Marks & Spencer Group (MKS) investor relations material

Customer Focus, Brand Trust, and Vision

• Engages 32 million customers annually, leveraging feedback through initiatives like the Customer Collective to inform strategy and product development.

• Maintains top ranking as the most trusted UK brand for over two years, aiming to be the UK's most trusted retailer by emphasizing trust, consistency, and own-label product control.

• Focuses on quality products, customer-centric service, and long-term supplier partnerships to deliver exceptional value and innovation.

Strategic Direction, Priorities, and Growth Ambitions

• Continues the strategy of 'protecting the magic, modernizing the rest,' with an ambition to double the food business and online fashion, home, and beauty sales.

• Targets omnichannel integration, disciplined capital allocation, and profitable sales growth, with a focus on store rotation and renewal—67 new stores approved through FY28.

• Achieved operating margin targets: >4% in Food and >10% in Fashion, Home & Beauty, with a long-term goal to double both businesses.

Financial Guidance, Capital Allocation, and Shareholder Value

• Increases structural cost reduction target to £600 million by FY28, with over £330 million already delivered and £336 million reduced since FY24.

• Allocates up to £550 million annually for growth and cost-out investments, with hurdle rates of 15% IRR for store rotation/cost-out and 20%+ for growth investments.

• Free cash flow from operations reached £443 million in FY25, with net funds increasing to £438 million and capital available for allocation exceeding £1 billion.

• Consistent free cash flow generation, reduced net debt, and a clear plan to increase shareholder returns through operational improvements and growth investments.