Dr. Martens PLC

Annual Report (ESEF) • Jun 12, 2024

213800QPT8YM6NQZPH282023-04-012024-03-31213800QPT8YM6NQZPH282022-04-012023-03-31iso4217:GBPxbrli:sharesiso4217:GBP213800QPT8YM6NQZPH282024-03-31213800QPT8YM6NQZPH282023-03-31213800QPT8YM6NQZPH282022-03-31ifrs-full:IssuedCapitalMember213800QPT8YM6NQZPH282022-03-31ifrs-full:TreasurySharesMember213800QPT8YM6NQZPH282022-03-31ifrs-full:ReserveOfGainsAndLossesOnHedgingInstrumentsThatHedgeInvestmentsInEquityInstrumentsMember213800QPT8YM6NQZPH282022-03-31ifrs-full:CapitalRedemptionReserveMember213800QPT8YM6NQZPH282022-03-31ifrs-full:MergerReserveMember213800QPT8YM6NQZPH282022-03-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember213800QPT8YM6NQZPH282022-03-31ifrs-full:RetainedEarningsMember213800QPT8YM6NQZPH282022-03-31213800QPT8YM6NQZPH282022-04-012023-03-31ifrs-full:IssuedCapitalMember213800QPT8YM6NQZPH282022-04-012023-03-31ifrs-full:TreasurySharesMember213800QPT8YM6NQZPH282022-04-012023-03-31ifrs-full:ReserveOfGainsAndLossesOnHedgingInstrumentsThatHedgeInvestmentsInEquityInstrumentsMember213800QPT8YM6NQZPH282022-04-012023-03-31ifrs-full:CapitalRedemptionReserveMember213800QPT8YM6NQZPH282022-04-012023-03-31ifrs-full:MergerReserveMember213800QPT8YM6NQZPH282022-04-012023-03-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember213800QPT8YM6NQZPH282022-04-012023-03-31ifrs-full:RetainedEarningsMember213800QPT8YM6NQZPH282023-03-31ifrs-full:IssuedCapitalMember213800QPT8YM6NQZPH282023-03-31ifrs-full:TreasurySharesMember213800QPT8YM6NQZPH282023-03-31ifrs-full:ReserveOfGainsAndLossesOnHedgingInstrumentsThatHedgeInvestmentsInEquityInstrumentsMember213800QPT8YM6NQZPH282023-03-31ifrs-full:CapitalRedemptionReserveMember213800QPT8YM6NQZPH282023-03-31ifrs-full:MergerReserveMember213800QPT8YM6NQZPH282023-03-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember213800QPT8YM6NQZPH282023-03-31ifrs-full:RetainedEarningsMember213800QPT8YM6NQZPH282023-04-012024-03-31ifrs-full:IssuedCapitalMember213800QPT8YM6NQZPH282023-04-012024-03-31ifrs-full:TreasurySharesMember213800QPT8YM6NQZPH282023-04-012024-03-31ifrs-full:ReserveOfGainsAndLossesOnHedgingInstrumentsThatHedgeInvestmentsInEquityInstrumentsMember213800QPT8YM6NQZPH282023-04-012024-03-31ifrs-full:CapitalRedemptionReserveMember213800QPT8YM6NQZPH282023-04-012024-03-31ifrs-full:MergerReserveMember213800QPT8YM6NQZPH282023-04-012024-03-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember213800QPT8YM6NQZPH282023-04-012024-03-31ifrs-full:RetainedEarningsMember213800QPT8YM6NQZPH282024-03-31ifrs-full:IssuedCapitalMember213800QPT8YM6NQZPH282024-03-31ifrs-full:TreasurySharesMember213800QPT8YM6NQZPH282024-03-31ifrs-full:ReserveOfGainsAndLossesOnHedgingInstrumentsThatHedgeInvestmentsInEquityInstrumentsMember213800QPT8YM6NQZPH282024-03-31ifrs-full:CapitalRedemptionReserveMember213800QPT8YM6NQZPH282024-03-31ifrs-full:MergerReserveMember213800QPT8YM6NQZPH282024-03-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember213800QPT8YM6NQZPH282024-03-31ifrs-full:RetainedEarningsMember MADE STRONG DR. MARTENS PLC ANNUAL REPORT 2024 MADE STRONG SINCE 1960. Reflecting on a year of challenges, we stand firm in our belief that our fundamentals remain strong. Despite macroeconomic shifts, our commitment to building on our brand has remained unwavering. As we look forward to the year ahead, we will focus on relentless product innovation, compelling product marketing and expanding brand engagement across our key markets. Alongside this we will be laser-focused on cost efficiency and driving savings where possible. STRATEGIC REPORT Highlights 1 A strong sense of purpose 2 At a glance 4 Chair’s Statement 6 CEO’s Statement 10 Market review 14 Our business model 16 Stakeholder engagement and Section 172 Statement 18 Our strategy 22 Our strategy in action 24 Key performance indicators 30 Finance Review 32 Risk management and our principal risks 38 Viability assessment and going concern 44 Sustainability 46 Our TCFD disclosures 75 Non-financial and sustainability information Statement 84 GOVERNANCE Chair’s introduction to governance 86 Governance at a glance 90 Board of Directors 92 Governance Report 96 Global Leadership Team 100 Our stakeholders 101 Our culture 106 Nomination Committee Report 108 Remuneration Committee Report 116 Remuneration Report 119 Audit and Risk Committee Report 134 Directors’ Report 144 FINANCIAL STATEMENTS Independent Auditors’ Report 150 Consolidated Statement of Profit or Loss 160 Consolidated Statement of Comprehensive Income 161 Consolidated Balance Sheet 162 Consolidated Statement of Changes in Equity 163 Consolidated Statement of Cash Flows 164 Notes to the Consolidated Financial Statements 165 Parent Company Balance Sheet 208 Parent Company Statement of Changes in Equity 209 Notes to the Parent Company Financial Statements 210 ADDITIONAL INFORMATION Five-year financial summary (unaudited) 217 First half/second half analysis (unaudited) 219 Glossary and Alternative Performance Measures (APMs) 220 Shareholder information 222 Company information IBC drmartensplc.com Dr. Martens plc drmartensofficial EBITDA 1 £m £197.5M Constant currency: £205.7m 2023: £245.0m Launched new brand platform MADE STRONG Product Launch of our authorised REPAIR service in the UK PBT £m £93.0M 2023: £159.4m Wholesale revenues down 28% People 100% of our Tier 1 and Key Tier 2 suppliers CSR audited met our high standards 1 Pairs m 11.5M 2023: 13.8m Direct-to-consumer (DTC) revenue up 2% £533.1M Planet Sourced 93.5% of the electricity for our EMEA and UK operations from renewable sources Revenue £m £877.1M Constant currency: £904.7m 2023: £1,000.3m TRANSFORMATION OF OUR NORTH AMERICAN DISTRIBUTION CENTRE NETWORK Product Launch of our RESALE platform in the USA FINANCIAL HIGHLIGHTS OPERATIONAL HIGHLIGHTS SUSTAINABILITY HIGHLIGHTS 1. EBITDA – Earnings before exchange gains/losses, finance income/expense, income tax, depreciation and amortisation. 1. Audit results above 75% scoring for Tier 1, and above 70% for Key Tier 2, in line with Intertek Workplace Conditions Assessment scoring methodology. HIGHLIGHTS STRATEGIC REPORT 1DR. MARTENS PLC ANNUAL REPORT 2024 AT A GLANCE P4 OUR STRATEGY P22 What we stand for Our purpose is to empower Rebellious Self Expression. Our responsibility is to act as brand custodians. Our aim is to deliver long-term value for the business. This is where Dr. Martens is heading. This is what we’re working towards together. What we do The business is focused on executing its tried and tested DOCS strategy: DIRECT-TO-CUSTOMER FIRST  Weaimtobuildbrandequityanddrivemarginexpansion. ORGANISATIONAL AND OPERATIONAL EXCELLENCE  Weareinvestinginandimprovingourorganisation, operationsandITtoenablegrowthandunlockvalue. CONSUMER CONNECTION  Wearefocusedonacquiringnewconsumers anddrivingloyalty. SUPPORT BRAND EXPANSION WITH B2B  WeaimtomanageB2B,whichismadeupofwholesaleand distributors,holisticallyandpurposefullytosupportourbrand. A STRONG SENSE OF PURPOSE WHAT WE’RE WORKING TOWARDS 2 DR. MARTENS PLC ANNUAL REPORT 2024 TOGETHER STAKEHOLDER ENGAGEMENT P18 SUSTAINABILITY P46 ENVIRONMENT & COMMUNITIES SUPPLIERS PARTNERS OWNERS OUR PEOPLE CONSUMERS Who we work for Why we do it Therearethreecorevaluesattheheartof RebelliousSelfExpression.Theynever standalone,butworktogethertosupport whatRebelliousSelfExpressionisfor Dr.Martens.Ourvaluesare: BE YOURSELF  Wewantourpeopletodowhattheyare brilliantat.Beingthemselvesistheir superpowerandit’sthevaluetheybring toworkeveryday. ACT COURAGEOUSLY  Wewantourpeopletotrynewthings,let othersseeoursuccessesandmistakes, sowecanalllearn. SHOW YOU CARE  Ourpeopleshouldthinklikeanownerto advancethebrandfirstandcollaborate acrossfunctionsandregions. Dr.Martensisfocusedondeliveringsustainable andprofitablegrowthtodrivelong-termvalue forthebrandanditsshareholders: 3DR. MARTENS PLC ANNUAL REPORT 2024 STRATEGIC REPORT INVESTMENT CASE: OUR UNIQUE PROPOSITION Webelievethatourcompetitivestrengthsarewhatsetusapartandpositionustosucceedinarapidlychangingworld. MAIN-LINE AMP Originals 40% 5% Fusion 36% Casual 11% 14XX <1% Collabs Archive & Made In England ICONIC, GLOBAL BRAND TheuniqueDNAofthe1460 bootispreservedacrossall ourproducts,sittingatthecore ofourproductstrategy. BRAND-FIRST DTC-LED STRATEGY OurDOCSstrategyisabout sellingtomorepeople,through ourowndirect-to-consumer (DTC)channel. SIGNIFICANT MARKET OPPORTUNITY Weareaglobalbrandwitha focusonsevenprioritymarkets –UK,USA,Japan,Germany, Italy,FranceandChina. AT A GLANCE OUR UNIQUE DNA Ourproductrangeiscentredonouroriginalsandmadeupoftwogroups,main-lineandAMP. Kids (4%) Accessories (4%) A GLOBAL 74% brandawareness 15% averageannualDTCrevenue growthsinceFY20 85% ofrevenuesfrom prioritymarkets 4 DR. MARTENS PLC ANNUAL REPORT 2024 Owned and operated Owned and operated Distributors Owned and operated Distributors APPEALING TO A BROAD CONSUMER BASE Abalanceddemographicmix ofconsumersacrossallmetrics, includinggender,age,income levelandgeography. 1. The remaining 1% are those that don’t identify as male or female. ROBUST FINANCIALS Thebusinessgeneratesa stronggrossmarginandis highlycashgenerative. CUSTODIANSHIP CULTURE Dr.Martensculturehas ‘custodianship’atitscoreandwe arecommittedtostandingbyour beliefinleavingthingsbetterthanwe foundthemforthenextgeneration. SEE MORE ONLINE DRMARTENSPLC.COM/INVESTORS/INVESTMENT-CASE OUR MARKETS OurDOCSstrategyisaboutsellingmorepairsofboots,shoesandsandals, tomorepeople,throughourownDTC,inoursevenprioritymarkets. EMEA AMERICAS APAC OWN STORES 102 2023:8 THIRD-PARTY STORES – 2023:3 DTC MIX +8%pts 2023:+4%pts OWN STORES 61 2023:54 THIRD-PARTY STORES 4 2023:4 DTC MIX +8%pts 2023:+1%pts OWN STORES 76 2023:62 THIRD-PARTY STORES 70 2023:112 DTC MIX +10%pts 2023:+4%pts £431.8M revenue 2023:£443.0m £325.8M revenue 2023:£428.2m £119.5M revenue 2023:£129.1m BRAND ICON 43/56 1 % male/femalesplit 7% averageannualrevenue growthsinceFY20 FY40 Net-ZerotargetbyFY40 STRATEGIC REPORT 5DR. MARTENS PLC ANNUAL REPORT 2024 In last year’s Annual Report I shared my disappointment that, whilst we’d reached £1bn of revenue, growth had been below expectations and we’d made execution mistakes which had impacted our performance. TheweaknessintheAmericas performanceisinpartduetothewholesale- reliantnatureofthisbusiness,whichhas meantthatwidespreadcautionfrom wholesalecustomershashadasignificant impact.I’dcontrastthiswithourJapanese business,whereDTCaccountsforthe significantmajorityofourrevenueandwe hadamuchstrongerperformance.Aswe looktoFY25andbeyond,wemustensure thatwebuildbackinamoreresilientand sustainableway,withtherightbalance ofwholesalepartnersandaDTC-first approach,toreducetheimpactoffuture wholesalecycles. FY24hasbeenanotherdisappointingyear, withachallengingconsumerenvironment intheUSA,particularlyinourcoreboots category,combinedwithourbrand implementationinthismarketnotbeing asstrongasitshouldhavebeen. AtaGrouplevel,revenuedeclinedby9.8% (constantcurrencybasis)to£877.1m. Withintheseresultsthereisamixedpicture regionally,withEMEAandAPACrevenues broadlyflat,butAmericasseeinga significantstepdown.EBITDAof£197.5m comparedwith£245.0mlastyear.Profitwas furtherimpactedbyincreaseddepreciation andamortisationchargesasaresultofour ongoinginvestmentprogrammes,together withsignificantlyhighernetinterestcharges. PAUL MASON, CHAIR CHAIR’S STATEMENT DOING THE RIGHT THING 6 DR. MARTENS PLC ANNUAL REPORT 2024 Asourguidanceindicates,wefaceatough outlookforFY25,withourUSAwholesale customersnotexpectedtofullyrestockthis year,andinflationcomingthroughinour operatingcostbase,withouttheusual benefitofpriceincreasestooffsetatleast someofthiscost.Thisbackdropalso meansthatthereismoreuncertaintyaround ourfullyearoutturnthanisusuallythecase. Icanassureourinvestorsthatwewilllook todelivercostsavingsandefficiencies whereverpossible,whilstprotectingthe brandandourfuturegrowthprospects. Westillremainveryconfidentinthe headroomforourbrandinthemediumto longterm,andwewilltakeastepchangein ourbrandcommunicationstoensureour marketingisfocusedonourproductoffering, whichwillbeanimportantpartofreigniting bootsdemand,particularlyintheUSA. This was another disappointing year for our business in a challenging external environment. Against this backdrop, our brand remains strong and I remain exceptionally proud of the passion and dedication of our people. PAUL MASON Non-Executive Chair Governance Afewweeksagowewelcomedournew CFO,GilesWilson,followingtheretirement ofJonMortimoreinMarch.Gilesbringswith himawealthofexperience,havingbeenboth CFOandCEOatJohnMenziesplc,andhe joinedusfromWilliamGrant&SonsLimited, oneofthelargestglobalspiritscompanies. HeisanoperationallyfocusedCFOandhis timeinthebrandedspiritsindustryhasgiven himgoodgroundinginglobalbrands.Iam excitedabouttheexperienceandcapability hewillbringtothetopteam. Inlate2023wealsoannouncedthatIje Nwokorie,aNon-Executiveforalmostthree years,wouldbesteppingdownfromthe BoardtojointhebusinessfulltimeasChief BrandOfficer(CBO)inFebruary2024.This newlycreatedroleencompassesProduct, MarketingandStrategy,responsiblefor settingtheoverallbrandstrategy,visionand futuredirection.Ijeisabrandvisionaryand experiencedbusinessleaderandjoined usfromAppleInc.,wherehewasaSenior DirectorinAppleRetailsince2018.Prior tothisIjespent11yearsatglobalbrand consultancyWolffOlins,latterlyasCEO. Oxford Street store STRATEGIC REPORT 7DR. MARTENS PLC ANNUAL REPORT 2024 GILES WILSON CHIEF FINANCIAL OFFICER FINANCE REVIEW P32 WELCOME Can you tell us a little about your background? Havingqualifiedasachartered accountantwithPwC,Ispentthe earlypartofmycareerinfinance rolesforGallaherGroupPlcand CommercialEstatesGroup Limited.IthenjoinedJohn Menziesplcin2011,whereI spentalmostadecade,including asamainBoardDirectorinitially asCFOforfouryearsandthen subsequentlybecameCEO. Duringmytimethere,wedealt withavarietyofbusiness challenges,includingthefull Board-ledstrategicreviewofthe Group,leadingtoraisingequity viaarightsissuetofunda transformationalacquisition fortheAviationbusiness,to becomeoneofthelargestglobal aviationservicesbusinesses intheworld;thedecisionand executionofthedivestment oftheNewspaperDistribution businesstobecomeapureplay aviationbusiness;andfinally leadingthebusinessthrough initialphasesofCovidlockdown andsecuringthelong-term fundingthroughthis unprecedentedtime.Latterly, beforejoiningDr.Martens,Iwas theCFOofWilliamGrant& SonsLimitedforfouryears, oneoftheworld’slargestfamily ownedbrandedspiritsbusiness, ownersofgloballyrenowned brandsGlenfiddich,The BalvenieandHendricksGin. What attracted you to the role at Dr. Martens? I’velearntthroughmycareer thatworkingforgreatbrands alwaysgivesyouanadvantage, andtheopportunitythat high-marginbrandedproducts offer.LookingatDr.Martens, Iseeanincrediblywell-loved, durablebrand,withstronggross marginsandcashgeneration. Iwasalsoattractedbyhow underpenetratedthebrandstill isinmajormarketsglobally, suchastheUSAandJapan. Ihaveenjoyedmeetingpeople fromthebusinessandthe uniqueculture,wherepeople canauthenticallybethemselves andthrive,resonatedwithme. Finally,Ifeltthatmyexperience, particularlyasaPLCCFO, wouldaddvaluetothebusiness. What are your first priorities as you settle into the role? Weknowwehavedisappointed investors,missingourguidance severaltimesandimpactingthe leveloftrustthemarkethasin us.Whilstsomeofthereasons forthisareexternalforces outsideofourcontrol,weneed todoabetterjobcommunicating withourexternalstakeholders andlayingoutthefinancial metricswe’refocusedon deliveringthisyear.Youcanread moreaboutthisinmyFinance Reviewonpage32. I’llalsobespendingtime understandingthecostbase andinvestmentplansofthe business,toensurewe’re managingcoststightlywithout impactingourfuturegrowth potential. Moregenerally,I’mlooking forwardtogettingtoknowthe business,includingmeetingour peopleglobally,oursupplier baseandourwholesalepartners. We’re thrilled to welcome Giles, whose extensive experience across sectors, most recently in the branded spirits industry, together with his knowledge of the public markets, will be a valuable asset to the Board. PAUL MASON Non-Executive Chair 8 DR. MARTENS PLC ANNUAL REPORT 2024 CHAIR’S STATEMENT CONTINUED Inmid-April2024weannouncedthatFY25 wouldbeKennyWilson’slastyearasCEO. Aspartofanorderlysuccessionplan,and followingathoroughsearchprocess,the BoardwasdelightedtoannouncethatIje willsucceedKennyasCEO.KennyandIje willworktogethertoensureasmooth handover,withIjebecomingCEObefore theendofFY25.IjewillremainasCBOin themeantime,withhisfocusbeingonthe brandanddrivingdemandaheadofthe importantAW24season. KennywillhaveservedasCEOforalmost sevenyears,throughwhichthebusinesshas professionalisedanddeliveredsignificant growth.Kenny’sfocusonproduct,brandand custodianshiphasinstilledastrongculture throughtheorganisation.Iamgratefulthat Kennywillensureanorderlytransitionto IjeoverthecomingyearandIwillalsobe activelyinvolvedinhelpingtoensurethat thehandoverisasseamlessaspossible. Iamexcitedaboutthefuturecombination ofIjeandGilesandbelievethattheir complementaryskillsetsandexperiences willbeapowerfulforceindrivingthe businessforwardintheyearsahead. Moreinformationcanbefoundinour GovernanceReportfrompage85. People Iremainsoimpressedbytheresilienceand hardworkofourpeople,throughanother challengingyear.Withouttheirdetermination anddedication,wewouldnotbeableto serveourcustomerswithcareandpassion dayin,dayout;workcloselywithour partnersandsuppliersandcontinuetostep forwardinsustainability.I’dliketoexpress theBoard’sthankstoallofourpeoplefor theireffortsthisyear. Sustainability Ourproductshaveembodiedtimeless design,longevityanddurabilityforoversix decades,andsustainabilityisembedded acrossthebusiness.Thisyearwemade furtherstrides,withthelaunchofan authorisedrepairserviceintheUK,thelaunch ofReWair,ourdedicatedresalesite,inthe USAandthelaunchofourfirstproductsusing reclaimedleather,GenixNappa.Youcan readmoreaboutthesedevelopmentsand thewiderprogressagainstoursustainability commitmentsinourSustainabilityReport onpage46onwards. Dividend TheBoardrecognisestheimportanceof dividendstoourshareholders.Wehave proposed,subjecttoshareholderapproval, afinaldividendof0.99p,takingthetotal dividendforFY24,includingtheinterim dividendof1.56p,to2.55p.Whilstthisis ayear-on-yearreductiongiventhelower earningsachievedthisyear,the35% payoutforFY24isatthetopofthepolicy range.WearealsosharingthattheBoard’s intentionistoholdtheFY25dividendflat inabsoluteterms,beforereturningtoan earningspayoutinlinewithourdividend policy(of25%to35%payout)inFY26 onwards.Finally,we’remakingsome changestoourapproachtosettingthe interimdividendandpaymentdates,which youcanreadaboutintheFinancereview onpage32. Paul Mason Non-ExecutiveChair 29May2024 What will define success in the role for you? AsI’vejustdescribed,success inthecomingyearwillbestarting torebuildtrustandcredibilitywith ourinvestorbase,throughclear communicationanddisclosure, layingoutthenear-termmetricsto judgeusonanddeliveringagainst these.Lookingfurtherout,Iam excitedtoplaymyroleinthe continuedprofessionalisationof thebusiness,leveragingthecost basewhichwillenableusto unlockthegrowthpotentialahead. How do you feel about the growth potential of the business? I’dlongknownaboutthebrand havinggrownupintheUK, howeverasIgottoknowthe business,evenaftersuch strongtop-linegrowthoverthe pasttenyearsIwassurprised byjusthowmuchopportunity thereisinmajorcountriessuch astheUSA,Japan,Germany andItaly–tonamejustafew. It’simportantwegrowinthe rightway–withaDTC-first approach,supportedby enhancingwholesale.Asthe systemsinvestmentswe’re currentlyundertakingfallaway, thiswillfurtherdrivegrowth inprofitability. I am excited to be joining the Company at this time of transition and I am looking forward to working with the team to drive the strategy forward. GILES WILSON Chief Financial Officer STRATEGIC REPORT 9DR. MARTENS PLC ANNUAL REPORT 2024 asitshouldhavebeen.Inthenextsection wedetailthechangeswe’remakinginour marketingapproachandtheactionplan we’reimplementingtoreignitedemandin thismarket. InFY24wetookthestrategicdecisionto reducethebreadthanddepthofvolume weselltoEMEAetailers,whichreduced wholesalerevenuesinthisregion.The 11.8%EMEADTCgrowthisthereforemore indicativeofourunderlyingperformance, albeititwaspartiallyflatteredbytheearlier timingofEaster.WithinEMEA,our conversionmarketsofGermany,Italyand Spainsawstrongdouble-digitDTCgrowth andUKDTCgrowthwaspositive,although atalowerlevel.Japanmakesupthemajority ofourAPACregionandwesawcontinued goodgrowthinthislargelyDTCmarket. FY24wasachallengingyearforour business,withadifficulttradingenvironment andconsiderablemacroeconomic uncertainty.Ourlargestmarket,theUSA, continuestofacetwosignificantexternal headwinds,namelyweakconsumer confidenceimpactingspendinganda particularlychallengingbootssegment, whichwasdown17%fortheyearoverall (source:Circanadata).Thisresultedin widespreadcautionfromwholesale customers,leadingtoweakerwholesale orderbooks,aswellasimpactingourDTC (‘Direct-to-consumer’)performance.The USAhasthehighestwholesalepenetration ofanymajormarket,andthereforetheweak performanceherehadasignificantimpact onourbusinessoverall.Wehaveanew leadershipteamintheAmericaswhichisstill embedding,andourmarketingandtrading executionduringtheyearwasnotasstrong KENNY WILSON CHIEF EXECUTIVE OFFICER Our FY24 results reflect continued weak USA demand. This particularly impacted our USA wholesale business and offset our group DTC performance, where pairs grew by 7%. I am confident that the actions we are taking as we enter this year of transition will put us in good shape for the years ahead. 10 DR. MARTENS PLC ANNUAL REPORT 2024 CEO’S STATEMENT OUR CULTURE AND VALUES At Dr. Martens, we value integrity, teamwork, professionalism and passion, but Rebellious Self Expression is how we define what’s unique about our culture and our brand. Our people have the right to be themselves and express that self to the world. But in everything they do, they also need to think about how it impacts others and how they work together for the brand. This is the Dr. Martens manifesto for how our people live and lead through Rebellious Self Expression. This is our culture. ACT COURAGEOUSLY: Be bold, not reckless, and make mistakes in the open. We want our people to try new things and let others see our successes and mistakes so we can all learn. We strive together for progress, not perfection. We want our people to have the courage to challenge themselves and others. This means being relentlessly curious to understand others and challenging decisions constructively to help make better ones. Every voice matters but once a decision is made, we all stand by it. We can do anything, but we can’t do everything. We want our people to take responsibility for being both proactive and efficient: to adopt, adapt and invent in that order. SHOW YOU CARE: Success at DM’s impacts our consumers and shareholders as well as our people. They should think like an owner to advance the brand first and collaborate across functions and regions. Our people should put the consumer at the heart of their actions. DM’s are shaped by the people who wear them and our actions should always serve them first and foremost. Be direct and be kind. Difficult conversations are sometimes needed. We think about our impact, we are open to other perspectives while giving direct, factual feedback that aims to build someone up, not tear them down. We live and love the brand, including on our feet. Everyone at DOCS has a DM’s story and they tell it every day through showing up to work in their Dr. Martens. We believe we stand taller, prouder and together in DM’s. BE YOURSELF: We want our people to do what they are brilliant at. Being themselves is their superpower and it’s the value they bring to work every day. We value difference and diversity. While everyone’s moment of Rebellious Self Expression is different, all are equally valid and should be respected. SUSTAINABILITY P46 Weachievedsignificantsupplychainsavings throughtheyear,whichbenefitedgross margin.Thesesavingswereduetoour supplychaintransformationstrategy togetherwitharelativelybenignsourcing backdrop.Theongoingsupplychain transformationhassteadilyincreaseddirect controloveroursupplychaininputs,from around10%fiveyearsagotoaround70% today.Thishasenabledimprovedqualityand consistency,diversificationofriskfromsingle pointdependencyanddirectnegotiationof costs.ThesavingsdeliveredinFY24asa resultofthisstrategyincludelowercosts forkeycomponents,factorybenchmarking toalignprofit,re-negotiationofourinbound shippingcontractandoptimisationand re-tenderofretailoutboundfreight. Ourproductstrategyis‘iconsand innovation’,meaningthatweaimtogrow revenueofouriconiccontinuityproducts throughconstantinnovationaroundthis core,todrivebrandheatandnewness. Weaimtogrowallthreecategoriesof boots,shoesandsandalssimultaneously. Pairssolddeclinedby17%year-on-year, howeverthiswasentirelyduetoweakness inwholesaleorders,withDTCpairsup7%. Bycategory,DTCpairsforbothshoesand sandalsgrewmorethan20%year-on-year, whilstDTCbootspairssawasmalldecline. Growingshoesandsandals,alongside growingboots,isanimportantpartofour strategytobroadenourproductportfolio overthemedium-term,andwesaw particularlygoodsuccessduringtheyear withourmulesrangewithinsandalsand loaferswithinshoes.Wearesteadfastly focusedongrowingourbootscategory,with thisaccountingfor66%ofGrouprevenues inFY24. DuringAW23welaunchedacapsule collectionofournewAmpcategory:14XX. Ampand14XXrepresentsthepinnacleof ourcreativeexpression,withcutting-edge innovationattheforefrontwhilestill remainingtruetoourproducthandwriting anddesignprinciplesofdurabilityand versatility.Thecapsulecollection,built aroundouroriginal1460boot,1461shoe and2976Chelseaboot,sawencouraging consumerfeedbackandinAW24wewill launchalarger14XXrangetoconsumers. Thepurposeofthesecollectionsistocreate a‘trickledown’effect,creatingdemandfor themainlineproductrange. STRATEGIC REPORT 11DR. MARTENS PLC ANNUAL REPORT 2024 Collaborationshavealwaysbeenan importantpartofourproductstrategy,being anincubatorforfutureproductsuccessand scale,whilstalsodrivingbrandheat.InFY24 ourcollaborationsincludedapartnership withLagos-born,London-basedcollective Motherlan,whichreinterpretedour1461 shoe.Wealsoworkedwithstreetwearbrand GirlsDon’tCrywithourcreepershoe,which wasreleasedthroughourecommerce channelsgloballytogetherwithDoverStreet Marketlocationsandsoldoutworldwide within48hours.Aspartofourcelebrationof 10yearsoftheJadon,ourbiggestproduct withinourFusioncategoryandoneofour fouriconproducts,welauncheda collaborationwithfashion-forwardbrand Ganni,withahighimpactactivationeventin NewYork.Wealsoreturnedtoourhighly successfulpartnershipwithRickOwens,this timecreatingtwoiterationsofour1460boot togetherwithour18eyelet1918boot.These bootsstoodonourinflatedDMXLsolewhich originatedinour14XXrange.Exaggerating ourclassicconstruction,thesolecombines lightweightEVAwithdurablePVCpods. Thebusinesscontinuesona professionalisationjourney,ofwhichakey elementisthenextphaseofourtechnology investmentprogramme.Theprojects currentlyunderwayaretheCustomerData PlatformandtheSupplyandDemand PlanningSystem.TheCustomerData Platformwillgiveusasinglecustomerview acrossbothDTCchannels(retailand ecommerce),enablingmoretargeted marketingandconsumerengagement.The SupplyandDemandPlanningSystemisa modernandagileplanningsystem,whichwill improveavailabilityandaccuracyofproduct forecasting.Thiswilldrivemeaningful workingcapitalsavings,beginninginFY26. Alongsidethesetwoprojectswehavea numberofothertechnologyworkstreams underwaytoimproveourdatacapabilities, increaseourspeedofdecisionmakingand driveefficiency. Wecontinuetomakesignificantstridesin sustainability.OurScienceBasedTargets wereverifiedandapprovedbytheScience BasedTargetInitiativeinOctober.Wehave committedtoreducingourabsolute greenhousegasemissionsalignedwiththe ScienceBasedTargetsinitiativetoachieve near-termreductiontargetsby2030and NetZerobyFY40. InOctoberwelaunchedourAuthorised RepairservicetoconsumersintheUK. Theserviceenablesconsumerstorepair theirDr.Martensproducts,workingwith athird-partyrepairpartnerandusingour ownmachinesandmaterials.Consumer reactionsofarhasbeenveryencouraging andwewilllooktorollthisoutinourother keymarketsinthefuture. InMarchwelaunchedourownresale offeringintheUSA,namedReWair.We repairandrestoresecondhandDr.Martens productsandsellthemthroughadirectly rundedicatedresalesite.ReWairisan importantpartofourNetZerobyFY40 targetasthecarbongeneratedfroma resaleissubstantiallylowerthananew product.Althoughrelativelyearlydays, performancesincelaunchhasexceeded expectations,forbothrevenueand conversionrate,andwe’vehadhigh positiveengagementonsocialmedia. InlateMarchwealsolaunchedthree productsinGenixNappa,anewupper materialmadefromreclaimedleather. Thisisanimportantstepinoureffortsto achieveourtargetof100%ofproducts madefromsustainablematerialsby2040. Itisearlydays,howeverpressand consumerengagementhasbeenpositive. 100% Ourtargetistohave100% ofproductsmadefrom sustainablematerialsby2040 12 DR. MARTENS PLC ANNUAL REPORT 2024 CEO’S STATEMENT CONTINUED LOOKING TO FY25 AND BEYOND FY25willbeayearoftransitionforour business.InEMEAandAPACregionswewill continuetoexecuteoursuccessfulDOCS strategy,totakeadvantageofthesignificant whitespacegrowthopportunityinboth. Wecontinuetoseegoodbrandmetrics globally.Totalbrandawarenesshas increasedby2%to74%.InEMEA,ourkey conversionmarketsofGermany,Italyand Spaineachsawbrandawarenessgrowth of2-3%pts.OurhomemarketofUKsaw amarginaldeclineinbrandawareness althoughthisremainssignificantlyabove theGroupat92%.InJapanourbrand awarenessincreasedby1%ptsto53%, withcontinuedopportunitytoclosethe gaptotheGroupaverage. IntheUSA,wherewehaveseena disappointingtradingperformance,brand awarenessisflatat73%,howeverwehave seenameaningfuldeclineinconsideration fromconsumerswhohavenotpurchased Overrecentyearswehaveinvestedinthe businessandbuiltanoperatingcostbase inanticipationofalargerbusiness,andwith revenuesweakerwearethereforeseeing significantdeleverage.Alongsideouraction plantoreigniteDTCbootsgrowth,wewillalso beimplementingacostactionplanacross theGroup,ledbynewCFOGilesWilsonand theleadershipteam.Wewilltarget£20mto £25mofcostreduction,withsavingsfrom organisationalefficiencyanddesign,better procurementandoperationalstreamlining. WewillseethebenefitofthissavinginFY26, TheUSAremainsournumberonepriorityacrossthebusinessandweareimplementingadetailedaction plantoreturnthisbusinesstogrowth,targetingareturntopositiveDTCgrowthinH2FY25.Againstthis actionplanweareincreasingmarketinginvestmentasapercentageofrevenueintheUSAintheyear ahead,whilstensuringthatwemaximisethereturnandefficiencyofthisspend. Thekeypillarsofthisactionplanare: Marketing Wewillhavean‘alwayson’product marketingapproachtoicons,a re-energisationofbootsinAW24 andfourkeyseasonalbootstories toensurewedrivenewnessand excitement.Marketingspendwill beincreasedonmidtolowerfunnel activity,todriveconsideration. Digital Wewillimprovethequalityofour productdetailpagesandoptimise ourcheckoutprocesstomaximise ecommerceconversion.Wewillseek todrivemorequalifiedtraffictooursite, againtoimproveconversion.Finally,we willimplementanorderinstoreoffering. Wholesale Giventhenatureofwholesaleorder books,therewillbealagbetweenwhen weseeourUSADTCperformance improveandwhenourwholesale businesswillreturntogrowth.Our expectationisthatwewon’tseean in-marketrestockdrivingarecoveryinour USAwholesalerevenuesuntilAW25at theearliest,whichequatestothesecond halfofFY26.Wethereforeanticipate ourUSAwholesalerevenuedeclining double-digitpercentageinFY25.Through FY25,however,wewillworkwithkeyUSA wholesalecustomerstofocusactions ondrivingbootssell-throughinstore. USA ACTION PLAN recentlyandthereforeoureffortswillbe particularlyfocusedonbroadeningour appealtoattractnewconsumers. UnderthedirectionofIjeNwokorie,inhis currentroleasChiefBrandOfficer(CBO), weareshiftingourmarketingeffortsglobally fromstorytellingfocusedonculturetoa relentlessfocusonproductmarketing.Our AW24marketingwillleadandbedominated bybootsandthemarketingorganisation hasbeenreorganisedtoproduct-led marketing,centredaroundicons. withtheFY25benefitlikelytobeimmaterial duetothecostsofimplementation.Further detailsandaprogressupdatewillbeprovided atourfirsthalfresultsinNovember. Kenny Wilson ChiefExecutiveOfficer 29May2024 STRATEGIC REPORT 13DR. MARTENS PLC ANNUAL REPORT 2024 MACROECONOMIC TRENDS SOCIETAL TRENDS Market context Expressions of identity Expressionsofidentityoftoday’s consumersaremorefluidthanever,andour productsprovideablankcanvasthrough whichconsumerscanexpressthemselves. Weprideourselvesonbeingademocratic brandwhichempowersconsumers. Sustainability Sustainabilityisanincreasinglyimportant factorwhenconsumersmakepurchasing decisions.Thisincludesproduct considerations,end-of-lifeoptionsanda brand’swiderimpactontheworldaroundit. How we are responding Ourproductsandbrandarewell-positioned againstabackdropofsignificantsocietal shiftsincludinggenderfluidityandthe casualisationofdresscodes.Ourproducts arepredominantlyunisexandtherefore inclusivetoallgenderidentities. Furthermore,ourtimelessproductsareworn byallagegroupsandformultipleoccasions, makingthemextremelyversatile. Thisyearwelaunchedtwonewsustainability initiatives,authorisedrepairintheUK, whichallowsconsumerstorepairtheir wornDr.Martensproducts,andReWairin theUSAwhichallowsconsumerstobuy second-handrestoredDr.Martensfootwear andbags.Consumerreactiontobothhas beenveryencouraging. AttheendofFY24wealsolaunchedGenix Nappa,ourlatestmaterialinnovation madefromreclaimedleatheroffcuts,with ourthreemosticonicproductsnowbeing availabletobuyusingthismaterial. Opportunities • Rolloutofbothauthorisedrepairand ReWairtoothermarketsinthefuture. • Weareworkingtodevelop,testand trialothersustainablematerials. Readmoreonpages57,58and59. MARKET REVIEW Market context Consumer confidence Theglobalmacroeconomicenvironment remainschallenging,withweakconsumer confidenceandcontinuedhighinflation impactingbothourcostsandconsumers’ discretionaryspending.Asaconsumerbrand, thisrepresentsadifficulttradingbackdrop. Inflation Acrossthemediumtermwepriceto broadlyoffsetinflation,withindividual pricesbymarketsetutilisinganin-depth pricingelasticitysurvey.Havingincreased pricesinrecentseasonswearebroadly holdingpricesflatforFY25,andthismeans thatinflationarycostincreaseswillimpact ourfinancialperformanceinamore significantwaythanistypicallythecase. How we are responding Wecontinuetoexpecttheconsumer backdroptoremainweak,particularlyinthe USA.Weareimplementinganactionplan toreigniteourperformanceinthismarket. READ MORE P13 Withinflationimpactingourcostbasewe willdoallwecantotightlymanagecosts anddriveefficiencies. Globallywecontinuetoviewthebrandas underpenetrated,presentingasignificant futuregrowthopportunity.Wewillcapture thisopportunitythroughatargetedstore rolloutprogramme,focusedmarketing anddigitalinvestmentandworkingwith wholesalepartnerstodrivebrand awarenessanddeliverincrementalrevenue. Opportunities • Althoughstillelevated,theinflationary backdropisimproving,whichshould lessentheimpactonbothourcost baseandconsumerspending. • Inamorechallengedconsumer backdropitistypicallyversatile, long-lasting,high-qualitybrandsthat outperform.Ourproductmarketing aimstoreinforcethedurable, high-qualitynatureofourproducts toconsumers. MARKET TRENDS AND OPPORTUNITIES 14 DR. MARTENS PLC ANNUAL REPORT 2024 RE-ENGAGEMENT WITH PHYSICAL SHOPPING +6% Retail revenue growth in FY24 Consumer confidence Thewidermacroandconsumer environmentintheUSAhasbeen challengingthisyear.AccordingtoThe ConferenceBoard,theconsumer confidenceexpectationsindex 1 continued tofallinMarch2024.Expectationsforthe nextsixmonthsshowthatconsumers remainconcernedovercostoflivingand thepoliticalenvironmentintheUSA. Lookingforward,ongoinggeopolitical uncertaintytogetherwiththepresidential electioninNovembermeanthatwe expectthisbackdroptocontinue. USA boots market Inadditiontoaweakconsumer,theoverall bootsmarketsegmentintheUSAhas beenchallenging,withourperformance broadlyinlinewiththissegment.Bootsare ourbiggestandmostprofitablecategory, andtherevenuedeclinehasthereforehad asignificantimpactonourUSAbusiness. Market context Consumers returning to stores Thetrendofconsumersreturning tophysicalshoppinghascontinued throughFY24,withourretailchannel outperformingecommercedespitefootfall stillbelowpre-Covidlevels.Ourstores enableustoshowcasethedepthofour brandandthebreadthofourproduct range,withourexperiencedin-store teamsactingasbrandambassadors. The role of opinion-leading wholesale stores Wepartnerwithsomeoftheworld’smost influentialmulti-brandwholesalepartners. Ourproductsbeingshowcasedinthese storeshelpstofurthergrowbrandequity andelevateourpositioninginthemarket. How we are responding Havingbeguntheyearwith204stores, wehaveopenedafurther46andclosed 11.Thistookourtotalretailstoresto239 Caution amongst wholesale customers Theweakerconsumerbackdrop,combined withaparticularlychallengingbootsmarket, meansthatweareseeingwidespread cautionfromwholesalecustomersleading atyearend.Ourstorerolloutprogrammewill continuethroughFY25withafocusonEMEA conversionmarketsandJapan. Wecontinuetoattractandpartnerwith leadingwholesalepartnersglobally. Wealsoaimtoworkcloserwiththem incertainmarkets,forexamplewith exclusivecollaborations,in-storeevents andmarketingcontent. toweakerorderbooks.Wearewell positionedforwhenUSAsentiment improves,drivingUSAwholesale customerstorestock.Readmoreinthe CEO’sStatementonpages10to13. Opportunities • Withtrafficstillbelowpre-Covidlevels acrossmanystores,wearefocused ondrivingin-storeconversion. • Rolloutofomnichannelincontinental Europeexpectedtodrivefurther growthandengagement. Market trends in the USA 1. Theexpectationsindexisbasedonconsumers’short-termoutlookforincome,businessandlabourmarketconditions. STRATEGIC REPORT 15DR. MARTENS PLC ANNUAL REPORT 2024 Doing the right thing for the long term is at the heart of our custodian mindset at Dr. Martens. This means focusing on creating long-term, sustainable value for our stakeholders. CORE COMMERCIAL ACTIVITIES GLOBAL REVENUE CHANNELS OUR BUSINESS MODEL PEOPLE BRAND CONSUMERS Our2,630passionateanddedicated peoplearethecorebuildingblockofour long-termsuccess OUR FOUNDATIONS: Ouriconic,globalbrandis theequitythatdrivessustainable, long-termgrowth Weareproudtoplayarolein ourconsumers’momentsof RebelliousSelfExpression 61% DIRECT-TO- CONSUMER ECOMMERCE Our single most important store is our own .com websites, which cover the majority of our markets. In FY24, ecommerce generated 32% of revenue. RETAIL We operate 239 own stores globally and they provide the opportunity to showcase our brand and products in the best possible physical environment. 39% WHOLESALE This encompasses wholesale partner relationships, together with country distributor models and franchised stores, giving the brand extra reach and awareness. DESIGNING Based on our deeply entrenched and unique Originals DNA, our product designers operate at the forefront of trends, designing ranges for sale up to two years into the future PROTECTING The intellectual property (IP) of our core DNA is protected by our passionate and highly talented IP team SELLING We segment our selling by both channel – Ecommerce, Retail and Wholesale – and by region – EMEA, Americas and APAC H I G H L Y E N G A G E D A U D I E N C E H I G H L Y M O T I V A T E D P E O P L E L E A V E T H I N G S B E T T E R T H A N W E F O U N D T H E M MANUFACTURING During FY24, we manufactured our products in nine countries with the majority manufactured in Vietnam and our Made In England range and most collaborations made in our Cobb’s Lane factory in Wollaston, England MARKETING Our global, regional and local marketing campaigns aim to grow brand awareness and drive product demand and reach across all channels HOW WE CREATE VALUE 16 DR. MARTENS PLC ANNUAL REPORT 2024 PARTNERS Workingwithaniconic,globalbrandthat resonatesstronglywiththeirconsumers 1.6K wholesale customers in FY24 OUR PEOPLE Ongoingtraininganddevelopment withinasupportiveandinclusive workingenvironment 92% response rate to our Engagement and Inclusion Survey SUPPLIERS Associationwithastrong,responsiblebrand thatcangeneratelong-termdemandgrowth OWNERS Long-termbusinesssuccessdriving sharepriceappreciation,aprogressive dividendanda£50msharebuyback programmeundertakeninFY24 £25M total FY24 dividend payout CONSUMERS Beingabletobuyatimeless,durable productforafairprice #1 Dr. Martens ranked number 1 for unprompted brand awareness in our Brand Survey in Boots ENVIRONMENT & COMMUNITIES Reducingourenvironmentalimpactand leavingthingsbetterthanwefoundthem What we do Dr.Martensisaniconic,globalfootwearbrand.We makeboots,shoesandsandalswhichwesellthrough ourDTCchannelviaourecommerceplatformsandour stores,andthroughourbusiness-to-businesschannel viabothwholesalersanddistributors. Weoperateinthreeregions–EMEA,Americasand APAC–andhavesevenprioritymarkets–USA,UK, Germany,Italy,France,JapanandChina.Ourbiggest sellingproductsremainour‘Originals’includingthe 1460boot,the1461shoeandthe2976Chelseaboot. READ MORE P4 WHO WE CREATE VALUE FOR PARTNERS SUPPLIERS FINANCIAL Ourlong-termsupplierrelationships ensureconsistentlyhighproductquality aroundtheglobe Ourstrongwholesalepartner relationshipsprovidesupporttoour DTCexpansionplans Strongmargins,highcash conversionandarobustBalance Sheetsupportcontinuedinvestment inlong-termgrowth HELD FACE-TO-FACE CONFERENCES WITH OUR KEY TIER 1 SUPPLIERS DURING THE YEAR SUCCESSFUL LAUNCH OF AUTHORISED REPAIR IN THE UK STRATEGIC REPORT 17DR. MARTENS PLC ANNUAL REPORT 2024 In this section we identify our key stakeholder groups, explain why and how the Company actively engages with them, set out a number of the metrics used to measure success and summarise some of the outcomes of our engagement. In a change to the approach taken in last year’s Annual Report, we have included a separate section dedicated to explaining how the Board engages with each of these groups and how their interests influence its decision-making. This can be found on pages 101 to 104 in the Governance Report and should be read in conjunction with the wider business context provided on the following pages. Further information regarding how the principles underpinning Section 172 are reflected across the wider business are incorporated by cross-reference and in the table to the right, while our formal ‘S.172 Statement’ is set out below. S.172 PRINCIPLE LOCATION OF MORE INFORMATION The likely consequences of any decision in the long term • Chair’sStatement(pages6to9) • CEO’sStatement(pages10to13) • Ourbusinessmodel(pages16and17) • Ourstrategy(pages22and23) • Keyperformanceindicators(pages30 and31) • Effectiveriskmanagement(pages38 and39) • Boardactivities(pages96and97) • Viabilityassessmentandgoing concern(pages44and45) The interests of the Company’s employees • Stakeholderengagement:Ourpeople (page19) • SustainabilityReport:People(pages 63to72) • NominationCommitteeReport(pages 108to115) • Whistleblowing(page143) • RemunerationCommitteeReport (pages116to118) • GovernanceReport:OurPeople (page101)andKeyHires(page104) The need to foster business relationships with suppliers, customers and others • Ourbusinessmodel(pages16and17) • Ourstrategy(pages22and23) • Ourstrategyinaction(pages24to29) • SustainabilityReport(pages46to74) • Anti-briberyandcorruption(page143) • GovernanceReport:OurSuppliers (page103) The impact of the Company’s operations on the community and the environment • Stakeholderengagement: Environment andCommunities(page21) • SustainabilityReport(pages46to74) • TCFD(pages75to83) • GovernanceReport:OurEnvironment andCommunities(page103) The desirability of the Company maintaining a reputation for high standards of business conduct • Effectiveriskmanagement(pages38 and39) • Divisionofresponsibilities(page98) • AuditandRiskCommitteeReport (pages134to143) • Directors’Report(pages144to148) The need to act fairly as between members of the Company • Stakeholderengagement:Owners (page19) • Relationshipwithlargestshareholder (page147) • AnnualGeneralMeeting(page147) • GovernanceReport:Owners(page 101)andKeyBoardDecisionsin FY24(page104) A key responsibility of all Directors of UK companies under the Companies Act 2006 (the Act) is their duty to promote the success of the company. Specifically, the Act requires that each of the Directors of Dr. Martens plc must act in a way that they consider, in good faith, is most likely to promote the success of the Company for the benefit of its members as a whole, and in doing so have regard (among other matters) to: MAINTAINING A LONG-TERM, CUSTODIAN MINDSET (PAGES 101 TO 104) ‘the likely consequences of any decision in the long term’ and ‘the desirability of the Company maintaining a reputation for high standards of business conduct’ OUR PEOPLE (PAGE 19) ‘the interests of the Company’s employees’ CONSUMERS, PARTNERS AND SUPPLIERS (PAGES 20 AND 21) ‘the need to foster the Company’s business relationships with suppliers, customers and others’ ENVIRONMENT AND COMMUNITIES (PAGE 21) ‘the impact of the Company’s operations on the community and the environment’ OWNERS (PAGE 19) ‘the need to act fairly as between members of the Company’ The Board recognises that maintaining strong relationships and healthy dialogue with the Groups’ stakeholders remains critical to our objective of delivering sustainable growth over the longer term. The needs of our stakeholders are closely considered by the Board when discussing matters of strategic significance. The Board also pays due regard to the potential impact of proposals tabled for its approval on our stakeholders and has sought to establish a wider business culture that keeps stakeholder interests at the heart of decision-making below Board level. The Board therefore confirms that, throughout the year under review, it acted, and continues to act, to promote the long-term success of the Company for the benefit of shareholders, while having due regard to the matters set out in Section 172(1)(a) to (f) of the Act. While the Board will always favour outcomes that benefit all stakeholder groups to the greatest extent possible, it is mindful that achieving this is not always possible. Stakeholder priorities are wide-ranging and do, at times, compete and conflict. The Board therefore seeks to take decisions that it believes are most likely to provide results that deliver our strategy, thereby serving the interests of all stakeholders over the longer term. How stakeholders were considered in certain key decisions taken by the Board during the year can be found in the ‘Our stakeholders’ section of the Governance Report on pages 101 to 104. The general principles set out in Section 172 are also intrinsic to how the Company operates below Board level and are firmly embedded within our culture. The interests of our stakeholders and the ways in which the actions we take as a business impact their interests are considered as part of decision- making processes across the Company. Some examples of these are provided below and more information can be found in our Strategic and Sustainability Reports, located from pages 1 and 46 respectively. SECTION 172 STATEMENT MEETING THE NEEDS OF OUR STAKEHOLDERS 18 DR. MARTENS PLC ANNUAL REPORT 2024 STAKEHOLDER ENGAGEMENT AND SECTION 172 STATEMENT OWNERS Shareholders of Dr. Martens plc, be they large institutional investors, employees, private individuals or our largest single investor, IngreLux S.àr.L. All Dr. Martens employees globally, whether based in our own stores, offices, distribution centres or factories. Why we engage • Ourshareholdersarethe ownersofourCompany. Engagingwiththemisan essentialandongoingprocess fortheBoardandanimportant meansthroughwhichit dischargesitsdutyunder Section172oftheCompanies Act2006,conductedthrough arangeofchannels. • Understandingourinvestors’ prioritiesandensuringwe maintainclearandopen dialogueisanimportantpart ofbeingalistedbusiness. How the Company engages • OurInvestorRelations functionisfocusedonongoing, openengagementwithour shareholdersthroughregular meetingsandinvestor roadshows,includingone-to- onemeetingswithourlargest institutionalshareholders, investorgroupmeetingsand meetingswithprospective investors. • Managementand,where appropriate,Non-Executive Directorsregularlymeetwith institutionalshareholders followingresultsandatotherkey juncturesduringtheyear. • TheDirectorofInvestor Relationsisresponsiblefor investorengagementand ensuringthattheBoardiskept apprisedofinvestors’views. • Regularin-depthfeedbackon investorviewsprovideddirectly andbyourcorporatebrokers, followingresults,meetings, conferencesandteach-inevents. • Tradingupdatesannounced viatheLondonStockExchange RegulatoryNewsServicein additiontoourhalfandfull yearresults. Metrics • Atotalof141investormeetings covering111separatefirmsin FY24,77ofwhichwere attendedbyatleastoneofthe ChiefExecutiveOfficer,Chief FinancialOfficerorChairman. • Regularqualitativefeedback receivedfrominvestors followingresultsandotherkey announcements. • Movementsinourshareregister andsharepriceanalysis reportedtotheBoard. • Majorinstitutionalinvestorsand proxyadvisoryfirmsconsulted inrespectoftheCompany’s draftnewRemunerationPolicy. Outcomes • Regulardialoguewithinvestors throughouttheyearenabled investorstodiscussquestions andconcernsdirectly. • Allresolutionspassedatthe 2023AGMwithatleast91.84% ofvotesinfavourandover78% oftotalvotingcapitalinstructed. • A‘ProductTeach-in’eventheld toprovideinvestorswiththe chancetoengagewithour product,sustainabilityand marketingteams,givinga deep-diveinsightintothe strategyineachareaandlatest productinnovations. OUR PEOPLE Why we engage • Regular,high-qualityengagement withourpeopledriveshigh performanceandawillingnessto goaboveandbeyondatalllevels oftheorganisation,startingfrom theverytop. • Engagingwithourpeopleallows thebusiness’sleadershipteamsto measurethe‘moodmusic’ofthe organisationthroughconstructive, two-waydialoguetounderstand whatisworkingwellandtoidentify areasforimprovement. • Touniteourpeople,creatinga senseofbelongingwhichinturn promotescollaborationacross thebusinessandourunique cultureandvalues. • Toattractandretainthekey talentrequiredtohelpusdeliver ourDOCSstrategy. How the Company engages • OurglobalEngagementand InclusionSurveyisdistributed toallemployeesannuallyand providesvaluableinsightinto theirexperienceofworkingat Dr. Martens. • ‘OnBrand’,themonthlyblog sharedwiththeglobalbusiness byourCBO,IjeNwokorie, providesemployeeswithregular insightsintohisprioritiesand theactivitiesofourBrand functions,includinghighlights fromkeyprojects,inan engaging,digestibleformat. • Ourquarterlyemployee magazine,‘OnAir’,provides newsfromacrossthebusiness andisdeliveredbyemailand inofficetoouremployees. • GlobalandregionalTownHalls keepemployeesupdatedon businessdevelopments,share insightintokeyinitiativesand provideopportunitiestoask questionsoftheGlobal LeadershipTeam(GLT). • Teameventsareencouraged tocreateopportunitiesfor peopletoconnectandtoshape individualteamprioritiesand alignourpeoplebehindthe widerstrategy. Metrics • 92%responseratetothe FY24Engagementand InclusionSurvey. • Atargetscoreforour EngagementandInclusion Surveyisastrategicbonus targetfortheGlobal ManagementTeamandSenior ManagementTeam,linking effectiveengagementwiththe potentialremunerationofthe Company’smostseniorleaders. • 1,584ofourpeople communicatedwiththe business’sHRfunctionsusing Menti,adigitalfeedbacktool. Outcomes • RegularGroupTownHalls establishedinFY24tobring supportinggroupfunctions together,mirroringthesetup ofourregions. • ‘SpeakUp’policygoverning internalwhistleblowing proceduresrefreshedandrolled outglobally. • ‘WebinarWednesdays’offer onlinesessionsonarange oftopicstoassistourpeople indevelopingtheirskillsand knowledge. • AGroupsocialcommitteewas established,servingtheLondon andCobbsLaneofficesinthe UK. • Amonthly‘InsideTracks’ newsletterwaslaunchedin theUSA. • InAPACleadersconducteda holisticorganisationassessment fromwhichseveralhighimpact actionsweretakentoenhance people’sengagementincluding connectionforumsandrobust communicationcadence. STRATEGIC REPORT 19DR. MARTENS PLC ANNUAL REPORT 2024 STAKEHOLDER ENGAGEMENT AND SECTION 172 STATEMENT CONTINUED PARTNERS CONSUMERS The key B2B partners supporting the expansion of our brand across new and existing markets. The patchwork of groups and individuals who support our brand and buy our products, through any channel. Why we engage • Engagingwith,andactingin theinterestsof,ourconsumers iscriticaltothehealthofthe Dr.Martensbrandandthe long-termsuccessofthe Company.Withoutthem,our Companywouldnotexist. Assuch,itisessentialthatthe business,ledbytheBoard, understandswhatmattersto themsothatwecancontinue toprovideaproductofferthatis relevantandappealingwhile remainingtruetoourbrandDNA. How the Company engages • Dedicatedsocialmedia maintainongoingdialogue andengagementwithour onlineconsumercommunity, establishingacontinuous connectionbetweenthe businessandconsumersand providinganessentialsource ofactionableinsight. • Harnessingtheexpertiseof ourretailcolleaguenetworkto engagedirectlywithconsumers instoresandthroughdigital platforms,feedingkeythemes backtomanagement. • Developingunderstandingof ourglobalconsumersegments throughspecificandqualitative research,helpingtodrivemore localisedandtargetedbrand initiatives. • Anongoingcommitmentto provideproductswhichmeet ourconsumers’ethicaland environmentalexpectations. • Providingopportunitiesfor consumerstofamiliarise themselveswithnewsustainable materialsandlearnmoreabout themfromourknowledgeable retailcolleaguesinaselection ofkeystoresglobally. Metrics • Insightsfromtheannualand quarterlyconsumersurveysinto therelativeperformanceofour brandandproducts,including brandawareness,familiarity, NetPromoterScoreandvalue formoneyperception. • Extensivequalitativeresearch intoourconsumersegments, includingdemographics, purchasebehaviour,interests, attitudesandvalues. • Monitoringconsumersentiment inrelationtosustainabilityvia metricstrackingthesuccess ofspecificproductlaunches, recommerceinitiativesand generalconsumerperceptions ofoursustainabilitycredentials. Outcomes • Continuedgrowthandhigh levelsofengagementand brandresonanceamongour onlineconsumercommunity, • Successfullylaunchedournew ‘MadeStrong’brandplatform duringtheyear. • Investmentinconsumerinsights todevelopourunderstanding ofconsumersegments. • Consumerfeedbackonthe importanceofsustainable productsandsaleplatforms, resultinginnewrecycledleather materialtrialandthelaunch ofReWairintheUSA. Why we engage • Asthesourceofasignificant proportionofGrouprevenue,it isimperativethatwecontinue tofosterclose,strongworking relationshipswithourkeyB2B partnersandensureourbrandis showingupinanauthenticway, withthequalityexperienceand productassortmentsour consumersexpect. • Inlargegeographically dispersedmarketssuchasthe USA,thewholesalechannel allowsustoreachmore consumerstointroducethem toourDr.Martensbrand. • Toensurethatappropriate inventoryandproductmixare plannedfortherighttimesof year,withanassortmentthat supportstheconsumerwho shopsinthosestores. • ClosemanagementofourB2B orderbookensureswedeliver goodsontimeandenablesusto reviewopportunitiestoupsellto partnersbasedonourinventory. How the Company engages • Weworkcloselywithourpartners ontheiroperationalstrategies, ensuringthatourbrandisalways wellrepresented.Wecontroland approvestorenetworkexpansion plansandhaveestablished minimumsthateachpartner mustpurchaseinordertoensure thecontinuedgrowthofeach respectivebusiness. • RegionalB2Bfunctionsmanage andmaintainrelationshipswith ourwholesalepartners,including regularcommunicationand engagement. • Reviewing,evaluatingand implementingtheproduct segmentationstrategywithinthe B2Bmarketplace,ensuringwe gettherightproductintotheright locationstoservetheneeds ofourpartnersandconsumers. • EngagingwithourkeyB2B partnersontheend-to-end go-to-marketprocessensures thatourbrandandproductsare presentedinlinewithourseasonal strategiesandbrandstories. Metrics • Continuousandconsistent analysisofstocktosales metricsandsell-throughdata tomitigateriskandmaximise in-seasonopportunities. • OurB2Bpartnersaretieredinto asegmentationprogramme, whichisconstantlyre-evaluated withaconsumerfirstmindset, toensureourproductrange landswithdifferentiationacross themarketplace. Outcomes • Stepstakenduringtheyear toelevateandexpandthe penetrationofouraccountbase, keepingtofewerbuthigher- qualitypartnerstoexpandthe reachofthebrandandincrease awareness,managebrand presentationandimprovethe overallcustomerexperience. • Continuedinvestmentinthe refurbishmentofdistributorand franchisestorestoenhance theconsumerexperienceand ensurebrandpresentationis inlinewithourstandards. • Leveraginglocaldistributor expertiseallowsustotake advantageofshort-term opportunitiestoincreasebrand awarenessandtestDTCviability. 20 DR. MARTENS PLC ANNUAL REPORT 2024 SUPPLIERS ENVIRONMENT & COMMUNITIES Product manufacturers, tanneries and other producers of the materials used in Dr. Martens products, logistics carriers and distribution centre partners. The environment on which our activities have an impact and the communities in which the business operates globally. Why we engage • Oursupplychainisfundamental totheabilityofthebusinessto operateeffectivelyanddeliver ourDTCfirststrategy,enabling thesourcing,manufacture, storageanddistributionofour productstoconsumersglobally andatthescaleneededto supportourgrowthambitions. • TheSupplyChainfunctionis responsiblefordeliveringmany aspectsofthesustainability strategyandworkswithsuppliers todriveasustainable,responsible supplychain. • Oursuppliersarecritical partnersinrealisingthe objectivesofoursustainability strategyandachievingour science-basedtargets. Embeddingourenvironmental principlesandexpectationsin termsofworkplacestandards acrossthesupplychainisonly possiblethroughconstructive engagementwiththem. How the Company engages • Regularsupplierconferences hostedbyourChiefOperating Officer,GeertPeeters,wholeads theGlobalSupplyChainfunction. • MonthlyTier1operationalcalls facilitatedbytheGlobalSupply Chainleadershipteam. • Seasonalcostingreviewsand updatemeetingsheldwithall Tier1suppliers. • Anongoingprocessofregular assessmentofmanufacturing facilities,includingperiodic inspections,improvement activitiesandCSRaudits conductedthroughtheCSR monitoringprogramme,which focusesonmanaginghuman rightsrisksinthesupplychain. • TheDr.MartensMasterSupplier AgreementandSupplierCodeof Conductiscommunicatedtoall suppliers,whoarerequiredto complywithitatalltimes. • TheChiefOperatingOfficerisa memberoftheSustainability Committeeandplaysacriticalrole inensuringoursupplychainand sustainabilitystrategiesarealigned. Metrics • DataacquiredthroughtheCSR monitoringprogrammeprovides insightintolevelsofcompliance withrelevantlabourlaws, regulations,industrystandards andourownSupplierCode ofConduct. • Environmentaldatarequested fromTier1supplierstoenable ustounderstandourScope3 emissions. • Closemonitoringofour paymentperformanceensures oursuppliersarepaidinfulland inatimelyfashion,providing assuranceinachallenging economicenvironment. Outcomes • Long-lasting,strong relationshipsestablishedwith keysupplierswhichencourage highstandardsofdeliveryand constructivewaysofworking. • Agoodlevelofsupplier alignmentwithoursustainability prioritiesthroughtheadoptionof arangeofrelevantpoliciesand standards,includingtheSupplier EnvironmentalStandardand GeneralMaterialRequirement Policyandsustainableleather commitments. Why we engage • Asafootwearretailerwehaveto bemindfuloftheimpactour operationshaveonthe environment.Wehave developedaclearstrategythat managesourprioritisedimpacts ontheenvironmentandthe communitieswereach,while embeddingsustainabilityacross thebusinessandsupplychain. Thisincludesourscience-based targettobeNet-Zeroacrossthe valuechainbyFY40. • Acommitmenttosupporting causesthatmattertoourpeople, includingthroughtheworkofthe Dr.MartensFoundation. • Corporatesocialresponsibilityis asimportanttoourstakeholders asitistothebusinessitself.As such,theCompanyiscommitted totransparencyinrespectofCSR mattersandrecognisesthe importanceofthisinmaintaining trustingrelationshipswithour keystakeholders. How the Company engages • Our‘Planet,Product,People’ sustainabilitystrategycaptures theCompany’senvironmental andsocialimpactcommitments; theSustainabilityCommittee overseesthestrategyand monitorssustainabilityinitiatives acrossthebusiness. • Twopaidvolunteeringdays providedtoemployeesperyear toenablethemtosupportlocal communityinitiatives. • Updatesontheactivitiesofthe Dr.MartensFoundationare regularlysharedviainternal communicationchannels. • Employeeparticipationinthe Dr.MartensFoundationis encouraged,fromnominating charitiestoreceivegrantsto volunteeringatcharityevents. Metrics • 100%oftheleathersourcedfor theAW24seasonwasfrom LeatherWorkingGroup(LWG) certifiedtanneries. • 93.5%oftheelectricityusedby DTCoperationsintheUKand EMEAwasfromrenewable sourcesinFY24. • £1.9minfundingawardedto65 organisationsbytheDr.Martens FoundationinFY24. • Aninternalclimate-related engagementandeducational eventduringFY24reached nearly700ofouremployees. • Monitoringtheperformanceof ourrepairandresaleinitiativesto informfutureplansandgauge consumersentiment. • EnvironmentaldatafromTier1 suppliersenablesusto understandoursuppliers’ environmentalimpacts. Outcomes • Continuedprogressineachofthe sustainabilitystrategicpillarsof ‘Planet,Product,People’,detailed intheSustainabilityReportfrom page46. • Approvalofourscience-based targetsreceivedfromthe ScienceBasedTargetsinitiative. • Thelaunchofreclaimedleather material,‘GenixNappa’,in partnershipwithGeneration PhoenixLimited. • Severalglobalinternal engagementandeducational eventsprovidedopportunitiesfor ourpeopletolearnmoreabout oursustainabilitystrategyand progressmadeinrecommerce andsustainablematerials. STRATEGIC REPORT 21DR. MARTENS PLC ANNUAL REPORT 2024 Planet DTC FIRST Buildbrandequityanddrive marginexpansion WHAT IT MEANS Driverevenuegrowthandmarginexpansionviadirect-to- consumerchannelswhichmeansexpandingandimproving ourownedretailstoresandecommerceplatforms.Wewant todevelopfrictionlessandbrand-enhancingomnichannel consumerjourneys.Wealsowanttobuildaprofitableresale, repairandend-of-lifebusinessmodel. HOW WE PERFORMED IN FY24 • GrewourDTCrevenuewithmixincreasingby9%ptsto61% • Opened46newstoresglobally • SuccessfulrolloutofomnichannelintheUK • SuccessfullaunchofauthorisedrepairintheUK, maximisingtheuseablelifeofourproducts • LaunchedReWairintheUSA,whichallowsconsumersto buysecond-hand,restoredDr.Martensfootwearandbags, withencouragingearlyresults NEXT STEPS FOR FY25 • ContinuetorolloutomnichannelinEMEAstarting withGermany • Open25-30storesglobally,withafocusoncontinental EuropeandJapan • Continuetooptimisetheomnichannelconsumerjourney WHAT IT MEANS DriveDM’sculturewithafocusonorganisational engagementanddevelopingourpeopleforgrowth.Wewant tobuildabest-in-class,resilient,sustainableandscalable supplychainandcontinuetotransformdataandtechnology intoakeybusinessenabler,strengtheningorganisational resilienceandinformationsecurity. HOW WE PERFORMED IN FY24 • TransformationofourNorthAmericadistributioncentre (DC)network,withtheexpansionofourNewJerseyDC, theintroductionofautomationinourLADCandthe openingofanewDCinCanada.Youcanreadmoreabout ourNorthAmericaDCnetworkonpage24 • Madesomesignificantinvestmentsintalent,includingthe creationofaChiefBrandOfficerroletooverseeallaspects ofbrand • Continuedtoimplementoursupplychainstrategy, unlockingvaluethroughcostsavings NEXT STEPS FOR FY25 • Furtherembeddinguseofourproductlifecycle managementsystemintothebusiness,whichwillgiveus detailedvisibilitytodriveefficiencyandspeedtomarket • ImplementournewSupplyandDemandPlanningsystem intothebusinesswhichwillimproveplanningcapabilityat amoregranularlevel ORGANISATIONAL AND OPERATIONAL EXCELLENCE Enablegrowthandunlockvalue • Climate • Operations Our DOCS strategy is underpinned by our Planet, Product, People sustainability strategy OUR STRATEGY DELIVERING AGAINST OUR STRATEGY 22 DR. MARTENS PLC ANNUAL REPORT 2024 Product People WHAT IT MEANS IgnitethebrandenginetoinspireRebelliousSelfExpression. Ourproductinnovationisgroundediniconsandyear-round relevance.Weaimtoleadinsustainabilitythroughdurability andinnovation.Finally,wewillharnessinsightsanda digital-firstmindsettodrivecut-throughmarketinginitiatives. HOW WE PERFORMED IN FY24 • Launchedanewbrandplatform,MadeStrong,tobuild brandawarenessandbringnewconsumersintothebrand. YoucanreadmoreaboutMadeStrongonpage27 • LaunchedanewcategorywithinourAMPcollection,14XX, whichisfocusedoninnovatingaroundourcoreproducts, the1460boot,1461shoeand2976Chelseaboot • Launchofnewproductrangemadefromreclaimedleather, followingourpartnershipwithGenPhoenix NEXT STEPS FOR FY25 • Reorganisethebrandorganisationunderthenew ChiefBrandOfficer • Pivotourmarketingtofocusonouriconicproducts, particularlyboots • ContinuetodevelopourCustomerDataPlatform, allowingustobetterunderstandourconsumersand usemoretargetedmarketing • Continuetofocusontesting,developingandincluding moresustainablematerialsacrossourproductrange WHAT IT MEANS WeaimtopartnerwithfewerandbetterB2Bpartnerstoreach moreconsumerswithgreaterbrandpresence.Wewillcontinue toimproveourbrandpresentationandincreasecontrolled spacestoenhancetheconsumerexperience.Finally,thispillar includesourconversionmarketstrategy,whichenablesusto implementourDOCSstrategyinmoregeographies. HOW WE PERFORMED IN FY24 • Wholesalerevenuesdown28%drivenbywidespread customercaution,particularlyintheUSA • Tookthestrategicdecisiontoreduceboththebreadth ofproductandthetotalvolumessoldtoEMEAe-tailers toacceleratemigrationofdemandtoourownchannels • ContinuedsuccessinourcontinentalEuropean conversionmarkets.Readmoreonpage28 NEXT STEPS FOR FY25 • Worktoformstrongeranddeeperpartnershipswithkey USAwholesaleaccounts • ContinuetodrivegrowthinEMEAconversionmarkets; theserepresentamulti-yeargrowthopportunity CONSUMER CONNECTION Acquirenewconsumers anddriveloyalty SUPPORT BRAND EXPANSION WITH B2B ManageB2Bholisticallyandpurposefully • Materials • Packaging • Lifecycle • DE&I • Humanrights • Community We want the world to wear DM’s footwear when they have their moments of Rebellious Self Expression. Our DOCS strategy is about selling more pairs of boots, shoes and sandals, to more people, through our own DTC channel, in our seven priority markets. UK / USA / FRANCE / GERMANY / ITALY / JAPAN / CHINA STRATEGIC REPORT 23DR. MARTENS PLC ANNUAL REPORT 2024 BOOSTING MAKING AND SOURCING DISTRIBUTIONRAW MATERIAL EXTENDING LASTING RELATIONSHIPS WITH OUR SUPPLIERS Strengtheningourstrategicpartnershipwithkeysupplierstodeliver continuedhighstandards,constructivewaysofworkingandprofitable businessforthelongterm. NORTH AMERICA DISTRIBUTION NETWORK Duringtheyear,wehavetransformedourNorthAmericandistribution centre(DC)networkforfuturegrowth.Firstly,wecompleted automationinourLosAngelesDC,configuringittodeliverspeed andcostefficiencies.Secondly,weexpandedourprimarilydirect-to- consumerNewJerseyDC,enablingustopick,packandship wholesaleordersfromtheEastCoastofthecountry.Finally,in Canada,wehavemovedtoalargerDCinToronto,whichisbetter placedtoserveourbusinessinthismarketasitgrows. Wearecurrentlyusingtemporarystoragefacilitiesaroundour LosAngelesDCduetoourelevatedlevelsofinventory;weexpect toexittheseinFY26. OUR STRATEGY IN ACTION 24 DR. MARTENS PLC ANNUAL REPORT 2024 RETAILING, ECOMMERCE, WHOLESALE C.70% direct control over our supply chain inputs today – increased from c.10% five years ago LINKS TO STRATEGY Fastforwardtotoday,wenowsourceallofthekey componentsofourproductsandworkwithour suppliersondetailedcostingtoensuretheymake afairprofit,butalsogivingusgreatercontrolover productqualityandconsistency. Duringthisfinancialyear,wehaveseenmaterial savingsinsupplychaincosts,benefittingourgross margin,andaswemoveforward,webelievethere arefurtheropportunitiestooptimisecost,whilst guaranteeingqualityandthereforefurthergross marginimprovement. SUPPLY CHAIN STRATEGY Overthelastfiveyears,wehavebeenexecuting oursupplychainstrategyandincreasingthe controlwehaveoverourend-to-endsupplychain inputs.Backin2018,Dr.Martensusedtobuya finishedproductfromasupplierandhadlimited visibilityoftheproductionprocessandcost componentsofthatproduct. FINANCE REVIEW P32 SUSTAINABLE INITIATIVES DuringFY24,welaunchedtworepairandresale initiativestohelpourconsumersextendtheuseablelife oftheirDr.Martensproducts.IntheUKwelaunchedan authorisedrepairserviceinpartnershipwithTheBoot RepairCompany,whohaveover120years’experience ofexpertlyrepairingandrestoringboots,shoesand leathergoods.RepairsarecarriedoutbyTheBoot RepairCompanyusingthesamemachineryand componentsthatmakeourbootsandshoes. IntheUSA,welaunchedourresaleplatform,ReWair, followingthesuccessofourUKresaletrial.Consumers canpurchasepre-lovedDr.Martensfootwearandbags fromourdedicatedReWairwebsite.Forthefirsttime, wealsolaunchedproductsmadefromreclaimedleather, whichhelpstackleleatherwasteinthesupplychain. Theseinitiativescomeunderthe‘DTCfirst’and SUSTAINABILITY P46 DRMARTENSREPAIRS.COM US.REWAIR.DRMARTENS.COM EFFICIENCY ENHANCING OUR SUPPLY CHAIN CONSUMER PRODUCT END OF USEABLE LIFE EXTENDING LIFESPAN CARE REPAIR RESALE RECYCLING PARTNERSHIPS ‘Consumerconnection’pillarsofourDOCSstrategyand supportprogresstowardsoursustainabilitycommitments. YoucanreadmoreinourSustainabilityReportfrompage46. MOVING TOWARDS CIRCULARITY Byofferingcare,repairandresale,andbuildingglobal recyclingpartnerships,wearesupportingthedevelopment ofthecirculareconomy. STRATEGIC REPORT 25DR. MARTENS PLC ANNUAL REPORT 2024 STRATEGIC REPORT DRIVING 14XX will be the home for cutting- edge innovation, where we push the boundaries of our DNA to excite and disrupt both the marketplace and consumers. The launch of 14XX shows how we implement our product strategy, which we refer to as ‘icons and innovation’. ADAM MEEK Chief Product Officer OUR STRATEGY IN ACTION CONTINUED 26 DR. MARTENS PLC ANNUAL REPORT 2024 STRENGTHENING OUR GLOBAL BRAND A new Made Strong brand platform DuringFY24,welaunchedournewbrand platform,MadeStrong.Thiswasaglobal campaignwherewebroughttogether productandbrandstorytellingunderthe ideaof‘MadeStrong’.MadeStrongbrings ourbrandpurposetolifeforourconsumers. Thecampaigntalkedtotherationaland emotionaltruthsabouttheDr.Martens brandandourwearers.Fromaproduct lens,wetalkedtotheattributesofquality anddurabilityofourproductsand highlightedupcomingnewnessaswell asourcoreiconicproducts. Inexecutingthecampaign,weadopteda keycityapproachwithhighenergyevents inNewYork,TokyoandLondonwhich sawsignificantpresscoverage.Thiswas coupledwithoutofhomemarketingand socialmediacontent. INNOVATION SEED LAUNCH STYLE SUBVERT AW23 SS24 AW24 • Global 14XX launch with strategic seeding • Beta pack • Global launch of DMXL 14XX collab with Rick Owens • Paris Fashion Week 14XX Styling • Main range introduction of 2976 DMXL • 14XX sub boot launch Launching our 14XX collection AlongsideMadeStrong,wealsolaunched thecapsulecollectionofabrandnew categorywithinAMP–14XX–whichwill bethehomeforcutting-edgeinnovation, wherewepushtheboundariesofourDNA toexciteanddisruptboththemarketplace andconsumers.Thefulllaunchof14XXwill becominginAutumnWinter24.Thelaunch of14XXshowshowweimplementour productstrategy,whichwerefertoas‘icons andinnovation’.Inpractice,thismeanswe innovatearoundthecoreproductstobring newnessandexcitement. SCAN TO VIEW THE 14XX PRODUCT LAUNCH VIDEO PUSHING THE BOUNDARIES OF OUR DNA LINKS TO STRATEGY Tokyo Made Strong event STRATEGIC REPORT 27DR. MARTENS PLC ANNUAL REPORT 2024 Spain (Converted FY22) Italy (Converted FY22) Germany 1 (Converted FY19) FY20 FY22 FY23 FY24 7 15 11 14 7 8 10 9 0 2 4 3 OUR STRATEGY IN ACTION CONTINUED GROWING BUILDING BRAND AWARENESS CONVERSION MARKET STRATEGY Theconversionmarketstrategyisa multi-yeargrowthopportunityforourEMEA region.Attheendofadistributorcontract, we‘takeback’themarket,allowingusto implementthefullDOCSstrategy–opening ourownstores,runningecommerceand workingwiththerightwholesalepartners. Thisgivesusgreatercontrolofourbrand, allowingustoinvestinamarket,engage withourconsumersandshowcaseourfull productrange. Overthepastfiveyears,wehaveconverted anumberofmarkets,startingwithGermany backinFY19,toItalyandSpainmost recentlyinFY22.Sinceconversion,these marketshavesignificantlygrownbrand awareness,DTCmixandpairspercapita withfurthergrowthopportunityahead. +3% YoY increase in Italy brand awareness 42% Italy FY24 DTC mix CAPTURING THE GROWTH OPPORTUNITY IN ITALY TakingItalyasanexample,wenowhave 12storesandhavebeentakingatwostore cityapproach,openingtwostoresinkey citiessuchasRome,MilanandTurin.Since conversioninFY22,DTCmixhasincreased to42%andbrandawarenesshasincreased by3%. Our Turin store PAIRS PER CAPITA Pairs/Capita (000s)Pairspercapitainourmostmaturemarket, theUK,was30inFY24.Althoughnotall prioritymarketswillreachthislevel,we believetheycangetsignificantlycloserto UKlevels.Ourmostmatureconversion marketGermanyiscurrentlyaroundathird thepairspercapitaoftheUK.Morerecently convertedmarketsItalyandSpainstandat 10and4respectively.Thisfurtherhighlights thegrowthopportunitystilltocomefrom thisstrategy. 1. GermanyimpactedbyreducedEMEAetailervolumesinFY23andFY24. 28 DR. MARTENS PLC ANNUAL REPORT 2024 CONVERSIONS New store in Turin, Italy LINKS TO STRATEGY 1. GermanyimpactedbyreducedEMEAetailervolumesinFY23andFY24. STRATEGIC REPORT 29DR. MARTENS PLC ANNUAL REPORT 2024 FY24FY23FY22FY21 £773.0m £908.3m £877.1m £1,000.3m FY24FY23FY22FY21 £222.9m £263.0m £197.5m £245.0m FY24FY23FY22FY21 28.8% 29.0% 22.5% 24.5% FY24FY23FY22FY21 £69.7m £214.3m £93.0m £159.4m FY24FY23FY22FY21 3.5p 18.1p 7.0p 12.9p FY24FY23FY22FY21 £234.1m £208.1m £157.1 £48.4m 105% 79% 80% 20% FINANCIAL REVENUE What are we measuring and why? Revenuearisesfromthesaleofproductsto consumersandisstatedexcludingvalueadded taxandothersales-relatedtaxes.Revenue growthiscrucialforsustainablelong-term growthandisdriventhroughincreasingthe numberofpairssold,attractingandretaining customersandtheshifttoDTC. Performance Revenuedecreasedby12%inFY24,drivenby weakerwholesale,particularlyintheUSA. EBITDA 1,2 What are we measuring and why? EBITDAistheGroup’skeyprofitmeasureto showperformancefromoperations.EBITDA demonstratesourabilitytogrowcashprofits anddeliverareturnonourrevenue. Performance EBITDAfellby19%,mainlyduetotheimpact oflowerwholesalerevenuesandcontinued investmentintothebusiness. EBITDA MARGIN 1,2 What are we measuring and why? EBITDAmarginexpressesEBITDAasa percentageofrevenue.OurEBITDAmargin demonstrateshoweffectiveweareat convertingrevenuesintoprofits,andassessing operationalperformanceandefficiencies. Performance EBITDAmargindeclinedby2.0%ptsto22.5% duetolowerthanexpectedrevenuescombined withanincreasingoperatingcostbase. 1. AlternativePerformanceMeasuresasdefinedintheGlossaryonpages220and221. 2. Beforeexceptionalitems. 3. RefertoFinancereviewandnote10oftheConsolidatedFinancialStatements forfurtherinformationonEPSanddilutedEPS. 4. Beforeexceptionalitems. PBT What are we measuring and why? PBTshowstheGroup’sprofitperformance beforeexceptionalcostsandafterfinancing costs.PBTincludesdepreciation,amortisation andnetinterestcostsandthereforeprovides anotherviewofourprofitability. Performance PBTdeclinedby42%duetolowerEBITDA, higherdepreciationandamortisationfromnew storesandITinvestmentprojects,andhigher netinterestcostsduetoincreaseddebt. BASIC EPS 1,3 What are we measuring and why? EPSisprofitaftertaxpershareinissue andindicateshowmuchprofitacompany generatesforeachshareofitsstock.EPS representstheearningsachievedforeach shareandovertimegrowthofthismetric shouldresultinincreasedshareholdervalue. Performance BasicEPSdeclinedby46%.Thiswasdue tothelowerprofitsachievedintheyear. OPERATING CASH FLOW 1,4 What are we measuring and why? OperatingcashflowshowstheGroup’scashfrom operationsaftercapitalexpenditure.Thelevelof operatingcashflowgeneratedbythebusinessis importantinassessingtheunderlyingqualityof performanceandthesustainabilityofgrowth. Performance OperatingcashflowasapercentageofEBITDA was80%,a60%ptsincreasecomparedto FY23.Thisisduetolowerworkingcapital outflowduetoreducedpurchases. LINKS TO STRATEGIC PILLAR: MEASURING OUR PERFORMANCE Operatingcashconversion. KEY ASSOCIATED RISKS: LINKS TO STRATEGIC PILLAR: KEY ASSOCIATED RISKS: LINKS TO STRATEGIC PILLAR: KEY ASSOCIATED RISKS: LINKS TO STRATEGIC PILLAR: KEY ASSOCIATED RISKS: LINKS TO STRATEGIC PILLAR: KEY ASSOCIATED RISKS: LINKS TO STRATEGIC PILLAR: KEY ASSOCIATED RISKS: 30 DR. MARTENS PLC ANNUAL REPORT 2024 KEY PERFORMANCE INDICATORS FY24FY23FY22FY21 12.7m 14.1m 11.5m 13.8m FY24FY23FY22FY21 43% 49% 61% 52% FY24FY23FY22FY21 135 158 239 204 FY24FY23FY22FY21 30% 29% 32% 28% TheGroupmonitorsseveralkeymetricstotrackthefinancialandnon-financial performanceofitsbusiness.APMs 1 areusedaswebelievetheyprovideadditional usefulinformationonunderlyingtrends.TheAPMsarenotdefinedbyIFRSand thereforemaynotbedirectlycomparablewithothercompanies’APMs. REMUNERATION REPORT P119 NON-FINANCIAL PAIRS DIRECT-TO-CONSUMER MIX What are we measuring and why? DTCmixshowsthecombinedecommerce andretailrevenuesasapercentageoftotal revenue.WeaimtogrowDTCrevenuetoat least60%mixinthemediumterm,andthis metricthereforedemonstratesourprogress againstthistarget. Performance DTCmiximprovedby9ptsto61%driven bystrongretailgrowthandlowerwholesale revenues. OWN STORES What are we measuring and why? Ownstoresshowsthetotalnumberofretail storestheGroupdirectlyoperatesglobally. Increasingourstoreestatedrivesretailand ecommercerevenuegrowthandistherefore akeydrivertoincreaseDTCmix. Performance DuringFY24,weopened46newstoresand closed11storesandendedtheyearwith239 ownedstores. ECOMMERCE MIX What are we measuring and why? Ecommercemixshowsthetotalecommerce revenueasapercentageoftotalrevenue. Weaimtogrowecommercerevenueinthe mediumtermandthismetrictherefore demonstratesourprogressagainstthistarget. Performance Ecommercemixincreasedby4%ptsto32% howeverthiswasduetothedeclineinGroup revenue;ecommercerevenuewasdown1% year-on-year. What are we measuring and why? Thenumberofboots,shoesandsandalssold duringtheyear,throughallchannels.Wehave avolume-ledgrowthstrategyandtherefore pairsisakeymetricforourbusiness. Performance InFY24,wesold11.5millionpairs,a17% declinecomparedwithFY23.Thiswasdueto weaknessinwholesale,withDTCpairsup7%. OUR STRATEGY P22 RISK MANAGEMENT AND OUR PRINCIPAL RISKS P38 Key associated risks: Brand and product Social and environmental People, culture and change Supply chain Information and cyber security Financial Legal and compliance Macroeconomic uncertainty Linkage to remuneration METRICS DIRECTLY LINKED Wemeasureprofitabilitybothwithinour short-termincentive,theGlobalBonus Scheme(GBS),andalsoourLong TermIncentivePlan(LTIP).75%ofthe GBSisassessedonstretchingPBT growthtargetsandtheLTIPisbasedon underlyingEPSgrowthtargets.Both PBTandEPSarecomprehensive profitabilitymeasureswhichareclosely alignedwithshareholdervaluecreation. KEY DRIVERS INDIRECTLY LINKED Ofthekeyfinancialdrivers,revenue growth,EBITDA,EBITDAmarginand cashflowallhelptodriveprofitand long-termsustainablebusinessgrowth. Whilethesearenotdirectlyidentifiedas metricswithintheGBSandLTIP,they feedintothemetricsofPBTandEPS usedinourincentivearrangements. Pairsindicatethesuccessofour volume-ledgrowthstrategy.Growing ecommercemix,DTCmixandopening moreownstoresarealsoindirectly incentivisedwithinremuneration. Progressagainstthesetargets,whichare moreprofitablechannelsofrevenue,will enhanceourprofitabilityandunderlying shareholdervalue,whenconsidered alongsideabsoluterevenuegrowth. Links to strategy: Direct-to-consumer first Organisational and operational excellence Consumer connection Support brand expansion with B2B LINKS TO STRATEGIC PILLAR: KEY ASSOCIATED RISKS: LINKS TO STRATEGIC PILLAR: KEY ASSOCIATED RISKS: LINKS TO STRATEGIC PILLAR: KEY ASSOCIATED RISKS: LINKS TO STRATEGIC PILLAR: KEY ASSOCIATED RISKS: STRATEGIC REPORT 31DR. MARTENS PLC ANNUAL REPORT 2024 Totalrevenuedeclined12.3%(9.8%CC) with2.4%growthinDTC(4.9%CC)offset bya28.3%declineinwholesalerevenues (-26.0%CC).Profitbeforetax(beforeFX charge)was£97.2m(FY23:£170.1m),down 42.9%,reflectinglowerEBITDA,increased depreciationandamortisationchargesdueto continuedinvestmentsinnewstoresandIT projects,andhigherrate-ledinterestcosts. Earningspersharedeclinedby45.7%to7.0p. Performance by channel Revenuedecreasedby12.3%to£877.1m (FY23:£1,000.3m),down9.8%onaCC basis.DTCgrew2.4%to£533.1m(FY23: £520.7m),up4.9%onaCCbasis, representing61%ofrevenuemix.Wholesale revenuesdeclined28.3%to£344.0m (FY23:£479.6m),down26%onaCCbasis. Thewholesalechannelwasimpactedboth byplannedstrategicdecisionstoreduce volumesintoEMEAetailersandceasethe distributorcontractinChina,andveryweak wholesaleordersinUSAduetowidespread cautionfromwholesalecustomers.Volume, representedbypairssold,declined17% to11.5mpairswithallthereductionin wholesale;DTCvolumeincreased7%. Ecommercerevenuewasdown1.0%to £276.3m(FY23:£279.0m)andwasup1.0% onaCCbasiswhichrepresentedarevenue mixof32%(FY23:28%).Goodgrowth throughouttheyearinbothEMEA(up9.6% CC)andAPAC(up12.5%CC),wasoffset bycontinuedweaktradinginUSA,(down 9.9%CC).WesawtrafficgrowthinEMEA andAPAC,whilstinUSAtrafficdeclined. Ecommerceconversionimprovedinallthree regions.Followingtheimplementationof anordermanagementsystem(“OMS”) inEMEA,wesuccessfullyrolledoutafull omnichannelofferacrossallUKstores withContinentalEuropetofollowinFY25. FY24 £m FY23 £m % change Actual % change CC 4 Revenue Ecommerce 276.3 279.0 -1.0% 1.0% Retail 256.8 241.7 6.2% 9.5% DTC 533.1 520.7 2.4% 4.9% Wholesale 3 344.0 479.6 -28.3% -26.0% 877.1 1,000.3 -12.3% -9.8% Grossmargin 575.2 618.1 -6.9% Opex (377.7) (373.1) 1.2% EBITDA 1 197.5 245.0 -19.4% Depreciation&Amortisation (72.3) (54.2) 33.4% EBIT 1 122.2 176.2 -30.6% Profitbeforetax(beforeFXcharge) 1 97.2 170.1 -42.9% Profitbeforetax 93.0 159.4 -41.7% Profitaftertax 69.2 128.9 -46.3% Basicearningspershare(p) 7.0 12.9 -45.7% Dividendpershare(p) 2.55 5.84 -56.3% Keystatistics Pairssold(m) 11.5 13.8 -17% No. of stores 2 239 204 17% DTCmix% 61% 52% +9pts Grossmargin% 65.6% 61.8% +3.8pts EBITDAmargin% 1 22.5% 24.5% -2.0pts 1. AlternativePerformanceMeasure(APM)asdefinedintheGlossaryonpages220and221. 2. Ownstoresonstreetsandmallsoperatedunderarm’slengthleaseholdarrangements. 3. Wholesalerevenueincludingdistributorcustomers. 4. ConstantcurrencyappliesthesameexchangeratetotheFY24andFY23non-GBPresults,based onFY24budgetedrates. GILES WILSON CHIEF FINANCIAL OFFICER FINANCE REVIEW We saw a resilient performance in EMEA and APAC, whilst our USA performance was disappointing. RESULTS – AT A GLANCE 32 DR. MARTENS PLC ANNUAL REPORT 2024 Retail revenuegrew6.2%to£256.8m (FY23:£241.7m),up9.5%onaCCbasis. Growthwasledbynewandmaturingstores (storesopenedlastfinancialyear)across allgeographies,withcontinuedfootfall recoveryinEMEAandAPAC,offsetby footfalldeclineinUSA.Wealsobenefitted fromthetransferof14Japanfranchise storesattheendofFY23.Duringtheyear, weopened46newstoresandclosed11 stores,toendtheyearwith239ownstores. Wholesale revenuewasdown28.3%to £344.0m(FY23:£479.6m),26.0%lower onaCCbasis.Aspreviouslyannounced, wetookthreestrategicdecisionswhich impactedwholesalerevenuesthisyear. Firstly,wesignificantlyreducedthequantity andbreadthofproductsoldintoEMEA etailers,inordertoensurescarcityofsupply intheregionandmigratesalestoourown websites.Wealsoceasedsalestoour distributorinChinaaheadofthecontract endinginJune2023,andinUSAwe workedwithtwolargewholesaleaccounts whohadexcessinventory,reducing shipmentsthroughthefirsthalfinorder torightsizetheirinventorypositions. Inadditiontothesestrategicdecisions, revenueswereimpactedbywidespread cautionamongstwholesalecustomers intheUSA,resultinginasignificantly weakerUSAorderbookyear-on-year. Thetotalnumberofwholesaleaccounts globallydecreasedto1.6kafterclosing c.500accountsandopeningc.200 accounts.Totalrevenuesperaccount declinedby18%. EMEA Revenuewasdown2.5%to £431.8m(FY23:£443.0m)anddown 3.0%onaCCbasis.DTCgrewby11.8% (10.7%CC)withretailandecommerce bothup11.8%(11.9%CCand9.6%CC respectively).DTCmixgrewby7.7%pts, withDTCgrowthinallcoremarkets(UK andFrancebothuplowsingle-digits,with Germany,SpainandItalyallupover25% onaCCbasis).DTCgrowthwasoffsetby wholesalerevenuedown19.2%as expected,duetothestrategicdecisionto reducevolumeandbreadthsoldtoetailers. Duringtheyearweopened20newstores: sixstoresinItaly,fourstoreseachin GermanyandUK,twostoreseachinSpain andBelgium,onestoreinFranceandour firststoreinDenmark.Includedinthenew storeopeningsweresixlocationsthatwere closedandrelocatedtomoreprominent positionsinBelgium,GermanyandUK. EMEAEBITDAwasdown3.6%to£140.8m (FY23:£146.1m),withEBITDAmargin 32.6%,0.4%ptslowerthanlastyear, impactedbyforeignexchangeonpurchases andtheopexinvestmentsincludingthe expansionofretailstoresandinvestment inbrandanddemandmarketing. Americas Revenuewasdown23.9%to £325.8m(FY23:£428.2m)(20.2%CC). DTCrevenuewasdown6.9%withlower footfallandtrafficinretailandecommerce respectivelyonlypartlymitigatedbynew andmaturingstoresandbetterconversion acrossbothchannels.DTCmixincreased by8.3%pts.Wholesalerevenuedeclined 32.7%onaCCbasis,partlyduetothe strategicdecisiontomanagedown inventoryofsomeofourlargerwholesale customersbutalsodrivenbywidespread cautionfromwholesalecustomersresulting inweakerorderbooks.Wemaintaineda disciplinedapproachtowholesale,andat theendofthefinancialyeartheaverage inventorypositionofourtoptenUSA wholesalecustomerswasdownaround aquartercomparedtotheprioryear. Duringtheyearweopened7newstores: twoinLAandoneineachWashingtonDC, Miami,Philadelphia,SanAntonioand Denver.Wealsoimprovedpicking automationinourLosAngelesdistribution centre(“LADC”),expandedoperational functionalityandspaceintheNewJersey distributioncentre(“NJDC”)andrelocated ourCanadadistributioncentrefromthe WestCoasttoToronto. Performance by region FY24 £m FY23 £m % change Actual % change CC Revenue EMEA 431.8 443.0 -2.5% -3.0% Americas 325.8 428.2 -23.9% -20.2% APAC 119.5 129.1 -7.4% 0.5% 877.1 1,000.3 -12.3% -9.8% EBITDA 1 : EMEA 140.8 146.1 -3.6% Americas 64.4 100.1 -35.7% APAC 31.7 33.8 -6.2% Supportcosts 2 (39.4) (35.0) 12.6% 197.5 245.0 -19.4% EBITDA 1 marginbyregion: EMEA 32.6% 33.0% -0.4pts Americas 19.8% 23.4% -3.6pts APAC 26.5% 26.2% +0.3pts Total 22.5% 24.5% -2.0pts 1. AlternativePerformanceMeasure(APM)asdefinedintheGlossaryonpages220and221. 2. Supportcostsrepresentgrouprelatedsupportcostsnotdirectlyattributabletoeachregion’soperationsand includingGroupFinance,Legal,GroupHR,GlobalBrandandDesign,Directorsandothergrouponlyrelated costsandexpenses. AmericasEBITDAwas35.7%lowerat £64.4m(FY23:£100.1m)withEBITDA margin3.6%ptslowerthanlastyear, reflectinglowerrevenuetogetherwith additionalstoragecostsof£13.1mdueto theelevatedinventorylevelsinthismarket. APAC Revenuewasdown7.4%to £119.5m(FY23:£129.1m)(+0.5%CC). WesawlowerrevenueinChinaduetothe plannedexitofthedistributorcontractin June2023andinJapanwetransferred14 franchisestoresattheendoflastfinancial year;thesetwofactorsdroveAPAC wholesalerevenuedown24.0%ona CCbasis.DTCrevenuesgrew18.8%, improvingDTCmixby10.4%pts,with bothretailandecommercegrowing double-digits.ThiswasledbyJapanwith DTCrevenuesup35.5%withboth underlyinggrowthandthebenefitofthe franchisestorestransferattheendofFY23. Duringtheyearweopened19newstores withsixstoreseachinJapanandSouth Korea,fiveinChinaandtwoinHongKong. APACEBITDAwasdown6.2%to£31.7m (FY23:£33.8m)andEBITDAmarginup 0.3%ptsduetoincreasedmixfromJapan (ourmostprofitablemarket),partlyoffsetby lowerEBITDAinChina(asaresultoflower distributorrevenueintheperiodacrossa fixedcostbase). STRATEGIC REPORT 33DR. MARTENS PLC ANNUAL REPORT 2024 Retail store estate Duringtheyear,weopened46(FY23:52)newownretailstores (viaarm’slengthleaseholdarrangements)andclosed11(FY23:6) storesasfollows: 1 April 2023 Opened Closed 31 March 2024 EMEA: UK 33 4 (2) 35 Germany 17 4 (2) 19 France 16 1 – 17 Italy 6 6 – 12 Spain 4 2 – 6 Other 12 3 (2) 13 88 20 (6) 102 Americas: 54 7 – 61 APAC: Japan 40 6 (3) 43 China 5 5 (1) 9 SouthKorea 11 6 – 17 HongKong 6 2 (1) 7 62 19 (5) 76 Total 204 46 (11) 239 TheGroupalsotradesfrom22(FY23:28)concessioncounters indepartmentstoresinSouthKoreaandafurther77(FY23:119) mono-brandedfranchisestoresaroundtheworldwithnostoresin FINANCE REVIEW CONTINUED China(FY23:55,thedeclinebeingduetotheendofthedistributor contract),19inJapan(FY23:16),24acrossAustraliaandNew Zealand(FY23:20),34acrossotherSouthEastAsiacountries, theNordicsandCanada(FY23:28). Analysis of performance by half year RevenueinH2wasdown17.3%to£481.3m(FY23:£581.7m)(down 14.5%CC)withEBITDAdown23.2%to£119.9m(FY23:£156.2m). Ecommercerevenuewasup5.1%inH1anddown1.0%inH2ona CCbasis.Inretail,revenuegrewinbothhalvesofthefinancialyear ledbynewandmaturingstoresandcontinuedfootfallrecoveryin bothEMEAandAPAC.BothEMEAandAPACwereimpactedby strategicdecisions,ofreducingEMEAetailervolumesandceasing thedistributorinChinarespectively.InAmericas,revenuewasdown inbothhalvesasexpected,predominantlydrivenbywholesale. H1 FY24 H2 FY24 Actual CC Actual CC Total Revenue -5.4% -3.5% -17.3% -14.5% Channel: Ecommerce 3.3% 5.1% -2.9% -1.0% Retail 15.1% 17.4% 0.9% 4.6% DTC 9.2% 11.3% -1.2% 1.5% Wholesale 1 -16.5% -14.7% -40.0% - 37.4% Region: EMEA 8.5% 7. 5% -10.0% -10.1% Americas -17.8% -14.6% -28.3% -24.3% APAC -10.0% -3.3% -5.2% 3.6% 1. Wholesalerevenueincludingdistributorcustomers. Analysis of performance by quarter DTCRevenueinQ4showedareturntogrowthat9.7%CCvsa3.2%CCdeclineinQ3,howeverthisbenefittedfromthetimingofEaster andtheendofseasonsale,whichmovedfromQ1FY25(asistypicallythecase)toQ4FY24.RetailgrewinallquartersonaCCbasisled bynewandmaturingstoresandcontinuedfootfallrecovery,supportedbyvolumegrowthinEMEAandAPAC.Ecommercegrewinthefirst half,declinedinQ3,beforereturningtopositivegrowthinQ4,againhelpedbytimingchanges. WholesalewasdowninallquartersdueacombinationofthestrategicdecisionstakeninEMEAandAPAC,togetherwiththecontinued challengingbackdropintheUSA. Q1 Q2 Q3 Q4 Actual CC Actual CC Actual CC Actual CC Total Revenue -11.0% -11.2% -2.2% 1.3% -20.5% -17.9% -12.9% -9.8% Revenue: Ecommerce 7. 3% 6.8% 0.1% 3.8% -9.3% -7.6% 9.5% 11.8% Retail 27.4% 27. 2% 5.6% 9.5% -0.1% 2.9% 2.6% 7.4% DTC 17.4% 17. 1% 2.9% 6.7% -5.4% -3.2% 6.2% 9.7% Wholesale 1 -41.1% -41.0% -5.3% -2.1% -48.6% -46.1% -31.7% -29.3% Region: EMEA -1.4% -2.7% 13.8% 13.1% -14.5% -14.9% -3.0% -2.6% Americas -26.3% -26.5% -12.3% -6.3% -30.8% -26.3% -25.2% -21.9% APAC 12.2% 16.1% -21.7% -13.9% -8.0% -1.1% -1.9% 9.0% 1. Wholesalerevenueincludingdistributorcustomers. 34 DR. MARTENS PLC ANNUAL REPORT 2024 EBITDA analysis Gross marginimprovedby3.8ptsto65.6%withthebiggest benefitbeingfromsupplychainsavings,togetherwiththebenefits ofnewandmaturingstoresandpricenetCOGSinflation.Inthe year,theaveragepriceincreasewas4.5%andCOGsinflation wasapproximately6%. Operating expensesincreasedby1.2%,or£4.6m,to£377.7m. Withinthismovementwebenefittedfromsupplychainsavings, whichwereoffsetbytheoperatingcostdragfromnewandmaturing stores,togetherwithasmallyear-on-yearincreaseinmarketing spend.Thesupplychainsavingsweretheresultofcontinued goodcostcontrol,includinglowervolume-relatedcostsandretail outboundfreightsavings.Withinouroperatingcostsweincurred £13.1m(FY23:£14.5m)inrelationtotemporaryinventorystorage spacerentedinLA,giventheelevatedinventorylevelsinthismarket. EBITDAdecreasedby19.4%to£197.5m(FY23:£245.0m) resultinginanEBITDAmargindecreaseof2.0ptsto22.5%. Increasedcosts(asapercentageofrevenue)werepartially offsetbysupplychainsavings. EBITdecreasedby30.6%to£122.2masaresultofthedecline inEBITDAtogetherwithincreaseddepreciationandamortisation. Earnings ThefollowingtableanalysestheresultsfortheyearfromEBITDA toprofitbeforetax. £m FY24 FY23 EBITDA 1 197.5 245.0 Depreciationandamortisation (72.3) (54.2) Impairment – (3.9) Othergains 1.2 – Foreignexchangelosses (4.2) (10.7) EBIT 1 122.2 176.2 Netinterestcostonbankdebt (19.4) (10.8) Amortisationofloanissuecosts/interest onleaseliabilities (9.8) (6.0) Profit before tax 93.0 159.4 Tax (23.8) (30.5) Earnings 69.2 128.9 1. AlternativePerformanceMeasure(APM)asdefinedintheGlossaryonpages220 and 221. Profit before tax(includingFXcharge)declinedby41.7%to £93.0m(FY23:£159.4m)withprofitaftertaxof£69.2m(FY23: £128.9m).ThiswasprimarilyduetolowerEBITDAtogetherwith higherdepreciationandamortisationcostsandhigherinterestcosts. Depreciationandamortisationchargedintheperiodwas£72.3m (FY23:£54.2m),andisanalysedasfollows: £m FY24 FY23 Amortisationofintangibles 1 5.8 8.4 Depreciationofproperty,plant andequipment 2 15.2 13.6 21.0 22.0 Depreciationofright-of-useassets 3 51.3 32.2 Total 72.3 54.2 1. MainlyrepresentedbyITrelatedspendwiththeaveragetermof5to15years. 2. Mainlyrepresentedbynewstorefitoutcostswiththeaveragetermof5years. 3. MainlyrepresentedbydepreciationofIFRS16capitalisedleaseswiththeaverage termremainingof3.8yearsand263properties(FY23:5.1yearsand229properties). Foreign Exchange Dr.Martensisaglobalbrandsellingtoconsumersacrosstheworld inmanydifferentcurrencies,withthefinancialstatementsreported inGBP.Foreigncurrencyamountsintheprofitorlossaccountare preparedonanaverageactualcurrencyratebasisfortheyear.These exchangeratesarecalculatedmonthlyandappliedtorevenueand costsgeneratedinthatmonth,suchthattheactualperformance translatedacrosstheyearisdependentonmonthlytradingprofiles aswellasmovementincurrencyexchangerates.Toaid comparabilityofunderlyingperformance,wehavealsocalculated constantcurrencyforrevenue.Thisiscalculatedbytranslating non-sterlingrevenuesatthesameexchangerateyearonyear. ForeignexchangeexposuresmainlyimpactingtheGroupare£/$, £/€and£/¥.Thefollowingtablesummarisesaverageexchangerates usedintheyear: £/$ £/€ £/¥ FY24 FY23 % FY24 FY23 % FY24 FY23 % H1 1.26 1.22 3% 1.16 1.17 -1% 178 163 9% H2 1.26 1.19 6% 1.16 1.14 2% 186 163 14% FY 1.26 1.21 4% 1.16 1.16 0% 182 163 12% TheGrouptakesaholisticapproachtoexchangeraterisk, monitoringexposuresonaGroup-wide,netcashflowbasis,seeking tomaximisenaturaloffsetswhereverpossible.WhileCOGs purchasesfortheGrouparepredominantlydenominatedinUSD, foreignexchangeriskonthiscurrencyispartiallyoffsetfromUSD revenuesearnedinAmericasandfromdistributorrevenues,which arealsolargelyUSDdenominated.Whereanetforeigncurrency exposureisconsideredmaterial,theGroupseekstoreducevolatility fromexchangemovementsbyusingderivativefinancialinstruments. Duringtheperiod,a£1.5mgainwasrecordedinrevenuesrelatedto derivativespartiallyhedgingthenetEURinflows. Retranslationofforeigncurrencydenominatedmonetaryassets andliabilitiesintheyearresultedinaforeignexchangelossof £4.2m(FY23:loss£10.7m).Thiswaspredominantlyduetothe revaluationofreceivablebalancesfollowingtheappreciationof GBPagainstEURandUSD. STRATEGIC REPORT 35DR. MARTENS PLC ANNUAL REPORT 2024 Interest TheGroup’sexposuretochangesininterestratesrelatesprimarily tocashinvestments,borrowings,andIFRS16leaseliabilities. TotalGroupinterestcostsfortheyearwere£29.2m,£12.4mhigher thanprioryear(FY23£16.8m)primarilyduetoincreasesinbank debtrelatedborrowingexpensesof£22.3m(FY23:£12.7m). Theincreasecomparedtotheprioryearwasdrivenfromahigher benchmarkEURIBORrateandinterestcostsofthein-yeardrawn RCFamounts.Thiswaspartiallyoffsetbya£1.3mgainonhigher interestreceivablesfromcashinvestments.Inaddition,weincurred higherinterestcostsonleaseliabilitiesof£3.8mduetonewstores openedintheyear. The tax chargewas£23.8m(FY23:£30.5m)withaneffectivetax rateof25.6%(FY23:19.1%)whichisslightlyhigherthantheUK corporatetaxrateof25.0%,duemainlytooverseastaxratesand deferredtaxontemporarydifferences.Theeffectivetaxratewas higherthanlastyearduetotheincreaseinUKtaxratefrom19.0% to25.0%on1April2023. Earnings per sharewas7.0p(FY23:12.9p).Thetotalnumber ofdilutedsharesisdetailedinnote9inthefinancialstatements. ThefollowingtablesummarisestheseEPSfigures: FY24 pence FY23 pence % change Earningspershare Basic 7.0 12.9 -46% Diluted 7.0 12.9 -46% EPSanddilutedEPSforthecurrentandprioryeararepresentedas thesameamountduetotheminimaldilutiveimpactofshareoptions onthetotaldilutedsharenumber. Operating cash flow £m FY24 FY23 EBITDA 1 197.5 245.0 Increaseininventories (1.6) (133.2) Decrease/(increase)indebtors 23.0 (6.6) Increaseincreditors (37.7) (9.2) Totalchangeinnetworkingcapital (16.3) (149.0) Share-basedpayments 4.0 0.5 Capitalexpenditure (28.4) (51.2) Operating cash flow 1 156.8 45.3 Operating cash flow conversion 1 79% 18% 1. AlternativePerformanceMeasure(APM)asdefinedintheGlossaryonpages220 and 221. Operating cash inflowwas£156.8m(FY23:£45.3m)representinga cashconversionofEBITDAof79%(FY2318%),inlinewithguidance. Tradedebtordaysremainedat52days,primarilyduetocustomermix withahigherproportionofAmericasdebtors(withdebtordaysat55) thanEMEA(withdebtordaysat48). Capexwas£28.4m(FY23:£51.2m)andrepresented3.2%ofrevenue (FY23:5.1%).Thebreakdownincapexbycategoryisasfollows: £m FY24 FY23 Retailstores 14.4 18.9 SupplyChain 2.7 19.2 IT/Tech 11.3 13.1 28.4 51.2 Net cash flow after interest Netcashflowafterinterestcostsissummarisedbelow: £m FY24 FY23 Operating cash flow 1 156.8 45.3 Netinterestpaid (17.0) (5.6) Investment – (1.0) Paymentofleaseliabilities (52.2) (33.9) Taxation (18.8) (22.3) Repurchaseofshares (50.5) – Derivativessettlement (4.0) 3.1 Dividendspaid (57.8) (58.4) Net cash outflow (43.5) (72.8) Openingcash 157.5 228.0 Netcashexchangetranslation (2.9) 2.3 Closing cash 111.1 157.5 1. AlternativePerformanceMeasure(APM)asdefinedintheGlossaryonpages220 and 221. Net interest paidwas£17.0m,higherthanFY23by£11.4mdue tothetimingofinterestpaymentsandhigherinterestrates,which werepartiallyoffsetbyhigherinterestreceivablesfromcash investments.Theincreaseinleaseliabilitieswasduemainlytothe increasednumberofretailstoresopenedintheperiodunderlease arrangementsandincreasedspaceacrosstheDCnetwork. Funding and Leverage TheGroupisfundedbycash,bankdebtandequity.Furtherdetails onthecapitalstructureanddebtaregiveninnote17ofthefinancial statements.TheGroup’sbankdebtisdenominatedinEuroswhich allowstheexcessEurostheGroupgeneratesfromtradingin ContinentalEuropetofundinterestcosts.Thebankdebtfallsduefor repaymentinfullon2February2026.TheGroupalsohasarevolving creditfacilityof£200.0mwhichalsomatureson2February2026 with£30.0mdrawndownandsubsequentlyfullyrepaidduringthe period.Includedinthisfacilityisacommittedlineof£3.4musedfor guaranteearrangementsprimarilyforlandlordrentguarantees. Thegroupfinancingarrangementsaresubjecttoatotalnetleverage covenanttesteverysixmonths.Thetotalnetleveragetestiscalculated withafull12monthsofEBITDAandnetdebtbeinginclusiveofIFRS16 leaseliabilitiesatthebalancesheetdate.At31March2024the Grouphadtotalnetleverageof1.8times(FY23:1.2times). FINANCE REVIEW CONTINUED 36 DR. MARTENS PLC ANNUAL REPORT 2024 Balance sheet £m 31 March 2024 31 March 2023 Freeholdproperty 7.0 7.4 Right-of-useassets 173.5 144.1 Otherfixedassets 81.7 78.8 Inventory 254.6 2 5 7.8 Debtors 70.4 92.2 Creditors 2 (100.7) (133.7) Workingcapital 224.3 216.3 Other 1 (1.5) 5.2 Operating net assets 485.0 451.8 Goodwill 240.7 240.7 Cash 111.1 157.5 Bankdebt (288.6) (296.8) Unamortisedbankfees 2.3 3.4 Leaseliabilities (182.3) (152.4) Net assets 368.2 404.2 1. Otherincludesinvestments,deferredtaxassets,incometaxassets,andprovisions. 2. Includesbankinterestof£8.4m(FY23:£6.0m). Net Debt 1 is summarised below: £m 31 March 2024 31 March 2023 Bankloans (286.3) (293.4) Cash 111.1 157.5 Netbankloans (175.2) (135.9) Leaseliabilities (182.3) (152.4) Net Debt 1 (3 57.5) (288.3) 1. AlternativePerformanceMeasure(APM)asdefinedintheGlossaryonpages220 and 221. Inventory Giventhehighproportionofcontinuityproductswesell,withfour outoffivepairsbeingblackandhavingastrongproductmargin structure,wehaveminimalmarkdownriskbelowcost.Inventory levelsarecurrentlyatelevatedlevelsinourAmericasbusiness. Asaresultwehavereducedpurchasesfortheyearaheadand aretargetingareductionininventoryinFY25. 31 March 2024 31 March 2023 Inventory(£m) 254.6 257. 8 Turn(x) 1 1.2x 1.5x Weekscover 2 44 35 1. CalculatedashistoricLTMCOGSdividedbyinventory. 2. Calculatedas52weeksdividedbystockturn. Equityof£368.2mcanbeanalysedasfollows: £m 31 March 2024 Sharecapital 9.6 Hedgingreserve 0.9 Capitalredemptionreserve 0.4 Mergerreserve (1,400.0) Non-UKtranslationreserve 9.7 Retainedearnings 1 ,747.6 Equity 368.2 Returns to Shareholders Ourcapitalallocationphilosophyguidesourviewofreturns toshareholdersandusageofexcesscash.Thefirstpriorityfor investmentisintothebusinessandwewillcontinuetoinvestina targetedmannertosupportlong-termgrowthandresilienceofthe Group.Thisismainlyrepresentedbyinvestmentintomarketing, logistics,people,systemsandinventory.Beyondthis,ourpriority istoreturnexcesscashtoshareholders,througharegulardividend and,whenpossible,furtherreturns. Dividends TheBoardhasproposed,subjecttoshareholderapproval,afinal dividendof0.99p,takingthetotaldividendforFY24,includingthe interimdividendof1.56p,to2.55p,a35%payoutratio.Whilstthisis ayear-on-yearreductiongiventhehigherpayoutinFY23andlower earningsachievedthisyear,the35%payoutforFY24isatthetopof thepolicyrange.TheBoard’sintentionistoholdtheFY25dividend flatinabsoluteterms,beforereturningtoanearningspayoutinline withourdividendpolicy(of25%to35%payout)inFY26onwards. Goingforwards,theBoardisalsoadoptingaconsistentapproachto settingtheinterimdividend,withthisdividendsetatone-thirdofthe previousyear’stotaldividend.Wearealsoadjustingthepayment datesforthedividends,tobetterreflectthetradingcashprofileofthe Group,andthereforethefinaldividendwillbepaidinearlyOctober. ThefinaldividendforFY24willbepaidtoshareholdersontheregister asat30August2024withpaymenton1October2024. £m FY24 FY23 Earnings 69.2 128.9 Interimdividend(declaredandpaid):1.56p (FY23:1.56p) 15.0 15.6 Finaldividend(proposed):0.99p (FY23:4.28p) 9.5 42.8 Total dividend (paid and proposed): 2.55p (FY23: 5.84p) 24.5 58.4 Payout ratio % 35% 45% Share Buyback Duringtheyearto31March2024theGrouprepurchased39.9m shares.Thecashoutflowwas£50.5m(includingtransaction costsof£0.5m)pursuanttothesharebuybackschemethatwas announcedon14July2023andconcludedon19December2023. Forfurtherdetailspleaserefertonotes23and24ofthe ConsolidatedFinancialStatements. GILES WILSON CHIEFFINANCIALOFFICER 29May2024 STRATEGIC REPORT 37DR. MARTENS PLC ANNUAL REPORT 2024 RISK GOVERNANCE AND OVERSIGHT KEY COMPONENTS BOARD GROUP LEADERSHIP REPORTING AND ESCALATION DIRECTION AND OVERSIGHT RESPONSIBILITIES Strategic oversight responsibility for ensuring risks are identified and managed Robust assessment of principal risks, considering emerging risks and overall risk appetite RESPONSIBILITIES Executive ownership of key risk areas Crisis Management Framework with specific Cyber Incident Management playbook Leads the key first and second line activities, including Finance, Legal and Compliance, Technology and Human Resources Functions and projects • Functional risk registers (e.g. including IT and Cyber, and Global Supply Chain), with reporting and escalation to Group Risk Register • Strategic Portfolio Planning team and forum to prioritise projects and monitor risk Risk themes • Working groups established with focus on specific risk areas, including counter- fraud, artificial intelligence, third-party risk, policies and training Audit and Risk Committee Supports Board on risk and assurance, including ‘risk deep dives’ Independent reports from third line assurance activities – internal audit Regional Risk Committees (Americas, APAC and EMEA) with reporting into ORC Operational Risk Committee (ORC) Oversees Group Risk Register Oversees Crisis Management Framework EFFECTIVE RISK MANAGEMENT ThediagrambelowshowsthekeyelementsoftheDr.Martensapproachtoriskgovernance,includingthe‘bottom-up’and‘top-down’ aspects.Inidentifyingrisks,weconsiderfourbroadcategoriesofrisk:strategic,operational,financial,andlegalandcompliance. Effective risk management drives better commercial decisions, protects our assets, reputation and brand, and supports delivery of our strategy and sustainable business growth. MATT KETTEL HEAD OF INTERNAL AUDIT AND RISK RISK MANAGEMENT AND OUR PRINCIPAL RISKS REGIONS, FUNCTIONS AND PROJECTS 38 DR. MARTENS PLC ANNUAL REPORT 2024 Risk management approach Ourapproachtoriskisanintegratedpartof theoverallgovernanceandmanagementof theGroup,assetoutinmoredetailinthe Governancesection,particularlytheAudit andRiskCommitteeReportonpage134. ThroughoutFY24,wehavecontinuedto matureandembedourriskmanagement process,whichissetoutinmoredetailbelow. Insettingourstrategicpriorities,wetake intoaccounthorizonscanningandexternal thinkingandtheseinsightsalsofeedinto howriskisidentified,assessedand managed,includingforemergingrisks.We considerrisksoverdifferenttimeframes, whichalsoinfluencesresponseandpriority forundertakingfurtheranalysisand potentialaction. TheGroupfollowsthe‘threelinesmodel’ torisk,internalcontrolandassurance. Operationalmanagementandourpeopleare theCompany’sfirstline,astheyareprimarily responsibleforthedirectmanagementofrisk andensuringthatappropriatemitigating controlsareinplaceandoperatingeffectively. Thesecondlineisformedbytheinternal complianceandoversightfunctionssuchas Finance,LegalandCompliance,Technology andHumanResources.Thethirdline includestheInternalAuditteam,reporting totheAuditandRiskCommittee. Risk appetite Werecognisetheneedforinformed risk-takinginordertodeliversustainable andprofitablebusinessgrowth,andourrisk appetitevariesacrossdifferentprincipal risks,whicharesetoutonpages40to43. Ourriskappetiteacrossdifferentareas informstheGroup’sriskandcontrol frameworkandday-to-daycontrolactivities. Examplesoftheseactivitiesinclude: • Adherencetodelegationofauthority, includingcommercial,financialandlegal decisionsandapprovals • Ongoingbusinessperformance monitoring,includingmonthlyreviews • Strategyandplanning(annualand five-yearplans) • Developmentofcontingencyplans andconsiderationofbestandworst casescenarios • Identificationandongoingmonitoring ofriskthroughGroupandRegional RiskCommittees • Analysisofappropriateinsurancecover againstriskappetite • Financialcontrolsdefinedandbuiltinto keysystems,includingdevelopingthese tomeetpotentialfuturerequirementssuch asUKcorporategovernancereforms • Compliancepolicies,guidanceandtraining Principal risks Foreachprincipalrisk,wehavereviewed andupdatedtheriskdescriptions,impacts oftherisks,riskappetiteandmitigating actions.Wehavealsoassessedthelevelof riskcomparedtothepreviousfinancialyear. ForFY24,throughtheBoardandAuditand RiskCommitteereviews,anewprincipal risk,‘Macroeconomicuncertainty’,hasbeen added.Althoughitwaspreviouslyreferenced withinabroader‘Financial’principalrisk, giventheongoingchallengesand uncertaintiesrelatedtothemacroeconomic environment,thishasbeendisclosedasa separateprincipalrisk. TheBoardconfirmsthatithascarriedout arobustassessmentoftheCompany’s emergingandprincipalrisks.Setoutbelow istheBoard’sviewoftheprincipalrisks currentlyfacingtheCompany,alongwith examplesofhowtheymightimpactusand anexplanationofhowtherisksare managedormitigated.Wealsoindicatethe linktoourstrategicprioritiesonpages22 to29.AnexplanationofhowtheCompany managesfinancialrisksisalsoprovided innote21tothefinancialstatements. WerecognisethattheGroupisexposed toriskswiderthanthoselisted.However, wehavedisclosedthosethatwebelieve arelikelytohavethegreatestimpacton theGroupdeliveringitsstrategicobjectives. Alongsidethenewprincipalrisk, ‘Macroeconomicuncertainty’,thereare tworiskswherethepotentialimpacthas increased,andoneriskwherethepotential impacthasdecreased.Wehaveindicated thetrendforeachrisk,basedonthe changesfromtheprioryear,aswellas lookingforwardstofuturepotential changesinrisk. MACROECONOMIC UNCERTAINTY Giventheprolongedchallengesand uncertaintywiththemacroeconomic environment,thishasbeendisclosedasa separateprincipalrisk.Theongoingcost-of- livingcrisis,geopoliticaluncertaintyin Israel/GazaandRussia/Ukraine,coupled withupcomingelectionsacrossmajor globalpowers,arelikelytohavea continuedimpactonmacroeconomic conditionsinourkeymarkets. BRAND AND PRODUCT Coupledwiththeexternalmacroeconomic uncertaintyandinflationarypressures reducingconsumerdemandandspend, thebrandandproductriskhasincreased, impactedbythechallengingmarket conditions,particularlyintheUSA.AChief BrandOfficerwasappointedinFebruary 2024,withaleadingroleinsettingthe overallbrandstrategy,visionanddirection forthenextphaseofgrowth. SUPPLY CHAIN Thepotentialimpactofsupplychain riskhasdecreasedasaresultofgood progressmadeinfurtherimprovingthe resilienceandagilityofsupplychain activitiesfromprioryear.Thisincludes improvedmanagementoftheUSA distributioncentreactivitiesandthe successfulrelocationoftheCanadian distributioncentre. PEOPLE, CULTURE AND CHANGE Withchangesinseniorleadership,thereis anincreaseinthisrisk.Whilechangesin leadershipcancreateuncertaintyamongst thewiderorganisation,theyalsoprovidea goodopportunityforrefreshandtransition. CHANGES TO PRINCIPAL RISKS IN THE YEAR CLIMATE RISK In FY24, we continued to build on the work of previous years to develop our understanding of the potential impact of climate change risk on Dr. Martens. Having carried out this analysis, which is set out in more detail on page 82 in our TCFD Report, we continue to consider climate risk as a key component of the social and environmental risk, rather than a separate principal risk. We also recognise that climate change is one of the drivers of other principal risks, including brand and product, supply chain, and legal and compliance. The approach to identifying and assessing climate risks and opportunities is broadly consistent with the way we identify and prioritise all risks, considering impact and likelihood of a number of potential risk events. However, we recognise that for climate risks the timeframes are often longer than many other risks. Therefore, as well as estimated likelihood of a risk event occurring, we considered the velocity of risks, i.e. the potential timeframe for when a risk event might occur. Our priority climate- related risks and opportunities are set out in more detail in our TCFD section. STRATEGIC REPORT 39DR. MARTENS PLC ANNUAL REPORT 2024 Risk trend: No change Increased Decreased Slight increase Slight decrease RISK MANAGEMENT AND OUR PRINCIPAL RISKS CONTINUED BRAND AND PRODUCT Wefailtodevelopandprotectour brandandproduct SOCIAL AND ENVIRONMENTAL Oursustainabilitystrategyand programmefailtodeliverordonot meetstakeholderexpectations Risk impact • Brandisnolongerperceivedasrelevantwithconsumers • Negativemediaorsocialmediacoveragedamagesourbrand • Counterfeitorlookalikeproductimpactsoursalesandbrand • Seriousqualityorproductregulatorycomplianceissuesresulting inproductrecallorcompensationtoconsumers How we manage the risk • Researchonconsumerinsightsandtrends • Monitoringofbrandhealthbykeymarketandconsumersegment • Marketingactivitytomaximisebrandvalueandexposure,for example,thenewbrandandmarketingplatform,MadeStrong • Focusedbrandinvestmentinkeyglobalcities,forexample,the 14XXlaunchandactivationplan • Productinnovationtostayonestepaheadandalleviateany counterfeitrisk • ChiefBrandOfficerappointed • Monitoringandrespondingtosocialmediaandcustomer serviceissues • Intellectualpropertyexpertisewithrobustenforcementstrategy • Robustqualityandtestingprocessonproduct Risk appetite • Balancedriskappetiteinordertoinnovate,deliverourstrategy andstayrelevantwithconsumers • Supportedbyprocessestoavoidormitigateanybrandand intellectualpropertyprotectionrisk,wherepossible Read more about this risk • Ourbrandandproductsonpage4 • Howwecreatevalueonpages16and17 • Stakeholderengagement–Consumersonpage20 • Deliveringagainstourstrategyonpages22and23 • Sustainability–Productonpages56to62 Risk impact • Non-complianceorreputationalconcernsinsupplychain potentiallydamagethebrandresultinginlowersales • Ourproductandbusinessactivitiesfailtokeeppacewith consumers’socialandenvironmentalexpectations,resulting inlowersalesgrowth • Emergingrisk:Climatechangeimpactsuponourbusiness orasaresultofourbusinessoperations How we manage the risk • Sustainabilityprogrammeandsupportingroadmap withoversightbytheSustainabilityCommittee • Widerangeofstakeholdersinvolvedindeveloping anddeliveringoursustainabilityprogramme • Externaladvicetoensureweadoptgoodpractices,for example,humanrightsimpactanalysisperformedwithinput fromexternaladvisers • Investmentinatooltoassistwithcarbonemissionsdata managementandanalysis • SuccessfullaunchofrepairserviceintheUK,ReWair,ournew resaleplatformintheUSA,andGenixNappareclaimedleather • Externalassuranceoverkeythird-partymanufacturers, includinghumanrightsstandards,modernslaverycompliance andourSupplierCodeofConduct • EnvironmentalcertificationforMadeInEnglandfactory • Furtherdevelopinganassessmentofclimaterisksandpotential impactsandmitigations Risk appetite • Lowriskappetiteconsideringconsumerexpectationsandclimate changeimpacts • Thelonger-termnatureofsomesustainabilityrisksandthelevel ofuncertaintyassociatedwiththeiroccurrenceandimpactmeans thatweacceptahigherlevelofrisk Read more about this risk • Stakeholderengagementonpages18to21 • Sustainabilitysectiononpages46to74 Change from FY23 Change from FY23 40 DR. MARTENS PLC ANNUAL REPORT 2024 Links to strategy: Direct-to-consumer first Organisational and operational excellence Consumer connection Support brand expansion with B2B PEOPLE, CULTURE AND CHANGE Wefailtoattract,retainanddevelop talentandcapabilitiesrequired todeliverbusinessstrategy SUPPLY CHAIN Wefailtodeliverthesupplychain activityrequiredtosupportbusiness growthandconsumerdemand Risk impact • Failuretoattract,retainanddeveloptalentandcapabilities requiredtodeliverbusinessstrategy • Safetyandsecurityissuesaffectingourstafforcustomers • Levelofongoingtransformationandchangemeansthat programmesandprojectsarenotsuccessfulorbusiness asusualactivitiesarenegativelyimpacted • Culturedoesnotsuccessfullyevolveasbusinessgrows How we manage the risk • Rigorousprioritisationofprojectsandprogrammes,facilitated bytheStrategicPortfolioPlanningTeam,toensuresuccessful executionoftheDOCSstrategy • Quarterlystrategicportfolioreviewtogoverndeliveryof strategicprojects • Seniorleadershipmonitoringandoversightofallsignificant changeprogrammes • Diversity,equityandinclusionprogrammewith dedicatedresources • Regularengagementemployeesurveyswithactionplans • Allemployeeshareschemetoallowemployeestoshare inthefuturesuccessofthebusiness • Talentmanagementprocess • Developmentofleadershipbehavioursframework • Successionplanningassessmentandprocess • Inductionandonboardingprocess Risk appetite • Overallbalancedriskappetiteinordertogrow,innovate andrespondtonewchallengesandopportunities • Verylowriskappetiteforpeoplesafetyrisks Read more about this risk • Stakeholderengagement–Ourpeopleonpage19 • Sustainability–Peopleonpages63to72 • NominationCommitteeReportonpages108to115 • Section172Reportonpages18to21 Risk impact • Capacityrestrictionsinmanufacturinganddistribution • Globaltraderestrictionsandduties • Logisticsandshippingdisruptioncausinganincreasein operatingcosts • Rawmaterialpricesincreaseourcostofproduction How we manage the risk • Diversifiedsupplierbaseacrossdifferentmarkets • Establishedalternativesuppliersandabilitytosourceadditional capacityifrequired • Effectivepartnershipandrelationshipmanagementwiththirdparties • Externalassuranceoverkeythird-partysuppliers • Rigorousforwardplanningincludingcontingencyfor unexpectedevents • Furtherinvestmentinimprovedsystems • Reviewofregulatorylandscapeaffectingrawmaterials • Negotiatedfixedratesandcapacitywithcarriers • Warehousinganddistributioncapacityadjustedtomeet forecast demand Risk appetite • Moderateriskappetiteforthisrisk,asastableandresilientsupply chainisnecessaryfordeliveringourcoreproductstomeet consumerdemandandsupportbusinessgrowth • Theriskismitigatedthroughageographicspreadoffactoriesand managementofstock.However,itisrecognisedthereisabalance betweentheinvestmentrequiredtoreduceriskandtheamount ofriskanduncertaintyweacceptduetoexternalfactorsthatare largelyoutsideourdirectcontrol Read more about this risk • Stakeholderengagement–Suppliersonpage21 • Sustainability–Responsiblymanagingoursupplychainonpages 64and65 • Ourstrategyinaction–Enhancingoursupplychainonpages24 and25 • Sustainability–Oursupplychainonpage55 Change from FY23 Change from FY23 STRATEGIC REPORT 41DR. MARTENS PLC ANNUAL REPORT 2024 Risk trend: No change Increased Decreased Slight increase Slight decrease RISK MANAGEMENT AND OUR PRINCIPAL RISKS CONTINUED INFORMATION AND CYBER SECURITY Wefailtomaintainthe confidentiality,integrityand availabilityofkeyinformation FINANCIAL Wefailtoadequatelyforecastand managefinancialrisks,including meetingexternalreporting requirements Risk impact • EcommerceorotherkeyITsystemsarethetargetofcyberhacking orprolongeddisruptionwithpotentialtonegativelyimpactrevenue andoperatingcosts • TheftorlossofsensitiveCompany,consumeroremployeedata, resultinginnegativereputationalimpactandpotentialfinesand legalcosts • Prolongedsystemoutagemayresultinfailuretodeliveronkey businessactivities How we manage the risk • DedicatedGlobalSecurityTeam • ContinuedexecutionoftheCyberSecurityprogrammeandstrategy • Maturingidentitymanagement–privilegedaccountmanagement (PAM)andmulti-factorauthentication(MFA)atalllevels • ImplementationofnewManagedDetectionandResponse (MXDR)service,providingend-to-endsecurityvisibility • Activemonitoringofcorebusinessapplicationsand end-userdevices • Cyberriskmaturitymeasuredagainstrecognisedframework (NIST–NationalInstituteofStandardsandTechnology)with targetstodrivecontinuousimprovement • Cyberincidentresponseprocessmanagedthroughexternal partnersandGlobalSecurity • Third-partysuppliermanagementthroughvendorrisk assessmentreviews Risk appetite • Lowriskappetiteforthisriskasweseektominimisethelikelihood andimpactofanybusiness-criticaltechnologyfailure • Itisrecognisedthatthereisacost-benefittrade-offinmitigating cyberthreatsandwewillthereforeacceptalowlevelofriskrather thanattemptingtoeliminateallrisk • Verylowriskappetitefordataprivacy,asweaimtoprotectourdata robustlyandinlinewithprivacyregulationsandrecognisedpractice Read more about this risk • AuditandRiskCommitteeReportonpages134to143 Risk impact • Foreignexchangemovementsareunfavourableandimpact liquidityandcashflow • Interestrateriskonexternalbankdebtwithapotentialriskofbreach ofcovenants • Potentialincreaseintheriskofinternalorexternalfraud • Failuretomeetforecastsandfinancialguidancetothemarketcan negativelyimpactsharepriceandinvestorconfidence • Non-compliancewithfinancialreportingrequirementsandinternal controlattestations How we manage the risk • Robustfinancialmanagementframeworkwithdetailedreporting andforecasting • Detailedcashflowforecastingincludingmonitoringcompliance withcovenants • SinglefinanceERPsystemacrossmajorityofmarkets • Selectedhedgingofforeignexchange • Continuedfocusoninternalcontrolsoverfinancialreporting • Fraudriskassessmentwithaccountabilityforkeyfraudrisks • Dedicatedresourcetodealwithpaymentrelatedfraud Risk appetite • Lowriskappetiteforthisriskandproactivelymanageit througharangeofmethods,includingarobustfinancial managementframework • Thepotentialnegativeimpactonthebusinessfromafinancial failurereinforcesourcommitmenttoimplementandmaintain strongfinancialreportingandinternalcontrolmeasuresacross thebusiness Read more about this risk • Financereviewonpages32to37 • AuditandRiskCommitteeReportonpages134to143 • Note21(Financialinstruments)tothefinancialstatements onpages191to194 Change from FY23 Change from FY23 42 DR. MARTENS PLC ANNUAL REPORT 2024 NEW Links to strategy: Direct-to-consumer first Organisational and operational excellence Consumer connection Support brand expansion with B2B LEGAL AND COMPLIANCE Wefailtocomplywithkeylaws andregulations MACROECONOMIC UNCERTAINTY Wefailtomanageandeffectively respondtochanging macroeconomicconditions Risk impact • Potentialincreaseintheriskofbriberyorcorruption • Tradesanctionsnon-compliance • Anti-competitivebehaviour • Dataprotectionnon-compliance • Potentialfinesandreputationaldamage How we manage the risk • Positivetonefromthetopcascadeddowntoteamsandemployees • Codeofconduct(theDOCtrine)sharedwithallemployees • Policies,proceduresandmandatorytrainingcoveringkey compliancerisks • Rigorousthird-partyduediligenceprocess • ‘SpeakUp’processfacilitatedbyanindependentthirdparty • DedicatedCompliance,andHealth&SafetyTeamandprogramme • Dataprivacyprogrammeincludingcompliancewithapplicable locallaws Risk appetite • Verylowriskappetiteforcompliancerisksandwearecommitted toethicalandlawfulbehaviourinallwedo • Colleaguesandbusinesspartnerswhosupportusoractonour behalfareexpectedtotakeappropriatestepstocomplywith applicablelawsandregulations • Personalinformationandprivacyisrespectedandvalued,aswe seektocomplywithlaws,rulesandregulatoryrequirementsacross alljurisdictionsinwhichweoperate • Lowriskappetiteforlegalrisks,recognisingtherewillbetimes whenwetakesomecommerciallegalrisks,providedwehave appropriateinternallegalapproval,supplementedwithexternal advicewhererequired Read more about this risk • Section172StatementonMeetingtheneedsofourstakeholders onpages18to21 • OurGovernanceframeworkonpages85to107 • AuditandRiskCommitteeReportonpages134to143 Risk impact • Recessionorpooreconomicperformancenegativelyimpacts onconsumerdemandandspend,resultinginlowersales andprofitability • Inflationnegativelyimpactsourcostbaseandconsumers’ discretionaryspend How we manage the risk • Monthlysalesandoperationsplanning(S&OP)reviewsand anyresultingactions • RegularBoardreviewofeconomiclandscape • Negotiatedratesandcommittedavailabilitywithsuppliers • Globalcostmanagementreviewincludingopportunitiesforfurther productmanufacturingcostsavings • Budgets,plansandviabilityassessmentsconsiderarangeof scenariosincludingmacroeconomicfactors • Proactiveresponsetoexternalthreatsandchallenges Risk appetite • Changesintheglobaleconomyaredifficulttopredictanditis recognisedthatexternalfactorscanbemoredifficulttomitigate, astheyarelargelyoutsideourdirectcontrol.Thereisabalance betweentheinvestmentrequiredtoreduceriskandtheamount ofriskanduncertaintyweaccept,whichrequiresustoberesilient, whileremainingagiletorespondeffectively Read more about this risk • Markettrendsandopportunitiesonpage14and15 • Viabilityassessmentandgoingconcernonpages44and45 • AuditandRiskCommitteeReportonpages134to143 Change from FY23 STRATEGIC REPORT 43DR. MARTENS PLC ANNUAL REPORT 2024 Viability Statement InaccordancewiththeUKCorporate GovernanceCode,theDirectorshave assessedtheviabilityoftheGroupovera three-yearperiodto31March2027(the ‘viabilityassessmentperiod’),whichis longerthanthe12-monthperiodfromthe dateofsigningtheconsolidatedfinancial statements(‘thegoingconcernperiod’),as itprovidesanappropriatemidpointbetween theGroup’sshortandlong-termplanning phasesandisatypicalandcomparable periodforabusinessofthisnaturetobe assessedover. Aspartofthiscomprehensiveassessment, theDirectorshaveanalysedtheprospects oftheGroupbyreferencetoitscurrent financialposition,recenttradingtrendsand momentum,detailedtradingandcashflow forecastsincludingforecastliquidityand covenantcompliance,strategy,economic modelandtheprincipalrisksandmitigating factorsdescribedonpages40to43. Group planning process Ournormalplanningprocessconsists ofarigorousreviewoftheDOCSstrategy (describedonpages22and23)bythe GlobalLeadershipTeam(GLT)onan annualbasis,andthisformsthebasisfor assessingthelonger-termprospectsof theGroup,followingwhichanupdated long-term5yearfinancialplanisderived andreviewedwiththeBoard. Beforethebeginningofanewfinancialyear, adetailed,bottom-upbudgetisprepared withthoroughreviewanddiscussion betweeneachregion’sPresidentandCEO, CFO,CBOandCOO,andpresentation anddiscussionwiththeGLT,followedby theBoard.Wemonitorourperformance throughthefinancialyearagainstthis budgetandprioryearactualperformance withaformalre-forecastprocessconducted asrequired.Theplanningforthethree-year periodisassessedbymonthandincludes investments,plansandactions. Thekeyassumptionsconsideredinall reviewsare: • tradingperformancebychannel; • tradingperformancebyproduct andgeography; • coststoprocureandproduce ourproducts; • otherexpenditureplans;and • cashgeneration. Wealsoconsiderprojectedliquidity, BalanceSheetstrengthandpotential impactonshareholderreturns. Trading outlook InevaluatingtheviabilityoftheGroup,we recognisetheimportanceofcontextualising ourassessmentwithinthebroader macroeconomicenvironment.FY24started withacontinuingchallengingglobal macroeconomicbackdropandweak consumersentimentparticularlyinthe Americas.Weareseeinggrowing divergencesofimpactsonourcoremarkets makingitachallengetoreturntopre- pandemicgrowthwithinflationarypressures, fluctuatinginterestratesandincreasedcost oflivingexacerbatedbygeopolitical tensions,fuelpricevolatilityandthethreat ofclimatechange. InadditiontothewarinUkraine,thereis heightenedvolatilitywiththewarintheMiddle East,stretchingleadtimestoEMEAwitha potentialriskoffurthersupplychaindisruption whichcouldpresentoperationalchallenges. Containersandshipsareincreasinglylocated ininefficientlocations.Thishasalso contributedtorisingcostsintheglobalenergy marketsandcommodityprices. Ourlargestmarket,theUSA(whichmakes upthevastmajorityofourAmericasregion) continuestofacetwosignificantexternal headwinds,namelyweakconsumer confidenceimpactingspendinganda particularlychallengingbootssegment. Despitethis,wesawgoodDTCgrowthina numberofourothercoremarkets,particularly inEMEAandAPAC,resultinginDTCmix expansionof9%ptsonafullyearbasis.There wassolidecommercegrowthinEMEAand APAC,withimprovedconversionandtraffic growth.Retailgrowthwasledbynewand maturingstoresacrossallgeographieswith continuedfootfallgrowthinEMEAandAPAC, althoughfootfalldeclinedintheAmericas.We wereencouragedtoseethatprogressonthe underlyingcorefundamentalsoftheDOCS strategycontinuedthroughouttheyear.The declineinrevenuewasmainlyfromlower wholesalerevenuewithplannedvolume reductionofetailersinEMEA,adecisionnot torenewtheChinadistributorcontractand significantwholesalerevenuesdeclineinthe Americasduetoindustrywidecautionfrom thewholesalecustomersresultinginaweak orderbook.Grossmargingrowthwas supportedbysupplychainsavingswithprice increasesoffsettinginflation. InEMEA,inflationstartedtoease,drivenby adeclineinenergypricesandmoderating inflationarypressures.Russia’songoingwar againstUkrainehowevercontinuestopose risksandremainsasourceofuncertainty.In theperiod,climaterisks,illustratedbyextreme weatherconditionsandunprecedented wildfiresandfloodsintheregionsweoperate in,alsoweighedontheoutlook. IntheAmericas,thelandscapecontinuedto beincreasinglyuncertainwithweakconsumer confidenceandspending.Thefirsthalfwas alsoimpactedbyunseasonablywarm weather.GiventheconflictintheMiddleEast, togetherwithpoliticaluncertaintyaheadofthe upcomingUSelection,weexpectUSA consumersentimenttoremainweakinthe shorttomediumterm. Asaresult,theDirectorswillmaintaina cautiousoutlookandwillreactappropriately tofurtherdevelopmentsandassociatedrisks (acrossecommerce,retailandwholesale channels).Theunprecedenteduncertainty createdbythegeopoliticallandscapemakes itchallengingtopredicthowthebusiness willbeimpactedintheperiodahead. TheDirectorswillremainvigilantand continuetomonitoranumberofconsumer confidenceandmacroeconomicmetrics acrossallourcoremarkets.Whileglobal expectationsareforinflationtoslowlyfallby theendoftheyear,interestratesarestill expectedtoremainhigh,theglobalpolitical climateispredictedtoremaindifficultand thisresultsincarefulfocusonthepotential headwindsintoFY25.Aswenavigatethe complexitiesofthecurrentenvironment, weremainsteadfastinourcommitment totransparency,accountabilityand sustainability.Byembracingchangeand fosteringresilience,weareconfidentinour abilitytonavigatechallengesanddeliver long-termvalueforourshareholders, employeesandbroadercommunity. TheDirectorsremainconfidentinthe long-termgrowthprospects,cashgenerative natureofthebusinessandstrongbalance sheet,withrisksfromelevatedinventory levelsmitigatedbytheinventoryprofileof coreproduct(withminimalmarkdownrisk) andplanstoreduceinventorythroughthe secondhalfofFY25aswewillpurchaseless thanweareplanningtosell. TheGroupisoperationallystrongwithalong trackrecordofconsistentlygeneratingprofits andcashwhichisexpectedtocontinueover theshort,mediumandlongterm. Ourcentralplanningassumptionsare: Micro: • DTCgrowthinkeymarketswillcontinue tobeledbytrafficgrowth,supportedby newstoreopenings,andconversion marketsinEMEA. • USAWholesalecustomerrestockingisnot expectedtooccurinthegoingconcern period,however,givenrelativelylow in-marketinventoryofWholesalecustomers, replenishmentopportunitiesexist. 44 DR. MARTENS PLC ANNUAL REPORT 2024 VIABILITY ASSESSMENT AND GOING CONCERN • Inventorytobereducedforforwarddemand byMarch2025:salesvolumestobehigher thanpurchasesthroughH2FY25. • AllDCsandfactoriesremainopenand operationalthroughouttheperiods. • Maintenanceofdividendreturnsto shareholdersandcontinuedinvestment intheDOCSstrategy. • Debtbulletrepaymentof£288.6min February2026witharefinancingforthe sameamountincluded. Macro: • Nomaterialchangestotheglobal politicalsituationorsignificant escalationsinthewarsinUkraineand intheMiddleEast. • Whilstheadlineinflationisexpectedto reduce,thecostoflivingchallengewill remain(withhighinterestrates)and wethereforedonotexpectastep improvementinconsumerconfidence inEMEAortheAmericas. Theseconservativecentralassumptions formthebasecaseforourFY25budget, ViabilityStatement,goingconcern assessmentandstore,investmentand goodwillimpairmentassessments. Assessment of viability TheDirectorsoftheGrouphaveconsidered thefuturepositionbasedoncurrenttrading andanumberofpotentialdownside scenarioswhichmayoccur,including theimpactofappropriateprincipalrisks crystallising.Specifically,theprincipal riskareasoffinancialandsupplychain (viaclimatechangerisk)wereassessed. Thescenariosandrisksincludeelements oftheimpactsfromclimatechange. Thisassessmenthasconsideredtheoverall levelofGroupborrowingsandcovenant requirements,theflexibilityoftheGroupto reacttochangingmarketconditionsand theabilitytoappropriatelymanageany businessrisks.TheGroupcontinuestohave satisfactoryliquidityandcovenantheadroom undereachriskmodelledindividually. Themainrisksandspecific‘blackswan’ eventsassessedaredetailedbelow: • theimpactofafactoryclosureinone keyproductiongeographicareadueto climatechange(flooding). • weakerconsumersentimentand lowerdemand. ‘Top-down’sensitivityandstresstesting includedareviewofthecashflow projectionsandcovenantcomplianceunder aseverebutplausiblescenarioinrelationto thedownsidescenariosdescribedabove. Intheunlikelyeventofthetwoabove scenariosoccurringtogether,theGroupcan withstandmaterialrevenuedeclineandby applyingavailablemitigations,headroom abovecovenantrequirementsremaininline withexpectationandtheGroupcontinues tohavesatisfactoryliquidityandcovenant headroomthroughouttheperiodunder review.ExperienceoverthreeyearsofFY22, FY23andFY24hasindicatedminimal wholesalebaddebtriskandminimalmargin riskwiththeprincipalrisktomeeting covenantcompliancebeinglowerrevenue. Inmodellingourseverebutplausible downsidewehaveincorporatedtheimpact ofadoubledigitdecreaseinrevenuefrom thebaseplanintheshortterm,withthe baseplanalreadyrepresentingasingledigit declineversusFY24.Underthisscenario, certainmitigationsareavailableorare intrinsicallylinkedtotheforecast,including somecostandcashsavingsthat materialiseimmediatelyiftheGroup’s performanceisbelowbudgetandother plannedandstandardcostreductions. Amoreextremedownsidescenarioisnot consideredplausible. Areversestresstesthasalsobeenmodelled todeterminewhatcouldbreakcovenant complianceestimatesandliquiditybefore mitigatingactions.Tomodelthesereverse stressteststheimpactonrevenueofzero covenantheadroomandzeroliquiditywas calculatedattheendofthegoingconcern period.Underthecovenantbreachtestitis concludedthatthebusinesscouldweather extremegrowthreductionswithoutmitigation versusthebaseplan,withthebaseplan alreadyrepresentingasingledigitdecline versusFY24.Thebusinesswouldhaveto experience-11%ptstorevenuegrowthinthe goingconcernperiodbeforecovenantsare breached.Similarly,thebusinesswouldhave toexperience-51%ptsrevenuegrowth reductioninthegoingconcernperiodbefore zerocashheadroomisreached.The Directorshaveassessedthelikelihoodof occurrencetoberemote. Wehavealsoassessedthequalitativeand quantitativeimpactofclimate-relatedrisks, asnotedinourTCFDscenarioanalysis andabove,onassetrecoverableamounts andconcludedthattherewouldnotbea materialimpactonthebusinessandcash flowsintheviabilityperiod. Wewillcontinuetomonitortheimpact ofthemacroeconomicbackdropand geopoliticaleventsontheGroupinthe countrieswhereweoperate,andweplan tomaintainflexibilitytoreactasappropriate. Funding TheDirectorsalsoconsideredtheGroup fundingarrangementsat31March2024 withcashof£111.1m,termloanof£288.6m, aswellasavailableundrawnfacilitiesof £194.5m.Abulletdebtrepaymentofthe termloanof£288.6misnotdueuntil2 February2026. TheBoardexpectstoreplaceorrenew thesefacilitieswellaheadoftheirmaturity andconsidersitareasonableexpectation tosecureasimilarleveloffinancing. TheGroupisoperationallyandfinancially strongandhasalongtrackrecordof consistentlygeneratingprofitsandcash, whichisexpectedtocontinueoverthe short,mediumandlongterm. Statement Basedonthisassessment,theDirectors haveareasonableexpectationthatthe Groupwillbeabletocontinueinoperation andmeetitsliabilitiesastheyfalldueover theviabilityperiodtoMarch2027. Going concern Thefinancialstatementshavebeen preparedonagoingconcernbasis.The Directors’assessmentisbasedondetailed tradingandcashflowforecasts,including forecastliquidityandcovenantcompliance, usingthesameassumptionsandmethods astheviabilityassessment.Thegoing concernassessmentcoversatleastthe 12-monthperiodfromthedateofthe signingofthefinancialstatements,and thegoingconcernbasisisdependenton theGroupmaintainingadequatelevelsof resourcestooperateduringtheperiod.To supportthisassessment,detailedtrading andcashflowforecastswerepreparedfor the16-monthperiodto30September 2025.Basedonthegoingconcern assessment(alsoreferredtoinnote2.5 ofthefinancialstatements),theDirectors haveareasonableexpectationthatthe Grouphasadequateresourcestocontinue inoperationalexistenceforatleast12 monthsfromthedateofapprovalofthese financialstatements.Forthisreason,they continuetoadoptthegoingconcernbasis inpreparingthefinancialstatements. STRATEGIC REPORT 45DR. MARTENS PLC ANNUAL REPORT 2024 TAKING ACTION ON SUSTAINABILITY OUR FY24 HIGHLIGHTS 2040 Net-ZerobyFY40target validatedbytheScience BasedTargetsinitiative(SBTi)  P51 93.5% ofelectricityconsumptionfor ourownedandoperatedUK andEMEAsitescamefrom renewablesources  P52 Planet Product People EMISSIONS MANAGEMENT TOOL usedtocalculateourfootprint forthefirsttime  P51 100% ofourTier1andKeyTier2 suppliersCSRauditedmet ourhighstandards  P65 10%PTS increaseinwomeninsenior leadershiprolessinceFY23 (FY23:36%,FY24:46%) P68 RESALE PLATFORM launchedintheUSA P62 RESPONSIBLE PURCHASING suppliercharterdeveloped  P65 AAA TopESGratingof AAAfromMSCI B CDPClimateScore ManagementLevelB AUTHORISED REPAIR SERVICE launchedintheUK P61 RECLAIMED LEATHER footwearlaunched  P59 EXTERNAL RECOGNITION IN FY24 MORE ONLINE OUR MATERIALITY ASSESSMENT OURIMPACTON THE SUSTAINABLE DEVELOPMENT GOALS (SDGS) FINDOUT MOREAT: DRMARTENSPLC.COM 46 DR. MARTENS PLC ANNUAL REPORT 2024 SUSTAINABILITY Thisyear,wemadegreatprogresstosupportour consumerstomaximisethelongevityoftheir productsthroughrepairandresale.Thedurability andtimelessdesignofDr.Martensproducts meanweareperfectlyplacedtotakeonthis opportunityandexpandintothegrowingsector ofrecommerce.Wewereexcitedtolaunch authorisedrepairintheUKandourresale platformintheUSA,ReWair. Wealsocontinuedtoinvestininnovationaswe seektoreducetheimpactofournewproducts throughsourcinglowerimpactmaterials.In March2024,welaunchedfootwearmadefrom reclaimedleather,aninnovativematerialwhich tacklesleatherwasteinthesupplychain.Ittakes atestandlearnmentalitytobringprojectssuch As brand custodians, we are focused on adding long-term value to our business, without taking short cuts. We are proud to have launched several initiatives which mark key milestones in Dr. Martens sustainability journey. asthesetolifeandwemakesurewelearnfrom everythingwedo.Theseinitiativessupportour Net-ZerobyFY40target,whichwasapproved bytheSBTithisyear–anotherpivotalmoment. Approvalofourscience-basedtargetssolidifies ourlong-termambitiontodecarboniseour businessandsupplychain.Wealsocontinued workingtowardsourcommitmentstoour peopleandcommunities,aswedeveloped ourresponsiblepurchasingpracticescharter. Inthisreportweoutlinethekeyprogress wehavemadeoverthepastyeartowards oursustainabilitystrategyofPlanet,Product, People.Wehopeyouenjoy. Aligning Executive pay with our sustainability performance OurExecutivebonusesarelinkedtotheachievementofspecificsustainabilityinitiativesthatunderpin ourlong-termsustainabilitycommitments.FindoutmoreinourRemunerationReportonpage119. TUZE MEKIK Director of Sustainability EMILY REICHWALD Chief Sustainability Officer 1 1. During FY24. 47DR. MARTENS PLC ANNUAL REPORT 2024 STRATEGIC REPORT Focus areas Our commitments 1 Relevant UN SDGs Supported by our strategy Climate Energy and climate • Net-ZerobyFY40(targetvalidatedbySBTi) • Renewableelectricityacrossallownedandoperatedfacilitiesby2025 Operations Environmental impacts from supply chain manufacturing processes • EnvironmentalcertificationstandardtoallTier1suppliersby2025 Waste management • Minimisewasteandensurezerowastetolandfillacrossthefullvaluechainby2028 Chemicals management and product compliance • Supportsupplierstoadoptbestpracticechemicalsmanagementby2025 Materials Materials • 100%offootwearmadefromsustainablematerialsby2040 • Sustainablealternativetooutsolesby2035 • Sustainableveganuppermaterialby2028 • Removefossil-basedchemicalsfromproducts(wherescalablealternativesexist)by2035 Sourcing standards • 100%ofthenaturalmaterialsinproductsfromregenerativeagricultureby2040 • Zerodeforestationby2025 Leather supply • 100%leathertraceabilityforallcountriesby2024 • 100%upperleatherfromLWGtanneriesby2023 Packaging Packaging • 100%packagingfromrecycledorothersustainablysourcedmaterialby2028 Lifecycle Useable life • Allproductsaligntosustainabledesigncriteriaby2028 • Offeroptionsandguidanceforwearerstomaximiseuseablelifeby2025 End-of-life • 100%productssoldhavesustainableend-of-lifeoptionby2040 DE&I The following commitments are to be achieved by 2027: Ethnicity • 30%underrepresentedcommunitiesinseniorleadershiproles(GLTanddirectreports) Gender 2 • 50%womeninseniorleadershiproles(GLTanddirectreports) • Increasenon-binarycolleaguesfrom2%to4%globally Human rights Wearecommittedtorespectinghumanrights.ThisisreflectedinourDOCtrine(ourbusinesscodeofconduct), SupplierCodeofConduct,MigrantWorkerPolicyandAnti-SlaveryandHumanTraffickingPolicy. InFY24,weundertookourfirsthumanrightsriskassessmenttoinformourmanagementapproachinthis importantarea. Communities Weareproudofourrecordofstandingupforsocialjustice.Thisincludessupportinganti-racism,advancing LGBTQIA+rightsandpromotingpositivementalhealth. Inparallel,theDr.MartensFoundation(anindependentUKcharity)implementsastructuredprogrammetohelp organisationspursuesocialjustice. 1. Thedeadlineforallsustainabilitycommitmentsistheendofthecalendaryearstated,exceptfortheNet-ZerobyFY40targetwhichis31March2040. 2. Wehaveremovedthetargettoincreasemalerepresentationacrossourretailstoresto40%becausewebelieveitnolongeralignswithourDE&Istrategy. WeremainfocusedonprogressingtowardsourotherDE&Itargetsandcommitments. PlanetProductPeople EMBEDDING OUR SUSTAINABILITY STRATEGY 48 DR. MARTENS PLC ANNUAL REPORT 2024 SUSTAINABILITY CONTINUED Focus areas Our commitments 1 Relevant UN SDGs Supported by our strategy Climate Energy and climate • Net-ZerobyFY40(targetvalidatedbySBTi) • Renewableelectricityacrossallownedandoperatedfacilitiesby2025 Operations Environmental impacts from supply chain manufacturing processes • EnvironmentalcertificationstandardtoallTier1suppliersby2025 Waste management • Minimisewasteandensurezerowastetolandfillacrossthefullvaluechainby2028 Chemicals management and product compliance • Supportsupplierstoadoptbestpracticechemicalsmanagementby2025 Materials Materials • 100%offootwearmadefromsustainablematerialsby2040 • Sustainablealternativetooutsolesby2035 • Sustainableveganuppermaterialby2028 • Removefossil-basedchemicalsfromproducts(wherescalablealternativesexist)by2035 Sourcing standards • 100%ofthenaturalmaterialsinproductsfromregenerativeagricultureby2040 • Zerodeforestationby2025 Leather supply • 100%leathertraceabilityforallcountriesby2024 • 100%upperleatherfromLWGtanneriesby2023 Packaging Packaging • 100%packagingfromrecycledorothersustainablysourcedmaterialby2028 Lifecycle Useable life • Allproductsaligntosustainabledesigncriteriaby2028 • Offeroptionsandguidanceforwearerstomaximiseuseablelifeby2025 End-of-life • 100%productssoldhavesustainableend-of-lifeoptionby2040 DE&I The following commitments are to be achieved by 2027: Ethnicity • 30%underrepresentedcommunitiesinseniorleadershiproles(GLTanddirectreports) Gender 2 • 50%womeninseniorleadershiproles(GLTanddirectreports) • Increasenon-binarycolleaguesfrom2%to4%globally Human rights Wearecommittedtorespectinghumanrights.ThisisreflectedinourDOCtrine(ourbusinesscodeofconduct), SupplierCodeofConduct,MigrantWorkerPolicyandAnti-SlaveryandHumanTraffickingPolicy. InFY24,weundertookourfirsthumanrightsriskassessmenttoinformourmanagementapproachinthis importantarea. Communities Weareproudofourrecordofstandingupforsocialjustice.Thisincludessupportinganti-racism,advancing LGBTQIA+rightsandpromotingpositivementalhealth. Inparallel,theDr.MartensFoundation(anindependentUKcharity)implementsastructuredprogrammetohelp organisationspursuesocialjustice. DTC FIRST This includes building a profitable resale, repair and end-of-life business model. We are working towards this aim through the development of our resale initiatives in the UK and USA, as well as the launch of our direct-to-consumer authorised repair service in the UK. ORGANISATIONAL AND OPERATIONAL EXCELLENCE This includes building a best-in-class resilient, sustainable and scalable supply chain. We are working to decrease waste and enhance transparency across our supply chain, while further advancing our responsible supply chain management efforts. CONSUMER CONNECTION This includes demonstrating sustainability leadership through the development of durable and innovative products. This year we launched footwear using Genix Nappa, a material made from leather offcuts. SUPPORT BRAND EXPANSION WITH B2B While our sustainability strategy does not directly support the ‘S’ pillar, it is actively demonstrating to our business partners and consumers that we are committed to leaving things better than we found them. OUR STRATEGY P22 How our sustainability strategy underpins our DOCS strategy Our sustainability strategy plays an important role in supporting the long-term delivery of our DOCS strategy (page 22). Key areas of alignment between our sustainability efforts and our DOCS strategy include: Our sustainability strategy is also integral to our ethos of Rebellious Self Expression. This is about standing up for what we believe in and being a business with integrity that takes our responsibilities seriously towards the planet, our people and our broader stakeholders. The above referenced sustainability initiatives are covered in detail throughout this section. Oursustainabilitystrategyhasthreepillars:Planet,Product,People, andsetsoutoursustainabilitycommitments.Wearedeliveringon thesecommitmentsthroughtheimplementationofourdetailed roadmaps,whichincludeactions,milestonesandKPIs.Theseare beingledbydedicatedcross-functionalworkinggroupsandare underpinnedbyourrobustsustainabilitygovernancestructure. Inaddition,wehaveestablishedseveralstrategicinitiativesto furthersupportthedeliveryofourstrategy.Thisincludesour cross-cuttingclimateinitiatives,ourDE&IStrategy,ourCSR monitoringandmodernslaveryprogrammesandtheDr.Martens Foundation. STRATEGIC REPORT 49DR. MARTENS PLC ANNUAL REPORT 2024 PLANET FOCUS AREAS AND COMMITMENTS Climate • Net-ZerobyFY40 • Renewableelectricityacrossallowned andoperatedfacilitiesby2025 Operations • Minimisewasteandensurezero wastetolandfillacrossthefullvalue chainby2028 • Environmentalcertificationstandard toallTier1suppliersby2025 • Supportsupplierstoadoptbestpractice chemicalmanagementby2025 FOR ADDITIONAL COMMITMENTS, SEEP51AND54 PROGRESS HIGHLIGHTS RELATED UN SDGS VERIFICATION OF OUR SCIENCE-BASED TARGETS OurFY40Net-Zeroscience-based targetshavebeenverifiedbytheSBTi EMISSIONS MANAGEMENT TOOL usedtocalculateourfootprintfor thefirsttime 93.5% ofelectricityconsumptionforour ownedandoperatedUKandEMEA sitescamefromrenewablesources TOFINDOUTMORE,SEE OUR SDG MAPPING EXERCISE AT: DRMARTENSPLC.COM We are working to minimise our impact on the planet. This includes a strategic plan to achieve Net-Zero greenhouse gas (GHG) emissions across our value chain by FY40. We are also continuing to responsibly manage our broader environmental impacts through the pursuit of operational excellence, within both our own operations and our broader supply chain. SUSTAINABILITY CONTINUED 50 DR. MARTENS PLC ANNUAL REPORT 2024 Urgentactionisneededtoaddress climatechangeandlimitthe increasingimpactscausedby globalwarming.Thisyear,the validationofourscience-based targets(SBTs)hassolidifiedour ambitiontodecarboniseour businessandcollectivelylimitthe impactsoftheclimatecrisis. OUR COMMITMENTS: Energy and climate • Net-ZerobyFY40(target validatedbySBTi) • Renewableelectricityacross allownedandoperatedfacilities by2025 CLIMATE OUR PATH TO NET-ZERO Validation of our science-based targets InOctober2023,theScienceBasedTargets initiative(SBTi)validatedournearand long-termemissionstargets 1 .OurSBTsare informedbyclimatescienceandwillhelp guideusinourjourneytoreachNet-Zero acrossourownoperationsandvaluechain. Theyfocusonreducingourabsolutetotal emissionsratherthanouremissions intensity.Asleatherrepresentsasignificant proportionofourtotalcarbonfootprint,we havesetleather-specificemissionsreduction targets,inlinewiththeSBTiForest,Landand Agriculture(FLAG)guidance.Ourtargetsare alignedwithlimitingglobalwarmingto1.5˚C (Scope3near-termtargetsarealignedto wellbelow2˚C): Dr. Martens commits to reach Net-Zero greenhouse gas (GHG) emissions across the value chain by FY40. Near-term targets: • Scope1and2:Reduceabsolutescope1 and2GHGemissions90%byFY30 fromaFY20baseyear. • Scope3:Reduceabsolutescope3GHG emissions30%byFY30fromaFY20 baseyear. • FLAG(Forests,LandandAgriculture): reduceabsoluteScope3FLAGGHG emissions30.3%byFY30fromaFY20 baseyear. WHY IT MATTERS... WHAT WE’RE DOING... 1.TheseuseaFY20baselineasFY21wassubjecttosignificantCovid-19relateddisruption. 2. Wereportoneyearinarrearsduetothetimerequiredtoprocessthelargeamountofscope3emissionsdata. 3. Market-basedscope2emissions. 4. Keymethodologychangesincluded:refrigerantgasemissionscalculations,energyusageatsiteswheredata wasnotavailable,emissionsassociatedwithwasteproductionatstoresandofficeswheredatawasnot available,andaccountingforcomponentryemissions(includingnon-leatheruppermaterials,componentssuch asheelloopsandinsoles,andconstructionmaterialsusedinoutsolesanduppers). Our near and long-term science-based targets EMISSIONS IN SCOPE SCOPE 1 AND 2 SCOPE 3 All Non-FLAG(allother Scope3emissions inscope) FLAG(Forests, LandandAgriculture emissionsassociated withcattlerearing) FY30 90% (Net-Zero) 90% (Net-Zero) 72% (Net-Zero) 30% 30.3% FY40 Maintain at least 90% reduction Long-term targets: • Scope1and2:Maintainatleast90% absolutescope1and2GHGemissions reductionsfromFY30throughFY40from aFY20baseyear. • Scope3:Reduceabsolutescope3GHG emissions90%byFY40fromaFY20 baseyear. • FLAG:reduceabsolutescope3FLAG GHGemissions72%withinthesame timeframe. Ourachievementofthesetargetsrequires actionacrossseveralareasofourbusiness, assetoutonthenextpage. Our carbon footprint Forourthirdannualcarbonfootprint calculation,wecontinuedtomeasureour emissionsacrossouroperationsandfull valuechain.Forthefirsttime,thisexercise wasconductedusingathird-partyemissions managementtool.Itwascarriedoutinline withtheGreenhouseGas(GHG)protocol andcoveredtheFY23period 2 (1April2022 to31March2023).FY23capturesthemost recentandaccuratedatawehaveavailable forourScope3emissions.OurFY24Scope 1and2emissionscanbefoundinour StreamlinedEnergyandCarbonReporting (SECR)disclosure(page53). Understanding our footprint Dr.MartensScope1,2and3emissions totalled280,456tonnesofCO 2 einFY23 3 (FY22:275,463CO 2 e).Duringthisperiod, ourbusinesscontinuedtogrow,reaching £1bninrevenue.ForourFY23footprint,we usedathird-partyemissionsmanagement tooltocalculateourfootprintforthefirsttime. Thischangeinapproachmeantthatsome categorieswerecalculatedusingdifferent methodologiesthanthoseusedinFY20and FY22 4 .Thetransitiontousingthesoftware tomonitorouremissionsrepresentsastep forwardinourreportingjourneyandmeans ourfootprintwillbemeasuredmore consistentlyandefficientlygoingforward. Thesoftwareproviderperiodicallyupdates themethodologytocapturethelatest climatescienceandemissionsaccounting bestpractices,bothofwhichare continuouslyevolving.Theseupdateskeep measurementsasaccurateaspossible. Thegranularityandqualityofinputdata usedtocalculateourFY23footprintwere alsosignificantlyimprovedacrossseveral categories.Whereavailable,weused lifecycleassessments(LCAs)specificto thematerialssourced.Forexample,we usedLCAscovering49%oftheleatherwe STRATEGIC REPORT 51DR. MARTENS PLC ANNUAL REPORT 2024 30% 9% 14% 12% 17% 9% 9% Leather Outsoles Accessories, packaging and other materials Manufacturing Non-product purchased goods and services Transportation and distribution Other 3 30% 9% 14% 12% 17% 9% 9% Leather Outsoles Accessories, packaging and other materials Manufacturing Non-product purchased goods and services Transportation and distribution Other 3 sourced,ratherthanusinglessspecific emissionsfactors.Theseimprovements meanourFY23footprintismoreaccurate andcomprehensivethaninpreviousyears, howeveritisnotdirectlycomparable againsttheFY20andFY22footprintsdue tothesechanges.Abreakdownofour FY23scope3emissionscategoriescan befoundonpage83inourTCFDReport. SUSTAINABILITY CONTINUED Examples of how we plan to achieve our science-based targets FY23 Scope 3 emissions (%ofScope3 emissions) 1. Valuesareroundedandtotalsarecalculatedbeforerounding.WeworkedwithdifferentexternalpartnersandthereforeuseddifferentmethodologiesforourFY20andFY22 vsFY23GHGemissionsprofiles.AdditionalinformationontheapproachusedinFY20andFY22canbefoundinourpreviousAnnualReports.FY23Scope1and2 emissionshavebeenrecalculatedusingtheemissionsmanagementtoolthisyeartoensurethemeasurementisconsistentandcomparableagainsttheFY24emissions. ThisledtoachangeinemissionsfrompreviouslyreportedFY23figuresduetoanincreaseindataavailabilityandmethodologychangesasaresultofusingtheemissions managementtool. 2.Allmaterialemissionscategoriesareincluded.ThefollowingGHGProtocolScope3emissionsareexcludedfromFY23becausetheyarecoveredinanothercategoryor becausetheyarenotrelevantforourbusiness:(8)Upstreamleasedassets,(10)Processingofsoldproductsand(13)Downstreamleasedassets. FY20 and FY23 footprint for Scope 1, 2 and 3 emissions 1 : Scope Baseline FY20 emissions (Tonnes CO 2 e) FY23 emissions (Tonnes CO 2 e) FY23 percentage of total value chain emissions (%)Footprint calculation method Third-party consultant Emissions management software Scope 1 640 1,151 0.4% Scope 2 (Location) 1,891 2,502 – Scope 2 (Market) 1,936 1,903 0.7% Scope 3 2 240,355 2 7 7,402 98.9% FOCUS Energy efficiency ImprovingenergyefficiencyiskeytoreachingourNet-Zerotarget.Thisyearweupgraded ourheating,ventilationandairconditioningsysteminourMadeInEnglandfactorytorun offarenewableelectricitysupplyinsteadofgas,helpingustomoveawayfromfossilfuels. WehavealsocontinuedtotransitionthelightingatourUKfactoryanddistributioncentreto LED.WeareaimingtocompletethefinalphaseoftransitioningourownedUKoperations toLEDlightingnextyear. Scope 1 & 2 (direct emissions and purchased energy) (~1% of total footprint) Scope 3 (supply chain emissions) (~99% of total footprint) IN PROGRESS • Renewable electricity procurement across owned and operated sites • Energy efficiency measures including switching to LEDs, HVAC optimisation and installing smart meters • Transition company cars to electric vehicles FUTURE PLANS • Energy efficiency awareness training and engagement for employees IN PROGRESS • Transition to low carbon materials (e.g. bio-based alternatives) • Reduce leather related emissions by sourcing leather that is traceable, deforestation-free and from regenerative sources • Increased material efficiency and circularity • Scaling up repair and resale business models FUTURE PLANS • Supply chain transport electrification and promoting low carbon movements via sea, rail and road • Supporting supply chain to reduce energy use and transition to renewables DM’S EMISSIONS 3. Otheremissionsincludecapitalgoods, fuelandenergyrelatedactivities,waste generatedinoperations,businesstravel, employeecommuting,useofsoldproducts, end-of-lifeofsoldproducts,franchises, andinvestments. 52 DR. MARTENS PLC ANNUAL REPORT 2024 • The reporting period for SECR is 1 April 2023 to 31 March 2024 and covers Dr. Martens plc and other Group companies. An operational control approach is applied to defining organisational boundaries. Data is reported for sites where it is considered that Dr. Martens has the ability to influence energy management. Data is not reported for sites where Dr. Martens has a physical presence but does not influence the energy management for those sites, such as a concession within a department store. • Scope 1 and 2 emissions include gas, fuel used in transport, fugitive emissions, other fuels and purchased electricity. Scope 1 physical or chemical processing emissions are not applicable and Scope 2 steam, district heating and district cooling emissions are not applicable. Our complete Scope 1-3 emissions are calculated one year in arrears due to the complexity of the data collection process; our FY23 footprint including full Scope 3 emissions can be found on page 83. • This year, for the first time, emissions within the SECR disclosure have been calculated using a third-party emissions management tool. • Emissions are calculated following the GHG Reporting Protocol (Corporate Standard), taking into account the 2015 amendment which sets out a ‘dual reporting’ methodology for Scope 2 emissions. • Separate UK dual reporting has been conducted, in addition to mandatory global reporting, which encompasses all global data. • Data is sourced from a combination of half hourly readings and energy invoices. Where data was unavailable, energy consumption is estimated for the respective meter and period. • Energy usage estimation methods include calculating the average daily consumption and applying to the period in question or estimating based on building type and square-footage. This is combined with emissions factors from the USA Environmental Protection Agency (EPA), Ecoinvent, TCR and other data sources to calculate GHG emissions. Electricity emissions factors are chosen based on geography to reflect the emissions intensities of the facilities’ local grid. Fugitive emissions from refrigerant leakage is estimated for all facilities. Known refrigerant gas releases are accounted for. • In some instances, data could not be converted to energy consumption. In FY23 this includes 61.1 kg of fugitive gas in the UK and 153.7 kg globally, as well as Scope 3 grey fleet emissions (68,386 km and 2,615 USD in the UK and 56,956 USD globally). In FY24 this includes 114.9 kg of fugitive gas in the UK and 214.6 kg and 4,967 USD globally, as well as Scope 3 grey fleet emissions (66,544 km in the UK and 165,899 km and 15,351 USD globally). • FY23 Scope 1, 2 and grey fleet Scope 3 emissions have been recalculated using the emissions management tool this year to ensure the FY23 footprint is consistent across the value chain and comparable against the FY24 SECR disclosure. This led to a change in emissions from previously reported FY23 figures due to an increase in data availability and methodology changes as a result of using the emissions management tool. • Dr. Martens appointed a third party to provide independent limited assurance of the FY24 SECR Disclosure, including the recalculated FY23 emissions, in accordance with International Standard on Assurance Engagements (ISAE) 3410. Streamlined Energy and Carbon Reporting Statement EmissionsdatainrespectoftheFY24reportingperiodisasfollows: FY23 emissions (tCO 2 e) FY24 emissions (tCO 2 e) GHG Protocol Scope Sub-category UK Global UK Global Scope 1 Combustion of fuel and operation of facilities 303 563 355 596 Scope 1 Combustion of fuel from owned or leased vehicles 36 588 83 359 Total Scope 1 339 1,151 438 955 Scope 2 (Location-based) Purchased energy 506 2,502 623 2,889 Scope 2 (Market-based) Purchased energy 173 1,903 248 2,168 Scope 1 and 2 (Location-based) 845 3,653 1,061 3,844 Scope 3 (grey fleet only) Grey fleet 16 55 14 50 Total emissions (Location-based) 862 3,708 1,075 3,894 Total energy use (kWh) 3,88,125 11,746,360 4,498,868 11,978,415 Turnover (£) – 1,000,299,000 – 87 7,05 3,126 Intensity ratio (tCO 2 e/£100,000) – 0.37 – 0.44 CLIMATE RISKS AND OPPORTUNITIES Wearecontinuingtoadvanceour understandingofourclimaterisksand opportunities,aswellastheirfinancial implications.Forfurtherdetailsonour CROs,includingrelatedmitigationactions, seeourfullTaskForceonClimate-related FinancialDisclosures(TCFD)disclosure (page75).Thisincludesdeepdivecase studiesonrepairandresale,riverine floodingandcarbontaxation. Next,weplantocontinueintegrating climateriskandopportunitiesintoour businessmanagementprocesses. Wewillalsocontinuetousethe newemissionsmanagementtool tomodelouremissionsscenarios toassessprogressagainstour Net-Zeromilestones. FOCUS WHAT’S NEXT? Increasing renewable energy use at our sites Region FY23 (% of total kWh consumption) 4 FY24 (% of total kWh consumption) EMEA 92.0% 93.5% Global 44.0% 46.3% Transitioning to energy from renewable sources is a key mechanism in our efforts to decarbonise Dr. Martens direct activities. As part of our approach, we are moving away from using fossil fuels by upgrading gas powered HVAC systems to electric, enabling them to be powered through renewable electricity. By doing this, in FY24 our Scope 1 emissions decreased by 17% from FY23 (FY23: 1,151 tCO 2 e, FY24: 955 tCO 2 e). We are working to source 100% of electricity from renewable sources across our owned and operated sites by the end of 2025. During FY24, 93.5% of the electricity consumption for our owned and operated sites in EMEA (including UK) came from renewable sources 5 . While the total consumption of renewable electricity increased, the overall proportion remained flat. Multiple new stores opened during FY24, some of which are still due to be moved onto a renewable contract. In FY25, we will focus on transitioning the remaining UK and EMEA sites and the electricity supplies of our owned and operated sites in the USA and APAC. COMMITMENTS SUPPORTED: • Net-ZerobyFY40 • Renewableelectricityacrossallownedand operatedfacilitiesby2025 4. Fromthisyearonwardstherenewableelectricitytargetwillbereportedasa%oftotalkWhelectricity consumption,tobetteralignwiththerequirementsofCDP,whichwealsodiscloseagainstonanannualbasis. Previouslythiswasreportedasa%ofthetotalnumberofsitesperregion.TheFY23figuredisclosedinour previousAnnualReport(EMEAandUK:91%)hasbeenamendedtoalignwithourupdatedapproach(92%). 5. SiteswhereDr.Martensdoesnothaveoperationalcontrolofelectricityprocurementhavebeenexcluded. STRATEGIC REPORT 53DR. MARTENS PLC ANNUAL REPORT 2024 SUSTAINABILITY CONTINUED OPERATIONS Operationalexcellenceisacorepillar ofourDOCSstrategy.Pursuing operationalexcellenceisnotonly goodforourbusiness,butalsofor theenvironment.Thisincludesthe responsiblemanagementofwasteand chemicals,aswellastheapplicationof sustainableenvironmentalstandards. Weworkwithoursupplierstopromote moreresponsibleenvironmental standardsthroughoutthevaluechain. OUR COMMITMENTS: Environmental impacts from supply chain manufacturing processes • Environmentalcertification standardtoallTier1suppliers by2025 Waste management • Minimisewasteandensurezero wastetolandfillacrossthefull valuechainby2028 Chemicals management and product compliance • Supportsupplierstoadoptbest practicechemicalsmanagement by2025  SEEP64FORMORE INFORMATIONONHOW WE RESPONSIBLY MANAGE OUR SUPPLY CHAIN OUR OWN OPERATIONS Whilemostofourenvironmentalimpact isofanindirectnatureandtakesplace throughoursupplychain,wewanttolead byexampleinourownoperations.This iswhywecontinuedtopursuearange ofsustainabilityinitiativesatourMadeIn Englandfactory,whichiscertifiedtothe ISO14001environmentalmanagement systemstandard 1 .Theseare: • Theuseofautomaticcuttingmachines, resultinginhigherlevelsofcutting efficiencyandreducedleatherwaste. • Therecyclingofpost-industrialPVCwaste throughouroutsolemanufacturingprocess. • Manufactureofour‘deadstock’product line,whichhasbeenintegratedintoall plannedMadeInEnglandfutureseasons. • Thefittingofnewelectricheating, ventilationandairconditioning(HVAC), aswellastheongoingreplacementof existinglightfittingswithLEDbulbs. Wearealsoworkingtoimplementmore sustainablepracticesacrossourstores, throughthedevelopmentofourSustainable StoreDevelopmentGuidelines,which areinformedbytheBuildingResearch EstablishmentEnvironmentalAssessment Methodology(BREEAM)standards.The draftguidelinesweresubsequentlytested atourCambridgestore,withfurthertesting totakeplaceatourstoreinHamburg, beforebeingrolledoutmorewidely. 1461 Made In England Deadstock Leather Oxford Shoes 1. WiththelatestassessmenttakingplaceinDecember2023. WHY IT MATTERS... WHAT WE’RE DOING... 54 DR. MARTENS PLC ANNUAL REPORT 2024 OUR SUPPLY CHAIN Waste Ourcommitmenttoachievezerowasteto landfillacrossourfullvaluechainby2028will requiresystematic,positivechangeacross oursupplychain.InFY24,wecontinuedto collectsupplychainenvironmentaldatato helpusactivelymonitorourindirectwaste impacts.Withinourownoperations,ourUK distributioncentrewaszerowastetolandfill throughout2023.LeatherandPVCaretwo ofourmainmaterialsandrepresenttwoof ourkeywastestreams. InFY24,welaunchedourfirstproducts madefromreclaimedleather,GenixNappa, whichismadefrompre-consumerleather waste(page59).Inaddition,our‘deadstock’ productline,whichincorporatesleatherleft overfrompreviousseasons,sawitsfirstfull yearofoperation,achievingstrongsales. OuroutsolesupplierstakewastePVC producedduringthemanufacturingofour outsolesandreinjectitintotheprocess. ThesametechniqueisappliedatourMade InEnglandfactory,whichalsosendsany non-reusablePVCwaste(e.g.mixedcolour waste)toapartnerthatrecyclesitintonew footwear.Wearealsoworkingwithour productrecyclingpartnerintheEMEAregion toinvestigateopportunitiesfortherecycling ofpost-consumerPVCoutsolesintonew outsoles.Moreonoureffortstoreducewaste throughproductcircularityandrecyclingcan befoundintheLifecyclesectiononpage61. Next,ourareasoffocusareto progresswithselectionofan environmentalmeasurementtoolfor ourTier1suppliersandinvestigate productrecyclingpartnersinAPAC. Developing our supplier environmental certification standard Environmentalcertificationisa mechanismwhichwillhelpusmonitor andsystematicallyimproveoursuppliers’ environmentalperformance.Inorderto achievethis,andfollowinganinternalreview ofneeds,weareseekingtoimplementa tooltomonitorandmanageenvironmental impactsacrossourTier1suppliers. Itwillsupportuswiththecollectionand verificationofdata,aswellassupport theimplementationofcontinuous improvementplanstoenableprogress towardsourenvironmentalcommitments. Wearecurrentlyreviewingpotential solutions. COMMITMENTS SUPPORTED: • EnvironmentalcertificationstandardtoallTier1suppliersby2025 Chemicals Ourchemicalmanagementsystemand RestrictedSubstanceList(RSL)ensure weareinfullcompliancewithallrelevant chemical-relatedregulations.Thesecover ourownoperationsandourTier1suppliers, whocascaderelevantrequirementstotheir sub-suppliers.DuringFY24,wecontinued withourongoingRSLtestingprogramme forcomponentsandfinishedproducts, aswellasrelevantcertificationreviews. WealsorequireTier1andKeyTier2 supplierstosignourGeneralMaterial RequirementPolicy(GMRP)toensure theinputstheysupplycomplywithrelevant productsafetylegislation,amongother requirements.Wereviewthispolicy,which isalignedwiththeregulatoryrequirements ofourkeyregions,onanannualbasis. Water Akeyimpactareaforwatermanagement acrossourvaluechaintakesplaceatthe tannery-level(includingwateruseand wastewateremissions).WerequireTier1 supplierstoonlyuseleatherfromLeather WorkingGroup(LWG)-certifiedtanneriesinour products.Thismeansthetannerieswesource leatherfromarecompliantwiththeLWGaudit protocol,whichrequirestanneriestomanage theirwaterconsumptionresponsiblyandis alignedwiththeZeroDischargeofHazardous Chemicals(ZDHC) 2 requirements. Wecollectwaterusedata(amongother environmentalindicators)fromourTier1 supplierfactoriesonaquarterlybasis, ensuringwemaintainahighlevelofinsight intotheirperformance. SEEP64FORMOREINFORMATIONON HOW WE RESPONSIBLY MANAGE OUR SUPPLY CHAIN Genix Nappa 2. ZDHCisdedicatedtoreducingtheapparelandfootwearindustry’schemicalfootprintthroughtheimplementationoftheZDHCMRSL,alistofrestrictedsubstances. WHAT’S NEXT? FOCUS STRATEGIC REPORT 55DR. MARTENS PLC ANNUAL REPORT 2024 PRODUCT FOCUS AREAS AND COMMITMENTS Materials • 100%offootwearmadefrom sustainablematerialsby2040 • 100%ofthenaturalmaterials inproductsfromregenerative agricultureby2040 • Removefossil-basedchemicals fromproductsby2035 Packaging • 100%ofpackagingtocome fromrecycledorothersustainably sourcedmaterialby2028 Lifecycle • 100%ofproductssoldhavea sustainableend-of-lifeoptionby2040 FOR ADDITIONAL COMMITMENTS, SEEP57,60AND61 PROGRESS HIGHLIGHTS RELATED UN SDGS LWG LEATHER Sourced100%LeatherWorkingGroup leatherforAW24 RECYCLED PACKAGING SwitchedtoForestStewardshipCouncil (FSC)recycledcardboardforourcore shoeboxes RECLAIMED LEATHER Launchedfootwearmadefromreclaimed leatheroffcuts RESALE LaunchedourresaleinitiativeintheUSA REPAIR Launchedourdirect-to-consumer authorisedrepairserviceintheUK  TOFINDOUTMORE,SEEOUR SDG MAPPING EXERCISE AT: DRMARTENSPLC.COM We have made iconic, timeless and durable footwear for more than six decades. But we are determined to keep moving forward. This is why we are developing new materials, while working to reduce the environmental impacts of our existing materials. We are also developing profitable repair, resale and end-of-life solutions for our products. These efforts are helping us move towards our long-term vision of a regenerative, circular product lifecycle which also supports our efforts to reach Net-Zero. SUSTAINABILITY CONTINUED 56 DR. MARTENS PLC ANNUAL REPORT 2024 61% 58% 64% 70% 73% 80% 80% 87% 84% 89% Traceability to the abattoir Season SS19 AW19 SS20 AW20 SS21 AW21 SS22 AW22 SS23 AW23 100% Thematerialsweusenotonlyunderpin thedurability,lookandfeelofour footwear,butalsoinfluenceourproduct lifecycleimpacts.Thisiswhywefocus onsourcingmoresustainable materialsthatare: • Durableanddeliveronthequality neededforouriconicfootwear • Recycled,renewableand/or regenerative • Producedresponsiblybymeeting ourenvironmentalandsocial standards Weareactivelysourcingleather thatmeetsourtraceabilityand environmentalstandardsandare developingregenerativeleathersupply options.Wearealsoexploringmore sustainableoptionsforouroutsoles andothercomponentry,withoutever compromisingondurability. OUR COMMITMENTS: Innovation in design and sustainable materials • 100%offootwearmadefrom sustainablematerialsby2040 • Sustainablealternativetooutsoles by2035 • Sustainableveganuppermaterial by2028 Land, biodiversity and ecosystems impacts of raw material production • 100%ofthenaturalmaterials inproductsfromregenerative agricultureby2040 • Removefossil-basedchemicals fromproductsby2035 • Zerodeforestationby2025 • 100%leathertraceabilityfor allcountriesby2024 • 100%upperleatherfrom LWGby2023 MATERIALS SEEP64FORMORE INFORMATIONON H O W WE RESPONSIBLY MANAGE OUR SUPPLY CHAIN Weareworkingtoreducetheenvironmental impactsofourexistingmaterialsaswellas researchinganddevelopinginnovative, lower-impactalternatives.Weareguided intheseeffortsbyourDRPSustainable MaterialsCriteria 1 .InFY24,wealsobegan therolloutofournewProductLifecycle Management(PLM)systemtohelpdeliver enhancedvisibilityacrossourproductlifecycle. Bringingmoresustainablematerialstomarket representsourmostsignificantopportunity tooptimiseourcarbonreductioneffortsand achieveourNet-ZerobyFY40target. LEATHER Werecognisetheneedtocontinueadapting thewaysinwhichwesourceanduse leather,asweworktowardsoursustainable materialcommitments.Weareparticularly focusedonenhancingleathertraceability, sowecanensureourleathercomesfrom deforestation-freeandregenerative sources.Thisincludesafocusonreducing ourleather-relatedcarbonemissionsand onidentifyinglowercarbonalternativesin linewithourNet-Zeroambitions.Keyto theseeffortsisouractiveparticipationin theLeatherWorkingGroup(LWG). Enhancing leather traceability Beingabletotracewhereourleathercomes fromisanessentialfirststepforensuringit isnotassociatedwithdeforestationorother negativeenvironmental,socialandanimal welfareimpacts. Theleathersupplychainiscomplexandthe hidesusedfortheleatherwesourcecome fromthefoodindustry.Wecontinuetowork towardsourcommitmenttoachieve100% traceabilitybacktotheabattoirforallour leatherbytheendof2024. InAW23,89%ofourupperleatherwas traceablebacktotheabattoir(AW22:87%). Toreachourtarget,wewillbeengagingan expertthirdpartytoundertakeadetailed mappingofallabattoirsinourleathersupply chain.Weareconfidentthisexercisewill significantlyclosetheremaininggapin ourtarget. Traceability to the abattoir for leather purchases (%) 1.OurDRPSustainableMaterialsCriteriaevaluatesifmaterialsare1.Durable,2.Recycled,renewableand/or regenerativeand3.Producedresponsibly.Thefulldefinitioncanbefoundonourplcwebsite. Wewillalsocontinuetoengagewithour tannerypartnerstosupporttheongoing improvementoftheirownreporting processes.Ourlongertermaimistoachieve traceabilitybacktothefarm.Thisisamore complextaskandwecontinuetoexplore scalablesolutionstothischallenge. 89% ofourleatheristraceableback totheabattoir(AW23) KPI In progress COMMITMENTS SUPPORTED: • 100%leathertraceabilityforall countriesby2024 WHY IT MATTERS... WHAT WE’RE DOING... STRATEGIC REPORT 57DR. MARTENS PLC ANNUAL REPORT 2024 98% 99% 99% 100% 100% 100% 100% 98% 99% 100% Upper leather sourced Season SS20 AW20 SS21 AW21 SS22 AW22 SS23 AW23 SS24 AW24 100% SUSTAINABILITY CONTINUED Supporting regenerative agriculture Regenerativeagricultureisaholisticsetof farmingpracticesthatseektohavealower, orevenpositive,environmentalimpact. Theycanbeusedtoimprovesoilhealth, ecosystemsandbiodiversitywhichcan allalleviateclimatechange. Wehavecommittedto100%ofthenatural materialsinourproductscomingfrom regenerativeagricultureby2040.Aspart oftheseefforts,inFY24,wecontinuedto exploreleathersupplieswhichsupportthe principlesofregenerativefarming.Weare currentlyinvestigatingaleathersupplywith traceabilitybacktofarmsthataremanaged using‘preferredagriculturalpractices’. The‘preferredagriculturalpractices’applied bythefarmsarealignedwithselect regenerativeagriculturalpracticessuchas rotationalgrazingandenhancedanimal welfare.Thismarksasmallsteptowards ourambitionsoffarm-leveltraceabilityand supportingmoresustainableagricultural practicesinoursupplychain.Weare currentlyselectinganexternalspecialist toverifythesecertifications,aswellas thechainofcustody.Wewillreviewkey lessonslearnedtoinformnextsteps. Reducing the impacts of leather processing WesourceallourleatherfromLWGcertified tanneries.TannerieswithLWGcertification haveresponsibleenvironmentalmanagement practicesinplaceandcomplywithLWG environmentalstandardsforenergyuse, water,chemicalsandwastemanagement 1 . FortheAW24season,100%ofourupper leathercamefromLWGcertifiedtanneries (78%Gold,21%Silver,1%Audited). FollowingtheexpirationofLWGcertification foroneofourtanneriesinAW23,sourcing wasrelocatedtoacertifiedfacility.Weare continuingtoworkwiththisparticular tannerypartnertoensurethissituationis resolvedforthelongterm.Allotherleather weuse(i.e.liningleather,leathergoods, leatherlacesandfootbeds)alsocontinues tocomefromLWGcertifiedtanneries.We areproudtosourceexclusivelyfromLWG certifiedtannerieswhichhelpsensurewe minimisenegativeimpactsassociatedwith theleatherprocessingcarriedoutinour supplychain. Exploring leather alternatives Leatherwillcontinuetobeanimportantupper materialforusinthefuture.Nonetheless,we arealsofocusedondevelopinglowercarbon alternativestosupporttheachievementofour long-termNet-Zeroandsustainablematerial commitments. Addressing deforestation in the leather supply chain and beyond InNovember2023,wecommenced therolloutofaZeroDeforestation ImplementationPlantosupportthe enhancedassessmentandmitigationof deforestationrisksinourleathersupply chain.Thiswasdevelopedwithsupport fromexternalspecialists,including theLWGandtheWorldWideFund forNature(WWF),anddeveloped alongsideotherLWGmemberbrands. ThePlanincludesconcretemeasures andguidanceinrelationtodeforestation policydevelopment,traceability standards,datacollectionand assurance,supplierengagementand capacitybuilding,andmonitoringand reporting,amongotherareas.In addition,thethird-partymappingofour leathersupplychainwillprovidemore granulardeforestationriskmapping basedonabattoirlocation. COMMITMENTS SUPPORTED: • 100%leathertraceabilityforallcountriesby2024 • Zerodeforestationby2025 • Net-ZerobyFY40 1. FormoreinformationontheLWGgotowww.leatherworkinggroup.com. Upper leather sourced from LWG certified tanneries (%) March2024sawthelaunchofourfirst productsmadefromreclaimedleather, whichusesre-engineeredleatherwaste.In FY24,wealsoadvancedworkonbio-based veganmaterials.DuringFY24,veganupper materialsinreviewincludedwearertrials andfurtherenhancementstoabio-based uppermaterialoriginatingfrommycelium andinvestigationofabio-basedplastic materialthatusesplant-basedingredients originatingfromcorn. FOCUS 100% ofourupperleatherforAW24 isfromLWGcertifiedtanneries. Inaddition,allotherleatherweuse, includinglinings,leathergoods, lacesandfootbeds,nowcomes fromLWGcertifiedtanneries. KPI Achieved COMMITMENTS SUPPORTED: • 100%upperleatherfromLWG tanneriesby2023 58 DR. MARTENS PLC ANNUAL REPORT 2024 Trialling Genix Nappa to develop lower impact footwear InMarch2024,welaunchedourfirst productsmadefromreclaimed leather.GenixNappaisaninnovative anddurableuppermaterialmade fromre-engineeredleatheroffcuts. Thetrialisbasedonalimitedvolume ofbootsandshoesavailableacross ourAmericas,EMEAandAPAC regions.Priortothelaunch,we carriedoutextensivepre-production testingandtrialstoensurethe materialmetourhighstandards includingourDRPCriteria. HalfofthetotalcontentofGenix Nappaisreclaimedleather.The remainingcontentismadefroma virginnyloncorewhichsupports thematerial’sdurabilityanda water-basedpolyurethanecoating toimproveperformanceandprovide thefinish.Thereclaimedleatheris frompre-consumerleatherwaste (leatheroffcuts)fromthetanning processthatwouldotherwisebesent tolandfill.Thematerialismadeusing aprocesswhichseparatestheleather fibresbeforere-entanglingthemwith thenyloncoretoproducearollof materialmadefromreclaimedleather. TheuseofGenixNappanotonly helpstolimitleatherwaste,but alsoreducessomeofthecarbon emissionsassociatedwiththe productionofnewleatherproducts. TheLifecycleAssessment(LCA) forasimilarmaterialfromthesame supplierindicatescarbonemissions ofaroundathirdofthoseassociated withconventionalbovineleather. Wearecurrentlyworkingwiththe suppliertodevelopaspecificLCA forGenixNappa. Next,wewillgatherconsumer feedbackandcontinuetowork withthesuppliertofurtherenhance thesustainabilityofthematerial. Thisincludesafocusonenhancing circularitybyexploringtheuseof finishedleatherwastefromour Tier1supplierstocreatematerials madefromreclaimedleather, similartoGenixNappa. COMMITMENTS SUPPORTED: • Minimisewasteandensurezerowasteto landfillacrossthefullvaluechainby2028 • 100%offootwearmadefromsustainable materialsby2040 • Net-ZerobyFY40 PVC Themajorityofouroutsolesaremadeusing PVC,ahard-wearingandlong-lasting material.Theproductionprocessforour PVCoutsolescreatesminimalvolumesof post-industrialwaste.Itsrecyclablenature meansthatpost-productionindustrialPVC wastecanbeblendedbackintothe productionprocessforouroutsoles(see page55formoreonoutsolerecycling). Exploring bio-based alternatives Werecognisetheneedtodeveloplower- carbon,bio-basedalternativestoPVC becauseitscreationrequirestheuseof fossilfuelsandchemicals.Thisiswhy wehavecommittedtodevelopinga sustainablealternativeoutsoleby2035. InFY24,weundertookfurthertestingof abio-basedoutsolealternativetoensure thatitmeetsouraestheticandperformance standards,includingourDRPCriteria. Followingpositiveresults,wenowplanto trialthematerialinproducts. Watch the video on how reclaimed leather is made FOCUS 100% recycledpolyester contentinall standardheelloops 100% recycledcontentin luxefauxfur 20% recycledpolyester contentinlaces 80% recycledpolyester inmetallicheel loops Improving the sustainability of our components Wecontinuetointegraterecycledcontentratherthanvirginmaterialsintoour components,whereverpossible.Asaresultoftheseongoingefforts,wenowhave: 100% recycledpolyester contentin cushionedinsoles 100% organiccotton insocks STRATEGIC REPORT 59DR. MARTENS PLC ANNUAL REPORT 2024 SUSTAINABILITY CONTINUED PACKAGING Mostofourpackagingisusedinour supplychaintomakesureourproducts reachtheirdestinationundamaged. Itisoneofourkeyareasofresource useandrepresentssignificant opportunitiestoreduceouruseof materialsandimplementresponsible sourcing.Thisiswhywefocuson: • Reducingthepackagingweuse • Substitutingexistingpackaging withrecycledand/ormore sustainablealternatives • Ensuringourpackagingcanalso berecycled OUR COMMITMENTS: Packaging • 100%ofpackagingtocome fromrecycledorothersustainably sourcedmaterialsby2028 OPTIMISING AND MINIMISING OUR PACKAGING Wecontinuetooptimiseandminimise ourpackagingwherepossible,including throughtheremovalofnon-recyclableand difficulttorecyclematerials.OurPackaging GuidingPrinciplesprovideastructured frameworkasweworktowardsour commitmentfor100%ofpackagingto comefromrecycledorothersustainably sourcedmaterialsby2028. Packagingimprovementsduring FY24included: • TherolloutofForestStewardship Certified(FSC)recycledcardboard acrossourstandardshoeboxes, swingtagsandthemajorityofour largecardboardshippingboxes. • Phaseoutofnon-recyclablecoated shoeboxesforallourcollaboration projects,whichhadrepresentedone ofourmostsignificantareasofnon- recyclablepackaging. • Thecontinuedphasedremovalofplastic foaminsertsacrossrangesthatdonot requirethemforprotectivepurposes.We haveremovedtheseinsertsfrom76.5% ofourSS24footwearrangesbyvolume (upfrom35%inAW23).Weare investigatingasustainablealternative forproductsthatdorequireprotection, includingthepotentialuseofFSCrecycled cardboardoffcutsfromourshoeboxes. InFY24,wealsostartedtherisk-based mappingofoursupplychainforwoodpulp, whichisusedinsomeofourpackaging components.Thisformspartofourbroader effortstoensurethatnoneofourproducts, packagingorstorecomponentsare associatedwithdeforestation(page58). Wewillcontinuetofocusontesting, developingandincludingmore sustainablematerialsacrossour productrangeandtakelearnings fromourmaterialinnovationtrials. Anotherfocuswillbetoutiliseourdata systemstoenableannualquantitative progressreportsagainstour sustainablematerialscommitments. WHY IT MATTERS... WHAT WE’RE DOING... WHAT’S NEXT? 60 DR. MARTENS PLC ANNUAL REPORT 2024 LIFECYCLE Ourfootwearisversatile,timelessinits designanddurable.Bypromotingcare andofferingauthorisedrepair,wehelp ourconsumersextendthelifeoftheir footwearevenfurther.Anotherkeypart ofourstrategyiskeepingourproducts incirculationthroughresale.Buteven Dr.Martensbootswillreachtheendof theiruseablelifeatsomepoint.When thishappens,wewanttomakesure therearesustainableend-of-life solutionsavailablesuchasrecycling. Theseeffortsarehelpingmoveour businesstowardsamorecircularmodel. OUR COMMITMENTS: Useable life • Allproductsaligntosustainable designcriteriaby2028 • Offeroptionsandguidancefor wearerstomaximiseuseable lifeby2025 End-of-life • 100%productssoldhave sustainableend-of-life optionby2040 DESIGNING FOOTWEAR THAT LASTS Fromtheverystartoftheproductlifecycle, wewantourfootweartobedesignedwith sustainabilityinmind.InFY24,werolledout oursustainabledesigntrainingprogramme, whichismandatoryforourdesignand productteams.Theprogrammeisfocused onembeddingthecoreprinciplesbehindour product:timelessness,durability,functionality andsustainablematerialselection. Italsoprovidespracticalguidanceonhowto applytheseprinciplesacrossourproduct creationprocessesasweseektoreducethe environmentalimpactofourproducts. MAXIMISING THE USEABLE LIFE OF OUR FOOTWEAR InFY24,welaunchedourdirect-to- consumer,authorisedrepairserviceinthe UK.Wealsohelpourwearerstomaximise thelifeoftheirfootwearbysharingguidance onhowtoproperlycareforthemthroughour marketing,salesandsocialmediachannels. Extending our product lifespan with repair InOctober2023,welaunchedan authorisedrepairserviceintheUK, enablingourconsumerstoextendthelife oftheirDr.Martensfootwear.Theycan alsochoosetocustomisetheirproducts withachoiceofwelts,stitchesand outsolecoloursandstyles,supporting ourethosofindividualexpression.The serviceisruninpartnershipwithTheBoot RepairCompany,whowealsopartner withonourUKresaleinitiative.TheBoot RepairCompanyareaLeeds-basedfirm with120years’experienceofexpertly repairingandrestoringboots,shoesand leathergoods.Consumerscanvisit drmartensrepairs.comtochooseand payfortheirrepairs.Theythensendtheir itemstoTheBootRepairCompany’s facilityinLeeds,wheretheyarerestored, refreshedandthenreturned. Allrepairsandcustomisationsarecarried outusingthesamemachinery,outsoles andcomponentrythatgointomaking Dr.Martensproducts.TheBootRepair teamparticipatedinextensivetraining atourMadeInEnglandfactory,where weprovideddetailedguidanceonour productionmethodsandprinciples. SincelaunchinginOctober2023,the repairservicehasrepairedover1,700 pairsofDr.Martensbootsandshoes, withpositivecustomerfeedbackreceived acrossratingsitesandsocialmedia. Weareworkingtoexpandthenumberof styleswhichcanberepairedthroughthe schemeandcontinuetoexploreoptions toexpandtheservicetoourconsumers inothermarkets. COMMITMENTS SUPPORTED: • Offeroptionsandguidanceforwearers tomaximiseuseablelifeby2025 WHY IT MATTERS... WHAT WE’RE DOING... FOCUS Our approach to extending the useable life of our products CONSUMER PRODUCT END OF USEABLE LIFE EXTENDING LIFESPAN CARE REPAIR RESALE RECYCLING PARTNERSHIPS STRATEGIC REPORT 61DR. MARTENS PLC ANNUAL REPORT 2024 Next,weplantocontinuetofocus onbuildingourresaleandrepair recommerceinitiativesintheUK, theUSAandbeyond.Wewillalso exploretheuseofmorecircular materials,includingthepotential useofleatherandPVCfromnon- repairableDr.Martensproducts tomakenewcomponentry. SUPPORTING END-OF-LIFE RECYCLING Eventuallyallourfootwearwillreachthe endofitslife.Weworkwithexternal partnersinourUK,EMEAandAmericas regionstorecyclefootwearthatcannot berepairedandresoldandisnotfitfor donation.Theoutputsfromthese processesareusedtocreatenew SUSTAINABILITY CONTINUED Giving footwear a second life through resale InFY24,wecontinuedtobuildonthe successofourresaleinitiativeinthe UKthroughthelaunchofReWair,our newresalewebsiteintheUSA. Webelievethatbrandedresalecan makeasignificantcontributiontowards theachievementofourlong-term sustainabilitycommitments.This includeshavingsustainableend-of-life optionsforallofourproductsand achievingNet-ZerobyFY40.InFY24, wedevelopedamodelinpartnership withexternalexpertstoassessthe carbonimpactofourrepairandresale businessmodels.Themodelcalculated thatapairsoldthroughourresale channelcontributes89%lessGHG emissionsthanapairboughtnew. Brandedresalealsopresentsasignificant commercialopportunityandisakey initiativeunderthedirect-to-consumer pillarofourDOCSbusinessstrategy.The second-handfootwearmarketisgrowing rapidlyandfeedbackfromourconsumers showsthatmanyofthemwantto purchaseauthentic,pre-wornDr.Martens footwear.Inthiscontext,brandedresale providesapowerfulplatformtoattract newconsumers,buildbrandloyaltyand generatenewrevenuestreams.Weare alsoproudtoaddvaluetothesecond- handmarketbyrepairing,sanitising andauthenticatingproductsbeforethey are resold. USA InMarch2024,welaunchedReWair, ourUSAresaleplatform.Through ReWair,returned,damagedordefective Dr.Martensfootwearandbagsare authenticated,inspected,cleaned andrestoredbyourexpertthird-party partner.Consumersareabletopurchase ReWairproductsviatheDr.Martens ReWaironlinestore.Productsarethen securelyshippedtoconsumersinFSC certifiedboxeswhichareprintedwith water-basedinks.AspartofReWair,we arealsotriallingtrade-inattwostores, whereconsumerscanexchangetheir wornDr.Martensproductsforavoucher toputtowardstheirnextpurchase. Returnedproductswillberepairedand restoredforresaleviaReWairorrecycled ifthisisnotpossible.ReWairiscurrently inanearlystagerolloutandwillundergo periodicreviewtotakelearningsaswe continuewithouraimtobuildprofitable repairandresaleofferings. UK Wecontinuetoofferresaleinpartnership withTheBootRepairCompanyand DepopintheUK.SinceitslaunchinApril 2022,theonlineshopremainsoneofthe mostpopularshopsonDepopglobally. COMMITMENTS SUPPORTED: • Offeroptionsandguidanceforwearers tomaximiseuseablelifeby2025 • 100%ofproductssoldhavea sustainableend-of-lifeoptionby2040 • Net-ZerobyFY40 Taking steps towards circularity InFY24webeganworkingwith ourEuropeanrecyclingpartnerto investigateinnovationopportunities usingsegregatedwastematerials fromDr.Martensproducts.This includedanongoingtrialthatuses finishedleatherwastefromrecycled Dr.Martenstomakeareclaimed leathermaterial,similartoGenix Nappa(seepage59). Wearealsoworkingwiththe recyclingpartnertoinvestigate thepotentialcreationofnewPVC outsolesusingrecycledoutsoles. Ourpartneralsocontinuesto recycleproductswhichcan’tbe repairedorresoldintoshelving andsurfacingwhichisbeingused insomeofourshowrooms,stores andfuturestoreconcepts. COMMITMENTS SUPPORTED: • Allproductsaligntosustainable designcriteriaby2028 • 100%ofproductssoldhave sustainableend-of-lifeoption by2040 1460 Reclaimed Leather materialsandproducts.Thankstothese partnerships,productsthatarereturned toDr.MartensintheUK,EMEAand Americasthatcan’tberepaired,resoldor donatedareinsteadrecycled.Ournext focusistoinvestigaterecyclingoptions acrossourAPACregion. us.rewair.drmartens.com FOCUS FOCUS WHAT’S NEXT? 62 DR. MARTENS PLC ANNUAL REPORT 2024 PEOPLE Weinvestinourpeopleandcreateanenvironment inwhichtheyhavetheopportunitytodeveloptheir fullpotential. Thisisreflectedinourfocusonenhancingourend-to-end employeeexperience,engagementandculture.We’realso committedtocreatingaworkplacewhereourpeoplefeel included,acceptedandempoweredthroughourdiversity, equityandinclusion(DE&I)strategy.Ourapproachis underpinnedbyourrespectforhumanrights,includingthose ofthepeopleworkinginoursupplychain.Wearealsoproud tochampionandsupportimportantsocialjusticeissues aroundtheworldthroughtheDr.MartensFoundation. FOCUS AREAS AND COMMITMENTS Thefollowingcommitmentsaretobe achievedby2027: Diversity, equity and inclusion Ethnicity: • 30%underrepresentedcommunities inseniorleadershiproles(GLTand directreports) Gender: • 50%womeninseniorleadershiproles (GLTanddirectreports) • Increasenon-binarycolleaguesfrom 2%to4%globally FURTHER INFORMATION ON HOW WE APPROACH HUMAN RIGHTS AND COMMUNITY, THE OTHER TWO FOCUS AREAS OF PEOPLE,CAN BEFOUNDONPAGES70AND71 PROGRESS HIGHLIGHTS RELATED UN SDGS RESPONSIBLE PURCHASING Developedandlaunchedourfirst ResponsiblePurchasingPracticesCharter 100% ofourTier1andKeyTier2suppliersCSR auditedmetourhighstandards 10%PTS increaseinwomeninseniorleadershiproles sinceFY23(FY23:36%,FY24:46%) TOFINDOUTMORE,SEE OUR SDG MAPPING EXERCISE AT: DRMARTENSPLC.COM STRATEGIC REPORT 63DR. MARTENS PLC ANNUAL REPORT 2024 RESPONSIBLY MANAGING OUR SUPPLY CHAIN OUR GLOBAL SUPPLY CHAIN Wearecommittedtomaintainingpositive, collaborativepartnershipswithourthird- partysuppliers.Thisapproachunderpinsour abilitytoachievethehighestlevelsofquality andsustainability.Oursuppliersinclude: OUR POLICIES Oursupplierrequirementsaresetoutinour SupplierCodeofConduct.Thisisbasedon theEthicalTradeInitiativeBaseCodeand theconventionsoftheInternationalLabour Organization.TheSupplierCodeofConduct integratesarangeofrequirementsaround forcedlabour,childlabour,subcontracting, homeworkingandmodernslavery.Similarly, suppliersaresubjecttoourSupplier EnvironmentalStandard. Thesedocumentsareintegratedintothe MasterSupplierAgreementswemaintain withourTier1suppliers,alongwiththe followingpolicies,whichsetoutadditional supplierrequirements: • AnimalDerivedMaterialsPolicy • Anti-BriberyandCorruptionPolicy • GeneralMaterialsRequirementPolicy • MigrantWorkerPolicy 2 • NeedlePolicy CONSUMER PRODUCT END OF USEABLE LIFE • Tier1suppliers:productmanufacturers, whichareprimarilybasedinAsia 1 . • KeyTier2suppliers:suppliersofstrategic componentssuchastanneries. • Tier2suppliers:suppliersofother componentry. Forfurtherinformationonhowwemanage oursupplychain,seepage55,aswellas ourlatestModernSlaveryStatementwhich canbefoundonourcorporatewebsite. Similarly,wehavecontractualprovisions thatrequireouragents,distributorsand franchiseestocomplywiththesepolicies. HOW WE ENGAGE OUR SUPPLIERS OurCSRteamsarebasedinkeysourcing locations,wheretheyworkdirectlywithnew andexistingTier1andKeyTier2suppliers andtheirfactories.Thishelpsthemwork collaboratively,transparentlyandadvocates forsupplierownership.Italsofacilitatesthe quickidentificationandremediationofany potentialissues,includingthecompletionof correctiveactionplans.Suppliersalso attendTier1supplierconferences,where weshareinformationandlearnings,and promotecollaborativecommunication. 1. OurTier1factorylistissharedonourwebsiteandisupdatedeverysixmonths. 2. BasedontheDhakaPrinciplesdevelopedbytheInstituteforHumanRightsandBusiness,andbroader internationalbestpractice. 3. Sedex,BSCIandSA8000,WRAPandSCLP. HOW WE MONITOR PERFORMANCE Weapprovenewfactoriesandmonitortheir performancethroughourCSRmonitoring programme.Independent,third-partyCSR auditsareconductedbeforeproduction beginsatnewTier1andselectedKeyTier2 supplierfactories.Inaddition,wecarryout CSRmonitoringofexistingTier1and selectedTier2suppliers. AuditsareconductedatourTier1footwear suppliersatleastannually.Wehavealso expandedourCSRmonitoringprogramme toourKeyTier2suppliers.Theseincluded tanneriesandPVCgranulatesuppliers. ForKeyTier2suppliersthatarenotcurrently subjecttotheprogramme,werequire recognisedsocialauditreports 3 thathave beencarriedoutwithinthelast12months. OVERVIEW OF OUR GLOBAL SUPPLY CHAIN EXTENDING LIFESPAN RECYCLING PARTNERSHIPS CARE REPAIR RESALE MAKING AND SOURCING DISTRIBUTION RETAILING, ECOMMERCE, WHOLESALE RAW MATERIAL SUSTAINABILITY CONTINUED 64 DR. MARTENS PLC ANNUAL REPORT 2024 100% 100% 100% FY22 FY23 FY24 100% 100% FY22 FY23 FY24 Not reported Responsible Purchasing Practices Charter InFY24,weworkedwiththird-party expertstodevelopthefirstiterationofour ResponsiblePurchasingPracticesCharter. Thiswasdevelopedfollowingareviewof currentpractices,processesandpolicies, aswellasbothinternalandsupplier interviews.Duringtheengagement process,suppliersindicatedthat: • Dr.Martensisclearandconsistentin itscommunications,andthereisagood senseoftrustbetweentheCompany anditssuppliers. • Ordersarerarelychangedafterthe purchaseorderisplaced,andwherethis doeshappen,supplierscangenerally negotiatedifferentleadtimes. • Suppliersfeelthat,whilepriceisimportant forDr.Martens,itsconsiderationsextend tootherissues–includingqualityand sustainability(whichwasnotthecasefor alltheircustomers). Dr.Martensendeavourstointeractandtreat ourmaterial,productandservicesuppliers accordingtothefollowingprinciples: 1. RELATIONSHIPS Weinvestinoursuppliers,andvalue long-termpartnershipsinwhichwe canworktogethertoimprovemutual businessperformance. 2. PAYMENT TERMS Weoperatetoanagreedpayment schedule. 3. PLANNING Weforecastandcommunicateourorder requirementswellaheadsothatoursuppliers cancarefullyplanforwhattheyneed. 4. FAIR LABOUR COSTING Weensurelegallycompliantand competitiveprovisionforwagesandbenefit. 5. TRAINING Wetrainallourrelevantteamsonwhat itmeanstopurchaseresponsibly. 6. COMMUNICATIONS Wevaluetransparencyandunderstand theimportanceoftwo-way,openand honestcommunication. 7. SUPPLIER EXIT Wewillonlyundertakeasupplierexit afterfullconsiderationandinaresponsibly managedway. 8. SUSTAINABILITY Weworkwithoursupplierstosetclear expectationsaroundsustainability, includinghumanrightsandenvironmental valuesandcommitments. Weexpectoursupplierstoadoptthespirit oftheseprincipleswiththeirownsuppliers. FollowingthedevelopmentoftheCharter, wenowplantoembeditsadoptionthrough thedevelopmentoftrainingforourpeople andsuppliers. 1.InlinewithIntertekWorkplaceConditionsAssessmentscoringmethodology. Audited Tier 1 footwear suppliers meeting our high performance standards (i.e. scores of 75% or more 1 ) in CSR audits Audited Key Tier 2 suppliers meeting our high performance standards (i.e. scores of 70% 1 or more) in CSR audits Next,weplantodeveloptrainingto rolloutourResponsiblePurchasing PracticesChartertoourpeople andsuppliers. WeusetheWorkplaceConditions Assessment(WCA)on-siteauditprotocol forbothourauditingandmonitoring. Thisassessesrisksaround: • Labour:Includingchildlabour,forced labour,discrimination,freedomof association,employmentcontractand discipline,harassmentandabuse. • Environment:Includingregulatory complianceandcertifications. • Business practices:Includingissues rangingfromintegritythroughtodata protectionandcompetitionlaw. • Management systems:Fromsocial compliancepoliciesthroughtothe auditingofsuppliers,subcontractors andlabourproviders. • Wages and hours:Includingworking hours,wagesandbenefits. • Health & Safety:Includingwork facilities,emergencypreparedness, occupationalinjury,machinesafety, safetyhazards,hazardousmaterials anddormitoriesandcanteens. Auditsareconductedonasemi-announced basis.Suppliersaregivenawindowof30 daysduringwhichmonitoringauditscould takeplace.Thefrequencyoffollow-up auditsisdeterminedbyeachsupplier’s auditrating.Ifanynon-conformancesare identified,weworkwiththesupplierto developcorrectiveactionplansandcarry outfollow-upcheckstoensurethesehave beenimplementedinpractice.Intherare eventthatasupplierfailsinthisregard, wemayterminatetherelationship. Third-party due diligence Wealsoapplyaduediligenceprocesswhen enteringintonewsupplierrelationships, includingbothaVendorRiskAssessment andcompliancescreening.Thisprocess identifiessupplierrisks,includingethical concernsandregulatorynon-compliances. Thestringencyoftheprocesswilldepend onfactorssuchaslocation,activitiesand contractvalue.Inaddition,weareplanning toexplicitlyintegratehumanrightsintothe processaspartofourbroadereffortsto furtherenhanceourmanagementefforts. Supplier CSR audit results: WHAT’S NEXT? STRATEGIC REPORT 65DR. MARTENS PLC ANNUAL REPORT 2024 INVESTING IN OUR PEOPLE Defining our culture RebelliousSelfExpressiondefines whatisuniqueaboutourbrand andourculture.Thisisthethread thatconnectsallofuswithinthe Company,ourproductsandour customers.Itissupportedbythree corevalues: BE YOURSELF ACT COURAGEOUSLY SHOW YOU CARE InFY24,wefocusedonthe consistentcommunicationofour valuesandonensuringtheyare embeddedacrosstheemployee journey.Thisincludedtheactive rolloutofourvaluesbyoursenior leaders,whohavebeenhelping theirteamsunderstandwhatthe valuesmeantothem.These conversationshavebeen supportedthroughtheuseofour RebelliousSelfExpression trainingtoolkit(launchedin2023), whichwehavesharedwithour teamstorunsessionsthemselves. B E Y O U R S E L F A C T C O U R A G E O U S L Y S H O W Y O U C A R E REBELLIOUS SELF EXPRESSION O U R C U L T U R E O U R C U L T U R E W H A T W E S A Y , M A K E , D O W H A T W E S T A N D U P F O R successatDr.Martens.Foreachsuccess factorwehavearticulatedspecificbehavioural expectationsforourdifferentcareerlevels acrossthebusiness.Theframeworkwillbe rolledouttothebusinessinFY25,andwillact asthefoundationforcareerdevelopment, goalsetting,feedbackconversationsand talentacquisitionpractices. Otherkeyinitiativestosupportour employeesduringFY24included: • Aglobalprogrammetoensurethat employeeshavesetperformanceand developmentgoalswithinouronline developmentplatform.Thisallowsour peopletohavegreaterclarityonwhere tofocusandhowtheirworklinkstoour DOCSstrategyandvalues. • TherolloutofourRetailManagement programmeinourEMEAandAmericas regionstohelpensureourstore managersandassistantmanagers developtheleadershipskillsneeded inthestoreenvironment. • ThelaunchofourTalentHub,which provideshiringmanagerswithclear andconsistentguidancetoassistthem duringthetalentacquisitionprocess. Listening and engagement Webelieveitisimportanttolistentoand communicatewithourpeople,inawaythat isconstructive,meaningfulandimproves theemployeeexperience.Thisis demonstratedthroughourannualglobal engagementsurvey,akeypartofourwider listeningstrategy. ThroughoutFY24,wecontinuedourNED ListeningsessionsledbyourEmployee RepresentativeNon-ExecutiveDirector, RobynPerriss.Furtherdetailsonthese workshop-basedsessionscanbefound onpage105.Inadditiontoourannual EngagementandInclusionSurvey,wealso launchedreal-timesurveystocheck-inon howourpeoplefeelabouttheirworking lives.Theseenabledcontinuouslistening inameaningfulandactionableway, drivingleadershipaccountabilitywithmore regularinteractions. Asaresultofthesediscussionsand broaderemployeefeedback,wehave: • Implementedarangeofnewleadership andemployeedevelopmentmeasures. • Openedupnewonlinecommunication channels,includingteam-specific channels. • Awardedallemployeesanadditionalday ofannualleavewithinFY24intheform ofaWellbeingDaylinkedtoourvalueof ‘BeYourself’. • Increasedthenumberofsocialevents toencouragegreatercollaboration. Feedback and investing in leadership Weactivelysupportouremployeesasthey pursuetheirownlong-termdevelopment andambitions,includingthroughthe provisionofresources,guidanceand opportunities.Wedothisthrough: • TheLEADexperience,offeredtoallofour GlobalManagementTeam(GMT) 1 leaders inFY24,andincorporating360⁰feedback andstrength-basedassessmentsalong withleadershipcoaching. • Investmentintrainingournewleaders, withafocusonleadershipdevelopment, personaleffectiveness,challenging conversationsandfeedback. InFY24,weembarkeduponaprojectto extendourleadershipframeworktoapply toallrolesacrossthebusiness.Througha programmeofinternalandexternalresearch wedevelopedabehaviouralframeworkwhich encompasseseightfactorswhichenable 1. Direct reports to our Global Leadership Team (GLT). 66 DR. MARTENS PLC ANNUAL REPORT 2024 SUSTAINABILITY CONTINUED Accepted Included Equipped Valued Growing Inspired 4.24 4.18 4.01 4.00 3.60 3.59 5 Listening to and engaging our people Feeling‘Included’continuestobeahigh scoringfactorandahallmarkofour culture.Buildingonthiswecontinue toscorehighlyin‘Accepting’,which encompassesourdiversitymeasures. INSIGHTS FROM OUR 2024 ENGAGEMENT AND INCLUSION SURVEY Wearecommittedtobuildinganengagingculturewhereourpeoplecanthrive.Wecarryoutanengagementsurveyeveryyearto understandthelivedexperienceofourpeopleacrossDr.Martens.OurMarch2024EngagementandInclusionSurvey,towhich 92%(3,158)ofourpeopleresponded,highlightedwherewearedoingwell,andwhereweneedtodobetter.Allareasofperformance arescoredona0to5scale,where5isthebestpossiblescore. PERFORMANCE AREAS: Accepted: Agree that Dr. Martens encourages diversity Included: Feel you can express yourself at work Equipped: Feel empowered and set up for success Valued: Feel that your voice and contribution matters Growing: Keep evolving in your work and as a person Inspired: Inspired to be part of Dr. Martens’ future Supporting wellbeing Ourapproachtolookingafterourpeople looksatallmaterialaspectsoftheirmental, physical,socialandfinancialwellbeing.This isdemonstratedthroughinitiativessuchas themaintenanceofourfreeandconfidential EmployeeAssistanceProgramme, voluntaryMentalHealthNetwork,learning anddevelopmentprogrammes,wellbeing events,provisionoffreehealthyoffice snacksandannualvolunteeringallowance. InFY24,wetookthedecisiontoincreaseour annualleaveprovisionintheAPACregion tobringitinlinewithourGroupaverage, changedourholidayarrangementsintheUK tomakeiteasierforpeopletousetheirfull annualentitlementandcontinuedtheglobal rolloutofoursharescheme. FOCUS Werecognisethatweneedtobuild momentumandimprovehowpeoplefeel aboutInspiredandopportunitiestoGrow atDr.Martensandwillcontinueourefforts inthisregardintotheyearahead,withthe launchofabehaviouralframeworkforall ourpeopleinFY25(page66). Ouroverallengagementscorewas3.94. Thiswasaslightdecreaseonlastyear (3.98)andhasmeantthatwehavemissed ourExecutiveDirectors’bonustarget. Formoreinformation,seepage127. STRATEGIC REPORT 67DR. MARTENS PLC ANNUAL REPORT 2024 ‘BeYourself’isoneofourcorevalues. Diversity,equityandinclusion(DE&I) helpseveryonewhoworksforusfeel included,acceptedandempowered. Itnotonlysupportsthedevelopment ofpassionate,creativeandresilient teams.Italsoensuresthatevery aspectofourbrandreflectsour commitmenttoDE&I. OUR COMMITMENTS: Thefollowingcommitmentsare tobeachievedby2027: Ethnicity • 30%underrepresented communities 1 inseniorleadership roles(GLTanddirectreports) Gender 1 • 50%womeninseniorleadership roles(GLTanddirectreports) • Increasenon-binarycolleagues to4%globally Inaddition,wealsoaimtoimprove accessibilitytoourstores,websiteand officesforconsumersandemployees livingwithdisabilities. DIVERSITY, EQUITY AND INCLUSION AN EQUITABLE, MORE INCLUSIVE WORKPLACE Wemakeongoingeffortstoensureour peoplereflectthesocietiesinwhichwe work.Butwewanttogofurther.Weare inspiredbyourcurrentandpotential diversityandareworkingtoensure employeesexperienceallthebenefitsofa diverse,equitableandinclusiveculture.In FY24,werecruitedanewGlobalHeadof DE&Iwhowillleadoureffortsinthisspace. Duringtheyear,wefocusedonthefollowing areasthatcollectivelysupportprogress towardsourcommitmentstoethnicity, genderanddisability: • Training, culture and leadership: Thisincludedhostingtrainingworkshops tohelpourMadeInEnglandfactory leadersandstaffbuildtheirknowledge aroundDE&Ianddriveempathy andunderstandingwithinthismulti- generationalworkforce.Theprogramme focusedonidentifyingandaddressing bothconsciousandunconsciousbias, promotinginclusivelanguageand buildinganinclusivemindset.Following aDE&Ilisteningsessionwithstore managersintheUSA,wealsoenhanced ourrecruitmentsystems. • Global DE&I recruitment audit: Wealsocommissionedanindependent externalreviewtoimproveDE&Iin ourglobalrecruitmentpractices. Thisresultedinthedevelopmentof recommendationsfocusedontraining forhiringmanagers,aswellasimproved datagatheringtotrackcandidates throughtherecruitmentprocess.Weplan toimplementtherecommendations acrossourregions. • Data collection and monitoring: We implementedthecollectionofemployee- declareddiversityinformationviaa ‘Self-ID’programmetoenhanceourdata, informourDE&Iinitiativesandtrackour progresstowardsourtargets.Ournext focusistofurtherimprovetheself- declaredinformationinregionswhere uptakehasbeenslower. • Inclusive practices: We also started worktoidentifyopportunitiestoimprove accessibilityforconsumers.We conductedaDE&Ilisteningsessionwith storemanagersintheUSAwhich identifiedareasofimprovementincluding expandingunisexsizinganddeveloping guidelinesformoreinclusivevisual merchandising. Inaddition,wecontinuedtoparticipateina rangeofrelatedexternalinitiatives,including: • ChangetheRaceRatio • DiversityinRetail • DiversityandInclusioninAsiaNetwork Commitment: 30% underrepresented communities in senior leadership roles (GLT and direct reports) FY24 23% (FY23: 22%) Commitment: 50% women in senior leadership roles (GLT and direct reports) FY24 46% (FY23: 36%) Commitment: Increase non-binary colleagues from 2% to 4% globally FY24 3.3% (FY23: 6%) WHY IT MATTERS... WHAT WE’RE DOING... HOW WE’RE DOING 1. Wehaveremovedthetargettoincreasemale representationacrossourretailstoresto40% becausewebelieveitnolongeralignswith ourDE&Istrategy.Weremainfocusedon progressingtowardsourotherDE&Itargets andcommitments. Gender diversity at Dr. Martens GENDER DIVERSITY OF DIRECTORS SEEP91 GENDER DIVERSITY OF SENIOR MANAGERS SEEP90 GENDER DIVERSITY OF GLOBAL WORKFORCE SEEP113 68 DR. MARTENS PLC ANNUAL REPORT 2024 SUSTAINABILITY CONTINUED Building awareness and allyship AtDr.Martensweencourageopen conversationsaboutthetopicsthatmatter tous.Partofthewaywedothisisthrough hostinginternalandexternaleventsthat buildfoundationallevelsofawareness amongourpeople,buildingtheir awareness,promotingallyshipand encouragingcriticalthinking. • Ethnicity: WecelebratedBlackHistory MonthwithourpeopleinOctober2023 acrossourUK,EMEAandAPACregions, andintheAmericasinFebruary2024. Eventsincludedpaneldiscussions, activationsandtalksfromcharities includingfromTheStephenLawrence DayFoundation(abeneficiaryofa Dr.MartensFoundationgrant). • Gender:Wewanttoofferaworkplace thatworksforallgenders.Thismeans providingequalopportunities,aninclusive culture,asustainablework-lifebalance andsafeworkingconditions.InFY24, wecontinuedourworkwithnon-profit, Catalyst,tomakesureourworkplace isoneinwhichwomencanthriveand achievetheirfullpotential.InMarch2024 wecelebratedInternationalWomen’sDay withourpeopleinternallythroughpanel discussions,lunchandlearnsessions andotherresourcesandevents. • LGBTQIA+:Weareaproudsupporter oftheLGBTQIA+community,whichis wellrepresentedwithinourworkforce, accountingforapproximatelyathirdof ourpeople.Itisacommunitythathas helpeddefinewhatDr.Martensistoday andwillcontinuetohelpshapeourfuture. InadditiontoourongoingPrideevents andactivities,inFY24wesupportedthe 2023GayGamesinHongKong,through specialoffersforathletesandvolunteers. Bysupportingeventsofthisnature,we againhopetoencourageourpeopleto thinkabout,understandandhelpaddress someofthechallengesfacedby LGBTQIA+individuals,bothinsideand outsideoftheworkplace.OutRight,a charitywhichholdsaconsultativestatus Nextyearweplantodeliverinclusive leadershiptrainingtoenableleadersto cascadetheirknowledgearoundDE&I, improveourcollectionofDE&Idata andcontinuetobuildcriticalthinking aroundDE&Iacrossthebusiness. WHAT’S NEXT? attheUnitedNationsEconomicand SocialCouncil,isoneoftheflagship partnersoftheDr.MartensFoundation andishelpingprovideawarenessand volunteeringopportunitiesinour employeepopulation. • Disability: Weimprovedaccessibility toourinternalintranetbyintegrating anaccessibilitywidget.Thisallows Dr.Martensemployeeswhohavevarious disabilitiestonavigatethiscriticalinternal communicationschannel. STRATEGIC REPORT 69DR. MARTENS PLC ANNUAL REPORT 2024 HUMAN RIGHTS Wearecommittedtorespectinghuman rights,notonlyinourownworkforce,but alsoinoursupplychain.Weimplement thiscommitmentbyengagingour suppliers,raisingtheirawarenessand monitoringtheirperformance. Ourcommitmenttorespectinghuman rightsisimplementedthroughourDOCtrine (ourbusinesscodeofconduct),Supplier CodeofConduct,MigrantWorkerPolicy, Anti-SlaveryandHumanTraffickingPolicy andDE&Istrategy. Whenitcomestoourownemployees,we offeranindependent,confidentialhotlinethat peoplecanusetoraisehumanrights concernsandgrievancesiftheyarise.Issues arereviewedbytheGlobalComplianceTeam andareescalatedviatheAuditandRisk Committeeasappropriate.Topicsraisedvia thehotlineinFY24includedDiscrimination, SexualHarassment,EmployeeRelations andWorkplaceViolence/Threats. Oursuppliersandtheirworkforceareimportant tous,thereforeourscopeofunderstanding humanrightsrisksandopportunitiesextends tooursupplychainpartners. CSR monitoring programme Akeymechanismweusetomanage humanrightsriskswithinoursupplychain isthroughourCSRmonitoringprogramme. Theprogrammeisappliedwhenwe onboardTier1andcertainKeyTier2 suppliers,whicharethensubjecttoongoing auditstoensuretheircompliancewith relevantlabourlaws,industrystandardsand ourownpolicies.ThisincludesourSupplier CodeofConduct,whichisbasedonthe EthicalTradingInitiative(ETI)BaseCode andappliesarangeofdetailedsupplier obligations.Theseobligationsaimto ensurethatthoseworkinginoursupply chaincan(forexample): • Freelychooseemployment • Freelyassociateandtakepartin collectivebargaining • Notbesubjecttochildlabour • Notbesubjecttodiscrimination FORMOREINFORMATIONON OUR SUPPLIER CSR AUDITS, SEEPAGE64. Anti-modern slavery programme Weexpecthighstandardsofeachotherand oursupplypartners.Wewillneveraccept modernslaveryinanyformandwetake ourresponsibilityseriously.InFY24,we continuedtoraiseawarenessaround humanrights,withaparticularfocuson modernslavery.Weincludeanti-modern slaveryandforcedlabourclauseswithin Nextyearweplantofurtherintegrate humanrightsintoourthird-partydue diligenceprocess.Wealsoplanto implementasupplychainmappingtool tosupporthigherlevelsoftransparency andtohelpusidentifyhumanrights risksmoreeffectively. Human rights due diligence review InFY24,wecommissionedathird-party experttocarryoutanindependenthuman rightsduediligencereview.Thisaimedto identifythestrengthsandweaknessesinour currenthumanrightsprogrammeandto providerecommendationsforimprovement. Theassessmentwasbasedonareviewofour relevantmanagementsystemdocuments andinterviewswithinternalstakeholders. Thefindingswerethenbenchmarkedagainst theproposedEUCorporateSustainability DueDiligenceDirective(CSDDD),theOECD ResponsibleBusinessConductGuidance, andtheOECDDueDiligenceGuidancefor ResponsibleSupplyChainsintheGarment andFootwearSector(OECDGarmentand FootwearGuidance). Theassessmentfoundwehaveagood foundationforourhumanrightsprogramme, andperformedwellwithrespectto: • Thecommunicationofpolicycommitments internally,tosuppliersandtothepublic. • Theinternalreportingofriskassessment findingstoseniormanagement. Theassessmentalsofoundwehavegood oversightofourproductsupplychainatTier1 andmostofTier2(i.e.whereourexisting humanrightsduediligenceeffortsarefocused). Italsoidentifiedanumberofareaswherewe couldfurtherimproveourmanagement approach.Itrecommendedweexpandthe scopeofourhumanrightsprogrammeand duediligencetocaptureabroaderrangeof suppliers.Asaresult,wearereviewingand developingourCompanypolicies,andworking toembedhumanrightsriskacrossour businessinteractionswithallvendortypes. COMMITMENTS SUPPORTED: • Respectforhumanrights ourcontractualagreementswithsuppliers. Wealsooffer‘ForcedLabourandEthical Trade’trainingtoallofouremployees. FORFURTHERINFORMATION ON HOW WE ADDRESS MODERN SLAVERY RISKS IN OUR SUPPLY CHAIN,SEEPAGE64.INADDITION, OUR FULL MODERN SLAVERY STATEMENTCANBEFOUNDON OURPLCWEBSITE WHY IT MATTERS... WHAT WE’RE DOING... FOCUS WHAT’S NEXT? 70 DR. MARTENS PLC ANNUAL REPORT 2024 SUSTAINABILITY CONTINUED COMMUNITY Wewanttoplayapositiveroleinsociety, bothwithinourlocalcommunitiesand atagloballevel.Thisisaboutacting courageouslyandshowingwecare. Andwewantourpeopletofeel empoweredtodothesame.This meansgivingavoicetotheissues thatneedraising,supportingthe communitieswhoneeditandproviding fundingtothosecausesthatmatter. DELIVERING CHANGE THROUGH OUR OWN ACTIONS Wehaveastrongtrackrecordofsupporting socialjusticecauses.Thisincludesafocus onanti-racismandLGBTQIA+rights.In FY24,webuiltonourexistingeffortsby facilitatingandencouragingemployee volunteering,includingthroughthe organisationofteamvolunteeringdays. WealsocontinuedtoencourageourUSA employeestousetheirpaidJuneteenth holidaytovolunteerintheircommunities. VolunteersfromourAmericasheadquarters inPortlandattendedatwo-dayJuneteenth Oregonparadeandfestival. Inaddition,wesetupaGlobalChampions Networktoconnectanddriveengagement betweenouremployeesandtheDr.Martens Foundation.Championsaretaskedwith: • AmplifyingtheimpactoftheFoundation, bypromotingtheinvolvementoftheir colleagueswiththeorganisationsitfunds andbyengagingwithcolleaguesto nominatecharitiesfortheFoundation tosupport • SupportingtheFoundationwithresearch andcommunicationsandmeeting regularlytoidentifyopportunitiesto amplifytheworkfurther • Participatinginthegrantapplication reviewprocess,learningnewskills andbetterunderstandingtheworkings ofcharities DELIVERING CHANGE THROUGH THE DR. MARTENS FOUNDATION TheDr.MartensFoundationisan independentgrant-makingcharity,which wehelpedestablishin2021.Todate, Dr.Martenshasprovided£0.8minfunding totheFoundation.Itchampionssocial justicecausesbyaddressing: • Theimmediateneedsofunderserved communities • Theunderlying,longertermdrivers ofinjustice TheFoundationmakesgrantsthroughits grassrootsprogrammeanditsRighttoBe programme.Itseffortsareguidedbyits fourpillarsofsocialjustice. Inaddition,theFoundationhastheability toprovideimmediategrantstohelp addressemergenciesanddisasters. InFY24,forexample,itmadea£150,000 emergencygranttotheBritishRedCross. £1.9M donatedto65organisationsbythe Dr.MartensFoundationinFY24 Human rights Protectingandrespecting everyone’shumanrightsso thattheycanenjoybasic rightsandfreedoms Participation Ensuringpeopleareinvolved withdecisionsthatgoverntheir lives,particularlythosethat aremarginalisedandexcluded insociety Equity Impartiality,fairnessand justiceforallpeopleinsociety withafocusoneradicating systeminequalitiesand embeddedbiases Access Peopleshouldhaveequal accesstoresourcesincluding education,healthcareand employmentopportunities The Foundation’s four pillars of social justice WHAT WE’RE DOING... WHY IT MATTERS... STRATEGIC REPORT 71DR. MARTENS PLC ANNUAL REPORT 2024 TheupcomingfocusfortheDr.MartensFoundationisto continuetoprovidefundingtoitspartnersanddevelopa communicationsplan,tobetteramplifythegreatworkof itscharitypartnersexternally.Thiswillalsogiveconsumersan opportunitytofindoutmoreabouttheDr.MartensFoundation andwhatitstandsfor. Right to Be programme TheRighttoBeprogrammeisdesignedtochallengethe systemsthatperpetuatesocialinequities.Ittypicallyprovides multi-yearhigher-valuegrantstocharitiesthataddressissues suchasracialinjustice,genderinequalityandadvocatingfor LGBTQIA+rights.InFY23,fiveorganisationswerechosento receivefundingof£1.9macrossprojectslastingapproximately twotothreeyears.£580,000ofthefundingcommittedwas grantedtotheRighttoBepartnersduringFY24.Theimpacts ofthesegrantstodatearedetailedbelow.Wehaveusedthe LGBTQIA+acronymrequestedbyeachcharity. TheWomen’s Foundation Outright International ReBit NationalBlack JusticeCoalition EuropeanNetwork AgainstRacism Project timeframe Dec 2022 toJan2025 Dec 2022 toJan2026 Apr 2023 toMay2025 Dec 2022 toJan2026 Jan2023 toFeb2026 Location HongKong Global Japan USA Europe Focus theme Women’s empowerment LGBTIQA+rights LGBTQ+rights LGBTQ+Rights& RacialJustice RacialJustice Right to Be funding impact to date The Dr. Martens Foundation is supporting The Women’s Foundation Mentoring Programme, Male Allies and Gender Equality and Inclusion Working Group, its STEM programme for underprivileged girls and improvements to its IT infrastructure. The Dr. Martens Foundation supports Outright’s research, grantmaking and advocacy programs and campaigns to protect and advance LGBTIQ equality, including projects to promote LGBTIQ- inclusive humanitarian assistance, livelihood, and to enhance knowledge about LGBTIQ people with policymaking and philanthropic stakeholders. The Dr. Martens Foundation is supporting ReBit to provide training for teachers and students on the needs and rights of the LGBTQ+ community. It also provides support to corporations with research, consulting services and publishing information on the needs of the LGBTQ+ community. The Dr. Martens Foundation is funding NBJC’s action hub for Black LGBTQ+ communities and organisations to engage with decision-makers to advance policy solutions. The initial funding supported NBJC to draw up a public policy agenda which ensures that the Black LGBTQ+ communities’ unique needs are at its centre. The Dr. Martens Foundation funding supports the development of a community engagement and movement-building model for anti-racism organisations. It also supports the development of academic communities and awareness raising of structural racism in Europe. WHAT’S NEXT? Grassroots programme TheGrassrootsprogrammeallowsouremployeestonominatecharitiesandgrassrootsorganisationsforsupportfromtheDr.Martens Foundation.InFY24,morethan£1mwasawardedthroughthisprogrammeto59partners(FY23:£531,000/28grants). 72 DR. MARTENS PLC ANNUAL REPORT 2024 SUSTAINABILITY CONTINUED SUSTAINABILITY GOVERNANCE TheBoardhasultimateresponsibilityfor overseeingESGrelatedactivitiesacrossthe business.Thisincludesoursustainability strategy.Assustainabilityincreasingly becomescentraltoourbrandoffering, sustainabilitywillbesponsoredbyournewly appointedChiefBrandOfficer,IjeNwokorie, fromFY25.Thismovewillenableustofurther embedoursustainabilityworkacross Dr.Martens.DuringFY24,sustainability topicsdiscussedatBoardmeetingsfocused onrepair,resale,innovativematerialtrials, andengagementsurveyresults.ESG horizonscanningreportswerealsoprepared fortheBoardonaquarterlybasis. TheSustainabilityCommitteeassiststhe Boardbyprovidingreviewanddirectionfor thesustainabilitystrategy.TheSustainability CommitteeischairedbyourCEO,Kenny Wilson,andincludesourCOOandCPSO, plusotherkeyfunctionalheads.Itreports directlytotheBoardandprovidesregular updatestohelpdeterminethefocusand directionofthestrategy. InFY24,theCommitteemetonabi- monthlybasis,withrelevantworkinggroups feedingintothesemeetings.Ourworking groupsarefocusedonthefollowing: • Operations Working Group:Ensuring highstandardsacrossouroperationsand supplierbase,includingthemaintenance ofstrongCSRstandardsandthe minimisationofenvironmentalimpacts • Materials and Packaging Working Group:Identifyinganddelivering sustainabilityimprovementsacross allofourproductsandpackaging • Lifecycle Working Group:Reducingthe impactofourproductsthroughouttheir lifecycle,fromdesignthroughtoend-of-life. Ourclimateworkstream(whichisaimed atreducingandreportingourScope1,2 and3emissions)isofacross-functional natureandfeedsintoeachoftheseworking groups.InFY24,wedisbandedour SustainabilityCommunicationsWorking Group,tostreamlineinteractionsbetween oursustainabilityandmarketingteams. InFY24,keyareasoffocusforthe Committeeincludedourrecentlyapproved SBTs,thelaunchofourreclaimedleather product,thego-to-marketprocessfor sustainablematerials,thelaunchofour authorisedrepairandresaleinitiatives,the outcomesofourhumanrightsduediligence reviewandsustainabilitymarketing. Inaddition,our: • RecommerceSteeringCommitteeis responsibleforadvancingrepairand resaleopportunitiesandincorporating recommerceintoourstrategyand financialplanning.ItischairedbyourCFO andmeetsapproximatelyeverysixweeks • TCFDSteeringCommitteeisresponsible forourreportingagainsttheframework’s requirements,aswellastheunderlying analysisneededtoinformthesame includingtherisksandopportunities posedtoourbusinessbyclimatechange. Itincludesrepresentativesfromour Finance,SustainabilityandRiskteams Policies OurESGpolicyrequirementsarereviewed regularlybyourLegal,Complianceand Sustainabilityteams.Policiesaredeveloped usinginternationalstandardsandindustry bestpractice.Ourinternalauditteam providesperiodic,targetedreviewsofour relatedpoliciesandprocedurestothe AuditandRiskCommittee. KeyESGpoliciesinclude: • TheDOCtrine,ourbusinesscodeof conduct,whichincludesafocuson: – Anti-Bribery,CorruptionandFraud – Anti-Bullying,Discriminationand Harassment – CompetitionLaw/Anti-Trust – ConfidentialInformation – ConflictofInterest – DataProtection – HealthandSafety – HumanRightsandEthicalTrade • AnimalDerivedMaterialsPolicy • Anti-SlaveryandHumanTraffickingPolicy • GlobalSanctionsCompliancePolicy • MIEEnvironmentalPolicy • ‘SpeakUp’WhistleblowingPolicy • GlobalHealthandSafetyPolicy • ThirdPartyDueDiligencePolicy Theseareinadditiontooursupplierpolicies (page64). FOR FURTHER INFORMATION VISITDRMARTENSPLC.COM Risk management WeannuallyassessrisksrelatedtoESG issuesaspartofouroverallenterpriserisk managementapproach(page38). Compliance and training Weuseourglobal,onlinecompliance trainingplatformtodeliverpoliciesand trainingmaterials(translatedinrelevant languages)acrossallofourregionson aconsistentbasis.Allemployeesare offeredtrainingonthefollowingmodules: • AcceptableUsage • Cybersecurity • DataProtectionandPrivacy • Diversity,Equity&Inclusion • ForcedLabourandEthicalTrade • FinancialCrime(includingAnti-Bribery andCorruption) • SpeakingAsOne(speakingonbehalf ofthebusiness) • HealthandSafety • SustainableDesign Theplatformprovidestargeted, supplementarytrainingand communicationswhereneeded. SUSTAINABILITY COMMITTEE RECOMMERCE STEERING COMMITTEE TCFD STEERING COMMITTEE SUSTAINABILITY WORKING GROUPS OPERATIONS MATERIALS & PACKAGING LIFECYCLE CLIMATE Climate-related risks and opportunities are raised in each Sustainability Working Group DR. MARTENS PLC BOARD STRATEGIC REPORT 73DR. MARTENS PLC ANNUAL REPORT 2024 SASB REFERENCE TABLE TheSustainabilityAccountingStandardsBoard(SASB)Foundationisanot-for-profit,independentstandards-settingorganisation thataimstoestablishandmaintainindustry-specificstandards.ThistableidentifiesthestandardsdeemedrelevanttotheApparel, Accessories&Footwearindustry,asdefinedbySASB’sSustainableIndustryClassificationSystem(SICS).Itreferencesthelocationin ourAnnualReportthatrespondstoeachmetric.Therearesomeareaswhereinformationhasnotbeencaptured,howeverweareworking toimproveourdatasystemsinordertocollectandmonitorallrequireddata. Metric Category Unit of Measure Code Response Number of (1) Tier 1 suppliers and (2) suppliers beyond Tier 1. Quantitative Number CG-AA-000.A (1) We have 27 Tier 1 supplier factories (13 Footwear, 8 Accessories, 6 Outsole). (2) For AW24 production we have 96 Tier 2 suppliers. Our supplier numbers fluctuate season to season. More information can be found on page 64. MANAGEMENT OF CHEMICALS IN PRODUCTS Discussion of processes to maintain compliance with restricted substances regulations. Discussion and analysis N/A CG-AA-250a.1 See ‘Chemicals’ and ‘Water’ sections within ‘Our supply chain’ on page 55. Discussion of processes to assess and manage risks and/or hazards associated with chemicals in products. Discussion and analysis N/A CG-AA-250a.2 See ‘Chemicals’ and ‘Water’ sections within ‘Our supply chain’ on page 55. ENVIRONMENTAL IMPACTS IN THE SUPPLY CHAIN Percentage of (1) Tier 1 supplier facilities and (2) supplier facilities beyond Tier 1 in compliance with wastewater discharge permits and/or contractual agreement. Quantitative Percentage (%) CG-AA-430a.1 (1) 100% of Tier 1 suppliers sign our Environmental Standards agreement, which includes our wastewater management and effluent treatment requirements. (2) 100% of our leather suppliers are LWG certified. Those that are certified and conduct wet processing comply with the LWG protocol, which is aligned to ZDHC and Dr. Martens wastewater requirements as outlined in our Environmental Standard. Percentage of (1) Tier 1 supplier facilities and (2) supplier facilities beyond Tier 1 that have completed the Sustainable Apparel Coalition’s Higg Facility Environmental Module (Higg FEM) assessment or an equivalent environmental data assessment. Quantitative Percentage (%) CG-AA-430a.2 (1) In FY24 our Tier 1 Made In England manufacturing sites maintained ISO 14001 certification. 30% of our Tier 1 footwear supplier factories have declared they have completed the Higg FEM assessment. 15% have declared they have ISO 14001 (including our Made In England factory). (2) 100% of the tanneries we source from are certified by the Leather Working Group, which is the leading environmental certification for tanneries globally. Environmental certification is not currently being monitored across all of our Tier 2 suppliers, but we will endeavour to do so in the future. LABOUR CONDITIONS IN THE SUPPLY CHAIN Percentage of (1) Tier 1 supplier facilities, (2) supplier facilities beyond Tier 1 that have been audited to a labour code of conduct and (3) percentage of total audits conducted by a third-party auditor. Quantitative Percentage (%) CG-AA-430b.1 (1) 100% of our Tier 1 supplier factories have been audited to the Workplace Conditions Assessment (WCA) on-site audit protocol and surpassed our required CSR criteria. (2) 100% of the tanneries we source leather from are LWG certified, for which a recognised social audit is now a requirement. Across our Key Tier 2 supplier base, over 90% have been audited to a labour code of conduct (either WCA assessment or other accepted social audit). (3) 100% of our Tier 1 CSR audits were conducted by a third-party auditor. Priority non-conformance rate and associated corrective action rate for suppliers’ labour code of conduct audits. Quantitative Rate CG-AA-430b.2 Supplier violations found during audits are categorised by four levels of severity: zero-tolerance violations, major, minor and moderate. Zero-tolerance violations are considered the highest severity of non-conformance. During FY24, 0% of audit items were classified as zero-tolerance violations. For more information on our CSR monitoring programme see Responsibly managing our supply chain (pages 64 and 65). Description of the greatest (1) labour and (2) environmental, health and safety risks in the supply chain. Discussion and analysis N/A CG-AA-430b.3 (1) For more information see Responsibly managing our supply chain (pages 64 and 65) or our latest Modern Slavery Statement. (2) Our priority climate-related risks can be found in our TCFD disclosure on page 75. RAW MATERIALS SOURCING (1) List of priority raw materials; for each priority raw material: (2) environmental and/or social factor(s) most likely to threaten sourcing, (3) discussion on business risks and/or opportunities associated with environmental and/or social factors, and (4) management strategy for addressing business risks and opportunities. Discussion and analysis N/A CG-AA440a.3 (1) Leather, PVC. (2, 3, 4) For more information see Materials and Packaging (pages 57 to 60), TCFD Report (page 75) and Risk management (page 38). (1) Amount of priority raw materials purchased, by material, and (2) amount of each priority raw material that is certified to a third-party environmental and/or social standard, by standard. Quantitative Percentage (%) by weight G-AA440a.4 In AW24 100% of our upper leather came from LWG certified tanneries. In FY24, we began the implementation of a new system which, once fully operational, will deliver enhanced visibility across our product lifecycle and enable reporting in the required unit of measure against this metric. 74 DR. MARTENS PLC ANNUAL REPORT 2024 SUSTAINABILITY CONTINUED TASK FORCE ON CLIMATE- RELATED FINANCIAL DISCLOSURES Compliance Statement Wehavesetoutbelowourclimate-relatedfinancialdisclosuresasrequiredbytheCompaniesAct2006.TheseareinlinewiththeUK ListingRules(LR9.8.6R).ThisalsoconstitutesourresponsetotherecommendationsandrecommendeddisclosuresoftheTaskForce onClimate-relatedFinancialDisclosures(TCFD).WehaveconsideredtheTCFDAnnexandapplieditwhererelevant. TCFD Consistency Index ThisindextablesignpoststowheredisclosuresareincludedintheFY24AnnualReportandAccounts.Ourdisclosuresareconsistent withtheTCFD’sfourrecommendationsand10ofthe11recommendeddisclosures.Webelieveourdisclosureispartiallyconsistentwith recommendation2b.Thisyearwehaveconductedfinancialmodellingtounderstandthepotentialimpactofthreeofourpriorityclimate risksandopportunities(CROs),howeverfurthermodellingisrequiredtoassessallofourpriorityCROsatthislevel. TCFD INDEX TABLE TCFD PILLAR RECOMMENDED DISCLOSURE CONSISTENCY LEVEL PAGE REFERENCE COMPANIES ACT 2006 414CB 1. Governance a. Describe the board’s oversight of climate-related risks and opportunities. Page 76 a. A description of the company’s governance arrangements in relation to assessing and managing climate-related risks and opportunities. b. Describe management’s role in assessing and managing climate-related risks and opportunities. Pages 76 and 77 2. Strategy a. Describe the climate-related risks and opportunities the organisation has identified over the short, medium, and long term. Pages 77 and 78 d. A description of: i. the principal climate-related risks and opportunities arising in connection with the company’s operations, and ii. the time periods by reference to which those risks and opportunities are assessed. b. Describe the impact of climate-related risks and opportunities on the organisation’s businesses, strategy, and financial planning. Pages 78 to 81 e. A description of the actual and potential impacts of the principal climate-related risks and opportunities on the company’s business model and strategy. c. Describe the resilience of the organisation’s strategy, taking into consideration different climate-related scenarios, including a 2°C or lower scenario. Pages 81 and 82 f. An analysis of the resilience of the company’s business model and strategy, taking into consideration different climate-related scenarios. 3. Risk management a. Describe the organisation’s processes for identifying and assessing climate- related risks. Page 82 b. A description of how the company identifies, assesses, and manages climate-related risks and opportunities. b. Describe the organisation’s processes for managing climate-related risks. Page 82 c. Describe how processes for identifying, assessing, and managing climate-related risks are integrated into the organisation’s overall risk management. Pages 82 and 83 c. A description of how processes for identifying, assessing, and managing climate-related risks are integrated into the company’s overall risk management process. 4. Metrics and targets a. Disclose the metrics used by the organisation to assess climate-related risks and opportunities in line with its strategy and risk management process. Page 83 h. A description of the key performance indicators used to assess progress against targets used to manage climate-related risks and realise climate-related opportunities and of the calculations on which those key performance indicators are based. b. Disclose scope 1, scope 2 and, if appropriate, scope 3 greenhouse gas (GHG) emissions and the related risks. Page 83 c. Describe the targets used by the organisation to manage climate-related risks and opportunities and performance against targets. Page 83 g. A description of the targets used by the company to manage climate-related risks and to realise climate-related opportunities and of performance against those targets. Key: Consistent Partially consistent STRATEGIC REPORT 75DR. MARTENS PLC ANNUAL REPORT 2024 OUR TCFD DISCLOSURES 1. GOVERNANCE 1a. Board oversight TheBoardisresponsiblefortheoversight ofsustainabilityandESGtopicsacross thebusiness,includingclimate-related risksandopportunities.Updatesrelating tosustainabilityandclimaterisksand opportunitiesarediscussedatBoard meetingsatleastannually.Thisallowsthe Boardtoprovidefeedbackandsteertothe sustainabilitystrategy,prioritiesandtargets (includingourNet-Zerotarget).TheBoard iskeptinformedofrelevantregulatory developments,includingthoserelatingto climate-relateddisclosures,through quarterly‘horizonscanning’papers.The Boardusesthisinformationtohelpguideits decision-making,includingstrategic,risk managementandbusinessplanningrelated decisions.Climate-relatedmatters(including repair,resaleandinnovativematerialtrials) werediscussedandincludedin50%ofthe CEOupdatesatscheduledBoardmeetings duringFY24. SUMMARY OVERVIEW OF PROGRESS IN FY24 InourFY23AnnualReport,werecognisedthatweneededtoundertakefurther worktodemonstratehowweareassessingandintegratingclimaterisksinto businessstrategyandfinancialplanning.Tostrengthenourapproach,wehave donethefollowing: Governance ProvideddetailedupdatestotheBoardviatherelevantBoardCommitteesand formalisedtheresponsibilitiesoftheSustainabilityCommitteeandAuditandRisk Committeeinrelationtoclimate-relatedmatters. Strategy Engagedwithstakeholdersinthebusinesstoreviewourexistingpriorityclimate- relatedrisksandopportunities(CROs)andevolvedourapproachtoassessand adjusttheimpactofCROs. Risk management DevelopedourapproachtoconductfinancialimpactmodellingofthreeCROsto furtherunderstandtheimpacttothebusiness. Metrics and targets OurNet-Zeroscience-basedtargetswerevalidatedbytheScienceBasedTargets initiative(SBTi).Weusedathird-partyemissionsmanagementtooltomeasure ourcarbonfootprintforthefirsttime.ClimateandESG-relatedtargetswere includedintheFY24ExecutiveBonusScheme. Othersustainabilityandclimate-related matterswerealsoregularlyhighlightedin BoardmeetingsthroughCEOupdates. Regularsustainabilityandclimate-related updatesarealsoprovidedattheBoard- levelandAuditandRiskCommittee. ThechairoftheAuditandRiskCommittee meetsregularlywiththeDirectorof SustainabilityforupdatesonESGmatters. Climate-relatedtargetsformedpartofthe ongoingperformancemeasuresforthe ExecutiveBonusSchemeduringFY24: page127. 1b. Management’s role TheDr.Martenssustainabilitystrategy, Planet,Product,People,isunderpinnedby acleargovernanceframework(page73) whichcoversstrategicoversightand responsibilities,aswellasinformation flowsbetweengroupsandtotheBoard. Sustainability Committee:The SustainabilityCommitteeischairedby theCEO.TheCommitteehasoverall managementresponsibilityforclimate- relatedtopicsandreportsregularlytothe Board.KeyoutputsfortheSustainability CommitteeduringFY24includedreview, discussionandapprovaloflaunchplansfor multiplesustainablematerials,resaleand repairprojectsandupdatesagainstthe verifiedSBTs,amongotherkeydecisions. Sustainability Working Groups:The Operations,Lifecycle,Materialsand Packagingworkinggroupsreportintothe SustainabilityCommitteeeverytwomonths toprovideprogressupdatesagainsttheir commitmentsandmetrics.Climatefalls withinthescopeofeachoftheworking groups,soclimate-relatedissuesareraised attheworkinggroupswhenrelevant. Workinggroupsareledbymanagement- levelsubjectmatterexpertsfromacross thebusiness,withguidanceandtechnical adviceprovidedbytheSustainabilityteam. TCFD Steering Committee:TheTCFD SteeringCommitteeiscomprisedofthe Finance,Sustainability,InternalAudit& Risk,andSupplyChainteams,andworks collaborativelytoidentify,monitorand manageclimate-relatedrisksand opportunities.TheTCFDSteering CommitteeischairedbytheCFO,whohas ultimateaccountabilityforclimate-related issues.Itprovidesupdatesintothe SustainabilityCommittee,whichischaired bytheCEO.KeyoutputsforFY24included afurtherassessmentofaselectionof climaterisksandopportunities, developmentoftheTCFDdisclosureand preparationsfortheclimatetransitionplan. Recommerce Steering Committee: Recommerceisakeyclimate-related opportunityforDr.Martens.TheRecommerce SteeringCommitteemeetsquarterlyand ischairedbytheCFO.Itisattendedby membersoftheFinance,GlobalSupply Chain,Sustainability,Legal,Technology, Digital,MarketingandrelevantRegional teams.ItworkstoadvanceDr.Martens’repair andReWairopportunitiesgloballyandto incorporaterecommerceintotheGroup’s strategicdirectionandfinancialplanning.Key discussionpointsandoutputsforFY24 includedsteeronthelaunchofbothReWair intheUSAandauthorisedrepairintheUK. 76 DR. MARTENS PLC ANNUAL REPORT 2024 OUR TCFD DISCLOSURES CONTINUED Sustainability team: Dr.Martenshasa teamofinternalsustainabilityexpertswho havetheskillsandknowledgetoadvise theCompanyonsustainabilitymatters. DuringFY24,theDirectorofSustainability reporteddirectlyintotheChiefPeopleand SustainabilityOfficer(CPSO).Going forwards,theSustainabilityteamwillreport intothenewlycreatedroleofChiefBrand Officerassustainabilitybecomesevermore importanttoourbrandandproduct.The DirectorofSustainabilityisresponsiblefor coordinatingthebusiness’sapproachto managingsustainabilityandclimate-related matters.TheyalsosupporttheInternalAudit andRiskandFinanceteamstointegrate climate-relatedfinancialinformationinto financialandriskbusinessprocesseswhere appropriate.TheSustainabilityandClimate ImpactManagerisresponsibleforthe day-to-daymanagementofclimate-related risksandopportunitiesacrossthebusiness. Theyhavetheresponsibilityforattendingall SustainabilityCommitteemeetingsand workinggroupstoensureclimaterisksand opportunitiesareconsideredandtoprovide specialistexpertise.Outsideofthe Sustainabilityteam,membersoftheFinance teamparticipateinexternaltrainingcourses, includingTheInstituteofChartered AccountantsinEnglandandWales SustainabilityCertificateandUniversityof CambridgeSustainableFinancecourse, toensuretheykeepuptodatewithrelevant climate-relatedfinancialtopics. Employee engagement: Dr. Martens employeesareeducatedonclimate-related topicsthroughinternalengagement andstrategiccommunications.InJanuary 2024,aninternalclimate-related engagementeventwasorganisedbythe Sustainabilityteamandsupportedby multiplefunctionsincludingGlobalSupply ChainandInternalCommunications.Its purposewastoincreaseawarenessof ourNet-Zerocommitmentandspecific emissionsreductioninitiatives,suchas materialinnovationandrecommerce. Theeventwasattendedbyalmost700 ofourpeopleglobally. Moredetailonoursustainabilitygovernance structurecanbefoundonpage73. 2. STRATEGY 2a. Climate-related risks and opportunities identified Asdetailedinpreviousdisclosures,we haveeightthematiccategoriesofpriority CROswhichwereidentifiedusingthe assessmentprocessconductedinFY22 withtheCarbonTrustwhichisoutlinedin ourFY22andFY23TCFDdisclosures. WeusetheNetworkforGreeningthe FinancialSystem(NGFS)climate scenariostotestourbusinessmodel andstrategy.Bychoosingthesethree scenarios,wesetouttoidentifyand understandtherisksandopportunitiesthat couldariseforourbusiness,supplychain andthewidereconomythatweoperatein, toensurethatweanticipateandprepare fortheseoutcomes.TheNGFSclimate scenariosareasfollows: ORDERLY TRANSITION SCENARIO (1.5°C) TheOrderlyTransitionscenarioassumes climatepoliciesareintroducedearlyand becomegraduallymorestringent.Both physicalandtransitionrisksarerelatively subdued. DISORDERLY TRANSITION SCENARIO (1.5°C-2°C) TheDisorderlyTransitionscenarioexplores highertransitionriskduetopoliciesbeing delayedordivergentacrosscountries andsectors.Itassumesthatnewclimate policiesarenotintroduceduntil2030,at whichpointverystrongpoliciesareneeded tolimitwarmingtobelow2°C.Physical risksarestillrelativelysubdueddueto globalwarmingbeinglimitedtobelow2°C. HOT HOUSE WORLD (4°C+) TheHotHouseWorldscenarioassumes thatglobaleffortsarenotsufficienttobe abletohaltsignificantglobalwarming. Transitionrisksarekeptrelativelylowas nonewclimatepolicyisintroducedor implemented.Criticaltemperaturesare exceededasaresult,leadingtosevere physicalrisks. Wecontinuetousethetimehorizonsused inpreviousdisclosures. Theyare: • Short-term:Lessthan5years • Medium-term:5-10years • Long-term:10+years Oureightthematiccategoriesofpriority CROsareasfollows: • Twophysicalrisksthatcouldimpactthe businessinaHotHouseWorldscenario (4°Cemissionsscenario),wherethe businessanditsvaluechainareexposed tochronicchangesinlocalclimatesand anincreaseinthefrequencyandseverity ofextremeweatherevents. • Fourtransitionalrisksandtwotransitional opportunitiesthatcouldimpactthe businessinanOrderlyTransitionscenario (1.5°C)orDisorderlyTransitionscenario (1.5°C-2°C),wherethebusinessis operatinginarapidtransitiontoachieve Net-Zeroby2050.Assumptionsinclude progressivegovernmentpolicies,market pressuresfromcompetitors,reputational impactsfrominvestorsandcustomers, andthetechnologygapbetweenwhatis availableandwhatisneededtoachieve Net-Zeroby2050. DuringFY24,theTCFDSteeringCommittee undertookfurtherworktostrengthenour approachwhichincludedformalisingthe responsibilitieswithintheTCFDSteering Committee.Anotherkeyfocuswastobetter understandthefinancialimpactofourpriority climate-relatedrisksandopportunities andtoengagetherelevantteamsinour assessmentofthese.Theaimwastoassess thepotentialimpacttothebusinessunder differentclimatescenariosinordertoassess Dr.Martensclimateresilience. UsingthepriorityCROsidentifiedinprevious years,weassessedtwoclimate-relatedrisks andoneopportunity.WeappliedtheNGFS climatescenariostothefollowingpriority CROs:riverineflooding,carbontaxationand repairandresale. Wehavespecifiedanestimatedfinancial impactrangeagainsttheseCROswhich alignswithourriskmanagementprocedure. Theimpactcategoriesoutlineapotential reductioninoperatingprofitforrisksand apotentialincreaseinoperatingprofitfor opportunities,takingintoconsideration mitigationmeasuresimplementedby Dr.Martens.Thecasestudiescanbe foundonpages81and82. TherisksandopportunitiesinourTCFD disclosureonlyreflectourclimate-related risksandopportunities.Foranoverview ofallofDr.Martensprincipalrisks,please refertopages39to43. STRATEGIC REPORT 77DR. MARTENS PLC ANNUAL REPORT 2024 Inthetablebelow,weoutlineourpriorityCROsalongwiththeirperceivedsensitivitytoeachofthelistedscenarios. How to read the table: Inthecaseofriverineflooding,itisanticipatedthattheimpactwillmaterialiseintheshorttomediumterm.InanOrderlyTransitionscenario whereconsistentpoliciesandmitigationshavebeenimplementedearly-onandhavecontainedtheworsteffectsofclimatechange,the impactisrelativelylow.TheimpactandlikelihoodofriverinefloodingishigherunderaDisorderlyTransitionscenario,wheretherehasbeen adelayinimplementingthepoliciesneededtocontainglobalwarmingduetothedisorganisednatureofthemitigationmeasures.InaHot HouseWorldscenario,insufficientmeasurestocontaintheeffectsofclimatechangehavebeenimplementedandasaresult,theimpacts andlikelihoodofriverinefloodingarethemostsevereandmostlikely. Time horizon Likelihood: Scenario sensitivity Climate-related risks Category Short Medium Long Orderly Disorderly Hot House PHYSICAL RISKS PR1.Riverineflooding Acute PR2.Changesin temperature Chronic TRANSITION RISKS TR1.Carbontaxation Policy TR2.Production standards Policy TR3.Increasedpricesof inputmaterials, processes and services Market TR4.Land-use& agricultural practices Market Climate-related opportunities TRANSITION OPPORTUNITIES TO1.Repairandresale Market TO2.Alternative materials Market Anticipatedonsetof riskoropportunity Estimatedfullimpact ofriskandopportunity Highlikelihood Lowlikelihood 2b. Impact of climate-related risks and opportunities Recognisingtheimpactofclimatechangeacrosstheshort,mediumandlongterm,weconsidertheactualandpotentialfinancialimpacts onourbusinessmodel,ourstrategyandourfinancialplanning.Wherepossible,welooktomitigatecostpressuresthroughprocurement andsourcingefficiencies.Givenourbudgetsandstrategicfinancialplansareunderpinnedbygoingconcernandviability,weassessed thepotentialbusinessandfinancialimpactofourpriorityCROsandalignedwiththebusiness’sinternalriskmanagementprocessas summarisedin3a.InourFY23TCFDdisclosureweprovidedanindicativegrossimpactforeachCRO,whichwasabroadestimationand didnotincludeafinancialrange.Sincethen,wehavedevelopedourapproachandconductedmodellingtoquantifyanestimatedfinancial impactagainstthreeofourpriorityCROs,indicatedinthetableonthenextpage.Theimpactcategoriesoutlineapotentialreductionin operatingprofitforrisksandapotentialincreaseinoperatingprofitforopportunities,takingintoconsiderationmitigationmeasures.Going forward,wewillaimtoquantifythefinancialimpactoftheremainingCROsusingourupdatedmethodology. 78 DR. MARTENS PLC ANNUAL REPORT 2024 OUR TCFD DISCLOSURES CONTINUED Inthetablebelow,wheretheestimatedfinancialimpactcategorystates‘furthermodellingrequired’,theindicativegrossimpactfrom ourFY23disclosurestillapplies.Astheindicativegrossimpactdoesnotalignwiththeupdatedimpactcategoriesusedinthisdisclosure, furthermodellingisrequiredtoaligntheimpactestimationusingourupdatedapproach. ESTIMATED FINANCIAL IMPACT CATEGORY Over£10m:Severe Between£5m-£10m:Serious Between£1m-£5m:Moderate Lessthan£1m:Low RISK ESTIMATED FINANCIAL IMPACT CATEGORY RISK DESCRIPTION HOW WE MANAGE AND MITIGATE THE RISK METRICS AND TARGETS Physical Risk 1. Acute – riverine flooding Timeframe: S M L Anincreaseintheseverityand frequencyofextremeweatherevents coulddisrupttheoperationofour valuechainandnegativelyimpact ourthird-partysuppliers’production capabilities,whichcouldsignificantly impactourbusiness.Wemodelleda significantweatherevent–riverine floodinginVietnam–inaHotHouse Worldscenario(4°C)tofurther understandthepotentialimpact. Seethecorrespondingcasestudy insection2cforkeyassumptions and more. Theimpactoffloodingonourvalue chainismitigatedthroughthe diversificationofsourcingcountriesand Tier1suppliers,countersourcingofhigh volumenewproducts,andspreading newproductdevelopmentsacross factories.Seethecorrespondingcase studyinsection2cforfurtherdetail. Tomonitortheriskof riverineflooding,we engagewithsuppliers throughastandardised informationrequest, whichmonitors individualsuppliers’ currentmitigation measures Physical Risk 2. Chronic changes in temperature Timeframe: S M L Furthermodelling required Leatherisourmostcommonlyused uppermaterial.Someofoursourcing regionsmaybesubjecttoanincrease indroughtsandheatwavesinaHot HouseWorldscenario(4°C),which couldresultinreducedavailability ofrawmaterials. Tobeabletounderstandourexposure totheriskofchronicchangesin temperaturetooursourcingregions, werequireadeeperunderstandingof wherethismayimpactDr.Martens sourcingthemost. Wearemakinggoodprogresson leathertraceability,with89%ofour upperleatherbeingtraceablebackto theabattoirforAW23.Ourlonger-term aimistoachievetraceabilitybacktothe farmtobetterunderstandtheimpact ofphysicalclimaterisksonourvalue chain.Seepages57and58ofour SustainabilityReportformoredetails onleathertraceabilitycommitments andourprogress. Wecanalsoreduceourexposureto thisriskbydiversifyingourmaterials, whichispresentedasanopportunity withinTO2.Byreducingourrelianceon conventionalleathersourcedfromhigh riskareas,wereducethepotential impactofthisrisk. Target:100%leather traceabilityforall countriesby2024 Status:89% Formoreseepage57 Transition Risk 1. Carbon taxation Timeframe: S M L Introductionofcarbontaxesand/or carbontradingmarketscouldincrease inputcostsacrossthevaluechain. Wemodelledthetwoextreme emissionspathwaysforDr.Martens (achievingNet-Zeroby2040resulting inlowemissions,andcontinuingBAU withnointerventionsresultinginhigh emissions)againstboththeOrderly TransitionandHotHouseWorld scenariostobetterunderstandthe rangeofpotentialimpacts. Seethecorrespondingcasestudyin section2cforkeyassumptionsandmore. Thereisadirectcorrelationbetween thelevelofemissionsandexposureto theriskofcarbontaxation–high emissionsmeanahighlevelof exposuretocarbontaxation.Therefore thebestmitigationforthisriskisto reduceouremissionsinlinewithour science-basedtargets,whichwere validatedbytheSBTiinOctober2023. Seethecorrespondingcasestudyin section2cforfurtherdetailonhowwe modelledthisrisk,andpage52inthe SustainabilityReportforfurtherdetail onsomeofthewaysweaimto decarboniseDr.Martens. Target:Dr.Martens commitstoNet-Zero GHGemissions acrossthevaluechain byFY40 Forourfullnearand long-termSBTs,see page51 STRATEGIC REPORT 79DR. MARTENS PLC ANNUAL REPORT 2024 RISK ESTIMATED FINANCIAL IMPACT CATEGORY RISK DESCRIPTION HOW WE MANAGE AND MITIGATE THE RISK METRICS AND TARGETS Transition Risk 2. Production standards Timeframe: S M L Furthermodelling required Decarbonisationstandardscouldbe imposeduponkeysuppliermarkets suchascattle-farming,PVC productionandpackaging,which couldresultinanincreasedpriceof inputmaterials(TR3).However, productionstandardsalsoofferan opportunityforDr.Martens.Resilience acrossthevaluechaincanbe strengthenedwhichcouldresultin positiveoperationalefficiency opportunities.Theoverallimpact dependsupongovernmentpolicyand alternativetechnologydevelopment. Byfindingandusingalternativematerials whicharelesscarbonintensivethan thosethatwecurrentlyuse,wereduce ourexposuretodecarbonisation standardsbeingimposedtoa detrimentaldegree(seeTO2).These couldincludebio-basedalternatives toPVCandlower-impactleather. Oursupplierswithenvironmental certificationsstandardsoran environmentalmanagementsystem inplacearealreadytakingstepsto managetheircarbonimpactthrough energy,wasteandwatermanagement, whichreducestheriskofnew decarbonisationstandardsderailing theirproduction. Target:100%upper leatherfromLWGby 2023(tobemaintained goingforward) Status:100%(forthe AW24season) Target:Sustainable veganuppermaterial by2028and sustainablealternative tooutsolesby2035 Status:Materialsin development.See pages58and59 Target:Environmental certificationstandardto Tier1suppliersby2025 Status:46%ofour Tier1footwear factories Transition Risk 3. Increased prices of input materials, processes and services Timeframe: S M L Furthermodelling required Thedecarbonisationofmaterialsand servicescouldrequirehigherlevels ofinvestmentwithinthesupplychain whichcouldbepasseddownstream toDr.Martens.Thiscouldmaterialise asapriceincreaseforfossilfuel- generatedelectricityfromthegridand inputsforvirginPVC. ProjectedgridpricesandPVCdemand arebasedonIEAWorldEnergy OutlookandEnergyTechnology Perspectivesscenarios,andheavy fueloilpricesbasedonGCAM5.3IAM outputs.ThepriceofPVCisassumed tohaveaunitarypriceelasticitywith respecttodemand.Fortheimpactof coalandgasprices,thegridmixis assumedtostayconstantwithno phaseoutoffossilfuelassets. Wearecontinuingtotestandtrial alternativematerials,includinga bio-basedPVCoutsolewhichmeetsour durabilityandqualitystandardsaswe progresstowardsourtargettodevelopa sustainablealternativeoutsoleby2035. Seepage59ofourSustainabilityReport formoredetailsonexploringbio-based alternativesandourprogress. Over90%oftheelectricitysourcedby ourownedandoperatedsitesintheUK andEMEAwasfromrenewable sourcesduringFY24,whichmitigates theriskofincreasinggridprices.We havealsoidentifiedsolutionstohelpus sourcerenewableelectricityacrossall ourownedandoperatedsitesglobally bytheendof2025,whichweareaiming toimplementoverthecourseofFY25. Target:Sustainable alternativetooutsoles by2035 Status:Materialsin development.See page59 Target:100% renewableelectricity acrossallownedand operatedsitesby2025 Status:Global= 46.3%oftotalkWh consumption(UK& EMEA93.5%) Transition Risk 4. Land-use & agricultural practices Timeframe: S M L Furthermodelling required Procurementcostscouldincreaseas aresultofglobalemissionreduction efforts,duetolessintensivepractices andhigherdemandforlowerimpact materials.Thiswouldalsonegatively impacttheriskareaTR3duetothe potentialcostuplift.Theimpacton Dr.Martensischallengingtomodel giventherelativelyfar-removed upstreampositionandthesystemic natureoftheserisks. Itisassumedthatpricesofrawhides willincreaseproportionatelywiththe decreasedavailabilityofland.Itisnot assumedthatDr.Martenssuppliers couldprocurehidesfromother locationsthatwouldbelessaffected resultinginalowerpricedifference. Wearelookingtodiversifyourmaterial procurementintoalternativematerials aspartofourNet-Zeroambition,which weseeasakeymitigationmeasurefor thisrisk.Seethe‘Alternativematerials’ opportunitybelow(TO2)andpages58 and59ofourSustainabilityReportfor moredetailsonhowweareexploring leatheralternatives. Target:100%of footwearmadefrom sustainablematerials by2040 Status:Seepages58 and59formoredetails onourprogress, includingthelaunchof ourfirstproductmade fromreclaimedleather 80 DR. MARTENS PLC ANNUAL REPORT 2024 OUR TCFD DISCLOSURES CONTINUED 2c. Resilience of the business strategy TheOrderlyTransition,DisorderlyTransition andHotHouseWorldscenarioswere appliedacrossthreeofourpriorityCROs. Theaimwastounderstandhowthedifferent scenariosimpactedtheriskoropportunity inordertobetterunderstandourbusiness’s climateresilience.Inallthreecases,no materialimpactonthebusinessmodel orstrategywasfound.Thefindingsare presentedinthefollowingcasestudies: PHYSICAL RISK: RIVERINE FLOODING (PR1) (Spotlight on riverine flooding in Ho Chi Minh City, Vietnam) Extremeweathereventscanhavefar-reaching consequencesforcompanieswithglobal supplychainssuchasDr.Martens.Basedon theCROprioritisationassessmentconducted inFY22bytheCarbonTrust,riverineflooding wasidentifiedasbeingoneofthemost materialphysicalrisksforDr.Martens. TheTCFDSteeringCommitteeoptedto explorethepotentialimpactofariverine floodingeventinHoChiMinhCity(HCM) duetotheregion’shigh-riskscoreonWorld ResourcesInstitute(WRI)Aqueducttool andthelocation’simportancetooursourcing strategy.SeveralofourTier1factoriesand materialsuppliers,includingtanneries,are locatedinHCM.Theaimwasthatin choosingonegeographicalregiontobegin theprocessofquantifyingpotentialfinancial impact,wecouldrefinethatprocessand quantifyotherphysicalrisksinfuture. Afloodingscenarioworkshopwas conductedinNovember2023whichwas attendedbymembersoftheTCFDSteering Committeeandrepresentativesfromthe GlobalSupplyChainteam.Followingthe workshop,wethenengagedwithTier1and KeyTier2suppliersintheregiontoascertain anyexistingmitigationmeasurestheymight haveinplace,andtobetterunderstandthe timeitwouldtakeforthefactoriestogetback tofullproductionshouldafloodoccur.This wasmodelledundertheassumptionofaHot HouseWorldscenario. Theinformationfromsupplierdiscussions wasthentranslatedintoanumberwhich representedcapacityloss.Thiswasthen modelledasakeycomponentofthe‘Severe butplausible’scenarioinFY26forthegoing concernworkfortheaudit.Thisproduceda potentialfinancialimpactfortheriskofa riverinefloodingeventinHoChiMinhCity. Wehaveexistingmitigationmeasures inplacetoavoidsupplychaindisruption whichcouldbeappliedintheeventofa severeweathereventsuchasflooding. Theseincludeadiverserangeofsourcing countriesandtheabilitytocounter-source highvolumeproducts. Wewillcontinuetoengagewiththeview tominimisebusinessdisruptionstoboth Dr.Martensandtooursuppliers. TRANSITION RISK: CARBON TAXATION (TR1) Carbontaxationrisk,frompoliciesand taxesspurredbytheParisAgreement, isanareaofpotentialfinancialimpact. Itcouldvarysubstantiallyamongcompanies operatinginthesamebusinesssectors. TheTCFDSteeringCommitteesoughtto betterunderstandhowitmightpresentas acost-savingopportunityifDr.Martens wastodecarboniseasplannedagainstthe Net-ZerobyFY40target,andthepotential implicationsoffailingtoachievethe Net-Zerotargetonthebottomline. Wemodelledthetwoextremeemissions pathways–thefirstbeingthatDr.Martens followtheNet-Zeroplanandachievethe emissionsreductionsnecessarytobea Net-ZerobusinessbyFY40,andthe secondbeingthatnodecarbonisation measuresaretakenresultinginveryhigh emissionsasthebusinessgrows.Wethen overlaidtwoextremecarbontaxation pathways–thefirstfollowedatransitional scenario(whichusedtheOrderlyTransition temperaturescenarios)whereasteepand consistentincreaseinthetaxpriceofaunit ofcarbonisneededtoencourageindustry decarbonisation,andthesecondfolloweda statedpoliciesscenario(HotHouseWorld) wherenonewlegislationorcommitments areimplementedandthetaxpriceofaunit ofcarbonremainsclosetowhatitisin presentday. OPPORTUNITY ESTIMATED FINANCIAL IMPACT CATEGORY OPPORTUNITY DESCRIPTION HOW WE MANAGE AND LEVERAGE THE OPPORTUNITY METRICS AND TARGETS Transition Opportunity 1. Repair and resale Timeframe: S M L Repairandresalepresentsa significantopportunityforDr.Martens throughthegenerationofrevenueand profitbasedontheprojectedratesof growthforthisnewmarket. Thesemarketsareprojectedtohave highlevelsofgrowthinallthree temperaturescenarios(Orderly Transition,DisorderlyTransition,and HotHouseWorld). Forkeyassumptions,seethecase studyinsection2c. Buildaprofitablerepairandresale businessmodelisastrategicproject underthe‘Direct-to-consumer’pillarof ourDOCSstrategy.Wesuccessfully launchedDr.Martensfirstresale businessmodelintheUKduringFY23, whichservedasthebasisfortheUSA ReWairrecommercemodelwhich launchedinMarch2024. Seethecorrespondingcasestudyin section2c. Target:100%of productssoldhavea sustainableend-of-life optionby2040 Status:Launched authorisedrepairin theUK,resaleintheUK andUSA(‘ReWair’), RecommerceSteering Committee,see section1b) Transition Opportunity 2. Alternative materials Timeframe: S M L Furthermodelling required Thealternativeleathermarket presentsasignificantopportunityfor Dr.Martensthroughthegenerationof revenueandprofitbasedonthe projectedrapidgrowthofthemarket. Lowerimpactleatherfromregenerative sourcesandalternativematerialssuch asreclaimedleathercouldalsohave theaddedbenefitofreducingthe emissionsintensityperproduct. Identifyingandusingalternative materialscouldalsoreduceexposure totheLand-use&agricultural practicesrisk(TR4)listedabove. ItisassumedthatDr.Martenswillbe abletocaptureamarketsharesimilarto theoneheldinregularfootwear,inequal proportionacrosstheEUandUSA. Dr.Martensiscommittedtoworking withsupplierstotrialalternativeand lowerimpactmaterials. InMarch2024welaunchedproducts madefromGenixNappa,amaterial derivedfromreclaimedleatheroffcuts destinedforlandfill.Wewillgather consumerfeedbackandcontinuetowork withthesuppliertofurtherenhancethe sustainabilitycredentialsofthematerial. Wehavealsoadvancedourworkon bio-basedveganmaterialsand investigatingregenerativeleather.See pages58and59ofourSustainability Reportforfurtherdetail. Target:Sustainable veganuppermaterial by2028 Status:Materialsin development.See pages58and59 Target:100%of footwearmadefrom sustainablematerials by2040 Status:Seepages58 and59formoredetails onourprogress, includingthelaunchof ourfirstproductmade fromreclaimedleather STRATEGIC REPORT 81DR. MARTENS PLC ANNUAL REPORT 2024 modellingrequired’.Wherethisisstated, theindicativegrossimpactfromtheFY23 disclosurestillapplies.However,asthis doesnotalignwiththeupdatedimpact categories,furthermodellingisrequiredto alignwithourupdatedmethodology.The businessimpactofsuchrisksisdiscussed intheStrategysectiononpages78to82. 3b. Processes for managing climate-related risks Wemanageourclimate-relatedrisksinthe samewayasotherrisksthatthebusiness faces(refertotheRiskmanagement sectionofthisreportforfurtherexplanation onouroverallapproachonpages38to43). Wehavesummarisedmanagement controlsandmitigationmeasureswe haveinplacetomanagethepotentially significantclimate-relatedrisksinthe tablesetoutinsection2b. 3c. Integration into overall risk management Climatechangeisintegratedinto Dr.Martensbroaderriskmanagement framework,andissubjecttothesame governance,annualreviewprocessand managementattentionasotherrisks recordedonourGroupRiskRegister. Wecurrentlyconsiderclimateriskasan emergingriskratherthanaseparate principalrisk.Thisassessmentisbased upontwomainconsiderations.Firstly,there remainconsiderablerangesofuncertainty ontheextentandtimingofwhenclimate risksmightmaterialise,particularlywithin thetimeframeofournormalbusiness Thefindingsshowedthatthebiggest impactwouldbeifatransitionalscenario happened,andDr.Martensfailedto decarbonise.Themodellingshowedthat reachingtheNet-Zeroby2040targetwas thebestmitigationtothisriskandwould alsoprovidesignificantsavingsin comparisontofailingtoachievethetarget. TheimpacttoDr.Martenswouldbe relativelyimmaterialifaHotHouseWorld scenariooccurred. ThisworkreiteratedtheneedforDr.Martens tobeaNet-ZerobusinessbyFY40and toachieveourscience-basedtargetsand commitments.OurSBTswereapproved bytheSBTiin2023andcanbefoundin theSustainabilityReportonpage51. TRANSITION OPPORTUNITY: REPAIR AND RESALE (TO1) ForDr.Martens,recommerceencompasses everythingrelatedtoresale,repair,trade-in andend-of-life.Recommercesupports progresstowardsourtargetstoofferour consumersoptionstomaximisetheuseable lifeoftheirproductsby2025,forallproducts tohaveasustainableend-of-lifeoptionby 2040,andreachingNet-Zeroby2040.Itis alsoarapidlyemergingsectorandhas becomethefastestgrowingchannelinretail, withtwoinfiveitemsinGenZ’scloset estimatedtobesecond-hand.Wecurrently offeranauthorisedrepairserviceinthe UKandresaleinitiativesintheUKand USA(‘ReWair’). ReWairlaunchedinMarch2024.AsReWair isanewbusinessmodelforDr.Martens, thecommercialplanforthefirstyearis conservative.However,wewilltestandlearn withtheambitiontogrowthisinlinewiththe macrotrendsofthesectorandintoamore significant,profitableportionofourbusiness. 3. RISK MANAGEMENT 3a. Processes for identifying and assessing climate-related risks IDENTIFICATION Weincludeclimate-relatedriskswithinour Groupriskmanagementframework,which isexplainedfurtheronpages38and39.We alsorecognisethedifferentnatureofclimate riskscomparedtosomeoftheotherriskswe typicallyface,particularlytheirlonger-term timehorizonandrelateduncertainty. Therefore,wecarriedoutamorein-depth identificationandassessmentofclimate risksandopportunities(CROs),withthe assistanceofexternaladvisers. ASSESSMENT Toassessandprioritisetheinitiallonglistof CROsthatwereidentified,weconsideredthe: • Indicativepotentialfinancialorstrategic impactonthebusiness • Likelihoodandsensitivitytoeachscenario • Velocityofchange Weappliedthethreeclimatescenarios (OrderlyTransition,DisorderlyTransition, HotHouseWorld)assetoutin2c.Those CROsthatexceededaninternallyagreed thresholdwereidentifiedaspotentially significant,prioritisedforfurtherassessment, andloggedonourclimateriskregister(as notedin2a). Furtherscenarioanalysis(assummarisedin 2c)willbeundertakenonaselectionofthese CROsonanannualbasis.TheCROs selectedforfurtheranalysiswilldependon updatesandchangesfromexternalfactors, suchaspolicyandlegislationchanges,as wellasbusinesschanges(suchasnew materialsandproductranges). Toassesstheimpacttothebusinessarising fromclimate-relatedrisks,wealignwith thebusiness’sinternalriskmanagement process.Forthepurposeofthisassessment, howweassessmaterialityinrelationto climate-relatedmattersisreflectedinthe keyabovethetableinsection2b. Inthecaseswherewehavenotyet undertakenanassessmentoffinancial materialityandthereforefinancialimpact, thesehavebeenidentifiedas‘further 82 DR. MARTENS PLC ANNUAL REPORT 2024 OUR TCFD DISCLOSURES CONTINUED planningcycle.Secondly,ourcurrent assessmentisthatthereisnomaterialimpact ontheachievementofourbusinessstrategy, whenconsideringthedirectimpactofclimate risksseparatefromotherrisks.However,we doincludeitasakeycomponentofthesocial andenvironmentalprincipalrisk. Wealsorecognisethatclimateimpacts ourotherprincipalrisks,particularlysupply chain,brandandproduct,legaland compliance,andthereforeclimateis consideredinthewayweassessand mitigatethoserisks.Pages40to43 includefurtherdetailonourprincipalrisks. Inordertofurtherintegrateclimatewithin ourapproachtoriskmanagementand decision-making,climateriskisconsidered whenassessingnewsupplierlocations andpartners.Itisconsideredwithinour newcountryriskassessmentprocess and,ifrelevant,itisalsoconsideredin theriskassessmentandduediligence processforselectingnewsupplierfactory locations.Findingsarereviewedbythe OperatingCommittee. 4. METRICS AND TARGETS Wehaveseveralmetricsandtargetsin placetomonitorourpriorityclimate-related risksandopportunities.Theseareoutlined inthecasestudiesonpages81and82. 4a. Metrics used to assess climate-related risks and opportunities ProgressagainstourNet-Zerotargetwill bethemainmetricweusetoassessour managementofclimate-relatedrisks andopportunities.Wehavesetabsolute reductiontargetsbasedonanFY20 baseline,alignedwithlimitingglobal warmingto1.5˚C(scope3near-term targetsarealignedtowellbelow2˚C). Dr. Martens commits to reach Net-Zero greenhouse gas (GHG) emissions across the value chain by FY40. Othermetricscurrentlyusedtomonitor ourclimate-relatedperformanceinclude: • Sourcerenewableelectricityacrossall ownedandoperatedsitesby2025 (FY24:93.5%(EMEAincludingUK)). • Environmentalcertificationstandardto allTier1suppliersby2025(FY24:46%). Wecontinuetoworktowardsourother sustainabilitycommitmentswhichsupport ourNet-Zerotargets.Approximately99%of ourfootprintcomesfromscope3emissions, themajorityofwhichcomefromouruse ofmaterialsincludingleather,PVCand packaging.Wehavesettargetstosupport sourcingoflowerimpactmaterialsincluding: • 100%offootwearmadefromsustainable materialsby2040. • 100%ofnaturalmaterialsinproducts fromregenerativeagricultureby2040. • 100%ofpackagingfromrecycledorother sustainablysourcedmaterialby2028. 4b. Scope 1, 2 and 3 emissions and related risks Thetablebelowcontainstheresultsofour FY23carbonfootprint.OurFY23andFY24 limitedscope1,2and3GHGemissionscan befoundinourSECRdisclosureonpage53. ForourFY23footprint,weusedathird- partyemissionsmanagementtoolto calculateourfootprintforthefirsttime. Thischangeinapproachmeantthatsome categorieswerecalculatedusingdifferent methodologiesthanthoseusedinFY20 andFY22.Furtherdetailscanbefoundon pages51to53ofourSustainabilityReport. Scope FY23 tonnes CO 2 e % of total value chain Scope1 1,151 0.4 Scope2 (Location) 1 2,502 – Scope2 (Market) 1,903 0.7 Scope3 2 27 7,40 2 98.9 1. Scope2(Location)notincludedinthetotal orcalculation. 2. Allmaterialscope3emissionsareincluded.The followingGHGProtocolscope3emissionscategories areexcludedbecausetheyarecoveredinanother categoryorbecausetheyarenotrelevanttoour business:(8)Upstreamleasedassets,(10)Processing ofsoldproductsand(13)Downstreamleasedassets. Eachyearweaimtoimprovethegranularity andqualityofdatausedtocalculateour footprint.InFY23thiswassignificantly improvedacrossseveralcategories.Where available,weusedlifecycleassessments (LCAs)specifictothematerialswesourced. Forexample,weusedspecificLCAsfor 49%oftheleathertypeswepurchased, ratherthanusingthegenericemissions factorforleather.Theseimprovements meanourFY23footprintismoreaccurate andcomprehensivethaninpreviousyears. 4c. Climate-related targets and performance Targetsrelatingtoourclimate-relatedrisks andopportunitiescanbefoundonpages 79to81andallotherprogressagainst sustainabilitycommitmentscanbefound throughoutourSustainabilityReport. 5. WHAT’S NEXT? Next,weaimtoquantifythefinancialimpact ofthepriorityCROswhichhavenotbeen assessedindetailyet.Wealsoplanto conductadoublematerialityassessment.A doublematerialityassessmentidentifiesthe sustainabilitymattersthataremostmaterial toanorganisationanditsstakeholdersby evaluatingtheirimpactonenvironmental andsocialfactors(inside-outperspective), whilealsoconsideringhowthesefactors influencetheorganisation(outside-in perspective).Wewillaimtoreviewour CROsaspartofthisprocess. Scope 3 emissions category FY23 emissions (tCO 2 e) Percentage contribution to scope 3 emissions Purchasedgoodsandservices 214,405 7 7.3% Capitalgoods 10,880 3.9% Fuelandenergyrelatedactivities 973 0.3% Upstreamtransportationanddistribution 20,993 7.6% Wastegeneratedinoperations 1,400 0.5% Businesstravel 6,563 2.4% Employeecommuting 4,288 1.5% Downstreamtransportationanddistribution 4,157 1.5% Useofsoldproducts 1,906 0.7% End-of-lifetreatmentofsoldproducts 11,100 4.0% Franchises 287 0.1% Investments 450 0.2% STRATEGIC REPORT 83DR. MARTENS PLC ANNUAL REPORT 2024 ThissectionoftheStrategicReportconstitutesDr.MartensNon-FinancialandSustainabilityInformationStatement,producedtocomply withSections414CAand414CBoftheCompaniesAct2006.Theinformationlistedisincorporatedbycross-reference. Reporting requirement Dr. Martens supporting statements, policies and procedures Policy description Where to find more information in this report Page(s) Business model N/A N/A Business model 16 and 17 Non-financial KPIs N/A N/A Measuring our performance 31 Principal risks Group risk management processes and procedures N/A Risk management and principal risks 38 to 43 Environmental matters 1 Supplier Environmental Standards Sets out our expectations for how our suppliers manage their environmental impacts, including but not limited to energy, water, waste and chemicals. Risk management and principal risks 38 to 43 Stakeholder engagement: Environment and communities 21 Sustainability Report: Our commitments 48 and 49 Our TCFD disclosures 75 to 83 Made In England Environmental Policy Sets out how our Made In England factory manages its environmental impacts and includes its commitments. Animal Derived Materials Policy Sets out the expected standards and behaviour of the relevant departments of Dr. Martens and its suppliers, in order to respect best practices when sourcing and using materials derived from animals. Human rights The DOCtrine Our employee code of conduct. Risk management and principal risks 38 to 43 Sustainability Report: Our commitments 48 and 49 Sustainability Report: Our people 63 to 72 Stakeholder engagement: Environment and communities 21 Stakeholder engagement: Partners 20 Stakeholder engagement: Suppliers 21 Stakeholder engagement: Our people 19 The Rule Book Our employee handbook. Modern Slavery Statement N/A Anti-Slavery and Human Trafficking Policy This policy sets out our expectation of our people and their responsibilities in preventing slavery & human trafficking. Supplier Migrant Worker Policy Our Supplier Migrant Worker Policy sets out the principles to ensure that Dr. Martens and its suppliers respect the responsible recruitment and employment of migrant workers and to help suppliers safeguard the rights and welfare of migrant workers in their supply chain and manage the associated risks and responsibilities. Supplier Code of Conduct and Workplace Standards The Supplier Code of Conduct and Workplace Standards sets out how we expect our suppliers to behave as a business and gives details on how to meet the expected standards. Our people The DOCtrine Our employee code of conduct. Risk management and principal risks 38 to 43 Stakeholder engagement: Our people 19 Sustainability Report: People 63 to 72 Sustainability Report: Our commitments 48 and 49 The Rule Book Our employee handbook. Mandatory training on key policies N/A Social matters The DOCtrine Our employee code of conduct. Sustainability Report: Our commitments 48 and 49 Sustainability Report: People 63 to 72 Stakeholder engagement: Environment and communities 21 Risk management and principal risks 38 to 43 Volunteering Policy Our employee policy on volunteering – all full-time employees get two days annual volunteering allowance to volunteer for a charity of their choice. Matched Giving Policy Our employee policy for matched giving – the business will match employee fundraising up to £250 if it meets the specific criteria. Anti-bribery and corruption compliance The DOCtrine Our employee code of conduct. Sustainability Report: People 63 to 72 Audit and Risk Committee Report 134 to 143 Sustainability governance 73 Risk management and principal risks 38 to 43 The Rule Book Our employee handbook. Our ‘Speak Up’ Whistleblowing Policy Our Speak Up Policy provides guidance on raising concerns around suspected illegal or unethical business practice affecting the Company, its employees, customers or suppliers about any aspect of the way we do business. Anti-Bribery and Corruption Policy Our Anti-Bribery and Corruption Policy sets out our expectations, and the mandatory requirements, of our people in respect of bribery, corruption and gifts and hospitality related matters. Supplier Anti-Bribery and Corruption Policy Our Supplier Anti-Bribery and Corruption Policy sets out the mandatory requirements for those doing business with Dr. Martens. Third Party Due Diligence Policy Our Third Party Due Diligence Policy sets out the due diligence process to be conducted prior to engaging third parties by our people. Global Sanctions Compliance Policy Our Global Sanctions Compliance Policy sets out the expectations and requirements for compliance with sanctions laws when dealing with third parties. TheStrategicReport,whichhasbeenpreparedinaccordancewiththerequirementsoftheCompaniesAct2006,hasbeenapprovedby theBoardandsignedonitsbehalf. OnbehalfoftheBoard Kenny Wilson ChiefExecutiveOfficer 29May2024 1. Followingamendmentofsections414C,414CAand414CBoftheCompaniesAct2006byTheCompanies(StrategicReport)(Climate-relatedFinancialDisclosure) Regulations2022,ouralignmentwiththenewdisclosurerequirementsarecoveredonpage75ofourTCFDReportintheindextable. 84 DR. MARTENS PLC ANNUAL REPORT 2024 NON-FINANCIAL AND SUSTAINABILITY INFORMATION STATEMENT GOVERNANCE Chair’s introduction to governance 86 Governance at a glance 90 Board of Directors 92 Governance Report 96 Global Leadership Team 100 Our stakeholders 101 Our culture 106 Nomination Committee Report 108 Remuneration Committee Report 116 Remuneration Report 119 Audit and Risk Committee Report 134 Directors’ Report 144 In this section: GOVERNANCE 85DR. MARTENS PLC ANNUAL REPORT 2024 GOVERNANCE HIGHLIGHTS Appointment of new CFO GilesWilsonappointedasChiefFinancial Officer,joiningthebusinessinearlyFY25. READ MORE P8 CEO succession Post-year-end,announcedKennyWilson’s intentiontostepdownasCEObytheendof FY25tobesucceededbyIjeNwokorie. READ MORE P109 FY24 Board Evaluation Annualevaluationsoftheeffectivenessofthe Boardandprincipalcommitteesledbythe ChairandCompanySecretary. READ MORE P114 Remuneration Policy review RemunerationPolicyreviewedduringthe year,includingconsultationwithourlargest investors. READ MORE P120 In my opening Chairman’s statement (see pages 6 to 9), I set the scene for our FY24 Annual Report with an overview of our performance, the challenges we faced both during the period under review and into a new financial year, as well as the successes we achieved through the resilience and dedication of our people globally. OurGovernanceReportsupplementsthis story,whichissetoutinfullintheStrategic Report(pages1to84),withdetailsofhowthe Boardhasprovidedoversightandguidance totheSeniorLeadershipTeaminnavigating thepresentchallenges,executingourDOCS strategyandfocusingonreturningthe Grouptogrowthwhilepreparingourselves forthenextphase. Areas of focus in FY24 and FY25 priorities MuchofthedebatewithintheBoardroom overthecourseofFY24andintothenew financialyearhasbeenframedbytwostrategic imperatives.Specifically,addressing underperformanceandre-ignitingdemandin ourlargestmarket,theUSA,intheshortterm andbuildinganorganisationthatismore mature,equippedandproperlystructuredto deliveronourambitionsoverthemediumand longerterm.Onthelatterpoint,weareclear thattheroadtowardsthisnextphasewillbe markedlydifferenttothatwhichledustoreach thesymbolic£1bnrevenuemilestoneinFY23 andthattheBoardhasanimportantrole toplayinensuringthattheorganisationis preparedforthis.However,ourimmediate priorityistoprovideourseniorleadership withtheguidanceandsupporttheyrequire toaddresstheissuesfacedbythebusiness andleaditthroughthischallengingperiod. Weremainresolutelyfocusedondrivingthis agendaoverthecomingyear. DEAR SHAREHOLDERS DELIVERING A STRONG GOVERNANCE FOUNDATION PAUL MASON, CHAIR 86 DR. MARTENS PLC ANNUAL REPORT 2024 CHAIR’S INTRODUCTION TO GOVERNANCE TheBoardiscommittedtoexecuting ourDOCSstrategymoreeffectivelyand discussedthis,includingourkeystrategic programmes,atourmeetingsthroughout theyear.Theseandtherangeofother matterswediscussedoverthecourseofthe yearareoutlinedonpages96and97,while theworkundertakenbytheAuditandRisk, NominationandRemunerationCommittees isdetailedintheirrespectivereportsfrom pages134,108and116respectively. Aswemoveintothisnewfinancialyear, IandmyfellowBoardmemberswillalso continuetoensurethatourorganisation isunderpinnedbyrobustgovernance processesandpracticesthatsupportour strategicpriorities. Evolving leadership FY24wasayearinwhichourSenior LeadershipTeamwassignificantlyreshaped andthisprocesswillcontinueduringthenew financialyear.InNovember2023,wewere delightedtoannouncetheappointments ofGilesWilsonasournewChiefFinancial Officer(CFO)andofIjeNwokorietothenewly createdroleofChiefBrandOfficer(CBO). Subsequenttotheyearend,inApril2024we announcedthatKennyWilsonwillbestepping downasCEObeforetheendofFY25.Kenny willbesucceededbyIje,whowillcontinuein theroleofCBObeforesteppinguptoleadthe businessasitsnewCEO. Gilesformallyjoinedusinhisnewrolein Mayandiscurrentlyundertakingafull induction,detailsofwhichcanbefoundon pages110and111.GilesbringstotheBoard awealthofexperienceofpublicmarkets, globalbrandsandwholesaledistributionin additiontohiscoreskillsetasaseasoned financeleader.IandmyfellowBoard memberslookforwardtoworkingwithhim aswecalibrateourcoreprioritiesaroundour currentchallengingcircumstancesandlook togrowthebusinessintheyearsahead. MoreinformationaboutGilescanbefound inhisbiographyonpage93andintroductory Q&Aonpage8. GilessucceedsJonMortimore,whoretired inMarch2024havingservedasCFOfor nearlyeightyears.Duringhistenure,Jon oversawthetransformationofDr.Martens fromaprivatelyowned,wholesale-focused organisationtoapubliclylisted,DTC-led globalbusinesswithrevenuesexceeding £1bnforthefirsttimeinFY23.Hisroleinthat journeywassignificantandhebeginshis retirementwiththesincerethanksandbest wishesofthewholeorganisation.Details oftheinterimarrangementsputinplace betweenJon’sretirementandGiles’firstday withthebusinesscanbefoundonpage136. Ijeisafamiliarfigurewithintheorganisation, havingservedontheBoardasan IndependentNon-ExecutiveDirectorsince theCompanywentpublicinJanuary2021. HesteppeddownfromtheBoardand joinedtheGlobalLeadershipTeam(GLT) full-timeasournewCBOinFebruary2024, withresponsibilityfortheoverallbrand strategyandoversightofourGlobal Marketing,ProductandStrategyfunctions. Ijehassetabouthisnewrolewith characteristicenergyandfocusandwill continuetodosooverthecomingmonths. Moredetailsregardingthechangestoour SeniorLeadershipTeamcanbefoundin theReportoftheNominationCommittee, frompage108. Our approach to this year’s Governance Report Whenconsideringourapproachtoour reportingforFY24wetooktheviewthat, whileundoubtedlycomprehensive,the lengthandcomplexityoftheAnnual Reportcanhaveadetrimentalimpact ontheclarityofthekeymessagingand toooftenleadstorepetition. Withthisinmind,thisyearwehave soughttoproduceareportthatismore concise,wherepossible,andwitha tighterfocusonhowwe,asaBoard, havesoughttoapplyhighstandards ofcorporategovernancethroughour activitiesandintheinterestsofour shareholdersandwiderstakeholders. Thisincludeshowtheprioritiesofour stakeholdershaveinformedand impactedthedecisionswetookasa Boardduringtheyear.Moreinformation canbefoundonpages101to104. WhiletheUKCorporateGovernance Code(theCode)principlescontinueto underpinthestructureofourGovernance Report,wehaveremovedtheprovision- by-provisionbreakdownwhichfeatured inlastyear’sReportintheinterestsof keepingitconcise,clearandengaging. Ourfull,detailedresponsetotheCode cannowbefoundinthe‘Governance’ sectionofwww.drmartensplc.comandis referenced,whererelevant,throughout theGovernanceReport.Ourstatementof compliancewiththeCodeandafulllistof pagereferencesindicatingwhererelevant informationislocatedwithinthisAnnual Reportcanbefoundonpage89. CULTURE AND PEOPLE AsaBoard,weretainformal accountabilityforpromotingthe Dr.MartenscultureofRebellious SelfExpressionthroughwhichwe articulatewhoweare,whatwe believeinandwhatwestandforas anorganisation,whichisnotrivial responsibilityforsuchawell-loved, globalbrand. Ourcultureisnotsomethingthat cansimplybeimposedbyBoard mandate;rather,ithasbeenshaped byconsumersandourpeopleover manydecades.TheBoardseeksto ensureitisprominent,embedded acrosstheorganisationandreflected inhowwedobusiness.Wemonitor thisinanumberofways,including reviewingthefeedbackfromour annualEngagementandInclusion Surveyandthroughtheworkofour EmployeeRepresentativeNon- ExecutiveDirector,RobynPerriss. FURTHERDETAILSONH O W THE BOARD MONITORS THE HEALTH OF THE DR.MARTENS CULTURE CANBEFOUNDONP106 GOVERNANCE 87DR. MARTENS PLC ANNUAL REPORT 2024 DR. MARTENS BOARD AND SENIOR LEADERSHIP STRUCTURE PLC BOARD GLOBAL LEADERSHIP TEAM Engaging with our stakeholders Iwaspleasedtohaveseveralopportunities throughouttheyeartomeetwithinvestors, listentotheirfeedbackanddiscusstheir perspectives,particularlyonthechallenges facedbythebusinessintermsof performanceandwidermacroeconomic uncertainty.Theseconversationswere excellentopportunitiesnotonlyto understandinvestorconcerns,butalsoto emphasiseourbeliefinthestrengthofthe prospectsofthisbrandoverthelongerterm. TurningtotheBoard’sbroaderengagement withtheCompany’skeystakeholdergroups, thisremainsanimportantfacetofourroleand anessentialoneininformingandguidingthe decisionswemakeintheBoardroom.Each ofourstakeholdergroupsisidentifiedinthe StrategicReport,alongsideourformal ‘Section172Statement’,onpages18to21. Detailsoftherangeofwaysinwhichwe consideredtheirinterests,andtheoutcomes ofourengagementwiththem,areprovidedon pages101to104ofthisGovernanceReport. RobynPerriss,ourEmployeeRepresentative Non-ExecutiveDirector,alsocontinuedto engagedirectlywithemployeesfromacross ourglobalbusinessthroughherprogramme ofemployeelisteningsessions,moreabout whichcanbereadonpage105.Withour RemunerationPolicyduetobeputto shareholdersforitstriennialvoteatour upcomingAGM,ourRemuneration CommitteeChair,LynneWeedall,also engageddirectlywithinvestorsand employeesonourapproachestoexecutive remunerationandrenewingourpolicy forthenextcycle. Acknowledging our people Itwouldberemissofmetoconclude onanythingotherthanasincerenoteof thanks,frommyselfandonbehalfofthe Board,toallofouremployeesgloballyfor theirhardwork,steadfastsupportofthe brandandtheirresilienceduringadifficult periodforthebusiness. PAUL MASON CHAIR 29May2024 Kenny Wilson Chief Executive Officer Giles Wilson Chief Financial Officer Paul Mason Chair Lynne Weedall Senior Independent Director Robyn Perriss Independent Non-Executive Director Ian Rogers Independent Non-Executive Director Tara Alhadeff Non-Independent Non-Executive Director Andrew Harrison Independent Non-Executive Director PLC BOARD  DETAILSOFTHE ROLE OF THE BOARD AT DR. MARTENS AND THE DIVISION OF RESPONSIBILITIES BETWEEN KEY BOARD ROLES CANBEFOUNDATDRMARTENSPLC.COM Ije Nwokorie Chief Brand Officer Geert Peeters Chief Operating Officer Graham Calder Chief Technology Officer Bridget Jolliffe Chief People Officer Erik Zambon Strategy Director Adam Meek Chief Product Officer Mike Stopforth President, EMEA Jennifer Somer President, Americas Derek Chan President, APAC Emily Reichwald Company Secretary GLOBAL LEADERSHIP TEAM EXECUTIVE DIRECTORS Kenny Wilson Giles Wilson COMPANY SECRETARY Emily Reichwald 88 DR. MARTENS PLC ANNUAL REPORT 2024 CHAIR’S INTRODUCTION TO GOVERNANCE CONTINUED UK Corporate Governance Code 2018 compliance InFY24theCompanyagainassesseditselfwithreferencetotheUKCorporateGovernanceCode2018(theCode).TheBoardhasnoted the2024iterationoftheCodeandthatitwillapplytotheCompanywitheffectfromthe2025/26financialyearcommencinginApril2025. Assuch,theCompanywillfirstreportagainstthenewCodeinitsAnnualReportforFY26. TheBoardconfirmsthat,fortheyearended31March2024,theCompanyappliedthePrinciplesandcompliedwithallProvisionsofthe CodeduringFY24.FurtherinformationrelatingtotheBoard’sconsiderationsinrespectoftheindependenceofBoardChairPaulMason andNon-ExecutiveDirectorTaraAlhadeffcanbefoundonpages110and98respectively. ThewaysinwhichtheCode’sPrincipleswereappliedduringFY24areevidencedthroughouttheAnnualReport.Thetablebelowsetsout alistofpagereferencesagainsteachoftheCodePrinciples(AtoR).AfullresponsetotheCodecanbefoundinthe‘Governance’section ofwww.drmartensplc.com,whilethefulltextoftheCodeitselfcanbefoundontheFinancialReportingCouncil’swebsiteatwww.frc.org.uk. BOARD LEADERSHIP AND COMPANY PURPOSE PRINCIPLE SUMMARY LOCATION OF INFORMATION AND RELEVANT PRINCIPLE(S) A Boardleadershipandeffectiveness Governance Report: GovernanceFrameworkP99:C BoardactivitiesP96:A OurstakeholdersP101:D, E OurcultureP106:B NominationCommitteeReportP108:B AuditandRiskCommitteeReportP134:C, E Strategic Report: AstrongsenseofpurposeP2:A SustainabilityReportP46:A StakeholderengagementP18:D, E BusinessmodelP16:B Strategy,StrategyinactionP22,P24:B RiskmanagementP38:C B Purpose,valuesandculture C Internalgovernanceandcontrols D Stakeholderengagementandparticipation E Workforcepoliciesandpractices DIVISION OF RESPONSIBILITIES PRINCIPLE SUMMARY LOCATION OF INFORMATION AND RELEVANT PRINCIPLE(S) F RoleoftheChair Governance Report: BoardofDirectorsP92:F, G DelegatingresponsibilitiesP98:F, G, H NominationCommitteeReportP108:H AuditandRiskCommitteeReportP134:C, E Strategic Report: Chair’sStatementP6:F CEO’sStatementP10:G G Independenceanddivisionofleadership responsibilities H Non-ExecutiveDirectorroleandtime commitment I Boardpolicies,processesandresources COMPOSITION, SUCCESSION AND EVALUATION PRINCIPLE SUMMARY LOCATION OF INFORMATION AND RELEVANT PRINCIPLE(S) J Appointmentprocesses,succession anddiversity Governance Report: Chair’sintroductiontogovernanceP86:J BoardofDirectorsP92:K NominationCommitteeReportP108:J, K, L Strategic Report: Chair’sStatementP6:J, K CEO’sStatementP10:J, K K Boardskills,experienceandknowledge L Boardevaluation AUDIT, RISK AND INTERNAL CONTROL PRINCIPLE SUMMARY LOCATION OF INFORMATION AND RELEVANT PRINCIPLE(S) M Internalandexternalaudit Governance Report: AuditandRiskCommitteeReportP134:M, N, O Strategic Report: RiskmanagementP38:M, O GoingconcernandviabilityP44:M, O N Fair,balancedandunderstandable O Principalrisks,riskmanagementandinternal controls REMUNERATION PRINCIPLE SUMMARY LOCATION OF INFORMATION AND RELEVANT PRINCIPLE(S) P Aligningremunerationwithstrategy,purpose andvalues Governance Report: RemunerationReportP119:P, Q, R RemunerationPolicyP120:Q Strategic Report: StakeholderengagementP18:P MeasuringourperformanceP30:P SustainabilityReportP46:P Q Remunerationpolicydevelopment R Reviewingremunerationoutcomes GOVERNANCE 89DR. MARTENS PLC ANNUAL REPORT 2024 CODE COMPLIANCE 50% 25% 25% 58% 17% 25% 50%50% 14% 29% 57% 25%25% 50% AT A GLANCE Thefollowingpagescompriseanumberofcharts settingoutdatarelatingtothetenureanddiversity ofourBoardmembersandtheGlobalLeadership Team,whichrepresentstheCompany’sSenior LeadershipTeambelowBoardlevel. Considerations under LR 9.8.6(9)-(11) Thetablesonpage91,opposite,setoutthe specificdatarelatingtotheethnicandgender diversityoftheBoardandGLTthattheCompany isrequiredtodisclosepursuantto,andinthe formatprescribedby,ListingRule9.8.6(10). TheCompany’schosenreferencedateforthe purposeofthesedisclosuresis31March2024, aligningwithourfinancialyearend. ForthepurposesofLR9.8.6(11),thedata disclosedinthesetableswascompiledusing informationacquiredthroughthe‘Self-ID’tool accessibletoemployeesviatheCompany’sHR informationsystem.Usingthistool,employees mayvoluntarilyandanonymouslydisclose informationrelatingtotheirethnicbackground andgenderidentity. Moreinformationrelatingtothecompositionof theBoard,tenure,independenceandfurther explanationsregardingthediversitytargets describedinLR9.8.6(9)andtherelevantdata collectionmethodologycanbefoundinthe NominationCommitteeReportfrompage108. BOARD TENURE AS AT 31MARCH 2024 AS AT 29MAY 2024 0-3 years Andrew Harrison 3-6 years Kenny Wilson, Robyn Perriss, Lynne Weedall, Ian Rogers 6+ years Paul Mason, Tara Alhadeff 0-3 years Giles Wilson, Andrew Harrison 3-6 years Kenny Wilson, Robyn Perriss, Lynne Weedall, Ian Rogers 6+ years Paul Mason, Tara Alhadeff GLT TENURE AS AT 31MARCH 2024 0-3 years Adam Meek, Meg Johnson, Jennifer Somer, Graham Calder, Mike Stopforth and Ije Nwokorie 3-6 years Kenny Wilson, Derek Chan, Geert Peeters 6+ years Jon Mortimore, Erik Zambon, Emily Reichwald AS AT 29 MAY 2024 0-3 years Mike Stopforth, Jennifer Somer, Adam Meek, Graham Calder, Ije Nwokorie, Bridget Jolliffe, Giles Wilson 3-6 years Kenny Wilson, Derek Chan 6+ years Geert Peeters, Erik Zambon, Emily Reichwald GENDER IDENTITY OF SENIOR MANAGEMENT 1 AS AT 31MARCH 2024 Male (40 employees) Female (40 employees) Non-binary Prefer to self-describe 1. ComprisesGLTdirectreportsandsubsidiarycompanydirectorsthatarenotalreadycapturedinGLT orBoarddataonthesepages.Confirmationofgenderidentitywasprovidedonavoluntarybasis. 90 DR. MARTENS PLC ANNUAL REPORT 2024 GOVERNANCE AT A GLANCE 100% 0% 0% 0% 0% 0% 75% 8.3% 8.3% 8.3% 57% 43% 75% 25% REPORTING TABLE ON ETHNIC BACKGROUND OF THE BOARD AS AT 31 MARCH 2024 REPORTING TABLE ON ETHNIC BACKGROUND OF THE GLT AS AT 31 MARCH 2024 Percentage of the Group Board Percentage of the Global Leadership Team Number of Board members Number of senior positions on the Board (CEO, CFO, SID and Chair) Number of Executive Directors Percentage of Executive Directors Whole Board  WhiteBritishorotherWhite (includingminority-whitegroups) 7 3 1 100% 100%  Black/African/Caribbean/BlackBritish 0 0 0 0% 0%  Otherethnicgroup,includingArab 0 0 0 0% 0%  Asian/AsianBritish 0 0 0 0% 0%  Mixed/MultipleEthnicGroups 0 0 0 0% 0%  Notspecified/prefernottosay 0 0 0 0% 0% Number of GLT members  WhiteBritishorotherWhite (includingminority-whitegroups) 9  Black/African/Caribbean/BlackBritish 1  Otherethnicgroup,includingArab 1  Asian/AsianBritish 1  Mixed/MultipleEthnicGroups 0  Notspecified/prefernottosay 0 REPORTING TABLE ON GENDER IDENTITY OF THE BOARD AS AT 31 MARCH 2024 REPORTING TABLE ON GENDER IDENTITY OF THE GLT AS AT 31 MARCH 2024 Percentage of the Group Board Percentage of the Global Leadership Team Number of Board members Number of senior positions on the Board (CEO, CFO, SID and Chair) Number of Executive Directors Percentage of Executive Directors Whole Board Men 4 2 1 100% 57% Women 3 1 0 0% 43%  Notspecified/prefernottosay 0 0 0 0% 0% Number of GLT members Men 9 Women 3  Notspecified/prefernottosay 0 GOVERNANCE 91DR. MARTENS PLC ANNUAL REPORT 2024 LEADERSHIP AND RESPONSIBILITY PAUL MASON Chair Joined: September 2015 Experience: Havingchairedsixconsumerbusinesses duringhisvariedcareer,Paulbringsawealth ofexperienceinretailandconsumerbrand businesses.Paul’sexecutivecareerwithin theretailsectorincludesChiefExecutive OfficerofSomerfieldPLC,European PresidentofLeviStrauss&CoandChief ExecutiveOfficerofMatalanandAsda. How Paul supports the Company’s strategy and long-term success: Paulhasextensivecorporateknowledge ofDr.Martensfromwhenitwasaprivate companythroughtoitstransitionasalisted business.This,togetherwithhisbreadth ofexperienceacquiredoverthecourseof hiscareer,positionshimtooffervaluable strategicandoperationalinsightandrobust challengetotheBoard. Hisopen,engagingandinclusiveleadership styleencouragestransparencyandthe sharingofdiverseperspectiveswithinthe Boardroomandopendialoguewiththe Company’skeystakeholders.InFY24, thiswasparticularlyapparentinPaul’s engagementwithinvestorstounderstandtheir concernsagainstabackdropofdisappointing tradingandmacroeconomicuncertainty. KENNY WILSON Chief Executive Officer Appointed: July 2018 Experience: Withmorethanthreedecadesof experienceindevelopingandexpanding globalconsumerbrands,Kennyledthe transformationofDr.Martensfromaprivate companytopubliclylisted,amidstthe challengesofCovid-19.Beforejoining Dr.Martens,Kennyheldthepositionsof ChiefExecutiveOfficeratCathKidstonfor sevenyears,President,EuropeatClaire’s Accessoriesandalsoa19-yeartenureat LeviStrauss&Co,whereheheldsignificant positionsincludingPresidentofLevi’sBrand forEMEAandSeniorVicePresidentof CommercialOperations. AsannouncedbytheCompanyinApril 2024,subsequenttotheyearend,Kenny willstepdownasCEObeforetheendof FY25andwillbesucceededbyIjeNwokorie. How Kenny supports the Company’s strategy and long-term success: Kennyisdedicatedtosafeguardingthe brandandbusinessandpersonally championsthecustodianmindsetthat isintrinsictotheDr.Martensculture. Hisleadershipstylehasbeenshapedby hispassionforthebrandandextensive experiencebuiltoveracareerinthebranded goodssector.Kennyisknownforhis open-mindedness,abilitytolistenandto absorbandadapttofreshnewapproaches andperspectives,bothwithinandoutside oftheBoardroom. KennyannouncedhisretirementinApril. Kennywillleavethebusinessattheendof FY25,allowingsufficienttimeforasmooth handovertoournextChiefExecutiveOfficer, IjeNwokoriewhoisourcurrentChief BrandOfficer. The Board’s primary responsibility is leading the Company to deliver sustainable, profitable growth globally and drive long-term value for the shareholders of Dr. Martens plc. It sets a clear tone from the top by providing entrepreneurial leadership of the business and custodianship of the Dr. Martens brand. BOARD DEPARTURES IN FY24 Jon Mortimore,whowasChiefFinancial Officerforjustundereightyearsfrom 2016-2024,steppeddownfromtheBoard andretiredon26March2024. AfterservingforthreeyearsontheBoard, Ije Nwokoriesteppeddownfromhis positionasanIndependentNon-Executive Directoron1February2024andjoinedthe businessasChiefBrandOfficer.Ijewill succeedKennyWilsonasCEOandrejoin theBoardbeforetheendofFY25. 92 DR. MARTENS PLC ANNUAL REPORT 2024 BOARD OF DIRECTORS Incoming FY25 Committee membership Audit and Risk Nomination Remuneration Disclosure Employee Representative Director Chair GILES WILSON Chief Financial Officer Appointed: May 2024 Experience: Gileshasexperiencenavigatingfinancial markets,withyearsofexperienceonthe executiveleadershipteamsoflarge companies,includingpubliclistedcompany experience.Gileshasagreatunderstanding ofwhatitmeanstobealeaderina much-lovedcompany.GilesjoinsDr.Martens fromWilliamGrant&SonsLimited,oneof thelargestglobalspiritscompanies.Priorto this,GileswasatJohnMenziesplc,firstas CFOandthenCEO.Gileshasalsoheld seniorrolesatCommercialEstatesGroup andGallaherGroupplc. How Giles supports the Company’s strategy and long-term success: GilesisanexperiencedChiefFinancial Officerwithawide-rangingskillsetanda strongtrackrecordofdrivinggrowthat otherorganisations,inparticular,Giles’ understandingofbrandedgoodscoupled withoperationalmanagementleadership experiencewillbeanassetasthebusiness progressestothenextstageofitsstrategy. Giles’recentlistedcompanyexperience providestheBoardwiththestandardof technicalskillsandexpertiseexpected byourregulatorsandinvestors.Giles’ leadershipoftheglobalfinancefunctions willhelptoaligntheCompany’sfinancials acrossthebusinesswiththeDOCSstrategy, adjustingasappropriatetofacechallenges andopportunities. LY N N E W E EDA L L Senior Independent Director Appointed: January 2021 Experience: Lynne’s30-yearcareerspansacrossvarious executiveandnon-executiverolesinUK publicandprivatelimitedcompanies.She hasheldkeypositionssuchasGroupHR DirectorforSelfridgesGroup,Carphone Warehouseplc,andDixonsCarphoneplc, wheresheplayedacrucialroleinmerger integration.Additionally,Lynneservedas Non-ExecutiveDirectorandRemuneration CommitteeChairforGreeneKingplc, WilliamHillplc,andTreattplc.Priortothis, LynneheldseniorrolesatWhitbreadplc, Bupa,andTescoplc. How Lynne supports the Company’s strategy and long-term success: Lynneisanexperiencednon-executive directorandcontinuedtochairthe Company’sNominationandRemuneration Committeeswithdiligenceanddiscretion duringayearofsignificantchangeforthe SeniorLeadershipTeam.Lynneisrespected byherpeersforherpeople-centred approach,focusondiversityandsuccession planningandherabilitytoofferalternative perspectivesandpragmaticsolutionstothe rangeofissuesdiscussedatBoardand committeemeetings. Other appointments: Non-Executive DirectorandChairoftheRemuneration CommitteeandNominationCommitteeof SoftcatPLC,Non-ExecutiveDirectorand ChairoftheRemunerationCommitteeof Greggsplc,TrusteeofThePrince’sTrust andNon-ExecutiveDirectorandChairofthe RemunerationCommitteeofStagecoach GroupLtd. ROBYN PERRISS Independent Non-Executive Director Appointed: January 2021 Experience: Robynbringsextensivefinancialand governanceexpertise,coupledwithdiverse experienceinthetechnologyandmedia industries.UntilJune2020,sheservedas FinanceDirectoratRightmoveplc,aFTSE 100company,whereshenavigatedhigh growthamidstdigitaldisruptionandenhanced governanceandstrategicoversight.Priorto Rightmove,RobynheldthepositionofGroup FinancialControlleratAutoTrader. How Robyn supports the Company’s strategy and long-term success: RobynchairstheAuditandRiskCommittee withastrongfocusonrisk,controlsand assurance,bringingclaritytocomplex issues.Sheisvaluedforherfinancial expertise,capitalmarketsexperienceand throughherongoingsupportandguidance oftheGroupFinancefunction.Her extensiveregulatoryknowledgeandkeen focusonESGmatterscontinuetosupport theBoardandtheGlobalLeadershipTeam. AsEmployeeRepresentativeNon- ExecutiveDirector,Robynalsoengages directlywithemployeesgloballyandhas adoptedanapproachwhichvaluesopen communicationandencouragesthemto speaktheirminds.Sheisaprominentfigure at Dr. Martens and a respected mentor of senioremployees,whovalueherexpertise andexperience. Other appointments:Non-Executive DirectorofSoftcatPLC,HuelLtd,and NextFifteenGroupplc,whereshealso chairstheirrespectiveauditcommittees. GOVERNANCE 93DR. MARTENS PLC ANNUAL REPORT 2024 KNOWLEDGE AND EXPERIENCE TARA ALHADEFF Non-Independent Non-Executive Director Appointed: May 2015 Experience: TaraisapartneratPermira,aglobal investmentfirm,overseeingbrand investmentsintheconsumersector.Since joiningPermira16yearsago,Tarahas collaboratedwithnumerousbrands,retailers andconsumerinternetcompanies, contributingtosignificanttransactionssuch asPermira’sacquisitionofDr.Martens. InitiallyjoiningtheDr.MartensBoardinMay 2015,TaratransitionedtoaNon-Independent Non-ExecutiveDirectorroleinJanuary2021. BeforehertenureatPermira,sheworkedin investmentbankingatMorganStanley. How Tara supports the Company’s strategy and long-term success: TaraistheCompany’slongest-serving Boardmemberandbringsvaluable continuityandcorporateknowledge spanningitstransitionfromprivatetopublic ownership.TheBoardcontinuestobenefit fromTara’sextensivesectorexpertiseand broadinternationalexperience,whileher strongfinancialacumen,questioning mindsetandcollaborativestylearevaluable assetstotheBoard.Tara’sappointment alsocontinuestofacilitategoodshareholder engagementwiththePermirafunds. Other appointments:PartneratPermira AdvisersLLP,DirectoratSixPlatformVIII Limited,MemberofSupervisoryBoardat HazelParentCoSAS,Non-Executive DirectoratHanaGroupandGoldenGoose. ANDREW HARRISON Independent Non-Executive Director Appointed: May 2023 Experience: AndrewistheManagingDirectorofFreston Ventures,aleadingconsumerinvestment firm.HespentovertwodecadesatCarphone Warehouse,includingrolesasChief ExecutiveandChair.Andrewplayedapivotal roleinitsgrowthandinternationalexpansion. HeledthemergerwithDixonsin2014, servingasDeputyChiefExecutive.Andrew currentlyservesasSeniorIndependent DirectoratOcadoGroupplcinadditionto chairingtheRemunerationCommitteeand servesasthedesignatedNon-Executive Directorforworkforceengagement. How Andrew supports the Company’s strategy and long-term success: Andrewbringsextensivelistedcompany experiencetotheBoardandishighly valuedbyBoardcolleaguesandtheGlobal LeadershipTeamforhiscommercial expertise,broad-mindedapproachand engagingandsupportivestyle.Heoffers strong,entrepreneurialleadershipand valuableinsight,enablinghimtocontribute alternativeviewpointsand,where necessary,constructivechallengetothe Board’sdiscussions. Other appointments:SeniorIndependent DirectoratOcadoGroupplc,Chairat WhoCanFixMyCar.comLtd,ChairatStrike Limited,ChairatChickenShop(Chik’nLtd), DesignatedMemberofFrestonVentures InvestmentsLLP,DirectoratSmilesand SmilesHoldingLimited,ChairofTrustees atTheMix. IAN ROGERS Independent Non-Executive Director Appointed: January 2021 Experience: IanhasbeentheChiefExperienceOfficer atLedgersince2020,overseeingits consumer-facingofferandprotectingdigital assets.Previously,heservedasChief DigitalOfficeratLVMH,workingwithluxury retailbrandslikeLouisVuittonandDior,and continuestoactasanadviser.Ian’spast rolesincludeCEOofBeatsMusic,President andChiefTechnologyOfficeratMediacode, andWebmasteratWinamp.Hecontributed tothe2015launchofAppleMusicandhas beenapioneerofmusic-relatedwebsites sincetheearly1990s. How Ian supports the Company’s strategy and long-term success: Ian’sextensiveretail,digitalandmusic background,coupledwithhislifelong passionforthebrand,enrichestheBoard’s discussions.Hisinsightsintoculturalshifts andfuturetrendsfosterconstructive dialogueamongBoardmembersandwithin thebusiness.Ian’sdigitalexpertiseand experienceintheUSAarehighlyvalued byrelevantbusinessteams,asheshares histimeandextensiveindustryconnections tosupportthem. Other appointments:ChiefExperience OfficeratLedger,AdviseratLVMH,Board ObserveratLyst. Note on Committee membership: IansteppeddownfromtheRemuneration Committeewitheffectfrom1May2023. 94 DR. MARTENS PLC ANNUAL REPORT 2024 BOARD OF DIRECTORS CONTINUED Outgoing FY25 Committee membership Audit and Risk Nomination Remuneration Disclosure Employee Representative Director Chair EMILY REICHWALD Chief Sustainability Officer and Company Secretary Appointed: January 2021 Experience: EmilyjoinedDr.Martensin2015asGeneral Counsel,laterbecomingCompany SecretaryupontheCompany’slistingonthe LondonStockExchangein2021.Sheisa memberoftheGlobalLeadershipTeamand hasledtheLegalandSustainabilityteams forthelastnineyears.Emily’sremitalso includedtheHRfunctionbetween2022 and2024andshecontinuestochairthe Dr.MartensFoundation.Priortojoining Dr.Martens,sheheldseniorlegalpositions atAkzoNobelandICIplc,andtrainedasa solicitoratLinklatersduringwhichtimeshe wassecondedtoGECapitalandBPplc. Emily’sexternalexperienceincludesserving asaNon-ExecutiveDirectoratUK-based fuelpovertycharityNationalEnergyAction from2015to2018. How Emily supports the Company’s strategy and long-term success: Emilyisarespectedadvisertothe Boardandhascultivatedstrongworking relationshipswiththeChairandCEO. Havingheldavarietyofrolesand responsibilitiesduringhercareerwith Dr.Martens,shehasacquiredsignificant insightintoallaspectsofthebusiness andcontinuestofacilitateeffective communicationbetweentheBoard andstakeholdersonrelevantissues. EmilywillstepdownasCompanySecretary ofDr.Martensplcon3June2024and followingashortbreakwillreturntothe Companyinaparttimeadvisercapacity laterintheyear. ATTENDANCE AT MEETINGS HELD DURING FY24 TheattendanceofeachDirectoratBoardandCommitteemeetingsheldintotalin FY24issetoutbelow.InadditiontoBoardandCommitteemeetings,sufficienttime isprovided,periodically,fortheChairtomeetprivatelywiththeSeniorIndependent DirectorandtheNon-ExecutiveDirectorstodiscussanymattersarising. Board Audit and Risk Committee Remuneration Committee Nomination Committee Number of meetings held 9 5 7 6 1April2023–31March2024 Numberattended/maxnumbercouldhaveattended: Paul Mason 9/9 6/6 Kenny Wilson 9/9 Jon Mortimore 9/9 Tara Alhadeff 9/9 5/6 3 Robyn Perriss 9/9 5/5 7/7 6/6 Ian Rogers 9/9 1/1 4 5/6 3 Ije Nwokorie 9/9 1 5/5 3/4 3 Lynne Weedall 9/9 5/5 7/7 6/6 Andrew Harrison 9/9 4/5 2 6/6 5/5 ThereweresevenscheduledandtwoadditionalBoardmeetingsheldinFY24. 1. IjeNwokorieattendedtheMarch2024meetingattherequestoftheBoard. 2. AndrewHarrisonwasunabletoattendthe3May2023AuditandRiskCommitteemeetingdueto pre-existingbusinesscommitments.ThiswasnotifiedpriortotheChairoftheCommittee. 3. TaraAlhadeff,IjeNwokorieandIanRogerswereunabletoattendtheNominationCommitteemeeting on13April2023asitwascalledatshortnotice. 4. IanRogerssteppeddownfromtheRemunerationCommitteeon1May2023. BOARD SKILLS AND EXPERIENCE Brand/ consumer Financial Retail Digital PLC International 1 Independent? Paul Mason Kenny Wilson N/A Jon Mortimore 2 N/A Tara Alhadeff Ije Nwokorie 3 Ian Rogers Robyn Perriss Lynne Weedall Andrew Harrison Giles Wilson 4 N/A 1. SeniorrolesoutsidetheUK. 2. Steppeddownon26March2024. 3. Steppeddownon1February2024. 4. JoinedtheBoardon13May2024. GOVERNANCE 95DR. MARTENS PLC ANNUAL REPORT 2024 BOARD ACTIVITIES These pages provide an overview of the range of matters the Board discussed at its meetings together with a timeline of key events taking place during the year. Whilenotintendedtopresentanexhaustive listofeveryitemconsideredbytheBoard overthecourseoftheyear,thisinformation providesinsightintothenatureandsubstance oftheconversationsthattakeplaceinthe BoardroomandhowtheBoard’sactivities continuetofocusondeliveringtheDOCS strategy,withdueregardtotheinterestsof alloftheGroup’skeystakeholdergroups. ThevastmajorityoftheBoard’ssignificant discussions,debatesanddecisionstakeplace duringitsregular,scheduledBoardmeetings. Thesearesupplementedbyitsannual strategy‘off-site’and,whereneeded, additionaldeepdivestoprovideamore in-depthunderstandingofandcontext aroundkeyissues. Boardmeetingsarealsoanimportant mechanismthroughwhichtheDirectors dischargetheirduties,particularlyunder Section172oftheCompaniesAct2006. BOARD ACTIVITIES TIMELINE April 2023 Scheduled meetings: Key events: Executive Director regional visit (USA) Employee Listening Group (Global Management Team) May 2023 Scheduled meetings: Key events: Andrew Harrison joined the Board June 2023 Scheduled meetings: Key events: Board Strategy Off-Site (London) Full Year Investor Roadshows FY23 Full Year results, publication of FY23 Annual Report and AGM Notice of Meeting July 2023 Scheduled meetings: Key events: NED engagement visit to the UK factory Executive Director regional visits (USA, France, Japan, Korea) Employee Listening Groups (APAC, Cobbs Lane) AGM trading update Board and Committees: Board Remuneration Committee Audit and Risk Committee Nomination Committee Annual General Meeting GLT meeting Other calendar events: Director attended events and other key dates Employee Listening Group Market announcements Agendasareagreedinadvancebythe ChairmanandCompanySecretary followingdiscussionaboutproposedtopics andfocusareaswiththeChiefExecutive OfficerandChiefFinancialOfficer.Tothe extentpossible,meetingsarescheduled toalignwiththewidercadenceofthe businesstoensurethattheytakeplace atoptimalpointsthroughouttheyear. Agendasaretailoredtoappropriately balancedetailedupdatesfromthe ExecutiveDirectorsontradingandfinancial performancewith‘deepdives’intospecific strategicpriorityareasandtherangeof governancerelatedandothermatters thatrequiretheBoard’sattention. LINKS TO STRATEGY:  Direct-to-consumerfirst  Organisationalandoperational excellence  Consumerconnection  SupportbrandexpansionwithB2B READ MORE ABOUT OUR STRATEGY FROMP22 The Board spends a significant portion of its time during its meetings reviewing, analysing and debating matters relating to the Company’s key strategic priorities, advising and shaping strategic direction as needed. Link to relevant strategic pillars: Summary of activities in FY24: • Held the annual two-day Board strategy ‘off-site’ at which topics including the strategic direction and development of the business over the coming five-year period were discussed in depth. • Discussed insights from the work undertaken in partnership with specialist external consultants TruePoint and OC&C during the year to identify options to optimise the structure of the organisation to better support DTC-led operations. • Reviewed the five-year plan and considered the critical drivers of future growth, including driving brand heat and demand, retail expansion in key markets, the rollout of omnichannel capabilities, consumer data improvements, and ecommerce. • Reviewed and discussed senior appointments and succession planning for key roles, notably the CEO. • Significant focus during Board discussions on the developing macroeconomic context and resolving the challenges impacting the Group’s largest business in the USA. STRATEGY 96 DR. MARTENS PLC ANNUAL REPORT 2024 GOVERNANCE REPORT September 2023 Scheduled meetings: Key events: Product ‘teach-in’ investor event Employee Listening Group (EMEA Retail) January 2024 Scheduled meetings: Key events: Employee Listening Group (EMEA Non- Retail) Q3 trading update February 2024 Scheduled meetings: Key events: Executive Director regional visits (USA, Hong Kong, Japan) Announcement of CFO start date Ije Nwokorie stepped down from the Board November 2023 Scheduled meetings: Key events: Executive Director regional visit (USA) FY24 Half Year Results Investor Roadshow Employee Listening Group (Global Supply Chain) Announcements of new CFO and CBO appointments FY24 Half Year Results Most Board meetings incorporate focused ‘deep dive’ sessions dedicated to areas of particular strategic importance, which are typically led by members of the GLT. These sessions enable the Board to delve into the complexities of key issues with the relevant members of senior leadership, enabling more informed decision-making. Link to relevant strategic pillars: Summary of activities in FY24: • Reviewed the Amp product strategy, including the prior evolution of the range and plans for its future development. • Discussed key marketing initiatives, upcoming campaigns and priority areas of focus for the Marketing function from financial, brand and consumer perspectives. • Considered detailed updates on the Americas business and discussed local market conditions, progress in addressing the identified challenges, reigniting boots in that market, future outlook and key strategic priorities. • Detailed discussions focusing on the budgeting process and proposals for FY25, taking into consideration the key underlying assumptions, principal risks and stress-testing. • Reviewed the brand and product strategies, including learnings from prior years, current focus areas and longer-term objectives. These comprise the range of regular reviews, regulatory updates and other standing items which assist the Board in fulfilling its statutory duties to the Company. Link to relevant strategic pillars: Summary of activities in FY24: • Agreed the approach to the 2023 Annual General Meeting and approved the resolutions to be put to shareholders for approval. • Reviewed shareholder returns, considering metrics including cash flow and liquidity prior to approving the £50m share buyback programme and the interim and final dividends for FY24. • Received reports detailing the range of matters considered and approved by the Operating and Real Estate Committees during the year. • Considered a range of ‘ordinary course’ governance matters during the year, including reviewing the draft Annual Report and approving the Modern Slavery Statement. • Undertook an internal Board Evaluation, led by the Chair and Company Secretary, to assess its effectiveness and performance during the year, with feedback from Directors provided and discussed by the Board. • Monitored regulatory and legislative developments and considered any potential impact on operations. These provide an opportunity for the Board to discuss current trading and financial performance with the Executive Directors and offer advice and insight in relation to near-term business priorities and stakeholder concerns. Link to relevant strategic pillars: Summary of activities in FY24: • Received global operational performance updates from the CEO, including progress in priority initiatives and key markets and the activities of the GLT. • Considered detailed financial updates presented to each meeting and led by the CFO, covering recent trading performance, forecasting, capital allocation and budgeting. • Reviewed the plan for an orderly transition to a new CFO, including the establishment of the Finance Panel. • Received updates from the Chairs of the Audit and Risk and Remuneration Committees on the activities of those Committees, including key topics of discussion and points of concern. • Considered the themes and issues raised during the Employee Listening Groups held during the year. • Received regular updates on investor relations and external communications activities, covering feedback from investor roadshows, recent media coverage and planned media activities. DEEP DIVES GOVERNANCE DIRECTOR UPDATES October 2023 Scheduled meetings: Key events: Investor Roadshows (Canada, USA) Executive Director regional visits (USA, Korea) December 2023 Scheduled meetings: Key events: Executive Director regional visit (Spain) FY24 Half Year Results Investor Roadshow March 2024 Scheduled meetings: Key events: Fireside chat: Remuneration with Lynne Weedall August 2023 To the extent possible, August is kept clear to give our teams time to rest and recharge. 97DR. MARTENS PLC ANNUAL REPORT 2024 GOVERNANCE DELEGATING RESPONSIBILITIES The following pages illustrate our governance framework and, in particular, how the Board delegates authority to its Committees and the wider business. KEY BOARD ROLES AND RESPONSIBILITIES Chief Executive Officer CEOKennyWilsonreportstotheChairand totheBoardandisresponsibleforthe executivemanagementoftheDr.Martens Group.AllmembersofGlobalLeadership TeamreporttotheChiefExecutiveOfficer. Kenny’skeyresponsibilitiesincludeleading theleadershipteaminmanagingthe Group’sactivitiesonaday-to-daybasis, developingGroupstrategy,plansand commercialandotherobjectiveswiththe Board,leadingcommunicationswith shareholdersandotherkeystakeholders andensuringthattimelyandaccurate informationisdisclosedtothemarketand settinganexampletotheGroup’sworkforce andcommunicatingtothemexpectationsin respectoftheCompany’sculture. Director tenure AlltheIndependentNon-Executive Directorsremainwithintheirrecommended maximumnine-yeartermsofservice. TwoBoardmembers,BoardChairPaul MasonandNon-ExecutiveDirectorTara Alhadeff,aresettoreachthisthreshold duringFY25.TheBoard’slongestserving DirectorisTaraAlhadeff,whowillhave servedfornineyearsasatthedateof publicationofthisAnnualReport. TheCommitteeandBoardcontinuetovalue thebreadthanddepthofexperienceand insightthatbothPaulandTaracontinueto contributeandtheCommitteesupportsthe Board’srecommendationthatbothbe re-electedforafurtheryearatourAGMinJuly. Director independence TheindependenceoftheNon-Executive Directorswasconsideredaspartofthe FY24BoardEvaluationprocess.TheBoard determinedthatalloftheNon-Executive Directorscontinuedtodemonstrate independenceinbothcharacterand judgementduringFY24.Eachofthe Non-ExecutiveDirectorsthatwere consideredbytheBoardtobeindependent duringtheyearareidentifiedonpages98. Chair of the Board TheChairofourBoard,PaulMason,leads theBoardandensuresitfulfilsits responsibilitiestotheCompanyandits stakeholderseffectively,whilepromoting highstandardsofcorporategovernance acrosstheGroup.Heisresponsiblefor facilitatingconstructiveBoardrelationsand promotingacultureofopennessand debatewithintheBoardroomandensuring theclearandeffectivecommunicationof informationtoshareholdersandseeking regularengagementwiththem. Senior Independent Director OurSID,LynneWeedall,actsasasounding boardfortheChair,providessupportinthe deliveryofhisobjectivesandservesasan intermediaryfortheotherDirectors.Lynne isresponsibleforoverseeingtheChair’s performanceevaluationandsuccession plansandisavailableasanadditional contactpointforshareholdersifrequired. Non-Executive Directors OurfiveNon-ExecutiveDirectors(four independent,onenon-independent) usetheiroutsideexpertisetosupport theExecutiveDirectorsandtheGlobal LeadershipTeam.Theyadviseonthe developmentofGroupstrategy,providing objectiveandconstructivechallenge, andscrutinisetheGroup’sfinancialand operationalperformance.Moreinformation abouttheindependenceandother commitmentsoftheNon-Executive DirectorscanbefoundintheNomination CommitteeReportonpages108to115. OverhalfoftheDr.MartensplcBoard(excluding theChair)comprisedIndependentNon- ExecutiveDirectorsduringFY24.The membershipsofboththeRemunerationand AuditandRiskCommitteescontinueto compriseIndependentNon-ExecutiveDirectors only,whiletheNominationCommittee comprisesalloftheNon-ExecutiveDirectors andtheChairoftheBoard. TheBoardhasalsodeterminedthat,withthe exceptionofTaraAlhadeff,theNon-Executive Directorsremainfreefromrelationshipsor circumstanceswhichmay(orcouldappearto) affecttheirjudgement.Moreinformationabout Tara’srelationshipwiththeCompany’slargest shareholder,IngreLuxS.àr.l(whichiswholly ownedbyfundsadvisedbyPermiraAdvisers LLP),isprovidedintheDirectors’Report sectionofthisAnnualReportonpage144. TheBoardconfirmsthatTaraAlhadeffisnot consideredtobeindependentforthepurposes oftheCodeandisidentifiedassuchonpage98. TarawasappointedtotheBoardbyIngreLux S.àr.lpursuanttoitsrelationshipagreementwith theCompany.ThisagreementpermitsIngreLux S.àr.ltoappointoneNon-ExecutiveDirectorto theBoardforsolongasitretainscontrolof10% ormoreofthevotesabletobecastonall(or substantiallyall)mattersatanygeneralmeeting heldbytheCompany. Time commitments Non-ExecutiveDirectorsareexpectedto avoidholdinganexcessivenumberof externalappointments;however,theBoard recognisesthattheserolescanvary significantlyintermsoftheircomplexityand requiredtimecommitment,sohasagreedto assessthemonacase-by-casebasis. Whendoingso,theBoardconsidersthe numberofboardpositionsthattheDirector inquestionholdsatotherpubliccompanies alongsidethelikely‘size’oftheirnewrole.It alsotakesintoaccountexternallypublished guidanceandproxyvotingguidelinesto ensuretheprinciplesofmajorinvestorsin respectof‘overboarding’areconsidered. EachoftheNon-ExecutiveDirectorshas confirmedthattheycontinuetobeableto meettheCompany’sexpectationsofthem andtoallocatesufficienttimetodischarge theirdutiesasDirectorseffectivelyandthe Boardissatisfiedthatthiscontinuestobe thecase.Directors’externalcommitments aremonitoredbytheBoardonanongoing basis,withtheassistanceoftheCompany Secretariatfunction,toensurethatthey remainabletoallocatesufficienttimeto theirdutiestotheCompany. 98 DR. MARTENS PLC ANNUAL REPORT 2024 GOVERNANCE REPORT CONTINUED OUR GOVERNANCE FRAMEWORK TheDr.MartensplcBoardsetstheCompany’spurposeandstrategyandholds managementtoaccountforitsdeliverywithaviewtosecuringthesuccessofthe businessoverthelongertermforthebenefitofourshareholdersandwiderstakeholders. Itisresponsibleforensuringthatthestrategyalignswithandpromotesourculture, encompassingthecoretenetsofbrandcustodianship,‘doingtherightthing’,and ‘leavingthingsbetterthanwefoundthem’. GLOBAL LEADERSHIP TEAM (GLT) Reporting into the CEO, this constitutes the Group’s core Senior Leadership Team. The GLT has accountability over each of the regional and central global business functions: EMEA, Americas, APAC, Technology, Operations, Brand, Strategy, Product, Marketing, Finance, Legal & Compliance, HR and Sustainability. It is responsible for executing our strategy, identifying growth opportunities and developing strategic initiatives while supporting the Board in meeting its oversight requirements. See page 100 for more information about the GLT. EXECUTIVE DIRECTORS Comprising the CEO and CFO, the Executive Directors are responsible for the day-to-day management of the business with the support of the GLT. All matters not specifically reserved for the Board or the Board Committees and necessary for the ongoing management of the business are delegated to the Executive Directors. In the interests of good governance, the Executive Directors exercise some of their delegated authority through committees, particularly the Operating and Real Estate Committees. TheBoarddischargesitsdutiesbothdirectlyandthroughauthorityithasdelegatedtoits threePrincipalBoardCommittees,theExecutiveDirectorsandtheGlobalLeadershipTeam. TheChairsofeachCommitteeupdatetheBoardontheiractivitiesateachBoardmeeting. FulldetailsoftheBoard’sresponsibilitiesandtermsofreferencefortheprincipalBoard Committeesareavailableatwww.drmartens.com. • Reviews the structure, size and composition of the Board. • Recommends potential Board and senior management appointments and reappointments to the Board. • Oversees succession planning for the Company’s Directors and Global Leadership Team. • Monitors effectiveness of policies and strategy for diversity, equity and inclusion. NOMINATION COMMITTEE SEE PAGES 108 TO 115 • Develops and monitors the ongoing appropriateness of the Group’s policy on Executive remuneration. • Determines the levels of remuneration for the Board and leadership. • Monitors remuneration structures and recommends changes. • Reviews overall workforce remuneration and related policies and the alignment of incentives and rewards with culture and takes these into account when determining the remuneration of the Board and leadership. REMUNERATION COMMITTEE SEE PAGES 116 TO 125 • Assists the Board in discharging its responsibilities in relation to financial and narrative reporting. • Monitors and reviews the Group’s financial controls and systems. • Advises on the appointment of, manages the relationship with and monitors the effectiveness of the external auditor. • Reviews the effectiveness of wider compliance, including the whistleblowing and fraud systems in place within the Group. AUDIT AND RISK COMMITTEE SEE PAGES 134 TO 143 PLC BOARD MARKET DISCLOSURE COMMITTEE These support the Board and business in specific areas. They operate to clearly defined terms of reference and, in the case of the Operating and Real Estate Committees, under authority delegated to them under the Delegation of Authority Policy. While not considered a Principal Board Committee, all Non-Executive Directors are members of the Disclosure Committee and at least one must be present at each of its meetings. KEY SUPPORTING COMMITTEES AND BUSINESS FORUMS OPERATING COMMITTEE REAL ESTATE COMMITTEE OPERATIONAL RISK COMMITTEE SUSTAINABILITY COMMITTEE PRINCIPAL BOARD COMMITTEES GOVERNANCE 99DR. MARTENS PLC ANNUAL REPORT 2024 GOVERNANCE Incoming FY25 ComprisingtheCompany’smostseniorleaders,theGLTistaskedwith overseeingday-to-daybusinessoperationsandplaysasignificantrole inimplementingourstrategy. GEERT PEETERS Chief Operating Officer Joined: June 2018 Responsibilities: Leads the Company’s Global Supply Chain and Operations functions. These include Materials Management, Product Sourcing, Product Quality and Compliance, Demand and Supply Planning, Logistics and Regional Operations. IJE NWOKORIE Chief Brand Officer Joined: February 2024 Responsibilities: Ije sets the overall brand strategy, vision and direction – elevating our brand and further strengthening the partnership with our Product, Marketing, and Strategy teams and embedding sustainability across the business. MEET THE GLOBAL LEADERSHIP TEAM GRAHAM CALDER Chief Technology Officer Joined: October 2023 Responsibilities: Leading the development and implementation of the business’s technological strategies, driving innovation to enhance operational efficiency, and focusing on the direct-to- consumer proposition. BRIDGET JOLLIFFE Chief People Officer Joined: April 2024 Responsibilities: Oversees the people strategy to enable an inclusive organisation, inspiring leadership and a unique employee experience. Leads the People team to deliver commercial success by putting people at the heart of our values and brand. ERIK ZAMBON Strategy Director Joined: April 2017 Responsibilities: Leads the Global Strategy team in defining medium-term strategic priorities, identifying growth opportunities, and managing strategic value creation programmes in collaboration with the leadership team. JENNIFER SOMER President, Americas Joined: November 2021 Responsibilities: Oversees the Dr. Martens business in the Americas region including regional strategy, product, marketing and direct responsibility for the brand’s Retail, Ecommerce and Wholesale businesses. ADAM MEEK Chief Product Officer Joined: December 2021 Responsibilities: Leads product creation at Dr. Martens and has ownership of design, development, category merchandising and Product Insight. DEREK CHAN President, APAC Joined: September 2019 Responsibilities: Leads the strategic direction and operational management of Dr. Martens’ business in the Asia-Pacific region, including regional strategy, product, marketing, and oversight of the brand’s Retail, Ecommerce and Wholesale operations. MIKE STOPFORTH President, EMEA Joined: May 2023 Responsibilities: Directs the strategic and operational management of Dr. Martens in the EMEA region, including product and marketing alongside our Ecommerce and Wholesale channels. INFORMATION ON THE ROLE OF THE GLT P 99 100 DR. MARTENS PLC ANNUAL REPORT 2024 GLOBAL LEADERSHIP TEAM WHAT ARE THEIR PRIORITIES? • Strongvaluecreation,ourbusiness modelanddeliveryoftheDOCS strategy. • Ourpositionandperformance inrespectofESGmatters. • Strengthofleadership. • Cleararticulationandeffective managementofrisks. • Fair,balancedandunderstandable reportingoffinancialresults. • Efficientcapitalallocation. • Clearandtransparent communications. WHAT ARE THEIR PRIORITIES? • Adiverse,equitableandinclusive workplace. • Faircompensation. • Havingopportunitiestogrow anddevelop. • Takingapositiononclimate, environmentalandsocial justiceissues. • Apositiveworkplaceculture thatempowersthem. HOW THE BOARD ENGAGES • BoardmembersareavailableattheAGM toanswerquestionssubmittedbyemail inadvanceoronthedayofthemeeting. • Investorroadshowsheldpost-financial resultswithourlargestinstitutional investorsbytheExecutiveDirectorsand theInvestorRelationsteam. • Additionalmeetingsheldeitherin-person orvirtually.InFY24anumberofsuch meetingswereheldfollowingourinterim resultsandQ3tradingannouncements, attendedbytheChiefExecutiveOfficer andChiefFinancialOfficer.The ChairmanandSeniorIndependent Directorarealsoavailabletodiscuss governancematterswithinstitutional investorsasrequired. HOW THE BOARD ENGAGES • TheChiefExecutiveOfficerproduces aseriesofregularvideoupdates, ‘UNPLUGGED’,whereheshares updatesonhisactivitiesandareas offocuswiththeorganisation. • Contributionstodiversityandinclusion initiativesandevents.DuringBlack HistoryMonth,IjeNwokoriejoinedapanel eventtoprovideinsightintohowhis careerhasbeenshapedbyhisidentity. OnInternationalWomen’sDay,Tara Alhadeff,RobynPerrissandLynne Weedallparticipatedina‘firesidechat’to sharetheircareerjourneyswithourpeople. • MarketvisitstoParis,LA,Tokyoand SeouldeepenedtheExecutiveDirectors’ understandingofthosemarketsandkey findingswerereportedbacktotheBoard. • OurEmployeeRepresentativeNon- ExecutiveDirector,RobynPerriss,hosted ListeningGroupswithemployeesfrom acrosstheglobalorganisation,anumber ofwhichwerealsoattendedbytheSenior IndependentDirector,LynneWeedall. • TheNon-ExecutiveDirectorsvisitedthe MadeInEnglandfactoryandofficeat CobbsLane,enablinginformalengagement withemployeesbasedatthosesites. • TheChairoftheRemuneration CommitteeinvitedtheCompany’s largestshareholderstoengagewith herinrespectoftheCompany’s RemunerationPolicyreview,ahead ofthenewpolicybeingputtothe members’voteattheFY24AGM, forimplementationinFY25in accordancewiththeCode. INFLUENCE ON THE BOARD’S DECISION-MAKING • InvestorprioritiesinformtheBoard’s shapingofdividendpolicyanditsoverall approachtocapitalallocation.InFY24 thisincludedtheimplementationof theCompany’s£50msharebuyback programme,conductedbetweenJuly andDecember2024. INFLUENCE ON THE BOARD’S DECISION-MAKING • Employeefeedbackraisedthrough therangeofavailablechannelswas factoredintotheBoard’sdecisions duringtheyearandcontinuetoinform itsstrategicpriorities.Theseincluded decisionsrelatingtotheprioritisationof keyseniorhires,continuedinvestment inITinfrastructureandfurther investmentinourofficeenvironments. • TheBoard,supportedbytheNomination andRemunerationCommittees, oversawanumberofnewhiresand promotionstotheBoardandGlobal LeadershipTeamduringtheyear.These werefocusedondrivingtheevolutionof seniorleadershiptobettersupportthe deliveryoftheDOCSstrategyandreturn thebusinesstogrowth,aswellas securingsmoothsuccessionprocesses. Moreinformationaboutthekeysenior appointmentsmadeduringFY24can befoundintheNominationCommittee Reportfrompage108. OWNERS OUR PEOPLE CONSIDERING OUR STAKEHOLDERS ThefollowingpagesdescribehowtheBoardengageswithitskeystakeholdersandtheirinfluenceontheBoard’sdecision-making. Thesepagesshouldbereadinconjunctionwithours172Statementandbroaderstakeholderdisclosuresonpages18to21ofthe StrategicReport,whichexplainhowthebusinessengagedwitheachstakeholdergroupduringtheyearandcontinuestodoso. GOVERNANCE 101DR. MARTENS PLC ANNUAL REPORT 2024 OUR STAKEHOLDERS WHAT ARE THEIR PRIORITIES? • Innovative,greatquality,durable products. • Valueformoney. • Agreatend-to-endcustomer experience,beitin-storeoronline. • Availabilityoftheproducts theywant. • Sociallyandenvironmentally responsiblepurchasingdecisions. • Aproductwithwhichtheyhave anemotionalconnection. HOW THE BOARD ENGAGES • Consumerinsightsandprogressinkey, consumer-focusedstrategicprojectsare reportedtotheBoardthroughupdates fromtheStrategyteamandChief ExecutiveOfficer.Theseinformfuture initiativesandensuretheBoardis focusedontheconsumerexperience. • TheExecutiveDirectorsvisitedanumber ofkeyglobalmarketsoverthecourseof theyearandreportedbacktotheBoard ontheirobservationsandactivities. • OurEmployeeRepresentative Non-ExecutiveDirector,RobynPerriss, chairedaretail-focusedemployee listeningsessionatwhichmembers ofourstoreteamsdiscussedtopics includingconsumerpriorities,concerns andperspectives.Thethemesofthis sessionwerefedbacktotheBoard. • Significantfocusontheconsumerat Boardmeetings,fromregularreports fromtheMarketingfunctioncovering ongoingandplannedconsumer engagementactivitiestodetailed ‘deep-dives’intotheproduct,marketing andoverallbrandstrategies. INFLUENCE ON THE BOARD’S DECISION-MAKING • ConsumersarecentraltotheBoard’s discussionsandbuildingcloser, strongerconnectionswiththemwas asignificantinfluenceonthestrategic decisiontoprioritiseDTCoperations. • Insightsacquiredthroughconsumer engagementinformtheBoard’s thinkingaroundmarketingandfuture pricingstrategies. • Thedecisiontoapprovesignificant investmentinanewConsumerData Platformwasdrivenbytheneedto improvethebreadthandqualityof ourconsumerdataandsharpenour understandingofthem. • TheExecutiveDirectorsreviewedand approvedinvestmentsinanumberof consumer-focusedinitiativesduring theyear,includingbroadeningour USAstoreofferthroughnewoutlets, implementinganewcustomerservice platforminEMEA,improvingour websiteinJapanandtriallingrepair andresaleoperationsintheUSA. CONSUMERS WHAT ARE THEIR PRIORITIES? • Drivingawarenessofbrands withinmulti-brandedretailtocapture newconsumers. • Providingatop-qualityend-to-end customerexperienceonlineand instore. • Clearunderstandingoftheir consumerbase,offeringarange ofproductsthatmeettheirneeds. • Buildinglong-termrelationships. HOW THE BOARD ENGAGES • B2Bperformanceisregularlyreported totheBoardthroughupdatesprovided bytheChiefFinancialOfficer. • TheExecutiveDirectorsparticipatein regionalbudgetmeetingswhichinclude reviewsoflocalB2Bstrategiesandtake theneedsandproductchoicesofour B2Bpartnersintoaccount. • RegularvisitsbytheExecutiveDirectors topartner-operatedstores,whichinFY24 includedstoresinParis,Barcelona,NYC, LA,SeoulandHongKong. • TheCEOattendsstrategiccountry meetingsheldwithmembersoftheRetail leadershipandB2Bteams.InFY24 theseincludedsessionsheldintheUK, Spain,France,HongKong,Japanand SouthKorea,LAandNewYork. INFLUENCE ON THE BOARD’S DECISION-MAKING • TheCEOprovidesupdateson prioritytopics,suchaswholesale performance,ateachBoardmeeting, facilitatingdeepdiscussionand scrutinyofthesamebytheBoard. • Fulfilmentofwholesalepartnerorders, sell-throughandinventorylevelsare reviewedregularlybytheExecutive Directors.Onoccasionswhendelayed productionandtransittimeswould resultinordersarrivinglate,the ExecutiveDirectorshaveagreedto additionalcoststoairfreightproducts toensuredeliverywasontime. • TheExecutiveDirectorsreviewand approvedistributor,franchiseand concessionopportunitiesatmonthly RealEstateCommitteemeetings,the activitiesofwhicharereportedtoeach Boardmeeting. PARTNERS 102 DR. MARTENS PLC ANNUAL REPORT 2024 OUR STAKEHOLDERS CONTINUED WHAT ARE THEIR PRIORITIES? • Long-termcollaboration. • Responsiblesupplychainassurance (includingenvironment,modern slaveryandbroaderhumanrights). • Opportunitiesforfurthergrowth. • Sociallyandenvironmentally responsibleoperations. • Promptpaymentandfairterms andconditions. WHAT ARE THEIR PRIORITIES? • Theenvironmentalimpactofour businessandproducts,including ourclimate-relatedrisksand opportunities. • Useofsustainablematerialsand energyfromrenewablesources. • Diversity,equityandinclusion. • Playingapositiveroleinsociety bothatalocalandgloballevel. • Thehumanrightsofallpeople impactedbyDr.Martens’business activities. HOW THE BOARD ENGAGES • TheBoarddiscussesCompany performanceateachBoardmeetingand receivedregularupdatesonthesupply chainduringtheyear,includingthe workwithsupplierstounlockvalueand enablegrowth. • TheBoard,supportedbytheChief OperatingOfficerwholeadstheGlobal SupplyChainfunction,reviewsthe long-termneedsofthesupplychain networkinthecontextoffuturegrowth plans,particularlyintermsofproduction andlogisticalcapacity.TheChief OperatingOfficerattendedtheBoard meetinginMarch2024andparticipated inaBoardmeetingatwhichtheFY25 draftbudgetwasdiscussedatlength. HOW THE BOARD ENGAGES • TheBoardreceivesreportsand presentationsonthekeyinitiatives consideredbytheSustainability Committeeandtheactivitiesofthe Dr.MartensFoundationfrommembersof theSeniorLeadershipTeamandupdates fromtheCEO,whochairstheCommittee. • TheBoardoverseestheCompany’s broadersustainabilityreportingwithinthe AnnualReport,throughtheAuditandRisk CommitteeandtheCFO’smembership oftheTCFDSteeringCommittee. • Regular‘horizonscanning’updateson environmental,socialandgovernance issuesareprovidedtotheBoardto ensuretheyareuptodateonregulatory changesandotherdevelopmentsin theseareas. • TheBoardattendedaproductteach-in toinvestorsatwhichthesustainability strategyandfuturesustainability innovationswerepresented. INFLUENCE ON THE BOARD’S DECISION-MAKING • Thefeedback,insightsandoutcomes fromengagementwithsuppliers haveasignificantimpactonhowthe Boardshapesitsstrategicpriorities. Thisincludesdecisionsrelatingtothe Group’slogisticalcapacity,determining thejurisdictionsfromwhichwesource materialsorbaseourmanufacturing andtheselectionofourkeyTier1and 2suppliers. • TheBoardconsiderstheglobal footprintofmanufacturingand distributioncapacitytooptimiselead timesandthespreadofriskacross thebusinessbyensuringthereisno over-relianceonanysinglemarket. INFLUENCE ON THE BOARD’S DECISION-MAKING • Thefeedback,insightsandoutcomes fromthereportsandupdates describedintheSustainabilityReport onpages46to74enabletheBoard tomonitortheimpactofthebusiness acrossnumerousenvironmental indicatorsandguideitsdecision- makingonbroaderclimateand sustainabilityissues. • TheExecutiveDirectors,under delegatedauthorityfromtheBoard, approvedaninvestmentinathird-party emissionsmanagementsoftware platformtofacilitatemoreconsistent andefficientmeasurementand monitoringoftheGroup’scarbon footprintandNet-Zerotarget. • TheExecutiveDirectorsapproved authorisedrepairandReWair, supportingthelong-termvisionof buildingaprofitablerepairandresale businessmodel.Readmoreabout thesemodelsonpages25and61. SUPPLIERS ENVIRONMENT & COMMUNITIES GOVERNANCE 103DR. MARTENS PLC ANNUAL REPORT 2024 AND HOW STAKEHOLDERS WERE CONSIDERED In line with our capital allocation framework the Company executed a share buyback programme (‘Programme’) in FY24. • The Board considered capital allocation at length during Board meetings spanning FY23 and FY24. Multiple capital allocation options were considered, taking into account expert advice from our corporate brokers and the views of key institutional shareholders that had been shared with the Board. • It was decided the Programme would be an efficient way to return excess capital to shareholders, as it would increase the proportion of the total issued share capital owned by shareholders who retained their shares. • The Board decided the optimum consideration to be paid for shares during the Programme would be £50m, with no more than £10m of transactions made monthly, to allow for optimal cash flow management. Execution of key decision: • Authority to execute the Programme was proposed to shareholders at the FY23 AGM. The resolution passed at a vote of 99.94% in favour, by shareholders representing 79.19% of the Company’s issued share capital. • The Company entered into an agreement with Morgan Stanley & Co. International plc to conduct the Programme. • The share buyback was conducted between 14 July 2023 to 15 December 2023. • Approximately 39.9 million shares were bought back and cancelled, representing a return of approximately £50m to investors. Section 172(1) considerations: The Programme was thought to be an efficient way to manage the Company’s capital allocation. The share buyback increased shareholders’ overall ownership of the Company. This also benefitted many of our employees who are shareholders. The Programme was conducted in a clear and transparent manner through publication on our corporate website, RNS announcements and Companies House filings. The Board considered the Programme to be for the benefit of its members as a whole, having given fair consideration to all members and key stakeholders. KEY BOARD DECISIONS IN FY24 SECTION 172(1) FACTORS: The likely consequences of any decision in the long term. The interests of our people. The need to foster business relationships with our suppliers, consumers and others. Our impact on the community and the environment. Our desirability to maintain a reputation for high standards of business conduct. Acting fairly between members of the Company. Attracting and retaining key talent was top of mind for the Board in FY24. In order to support the business’s strategic aims and execute the DOCS strategy, the Board (supported by the Nomination Committee and Remuneration Committee) made decisions regarding new appointments and roles to further strengthen the leadership team: Succession: Giles Wilson was hired as Chief Financial Officer, commencing his role on 13 May 2024. Read more about Giles on pages 8 and 93. A key factor in the Board’s decision to appoint Giles was his listed company experience, which will augment the Board’s skillset, improve our communication and guidance to the market, provide strong leadership for our global finance functions and help the business to navigate through the opportunities and current challenges on the next phase of our journey as a listed company. Graham Calder was recruited as Chief Technology Officer (CTO) in October 2023, to lead the business as it continues to build a stronger Technology function, providing improved digital experiences for our consumers and managing our IT investments. Read more about Graham on page 139. Bridget Jolliffe was recruited as Chief People Officer in FY24 and commenced her role in early FY25. Bridget will lead the evolution of our People strategy, utilising her over 30 years’ experience across a diverse range of organisations. Read more about Bridget on page 100. Succession, promotion and development of key talent Mike Stopforth was promoted from Sales Director EMEA/General Manager UK to President EMEA, joining the Global Leadership Team (GLT). This was a great example of the Board’s succession planning and desire to foster and promote internal talent, which has also proved to be popular with our people. In endorsing Mike’s promotion to this role, the Board recognised both the importance of continuity for the EMEA region and retaining his significant industry experience. Read more about Mike on page 100. New key roles created: • The Board decided to recruit Ije Nwokorie as the business’s first Chief Brand Officer (CBO). This role was created to bring together our Product, Marketing, and Strategy teams and to set the overall brand strategy, vision and direction for the next phase of Dr. Martens’ growth. The appointment of Ije was also made with a view to succession to the Chief Executive Officer role. Read more about Ije Nwokorie’s transition from Non-Executive Director to CBO and future Chief Executive Officer from page 108. • A Global Go-To-Market Director was recruited to lead on the end-to-end go-to-market process. The role will lead on ensuring alignment and collaboration among our people, partners and suppliers. Section 172(1) considerations: Proactive succession planning of the Chief Executive Officer and new GLT appointments, including internal promotions, demonstrate the Board’s ongoing commitment to developing, attracting and retaining key talent for the long term, in an increasingly competitive market. The senior leaders recruited during the year will play a critical role in fostering close, constructive relationships with each of our core stakeholder groups and ensure that their interests remain appropriately embedded in our day-to- day operations. The Board continues to work closely with the Company’s senior leaders to maintain oversight of the global business and ensure it is discharging its duties to the Company and its stakeholders effectively. SHARE BUYBACK KEY HIRES Stakeholders considered: Stakeholders considered: 104 DR. MARTENS PLC ANNUAL REPORT 2024 OUR STAKEHOLDERS CONTINUED April 2023 Listening group: Global Management Team July 2023 July 2023 Listening group: Northampton factory and Cobbs Lane office Listening group: APAC Sept 2023 Listening group: Retail October 2023 Black History Month ‘In Conversation with..’ event (Ije on the panel) November 2023 Listening group: Global Supply Chain March 2024 March 2024 ‘Fireside chat’: International Women’s Month with Robyn Perriss, Lynne Weedall and Tara Alhadeff ‘Fireside chat’: Remuneration with Lynne Weedall EMPLOYEE ENGAGEMENT: KEY EVENTS TIMELINE How do your employee listening sessions work? Each session focuses on a subset of employees invited at random from a specific business function or region. This sets some common ground as a basis for open conversations and helps ensure we cover as many different areas of the business as reasonably possible. I strongly believe in keeping the sessions as unfiltered and impartial as possible. They are safe spaces in which our employees can discuss the issues that are most important to them with myself and their peers in an open, honest way. Prior to each session, I ensure I’m up to speed on any specific issues, events or other circumstances that are impacting particular teams so I’m better able to guide the discussions or drill more deeply into particular points if necessary. How does your role as the ‘employee voice’ in the Boardroom work in practice? As Employee Representative NED, I help ensure that we as a Board keep ourselves in tune with the ‘mood music’ of the global organisation, take action for our employees in the areas it is needed most and communicate with them about the right things, in the right way. My programme of employee listening sessions has established an important link between the Board and our employees and provides opportunities for us to monitor the health of our culture and see our values in action. I update the Board on the key themes raised at these sessions and regularly discuss relevant employee issues directly with the CEO and CFO during our one-to-one meetings to ensure they are understood and taken into account. How does the Board ensure that the priorities of employees are factored into its decisions? From a formal perspective, I have a standing item at the start of each Board agenda where I provide an update on my activities as Employee Representative to the Board and discuss the themes and feedback from recent employee listening sessions. This helps set the scene for the rest of the Board meeting and provides important context to our discussions. Separately, the results of our annual Engagement and Inclusion Survey are discussed by the Board and help guide our decisions and future focus areas. Employee feedback is also incorporated into our Global Bonus Scheme as part of our strategic targets, to link strong and effective management with the potential remuneration of our senior leaders. What were the key themes of your discussions with employees this year? We covered a lot of ground, as you can imagine. The topics we touched on ranged from region or even team specific to those of significance to the global business. A common theme was the challenges posed by certain outdated or inefficient systems, which impact the ability of our employees to do their jobs effectively. We talked about what these challenges look like ‘on the ground’ and the extensive work underway to resolve these issues by upgrading key capabilities. Our discussions encompassed numerous other topics, from cost-of-living pressures to opportunities for career development and ways to strengthen communication between leadership and the wider business. What are some of your reflections on the sessions this year? My listening sessions really have been a showcase for our three values of ‘be yourself’, ‘act courageously’ and ‘show you care’ in action and continue to reflect a culture where employees feel safe and supported in raising feedback and ideas. Participants always speak openly and honestly, are receptive to and respectful of different perspectives and ready to offer support and advice to colleagues where needed. They do not expect us to have all the answers but do expect clarity in terms of our expectations of them and the strategic direction and objectives of the business and to receive assurance that their voices have been heard. More broadly, as the business navigated its way through the challenges of FY24 and into a new financial year, the primary focus of the Board and Senior Leadership Team has been returning the business to growth. Although this has reduced the bandwidth available to drive our employee listening strategy to the extent that we would have liked, we have continued to move forward in a spirit of ‘progress over perfection’. In the present environment it is more important than ever to maintain clear lines of communication between the Board and employees and that, where possible, we act on the feedback we receive at the listening sessions. For example, matters discussed during the sessions have resulted in follow-up actions taken by the GLT, while the more routine queries or requests for clarification are taken away and responded to by email as soon as possible after each session. We will continue to operate our programme of employee listening sessions into FY25 and beyond, ensuring the Board and business benefit from the rich perspectives and innovative thinking of our people and that we are able to understand and respond to the issues that matter to them. Robyn Perriss INDEPENDENTNON-EXECUTIVE DIRECTOR AMPLIFYING THE EMPLOYEE VOICE Q & A GOVERNANCE 105DR. MARTENS PLC ANNUAL REPORT 2024 ThefollowingpagesexplainhowtheBoard seekstoensureourcultureremainsaligned withourpurpose,toempowerRebellious SelfExpression,andourDOCSstrategyand provideanoverviewofthetoolsitemploys tomonitorthehealthofourcultureonan ongoingbasis. Defining our culture Expressinginafewwordsthemyriad tangibleandnon-tangiblefactorswhich, collectively,makeuptheDr.Martensculture isachallengingproposition,butonewhich theBoardbelievesisessentialtoestablish acommonunderstandingwithinthe organisationofwhoweare,whatwebelieve inandwhatwestandfor,whichresonates withemployeesandfromwhichtheir individualinterpretationscanflourish. Assuch,wecontinuetodefineourculture throughthemaxim‘Rebellious Self Expression’,whichservesasourcollective shorthandtocapturetheessenceof Dr.Martensandwhatitrepresentstoour peopleandconsumers.TheBoardhasalways beenclearthattherootofRebelliousSelf Expressionisinourbrandandproducts,from theoriginal,boundary-pushingbootcreatedin 1960throughtotherangeofconvention- challengingsubcultureswhichadoptedthe brandoversubsequentdecadesandwith whichitcametobeassociated. WehavefurtherdistilledRebelliousSelf Expressionintothethreecorevalueswhich theBoardandemployeesareexpectedto demonstrate,namely‘be yourself’,‘act courageously’ and ‘show you care’. Thesebalancebeliefintrustingourpeople andrespectingtheirindividualfreedoms withrecognitionoftheresponsibilitiesthat comewithoperatingaspartofaglobal communityandthedutyofcaretheyowe tooneanother.TheBoardhassoughtto cultivateanenvironmentforemployees thatreflectsthesevalues,respectsthem asindividuals,empowersthemtohavethe couragetochallengethemselvesandtrusts themtoconsidertheimpactoftheiractions onothers. Takenasawhole,ourcultureandvalues settheparametersforwhatourconsumers, employeesandallotherstakeholderscan expectfromDr.Martensintermsofhowwe operateasabusiness. Protecting our culture TheBoard’scollectiveresponsibilityfor safeguardingtheDr.Martenscultureisan exceptionallyimportantaspectofitsrole.It aimstosetacleartonefromthetopandlead byexamplethroughstrongcustodianship overthebrandanddemonstratingourvalues; promoting,embeddingandprotectingthese ‘yellowthreads’whichuniteallofourpeople acrosstheglobalbusiness. TheBoardbelievesthattheExecutiveand Non-ExecutiveDirectorscontinuetoactwith utmostintegrityandconductthemselvesin amannerthatalignswithandpromotesour culture.Thisviewwassupportedbythe insightsacquiredfromourFY24internalBoard Evaluationprocess,undertakeninFebruary andMarch2024.Thesearenon-negotiable attributesforanynewBoardorsenior leadershipappointmentandwerefactoredinto thebriefsetbytheNominationCommittee forthesearchforallnewseniorappointments duringtheyear.Moreinformationaboutthis canbefoundintheNominationCommittee Report,frompage108. TheBoardmonitorsthealignmentofour purpose,valuesandstrategywithour cultureinanumberofways.Likemany businesses,Dr.Martenscirculatesan annual,onlineEngagementandInclusion Surveyforcompletionbyallemployees, whichisakeyelementoftheCompany’s wideremployeelisteningstrategyand providesanimportantsnapshotofhow ourpeopleexperiencelifeatDr.Martens. TheBoardalsoconsidersarangeofother importantinputs,includingregularupdates atBoardmeetingsfromseniorleadership onparticularfocusareasandinitiatives, HOW WE ASSESS AND MONITOR THE DM CULTURE aswellasthroughournetworkofCulture championswhoactivelypromoteour cultureineachofourkeyregions.The Boardhasalsoidentified‘People,culture andchange’asaprincipalGrouprisk, reflectingitsimportancetotheGroupas awholeanditssignificancetoourability toeffectivelyexecuteourstrategy.More informationonourprincipalriskscanbe foundonpages38to43. Additionally,RobynPerrisscontinues toengagewithemployeesthroughher programmeoflisteningsessionsinher capacityasourEmployeeRepresentative Non-ExecutiveDirector.Updatesonthekey themesfromthesesessionsareprovided totheBoardateachmeeting,providingit withanothereffectivemeansofmonitoring culturethroughanemployeelensand gainingessentialinsightintothematters andissuesthatareimportanttothem.More informationaboutthesessionsRobynheld duringFY24canbefoundonpage105. Overall,theBoardisconfidentthatthe Dr.MartenscultureofRebelliousSelf Expressioniswell-establishedacrossthe globalbusiness,thatitstronglyconnects withandis‘lived’byourpeopleand continuestosupporttheongoingand successfuldeliveryofourstrategy. READ MORE ABOUT REBELLIOUS SELF EXPRESSION IN THE STRATEGIC REPORT ON P1 TO 84 AND 46TO74(SUSTAINABILITYREPORT) MORE INFORMATION ABOUT HOW WE INVEST IN AND REWARD OUR WORKFORCE CAN BE FOUND FROM P116 92% FY24 Engagement and Inclusion Survey response rate 5 Employee Listening Groups held in FY24 106 DR. MARTENS PLC ANNUAL REPORT 2024 OUR CULTURE BE YOURSELF ACT COURAGEOUSLY SHOW YOU CARE HOW THE BOARD MONITORS CULTURE ENGAGEMENT AND INCLUSION SURVEY This assists the Board in monitoring the health of our culture through understanding how our employees experience working at Dr. Martens. This in turn helps shape the Board’s ‘people priorities’ going forwards, as well as specific initiatives at Group, function and individual team level. THE DOCTRINE Brings together our key, global policies to form our employee code of conduct. Presented in a straight-forward, concise and user-friendly format, the DOCtrine comprises distinct sections which also form the basis of our compliance e-learning programme, enabling better understanding of how our behaviours are applied across the business. COMMUNICATIONS A variety of internal communications reinforce our culture and reiterate our values, from ‘Unplugged’ with Kenny videos and Ije Nwokorie’s ‘On Brand’ blog to our ‘Mixtape’ newsletter and the ‘On Air’ digital employee magazine. RSE TOOLKIT The Rebellious Self Expression ‘toolkit’, available on our employee intranet, brings together a range of resources to assist our people in understanding our values and embedding them within their teams. MARKET VISITS As custodians of our global brand, Board members and the GLT regularly visit our key markets and engage with our people ‘on the ground’, strengthening the links between the regional businesses and promoting our culture globally. TOWN HALLS The CEO, CFO and GLT lead regular, interactive ‘Town Halls’. These are important touchpoints in terms of promoting our culture, bringing our people together from across the globe to hear and ask questions about key initiatives, results and events in an engaging format. INFORMAL CHANNELS Important employee or stakeholder feedback received via informal channels that pertains to or potentially impacts our culture or values is reported to the Board or relevant committee as appropriate. LEADERSHIP BEHAVIOURS Our Leadership Framework sets out the key attributes, mindsets and behaviours needed to be a successful leader at Dr. Martens and is embedded into the leadership assessment and development programmes for senior employees. DIVERSITY, EQUITY & INCLUSION The Nomination Committee monitors the diversity, equity and inclusion strategy at Dr. Martens, which determines how we want to create an inclusive workplace for our people and is a key element of our culture. BOARD EVALUATION The annual Board Evaluation provides the Board with an opportunity to reflect on all aspects of its performance, including the extent to which it has been effective in promoting the Dr. Martens culture and that the Directors themselves continue to set a clear ‘tone from the top’ by demonstrating our values. 1 3 5 6 REMUNERATION The Remuneration Committee ensures that our remuneration philosophy and culture align. It promotes brand custodianship through initiatives including encouraging share ownership via our employee share plan, while Employee Listening Groups provide opportunities for our people to learn about and discuss how executive pay is structured with our Remuneration Committee Chair. 7 11 12 EMPLOYEE LISTENING SESSIONS Employee Representative Non-Executive Director Robyn Perriss regularly meets with groups of employees from different regions and business functions to discuss their priorities and updates the Board on the themes of these discussions. 8 9 10 4 2 GOVERNANCE 107DR. MARTENS PLC ANNUAL REPORT 2024 ROLE OF THE COMMITTEE ToleadtheprocessforappointingDirectors totheBoardandkeyseniorleadership positions,ensuringthatappropriate proceduresareinplaceforthenomination, selection,trainingandevaluationofDirectors. COMMITTEE MEMBERSHIP ThemembersoftheCommitteearethe Company’sNon-ExecutiveDirectors(the majorityofwhomareindependent)andthe ChairoftheBoard.AndrewHarrisonjoined theCommitteeonhisappointmenttothe BoardinMay2023,whileIjeNwokorie steppeddownoncommencinghisnew, full-timeroleasChiefBrandOfficerin February2024.TheCommitteewillcontinue tomonitoritscompositiontoensureit remainsappropriateandreinforcesour abilitytoprovideindependentoversight. EmilyReichwaldwassecretarytothe CommitteethroughoutFY24.Shewill besucceededbyKatherineBellauas secretarytotheCommitteewhenshe joinsthebusinessinJune. ThemembersoftheCommitteeandtheir attendanceatmeetingsduringtheyearare disclosedtotheright.Fullbiographiesofeach membercanbefoundonpages92to94. FOCUS AREAS FOR FY25 • Boardandkeyrolesuccession,with afocusonmanaginganeffective onboardingprocessfortheChief FinancialOfficerandasmoothtransition toanewChiefExecutiveOfficer. • Undertakingacomprehensive assessmentoftheBoard’sskillsrelative tootherlistedcompanyboards. COMMITTEE MEMBERS Number of meetings attended/max number could have attended: LynneWeedall 1 (CommitteeChair) 6/6 PaulMason 6/6 TaraAlhadeff 2 5/6 2 RobynPerriss 1 6/6 IanRogers 1,2 5/6 2 IjeNwokorie 1,2 3/4 2 AndrewHarrison 1,3 5/5 1. Independent. 2. TaraAlhadeff,IanRogersandIjeNwokoriewere unabletoattendtheNominationCommitteemeeting on13April2023asitwascalledatshortnotice. 3. Appointed1May2023. COMMITTEE COMPOSITION As at 31March 2024 Male 50% Female 50% • RecommendpotentialBoardand seniormanagementappointments andreappointmentstotheBoard. • OverseetheinductionsofnewBoard membersandtheongoingtraining, asappropriate,fortheBoard. • Reviewandmakerecommendations totheBoardinrelationtoBoardand seniormanagementsuccession planning,includingensuringplansare inplaceforanorderlysuccession. • Overseethedevelopmentofa diversesuccessionpipelineandthe Company’spolicyonBoard,senior managementandworkforcediversity andinclusion. • Reviewandmonitortheeffectiveness oftheCompany’spolicies,objectives andstrategiesrelatingtodiversity andinclusion. Furtherdetailontheroleandremitofthe Committeecanbefoundwithinitsterms ofreference,whichareavailableonour website,www.drmartensplc.com. KEY RESPONSIBILITIES FY24 was a pivotal year at Dr. Martens from a people and succession perspective. LYNNE WEEDALL Chair of the Nomination Committee • Reviewingthealignmentofthediversity oftheBoardwithouroveralldiversity aspirationsandtherevisedListingRule requirements. • ReviewingtheGroup-wideDiversity, EquityandInclusionstrategy. 108 DR. MARTENS PLC ANNUAL REPORT 2024 NOMINATION COMMITTEE REPORT OnbehalfoftheNominationCommittee, IampleasedtopresentourReportforFY24. Thepastyearhasbeenapivotalonefor Dr.Martensfromanexecutivesuccession perspectiveandabusyoneforthe Committee,withanumberofchangesin Boardandkeyseniorleadershippositions requiringoursupportandoversight. OurReportsetsoutdetailsofouractivities duringtheyear,focusinginparticularonthe implementationofoursuccessionplansto facilitatethesechanges,aswellashowwe haveprogressedinthekeyfocusareaswe identifiedinlastyear’sReport,andour prioritiesfortheyearaheadandbeyond. Whilemyintroductoryletterthisyearwill focusprimarilyontheCommittee’s extensiveworkonsuccession,ourReport alsocoverstheinductionprocess undertakenbyAndrewHarrisonfollowing hisappointmentasaNon-Executive DirectorinMay2023,theCommittee’s considerationsinrespectofBoardand widerworkforcediversityandtheFY24 BoardEvaluationprocessundertakenin thefinalquarteroftheyear. BOARD APPOINTMENT AND INDUCTION PROCESSES P110 BOARD AND WORKFORCE DIVERSITY P113 FY24 BOARD EVALUATION P114 CFO succession AsweannouncedinApril2023,Jon MortimoreretiredasChiefFinancialOfficer (CFO)andleftthebusinessattheendof thefinancialyear. TheprocessundertakenbytheCommittee toidentifyandappointanappropriate successortoJonwasdetailedand comprehensive.Itencompassedan assessmentofourinternaltalenttogether withathoroughsearchoftheexternal marketconductedbyexecutivesearchfirm IndependentSearchPartnership(ISP).ISP identifiedanumberofexcellent,highcalibre candidatesforourconsideration.The Committeeestablishedtheparameters ofthesearchinaclearbrieftoclarifyits requirementsandguideISPinidentifying candidateswhoweremostlikelytoreflect ourcultureandvalues. TheprocessculminatedintheCommittee’s decisiontorecommendtotheBoardthat GilesWilsonbeappointedasournewCFO. TheCommitteewasimpressedwithGiles’ experienceandwide-rangingskillset andwewerepleasedtoannouncehis appointmentinNovember2023.Ilook forwardtowelcominghimtotheBoardand workingwithhimoverthecomingyears. MoreinformationaboutGiles’recruitment processcanbefoundonpage110. CEO succession LaterintheyearthefocusoftheCommittee turnedtothesuccessionoftheCEO.InApril 2024weannouncedthat,havingledthe businesssince2018,KennyWilsonwould besteppingdownasCEObeforetheend ofFY25,succeededbyIjeNwokorie.This announcementrepresentedtheculmination ofourCEOsuccessionplanandfollowed ourearlierannouncement,inNovember 2023,thatIjewouldjointhebusinessinthe newlycreatedroleofChiefBrandOfficer (CBO).Atthatpoint,hesteppeddownfrom hisroleasaNon-ExecutiveDirector,which hehadheldsince2021. AsakeypartofanorderlyCEOsuccession plan,theCommitteeoversawanextensive candidatesearchprocess.Wepartnered withspecialistindependentsearch consultancyMWMConsultingtofacilitate thisprocess.MWMprovidedexpert support,comprisinganexternalsearch, benchmarkingandevaluationofourinternal talentpipelinefollowedbyarigorous assessmentagainstexternalbenchmarks. Adetailedrolespecificationsettingoutthe desirableattributes,skillsandexperience ofprospectiveCEOcandidateswas developedwithsupportfromMWMand agreedbytheBoard.OnidentifyingIjeas theclear,standoutinternalcandidate,we furtherreviewedhissuitabilityfortherole alongsideashortlistofhighcalibreexternal candidatesidentifiedforourconsideration byMWM.Heundertookafullassessment byMWM,aswellasbyleadership consultancyghSMART,toexplorehis compatibilitywiththeroleingranulardetail. Throughoutthisprocess,theCommittee carefullyweighedtherationalesforand againstappointinganinternalandexternal candidate.Weappliedsignificantscrutinyto therelativeopportunitiesandrisksandthe balanceofskillsneededforthefuture,as wellasthecomplementaryskillsofother membersoftheteam,includingthenewly appointedCFO. IcanconfirmthatneitherMWMnorISP haveanyotherconnectionwiththe CompanyorwithanyindividualDirector, andarebothsignatoriestothevoluntary codeofconductforexecutivesearchfirms. Icanalsoconfirmthat,whileIjewasa servingmemberoftheCommitteeduring theperiodinwhichwewerefocusedon identifyingCEOsuccessorcandidates,he wasnotpartytoourdiscussionsrelating tohisowncandidacyorthatofothers. Theprocessconcludedwithourunanimous decisiontorecommendIjeasKenny’s successorasCEOandweweredelighted whenheconfirmedhisacceptanceofthe role.WefirmlybelievethatIje’sappointment representsanexcellentoutcomeforthe Board,thebusinessandourwider stakeholders.Overthecomingmonths, theCompanywillhavethebenefitofboth KennyandIjecontinuingintheircurrent rolesofCEOandCBOrespectivelyto ensurestabilityduringacriticalpeaktrading periodforthebusiness. Kennyremainsfullycommittedtoleading thebusinessintothisnewfinancialyear andwillworkwithIjeandtheCommittee toensureasmoothhandoveratthe appropriatetime.Thiswillbeasignificant focusareafortheCommitteeoverthe comingyearandoneonwhichwewillreport inmoredetailinnextyear’sAnnualReport. Looking ahead to FY25 WiththesuccessionofourExecutive Directorsnowsecured,wearere-appraising thebalanceofskillsandexperienceonthe Boardtoensureweclearlyidentifyand understandtheareasinwhichweneedto enhanceourskillsmix.Tothatend,when weappointedMWMtosupportourworkon CEOsuccessionwealsorequestedthatthey undertakeanassessmentoftheBoard’s relativestrengthsandareasrequiringfurther development.InFY25,wewillreviewthis output,evaluatetheappropriateskillsmixfor thefutureandconsideroptionstofurther augmenttheBoardinareaswhereadditional skillsmaybeneeded. InFY25,seniorsuccessionwillremaina centralitemontheCommittee’sagenda, bothintermsofsupportingKennyand IjewiththeCEOtransitionprocessand continuingtoensurethattheBoardand GLTareproperlystructuredandequipped todeliverourstrategyanddrivethe businessforwards. LYNNE WEEDALL CHAIROFTHE NOMINATIONCOMMITTEE 29May2024 GOVERNANCE 109DR. MARTENS PLC ANNUAL REPORT 2024 BOARD APPOINTMENT PROCESS The timeline below summarises each stage of the process which concluded with the Nomination Committee’s recommendation to appoint Giles Wilson to the Board as CFO. The Committee is satisfied that the process described below was appropriately thorough. April 2023 STAGE 1: BUILDING THE BRIEF TheBoardinstructedtheNominationCommittee toproceedwithestablishingabriefsettingout theattributes,skillsandexperiencethatthe Boardrequiredand,fromthere,tooverseethe searchprocess. Thecriteriafortheprospectivenewappointment setoutinthebrieffocusedonidentifyingfinance leaderstohelpleadthebusinesseffectively throughitsnextphaseandincludedstrong,prior publicmarketsandglobalbrandsexperienceas wellasexperienceasaChiefFinancialOfficer inaUKlistedbusiness. April 2023 – July 2023 STAGE 2: CANDIDATE SEARCH Oncethebriefwasfinalised,theCommittee engagedexecutivesearchfirmIndependentSearch Partnershiptoundertakethesearchforcandidates matchingitskeycriteria.Adiverseshortlistof candidateswasidentified,withregularupdatesfed backtotheCommitteeviatheCommitteeChairfor reviewandfurtherconsideration.Interviewswere conductedatthesametimeascontinuingtosearch forcandidates. TheCompanyconfirmsthatIndependent SearchPartnershiphasnootherconnection withtheindividualDirectorsortheCompany. Composition and succession TheCommitteereviewstheBoard’s compositiontoensurethatitsmixofskills andexperienceremainsappropriatein leadingthebusinesstodeliveritsstrategy andthatitcontinuestoalignwiththe Company’scultureandvalues.ABoard skillsmatrixiskeptunderreviewbythe Committeeandisusedtoguideandinform successionplansandthecriteriafor prospectiveappointments.Thiswasmost recentlyevidentintheprocessculminating intheappointmentofAndrewHarrisonas theCompany’snewestNon-Executive DirectorearlyinFY24,whichwasdriven bytheidentificationofaneedtobolsterthe Boardwithgreaterlistedcompanyand internationalconsumergoodsexperience. Asmentionedintheintroductoryletterto thisReport,seniorsuccessionwillremaina keyareaoffocusfortheCommitteeduring FY25,particularlyinrelationtomanaging thetransitionstoanewCFOandCEOand reviewingplansforseniorrolesuccession toensuretheyremainrobust. Director induction process AllnewlyappointedBoardDirectorsand GLTmembersundertakepersonalised inductionprogrammesonjoiningthe business.Thesearefacilitatedbythe CompanySecretaryandaredesignedto bringthemuptospeedontheCompany’s businessoperations,strategy,culture andgovernanceasquicklyaspossible. Whileeachprogrammeistailoredtothe needsoftheindividual,inductionstypically incorporatemarketorsitevisits,one-to-one meetingswiththeGLT,otherkeysenior leadersandexternaladvisers.Newmembers oftheGLTwillalsobeinvitedtopresenttheir initialobservationsandreflectionstotheBoard afterapproximatelythreemonthsin-role. AllnewBoardDirectorsandGLTmembers haveaccesstothesupportandadviceofthe CompanySecretaryandareencouragedto continuetomeetwithmembersofthewider SeniorLeadershipTeampost-induction toestablishstrongworkingrelationships, providesupportandshareexperience. Effectiveness and independence of the Chair of the Board TheBoardconfirmsthat,inaccordancewith Provision9oftheUKCorporateGovernance Code,BoardChairPaulMasonwas independentonhisinitialappointmentto theBoardin2015.Italsonotesthat,when assessedagainsttheindependencecriteria setoutinProvision10oftheCode,Paul wasnotconsideredindependentonthe Company’sadmissiontolistingin2021. PaulhasheldvariousroleswithintheGroup, includingactingasExecutiveChairmanfor aperiod.Nevertheless,theBoardremains confidentinPaul’scontinuedleadership oftheBoardonthebasisthathisextensive knowledgeoftheGroup’sbusinessand significantretailandconsumerbrand experienceareinthebestinterestsofthe Companyandshareholdersasawhole. ItconfirmsthatPaulcontinuestooperatein hisroleeffectively,demonstratingobjective judgementandleadingbyexamplein promotingahealthycultureofopen,honest debateintheBoardroom. BRIEF SEARCH 110 DR. MARTENS PLC ANNUAL REPORT 2024 NOMINATION COMMITTEE REPORT CONTINUED CASE STUDY: INDUCTING A NEW NED May 2023 – October 2023 STAGE 3: REVIEW, ASSESSMENT AND INTERVIEW TheCommitteereconvenedonseveraloccasions todiscussprogressandreviewtheprofilesofthe candidateswhomostclearlyreflectedthecriteriaset outintheinitialbrief. Beforeanyrecommendationtoappointaparticular individualcouldbemadetotheBoard,meetingswere arrangedbetweentheshortlistedcandidatesand membersoftheCommittee,theretiringCFOand theCEO.Theshortlistedcandidatesalsoundertook adetailedassessmentprocesswithspecialist leadershipconsultancyghSMARTtofurthergauge theircompatibilitywiththeCompany. November 2023 STAGE 4: OFFERING THE ROLE TheCommitteewasunanimousintheviewthat GilesWilsonwastherightcandidatefortherole ofCFO,possessingrecentexperienceasbotha ChiefFinancialOfficerandChiefExecutiveOfficer atlarge,listedbusinessesandastrongtrackrecord ofdrivinggrowthatotherorganisations. TherolewasformallyofferedtoGilesandaccepted shortlyafterwards,withtheCompanyannouncing on14NovemberthatGileshadbeenappointedto theroleofCFOtostartinFY25.Gilesformally joinedthebusinesson13May2024. ASSESS OFFER OnformallyjoiningtheBoardinMay2023, Andrewcommencedarobustandvaried inductionprocessaimedatfamiliarisinghim withtheintricaciesofthebusinessandourkey stakeholders.Overseveralmonths,Andrew participatedinaseriesofmeetingsandsite visits,describedtotheright. GILES WILSON CHIEF FINANCIAL OFFICER ANDREW HARRISON INDEPENDENT NON-EXECUTIVE DIRECTOR • Introductorymeetingswithfellow Boardmembers,theGlobal LeadershipTeamandotherkey membersofseniorleadership. • VisitstotheDr.Martensstorein Leeds,accompaniedbyourChair, PaulMason,andtoaselectionof wholesaleretailersintheregion, providinginsightsintoourcore retailoperations. • AvisittoourCobbsLanefactory andoffice,providingopportunities toengagewithemployeesat bothsitesandlearnaboutthe end-to-endproductionprocess. • Participationinanemployee listeningsessionfacilitatedby RobynPerrissandLynneWeedall. • AmarketvisittoItalyalongsideour EMEAPresident,MikeStopforth, gainingvaluableinsightsintolocal marketoperations. Additionally,onjoiningthebusiness Andrewwasprovidedwithasuiteof companydocumentsintheformof reports,pastBoardandCommittee papersandnumerousinternal policiesandproceduraldocuments, toassisthiminbroadeninghis understandingofourinternal frameworks,valuesandculture. GOVERNANCE 111DR. MARTENS PLC ANNUAL REPORT 2024 Board gender and ethnic diversity TheCommitteeismindfulofandsupports therecommendationsoftheFTSEWomen LeadersReview,theParkerReviewandthe diversitytargetssetoutintheListingRules. ThenumericaldatatablestheCompanyis requiredtodisclosepursuanttoListingRule 9.8.6R(9)canbefoundonpage91. Asat31March2024,theBoardmettwoof thethreetargetssetoutinLR9.8.6R(9). LynneWeedallcontinuestoserveasSenior IndependentDirector,thereforetheBoard continuestomeetthetargettohaveatleast onewomaninaseniorBoardposition.With thedeparturesofIjeNwokorieandJon MortimorefromtheBoardinFebruaryand March2024respectivelyandGilesWilson notjoiningthebusinessuntilMay,theBoard alsobrieflyexceededthe40%targetfor femalerepresentationasattheCompany’s referencedateof31March.Atthispoint, womencomprised43%oftheBoard. However,withGileshavingjoinedthe businesson13May2024,womennow comprise38%oftheBoard,slightlybelow theListingRulestarget.Thisisunchanged fromthepositionasat31March2023and atechnicalimprovementonthatwhich appliedforthemajorityoftheyearunder review,throughoutmostofwhichwomen comprised33%ofourBoard. AlthoughoutsidethescopeoftheListing Rulestargets,theBoardnotesthateach ofitsprincipalcommitteesischairedbya femaleBoardmember,withLynneWeedall chairingtheNominationandRemuneration CommitteesandRobynPerrisschairing theAuditandRiskCommittee.Robyn alsocontinuestoplayanimportantrole astheCompany’sDesignatedEmployee RepresentativeNon-ExecutiveDirector. Intermsofethnicdiversity,followingIje’s departurefromtheBoardjustpriortothe yearendtheBoardnolongermeetsthe targetforatleastonemembertobefroma minorityethnicbackground.However,the Boardwillonceagainmeetthistargetwhen IjerejoinsitasCEObeforetheendofFY25. Intheinterimperiod,Ije’senergy,insights andexpertise,fromwhichtheBoardhas beenfortunatetodirectlybenefitduringhis tenureasaNon-ExecutiveDirectorand willagainonhisappointmentasCEO,will remaindevotedfullytotheGLTandthe globalbusinessthroughhisnewroleas ChiefBrandOfficer. THE BOARD’S POLICY ON DIVERSITY TheBoardiscommittedtoensuring thatdiversity,equityandinclusivity remainamongitscoretenetsand underpinallfutureappointments totheBoard,GLTandthe membershipsoftheAuditandRisk, RemunerationandNomination Committees,beitdiversityofgender, background,heritage,sexualityor anyofthemanyaspectsofidentity thatmakeindividualsunique.Further, itcontinuestosupportthebusiness infosteringaculturethatenables talenttoprogressatDr.Martens irrespectiveofanyofthesefactors. AllrecommendationsforfutureBoard andseniorleadershipappointmentsare madeonmeritfollowingrigoroussearch andrecruitmentprocessesthatfocus onindividualspossessingspecific skillsetsandexperiencethathavebeen identifiedasessentialforthebusiness toachieveitsstrategicambitions.This ensurestheappropriatebalanceof skillsandexperienceacrossoursenior leadership,theBoardandtheAuditand Risk,RemunerationandNomination Committeesismaintainedorimproved. TheBoardismindfulofthe recommendationsofboththeParker andFTSEWomenLeadersReviews andtherevisedtargetsand‘complyor explain’reportingrequirementssetout intheListingRulesanditremainsthe Board’sintentiontomeetorexceed thesetargetsonanongoingbasis. TheBoardispleasedtohavemet theprescribedtargetsrelatingtoits ethnicdiversityandtheappointment ofawomantoatleastoneofthe ‘bigfour’BoardrolesofChair,Chief ExecutiveOfficer,ChiefFinancial OfficerorSeniorIndependent Director.WhiletheBoarddoesnot currentlymeetthe40%targetfor femalemembership,itcontinues tobetheintentionandaspiration oftheBoardtodoso.Thiswillbe animportantfocusareaforthe NominationCommitteeduringFY25. TheBoardisclearthatadherenceto theprinciplesoutlinedabovefacilitates broader,richerdebateandultimately resultsinbetterdecision-makingin theinterestsofthebusiness,the Company’sshareholdersandwider stakeholdergroups. 112 DR. MARTENS PLC ANNUAL REPORT 2024 NOMINATION COMMITTEE REPORT CONTINUED NOMINATION COMMITTEE ACTIVITIES DURING FY24 April 2023 • Reviewed the Board’s skills matrix. • Reviewed the Company’s process for succession in key roles, focusing in particular on the Chief Financial Officer. • Reviewed the specification for a successor to the Chief Financial Officer and agreed a set of non-negotiable and desirable attributes for prospective candidates. May 2023 • Reviewed progress of the CFO search and discussed potential successor candidates in the context of the Board’s skills matrix. July 2023 • Reviewed and discussed the list of potential CFO candidates and agreed next steps. September-November 2023 • Discussed the CFO shortlist and identified Giles Wilson as the Board’s preferred candidate. • Agreed to extend Jon Mortimore’s contract through to the end of FY24 to secure continuity through to the end of the financial year. • Discussed GLT succession and agreed the appointments of the Interim Chief Technology Officer and Chief Brand Officer. • Reviewed an update on the global DE&I strategy. March 2024 • Discussed the Board’s skills matrix and considered the capabilities required for the Company’s next phase of development. • Reviewed Board and key role succession processes and plans, including for the CEO. • Reviewed the Committee’s effectiveness as part of the internal FY24 Board Evaluation process. • Reviewed the Committee’s terms of reference. April 2024 (post-FY24) • Recommended Ije Nwokorie as CEO successor. TheCommitteewillensurethatthe recommendedtargetsrelatingtogender andethnicdiversityontheBoardremain centralfactorsinitsconsiderationsin respectoftheBoard’scompositionand long-termsuccessionplanninggoing forwards.Itfurtherconfirmsthatitwillalso continuetoensurethatBoardandsenior recruitmentprocesseswillbeconducted inamannerwhichencouragesandinvites adiversemixofcandidatesintermsof gender,socialandethnicbackgroundsas wellascognitiveandpersonalstrengths. TheBoard’spolicyondiversityissetout onpage112,opposite. Diversity in the workforce Thediversityofthewiderleadershipteamis monitoredwithreferencetodataextracted fromtheCompany’ssecureHRinformation system,Dayforce.Allemployeesareable tousethissystemtoprovideinformation relatingtotheiridentityandtheirindividual diversitydata,includinggenderidentityand ethnicbackground,shouldtheywishtodo so.ACompany-wide‘Self-ID’campaignled bytheDiversity,EquityandInclusionteam wasundertakenearlyinFY24toraise awarenessofthistoolandencourage employeestoprovidetheirinformation, assistingthebusinessinbuildingamore completepictureofthediversityofits workforce.Allinformationprovidedinthis mannerisconfidentialandmanagedinline withtheCompany’sdataprotectionand privacyobligations. Thereportingtablessettingoutthespecific, numericaldiversitydataintheformat prescribedbyListingRule9.8.6R(10)can befoundinthe‘Ataglance’sectionon pages90and91. Thedataindicatesthat,asatthereference dateof31March2024,70%ofourGlobal LeadershipTeam(GLT)excludingthe ExecutiveDirectorsweremenand30% women.Thedatarelatingtothenextlayer ofseniormanagementindicateaneven splitof50%men(57%inFY23)and50% women(41%inFY23),withnoemployees identifyingasnon-binaryorpreferringto self-describe(2%inFY23).Acrossthe globalworkforce(andbasedonaresponse rateof99%),63%(2,202employees) identifiedasfemale,33%(1,140 employees)maleand3%(115employees) non-binary,with1%(21employees) preferringtoself-describe. Morebroadly,thebusinesscontinuedto makeencouragingprogressduringtheyear towardsitsdiversityaspirationsforthe globalworkforce.Moreinformationonthis canbefoundintheSustainabilityReport onpages68and69. Committee effectiveness TheeffectivenessoftheCommitteewas assessedaspartoftheinternalBoard Evaluationprocessundertakeninthe latterpartofthefinancialyear. Fromtheratingsandfeedbackprovided throughtheBoardquestionnairesandthe subsequentmeetings,itwasconcluded thattheCommitteecontinuedtooperate effectively.Continuedfocusonsuccession inlightoftherecentseniorleadership changesandontheBoard’sskillsmixwere highlightedasopportunitiesandwillform twokeyprioritiesfortheCommitteeinthe yearahead. The Committee will continue to ensure that diversity and the recommended targets in respect of gender and ethnic diversity are at the forefront of its considerations and as part of its long-term Board succession planning. GOVERNANCE 113DR. MARTENS PLC ANNUAL REPORT 2024 BOARD EVALUATION Approach to the FY24 Board Evaluation TheBoardundertookaninternalBoard EvaluationinFY24,anoverviewofwhich issetoutonthefollowingpages.Since thiswasthesecondinternalevaluation conductedinsuccession,theBoardintends thatitsnextevaluationinFY25willbe externallyfacilitated,inlinewithBoard policyandthebestpracticerequirements oftheUKCorporateGovernanceCode toundertakeexternallyfacilitatedreviews everythreeyears. TheBoardisclearthat,regardlessof whetheritisexternallyorinternally facilitated,theannualBoardEvaluation isanimportantopportunityfortheBoard toassesswhetheritwaseffectivein The following pages provide insight into the Board’s evaluation of its effectiveness and performance in FY24. dischargingitsdutiesoverthecourseof theyear,implementinganyspecificactions recommendedthroughfeedbackprovided duringtheevaluationandidentifyingareas offocusfortheyearahead. TheBoardalsorecognisesthatmonitoring, refiningandimprovingitseffectiveness isacontinuousprocess.Itdoesthisby takingtimetoreflectonthequalityofits conversations,thestrengthofworking relationshipsbetweenindividualBoard membersandbetweentheBoardandthe Company’sSeniorLeadershipTeamand consideringwhetheritsbalanceofskills andexperienceremainsappropriatewhen measuredagainstitsskillsmatrix. PROGRESS UPDATE: FY23 EVALUATION TheBoardmadeprogressona numberofareashighlightedas opportunitiesforimprovementin lastyear’sBoardEvaluation. Successionplanninghadbeenidentified asanareaonwhichtheBoardshould increaseitsfocusandthiswasthecase inFY24,withtheBoardandNomination Committeeoverseeingthesuccession oftheCFOandseveralkeyGLTroles. Additionally,theBoardfulfilledits commitmenttobroadeningitsmixof skillsandexperiencefollowingthe smoothinductionofAndrewHarrison. FY24 BOARD EVALUATION TIMELINE November 2023 STAGE 1: DESIGN The Board discussed the intended approach to the FY24 Board Evaluation and agreed with the Company Secretary’s proposal that it be facilitated internally and conducted in a manner that was broadly in line with FY23 and comprised the following elements: • Questionnaire mixing quantitative ratings and incorporating qualitative feedback. • One-to-one meetings between each Non-Executive Director and the Chairman to discuss individual performance and feedback points. • Non-Executive only session chaired by the SID. • Full Board discussion to explore the feedback from the meetings and questionnaires and agree future priorities. February 2024 STAGE 2: QUESTIONNAIRE Each Board member was asked to provide a rating on range of questions relating to their effectiveness during FY24. These were organised under the categories ‘Board processes’, ‘Board culture’, ‘strategy’ and ‘oversight’. They were also asked to provide comments on their assessment of the Board’s strengths in those areas and any opportunities for future improvements. The topics explored through the questionnaires covered: • Effectiveness of Board succession planning. • Appropriateness of overall skills and knowledge mix. • Quality of debate, discussion and decision-making. • Focus on key strategic issues. • Degree of interaction and engagement between the Board and wider business • Effectiveness in identifying and managing key business risks. Purpose TheBoard’sannualevaluation providesanimportantopportunity fortheDirectorstoreflectontheir performanceoverthepreviousyear, bothindividuallyandcollectively,and assesstheireffectivenessinfulfilling theirstatutorydutiesintheinterestsof theCompany’smembersasawhole. Itisalsoanessentialtoolforidentifying opportunitiestofurtherimprovethe Board’seffectivenesswhile acknowledgingitsexistingstrengths. Thetimelinetotherightsummarises eachstageintheprocessundertaken inFY24,frominitialconsiderations relatingtothedesignthroughtothe Board’sreflectionsandfeedback. 114 DR. MARTENS PLC ANNUAL REPORT 2024 NOMINATION COMMITTEE REPORT CONTINUED March 2024 STAGE 3: MEETINGS • One-to-one meetings between each Non-Executive Director and the Chair provided an opportunity to expand on the feedback provided in their questionnaire and reflect on their own contributions to the Board over the course of the year. • The Senior Independent Director then chaired a session with the Non-Executive Directors to evaluate the effectiveness of the Chair and Executive Directors and to discuss any further outputs or feedback from the questionnaires that had not been previously considered. • The Board reconvened for a final discussion at its meeting in March to review its progress over the year, consider any recommendations for future areas of focus and the most pressing opportunities for improvement. STAGE 4: FEEDBACK Basedontheinformation providedthroughthe questionnairesandthefeedback fromthesubsequentmeetings, theCompanySecretary compiledareportsettingout mainfindingsandinsights.This wasagreedwiththeChairand circulatedtotheBoardtoinform andguidethefinaldiscussion, withallBoardmemberspresent, attheBoardmeetinginMarch. ThisdiscussionprovidedBoard memberswithanopportunityto sharetheirfinalreflectionson thechallengesandsuccesses ofFY24andagreetheareason whichitshouldfocustodrive continuedimprovementsinits effectivenessinFY25.These includedaholisticreviewofits skillsmatrixandcreatingspace formoreregularexposuretothe GLTandleadershiptalentfrom thewiderbusiness. OBSERVATIONS ThefeedbackreceivedfromtheBoard waspositiveoverall.Thefeedback providedbyindividualBoardmembers highlightedanumberofstrengthsaswell asopportunitiestodrivefurther improvements,includingthefollowing: • Strength:Boarddiscussionscontinue tobesubstantiveandfocusedonthe rightstrategicpriorities. • Opportunity:tosharpenfocuson pushingthebrandagenda,improved financialforecastingandinterrogating identifiedproblemareas. • Strength:anexperiencedand open-mindedBoardwithavaried skillsetandrangeofperspectives. • Opportunity: toincreasetimespent withseniorleadershipandkeytalent tobridgethegapbetweenBoard discussionsandbusinessoperations. • Strength:diligentlychairedBoard meetingssupportedbywellthought throughagendasandcomprehensive, highqualitypapers. • Opportunity:continuedfocus onimprovingsuccessionprocesses inkeyroles. Setagainstabackdropofarecent IPOandanewlyestablishedBoard, theFY22evaluationcombinedafull externalassessmentbyexternal consultancyghSMARTandan internalprocess,ledbytheChairof theBoardandCompanySecretary, toexplorewhethertheBoardwas focusedontherightpriorities, comprisedtherightindividualsand hadestablishedacultureoftrust, debateandchallenge. FY22 HYBRID EVALUATION THE BOARD’S EVALUATION CYCLE: FY22 TO FY24 FY25 – EXTERNAL EVALUATION TheBoard’sinternalevaluationin FY23soughttobuildonthethemes oftheextensiveprocessundertaken inthepreviousyear.Itfocused ontheBoard’sassessmentofthe progressithadmadeinbroadening itsskillset,includingthroughits searchforanewNon-Executive Director(culminatinginAndrew Harrison’sappointmentinMay 2023),anddevelopingitsoverall maturityasaPLCboardoverthe courseoftheyear. FY23 INTERNAL EVALUATION Thisyear’sprocesswasframedin thecontextofachallengingyearfor thebusiness.Itcoveredageneral reviewoftheBoard’seffectiveness indischargingitsdutiestothe Company,focusinginparticularon clarifyingitsestablishedstrengthsand identifyinggapsandopportunitiesfor developmentintoFY25.Anoverview ofthisissetoutinthesectionbelow. FY24 INTERNAL EVALUATION GOVERNANCE 115DR. MARTENS PLC ANNUAL REPORT 2024 COMMITTEE MEMBERSHIP TheCommitteecurrentlycomprisesLynne Weedall(Chair),RobynPerrissandAndrew Harrison,allofwhomareIndependent Non-ExecutiveDirectorsandprovidea balanceofskillsandexperience.Andrew HarrisonjoinedtheCommitteeon1May 2023andsodidnotattendtheApril2023 meeting.TheApril2023meetingwas attendedbyIanRogerswhowasa CommitteememberthroughoutFY23, steppingdownfromtheCommitteeon 1May2023. ThefulltermsofreferenceoftheCommittee areavailableontheCompany’scorporate websiteatwww.drmartensplc.com.Full biographiesofeachmembercanbefound onpages92to94. TheattendanceofCommitteemembersat meetingsduringtheyearisdisclosedbelow. FOCUS AREAS FOR FY25 TheCommitteeisplanningtoundertake anumberofkeyactivities,andhave discussionsinthecourseofthecoming year,onarangeofmattersincluding: • ImplementingtheRemunerationPolicy appropriatelyandcautiously,ina challengingexternalenvironment,for thefirstyearofthenewpolicyperiod. • Approvingremunerationarrangements forappointmentstotheExecutiveGroup, includingCEOsuccession. • Monitoringshareholdingofthe ExecutiveGroupagainstshare ownershiprequirements. • Reviewingremunerationarrangements forthewiderworkforce. • Reviewingperformanceand effectivenessoftheCommittee,aspart oftheannualBoardEvaluationprocess. COMMITTEE MEMBERS Number of meetings 1 attended/max number could have attended: LynneWeedall (Committee Chair) 6/6 RobynPerriss 6/6 IanRogers 2 1/1 AndrewHarrison 3 5/5 1. Includesanextraordinarymeetingheldon 23June2023. 2. IansteppeddownfromtheCommitteeon 1May2023. 3. AndrewjoinedtheCommitteeon1May2023. COMMITTEE COMPOSITION As at 31March 2024 Male 33.33% Female 66.67% • EstablishandagreewiththeBoard theRemunerationPolicyforthe ExecutiveDirectors,theCompany Secretary,theGlobalLeadership Team(GLT)(together,the‘Executive Group’),theChairoftheBoardand anyothersenioremployeesasthe Boardmaydetermine. • Determinetheindividualremuneration packagesoftheExecutiveGroup,the ChairoftheBoardandrelevantsenior employeeswithinthetermsofthe agreedRemunerationPolicy. • Monitortheremunerationstructures andoveralllevelsofremuneration oftheExecutiveGroupandrelevant seniormanagementandmake recommendationstotheBoard whereappropriate. • Overseetheremunerationofthewider Dr.Martensworkforceandensure thatourpolicyfortheseniorteam isconsistentlystructuredandalso ensuresalignmentbetweenincentives andCompanycultureandvalues. • OverseetheoperationoftheGroup’s shareplans. In the context of a challenging year, the Committee has sought to act with restraint within the framework of the Policy. LYNNE WEEDALL Chair of the Remuneration Committee KEY RESPONSIBILITIES 116 DR. MARTENS PLC ANNUAL REPORT 2024 REMUNERATION COMMITTEE REPORT DEAR SHAREHOLDER, OnbehalfoftheRemunerationCommittee, IampleasedtointroducetheDirectors’ RemunerationReportfortheyearending 31March2024. ThisReportisdividedintothreesections: • ThisAnnualStatement,whichsummarises theworkoftheCommitteeandour approachtoDirectors’remuneration. • TheRemunerationPolicysection, whichdetailstherevisedPolicy.Thefull RemunerationPolicycanbefoundonpages 120to123ofthisAnnualReport(andis alsoavailablehere:www.drmartensplc. com/investors/results-centre/). • TheAnnualReportonRemuneration, whichsetsouttheremuneration outcomesforthefinancialyearended 31March2024andtheproposed implementationoftheRemuneration Policyfortheupcomingyear. TheRemunerationPolicywillbeputto shareholdersforabindingvoteattheAnnual GeneralMeeting(AGM)tobeheldon11July 2024.ThisAnnualStatementandtheAnnual ReportonRemunerationwillbeputtoan advisory(non-binding)voteattheAGM. Looking back COMPANY PERFORMANCE FY24hasbeenadisappointingyearandagain wefacedanumberofchallenges.These includedadifficultconsumerenvironment intheUSA,withwidespreadcautionfrom wholesalecustomers,andincreased depreciationandamortisationchargesasa resultofourongoinginvestmentprogrammes. Weendedtheyearwithprofitbeforetax(PBT) of£93.0mandrevenueof£877.1m. REMUNERATION PAYABLE IN RESPECT OF FY24 Base salaries and fees AsdisclosedintheFY23AnnualReport, theExecutiveDirectorsreceiveda2% increaseinsalarywitheffectfrom1April 2023.Inaddition,Non-ExecutiveDirectors’ feelevelswerealsoincreasedby2%.In bothcases,theseincreaseswerehalfthe averageincreaseoftheUKworkforce. FY24 annual Global Bonus Scheme outcome EmployeesthroughouttheCompany, whetherinourstores,distributioncentres, factoryoroffices,participateinabonus scheme.Tofosteralignmentacrossthe business,inFY24,theExecutiveDirectors’ annualbonus(GlobalBonusScheme,or GBS)continuedtobroadlymirrorthatofthe widerworkforcewithallparticipantsworking towardsthesameglobalPBTtargetsthat appliedacrosstheGroup.Alongsidethe GBS,ouremployeebonusplanshavethe abilitytorewardexceptionalperformance, ensuringthatouremployeesacrossthe worldareallalignedtowardsoursingle globalgrowthambitions. FortheExecutiveDirectors,theGBS comprisedafinancialmetricofPBTwith aweightingof75%andthreeequally weightedstrategicobjectiveswithacombined weightingof25%.Thesethreestrategic objectiveswerefocusedonincreasing employeeengagement,acceleratingour sustainability(ESG)journey,andgrowingour brandhealthandequity.Thesereflectour passionandfocusonculture,sustainability andbeingbrandcustodians. Wesetstretchingtargetsforourselves anddidnotmeetthem.OurPBTresultof £93.0mwasbelowtheminimumthreshold of£149.0mandthereforetheExecutive Directorsdidnotreceiveabonus. Withregardtothestrategicobjectives,our sustainability(ESG)targetsweremetin full,reflectingoureffortduringtheyearto progressoursustainabilityagenda.Wewere notabletomeetthethresholdlevelof performanceforourotherstrategicobjectives withtheresultthatoneoutofthreetargets wasmetinaggregate.Asaresult,the formulaicoutcomeoftheGBSis8.33%of maximum.Consideringthedisappointing financialperformance,ourExecutiveGroup havetakenthedecisiontowaivetheir entitlementtoabonusinrespectoftheFY24 strategicobjectives. Long Term Incentive Plan (LTIP) award Theawardgrantedin2021atadmissionis duetovestinJune2024.Theawardhastwo performancemeasures:EPS(compound annualgrowthoverthreeyears),andrelative TotalShareholderReturn(TSR)(vs.FTSE 350excludinginvestmenttrusts).The Company’sCAGREPSandTSR performancedidnotmeettheminimum requiredthresholdperformanceandas suchtherewillbeanoverallnilvesting forthe2021LTIPaward. TheCommitteeiscomfortablethatactions takenonpayduringtheyearacrossthe Companywereappropriateandbalanced theinterestsofallstakeholdersandthatthe RemunerationPolicyoperatedasintended. Looking ahead InFY25thereisparticularfocuson settingtargetsthatareappropriate,that supportourbusinessstrategyanddeliver operationalimprovements. DIRECTORS’ REMUNERATION POLICY FOR FY25 Inlinewithcorporategovernanceandlegal requirements,ourRemunerationPolicyis reviewedeverythreeyearsandapprovedby shareholders.DuringFY24,theCommittee undertookareviewofthePolicytoensurethat itremainsalignedtoourbusinessstrategy andsupportsourfuturesuccess.Aftercareful consideration,includingconsultingwith shareholdersandemployees,theCommittee agreedthatthePolicyremainedfitforpurpose andthatnochangestothePolicyitselfwere required.Adjustmentsmadetosomeofthe incentivemetricsforFY25,withinthePolicy, aredescribedbelowandtheincentiveplans willcontinuetobebasedonperformance measuresalignedtothebusinessstrategy withstretchingtargetsandthemajorityofthe overallincentivedeliveredinshareswhich mustbeheldlongterm. TheCommitteeandmanagementwill continuetooperatethePolicydiligentlyand withrestraintwherenecessaryaswehave doneinrelationtothecurrentPolicy. IMPLEMENTATION OF THE POLICY IN FY25 Salary and fees ThesalaryfortheChiefExecutiveOfficerhas notbeenincreasedforFY25andremainsat thesamelevelof£735,420.GilesWilson, theCFO,joinedtheCompanyon13May 2024andwillreceiveasalaryof£485,000. ThefeesfortheChairoftheBoardandthe Non-ExecutiveDirectorsareunchanged fromFY24. Global Bonus Scheme (GBS) Themaximumannualbonuspayableunder theGBSis200%ofsalaryfortheCEOand 150%ofsalaryfortheCFO.ForFY25,the performanceconditionswillcontinuetobe basedonPBTfor55%ofthebonus opportunity,withtheintroductionofameasure relatedtothenumberofpairsofbootssold intheDirect-to-consumer(DTC)channel for20%ofthebonusopportunity.Wewill continuetosetthreestrategicobjectives,with atotalof25%ofthebonusopportunity, reflectingourcorefocusareas.Sustainability (ESG)remains,withtheintroductionof newmetrics,branddesireandleadership behaviours.Stretchingtargetswillbesetand furtherdetailswillbeprovidedintheDirectors’ RemunerationReportforFY25. ANNUAL STATEMENT FROM THE CHAIR OF THE REMUNERATION COMMITTEE GOVERNANCE 117DR. MARTENS PLC ANNUAL REPORT 2024 LTIP ForFY25,theperformanceconditionswill continuetobebasedonEPSandTSR, withtheintroductionofacashconversion measuretoensurefocusonmanaging inventoryandcashcollectionfromdebtors. ToensurethattheLTIPawardisalignedto therollingbusinessplan,whichiscurrently beingfinalisedfortheperiodcoveringthis award,andsothatthereisfulltransparency forallstakeholdersatthetimethetargets areset,theCommitteehasdelayedthe finalisationoftheappropriateawardlevels andthepreciserangeoffinancialtargets. Oncethesearedetermined,theCommittee willpublishthisinformationonRNS announcementwhentheExecutive Directors’awardsaremade,andwithinnext year’sDirectors’RemunerationReport. CHIEF EXECUTIVE OFFICER On16April2024,weannouncedthatthe BoardandKennyWilsonhadagreedthe timewasrightforhimtostepdownasCEO. InFY25,KennywillbesucceededbyIje Nwokorie,thecurrentChiefBrandOfficer, whowillbecometheCEObeforetheendof thefinancialyear.Appropriateremuneration arrangementsfortheincomingandoutgoing ExecutiveDirectorswillbecarefully consideredbytheCommitteeinlinewiththe Policy,andwillbedisclosedintheDirectors’ RemunerationReportforFY25. WORKFORCE ENGAGEMENT Inordertosupportthereviewofthe RemunerationPolicy,thisyearIspokein depthtoemployeesonourapproachto executiveremuneration,inparticularto explainhowitalignswithCompanystrategy andthecontributionofalltheworkforce.In theformofa‘FiresideChat’,wefoundthis informalapproachencouragedanopen forumfordiscussionandquestions,giving usveryusefulinsightandfeedback. Outsidecoreremunerationlistening,we seeallformsofemployeeengagementand listeningasanimportantandfundamental partofhowwedobusiness.Iwillcontinue topartnerwithRobynPerriss(ourNon- ExecutiveDirectorDesignatedEmployee Representative)overthecomingyearto progressourapproachtoouremployee listeninginitiatives. PAY AND BENEFITS FOR THE WIDER DR. MARTENS TEAM Dr.Martens’cultureandremuneration philosophyisalignedacrossthebusiness. Weofferacomprehensivepackageof basepayandbenefitsforallemployees. Ouraveragepayincreasewas3.2%of salaryacrossourwiderheadofficeworkforce fortheyearending31March2024. Asbrandcustodians,weremaincommitted toprotectingandenhancingthebrand forthefutureandwewillcontinuetodothis throughencouragingshareownership acrossalllevelsofthebusiness,tofoster asenseofCompanyownershipand long-terminvestmentamongemployees. Webelievethatallemployeesshouldhave theabilitytohaveastakeinthebusiness andtoshareinoursuccess.YourShare, BuyAsYouEarn(BAYE),isourglobal sharescheme,enablingallemployees 1 tobuysharesfromtheirincomewhich theCompanymatchesona1:1basis.We havebeenverypleasedwiththetake-up, withc.35%ofemployeesbecoming shareholdersunderthisschemealone. DIVERSITY, EQUITY AND INCLUSION Dr.Martenshasstrongfemale representationacrossallareasofthe business,whichweseereflectedinallpay quartiles.TheCompany’slatestGender PayGapStatement(forthesnapshot periodto5April2023)canbefoundonthe Dr.Martenscorporatewebsiteanddetails ofourgenderbalanceontheBoardand theGLTcanbefoundonpage91ofthe NominationCommitteeReport. Wehavesetourselvesspecificgenderand ethnicityrepresentationcommitmentsto achieveourDiversity,EquityandInclusion (DE&I)aspirations. FurtherinformationaboutourDiversity, EquityandInclusioninitiativesacrossthe workforceissetoutintheSustainability Reportonpages68and69. SHAREHOLDER ENGAGEMENT TheCommitteeconsultswithitslarger shareholdersonexecutivepaymatters, whenconsideredappropriate.InFY24,we havecarriedoutaformalconsultationwith shareholdersandproxyadvisersinrelation totherevisedRemunerationPolicy.Iwould liketothankthosewhoengagedwithusfor theirinput.Iamalwayshappytomake myselfavailabletoshareholderstodiscuss anyconcernsorfeedbacktheymayhave. OnbehalfoftheCommittee,thankyoufor readingthisReportandwelookforward toreceivingyoursupportattheAGMon 11July2024. LYNNE WEEDALL CHAIROFTHEREMUNERATION COMMITTEE 29May2024 CHIEF FINANCIAL OFFICER SUCCESSION On14November2023,we announcedthatGilesWilsonwould succeedJonMortimoreasChief FinancialOfficerandhetookuphis positionon13May2024. Giles’salaryis£485,000withacash allowanceof5%inlieuofpension.The salaryisonlyslightlyhigherthanthe levelforJon,andislowerthanathis previousemployer,andwasnecessary tosecurehim.Gileswillparticipatein theGBSuptoamaximumof150%of salaryandtheLTIPuptoamaximum of300%ofsalary. Inaddition,aspartofhisjoining arrangements,weagreedto compensateGilesforawards forfeitedonleavinghisprevious employer.Furtherdetailsofthe remunerationarrangementsfor Giles,includingthebuyoutawards, areshownonpage128. Followingtheannouncementon14 April2023thatJonMortimorewould besteppingdownfromhisroleas CFO,theCommitteenotedthathe wasretiringand,onthatbasis, confirmedhis‘goodleaver’status. Jonretiredon31March2024, leavingtheCompanyandstepping downfromtheBoardatthatdate. WearegratefultoJonforagreeing tostaywiththebusinessbeyond hiscontractualnoticeperiodtohelp ensureasmoothyearend.His leavingarrangementsaredetailedon page129andareinlinewithpolicy. 1. Availableinallcountrieswheretheregulationsallow. 118 DR. MARTENS PLC ANNUAL REPORT 2024 REMUNERATION COMMITTEE REPORT CONTINUED £0k £1,000k £2,000k £3,000k £4,000k £5,000k FY24 Actual Minimum Target Maximum 100% 100% 31% 18% £787 £787 £2,573 £4,358 29% 34% 40% 48% £0k £1,000k £2,000k £3,000k FY24 Actual Minimum Target Maximum 100% 100% 33% 20% £512 £512 £1,542 £2,571 23% 28% 44% 52% AT A GLANCE Performance snapshot GLOBAL BONUS SCHEME PERFORMANCE Measure Weighting of the bonus Result achieved Achievement (out of a maximum 100%) Payout as a % of total bonus 1 Financial performance PBT 75.0% £93.0m 0% 0% Strategicobjectives Employeeengagement 8.33% 3.94 0% 0% Brandequity 8.33% 1.86outof6areasimproved 0% 0% ESG 8.33% 6targetscompleted 100% 8.33% Formulaicoutcome 8.33% Finaloutcome 0% 1 1. ExecutiveDirectorselectedtowaivetheirbonusentitlementforFY24. KENNY WILSON, CEO JON MORTIMORE, CFO Time horizons for remuneration elements Year 1 Year 2 Year 3 Year 4 Year 5 Fixed pay Global Bonus Scheme (recoveryprovisionsapply) LTIP (recoveryprovisionsapply) Salary, pension and benefits 66.7% cash Performance period 33.3% shares Holding period Implementation for FY25 Base salary 0%increasefortheExecutiveDirectors • CEO–£735,420 • CFO–£485,000 Benefits Nochange. Pension 5%ofsalary(inlinewiththewiderworkforce). Global Bonus Scheme (GBS) • Maximumopportunity: – CEO–200%ofsalary – CFO–150%ofsalary • SubjecttoPBT(55%),numberofpairsofDTCbootssold(20%)andstrategicobjectives(25%) • 33.3%deferredintosharesfortwoyears LTIP • Awardlevelandrangestobeconfirmedandpublishedwhentheawardsaremade • SubjecttoEPS(50%),cashconversion(25%)andrelativeTSR(25%) • Two-yearholdingperiodapplies Shareholding guidelines 300%ofsalary(tobeheldfortwoyearspostemployment). Chair and Non-Executive Directors 0%increaseinfees. Fixed pay Global Bonus Scheme LTIP GOVERNANCE 119DR. MARTENS PLC ANNUAL REPORT 2024 REMUNERATION REPORT ThisReporthasbeenpreparedinaccordance withtheprovisionsoftheCompaniesAct 2006(theAct),theLargeandMedium-sized CompaniesandGroups(Accountsand Reports)Regulations2008andthe subsequentamendments,andtheUKListing AuthorityListingRules.Inaddition,theReport hasbeenpreparedona‘complyorexplain’ basiswithregardtotheUKCorporate GovernanceCode2018(theCode).The RemunerationPolicydescribedinthissection isintendedtoapplyforthreeyearsandwill beapplicablefromthedateofapprovalby shareholdersattheCompany’s2024AGM. Decision-making process for determination, review and implementation of the Policy TheCommitteeisresponsibleforthe development,implementationandreview oftheDirectors’RemunerationPolicy.In addressingthisresponsibility,theCommittee workswithmanagementandexternal adviserstodevelopproposalsand recommendations.TheCommitteeconsiders thesourceofinformationpresentedtoit, takescaretounderstandthedetailand ensuresthatindependentjudgementis exercisedwhenmakingdecisions.The RemunerationCommitteeworksalongside otherBoardCommitteesasneeded. TheCommitteereviewsthePolicyandits operationtoensureitcontinuestosupportand rewardtheExecutiveDirectorsforachieving thebusinessstrategy,bothoperationallyand overthelongerterm.Itreviewsthestructure andquantumofrewardsandtakesinto accounttheCode,marketpractice, shareholderviewsandtheviewsofinstitutional investorsandinvestorrepresentativebodies. TheCommitteealsoconsidersthe remunerationarrangements,policiesand practicesfortheworkforceasawholewhich itreviewsaspartofitsannualagenda. ThePolicy’soperationisconsideredannually fortheyearahead,includingmetricsfor incentives,weightingsandtargets.The CommitteereviewsthePolicy’soperationfor theprioryearandconsiderswhether,inlight ofthestrategy,changesarerequiredforthe comingyear.Targetsfortheannualbonus andLTIPawardsarealsoreviewedto determinewhethertheyremainappropriate orneedtoberecalibrated.Itisthe Committee’spolicytoengagewithandseek feedbackfromshareholdersasappropriate, dependingonthechangesproposed. Consideration of employment conditions elsewhere in the Group TheCompanyprovidesamarketcompetitive packagetoallemployeeswithadditional rewardthroughincentivepaymentslinkedto theachievementofstretchingperformance targets.Thisrewardphilosophyappliestoall levelsofthebusiness.Inviewofthegreater potentialremuneration,theExecutive Directorshaveagreaterproportionoftheir payat‘risk’andsubjecttopaymentin shares,deferralandholdingperiods.The RemunerationCommitteetakesinto accountgeneralworkforceremuneration andrelatedpolicies,andthealignmentof incentivesandrewardswithculturewhen settingandoperatingthePolicyforExecutive Directors’remunerationandtheCommittee receivesregularupdatesonanychanges towiderCompanyRemunerationPolicy. DuringtheyearI,alongsideRobynPerriss(our Non-ExecutiveDirectorDesignatedEmployee Representative),engagedextensivelywithour widerworkforceandsuccessfullyprogressed ourapproachtoouremployeelistening initiatives.Theobjectiveofthesesessionswas formetoshareourapproachtoexecutive remuneration,explainhowitalignswith Companystrategyandinvitecomments, questionsandinput.Employeesinvitedto theseforumsareselectedatrandom.Feedback fromtheemployeesessionwasconsidered whendesigningtheRemunerationPolicy. TheCommitteealsoreceivesupdates ontheremunerationstructurethroughout theGroup,withsalaryandbonusreviews eachyear.Insettingremunerationforthe ExecutiveDirectors,theCommitteetakes noteoftheoverallapproachtorewardsfor employeesintheGroup.Therefore,the Committeeissatisfiedthatthedecisions madeinrelationtoExecutiveDirectors’pay aremadewithanappropriateunderstanding oftheoutcomesforthewiderworkforce. Consideration of shareholder views Inconsideringtheoperationofthe RemunerationPolicy,theCommitteetakes intoaccountthepublishedremuneration guidelinesandspecificviewsofshareholders andproxyvotingagencies.TheCommittee willconsultwiththeCompany’slarger shareholders,whereconsideredappropriate. AspartofthePolicyrenewalprocessthe CommitteeChairconsultedwithmajor shareholders,aswellasproxyvotingbodies andshareholderadvisorygroups. Furthermore,theCommitteewillconsider specificconcernsormattersraisedatany timebyshareholdersonremuneration. Other considerations InlinewiththeCode,thePolicyhasbeen testedagainstthesixfactorslistedin Provision40: • Clarity–thePolicyisasclearaspossible andisdescribedinstraightforward, concisetermstoshareholdersandthe workforceinthisReport. • Simplicity–remunerationstructuresare assimpleaspossibleandmarkettypical, whilstatthesametimeincorporatingthe necessarystructuralfeaturestoensurea strongalignmenttoperformance,strategy andminimisingtheriskofrewardingfailure. • Risk–theDirectors’Remuneration Policyhasbeenshapedtodiscourage inappropriaterisktakingthrougha weightingofincentivepaytowards long-termincentives,thebalancebetween financialandnon-financialmeasuresinthe annualbonusknownastheGlobalBonus Scheme(GBS),aportionoftheGBSbeing paidinshares,recoveryprovisions,and in-employment&post-employment shareholdingrequirements.Toavoid conflictsofinterest,Committeemembers arerequiredtodiscloseanyconflictsor potentialconflictsaheadofCommittee meetings.NoExecutiveDirectororother memberofmanagementispresentwhen theirownremunerationisunderdiscussion. • Predictability–elementsofthePolicyare subjecttocapsanddilutionlimits.Examples ofhowremunerationvariesdependingon performanceissetoutinthescenario chartsonpage124.TheCommitteemay exerciseitsdiscretiontoadjustDirectors’ remunerationifaformula-drivenincentive payoutisinappropriateinthecircumstances. • Proportionality–thereisasensible balancebetweenfixedpayandvariable pay,andincentivepayisweightedto sustainablelong-termperformance. Incentiveplansaresubjecttoperformance conditionsthatconsiderbothfinancial andnon-financialperformancelinked tostrategy.Outcomeswillnotreward poor performance. • Alignment to culture–the RemunerationCommitteewillconsider Companycultureandwiderworkforce policieswhenshapinganddeveloping executiveremunerationpoliciesto ensurethatthereiscoherenceacross thebusiness.Therewillbeastrong emphasisonthefairnessofremuneration outcomesacrosstheworkforce. Conclusion of the review and key changes to the Policy TheCommitteeconcludedthatthe Directors’RemunerationPolicyhad operatedasintendedoverthepastthree years,andfollowingthereview,concluded thatthePolicywasfitforpurposeandthatno changestothePolicyitselfwererequired. DIRECTORS’ REMUNERATION POLICY 120 DR. MARTENS PLC ANNUAL REPORT 2024 REMUNERATION REPORT CONTINUED Policy detail by remuneration element (no change from previous Policy) PAY ELEMENT AND PURPOSE OPERATION OPPORTUNITY PERFORMANCE METRICS, WEIGHTING AND ASSESSMENT Base salary Provide a base level of remuneration to help us acquire, retain and engage top talent Salaries are generally reviewed annually and any changes are normally effective from the beginning of the financial year. The review will take into account several factors including (but not limited to): • The Director’s role experience and skills; • The remuneration policies, practices and philosophy of the Company; • Pay conditions in the Group; • Business performance; • Market data for similar roles and comparable companies; and • The economic environment. Having been set based on relevant factors, base salaries will normally increase no more than the average increases made to the wider workforce. Higher increases may be permitted where appropriate, for example where there is a change to role or there is additional responsibility or complexity. None Benefits To provide a market- competitive level of benefits based on the market in which the Executive is employed The Executive Directors receive benefits which include, but are not limited to, family private health cover, life assurance cover and car allowance, although they can include any such benefits that the Committee deems appropriate. The Remuneration Committee retains the discretion to be able to adopt other benefits including (but not limited to) relocation expenses, tax equalisation and support in meeting specific costs incurred by Directors. Any reasonable business-related expenses can be reimbursed, including the tax thereon, if determined to be a taxable benefit. The maximum will be set at the cost of providing the benefits described. None Pensions To provide market- competitive retirement benefits Contribution to the Group Pension Plan or a cash allowance in lieu of pension. Pension contribution in line with the rate applicable for the majority of the UK workforce (currently 5% of salary). None Global Bonus Scheme (GBS) To reward annual performance against financial and non- financial KPIs and to encourage long-term sustainable growth and alignment with shareholders’ interests through payment in shares The Remuneration Committee will normally determine the GBS payable after the year end, based on performance against targets. No more than two-thirds of the GBS will be paid out in cash after the end of the financial year. The remaining amount will be used to purchase shares which the Executive is required to hold for two years. Malus and clawback provisions will apply up to the date of the GBS determination and for three years thereafter. The maximum GBS opportunity for the Executive Directors is as follows: CEO – 200% of base salary. CFO – 150% of base salary. GBS payouts are determined based on the satisfaction of a range of key financial and strategic objectives set by the Remuneration Committee. The majority of the performance measures will be based on financial performance. Performance measures will be set each year in line with Company strategy. No more than 10% of the relevant portion of the GBS is payable for delivering a threshold level of performance, and no more than 50% is payable for delivering a target level of performance (where the nature of the performance metric allows such an approach). The Remuneration Committee has the discretion to adjust the formulaic GBS outcome if it believes that such outcome is not a fair and accurate reflection of business performance. GOVERNANCE 121DR. MARTENS PLC ANNUAL REPORT 2024 PAY ELEMENT AND PURPOSE OPERATION OPPORTUNITY PERFORMANCE METRICS, WEIGHTING AND ASSESSMENT Long Term Incentive Plan (LTIP) To encourage long-term sustainable growth and to provide alignment with shareholders’ interests Awards can be granted in the form of conditional shares or nil-cost options. Awards will vest at the end of a performance period of at least three years, subject to the satisfaction of performance conditions and provided that the Executive remains employed by the Group. The net of tax number of shares that vest will be subject to an additional two-year holding period, during which the shares cannot be sold. An additional payment, normally in shares, may be made equal to the value of dividends which would have accrued on vested shares. Malus and clawback provisions will apply for three years post vesting. The normal maximum award level will be 300% of salary per annum, based on the face value of shares at grant. If exceptional circumstances arise, including (but not limited to) the recruitment of an individual, awards may be granted up to a maximum of 400% of salary. Awards will be subject to a combination of long-term measures which are aligned to the business strategy and shareholder experience and may include financial metrics (such as EPS), shareholder value metrics (such as TSR), and ESG or strategic objectives. At least half of the award will be subject to financial and/or shareholder return measures. The Committee will have discretion to set different measures and weightings for awards in future years to best support the strategy of the business at that time. Threshold performance under each metric will result in no more than 25% of that portion of the award vesting. The Remuneration Committee has the discretion to adjust the formulaic outcome of the LTIP if the Committee believes that it is not a fair and accurate reflection of business performance. All-employee share plans To provide alignment with Group employees and to promote share ownership The Executive Directors may participate in any all-employee share plan operated by the Company. Participation will be capped by the HMRC limits applying to the respective plan. None Shareholding requirement To provide alignment with shareholders’ interests During employment Executives are required to build up and retain a shareholding equivalent to 300% of their base salary. Until the shareholding requirement is met, Executive Directors will be required to retain 50% of the net of tax shares they receive under any incentive plan. Post-employment Any Executive Director leaving the Company will be expected to retain the lower of the shares held at cessation of employment and shares to the value of 300% of salary for a period of two years. 300% of salary. None Non-Executive Directors To provide an appropriate fee level to attract and retain Non-Executive Directors and to appropriately recognise the responsibilities and time commitment Non-Executive Directors are paid a base fee and additional fees for acting as Senior Independent Director and as Chair of Board Committees (or to reflect other additional responsibilities and/or additional/unforeseen time commitments). The Chair of the Board receives an all-inclusive fee. Neither the Chair of the Board nor the Non-Executive Directors participate in any incentive plans. Fees are reviewed annually. The fee for the Chair of the Board is set by the Remuneration Committee and the Non-Executive Directors’ fees are set by the Board (excluding the Non-Executive Directors). In general, fee level increases will be no higher than the average rise in salaries for the rest of the workforce. The Company will reimburse any reasonable expenses incurred (and related tax if applicable). None 122 DR. MARTENS PLC ANNUAL REPORT 2024 REMUNERATION REPORT CONTINUED Notes to the Remuneration Policy table CHOICE OF PERFORMANCE MEASURES EachyeartheRemunerationCommitteewillselectthemost appropriateperformancemeasuresandtargetsfortheGBS andLTIP.ThemeasuresselectedwillbealignedwithCompany strategyandkeyperformanceindicatorsandmayalsobebased onTotalShareholderReturn(TSR). GBSperformancemetricsincludeamixoffinancialtargetsand non-financialobjectives,reflectingthekeyannualprioritiesofthe Company.Thefinancialmetricsdeterminethemajorityofthe bonusalongsideacombinationofkeystrategicandwidernon- financialtargets.ForFY25,theGBSmeasuresarePBT,the numberofpairsofbootssoldDirect-to-consumer(DTC),andthree strategicobjectivescoveringleadershipbehaviours,branddesire andsustainability.TheLTIPperformancemetricsrelatetocreating long-termreturnsandtypicallyincludemeasuresoflong-term profitablegrowth(e.g.EPS)andshareholderreturns(e.g.TSR). TheperformancemeasuresforFY25willbeEPSandTSRwiththe additionofacashconversiontarget.Thedetailedperformance measuresandtargetsforFY25willbedisclosedintheRNSwhen theawardsaremade. TheCommitteeretainsdiscretionwithinthePolicytosetdifferent performancecriteriaand/oralterweightingsfortheGBSand long-termincentivesinlinewiththeCompany’sstrategicpriorities. Performancetargetsaresetbasedonarangeofexpected outcomes,takingintoaccountbothinternalandexternal expectationsofperformance.Targetsaresettobechallengingyet realistic.Allassessmentsofperformanceareultimatelysubject totheCommittee’sjudgement.Anydiscretionexercised,andthe rationale,willbedisclosedintheAnnualReportonRemuneration. DIFFERENCES IN POLICY FROM BROADER EMPLOYEE POPULATION Dr.Martens’cultureandremunerationphilosophyisalignedacross thebusiness,althoughpayisgenerallymorevariableandlinked moretothelongtermforthoseatmoreseniorlevels.Overall,the PolicyfortheExecutiveDirectorsismoreheavilyweightedtowards performance-relatedpaythanforotheremployees.Inparticular, performance-relatedlong-termincentivesarenotprovidedoutside theseniormanagementpopulationastheyarereservedforthose consideredtohavethegreatestpotentialtoinfluenceoverall performance.Althoughlong-termincentivesareawardedonlyto themoreseniorlevelsintheGroup,webelievethatallemployees shouldhavetheabilitytohaveastakeinthebusinessandtoshare inoursuccess.YourShare,BuyAsYouEarn(BAYE),isourglobal sharescheme,enablingallemployeestobuyshares 1 fromtheir incomewhichtheCompanymatchesona1:1basis.Executive Directorsareeligibletoparticipateinthisplanonthesamebasis asotheremployees. MALUS AND CLAWBACK TheCommitteemay,atanytimeintheperiodendingonthe thirdanniversaryoftheReleaseDateofanLTIPawardorGBS payment,determinethatmalusand/orclawbackprovisionsapply inthefollowingcircumstances:(i)materialfinancialmisstatement; (ii)significantreputationaldamage;(iii)negligenceorgross misconductbyaparticipant;(iv)fraudeffectedbyorwiththe knowledgeofaparticipant;(v)materialcorporatefailure;or (vi)whereawardsweregrantedorvestedbasedonerroneous ormisleadingdata.Therearerobustmechanismsinplaceto ensurethattheseprovisionsareenforceable. DISCRETION TheRemunerationCommitteecanexercisediscretioninanumber ofareaswhenoperatingtheCompany’sincentiveschemesmore widelywithinthebusiness,inlinewiththerelevantrulesofthe schemes.Theseinclude(butarenotlimitedto): • thechoiceofparticipants; • whetherornottoapplyperformanceconditionstoawards,and whatanyapplicableconditionsshouldbe(fortheavoidanceof doubt,GBSandLTIPawardstoExecutiveDirectorswillalways besubjecttoperformanceconditions); • thesizeofawardsinanyyear(subjecttothelimitssetoutin theDirectors’RemunerationPolicytable); • theextentofpaymentsorvestinginlightoftheachievement oftherelevantperformanceconditions; • thedeterminationofgoodorbadleaversandthetreatmentof outstandingawards(subjecttotheprovisionsoftheScheme RulesandtheRemunerationPolicyprovisions);and • thetreatmentofoutstandingawardsintheeventofachange ofcontrol,inaccordancewiththeplanrules. Inaddition,ifeventsoccurwhichcausetheRemunerationCommittee toconcludethatanyperformanceconditionisnolongerappropriate, thatconditionmaybesubstituted,variedorwaivedasisconsidered reasonableinthecircumstancesinordertoproduceafairermeasure ofperformancethatisnotmateriallylessdifficulttosatisfy. 1. Availableinallcountrieswheretheregulationsallow. GOVERNANCE 123DR. MARTENS PLC ANNUAL REPORT 2024 £0k £2,000k £4,000k £6,000k £0k £1,000k £2,000k £3,000k £4,000k Maximum with share price increase Maximum Target Minimum 14% 18% 30% 26% 33% 28% 40% 20% 49% 42% 100% £5,567 £4,464 £2,626 £787 Kenny Wilson, CEO 15% 19% 32% 21% 27% 23% 43% 21% 54% 45% 100% £3,433 £2,705 £1,614 £523 Giles Wilson, CFO Minimum:ComprisesfixedpayonlybasedonFY25basesalaries,FY25benefitsanda5%Companypensioncontribution. On Target:Fixedpayplus50%ofthemaximumFY25GBS(100%ofsalaryfortheCEOand75%ofsalaryfortheCFO)and50%LTIP vesting(150%ofsalaryfortheCEOandCFO). Maximum:Fixedpayplus100%ofthemaximumFY25GBS(200%ofsalaryfortheCEOand150%ofsalaryfortheCFO)and100% LTIPvesting(300%ofsalaryfortheCEOandCFO). Maximum with share price increase:ThesameasMaximumbutassumes50%sharepricegrowthontheLTIPaward. Recruitment policy WhensettingremunerationpackagesfornewExecutiveDirectors,paywillbesetinlinewiththeRemunerationPolicyoutlinedabove.Several factorswillbeconsidered:thegeographyinwhichtherolecompetesorisrecruitedfrom,thecandidate’sexperienceandskills,aswellasthe remunerationlevelsofotherExecutivesandcolleaguesinthebusiness.TheRemunerationCommitteeismindfulthattheCompanyshould avoidpayingmorethanisnecessarytorecruitthedesiredcandidate. REMUNERATION ELEMENT POLICY External appointment to the Board Salary Base salary would be set at an appropriate level considering the factors mentioned above. Relocation If an Executive Director needs to relocate in order to take up the role, the Company would pay to cover the costs of relocation including (but not limited to) actual relocation costs, temporary accommodation and travel expenses. Buyout awards For external appointments, the Remuneration Committee may (if it is considered appropriate) provide a buyout award equivalent to the value of any outstanding incentive awards that will be forfeited on cessation of a Director’s previous employment. To the extent possible, the buyout award will be made on a broadly like-for-like basis. The award will take into account the performance conditions attached to the vesting of the forfeited incentives, the timing of vesting, the likelihood of vesting and the nature of the awards (cash or equity). Any such buyout award may be granted under the LTIP or the provision available under UKLA Listing Rule 9.4.2. to enable awards to be made outside the LTIP in exceptional circumstances. GBS Joiners may receive a pro-rated GBS based on their employment as a proportion of the financial year and targets may be different to those set for other Executives. LTIP Grants will be set in line with the Policy in the year of joining. Other elements Benefits and pension will be set in line with Policy. Internal appointment to the Board When existing employees are promoted to the Board, the above policy will apply, from the point where they are appointed to the Board and not retrospectively. In addition, any existing awards will be honoured and form part of ongoing remuneration arrangements. Non-Executive Directors Fees will be in line with the Remuneration Policy and the fees provided for the other Non-Executive Directors. Inexceptionalcircumstances,themaximumlevelofvariablepaywhichmaybeawardedtoanewExecutiveDirectorinthefirstyearof appointmentunderthePolicywillbe600%ofsalaryforaCEOand550%foraCFO. Fixed pay Global Bonus Scheme LTIP LTIP value with 50% share price growth REMUNERATION SCENARIOS FOR EXECUTIVE DIRECTORS ThechartsbelowgiveanindicationoftheleveloftotalannualremunerationthatwouldbereceivedbyeachExecutiveDirectorinaccordance withthePolicyinrespectofminimumpay(fixedpay),ontargetandmaximumperformancebasedonassumptionssetoutbelow.Thecharts arebasedonthepolicymaximumforbothGBSandLTIPforillustrativepurposes. 124 DR. MARTENS PLC ANNUAL REPORT 2024 REMUNERATION REPORT CONTINUED Service agreements and letters of appointment TheExecutiveDirectorshaveaservicecontractrequiringninemonths’noticeofterminationfromeitherpartyasshownbelow: Executive Director Date of appointment Date of current contract Notice from the Company Notice from the individual Unexpired period of service contract KennyWilson 5January2021 21January2021 9months 9months Rolling GilesWilson 13May2024 14November2023 9months 9months Rolling CopiesofExecutiveDirectors’servicecontractsareavailableforinspectionattheCompany’sregisteredoffice. Intheeventofterminationforcause(e.g.grossmisconduct)neithernoticenorpaymentinlieuofnoticewillbegiven,andtheExecutive Directorwillceasetoperformtheirservicesimmediately. TreatmentofotherelementsofthePolicy(includingGBSandLTIP)willvarydependingonwhetheranExecutiveDirectorisdefinedasa ‘good’or‘bad’leaver.TheRemunerationCommitteehasthediscretiontodeterminewhetheranExecutiveDirectorisagoodleaver,and reasonsforgoodleavertreatmentinclude,butarenotlimitedto,death,ill-health,injuryordisabilityandretirement. Thetreatmentofthevariouselementsofpayonterminationaresummarisedbelow. Salary, benefits and pension If notice is served by either party, the Executive Director can continue to receive base salary, benefits and pension for the duration of their notice period. The Executive Director may be asked to perform their normal duties during their notice period, or they may be put on garden leave. The Company may, at its sole discretion, terminate the contract immediately, at any time after notice is served, by making a payment in lieu of notice equivalent to salary, benefits and pension, with any such payments being paid in monthly instalments over the remaining notice period. The Executive Director will normally have a duty to seek alternative employment and any outstanding payments will be subject to offset against earnings from any new role. GBS Good leavers will still be eligible to receive a GBS at the usual time with performance measured at usual time. The GBS will normally be pro-rated for service during the financial year. Bad leavers will not be eligible to receive a GBS. Deferred shares are beneficially owned by the Executive Director from grant and so they are not at risk of forfeiture, other than in relation to clawback and malus. Shares subject to a holding period will be released at the normal time. LTIP Awards are forfeited on cessation of employment except for ‘good leavers’ (where awards vest subject to performance conditions and normally scaled back pro rata to the proportion of the performance or vesting period served). The Remuneration Committee will have the ability to allow the awards to vest in full subject to performance but with no time pro-rating, in exceptional circumstances. Shares subject to a holding period will be released at the normal time. Chair and Non-Executive Directors TheChairoftheBoardandNon-ExecutiveDirectorshavelettersofappointmentwiththeCompany.Inlinewithmarketpractice,thereis typicallyanexpectationforNon-Executivestoservetwothree-yeartermsbuttheymaybeinvitedbytheBoardtoserveanadditionalperiod, subjecttoannualre-appointmentattheAGM.Appointmentsareterminablebyeitherpartyonthreemonths’writtennotice.Theappointment lettersprovidethatnocompensationispayableontermination,otherthanaccruedfeesandexpenses. ThetablebelowdetailsthelettersofappointmentforeachNon-ExecutiveDirector. Non-Executive Directors 1 Date of appointment Date of current letter of appointment Notice from the Company Notice from the individual PaulMason 5January2021 9January2021 6months 6months LynneWeedall 11January2021 8January2021 3months 3months IanRogers 11January2021 25November2020 3months 3months RobynPerriss 11January2021 8January2021 3months 3months TaraAlhadeff 5January2021 9January2021 N/A 3months AndrewHarrison 1May2023 27March2023 3months 3months CopiesofNon-ExecutiveDirectors’lettersofappointmentareavailableforinspectionattheCompany’sregisteredoffice. 1. IjeNwokoriesteppeddownfromtheBoardon1February2024totakeupthepositionofChiefBrandOfficerwithimmediateeffect. External appointments WiththeapprovaloftheBoard,ExecutiveDirectorsmayacceptoneexternalappointmentasaNon-ExecutiveDirectorandretainthefees. GOVERNANCE 125DR. MARTENS PLC ANNUAL REPORT 2024 Remuneration Committee ROLE AND RESPONSIBILITIES TheroleoftheRemunerationCommitteeistodetermineandestablishaRemunerationPolicyfortheExecutiveGroupandtooversee theremunerationpackagesforthoseindividuals.Whendeterminingremunerationarrangements,theCommitteemustreviewworkforce remunerationandrelatedpoliciesandthealignmentofincentivesandrewardswithcultureandtaketheseintoaccountwhendetermining remunerationoftheExecutiveGroup.FurtherdetailsontherolesandresponsibilitiesoftheCommitteearedisclosedinthetermsof referencewhichcanbefoundontheCompany’scorporatewebsite:www.drmartensplc.com. REMUNERATION COMMITTEE MEMBERSHIP AND MEETINGS DuringtheyeartheRemunerationCommitteecomprisedLynneWeedall(Chair),RobynPerriss,AndrewHarrisonandIanRogers, allofwhomareIndependentNon-ExecutiveDirectors.AndrewHarrisonjoinedtheCommitteeon1May2023. TheCommitteemetatotalofsixtimesduringtheyearended31March2024(onemeetingwasanextraordinarymeetinginJune2023). ThenumberofmeetingsattendedoutofthepossiblemaximumforeachofthemembersoftheCommitteeissetoutonpage116and includedintheAnnualReportonRemunerationbyreference. KEY ACTIVITIES DURING THE YEAR KeyactionsandareasofreviewbytheCommitteeduringtheyearincluded: • ReviewedandapprovedtheRemunerationPolicytobepresentedtoshareholdersattheAGMinJuly2024; • ConsultedwithmajorshareholdersaspartofthePolicyrenewalprocess; • ApprovedtheremunerationarrangementsforGilesWilson,theCFO,andconfirmedtheleavingarrangementsforJonMortimore, theformerCFO; • ApprovedremunerationpackagesfornewseniorhiresbelowthemainBoard; • DeterminedtheremunerationarrangementsfortheExecutiveGroup; • ReviewedandapprovedtheGlobalBonusSchemeoutcomefortheExecutiveDirectorsandthewiderworkforce; • ApprovedtheGBSandLTIPmeasuresandtargetsforFY24awards,ensuringthatperformancemeasuresalignwithourstrategy andthattargetsarestretchingandincentivisingagainstthewiderglobaleconomicchallengesthatweface; • MonitoredperformancefortheinflightGBSandLTIPawards; • ReviewedshareholdingsagainstshareownershiprequirementsfortheExecutiveGroup;and • Reviewedremunerationandrelatedpoliciesrelatingtothewiderworkforce. EXTERNAL ADVISERS TheRemunerationCommitteereceivesindependentadvicefromKornFerry,whowereappointedinJune2020bythepre-IPO RemunerationCommittee,followingatenderprocess.TheCommitteeissatisfiedthatKornFerryremainsindependentoftheCompany andthattheadviceprovidedisimpartialandobjective.KornFerryisasignatorytotheRemunerationConsultantGroup’sCodeof Conductwhichsetsoutguidelinestoensurethatanyadviceisindependentandfreeofundueinfluence,detailsofwhichcanbefound atwww.remunerationconsultantsgroup.com.Duringtheyear,KornFerrydidnotprovideanyotherservicestotheGroup.Thetotal feespaidtoKornFerryforRemunerationCommitteeadviceinFY24were£75,300andwerechargedonatimeandmaterialsbasis. TheCommittee’sadvisersattendCommitteemeetingsasrequiredandprovideadviceonremunerationforexecutives,analysisofthe RemunerationPolicyandregularmarketandbestpracticeupdates.TheadvisersreportdirectlytotheCommitteeChair. STATEMENT OF VOTING AT THE ANNUAL GENERAL MEETING Atthe2023AGMDr.Martens’shareholderswereaskedtoapprovethe2023Directors’RemunerationReport.TheDirectors’ RemunerationPolicywaslastapprovedbyshareholdersatthe2021AGM.Thevotesreceivedaresetoutbelow: 2023 AGM (13 July 2023) Nature of vote Votes for % Votes against % Votes total Votes withheld Approvethe2023 Directors’Remuneration Report(excludingthe RemunerationPolicy) Advisory 789,249,709 99.70 2,387,991 0.30 791,6 37,700 33,798,706 2021 AGM (29 July 2021) Nature of vote Votes for % Votes against % Votes total Votes withheld ApprovetheDirectors’ RemunerationPolicy Binding 810,983,185 99.20 6,512,215 0.80 817,495,400 275 ANNUAL REPORT ON REMUNERATION 126 DR. MARTENS PLC ANNUAL REPORT 2024 REMUNERATION REPORT CONTINUED Single total figure of remuneration for the financial year ending 31 March 2024 (audited) ThefollowingtablesetsoutthetotalremunerationforExecutiveandNon-ExecutiveDirectorsforthefinancialyearended31March2024. All figures shown in £000 Salary and fees Benefits 1 Pension 2 Other 3 Total Fixed Remuneration GBS (Annual bonus) LTIP Total Variable Remuneration Total FY24 FY23 FY24 FY23 FY24 FY23 FY24 FY23 FY24 FY23 FY24 FY23 FY24 FY23 FY24 FY23 FY24 FY23 KennyWilson 735 721 15 15 37 36 1 1 788 773 0 0 0 – 0 0 788 773 JonMortimore 473 464 16 15 24 23 1 1 513 503 0 0 0 – 0 0 513 503 PaulMason 342 335 – – – – – – 342 335 – – – – – – 342 335 LynneWeedall 101 99 – – – – – – 101 99 – – – – – – 101 99 IanRogers 68 67 – – – – – – 68 67 – – – – – – 68 67 RobynPerriss 96 94 – – – – – – 96 94 – – – – – – 96 94 IjeNwokorie 4 57 67 – – – – – – 57 67 – – – – – – 57 67 TaraAlhadeff 5 – – – – – – – – – – – – – – – – – – AndrewHarrison 6 62 N/A – – – – – – 62 – – – – – – – 62 – Notes to the table 1. Benefitsrepresentsthetaxablevalueofbenefitspaid.BenefitsprovidedtoExecutiveDirectorsarefamilyprivatehealthcoverandcarallowance. 2. ExecutiveDirectorsreceiveacashinlieuofpensioncontributionof5%ofsalary(inlinewiththewiderworkforce). 3. ThisrelatestothevalueofthematchinganddividendsharesawardedunderthetermsoftheShareIncentivePlanknownasBuyAsYouEarn(BAYE). 4. IjeNwokoriesteppeddownfromtheBoardon1February2024totakeupthepositionofChiefBrandOfficerwithimmediateeffect;hisfeeshavebeenpro-ratedaccordingly. 5. TaraAlhadeff,arepresentativeofPermira,receivesnofeesforherroleasNon-ExecutiveDirector. 6. AndrewHarrisonjoinedtheBoardon1May2023;hisfeeshavebeenpro-ratedaccordingly. Global Bonus Scheme (audited) ThemaximumGlobalBonusSchemeopportunityforFY24was200%ofsalaryfortheCEOand150%fortheCFO.Theperformanceagainst measuresforFY24issetoutbelow.ThebonuswassubjecttoPBT(75%ofmaximum)andstrategicobjectives(25%ofmaximum).The strategicelementwasbasedonthreeequallyweightedmeasures:employeeengagement,brandhealthandsustainability(ESG)targets. Measure Threshold Target Stretch Actual Achievement % of maximum available under that element Payout as a percentage of total bonusWeighting 10% of maximum 50% of maximum 100% of maximum PBT 75% £149.0m £165.5m £182.1m £93.0m 0% 0% Employee engagement 1 Growglobalemployeeengagement toreflectathrivingculture. 8.33% Maintain GlobalGrand FactorMean Engagement Scoreat3.98 GrowGlobal GrandFactor Mean Engagement Scoreto4.08 StretchGlobal GrandFactor Mean Engagement Scoreto4.13 GlobalGrand FactorMean Engagement Scoreof3.94 0% 0% Brand health 2 Growingthebrandequityacross6 keyareas(Awareness,Familiarity, EverPurchased,L24MPurchased, NetConsiderationandNetFuture PurchaseIntent)inour7keymarkets. 8.33% Improvement in2ofthe6 brandequity measures Improvement in4ofthe6 brandequity measures Improvement inall6brand equity measures 1.86outof6 areasimproved 0% 0% Sustainability (ESG) 3 Implementationofthesustainability strategyacrossbusiness,byshowing theprogressunderkeycommitments. 8.33% Achieved3out of6targets Achieved5out of6targets Achieved6out of6targets 6targets completed 100% 8.33% Notes 1. Employeeengagement–InMarch2024,allemployeeswereinvitedtoparticipateinourannualemployeeEngagementandInclusionSurvey.Engagementismeasuredwith referencetoaGrandFactorMeanScorewhichiscalculatedbasedonoutputfromasurveysystemprovidedbyanexternalprovider.Oursurveyparticipationrateremains highat92%(3,158responsesoutofapossible3,448).OuroverallscoreforMarch2024was3.94andourThresholdtargetwasmissed.Thishasgonedownby0.04since March2023.Whilethisisdisappointing,itisnotastatisticallymeaningfuldrop,whichisdefinedasanythingatorabove0.10forthispopulationsize. 2. Brandhealth–Thetargetswerebasedonimprovingtheequityofthebrandacross6coreindicatorsofbrandhealthincludingAwareness,Familiarity,EverPurchased, Purchasedinthelast24months,NetConsiderationandNetFuturePurchaseIntent.Measurementwasacrossour7prioritymarketsoftheUK,France,Germany,Italy, USA,ChinaandJapanusingrelativeimprovementversusaspecificgroupoffootwearcompanieswiththebaseperiodbeingOctober2022toOctober2023. 3. Sustainability(ESG)–TargetswerebasedonourPlanet,ProductandPeoplesustainabilitystrategies.Planettargetsincluded(i)identifyinganappropriatemechanismtosystematically collectandanalysecarbondatainaccordancewithcarbonaccountingrequirementstomeasureprogresstowardsNet-Zeroand(ii)achievingatleast95%ofrenewableenergy contractsinEMEAandidentifyingsolutionsinUSArenewablestohitourtargetdeadlineof2025.Producttargetsincluded(i)repairandresalemodel:finalisingheadsoftermscontracts withthethird-partywhitelabelpartnerand(ii)successfullymarketingaproductwithmoresustainablematerial(alternativematerialsuchaseLeatherorregenerativeleather).People targetsincluded(i)DE&I:allExecutiveGroupcompletinginclusiveleadershiptrainingledbyanexternalspecialistconsultancyand(ii)allTier1supplierscontinuingtobeauditedand achievinghighCSRstandardsinexternallyconductedaudit.ForFY24,6outof6targetswereachieved.(TheleadershiptrainingwasnotcompletedinFY24forlogisticalreasonsbut hasbeencommittedtoinearlyFY25.)FurtherdetailsontheactionswehavetakenonsustainabilitycanbefoundintheSustainabilityReportonpage46. Wedefinesustainablematerialsasthosewhichare1)Durable,2)Recycled,Renewableand/orRegenerativeand3)ProducedResponsibly. BasedonperformanceduringFY24theformulaicoutcomeoftheGBSforExecutiveDirectorsis8.33%ofmaximum.However,the ExecutiveDirectorselectedtowaivetheirbonusforFY24,theequivalentof£122,750and£59,096forourCEOandformerCFO respectively.Asaresult,therewasnopayoutundertheGBS. GOVERNANCE 127DR. MARTENS PLC ANNUAL REPORT 2024 Long Term Incentive Plan (LTIP) vesting during the year (audited) TheawardopportunityfortheLTIPawardsgrantedin2021atadmissionwas300%ofsalaryfortheCEOandformerCFO.Theperformance againstthemeasuresissetoutbelow.TheLTIPwassubjecttoEPS:compoundannualgrowthoverthreeyears(67%ofmaximum)and relativeTSRvs.FTSE350excludinginvestmenttrusts(33%ofmaximum).TheperformanceperiodfortheEPSforthisawardwas1April 2021to31March2024withTSRmeasuredfromadmissionon3February2021to31March2024.TheawardsareduetovestinJune2024. Measure Weighting Targets Actual Vesting (% of total award) Threshold (25% vesting) Stretch (100% vesting) EPS:compoundannualgrowthoverthreeyears 67% 12%p.a. 21%p.a. -21% 0% RelativeTSRvs.FTSE350(excludinginvestmenttrusts) 33% Median UpperQuartile orabove BelowMedian 0% LTIP granted during the year (audited) On30June2023,anLTIPawardwasgrantedtotheCEO.Asexplainedinthe2023AnnualReport,theLTIPawardwasreducedto250% ofsalaryfromtheusualpolicylevelof300%totakeintoaccountthesharepriceatthetimeofgrant. Executive Basis of the award (% of salary) Share price 1 Number of shares granted 2 Face value of the award at grant date (£) Threshold vesting (% of award) Grant date 3 Vesting date 4 KennyWilson 250% 119.3p 1,541,114 1,838,550 25% 30June2023 30June2026 1. Thesharepriceisbasedonthemid-marketcloseonthedaybeforethedateofgrant(30June2023). 2. LTIPgrantsweregrantedintheformofconditionalshareawards. 3. Performanceismeasuredoverthreefinancialyearsfrom1April2023to31March2026. 4. Anadditionaltwo-yearholdingperiodappliesaftertheendofthethree-yearvestingperiod. Tonote:NoawardwasmadetoJonMortimoreashewasundernoticeofretirementatthetimeoftheawardgrant. TheawardsabovearesubjecttotheEPSandTSRtargetssetoutinthetablebelow: Performance measure Weighting Targets Performance period EPS(compoundannualgrowth) 67% 3%p.a. 11%p.a. 1April2023– 31March2026 RelativeTSRvs.FTSE350(excludinginvestmenttrusts) 33% Median UpperQuartile orabove Payments to former Directors (audited) NopaymentsweremadetoformerDirectorsoftheCompanyduringtheyear. Appointment of new Chief Financial Officer GilesWilsontookupthepositionofCFOon13May2024. InsettingGiles’remuneration,webenchmarkedhissalaryagainstapeergroupof30FTSEcompaniespositionedaboveandbelowthe Dr.Martens’marketcapaswellastakingintoaccountthevalueofhispreviousremunerationandthatofthedepartingCFO.Hissalary of£485,000ispositionedjustbelowthemediansalaryofthisgroupandislessthan3%abovethatoftheformerCFOandlowerthanhis salarywithhisformeremployer. ParticipationintheGBSuptoamaximumof150%ofsalaryandtheLTIPuptoamaximum300%ofsalaryareinlinewithincentive opportunitiesfortheformerCFO.Likewisepensionallowancewillbe5%ofsalary. Inaddition,weagreedtocompensateGilesforbonusandLTIPawardsforfeitedonleavinghispreviousemployer. Gileswillreceiveacashpaymentascompensationforthelossofhisannualperformancebonusfor2023toavalueof£299,356.Hewill alsobecompensatedforaseparateone-offbonustothevalueof£62,750whichhewouldhavereceivedhadhenotresigned.Paymentof theseamountsweremadeshortlyafterjoining,withGilesusingone-thirdofthenetamountpayabletopurchaseshares.Wewillalsomake acashpaymenttoGilesinlieuofhisforfeitedannualperformancebonusfortheperiod1January2024to30April2024toavalueof £99,785.ThiswillbemadeinMarch2025,inlinewiththeoriginalpaymentdate,withone-thirdofthenetamountusedtopurchaseshares. ThecashLTIPawardsheldbyGilesfor2022and2023willbereplacedbyanawardunderthe2025LTIP(withDM’sperformance conditions),vestinginJune2027,beingaftertheoriginalvestingscheduleofApril2025forthe2022awardandApril2026forthe2023 award.His2021cashLTIPwhichwasduetovestinApril2024waspaidincashtoavalueof£400,400shortlyafterjoining,basedonthe outturnoftheoriginalperformanceconditions. Gileshasbeenprovidedwitharelocationallowanceof£18,000net,payableinsixequalinstalmentsafterjoining,tocoverthecostof interimaccommodation.Wewillalsocover£20,000associatedwithremovalexpenses.Finally,weprovided£2,000towardslegalcosts relatedtoareviewofhisExecutiveServiceAgreement(ESA). FulldetailswillbesetoutintheFY25Directors’RemunerationReportoncealltheawardshavebeengranted. 128 DR. MARTENS PLC ANNUAL REPORT 2024 REMUNERATION REPORT CONTINUED Retirement of Executive Director (audited) On14April2023,weannouncedthatJonMortimorewouldberetiringasChiefFinancialOfficerwiththeagreementoftheBoardandon thatbasistheCommitteeconfirmedhis‘goodleaver’statusforthepurposesoftheGBSandLTIP.Whilsthisnoticeperiodrequirednine months’noticewearegratefultoJonforagreeingtoremainactivelyemployedfulltimewiththebusinessforlongertosecureasmooth yearend. Onthisbasis,Joncontinuedtoreceivesalary,benefitsandpensionuntilhelefttheCompanyon31March2024.Jonwillreceivenofurther contractualpaymentsafterhisretirement. JonwaseligibletoparticipateintheFY24GBS.However,asdetailedonpage117,theExecutiveDirectorshavewaivedtheirentitlement toanypayoutundertheplan. Jonwillretainanyshareawardsgrantedtohimuptothedatehisretirementwasannounced.BonussharesgrantedtohiminJuly2022 areundertwo-yearrestrictionuntilJuly2024.JonwasnotgrantedaFY24LTIPawardinJune2023.OutstandingLTIPawardsfrom previousgrantswillremaincapableofvestingontheiroriginalvestingdates,subjecttoperformanceconditionsandpro-ratedtoreflectthe periodfromtheirdateofgranttotheendofhisperiodofemploymentinaccordancewiththerulesoftheplan.Theusualtwo-yearpostvest holdingperiodwillapplytoanynetoftaxvestedsharesundertheLTIP.AwardsheldbyJonwillremainsubjecttomalusandclawbackin accordancewiththeplanrules.Asdetailedpreviously,theLTIPawardgrantedin2021atadmissionwillnotvest. Jonisrequiredtomaintain,fortwoyearsafterleavingtheCompany,aminimumshareholdingequaltotheshareholdingrequirement hewassubjecttoduringemployment(300%ofhisbasesalary). ThesearrangementsareinlinewithJon’sESAandtheDirectors’RemunerationPolicy. Director interests and Executive Directors’ shareholding requirements (audited) Duringemployment,ExecutiveDirectorsarerequiredtobuildandmaintainashareholdingequivalentto300%oftheirbasesalary. Post-cessationofemployment,ExecutiveDirectorsmustretainsharestothevalueof300%ofsalaryforaperiodoftwoyearsin accordancewiththeRemunerationPolicy(whichnowappliestoJonMortimore,theformerCFO).TheshareholdingsofKennyWilson andJonMortimoreexceedthisrequirementsignificantly. ThetablebelowsummariseseachDirector’scurrentshareholding,includingsharessubjecttoadeferralorholdingperiodand performanceconditions,andwhethertheshareholdingrequirementhasbeenmet. Intheperiod1April2024to29May2024,KennyWilsonacquired698sharesduetohisparticipationintheBAYEplan.Asaresult,he increasedthenumberofbeneficiallyownedsharesby349(PartnershipShares)to11,533,506shares.Healsoincreasedhissharessubject tocontinuedemploymentby349(MatchingShares)to2,322.InthesameperiodJonMortimoreacquired318sharesduetohisparticipation intheBAYEplanandcontributionmadepriortohisretirement.Asaresult,heincreasedthenumberofbeneficiallyownedsharesby159 (PartnershipShares)to6,379,205shares.Healsoincreasedhissharessubjecttocontinuedemploymentby159(MatchingShares)to 2,132.TherewerenootherchangesintheDirectors’interestsassetoutbelowbetween1April2024and29May2024. Director Beneficially owned shares on 31 March 2023 1 Beneficially owned shares on 31 March 2024 1 Shares subject to continued employment 2 Unvested shares subject to performance conditions Shareholding requirement (% of salary) Current shareholding (% of salary) 3 Requirement met KennyWilson 11,221,559 11,533,157 1,973 2,864,763 300% 1,376% Yes JonMortimore 6,377,396 6,379,046 1,973 850,916 300% 1,184% Yes PaulMason 7,875,000 7,875,000 – – N/A N/A N/A LynneWeedall 17,054 21,054 – – N/A N/A N/A IanRogers 20,270 20,270 - - N/A N/A N/A AndrewHarrison N/A 18,374 – – N/A N/A N/A RobynPerriss 89,054 99,328 – – N/A N/A N/A IjeNwokorie 5,405 5,405 4 – – N/A N/A N/A TaraAlhadeff 0 5 0 5 – – N/A N/A N/A Notes 1. ThetotalnumberofinterestsinsharesintheCompanyoftheDirectorincludinginterestsofconnectedpersons.ThisalsoincludesPartnershipSharesandDividendShares undertheBAYEandBonusSharesundertheGlobalBonusSchemewhicharesubjecttoatwo-yearholdingperiod. 2. ThisincludesBAYEMatchingShareswhicharesubjecttocontinuedemployment(aforfeitureperiodofthreeyears)butarenotsubjecttoperformanceconditions. 3. Forthepurposesofcompliancewiththeshareownershipguidelines,onlybeneficiallyownedsharesarecounted.ThisincludesanyPartnershipSharesandDividend SharesundertheBAYE,andBonusSharespurchasedundertheGlobalBonusPlan.UnvestedsharesintheLTIParenotcounted.Thisfigureiscalculatedusingthebase salaryon31March2024,andasharepriceon29March2024of87.75pence. 4. IjeNwokoriesteppeddownfromtheBoardon1February2024totakeupthepositionofChiefBrandOfficerwithimmediateeffect.Hisinterestinsharesisshownatthisdate. 5. TaraAlhadeffisaPartneratPermiraAdvisersLLP,andtheynominatedherforappointmenttotheBoard.IngreLuxS.àr.l(whichiswhollyownedbyPermiraAdvisersLLP) hold369,942,440sharesinDr.Martens. Inthetablesbelow,wehavesummarisedtheoutstandingawardsfortheExecutiveDirectorsincludedintheDirectors’shareinteresttable. GOVERNANCE 129DR. MARTENS PLC ANNUAL REPORT 2024 LTIP awards (awards subject to performance conditions) Grant date Share price at grant Type of award No of shares under the award 01/04/2023 Granted during the year Vested during the year Exercised during the year Lapsed during the year No of shares under the award 31/03/2024 End of performance period Kenny Wilson 2023LTIP 30/06/2023 119.3p Conditional shares – 1,541,114 – – – 1,541,114 31/03/2026 2022LTIP 15/06/2022 238.4p Conditional shares 756,082 – – – – 756,082 31/03/2025 2021LTIP 09/02/2021 513.0p 1 Conditional shares 567,567 – – – – 567,567 31/03/2024 Total 1,323,649 1,541,114 2,864,763 Jon Mortimore 2022LTIP 15/06/2022 238.4p Conditional shares 486,052 – – – – 486,052 31/03/2025 2021LTIP 09/02/2021 513.0p 1 Conditional shares 364,864 – – – – 364,864 31/03/2024 Total 850,916 850,916 1. AsexplainedintheProspectusandalsointhe2021AnnualReport,thenumberofsharesawardedwascalculatedusingtheoffersharepriceof370.0p.Theclosingshare priceonthedateofgrantwas513.0p. Performance graph and table Dr.Martens’sharesbeganunconditionaltradingontheLondonStockExchange’smainmarketon3February2021.Thechartbelowshows theTSRperformanceof£100investedinDr.Martensfrom3February2021(usingtheofferpriceof370ppershare)to29March2024against theFTSE350index(excludinginvestmenttrusts).TheFTSE350indexisconsideredanappropriatecomparisonasDr.Martensisa constituentoftheindex. £20 £40 £60 £80 £100 £120 £140 £160 Value £ (Rebased) Dr. Martens FTSE 350 03/02/2021 31/03/2021 31/03/2022 31/03/202431/03/2023 FY24 FY23 FY22 FY21 1 CEOsingletotalfiguretotalremuneration(£000s) 788 773 1,656 259 GBS(as%ofmaximumopportunity) 0% 0% 65% 75% Long-termincentivevesting(as%ofmaximumopportunity) 0% – – – 1. FY21wasbasedonperiodfromadmissionon29January2021to31March2021. 130 DR. MARTENS PLC ANNUAL REPORT 2024 REMUNERATION REPORT CONTINUED Change in Directors’ and employee remuneration Thetablebelowsetsoutthepercentagechangeinbasesalary,valueoftaxablebenefitsandbonusforalltheDirectorscomparedwiththe averagepercentagechangeforemployees. Percentage change in FY23 – FY24 Percentage change in FY22 – FY23 Percentage change in FY21-FY22 1 Salary Taxable benefits Global Bonus Scheme Salary Taxable benefits Global Bonus Scheme Salary Taxable benefits Global Bonus Scheme KennyWilson 2% (1%) 3 0% 3% (1%) 3 (100%) 0% 0% 15.7% JonMortimore 2% 1% 4 0% 3% 0% (100%) 0% 0% 71.6% PaulMason 2% – – 3% – – 0% – – LynneWeedall 2% – – 3% – – 0% – – IanRogers 2% – – 3% 0% RobynPerriss 2% – – 12% 2 – – 2.9% – – IjeNwokorie 2% – – 3% – – 0% – – AndrewHarrison N/A – – N/A N/A TaraAlhadeff – – – – – – – – – Employees 5,6 5.8% (17. 6%) (23.8%) 7.6% 19.4% (91.3%) 7.0% 34.8% 3 7.5% 1. InFY21,thesingletotalfigureofremunerationtablewasbasedontheperiodfromadmissionon29January2021to31March2021,whereasinFY22thetablewasbased onthefullfinancialyearending31March2022.Asaresult,thefiguresfortheprioryearareannualisedbasedonthechangeintheactualsingletotalfigureofremuneration forFY22comparedtotheannualisedsingletotalfigureofremunerationforFY21forbothDirectorsandemployees. 2. InJanuary2022(FY22),RobynwasappointedtheNon-ExecutiveDirectorresponsibleforemployeeengagementtorepresenttheemployees’voicesattheBoardlevel. ToreflecttheincreasedtimethatRobynisspendingonhercommitmentandresponsibilities,theBoardintroducedanadditionalfeeof£10,000perannumforthisroleon 1January2022. 3. InNovember2022,Kennyoptedtoreducehisprivatehealthcarefromfamilycovertopartnercover.HecontinuedtoreceivepartnercoverthroughoutFY24. 4. Thisreflectstheincreasedcostofprivatehealthcare;therewerenoadditionalbenefitsreceived. 5. TheaveragepercentagechangeforemployeesiscalculatedwithreferencetoUKbasedemployeesonlyusingthesamedatausedforCEOpayratiopurposes.This populationhasbeenselectedasitalignstothegroupfortheCEOpayratioandsoenablesamoremeaningfulinternalcomparison.Therearenoemployees,otherthan ExecutiveDirectors,inthelistedparentcompany. 6. InordertoshowamoredirectcomparisontotaxablebenefitsfortheExecutiveDirectors,thebasisforthepercentagechangeintaxablebenefitsforemployeeshasbeen updatedfromprioryeardisclosurestoexcludepayrollallowancespaidtosomeemployeeswhicharenotstrictlyconsideredasbenefits.ThepercentagechangeforFY23– FY24reflectstheremovalofacarallowancefornewjoinersatexecutivelevel(excludingtheExecutiveDirectors). CEO pay ratio UKregulationsrequirecompanieswithmorethan250UKemployeestopublisharatiotoshowCEOtotalpayversusthatofitsUK employees.Inlinewiththeseregulations,wehaveprovidedtheratiocalculatedusingMethodAdeterminedbytheregulations,under whichasingletotalfigureofremunerationisderivedforeachemployeeandthequartilesanalysed.Thismethodis,intheCommittee’s view,themostcomprehensiveandaccuratereflectionoftheremunerationpictureacrossouremployeepopulation. Year ended Method Lower Quartile Median Upper Quartile 31March2024 A 31:1 26:1 15:1 31March2023 A 32:1 27:1 15:1 31March2022 A 77:1 60:1 31:1 31March2021 A 76:1 62:1 35:1 ThepayfortheCEOandtheemployeesatthepercentilesissetoutbelow: £’000s CEO Lower Quartile Median Upper Quartile Basicsalary 735 23.0 26.2 47.0 Totalpay 788 25.7 30.4 53.5 Theemployeepayfigureswerecalculatedbyreferencetoandasattheyearended31March2024usingfull-timeequivalentdatafor relevantemployeesinserviceasat31March2024.InFY24,fortheCEOtherewasamodestsalaryincrease(lowerthantheworkforce rate),nopayoutunderthebonusforthesecondyearrunningandnopayoutundertheLTIPawardgrantedonadmission.Thisisthereason whytheratioofhisremunerationtotherestofthewiderworkforceissimilartothatinFY23(whentheCEOalsoreceivedazerobonus payout)butlowercomparedtoFY22,whenabonuswaspayabletotheCEO. TheCommitteeiscomfortablethatthepayratioshownaboveisconsistentwithourpay,rewardandprogressionpoliciesfortheGroup’s UKemployeesasawhole.TheCEO’sremunerationpackageismoreheavilyweightedtowardsvariablepaythanthatofthewider workforce,duetothenatureoftherole,andmeanstheratioislikelytofluctuatedependingontheperformanceofthebusinessandthe relatedoutturnsoftheincentiveplansineachyear. GOVERNANCE 131DR. MARTENS PLC ANNUAL REPORT 2024 Relative importance of the spend on pay ThetablebelowshowstheGroup’sexpenditureonemployeepaycomparedtodistributionstoshareholdersfortheyearended31March2024, comparedtoFY23: FY24 £m FY23 £m % Change Distributiontoshareholders 57. 8 58.4 (1.0) Totalemployees’pay 126.7 1 17.5 7.8 Implementation of Policy in FY25 ThesectionbelowsetsouttheplannedimplementationoftheRemunerationPolicyinFY25. Executive Director remuneration BASE SALARY ThesalaryforKennyWilsonwasnotincreasedforFY25.ThesalaryforGilesWilsonwasagreedaspartofhisrecruitment. Executive Director Base salaries FY25 FY24 % Change KennyWilson £735,420 £735,420 0% GilesWilson £485,000 – – PENSION AND BENEFITS ExecutiveDirectorswillcontinuetoreceiveacashinlieuofpensioncontributionof5%ofsalaryinlinewiththerateapplyingtothemajority oftheUKworkforce.Otherbenefitsincludefamilyprivatehealthcover,lifeassurancecover,groupincomeprotectionandcarallowance. GLOBAL BONUS SCHEME ThemaximumGBSopportunitywillbeinlinewithPolicy,being200%ofsalaryfortheCEOand150%ofsalaryfortheCFO. Performancewillbebasedonprofitbeforetax(PBT)weighted55%,thenumberofpairsofDTCbootssoldweighted20%andstrategic objectivesrelatingtoleadershipbehaviours,branddesireandsustainability(ESG)weighted25%intotalor8.33%perobjective.The Committeeconsidersthedisclosureoftheprecisetargetstobecommerciallysensitive,buttherewillbefullretrospectivedisclosurein nextyear’sAnnualReport.TheRemunerationCommitteehasthediscretiontoadjusttheformulaicGBSoutcomeifitbelievesthatsuch outcomeisnotafairandaccuratereflectionofbusinessperformance. One-thirdofthepost-taxGBSawardedwillbeusedtopurchaseshares,whichmustbeheldfortwoyearsfromthedateofacquisition. MalusandclawbackprovisionsapplyasoutlinedintheRemunerationPolicy,fromthedateofdeterminationofbonusoutturn,andforupto threeyearsthereafter. LONG TERM INCENTIVE PLAN TheCommitteehasnotyetfinalisedtheawardlevelsorpreciserangeoffinancialtargetswhichwillapplytotheawards.Oncetheseare determined,theCommitteewillpublishthisinformationbyRNSannouncementwhentheExecutiveDirectors’awardsaremade,and withinnextyear’sDirectors’RemunerationReport. Whenassessingtheperformanceoutcome,theRemunerationCommitteewillhavethediscretiontoaltertheformulaicvestingifit believesthatitisnotafairandaccuratereflectionofbusinessperformance. Awardsaresubjecttoatwo-yearpost-vestingholdingperiod.Malusandclawbackprovisionsapplyforuptothreeyearsfollowingvesting. 132 DR. MARTENS PLC ANNUAL REPORT 2024 REMUNERATION REPORT CONTINUED Non-Executive Director remuneration InlinewiththeCEO,theChairandNon-ExecutiveDirectors’feeshavenotbeenincreasedfortheyearendingFY25.Thefeesaresetout infullinthetablebelow. Non-Executive Director Fees FY25 FY24 % Change ChairoftheBoard £341,970 £341,970 0% Non-ExecutiveDirectorbasefee £68,078 £68,078 0% SeniorIndependentDirector £15,759 £15,759 0% AuditandRiskCommitteeChair’sfee £17,755 £17,75 5 0% RemunerationCommitteeChair’sfee £17,019 £17,01 9 0% EmployeeEngagementDirector £10,506 £10,506 0% All-employee share incentives TheExecutiveDirectorswillbeeligibletoparticipateinanyall-employeeshareplanoperatedbytheCompanyonaconsistentbasisto otherUK-basedemployees.KennyWilson(andJonMortimoreto31March2024)electedtoparticipateinYourShare,BuyAsYouEarn (BAYE),anHMRCApprovedSIP,underwhichparticipantsinvestfromtheirgrossmonthlyincomeintoPartnershipSharesandreceive a1:1MatchingShareforeachPartnershipSharepurchased. Approval ThisRemunerationReportwasapprovedbytheBoardofDirectorson29May2024andsignedonitsbehalfbytheRemuneration CommitteeChair: LYNNE WEEDALL CHAIROFTHEREMUNERATIONCOMMITTEE 29May2024 GOVERNANCE 133DR. MARTENS PLC ANNUAL REPORT 2024 ROLE OF THE COMMITTEE Toprovideindependentchallengeand oversightoftheaccounting,financialand narrativereportingandinternalcontrol processes,riskmanagement,theInternal Auditfunctionandtherelationshipwithour externalauditor. COMMITTEE MEMBERSHIP AND COMPOSITION TheCommitteerevieweditscomposition duringtheyearandissatisfiedthatitis appropriate.DuringFY24theCommittee comprisedfourIndependentNon-Executive Directors:LynneWeedall,IjeNwokorie, AndrewHarrisonandRobynPerrissas CommitteeChair.Andrewformallyjoined theCommitteeon1May2023andwas presentalongwitheveryotherCommittee memberatallofitsmeetingsduringthe year.IjesteppeddownfromtheCommittee onhisappointmentasChiefBrandOfficer inFebruary2024. EmilyReichwaldwassecretarytothe CommitteethroughoutFY24.Shewill besucceededbyKatherineBellauas secretarytotheCommitteewhenshe joinsthebusinessinJune. ThecurrentmembersoftheCommittee andtheirattendanceatmeetingsduring theyeararedisclosedtotheright.Full biographiesofeachmembercanbefound onthispageand/orpages93and94. COMMITTEE MEMBERS DURING FY24 Number of meetings attended/max number could have attended: RobynPerriss (Committee Chair) 5/5 IjeNwokorie 1 5/5 LynneWeedall 5/5 AndrewHarrison 2 4/5 3 1. Steppeddown1February2024. 2. Appointed1May2023. 3. AndrewHarrisonwasunabletoattendthe 3May2023AuditandRiskCommitteemeeting duetopre-existingbusinesscommitments. ThiswasnotifiedpriortotheChairoftheCommittee. COMMITTEE COMPOSITION As at 31March 2024 Female 67% Male 33% • Monitoringtheintegrityofthe Group’sAnnualReportsandfinancial statementsandanyotherformal announcementsrelatingtotheGroup’s financialperformance,andreviewing thesignificantfinancialreporting judgementsmadeinconnectionwith theirpreparation. • Monitoringandreviewingtheadequacy andeffectivenessoftheCompany’s internalfinancialcontrolsandinternal controlandriskmanagementsystems. • Overseeingandmaintainingan appropriaterelationshipwiththe Company’sexternalauditorand reviewingtheindependence, objectivityandeffectivenessof theauditprocess. • EnsuringthatInternalAuditarrangements areappropriateandeffective. • Ensuringthatfraudpreventionand whistleblowingarrangementsare embeddedtominimisethepotential forfraudandfinancialimpropriety. The Committee covered extensive ground over the course of what was, in many respects, a difficult year for Dr. Martens. ROBYN PERRISS Chair of the Audit and Risk Committee KEY RESPONSIBILITIES LOOKING AHEAD: FOCUS AREAS FOR FY25 • EnsuringasmoothtransitiontoanewCFO. • Oversightofcontrolandreportingrelatingtoplannedcostreductioninitiatives. • Monitoringofworkingcapitalbalancesincludingplannedreductionininventoryholdinglevels. • ContinuedESGmaturityandfutureCSRDreportingrequirements. • Reviewsofkeybusinesstransformationprojects. 134 DR. MARTENS PLC ANNUAL REPORT 2024 AUDIT AND RISK COMMITTEE REPORT AsChairoftheAuditandRiskCommittee (theCommittee),Iampleasedtopresent ourReportforFY24. TheCommitteecoveredextensiveground overthecourseofwhatwas,inmanyrespects, adifficultyearforDr.Martens,withmixed tradingperformancecompoundedby macroeconomicuncertaintyandachallenging consumerenvironment,particularlyinthe USA.Thesepressuresbroughttheimportance oftheCommittee’sroleintosharprelief, particularlyourprovisionofassurancetothe Boardthroughourindependentchallengeand oversightoftheGroup’saccounting,financial andnarrativereporting,riskmanagement andinternalcontrolprocesses. OurReportisstructuredtopresentan overviewofhowwefulfilledourroleduring FY24,includingouroversightoftheInternal Auditfunctionandmanagementofthe relationshipwithourexternalauditor, PricewaterhouseCoopersLLP(PwC). Itcovers: • howwesupportedthebusinessin respondingtothechallengesithasfaced throughouractivities,discussionsand debatesatourmeetingsduringtheyear; • ourworkinoverseeingandproviding assurancetoourBoardinrespectofthe integrityofourreporting; • ourprocessforreviewing,withthe assistanceofmanagement,theFY24 AnnualReportforthepurposesof assessingwhether,intheviewofthe Committee,itrepresentedafair, balancedandunderstandableaccountof theGroup’spositionandprospects;and • howwereviewedandassessedthe effectivenessoftheexternalandinternalaudit processes,aswellasofourperformance asaCommittee,duringtheyear. Asever,ourReportisbestreadin conjunctionwiththefinancialstatements andtheiraccompanyingnotes,whichcan befoundfrompage160. Activities in FY24 OurprogrammeofworkinFY24covered thepriorityfocusareasweidentifiedand disclosedinourFY23AnnualReport,our regularannualreviewsoftherangeofareas withinourremitanddeeperdivesintospecific issues,whichIwillsummarisehereand aboutwhichmoreinformationissetoutinthe Committee’sReport.Asummaryoftherange ofitemsweconsideredasaCommitteeat eachofourmeetingsduringtheyearcan alsobefoundinthetimelineonpage137. Overthecourseoftheyearwereceived detailedbusinessupdatesfromtheITand InformationSecurity,Compliance,Data Protection,TaxandTreasuryfunctions, reviewedandapprovedanumberofnewor revisedGrouppoliciesandapprovedour annualTaxStrategyStatement.Wealso undertookourregular‘businessasusual’ reviewsofthefullandhalfyearaccounts andtheircorrespondingannouncements, externalauditpolicies,theeffectivenessof theexternalauditorandtheInternalAudit function,whistleblowingandanti-fraud procedures,riskmanagementprocesses andtheGroupRiskRegister. Thefollowingsectionsprovidemoreinsight intothekeyissuesweconsideredasa CommitteeoverthecourseofFY24. Navigating the CFO transition DuringtheinterimperiodbetweenJon Mortimore’sretirementattheendofthe financialyearandGilesWilsonformally joiningtheBoardon13May2024,the Committeeprovidedadditionaloversight supporttotheFinancePanelestablished bythebusinesstocovertheperiodwhereit hadnoCFOinsituandtoensurecontinuity, transparencyandcollectiveownershipof therangeofactivitieswhichusuallyfall withintheirremit. AsChairoftheCommittee,Ikeptinregular contactwithmanagementduringthistime toprovidesupportandguidanceasneeded. Theroughlytwomonthperiodduringwhich theFinancePaneloperatedalsoprovidedus asaCommitteewithgreatervisibilityof,and excellentinsightinto,the‘benchstrength’ ofthewiderFinanceleadershipteam.Iam pleasedthatthispotentiallytrickyperiod wasultimatelynavigatedsmoothlyand commendthemembersoftheFinance Panelandthosewhosupportedthemfor theirhardworkandprofessionalism,without whichitwouldnothavebeenpossible. AdescriptionoftheroleoftheFinance Panelcanbefoundonpage136. WithGilesnowhavingjoined,bothIandmy fellowCommitteememberslookforward toworkingwithhimthroughoutFY25. Governance and sustainability reporting TheCommitteereceivedupdatesatvarious pointsduringtheyearontheworkunderway topreparethebusinessfortherangeof incomingcorporategovernanceand sustainabilityreportingrequirements. Withthesubsequentwithdrawalofthedraft reportingregulationsbytheUKGovernment inOctober2023,theCommitteereceived updatesfromtheInternalAuditfunction ontherangeofactivitiesthatwerealready underwayinpreparationforthenew requirementsandwhichwouldbecontinued ona‘noregrets’basis,includingfurther workonESGassurance,developinginternal controlsandfraudriskmanagement. Intermsofclimateandsustainability reporting,wecompletedourannualreview oftherequirementsoftheTaskForceon Climate-relatedFinancialDisclosures (TCFD).WiththesupportofourSustainability team,weconsideredtheimpactofclimate changefromariskperspectiveandthe qualityandconsistencyofourreporting againsteachoftheTCFDpillars. Wealsoconsideredthedeveloping ESGreportinglandscapeinmoredetail, particularlytheincomingEUCorporate SustainabilityReportingDirective(CSRD) andenhancedESGassurance requirements.Wereceivedadetailedreport onthesetopicsfromPwCanddiscussed theimplications,timingsandapproach topreparingforthenewrequirementsin depth.Althoughstillsometimeaway,the implementationofthisnewdirectivewillbea significant,cross-functionalundertakingfor Dr.Martensandallcompaniestowhichitwill apply.Assuch,itwillremainakeyareaof focusfortheCommitteefortheforeseeable future.Moreinformationcanbefoundinthe SustainabilityReportonpages46to74. Focus on internal controls Internalcontrolswereanareaofparticular focusfortheCommitteethroughoutFY24. WereceivedreportsfromPwCandthe InternalAuditfunctionanddiscussed inventorycontrolsintheUSAandcontrols overtherecordingofshippingrelatedcosts. Reviewsofinventorycontrols,particularly inourUSAdistributioncentre,wereakey priorityfortheInternalAuditfunctiongiventhe issuesweexperiencedinthepreviousyear andourongoingelevatedinventorylevels. WereviewedtheITgeneralcontrols roadmapandwerepleasedtonotethe Group’sincreasingmaturationinthiskey area.Wealsocontinuedourmonitoringof developmentsandprogressintheGroup’s cyberandITsecuritymaturity,considered theimpactofemergingtechnologiessuch asgenerativeAIandapprovedanumberof relatedinternalpoliciestotightenthelevelof internaloversightandguidance.Moreinsight onITcontrols,ourCyberStrategyandthe evolvingtechnologylandscapecanbefound intheQ&AwithourChiefTechnologyOfficer, GrahamCalder,onpage139. GOVERNANCE 135DR. MARTENS PLC ANNUAL REPORT 2024 Internal Audit programme TheCommitteereceivedregularreports fromtheInternalAuditfunctiononthe FY24InternalAuditplan.TheInternal AuditreviewsconductedduringFY24 encompassedarangeofareasandwere conductedwithasignificantfocuson controls,includingtheaforementioned reviewsofinventoryandITcontrolsaswell ascontrolsaroundsocialmediaaccess, payrollandfreightcosts. Wediscussedtheprogress,findingsand outcomesofspecificInternalAuditreviews andtheassuranceworkundertakenonthe Committee’sbehalfbytheInternalAudit functioninrelationtokeystrategicprojects ateachofourmeetingsinFY24.More informationontheroleandeffectivenessof theInternalAuditfunctionandtheiractivities duringFY24canbefoundonpage142. Risk Intermsofourconsiderationsaround theCompany’skeyrisks,weaddeda newprincipalriskof‘macroeconomic uncertainty’toensurewehadappropriately capturedtheimpactoffactorsincluding geopoliticalinstabilityonconsumer demand,costinflationandtrading conditionsinourkeymarkets.Wealso agreedtoadjustourassessmentsofa numberofexistingriskstobetterreflect ourpresentcircumstances,including increasedorganisationalchangerisklinked toournewBoardandGLTappointments. FY24 audit FY24wasPwC’ssecondyearasour externalauditor.Iampleasedtoreportthat theFY24auditwascompletedsmoothly andevolvedincertainkeyareas,including increasedusageofdigitaltoolstosupport elementsoftheauditprocess.Therewas agoodlevelofchallengeonkeyareasof judgementandappropriateidentification ofourkeyrisks.Theworkingrelationships betweenthePwCandDr.Martensteams remainconstructiveandstrengthenedbya healthydegreeoftrustandrespect.More informationabouttheCommittee’srolein overseeingtherelationshipwithand reviewingtheeffectivenessoftheexternal auditorduringtheyearcanbefoundon page141.PwC’sIndependentAuditor’s Reportisavailablefrompage150. Areas of accounting judgement, going concern and viability ToassisttheCommitteeinfulfillingourcore responsibilitiestosatisfyourselvesthatthe AnnualReport(asawhole)offersafair, balancedandunderstandableassessment oftheCompany’spositionandfuture prospectsandthattheaccountsprovide atrueandfairviewoftheCompany’s financialaffairs,weconsideredthe significantfinancialjudgementsmade, andanykeyaccountingissuesidentified, bymanagementoverthecourseofthe year.Weconsideredtheseindetail, alongsideourgoingconcernandviability scenariosinthecontextofthechallenges impactingthebusinessduringtheyear andwithaneyetowardsFY25asayear inwhichthebusinesswould‘reset’for thefuture.Fulldetailsoftheseandthe Committee’sassessmentsofeach canbefoundonpages143.Ourgoing concernandviabilitystatementscan befoundonpages44and45. Committee effectiveness InFY24weagaincompletedourannual reviewoftheCommittee’seffectiveness aspartoftheinternalBoardEvaluation process.Weconsideredandreflected onourassessmentofoureffectiveness subsequenttotheyearend,duringour meetinginearlyApril2024.Iampleased thatourreviewconcludedthatwe continuetooperateeffectivelyasa CommitteeandtoprovidetheBoard withtherequiredlevelofassurance throughourwork.Moreinformation canbefoundonpage142. Future priorities LookingaheadtoFY25,therearea numberofpriorityareasonwhichthe Committeewillbefocusingitsattention. Anumberofthemostimportantare listedonpage134.Additionallyand inrecognitionoftheongoing,difficult tradingenvironmentcombinedwith anumberofsignificantorganisational changes,particularlythoseinkey governanceroles,wewillsupportand monitortheprogressofournewsenior appointmentstohelpensureasmooth transitionandanongoing,effective controlenvironment. Wewillalsocontinueourmonitoringof plannedinvestmentandprogressinkey workstreamsdesignedtosupportbetter datamanagementandmoreresilient andscalableplatforms.ESGremains akeyfocusareaandinFY25thiswill includetheoutcomeandnextsteps oftheproposeddoublemateriality assessmentaswellasongoing complianceandreportingrequirements. ROBYN PERRISS CHAIROFTHEAUDIT ANDRISKCOMMITTEE 29May2024 FINANCE PANEL ROLE AND MEMBERSHIP OF THE PANEL TheFinancePanel(thePanel)was establishedinMarch2024tosecure continuityinrespectofkeymattersfalling withintheremitoftheChiefFinancialOfficer duringtheperiodbetweenJonMortimore’s retirementandGilesWilson’sformalstart date.TheestablishmentofthePanelwas agreedbytheBoardwithoversightofits activitiesdelegatedtotheCommittee.The Paneloperatedundertermsofreference definingitsmembershipandresponsibilities. ForthedurationofthePanel’soperation, itsmemberscomprisedtheChiefOperating Officer,CompanySecretary,Investor RelationsDirector,DirectorofFinance Control,FinanceDirectorEMEA,Directorof SupplyChainFinance,DirectorofFP&Aand CorporateFinanceandtheGeneralCounsel. GOVERNANCE ROLE AND MEMBERSHIP OF THE COMMITTEE Detailsofthecomposition,roleandrangeof responsibilitieswithintheCommittee’sremit aresetoutonpage134.Moredetailsonthese areavailableatwww.drmartensplc.com, wheretheCommittee’stermsofreference canalsobefound. COMPETENCE OF THE COMMITTEE ThemembersoftheCommitteebringa breadthoffinancial,commercialandsector expertise,whichwasaugmentedduringthe yearwiththeappointmentofAndrewHarrison. TheCommitteeremainssatisfiedthatitmeets itsresponsibilitiesundertheUKCorporate GovernanceCode(the‘Code’)andretainsan appropriatelevelofcompetencerelevantto thesectorinwhichtheCompanyoperates. CHAIR OF THE COMMITTEE RobynPerrisshaschairedtheAudit andRiskCommitteesinceJanuary2021. Herresponsibilitiesincludesettingthe Committee’sagendaandforwardplanner, maintainingrelationshipsbetweenthe Company’sseniorleadershipandtheexternal auditor,ensuringthatanyrelevantauditissues arereportedbacktotheBoardeffectively andinatimelyfashion,andreportingto shareholdersthroughtheAnnualReport. RECENT AND RELEVANT FINANCIAL EXPERIENCE TheCommitteeissatisfiedthatRobynPerriss, aCharteredAccountant,formerFinance DirectorofaFTSE100companyandan experiencedAuditCommitteeChair,hasrecent andrelevantfinancialexperienceandshehas beendesignatedasthefinancialexperton theCommitteeforthepurposesoftheCode. EXPERIENCE AND QUALIFICATIONS OF EACH MEMBER OF THE COMMITTEE P93AND94 136 DR. MARTENS PLC ANNUAL REPORT 2024 AUDIT AND RISK COMMITTEE REPORT CONTINUED Early May 2023 • Reviewed Audit and Risk Committee effectiveness. • Reviewed the effectiveness of the Internal Audit function. • Reviewed an Internal Audit report and the FY24 Internal Audit plan. • Noted audit update report from PricewaterhouseCoopers (PwC). • Reviewed updates on the Group Finance function’s market visit to South Korea, IT general controls, Treasury, insurance, whistleblowing and compliance. • Reviewed early drafts of the Committee’s report and TCFD disclosures for the FY23 Annual Report. Late May 2023 • Reviewed FY23 draft Annual Report (including accounting judgements, going concern and viability, and whether the report was fair, balanced and understandable) and Full Year Results announcement. • Noted PwC’s external audit report. • Reviewed external auditor effectiveness. • Reviewed internal controls. • Reviewed Internal Audit and TCFD reporting updates. • Noted an update on the intended Audit and Assurance Policy approach. July 2023 – AGM Resolutions to re-appoint PwC as external auditor and renew the authority for the Directors to determine their remuneration formally approved by shareholders. September 2023 • Reviewedahalf-yearauditreview planningreportfromPwC. • NotedanupdatefromPwCon developingESGreportingand assurancerequirements. • NotedupdatesonInformation Securityandprojectstoimprove businesscriticalITsystems. • ReviewedanInternalAudit update,includingongoingwork onESGassurance. • Notedafurtherprogressupdate ontheITgeneralcontrolsactionplan. October 2023 Withdrawal of the Companies (Strategic Report and Directors’ Report) (Amendment) Regulations 2023 announced. November 2023 • Noted FY24 half year accounts (including accounting judgements and going concern) and Half Year Results announcement. • Reviewed the report on the half year audit review from PwC. • Reviewed an Internal Audit update. • Noted the withdrawal of the UK Government’s new reporting regulations and considered the implications on the Company. • Approved global AI and data retention policies at the recommendation of the Operating Committee. January 2024 • Reviewed an update from the Tax team, including tax strategy and horizon scanning. • Approved the FY24 tax strategy statement. • Reviewed and approved the FY24 external audit plan. • Reviewed an Internal Audit update, including risks and risk management. • Reviewed an update on data security maturity. • Reviewed the Committee’s terms of reference. • Reviewed the Non-Audit Services Policy. • Approved the Group-wide Conflicts of Interest Policy. • Approved the forward agenda planner for FY25. Post year-end • ReviewedAuditandRisk Committee,InternalAuditand externalauditoreffectiveness andtheFY24AnnualReport. • Oversawtheoperationsofthe FinancePanelestablishedtomanage theperiodwherenoCFOwasinsitu. AUDIT AND RISK COMMITTEE ACTIVITIES TIMELINE HOW THE COMMITTEE OPERATES TheCommitteemetfivetimesduringFY24, witheachmeetingattendedbyafull complementofCommitteemembers. Meetingsarescheduledtoalignwithkeydates intheGroup’sfinancialcalendarandin accordancewithaforwardplanner,developed bytheCommitteeChairandtheCompany Secretary.Thisprovidesclarityinrespectofthe plannedstructureoffutureagendasandthe mattersonwhichtheCommittee’sattentionwill focusoverthecourseoftheyear.Italsoassists theCommitteeinensuringitdevotessufficient timetodiscussingthekeytopicswithinitsremit anddischargingitsresponsibilitiesinfull. RepresentativesfromexternalauditorsPwCare invitedtoattendeachmeeting,togetherwiththe ChairoftheBoard,theChiefExecutiveOfficer, theChiefFinancialOfficer,TaraAlhadeff,the CompanySecretaryandtheHeadofInternal AuditandRisk.Thismeansthatamajorityof BoardmembersarepresentatCommittee meetings,whichconcludewithprivate, ‘in-camera’sessionswiththeCommitteeand PwCbutwithouttheExecutiveDirectorspresent. Outsideoftheannualcycleofscheduled meetings,theCommitteeChairwillregularly settimeasidetoseektheviewsofthe externalauditorsandtheHeadofInternal AuditandRiskonspecificmattersof relevanceorconcern.Additionally,the CommitteeChairmaintainsregulardialogue withtheChiefFinancialOfficer,Company SecretaryandothermembersoftheFinance andmanagementteamsbetweenmeetings. COMPETITION AND MARKETS AUTHORITY (CMA) ORDER COMPLIANCE TheCommitteeconfirmsthattheCompany hascompliedwiththeprovisionsofthe StatutoryAuditServicesforLargeCompanies MarketInvestigation(MandatoryUseof CompetitiveTenderProcessesandAudit CommitteeResponsibilities)Order2014 throughoutitsfinancialperiodended31March 2024anduptothedateofthisReport. GOVERNANCE UPDATES TheCommitteeiskeptupdatedonany developmentswithintheaudit,corporate governance,reportingandregulatory landscapesthatareofrelevancetoaudit committeesbytheexternalauditor.During theyear,theCommitteealsoreceived updatesonarangeoftopicsincluding: • DevelopingstandardsinESGreportingand initialconsiderationsinrespectofpreparingthe businessforincomingCSRDrequirements. • ThewithdrawalinOctober2023ofdraft corporatereportingregulationsandthe relatedinitiativesthebusinessintendedto continueona‘noregrets’basis,fromESG assurancetofurtherdevelopmentofinternal controlsandfraudriskmanagement. GOVERNANCE 137DR. MARTENS PLC ANNUAL REPORT 2024 FINANCIAL AND NARRATIVE REPORTING FULL AND HALF YEAR RESULTS AkeyelementoftheCommittee’sroleisto assisttheBoardinitsoversightofthequality andintegrityofDr.Martens’reportingandits accountingpoliciesandpractices.Assuch, theCommitteereviewedboththisFY24 AnnualReportandthehalfyearaccounts priortotheirpublicationinNovember2023 onbehalfoftheBoard. Inlinewithitstermsofreference,the CommitteemonitoredtheGroup’syearend andhalfyearreportingprocessestoensure thatDr.Martensprovidedaccurate,timely financialresultsandthatappropriate accountingstandardsandjudgementswere implementedeffectively.Indoingso,the Committeereceivedanddiscussedreports fromrelevantmembersoftheleadershipteam, includingreportsontheGroup’smanagement ofriskandinternalcontrols,long-termviability, goingconcernand,inrelationtotheFY24 AnnualReportspecifically,theworkthathad beenundertakentoensurethereportwas fair,balancedandunderstandable. Italsoreceivedanddiscussedregular reportsfromtheexternalauditor. SIGNIFICANT FINANCIAL REPORTING ISSUES, JUDGEMENTS AND ESTIMATION UNCERTAINTY TheCommitteeexercisesitsjudgementin determiningtheaccountingmattersthatare ofparticularsignificancetothefinancial statements.Anysuchmattersaresubjectto discussionsbetweentheSeniorLeadership Team,includingtheChiefFinancialOfficer andDirectorofFinanceControl,andthe externalauditoraspartoftheauditprocess. Subsequenttotheyearend,theCommittee receivedreportsfromtheleadershipteamin relationtosignificantaccountingissues, judgementsandkeysourcesofestimation uncertainty,significantaccountingpoliciesand proposeddisclosuresintheFY24Annual Report.TheCommitteeissatisfiedthateach hasbeenappropriatelyaddressedbythe businessandreviewedbytheexternalauditor. Assuch,theCommitteebelievesthatthe judgementsmadearereasonable,thatsuitable accountingpolicieshavebeenadoptedand appropriatedisclosureshavebeenmadein theaccounts.Detailsofsignificantfinancial accountingissuesandareaswherejudgement wasexercisedinrelationtotheFY24financial statementsaresetoutinthetableonpages 140 and 141. FAIR, BALANCED AND UNDERSTANDABLE Akeygovernancerequirementisforthe BoardtoensurethattheAnnualReport andfinancialstatements,takenasawhole, arefair,balancedandunderstandableand providetheinformationnecessaryfor shareholderstoassesstheGroup’sposition, performance,businessmodelandstrategy. Toassistinmakingthisdetermination, theBoardhasrequestedtheadviceofthe Committee.Theprocesswefollowedas aCommitteeinmakingourassessment issetoutinthetabletotheright. GOING CONCERN AND LONG-TERM VIABILITY TheCommitteereviewedtheGroup’sgoing concernandlong-termviabilitydisclosures inthisAnnualReport,togetherwiththe reportspreparedbytheleadershipteam insupportofeachstatement,andadvised theBoardontheirappropriateness. Aspartofitsreview,theCommittee consideredtheGroup’sfutureprospects withreferencetoforward-lookingviews onrisk,viabilityandplanning,considering amongotherthingsanumberofscenarios modelledbythebusinesstoassessthe strengthoftheGroup’sfinancing arrangementsandcovenantcompliance. Thegoingconcernandlong-termviability statementswerealsoreviewedbythe externalauditorandtheirfindingsreported backtotheCommittee.TheCommittee alsoreviewedanddiscussedthe conclusionsunderpinningeachofthe statementsthathadbeendrawnbythe SeniorLeadershipTeam. GOING CONCERN AND VIABILITY P44 BOARD FIRST REVIEW The Board received an early draft of Strategic Report (including the Sustainability Report) and Governance Report to allow for feedback and guidance on the messaging, narrative tone and overall consistency. Any narrative or financial disclosures that the Committee believed required additional information or clarification were highlighted and the necessary edits made during the subsequent drafting phase. EARLY DRAFT ANNUAL REPORT MANAGEMENT REPORTS TO THE COMMITTEE The Committee reviewed papers from the Group Finance function relating to the financial statements and narrative reports, covering key areas of accounting judgement, growth projections and going concern. FAIR, BALANCED AND UNDERSTANDABLE REVIEW The Committee considered a dedicated ‘fair, balanced and understandable’ paper from management identifying the key narrative themes of the ‘front half’ of the Annual Report, where these were located throughout the document and how the project team had sought to ensure these themes were consistent with the financial statements in the ‘back half’ of the Annual Report. INDEPENDENT AUDITOR’S REVIEW The findings of the FY24 audit, presented to and discussed with the Committee by PwC, concurred that management’s assessment that the Annual Report was fair, balanced and understandable was consistent with the financial statements and PwC’s knowledge obtained during the audit. SECOND DRAFT ANNUAL REPORT Having completed its assessment, the Committee concluded that the disclosures throughout the Annual Report and financial statements, as well as the processes and controls underlying its production, were appropriate and that the FY24 Annual Report and financial statements were fair, balanced and understandable, allowing the Committee to provide positive assurance to the Board to assist it in making the statement required by the Code. The Board’s formal statement in respect of fair, balanced and understandable can be found on page 138. RECOMMENDATION TO THE BOARD 138 DR. MARTENS PLC ANNUAL REPORT 2024 AUDIT AND RISK COMMITTEE REPORT CONTINUED IT controls are a key part of the Company’s overall control framework. How have these continued to develop over the past year? SincetheintroductionofanERP (EnterpriseResourcePlanning)system atDM’sanumberofyearsago,we’ve recognisedtheimportanceofstrongIT controls.Inthepastyear,we’vehadan initiativetostreamlineaccesscontrolsfor theERPsystem,whichisanimportant foundationforarobustcontrolframework. We’realsolookingatcontinuous improvementtogetthemostoutofour existingsystems,includingopportunities formoreautomationtoimproveefficiency andeffectivenessofcontrolsandprocesses. Cyber security risks are frequently noted as a top risk for many companies. How do you rate these for Dr. Martens and what are the key areas of focus for you and your team? OurCyberStrategyisalignedtoour DOCSbusinessstrategysittingspecifically undertheoperationalexcellencepillar. Wemeasureourcybersecuritymaturity againsttheNISTCyberSecurity Framework.WehaveachievedtheNIST maturitylevelagreedbytheBoard,and nowaretransitioningtothenewNIST2.0 frameworktoensurewecontinueour maturity.Focusareasforthenextyear includecontinuingoursecurityawareness programmetosupportingbehaviourchange acrosstheglobalbusiness,andfurther improvingourmonitoringcapabilityunder ournewExtendedManagedDetection andResponse(MXDR)service. Customer facing technology plays a pivotal role for the business and is paramount in delivering a great service. How do you ensure system downtime is kept to a minimum? Technology,andspecificallythestability ofourecommerceplatforms,playacrucial roleinsupportingourDTCchannel,which isalsoalignedtoourDOCSbusiness strategy.Ithinkwe’vedoneagoodjobof maintainingtheavailabilityofourwebsite, includingduringpeaktradingperiods.The focusforthenextyearistolookathowwe canfurtherimprovetheoverallcustomer experienceofouronlinechannel. With the technology landscape constantly evolving, what further investments is Dr. Martens making? Dr.Martensiscontinuallylookingtofurther strengthenandevolveourtechnology offering.Investmentscoveredbyourcurrent businesstransformationprogrammes includesupplychain,marketing,andfurther enhancingouromnichannelreach.Akey themeforalloftheseishowdowebetter captureandusedatatoinformbusiness decisionsandprovideanenhanced experienceforourcustomers. GRAHAM CALDER CHIEFTECHNOLOGYOFFICER The rise of generative AI is the latest example of how quickly today’s risk landscape evolves. We’ve officially entered a new generation of risk. GRAHAM CALDER Chief Technology Officer KEEPING PACE WITH TECHNOLOGICAL ADVANCEMENT What potential emerging technology risks and opportunities do you see for Dr. Martens in the short-term future? WeseeArtificialIntelligence(AI)asan opportunitytodrivechangeinareasofthe businesswherewecanworkquickerand smarter.Thefirststepshavebeentakenby settingpolicyandestablishingadedicated, internalAIforumaswelooktoexploitthis newageofopportunitywhileensuringany potentialrisksaremanagedappropriately. Q & A GOVERNANCE 139DR. MARTENS PLC ANNUAL REPORT 2024 SIGNIFICANT AREA HOW THIS WAS ADDRESSED Revenue recognition Revenueaccountingpoliciesandrecognitioncriteriaareassessedinrelationtothethreekeystreams:ecommerce, retailandwholesale.Anelementofestimationandjudgementisinvolvedinrelationto: • cut-offandwhatproportionofrelevantecommerceandwholesalesaleshavenotyetbeenreceivedbythecustomer atyearenddateandshouldnotberecognisedasrevenue; • thereturnsprovisionsandtheaccountingrequirementsinrelationtovariableconsiderationunderIFRS15; Basedonreportsanddiscussionswithmanagementandtheexternalauditor,theCommitteereviewedandassessedthe timingofrevenuerecognitionunderIFRS15andissatisfiedthatthejudgementsmadewerereasonableandappropriate. Inventory, valuation and provisions Inventoryprovisioningrequiressignificantjudgementonwhichinventorylinesshouldbeclassedasobsolete.Inventory age,historicalsalespatternsandtradingforecastsareusedwhenclassifyinginventorylinestobeprovidedagainst. Thisisreassessedquarterlyinrelationtothechangingexternalandinternalenvironment. InlightofcontinuedelevatedinventorylevelswithintheGroup,theCommitteehasconsideredthevalueofcontinuity inventoryatyearendtogetherwiththehighmarginnatureoftheproduct.Ithasalsoreviewedthekeyprovision assumptionsmade,includingwhereseasonalornon-continuityproductswerediscountedandsoldinFY24,thatthey achievedpricesinexcessoforiginalcost.TheCommitteewassatisfiedthattheprovisioncalculationhasbeen determinedinlinewiththeGroupframeworkandthattheoverallinventoryprovisionasaproportionofgrossinventory isappropriate. Defined benefit pension scheme AirwairInternationalLimitedoperatesapensionarrangementcalledtheDr.MartensAirwairGroupPensionPlanwhich hasadefinedbenefitsectionwithinit.Thisclosedtonewmembersin2002andtofutureaccrualfromJanuary2006. Theschemehasbeeninasurplusforseveralyears. Therecognitionofthepensionschemesurplusisanareaofaccountingjudgementwhichdependsontheinterpretationof theSchemeRulesandtherelevantaccountingstandardsincludingIAS19andIFRIC14.Thesurplusunderthescheme isnotrecognisedasanassetbenefittingtheGroupontheBalanceSheet,astheGroupbelievesthereisuncertaintyin relationtotherecoverabilityofanysurplus,andisthereforeunlikelytoderiveanyeconomicbenefitsfromthatsurplus.In theGroup’sviewthereisuncertaintyoverwhethertheSchemeRulesprovidetheGroupwithanunconditionalrighttoa refundofthesurplusfromtheschemeduetothird-partydiscretionaryinvestmentpowerswhichcoulduseupanysurplus priortowind-up.Consistentwithpreviousyears,giventhisuncertainty,theGrouphasrestrictedthepensionscheme surplustozero;thesurplusof£9.1m(31March2023:£11.1m)hasbeenrestrictedto£nil(31March2023:£nil).The Committeehasconsideredtheactuarialvaluationreportandrelatedassumptions,corroboratedbytheworkperformed bytheexternalauditor’sactuarialteam,andbelievesthattherelateddisclosuresareappropriate. Carrying value of non-financial assets TheCommitteeconsideredtheassessmentsmadebymanagementinrelationtothecarryingvalueofnon-financial assets,whichrequiretheuseofestimatesoffuturecashflowsanddiscountratesinordertoassesswhetherany impairmentshouldbeappliedtothecurrentcarryingvalue. TheCommitteereceivesdetailedannualreportsfrommanagementontheimpairmentreviewsundertakenbytheGroup inrelationtoretailstores,goodwillandinvestment.TheseoutlinedtheGroup’sapproachtoandtreatmentofimpairment testing,applicablevaluationmethodologiesandtherationaleformanagement’sunderlyingassumptions(forexample, discountratesandtheallocationofgroupsupportcoststostores).Theassumptionsandprojectionspresentedby managementwerereviewedbytheCommitteeandchallengedwherenecessary,withreferencetoinformationprovided bythemanagementreportsanddetailedreportingprovidedbyPwC.Basedonitsreview,theCommitteeissatisfiedthat therelevantassumptionsandprojectionsareappropriate. NoimpairmentswerenotedbymanagementfortheFY24reportingperiodandtheCommitteeissatisfiedthatthe Group’sconclusionsareappropriate. Corporation tax ThereisjudgementinvolvedindeterminingtheGroup’scorporationtaxprovision.TheGrouprecognisesliabilitiesfor anticipatedtaxissuesbasedonestimatesofwhethertaxeswillbedue.Wherethefinaltaxoutcomeofthesemattersis differentfromtheamountsthatwereinitiallyrecorded,suchdifferenceswillimpactthecurrentanddeferredtaxassets andliabilitiesintheperiodinwhichthedeterminationismade.Managementjudgementisrequiredtodeterminethe amountofdeferredtaxassetsthatcanberecognised,baseduponthelikelytimingandleveloffuturetaxableprofits togetherwithanassessmentoftheeffectoffuturetaxplanningstrategies.TheCommitteehasreviewedthejudgement exercisedbymanagementinthisareaandhasdeterminedthatthetaxationchargeisappropriate. Going concern and viability Basedonpaperspreparedbymanagement,theCommitteeperformedadetailedreviewoftheGroup’sprojected cashflows,borrowingcapacityandthecovenantswithinitsborrowingfacilitiesoverathree-yearperiod(ourviability assessmentperiod).TheapproachwasdiscussedandagreedbytheCommitteeinMay2024byreviewingtheGroup’s financialpositionandperformance,budgetsforFY25andthree-yearcashprojections,whichwerestresstestedunder differentscenarioshavingregardtotheprincipalrisksfacedbythebusiness.Furtherdetailsofthescenarios,including a‘severebutplausible’scenarioandconsiderationofpotentialmitigations,aresetoutonpage45. TheCommitteereportedtotheBoardthat,initsview,thegoingconcernassumptionremainedappropriate. 140 DR. MARTENS PLC ANNUAL REPORT 2024 AUDIT AND RISK COMMITTEE REPORT CONTINUED EXTERNAL AUDITOR Audit firm: PricewaterhouseCoopers LLP(PwC) Date appointed: 13July2022 Lead partner: JonathanSturges Lead partner tenure: 2years Total fees in FY24: £2.5m(FY23:£2.0m),of which£0.2m(FY23: £0.1m)relatedto non-auditservices) EXTERNAL AUDITOR EFFECTIVENESS TheCommittee’sresponsibilityforoverseeing therelationshipbetweentheGroupandthe externalauditorincorporatesanadditionalduty toreviewtheexternalauditor’sindependence, objectivityandoveralleffectiveness. TheCommitteereceivedacomprehensive auditplanfromPwCsettingoutthe proposedscopeandareasoffocusforthe FY24audit,aswellastheirassessmentof thekeyareasofrisktheyhadidentified.The auditplanandtheareasofriskidentified bytheauditorwerereviewedand,where appropriate,challengedbytheCommittee toensuretheunderlyingassumptionsand estimateswererobust. Afterthefinancialyearend,theCommittee conductedareviewoftheeffectivenessof PwCanditsworkduringtheFY24audit. AsessionledbytheCommitteeChair, attendedbymembersoftheCompany’s globalfinanceleadershipteamsand dedicatedtodiscussingtheeffectiveness ofPwC,washeldinadvanceofthe Committee’smeetingon22May. Toframethesediscussionsandensurethe keytopicswerecovered,atailoredlistof questionsfocusingon,amongotherthings, theaudittransitionandFY24auditplan,the workingrelationshipwithandqualityofthe PwCteam,PwC’sunderstandingofthe businessmodelandindustry,management ofanyissuesidentified,auditprocessand anyparticularareasofexcellenceand/or challenge,wascirculatedtoattendeesin advance.Feedbackfromthesession, togetherwithrelevantspecificexamples,was subsequentlydiscussedbytheCommittee. TheCommitteealsoconsideredthequalityof communicationandreportingitreceivedfrom PwCduringtheyear,withaparticularfocus onareasofsignificantjudgementandhow theyhadaddressedhigherriskareassuchas inventoryprovisions,storeimpairmentand thegoingconcernandviabilityassessment. ThereviewacknowledgedthatPwChad approachedtheauditwithpragmatism, flexibilityandaclearemphasisonworking withtheCompanytoresolveissues,which togetherwithincreasedrelianceonITgeneral controlsandfurtheradoptionofdigitalaudit procedures,hadbeenappreciatedbythe Dr.Martensteam.ItfoundthatPwChad establishedagoodunderstandingofthe Dr.Martensbusinessandhadformedgood workingrelationshipswiththeDr.Martens teams.Therehadbeenahealthydegreeof challengefromPwCinkeyareasduringthe auditandinrespectofmanagement’s assumptions,estimationsandjudgements. ThePwCteamwasconsideredtobehighly visible,organisedandsupportive.Looking aheadtotheFY25audit,therewouldbe opportunitiesforPwCtofurtherdeepen theirunderstandingofthebusinessandto continuetoembedtheirwaysofworking. EXTERNAL AUDITOR INDEPENDENCE AND NON-AUDIT SERVICES POLICY TheCommitteeoverseestheprocessfor approvinganynon-auditworkundertakenby theexternalauditortoensuretheCompany doesnotimpairorcompromiseitsobjectivity, effectivenessorindependenceand thatengagementsatisfiesallrelevant ethicalstandards. TheCompany’spolicygoverningthe provisionofnon-auditservicesbyits externalauditorreflectstheregulationsthat prohibitexternalauditorsfromundertaking certainnon-auditservices.AsDr.Martens isapublicinterestentity(PIE)byvirtueof itstransferablesecuritiesbeingadmittedfor tradingonaregulatedmarket,theexternal TheCommitteeconfirmsthat,overall, theexternalauditorwaseffectivein planningandexecutingtheFY24audit. CONFIRMATION auditorcanonlyprovideservicesonthe FRC‘whitelist’ofpermissibleservicesand thelevelofnon-auditfeesiscappedat70% oftheaverageGroupauditfeepaidbythe Companyoverthepreviousthreefinancial years.TheCompany’snon-auditservices policycomplieswiththeFRC’sRevised EthicalStandard(2019). Inmakinganydeterminationastowhether toappointtheexternalauditortoprovide certainnon-auditservicesthatarenot prohibited,theCommitteemustconsider: • whetheritsskillsandexperiencemake itasuitablesupplier; • whetherappropriatesafeguardsare inplacetoensurethereisnothreat toitsobjectivityandindependence; • thenatureoftheservicetobeprovided, includingfeesbothindividuallyand inaggregaterelativetotheauditfee; • theapplicationofanyrelevantRevised EthicalStandardissuedbytheFRC. AUDIT FEES Feesrelatingtoservicesperformedby theexternalauditorarereportedtoand approvedbytheCommittee.Detailsoffees paidtoPwCinrelationtotheFY24auditcan befoundinthetableonpage141andinnote 5totheFinancialStatementsonpage177. Thefeesfornon-auditservicesperformed byPwCduringFY24,whicharedisclosed onthispage,relatedtoworkundertakenfor thehalfyearreview,provisionofturnover certificates,accesstoPwCViewpoint(online accountingandreportinginformation platform)andanextendedstatutoryreview forDr.MartensAirwairDenmarkApS. TheCommitteeconfirmsitreviewed anddiscussedfeesfortheFY24audit andpermittednon-auditservices withPwC(assetoutonthispage), consideredthemtobeappropriate andsubsequentlyapprovedthem. CONFIRMATION GOVERNANCE 141DR. MARTENS PLC ANNUAL REPORT 2024 INTERNAL AUDIT, RISK AND INTERNAL CONTROL ROLE OF THE INTERNAL AUDIT FUNCTION TheremitoftheGroup’sInternalAudit functionincludesresponsibilityfor reviewing,appraisingandreportingon: • theadequacyandeffectivenessofthe Group’ssystemsofoperationalcontrols, includingoutsourcedservices,financial controls,andmanagementcontrolsand theiroperation; • theintegrityofprocessesandsystems, includingthoseunderdevelopment,to helpensurethatcontrolsofferadequate protectionagainsterror,fraudandloss; • theGroup’spolicies,standardsand proceduresincludingtheiruseand appropriateness; • theoperationoftheGroup’scorporate governanceandriskmanagement arrangements;and • significantaspectsoftheGroup’sactivity includingmajorprojectsandasdirected bytheCommittee. Additionally,theHeadofInternalAudit andRiskcontinuestochairtheCompany’s OperationalRiskCommittee,whichhas day-to-dayresponsibilityforoverseeingthe GroupRiskRegisterandthedevelopment andimplementationoftheGroup’sapproach torisk. Therangeofinternalauditsledbythe InternalAuditfunctionduringtheyear weresetoutintheFY24InternalAuditplan andagreedwiththeCommittee.Where additionalexpertiseorresourcewas requiredinrespectofcertainreviewswithin thisplan,theInternalAuditfunctionwas closelysupportedbyco-sourcepartners. TheCommitteereceivedupdatesfrom theInternalAuditfunctionateachofits meetingsduringtheyear.Itreviewed: • Regularupdatesonthestatusofthe FY24InternalAuditplan. • Detailedreportsontheprocess,findings andlearningsofspecificinternalaudits. • TheGroupRiskRegisterandarisk managementupdate. • Thenature,scopingandresourcing ofplannedfutureaudits. • Theoutcomesofinternalauditand riskworkwiththeSupplyChainteam, includingcontrolsoverinventory. • Progresswiththemonitoringofongoing improvementstoITcontrols. Additionally,theInternalAuditfunctionworked closelyduringtheyearwithmanagementand theCommitteeChairontheInternalAudit planforFY25.Theapproachtoshapingthis planwasunchangedfrompreviousyears; specifically,itwasformulatedwithreference toDr.Martens’strategicplansandobjectives andinconsiderationoftopicsofparticular importanceorrelevance,theprincipalrisks facingthebusinessandthewidereconomic andregulatoryclimate. DuringFY25,reviewsareplannedcovering assuranceoverkeyrisksandcontrols, programmeandprojectassurance,andrisk managementactivities. INTERNAL AUDIT EFFECTIVENESS TheCommittee’sreviewoftheInternal AuditfunctionduringFY24concludedthatit remainedeffective,possessedagoodlevel ofexperienceandknowledgeandhad establishedstrongworkingrelationships withseniormanagementandtheexternal auditor.ItalsofoundthatInternalAudithad madegoodprogressindrivingimproved focusamongotherbusinessfunctionson theirkeyrisksandthatopportunitiesto continuetostrengthenitsconnectionswith thewiderorganisationwerebeingactioned. InadditiontoattendingCommittee meetings,theHeadofInternalAuditand RiskmeetsregularlywiththeChairofthe Committee,withoutthepresenceof management,andalsomeetswithother membersoftheCommitteeandwiththe externalauditpartner,asnecessaryand appropriate.Additionally,allmembersofthe Committeeareentitledtorequestameeting withtheHeadofInternalAuditandRisk todiscussrisk,controlandauditmatters. Overall,theCommitteeissatisfied thattheInternalAuditfunction continuestooperateeffectivelyand demonstratestheappropriatedegree ofquality,experienceandexpertise forthebusiness. CONFIRMATION The role of the Committee relating to internal control and risk management is set out in the table below: PLC Board • Provides oversight of and is ultimately accountable for risk. • Assesses the principal and emerging risks facing the Group. • Monitors the Group’s overall risk management and internal control systems. • Annually reviews the effectiveness of the systems of risk management and internal control. Audit and Risk Committee • Reviews the effectiveness of the Group’s internal financial controls. • Receives reports from management on the effectiveness of the Group’s systems and the conclusions of any testing undertaken. • Reviews and approves statements in the Annual Report in relation to internal control and management of risk. Leadership SupportedbyInternalAudit,is responsiblefor: • Theidentification,assessment, managementandmonitoring ofriskonaday-to-daybasis. • Developing,operatingandmonitoring systemsofinternalcontrol. • ProvidingassurancetotheBoard, throughtheAuditandRisk Committee,thatithasdoneso. RISK  MOREINFORMATIONABOUT OUR APPROACH TO RISK MANAGEMENT ISAVAILABLEONP38 142 DR. MARTENS PLC ANNUAL REPORT 2024 AUDIT AND RISK COMMITTEE REPORT CONTINUED ASSESSMENT OF THE GROUP’S SYSTEM OF INTERNAL CONTROL AND RISK MANAGEMENT FRAMEWORK TheGroup’sprocessesforassessingand managingsignificantbusinessrisks,including itsprincipalrisksanduncertainties,isa keyareaoffocusfortheCommittee. ActivityisdrivenprimarilybytheCompany’s assessmentofitsprincipalrisksand uncertainties,assetoutonpages40to43. TheCommitteereviewedtheGroup’srisk managementandinternalcontrolsystems throughreportsandupdatespresentedtoitby managementatitsmeetingsduringtheyear. TheCompanyhasestablishedaninternal controlenvironmenttoprotectthebusiness fromthematerialriskswhichhavebeen identified.Managementisresponsiblefor establishingandmaintainingadequate internalcontrolsoverfinancialreportingandfor ensuringtheeffectivenessofthesecontrols. TheCommitteereceivesupdatesoninternal controlmattersthroughreportsfromthe InternalAuditfunction,ensuringthatissues areidentifiedinatimelyfashion,thatremedial actionistakenintheeventthatcontrolfailures orweaknessesareidentifiedandthatprogress canbemonitoredbytheCommittee. TheCommitteeChairupdatestheBoard verballyateachsubsequentBoardmeeting onthekeyissuesdiscussedbythe Committeeortomakeanyrecommendations onmattersthatfallwithintheCommittee’s remit.AllBoardmembersaregivenaccess toCommitteepapers,reportsandsupporting materials.Boardmemberswhoarenotalso membersoftheCommitteeareinvitedto attendCommitteemeetingsasappropriate tooffertheirvaluableinputandexpertise.As such,allBoardmembersarekeptuptodate ontheCommittee’sdiscussionsrelatingto riskmanagementandsystemsofinternal control,aswellasonitsactivitiesgenerally. TheCommitteeconfirmsthatitidentifiedno significantfailingsorweaknessesthatmay significantlyimpactthefinancialstatements. FurthertotheCommittee’sreview,the BoardissatisfiedthattheCompany’s systemsofinternalcontrolandrisk managementcontinuetobeeffective,in accordancewiththerequirementsofthe FRCGuidanceonRiskManagement, InternalControlandRelatedFinancial andBusinessReporting. CONFIRMATION ANTI-BRIBERY, FRAUD AND CORRUPTION TheBoardhasdelegatedresponsibilityfor reviewingtheGroup’ssystemsandcontrols forpreventingbriberyandcorruptiontothe Committee,withsupportprovidedbythe InternalAuditandCompliancefunctions. Dr.MartenshasinplaceaclearAnti-Bribery andCorruptionPolicywhichformspartof itsglobalcodeofconduct,the‘DOCtrine’. Employeesareissuedwithacopyofthe DOCtrineintheirlocallanguageatthetime theyjointhebusinessandmaterialsrelating totheDOCtrineareavailableforgeneral accessviatheCompany’sinternalintranet, ‘Backstage’.TheCompany’scompliance trainingprogrammealignswiththe DOCtrineandtheglobalpoliciesthatit refersto,ensuringourpeopleunderstand theirresponsibilitiesinmattersincluding preventingbriberyandcorruption. TheCommitteemaintainsoversightof thecontrolstheCompanyhasinplace tomitigatefraudrisk.Itreceivedareport fromtheInternalAuditfunctionduring theyear,whichconfirmedthatnofailings orsignificantweaknessesinthecontrol environmenthadbeenidentified. TheCommitteeissatisfiedthatthe Company’sprocesses,systemsand controlsrelatingtoanti-bribery,fraud andcorruptionremainappropriate andaresufficientlyembeddedand wellunderstoodacrossthebusiness. CONFIRMATION WHISTLEBLOWING TheCommitteeisresponsibleforensuring theCompanyhasinplaceeffectivepolicies andprocedurestoensurethatissuescanbe raised,investigatedandactedupon.These proceduresaresetoutintheCompany’s ‘SpeakUp’Policy,whichdetailstheprocess bywhichemployeesareabletosafely raiseconcernsaboutsuspectedillegalor unethicalbusinesspractices.Aconfidential incidentreportingfacilityisavailable, providedbyanindependentspecialistfirm, fortheanonymousreportingofconcerns. Thepolicysitsalongside,andisreferenced in,theDOCtrineandissupportedbyclear, concisemessagingwithinouremployee trainingandinternalcommunicationsto raiseawarenessofitsexistence. TheCommitteereceivesupdateson whistleblowingactivity,includingincidents, investigationsandoutcomes,withinitsregular reportsfromtheCompliancefunction. TheCommitteecontinuestobelievethe Company’sprocessesandprocedures inrelationtowhistleblowingare effective,appropriateandunderstood. CONFIRMATION GOVERNANCE 143DR. MARTENS PLC ANNUAL REPORT 2024 Directors’ Report TheDirectors’Reportfortheyearended31March2024comprises pages85to148and219totheIBCofthisAnnualReport,including anysectionsincorporatedbyreference.TheDirectors’Reportfulfils therequirementsoftheCorporateGovernanceStatementforthe purposesofDTR7.2.3R.Furtherinformationisavailableonline,in theGovernancesectionofwww.drmartensplc.com. TheStrategicReportcanbefoundonpages1to84.Inaccordance withSection414C(11)oftheCompaniesAct2006(the‘Act’),theBoard hasincludedcertaindisclosuresintheStrategicReportsetoutbelow: • Informationrelatingtofuturebusinessdevelopmentscanbe foundthroughouttheStrategicReport. • InformationrelatingtotheGroup’sprincipalrisksandrisk managementcanbefoundonpages38to43. • Thegoingconcernandlong-termviabilitystatementscan befoundonpages44and45. • DetailsofbranchesoperatedbytheCompanyaresetout onpages5and28and31. • TheCompany’sglobalgreenhousegasemissions,energy consumptionandefficiencyduringFY24canbefoundon page53oftheSustainabilityReport,whichislocatedwithin theStrategicReport. • Informationrelatingtoresearchanddevelopmentcanbefound onpages16to17and24to29oftheStrategicReportand56 to62oftheSustainabilityReport. • InformationonhowtheDirectorshavehadregardforthe Company’sstakeholders,andtheeffectofthatregard,canbe foundonpages18to21oftheStrategicReportandpages101 to105oftheGovernanceReport. • DisclosuresbasedontheprinciplesofTaskForceonClimate-related FinancialDisclosures(TCFD)aredetailedonpages75to83. Forinformationonourapproachtosocial,environmentaland ethicalmatters,pleaserefertotheSustainabilityReport,which canbefoundwithintheStrategicReportonpages46to74. Otherinformationwhichlegislationrequirestobedisclosedinthe Directors’Reportissetoutonthefollowingpages. TheStrategicReportandtheDirectors’Reporttogetherformthe ManagementReportforthepurposesoftheDisclosureGuidance andTransparencyRules(DTR)4.1.8R. Informationrelatingtofinancialinstrumentscanbefoundonpages 191to194andisincorporatedbyreference. BoththeStrategicReportandtheDirectors’Reporthavebeen drawnupandpresentedinaccordancewithandinrelianceupon applicableEnglishcompanylaw,andtheliabilitiesoftheDirectors inconnectionwiththosereportsshallbesubjecttothelimitations andrestrictionsprovidedbysuchlaw. Relating to the Board THE BOARD OF DIRECTORS TheDirectorswhoheldofficeduringtheyearended31March2024 andupuntilthedateofthisReportaresetoutbelow.Fullbiographical detailsofeachDirectorareprovidedonpages92to94. • GilesWilsonwasappointedon13May2024. • AndrewHarrisonwasappointedon1May2023. • IjeNwokorieresignedasDirectoron1February2024. • JonMortimoreresignedasDirectoron26March2024. TheappointmentandreplacementofDirectorsaregovernedbythe Company’sArticlesofAssociation(the‘Articles’),theUKCorporate GovernanceCode2024(the‘Code’),theActandrelatedlegislation. TheCompanymay,byordinaryresolution,declaredividendsnot exceedingtheamountrecommendedbytheBoard.Subjecttothe Act,theBoardmaypayinterimdividendsandalsoanyfixedrate dividend,wheneverthefinancialpositionoftheCompany,inthe opinionoftheBoard,justifiesitspayment. TheDirectorsmayfromtimetotimeappointoneormoreDirectors. TheBoardmayappointanypersontobeaDirector(solongasthe totalnumberofDirectorsdoesnotexceedthelimitprescribedinthe Articles).UndertheArticles,anysuchDirectorshallholdofficeonly untilthenextAnnualGeneralMeeting(AGM)wheretheywillstand forannualelection. ARTICLES OF ASSOCIATION AND POWERS OF DIRECTORS TheArticlessetouttherulesrelatingtothepowersoftheCompany’s Directorsandtheirappointmentandreplacement.TheArticlesmay onlybeamendedbyspecialresolutionatageneralmeetingofthe shareholders.SubjecttotheArticles,theActandanydirectionsgiven byspecialresolution,thebusinessoftheCompanywillbemanaged bytheBoardwhichmayexerciseallthepowersoftheCompany. DIRECTORS’ INDEMNITIES AND INSURANCE TheCompanymaintainedDirectors’andOfficers’liabilityinsurance coverthroughoutthereportingperiod,providingappropriatecover forlegalactionbroughtagainsttheDirectors.TheDirectorsmayalso obtainindependentlegaladviceattheCompany’sexpense,as necessary,intheircapacityasDirectors.TheCompanyhasentered intodeedsofindemnitywitheachDirector,whichprovidethatthe CompanyshallindemnifytheDirectorstothefullestextentpermitted bylawandtheArticles,inrespectofalllossesarisingoutof,or inconnectionwith,theexecutionoftheirpowers,dutiesand responsibilitiesasDirectorsoftheCompanyoranyofitssubsidiaries. COMPENSATION FOR LOSS OF OFFICE TherearenoagreementsbetweentheCompanyanditsDirectors oremployeesprovidingforcompensationforlossofoffice oremploymentthatoccursasaresultofatakeoverbid. DIRECTORS’ SHARE INTERESTS DetailsofDirectors’beneficialandnon-beneficialinterestsinthe sharesoftheCompanyareshownonpage129.Furtherinformation regardingemployeeshareschemesisprovidedinnote26tothe FinancialStatementsonpage196to199. DIRECTORS’ CONFLICTS OF INTEREST TheCompanyhasputinplaceproceduresformanagingconflicts ofinterest.Onbecomingawareoftheexistenceofanactualor potentialconflictofinterestimpactingthemselvesoranyperson closelyassociatedwiththem,theDirectorsarerequiredtoprovide detailstotheBoardforconsiderationand,ifappropriate,its authorisation.Ifaconflictisdeemedtoexist,therelevantDirector willexcusethemselvesfromconsiderationfordiscussionsrelating tothatconflict.Directorshaveacontinuingdutytoupdateany changestotheseconflicts. 144 DR. MARTENS PLC ANNUAL REPORT 2024 DIRECTORS’ REPORT RELATED PARTY TRANSACTIONS Internalcontrolsareinplacetoensurethatanyrelatedparty transactionsinvolvingDirectors,ortheircloselyassociated persons,areconductedonanarm’slengthbasisandare properlyrecordedanddisclosedwhereappropriate. DIRECTORS’ SERVICE CONTRACTS AND LETTERS OF APPOINTMENT DetailsoftheExecutiveDirectors’serviceagreementsand Non-ExecutiveDirectors’lettersofappointmentareavailable intheRemunerationReportonpage125. Relating to the Company’s share capital SHARE CAPITAL DetailsoftheCompany’sissuedsharecapitalaresetoutinnote23 tothefinancialstatementsonpage195.Asat31March2024,this comprisedasingleclassofordinarysharecarryingtherighttoone voteatgeneralmeetingsoftheCompany.Holdersofordinaryshares areentitledtoattendandspeakatgeneralmeetingsoftheCompany, toappointoneormoreproxiesand,iftheyarecorporations, corporaterepresentativestoattendgeneralmeetingsandto exercisevotingrights.TheArticlesprovideadeadlineforsubmission ofproxyformsofnotearlierthan48hoursbeforethetimeappointed fortheholdingofthemeetingoradjournedmeeting.However,when calculatingthe48-hourperiod,theDirectorscandecidenottotake accountofanypartofadaythatisnotaworkingday. Holdersofordinarysharesmayreceiveadividend,ifdeclared,and mayshareintheassetsoftheCompanyonitsliquidation.Holders ofordinarysharesareentitledtoreceivetheCompany’sAnnual ReportandAccounts. Subjecttomeetingcertainthresholds,holdersofordinaryshares mayrequisitionageneralmeetingoftheCompanyortheproposal ofresolutionsatAGMs. VARIATION OF RIGHTS Subjecttoapplicablestatutes,rightsattachedtoanyclassofshare (unlessotherwiseprovidedbythetermsofallotmentoftheshares ofthatclass)maybevariedorabrogatedwiththewrittenconsentof theholdersofatleastthree-quartersinnominalvalueoftheissued sharesofthatclass(excludinganysharesofthatclassheldin treasury),orbyaspecialresolutionpassedataseparategeneral meetingoftheshareholders,butnototherwise. RIGHTS AND OBLIGATIONS ATTACHING TO SHARES SubjecttotheprovisionsoftheCompaniesAct2006,andwithout prejudicetoanyrightsattachedtoanyexistingsharesorclassof shares,anysharemaybeissuedwithsuchrightsorrestrictionsas theCompanymaybyordinaryresolutiondetermineor,subjectto andindefaultofsuchdetermination,astheBoardshalldetermine. RESTRICTIONS ON TRANSFER OF SECURITIES InconnectionwiththeIPO,IngreLuxS.àr.l.andcertainpre-IPO shareholderswhoaremembersoftheGriggsfamilyenteredintoan OrderlyMarketingAgreement(towhichtheCompanyisnotaparty) regulatingthedisposalofsharesbyanyofthem,suchthatany disposalsofanyofthemfollowingtheIPOmaybecoordinatedand conductedinanorderlymanner.Thisagreementstipulatesthat,after theexpirationoftherestrictionsreferredtoabove,followingadisposalof sharesbyIngreLuxS.àr.l.,thepartiesagreethattheywillbeboundbya furtherlock-uponidenticaltermstotheequivalentlock-uptermsinthe UnderwritingAgreement(inthecaseofIngreLuxS.àr.l.)andintheSSE Deed(inthecaseoftherelevantpre-IPOshareholders)foraperiod of90calendardaysfromthedateonwhichthedisposalcompletes. Inadditiontothespecificrestrictionssetoutinthissection,there arethefollowingongoinggeneralrestrictionsonthetransferof sharesintheCompany: • certainrestrictionsapplywhichmayfromtimetotimebeimposed bylegislationandregulations(forexample,legislationrelatingto insiderdealing); • pursuanttotheCompany’ssecuritiesdealingcode,theDirectors andmembersoftheleadershipteamrequirepermissiontodeal intheCompany’sshares; • restrictionsapplywhereamember,oranyotherperson appearingtobeinterestedinsharesheldbysuchmember,with aninterestrepresentingatleast0.25%innominalvalueofthe issuedsharesoftheirclass,hasbeenservedwithadisclosure noticeunderSection793oftheActandhasfailedtoprovidethe Companywithinformationconcerninginterestsinthoseshares; • thesubscriberordinarysharesmaynotbetransferredwithout thepriorwrittenconsentoftheDirectors; • theBoardmay,initsabsolutediscretion,refusetoregisterthe transferofanyshareswhicharenotfullypaid,providedthat therefusaldoesnotpreventdealingsinsharesintheCompany fromtakingplaceonanopenandproperbasis; • theBoardmayalsorefusetoregisteratransferinfavourofmore thanfourtransferees;and • theBoardmayalsorefusetoregisterthetransferofan uncertificatedshareinthecircumstancessetoutinthe uncertificatedsecuritiesrules(asdefinedintheArticles). REPURCHASE OF OWN SHARES On14July2023,underauthoritiesgrantedbyshareholdersat theAGMheldon13July2023,theCompanyannouncedthe commencementofa£50msharebuybackprogramme.Atotal of39,869,135ordinaryshareswererepurchasedandcancelled duringtheprogramme,whichconcludedon19December2023. Thetotalconsiderationpaidforthesharespurchasedunderthe programme,excludingtransactioncosts,was£49,999,999.26. MAJOR SHAREHOLDERS Asat31March2024,theCompanyhadreceivednotificationofthe followinginterestsinvotingrightspursuanttoChapter5oftheDTR: Date notified % of voting rights 1 IngreLuxS.àr.l. 2 1December2023 38.102% GICPrivateLimited 31July2023 5.00% ArtemisInvestment ManagementLLP 11July2023 5.08% 3 BlackRock,Inc 24June2021 <5% 3 1. PercentagesareshownasapercentageoftheCompany’stotalvotingrightsas atthedatetheCompanywasnotifiedofthechangeinholding. 2. IngreLuxS.àr.l.’sshareholdingpassedthe38%notifiablethresholdasaresult ofthedecreasednumberoftotalordinarysharesintheCompanyduetotheshare buybackprogrammecommencedon14July2023. 3. Disclosuresmadepriortothe2023sharebuybackprogramme. Thisinformationwascorrectatthedateonwhichitwasnotified totheCompany.However,thedateofnotificationmaynothave beenduringtheyearunderreviewandfurthernotificationsarenot requiredtobemadeuntilthenextnotifiablethresholdiscrossed. Nochangestothepositionssetoutaboveandnonewpositions weredisclosedtotheCompanybetween31March2024andthe publicationofthisAnnualReport. GOVERNANCE 145DR. MARTENS PLC ANNUAL REPORT 2024 Relating to the Company PROFIT AND DIVIDENDS Theprofitforthefinancialyear,aftertaxation,amountsto£69.2m. Aninterimdividendof1.56pperordinarysharewasannounced on30November2023andpaidinFebruary2024inrelationto theperiodunderreviewandtheDirectorsintendtoproposethe Companypayafinaldividendfortheyearending31March2024 of0.99pperordinaryshare. Listing Rule Detail Page reference(s) 9.8.4R(1-2), (4),(7-13) Notapplicable N/A 9.8.4R(5-6) Waiversoffuture emoluments RemunerationReportpages 117,119,127and129 9.8.4R(14) (A-D) Agreements withcontrolling shareholder ‘Relationshipagreementwith controllingshareholder’,page 147,and‘Additionalstatement ofcompliancewithUKListing Rule9.8.4(14)’,below. ADDITIONAL STATEMENT OF COMPLIANCE WITH UK LISTING RULE 9.8.4 (14) SincetheCompany’sadmissiontolisting,ithascompliedwith theindependenceprovisionscontainedinUKListingRule 9.2.2ADR(1).SofarastheCompanyisaware,IngreLuxS.àr.l. anditsassociateshavealsocompliedwiththeseprovisions. SUBSIDIARIES AND PRINCIPAL ACTIVITIES TheCompanyistheholdingcompanyoftheDr.MartensGroupof companies(the‘Group’),theprincipalactivitiesofwhicharedescribed inthisAnnualReport.TheGroup’ssubsidiariesandtheirlocations aresetoutinnote13onpage215ofthefinancialstatements. EMPLOYMENT POLICIES TheCompanyhasinplaceanumberofpoliciescoveringimportant issuesincludingdiversity,equityandinclusion,equalopportunities andwellbeing.Wearecommittedtocreatinganenvironment whereourpeoplecanallbeproudtoworkand,todothis,weare anequalopportunityemployer.Allqualifiedapplicantswillreceive considerationforemploymentwithoutregardtorace,colour, religion,gender,genderidentityorexpression,sexualorientation, nationalorigin,genetics,disabilityorageandwetakeallreasonable stepstoensureequalityofopportunityinrecruitment,training, developmentandconditionsofwork.Personswithdisabilitiesand/ orhealthconditionsaregivenfullandfairconsiderationforavailable roles,havingregardfortheirparticularaptitudesandabilities,and wearecommittedtoprovidingreasonableaccommodationsfor qualifiedindividualswithdisabilitiesthroughoutourjobapplication process.Employeeswhobecomedisabledduringtheircareer atDr.Martenswillberetainedinemploymentwhereverpossible andtheCompanywillsupportthemintheirrehabilitationinthe workplaceandprovideanytrainingorretrainingwhereneeded. EMPLOYEE INVOLVEMENT Clearandopencommunicationwithourpeopleisfundamentally importanttoourcultureandtosecuringourlong-termsuccess. Weensureourpeopleacrossalltheregionsinwhichweoperate globallyarekeptwellinformedofourperformanceandstrategy andanysignificanteventsordevelopmentsimpactingthe business.Detailedinformationabouthowweinvolveourpeople atDr.MartenscanbefoundintheSustainabilityReport,the EmployeeengagementsectionoftheGovernanceReport(which detailstheworkofRobynPerrissasourEmployeeRepresentative Non-ExecutiveDirector)andthewiderStrategicReport,specifically onpages18,19,21and63to72. POLITICAL DONATIONS TheCompanydidnotmakeanypoliticaldonationsorincur anypoliticalexpenditureduringtheyearended31March2024. EXTERNAL AUDITOR Resolutionsproposingtore-appointPricewaterhouseCoopersLLP asauditoroftheCompanyandtoauthorisetheAuditandRisk Committeetodetermineitsremunerationwillbeproposedfor shareholderapprovalattheupcomingAGMinJuly2024. AGREEMENTS WITH CONTROLLING SHAREHOLDER SetoutintheDirectors’Reportinthesectionsentitled‘Relationship agreementwithcontrollingshareholder’onpage147,and‘Additional statementofcompliancewithUKListingRule9.8.4(14)’,left. CHANGE OF CONTROL DetailsofthesignificantagreementstowhichtheCompanyis partythattakeeffect,alterorterminateuponachangeofcontrol oftheCompanyfollowingatakeoverbidaresetoutbelow: Share plans:TheCompany’sshareplanscontainspecific provisionsrelatingtochangeofcontrol.Outstandingawardsand optionswillnormallyautomaticallyvestandbecomeexercisable orpayableonorfollowingachangeofcontrolarisingasaresultof ageneraloffertoacquirethewholeoftheCompany’sissuedshare capitaloracourtsanctionedcompromiseorarrangementunder Section899oftheAct,subjecttotherelevantperformance conditionsbeingmetatthattime. Available facilities:TheSeniorFacilitiesAgreementdated 27January2021betweentheGroupandvariousbanks,pursuant towhichtheGrouphasaccessto:(i)a€337.5mtermloanfacility; and(ii)a£200mmulti-currencyrevolvingcreditfacility,containing provisionsthat,intheeventoftheoccurrenceofachangeof controlevent,thebanksshallhave15businessdaystoexercise anindividualright:(i)tocancelallundrawncommitmentsonfive businessdays’notice;and(ii)on60days’noticetorequirethat alloutstandingparticipationsinutilisationsarerepaidwithaccrued interestandanyotherrelevantamountsaccrued. Relationship agreement:Detailsoftherelationshipagreement withIngreLuxS.àr.l.aresetoutintherelevantsectionofthis Directors’Reportonthenextpage.Therelationshipagreement ceasestoapplyiftheCompany’ssharesceasetobelistedon thepremiumlistingsegmentoftheOfficialListandtradedonthe LondonStockExchange’smainmarketforlistedsecurities,orif theholdingofIngreLuxS.àr.l.(togetherwithanyofitsassociates) ceasestocontrolortobeentitledtocontroltheexerciseof,in aggregate,10%ormoreofthevotesabletobecastonallor substantiallyallmattersatgeneralmeetingsoftheCompany. MODERN SLAVERY STATEMENT TheCompany’sModernSlaveryStatementisreviewedand approvedbytheBoardannuallyandpublishedonourcorporate website,inlinewithSection54(1)oftheModernSlaveryAct2015. ThestatementcoverstheactivitiesoftheCompanyandits subsidiariesanddetailspolicies,processesandactionswehave takentoensurethatslaveryandhumantraffickingarenottaking placeinoursupplychainsoranypartofourbusiness. Moreinformationonourstatementcanbefoundonourwebsite. 146 DR. MARTENS PLC ANNUAL REPORT 2024 DIRECTORS’ REPORT CONTINUED RELATIONSHIP AGREEMENT WITH CONTROLLING SHAREHOLDER TheCompany’slargestand,forthepurposesoftheListingRules, controllingshareholderisIngreLuxS.àr.l.,whichowns38.46%of theissuedsharecapitalofDr.Martensplcasatthedateofthis Report.IngreLuxS.àr.l.iswhollyownedbyfundsadvisedbyPermira AdvisersLLP,aglobalinvestmentfirm.InaccordancewiththeUK ListingRules,theCompanyandIngreLuxS.àr.l.haveenteredintoa relationshipagreement(the‘RelationshipAgreement’)toensurethat: 1. theGroupcancarryonanindependentbusinessasitsmainactivity; 2. anytransactionsandarrangementsbetweentheGroupand IngreLuxS.àr.l.(and/oranyofitsassociates)areatarm’slength andconductedonnormalcommercialterms; 3. neitherIngreLuxS.àr.l.noranyofitsassociateswilltakeany actionthatwouldhavetheeffectofpreventingtheCompany fromcomplyingwithitsobligationsundertheListingRules; 4. neitherIngreLuxS.àr.l.noranyofitsassociateswillpropose orprocuretheproposalofashareholderresolutionwhichis intendedorappearstobeintendedtocircumventtheproper applicationoftheListingRules;and 5.atalltimesamajorityoftheDirectorsoftheCompanyshall beindependentofIngreLuxS.àr.l. PursuanttotheRelationshipAgreement,IngreLuxS.àr.l.is alsoentitledtoappointoneNon-ExecutiveDirectortotheBoard andnominatethatindividualtobeamemberoftheCompany’s NominationCommitteeforsolongasit(togetherwithanyof itsassociates)controlsorisentitledtocontroltheexerciseof inaggregate10%ormoreofthevotesabletobecastonallor substantiallyallmattersatgeneralmeetingsoftheCompany. IngreLuxS.àr.l.’sfirstappointedrepresentativeisTaraAlhadeff, whosebiographycanbefoundonpage94),anditwillconsultin advancewiththeChairoftheNominationCommitteeregarding theidentityofanypersonproposedtobenominatedasa Non-ExecutiveDirectorinthefuture. PursuanttotheRelationshipAgreement,IngreLuxS.àr.l.has certaininformationrightsforthepurposesofitsaccounting,tax orotherregulatoryrequirements.Inaddition,theCompanymay requestthatPermiraAdvisersLLPprovidesitwithadvisory services.IngreLuxS.àr.l.hasundertakentokeepinformation itreceivesontheGroupconfidentialandinaccordancewith applicablelaw. TheRelationshipAgreementalsoprovidesfortheCompanyto provide,subjecttocertainlimitationsandexceptions,reasonable cooperationandassistancetoIngreLuxS.àr.l.intheeventofa saleofsharesbyIngreLuxS.àr.l.,andthatIngreLuxS.àr.l.will ensurethatanysuchsecondarysalesofsharesintheCompany areconductedinanorderlymanner. TheDirectorsbelievethatthetermsoftheRelationshipAgreement enabletheGrouptocarryonitsbusinessindependentlyofIngreLux S.àr.l.TheRelationshipAgreementwillcontinueforsolongas: 1. theCompany’ssharesarelistedonthepremiumlistingsegment oftheOfficialListandtradedontheLondonStockExchange’s MainMarketforlistedsecurities;and 2. IngreLuxS.àr.l.(togetherwithanyofitsassociates)controlsoris entitledtocontroltheexerciseofinaggregate10%ormoreofthe votesabletobecastonallorsubstantiallyallmattersatgeneral meetingsoftheCompany. WhileIngreLuxS.àr.l.,onitsownortogetherwithanypersonwith whomitisactinginconcert,holds30%ormoreofthevotesable tobecastonallorsubstantiallyallmattersatgeneralmeetings oftheCompany,itisconsidereda‘controllingshareholder’forthe purposesoftheListingRules.WhileIngreLuxS.àr.l.remainsa controllingshareholder,certainresolutions,suchasresolutions relatingtotheelectionofIndependentDirectorsorthecancellation oftheCompany’slisting,will,inordertobepassed,needtobe approvedbyboth: 1. amajorityofshareholdersvotingontheresolution;and 2. amajorityofshareholdersvotingontheresolutionexcluding IngreLuxS.àr.l. ANNUAL GENERAL MEETING TheCompany’sAGMwillbeheldatHolidayInn,30Jamestown Road,CamdenNW17BY,onThursday11July2024at9.30am. TheNoticeofMeeting,togetherwithexplanatorynotesand guidanceonvotingandarrangements,willincludedetailsof thebusinesstobeputtoshareholdersattheAGM. GOVERNANCE 147DR. MARTENS PLC ANNUAL REPORT 2024 Statement of Directors’ responsibilities in respect of the financial statements TheDirectorsareresponsibleforpreparingtheAnnualReport andthefinancialstatementsinaccordancewithapplicablelaw andregulation. CompanylawrequirestheDirectorstopreparefinancialstatements foreachfinancialyear.UnderthatlawtheDirectorshaveprepared theGroupfinancialstatementsinaccordancewithUK-adopted internationalaccountingstandardsandtheCompanyfinancial statementsinaccordancewithUnitedKingdomGenerallyAccepted AccountingPractice(UnitedKingdomAccountingStandards, comprisingFRS101‘ReducedDisclosureFramework’,and applicablelaw). Undercompanylaw,Directorsmustnotapprovethefinancial statementsunlesstheyaresatisfiedthattheygiveatrueandfair viewofthestateofaffairsoftheGroupandCompanyandofthe profitorlossoftheGroupforthatperiod.Inpreparingthefinancial statements,theDirectorsarerequiredto: • selectsuitableaccountingpoliciesandthenapplythemconsistently; • statewhetherapplicableUK-adoptedinternationalaccounting standardshavebeenfollowedfortheGroupfinancialstatements andUnitedKingdomAccountingStandards,comprisingFRS 101havebeenfollowedforthecompanyfinancialstatements, subjecttoanymaterialdeparturesdisclosedandexplainedin thefinancialstatements; • makejudgementsandaccountingestimatesthatarereasonable andprudent;and • preparethefinancialstatementsonthegoingconcernbasis unlessitisinappropriatetopresumethattheGroupand Companywillcontinueinbusiness. TheDirectorsareresponsibleforsafeguardingtheassetsofthe GroupandCompanyandhencefortakingreasonablestepsfor thepreventionanddetectionoffraudandotherirregularities. TheDirectorsarealsoresponsibleforkeepingadequateaccounting recordsthataresufficienttoshowandexplaintheGroup’sand Company’stransactionsanddisclosewithreasonableaccuracyat anytimethefinancialpositionoftheGroupandCompanyandenable themtoensurethatthefinancialstatementsandtheDirectors’ RemunerationReportcomplywiththeCompaniesAct2006. TheDirectorsareresponsibleforthemaintenanceandintegrity oftheCompany’swebsite.LegislationintheUnitedKingdom governingthepreparationanddisseminationoffinancial statementsmaydifferfromlegislationinotherjurisdictions. Directors’ confirmations TheDirectorsconsiderthattheAnnualReportandAccounts,taken asawhole,isfair,balancedandunderstandableandprovidesthe informationnecessaryforshareholderstoassesstheGroup’sand Company’spositionandperformance,businessmodelandstrategy. EachoftheDirectors,whosenamesandfunctionsarelistedinthe BoardofDirectorssection,confirmthat,tothebestoftheirknowledge: • theGroupfinancialstatements,whichhavebeenpreparedin accordancewithUK-adoptedinternationalaccountingstandards, giveatrueandfairviewoftheassets,liabilities,financialposition andprofitoftheGroup; • theCompanyfinancialstatements,whichhavebeenprepared inaccordancewithUnitedKingdomAccountingStandards, comprisingFRS101,giveatrueandfairviewoftheassets, liabilitiesandfinancialpositionoftheCompany;and • theStrategicReportincludesafairreviewofthedevelopment andperformanceofthebusinessandthepositionoftheGroup andCompany,togetherwithadescriptionoftheprincipalrisks anduncertaintiesthatitfaces. InthecaseofeachDirectorinofficeatthedatetheDirectors’ Reportisapproved: • sofarastheDirectorisaware,thereisnorelevantaudit informationofwhichtheGroup’sandCompany’sauditors areunaware;and • theyhavetakenallthestepsthattheyoughttohavetaken asaDirectorinordertomakethemselvesawareofany relevantauditinformationandtoestablishthattheGroup’s andCompany’sauditorsareawareofthatinformation. ThisresponsibilitystatementwasapprovedbytheBoard ofDirectorson29May2024. ByorderoftheBoard EMILY REICHWALD COMPANYSECRETARY 29May2024 Dr. Martens plc Companynumber:12960219 148 DR. MARTENS PLC ANNUAL REPORT 2024 DIRECTORS’ REPORT CONTINUED FINANCIAL STATEMENTS Independent Auditors’ Report 150 Consolidated Statement of Profit or Loss 160 Consolidated Statement of Comprehensive Income 161 Consolidated Balance Sheet 162 Consolidated Statement of Changes in Equity 163 Consolidated Statement of Cash Flows 164 Notes to the Consolidated Financial Statements 165 In this section: FINANCIAL STATEMENTS 149DR. MARTENS PLC ANNUAL REPORT 2024 REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS OPINION Inouropinion: • Dr.Martensplc’sGroupfinancialstatementsandParent Companyfinancialstatements(the“financialstatements”) giveatrueandfairviewofthestateoftheGroup’sandof theParentCompany’saffairsasat31March2024andof theGroup’sprofitandtheGroup’scashflowsfortheyear thenended; • theGroupfinancialstatementshavebeenproperly preparedinaccordancewithUK-adoptedinternational accountingstandardsasappliedinaccordancewiththe provisionsoftheCompaniesAct2006; • theParentCompanyfinancialstatementshavebeen properlypreparedinaccordancewithUnitedKingdom GenerallyAcceptedAccountingPractice(UnitedKingdom AccountingStandards,includingFRS101“Reduced DisclosureFramework”,andapplicablelaw);and • thefinancialstatementshavebeenpreparedinaccordance withtherequirementsoftheCompaniesAct2006. OuropinionisconsistentwithourreportingtotheAuditand RiskCommittee. Basis for opinion WeconductedourauditinaccordancewithInternational StandardsonAuditing(UK)(“ISAs(UK)”)andapplicablelaw.Our responsibilitiesunderISAs(UK)arefurtherdescribedintheAuditors’ responsibilitiesfortheauditofthefinancialstatementssectionof ourreport.Webelievethattheauditevidencewehaveobtainedis sufficientandappropriatetoprovideabasisforouropinion. INDEPENDENCE AND APPOINTMENT WeremainedindependentoftheGroupinaccordancewiththe ethicalrequirementsthatarerelevanttoourauditofthefinancial statementsintheUK,whichincludestheFRC’sEthicalStandard,as applicabletolistedpublicinterestentities,andwehavefulfilledour otherethicalresponsibilitiesinaccordancewiththeserequirements. Tothebestofourknowledgeandbelief,wedeclarethatnon-audit servicesprohibitedbytheFRC’sEthicalStandardwerenotprovided. OtherthanthosedisclosedinNote5totheconsolidatedfinancial statements,wehaveprovidednonon-auditservicestotheParent Companyoritscontrolledundertakingsintheperiodunderaudit. FollowingtherecommendationoftheAuditandRiskCommittee, wewereappointedbythememberson14July2022toauditthe financialstatementsfortheyearended31March2023and subsequentfinancialperiods.Theperiodoftotaluninterrupted engagementistwoyears,coveringtheyearsended31March2023 to31March2024. Wehaveauditedthefinancialstatements,includedwithinthe AnnualReport2024(the“AnnualReport”),whichcomprise: • theConsolidatedandParentCompanyBalanceSheetsas at31March2024; • theConsolidatedStatementofProfitorLoss, • theConsolidatedStatementofComprehensiveIncome, • theConsolidatedandParentCompanyStatementsof ChangesinEquity, • theConsolidatedStatementofCashFlowsfortheyear thenended;and • theNotestothefinancialstatements,comprisingmaterial accountingpolicyinformationandotherexplanatory information. TIMELINE OF ENGAGEMENT 14 July 2022 31 March 2023 31 March 2024 Appointed First year-end Current year-end Period of total uninterrupted engagement (2 years) 150 DR. MARTENS PLC ANNUAL REPORT 2024 INDEPENDENT AUDITORS’ REPORT TOTHEMEMBERSOFDR.MARTENSPLC Our audit approach OVERVIEW AUDIT SCOPE  Weperformedfullscopeauditsoffourcomponents;  Inaddition,forafurtherfourcomponents,weperformedauditprocedures onspecificaccountswithineachcomponentbasedoneitherthesizeorrisk profileofthoseaccounts;  SpecificauditproceduresinrelationtovariousGroupactivities,including overtheconsolidation,leases,sharebasedpayments,taxation,pensions andthecarryingvalueofbothgoodwillandassetsattributabletostores, wereperformedbytheGroupteamcentrally;and  WeperformedastatutoryauditoftheParentCompany. 4 full scope component audits 4 components with specific audit procedures KEY AUDIT MATTERS Valuationofinventory provisions(Group) YEAR ON YEAR: Consistent Carryingvalueofinvestmentin subsidiary(ParentCompany) YEAR ON YEAR: Consistent MATERIALITY Overall Group materiality basedon5%ofthethree-yearaverageofGroup profitbeforetaxwithafurtherhaircutapplied. £7.2M Overall Parent Company materiality basedon1%oftotalassets. £14.1M Performance materiality Group £5.4M £10.6M ParentCompany No longer a KAM Existenceofinventory attheLosAngeles(“LA”), USwarehouse(Group) FINANCIAL STATEMENTS 151DR. MARTENS PLC ANNUAL REPORT 2024 The scope of our audit Aspartofdesigningouraudit,wedeterminedmaterialityandassessedtherisksofmaterialmisstatementinthefinancialstatements. Key audit matters Keyauditmattersarethosemattersthat,intheauditors’professionaljudgement,wereofmostsignificanceintheauditofthefinancial statementsofthecurrentperiodandincludethemostsignificantassessedrisksofmaterialmisstatement(whetherornotduetofraud) identifiedbytheauditors,includingthosewhichhadthegreatesteffecton:theoverallauditstrategy;theallocationofresourcesinthe audit;anddirectingtheeffortsoftheengagementteam.Thesematters,andanycommentswemakeontheresultsofourprocedures thereon,wereaddressedinthecontextofourauditofthefinancialstatementsasawhole,andinformingouropinionthereon,andwe donotprovideaseparateopiniononthesematters. ExistenceofinventoryattheLosAngeles(“LA”),USwarehouse,whichwasakeyauditmatterlastyear,isnolongerincludedbecauseof thechangesmadebymanagementwithrespecttotheinventoryheldatthislocationanditssatellitewarehousesthroughoutthecurrent financialyear,whichmeantlessauditeffortwasspentonthismatter. Thisisnotacompletelistofallrisksidentifiedbyouraudit. Valuation of inventory provisions (Group) Background: Procedures performed: Refer to the Audit and Risk Committee report, Note 13 Inventories and Note 2.26 Significant judgements and estimates. TheGroupsellsavarietyoffootwearandaccessoryproductsandis subjecttochangingconsumerdemandsandfashiontrends,increasing thelevelofjudgementinvolvedinestimatinginventoryprovisions. Thesignificantmajorityofinventoryconsistsofthebusiness’score footwearproductlines.Thesearepredominantlybootsandshoes whichhavebeendesignedwithDr.Martens’brandingandhavebeen soldformanyyears.TheGroup’sinventoryprovisionisprimarily basedontheclassificationofinventoryproductlines,inventory ageandtheriskthatcertainproductscannotbesoldabovecost. Judgementisrequiredtoestimatefuturesalesforecastsandto assesswhetheralternativesalesstrategies,includingdiscounting, arerequiredtoclearexcessinventory. • Weperformedauditproceduresoverthisareainfivelocations, whichcovered93%ofthetotalGroupinventorybalanceand74% oftheinventoryprovisionrecognisedof£2.6million.Thisbalance includesallcategoriesofinventoryprovisions. • Weobtainedanunderstandingoftheinventoryprovisioning processineachoftheabovelocations,assessingtheconformity toGrouppolicy. • Werecomputedtheprovisioncalculationsbasedon management’smethodologyandsubstantivelytestedtheinputs tovalidatethecompletenessandaccuracyofthereportsusedto quantifytheprovisions,includingtestinginventoryclassification withintheprovisionworkings. • Wechallengedandvalidatedthekeyassumptionsappliedby managementtocalculatetheprovision,withparticularfocuson thelevelofinventorysoldbelowcostduringFY24. • Weperformedsensitivityanalysistoassessthesignificanceand riskofchangesinassumptionsontheprovisionamountinthe componentthatholdsthehighestvalueofinventoryprovision. • Weperformedinquiriesacrossthebusinessandobserveda sampleofinventorycountswithparticularfocusonverifyingthe obsoleteinventoryandagedinventorywhichmayhaveindicated thataprovisionmayberequired. Observations Wefoundthattheprovisionsrecordedwereconsistentwiththeevidenceobtained. 152 DR. MARTENS PLC ANNUAL REPORT 2024 INDEPENDENT AUDITORS’ REPORT TOTHEMEMBERSOFDR.MARTENSPLCCONTINUED 89% 83% 91% Carrying value of investment in subsidiary (Parent Company) Background: Procedures performed: Refer to Note 2 (Parent Company financial statements) for accounting policies and Note 6 (Parent Company financial statements) – Investments of the Parent Company financial statements. Investments are investments in subsidiaries. InaccordancewithIAS36,theParentCompany’sinvestments balanceshouldbecarriedatnomorethanitsrecoverableamount, beingthehigheroffairvaluelesscoststosellanditsvaluein use.IAS36requiresanentitytodeterminewhetherthereare indicationsthatanimpairmentlossmayhaveoccurredandifso, makeaformalestimateoftherecoverableamount. Thefallinsharepriceduringtheyearandthemacroeconomic challengesexperiencedacrossanumberoftheeconomieswhere theGroupoperateswereconsideredbymanagementtobean impairmentindicatortothecarryingvalueoftheinvestmentand, asaresult,animpairmentassessmentwasperformed.This includedpreparingaValueinUse(VIU)modelreflectingtheBoard reviewedbudgetforFY25andFY26,thefiveyearplanto31March 2029andthecashflowsintoperpetuityusinganestimated terminalgrowthrate. ThroughthisassessmentmanagementidentifiedthattheVIU exceededthecarryingvalueoftheinvestment,andtherefore concludedthatnoimpairmentwasrequired. • Weverifiedthemathematicalaccuracyofthecalculationsused, toestimatetheVIU. • SupportedbyourPwCvaluationsexpertsweindependently assessedmanagement’sdiscountrateforappropriatenessand comparedtherevenueandEBITDAmultipleofmanagement’s VIUmodeltosimilarcompanies. • Werequestedmanagementprovideinternalandexternalmarket evidencetosupportthekeyassumptionsintheVIUmodel.These wereassessedagainsthistoricalresultsandmanagement’s forecastingaccuracy,industryreportsandcostinflationmeasures. • Wesensitisedmanagement’sassumptionsintheVIUmodel, inparticulararoundtheforecastgrowthrate. • TheGroup’sestimateofrecoverableamount,although sensitivetochangesinassumptions,supportsthecarrying valueoftheinvestment. • WealsoevaluatedthedisclosuresinNote2–Accounting policiesandNote6–InvestmentsoftheParentCompany financialstatements,whichincludedsensitivities. Observations Weconsidermanagement’sconclusionthat,whilstindicatorsofimpairmentexisted,noimpairmentwasrequiredtobeappropriate. Wealsoconsidertheinclusionofsensitivitydisclosurestobeappropriate. How we tailored the audit scope Wetailoredthescopeofouraudittoensurethatweperformed enoughworktobeabletogiveanopiniononthefinancialstatements asawhole,takingintoaccountthestructureoftheGroupandthe ParentCompany,theaccountingprocessesandcontrols,andthe industryinwhichtheyoperate. Weidentifiedthreefinanciallysignificantcomponents,being AirwairInternationalLimited,Dr.MartensAirwairUSALLCand DrMartensAirwairWholesaleLimited,whereafullscopeaudithas beenperformed.Inaddition,attherequestofmanagementand theAuditandRiskCommittee,weperformedafullscopeauditon Dr.MartensAirwairJapanK.K.Toachievethecoveragedesired, weidentifiedafurtherfourcomponentswhereweperformedaudit proceduresonspecificaccountswithineachcomponentbased oneitherthesizeorriskprofileofthoseaccounts. Whereworkwasperformedbycomponentauditors,detailed instructionswereissuedbytheGroupauditteamandweconducted conferencecallswithcomponentteams.Forourfinanciallysignificant andmaterialcomponents,oversightproceduresincludedregular communicationwiththecomponentteam,reviewingtheirworking papers,andattendingtheclearancemeetingsvirtually.Forthefour componentswhereprocedureswereperformedonspecific accounts,theGroupauditteameitherperformedauditworkdirectly onthecomponent,orwerevieweddeliverablesreceivedand attendedclearancemeetingsoftheothercomponents.Specificaudit proceduresovercentralfunctionsandareasofsignificantjudgement, includingtheconsolidation,leases,sharebasedpayments,taxation, pensionsandthecarryingvalueofbothgoodwillandassets attributabletostores,wereperformedbytheGroupteamcentrally. The components where we performed audit procedures covered approximately: GROUP REVENUE GROUP PROFIT BEFORE TAX GROUP NET ASSETS USA • Fullscope auditofone component UK • Fullscope auditoftwo components JAPAN • Fullscope auditofone component Specifiedproceduresorauditofspecific accountsof4additionalcomponents FINANCIAL STATEMENTS 153DR. MARTENS PLC ANNUAL REPORT 2024 Materiality Thescopeofourauditwasinfluencedbyourapplicationofmateriality.Wesetcertainquantitativethresholdsformateriality.These,together withqualitativeconsiderations,helpedustodeterminethescopeofourauditandthenature,timingandextentofourauditprocedureson theindividualfinancialstatementlineitemsanddisclosuresandinevaluatingtheeffectofmisstatements,bothindividuallyandinaggregate onthefinancialstatementsasawhole. Basedonourprofessionaljudgement,wedeterminedmaterialityforthefinancialstatementsasawholeasfollows: Group Parent Company Overall materiality £7.2M FY23 £8.0m £14.1M FY23 £14.0m How we determined it 5% ofthethree-yearaverageofGroup profitbeforetaxwithafurther haircutappliedinthecurrentyear andfortheprioryear5%ofthe FY23Groupprofitbeforetax 1% of total assets Rationale for benchmark applied Weconsiderthemostappropriatebenchmarkon whichtocalculatematerialitywastheGroup’sprofit beforetaxasitisoneofthekeyindicatorsof financialperformanceoftheGroup.Weuseathree yearaveragefromFY22toFY24duetothevolatility ofearningsinFY24.Wethenapplyafurtherhaircut toreflectthedecreaseinperformanceseeninthe currentyear. AstheParentCompany,Dr.Martensplc,isaholding companyfortheGroupthematerialitybenchmark hasbeendeterminedbasedontotalassets,which isagenerallyacceptedauditingbenchmark. Performance materiality £5.4M FY23 £6.0m £10.6M FY23 £10.6m How we determined it 75% ofoverall materiality 75% ofoverall materiality Level above which we report to the Audit and Risk Committee £360,000 FY23 £400,000 £700,000 FY23 £700,000 Weagreedwewouldalsoreportmisstatementsbelowthoseamountsthat,inourview,warranted reportingforqualitativereasons. Component materiality £1.0M £6.8M ForeachcomponentinthescopeofourGroupaudit,weallocatedamaterialitythatislessthanouroverallGroupmateriality.Certain componentswereauditedtoalocalstatutoryauditmaterialitythatwasalsolessthanouroverallGroupmateriality. Weuseperformancematerialitytoreducetoanappropriatelylowleveltheprobabilitythattheaggregateofuncorrectedandundetected misstatementsexceedsoverallmateriality.Specifically,weuseperformancematerialityindeterminingthescopeofourauditandthe natureandextentofourtestingofaccountbalances,classesoftransactionsanddisclosures,forexampleindeterminingsamplesizes. Indeterminingtheperformancemateriality,weconsideredanumberoffactors–thehistoryofmisstatements,riskassessmentand aggregationriskandtheeffectivenessofcontrols–andconcludedthatanamountattheupperendofournormalrangewasappropriate. 154 DR. MARTENS PLC ANNUAL REPORT 2024 INDEPENDENT AUDITORS’ REPORT TOTHEMEMBERSOFDR.MARTENSPLCCONTINUED Inconsideringtheimpactofclimateriskonouraudit,we:  Madeenquiriesofmanagementtounderstandthe extentofthepotentialimpactofclimateriskonthe Group’sfinancialstatementsandweremainedalert whenperformingourauditproceduresforany indicatorsoftheimpactofclimaterisk;  Reviewedmanagement’sassessmentofclimaterisk totheGroupandtheimpact,ifany,onthefinancial statementsandimpairmenttesting.Managementhas soughtadvicefromexternalsustainabilityexpertsto helpthemunderstandtheenvironmentalchallenges theyfaceandtosourcescience-basedinputsfortheir assessmentofclimaterisk; The impact of climate risk on our audit  Readthedisclosuresinrelationtoclimateriskmade intheotherinformationwithintheAnnualReportto ascertainwhetherthedisclosuresarematerially consistentwiththeGroupfinancialstatementsand ourknowledgefromouraudit.Ourresponsibilityover otherinformationisfurtherdescribedintheReporting onotherinformationsectionofourreport;and  Inquiredofmanagementtounderstandandevaluate theGroup’sriskassessmentprocessinrelationto climatechange. OurproceduresdidnotidentifyanymaterialimpactasaresultofclimateriskontheconsolidatedandParentCompanyfinancialstatements. Our ability to detect irregularities, including fraud, and our response Irregularities,includingfraud,areinstancesofnon-compliance withlawsandregulations.Wedesignproceduresinlinewithour responsibilities,outlinedbelow,todetectmaterialmisstatements inrespectofirregularities,includingfraud.Theextenttowhichour proceduresarecapableofdetectingirregularities,includingfraud, isdetailedbelow. BasedonourunderstandingoftheGroupandindustry,weidentified thattheprincipalrisksofnon-compliancewithlawsandregulations relatedtoemploymentandtheUKListingRules,andweconsidered theextenttowhichnon-compliancemighthaveamaterialeffect onthefinancialstatements.Wealsoconsideredthoselawsand regulationsthathaveadirectimpactonthefinancialstatements suchastheCompaniesAct2006andtaxlegislation.Weevaluated management’sincentivesandopportunitiesforfraudulent manipulationofthefinancialstatements(includingtheriskofoverride ofcontrols),anddeterminedthattheprincipalriskswererelatedto postingofjournalsthatdidnotresultinanexpectedcombinationwith revenuepostingsandmanagementbiasinaccountingestimates. TheGroupengagementteamsharedthisriskassessmentwiththe componentauditorssothattheycouldincludeappropriateaudit proceduresinresponsetosuchrisksintheirwork. Thereareinherentlimitationsintheseauditprocedures.Weare lesslikelytobecomeawareofinstancesofnon-compliancewith lawsandregulationsthatarenotcloselyrelatedtoeventsand transactionsreflectedinthefinancialstatements.Also,theriskof notdetectingamaterialmisstatementduetofraudishigherthan theriskofnotdetectingoneresultingfromerror,asfraudmay involvedeliberateconcealmentby,forexample,forgeryor intentionalmisrepresentations,orthroughcollusion. Ouraudittestingmightincludetestingcompletepopulationsof certaintransactionsandbalances,possiblyusingdataauditing techniques.However,ittypicallyinvolvesselectingalimitednumber ofitemsfortesting,ratherthantestingcompletepopulations.We willoftenseektotargetparticularitemsfortestingbasedontheir sizeorriskcharacteristics.Inothercases,wewilluseaudit samplingtoenableustodrawaconclusionaboutthepopulation fromwhichthesampleisselected. AuditproceduresperformedbytheGroupengagementteam and/orcomponentauditorsincluded:  DiscussionswiththeDirectors,theAuditandRisk CommitteeandGroupGeneralCounsel;  Reviewoflegalcorrespondence,internalaudit reports,whistleblowingreportsandBoardmeeting minutesandconsiderationofknownorsuspected instancesofnon-compliancewithlawsand regulations,andfraud;  Challengingmanagementonitscriticalaccounting estimatesandjudgements;  Identifyingandtestingjournalentriestoaddressthe riskofinappropriatejournalsaspreviouslyreferredto;  Auditofthetaxchargeanddeferredtaxbalances including,supportedbyPwCexperts,areviewofthe transferpricingpolicy;and  Reviewingthefinancialstatementdisclosuresand agreeingtounderlyingsupportingdocumentation. FINANCIAL STATEMENTS 155DR. MARTENS PLC ANNUAL REPORT 2024  Assessingtheriskaroundgoingconcernattheplanning andyearendphasesoftheaudit;  PerformingawalkthroughoftheGroup’sfinancial statementcloseprocess,budgetingandforecasting processandconfirmingourunderstandingof management’sgoingconcernassessmentprocess;  Obtainingmanagement’sgoingconcernmodelwhich includedabasecase,andaseverebutplausible downsidescenariocoveringthegoingconcern assessmentperiod.Inadditiontotheseverebut plausibledownsidescenario,managementprepared reversestresstestscenarios;  Criticallyassessingtheassumptionswithinthemodels including;assessingthehistoricalaccuracyof management’sforecastingandobtainingcorroborating, andconsideringcontradictory,evidenceforthe assumptionsused;  Consideringtheassumptionsmaderegardingthe furthercontinuationofweakerconsumersentimentand lowerdemandfortheGroup’sproductsandtheimpact offactoryclosuresinoneofthekeyproduction geographicareasintheseverebutplausibledownside caseandassessingwhethertherewereanyother scenarioswhichshouldbeconsidered; Conclusions relating to going concern  Assessingwhetheritwasplausiblethatmanagement couldactionthemitigationsidentifiedintheseverebut plausibledownsidescenario;  Performingindependentsensitivityanalysistothe severebutplausiblecasetoassesstheimpacton liquidityandcovenantheadroom;  ObtainingandreviewingtheGroup’sfinancing agreement,confirmingourunderstandingofthe agreementsincludingthoserelatingtocovenanttest ratiorequirements,andunderstandingthenatureof recentinteractionswiththeGroup’sfinancingpartners. Checkingthecalculationofheadroominrespectof thefinancialcovenanttestratiosandassessingthe Group’sforecastcompliancewithbankingcovenant requirements;and  Confirmingthatconsistentapproachestogoing concern,viability,impairmentandotherkeyareas ofestimationhavebeenused. OurevaluationoftheDirectors’assessmentoftheGroup’sandtheParentCompany’sabilitytocontinuetoadoptthegoingconcern basisofaccountingincluded: Basedontheworkwehaveperformed,wehavenotidentified anymaterialuncertaintiesrelatingtoeventsorconditionsthat, individuallyorcollectively,maycastsignificantdoubtontheGroup’s andtheParentCompany’sabilitytocontinueasagoingconcern foraperiodofatleasttwelvemonthsfromwhenthefinancial statementsareauthorisedforissue. Inauditingthefinancialstatements,wehaveconcludedthatthe Directors’useofthegoingconcernbasisofaccountinginthe preparationofthefinancialstatementsisappropriate. However,becausenotallfutureeventsorconditionscanbe predicted,thisconclusionisnotaguaranteeastotheGroup’s andtheParentCompany’sabilitytocontinueasagoingconcern. InrelationtotheDirectors’reportingonhowtheyhaveappliedthe UKCorporateGovernanceCode,wehavenothingmaterialtoadd ordrawattentiontoinrelationtotheDirectors’statementinthe financialstatementsaboutwhethertheDirectorsconsideredit appropriatetoadoptthegoingconcernbasisofaccounting. OurresponsibilitiesandtheresponsibilitiesoftheDirectorswith respecttogoingconcernaredescribedintherelevantsections ofthisreport. 156 DR. MARTENS PLC ANNUAL REPORT 2024 INDEPENDENT AUDITORS’ REPORT TOTHEMEMBERSOFDR.MARTENSPLCCONTINUED Reporting on other information TheotherinformationcomprisesalloftheinformationintheAnnual Reportotherthanthefinancialstatementsandourauditors’report thereon.TheDirectorsareresponsiblefortheotherinformation. Ouropiniononthefinancialstatementsdoesnotcovertheother informationand,accordingly,wedonotexpressanauditopinionor, excepttotheextentotherwiseexplicitlystatedinthisreport,any formofassurancethereon. Inconnectionwithourauditofthefinancialstatements,our responsibilityistoreadtheotherinformationand,indoingso, considerwhethertheotherinformationismateriallyinconsistent withthefinancialstatementsorourknowledgeobtainedinthe audit,orotherwiseappearstobemateriallymisstated.Ifweidentify anapparentmaterialinconsistencyormaterialmisstatement,we arerequiredtoperformprocedurestoconcludewhetherthereisa materialmisstatementofthefinancialstatementsoramaterial misstatementoftheotherinformation.If,basedontheworkwe haveperformed,weconcludethatthereisamaterialmisstatement ofthisotherinformation,wearerequiredtoreportthatfact.Wehave nothingtoreportbasedontheseresponsibilities. WithrespecttotheStrategicreportandDirectors’report,wealso consideredwhetherthedisclosuresrequiredbytheUKCompanies Act2006havebeenincluded. Basedonourworkundertakeninthecourseoftheaudit,the CompaniesAct2006requiresusalsotoreportcertainopinions andmattersasdescribedbelow. STRATEGIC REPORT AND DIRECTORS’ REPORT Inouropinion,basedontheworkundertakeninthecourseofthe audit,theinformationgivenintheStrategicreportandDirectors’ reportfortheyearended31March2024isconsistentwiththe financialstatementsandhasbeenpreparedinaccordancewith applicablelegalrequirements. InlightoftheknowledgeandunderstandingoftheGroupand ParentCompanyandtheirenvironmentobtainedinthecourse oftheaudit,wedidnotidentifyanymaterialmisstatementsin theStrategicreportandDirectors’report. DIRECTORS’ REMUNERATION Inouropinion,thepartoftheRemunerationreporttobeauditedhas beenproperlypreparedinaccordancewiththeCompaniesAct2006. Corporate governance statement TheListingRulesrequireustoreviewtheDirectors’statementsin relationtogoingconcern,longer-termviabilityandthatpartofthe corporategovernancestatementrelatingtotheParentCompany’s compliancewiththeprovisionsoftheUKCorporateGovernanceCode specifiedforourreview.Ouradditionalresponsibilitieswithrespect tothecorporategovernancestatementasotherinformationare describedintheReportingonotherinformationsectionofthisreport. Basedontheworkundertakenaspartofouraudit,wehave concludedthateachofthefollowingelementsofthecorporate governancestatementismateriallyconsistentwiththefinancial statementsandourknowledgeobtainedduringtheaudit,andwe havenothingmaterialtoaddordrawattentiontoinrelationto: • TheDirectors’confirmationthattheyhavecarriedoutarobust assessmentoftheemergingandprincipalrisks; • ThedisclosuresintheAnnualReportthatdescribethoseprincipal risks,whatproceduresareinplacetoidentifyemergingrisksand anexplanationofhowthesearebeingmanagedormitigated; • TheDirectors’statementinthefinancialstatementsaboutwhether theyconsidereditappropriatetoadoptthegoingconcernbasis ofaccountinginpreparingthem,andtheiridentificationofany materialuncertaintiestotheGroup’sandParentCompany’sability tocontinuetodosooveraperiodofatleasttwelvemonthsfrom thedateofapprovalofthefinancialstatements; • TheDirectors’explanationastotheirassessmentoftheGroup’s andParentCompany’sprospects,theperiodthisassessment coversandwhytheperiodisappropriate;and • TheDirectors’statementastowhethertheyhaveareasonable expectationthattheParentCompanywillbeabletocontinuein operationandmeetitsliabilitiesastheyfalldueovertheperiod ofitsassessment,includinganyrelateddisclosuresdrawing attentiontoanynecessaryqualificationsorassumptions. FINANCIAL STATEMENTS 157DR. MARTENS PLC ANNUAL REPORT 2024 OurreviewoftheDirectors’statementregardingthelonger-term viabilityoftheGroupandParentCompanywassubstantiallyless inscopethananauditandonlyconsistedofmakinginquiriesand consideringtheDirectors’processsupportingtheirstatement; checkingthatthestatementisinalignmentwiththerelevant provisionsoftheUKCorporateGovernanceCode;andconsidering whetherthestatementisconsistentwiththefinancialstatements andourknowledgeandunderstandingoftheGroupandParent Companyandtheirenvironmentobtainedinthecourseoftheaudit. Inaddition,basedontheworkundertakenaspartofouraudit,we haveconcludedthateachofthefollowingelementsofthecorporate governancestatementismateriallyconsistentwiththefinancial statementsandourknowledgeobtainedduringtheaudit: • TheDirectors’statementthattheyconsidertheAnnualReport, takenasawhole,isfair,balancedandunderstandable,and providestheinformationnecessaryforthememberstoassess theGroup’sandParentCompany’sposition,performance, businessmodelandstrategy; • ThesectionoftheAnnualReportthatdescribesthereviewof effectivenessofriskmanagementandinternalcontrolsystems;and • ThesectionoftheAnnualReportdescribingtheworkofthe AuditandRiskCommittee. Wehavenothingtoreportinrespectofourresponsibilitytoreport whentheDirectors’statementrelatingtotheParentCompany’s compliancewiththeCodedoesnotproperlydiscloseadeparture fromarelevantprovisionoftheCodespecifiedundertheListing Rulesforreviewbytheauditors. Responsibilities for the financial statements and the audit RESPONSIBILITIES OF THE DIRECTORS FOR THE FINANCIAL STATEMENTS AsexplainedmorefullyintheStatementofDirectors’ Responsibilitiesinrespectofthefinancialstatements,theDirectors areresponsibleforthepreparationofthefinancialstatementsin accordancewiththeapplicableframeworkandforbeingsatisfied thattheygiveatrueandfairview.TheDirectorsarealsoresponsible forsuchinternalcontrolastheydetermineisnecessarytoenable thepreparationoffinancialstatementsthatarefreefrommaterial misstatement,whetherduetofraudorerror. Inpreparingthefinancialstatements,theDirectorsareresponsible forassessingtheGroup’sandtheParentCompany’sabilityto continueasagoingconcern,disclosing,asapplicable,matters relatedtogoingconcernandusingthegoingconcernbasisof accountingunlesstheDirectorseitherintendtoliquidatetheGroup ortheParentCompanyortoceaseoperations,orhavenorealistic alternativebuttodoso. AUDITORS’ RESPONSIBILITIES FOR THE AUDIT OF THE FINANCIAL STATEMENTS Ourobjectivesaretoobtainreasonableassuranceabout whetherthefinancialstatementsasawholearefreefrommaterial misstatement,whetherduetofraudorerror,andtoissuean auditors’reportthatincludesouropinion.Reasonableassurance isahighlevelofassurance,butisnotaguaranteethatanaudit conductedinaccordancewithISAs(UK)willalwaysdetecta materialmisstatementwhenitexists.Misstatementscanarise fromfraudorerrorandareconsideredmaterialif,individually orintheaggregate,theycouldreasonablybeexpectedto influencetheeconomicdecisionsofuserstakenonthebasis ofthesefinancialstatements. Afurtherdescriptionofourresponsibilitiesfor theauditofthefinancialstatementsislocated ontheFRC’swebsiteat: www.frc.org.uk/auditorsresponsibilities Thisdescriptionformspartofourauditors’report. USE OF THIS REPORT Thisreport,includingtheopinions,hasbeenpreparedforandonly fortheParentCompany’smembersasabodyinaccordancewith Chapter3ofPart16oftheCompaniesAct2006andfornoother purpose.Wedonot,ingivingtheseopinions,acceptorassume responsibilityforanyotherpurposeortoanyotherpersontowhom thisreportisshownorintowhosehandsitmaycomesavewhere expresslyagreedbyourpriorconsentinwriting. 158 DR. MARTENS PLC ANNUAL REPORT 2024 INDEPENDENT AUDITORS’ REPORT TOTHEMEMBERSOFDR.MARTENSPLCCONTINUED Other required reporting COMPANIES ACT 2006 EXCEPTION REPORTING UndertheCompaniesAct2006wearerequiredtoreporttoyouif, inouropinion: • wehavenotobtainedalltheinformationandexplanationswe requireforouraudit;or • adequateaccountingrecordshavenotbeenkeptbytheParent Company,orreturnsadequateforouraudithavenotbeen receivedfrombranchesnotvisitedbyus;or • certaindisclosuresofDirectors’remunerationspecifiedbylaw arenotmade;or • theParentCompanyfinancialstatementsandthepartofthe Remunerationreporttobeauditedarenotinagreementwith theaccountingrecordsandreturns. Wehavenoexceptionstoreportarisingfromthisresponsibility. Other matter TheParentCompanyisrequiredbytheFinancialConductAuthority DisclosureGuidanceandTransparencyRulestoincludethese financialstatementsinanannualfinancialreportpreparedunderthe structureddigitalformatrequiredbyDTR4.1.15R–4.1.18Randfiled ontheNationalStorageMechanismoftheFinancialConduct Authority.Thisauditors’reportprovidesnoassuranceoverwhether thestructureddigitalformatannualfinancialreporthasbeen preparedinaccordancewiththoserequirements. Jonathan Sturges (Senior Statutory Auditor) forandonbehalfofPricewaterhouseCoopersLLP CharteredAccountantsandStatutoryAuditors London 29May2024 FINANCIAL STATEMENTS 159DR. MARTENS PLC ANNUAL REPORT 2024 Note FY24 FY23 £m £m Revenue 3 8 7 7. 1 1,0 0 0.3 Costofsales (3 01 . 9) (3 8 2 . 2) Gross profit 575. 2 618.1 Sellingandadministrativeexpenses 4 (4 5 3 . 0) (4 41 .9) Financeincome 3.0 1 .9 Financeexpense 7 (3 2 . 2) (18 .7) Profit before tax 93.0 15 9.4 EBITDA 3 1 9 7. 5 24 5.0 Depreciationandamortisation 4 (7 2 . 3) (5 4 . 2) Impairment 4 – (3 . 9) Foreignexchangelosses (4 . 2) (1 0.7) Othergains 1.2 – Netfinanceexpense (2 9. 2) (1 6 . 8) Profit before tax 93.0 159 .4 Taxexpense 8 (23.8) (3 0. 5) Profit for the year 69. 2 128 .9 Note FY24 FY23 Earnings per share Basic 9 7. 0 p 1 2.9p Diluted 9 7. 0p 12 .9p 1 1. AlternativePerformanceMeasure(APM)asdefinedintheGlossaryonpages220and221. Theresultsfortheyearspresentedabovearederivedfromcontinuingoperationsandareentirelyattributabletotheownersofthe ParentCompany. Thenotesonpages165to206formpartoftheseConsolidatedFinancialStatements. 160 DR. MARTENS PLC ANNUAL REPORT 2024 CONSOLIDATED STATEMENT OF PROFIT OR LOSS FORTHEYEARENDED31MARCH2024 Note FY24 FY23 £m £m Profit for the year 69. 2 128 .9 Other comprehensive (expense)/income Items that may subsequently be reclassified to profit or loss Foreigncurrencytranslationdifferences (2 . 8) 5.5 Cashflowhedges:Fairvaluemovementsinequity (1 . 8) 1.8 Cashflowhedges:Reclassifiedandreportedinprofitorloss 19 3.9 (2. 5) Taxinrelationtoshareschemes 8 0. 5 – Taxinrelationtocashflowhedges 8 (0.7) 0.2 (0. 9) 5.1 Total comprehensive income for the year 68.3 13 4.0 Thenotesonpages165to206formpartoftheseConsolidatedFinancialStatements. FINANCIAL STATEMENTS 161DR. MARTENS PLC ANNUAL REPORT 2024 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FORTHEYEARENDED31MARCH2024 ASSETS Note(s) FY24 FY23 £m £m Non-current assets Intangibleassets 11 270.0 26 5.6 Property,plantandequipment 12 59. 4 61.3 Right-of-useassets 12 17 3 . 5 14 4. 1 Investments 20 1 .0 1 .0 Derivativefinancialassets 19 0.1 – Deferredtaxassets 22 11. 2 11 .8 51 5. 2 483.8 Current assets Inventories 13 2 54.6 2 5 7. 8 Tradeandotherreceivables 14 68.8 9 3.0 Incometaxassets 1.2 – Derivativefinancialassets 19 1 .5 0.5 Cashandcashequivalents 15 111 .1 157 .5 4 3 7. 2 508.8 Total assets 952 .4 992.6 LIABILITIES Current liabilities Tradeandotherpayables 16 (92 . 2) (1 2 7. 7) Borrowings 17 (8. 4) (6.0) Leaseliabilities 17,28 (4 7. 0) (28.1) Derivativefinancialliabilities 19 (0. 1) (1 . 3) Incometaxpayable (5. 8) (1 . 4) (1 5 3 . 5) (16 4 .5) Non-current liabilities Borrowings 17 (2 8 6. 3) (2 9 3 . 4) Leaseliabilities 17,28 (1 3 5 . 3) (1 24. 3) Provisions 18 (6 . 3) (4 .4) Deferredtaxliabilities 22 (2 . 8) (1 . 8) (4 3 0 .7) (4 2 3 .9) Total liabilities (5 8 4. 2) (5 8 8 .4) Net assets 368.2 40 4.2 EQUITY Equity attributable to the owners of the Parent Ordinarysharecapital 23 9.6 10.0 Treasuryshares 24 – – Hedgingreserve 25 0. 9 (0 .5) Capitalredemptionreserve 25 0.4 – Mergerreserve 25 (1 , 4 0 0 . 0) (1,4 00.0) Foreigncurrencytranslationreserve 25 9.7 1 2.5 Retainedearnings 25 1 , 74 7. 6 1 ,78 2 . 2 Total equity 368.2 40 4.2 Thenotesonpages165to206formpartoftheseConsolidatedFinancialStatements. The Consolidated Financial Statements on pages 160 to 206 were approved and authorised by the Board of Directors on 29 May 2024 and signed on its behalf by: KENNY WILSON GILES WILSON CHIEF EXECUTIVE OFFICER CHIEF FINANCIAL OFFICER 162 DR. MARTENS PLC ANNUAL REPORT 2024 CONSOLIDATED BALANCE SHEET ASAT31MARCH2024 Ordinary Capital Foreign share Treasury Hedging redemption Merger translation Retained Total capital shares reserve reserve reserve reserve earnings equity Note(s) £m £m £m £m £m £m £m £m At 1 April 2022 10.0 – (0. 1) – (1 , 4 0 0 . 0) 7. 0 1 ,711 .3 32 8.2 Profitfortheyear – – – – – – 1 28.9 1 28.9 Othercomprehensive(expense)/income – – (0. 4) – – 5.5 – 5.1 Totalcomprehensive(expense)/income fortheyear – – (0. 4) – – 5.5 1 28.9 1 34 .0 Dividendspaid 10 – – – – – – (5 8 . 4) (5 8 . 4) Share-basedpayments 26 – – – – – – 0 .4 0.4 At 31 March 2023 10.0 – (0. 5) – (1 , 4 0 0 . 0) 12 .5 1 ,7 82 . 2 40 4.2 Profitfortheyear – – – – – – 69. 2 6 9.2 Othercomprehensiveincome/(expense) – – 1 .4 – – (2 . 8) 0.5 (0 .9) Totalcomprehensiveincome/(expense) fortheyear – – 1.4 – – (2 . 8) 6 9.7 68.3 Dividendspaid 10 – – – – – – (5 7 . 8) (5 7 . 8) Sharesissued 23 – – – – – – – – Share-basedpayments 26 – – – – – – 4.0 4 .0 Repurchaseofordinarysharecapital 23,24 – (50.0) – – – – (0 .5) (5 0. 5) Cancellationofrepurchasedordinary sharecapital 23,24 (0. 4) 50.0 – 0.4 – – (50.0) – At 31 March 2024 XX 9.6 – 0.9 0. 4 (1 , 4 0 0 .0) 9 .7 1 , 7 4 7. 6 368. 2 Thenotesonpages165to206formpartoftheseConsolidatedFinancialStatements. FINANCIAL STATEMENTS 163DR. MARTENS PLC ANNUAL REPORT 2024 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FORTHEYEARENDED31MARCH2024 Note FY24 FY23 £m £m Profit after taxation 6 9.2 1 28.9 Addback:incometaxexpense 8 23.8 3 0.5 financeincome (3 .0) (1 .9) financeexpense 7 32. 2 1 8 .7 depreciation,amortisationandimpairment 72. 3 5 8.1 othergains (1 . 2) – foreignexchangelosses 4.2 1 0.7 share-basedpaymentscharge 26 4.0 0.5 Increaseininventories (1 . 6) (1 3 3 . 2) Decrease/(increase)intradeandotherreceivables 23.0 (6 .6) Decreaseintradeandotherpayables (37 .7) (9 . 2) Changeinnetworkingcapital (1 6 . 3) (1 4 9. 0) Cash flows from operating activities Cashgeneratedfromoperations 185. 2 96.5 Taxationpaid (1 8 . 8) (2 2 .3) Settlementofmaturedderivatives 1.5 (1 .5) Net cash inflow from operating activities 167 .9 7 2.7 Cash flows from investing activities Additionstointangibleassets 11 (1 0 . 2) (1 1 . 8) Additionstoproperty,plantandequipment 12 (1 8 . 2) (3 9 . 6) Financeincomereceived 2.9 1.6 Capitalcontributionsreceivedforright-of-useassets – 0. 2 Purchaseofequityinvestment 20 – (1 .0) Net cash outflow from investing activities (2 5. 5) (50.6) Cash flows from financing activities Financeexpensepaid (1 9 . 9) (7. 2) Paymentofleaseinterest 28 (8 .6) (4 . 8) Paymentofleaseliabilities 28 (4 3 .6) (2 9 .1) Repurchaseofshares 23 (5 0. 5) – Revolvingcreditfacilitydrawdown 17 3 0.0 – Revolvingcreditfacilityrepayment 17 (3 0 .0) – Settlementofmaturedderivatives (5. 5) 4.6 Dividendspaid 10 (57.8) (5 8 .4) Net cash outflow from financing activities (1 8 5 . 9) (9 4 . 9) Net decrease in cash and cash equivalents (4 3 . 5) (72 . 8) Cashandcashequivalentsatbeginningofyear 1 5 7. 5 22 8.0 Effectofforeignexchangeoncashheld (2 .9) 2.3 Cash and cash equivalents at end of year 15 111 .1 157 .5 Thenotesonpages165to206formpartoftheseConsolidatedFinancialStatements. 164 DR. MARTENS PLC ANNUAL REPORT 2024 CONSOLIDATED STATEMENT OF CASH FLOWS FORTHEYEARENDED31MARCH2024 1. General information Dr. Martens plc (the ‘Company’) is a public company limited by shares incorporated in the United Kingdom, and registered and domiciled in England and Wales, whose shares are traded on the London Stock Exchange. The Company’s registered office is: 28 Jamestown Road, Camden, London NW1 7BY. The principal activity of the Company and its subsidiaries (together referred to as the ‘Group’) is the design, development, procurement, marketing, selling and distribution of footwear, under the Dr. Martens brand. 2. Accounting policies The principal accounting policies adopted in the preparation of the financial statements are set out below. The policies have been consistently applied to the periods presented, unless otherwise stated. Amounts are presented in GBP and to the nearest million pounds (to one decimal place) unless otherwise noted. The reporting period is defined as the year ended 31 March 2024 and year ended 31 March 2023 for the comparative period. 2.1 BASIS OF PREPARATION The Consolidated Financial Statements of the Group have been prepared in accordance with UK-adopted International Accounting Standards in conformity with the requirements of the Companies Act 2006 as applicable to companies reporting under those standards. The Group’s Consolidated Financial Statements have been prepared on a going concern basis under the historical cost convention, except for equity investments, derivative financial instruments, money market funds, share-based payments and pension scheme assets that have been measured at fair value. Certain amounts in the Statement of Profit or Loss and the Balance Sheet have been grouped together for clarity, with their breakdown being shown in the notes to the financial statements. The distinction presented in the Balance Sheet between current and non-current entries has been made on the basis of whether the assets and liabilities fall due within more than one year. Consideration of climate risk matters The Group continues to assess the impact of climate risk matters on many aspects of the business, including climate related scenario analysis as required by the Task Force on Climate-Related Disclosures. Building on this scenario analysis, consideration has been given to the impact of climate related risk on management judgements and estimates, and compliance with existing accounting requirements. The incurred costs and investments associated with our sustainability strategy are reflected in the Group’s Financial Statements. The impact of climate related risk matters is not expected to be material to the 31 March 2024 Consolidated Financial Statements, the Group going concern assessments to 30 September 2025, or the viability of the Group over the next three years. Financial calendar During the year, the Group amended the basis of preparation of the Consolidated Financial Statements to align with the operational trading of the business; by moving from a calendar year to a retail calendar basis. The retail calendar will report a 52-week year, split into monthly 5-4-4 Monday to Sunday week formats. A 53-week year will be reported around every six years to avoid the retail calendar deviating by more than seven days to the calendar year and accounting reference date of 31 March. As 31 March 2024 falls on a Sunday, the FY25 period will begin on a Monday and conform to a retail calendar thereafter. Going concern The financial statements have been prepared on the going concern basis. The going concern assessment covers at least the 12-month period from the date of the signing of the financial statements, and the going concern basis is dependent on the Group maintaining adequate levels of resources to operate during the period. To support this assessment, detailed trading and cash flow forecasts, including forecast liquidity and covenant compliance, were prepared for the 16-month period to 30 September 2025. The Directors’ assessment used the same assumptions and methods as the viability assessment on pages 44 and 45. The key stages of the assessment process are summarised as follows: • The Group planning process forms the basis of the Going Concern review, starting from the DOCS strategy and producing outputs for long, medium and short term financial plans, based on key assumptions which are agreed with the GLT and Board. • The trading outlook over the long, medium and short term is evaluated, contextualising our assessments within the broader macroeconomic environment. • Micro and macro central planning assumptions are identified and incorporated into the assessments. • The Directors of the Group have considered the future position based on current trading and a number of potential downside scenarios which may occur, including the impact of appropriate principal risks crystallising. • Further details on the potential downside scenarios relevant to the going concern assessment period have been included on the next page. FINANCIAL STATEMENTS 165DR. MARTENS PLC ANNUAL REPORT 2024 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FORTHEYEARENDED31MARCH2024 2. Accounting policies continued Going concerncontinued The Directors also considered the Group’s funding arrangements at 31 March 2024 with cash of £111.1m, available undrawn facilities of £194.5m and bullet debt repayment of £288.6m not due until 2 February 2026. Consistent with the Viability Statement on pages 44 and 45, management have modelled, and the Directors have reviewed ‘top-down’ sensitivity and stress testing, including a review of the cash flow projections and covenant compliance under a severe but plausible scenario in relation to two main risks and specific ‘black swan’ events assessed which are detailed below: • the impact of a factory closure in one key production geographic area due to climate change (flooding). • weaker consumer sentiment and lower demand. ‘Top-down’ sensitivity and stress testing included a review of the cash flow projections and covenant compliance under a severe but plausible scenario in relation to the downside scenarios described above. In the unlikely event of the above two scenarios occurring together, the Group can withstand material revenue decline and by applying available mitigations, headroom above covenant requirements remain in line with expectation and the Group continues to have satisfactory liquidity and covenant headroom throughout the period under review. Experience over three years of FY22, FY23 and FY24 have indicated minimal wholesale bad debt risk and minimal margin risk with the principal risk to meeting covenant compliance being lower revenue. In modelling our severe but plausible downside we have incorporated the impact of a double digit decrease in revenue from the base plan in the short term, with the base plan already representing a single digit decline versus FY24. Under this scenario, certain mitigations are available or are intrinsically linked to the forecast, including some cost and cash savings that materialise immediately if the Group’s performance is below budget and other planned and standard cost reductions. A more extreme downside scenario is not considered plausible. A reverse stress test has also been modelled to determine what could break covenant compliance estimates and liquidity before mitigating actions. To model these reverse stress tests the impact on revenue of zero covenant headroom and zero liquidity was calculated at the end of the going concern period. Under the covenant breach test it is concluded that the business could weather extreme growth reductions without mitigation versus the base plan, with the base plan already representing a single digit decline versus FY24. The business would have to experience -11%pts to revenue growth in the going concern period before covenants are breached. Similarly, the business would have to experience -51%pts revenue growth reduction in the going concern period before zero cash headroom is reached. The Directors have assessed the likelihood of occurrence to be remote. We have also assessed the qualitative and quantitative impact of climate-related risks, as noted in our TCFD scenario analysis and above, on asset recoverable amounts and concluded that there would not be a material impact on the business and cash flows in the going concern period. We will continue to monitor the impact of the macroeconomic backdrop and geopolitical events on the Group in the countries where we operate, and we plan to maintain flexibility to react as appropriate. 2.2 BASIS OF CONSOLIDATION The Consolidated Financial Statements comprise the financial statements of the Company and its subsidiaries as at 31 March 2024 and 31 March 2023. Control is achieved when the Group has rights to variable returns from its involvement with the investee and the ability to use its power over the investee to affect the amount of the investor’s returns. Specifically, the Group controls an investee if, and only if, the Group has: • power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities of the investee); • exposure, or rights, to variable returns from its involvement with the investee; and • the ability to use its power over the investee to affect its returns. Generally, there is a presumption that a majority of voting rights results in control. To support this presumption and when the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and circumstances in assessing whether it has power over an investee, including: • the contractual arrangement(s) with the other vote holders of the investee; • rights arising from other contractual arrangements; and • the Group’s voting rights and potential voting rights. The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control. Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases when the Group loses control of the subsidiary. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the year are included in the Consolidated Financial Statements from the date the Group gains control until the date the Group ceases to control the subsidiary. 166 DR. MARTENS PLC ANNUAL REPORT 2024 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FORTHEYEARENDED31MARCH2024CONTINUED 2. Accounting policies continued Profit or loss and each component of other comprehensive income are attributed to the equity holders of the parent of the Group. When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies in line with the Group’s accounting policies. All intra-group assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of the Group are eliminated in full on consolidation. A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction. If the Group loses control over a subsidiary, it derecognises the related assets (including goodwill), liabilities, non-controlling interest and other components of equity, while any resultant gain or loss is recognised in profit or loss. Any investment retained is recognised at fair value. 2.3 ADOPTION OF NEW AND REVISED STANDARDS A number of new or amended standards became applicable for the current reporting period. These standards, amendments or interpretations are not expected to have a material impact on the Group in the current or future reporting periods: • Amendments to IAS 1 – Classification of liabilities as current, and disclosure of accounting policies • Amendments to IAS 8 – Definition of accounting estimates • Amendments to IAS 12 – Deferred tax related to assets and liabilities arising from a single transaction • Amendments to IAS 12 – Pillar Two model rules • Implementation of IFRS 17 – Insurance contracts New standards and interpretations not yet applied The following new or amended IFRS accounting standards, amendments and interpretations are not yet adopted and it is expected that where applicable, these standards and amendments will be adopted on each respective effective date: • Amendments to IAS 1 – Presentation of financial statements: non-current liabilities with covenants • Amendments to IFRS 16 – Leases on sale and leaseback • Amendments to IAS 7 and IFRS 7 – Supplier finance arrangements These standards, amendments or interpretations are not expected to have a material impact on the Group in the current or future reporting periods. 2.4 ALTERNATIVE PERFORMANCE MEASURES (APMS) Management exercises judgement in determining the adjustments to apply to IFRS measurements in order to derive suitable APMs. As set out on pages 220 and 221 of the Glossary, APMs are used as management believes these measures provide additional useful information on the underlying trends, performance and position of the Group. These measures are used for performance analysis. The APMs are not defined by IFRS and therefore may not be directly comparable with other companies’ APMs. These measures are not intended to be a substitute for, or superior to, IFRS measurements. 2.5 FOREIGN CURRENCY TRANSLATION The Consolidated Financial Statements are presented in GBP, which is the Group’s presentational currency. The Group includes foreign entities whose functional currencies are not GBP. On consolidation, the assets and liabilities of the Group entities that have a functional currency different from the presentation currency are translated into GBP at the closing rate at the date of that Balance Sheet. Income and expenses for each Statement of Profit or Loss are translated at average foreign exchange rates for the period. Foreign exchange differences are recognised in other comprehensive income. The functional currency of each company in the Group is that of the primary economic environment in which the entity operates.  FINANCIAL STATEMENTS 167DR. MARTENS PLC ANNUAL REPORT 2024 2. Accounting policies continued 2.6 REVENUE The Group’s revenue arises from the sale of goods to customers. Contracts with customers generally have one performance obligation. The Group has concluded that the revenue from the sale of goods should be recognised at a point in time when control of the goods is transferred to the customer, which is dependent on the revenue channel. Revenue is recognised at the invoiced price less any associated discounts and sales taxes. The Group assessed its revenue channels against the IFRS 15 five-step model, identifying the contracts, the performance obligations and the transaction price, and then allocating this to determine the timing of revenue recognition. The revenue channels that have been separately assessed are as follows: • ecommerce revenue, including delivery charge income; • retail revenue; and • wholesale revenue. Control is passed to the customer on the following basis under each of the revenue channels as follows: • ecommerce channel: upon receipt of the goods by the customer; • retail channel: upon completion of the transaction; and • wholesale channel: upon delivery of the goods or upon dispatch to the customer if the customer takes responsibility for delivery. The payment terms across each of these revenue channels varies. The payments for retail are received at the transfer of control. Ecommerce payments are mainly received in advance of transfer of control by less than one week as there is a timing difference between receipt of cash on order and receipt of goods by the customer. Wholesale customers pay on terms generally between 30 and 60 days. Some contracts for the sale of goods provide customers with a right of return and rebates. Under IFRS 15, this gives rise to variable consideration, which is constrained such that it is highly probable that significant reversal will not occur. Rights of return When a contract provides a customer with a right of return, under IFRS 15, the consideration is variable because the contract allows the customer to return the product. The Group uses the expected value method to estimate the goods that will be returned and recognise a refund liability and an asset for the goods to be recovered. Provisions for returned goods are calculated based on future expected levels of returns for each channel, assessed across a variety of factors such as historical trends, economic factors and other measures. Rebates Under IFRS 15, rebates give rise to variable consideration. To estimate this the Group applies the most likely amount method. 2.7 FINANCE INCOME AND EXPENSES Finance expenses consist of interest payable on various forms of debt and finance income consists of interest receivable amounts from cash held. Both are recognised in the Statement of Profit or Loss under the effective interest rate method. 2.8 EXCEPTIONAL ITEMS Exceptional items consist of material non-recurring items and items arising outside the normal trading of the Group. 2.9 TAXATION The tax expense represents the sum of the tax currently payable and deferred tax movement recognised. The tax currently payable is based on taxable profit. Taxable profit differs from net profit as reported in the Statement of Profit or Loss because it excludes items of income or expense that are taxable or deductible in other periods and it further excludes items that are never taxable or deductible. The Group’s liability for current tax is calculated by using tax rates that have been enacted or substantively enacted by the end of each reporting period. Tax provisions are recognised when there is a potential exposure to an uncertain tax position and an outflow of resources is probable. The Group applies IFRIC 23 Uncertainty over Income Tax Treatments to measure uncertain tax positions. The Group calculates each provision using either the expected value method or the most likely outcome method in line with the guidance contained within IFRIC 23. The uncertain tax positions are reviewed regularly and there is ongoing monitoring of tax cases and rulings which could impact the provision. 168 DR. MARTENS PLC ANNUAL REPORT 2024 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FORTHEYEARENDED31MARCH2024CONTINUED 2. Accounting policies continued 2.9 TAXATIONCONTINUED Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amount of assets and liabilities in the historical financial information and the corresponding tax bases used in the computation of taxable profit and is accounted for using the Balance Sheet liability method based on rates that are enacted or substantively enacted by the end of each reporting period. Deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction which affects neither the taxable profit nor the accounting profit. Deferred tax liabilities are recognised for taxable temporary differences arising in investments in subsidiaries except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised, or the liability is settled. Deferred tax is charged or credited in the Statement of Profit or Loss, except when it relates to items credited or charged directly to equity, in which case the deferred tax is also dealt with in equity. Both deferred tax assets and liabilities and current tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities, when they relate to income taxes levied by the same taxation authority, and the Group intends to settle its current tax assets and liabilities on a net basis. On 23 May 2023, the IASB issued an amendment to IAS 12 ‘Income Taxes’ to clarify how the effects of the global minimum tax framework should be accounted for and disclosed effective 1 January 2023. This was endorsed by the UK Endorsement Board on 19 July 2023 and has been adopted by the Group for 2024 reporting. The Group has applied the exemption to recognising and disclosing information about deferred tax assets and liabilities related to Pillar Two income taxes. 2.10 DIVIDENDS Final dividends are recorded in the financial statements in the period in which they are approved by the Company’s shareholders. Interim dividends are recorded in the period in which they are approved and paid. 2.11 INTANGIBLE ASSETS Goodwill Business combinations are accounted for by applying the acquisition method. Goodwill acquired represents the excess of the fair value of the consideration over the fair value of the identifiable net assets acquired. After initial recognition, positive goodwill is measured at cost less any accumulated impairment losses. At the date of acquisition, the goodwill is allocated to cash generating units, usually at business segment level or statutory company level as the case may be, for the purpose of impairment testing and is tested at least annually for impairment, or if an indicator of impairment exists. On subsequent disposal or termination of a business acquired, the profit or loss on termination is calculated after charging the carrying value of any related goodwill. Negative goodwill is recognised directly in the Statement of Profit or Loss. Separately acquired intangible assets Separately acquired intangible assets comprise other intangibles. Other intangibles that have finite useful lives are carried at cost less accumulated amortisation and any provision for impairment. The finite life other intangibles are amortised on a straight line basis over the expected useful economic life of each of the assets, which is considered to be 5 to 15 years. Amortisation expense is charged to selling and administrative expenses. Other intangibles with an indefinite useful life are carried at cost less impairment. These are other intangibles for which the estimated useful life is indefinite. The carrying value of intangible assets is reviewed for impairment whenever events or changes in circumstances indicate the carrying value may not be recoverable. Software Software comprises internally generated software development. Research expenditure is charged to income in the year in which it is incurred. Development expenditure is charged to income in the year it is incurred unless it meets the recognition criteria of IAS 38 Intangible Assets to be capitalised as an intangible asset. Following initial recognition of the development expenditure as an asset, the asset is carried at cost less any accumulated amortisation and impairment losses. Amortisation begins when development is complete, and the asset is available for use. These assets are considered to have finite useful lives and are amortised on a straight line basis over the expected useful economic life of the assets, which is considered to be 5 to 15 years. Amortisation expense is charged to selling and administrative expenses. The carrying value of intangible assets is reviewed for impairment whenever events or changes in circumstances indicate the carrying value may not be recoverable. FINANCIAL STATEMENTS 169DR. MARTENS PLC ANNUAL REPORT 2024 2. Accounting policies continued 2.12 PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment is carried at cost less accumulated depreciation and provision for impairment. Depreciation is calculated to write down the cost of the assets less estimated residual value over its expected useful life on a straight line basis as follows: Freehold property 50 years Freehold improvements 10 years Leasehold improvements Over the life of the lease Plant and machinery 15 years Fixtures and fittings 5-15 years Office and computer equipment 3 years for computer equipment and 5 years for all other office equipment Motor vehicles 3 years Depreciation expense is charged to selling and administrative expenses. Any gain or loss arising on the derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the Statement of Profit or Loss in the period that the asset is derecognised. 2.13 LEASE ACCOUNTING The Group assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Group as a lessee The Group applies a single recognition and measurement approach for all leases, except for short-term leases and leases of low-value assets. As part of the measurement approach, the Group uses its incremental borrowing rate which is adjusted by both property type and geography. The Group recognises lease liabilities to make lease payments and right-of-use assets representing the right to use the underlying assets. i) Right-of-use assets The Group recognises right-of-use assets at the commencement date of the lease (i.e. the date the underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. Right-of-use assets are depreciated on a straight line basis over the shorter of the lease term and the estimated useful lives of the assets, as follows: Right-of-use-assets Shorter of lease term and estimated useful life (3 to 15 years) If ownership of the leased asset transfers to the Group at the end of the lease term or the cost reflects the exercise of a purchase option, depreciation is calculated using the estimated useful life of the asset. The right-of-use assets are also subject to impairment. Refer to the accounting policies in the Impairment of non-financial assets section. ii) Lease liabilities At the commencement date of the lease, the Group recognises lease liabilities measured at the present value of lease payments to be made over the lease term. The lease payments include fixed payments (including in substance fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees. The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by the Group and payments of penalties for terminating the lease, if the lease term reflects the Group exercising the option to terminate. Variable lease payments that do not depend on an index or a rate are recognised as expenses (unless they are incurred to produce inventories) in the period in which the event or condition that triggers the payment occurs. In calculating the present value of lease payments, the Group uses its incremental borrowing rate (adjusted by both property type and geography) at the lease commencement date because the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the interest charge and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification that does not increase the scope of the lease, a change in the lease term, a change in the lease payments (e.g. changes to future payments resulting from a change in an index or rate used to determine such lease payments) or a change in the assessment of an option to purchase the underlying asset. A lease modification is accounted for as a separate lease where the modification increases the scope of the lease, and the lease consideration increases by an amount reflecting the stand-alone price for the increase in scope. The Group’s lease liabilities are included in interest-bearing loans and borrowings (note 17). 170 DR. MARTENS PLC ANNUAL REPORT 2024 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FORTHEYEARENDED31MARCH2024CONTINUED 2. Accounting policies continued 2.13 LEASE ACCOUNTING iii) Short-term leases and leases of low-value assets The Group applies the short-term lease recognition exemption to its short-term leases of machinery and equipment (i.e. those leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase option). It also applies the lease of low-value assets recognition exemption to leases of office equipment that are considered to be low value. Lease payments on short-term leases and leases of low-value assets are recognised as an expense on a straight line basis over the lease term. 2.14 IMPAIRMENT OF NON-FINANCIAL ASSETS The carrying amounts of the Group’s relevant assets are reviewed at each year-end date to determine whether there is any indication of impairment, and if an indicator is present the asset is tested for impairment. For goodwill and intangible assets that have an indefinite useful life, an impairment test is also performed each year-end. If an impairment test is required, the Group estimates the asset’s recoverable amount. An asset’s recoverable amount is the higher of its fair value less costs of disposal and its value in use. An impairment is present if the recoverable amount is less than the carrying value of the asset. Impairment losses are recognised in the Statement of Profit or Loss in those expense categories consistent with the function of the impaired asset. Refer to notes 11 and 12 for further details. 2.15 INVENTORIES Inventories are stated at the lower of cost and net realisable value. The cost of inventories consists of all costs of purchase, costs of design and other costs incurred in bringing the inventory to its first point of sale location and condition. Inventories are valued at weighted average cost, including freight to warehouse and duty. Net realisable value is based on estimated selling price less any costs expected to be incurred to completion or disposal. 2.16 FINANCIAL INSTRUMENTS A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. Offsetting of financial instruments Financial assets and financial liabilities are offset and the net amount is reported in the Consolidated Balance Sheet if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets, and to settle the liabilities simultaneously. Categorisation of inputs for fair value measurements Assets and liabilities held at fair value are categorised into levels that have been defined according to IFRS 13 ‘Fair Value Measurement’ measurement hierarchy as follows: • quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1); • inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices) (Level 2); and • inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (Level 3). The fair value of derivatives are calculated using valuation models to determine the fair values based on observable market curves such as forward foreign exchange rates, discounted back to present value using risk free interest rates. The impacts of counterparty credit, volatility and currency basis are also considered as part of the fair valuation where appropriate. All financial instruments that are held at fair value use Level 2 inputs except for equity investments which use Level 3 inputs. Furthermore, under IFRS 9, cost has been used as the best estimate for fair value for equity investments due to insufficient recent information available to measure fair value. 2.17 FINANCIAL ASSETS Recognition and derecognition Purchases and sales of financial assets are recognised on trade date being the date on which the Group commits to purchase or sell the asset. Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and the Group has transferred substantially all the risks and rewards of ownership. Investments Equity investments that are not held for trading have been irrevocably designated as fair value through other comprehensive income. Subsequent to initial recognition at fair value plus transaction costs, these assets are recorded at fair value at each period end with the movements recognised in other comprehensive income until derecognition or impaired. On derecognition, the cumulative gain or loss previously recognised in other comprehensive income is never recycled to the income statement. Dividends on financial assets at fair value through other comprehensive income are recognised in the income statement when the entity’s right to receive payment is established. Equity investments are recorded in non-current assets unless they are expected to be sold within one year. FINANCIAL STATEMENTS 171DR. MARTENS PLC ANNUAL REPORT 2024 2. Accounting policies continued 2.17 FINANCIAL ASSETSCONTINUED Trade and other receivables Trade receivables are assessed under IFRS 9 and measured at amortised cost using the effective interest rate method. The Group recognises an allowance for expected credit losses (ECLs) for all debt instruments not held at fair value through profit or loss (FVPL). The most significant financial assets of the Group are its cash and trade receivables. ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Group expects to receive, discounted at an approximation of the original effective interest rate. Cash and cash equivalents Cash and cash equivalents primarily comprise cash held within bank accounts, Money Market Funds (MMFs) and bank term deposits maturing less than three months from inception. All cash is held short term in highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value. Included within cash and cash equivalents are debit and credit card payments made by customers which are receivable from card acquiring financial institutions, and cash in transit from various payment processing intermediaries that provide receipting services to the Group. All cash and cash equivalents are measured at amortised cost with the exception of MMFs which are held at fair value through profit or loss. Summary of the Group’s financial assets: Financial asset IFRS 9 classification Investments Fair value through other comprehensive income. Trade and other receivables excluding Amortised cost. prepayments and accrued income Derivative financial assets Fair value through other comprehensive income. Cash and cash equivalents Amortised cost, except for cash amounts held within Money Market Funds which are held at fair value through profit or loss. 2.18 FINANCIAL LIABILITIES The Group classifies and measures all of its non-derivative financial liabilities at amortised cost. Initial recognition Financial liabilities are classified according to the substance of the contractual arrangements entered into. Derecognition A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the Statement of Profit or Loss. Trade and other payables Trade payables are obligations to pay for goods or services that have been acquired in the course of ordinary business from suppliers. Accounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade payables are recognised initially at fair value and subsequently held at amortised cost using the effective interest rate method. Summary of the Group’s financial liabilities: Financial liability IFRS 9 classification Bank debt Amortised cost. Bank interest Amortised cost. Lease liabilities Amortised cost. Derivative financial instruments Fair value through other comprehensive income. Trade and other payables excluding Amortised cost. non-financial liabilities 172 DR. MARTENS PLC ANNUAL REPORT 2024 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FORTHEYEARENDED31MARCH2024CONTINUED 2. Accounting policies continued 2.19 DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES The Group uses foreign exchange forward contracts to hedge its foreign currency risks. Such derivative financial instruments are initially recognised at fair value on the date a derivative contract is entered into and are subsequently remeasured at fair value. The method of recognising the resulting gain or loss depends on whether the derivative is designated as a hedging instrument, and if so, the nature of the item being hedged. Gains or losses arising from changes in fair value related to derivatives held in a cash flow hedge relationship are recognised in other comprehensive income/(expense) and deferred in the hedging reserve to the extent that the hedges are deemed effective. Amounts are transferred to the income statement in the same period in which the hedged risk affects the income statement and against the same line item. The Group designates foreign exchange derivative hedges on a full forward or spot basis. Where only the spot element of a foreign exchange derivative is designated, the cost of hedging election is applied to the forward points with fair value movements recognised in other comprehensive income and released to profit or loss depending on the nature of the underlying hedged item. The Group performs regular hedge effectiveness testing. For cash flow hedges where the forecast transaction is no longer expected to occur, hedge accounting is discontinued, and all accumulated gains or losses held in the hedging reserve are immediately recognised in profit or loss. Where hedge accounting is discontinued as a result of expiry, disposal or termination of the derivative instrument (and where the hedge relationship was deemed to be effective), accumulated gains or losses up to the point of discontinuation are held in the hedging reserve and released to profit or loss in line with the hedged item. Derivative financial instruments consist of foreign currency exchange forward contracts, which are categorised within Level 2 under the IFRS 13 measurement hierarchy (refer to note 2.16 for further detail on fair value level categorisation). The full fair value of derivatives are classified as a non-current asset or liability if the remaining maturity of the derivatives are more than 12 months and as a current asset or liability if the maturity of the derivatives are less than 12 months. 2.20 BORROWINGS Borrowings are recognised initially at fair value, net of transaction costs incurred, and subsequently carried at amortised cost using the effective interest rate method so that any difference between the proceeds (net of transaction costs) and the redemption value is recognised in the Statement of Profit or Loss over the period of the borrowings. Details of the Group’s borrowings are included in note 17. Borrowing costs The Group expenses borrowing costs in the period the costs are incurred. Where borrowing costs are attributable to the acquisition, construction or production of a qualifying asset, such costs are capitalised as part of the specific asset and amortised over the estimated useful life of the asset. Details of the Group’s borrowings are included in note 17. 2.21 ORDINARY SHARE CAPITAL Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds. Where the Company purchases any of its own equity instruments, for example, pursuant to the share buyback programme, the consideration paid, including any directly attributable incremental costs, is deducted from equity attributable to the owners of the Company. The repurchased shares are recognised as treasury shares until the shares are cancelled. The programme concluded on 19 December 2023 . 2.22 SEGMENTAL ANALYSIS IFRS 8 ‘Operating Segments’ requires operating segments to be determined by the Group’s internal reporting to the Chief Operating Decision Maker (CODM). The CODM has been determined to be both the CEO and CFO, who receive information on this basis of the Group’s revenue in key geographical regions based on the Group’s management and internal reporting structure. The CODM assesses the performance of geographical segments based on a measure of revenue and EBITDA 1 . To increase transparency the Group also includes additional voluntary disclosure analysis of global revenue within different operating channels. 1. Alternative Performance Measure (APM) as defined in the Glossary on pages 220 and 221. FINANCIAL STATEMENTS 173DR. MARTENS PLC ANNUAL REPORT 2024 2. Accounting policies continued 2.23 PENSION ARRANGEMENTS The Group provides pension benefits which include both defined benefit and defined contribution arrangements. Defined contribution pension schemes For defined contribution schemes the amount charged to the Statement of Profit or Loss represents the contributions payable to the plans in the accounting period. Differences between contributions payable in the period and contributions actually paid are shown as either accruals or prepayments in the Balance Sheet. Defined benefit pension scheme The Group operates a defined benefit pension scheme, which requires contributions to be made to separately administered funds for administration expenses. The Group did not make any contributions to the scheme in the year (FY23: £nil). The UK defined benefit scheme was closed to new members on 6 April 2002, from which time membership of a defined contribution plan was available. It was then closed to all future accrual for all existing members on 31 January 2006. A valuation of the Plan is carried out at least once every three years to determine whether the Statutory Funding Objective is met. The last valuation was carried out at 30 June 2022, the next valuation is due at 30 June 2025. No asset is recognised in the Balance Sheet in respect of defined benefit pension plans due to the uncertainty over the Group’s right to a refund of the surplus from the scheme as set out in note 2.26. The defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method. The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows using interest rates of high-quality corporate bonds that are denominated in the currency in which the benefits will be paid, and that have terms to maturity approximating to the terms of the related pension obligation. Past-service costs are recognised immediately in income. The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair value of plan assets. The net interest cost is limited by the asset ceiling. When occurring, this cost is included in employee benefit expense in the Statement of Profit or Loss. Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited to equity in other comprehensive income in the period in which they arise. 2.24 SHARE INCENTIVE PLAN (SIP) TRUSTS The Group operates two SIP Trusts for the benefit of its employees. Under accounting standard IFRS 10 Consolidated Financial Statements, control for accounting purposes has a different test threshold than under a legal basis and as a result the Group’s SIP Trusts are deemed to be under the control of Dr. Martens plc. The Trust deed for the Dr. Martens plc UK Share Incentive Plan Trust was adopted by the Board on 10 September 2021. 2.25 SHARE-BASED PAYMENTS AND SHARE SCHEMES The Group provides benefits to employees in the form of share-based payment transactions, whereby employees render services as consideration in exchange for equity instruments (‘equity-settled transactions’). The cost of equity-settled transactions is measured by reference to the fair value of the equity instruments at the date on which they are granted and is recognised as an expense over the vesting period, which ends on the date the relevant employee becomes fully entitled to the award. The fair value is calculated using an appropriate option pricing model and takes into account the impact of any market performance conditions. The impact of non-market performance conditions is not considered in determining the fair value at the date of grant. Vesting conditions which relate to non-market conditions are allowed for in the assumptions used for the number of options expected to vest. The level of vesting is reviewed at each Balance Sheet date and the charge adjusted to reflect actual and estimated levels of vesting. The cost of share-based payment transactions is recognised as an expense over the vesting period of the awards, with a corresponding increase in equity. Further details of share-based awards granted in the year can be found in note 26. A proportion of the annual Executive Bonus Scheme is settled in the form of purchased Parent Company shares. This is accounted for as a cash-settled scheme as although participants received equity, it is driven by a cash amount that is paid and converted into shares at a point in time. The proximity of the date of communication of the bonus to when the shares are received means that there would be minimal difference between cash- and equity-settled treatment. 2.26 SIGNIFICANT JUDGEMENTS AND ESTIMATES The preparation of the Group’s financial statements in conforming with IFRS requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts in the financial statements. These judgements and estimates are based on management’s best knowledge of the relevant facts and circumstances. However, the nature of estimation means that actual outcomes could differ from those estimates. Information about such judgements and estimation is contained in the accounting policies and/or notes to the financial statements and the key areas are summarised below: 174 DR. MARTENS PLC ANNUAL REPORT 2024 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FORTHEYEARENDED31MARCH2024CONTINUED 2. Accounting policies continued 2.26 SIGNIFICANT JUDGEMENTS AND ESTIMATESCONTINUED Key judgements The following judgement has had the most significant effect on amounts recognised in the financial statements: Defined benefit scheme surplus The Group acknowledges that the recognition of pension scheme surplus is an area of accounting judgement, which depends on the interpretation of the Scheme Rules and the relevant accounting standards including IAS 19 and IFRIC 14. The surplus under the scheme is not recognised as an asset benefitting the Group on the Balance Sheet, as the Group believes there is uncertainty in relation to the recoverability of any surplus, which is therefore unlikely to derive any economic benefits from that surplus. In the Group’s view there is uncertainty over whether the Scheme Rules provide the Group with an unconditional right to a refund of the surplus from the scheme due to third-party discretionary investment powers which could use up any surplus prior to wind-up. Consistent with previous years, given this uncertainty, the Group has applied an asset ceiling to the pension scheme surplus of zero. As such, an asset ceiling has been applied to the Balance Sheet, and the net surplus of £9.1m (FY23: £11.1m) has not been recognised on the Balance Sheet. The net surplus has been capped to £nil (FY23: £nil). The key sensitivities of the defined benefit obligation to the actuarial assumptions are shown in note 29. Other areas of judgement and accounting estimates The Consolidated Financial Statements include other areas of judgement and accounting estimates. While these areas do not meet the definition under IAS 1 of significant accounting estimates or critical accounting judgements, the recognition and measurement of certain material assets and liabilities are based on assumptions and/or are subject to longer-term uncertainties. The other areas of judgement and accounting estimates are listed below: Judgements Determining the lease term of contracts with renewal and termination options – Group as lessee The Group determines the lease term as the non-cancellable term of the lease, together with any periods covered by an option to extend the lease if it is reasonably certain to be exercised, or any periods covered by an option to terminate the lease, if it is reasonably certain not to be exercised. The Group has several lease contracts that include extension and termination options. The Group applies judgement in evaluating whether it is reasonably certain whether or not to exercise the option to renew or terminate the lease. That is, it considers all relevant factors that create an economic incentive for it to exercise either the renewal or termination. After the commencement date, the Group reassesses the lease term if there is a significant event or change in circumstances that is within its control and affects its ability to exercise or not to exercise the option to renew or to terminate (e.g. construction of significant leasehold improvements or significant customisation to the leased asset). The Group included the renewal period as part of the lease term for leases of plant and machinery with shorter non-cancellable periods (i.e. three to five years). The Group typically exercises its option to renew these leases because there will be a significant negative effect on production if a replacement asset is not readily available. The renewal periods for leases of leasehold property with longer non-cancellable periods (i.e. 10 to 15 years) are not included as part of the lease term, unless there is an economic incentive to extend the lease, as these are not reasonably certain to be exercised. Furthermore, the periods covered by termination options are included as part of the lease term only when they are reasonably certain not to be exercised. Sources of estimation uncertainty and assumptions The following estimates are dependent upon assumptions which could change in the next financial year and have an effect on the carrying amount of assets and liabilities recognised at the Balance Sheet date: Inventory net realisable value and provisions The assessment of the valuation of inventory requires the determination of net realisable value. Sales prices, patterns and other assumptions are reviewed to estimate net realisable value. Inventory provisioning requires significant judgement on which inventory lines should be classed as obsolete. Inventory age, historic sales patterns and trading forecasts are used when classifying inventory lines to be provided against. Uncertain tax positions The Group recognises liabilities for anticipated tax issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the current and deferred tax assets and liabilities in the period in which the determination is made. Management is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and level of future taxable profits together with an assessment of the effect of future tax planning strategies (see notes 8 and 22). In addition, the assessment of uncertain tax positions is based on management’s interpretation of relevant tax rules and decided cases, external advice obtained, the statute of limitations, the status of the negotiations and past experience with tax authorities. In evaluating whether a provision is needed it is assumed that tax authorities have full knowledge of the facts and circumstances applicable to each issue. FINANCIAL STATEMENTS 175DR. MARTENS PLC ANNUAL REPORT 2024 2. Accounting policies continued 2.26 SIGNIFICANT JUDGEMENTS AND ESTIMATES CONTINUED Carrying value of non-financial assets The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Group performs an impairment test and estimates the asset’s recoverable amount. An asset’s recoverable amount is the higher of its fair value less costs of disposal and its value in use. An impairment is present if the recoverable amount is less than the carrying value of the asset. The recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. When the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. If assessing value in use, estimates of future cash flows are discounted to present value using pre-tax discount rates derived from risk-free rates based on long-term government bonds, adjusted for risk factors such as region and market risk in the territories in which the Group operates and the time value of money. The future cash flows are then extended into perpetuity using long-term growth rates. If determining fair value less costs of disposal, recent market transactions are considered. If no such transactions can be identified, an appropriate valuation model is used. These calculations are corroborated by valuation multiples, quoted share prices for publicly traded companies or other available fair value indicators. For details of relevant non-financial assets, see notes 11 and 12. Defined benefit pension scheme assumption Determining the fair value of the defined benefit pension scheme, which relates to the pension of the Group, requires assumptions to be made by management and the Group’s independent qualified actuary around the actuarial valuations of the scheme’s assets and liabilities. For details see note 29. Leases – estimating the incremental borrowing rate The Group cannot readily determine the interest rate implicit in the lease; therefore, it uses its incremental borrowing rate (IBR) to measure lease liabilities. The IBR is the rate of interest that the Group would have to pay to borrow over a similar term, and with a similar security, the funds necessary to obtain an asset of a similar value to the right-of-use asset in a similar economic environment. The IBR therefore reflects what the Group ‘would have to pay’, which requires estimation when no observable rates are available (such as for subsidiaries that do not enter into financing transactions) or when they need to be adjusted to reflect the terms and conditions of the lease (for example, when leases are not in the subsidiary’s functional currency). The Group estimates the IBR using observable inputs (such as market interest rates) when available and is required to make certain entity-specific estimates (such as the subsidiary’s stand-alone credit rating). The IBR is reassessed when there is a reassessment of the lease liability or a lease modification. 3. Segmental analysis FY24 FY23 £m £m Revenue by geographical market EMEA 431.8 443.0 Americas 325.8 428.2 APAC 119.5 129.1 Total revenue 877.1 1,000.3 1 1. Revenue by geographical market represents revenue from external customers; there is no inter-segment revenue. FY24 FY23 £m £m EBITDA 2 by geographical market EMEA 140.8 146.1 Americas 64.4 100.1 APAC 31.7 33.8 Support costs (39.4) (35.0) EBITDA 197.5 245.0 Depreciation, amortisation and impairment (21.0) (22.6) Depreciation and impairment of right-of-use assets (51.3) (35.5) Foreign exchange losses (4.2) (10.7) Other gains 1.2 – Depreciation, amortisation, impairment, foreign exchange losses and other gains (75.3) (68.8) Finance income and expense (29.2) (16.8) Profit before tax 93.0 159.4 2 2. Alternative Performance Measure ‘APM’ as defined in the Glossary on pages 220 and 221 . 176 DR. MARTENS PLC ANNUAL REPORT 2024 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FORTHEYEARENDED31MARCH2024CONTINUED 3. Segmental analysis continued ADDITIONAL REVENUE ANALYSIS The Group derives its revenue in geographical markets from the following sources: FY24 FY23 £m £m Revenue by channel Ecommerce 276.3 279.0 Retail 256.8 241.7 Total DTC revenue 533.1 520.7 Wholesale 344.0 479.6 Total revenue 877.1 1,000.3 FY24 FY23 £m £m Non-current assets EMEA 153.4 143.3 Americas 92.2 72.6 APAC 17.7 15.4 Goodwill 240.7 240.7 Deferred tax 11.2 11.8 Total non-current assets 515.2 483.8 1 1. Included in the EMEA non-current assets is £83.9m (FY23: £79.4m) in relation to the UK legal entities. 4. Expenses analysis Profit before tax is stated after charging and crediting: Note FY24 FY23 £m £m Selling and administrative expenses Staff costs 6 155.8 143.8 Operating costs 221.9 229.3 377.7 373.1 Amortisation 11 5.8 8.4 Depreciation 12 15.2 13.6 Depreciation of right-of-use assets 12 51.3 32.2 Impairment 12 – 0.6 Impairment of right-of-use assets 12 – 3.3 Foreign exchange losses 4.2 10.7 Other gains (1.2) – Depreciation, amortisation, impairment, foreign exchange losses and other gains 75.3 68.8 Total selling and administrative expenses 453.0 441.9 5. Auditors’ remuneration FY24 FY23 £m £m Audit services in respect of the financial statements of the Parent Company and consolidation 0.8 0.6 Audit services in respect of the financial statements and of the financial statements of subsidiary companies 1.5 1.1 Other non-audit related services 0.2 0.1 2.5 1.8 1 1. FY23 auditor’s remuneration of £2.1m disclosed in the Audit and Risk Committee Report on page 141 is different to this as it includes additional fees relating to the FY23 audit which were agreed and have been incurred as an accounting expense in FY24. FINANCIAL STATEMENTS 177DR. MARTENS PLC ANNUAL REPORT 2024 6. Staff costs The aggregate payroll costs were as follows: FY24 FY23 £m £m Wages and salaries 126.7 1 17.5 Social security costs 14.2 13.4 Pension costs 5.4 4.7 Other benefits 9.5 8.2 155.8 143.8 1 1. Includes share-based payments of £4.0m (FY23: £0.5m). For details of remuneration relating to Directors, please refer to the Directors’ Remuneration Report on pages 119 to 133 of the Annual Report. The monthly number of employees (including Directors) employed by the Group during the year was: FTE Average As at 31 March For the year ended 31 March 2024 2023 2024 2023 No. No. No. No. EMEA 1,044 951 1,853 1,615 Americas 599 580 819 768 APAC 385 468 553 484 Global support functions 602 592 600 594 2,630 2,591 3,825 3,461 1 2 1. FTE (Full Time Equivalent) is calculated by dividing the employee’s contracted hours by the Group’s standard full time contract hours. 2. Average is the average actual employees of the Group during the year calculated on a monthly basis. 7. Finance expense FY24 FY23 £m £m Bank debt and other charges 22.3 12.7 Interest on lease liabilities 8.6 4.8 Amortisation of bank loan issue costs 1.2 1.2 Other interest charges 0.1 – Total financing expense 32.2 18.7 178 DR. MARTENS PLC ANNUAL REPORT 2024 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FORTHEYEARENDED31MARCH2024CONTINUED 8. Tax expense The Group calculates the tax expense for the year using the tax rate that would be applicable to the expected total annual earnings. The major components of tax expense in the Consolidated Statement of Profit or Loss are: FY24 FY23 £m £m Current tax Current tax on UK profit for the year 17.2 28.1 Adjustment in respect of prior years (0.6) (1.7) Current tax on overseas profits for the year 6.4 4.3 23.0 30.7 Deferred tax Origination and reversal of temporary differences (0.8) (1.0) Adjustment in respect of prior years 1.6 0.8 0.8 (0.2) Total tax expense in the Consolidated Statement of Profit or Loss 23.8 30.5 Other Comprehensive Income Tax in relation to unexercised share options (0.5) – Tax in relation to cash flow hedges 0.7 (0.2) Total tax expense in the Consolidated Statement of Comprehensive Income 24.0 30.3 FY24 FY23 £m £m Factors affecting the tax expense for the year: Profit before tax 93.0 159.4 Profit before tax multiplied by standard rate of UK corporation tax of 25% (FY23: 19%) 23.3 30.3 Effects of: Non-deductible expenses 0.2 0.2 Effect of change in UK tax rate – 0.1 Share-based payments 0.3 0.1 Difference in foreign tax rates (0.8) 0.8 Other adjustments (0.2) (0.1) Adjustments in respect of prior years 1.0 (0.9) Total tax expense in the Consolidated Statement of Profit or Loss 23.8 30.5 Other Comprehensive Income Tax in relation to unexercised share options (0.5) – Tax in relation to cash flow hedges 0.7 (0.2) Total tax expense in the Consolidated Statement of Comprehensive Income 24.0 30.3 Effective tax rate 25.6% 19.1% 1 1. The adjustments in respect of the prior years are in relation to current and deferred tax on temporary differences. FACTORS THAT MAY AFFECT FUTURE TAX CHARGES On 20 June 2023, Finance (No.2) Act 2023 was substantively enacted in the UK, introducing a global minimum effective tax rate of 15% for large groups for financial years beginning on or after 31 December 2023. Based on an initial analysis, all territories in which the Group operates are expected to qualify for one of the safe harbour exemptions such that top-up taxes should not apply. To the extent that this is not the case there is the potential for Pillar Two taxes to apply, but these are not expected to be material . FINANCIAL STATEMENTS 179DR. MARTENS PLC ANNUAL REPORT 2024 9. Earnings per share The calculation of basic earnings per share is based on the profit attributable to ordinary shareholders of the Parent Company divided by the weighted average number of ordinary shares in issue during the year. Diluted earnings per share is calculated by dividing the profit for the year attributable to ordinary equity holders of the Parent Company by the weighted average number of ordinary shares in issue during the year plus the weighted average number of ordinary shares that would be issued on the conversion of all dilutive potential ordinary shares into ordinary shares. FY24 FY23 £m £m Profit after tax 69.2 128.9 FY24 FY23 No. No. Weighted average number of shares for calculating basic earnings per share (millions) 983.5 1,000.5 Potentially dilutive share awards (millions) 2.1 0.7 Weighted average number of shares for calculating diluted earnings per share (millions) 985.6 1,001.2 FY24 FY23 Earnings per share Basic earnings per share 7.0p 12.9p Diluted earnings per share 7.0p 12.9p During the year to 31 March 2024 the Group repurchased 39.9 million shares. The cash outflow was £50.5m (including transaction costs of £0.5m) pursuant to the share buyback scheme that was announced on 14 July 2023 and concluded on 19 December 2023. 10. Dividends FY24 FY23 £m £m Equity dividends on ordinary shares declared and paid during the year Final dividend paid for FY23: 4.28p (FY22: 4.28p) 42.8 42.8 Interim dividend for FY24: 1.56p (FY23: 1.56p) 15.0 15.6 Total dividends declared and paid during the year 57.8 58.4 Proposed for approval by shareholders at the AGM (not recognised as a liability at 31 March 2024 or 31 March 2023) Final dividend for FY24: 0.99p (FY23: 4. 28p) 9.5 42 .8 Total interim dividend paid and final dividend proposed 24.5 58.4 Dividend as a % of earnings 35% 45% Dividend per share Total dividend per share (pence) 2.55p 5.84p The Board has proposed, subject to shareholder approval, a final dividend of 0.99p (FY23: 4.28p), taking the total dividend for FY24, including the interim dividend of 1.56p, to 2.55p, a 35% payout ratio. Whilst this is a year-on-year reduction given the higher payout in FY23 and lower earnings achieved this year, the 35% payout for FY24 is at the top of the policy range. The Board’s intention is to hold the FY25 dividend flat in absolute terms, before returning to an earnings payout in line with our dividend policy (of 25% to 35% payout) in FY26 onwards. Going forwards, the Board is also adopting a consistent approach to setting the interim dividend, with this dividend set at one-third of the previous year’s total dividend. We are also adjusting the payment dates for the dividends, to better reflect the trading cash profile of the Group, and therefore the final dividend will be paid in early October. The final dividend for FY24 will be paid to shareholders on the register as at 30 August 2024 with payment on 1 October 2024. 180 DR. MARTENS PLC ANNUAL REPORT 2024 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FORTHEYEARENDED31MARCH2024CONTINUED 11. Intangible assets Software Other intangibles intangibles Goodwill Total £m £m £m £m Cost At 1 April 2022 38.8 1.2 240.7 280.7 Additions 11.8 – – 11.8 Disposals (2.5) – – (2.5) Reclassifications to right-of-use assets (0.2) – – (0.2) Reclassifications to property, plant and equipment (0.1) – – (0.1) Foreign exchange 0.4 – – 0.4 At 31 March 2023 48.2 1.2 240.7 290.1 Additions 10.2 – – 10.2 Disposals (1.0) – – (1.0) Foreign exchange (0.1) – – (0.1) At 31 March 2024 57.3 1.2 240.7 299.2 Accumulated amortisation and impairment At 1 April 2022 18.6 – – 18.6 Charge for the year 8.4 – – 8.4 Disposals (2.4) – – (2.4) Foreign exchange (0.1) – – (0.1) At 31 March 2023 24.5 – – 24.5 Charge for the year 5.7 0.1 – 5.8 Disposals (1.0) – – (1.0) Foreign exchange (0.2) 0.1 – (0.1) At 31 March 2024 29.0 0.2 – 29.2 Net book value At 31 March 2024 28.3 1.0 240.7 270.0 At 31 March 2023 23.7 1.2 240.7 265.6 1 2 1. Software intangible additions in the year of £10.2m (FY23: £11.8m) include permanent employee staff costs capitalised of £0.8m (FY23: £0.6m). 2. Relates to a reclassification of assets to right-of-use assets in relation to key money. GOODWILL IMPAIRMENT ASSESSMENT Goodwill is required to be tested for impairment on an annual basis by estimating the asset’s recoverable amount. An asset’s recoverable amount is the higher of its fair value less costs of disposal and its value in use. An impairment is present if the recoverable amount is less than the carrying value of the asset. The recoverable amount is estimated for goodwill with reference to the cash generating units (CGUs) to which goodwill was originally allocated and each of these CGUs has been separately assessed and tested. The CGUs were agreed by the Directors as the geographical regions in which the Group operates. These regions are the lowest level at which goodwill is monitored and represent identifiable operating segments. There have been no changes to the composition of the Group’s CGUs during the period. The aggregate carrying amount of goodwill allocated to each CGU was as follows: FY24 FY23 £m £m EMEA 66.6 66.6 Americas 114.1 114.1 APAC 60.0 60.0 240.7 240.7 All CGUs were tested for impairment. No impairment charge was made in the current year (FY23: £nil). FINANCIAL STATEMENTS 181DR. MARTENS PLC ANNUAL REPORT 2024 11. Intangible assets continued Judgements, assumptions and estimates The results of the Company’s impairment tests are dependent upon estimates and judgements made by management. All CGUs’ recoverable amounts are measured using a value in use calculation. The value in use calculation uses cash flow forecasts based on financial projections reviewed by the Board covering a five-year period (pre-perpetuity). The forecasts are based on annual budgets and strategic projections representing the best estimate of future performance. Management considers forecasting over this period to appropriately reflect the business cycle of the CGUs. These cash flows are consistent with those used to review going concern and viability, however, are required by IAS 36 to be adjusted for use within an impairment review to exclude new retail development to which the Group is not yet committed. In determining the value in use of CGUs it is necessary to make a series of assumptions to estimate the present value of future cash flows. The following key assumptions have been made by management reflecting past experience and are consistent with relevant external sources of information. Operating cash flows The main assumptions within the forecast operating cash flows include the achievement of future growth in ecommerce, retail and wholesale channels, sales prices and volumes (including reference to specific customer relationships and product lines), raw material input costs, the cost structure of each CGU, the impact of foreign currency rates upon selling price and cost relationships and the levels of capital expenditure required to support each sales channel. Pre-tax risk adjusted discount rates Future cash flows are discounted to present value using pre-tax discount rates derived from risk-free rates based on long-term government bonds, adjusted for risk factors such as region and market risk in the territories in which the Group operates and the time value of money. Consistent with the 2019 IFRS IASB Staff Paper, post-tax discount rates and post-tax cash flows are used as observable inputs, and then the pre-tax discount rates are calculated from this to comply with the disclosure requirements under IAS 36. The pre-tax risk adjusted discount rates have been calculated to be 12.7% for EMEA (FY23: 12.3%), 12.6% for Americas (FY23: 12.5%), and 12.4% for APAC (FY23: 11.6%). Long-term growth rates To forecast beyond the five-year detailed cash flows into perpetuity, a long-term average growth rate has been used. The long-term growth rates applied for the regions are 1.9% for EMEA (FY23: 1.9%), 2.2% for Americas (FY23: 2.2%), and 3.4% for APAC (FY23: 3.5%). The rates used are in line with geographical forecasts included within industry reports. Sensitivity analysis Sensitivity analysis to potential changes in these key assumptions has been reviewed and there are no reasonably possible changes to key assumptions that would cause the carrying amount for any CGU to exceed its recoverable amount. 182 DR. MARTENS PLC ANNUAL REPORT 2024 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FORTHEYEARENDED31MARCH2024CONTINUED 12. Property, plant and equipment Plant, Freehold machinery, Office and property and Leasehold fixtures and computer improvements improvements fittings equipment Motor vehicles Total £m £m £m £m £m £m Cost At 1 April 2022 6.5 60.0 4.6 8.3 0.1 79.5 Additions 1.0 19.9 12.7 2.8 – 36.4 Disposals – (5.0) (0.9) (2.4) (0.1) (8.4) Reclassifications from intangible fixed assets – 0.1 – – – 0.1 Foreign exchange 0.5 1.3 (0.2) – – 1.6 At 31 March 2023 8.0 76.3 16.2 8.7 – 109.2 Additions 0.1 14.7 0.1 1.3 – 16.2 Disposals (0.1) (3.9) – (1.3) – (5.3) Reclassifications to right-of-use assets – (3.3) – – – (3.3) Foreign exchange (0.2) (1.8) (0.3) (0.2) – (2.5) At 31 March 2024 7. 8 82.0 16.0 8.5 – 114.3 Accumulated depreciation and impairment At 1 April 2022 0.4 31.9 3.2 5.6 0.1 41.2 Charge for the year 0.3 10.3 1.0 2.0 – 13.6 Impairment – 0.5 – 0.1 – 0.6 Eliminated on disposal – (5.0) (0.9) (2.4) (0.1) (8.4) Foreign exchange (0.1) 1.0 0.1 (0.1) – 0.9 At 31 March 2023 0.6 38.7 3.4 5.2 – 47.9 Charge for the year 0.3 11.9 0.8 2.2 – 15.2 Impairment – – – – – – Eliminated on disposal (0.1) (3.9) – (1.3) – (5.3) Reclassifications to right-of-use assets – (1.6) – – – (1.6) Foreign exchange – (1.2) – (0.1) – (1.3) At 31 March 2024 0.8 43.9 4.2 6.0 – 54.9 Net book value At 31 March 2024 7.0 38.1 11.8 2.5 – 59.4 At 31 March 2023 7.4 37.6 12.8 3.5 – 61.3 FINANCIAL STATEMENTS 183DR. MARTENS PLC ANNUAL REPORT 2024 12. Property, plant and equipmentcontinued Set out below are the carrying amounts of right-of-use assets recognised and the movements during the year: Right-of-use assets £m Cost or valuation At 1 April 2022 159.5 Additions 66.3 Reassessments of leases 5.5 Reclassifications from intangible fixed assets 0.2 Disposals (0.8) Foreign exchange 4.7 At 31 March 2023 235.4 Additions 77.0 Reassessments of leases (4.0) Reclassifications from property, plant and equipment 3.3 Modifications of leases 10.1 Disposals (10.1) Foreign exchange (8.8) At 31 March 2024 302.9 Accumulated depreciation and impairment At 1 April 2022 54.0 Charge for the year 32.2 Impairment 3.3 Foreign exchange 1.8 At 31 March 2023 91.3 Charge for the year 51.3 Reclassifications from property, plant and equipment 1.6 Disposals (10.0) Foreign exchange (4.8) At 31 March 2024 129.4 Net book value At 31 March 2024 173.5 At 31 March 2023 144.1 1 2 1 2 3 1. Additions include £2.0m of direct costs (FY23: £3.2m) and £2.5m (FY23: £2.7m) in relation to costs of removal and restoring. 2. Lease reassessments relate to measurement adjustments for rent reviews and stores that have exercised lease breaks. 3. During FY23, impairment charged was mainly in relation to three stores in the USA where footfall recovery, in their locality, was weak, and they were written down to £nil. IMPAIRMENT OF PROPERTY, PLANT AND EQUIPMENT AND RIGHT-OF-USE ASSETS The Group has determined that each retail store is a separate CGU. Each CGU is assessed for indicators of impairment at the Balance Sheet date and tested for impairment if any indicators exist. The Group has some leases that meet the IAS 36 definition of corporate assets, such as offices, as they do not generate independent cash flows. These are assessed for impairment indicators and if required to be tested for impairment, are done so using the two-step impairment process under IAS 36 in which they are allocated to the Regional-level CGUs as determined for goodwill impairment (note 11). There has been no change to the way in which CGUs are determined in the period. Judgements, assumptions and estimates – retail stores The results of the Company’s impairment tests are dependent upon estimates and judgements made by management. If an indicator of impairment has been identified, a CGU’s recoverable amount is measured using the value in use method. The value in use calculation uses cash flow forecasts based on financial projections reviewed by the Board covering a five-year period. The forecasts are based on annual budgets and strategic projections representing the best estimate of future performance. Management considers forecasting over this period to appropriately reflect the business cycle of the CGUs. These cash flows are consistent with those used to review going concern and viability, however, are adjusted for relevance to the nature and tenure of the retail store lease. If determining the value in use of CGUs it is necessary to make a series of assumptions to estimate the present value of future cash flows which reflect past experience and are consistent with relevant external sources of information. 184 DR. MARTENS PLC ANNUAL REPORT 2024 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FORTHEYEARENDED31MARCH2024CONTINUED 12. Property, plant and equipmentcontinued Operating cash flows – retail stores If an indicator of impairment has been identified and a CGU’s recoverable amount is required to be estimated, the main assumptions within the forecast operating cash flows include the achievement of future growth in retail sales, sales prices and volumes, raw material input costs, the cost structure of each CGU, the impact of foreign currency rates upon selling price and cost relationships and the levels of capital expenditure required to support the associated sales. Pre-tax risk adjusted discount rates – retail stores If an indicator of impairment has been identified and a CGU’s recoverable amount is required to be estimated future cash flows are discounted to present value using a pre-tax discount rate derived from risk-free rates based on long-term government bonds, adjusted for risk factors such as region and market risk in the territories in which the Group operates and the time value of money. Consistent with the 2019 IFRS IASB Staff Paper, a post-tax discount rate and post-tax cash flows are used as observable inputs, and then the pre-tax discount rate is calculated from this to comply with the disclosure requirements under IAS 36. The pre-tax discount rate for the Group has been calculated to be 12.7% (FY23: 12.3%). Sensitivity analysis – retail stores If an indicator of impairment has been identified and a CGU’s recoverable amount is required to be estimated, the results of the Group’s impairment tests are dependent upon estimates and judgements made by management. No indicators of impairment were identified in FY24 and therefore no recoverable amount was estimated (FY23: sensitivity analysis to potential changes in key assumptions were reviewed and there were no reasonably possible changes to key assumptions that would have caused the carrying amount of any CGU to exceed its recoverable amount). 13. Inventories FY24 FY23 £m £m Raw materials 2.2 2.3 Finished goods 252.4 255.5 Inventories net of provisions 254.6 25 7. 8 FY24 FY23 £m £m Inventory provision 2.6 2.7 Inventory written off to Consolidated Statement of Profit or Loss 0.9 0.8 The cost of inventories recognised as an expense and included in cost of sales amounted to £284.3m (FY23: £348.8m). The remainder of total cost of sales of £301.9m (FY23: £382.2m) relates to freight including shipping out costs. 14. Trade and other receivables FY24 FY23 £m £m Trade receivables 55.1 80.6 Less: allowance for expected credit losses (0.8) (1.8) Trade receivables – net 54.3 78.8 Other receivables 7.7 7.5 62.0 86.3 Prepayments 6.8 6.7 68.8 93.0 All trade and other receivables are expected to be recovered within 12 months of the year-end date. Due to the short-term nature of the current receivables, their carrying amount is considered to be the same as their fair value. The carrying value of trade receivables represents the maximum exposure to credit risk. For some trade receivables the Group may obtain security in the form of guarantees, insurances or letters of credit which can be called upon if the counterparty is in default under the terms. As at 31 March 2024 the amount of collateral held was £0.3m (FY23: £0.3m). As at 31 March 2024 trade receivables of £1.9m (FY23: £4.5m) were due over 90 days, trade receivables of £0.7m (FY23: £1.4m) were due between 60-90 days and trade receivables of £52.5m (FY23: £75.0m) were due in less than 60 days. The Group establishes a loss allowance that represents its estimate of potential losses in respect of trade receivables, where it is deemed that a receivable may not be recovered, and considers factors which may impact risk of default. Where appropriate, we have grouped these receivables with the same overall risk characteristics. When the receivable is deemed irrecoverable, the provision is written off against the underlying receivables. The Group applies the IFRS 9 simplified approach to measuring expected credit losses (bad debt provision) which uses a lifetime expected loss allowance for all trade receivables.  FINANCIAL STATEMENTS 185DR. MARTENS PLC ANNUAL REPORT 2024 14. Trade and other receivablescontinued To measure expected credit losses (bad debt provision), trade receivables have been grouped based on customer segment, geographical location, and the days past due. The expected loss rates are based on the historical credit losses experienced in previous periods. The rates are adjusted to reflect current and forward-looking information, including macroeconomic factors, by obtaining and reviewing relevant market data affecting the ability of customers to settle the receivables based on their customer segment and geographical location. Where objective evidence exists that a trade receivable balance may be impaired, provision is made for the difference between its carrying amount and the present value of the estimated cash that will be recovered. Evidence of impairment may include such factors as a customer entering insolvent administration proceedings. As at 31 March 2024 trade receivables were carried net of expected credit losses (bad debt provision) of £0.8m (FY23: £1.8m). The individually impaired receivables relate mainly to accounts which are outside the normal credit terms. The ageing analysis of these provisions against trade receivables is as follows: FY24 FY23 £m £m Up to 60 days 0.1 0.4 60 to 90 days – 0.1 Over 90 days 0.7 1.3 0.8 1.8 FY24 FY23 £m £m At 1 April 1.8 0.7 Change in provision for expected credit losses (1.0) 1.1 At 31 March 0.8 1.8 Debtors days 52 52 The carrying amount of the Group’s trade and other receivables is denominated in the following currencies: FY24 FY23 £m £m UK Sterling 4.9 4.1 Euro 13.1 28.0 US Dollar 27.4 43.7 Japanese Yen 2.5 1.5 Other currencies 6.4 1.5 54.3 78.8 15. Cash and cash equivalents FY24 FY23 £m £m Cash and cash equivalents 111.1 157.5 186 DR. MARTENS PLC ANNUAL REPORT 2024 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FORTHEYEARENDED31MARCH2024CONTINUED 16. Trade and other payables FY24 FY23 £m £m Trade payables 33.0 64.2 Taxes and social security costs 12.2 10.2 Other payables 7.6 5.6 52.8 80.0 Accruals 39.4 47.7 92.2 1 2 7.7 1 1. Included within accruals is the refund liability of £3.9m (FY23: £4.5m) and deferred income of £2.5m (FY23: £1.8m). The balance of £33.0m (FY23: £41.4m) consists of accruals for royalties, goods received not invoiced and other accruals. All trade and other payables are expected to be settled within 12 months of the year-end date. Due to the short-term nature of the current payables, their carrying amount is considered to be the same as their fair value. At 31 March 2024, other payables included £6.3m (FY23: £5.6m) in relation to employment related payables, mainly the holiday pay accrual. 17. Borrowings Note FY24 FY23 £m £m Current Bank interest 8.4 6.0 Lease liabilities 28 47.0 28.1 Total current 55.4 34.1 Non-current Bank loans (netofunamortised bank fees) 286.3 293.4 Lease liabilities 28 135.3 124.3 Total non-current 421.6 417.7 Total borrowings 47 7.0 451.8 Analysis of bank loan: Non-current bank loans (netofunamortised bank fees) 286.3 293.4 Add back unamortised fees 2.3 3.4 Total gross bank loan 288.6 296.8 1 1. From total borrowings, only bank loans (excluding unamortised bank fees) and lease liabilities are included in debt for bank loan covenant calculation purposes. On 29 January 2021, the Group entered into a New Facilities Agreement, comprising a new Term Loan B facility of €337.5m (equivalent to £300.0m at that date) and a new multi-currency revolving credit facility of £200.0m. These facilities have a maturity date of 2 February 2026. Included within this agreement is a committed ancillary facility of which £3.4m (FY23: £3.7m) has been utilised primarily related to landlord bank guarantees. During the year the Group drew down £30.0m (FY23: £nil) of debt under the revolving credit facility to support short-term working capital requirements, and this was fully repaid during the year on 30 November 2023. The Group value of the bank loan as at 31 March 2024 (excluding unamortised bank fees and accrued interest) of £288.6m (FY23: £296.8m) is £11.4m lower (FY23: £3.2m lower) than the amount borrowed on 29 January 2021 due to an appreciation of the GBP/Euro foreign exchange rate movement. The Group’s total gross bank loan is denominated in Euros and loan repayments will occur in February 2026. The Group’s total gross bank loan is denominated in the following currencies: FY24 FY23 £m £m Euro Term Loan B 288.6 296.8 Total bank loan 288.6 296.8 1 1. Euro denominated amount €337.5m (FY23: €337.5m). FINANCIAL STATEMENTS 187DR. MARTENS PLC ANNUAL REPORT 2024 17. Borrowingscontinued Loan repayments will occur as follows: Term Loan B (Euro) £m Year to 31 March 20 26 (2 Febr uary 2026) (€337.5m) 288.6 Total 288.6 Interest of the Euro Term Loan B is charged with a variable margin depending on the Group leverage over floating EURIBOR. The weighted total interest rate for this instrument in the year was 6.6% (FY23: 3.57%). IMPLEMENTATION OF ALTERNATIVE BENCHMARK INTEREST RATES Following the cessation of several ‘Inter Bank Offer Rates’ (IBORs) the Group has continued to transition to using alternative benchmark interest rates where appropriate, with the overall impact assessed as being immaterial. The Group’s existing £200m multi-currency revolving credit facility was transitioned to allow the continued drawing of GBP and JPY as currencies fixing against Risk Free Rates (SONIA and TONIA respectively) from LIBOR. The Group’s €337.5m Euro Term Loan B currently fixes against floating EURIBOR where, following a methodology reform of this benchmark by the European Money Markets Institute (EMMI) in 2019, no indication has been given that it is likely to cease in the near future. The Group assesses there to be no other material impact as part of the reform and has no interest rate hedge accounting relationships as at 31 March 2024. BANK LOANS FY24 FY23 £m £m Revolving credit facility utilisation Guarantees 3.4 3.7 Total utilised facility 3.4 3.7 Available facility (unutilised) 196.6 196.3 Total revolving facility 200.0 200.0 % % Interest rate charged on unutilised facility 0.90 0.83 The bank loans are secured by a fixed and floating charge over all assets of the Group. On 29 January 2021, the Group entered into a £200.0m multi-currency revolving credit facility available until 2 February 2026. FAIR VALUE MEASUREMENT The fair value of the items classified as loans and borrowings is shown above. The book and fair values of borrowings are deemed to be materially equal. Movements in bank loans (excluding the accrual and payment of interest) were as follows: Cash flows Foreign Repayment of exchange 31 March 1 April 2023 New loans capital movement 2024 £m £m £m £m £m Euro Term Loan B 296.8 – – (8.2) 288.6 Total borrowings 296.8 – – (8.2) 288.6 Cash flows Foreign Repayment of exchange 31 March 1 April 2022 New loans capital movement 2023 £m £m £m £m £m Euro Term Loan B 285.6 – – 11.2 296.8 Total borrowings 285.6 – – 11.2 296.8 188 DR. MARTENS PLC ANNUAL REPORT 2024 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FORTHEYEARENDED31MARCH2024CONTINUED 17. Borrowingscontinued NET DEBT 1 RECONCILIATION The breakdown of net debt 1 was as follows: FY24 FY23 £m £m Cash and cash equivalents 111.1 157.5 Bank loans (netofunamortised bank fees) (286.3) (293.4) Lease liabilities (182.3) (152.4) Net debt (3 57.5) (288.3) 1 1. Alternative Performance Measure ‘APM’ as defined in the Glossary on pages 220 and 221 . 18. Provisions Property provisions Total £m £m At 1 April 2022 1.9 1.9 Arising during the year 2.7 2.7 Amounts utilised (0.2) (0.2) At 31 March 2023 4.4 4.4 Arising during the year 2.5 2.5 Amounts utilised (0.4) (0.4) Foreign exchange (0.2) (0.2) At 31 March 2024 6.3 6.3 Property provisions relate to the estimated repair and restoration costs for retail stores at the end of the lease. The provisions are not discounted for the time value of money as this is not considered materially different from the current cost. 19. Derivative assets and liabilities FY24 FY23 £m £m Assets Foreign exchange forward contracts – Current 1.5 0.5 Foreign exchange forward contracts – Non-current 0.1 – Liabilities Foreign exchange forward contracts – Current (0.1) (1.3) Foreign exchange forward contracts – Non-current – – Derivative financial instruments consist of foreign exchange forward contracts, which are categorised within Level 2 (refer to note 2.16 for details on fair value hierarchy categorisation). The full fair value of a derivative is classified as a non-current asset or liability if the remaining maturity is more than 12 months and as a current asset or liability if the maturity of the derivative is less than 12 months. Foreign exchange forward derivatives The Group takes a holistic approach to foreign exchange risk, viewing exposures on Group wide net cash flow basis, seeking to maximise natural offsets wherever possible. Where considered material the Group manages its exposure to variability in GBP from foreign exchange by hedging highly probable future cash flows arising in other currencies. The Group’s principal net currency exposures are to EUR, CAD, JPY and USD. FINANCIAL STATEMENTS 189DR. MARTENS PLC ANNUAL REPORT 2024 19. Derivative assets and liabilities continued The Group adopts a rolling, layered approach to hedging its operating cash flows using forward foreign exchange contracts on an 18-month horizon. Other derivative contracts and longer tenors may be used provided these are approved by the Board and Audit and Risk Committee. The Group also utilises foreign exchange derivatives in a hedging relationship to partially hedge the foreign exchange translation risk (into functional GBP) on its term loan. The following table represents the nominal amounts and types of derivatives held as at each Balance Sheet date: FY24 FY23 Average foreign exchange rate Cash flow hedges: sell GBP buy EUR 1.1539 1.1225 Cash flow hedges: sell EUR buy GBP 1.1366 1.1381 Derivatives measured at fair value through profit or loss: sell EUR buy GBP 1.1448 – Nominal amounts Cash flow hedges: sell GBP buy EUR €m €m Less than a year 130.0 136.3 More than a year but less than two years – – Cash flow hedges: sell EUR buy GBP £m £m Less than a year 66.5 76.0 More than a year but less than two years 2.1 5.8 Derivatives measured at fair value through profit or loss: sell EUR buy GBP £m £m Less than a year 1.9 – More than a year but less than two years – – For hedges of forecast receipts and payments in foreign currencies, the critical terms of the hedging instruments match exactly with the terms of the hedged items and, therefore, the Group performs a qualitative assessment of effectiveness. The fair value of forecast hedge items are assessed to move materially equally and opposite to continuing cash flow hedge instruments. Ineffectiveness may arise if the timing of the forecast transaction changes from what was originally estimated or if there are changes in the credit risk of the Group or the derivative counterparty. The hedge ratio is 1:1. If a hedged item is no longer expected to occur, the hedge instruments are immediately de-designated from a cashflow hedge relationship. Amounts recognised in relation to de-designated derivatives are released from the hedging reserve and thereafter movements are classified as fair value through profit or loss. Amounts de-designated during the year ended 31 March 2024 were not material. (Losses)/gains reclassified from the Consolidated Statement of Comprehensive Income to the Consolidated Statement of Profit or Loss during the period are as follows: FY24 FY23 £m £m Revenue 1.5 (1.5) Foreign exchange (losses)/gains (5.4) 4.0 (3.9) 2.5 Derivative financial assets and liabilities are subject to offsetting, enforceable master netting arrangements with counterparties. However, these amounts are presented gross on the face of the Balance Sheet as the conditions for netting specified in IAS 32 ‘Financial Instruments Presentation’ are not met. FY24 Gross carrying Amounts not amounts offset Net amounts £m £m £m Derivative financial assets 1.6 (0.1) 1.5 Derivative financial liabilities (0.1) 0.1 – 190 DR. MARTENS PLC ANNUAL REPORT 2024 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FORTHEYEARENDED31MARCH2024CONTINUED 19. Derivative assets and liabilities continued FY23 Gross carrying Amounts not amounts offset Net amounts £m £m £m Derivative financial assets 0.5 (0.4) 0.1 Derivative financial liabilities (1.3) 0.4 (0.9) 20. Investments FY24 FY23 £m £m Investments 1.0 1.0 On 16 January 2023 the Group made an investment of £1.0m in the share capital of Generation Phoenix Ltd (GP), a company that specialises in producing a sustainable alternative to leather and produces a recycled leather product using part processed offcuts. 21. Financial instruments IFRS 13 requires the classification of financial instruments measured at fair value to be determined by reference to the source of inputs used to derive fair value. The fair values of all financial instruments, except for leases, in both years are materially equal to their carrying values. All financial instruments are measured at amortised cost with the exception of derivatives, cash amounts held within Money Market Funds, and investments in equity instruments which are measured at fair value. Derivatives and Money Market Funds are classified as Level 2 under the fair value hierarchy, and investments in equity instruments as Level 3, which is consistent with that defined in note 2.16 of the Consolidated Financial Statements for the year ended 31 March 2024. 31 March 2024 Fair value Assets at through other Fair value amortised comprehensive through cost income profit or loss Total £m £m £m £m Assets as per Balance Sheet Investments – 1.0 – 1.0 Trade and other receivables excluding prepayments and accrued income 62.0 – – 62.0 Derivative financial assets – Current – 1.5 – 1.5 Derivative financial assets – Non-current – 0.1 – 0.1 Cash and cash equivalents 52.2 – 58.9 111.1 114.2 2.6 58.9 175.7 1 1. A proportion of our cash is invested in high-quality overnight money market funds to mitigate concentration and counterparty risk. Fair value Liabilities at through other Fair value amortised comprehensive through cost income profit or loss Total £m £m £m £m Liabilities as per Balance Sheet Bank debt 288.6 – – 288.6 Bank interest – Current 8.4 – – 8.4 Lease liabilities – Current 47.0 – – 47.0 Lease liabilities – Non-current 135.3 – – 135.3 Derivative financial instruments – Current – 0.1 – 0.1 Trade and other payables excluding non-financial liabilities (mainly tax and social security costs) 77.5 – – 77.5 556.8 0.1 – 556.9 FINANCIAL STATEMENTS 191DR. MARTENS PLC ANNUAL REPORT 2024 21. Financial instruments continued 31 March 2023 Fair value Assets at through other Fair value amortised comprehensive through cost income profit or loss Total £m £m £m £m Assets as per Balance Sheet Investments – 1.0 – 1.0 Trade and other receivables excluding prepayments and accrued income 86.3 – – 86.3 Derivative financial assets – Current – 0.5 – 0.5 Cash and cash equivalents 86.3 – 71.2 157.5 172.6 1.5 71.2 245.3 1 1. A proportion of our cash is invested in high-quality overnight money market funds to mitigate concentration and counterparty risk. Fair value Liabilities at through other Fair value amortised comprehensive through profit cost income or loss Total £m £m £m £m Liabilities as per Balance Sheet Bank debt 293.4 – – 293.4 Bank interest – Current 6.0 – – 6.0 Lease liabilities – Current 28.1 – – 28.1 Lease liabilities – Non-current 124.3 – – 124.3 Derivative financial instruments – Current – 1.3 – 1.3 Trade and other payables excluding non-financial liabilities (mainly tax and social security costs) 115.7 – – 115.7 567.5 1.3 – 568.8 GROUP FINANCIAL RISK FACTORS The Group’s activities expose it to a wide variety of financial risks including liquidity, credit and market risk (including foreign exchange and interest rate risks). The Group’s Treasury policies seek to manage residual financial risk to within the Board agreed tolerance in a cost-effective manner and taking advantage of natural offsets that exist or can be created through its operating activities. Where appropriate the Group uses derivative financial instruments to hedge certain risk exposures (for example to reduce the impacts of foreign exchange volatility). Risk management is carried out by a central Treasury Department under policies approved by the Board of Directors and the Audit and Risk Committee. Group Finance and Treasury identifies, evaluates and hedges financial risks in close cooperation with the Group’s Regional operating units. The Board agrees written principles for overall risk management as well as written policies covering specific areas such as foreign exchange risk, interest rate risk, credit risk and liquidity risk. These policies cover the allowable use of selective derivative financial instruments and investment management processes for excess liquidity . LIQUIDITY RISK Cash flow forecasting is regularly performed in the operating entities of the Group and aggregated by Group Treasury. Treasury monitors rolling forecasts of the Group’s liquidity requirements to ensure that it has sufficient cash to meet operational needs while maintaining sufficient headroom in its undrawn committed borrowing facilities at all times so that the Group does not breach borrowing limits or covenants. Surplus cash held by operating entities over and above balances required for working capital are transferred to Group Treasury to be managed centrally. Treasury policy is to invest surplus cash in high quality, short-term, interest bearing instruments including current accounts, term deposit and low volatility money market funds. The Group continually reviews any medium to long-term financing requirements to ensure cost effective access to funding is available if and when it is needed (including any debt refinancing). 192 DR. MARTENS PLC ANNUAL REPORT 2024 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FORTHEYEARENDED31MARCH2024CONTINUED 21. Financial instruments continued The table below sets out the contractual maturities (representing undiscounted contractual cash flows) of loans, borrowings and other financial liabilities: At 31 March 2024 Up to Between Between More than 3 months 3 & 12 months 1 & 5 years 5 years Total £m £m £m £m £m Bank loans – Principal – – 288.6 – 288.6 Bank loans – Interest 10.7 11.6 22.3 – 44.6 Total bank loans 10.7 11.6 310.9 – 333.2 Lease liabilities 14.0 39.5 118.5 30.7 202.7 Derivative financial instruments – 0.1 – – 0.1 Trade and other payables excluding non-financial liabilities 7 7.5 – – – 77.5 102.2 51.2 429.4 30.7 613.5 At 31 March 2023 Up to Between Between More than 3 months 3 & 12 months 1 & 5 years 5 years Total £m £m £m £m £m Bank loans – Principal – – 296.8 – 296.8 Bank loans – Interest 7.8 8.6 37.7 – 54.1 Total bank loans 7.8 8.6 334.5 – 350.9 Lease liabilities 8.4 25.9 99.3 39.9 173.5 Derivative financial instruments 0.2 1.1 – – 1.3 Trade and other payables excluding non-financial liabilities 115.7 – – – 115.7 132.1 35.6 433.8 39.9 641.4 CREDIT RISK Credit risk is managed on a Group basis, except for credit risk relating to accounts receivable balances. Each local entity is responsible for managing and analysing the credit risk of their new customers before standard payment and delivery terms and conditions are offered. Credit risk arises from cash and cash equivalents, derivative financial instruments, as well as credit exposures to wholesale and retail customers, including outstanding receivables and committed transactions. Cash investments and derivative transactions are only executed with financial institutions who hold an investment grade rating with at least one of Moody’s, Standard & Poor’s or Fitch’s rating agencies. The Group’s Treasury policy defines strict limits that do not allow concentration of risk with individual counterparties. For wholesale customers, risk control assesses the credit quality of the customer, taking into account its financial position, past experience and other factors. Individual risk limits are regularly monitored. Sales to wholesale customers are settled primarily by bank transfer and retail customers are settled in cash or by major debit/credit cards. The Group has no significant concentration of credit risk as exposure is spread over a large number of customers. MARKET RISK Foreign exchange risk The Group operates internationally and is exposed to foreign exchange risk arising from the various currency exposures, primarily with respect to the US Dollar, Euro, Canadian Dollar and Japanese Yen. Foreign exchange risk arises from future commercial transactions, recognised assets and liabilities and net investments in overseas operations. Foreign exchange risk arises when future commercial transactions or recognised assets and liabilities are denominated in a currency that is not the entity’s functional currency. The Group purchases the vast majority of its inventory from factories in Asia which are paid in US Dollars. On a net basis, the majority of Group EBITDA is earned in currencies other than Pounds Sterling. In addition, the Group has other currency denominated debt and investments in overseas operations whose net assets are exposed to foreign currency translation risk upon consolidation. Cash flow and fair value interest rate risk The Group’s interest rate risk arises from its floating rate bank debt and cash amounts held. Borrowings issued at fixed rates expose the Group to fair value interest rate risk. The Group’s bank debt borrowings are denominated in Euros, and incur interest at variable rates subject to floating EURIBOR with a zero rate floor. At 31 March 2024, if interest rates on bank borrowings had been 50 basis points higher or lower with all other variables held constant, the calculated pre-tax profit for the year would change by £1.5m (FY23: £1.5m). FINANCIAL STATEMENTS 193DR. MARTENS PLC ANNUAL REPORT 2024 21. Financial instruments continued CAPITAL RISK The Group manages its capital to ensure that entities in the Group will be able to continue as going concerns while maximising the return to stakeholders through the optimisation of the debt and equity balances. The Group’s overall strategy remains consistent with that from the past few years. The capital structure of the Group consists of net debt disclosed in note 17 and equity attributable to equity holders of the parent, comprising issued ordinary share capital, reserves and retained earnings as disclosed in notes 23 and 24 and the Consolidated Statement of Changes in Equity. The Group’s Board of Directors reviews the capital structure on an annual basis. The Group is not subject to any externally imposed capital requirement. FOREIGN CURRENCY RISK The Group has analysed the impact of a movement in foreign exchange rate of the major non-GBP currencies on its EBITDA 1 (all other foreign exchange rates remaining unchanged) as follows: 10% appreciation of currency FY24 FY23 £m £m US Dollar 6.1 2.8 Euro 18.5 19.9 Yen 4.3 4.1 1. Alternative Performance Measure ‘APM’ as defined in the Glossary on pages 220 and 221. Note the US Dollar movement is lower as the Group earns US Dollars from its US business and purchases substantially all inventory in US Dollar, which provides a degree of natural offsetting. In addition to the above, a 10% appreciation in Euro against GBP would increase annualised bank loan interest by £2.2m (FY23: £0.9m) under the terms of the new loan agreement. 22. Deferred taxation The analysis of deferred tax assets and liabilities is as follows: FY24 FY23 £m £m Non-current Assets 11.2 11.8 Liabilities (2.8) (1.8) 8.4 10.0 The gross movement on the deferred income tax is as follows: FY24 FY23 £m £m Credit for the year in the Statement of Comprehensive Income 1.6 0.4 The deferred tax asset provided in the financial statements is supported by budgets and trading forecasts and relates to the following temporary differences: • accelerated capital allowances are the differences between the net book value of fixed assets and their tax base; • other temporary differences are the other differences between the carrying amount of an asset/liability and its tax base that eventually will reverse; • unrealised profits in intra-group transactions and expenses; • trade losses expected to be utilised in future years; and • deferred tax on share-based payments in relation to the expected future tax deduction on the exercise of granted share options spread over the vesting period. 194 DR. MARTENS PLC ANNUAL REPORT 2024 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FORTHEYEARENDED31MARCH2024CONTINUED 22. Deferred taxation continued The movement in deferred income tax assets and liabilities during the year is as follows: Accelerated Unrealised Other capital intra-group temporary Share-based allowances profits differences Tax losses payments Total £m £m £m £m £m £m At 1 April 2022 (2.0) 3.2 7. 1 0.6 0.7 9.6 Statement of Profit or Loss (charge)/credit (0.4) 0.8 0.1 0.1 (0.4) 0.2 Credited directly to equity – – 0.2 – – 0.2 Foreign exchange – – – – – – At 31 March 2023 (2.4) 4.0 7.4 0.7 0.3 10.0 Statement of Profit or Loss (charge)/credit (0.8) (0.4) 0.5 (0.1) – (0.8) (Charged)/credited directly to equity – – (0.7) – 0.5 (0.2) Foreign exchange – (0.3) (0.3) – – (0.6) At 31 March 2024 (3.2) 3.3 6.9 0.6 0.8 8.4 Deferred taxation not provided in the financial statements: FY24 FY23 £m £m Tax losses 9.1 9.1 1 1. This is the tax effected amount of losses that have not been provided for in the financial statements, calculated using the rate at which the losses would be expected to be used. There is £36.3m (FY23: £36.6m) of gross tax losses that have not been provided for because they are either capital losses (which can only be used against future capital gains which we are not forecasting) or they are non-trade loan relationship losses which can only be used in the same company (and are in companies we don’t expect to have any loan relationship profits). The deferred tax assets and liabilities have been measured at the corporation tax rate expected to apply to the reversal of the timing difference, based on rates that are enacted or substantively enacted by the end of each reporting period. There are no material temporary differences associated with investments in subsidiaries, branches and associates and interests in joint arrangements, for which deferred tax liabilities have not been recognised. 23. Ordinary share capital FY24 FY24 FY23 FY23 No. £m No. £m Authorised, called up and fully paid Ordinary shares of £0.01 each 961,878,608 9.6 1,000,793,898 10.0 The movements in the ordinary share capital during the year ended 31 March 2024 and 31 March 2023 were as follows: FY24 FY24 FY23 FY23 No. £m No. £m At 1 April 1,000,793,898 10.0 1,000,222,700 10.0 Shares issued 953,845 – 571,198 – Repurchase and cancellation of ordinary share capital (39,869,135) (0.4) – – At 31 March 961,878,608 9.6 1,000,793,898 10.0 The cost of shares purchased by the SIP Trusts is offset against the profit and loss account, as the amounts paid reduce the profits available for distribution by the Company. During the year ended 31 March 2024 Dr. Martens plc repurchased 39.9 million ordinary shares for a total consideration of £50.5m, including transaction costs of £0.5m, as part of a share repurchase programme announced on 1 July 2023. All shares purchased were for cancellation. The repurchased shares represented 4.1% of ordinary share capital. The number of shares in issue is reduced where shares are repurchased. FINANCIAL STATEMENTS 195DR. MARTENS PLC ANNUAL REPORT 2024 24. Treasury shares The movements in treasury shares held by the Company during the year ended 31 March 2024 were as follows: FY24 FY24 FY23 FY23 No. £m No. £m At 1 April 110,153 – 16,925 – Repurchase of shares for cancellation 39,869,135 50.0 – – Cancellation of shares (39,869,135) (50.0) – – Shares issued for share schemes held in trust 284,770 – 93,228 – At 31 March 394,923 – 110,1 53 – On 14 July 2023 Dr. Martens plc announced a share buyback programme. Treasury shares existed during the year as a result of the timing delay between the repurchase of shares under this programme and the subsequent cancellation of these shares. The programme concluded on 19 December 2023. 25. Reserves The following describes the nature and purpose of each reserve within equity: Reserve Description and purpose Ordinary share capital Nominal value of subscribed shares. Hedging reserve Represents the movements in fair value on designated hedging instruments. Treasury shares This reserve relates to shares held by SIP Trusts as ‘treasury shares’. The shares held by the SIP Trusts were issued directly to the Trusts in order to satisfy outstanding employee share options and potential awards under the employee share incentive schemes. The Company issued 284,770 shares directly to the Trusts during the year and held 3 94,923 as at 31 March 2024 shares’. This reserve also included treasury shares repurchased but not yet cancelled, pursuant (31March 2023: 110,153).Thisreserve was previously referred to as ‘capital reserve – own to the share buyback programme, which concluded during FY24. Capital redemption reserve A non-distributable reserve into which amounts are transferred following the redemption or purchase of own shares. The reserve was created in order to ensure sufficient distributable reserves were available for the purpose of redeeming preference shares in the prior years. Merger reserve The difference between the nominal value of shares acquired by Dr. Martens plc (the Parent Company) in the share for share exchange with Doc Topco Limited and the nominal value of shares issued to acquire them on 11 December 2020. Foreign currency translation reserve Includes translation gains or losses on translation of foreign subsidiaries’ financial statements from the functional currencies to the presentational currency. Retained earnings net of distributions and equity-settled share-based awards. Included in retained earnings Retained earnings represent the profits of the Group made in current and preceding years, are distributable reserves. 26. Share-based payments and share schemes EXECUTIVE SHARE PLAN – THE DR. MARTENS LONG TERM INCENTIVE PLAN (LTIP) Awards of shares to Executive Directors and other senior executives are made under the Long Term Incentive Plan (LTIP): the Performance Share Plan (PSP) for the Executive Directors and Global Leadership Team (GLT) and the Restricted Share Unit Plan (RSU) for GLT direct reports and other employees. The LTIP is a discretionary share plan under which awards are approved and granted at the discretion of the Remuneration Committee. Long Term Incentive Plan – Performance Share Plan (PSP) Awards of conditional shares are granted to the Executive Directors and GLT. These awards are currently capable of vesting subject to the achievement of set performance conditions over a three-year performance period and continued service. There are two performance conditions attached to the awards which are Total Shareholder Return (TSR), which is a market-based performance condition, and EPS growth, which is a non-market-based performance condition. The fair value of the TSR element of the performance conditions is calculated and fixed at the date of grant using a Stochastic options pricing model. The fair value of the EPS element of the performance conditions is reviewed at each Balance Sheet date and adjusted through the number of awards expected to vest. The fair value of the PSP is the face value of the awards at the date of grant (calculated using the closing share price on the day preceding grant). The awards will vest to participants at the end of the vesting period subject to the performance conditions of the award being met. The entitlement of any of the awards for leavers are subject to good and bad leaver provisions as set out in the Plan Rules. There are no cash settlement alternatives and the Group accounts for the PSP as an equity-settled plan. Full details on the performance conditions for all the LTIP awards can be found in the Remuneration Report on pages 119 to 133 of the Annual Report. 196 DR. MARTENS PLC ANNUAL REPORT 2024 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FORTHEYEARENDED31MARCH2024CONTINUED 26. Share-based payments and share schemes continued Long Term Incentive Plan – Restricted Share Unit Plan (RSU) Conditional awards of shares under the RSU are granted to GLT direct reports and other employees of the Group. There are no performance conditions attached to the awards, the awards will only vest should the participants remain employed on the vesting date. If participants leave the Group their awards would usually lapse in full however there are good and bad leaver provisions set out in the Plan Rules. The fair value of Restricted Share Unit awards is the face value of the awards at the date of grant (calculated using the closing share price on the day preceding grant). The Group accounts for the Restricted Share Unit awards as an equity-settled plan. MOVEMENTS DURING THE YEAR The following table illustrates the number and weighted average exercise prices (WAEP) of, and movements in, shares subject to LTIP schemes during the year: FY24 FY23 LTIP LTIP No. WAEP No. WAEP Outstanding at the beginning of the year 6,788,582 – 3,187, 8 9 9 – Granted 1 0 ,5 97,18 4 £0.00 4,593,183 £0.00 Vested (653,105) – (402,860) – Forfeited (1,408,092) – (589,640) – Outstanding at the end of the year 15,324,569 £0.00 6,788,582 £0.00 Weighted average contractual life remaining (years) 1.6 £0.00 1.8 £0.00 FAIR VALUE MEASUREMENT The following table lists the inputs to the models used for the plans granted during the year ended 31 March 2024: FY24 LTIP PSP RSU RSU Date of grant 30/06/2023 30/06/2023 14/12/2023 Share price (pence) 119.3 119.3 88.5 Fair value at grant date (pence) 96.7 119.3 88.5 Exercise price (pence) 0 0 0 Dividend yield (%) Nil Nil Nil Expected volatility (%) 55.05% Nil Nil Risk-free interest rate (%) 5.13% Nil Nil Expected life (years) 3 years 3 years 3 years Model used Monte Carlo n/a n/a FY23 LTIP PSP RSU RSU Date of grant 15/06/2022 15/06/2022 08/12/2022 Share price (pence) 238 238 193 Fair value at grant date (pence) 205 238 193 Exercise price (pence) 0 0 0 Dividend yield (%) Nil Nil Nil Expected volatility (%) 50.71% Nil Nil Risk-free interest rate (%) 2.23% Nil Nil Expected life (years) 3 years 3 years 2.7 years Model used Monte Carlo N/A N/A FINANCIAL STATEMENTS 197DR. MARTENS PLC ANNUAL REPORT 2024 26. Share-based payments and share schemes continued The following schemes granted in FY22 were also still in existence during FY23 and FY24: FY22 LTIP PSP RSU RSU Date of grant 15/12/2021 06/07/2021 15/12/2021 Share price (pence) 388 453 388 Fair value at grant date (pence) 301 453 388 Exercise price (pence) 0 0 0 Dividend yield (%) Nil Nil Nil Expected volatility (%) 54.57% Nil Nil Risk-free interest rate (%) 0.42% Nil Nil Expected life (years) 2.3 years 2.7 years 2.3 years Model used Monte Carlo N/A N/A VOLATILITY For determining expected volatility, IFRS 2 requires the fair value to take into account historical volatility over the expected term. Where Dr. Martens plc has been listed for less than the expected life of the plans it does not have sufficient information on historical volatility, and it computes volatility for the longest period for which trading activity is available. It also considered the historical volatility of similar entities in the same industry for the equivalent period of their listed share price history. ALL EMPLOYEE PLAN – SHARE INCENTIVE PLAN (SIP) AND INTERNATIONAL SHARE INCENTIVE PLAN The Group has two SIP Trusts, Dr. Martens plc UK Share Incentive Plan Trust (‘SIP-UK’) and Dr. Martens plc International Share Incentive Plan Trust (‘SIP-International’), for the purpose of facilitating the holding of shares in Dr. Martens plc for the benefit of employees of the Group. The assets of the employee share trusts are held by the separate trusts, of which the Directors consider that Dr. Martens plc has control for accounting purposes. Share Incentive Plan (SIP): Buy As You Earn In October 2021 employees were granted Free Shares under the Share Incentive Plan (SIP), these shares remain under restriction and will become available to employees from October 2024 when the forfeiture period lifts. In September 2022 the Company launched the purchase and matching element of the SIP known as Buy As You Earn (BAYE). Employees can elect to make a monthly contribution from their gross pay to purchase shares in Dr. Martens plc (‘partnership shares’). For each partnership share acquired, the Company will award a ‘matching’ share. Matching shares are subject to a three-year forfeiture period, and employees will receive the matching shares if they remain employed at the end of this period of service. The matching shares fall within the scope of IFRS 2 and are classed as equity-settled share-based payments with a three-year forfeiture period, due to the condition of continued service for three years from the allocation date. A new invitation to join the plan will be rolled out each year effective 1 September. On 11 November 2022, the first matching shares were allocated to employees who had opted into the plan and purchased partnership shares. These awards are subject to a three-year forfeiture period after the date of purchase of the corresponding partnership shares. There are no cash settlement alternatives and the Group accounts for the SIP as an equity-settled plan. Global Share Incentive Plan (SIP): International Buy As You Earn In October 2021 employees were granted Free Shares under the International Share Incentive Plan (SIP); these shares vested in April 2022 where sufficient shares were sold to cover their tax/social security liabilities where applicable and are now beneficially owned by the employees. In March 2023 the Company launched the purchase and matching element of the International SIP known as International Buy As You Earn (BAYE). Employees can elect to make a monthly contribution from their net pay to purchase shares in Dr. Martens plc (‘partnership shares’). Partnership shares are purchased quarterly with the first purchase in July 2023. For each partnership share acquired, the Company will award a ‘matching’ share annually. Matching shares are subject to a three-year forfeiture period. The matching shares fall within the scope of IFRS 2 and are classed as equity-settled share-based payments with a three year forfeiture period, and employees will receive the matching shares if they remain employed at the end of this period of service. A new invitation to join the plan will be rolled out each year effective 1 September. 198 DR. MARTENS PLC ANNUAL REPORT 2024 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FORTHEYEARENDED31MARCH2024CONTINUED 26. Share-based payments and share schemes continued The following table illustrates the number and weighted average exercise prices (WAEP) of, and movements in, SIP shares during the year: FY24 FY23 SIP SIP No. No. Outstanding at the beginning of the year 92,318 – Granted 335,940 93,591 Vested – – Forfeited (42,735) (1,273) Outstanding at the end of the year 385,523 92,318 Weighted average contractual life remaining (years) 2 years 3 years FAIR VALUE MEASUREMENT The following table lists the inputs to the model used for the SIP plans for the years ended 31 March 2024 and 2023: FY24 FY23 SIP SIP Date of grant 22/09/2023 15/09/2022 Share price (pence) 82-165 128-290 Fair value at grant date (pence) 82-165 128-290 Exercise price (pence) 0 0 Dividend yield (%) Nil Nil Expected volatility (%) 0 0 Risk-free interest rate 0 0 Expected life (years) 3 years 3 years Model used N/A N/A Share schemes – additional information Employer payroll taxes are being accrued, where applicable, at local rate, which management expects to be the prevailing rate when the awards are exercised, based on the share price at the reporting date. The total employer payroll taxes for the year relating to all the awards was £0.2m (FY23: £nil). Included in staff costs and accruals is £0.1m (FY23: £0.4m) in relation to expenses arising from cash-settled share-based payments. Included in staff costs is £3.9m (FY23: £0.5m) in relation to expenses arising from equity-settled share-based payments. Within this amount is £0.1m (FY23: £nil) in relation to the SIP. Global Bonus Scheme Share Plan The Remuneration Committee of the Group has determined that a proportion of the annual Executive Bonus Scheme will be utilised (on a net basis) to purchase Parent Company shares. There were no cancellations or modifications during the year. FINANCIAL STATEMENTS 199DR. MARTENS PLC ANNUAL REPORT 2024 27. Financial commitments The Group is party to a number of warehousing agreements whereby it is committed to certain costs which are not required to be reflected on the Balance Sheet. These costs pertain to storage costs for some warehouses that do not meet the recognition requirements of IFRS 16, and the fixed-cost elements of the additional services that the Group’s warehouse operators provide. The below table discloses the contractual cash flows that the Group is committed to under these arrangements, excluding the effects of future rate increases allowable within the agreements. FY24 FY23 £m £m Within 1 year 7.4 8.2 1 to 5 years 9.0 16.7 Over 5 years – – 16.4 24.9 Short-term leases for retail stores are not required to be included above as the portfolio of short-term leases to which the Group is committed to at the end of the reporting period is not dissimilar to the portfolio of short-term leases to which the short-term lease expense disclosed in note 28 relates. Guarantees exist in the form of a rent guarantees to various landlords of £3.2m (FY23: £3.5m) and other guarantees of £0.2m (FY23: £0.2m). These guarantees which aggregate to £3.4m (FY23: £3.7m) are guaranteed under the revolving credit facility. Capital expenditure contracted for at the end of the reporting period but not recognised as liabilities is as follows: FY24 FY23 £m £m Property, plant and equipment – 1.7 The Group has additional commitments relating to leases where the Group has entered into an obligation but does not yet have control of the underlying asset. The future lease payments to which the Group is committed, over the expected lease term, but are not recorded on the Group’s Balance Sheet are as follows: FY24 FY23 £m £m Within 1 year 0.3 1.1 1 to 5 years 0.9 6.6 Over 5 years 0.1 8.5 1.3 16.2 28. Leases Set out below are the carrying amounts of lease liabilities (included under interest-bearing loans and borrowings) and the movements during the year: Note FY24 FY23 £m £m At 1 April 152.4 112.9 Additions 72.5 60.6 Reassessments (4.7) 5.5 Modifications 10.1 (0.8) Interest expense 7 8.6 4.8 Lease capital and interest repayments (52.2) (33.9) Foreign exchange (4.4) 3.3 At 31 March 182.3 152.4 Current 17 47.0 28.1 Non-current 17 135.3 124.3 1 1. Additions comprises RoU additions less working capital of £4.5m (FY23: £5.9m) . 200 DR. MARTENS PLC ANNUAL REPORT 2024 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FORTHEYEARENDED31MARCH2024CONTINUED 28. Leases continued The following amounts were recognised in the Statement of Profit or Loss: Note FY24 FY23 £m £m Depreciation expense of right-of-use assets 51.3 32.2 Gain on remeasurement of leases (1.1) – Interest expense on lease liabilities 7 8.6 4.8 Expenses relating to short-term leases 0.3 1.3 Variable lease payments 3.5 2.8 Total operating expenses recognised in profit 3.8 4.1 Total amount recognised in profit 62.6 41.1 VARIABLE LEASE PAYMENTS ON SALES Some leases of retail stores contain variable lease payments that are based on sales that the Group makes at the store. These payment terms are common in retail stores in some countries where the Group operates. Fixed and variable payments for the year ended 31 March 2024 were as follows: Estimated annual impact on rent Variable of a 1% increase Fixed payments payments Total payments in sales £m £m £m £m FY24: Leases with lease payments based on sales 13.5 3.5 17.0 0.1 FY23: Leases with lease payments based on sales 10.2 2.8 13.0 0.1 Turnover related rent is where the contract states the lease rent is the higher of the fixed base rent or percentage of turnover of the store. Unless specified otherwise in the lease, turnover rent is defined as net turnover (i.e. excluding returns), not including click and collect. To verify the correct rent, the landlord often requests ‘turnover certificates’ on a regular basis, e.g. monthly/quarterly/annually. The rent is invoiced in arrears based on this calculation and accrued monthly. It is paid as invoiced depending on the lease terms. The fixed base element is capitalised as above and the variable element (based on turnover) is expensed to the Consolidated Statement of Profit or Loss. EXTENSION OPTIONS Some leases contain extension options exercisable by the Group up to one year before the end of the non-cancellable contract period. Where practicable, the Group seeks to include extension options in new leases to provide operational flexibility. The extension options held are exercisable only by the Group and not by the lessors. The Group will reassess and remeasure when there is a significant event or change in circumstances. For example, lease renewals or business decisions to exercise lease breaks. These are reviewed and embedded to the model by the Property Accountant as they occur. Potential future lease payments Lease liabilities not included in recognised lease liabilities (discounted) (undiscounted) £m £m FY24: Leases with lease extension options 43.3 84.0 FY23: Leases with lease extension options 35.3 56.6 FINANCIAL STATEMENTS 201DR. MARTENS PLC ANNUAL REPORT 2024 29. Pensions DEFINED CONTRIBUTION SCHEME The Group operates a defined contribution pension scheme for its employees. The Group’s expenses in relation to this scheme were £5.4m for the year ended 31 March 2024 (FY23: £4.7m) and at 31 March 2024 £1.0m (FY23: £0.8m) remained payable to the pension fund. DEFINED BENEFIT SCHEME Dr Martens Airwair Group Limited and Airwair International Limited (subsidiaries of the Group) operate a pension arrangement called the Dr. Martens Airwair Group Pension Plan (the Plan). The Plan has a defined benefit section that provides benefits based on final salary and length of service on retirement, leaving service or death. The defined benefit section closed to new members on 6 April 2002 and closed to future accrual with effect from 31 January 2006. The Plan also has a defined contribution section that provides money purchase benefits to some current and former employees. The Plan is managed by a board of Trustees appointed in part by Airwair International Limited and in part from elections by members of the Plan. The Trustees have responsibility for obtaining valuations of the fund, administering benefit payments and investing the Plan’s assets. The Trustees delegate some of these functions to their professional advisers where appropriate. The defined benefit section of the Plan is subject to the Statutory Funding Objective under the Pensions Act 2004. A valuation of the Plan is carried out at least once every three years to determine whether the Statutory Funding Objective is met. The last valuation was carried out at 30 June 2022 which confirmed that the Plan had sufficient assets to meet the Statutory Funding Objective. The next valuation is due at 30 June 2025. The Statutory Funding Objective does not currently impact on the recognition of the Plan in these financial statements. During the year, no discretionary benefits were awarded. There were no Plan amendments, settlements or curtailments during the year. The weighted average duration of the defined benefit obligation is approximately 12 years (FY23: 13 years). Around 50% of the undiscounted benefits are due to be paid beyond 17 years’ time, with the projected actuarial cash flows declining to zero in about 70 years. KEY RISKS The defined benefit section of the Plan exposes Airwair International Limited to a number of risks: • Investment risk. The Plan holds investments in asset classes, such as equities, which have volatile market values and while these assets are expected to provide real returns over the long term, the short-term volatility can cause additional funding to be required if a deficit emerges. • Interest rate risk. The value of the Plan’s liabilities is assessed using market yields on high quality corporate bonds to discount the liabilities. As the Plan holds assets such as equities, the value of the assets and liabilities may not move in the same way. The Plan holds derivatives to manage a proportion of the interest rate risk. • Inflation risk. A significant proportion of the benefits under the Plan are linked to inflation. Although the Plan’s assets are expected to provide a good hedge against inflation over the long term, movements in inflation expectations over the short term could lead to a deficit emerging. The Plan holds some derivatives to hedge a proportion of the potential changes in the value of the liabilities due to changes in market inflation expectations. • Mortality risk. In the event that members live longer than assumed, a deficit could emerge in the Plan. Although the Lloyds Banking Group Pensions Trustees Limited v. Lloyds Bank PLC (and others) court judgment on 26 October 2018 (and the subsequent court judgment on 20 November 2020) provided some clarity in respect of GMP equalisation and the obligations that this places on schemes, the actual impact of equalising the Plan’s GMPs remains uncertain. An approximate allowance equivalent to 1.1% (FY23: 0.8%) of the value of the liabilities has been made in the disclosures for the impact of GMP equalisation. There were no other plan amendments, curtailments or settlements during the year. A judgment in the High Court case of Virgin Media vs NTL Trustees was handed down on 16 June 2023. The judge ruled that, where benefit changes were made without a valid ‘section 37’ certificate from the Scheme Actuary, those changes could be considered void. The judgment could have material consequences for some defined benefit schemes, such as the Plan, which previously contracted-out of the state pension system. The Group understands that the judgment is due to be appealed and, as such, there is considerable uncertainty as to whether the judgment will stand and, if it does, the impact on the Plan, if any. As a result of this uncertainty, these disclosures have been calculated assuming that this ruling will not affect the Plan’s benefits. EFFECT OF THE PLAN ON THE COMPANY’S FUTURE CASH FLOWS Airwair International Limited is required to agree a Schedule of Contributions with the Trustees of the Plan following a valuation, which must be carried out at least once every three years. Following the valuation of the Plan at 30 June 2022, a Schedule of Contributions was agreed under which Airwair International Limited was not required to make any contributions to the defined benefit section of the Plan (other than payments in respect of administrative expenses). Accordingly, Airwair International Limited does not expect to contribute to the defined benefit section of the Plan, although it will continue to contribute to the defined contribution section in line with the Schedule of Contributions. The next valuation of the Plan is due at 30 June 2025. If this reveals a deficit then Airwair International Limited may be required to pay contributions to the Plan to repair the deficit over time. 202 DR. MARTENS PLC ANNUAL REPORT 2024 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FORTHEYEARENDED31MARCH2024CONTINUED 29. Pensions continued The amounts recognised in the Balance Sheet (under IAS 19 Employee Benefits) are determined as follows: FY24 FY23 £m £m Fair value of plan assets – defined benefit section 46.7 49.5 Present value of funded obligations – defined benefit section (37.6) (38.4) Surplus of funded plans 9.1 11.1 Impact of asset ceiling (9.1) (11.1) Net pension asset – – Although the Plan has a surplus, this is not recognised on the grounds that Airwair International Limited is unlikely to derive any future economic benefits from the surplus. As such, an asset ceiling has been applied to the Balance Sheet, and the net surplus of £9.1m (FY23: £11.1m) has not been recognised on the Balance Sheet. The net surplus has been capped to £nil (FY23: £nil). A reconciliation of the net defined benefit asset over the year is given below: FY24 FY23 £m £m Net defined benefit asset at beginning of year – – Total defined benefit charge in the Statement of Profit or Loss – – Remeasurement losses in the Statement of Comprehensive Income – – Employer’s contributions – – Net defined benefit asset at end of the year – – The amount charged to the Statement of Profit or Loss and Statement of Comprehensive Income in respect of the defined benefit section of the Plan was £nil (FY23: £nil). Costs in respect of the defined contribution section of the Plan, and other defined contribution arrangements operated by Airwair International Limited, are allowed for separately. The remeasurements in respect of the defined benefit section of the Plan, to be shown in the Statement of Comprehensive Income, are shown below: FY24 FY23 £m £m Losses on defined benefit assets in excess of interest 3.0 18.3 Experience loss on defined benefit obligation 0.3 – Gains from changes to demographic assumptions (0.4) (0.4) Gains from changes to financial assumptions (0.4) (15.4) Change in effect of asset ceiling (2.5) (2.5) Total remeasurements to be shown in other comprehensive income – – The change in defined benefit scheme assets over the year was: FY24 FY23 £m £m At 1 April 49.5 68.6 Interest on defined benefit assets 2.3 1.7 Movement on defined benefit section assets less interest (3.0) (18.3) Benefits paid from the defined benefit section (2.1) (2.5) At 31 March 46.7 49.5 FINANCIAL STATEMENTS 203DR. MARTENS PLC ANNUAL REPORT 2024 29. Pensions continued The change in the defined benefit scheme funded obligations over the year was: FY24 FY23 £m £m At 1 April 38.4 55.3 Past service cost – – Interest cost on defined benefit obligation 1.8 1.4 Experience loss on defined benefit obligation 0.3 – Changes to demographic assumptions (0.4) (0.4) Changes to financial assumptions (0.4) (15.4) Benefits paid from the defined benefit section (2.1) (2.5) At 31 March 37.6 38.4 The change in the effect of the asset ceiling over the year was as follows: FY24 FY23 £m £m At 1 April 11.1 13.3 Net interest charge on asset ceiling 0.5 0.3 Changes in the effect of the asset ceiling excluding interest (2.5) (2.5) At 31 March 9.1 11.1 A breakdown of the assets is set out below, split between those assets that have a quoted market value in an active market and those that do not. The assets do not include any investment in shares of Airwair International Limited, nor any property owned or occupied by the Group. FY24 FY23 £m £m Assets with a quoted market value in an active market: Cash and other Domestic 0.1 0.2 0.1 0.2 Assets without a quoted market value in an active market: Equities and property Domestic 3.0 0.2 Foreign 4.3 4.5 7.3 4.7 Fixed interest bonds Unspecified 6.3 9.4 6.3 9.4 Index linked gilts Domestic 30.0 30.1 30.0 30.1 Alternatives Unspecified 1.8 3.9 1.8 3.9 Property Unspecified 0.4 1.0 0.4 1.0 Insured annuities Domestic 0.9 0.9 0.9 0.9 Cash and other Domestic 1.5 1.0 Foreign – – Unspecified (1.6) (1.7) (0.1) (0.7) Fair value of plan assets 46.7 49.5 204 DR. MARTENS PLC ANNUAL REPORT 2024 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FORTHEYEARENDED31MARCH2024CONTINUED 29. Pensions continued A full actuarial valuation was carried out at 30 June 2022. The results of that valuation were updated to 31 March 2024 by a qualified independent actuary. The principal assumptions selected by Airwair International Limited and used by the actuary to calculate the Plan’s defined benefit obligation were: FY24 FY23 £m £m Discount rate 4.9% 4.8% Inflation assumption (RPI) 3.2% 3.3% Inflation assumption (CPI) 2.5% 2.6% LPI pension increases subject to 5% cap 3.1% 3.2% LPI pension increases subject to 3% cap 2.5% 2.5% Revaluation in deferment 2.5% 2.6% Post retirement mortality assumption 105% (males) and 111% 105% (males) and 111% (females) of S3PA tables, with (females)ofS3PAtables, with allowance for future allowance for future improvements in line with the improvements in line with the CMI_2022 core projection CMI_2021 core projection model using 0% 2020 and model using 7.5% 2020 and 2021 weight parameters, a 2021 weight parameters, a 25% 2022 weight parameter, a long-term rate of improvement of long-term rate of improvement 1.0% p.a. and an initial addition of 1.0% p.a. and an initial of 0.2% addition of 0.2% Tax free cash Members are assumed to take Members are assumed to take 50% of the maximum tax free 50% of the maximum tax free cash possible cash possible Proportion married at retirement or earlier death 80% of male members and 80% of male members and 65% 65% of female members are of female members are assumed to be married at assumed to be married at retirement or earlier death retirement or earlier death Age difference Males three years older than Males three years older than dependant, females one year dependant, females one year younger than dependant younger than dependant Assumed life expectancies on retirement at age 65 are: Retiring today: Male 21.1 21.3 Female 23.2 23.4 Retiring in 20 years’ time: Male 22.1 22.3 Female 24.3 24.5 The key sensitivities of the defined benefit obligation to the actuarial assumptions are shown below: FY24 FY23 £m £m Discount rate Plus 0.5% (2.7) (2.2) Minus 0.5% 3.0 2.4 Plus 1.0% (4.6) (4.4) Minus 1.0% 5.7 5.5 Rate of inflation Plus 0.5% 2.0 0.9 Minus 0.5% (1.8) (0.7) Life expectancy Plus 1.0 year 1.6 1.4 Minus 1.0 year (1.6) (1.4) FINANCIAL STATEMENTS 205DR. MARTENS PLC ANNUAL REPORT 2024 29. Pensions continued The sensitivity illustrations set out above are approximate. They show the likely effect of an assumption being adjusted while all other assumptions remain the same. Only the impact on the liability value (i.e. the defined benefit obligation) is considered – in particular: • No allowance is made for any changes to the value of the Plan’s invested assets in scenarios where interest rates or market inflation expectations change; and • No allowance is made for changes in the value of the annuity policies held by the Plan, which is calculated using the same actuarial assumptions as for the Plan’s defined benefit obligation. Such changes to the asset values would be likely to partially offset the changes in the defined benefit obligation. The net Balance Sheet and Statement of Profit or Loss are not sensitive to the actuarial assumptions used at the current time, due to the effect of the asset ceiling. 30. Related party transactions TRANSACTIONS WITH RELATED PARTIES Transactions between the Company and its wholly owned subsidiaries, which are related parties of the Company, have been eliminated on consolidation and are not disclosed in this note. A list of investments in subsidiary undertakings can be found in note 13 to the Parent Company financial statements. FY24 FY23 £’000 £’000 GFM GmbH Trademarks Amounts incurred 64.7 262.3 Amounts payable by/(owed)at year end (4.6) (6.3) TeamViewer Amounts incurred 16.2 17.1 Amounts payable by/(owed)at year end – – Truepoint Amounts incurred 212.0 – Amounts payable by/(owed)at year end – – 1 2 3 1. GFM GmbH Trademarks is related to the Group as it provides services or has a transactional relationship with the Group and is an equity-accounted joint venture under joint control of the Group. 2. TeamViewer is related to the Group as they provide services or have a transactional relationship with the Group and represents an investment within funds advised by Permira Advisers LLP. The Group’s largest investor, IngreLux S.àr.l., is also owned by funds advised by Permira Advisers LLP. 3. Truepoint is related to the Group as they provide services or have a transactional relationship with the Group and one of the Group’s Independent Directors is also a Director at the related entity. KEY MANAGEMENT PERSONNEL COMPENSATION The compensation of key management (including Executive and Non-Executive Directors) for the year was as follows: FY24 FY23 £m £m Salaries and benefits 5.1 5.5 Pensions 0.3 0.2 LTIPs – Share-based payments 0.6 0.9 206 DR. MARTENS PLC ANNUAL REPORT 2024 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FORTHEYEARENDED31MARCH2024CONTINUED PARENT COMPANY STATEMENTS Parent Company Balance Sheet 208 Parent Company Statement of Changes in Equity 209 Notes to the Parent Company Financial Statements 210 In this section: FINANCIAL STATEMENTS 207DR. MARTENS PLC ANNUAL REPORT 2024 Note Total FY24 £m Total FY23 £m Fixed assets Investments 6 1,413.4 1,413.4 1,413.4 1,413.4 Current assets Debtors 7 3.1 1.7 Cashandcashequivalents 8 0.1 0.2 3.2 1.9 Total assets 1,416.6 1,415.3 Current liabilities Tradeandotherpayables 9 (1.2) (10.5) Total liabilities (1.2) (10.5) Net assets 1,415.4 1,404.8 Equity Ordinarysharecapital 10 9.6 10.0 Treasuryshares 11 – – Capitalredemptionreserve 12 0.4 – Retainedearnings 12 1,405.4 1,394.8 Total equity 1,415.4 1,404.8 Aspermittedbysection408oftheCompaniesAct2006,theCompany’sStatementofProfitorLosshasnotbeenincludedinthese financialstatements. TheCompanygeneratedaprofitfortheyearto31March2024of£114.9m(FY23:£46.2m). Thenotesonpages210to215areanintegralpartofthesefinancialstatements. Thefinancialstatementsonpages208to215wereapprovedandauthorisedbytheBoardofDirectorson29May2024andsigned onitsbehalfby: KENNY WILSON GILES WILSON CHIEFEXECUTIVEOFFICER  CHIEFFINANCIALOFFICER 208 DR. MARTENS PLC ANNUAL REPORT 2024 PARENT COMPANY BALANCE SHEET ASAT31MARCH2024 Company registration number 12960219 Note Ordinary share capital £m Treasury shares £m Capital redemption reserve £m Retained earnings £m Total equity £m At 1 April 2022 10.0 – – 1,406.5 1,416.5 Profitfortheyear – – – 46.2 46.2 Totalcomprehensiveincomefortheyear – – – 46.2 46.2 Dividendspaid 5 – – – (58.4) (58.4) Sharesissued 10 – – – – – Share-basedpayments – – – 0.5 0.5 At 31 March 2023 10.0 – – 1,394.8 1,404.8 Profitfortheyear – – – 114.9 114.9 Totalcomprehensiveincomefortheyear – – – 114.9 114.9 Dividendspaid 5 – – – (57.8) (57.8) Sharesissued 10 – – – – – Share-basedpayments – – – 4.0 4.0 Repurchaseofordinarysharecapital 11 – (50.0) – (0.5) (50.5) Cancellationofrepurchasedordinarysharecapital 11 (0.4) 50.0 0.4 (50.0) – At 31 March 2024 0 9.6 – 0.4 1,405.4 1,415.4 FINANCIAL STATEMENTS 209DR. MARTENS PLC ANNUAL REPORT 2024 PARENT COMPANY STATEMENT OF CHANGES IN EQUITY FORTHEYEARENDED31MARCH2024 1. General information Dr.Martensplc(the‘Company’)isapubliccompanylimitedbysharesincorporatedintheUnitedKingdom,andregisteredanddomiciled inEnglandandWales,whosesharesaretradedontheLondonStockExchange.TheCompany’sregisteredofficeis:28JamestownRoad, Camden,LondonNW17BY.TheprincipalactivityoftheCompanyanditssubsidiaries(togetherreferredtoasthe‘Group’)isthedesign, development,procurement,marketing,sellinganddistributionoffootwear,undertheDr.Martensbrand. 2. Accounting policies Theprincipalaccountingpoliciesadoptedinthepreparationofthefinancialstatementsaresetoutbelow.Thepolicieshavebeen consistentlyappliedtotheperiodspresented,unlessotherwisestated.AmountsarepresentedinGBPandtothenearestmillionpounds (toonedecimalplace)unlessotherwisenoted. BASIS OF PREPARATION ThefinancialstatementsoftheCompanyhavebeenpreparedinaccordancewiththeCompaniesAct2006,andFinancialReporting Standard101‘ReducedDisclosureFramework’(‘FRS101’).Thefinancialstatementshavebeenpreparedonagoingconcernbasisunder thehistoricalcostconvention.FRS101enablesthefinancialstatementsoftheCompanytobepreparedinaccordancewithIFRSbutwith certaindisclosureexemptions.Themainareasofreduceddisclosureareinrespectofequity-settledshare-basedpayments,financial instruments,theStatementofCashFlows,andrelatedpartytransactionswithGroupcompanies.Theaccountingpoliciesadoptedforthe CompanyareotherwiseconsistentwiththoseusedfortheGroupwhicharesetoutonpages165to176.AspermittedbySection408of theCompaniesAct2006,theStatementofProfitorLossoftheCompanyisnotpresentedaspartofthefinancialstatements. ThepreparationoffinancialstatementsinconformitywithFRS101requirestheuseofcertaincriticalaccountingestimates.Italsorequires managementtoexerciseitsjudgementintheprocessofapplyingtheCompany’saccountingpolicies.Theareasinvolvingahigherdegree ofjudgementorcomplexity,orareaswhereassumptionsandestimatesaresignificanttothefinancialstatements,aredisclosedinthe significantjudgementsandestimatessection. Financial Reporting Standard 101 – reduced disclosure exemptions ThisbasisofpreparationhasenabledtheCompanytotakeadvantageoftheapplicabledisclosureexemptionspermittedbyFRS101 inthefinancialstatements.ThefollowingdisclosureshavenotbeenprovidedaspermittedbyFRS101: • acashflowstatementandrelatednotes; • disclosuresinrespectoftransactionswithwhollyownedsubsidiaries; • disclosuresinrespectofcapitalmanagement; • theeffectsofnewbutnotyeteffectiveIFRS; • disclosuresinrespectofthecompensationofkeymanagementpersonnelasrequired;and • statementofcompliancewithallIFRS. TheCompanyhasalsotakentheexemptionunderFRS101availableinrespectoftherequirementsofparagraphs45(b)and46to52 ofIFRS2(Share-basedPayment)inrespectofGroupsettledshare-basedpaymentsastheConsolidatedFinancialStatementsofthe Groupincludetheequivalentdisclosures. GOING CONCERN Thefinancialstatementshavebeenpreparedonagoingconcernbasis.TheabilityoftheCompanytocontinueasagoingconcernis contingentontheongoingviabilityoftheGroup.TheDirectorshaveconsideredthebusinessactivities,aswellastheprincipalrisks,the othermattersdiscussedinconnectionwiththeviabilitystatement,anduncertaintiesfacedbythebusiness.Basedonthisinformation, andtheGroup’stradingandcashflowforecasts,theDirectorsaresatisfiedthattheGroupwillmaintainanadequatelevelofresources tobeabletooperateduringtheperiodunderreview.Refertonote2.1oftheConsolidatedFinancialStatementsforfurtherinformation. DISTRIBUTABLE RESERVES Whenmakingadistributiontoshareholders,theDirectorsdeterminetheprofitsavailablefordistributionbyreferencetoguidanceon realisedanddistributableprofitsunderCompaniesAct2006issuedbytheInstituteofCharteredAccountantsinEnglandandWales. INVESTMENTS Investmentsarestatedatcostlessanyprovisionforimpairment. SHARE-BASED PAYMENTS TheCompanyprovidesbenefitstoemployeesintheformofshare-basedpaymenttransactions,wherebyemployeesrenderservices asconsiderationinexchangeforequityinstruments(‘equity-settledtransactions’).Refertonote2.25oftheConsolidatedFinancial Statementsforfurtherinformation. DIVIDENDS FinaldividendsarerecordedinthefinancialstatementsintheperiodinwhichtheyareapprovedbytheCompany’sshareholders. Interimdividendsarerecordedintheperiodinwhichtheyareapprovedandpaid. 210 DR. MARTENS PLC ANNUAL REPORT 2024 NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS FORTHEYEARENDED31MARCH2024 2. Accounting policies continued SHARE BUYBACK WheretheCompanypurchasesanyofitsownequityinstruments,forexample,pursuanttothesharebuybackprogramme,theconsideration paid,includinganydirectlyattributableincrementalcosts,isdeductedfromequityattributabletotheownersoftheCompany.The repurchasedsharesarerecognisedastreasurysharesuntilthesharesarecancelled.Theprogrammeconcludedon19December2023. SIGNIFICANT JUDGEMENTS AND ESTIMATES Thefollowingjudgementhashadthemostsignificanteffectonamountsrecognisedinthefinancialstatements: Carrying value of investments TheCompanyassessesateachreportingdatewhetherthereisanindicationthatitsinvestmentmaybeimpaired.Ifanyindicationexists, theCompanyestimatestheinvestment’srecoverableamount.Theinvestment’srecoverableamountisthehigherofitsfairvalueless costsofdisposalanditsvalueinuse.Animpairmentispresentiftherecoverableamountislessthanthecarryingvalueoftheasset.In assessinganinvestment’srecoverableamountusingavalueinusecalculation,estimatedfuturecashflowsarediscountedtotheirpresent valueusingapre-taxdiscountratethatreflectscurrentmarketassessmentsofthetimevalueofmoneyandfuturecashflowsarethen extendedintoperpetuityusinglong-termgrowthrates. UK REGISTERED SUBSIDIARIES EXEMPT FROM AUDIT AirwairPropertyLimited,awhollyownedsubsidiary,isexemptfromtheCompaniesAct2006requirementsrelatingtotheauditoftheir individualfinancialstatementsbyvirtueofSection479AoftheCompaniesAct,asthisCompanyhasprovidedaguaranteeforAirwair PropertyLimitedunderSection479CoftheCompaniesAct. 3. Staff costs OtherthantheDirectors,theCompanyhadnoemployeesduringtheyear(FY23:none).DetailsofDirectors’remunerationcanbefound intheRemunerationReportonpages119to133oftheAnnualReport. 4. Auditors’ remuneration TheCompanyhasincurredauditfeesof£21,600(FY23:£20,000)fortheyear. 5. Dividends DetailsinrespectofdividendsproposedandpaidduringtheyearbytheCompanyareincludedinnote10totheConsolidated FinancialStatements. 6. Investments FY24 £m FY23 £m At1April2023 1,413.4 1,413.4 Acquisitions – – At 31 March 2024 1,413.4 1,413.4 INVESTMENT IMPAIRMENT ASSESSMENT TheCompany’sinvestmentisanon-financialassetandrequiredtobereviewedforimpairmentindicatorseachyear-enddate.Ifan indicatorofimpairmentexists,theassetisrequiredtobetestedforimpairmentbyestimatingitsrecoverableamount.Anasset’s recoverableamountisthehigherofitsfairvaluelesscostsofdisposalanditsvalueinuse.Animpairmentispresentiftherecoverable amountislessthanthecarryingvalueoftheasset. AnappropriatechecktobeginwithperIAS36isassessingwhetherthecarryingamountoftheCompany’snetassetsishigherthan themarketcapitalisation.Managementhasreviewedthesharepriceasat31March2024andtheaveragesharepriceoveravariety ofprecedingtimeperiodstoexaminetheaveragemarketcapitalisationforcomparisontoDr.Martensplc’snetassets.Itisrelevantto considerthevolatilityofthesharepriceoverrecentyearswheninterpretingacompany’smarketcapitalisation.Wherethereisvolatility, takingapointintimemeasuremaybemisleading,asmarketsentimentfluctuationscanresultinsignificantpointintimechangesthat arenotnecessarilyreflectiveofthetruevalueofabusiness.Itisalsonotedthatstockmarketmovementsrecentlyarenotuniqueto Dr.Martensonly,andsignificantmacroeconomicandgeopoliticaleventshaveimpactedmanycompanies,againpotentiallyinaccurately reflectingthetruevalueofthebusiness.Oversomeoftheperiodsreviewed,Dr.Martensplc’snetassetsexceedthemarketcapitalisation andotherstheydidnot,thereforeshowingapotentialindicatorofimpairmentbutnotnecessarilyconcludingthattheinvestmentwas impaired.Asthisreviewshowedapotentialimpairmentindicator,managementdecidedtorunatestforimpairment. Theinvestment’srecoverableamountwasdeemedtobemorethanit’scarryingamountandhencenochargewasmadeinthecurrent year(FY23:£nil). FINANCIAL STATEMENTS 211DR. MARTENS PLC ANNUAL REPORT 2024 6. Investments continued Judgements, assumptions and estimates TheresultsoftheCompany’simpairmenttestsaredependentuponestimatesandjudgementsmadebymanagement.Therecoverable amountoftheCompany’sinvestmentisestimatedusingavalueinusecalculation.Thevalueinusecalculationusescashflowforecasts basedonfinancialprojectionsreviewedbytheBoardcoveringafive-yearperiod(pre-perpetuity).Theforecastsarebasedonannual budgetsandstrategicprojectionsrepresentingthebestestimateoffutureperformance.Managementconsidersforecastingoverthis periodtoappropriatelyreflectthebusinesscycleoftheGroup.Thesecashflowsareconsistentwiththoseusedtoreviewgoingconcern andviability,however,arerequiredbyIAS36tobeadjustedforusewithinanimpairmentreviewtoexcludenewretaildevelopmentto whichtheGroupisnotyetcommitted. Operating cash flows Themainassumptionswithintheforecastoperatingcashflowsincludetheachievementoffuturegrowthinecommerce,retailand wholesalechannels,salespricesandvolumes(includingreferencetospecificcustomerrelationshipsandproductlines),rawmaterial inputcosts,thecoststructureoftheGroup,theimpactofforeigncurrencyratesuponsellingpriceandcostrelationshipsandthelevels ofcapitalexpenditurerequiredtosupporteachsaleschannel. Futuresalesareestimatedtoincreaseonacompoundannualgrowthrate(CAGR)basisoverthe5yearspre-perpetuityfromFY24 reportedsalesby10.7%.TheCAGRisforecastedtobeachievedthroughgrowthassetoutinourcentralplanningassumptionsunderlying ourmediumtermforecasts,thefirstthreeyearsofwhichformthebasisoftheassumptionsintheViabilityStatement. ThevalueinusecalculationalsoincludesrepaymentoftheTermLoanBinFebruary2026perIAS36requirements,butinpracticalterms, theloanisexpectedtoberefinancedin2026. TheadjustmentsrequiredtoestimatevalueinuseresultinlowercashflowsthanthemethodusedforassessingtheGroup’sviabilityand hencearenotconsideredlikelytooccur. Pre-tax adjusted discount rates Futurecashflowsarediscountedtopresentvalueusingapre-taxdiscountratederivedfromrisk-freeratesbasedonlong-termgovernment bonds,adjustedforriskfactorssuchasregionandmarketriskintheterritoriesinwhichtheGroupoperatesandthetimevalueofmoney. Consistentwiththe2019IFRSIASBStaffPaper,apost-taxdiscountrateandpost-taxcashflowsareusedasobservableinputs,andthenthe pre-taxdiscountrateiscalculatedfromthistocomplywiththedisclosurerequirementsunderIAS36.Thepre-taxdiscountratefortheGroup hasbeencalculatedtobe12.7%(FY23:12.3%). Long-term growth rate Toforecastbeyondthefive-yeardetailedcashflowsintoperpetuity,along-termaveragegrowthratehasbeenused.Thelong-termgrowth rateappliedforGroupis2.2%(FY23:2.2%).Therateusedincludesaggregationofgeographicalforecastsincludedwithinindustryreports. Sensitivity analysis TheCompanyhasassessedthatthetwosignificantassumptionsusedwithinthevalueinusecalculationarepre-perpetuitysalesgrowth andthepre-taxdiscountrateandpotentialchangesinthesehavebeensensitisedasfollows: FY24 £m Originalheadroom 262.8 Headroomusinga10%decreaseinforecastedsales 1 (150.7) Headroomusinga10%increaseinforecastedsales 1 1,032.0 Headroomusinga1%ptdecreaseinpre-taxdiscountrate 483.0 Headroomusinga1%ptincreaseinpre-taxdiscountrate 83.4 Headroomcombininga10%decreaseinforecastedsalesanda1%ptincreaseinpre-taxdiscountrate (359.2) 1. Thesesensitivitiesarebasedona+/-10%movementinsaleseachyearandintoperpetuity.Adecreaseinforecastsalesof-10%resultsinarevisedCAGRoverthe5years pre-perpetuityfromFY24salesof8.4%,andanincreaseof10%resultsinarevisedCAGRof12.9%. 212 DR. MARTENS PLC ANNUAL REPORT 2024 NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS FORTHEYEARENDED31MARCH2024CONTINUED 6. Investments continued Adecreaseinforecastedsalesof-10%hasbeencalculatedforillustrativepurposesappliedeachyearandintoperpetuity.Thiswould resultinthecarryingamountbeingabovetherecoverableamount.Therequireddifferencesintheforecastedcashflowsusedforthe impairmentassessmentversusthoseusedforthepurposeoftheGroup’sgoingconcernandviabilityassessmentsresultindifferent outputs,andthis-10%salessensitivityoutputslowertotalforecastedsalesinFY25versustheseverebutplausiblescenarioandis consideredunlikely.Furthermore,theexclusionofnewretaildevelopmentasrequiredbyIAS36isnotinlinewithactualexpectedtrading growth.Thereductioninforecastsalesthatwouldresultinthecarryingamountandtherecoverableamountbeingequalwouldbe-7.5%. Anincreaseof1percentagepoint(1%pt)inthepre-taxdiscountrateof12.7%to13.7%hasbeencalculatedforillustrativepurposes andwouldnotresultinthecarryingamountbeingabovetherecoverableamountandisalsonotconsideredlikelygiventhatthepre-tax discountrateinFY23was12.3%andhencehasmovedlessthan0.5%ptssinceFY23.Thepre-taxdiscountratethatwouldresultinthe carryingamountandtherecoverableamountbeingequalwouldbe14.2%.Thissensitivityhasbeenincludedtoprovideanillustration shouldtheforecastedsalesdeclineby-10%andthepre-taxdiscountratealsoincreasesby1%pt.Thiswouldresultinthecarryingamount beingabovetherecoverableamount. AlistoftheCompany’sinvestmentsinsubsidiaryundertakingscanbefoundinnote13. 7. Debtors FY24 £m FY23 £m Incometaxreceivable 0.1 – Socialsecurityandothertaxes – – Prepaymentsandaccruedincome 0.3 0.8 Amountsowedbysubsidiaryundertakings 1 2.7 0.9 3.1 1.7 1. Amountsowedbysubsidiaryundertakingsarenon-interestbearingtradingbalancesandarerepayableondemand. IFRS9expectedcreditlosseshavebeenassessedasimmaterialinrelationtoallbalances. 8. Cash and cash equivalents FY24 £m FY23 £m Cashandcashequivalents 0.1 0.2 9. Trade and other payables FY24 £m FY23 £m Tradecreditors 0.1 0.1 Amountsduetosubsidiaryundertakings 1 0.2 10.3 Accrualsanddeferredincome 0.9 0.1 1.2 10.5 1. Amountsowedtosubsidiaryundertakingsarenon-interestbearingtradingbalancesandarerepayableondemand. FINANCIAL STATEMENTS 213DR. MARTENS PLC ANNUAL REPORT 2024 10. Ordinary share capital FY24 No. FY24 £m FY23 No. FY23 £m Authorised, called up and fully paid Ordinarysharesof£0.01each 961,878,608 9.6 1,000,793,898 10.0 Themovementsintheordinarysharecapitalduringtheyearsended31March2024and31March2023wereasfollows: FY24 FY24 FY23 FY23 Shares no. Ordinary share capital £m Shares no. Ordinary sharecapital £m At1April 1,000,793,898 10.0 1,000,222,700 10.0 Sharesissued 953,845 – 571,198 – Repurchaseandcancellationofordinarysharecapital (39,869,135) (0.4) – – At 31 March 961,878,608 9.6 1,000,793,898 10.0 ThecostofsharespurchasedbytheSIPTrustsisoffsetagainsttheprofitandlossaccount,astheamountspaidreducetheprofits availablefordistributionbytheCompany. 11. Treasury shares ThemovementsintreasurysharesheldbytheCompanyduringtheyearended31March2024wereasfollows: FY24 No. FY24 £m FY23 No. FY23 £m At1April 110,153 – 16,925 – Repurchaseofsharesforcancellation 39,869,135 50.0 – – Cancellationofshares (39,869,135) (50.0) – – Sharesissuedforshareschemes 284,770 – 93,228 – At 31 March 394,923 – 110,153 – On14July2023Dr.Martensplcannouncedasharebuybackprogramme.Treasurysharesexistedduringtheyearasaresultofthe timingdelaybetweentherepurchaseofsharesunderthisprogrammeandthesubsequentcancellationoftheseshares.Theprogramme concludedon19December2023. 12. Reserves Reserve Description and purpose Ordinarysharecapital Nominalvalueofsubscribedshares. Treasuryshares ThisreserverelatestosharesheldbySIPTrustsas‘treasuryshares’.ThesharesheldbytheSIPTrustswere issueddirectlytotheTrustsinordertosatisfyoutstandingemployeeshareoptionsandpotentialawards undertheemployeeshareincentiveschemes.TheCompanyissued284,770sharesdirectlytotheTrusts duringtheyearandheld394,923asat31March2024(31March2023:110,153).Thisreservewaspreviously referredtoas‘capitalreserve–ownshares’.Thisreservealsoincludedtreasurysharesrepurchasedbutnot yetcancelled,pursuanttothesharebuybackprogramme,whichconcludedduringFY24. Capitalredemptionreserve Anon-distributablereserveintowhichamountsaretransferredfollowingtheredemptionorpurchaseof ownshares.Thereservewascreatedinordertoensuresufficientdistributablereserveswereavailable forthepurposeofredeemingpreferencesharesintheprioryears. Retainedearnings Torecognisetheprofitorloss,allothernetgainsandlossesandtransactionswithowners(e.g.dividends) notrecognisedelsewhere,andthevalueofequity-settledshare-basedawardsprovidedtoExecutive Directorsandotherseniorexecutivesaspartoftheirremuneration(refertotheDirectors’Remuneration Reportonpages119to133oftheAnnualReportforfurtherdetails). 214 DR. MARTENS PLC ANNUAL REPORT 2024 NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS FORTHEYEARENDED31MARCH2024CONTINUED 13. Subsidiary undertakings Theregisteredaddressandprincipalplaceofbusinessofeachsubsidiaryundertakingareshowninthefootnotesbelowthetable.The financialperformanceandfinancialpositionoftheseundertakingshavebeenconsolidatedintheConsolidatedFinancialStatements. Name Country of registration Class of share capital held Nature of investment Nature of businessDirect Indirect Airwair(1994)Limited 1 EnglandandWales Ordinary – 100% Managementcompany Airwair(1996)Limited 1 EnglandandWales Ordinary – 100% Managementcompany AirwairInternationalLimited 1 EnglandandWales Ordinary – 100% Footwearretailanddistribution AirwairLimited 1 EnglandandWales Ordinary – 100% Managementcompany AirwairPropertyLimited 1 EnglandandWales Ordinary – 100% Propertyinvestment AmpdebtcoLimited 2 EnglandandWales Ordinary 100% – Managementcompany DMAirwairGermanyGmbH 13 Germany Ordinary – 100% Footwearretailanddistribution DMAirwairSwedenAB 14 Sweden Ordinary – 100% Footwearretailanddistribution Dr.MartensAirwair(Ireland)Limited 12 RepublicofIreland Ordinary – 100% Footwearretailanddistribution Dr.MartensAirwairTrading(Zhuhai) CompanyLimited 4 China Ordinary – 100% Manufacturingsupport Dr.MartensAirwairAustriaGmbH 22 Austria Ordinary – 100% Footwearretailanddistribution DrMartensAirwairBelgiumSA 8 Belgium Ordinary – 100% Footwearretailanddistribution Dr.MartensAirwairCanadaInc. 19 Canada Capitalofnoparvalue – 100% Footwearretailanddistribution DrMartensAirwairFranceSAS 9 France Ordinary – 100% Footwearretailanddistribution DrMartensAirwairGroupLimited 1 EnglandandWales Ordinary – 100% Managementcompany Dr.MartensAirwairHongKongLimited 5 HongKongSAR Ordinary – 100% Footwearretailanddistribution Dr.MartensAirwairJapanK.K. 7 Japan Ordinary – 100% Footwearretailanddistribution Dr.MartensAirwairKoreaLimited 6 Korea Ordinary – 100% Footwearretailanddistribution Dr.MartensAirwairSpainS.L.U. 17 Spain Ordinary – 100% Footwearretailanddistribution Dr.MartensAirwairUSALLC 3 USA Capitalofnoparvalue – 100% Footwearretailanddistribution DrMartensAirwairWholesaleLimited 1 EnglandandWales Ordinary – 100% Footwearretailanddistribution DrMartensAirwairItalyS.R.L. 15 Italy Ordinary – 100% Footwearretailanddistribution DrMartensAirwairNetherlandsB.V. 10 Netherlands Ordinary – 100% Footwearretailanddistribution GFMGmbHTrademarks 11 Germany Ordinary – 50% Trademarkregistration ShanghaiAirwairTradingLimited 16 China Ordinary – 100% Footwearretailanddistribution Dr.MartensAirwairPolandZ.o.o. 20 Poland Ordinary – 100% Footwearretailanddistribution Dr.MartensAirwairDenmarkApS 21 Denmark Ordinary – 100% Footwearretailanddistribution Dr.MartensAirwairVietnamCompany Limited 23 Vietnam Ordinary – 100% Footwearretailanddistribution DrMartensAirwairLimited 1 EnglandandWales Ordinary – 100% Dormant Dr.MartensSports&LeisureLimited 1 EnglandandWales Ordinary – 100% Dormant Dr.MartensAirwairSingaporePTELtd 18 Singapore Ordinary – 100% Non-trading DrMartensAirwair&Co.Limited 1 EnglandandWales Ordinary – 100% Dormant Dr.MartensDept.StoreLimited 1 EnglandandWales Ordinary – 100% Dormant  Thefinancialyearofthisentityendson31Decemberinlinewithlocalrequirements. 1. Cobb’sLane,Wollaston,Northamptonshire,England,NN297SW. 2. 28JamestownRoad,Camden,London,England,NW17BY. 3. 16192CoastalHwy,Lewes,Delaware19958,UnitedStates. 4. No.04B,F16.SeatB,No2021,JiuzhouAvenueWest,Zhuhai519000,GuangdongProvince,China. 5. Unit2306-11,23F,SunLifeTower,TheGatewayTower5,HarbourCity,15CantonRoad,TsimShaTsui,HongKong. 6. 14/F,Room1,2,SBTower,318Dosan-daero,Gangnam-gu,Seoul,RepublicofKorea. 7. 5-2-28Jingumae,Shibuya,Tokyo,Japan150-0001. 8. AvenueduPort86C,Box204,1000Brussels,Belgium. 9. 5,CitéTrévise75009Paris,France. 10.Herikerbergweg238,LunaArena,1101CMAmsterdam,Netherlands. 11.Seeshaupt,LandkreisWeilheim-Schongau,Germany.Note:thisentityisequityaccountednotconsolidated. 12.TMFGroupGroundFloor,TwoDocklandCentral,GuildSt,NorthDock,Dublin,RepublicofIreland,D01K2C5. 13.Wagnerstr.1A,40212Düsseldorf,Germany. 14.Blekingegatan48,11662Stockholm,Sweden. 15.ViaMorimondo26–20143Milano,Italy. 16.Room1610-11,1612,Level16,TowerA,THREEITC,No.183HongqiaoRoad,Xuhui,Shanghai,China. 17.C/PrincipedeVergara,1124APlanta28002,Madrid,Spain. 18.77RobinsonRoad,13-00Robinson77,Singapore068896. 19.221-451DundasStreetWest,Toronto,Ontario,M5T1G8,Canada. 20.Rondo,Daszyńskiego2B,00-843Warsaw,Poland. 21.H.C.AndersensBoulevard38,3.Th,1553,København,1553Langebro,Denmark. 22.Teinfaltstraße8/4,1010Vienna,Austria. 23.Level6&7,FriendshipTower,No.31LeDuanStreet,BenNgheWard,District1,HoChiMinhCity,Vietnam. FINANCIAL STATEMENTS 215DR. MARTENS PLC ANNUAL REPORT 2024 ADDITIONAL INFORMATION Five-year financial summary (unaudited) 217 First half/second half analysis (unaudited) 219 Glossary and Alternative Performance Measures (APMs) 220 Shareholder information 222 Company information IBC In this section: 216 DR. MARTENS PLC ANNUAL REPORT 2024 FY24 £m FY23 £m FY22 £m FY21 1 £m FY20 £m Revenue: Ecommerce 276.3 279.0 262.4 235.4 136.4 Retail 256.8 241.7 185.6 99.7 165.2 DTC 533.1 520.7 448.0 335.1 301.6 Wholesale 5 344.0 479.6 460.3 4 37.9 370.6 877.1 1,000.3 908.3 773.0 672.2 Grossprofit 575.2 618.1 578.8 470.5 401.5 Operatingexpenses (377.7) (373.1) (315.8) (247.6) (217.0) EBITDA 2 197.5 245.0 263.0 222.9 184.5 Profit before tax and exceptional items 93.0 159.4 214.3 150.2 113.0 Profit before tax 3 93.0 159.4 214.3 69.7 101.0 Taxexpense (23.8) (30.5) (33.1) (35.0) (26.2) Profit after tax 69.2 128.9 181.2 34.7 74.8 Earnings per share Basic 7.0p 12.9p 18.1p 3.5p Diluted 7.0p 12.9p 18.1p 3.5p Keystatistics: Pairssold(m) 11.5 13.8 14.1 12.7 11.1 No. of stores 4 239 204 158 135 122 DTCmix% 61% 52% 49% 43% 45% Grossmargin% 2 65.6% 61.8% 63.7% 60.9% 59.7% EBITDA% 2 22.5% 24.5% 29.0% 28.8% 27.4% 1. Resultsfortheyearended31March2021havebeenretrospectivelyrestatedinrelationtoachangeinaccountingpolicyforthetreatmentofcloud-basedsoftware. Thisresultedin£nilimpactoncash. 2. AlternativePerformanceMeasure‘APM’asdefinedintheGlossaryonpages220and221. 3. Postexceptionalitems. 4. Ownstoresonstreetsandmallsoperatedunderarm’slengthleaseholdarrangements. 5. Wholesalerevenueincludingdistributorcustomers. ADDITIONAL INFORMATION 217DR. MARTENS PLC ANNUAL REPORT 2024 FIVE-YEAR FINANCIAL SUMMARY (UNAUDITED) FORTHEYEARENDED31MARCH2024 FY24 £m FY23 £m FY22 £m FY21 1 £m FY20 £m Revenuebyregion: EMEA 431.8 443.0 398.5 335.6 287.9 Americas 325.8 428.2 382.7 295.8 252.2 APAC 119.5 129.1 1 2 7.1 141.6 132.1 877.1 1,000.3 908.3 773.0 672.2 Revenuemix: EMEA% 49% 44% 44% 44% 43% Americas% 37% 43% 42% 38% 37% APAC% 14% 13% 14% 18% 20% EBITDA 2 byregion: EMEA 140.8 146.1 143.8 115.3 92.4 Americas 64.4 100.1 120.0 91.9 75.4 APAC 31.7 33.8 32.6 39.7 35.5 Groupsupportcosts (39.4) (35.0) (33.4) (24.0) (18.8) 197.5 245.0 263.0 222.9 184.5 EBITDA% 2 byregion: EMEA 32.6% 33.0% 36.1% 34.4% 32.1% Americas 19.8% 23.4% 31.4% 31.1% 29.9% APAC 26.5% 26.2% 25.6% 28.0% 26.9% 22.5% 24.5% 29.0% 28.8% 27.4% 1. Resultsfortheyearended31March2021havebeenretrospectivelyrestatedinrelationtoachangeinaccountingpolicyforthetreatmentofcloud-basedsoftware. Thisresultedin£nilimpactoncash. 2. AlternativePerformanceMeasure‘APM’asdefinedintheGlossaryonpages220and221. 218 DR. MARTENS PLC ANNUAL REPORT 2024 FIVE-YEAR FINANCIAL SUMMARY (UNAUDITED) FORTHEYEARENDED31MARCH2024CONTINUED H1 H2 FY Unaudited FY24 £m Unaudited FY23 £m Variance % Unaudited FY24 £m Unaudited FY23 £m Variance % Audited FY24 £m Audited FY23 £m Variance % Revenuebychannel: Ecommerce 91.7 88.8 3% 184.6 190.2 -3% 276.3 279.0 -1% Retail 104.7 91.0 15% 152.1 150.7 1% 256.8 241.7 6% DTC 196.4 179.8 9% 336.7 340.9 -1% 533.1 520.7 2% Wholesale 4 199.4 238.8 -16% 144.6 240.8 -40% 344.0 479.6 -28% 395.8 418.6 -5% 481.3 581.7 -17% 87 7.1 1,000.3 -12% Grossprofit 254.9 257.8 -1% 320.3 360.3 -11% 575.2 618.1 -7% EBITDA 1 77.6 88.8 -13% 119.9 156.2 -23% 197.5 245.0 -19% Profitbeforetax 2 25.8 57.9 -55% 67. 2 101.5 -34% 93.0 159.4 -42% Taxexpense (6.8) (13.2) -48% (17.0) (17. 3) -2% (23.8) (30.5) -22% Profitaftertax 19.0 44.7 -57% 50.2 84.2 -40% 69.2 128.9 -46% Earningspershare Basic 1.9p 4.5p -58% 5.1p 8.4p -39% 7.0p 12.9p -46% Diluted 1.9p 4.5p -58% 5.1p 8.4p -39% 7.0p 12.9p -46% Keystatistics: Pairssold(m) 5.7 6.3 -10% 5.8 7.5 -23% 11.5 13.8 -17% No. of stores 3 225 174 29% 239 204 17% 239 204 17% DTCmix% 50% 43% +7pts 70% 59% +11pts 61% 52% +9pts Grossmargin% 1 64.4% 61.6% +2.8pts 66.5% 61.9% +4.6pts 65.6% 61.8% +3.8pts EBITDA% 1 19.6% 21.2% -1.6pts 24.9% 26.9% -2.0pts 22.5% 24.5% -2.0pts Revenuebyregion: EMEA 194.2 179.0 8% 237.6 264.0 -10% 431.8 443.0 -3% Americas 147.7 179.7 -18% 178.1 248.5 -28% 325.8 428.2 -24% APAC 53.9 59.9 -10% 65.6 69.2 -5% 119.5 129.1 -7% 395.8 418.6 -5% 481.3 581.7 -17% 87 7.1 1,000.3 -12% Revenuemix: EMEA% 49% 43% +6pts 49% 45% +4pts 49% 44% +5pts Americas% 37% 43% -6pts 37% 43% -6pts 37% 43% -6pts APAC% 14% 14% – 14% 12% +2pts 14% 13% +1pts EBITDA 1 byregion: EMEA 55.8 52.8 6% 85.0 93.3 -9% 140.8 146.1 -4% Americas 28.6 41.4 -31% 35.8 58.7 -39% 64.4 100.1 -36% APAC 12.2 13.1 -7% 19.5 20.7 -6% 31.7 33.8 -6% Supportcosts (19.0) (18.5) 3% (20.4) (16.5) 24% (39.4) (35.0) 13% 77.6 88.8 -13% 119.9 156.2 -23% 197.5 245.0 -19% EBITDA% 1 : EMEA 28.7% 29.5% -0.8pts 35.8% 35.3% +0.5pts 32.6% 33.0% -0.4pts Americas 19.4% 23.0% -3.6pts 20.1% 23.6% -3.5pts 19.8% 23.4% -3.6pts APAC 22.6% 21.9% +0.7pts 29.7% 29.9% -0.2pts 26.5% 26.2% +0.3pts Total 19.6% 21.2% -1.6pts 24.9% 26.9% -2.0pts 22.5% 24.5% -2.0pts 1. AlternativePerformanceMeasure‘APM’asdefinedintheGlossaryonpages220and221. 2. Postexceptionalitems. 3. Ownstoresonstreetsandmallsoperatedunderarm’slengthleaseholdarrangements. 4. Wholesalerevenueincludingdistributorcustomers. ADDITIONAL INFORMATION 219DR. MARTENS PLC ANNUAL REPORT 2024 FIRST HALF/SECOND HALF ANALYSIS (UNAUDITED) FORTHEYEARENDED31MARCH2024 TheGrouptracksanumberofkeyperformanceindicators(KPIs)includingAlternativePerformanceMeasures(APMs)inmanagingits business,whicharenotdefinedorspecifiedundertherequirementsofIFRSbecausetheyexcludeamountsthatareincludedin,orinclude amountsthatareexcludedfrom,themostdirectlycomparablemeasurescalculatedandpresentedinaccordancewithIFRSorare calculatedusingfinancialmeasuresthatarenotcalculatedinaccordancewithIFRS. TheGroupbelievesthattheseAPMs,whicharenotconsideredtobeasubstitutefororsuperiortoIFRSmeasures,providestakeholders withadditionalhelpfulinformationontheperformanceofthebusiness.TheseAPMsareconsistentwithhowthebusinessperformanceis plannedandreportedwithintheinternalmanagementreportingtotheBoard. TheGroupisnolongerpresentingunderlyingearningspershare.Inpreviousyearsthismetricwasintroducedtopresentearningsper shareexclusiveofprioryeartaxadjustmentsinrelationtoexceptionalcosts.TheGrouprecognised£nilprioryeartaxadjustmentsin relationtoexceptionalcostsinFY24andFY23;assuchthisadjustedmeasureisnolongerrelevant. TheseAPMsshouldbeviewedassupplementalto,butnotasasubstitutefor,measurespresentedintheConsolidatedFinancial StatementsrelatingtotheGroup,whicharepreparedinaccordancewithIFRS.TheGroupbelievesthattheseAPMsareusefulindicators ofitsperformance.However,theymaynotbecomparablewithsimilarlytitledmeasuresreportedbyothercompaniesduetodifferences inthewaytheyarecalculated. Metric Definition Rationale APM KPI Revenue Revenueperfinancialstatements. Helpsevaluategrowthtrends,establish budgetsandassessoperationalperformance andefficiencies. No Yes Revenueby geographical market RevenuepertheGroup’sgeographicalsegments. Helpsevaluategrowthtrends,establish budgetsandassessoperationalperformance andefficiencies. No Yes Revenue:EMEA Revenue: Americas Revenue:APAC Revenueby channel Helpsevaluategrowthtrends,establish budgetsandassessoperationalperformance andefficiencies. No Yes Revenue: ecommerce RevenuefromtheGroup’secommerceplatforms. Revenue:retail RevenuefromtheGroup’sownstores(including concessions). Revenue:DTC RevenuefromtheGroup’sdirect-to-consumer (DTC)channel(=ecommerceplusretailrevenue). Revenue: wholesale RevenuefromtheGroup’sbusiness-to-business channel,revenuetowholesalecustomers, distributorsandfranchisees. Constant currencybasis Non-GBPresultswiththesameforeignexchange rateappliedtothecurrentandpriorperiods,based onthecurrentbudgetedrates. PresentingresultsoftheGroupexcluding foreignexchangevolatility. No No Grossmargin Revenuelesscostofsales(rawmaterialsand consumables). CostofsalesisdisclosedintheConsolidated StatementofProfitorLoss. Helpsevaluategrowthtrends,establish budgetsandassessoperationalperformance andefficiencies. No No Grossmargin% Grossmargindividedbyrevenue. Helpsevaluategrowthtrends,establish budgetsandassessoperationalperformance andefficiencies. Yes No Opex Sellingandadministrativeexpensesandfinance expenseslessdepreciation,amortisation,foreign exchangegains/(losses)andfinanceexpense. Opexisusedtoreconcilebetweengross marginandEBITDA. Yes No 220 DR. MARTENS PLC ANNUAL REPORT 2024 GLOSSARY AND ALTERNATIVE PERFORMANCE MEASURES (APMS) Metric Definition Rationale APM KPI EBITDA Profit/(loss)fortheyearbeforeincometaxexpense, financingexpense,foreignexchangegains/(losses), depreciationofright-of-useassets,depreciation, amortisationandexceptionalitems. Exceptionalitemsarematerialitemsthatare consideredexceptionalinnaturebyvirtueof theirsizeand/orincidence. EBITDAisusedasakeyprofitmeasure becauseitshowstheresultsofnormal,core operationsexclusiveofincomeorchargesthat arenotconsideredtorepresenttheunderlying operationalperformance. Yes Yes EBITDA% EBITDAdividedbyrevenue. Helpsevaluategrowthtrends,establish budgetsandassessoperationalperformance andefficiencies. Yes Yes EBIT Profit/(loss)fortheyearbeforeincometaxexpense, financingexpense,foreignexchangegains/(losses) andexceptionalitems. Exceptionalitemsarematerialitemsthatare consideredexceptionalinnaturebyvirtueof theirsizeand/orincidence. EBITisusedasakeyprofitmeasurebecause itshowstheresultsofnormal,coreoperations exclusiveofincomeorchargesthatarenot consideredtorepresenttheunderlying operationalperformance. Yes No Operating cashflow EBITDAlesschangeinnetworkingcapital, share-basedpaymentexpenseandcapital expenditure. Operatingcashflowisusedasatradingcash generationmeasurebecauseitshowstheresults ofnormal,coreoperationsexclusiveofincome orchargesthatarenotconsideredtorepresent theunderlyingoperationalperformance. Yes Yes Operatingcash flowconversion OperatingcashflowdividedbyEBITDA. Usedtoevaluatetheefficiencyofacompany’s operationsanditsabilitytoemployits earningstowardrepaymentofdebt,capital expenditureandworkingcapitalrequirements. Yes Yes Freecashflow Operatingcashflowlesscashoutflowsfor exceptionalitems,netinterestpaid,taxation andleaseliabilities. Freecashflowisusedasanetcashflow measurefortheGroupbeforechangesin thedebt/capitalstructure. Yes No Netdebt Netdebtiscalculatedbysubtractingcashandcash equivalentsfrombankloansandleaseliabilities. Toaidtheunderstandingofthereader ofthefinancialstatementsinrespectof liabilitiesowed. Yes No Profitbeforetax (beforeFX charge) Profitbeforetaxandbeforeforeignexchange gains/losses. Helpsevaluategrowthtrends,establish budgetsandassessoperationalperformance andefficiencies. Yes No Earningsper share IFRSmeasure. Thisindicateshowmuchmoneyacompany makesforeachshareofitsstock,andisa widelyusedmetrictoestimatecompanyvalue. No Yes Basicearnings pershare Thecalculationofearningsperordinaryshareis basedonearningsaftertaxandtheweighted averagenumberofordinarysharesinissueduring theperiod/year. AhigherEPSindicatesgreatervaluebecause investorswillpaymoreforacompany’sshares iftheythinkthecompanyhashigherprofits relativetoitsshareprice. No Yes Dilutedearnings pershare Calculatedbydividingtheprofitattributableto ordinaryequityholdersoftheparentbythe weightedaveragenumberofordinarysharesin issueduringtheperiod/yearplustheweighted averagenumberofordinarysharesthatwouldhave beenissuedontheconversionofalldilutive potentialordinarysharesintoordinaryshares. UsedtogaugethequalityofEPSifall convertiblesecuritieswereexercised. No No Ecommerce mix% Ecommercerevenueasapercentage oftotalrevenue. Helpsevaluateprogresstowards strategicobjectives. No Yes DTCmix% DTCrevenueasapercentageoftotalrevenue. Helpsevaluateprogresstowards strategicobjectives. No Yes No. of stores Numberof‘own’storesopenintheGroup. Helpsevaluateprogresstowards strategicobjectives. No Yes Pairs Pairsoffootwearsoldduringaperiod. Usedtoshowvolumesandgrowths intheGroup. No Yes ADDITIONAL INFORMATION 221DR. MARTENS PLC ANNUAL REPORT 2024 Shareholders’ enquiries Anyshareholderwithenquiriesrelatingtotheirshareholding should,inthefirstinstance,contactourregistrar,Equiniti,using thetelephonenumberoraddressonthispage. Electronic shareholder communications Shareholderscanelecttoreceivecommunicationsbyemaileach timetheCompanydistributesdocuments,insteadofreceiving papercopies.ThiscanbedonebyregisteringviaShareviewatno extracost,atwww.shareview.co.uk.Intheeventthatyouchange yourmindorrequireapaperversionofanydocumentinthefuture, pleasecontacttheregistrar. AccesstoShareviewallowsshareholderstoviewdetailsabouttheir holdings,submitaproxyvoteforshareholdermeetingsandnotify achangeofaddress.Inadditiontothis,shareholdershavethe opportunitytocompletedividendmandatesonlinewhichfacilitates thepaymentofdividendsdirectlyintoanominatedaccount. Financial calendar Announcementoffullyearresults 30May2024 Ex-dividenddateforfinaldividend 29August2024 Recorddateforfinaldividend 30August2024 AnnualGeneralMeeting 11July2024 Paymentdateforfinaldividend 1October2024 Announcementofhalfyearresults 28November2024 Shareholder security Shareholdersshouldbeverywaryofanyunsolicitedadvice,offersto buysharesatadiscount,oroffersoffreecompanyreports.Theseare typicallyfrompurported‘brokers’whotargetUKshareholderswith offerstosellthemwhatoftenturnouttobeworthlessorhigh-risk sharesinUSAorUKinvestments.Theseoperationsarecommonly knownasboilerrooms.Ifyoureceiveanyunsolicitedinvestment advice,getthecorrectnameofthepersonandorganisation,and checkthattheyareproperlyauthorisedbytheFCAbeforegetting involved.Thiscanbedonebyvisitingwww.fca.org.uk/register. Ifyouthinkyouhavebeenapproachedbyanunauthorisedfirm, youshouldcontacttheFCAconsumerhelplineon08001116768. Moredetailedinformationandguidanceforshareholderson howtoavoidscamscanbefoundontheFCA’swebsiteat www.fca.org.uk/consumers/protect-yourself/unauthorised-firms. AGM TheAGMwillbeheldatHolidayInnLondon-CamdenLock, 30JamestownRoad,Camden,NW17BYat9:30amonThursday 11July2024.Shareholdersarestronglyencouragednottoattend themeetinginpersonandtosendanyquestionstheymayhave fortheBoard,thatrelatetothebusinessofthemeeting,inadvance byemailtocompany.secretariat@drmartens.com.Questions relatingtothebusinessofthemeetingcanbeemailedtoandwill berespondedtoinfull.Wewillalsopublishallanswerstoany questionssubmittedthatrelatetothebusinessofthemeeting, togetherwiththefullvotingresultsforthe2024AGM,on www.drmartensplc.comshortlyafterthemeeting. Website TheinvestorsectionofDr.Martens’corporatewebsite, www.drmartensplc.com,containsawiderangeofinformation includingregulatorynews,resultsannouncements,shareprice informationandinformationaboutourBoardandCommittees. Itisalsopossibletosignuptoreceiveregulatorynewsrelating toDr.Martensplcalertsbyemailat www.drmartensplc.com/investors/regulatory-news/rns-alerts/. Our privacy policy Ourprivacypolicy,whichsetsouthowDr.Martenscollects andusespersonalinformation,canbefoundat www.drmartensplc.com/privacy-policy. Analysis of share register ORDINARY SHARES Asat31March2024,theCompanyhad493registeredholdersofordinaryshares.Theirshareholdingsareanalysedbelow: Balance ranges Total number of holdings Percentage of holders Total number of shares Percentage issued capital 1-500 63 12.78% 10,315 <0.01% 501-1000 25 5.07% 19,413 <0.01% 1001-2000 22 4.46% 33,447 <0.01% 2001-5000 35 7. 10% 114,688 0.01% 5001-10000 25 5.07% 181,742 0.02% 10001-100000 132 26.77% 5,417, 257 0.56% 100001-1000000 112 22.72% 36,380,565 3.78% 1000001-9999999999 79 16.02% 919,721,181 95.62% Totals 493 100.00% 961,878,608 100.00% 222 DR. MARTENS PLC ANNUAL REPORT 2024 SHAREHOLDER INFORMATION Registered office 28JamestownRoad Camden London NW17BY Investor relations investor.relations@drmartens.com Registrar Equiniti Limited AspectHouse SpencerRoad Lancing WestSussex BN996DA Tel:03713842030(fromtheUK) Tel:+441214157047(fromoverseas) Independent auditor PricewaterhouseCoopers LLP 1EmbankmentPlace London WC2N6RH Tel:+44(0)2075835000 Designed and produced by three thirty studio www.threethirty.studio Dr. Martens plc’s commitment to environmental issues is reflected in this Annual Report, which has been printed on Evolution Offset, manufactured from 100% recycled post-consumer waste, FSC ® and ISO 14001 certified material. This document was printed by Principal Colour, accredited to the ISO 14001 Environmental Management System with 99% of dry waste diverted from landfill, minimising the impact of printing on the environment. The publication is CarbonNeutral ® . COMPANY INFORMATION DR. MARTENS PLC 28JamestownRd Camden LondonNW17BY drmartensplc.com Dr. Martens plc drmartensofficial DR. MARTENS PLC ANNUAL REPORT 2024