J Sainsbury plc

Good morning, everyone, and welcome to our 24-25 interim results presentation. Thank you for joining us today. I will start with a brief introduction, then Blunard will cover the financials before I go into some more detail on the strategic progress over the first half and the strong momentum we're taking with us into our peak trading season. Now, as you know, in February, we announced our three-year next level Sainsbury's strategy. As a reminder, here is our renewed purpose and the four strategic outcomes that we've set out which are driving this next phase of growth. First choice for food, our plan to deliver further grocery volume share gains by bringing more of our food range to more customers in more locations and attracting more bigger basket primary customers. Loyalty everyone loves, where we're building a world-leading Nectar loyalty platform and market-leading retail media capabilities. More Argos more often, taking action to grow frequency and spend in Argos to improve range and relevance whilst delivering further operating model efficiencies. And then underpinning all of these outcomes is our plan to save and invest to win by delivering another £1 billion of structural cost savings and investing in our capabilities across technology and infrastructure. Now we started our next level plan with great momentum in food and over the last six months we have continued to see our food business going from strength to strength. We believe there are three key factors that really influence where customers choose to do their grocery shopping. Quality, service and value. And we've got the winning combination. Our quality is outstanding, our service is consistently leading and customers are increasingly recognising our great value. We've seen the biggest ever improvement in customers' perception of our value over this period, up 8.5 percentage points year on year. And this has extended our lead over competitors in terms of overall customer satisfaction. And this is reflected in our continued market outperformance. More customers are choosing Sainsbury's for their big basket main weekly shop. Now, as you can see, the chart on the right shows that about three quarters of these new primary customers have been converted from secondary customers, moving from doing some of their grocery shopping at Sainsbury's to now doing most of it with us. But 25% are entirely new to Sainsbury's. And it's through winning these big basket shoppers that we are achieving the biggest market share gains in the industry against some tough comparatives and despite not being the biggest grocer in the market. And we're making the strongest net switching gains, too, of all retailers, as we continue to win from competitors across the whole market. Now, from our results today, it is clear that we have a strong momentum in our food business, with Sainsbury's profit contribution growth of 8.7% well ahead of sales. And the increasing confidence we have in the strength of our grocery offer has fuelled our investment in growing our supermarket coverage in key target locations. bringing the best of Sainsbury's to more people through the acquisition of 11 home-based stores and two co-op stores, which will open next year. And consistent with the commitment we gave in February, we're also returning more cash to shareholders. Now, we laid out these eight commitments as part of our next level Sainsbury's strategy. And as you can see, we're being ambitious in what we want to achieve over the life of this next level plan. As a team, we're very clear on the step up that we have to make in order to deliver against all of these commitments by March 2027. So six months in, we've made a strong start with improving customer satisfaction, food volume growth ahead of the market, and as a result, profit leverage from sales growth. And we have good line of sight on our financial commitments, building our competitive advantage through high returning investments, while still delivering our cost savings and retail free cash flow commitments. At an overall retail level, our H1 profit growth was held back by a tough first quarter at Argos. But consistent with what I have said right from the start of our Food First programme, we will not compromise the food business in order to offset weakness elsewhere. Now the consistent momentum in the Sainsbury's food business speaks volumes about how much this consistency in our proposition is really resonating with our customers. which is why we expect this to continue to feed through to the second half profit delivery, alongside a stronger Argos performance. So, we remain confident and focused right across the business in what we have to deliver, not just this year, but over the next three years. I'll now hand over to Blannett to cover the numbers in detail.

Good morning and thank you, Simon. I will now cover the financial highlights for the 28 weeks to the 14th of September. Starting first with a reminder of the financial framework slide that I presented at our capital markets day in February. This lays out our commitments to deliver profit leverage from sales growth, strong cash flows, higher return on capital employed and enhanced shareholder returns. Six months into this next level strategy, we are pleased with our progress. In the first half, we've delivered volume growth, profit leverage and continued strong cash generation. I'm delighted with the execution of our phased withdrawal from core banking activities, consistent with our focus on the core retail business having now signed three transactions with NatWest, Newday and Note Machine. Let's move on to our sales performance. Sales in Sainsbury's grew 4.6% in the first half, with the growth in the second quarter accelerating versus the first quarter. This was driven by grocery growth of 5%. where inflation was between 1% and 2% throughout the half, and we delivered a strong, consistent volume growth in both quarters, in line with our Capital Markets Day commitments. This is a key cornerstone of our financial framework. This was partly offset by Sainsbury's general merchandise and clothing declines of 1.5%. GM&C sales returned to growth in the second quarter, driven by Q2 clothing growth of 8.3%. August sales declined by 5% in the half, reflecting tougher than anticipated trading conditions in the first quarter, primarily driven by difficult weather comparatives and a reduction in online traffic. Sales picked up in the second quarter and have continued to be stronger in the earlier weeks of the third quarter, reflecting our action to improve traffic and volume trends, clearance activity and some better weather. This results in total retail sales growth excluding fuel of 3.1% in the half and 2% including fuel. Turning to retail underlying operating profit. H1 operating profit grew by 3.7% year on year to £503 million. This was driven by a strong increase in Sainsbury's contribution. up 8.7%, reflecting strong grocery volumes as we delivered operating leverage, with Sainsbury's margin up 20 basis points year on year. This was partially offset by the contribution from Argus being lower year on year, moving from a small profit to a small loss, driven by lower sales and heavier promotional activity and discounting, to ensure we exited the season with clean stock. We remain confident in delivering strong profit growth in the full year with continued leverage from Sainsbury's grocery volume growth and a stronger Argus performance in the second half when Argus typically makes most of its profit for the year. This, together with our continued growth in net-to-profit contribution and delivery of our cost-saving programme, means we continue to expect to deliver retail underlying operating profit of between £10.10 and £10.60 million, growth of between 5% and 10% year-on-year, unchanged from our previous guidance. Now moving on to profit leverage. We committed at our Capital Markets Day to delivering retail profit growth ahead of sales. As you can see from the left-hand chart, we have delivered total underlying retail operating profit growth ahead of sales growth in H1. Profit leverage in Sainsbury's was particularly strong, with Sainsbury's contribution growing 8.7%, well ahead of sales growth of 4.6%. The chart on the right shows the strength of our grocery volume performance, where we have delivered six consecutive quarters of volume growth. Moving now to financial services, we announced in January a phased withdrawal from core banking, that is loans, credit cards and deposits, and a move to a model where financial services that are complementary to the retail offer will be provided by third parties. We've announced several updates over recent months, which I will detail on the next slide. For now, this slide covers our underlying financial services performance. Underlying operating profit grew by 38% to £18 million in the first half. Growth was driven by lower expenses as we managed costs carefully, lower bad debts due to reduced new lending and growth in commissions income, partially offset by higher funding costs. For the full year, we now expect total financial services underlying profit of between 15 and 25 million, ahead of our previous guidance of an outcome of between break-even and 15 million profit. As a reminder of the recent changes in our financial services division, we've announced the sale of our loan and credit card portfolios to NatWest in June, and then the sale of our ATM business in September. And last week, we announced the sale of Argus Financial Services card portfolio to New Day alongside a new forward flow contract to provide financial services products to our Argus customers. We expect all of these transactions to complete in the first half of calendar year 2025. These transactions align with our focus on core retail business and on completion, Sainsbury's will benefit from income streams that are closely connected to our retail offer. In terms of what these transactions mean to the P&L, There will be a transitionary period during which ownership of the Argus credit portfolio will move from AFS to New Day. Once complete, we expect total annual income from financial services of at least £40 million to the group by the financial year ending March 2028. This comprises income from the New Day partnership together with the Commission's income from insurance, travel money, care and ATMs and is incremental to the retail operating profit. Importantly, We continue to expect Sainsbury's Bank to return excess capital of at least £250 million to Sainsbury's and we will return this capital to shareholders. We will provide an update on the timings for this with our results in April 2025. Moving on to underlying profit before tax. Total underlying profit before tax, inclusive of discontinued operations, grew by 4.7% in the first half. This was driven by higher retail operating profit and financial services profit, partially offset by increased underlying finance costs, mainly attributable to interest paid on the £575 million term loan taken out to facilitate the Highbury and Dragon transaction and was fully drawn this year. Underlying basic earnings per share were up 1.9% to 10.7 pence, with growth slightly behind UPBT growth given the higher underlying tax rate in the half. The next slide lays out our items excluded from underlying results. We incurred £225 million of non-underlying costs in the first half, with the large majority relating to the phased withdrawal from our financial services division. £155 million of costs sit in discontinued operations, primarily relating to losses on disposal and provisions for onerous contracts. We also recognise costs of £37 million in relation to the multi-year restructuring programme announced in November 2020. The majority of this programme has now complete. Non-underlying costs incurred are primarily non-cash. We expect retail cash costs of around £100 million for the full year, of which £29 million was booked in the first half. Turning to our cash flow metrics. Retail free cash flow of £425 million was down year on year mainly due to lower working capital inflows and a small increase in capital expenditure. Reduced working capital was driven by the timing of payables and partially offset by a focus on inventory reduction as part of our working capital programme. Net debt excluding leases reduced by £79 million versus H1 last year, with a slightly lower reduction in net debt including leases due to increased lease liabilities, primarily as a result of our acquisition of 11 home-based stores in the half. This table shows the key elements of the cash flow and the movements in net debt this year and last, with a modest increase in net debt during the half, reflecting £353 million of cash returned to shareholders. through the dividend and share buyback, as well as the impact of the home-based store acquisitions on lease liabilities. The other line movement of £102 million primarily comprises increased lease additions. We continue to expect to generate at least £500 million of free cash flow this financial year. Our core capital expenditure guidance of £800 to £850 million is unchanged, and we are now guiding to £25 million of strategic investment in our EV charging business. This is lower than the £70 million previously guided, but the impact on free cash flow of this lower EV spend will be offset by the least premium paid on the acquisition of the home-based stores. The majority of the capital expenditure in relation to the conversion of the former home-based stores will be incurred in financial year 2025-2026. Here we lay out our balance sheet metrics. Net debt to EBITDA remained flat at 2.6 times, broadly in the middle of our target range of 2.4 to 3 times. Return on capital employed increased to 8.5%. On to shareholder returns. We are proposing an unchanged interim dividend at 3.9 pence per share, in line with our policy of paying an interim dividend of 30% of the prior year's full-year dividend. We have completed the first tranche of our share buyback programme of £150 million and we will buy back a second tranche of £50 million in the second half, bringing our total buyback in the financial year to £200 million. In summary, we are pleased with our performance in the half. Looking forward, we expect continued strong momentum in the grocery business and delivery of a stronger second half profit performance from Argus. Therefore, we continue to expect to deliver retail operating profit of between £10.10 and £10.60 million for the full year, and at least £500 million of retail-free cash flow. Thank you for your time. I'll now hand back to Simon.

Thank you, Blanette. Let's now turn to look at the strategic highlights from the first half. I'm going to cover each of our four next-level outcomes in turn, starting with first choice for food. We're already making strong progress with this part of the plan, with the biggest share gains in the market for full trolley main shop customers. And we're demonstrating time and time again that customers can trust us for freshness, availability, leading quality and consistently great price. And this is giving customers increasing confidence through their big weekly shop with us. When we talked to our year-end results in April, I called out that we'd seen a real shift in customers' perception of value at Sainsbury's, and this has stepped on again. We always said it would take time, but the reality of maintaining a strong competitive price position is now consistently being appreciated by our customers, driving our biggest ever improvement in value perception with our progress well ahead of competitors. And this is at the heart of our continued market outperformance. As you know, we were determined that as we reset value during our Food First plan, we would also triple down on innovation and further build on our reputation for quality, which remains at the very core of the Sainsbury's brand. We're all about really good food, and we're continuing to set the pace on innovation ahead of competitors as we push forward further and faster to create amazing and delicious products that our customers love. we launched over 540 new products during the first half. More than 200 of these products were Taste the Difference. Our summer range this year was exceptionally popular with customers. As a result, Taste the Difference sales grew 18% as customers were inspired to put more of these new products in their baskets and trolleys. In fact, one in three baskets now contain Taste the Difference products versus one in four at the end of last year. And if we look at our big trolley, main shop customers, nearly two in three of their trolleys contain Taste the Difference, with customers choosing us when they want to treat themselves at home, whether that be a Saturday night in, for the big summer barbecue, or for all the big family occasions during the year. So we continue to lead in this space. Our premium own label performance is the strongest in the market. And we're seeing a standout performance in our fresh premium products with our growth significantly ahead of the market and all competitors. This outcome really demonstrates why we're so confident in our more for more plan, which I'll cover shortly. But before I do that, I want to take a moment to highlight the work we are doing to champion resilience in the food system. When we set out our next level plan in February, I made it clear that our ambition to be the first choice for food for many more customers will only be possible if we take a leading role in strengthening the reliability and sustainability of our food supply chains. And all of our customers really expect this of us, given our brand's heritage. So we're focused across our business on driving the change that's required and are using our skills in food innovation and food agriculture to think differently about our product and packaging. As you can see here, we've made further significant progress over the last six months. We're cultivating longer-term supplier relationships, particularly with British farmers and growers, ensuring that they have the confidence to invest in more sustainable practices to continuously improve animal welfare standards and to experiment with new farming practices. And we're working across industry and government to enable, lead and support the changes our food system needs to see. Ultimately, it is this work which ensures we have the confidence we need in food security and which underpins our plan to bring more of our food range to more customers. So turning now to our more for more plan. we have a unique opportunity to rebalance space in our supermarkets towards food and to drive grocery volume gains, whilst at the same time optimising our stores for a better customer experience, increased trading intensity and driving greater returns. As a reminder, we said in February that only 15% of our supermarkets carry our full food range. We have a very focused but agile program of investment, enhancing space, store format, and increasing digitization in a tailored way. But important to say here, there won't be a cookie-cutter approach to this. It is different for each store, and we are testing and learning using our lab stores such as Whitney and Cobham, using the learning selectively as we reshape more of the store estate. By allocating space away from general merchandise and clothing towards food, we will add around 300,000 square feet of food space in our supermarkets over the next three years. This will mean we can better serve customers and with better ranges, but there are also significant productivity improvements we can achieve as we reset our stores. Now the programme is back-weighted for this financial year. So as you can see on the right-hand side of this slide, the sales benefits build more meaningfully into next year and beyond. Alongside our more for more plan, our continued strong momentum and outperformance in our grocery business has given us the confidence to invest to further grow our supermarket coverage. Focusing on key target locations across the UK, where we don't already have a strong presence, we are delighted to have acquired 11 home-based stores and two co-op stores in recent weeks. These will be high-returning investments which will deliver rookie in the low teens. And all of these stores will open in our next financial year. If you additionally add in the supermarket openings that we had already planned for the remainder of this year and into the next financial year, we will in total be adding around 20 new supermarkets between now and March 2026. We're focused on delivering for our customers across all our channels, and looking at our performance in convenience, we've achieved sales growth of 5% over the first half, well ahead of the market. Now, building on this strong performance and consistent with our plan to become first choice for food, we have just delivered transformative change for customers across our convenience estate. In just two weeks, we have completely rebalanced space across all our convenience stores. This brings our ranges more into line with the type of customer missions being shopped in the different types of convenience store, and customers have already responded positively. And just this week, we've gone live with Aldi Price Match in convenience stores, available on the products customers buy most often. Nobody else in the market is doing this in the convenience channel. You know, when I think about what our team have achieved over the last few months, the recent changes in convenience stand out in demonstrating how far we've moved forward as an organisation, both in our ability to move and execute at pace, but also in our confidence to lead the market with really bold, new commercial propositions that are meaningful to customers. Such moves are taking us well ahead of the market. We're also continuing to strengthen our online and on-demand businesses. Sales grew 7% in our online channel over the first half, with improvements we have made to how we showcase our promotions and new products driving up basket size. You'll have heard me say before that customers make their choice about where to do their Christmas shopping in the early autumn. And so we're really encouraged by the strength of our customer satisfaction online heading into this Christmas, and especially the improvement in customers' perception of delivery slot availability. And our on-demand business continues to grow at pace too, and deliver more profit as we roll out the offer to more locations. I'm pleased to report that our two clothing performance stepped on in the second quarter, growing ahead of the market, driven by significant improvements in availability and style. Our women's wear ranges did particularly well over the summer and early autumn with sales growth of 10% and customers are already buying into our Christmas ranges, especially festive pyjamas. There's still more to do here though, with clear opportunities that we're getting on with to continue to improve availability and our essentials ranges. as well as in our kids and baby wear offering. Turning to Smart Charge, our ultra-rapid EV charging network. We've made good progress with our planned rollout, with Smart Charge now established in 62 locations, meaning we have more than 500 charging bays. And we've really progressed our tech capabilities in this space. Firstly, we've been able to link Smart Charge to Nectar, so that customers can collect points whilst they charge with us. And secondly, we've enabled access to fleet drivers who use fuel cards. These drivers account for around 60% of the EV market, so a really important customer group. Where we have been focused on rolling out to more locations, we have now shifted to focus on growing participation, furthering our tech capabilities and enhancing the customer offer. As a result, we're now expecting to reach around 70 locations by the year end, where we were previously targeting 100 locations. Next is loyalty everyone loves. And as you know, we've been supercharging the power of our Nectar offering, having launched Nectar Prices 18 months ago and continuing to scale our Nectar 360 business and retail media capabilities. At our prelims in April, we talked about the targeted capital we're investing in Nectar 360 to keep innovating and to lead the market. We are well on track with our plans to deliver at least £100 million of incremental profit contribution from Nectar 360 over the next three years. And as you can see on the right-hand side of this chart, this growth is being driven by our retail media proposition, which is attracting more and more advertising spend. Having launched Nectar Prices in April last year, participation in Nectar has continued to grow. And it is really building long-term loyalty, with 5 million customers now shopping Nectar prices every week. It has also been a very strong contributor to our overall value perception. But more specifically, the value that customers place on the Nectar scheme itself has also improved significantly, with customers feeling that it helps them to save every day. It's a year since we launched Your Nectar Prices on Grocery Online, and now 1 million customers are regularly benefiting from personalised offers. And we're continuing to evolve and advance our personalisation capabilities, extending the range and reach of these offers to customers. We are very excited about the recent addition of two large-scale new partners within our Nectar Coalition, including Marriott Bonvoy, the biggest hotel chain in the world. These partnerships demonstrate the real power of the Nectar Coalition. Alongside this, we continue to grow our agency partnerships and during the half, we have deepened our relationship with two of the big four media agency groups. And at the same time, we're also making strong progress in building the connected screen network across our store estate, enabling our customers to increasingly engage with dynamic digital content in store. Turning now to Argos and our plans for more Argos, more often. We've said many times that Argos is a business that can never stand still. And so the strategy that we laid out in February was all about the further transformation at Argos. We've built a business that is efficient and convenient for customers with a fantastic click and collect and delivery proposition. But we know customers could visit us more often and shop bigger baskets. We can drive more spend with better ranges and a better online experience. And we see further opportunity to make this business more efficient, driving out more costs as we refine the operating model and reduce stock levels. Now we're well on the way with this, and we've seen clear progress so far this year in extending the depth and breadth of our ranges, improving our digital experience and reducing our cost to serve. We had a particularly tough start to the year at Argos with poor weather in the early part of the summer, and online traffic declines caused by the regulatory change to cookie consents, which impacted volumes. As a result, our performance fell behind a weak market in quarter one, partially reflecting weak online traffic, but more significantly, our relatively high exposure to seasonal products and ongoing market weakness in big ticket demand, which hit our ASP. Now, as Blanna said earlier, this not only impacted sales, but also margins as we needed to clear seasonal stock. As you can see here, the quarter two performance was much better, coming back in line with the market as the weather normalised against easier comps, and we took action to regain online traffic and drive volumes. ASP was still down year on year, reflecting a still cautious customer, but we've been gaining market share in the furniture market, offsetting some of that. So where does that leave us for the full year? Well, the better trend of quarter two has continued into quarter three. Our online traffic trends are back on track and in growth year on year, and as you would expect, we have some strong trading plans for the peaks of Black Friday and Christmas. So, as we outlined in our statement today, this means we're looking for much more resilient profit performance over the second half of the year, the period when Argos typically makes most of its money. In terms of the improvements we're continuing to drive forward, we're optimising the way we shop to customers online, from search through to checkout. and making sure that Argos is more of a go-to brand for customers when they're searching online, and as a result, improving conversion when customers land on our website. We're delivering a more personalised experience, and we're improving our attached algorithms, driving up basket spend as we increase the relevance of the recommendations. And at the same time, we're also continuing to build our ranges in both strength and depth, We're bringing more specialist brands to customers with our stockless proposition, and we have many more new brands launching soon. We're getting more and more support from the biggest brands like Apple, Samsung, Sony, and Lego, particularly around new product launches. And we're partway through relaunching our own brands. We've launched made-to-order furniture for the first time and had a very good customer response. And we're relaunching Chad Valley and Bush, our toys and electrical own brands, next year. We've also reset our trading events with simpler but significantly more impactful promotions, really resonating with customers and driving improved value perception. We also talked in February about the opportunity to continue to improve the efficiency of Argos operations. Now, we've made good progress in the right sizing of the standalone store estate, and so we're now focusing on improving the operating model within our stores. We have a wide variance across our Argos stores, both in terms of their size and location, but also the way customers shop them as walk-in locations or for click and collect. So, we've been pushing forward with clustering Argos stores across the estate, tailoring our labour planning and operations to fit the profile of the store, and as a result, we've made like-for-like labour cost reductions of 8%. We've also made significant progress in reducing stock levels, which is a clear focus for us, and we'll make further gains here as our logistics and supply chain transformation programmes continue to deliver. All of the work we're doing towards next-level Sainsbury's is underpinned by Save and Invest to Win, our cost-saving programmes and our capital investment in infrastructure and technology that will make us more efficient and support our growth. We've made a good start with the cost-saving programme that we outlined in February, and we're on track to deliver £1 billion of cost reduction over the next three years. This will be more important than ever, given some of the headwinds that the budget has given us, and can be a real point of difference versus competitors who don't have the same track record and capability that we've built. And this particularly applies to competitors who aren't able to invest the capital necessary to transform efficiency and permanently reduce their structural cost bases. If you're eagle-eyed, you'll notice that the space of where we expect to generate cost savings over the next three years has changed. As we start to build out the delivery of our cost savings programmes, the reality is that the most significant part of our tech investment is driving productivity savings through the key cost lines, such as logistics and replenishment. Now we laid out these tech investment priorities in February. We're investing in our technology platforms to drive efficiency, to deliver better customer outcomes, and to support and sometimes drive growth. Three examples here. As you know, shrink is a significant challenge across the industry and it's something we're tackling more and more through tech solutions. We've trialled new capabilities which use video analytics to pick up errors in customer scanning and alert customers at self-checkouts and with great results. We're now rolling this out to around 200 stores by the end of this year. We've talked many times about optimising our checkouts, and we will have rolled out the future front-end changes across the whole of our supermarket estate by the end of this year. This programme has delivered very significant structural cost savings. But that won't be the end, with more innovation on checkout and payment to come, and already being trialled in further driving efficiencies and improving our customer experience. We've also announced a couple of months ago a significant partnership to transform our commercial systems, the platform that sits behind all of our products, pricing and promotions. This will simplify the processes that underpin the heart of our business, but will also allow us to be far more agile and flexible with our pricing and promotions going forward. We also talked in February about how we are unlocking savings differently and at scale. Our end-to-end cost transformation programmes are driving savings across the whole business, rather than through the traditional, more siloed programmes that reduce costs in particular divisions. Two examples here. We've rolled out machine learning-based forecasting across the supply chain for all of our food products. This has transformed the effectiveness of forecasting and the efficiency of stock holding and stock flow from the depots right through to shelves in our stores. Now, ultimately, stores are getting the right amounts of stock at the right time, reducing cost, freeing up warehouse space, reducing complexity, and simplifying the in-store replenishment process. And this is getting us closer and closer to the one-touch replenishment goal that we're striving for. And category resets can again be transformative. If we look at an entire product range properly managed from an end-to-end basis, right through from how we source products, to how they then arrive in store and to how we allocate space on our shelves. Here is a recent case study where we reset our soft drinks category, rationalising range but improving volume performance and increasing efficiency, allocating more space to the biggest selling lines and reducing our replenishment costs. From the moment we set out our food first strategy four years ago, we committed to transparency, showing the reality of where we are as a business, whether good or bad, outlining the challenges as well as the progress we've achieved. And this chart shows the reality of the balance we need to strike day in, day out. Paying our people well, maximising productivity, but never compromising on our customer service. As you can see, there's a lot to be proud of in what we've achieved here, but the challenge is also clear. As an industry, we are all facing into a big step up in labour costs next year. But we're confident that the momentum we have and our track record on getting the balance right puts us in a very strong place relative to our competitors. So in summary, looking ahead to the remainder of this year, we're travelling with great momentum into half two and Christmas. And there's plenty still to play for. We're winning in the market as more and more customers are choosing to come to us for their big shop. And so we're confident we'll be getting more share when customers do their biggest and most important food shop of the year. We're winning on quality service and value, and better than ever on trade up to taste the difference. And we're confident of a better Argus performance in the second half, given stronger online traffic trends and improving market share. All of which underpins the fact that we're still expecting underlying retail operating profit growth for the full year of between 5% and 10%. More broadly, we're six months into the next level strategy we set out in February, and we're reporting strong progress. We're continuing to outperform the grocery market despite some tough comps, and that volume growth is driving operating leverage. We're continuing to focus on transforming Argos, and we've made some good progress shifting the trading trajectory over the course of the first half. Together with continued strong growth at Nectar and support from cost savings, this is feeding through to profit and cash generation. And we're returning more of that cash to shareholders. It's a formula that all of our team are really confident we will continue to deliver. Now, before Bernard and I take your questions, we thought we would take just a couple of moments to share some festive magic with our Christmas adverts. Starring the BFG, Britain's friendliest grocer, and our Argus Christmas ad with Connie and Trevor too.