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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 2021/22 revenue increased by 23% at CER.

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 2021/22 comparable sales increased by 18% in the year as a result of the improvement in the quality of our sales mix in the current year and the impact of COVID-19 on trading in the prior year.

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 2021/22 increased by 38% at CER. This was as a result of the growth in revenue, improvement in gross margin and the leverage from controlling adjusted operating cost growth 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 160bps as a result of the improved gross margin and the leverage from revenue growth in excess of operating cost growth.

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 increased by 40% year on year primarily due to the improvement in adjusted operating profit.

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 increased to 24.6% in FY 2021/22, mainly due to the increase in adjusted operating profit. Average operating assets decreased by 5%.

* At CER and adjusted for the 53rd week

Details of alternative performance measures are shown on page 43. 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 43.

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 52 to 56. The Group has considered the 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
2018
£m
2019
£m
Pro forma5
2020 £m
2020
£m
2021
£m
2022
£m
Retail
Wholesale
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
2,273
512
Retail/Wholesale
Licensing
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
2,785
41
Total revenue 2,732.8 2,720.2 2,633.1 2,633.1 2,343.9 2,826
Profit by channel £m £m £m £m £m £m
Retail/Wholesale1 440.7 395.7 360.8 389.8 361.4 486
Licensing 25.9 42.4 43.3 43.3 34.5 37
Adjusted operating profit1 466.6 438.1 404.1 433.1 395.9 523
Segmental analysis of adjusted profit1 2018
%
2019
%
Pro forma5
2020%
2020
%
2021
%
2022
%
Retail/Wholesale gross margin 69.1  67.9 66.8 66.8 69.5 70.2
Retail/Wholesale operating
expenses as a percentage of sales
52.8 53.1 52.8 51.7 53.8 52.7
Retail/Wholesale adjusted operating margin 16.3 14.8 14.0 15.1 15.7 17.5
Licensing operating margin 86.0 91.2 91.9 91.9 90.8 90.2
Total operating margin 17.1
 16.1
15.3
16.9 16.9 18.5
Summary profit analysis £m £m £m £m £m £m
Adjusted operating profit1   466.6 438.1 404.1 433.1 395.9
523
Net finance income/(expense)1 4.3 5.1 5.9 (19.0) (30.2) (31)
Adjusted profit before taxation1 470.9 443.2 410.0 414.1 365.7 492
Adjusting items (58.3) (2.6) (245.6) (245.6) 124.5 19
Profit before taxation 412.6 440.6 164.4 168.5 490.2 511
Taxation (119.0) (101.5) (46.0) (46.9) (114.3) (114)
Non-controlling interest (0.1)  0.2 0.1 0.1 (0.2) (1)
Attributable profit  293.5 339.3 118.6 121.7 375.7 396
Retail/Wholesale revenue by product division £m £m £m £m £m £m
Accessories 1,046.5 1,012.7 947.5 947.5 840.9 1,017
Women's 808.4 836.8 796.5 796.5 652.6 784
Men's 647.3 698.2 714.8 714.8 667.6 807
Children's/Other2 200.5 126.0 127.2 127.2 144.8 177
Retail/Wholesale revenue by destination £m £m £m £m £m £m
Asia Pacific 1,089.0 1,104.3 1,040.5 1,040.5 1,203.2 1,276
EMEIA3 975.2 957.4 960.6 960.6 628.0 813
Americas 638.5  612.0 584.9 584.9 474.7 696
Financial KPIs 2018
%
2019
%
Pro forma5
2020%
2020
%
2021
%
2022
£m
Total revenue growth4 -1 -1 -4 -4 -10 +23
Adjusted operating profit growth1,4 +5 +0 -8 -1 -8 +38
Adjusted Group return on invested capital (ROIC)1,6 16.3 15.5
13.5 20.0 17.0 24.6
Comparable store sales growth +3 +2 -3 -3 -9 +18
Adjusted operating profit margin1
17.1 16.1 15.3 16.4 16.9 19.0
Adjusted diluted EPS growth1 +6  +0 -5 -4 -14 +49

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
2018
pence
per share
2019
pence
per share
Pro forma
2020 pence per
share
2020
pence
per share
2021
pence
per share
2022
pence
per share
Adjusted earnings per share - diluted1 82.1 82.1 77.9 78.7 67.3 94.0
Earnings per share - diluted 68.4 81.7 29.0 29.8 92.7 97.7
Diluted weighted average number of ordinary shares (millions) 429.4 415.1 409.0 409.0 405.1 404.8
Dividend per share            

Interim

11.0 11.0 11.3 11.3 - 11.6

Final

30.3 31.5 - - 42.5 35.4
To end of year
Net Cash Flow
2018
£m
2019
£m
2020
£m
2021
£m
2022
£m
Adjusted operating profit
466.6 438.1 433.1 395.9 523
Adjusting items (56.3) (0.9) (244.4) 125.2 20
Operating profit 410.3 437.2 188.7 521.1 543
Depreciation and amortisation 130.5 115.8 330.8 276.7 313
Employee share scheme costs 17.1 15.7 2.8 12.1 16
Decrease/(increase) in inventories 37.2 (59.3) 27.4 20.9 (22)
Decrease/(increase) in receivables 68.1 (54.6) (9.8) (39.0) (5)
Increase (decrease) in payables and provisions 27.6 54.9 (84.0) (7.2) 81
Other cash items 0.5 2.5 0.2 (1.5) -
Other non-cash items
11.2 3.7 168.8 (106.5) (17)
Cash flow from operations 702.5 515.9 624.9 676.6 909
Net interest 5.6 6.3 (18.8) (27.2) (30)
Tax paid (118.4) (110.8) (150.3) (58.0) (180)
Net cash flow from operations2 589.7 411.4 455.8 591.4 699
Capital expenditure (106.0) (110.6) (148.8) (114.8) (161)
Proceeds from disposal of non-current assets - - 3.0 27.2 8
Initial direct costs of right-of-use assets - - (5.6) (2.9) (4)
Payment of lease principal and other lease outflows - - (238.1) (152.2) (202)
Free cash flow 483.7 300.8 66.3 348.7 340
Proceeds on disposal of Beauty operations and related licence 149.8 0.6 - - -
Acquisitions (3.0) (25.6) (2.7) (4.3) (10)
Dividends (169.4) (171.1) (175.2) - (219)
Purchase of shares through share buy-back (355.0) (150.7) (150.7) - (153)
Proceeds from borrowings - - 300 595.1 -
Repayment of borrowings - - - (599.8) -
Other (8.7) (10.5) 3.8 2.1 (4)
Exchange difference (14.5) 1.7 8.5 (13.2) 7
Total movement in net cash               148.9 82.9 (54.8) 50.0 328.6 (39)
Net cash                  892 837 887 1,216 1,777

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
2018
£m
2019
£m
2020
£m
2021
£m
2022
£m
Intangible assets 180.1 221.0 247.0 237.0 240
Property, plant and equipment 313.6 306.9 294.9 280.4 322
Right-of-use assets - - 834.0 818.1 880
Inventories 411.8 465.1 450.5 402.1 426
Trade and other receivables 275.5  321.2 305.8 321.9 328
Trade and other payables (629.0)  (702.2) (549.8) (492.3) (572)
Lease liabilities - - (1,125.5) (1,019.6) (1,058)
Taxation (including deferred taxation) 85.1 97.5 213.9 148.1 221
Net cash
892.1 837.3 887.3 1,215.9 1,177
Borrowings - - (300.0) (297.1) (298)
Other net assets (103.8) (86.8) (39.3) (54.8) (49)
Net assets  1,425.4  1460.0 1,218.8 1,559.7 1,617
Reconciliation of adjusted Group ROIC as reported under IFRS 16 2019
£m
2020
£m
2021
£m
2022
£m
Adjusted operating profit1
Adjusted profit effective tax rate1
  433.1
22.3%
395.9
25.4%
523
22.2%
Adjusted net operating profit after tax1   336.5 295.3 407
Net assets 1,460.0 1,218.8 1,559.7 1,617
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) (1,177)
Add back borrowings - 300.0 297.1 298
Add back lease debt 1,045.0 1,125.5 1,019.6 1,058
Deduct tax assets (97.5) (213.9) (148.1) (221)
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
1,575
8
63
Adjusted operating assets
Average adjusted operating assets
1,556.6
-
1,815.2
1,685.9
1,657.3
1,736.3
1,646
1,651
Adjusted Group ROIC - 20% 17.0% 24.6%

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
2 April
2022
27 March
2021
Retail  2,273 1,910
Wholesale  512 396
Licensing  41 38

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
2 April
2022
27 March
2021
Accessories 1,017 841
Women's 784 653
Men's 807 668
Children, Beauty & other 177 144

1. Retail/wholesale revenue.