lloyds Banking Group plc He was a partner at Deloitte LLP for 26 years serving as Chairman from 1995 to 2007 where his clients included Dixons WH Smith Alliance Unichem and Cadburyrsquos
Other current rolesChairman of RSA Insurance Group plc
Martin Scicluna Chairman
Date of appointment 1 November 2018 Martin joined the Board as Chairman Designate and Non-Executive Director on 1 November 2018 He was appointed as Chairman of the Board on 10 March 2019
Committee membershipChair of the Nomination Committee
Dame Susan Rice Senior Independent Director
Skills and experienceSusan has extensive experience as a Non-Executive Director as well as in retail banking financial services leadership and sustainability Her career in retail bankingis particularly relevant to our ownership ofSainsburyrsquos Bank Previously Susan was a member of the First Ministerrsquos Council of Economic Advisors Managing Director of Lloyds Banking Group Scotland and was previously Chief Executive and then Chairman of Lloyds TSB Scotland plc She has also held a range of other non-executive directorships including at the Bank of England and SSE plc
Committee membershipChair of the Remuneration Committee and a member of the Nomination Committee
Date of appointment 1 June 2013
Other current rolesChair of Scottish Water and Business Stream Chair of the Scottish Fiscal Commission Non-Executive Director of the North American Income Trust C Hoare and Co and Senior Independent Director of the North American Income Trust
9
Other current rolesNon-Executive Director and Chairman of the Audit Committee of Centrica plc
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jean Tomlin Non-Executive Director
Skills and experienceJean has extensive experience and breadth of skills in human resources and corporate responsibility Jean was formerly Director of HR Workforce and Accreditation for The London OrganisingCommittee of the Olympic and Paralympic Games where she set the strategic direction to ensure the mobilisation of the combined 200000-strong workforce including paid staff volunteers and contractors which represented the recruitment and mobilisation of the largest peacetime workforce and set the industry standard for volunteering with the highly acclaimed Games She was previously Group HR Director at Marks and Spencer Group Plc HR Director and founder member of Egg plc and Sales amp Operations Director of Prudential Direct
Date of appointment 1 January 2013
Committee membershipAudit Committee Corporate Responsibility and Sustainability Committee and Nomination Committee
David Keens Non-Executive Director
Skills and experienceDavid has extensive retail experience and knowledge of consumer facing businesses together with his core skills in finance David was formerly Group Finance Director of next plc from 1991 to 2015 and their Group Treasurer from 1986 to 1991 Previous management experience includes nine years in the UK and overseas operations of multinational food manufacturer Nabisco and prior to that seven years in the accountancy profession
Date of appointment 29 April 2015
Committee membershipChair of the Audit Committee and a member of the Nomination Committee
Other current rolesIndependent Board member of Capri Holdings Limited Non-Executive Director of Hakluyt and Chief Executive Officer of Chanzo Limited
Other current rolesNon-Executive Director Senior Independent Director and Chair of the Audit Committee of Auto Trader Group plc
Matt BrittinNon-Executive Director
Skills and experienceMatt has extensive experience of running a high profile fast moving innovative digital business Since 2015 he has been responsible for Googlersquos business and operations in Europe the Middle East and Africa and hersquos been in leadership roles at Google since 2007 Prior to that Matt spent much of his career in media and marketing with particular interests in strategy commercial development and sales performance This included commercial and digital leadership roles in UK media
Date of appointment 27 January 2011
Committee membershipNomination Committee and Remuneration Committee
Other current rolesGooglersquos President ndash Europe Middle East and Africa and Director of The Media Trust
Brian Cassin Non-Executive Director
Skills and experienceBrian brings present day experience of running a FTSE40 group and of big data and analytics ndash topics of key importance to Sainsburyrsquos Brian joined Experian plc as Chief Financial Officer in April 2012 a post he held until his appointment as Chief Executive Officer in July 2014 Prior to this Brian spent his career in investment banking at Greenhill amp Co where he was Managing Director and Partner Brian has also held various roles at Baring Brothers International and at the London Stock Exchange
Date of appointment 1 April 2016
Committee membershipAudit Committee and Nomination Committee
Other current rolesChief Executive Officer of Experian plc
10
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jo Harlow Non-Executive Director
Skills and experienceJo brings a wealth of experience in consumer-facing businesses and in the telecoms and technology industry bothin the UK and internationally Jo spent 12 years in a variety of senior management roles with Nokia and Microsoft Prior to this she spent eight years at PampG and 11 years at Reebok in senior sales and marketing positions in both Europe and the US
Date of appointment 11 September 2017
Committee membershipChair of the Corporate Responsibility and Sustainability Committee and member of the Nomination Committee and Remuneration Committee
Life PresidentLord Sainsbury of Preston Candover KG
Other current rolesNon-Executive Director of InterContinental Hotels plc Non-Executive Director of Halmaplc and Member of the Supervisory Board of Ceconomy AG
11
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief Executive
Tim FallowfieldCompany Secretary amp Corporate Services Director
Kevin OrsquoByrne Chief Financial Officer
Jim BrownChief Executive Officer of Sainsburyrsquos Bank
Paul Mills-HicksFood Commercial Director
Angie RisleyGroup HR Director
Phil JordanGroup Chief InformationOfficer
Simon RobertsRetail and Operations Director
Clo MoriartyGroup Chief Digital Officer
12
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief ExecutiveSee Appendix page 9
Kevin OrsquoByrneChief Financial OfficerSee Appendix page 9
Tim FallowfieldCompany Secretary amp Corporate Services Director
Date of appointment September 2004
Skills and experienceTim joined Sainsburyrsquos in 2001 as Company Secretary and joined the Operating Board in September 2004 In addition to his role as Company Secretary Tim is responsible for the Corporate Services Division comprising Legal Services Data Governance Safety Shareholder Services Insurance and Central Security He chairs the Group Safety Committee and the Data Governance Committee Tim joined Sainsburyrsquos from Exelplc the global logistics company now part of DHL where he was Company Secretary and General Counsel He began his career at the international law firm Clifford Chance and is a qualified solicitor Tim is Chairman of the Disability Confident Business Leaders Group which works with Government in shaping the disability employment agenda and in raising awareness of the benefits of employing disabled people
Jim BrownCEO of Sainsburyrsquos Bank
Skills and experienceJim joined Sainsburyrsquos Bank as CEO in June 2019 and is also a member of the Sainsburyrsquos Group Operating Board He has held a number of senior international Financial Services roles - most recently for RBS in the UK as CEO of Williams and Glyn and prior to that CEO of Ulster Bank in Northern Ireland and the Republic of Ireland Before moving to Ireland he was based in Hong Kong and was CEO Retail and Commercial Banking Asia and the Middle East for RBS and ABN AMRO He has also been a member of the RBS Group Management Committee ABN AMRO Executive Group ABN AMRO Global Consumer Leadership Team and the RBSBank of China Joint Steering Committee Earlier in his career he held a number of senior executive roles for Citibank in Asia and Australia and New Zealand Jim has also held various Board positions including at Ulster Bank Saudi Hollandi Bank The Royal Bank of Scotland (China) Co Ltd and RBS (Pakistan) Ltd He is also a past President of the Institute of Banking in Ireland He is currently a Certified Bank Director
Date of appointment August 2019
Paul Mills-HicksFood Commercial Director
Skills and experiencePaul joined the Operating Board in May 2014 as Food Commercial Director having spent over ten years at Sainsburyrsquos He was closely involved in the formation and execution of the lsquoMaking Sainsburyrsquos Great Againrsquo strategy Following this he held a variety of roles in commercial strategy and finance most recently as Business Unit Director for Grocery Prior to Sainsburyrsquos Paul was European Controller at Marks and Spencer Group PLC and a Director at UBS Warburg
Date of appointment May 2014
13
APPENDIX Interim Results 201920 - November 2019
Operating Board
Angie RisleyGroup HR Director
Skills and experienceAngie was appointed Group HR Director and a member of the Operating Board in January 2013 with responsibility for human resources Angie is also a Director of Sainsburyrsquos Bank plc Angie was most recently Non-Executive Director and Chairman of the Remuneration Committee of Serco plc and prior to this was Group HR Director of Lloyds Banking Group and an Executive Director of Whitbread PLC with responsibility for HR and Corporate Social Responsibility Angie is currently Non-Executive Director and Chair of the Remuneration Committee at Smith amp Nephew plc
Date of appointment January 2013
Phil JordanGroup Chief Information Officer
Skills and experiencePhil joined the Board in January 2018 and has brought a fresh globalperspective on technology to the Operating Board in addition to a wealth of experience in digital data and business transformation Prior to joining Sainsburyrsquos Phil had a long and successful track record in telecommunications Most recently he was Global Chief Information Officer at Telefonica overseeing Digital Transformation and Information Technology and prior to that was Chief Information Officer for Vodafone UKIreland Phil has worked as a Non-Executive Advisor on Technology in the Investment amp Retail Banking sector and is currently a Non-Executive Director of TalkTalk Telecom Group PLC and chairs its Cyber-Security Committee
Date of appointment January 2018
Simon RobertsRetail and Operations Director
Skills and experienceSimon joined Sainsburyrsquos and the Operating Board in July 2017 as Central Retail amp Operations Director responsible for Stores Central operation and Logistics In his previous role he was Executive Vice President of Walgreens Boots Alliance and President of Boots with responsibility for commercial and retail operations across the UK and Ireland Prior to Boots Simon was at Marks and Spencer Group PLC where he held operational and customer leadership roles across stores divisions and central operations Simon is also the Non-Executive Chairman at the Institute ofCustomer Service
Date of appointment July 2017
Clodagh MoriartyGroup Chief Digital Officer
Skills and experienceClodagh was appointed Group Chief Digital Officer in June 2018 Clodagh leads the delivery of a consistent and first-rate digital experience for customers across Sainsburyrsquos Argos and Sainsburyrsquos BankClodagh joined Sainsburyrsquos in 2010 from Bain amp Co management consultants where she had gained experience working on a broad range of projects across multiple sectors and countries Following two years as Head of Strategy at Sainsburyrsquosshe moved into Food Commercial as Category Manager for Meal Solutions and then became Head of Online Trading spanning Food General Merchandise and Clothing before being promoted to Director of Online in 2016 In this role Clodagh was instrumental in driving innovation within Groceries Online and launching new initiatives including SmartShop and Chop Chop
Date of appointment June 2018
14
APPENDIX Interim Results 201920 - November 2019
Supplementary financial details
3 Financial calendarQ3 trading statement(15 weeks to 4 January 2020)
Preliminary results(52 weeks to 7 March 2020)
8 January 2020
30 April 2020
1 Weighted average number of shares
The interim dividend datesOrdinary shares
Ex-dividend 14 November 2019Record 15 November 2019Payment 20 December 2019
Product Quality Framework helps us fund investment
PQF cereals case study
BAU savings to offset cost inflation
Strategic cost transformation 5 year plan
Slide Number 43
Financial Services Priorities
Financial Services reshaping the portfolio
Financial Services key targets
Nectar
Slide Number 48
Digital
We will help our customers live well for less
Slide Number 51
Slide Number 52
Guidance for 201920
Retail sales
Sainsburyrsquos sales area and store numbers
Sainsburyrsquos store estate
Sainsburyrsquos investment programme
Retail margin
Group retail
Plc Board
Plc Board
Plc Board
Plc Board
Operating Board
Operating Board
Operating Board
Supplementary financial details
Contacts
Column1
201819
Grocery
19
GM
7
Clothing
1
To resize chart data range drag lower right corner of range
Grocery
GM
Clothing
41 Interim Results 201920 - November 2019
Drive efficiency
to invest in the customer
offer
4
BAU savings to offset cost inflation
Manages inflationary pressures
BAU savingsH1 201920
Procurement GNFR
Retail Technology Efficiencies
Retail HRRetail
management structures
Shrink Reduction
42 Interim Results 201920 - November 2019
Drive efficiency
to invest in the customer
offer
4
Strategic cost transformation 5 year plan
Converge Tackle fixed cost
End to end reviews
Retail Operations Marketing and Commercial Operations
Other central support
Logistics and Supply Chain
Project A
Project C
Project D
Shared Services BPO
Property strategy
Project BGNFR procurement
Capital prioritisation
Technology Digital and Corporate Services
pound250-pound350m
pound150-pound250m
pound400-pound600mExecution underway In planning Opportunities identified
pound5bn addressable cost base
43 Interim Results 201920 - November 2019
Grow connected
services
5
44 Interim Results 201920 - November 2019
Grow connected
services
5
Financial Services Priorities
To be the provider of financial services for loyal Sainsburyrsquos and Argos customers
An agile capital and cost efficient provider of simple mobile-led financial services
Vision
Objective
Priorities Reshape Simplify Strengthen
45 Interim Results 201920 - November 2019
Grow connected
services
5
Current Customer Base
Customer Credit Risk Balance Sheet Earnings
Argos Storecards 22m Prime Near Prime
Credit Cards 09m Prime
Personal Loans 05m Prime
Mortgages 9K Exit
Total Lending
Deposits 03m
Insurances 05m Very Low Risk
Travel Money 266 Sites
ATMs 1890
Financial Services reshaping the portfolio
46 Interim Results 201920 - November 2019
Grow connected
services
5
Increase connectivity and value for Group
Stop mortgage acquisition review back book options
No capital input from the Group from now1
Costincome c503 within 5 years
Double UPBT double digit ROCE within 5 years
Upstream cash within 5 years2
Financial Services key targets
Transform the cost base
Improve returns
Financial services cash generative
Reduce risk profile to Group
Stop putting cash in to Financial Services
2
4
6
3
1
5
Focus on Sainsburyrsquos customer base
1 Subject to regulatory changes requirements2 Subject to regulatory approval3 On a Group contribution basis
47 Interim Results 201920 - November 2019
Grow connected
services
5
Nectar
bull Biggest loyalty programme in the UK
bull Over 18 million collectors
bull Most recognised loyalty brand in the UK
bull Launch of Nectar digital- 21 million app users- Increase in overall Nectar participation- Increased levels of personalisation- 138000 new Nectar customers- 1 app on launch weekend
bull Coalition strengthened with addition of Esso in June 2019
48 Interim Results 201920 - November 2019
Provide a seamless customer
experience
6
49 Interim Results 201920 - November 2019
Provide a seamless customer
experience
6
Digital
bull Groceries Online sales penetration of 8- App accounts for over 20 of orders
bull 21 million digital Nectar app users
bull 14 million Argos Financial Services app downloads
bull Smartshop rollout in over 350 stores
Groceries online
Chop Chop
SmartShop
Universaldiscovery
Seamlessfinancialservices
Singlebasket
50 Interim Results 201920 - November 2019
We will help our customers live well for less
Confident in the core Integrated customer offer
One multi brand multi channel business
Strong cash generation supporting investment dividend and allowing deleverage
Financial flexibility and resilience
Sustainable cost reduction covering cost inflation and funding investment in our competitive offer
QampA
APPENDIX Interim Results 201920 - November 2019
Appendices
APPENDIX Interim Results 201920 - November 2019
Guidance for 201920
1
Spacebull Expect to open 2 new Sainsburyrsquos supermarkets and up to 15 convenience storesbull Expect to open around 25 Argos stores in Sainsburyrsquos (of which 11 are
relocations) resulting in around 305 Argos stores in supermarketsbull Expect to close 2 supermarkets around 25 convenience stores and around 20
Argos stores in FY201920 as part of announced property closure programme of 10-15 supermarkets 30-40 convenience stores and 60-70 Argos stores
Financial Servicesbull Financial services underlying operating profit expected to be cpound45m including a
cpound10m benefit as a result of a change in transfer pricing between Argos and Argos Financial Services
bull Financial Services non-underlying costs are expected to be around pound30mbull No further capital injections into the Bank are expected following pound35m in H1 201920
Depreciation and amortisationbull Expect underlying retail depreciation and amortisation of around pound12bn
including cpound500m right of use asset depreciation
CostsOperating cost inflationbull Cost inflation between 2 and 3Cost savingsbull Continue to deliver cost savings to at least offset the impact of cost inflation
Finance costsbull Net finance costs of around pound405m including pound320m lease interest in
201920 following the introduction of IFRS 16
One-off itemsbull In 201920 cash outflows as a result of items excluded from
underlying results should not exceed pound100mbull Property strategy programme one-off costs expected to be
pound230m-pound270m of which cash costs are pound30-40m
Dividendbull Sainsburyrsquos plans to change the full year dividend policy to 19x cover by
underlying earnings (versus 20x previously) to offset the dilutive (non cash) impact of IFRS 16 on underlying earnings
Capital expenditurebull Retail capital expenditure to be around pound550mbull Retail capital expenditure is expected to be around pound550m-pound600m per
annum over the medium term
Net debtbull Net debt before fair value movements on derivatives to reduce by at
least pound300m
Tax ratebull Underlying tax rate to be between 25 and 26
APPENDIX Interim Results 201920 - November 2019
Retail sales
1 Sales including VAT excluding fuel
LFL sales growth1
(10)
Sales from net new space1
04
Total sales growth1
(06)
Supermarkets2
(07)
Convenience20
Groceries Online
70
Channels
(01)(25)
(12)
2 Supermarket sales include Argos SiS sales FY 1819 16
pound139bn
pound103bnGrocery
pound30bnGeneralMerchandise
pound488mClothing
2
Chart1
201819
194
66
1
Sheet1
APPENDIX Interim Results 201920 - November 2019
Sainsburyrsquos sales area and store numbersAs at 21 September 2019
Sainsburyrsquos store estateAs at 21 September 2019
Sq ftsales area
82446
870
40001 to60000
20001 to40000
10000 to20000
Under10000 Total
Over60000
0122122
0197197
0175175
06767
824607
1431
Argos storesArgos in SainsburyrsquosArgos in HomebaseOtherArgos total store numbers
Habitat1
Collection points
594281
8-
883
16317
As at21 Sept 2019
Disposalsclosures
Newstores
As at9 March 2019
17--8
-1
(7)-
(2)-
(9)
-(36)
588288
6-
88216
282
ConvenienceSupermarketsTotal stores
Number of stores
Sq ftsales area
1929350
2279
40001 to60000
20001 to40000
10000 to20000
Under10000 Total
Over60000
-18441844
-58185818
-85018501
-46604660
19292117323102
ConvenienceSupermarketsTotal stores
Space by store size (lsquo000 sq ft)
Argos and Habitat store numbers
1 5 Habitat stores 11 Habitat stores in Sainsburys
4
APPENDIX Interim Results 201920 - November 2019
ClosureBitterne West
Sainsburyrsquos investment programme201920
Q1
Supermarkets ConvenienceNew storesMilton Keynes Brooklands District CentBromley High StLeeds Wike Ridge LaneSalford Harbour CityCanterbury High St
ReplacementMayfair Stratton St
ClosuresMayfairWarren St
Q1Q1Q1Q2Q2
Q2
Q1Q2
5
APPENDIX Interim Results 201920 - November 2019
Retail margin
Retail sales (inc VAT inc fuel)(exc VAT inc fuel)
Retail underlying EBITDAR1
Retail underlying EBITDAR margin 2
at constant fuel pricesRetail underlying operating profit3
Retail underlying operating margin 4
at constant fuel prices
1656714808
10677272
4373030
1661214856
11147575
4873333
030342
30 bps28 bps10333 bps32 bps
1 Retail underlying operating profit before net rental income of pound6 million and underlying depreciation and amortisation of pound636 million2 Retail underlying EBITDAR divided by underlying retail sales excluding VAT3 Retail underlying earnings before interest tax and Sainsburyrsquos underlying share of post-tax profit from joint ventures4 Retail underlying operating profit divided by underlying retail sales excluding VAT
poundm H1201920
H1201819
Change
6
APPENDIX Interim Results 201920 - November 2019
H1201920
H1201819
Group retail
Return on capital employed 1
Net debt to EBITDAR (times)23
Fixed charge cover (times)2
Underlying tax rate Core retail capex sales5
713126
26515
743326
25715
poundm
1 ROCE Return is defined as a 52 week rolling underlying profit before interest and tax Capital employed is defined as group net assets2 Net debt of pound6778 million includes lease obligations under IFRS 16 and perpetual securities treated as debt divided by Group underlying EBITDAR of pound2171 million calculated for a 52-week period to 21 September 20193 Group underlying EBITDAR divided by rent (both capital and interest) and net finance costs where interest on perpetual securities is treated as an underlying finance costs4 52 weeks to 22nd September 2018 is not available due to the implementation of IFRS 16 Comparatives therefore reflect the 52 weeks to 9th March 20195 Includes retail sales inc vat inc fuel
4
4
7
APPENDIX Interim Results 201920 - November 2019
Plc Board
Kevin OrsquoByrneChief Financial Officer
Mike Coupe Group Chief Executive
Dame Susan Rice Senior Independent Director
Matt BrittinNon-Executive Director
Jo HarlowNon-Executive Director
Brian CassinNon-Executive Director
David KeensNon-Executive Director
Jean Tomlin Non-Executive Director
Martin Scicluna Chairman
8
APPENDIX Interim Results 201920 - November 2019
Plc Board
Mike Coupe Group Chief Executive Officer
Skills and experienceAppointed Group Chief Executive Officer on 9 July 2014 Mike has been a member of the Operating Board since October 2004 Mike has vast retail industry experience in trading strategy marketing digital and online as well as multi-site store experience He joined Sainsburyrsquos from Big Food Group where he was a board director of Big Food Group PLC and Managing Director of Iceland Food Stores He previously worked for both Asda and Tesco PLC where he served in a variety of senior management roles
Date of appointment 1 August 2007Mike has served as an Executive Director since 1 August 2007 and as Chief Executive Officer since 9 July 2014
Committee membershipCorporate Responsibility and Sustainability Committee
Kevin OrsquoByrne Chief Financial Officer
Skills and experienceKevin brings to the Board a wealth of retail and finance experience Kevin was previously Chief Executive Officer of Poundland Group Limited until December 2016 and held executive roles at Kingfisher plc from 2008 to 2015 including Divisional Director UK China and Turkey Chief Executive Officer of BampQ UK amp Ireland and Group Finance Director He was previously Group Finance Director of Dixons Retail plc and European Finance Director of Quaker Oats He was a Non-Executive Director of Land Securities Group PLC from 2008 to September 2017 where he was Chairman of the Audit Committee and Senior Independent Director
Date of appointment 9 January 2017
Other current rolesNon-Executive Director of Greene King plc
Skills and experienceMartin brings a breadth of experience and leadership in both executive and non-executive roles His previous roles include positions as the Chairman of Great Portland Estates plc Senior Independent Director and Chair of the Audit Committee of Worldpay Inc and Non-Executive Director and Chair of the Audit Committee of Lloyds Banking Group plc He was a partner at Deloitte LLP for 26 years serving as Chairman from 1995 to 2007 where his clients included Dixons WH Smith Alliance Unichem and Cadburyrsquos
Other current rolesChairman of RSA Insurance Group plc
Martin Scicluna Chairman
Date of appointment 1 November 2018 Martin joined the Board as Chairman Designate and Non-Executive Director on 1 November 2018 He was appointed as Chairman of the Board on 10 March 2019
Committee membershipChair of the Nomination Committee
Dame Susan Rice Senior Independent Director
Skills and experienceSusan has extensive experience as a Non-Executive Director as well as in retail banking financial services leadership and sustainability Her career in retail bankingis particularly relevant to our ownership ofSainsburyrsquos Bank Previously Susan was a member of the First Ministerrsquos Council of Economic Advisors Managing Director of Lloyds Banking Group Scotland and was previously Chief Executive and then Chairman of Lloyds TSB Scotland plc She has also held a range of other non-executive directorships including at the Bank of England and SSE plc
Committee membershipChair of the Remuneration Committee and a member of the Nomination Committee
Date of appointment 1 June 2013
Other current rolesChair of Scottish Water and Business Stream Chair of the Scottish Fiscal Commission Non-Executive Director of the North American Income Trust C Hoare and Co and Senior Independent Director of the North American Income Trust
9
Other current rolesNon-Executive Director and Chairman of the Audit Committee of Centrica plc
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jean Tomlin Non-Executive Director
Skills and experienceJean has extensive experience and breadth of skills in human resources and corporate responsibility Jean was formerly Director of HR Workforce and Accreditation for The London OrganisingCommittee of the Olympic and Paralympic Games where she set the strategic direction to ensure the mobilisation of the combined 200000-strong workforce including paid staff volunteers and contractors which represented the recruitment and mobilisation of the largest peacetime workforce and set the industry standard for volunteering with the highly acclaimed Games She was previously Group HR Director at Marks and Spencer Group Plc HR Director and founder member of Egg plc and Sales amp Operations Director of Prudential Direct
Date of appointment 1 January 2013
Committee membershipAudit Committee Corporate Responsibility and Sustainability Committee and Nomination Committee
David Keens Non-Executive Director
Skills and experienceDavid has extensive retail experience and knowledge of consumer facing businesses together with his core skills in finance David was formerly Group Finance Director of next plc from 1991 to 2015 and their Group Treasurer from 1986 to 1991 Previous management experience includes nine years in the UK and overseas operations of multinational food manufacturer Nabisco and prior to that seven years in the accountancy profession
Date of appointment 29 April 2015
Committee membershipChair of the Audit Committee and a member of the Nomination Committee
Other current rolesIndependent Board member of Capri Holdings Limited Non-Executive Director of Hakluyt and Chief Executive Officer of Chanzo Limited
Other current rolesNon-Executive Director Senior Independent Director and Chair of the Audit Committee of Auto Trader Group plc
Matt BrittinNon-Executive Director
Skills and experienceMatt has extensive experience of running a high profile fast moving innovative digital business Since 2015 he has been responsible for Googlersquos business and operations in Europe the Middle East and Africa and hersquos been in leadership roles at Google since 2007 Prior to that Matt spent much of his career in media and marketing with particular interests in strategy commercial development and sales performance This included commercial and digital leadership roles in UK media
Date of appointment 27 January 2011
Committee membershipNomination Committee and Remuneration Committee
Other current rolesGooglersquos President ndash Europe Middle East and Africa and Director of The Media Trust
Brian Cassin Non-Executive Director
Skills and experienceBrian brings present day experience of running a FTSE40 group and of big data and analytics ndash topics of key importance to Sainsburyrsquos Brian joined Experian plc as Chief Financial Officer in April 2012 a post he held until his appointment as Chief Executive Officer in July 2014 Prior to this Brian spent his career in investment banking at Greenhill amp Co where he was Managing Director and Partner Brian has also held various roles at Baring Brothers International and at the London Stock Exchange
Date of appointment 1 April 2016
Committee membershipAudit Committee and Nomination Committee
Other current rolesChief Executive Officer of Experian plc
10
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jo Harlow Non-Executive Director
Skills and experienceJo brings a wealth of experience in consumer-facing businesses and in the telecoms and technology industry bothin the UK and internationally Jo spent 12 years in a variety of senior management roles with Nokia and Microsoft Prior to this she spent eight years at PampG and 11 years at Reebok in senior sales and marketing positions in both Europe and the US
Date of appointment 11 September 2017
Committee membershipChair of the Corporate Responsibility and Sustainability Committee and member of the Nomination Committee and Remuneration Committee
Life PresidentLord Sainsbury of Preston Candover KG
Other current rolesNon-Executive Director of InterContinental Hotels plc Non-Executive Director of Halmaplc and Member of the Supervisory Board of Ceconomy AG
11
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief Executive
Tim FallowfieldCompany Secretary amp Corporate Services Director
Kevin OrsquoByrne Chief Financial Officer
Jim BrownChief Executive Officer of Sainsburyrsquos Bank
Paul Mills-HicksFood Commercial Director
Angie RisleyGroup HR Director
Phil JordanGroup Chief InformationOfficer
Simon RobertsRetail and Operations Director
Clo MoriartyGroup Chief Digital Officer
12
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief ExecutiveSee Appendix page 9
Kevin OrsquoByrneChief Financial OfficerSee Appendix page 9
Tim FallowfieldCompany Secretary amp Corporate Services Director
Date of appointment September 2004
Skills and experienceTim joined Sainsburyrsquos in 2001 as Company Secretary and joined the Operating Board in September 2004 In addition to his role as Company Secretary Tim is responsible for the Corporate Services Division comprising Legal Services Data Governance Safety Shareholder Services Insurance and Central Security He chairs the Group Safety Committee and the Data Governance Committee Tim joined Sainsburyrsquos from Exelplc the global logistics company now part of DHL where he was Company Secretary and General Counsel He began his career at the international law firm Clifford Chance and is a qualified solicitor Tim is Chairman of the Disability Confident Business Leaders Group which works with Government in shaping the disability employment agenda and in raising awareness of the benefits of employing disabled people
Jim BrownCEO of Sainsburyrsquos Bank
Skills and experienceJim joined Sainsburyrsquos Bank as CEO in June 2019 and is also a member of the Sainsburyrsquos Group Operating Board He has held a number of senior international Financial Services roles - most recently for RBS in the UK as CEO of Williams and Glyn and prior to that CEO of Ulster Bank in Northern Ireland and the Republic of Ireland Before moving to Ireland he was based in Hong Kong and was CEO Retail and Commercial Banking Asia and the Middle East for RBS and ABN AMRO He has also been a member of the RBS Group Management Committee ABN AMRO Executive Group ABN AMRO Global Consumer Leadership Team and the RBSBank of China Joint Steering Committee Earlier in his career he held a number of senior executive roles for Citibank in Asia and Australia and New Zealand Jim has also held various Board positions including at Ulster Bank Saudi Hollandi Bank The Royal Bank of Scotland (China) Co Ltd and RBS (Pakistan) Ltd He is also a past President of the Institute of Banking in Ireland He is currently a Certified Bank Director
Date of appointment August 2019
Paul Mills-HicksFood Commercial Director
Skills and experiencePaul joined the Operating Board in May 2014 as Food Commercial Director having spent over ten years at Sainsburyrsquos He was closely involved in the formation and execution of the lsquoMaking Sainsburyrsquos Great Againrsquo strategy Following this he held a variety of roles in commercial strategy and finance most recently as Business Unit Director for Grocery Prior to Sainsburyrsquos Paul was European Controller at Marks and Spencer Group PLC and a Director at UBS Warburg
Date of appointment May 2014
13
APPENDIX Interim Results 201920 - November 2019
Operating Board
Angie RisleyGroup HR Director
Skills and experienceAngie was appointed Group HR Director and a member of the Operating Board in January 2013 with responsibility for human resources Angie is also a Director of Sainsburyrsquos Bank plc Angie was most recently Non-Executive Director and Chairman of the Remuneration Committee of Serco plc and prior to this was Group HR Director of Lloyds Banking Group and an Executive Director of Whitbread PLC with responsibility for HR and Corporate Social Responsibility Angie is currently Non-Executive Director and Chair of the Remuneration Committee at Smith amp Nephew plc
Date of appointment January 2013
Phil JordanGroup Chief Information Officer
Skills and experiencePhil joined the Board in January 2018 and has brought a fresh globalperspective on technology to the Operating Board in addition to a wealth of experience in digital data and business transformation Prior to joining Sainsburyrsquos Phil had a long and successful track record in telecommunications Most recently he was Global Chief Information Officer at Telefonica overseeing Digital Transformation and Information Technology and prior to that was Chief Information Officer for Vodafone UKIreland Phil has worked as a Non-Executive Advisor on Technology in the Investment amp Retail Banking sector and is currently a Non-Executive Director of TalkTalk Telecom Group PLC and chairs its Cyber-Security Committee
Date of appointment January 2018
Simon RobertsRetail and Operations Director
Skills and experienceSimon joined Sainsburyrsquos and the Operating Board in July 2017 as Central Retail amp Operations Director responsible for Stores Central operation and Logistics In his previous role he was Executive Vice President of Walgreens Boots Alliance and President of Boots with responsibility for commercial and retail operations across the UK and Ireland Prior to Boots Simon was at Marks and Spencer Group PLC where he held operational and customer leadership roles across stores divisions and central operations Simon is also the Non-Executive Chairman at the Institute ofCustomer Service
Date of appointment July 2017
Clodagh MoriartyGroup Chief Digital Officer
Skills and experienceClodagh was appointed Group Chief Digital Officer in June 2018 Clodagh leads the delivery of a consistent and first-rate digital experience for customers across Sainsburyrsquos Argos and Sainsburyrsquos BankClodagh joined Sainsburyrsquos in 2010 from Bain amp Co management consultants where she had gained experience working on a broad range of projects across multiple sectors and countries Following two years as Head of Strategy at Sainsburyrsquosshe moved into Food Commercial as Category Manager for Meal Solutions and then became Head of Online Trading spanning Food General Merchandise and Clothing before being promoted to Director of Online in 2016 In this role Clodagh was instrumental in driving innovation within Groceries Online and launching new initiatives including SmartShop and Chop Chop
Date of appointment June 2018
14
APPENDIX Interim Results 201920 - November 2019
Supplementary financial details
3 Financial calendarQ3 trading statement(15 weeks to 4 January 2020)
Preliminary results(52 weeks to 7 March 2020)
8 January 2020
30 April 2020
1 Weighted average number of shares
The interim dividend datesOrdinary shares
Ex-dividend 14 November 2019Record 15 November 2019Payment 20 December 2019
Product Quality Framework helps us fund investment
PQF cereals case study
BAU savings to offset cost inflation
Strategic cost transformation 5 year plan
Slide Number 43
Financial Services Priorities
Financial Services reshaping the portfolio
Financial Services key targets
Nectar
Slide Number 48
Digital
We will help our customers live well for less
Slide Number 51
Slide Number 52
Guidance for 201920
Retail sales
Sainsburyrsquos sales area and store numbers
Sainsburyrsquos store estate
Sainsburyrsquos investment programme
Retail margin
Group retail
Plc Board
Plc Board
Plc Board
Plc Board
Operating Board
Operating Board
Operating Board
Supplementary financial details
Contacts
Column1
201819
Grocery
19
GM
7
Clothing
1
To resize chart data range drag lower right corner of range
Grocery
GM
Clothing
42 Interim Results 201920 - November 2019
Drive efficiency
to invest in the customer
offer
4
Strategic cost transformation 5 year plan
Converge Tackle fixed cost
End to end reviews
Retail Operations Marketing and Commercial Operations
Other central support
Logistics and Supply Chain
Project A
Project C
Project D
Shared Services BPO
Property strategy
Project BGNFR procurement
Capital prioritisation
Technology Digital and Corporate Services
pound250-pound350m
pound150-pound250m
pound400-pound600mExecution underway In planning Opportunities identified
pound5bn addressable cost base
43 Interim Results 201920 - November 2019
Grow connected
services
5
44 Interim Results 201920 - November 2019
Grow connected
services
5
Financial Services Priorities
To be the provider of financial services for loyal Sainsburyrsquos and Argos customers
An agile capital and cost efficient provider of simple mobile-led financial services
Vision
Objective
Priorities Reshape Simplify Strengthen
45 Interim Results 201920 - November 2019
Grow connected
services
5
Current Customer Base
Customer Credit Risk Balance Sheet Earnings
Argos Storecards 22m Prime Near Prime
Credit Cards 09m Prime
Personal Loans 05m Prime
Mortgages 9K Exit
Total Lending
Deposits 03m
Insurances 05m Very Low Risk
Travel Money 266 Sites
ATMs 1890
Financial Services reshaping the portfolio
46 Interim Results 201920 - November 2019
Grow connected
services
5
Increase connectivity and value for Group
Stop mortgage acquisition review back book options
No capital input from the Group from now1
Costincome c503 within 5 years
Double UPBT double digit ROCE within 5 years
Upstream cash within 5 years2
Financial Services key targets
Transform the cost base
Improve returns
Financial services cash generative
Reduce risk profile to Group
Stop putting cash in to Financial Services
2
4
6
3
1
5
Focus on Sainsburyrsquos customer base
1 Subject to regulatory changes requirements2 Subject to regulatory approval3 On a Group contribution basis
47 Interim Results 201920 - November 2019
Grow connected
services
5
Nectar
bull Biggest loyalty programme in the UK
bull Over 18 million collectors
bull Most recognised loyalty brand in the UK
bull Launch of Nectar digital- 21 million app users- Increase in overall Nectar participation- Increased levels of personalisation- 138000 new Nectar customers- 1 app on launch weekend
bull Coalition strengthened with addition of Esso in June 2019
48 Interim Results 201920 - November 2019
Provide a seamless customer
experience
6
49 Interim Results 201920 - November 2019
Provide a seamless customer
experience
6
Digital
bull Groceries Online sales penetration of 8- App accounts for over 20 of orders
bull 21 million digital Nectar app users
bull 14 million Argos Financial Services app downloads
bull Smartshop rollout in over 350 stores
Groceries online
Chop Chop
SmartShop
Universaldiscovery
Seamlessfinancialservices
Singlebasket
50 Interim Results 201920 - November 2019
We will help our customers live well for less
Confident in the core Integrated customer offer
One multi brand multi channel business
Strong cash generation supporting investment dividend and allowing deleverage
Financial flexibility and resilience
Sustainable cost reduction covering cost inflation and funding investment in our competitive offer
QampA
APPENDIX Interim Results 201920 - November 2019
Appendices
APPENDIX Interim Results 201920 - November 2019
Guidance for 201920
1
Spacebull Expect to open 2 new Sainsburyrsquos supermarkets and up to 15 convenience storesbull Expect to open around 25 Argos stores in Sainsburyrsquos (of which 11 are
relocations) resulting in around 305 Argos stores in supermarketsbull Expect to close 2 supermarkets around 25 convenience stores and around 20
Argos stores in FY201920 as part of announced property closure programme of 10-15 supermarkets 30-40 convenience stores and 60-70 Argos stores
Financial Servicesbull Financial services underlying operating profit expected to be cpound45m including a
cpound10m benefit as a result of a change in transfer pricing between Argos and Argos Financial Services
bull Financial Services non-underlying costs are expected to be around pound30mbull No further capital injections into the Bank are expected following pound35m in H1 201920
Depreciation and amortisationbull Expect underlying retail depreciation and amortisation of around pound12bn
including cpound500m right of use asset depreciation
CostsOperating cost inflationbull Cost inflation between 2 and 3Cost savingsbull Continue to deliver cost savings to at least offset the impact of cost inflation
Finance costsbull Net finance costs of around pound405m including pound320m lease interest in
201920 following the introduction of IFRS 16
One-off itemsbull In 201920 cash outflows as a result of items excluded from
underlying results should not exceed pound100mbull Property strategy programme one-off costs expected to be
pound230m-pound270m of which cash costs are pound30-40m
Dividendbull Sainsburyrsquos plans to change the full year dividend policy to 19x cover by
underlying earnings (versus 20x previously) to offset the dilutive (non cash) impact of IFRS 16 on underlying earnings
Capital expenditurebull Retail capital expenditure to be around pound550mbull Retail capital expenditure is expected to be around pound550m-pound600m per
annum over the medium term
Net debtbull Net debt before fair value movements on derivatives to reduce by at
least pound300m
Tax ratebull Underlying tax rate to be between 25 and 26
APPENDIX Interim Results 201920 - November 2019
Retail sales
1 Sales including VAT excluding fuel
LFL sales growth1
(10)
Sales from net new space1
04
Total sales growth1
(06)
Supermarkets2
(07)
Convenience20
Groceries Online
70
Channels
(01)(25)
(12)
2 Supermarket sales include Argos SiS sales FY 1819 16
pound139bn
pound103bnGrocery
pound30bnGeneralMerchandise
pound488mClothing
2
Chart1
201819
194
66
1
Sheet1
APPENDIX Interim Results 201920 - November 2019
Sainsburyrsquos sales area and store numbersAs at 21 September 2019
Sainsburyrsquos store estateAs at 21 September 2019
Sq ftsales area
82446
870
40001 to60000
20001 to40000
10000 to20000
Under10000 Total
Over60000
0122122
0197197
0175175
06767
824607
1431
Argos storesArgos in SainsburyrsquosArgos in HomebaseOtherArgos total store numbers
Habitat1
Collection points
594281
8-
883
16317
As at21 Sept 2019
Disposalsclosures
Newstores
As at9 March 2019
17--8
-1
(7)-
(2)-
(9)
-(36)
588288
6-
88216
282
ConvenienceSupermarketsTotal stores
Number of stores
Sq ftsales area
1929350
2279
40001 to60000
20001 to40000
10000 to20000
Under10000 Total
Over60000
-18441844
-58185818
-85018501
-46604660
19292117323102
ConvenienceSupermarketsTotal stores
Space by store size (lsquo000 sq ft)
Argos and Habitat store numbers
1 5 Habitat stores 11 Habitat stores in Sainsburys
4
APPENDIX Interim Results 201920 - November 2019
ClosureBitterne West
Sainsburyrsquos investment programme201920
Q1
Supermarkets ConvenienceNew storesMilton Keynes Brooklands District CentBromley High StLeeds Wike Ridge LaneSalford Harbour CityCanterbury High St
ReplacementMayfair Stratton St
ClosuresMayfairWarren St
Q1Q1Q1Q2Q2
Q2
Q1Q2
5
APPENDIX Interim Results 201920 - November 2019
Retail margin
Retail sales (inc VAT inc fuel)(exc VAT inc fuel)
Retail underlying EBITDAR1
Retail underlying EBITDAR margin 2
at constant fuel pricesRetail underlying operating profit3
Retail underlying operating margin 4
at constant fuel prices
1656714808
10677272
4373030
1661214856
11147575
4873333
030342
30 bps28 bps10333 bps32 bps
1 Retail underlying operating profit before net rental income of pound6 million and underlying depreciation and amortisation of pound636 million2 Retail underlying EBITDAR divided by underlying retail sales excluding VAT3 Retail underlying earnings before interest tax and Sainsburyrsquos underlying share of post-tax profit from joint ventures4 Retail underlying operating profit divided by underlying retail sales excluding VAT
poundm H1201920
H1201819
Change
6
APPENDIX Interim Results 201920 - November 2019
H1201920
H1201819
Group retail
Return on capital employed 1
Net debt to EBITDAR (times)23
Fixed charge cover (times)2
Underlying tax rate Core retail capex sales5
713126
26515
743326
25715
poundm
1 ROCE Return is defined as a 52 week rolling underlying profit before interest and tax Capital employed is defined as group net assets2 Net debt of pound6778 million includes lease obligations under IFRS 16 and perpetual securities treated as debt divided by Group underlying EBITDAR of pound2171 million calculated for a 52-week period to 21 September 20193 Group underlying EBITDAR divided by rent (both capital and interest) and net finance costs where interest on perpetual securities is treated as an underlying finance costs4 52 weeks to 22nd September 2018 is not available due to the implementation of IFRS 16 Comparatives therefore reflect the 52 weeks to 9th March 20195 Includes retail sales inc vat inc fuel
4
4
7
APPENDIX Interim Results 201920 - November 2019
Plc Board
Kevin OrsquoByrneChief Financial Officer
Mike Coupe Group Chief Executive
Dame Susan Rice Senior Independent Director
Matt BrittinNon-Executive Director
Jo HarlowNon-Executive Director
Brian CassinNon-Executive Director
David KeensNon-Executive Director
Jean Tomlin Non-Executive Director
Martin Scicluna Chairman
8
APPENDIX Interim Results 201920 - November 2019
Plc Board
Mike Coupe Group Chief Executive Officer
Skills and experienceAppointed Group Chief Executive Officer on 9 July 2014 Mike has been a member of the Operating Board since October 2004 Mike has vast retail industry experience in trading strategy marketing digital and online as well as multi-site store experience He joined Sainsburyrsquos from Big Food Group where he was a board director of Big Food Group PLC and Managing Director of Iceland Food Stores He previously worked for both Asda and Tesco PLC where he served in a variety of senior management roles
Date of appointment 1 August 2007Mike has served as an Executive Director since 1 August 2007 and as Chief Executive Officer since 9 July 2014
Committee membershipCorporate Responsibility and Sustainability Committee
Kevin OrsquoByrne Chief Financial Officer
Skills and experienceKevin brings to the Board a wealth of retail and finance experience Kevin was previously Chief Executive Officer of Poundland Group Limited until December 2016 and held executive roles at Kingfisher plc from 2008 to 2015 including Divisional Director UK China and Turkey Chief Executive Officer of BampQ UK amp Ireland and Group Finance Director He was previously Group Finance Director of Dixons Retail plc and European Finance Director of Quaker Oats He was a Non-Executive Director of Land Securities Group PLC from 2008 to September 2017 where he was Chairman of the Audit Committee and Senior Independent Director
Date of appointment 9 January 2017
Other current rolesNon-Executive Director of Greene King plc
Skills and experienceMartin brings a breadth of experience and leadership in both executive and non-executive roles His previous roles include positions as the Chairman of Great Portland Estates plc Senior Independent Director and Chair of the Audit Committee of Worldpay Inc and Non-Executive Director and Chair of the Audit Committee of Lloyds Banking Group plc He was a partner at Deloitte LLP for 26 years serving as Chairman from 1995 to 2007 where his clients included Dixons WH Smith Alliance Unichem and Cadburyrsquos
Other current rolesChairman of RSA Insurance Group plc
Martin Scicluna Chairman
Date of appointment 1 November 2018 Martin joined the Board as Chairman Designate and Non-Executive Director on 1 November 2018 He was appointed as Chairman of the Board on 10 March 2019
Committee membershipChair of the Nomination Committee
Dame Susan Rice Senior Independent Director
Skills and experienceSusan has extensive experience as a Non-Executive Director as well as in retail banking financial services leadership and sustainability Her career in retail bankingis particularly relevant to our ownership ofSainsburyrsquos Bank Previously Susan was a member of the First Ministerrsquos Council of Economic Advisors Managing Director of Lloyds Banking Group Scotland and was previously Chief Executive and then Chairman of Lloyds TSB Scotland plc She has also held a range of other non-executive directorships including at the Bank of England and SSE plc
Committee membershipChair of the Remuneration Committee and a member of the Nomination Committee
Date of appointment 1 June 2013
Other current rolesChair of Scottish Water and Business Stream Chair of the Scottish Fiscal Commission Non-Executive Director of the North American Income Trust C Hoare and Co and Senior Independent Director of the North American Income Trust
9
Other current rolesNon-Executive Director and Chairman of the Audit Committee of Centrica plc
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jean Tomlin Non-Executive Director
Skills and experienceJean has extensive experience and breadth of skills in human resources and corporate responsibility Jean was formerly Director of HR Workforce and Accreditation for The London OrganisingCommittee of the Olympic and Paralympic Games where she set the strategic direction to ensure the mobilisation of the combined 200000-strong workforce including paid staff volunteers and contractors which represented the recruitment and mobilisation of the largest peacetime workforce and set the industry standard for volunteering with the highly acclaimed Games She was previously Group HR Director at Marks and Spencer Group Plc HR Director and founder member of Egg plc and Sales amp Operations Director of Prudential Direct
Date of appointment 1 January 2013
Committee membershipAudit Committee Corporate Responsibility and Sustainability Committee and Nomination Committee
David Keens Non-Executive Director
Skills and experienceDavid has extensive retail experience and knowledge of consumer facing businesses together with his core skills in finance David was formerly Group Finance Director of next plc from 1991 to 2015 and their Group Treasurer from 1986 to 1991 Previous management experience includes nine years in the UK and overseas operations of multinational food manufacturer Nabisco and prior to that seven years in the accountancy profession
Date of appointment 29 April 2015
Committee membershipChair of the Audit Committee and a member of the Nomination Committee
Other current rolesIndependent Board member of Capri Holdings Limited Non-Executive Director of Hakluyt and Chief Executive Officer of Chanzo Limited
Other current rolesNon-Executive Director Senior Independent Director and Chair of the Audit Committee of Auto Trader Group plc
Matt BrittinNon-Executive Director
Skills and experienceMatt has extensive experience of running a high profile fast moving innovative digital business Since 2015 he has been responsible for Googlersquos business and operations in Europe the Middle East and Africa and hersquos been in leadership roles at Google since 2007 Prior to that Matt spent much of his career in media and marketing with particular interests in strategy commercial development and sales performance This included commercial and digital leadership roles in UK media
Date of appointment 27 January 2011
Committee membershipNomination Committee and Remuneration Committee
Other current rolesGooglersquos President ndash Europe Middle East and Africa and Director of The Media Trust
Brian Cassin Non-Executive Director
Skills and experienceBrian brings present day experience of running a FTSE40 group and of big data and analytics ndash topics of key importance to Sainsburyrsquos Brian joined Experian plc as Chief Financial Officer in April 2012 a post he held until his appointment as Chief Executive Officer in July 2014 Prior to this Brian spent his career in investment banking at Greenhill amp Co where he was Managing Director and Partner Brian has also held various roles at Baring Brothers International and at the London Stock Exchange
Date of appointment 1 April 2016
Committee membershipAudit Committee and Nomination Committee
Other current rolesChief Executive Officer of Experian plc
10
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jo Harlow Non-Executive Director
Skills and experienceJo brings a wealth of experience in consumer-facing businesses and in the telecoms and technology industry bothin the UK and internationally Jo spent 12 years in a variety of senior management roles with Nokia and Microsoft Prior to this she spent eight years at PampG and 11 years at Reebok in senior sales and marketing positions in both Europe and the US
Date of appointment 11 September 2017
Committee membershipChair of the Corporate Responsibility and Sustainability Committee and member of the Nomination Committee and Remuneration Committee
Life PresidentLord Sainsbury of Preston Candover KG
Other current rolesNon-Executive Director of InterContinental Hotels plc Non-Executive Director of Halmaplc and Member of the Supervisory Board of Ceconomy AG
11
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief Executive
Tim FallowfieldCompany Secretary amp Corporate Services Director
Kevin OrsquoByrne Chief Financial Officer
Jim BrownChief Executive Officer of Sainsburyrsquos Bank
Paul Mills-HicksFood Commercial Director
Angie RisleyGroup HR Director
Phil JordanGroup Chief InformationOfficer
Simon RobertsRetail and Operations Director
Clo MoriartyGroup Chief Digital Officer
12
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief ExecutiveSee Appendix page 9
Kevin OrsquoByrneChief Financial OfficerSee Appendix page 9
Tim FallowfieldCompany Secretary amp Corporate Services Director
Date of appointment September 2004
Skills and experienceTim joined Sainsburyrsquos in 2001 as Company Secretary and joined the Operating Board in September 2004 In addition to his role as Company Secretary Tim is responsible for the Corporate Services Division comprising Legal Services Data Governance Safety Shareholder Services Insurance and Central Security He chairs the Group Safety Committee and the Data Governance Committee Tim joined Sainsburyrsquos from Exelplc the global logistics company now part of DHL where he was Company Secretary and General Counsel He began his career at the international law firm Clifford Chance and is a qualified solicitor Tim is Chairman of the Disability Confident Business Leaders Group which works with Government in shaping the disability employment agenda and in raising awareness of the benefits of employing disabled people
Jim BrownCEO of Sainsburyrsquos Bank
Skills and experienceJim joined Sainsburyrsquos Bank as CEO in June 2019 and is also a member of the Sainsburyrsquos Group Operating Board He has held a number of senior international Financial Services roles - most recently for RBS in the UK as CEO of Williams and Glyn and prior to that CEO of Ulster Bank in Northern Ireland and the Republic of Ireland Before moving to Ireland he was based in Hong Kong and was CEO Retail and Commercial Banking Asia and the Middle East for RBS and ABN AMRO He has also been a member of the RBS Group Management Committee ABN AMRO Executive Group ABN AMRO Global Consumer Leadership Team and the RBSBank of China Joint Steering Committee Earlier in his career he held a number of senior executive roles for Citibank in Asia and Australia and New Zealand Jim has also held various Board positions including at Ulster Bank Saudi Hollandi Bank The Royal Bank of Scotland (China) Co Ltd and RBS (Pakistan) Ltd He is also a past President of the Institute of Banking in Ireland He is currently a Certified Bank Director
Date of appointment August 2019
Paul Mills-HicksFood Commercial Director
Skills and experiencePaul joined the Operating Board in May 2014 as Food Commercial Director having spent over ten years at Sainsburyrsquos He was closely involved in the formation and execution of the lsquoMaking Sainsburyrsquos Great Againrsquo strategy Following this he held a variety of roles in commercial strategy and finance most recently as Business Unit Director for Grocery Prior to Sainsburyrsquos Paul was European Controller at Marks and Spencer Group PLC and a Director at UBS Warburg
Date of appointment May 2014
13
APPENDIX Interim Results 201920 - November 2019
Operating Board
Angie RisleyGroup HR Director
Skills and experienceAngie was appointed Group HR Director and a member of the Operating Board in January 2013 with responsibility for human resources Angie is also a Director of Sainsburyrsquos Bank plc Angie was most recently Non-Executive Director and Chairman of the Remuneration Committee of Serco plc and prior to this was Group HR Director of Lloyds Banking Group and an Executive Director of Whitbread PLC with responsibility for HR and Corporate Social Responsibility Angie is currently Non-Executive Director and Chair of the Remuneration Committee at Smith amp Nephew plc
Date of appointment January 2013
Phil JordanGroup Chief Information Officer
Skills and experiencePhil joined the Board in January 2018 and has brought a fresh globalperspective on technology to the Operating Board in addition to a wealth of experience in digital data and business transformation Prior to joining Sainsburyrsquos Phil had a long and successful track record in telecommunications Most recently he was Global Chief Information Officer at Telefonica overseeing Digital Transformation and Information Technology and prior to that was Chief Information Officer for Vodafone UKIreland Phil has worked as a Non-Executive Advisor on Technology in the Investment amp Retail Banking sector and is currently a Non-Executive Director of TalkTalk Telecom Group PLC and chairs its Cyber-Security Committee
Date of appointment January 2018
Simon RobertsRetail and Operations Director
Skills and experienceSimon joined Sainsburyrsquos and the Operating Board in July 2017 as Central Retail amp Operations Director responsible for Stores Central operation and Logistics In his previous role he was Executive Vice President of Walgreens Boots Alliance and President of Boots with responsibility for commercial and retail operations across the UK and Ireland Prior to Boots Simon was at Marks and Spencer Group PLC where he held operational and customer leadership roles across stores divisions and central operations Simon is also the Non-Executive Chairman at the Institute ofCustomer Service
Date of appointment July 2017
Clodagh MoriartyGroup Chief Digital Officer
Skills and experienceClodagh was appointed Group Chief Digital Officer in June 2018 Clodagh leads the delivery of a consistent and first-rate digital experience for customers across Sainsburyrsquos Argos and Sainsburyrsquos BankClodagh joined Sainsburyrsquos in 2010 from Bain amp Co management consultants where she had gained experience working on a broad range of projects across multiple sectors and countries Following two years as Head of Strategy at Sainsburyrsquosshe moved into Food Commercial as Category Manager for Meal Solutions and then became Head of Online Trading spanning Food General Merchandise and Clothing before being promoted to Director of Online in 2016 In this role Clodagh was instrumental in driving innovation within Groceries Online and launching new initiatives including SmartShop and Chop Chop
Date of appointment June 2018
14
APPENDIX Interim Results 201920 - November 2019
Supplementary financial details
3 Financial calendarQ3 trading statement(15 weeks to 4 January 2020)
Preliminary results(52 weeks to 7 March 2020)
8 January 2020
30 April 2020
1 Weighted average number of shares
The interim dividend datesOrdinary shares
Ex-dividend 14 November 2019Record 15 November 2019Payment 20 December 2019
Product Quality Framework helps us fund investment
PQF cereals case study
BAU savings to offset cost inflation
Strategic cost transformation 5 year plan
Slide Number 43
Financial Services Priorities
Financial Services reshaping the portfolio
Financial Services key targets
Nectar
Slide Number 48
Digital
We will help our customers live well for less
Slide Number 51
Slide Number 52
Guidance for 201920
Retail sales
Sainsburyrsquos sales area and store numbers
Sainsburyrsquos store estate
Sainsburyrsquos investment programme
Retail margin
Group retail
Plc Board
Plc Board
Plc Board
Plc Board
Operating Board
Operating Board
Operating Board
Supplementary financial details
Contacts
Column1
201819
Grocery
19
GM
7
Clothing
1
To resize chart data range drag lower right corner of range
Grocery
GM
Clothing
43 Interim Results 201920 - November 2019
Grow connected
services
5
44 Interim Results 201920 - November 2019
Grow connected
services
5
Financial Services Priorities
To be the provider of financial services for loyal Sainsburyrsquos and Argos customers
An agile capital and cost efficient provider of simple mobile-led financial services
Vision
Objective
Priorities Reshape Simplify Strengthen
45 Interim Results 201920 - November 2019
Grow connected
services
5
Current Customer Base
Customer Credit Risk Balance Sheet Earnings
Argos Storecards 22m Prime Near Prime
Credit Cards 09m Prime
Personal Loans 05m Prime
Mortgages 9K Exit
Total Lending
Deposits 03m
Insurances 05m Very Low Risk
Travel Money 266 Sites
ATMs 1890
Financial Services reshaping the portfolio
46 Interim Results 201920 - November 2019
Grow connected
services
5
Increase connectivity and value for Group
Stop mortgage acquisition review back book options
No capital input from the Group from now1
Costincome c503 within 5 years
Double UPBT double digit ROCE within 5 years
Upstream cash within 5 years2
Financial Services key targets
Transform the cost base
Improve returns
Financial services cash generative
Reduce risk profile to Group
Stop putting cash in to Financial Services
2
4
6
3
1
5
Focus on Sainsburyrsquos customer base
1 Subject to regulatory changes requirements2 Subject to regulatory approval3 On a Group contribution basis
47 Interim Results 201920 - November 2019
Grow connected
services
5
Nectar
bull Biggest loyalty programme in the UK
bull Over 18 million collectors
bull Most recognised loyalty brand in the UK
bull Launch of Nectar digital- 21 million app users- Increase in overall Nectar participation- Increased levels of personalisation- 138000 new Nectar customers- 1 app on launch weekend
bull Coalition strengthened with addition of Esso in June 2019
48 Interim Results 201920 - November 2019
Provide a seamless customer
experience
6
49 Interim Results 201920 - November 2019
Provide a seamless customer
experience
6
Digital
bull Groceries Online sales penetration of 8- App accounts for over 20 of orders
bull 21 million digital Nectar app users
bull 14 million Argos Financial Services app downloads
bull Smartshop rollout in over 350 stores
Groceries online
Chop Chop
SmartShop
Universaldiscovery
Seamlessfinancialservices
Singlebasket
50 Interim Results 201920 - November 2019
We will help our customers live well for less
Confident in the core Integrated customer offer
One multi brand multi channel business
Strong cash generation supporting investment dividend and allowing deleverage
Financial flexibility and resilience
Sustainable cost reduction covering cost inflation and funding investment in our competitive offer
QampA
APPENDIX Interim Results 201920 - November 2019
Appendices
APPENDIX Interim Results 201920 - November 2019
Guidance for 201920
1
Spacebull Expect to open 2 new Sainsburyrsquos supermarkets and up to 15 convenience storesbull Expect to open around 25 Argos stores in Sainsburyrsquos (of which 11 are
relocations) resulting in around 305 Argos stores in supermarketsbull Expect to close 2 supermarkets around 25 convenience stores and around 20
Argos stores in FY201920 as part of announced property closure programme of 10-15 supermarkets 30-40 convenience stores and 60-70 Argos stores
Financial Servicesbull Financial services underlying operating profit expected to be cpound45m including a
cpound10m benefit as a result of a change in transfer pricing between Argos and Argos Financial Services
bull Financial Services non-underlying costs are expected to be around pound30mbull No further capital injections into the Bank are expected following pound35m in H1 201920
Depreciation and amortisationbull Expect underlying retail depreciation and amortisation of around pound12bn
including cpound500m right of use asset depreciation
CostsOperating cost inflationbull Cost inflation between 2 and 3Cost savingsbull Continue to deliver cost savings to at least offset the impact of cost inflation
Finance costsbull Net finance costs of around pound405m including pound320m lease interest in
201920 following the introduction of IFRS 16
One-off itemsbull In 201920 cash outflows as a result of items excluded from
underlying results should not exceed pound100mbull Property strategy programme one-off costs expected to be
pound230m-pound270m of which cash costs are pound30-40m
Dividendbull Sainsburyrsquos plans to change the full year dividend policy to 19x cover by
underlying earnings (versus 20x previously) to offset the dilutive (non cash) impact of IFRS 16 on underlying earnings
Capital expenditurebull Retail capital expenditure to be around pound550mbull Retail capital expenditure is expected to be around pound550m-pound600m per
annum over the medium term
Net debtbull Net debt before fair value movements on derivatives to reduce by at
least pound300m
Tax ratebull Underlying tax rate to be between 25 and 26
APPENDIX Interim Results 201920 - November 2019
Retail sales
1 Sales including VAT excluding fuel
LFL sales growth1
(10)
Sales from net new space1
04
Total sales growth1
(06)
Supermarkets2
(07)
Convenience20
Groceries Online
70
Channels
(01)(25)
(12)
2 Supermarket sales include Argos SiS sales FY 1819 16
pound139bn
pound103bnGrocery
pound30bnGeneralMerchandise
pound488mClothing
2
Chart1
201819
194
66
1
Sheet1
APPENDIX Interim Results 201920 - November 2019
Sainsburyrsquos sales area and store numbersAs at 21 September 2019
Sainsburyrsquos store estateAs at 21 September 2019
Sq ftsales area
82446
870
40001 to60000
20001 to40000
10000 to20000
Under10000 Total
Over60000
0122122
0197197
0175175
06767
824607
1431
Argos storesArgos in SainsburyrsquosArgos in HomebaseOtherArgos total store numbers
Habitat1
Collection points
594281
8-
883
16317
As at21 Sept 2019
Disposalsclosures
Newstores
As at9 March 2019
17--8
-1
(7)-
(2)-
(9)
-(36)
588288
6-
88216
282
ConvenienceSupermarketsTotal stores
Number of stores
Sq ftsales area
1929350
2279
40001 to60000
20001 to40000
10000 to20000
Under10000 Total
Over60000
-18441844
-58185818
-85018501
-46604660
19292117323102
ConvenienceSupermarketsTotal stores
Space by store size (lsquo000 sq ft)
Argos and Habitat store numbers
1 5 Habitat stores 11 Habitat stores in Sainsburys
4
APPENDIX Interim Results 201920 - November 2019
ClosureBitterne West
Sainsburyrsquos investment programme201920
Q1
Supermarkets ConvenienceNew storesMilton Keynes Brooklands District CentBromley High StLeeds Wike Ridge LaneSalford Harbour CityCanterbury High St
ReplacementMayfair Stratton St
ClosuresMayfairWarren St
Q1Q1Q1Q2Q2
Q2
Q1Q2
5
APPENDIX Interim Results 201920 - November 2019
Retail margin
Retail sales (inc VAT inc fuel)(exc VAT inc fuel)
Retail underlying EBITDAR1
Retail underlying EBITDAR margin 2
at constant fuel pricesRetail underlying operating profit3
Retail underlying operating margin 4
at constant fuel prices
1656714808
10677272
4373030
1661214856
11147575
4873333
030342
30 bps28 bps10333 bps32 bps
1 Retail underlying operating profit before net rental income of pound6 million and underlying depreciation and amortisation of pound636 million2 Retail underlying EBITDAR divided by underlying retail sales excluding VAT3 Retail underlying earnings before interest tax and Sainsburyrsquos underlying share of post-tax profit from joint ventures4 Retail underlying operating profit divided by underlying retail sales excluding VAT
poundm H1201920
H1201819
Change
6
APPENDIX Interim Results 201920 - November 2019
H1201920
H1201819
Group retail
Return on capital employed 1
Net debt to EBITDAR (times)23
Fixed charge cover (times)2
Underlying tax rate Core retail capex sales5
713126
26515
743326
25715
poundm
1 ROCE Return is defined as a 52 week rolling underlying profit before interest and tax Capital employed is defined as group net assets2 Net debt of pound6778 million includes lease obligations under IFRS 16 and perpetual securities treated as debt divided by Group underlying EBITDAR of pound2171 million calculated for a 52-week period to 21 September 20193 Group underlying EBITDAR divided by rent (both capital and interest) and net finance costs where interest on perpetual securities is treated as an underlying finance costs4 52 weeks to 22nd September 2018 is not available due to the implementation of IFRS 16 Comparatives therefore reflect the 52 weeks to 9th March 20195 Includes retail sales inc vat inc fuel
4
4
7
APPENDIX Interim Results 201920 - November 2019
Plc Board
Kevin OrsquoByrneChief Financial Officer
Mike Coupe Group Chief Executive
Dame Susan Rice Senior Independent Director
Matt BrittinNon-Executive Director
Jo HarlowNon-Executive Director
Brian CassinNon-Executive Director
David KeensNon-Executive Director
Jean Tomlin Non-Executive Director
Martin Scicluna Chairman
8
APPENDIX Interim Results 201920 - November 2019
Plc Board
Mike Coupe Group Chief Executive Officer
Skills and experienceAppointed Group Chief Executive Officer on 9 July 2014 Mike has been a member of the Operating Board since October 2004 Mike has vast retail industry experience in trading strategy marketing digital and online as well as multi-site store experience He joined Sainsburyrsquos from Big Food Group where he was a board director of Big Food Group PLC and Managing Director of Iceland Food Stores He previously worked for both Asda and Tesco PLC where he served in a variety of senior management roles
Date of appointment 1 August 2007Mike has served as an Executive Director since 1 August 2007 and as Chief Executive Officer since 9 July 2014
Committee membershipCorporate Responsibility and Sustainability Committee
Kevin OrsquoByrne Chief Financial Officer
Skills and experienceKevin brings to the Board a wealth of retail and finance experience Kevin was previously Chief Executive Officer of Poundland Group Limited until December 2016 and held executive roles at Kingfisher plc from 2008 to 2015 including Divisional Director UK China and Turkey Chief Executive Officer of BampQ UK amp Ireland and Group Finance Director He was previously Group Finance Director of Dixons Retail plc and European Finance Director of Quaker Oats He was a Non-Executive Director of Land Securities Group PLC from 2008 to September 2017 where he was Chairman of the Audit Committee and Senior Independent Director
Date of appointment 9 January 2017
Other current rolesNon-Executive Director of Greene King plc
Skills and experienceMartin brings a breadth of experience and leadership in both executive and non-executive roles His previous roles include positions as the Chairman of Great Portland Estates plc Senior Independent Director and Chair of the Audit Committee of Worldpay Inc and Non-Executive Director and Chair of the Audit Committee of Lloyds Banking Group plc He was a partner at Deloitte LLP for 26 years serving as Chairman from 1995 to 2007 where his clients included Dixons WH Smith Alliance Unichem and Cadburyrsquos
Other current rolesChairman of RSA Insurance Group plc
Martin Scicluna Chairman
Date of appointment 1 November 2018 Martin joined the Board as Chairman Designate and Non-Executive Director on 1 November 2018 He was appointed as Chairman of the Board on 10 March 2019
Committee membershipChair of the Nomination Committee
Dame Susan Rice Senior Independent Director
Skills and experienceSusan has extensive experience as a Non-Executive Director as well as in retail banking financial services leadership and sustainability Her career in retail bankingis particularly relevant to our ownership ofSainsburyrsquos Bank Previously Susan was a member of the First Ministerrsquos Council of Economic Advisors Managing Director of Lloyds Banking Group Scotland and was previously Chief Executive and then Chairman of Lloyds TSB Scotland plc She has also held a range of other non-executive directorships including at the Bank of England and SSE plc
Committee membershipChair of the Remuneration Committee and a member of the Nomination Committee
Date of appointment 1 June 2013
Other current rolesChair of Scottish Water and Business Stream Chair of the Scottish Fiscal Commission Non-Executive Director of the North American Income Trust C Hoare and Co and Senior Independent Director of the North American Income Trust
9
Other current rolesNon-Executive Director and Chairman of the Audit Committee of Centrica plc
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jean Tomlin Non-Executive Director
Skills and experienceJean has extensive experience and breadth of skills in human resources and corporate responsibility Jean was formerly Director of HR Workforce and Accreditation for The London OrganisingCommittee of the Olympic and Paralympic Games where she set the strategic direction to ensure the mobilisation of the combined 200000-strong workforce including paid staff volunteers and contractors which represented the recruitment and mobilisation of the largest peacetime workforce and set the industry standard for volunteering with the highly acclaimed Games She was previously Group HR Director at Marks and Spencer Group Plc HR Director and founder member of Egg plc and Sales amp Operations Director of Prudential Direct
Date of appointment 1 January 2013
Committee membershipAudit Committee Corporate Responsibility and Sustainability Committee and Nomination Committee
David Keens Non-Executive Director
Skills and experienceDavid has extensive retail experience and knowledge of consumer facing businesses together with his core skills in finance David was formerly Group Finance Director of next plc from 1991 to 2015 and their Group Treasurer from 1986 to 1991 Previous management experience includes nine years in the UK and overseas operations of multinational food manufacturer Nabisco and prior to that seven years in the accountancy profession
Date of appointment 29 April 2015
Committee membershipChair of the Audit Committee and a member of the Nomination Committee
Other current rolesIndependent Board member of Capri Holdings Limited Non-Executive Director of Hakluyt and Chief Executive Officer of Chanzo Limited
Other current rolesNon-Executive Director Senior Independent Director and Chair of the Audit Committee of Auto Trader Group plc
Matt BrittinNon-Executive Director
Skills and experienceMatt has extensive experience of running a high profile fast moving innovative digital business Since 2015 he has been responsible for Googlersquos business and operations in Europe the Middle East and Africa and hersquos been in leadership roles at Google since 2007 Prior to that Matt spent much of his career in media and marketing with particular interests in strategy commercial development and sales performance This included commercial and digital leadership roles in UK media
Date of appointment 27 January 2011
Committee membershipNomination Committee and Remuneration Committee
Other current rolesGooglersquos President ndash Europe Middle East and Africa and Director of The Media Trust
Brian Cassin Non-Executive Director
Skills and experienceBrian brings present day experience of running a FTSE40 group and of big data and analytics ndash topics of key importance to Sainsburyrsquos Brian joined Experian plc as Chief Financial Officer in April 2012 a post he held until his appointment as Chief Executive Officer in July 2014 Prior to this Brian spent his career in investment banking at Greenhill amp Co where he was Managing Director and Partner Brian has also held various roles at Baring Brothers International and at the London Stock Exchange
Date of appointment 1 April 2016
Committee membershipAudit Committee and Nomination Committee
Other current rolesChief Executive Officer of Experian plc
10
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jo Harlow Non-Executive Director
Skills and experienceJo brings a wealth of experience in consumer-facing businesses and in the telecoms and technology industry bothin the UK and internationally Jo spent 12 years in a variety of senior management roles with Nokia and Microsoft Prior to this she spent eight years at PampG and 11 years at Reebok in senior sales and marketing positions in both Europe and the US
Date of appointment 11 September 2017
Committee membershipChair of the Corporate Responsibility and Sustainability Committee and member of the Nomination Committee and Remuneration Committee
Life PresidentLord Sainsbury of Preston Candover KG
Other current rolesNon-Executive Director of InterContinental Hotels plc Non-Executive Director of Halmaplc and Member of the Supervisory Board of Ceconomy AG
11
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief Executive
Tim FallowfieldCompany Secretary amp Corporate Services Director
Kevin OrsquoByrne Chief Financial Officer
Jim BrownChief Executive Officer of Sainsburyrsquos Bank
Paul Mills-HicksFood Commercial Director
Angie RisleyGroup HR Director
Phil JordanGroup Chief InformationOfficer
Simon RobertsRetail and Operations Director
Clo MoriartyGroup Chief Digital Officer
12
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief ExecutiveSee Appendix page 9
Kevin OrsquoByrneChief Financial OfficerSee Appendix page 9
Tim FallowfieldCompany Secretary amp Corporate Services Director
Date of appointment September 2004
Skills and experienceTim joined Sainsburyrsquos in 2001 as Company Secretary and joined the Operating Board in September 2004 In addition to his role as Company Secretary Tim is responsible for the Corporate Services Division comprising Legal Services Data Governance Safety Shareholder Services Insurance and Central Security He chairs the Group Safety Committee and the Data Governance Committee Tim joined Sainsburyrsquos from Exelplc the global logistics company now part of DHL where he was Company Secretary and General Counsel He began his career at the international law firm Clifford Chance and is a qualified solicitor Tim is Chairman of the Disability Confident Business Leaders Group which works with Government in shaping the disability employment agenda and in raising awareness of the benefits of employing disabled people
Jim BrownCEO of Sainsburyrsquos Bank
Skills and experienceJim joined Sainsburyrsquos Bank as CEO in June 2019 and is also a member of the Sainsburyrsquos Group Operating Board He has held a number of senior international Financial Services roles - most recently for RBS in the UK as CEO of Williams and Glyn and prior to that CEO of Ulster Bank in Northern Ireland and the Republic of Ireland Before moving to Ireland he was based in Hong Kong and was CEO Retail and Commercial Banking Asia and the Middle East for RBS and ABN AMRO He has also been a member of the RBS Group Management Committee ABN AMRO Executive Group ABN AMRO Global Consumer Leadership Team and the RBSBank of China Joint Steering Committee Earlier in his career he held a number of senior executive roles for Citibank in Asia and Australia and New Zealand Jim has also held various Board positions including at Ulster Bank Saudi Hollandi Bank The Royal Bank of Scotland (China) Co Ltd and RBS (Pakistan) Ltd He is also a past President of the Institute of Banking in Ireland He is currently a Certified Bank Director
Date of appointment August 2019
Paul Mills-HicksFood Commercial Director
Skills and experiencePaul joined the Operating Board in May 2014 as Food Commercial Director having spent over ten years at Sainsburyrsquos He was closely involved in the formation and execution of the lsquoMaking Sainsburyrsquos Great Againrsquo strategy Following this he held a variety of roles in commercial strategy and finance most recently as Business Unit Director for Grocery Prior to Sainsburyrsquos Paul was European Controller at Marks and Spencer Group PLC and a Director at UBS Warburg
Date of appointment May 2014
13
APPENDIX Interim Results 201920 - November 2019
Operating Board
Angie RisleyGroup HR Director
Skills and experienceAngie was appointed Group HR Director and a member of the Operating Board in January 2013 with responsibility for human resources Angie is also a Director of Sainsburyrsquos Bank plc Angie was most recently Non-Executive Director and Chairman of the Remuneration Committee of Serco plc and prior to this was Group HR Director of Lloyds Banking Group and an Executive Director of Whitbread PLC with responsibility for HR and Corporate Social Responsibility Angie is currently Non-Executive Director and Chair of the Remuneration Committee at Smith amp Nephew plc
Date of appointment January 2013
Phil JordanGroup Chief Information Officer
Skills and experiencePhil joined the Board in January 2018 and has brought a fresh globalperspective on technology to the Operating Board in addition to a wealth of experience in digital data and business transformation Prior to joining Sainsburyrsquos Phil had a long and successful track record in telecommunications Most recently he was Global Chief Information Officer at Telefonica overseeing Digital Transformation and Information Technology and prior to that was Chief Information Officer for Vodafone UKIreland Phil has worked as a Non-Executive Advisor on Technology in the Investment amp Retail Banking sector and is currently a Non-Executive Director of TalkTalk Telecom Group PLC and chairs its Cyber-Security Committee
Date of appointment January 2018
Simon RobertsRetail and Operations Director
Skills and experienceSimon joined Sainsburyrsquos and the Operating Board in July 2017 as Central Retail amp Operations Director responsible for Stores Central operation and Logistics In his previous role he was Executive Vice President of Walgreens Boots Alliance and President of Boots with responsibility for commercial and retail operations across the UK and Ireland Prior to Boots Simon was at Marks and Spencer Group PLC where he held operational and customer leadership roles across stores divisions and central operations Simon is also the Non-Executive Chairman at the Institute ofCustomer Service
Date of appointment July 2017
Clodagh MoriartyGroup Chief Digital Officer
Skills and experienceClodagh was appointed Group Chief Digital Officer in June 2018 Clodagh leads the delivery of a consistent and first-rate digital experience for customers across Sainsburyrsquos Argos and Sainsburyrsquos BankClodagh joined Sainsburyrsquos in 2010 from Bain amp Co management consultants where she had gained experience working on a broad range of projects across multiple sectors and countries Following two years as Head of Strategy at Sainsburyrsquosshe moved into Food Commercial as Category Manager for Meal Solutions and then became Head of Online Trading spanning Food General Merchandise and Clothing before being promoted to Director of Online in 2016 In this role Clodagh was instrumental in driving innovation within Groceries Online and launching new initiatives including SmartShop and Chop Chop
Date of appointment June 2018
14
APPENDIX Interim Results 201920 - November 2019
Supplementary financial details
3 Financial calendarQ3 trading statement(15 weeks to 4 January 2020)
Preliminary results(52 weeks to 7 March 2020)
8 January 2020
30 April 2020
1 Weighted average number of shares
The interim dividend datesOrdinary shares
Ex-dividend 14 November 2019Record 15 November 2019Payment 20 December 2019
Product Quality Framework helps us fund investment
PQF cereals case study
BAU savings to offset cost inflation
Strategic cost transformation 5 year plan
Slide Number 43
Financial Services Priorities
Financial Services reshaping the portfolio
Financial Services key targets
Nectar
Slide Number 48
Digital
We will help our customers live well for less
Slide Number 51
Slide Number 52
Guidance for 201920
Retail sales
Sainsburyrsquos sales area and store numbers
Sainsburyrsquos store estate
Sainsburyrsquos investment programme
Retail margin
Group retail
Plc Board
Plc Board
Plc Board
Plc Board
Operating Board
Operating Board
Operating Board
Supplementary financial details
Contacts
Column1
201819
Grocery
19
GM
7
Clothing
1
To resize chart data range drag lower right corner of range
Grocery
GM
Clothing
44 Interim Results 201920 - November 2019
Grow connected
services
5
Financial Services Priorities
To be the provider of financial services for loyal Sainsburyrsquos and Argos customers
An agile capital and cost efficient provider of simple mobile-led financial services
Vision
Objective
Priorities Reshape Simplify Strengthen
45 Interim Results 201920 - November 2019
Grow connected
services
5
Current Customer Base
Customer Credit Risk Balance Sheet Earnings
Argos Storecards 22m Prime Near Prime
Credit Cards 09m Prime
Personal Loans 05m Prime
Mortgages 9K Exit
Total Lending
Deposits 03m
Insurances 05m Very Low Risk
Travel Money 266 Sites
ATMs 1890
Financial Services reshaping the portfolio
46 Interim Results 201920 - November 2019
Grow connected
services
5
Increase connectivity and value for Group
Stop mortgage acquisition review back book options
No capital input from the Group from now1
Costincome c503 within 5 years
Double UPBT double digit ROCE within 5 years
Upstream cash within 5 years2
Financial Services key targets
Transform the cost base
Improve returns
Financial services cash generative
Reduce risk profile to Group
Stop putting cash in to Financial Services
2
4
6
3
1
5
Focus on Sainsburyrsquos customer base
1 Subject to regulatory changes requirements2 Subject to regulatory approval3 On a Group contribution basis
47 Interim Results 201920 - November 2019
Grow connected
services
5
Nectar
bull Biggest loyalty programme in the UK
bull Over 18 million collectors
bull Most recognised loyalty brand in the UK
bull Launch of Nectar digital- 21 million app users- Increase in overall Nectar participation- Increased levels of personalisation- 138000 new Nectar customers- 1 app on launch weekend
bull Coalition strengthened with addition of Esso in June 2019
48 Interim Results 201920 - November 2019
Provide a seamless customer
experience
6
49 Interim Results 201920 - November 2019
Provide a seamless customer
experience
6
Digital
bull Groceries Online sales penetration of 8- App accounts for over 20 of orders
bull 21 million digital Nectar app users
bull 14 million Argos Financial Services app downloads
bull Smartshop rollout in over 350 stores
Groceries online
Chop Chop
SmartShop
Universaldiscovery
Seamlessfinancialservices
Singlebasket
50 Interim Results 201920 - November 2019
We will help our customers live well for less
Confident in the core Integrated customer offer
One multi brand multi channel business
Strong cash generation supporting investment dividend and allowing deleverage
Financial flexibility and resilience
Sustainable cost reduction covering cost inflation and funding investment in our competitive offer
QampA
APPENDIX Interim Results 201920 - November 2019
Appendices
APPENDIX Interim Results 201920 - November 2019
Guidance for 201920
1
Spacebull Expect to open 2 new Sainsburyrsquos supermarkets and up to 15 convenience storesbull Expect to open around 25 Argos stores in Sainsburyrsquos (of which 11 are
relocations) resulting in around 305 Argos stores in supermarketsbull Expect to close 2 supermarkets around 25 convenience stores and around 20
Argos stores in FY201920 as part of announced property closure programme of 10-15 supermarkets 30-40 convenience stores and 60-70 Argos stores
Financial Servicesbull Financial services underlying operating profit expected to be cpound45m including a
cpound10m benefit as a result of a change in transfer pricing between Argos and Argos Financial Services
bull Financial Services non-underlying costs are expected to be around pound30mbull No further capital injections into the Bank are expected following pound35m in H1 201920
Depreciation and amortisationbull Expect underlying retail depreciation and amortisation of around pound12bn
including cpound500m right of use asset depreciation
CostsOperating cost inflationbull Cost inflation between 2 and 3Cost savingsbull Continue to deliver cost savings to at least offset the impact of cost inflation
Finance costsbull Net finance costs of around pound405m including pound320m lease interest in
201920 following the introduction of IFRS 16
One-off itemsbull In 201920 cash outflows as a result of items excluded from
underlying results should not exceed pound100mbull Property strategy programme one-off costs expected to be
pound230m-pound270m of which cash costs are pound30-40m
Dividendbull Sainsburyrsquos plans to change the full year dividend policy to 19x cover by
underlying earnings (versus 20x previously) to offset the dilutive (non cash) impact of IFRS 16 on underlying earnings
Capital expenditurebull Retail capital expenditure to be around pound550mbull Retail capital expenditure is expected to be around pound550m-pound600m per
annum over the medium term
Net debtbull Net debt before fair value movements on derivatives to reduce by at
least pound300m
Tax ratebull Underlying tax rate to be between 25 and 26
APPENDIX Interim Results 201920 - November 2019
Retail sales
1 Sales including VAT excluding fuel
LFL sales growth1
(10)
Sales from net new space1
04
Total sales growth1
(06)
Supermarkets2
(07)
Convenience20
Groceries Online
70
Channels
(01)(25)
(12)
2 Supermarket sales include Argos SiS sales FY 1819 16
pound139bn
pound103bnGrocery
pound30bnGeneralMerchandise
pound488mClothing
2
Chart1
201819
194
66
1
Sheet1
APPENDIX Interim Results 201920 - November 2019
Sainsburyrsquos sales area and store numbersAs at 21 September 2019
Sainsburyrsquos store estateAs at 21 September 2019
Sq ftsales area
82446
870
40001 to60000
20001 to40000
10000 to20000
Under10000 Total
Over60000
0122122
0197197
0175175
06767
824607
1431
Argos storesArgos in SainsburyrsquosArgos in HomebaseOtherArgos total store numbers
Habitat1
Collection points
594281
8-
883
16317
As at21 Sept 2019
Disposalsclosures
Newstores
As at9 March 2019
17--8
-1
(7)-
(2)-
(9)
-(36)
588288
6-
88216
282
ConvenienceSupermarketsTotal stores
Number of stores
Sq ftsales area
1929350
2279
40001 to60000
20001 to40000
10000 to20000
Under10000 Total
Over60000
-18441844
-58185818
-85018501
-46604660
19292117323102
ConvenienceSupermarketsTotal stores
Space by store size (lsquo000 sq ft)
Argos and Habitat store numbers
1 5 Habitat stores 11 Habitat stores in Sainsburys
4
APPENDIX Interim Results 201920 - November 2019
ClosureBitterne West
Sainsburyrsquos investment programme201920
Q1
Supermarkets ConvenienceNew storesMilton Keynes Brooklands District CentBromley High StLeeds Wike Ridge LaneSalford Harbour CityCanterbury High St
ReplacementMayfair Stratton St
ClosuresMayfairWarren St
Q1Q1Q1Q2Q2
Q2
Q1Q2
5
APPENDIX Interim Results 201920 - November 2019
Retail margin
Retail sales (inc VAT inc fuel)(exc VAT inc fuel)
Retail underlying EBITDAR1
Retail underlying EBITDAR margin 2
at constant fuel pricesRetail underlying operating profit3
Retail underlying operating margin 4
at constant fuel prices
1656714808
10677272
4373030
1661214856
11147575
4873333
030342
30 bps28 bps10333 bps32 bps
1 Retail underlying operating profit before net rental income of pound6 million and underlying depreciation and amortisation of pound636 million2 Retail underlying EBITDAR divided by underlying retail sales excluding VAT3 Retail underlying earnings before interest tax and Sainsburyrsquos underlying share of post-tax profit from joint ventures4 Retail underlying operating profit divided by underlying retail sales excluding VAT
poundm H1201920
H1201819
Change
6
APPENDIX Interim Results 201920 - November 2019
H1201920
H1201819
Group retail
Return on capital employed 1
Net debt to EBITDAR (times)23
Fixed charge cover (times)2
Underlying tax rate Core retail capex sales5
713126
26515
743326
25715
poundm
1 ROCE Return is defined as a 52 week rolling underlying profit before interest and tax Capital employed is defined as group net assets2 Net debt of pound6778 million includes lease obligations under IFRS 16 and perpetual securities treated as debt divided by Group underlying EBITDAR of pound2171 million calculated for a 52-week period to 21 September 20193 Group underlying EBITDAR divided by rent (both capital and interest) and net finance costs where interest on perpetual securities is treated as an underlying finance costs4 52 weeks to 22nd September 2018 is not available due to the implementation of IFRS 16 Comparatives therefore reflect the 52 weeks to 9th March 20195 Includes retail sales inc vat inc fuel
4
4
7
APPENDIX Interim Results 201920 - November 2019
Plc Board
Kevin OrsquoByrneChief Financial Officer
Mike Coupe Group Chief Executive
Dame Susan Rice Senior Independent Director
Matt BrittinNon-Executive Director
Jo HarlowNon-Executive Director
Brian CassinNon-Executive Director
David KeensNon-Executive Director
Jean Tomlin Non-Executive Director
Martin Scicluna Chairman
8
APPENDIX Interim Results 201920 - November 2019
Plc Board
Mike Coupe Group Chief Executive Officer
Skills and experienceAppointed Group Chief Executive Officer on 9 July 2014 Mike has been a member of the Operating Board since October 2004 Mike has vast retail industry experience in trading strategy marketing digital and online as well as multi-site store experience He joined Sainsburyrsquos from Big Food Group where he was a board director of Big Food Group PLC and Managing Director of Iceland Food Stores He previously worked for both Asda and Tesco PLC where he served in a variety of senior management roles
Date of appointment 1 August 2007Mike has served as an Executive Director since 1 August 2007 and as Chief Executive Officer since 9 July 2014
Committee membershipCorporate Responsibility and Sustainability Committee
Kevin OrsquoByrne Chief Financial Officer
Skills and experienceKevin brings to the Board a wealth of retail and finance experience Kevin was previously Chief Executive Officer of Poundland Group Limited until December 2016 and held executive roles at Kingfisher plc from 2008 to 2015 including Divisional Director UK China and Turkey Chief Executive Officer of BampQ UK amp Ireland and Group Finance Director He was previously Group Finance Director of Dixons Retail plc and European Finance Director of Quaker Oats He was a Non-Executive Director of Land Securities Group PLC from 2008 to September 2017 where he was Chairman of the Audit Committee and Senior Independent Director
Date of appointment 9 January 2017
Other current rolesNon-Executive Director of Greene King plc
Skills and experienceMartin brings a breadth of experience and leadership in both executive and non-executive roles His previous roles include positions as the Chairman of Great Portland Estates plc Senior Independent Director and Chair of the Audit Committee of Worldpay Inc and Non-Executive Director and Chair of the Audit Committee of Lloyds Banking Group plc He was a partner at Deloitte LLP for 26 years serving as Chairman from 1995 to 2007 where his clients included Dixons WH Smith Alliance Unichem and Cadburyrsquos
Other current rolesChairman of RSA Insurance Group plc
Martin Scicluna Chairman
Date of appointment 1 November 2018 Martin joined the Board as Chairman Designate and Non-Executive Director on 1 November 2018 He was appointed as Chairman of the Board on 10 March 2019
Committee membershipChair of the Nomination Committee
Dame Susan Rice Senior Independent Director
Skills and experienceSusan has extensive experience as a Non-Executive Director as well as in retail banking financial services leadership and sustainability Her career in retail bankingis particularly relevant to our ownership ofSainsburyrsquos Bank Previously Susan was a member of the First Ministerrsquos Council of Economic Advisors Managing Director of Lloyds Banking Group Scotland and was previously Chief Executive and then Chairman of Lloyds TSB Scotland plc She has also held a range of other non-executive directorships including at the Bank of England and SSE plc
Committee membershipChair of the Remuneration Committee and a member of the Nomination Committee
Date of appointment 1 June 2013
Other current rolesChair of Scottish Water and Business Stream Chair of the Scottish Fiscal Commission Non-Executive Director of the North American Income Trust C Hoare and Co and Senior Independent Director of the North American Income Trust
9
Other current rolesNon-Executive Director and Chairman of the Audit Committee of Centrica plc
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jean Tomlin Non-Executive Director
Skills and experienceJean has extensive experience and breadth of skills in human resources and corporate responsibility Jean was formerly Director of HR Workforce and Accreditation for The London OrganisingCommittee of the Olympic and Paralympic Games where she set the strategic direction to ensure the mobilisation of the combined 200000-strong workforce including paid staff volunteers and contractors which represented the recruitment and mobilisation of the largest peacetime workforce and set the industry standard for volunteering with the highly acclaimed Games She was previously Group HR Director at Marks and Spencer Group Plc HR Director and founder member of Egg plc and Sales amp Operations Director of Prudential Direct
Date of appointment 1 January 2013
Committee membershipAudit Committee Corporate Responsibility and Sustainability Committee and Nomination Committee
David Keens Non-Executive Director
Skills and experienceDavid has extensive retail experience and knowledge of consumer facing businesses together with his core skills in finance David was formerly Group Finance Director of next plc from 1991 to 2015 and their Group Treasurer from 1986 to 1991 Previous management experience includes nine years in the UK and overseas operations of multinational food manufacturer Nabisco and prior to that seven years in the accountancy profession
Date of appointment 29 April 2015
Committee membershipChair of the Audit Committee and a member of the Nomination Committee
Other current rolesIndependent Board member of Capri Holdings Limited Non-Executive Director of Hakluyt and Chief Executive Officer of Chanzo Limited
Other current rolesNon-Executive Director Senior Independent Director and Chair of the Audit Committee of Auto Trader Group plc
Matt BrittinNon-Executive Director
Skills and experienceMatt has extensive experience of running a high profile fast moving innovative digital business Since 2015 he has been responsible for Googlersquos business and operations in Europe the Middle East and Africa and hersquos been in leadership roles at Google since 2007 Prior to that Matt spent much of his career in media and marketing with particular interests in strategy commercial development and sales performance This included commercial and digital leadership roles in UK media
Date of appointment 27 January 2011
Committee membershipNomination Committee and Remuneration Committee
Other current rolesGooglersquos President ndash Europe Middle East and Africa and Director of The Media Trust
Brian Cassin Non-Executive Director
Skills and experienceBrian brings present day experience of running a FTSE40 group and of big data and analytics ndash topics of key importance to Sainsburyrsquos Brian joined Experian plc as Chief Financial Officer in April 2012 a post he held until his appointment as Chief Executive Officer in July 2014 Prior to this Brian spent his career in investment banking at Greenhill amp Co where he was Managing Director and Partner Brian has also held various roles at Baring Brothers International and at the London Stock Exchange
Date of appointment 1 April 2016
Committee membershipAudit Committee and Nomination Committee
Other current rolesChief Executive Officer of Experian plc
10
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jo Harlow Non-Executive Director
Skills and experienceJo brings a wealth of experience in consumer-facing businesses and in the telecoms and technology industry bothin the UK and internationally Jo spent 12 years in a variety of senior management roles with Nokia and Microsoft Prior to this she spent eight years at PampG and 11 years at Reebok in senior sales and marketing positions in both Europe and the US
Date of appointment 11 September 2017
Committee membershipChair of the Corporate Responsibility and Sustainability Committee and member of the Nomination Committee and Remuneration Committee
Life PresidentLord Sainsbury of Preston Candover KG
Other current rolesNon-Executive Director of InterContinental Hotels plc Non-Executive Director of Halmaplc and Member of the Supervisory Board of Ceconomy AG
11
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief Executive
Tim FallowfieldCompany Secretary amp Corporate Services Director
Kevin OrsquoByrne Chief Financial Officer
Jim BrownChief Executive Officer of Sainsburyrsquos Bank
Paul Mills-HicksFood Commercial Director
Angie RisleyGroup HR Director
Phil JordanGroup Chief InformationOfficer
Simon RobertsRetail and Operations Director
Clo MoriartyGroup Chief Digital Officer
12
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief ExecutiveSee Appendix page 9
Kevin OrsquoByrneChief Financial OfficerSee Appendix page 9
Tim FallowfieldCompany Secretary amp Corporate Services Director
Date of appointment September 2004
Skills and experienceTim joined Sainsburyrsquos in 2001 as Company Secretary and joined the Operating Board in September 2004 In addition to his role as Company Secretary Tim is responsible for the Corporate Services Division comprising Legal Services Data Governance Safety Shareholder Services Insurance and Central Security He chairs the Group Safety Committee and the Data Governance Committee Tim joined Sainsburyrsquos from Exelplc the global logistics company now part of DHL where he was Company Secretary and General Counsel He began his career at the international law firm Clifford Chance and is a qualified solicitor Tim is Chairman of the Disability Confident Business Leaders Group which works with Government in shaping the disability employment agenda and in raising awareness of the benefits of employing disabled people
Jim BrownCEO of Sainsburyrsquos Bank
Skills and experienceJim joined Sainsburyrsquos Bank as CEO in June 2019 and is also a member of the Sainsburyrsquos Group Operating Board He has held a number of senior international Financial Services roles - most recently for RBS in the UK as CEO of Williams and Glyn and prior to that CEO of Ulster Bank in Northern Ireland and the Republic of Ireland Before moving to Ireland he was based in Hong Kong and was CEO Retail and Commercial Banking Asia and the Middle East for RBS and ABN AMRO He has also been a member of the RBS Group Management Committee ABN AMRO Executive Group ABN AMRO Global Consumer Leadership Team and the RBSBank of China Joint Steering Committee Earlier in his career he held a number of senior executive roles for Citibank in Asia and Australia and New Zealand Jim has also held various Board positions including at Ulster Bank Saudi Hollandi Bank The Royal Bank of Scotland (China) Co Ltd and RBS (Pakistan) Ltd He is also a past President of the Institute of Banking in Ireland He is currently a Certified Bank Director
Date of appointment August 2019
Paul Mills-HicksFood Commercial Director
Skills and experiencePaul joined the Operating Board in May 2014 as Food Commercial Director having spent over ten years at Sainsburyrsquos He was closely involved in the formation and execution of the lsquoMaking Sainsburyrsquos Great Againrsquo strategy Following this he held a variety of roles in commercial strategy and finance most recently as Business Unit Director for Grocery Prior to Sainsburyrsquos Paul was European Controller at Marks and Spencer Group PLC and a Director at UBS Warburg
Date of appointment May 2014
13
APPENDIX Interim Results 201920 - November 2019
Operating Board
Angie RisleyGroup HR Director
Skills and experienceAngie was appointed Group HR Director and a member of the Operating Board in January 2013 with responsibility for human resources Angie is also a Director of Sainsburyrsquos Bank plc Angie was most recently Non-Executive Director and Chairman of the Remuneration Committee of Serco plc and prior to this was Group HR Director of Lloyds Banking Group and an Executive Director of Whitbread PLC with responsibility for HR and Corporate Social Responsibility Angie is currently Non-Executive Director and Chair of the Remuneration Committee at Smith amp Nephew plc
Date of appointment January 2013
Phil JordanGroup Chief Information Officer
Skills and experiencePhil joined the Board in January 2018 and has brought a fresh globalperspective on technology to the Operating Board in addition to a wealth of experience in digital data and business transformation Prior to joining Sainsburyrsquos Phil had a long and successful track record in telecommunications Most recently he was Global Chief Information Officer at Telefonica overseeing Digital Transformation and Information Technology and prior to that was Chief Information Officer for Vodafone UKIreland Phil has worked as a Non-Executive Advisor on Technology in the Investment amp Retail Banking sector and is currently a Non-Executive Director of TalkTalk Telecom Group PLC and chairs its Cyber-Security Committee
Date of appointment January 2018
Simon RobertsRetail and Operations Director
Skills and experienceSimon joined Sainsburyrsquos and the Operating Board in July 2017 as Central Retail amp Operations Director responsible for Stores Central operation and Logistics In his previous role he was Executive Vice President of Walgreens Boots Alliance and President of Boots with responsibility for commercial and retail operations across the UK and Ireland Prior to Boots Simon was at Marks and Spencer Group PLC where he held operational and customer leadership roles across stores divisions and central operations Simon is also the Non-Executive Chairman at the Institute ofCustomer Service
Date of appointment July 2017
Clodagh MoriartyGroup Chief Digital Officer
Skills and experienceClodagh was appointed Group Chief Digital Officer in June 2018 Clodagh leads the delivery of a consistent and first-rate digital experience for customers across Sainsburyrsquos Argos and Sainsburyrsquos BankClodagh joined Sainsburyrsquos in 2010 from Bain amp Co management consultants where she had gained experience working on a broad range of projects across multiple sectors and countries Following two years as Head of Strategy at Sainsburyrsquosshe moved into Food Commercial as Category Manager for Meal Solutions and then became Head of Online Trading spanning Food General Merchandise and Clothing before being promoted to Director of Online in 2016 In this role Clodagh was instrumental in driving innovation within Groceries Online and launching new initiatives including SmartShop and Chop Chop
Date of appointment June 2018
14
APPENDIX Interim Results 201920 - November 2019
Supplementary financial details
3 Financial calendarQ3 trading statement(15 weeks to 4 January 2020)
Preliminary results(52 weeks to 7 March 2020)
8 January 2020
30 April 2020
1 Weighted average number of shares
The interim dividend datesOrdinary shares
Ex-dividend 14 November 2019Record 15 November 2019Payment 20 December 2019
Product Quality Framework helps us fund investment
PQF cereals case study
BAU savings to offset cost inflation
Strategic cost transformation 5 year plan
Slide Number 43
Financial Services Priorities
Financial Services reshaping the portfolio
Financial Services key targets
Nectar
Slide Number 48
Digital
We will help our customers live well for less
Slide Number 51
Slide Number 52
Guidance for 201920
Retail sales
Sainsburyrsquos sales area and store numbers
Sainsburyrsquos store estate
Sainsburyrsquos investment programme
Retail margin
Group retail
Plc Board
Plc Board
Plc Board
Plc Board
Operating Board
Operating Board
Operating Board
Supplementary financial details
Contacts
Column1
201819
Grocery
19
GM
7
Clothing
1
To resize chart data range drag lower right corner of range
Grocery
GM
Clothing
45 Interim Results 201920 - November 2019
Grow connected
services
5
Current Customer Base
Customer Credit Risk Balance Sheet Earnings
Argos Storecards 22m Prime Near Prime
Credit Cards 09m Prime
Personal Loans 05m Prime
Mortgages 9K Exit
Total Lending
Deposits 03m
Insurances 05m Very Low Risk
Travel Money 266 Sites
ATMs 1890
Financial Services reshaping the portfolio
46 Interim Results 201920 - November 2019
Grow connected
services
5
Increase connectivity and value for Group
Stop mortgage acquisition review back book options
No capital input from the Group from now1
Costincome c503 within 5 years
Double UPBT double digit ROCE within 5 years
Upstream cash within 5 years2
Financial Services key targets
Transform the cost base
Improve returns
Financial services cash generative
Reduce risk profile to Group
Stop putting cash in to Financial Services
2
4
6
3
1
5
Focus on Sainsburyrsquos customer base
1 Subject to regulatory changes requirements2 Subject to regulatory approval3 On a Group contribution basis
47 Interim Results 201920 - November 2019
Grow connected
services
5
Nectar
bull Biggest loyalty programme in the UK
bull Over 18 million collectors
bull Most recognised loyalty brand in the UK
bull Launch of Nectar digital- 21 million app users- Increase in overall Nectar participation- Increased levels of personalisation- 138000 new Nectar customers- 1 app on launch weekend
bull Coalition strengthened with addition of Esso in June 2019
48 Interim Results 201920 - November 2019
Provide a seamless customer
experience
6
49 Interim Results 201920 - November 2019
Provide a seamless customer
experience
6
Digital
bull Groceries Online sales penetration of 8- App accounts for over 20 of orders
bull 21 million digital Nectar app users
bull 14 million Argos Financial Services app downloads
bull Smartshop rollout in over 350 stores
Groceries online
Chop Chop
SmartShop
Universaldiscovery
Seamlessfinancialservices
Singlebasket
50 Interim Results 201920 - November 2019
We will help our customers live well for less
Confident in the core Integrated customer offer
One multi brand multi channel business
Strong cash generation supporting investment dividend and allowing deleverage
Financial flexibility and resilience
Sustainable cost reduction covering cost inflation and funding investment in our competitive offer
QampA
APPENDIX Interim Results 201920 - November 2019
Appendices
APPENDIX Interim Results 201920 - November 2019
Guidance for 201920
1
Spacebull Expect to open 2 new Sainsburyrsquos supermarkets and up to 15 convenience storesbull Expect to open around 25 Argos stores in Sainsburyrsquos (of which 11 are
relocations) resulting in around 305 Argos stores in supermarketsbull Expect to close 2 supermarkets around 25 convenience stores and around 20
Argos stores in FY201920 as part of announced property closure programme of 10-15 supermarkets 30-40 convenience stores and 60-70 Argos stores
Financial Servicesbull Financial services underlying operating profit expected to be cpound45m including a
cpound10m benefit as a result of a change in transfer pricing between Argos and Argos Financial Services
bull Financial Services non-underlying costs are expected to be around pound30mbull No further capital injections into the Bank are expected following pound35m in H1 201920
Depreciation and amortisationbull Expect underlying retail depreciation and amortisation of around pound12bn
including cpound500m right of use asset depreciation
CostsOperating cost inflationbull Cost inflation between 2 and 3Cost savingsbull Continue to deliver cost savings to at least offset the impact of cost inflation
Finance costsbull Net finance costs of around pound405m including pound320m lease interest in
201920 following the introduction of IFRS 16
One-off itemsbull In 201920 cash outflows as a result of items excluded from
underlying results should not exceed pound100mbull Property strategy programme one-off costs expected to be
pound230m-pound270m of which cash costs are pound30-40m
Dividendbull Sainsburyrsquos plans to change the full year dividend policy to 19x cover by
underlying earnings (versus 20x previously) to offset the dilutive (non cash) impact of IFRS 16 on underlying earnings
Capital expenditurebull Retail capital expenditure to be around pound550mbull Retail capital expenditure is expected to be around pound550m-pound600m per
annum over the medium term
Net debtbull Net debt before fair value movements on derivatives to reduce by at
least pound300m
Tax ratebull Underlying tax rate to be between 25 and 26
APPENDIX Interim Results 201920 - November 2019
Retail sales
1 Sales including VAT excluding fuel
LFL sales growth1
(10)
Sales from net new space1
04
Total sales growth1
(06)
Supermarkets2
(07)
Convenience20
Groceries Online
70
Channels
(01)(25)
(12)
2 Supermarket sales include Argos SiS sales FY 1819 16
pound139bn
pound103bnGrocery
pound30bnGeneralMerchandise
pound488mClothing
2
Chart1
201819
194
66
1
Sheet1
APPENDIX Interim Results 201920 - November 2019
Sainsburyrsquos sales area and store numbersAs at 21 September 2019
Sainsburyrsquos store estateAs at 21 September 2019
Sq ftsales area
82446
870
40001 to60000
20001 to40000
10000 to20000
Under10000 Total
Over60000
0122122
0197197
0175175
06767
824607
1431
Argos storesArgos in SainsburyrsquosArgos in HomebaseOtherArgos total store numbers
Habitat1
Collection points
594281
8-
883
16317
As at21 Sept 2019
Disposalsclosures
Newstores
As at9 March 2019
17--8
-1
(7)-
(2)-
(9)
-(36)
588288
6-
88216
282
ConvenienceSupermarketsTotal stores
Number of stores
Sq ftsales area
1929350
2279
40001 to60000
20001 to40000
10000 to20000
Under10000 Total
Over60000
-18441844
-58185818
-85018501
-46604660
19292117323102
ConvenienceSupermarketsTotal stores
Space by store size (lsquo000 sq ft)
Argos and Habitat store numbers
1 5 Habitat stores 11 Habitat stores in Sainsburys
4
APPENDIX Interim Results 201920 - November 2019
ClosureBitterne West
Sainsburyrsquos investment programme201920
Q1
Supermarkets ConvenienceNew storesMilton Keynes Brooklands District CentBromley High StLeeds Wike Ridge LaneSalford Harbour CityCanterbury High St
ReplacementMayfair Stratton St
ClosuresMayfairWarren St
Q1Q1Q1Q2Q2
Q2
Q1Q2
5
APPENDIX Interim Results 201920 - November 2019
Retail margin
Retail sales (inc VAT inc fuel)(exc VAT inc fuel)
Retail underlying EBITDAR1
Retail underlying EBITDAR margin 2
at constant fuel pricesRetail underlying operating profit3
Retail underlying operating margin 4
at constant fuel prices
1656714808
10677272
4373030
1661214856
11147575
4873333
030342
30 bps28 bps10333 bps32 bps
1 Retail underlying operating profit before net rental income of pound6 million and underlying depreciation and amortisation of pound636 million2 Retail underlying EBITDAR divided by underlying retail sales excluding VAT3 Retail underlying earnings before interest tax and Sainsburyrsquos underlying share of post-tax profit from joint ventures4 Retail underlying operating profit divided by underlying retail sales excluding VAT
poundm H1201920
H1201819
Change
6
APPENDIX Interim Results 201920 - November 2019
H1201920
H1201819
Group retail
Return on capital employed 1
Net debt to EBITDAR (times)23
Fixed charge cover (times)2
Underlying tax rate Core retail capex sales5
713126
26515
743326
25715
poundm
1 ROCE Return is defined as a 52 week rolling underlying profit before interest and tax Capital employed is defined as group net assets2 Net debt of pound6778 million includes lease obligations under IFRS 16 and perpetual securities treated as debt divided by Group underlying EBITDAR of pound2171 million calculated for a 52-week period to 21 September 20193 Group underlying EBITDAR divided by rent (both capital and interest) and net finance costs where interest on perpetual securities is treated as an underlying finance costs4 52 weeks to 22nd September 2018 is not available due to the implementation of IFRS 16 Comparatives therefore reflect the 52 weeks to 9th March 20195 Includes retail sales inc vat inc fuel
4
4
7
APPENDIX Interim Results 201920 - November 2019
Plc Board
Kevin OrsquoByrneChief Financial Officer
Mike Coupe Group Chief Executive
Dame Susan Rice Senior Independent Director
Matt BrittinNon-Executive Director
Jo HarlowNon-Executive Director
Brian CassinNon-Executive Director
David KeensNon-Executive Director
Jean Tomlin Non-Executive Director
Martin Scicluna Chairman
8
APPENDIX Interim Results 201920 - November 2019
Plc Board
Mike Coupe Group Chief Executive Officer
Skills and experienceAppointed Group Chief Executive Officer on 9 July 2014 Mike has been a member of the Operating Board since October 2004 Mike has vast retail industry experience in trading strategy marketing digital and online as well as multi-site store experience He joined Sainsburyrsquos from Big Food Group where he was a board director of Big Food Group PLC and Managing Director of Iceland Food Stores He previously worked for both Asda and Tesco PLC where he served in a variety of senior management roles
Date of appointment 1 August 2007Mike has served as an Executive Director since 1 August 2007 and as Chief Executive Officer since 9 July 2014
Committee membershipCorporate Responsibility and Sustainability Committee
Kevin OrsquoByrne Chief Financial Officer
Skills and experienceKevin brings to the Board a wealth of retail and finance experience Kevin was previously Chief Executive Officer of Poundland Group Limited until December 2016 and held executive roles at Kingfisher plc from 2008 to 2015 including Divisional Director UK China and Turkey Chief Executive Officer of BampQ UK amp Ireland and Group Finance Director He was previously Group Finance Director of Dixons Retail plc and European Finance Director of Quaker Oats He was a Non-Executive Director of Land Securities Group PLC from 2008 to September 2017 where he was Chairman of the Audit Committee and Senior Independent Director
Date of appointment 9 January 2017
Other current rolesNon-Executive Director of Greene King plc
Skills and experienceMartin brings a breadth of experience and leadership in both executive and non-executive roles His previous roles include positions as the Chairman of Great Portland Estates plc Senior Independent Director and Chair of the Audit Committee of Worldpay Inc and Non-Executive Director and Chair of the Audit Committee of Lloyds Banking Group plc He was a partner at Deloitte LLP for 26 years serving as Chairman from 1995 to 2007 where his clients included Dixons WH Smith Alliance Unichem and Cadburyrsquos
Other current rolesChairman of RSA Insurance Group plc
Martin Scicluna Chairman
Date of appointment 1 November 2018 Martin joined the Board as Chairman Designate and Non-Executive Director on 1 November 2018 He was appointed as Chairman of the Board on 10 March 2019
Committee membershipChair of the Nomination Committee
Dame Susan Rice Senior Independent Director
Skills and experienceSusan has extensive experience as a Non-Executive Director as well as in retail banking financial services leadership and sustainability Her career in retail bankingis particularly relevant to our ownership ofSainsburyrsquos Bank Previously Susan was a member of the First Ministerrsquos Council of Economic Advisors Managing Director of Lloyds Banking Group Scotland and was previously Chief Executive and then Chairman of Lloyds TSB Scotland plc She has also held a range of other non-executive directorships including at the Bank of England and SSE plc
Committee membershipChair of the Remuneration Committee and a member of the Nomination Committee
Date of appointment 1 June 2013
Other current rolesChair of Scottish Water and Business Stream Chair of the Scottish Fiscal Commission Non-Executive Director of the North American Income Trust C Hoare and Co and Senior Independent Director of the North American Income Trust
9
Other current rolesNon-Executive Director and Chairman of the Audit Committee of Centrica plc
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jean Tomlin Non-Executive Director
Skills and experienceJean has extensive experience and breadth of skills in human resources and corporate responsibility Jean was formerly Director of HR Workforce and Accreditation for The London OrganisingCommittee of the Olympic and Paralympic Games where she set the strategic direction to ensure the mobilisation of the combined 200000-strong workforce including paid staff volunteers and contractors which represented the recruitment and mobilisation of the largest peacetime workforce and set the industry standard for volunteering with the highly acclaimed Games She was previously Group HR Director at Marks and Spencer Group Plc HR Director and founder member of Egg plc and Sales amp Operations Director of Prudential Direct
Date of appointment 1 January 2013
Committee membershipAudit Committee Corporate Responsibility and Sustainability Committee and Nomination Committee
David Keens Non-Executive Director
Skills and experienceDavid has extensive retail experience and knowledge of consumer facing businesses together with his core skills in finance David was formerly Group Finance Director of next plc from 1991 to 2015 and their Group Treasurer from 1986 to 1991 Previous management experience includes nine years in the UK and overseas operations of multinational food manufacturer Nabisco and prior to that seven years in the accountancy profession
Date of appointment 29 April 2015
Committee membershipChair of the Audit Committee and a member of the Nomination Committee
Other current rolesIndependent Board member of Capri Holdings Limited Non-Executive Director of Hakluyt and Chief Executive Officer of Chanzo Limited
Other current rolesNon-Executive Director Senior Independent Director and Chair of the Audit Committee of Auto Trader Group plc
Matt BrittinNon-Executive Director
Skills and experienceMatt has extensive experience of running a high profile fast moving innovative digital business Since 2015 he has been responsible for Googlersquos business and operations in Europe the Middle East and Africa and hersquos been in leadership roles at Google since 2007 Prior to that Matt spent much of his career in media and marketing with particular interests in strategy commercial development and sales performance This included commercial and digital leadership roles in UK media
Date of appointment 27 January 2011
Committee membershipNomination Committee and Remuneration Committee
Other current rolesGooglersquos President ndash Europe Middle East and Africa and Director of The Media Trust
Brian Cassin Non-Executive Director
Skills and experienceBrian brings present day experience of running a FTSE40 group and of big data and analytics ndash topics of key importance to Sainsburyrsquos Brian joined Experian plc as Chief Financial Officer in April 2012 a post he held until his appointment as Chief Executive Officer in July 2014 Prior to this Brian spent his career in investment banking at Greenhill amp Co where he was Managing Director and Partner Brian has also held various roles at Baring Brothers International and at the London Stock Exchange
Date of appointment 1 April 2016
Committee membershipAudit Committee and Nomination Committee
Other current rolesChief Executive Officer of Experian plc
10
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jo Harlow Non-Executive Director
Skills and experienceJo brings a wealth of experience in consumer-facing businesses and in the telecoms and technology industry bothin the UK and internationally Jo spent 12 years in a variety of senior management roles with Nokia and Microsoft Prior to this she spent eight years at PampG and 11 years at Reebok in senior sales and marketing positions in both Europe and the US
Date of appointment 11 September 2017
Committee membershipChair of the Corporate Responsibility and Sustainability Committee and member of the Nomination Committee and Remuneration Committee
Life PresidentLord Sainsbury of Preston Candover KG
Other current rolesNon-Executive Director of InterContinental Hotels plc Non-Executive Director of Halmaplc and Member of the Supervisory Board of Ceconomy AG
11
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief Executive
Tim FallowfieldCompany Secretary amp Corporate Services Director
Kevin OrsquoByrne Chief Financial Officer
Jim BrownChief Executive Officer of Sainsburyrsquos Bank
Paul Mills-HicksFood Commercial Director
Angie RisleyGroup HR Director
Phil JordanGroup Chief InformationOfficer
Simon RobertsRetail and Operations Director
Clo MoriartyGroup Chief Digital Officer
12
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief ExecutiveSee Appendix page 9
Kevin OrsquoByrneChief Financial OfficerSee Appendix page 9
Tim FallowfieldCompany Secretary amp Corporate Services Director
Date of appointment September 2004
Skills and experienceTim joined Sainsburyrsquos in 2001 as Company Secretary and joined the Operating Board in September 2004 In addition to his role as Company Secretary Tim is responsible for the Corporate Services Division comprising Legal Services Data Governance Safety Shareholder Services Insurance and Central Security He chairs the Group Safety Committee and the Data Governance Committee Tim joined Sainsburyrsquos from Exelplc the global logistics company now part of DHL where he was Company Secretary and General Counsel He began his career at the international law firm Clifford Chance and is a qualified solicitor Tim is Chairman of the Disability Confident Business Leaders Group which works with Government in shaping the disability employment agenda and in raising awareness of the benefits of employing disabled people
Jim BrownCEO of Sainsburyrsquos Bank
Skills and experienceJim joined Sainsburyrsquos Bank as CEO in June 2019 and is also a member of the Sainsburyrsquos Group Operating Board He has held a number of senior international Financial Services roles - most recently for RBS in the UK as CEO of Williams and Glyn and prior to that CEO of Ulster Bank in Northern Ireland and the Republic of Ireland Before moving to Ireland he was based in Hong Kong and was CEO Retail and Commercial Banking Asia and the Middle East for RBS and ABN AMRO He has also been a member of the RBS Group Management Committee ABN AMRO Executive Group ABN AMRO Global Consumer Leadership Team and the RBSBank of China Joint Steering Committee Earlier in his career he held a number of senior executive roles for Citibank in Asia and Australia and New Zealand Jim has also held various Board positions including at Ulster Bank Saudi Hollandi Bank The Royal Bank of Scotland (China) Co Ltd and RBS (Pakistan) Ltd He is also a past President of the Institute of Banking in Ireland He is currently a Certified Bank Director
Date of appointment August 2019
Paul Mills-HicksFood Commercial Director
Skills and experiencePaul joined the Operating Board in May 2014 as Food Commercial Director having spent over ten years at Sainsburyrsquos He was closely involved in the formation and execution of the lsquoMaking Sainsburyrsquos Great Againrsquo strategy Following this he held a variety of roles in commercial strategy and finance most recently as Business Unit Director for Grocery Prior to Sainsburyrsquos Paul was European Controller at Marks and Spencer Group PLC and a Director at UBS Warburg
Date of appointment May 2014
13
APPENDIX Interim Results 201920 - November 2019
Operating Board
Angie RisleyGroup HR Director
Skills and experienceAngie was appointed Group HR Director and a member of the Operating Board in January 2013 with responsibility for human resources Angie is also a Director of Sainsburyrsquos Bank plc Angie was most recently Non-Executive Director and Chairman of the Remuneration Committee of Serco plc and prior to this was Group HR Director of Lloyds Banking Group and an Executive Director of Whitbread PLC with responsibility for HR and Corporate Social Responsibility Angie is currently Non-Executive Director and Chair of the Remuneration Committee at Smith amp Nephew plc
Date of appointment January 2013
Phil JordanGroup Chief Information Officer
Skills and experiencePhil joined the Board in January 2018 and has brought a fresh globalperspective on technology to the Operating Board in addition to a wealth of experience in digital data and business transformation Prior to joining Sainsburyrsquos Phil had a long and successful track record in telecommunications Most recently he was Global Chief Information Officer at Telefonica overseeing Digital Transformation and Information Technology and prior to that was Chief Information Officer for Vodafone UKIreland Phil has worked as a Non-Executive Advisor on Technology in the Investment amp Retail Banking sector and is currently a Non-Executive Director of TalkTalk Telecom Group PLC and chairs its Cyber-Security Committee
Date of appointment January 2018
Simon RobertsRetail and Operations Director
Skills and experienceSimon joined Sainsburyrsquos and the Operating Board in July 2017 as Central Retail amp Operations Director responsible for Stores Central operation and Logistics In his previous role he was Executive Vice President of Walgreens Boots Alliance and President of Boots with responsibility for commercial and retail operations across the UK and Ireland Prior to Boots Simon was at Marks and Spencer Group PLC where he held operational and customer leadership roles across stores divisions and central operations Simon is also the Non-Executive Chairman at the Institute ofCustomer Service
Date of appointment July 2017
Clodagh MoriartyGroup Chief Digital Officer
Skills and experienceClodagh was appointed Group Chief Digital Officer in June 2018 Clodagh leads the delivery of a consistent and first-rate digital experience for customers across Sainsburyrsquos Argos and Sainsburyrsquos BankClodagh joined Sainsburyrsquos in 2010 from Bain amp Co management consultants where she had gained experience working on a broad range of projects across multiple sectors and countries Following two years as Head of Strategy at Sainsburyrsquosshe moved into Food Commercial as Category Manager for Meal Solutions and then became Head of Online Trading spanning Food General Merchandise and Clothing before being promoted to Director of Online in 2016 In this role Clodagh was instrumental in driving innovation within Groceries Online and launching new initiatives including SmartShop and Chop Chop
Date of appointment June 2018
14
APPENDIX Interim Results 201920 - November 2019
Supplementary financial details
3 Financial calendarQ3 trading statement(15 weeks to 4 January 2020)
Preliminary results(52 weeks to 7 March 2020)
8 January 2020
30 April 2020
1 Weighted average number of shares
The interim dividend datesOrdinary shares
Ex-dividend 14 November 2019Record 15 November 2019Payment 20 December 2019
Product Quality Framework helps us fund investment
PQF cereals case study
BAU savings to offset cost inflation
Strategic cost transformation 5 year plan
Slide Number 43
Financial Services Priorities
Financial Services reshaping the portfolio
Financial Services key targets
Nectar
Slide Number 48
Digital
We will help our customers live well for less
Slide Number 51
Slide Number 52
Guidance for 201920
Retail sales
Sainsburyrsquos sales area and store numbers
Sainsburyrsquos store estate
Sainsburyrsquos investment programme
Retail margin
Group retail
Plc Board
Plc Board
Plc Board
Plc Board
Operating Board
Operating Board
Operating Board
Supplementary financial details
Contacts
Column1
201819
Grocery
19
GM
7
Clothing
1
To resize chart data range drag lower right corner of range
Grocery
GM
Clothing
46 Interim Results 201920 - November 2019
Grow connected
services
5
Increase connectivity and value for Group
Stop mortgage acquisition review back book options
No capital input from the Group from now1
Costincome c503 within 5 years
Double UPBT double digit ROCE within 5 years
Upstream cash within 5 years2
Financial Services key targets
Transform the cost base
Improve returns
Financial services cash generative
Reduce risk profile to Group
Stop putting cash in to Financial Services
2
4
6
3
1
5
Focus on Sainsburyrsquos customer base
1 Subject to regulatory changes requirements2 Subject to regulatory approval3 On a Group contribution basis
47 Interim Results 201920 - November 2019
Grow connected
services
5
Nectar
bull Biggest loyalty programme in the UK
bull Over 18 million collectors
bull Most recognised loyalty brand in the UK
bull Launch of Nectar digital- 21 million app users- Increase in overall Nectar participation- Increased levels of personalisation- 138000 new Nectar customers- 1 app on launch weekend
bull Coalition strengthened with addition of Esso in June 2019
48 Interim Results 201920 - November 2019
Provide a seamless customer
experience
6
49 Interim Results 201920 - November 2019
Provide a seamless customer
experience
6
Digital
bull Groceries Online sales penetration of 8- App accounts for over 20 of orders
bull 21 million digital Nectar app users
bull 14 million Argos Financial Services app downloads
bull Smartshop rollout in over 350 stores
Groceries online
Chop Chop
SmartShop
Universaldiscovery
Seamlessfinancialservices
Singlebasket
50 Interim Results 201920 - November 2019
We will help our customers live well for less
Confident in the core Integrated customer offer
One multi brand multi channel business
Strong cash generation supporting investment dividend and allowing deleverage
Financial flexibility and resilience
Sustainable cost reduction covering cost inflation and funding investment in our competitive offer
QampA
APPENDIX Interim Results 201920 - November 2019
Appendices
APPENDIX Interim Results 201920 - November 2019
Guidance for 201920
1
Spacebull Expect to open 2 new Sainsburyrsquos supermarkets and up to 15 convenience storesbull Expect to open around 25 Argos stores in Sainsburyrsquos (of which 11 are
relocations) resulting in around 305 Argos stores in supermarketsbull Expect to close 2 supermarkets around 25 convenience stores and around 20
Argos stores in FY201920 as part of announced property closure programme of 10-15 supermarkets 30-40 convenience stores and 60-70 Argos stores
Financial Servicesbull Financial services underlying operating profit expected to be cpound45m including a
cpound10m benefit as a result of a change in transfer pricing between Argos and Argos Financial Services
bull Financial Services non-underlying costs are expected to be around pound30mbull No further capital injections into the Bank are expected following pound35m in H1 201920
Depreciation and amortisationbull Expect underlying retail depreciation and amortisation of around pound12bn
including cpound500m right of use asset depreciation
CostsOperating cost inflationbull Cost inflation between 2 and 3Cost savingsbull Continue to deliver cost savings to at least offset the impact of cost inflation
Finance costsbull Net finance costs of around pound405m including pound320m lease interest in
201920 following the introduction of IFRS 16
One-off itemsbull In 201920 cash outflows as a result of items excluded from
underlying results should not exceed pound100mbull Property strategy programme one-off costs expected to be
pound230m-pound270m of which cash costs are pound30-40m
Dividendbull Sainsburyrsquos plans to change the full year dividend policy to 19x cover by
underlying earnings (versus 20x previously) to offset the dilutive (non cash) impact of IFRS 16 on underlying earnings
Capital expenditurebull Retail capital expenditure to be around pound550mbull Retail capital expenditure is expected to be around pound550m-pound600m per
annum over the medium term
Net debtbull Net debt before fair value movements on derivatives to reduce by at
least pound300m
Tax ratebull Underlying tax rate to be between 25 and 26
APPENDIX Interim Results 201920 - November 2019
Retail sales
1 Sales including VAT excluding fuel
LFL sales growth1
(10)
Sales from net new space1
04
Total sales growth1
(06)
Supermarkets2
(07)
Convenience20
Groceries Online
70
Channels
(01)(25)
(12)
2 Supermarket sales include Argos SiS sales FY 1819 16
pound139bn
pound103bnGrocery
pound30bnGeneralMerchandise
pound488mClothing
2
Chart1
201819
194
66
1
Sheet1
APPENDIX Interim Results 201920 - November 2019
Sainsburyrsquos sales area and store numbersAs at 21 September 2019
Sainsburyrsquos store estateAs at 21 September 2019
Sq ftsales area
82446
870
40001 to60000
20001 to40000
10000 to20000
Under10000 Total
Over60000
0122122
0197197
0175175
06767
824607
1431
Argos storesArgos in SainsburyrsquosArgos in HomebaseOtherArgos total store numbers
Habitat1
Collection points
594281
8-
883
16317
As at21 Sept 2019
Disposalsclosures
Newstores
As at9 March 2019
17--8
-1
(7)-
(2)-
(9)
-(36)
588288
6-
88216
282
ConvenienceSupermarketsTotal stores
Number of stores
Sq ftsales area
1929350
2279
40001 to60000
20001 to40000
10000 to20000
Under10000 Total
Over60000
-18441844
-58185818
-85018501
-46604660
19292117323102
ConvenienceSupermarketsTotal stores
Space by store size (lsquo000 sq ft)
Argos and Habitat store numbers
1 5 Habitat stores 11 Habitat stores in Sainsburys
4
APPENDIX Interim Results 201920 - November 2019
ClosureBitterne West
Sainsburyrsquos investment programme201920
Q1
Supermarkets ConvenienceNew storesMilton Keynes Brooklands District CentBromley High StLeeds Wike Ridge LaneSalford Harbour CityCanterbury High St
ReplacementMayfair Stratton St
ClosuresMayfairWarren St
Q1Q1Q1Q2Q2
Q2
Q1Q2
5
APPENDIX Interim Results 201920 - November 2019
Retail margin
Retail sales (inc VAT inc fuel)(exc VAT inc fuel)
Retail underlying EBITDAR1
Retail underlying EBITDAR margin 2
at constant fuel pricesRetail underlying operating profit3
Retail underlying operating margin 4
at constant fuel prices
1656714808
10677272
4373030
1661214856
11147575
4873333
030342
30 bps28 bps10333 bps32 bps
1 Retail underlying operating profit before net rental income of pound6 million and underlying depreciation and amortisation of pound636 million2 Retail underlying EBITDAR divided by underlying retail sales excluding VAT3 Retail underlying earnings before interest tax and Sainsburyrsquos underlying share of post-tax profit from joint ventures4 Retail underlying operating profit divided by underlying retail sales excluding VAT
poundm H1201920
H1201819
Change
6
APPENDIX Interim Results 201920 - November 2019
H1201920
H1201819
Group retail
Return on capital employed 1
Net debt to EBITDAR (times)23
Fixed charge cover (times)2
Underlying tax rate Core retail capex sales5
713126
26515
743326
25715
poundm
1 ROCE Return is defined as a 52 week rolling underlying profit before interest and tax Capital employed is defined as group net assets2 Net debt of pound6778 million includes lease obligations under IFRS 16 and perpetual securities treated as debt divided by Group underlying EBITDAR of pound2171 million calculated for a 52-week period to 21 September 20193 Group underlying EBITDAR divided by rent (both capital and interest) and net finance costs where interest on perpetual securities is treated as an underlying finance costs4 52 weeks to 22nd September 2018 is not available due to the implementation of IFRS 16 Comparatives therefore reflect the 52 weeks to 9th March 20195 Includes retail sales inc vat inc fuel
4
4
7
APPENDIX Interim Results 201920 - November 2019
Plc Board
Kevin OrsquoByrneChief Financial Officer
Mike Coupe Group Chief Executive
Dame Susan Rice Senior Independent Director
Matt BrittinNon-Executive Director
Jo HarlowNon-Executive Director
Brian CassinNon-Executive Director
David KeensNon-Executive Director
Jean Tomlin Non-Executive Director
Martin Scicluna Chairman
8
APPENDIX Interim Results 201920 - November 2019
Plc Board
Mike Coupe Group Chief Executive Officer
Skills and experienceAppointed Group Chief Executive Officer on 9 July 2014 Mike has been a member of the Operating Board since October 2004 Mike has vast retail industry experience in trading strategy marketing digital and online as well as multi-site store experience He joined Sainsburyrsquos from Big Food Group where he was a board director of Big Food Group PLC and Managing Director of Iceland Food Stores He previously worked for both Asda and Tesco PLC where he served in a variety of senior management roles
Date of appointment 1 August 2007Mike has served as an Executive Director since 1 August 2007 and as Chief Executive Officer since 9 July 2014
Committee membershipCorporate Responsibility and Sustainability Committee
Kevin OrsquoByrne Chief Financial Officer
Skills and experienceKevin brings to the Board a wealth of retail and finance experience Kevin was previously Chief Executive Officer of Poundland Group Limited until December 2016 and held executive roles at Kingfisher plc from 2008 to 2015 including Divisional Director UK China and Turkey Chief Executive Officer of BampQ UK amp Ireland and Group Finance Director He was previously Group Finance Director of Dixons Retail plc and European Finance Director of Quaker Oats He was a Non-Executive Director of Land Securities Group PLC from 2008 to September 2017 where he was Chairman of the Audit Committee and Senior Independent Director
Date of appointment 9 January 2017
Other current rolesNon-Executive Director of Greene King plc
Skills and experienceMartin brings a breadth of experience and leadership in both executive and non-executive roles His previous roles include positions as the Chairman of Great Portland Estates plc Senior Independent Director and Chair of the Audit Committee of Worldpay Inc and Non-Executive Director and Chair of the Audit Committee of Lloyds Banking Group plc He was a partner at Deloitte LLP for 26 years serving as Chairman from 1995 to 2007 where his clients included Dixons WH Smith Alliance Unichem and Cadburyrsquos
Other current rolesChairman of RSA Insurance Group plc
Martin Scicluna Chairman
Date of appointment 1 November 2018 Martin joined the Board as Chairman Designate and Non-Executive Director on 1 November 2018 He was appointed as Chairman of the Board on 10 March 2019
Committee membershipChair of the Nomination Committee
Dame Susan Rice Senior Independent Director
Skills and experienceSusan has extensive experience as a Non-Executive Director as well as in retail banking financial services leadership and sustainability Her career in retail bankingis particularly relevant to our ownership ofSainsburyrsquos Bank Previously Susan was a member of the First Ministerrsquos Council of Economic Advisors Managing Director of Lloyds Banking Group Scotland and was previously Chief Executive and then Chairman of Lloyds TSB Scotland plc She has also held a range of other non-executive directorships including at the Bank of England and SSE plc
Committee membershipChair of the Remuneration Committee and a member of the Nomination Committee
Date of appointment 1 June 2013
Other current rolesChair of Scottish Water and Business Stream Chair of the Scottish Fiscal Commission Non-Executive Director of the North American Income Trust C Hoare and Co and Senior Independent Director of the North American Income Trust
9
Other current rolesNon-Executive Director and Chairman of the Audit Committee of Centrica plc
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jean Tomlin Non-Executive Director
Skills and experienceJean has extensive experience and breadth of skills in human resources and corporate responsibility Jean was formerly Director of HR Workforce and Accreditation for The London OrganisingCommittee of the Olympic and Paralympic Games where she set the strategic direction to ensure the mobilisation of the combined 200000-strong workforce including paid staff volunteers and contractors which represented the recruitment and mobilisation of the largest peacetime workforce and set the industry standard for volunteering with the highly acclaimed Games She was previously Group HR Director at Marks and Spencer Group Plc HR Director and founder member of Egg plc and Sales amp Operations Director of Prudential Direct
Date of appointment 1 January 2013
Committee membershipAudit Committee Corporate Responsibility and Sustainability Committee and Nomination Committee
David Keens Non-Executive Director
Skills and experienceDavid has extensive retail experience and knowledge of consumer facing businesses together with his core skills in finance David was formerly Group Finance Director of next plc from 1991 to 2015 and their Group Treasurer from 1986 to 1991 Previous management experience includes nine years in the UK and overseas operations of multinational food manufacturer Nabisco and prior to that seven years in the accountancy profession
Date of appointment 29 April 2015
Committee membershipChair of the Audit Committee and a member of the Nomination Committee
Other current rolesIndependent Board member of Capri Holdings Limited Non-Executive Director of Hakluyt and Chief Executive Officer of Chanzo Limited
Other current rolesNon-Executive Director Senior Independent Director and Chair of the Audit Committee of Auto Trader Group plc
Matt BrittinNon-Executive Director
Skills and experienceMatt has extensive experience of running a high profile fast moving innovative digital business Since 2015 he has been responsible for Googlersquos business and operations in Europe the Middle East and Africa and hersquos been in leadership roles at Google since 2007 Prior to that Matt spent much of his career in media and marketing with particular interests in strategy commercial development and sales performance This included commercial and digital leadership roles in UK media
Date of appointment 27 January 2011
Committee membershipNomination Committee and Remuneration Committee
Other current rolesGooglersquos President ndash Europe Middle East and Africa and Director of The Media Trust
Brian Cassin Non-Executive Director
Skills and experienceBrian brings present day experience of running a FTSE40 group and of big data and analytics ndash topics of key importance to Sainsburyrsquos Brian joined Experian plc as Chief Financial Officer in April 2012 a post he held until his appointment as Chief Executive Officer in July 2014 Prior to this Brian spent his career in investment banking at Greenhill amp Co where he was Managing Director and Partner Brian has also held various roles at Baring Brothers International and at the London Stock Exchange
Date of appointment 1 April 2016
Committee membershipAudit Committee and Nomination Committee
Other current rolesChief Executive Officer of Experian plc
10
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jo Harlow Non-Executive Director
Skills and experienceJo brings a wealth of experience in consumer-facing businesses and in the telecoms and technology industry bothin the UK and internationally Jo spent 12 years in a variety of senior management roles with Nokia and Microsoft Prior to this she spent eight years at PampG and 11 years at Reebok in senior sales and marketing positions in both Europe and the US
Date of appointment 11 September 2017
Committee membershipChair of the Corporate Responsibility and Sustainability Committee and member of the Nomination Committee and Remuneration Committee
Life PresidentLord Sainsbury of Preston Candover KG
Other current rolesNon-Executive Director of InterContinental Hotels plc Non-Executive Director of Halmaplc and Member of the Supervisory Board of Ceconomy AG
11
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief Executive
Tim FallowfieldCompany Secretary amp Corporate Services Director
Kevin OrsquoByrne Chief Financial Officer
Jim BrownChief Executive Officer of Sainsburyrsquos Bank
Paul Mills-HicksFood Commercial Director
Angie RisleyGroup HR Director
Phil JordanGroup Chief InformationOfficer
Simon RobertsRetail and Operations Director
Clo MoriartyGroup Chief Digital Officer
12
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief ExecutiveSee Appendix page 9
Kevin OrsquoByrneChief Financial OfficerSee Appendix page 9
Tim FallowfieldCompany Secretary amp Corporate Services Director
Date of appointment September 2004
Skills and experienceTim joined Sainsburyrsquos in 2001 as Company Secretary and joined the Operating Board in September 2004 In addition to his role as Company Secretary Tim is responsible for the Corporate Services Division comprising Legal Services Data Governance Safety Shareholder Services Insurance and Central Security He chairs the Group Safety Committee and the Data Governance Committee Tim joined Sainsburyrsquos from Exelplc the global logistics company now part of DHL where he was Company Secretary and General Counsel He began his career at the international law firm Clifford Chance and is a qualified solicitor Tim is Chairman of the Disability Confident Business Leaders Group which works with Government in shaping the disability employment agenda and in raising awareness of the benefits of employing disabled people
Jim BrownCEO of Sainsburyrsquos Bank
Skills and experienceJim joined Sainsburyrsquos Bank as CEO in June 2019 and is also a member of the Sainsburyrsquos Group Operating Board He has held a number of senior international Financial Services roles - most recently for RBS in the UK as CEO of Williams and Glyn and prior to that CEO of Ulster Bank in Northern Ireland and the Republic of Ireland Before moving to Ireland he was based in Hong Kong and was CEO Retail and Commercial Banking Asia and the Middle East for RBS and ABN AMRO He has also been a member of the RBS Group Management Committee ABN AMRO Executive Group ABN AMRO Global Consumer Leadership Team and the RBSBank of China Joint Steering Committee Earlier in his career he held a number of senior executive roles for Citibank in Asia and Australia and New Zealand Jim has also held various Board positions including at Ulster Bank Saudi Hollandi Bank The Royal Bank of Scotland (China) Co Ltd and RBS (Pakistan) Ltd He is also a past President of the Institute of Banking in Ireland He is currently a Certified Bank Director
Date of appointment August 2019
Paul Mills-HicksFood Commercial Director
Skills and experiencePaul joined the Operating Board in May 2014 as Food Commercial Director having spent over ten years at Sainsburyrsquos He was closely involved in the formation and execution of the lsquoMaking Sainsburyrsquos Great Againrsquo strategy Following this he held a variety of roles in commercial strategy and finance most recently as Business Unit Director for Grocery Prior to Sainsburyrsquos Paul was European Controller at Marks and Spencer Group PLC and a Director at UBS Warburg
Date of appointment May 2014
13
APPENDIX Interim Results 201920 - November 2019
Operating Board
Angie RisleyGroup HR Director
Skills and experienceAngie was appointed Group HR Director and a member of the Operating Board in January 2013 with responsibility for human resources Angie is also a Director of Sainsburyrsquos Bank plc Angie was most recently Non-Executive Director and Chairman of the Remuneration Committee of Serco plc and prior to this was Group HR Director of Lloyds Banking Group and an Executive Director of Whitbread PLC with responsibility for HR and Corporate Social Responsibility Angie is currently Non-Executive Director and Chair of the Remuneration Committee at Smith amp Nephew plc
Date of appointment January 2013
Phil JordanGroup Chief Information Officer
Skills and experiencePhil joined the Board in January 2018 and has brought a fresh globalperspective on technology to the Operating Board in addition to a wealth of experience in digital data and business transformation Prior to joining Sainsburyrsquos Phil had a long and successful track record in telecommunications Most recently he was Global Chief Information Officer at Telefonica overseeing Digital Transformation and Information Technology and prior to that was Chief Information Officer for Vodafone UKIreland Phil has worked as a Non-Executive Advisor on Technology in the Investment amp Retail Banking sector and is currently a Non-Executive Director of TalkTalk Telecom Group PLC and chairs its Cyber-Security Committee
Date of appointment January 2018
Simon RobertsRetail and Operations Director
Skills and experienceSimon joined Sainsburyrsquos and the Operating Board in July 2017 as Central Retail amp Operations Director responsible for Stores Central operation and Logistics In his previous role he was Executive Vice President of Walgreens Boots Alliance and President of Boots with responsibility for commercial and retail operations across the UK and Ireland Prior to Boots Simon was at Marks and Spencer Group PLC where he held operational and customer leadership roles across stores divisions and central operations Simon is also the Non-Executive Chairman at the Institute ofCustomer Service
Date of appointment July 2017
Clodagh MoriartyGroup Chief Digital Officer
Skills and experienceClodagh was appointed Group Chief Digital Officer in June 2018 Clodagh leads the delivery of a consistent and first-rate digital experience for customers across Sainsburyrsquos Argos and Sainsburyrsquos BankClodagh joined Sainsburyrsquos in 2010 from Bain amp Co management consultants where she had gained experience working on a broad range of projects across multiple sectors and countries Following two years as Head of Strategy at Sainsburyrsquosshe moved into Food Commercial as Category Manager for Meal Solutions and then became Head of Online Trading spanning Food General Merchandise and Clothing before being promoted to Director of Online in 2016 In this role Clodagh was instrumental in driving innovation within Groceries Online and launching new initiatives including SmartShop and Chop Chop
Date of appointment June 2018
14
APPENDIX Interim Results 201920 - November 2019
Supplementary financial details
3 Financial calendarQ3 trading statement(15 weeks to 4 January 2020)
Preliminary results(52 weeks to 7 March 2020)
8 January 2020
30 April 2020
1 Weighted average number of shares
The interim dividend datesOrdinary shares
Ex-dividend 14 November 2019Record 15 November 2019Payment 20 December 2019
Product Quality Framework helps us fund investment
PQF cereals case study
BAU savings to offset cost inflation
Strategic cost transformation 5 year plan
Slide Number 43
Financial Services Priorities
Financial Services reshaping the portfolio
Financial Services key targets
Nectar
Slide Number 48
Digital
We will help our customers live well for less
Slide Number 51
Slide Number 52
Guidance for 201920
Retail sales
Sainsburyrsquos sales area and store numbers
Sainsburyrsquos store estate
Sainsburyrsquos investment programme
Retail margin
Group retail
Plc Board
Plc Board
Plc Board
Plc Board
Operating Board
Operating Board
Operating Board
Supplementary financial details
Contacts
Column1
201819
Grocery
19
GM
7
Clothing
1
To resize chart data range drag lower right corner of range
Grocery
GM
Clothing
47 Interim Results 201920 - November 2019
Grow connected
services
5
Nectar
bull Biggest loyalty programme in the UK
bull Over 18 million collectors
bull Most recognised loyalty brand in the UK
bull Launch of Nectar digital- 21 million app users- Increase in overall Nectar participation- Increased levels of personalisation- 138000 new Nectar customers- 1 app on launch weekend
bull Coalition strengthened with addition of Esso in June 2019
48 Interim Results 201920 - November 2019
Provide a seamless customer
experience
6
49 Interim Results 201920 - November 2019
Provide a seamless customer
experience
6
Digital
bull Groceries Online sales penetration of 8- App accounts for over 20 of orders
bull 21 million digital Nectar app users
bull 14 million Argos Financial Services app downloads
bull Smartshop rollout in over 350 stores
Groceries online
Chop Chop
SmartShop
Universaldiscovery
Seamlessfinancialservices
Singlebasket
50 Interim Results 201920 - November 2019
We will help our customers live well for less
Confident in the core Integrated customer offer
One multi brand multi channel business
Strong cash generation supporting investment dividend and allowing deleverage
Financial flexibility and resilience
Sustainable cost reduction covering cost inflation and funding investment in our competitive offer
QampA
APPENDIX Interim Results 201920 - November 2019
Appendices
APPENDIX Interim Results 201920 - November 2019
Guidance for 201920
1
Spacebull Expect to open 2 new Sainsburyrsquos supermarkets and up to 15 convenience storesbull Expect to open around 25 Argos stores in Sainsburyrsquos (of which 11 are
relocations) resulting in around 305 Argos stores in supermarketsbull Expect to close 2 supermarkets around 25 convenience stores and around 20
Argos stores in FY201920 as part of announced property closure programme of 10-15 supermarkets 30-40 convenience stores and 60-70 Argos stores
Financial Servicesbull Financial services underlying operating profit expected to be cpound45m including a
cpound10m benefit as a result of a change in transfer pricing between Argos and Argos Financial Services
bull Financial Services non-underlying costs are expected to be around pound30mbull No further capital injections into the Bank are expected following pound35m in H1 201920
Depreciation and amortisationbull Expect underlying retail depreciation and amortisation of around pound12bn
including cpound500m right of use asset depreciation
CostsOperating cost inflationbull Cost inflation between 2 and 3Cost savingsbull Continue to deliver cost savings to at least offset the impact of cost inflation
Finance costsbull Net finance costs of around pound405m including pound320m lease interest in
201920 following the introduction of IFRS 16
One-off itemsbull In 201920 cash outflows as a result of items excluded from
underlying results should not exceed pound100mbull Property strategy programme one-off costs expected to be
pound230m-pound270m of which cash costs are pound30-40m
Dividendbull Sainsburyrsquos plans to change the full year dividend policy to 19x cover by
underlying earnings (versus 20x previously) to offset the dilutive (non cash) impact of IFRS 16 on underlying earnings
Capital expenditurebull Retail capital expenditure to be around pound550mbull Retail capital expenditure is expected to be around pound550m-pound600m per
annum over the medium term
Net debtbull Net debt before fair value movements on derivatives to reduce by at
least pound300m
Tax ratebull Underlying tax rate to be between 25 and 26
APPENDIX Interim Results 201920 - November 2019
Retail sales
1 Sales including VAT excluding fuel
LFL sales growth1
(10)
Sales from net new space1
04
Total sales growth1
(06)
Supermarkets2
(07)
Convenience20
Groceries Online
70
Channels
(01)(25)
(12)
2 Supermarket sales include Argos SiS sales FY 1819 16
pound139bn
pound103bnGrocery
pound30bnGeneralMerchandise
pound488mClothing
2
Chart1
201819
194
66
1
Sheet1
APPENDIX Interim Results 201920 - November 2019
Sainsburyrsquos sales area and store numbersAs at 21 September 2019
Sainsburyrsquos store estateAs at 21 September 2019
Sq ftsales area
82446
870
40001 to60000
20001 to40000
10000 to20000
Under10000 Total
Over60000
0122122
0197197
0175175
06767
824607
1431
Argos storesArgos in SainsburyrsquosArgos in HomebaseOtherArgos total store numbers
Habitat1
Collection points
594281
8-
883
16317
As at21 Sept 2019
Disposalsclosures
Newstores
As at9 March 2019
17--8
-1
(7)-
(2)-
(9)
-(36)
588288
6-
88216
282
ConvenienceSupermarketsTotal stores
Number of stores
Sq ftsales area
1929350
2279
40001 to60000
20001 to40000
10000 to20000
Under10000 Total
Over60000
-18441844
-58185818
-85018501
-46604660
19292117323102
ConvenienceSupermarketsTotal stores
Space by store size (lsquo000 sq ft)
Argos and Habitat store numbers
1 5 Habitat stores 11 Habitat stores in Sainsburys
4
APPENDIX Interim Results 201920 - November 2019
ClosureBitterne West
Sainsburyrsquos investment programme201920
Q1
Supermarkets ConvenienceNew storesMilton Keynes Brooklands District CentBromley High StLeeds Wike Ridge LaneSalford Harbour CityCanterbury High St
ReplacementMayfair Stratton St
ClosuresMayfairWarren St
Q1Q1Q1Q2Q2
Q2
Q1Q2
5
APPENDIX Interim Results 201920 - November 2019
Retail margin
Retail sales (inc VAT inc fuel)(exc VAT inc fuel)
Retail underlying EBITDAR1
Retail underlying EBITDAR margin 2
at constant fuel pricesRetail underlying operating profit3
Retail underlying operating margin 4
at constant fuel prices
1656714808
10677272
4373030
1661214856
11147575
4873333
030342
30 bps28 bps10333 bps32 bps
1 Retail underlying operating profit before net rental income of pound6 million and underlying depreciation and amortisation of pound636 million2 Retail underlying EBITDAR divided by underlying retail sales excluding VAT3 Retail underlying earnings before interest tax and Sainsburyrsquos underlying share of post-tax profit from joint ventures4 Retail underlying operating profit divided by underlying retail sales excluding VAT
poundm H1201920
H1201819
Change
6
APPENDIX Interim Results 201920 - November 2019
H1201920
H1201819
Group retail
Return on capital employed 1
Net debt to EBITDAR (times)23
Fixed charge cover (times)2
Underlying tax rate Core retail capex sales5
713126
26515
743326
25715
poundm
1 ROCE Return is defined as a 52 week rolling underlying profit before interest and tax Capital employed is defined as group net assets2 Net debt of pound6778 million includes lease obligations under IFRS 16 and perpetual securities treated as debt divided by Group underlying EBITDAR of pound2171 million calculated for a 52-week period to 21 September 20193 Group underlying EBITDAR divided by rent (both capital and interest) and net finance costs where interest on perpetual securities is treated as an underlying finance costs4 52 weeks to 22nd September 2018 is not available due to the implementation of IFRS 16 Comparatives therefore reflect the 52 weeks to 9th March 20195 Includes retail sales inc vat inc fuel
4
4
7
APPENDIX Interim Results 201920 - November 2019
Plc Board
Kevin OrsquoByrneChief Financial Officer
Mike Coupe Group Chief Executive
Dame Susan Rice Senior Independent Director
Matt BrittinNon-Executive Director
Jo HarlowNon-Executive Director
Brian CassinNon-Executive Director
David KeensNon-Executive Director
Jean Tomlin Non-Executive Director
Martin Scicluna Chairman
8
APPENDIX Interim Results 201920 - November 2019
Plc Board
Mike Coupe Group Chief Executive Officer
Skills and experienceAppointed Group Chief Executive Officer on 9 July 2014 Mike has been a member of the Operating Board since October 2004 Mike has vast retail industry experience in trading strategy marketing digital and online as well as multi-site store experience He joined Sainsburyrsquos from Big Food Group where he was a board director of Big Food Group PLC and Managing Director of Iceland Food Stores He previously worked for both Asda and Tesco PLC where he served in a variety of senior management roles
Date of appointment 1 August 2007Mike has served as an Executive Director since 1 August 2007 and as Chief Executive Officer since 9 July 2014
Committee membershipCorporate Responsibility and Sustainability Committee
Kevin OrsquoByrne Chief Financial Officer
Skills and experienceKevin brings to the Board a wealth of retail and finance experience Kevin was previously Chief Executive Officer of Poundland Group Limited until December 2016 and held executive roles at Kingfisher plc from 2008 to 2015 including Divisional Director UK China and Turkey Chief Executive Officer of BampQ UK amp Ireland and Group Finance Director He was previously Group Finance Director of Dixons Retail plc and European Finance Director of Quaker Oats He was a Non-Executive Director of Land Securities Group PLC from 2008 to September 2017 where he was Chairman of the Audit Committee and Senior Independent Director
Date of appointment 9 January 2017
Other current rolesNon-Executive Director of Greene King plc
Skills and experienceMartin brings a breadth of experience and leadership in both executive and non-executive roles His previous roles include positions as the Chairman of Great Portland Estates plc Senior Independent Director and Chair of the Audit Committee of Worldpay Inc and Non-Executive Director and Chair of the Audit Committee of Lloyds Banking Group plc He was a partner at Deloitte LLP for 26 years serving as Chairman from 1995 to 2007 where his clients included Dixons WH Smith Alliance Unichem and Cadburyrsquos
Other current rolesChairman of RSA Insurance Group plc
Martin Scicluna Chairman
Date of appointment 1 November 2018 Martin joined the Board as Chairman Designate and Non-Executive Director on 1 November 2018 He was appointed as Chairman of the Board on 10 March 2019
Committee membershipChair of the Nomination Committee
Dame Susan Rice Senior Independent Director
Skills and experienceSusan has extensive experience as a Non-Executive Director as well as in retail banking financial services leadership and sustainability Her career in retail bankingis particularly relevant to our ownership ofSainsburyrsquos Bank Previously Susan was a member of the First Ministerrsquos Council of Economic Advisors Managing Director of Lloyds Banking Group Scotland and was previously Chief Executive and then Chairman of Lloyds TSB Scotland plc She has also held a range of other non-executive directorships including at the Bank of England and SSE plc
Committee membershipChair of the Remuneration Committee and a member of the Nomination Committee
Date of appointment 1 June 2013
Other current rolesChair of Scottish Water and Business Stream Chair of the Scottish Fiscal Commission Non-Executive Director of the North American Income Trust C Hoare and Co and Senior Independent Director of the North American Income Trust
9
Other current rolesNon-Executive Director and Chairman of the Audit Committee of Centrica plc
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jean Tomlin Non-Executive Director
Skills and experienceJean has extensive experience and breadth of skills in human resources and corporate responsibility Jean was formerly Director of HR Workforce and Accreditation for The London OrganisingCommittee of the Olympic and Paralympic Games where she set the strategic direction to ensure the mobilisation of the combined 200000-strong workforce including paid staff volunteers and contractors which represented the recruitment and mobilisation of the largest peacetime workforce and set the industry standard for volunteering with the highly acclaimed Games She was previously Group HR Director at Marks and Spencer Group Plc HR Director and founder member of Egg plc and Sales amp Operations Director of Prudential Direct
Date of appointment 1 January 2013
Committee membershipAudit Committee Corporate Responsibility and Sustainability Committee and Nomination Committee
David Keens Non-Executive Director
Skills and experienceDavid has extensive retail experience and knowledge of consumer facing businesses together with his core skills in finance David was formerly Group Finance Director of next plc from 1991 to 2015 and their Group Treasurer from 1986 to 1991 Previous management experience includes nine years in the UK and overseas operations of multinational food manufacturer Nabisco and prior to that seven years in the accountancy profession
Date of appointment 29 April 2015
Committee membershipChair of the Audit Committee and a member of the Nomination Committee
Other current rolesIndependent Board member of Capri Holdings Limited Non-Executive Director of Hakluyt and Chief Executive Officer of Chanzo Limited
Other current rolesNon-Executive Director Senior Independent Director and Chair of the Audit Committee of Auto Trader Group plc
Matt BrittinNon-Executive Director
Skills and experienceMatt has extensive experience of running a high profile fast moving innovative digital business Since 2015 he has been responsible for Googlersquos business and operations in Europe the Middle East and Africa and hersquos been in leadership roles at Google since 2007 Prior to that Matt spent much of his career in media and marketing with particular interests in strategy commercial development and sales performance This included commercial and digital leadership roles in UK media
Date of appointment 27 January 2011
Committee membershipNomination Committee and Remuneration Committee
Other current rolesGooglersquos President ndash Europe Middle East and Africa and Director of The Media Trust
Brian Cassin Non-Executive Director
Skills and experienceBrian brings present day experience of running a FTSE40 group and of big data and analytics ndash topics of key importance to Sainsburyrsquos Brian joined Experian plc as Chief Financial Officer in April 2012 a post he held until his appointment as Chief Executive Officer in July 2014 Prior to this Brian spent his career in investment banking at Greenhill amp Co where he was Managing Director and Partner Brian has also held various roles at Baring Brothers International and at the London Stock Exchange
Date of appointment 1 April 2016
Committee membershipAudit Committee and Nomination Committee
Other current rolesChief Executive Officer of Experian plc
10
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jo Harlow Non-Executive Director
Skills and experienceJo brings a wealth of experience in consumer-facing businesses and in the telecoms and technology industry bothin the UK and internationally Jo spent 12 years in a variety of senior management roles with Nokia and Microsoft Prior to this she spent eight years at PampG and 11 years at Reebok in senior sales and marketing positions in both Europe and the US
Date of appointment 11 September 2017
Committee membershipChair of the Corporate Responsibility and Sustainability Committee and member of the Nomination Committee and Remuneration Committee
Life PresidentLord Sainsbury of Preston Candover KG
Other current rolesNon-Executive Director of InterContinental Hotels plc Non-Executive Director of Halmaplc and Member of the Supervisory Board of Ceconomy AG
11
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief Executive
Tim FallowfieldCompany Secretary amp Corporate Services Director
Kevin OrsquoByrne Chief Financial Officer
Jim BrownChief Executive Officer of Sainsburyrsquos Bank
Paul Mills-HicksFood Commercial Director
Angie RisleyGroup HR Director
Phil JordanGroup Chief InformationOfficer
Simon RobertsRetail and Operations Director
Clo MoriartyGroup Chief Digital Officer
12
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief ExecutiveSee Appendix page 9
Kevin OrsquoByrneChief Financial OfficerSee Appendix page 9
Tim FallowfieldCompany Secretary amp Corporate Services Director
Date of appointment September 2004
Skills and experienceTim joined Sainsburyrsquos in 2001 as Company Secretary and joined the Operating Board in September 2004 In addition to his role as Company Secretary Tim is responsible for the Corporate Services Division comprising Legal Services Data Governance Safety Shareholder Services Insurance and Central Security He chairs the Group Safety Committee and the Data Governance Committee Tim joined Sainsburyrsquos from Exelplc the global logistics company now part of DHL where he was Company Secretary and General Counsel He began his career at the international law firm Clifford Chance and is a qualified solicitor Tim is Chairman of the Disability Confident Business Leaders Group which works with Government in shaping the disability employment agenda and in raising awareness of the benefits of employing disabled people
Jim BrownCEO of Sainsburyrsquos Bank
Skills and experienceJim joined Sainsburyrsquos Bank as CEO in June 2019 and is also a member of the Sainsburyrsquos Group Operating Board He has held a number of senior international Financial Services roles - most recently for RBS in the UK as CEO of Williams and Glyn and prior to that CEO of Ulster Bank in Northern Ireland and the Republic of Ireland Before moving to Ireland he was based in Hong Kong and was CEO Retail and Commercial Banking Asia and the Middle East for RBS and ABN AMRO He has also been a member of the RBS Group Management Committee ABN AMRO Executive Group ABN AMRO Global Consumer Leadership Team and the RBSBank of China Joint Steering Committee Earlier in his career he held a number of senior executive roles for Citibank in Asia and Australia and New Zealand Jim has also held various Board positions including at Ulster Bank Saudi Hollandi Bank The Royal Bank of Scotland (China) Co Ltd and RBS (Pakistan) Ltd He is also a past President of the Institute of Banking in Ireland He is currently a Certified Bank Director
Date of appointment August 2019
Paul Mills-HicksFood Commercial Director
Skills and experiencePaul joined the Operating Board in May 2014 as Food Commercial Director having spent over ten years at Sainsburyrsquos He was closely involved in the formation and execution of the lsquoMaking Sainsburyrsquos Great Againrsquo strategy Following this he held a variety of roles in commercial strategy and finance most recently as Business Unit Director for Grocery Prior to Sainsburyrsquos Paul was European Controller at Marks and Spencer Group PLC and a Director at UBS Warburg
Date of appointment May 2014
13
APPENDIX Interim Results 201920 - November 2019
Operating Board
Angie RisleyGroup HR Director
Skills and experienceAngie was appointed Group HR Director and a member of the Operating Board in January 2013 with responsibility for human resources Angie is also a Director of Sainsburyrsquos Bank plc Angie was most recently Non-Executive Director and Chairman of the Remuneration Committee of Serco plc and prior to this was Group HR Director of Lloyds Banking Group and an Executive Director of Whitbread PLC with responsibility for HR and Corporate Social Responsibility Angie is currently Non-Executive Director and Chair of the Remuneration Committee at Smith amp Nephew plc
Date of appointment January 2013
Phil JordanGroup Chief Information Officer
Skills and experiencePhil joined the Board in January 2018 and has brought a fresh globalperspective on technology to the Operating Board in addition to a wealth of experience in digital data and business transformation Prior to joining Sainsburyrsquos Phil had a long and successful track record in telecommunications Most recently he was Global Chief Information Officer at Telefonica overseeing Digital Transformation and Information Technology and prior to that was Chief Information Officer for Vodafone UKIreland Phil has worked as a Non-Executive Advisor on Technology in the Investment amp Retail Banking sector and is currently a Non-Executive Director of TalkTalk Telecom Group PLC and chairs its Cyber-Security Committee
Date of appointment January 2018
Simon RobertsRetail and Operations Director
Skills and experienceSimon joined Sainsburyrsquos and the Operating Board in July 2017 as Central Retail amp Operations Director responsible for Stores Central operation and Logistics In his previous role he was Executive Vice President of Walgreens Boots Alliance and President of Boots with responsibility for commercial and retail operations across the UK and Ireland Prior to Boots Simon was at Marks and Spencer Group PLC where he held operational and customer leadership roles across stores divisions and central operations Simon is also the Non-Executive Chairman at the Institute ofCustomer Service
Date of appointment July 2017
Clodagh MoriartyGroup Chief Digital Officer
Skills and experienceClodagh was appointed Group Chief Digital Officer in June 2018 Clodagh leads the delivery of a consistent and first-rate digital experience for customers across Sainsburyrsquos Argos and Sainsburyrsquos BankClodagh joined Sainsburyrsquos in 2010 from Bain amp Co management consultants where she had gained experience working on a broad range of projects across multiple sectors and countries Following two years as Head of Strategy at Sainsburyrsquosshe moved into Food Commercial as Category Manager for Meal Solutions and then became Head of Online Trading spanning Food General Merchandise and Clothing before being promoted to Director of Online in 2016 In this role Clodagh was instrumental in driving innovation within Groceries Online and launching new initiatives including SmartShop and Chop Chop
Date of appointment June 2018
14
APPENDIX Interim Results 201920 - November 2019
Supplementary financial details
3 Financial calendarQ3 trading statement(15 weeks to 4 January 2020)
Preliminary results(52 weeks to 7 March 2020)
8 January 2020
30 April 2020
1 Weighted average number of shares
The interim dividend datesOrdinary shares
Ex-dividend 14 November 2019Record 15 November 2019Payment 20 December 2019
Product Quality Framework helps us fund investment
PQF cereals case study
BAU savings to offset cost inflation
Strategic cost transformation 5 year plan
Slide Number 43
Financial Services Priorities
Financial Services reshaping the portfolio
Financial Services key targets
Nectar
Slide Number 48
Digital
We will help our customers live well for less
Slide Number 51
Slide Number 52
Guidance for 201920
Retail sales
Sainsburyrsquos sales area and store numbers
Sainsburyrsquos store estate
Sainsburyrsquos investment programme
Retail margin
Group retail
Plc Board
Plc Board
Plc Board
Plc Board
Operating Board
Operating Board
Operating Board
Supplementary financial details
Contacts
Column1
201819
Grocery
19
GM
7
Clothing
1
To resize chart data range drag lower right corner of range
Grocery
GM
Clothing
48 Interim Results 201920 - November 2019
Provide a seamless customer
experience
6
49 Interim Results 201920 - November 2019
Provide a seamless customer
experience
6
Digital
bull Groceries Online sales penetration of 8- App accounts for over 20 of orders
bull 21 million digital Nectar app users
bull 14 million Argos Financial Services app downloads
bull Smartshop rollout in over 350 stores
Groceries online
Chop Chop
SmartShop
Universaldiscovery
Seamlessfinancialservices
Singlebasket
50 Interim Results 201920 - November 2019
We will help our customers live well for less
Confident in the core Integrated customer offer
One multi brand multi channel business
Strong cash generation supporting investment dividend and allowing deleverage
Financial flexibility and resilience
Sustainable cost reduction covering cost inflation and funding investment in our competitive offer
QampA
APPENDIX Interim Results 201920 - November 2019
Appendices
APPENDIX Interim Results 201920 - November 2019
Guidance for 201920
1
Spacebull Expect to open 2 new Sainsburyrsquos supermarkets and up to 15 convenience storesbull Expect to open around 25 Argos stores in Sainsburyrsquos (of which 11 are
relocations) resulting in around 305 Argos stores in supermarketsbull Expect to close 2 supermarkets around 25 convenience stores and around 20
Argos stores in FY201920 as part of announced property closure programme of 10-15 supermarkets 30-40 convenience stores and 60-70 Argos stores
Financial Servicesbull Financial services underlying operating profit expected to be cpound45m including a
cpound10m benefit as a result of a change in transfer pricing between Argos and Argos Financial Services
bull Financial Services non-underlying costs are expected to be around pound30mbull No further capital injections into the Bank are expected following pound35m in H1 201920
Depreciation and amortisationbull Expect underlying retail depreciation and amortisation of around pound12bn
including cpound500m right of use asset depreciation
CostsOperating cost inflationbull Cost inflation between 2 and 3Cost savingsbull Continue to deliver cost savings to at least offset the impact of cost inflation
Finance costsbull Net finance costs of around pound405m including pound320m lease interest in
201920 following the introduction of IFRS 16
One-off itemsbull In 201920 cash outflows as a result of items excluded from
underlying results should not exceed pound100mbull Property strategy programme one-off costs expected to be
pound230m-pound270m of which cash costs are pound30-40m
Dividendbull Sainsburyrsquos plans to change the full year dividend policy to 19x cover by
underlying earnings (versus 20x previously) to offset the dilutive (non cash) impact of IFRS 16 on underlying earnings
Capital expenditurebull Retail capital expenditure to be around pound550mbull Retail capital expenditure is expected to be around pound550m-pound600m per
annum over the medium term
Net debtbull Net debt before fair value movements on derivatives to reduce by at
least pound300m
Tax ratebull Underlying tax rate to be between 25 and 26
APPENDIX Interim Results 201920 - November 2019
Retail sales
1 Sales including VAT excluding fuel
LFL sales growth1
(10)
Sales from net new space1
04
Total sales growth1
(06)
Supermarkets2
(07)
Convenience20
Groceries Online
70
Channels
(01)(25)
(12)
2 Supermarket sales include Argos SiS sales FY 1819 16
pound139bn
pound103bnGrocery
pound30bnGeneralMerchandise
pound488mClothing
2
Chart1
201819
194
66
1
Sheet1
APPENDIX Interim Results 201920 - November 2019
Sainsburyrsquos sales area and store numbersAs at 21 September 2019
Sainsburyrsquos store estateAs at 21 September 2019
Sq ftsales area
82446
870
40001 to60000
20001 to40000
10000 to20000
Under10000 Total
Over60000
0122122
0197197
0175175
06767
824607
1431
Argos storesArgos in SainsburyrsquosArgos in HomebaseOtherArgos total store numbers
Habitat1
Collection points
594281
8-
883
16317
As at21 Sept 2019
Disposalsclosures
Newstores
As at9 March 2019
17--8
-1
(7)-
(2)-
(9)
-(36)
588288
6-
88216
282
ConvenienceSupermarketsTotal stores
Number of stores
Sq ftsales area
1929350
2279
40001 to60000
20001 to40000
10000 to20000
Under10000 Total
Over60000
-18441844
-58185818
-85018501
-46604660
19292117323102
ConvenienceSupermarketsTotal stores
Space by store size (lsquo000 sq ft)
Argos and Habitat store numbers
1 5 Habitat stores 11 Habitat stores in Sainsburys
4
APPENDIX Interim Results 201920 - November 2019
ClosureBitterne West
Sainsburyrsquos investment programme201920
Q1
Supermarkets ConvenienceNew storesMilton Keynes Brooklands District CentBromley High StLeeds Wike Ridge LaneSalford Harbour CityCanterbury High St
ReplacementMayfair Stratton St
ClosuresMayfairWarren St
Q1Q1Q1Q2Q2
Q2
Q1Q2
5
APPENDIX Interim Results 201920 - November 2019
Retail margin
Retail sales (inc VAT inc fuel)(exc VAT inc fuel)
Retail underlying EBITDAR1
Retail underlying EBITDAR margin 2
at constant fuel pricesRetail underlying operating profit3
Retail underlying operating margin 4
at constant fuel prices
1656714808
10677272
4373030
1661214856
11147575
4873333
030342
30 bps28 bps10333 bps32 bps
1 Retail underlying operating profit before net rental income of pound6 million and underlying depreciation and amortisation of pound636 million2 Retail underlying EBITDAR divided by underlying retail sales excluding VAT3 Retail underlying earnings before interest tax and Sainsburyrsquos underlying share of post-tax profit from joint ventures4 Retail underlying operating profit divided by underlying retail sales excluding VAT
poundm H1201920
H1201819
Change
6
APPENDIX Interim Results 201920 - November 2019
H1201920
H1201819
Group retail
Return on capital employed 1
Net debt to EBITDAR (times)23
Fixed charge cover (times)2
Underlying tax rate Core retail capex sales5
713126
26515
743326
25715
poundm
1 ROCE Return is defined as a 52 week rolling underlying profit before interest and tax Capital employed is defined as group net assets2 Net debt of pound6778 million includes lease obligations under IFRS 16 and perpetual securities treated as debt divided by Group underlying EBITDAR of pound2171 million calculated for a 52-week period to 21 September 20193 Group underlying EBITDAR divided by rent (both capital and interest) and net finance costs where interest on perpetual securities is treated as an underlying finance costs4 52 weeks to 22nd September 2018 is not available due to the implementation of IFRS 16 Comparatives therefore reflect the 52 weeks to 9th March 20195 Includes retail sales inc vat inc fuel
4
4
7
APPENDIX Interim Results 201920 - November 2019
Plc Board
Kevin OrsquoByrneChief Financial Officer
Mike Coupe Group Chief Executive
Dame Susan Rice Senior Independent Director
Matt BrittinNon-Executive Director
Jo HarlowNon-Executive Director
Brian CassinNon-Executive Director
David KeensNon-Executive Director
Jean Tomlin Non-Executive Director
Martin Scicluna Chairman
8
APPENDIX Interim Results 201920 - November 2019
Plc Board
Mike Coupe Group Chief Executive Officer
Skills and experienceAppointed Group Chief Executive Officer on 9 July 2014 Mike has been a member of the Operating Board since October 2004 Mike has vast retail industry experience in trading strategy marketing digital and online as well as multi-site store experience He joined Sainsburyrsquos from Big Food Group where he was a board director of Big Food Group PLC and Managing Director of Iceland Food Stores He previously worked for both Asda and Tesco PLC where he served in a variety of senior management roles
Date of appointment 1 August 2007Mike has served as an Executive Director since 1 August 2007 and as Chief Executive Officer since 9 July 2014
Committee membershipCorporate Responsibility and Sustainability Committee
Kevin OrsquoByrne Chief Financial Officer
Skills and experienceKevin brings to the Board a wealth of retail and finance experience Kevin was previously Chief Executive Officer of Poundland Group Limited until December 2016 and held executive roles at Kingfisher plc from 2008 to 2015 including Divisional Director UK China and Turkey Chief Executive Officer of BampQ UK amp Ireland and Group Finance Director He was previously Group Finance Director of Dixons Retail plc and European Finance Director of Quaker Oats He was a Non-Executive Director of Land Securities Group PLC from 2008 to September 2017 where he was Chairman of the Audit Committee and Senior Independent Director
Date of appointment 9 January 2017
Other current rolesNon-Executive Director of Greene King plc
Skills and experienceMartin brings a breadth of experience and leadership in both executive and non-executive roles His previous roles include positions as the Chairman of Great Portland Estates plc Senior Independent Director and Chair of the Audit Committee of Worldpay Inc and Non-Executive Director and Chair of the Audit Committee of Lloyds Banking Group plc He was a partner at Deloitte LLP for 26 years serving as Chairman from 1995 to 2007 where his clients included Dixons WH Smith Alliance Unichem and Cadburyrsquos
Other current rolesChairman of RSA Insurance Group plc
Martin Scicluna Chairman
Date of appointment 1 November 2018 Martin joined the Board as Chairman Designate and Non-Executive Director on 1 November 2018 He was appointed as Chairman of the Board on 10 March 2019
Committee membershipChair of the Nomination Committee
Dame Susan Rice Senior Independent Director
Skills and experienceSusan has extensive experience as a Non-Executive Director as well as in retail banking financial services leadership and sustainability Her career in retail bankingis particularly relevant to our ownership ofSainsburyrsquos Bank Previously Susan was a member of the First Ministerrsquos Council of Economic Advisors Managing Director of Lloyds Banking Group Scotland and was previously Chief Executive and then Chairman of Lloyds TSB Scotland plc She has also held a range of other non-executive directorships including at the Bank of England and SSE plc
Committee membershipChair of the Remuneration Committee and a member of the Nomination Committee
Date of appointment 1 June 2013
Other current rolesChair of Scottish Water and Business Stream Chair of the Scottish Fiscal Commission Non-Executive Director of the North American Income Trust C Hoare and Co and Senior Independent Director of the North American Income Trust
9
Other current rolesNon-Executive Director and Chairman of the Audit Committee of Centrica plc
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jean Tomlin Non-Executive Director
Skills and experienceJean has extensive experience and breadth of skills in human resources and corporate responsibility Jean was formerly Director of HR Workforce and Accreditation for The London OrganisingCommittee of the Olympic and Paralympic Games where she set the strategic direction to ensure the mobilisation of the combined 200000-strong workforce including paid staff volunteers and contractors which represented the recruitment and mobilisation of the largest peacetime workforce and set the industry standard for volunteering with the highly acclaimed Games She was previously Group HR Director at Marks and Spencer Group Plc HR Director and founder member of Egg plc and Sales amp Operations Director of Prudential Direct
Date of appointment 1 January 2013
Committee membershipAudit Committee Corporate Responsibility and Sustainability Committee and Nomination Committee
David Keens Non-Executive Director
Skills and experienceDavid has extensive retail experience and knowledge of consumer facing businesses together with his core skills in finance David was formerly Group Finance Director of next plc from 1991 to 2015 and their Group Treasurer from 1986 to 1991 Previous management experience includes nine years in the UK and overseas operations of multinational food manufacturer Nabisco and prior to that seven years in the accountancy profession
Date of appointment 29 April 2015
Committee membershipChair of the Audit Committee and a member of the Nomination Committee
Other current rolesIndependent Board member of Capri Holdings Limited Non-Executive Director of Hakluyt and Chief Executive Officer of Chanzo Limited
Other current rolesNon-Executive Director Senior Independent Director and Chair of the Audit Committee of Auto Trader Group plc
Matt BrittinNon-Executive Director
Skills and experienceMatt has extensive experience of running a high profile fast moving innovative digital business Since 2015 he has been responsible for Googlersquos business and operations in Europe the Middle East and Africa and hersquos been in leadership roles at Google since 2007 Prior to that Matt spent much of his career in media and marketing with particular interests in strategy commercial development and sales performance This included commercial and digital leadership roles in UK media
Date of appointment 27 January 2011
Committee membershipNomination Committee and Remuneration Committee
Other current rolesGooglersquos President ndash Europe Middle East and Africa and Director of The Media Trust
Brian Cassin Non-Executive Director
Skills and experienceBrian brings present day experience of running a FTSE40 group and of big data and analytics ndash topics of key importance to Sainsburyrsquos Brian joined Experian plc as Chief Financial Officer in April 2012 a post he held until his appointment as Chief Executive Officer in July 2014 Prior to this Brian spent his career in investment banking at Greenhill amp Co where he was Managing Director and Partner Brian has also held various roles at Baring Brothers International and at the London Stock Exchange
Date of appointment 1 April 2016
Committee membershipAudit Committee and Nomination Committee
Other current rolesChief Executive Officer of Experian plc
10
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jo Harlow Non-Executive Director
Skills and experienceJo brings a wealth of experience in consumer-facing businesses and in the telecoms and technology industry bothin the UK and internationally Jo spent 12 years in a variety of senior management roles with Nokia and Microsoft Prior to this she spent eight years at PampG and 11 years at Reebok in senior sales and marketing positions in both Europe and the US
Date of appointment 11 September 2017
Committee membershipChair of the Corporate Responsibility and Sustainability Committee and member of the Nomination Committee and Remuneration Committee
Life PresidentLord Sainsbury of Preston Candover KG
Other current rolesNon-Executive Director of InterContinental Hotels plc Non-Executive Director of Halmaplc and Member of the Supervisory Board of Ceconomy AG
11
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief Executive
Tim FallowfieldCompany Secretary amp Corporate Services Director
Kevin OrsquoByrne Chief Financial Officer
Jim BrownChief Executive Officer of Sainsburyrsquos Bank
Paul Mills-HicksFood Commercial Director
Angie RisleyGroup HR Director
Phil JordanGroup Chief InformationOfficer
Simon RobertsRetail and Operations Director
Clo MoriartyGroup Chief Digital Officer
12
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief ExecutiveSee Appendix page 9
Kevin OrsquoByrneChief Financial OfficerSee Appendix page 9
Tim FallowfieldCompany Secretary amp Corporate Services Director
Date of appointment September 2004
Skills and experienceTim joined Sainsburyrsquos in 2001 as Company Secretary and joined the Operating Board in September 2004 In addition to his role as Company Secretary Tim is responsible for the Corporate Services Division comprising Legal Services Data Governance Safety Shareholder Services Insurance and Central Security He chairs the Group Safety Committee and the Data Governance Committee Tim joined Sainsburyrsquos from Exelplc the global logistics company now part of DHL where he was Company Secretary and General Counsel He began his career at the international law firm Clifford Chance and is a qualified solicitor Tim is Chairman of the Disability Confident Business Leaders Group which works with Government in shaping the disability employment agenda and in raising awareness of the benefits of employing disabled people
Jim BrownCEO of Sainsburyrsquos Bank
Skills and experienceJim joined Sainsburyrsquos Bank as CEO in June 2019 and is also a member of the Sainsburyrsquos Group Operating Board He has held a number of senior international Financial Services roles - most recently for RBS in the UK as CEO of Williams and Glyn and prior to that CEO of Ulster Bank in Northern Ireland and the Republic of Ireland Before moving to Ireland he was based in Hong Kong and was CEO Retail and Commercial Banking Asia and the Middle East for RBS and ABN AMRO He has also been a member of the RBS Group Management Committee ABN AMRO Executive Group ABN AMRO Global Consumer Leadership Team and the RBSBank of China Joint Steering Committee Earlier in his career he held a number of senior executive roles for Citibank in Asia and Australia and New Zealand Jim has also held various Board positions including at Ulster Bank Saudi Hollandi Bank The Royal Bank of Scotland (China) Co Ltd and RBS (Pakistan) Ltd He is also a past President of the Institute of Banking in Ireland He is currently a Certified Bank Director
Date of appointment August 2019
Paul Mills-HicksFood Commercial Director
Skills and experiencePaul joined the Operating Board in May 2014 as Food Commercial Director having spent over ten years at Sainsburyrsquos He was closely involved in the formation and execution of the lsquoMaking Sainsburyrsquos Great Againrsquo strategy Following this he held a variety of roles in commercial strategy and finance most recently as Business Unit Director for Grocery Prior to Sainsburyrsquos Paul was European Controller at Marks and Spencer Group PLC and a Director at UBS Warburg
Date of appointment May 2014
13
APPENDIX Interim Results 201920 - November 2019
Operating Board
Angie RisleyGroup HR Director
Skills and experienceAngie was appointed Group HR Director and a member of the Operating Board in January 2013 with responsibility for human resources Angie is also a Director of Sainsburyrsquos Bank plc Angie was most recently Non-Executive Director and Chairman of the Remuneration Committee of Serco plc and prior to this was Group HR Director of Lloyds Banking Group and an Executive Director of Whitbread PLC with responsibility for HR and Corporate Social Responsibility Angie is currently Non-Executive Director and Chair of the Remuneration Committee at Smith amp Nephew plc
Date of appointment January 2013
Phil JordanGroup Chief Information Officer
Skills and experiencePhil joined the Board in January 2018 and has brought a fresh globalperspective on technology to the Operating Board in addition to a wealth of experience in digital data and business transformation Prior to joining Sainsburyrsquos Phil had a long and successful track record in telecommunications Most recently he was Global Chief Information Officer at Telefonica overseeing Digital Transformation and Information Technology and prior to that was Chief Information Officer for Vodafone UKIreland Phil has worked as a Non-Executive Advisor on Technology in the Investment amp Retail Banking sector and is currently a Non-Executive Director of TalkTalk Telecom Group PLC and chairs its Cyber-Security Committee
Date of appointment January 2018
Simon RobertsRetail and Operations Director
Skills and experienceSimon joined Sainsburyrsquos and the Operating Board in July 2017 as Central Retail amp Operations Director responsible for Stores Central operation and Logistics In his previous role he was Executive Vice President of Walgreens Boots Alliance and President of Boots with responsibility for commercial and retail operations across the UK and Ireland Prior to Boots Simon was at Marks and Spencer Group PLC where he held operational and customer leadership roles across stores divisions and central operations Simon is also the Non-Executive Chairman at the Institute ofCustomer Service
Date of appointment July 2017
Clodagh MoriartyGroup Chief Digital Officer
Skills and experienceClodagh was appointed Group Chief Digital Officer in June 2018 Clodagh leads the delivery of a consistent and first-rate digital experience for customers across Sainsburyrsquos Argos and Sainsburyrsquos BankClodagh joined Sainsburyrsquos in 2010 from Bain amp Co management consultants where she had gained experience working on a broad range of projects across multiple sectors and countries Following two years as Head of Strategy at Sainsburyrsquosshe moved into Food Commercial as Category Manager for Meal Solutions and then became Head of Online Trading spanning Food General Merchandise and Clothing before being promoted to Director of Online in 2016 In this role Clodagh was instrumental in driving innovation within Groceries Online and launching new initiatives including SmartShop and Chop Chop
Date of appointment June 2018
14
APPENDIX Interim Results 201920 - November 2019
Supplementary financial details
3 Financial calendarQ3 trading statement(15 weeks to 4 January 2020)
Preliminary results(52 weeks to 7 March 2020)
8 January 2020
30 April 2020
1 Weighted average number of shares
The interim dividend datesOrdinary shares
Ex-dividend 14 November 2019Record 15 November 2019Payment 20 December 2019
Product Quality Framework helps us fund investment
PQF cereals case study
BAU savings to offset cost inflation
Strategic cost transformation 5 year plan
Slide Number 43
Financial Services Priorities
Financial Services reshaping the portfolio
Financial Services key targets
Nectar
Slide Number 48
Digital
We will help our customers live well for less
Slide Number 51
Slide Number 52
Guidance for 201920
Retail sales
Sainsburyrsquos sales area and store numbers
Sainsburyrsquos store estate
Sainsburyrsquos investment programme
Retail margin
Group retail
Plc Board
Plc Board
Plc Board
Plc Board
Operating Board
Operating Board
Operating Board
Supplementary financial details
Contacts
Column1
201819
Grocery
19
GM
7
Clothing
1
To resize chart data range drag lower right corner of range
Grocery
GM
Clothing
49 Interim Results 201920 - November 2019
Provide a seamless customer
experience
6
Digital
bull Groceries Online sales penetration of 8- App accounts for over 20 of orders
bull 21 million digital Nectar app users
bull 14 million Argos Financial Services app downloads
bull Smartshop rollout in over 350 stores
Groceries online
Chop Chop
SmartShop
Universaldiscovery
Seamlessfinancialservices
Singlebasket
50 Interim Results 201920 - November 2019
We will help our customers live well for less
Confident in the core Integrated customer offer
One multi brand multi channel business
Strong cash generation supporting investment dividend and allowing deleverage
Financial flexibility and resilience
Sustainable cost reduction covering cost inflation and funding investment in our competitive offer
QampA
APPENDIX Interim Results 201920 - November 2019
Appendices
APPENDIX Interim Results 201920 - November 2019
Guidance for 201920
1
Spacebull Expect to open 2 new Sainsburyrsquos supermarkets and up to 15 convenience storesbull Expect to open around 25 Argos stores in Sainsburyrsquos (of which 11 are
relocations) resulting in around 305 Argos stores in supermarketsbull Expect to close 2 supermarkets around 25 convenience stores and around 20
Argos stores in FY201920 as part of announced property closure programme of 10-15 supermarkets 30-40 convenience stores and 60-70 Argos stores
Financial Servicesbull Financial services underlying operating profit expected to be cpound45m including a
cpound10m benefit as a result of a change in transfer pricing between Argos and Argos Financial Services
bull Financial Services non-underlying costs are expected to be around pound30mbull No further capital injections into the Bank are expected following pound35m in H1 201920
Depreciation and amortisationbull Expect underlying retail depreciation and amortisation of around pound12bn
including cpound500m right of use asset depreciation
CostsOperating cost inflationbull Cost inflation between 2 and 3Cost savingsbull Continue to deliver cost savings to at least offset the impact of cost inflation
Finance costsbull Net finance costs of around pound405m including pound320m lease interest in
201920 following the introduction of IFRS 16
One-off itemsbull In 201920 cash outflows as a result of items excluded from
underlying results should not exceed pound100mbull Property strategy programme one-off costs expected to be
pound230m-pound270m of which cash costs are pound30-40m
Dividendbull Sainsburyrsquos plans to change the full year dividend policy to 19x cover by
underlying earnings (versus 20x previously) to offset the dilutive (non cash) impact of IFRS 16 on underlying earnings
Capital expenditurebull Retail capital expenditure to be around pound550mbull Retail capital expenditure is expected to be around pound550m-pound600m per
annum over the medium term
Net debtbull Net debt before fair value movements on derivatives to reduce by at
least pound300m
Tax ratebull Underlying tax rate to be between 25 and 26
APPENDIX Interim Results 201920 - November 2019
Retail sales
1 Sales including VAT excluding fuel
LFL sales growth1
(10)
Sales from net new space1
04
Total sales growth1
(06)
Supermarkets2
(07)
Convenience20
Groceries Online
70
Channels
(01)(25)
(12)
2 Supermarket sales include Argos SiS sales FY 1819 16
pound139bn
pound103bnGrocery
pound30bnGeneralMerchandise
pound488mClothing
2
Chart1
201819
194
66
1
Sheet1
APPENDIX Interim Results 201920 - November 2019
Sainsburyrsquos sales area and store numbersAs at 21 September 2019
Sainsburyrsquos store estateAs at 21 September 2019
Sq ftsales area
82446
870
40001 to60000
20001 to40000
10000 to20000
Under10000 Total
Over60000
0122122
0197197
0175175
06767
824607
1431
Argos storesArgos in SainsburyrsquosArgos in HomebaseOtherArgos total store numbers
Habitat1
Collection points
594281
8-
883
16317
As at21 Sept 2019
Disposalsclosures
Newstores
As at9 March 2019
17--8
-1
(7)-
(2)-
(9)
-(36)
588288
6-
88216
282
ConvenienceSupermarketsTotal stores
Number of stores
Sq ftsales area
1929350
2279
40001 to60000
20001 to40000
10000 to20000
Under10000 Total
Over60000
-18441844
-58185818
-85018501
-46604660
19292117323102
ConvenienceSupermarketsTotal stores
Space by store size (lsquo000 sq ft)
Argos and Habitat store numbers
1 5 Habitat stores 11 Habitat stores in Sainsburys
4
APPENDIX Interim Results 201920 - November 2019
ClosureBitterne West
Sainsburyrsquos investment programme201920
Q1
Supermarkets ConvenienceNew storesMilton Keynes Brooklands District CentBromley High StLeeds Wike Ridge LaneSalford Harbour CityCanterbury High St
ReplacementMayfair Stratton St
ClosuresMayfairWarren St
Q1Q1Q1Q2Q2
Q2
Q1Q2
5
APPENDIX Interim Results 201920 - November 2019
Retail margin
Retail sales (inc VAT inc fuel)(exc VAT inc fuel)
Retail underlying EBITDAR1
Retail underlying EBITDAR margin 2
at constant fuel pricesRetail underlying operating profit3
Retail underlying operating margin 4
at constant fuel prices
1656714808
10677272
4373030
1661214856
11147575
4873333
030342
30 bps28 bps10333 bps32 bps
1 Retail underlying operating profit before net rental income of pound6 million and underlying depreciation and amortisation of pound636 million2 Retail underlying EBITDAR divided by underlying retail sales excluding VAT3 Retail underlying earnings before interest tax and Sainsburyrsquos underlying share of post-tax profit from joint ventures4 Retail underlying operating profit divided by underlying retail sales excluding VAT
poundm H1201920
H1201819
Change
6
APPENDIX Interim Results 201920 - November 2019
H1201920
H1201819
Group retail
Return on capital employed 1
Net debt to EBITDAR (times)23
Fixed charge cover (times)2
Underlying tax rate Core retail capex sales5
713126
26515
743326
25715
poundm
1 ROCE Return is defined as a 52 week rolling underlying profit before interest and tax Capital employed is defined as group net assets2 Net debt of pound6778 million includes lease obligations under IFRS 16 and perpetual securities treated as debt divided by Group underlying EBITDAR of pound2171 million calculated for a 52-week period to 21 September 20193 Group underlying EBITDAR divided by rent (both capital and interest) and net finance costs where interest on perpetual securities is treated as an underlying finance costs4 52 weeks to 22nd September 2018 is not available due to the implementation of IFRS 16 Comparatives therefore reflect the 52 weeks to 9th March 20195 Includes retail sales inc vat inc fuel
4
4
7
APPENDIX Interim Results 201920 - November 2019
Plc Board
Kevin OrsquoByrneChief Financial Officer
Mike Coupe Group Chief Executive
Dame Susan Rice Senior Independent Director
Matt BrittinNon-Executive Director
Jo HarlowNon-Executive Director
Brian CassinNon-Executive Director
David KeensNon-Executive Director
Jean Tomlin Non-Executive Director
Martin Scicluna Chairman
8
APPENDIX Interim Results 201920 - November 2019
Plc Board
Mike Coupe Group Chief Executive Officer
Skills and experienceAppointed Group Chief Executive Officer on 9 July 2014 Mike has been a member of the Operating Board since October 2004 Mike has vast retail industry experience in trading strategy marketing digital and online as well as multi-site store experience He joined Sainsburyrsquos from Big Food Group where he was a board director of Big Food Group PLC and Managing Director of Iceland Food Stores He previously worked for both Asda and Tesco PLC where he served in a variety of senior management roles
Date of appointment 1 August 2007Mike has served as an Executive Director since 1 August 2007 and as Chief Executive Officer since 9 July 2014
Committee membershipCorporate Responsibility and Sustainability Committee
Kevin OrsquoByrne Chief Financial Officer
Skills and experienceKevin brings to the Board a wealth of retail and finance experience Kevin was previously Chief Executive Officer of Poundland Group Limited until December 2016 and held executive roles at Kingfisher plc from 2008 to 2015 including Divisional Director UK China and Turkey Chief Executive Officer of BampQ UK amp Ireland and Group Finance Director He was previously Group Finance Director of Dixons Retail plc and European Finance Director of Quaker Oats He was a Non-Executive Director of Land Securities Group PLC from 2008 to September 2017 where he was Chairman of the Audit Committee and Senior Independent Director
Date of appointment 9 January 2017
Other current rolesNon-Executive Director of Greene King plc
Skills and experienceMartin brings a breadth of experience and leadership in both executive and non-executive roles His previous roles include positions as the Chairman of Great Portland Estates plc Senior Independent Director and Chair of the Audit Committee of Worldpay Inc and Non-Executive Director and Chair of the Audit Committee of Lloyds Banking Group plc He was a partner at Deloitte LLP for 26 years serving as Chairman from 1995 to 2007 where his clients included Dixons WH Smith Alliance Unichem and Cadburyrsquos
Other current rolesChairman of RSA Insurance Group plc
Martin Scicluna Chairman
Date of appointment 1 November 2018 Martin joined the Board as Chairman Designate and Non-Executive Director on 1 November 2018 He was appointed as Chairman of the Board on 10 March 2019
Committee membershipChair of the Nomination Committee
Dame Susan Rice Senior Independent Director
Skills and experienceSusan has extensive experience as a Non-Executive Director as well as in retail banking financial services leadership and sustainability Her career in retail bankingis particularly relevant to our ownership ofSainsburyrsquos Bank Previously Susan was a member of the First Ministerrsquos Council of Economic Advisors Managing Director of Lloyds Banking Group Scotland and was previously Chief Executive and then Chairman of Lloyds TSB Scotland plc She has also held a range of other non-executive directorships including at the Bank of England and SSE plc
Committee membershipChair of the Remuneration Committee and a member of the Nomination Committee
Date of appointment 1 June 2013
Other current rolesChair of Scottish Water and Business Stream Chair of the Scottish Fiscal Commission Non-Executive Director of the North American Income Trust C Hoare and Co and Senior Independent Director of the North American Income Trust
9
Other current rolesNon-Executive Director and Chairman of the Audit Committee of Centrica plc
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jean Tomlin Non-Executive Director
Skills and experienceJean has extensive experience and breadth of skills in human resources and corporate responsibility Jean was formerly Director of HR Workforce and Accreditation for The London OrganisingCommittee of the Olympic and Paralympic Games where she set the strategic direction to ensure the mobilisation of the combined 200000-strong workforce including paid staff volunteers and contractors which represented the recruitment and mobilisation of the largest peacetime workforce and set the industry standard for volunteering with the highly acclaimed Games She was previously Group HR Director at Marks and Spencer Group Plc HR Director and founder member of Egg plc and Sales amp Operations Director of Prudential Direct
Date of appointment 1 January 2013
Committee membershipAudit Committee Corporate Responsibility and Sustainability Committee and Nomination Committee
David Keens Non-Executive Director
Skills and experienceDavid has extensive retail experience and knowledge of consumer facing businesses together with his core skills in finance David was formerly Group Finance Director of next plc from 1991 to 2015 and their Group Treasurer from 1986 to 1991 Previous management experience includes nine years in the UK and overseas operations of multinational food manufacturer Nabisco and prior to that seven years in the accountancy profession
Date of appointment 29 April 2015
Committee membershipChair of the Audit Committee and a member of the Nomination Committee
Other current rolesIndependent Board member of Capri Holdings Limited Non-Executive Director of Hakluyt and Chief Executive Officer of Chanzo Limited
Other current rolesNon-Executive Director Senior Independent Director and Chair of the Audit Committee of Auto Trader Group plc
Matt BrittinNon-Executive Director
Skills and experienceMatt has extensive experience of running a high profile fast moving innovative digital business Since 2015 he has been responsible for Googlersquos business and operations in Europe the Middle East and Africa and hersquos been in leadership roles at Google since 2007 Prior to that Matt spent much of his career in media and marketing with particular interests in strategy commercial development and sales performance This included commercial and digital leadership roles in UK media
Date of appointment 27 January 2011
Committee membershipNomination Committee and Remuneration Committee
Other current rolesGooglersquos President ndash Europe Middle East and Africa and Director of The Media Trust
Brian Cassin Non-Executive Director
Skills and experienceBrian brings present day experience of running a FTSE40 group and of big data and analytics ndash topics of key importance to Sainsburyrsquos Brian joined Experian plc as Chief Financial Officer in April 2012 a post he held until his appointment as Chief Executive Officer in July 2014 Prior to this Brian spent his career in investment banking at Greenhill amp Co where he was Managing Director and Partner Brian has also held various roles at Baring Brothers International and at the London Stock Exchange
Date of appointment 1 April 2016
Committee membershipAudit Committee and Nomination Committee
Other current rolesChief Executive Officer of Experian plc
10
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jo Harlow Non-Executive Director
Skills and experienceJo brings a wealth of experience in consumer-facing businesses and in the telecoms and technology industry bothin the UK and internationally Jo spent 12 years in a variety of senior management roles with Nokia and Microsoft Prior to this she spent eight years at PampG and 11 years at Reebok in senior sales and marketing positions in both Europe and the US
Date of appointment 11 September 2017
Committee membershipChair of the Corporate Responsibility and Sustainability Committee and member of the Nomination Committee and Remuneration Committee
Life PresidentLord Sainsbury of Preston Candover KG
Other current rolesNon-Executive Director of InterContinental Hotels plc Non-Executive Director of Halmaplc and Member of the Supervisory Board of Ceconomy AG
11
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief Executive
Tim FallowfieldCompany Secretary amp Corporate Services Director
Kevin OrsquoByrne Chief Financial Officer
Jim BrownChief Executive Officer of Sainsburyrsquos Bank
Paul Mills-HicksFood Commercial Director
Angie RisleyGroup HR Director
Phil JordanGroup Chief InformationOfficer
Simon RobertsRetail and Operations Director
Clo MoriartyGroup Chief Digital Officer
12
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief ExecutiveSee Appendix page 9
Kevin OrsquoByrneChief Financial OfficerSee Appendix page 9
Tim FallowfieldCompany Secretary amp Corporate Services Director
Date of appointment September 2004
Skills and experienceTim joined Sainsburyrsquos in 2001 as Company Secretary and joined the Operating Board in September 2004 In addition to his role as Company Secretary Tim is responsible for the Corporate Services Division comprising Legal Services Data Governance Safety Shareholder Services Insurance and Central Security He chairs the Group Safety Committee and the Data Governance Committee Tim joined Sainsburyrsquos from Exelplc the global logistics company now part of DHL where he was Company Secretary and General Counsel He began his career at the international law firm Clifford Chance and is a qualified solicitor Tim is Chairman of the Disability Confident Business Leaders Group which works with Government in shaping the disability employment agenda and in raising awareness of the benefits of employing disabled people
Jim BrownCEO of Sainsburyrsquos Bank
Skills and experienceJim joined Sainsburyrsquos Bank as CEO in June 2019 and is also a member of the Sainsburyrsquos Group Operating Board He has held a number of senior international Financial Services roles - most recently for RBS in the UK as CEO of Williams and Glyn and prior to that CEO of Ulster Bank in Northern Ireland and the Republic of Ireland Before moving to Ireland he was based in Hong Kong and was CEO Retail and Commercial Banking Asia and the Middle East for RBS and ABN AMRO He has also been a member of the RBS Group Management Committee ABN AMRO Executive Group ABN AMRO Global Consumer Leadership Team and the RBSBank of China Joint Steering Committee Earlier in his career he held a number of senior executive roles for Citibank in Asia and Australia and New Zealand Jim has also held various Board positions including at Ulster Bank Saudi Hollandi Bank The Royal Bank of Scotland (China) Co Ltd and RBS (Pakistan) Ltd He is also a past President of the Institute of Banking in Ireland He is currently a Certified Bank Director
Date of appointment August 2019
Paul Mills-HicksFood Commercial Director
Skills and experiencePaul joined the Operating Board in May 2014 as Food Commercial Director having spent over ten years at Sainsburyrsquos He was closely involved in the formation and execution of the lsquoMaking Sainsburyrsquos Great Againrsquo strategy Following this he held a variety of roles in commercial strategy and finance most recently as Business Unit Director for Grocery Prior to Sainsburyrsquos Paul was European Controller at Marks and Spencer Group PLC and a Director at UBS Warburg
Date of appointment May 2014
13
APPENDIX Interim Results 201920 - November 2019
Operating Board
Angie RisleyGroup HR Director
Skills and experienceAngie was appointed Group HR Director and a member of the Operating Board in January 2013 with responsibility for human resources Angie is also a Director of Sainsburyrsquos Bank plc Angie was most recently Non-Executive Director and Chairman of the Remuneration Committee of Serco plc and prior to this was Group HR Director of Lloyds Banking Group and an Executive Director of Whitbread PLC with responsibility for HR and Corporate Social Responsibility Angie is currently Non-Executive Director and Chair of the Remuneration Committee at Smith amp Nephew plc
Date of appointment January 2013
Phil JordanGroup Chief Information Officer
Skills and experiencePhil joined the Board in January 2018 and has brought a fresh globalperspective on technology to the Operating Board in addition to a wealth of experience in digital data and business transformation Prior to joining Sainsburyrsquos Phil had a long and successful track record in telecommunications Most recently he was Global Chief Information Officer at Telefonica overseeing Digital Transformation and Information Technology and prior to that was Chief Information Officer for Vodafone UKIreland Phil has worked as a Non-Executive Advisor on Technology in the Investment amp Retail Banking sector and is currently a Non-Executive Director of TalkTalk Telecom Group PLC and chairs its Cyber-Security Committee
Date of appointment January 2018
Simon RobertsRetail and Operations Director
Skills and experienceSimon joined Sainsburyrsquos and the Operating Board in July 2017 as Central Retail amp Operations Director responsible for Stores Central operation and Logistics In his previous role he was Executive Vice President of Walgreens Boots Alliance and President of Boots with responsibility for commercial and retail operations across the UK and Ireland Prior to Boots Simon was at Marks and Spencer Group PLC where he held operational and customer leadership roles across stores divisions and central operations Simon is also the Non-Executive Chairman at the Institute ofCustomer Service
Date of appointment July 2017
Clodagh MoriartyGroup Chief Digital Officer
Skills and experienceClodagh was appointed Group Chief Digital Officer in June 2018 Clodagh leads the delivery of a consistent and first-rate digital experience for customers across Sainsburyrsquos Argos and Sainsburyrsquos BankClodagh joined Sainsburyrsquos in 2010 from Bain amp Co management consultants where she had gained experience working on a broad range of projects across multiple sectors and countries Following two years as Head of Strategy at Sainsburyrsquosshe moved into Food Commercial as Category Manager for Meal Solutions and then became Head of Online Trading spanning Food General Merchandise and Clothing before being promoted to Director of Online in 2016 In this role Clodagh was instrumental in driving innovation within Groceries Online and launching new initiatives including SmartShop and Chop Chop
Date of appointment June 2018
14
APPENDIX Interim Results 201920 - November 2019
Supplementary financial details
3 Financial calendarQ3 trading statement(15 weeks to 4 January 2020)
Preliminary results(52 weeks to 7 March 2020)
8 January 2020
30 April 2020
1 Weighted average number of shares
The interim dividend datesOrdinary shares
Ex-dividend 14 November 2019Record 15 November 2019Payment 20 December 2019
Product Quality Framework helps us fund investment
PQF cereals case study
BAU savings to offset cost inflation
Strategic cost transformation 5 year plan
Slide Number 43
Financial Services Priorities
Financial Services reshaping the portfolio
Financial Services key targets
Nectar
Slide Number 48
Digital
We will help our customers live well for less
Slide Number 51
Slide Number 52
Guidance for 201920
Retail sales
Sainsburyrsquos sales area and store numbers
Sainsburyrsquos store estate
Sainsburyrsquos investment programme
Retail margin
Group retail
Plc Board
Plc Board
Plc Board
Plc Board
Operating Board
Operating Board
Operating Board
Supplementary financial details
Contacts
Column1
201819
Grocery
19
GM
7
Clothing
1
To resize chart data range drag lower right corner of range
Grocery
GM
Clothing
50 Interim Results 201920 - November 2019
We will help our customers live well for less
Confident in the core Integrated customer offer
One multi brand multi channel business
Strong cash generation supporting investment dividend and allowing deleverage
Financial flexibility and resilience
Sustainable cost reduction covering cost inflation and funding investment in our competitive offer
QampA
APPENDIX Interim Results 201920 - November 2019
Appendices
APPENDIX Interim Results 201920 - November 2019
Guidance for 201920
1
Spacebull Expect to open 2 new Sainsburyrsquos supermarkets and up to 15 convenience storesbull Expect to open around 25 Argos stores in Sainsburyrsquos (of which 11 are
relocations) resulting in around 305 Argos stores in supermarketsbull Expect to close 2 supermarkets around 25 convenience stores and around 20
Argos stores in FY201920 as part of announced property closure programme of 10-15 supermarkets 30-40 convenience stores and 60-70 Argos stores
Financial Servicesbull Financial services underlying operating profit expected to be cpound45m including a
cpound10m benefit as a result of a change in transfer pricing between Argos and Argos Financial Services
bull Financial Services non-underlying costs are expected to be around pound30mbull No further capital injections into the Bank are expected following pound35m in H1 201920
Depreciation and amortisationbull Expect underlying retail depreciation and amortisation of around pound12bn
including cpound500m right of use asset depreciation
CostsOperating cost inflationbull Cost inflation between 2 and 3Cost savingsbull Continue to deliver cost savings to at least offset the impact of cost inflation
Finance costsbull Net finance costs of around pound405m including pound320m lease interest in
201920 following the introduction of IFRS 16
One-off itemsbull In 201920 cash outflows as a result of items excluded from
underlying results should not exceed pound100mbull Property strategy programme one-off costs expected to be
pound230m-pound270m of which cash costs are pound30-40m
Dividendbull Sainsburyrsquos plans to change the full year dividend policy to 19x cover by
underlying earnings (versus 20x previously) to offset the dilutive (non cash) impact of IFRS 16 on underlying earnings
Capital expenditurebull Retail capital expenditure to be around pound550mbull Retail capital expenditure is expected to be around pound550m-pound600m per
annum over the medium term
Net debtbull Net debt before fair value movements on derivatives to reduce by at
least pound300m
Tax ratebull Underlying tax rate to be between 25 and 26
APPENDIX Interim Results 201920 - November 2019
Retail sales
1 Sales including VAT excluding fuel
LFL sales growth1
(10)
Sales from net new space1
04
Total sales growth1
(06)
Supermarkets2
(07)
Convenience20
Groceries Online
70
Channels
(01)(25)
(12)
2 Supermarket sales include Argos SiS sales FY 1819 16
pound139bn
pound103bnGrocery
pound30bnGeneralMerchandise
pound488mClothing
2
Chart1
201819
194
66
1
Sheet1
APPENDIX Interim Results 201920 - November 2019
Sainsburyrsquos sales area and store numbersAs at 21 September 2019
Sainsburyrsquos store estateAs at 21 September 2019
Sq ftsales area
82446
870
40001 to60000
20001 to40000
10000 to20000
Under10000 Total
Over60000
0122122
0197197
0175175
06767
824607
1431
Argos storesArgos in SainsburyrsquosArgos in HomebaseOtherArgos total store numbers
Habitat1
Collection points
594281
8-
883
16317
As at21 Sept 2019
Disposalsclosures
Newstores
As at9 March 2019
17--8
-1
(7)-
(2)-
(9)
-(36)
588288
6-
88216
282
ConvenienceSupermarketsTotal stores
Number of stores
Sq ftsales area
1929350
2279
40001 to60000
20001 to40000
10000 to20000
Under10000 Total
Over60000
-18441844
-58185818
-85018501
-46604660
19292117323102
ConvenienceSupermarketsTotal stores
Space by store size (lsquo000 sq ft)
Argos and Habitat store numbers
1 5 Habitat stores 11 Habitat stores in Sainsburys
4
APPENDIX Interim Results 201920 - November 2019
ClosureBitterne West
Sainsburyrsquos investment programme201920
Q1
Supermarkets ConvenienceNew storesMilton Keynes Brooklands District CentBromley High StLeeds Wike Ridge LaneSalford Harbour CityCanterbury High St
ReplacementMayfair Stratton St
ClosuresMayfairWarren St
Q1Q1Q1Q2Q2
Q2
Q1Q2
5
APPENDIX Interim Results 201920 - November 2019
Retail margin
Retail sales (inc VAT inc fuel)(exc VAT inc fuel)
Retail underlying EBITDAR1
Retail underlying EBITDAR margin 2
at constant fuel pricesRetail underlying operating profit3
Retail underlying operating margin 4
at constant fuel prices
1656714808
10677272
4373030
1661214856
11147575
4873333
030342
30 bps28 bps10333 bps32 bps
1 Retail underlying operating profit before net rental income of pound6 million and underlying depreciation and amortisation of pound636 million2 Retail underlying EBITDAR divided by underlying retail sales excluding VAT3 Retail underlying earnings before interest tax and Sainsburyrsquos underlying share of post-tax profit from joint ventures4 Retail underlying operating profit divided by underlying retail sales excluding VAT
poundm H1201920
H1201819
Change
6
APPENDIX Interim Results 201920 - November 2019
H1201920
H1201819
Group retail
Return on capital employed 1
Net debt to EBITDAR (times)23
Fixed charge cover (times)2
Underlying tax rate Core retail capex sales5
713126
26515
743326
25715
poundm
1 ROCE Return is defined as a 52 week rolling underlying profit before interest and tax Capital employed is defined as group net assets2 Net debt of pound6778 million includes lease obligations under IFRS 16 and perpetual securities treated as debt divided by Group underlying EBITDAR of pound2171 million calculated for a 52-week period to 21 September 20193 Group underlying EBITDAR divided by rent (both capital and interest) and net finance costs where interest on perpetual securities is treated as an underlying finance costs4 52 weeks to 22nd September 2018 is not available due to the implementation of IFRS 16 Comparatives therefore reflect the 52 weeks to 9th March 20195 Includes retail sales inc vat inc fuel
4
4
7
APPENDIX Interim Results 201920 - November 2019
Plc Board
Kevin OrsquoByrneChief Financial Officer
Mike Coupe Group Chief Executive
Dame Susan Rice Senior Independent Director
Matt BrittinNon-Executive Director
Jo HarlowNon-Executive Director
Brian CassinNon-Executive Director
David KeensNon-Executive Director
Jean Tomlin Non-Executive Director
Martin Scicluna Chairman
8
APPENDIX Interim Results 201920 - November 2019
Plc Board
Mike Coupe Group Chief Executive Officer
Skills and experienceAppointed Group Chief Executive Officer on 9 July 2014 Mike has been a member of the Operating Board since October 2004 Mike has vast retail industry experience in trading strategy marketing digital and online as well as multi-site store experience He joined Sainsburyrsquos from Big Food Group where he was a board director of Big Food Group PLC and Managing Director of Iceland Food Stores He previously worked for both Asda and Tesco PLC where he served in a variety of senior management roles
Date of appointment 1 August 2007Mike has served as an Executive Director since 1 August 2007 and as Chief Executive Officer since 9 July 2014
Committee membershipCorporate Responsibility and Sustainability Committee
Kevin OrsquoByrne Chief Financial Officer
Skills and experienceKevin brings to the Board a wealth of retail and finance experience Kevin was previously Chief Executive Officer of Poundland Group Limited until December 2016 and held executive roles at Kingfisher plc from 2008 to 2015 including Divisional Director UK China and Turkey Chief Executive Officer of BampQ UK amp Ireland and Group Finance Director He was previously Group Finance Director of Dixons Retail plc and European Finance Director of Quaker Oats He was a Non-Executive Director of Land Securities Group PLC from 2008 to September 2017 where he was Chairman of the Audit Committee and Senior Independent Director
Date of appointment 9 January 2017
Other current rolesNon-Executive Director of Greene King plc
Skills and experienceMartin brings a breadth of experience and leadership in both executive and non-executive roles His previous roles include positions as the Chairman of Great Portland Estates plc Senior Independent Director and Chair of the Audit Committee of Worldpay Inc and Non-Executive Director and Chair of the Audit Committee of Lloyds Banking Group plc He was a partner at Deloitte LLP for 26 years serving as Chairman from 1995 to 2007 where his clients included Dixons WH Smith Alliance Unichem and Cadburyrsquos
Other current rolesChairman of RSA Insurance Group plc
Martin Scicluna Chairman
Date of appointment 1 November 2018 Martin joined the Board as Chairman Designate and Non-Executive Director on 1 November 2018 He was appointed as Chairman of the Board on 10 March 2019
Committee membershipChair of the Nomination Committee
Dame Susan Rice Senior Independent Director
Skills and experienceSusan has extensive experience as a Non-Executive Director as well as in retail banking financial services leadership and sustainability Her career in retail bankingis particularly relevant to our ownership ofSainsburyrsquos Bank Previously Susan was a member of the First Ministerrsquos Council of Economic Advisors Managing Director of Lloyds Banking Group Scotland and was previously Chief Executive and then Chairman of Lloyds TSB Scotland plc She has also held a range of other non-executive directorships including at the Bank of England and SSE plc
Committee membershipChair of the Remuneration Committee and a member of the Nomination Committee
Date of appointment 1 June 2013
Other current rolesChair of Scottish Water and Business Stream Chair of the Scottish Fiscal Commission Non-Executive Director of the North American Income Trust C Hoare and Co and Senior Independent Director of the North American Income Trust
9
Other current rolesNon-Executive Director and Chairman of the Audit Committee of Centrica plc
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jean Tomlin Non-Executive Director
Skills and experienceJean has extensive experience and breadth of skills in human resources and corporate responsibility Jean was formerly Director of HR Workforce and Accreditation for The London OrganisingCommittee of the Olympic and Paralympic Games where she set the strategic direction to ensure the mobilisation of the combined 200000-strong workforce including paid staff volunteers and contractors which represented the recruitment and mobilisation of the largest peacetime workforce and set the industry standard for volunteering with the highly acclaimed Games She was previously Group HR Director at Marks and Spencer Group Plc HR Director and founder member of Egg plc and Sales amp Operations Director of Prudential Direct
Date of appointment 1 January 2013
Committee membershipAudit Committee Corporate Responsibility and Sustainability Committee and Nomination Committee
David Keens Non-Executive Director
Skills and experienceDavid has extensive retail experience and knowledge of consumer facing businesses together with his core skills in finance David was formerly Group Finance Director of next plc from 1991 to 2015 and their Group Treasurer from 1986 to 1991 Previous management experience includes nine years in the UK and overseas operations of multinational food manufacturer Nabisco and prior to that seven years in the accountancy profession
Date of appointment 29 April 2015
Committee membershipChair of the Audit Committee and a member of the Nomination Committee
Other current rolesIndependent Board member of Capri Holdings Limited Non-Executive Director of Hakluyt and Chief Executive Officer of Chanzo Limited
Other current rolesNon-Executive Director Senior Independent Director and Chair of the Audit Committee of Auto Trader Group plc
Matt BrittinNon-Executive Director
Skills and experienceMatt has extensive experience of running a high profile fast moving innovative digital business Since 2015 he has been responsible for Googlersquos business and operations in Europe the Middle East and Africa and hersquos been in leadership roles at Google since 2007 Prior to that Matt spent much of his career in media and marketing with particular interests in strategy commercial development and sales performance This included commercial and digital leadership roles in UK media
Date of appointment 27 January 2011
Committee membershipNomination Committee and Remuneration Committee
Other current rolesGooglersquos President ndash Europe Middle East and Africa and Director of The Media Trust
Brian Cassin Non-Executive Director
Skills and experienceBrian brings present day experience of running a FTSE40 group and of big data and analytics ndash topics of key importance to Sainsburyrsquos Brian joined Experian plc as Chief Financial Officer in April 2012 a post he held until his appointment as Chief Executive Officer in July 2014 Prior to this Brian spent his career in investment banking at Greenhill amp Co where he was Managing Director and Partner Brian has also held various roles at Baring Brothers International and at the London Stock Exchange
Date of appointment 1 April 2016
Committee membershipAudit Committee and Nomination Committee
Other current rolesChief Executive Officer of Experian plc
10
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jo Harlow Non-Executive Director
Skills and experienceJo brings a wealth of experience in consumer-facing businesses and in the telecoms and technology industry bothin the UK and internationally Jo spent 12 years in a variety of senior management roles with Nokia and Microsoft Prior to this she spent eight years at PampG and 11 years at Reebok in senior sales and marketing positions in both Europe and the US
Date of appointment 11 September 2017
Committee membershipChair of the Corporate Responsibility and Sustainability Committee and member of the Nomination Committee and Remuneration Committee
Life PresidentLord Sainsbury of Preston Candover KG
Other current rolesNon-Executive Director of InterContinental Hotels plc Non-Executive Director of Halmaplc and Member of the Supervisory Board of Ceconomy AG
11
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief Executive
Tim FallowfieldCompany Secretary amp Corporate Services Director
Kevin OrsquoByrne Chief Financial Officer
Jim BrownChief Executive Officer of Sainsburyrsquos Bank
Paul Mills-HicksFood Commercial Director
Angie RisleyGroup HR Director
Phil JordanGroup Chief InformationOfficer
Simon RobertsRetail and Operations Director
Clo MoriartyGroup Chief Digital Officer
12
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief ExecutiveSee Appendix page 9
Kevin OrsquoByrneChief Financial OfficerSee Appendix page 9
Tim FallowfieldCompany Secretary amp Corporate Services Director
Date of appointment September 2004
Skills and experienceTim joined Sainsburyrsquos in 2001 as Company Secretary and joined the Operating Board in September 2004 In addition to his role as Company Secretary Tim is responsible for the Corporate Services Division comprising Legal Services Data Governance Safety Shareholder Services Insurance and Central Security He chairs the Group Safety Committee and the Data Governance Committee Tim joined Sainsburyrsquos from Exelplc the global logistics company now part of DHL where he was Company Secretary and General Counsel He began his career at the international law firm Clifford Chance and is a qualified solicitor Tim is Chairman of the Disability Confident Business Leaders Group which works with Government in shaping the disability employment agenda and in raising awareness of the benefits of employing disabled people
Jim BrownCEO of Sainsburyrsquos Bank
Skills and experienceJim joined Sainsburyrsquos Bank as CEO in June 2019 and is also a member of the Sainsburyrsquos Group Operating Board He has held a number of senior international Financial Services roles - most recently for RBS in the UK as CEO of Williams and Glyn and prior to that CEO of Ulster Bank in Northern Ireland and the Republic of Ireland Before moving to Ireland he was based in Hong Kong and was CEO Retail and Commercial Banking Asia and the Middle East for RBS and ABN AMRO He has also been a member of the RBS Group Management Committee ABN AMRO Executive Group ABN AMRO Global Consumer Leadership Team and the RBSBank of China Joint Steering Committee Earlier in his career he held a number of senior executive roles for Citibank in Asia and Australia and New Zealand Jim has also held various Board positions including at Ulster Bank Saudi Hollandi Bank The Royal Bank of Scotland (China) Co Ltd and RBS (Pakistan) Ltd He is also a past President of the Institute of Banking in Ireland He is currently a Certified Bank Director
Date of appointment August 2019
Paul Mills-HicksFood Commercial Director
Skills and experiencePaul joined the Operating Board in May 2014 as Food Commercial Director having spent over ten years at Sainsburyrsquos He was closely involved in the formation and execution of the lsquoMaking Sainsburyrsquos Great Againrsquo strategy Following this he held a variety of roles in commercial strategy and finance most recently as Business Unit Director for Grocery Prior to Sainsburyrsquos Paul was European Controller at Marks and Spencer Group PLC and a Director at UBS Warburg
Date of appointment May 2014
13
APPENDIX Interim Results 201920 - November 2019
Operating Board
Angie RisleyGroup HR Director
Skills and experienceAngie was appointed Group HR Director and a member of the Operating Board in January 2013 with responsibility for human resources Angie is also a Director of Sainsburyrsquos Bank plc Angie was most recently Non-Executive Director and Chairman of the Remuneration Committee of Serco plc and prior to this was Group HR Director of Lloyds Banking Group and an Executive Director of Whitbread PLC with responsibility for HR and Corporate Social Responsibility Angie is currently Non-Executive Director and Chair of the Remuneration Committee at Smith amp Nephew plc
Date of appointment January 2013
Phil JordanGroup Chief Information Officer
Skills and experiencePhil joined the Board in January 2018 and has brought a fresh globalperspective on technology to the Operating Board in addition to a wealth of experience in digital data and business transformation Prior to joining Sainsburyrsquos Phil had a long and successful track record in telecommunications Most recently he was Global Chief Information Officer at Telefonica overseeing Digital Transformation and Information Technology and prior to that was Chief Information Officer for Vodafone UKIreland Phil has worked as a Non-Executive Advisor on Technology in the Investment amp Retail Banking sector and is currently a Non-Executive Director of TalkTalk Telecom Group PLC and chairs its Cyber-Security Committee
Date of appointment January 2018
Simon RobertsRetail and Operations Director
Skills and experienceSimon joined Sainsburyrsquos and the Operating Board in July 2017 as Central Retail amp Operations Director responsible for Stores Central operation and Logistics In his previous role he was Executive Vice President of Walgreens Boots Alliance and President of Boots with responsibility for commercial and retail operations across the UK and Ireland Prior to Boots Simon was at Marks and Spencer Group PLC where he held operational and customer leadership roles across stores divisions and central operations Simon is also the Non-Executive Chairman at the Institute ofCustomer Service
Date of appointment July 2017
Clodagh MoriartyGroup Chief Digital Officer
Skills and experienceClodagh was appointed Group Chief Digital Officer in June 2018 Clodagh leads the delivery of a consistent and first-rate digital experience for customers across Sainsburyrsquos Argos and Sainsburyrsquos BankClodagh joined Sainsburyrsquos in 2010 from Bain amp Co management consultants where she had gained experience working on a broad range of projects across multiple sectors and countries Following two years as Head of Strategy at Sainsburyrsquosshe moved into Food Commercial as Category Manager for Meal Solutions and then became Head of Online Trading spanning Food General Merchandise and Clothing before being promoted to Director of Online in 2016 In this role Clodagh was instrumental in driving innovation within Groceries Online and launching new initiatives including SmartShop and Chop Chop
Date of appointment June 2018
14
APPENDIX Interim Results 201920 - November 2019
Supplementary financial details
3 Financial calendarQ3 trading statement(15 weeks to 4 January 2020)
Preliminary results(52 weeks to 7 March 2020)
8 January 2020
30 April 2020
1 Weighted average number of shares
The interim dividend datesOrdinary shares
Ex-dividend 14 November 2019Record 15 November 2019Payment 20 December 2019
Product Quality Framework helps us fund investment
PQF cereals case study
BAU savings to offset cost inflation
Strategic cost transformation 5 year plan
Slide Number 43
Financial Services Priorities
Financial Services reshaping the portfolio
Financial Services key targets
Nectar
Slide Number 48
Digital
We will help our customers live well for less
Slide Number 51
Slide Number 52
Guidance for 201920
Retail sales
Sainsburyrsquos sales area and store numbers
Sainsburyrsquos store estate
Sainsburyrsquos investment programme
Retail margin
Group retail
Plc Board
Plc Board
Plc Board
Plc Board
Operating Board
Operating Board
Operating Board
Supplementary financial details
Contacts
Column1
201819
Grocery
19
GM
7
Clothing
1
To resize chart data range drag lower right corner of range
Grocery
GM
Clothing
QampA
APPENDIX Interim Results 201920 - November 2019
Appendices
APPENDIX Interim Results 201920 - November 2019
Guidance for 201920
1
Spacebull Expect to open 2 new Sainsburyrsquos supermarkets and up to 15 convenience storesbull Expect to open around 25 Argos stores in Sainsburyrsquos (of which 11 are
relocations) resulting in around 305 Argos stores in supermarketsbull Expect to close 2 supermarkets around 25 convenience stores and around 20
Argos stores in FY201920 as part of announced property closure programme of 10-15 supermarkets 30-40 convenience stores and 60-70 Argos stores
Financial Servicesbull Financial services underlying operating profit expected to be cpound45m including a
cpound10m benefit as a result of a change in transfer pricing between Argos and Argos Financial Services
bull Financial Services non-underlying costs are expected to be around pound30mbull No further capital injections into the Bank are expected following pound35m in H1 201920
Depreciation and amortisationbull Expect underlying retail depreciation and amortisation of around pound12bn
including cpound500m right of use asset depreciation
CostsOperating cost inflationbull Cost inflation between 2 and 3Cost savingsbull Continue to deliver cost savings to at least offset the impact of cost inflation
Finance costsbull Net finance costs of around pound405m including pound320m lease interest in
201920 following the introduction of IFRS 16
One-off itemsbull In 201920 cash outflows as a result of items excluded from
underlying results should not exceed pound100mbull Property strategy programme one-off costs expected to be
pound230m-pound270m of which cash costs are pound30-40m
Dividendbull Sainsburyrsquos plans to change the full year dividend policy to 19x cover by
underlying earnings (versus 20x previously) to offset the dilutive (non cash) impact of IFRS 16 on underlying earnings
Capital expenditurebull Retail capital expenditure to be around pound550mbull Retail capital expenditure is expected to be around pound550m-pound600m per
annum over the medium term
Net debtbull Net debt before fair value movements on derivatives to reduce by at
least pound300m
Tax ratebull Underlying tax rate to be between 25 and 26
APPENDIX Interim Results 201920 - November 2019
Retail sales
1 Sales including VAT excluding fuel
LFL sales growth1
(10)
Sales from net new space1
04
Total sales growth1
(06)
Supermarkets2
(07)
Convenience20
Groceries Online
70
Channels
(01)(25)
(12)
2 Supermarket sales include Argos SiS sales FY 1819 16
pound139bn
pound103bnGrocery
pound30bnGeneralMerchandise
pound488mClothing
2
Chart1
201819
194
66
1
Sheet1
APPENDIX Interim Results 201920 - November 2019
Sainsburyrsquos sales area and store numbersAs at 21 September 2019
Sainsburyrsquos store estateAs at 21 September 2019
Sq ftsales area
82446
870
40001 to60000
20001 to40000
10000 to20000
Under10000 Total
Over60000
0122122
0197197
0175175
06767
824607
1431
Argos storesArgos in SainsburyrsquosArgos in HomebaseOtherArgos total store numbers
Habitat1
Collection points
594281
8-
883
16317
As at21 Sept 2019
Disposalsclosures
Newstores
As at9 March 2019
17--8
-1
(7)-
(2)-
(9)
-(36)
588288
6-
88216
282
ConvenienceSupermarketsTotal stores
Number of stores
Sq ftsales area
1929350
2279
40001 to60000
20001 to40000
10000 to20000
Under10000 Total
Over60000
-18441844
-58185818
-85018501
-46604660
19292117323102
ConvenienceSupermarketsTotal stores
Space by store size (lsquo000 sq ft)
Argos and Habitat store numbers
1 5 Habitat stores 11 Habitat stores in Sainsburys
4
APPENDIX Interim Results 201920 - November 2019
ClosureBitterne West
Sainsburyrsquos investment programme201920
Q1
Supermarkets ConvenienceNew storesMilton Keynes Brooklands District CentBromley High StLeeds Wike Ridge LaneSalford Harbour CityCanterbury High St
ReplacementMayfair Stratton St
ClosuresMayfairWarren St
Q1Q1Q1Q2Q2
Q2
Q1Q2
5
APPENDIX Interim Results 201920 - November 2019
Retail margin
Retail sales (inc VAT inc fuel)(exc VAT inc fuel)
Retail underlying EBITDAR1
Retail underlying EBITDAR margin 2
at constant fuel pricesRetail underlying operating profit3
Retail underlying operating margin 4
at constant fuel prices
1656714808
10677272
4373030
1661214856
11147575
4873333
030342
30 bps28 bps10333 bps32 bps
1 Retail underlying operating profit before net rental income of pound6 million and underlying depreciation and amortisation of pound636 million2 Retail underlying EBITDAR divided by underlying retail sales excluding VAT3 Retail underlying earnings before interest tax and Sainsburyrsquos underlying share of post-tax profit from joint ventures4 Retail underlying operating profit divided by underlying retail sales excluding VAT
poundm H1201920
H1201819
Change
6
APPENDIX Interim Results 201920 - November 2019
H1201920
H1201819
Group retail
Return on capital employed 1
Net debt to EBITDAR (times)23
Fixed charge cover (times)2
Underlying tax rate Core retail capex sales5
713126
26515
743326
25715
poundm
1 ROCE Return is defined as a 52 week rolling underlying profit before interest and tax Capital employed is defined as group net assets2 Net debt of pound6778 million includes lease obligations under IFRS 16 and perpetual securities treated as debt divided by Group underlying EBITDAR of pound2171 million calculated for a 52-week period to 21 September 20193 Group underlying EBITDAR divided by rent (both capital and interest) and net finance costs where interest on perpetual securities is treated as an underlying finance costs4 52 weeks to 22nd September 2018 is not available due to the implementation of IFRS 16 Comparatives therefore reflect the 52 weeks to 9th March 20195 Includes retail sales inc vat inc fuel
4
4
7
APPENDIX Interim Results 201920 - November 2019
Plc Board
Kevin OrsquoByrneChief Financial Officer
Mike Coupe Group Chief Executive
Dame Susan Rice Senior Independent Director
Matt BrittinNon-Executive Director
Jo HarlowNon-Executive Director
Brian CassinNon-Executive Director
David KeensNon-Executive Director
Jean Tomlin Non-Executive Director
Martin Scicluna Chairman
8
APPENDIX Interim Results 201920 - November 2019
Plc Board
Mike Coupe Group Chief Executive Officer
Skills and experienceAppointed Group Chief Executive Officer on 9 July 2014 Mike has been a member of the Operating Board since October 2004 Mike has vast retail industry experience in trading strategy marketing digital and online as well as multi-site store experience He joined Sainsburyrsquos from Big Food Group where he was a board director of Big Food Group PLC and Managing Director of Iceland Food Stores He previously worked for both Asda and Tesco PLC where he served in a variety of senior management roles
Date of appointment 1 August 2007Mike has served as an Executive Director since 1 August 2007 and as Chief Executive Officer since 9 July 2014
Committee membershipCorporate Responsibility and Sustainability Committee
Kevin OrsquoByrne Chief Financial Officer
Skills and experienceKevin brings to the Board a wealth of retail and finance experience Kevin was previously Chief Executive Officer of Poundland Group Limited until December 2016 and held executive roles at Kingfisher plc from 2008 to 2015 including Divisional Director UK China and Turkey Chief Executive Officer of BampQ UK amp Ireland and Group Finance Director He was previously Group Finance Director of Dixons Retail plc and European Finance Director of Quaker Oats He was a Non-Executive Director of Land Securities Group PLC from 2008 to September 2017 where he was Chairman of the Audit Committee and Senior Independent Director
Date of appointment 9 January 2017
Other current rolesNon-Executive Director of Greene King plc
Skills and experienceMartin brings a breadth of experience and leadership in both executive and non-executive roles His previous roles include positions as the Chairman of Great Portland Estates plc Senior Independent Director and Chair of the Audit Committee of Worldpay Inc and Non-Executive Director and Chair of the Audit Committee of Lloyds Banking Group plc He was a partner at Deloitte LLP for 26 years serving as Chairman from 1995 to 2007 where his clients included Dixons WH Smith Alliance Unichem and Cadburyrsquos
Other current rolesChairman of RSA Insurance Group plc
Martin Scicluna Chairman
Date of appointment 1 November 2018 Martin joined the Board as Chairman Designate and Non-Executive Director on 1 November 2018 He was appointed as Chairman of the Board on 10 March 2019
Committee membershipChair of the Nomination Committee
Dame Susan Rice Senior Independent Director
Skills and experienceSusan has extensive experience as a Non-Executive Director as well as in retail banking financial services leadership and sustainability Her career in retail bankingis particularly relevant to our ownership ofSainsburyrsquos Bank Previously Susan was a member of the First Ministerrsquos Council of Economic Advisors Managing Director of Lloyds Banking Group Scotland and was previously Chief Executive and then Chairman of Lloyds TSB Scotland plc She has also held a range of other non-executive directorships including at the Bank of England and SSE plc
Committee membershipChair of the Remuneration Committee and a member of the Nomination Committee
Date of appointment 1 June 2013
Other current rolesChair of Scottish Water and Business Stream Chair of the Scottish Fiscal Commission Non-Executive Director of the North American Income Trust C Hoare and Co and Senior Independent Director of the North American Income Trust
9
Other current rolesNon-Executive Director and Chairman of the Audit Committee of Centrica plc
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jean Tomlin Non-Executive Director
Skills and experienceJean has extensive experience and breadth of skills in human resources and corporate responsibility Jean was formerly Director of HR Workforce and Accreditation for The London OrganisingCommittee of the Olympic and Paralympic Games where she set the strategic direction to ensure the mobilisation of the combined 200000-strong workforce including paid staff volunteers and contractors which represented the recruitment and mobilisation of the largest peacetime workforce and set the industry standard for volunteering with the highly acclaimed Games She was previously Group HR Director at Marks and Spencer Group Plc HR Director and founder member of Egg plc and Sales amp Operations Director of Prudential Direct
Date of appointment 1 January 2013
Committee membershipAudit Committee Corporate Responsibility and Sustainability Committee and Nomination Committee
David Keens Non-Executive Director
Skills and experienceDavid has extensive retail experience and knowledge of consumer facing businesses together with his core skills in finance David was formerly Group Finance Director of next plc from 1991 to 2015 and their Group Treasurer from 1986 to 1991 Previous management experience includes nine years in the UK and overseas operations of multinational food manufacturer Nabisco and prior to that seven years in the accountancy profession
Date of appointment 29 April 2015
Committee membershipChair of the Audit Committee and a member of the Nomination Committee
Other current rolesIndependent Board member of Capri Holdings Limited Non-Executive Director of Hakluyt and Chief Executive Officer of Chanzo Limited
Other current rolesNon-Executive Director Senior Independent Director and Chair of the Audit Committee of Auto Trader Group plc
Matt BrittinNon-Executive Director
Skills and experienceMatt has extensive experience of running a high profile fast moving innovative digital business Since 2015 he has been responsible for Googlersquos business and operations in Europe the Middle East and Africa and hersquos been in leadership roles at Google since 2007 Prior to that Matt spent much of his career in media and marketing with particular interests in strategy commercial development and sales performance This included commercial and digital leadership roles in UK media
Date of appointment 27 January 2011
Committee membershipNomination Committee and Remuneration Committee
Other current rolesGooglersquos President ndash Europe Middle East and Africa and Director of The Media Trust
Brian Cassin Non-Executive Director
Skills and experienceBrian brings present day experience of running a FTSE40 group and of big data and analytics ndash topics of key importance to Sainsburyrsquos Brian joined Experian plc as Chief Financial Officer in April 2012 a post he held until his appointment as Chief Executive Officer in July 2014 Prior to this Brian spent his career in investment banking at Greenhill amp Co where he was Managing Director and Partner Brian has also held various roles at Baring Brothers International and at the London Stock Exchange
Date of appointment 1 April 2016
Committee membershipAudit Committee and Nomination Committee
Other current rolesChief Executive Officer of Experian plc
10
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jo Harlow Non-Executive Director
Skills and experienceJo brings a wealth of experience in consumer-facing businesses and in the telecoms and technology industry bothin the UK and internationally Jo spent 12 years in a variety of senior management roles with Nokia and Microsoft Prior to this she spent eight years at PampG and 11 years at Reebok in senior sales and marketing positions in both Europe and the US
Date of appointment 11 September 2017
Committee membershipChair of the Corporate Responsibility and Sustainability Committee and member of the Nomination Committee and Remuneration Committee
Life PresidentLord Sainsbury of Preston Candover KG
Other current rolesNon-Executive Director of InterContinental Hotels plc Non-Executive Director of Halmaplc and Member of the Supervisory Board of Ceconomy AG
11
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief Executive
Tim FallowfieldCompany Secretary amp Corporate Services Director
Kevin OrsquoByrne Chief Financial Officer
Jim BrownChief Executive Officer of Sainsburyrsquos Bank
Paul Mills-HicksFood Commercial Director
Angie RisleyGroup HR Director
Phil JordanGroup Chief InformationOfficer
Simon RobertsRetail and Operations Director
Clo MoriartyGroup Chief Digital Officer
12
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief ExecutiveSee Appendix page 9
Kevin OrsquoByrneChief Financial OfficerSee Appendix page 9
Tim FallowfieldCompany Secretary amp Corporate Services Director
Date of appointment September 2004
Skills and experienceTim joined Sainsburyrsquos in 2001 as Company Secretary and joined the Operating Board in September 2004 In addition to his role as Company Secretary Tim is responsible for the Corporate Services Division comprising Legal Services Data Governance Safety Shareholder Services Insurance and Central Security He chairs the Group Safety Committee and the Data Governance Committee Tim joined Sainsburyrsquos from Exelplc the global logistics company now part of DHL where he was Company Secretary and General Counsel He began his career at the international law firm Clifford Chance and is a qualified solicitor Tim is Chairman of the Disability Confident Business Leaders Group which works with Government in shaping the disability employment agenda and in raising awareness of the benefits of employing disabled people
Jim BrownCEO of Sainsburyrsquos Bank
Skills and experienceJim joined Sainsburyrsquos Bank as CEO in June 2019 and is also a member of the Sainsburyrsquos Group Operating Board He has held a number of senior international Financial Services roles - most recently for RBS in the UK as CEO of Williams and Glyn and prior to that CEO of Ulster Bank in Northern Ireland and the Republic of Ireland Before moving to Ireland he was based in Hong Kong and was CEO Retail and Commercial Banking Asia and the Middle East for RBS and ABN AMRO He has also been a member of the RBS Group Management Committee ABN AMRO Executive Group ABN AMRO Global Consumer Leadership Team and the RBSBank of China Joint Steering Committee Earlier in his career he held a number of senior executive roles for Citibank in Asia and Australia and New Zealand Jim has also held various Board positions including at Ulster Bank Saudi Hollandi Bank The Royal Bank of Scotland (China) Co Ltd and RBS (Pakistan) Ltd He is also a past President of the Institute of Banking in Ireland He is currently a Certified Bank Director
Date of appointment August 2019
Paul Mills-HicksFood Commercial Director
Skills and experiencePaul joined the Operating Board in May 2014 as Food Commercial Director having spent over ten years at Sainsburyrsquos He was closely involved in the formation and execution of the lsquoMaking Sainsburyrsquos Great Againrsquo strategy Following this he held a variety of roles in commercial strategy and finance most recently as Business Unit Director for Grocery Prior to Sainsburyrsquos Paul was European Controller at Marks and Spencer Group PLC and a Director at UBS Warburg
Date of appointment May 2014
13
APPENDIX Interim Results 201920 - November 2019
Operating Board
Angie RisleyGroup HR Director
Skills and experienceAngie was appointed Group HR Director and a member of the Operating Board in January 2013 with responsibility for human resources Angie is also a Director of Sainsburyrsquos Bank plc Angie was most recently Non-Executive Director and Chairman of the Remuneration Committee of Serco plc and prior to this was Group HR Director of Lloyds Banking Group and an Executive Director of Whitbread PLC with responsibility for HR and Corporate Social Responsibility Angie is currently Non-Executive Director and Chair of the Remuneration Committee at Smith amp Nephew plc
Date of appointment January 2013
Phil JordanGroup Chief Information Officer
Skills and experiencePhil joined the Board in January 2018 and has brought a fresh globalperspective on technology to the Operating Board in addition to a wealth of experience in digital data and business transformation Prior to joining Sainsburyrsquos Phil had a long and successful track record in telecommunications Most recently he was Global Chief Information Officer at Telefonica overseeing Digital Transformation and Information Technology and prior to that was Chief Information Officer for Vodafone UKIreland Phil has worked as a Non-Executive Advisor on Technology in the Investment amp Retail Banking sector and is currently a Non-Executive Director of TalkTalk Telecom Group PLC and chairs its Cyber-Security Committee
Date of appointment January 2018
Simon RobertsRetail and Operations Director
Skills and experienceSimon joined Sainsburyrsquos and the Operating Board in July 2017 as Central Retail amp Operations Director responsible for Stores Central operation and Logistics In his previous role he was Executive Vice President of Walgreens Boots Alliance and President of Boots with responsibility for commercial and retail operations across the UK and Ireland Prior to Boots Simon was at Marks and Spencer Group PLC where he held operational and customer leadership roles across stores divisions and central operations Simon is also the Non-Executive Chairman at the Institute ofCustomer Service
Date of appointment July 2017
Clodagh MoriartyGroup Chief Digital Officer
Skills and experienceClodagh was appointed Group Chief Digital Officer in June 2018 Clodagh leads the delivery of a consistent and first-rate digital experience for customers across Sainsburyrsquos Argos and Sainsburyrsquos BankClodagh joined Sainsburyrsquos in 2010 from Bain amp Co management consultants where she had gained experience working on a broad range of projects across multiple sectors and countries Following two years as Head of Strategy at Sainsburyrsquosshe moved into Food Commercial as Category Manager for Meal Solutions and then became Head of Online Trading spanning Food General Merchandise and Clothing before being promoted to Director of Online in 2016 In this role Clodagh was instrumental in driving innovation within Groceries Online and launching new initiatives including SmartShop and Chop Chop
Date of appointment June 2018
14
APPENDIX Interim Results 201920 - November 2019
Supplementary financial details
3 Financial calendarQ3 trading statement(15 weeks to 4 January 2020)
Preliminary results(52 weeks to 7 March 2020)
8 January 2020
30 April 2020
1 Weighted average number of shares
The interim dividend datesOrdinary shares
Ex-dividend 14 November 2019Record 15 November 2019Payment 20 December 2019
Product Quality Framework helps us fund investment
PQF cereals case study
BAU savings to offset cost inflation
Strategic cost transformation 5 year plan
Slide Number 43
Financial Services Priorities
Financial Services reshaping the portfolio
Financial Services key targets
Nectar
Slide Number 48
Digital
We will help our customers live well for less
Slide Number 51
Slide Number 52
Guidance for 201920
Retail sales
Sainsburyrsquos sales area and store numbers
Sainsburyrsquos store estate
Sainsburyrsquos investment programme
Retail margin
Group retail
Plc Board
Plc Board
Plc Board
Plc Board
Operating Board
Operating Board
Operating Board
Supplementary financial details
Contacts
Column1
201819
Grocery
19
GM
7
Clothing
1
To resize chart data range drag lower right corner of range
Grocery
GM
Clothing
APPENDIX Interim Results 201920 - November 2019
Appendices
APPENDIX Interim Results 201920 - November 2019
Guidance for 201920
1
Spacebull Expect to open 2 new Sainsburyrsquos supermarkets and up to 15 convenience storesbull Expect to open around 25 Argos stores in Sainsburyrsquos (of which 11 are
relocations) resulting in around 305 Argos stores in supermarketsbull Expect to close 2 supermarkets around 25 convenience stores and around 20
Argos stores in FY201920 as part of announced property closure programme of 10-15 supermarkets 30-40 convenience stores and 60-70 Argos stores
Financial Servicesbull Financial services underlying operating profit expected to be cpound45m including a
cpound10m benefit as a result of a change in transfer pricing between Argos and Argos Financial Services
bull Financial Services non-underlying costs are expected to be around pound30mbull No further capital injections into the Bank are expected following pound35m in H1 201920
Depreciation and amortisationbull Expect underlying retail depreciation and amortisation of around pound12bn
including cpound500m right of use asset depreciation
CostsOperating cost inflationbull Cost inflation between 2 and 3Cost savingsbull Continue to deliver cost savings to at least offset the impact of cost inflation
Finance costsbull Net finance costs of around pound405m including pound320m lease interest in
201920 following the introduction of IFRS 16
One-off itemsbull In 201920 cash outflows as a result of items excluded from
underlying results should not exceed pound100mbull Property strategy programme one-off costs expected to be
pound230m-pound270m of which cash costs are pound30-40m
Dividendbull Sainsburyrsquos plans to change the full year dividend policy to 19x cover by
underlying earnings (versus 20x previously) to offset the dilutive (non cash) impact of IFRS 16 on underlying earnings
Capital expenditurebull Retail capital expenditure to be around pound550mbull Retail capital expenditure is expected to be around pound550m-pound600m per
annum over the medium term
Net debtbull Net debt before fair value movements on derivatives to reduce by at
least pound300m
Tax ratebull Underlying tax rate to be between 25 and 26
APPENDIX Interim Results 201920 - November 2019
Retail sales
1 Sales including VAT excluding fuel
LFL sales growth1
(10)
Sales from net new space1
04
Total sales growth1
(06)
Supermarkets2
(07)
Convenience20
Groceries Online
70
Channels
(01)(25)
(12)
2 Supermarket sales include Argos SiS sales FY 1819 16
pound139bn
pound103bnGrocery
pound30bnGeneralMerchandise
pound488mClothing
2
Chart1
201819
194
66
1
Sheet1
APPENDIX Interim Results 201920 - November 2019
Sainsburyrsquos sales area and store numbersAs at 21 September 2019
Sainsburyrsquos store estateAs at 21 September 2019
Sq ftsales area
82446
870
40001 to60000
20001 to40000
10000 to20000
Under10000 Total
Over60000
0122122
0197197
0175175
06767
824607
1431
Argos storesArgos in SainsburyrsquosArgos in HomebaseOtherArgos total store numbers
Habitat1
Collection points
594281
8-
883
16317
As at21 Sept 2019
Disposalsclosures
Newstores
As at9 March 2019
17--8
-1
(7)-
(2)-
(9)
-(36)
588288
6-
88216
282
ConvenienceSupermarketsTotal stores
Number of stores
Sq ftsales area
1929350
2279
40001 to60000
20001 to40000
10000 to20000
Under10000 Total
Over60000
-18441844
-58185818
-85018501
-46604660
19292117323102
ConvenienceSupermarketsTotal stores
Space by store size (lsquo000 sq ft)
Argos and Habitat store numbers
1 5 Habitat stores 11 Habitat stores in Sainsburys
4
APPENDIX Interim Results 201920 - November 2019
ClosureBitterne West
Sainsburyrsquos investment programme201920
Q1
Supermarkets ConvenienceNew storesMilton Keynes Brooklands District CentBromley High StLeeds Wike Ridge LaneSalford Harbour CityCanterbury High St
ReplacementMayfair Stratton St
ClosuresMayfairWarren St
Q1Q1Q1Q2Q2
Q2
Q1Q2
5
APPENDIX Interim Results 201920 - November 2019
Retail margin
Retail sales (inc VAT inc fuel)(exc VAT inc fuel)
Retail underlying EBITDAR1
Retail underlying EBITDAR margin 2
at constant fuel pricesRetail underlying operating profit3
Retail underlying operating margin 4
at constant fuel prices
1656714808
10677272
4373030
1661214856
11147575
4873333
030342
30 bps28 bps10333 bps32 bps
1 Retail underlying operating profit before net rental income of pound6 million and underlying depreciation and amortisation of pound636 million2 Retail underlying EBITDAR divided by underlying retail sales excluding VAT3 Retail underlying earnings before interest tax and Sainsburyrsquos underlying share of post-tax profit from joint ventures4 Retail underlying operating profit divided by underlying retail sales excluding VAT
poundm H1201920
H1201819
Change
6
APPENDIX Interim Results 201920 - November 2019
H1201920
H1201819
Group retail
Return on capital employed 1
Net debt to EBITDAR (times)23
Fixed charge cover (times)2
Underlying tax rate Core retail capex sales5
713126
26515
743326
25715
poundm
1 ROCE Return is defined as a 52 week rolling underlying profit before interest and tax Capital employed is defined as group net assets2 Net debt of pound6778 million includes lease obligations under IFRS 16 and perpetual securities treated as debt divided by Group underlying EBITDAR of pound2171 million calculated for a 52-week period to 21 September 20193 Group underlying EBITDAR divided by rent (both capital and interest) and net finance costs where interest on perpetual securities is treated as an underlying finance costs4 52 weeks to 22nd September 2018 is not available due to the implementation of IFRS 16 Comparatives therefore reflect the 52 weeks to 9th March 20195 Includes retail sales inc vat inc fuel
4
4
7
APPENDIX Interim Results 201920 - November 2019
Plc Board
Kevin OrsquoByrneChief Financial Officer
Mike Coupe Group Chief Executive
Dame Susan Rice Senior Independent Director
Matt BrittinNon-Executive Director
Jo HarlowNon-Executive Director
Brian CassinNon-Executive Director
David KeensNon-Executive Director
Jean Tomlin Non-Executive Director
Martin Scicluna Chairman
8
APPENDIX Interim Results 201920 - November 2019
Plc Board
Mike Coupe Group Chief Executive Officer
Skills and experienceAppointed Group Chief Executive Officer on 9 July 2014 Mike has been a member of the Operating Board since October 2004 Mike has vast retail industry experience in trading strategy marketing digital and online as well as multi-site store experience He joined Sainsburyrsquos from Big Food Group where he was a board director of Big Food Group PLC and Managing Director of Iceland Food Stores He previously worked for both Asda and Tesco PLC where he served in a variety of senior management roles
Date of appointment 1 August 2007Mike has served as an Executive Director since 1 August 2007 and as Chief Executive Officer since 9 July 2014
Committee membershipCorporate Responsibility and Sustainability Committee
Kevin OrsquoByrne Chief Financial Officer
Skills and experienceKevin brings to the Board a wealth of retail and finance experience Kevin was previously Chief Executive Officer of Poundland Group Limited until December 2016 and held executive roles at Kingfisher plc from 2008 to 2015 including Divisional Director UK China and Turkey Chief Executive Officer of BampQ UK amp Ireland and Group Finance Director He was previously Group Finance Director of Dixons Retail plc and European Finance Director of Quaker Oats He was a Non-Executive Director of Land Securities Group PLC from 2008 to September 2017 where he was Chairman of the Audit Committee and Senior Independent Director
Date of appointment 9 January 2017
Other current rolesNon-Executive Director of Greene King plc
Skills and experienceMartin brings a breadth of experience and leadership in both executive and non-executive roles His previous roles include positions as the Chairman of Great Portland Estates plc Senior Independent Director and Chair of the Audit Committee of Worldpay Inc and Non-Executive Director and Chair of the Audit Committee of Lloyds Banking Group plc He was a partner at Deloitte LLP for 26 years serving as Chairman from 1995 to 2007 where his clients included Dixons WH Smith Alliance Unichem and Cadburyrsquos
Other current rolesChairman of RSA Insurance Group plc
Martin Scicluna Chairman
Date of appointment 1 November 2018 Martin joined the Board as Chairman Designate and Non-Executive Director on 1 November 2018 He was appointed as Chairman of the Board on 10 March 2019
Committee membershipChair of the Nomination Committee
Dame Susan Rice Senior Independent Director
Skills and experienceSusan has extensive experience as a Non-Executive Director as well as in retail banking financial services leadership and sustainability Her career in retail bankingis particularly relevant to our ownership ofSainsburyrsquos Bank Previously Susan was a member of the First Ministerrsquos Council of Economic Advisors Managing Director of Lloyds Banking Group Scotland and was previously Chief Executive and then Chairman of Lloyds TSB Scotland plc She has also held a range of other non-executive directorships including at the Bank of England and SSE plc
Committee membershipChair of the Remuneration Committee and a member of the Nomination Committee
Date of appointment 1 June 2013
Other current rolesChair of Scottish Water and Business Stream Chair of the Scottish Fiscal Commission Non-Executive Director of the North American Income Trust C Hoare and Co and Senior Independent Director of the North American Income Trust
9
Other current rolesNon-Executive Director and Chairman of the Audit Committee of Centrica plc
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jean Tomlin Non-Executive Director
Skills and experienceJean has extensive experience and breadth of skills in human resources and corporate responsibility Jean was formerly Director of HR Workforce and Accreditation for The London OrganisingCommittee of the Olympic and Paralympic Games where she set the strategic direction to ensure the mobilisation of the combined 200000-strong workforce including paid staff volunteers and contractors which represented the recruitment and mobilisation of the largest peacetime workforce and set the industry standard for volunteering with the highly acclaimed Games She was previously Group HR Director at Marks and Spencer Group Plc HR Director and founder member of Egg plc and Sales amp Operations Director of Prudential Direct
Date of appointment 1 January 2013
Committee membershipAudit Committee Corporate Responsibility and Sustainability Committee and Nomination Committee
David Keens Non-Executive Director
Skills and experienceDavid has extensive retail experience and knowledge of consumer facing businesses together with his core skills in finance David was formerly Group Finance Director of next plc from 1991 to 2015 and their Group Treasurer from 1986 to 1991 Previous management experience includes nine years in the UK and overseas operations of multinational food manufacturer Nabisco and prior to that seven years in the accountancy profession
Date of appointment 29 April 2015
Committee membershipChair of the Audit Committee and a member of the Nomination Committee
Other current rolesIndependent Board member of Capri Holdings Limited Non-Executive Director of Hakluyt and Chief Executive Officer of Chanzo Limited
Other current rolesNon-Executive Director Senior Independent Director and Chair of the Audit Committee of Auto Trader Group plc
Matt BrittinNon-Executive Director
Skills and experienceMatt has extensive experience of running a high profile fast moving innovative digital business Since 2015 he has been responsible for Googlersquos business and operations in Europe the Middle East and Africa and hersquos been in leadership roles at Google since 2007 Prior to that Matt spent much of his career in media and marketing with particular interests in strategy commercial development and sales performance This included commercial and digital leadership roles in UK media
Date of appointment 27 January 2011
Committee membershipNomination Committee and Remuneration Committee
Other current rolesGooglersquos President ndash Europe Middle East and Africa and Director of The Media Trust
Brian Cassin Non-Executive Director
Skills and experienceBrian brings present day experience of running a FTSE40 group and of big data and analytics ndash topics of key importance to Sainsburyrsquos Brian joined Experian plc as Chief Financial Officer in April 2012 a post he held until his appointment as Chief Executive Officer in July 2014 Prior to this Brian spent his career in investment banking at Greenhill amp Co where he was Managing Director and Partner Brian has also held various roles at Baring Brothers International and at the London Stock Exchange
Date of appointment 1 April 2016
Committee membershipAudit Committee and Nomination Committee
Other current rolesChief Executive Officer of Experian plc
10
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jo Harlow Non-Executive Director
Skills and experienceJo brings a wealth of experience in consumer-facing businesses and in the telecoms and technology industry bothin the UK and internationally Jo spent 12 years in a variety of senior management roles with Nokia and Microsoft Prior to this she spent eight years at PampG and 11 years at Reebok in senior sales and marketing positions in both Europe and the US
Date of appointment 11 September 2017
Committee membershipChair of the Corporate Responsibility and Sustainability Committee and member of the Nomination Committee and Remuneration Committee
Life PresidentLord Sainsbury of Preston Candover KG
Other current rolesNon-Executive Director of InterContinental Hotels plc Non-Executive Director of Halmaplc and Member of the Supervisory Board of Ceconomy AG
11
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief Executive
Tim FallowfieldCompany Secretary amp Corporate Services Director
Kevin OrsquoByrne Chief Financial Officer
Jim BrownChief Executive Officer of Sainsburyrsquos Bank
Paul Mills-HicksFood Commercial Director
Angie RisleyGroup HR Director
Phil JordanGroup Chief InformationOfficer
Simon RobertsRetail and Operations Director
Clo MoriartyGroup Chief Digital Officer
12
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief ExecutiveSee Appendix page 9
Kevin OrsquoByrneChief Financial OfficerSee Appendix page 9
Tim FallowfieldCompany Secretary amp Corporate Services Director
Date of appointment September 2004
Skills and experienceTim joined Sainsburyrsquos in 2001 as Company Secretary and joined the Operating Board in September 2004 In addition to his role as Company Secretary Tim is responsible for the Corporate Services Division comprising Legal Services Data Governance Safety Shareholder Services Insurance and Central Security He chairs the Group Safety Committee and the Data Governance Committee Tim joined Sainsburyrsquos from Exelplc the global logistics company now part of DHL where he was Company Secretary and General Counsel He began his career at the international law firm Clifford Chance and is a qualified solicitor Tim is Chairman of the Disability Confident Business Leaders Group which works with Government in shaping the disability employment agenda and in raising awareness of the benefits of employing disabled people
Jim BrownCEO of Sainsburyrsquos Bank
Skills and experienceJim joined Sainsburyrsquos Bank as CEO in June 2019 and is also a member of the Sainsburyrsquos Group Operating Board He has held a number of senior international Financial Services roles - most recently for RBS in the UK as CEO of Williams and Glyn and prior to that CEO of Ulster Bank in Northern Ireland and the Republic of Ireland Before moving to Ireland he was based in Hong Kong and was CEO Retail and Commercial Banking Asia and the Middle East for RBS and ABN AMRO He has also been a member of the RBS Group Management Committee ABN AMRO Executive Group ABN AMRO Global Consumer Leadership Team and the RBSBank of China Joint Steering Committee Earlier in his career he held a number of senior executive roles for Citibank in Asia and Australia and New Zealand Jim has also held various Board positions including at Ulster Bank Saudi Hollandi Bank The Royal Bank of Scotland (China) Co Ltd and RBS (Pakistan) Ltd He is also a past President of the Institute of Banking in Ireland He is currently a Certified Bank Director
Date of appointment August 2019
Paul Mills-HicksFood Commercial Director
Skills and experiencePaul joined the Operating Board in May 2014 as Food Commercial Director having spent over ten years at Sainsburyrsquos He was closely involved in the formation and execution of the lsquoMaking Sainsburyrsquos Great Againrsquo strategy Following this he held a variety of roles in commercial strategy and finance most recently as Business Unit Director for Grocery Prior to Sainsburyrsquos Paul was European Controller at Marks and Spencer Group PLC and a Director at UBS Warburg
Date of appointment May 2014
13
APPENDIX Interim Results 201920 - November 2019
Operating Board
Angie RisleyGroup HR Director
Skills and experienceAngie was appointed Group HR Director and a member of the Operating Board in January 2013 with responsibility for human resources Angie is also a Director of Sainsburyrsquos Bank plc Angie was most recently Non-Executive Director and Chairman of the Remuneration Committee of Serco plc and prior to this was Group HR Director of Lloyds Banking Group and an Executive Director of Whitbread PLC with responsibility for HR and Corporate Social Responsibility Angie is currently Non-Executive Director and Chair of the Remuneration Committee at Smith amp Nephew plc
Date of appointment January 2013
Phil JordanGroup Chief Information Officer
Skills and experiencePhil joined the Board in January 2018 and has brought a fresh globalperspective on technology to the Operating Board in addition to a wealth of experience in digital data and business transformation Prior to joining Sainsburyrsquos Phil had a long and successful track record in telecommunications Most recently he was Global Chief Information Officer at Telefonica overseeing Digital Transformation and Information Technology and prior to that was Chief Information Officer for Vodafone UKIreland Phil has worked as a Non-Executive Advisor on Technology in the Investment amp Retail Banking sector and is currently a Non-Executive Director of TalkTalk Telecom Group PLC and chairs its Cyber-Security Committee
Date of appointment January 2018
Simon RobertsRetail and Operations Director
Skills and experienceSimon joined Sainsburyrsquos and the Operating Board in July 2017 as Central Retail amp Operations Director responsible for Stores Central operation and Logistics In his previous role he was Executive Vice President of Walgreens Boots Alliance and President of Boots with responsibility for commercial and retail operations across the UK and Ireland Prior to Boots Simon was at Marks and Spencer Group PLC where he held operational and customer leadership roles across stores divisions and central operations Simon is also the Non-Executive Chairman at the Institute ofCustomer Service
Date of appointment July 2017
Clodagh MoriartyGroup Chief Digital Officer
Skills and experienceClodagh was appointed Group Chief Digital Officer in June 2018 Clodagh leads the delivery of a consistent and first-rate digital experience for customers across Sainsburyrsquos Argos and Sainsburyrsquos BankClodagh joined Sainsburyrsquos in 2010 from Bain amp Co management consultants where she had gained experience working on a broad range of projects across multiple sectors and countries Following two years as Head of Strategy at Sainsburyrsquosshe moved into Food Commercial as Category Manager for Meal Solutions and then became Head of Online Trading spanning Food General Merchandise and Clothing before being promoted to Director of Online in 2016 In this role Clodagh was instrumental in driving innovation within Groceries Online and launching new initiatives including SmartShop and Chop Chop
Date of appointment June 2018
14
APPENDIX Interim Results 201920 - November 2019
Supplementary financial details
3 Financial calendarQ3 trading statement(15 weeks to 4 January 2020)
Preliminary results(52 weeks to 7 March 2020)
8 January 2020
30 April 2020
1 Weighted average number of shares
The interim dividend datesOrdinary shares
Ex-dividend 14 November 2019Record 15 November 2019Payment 20 December 2019
Product Quality Framework helps us fund investment
PQF cereals case study
BAU savings to offset cost inflation
Strategic cost transformation 5 year plan
Slide Number 43
Financial Services Priorities
Financial Services reshaping the portfolio
Financial Services key targets
Nectar
Slide Number 48
Digital
We will help our customers live well for less
Slide Number 51
Slide Number 52
Guidance for 201920
Retail sales
Sainsburyrsquos sales area and store numbers
Sainsburyrsquos store estate
Sainsburyrsquos investment programme
Retail margin
Group retail
Plc Board
Plc Board
Plc Board
Plc Board
Operating Board
Operating Board
Operating Board
Supplementary financial details
Contacts
Column1
201819
Grocery
19
GM
7
Clothing
1
To resize chart data range drag lower right corner of range
Grocery
GM
Clothing
APPENDIX Interim Results 201920 - November 2019
Guidance for 201920
1
Spacebull Expect to open 2 new Sainsburyrsquos supermarkets and up to 15 convenience storesbull Expect to open around 25 Argos stores in Sainsburyrsquos (of which 11 are
relocations) resulting in around 305 Argos stores in supermarketsbull Expect to close 2 supermarkets around 25 convenience stores and around 20
Argos stores in FY201920 as part of announced property closure programme of 10-15 supermarkets 30-40 convenience stores and 60-70 Argos stores
Financial Servicesbull Financial services underlying operating profit expected to be cpound45m including a
cpound10m benefit as a result of a change in transfer pricing between Argos and Argos Financial Services
bull Financial Services non-underlying costs are expected to be around pound30mbull No further capital injections into the Bank are expected following pound35m in H1 201920
Depreciation and amortisationbull Expect underlying retail depreciation and amortisation of around pound12bn
including cpound500m right of use asset depreciation
CostsOperating cost inflationbull Cost inflation between 2 and 3Cost savingsbull Continue to deliver cost savings to at least offset the impact of cost inflation
Finance costsbull Net finance costs of around pound405m including pound320m lease interest in
201920 following the introduction of IFRS 16
One-off itemsbull In 201920 cash outflows as a result of items excluded from
underlying results should not exceed pound100mbull Property strategy programme one-off costs expected to be
pound230m-pound270m of which cash costs are pound30-40m
Dividendbull Sainsburyrsquos plans to change the full year dividend policy to 19x cover by
underlying earnings (versus 20x previously) to offset the dilutive (non cash) impact of IFRS 16 on underlying earnings
Capital expenditurebull Retail capital expenditure to be around pound550mbull Retail capital expenditure is expected to be around pound550m-pound600m per
annum over the medium term
Net debtbull Net debt before fair value movements on derivatives to reduce by at
least pound300m
Tax ratebull Underlying tax rate to be between 25 and 26
APPENDIX Interim Results 201920 - November 2019
Retail sales
1 Sales including VAT excluding fuel
LFL sales growth1
(10)
Sales from net new space1
04
Total sales growth1
(06)
Supermarkets2
(07)
Convenience20
Groceries Online
70
Channels
(01)(25)
(12)
2 Supermarket sales include Argos SiS sales FY 1819 16
pound139bn
pound103bnGrocery
pound30bnGeneralMerchandise
pound488mClothing
2
Chart1
201819
194
66
1
Sheet1
APPENDIX Interim Results 201920 - November 2019
Sainsburyrsquos sales area and store numbersAs at 21 September 2019
Sainsburyrsquos store estateAs at 21 September 2019
Sq ftsales area
82446
870
40001 to60000
20001 to40000
10000 to20000
Under10000 Total
Over60000
0122122
0197197
0175175
06767
824607
1431
Argos storesArgos in SainsburyrsquosArgos in HomebaseOtherArgos total store numbers
Habitat1
Collection points
594281
8-
883
16317
As at21 Sept 2019
Disposalsclosures
Newstores
As at9 March 2019
17--8
-1
(7)-
(2)-
(9)
-(36)
588288
6-
88216
282
ConvenienceSupermarketsTotal stores
Number of stores
Sq ftsales area
1929350
2279
40001 to60000
20001 to40000
10000 to20000
Under10000 Total
Over60000
-18441844
-58185818
-85018501
-46604660
19292117323102
ConvenienceSupermarketsTotal stores
Space by store size (lsquo000 sq ft)
Argos and Habitat store numbers
1 5 Habitat stores 11 Habitat stores in Sainsburys
4
APPENDIX Interim Results 201920 - November 2019
ClosureBitterne West
Sainsburyrsquos investment programme201920
Q1
Supermarkets ConvenienceNew storesMilton Keynes Brooklands District CentBromley High StLeeds Wike Ridge LaneSalford Harbour CityCanterbury High St
ReplacementMayfair Stratton St
ClosuresMayfairWarren St
Q1Q1Q1Q2Q2
Q2
Q1Q2
5
APPENDIX Interim Results 201920 - November 2019
Retail margin
Retail sales (inc VAT inc fuel)(exc VAT inc fuel)
Retail underlying EBITDAR1
Retail underlying EBITDAR margin 2
at constant fuel pricesRetail underlying operating profit3
Retail underlying operating margin 4
at constant fuel prices
1656714808
10677272
4373030
1661214856
11147575
4873333
030342
30 bps28 bps10333 bps32 bps
1 Retail underlying operating profit before net rental income of pound6 million and underlying depreciation and amortisation of pound636 million2 Retail underlying EBITDAR divided by underlying retail sales excluding VAT3 Retail underlying earnings before interest tax and Sainsburyrsquos underlying share of post-tax profit from joint ventures4 Retail underlying operating profit divided by underlying retail sales excluding VAT
poundm H1201920
H1201819
Change
6
APPENDIX Interim Results 201920 - November 2019
H1201920
H1201819
Group retail
Return on capital employed 1
Net debt to EBITDAR (times)23
Fixed charge cover (times)2
Underlying tax rate Core retail capex sales5
713126
26515
743326
25715
poundm
1 ROCE Return is defined as a 52 week rolling underlying profit before interest and tax Capital employed is defined as group net assets2 Net debt of pound6778 million includes lease obligations under IFRS 16 and perpetual securities treated as debt divided by Group underlying EBITDAR of pound2171 million calculated for a 52-week period to 21 September 20193 Group underlying EBITDAR divided by rent (both capital and interest) and net finance costs where interest on perpetual securities is treated as an underlying finance costs4 52 weeks to 22nd September 2018 is not available due to the implementation of IFRS 16 Comparatives therefore reflect the 52 weeks to 9th March 20195 Includes retail sales inc vat inc fuel
4
4
7
APPENDIX Interim Results 201920 - November 2019
Plc Board
Kevin OrsquoByrneChief Financial Officer
Mike Coupe Group Chief Executive
Dame Susan Rice Senior Independent Director
Matt BrittinNon-Executive Director
Jo HarlowNon-Executive Director
Brian CassinNon-Executive Director
David KeensNon-Executive Director
Jean Tomlin Non-Executive Director
Martin Scicluna Chairman
8
APPENDIX Interim Results 201920 - November 2019
Plc Board
Mike Coupe Group Chief Executive Officer
Skills and experienceAppointed Group Chief Executive Officer on 9 July 2014 Mike has been a member of the Operating Board since October 2004 Mike has vast retail industry experience in trading strategy marketing digital and online as well as multi-site store experience He joined Sainsburyrsquos from Big Food Group where he was a board director of Big Food Group PLC and Managing Director of Iceland Food Stores He previously worked for both Asda and Tesco PLC where he served in a variety of senior management roles
Date of appointment 1 August 2007Mike has served as an Executive Director since 1 August 2007 and as Chief Executive Officer since 9 July 2014
Committee membershipCorporate Responsibility and Sustainability Committee
Kevin OrsquoByrne Chief Financial Officer
Skills and experienceKevin brings to the Board a wealth of retail and finance experience Kevin was previously Chief Executive Officer of Poundland Group Limited until December 2016 and held executive roles at Kingfisher plc from 2008 to 2015 including Divisional Director UK China and Turkey Chief Executive Officer of BampQ UK amp Ireland and Group Finance Director He was previously Group Finance Director of Dixons Retail plc and European Finance Director of Quaker Oats He was a Non-Executive Director of Land Securities Group PLC from 2008 to September 2017 where he was Chairman of the Audit Committee and Senior Independent Director
Date of appointment 9 January 2017
Other current rolesNon-Executive Director of Greene King plc
Skills and experienceMartin brings a breadth of experience and leadership in both executive and non-executive roles His previous roles include positions as the Chairman of Great Portland Estates plc Senior Independent Director and Chair of the Audit Committee of Worldpay Inc and Non-Executive Director and Chair of the Audit Committee of Lloyds Banking Group plc He was a partner at Deloitte LLP for 26 years serving as Chairman from 1995 to 2007 where his clients included Dixons WH Smith Alliance Unichem and Cadburyrsquos
Other current rolesChairman of RSA Insurance Group plc
Martin Scicluna Chairman
Date of appointment 1 November 2018 Martin joined the Board as Chairman Designate and Non-Executive Director on 1 November 2018 He was appointed as Chairman of the Board on 10 March 2019
Committee membershipChair of the Nomination Committee
Dame Susan Rice Senior Independent Director
Skills and experienceSusan has extensive experience as a Non-Executive Director as well as in retail banking financial services leadership and sustainability Her career in retail bankingis particularly relevant to our ownership ofSainsburyrsquos Bank Previously Susan was a member of the First Ministerrsquos Council of Economic Advisors Managing Director of Lloyds Banking Group Scotland and was previously Chief Executive and then Chairman of Lloyds TSB Scotland plc She has also held a range of other non-executive directorships including at the Bank of England and SSE plc
Committee membershipChair of the Remuneration Committee and a member of the Nomination Committee
Date of appointment 1 June 2013
Other current rolesChair of Scottish Water and Business Stream Chair of the Scottish Fiscal Commission Non-Executive Director of the North American Income Trust C Hoare and Co and Senior Independent Director of the North American Income Trust
9
Other current rolesNon-Executive Director and Chairman of the Audit Committee of Centrica plc
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jean Tomlin Non-Executive Director
Skills and experienceJean has extensive experience and breadth of skills in human resources and corporate responsibility Jean was formerly Director of HR Workforce and Accreditation for The London OrganisingCommittee of the Olympic and Paralympic Games where she set the strategic direction to ensure the mobilisation of the combined 200000-strong workforce including paid staff volunteers and contractors which represented the recruitment and mobilisation of the largest peacetime workforce and set the industry standard for volunteering with the highly acclaimed Games She was previously Group HR Director at Marks and Spencer Group Plc HR Director and founder member of Egg plc and Sales amp Operations Director of Prudential Direct
Date of appointment 1 January 2013
Committee membershipAudit Committee Corporate Responsibility and Sustainability Committee and Nomination Committee
David Keens Non-Executive Director
Skills and experienceDavid has extensive retail experience and knowledge of consumer facing businesses together with his core skills in finance David was formerly Group Finance Director of next plc from 1991 to 2015 and their Group Treasurer from 1986 to 1991 Previous management experience includes nine years in the UK and overseas operations of multinational food manufacturer Nabisco and prior to that seven years in the accountancy profession
Date of appointment 29 April 2015
Committee membershipChair of the Audit Committee and a member of the Nomination Committee
Other current rolesIndependent Board member of Capri Holdings Limited Non-Executive Director of Hakluyt and Chief Executive Officer of Chanzo Limited
Other current rolesNon-Executive Director Senior Independent Director and Chair of the Audit Committee of Auto Trader Group plc
Matt BrittinNon-Executive Director
Skills and experienceMatt has extensive experience of running a high profile fast moving innovative digital business Since 2015 he has been responsible for Googlersquos business and operations in Europe the Middle East and Africa and hersquos been in leadership roles at Google since 2007 Prior to that Matt spent much of his career in media and marketing with particular interests in strategy commercial development and sales performance This included commercial and digital leadership roles in UK media
Date of appointment 27 January 2011
Committee membershipNomination Committee and Remuneration Committee
Other current rolesGooglersquos President ndash Europe Middle East and Africa and Director of The Media Trust
Brian Cassin Non-Executive Director
Skills and experienceBrian brings present day experience of running a FTSE40 group and of big data and analytics ndash topics of key importance to Sainsburyrsquos Brian joined Experian plc as Chief Financial Officer in April 2012 a post he held until his appointment as Chief Executive Officer in July 2014 Prior to this Brian spent his career in investment banking at Greenhill amp Co where he was Managing Director and Partner Brian has also held various roles at Baring Brothers International and at the London Stock Exchange
Date of appointment 1 April 2016
Committee membershipAudit Committee and Nomination Committee
Other current rolesChief Executive Officer of Experian plc
10
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jo Harlow Non-Executive Director
Skills and experienceJo brings a wealth of experience in consumer-facing businesses and in the telecoms and technology industry bothin the UK and internationally Jo spent 12 years in a variety of senior management roles with Nokia and Microsoft Prior to this she spent eight years at PampG and 11 years at Reebok in senior sales and marketing positions in both Europe and the US
Date of appointment 11 September 2017
Committee membershipChair of the Corporate Responsibility and Sustainability Committee and member of the Nomination Committee and Remuneration Committee
Life PresidentLord Sainsbury of Preston Candover KG
Other current rolesNon-Executive Director of InterContinental Hotels plc Non-Executive Director of Halmaplc and Member of the Supervisory Board of Ceconomy AG
11
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief Executive
Tim FallowfieldCompany Secretary amp Corporate Services Director
Kevin OrsquoByrne Chief Financial Officer
Jim BrownChief Executive Officer of Sainsburyrsquos Bank
Paul Mills-HicksFood Commercial Director
Angie RisleyGroup HR Director
Phil JordanGroup Chief InformationOfficer
Simon RobertsRetail and Operations Director
Clo MoriartyGroup Chief Digital Officer
12
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief ExecutiveSee Appendix page 9
Kevin OrsquoByrneChief Financial OfficerSee Appendix page 9
Tim FallowfieldCompany Secretary amp Corporate Services Director
Date of appointment September 2004
Skills and experienceTim joined Sainsburyrsquos in 2001 as Company Secretary and joined the Operating Board in September 2004 In addition to his role as Company Secretary Tim is responsible for the Corporate Services Division comprising Legal Services Data Governance Safety Shareholder Services Insurance and Central Security He chairs the Group Safety Committee and the Data Governance Committee Tim joined Sainsburyrsquos from Exelplc the global logistics company now part of DHL where he was Company Secretary and General Counsel He began his career at the international law firm Clifford Chance and is a qualified solicitor Tim is Chairman of the Disability Confident Business Leaders Group which works with Government in shaping the disability employment agenda and in raising awareness of the benefits of employing disabled people
Jim BrownCEO of Sainsburyrsquos Bank
Skills and experienceJim joined Sainsburyrsquos Bank as CEO in June 2019 and is also a member of the Sainsburyrsquos Group Operating Board He has held a number of senior international Financial Services roles - most recently for RBS in the UK as CEO of Williams and Glyn and prior to that CEO of Ulster Bank in Northern Ireland and the Republic of Ireland Before moving to Ireland he was based in Hong Kong and was CEO Retail and Commercial Banking Asia and the Middle East for RBS and ABN AMRO He has also been a member of the RBS Group Management Committee ABN AMRO Executive Group ABN AMRO Global Consumer Leadership Team and the RBSBank of China Joint Steering Committee Earlier in his career he held a number of senior executive roles for Citibank in Asia and Australia and New Zealand Jim has also held various Board positions including at Ulster Bank Saudi Hollandi Bank The Royal Bank of Scotland (China) Co Ltd and RBS (Pakistan) Ltd He is also a past President of the Institute of Banking in Ireland He is currently a Certified Bank Director
Date of appointment August 2019
Paul Mills-HicksFood Commercial Director
Skills and experiencePaul joined the Operating Board in May 2014 as Food Commercial Director having spent over ten years at Sainsburyrsquos He was closely involved in the formation and execution of the lsquoMaking Sainsburyrsquos Great Againrsquo strategy Following this he held a variety of roles in commercial strategy and finance most recently as Business Unit Director for Grocery Prior to Sainsburyrsquos Paul was European Controller at Marks and Spencer Group PLC and a Director at UBS Warburg
Date of appointment May 2014
13
APPENDIX Interim Results 201920 - November 2019
Operating Board
Angie RisleyGroup HR Director
Skills and experienceAngie was appointed Group HR Director and a member of the Operating Board in January 2013 with responsibility for human resources Angie is also a Director of Sainsburyrsquos Bank plc Angie was most recently Non-Executive Director and Chairman of the Remuneration Committee of Serco plc and prior to this was Group HR Director of Lloyds Banking Group and an Executive Director of Whitbread PLC with responsibility for HR and Corporate Social Responsibility Angie is currently Non-Executive Director and Chair of the Remuneration Committee at Smith amp Nephew plc
Date of appointment January 2013
Phil JordanGroup Chief Information Officer
Skills and experiencePhil joined the Board in January 2018 and has brought a fresh globalperspective on technology to the Operating Board in addition to a wealth of experience in digital data and business transformation Prior to joining Sainsburyrsquos Phil had a long and successful track record in telecommunications Most recently he was Global Chief Information Officer at Telefonica overseeing Digital Transformation and Information Technology and prior to that was Chief Information Officer for Vodafone UKIreland Phil has worked as a Non-Executive Advisor on Technology in the Investment amp Retail Banking sector and is currently a Non-Executive Director of TalkTalk Telecom Group PLC and chairs its Cyber-Security Committee
Date of appointment January 2018
Simon RobertsRetail and Operations Director
Skills and experienceSimon joined Sainsburyrsquos and the Operating Board in July 2017 as Central Retail amp Operations Director responsible for Stores Central operation and Logistics In his previous role he was Executive Vice President of Walgreens Boots Alliance and President of Boots with responsibility for commercial and retail operations across the UK and Ireland Prior to Boots Simon was at Marks and Spencer Group PLC where he held operational and customer leadership roles across stores divisions and central operations Simon is also the Non-Executive Chairman at the Institute ofCustomer Service
Date of appointment July 2017
Clodagh MoriartyGroup Chief Digital Officer
Skills and experienceClodagh was appointed Group Chief Digital Officer in June 2018 Clodagh leads the delivery of a consistent and first-rate digital experience for customers across Sainsburyrsquos Argos and Sainsburyrsquos BankClodagh joined Sainsburyrsquos in 2010 from Bain amp Co management consultants where she had gained experience working on a broad range of projects across multiple sectors and countries Following two years as Head of Strategy at Sainsburyrsquosshe moved into Food Commercial as Category Manager for Meal Solutions and then became Head of Online Trading spanning Food General Merchandise and Clothing before being promoted to Director of Online in 2016 In this role Clodagh was instrumental in driving innovation within Groceries Online and launching new initiatives including SmartShop and Chop Chop
Date of appointment June 2018
14
APPENDIX Interim Results 201920 - November 2019
Supplementary financial details
3 Financial calendarQ3 trading statement(15 weeks to 4 January 2020)
Preliminary results(52 weeks to 7 March 2020)
8 January 2020
30 April 2020
1 Weighted average number of shares
The interim dividend datesOrdinary shares
Ex-dividend 14 November 2019Record 15 November 2019Payment 20 December 2019
Sainsburyrsquos store estateAs at 21 September 2019
Sq ftsales area
82446
870
40001 to60000
20001 to40000
10000 to20000
Under10000 Total
Over60000
0122122
0197197
0175175
06767
824607
1431
Argos storesArgos in SainsburyrsquosArgos in HomebaseOtherArgos total store numbers
Habitat1
Collection points
594281
8-
883
16317
As at21 Sept 2019
Disposalsclosures
Newstores
As at9 March 2019
17--8
-1
(7)-
(2)-
(9)
-(36)
588288
6-
88216
282
ConvenienceSupermarketsTotal stores
Number of stores
Sq ftsales area
1929350
2279
40001 to60000
20001 to40000
10000 to20000
Under10000 Total
Over60000
-18441844
-58185818
-85018501
-46604660
19292117323102
ConvenienceSupermarketsTotal stores
Space by store size (lsquo000 sq ft)
Argos and Habitat store numbers
1 5 Habitat stores 11 Habitat stores in Sainsburys
4
APPENDIX Interim Results 201920 - November 2019
ClosureBitterne West
Sainsburyrsquos investment programme201920
Q1
Supermarkets ConvenienceNew storesMilton Keynes Brooklands District CentBromley High StLeeds Wike Ridge LaneSalford Harbour CityCanterbury High St
ReplacementMayfair Stratton St
ClosuresMayfairWarren St
Q1Q1Q1Q2Q2
Q2
Q1Q2
5
APPENDIX Interim Results 201920 - November 2019
Retail margin
Retail sales (inc VAT inc fuel)(exc VAT inc fuel)
Retail underlying EBITDAR1
Retail underlying EBITDAR margin 2
at constant fuel pricesRetail underlying operating profit3
Retail underlying operating margin 4
at constant fuel prices
1656714808
10677272
4373030
1661214856
11147575
4873333
030342
30 bps28 bps10333 bps32 bps
1 Retail underlying operating profit before net rental income of pound6 million and underlying depreciation and amortisation of pound636 million2 Retail underlying EBITDAR divided by underlying retail sales excluding VAT3 Retail underlying earnings before interest tax and Sainsburyrsquos underlying share of post-tax profit from joint ventures4 Retail underlying operating profit divided by underlying retail sales excluding VAT
poundm H1201920
H1201819
Change
6
APPENDIX Interim Results 201920 - November 2019
H1201920
H1201819
Group retail
Return on capital employed 1
Net debt to EBITDAR (times)23
Fixed charge cover (times)2
Underlying tax rate Core retail capex sales5
713126
26515
743326
25715
poundm
1 ROCE Return is defined as a 52 week rolling underlying profit before interest and tax Capital employed is defined as group net assets2 Net debt of pound6778 million includes lease obligations under IFRS 16 and perpetual securities treated as debt divided by Group underlying EBITDAR of pound2171 million calculated for a 52-week period to 21 September 20193 Group underlying EBITDAR divided by rent (both capital and interest) and net finance costs where interest on perpetual securities is treated as an underlying finance costs4 52 weeks to 22nd September 2018 is not available due to the implementation of IFRS 16 Comparatives therefore reflect the 52 weeks to 9th March 20195 Includes retail sales inc vat inc fuel
4
4
7
APPENDIX Interim Results 201920 - November 2019
Plc Board
Kevin OrsquoByrneChief Financial Officer
Mike Coupe Group Chief Executive
Dame Susan Rice Senior Independent Director
Matt BrittinNon-Executive Director
Jo HarlowNon-Executive Director
Brian CassinNon-Executive Director
David KeensNon-Executive Director
Jean Tomlin Non-Executive Director
Martin Scicluna Chairman
8
APPENDIX Interim Results 201920 - November 2019
Plc Board
Mike Coupe Group Chief Executive Officer
Skills and experienceAppointed Group Chief Executive Officer on 9 July 2014 Mike has been a member of the Operating Board since October 2004 Mike has vast retail industry experience in trading strategy marketing digital and online as well as multi-site store experience He joined Sainsburyrsquos from Big Food Group where he was a board director of Big Food Group PLC and Managing Director of Iceland Food Stores He previously worked for both Asda and Tesco PLC where he served in a variety of senior management roles
Date of appointment 1 August 2007Mike has served as an Executive Director since 1 August 2007 and as Chief Executive Officer since 9 July 2014
Committee membershipCorporate Responsibility and Sustainability Committee
Kevin OrsquoByrne Chief Financial Officer
Skills and experienceKevin brings to the Board a wealth of retail and finance experience Kevin was previously Chief Executive Officer of Poundland Group Limited until December 2016 and held executive roles at Kingfisher plc from 2008 to 2015 including Divisional Director UK China and Turkey Chief Executive Officer of BampQ UK amp Ireland and Group Finance Director He was previously Group Finance Director of Dixons Retail plc and European Finance Director of Quaker Oats He was a Non-Executive Director of Land Securities Group PLC from 2008 to September 2017 where he was Chairman of the Audit Committee and Senior Independent Director
Date of appointment 9 January 2017
Other current rolesNon-Executive Director of Greene King plc
Skills and experienceMartin brings a breadth of experience and leadership in both executive and non-executive roles His previous roles include positions as the Chairman of Great Portland Estates plc Senior Independent Director and Chair of the Audit Committee of Worldpay Inc and Non-Executive Director and Chair of the Audit Committee of Lloyds Banking Group plc He was a partner at Deloitte LLP for 26 years serving as Chairman from 1995 to 2007 where his clients included Dixons WH Smith Alliance Unichem and Cadburyrsquos
Other current rolesChairman of RSA Insurance Group plc
Martin Scicluna Chairman
Date of appointment 1 November 2018 Martin joined the Board as Chairman Designate and Non-Executive Director on 1 November 2018 He was appointed as Chairman of the Board on 10 March 2019
Committee membershipChair of the Nomination Committee
Dame Susan Rice Senior Independent Director
Skills and experienceSusan has extensive experience as a Non-Executive Director as well as in retail banking financial services leadership and sustainability Her career in retail bankingis particularly relevant to our ownership ofSainsburyrsquos Bank Previously Susan was a member of the First Ministerrsquos Council of Economic Advisors Managing Director of Lloyds Banking Group Scotland and was previously Chief Executive and then Chairman of Lloyds TSB Scotland plc She has also held a range of other non-executive directorships including at the Bank of England and SSE plc
Committee membershipChair of the Remuneration Committee and a member of the Nomination Committee
Date of appointment 1 June 2013
Other current rolesChair of Scottish Water and Business Stream Chair of the Scottish Fiscal Commission Non-Executive Director of the North American Income Trust C Hoare and Co and Senior Independent Director of the North American Income Trust
9
Other current rolesNon-Executive Director and Chairman of the Audit Committee of Centrica plc
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jean Tomlin Non-Executive Director
Skills and experienceJean has extensive experience and breadth of skills in human resources and corporate responsibility Jean was formerly Director of HR Workforce and Accreditation for The London OrganisingCommittee of the Olympic and Paralympic Games where she set the strategic direction to ensure the mobilisation of the combined 200000-strong workforce including paid staff volunteers and contractors which represented the recruitment and mobilisation of the largest peacetime workforce and set the industry standard for volunteering with the highly acclaimed Games She was previously Group HR Director at Marks and Spencer Group Plc HR Director and founder member of Egg plc and Sales amp Operations Director of Prudential Direct
Date of appointment 1 January 2013
Committee membershipAudit Committee Corporate Responsibility and Sustainability Committee and Nomination Committee
David Keens Non-Executive Director
Skills and experienceDavid has extensive retail experience and knowledge of consumer facing businesses together with his core skills in finance David was formerly Group Finance Director of next plc from 1991 to 2015 and their Group Treasurer from 1986 to 1991 Previous management experience includes nine years in the UK and overseas operations of multinational food manufacturer Nabisco and prior to that seven years in the accountancy profession
Date of appointment 29 April 2015
Committee membershipChair of the Audit Committee and a member of the Nomination Committee
Other current rolesIndependent Board member of Capri Holdings Limited Non-Executive Director of Hakluyt and Chief Executive Officer of Chanzo Limited
Other current rolesNon-Executive Director Senior Independent Director and Chair of the Audit Committee of Auto Trader Group plc
Matt BrittinNon-Executive Director
Skills and experienceMatt has extensive experience of running a high profile fast moving innovative digital business Since 2015 he has been responsible for Googlersquos business and operations in Europe the Middle East and Africa and hersquos been in leadership roles at Google since 2007 Prior to that Matt spent much of his career in media and marketing with particular interests in strategy commercial development and sales performance This included commercial and digital leadership roles in UK media
Date of appointment 27 January 2011
Committee membershipNomination Committee and Remuneration Committee
Other current rolesGooglersquos President ndash Europe Middle East and Africa and Director of The Media Trust
Brian Cassin Non-Executive Director
Skills and experienceBrian brings present day experience of running a FTSE40 group and of big data and analytics ndash topics of key importance to Sainsburyrsquos Brian joined Experian plc as Chief Financial Officer in April 2012 a post he held until his appointment as Chief Executive Officer in July 2014 Prior to this Brian spent his career in investment banking at Greenhill amp Co where he was Managing Director and Partner Brian has also held various roles at Baring Brothers International and at the London Stock Exchange
Date of appointment 1 April 2016
Committee membershipAudit Committee and Nomination Committee
Other current rolesChief Executive Officer of Experian plc
10
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jo Harlow Non-Executive Director
Skills and experienceJo brings a wealth of experience in consumer-facing businesses and in the telecoms and technology industry bothin the UK and internationally Jo spent 12 years in a variety of senior management roles with Nokia and Microsoft Prior to this she spent eight years at PampG and 11 years at Reebok in senior sales and marketing positions in both Europe and the US
Date of appointment 11 September 2017
Committee membershipChair of the Corporate Responsibility and Sustainability Committee and member of the Nomination Committee and Remuneration Committee
Life PresidentLord Sainsbury of Preston Candover KG
Other current rolesNon-Executive Director of InterContinental Hotels plc Non-Executive Director of Halmaplc and Member of the Supervisory Board of Ceconomy AG
11
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief Executive
Tim FallowfieldCompany Secretary amp Corporate Services Director
Kevin OrsquoByrne Chief Financial Officer
Jim BrownChief Executive Officer of Sainsburyrsquos Bank
Paul Mills-HicksFood Commercial Director
Angie RisleyGroup HR Director
Phil JordanGroup Chief InformationOfficer
Simon RobertsRetail and Operations Director
Clo MoriartyGroup Chief Digital Officer
12
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief ExecutiveSee Appendix page 9
Kevin OrsquoByrneChief Financial OfficerSee Appendix page 9
Tim FallowfieldCompany Secretary amp Corporate Services Director
Date of appointment September 2004
Skills and experienceTim joined Sainsburyrsquos in 2001 as Company Secretary and joined the Operating Board in September 2004 In addition to his role as Company Secretary Tim is responsible for the Corporate Services Division comprising Legal Services Data Governance Safety Shareholder Services Insurance and Central Security He chairs the Group Safety Committee and the Data Governance Committee Tim joined Sainsburyrsquos from Exelplc the global logistics company now part of DHL where he was Company Secretary and General Counsel He began his career at the international law firm Clifford Chance and is a qualified solicitor Tim is Chairman of the Disability Confident Business Leaders Group which works with Government in shaping the disability employment agenda and in raising awareness of the benefits of employing disabled people
Jim BrownCEO of Sainsburyrsquos Bank
Skills and experienceJim joined Sainsburyrsquos Bank as CEO in June 2019 and is also a member of the Sainsburyrsquos Group Operating Board He has held a number of senior international Financial Services roles - most recently for RBS in the UK as CEO of Williams and Glyn and prior to that CEO of Ulster Bank in Northern Ireland and the Republic of Ireland Before moving to Ireland he was based in Hong Kong and was CEO Retail and Commercial Banking Asia and the Middle East for RBS and ABN AMRO He has also been a member of the RBS Group Management Committee ABN AMRO Executive Group ABN AMRO Global Consumer Leadership Team and the RBSBank of China Joint Steering Committee Earlier in his career he held a number of senior executive roles for Citibank in Asia and Australia and New Zealand Jim has also held various Board positions including at Ulster Bank Saudi Hollandi Bank The Royal Bank of Scotland (China) Co Ltd and RBS (Pakistan) Ltd He is also a past President of the Institute of Banking in Ireland He is currently a Certified Bank Director
Date of appointment August 2019
Paul Mills-HicksFood Commercial Director
Skills and experiencePaul joined the Operating Board in May 2014 as Food Commercial Director having spent over ten years at Sainsburyrsquos He was closely involved in the formation and execution of the lsquoMaking Sainsburyrsquos Great Againrsquo strategy Following this he held a variety of roles in commercial strategy and finance most recently as Business Unit Director for Grocery Prior to Sainsburyrsquos Paul was European Controller at Marks and Spencer Group PLC and a Director at UBS Warburg
Date of appointment May 2014
13
APPENDIX Interim Results 201920 - November 2019
Operating Board
Angie RisleyGroup HR Director
Skills and experienceAngie was appointed Group HR Director and a member of the Operating Board in January 2013 with responsibility for human resources Angie is also a Director of Sainsburyrsquos Bank plc Angie was most recently Non-Executive Director and Chairman of the Remuneration Committee of Serco plc and prior to this was Group HR Director of Lloyds Banking Group and an Executive Director of Whitbread PLC with responsibility for HR and Corporate Social Responsibility Angie is currently Non-Executive Director and Chair of the Remuneration Committee at Smith amp Nephew plc
Date of appointment January 2013
Phil JordanGroup Chief Information Officer
Skills and experiencePhil joined the Board in January 2018 and has brought a fresh globalperspective on technology to the Operating Board in addition to a wealth of experience in digital data and business transformation Prior to joining Sainsburyrsquos Phil had a long and successful track record in telecommunications Most recently he was Global Chief Information Officer at Telefonica overseeing Digital Transformation and Information Technology and prior to that was Chief Information Officer for Vodafone UKIreland Phil has worked as a Non-Executive Advisor on Technology in the Investment amp Retail Banking sector and is currently a Non-Executive Director of TalkTalk Telecom Group PLC and chairs its Cyber-Security Committee
Date of appointment January 2018
Simon RobertsRetail and Operations Director
Skills and experienceSimon joined Sainsburyrsquos and the Operating Board in July 2017 as Central Retail amp Operations Director responsible for Stores Central operation and Logistics In his previous role he was Executive Vice President of Walgreens Boots Alliance and President of Boots with responsibility for commercial and retail operations across the UK and Ireland Prior to Boots Simon was at Marks and Spencer Group PLC where he held operational and customer leadership roles across stores divisions and central operations Simon is also the Non-Executive Chairman at the Institute ofCustomer Service
Date of appointment July 2017
Clodagh MoriartyGroup Chief Digital Officer
Skills and experienceClodagh was appointed Group Chief Digital Officer in June 2018 Clodagh leads the delivery of a consistent and first-rate digital experience for customers across Sainsburyrsquos Argos and Sainsburyrsquos BankClodagh joined Sainsburyrsquos in 2010 from Bain amp Co management consultants where she had gained experience working on a broad range of projects across multiple sectors and countries Following two years as Head of Strategy at Sainsburyrsquosshe moved into Food Commercial as Category Manager for Meal Solutions and then became Head of Online Trading spanning Food General Merchandise and Clothing before being promoted to Director of Online in 2016 In this role Clodagh was instrumental in driving innovation within Groceries Online and launching new initiatives including SmartShop and Chop Chop
Date of appointment June 2018
14
APPENDIX Interim Results 201920 - November 2019
Supplementary financial details
3 Financial calendarQ3 trading statement(15 weeks to 4 January 2020)
Preliminary results(52 weeks to 7 March 2020)
8 January 2020
30 April 2020
1 Weighted average number of shares
The interim dividend datesOrdinary shares
Ex-dividend 14 November 2019Record 15 November 2019Payment 20 December 2019
Sainsburyrsquos store estateAs at 21 September 2019
Sq ftsales area
82446
870
40001 to60000
20001 to40000
10000 to20000
Under10000 Total
Over60000
0122122
0197197
0175175
06767
824607
1431
Argos storesArgos in SainsburyrsquosArgos in HomebaseOtherArgos total store numbers
Habitat1
Collection points
594281
8-
883
16317
As at21 Sept 2019
Disposalsclosures
Newstores
As at9 March 2019
17--8
-1
(7)-
(2)-
(9)
-(36)
588288
6-
88216
282
ConvenienceSupermarketsTotal stores
Number of stores
Sq ftsales area
1929350
2279
40001 to60000
20001 to40000
10000 to20000
Under10000 Total
Over60000
-18441844
-58185818
-85018501
-46604660
19292117323102
ConvenienceSupermarketsTotal stores
Space by store size (lsquo000 sq ft)
Argos and Habitat store numbers
1 5 Habitat stores 11 Habitat stores in Sainsburys
4
APPENDIX Interim Results 201920 - November 2019
ClosureBitterne West
Sainsburyrsquos investment programme201920
Q1
Supermarkets ConvenienceNew storesMilton Keynes Brooklands District CentBromley High StLeeds Wike Ridge LaneSalford Harbour CityCanterbury High St
ReplacementMayfair Stratton St
ClosuresMayfairWarren St
Q1Q1Q1Q2Q2
Q2
Q1Q2
5
APPENDIX Interim Results 201920 - November 2019
Retail margin
Retail sales (inc VAT inc fuel)(exc VAT inc fuel)
Retail underlying EBITDAR1
Retail underlying EBITDAR margin 2
at constant fuel pricesRetail underlying operating profit3
Retail underlying operating margin 4
at constant fuel prices
1656714808
10677272
4373030
1661214856
11147575
4873333
030342
30 bps28 bps10333 bps32 bps
1 Retail underlying operating profit before net rental income of pound6 million and underlying depreciation and amortisation of pound636 million2 Retail underlying EBITDAR divided by underlying retail sales excluding VAT3 Retail underlying earnings before interest tax and Sainsburyrsquos underlying share of post-tax profit from joint ventures4 Retail underlying operating profit divided by underlying retail sales excluding VAT
poundm H1201920
H1201819
Change
6
APPENDIX Interim Results 201920 - November 2019
H1201920
H1201819
Group retail
Return on capital employed 1
Net debt to EBITDAR (times)23
Fixed charge cover (times)2
Underlying tax rate Core retail capex sales5
713126
26515
743326
25715
poundm
1 ROCE Return is defined as a 52 week rolling underlying profit before interest and tax Capital employed is defined as group net assets2 Net debt of pound6778 million includes lease obligations under IFRS 16 and perpetual securities treated as debt divided by Group underlying EBITDAR of pound2171 million calculated for a 52-week period to 21 September 20193 Group underlying EBITDAR divided by rent (both capital and interest) and net finance costs where interest on perpetual securities is treated as an underlying finance costs4 52 weeks to 22nd September 2018 is not available due to the implementation of IFRS 16 Comparatives therefore reflect the 52 weeks to 9th March 20195 Includes retail sales inc vat inc fuel
4
4
7
APPENDIX Interim Results 201920 - November 2019
Plc Board
Kevin OrsquoByrneChief Financial Officer
Mike Coupe Group Chief Executive
Dame Susan Rice Senior Independent Director
Matt BrittinNon-Executive Director
Jo HarlowNon-Executive Director
Brian CassinNon-Executive Director
David KeensNon-Executive Director
Jean Tomlin Non-Executive Director
Martin Scicluna Chairman
8
APPENDIX Interim Results 201920 - November 2019
Plc Board
Mike Coupe Group Chief Executive Officer
Skills and experienceAppointed Group Chief Executive Officer on 9 July 2014 Mike has been a member of the Operating Board since October 2004 Mike has vast retail industry experience in trading strategy marketing digital and online as well as multi-site store experience He joined Sainsburyrsquos from Big Food Group where he was a board director of Big Food Group PLC and Managing Director of Iceland Food Stores He previously worked for both Asda and Tesco PLC where he served in a variety of senior management roles
Date of appointment 1 August 2007Mike has served as an Executive Director since 1 August 2007 and as Chief Executive Officer since 9 July 2014
Committee membershipCorporate Responsibility and Sustainability Committee
Kevin OrsquoByrne Chief Financial Officer
Skills and experienceKevin brings to the Board a wealth of retail and finance experience Kevin was previously Chief Executive Officer of Poundland Group Limited until December 2016 and held executive roles at Kingfisher plc from 2008 to 2015 including Divisional Director UK China and Turkey Chief Executive Officer of BampQ UK amp Ireland and Group Finance Director He was previously Group Finance Director of Dixons Retail plc and European Finance Director of Quaker Oats He was a Non-Executive Director of Land Securities Group PLC from 2008 to September 2017 where he was Chairman of the Audit Committee and Senior Independent Director
Date of appointment 9 January 2017
Other current rolesNon-Executive Director of Greene King plc
Skills and experienceMartin brings a breadth of experience and leadership in both executive and non-executive roles His previous roles include positions as the Chairman of Great Portland Estates plc Senior Independent Director and Chair of the Audit Committee of Worldpay Inc and Non-Executive Director and Chair of the Audit Committee of Lloyds Banking Group plc He was a partner at Deloitte LLP for 26 years serving as Chairman from 1995 to 2007 where his clients included Dixons WH Smith Alliance Unichem and Cadburyrsquos
Other current rolesChairman of RSA Insurance Group plc
Martin Scicluna Chairman
Date of appointment 1 November 2018 Martin joined the Board as Chairman Designate and Non-Executive Director on 1 November 2018 He was appointed as Chairman of the Board on 10 March 2019
Committee membershipChair of the Nomination Committee
Dame Susan Rice Senior Independent Director
Skills and experienceSusan has extensive experience as a Non-Executive Director as well as in retail banking financial services leadership and sustainability Her career in retail bankingis particularly relevant to our ownership ofSainsburyrsquos Bank Previously Susan was a member of the First Ministerrsquos Council of Economic Advisors Managing Director of Lloyds Banking Group Scotland and was previously Chief Executive and then Chairman of Lloyds TSB Scotland plc She has also held a range of other non-executive directorships including at the Bank of England and SSE plc
Committee membershipChair of the Remuneration Committee and a member of the Nomination Committee
Date of appointment 1 June 2013
Other current rolesChair of Scottish Water and Business Stream Chair of the Scottish Fiscal Commission Non-Executive Director of the North American Income Trust C Hoare and Co and Senior Independent Director of the North American Income Trust
9
Other current rolesNon-Executive Director and Chairman of the Audit Committee of Centrica plc
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jean Tomlin Non-Executive Director
Skills and experienceJean has extensive experience and breadth of skills in human resources and corporate responsibility Jean was formerly Director of HR Workforce and Accreditation for The London OrganisingCommittee of the Olympic and Paralympic Games where she set the strategic direction to ensure the mobilisation of the combined 200000-strong workforce including paid staff volunteers and contractors which represented the recruitment and mobilisation of the largest peacetime workforce and set the industry standard for volunteering with the highly acclaimed Games She was previously Group HR Director at Marks and Spencer Group Plc HR Director and founder member of Egg plc and Sales amp Operations Director of Prudential Direct
Date of appointment 1 January 2013
Committee membershipAudit Committee Corporate Responsibility and Sustainability Committee and Nomination Committee
David Keens Non-Executive Director
Skills and experienceDavid has extensive retail experience and knowledge of consumer facing businesses together with his core skills in finance David was formerly Group Finance Director of next plc from 1991 to 2015 and their Group Treasurer from 1986 to 1991 Previous management experience includes nine years in the UK and overseas operations of multinational food manufacturer Nabisco and prior to that seven years in the accountancy profession
Date of appointment 29 April 2015
Committee membershipChair of the Audit Committee and a member of the Nomination Committee
Other current rolesIndependent Board member of Capri Holdings Limited Non-Executive Director of Hakluyt and Chief Executive Officer of Chanzo Limited
Other current rolesNon-Executive Director Senior Independent Director and Chair of the Audit Committee of Auto Trader Group plc
Matt BrittinNon-Executive Director
Skills and experienceMatt has extensive experience of running a high profile fast moving innovative digital business Since 2015 he has been responsible for Googlersquos business and operations in Europe the Middle East and Africa and hersquos been in leadership roles at Google since 2007 Prior to that Matt spent much of his career in media and marketing with particular interests in strategy commercial development and sales performance This included commercial and digital leadership roles in UK media
Date of appointment 27 January 2011
Committee membershipNomination Committee and Remuneration Committee
Other current rolesGooglersquos President ndash Europe Middle East and Africa and Director of The Media Trust
Brian Cassin Non-Executive Director
Skills and experienceBrian brings present day experience of running a FTSE40 group and of big data and analytics ndash topics of key importance to Sainsburyrsquos Brian joined Experian plc as Chief Financial Officer in April 2012 a post he held until his appointment as Chief Executive Officer in July 2014 Prior to this Brian spent his career in investment banking at Greenhill amp Co where he was Managing Director and Partner Brian has also held various roles at Baring Brothers International and at the London Stock Exchange
Date of appointment 1 April 2016
Committee membershipAudit Committee and Nomination Committee
Other current rolesChief Executive Officer of Experian plc
10
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jo Harlow Non-Executive Director
Skills and experienceJo brings a wealth of experience in consumer-facing businesses and in the telecoms and technology industry bothin the UK and internationally Jo spent 12 years in a variety of senior management roles with Nokia and Microsoft Prior to this she spent eight years at PampG and 11 years at Reebok in senior sales and marketing positions in both Europe and the US
Date of appointment 11 September 2017
Committee membershipChair of the Corporate Responsibility and Sustainability Committee and member of the Nomination Committee and Remuneration Committee
Life PresidentLord Sainsbury of Preston Candover KG
Other current rolesNon-Executive Director of InterContinental Hotels plc Non-Executive Director of Halmaplc and Member of the Supervisory Board of Ceconomy AG
11
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief Executive
Tim FallowfieldCompany Secretary amp Corporate Services Director
Kevin OrsquoByrne Chief Financial Officer
Jim BrownChief Executive Officer of Sainsburyrsquos Bank
Paul Mills-HicksFood Commercial Director
Angie RisleyGroup HR Director
Phil JordanGroup Chief InformationOfficer
Simon RobertsRetail and Operations Director
Clo MoriartyGroup Chief Digital Officer
12
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief ExecutiveSee Appendix page 9
Kevin OrsquoByrneChief Financial OfficerSee Appendix page 9
Tim FallowfieldCompany Secretary amp Corporate Services Director
Date of appointment September 2004
Skills and experienceTim joined Sainsburyrsquos in 2001 as Company Secretary and joined the Operating Board in September 2004 In addition to his role as Company Secretary Tim is responsible for the Corporate Services Division comprising Legal Services Data Governance Safety Shareholder Services Insurance and Central Security He chairs the Group Safety Committee and the Data Governance Committee Tim joined Sainsburyrsquos from Exelplc the global logistics company now part of DHL where he was Company Secretary and General Counsel He began his career at the international law firm Clifford Chance and is a qualified solicitor Tim is Chairman of the Disability Confident Business Leaders Group which works with Government in shaping the disability employment agenda and in raising awareness of the benefits of employing disabled people
Jim BrownCEO of Sainsburyrsquos Bank
Skills and experienceJim joined Sainsburyrsquos Bank as CEO in June 2019 and is also a member of the Sainsburyrsquos Group Operating Board He has held a number of senior international Financial Services roles - most recently for RBS in the UK as CEO of Williams and Glyn and prior to that CEO of Ulster Bank in Northern Ireland and the Republic of Ireland Before moving to Ireland he was based in Hong Kong and was CEO Retail and Commercial Banking Asia and the Middle East for RBS and ABN AMRO He has also been a member of the RBS Group Management Committee ABN AMRO Executive Group ABN AMRO Global Consumer Leadership Team and the RBSBank of China Joint Steering Committee Earlier in his career he held a number of senior executive roles for Citibank in Asia and Australia and New Zealand Jim has also held various Board positions including at Ulster Bank Saudi Hollandi Bank The Royal Bank of Scotland (China) Co Ltd and RBS (Pakistan) Ltd He is also a past President of the Institute of Banking in Ireland He is currently a Certified Bank Director
Date of appointment August 2019
Paul Mills-HicksFood Commercial Director
Skills and experiencePaul joined the Operating Board in May 2014 as Food Commercial Director having spent over ten years at Sainsburyrsquos He was closely involved in the formation and execution of the lsquoMaking Sainsburyrsquos Great Againrsquo strategy Following this he held a variety of roles in commercial strategy and finance most recently as Business Unit Director for Grocery Prior to Sainsburyrsquos Paul was European Controller at Marks and Spencer Group PLC and a Director at UBS Warburg
Date of appointment May 2014
13
APPENDIX Interim Results 201920 - November 2019
Operating Board
Angie RisleyGroup HR Director
Skills and experienceAngie was appointed Group HR Director and a member of the Operating Board in January 2013 with responsibility for human resources Angie is also a Director of Sainsburyrsquos Bank plc Angie was most recently Non-Executive Director and Chairman of the Remuneration Committee of Serco plc and prior to this was Group HR Director of Lloyds Banking Group and an Executive Director of Whitbread PLC with responsibility for HR and Corporate Social Responsibility Angie is currently Non-Executive Director and Chair of the Remuneration Committee at Smith amp Nephew plc
Date of appointment January 2013
Phil JordanGroup Chief Information Officer
Skills and experiencePhil joined the Board in January 2018 and has brought a fresh globalperspective on technology to the Operating Board in addition to a wealth of experience in digital data and business transformation Prior to joining Sainsburyrsquos Phil had a long and successful track record in telecommunications Most recently he was Global Chief Information Officer at Telefonica overseeing Digital Transformation and Information Technology and prior to that was Chief Information Officer for Vodafone UKIreland Phil has worked as a Non-Executive Advisor on Technology in the Investment amp Retail Banking sector and is currently a Non-Executive Director of TalkTalk Telecom Group PLC and chairs its Cyber-Security Committee
Date of appointment January 2018
Simon RobertsRetail and Operations Director
Skills and experienceSimon joined Sainsburyrsquos and the Operating Board in July 2017 as Central Retail amp Operations Director responsible for Stores Central operation and Logistics In his previous role he was Executive Vice President of Walgreens Boots Alliance and President of Boots with responsibility for commercial and retail operations across the UK and Ireland Prior to Boots Simon was at Marks and Spencer Group PLC where he held operational and customer leadership roles across stores divisions and central operations Simon is also the Non-Executive Chairman at the Institute ofCustomer Service
Date of appointment July 2017
Clodagh MoriartyGroup Chief Digital Officer
Skills and experienceClodagh was appointed Group Chief Digital Officer in June 2018 Clodagh leads the delivery of a consistent and first-rate digital experience for customers across Sainsburyrsquos Argos and Sainsburyrsquos BankClodagh joined Sainsburyrsquos in 2010 from Bain amp Co management consultants where she had gained experience working on a broad range of projects across multiple sectors and countries Following two years as Head of Strategy at Sainsburyrsquosshe moved into Food Commercial as Category Manager for Meal Solutions and then became Head of Online Trading spanning Food General Merchandise and Clothing before being promoted to Director of Online in 2016 In this role Clodagh was instrumental in driving innovation within Groceries Online and launching new initiatives including SmartShop and Chop Chop
Date of appointment June 2018
14
APPENDIX Interim Results 201920 - November 2019
Supplementary financial details
3 Financial calendarQ3 trading statement(15 weeks to 4 January 2020)
Preliminary results(52 weeks to 7 March 2020)
8 January 2020
30 April 2020
1 Weighted average number of shares
The interim dividend datesOrdinary shares
Ex-dividend 14 November 2019Record 15 November 2019Payment 20 December 2019
Sainsburyrsquos store estateAs at 21 September 2019
Sq ftsales area
82446
870
40001 to60000
20001 to40000
10000 to20000
Under10000 Total
Over60000
0122122
0197197
0175175
06767
824607
1431
Argos storesArgos in SainsburyrsquosArgos in HomebaseOtherArgos total store numbers
Habitat1
Collection points
594281
8-
883
16317
As at21 Sept 2019
Disposalsclosures
Newstores
As at9 March 2019
17--8
-1
(7)-
(2)-
(9)
-(36)
588288
6-
88216
282
ConvenienceSupermarketsTotal stores
Number of stores
Sq ftsales area
1929350
2279
40001 to60000
20001 to40000
10000 to20000
Under10000 Total
Over60000
-18441844
-58185818
-85018501
-46604660
19292117323102
ConvenienceSupermarketsTotal stores
Space by store size (lsquo000 sq ft)
Argos and Habitat store numbers
1 5 Habitat stores 11 Habitat stores in Sainsburys
4
APPENDIX Interim Results 201920 - November 2019
ClosureBitterne West
Sainsburyrsquos investment programme201920
Q1
Supermarkets ConvenienceNew storesMilton Keynes Brooklands District CentBromley High StLeeds Wike Ridge LaneSalford Harbour CityCanterbury High St
ReplacementMayfair Stratton St
ClosuresMayfairWarren St
Q1Q1Q1Q2Q2
Q2
Q1Q2
5
APPENDIX Interim Results 201920 - November 2019
Retail margin
Retail sales (inc VAT inc fuel)(exc VAT inc fuel)
Retail underlying EBITDAR1
Retail underlying EBITDAR margin 2
at constant fuel pricesRetail underlying operating profit3
Retail underlying operating margin 4
at constant fuel prices
1656714808
10677272
4373030
1661214856
11147575
4873333
030342
30 bps28 bps10333 bps32 bps
1 Retail underlying operating profit before net rental income of pound6 million and underlying depreciation and amortisation of pound636 million2 Retail underlying EBITDAR divided by underlying retail sales excluding VAT3 Retail underlying earnings before interest tax and Sainsburyrsquos underlying share of post-tax profit from joint ventures4 Retail underlying operating profit divided by underlying retail sales excluding VAT
poundm H1201920
H1201819
Change
6
APPENDIX Interim Results 201920 - November 2019
H1201920
H1201819
Group retail
Return on capital employed 1
Net debt to EBITDAR (times)23
Fixed charge cover (times)2
Underlying tax rate Core retail capex sales5
713126
26515
743326
25715
poundm
1 ROCE Return is defined as a 52 week rolling underlying profit before interest and tax Capital employed is defined as group net assets2 Net debt of pound6778 million includes lease obligations under IFRS 16 and perpetual securities treated as debt divided by Group underlying EBITDAR of pound2171 million calculated for a 52-week period to 21 September 20193 Group underlying EBITDAR divided by rent (both capital and interest) and net finance costs where interest on perpetual securities is treated as an underlying finance costs4 52 weeks to 22nd September 2018 is not available due to the implementation of IFRS 16 Comparatives therefore reflect the 52 weeks to 9th March 20195 Includes retail sales inc vat inc fuel
4
4
7
APPENDIX Interim Results 201920 - November 2019
Plc Board
Kevin OrsquoByrneChief Financial Officer
Mike Coupe Group Chief Executive
Dame Susan Rice Senior Independent Director
Matt BrittinNon-Executive Director
Jo HarlowNon-Executive Director
Brian CassinNon-Executive Director
David KeensNon-Executive Director
Jean Tomlin Non-Executive Director
Martin Scicluna Chairman
8
APPENDIX Interim Results 201920 - November 2019
Plc Board
Mike Coupe Group Chief Executive Officer
Skills and experienceAppointed Group Chief Executive Officer on 9 July 2014 Mike has been a member of the Operating Board since October 2004 Mike has vast retail industry experience in trading strategy marketing digital and online as well as multi-site store experience He joined Sainsburyrsquos from Big Food Group where he was a board director of Big Food Group PLC and Managing Director of Iceland Food Stores He previously worked for both Asda and Tesco PLC where he served in a variety of senior management roles
Date of appointment 1 August 2007Mike has served as an Executive Director since 1 August 2007 and as Chief Executive Officer since 9 July 2014
Committee membershipCorporate Responsibility and Sustainability Committee
Kevin OrsquoByrne Chief Financial Officer
Skills and experienceKevin brings to the Board a wealth of retail and finance experience Kevin was previously Chief Executive Officer of Poundland Group Limited until December 2016 and held executive roles at Kingfisher plc from 2008 to 2015 including Divisional Director UK China and Turkey Chief Executive Officer of BampQ UK amp Ireland and Group Finance Director He was previously Group Finance Director of Dixons Retail plc and European Finance Director of Quaker Oats He was a Non-Executive Director of Land Securities Group PLC from 2008 to September 2017 where he was Chairman of the Audit Committee and Senior Independent Director
Date of appointment 9 January 2017
Other current rolesNon-Executive Director of Greene King plc
Skills and experienceMartin brings a breadth of experience and leadership in both executive and non-executive roles His previous roles include positions as the Chairman of Great Portland Estates plc Senior Independent Director and Chair of the Audit Committee of Worldpay Inc and Non-Executive Director and Chair of the Audit Committee of Lloyds Banking Group plc He was a partner at Deloitte LLP for 26 years serving as Chairman from 1995 to 2007 where his clients included Dixons WH Smith Alliance Unichem and Cadburyrsquos
Other current rolesChairman of RSA Insurance Group plc
Martin Scicluna Chairman
Date of appointment 1 November 2018 Martin joined the Board as Chairman Designate and Non-Executive Director on 1 November 2018 He was appointed as Chairman of the Board on 10 March 2019
Committee membershipChair of the Nomination Committee
Dame Susan Rice Senior Independent Director
Skills and experienceSusan has extensive experience as a Non-Executive Director as well as in retail banking financial services leadership and sustainability Her career in retail bankingis particularly relevant to our ownership ofSainsburyrsquos Bank Previously Susan was a member of the First Ministerrsquos Council of Economic Advisors Managing Director of Lloyds Banking Group Scotland and was previously Chief Executive and then Chairman of Lloyds TSB Scotland plc She has also held a range of other non-executive directorships including at the Bank of England and SSE plc
Committee membershipChair of the Remuneration Committee and a member of the Nomination Committee
Date of appointment 1 June 2013
Other current rolesChair of Scottish Water and Business Stream Chair of the Scottish Fiscal Commission Non-Executive Director of the North American Income Trust C Hoare and Co and Senior Independent Director of the North American Income Trust
9
Other current rolesNon-Executive Director and Chairman of the Audit Committee of Centrica plc
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jean Tomlin Non-Executive Director
Skills and experienceJean has extensive experience and breadth of skills in human resources and corporate responsibility Jean was formerly Director of HR Workforce and Accreditation for The London OrganisingCommittee of the Olympic and Paralympic Games where she set the strategic direction to ensure the mobilisation of the combined 200000-strong workforce including paid staff volunteers and contractors which represented the recruitment and mobilisation of the largest peacetime workforce and set the industry standard for volunteering with the highly acclaimed Games She was previously Group HR Director at Marks and Spencer Group Plc HR Director and founder member of Egg plc and Sales amp Operations Director of Prudential Direct
Date of appointment 1 January 2013
Committee membershipAudit Committee Corporate Responsibility and Sustainability Committee and Nomination Committee
David Keens Non-Executive Director
Skills and experienceDavid has extensive retail experience and knowledge of consumer facing businesses together with his core skills in finance David was formerly Group Finance Director of next plc from 1991 to 2015 and their Group Treasurer from 1986 to 1991 Previous management experience includes nine years in the UK and overseas operations of multinational food manufacturer Nabisco and prior to that seven years in the accountancy profession
Date of appointment 29 April 2015
Committee membershipChair of the Audit Committee and a member of the Nomination Committee
Other current rolesIndependent Board member of Capri Holdings Limited Non-Executive Director of Hakluyt and Chief Executive Officer of Chanzo Limited
Other current rolesNon-Executive Director Senior Independent Director and Chair of the Audit Committee of Auto Trader Group plc
Matt BrittinNon-Executive Director
Skills and experienceMatt has extensive experience of running a high profile fast moving innovative digital business Since 2015 he has been responsible for Googlersquos business and operations in Europe the Middle East and Africa and hersquos been in leadership roles at Google since 2007 Prior to that Matt spent much of his career in media and marketing with particular interests in strategy commercial development and sales performance This included commercial and digital leadership roles in UK media
Date of appointment 27 January 2011
Committee membershipNomination Committee and Remuneration Committee
Other current rolesGooglersquos President ndash Europe Middle East and Africa and Director of The Media Trust
Brian Cassin Non-Executive Director
Skills and experienceBrian brings present day experience of running a FTSE40 group and of big data and analytics ndash topics of key importance to Sainsburyrsquos Brian joined Experian plc as Chief Financial Officer in April 2012 a post he held until his appointment as Chief Executive Officer in July 2014 Prior to this Brian spent his career in investment banking at Greenhill amp Co where he was Managing Director and Partner Brian has also held various roles at Baring Brothers International and at the London Stock Exchange
Date of appointment 1 April 2016
Committee membershipAudit Committee and Nomination Committee
Other current rolesChief Executive Officer of Experian plc
10
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jo Harlow Non-Executive Director
Skills and experienceJo brings a wealth of experience in consumer-facing businesses and in the telecoms and technology industry bothin the UK and internationally Jo spent 12 years in a variety of senior management roles with Nokia and Microsoft Prior to this she spent eight years at PampG and 11 years at Reebok in senior sales and marketing positions in both Europe and the US
Date of appointment 11 September 2017
Committee membershipChair of the Corporate Responsibility and Sustainability Committee and member of the Nomination Committee and Remuneration Committee
Life PresidentLord Sainsbury of Preston Candover KG
Other current rolesNon-Executive Director of InterContinental Hotels plc Non-Executive Director of Halmaplc and Member of the Supervisory Board of Ceconomy AG
11
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief Executive
Tim FallowfieldCompany Secretary amp Corporate Services Director
Kevin OrsquoByrne Chief Financial Officer
Jim BrownChief Executive Officer of Sainsburyrsquos Bank
Paul Mills-HicksFood Commercial Director
Angie RisleyGroup HR Director
Phil JordanGroup Chief InformationOfficer
Simon RobertsRetail and Operations Director
Clo MoriartyGroup Chief Digital Officer
12
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief ExecutiveSee Appendix page 9
Kevin OrsquoByrneChief Financial OfficerSee Appendix page 9
Tim FallowfieldCompany Secretary amp Corporate Services Director
Date of appointment September 2004
Skills and experienceTim joined Sainsburyrsquos in 2001 as Company Secretary and joined the Operating Board in September 2004 In addition to his role as Company Secretary Tim is responsible for the Corporate Services Division comprising Legal Services Data Governance Safety Shareholder Services Insurance and Central Security He chairs the Group Safety Committee and the Data Governance Committee Tim joined Sainsburyrsquos from Exelplc the global logistics company now part of DHL where he was Company Secretary and General Counsel He began his career at the international law firm Clifford Chance and is a qualified solicitor Tim is Chairman of the Disability Confident Business Leaders Group which works with Government in shaping the disability employment agenda and in raising awareness of the benefits of employing disabled people
Jim BrownCEO of Sainsburyrsquos Bank
Skills and experienceJim joined Sainsburyrsquos Bank as CEO in June 2019 and is also a member of the Sainsburyrsquos Group Operating Board He has held a number of senior international Financial Services roles - most recently for RBS in the UK as CEO of Williams and Glyn and prior to that CEO of Ulster Bank in Northern Ireland and the Republic of Ireland Before moving to Ireland he was based in Hong Kong and was CEO Retail and Commercial Banking Asia and the Middle East for RBS and ABN AMRO He has also been a member of the RBS Group Management Committee ABN AMRO Executive Group ABN AMRO Global Consumer Leadership Team and the RBSBank of China Joint Steering Committee Earlier in his career he held a number of senior executive roles for Citibank in Asia and Australia and New Zealand Jim has also held various Board positions including at Ulster Bank Saudi Hollandi Bank The Royal Bank of Scotland (China) Co Ltd and RBS (Pakistan) Ltd He is also a past President of the Institute of Banking in Ireland He is currently a Certified Bank Director
Date of appointment August 2019
Paul Mills-HicksFood Commercial Director
Skills and experiencePaul joined the Operating Board in May 2014 as Food Commercial Director having spent over ten years at Sainsburyrsquos He was closely involved in the formation and execution of the lsquoMaking Sainsburyrsquos Great Againrsquo strategy Following this he held a variety of roles in commercial strategy and finance most recently as Business Unit Director for Grocery Prior to Sainsburyrsquos Paul was European Controller at Marks and Spencer Group PLC and a Director at UBS Warburg
Date of appointment May 2014
13
APPENDIX Interim Results 201920 - November 2019
Operating Board
Angie RisleyGroup HR Director
Skills and experienceAngie was appointed Group HR Director and a member of the Operating Board in January 2013 with responsibility for human resources Angie is also a Director of Sainsburyrsquos Bank plc Angie was most recently Non-Executive Director and Chairman of the Remuneration Committee of Serco plc and prior to this was Group HR Director of Lloyds Banking Group and an Executive Director of Whitbread PLC with responsibility for HR and Corporate Social Responsibility Angie is currently Non-Executive Director and Chair of the Remuneration Committee at Smith amp Nephew plc
Date of appointment January 2013
Phil JordanGroup Chief Information Officer
Skills and experiencePhil joined the Board in January 2018 and has brought a fresh globalperspective on technology to the Operating Board in addition to a wealth of experience in digital data and business transformation Prior to joining Sainsburyrsquos Phil had a long and successful track record in telecommunications Most recently he was Global Chief Information Officer at Telefonica overseeing Digital Transformation and Information Technology and prior to that was Chief Information Officer for Vodafone UKIreland Phil has worked as a Non-Executive Advisor on Technology in the Investment amp Retail Banking sector and is currently a Non-Executive Director of TalkTalk Telecom Group PLC and chairs its Cyber-Security Committee
Date of appointment January 2018
Simon RobertsRetail and Operations Director
Skills and experienceSimon joined Sainsburyrsquos and the Operating Board in July 2017 as Central Retail amp Operations Director responsible for Stores Central operation and Logistics In his previous role he was Executive Vice President of Walgreens Boots Alliance and President of Boots with responsibility for commercial and retail operations across the UK and Ireland Prior to Boots Simon was at Marks and Spencer Group PLC where he held operational and customer leadership roles across stores divisions and central operations Simon is also the Non-Executive Chairman at the Institute ofCustomer Service
Date of appointment July 2017
Clodagh MoriartyGroup Chief Digital Officer
Skills and experienceClodagh was appointed Group Chief Digital Officer in June 2018 Clodagh leads the delivery of a consistent and first-rate digital experience for customers across Sainsburyrsquos Argos and Sainsburyrsquos BankClodagh joined Sainsburyrsquos in 2010 from Bain amp Co management consultants where she had gained experience working on a broad range of projects across multiple sectors and countries Following two years as Head of Strategy at Sainsburyrsquosshe moved into Food Commercial as Category Manager for Meal Solutions and then became Head of Online Trading spanning Food General Merchandise and Clothing before being promoted to Director of Online in 2016 In this role Clodagh was instrumental in driving innovation within Groceries Online and launching new initiatives including SmartShop and Chop Chop
Date of appointment June 2018
14
APPENDIX Interim Results 201920 - November 2019
Supplementary financial details
3 Financial calendarQ3 trading statement(15 weeks to 4 January 2020)
Preliminary results(52 weeks to 7 March 2020)
8 January 2020
30 April 2020
1 Weighted average number of shares
The interim dividend datesOrdinary shares
Ex-dividend 14 November 2019Record 15 November 2019Payment 20 December 2019
Sainsburyrsquos store estateAs at 21 September 2019
Sq ftsales area
82446
870
40001 to60000
20001 to40000
10000 to20000
Under10000 Total
Over60000
0122122
0197197
0175175
06767
824607
1431
Argos storesArgos in SainsburyrsquosArgos in HomebaseOtherArgos total store numbers
Habitat1
Collection points
594281
8-
883
16317
As at21 Sept 2019
Disposalsclosures
Newstores
As at9 March 2019
17--8
-1
(7)-
(2)-
(9)
-(36)
588288
6-
88216
282
ConvenienceSupermarketsTotal stores
Number of stores
Sq ftsales area
1929350
2279
40001 to60000
20001 to40000
10000 to20000
Under10000 Total
Over60000
-18441844
-58185818
-85018501
-46604660
19292117323102
ConvenienceSupermarketsTotal stores
Space by store size (lsquo000 sq ft)
Argos and Habitat store numbers
1 5 Habitat stores 11 Habitat stores in Sainsburys
4
APPENDIX Interim Results 201920 - November 2019
ClosureBitterne West
Sainsburyrsquos investment programme201920
Q1
Supermarkets ConvenienceNew storesMilton Keynes Brooklands District CentBromley High StLeeds Wike Ridge LaneSalford Harbour CityCanterbury High St
ReplacementMayfair Stratton St
ClosuresMayfairWarren St
Q1Q1Q1Q2Q2
Q2
Q1Q2
5
APPENDIX Interim Results 201920 - November 2019
Retail margin
Retail sales (inc VAT inc fuel)(exc VAT inc fuel)
Retail underlying EBITDAR1
Retail underlying EBITDAR margin 2
at constant fuel pricesRetail underlying operating profit3
Retail underlying operating margin 4
at constant fuel prices
1656714808
10677272
4373030
1661214856
11147575
4873333
030342
30 bps28 bps10333 bps32 bps
1 Retail underlying operating profit before net rental income of pound6 million and underlying depreciation and amortisation of pound636 million2 Retail underlying EBITDAR divided by underlying retail sales excluding VAT3 Retail underlying earnings before interest tax and Sainsburyrsquos underlying share of post-tax profit from joint ventures4 Retail underlying operating profit divided by underlying retail sales excluding VAT
poundm H1201920
H1201819
Change
6
APPENDIX Interim Results 201920 - November 2019
H1201920
H1201819
Group retail
Return on capital employed 1
Net debt to EBITDAR (times)23
Fixed charge cover (times)2
Underlying tax rate Core retail capex sales5
713126
26515
743326
25715
poundm
1 ROCE Return is defined as a 52 week rolling underlying profit before interest and tax Capital employed is defined as group net assets2 Net debt of pound6778 million includes lease obligations under IFRS 16 and perpetual securities treated as debt divided by Group underlying EBITDAR of pound2171 million calculated for a 52-week period to 21 September 20193 Group underlying EBITDAR divided by rent (both capital and interest) and net finance costs where interest on perpetual securities is treated as an underlying finance costs4 52 weeks to 22nd September 2018 is not available due to the implementation of IFRS 16 Comparatives therefore reflect the 52 weeks to 9th March 20195 Includes retail sales inc vat inc fuel
4
4
7
APPENDIX Interim Results 201920 - November 2019
Plc Board
Kevin OrsquoByrneChief Financial Officer
Mike Coupe Group Chief Executive
Dame Susan Rice Senior Independent Director
Matt BrittinNon-Executive Director
Jo HarlowNon-Executive Director
Brian CassinNon-Executive Director
David KeensNon-Executive Director
Jean Tomlin Non-Executive Director
Martin Scicluna Chairman
8
APPENDIX Interim Results 201920 - November 2019
Plc Board
Mike Coupe Group Chief Executive Officer
Skills and experienceAppointed Group Chief Executive Officer on 9 July 2014 Mike has been a member of the Operating Board since October 2004 Mike has vast retail industry experience in trading strategy marketing digital and online as well as multi-site store experience He joined Sainsburyrsquos from Big Food Group where he was a board director of Big Food Group PLC and Managing Director of Iceland Food Stores He previously worked for both Asda and Tesco PLC where he served in a variety of senior management roles
Date of appointment 1 August 2007Mike has served as an Executive Director since 1 August 2007 and as Chief Executive Officer since 9 July 2014
Committee membershipCorporate Responsibility and Sustainability Committee
Kevin OrsquoByrne Chief Financial Officer
Skills and experienceKevin brings to the Board a wealth of retail and finance experience Kevin was previously Chief Executive Officer of Poundland Group Limited until December 2016 and held executive roles at Kingfisher plc from 2008 to 2015 including Divisional Director UK China and Turkey Chief Executive Officer of BampQ UK amp Ireland and Group Finance Director He was previously Group Finance Director of Dixons Retail plc and European Finance Director of Quaker Oats He was a Non-Executive Director of Land Securities Group PLC from 2008 to September 2017 where he was Chairman of the Audit Committee and Senior Independent Director
Date of appointment 9 January 2017
Other current rolesNon-Executive Director of Greene King plc
Skills and experienceMartin brings a breadth of experience and leadership in both executive and non-executive roles His previous roles include positions as the Chairman of Great Portland Estates plc Senior Independent Director and Chair of the Audit Committee of Worldpay Inc and Non-Executive Director and Chair of the Audit Committee of Lloyds Banking Group plc He was a partner at Deloitte LLP for 26 years serving as Chairman from 1995 to 2007 where his clients included Dixons WH Smith Alliance Unichem and Cadburyrsquos
Other current rolesChairman of RSA Insurance Group plc
Martin Scicluna Chairman
Date of appointment 1 November 2018 Martin joined the Board as Chairman Designate and Non-Executive Director on 1 November 2018 He was appointed as Chairman of the Board on 10 March 2019
Committee membershipChair of the Nomination Committee
Dame Susan Rice Senior Independent Director
Skills and experienceSusan has extensive experience as a Non-Executive Director as well as in retail banking financial services leadership and sustainability Her career in retail bankingis particularly relevant to our ownership ofSainsburyrsquos Bank Previously Susan was a member of the First Ministerrsquos Council of Economic Advisors Managing Director of Lloyds Banking Group Scotland and was previously Chief Executive and then Chairman of Lloyds TSB Scotland plc She has also held a range of other non-executive directorships including at the Bank of England and SSE plc
Committee membershipChair of the Remuneration Committee and a member of the Nomination Committee
Date of appointment 1 June 2013
Other current rolesChair of Scottish Water and Business Stream Chair of the Scottish Fiscal Commission Non-Executive Director of the North American Income Trust C Hoare and Co and Senior Independent Director of the North American Income Trust
9
Other current rolesNon-Executive Director and Chairman of the Audit Committee of Centrica plc
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jean Tomlin Non-Executive Director
Skills and experienceJean has extensive experience and breadth of skills in human resources and corporate responsibility Jean was formerly Director of HR Workforce and Accreditation for The London OrganisingCommittee of the Olympic and Paralympic Games where she set the strategic direction to ensure the mobilisation of the combined 200000-strong workforce including paid staff volunteers and contractors which represented the recruitment and mobilisation of the largest peacetime workforce and set the industry standard for volunteering with the highly acclaimed Games She was previously Group HR Director at Marks and Spencer Group Plc HR Director and founder member of Egg plc and Sales amp Operations Director of Prudential Direct
Date of appointment 1 January 2013
Committee membershipAudit Committee Corporate Responsibility and Sustainability Committee and Nomination Committee
David Keens Non-Executive Director
Skills and experienceDavid has extensive retail experience and knowledge of consumer facing businesses together with his core skills in finance David was formerly Group Finance Director of next plc from 1991 to 2015 and their Group Treasurer from 1986 to 1991 Previous management experience includes nine years in the UK and overseas operations of multinational food manufacturer Nabisco and prior to that seven years in the accountancy profession
Date of appointment 29 April 2015
Committee membershipChair of the Audit Committee and a member of the Nomination Committee
Other current rolesIndependent Board member of Capri Holdings Limited Non-Executive Director of Hakluyt and Chief Executive Officer of Chanzo Limited
Other current rolesNon-Executive Director Senior Independent Director and Chair of the Audit Committee of Auto Trader Group plc
Matt BrittinNon-Executive Director
Skills and experienceMatt has extensive experience of running a high profile fast moving innovative digital business Since 2015 he has been responsible for Googlersquos business and operations in Europe the Middle East and Africa and hersquos been in leadership roles at Google since 2007 Prior to that Matt spent much of his career in media and marketing with particular interests in strategy commercial development and sales performance This included commercial and digital leadership roles in UK media
Date of appointment 27 January 2011
Committee membershipNomination Committee and Remuneration Committee
Other current rolesGooglersquos President ndash Europe Middle East and Africa and Director of The Media Trust
Brian Cassin Non-Executive Director
Skills and experienceBrian brings present day experience of running a FTSE40 group and of big data and analytics ndash topics of key importance to Sainsburyrsquos Brian joined Experian plc as Chief Financial Officer in April 2012 a post he held until his appointment as Chief Executive Officer in July 2014 Prior to this Brian spent his career in investment banking at Greenhill amp Co where he was Managing Director and Partner Brian has also held various roles at Baring Brothers International and at the London Stock Exchange
Date of appointment 1 April 2016
Committee membershipAudit Committee and Nomination Committee
Other current rolesChief Executive Officer of Experian plc
10
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jo Harlow Non-Executive Director
Skills and experienceJo brings a wealth of experience in consumer-facing businesses and in the telecoms and technology industry bothin the UK and internationally Jo spent 12 years in a variety of senior management roles with Nokia and Microsoft Prior to this she spent eight years at PampG and 11 years at Reebok in senior sales and marketing positions in both Europe and the US
Date of appointment 11 September 2017
Committee membershipChair of the Corporate Responsibility and Sustainability Committee and member of the Nomination Committee and Remuneration Committee
Life PresidentLord Sainsbury of Preston Candover KG
Other current rolesNon-Executive Director of InterContinental Hotels plc Non-Executive Director of Halmaplc and Member of the Supervisory Board of Ceconomy AG
11
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief Executive
Tim FallowfieldCompany Secretary amp Corporate Services Director
Kevin OrsquoByrne Chief Financial Officer
Jim BrownChief Executive Officer of Sainsburyrsquos Bank
Paul Mills-HicksFood Commercial Director
Angie RisleyGroup HR Director
Phil JordanGroup Chief InformationOfficer
Simon RobertsRetail and Operations Director
Clo MoriartyGroup Chief Digital Officer
12
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief ExecutiveSee Appendix page 9
Kevin OrsquoByrneChief Financial OfficerSee Appendix page 9
Tim FallowfieldCompany Secretary amp Corporate Services Director
Date of appointment September 2004
Skills and experienceTim joined Sainsburyrsquos in 2001 as Company Secretary and joined the Operating Board in September 2004 In addition to his role as Company Secretary Tim is responsible for the Corporate Services Division comprising Legal Services Data Governance Safety Shareholder Services Insurance and Central Security He chairs the Group Safety Committee and the Data Governance Committee Tim joined Sainsburyrsquos from Exelplc the global logistics company now part of DHL where he was Company Secretary and General Counsel He began his career at the international law firm Clifford Chance and is a qualified solicitor Tim is Chairman of the Disability Confident Business Leaders Group which works with Government in shaping the disability employment agenda and in raising awareness of the benefits of employing disabled people
Jim BrownCEO of Sainsburyrsquos Bank
Skills and experienceJim joined Sainsburyrsquos Bank as CEO in June 2019 and is also a member of the Sainsburyrsquos Group Operating Board He has held a number of senior international Financial Services roles - most recently for RBS in the UK as CEO of Williams and Glyn and prior to that CEO of Ulster Bank in Northern Ireland and the Republic of Ireland Before moving to Ireland he was based in Hong Kong and was CEO Retail and Commercial Banking Asia and the Middle East for RBS and ABN AMRO He has also been a member of the RBS Group Management Committee ABN AMRO Executive Group ABN AMRO Global Consumer Leadership Team and the RBSBank of China Joint Steering Committee Earlier in his career he held a number of senior executive roles for Citibank in Asia and Australia and New Zealand Jim has also held various Board positions including at Ulster Bank Saudi Hollandi Bank The Royal Bank of Scotland (China) Co Ltd and RBS (Pakistan) Ltd He is also a past President of the Institute of Banking in Ireland He is currently a Certified Bank Director
Date of appointment August 2019
Paul Mills-HicksFood Commercial Director
Skills and experiencePaul joined the Operating Board in May 2014 as Food Commercial Director having spent over ten years at Sainsburyrsquos He was closely involved in the formation and execution of the lsquoMaking Sainsburyrsquos Great Againrsquo strategy Following this he held a variety of roles in commercial strategy and finance most recently as Business Unit Director for Grocery Prior to Sainsburyrsquos Paul was European Controller at Marks and Spencer Group PLC and a Director at UBS Warburg
Date of appointment May 2014
13
APPENDIX Interim Results 201920 - November 2019
Operating Board
Angie RisleyGroup HR Director
Skills and experienceAngie was appointed Group HR Director and a member of the Operating Board in January 2013 with responsibility for human resources Angie is also a Director of Sainsburyrsquos Bank plc Angie was most recently Non-Executive Director and Chairman of the Remuneration Committee of Serco plc and prior to this was Group HR Director of Lloyds Banking Group and an Executive Director of Whitbread PLC with responsibility for HR and Corporate Social Responsibility Angie is currently Non-Executive Director and Chair of the Remuneration Committee at Smith amp Nephew plc
Date of appointment January 2013
Phil JordanGroup Chief Information Officer
Skills and experiencePhil joined the Board in January 2018 and has brought a fresh globalperspective on technology to the Operating Board in addition to a wealth of experience in digital data and business transformation Prior to joining Sainsburyrsquos Phil had a long and successful track record in telecommunications Most recently he was Global Chief Information Officer at Telefonica overseeing Digital Transformation and Information Technology and prior to that was Chief Information Officer for Vodafone UKIreland Phil has worked as a Non-Executive Advisor on Technology in the Investment amp Retail Banking sector and is currently a Non-Executive Director of TalkTalk Telecom Group PLC and chairs its Cyber-Security Committee
Date of appointment January 2018
Simon RobertsRetail and Operations Director
Skills and experienceSimon joined Sainsburyrsquos and the Operating Board in July 2017 as Central Retail amp Operations Director responsible for Stores Central operation and Logistics In his previous role he was Executive Vice President of Walgreens Boots Alliance and President of Boots with responsibility for commercial and retail operations across the UK and Ireland Prior to Boots Simon was at Marks and Spencer Group PLC where he held operational and customer leadership roles across stores divisions and central operations Simon is also the Non-Executive Chairman at the Institute ofCustomer Service
Date of appointment July 2017
Clodagh MoriartyGroup Chief Digital Officer
Skills and experienceClodagh was appointed Group Chief Digital Officer in June 2018 Clodagh leads the delivery of a consistent and first-rate digital experience for customers across Sainsburyrsquos Argos and Sainsburyrsquos BankClodagh joined Sainsburyrsquos in 2010 from Bain amp Co management consultants where she had gained experience working on a broad range of projects across multiple sectors and countries Following two years as Head of Strategy at Sainsburyrsquosshe moved into Food Commercial as Category Manager for Meal Solutions and then became Head of Online Trading spanning Food General Merchandise and Clothing before being promoted to Director of Online in 2016 In this role Clodagh was instrumental in driving innovation within Groceries Online and launching new initiatives including SmartShop and Chop Chop
Date of appointment June 2018
14
APPENDIX Interim Results 201920 - November 2019
Supplementary financial details
3 Financial calendarQ3 trading statement(15 weeks to 4 January 2020)
Preliminary results(52 weeks to 7 March 2020)
8 January 2020
30 April 2020
1 Weighted average number of shares
The interim dividend datesOrdinary shares
Ex-dividend 14 November 2019Record 15 November 2019Payment 20 December 2019
Product Quality Framework helps us fund investment
PQF cereals case study
BAU savings to offset cost inflation
Strategic cost transformation 5 year plan
Slide Number 43
Financial Services Priorities
Financial Services reshaping the portfolio
Financial Services key targets
Nectar
Slide Number 48
Digital
We will help our customers live well for less
Slide Number 51
Slide Number 52
Guidance for 201920
Retail sales
Sainsburyrsquos sales area and store numbers
Sainsburyrsquos store estate
Sainsburyrsquos investment programme
Retail margin
Group retail
Plc Board
Plc Board
Plc Board
Plc Board
Operating Board
Operating Board
Operating Board
Supplementary financial details
Contacts
APPENDIX Interim Results 201920 - November 2019
Sainsburyrsquos store estateAs at 21 September 2019
Sq ftsales area
82446
870
40001 to60000
20001 to40000
10000 to20000
Under10000 Total
Over60000
0122122
0197197
0175175
06767
824607
1431
Argos storesArgos in SainsburyrsquosArgos in HomebaseOtherArgos total store numbers
Habitat1
Collection points
594281
8-
883
16317
As at21 Sept 2019
Disposalsclosures
Newstores
As at9 March 2019
17--8
-1
(7)-
(2)-
(9)
-(36)
588288
6-
88216
282
ConvenienceSupermarketsTotal stores
Number of stores
Sq ftsales area
1929350
2279
40001 to60000
20001 to40000
10000 to20000
Under10000 Total
Over60000
-18441844
-58185818
-85018501
-46604660
19292117323102
ConvenienceSupermarketsTotal stores
Space by store size (lsquo000 sq ft)
Argos and Habitat store numbers
1 5 Habitat stores 11 Habitat stores in Sainsburys
4
APPENDIX Interim Results 201920 - November 2019
ClosureBitterne West
Sainsburyrsquos investment programme201920
Q1
Supermarkets ConvenienceNew storesMilton Keynes Brooklands District CentBromley High StLeeds Wike Ridge LaneSalford Harbour CityCanterbury High St
ReplacementMayfair Stratton St
ClosuresMayfairWarren St
Q1Q1Q1Q2Q2
Q2
Q1Q2
5
APPENDIX Interim Results 201920 - November 2019
Retail margin
Retail sales (inc VAT inc fuel)(exc VAT inc fuel)
Retail underlying EBITDAR1
Retail underlying EBITDAR margin 2
at constant fuel pricesRetail underlying operating profit3
Retail underlying operating margin 4
at constant fuel prices
1656714808
10677272
4373030
1661214856
11147575
4873333
030342
30 bps28 bps10333 bps32 bps
1 Retail underlying operating profit before net rental income of pound6 million and underlying depreciation and amortisation of pound636 million2 Retail underlying EBITDAR divided by underlying retail sales excluding VAT3 Retail underlying earnings before interest tax and Sainsburyrsquos underlying share of post-tax profit from joint ventures4 Retail underlying operating profit divided by underlying retail sales excluding VAT
poundm H1201920
H1201819
Change
6
APPENDIX Interim Results 201920 - November 2019
H1201920
H1201819
Group retail
Return on capital employed 1
Net debt to EBITDAR (times)23
Fixed charge cover (times)2
Underlying tax rate Core retail capex sales5
713126
26515
743326
25715
poundm
1 ROCE Return is defined as a 52 week rolling underlying profit before interest and tax Capital employed is defined as group net assets2 Net debt of pound6778 million includes lease obligations under IFRS 16 and perpetual securities treated as debt divided by Group underlying EBITDAR of pound2171 million calculated for a 52-week period to 21 September 20193 Group underlying EBITDAR divided by rent (both capital and interest) and net finance costs where interest on perpetual securities is treated as an underlying finance costs4 52 weeks to 22nd September 2018 is not available due to the implementation of IFRS 16 Comparatives therefore reflect the 52 weeks to 9th March 20195 Includes retail sales inc vat inc fuel
4
4
7
APPENDIX Interim Results 201920 - November 2019
Plc Board
Kevin OrsquoByrneChief Financial Officer
Mike Coupe Group Chief Executive
Dame Susan Rice Senior Independent Director
Matt BrittinNon-Executive Director
Jo HarlowNon-Executive Director
Brian CassinNon-Executive Director
David KeensNon-Executive Director
Jean Tomlin Non-Executive Director
Martin Scicluna Chairman
8
APPENDIX Interim Results 201920 - November 2019
Plc Board
Mike Coupe Group Chief Executive Officer
Skills and experienceAppointed Group Chief Executive Officer on 9 July 2014 Mike has been a member of the Operating Board since October 2004 Mike has vast retail industry experience in trading strategy marketing digital and online as well as multi-site store experience He joined Sainsburyrsquos from Big Food Group where he was a board director of Big Food Group PLC and Managing Director of Iceland Food Stores He previously worked for both Asda and Tesco PLC where he served in a variety of senior management roles
Date of appointment 1 August 2007Mike has served as an Executive Director since 1 August 2007 and as Chief Executive Officer since 9 July 2014
Committee membershipCorporate Responsibility and Sustainability Committee
Kevin OrsquoByrne Chief Financial Officer
Skills and experienceKevin brings to the Board a wealth of retail and finance experience Kevin was previously Chief Executive Officer of Poundland Group Limited until December 2016 and held executive roles at Kingfisher plc from 2008 to 2015 including Divisional Director UK China and Turkey Chief Executive Officer of BampQ UK amp Ireland and Group Finance Director He was previously Group Finance Director of Dixons Retail plc and European Finance Director of Quaker Oats He was a Non-Executive Director of Land Securities Group PLC from 2008 to September 2017 where he was Chairman of the Audit Committee and Senior Independent Director
Date of appointment 9 January 2017
Other current rolesNon-Executive Director of Greene King plc
Skills and experienceMartin brings a breadth of experience and leadership in both executive and non-executive roles His previous roles include positions as the Chairman of Great Portland Estates plc Senior Independent Director and Chair of the Audit Committee of Worldpay Inc and Non-Executive Director and Chair of the Audit Committee of Lloyds Banking Group plc He was a partner at Deloitte LLP for 26 years serving as Chairman from 1995 to 2007 where his clients included Dixons WH Smith Alliance Unichem and Cadburyrsquos
Other current rolesChairman of RSA Insurance Group plc
Martin Scicluna Chairman
Date of appointment 1 November 2018 Martin joined the Board as Chairman Designate and Non-Executive Director on 1 November 2018 He was appointed as Chairman of the Board on 10 March 2019
Committee membershipChair of the Nomination Committee
Dame Susan Rice Senior Independent Director
Skills and experienceSusan has extensive experience as a Non-Executive Director as well as in retail banking financial services leadership and sustainability Her career in retail bankingis particularly relevant to our ownership ofSainsburyrsquos Bank Previously Susan was a member of the First Ministerrsquos Council of Economic Advisors Managing Director of Lloyds Banking Group Scotland and was previously Chief Executive and then Chairman of Lloyds TSB Scotland plc She has also held a range of other non-executive directorships including at the Bank of England and SSE plc
Committee membershipChair of the Remuneration Committee and a member of the Nomination Committee
Date of appointment 1 June 2013
Other current rolesChair of Scottish Water and Business Stream Chair of the Scottish Fiscal Commission Non-Executive Director of the North American Income Trust C Hoare and Co and Senior Independent Director of the North American Income Trust
9
Other current rolesNon-Executive Director and Chairman of the Audit Committee of Centrica plc
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jean Tomlin Non-Executive Director
Skills and experienceJean has extensive experience and breadth of skills in human resources and corporate responsibility Jean was formerly Director of HR Workforce and Accreditation for The London OrganisingCommittee of the Olympic and Paralympic Games where she set the strategic direction to ensure the mobilisation of the combined 200000-strong workforce including paid staff volunteers and contractors which represented the recruitment and mobilisation of the largest peacetime workforce and set the industry standard for volunteering with the highly acclaimed Games She was previously Group HR Director at Marks and Spencer Group Plc HR Director and founder member of Egg plc and Sales amp Operations Director of Prudential Direct
Date of appointment 1 January 2013
Committee membershipAudit Committee Corporate Responsibility and Sustainability Committee and Nomination Committee
David Keens Non-Executive Director
Skills and experienceDavid has extensive retail experience and knowledge of consumer facing businesses together with his core skills in finance David was formerly Group Finance Director of next plc from 1991 to 2015 and their Group Treasurer from 1986 to 1991 Previous management experience includes nine years in the UK and overseas operations of multinational food manufacturer Nabisco and prior to that seven years in the accountancy profession
Date of appointment 29 April 2015
Committee membershipChair of the Audit Committee and a member of the Nomination Committee
Other current rolesIndependent Board member of Capri Holdings Limited Non-Executive Director of Hakluyt and Chief Executive Officer of Chanzo Limited
Other current rolesNon-Executive Director Senior Independent Director and Chair of the Audit Committee of Auto Trader Group plc
Matt BrittinNon-Executive Director
Skills and experienceMatt has extensive experience of running a high profile fast moving innovative digital business Since 2015 he has been responsible for Googlersquos business and operations in Europe the Middle East and Africa and hersquos been in leadership roles at Google since 2007 Prior to that Matt spent much of his career in media and marketing with particular interests in strategy commercial development and sales performance This included commercial and digital leadership roles in UK media
Date of appointment 27 January 2011
Committee membershipNomination Committee and Remuneration Committee
Other current rolesGooglersquos President ndash Europe Middle East and Africa and Director of The Media Trust
Brian Cassin Non-Executive Director
Skills and experienceBrian brings present day experience of running a FTSE40 group and of big data and analytics ndash topics of key importance to Sainsburyrsquos Brian joined Experian plc as Chief Financial Officer in April 2012 a post he held until his appointment as Chief Executive Officer in July 2014 Prior to this Brian spent his career in investment banking at Greenhill amp Co where he was Managing Director and Partner Brian has also held various roles at Baring Brothers International and at the London Stock Exchange
Date of appointment 1 April 2016
Committee membershipAudit Committee and Nomination Committee
Other current rolesChief Executive Officer of Experian plc
10
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jo Harlow Non-Executive Director
Skills and experienceJo brings a wealth of experience in consumer-facing businesses and in the telecoms and technology industry bothin the UK and internationally Jo spent 12 years in a variety of senior management roles with Nokia and Microsoft Prior to this she spent eight years at PampG and 11 years at Reebok in senior sales and marketing positions in both Europe and the US
Date of appointment 11 September 2017
Committee membershipChair of the Corporate Responsibility and Sustainability Committee and member of the Nomination Committee and Remuneration Committee
Life PresidentLord Sainsbury of Preston Candover KG
Other current rolesNon-Executive Director of InterContinental Hotels plc Non-Executive Director of Halmaplc and Member of the Supervisory Board of Ceconomy AG
11
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief Executive
Tim FallowfieldCompany Secretary amp Corporate Services Director
Kevin OrsquoByrne Chief Financial Officer
Jim BrownChief Executive Officer of Sainsburyrsquos Bank
Paul Mills-HicksFood Commercial Director
Angie RisleyGroup HR Director
Phil JordanGroup Chief InformationOfficer
Simon RobertsRetail and Operations Director
Clo MoriartyGroup Chief Digital Officer
12
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief ExecutiveSee Appendix page 9
Kevin OrsquoByrneChief Financial OfficerSee Appendix page 9
Tim FallowfieldCompany Secretary amp Corporate Services Director
Date of appointment September 2004
Skills and experienceTim joined Sainsburyrsquos in 2001 as Company Secretary and joined the Operating Board in September 2004 In addition to his role as Company Secretary Tim is responsible for the Corporate Services Division comprising Legal Services Data Governance Safety Shareholder Services Insurance and Central Security He chairs the Group Safety Committee and the Data Governance Committee Tim joined Sainsburyrsquos from Exelplc the global logistics company now part of DHL where he was Company Secretary and General Counsel He began his career at the international law firm Clifford Chance and is a qualified solicitor Tim is Chairman of the Disability Confident Business Leaders Group which works with Government in shaping the disability employment agenda and in raising awareness of the benefits of employing disabled people
Jim BrownCEO of Sainsburyrsquos Bank
Skills and experienceJim joined Sainsburyrsquos Bank as CEO in June 2019 and is also a member of the Sainsburyrsquos Group Operating Board He has held a number of senior international Financial Services roles - most recently for RBS in the UK as CEO of Williams and Glyn and prior to that CEO of Ulster Bank in Northern Ireland and the Republic of Ireland Before moving to Ireland he was based in Hong Kong and was CEO Retail and Commercial Banking Asia and the Middle East for RBS and ABN AMRO He has also been a member of the RBS Group Management Committee ABN AMRO Executive Group ABN AMRO Global Consumer Leadership Team and the RBSBank of China Joint Steering Committee Earlier in his career he held a number of senior executive roles for Citibank in Asia and Australia and New Zealand Jim has also held various Board positions including at Ulster Bank Saudi Hollandi Bank The Royal Bank of Scotland (China) Co Ltd and RBS (Pakistan) Ltd He is also a past President of the Institute of Banking in Ireland He is currently a Certified Bank Director
Date of appointment August 2019
Paul Mills-HicksFood Commercial Director
Skills and experiencePaul joined the Operating Board in May 2014 as Food Commercial Director having spent over ten years at Sainsburyrsquos He was closely involved in the formation and execution of the lsquoMaking Sainsburyrsquos Great Againrsquo strategy Following this he held a variety of roles in commercial strategy and finance most recently as Business Unit Director for Grocery Prior to Sainsburyrsquos Paul was European Controller at Marks and Spencer Group PLC and a Director at UBS Warburg
Date of appointment May 2014
13
APPENDIX Interim Results 201920 - November 2019
Operating Board
Angie RisleyGroup HR Director
Skills and experienceAngie was appointed Group HR Director and a member of the Operating Board in January 2013 with responsibility for human resources Angie is also a Director of Sainsburyrsquos Bank plc Angie was most recently Non-Executive Director and Chairman of the Remuneration Committee of Serco plc and prior to this was Group HR Director of Lloyds Banking Group and an Executive Director of Whitbread PLC with responsibility for HR and Corporate Social Responsibility Angie is currently Non-Executive Director and Chair of the Remuneration Committee at Smith amp Nephew plc
Date of appointment January 2013
Phil JordanGroup Chief Information Officer
Skills and experiencePhil joined the Board in January 2018 and has brought a fresh globalperspective on technology to the Operating Board in addition to a wealth of experience in digital data and business transformation Prior to joining Sainsburyrsquos Phil had a long and successful track record in telecommunications Most recently he was Global Chief Information Officer at Telefonica overseeing Digital Transformation and Information Technology and prior to that was Chief Information Officer for Vodafone UKIreland Phil has worked as a Non-Executive Advisor on Technology in the Investment amp Retail Banking sector and is currently a Non-Executive Director of TalkTalk Telecom Group PLC and chairs its Cyber-Security Committee
Date of appointment January 2018
Simon RobertsRetail and Operations Director
Skills and experienceSimon joined Sainsburyrsquos and the Operating Board in July 2017 as Central Retail amp Operations Director responsible for Stores Central operation and Logistics In his previous role he was Executive Vice President of Walgreens Boots Alliance and President of Boots with responsibility for commercial and retail operations across the UK and Ireland Prior to Boots Simon was at Marks and Spencer Group PLC where he held operational and customer leadership roles across stores divisions and central operations Simon is also the Non-Executive Chairman at the Institute ofCustomer Service
Date of appointment July 2017
Clodagh MoriartyGroup Chief Digital Officer
Skills and experienceClodagh was appointed Group Chief Digital Officer in June 2018 Clodagh leads the delivery of a consistent and first-rate digital experience for customers across Sainsburyrsquos Argos and Sainsburyrsquos BankClodagh joined Sainsburyrsquos in 2010 from Bain amp Co management consultants where she had gained experience working on a broad range of projects across multiple sectors and countries Following two years as Head of Strategy at Sainsburyrsquosshe moved into Food Commercial as Category Manager for Meal Solutions and then became Head of Online Trading spanning Food General Merchandise and Clothing before being promoted to Director of Online in 2016 In this role Clodagh was instrumental in driving innovation within Groceries Online and launching new initiatives including SmartShop and Chop Chop
Date of appointment June 2018
14
APPENDIX Interim Results 201920 - November 2019
Supplementary financial details
3 Financial calendarQ3 trading statement(15 weeks to 4 January 2020)
Preliminary results(52 weeks to 7 March 2020)
8 January 2020
30 April 2020
1 Weighted average number of shares
The interim dividend datesOrdinary shares
Ex-dividend 14 November 2019Record 15 November 2019Payment 20 December 2019
Product Quality Framework helps us fund investment
PQF cereals case study
BAU savings to offset cost inflation
Strategic cost transformation 5 year plan
Slide Number 43
Financial Services Priorities
Financial Services reshaping the portfolio
Financial Services key targets
Nectar
Slide Number 48
Digital
We will help our customers live well for less
Slide Number 51
Slide Number 52
Guidance for 201920
Retail sales
Sainsburyrsquos sales area and store numbers
Sainsburyrsquos store estate
Sainsburyrsquos investment programme
Retail margin
Group retail
Plc Board
Plc Board
Plc Board
Plc Board
Operating Board
Operating Board
Operating Board
Supplementary financial details
Contacts
APPENDIX Interim Results 201920 - November 2019
ClosureBitterne West
Sainsburyrsquos investment programme201920
Q1
Supermarkets ConvenienceNew storesMilton Keynes Brooklands District CentBromley High StLeeds Wike Ridge LaneSalford Harbour CityCanterbury High St
ReplacementMayfair Stratton St
ClosuresMayfairWarren St
Q1Q1Q1Q2Q2
Q2
Q1Q2
5
APPENDIX Interim Results 201920 - November 2019
Retail margin
Retail sales (inc VAT inc fuel)(exc VAT inc fuel)
Retail underlying EBITDAR1
Retail underlying EBITDAR margin 2
at constant fuel pricesRetail underlying operating profit3
Retail underlying operating margin 4
at constant fuel prices
1656714808
10677272
4373030
1661214856
11147575
4873333
030342
30 bps28 bps10333 bps32 bps
1 Retail underlying operating profit before net rental income of pound6 million and underlying depreciation and amortisation of pound636 million2 Retail underlying EBITDAR divided by underlying retail sales excluding VAT3 Retail underlying earnings before interest tax and Sainsburyrsquos underlying share of post-tax profit from joint ventures4 Retail underlying operating profit divided by underlying retail sales excluding VAT
poundm H1201920
H1201819
Change
6
APPENDIX Interim Results 201920 - November 2019
H1201920
H1201819
Group retail
Return on capital employed 1
Net debt to EBITDAR (times)23
Fixed charge cover (times)2
Underlying tax rate Core retail capex sales5
713126
26515
743326
25715
poundm
1 ROCE Return is defined as a 52 week rolling underlying profit before interest and tax Capital employed is defined as group net assets2 Net debt of pound6778 million includes lease obligations under IFRS 16 and perpetual securities treated as debt divided by Group underlying EBITDAR of pound2171 million calculated for a 52-week period to 21 September 20193 Group underlying EBITDAR divided by rent (both capital and interest) and net finance costs where interest on perpetual securities is treated as an underlying finance costs4 52 weeks to 22nd September 2018 is not available due to the implementation of IFRS 16 Comparatives therefore reflect the 52 weeks to 9th March 20195 Includes retail sales inc vat inc fuel
4
4
7
APPENDIX Interim Results 201920 - November 2019
Plc Board
Kevin OrsquoByrneChief Financial Officer
Mike Coupe Group Chief Executive
Dame Susan Rice Senior Independent Director
Matt BrittinNon-Executive Director
Jo HarlowNon-Executive Director
Brian CassinNon-Executive Director
David KeensNon-Executive Director
Jean Tomlin Non-Executive Director
Martin Scicluna Chairman
8
APPENDIX Interim Results 201920 - November 2019
Plc Board
Mike Coupe Group Chief Executive Officer
Skills and experienceAppointed Group Chief Executive Officer on 9 July 2014 Mike has been a member of the Operating Board since October 2004 Mike has vast retail industry experience in trading strategy marketing digital and online as well as multi-site store experience He joined Sainsburyrsquos from Big Food Group where he was a board director of Big Food Group PLC and Managing Director of Iceland Food Stores He previously worked for both Asda and Tesco PLC where he served in a variety of senior management roles
Date of appointment 1 August 2007Mike has served as an Executive Director since 1 August 2007 and as Chief Executive Officer since 9 July 2014
Committee membershipCorporate Responsibility and Sustainability Committee
Kevin OrsquoByrne Chief Financial Officer
Skills and experienceKevin brings to the Board a wealth of retail and finance experience Kevin was previously Chief Executive Officer of Poundland Group Limited until December 2016 and held executive roles at Kingfisher plc from 2008 to 2015 including Divisional Director UK China and Turkey Chief Executive Officer of BampQ UK amp Ireland and Group Finance Director He was previously Group Finance Director of Dixons Retail plc and European Finance Director of Quaker Oats He was a Non-Executive Director of Land Securities Group PLC from 2008 to September 2017 where he was Chairman of the Audit Committee and Senior Independent Director
Date of appointment 9 January 2017
Other current rolesNon-Executive Director of Greene King plc
Skills and experienceMartin brings a breadth of experience and leadership in both executive and non-executive roles His previous roles include positions as the Chairman of Great Portland Estates plc Senior Independent Director and Chair of the Audit Committee of Worldpay Inc and Non-Executive Director and Chair of the Audit Committee of Lloyds Banking Group plc He was a partner at Deloitte LLP for 26 years serving as Chairman from 1995 to 2007 where his clients included Dixons WH Smith Alliance Unichem and Cadburyrsquos
Other current rolesChairman of RSA Insurance Group plc
Martin Scicluna Chairman
Date of appointment 1 November 2018 Martin joined the Board as Chairman Designate and Non-Executive Director on 1 November 2018 He was appointed as Chairman of the Board on 10 March 2019
Committee membershipChair of the Nomination Committee
Dame Susan Rice Senior Independent Director
Skills and experienceSusan has extensive experience as a Non-Executive Director as well as in retail banking financial services leadership and sustainability Her career in retail bankingis particularly relevant to our ownership ofSainsburyrsquos Bank Previously Susan was a member of the First Ministerrsquos Council of Economic Advisors Managing Director of Lloyds Banking Group Scotland and was previously Chief Executive and then Chairman of Lloyds TSB Scotland plc She has also held a range of other non-executive directorships including at the Bank of England and SSE plc
Committee membershipChair of the Remuneration Committee and a member of the Nomination Committee
Date of appointment 1 June 2013
Other current rolesChair of Scottish Water and Business Stream Chair of the Scottish Fiscal Commission Non-Executive Director of the North American Income Trust C Hoare and Co and Senior Independent Director of the North American Income Trust
9
Other current rolesNon-Executive Director and Chairman of the Audit Committee of Centrica plc
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jean Tomlin Non-Executive Director
Skills and experienceJean has extensive experience and breadth of skills in human resources and corporate responsibility Jean was formerly Director of HR Workforce and Accreditation for The London OrganisingCommittee of the Olympic and Paralympic Games where she set the strategic direction to ensure the mobilisation of the combined 200000-strong workforce including paid staff volunteers and contractors which represented the recruitment and mobilisation of the largest peacetime workforce and set the industry standard for volunteering with the highly acclaimed Games She was previously Group HR Director at Marks and Spencer Group Plc HR Director and founder member of Egg plc and Sales amp Operations Director of Prudential Direct
Date of appointment 1 January 2013
Committee membershipAudit Committee Corporate Responsibility and Sustainability Committee and Nomination Committee
David Keens Non-Executive Director
Skills and experienceDavid has extensive retail experience and knowledge of consumer facing businesses together with his core skills in finance David was formerly Group Finance Director of next plc from 1991 to 2015 and their Group Treasurer from 1986 to 1991 Previous management experience includes nine years in the UK and overseas operations of multinational food manufacturer Nabisco and prior to that seven years in the accountancy profession
Date of appointment 29 April 2015
Committee membershipChair of the Audit Committee and a member of the Nomination Committee
Other current rolesIndependent Board member of Capri Holdings Limited Non-Executive Director of Hakluyt and Chief Executive Officer of Chanzo Limited
Other current rolesNon-Executive Director Senior Independent Director and Chair of the Audit Committee of Auto Trader Group plc
Matt BrittinNon-Executive Director
Skills and experienceMatt has extensive experience of running a high profile fast moving innovative digital business Since 2015 he has been responsible for Googlersquos business and operations in Europe the Middle East and Africa and hersquos been in leadership roles at Google since 2007 Prior to that Matt spent much of his career in media and marketing with particular interests in strategy commercial development and sales performance This included commercial and digital leadership roles in UK media
Date of appointment 27 January 2011
Committee membershipNomination Committee and Remuneration Committee
Other current rolesGooglersquos President ndash Europe Middle East and Africa and Director of The Media Trust
Brian Cassin Non-Executive Director
Skills and experienceBrian brings present day experience of running a FTSE40 group and of big data and analytics ndash topics of key importance to Sainsburyrsquos Brian joined Experian plc as Chief Financial Officer in April 2012 a post he held until his appointment as Chief Executive Officer in July 2014 Prior to this Brian spent his career in investment banking at Greenhill amp Co where he was Managing Director and Partner Brian has also held various roles at Baring Brothers International and at the London Stock Exchange
Date of appointment 1 April 2016
Committee membershipAudit Committee and Nomination Committee
Other current rolesChief Executive Officer of Experian plc
10
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jo Harlow Non-Executive Director
Skills and experienceJo brings a wealth of experience in consumer-facing businesses and in the telecoms and technology industry bothin the UK and internationally Jo spent 12 years in a variety of senior management roles with Nokia and Microsoft Prior to this she spent eight years at PampG and 11 years at Reebok in senior sales and marketing positions in both Europe and the US
Date of appointment 11 September 2017
Committee membershipChair of the Corporate Responsibility and Sustainability Committee and member of the Nomination Committee and Remuneration Committee
Life PresidentLord Sainsbury of Preston Candover KG
Other current rolesNon-Executive Director of InterContinental Hotels plc Non-Executive Director of Halmaplc and Member of the Supervisory Board of Ceconomy AG
11
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief Executive
Tim FallowfieldCompany Secretary amp Corporate Services Director
Kevin OrsquoByrne Chief Financial Officer
Jim BrownChief Executive Officer of Sainsburyrsquos Bank
Paul Mills-HicksFood Commercial Director
Angie RisleyGroup HR Director
Phil JordanGroup Chief InformationOfficer
Simon RobertsRetail and Operations Director
Clo MoriartyGroup Chief Digital Officer
12
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief ExecutiveSee Appendix page 9
Kevin OrsquoByrneChief Financial OfficerSee Appendix page 9
Tim FallowfieldCompany Secretary amp Corporate Services Director
Date of appointment September 2004
Skills and experienceTim joined Sainsburyrsquos in 2001 as Company Secretary and joined the Operating Board in September 2004 In addition to his role as Company Secretary Tim is responsible for the Corporate Services Division comprising Legal Services Data Governance Safety Shareholder Services Insurance and Central Security He chairs the Group Safety Committee and the Data Governance Committee Tim joined Sainsburyrsquos from Exelplc the global logistics company now part of DHL where he was Company Secretary and General Counsel He began his career at the international law firm Clifford Chance and is a qualified solicitor Tim is Chairman of the Disability Confident Business Leaders Group which works with Government in shaping the disability employment agenda and in raising awareness of the benefits of employing disabled people
Jim BrownCEO of Sainsburyrsquos Bank
Skills and experienceJim joined Sainsburyrsquos Bank as CEO in June 2019 and is also a member of the Sainsburyrsquos Group Operating Board He has held a number of senior international Financial Services roles - most recently for RBS in the UK as CEO of Williams and Glyn and prior to that CEO of Ulster Bank in Northern Ireland and the Republic of Ireland Before moving to Ireland he was based in Hong Kong and was CEO Retail and Commercial Banking Asia and the Middle East for RBS and ABN AMRO He has also been a member of the RBS Group Management Committee ABN AMRO Executive Group ABN AMRO Global Consumer Leadership Team and the RBSBank of China Joint Steering Committee Earlier in his career he held a number of senior executive roles for Citibank in Asia and Australia and New Zealand Jim has also held various Board positions including at Ulster Bank Saudi Hollandi Bank The Royal Bank of Scotland (China) Co Ltd and RBS (Pakistan) Ltd He is also a past President of the Institute of Banking in Ireland He is currently a Certified Bank Director
Date of appointment August 2019
Paul Mills-HicksFood Commercial Director
Skills and experiencePaul joined the Operating Board in May 2014 as Food Commercial Director having spent over ten years at Sainsburyrsquos He was closely involved in the formation and execution of the lsquoMaking Sainsburyrsquos Great Againrsquo strategy Following this he held a variety of roles in commercial strategy and finance most recently as Business Unit Director for Grocery Prior to Sainsburyrsquos Paul was European Controller at Marks and Spencer Group PLC and a Director at UBS Warburg
Date of appointment May 2014
13
APPENDIX Interim Results 201920 - November 2019
Operating Board
Angie RisleyGroup HR Director
Skills and experienceAngie was appointed Group HR Director and a member of the Operating Board in January 2013 with responsibility for human resources Angie is also a Director of Sainsburyrsquos Bank plc Angie was most recently Non-Executive Director and Chairman of the Remuneration Committee of Serco plc and prior to this was Group HR Director of Lloyds Banking Group and an Executive Director of Whitbread PLC with responsibility for HR and Corporate Social Responsibility Angie is currently Non-Executive Director and Chair of the Remuneration Committee at Smith amp Nephew plc
Date of appointment January 2013
Phil JordanGroup Chief Information Officer
Skills and experiencePhil joined the Board in January 2018 and has brought a fresh globalperspective on technology to the Operating Board in addition to a wealth of experience in digital data and business transformation Prior to joining Sainsburyrsquos Phil had a long and successful track record in telecommunications Most recently he was Global Chief Information Officer at Telefonica overseeing Digital Transformation and Information Technology and prior to that was Chief Information Officer for Vodafone UKIreland Phil has worked as a Non-Executive Advisor on Technology in the Investment amp Retail Banking sector and is currently a Non-Executive Director of TalkTalk Telecom Group PLC and chairs its Cyber-Security Committee
Date of appointment January 2018
Simon RobertsRetail and Operations Director
Skills and experienceSimon joined Sainsburyrsquos and the Operating Board in July 2017 as Central Retail amp Operations Director responsible for Stores Central operation and Logistics In his previous role he was Executive Vice President of Walgreens Boots Alliance and President of Boots with responsibility for commercial and retail operations across the UK and Ireland Prior to Boots Simon was at Marks and Spencer Group PLC where he held operational and customer leadership roles across stores divisions and central operations Simon is also the Non-Executive Chairman at the Institute ofCustomer Service
Date of appointment July 2017
Clodagh MoriartyGroup Chief Digital Officer
Skills and experienceClodagh was appointed Group Chief Digital Officer in June 2018 Clodagh leads the delivery of a consistent and first-rate digital experience for customers across Sainsburyrsquos Argos and Sainsburyrsquos BankClodagh joined Sainsburyrsquos in 2010 from Bain amp Co management consultants where she had gained experience working on a broad range of projects across multiple sectors and countries Following two years as Head of Strategy at Sainsburyrsquosshe moved into Food Commercial as Category Manager for Meal Solutions and then became Head of Online Trading spanning Food General Merchandise and Clothing before being promoted to Director of Online in 2016 In this role Clodagh was instrumental in driving innovation within Groceries Online and launching new initiatives including SmartShop and Chop Chop
Date of appointment June 2018
14
APPENDIX Interim Results 201920 - November 2019
Supplementary financial details
3 Financial calendarQ3 trading statement(15 weeks to 4 January 2020)
Preliminary results(52 weeks to 7 March 2020)
8 January 2020
30 April 2020
1 Weighted average number of shares
The interim dividend datesOrdinary shares
Ex-dividend 14 November 2019Record 15 November 2019Payment 20 December 2019
Product Quality Framework helps us fund investment
PQF cereals case study
BAU savings to offset cost inflation
Strategic cost transformation 5 year plan
Slide Number 43
Financial Services Priorities
Financial Services reshaping the portfolio
Financial Services key targets
Nectar
Slide Number 48
Digital
We will help our customers live well for less
Slide Number 51
Slide Number 52
Guidance for 201920
Retail sales
Sainsburyrsquos sales area and store numbers
Sainsburyrsquos store estate
Sainsburyrsquos investment programme
Retail margin
Group retail
Plc Board
Plc Board
Plc Board
Plc Board
Operating Board
Operating Board
Operating Board
Supplementary financial details
Contacts
APPENDIX Interim Results 201920 - November 2019
Retail margin
Retail sales (inc VAT inc fuel)(exc VAT inc fuel)
Retail underlying EBITDAR1
Retail underlying EBITDAR margin 2
at constant fuel pricesRetail underlying operating profit3
Retail underlying operating margin 4
at constant fuel prices
1656714808
10677272
4373030
1661214856
11147575
4873333
030342
30 bps28 bps10333 bps32 bps
1 Retail underlying operating profit before net rental income of pound6 million and underlying depreciation and amortisation of pound636 million2 Retail underlying EBITDAR divided by underlying retail sales excluding VAT3 Retail underlying earnings before interest tax and Sainsburyrsquos underlying share of post-tax profit from joint ventures4 Retail underlying operating profit divided by underlying retail sales excluding VAT
poundm H1201920
H1201819
Change
6
APPENDIX Interim Results 201920 - November 2019
H1201920
H1201819
Group retail
Return on capital employed 1
Net debt to EBITDAR (times)23
Fixed charge cover (times)2
Underlying tax rate Core retail capex sales5
713126
26515
743326
25715
poundm
1 ROCE Return is defined as a 52 week rolling underlying profit before interest and tax Capital employed is defined as group net assets2 Net debt of pound6778 million includes lease obligations under IFRS 16 and perpetual securities treated as debt divided by Group underlying EBITDAR of pound2171 million calculated for a 52-week period to 21 September 20193 Group underlying EBITDAR divided by rent (both capital and interest) and net finance costs where interest on perpetual securities is treated as an underlying finance costs4 52 weeks to 22nd September 2018 is not available due to the implementation of IFRS 16 Comparatives therefore reflect the 52 weeks to 9th March 20195 Includes retail sales inc vat inc fuel
4
4
7
APPENDIX Interim Results 201920 - November 2019
Plc Board
Kevin OrsquoByrneChief Financial Officer
Mike Coupe Group Chief Executive
Dame Susan Rice Senior Independent Director
Matt BrittinNon-Executive Director
Jo HarlowNon-Executive Director
Brian CassinNon-Executive Director
David KeensNon-Executive Director
Jean Tomlin Non-Executive Director
Martin Scicluna Chairman
8
APPENDIX Interim Results 201920 - November 2019
Plc Board
Mike Coupe Group Chief Executive Officer
Skills and experienceAppointed Group Chief Executive Officer on 9 July 2014 Mike has been a member of the Operating Board since October 2004 Mike has vast retail industry experience in trading strategy marketing digital and online as well as multi-site store experience He joined Sainsburyrsquos from Big Food Group where he was a board director of Big Food Group PLC and Managing Director of Iceland Food Stores He previously worked for both Asda and Tesco PLC where he served in a variety of senior management roles
Date of appointment 1 August 2007Mike has served as an Executive Director since 1 August 2007 and as Chief Executive Officer since 9 July 2014
Committee membershipCorporate Responsibility and Sustainability Committee
Kevin OrsquoByrne Chief Financial Officer
Skills and experienceKevin brings to the Board a wealth of retail and finance experience Kevin was previously Chief Executive Officer of Poundland Group Limited until December 2016 and held executive roles at Kingfisher plc from 2008 to 2015 including Divisional Director UK China and Turkey Chief Executive Officer of BampQ UK amp Ireland and Group Finance Director He was previously Group Finance Director of Dixons Retail plc and European Finance Director of Quaker Oats He was a Non-Executive Director of Land Securities Group PLC from 2008 to September 2017 where he was Chairman of the Audit Committee and Senior Independent Director
Date of appointment 9 January 2017
Other current rolesNon-Executive Director of Greene King plc
Skills and experienceMartin brings a breadth of experience and leadership in both executive and non-executive roles His previous roles include positions as the Chairman of Great Portland Estates plc Senior Independent Director and Chair of the Audit Committee of Worldpay Inc and Non-Executive Director and Chair of the Audit Committee of Lloyds Banking Group plc He was a partner at Deloitte LLP for 26 years serving as Chairman from 1995 to 2007 where his clients included Dixons WH Smith Alliance Unichem and Cadburyrsquos
Other current rolesChairman of RSA Insurance Group plc
Martin Scicluna Chairman
Date of appointment 1 November 2018 Martin joined the Board as Chairman Designate and Non-Executive Director on 1 November 2018 He was appointed as Chairman of the Board on 10 March 2019
Committee membershipChair of the Nomination Committee
Dame Susan Rice Senior Independent Director
Skills and experienceSusan has extensive experience as a Non-Executive Director as well as in retail banking financial services leadership and sustainability Her career in retail bankingis particularly relevant to our ownership ofSainsburyrsquos Bank Previously Susan was a member of the First Ministerrsquos Council of Economic Advisors Managing Director of Lloyds Banking Group Scotland and was previously Chief Executive and then Chairman of Lloyds TSB Scotland plc She has also held a range of other non-executive directorships including at the Bank of England and SSE plc
Committee membershipChair of the Remuneration Committee and a member of the Nomination Committee
Date of appointment 1 June 2013
Other current rolesChair of Scottish Water and Business Stream Chair of the Scottish Fiscal Commission Non-Executive Director of the North American Income Trust C Hoare and Co and Senior Independent Director of the North American Income Trust
9
Other current rolesNon-Executive Director and Chairman of the Audit Committee of Centrica plc
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jean Tomlin Non-Executive Director
Skills and experienceJean has extensive experience and breadth of skills in human resources and corporate responsibility Jean was formerly Director of HR Workforce and Accreditation for The London OrganisingCommittee of the Olympic and Paralympic Games where she set the strategic direction to ensure the mobilisation of the combined 200000-strong workforce including paid staff volunteers and contractors which represented the recruitment and mobilisation of the largest peacetime workforce and set the industry standard for volunteering with the highly acclaimed Games She was previously Group HR Director at Marks and Spencer Group Plc HR Director and founder member of Egg plc and Sales amp Operations Director of Prudential Direct
Date of appointment 1 January 2013
Committee membershipAudit Committee Corporate Responsibility and Sustainability Committee and Nomination Committee
David Keens Non-Executive Director
Skills and experienceDavid has extensive retail experience and knowledge of consumer facing businesses together with his core skills in finance David was formerly Group Finance Director of next plc from 1991 to 2015 and their Group Treasurer from 1986 to 1991 Previous management experience includes nine years in the UK and overseas operations of multinational food manufacturer Nabisco and prior to that seven years in the accountancy profession
Date of appointment 29 April 2015
Committee membershipChair of the Audit Committee and a member of the Nomination Committee
Other current rolesIndependent Board member of Capri Holdings Limited Non-Executive Director of Hakluyt and Chief Executive Officer of Chanzo Limited
Other current rolesNon-Executive Director Senior Independent Director and Chair of the Audit Committee of Auto Trader Group plc
Matt BrittinNon-Executive Director
Skills and experienceMatt has extensive experience of running a high profile fast moving innovative digital business Since 2015 he has been responsible for Googlersquos business and operations in Europe the Middle East and Africa and hersquos been in leadership roles at Google since 2007 Prior to that Matt spent much of his career in media and marketing with particular interests in strategy commercial development and sales performance This included commercial and digital leadership roles in UK media
Date of appointment 27 January 2011
Committee membershipNomination Committee and Remuneration Committee
Other current rolesGooglersquos President ndash Europe Middle East and Africa and Director of The Media Trust
Brian Cassin Non-Executive Director
Skills and experienceBrian brings present day experience of running a FTSE40 group and of big data and analytics ndash topics of key importance to Sainsburyrsquos Brian joined Experian plc as Chief Financial Officer in April 2012 a post he held until his appointment as Chief Executive Officer in July 2014 Prior to this Brian spent his career in investment banking at Greenhill amp Co where he was Managing Director and Partner Brian has also held various roles at Baring Brothers International and at the London Stock Exchange
Date of appointment 1 April 2016
Committee membershipAudit Committee and Nomination Committee
Other current rolesChief Executive Officer of Experian plc
10
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jo Harlow Non-Executive Director
Skills and experienceJo brings a wealth of experience in consumer-facing businesses and in the telecoms and technology industry bothin the UK and internationally Jo spent 12 years in a variety of senior management roles with Nokia and Microsoft Prior to this she spent eight years at PampG and 11 years at Reebok in senior sales and marketing positions in both Europe and the US
Date of appointment 11 September 2017
Committee membershipChair of the Corporate Responsibility and Sustainability Committee and member of the Nomination Committee and Remuneration Committee
Life PresidentLord Sainsbury of Preston Candover KG
Other current rolesNon-Executive Director of InterContinental Hotels plc Non-Executive Director of Halmaplc and Member of the Supervisory Board of Ceconomy AG
11
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief Executive
Tim FallowfieldCompany Secretary amp Corporate Services Director
Kevin OrsquoByrne Chief Financial Officer
Jim BrownChief Executive Officer of Sainsburyrsquos Bank
Paul Mills-HicksFood Commercial Director
Angie RisleyGroup HR Director
Phil JordanGroup Chief InformationOfficer
Simon RobertsRetail and Operations Director
Clo MoriartyGroup Chief Digital Officer
12
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief ExecutiveSee Appendix page 9
Kevin OrsquoByrneChief Financial OfficerSee Appendix page 9
Tim FallowfieldCompany Secretary amp Corporate Services Director
Date of appointment September 2004
Skills and experienceTim joined Sainsburyrsquos in 2001 as Company Secretary and joined the Operating Board in September 2004 In addition to his role as Company Secretary Tim is responsible for the Corporate Services Division comprising Legal Services Data Governance Safety Shareholder Services Insurance and Central Security He chairs the Group Safety Committee and the Data Governance Committee Tim joined Sainsburyrsquos from Exelplc the global logistics company now part of DHL where he was Company Secretary and General Counsel He began his career at the international law firm Clifford Chance and is a qualified solicitor Tim is Chairman of the Disability Confident Business Leaders Group which works with Government in shaping the disability employment agenda and in raising awareness of the benefits of employing disabled people
Jim BrownCEO of Sainsburyrsquos Bank
Skills and experienceJim joined Sainsburyrsquos Bank as CEO in June 2019 and is also a member of the Sainsburyrsquos Group Operating Board He has held a number of senior international Financial Services roles - most recently for RBS in the UK as CEO of Williams and Glyn and prior to that CEO of Ulster Bank in Northern Ireland and the Republic of Ireland Before moving to Ireland he was based in Hong Kong and was CEO Retail and Commercial Banking Asia and the Middle East for RBS and ABN AMRO He has also been a member of the RBS Group Management Committee ABN AMRO Executive Group ABN AMRO Global Consumer Leadership Team and the RBSBank of China Joint Steering Committee Earlier in his career he held a number of senior executive roles for Citibank in Asia and Australia and New Zealand Jim has also held various Board positions including at Ulster Bank Saudi Hollandi Bank The Royal Bank of Scotland (China) Co Ltd and RBS (Pakistan) Ltd He is also a past President of the Institute of Banking in Ireland He is currently a Certified Bank Director
Date of appointment August 2019
Paul Mills-HicksFood Commercial Director
Skills and experiencePaul joined the Operating Board in May 2014 as Food Commercial Director having spent over ten years at Sainsburyrsquos He was closely involved in the formation and execution of the lsquoMaking Sainsburyrsquos Great Againrsquo strategy Following this he held a variety of roles in commercial strategy and finance most recently as Business Unit Director for Grocery Prior to Sainsburyrsquos Paul was European Controller at Marks and Spencer Group PLC and a Director at UBS Warburg
Date of appointment May 2014
13
APPENDIX Interim Results 201920 - November 2019
Operating Board
Angie RisleyGroup HR Director
Skills and experienceAngie was appointed Group HR Director and a member of the Operating Board in January 2013 with responsibility for human resources Angie is also a Director of Sainsburyrsquos Bank plc Angie was most recently Non-Executive Director and Chairman of the Remuneration Committee of Serco plc and prior to this was Group HR Director of Lloyds Banking Group and an Executive Director of Whitbread PLC with responsibility for HR and Corporate Social Responsibility Angie is currently Non-Executive Director and Chair of the Remuneration Committee at Smith amp Nephew plc
Date of appointment January 2013
Phil JordanGroup Chief Information Officer
Skills and experiencePhil joined the Board in January 2018 and has brought a fresh globalperspective on technology to the Operating Board in addition to a wealth of experience in digital data and business transformation Prior to joining Sainsburyrsquos Phil had a long and successful track record in telecommunications Most recently he was Global Chief Information Officer at Telefonica overseeing Digital Transformation and Information Technology and prior to that was Chief Information Officer for Vodafone UKIreland Phil has worked as a Non-Executive Advisor on Technology in the Investment amp Retail Banking sector and is currently a Non-Executive Director of TalkTalk Telecom Group PLC and chairs its Cyber-Security Committee
Date of appointment January 2018
Simon RobertsRetail and Operations Director
Skills and experienceSimon joined Sainsburyrsquos and the Operating Board in July 2017 as Central Retail amp Operations Director responsible for Stores Central operation and Logistics In his previous role he was Executive Vice President of Walgreens Boots Alliance and President of Boots with responsibility for commercial and retail operations across the UK and Ireland Prior to Boots Simon was at Marks and Spencer Group PLC where he held operational and customer leadership roles across stores divisions and central operations Simon is also the Non-Executive Chairman at the Institute ofCustomer Service
Date of appointment July 2017
Clodagh MoriartyGroup Chief Digital Officer
Skills and experienceClodagh was appointed Group Chief Digital Officer in June 2018 Clodagh leads the delivery of a consistent and first-rate digital experience for customers across Sainsburyrsquos Argos and Sainsburyrsquos BankClodagh joined Sainsburyrsquos in 2010 from Bain amp Co management consultants where she had gained experience working on a broad range of projects across multiple sectors and countries Following two years as Head of Strategy at Sainsburyrsquosshe moved into Food Commercial as Category Manager for Meal Solutions and then became Head of Online Trading spanning Food General Merchandise and Clothing before being promoted to Director of Online in 2016 In this role Clodagh was instrumental in driving innovation within Groceries Online and launching new initiatives including SmartShop and Chop Chop
Date of appointment June 2018
14
APPENDIX Interim Results 201920 - November 2019
Supplementary financial details
3 Financial calendarQ3 trading statement(15 weeks to 4 January 2020)
Preliminary results(52 weeks to 7 March 2020)
8 January 2020
30 April 2020
1 Weighted average number of shares
The interim dividend datesOrdinary shares
Ex-dividend 14 November 2019Record 15 November 2019Payment 20 December 2019
Product Quality Framework helps us fund investment
PQF cereals case study
BAU savings to offset cost inflation
Strategic cost transformation 5 year plan
Slide Number 43
Financial Services Priorities
Financial Services reshaping the portfolio
Financial Services key targets
Nectar
Slide Number 48
Digital
We will help our customers live well for less
Slide Number 51
Slide Number 52
Guidance for 201920
Retail sales
Sainsburyrsquos sales area and store numbers
Sainsburyrsquos store estate
Sainsburyrsquos investment programme
Retail margin
Group retail
Plc Board
Plc Board
Plc Board
Plc Board
Operating Board
Operating Board
Operating Board
Supplementary financial details
Contacts
APPENDIX Interim Results 201920 - November 2019
H1201920
H1201819
Group retail
Return on capital employed 1
Net debt to EBITDAR (times)23
Fixed charge cover (times)2
Underlying tax rate Core retail capex sales5
713126
26515
743326
25715
poundm
1 ROCE Return is defined as a 52 week rolling underlying profit before interest and tax Capital employed is defined as group net assets2 Net debt of pound6778 million includes lease obligations under IFRS 16 and perpetual securities treated as debt divided by Group underlying EBITDAR of pound2171 million calculated for a 52-week period to 21 September 20193 Group underlying EBITDAR divided by rent (both capital and interest) and net finance costs where interest on perpetual securities is treated as an underlying finance costs4 52 weeks to 22nd September 2018 is not available due to the implementation of IFRS 16 Comparatives therefore reflect the 52 weeks to 9th March 20195 Includes retail sales inc vat inc fuel
4
4
7
APPENDIX Interim Results 201920 - November 2019
Plc Board
Kevin OrsquoByrneChief Financial Officer
Mike Coupe Group Chief Executive
Dame Susan Rice Senior Independent Director
Matt BrittinNon-Executive Director
Jo HarlowNon-Executive Director
Brian CassinNon-Executive Director
David KeensNon-Executive Director
Jean Tomlin Non-Executive Director
Martin Scicluna Chairman
8
APPENDIX Interim Results 201920 - November 2019
Plc Board
Mike Coupe Group Chief Executive Officer
Skills and experienceAppointed Group Chief Executive Officer on 9 July 2014 Mike has been a member of the Operating Board since October 2004 Mike has vast retail industry experience in trading strategy marketing digital and online as well as multi-site store experience He joined Sainsburyrsquos from Big Food Group where he was a board director of Big Food Group PLC and Managing Director of Iceland Food Stores He previously worked for both Asda and Tesco PLC where he served in a variety of senior management roles
Date of appointment 1 August 2007Mike has served as an Executive Director since 1 August 2007 and as Chief Executive Officer since 9 July 2014
Committee membershipCorporate Responsibility and Sustainability Committee
Kevin OrsquoByrne Chief Financial Officer
Skills and experienceKevin brings to the Board a wealth of retail and finance experience Kevin was previously Chief Executive Officer of Poundland Group Limited until December 2016 and held executive roles at Kingfisher plc from 2008 to 2015 including Divisional Director UK China and Turkey Chief Executive Officer of BampQ UK amp Ireland and Group Finance Director He was previously Group Finance Director of Dixons Retail plc and European Finance Director of Quaker Oats He was a Non-Executive Director of Land Securities Group PLC from 2008 to September 2017 where he was Chairman of the Audit Committee and Senior Independent Director
Date of appointment 9 January 2017
Other current rolesNon-Executive Director of Greene King plc
Skills and experienceMartin brings a breadth of experience and leadership in both executive and non-executive roles His previous roles include positions as the Chairman of Great Portland Estates plc Senior Independent Director and Chair of the Audit Committee of Worldpay Inc and Non-Executive Director and Chair of the Audit Committee of Lloyds Banking Group plc He was a partner at Deloitte LLP for 26 years serving as Chairman from 1995 to 2007 where his clients included Dixons WH Smith Alliance Unichem and Cadburyrsquos
Other current rolesChairman of RSA Insurance Group plc
Martin Scicluna Chairman
Date of appointment 1 November 2018 Martin joined the Board as Chairman Designate and Non-Executive Director on 1 November 2018 He was appointed as Chairman of the Board on 10 March 2019
Committee membershipChair of the Nomination Committee
Dame Susan Rice Senior Independent Director
Skills and experienceSusan has extensive experience as a Non-Executive Director as well as in retail banking financial services leadership and sustainability Her career in retail bankingis particularly relevant to our ownership ofSainsburyrsquos Bank Previously Susan was a member of the First Ministerrsquos Council of Economic Advisors Managing Director of Lloyds Banking Group Scotland and was previously Chief Executive and then Chairman of Lloyds TSB Scotland plc She has also held a range of other non-executive directorships including at the Bank of England and SSE plc
Committee membershipChair of the Remuneration Committee and a member of the Nomination Committee
Date of appointment 1 June 2013
Other current rolesChair of Scottish Water and Business Stream Chair of the Scottish Fiscal Commission Non-Executive Director of the North American Income Trust C Hoare and Co and Senior Independent Director of the North American Income Trust
9
Other current rolesNon-Executive Director and Chairman of the Audit Committee of Centrica plc
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jean Tomlin Non-Executive Director
Skills and experienceJean has extensive experience and breadth of skills in human resources and corporate responsibility Jean was formerly Director of HR Workforce and Accreditation for The London OrganisingCommittee of the Olympic and Paralympic Games where she set the strategic direction to ensure the mobilisation of the combined 200000-strong workforce including paid staff volunteers and contractors which represented the recruitment and mobilisation of the largest peacetime workforce and set the industry standard for volunteering with the highly acclaimed Games She was previously Group HR Director at Marks and Spencer Group Plc HR Director and founder member of Egg plc and Sales amp Operations Director of Prudential Direct
Date of appointment 1 January 2013
Committee membershipAudit Committee Corporate Responsibility and Sustainability Committee and Nomination Committee
David Keens Non-Executive Director
Skills and experienceDavid has extensive retail experience and knowledge of consumer facing businesses together with his core skills in finance David was formerly Group Finance Director of next plc from 1991 to 2015 and their Group Treasurer from 1986 to 1991 Previous management experience includes nine years in the UK and overseas operations of multinational food manufacturer Nabisco and prior to that seven years in the accountancy profession
Date of appointment 29 April 2015
Committee membershipChair of the Audit Committee and a member of the Nomination Committee
Other current rolesIndependent Board member of Capri Holdings Limited Non-Executive Director of Hakluyt and Chief Executive Officer of Chanzo Limited
Other current rolesNon-Executive Director Senior Independent Director and Chair of the Audit Committee of Auto Trader Group plc
Matt BrittinNon-Executive Director
Skills and experienceMatt has extensive experience of running a high profile fast moving innovative digital business Since 2015 he has been responsible for Googlersquos business and operations in Europe the Middle East and Africa and hersquos been in leadership roles at Google since 2007 Prior to that Matt spent much of his career in media and marketing with particular interests in strategy commercial development and sales performance This included commercial and digital leadership roles in UK media
Date of appointment 27 January 2011
Committee membershipNomination Committee and Remuneration Committee
Other current rolesGooglersquos President ndash Europe Middle East and Africa and Director of The Media Trust
Brian Cassin Non-Executive Director
Skills and experienceBrian brings present day experience of running a FTSE40 group and of big data and analytics ndash topics of key importance to Sainsburyrsquos Brian joined Experian plc as Chief Financial Officer in April 2012 a post he held until his appointment as Chief Executive Officer in July 2014 Prior to this Brian spent his career in investment banking at Greenhill amp Co where he was Managing Director and Partner Brian has also held various roles at Baring Brothers International and at the London Stock Exchange
Date of appointment 1 April 2016
Committee membershipAudit Committee and Nomination Committee
Other current rolesChief Executive Officer of Experian plc
10
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jo Harlow Non-Executive Director
Skills and experienceJo brings a wealth of experience in consumer-facing businesses and in the telecoms and technology industry bothin the UK and internationally Jo spent 12 years in a variety of senior management roles with Nokia and Microsoft Prior to this she spent eight years at PampG and 11 years at Reebok in senior sales and marketing positions in both Europe and the US
Date of appointment 11 September 2017
Committee membershipChair of the Corporate Responsibility and Sustainability Committee and member of the Nomination Committee and Remuneration Committee
Life PresidentLord Sainsbury of Preston Candover KG
Other current rolesNon-Executive Director of InterContinental Hotels plc Non-Executive Director of Halmaplc and Member of the Supervisory Board of Ceconomy AG
11
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief Executive
Tim FallowfieldCompany Secretary amp Corporate Services Director
Kevin OrsquoByrne Chief Financial Officer
Jim BrownChief Executive Officer of Sainsburyrsquos Bank
Paul Mills-HicksFood Commercial Director
Angie RisleyGroup HR Director
Phil JordanGroup Chief InformationOfficer
Simon RobertsRetail and Operations Director
Clo MoriartyGroup Chief Digital Officer
12
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief ExecutiveSee Appendix page 9
Kevin OrsquoByrneChief Financial OfficerSee Appendix page 9
Tim FallowfieldCompany Secretary amp Corporate Services Director
Date of appointment September 2004
Skills and experienceTim joined Sainsburyrsquos in 2001 as Company Secretary and joined the Operating Board in September 2004 In addition to his role as Company Secretary Tim is responsible for the Corporate Services Division comprising Legal Services Data Governance Safety Shareholder Services Insurance and Central Security He chairs the Group Safety Committee and the Data Governance Committee Tim joined Sainsburyrsquos from Exelplc the global logistics company now part of DHL where he was Company Secretary and General Counsel He began his career at the international law firm Clifford Chance and is a qualified solicitor Tim is Chairman of the Disability Confident Business Leaders Group which works with Government in shaping the disability employment agenda and in raising awareness of the benefits of employing disabled people
Jim BrownCEO of Sainsburyrsquos Bank
Skills and experienceJim joined Sainsburyrsquos Bank as CEO in June 2019 and is also a member of the Sainsburyrsquos Group Operating Board He has held a number of senior international Financial Services roles - most recently for RBS in the UK as CEO of Williams and Glyn and prior to that CEO of Ulster Bank in Northern Ireland and the Republic of Ireland Before moving to Ireland he was based in Hong Kong and was CEO Retail and Commercial Banking Asia and the Middle East for RBS and ABN AMRO He has also been a member of the RBS Group Management Committee ABN AMRO Executive Group ABN AMRO Global Consumer Leadership Team and the RBSBank of China Joint Steering Committee Earlier in his career he held a number of senior executive roles for Citibank in Asia and Australia and New Zealand Jim has also held various Board positions including at Ulster Bank Saudi Hollandi Bank The Royal Bank of Scotland (China) Co Ltd and RBS (Pakistan) Ltd He is also a past President of the Institute of Banking in Ireland He is currently a Certified Bank Director
Date of appointment August 2019
Paul Mills-HicksFood Commercial Director
Skills and experiencePaul joined the Operating Board in May 2014 as Food Commercial Director having spent over ten years at Sainsburyrsquos He was closely involved in the formation and execution of the lsquoMaking Sainsburyrsquos Great Againrsquo strategy Following this he held a variety of roles in commercial strategy and finance most recently as Business Unit Director for Grocery Prior to Sainsburyrsquos Paul was European Controller at Marks and Spencer Group PLC and a Director at UBS Warburg
Date of appointment May 2014
13
APPENDIX Interim Results 201920 - November 2019
Operating Board
Angie RisleyGroup HR Director
Skills and experienceAngie was appointed Group HR Director and a member of the Operating Board in January 2013 with responsibility for human resources Angie is also a Director of Sainsburyrsquos Bank plc Angie was most recently Non-Executive Director and Chairman of the Remuneration Committee of Serco plc and prior to this was Group HR Director of Lloyds Banking Group and an Executive Director of Whitbread PLC with responsibility for HR and Corporate Social Responsibility Angie is currently Non-Executive Director and Chair of the Remuneration Committee at Smith amp Nephew plc
Date of appointment January 2013
Phil JordanGroup Chief Information Officer
Skills and experiencePhil joined the Board in January 2018 and has brought a fresh globalperspective on technology to the Operating Board in addition to a wealth of experience in digital data and business transformation Prior to joining Sainsburyrsquos Phil had a long and successful track record in telecommunications Most recently he was Global Chief Information Officer at Telefonica overseeing Digital Transformation and Information Technology and prior to that was Chief Information Officer for Vodafone UKIreland Phil has worked as a Non-Executive Advisor on Technology in the Investment amp Retail Banking sector and is currently a Non-Executive Director of TalkTalk Telecom Group PLC and chairs its Cyber-Security Committee
Date of appointment January 2018
Simon RobertsRetail and Operations Director
Skills and experienceSimon joined Sainsburyrsquos and the Operating Board in July 2017 as Central Retail amp Operations Director responsible for Stores Central operation and Logistics In his previous role he was Executive Vice President of Walgreens Boots Alliance and President of Boots with responsibility for commercial and retail operations across the UK and Ireland Prior to Boots Simon was at Marks and Spencer Group PLC where he held operational and customer leadership roles across stores divisions and central operations Simon is also the Non-Executive Chairman at the Institute ofCustomer Service
Date of appointment July 2017
Clodagh MoriartyGroup Chief Digital Officer
Skills and experienceClodagh was appointed Group Chief Digital Officer in June 2018 Clodagh leads the delivery of a consistent and first-rate digital experience for customers across Sainsburyrsquos Argos and Sainsburyrsquos BankClodagh joined Sainsburyrsquos in 2010 from Bain amp Co management consultants where she had gained experience working on a broad range of projects across multiple sectors and countries Following two years as Head of Strategy at Sainsburyrsquosshe moved into Food Commercial as Category Manager for Meal Solutions and then became Head of Online Trading spanning Food General Merchandise and Clothing before being promoted to Director of Online in 2016 In this role Clodagh was instrumental in driving innovation within Groceries Online and launching new initiatives including SmartShop and Chop Chop
Date of appointment June 2018
14
APPENDIX Interim Results 201920 - November 2019
Supplementary financial details
3 Financial calendarQ3 trading statement(15 weeks to 4 January 2020)
Preliminary results(52 weeks to 7 March 2020)
8 January 2020
30 April 2020
1 Weighted average number of shares
The interim dividend datesOrdinary shares
Ex-dividend 14 November 2019Record 15 November 2019Payment 20 December 2019
Product Quality Framework helps us fund investment
PQF cereals case study
BAU savings to offset cost inflation
Strategic cost transformation 5 year plan
Slide Number 43
Financial Services Priorities
Financial Services reshaping the portfolio
Financial Services key targets
Nectar
Slide Number 48
Digital
We will help our customers live well for less
Slide Number 51
Slide Number 52
Guidance for 201920
Retail sales
Sainsburyrsquos sales area and store numbers
Sainsburyrsquos store estate
Sainsburyrsquos investment programme
Retail margin
Group retail
Plc Board
Plc Board
Plc Board
Plc Board
Operating Board
Operating Board
Operating Board
Supplementary financial details
Contacts
APPENDIX Interim Results 201920 - November 2019
Plc Board
Kevin OrsquoByrneChief Financial Officer
Mike Coupe Group Chief Executive
Dame Susan Rice Senior Independent Director
Matt BrittinNon-Executive Director
Jo HarlowNon-Executive Director
Brian CassinNon-Executive Director
David KeensNon-Executive Director
Jean Tomlin Non-Executive Director
Martin Scicluna Chairman
8
APPENDIX Interim Results 201920 - November 2019
Plc Board
Mike Coupe Group Chief Executive Officer
Skills and experienceAppointed Group Chief Executive Officer on 9 July 2014 Mike has been a member of the Operating Board since October 2004 Mike has vast retail industry experience in trading strategy marketing digital and online as well as multi-site store experience He joined Sainsburyrsquos from Big Food Group where he was a board director of Big Food Group PLC and Managing Director of Iceland Food Stores He previously worked for both Asda and Tesco PLC where he served in a variety of senior management roles
Date of appointment 1 August 2007Mike has served as an Executive Director since 1 August 2007 and as Chief Executive Officer since 9 July 2014
Committee membershipCorporate Responsibility and Sustainability Committee
Kevin OrsquoByrne Chief Financial Officer
Skills and experienceKevin brings to the Board a wealth of retail and finance experience Kevin was previously Chief Executive Officer of Poundland Group Limited until December 2016 and held executive roles at Kingfisher plc from 2008 to 2015 including Divisional Director UK China and Turkey Chief Executive Officer of BampQ UK amp Ireland and Group Finance Director He was previously Group Finance Director of Dixons Retail plc and European Finance Director of Quaker Oats He was a Non-Executive Director of Land Securities Group PLC from 2008 to September 2017 where he was Chairman of the Audit Committee and Senior Independent Director
Date of appointment 9 January 2017
Other current rolesNon-Executive Director of Greene King plc
Skills and experienceMartin brings a breadth of experience and leadership in both executive and non-executive roles His previous roles include positions as the Chairman of Great Portland Estates plc Senior Independent Director and Chair of the Audit Committee of Worldpay Inc and Non-Executive Director and Chair of the Audit Committee of Lloyds Banking Group plc He was a partner at Deloitte LLP for 26 years serving as Chairman from 1995 to 2007 where his clients included Dixons WH Smith Alliance Unichem and Cadburyrsquos
Other current rolesChairman of RSA Insurance Group plc
Martin Scicluna Chairman
Date of appointment 1 November 2018 Martin joined the Board as Chairman Designate and Non-Executive Director on 1 November 2018 He was appointed as Chairman of the Board on 10 March 2019
Committee membershipChair of the Nomination Committee
Dame Susan Rice Senior Independent Director
Skills and experienceSusan has extensive experience as a Non-Executive Director as well as in retail banking financial services leadership and sustainability Her career in retail bankingis particularly relevant to our ownership ofSainsburyrsquos Bank Previously Susan was a member of the First Ministerrsquos Council of Economic Advisors Managing Director of Lloyds Banking Group Scotland and was previously Chief Executive and then Chairman of Lloyds TSB Scotland plc She has also held a range of other non-executive directorships including at the Bank of England and SSE plc
Committee membershipChair of the Remuneration Committee and a member of the Nomination Committee
Date of appointment 1 June 2013
Other current rolesChair of Scottish Water and Business Stream Chair of the Scottish Fiscal Commission Non-Executive Director of the North American Income Trust C Hoare and Co and Senior Independent Director of the North American Income Trust
9
Other current rolesNon-Executive Director and Chairman of the Audit Committee of Centrica plc
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jean Tomlin Non-Executive Director
Skills and experienceJean has extensive experience and breadth of skills in human resources and corporate responsibility Jean was formerly Director of HR Workforce and Accreditation for The London OrganisingCommittee of the Olympic and Paralympic Games where she set the strategic direction to ensure the mobilisation of the combined 200000-strong workforce including paid staff volunteers and contractors which represented the recruitment and mobilisation of the largest peacetime workforce and set the industry standard for volunteering with the highly acclaimed Games She was previously Group HR Director at Marks and Spencer Group Plc HR Director and founder member of Egg plc and Sales amp Operations Director of Prudential Direct
Date of appointment 1 January 2013
Committee membershipAudit Committee Corporate Responsibility and Sustainability Committee and Nomination Committee
David Keens Non-Executive Director
Skills and experienceDavid has extensive retail experience and knowledge of consumer facing businesses together with his core skills in finance David was formerly Group Finance Director of next plc from 1991 to 2015 and their Group Treasurer from 1986 to 1991 Previous management experience includes nine years in the UK and overseas operations of multinational food manufacturer Nabisco and prior to that seven years in the accountancy profession
Date of appointment 29 April 2015
Committee membershipChair of the Audit Committee and a member of the Nomination Committee
Other current rolesIndependent Board member of Capri Holdings Limited Non-Executive Director of Hakluyt and Chief Executive Officer of Chanzo Limited
Other current rolesNon-Executive Director Senior Independent Director and Chair of the Audit Committee of Auto Trader Group plc
Matt BrittinNon-Executive Director
Skills and experienceMatt has extensive experience of running a high profile fast moving innovative digital business Since 2015 he has been responsible for Googlersquos business and operations in Europe the Middle East and Africa and hersquos been in leadership roles at Google since 2007 Prior to that Matt spent much of his career in media and marketing with particular interests in strategy commercial development and sales performance This included commercial and digital leadership roles in UK media
Date of appointment 27 January 2011
Committee membershipNomination Committee and Remuneration Committee
Other current rolesGooglersquos President ndash Europe Middle East and Africa and Director of The Media Trust
Brian Cassin Non-Executive Director
Skills and experienceBrian brings present day experience of running a FTSE40 group and of big data and analytics ndash topics of key importance to Sainsburyrsquos Brian joined Experian plc as Chief Financial Officer in April 2012 a post he held until his appointment as Chief Executive Officer in July 2014 Prior to this Brian spent his career in investment banking at Greenhill amp Co where he was Managing Director and Partner Brian has also held various roles at Baring Brothers International and at the London Stock Exchange
Date of appointment 1 April 2016
Committee membershipAudit Committee and Nomination Committee
Other current rolesChief Executive Officer of Experian plc
10
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jo Harlow Non-Executive Director
Skills and experienceJo brings a wealth of experience in consumer-facing businesses and in the telecoms and technology industry bothin the UK and internationally Jo spent 12 years in a variety of senior management roles with Nokia and Microsoft Prior to this she spent eight years at PampG and 11 years at Reebok in senior sales and marketing positions in both Europe and the US
Date of appointment 11 September 2017
Committee membershipChair of the Corporate Responsibility and Sustainability Committee and member of the Nomination Committee and Remuneration Committee
Life PresidentLord Sainsbury of Preston Candover KG
Other current rolesNon-Executive Director of InterContinental Hotels plc Non-Executive Director of Halmaplc and Member of the Supervisory Board of Ceconomy AG
11
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief Executive
Tim FallowfieldCompany Secretary amp Corporate Services Director
Kevin OrsquoByrne Chief Financial Officer
Jim BrownChief Executive Officer of Sainsburyrsquos Bank
Paul Mills-HicksFood Commercial Director
Angie RisleyGroup HR Director
Phil JordanGroup Chief InformationOfficer
Simon RobertsRetail and Operations Director
Clo MoriartyGroup Chief Digital Officer
12
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief ExecutiveSee Appendix page 9
Kevin OrsquoByrneChief Financial OfficerSee Appendix page 9
Tim FallowfieldCompany Secretary amp Corporate Services Director
Date of appointment September 2004
Skills and experienceTim joined Sainsburyrsquos in 2001 as Company Secretary and joined the Operating Board in September 2004 In addition to his role as Company Secretary Tim is responsible for the Corporate Services Division comprising Legal Services Data Governance Safety Shareholder Services Insurance and Central Security He chairs the Group Safety Committee and the Data Governance Committee Tim joined Sainsburyrsquos from Exelplc the global logistics company now part of DHL where he was Company Secretary and General Counsel He began his career at the international law firm Clifford Chance and is a qualified solicitor Tim is Chairman of the Disability Confident Business Leaders Group which works with Government in shaping the disability employment agenda and in raising awareness of the benefits of employing disabled people
Jim BrownCEO of Sainsburyrsquos Bank
Skills and experienceJim joined Sainsburyrsquos Bank as CEO in June 2019 and is also a member of the Sainsburyrsquos Group Operating Board He has held a number of senior international Financial Services roles - most recently for RBS in the UK as CEO of Williams and Glyn and prior to that CEO of Ulster Bank in Northern Ireland and the Republic of Ireland Before moving to Ireland he was based in Hong Kong and was CEO Retail and Commercial Banking Asia and the Middle East for RBS and ABN AMRO He has also been a member of the RBS Group Management Committee ABN AMRO Executive Group ABN AMRO Global Consumer Leadership Team and the RBSBank of China Joint Steering Committee Earlier in his career he held a number of senior executive roles for Citibank in Asia and Australia and New Zealand Jim has also held various Board positions including at Ulster Bank Saudi Hollandi Bank The Royal Bank of Scotland (China) Co Ltd and RBS (Pakistan) Ltd He is also a past President of the Institute of Banking in Ireland He is currently a Certified Bank Director
Date of appointment August 2019
Paul Mills-HicksFood Commercial Director
Skills and experiencePaul joined the Operating Board in May 2014 as Food Commercial Director having spent over ten years at Sainsburyrsquos He was closely involved in the formation and execution of the lsquoMaking Sainsburyrsquos Great Againrsquo strategy Following this he held a variety of roles in commercial strategy and finance most recently as Business Unit Director for Grocery Prior to Sainsburyrsquos Paul was European Controller at Marks and Spencer Group PLC and a Director at UBS Warburg
Date of appointment May 2014
13
APPENDIX Interim Results 201920 - November 2019
Operating Board
Angie RisleyGroup HR Director
Skills and experienceAngie was appointed Group HR Director and a member of the Operating Board in January 2013 with responsibility for human resources Angie is also a Director of Sainsburyrsquos Bank plc Angie was most recently Non-Executive Director and Chairman of the Remuneration Committee of Serco plc and prior to this was Group HR Director of Lloyds Banking Group and an Executive Director of Whitbread PLC with responsibility for HR and Corporate Social Responsibility Angie is currently Non-Executive Director and Chair of the Remuneration Committee at Smith amp Nephew plc
Date of appointment January 2013
Phil JordanGroup Chief Information Officer
Skills and experiencePhil joined the Board in January 2018 and has brought a fresh globalperspective on technology to the Operating Board in addition to a wealth of experience in digital data and business transformation Prior to joining Sainsburyrsquos Phil had a long and successful track record in telecommunications Most recently he was Global Chief Information Officer at Telefonica overseeing Digital Transformation and Information Technology and prior to that was Chief Information Officer for Vodafone UKIreland Phil has worked as a Non-Executive Advisor on Technology in the Investment amp Retail Banking sector and is currently a Non-Executive Director of TalkTalk Telecom Group PLC and chairs its Cyber-Security Committee
Date of appointment January 2018
Simon RobertsRetail and Operations Director
Skills and experienceSimon joined Sainsburyrsquos and the Operating Board in July 2017 as Central Retail amp Operations Director responsible for Stores Central operation and Logistics In his previous role he was Executive Vice President of Walgreens Boots Alliance and President of Boots with responsibility for commercial and retail operations across the UK and Ireland Prior to Boots Simon was at Marks and Spencer Group PLC where he held operational and customer leadership roles across stores divisions and central operations Simon is also the Non-Executive Chairman at the Institute ofCustomer Service
Date of appointment July 2017
Clodagh MoriartyGroup Chief Digital Officer
Skills and experienceClodagh was appointed Group Chief Digital Officer in June 2018 Clodagh leads the delivery of a consistent and first-rate digital experience for customers across Sainsburyrsquos Argos and Sainsburyrsquos BankClodagh joined Sainsburyrsquos in 2010 from Bain amp Co management consultants where she had gained experience working on a broad range of projects across multiple sectors and countries Following two years as Head of Strategy at Sainsburyrsquosshe moved into Food Commercial as Category Manager for Meal Solutions and then became Head of Online Trading spanning Food General Merchandise and Clothing before being promoted to Director of Online in 2016 In this role Clodagh was instrumental in driving innovation within Groceries Online and launching new initiatives including SmartShop and Chop Chop
Date of appointment June 2018
14
APPENDIX Interim Results 201920 - November 2019
Supplementary financial details
3 Financial calendarQ3 trading statement(15 weeks to 4 January 2020)
Preliminary results(52 weeks to 7 March 2020)
8 January 2020
30 April 2020
1 Weighted average number of shares
The interim dividend datesOrdinary shares
Ex-dividend 14 November 2019Record 15 November 2019Payment 20 December 2019
Product Quality Framework helps us fund investment
PQF cereals case study
BAU savings to offset cost inflation
Strategic cost transformation 5 year plan
Slide Number 43
Financial Services Priorities
Financial Services reshaping the portfolio
Financial Services key targets
Nectar
Slide Number 48
Digital
We will help our customers live well for less
Slide Number 51
Slide Number 52
Guidance for 201920
Retail sales
Sainsburyrsquos sales area and store numbers
Sainsburyrsquos store estate
Sainsburyrsquos investment programme
Retail margin
Group retail
Plc Board
Plc Board
Plc Board
Plc Board
Operating Board
Operating Board
Operating Board
Supplementary financial details
Contacts
APPENDIX Interim Results 201920 - November 2019
Plc Board
Mike Coupe Group Chief Executive Officer
Skills and experienceAppointed Group Chief Executive Officer on 9 July 2014 Mike has been a member of the Operating Board since October 2004 Mike has vast retail industry experience in trading strategy marketing digital and online as well as multi-site store experience He joined Sainsburyrsquos from Big Food Group where he was a board director of Big Food Group PLC and Managing Director of Iceland Food Stores He previously worked for both Asda and Tesco PLC where he served in a variety of senior management roles
Date of appointment 1 August 2007Mike has served as an Executive Director since 1 August 2007 and as Chief Executive Officer since 9 July 2014
Committee membershipCorporate Responsibility and Sustainability Committee
Kevin OrsquoByrne Chief Financial Officer
Skills and experienceKevin brings to the Board a wealth of retail and finance experience Kevin was previously Chief Executive Officer of Poundland Group Limited until December 2016 and held executive roles at Kingfisher plc from 2008 to 2015 including Divisional Director UK China and Turkey Chief Executive Officer of BampQ UK amp Ireland and Group Finance Director He was previously Group Finance Director of Dixons Retail plc and European Finance Director of Quaker Oats He was a Non-Executive Director of Land Securities Group PLC from 2008 to September 2017 where he was Chairman of the Audit Committee and Senior Independent Director
Date of appointment 9 January 2017
Other current rolesNon-Executive Director of Greene King plc
Skills and experienceMartin brings a breadth of experience and leadership in both executive and non-executive roles His previous roles include positions as the Chairman of Great Portland Estates plc Senior Independent Director and Chair of the Audit Committee of Worldpay Inc and Non-Executive Director and Chair of the Audit Committee of Lloyds Banking Group plc He was a partner at Deloitte LLP for 26 years serving as Chairman from 1995 to 2007 where his clients included Dixons WH Smith Alliance Unichem and Cadburyrsquos
Other current rolesChairman of RSA Insurance Group plc
Martin Scicluna Chairman
Date of appointment 1 November 2018 Martin joined the Board as Chairman Designate and Non-Executive Director on 1 November 2018 He was appointed as Chairman of the Board on 10 March 2019
Committee membershipChair of the Nomination Committee
Dame Susan Rice Senior Independent Director
Skills and experienceSusan has extensive experience as a Non-Executive Director as well as in retail banking financial services leadership and sustainability Her career in retail bankingis particularly relevant to our ownership ofSainsburyrsquos Bank Previously Susan was a member of the First Ministerrsquos Council of Economic Advisors Managing Director of Lloyds Banking Group Scotland and was previously Chief Executive and then Chairman of Lloyds TSB Scotland plc She has also held a range of other non-executive directorships including at the Bank of England and SSE plc
Committee membershipChair of the Remuneration Committee and a member of the Nomination Committee
Date of appointment 1 June 2013
Other current rolesChair of Scottish Water and Business Stream Chair of the Scottish Fiscal Commission Non-Executive Director of the North American Income Trust C Hoare and Co and Senior Independent Director of the North American Income Trust
9
Other current rolesNon-Executive Director and Chairman of the Audit Committee of Centrica plc
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jean Tomlin Non-Executive Director
Skills and experienceJean has extensive experience and breadth of skills in human resources and corporate responsibility Jean was formerly Director of HR Workforce and Accreditation for The London OrganisingCommittee of the Olympic and Paralympic Games where she set the strategic direction to ensure the mobilisation of the combined 200000-strong workforce including paid staff volunteers and contractors which represented the recruitment and mobilisation of the largest peacetime workforce and set the industry standard for volunteering with the highly acclaimed Games She was previously Group HR Director at Marks and Spencer Group Plc HR Director and founder member of Egg plc and Sales amp Operations Director of Prudential Direct
Date of appointment 1 January 2013
Committee membershipAudit Committee Corporate Responsibility and Sustainability Committee and Nomination Committee
David Keens Non-Executive Director
Skills and experienceDavid has extensive retail experience and knowledge of consumer facing businesses together with his core skills in finance David was formerly Group Finance Director of next plc from 1991 to 2015 and their Group Treasurer from 1986 to 1991 Previous management experience includes nine years in the UK and overseas operations of multinational food manufacturer Nabisco and prior to that seven years in the accountancy profession
Date of appointment 29 April 2015
Committee membershipChair of the Audit Committee and a member of the Nomination Committee
Other current rolesIndependent Board member of Capri Holdings Limited Non-Executive Director of Hakluyt and Chief Executive Officer of Chanzo Limited
Other current rolesNon-Executive Director Senior Independent Director and Chair of the Audit Committee of Auto Trader Group plc
Matt BrittinNon-Executive Director
Skills and experienceMatt has extensive experience of running a high profile fast moving innovative digital business Since 2015 he has been responsible for Googlersquos business and operations in Europe the Middle East and Africa and hersquos been in leadership roles at Google since 2007 Prior to that Matt spent much of his career in media and marketing with particular interests in strategy commercial development and sales performance This included commercial and digital leadership roles in UK media
Date of appointment 27 January 2011
Committee membershipNomination Committee and Remuneration Committee
Other current rolesGooglersquos President ndash Europe Middle East and Africa and Director of The Media Trust
Brian Cassin Non-Executive Director
Skills and experienceBrian brings present day experience of running a FTSE40 group and of big data and analytics ndash topics of key importance to Sainsburyrsquos Brian joined Experian plc as Chief Financial Officer in April 2012 a post he held until his appointment as Chief Executive Officer in July 2014 Prior to this Brian spent his career in investment banking at Greenhill amp Co where he was Managing Director and Partner Brian has also held various roles at Baring Brothers International and at the London Stock Exchange
Date of appointment 1 April 2016
Committee membershipAudit Committee and Nomination Committee
Other current rolesChief Executive Officer of Experian plc
10
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jo Harlow Non-Executive Director
Skills and experienceJo brings a wealth of experience in consumer-facing businesses and in the telecoms and technology industry bothin the UK and internationally Jo spent 12 years in a variety of senior management roles with Nokia and Microsoft Prior to this she spent eight years at PampG and 11 years at Reebok in senior sales and marketing positions in both Europe and the US
Date of appointment 11 September 2017
Committee membershipChair of the Corporate Responsibility and Sustainability Committee and member of the Nomination Committee and Remuneration Committee
Life PresidentLord Sainsbury of Preston Candover KG
Other current rolesNon-Executive Director of InterContinental Hotels plc Non-Executive Director of Halmaplc and Member of the Supervisory Board of Ceconomy AG
11
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief Executive
Tim FallowfieldCompany Secretary amp Corporate Services Director
Kevin OrsquoByrne Chief Financial Officer
Jim BrownChief Executive Officer of Sainsburyrsquos Bank
Paul Mills-HicksFood Commercial Director
Angie RisleyGroup HR Director
Phil JordanGroup Chief InformationOfficer
Simon RobertsRetail and Operations Director
Clo MoriartyGroup Chief Digital Officer
12
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief ExecutiveSee Appendix page 9
Kevin OrsquoByrneChief Financial OfficerSee Appendix page 9
Tim FallowfieldCompany Secretary amp Corporate Services Director
Date of appointment September 2004
Skills and experienceTim joined Sainsburyrsquos in 2001 as Company Secretary and joined the Operating Board in September 2004 In addition to his role as Company Secretary Tim is responsible for the Corporate Services Division comprising Legal Services Data Governance Safety Shareholder Services Insurance and Central Security He chairs the Group Safety Committee and the Data Governance Committee Tim joined Sainsburyrsquos from Exelplc the global logistics company now part of DHL where he was Company Secretary and General Counsel He began his career at the international law firm Clifford Chance and is a qualified solicitor Tim is Chairman of the Disability Confident Business Leaders Group which works with Government in shaping the disability employment agenda and in raising awareness of the benefits of employing disabled people
Jim BrownCEO of Sainsburyrsquos Bank
Skills and experienceJim joined Sainsburyrsquos Bank as CEO in June 2019 and is also a member of the Sainsburyrsquos Group Operating Board He has held a number of senior international Financial Services roles - most recently for RBS in the UK as CEO of Williams and Glyn and prior to that CEO of Ulster Bank in Northern Ireland and the Republic of Ireland Before moving to Ireland he was based in Hong Kong and was CEO Retail and Commercial Banking Asia and the Middle East for RBS and ABN AMRO He has also been a member of the RBS Group Management Committee ABN AMRO Executive Group ABN AMRO Global Consumer Leadership Team and the RBSBank of China Joint Steering Committee Earlier in his career he held a number of senior executive roles for Citibank in Asia and Australia and New Zealand Jim has also held various Board positions including at Ulster Bank Saudi Hollandi Bank The Royal Bank of Scotland (China) Co Ltd and RBS (Pakistan) Ltd He is also a past President of the Institute of Banking in Ireland He is currently a Certified Bank Director
Date of appointment August 2019
Paul Mills-HicksFood Commercial Director
Skills and experiencePaul joined the Operating Board in May 2014 as Food Commercial Director having spent over ten years at Sainsburyrsquos He was closely involved in the formation and execution of the lsquoMaking Sainsburyrsquos Great Againrsquo strategy Following this he held a variety of roles in commercial strategy and finance most recently as Business Unit Director for Grocery Prior to Sainsburyrsquos Paul was European Controller at Marks and Spencer Group PLC and a Director at UBS Warburg
Date of appointment May 2014
13
APPENDIX Interim Results 201920 - November 2019
Operating Board
Angie RisleyGroup HR Director
Skills and experienceAngie was appointed Group HR Director and a member of the Operating Board in January 2013 with responsibility for human resources Angie is also a Director of Sainsburyrsquos Bank plc Angie was most recently Non-Executive Director and Chairman of the Remuneration Committee of Serco plc and prior to this was Group HR Director of Lloyds Banking Group and an Executive Director of Whitbread PLC with responsibility for HR and Corporate Social Responsibility Angie is currently Non-Executive Director and Chair of the Remuneration Committee at Smith amp Nephew plc
Date of appointment January 2013
Phil JordanGroup Chief Information Officer
Skills and experiencePhil joined the Board in January 2018 and has brought a fresh globalperspective on technology to the Operating Board in addition to a wealth of experience in digital data and business transformation Prior to joining Sainsburyrsquos Phil had a long and successful track record in telecommunications Most recently he was Global Chief Information Officer at Telefonica overseeing Digital Transformation and Information Technology and prior to that was Chief Information Officer for Vodafone UKIreland Phil has worked as a Non-Executive Advisor on Technology in the Investment amp Retail Banking sector and is currently a Non-Executive Director of TalkTalk Telecom Group PLC and chairs its Cyber-Security Committee
Date of appointment January 2018
Simon RobertsRetail and Operations Director
Skills and experienceSimon joined Sainsburyrsquos and the Operating Board in July 2017 as Central Retail amp Operations Director responsible for Stores Central operation and Logistics In his previous role he was Executive Vice President of Walgreens Boots Alliance and President of Boots with responsibility for commercial and retail operations across the UK and Ireland Prior to Boots Simon was at Marks and Spencer Group PLC where he held operational and customer leadership roles across stores divisions and central operations Simon is also the Non-Executive Chairman at the Institute ofCustomer Service
Date of appointment July 2017
Clodagh MoriartyGroup Chief Digital Officer
Skills and experienceClodagh was appointed Group Chief Digital Officer in June 2018 Clodagh leads the delivery of a consistent and first-rate digital experience for customers across Sainsburyrsquos Argos and Sainsburyrsquos BankClodagh joined Sainsburyrsquos in 2010 from Bain amp Co management consultants where she had gained experience working on a broad range of projects across multiple sectors and countries Following two years as Head of Strategy at Sainsburyrsquosshe moved into Food Commercial as Category Manager for Meal Solutions and then became Head of Online Trading spanning Food General Merchandise and Clothing before being promoted to Director of Online in 2016 In this role Clodagh was instrumental in driving innovation within Groceries Online and launching new initiatives including SmartShop and Chop Chop
Date of appointment June 2018
14
APPENDIX Interim Results 201920 - November 2019
Supplementary financial details
3 Financial calendarQ3 trading statement(15 weeks to 4 January 2020)
Preliminary results(52 weeks to 7 March 2020)
8 January 2020
30 April 2020
1 Weighted average number of shares
The interim dividend datesOrdinary shares
Ex-dividend 14 November 2019Record 15 November 2019Payment 20 December 2019
Product Quality Framework helps us fund investment
PQF cereals case study
BAU savings to offset cost inflation
Strategic cost transformation 5 year plan
Slide Number 43
Financial Services Priorities
Financial Services reshaping the portfolio
Financial Services key targets
Nectar
Slide Number 48
Digital
We will help our customers live well for less
Slide Number 51
Slide Number 52
Guidance for 201920
Retail sales
Sainsburyrsquos sales area and store numbers
Sainsburyrsquos store estate
Sainsburyrsquos investment programme
Retail margin
Group retail
Plc Board
Plc Board
Plc Board
Plc Board
Operating Board
Operating Board
Operating Board
Supplementary financial details
Contacts
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jean Tomlin Non-Executive Director
Skills and experienceJean has extensive experience and breadth of skills in human resources and corporate responsibility Jean was formerly Director of HR Workforce and Accreditation for The London OrganisingCommittee of the Olympic and Paralympic Games where she set the strategic direction to ensure the mobilisation of the combined 200000-strong workforce including paid staff volunteers and contractors which represented the recruitment and mobilisation of the largest peacetime workforce and set the industry standard for volunteering with the highly acclaimed Games She was previously Group HR Director at Marks and Spencer Group Plc HR Director and founder member of Egg plc and Sales amp Operations Director of Prudential Direct
Date of appointment 1 January 2013
Committee membershipAudit Committee Corporate Responsibility and Sustainability Committee and Nomination Committee
David Keens Non-Executive Director
Skills and experienceDavid has extensive retail experience and knowledge of consumer facing businesses together with his core skills in finance David was formerly Group Finance Director of next plc from 1991 to 2015 and their Group Treasurer from 1986 to 1991 Previous management experience includes nine years in the UK and overseas operations of multinational food manufacturer Nabisco and prior to that seven years in the accountancy profession
Date of appointment 29 April 2015
Committee membershipChair of the Audit Committee and a member of the Nomination Committee
Other current rolesIndependent Board member of Capri Holdings Limited Non-Executive Director of Hakluyt and Chief Executive Officer of Chanzo Limited
Other current rolesNon-Executive Director Senior Independent Director and Chair of the Audit Committee of Auto Trader Group plc
Matt BrittinNon-Executive Director
Skills and experienceMatt has extensive experience of running a high profile fast moving innovative digital business Since 2015 he has been responsible for Googlersquos business and operations in Europe the Middle East and Africa and hersquos been in leadership roles at Google since 2007 Prior to that Matt spent much of his career in media and marketing with particular interests in strategy commercial development and sales performance This included commercial and digital leadership roles in UK media
Date of appointment 27 January 2011
Committee membershipNomination Committee and Remuneration Committee
Other current rolesGooglersquos President ndash Europe Middle East and Africa and Director of The Media Trust
Brian Cassin Non-Executive Director
Skills and experienceBrian brings present day experience of running a FTSE40 group and of big data and analytics ndash topics of key importance to Sainsburyrsquos Brian joined Experian plc as Chief Financial Officer in April 2012 a post he held until his appointment as Chief Executive Officer in July 2014 Prior to this Brian spent his career in investment banking at Greenhill amp Co where he was Managing Director and Partner Brian has also held various roles at Baring Brothers International and at the London Stock Exchange
Date of appointment 1 April 2016
Committee membershipAudit Committee and Nomination Committee
Other current rolesChief Executive Officer of Experian plc
10
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jo Harlow Non-Executive Director
Skills and experienceJo brings a wealth of experience in consumer-facing businesses and in the telecoms and technology industry bothin the UK and internationally Jo spent 12 years in a variety of senior management roles with Nokia and Microsoft Prior to this she spent eight years at PampG and 11 years at Reebok in senior sales and marketing positions in both Europe and the US
Date of appointment 11 September 2017
Committee membershipChair of the Corporate Responsibility and Sustainability Committee and member of the Nomination Committee and Remuneration Committee
Life PresidentLord Sainsbury of Preston Candover KG
Other current rolesNon-Executive Director of InterContinental Hotels plc Non-Executive Director of Halmaplc and Member of the Supervisory Board of Ceconomy AG
11
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief Executive
Tim FallowfieldCompany Secretary amp Corporate Services Director
Kevin OrsquoByrne Chief Financial Officer
Jim BrownChief Executive Officer of Sainsburyrsquos Bank
Paul Mills-HicksFood Commercial Director
Angie RisleyGroup HR Director
Phil JordanGroup Chief InformationOfficer
Simon RobertsRetail and Operations Director
Clo MoriartyGroup Chief Digital Officer
12
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief ExecutiveSee Appendix page 9
Kevin OrsquoByrneChief Financial OfficerSee Appendix page 9
Tim FallowfieldCompany Secretary amp Corporate Services Director
Date of appointment September 2004
Skills and experienceTim joined Sainsburyrsquos in 2001 as Company Secretary and joined the Operating Board in September 2004 In addition to his role as Company Secretary Tim is responsible for the Corporate Services Division comprising Legal Services Data Governance Safety Shareholder Services Insurance and Central Security He chairs the Group Safety Committee and the Data Governance Committee Tim joined Sainsburyrsquos from Exelplc the global logistics company now part of DHL where he was Company Secretary and General Counsel He began his career at the international law firm Clifford Chance and is a qualified solicitor Tim is Chairman of the Disability Confident Business Leaders Group which works with Government in shaping the disability employment agenda and in raising awareness of the benefits of employing disabled people
Jim BrownCEO of Sainsburyrsquos Bank
Skills and experienceJim joined Sainsburyrsquos Bank as CEO in June 2019 and is also a member of the Sainsburyrsquos Group Operating Board He has held a number of senior international Financial Services roles - most recently for RBS in the UK as CEO of Williams and Glyn and prior to that CEO of Ulster Bank in Northern Ireland and the Republic of Ireland Before moving to Ireland he was based in Hong Kong and was CEO Retail and Commercial Banking Asia and the Middle East for RBS and ABN AMRO He has also been a member of the RBS Group Management Committee ABN AMRO Executive Group ABN AMRO Global Consumer Leadership Team and the RBSBank of China Joint Steering Committee Earlier in his career he held a number of senior executive roles for Citibank in Asia and Australia and New Zealand Jim has also held various Board positions including at Ulster Bank Saudi Hollandi Bank The Royal Bank of Scotland (China) Co Ltd and RBS (Pakistan) Ltd He is also a past President of the Institute of Banking in Ireland He is currently a Certified Bank Director
Date of appointment August 2019
Paul Mills-HicksFood Commercial Director
Skills and experiencePaul joined the Operating Board in May 2014 as Food Commercial Director having spent over ten years at Sainsburyrsquos He was closely involved in the formation and execution of the lsquoMaking Sainsburyrsquos Great Againrsquo strategy Following this he held a variety of roles in commercial strategy and finance most recently as Business Unit Director for Grocery Prior to Sainsburyrsquos Paul was European Controller at Marks and Spencer Group PLC and a Director at UBS Warburg
Date of appointment May 2014
13
APPENDIX Interim Results 201920 - November 2019
Operating Board
Angie RisleyGroup HR Director
Skills and experienceAngie was appointed Group HR Director and a member of the Operating Board in January 2013 with responsibility for human resources Angie is also a Director of Sainsburyrsquos Bank plc Angie was most recently Non-Executive Director and Chairman of the Remuneration Committee of Serco plc and prior to this was Group HR Director of Lloyds Banking Group and an Executive Director of Whitbread PLC with responsibility for HR and Corporate Social Responsibility Angie is currently Non-Executive Director and Chair of the Remuneration Committee at Smith amp Nephew plc
Date of appointment January 2013
Phil JordanGroup Chief Information Officer
Skills and experiencePhil joined the Board in January 2018 and has brought a fresh globalperspective on technology to the Operating Board in addition to a wealth of experience in digital data and business transformation Prior to joining Sainsburyrsquos Phil had a long and successful track record in telecommunications Most recently he was Global Chief Information Officer at Telefonica overseeing Digital Transformation and Information Technology and prior to that was Chief Information Officer for Vodafone UKIreland Phil has worked as a Non-Executive Advisor on Technology in the Investment amp Retail Banking sector and is currently a Non-Executive Director of TalkTalk Telecom Group PLC and chairs its Cyber-Security Committee
Date of appointment January 2018
Simon RobertsRetail and Operations Director
Skills and experienceSimon joined Sainsburyrsquos and the Operating Board in July 2017 as Central Retail amp Operations Director responsible for Stores Central operation and Logistics In his previous role he was Executive Vice President of Walgreens Boots Alliance and President of Boots with responsibility for commercial and retail operations across the UK and Ireland Prior to Boots Simon was at Marks and Spencer Group PLC where he held operational and customer leadership roles across stores divisions and central operations Simon is also the Non-Executive Chairman at the Institute ofCustomer Service
Date of appointment July 2017
Clodagh MoriartyGroup Chief Digital Officer
Skills and experienceClodagh was appointed Group Chief Digital Officer in June 2018 Clodagh leads the delivery of a consistent and first-rate digital experience for customers across Sainsburyrsquos Argos and Sainsburyrsquos BankClodagh joined Sainsburyrsquos in 2010 from Bain amp Co management consultants where she had gained experience working on a broad range of projects across multiple sectors and countries Following two years as Head of Strategy at Sainsburyrsquosshe moved into Food Commercial as Category Manager for Meal Solutions and then became Head of Online Trading spanning Food General Merchandise and Clothing before being promoted to Director of Online in 2016 In this role Clodagh was instrumental in driving innovation within Groceries Online and launching new initiatives including SmartShop and Chop Chop
Date of appointment June 2018
14
APPENDIX Interim Results 201920 - November 2019
Supplementary financial details
3 Financial calendarQ3 trading statement(15 weeks to 4 January 2020)
Preliminary results(52 weeks to 7 March 2020)
8 January 2020
30 April 2020
1 Weighted average number of shares
The interim dividend datesOrdinary shares
Ex-dividend 14 November 2019Record 15 November 2019Payment 20 December 2019
Product Quality Framework helps us fund investment
PQF cereals case study
BAU savings to offset cost inflation
Strategic cost transformation 5 year plan
Slide Number 43
Financial Services Priorities
Financial Services reshaping the portfolio
Financial Services key targets
Nectar
Slide Number 48
Digital
We will help our customers live well for less
Slide Number 51
Slide Number 52
Guidance for 201920
Retail sales
Sainsburyrsquos sales area and store numbers
Sainsburyrsquos store estate
Sainsburyrsquos investment programme
Retail margin
Group retail
Plc Board
Plc Board
Plc Board
Plc Board
Operating Board
Operating Board
Operating Board
Supplementary financial details
Contacts
APPENDIX Interim Results 201920 - November 2019
Plc Board
Jo Harlow Non-Executive Director
Skills and experienceJo brings a wealth of experience in consumer-facing businesses and in the telecoms and technology industry bothin the UK and internationally Jo spent 12 years in a variety of senior management roles with Nokia and Microsoft Prior to this she spent eight years at PampG and 11 years at Reebok in senior sales and marketing positions in both Europe and the US
Date of appointment 11 September 2017
Committee membershipChair of the Corporate Responsibility and Sustainability Committee and member of the Nomination Committee and Remuneration Committee
Life PresidentLord Sainsbury of Preston Candover KG
Other current rolesNon-Executive Director of InterContinental Hotels plc Non-Executive Director of Halmaplc and Member of the Supervisory Board of Ceconomy AG
11
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief Executive
Tim FallowfieldCompany Secretary amp Corporate Services Director
Kevin OrsquoByrne Chief Financial Officer
Jim BrownChief Executive Officer of Sainsburyrsquos Bank
Paul Mills-HicksFood Commercial Director
Angie RisleyGroup HR Director
Phil JordanGroup Chief InformationOfficer
Simon RobertsRetail and Operations Director
Clo MoriartyGroup Chief Digital Officer
12
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief ExecutiveSee Appendix page 9
Kevin OrsquoByrneChief Financial OfficerSee Appendix page 9
Tim FallowfieldCompany Secretary amp Corporate Services Director
Date of appointment September 2004
Skills and experienceTim joined Sainsburyrsquos in 2001 as Company Secretary and joined the Operating Board in September 2004 In addition to his role as Company Secretary Tim is responsible for the Corporate Services Division comprising Legal Services Data Governance Safety Shareholder Services Insurance and Central Security He chairs the Group Safety Committee and the Data Governance Committee Tim joined Sainsburyrsquos from Exelplc the global logistics company now part of DHL where he was Company Secretary and General Counsel He began his career at the international law firm Clifford Chance and is a qualified solicitor Tim is Chairman of the Disability Confident Business Leaders Group which works with Government in shaping the disability employment agenda and in raising awareness of the benefits of employing disabled people
Jim BrownCEO of Sainsburyrsquos Bank
Skills and experienceJim joined Sainsburyrsquos Bank as CEO in June 2019 and is also a member of the Sainsburyrsquos Group Operating Board He has held a number of senior international Financial Services roles - most recently for RBS in the UK as CEO of Williams and Glyn and prior to that CEO of Ulster Bank in Northern Ireland and the Republic of Ireland Before moving to Ireland he was based in Hong Kong and was CEO Retail and Commercial Banking Asia and the Middle East for RBS and ABN AMRO He has also been a member of the RBS Group Management Committee ABN AMRO Executive Group ABN AMRO Global Consumer Leadership Team and the RBSBank of China Joint Steering Committee Earlier in his career he held a number of senior executive roles for Citibank in Asia and Australia and New Zealand Jim has also held various Board positions including at Ulster Bank Saudi Hollandi Bank The Royal Bank of Scotland (China) Co Ltd and RBS (Pakistan) Ltd He is also a past President of the Institute of Banking in Ireland He is currently a Certified Bank Director
Date of appointment August 2019
Paul Mills-HicksFood Commercial Director
Skills and experiencePaul joined the Operating Board in May 2014 as Food Commercial Director having spent over ten years at Sainsburyrsquos He was closely involved in the formation and execution of the lsquoMaking Sainsburyrsquos Great Againrsquo strategy Following this he held a variety of roles in commercial strategy and finance most recently as Business Unit Director for Grocery Prior to Sainsburyrsquos Paul was European Controller at Marks and Spencer Group PLC and a Director at UBS Warburg
Date of appointment May 2014
13
APPENDIX Interim Results 201920 - November 2019
Operating Board
Angie RisleyGroup HR Director
Skills and experienceAngie was appointed Group HR Director and a member of the Operating Board in January 2013 with responsibility for human resources Angie is also a Director of Sainsburyrsquos Bank plc Angie was most recently Non-Executive Director and Chairman of the Remuneration Committee of Serco plc and prior to this was Group HR Director of Lloyds Banking Group and an Executive Director of Whitbread PLC with responsibility for HR and Corporate Social Responsibility Angie is currently Non-Executive Director and Chair of the Remuneration Committee at Smith amp Nephew plc
Date of appointment January 2013
Phil JordanGroup Chief Information Officer
Skills and experiencePhil joined the Board in January 2018 and has brought a fresh globalperspective on technology to the Operating Board in addition to a wealth of experience in digital data and business transformation Prior to joining Sainsburyrsquos Phil had a long and successful track record in telecommunications Most recently he was Global Chief Information Officer at Telefonica overseeing Digital Transformation and Information Technology and prior to that was Chief Information Officer for Vodafone UKIreland Phil has worked as a Non-Executive Advisor on Technology in the Investment amp Retail Banking sector and is currently a Non-Executive Director of TalkTalk Telecom Group PLC and chairs its Cyber-Security Committee
Date of appointment January 2018
Simon RobertsRetail and Operations Director
Skills and experienceSimon joined Sainsburyrsquos and the Operating Board in July 2017 as Central Retail amp Operations Director responsible for Stores Central operation and Logistics In his previous role he was Executive Vice President of Walgreens Boots Alliance and President of Boots with responsibility for commercial and retail operations across the UK and Ireland Prior to Boots Simon was at Marks and Spencer Group PLC where he held operational and customer leadership roles across stores divisions and central operations Simon is also the Non-Executive Chairman at the Institute ofCustomer Service
Date of appointment July 2017
Clodagh MoriartyGroup Chief Digital Officer
Skills and experienceClodagh was appointed Group Chief Digital Officer in June 2018 Clodagh leads the delivery of a consistent and first-rate digital experience for customers across Sainsburyrsquos Argos and Sainsburyrsquos BankClodagh joined Sainsburyrsquos in 2010 from Bain amp Co management consultants where she had gained experience working on a broad range of projects across multiple sectors and countries Following two years as Head of Strategy at Sainsburyrsquosshe moved into Food Commercial as Category Manager for Meal Solutions and then became Head of Online Trading spanning Food General Merchandise and Clothing before being promoted to Director of Online in 2016 In this role Clodagh was instrumental in driving innovation within Groceries Online and launching new initiatives including SmartShop and Chop Chop
Date of appointment June 2018
14
APPENDIX Interim Results 201920 - November 2019
Supplementary financial details
3 Financial calendarQ3 trading statement(15 weeks to 4 January 2020)
Preliminary results(52 weeks to 7 March 2020)
8 January 2020
30 April 2020
1 Weighted average number of shares
The interim dividend datesOrdinary shares
Ex-dividend 14 November 2019Record 15 November 2019Payment 20 December 2019
Product Quality Framework helps us fund investment
PQF cereals case study
BAU savings to offset cost inflation
Strategic cost transformation 5 year plan
Slide Number 43
Financial Services Priorities
Financial Services reshaping the portfolio
Financial Services key targets
Nectar
Slide Number 48
Digital
We will help our customers live well for less
Slide Number 51
Slide Number 52
Guidance for 201920
Retail sales
Sainsburyrsquos sales area and store numbers
Sainsburyrsquos store estate
Sainsburyrsquos investment programme
Retail margin
Group retail
Plc Board
Plc Board
Plc Board
Plc Board
Operating Board
Operating Board
Operating Board
Supplementary financial details
Contacts
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief Executive
Tim FallowfieldCompany Secretary amp Corporate Services Director
Kevin OrsquoByrne Chief Financial Officer
Jim BrownChief Executive Officer of Sainsburyrsquos Bank
Paul Mills-HicksFood Commercial Director
Angie RisleyGroup HR Director
Phil JordanGroup Chief InformationOfficer
Simon RobertsRetail and Operations Director
Clo MoriartyGroup Chief Digital Officer
12
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief ExecutiveSee Appendix page 9
Kevin OrsquoByrneChief Financial OfficerSee Appendix page 9
Tim FallowfieldCompany Secretary amp Corporate Services Director
Date of appointment September 2004
Skills and experienceTim joined Sainsburyrsquos in 2001 as Company Secretary and joined the Operating Board in September 2004 In addition to his role as Company Secretary Tim is responsible for the Corporate Services Division comprising Legal Services Data Governance Safety Shareholder Services Insurance and Central Security He chairs the Group Safety Committee and the Data Governance Committee Tim joined Sainsburyrsquos from Exelplc the global logistics company now part of DHL where he was Company Secretary and General Counsel He began his career at the international law firm Clifford Chance and is a qualified solicitor Tim is Chairman of the Disability Confident Business Leaders Group which works with Government in shaping the disability employment agenda and in raising awareness of the benefits of employing disabled people
Jim BrownCEO of Sainsburyrsquos Bank
Skills and experienceJim joined Sainsburyrsquos Bank as CEO in June 2019 and is also a member of the Sainsburyrsquos Group Operating Board He has held a number of senior international Financial Services roles - most recently for RBS in the UK as CEO of Williams and Glyn and prior to that CEO of Ulster Bank in Northern Ireland and the Republic of Ireland Before moving to Ireland he was based in Hong Kong and was CEO Retail and Commercial Banking Asia and the Middle East for RBS and ABN AMRO He has also been a member of the RBS Group Management Committee ABN AMRO Executive Group ABN AMRO Global Consumer Leadership Team and the RBSBank of China Joint Steering Committee Earlier in his career he held a number of senior executive roles for Citibank in Asia and Australia and New Zealand Jim has also held various Board positions including at Ulster Bank Saudi Hollandi Bank The Royal Bank of Scotland (China) Co Ltd and RBS (Pakistan) Ltd He is also a past President of the Institute of Banking in Ireland He is currently a Certified Bank Director
Date of appointment August 2019
Paul Mills-HicksFood Commercial Director
Skills and experiencePaul joined the Operating Board in May 2014 as Food Commercial Director having spent over ten years at Sainsburyrsquos He was closely involved in the formation and execution of the lsquoMaking Sainsburyrsquos Great Againrsquo strategy Following this he held a variety of roles in commercial strategy and finance most recently as Business Unit Director for Grocery Prior to Sainsburyrsquos Paul was European Controller at Marks and Spencer Group PLC and a Director at UBS Warburg
Date of appointment May 2014
13
APPENDIX Interim Results 201920 - November 2019
Operating Board
Angie RisleyGroup HR Director
Skills and experienceAngie was appointed Group HR Director and a member of the Operating Board in January 2013 with responsibility for human resources Angie is also a Director of Sainsburyrsquos Bank plc Angie was most recently Non-Executive Director and Chairman of the Remuneration Committee of Serco plc and prior to this was Group HR Director of Lloyds Banking Group and an Executive Director of Whitbread PLC with responsibility for HR and Corporate Social Responsibility Angie is currently Non-Executive Director and Chair of the Remuneration Committee at Smith amp Nephew plc
Date of appointment January 2013
Phil JordanGroup Chief Information Officer
Skills and experiencePhil joined the Board in January 2018 and has brought a fresh globalperspective on technology to the Operating Board in addition to a wealth of experience in digital data and business transformation Prior to joining Sainsburyrsquos Phil had a long and successful track record in telecommunications Most recently he was Global Chief Information Officer at Telefonica overseeing Digital Transformation and Information Technology and prior to that was Chief Information Officer for Vodafone UKIreland Phil has worked as a Non-Executive Advisor on Technology in the Investment amp Retail Banking sector and is currently a Non-Executive Director of TalkTalk Telecom Group PLC and chairs its Cyber-Security Committee
Date of appointment January 2018
Simon RobertsRetail and Operations Director
Skills and experienceSimon joined Sainsburyrsquos and the Operating Board in July 2017 as Central Retail amp Operations Director responsible for Stores Central operation and Logistics In his previous role he was Executive Vice President of Walgreens Boots Alliance and President of Boots with responsibility for commercial and retail operations across the UK and Ireland Prior to Boots Simon was at Marks and Spencer Group PLC where he held operational and customer leadership roles across stores divisions and central operations Simon is also the Non-Executive Chairman at the Institute ofCustomer Service
Date of appointment July 2017
Clodagh MoriartyGroup Chief Digital Officer
Skills and experienceClodagh was appointed Group Chief Digital Officer in June 2018 Clodagh leads the delivery of a consistent and first-rate digital experience for customers across Sainsburyrsquos Argos and Sainsburyrsquos BankClodagh joined Sainsburyrsquos in 2010 from Bain amp Co management consultants where she had gained experience working on a broad range of projects across multiple sectors and countries Following two years as Head of Strategy at Sainsburyrsquosshe moved into Food Commercial as Category Manager for Meal Solutions and then became Head of Online Trading spanning Food General Merchandise and Clothing before being promoted to Director of Online in 2016 In this role Clodagh was instrumental in driving innovation within Groceries Online and launching new initiatives including SmartShop and Chop Chop
Date of appointment June 2018
14
APPENDIX Interim Results 201920 - November 2019
Supplementary financial details
3 Financial calendarQ3 trading statement(15 weeks to 4 January 2020)
Preliminary results(52 weeks to 7 March 2020)
8 January 2020
30 April 2020
1 Weighted average number of shares
The interim dividend datesOrdinary shares
Ex-dividend 14 November 2019Record 15 November 2019Payment 20 December 2019
Product Quality Framework helps us fund investment
PQF cereals case study
BAU savings to offset cost inflation
Strategic cost transformation 5 year plan
Slide Number 43
Financial Services Priorities
Financial Services reshaping the portfolio
Financial Services key targets
Nectar
Slide Number 48
Digital
We will help our customers live well for less
Slide Number 51
Slide Number 52
Guidance for 201920
Retail sales
Sainsburyrsquos sales area and store numbers
Sainsburyrsquos store estate
Sainsburyrsquos investment programme
Retail margin
Group retail
Plc Board
Plc Board
Plc Board
Plc Board
Operating Board
Operating Board
Operating Board
Supplementary financial details
Contacts
APPENDIX Interim Results 201920 - November 2019
Operating Board
Mike Coupe Group Chief ExecutiveSee Appendix page 9
Kevin OrsquoByrneChief Financial OfficerSee Appendix page 9
Tim FallowfieldCompany Secretary amp Corporate Services Director
Date of appointment September 2004
Skills and experienceTim joined Sainsburyrsquos in 2001 as Company Secretary and joined the Operating Board in September 2004 In addition to his role as Company Secretary Tim is responsible for the Corporate Services Division comprising Legal Services Data Governance Safety Shareholder Services Insurance and Central Security He chairs the Group Safety Committee and the Data Governance Committee Tim joined Sainsburyrsquos from Exelplc the global logistics company now part of DHL where he was Company Secretary and General Counsel He began his career at the international law firm Clifford Chance and is a qualified solicitor Tim is Chairman of the Disability Confident Business Leaders Group which works with Government in shaping the disability employment agenda and in raising awareness of the benefits of employing disabled people
Jim BrownCEO of Sainsburyrsquos Bank
Skills and experienceJim joined Sainsburyrsquos Bank as CEO in June 2019 and is also a member of the Sainsburyrsquos Group Operating Board He has held a number of senior international Financial Services roles - most recently for RBS in the UK as CEO of Williams and Glyn and prior to that CEO of Ulster Bank in Northern Ireland and the Republic of Ireland Before moving to Ireland he was based in Hong Kong and was CEO Retail and Commercial Banking Asia and the Middle East for RBS and ABN AMRO He has also been a member of the RBS Group Management Committee ABN AMRO Executive Group ABN AMRO Global Consumer Leadership Team and the RBSBank of China Joint Steering Committee Earlier in his career he held a number of senior executive roles for Citibank in Asia and Australia and New Zealand Jim has also held various Board positions including at Ulster Bank Saudi Hollandi Bank The Royal Bank of Scotland (China) Co Ltd and RBS (Pakistan) Ltd He is also a past President of the Institute of Banking in Ireland He is currently a Certified Bank Director
Date of appointment August 2019
Paul Mills-HicksFood Commercial Director
Skills and experiencePaul joined the Operating Board in May 2014 as Food Commercial Director having spent over ten years at Sainsburyrsquos He was closely involved in the formation and execution of the lsquoMaking Sainsburyrsquos Great Againrsquo strategy Following this he held a variety of roles in commercial strategy and finance most recently as Business Unit Director for Grocery Prior to Sainsburyrsquos Paul was European Controller at Marks and Spencer Group PLC and a Director at UBS Warburg
Date of appointment May 2014
13
APPENDIX Interim Results 201920 - November 2019
Operating Board
Angie RisleyGroup HR Director
Skills and experienceAngie was appointed Group HR Director and a member of the Operating Board in January 2013 with responsibility for human resources Angie is also a Director of Sainsburyrsquos Bank plc Angie was most recently Non-Executive Director and Chairman of the Remuneration Committee of Serco plc and prior to this was Group HR Director of Lloyds Banking Group and an Executive Director of Whitbread PLC with responsibility for HR and Corporate Social Responsibility Angie is currently Non-Executive Director and Chair of the Remuneration Committee at Smith amp Nephew plc
Date of appointment January 2013
Phil JordanGroup Chief Information Officer
Skills and experiencePhil joined the Board in January 2018 and has brought a fresh globalperspective on technology to the Operating Board in addition to a wealth of experience in digital data and business transformation Prior to joining Sainsburyrsquos Phil had a long and successful track record in telecommunications Most recently he was Global Chief Information Officer at Telefonica overseeing Digital Transformation and Information Technology and prior to that was Chief Information Officer for Vodafone UKIreland Phil has worked as a Non-Executive Advisor on Technology in the Investment amp Retail Banking sector and is currently a Non-Executive Director of TalkTalk Telecom Group PLC and chairs its Cyber-Security Committee
Date of appointment January 2018
Simon RobertsRetail and Operations Director
Skills and experienceSimon joined Sainsburyrsquos and the Operating Board in July 2017 as Central Retail amp Operations Director responsible for Stores Central operation and Logistics In his previous role he was Executive Vice President of Walgreens Boots Alliance and President of Boots with responsibility for commercial and retail operations across the UK and Ireland Prior to Boots Simon was at Marks and Spencer Group PLC where he held operational and customer leadership roles across stores divisions and central operations Simon is also the Non-Executive Chairman at the Institute ofCustomer Service
Date of appointment July 2017
Clodagh MoriartyGroup Chief Digital Officer
Skills and experienceClodagh was appointed Group Chief Digital Officer in June 2018 Clodagh leads the delivery of a consistent and first-rate digital experience for customers across Sainsburyrsquos Argos and Sainsburyrsquos BankClodagh joined Sainsburyrsquos in 2010 from Bain amp Co management consultants where she had gained experience working on a broad range of projects across multiple sectors and countries Following two years as Head of Strategy at Sainsburyrsquosshe moved into Food Commercial as Category Manager for Meal Solutions and then became Head of Online Trading spanning Food General Merchandise and Clothing before being promoted to Director of Online in 2016 In this role Clodagh was instrumental in driving innovation within Groceries Online and launching new initiatives including SmartShop and Chop Chop
Date of appointment June 2018
14
APPENDIX Interim Results 201920 - November 2019
Supplementary financial details
3 Financial calendarQ3 trading statement(15 weeks to 4 January 2020)
Preliminary results(52 weeks to 7 March 2020)
8 January 2020
30 April 2020
1 Weighted average number of shares
The interim dividend datesOrdinary shares
Ex-dividend 14 November 2019Record 15 November 2019Payment 20 December 2019
Product Quality Framework helps us fund investment
PQF cereals case study
BAU savings to offset cost inflation
Strategic cost transformation 5 year plan
Slide Number 43
Financial Services Priorities
Financial Services reshaping the portfolio
Financial Services key targets
Nectar
Slide Number 48
Digital
We will help our customers live well for less
Slide Number 51
Slide Number 52
Guidance for 201920
Retail sales
Sainsburyrsquos sales area and store numbers
Sainsburyrsquos store estate
Sainsburyrsquos investment programme
Retail margin
Group retail
Plc Board
Plc Board
Plc Board
Plc Board
Operating Board
Operating Board
Operating Board
Supplementary financial details
Contacts
APPENDIX Interim Results 201920 - November 2019
Operating Board
Angie RisleyGroup HR Director
Skills and experienceAngie was appointed Group HR Director and a member of the Operating Board in January 2013 with responsibility for human resources Angie is also a Director of Sainsburyrsquos Bank plc Angie was most recently Non-Executive Director and Chairman of the Remuneration Committee of Serco plc and prior to this was Group HR Director of Lloyds Banking Group and an Executive Director of Whitbread PLC with responsibility for HR and Corporate Social Responsibility Angie is currently Non-Executive Director and Chair of the Remuneration Committee at Smith amp Nephew plc
Date of appointment January 2013
Phil JordanGroup Chief Information Officer
Skills and experiencePhil joined the Board in January 2018 and has brought a fresh globalperspective on technology to the Operating Board in addition to a wealth of experience in digital data and business transformation Prior to joining Sainsburyrsquos Phil had a long and successful track record in telecommunications Most recently he was Global Chief Information Officer at Telefonica overseeing Digital Transformation and Information Technology and prior to that was Chief Information Officer for Vodafone UKIreland Phil has worked as a Non-Executive Advisor on Technology in the Investment amp Retail Banking sector and is currently a Non-Executive Director of TalkTalk Telecom Group PLC and chairs its Cyber-Security Committee
Date of appointment January 2018
Simon RobertsRetail and Operations Director
Skills and experienceSimon joined Sainsburyrsquos and the Operating Board in July 2017 as Central Retail amp Operations Director responsible for Stores Central operation and Logistics In his previous role he was Executive Vice President of Walgreens Boots Alliance and President of Boots with responsibility for commercial and retail operations across the UK and Ireland Prior to Boots Simon was at Marks and Spencer Group PLC where he held operational and customer leadership roles across stores divisions and central operations Simon is also the Non-Executive Chairman at the Institute ofCustomer Service
Date of appointment July 2017
Clodagh MoriartyGroup Chief Digital Officer
Skills and experienceClodagh was appointed Group Chief Digital Officer in June 2018 Clodagh leads the delivery of a consistent and first-rate digital experience for customers across Sainsburyrsquos Argos and Sainsburyrsquos BankClodagh joined Sainsburyrsquos in 2010 from Bain amp Co management consultants where she had gained experience working on a broad range of projects across multiple sectors and countries Following two years as Head of Strategy at Sainsburyrsquosshe moved into Food Commercial as Category Manager for Meal Solutions and then became Head of Online Trading spanning Food General Merchandise and Clothing before being promoted to Director of Online in 2016 In this role Clodagh was instrumental in driving innovation within Groceries Online and launching new initiatives including SmartShop and Chop Chop
Date of appointment June 2018
14
APPENDIX Interim Results 201920 - November 2019
Supplementary financial details
3 Financial calendarQ3 trading statement(15 weeks to 4 January 2020)
Preliminary results(52 weeks to 7 March 2020)
8 January 2020
30 April 2020
1 Weighted average number of shares
The interim dividend datesOrdinary shares
Ex-dividend 14 November 2019Record 15 November 2019Payment 20 December 2019
