Marks And Spencer Group Plc · LSE:MKS
Marks And Spencer — Q2 2025 Earnings Presentation
26 slides from Marks And Spencer's earnings presentation, Nov 6, 2024
Slide 1: 1
1
Slide 2: Stuart Machin, Chief Executive
STUART MACHIN CHIEF EXECUTIVE M&S
Slide 3: Strong H1 results, building on last year's performance
STRONG H1 RESULTS, BUILDING ON LAST YEAR’S PERFORMANCE 3
Slide 4: Our strategic priorities
OUR STRATEGIC PRIORITIES QUALITY FOOD, STYLISH CLOTHES, BIGGER FREQUENT CUSTOMER BASE, HOMEWARE AND BEAUTY SHOPPING MORE BROADLY ONLINE AND OMNICHANNEL ENHANCED TRUSTED VALUE TO DRIVE VOLUME STORE ROTATION AND RENEWALS CREATE DELIVER EXCEPTIONAL PROFITABLE PRODUCTS SALES GROWTH GLOBAL GROWTH STRUCTU
Slide 5: Food: sustaining volume growth and competitiveness
FOOD: SUSTAINING VOLUME GROWTH AND COMPETITIVENESS VOLUME1 GROWTH IN SPINE OF THE BASKET CATEGORIES INVESTING IN TRUSTED VALUE AND INNOVATION H1 vs LY 12.6% 11.4% 10.1% 9.0% 7.8% 7.1% 6.5% NEW FOOD STORES AND RENEWALS TRADING WELL ANTICIPATED PAYBACK OF FY24 FOOD STORE OPENINGS Years HURDLE RATE 3.4
Slide 6: Clothing & Home: delivering consistent growth
CLOTHING & HOME: DELIVERING CONSISTENT GROWTH MARKET SHARE GROWTH IN ALL CLOTHING CATEGORIES STRONG PERFORMANCE OF CORE CATEGORIES vs LY +1.0% +0.9% +0.8% +0.7% NEW FULL LINE STORES TRADING STRONGLY ANTICIPATED PAYBACK OF FY24 FULL LINE OPENINGS Years HURDLE RATE 5 YEARS 2.1 EMBEDDING CHANGE ACROSS
Slide 7: Clothing & Home: accelerating online growth
CLOTHING & HOME: ACCELERATING ONLINE GROWTH H1 UK ONLINE SALES GROWTH DRIVEN BY NEW CUSTOMERS ONLINE PARTICIPATION INCREASED TO 33% % change vs 23/24 Q1 Q2 HY PARTNER BRAND SALES UP C.40% BULKY FURNITURE EXIT, ENABLING FOCUS ON CORE HOME 7
Slide 8: Ocado Retail: M&S product driving strong growth
OCADO RETAIL: M&S PRODUCT DRIVING STRONG GROWTH M&S PERFORMANCE DRIVING OCADO.COM SALES STRONG REVENUE GROWTH WITH LOSSES REDUCING Sales vs LY +14% +12% +5% M&S PRODUCTS OUTPERFORMING ON OCADO.COM MORE TO DO TO IMPROVE PROFITABILITY 8
Slide 9: International: reset underway
INTERNATIONAL: RESET UNDERWAY INTERNATIONAL REPORTED SALES WEAK PERFORMANCE IN OWNED AND FRANCHISE MARKET Sales vs LY 1 Total Sales Owned Sales Franchise Sales -4.9% -7.8% -10.3% -8.3% NEW LEADERSHIP TO RESTORE COMPETITIVE PROPOSITION India’s decline ACTIONS TO DEVELOP LONG TERM GROWTH OPPORTUNITIES
Slide 10: Outlook
RESHAPING FOR GROWTH OUTLOOK The business has traded well in HI, growing volume and value market share Cost inflation has continued to be elevated, running well ahead of price inflation and the consumer environment has been uncertain We expect this backdrop to persist in H2 In the first five weeks o
Slide 11: Jeremy Townsend, Chief Financial Officer
JEREMY TOWNSEND CHIEF FINANCIAL OFFICER
Slide 12: Half year financials at a glance
HALF YEAR FINANCIALS AT A GLANCE £6.5bn £391.9m £407.8m +5.8% +20.4% +17.2% £16.3m £22.4m £2.16bn -£11.4m +£342.3m better +£0.4bn better 12
Slide 13: Group profit
GROUP PROFIT £m H1 24/25 H1 23/24 £m Change % Change Sales1 Total Sales 6,524.3 6,164.4 359.9 5.8% Operating Profit1 Total Operating Profit 462.7 410.4 52.3 12.7% Adjusted PBT 407.8 348.1 59.7 17.2% Statutory PBT 391.9 325.6 66.3 20.4% 13
Slide 14: Free cash flow from operations
FREE CASH FLOW FROM OPERATIONS Cash flow H1 24/25 H1 23/24 £m Change Operating profit before adjusting items 462.7 410.4 52.3 Free cash flow from operations before capex 231.7 217.7 14.0 Free cash flow from operations 16.3 27.7 (11.4) Free cash flow after shareholder returns (24.8) 25.6 (50.4) 14
Slide 15: Capital expenditure in three key investment areas
CAPITAL EXPENDITURE IN THREE KEY INVESTMENT AREAS CAPEX PRE-DISPOSALS IN H1 24/25 £232m 50 Store Rotation 48 M&S Fosse Park 44 37 49 4 15 M&S Castle Donington
Slide 16: Structural cost reduction programme
STRUCTURAL COST REDUCTION PROGRAMME H1 24/25 DELIVERED TOTAL OF FY28 TARGET DELIVERED £500m £200m c. £60m c. £60m c. £60m c. 50% achieved in 18 months £180m 16
Slide 17: Disciplined capital allocation
DISCIPLINED CAPITAL ALLOCATION 1 2 3 4 5 17 M&S Dundee Gallagher
Slide 18: Appendices
APPENDICES M&S
Slide 19: Quarterly sales performance vs 23/24
QUARTERLY SALES PERFORMANCE VS 23/24 % Change vs 23/24 Q1 Q2 HY Total Sales1 4.2 9.7 6.9 Group Sales2 3.6 8.4 6.0 Memo 19
Slide 20: Food operating profit margin bridge
FOOD OPERATING PROFIT MARGIN BRIDGE Operating profit margin before % adjusting items Operating costs to sales % H1 23/24 4.1 H1 24/25 5.1 Total 0.9 20
Slide 21: Clothing & Home operating profit margin bridge
CLOTHING & HOME OPERATING PROFIT MARGIN BRIDGE Operating profit margin before % adjusting items Operating costs to sales % H1 23/24 12.4 H1 24/25 12.0 Total (0.8) 21
Slide 22: International performance
INTERNATIONAL PERFORMANCE TOTAL INTERNATIONAL £m H1 24/25 Change vs 23/24 TOTAL INTERNATIONAL EXCL. INDIA £m H1 24/25 Change vs 23/24 22 M&S Al Zahia Sharjah
Slide 23: Adjusting items
ADJUSTING ITEMS H1 24/25 £m Strategic programmes (20.9) Other adjusting items 5.0 M&S Leicester Total adjusting items (15.9) 23
Slide 24: Depreciation and amortisation
DEPRECIATION AND AMORTISATION H1 24/25 (£m) Food C&H Intl Other Group Adjusted operating profit 213.1 242.2 15.2 (7.8) 462.7 Depreciation and Amortisation 128.7 107.9 20.0 - 256.6 Underlying EBITDA 341.8 350.1 35.2 (7.8) 719.3 24 M&S Fosse Park
Slide 25: Lease liability breakdown
LEASE LIABILITY BREAKDOWN £149m £497m £851m £2,187m £690m 25 M&S Tamworth
Slide 26: Stores and selling space
STORES AND SELLING SPACE NUMBER OF STORES Memo: Selling space Sept 24 Mar 24 Openings Closures Change Closures of (m sq. ft) which are relocations Full Line Total 12.7 232 240 2 (10) (8) 1 UK Stores 16.5 1,053 1,058 13 (18) (5) 31 ROI Stores 0.6 33 26 7 0 7 - UK & ROI Stores 17.1 1,086 1,084 20 (18)
Marks and Spencer Group — Q2 2025 Earnings Presentation on 6ix