Preliminary Results 2020/21 Simon Roberts Chief Executive Officer Kevin O’Byrne Chief Financial Officer Agenda

01 02

Financial highlights Operational performance

4 J Sainsbury plc Preliminary Results 2020/21 Financials Operational Performance Appendix

Retail sales growth by category

Grocery General Merchandise Clothing Total Retail

FY Sales FY Sales FY Sales FY Sales growth1 up 7.8 % up 8.3% down 8.5% up 7.3 % 9.2% 8.5% 10.5% 1 7.6 % 4.2% 6.8% 0.4% 5.2% 7.4 % 7.1 % Q1 Q2 Q3 Q4 5.1% 7.2 % 7.6 % Q1 Q2 Q3 Q4 6.0% (7.5) % 7.3 % Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 (26.7)% Fuel 0.1% Exc. Fuel Inc. Fuel sales sales growth growth

1 Exc. fuel (39.1)% 5 J Sainsbury plc Preliminary Results 2020/21 Financials Operational Performance Appendix

Group performance overview

Retail Financial Services Underlying profit Statutory profit/ operating profit1 operating profit1 before tax loss before tax

down 22% down 39%

938 48 586 255

730 FY 356 19/20 FY 19/20 FY 20/21 FY FY FY 20/21 FY FY 19/20 20/21 19/20 20/21 (21) (261)

All figures £m

1 Underlying

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Group performance overview

Free cash flow Working capital Net debt Dividend movement excluding leases per share 1

up 28% down £539m 10.6p 10.6p 784 453 1,179 7.3 p 7.4 p

611 640 3.3p 3.2p FY 20/21

FY FY FY FY FY Interim Special Interim Final 19/20 20/21 19/20 19/20 20/21 19/20 20/21 20/21 20/21 (97) All figures £m

1 Special dividend in 2020/21 paid in lieu of final dividend for 2019/20 following the deferral of dividend decision. The total dividend paid in respect of each year is equal at 10.6p per share

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Underlying profit before tax

Retail COVID costs H1 H2 FY UPBT YoY movement £m 20/21 20/21 20/21 £m Colleague costs 1 (179) (139) (318) Operating costs 2 (84) (29) (113) 586 Other (28) (26) (54) Total Retail COVID costs3 (291) (194) (485) (208) Interest Retail (69) +47 356 Financial Services

19/20 UPBT 20/21 UPBT

1 Higher absence costs, pay for vulnerable colleagues isolating, front line colleague bonus 2 Customer and colleague protection measures, distribution costs, reduced rental income 3 Does not include business rates relief of £43m for closed Argos stores in FY20/21

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Financial Services: UPBT bridge

UPBT waterfall H1/H2 Split £m £m COVID 34 provision (H1) 48 H1 20/21 (21) H2 FY 19/20 Reduced Cost action 20/21 UPBT lending Funding FY 20/21 costs One-off Travel debt sale (H2) UPBT Money and ATMs

(55) Impairment impacts

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Financial Services: performance drivers and coverage

Customer assets Credit provisions Total Capital Ratio

£bn Unsecured lending Coverage Ratio % down 27% 4.9% 6.3% 7.4 £5.8bn 20.2 % £0.3bn 17.0 % 2.7 5.4 £4.4bn £0.3bn 1.9 Personal loans 2.0 1.4 Credit cards 1.9 1.3 Mortgages 0.9 0.8 Store cards Provisions FY FY FY FY FY FY 19/20 20/21 19/20 20/21 19/20 20/21 Gross unsecured lending

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Items excluded from underlying results

FY FY £m 2020/21 2019/20 Guidance

1 • Restructuring, impairment Restructuring programmes (423) (202) and integration one-off costs Impairment charges (Retail and FS) 2, 3 (220) (126) of £900m-£1bn from FY20/21 to FY23/24 (c. £300m cash). Of Financial Services transition and other (17) (29) this, £643m incurred in Of which cash £(54)m ATM business rates reimbursement 42 - FY20/21 IAS 19 pension income/(expenses) 6 19 • We expect to incur the remaining costs evenly over Property, finance and acquisition adjustments (5) 7 the next 3 years, including £125m of restructuring cash Total items excluded from underlying results (617) (331) costs in 2021/22

1 PY restructuring includes Property Strategy Programme and Retail Restructuring. Impairment charges and closure provisions relating to Argos store closures and logistics integration 2 The effect of COVID-19 and accelerated structural integration programme are deemed an impairment indicator in line with IAS 36. A full review has therefore been performed covering Retail and Financial Services assets 3 PY impairment charges were reported within the Property Strategy Programme

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Net debt and Retail free cash flow

FY FY £m – IFRS 16 basis 2020/21 2019/20 Working capital movement Net cash from operating activities 1,809 1,453 356 of which working capital movements 453 (97) 550 Capital expenditure (568) (599) Disposal proceeds 1 49 224 • Sainsbury’s stock Bank capital injections - (35) • Fuel payables Lease repayments 2 (506) (432) +£453m In-flow Retail free cash flow 784 611 • Trade payables Dividends paid on ordinary shares (232) (247) • Argos stock Other 3 (74) 35 Movement in net debt 478 399 FY20/21 working capital Opening net debt 4 (6,947) (7,346) 4 Closing net debt (6,469) (6,947) 1 Includes dividends received from JVs, net of JV capital injections. FY19/20 included £143m of dividends received following sale of British Land Of which: 2 Includes initial direct costs on right-of-use assets 3 Includes the net movement to lease liabilities, reflecting non-cash Lease liabilities (5,829) (5,768) additions in the period offset by payments made. Also includes cash Net debt excluding lease liabilities4 (640) (1,179) (539) impact of share purchases and share issuances. 4 Net debt definition excludes derivatives not linked to borrowings, and includes perpetual securities as debt 12 J Sainsbury plc Preliminary Results 2020/21 Financials Operational Performance Appendix

Retail free cash flow

Retail free cash flow £m £500m+ £500m+ average average 784

611

FY FY FY FY FY FY 19/20 20/21 21/22E 22/23E 23/24E 24/25E

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Balance sheet targets

• Previous net debt reduction of £750m+ from 18/19 to 22/23 updated to £950m+ Net debt exc. Lease liabilities1 reduction by 22/23 £m • Medium leverage reduction target: Net debt/EBITDA2 less than 3x 2,125 (£603m)

1,522 (£950m)+ 1,179

640 Target

FY FY FY FY FY FY 15/16 18/19 19/20 20/21 21/22E 22/23E

1 Net debt definition excludes derivatives not linked to borrowings, and includes perpetual securities as debt 2 Net debt (inc. perpetual securities) on a post-IFRS 16 basis divided by Group underlying EBITDA. Net debt/ EBITDA for FY20/21 was 3.4 times 14 J Sainsbury plc Preliminary Results 2020/21 Financials Operational Performance Appendix

Bridge to 21/22 UPBT

Drivers of 21/22 UPBT Guidance £m • 2021/22 UPBT ahead of • Ongoing COVID costs 2019/20, comfortable with • Colleague costs consensus of around £620m1 • Financial Services • Financial Services to return to profit in 21/22

586 • Net finance costs of around £340m-£350m, including around £290m-£300m lease interest • Sainsbury’s underlying profit • Argos underlying profit • Finance costs

19/20 UPBT 21/22 UPBT

1 Analyst consensus published on our website as at 9 February 2021 15 J Sainsbury plc Preliminary Results 2020/21 Financials Operational Performance Appendix

Summary and Outlook

Strong performance Outlook • Excellent execution through a challenging year • 2021/22 UPBT ahead of 2019/20, comfortable with consensus of around £620m1 • Strong, profitable digital sales growth in both Sainsbury’s and Argos • Average free cash flow £500m+ p.a. 3 years to • Offset by material COVID costs March 2025

• One-off costs reflecting accelerated ambition and change within • Upgrading net debt reduction target to strategy update £950m+ for four years to 22/23 (previously £750m+) • Good underlying free cash flow generation

• Stable dividend payment

1 Analyst consensus published on our website as at 9 February 2021 16 J Sainsbury plc Preliminary Results 2020/21 Simon Roberts Chief Executive Officer Financials Operational Performance Appendix

A year that has made us stronger

A year trading A strong operating A strong start Bolder choices, through COVID performance towards delivering bigger decisions, on our priorities good momentum Food First More competitive and Brands that Deliver better positioned for a rapidly changing retail Save to Invest environment

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Building momentum, closer to customers

12 million Increased Increased orders delivered to online delivery Uber Eats online delivery Market leading Product elderly and slots to Deliveroo slots to purchasing vulnerable 650,000 partnerships Safety CSAT 850,000 limits customers a week launched scores a week

Mar Apr May Jun Aug Sept Nov Dec Feb Mar

Closed 15,000 Reopened 12,000 £100m Over 50m cafes; meat, colleagues 383 seasonal roles Total thank you Smartshop fish and pizza redeployed Argos stores for Christmas payments transactions counters, From Argos, Habitat, Travel Money and to store in the year standalone colleagues Argos stores Convenience

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Strong digital platform, enabling scale transformation

Total Digital Groceries online Argos Digital Smartshop Nectar

Sales up Sales up Sales up Sales up Users up 102% 120% 68% 173% 2.9m 42% 3% 90% 30% 7.4 m C&C 3% 14% Delivery 12% 0.3% 60% 4.5m 22% 8% 14%

FY FY FY H1 FY FY FY FY FY FY FY 19/20 20/21 19/20 20/21 20/21 19/20 20/21 19/20 20/21 19/20 20/21

Digital participation 1 Digital participation 2 Digital participation3 Sales participation 4 Digital app users

1 Of total Retail sales exc. Fuel. Includes SmartShop sales 2 Of total Grocery sales 3 Of total Argos and Habitat sales 4 Participation in stores with handsets 20 J Sainsbury plc Preliminary Results 2020/21 Financials Operational Performance Appendix

Strengthened customer satisfaction

Supermarkets Online Customer satisfaction index1 Customer satisfaction index1

Availability Friendliness Speed Sainsbury’s Sainsbury’s +3% +7% +13% YoY 2 YoY2 YoY 2

Tesco Asda Tesco Morrisons Asda Morrisons

Q4 Q1 Q2 Q3 Q4 Q4 Q1 Q2 Q3 Q4 19/20 20/21 20/21 20/21 20/21 19/20 20/21 20/21 20/21 20/21

1 Supermarket and Online customer satisfaction %. Source: Competitor benchmarking survey. Rolling 12 weekly scores 2 Source: Lettuce Know 21 J Sainsbury plc Preliminary Results 2020/21 Financials Operational Performance Appendix

Growing ahead of the market

Grocery volume growth1 FY 20/21

12% Lidl

Morrisons 8% Total Sainsbury’s grocers Tesco Aldi Asda 4%

1 Nielsen Panel volume growth YoY. Total FMCG (excluding Kiosk & Tobacco), 6 March 20/21 52 week data. Market Universe: Total Outlets. 22 J Sainsbury plc Preliminary Results 2020/21 Financials Operational Performance Appendix

General merchandise growth, clothing momentum

Argos Sainsbury’s GM Clothing

18.1% 14.8% 4.2% 0.4% Q1 Q2 Q3 Q4

10.7% 10.9%

8.4% (7.5) % Q1 Q2 Q3 Q4 (5.4)% (6.9)% Q1 Q2 Q3 Q4 (9.3)% (26.7)%

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Driven by our passion for food

Together we serve and help every customer

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In the next 3 years we will transform our business We are clear on our priorities

• Better value and innovation • Customer and profit focus • Structurally lower operating costs to fuel investment in • Underpinned by buying • Supporting the core food the core benefits and lower cost business to serve • Cutting complexity and increasing pace of execution

Know and serve our customers Become better, use the power of Nectar net zero by 2040

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Delivering against our plan

Food back at the heart of Sainsbury’s Portfolio brands supporting food, delivering for customers and shareholders in their own right Structurally lower cost to sales ratio (by at least 200bps) Pursue partnerships or outsource where faster Robust profit delivery, consistent dependable cashflow 8 key metrics, consistent reporting, linked to incentives

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8 key metrics Delivering for customers and driving stronger financial outcomes

Operational Financial • Grocery market share performance • UPBT growth • Strong customer satisfaction scores • 200bps+ reduction in retail operating cost to sales • Maintain strong colleague engagement • Dependable retail free cash flow: £500m+ pa average • Deliver our Net Zero commitment • Increase Return on Capital employed1

1 ROCE: return divided by capital employed. Return is defined as a 52 week rolling underlying profit before interest and tax. Capital employed is defined as group net assets excluding the pension deficit/ surplus and excluding net debt. The average is calculated on a 14 point basis 27 J Sainsbury plc Preliminary Results 2020/21 Financials Operational Performance Appendix

• Improve real and perceived value • Deliver Net Zero commitment for money • Tailor price, proposition and operations • Increase innovation pace to catchments and local customers

• Better value and innovation • Grow Online capacity and extend • Adapt supermarket formats for routes to market changing role and to drive efficiency • Underpinned by buying benefits and lower cost • Expand physical points of distribution, • Focus customer service and to serve focusing on Convenience operational excellence on what matters for customers

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Delivering better value to customers: Price Lock

Price Lock Biggest ever Price Lock in Jan 2021 SKUs 2,500+ 2,500 SKUs 2,000 • Focus on stability of everyday prices • Primary customers 1,500

1,000

500

0 FY FY FY 18/19 19/20 20/21

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Delivering better value to customers: Centre of plate

Core, high volume investment

Halo driving categories • Focus on core own brand products, especially Fresh categories, e.g. Meat, Fish and Poultry • Primary customers

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Delivering better value to customers: Sainsbury’s Quality, Aldi Price Match

Sainsbury’s Quality, Aldi Price Match

250+ SKUs • Focus on Fresh: over 80% of volume • Low Prices and Entry Price Point • Secondary customers

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Early results: Significant improvement in value, strong customer response

Price index 1 Volume uplift3 Total Centre of plate2 FY 21 vs FY20 FY 21 vs FY20 Meat, fish and poultry vs improved improved up 50bps 600bps 15%

vs improved improved 280bps 890bps Pre- investment Post- investment

1 Value Reality. Jan-Apr 2021 vs Jan-Apr 2020; Edge by Ascential; internal modelling 2 Meat, fish and poultry 3 LFL volume growth of Q3 invested SKUs, pre vs post-investment, 8 weeks of post-launch data 32 J Sainsbury plc Preliminary Results 2020/21 Financials Operational Performance Appendix

Early results: Price investment driving volume uplift

Halo benefit from price investment Key drivers of halo

Net P&L position

Net price Halo investment Gross price Elasticity benefit investment benefit

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Food Innovation: Transforming new product development

Tripling innovation Delivering across Food First New own brand SKUs more than Trade Up Value Net Zero triple 1,900

600 Target FY FY 19/20 21/22

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Food Innovation: Spring / Summer launches

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Suppliers supporting innovation and value

Transforming supplier relationships: • Stronger partnerships • Increased investment behind Sainsbury’s • Higher volumes • Responsiveness to innovation

Top 10 supplier: “We have jointly demonstrated that we can launch projects at pace by taking complexity out”

“Sainsbury’s have been able to launch products in areas where they can differentiate their offer versus the other Big 4 and particularly discounters”

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Strong online market share gains

1 Biggest online market share winner Orders more than doubled Share of top 5 competitors

950,000 5.6% 6.0% 9.5% Morrisons Online 17.5% 18.7% 850,000 850k+ 14.6% Ocado orders 750,000 23.9% 20.6% 19.9% Asda Online 650,000

15.5% 18.1% 20.8% Sainsbury’s 550,000 Online 450,000 37.5% 36.6% 35.2% Tesco Online 350,000

250,000 FY FY FY FY FY 18/19 19/20 20/21 19/20 20/21

1 Source: Nielsen panel data , Value share of top 5 competitors 37 J Sainsbury plc Preliminary Results 2020/21 Financials Operational Performance Appendix

Unique breadth of online grocery options for customers

GOL GOL Chop Chop Deliveroo / Delivery Click & Collect Uber Eats

Stores 253 321 43 c.200 Cities & towns 98% UK population 98% UK population 17 37 Average basket size c.£100 c.£100 £30-£35 £20-£25

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Growing online momentum, growing profitably

Online sales Online sales growth

up 120% £3.6bn 147% 129% 123%

£1.7bn FY FY 87% 19/20 20/21 Q1 Q2 Q3 Q4

Online profit contribution Profit contribution margin

4 times 2 times

FY FY FY FY 19/20 20/21 19/20 20/21

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Stronger online grocery economics

Items picked per hour (IPH) Orders per van per day

+14% +13% -12% up +10% 38%

FY FY FY FY FY FY FY 16/17 17/18 18/19 19/20 20/21 19/20 20/21

Basket size Other operating cost/sales1

up down 13% 440bps

FY FY FY FY 19/20 20/21 19/20 20/21

1 Excludes labour, shrink and waste costs 40 J Sainsbury plc Preliminary Results 2020/21 Financials Operational Performance Appendix

We make eating well Healthier, tastier, affordable, easy more sustainable food and the best thing you’ve ever tasted cooked at home, enjoyed together Help everyone eat better

Because all of us could eat a little better No matter how much time or money people have

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Net Zero

Reduce Healthy & Reduce Reduce carbon emissions sustainable diets food waste plastic packaging within own operations for all by 50% by 2030 by 50% by 2025 to Net Zero by 2040 GHG emissions Healthy products sold Food waste Food plastic packaging Dow n YoY Flat YoY Dow n YoY Up YoY 3% 55.3% 16% 3%

down 14% from 18/19 baseline 19/20 baseline 19/20 baseline down 1.7% from 2018 baseline

• Value chain target: reduce absolute GHG emissions by 30% by 2030 • Working closely with our global supplier base to develop and meet their own targets • We will hold an ESG Day in June

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• Customer and profit focus • Supporting the core food business Focus on food, coalition Reduce cost to serve Deliver 5 year plan and data monetisation Improve profit delivery

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Nectar: strong digital platform, growing digital customer base

Digital Nectar Nectar360: delivering for suppliers 10m+ ambition million 7.4m+ 6 digital impressions served to collectors 119 thousand households with 7.78 % conversion to brand

Oct Mar £1.25 2019 2021 ROI

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Nectar: extending reach and strengthening the coalition

Integration of Argos Launch of British Airways partnership Argos Nectar spend participation ahead of plan

Linked Nectar accounts Actual

Forecast

Sep 2020 Mar 2021

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Argos: Over 3 million new customers

Broad-based growth Flexible fulfilment options Category size

Toys 6% 100%

Other 4% 80% Home delivery Domestic appliances 18% 60% Consumer electronics 33% 40% Click and Collect Home and furniture 18% (paid online)

Seasonal, sport, nursery 12% 20% Check & reserve 8% Gaming 0% Walk-in FY FY Sales growth, % -10 0 10 20 30 40 50 19/20 20/21

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Argos transformation: lower cost to serve by £105m

Standalone Argos stores Collection Local stores in Sainsbury’s points fulfilment centres

570 450 430 to 401 c.405 to 5001 336 4601 c.340 c.330 306 306 32 281

1011

FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY 19/20 20/21 21/22 23/24 19/20 20/21 21/22 23/24 19/20 20/21 21/22 23/24 19/20 20/21 21/22 23/24

1 exc. Republic of Ireland stores

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Argos 2021/22: prudent sales outlook, higher profits

Drivers of 21/22 UPBT £m Sales: Improved margin rate: • Caution on consumer spending proposition benefits • Focus on profitable sales and Cost transformation: categories • Reduced rent and rates • Disciplined promotional • Lower Habitat operating strategy costs • Catalogue • Check and Reserve

19/20 Argos 21/22 Argos operating profit operating profit

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Transforming Habitat reach and scale

• Habitat brought together with Increase in Habitat Mix Sainsbury’s and Argos

• Lead Home and Furniture 12% Home brand 31% 19% Branded • Over 1,000 new Habitat SKUs 19% • Improved market position for home and furniture 68% Habitat • Strong start: home and 50% furniture sales up over 30% in February Jan 2021 Sep 2021 % mix of SKUs

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A stronger clothing business

Online sales Strong full price sales growth +65% 18% +15%

8% Full Price (9)% Sales

FY FY Total 19/20 20/21 Sales Online participation FY 20/21 Sales growth

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Financial Services Material short term COVID-19 impact but on track to deliver FY24 strategic commitments

1 2 3 4 5 6 Stop putting Improve Financial Transform the Reduce risk Focus on cash into returns services cash cost base profile to group Sainsbury’s Financial generative customer base Services

No capital input Double UPBT 3; Upstream cash Cost to Income Mortgage Increase from the group1 double digit ROCE within 5 years2 c.50% 3 within acquisition ceased; connectivity and within 5 years 5 years stable balance value for group sheet

1 Subject to regulatory changes/ requirements 2 Subject to regulatory approval 3 On a Group contribution basis 51 J Sainsbury plc Preliminary Results 2020/21 Financials Operational Performance Appendix

Strong Financial Services platform

Customer NPS Over 77% Argos Financial top quartile for Banks Bank customers have Services funded over a nectar card £1bn Argos sales

Two thirds Bank 60% of Car and Home 98% of Storecard sales customers registered insurance customers through digital with online banking self-serve online channels

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Structural change to accelerate cost reduction • Reduce operating costs to fuel investment in the core • Transform our approach to costs and radically simplify our organisation • Structurally lower operating costs to fuel investment in • Reduce retail operating costs to sales by more than 200bps the core • Work with suppliers to drive value • Cutting complexity and increasing pace of execution

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Strategic cost reduction

Reduce retail operating costs/ sales % by 200 bps+ Accelerated cost saving plans £m • Addressing inflationary cost pressures and Retail op. costs/ sales % volume related increases • Meeting increased groceries online demand • Creating additional annualised capacity creating firepower to invest in the offer and drive returns • Key programmes underway

2017/18 2018/19 2019/20 2020/21 2021/22 2022/23 2023/24

Cost savings, £m Op. costs/ sales, %

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Ambitious cost programme on track

Key cost savings programmes Technology improvement Centrals & Organisation Marketing efficiencies Property rationalisation Integrated logistics & supply chain

Retail projects: • Argos transformation • Counters • Groceries Online • Waste • Shrink FY20/21 FY21/22

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Key cost saving programmes

£105m £70m-100m £60m Argos store transformation and Centrals and Organisation support costs Counters fulfilment model • Reduction of central support roles • Lower cost to serve • Store rationalisation • Office space reduced • Reduced waste • Local Fulfilment Centre programme • New ways of working

£150m 2020-21 2022-23 Supply chain and logistics Closure of Summer 2021: Supply Chain system four depots Closure of further depot transformation

FY FY FY FY 19/20 Oct 2020 20/21 Spring 2021 21/22 Spring 2022 22/23 Integration of Chill Start roll out of Integrated Closure of further depot Primary Distribution Transport Planning Network system

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Moving at pace to change the business

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Delivering for shareholders

Profit • Cost transformation: 200bp+ reduction in cost to sales inflectionProfit inflection • Working with suppliers to unlock value • Funding stronger food performance • 2021/22 UPBT higher than 2019/20 1

Profit • Reducing cost to serve and improving working capital High returning inflection 2 capital projects • Argos transformation capital cost £143m, annual cost reduction £105m • Logistics and infrastructure capital cost £209m, annual cost reduction £150m 2

Profit • £950m+ net debt reduction March 2019 to March 2023 inflectionStrong free cash flow • £500m+ average FCF for the three years to March 2025 • Sustainable, well covered dividend

1 2019/20 UPBT £586m 58 J Sainsbury plc 2 by March 2024 Preliminary Results 2020/21 Financials Operational Performance Appendix

8 key metrics Delivering for customers and driving stronger financial outcomes

Operational Financial Grocery market share performance UPBT growth Strong customer satisfaction scores 200bps+ reduction in retail operating cost to sales Maintain strong colleague engagement Dependable retail free cash flow: £500m+ pa average Deliver our Net Zero commitment Increase Return on Capital employed

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In the next 3 years we will transform our business We are clear on our priorities

Know and serve our customers Become better, use the power of Nectar net zero by 2040

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Guidance for 2021/22

Profit Finance costs • Group UPBT in FY21/22 to exceed level reported in FY19/20, comfortable with consensus • Net finance costs of around £340m-£350m, including around of around £620m1 £290m-£300m lease interest

Space Dividend • In FY21/22, Sainsbury's expects to open four supermarkets and around 25 new convenience • We expect to maintain a policy of paying a dividend covered 1.9x by stores, and to close around 5 supermarkets and around 25 convenience stores underlying earnings • In FY21/22, Argos expects to open around 70 stores in Sainsbury’s, and to close around 70 Capital expenditure Argos standalone stores • Core retail cash capital expenditure is expected to be around £700-750m in the 3 • The standalone Argos store estate will reduce to around 100 stores by March 2024, while the years to March 2024, reflecting investment in high-returning supply chain, number of Argos stores in Sainsbury’s supermarkets will increase to 430-460, and the logistics and infrastructure projects number of Argos collection points will increase to 450-500 Net debt and Cash flow Depreciation and amortisation • Expect non-lease net debt to reduce by at least £950m over the four years to 22/23 Expect depreciation and amortisation of around £1.2bn, including around £500m right of • • Expect to generate average retail free cash flow of at least £500m over three years use asset depreciation to FY24/25

Financial Services Pension • Financial Services expects to return to profit in FY21/22 • Cash contributions for 2021/22 are expected to be c. £76 million • No capital injections into the Bank are expected Leverage Items outside of underlying • Medium term leverage reduction target of Net Debt/EBITDA of less than 3x • Restructuring, impairment and integration one-off costs of £900m-£1bn from FY20/21 to FY23/24 (c. £300m cash). Of this, £643m incurred in FY20/21 Tax rate • We expect to incur the remaining costs evenly over the next 3 years, including £125m of • Expect an underlying tax rate in 2021/22 of around 25 per cent restructuring cash costs in 2021/22 62 J Sainsbury plc 1 Analyst consensus published on our website as at 9 February 2021 Preliminary Results 2020/21 Financials Operational Performance Appendix

Grocery sales growth by channel

Supermarket Convenience Groceries online Sales1 Sales Sales

119.6% FY 20/21

2.5%

FY FY 20/21 20/21 (9.4)%

1 inc. Argos stores in Sainsbury’s 63 J Sainsbury plc Preliminary Results 2020/21 Financials Operational Performance Appendix

Financial Services

FY FY Financial Services UPBT Group contribution basis 2020/21 2019/20 Change £m, Group Contribution Total income1 £350m £457m 23% 75 Underlying operating profit £(12)m £75m 116% 34 Customer lending2 £5.4bn £7.4bn £2.0bn Customer deposits £5.1bn £6.3bn £1.2bn 14 Active customers – Bank 1.8m 2.1m 14% (12) 14 AFS (recognised by Bank) Active customers – Argos FS 2.2m 2.2m 0% 27 9 AFS (recognised by Argos) Cost/income ratio 72% 66% 6% Bank Net interest margin3 3.5% 3.4% 10bps (35)

Bad debt as a percentage of lending4 1.8% 1.1% 70bps FY FY 19/20 20/21 CET 1 Ratio5 17.6% 14.1% 350bps

6 Total Capital Ratio 20.2% 17.0% 320bps 1 Net interest, net commission and other operating income 2 Amounts due from customers at the Balance Sheet date in respect of loans, 7 Liquidity Coverage Ratio 194% 145% 49% mortgages, credit cards and store cards net of provisions 3 Net interest receivable / average interest-bearing assets 8 Total Resource 2,015 2,226 9% 4 Bad debt expense / average net lending 5 Common equity tier 1 capital / risk-weighted assets 6 Total capital / risk-weighted assets 7 Liquidity coverage ratio 12 month average 64 J Sainsbury plc Preliminary Results 2020/21 8 FTE and contractors Financials Operational Performance Appendix

Financial Services: additional metrics

Savings blended rate Costs 1 Colleague costs % £m £m down 74bps down 16% down 21%

1.18 300 99 251 78

0.44

FY FY FY FY FY FY 19/20 20/21 19/20 20/21 19/20 20/21

1 Group contribution basis 65 J Sainsbury plc Preliminary Results 2020/21 Financials Operational Performance Appendix

Sainsbury’s sales area and store numbers As at 6 March 2021

Supermarkets Convenience Total Area Area Area (‘000 sq ft) Number (‘000 sq ft) Number (‘000 sq ft) Number Opening figures 2020/21 21,167 608 Opening figures 2020/21 1,898 807 Opening figures 2020/21 23,065 1,415 New stores 18 1 New stores 44 15 New stores 62 16 Closures (193) (11) Closures (18) (9) Closures (211) (20) Replacement stores - - Replacement stores - - Replacement stores - - Extensions / refurbishments / Extensions / refurbishments / Extensions / refurbishments / - downsizes (170) - downsizes 5 - downsizes (165) - Space optimisation - - Space optimisation - - Space optimisation - - Closing figures FY 2020/21 20,822 598 Closing figures FY 2020/21 1,929 813 Closing figures FY 2020/21 22,751 1,411

66 J Sainsbury plc Preliminary Results 2020/21 Financials Operational Performance Appendix

Sainsbury’s store estate As at 6 March 2021

Number of stores Argos and Habitat store numbers Sq ft Under 10,000 to 20,001 to 40,001 to Over As at New Disposals/ As at sales area 10,000 20,000 40,000 60,000 60,000 Total 7 March 2020 stores closures 6 March 2021 Convenience 813 0 0 0 0 813 Argos stores 570 1 (170)) 401 Supermarkets 45 118 193 178 64 598 Argos in Sainsbury’s 306 30 - 336 Total stores 858 118 193 178 64 1,411 Argos in Homebase 6 - (6) - Other - - - - Space by store size (‘000 sq ft) Argos total store numbers 882 31 (14) 737 Sq ft Under 10,000 to 20,001 to 40,001 to Over 1 (13) sales area 10,000 20,000 40,000 60,000 60,000 Total Habitat 16 - 3 (10) Convenience 1,929 - - - - 1,929 Collection points 281 35 306 Supermarkets 343 1,782 5,713 8,651 4,333 20,822 Total Argos and Habitat points of presence 1,179 1,046 Total stores 2,272 1,782 5,713 8,651 4,333 22,751

67 J Sainsbury plc Preliminary Results 2020/21 Financials Operational Performance Appendix

Sainsbury’s investment programme FY 2020/21

Supermarket Convenience

New stores New stores Closures Brackley Q3 Milton Wootton, Folkes Road Q2 Garforth Loc Q2 Greenwich, Banning Street Q2 Liverpool Bold St Q3 Refurbishment Leicester Square Q2 Eastwood Nottingham Road Local Q3 Hempstead Valley Q4 Camden, Abbey Road Q2 Swansea Gower Rd Loc Q3 Swindon - Tadpole Garden Village Q2 Hunters Hill Loc Q3 Closures Upper Heyford Camp Road Q3 Blackpool Whitegate Drive Loc Q3 Swindon Q3 London City Island Q3 Sale Washway Rd Loc Q4 South Harrow Q4 Banbury - Warwick Street Q3 Ruddington Wilford Rd Loc Q4 Portsmouth Q4 Bishops Waltham - Winchester Rd Q3 Staincliffe Loc Q4 Gloucester Q4 Midhurst - Bepton Rd Q3 Crawley Q4 Twickenham Station Q4 Bletchley Q4 Portsmouth Commercial Road Q4 Stockport Q4 Corby - Priors Hall Park Q4 Andover Q4 Hackney Wick - Wallis Road Q4 Olympia Q4 Hounslow West Station Q4 Clacton On Sea Q4 Northampton Q4

68 J Sainsbury plc Preliminary Results 2020/21 Financials Operational Performance Appendix

Retail margin As of 6 March 2021

FY FY £m 2020/21 2019/20 Change Retail sales (inc VAT, inc fuel) 31,854 31,825 0.1% Retail sales (ex VAT, inc fuel) 28,618 28,424 0.7% Retail underlying EBITDA1 1,909 2,135 10.6% Retail underlying EBITDA margin %2 6.67 7.51 84bps at constant fuel prices 6.60 7.51 91bps Retail underlying operating profit3 730 938 22.2% Retail underlying operating margin %4 2.55 3.30 75bps at constant fuel prices 2.52 3.30 78bps

1 Retail underlying operating profit before underlying depreciation and amortisation of £1,179 million. Following the adoption of IFRS16, EBITDA and EBITDAR are broadly consistent measures and so we are now disclosing EBITDA only in this table. Non IFRS 16 rental expense was £5 million in 2020/21 and £10 million in the prior year. 2 Retail underlying EBITDA divided by underlying retail sales excluding VAT 3 Retail underlying earnings before interest, tax and Sainsbury’s underlying share of post-tax profit from joint ventures 4 Retail underlying operating profit divided by underlying retail sales excluding VAT

69 J Sainsbury plc Preliminary Results 2020/21 Financials Operational Performance Appendix

Group retail

FY FY 2020/21 2019/20 Return on capital employed1 5.5% 7.4% Net debt to EBITDA2 3.4x 3.2x Fixed charge cover 3 2.4x 2.7x Underlying tax rate 29.5% 25.4% Core retail capex / sales4 2.0x 2.2x

1 ROCE: Return is defined as a 52 week rolling underlying profit before interest and tax. Capital employed is defined as group net assets excluding the pension deficit/surplus and excluding net debt. The average is calculated on a 14 point basis. 2 Net debt of £6,469 million includes lease obligations under IFRS 16 and perpetual securities treated as debt, divided by Group underlying EBITDA of £1,901 million. 3 Group underlying EBITDA divided by rent (both capital and interest) and net underlying finance costs, where interest on perpetual securities is treated as an underlying finance cost. 4 Includes retail sales inc vat ex fuel

70 J Sainsbury plc Preliminary Results 2020/21 Financials Operational Performance Appendix

Supplementary financial details

1. Weighted average number of shares 2. Dividend 3. Financial calendar FY 2020/21 was 2,210.0m (and 2,327.3m diluted) 2020/21 2019/20 Q1 trading statement 6 July 2021 (16 weeks to 26 June 2021) FY 2019/20 was 2,207.6m (and 2,470.0m diluted) Interim 3.2p 3.3p Interim results 4 Nov 2021 Final 7.4p - (26 weeks to 18 Sept 2021) Special - 7.3p1 Total 10.6p 10.6p1

The final dividend dates: Ordinary shares Ex-dividend 10 June 2021 Record 11 June 2021 Payment 16 July 2021

1 Special dividend in 2020/21 of 7.3p paid in lieu of final dividend for 2019/20 following the deferral of dividend decision. The total dividend paid in respect of each year is equal at 10.6p per share 71 J Sainsbury plc Preliminary Results 2020/21