TOUGH MACRO ENVIRONMENT IN EUROPE
-1.0
-0.8
-0.6
-0.4
-0.2
0.0
0.2
0.4
0.6
0.8
1.0
1.2
Q3 Q4 2010Q1
Q2 Q3 Q4 2011Q1
Q2 Q3 Q4 2012Q1
Q2
%
GDP Growth
United Kingdom Italy Spain 0
1
2
3
4
5
6
7
8
Q3 Q4 2010 Q2 Q3 Q4 2011 Q2 Q3 Q4 2012 Q2
%
Bond Prices
United Kingdom Italy Spain
-35
-30
-25
-20
-15
-10
-5
0
Q3 Q4 2010 Q2 Q3 Q4 2011 Q2 Q3 Q4 2012 Q2
%
Consumer Confidence
United Kingdom
LOYALTY CURRENCIES AND CUSTOMER ANALYTICS REMAIN RESILIENT
Jun YTD vs YAGOBonus Points + 9% Jun
Jun YTD vs YAGOBonus Points+ 44% Jun
Jun YTD vs YAGOBonus Points + 84% Jun
Nectar UK partners using points aggressively
Nectar Italy - billings growth despite recession
ISS thriving in a growth industry
Q2 YTD 2012 +9%
UK Self Serveclients110 to 122
Jun YTDGross billings+ 18%
Internationalrelationships3 to 4
IMPROVING FINANCIAL PERFORMANCE
3.8%
7.4%
3.9%
5.2%
2010 2011 H1 2011 H1 2012
AEBITDA Margin %
AE Margin %
-19%
120%
55.9%
2010 2011 H1 2012
AEBITDA Growth
AEBITDA YOY% GrowthAEBITDA YoY% Growth
12.3%
5.1%
15.4%
21.5%
19.4%
13.0%
2011 Q12011 Q22011 Q32011 Q42012 Q12012 Q2
Gross Billings
YoY% Growth
2011 Q2 Q3 Q4 2012 Q2Q1 Q1
Adjusted for the impact of the VAT ruling, changes in the breakage rate, Italy launch costs and restructuring costsGB growth, AE% calculated in GBP; AE growth measured in Can$
DELIVERING ON OUR STRATEGIC PLAN
Renewals• Sainsbury’s• Homebase• HSBCExpanding coalition partners• British Gas• Original Marines• Unicredit
Mobile• Nectar, Sainsbury’s & BP
mobile apps• Location-based offersAnalytics• Enhanced Self Serve modules• Share of Wallet• Loyalty Self ServeCRM• Campaign Execution Tool• Offer engine
• VAT mitigated
• Improving leverage
• Strengthened commercials
STRENGTHEN CUSTOMER
RELATIONSHIPS
DRIVE INNOVATION
BUILD MARGINS
MOMENTUM FROM STRATEGY THROUGH TO EXECUTION
UK MEA OTHER
COALITIONLOYALTY
LOYALTYANALYTICS
PROPRIETARYLOYALTY
INCREASENECTAR’S
FOOTPRINT
DRIVE VALUE FORPARTNERS
GROWTHE MEMBER
BASE
MONETISEMEMBERSTHROUGH
INNOVATION
GROWTH DRIVERS OF THE NECTAR BUSINESS
SAINSBURY’S RENEWAL IN PARTICULAR SETS NECTAR UP FOR A PROFITABLE AND SUSTAINABLE FUTURE
“We have signed a new long-term contract with
Nectar to ensure we retain this source of
customer insight - a key competitive advantage”
JUSTIN KINGCEO Sainsbury’s
• Nectar at the core of Sainsbury’s marketing
• Joint Business Plan to drive value for both parties
• Contract renewal with improved terms
• Extended 7 year term
12
BRITISH GAS LAUNCH HAS EXCEEDED EXPECTATIONS AND DRIVEN GREAT RESULTS
“Our partnership with Nectar is delivering some great results.
55% of the customers that have joined us as a
result of Nectar fall within our highest value category and nearly two million of
our Nectar-collectors now self-serve, incentivised by points. Brand perceptions
have also benefited.”
WILL ORR, Marketing and insight director
CUSTOMERINCREASE
+2m
On-line account
INCREASE
+5
Net Promotor Score
13
ANNOUNCING OUR NEWEST PARTNER …
14
• Most visited retail website in the UK
• 17m unique monthly visitors
• Retail sales and peer to peer
• ‘Elephant’: top-5 partner
DRIVING VALUE FOR PARTNERS THROUGH CONNECTING THE DOTS
BUSINESS CHALLENGE ANALYSIS RESULTS
• Homebase wanted to understand the ‘headroom’ potential to grow customers’ spend
• This would enable more effective retention and spend stretch strategies
• First ever view of share of wallet across customer segments
• Targeted DM campaign to those with highest growth opportunity
• New headroom segmentation for more effective targeting and use of promotional spend
• Non-top customers with significant headroom behaving like top customers
15
WE’RE MOVING WELL BEYOND THE TRADITIONAL ‘TRANSACTION’ MOMENT INTO ‘INTERACTIONS’
RESEARCH
PRE-PURCHASE
PURCHASE
POST-PURCHASE
AWARENESS
Interactions
18
INCREASENECTAR’S
FOOTPRINT
DRIVE VALUE FORPARTNERS
GROWTHE MEMBER
BASE
MONETISEMEMBERSTHROUGH
INNOVATION
GROWTH DRIVERS OF THE NECTAR BUSINESS
20
SHOPPER MARKETING IS A KEY STRATEGY FOR DRIVING SALES
• Shopper marketing is about understanding how target consumers behave as shoppers throughout the total purchase journey
• ISS services currently provide the core of shopper marketing understanding and execution• The growth of shopper marketing as a whole continues at a fast pace
OUR INSIGHT OFFERING AND TARGETED MEDIA CHANNELS ARE GROWING STRONGLY
Targeted media channels utilise customer data colle cted via loyalty cards to deliver relevant, timely offers to shoppers on a one to one basis
EXAMPLES INCLUDE:-
The targeted nature of these comms enables the evaluation of campaign ROI – we know who was issued with offers and we can accurately track redemption rates
Used intelligently, targeted comms facilitate the building of highly valued relationships between retailer and customer
COUPON AT TILL DIRECT MAIL MOBILE
Our insight tools and capabilities utilise customer data collected via loyalty cards to deeply understa nd customer purchasing behaviour
EXAMPLES INCLUDE:-
The speed and flexibility of our primary insight tool, Self Serve, is widely recognised in the market place. This is complemented by a growth in our offering of insight advisory and consultancy services
SELF SERVE INSIGHTS CONSULTANCY
NON-TARGETED MEDIA INCLUDES OVER 20 CHANNELS
Non targeted channelsare more of a mass communication vehicle and customer data is not currently used in deployment
Traditional channels include:
IN STORE
AROUND THE STORE
AT HOME
THE NEXT GENERATION OF ISS IS UPON US
• We are creating a new business in the UK with Sainsbury’s that will accelerate the overall growth of ISS
• This new business is a natural development for our relationship with Sainsbury’s
• The partnership opens up lots of exciting new opportunities including
– New store targeted media channels
– A streamlined buy in process for CPGs
– Closer alignment with Sainsbury's strategic plan
• Long term revenue and profit growth is significantly enhanced by this new partnership
COMBINING TARGETED AND NON-TARGETED MEDIA PRESENTS REAL GROWTH OPPORTUNITIES
Shopper targeted Store targeted
BEHAVIOUR DRIVERS
SHOPPER SEGMENTATION
TARGETING STRATEGIES
COMMSCHANNELS
SHOPPER ACTIVATION PROGRAMME
ACTIVATION LOGISITICS
SHOPPER RESPONSE EVALUATION
Media evaluationMarket research
AIMIA, SAINSBURY’S, CPGs AND SHOPPERS ALL BENEFIT AS A RESULT OF THIS NEW PARTNERSHIP
Stronger relationship with Sainsbury’s and supply of wider range
of services whilstretaining IP
Stronger relationship& communications
with customers; capitalise on market growth opportunity
Unique opportunity
to drive ROI via integrated campaigns
Faster, more relevant environment
WE HAVE GROWN OUR INTERNATIONAL PRESENCE AND CONTINUE TO BUILD OUR GLOBAL BUSINESS
• ‘Store of the future’
• Category planning
• Coles Express
• Offer Engine
• Strategic consulting
• Fully launched
• Over 185 Sobeys users
• 12 CPG suppliers already signed up
• Customer Self Serve
• Embedded Self Serve into Category Management
• Review of commercialisation opportunities
NECTAR ITALIA DELIVERING RESULTS IN A TOUGH ENVIRONMENT
ITALY JUN 2012
GDP growth (0.7)%
Bond Yield 5.8 %
Unemployment 10.8 %
DELIVERY FOR PARTNERS
• Highest spontaneous awareness in market
• Newly acquired customers driving 1-3% Y1 sales growth
DELIVERY FOR MEMBERS
• Engagement – 12 cards swiped every second
• Customer Satisfaction 8.2/10
• Over €50m of rewards distributed to members
MIDDLE EAST SUCCESSFUL PROGRAMME RELAUNCH
AIR MILESMIDDLE EAST 2012 Q2
Change YoY
Points issuance(millions) 13.7%
Gross Billings +AED 24m
PROPRIETARY FOCUSED ON LOYALTY - MIDDLE EAST
Saudi Arabia’s largest
Leisure & Hospitality
Loyalty Program
Qatar’s largest
Telecom Loyalty
Program
MOMENTUM FROM STRATEGY THROUGH TO EXECUTION
UK MEA OTHER
COALITIONLOYALTY
LOYALTYANALYTICS
PROPRIETARYLOYALTY