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Financial Performance & KPIs

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 for customers, through all our sales channels.

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

Performance
FY 2018/19 revenue declined 1%.Total retail sales was flat at CER. Wholesale growth excluding Beauty was up 7% at CER. This was offset by the loss of Beauty wholesale revenue following the beauty license with Coty. Excluding Beauty wholesale, revenue growth was 2%.

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 closures and refurbishments, and includes all digital revenue.

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

Performance
Comparable sales grew 2% in FY 2018/19, with low single-digit growth across all three regions.

ADJUSTED OPERATING PROFIT GROWTH*

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

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

Performance
Adjusted operating profit in FY 2018/19 was flat year on year with gross margin and operating margin stable at CER. Incremental cost savings of £41 million, offset inflationary cost pressures and strategic investments.

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
Meaningful operating margin expansion.*

Performance
Adjusted operating profit margin +10bps, at CER, -100bps rates at reported rates in FY 2018/19 due to the impact of exchange rates.

ADJUSTED PROFIT BEFORE TAX (PBT) GROWTH*

Adjusted PBT growth is a key profitability measure to assess the ongoing performance of the Company.

Financial ambition
Adjusted PBT growth ahead of revenue growth.*

Performance
Adjusted PBT in FY 2018/19 was flat year on year with gross margin and operating margin stable at CER. Incremental cost savings of £41 million, offset inflationary cost pressures and strategic investments.

ADJUSTED DILUTED EPS GROWTH

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

Financial ambition
Adjusted EPS growth ahead of revenue growth.*

Performance
Adjusted diluted EPS (EPSA) was flat year on year at 82.1p in FY 2018/19. Before the impact of foreign exchange, EPSA rose 7% due to an effective tax rate reduction of 200bps and the impact of share repurchases.

ADJUSTED RETAIL WHOLESALE ROIC

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

Financial ambition
ROIC significantly ahead of WACC.

Performance
Adjusted retail/wholesale ROIC 15.5%, -80 bps due to the reduction in reported profits as a result of exchange rates.

* At CER

Details of alternative performance measures are shown on page 71 in the Annual Report

Non-financial measures

We have developed non-financial measures to assess our performance against our ongoing people objectives and 2022 responsibility targets. Progress is regularly monitored by our Board through the Inspired People pillar of our strategy. For further details on our responsibility activities and progress against 2022 targets, see pages 42 to 55. The Group has considered the new non-financial reporting requirements under sections 414CA and 414CB of the Companies Act 2006 and has included relevant 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.

To end of year
Revenue by channel
2015
£m
2016
£m
2017
£m
2018
£m
2019
£m
Retail
Wholesale
1,807.4
648.1
1,837.7
634.6
2,127.2
613.9
2,176.3
526.4
2,185.8
487.9
Retail/Wholesale
Licensing
2,455.5
67.7
2,472.3
42.4
2,741.1
24.9
2,702.7
30.1
2,673.7
46.5
Total revenue 2,523.2 2,514.7  2,766.0 2,732.8 2,720.2
Profit by channel £m £m £m £m £m
Retail/Wholesale 399.2 380.9 437.0 440.7 395.7
Licensing 56.0 36.9 21.7 25.9 42.4
Adjusted operating profit1 455.2 417.8 458.7 466.6 438.1
Segmental analysis 2015
%
2016
%
2017
%
2018
%
2019
%
Retail/Wholesale gross margin 69.2 69.6 69.6 69.1  67.9
Retail/Wholesale adjusted operating
expenses as a percentage of sales1
52.9 54.2 53.7 52.8 53.1
Retail/Wholesale adjusted operating margin1 16.3 15.4 15.9 16.3 14.8
Licensing operating margin 82.7 87.0 87.1 86.0 91.2
Summary profit analysis £m £m £m £m £m
Adjusted operating profit1   455.2 417.8 458.7 466.6 438.1
Net finance (charge)/income1 0.6 2.8 3.7 4.3 5.1
Adjusted profit before taxation1 455.8 420.6 462.4 470.9 443.2
Adjusting items (11.2) (5.0) (67.6) (58.3) (2.6)
Profit before taxation 444.6 415.6 394.8 412.6 440.6
Taxation (103.5) (101.0) (107.1) (119.0) (101.5)
Non-controlling interest (4.8) (5.1) (0.9) (0.1)  0.2
Attributable profit 336.3 309.5 286.8  293.5 339.3
Retail/Wholesale revenue by product division £m £m £m £m £m
Accessories 892.5 901.7 1,033.2 1,046.5  1,012.7
Women's 743.0 729.0 791.9
808.4  836.8
Men's 557.5 548.4 623.5 647.3 698.2
Children's/Other 77.7 90.7 108.1 116.8  120.0
Beauty 184.8  202.5  184.4  83.7 6.0
Retail/Wholesale revenue by destination £m £m £m £m £m
Asia Pacific 938.1 932.9 1,069.0 1,089.0  1,104.3
EMEIA2 869.0 878.5 991.2  975.2 957.4
Americas 648.4  660.9  680.9  638.5  612.0
Financial KPIs 2015 2016 2017 2018 2019
Total revenue growth3 +11% -1% -2% -1% -1%
Adjusted operating profit growth1 +7%  -11%  -21%  +5% +0%
Adjusted PBT margin1,3 +7%  -10%  -21%  +5%  +0%
Adjusted retail/wholesale return on invested capital (ROIC)1 17.9% 14.7%  15.4% 

16.3%

15.5%
Comparable store sales growth +9% -1% +1% +3% +2%
Adjusted operating profit margin1
18.0%  16.6%  16.6%  17.1% 16.1%
Adjusted diluted EPS growth1 +2% -9%

+11%

+6%  +0%

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

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

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

To end of year
Earnings and dividends
2015
pence
per share
2016
pence
per share
2017
pence
per share
2018
pence
per share
2019
pence
per share
Adjusted earnings per share - diluted1 76.9 69.9 77.4 82.1 82.1
Earnings per share - diluted 75.1 69.4 64.9  68.4 81.7
Diluted weighted average number of ordinary shares (millions) 447.8 446.1 442.2 429.4 415.1
Dividend per share (on a paid basis) 32.9 35.7 37.3 39.4 41.1
To end of year
Net Cash Flow
2015
£m
2016
£m
2017
£m
2018
£m
2019
£m
Adjusted operating profit1
455.2  417.8  458.7 466.6 438.1
Restructuring spend - - (16.7)

(24.3) (20.2)
Depreciation and amortisation 123.7 132.2 144.0 124.0 115.8
Employee share scheme costs 21.0 (0.3) 13.1 17.1 15.7
Proceeds/(payment) on equity swap contracts (0.2) (1.6) - 0.5 2.5
(Increase)/decrease in inventories (15.1) (49.3) 8.4 37.2 (59.3)
(Increase)/decrease in receivables (43.8) (31.7) 19.7 68.1 (54.6)
Increase in payables and provisions1 19.7 9.1 27.6 3.6 66.6
Other non-cash items
7.6 26.8 33.8  9.7  11.3
Cash flow from operations 568.1  503.0  688.6 702.5 515.9
Net interest 1.2 3.1 3.7 5.6 6.3
Tax paid (114.4) (94.8) (131.6) (118.4) (110.8)
Net cash flow from operations 454.9  411.3  560.7 589.7 411.4
Capital expenditure (155.7) (138.0) (104.1) (106.0) (110.6)
Proceeds from disposal of non-current assets 1.3 0.5 8.5 - -
Free cash flow 300.5 273.8 465.1 483.7 300.8
Proceeds on disposal of Beauty operations and related licence - - - 149.8 0.6
Capital contributions from JV partners 0.4 - - - -
Acquisitions (3.4) - (68.8) (3.0) (25.6)
Dividends (145.3) (158.4) (164.5) (169.4) (171.1)
Purchase of shares through share buy-back - - (97.2) (355.0) (150.7)
Other (16.4) (8.7) (11.7) (8.7) (10.5)
Exchange difference 13.9 1.4 26.0 (14.5) 1.7
Total movement in net cash 149.7 108.1 148.9 82.9 (54.8)
Net cash       552.2
660.3
809.2 892.1 837.3

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

As end of year
Balance Sheet
2015
£m
2016
£m
2017
£m
2018
£m
2019
£m
Intangible assets 193.5 189.6 170.1 180.1 221.0
Property, plant and equipment 436.5 426.2 399.6 313.6 306.9
Inventories 436.6 486.7 505.3  411.8 465.1
Trade and other receivables 320.8 351.9 352.0 275.5  321.2
Trade and other payables (523.1) (501.9) (561.0) (629.0)  (702.2)
Taxation (including deferred taxation) 68.6 56.4 83.7 85.1 97.5
Net cash
552.2  660.3  809.2  892.1 837.3
Other net assets (33.6)  (48.3)  (61.1) (103.8) (86.8)
Net assets 1,451.5 1,620.9 1,697.8  1,425.4  1460.0
Reconciliation of adjusted Retail/Wholesale ROIC 2015
£m
2016
£m
2017
£m
2018
£m
2019
£m
Retail/Wholesale adjusted operating profit1
Adjusted effective tax rate1
399.2
23.4%
380.9
24.7%
437.0
25.8%
440.7
25.1% 
395.7
23.1%
Retail/Wholesale adjusted operating profit after tax1 305.8 286.7 324.3 330.1 304.3
Net assets excluding licensing segment assets 1,448.9 1,617.4 1,694.2 1,512.6 1,540.7
Net cash
(552.2) (660.3) (809.2) (892.1)  (837.3)
Assumed lease assets 2 922.0 
1,101.0  1,197.0 1,219.0  1,245.5
Exclude adjusting items:
  Licence intangible asset
  Put option liability
  Deferred consideration
  Restructuring liabilities

(41.1)
54.4
-
0.8

(26.1)
45.8
-
-

-
-
34.7
11.3

-
-
29.2
51.8

-
-
21.9
26.7
Adjusted operating assets
Average operating assets
1,832.8
1,705.9
2,077.8
1,955.3
2,128.0
2,102.2 
1,920.5
2,024.3
1,997.5
1,959.0
Adjusted Retail/Wholesale ROIC 17.9% 14.7% 15.4%
16.3%  15.5%

1.Excludes the impact of adjusting items. Refer to note 2s for the Group’s policy on adjusting items.
2.Assumed operating lease assets and assumed operating lease debt are calculated as a factor of five times minimum operating lease payments, excluding the impact of charges and subsequent utilisations relating to onerous lease provisions, and amounts classified as adjusting items. Net charges for onerous lease provisions within adjusted profit before tax during the 52 weeks to 30 March 2019 were £3.6 million (last year: £7.2 million), and £5.3 million of existing onerous lease provisions were utilised (last year: £4.8 million).

Revenue by channel1,2

Growth is presented underlying and is calculated at constant exchange rates

1. All references to revenue growth are presented at CER. All references to revenue and revenue growth are excluding Beauty wholesale.
2. Retail/wholesale revenue.
3. For more detail on performance see page 66 in our Annual Report.

Revenue by region1,2,3

Growth is presented underlying and is calculated at constant exchange rates

1. All references to revenue growth are presented at CER. All references to revenue and revenue growth are excluding Beauty wholesale.
2. Retail/wholesale revenue.
3. For more detail on performance see page 66 in our Annual Report.

Revenue by product1,2,3

Growth is presented underlying and is calculated at constant exchange rates

1. Retail/wholesale revenue
2. All references to revenue growth on this page are presented at constant exchange rates
3. All references to revenue and revenue growth on this page are excluding Beauty wholesale