Annual Report • Mar 31, 2012
Annual Report
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financial statements 2012
£9.9bn £658.0m
broadly even split between Food and General Merchandise (Clothing and Home).
sell high-quality, great value food and are the UK market leaders in womenswear, lingerie and menswear.
UK
£810.0m 34.9p
Our UK turnover has a With 731 UK stores, we However they shop with us – in stores, online or by phone – we aim to provide the best and most convenient shopping experience for our customers, from purchase through to delivery.
INTERNATIONAL
With 387 stores in 43 territories across Europe, the Middle East and Asia, we are growing our international presence to make the M&S brand more accessible to customers around the world.
455
International revenue £1.1bn 5.8% International stores
387 26
Territories
43 1 new territory
We aim to become the world's most sustainable retailer and our eco and ethical programme is at the heart of how we do business.
* Excluding VAT and is generated across the UK and International business. Last year published including VAT.
Strategic review
Financial review
Governance
My first full year as Chairman has been one of continued progress for M&S. Our executive team has driven forward our business plans with consistency and pace. The strategy, set out by Marc Bolland in November 2010, withstood the test of continued evaluation by the Board. Despite challenging market conditions that have put ongoing pressure on our customers' budgets, we are all agreed on our course. The key now is execution of our strategy to become an international, multi-channel retailer.
As a Board, we have undertaken an ordered transition towards our now established governance structure. We have in place a talented group of individuals with a rich mix of experience. We are unified by a shared ambition to guide M&S to the very best future; delivering sustainable growth as an international, multi-channel retailer.
In a tough market, M&S has made progress on a number of fronts, with sales up 2%. Our results demonstrate a good performance against our strategic goals. We made important improvements in our UK business – enhancing our stores and products and strengthening our brand. Our Multi-channel business grew ahead of the market and we saw double digit growth in our priority international markets.
We are committed to delivering consistent returns to our shareholders. We intend to pay a final dividend of 10.8p; in line with the dividend policy set out last year.
Last year, I set three clear priorities for the Board:
Over the last 12 months we maintained our focus on these key aspects and will continue to do so in the year ahead.
With implementation of our strategy underway, the Board provided ongoing enquiry and support to our executive directors; ensuring they deliver the business plan effectively and efficiently in a difficult trading environment.
We looked carefully at our Board composition, considering the skills required to better inform our debate. We recognised the need to strengthen our consumer and international experience and were therefore delighted to welcome our two new non-executive directors; Vindi Banga and Miranda Curtis, both of whom have abundant expertise in these fields. We will continue to ensure that we have the right balance of skills as we move forward.
Louise Patten and Sir David Michels retired this year. I would like to thank them both for their considerable contributions to the Board and I must pay particular tribute to David in his roles as Deputy Chairman and Senior Independent Director. I am delighted that Jan du Plessis agreed to succeed David as Senior Independent Director.
Having the right people in this business is critical to our success. Over the last 12 months the Board has devoted more time to ensuring we have the best team to deliver the best results, not just today but over the longer term.
Robert Swannell Chairman
6.2pper share
10.8pper share
Strategy, performance, responsibility and accountability are at the heart of your Board's discussions. We interrogate each area to ensure high-quality decision-making, that in turn drives a culture of continuous improvement across the business.
Our performance is independently reviewed on a regular basis to ensure that the Board remains focused, is provided with actions for improvement and meets targets for future improvement.
Strategic decision-making is discussed within the context of risk, ensuring that we understand and, where possible, mitigate those risks to which M&S is exposed.
Building relationships with private and institutional investors is fundamental to achieving our goals. We do so through face-to-face meetings and a range of communications channels.
Over 26,000 shareholders have signed up for electronic communications and are benefiting from more accessible and interactive information. To register, simply go to marksandspencer.com/investors and follow the 'Electronic Shareholder Communication' link.
Our executive directors are part of a strong Management Committee, which was further strengthened this year by the arrival of Laura Wade-Gery as Executive Director, Multi-channel E-commerce. We continued to look ahead; focusing on developing leadership and future talent across the business to secure robust succession plans.
I believe that openness and transparency lie at the heart of good business practice. This applies as much to our readiness to embrace the rapid change in a digital world, as it does to our willingness to be accountable for how we do business or learn when we make mistakes.
Nowhere is this ethos more evident than in Plan A. Five years since launch, our environmental and ethical programme continues to be at the heart of how we do business. We have made M&S a more efficient and more innovative business; setting ourselves ambitious targets and holding our progress up for continual scrutiny, as we further encourage our customers and suppliers to get involved in Plan A. We think it is right to continue to set ourselves a high bar in this area. Our customers, our shareholders and our employees expect this of us and it makes good business sense.
As a Board, we listened to the objective feedback we received from last year's independent Board evaluation and conducted a further external review of our effectiveness this year.
The Notice of Meeting that accompanies this report highlights some changes that will be included in our AGM. Future meetings will adopt a more businesslike approach, with an earlier start time and discussion focused on the performance of the Company.
None of this will inhibit your ability to come to our AGM and hold us accountable. That is your right and, as ever, we encourage all our shareholders, large or small, to attend.
As part of our ongoing efforts to engage more closely with our shareholders, we considerably improved the quality and quantity of information available online. I encourage you to explore and make use of these enhanced resources at marksandspencer.com/thecompany.
We have a clear plan for the business and we are committed to its execution. We remain convinced that it is the right course.
The retail environment remains challenging in the UK, and in some of our international territories. This only serves to illustrate how vital it is that we are listening to our customers, staying true to our values and relentlessly and consistently executing our strategy. In doing so we will strengthen our business and our relationships with all our stakeholders in the future.
I never fail to be impressed by the dedication and pride in their work shown by our employees at all levels. I would like to thank them for all they do to make this business special.
Robert Swannell Chairman
longevity and versatility. 'Wearability' was a priority as they sought stylish pieces that would last, complementing and updating their existing wardrobe.
Limited budgets also meant consumers looked to retailers for clear fashion direction; wanting the confidence that they were buying the 'right' item to refresh their look in line with each seasons' trends.
Quality remained important and customers recognised the merits of buying into higher price tiers, using promotions as a way to make these more affordable. Value was front of mind and we took steps to address this with our 'Outstanding Value' campaign. However, spending on children's clothing was ring fenced as female consumers particularly put family priorities before themselves.
Through clearer differentiation of our sub-brands – supported by dedicated advertising – we continue to make it easier for customers to find the right items for them to refresh their look. Improved visual merchandising also helps us show customers how to wear the latest trends.
Home: The housing market continued to be sluggish and sales of furniture and other big ticket items remained slow. Consumers found it difficult to justify purchasing until replacements could not be postponed any longer. A sentiment of 'making do' prevailed, but with socialising at home taking the place of going out, consumers refreshed and updated their homes with smaller accessories.
Segmenting our Home offer under more distinctive lifestyle categories has provided customers with more inspiration for easy room updates.
Food: Growth in the food market this year came largely from price inflation. Intense competition between supermarkets resulted in a constant stream of promotions, many of which left consumers feeling confused. Consumers used promotions as a strategy to reduce weekly spend and wanted genuine value from uncomplicated deals on items on their shopping list.
Understanding the way our customers think and the factors that influence their shopping behaviour is key to our success. Our Customer Insight Unit (CIU) uses a combination of customer analytics and research to build an accurate picture of the trends and issues that affect the decisions our customers make.
2011/12 was a year of continued economic turbulence. UK Gross Domestic Product (GDP) was revised down during the year, as the Government faced the challenge of tackling the deficit, whilst stimulating economic growth. However, consumers now have a greater understanding of how to manage their households through difficult times – enabling them to better plan ahead.
Despite this clarity, confidence remained low as consumers felt the impact of inflation, compounded by rising fuel prices. Though inflation eased in early 2012 consumers did not feel the full benefit, as incomes were hit by pay freezes, reduced hours and cancelled overtime.
These factors contributed to a decrease in market footfall of -1.6%, as consumers made tough choices. In this challenging environment, some well known retailers faced administration and store closures. Others responded with heavy promotions, as retailers competed fiercely for consumers' limited disposable income.
There were moments of light relief during the year. The Royal Wedding in April 2011 and occasions such as Christmas provided reasons to celebrate. However, these were also characterised by heavily promotional activity and measured spending from consumers.
Since the downturn of 2008, consumers have been on a journey of acceptance and for many 2011/12 was the year they took charge of their budgets. Consumers acknowledged that some rising costs, such as petrol, were unavoidable, and instead focused on spend they could manage. This helped them regain a sense of control and optimism increased in the latter part of the year.
However, finances remained tight, with little flexibility in monthly spend. This pressure, coupled with a greater focus on housekeeping, meant consumers increasingly shopped to a planned list. They were not easily distracted by promotions; using them as a shopping strategy and seeking value in clear, straightforward deals on planned purchases.
Priorities remained close to home, with a renewed emphasis on the value of family time, health and wellbeing. Careful planning helped consumers protect the things that mattered most, such as spending on their children. Special occasions such as Christmas and Mother's Day were also ring fenced, with an increased focus on more traditional celebrations at home.
Clothing: The overall market remained static, with little movement in volume or value. Consumers continued to invest in staple items, looking for increased
Summary financial statements and other information
Food was at the heart of customers' celebrations at home. Consumers looking to treat themselves needed reassurance they were getting something truly special and turned to trusted retailers, especially for important occasions. Our promotions catered for this determination to enjoy time with the family. Consumers' willingness to spend on products that matter also played to our strengths, as we continued to innovate and expand our healthy eating ranges.
Macro-economic factors have made everyday value a growing priority for consumers. The launch of our new Simply M&S range showcases the fantastic value available on over 500 of our customers' favourite food products.
This year, customers told us that shopping was not just about spending their limited budget wisely. They wanted to enjoy their experience and feel inspired, engaged and valued by retailers. As a result, service was seen as a key differentiator and in a confusing promotional landscape customers valued the assistance of knowledgeable employees.
More consumers shopped across a combination of channels. This trend was supported by the dramatic growth of smartphone and tablet ownership in the UK. Online and mobile channels offered consumers a more convenient way to research and buy, and many saw it as a 'safer' way to shop – reducing the temptation of store browsing.
Our customers are increasingly active online and women aged 45 to 55 spend more time online than any other age group. As a result, we provided more engaging content to inform their online research and provide reassurance that they are making sound purchases. We also integrated digital innovation, such as our Style Online offer, into stores, to add value to customers' shopping experience.
Ongoing pressures in the Eurozone resulted in challenging trading conditions in markets such as Greece, the Czech Republic and the Republic of Ireland. However, there was strong GDP growth in some markets including Russia, the Middle East, China and India.
Our strategy is aligned with these growth opportunities and we are focusing our expansion on existing markets such as India, the Middle East and the Shanghai region of China. In doing so, we are reducing our dependency on the UK economic cycle and maximising the efficiency of our global supply chain and infrastructure.
Across our international customer base, there was a consistent demand for quality. Our British heritage, coupled with our brand values, supported this position – particularly on Food, with traditional products such as tea and biscuits performing well. In clothing, our customers recognise M&S quality, but want more clarity around our fashion offer. Launched in the autumn, our Autograph campaign helped better showcase our stylish products and the international roll-out of our new store format will make it easier for customers to identify the signature style of our individual clothing sub-brands.
Plan A, our 180 point eco and ethical plan, helps us tackle the key sustainability issues that face all major retailers. With key raw materials under pressure, Plan A helps us develop a more sustainable supply chain.
It enables us to run a more efficient business too – reducing waste and energy use. In turn, we are sharing our learning with our 2,000 suppliers worldwide – enabling them to reduce their manufacturing costs and create a more sustainable future.
In a competitive market, Plan A provides a point of difference. M&S is known for its sustainability credentials and seen as a leader by important stakeholders in the sector. In addition, this year we worked hard to engage customers in new and exciting initiatives such as our Beach Clean project.
We launched our Consumer Barometer in June 2010. This ongoing listening exercise enables us to track trends and plan ahead based on consumer sentiment and behaviour.
The Consumer Barometer comprises a monthly online survey of a changing sample of 4,000 people, and covers a range of topics from spending patterns to future plans. We undertake additional in-depth research with a smaller sample, which provides us with more detailed insight into how consumers are thinking and what influences their decisions. We process the monthly results within one week, to give the business an instantaneous view of customer needs. This up-to-date
insight allows us to be agile in our responses – from timely promotions to great product choice.
CUSTOMER INSIGHT
"I still want quality clothing that will last but I'm prepared to wait for a deal before I buy."
Consumers are ready for another challenging year – feeling more prepared and in control. With a tight rein on their budgets, value will be more important than ever – especially on everyday items. They are protecting their spend for the key events of 2012 such as the Jubilee and Olympics and are making plans for truly special celebrations at home.
Protecting the business from both operational and reputational risk is an essential part of our Board's role. We take a holistic view of the risks facing M&S – both now and in the future – by considering external competitor and economic factors, our core operations, key business change activity, as well as emerging future risks. Action plans to address these risks are in place across the business to help ensure our long-term sustainable growth.
Financial
People
Driving profitable growth through increased sales and effective cost and margin management.
People
Engaging employees in our plans and ensuring we have the right people to deliver our growth ambitions.
Customers are at the heart of our business and through our Customer Insight Unit, we ensure their needs are recognised in all our business decisions. Through a combination of focus groups and consumer research we are in touch with over 17,000 customers every month, helping us anticipate their needs.
Our longstanding history of innovation helps us lead the way with first-tomarket products across food, fashion and homeware. We are the UK's leading clothing retailer and offer high-quality food, with a focus on freshness, convenience and speciality. As an own-brand retailer our products are unique and we further differentiate our offer through exclusive collaborations and a careful selection of the very best international food brands.
Our products are sold through 731 UK stores and 387 internationally. Over 93% of the UK population is within in a 30-minute drive of a full line M&S store and our franchise partnerships ensure our Simply Food offer is available in the most convenient locations – from railway stations to motorway services. Our fully mobile-enabled website makes M&S accessible 24/7 and we're combining the best of web and store service, as well as offering new channels, to make it even easier to shop with M&S.
Customer
of working Ways
Over the last 128 years M&S has grown from a market stall to a multi-channel
for its shareholders
How M&S creates value
Delighting customers with innovative, 'Only at Your M&S' products, supported by an easy and enjoyable shopping experience across all our channels.
Delivering continuous improvement across all operations – underpinned by our Plan A commitment to drive sustainability.
We continually engage and involve our people in our plans to ensure they fully understand the vital role they each play. We communicate with our employees across a range of channels and measure engagement annually. From the Board down, we are focused on developing leadership and future talent to secure strong succession and deliver our growth ambitions.
Across the business we promote a culture of continuous improvement – encouraging employees and our suppliers to find new, more efficient ways of doing things. We have an ongoing programme to restructure our supply chain – implementing new systems and improving our operational execution. Underpinning this is our commitment to Plan A – creating a sustainable business model for the long term.
As we navigate the business through the short term, we remain focused on our longer-term ambitions. Our plan for M&S – which I set out last year – is being delivered at pace. We have made significant progress; encouraging our customers to reappraise M&S and take a closer look at what we offer.
The first part of our plan focuses on our UK business and this year we gathered real momentum; enhancing our brand, developing our Clothing, Home and Food offer and making our stores easier to shop.
Our brand position 'Only at Your M&S' continued to underpin all our campaigns, reminding customers of the unique products that make M&S truly special. Putting the spotlight on these exclusive innovations increased sales. This year we also launched our first ever sub-brand advertising to support the transformation of the likes of Autograph and Limited Collection from 'labels' into distinctive, standalone brands.
Our Simply Fuller Longer and count on us™ brands are now the number one and two UK healthy eating brands on a 12 month basis.
In Clothing and Home we saw a mixed performance with sales down 0.9%. Lingerie, Menswear and Kidswear all performed strongly and our core Home departments of bedding and bath, kitchen and dining also delivered good growth. However, we experienced more challenging conditions in Womenswear and in big ticket furniture. In Home, our performance was impacted by our withdrawal from technology.
We worked hard to ensure that our pricing structure and promotions were right for our customers. This meant balancing demand for great value 'good' items, with opportunities to invest in our 'better' and 'best' ranges. We highlighted the style credentials of our core offering through the creation of our M&S Woman and M&S Man ranges and had a positive response to our interpretations of key trends.
Our 'Only at Your M&S' proposition was enhanced by three exclusive partnerships this year. In menswear we introduced the 'Savile Row Inspired' collection from acclaimed British tailor Richard James. We also launched unique design collaborations with Sir Terence Conran and Marcel Wanders.
Our Food business delivered a good performance. Sales increased by 3.9%, despite continuing inflation pressures and modest space growth.
M&S Food is built on a strong heritage of innovation and quality, with a focus on freshness and convenience.
"Our plan for M&S is on track and customers are seeing the improvements."
Chief Executive Officer
4.2bn Multi-channel £559m 18% International £1.1bn 5.8%
Strategic review
| OUR PLAN Drive UK like-for-like growth |
International multi-channel retailer |
Drive international presence |
|---|---|---|
| UK space and like-for-like growth |
A leading UK multi-channel retailer |
International company |
| Focus on UK |
Our continued emphasis on innovation gave customers even greater choice, with around 1,900 new lines launched this year. We also showcased our great value and unrivalled quality through bigger, higher-impact promotions.
Customers trusted M&S quality and turned to us for the most important occasions, helping us deliver a strong Christmas in Food. We continued to differentiate M&S as a specialist food retailer, introducing authentic deli and bakery counters and launching 100 'unique to M&S' international brands.
Following a successful pilot, the roll-out of our new store format is now underway at a rate of one store a day, with completion expected in mid 2013.
The new look stores include clearly defined areas for each sub-brand as well as elements of theatre in the Food Halls. Customers have told us that these improvements have made our stores more inspiring and easier to shop.
Our new segmentation approach means that stores of equal size no longer carry an identical mix of product. Stock is now appropriately tailored to local demographics, which will help attract new customers and broaden our appeal to those who already shop with us.
We continued to develop our UK store portfolio, through new stores, developments and extensions. This helped us deliver an improved Shop Your Way service for customers.
We performed strongly across the internet and mobile channels, with Multi-channel sales up 18%. This year we introduced several new initiatives aimed at improving the customer experience. We extended the next-day delivery deadlines for online ordering and improved the functionality of our website. We also created brand new ways to shop with us, including the new M&S Outlet website and Style Online.
We launched our first international websites in France and the Republic of Ireland.
Our International business delivered a good performance this year. We experienced double digit growth in our priority markets of India, China and the Middle East. We also paid particular attention to managing our operations in more challenging trading environments – including Greece, the Republic of Ireland and the Czech Republic.
We made good progress towards our goal of making M&S a more internationally focused business. Development of our key markets continued apace and we put our 'bricks and clicks' strategy into practice with a return to France.
Plan A remains integral to the way we do business. Our environmental and ethical plan not only makes us a more efficient business, it contributed a net benefit of £105m this year too.
66stores Our customers look to us to do the right thing – and that includes making it easier for them to live sustainable lives. We are encouraging them to become more involved in Plan A through inclusive initiatives such as our new 'shwopping' campaign.
Though the economic outlook remains challenging, we are committed to the delivery of our plan to become a multi-channel, international retailer.
We will continue to manage the challenges of the short term – improving our existing business through a combination of innovation, an agile response to trends and a strong promotional agenda.
In the year ahead, we will be more in touch with our customers; the more we listen the better we will anticipate their needs and exceed their expectations. We will continue to invest for the future; encouraging customers – wherever we trade – to take a fresh look at M&S.
Marc Bolland Chief Executive Officer
In-store environments Improved in-store environment in 66 stores by 2011/12 year end.
Our aim is to make M&S a truly international, multi-channel retailer – accessible to even more customers around the world. We have created considerable momentum through a wide range of activities and are making good progress.
Pilot stores Following our successful 15 store trial, we had rolled out a fresh new look to 66 stores by the year end and will complete by mid 2013.
Launched Conran collaboration A contemporary collection of over 300 products from this iconic designer is available online and in over 41 stores. 300
Christmas Food to Order online Sales increased by over 20%, as we made this service available online for the
387
stores
43
territories
We returned to France with a brand new store in the heart of Paris, supported by an e-commerce offer.
Carbon neutral operations In January we became carbon neutral across all stores, offices, warehouses and delivery fleets operated by M&S in the UK and Republic of Ireland – the first major retailer in the world to do so.
Marks and Spencer Group plc
Summary financial statements and other information
1,900 new food lines We launched 1,900 innovative new products, including 100 international brands exclusive to M&S.
This year we enhanced the strength of our brand, improved our core offer of Clothing, Home and Food and made our stores easier to shop.
Relaunch of clothing sub-brands We relaunched our sub-brands, giving each a more distinctive identity.
In February 2012 we launched a brand new way to shop with M&S, offering up to 40% off clothing prices.
Shop Your Way Our flexible shopping service is now available in 455 stores.
1900
We increased Multi-channel sales by 18% this year as we gave our customers greater access to our products and offered an improved shopping experience.
35% of International stock shipped direct to destination Fully integrated supply chain operations have led to improved efficiency.
We launched a major new campaign to help customers learn about fish and protect our beaches. Funded by profits from our 5p food carrier bag charge, the project supports the Marine Conservation Society.
Our first local language, local currency website outside the UK launched in October 2011.
Our organisational structure now has a global outlook and a team with the capabilities to deliver growth in our priority markets.
Our new sustainable fashion initiative is designed to change the way we shop for clothes and prevent one billion unwanted clothes from going to landfill every year. 5p 1bn
With 180 commitments across seven pillars – Plan A helps us reduce our environmental impact, develop new products and improve our local communities.
In November 2010 we set out a target to grow our revenues by £1.5bn to £2.5bn over the next three years. As a result of the deterioration in the economic environment since we set out our plan, we now expect to achieve a £1.1bn to £1.7bn increase in revenues.
GROUP REVENUE UNDERLYING GROUP OPERATING PROFIT
| 08/09 | 09/10 | 10/11 | 11/12 |
|---|---|---|---|
| 652.8 | 701.2 | 677.9 | 676.6 |
| 116.1 | 142.7 | 147.0 | 133.4 |
| 768.9 | 843.9 | 824.9 | 810.0 |
11.7% 3.8% 20.3m UK MARKET SHARE clothing and footwear Value
Analysis In a challenging environment we maintained market share, as we offered customers greater choice at the same unrivalled quality and value. More information on our Clothing performance is set out on page 18.
Kantar Worldpanel Clothing and Footwear share 52 w/e 15 April 2012.
Analysis In a competitive market, our food market share remained level, as customers continued to turn to M&S for great value and quality. Our performance in Food is detailed on page 21.
Kantar Worldpanel Food and Drink 52 w/e 15 April 2012.
| level | level | 1.7% | |
|---|---|---|---|
| Analysis In a competitive market, | 11/12 | 20.3m | |
| level | our food market share remained level, as customers continued to |
10/11 | 20.7m |
| turn to M&S for great value and | 09/10 | 21.0m | |
| quality. Our performance in Food | 08/09 | 21.6m |
Analysis Visits to our stores were down slightly in 2011/12. However, this was in line with the wider market, as customer concerns about rising petrol prices impacted footfall to stores.
MULTI-CHANNEL SALES PERCENTAGE OF POPULATION WITHIN A 30-MINUTE DRIVE
£559m* 93% 18%
10/11 (£473.6) 09/10 (£366.1) 08/09 (£290.1)
OF A FULL LINE STORE
Analysis As we continue to strengthen our multi-channel capabilities, we are on track against our target to increase sales by £300m to £500m by 2013/14. * Excluding VAT. Last year published including VAT.
Analysis Our aim is for 95% of the population to be within a 30 minute drive of a full line store by 2015. This is helping us to deliver a leading multi-channel shopping experience.
2009/10 is stated on a 53 week basis
M&S INTERNATIONAL SALES
10/11 (£1,007.3m) 09/10 (£968.7m) 08/09 (£897.8m)
83
| 09/10 (£968.7m) |
|---|
| 08/09 (£897.8m) |
81
81 83 83 Analysis We are continuing to build M&S into a more internationally focused business and are on track against our target of increasing international sales by £300m to £500m by 2013/14.
82
| 11/12 | £1,066.1m |
|---|---|
| 10/11 | £1,007.3m |
| 09/10 | £968.7m |
| 08/09 84 84 |
£897.8m |
Waste sent to landfill from M&S UK and Republic of Ireland operated stores, offices and warehouses. Target of zero operational waste to landfill achieved from February 2012.
Why no waste to landfill? Sending no waste to landfill makes more efficient use of resources, helps to reduce greenhouse gas emissions and in the longer term also reduces costs.
Read more about our progress this year in our How we do Business Report 2012 at marksandspencer.com/hwdbreport2012
"It's not just the products that make M&S special, it's the people. I'm proud of the team that is driving M&S forward."
This year, the energy and enthusiasm of our people turned our plans into action and our customers are already noticing improvements. My sincere thanks go to all our employees across the business for their continued hard work in what has been a challenging year.
Marc Bolland Chief Executive Officer
"We've taken a fresh look at everything and given our stores an exciting new lease of life."
Nayna McIntosh Director of Store Marketing and Design
"We're making it easier for customers to see the great quality, value and style we offer."
Kate Bostock Executive Director, General
"Our ongoing investment in the business will help us deliver our plan and support our growth ambitions."
Alan Stewart
"We're giving employees the skills they need to keep M&S special for our customers."
Tanith Dodge Director of Human Resources
"Good governance extends beyond the boardroom, supporting M&S in the UK and internationally."
Amanda Mellor Group Secretary and Head of Corporate Governance
"Our heritage of quality and innovation are enhancing our position as a specialist food retailer."
John Dixon Executive Director, Food
"The customer is at the heart of our plans as we develop new and exciting ways to help them shop."
Laura Wade-Gery Executive Director, Multi-channel
"We're committed to communicating our plan and its progress to all of our stakeholders."
Dominic Fry Director of Communications and Investor Relations
"We're passionate about great in-store service: like everything we do, it's the small things that make a big difference."
Steve Rowe Director of Retail
"The M&S brand is one of our strongest assets; our campaigns continue to inspire customers to shop with us."
"We're growing our UK presence, ensuring our stores are in the most convenient locations for our customers."
Clem Constantine Director of Property
"There's real momentum in our International business as our plans become reality."
Jan Heere Director of International
"Faster, on time deliveries, improved availability, shorter queues: these are the things that make life better for our
customers." Darrell Stein Director of IT
and Logistics
Despite a challenging trading environment, M&S has performed well in 2011/12. Sales were 2.0% ahead of last year and underlying profit before tax was £705.9m (last year £714.3m). Underlying earnings per share were up to 34.9p.
Whilst we continued to drive the delivery of our long term plans, we took decisive action to manage the business through the short term. We have been responsive to the increasingly promotional marketplace and invested in giving our customers even better value. Alongside this, we focused on managing our costs tightly to mitigate the impact on our profitability. This prudent cost management supports our investment in our future plans – helping us build a stronger platform from which to grow.
In November 2010 we shared our plans to become an international, multichannel retailer and we set out a target to grow our revenues by £1.5bn to £2.5bn over the next three years. As a result of the deterioration in the economic environment since we set out our plan, we now expect to achieve a £1.1bn to £1.7bn increase in revenues.
The execution of our plan moved apace this year and we are making good progress; enhancing our UK position and strengthening our international and multi-channel capabilities. We are managing the roll-out of our new store format appropriately and are pleased to have identified £100m of savings, reducing the total cost from £600m to £500m over the three years of the plan. This will be delivered with no reduction to the scope and we remain on target to complete the activity by mid 2013.
As with operating costs, we manage all our expenditure carefully, ensuring we are being as efficient as possible and spending every penny wisely. In light of increased growth in Multi-channel we have reviewed our space requirements
and have taken the decision to reduce our capital investments in UK space by £200m. We will continue to develop our space especially through our successful Simply Food format.
This time last year, I was clear that running an efficient business is not simply about cost cutting; it's about continual improvement, encouraging the business to find new and better ways of working. This approach is supported by our ongoing programme to restructure our supply chain, implement new information systems and improve our operational execution. As we accelerate this activity we continue to see bigger and better benefits.
We advised last year that the additional investment required for the execution of our plans would be funded by our existing cash flows, supporting our commitment to maintaining an investment grade credit rating and a progressive dividend policy.
Our position is underpinned by a strong balance sheet and net debt decreased this year to £1.86bn. Our working capital was well managed with a £161.9m inflow.
During the year we renewed our revolving credit facility, which was due to expire in March 2013, at a £1.3bn level, on a new five-year term with an option to extend for a further two years.
We also took advantage of market conditions to issue a new £300m bond in December, having repaid another that was due for maturity.
"We will manage our business prudently; navigating the short-term challenges to ensure long term sustainable growth."
Alan Stewart Chief Finance Officer
We remain cautious about the outlook and believe there is another challenging year ahead. Against this backdrop, we will continue to operate an efficient business; managing our costs tightly and building a platform for long-term sustainable growth.
further £1m for smaller initiatives such as low carbon food products and hydrogen fuel cell powered fork lift
truck trials.
Governance
Financial review Strategic review
This fund provides additional support to innovate sustainability projects that help improve how we do business. This year, the fund provided £9m to support large-scale projects and a
"The Board is the guardian of the M&S brand, its reputation and stakeholder relationships. If we continue to do the right thing, the right way, with integrity and with the right checks and balances, these will be protected for the future."
Last year was the start of a new chapter in the development of the Board and our governance. We have made progress against the plan we set ourselves, driving leadership, collaboration and a culture of continuous improvement in standards and performance across the business.
We have made a number of changes to the Board and its Committees during the year, welcoming three new members to the team.
I believe that we have a truly engaged and committed Board. I am pleased with the robust and challenging debate held across a wide range of issues and the support shown to the Executive team as it drives our strategy to become an international multi-channel retailer.
It is important that we continue to drive our effectiveness as a team and ensure we are consistent in our commercial decisions and in our values and principles. Integrity in our decision-making is key to maintaining the trust of our stakeholders.
What we do today, the level of debate and behaviour we exhibit as a Board is critical to our success. We recognise that we may not always get things right; where that is the case we will learn from our mistakes. We should be as open as we can be to new ways of doing things better as well as drawing from our past decisions, experiences, standards and processes and use them to inform and support our future.
As an extraordinary testament to our rich history and experience, we recently moved the M&S Company Archive to a purpose-built new home in the heart of the University of Leeds. This allows us to make our extensive collection, gathered over 128 years, accessible for the first time to a much wider community. To find out more visit marksintime.marksandspencer.com
The Board has taken an active interest in the Archive's development, recognising that our history and decisions have guided behaviours, contributed to the M&S culture and enabled the development of the M&S brand.
We, as a Board, are the current guardians of this iconic and valuable brand, its reputation and stakeholder relationships.
If we continue to do the right thing, the right way, with integrity and with the right checks and balances, these will be protected for the future.
Our governance is focused not only on the boardroom but also right across the business. We believe that good governance ultimately produces a better business and supports long-term performance. It is not just what we do, but how we do it.
As a Board we regularly discuss and review:
The 2010 UK Corporate Governance Code is the standard against which we were required to measure ourselves in 2011/12. We are pleased to confirm that we complied with the UK Corporate Governance Code 2010 for the period under review with the exception that, for a short period of six weeks, the number of independent non-executive directors on the Board, excluding the Chairman, dropped below half as required by the Code. This was due to a timing difference between the retirement of Louise Patten in July and Vindi Banga joining the Board in September. Given that the Board was not scheduled to – and did not – meet during this short period, we feel our governance was not impacted.
The Governance report explaining our governance policies and practices can be found in the Annual Report, with the full account of how we have complied with the UK Corporate Governance Code, on our website.
Our Governance Framework is constantly reviewed and sets out the roles, accountabilities and expectations for our directors and our structures. It also details a schedule of matters reserved for the Board's decision, detailing key aspects of the Company's affairs that the Board does not delegate (including, amongst other things, approval of acquisitions and disposals, business plans and material expenditure). The Governance Framework can also be viewed at marksandspencer.com/thecompany within the governance section.
Vindi and Miranda each had extensive induction programmes on joining the Board. Vindi and Miranda are also now both members of the Nomination and Remuneration Committees.
In February 2012, our Deputy Chairman and Senior Independent Director, Sir David Michels stepped down from the Board following the end of his second three-year term. The Board appointed Jan du Plessis as Senior Independent Director on 1 March 2012 to succeed David. Jan has served on the Board since November 2008.
In addition to ensuring appropriate succession of our nonexecutive directors, the Nomination Committee has remained focused on the succession and development of the Executive team, as well as ensuring it has greater insight into our future talent pool.
Supporting this development of our leadership within the business, the Remuneration Committee has overseen the implementation of the new senior executive framework and ensured robust and fair debate around the setting and disclosure of objectives and targets. The Committee has also participated in the wider UK remuneration debate, taking an active role in a number of formal consultations and engaging with major shareholders and investor representative bodies.
Monitoring the level of risk, and ensuring appropriate governance to support this remains a key objective, involving the support of the Audit Committee. We have an ambitious strategy and it is important that the scope of the audit plan captures the full range of our business initiatives, whilst ensuring assurance on core practices and activities.
Our Audit Committee has helped support the Board's activities. It is important that we continue to drive the level of challenge and debate around risk as well as improve our understanding of risk appetite and tolerance as our business evolves.
Overall, I am pleased with the progress we have made this year across the governance agenda. However, we will continue to be open to any way we can to improve our governance and board performance. Where things go wrong we will say so and learn.
Robert Swannell Chairman
To see our full governance framework go to marksandspencer.com/ thecompany and follow the link. Those with a QR Reader app can use the link to the right.
This year diversity has been a key theme for governance generally. We made further progress in shaping our Board for the future, ensuring that diversity, in its broadest definition, is at its heart. We discussed diversity and what this means for our business, our customers and stakeholders.
From a practical perspective, our focus on diversity meant we looked hard at our mix of skills and experience. Our new appointments have sought to complement these as well as ensuring a better balance of gender and international background as we become a truly international multi-channel retailer.
Much focus of the diversity debate has concentrated on female director appointments. Our female directors today represent around 30% of the Board. Below Board level, women account for 35% of senior management. A number of appointments across the broader senior management team have also enabled us to benefit from greater international experience, which is important as we grow our international presence. Our Board diversity mix is shown overleaf along with more detailed biographies and a snapshot of the Board's experience.
In July 2011, we announced the appointment of Vindi Banga as non-executive director. Vindi joined the Board in September and brings a wealth of global business experience along with extensive consumer and brand knowledge. In July, Laura Wade-Gery joined the Board as Executive Director Multichannel, E-commerce, following the announcement her appointment in February 2011 of. In October 2011, we announced the appointment of Miranda Curtis as nonexecutive director. Miranda joined the Board in February 2012 and brings a valuable perspective of international consumer business and technology. Laura,
Summary financial statements and other information
Robert Swannell Chairman
Appointed Chairman in January 2011. Robert joined Marks & Spencer as a non-executive director in October 2010. He brings a wealth of knowledge of the City, acquired over 33 years in investment banking at Schroders and Citigroup, and extensive government and regulatory experience from previous roles with BIS and the FSA. Robert has significant board-level experience in the retail, private equity and real estate industries. His leadership in the area of governance has enhanced board debate and helped drive a culture of openness and development. Robert stepped down from the Board of HMV Group plc on 23 June 2011, recognising the increased commitment of this role. He was previously Senior Independent Director of
director of Manpower Inc.
Workshop Group plc.
Appointed in May 2010. Marc joined Marks & Spencer from Wm Morrison Supermarkets plc where, as Chief Executive, he led the successful development and implementation of its long-term strategy. Prior to this, Marc was Chief Operating Officer at Heineken NV, where he was globally responsible for the Heineken business. Since joining M&S, Marc has worked with the Board in developing our strategy to become an international multi-channel retailer. Marc is a non-executive
The British Land Company plc and 3i Group plc.
Marc Bolland Chief Executive
Alan Stewart Chief Finance Officer
Kate Bostock Executive Director, General Merchandise
Member of the Nomination Committee Appointed in October 2010. Alan has extensive financial experience in industries as varied as retail, travel and banking. He joined Marks & Spencer from aircraft leasing company AWAS, where he was Chief Financial Officer. Alan worked for HSBC Investment Bank before joining Thomas Cook in 1996, where he held a number of roles including Chief Executive of Thomas Cook UK. He became Group Finance Director of WH Smith plc in 2005, playing a central role in the improvement of the Group's financial performance. Alan was
previously a non-executive director of Games
Joined Marks & Spencer in October 2004 and was appointed to the Board in March 2008. Kate has a wealth of brand and retail experience after holding numerous senior positions across all areas of clothing and footwear during her career. Kate joined M&S from Asda where, as Product Director of the George brand, she was responsible for the launch of the standalone George concept and brand globally. Prior to Asda, Kate was Product Director for Childrenswear at Next. She is an honorary Doctor of Arts at de Montfort University and Business Administration at Manchester Metropolitan University. Kate has played a major role in our renewed brand focus and store improvement programme.
John Dixon Executive Director, Food
Steven Sharp Executive Director, Marketing
Laura Wade-Gery Executive Director, Multi-channel E-commerce
Jeremy Darroch Non-executive director
Steven Holliday Non-executive director
Joined Marks & Spencer in May 2004 and was appointed to the Board in November 2005. Steven brings extensive retail marketing experience and is the architect of our marketing strategy. He started his career as a Marketing Manager with Bejam in 1978, progressing to the Argyll Group and becoming Marketing Director of Asda in 1987. He has also been Marketing Director of the Burton Group, Booker plc and Arcadia Group plc. He is a non-executive director of Adnams plc, a Fellow of the Chartered Institute of Marketing, The Marketing Society, The Royal Society of Arts and a visiting professor of Glasgow Caledonian University.
Appointed on 4 July 2011. Laura brings considerable retail and consumer experience to the Marks & Spencer Board, including significant e-commerce knowledge from her previous role as Chief Executive Officer of Tesco.com and Tesco Direct. Laura is leading significant change to our e-commerce capabilities. She was appointed a director of Royal Opera House Covent Garden Limited on 2 March 2012 and stepped down as a non-executive director of Trinity Mirror plc on 10 May 2012. Prior to joining Tesco, Laura held various roles at Gemini Consulting and Kleinwort Benson.
Appointed in February 2006. Jeremy provides considerable insight into the consumer retail environment acquired through a successful career at some of the UK's most high profile organisations. He has been Chief Executive of British Sky Broadcasting Group plc since 2007, having previously been the Chief Financial Officer from 2004. Prior to that Jeremy was Group Finance Director and Retail Finance Director at Dixons Retail plc, formerly Dixons Group plc.
Chairman of the Audit Committee Member of the Nomination Committee Independent
Appointed in July 2004. Steve has a wealth of experience on the Board of Marks & Spencer, bringing extensive knowledge of corporate business. He has also held senior executive and boardroom level roles within the challenging utility and oil and gas industries. Steve is Group Chief Executive Officer of National Grid plc, having previously been Group Director, UK and Europe and responsible for the UK Electricity and Gas businesses. Prior to joining National Grid, Steve was an Executive Director of British Borneo Oil and Gas. He has also held numerous senior positions with the Exxon Group. Steve is Chairman of Crisis.
Chairman of the Remuneration Committee Member of the Audit and Nomination Committees Independent
| 0-1 years 23% |
|
|---|---|
| 2-3 years 31% |
|
| 4-5 years 23% |
|
| 6-10 years 23% |
Martha Lane Fox Non-executive director
Appointed in June 2007. Martha's considerable expertise in e-commerce and experience in the successful operation of online and consumer-facing businesses is helping to develop and challenge our multi-channel strategy. Martha is the UK's Digital Champion and Chair of Go ON UK. She chairs the Government's Digital Advisory Board and is a non-executive director of MyDeco.com. She was a non-executive director of Channel 4 Television until January 2012. Martha is well-known as one of the co-founders of lastminute.com, which she took public in 2000. She is the founder and Chair of LuckyVoice.com and of her own grant-giving foundation, Antigone.org.
Appointed as a non-executive director in November 2008 and Senior Independent Director on 1 March 2012. Jan has considerable business and brand experience, having sat on the boards of a number of leading companies across a variety of industries. Jan is Chairman of Rio Tinto plc. He was formerly Chairman of British American Tobacco plc and RHM plc and a non-executive director of Lloyds Banking Group. He was also Group Finance Director of the Swiss luxury goods
group Richemont until 2004.
Independent
until 11 May 2012.
Member of the Nomination and Remuneration Committees
Member of the Audit, Nomination and Remuneration Committees
Appointed on 1 February 2012. Miranda has considerable experience within the international consumer and technology sectors and extensive experience of the global broadband cable industry. In her 20-year career with Liberty, Miranda led the company's investments in digital distribution and content operations across Continental Europe and Asia-Pacific, most notably in Japan. Miranda is Chairman of Waterstones, a non-executive director of Liberty Global Inc and was a nonexecutive director of National Express Group plc
Jan du Plessis Senior Independent Director
Miranda Curtis Non-executive director
Vindi Banga Non-executive director
Independent Appointed on 1 September 2011. Vindi has extensive consumer brand knowledge and global business experience, acquired over 30 years in a number of senior roles within the consumer goods industry at Unilever plc, including President of the Global Foods, Home and Personal Care businesses, and as a member of the Unilever Executive Board. Vindi is a partner at private equity investment firm Clayton Dubilier & Rice and a non-executive director of Thomson Reuters and Maruti Suzuki India Ltd.
Member of the Nomination and Remuneration Committees Independent
Appointed in July 2009. Amanda was appointed a non-executive director of Kier Group on 1 December 2011.
| 46% | |
|---|---|
| Non-executive 54% |
|
| Male 69% |
|
| Female 31% |
|
| 52 weeks ended 31 March 2012 |
52 weeks ended 2 April 2011 |
|
|---|---|---|
| £m | £m | |
| Revenue | 9,934.3 | 9,740.3 |
| Operating profit | 746.5 | 836.9 |
| Finance income | 48.3 | 96.6 |
| Finance costs | (136.8) | (152.9) |
| Profit before tax | 658.0 | 780.6 |
| Income tax expense | (168.4) | (182.0) |
| Profit for the year | 489.6 | 598.6 |
| Attributable to: | ||
| Equity shareholders of the Company | 513.1 | 612.0 |
| Non-controlling interests | (23.5) | (13.4) |
| 489.6 | 598.6 | |
| Basic earnings per share | 32.5p | 38.8p |
| Diluted earnings per share | 32.2p | 38.4p |
| Non-GAAP measures: Underlying profit before tax | ||
| Profit before tax | 658.0 | 780.6 |
| Adjusted for: | ||
| Profit on property disposals | – | (2.9) |
| IAS 19 Ireland one-off pension credit | – | (10.7) |
| IAS 36 Impairment of assets | 44.9 | 6.3 |
| IAS 39 Fair value movement of financial instrument | (15.6) | (54.3) |
| IAS 39 Fair value movement of embedded derivative | 0.2 | (20.3) |
| Strategic programme costs | 18.4 | 15.6 |
| Underlying profit before tax | 705.9 | 714.3 |
| Underlying basic earnings per share | 34.9p | 34.8p |
| Underlying diluted earnings per share | 34.6p | 34.4p |
| As at 31 March 2012 |
As at 2 April 2011 |
|
|---|---|---|
| £m | £m | |
| Assets | ||
| Non-current assets | ||
| Intangible assets | 584.3 | 527.7 |
| Property, plant and equipment | 4,789.9 | 4,662.2 |
| Investment property | 15.9 | 16.0 |
| Investment in joint ventures | 14.4 | 13.0 |
| Other financial assets | 3.0 | 3.0 |
| Retirement benefit asset | 91.3 | 182.6 |
| Trade and other receivables | 270.2 | 276.1 |
| Derivative financial instruments | 44.2 | 21.8 |
| 5,813.2 | 5,702.4 | |
| Current assets | ||
| Inventories | 681.9 | 685.3 |
| Other financial assets | 260.5 | 215.9 |
| Trade and other receivables | 253.0 | 250.3 |
| Derivative financial instruments | 67.0 | 18.4 |
| Current tax receivable | 1.6 | 1.6 |
| Cash and cash equivalents | 196.1 | 470.2 |
| 1,460.1 | 1,641.7 | |
| Total assets | 7,273.3 | 7,344.1 |
| Liabilities | ||
| Current liabilities | ||
| Trade and other payables | 1,449.1 | 1,347.6 |
| Borrowings and other financial liabilities | 327.7 | 602.3 |
| Partnership liability to the Marks & Spencer UK Pension Scheme | 71.9 | 71.9 |
| Derivative financial instruments | 60.5 | 50.7 |
| Provisions | 8.4 | 22.7 |
| Current tax liabilities | 87.8 | 115.0 |
| 2,005.4 | 2,210.2 | |
| Non-current liabilities | ||
| Retirement benefit deficit | 13.3 | 14.1 |
| Trade and other payables | 280.8 | 262.3 |
| Borrowings and other financial liabilities | 1,948.1 | 1,924.1 |
| Derivative financial instruments | 27.2 | 37.5 |
| Provisions | 24.0 | 22.0 |
| Deferred tax liabilities | 195.7 | 196.5 |
| 2,489.1 | 2,456.5 | |
| Total liabilities | 4,494.5 | 4,666.7 |
| Net assets | 2,778.8 | 2,677.4 |
| Equity | ||
| Issued share capital | 401.4 | 396.2 |
| Share premium account | 294.3 | 255.2 |
| Capital redemption reserve | 2,202.6 | 2,202.6 |
| Hedging reserve | 14.8 | (11.3) |
| Other reserve | (6,114.3) | (6,042.4) |
| Retained earnings | 5,991.4 | 5,873.2 |
| Total shareholders' equity | 2,790.2 | 2,673.5 |
| Non-controlling interests in equity | (11.4) | 3.9 |
| Total equity | 2,778.8 | 2,677.4 |
The financial statements were approved by the Board and authorised for issue on 21 May 2012.
Marc Bolland Chief Executive Officer
Alan Stewart Chief Finance Officer
| 52 weeks ended 31 March 2012 |
52 weeks ended 2 April 2011 |
|
|---|---|---|
| £m | £m | |
| Summary statement of cash flows | ||
| Operating activities | ||
| Operating profit | 746.5 | 836.9 |
| Increase in inventories | (0.1) | (72.1) |
| (Increase)/decrease in receivables | (17.1) | 2.9 |
| Payments to acquire leasehold properties | (1.2) | (1.4) |
| Increase in payables | 103.4 | 175.2 |
| Non-underlying operating cash outflows | (22.9) | (12.3) |
| Depreciation, amortisation and asset write-offs | 479.7 | 467.5 |
| Share-based payments | 32.5 | 31.7 |
| Adjustment for retirement benefit obligations | (32.2) | (31.2) |
| Non-underlying operating profit items | 63.5 | (12.0) |
| Cash generated from operations | 1,352.1 | 1,385.2 |
| Income tax paid | (149.1) | (185.3) |
| Net cash generated from operating activities | 1,203.0 | 1,199.9 |
| Capital expenditure and financial investment | (765.5) | (494.6) |
| Net interest paid | (128.2) | (142.3) |
| Other debt financing | (138.4) | (249.9) |
| Equity dividends paid | (267.8) | (247.5) |
| Other equity financing | 31.1 | (3.6) |
| Net cash (outflow)/inflow from activities | (65.8) | 62.0 |
| Effects of exchange rate changes | (1.9) | (1.2) |
| Opening net cash | 263.5 | 202.7 |
| Closing net cash | 195.8 | 263.5 |
| 52 weeks ended | 52 weeks ended |
| 31 March 2012 | 2 April 2011 | |
|---|---|---|
| £m | £m | |
| Reconciliation of net cash flow to movement in net debt | ||
| Opening net debt | (1,900.9) | (2,068.4) |
| Net cash (outflow)/inflow from activities | (65.8) | 62.0 |
| Increase in current financial assets | 44.8 | 44.3 |
| Decrease in debt financing | 138.4 | 249.9 |
| Partnership liability to the Marks & Spencer UK Pension Scheme (non-cash) | (71.9) | (71.9) |
| Exchange and other non-cash movements | (1.7) | (116.8) |
| Movement in net debt | 43.8 | 167.5 |
| Closing net debt | (1,857.1) | (1,900.9) |
| 2012 | 2011 | 2010 | 2009 | 2008 | |
|---|---|---|---|---|---|
| 52 weeks £m |
52 weeks £m |
53 weeks £m |
52 weeks £m |
52 weeks £m |
|
| Revenue – continuing operations | |||||
| UK | 8,868.2 | 8,733.0 | 8,567.9 | 8,164.3 | 8,309.1 |
| International | 1,066.1 | 1,007.3 | 968.7 | 897.8 | 712.9 |
| Operating profit – continuing operations | |||||
| UK | 658.0 | 679.0 | 701.1 | 755.0 | 1,095.9 |
| International | 88.5 | 157.9 | 150.9 | 115.7 | 115.4 |
| Profit before taxation – continuing operations | |||||
| Underlying profit before tax | 705.9 | 714.3 | 694.6 | 604.4 | 1,007.1 |
| Profit before tax | 658.0 | 780.6 | 702.7 | 706.2 | 1,129.1 |
| Basic earnings per share from continuing operations (pence) | 32.5 | 38.8 | 33.5 | 32.3 | 49.2 |
| Underlying basic earnings per share from continuing operations (pence) | 34.9 | 34.8 | 33.0 | 28.0 | 43.6 |
| Dividend per share declared in respect of the year (pence) | 17.0 | 17.0 | 15.0 | 17.8 | 22.5 |
| Statement of financial position | |||||
| Net assets (including retirement benefit asset/deficit) | 2,778.8 | 2,677.4 | 2,185.9 | 2,100.6 | 1,964.0 |
| Net debt | 1,857.1 | 1,900.9 | 2,068.4 | 2,490.8 | 3,077.7 |
| Capital expenditure | 737.5 | 491.5 | 397.1 | 653.3 | 1,102.9 |
| Staffing (full-time equivalent) | |||||
| UK | 51,938 | 49,922 | 48,722 | 50,614 | 49,703 |
| International | 5,116 | 4,753 | 4,272 | 3,539 | 2,573 |
We have examined the summary financial statements which comprise the Consolidated income statement, Consolidated statement of financial position, Consolidated cash flow information, Group financial record and Summary remuneration report.
The directors are responsible for preparing the Annual review and summary financial statements 2012 in accordance with applicable United Kingdom law.
Our responsibility is to report to you our opinion on the consistency of the summary financial statements within the Annual review and summary financial statements 2012 with the full annual financial statements, the Directors' report and the Remuneration report, and its compliance with the relevant requirements of Section 428 of the Companies Act 2006 and the regulations made thereunder.
We also read the other information contained in the Annual review and summary financial statements 2012 and consider the implications for our statement if we become aware of any apparent misstatements or material inconsistencies with the summary financial statements. The other information comprises pages 1 to 17 only.
This statement, including the opinion, has been prepared for and only for the Company's members as a body in
accordance with Section 428 of the Companies Act 2006 and for no other purpose. We do not, in giving this opinion, accept or assume responsibility for any other purpose or to any other person to whom this statement is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.
We conducted our work in accordance with Bulletin 2008/3 issued by the Auditing Practices Board. Our report on the Group's Annual report and financial statements describes the basis of our audit opinion on those financial statements, the Directors' report and the Remuneration report.
In our opinion the summary financial statements are consistent with the full Annual report and financial statements, the Directors' report and the Remuneration report of Marks and Spencer Group plc for the year ended 31 March 2012 and complies with the applicable requirements of Section 428 of the Companies Act 2006 and the regulations made thereunder.
Chartered Accountants and Statutory Auditors, London 21 May 2012
Strategic review
Financial review
Governance
The information contained in the Annual Review, the Summary Remuneration report and the Summary Group Directors' report is only a summary of the information contained in the Annual Report and financial statements 2012. The aim is to provide shareholders with the key financial information in a clear and concise manner. For this reason, the Annual Review does not contain all the information to give a full understanding of the results of the Group and state of affairs of the Company and the Group. Copies may be obtained free of charge from the Company as noted on the inside back cover of this booklet.
Marks and Spencer Group plc is the holding company of the Marks & Spencer Group of companies (the 'Group'). Marks & Spencer is the UK's largest clothing retailer with 731 stores across the country. We sell high quality, great value food, homeware and clothing and are the UK market leaders in womenswear, lingerie and menswear. However our customers shop with us – in stores, online or by phone – we aim to provide the best and most convenient shopping experience, from purchase through to delivery. With 387 stores in 43 territories across Europe, the Middle East and Asia, we are growing our international presence to make the M&S brand more accessible to customers around the world.
The profit for the financial year, after taxation, amounts to £513.1m (last year £612.0m). The directors have declared dividends as follows:
| £m | |
|---|---|
| Paid interim dividend of 6.2p per share | |
| (last year 6.2p per share) | 97.6 |
| Proposed final dividend of 10.8p per share | |
| (last year 10.8p per share) | 172.3 |
| Total ordinary dividend, 17.0p per share | |
| (last year 17.0p per share) | 269.9 |
The final ordinary dividend will be paid on 13 July 2012 to shareholders whose names are on the Register of Members at the close of business on 1 June 2012.
The membership of the Board and biographical details of the directors are shown on pages 16 to 17, together with details of the committees they sit on.
The information contained in the Summary financial statement does not constitute the Group's statutory accounts for the year ended 31 March 2012, but is derived from those accounts. The auditors have reported on those accounts; their report was unqualified. Each director confirms that, so far as he (she) is aware, there is no relevant audit information of which the Company's auditors are unaware and that each director has taken all the steps that he (she) ought to have taken as a director to make himself (herself) aware of any relevant audit information and to establish that the Company's auditors are aware of that information. Resolutions to reappoint PricewaterhouseCoopers LLP as auditors of the Company and to authorise the Audit Committee to determine their remuneration will be proposed at the 2012 AGM.
The Committee also regularly reviews external data produced through several surveys and bespoke benchmarking data,
In reviewing executive director salary levels for 2012, the Committee considered current market conditions, the Company's performance in 2011/12 and the principles applying to decisions on general salary increases across the rest of the organisation (to ensure that the approach taken in determining any increase was consistent with the principles applied below the Board). Again, as per last year, Marc Bolland proposed not to receive any salary increase, which the Committee agreed. For other executive directors, the Committee agreed specific individual increases in the range of c.3% – 4%, based on a number of factors including individual performance and external market data for the role. This approach is totally in line with the wider Company policy where individuals who achieved higher personal performance ratings were eligible to receive increases of 3% – 4%.
Where applicable, executive directors (other than the CEO) receive a 25% salary supplement in lieu of membership of the Group Pension Scheme (the CEO receives a salary supplement of 30%), with life assurance provided through a separate policy. Each executive director also receives a car or car cash allowance and is offered the benefit of a driver. Employee product discount is also received but no specific value is placed on this all-employee benefit.
John Dixon was the only executive director who was a member of the Company's Defined Benefit Pension Scheme during the year, but chose to opt out of the scheme in February 2012. Until this date, he also received a 25% salary supplement on his non-pensionable salary.
The fee for the Chairman reflects the level of commitment and responsibility of the role and is determined by the Remuneration Committee and other members of the Board. The fee is paid monthly in cash, inclusive of all committee roles and is not performance related nor pensionable. A review of existing fees in January 2012 concluded that £450,000 remained appropriate for the role and so no increase was awarded during the year. The Chairman is entitled to the use of a car and driver, provided by the Company. He may benefit from the employee product discount on the same terms as other employees.
The fees for non-executive directors are determined by the Chairman and executive directors. Fees are set at a level that ensures the Company can attract and retain individuals with the required skills, experience and knowledge so that the Board is able to effectively carry out its duties.
This Remuneration Report has been prepared on behalf of the Board by the Remuneration Committee. The Committee adopts the principles of good governance as set out in the UK Corporate Governance Code and complies with the Listing Rules of the Financial Services Authority and the relevant schedules of the Companies Act 2006 and the Directors' Remuneration Report Regulations in Schedule 8 to The Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008. These regulations require the Company's auditors to report on the 'Audited Information' in the report and to state that this section has been properly prepared in accordance with these regulations. For this reason, the report is divided into audited and unaudited information, and is subject to shareholder approval at the Annual General Meeting (AGM) on 10 July 2012.
The role of the Committee is to recommend to the Board the senior remuneration strategy and framework, giving due regard to the financial and commercial health of the Company and to ensure the directors and senior management are fairly rewarded for their individual contribution to the Company's overall performance.
The full terms of reference for the Committee can be found on the Company's website at marksandspencer.com/ thecompany, with the key responsibilities summarised as follows:
In undertaking these responsibilities, the Committee seeks independent external advice as necessary. To this end the Committee continued to retain the services of Deloitte LLP. The Committee also seeks internal support from the Chairman, Group Secretary, Director of Human Resources and Head of Employee Relations and Reward, all of whom may attend the Committee meetings by invitation, but are not present for any discussions that relate directly to their own remuneration.
The fees recognise the responsibility of the role, the time commitments required and are not performance related nor pensionable. They are paid monthly in cash and there are no other benefits other than employee product discount on the same terms as other employees.
A full review of non-executive director fees was carried out in 2010 which resulted in a revision to the fee structure. This structure was again reviewed in January 2012 with the conclusion that the fees remained appropriate for the role. No changes were therefore made in 2011/12 to either the basic annual fee or that for the role of committee chairman or Senior Independent Director.
| The current fee structure is as follows: | |
|---|---|
| Basic annual fee | £70,0001 |
| Committee Chairman | £15,0002 |
| Senior Independent Director | £100,0001 |
1) Inclusive of all committee memberships.
2) Audit and Remuneration Committee only and in addition to the basic annual fee.
The Annual Bonus Scheme is reviewed each year and is structured to drive individual performance and profitability across the whole organisation. The bonus potential for executive directors is up to 200% of salary for 'maximum' performance. For all senior managers there is a compulsory deferral into shares which vest after three years, subject to continued employment. For executive directors, this deferral into Company shares equates to 50% of their bonus.
For 2012/13 the mix of performance measures remains unchanged. Underlying Group profit before tax (Group PBT) remains the primary performance measure, with 60% of the annual bonus being determined by performance against demanding profit targets set by the Committee at the start of the year. The balance of 40% will relate to performance against individual objectives independent of Group PBT.
The Committee believes that this approach provides an appropriate focus on annual profitability objectives while ensuring that directors continue to be focused on driving the changes in the business which underpin the Company's medium-term strategy.
As in previous years, the Group PBT targets have again been set taking into consideration the Company's own internal operating plan, external forecasts for the retail sector and analysts' profit forecasts. For the highest payment levels under this measure there will need to be very significant outperformance of the operating plan.
The setting of quantifiable and challenging individual objectives and the associated performance targets are subject to rigorous annual review by the Committee at the time they are set for the year ahead, and at the end of the year when assessments of performance are undertaken.
The 2012/13 individual objectives will continue to be aligned to the Company's strategic plan and the specific workstreams that underpin it.
Each executive director will be assessed on the basis of targets set in relation to four clearly defined business objectives. Two of these will be 'collective', so that all directors are focused on these common goals, encouraging collaboration across the senior management group. Within these, each director will have specific actions/targets. Due to their importance, these two 'collective' objectives will remain as per last year, namely:
– delivery against UK operating plan cost targets; and
– progression against Plan A goals.
The remaining two individual objectives for 2012/13 will relate to specific workstreams relevant to each executive director's business area, or to key operating challenges. By way of illustration, these may include objectives that are focused on innovation and value, logistics and supply chain and brand recognition, in addition to those objectives that are aligned to building our multi-channel capabilities and becoming an international retailer.
Quantifiable performance metrics have been established for each objective and the Committee has agreed both 'threshold' and 'stretch' targets that must be achieved to demonstrate value-added performance.
In keeping with the principle that has applied for a number of years, no individual objective component of the bonus may be earned unless a threshold level of Group PBT has been achieved, subject to the Committee's overall assessment of the performance of the business during the period. Given the importance of the individual objectives to the long-term success of the business, the Group PBT threshold for this purpose is set below the entry point for the Group PBT performance target range. This is in line with the bonus policy for the rest of the organisation which maintains the important principle that below a defined level of performance, no bonus will be earned.
The Performance Share Plan will continue to be the primary long-term incentive for executive directors and senior managers in the Company. The maximum individual award opportunity is 300% of salary, although the Committee's intention continues to be that awards will be conventionally referenced to 250% of salary.
The Committee has again reviewed the performance measures for this plan and their alignment to the business strategy. The Committee concluded that the balanced scored card of measures, including the weighting established last year, continue to be appropriate as set out in the table below.
For awards to be made in 2012/13, the Committee recalibrated the target ranges for ROCE and Revenue. For ROCE, the Committee reduced the bottom end of the target range to
15.0% (in line with the reduction in the Company's cost of capital since the 2011/12 awards were made) whilst maintaining the upper end of the target range at 18.0%, which represents a significant level of stretch. For Revenue, in line with the announced reallocation of capital expenditure and an ambition to drive faster International and Multi-channel growth, while continuing to protect the core UK market, the Committee increased the International and Multi-channel target ranges, with the overall Revenue target remaining unchanged.
For awards made in 2012/13, the performance metrics and targets are as follows:
| Performance metric | Commercial rationale | Basis of measurement | ||||||
|---|---|---|---|---|---|---|---|---|
| EPS | Ensure focus on bottom-line performance | Based on cumulative underlying basic EPS over the three-year performance period. |
||||||
| ROCE | Rewards efficient use of capital | Vesting based on average ROCE (%) over the three-year performance period against pre-determined targets. |
||||||
| Revenue | Encourage top-line growth in line with business strategy |
Based on strategic growth targets: – 10% on UK – 10% on Multi-channel; and – 10% on International |
||||||
| ROCE | Revenue (FY15 – £m) | |||||||
| % Vesting1 | Cumulative EPS (p) | (%) | UK2 | Multi-channel3 | International4 | |||
| Weighting (% of total award) | 50% | 20% | 10% | 10% | 10% | |||
| 'Threshold' performance | 20% | 110p | 15.0% | £8,900m | £800m | £1,300m | ||
| 'Maximum' performance | 100% | 130p | 18.5% | £9,600m | £1,000m | £1,700m |
1) % Vesting is straight line between threshold and maximum performance.
2) Excluding Multi-channel.
3) Net of VAT/gross of returns.
4) Excluding Multi-channel/including the Republic of Ireland.
The above targets do not take into consideration the change in the Group's accounting treatment referred to in note 29 to the financial statements on page 106
as this event occurred after the reporting period.
The scheme was adopted at the 2005 AGM, but there is currently no intention to use the scheme on a regular basis. No grants have been awarded under the Executive Share Option Scheme for 2011/12. The Committee will continue to review the use of the scheme and retains the flexibility to grant awards under the scheme if appropriate.
Executive directors can participate in Sharesave, the Company's Save As You Earn (SAYE) scheme which is open to all employees. The current scheme was approved by shareholders for a 10-year period at the 2007 AGM.
In 2011/12, 60% of the executive directors' bonus was based on Group PBT performance with the remaining 40% based on the achievement of individual objectives, independent of, Group PBT (and subject to achieving the 'threshold' Group PBT target).
As in previous years, Group PBT targets were set by the Committee at the start of the year by reference to the Company's own internal operating plan, external forecasts for the retail sector and analysts' profit forecasts. For there to be any payment under the Group PBT measure in 2011/12, there was a requirement not only for year-on-year Group PBT growth but also outperformance of the operating plan. The underlying Group PBT performance of £705.9m did not meet
the 'minimum' target, resulting in no bonus payment under the Group PBT element.
Each executive director had four individual objectives for 2011/12 which directly referenced the long term strategy of the business, each accounting for 10% of the total bonus. Of these, two were 'collective' i.e. individual targets for each director under shared objectives, so that all directors focused on common goals, encouraging collaboration across the senior management team.
The performance of each of the directors has been reviewed by the Committee against the quantifiable individual performance targets which were established and agreed at the start of the year.
– Delivery against UK operating plan cost targets:
Overall performance in this area was strong, with operating plan cost increases within the range of internal projections. Based on the Committee's assessment of performance against the individual targets under this objective, payouts to directors were in the range 8% – 10% of maximum bonus opportunity, equating to 16% – 20% of salary.
The Company has continued to make good progress against our Plan A goal of becoming the world's most sustainable major retailer. Based on the Committee's assessment of performance against the individual targets under this objective, payouts to directors were in the range 5% – 10% of maximum bonus opportunity, equating to 10% – 20% of salary.
The remaining two objectives related to specific workstreams relevant to the director's business area for which they have primary responsibility. Performance against these objectives was reviewed by the Committee against quantifiable individual performance metrics that were established for each director at the start of the year. Based on the performance against these targets, the Committee determined payouts to directors in the range 7.5% – 16.5% of maximum bonus opportunity, equating to 15% – 33% salary. The Committee believes that this level of payout suitably reflects the significant achievement during the year towards the execution of the Company's key strategic long-term goals.
As outlined in last year's report, and in keeping with the principle that has applied for a number of years, no individual objective component of the bonus would have been payable unless a 'threshold' level of Group PBT was achieved. Given the importance of the individual objectives to the success of the business, the Group PBT 'threshold' for this purpose was set below the entry point for the Group PBT performance target range and was achieved. In addition, the Committee also considered the overall performance of the business during the year, across a series of measures and believes that the bonus payments made for the achievement of objectives are appropriate in light of this performance in the context of a challenging year for our business and the wider retail sector. This approach was applied to the rest of the organisation, allowing for employees at all reward levels to receive a bonus.
The table below summarises the bonus payments for each director for 2011/12:
| Group PBT target | 'Collective' objectives |
Business area objectives |
Total bonus earned | ||
|---|---|---|---|---|---|
| % of salary | % of Salary | £000 | |||
| Maximum bonus potential | 120% | 40% | 40% | 200% | – |
| Actual bonus earned | |||||
| Marc Bolland | 0% | 35% | 33% | 68% | 663 |
| Kate Bostock | 0% | 39% | 15% | 54% | 328 |
| John Dixon | 0% | 40% | 32% | 72% | 405 |
| Steven Sharp | 0% | 36% | 24% | 60% | 405 |
| Alan Stewart | 0% | 36% | 25% | 61% | 346 |
| Laura Wade-Gery1 | 0% | 30% | 30% | 60% | 243 |
1) Total Bonus earned based on 9 months worked in 2011/12.
The underlying basic EPS figure for 2011/12 was 34.9p which was above the 'threshold' target of RPI+3% but below 'maximum' performance, resulting in 34.95% vesting for awards up to 200% of salary and 28.97% vesting for awards between 200% and 400% of salary.
The targets for all outstanding awards are shown in the tables below:
| Average annual EPS growth in excess of inflation (RPI) | ||||
|---|---|---|---|---|
| Award | 20% vesting 1 |
100% vesting1 | EPS for start of scheme | |
| 2009 | (for awards up to 200% of salary) | 3% | 6% | 28.0p |
| (for awards between 200% and 400% of salary) | 3% | 8% | 28.0p | |
| 2010 | (for awards up to 200% of salary) | 3% | 9% | 30.0p1 |
| (for awards between 200% and 400% of salary) | 4% | 12% | 30.0p1 |
1) The EPS for the start of the 2010 scheme is based on the 52 week result, ensuring a like-for-like measure.
| ROCE | Revenue (FY14 – £m) | |||||
|---|---|---|---|---|---|---|
| % vesting1 | Cumulative EPS (p) | (%) | UK2 | Multi-channel3 | International4 | |
| Weighting (% of total award) | 50% | 20% | 10% | 10% | 10% | |
| 'Threshold' performance | 20% | 110p | 17.0% | £9,200m | £700m | £1,100m |
| 'Maximum' performance | 100% | 130p | 18.5% | £9,900m | £1,000m | £1,400m |
1) % Vesting is straight line between threshold and maximum performance.
2) Excluding Multi-channel.
3) Net of VAT/gross of returns.
4) Excluding Multi-channel/including the Republic of Ireland.
Chairman
Chief Executive Officer
Non-executive directors
Executive directors
Notice period/ unexpired term
Robert Swannell 23/08/2010 6 mths / 6 mths 450 – 450 450 –
Marc Bolland 01/05/2010 12 mths / 6 mths 975 – 975 975 –
Kate Bostock 10/03/2008 12 mths / 6 mths 608 – 608 590 18 John Dixon 09/09/2009 12 mths / 6 mths 562 – 562 540 22 Steven Sharp 08/11/2005 12 mths / 6 mths 675 – 675 655 20 Alan Stewart 28/10/2010 12 mths / 6 mths 567 – 567 550 17 Laura Wade-Gery 04/07/2011 12 mths / 6 mths 541 – 541 – –
Vindi Banga 01/09/2011 3 mths / 3 mths 70 – 70 – – Miranda Curtis 01/02/2012 3 mths / 3 mths 70 – 70 – – Jeremy Darroch 01/02/2006 3 mths / 3 mths 70 15 85 85 – Martha Lane Fox 01/06/2007 3 mths / 3 mths 70 – 70 70 – Steven Holliday 15/07/2004 3 mths / 3 mths 70 15 85 85 – Jan du Plessis 01/11/2008 3 mths / 3 mths 100 – 100 70 30
Basic salary/fee £000
Committee chair fee £000
Contract terms and current annual salaries/fees for all current members of the Board
Date of appointment
Current annual salary/fee £000
Annual salary/fee 2011 £000
Change1 £000
1) All changes to salaries and fees were effective 1 January 2012 except that for Jan du Plessis, which was effective from 1 March 2012 when he became Senior Independent Director. Laura Wade-Gery was appointed on a salary of £525,000 and received an increase of £16,000 on 1 January 2012.
Board appointments & contracts
Laura Wade-Gery was appointed Director, Multi-channel E-commerce on 4 July 2011. Her remuneration package is consistent with the structure for executive directors outlined in this report, and the full terms of her package, including awards made to facilitate her appointment were disclosed in last year's report.
Vindi Banga and Miranda Curtis joined the Board of Marks and Spencer Group plc as non-executive directors on 1 September 2011 and 1 February 2012 respectively. They both receive a basic annual fee of £70,000.
Following Sir David Michels retirement from the Board, Jan du Plessis was appointed Senior Independent Director on 1 March 2012. As a result of this appointment his annual fee increased from £70,000 to £100,000.
Sir David Michels, Deputy Chairman and Senior Independent Director, retired from the Board on 29 February 2012 following his second three-year term.
Louise Patten served as a non-executive director from 2006 until 13 July 2011, when she retired from the Board.
The Company recognises that executive directors may be invited to become non-executive directors of other companies and that these appointments can broaden their knowledge and experience to the benefit of M&S. The individual director retains the fee, the details of which are shown below for this financial year:
| Company | Fee £000 |
|
|---|---|---|
| Marc Bolland1 | Manpower inc | 117 |
| Steven Sharp | Adnams plc | 28 |
| Laura Wade-Gery2 | Trinity Mirror plc | 30 |
1) Marc Bolland's fee is paid in cash and stock units and in US dollars. For purposes of this table the values were converted to sterling using the £:\$ spot rate as at 30 March 2012 for stock units and the average rolling £:\$ rate during the year for cash payments.
2) Laura Wade-Gery stepped down from the Board of Trinity Mirror plc on 10 May 2012.
The graph illustrates the performance of the Company against the FTSE 100 over the past five years. The FTSE 100 has been chosen as it is a recognised broad equity market index of which the Company has been a member throughout the period.
The beneficial interests of the directors and connected persons in the shares of the Company are shown opposite.
There have been no changes in the directors' interests in shares or options granted by the Company and its subsidiaries between the end of the financial year and 23 May 2012. No director had an interest in any of the Company's subsidiaries at the beginning or end of the year.
| Ordinary shares as at 3 April 2011 (or at date of appointment) |
Ordinary shares as at 31 March 2012 |
|
|---|---|---|
| Robert Swannell | 70,000 | 100,000 |
| Marc Bolland | 147,430 | 147,430 |
| Kate Bostock | 182,514 | 187,243 |
| John Dixon | 102,529 | 156,295 |
| Steven Sharp | 387,808 | 397,044 |
| Alan Stewart | 10,000 | 10,000 |
| Laura Wade-Gery | – | 55,055 |
| Miranda Curtis | – | 5,500 |
| Vindi Banga | – | 2,000 |
| Jeremy Darroch | 2,000 | 2,000 |
| Martha Lane Fox | 20,100 | 20,100 |
| Steven Holliday | 2,500 | 2,500 |
| Jan du Plessis | 20,000 | 20,000 |
| Salary/fee1 | Cash allowance2 |
Compensatory awards3 |
Benefits4 | Dividend equivalents |
Bonus5 | Total 2012 |
Total 2011 |
|
|---|---|---|---|---|---|---|---|---|
| £000 | £000 | £000 | £000 | £000 | £000 | £000 | £000 | |
| Chairman | ||||||||
| Robert Swannell | 450 | – | – | 1 | – | – | 451 | 128 |
| Chief Executive Officer | ||||||||
| Marc Bolland | 975 | 297 | – | 40 | 38 | 332 | 1,682 | 4,382 |
| Executive directors | ||||||||
| Kate Bostock | 595 | 166 | – | 19 | – | 164 | 944 | 1,017 |
| John Dixon | 546 | 82 | – | 7 | 54 | 202 | 891 | 833 |
| Steven Sharp | 660 | 166 | – | 36 | – | 203 | 1,065 | 1,138 |
| Alan Stewart | 554 | 139 | – | 32 | 7 | 173 | 905 | 412 |
| Laura Wade-Gery | 396 | 111 | 741 | 7 | – | 122 | 1,377 | – |
| Non-executive directors | ||||||||
| Vindi Banga | 41 | – | – | – | – | – | 41 | – |
| Miranda Curtis | 12 | – | – | – | – | – | 12 | – |
| Jeremy Darroch | 85 | – | – | – | – | – | 85 | 76 |
| Martha Lane Fox | 70 | – | – | – | – | – | 70 | 68 |
| Steven Holliday | 85 | – | – | – | – | – | 85 | 81 |
| Jan du Plessis | 73 | – | – | – | – | – | 73 | 68 |
| Directors retiring from the board | ||||||||
| during the year | ||||||||
| Sir David Michels | 92 | – | – | – | – | – | 92 | 209 |
| Louise Patten | 23 | – | – | – | – | – | 23 | 68 |
| Total | 4,657 | 961 | 741 | 142 | 99 | 1,196 | 7,796 | 8,480 |
1) Executive director salary increases, where applicable, were effective from 1 January 2012.
2) The elements shown in the Cash allowance column of the table include pension supplement and car allowance, as applicable to each director and are described on page 23.
3) The Compensatory awards for Laura Wade-Gery include £335,000 in cash and £406,000 in shares for bonus and share awards that would have vested in 2011 had she remained with her previous employer (as detailed in last year's report).
4) The elements shown in the Benefits column of the table include car, life assurance and driver, as applicable to each director and are described on page 23.
5) For executive directors, 50% of the total bonus earned (shown on page 26) is paid in cash as shown in the table above. The remaining 50% is deferred into shares which will be granted in June 2012. Laura Wade-Gery's bonus is based on nine months worked in 2011/12.
Steven Holliday, Chairman of the Remuneration Committee London 21 May 2012
Strategic review
The Company's register of shareholders is maintained by our Registrar, Equiniti. Shareholders with queries relating to their shareholding should contact Equiniti directly. Their contact details can be found overleaf. Alternatively, shareholders may find the 'Investors' section of our corporate website useful for general queries.
Paid in January and July each year. We encourage shareholders to have dividends paid directly into their bank account to ensure efficient payment and cleared funds on the payment date. Those selecting this payment method receive an annual consolidated tax voucher in January, showing both dividend payments in the respective tax year. However, we are able to send separate tax vouchers with each payment, if preferred.
To change how you receive your dividends either log on to shareview.co.uk or contact Equiniti.
Do you have a small shareholding which is uneconomical to sell? You may want to consider donating it to ShareGift (Registered charity no. 1052686), a charity that specialises in donating unwanted small shareholdings to good causes. You can find out more by visiting sharegift.org or by calling +44 (0)207 930 3737.
* provisional dates.
†Those registered for electronic communication or news alerts at marksandspencer.com/thecompany will receive notification by email when this is available.
Waterside House, 35 North Wharf Road, London W2 1NW Telephone +44 (0)20 7935 4422 Registered in England and Wales (no. 4256886)
Equiniti Limited, Aspect House, Spencer Road, Lancing, West Sussex BN99 6DA United Kingdom Telephone 0845 609 0810 and outside the UK +44 (0) 121 415 7071 Online: help.shareview.co.uk
From here, you will be able to securely email Equiniti with your enquiry.
M&S has actively been encouraging shareholders to sign up to this method of communication, as the reduction in printing costs and paper usage make a valuable contribution to our 'Plan A' commitments. Shareholders, can be notified by email whenever we release trading updates for investors to the London Stock Exchange. These are not mailed to shareholders.
Registration is very straightforward through Shareview, the internet based platform provided by Equiniti. For information about how to register, please visit the 'Investors' section of our corporate website.
REMEMBER: if it sounds too good to be true, it probably is! It sounds obvious, but if a stranger rings you out of the blue and tries to sell you shares in companies you have probably never even heard of – take great care. They may be part of a financial scam using hard-sell tactics to persuade you to buy shares. Shareholders are advised to be very wary of any unsolicited advice, offers to buy shares at a discount, or offers of free reports about the Company. Further information can be found at cityoflondon.police.uk/citypolice within the Economic Crime Section
The AGM of Marks and Spencer Group plc will be held at the Royal Festival Hall, Southbank Centre, London on 10 July 2012. The Notice of Meeting is given together with explanatory notes, in the booklet which accompanies this report. Key dates for your diary
| Record date to be eligible for the final dividend | |
|---|---|
| Results – Quarter 1 Interim Management Statement† | |
| Annual General Meeting | |
| Final dividend payment date for the year to 31 March 2012 | |
| 6 November 2012* | Results – Half Year† |
| 14 November 2012* | Ex-dividend date – Interim dividend |
| 16 November 2012* | Record date to be eligible for the interim dividend |
| Results – Quarter 3 Interim Management Statement† | |
| 11 January 2013* | Interim dividend payment date |
Group Secretary and Head of Corporate Governance Amanda Mellor
For both the Annual Report or Annual Review go to marksandspencer.com/thecompany
Alternatively, call 0800 591 697
Please note, students are advised to source information from our website.
email us at [email protected] Customer queries: 0845 302 1234 Shareholder queries: 0845 609 0810
VIEW This Annual Report and our How We Do Business Report online annualreport.marksandspencer.com marksandspencer.com/howwedobusiness
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