Shaping the
FUTURE
The next phase of M&S' transformation
STRONGER TEAM, STRONGER BUSINESS,
STRONGER BALANCE SHEET
Marks and Spencer Group plc
Annual Report & Financial Statements 2022
AT A GLANCE
M&S IS A LEADING BRITISH RETAILER, WITH A UNIQUE HERITAGE AND STRONG BRAND VALUES.
We operate as a family of businesses, selling high-quality,great-value,own-brand products and services, alongside a carefully selected range of third-party brands.
We do this through a network of 1,487 stores and
98 websites globally, and together, across our stores, support centres, warehouses and supply chain, our 65,000 colleagues serve over 30 million customers each year.
FOOD
p10
INTERNATIONAL
CLOTHING
-
HOME
p16
p24
PEOPLE
-
CULTURE
p26
Marks and Spencer Group plc
Cover
Inside M&S Stevenage, a strong example of how we're modernising our store estate to be fit for the future.
Group revenue
£10.9bn (19/20: +6.9%)
Basic earnings per share
15.7p | (19/20: 1.3p) |
No dividend paid for 21/22 |
APM
Alternative performance measures
The report provides alternative performance measures ("APMs") which are not defined or specified under the requirements of UK-adopted International
Group overview
Group profit before tax
£391.7m(19/20: +482.9%)
APM Group profit before tax and adjusting items
£522.9m(19/20: +29.7%)
APM Net debt excluding lease liabilities
£420m (19/20: -71.2%)
APM Adjusted earnings per share
21.7p | (19/20: +29.9%) |
Year-on-year comparison |
Percentage of UK Clothing & Home sales online
34% | (19/20: 23%) | |
Group: Net promoter score1 | ||
+29 | (new metric) | |
Digital: Net promoter score1 | ||
+5 | (new metric) | |
Stores: Net promoter score1 | ||
+81 | (20/21: 81) | |
REPORT STRATEGIC
Accounting Standards. We believe these APMs provide readers with important additional information on our business. We have included a glossary on pages 192 to 197 which provides a comprehensive list of the APMs that we use, including an explanation of how they are calculated, why we use them and how they can be reconciled to a statutory measure where relevant.
The impact of Covid-19 in 2020/21 renders comparisons to the prior year less meaningful. To aid understanding, throughout this document we are showing the 52 weeks to
28 March 2020 as the comparative period, unless stated otherwise.
Net promoter score
This year we launched a new Voice of the Customer programme, including Net Promoter Scores (NPS), which established a new measurement framework. This includes several new measures, including a M&S Group NPS metric, which for the first time provides a total view of our customers and a new Digital NPS metric, which tracks customer sentiment across M&S.com and our app. We will continue to benchmark our performance against the new framework in future reports.
Strategic report | Governance | Financial statements |
02 | Chairman's letter | 56 | Chairman's governance overview |
05 | Chief Executive's statement | 58 | Leadership and oversight |
07 | The next phase of transformation | 59 | Board composition and |
09 | Business model | meeting attendance | |
26 | People & culture | 60 | Our Board |
30 | Sustainability | 63 | Board activities |
31 | Non-financial | 65 | Board review |
information statement | 66 | Nomination Committee report | |
32 | Engagement & decision-making | 70 | ESG Committee report |
35 | Key performance indicators | 78 | Audit Committee report |
36 | Financial review | 85 | Remuneration overview |
45 | Risk management | 89 | Remuneration in context |
47 | Principal risks and uncertainties | 91 | Summary of Remuneration Policy |
95 | Remuneration report | ||
All references to sales, a new APM, throughout this | 108 | Other disclosures | |
document are statutory revenue plus the gross value | 113 | Independent auditor's report | |
of consignment sales excluding VAT. |
- Consolidated financial statements
- Notes to the financial statements
- Company financial statements
- Notes to the Company financial statements
- Group financial record
- Glossary
198 Notice of Annual General Meeting
- Shareholder information1
- Index
1. Shareholder information forms part of the Directors' Report.
Annual Report & Financial Statements 2022 | 01 |
STRATEGIC REPORT
CHAIRMAN'S LETTER
Dear shareholder,
Marks and Spencer ends the 2022 financial year at an inflection point in its history. Not only have we emerged from the pandemic a stronger business, but we are also at the end of the "fixing the basics" phase of our transformation. And we have a very dynamic new leadership team taking over from Steve Rowe,
our longstanding Chief Executive. Their mandate is now to reshape M&S
as a growth business capable of exploiting the power of our global brand.
I want to be clear that on doing so we are not declaring victory. Whilst we can now see more than glimpses of the potential in both Clothing & Home and Food, there are many aspects of both main businesses that require improvement,
''WE HAVE A VERY DYNAMIC NEW
LEADERSHIP TEAM TAKING OVER FROM
STEVE ROWE, OUR LONGSTANDING CHIEF EXECUTIVE. THEIR MANDATE IS NOW TO RESHAPE M&S AS A GROWTH BUSINESS CAPABLE OF EXPLOITING ''
THE POWER OF OUR GLOBAL BRAND.
new regulatory pressures notably on food content and store layout. In the next eight months we expect the strongest reduction in consumer real income for decades.
The test of the quality of a business is not whether it encounters storms, but how resilient it is to ride them out. Of course, a dramatic reduction in real income will impact our profits. But with the changes we have made, M&S is in much stronger shape and we start from a rising trend
in sales. We have moved to a faster, less hierarchical, more commercial organisation and culture. We are more digital and geared to an omni-channel future, with Clothing & Home online sales penetration double that at the outset of our transformation and the Ocado joint venture well positioned for growth.
Look Behind the Label
As part of our Plan A reset in September, we relaunched the iconic Look Behind the Label campaign, inviting customers to find out more about the action M&S is taking to do right by the planet.
Alongside this, customers were encouraged to visit our new hub through social channels, where we set out everyday actions customers can take to help reduce their carbon footprint.
02 Marks and Spencer Group plc
Our international franchises are in good shape and we are rapidly growing our "global" online business. Both our main UK businesses have achieved market share growth in recent months and are well placed on value.
We have strong new store formats
and a good pipeline of store relocations and rebuilds. Our balance sheet is commercially stronger than at any recent time.
So, our approach to the likely consumer recession will be unwavering. Our ambition is to become a growth business. M&S was founded in 1884 and we are striving to build a great business for the next
100 years. We expect to increase our investment in digital, technology and the store estate in the year ahead.
For that reason and because of the macroeconomic uncertainty, we are reserving our position on future dividend payments. There will come a time
to review the return of capital for shareholders, but it is not now.
I believe that the role of the Board in a transformation is not just to oversee good governance. It is to be the guardian of the strategy and values of the business, and the debating partner of the executive, and to be available to provide impartial advice to accelerate the transformation.
A good Board is an engaged Board. In the last year with the pandemic, the succession of leadership and other issues, we have had a stable team, robust discussion and great engagement.
This year, Andy Halford, who has now served nine years, will hand over Chairmanship of the Audit Committee to Evelyn Bourke and we expect to appoint a successor to his role as Senior Independent Director (SID).
Most importantly, Steve Rowe is leaving us after spending almost all his career at M&S, starting on the shop floor and rising to Chief Executive, leading the business through the last six years.
He has been heart and soul M&S and
goes with the thanks and affection of everyone in the business. He has helped us plan the succession to Stuart Machin as Chief Executive and Katie Bickerstaffe as Co-Chief Executive alongside Eoin Tonge as Group CFO & Chief Strategy Officer. They represent a very strong and balanced team with the experience
and energy to drive the next phase of change - "shaping the future".
Finally, M&S is a unique employee brand and the principles of equal respect, engagement and care of our colleagues run deep in our history. This year has been a testing one for everyone. Next year will be different but also challenging. We are deeply grateful to all our colleagues for their commitment, loyalty and hard work.
Archie Norman Chairman
REPORT STRATEGIC
Boosting our digital & data skills
To consistently deliver great products and services to our customers,
we need to be forward thinking and data driven.
Having the right skills, capabilities and culture across the business to harness the insights we generate isn't just a nice-to-have - it's a necessity for our transformation. Which is why we've been investing in the skills of our teams, with over 1,000 colleagues from across the business having been upskilled through our data skills pathway, which we launched in 2018 with retail's first ever data academy in partnership with Decoded. Today
we have four separate streams, including our most recently launched L7 Data Science & AI apprenticeship, all equipping our teams with the tools and skills they need to stay one step ahead of our customers. We want to establish our reputation as a data led organisation - and these programmes are a big part of how we're doing that.
Forward
THINKING
1,000+
Number of colleagues upskilled through our data academies
Annual Report & Financial Statements 2022 | 03 |
Attachments
- Original Link
- Original Document
- Permalink
Disclaimer
Marks & Spencer Group plc published this content on 31 May 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 07 June 2022 09:01:02 UTC.