Preliminary Results 2018/19

10 April 2019

Tesco staff member talking to customers


  • Group sales2£56.9bn,+11.5%
    • UK & ROI LFL sales8+2.9% incl.Tesco UK +1.7% and Booker +11.1%
    • Central Europe LFL sales8(2.3)%: fewer trading days and less general merchandise
    • Asia LFL sales8(6.2)%: improvement to (3.0)% in 4Q
  • Group operating profit4£2,206m,+34.0
    • UK & ROI £1,537m,+45.1%;incl.£196m Booker (last year: £185m9) and £79m synergies
    • Central Europe £186m,+56.3%: significant cost reductions and improved profit mix
    • Asia £286m,(4.3)%: supplier negotiations concluded and significant restructuring complete
    • Bank £197m,+16.6%: strong banking performance and one-off contract renewal benefit10
  • Group operating margin43.45%;2H operating margin43.96% (3.79% excl.Booker)
  • Retail operating cash flow6£2.5bn: c.£(490)m working capital timing impact year-on-year
  • Retail free cashflow of £906m: impacted y-o-y by working capital timing,higher tax and market purchases of shares
  • Net debt6,7£(2.9)bn: increased by £(238)m after £(766)m Booker cash consideration
  • Final dividend 4.10p,giving FY dividend of 5.77p – now expect to reach c.2.0x EPS cover11in 2019/20
  • Statutory revenue +11.2% to £63.9bn;operating profit +17.1% to £2,153m;profit before tax +28.8% to £1,674m

Further progress against each of our six strategic drivers

  • Brandhealth12continues to strengthen;quality perception +1.9 points and value perception +1.3 points13
  • In-yearcostsavings £532m;savings of £1.4bn to date towards £1.5bn target
  • Generated £2.5bn retail operatingcash6;£8.6bn retail operating cash14generated over three years
  • Improving themix跨地域,channels and product;closure of Tesco Direct;less general merchandise in CE
  • Released a further £285m value15fromproperty;three store buybacks in Cirencester,Stroud and Shepton Mallet
  • Innovationsincluding 10,000 own brand product relaunch;eight new ‘Exclusively at Tesco' brands;launch of Jack's


1.The Group has defined and outlined the purpose of its alternative performance measures,including its headline measures,in the Glossary on page 58.

2.Group sales exclude VAT and fuel.Sales growth shown on a comparable days basis and includes an adjustment to last year's figures to reflect a change in reporting of consignment sales.

3.Last year figures restated for impact of IFRS 15 ‘Revenue from contracts with customers'.Impacts include a £2m increase in revenue and operating profit.

4.Excludes amortisation of acquired intangibles and excludes exceptional items by virtue of their size and nature in order to reflect management's view of underlying performance.

5.Headline earnings per share measure excludes exceptional items,amortisation of acquired intangibles,net pension finance costs and fair value remeasurements of financial instruments.Full details of this measure can be found in Note 9,starting on page 38.

6.Net debt,retail operating cash flow and retail free cash flow exclude the impact of Tesco Bank in order to provide further analysis of the retail cash flow statement.

7.Net debt includes both continuing and discontinued operations.

8.Like-for-like is a measure of growth in Group online sales and sales from stores that have been open for at least a year (at constant foreign exchange rates).

9.In the current year,Booker is consolidated for 51 weeks.Booker operating profit last year is adjusted to reflect a comparable 51 week period and to exclude property profits.Previously referenced profit of c.£195m last year reflects the 53 weeks to 30 March 2018.

10.Relates to £13m up-front recognition of insurance renewals following a contract renewal with our pet insurance provider,as required by IFRS 15.

11.On a post-IFRS 16 basis.

12.As per YouGov BrandIndex (customers recommend) February 2019.

13.Reflects year-on-year change in YouGov Brand perception measures of quality and value.

14.Cumulative retail cash generated from operations excluding pension deficit repayments,cash outflows relating to SFO fine and shareholder compensation scheme payments and cash payments in lieu of colleague bonus shares.

15.Value released from property relates to gross proceeds from property disposals in the year.

16.Capex is shown excluding property buybacks.Statutory capital expenditure (including property buybacks) for the 52 weeks ended 23 February 2019 was £1.2bn (LY £1.5bn).