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Financial Performance and KPIs

Alternative performance measures, including adjusting measures, are defined on page 53 of the Annual Report. Pro forma FY 2019/20 results are included to better indicate the impact of adoption of IFRS 16 Leases in FY 2019/20. These pro forma results are estimations of the results for FY 2019/20 if the previous accounting standard for leases, IAS 17 Leases, had been applied.

* The Group also had borrowings at March 2021 of £297m (March 2020: £300m).

 

KEY PERFORMANCE INDICATORS

Key Performance Indicators (KPIs) help management measure progress against our six strategic pillars and Responsibility targets.

REVENUE GROWTH*

This measures the appeal of the Burberry brand to customers through all of our sales channels.

Financial ambition over time
High single-digit KPI top‑line growth.*

Performance
FY 2020/21 revenue declined by 10% at CER, as a result of the impact of COVID-19 on trading, especially during H1, when many of the Group’s stores were closed. Revenue growth improved in H2, returning to year-on-year growth in Q4.

COMPARABLE SALES GROWTH*

This measures the growth in productivity of existing stores. It is calculated as the annual percentage increase in sales from retail stores that have been open for more than 12 months. It is adjusted for permanent closures and refurbishments, and includes all digital revenue.

Financial ambition over time
High single-digit top‑line growth.*

Performance
FY 2020/21 comparable sales declined 9% in the year as a result of the impact of COVID-19 on trading.

ADJUSTED OPERATING PROFIT GROWTH*

This measure tracks our ongoing operating profitability and reflects the combination of revenue growth and cost management.

Financial ambition over time
Adjusted operating profit growth ahead of revenue growth.*

Performance
Adjusted operating profit in FY 2020/21 was down 8% at CER. This was as a result of the impact of COVID-19 on revenue, partially offset by an improvement in gross margin and a reduction in adjusted operating costs as a result of strong cost management and delivery of restructuring programmes.

ADJUSTED OPERATING PROFIT MARGIN

This measures how we drive operational leverage and disciplined cost control, with thoughtful investment for future growth building the long-term value of the brand.

Financial ambition over time
Meaningful adjusted operating margin expansion.*

Performance
Adjusted operating profit margin improved by 50bps with the impact of reduction in revenue more than offset by improved gross margin and savings in operating costs.

ADJUSTED DILUTED EPS GROWTH

Growth in adjusted diluted EPS reflects the increase in profitability of the business, improvement in the tax rate and share repurchase accretion.

Financial ambition over time
Adjusted EPS growth ahead of revenue growth.*

Performance
Adjusted diluted EPS was down 14% year on year. In addition to decline in operating profits, finance charge increased due to interest on borrowings and reduced interest rates on investments. The effective tax rate on adjusted profit increased from 22.3% to 25.4%, mainly due to geographical shift in profits to higher tax jurisdictions.

ADJUSTED GROUP ROIC

Adjusted Group ROIC measures the efficient use of capital on investments. It is calculated as the post-tax adjusted Group operating profit divided by average adjusted operating assets over the period.

Financial ambition over time
ROIC significantly ahead of Weighted Average Cost of Capital (WACC).

Performance
Adjusted Group ROIC decreased from 20% to 17% in FY 2020/21, mainly due to the decrease in adjusted operating profit and the increase in effective tax rate. Average operating assets increased by 3%.

* At CER

Details of alternative performance measures are shown on page 53 of the Annual Report. Pro forma is an estimation of the FY 2019/20 results when applying the previous accounting standard, IAS 17: Leases, consistent with FY 2018/19. The calculation of Adjusted Group ROIC is set out on page 289 of the Annual Report.

Adjusted profit before tax has been removed as a KPI, as adjusted operating profit is management’s profit KPI performance measure. Adjusted profit before tax is no longer used as a performance measure for remuneration arrangements for Executive Directors on any new awards. Following the adoption of IFRS 16 in FY 2019/20, the KPI for ROIC has been modified to reflect the impact of IFRS 16 and to use Group operating profit. This is better aligned with other KPIs. Remuneration targets for incentive arrangements also use measures based on operating profit. This KPI will be added to each year from FY 2019/20 until a five-year history is recorded.

 

Non-financial measures

We have developed non-financial measures to assess our performance against our ongoing employee objectives and 2022 responsibility targets, with progress regularly monitored by our Board. For further details on ESG activities and progress against 2022 targets, see pages 62 to 65 of the Annual Report. The Group has considered the new non-financial reporting requirements under sections 414CA and 414CB of the Companies Act 2006 and has included details in the Annual Report.

Adjusting items are those items which, in the opinion of the directors, should be excluded in order to provide a consistent and comparable view of the underlying performance of the Group’s on-going business. Generally this will include those items that are largely one-off and material in nature as well as income or expenses relating to acquisitions or disposals of businesses or other transactions of a similar nature, including the impact of changes in fair value of expected future payments or receipts relating to these transactions.

Note: all page references in this section refer to the Annual Report.

To end of year
Revenue by channel
2017
£m
2018
£m
2019
£m
Pro forma5
2020 £m
2020
£m
2021
£m
Retail
Wholesale
2,127.2
613.9
2,176.3
526.4
2,185.8
487.9
2,110.2
475.8
2,110.2
475.8
1,909.9
396.0
Retail/Wholesale
Licensing
2,741.1
24.9
2,702.7
30.1
2,673.7
46.5
2,586.0
47.1
2,586.0
47.1
2,305.9
38.0
Total revenue 2,766.0 2,732.8 2,720.2 2,633.1 2,633.1 2,343.9
Profit by channel £m £m £m £m £m £m
Retail/Wholesale1 437.0 440.7 395.7 360.8 389.8 361.4
Licensing 21.7 25.9 42.4 43.3 43.3 34.5
Adjusted operating profit1 458.7 466.6 438.1 404.1 433.1 395.9
Segmental analysis of adjusted profit1 2017
%
2018
%
2019
%
Pro forma5
2020%
2020
%
2021
%
Retail/Wholesale gross margin 69.6 69.1  67.9 66.8 66.8 69.5
Retail/Wholesale operating
expenses as a percentage of sales
53.7 52.8 53.1 52.8 51.7 53.8
Retail/Wholesale adjusted operating margin 15.9 16.3 14.8 14.0 15.1 15.7
Licensing operating margin 87.1 86.0 91.2 91.9 91.9 90.8
Total operating margin 16.6
17.1
 16.1
15.3
16.9 16.9
Summary profit analysis £m £m £m £m £m £m
Adjusted operating profit1   458.7 466.6 438.1 404.1 433.1 395.9
Net finance income/(expense)1 3.7 4.3 5.1 5.9 (19.0) (30.2)
Adjusted profit before taxation1 462.4 470.9 443.2 410.0 414.1 365.7
Adjusting items (67.6) (58.3) (2.6) (245.6) (245.6) 124.5
Profit before taxation 394.8 412.6 440.6 164.4 168.5 490.2
Taxation (107.1) (119.0) (101.5) (46.0) (46.9) (114.3)
Non-controlling interest (0.9) (0.1)  0.2 0.1 0.1 (0.2)
Attributable profit 286.8  293.5 339.3 118.6 121.7 375.7
Retail/Wholesale revenue by product division £m £m £m £m £m £m
Accessories 1,033.2 1,046.5 1,012.7 947.5 947.5 840.9
Women's 791.9
808.4 836.8 796.5 796.5 652.6
Men's 623.5 647.3 698.2 714.8 714.8 667.6
Children's/Other2 292.5 200.5 126.0 127.2 127.2 144.8
Retail/Wholesale revenue by destination £m £m £m £m £m £m
Asia Pacific 1,069.0 1,089.0 1,104.3 1,040.5 1,040.5 1,203.2
EMEIA3 991.2  975.2 957.4 960.6 960.6 628.0
Americas 680.9  638.5  612.0 584.9 584.9 474.7
Financial KPIs 2017
%
2018
%
2019
%
Pro forma5
2020%
2020
%
2021
%
Total revenue growth4 -2 -1 -1 -4 -4 -10
Adjusted operating profit growth1,4 -21 +5 +0 -8 -1 -8
Adjusted Group return on invested capital (ROIC)1,6 15.4 16.3 15.5
13.5 20.0 17.0
Comparable store sales growth +1 +3 +2 -3 -3 -9
Adjusted operating profit margin1
16.6 17.1 16.1 15.3 16.4 16.9
Adjusted diluted EPS growth1

+11

+6  +0 -5 -4 -14

1. Excludes the impact of adjusting items. Refer to note 2s for the Group’s policy on adjusting items.

2. Includes Beauty wholesale revenue up to the disposal of Beauty operations during the year ended 31 March 2018.

3. EMEIA comprises Europe, Middle East, India and Africa.

4. Growth rate is year-on-year underlying change, i.e. at constant exchange rates.

5. The pro forma income statement for 2020 is an estimation of the results for 2020 applying the previous accounting standard for leases, IAS 17 Leases. The actual results for 2020 are reported applying IFRS 16 Leases.

6. Prior to 2020, reported ROIC was measured on a retail/wholesale basis. From 2020 onwards, reported ROIC is measured on a Group basis and reflects the impact of the adoption of IFRS 16 on the measure.

To end of year
Earnings and dividends
2017
pence
per share
2018
pence
per share
2019
pence
per share
Pro forma
2020 pence per
share
2020
pence
per share
2021
pence
per share
Adjusted earnings per share - diluted1 77.4 82.1 82.1 77.9 78.7 67.3
Earnings per share - diluted 64.9  68.4 81.7 29.0 29.8 92.7
Diluted weighted average number of ordinary shares (millions) 442.2 429.4 415.1 409.0 409.0 405.1
Dividend per share (on a paid basis) 37.3 39.4 41.1 42.8 42.8 -
To end of year
Net Cash Flow
2017
£m
2018
£m
2019
£m
2020
£m
2021
£m
Adjusted operating profit
458.7 466.6 438.1 433.1 395.9
Adjusting items (64.4)
(56.3) (0.9) (244.4) 125.2
Operating profit 394.3 410.3 437.2 188.7 521.1
Depreciation and amortisation 151.5 130.5 115.8 330.8 276.7
Employee share scheme costs 13.1 17.1 15.7 2.8 12.1
Decrease/(increase) in inventories 8.4 37.2 (59.3) 27.4 20.9
Decrease/(increase) in receivables 19.7 68.1 (54.6) (9.8) (39.0)
Increase (decrease) in payables and provisions 43.6 27.6 54.9 (84.0) (7.2)
Other cash items - 0.5 2.5 0.2 (1.5)
Other non-cash items
58.0 11.2 3.7 168.8 (106.5)
Cash flow from operations 688.6 702.5 515.9 624.9 676.6
Net interest 3.7 5.6 6.3 (18.8) (27.2)
Tax paid (131.6) (118.4) (110.8) (150.3) (58.0)
Net cash flow from operations2 560.7 589.7 411.4 455.8 591.4
Capital expenditure (104.1) (106.0) (110.6) (148.8) (114.8)
Proceeds from disposal of non-current assets 8.5 - - 3.0 27.2
Initial direct costs of right-of-use assets - - - (5.6) (2.9)
Payment of lease principal and other lease outflows - - - (238.1) (152.2)
Free cash flow 465.1 483.7 300.8 66.3 348.7
Proceeds on disposal of Beauty operations and related licence - 149.8 0.6 - -
Acquisitions (68.8) (3.0) (25.6) (2.7) (4.3)
Dividends (164.5) (169.4) (171.1) (175.2) -
Purchase of shares through share buy-back (97.2) (355.0) (150.7) (150.7) -
Proceeds from borrowings - - - 300 595.1
Repayment of borrowings - - - - (599.8)
Other (11.7) (8.7) (10.5) 3.8 2.1
Exchange difference 26.0 (14.5) 1.7 8.5 (13.2)
Total movement in net cash         148.9 82.9 (54.8) 50.0 328.6
Net cash                  809.2 892.1 837.3 887.3 1,215.9

1. Excludes the impact of adjusting items. Refer to note 2s for the Group’s policy on adjusting items.

2. Following the adoption of IFRS 16 in the year ending 28 March 2020, Net cash flow from operations excludes cash outflows for lease principal and other lease payments. Free cash flow is presented including these lease payments and hence free cash flow is on a comparable basis to prior years.

As end of year
Balance Sheet
2017
£m
2018
£m
2019
£m
2020
£m
2021
£m
Intangible assets 170.1 180.1 221.0 247.0 237.0
Property, plant and equipment 399.6 313.6 306.9 294.9 280.4
Right-of-use assets - - - 834.0 818.1
Inventories 505.3  411.8 465.1 450.5 402.1
Trade and other receivables 352.0 275.5  321.2 305.8 321.9
Trade and other payables (561.0) (629.0)  (702.2) (549.8) (492.3)
Lease liabilities - - - (1,125.5) (1,019.6)
Taxation (including deferred taxation) 83.7 85.1 97.5 213.9 148.1
Net cash
809.2  892.1 837.3 887.3 1,215.9
Borrowings - - - (300.0) (297.1)
Other net assets (61.1) (103.8) (86.8) (39.3) (54.8)
Net assets 1,697.8  1,425.4  1460.0 1,218.8 1,559.7
Reconciliation of adjusted Group ROIC as reported under IFRS 16 2019
£m
2020
£m
2021
£m
Adjusted operating profit1
Adjusted profit effective tax rate1
  433.1
22.3%
395.9
25.4%
Adjusted net operating profit after tax1   336.5 295.3
Net assets 1,460.0 1,218.8 1,559.7
Adjustments to net assets on adoption of IFRS 16 and IFRIC 23 (61.9) - -
Deduct net cash of overdrafts
(837.3) (887.3) (1,215.9)
Add back borrowings - 300.0 297.1
Add back lease debt 1,045.0 1,125.5 1,019.6
Deduct tax assets (97.5) (213.9) (148.1)
Operating assets
Add back net liabilities related to adjusting items:
  Deferred consideration
  Restructuring liabilities/other
1,508.3
21.6
26.7
1,543.1
18.4
253.7
1,512.4
16.6
128.3
Adjusted operating assets
Average adjusted operating assets
1,556.6
-
1,815.2
1,685.9
1,657.3
1,736.3
Adjusted Group ROIC - 20% 17.0%

1. Excludes the impact of adjusting items. Refer to note 2s for the Group’s policy on adjusting items.

Total revenue by channel

Retail/wholesale revenue by destination

Period ending
£m
27 March
2021
28 March
2020
Retail  1,910 2,110 
Wholesale  396 476 
Licensing  38 47 

Revenue by region1,2,3

 

1. All references to revenue growth on page 2 of the Annual Report are presented at Constant Exchange Rates (CER). See page 49 of the Annual Report for reconciliation to total revenue.

2. Retail/wholesale revenue.

3. For more detail on performance see Group Financial Highlights on pages 48 to 54 of the Annual Report.

Revenue by product1

Retail/wholesale revenue by product division

Period ending
£m
27 March
2021
28 March
2020
Accessories 841 948
Women's 653 796
Men's 668 715
Children, Beauty & other 144 127

1. Retail/wholesale revenue.