Tesco 2011 Annual Report Download - page 8

Building on our success
I’m pleased to report that Tesco has once again achieved a good
set of results with good sales, profit and earnings per share growth,
despite challenging conditions in some of our markets.
I am particularly pleased with our progress on return on capital,
where we have seen ROCE grow strongly to 12.9%, representing an
important first step towards our 2014/15 target of 14.6%, with further
increases to come.
In the UK, we have an outstanding core business. It made progress in
the year but some aspects of our performance can improve. Stronger
sales momentum here is a key priority and I am confident that the
focus and energy our new UK leadership team is bringing to the business
will see a return to form in the months ahead as Tesco tries to do its
bit to help customers who face pressure on their householdbudgets.
The increasing scale and competitiveness of our international businesses
are now driving strong growth in sales, market share, profits and
returns, supported by the generally improving global economic
environment. We have built some excellent springboards for future
growth, and whilst there is still work to do, particularly in the United
States, I am delighted with our performance in Europe and Asia, where
I expect further strong growth this year and beyond.
We have set six immediate team objectives against which we intend
to be judged. First, keeping the UK strong and growing; second,
we want to be outstanding internationally, not just successful; third,
as the combination of stores and online becomes compelling for
customers, we aim to become a multi-channel retailer wherever we
trade; fourth, we will deliver on the potential of retailing services –
of which Tesco Bank is a big part; fifth, by applying Group skill and
scale we will give our customers even more value and increase the
competitive advantage to our businesses; and finally, to deliver higher
returns on capital employed for shareholders.
Also, as part of our commitment to communities, we want to widen
our contribution from tackling climate change to broader aspects
of sustainability.
Vision and strategy
Tesco is a business built around customers and staff, high-quality
assets around the world and multiple opportunities for growth. My job
is to build on this legacy – for all our stakeholders. Going forward, there
will mostly be continuity. We have a sound strategy, a strong team and
the period of highest risk with the diversification of the business is now
behind us. However, there will also be some changes, because we know
that we can do some things better and because, as customers change,
so must Tesco.
Importantly, there will be no change to the foundations of our business:
our core purpose – to create value for customers to earn their
lifetime loyalty – and our Values – no one tries harder for customers
and treat people how we like to be treated.
I have set out a new vision for the future of the business. I would like
Tesco to be seen as the most highly valued business in the world.
Valued not only by our customers, but also by the communities we
serve, our staff and our shareholders.
We will win locally by applying our skills globally. The key word here
is ‘locally’. Seven years of running our businesses in Asia and Europe
has taught me that all retailing is local. But increasingly we are
utilising the skill and scale of the Group to benefit the performance
and competitiveness of each of our businesses around the world.
I have inherited a great legacy and I am really
excited about the future. In the end of course, we
know it’s all about performance; that’s what matters
and that’s what we aim to deliver.
4 — TESCO PLC Annual Report and Financial Statements 2011
OVERVIEW
Chief Executive’s review