Tesco – Assumptions Slide 1 © The Delos Partnership 2005

TescoAssumed Vision, Strategy & Priorities

Tesco – Assumptions Slide 2 © The Delos Partnership 2005

Key PeopleKey PeopleTerry Leahy became Chief Executive in 1997. Joining Tesco in 1979, he held a number of marketing and commercial positions prior to being appointed to the Board of Tesco PLC on 5 October 1992.

Richard Brasher Commercial and Trading Director was appointed to the Board on 15 March 2004. He joined Tesco from RHM in 1986. He has held a number of marketing, commercial and store operations positions, most recently Non-food commercial Director.

Andrew Higginson, Finance and Strategy Director was appointed to the Board on 17 November 1997. He is a member of the 100 Group of Finance Directors, Chairman of Tesco Personal Finance and Non-executive Director of C & J Clark Limited and BSkyB Plc.

Tim Mason47, Marketing, e-commerce, Property and Republic of Ireland Director was appointed to the Board on 16 February 1995. He joined Tesco in 1982. He is a Non-executive Director of Capital Radio plc.

Philip Clarke International and IT Director was appointed to the Board on 16 November 1998. Prior to his appointment he held a number of roles in store operations, commercial and marketing.

David Potts, Retail and Logistics Director was appointed to the Board on 16 November 1998. He joined Tesco in 1973. From 1997 he directed the integration of our businesses in Northern Ireland and the Republic of Ireland before returning to the UK in his current role in July 2000.

Tesco – Assumptions Slide 3 © The Delos Partnership 2005

5 Year Financials*5 Year Financials*

2001 2002 2003 2004 2005 2006 2007

Turnover £m 20988 23653 26004 30814 33974Pre tax profit £m 1054 1201 1361 1600 1962% operating profit/sales % 5.0% 5.1% 5.2% 5.2% 5.8%Return on Capital Employed % 15.3% 16.5%

Earnings per Share p 10.7 12.2 14 16.4 18.4 19.9 22Divdend per Share p 4.98 5.6 6.2 6.84 7.56

Intangibles £m 154 154 890 965 1044Fixed assets £m 9580 11032 12828 14094 15495Fixed investments £m 304 317 343 336 414

Stocks £m 838 929 1140 1199 1309Debtors £m 322 454 662 826 1002Cash, securities £m 534 670 638 1100 1146

Creditors short £m 4389 4809 5372 5516 6072Creditors long £m 2329 3181 4570 4961 5281

Mkt capitalisation £m 18197 17626 12159

Brokers Estimates

* Source Hemscott

Tesco – Assumptions Slide 4 © The Delos Partnership 2005

Tesco EuropeTesco Europe

Europe

Tesco's expansion overseas includes six countries in Europe: its business in the Republic of Ireland and five businesses in Central Europe.

The hypermarket format has been the focus of their Central European activities since 1994. At 50,000 square feet or more, hypermarkets have the space to offer customers extensive food and non-food ranges. More recently, they have developed into new formats, including compact hypermarkets and Express.

Tesco – Assumptions Slide 5 © The Delos Partnership 2005

Tesco International Strategy* Tesco International Strategy*

LOOKING FOR RETURNS…

• Commitment to expanding outside of the UK – Asia, Europe (West & East)

• Tesco's international sales leaped by about a quarter to £4.2 bn. in the first half of its financial year, within a 14 percent rise in overall sales to £18.8 bn.

* Source Andrew Higginson Tesco

Tesco – Assumptions Slide 6 © The Delos Partnership 2005

Tesco EuropeTesco Europe

European Country Year of Entry Number of Stores Sales Area (mft2) Planned Store Openings 05/06 % Increase

Czech Republic 1996 25 2.1 8 32%

Hungary 1994 69 3.5 14 20%

Poland 1995 78 4.2 20 26%

Rep. of Ireland 1997 87 2 6 7%

Slovakia 1996 30 2.1 6 20%

Turkey 2003 5 0.4 3 60%

TOTAL 294 14.3 57 19%

Tesco – Assumptions Slide 7 © The Delos Partnership 2005

Tesco 2005 Interims Tesco 2005 Interims

Key Numbers – Highlights

• Sales up 14.1%• Pre-Tax profit up 18.7%• On track to develop 17,000 new jobs• UK Deflation of 2% (Price Cuts for Customers) • Ireland – Good 1st Half. 3 New Stores in H1

2005 and 3 new planned for H2 2005

Tesco – Assumptions Slide 8 © The Delos Partnership 2005

Tesco Values Tesco Values

What they say *

• Customer – Lifetime Loyalty

• Going the extra mile

• Treat people the way we like to be treated.

• No-one tries harder for customers.

• We use simple processes so that shopping is Better for customers, Simpler for staff and Cheaper for Tesco.

• Every little helps…

* Source Tesco Website

What others might say **

• Getting smarter every day.

• Persistent and determined until they get what they want.

• Use their huge Purchasing power intelligently.

** Quotations from Sources with Tesco experience

Tesco – Assumptions Slide 9 © The Delos Partnership 2005

Tesco Europe ProfitTesco Europe Profit

2005 % Operating Profit/ Sales = 5.7%

Tesco – Assumptions Slide 10 © The Delos Partnership 2005

Assumed Tesco 2006/7 Priorities Assumed Tesco 2006/7 Priorities

• Geographic Sales increase

• Increased Market Share

• Customer Range, Choice & Value

• Operating profit improvement

• Costs / Restructuring

• Synergies & Processes