28 Strategic Report J Sainsbury plc Annual Report 2019

Our KPIs
Financial key performance indicators are critical to
understanding and measuring our financial health.

Group measures
Underlying profit Underlying basic earnings Retail operating cash flow (£m) Retail free cash flow (£m)
before tax (£m) 1 per share (pence) 1 Definition: Retail cash generated Definition: Net cash generated
Definition: Profit before tax adjusted Definition: Earnings per share using from operations after changes from retail operations, adjusted for
for certain items in note 3 which, by underlying profit in working capital and pension exceptional pension contributions,
virtue of their size and/or nature, do contributions, and before after cash capital expenditure but
not reflect the Group’s underlying exceptional pension contributions before strategic capital expenditure
performance and after investments in joint
ventures and associates and
Sainsbury’s Bank capital injections

2014/15 681 2014/15 26.4 2014/15 1,398 2014/152

2015/16 587 2015/16 24.2 2015/16 1,149 2015/16 296

2016/17 581 2016/17 21.8 2016/17 1,128 2016/17 319

2017/18 589 2017/18 20.4 2017/18 1,259 2017/18 432

2018/19 635 2018/19 22.0 2018/19 1,156 2018/19 461

Retail underlying
EBITDAR margin (%)
Definition: Underlying profit before
tax before underlying net finance
costs, underlying share of post-
tax results from joint ventures,
depreciation, amortisation and
rent, divided by sales excluding VAT,
including fuel, excluding Financial
Services
Retail underlying
operating margin (%) 1
Definition: Underlying profit before
tax before underlying net finance
costs and underlying share of
post-tax results from joint ventures,
divided by retail sales excluding VAT,
including fuel, excluding Financial
Services
Dividend per share (pence)
Definition: Total proposed
dividend per share in relation
to the financial year
Core retail capital
expenditure (£m) 1
Definition: Capital expenditure
excluding Financial Services, after
proceeds from disposal of property,
plant and equipment and before
strategic capital expenditure

2014/15 7.76 2014/15 3.07 2014/15 13.2 2014/15 947

2015/16 7.58 2015/16 2.74 2015/16 12.1 2015/16 542

2016/17 7.40 3
2016/17 2.42 2016/17 10.2 2016/17 547

2017/18 7.44 2017/18 2.24 2017/18 10.2 2017/18 495

2018/19 7.52 2018/19 2.43 2018/19 11.0 2018/19 454

1 Refer to APMs on page 185.

2 Retail free cash flow was only defined as a KPI from 2015/16 onwards.
3 2016/17 restated to include Argos on a post acquisition consolidation basis.
Strategic Report J Sainsbury plc Annual Report 2019  29

Strategic Report
Maintaining balance sheet strength
Pre-tax return on Gearing (%) 1 Lease adjusted net debt/
capital employed (%) Definition: Net debt divided by underlying EBITDAR (%) 1
Definition: Underlying profit before net assets Definition: Net debt plus capitalised
interest, and tax, divided by the lease obligations (5.5 per cent
average of opening and closing discount rate) divided by Group
capital employed (net assets underlying EBITDAR
before net debt)

Governance Report
2014/15 9.7 2014/15 42.3 2014/15 4.1

2015/16 8.8 2015/16 28.7 2015/16 4.3

2016/17 8.8 2016/17 21.5 2016/17 4.0

2017/18 8.4 2017/18 18.4 2017/18 3.6

2018/19 8.5 2018/19 13.5 2018/19 3.5

Retail
Like-for-like sales 2018/19 (%)1 Retail sales growth 2018/19 (%) Like-for-like transactions Cost savings (%)
Definition: Year-on-year growth Definition: Year-on-year growth in growth 2018/19 (%) Definition: Excludes Financial

in sales including VAT, excluding
fuel, excluding Financial Services,
for stores that have been open for
more than one year
sales including VAT, excluding fuel,
excluding Financial Services
Definition: Year-on-year growth
in transactions, excluding fuel,
excluding Financial Services,
for stores that have been open
for more than one year
Financial Statements
Services and Argos and represents
cost reductions as a result of
identified initiatives

2014/15 (1.9) 2014/15 (0.2) 2014/15 0.0 2014/15 140

2015/16 (0.9) 2015/16 0.4 2015/16 0.3 2015/16 225

2016/17 0.02
2016/17 14.1 2016/17 1.0 2016/17 130

2017/18 1.3 2
2017/18 9.8 2017/18 (1.2) 2017/18 185

2018/19 (0.2) 2018/19 0.4 2018/19 (0.3) 2018/19 220

Non-financial KPIs3
Colleague engagement (%) Community investment (£m) Greenhouse gas emissions
Definition: Percentage of our Definition: Total investment reduction (%)
colleagues who feel that we are generated for good causes Definition: Percentage reduction in
a great place to work 3 since 20114 absolute greenhouse gas emissions
since 2005/06

2014/15 75 2014/15 167 2014/15 2

2015/16 78 2015/16 212 2015/16 3

2016/17 77 2016/17 265 2016/17 11

2017/18 72 2017/18 300 2017/18 24

2018/19 69 2018/19 330 2018/19 35

1 Refer to APMs on page 185.

2 2016/17 and 2017/18 LFL growth both include Argos in the base.
3 2018/19 data is for the Group and prior data is for Sainsbury’s. Argos data has been incorporated into the greenhouse gas emissions 2005 baseline.
4 Including all corporate donations, volunteering, fundraising, awareness-raising and investment in community programmes.