Marks and Spencer 2015 Annual Report Download - page 17

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GOVERNANCEFINANCIAL STATEMENTS
15
ANNUAL REPORT AND FINANCIAL STATEMENTS 2015
OUR PERFORMANCE OUR BUSINESS
FIND OUT MORE
Read about Our Plan on p09-13 Read more on Remuneration on p52-76
STRATEGIC OBJECTIVES
SALES
REVENUE
SALES GROWTH/
SPACE GROWTH/
ONLINE VISITS
GROSS MARGIN/
PROFITS
TOTAL ONLINE SALES REVENUE
INTERNATIONAL
SPACE GROWTH
UNDERLYING
OPERATING PROFIT
Defi nition Total multi-channel
revenue including web to home
and Shop Your Way transactions.
M&S.com sales returned to
growth in the fourth quarter and
we saw gradual improvement
across all key metrics.
Our website and distribution
centre are powerful engines
for growth. Our investment
in them will help drive online
sales growth and increase
online profi tability.
Defi nition Sales from
the International business
including retail sales for
owned business and
wholesale sales to
franchise partners.
Defi nition Year-on-year
increase in weighted
average selling space.
We opened 25 net new
International stores
this year.
Defi nition Year-on-year
increase or decrease in
operating profi t generated
by the International business.
Profi t was impacted by
macroeconomic challenges
in our Middle East region
and the weakening euro.
We see a long-term growth
opportunity across a
number of international
markets. We anticipate that
in the short term we will
continue to be impacted
by this year’s weakening
euro and challenging
macroeconomic backdrop.
OBJECTIVE KPI M&S.COM INTERNATIONAL
£636.5m3£1.1bn
-2.0% -5.7%
7.1%
£92.3m
-24.8%
1. For the year ending 2011/12 no restatement for the revised IAS 19 ‘Employee Benefi ts’ has been made.
2. For the year ended 2013/14, we have made adjustments to exclude a warehouse that is no longer under our operational control and include fi ve smaller
international warehouse locations.
3. M&S.com sales for the year ending 2014/15 are on a post store returns basis. M&S.com sales have been restated on a consistent basis for years 2011/12 to 2013/14.
Driving
growth
Reaching
customers
Improve
profi tability
Our plans for
the future
S
S
S
Linked to
remuneration
Total online sales £m
11/12 12 /13 13/14 14/15
473.2 530.4
649.2 636.5
International revenue £bn
11/12 12 /13 13/14 14/15
1.1 1.1 1.2 1.1
UK REVENUE
UK LFL SALES GROWTH
UK GROSS MARGIN
UK REVENUE
UK LFL SALES GROWTH
UK SPACE GROWTH
UK GROSS MARGIN
Defi nition UK GM sales
including retail sales for
owned business.
Customers recognised the
improvements in the style
and quality of our clothing.
Demonstrated improvements
with p ositive GM s ales grow th
in the last quarter.
Defi nition Sales growth
from those stores which
have been open for
12m onths.
Demonstrated
improvements with
positive GM sales growth
in the last quarter.
Defi nition Gross margin refl ects
the percentage of sales revenue
retained after incurring the direct
costs associated with producing
and transporting goods to a
saleable location.
GM gross margin improvement
was largely as a result of better
buying and sourcing, resulting in
an overall increase in profi tability.
We see a material gross margin
improvement opportunity,
with a more modest sales
growth opportunity. In the year
ahead we wi l l continue to
deliver gross margin benefi ts
through a combination of a
more direct approach to
sourcing and improved
trading capabilities.
Defi nition UK Food sales
including retail sales for
owned business and
wholesale sales to
franchise partners.
Our strate g y i s to be more
specialist and focus on
quality and innovation.
Through improvements
in availability and choice,
we made M&S food more
relevant to our customers,
more often.
Defi nition Sales growth
from those stores which have
been open for 12 months.
The Food division has seen
22 quarters of positive
like-for-like sales growth.
Defi nition Year-on-year
increase in weighted average
selling space. We continued
to grow our successful
Simply Food store format.
Defi nition Gross margin refl ects
the percentage of sales revenue
retained after incurring the direct
costs associated with producing
and transporting goods to a
saleable location.
Food gross margin was up as
we eliminated ine ciencies by
streamlining our processes.
We see a material sales
opportunity and a more
modest gross margin
oppo r tu n it y. We w il l continue
to exploit the opportunity
in our Food business –
maintaining our specialist
strategy and growing our
Food space.
For 2015/16, the
directors’
remuneration
targets will include
cash fl ow, GM UK LFL
sales, GM gross
margin, M&S.com
sales growth, and
International sales
and operating profi t.
GENERAL
MERCHANDISE
FOOD
£4.0bn
£5.2bn -2.5%
+3.4%
-3.1%
52.6%
0.6%
+2.9%
32.8%
+30bps +190bps
13/14 £4.1bn
13/14 £5.1bn
WEEKLY SITE VISITS
Defi nition Weekly visits
to our UK desktop, tablet,
mobile and app sites.
Over 7 million customers have
now registered on M&S.com.
6.1m
+10.9%