Preliminary Results 2008/2009 - Presentation - Tesco PLC€¦ · Tesco PLC Subject: Preliminary...
Transcript of Preliminary Results 2008/2009 - Presentation - Tesco PLC€¦ · Tesco PLC Subject: Preliminary...
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Preliminary Results
21 April 2009
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David Reid
Chairman
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Acquisitions
Korea
TPF
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Organic growth
US
China India
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Community promises
•
Actively supporting local communities
•
Buying and selling our products responsibly
•
Caring for the environment
•
Giving customers healthy choices
• Creating good jobs and careers
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Community
£6.2m
raised
37 green stores
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Our people
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Laurie McIlwee
Group Finance Director
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Results headlines
• Solid growth in sales, profit and earnings
• Continued investment in our strategy
• Substantial structural cost savings
• Good, well-covered dividend growth
• Strong, property-backed balance sheet
•
Plans to bring capex
down well below cash generation
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Group performance
• Sales £59.4bn, up 15.1%
• Trading profit rose 12.4% to £3.09bn
•
Trading profit rose 16.2% before initial trading losses in the U.S. and the impact of Homever
• Group underlying profit £3.13bn, up 10.0%
* Growth reported on a consistent basis (12 months versus 12 months) for China
*
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Property
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Group performance
•
Group pre-tax profit up 5.5%
•
Lower growth rate principally due to IAS 32 and IAS 39
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Returns to shareholders
•
Good underlying diluted earnings per share growth despite exceptional tax rebate last year
•
Underlying diluted earnings per share up 9.7%*
• Proposed final dividend 8.39p, up 9.0%
• Full year dividend 11.96p, up 9.7%
* Using constant tax rate & based on 52 weeks
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UK retail sales growth including petrol
Sales up
9.5%
4.3%
2.7%
2.1% 0.4%
Like-for-like New stores Week 53 TPF Total sales
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• Like-for-like sales up 3.0%*
•
Like-for-like growth in the last seven weeks of the year 2.1%*
•
3.4%*
like-for-like growth in first six weeks of current year
• 4.4%*
like-for-like growth before VAT change
UK
* Ex-petrol
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UK trading profit
• UK trading profit £2,381m, up 12.7%
• UK trading margin 6.2%
• Small contribution from TPF
•
Investment in the shopping trip funded from step-change savings of £540m
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International
• Sales £17.9bn, up 30.6% at actual rates
•
Sales excluding Fresh & Easy and Homever
up 26.7%
• Trading profits up 26.6% at actual rates*
• Trading margin unchanged*
* Excluding Fresh & Easy initial losses and Homever integration costs and pre-conversion losses
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Asia
• Sales £7.6bn, up 29.4% at actual rates
•
Excluding Homever, sales up 23.5% at actual rates
• Trading profit rose to £355m
•
Excluding Homever, trading profit up 28.9% at actual rates
•
Margins strong, driven by performances in Malaysia and Thailand
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Europe
• Sales £10.1bn, up 29.1% at actual rates
• Deteriorating demand in some markets
•
Trading profit rose to £496m, up 24.9% at actual rates
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US
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Retailing Services
• Investor seminar on Services planned
• Sales £3.4bn, up 11%*
• Trading profits rose to £460m, up 21%*
* Including TPF on a pro-forma basis
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Tesco Personal Finance
• Acquisition completed in December 2008
•
High quality book, no toxic assets and strong liquidity
•
Bad debt experience better than industry average
•
Underlying profit before tax £244m (pro- forma basis)
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Tesco Personal Finance
•
Insurance over 65% of profits
•
Savings products attracted over 100,000 new customers
•
Grown savings book to over £4.5bn
•
Balance sheet in net surplus
•
Separate balance sheet provided
•
Core Tier One Ratio of 12%
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JVs and Associates
• Profits were £110m, up from £75m last year
• Includes a 50-week contribution from TPF
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Tax
• Tax charged at an effective rate of 26.7%
•
Reflects new Corporation Tax rate from April 2008
• Expected tax rate this year around 27%
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Net debt
• Increased to £9.6bn from £6.2bn–
total capital outlay of £6.6bn in year
–
significant depreciation in Sterling–
managed flow of property deals
• Plan to reduce debt in current year
• Average debt maturity of 11 years
• 75% of debt at fixed rates
• Weighted average coupon of 5.6%
• No liquidity or financing issues
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Net finance costs
• Net finance costs increased to £362m*
•
Underlying interest charge increased to £309m, up from £159m
• Increase driven by rise in net debt
* Includes the net return on our pension scheme’s assets and liabilities and the impacts of IAS 32 and 39
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Pensions
• Award-winning defined-benefit pension scheme
•
Triennial valuation showed a small deficit of £275m*
•
Member and company contribution rates increased by an average of 0.7% of salary
• Post-tax IFRS pension deficit is £1.1bn
* As at 31 March 2008
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Capital expenditure
US
Europe
Group
UK
4.7
2.42.8
3.0
3.9
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
04/05 05/06 06/07 07/08 08/09
£bn
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
04/05 05/06 06/07 07/08 08/09
£bn
Asia
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Capital expenditure
3.5
2.42.8
3.0
3.9
4.7
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
04/05 05/06 06/07 07/08 08/09 09/10(F)
£bn
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
04/05 05/06 06/07 07/08 08/09 09/10(F)
£bn
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Operating cash flow
• Operating cash flow of £5.0bn
•
Up from £4.1bn last year and £0.3bn higher than capex
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Returns
• On a 53 week basis, ROCE up to 13.0%*
* Adjusting for new investment in TPF and Homever
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Terry Leahy
Chief Executive
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International
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Growing market share
Q4 07/08
Q4 08/09
Hungary 16.7 16.9
Slovakia 15.0 15.7
Czech Republic 7.7 8.3
Poland 4.8 5.3
Source: GFK
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Non-food: clothingClothing up 11%
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Central Europe
Hungary
Hungary
Small
formats
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Europe
Turkey
Ireland
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Asia
Thailand
Korea
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Malaysia
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ClubcardChina
Thailand
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Asia
China
Japan
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FocusBuild
for less
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New space
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International returnsLFL cash return on investment (CROI)*
%
* CROI is measured as earnings before interest, tax, depreciation
and amortisation, expressed as a percentage of net invested capital.
Note: Excludes China
11.4
12.8
13.1
12.712.5
12.2
11.0
12.0
13.0
03/04 04/05 05/06 06/07 07/08 08/09
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Fresh & Easy
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UK
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Price
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Clubcard
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Range
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Service
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Availability
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Step-changeReduced
distribution
costs
Energy consumption
down 8%
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Non-food
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Tesco direct
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Retailing services
• Tesco Personal Finance
• tesco.com
• Telecoms
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Tesco Personal Finance
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tesco.com
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Telecoms
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Community
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Summary
•
Strategy giving us momentum through the downturn
• Our success is based on listening to customers
• Adjusting our business and approach successfully
• Step-change on community and climate change
• Investing in our strategy
•
Platforms for growth internationally, in non-food and in services
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Q & A
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Preliminary Results
21 April 2009
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ChinaTurkey
Japan
Poland
Czech Republic
Slovakia
Malaysia
Hungary
Thailand
ROI
Korea
0
500
1,000
1,500
2,000
2,500
3,000
-2.0% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0% 18.0% 20.0%
International returns –
2008/09£m capital invested
c.7-10% c.10% c.15%LFL CROI
c.20%