B&M European Value Retail S.A.

Good morning, everyone. My name is Tjeerd Jegen and I'm a new CEO at BNM. As I've just recently started at BNM and I'm still in the middle of my induction, I felt recording this update is most suitable. This will be the only time I will do this. In future, I'm looking forward to giving live updates and holding Q&A sessions as I strongly believe in a direct and transparent relationship with our analysts and our investors that follow us. I would like to start with a few words of personal introduction. My professional career spends 13 years in retail and of that I have spent about half my time in food and half my time in non-food. I've worked in three different continents in both private equity and listed businesses. And before becoming a CEO, I was in the commercial and buying part of the retail companies I've worked at. And it's also my natural focus. I always start with looking at the customer proposition and looking at the business from the customer's perspective. The last 10 years, I've worked both in variety value retail and discount apparel. And it's my strong conviction that discount retail has tremendous potential, especially in physical stores. My motivation for taking on the B&M role is this. It provides me with the opportunity to use my international food and general merchandise experience to strengthen the groups customer proposition with the ultimate aim to bringing back sustainable light for light growth and new store growth both in the UK and in continental Europe. And most importantly, the very big driver for me is to help our customers save money when buying their daily needs at B&M. Having completed the first phase of my induction, I'm truly excited about the journey ahead. and the significant opportunities that lie before us. My early days at BNM have been extremely insightful. And as a reminder, I only started on the 16th of June, so even less than a month ago. I've had the pleasure of meeting many dedicated colleagues across our stores, our distribution centers, and support functions in both the UK and in France. And I've been impressed with them. I've been impressed with the commitment, the passion that underpins our operations. And what stands out to me is the business solid foundation that provides me with confidence as I look ahead. In my first four weeks, I focused on understanding B&M and immersing myself fully in the operations of the company. Since joining, I've spent time in stores where I've reviewed our operation from the perspective of our customers and our colleagues. I've worked in two B&M UK stores, receiving goods, stacking shelves and working on the checkouts. Spent time reviewing our DC processes and walking the floors of our largest DC. I've been to the French operation and did a deep dive there on the commercial approach. And finally last week I spent time at our Heron Foods business. and spend time with the senior team and visit a number of stores in the whole region. I've seen many things that will be the base for a comprehensive plan to improve the B&M business. In one sentence, we will make B&M a better place to shop and a better place to work. There are many strengths in our business, but I also have seen many opportunities. My early assessment is the fundamentals of our customer proposition and the business processes are solid. We can make this foundation even stronger by being more commercially astute, especially in B&M UK, bringing more energy, more excitement in our customer experience and simplifying and strengthening our offer to our customers. That said, it is still my early assessment after just a handful weeks in the company. And in the coming months, I'll take my initial impressions and build them into a comprehensive plan which will bring evolution and strengthening of the business model rather than a revolution at BNM. It's also my experience that in a weak economic climate, consumers turn to discount as a search of value. That is our opportunity. Despite the challenging last year, the relevance of BNM's proposition to households across the UK and France is very clear to me. We are a destination for shoppers who seek value, offering quality products at prices that genuinely make a difference. We have a low-cost business model that makes strategic choices, differentiating itself from the specialist general merchandising specialists and supermarkets. That said, we still provide great choice, and we offer a wide range of products at discount prices. And we have a strong financial model that generates attractive profit margins and cash conversion from a very limited asset base, which we then use to reinvest in the business or return to shareholders. And in the last three years, we have returned more than one billion pounds to our shareholders. Turning now to our trading performance for the first quarter of our financial year 26. And to be clear, that covers a 13-week period up to the 28th of June, 2025. In that period, group revenues increased by 4.4% to 1.4 billion. Driven by growth from new stores, new space, but also positive, like-for-like performance in both B&M businesses. Zooming into the UK, our largest business. B&M UK delivered revenues of 1.1 billion. a 4.7% increase, with a like-for-like sales returning positive at 1.3%. The positive like-for-like sales were mainly driven by robust performance from our general merchandise, outdoor ranges, of course benefiting from drier weather, especially in the month of April, together with the positive timing effect of Easter. The general merchandise market remains still subdued. and customers are cautious. However, our sales values and units increased on both like-for-like and a total basis. And as already mentioned, our outdoor ranges such as garden and do-it-yourself have performed well. As I touched on earlier, I do believe we can improve quite some aspects of our commercial and in-store execution. And we still make you do much more work in FMCG. However, Following some changes made in May, we've seen an improving trend in our health and beauty and cleaning categories. These categories have benefited from allocating more space in our stores to these categories and as a consequence, improving also their merchandising. Despite the solid sales performance in terms of volume and also value, average selling price deflation in some general merchandise categories has led to a lower trading gross margin in Q1. With our ASP changes beginning to annualize in the second quarter, and with a good line of sight on finished goods cost benefits coming through as freight and FX rates improve, we expect border and trading growth marches for new ranges to keep improving into second half. Moving to France. BNM France continued to make satisfactory progress with revenues of 136 million, a robust 7.6% increase, and like-for-like sales up 1.1%. Having been to B&M France two weeks ago, I'm really encouraged about the growth potential. The stores looked very good, and the brand is appealing more and more to the French customer. B&M France benefits from the buying skill of our UK business, but I also believe their benefits in terms of learning of the way our French business operates in that market that we can bring to our UK business. And finally, Heron Foods. Heron Foods recorded total revenues at a slight decrease of 0.4% in the quarter, and the team are working hard to improve aspects of execution, but importantly, Heron is still delivering a level of profitability that is significantly higher than three years ago. We've made good progress on store openings in the UK and in France, with ten net new stores in the UK and four in France, and Heron opened one store in Q1, with a focus firmly on improving like-for-like performance. Some final remarks on our first weeks here at B&M. I've seen firsthand the core strengths that underpin our investment case. I have observed our relevance to customers from the value of our products, And I know that we benefit from strong relationships with our suppliers, many of whom provide us with great brands for which we drive significant and growing volumes. I've also been impressed with our lean cost base and the discipline evident in our focus choices, underscoring a robust operational efficiency that is truly one of our great strengths. That said, although I've only spent a few weeks in the company, I've identified a range of opportunities to strengthen and evolve it. We will be working on this plan over the upcoming months and share this in due course with you. Thank you very much. I look forward to engaging further with all of you as we move forward.

Good morning and welcome to the fireside chat with Sher Jagan, our new Chief Executive. Although this is pre-recorded, the questions we're asking are the ones that are on the forefront of investors' mind. So with that, straight into it, Sherb. Can you talk about your career to date? What made you join B&M and what your initial impressions are of the UK market?

Thanks, Dave. So 30 years in business, of which 20 years in public companies, 10 years in private equity. Probably half the time in food businesses and half the time in non-foods. And the last 10 years, permanently in value variety and in discount. The reason I chose this job, I think with my background, with my experience, I can really help to get the proposition stronger again. And of course, with the aim to get sustainable life-for-life growth back into BNM and grow the business both in the UK and in Europe. And why the UK? I think it's one of the most competitive retail markets in the world. And for me, it's also a professional challenge to be successful here.