Tesco 2014 Annual Report Download - page 3

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AsiaUK Europe Tesco Bank
68%16%14%2%
66%21%7%6%
Highlights
Our strategic priorities
£43.6bn
Revenue±
313,923
colleagues◊
£10.3bn
Revenue±
96,085
colleagues◊
£9.3bn
Revenue±
91,788
colleagues◊
3,748
colleagues◊
£1.0bn
Revenue±
0.0%
Revenue growth±
3,378
stores
+2.6%
Revenue growth±
2,417
stores
(0.6)%
Revenue growth±
1,510
stores
7m
customer accounts
(1.8)%
Revenue growth±
£2,191m
Trading profit
1st
market position
£692m
Trading profit
1st or 2nd
in three markets
£238m
Trading profit
1st or 2nd
in five markets
£6bn
savings deposits
£194m
Trading profit
(3.6)%
Trading profit growth
16m
loyalty scheme
members
(5.6)%
Trading profit growth
14m
loyalty scheme
members
(27.7)%
Trading profit growth
8m
loyalty scheme
members
86%
of product sales
are online
+1.6%
Trading profit growth
•Trading profit grew by 19% excluding
income from the legacy insurance
distribution agreement and fair
value release
•Good growth in core banking products
with customer accounts for credit cards,
loans, mortgages and savings up 14%
•Despite challenging market conditions
for our insurance business, strong
growth in Home Insurance following
its relaunch
•In its first full year, our mortgage
product has made good progress with
balances reaching £0.7 billion
•On track to launch current accounts in
the first half of 2014/15, designed to
strengthen loyalty and engagement as
part of our multichannel offer
•Trading profit reflects challenging
conditions, particularly for large
stores, and decision to invest in a more
compelling offer for customers across
the region
•Significantly reduced new store
openings and any future investment will
be focused on convenience and grocery
home shopping
•Completed roll-out of grocery home
shopping to all international operations,
with the exception of India
•Invested in the customer offer across
the region, with improved trading
through the second half of the year
• In Ireland launched Price Promise, helping
to drive improved customer trust in prices.
Worked to emphasise the breadth of our
offer and points of differentiation
•Regulatory restrictions on opening
hours in South Korea, combined with
political disruption in Thailand, held
back overall performance in Asia
•Continued with refresh programme and
store opening programme focused on
Thailand and South Korea. Plan to open
1.2 million square feet in Asia in
2014/15, whilst continuing to grow our
convenience and grocery home
shopping operations
•Forming a partnership with China
Resources Enterprise Ltd. giving Tesco
a 20% ownership stake in the largest
food retail business in China
•Entered into an agreement with Trent
Limited, part of the Tata Group, to form
a 50:50 joint venture with Trent
Hypermarket Limited which operates
the Star Bazaar retail business in India
• Strengthened the foundations of the
business, in a weakening grocery market
•Launched Price Promise, relaunched
finest*
range and completed around
300 store refreshes
• Tailored the ranges in our Express stores
to local catchments and trialled the
ingredients to make our destination
stores worth the trip
• Large stores and general merchandise
transformation weighed on top-line
performance
• Extended Click & Collect to 1,750 general
merchandise and 260 grocery locations,
helping to build our multichannel offer
• Now accelerating plans to deliver the
most compelling offer for customers with
sharper prices, improved quality, stronger
ranges and better service, in addition to
accelerating growth in new channels
Group sales
£70.9bn
Group profit before tax
£2.3bn
Group sales growth
+0.3%
Underlying profit before tax**
(6.9)%
Full-year dividend
14.76p
Underlying diluted earnings per share**†
( 7. 3)%
* All figures reported on a continuing operations
basis, excluding China and the United States
which have been treated as discontinued.
± Excludes the accounting impact of IFRIC 13.
◊ Based on the number of colleagues at year end.
** These figures reflect a year-on-year movement.
See glossary on page 143 for full accounting
definitions.
† Calculated on a constant tax rate basis; (5.0)% at
actual tax rates.
We are a team of over
500,000 people in 12 markets
dedicated to providing the
most compelling offer to
our customers. With retail
operations in the UK, Asia and
Europe, we strive to bring the
best value, choice and service to
millions of customers each week.
Our strategy has been developed to
drive sustainable growth through
three priorities:
1. Continuing to invest in
a strong UK business
2. Establishing multichannel
leadership in all of
our markets
3. Pursuing disciplined
international growth
Tesco at a glance*