Marks And Spencer Group Plc · LSE:MKS
Marks And Spencer — FY2025 Earnings Presentation
39 slides from Marks And Spencer's earnings presentation, May 21, 2025
Slide 1: Full Year Results
= ~ ; ‘ ~ . \ : aw 4] \ ry / es ks ) | : MFULL YEAR RESULTS@™) RESHAPI M&S 21 MAY 2025
Slide 2: Executive
ECUTIVE | i pm A.
Slide 3: Third Year of Growth and Strong Financial Position
RESHAPING M&S THIRD YEAR OF GROWTH AND STRONG FINANCIAL POSITION ~* MALR Ey & COFFEE E Profit before.tax and adjusting items at £875.5m, up 22.2% Statutory PBT down 23.9% at £511.8m due to a £248.5m non-cash impairment of investment in Ocado Retail Limited ir cae See Food sales up 8.7%; adjusted ope
Slide 4: Increasing Investment in Reshaping M&S to Drive Growth
RESHAPING M&S INCREASING INVESTMENT IN RESHAPING M&S TO DRIVE GROWTH Food volume and value share growth for three years. LFL sales up 8.6% in 24/25 M&S Fashion, Home & Beauty value share growth for three years. LFL sales up 4.4% in 24/25 International resetting and refocusing for future growth, deve
Slide 5: Food
RESHAPING M&S FOOD Difference to market - Index +33% 140 vs 21/22 130 120 10 100 90 80 Absolute NPS +7% 80 vs 21/22 70 te) 50 40 0 20 2020 2021 2022 2023 2024 2025 VALUE PERCEPTION Investment in trusted value driving improved perception 2020 2021 2022 2023 2024 2025 @ Market M&S QUALITY PERCEPTION 1
Slide 6: Food: Building a Shopping List Retailer
RESHAPING M&S FOOD: BUILDING A SHOPPING LIST RETAILER Customer value perception at a 10-year high Remarksable value products appear in 1in 4 baskets Key shopping list item prices ‘dropped and locked’ ‘Dine In’ popular as an all-year round offer Investment in quality continues 1,000 quality upgrades
Slide 7: Food: New Stores Generating Strong Returns
RESHAPING M&S FOOD: NEW STORES GENERATING STRONG RETURNS New and renewal stores driving growth Larger stores enabling customers to shop the full range New stores outperformed target by c. 20% Renewals strong - Chancery Lane up 35% on previous levels Consistent outperformance of invested stores Over
Slide 8: Food: Developing a Trading Model Which Sustains Growth
RESHAPING M&S FOOD: DEVELOPING A TRADING MODEL WHICH SUSTAINS GROWTH M&S Driving instore efficiency and productivity hewnece aromesuen all year round- weekly Forecasting and ordering system now complete Weeks with One Best Way retail operations reducing stock file errors newness and improving effici
Slide 9: 4.2 4.1 3.9 22/23 23/24 24/25
4.2 4.1 3.9 22/23 23/24 24/25 9
Slide 10: Fashion, Home & Beauty: Increasing Style and Newness
RESHAPING M&S FASHION, HOME & BEAUTY: INCREASING STYLE AND NEWNESS Increased style perception Strong sales growth across categories Core categories growing, supported by strong vs LY campaigns and collaborations 16% Style perception increasing; ranked 29 vs 6th in 2022 Continuing to lead on quality
Slide 11: Fashion, Home & Beauty: Improving Online Experience
RESHAPING M&S FASHION, HOME & BEAUTY: IMPROVING ONLINE EXPERIENCE Attracting new customers and driving sales Active customers up 9% vs LY Marketing continues to be focused towards brand and social channels Improvements to the offer include upgraded imagery, navigation and availability Partner brands
Slide 12: Fashion, Home & Beauty: Stores Generating Strong Returns
RESHAPING M&S FASHION, HOME & BEAUTY: STORES GENERATING STRONG RETURNS M&S Stores perform ahead of a declining market Stores up 1% compared to a market down 3% Dundee and Washington Galleries trading +15% vs plan Fosse Park renewal trading +20% vs LY Consistent outperformance of invested stores over
Slide 13: 4.9 3.4 3.5 3.5 3.3 23/24 24/25 25/26 26/27 27/28
4.9 3.4 3.5 3.5 3.3 23/24 24/25 25/26 26/27 27/28 13
Slide 14: International: Resetting and Refocusing for Growth
14 RESHAPING M&S INTERNATIONAL: RESETTING AND REFOCUSING FOR GROWTH Weak performance in India and FH&B franchise orders Reported sales down 8%, but improvements seen in second half India impacted by challenging trading conditions Growth in Food franchise shipments offset by a softer FH&B order 00) J
Slide 15: Ocado Retail: Strong Volume Growth, Losses Reduced
RESHAPING M&S OCADO RETAIL: STRONG VOLUME GROWTH, LOSSES REDUCED Strong revenue growth with losses reducing Revenue up 15.5%, driven by growth in active customers and increased frequency Investing in value through price drops and Ocado Price Promise Initial improvements in product and slot availabil
Slide 16: Our Strategic Priorities
RESHAPING M& OUR STRATEGIC PRIORITIES QUALITY FOOD, STYLISH CLOTHES, HOMEWARE AND BEAUTY umbeat of weekly innovation in Food nd year of over 1000 quality upgrades Buying deeper and elevating style in Fashion Category potential in Fashion, Home & Beauty ENHANCED TRUSTED VALUE TO DRIVE VOLUME Value li
Slide 17: Chief Financial Officer
JER PrO, CHIEF FINANCIAL OFFICER €
Slide 18: Full Year Financials at a Glance
RESHAPING M&S FULL YEAR FINANCIALS AT A GLANCE ca a re Or £875.5m +22.2% £13.9bn # £511.8m +6.1% -23,9% Profit before tax Group sales Pri IstroMesiey and adjusting items £443.3m WW £438m +£5.5m +£392m better £1.79bn +£0.4bn better Free cash flow Net funds from operations z excluding leases Net debt
Slide 19: Food Performance
RESHAPING M&S FOOD PERFORMANCE 24/25 23/24 ato Sales (£bn) 9.0 8.3 8.7% LFL sales % 8.6% = = eee before adjusting 4841] 388.4 24.6% Operating margin % 5.4% 47% 0.7% pts acecr ae BURGERS
Slide 20: Food Operating Profit Margin Bridge
RESHAPING M&S FOOD OPERATING PROFIT MARGIN BRIDGE Operating profit margin before adjusting items Operating costs to sales % 23/24 47 Retail costs 0.5 Gross margin (0.1) . Logistics costs 0.0 . Digital & Technol 0.1 Operating cost leverage 0.8 ‘gira eennorogy (01) Central costs 0.4 24/25 5.4 Total 0.
Slide 21: Fashion, Home & Beauty Performance
RESHAPING M&S FASHION, HOME & BEAUTY PERFORMANCE 24/25 23/24 ee Sales (Ebn) 42 4] 3.5% Store sales 2.8 2.8 1.0% Online sales 1.4 1.3 8.8% LFL sales % 44% = - ae a before adjusting 4753 4375 86% Operating margin % 11.2% 10.7% 0.5% pts 21
Slide 22: Fashion, Home & Beauty Operating Profit Margin Bridge
RESHAPING M&S FASHION, HOME & BEAUTY OPERATING PROFIT MARGIN BRIDGE M&S Operating profit margin before adjusting items Operating costs to sales % 23/24 10.7 Retail costs 0.8 Gross margin 1.2 . Logistics costs (0.2) . Digital & Technol 0.6 Operating cost deleverage (0.7) ‘gla ecnnology @8) Central co
Slide 23: International Performance
RESHAPING M&S INTERNATIONAL PERFORMANCE Total International 24/25 Change vs 23/24 Change vs 23/24 (Reported Currency) (Constant Currency) Sales (£m) 658.0 (8.5%) (7.1%) a profit before adjusting items 463 1%) Operating margin % 7.0% 0.4% pts ola aba yas MINI BITES 23 M&S Riyadh Park
Slide 24: Structural Cost Reduction Programme
- _ RESHAPING M&S STRUCTURAL COST REDUCTION PROGRAMME 24/25 delivered Digital & Technology Other Property ue Food Fi logistics 2 Fashion, Home & Beauty Ambition for 27/28 Over £500m logistics os 5 Initial Revised obj Se A a) © _wataztses = » 7) = y mm . jective objective
Slide 25: Group Profit
RESHAPING M&S GROUP PROFIT £m 24/25 23/24 £m Change % Change Sales! Food 9,021.0 8,298.8 722.2 8.7% Fashion, Home & Beauty 4,235.3 4,091.4 143.9 3.5% International 658.0 719.1 (61.1) (8.5%) Total sales 13,914.3 13,109.3 805.0 6.1% Operating profit! Food 484] 388.4 95.7 24.6% Fashion, Home & Beauty 4
Slide 26: Free Cash Flow
RESHAPING M&S FREE CASH FLOW £m 24/25 23/24 £m Change Operating profit 624.3 714.2 (89.9) Adjusting items within operating profit 360.2 124.4 235.8 Operating profit before adjusting items 984.5 838.6 145.9 Depreciation, amortisation, impairments and disposals 542.6 526.3 16.3 Cash lease payments (34
Slide 27: Change in Net Debt
RESHAPING M&S CHANGE IN NET DEBT Change in Net Debt Free cash flow from operations 443 Lease surrender payments (19) Transactions with non-controlling interest (3) Acquisitions, investments and divestments (12) Dividends paid (60) Decrease in lease debt (2) Exchange and other non-cash movements 29 D
Slide 28: Net debt (funds) excluding lease liabilities and lease liabilities
£2.6bn £2.4bn £2.3bn £2.3bn £2.2bn £2.2bn £1.4bn £1.1bn £0.4bn £0.4bn 19/20 20/21 21/22 22/23 23/24 24/25 Net debt (funds) excluding lease liabilities Lease liabilities 28
Slide 29: Investment Performance
RESHAPING M&S INVESTMENT PERFORMANCE FULL LINE STORES Over the past three years 11 new Full Line stores have generated returns ahead of hurdle rates FOOD STORES Over the past three years 19 new Food stores have generated returns ahead of hurdle rates 23/24 24/25 STRONG RETURNS Increasing return on c
Slide 30: Capital Expenditure
RESHAPING M&S CAPITAL EXPENDITURE Capex net of disposals in 24/25 Store rotation 30 £530m New stores Store renewal Property maintenance Supply chain Digital & Technology International, ROI & Other Disposals Plan for 25/26 c.£600m - £650m Maintenance £200m > £250m Growth and cost out £400m > £450m 16
Slide 31: Disciplined Capital Allocation
RESHAPING M&S DISCIPLINED CAPITAL ALLOCATION M&S | 1. Generation of free cash flow 2 Invest for growth and structural \ 4 cost reduction 3, Returns on investment —= 4 Reducing net debt 5 Value creation for shareholders
Slide 32: Appendix
a | Te APPENDIX
Slide 33: Food and Fashion, Home & Beauty include UK and ROI
1 Food and Fashion, Home & Beauty include UK and ROI 2 Constant Currency 33
Slide 34: Adjusting Items
RESHAPING M&S ADJUSTING ITEMS 24/25 £m Strategic programmes (104.1) Store estate (84.4) International reset (20.6) Digital & Technology transformation (10.2) Furniture simplification Nl Other adjusting items (259.6) Store impairments, impairment reversals and other property charges 2.3 Amortisation
Slide 35: Depreciation and Amortisation
RESHAPING M&S DEPRECIATION AND AMORTISATION £m Adjusting operating profit 484.1 475.3 46.3 (21.2) 984.5 Depreciation Tangible Asset 124.3 102.6 57 - 232.6 Right of use asset 73.2 497 19.0 - 141.9 Amortisation 28.1 30.4 5.9 = 64.4 Impairment & Disposals 16.2 771 2 2 93.3 Depreciation & Amortisation 2
Slide 36: £165.8m £518.5m £841.7m £701.4m
£165.8m £518.5m £841.7m £701.4m
Slide 37: Stores and Selling Space
RESHAPING M&S STORES AND SELLING SPACE NUMBER OF STORES UK Sat sa ft) Mar 25. Mar 24 Openings Closures Change oe rosur eer Shopping Centre 1.6 16 7 io} (1) (1) Retail Park 47 83 81 2 ie} 2 2 High Street 2.0 67 74 0 (7) (7) High Street - large 4.4 64 68 io} (4) (4) 1 Full Line total 12.6 230 240 2 (1
Slide 38: Ocado Retail Economic Interest Unchanged
38 RESHAPING M&S OCADO RETAIL ECONOMIC INTEREST UNCHANGED Ocado Retail is a joint venture, 50% owned by M&S and 50% by Ocado Group M&S continues to be a 50% shareholder of Ocado Retail and our economic interest is unchanged There are no significant changes to governance and decision-making processes
Slide 39: Ocado Retail Accounting Consolidation Principles
RESHAPING M&S OCADO RETAIL ACCOUNTING CONSOLIDATION PRINCIPLES Income statement 100% of Ocado Retail’s results included line-by-line in M&S results M&S Group Adjusted PBT stated after deduction of minority interests Balance sheet Assets / liabilities recognised line-by-line in M&S balance sheet and
Marks and Spencer Group — FY2025 Earnings Presentation on 6ix