Slide 1: Next January 2018
Slide 2: Group income statement
£m 2018 2017 Ful Pree Total sales 4,118 4137 -0.5% +0.7% Operating profit 760 828 - 8.2% Interest (34) (38) + £4m Profit before tax 726 790 - 8.1% Taxation (134) (155) Profit after tax 592 635 - 6.8% EPS (underlying) 416.7p 441.3p - 5.6% Ordinary dividends per share 158p 158p Dividend cover 2.6x
Slide 3: Cash flow
£m Profit before tax Depreciation / disposals Capital expenditure Working capital / other Tax paid ESOT Cash flow before distribution
Slide 4: Capital expenditure
Cash Flow next 2018 Capital expenditure (161) Jan 2019(e) Jan 2018 Jan 2017 £130m £104m £161m | Warehouse £28m | Head Office and Systems | Cosmetic refits £35m ae £12m £15m Stores
Slide 5: Cash flow after distributions
£m Profit before tax Depreciation / disposals Capital expenditure Working capital / other Tax paid ESOT Ordinary dividends Special dividends / buybacks Net cash flow
Slide 6: Balance Sheet: Debtors
Balance Sheet next 2018 561 43 490 Debtors 1,126 + £122m Online Jan 2018 Jan 2017 debtors | ahivne 2” MisKeortn Full year . Jan 2018 + 69 Jan 2017 credit sales 6%
Slide 7: Balance Sheet: Debtors
Balance Sheet next 2018 561 43 490 Debtors 1,126 + £122m Online Jan 2018 Jul 2017 Jan 2017 debtors £1,117m + 12% £997m 0% £1,002m Full year i 201 +109 Jul 2017 +19 Jan 2017 credit sales [muumammae * '07 MRR 1% [Re
Slide 8: Balance sheet summary
£m 2018 2017 Fixed assets and investments 561 581 Goodwill and intangibles 43 43 Stock 490 451 Debtors 1,248 1,126 Creditors / derivatives (963) (893) Pension surplus 106 63 Net assets 483 510
Slide 9: Full Year Debt and Cash Flow
Full Year Debt and Cash Flow next 1400 1200 Jan 2017 861 1000 800 Operational | 335 | “79. Special dividends 256 600 400 200 £m
Slide 10: Debt and cash flow including buybacks
* * Includes £26m of share buybacks from 2018/19 surplus cash
Slide 11: Full Year Debt and Cash Flow Jan 2018 to Jan 2019
Full Year Debt and Cash Flow Jan 2018 to Jan 2019© 1400 Jan 2019 200 Jan 2018 Central 1 iT (e) 1.0 bn Guidance F . 1000 Operational Online debt () | | _ 300 Buybacks 11 Oo | 275@ 800 600 400 200 £m
Slide 12: Funding Requirements
Funding Requirements next 1400 1.4bn Peak 00 Bank facility 1.2bn© 525m 1000 Jan 2019 Libne 800 600 Bonds 875m 400 200 £m
Slide 13: Retail
Slide 14: 2016/17 profit restated
2016/17 profit reported Change in cost allocation 2016/17 profit restated Retail Online £339m £444m +£14m -£14m £353m £430m £783m
Slide 15: Retail results
£m 2018 2017 Full Price Total sales 2,123 2,305 - 79% - 70% Operating profit 269 353 Restated
Slide 16: Retail: Store Openings and Closures
Retail : Store Openings and Closures Sq. ft. Stores 000’s January 2017 538 7,978 New 7 70 Extensions (4), resites (11) 143 Closed (14), resites (3) (17) (162) January 2018 528 8,029 (10) +51
Slide 17: Retail: Store Openings and Closures
Retail : Store Openings and Closures Stores NBC I Closed 14 £2.7m Compulsory purchase 1 £0.8m Lease end 1 £1.7m Sublet 2 £0.2m 12% 24% 10% 8%
Slide 18: Retail: Sales Analysis
Retail : Sales Analysis 2018 Full Price 2,123 - 7.0% 269 Performance of new space Sales v target Payback (months) Store profit * Forecast for stores opened or extended in the last 12 months
Slide 19: Retail: Profit Analysis
Retail : Profit Analysis 2018 Full Price 2,123 - 7.0% 269 12.7% Margin movement Bought-in gross margin + 0.1% Markdown - 0.3% Sale stock Stock loss - 0.1% Markdown sales |= 16% | Achieved gross margin - 0.3%
Slide 20: Retail: Profit Analysis
Retail : Profit Analysis 2018 Full Price 2,123 - 70% 269 12.7% Achieved gross margin - 0.3% Store payroll + 0.2% Store occupancy - 17% Warehousing and distribution - 0.2% Central overheads - 0.6% Margin movement - 2.6%
Slide 21: Online
Slide 22: Online: Sales Analysis
Online : Sales Analysis 2018 Full Price 1,887 + 11.2% 461 Full price sales analysis Increase on last year H1 H2 NEXT Brand UK + £16m + 2% -4% +7% LABEL + £92m +43% +41% +45% UK total + £108m +9% +3% +14%
Slide 23: Online: Sales Analysis
Online : Sales Analysis 2018 Full Price 1,887 + 11.2% 461 Full price sales analysis Increase on last year UK total + £108m + 9% Overseas + £59m + 26% Total + £167m + 11%
Slide 24: Online: Sales Analysis
Online : Sales Analysis 2018 Full Price 1,887 + 11.2% 461 Full price sales analysis Increase on last year Avg. customers UK total + £108m + 9% + 3% Constant Currency Overseas + £59m + 10% + 10% Total + £167m + 9% +4%
Slide 25: Online: Sales Analysis
Online : Sales Analysis 2018 Full Price 1,887 + 11.2% 461 Full price sales analysis Increase on last year Avg. customers UK credit + £98m + 9% 0% UK cash + £10m + 5% + 8% UK total + £108m +9% +3%
Slide 26: UK credit active customers
Online : Sales Analysis 2018 Full Price 1,887 + 11.2% 461 UK credit active customers 0% ” nN we AS 5% 4 * Prior year active customers have been restated as reflected last year
Slide 27: Online: Profit Analysis
Online : Profit Analysis 2018 Full Price 1,887 + 11.2% 461 24.4% Margin movement Bought-in gross margin - 0.6% Markdown -02% REA Achieved gross margin -0.8% PS 1% |
Slide 28: Online: Profit Analysis
Online : Profit Analysis 2018 Full Price 1,887 + 11.2% 461 24.4% Achieved gross margin - 0.8% Interest income - 0.3% Catalogues and mailshots + 1.0% Online marketing - 0.3% Systems - 0.2% Central overheads + 0.2% Margin movement - 0.4%
Slide 29: 2017/18
2017/18
Slide 30: Cost price inflation
Slide 31: Cost price inflation: UK clothing and footwear
Slide 32: Subdued UK consumer
Slide 33: Online growth 10.3%
10.3%
Slide 34: Cyclical and structural factors 2017/18
Slide 35: Structural shift to online 2017/18
Structural SL to pein : 2017/18 ynline Brand -167m + £26m + 11.2% + 0.7%
Slide 36: Structural shift to online: profit performance
Structural shift to online 2017/18 Profit performance Full price sales + 0.7% 2016/17 £790m + £167m
Slide 37: Structural shift to online: profit performance
Structural shift to online 2017/18 Profit performance Full price sales + 0.7% 2016/17 £790m
Slide 38: Structural shift to online: profit performance
Structural shift to online 2017/18 Profit performance Full price sales + 0.7% 2016/17 £790m
Slide 39: Structural shift to online: profit performance
Structural shift to online 2017/18 Profit performance Full price sales + 0.7% 2016/17 £790m
Slide 40: Structural shift to online: profit performance
Structural shift to online 2017/18 Profit performance Full price sales + 0.7% 2017/18 2016/17 £726m £790m - £141m + £167m ¢ Stock for sale - 4% ¢ Markdown sales - 10%
Slide 41: Cost price inflation
Slide 42: Cost price inflation
QP wa 12% de 0% + 5 . . : : Cost price inflation
Slide 43: Subdued UK consumer
C P| ost price | ONS (20 March) : consume + 5% ’ nn 16 Jan 17 Jan 18 ONS (21st March) Jan2 CPI uaieey s ——— 5 0E (8th February) + 2% Avg. earnings +1% v Source: ONS - CPI Actual (13' February), Average Weekly Earnings (21st February) 0%
Slide 44: Cost price inflation / Subdued UK consumer
Cost price inflation Subdued UK consumer
Slide 45: 2018/19
2018/19
Slide 46: 2018/19 cyclical and structural factors
Slide 47: 2018/19 The plan
Slide 48: Tailoring
Tailoring
Slide 49: Improve ranges: full price sales outlook
2018/19 A) Improve ranges The plan Full price sales outlook | 2017/18 Presented on 23'¢ March 2017
Slide 50: Improve ranges: sales by quarter 2017/18
2018/19 ©) Improve ranges The plan Full price sales by quarter | 2017/18 To Christmas Eve Full price sales outlook | 2017/18© Qi Q2 Q3 Q4
Slide 51: Improve ranges: sales by quarter 2018/19
2018/19 ©) Improve ranges The plan Full price sales by quarter | 2018/19 at | Mi 3 04 jee) |e G GS
Slide 52: Defend Retail sales
Slide 53: Stock visibility
OGOOOGD§ HHoOOOoGOE ©OOOOGO® OOoo® Stock visibility
Slide 54: Stock visibility
OGOOOGD§ HHoOOOoGOE ©OOOOGO® OOoo® Stock visibility
Slide 55: Defend Retail sales: Stock visibility
Defend Retail sales Stock visibility ~30% ® G) Online customer
Slide 56: Attack costs
Slide 57: Attack costs
Attack costs es) Retail manhours Fs) Retail deliveries Rent/concessions Catalogues and photography Case studies Technology Right sizing Negotiation Relevance
Slide 58: Attack costs: Retail manhours
Attack costs Fsy Retail manhours £6m) Saving RFID, stock on shop floor £2m Units scanned/hour Before 1,275
Slide 59: Attack costs: Retail deliveries
Attack costs e<® Retail deliveries £4m© New delivery schedule 2014 2015 2016 2017 110% Indexed from 2014 105% ™ of deliveries 100% oT 95% [ Retail sales \ J 90%
Slide 60: Attack costs: 2017/18 rent/concessions
Attack costs 2017/18 rent/concessions Before Gross rent (19 stores) £6.5m Capital contributions * Excludes any capital contributions or incentives After £4.9m* - 25% £5.0m
Slide 61: Attack costs: 2017/18 rent/concessions
Attack costs 2017/18 rent/concessions Before After* Gross rent (19 stores) £6.5m £4.9m - 25% Concessions -£80k -£250k £6.4m £4.6m -28% Net rent to sales 10.3% — 7.5% Average lease length Average profit 7 years 21% * Excludes any capital contributions or incentives
Slide 62: Attack costs: 2018/19 rent/concessions
Attack costs 2018/19 rent/concessions™ Before Gross rent (29 stores) £9.3m Capital contributions * Excludes any capital contributions or incentives After £7.3m*- 22% £7.0m
Slide 63: Attack costs: 2018/19 rent/concessions
Attack costs 2018/19 rent/concessions™ Before After* Gross rent (29 stores) £9.3m £7.3m - 22% Concessions -£90k -£560k £9.2m £6.7m -27% Net rent to sales 9.0% —> 6.5% Average lease length Average profit 5 years 21% * Excludes any capital contributions or incentives
Slide 64: Attack costs: concession income
Attack costs 2018/19 rent/concessions® 2017/18 2018/19 Concession income £8m £13m * Excludes any capital contributions or incentives
Slide 65: Arndale concessions
Attack costs EY Arndale concessions £800k) Bridal Barbers Restaurant/bar “oe —“_- b> Car New Costa Kids Activities
Slide 66: Restaurant/bars open
2 restaurant/bars open... ¢ Manchester Arndale ¢ Hull Appraised Profit % 12% Capex £2.7m IRR 28% 4 more planned... ¢ Sheffield Meadowhall ¢ Sheffield city centre ¢ Leeds Thorpe Park * Solihull
Slide 67: Attack costs: Catalogues and photography
Attack costs Catalogues and photography £7m© Saving Photography £3m Catalogue distribution £2m Reduced pages £2m
Slide 68: Maximise potential online
Slide 69: Maximise potential online: FP sales growth
Maximise potential online 2017/18 FP sales growth (cumulative) -0.5% Online - 2.5% -4.5% - 6.5% - 8.5% ~ - 10.5% - 12.5% Feb 2017 Mar Jun Jul Aug Sep Oct Nov Dec Jan 2018 12.5% 10.5% 8.5% 6.5% 45% 2.5% 0.5%
Slide 70: Online development 2017/18
Maximise potential online Online development 2017/18 Q2 Ql Nextpay Mobile site Next Unlimited Flowers website International mobile sites Intelligent recommendations Product personalisation - Phl Fast registration & checkout
Slide 71: Online development 2018/19
Maximise potential online Online development 2018/19...more to do
Slide 72: Targeted marketing
Maximise potential online Targeted marketing Digital marketing auction
Slide 73: Targeted marketing
All figures are illustrative Maximise potential online Targeted marketing 10m visitors/month
Slide 74: Targeted marketing
All figures are illustrative Maximise potential online Targeted marketing 1 O an MEDIUM 33% Propensity to buy
Slide 75: Targeted marketing
All figures are illustrative Maximise potential online Targeted marketing 10m 1.4m 33% MEDIUM 57%
Slide 76: Targeted marketing
All figures are illustrative Targeted marketing 10m 1 4 mM = £10,000 10% HIGH vy £7 & 33% MEDIUM 38% BIBS 57% £7 &
Slide 77: Targeted marketing
All figures are illustrative Maximise potential online £10,000 1.4m — £10,000 £7 & £11 & MEDIUM 38% EWEN MEDIUM VE £7 & £7 & £3 &
Slide 78: Targeted marketing: uplift in return
All figures are illustrative Maximise potential online £10,000 Uplift in return on 2 0) ens advertising spend + 1 % MEDIUM 48% Bes Uplift in IRR + 715% £3 &
Slide 79: Online development 2018/19: more to do
Maximise potential online Online development 2018/19...more to do [lsaaa@* ARa1e) Targeted marketing | @ 3 equal payments © 3 months 3 step credit © No interest Personalised promotions Product personalisation - Ph2
Slide 80: Online development 2018/19: more to do
Maximise potential online Online development 2018/19...more to do
Slide 81: Product personalisation
sae be RoR Turnover 602 PRODUCTS PERSONALISED Sot by [EZ £7 me ae 25 LNEWin | : in Stock (45 fo) Dove \V PERSONALISED canbe personaised \ pepantment i ASHLEY PEARCE , W Homenere 427 Fasnen “am, 2 \ Y > sener ssuers ame out > caTEGoRY ; hn ee OCA VNALALE bre OCA nal @ wre > covour Kk persenalue Perso
Slide 82: Depot
Depot Depot Depot
Slide 83: Product personalisation Ph2
Slide 84: • • •
• • •
Slide 85: Happy thoughts...
Slide 86: Store Portfolio Stress Test
Slide 87: Store Portfolio Stress Test
Slide 88: Store Portfolio Stress Test
Slide 89: Store Portfolio Stress Test
Slide 90: Store Portfolio Stress Test
Slide 91: Store Portfolio Stress Test
Slide 92: Central Guidance 2018/19
Slide 93: Central Guidance: profit performance
Slide 94: Central Guidance: profit performance
Slide 95: Central Guidance: profit performance
Slide 96: Central Guidance: profit performance
Slide 97: Central Guidance: profit performance
Slide 98: Central Guidance 2018/19
Slide 99: Next January 2018
Slide 100: Slide 100
Slide 101: Slide 101