Our business @ Asda October 7, 2013 England Contents • History of Asda pg. 3 • Business overview and financial information pg. 8 • Business strategy pg. 18 o Customers pg. 21 – Customer Pledges pg. 25 – Store formats pg. 31 – E-commerce pg. 33 o Colleagues pg. 37 o Communities and Sustainability pg. 40 o Shareholder Returns pg. 45 • Summary pg. 53 NYSE: WMT 2 History of Asda NYSE: WMT 3 History of Asda 1920s - 60s 1970s - 80s 1980s - 90s 1990s Asda can trace its roots back During this period, A major success of this Archie Norman arrived at to a group of Yorkshire Associated Dairies period was a partnership Asda in December 1991 and farmers in the 1920s. The first embarked upon a with George Davies and the quickly installed the Asda Asda supermarket opened programme of launch of George clothing in “Way of Working”. It provided under the Queens name in diversification; the business February 1989. a framework for a new Castleford in the early 1960s. now sold everything from organisation structure that In the 60s, brothers Peter and baked beans to motor cars! made stores the “heroes” and Fred Asquith contacted promoted colleague Associated Dairies and a new involvement. It was a new company was formed: dawn for Asda. Asda Asquith + Dairies = ASDA. rediscovered its core values and customers returned to a revitalised Asda that had gone back to its roots. NYSE: WMT 4 History of Asda 1999 Early 2000s 2008 - 2009 Walmart bought Asda, a Asda continued to meet Asda launched its non-food global brand committed to customers’ needs through online business, Asda serving its 200 million opening Asda Livings, Direct, which allows our 3 customers each week and introducing grocery online million customers to access keeping the promise of its shopping through over 30,000 products. founder, Sam Walton, ASDA.com, extending into “Saving people money to financial services and In 2009, the purchase of IPL help them live better.” This launching private brands. brought about the promise is delivered through combination of a better joint our EDLC=EDLP strategy In 2005, Andy Bond was sourcing of products such as that underpins everything appointed CEO. We started wine, olives, flowers and Walmart does. operations in Northern fresh produce, the Ireland and broke the 300 introduction of new global stores mark. merchandising centres; and removing the middlemen wherever possible. NYSE: WMT 5 History of Asda 2010 2011 2012 In May 2010, Andy Clarke The purchase of Netto 2012 saw the George brand go was appointed Asda CEO. stores and subsequent global with the launch of Under his leadership, Asda conversion programme saw George Franchise. The first has seen a strengthened the Asda Supermarket stores opened in the Channel focus on quality and price format grow to 180 stores in Islands and the Middle East. leadership, with the launch 2011, allowing customers to Alongside this, the George of Chosen by You and Extra complete a full weekly shop brand was exported through Special ranges. in a small store format, with other Walmart markets the same low prices including Argentina, Canada, 2010 also bought about the customers expect from an Chile, India, and Japan. Asda Price Guarantee, Asda superstore. which set a new benchmark The acquisition of GAAT, part for ‘low price’ promises in of a previous George supply the market. partner, has enabled us to create a seamless supply chain, with our sourcing division operating alongside buying and merchandising. NYSE: WMT 6 Asda today - 2013 Multichannel business Fashion fit for the And today... with scale highstreet In recent years, Asda has George has been changing Over 178,000 dedicated grown its status in the e- and the face of British fashion for Asda colleagues work in m-commerce world. over 20 years. As the first more than 573 stores, 29 Asda.com is Britain’s supermarket to launch its own depots, 9 recycling centres, second-biggest online clothing brand in 1990, George House and Asda grocer. Asda’s transactional George is now sold through House. Over 19 million apps for both Android and more than 551 Asda stores shoppers visit our stores iPhone customers are highly across the UK, and is the 3rd weekly. Asda voted Britain’s rated by the 1 million largest clothing retailer in the Best Priced Supermarket customers that use them. UK. It’s online business is for the 16th year running and And with free Wi-Fi in stores, growing rapidly and George is Supermarket of the Year for Click and Collect on grocery, now also a global brand, the 3rd year running in 2013. general merchandise and exporting the best of British clothing , it means design to 11 countries within customers can shop, buy, Walmart and standalone receive, anything, anywhere, franchise stores around the anytime – saving them time world. and money. NYSE: WMT 7 Business overview and financial information NYSE: WMT 8 Business overview Glasgow • 573 stores & 29 DCs 1 • 2012 sales - £22.8bn / US$36.2bn Leeds Manchester • 19.5m customers 2 • 17.3% market share 3 Birmingham • Over 178,000 colleagues1 London Notes: (1) As at 30th Sept 2013 (2) FY13 (ending 1/31/13) (3) Kantar (formerly TNS) Worldpanel, 52 weeks ended 15th September 2013, share of Grocer market NYSE: WMT 9 Store formats Supercentres • Brings together the best of Walmart and Asda • The widest range • Best value • Friendliest service in the business. • Attracts customers from further afield. Superstores • Core store format with the largest number of stores. • offer a wide range of food and GM Supermarkets • Perfect for shoppers in smaller towns and suburban areas. Asda Living • Dedicated to stylish clothing and GM • Products at affordable prices •Customers can buy from our entire non food range. Petrol Filling Station • Consistently low petrol prices • Asda fuel price checker allows you to instantly compare prices • Smart phone users on the go can utilize our app to check prices and find their closest Asda Filling Station NYSE: WMT 10 Financial trends 2008 - 2012 Sales (£billions) Market Share 24 22.8 17.6% 17.5% 21.8 17.4% 22 20.6 17.2% 19.9 17.2% 17.1% 20 18.6 17.0% 16.9% 18 16.8% 16.8% 16 16.6% 14 16.4% 2008 2009 2010 2011 2012 2008 2009 2010 2011 2012 Operating Margin Ex Netto 6.00% acquisition impact 5.00% 4.00% 3.00% 2.00% 1.00% 0.00% 2008 2009 2010 2011 2012 Underlying operating margin excludes technical assistance, services and royalties paid to Walmart and stock options charges or credits NYSE: WMT 11 Financials Five Year Summary * 2012 2011 2010 2009 2008 2007 Asda Data Sales (excluding VAT) (£bn) 22.8 21.8 20.6 19.9 18.6 16.9 Number of Stores 565 541 385 371 358 352 Asda Supercentre 32 32 29 29 29 26 Asda Superstore 314 309 304 296 289 282 Asda Supermarket 186 173 27* 22 19 19 Asda Living 32 27 25 24 21 13 George 0 0 0 0 0 12 PFS - Standalone 1 0 0 0 0 0 New Stores (Net) 24 156 14 13 6 17 Extensions 3 3 11 10 11 13 Total sales area (000s sq ft) 19,936 19,311 17,666 17,235 16,663 15,877 Added sales area (000s sq ft) 625 1,650 431 572 786 745 Weekly average sales per sq ft 21.97 21.75 22.40 22.16 21.47 20.47 Average number of colleagues 178,792 177,144 172,457 169,847 162,115 156,780 Average Transactions per week (000s) 19,211 18,024 17,407 17,104 16,300 15,625 Average spend per transaction (£) 22.80 23.30 22.70 22.30 21.90 20.80 Comp sales growth (ex petrol) 1.0% 0.5% 0.6% 6.5% 6.5% - Market Share 17.5% 17.2% 16.9% 17.1% 16.8% 16.8% * 12/31 Year End NYSE: WMT 12 Sales mix 75% 7% 7% 11% Food * General George Petrol Merchandise * Food includes health & beauty and non-edible consumables NYSE: WMT 13 Importance of private brands (own label) • Private brands make up a significant portion of Asda’s merchandise offering • UK customers love private brands NYSE: WMT 14 Own label brands - Food Extra Special - In November 2011, Asda announced its partnership with Leith’s School of Food and Wine and in Christmas 2012, the chefs at the world famous cookery school worked with Asda to create and develop a Leith’s Asda Extra Special range. Making quality accessible for all is at the heart of this partnership and builds on Asda using independent experts to taste and approve its food ranges. Chosen by you – Launched In November 2010, it was the biggest own brand re- launch in UK retailing history and a first to market which brought unique identity to the mid tier. Now two years old,CBY has over 7,000 products in the range and has completed over 800,000 individual taste tests, which have been carried out by more than 40000 consumers. Chosen By You is the fastest growing mid-tier range in the market, according to Kantar data. NYSE: WMT 15 Own label brands - Food Butcher's selection - Butcher’s Selection was introduced in July 2011. It was the biggest fresh meat launch in our history and part of Asda’s commitment to continuous innovation on quality. We have been awarded Retailer of the Year at the ‘Supermeat and Fish Awards’ for two years running. The beef in the Butcher’s Selection range is sourced direct from 8,500 farmers, and is hand-selected by Asda’s Master Butchers to ensure the meat is tender and succulent.