TIDMMKS

RNS Number : 8041O

Marks & Spencer Group PLC

03 June 2020

Marks and Spencer Group plc (the "Company")

Annual Report and Financial Statements 2020

In compliance with Listing Rule 9.6.1, the Company announces that the following documents have today been submitted to the UK Listing Authority, and will shortly be available for inspection via the National Storage Mechanism at https://data.fca.org.uk/#/nsm/nationalstoragemechanism:

   --           Annual Report and Financial Statements 2020; 

-- Notice of Annual General Meeting of the Company, which will be broadcast from Waterside House, 35 North Wharf Road, London W2 1NW at 11am on Friday 3 July 2020; and

   --           Proxy forms for the 2020 Annual General Meeting. 

In accordance with DTR 6.3.5(3) the Annual Report and Financial Statements 2020 and the Notice of Annual General Meeting are accessible on corporate.marksandspencer.com/investors .

A condensed set of Marks and Spencer Group plc financial statements and information on important events that have occurred during the year and their impact on the financial statements were included in the Company's preliminary results announcement on 20 May 2020. That information together with the information set out below which is extracted from the Annual Report and Financial Statements constitute the requirements of DTR 6.3.5 which is to be communicated via an RIS in unedited full text. This announcement is not a substitute for reading the full Annual Report and Financial Statements. Page and note references in the text below refer to page numbers in the Annual Report and Financial Statements 2020. To view the preliminary results announcement, visit the Company website: corporate.marksandspencer.com/investors .

For further information, please contact:

Group Secretariat: +44 (0)20 3934 3043

Additional Information

Principal risks and uncertainties

Below are details of our principal risks and uncertainties and the mitigating activities in place to address them. It is recognised that the Group is exposed to risks wider than those listed. However, we have disclosed those we believe are likely to have the greatest impact on our business at this moment in time and those that have been the subject of debate at recent Board or Audit Committee meetings.

 
 DESCRIPTION & CONTEXT                                            MITIGATING ACTIVITIES 
 TRADING PERFORMANCE RECOVERY 
  A failure of our Food and/or                                   *    Continued to strengthen capabilities of our senior 
  Clothing & Home business to effectively                             leadership teams in both Food and Clothing & Home 
  and rapidly respond to the pressures                                through targeted recruitment. 
  of an increasingly competitive 
  and changing retail environment, 
  including the impact of Covid-19,                              *    Established operating model consisting of a family of 
  would adversely impact customer                                     accountable businesses who share M&S brand values, 
  experience, operational efficiency                                  colleagues and support functions, technology and 
  and business performance.                                           customer data. 
  M&S competes with a diverse range 
  of retailers - in both Food and 
  Clothing & Home - in an increasingly                           *    Managing directors for each of these businesses who 
  challenged sector faced with                                        have full accountability for their performance 
  continued cost and pricing pressures,                               including for marketing, supply chain, finance and 
  shifts in consumer behaviours                                       technology. 
  and broader macroeconomic uncertainties. 
  Delivering the right product 
  ranges that appeal to our customers,                           *    Individual Business Boards to enable executive 
  clear and simple pricing architecture                               oversight and effective governance of each business. 
  and availability are critical 
  to the growth of our business 
  In addition, Covid-19 has had,                                 *    Continued delivery against business-specific 
  and continues to have, a significant                                transformation plans incorporating discipline around 
  negative impact on our trading                                      cost, prices, availability, value, ranges, broadening 
  performance in line with UK retail                                  customer appeal and promotions across both 
  more widely. Managing the growth                                    businesses. 
  in surplus stock resulting from 
  the lockdown is an area of business 
  focus.                                                         *    Development, ongoing update and monitoring of 
  Delays in implementing the targeted                                 business- specific planning for the business restore 
  transformational improvements,                                      as future stages of the lockdown are communicated. 
  or the business recovery plans                                      This includes development of a clear strategy to 
  in response to Covid-19, across                                     manage the wide-ranging implications of the lockdown 
  the business could negatively                                       period on all aspects of the Clothing & Home supply 
  impact business performance.                                        chain and inventory management. 
 
 
                                                                 *    Planned improvements to online trading by delivering 
                                                                      both the Ocado online launch in Food and our online 
                                                                      ambitions for Clothing & Home. 
                                                              -------------------------------------------------------------- 
 BUSINESS TRANSFORMATION 
 A failure to execute our business                               *    Adoption of a 'Never the Same Again' approach to all 
 transformation and cultural change                                   aspects of business operations and prioritisation of 
 initiatives with pace, consistency                                   the most critical improvement initiatives. 
 and cross-business buy-in will 
 impede our ability to improve 
 operational efficiency and competitiveness.                     *    Comprehensive review of all operational and capital 
 The business has continued to                                        expenditure to allocate spending to those activities 
 deliver the range of projects                                        aligned to the transformation agenda and stop others 
 underpinning the transformation,                                     in view of Covid-19 priorities and recovery. 
 including: 
  *    The reshaping, modernising and effective management 
       of a UK store estate that is fit for the future, with     *    Maintenance of programme governance principles for 
       the right stores in the right space, improved                  all ongoing projects. 
       integration between online and store sales and 
       shopping facilities expected by our target customer 
       groups.                                                   *    Periodic independent audit reviews of key programme 
                                                                      delivery and reporting to the Audit Committee. 
 
  *    Modernising our supply chain and logistics activities 
       to improve speed, operational effectiveness and           *    Maintaining momentum to deliver ongoing initiatives 
       availability and to reduce costs.                              to transform our supply chain capabilities in all 
                                                                      parts of the business. For example, in Food the 
                                                                      Vangarde supply chain programme has demonstrated 
  *    Delivering our Digital First ambitions to improve              improvements to food waste levels and availability. 
       customer experience, reduce costs and work smarter 
       across the business. 
                                                                 *    Continued focus on the store estate transformation 
                                                                      with new initiatives like redevelopment of existing 
 In response to Covid-19, we will                                     sites to make effective use of space, resetting 
 need to re-evaluate priorities                                       rental rates with landlords and delivery of new 
 and their delivery, including                                        format stores. 
 acceleration of initiatives to 
 respond to permanent changes 
 in customer behaviours or to 
 change our own working practices, 
 balancing delivery of the transformation 
 with strict cash management disciplines 
 and rapidly reacting to the consequences 
 of the pandemic. 
 A pause or delay to key components 
 of the business improvement programme 
 because of the virus response 
 or other reasons may delay delivery 
 of the transformation objectives. 
                                                              -------------------------------------------------------------- 
 LIQUIDITY AND FUNDING 
  Significantly reduced trading                                   *    Continued use of the existing committed facilities 
  over an extended and currently                                       available to the business, including the GBP1.1bn 
  undetermined timeframe, combined                                     revolving credit facility. 
  with an inability to effectively 
  manage expenditure against revised 
  targets, could impact the business's                            *    Immediate measures implemented to manage cash and 
  ability to operate within and                                        liquidity, including: 
  secure additional committed credit 
  facilities. 
  Availability of, and access to,                                 *    Freezing of discretionary spend 
  appropriate sources of funding 
  is required for core business 
  operations and the successful                                   *    Significant reduction in capital spending 
  and timely delivery of our transformation 
  plan. In addition, cash management 
  has additional complexity as                                    *    Dividend deferral 
  a consequence of the ongoing 
  trading restrictions during lockdown, 
  the associated reduction in cash                                *    Temporary furlough of colleagues 
  generation and planning for the 
  impact of furloughing, deferral 
  of tax payments and other emergency                             *    Enhanced controls over spending 
  measures. 
  Brexit adds a further dimension 
  to this risk because of the potential                           *    Confirmation of our eligibility under the UK 
  impact on currency movements,                                        government's CCFF scheme 
  corporate bond rates, changes 
  in credit regulations and the 
  extent of government support                                    *    Use of the business rates holiday, tax payment 
  of credit markets.                                                   deferral and other government support measures 
  An inability to maintain appropriate 
  short- and longer-term funding 
  to meet business needs (both                                    *    Formal agreement received from the syndicate of 
  operational and strategic), make                                     lending banks to relax or waive covenant conditions 
  payments on debt and to effectively                                  for our revolving credit facility. 
  manage associated risks, such 
  as significant fluctuations in 
  foreign currency or interest                                    *    Close monitoring and stress testing of projected cash 
  rate changes, may have an adverse                                    and debt capacity, financial covenants and other 
  impact on business viability                                         rating metrics. 
  and performance. 
 
                                                                  *    Regular dialogue with the market and rating agencies. 
 
 
                                                                  *    Review of counterparty credit risk and limits in line 
                                                                       with our risk appetite and treasury policy. 
                                                              -------------------------------------------------------------- 
 BREXIT 
 An inability to quickly identify                                *    A cross-business working party is in place to 
 and effectively respond to the                                       undertake scenario planning including financial and 
 challenges of a post-Brexit environment                              operational impact assessments and to consider and 
 could have a significant impact                                      drive readiness requirements. 
 on performance across our business. 
 The potential implications of 
 the UK's exit from the European                                 *    Each of our family of businesses has undertaken a 
 Union are significant and include:                                   risk assessment to prioritise and plan for the 
  *    Deterioration in customer sentiment.                           operational changes they will need. Teams have 
                                                                      continued to progress planning during the current 
                                                                      pandemic lockdown. 
  *    Operational complexity and cost due to restrictions 
       on the movement of goods and stricter border controls 
       (including the movement of goods between Great            *    Updates are provided to the Board and Audit Committee 
       Britain and Northern Ireland).                                 outlining risks and actions being undertaken. 
 
 
  *    Costs passed through from our suppliers.                  *    We are engaged with the government and industry 
                                                                      bodies to represent M&S's views, including the UK 
                                                                      Border Development Group with access to the 
  *    Continuity of supply and supplier viability.                   Department for Environment, Food & Rural Affairs 
                                                                      (Defra), HM Revenue & Customs (HMRC) and the Food 
                                                                      Standards Agency (FSA) to support operational 
  *    Import and export duties.                                      planning. 
 
 
  *    Volatility in currency and corporate bond rates. 
 
 
  *    Tightening of the labour market. 
 
 
  *    Additional regulatory responsibilities and costs. 
 
 
  *    Increased complexity and cost in our international 
       operations, including our franchise activities. 
 
 
 While an orderly exit following 
 the end of the transitional period 
 would allow business planning 
 to more effectively address the 
 consequences of change against 
 a defined timeframe, the level 
 of change required as part of 
 any deal is yet unclear. A no 
 deal outcome would have a more 
 immediate and negative impact. 
 The focus on the response to 
 Covid-19 and the possibility 
 that the government may not seek 
 an extension of the transitional 
 period may mean there is an increased 
 risk of a 'no deal' departure 
 and the consequential ability 
 to implement the necessary measures 
 on a timely basis. 
                                                              -------------------------------------------------------------- 
 FOOD ONLINE 
  A failure to effectively execute                               *    M&S nominated directors are part of the Ocado Retail 
  the launch of M&S products for                                      Board and participate in leadership forums. 
  Ocado Retail would significantly 
  impact the achievement of our 
  strategy to take our food online                               *    The establishment and continued operation of a 
  in a profitable, scalable and                                       dedicated M&S programme team, supported by senior 
  sustainable way.                                                    leadership, to oversee all aspects of project 
  The investment in Ocado Retail                                      delivery including commercial agreements, product 
  is part of our strategy for improving                               range, and establishment of ongoing operating 
  our online reach and capability.                                    processes. 
  To achieve this, we are committed 
  to providing M&S product ranges 
  and to have established new product                            *    Joint working group in place with Ocado Group Plc and 
  development capabilities for                                        Ocado Retail to establish the systems, processes and 
  Ocado Retail by the beginning                                       ways of working to coordinate sourcing, product 
  of September 2020.                                                  development, product ranging, customer data and 
  Activities include:                                                 marketing. 
   *    Finalisation of all commercial agreements with 
        suppliers. 
                                                                 *    Regular remote communication continues under lockdown 
                                                                      with the Board, senior management and the delivery 
   *    Delivery of a range of M&S products to allow a                teams. 
        seamless transition for Ocado customers on launch. 
 
 
   *    Establishing data and technology interfaces with 
        Ocado Retail. 
 
 
   *    Developing operating procedures and ways of working 
        between the two businesses. 
 
 
  An inability to establish effective 
  operating protocols in advance 
  of the launch date, whether related 
  to the impact of Covid-19 or 
  other factors, could delay delivery 
  of the expected benefits from 
  our investment in Ocado Retail. 
                                                              -------------------------------------------------------------- 
 FOOD SAFETY & INTEGRITY 
  Failure to prevent or effectively                              *    Oversight from Customer and Brand Protection 
  respond to a food safety incident,                                  Committee. 
  or to maintain the integrity 
  of our products, could impact 
  business performance, customer                                 *    Food Safety Policy and Standards are in place, with 
  confidence and our brand.                                           clear accountability set at all levels. 
  Food safety and integrity remain 
  vital for our business. We need 
  to manage the potential risks                                  *    Defined Terms of Trade, manufacturing standards, 
  to customer health and consumer                                     specifications for "from farm to fork" and standard 
  confidence that face all food                                       operating procedures (stores, support centre and 
  retailers.                                                          supply chain). 
  This includes considering how 
  external pressures on the food 
  industry and wider economic and                                *    New food initiatives assessed for food safety risks. 
  environmental changes could impact 
  the availability and integrity 
  of our food, the ability to operate                            *    Qualified and capable technical team, with continuing 
  all routine controls, our reputation                                professional development programme. 
  and shareholder value. 
  Many of these external pressures, 
  including the impact of Covid-19,                              *    Store, supplier and depot audit programmes, including 
  inflationary costs, labour quality                                  unannounced visits and raw material testing, adapted 
  and availability, increased regulatory                              to be managed remotely where site visits are not 
  scrutiny, animal disease, and                                       possible. 
  the unknown impact of Brexit, 
  are, to a large degree, outside 
  our control but are nevertheless                               *    Introduction of modified processes, including 
  monitored.                                                          enhanced monitoring of quality and customer 
                                                                      complaints, to mitigate risk during the Covid-19 
                                                                      lockdown and ongoing assessment of the need for 
                                                                      further change. 
 
 
                                                                 *    Quarterly review of our control framework. 
 
 
                                                                 *    Established processes for the development and legal 
                                                                      sign-off for product packaging. 
 
 
                                                                 *    Documented and tested crisis management plan. 
 
 
                                                                 *    Membership of the Food Industry Intelligence Network 
                                                                      at Board and Operating Committee level. 
                                                              -------------------------------------------------------------- 
 CORPORATE COMPLIANCE & RESPONSIBILITY 
  Failure to deliver against our                                 *    A Code of Conduct is in place and has recently been 
  legal, regulatory, social and                                       reviewed and updated. This is underpinned by policies 
  environmental commitments would                                     and procedures, including human rights, modern 
  undermine our reputation as a                                       slavery, global sourcing, data protection, 
  responsible retailer, may result                                    anti-bribery and corruption, health & safety, food 
  in legal exposure or regulatory                                     safety, national minimum wage, equal pay, cyber and 
  sanctions, and could negatively                                     data security. An annual self-assessment compliance 
  impact our ability to operate                                       process is also in place. 
  and/or remain relevant to our 
  customers. 
  The increasingly broad and stringent                           *    Immediate crisis response capability (via the Crisis 
  legal and regulatory framework                                      Management team) when required on a reactive basis - 
  for retailers creates pressure                                      more recently for Covid-19. 
  on both business performance 
  and market sentiment requiring 
  continual improvements in how                                  *    Mandatory induction briefings and annual training for 
  we operate as a business to maintain                                relevant colleagues on key regulations. 
  compliance. 
  More recently, the requirements 
  triggered by the Covid-19 o utbreak,                           *    Oversight from committees and steering groups such as 
  including in relation to safety                                     for fire, health and safety or food safety. 
  and social distancing, have in 
  a short time frame necessitated 
  immediate changes to operating                                 *    In-house regulatory legal team, including specialist 
  procedures in our distribution                                      solicitors, which conducts 'horizon scanning' on new 
  network, stores and support centres.                                and emerging regulatory and legislative changes. 
  In addition, the expectations 
  of our customers and other stakeholders 
  (including regulators) are increasingly                        *    Dedicated non-legal regulatory issue leaders and 
  demanding. The environmental                                        advisers to drive compliance against key risk areas 
  impact of food, packaging and                                       within the business. This includes, for example, 
  the sustainability of clothing                                      GSCOP (Groceries Supply Code of Practice) compliance 
  are all increasingly relevant.                                      in Food or ethical sourcing in Clothing & Home. 
  Speed in responding to evolving 
  expectations is vital to maintaining 
  a positive business perception.                                *    Proactive engagement with regulators, legislators, 
  Non-compliance may result in                                        trade bodies and policy makers. 
  fines, criminal prosecution for 
  M&S or colleagues, litigation, 
  additional investment to rectify                               *    Simplified Plan A operating model with a lean central 
  breaches, disruption or cessation                                   team responsible for setting the framework and 
  of business activity, as well                                       establishing sustainability priorities in each of our 
  as have an impact on our reputation                                 family of businesses. 
  and financial results. 
 
                                                                 *    Published, monitored and reported commitments in 
                                                                      relation to environmental and social issues in line 
                                                                      with regulatory requirements. 
 
 
                                                                 *    Established auditing and monitoring systems. 
 
 
                                                                 *    Customer contact centre insight and analysis of live 
                                                                      social media issues. 
                                                              -------------------------------------------------------------- 
 BUSINESS CONTINUITY & RESILIENCE 
  Failures or resilience issues                                  *    A dedicated Business Continuity team. 
  at key business locations could 
  result in major business interruption. 
  In particular, a major incident                                *    An established Group Crisis Management process - 
  at our Castle Donington e-commerce                                  which was invoked and has operated throughout the 
  distribution centre may have                                        Covid-19 outbreak. 
  a significant impact on our ability 
  to fulfil online orders. More 
  broadly, an inability to effectively                           *    Business continuity plans, incorporating remote 
  respond to global events, such                                      working requirements, are in place for key activities 
  as pandemic or supply chain disruption,                             across our operations, including offices, depots and 
  would significantly impact business                                 IT sites. These were invoked and, where needed, 
  performance.                                                        refined during lockdown. 
  As our sole online Clothing & 
  Home fulfilment centre, the effective 
  operation of our Castle Donington                              *    Group Incident Reporting & Management Procedures in 
  depot is vital. A major incident                                    place and used to escalate incidents on site. These 
  leading to a sustained period                                       also include critical third parties. 
  offline would impact sales and 
  potentially hinder the growth 
  of M&S.com.                                                    *    Store and sourcing office business continuity 
  In addition to Castle Donington,                                    assessments and visits, where appropriate. 
  the loss of other locations such 
  as the dedicated warehouses that 
  store beers, wines & spirits                                   *    Insurance cover to mitigate the impact of remediation 
  or frozen goods in the UK or                                        and business interruption. 
  support facilities, such as for 
  IT, could impact business operations. 
  While the response to Covid-19                                 *    Mechanisms to validate the existence of key supplier 
  has highlighted positives in                                        arrangements. 
  the business's ability to continue 
  operating in extreme circumstances, 
  it has also underlined the risk                                *    Ongoing contingency planning for Brexit. 
  associated with our global supply 
  chains. The reliance on China 
  and the interdependency of sourcing                            *    Enhanced capabilities at Castle Donington to manage 
  locations, in addition to the                                       technology failure. 
  concentration of supply from 
  individual countries such as 
  Bangladesh, highlight the potential                            *    Engagement with external stakeholders including 
  impact of globally disruptive                                       Retail Business Continuity Association and 
  events. Beyond supply chain,                                        government-led initiatives. 
  the implications on trading both 
  in the UK and International are 
  also a risk.                                                   *    Membership of the National Counter Terrorism 
                                                                      Information exchange. 
                                                              -------------------------------------------------------------- 
   INFORMATION SECURITY 
   Failure to adequately prevent                                 *    Dedicated Information Security function, comprising a 
   or respond to a data breach or                                     multi-disciplinary operation of information security 
   cyber-attack could adversely                                       specialists and support services and capabilities, 
   impact our reputation, result                                      with a 24/7 Security Operation Centre. 
   in significant fines, business 
   disruption, loss of stakeholder 
   confidence, and/or loss of information                        *    Continued focus on improving controls, policies, and 
   for our customers, employees                                       procedures in line with our environment and threat 
   or business.                                                       landscape, including heightened areas of risk due to 
   The increasing sophistication                                      Covid-19. 
   and frequency of cyber-attacks 
   in the retail industry, coupled 
   with the Data Protection Act                                  *    Maintained focus on scanning our threat environment. 
   (DPA), highlight the escalating 
   information security risk facing 
   all businesses. Our reliance                                  *    Established third-party assurance programme. 
   on a number of third parties 
   hosting critical services and 
   holding M&S and customer data                                 *    Focused security assurance, overall operational rigor 
   also means the information security                                and security hygiene around significant change 
   risk profile is changeable.                                        activities. 
   This risk also increases as we 
   develop our digital capabilities. 
   For example our dependency on                                 *    Network of Data Protection Compliance Managers in 
   the availability of, and access                                    priority business areas to oversee and address 
   to, insightful data across our                                     compliance. 
   business and/or with the increasing 
   shift online. 
   In addition, the risk of a data                               *    Mandatory information security and data protection 
   breach or misuse is impacted                                       training for colleagues, including responsibilities 
   by Covid-19 as there is the potential                              for the use of personal data. 
   for: 
    *    An increase in targeted phishing campaigns. 
                                                                 *    Corporate Security team with a focus on improving the 
                                                                      physical security environment. 
    *    New risks linked to working from home and the usage 
         of personal devices. 
 
 
    *    Increased reliance on third parties supporting 
         critical support services. 
                                                              -------------------------------------------------------------- 
 TECHNOLOGY CAPABILITY 
  A failure to improve our technology                            *    Delivery against our technology transformation 
  capabilities, reduce dependency                                     programme continues and is underpinned with a defined 
  on legacy systems and enhance                                       technology operating model, project governance 
  digital capability could limit                                      principles and agile methodology. 
  our ability to keep pace with 
  customer expectations and competitors, 
  enable business transformation                                 *    Cross-channel technology investment strategy in place 
  and grow profitably.                                                and aligned to the family of businesses, reviewed 
  The digital world continues to                                      quarterly to track benefits realisation of core 
  evolve at an unrelenting pace,                                      projects. 
  enabling competitive advantage, 
  influencing consumer behaviours 
  or expectations and increasing                                 *    Improvements to our IT infrastructure, increased 
  demands on IT infrastructure.                                       bandwidth and deployment of a unified communication 
  As demonstrated during the Covid-19                                 and collaboration tool, which underpinned the rapid 
  lockdown, our business resilience                                   move to remote working during the Covid-19 lockdown. 
  is increasingly dependent on 
  the reliability and effectiveness 
  of our technology infrastructure                               *    Continued investment in in-store technology and 
  and capability.                                                     digital capabilities to enhance both customer and 
  We are clear on our aim to be                                       colleague experience. 
  Digital First and continue to 
  plan and invest to support this 
  objective.                                                     *    Prioritisation of technology initiatives which is 
  While a focus on improving the                                      fully aligned with our operating and capital 
  existing IT infrastructure has                                      expenditure targets. 
  begun to deliver improvements 
  in capability, flexibility and 
  cost efficiency, further work                                  *    Continued collaboration with our principal technology 
  is required to enable the business                                  services partner, TCS, and other strategic 
  to move with pace to meet customer                                  partnerships, such as Microsoft, to drive our Digital 
  and colleague needs.                                                First ambition. 
  We also need to continue to develop 
  the skills and capabilities of 
  our colleagues in order to drive                               *    Expansion of the Decoded programme and investment in 
  beneficial and effective use                                        data analytics expertise to improve digital people 
  of the technological changes                                        skills. 
  that are made. 
 
                                                                 *    Investment in dedicated resource focused on 
                                                                      technology risk and assurance maturity and roll-out 
                                                                      of a structured IT control methodology. 
                                                              -------------------------------------------------------------- 
 THIRD-PARTY MANAGEMENT 
  An inability to successfully                                   *    Inclusion of third-party management risks as part of 
  manage and leverage our strategic                                   the Crisis Management team oversight of the Covid-19 
  third-party relationships, or                                       response. 
  a critical failure of a key supplier 
  or partner, could impact delivery 
  of our transformation initiatives,                             *    Clear procurement and supplier management policies in 
  our ability to operate effectively                                  place, including dedicated relationship partners for 
  and efficiently or, in some circumstances,                          strategic suppliers. 
  our brand and reputation. 
  Our business is dependent on 
  a range of significant third-party                             *    Defined service level agreements and key performance 
  relationships that span products                                    indicators for key contracts. 
  and services, franchise operations, 
  joint ventures, investments and 
  our banking and services partners.                             *    Dedicated procurement and commercial teams. 
  A critical failure of a key supplier 
  or partner could have a significant 
  impact on operational activities,                              *    Key supplier business contingency planning including 
  our transformation and/or customer                                  targeted reviews by our Business Continuity team. 
  experience - any of which could 
  negatively impact operating profit. 
  The scale and impact of Covid-19,                              *    Structured governance and business monitoring 
  both in the UK and internationally,                                 processes for investments, other partnering and 
  has heightened the possibility                                      franchise agreements. 
  of disruption or failure in the 
  important group of third-party 
  companies that form part of the                                *    Integrated business planning processes to support 
  extended operations of our business.                                franchise and joint venture reviews. 
 
 
                                                                 *    Regular review of franchise and joint venture markets 
                                                                      and new opportunities. 
 
 
                                                                 *    Third-party self-assessment processes to confirm 
                                                                      compliance with expected standards and policies. 
                                                              -------------------------------------------------------------- 
 TALENT, CULTURE & CAPABILITY 
  An inability to maintain efficient                             *    Investment in external hires to strengthen capability 
  processes and complete, accurate                                    and address identified skills gaps. 
  people metrics could impact our 
  ability to effectively target 
  our resources and people agenda                                *    Investment in internal talent through structured 
  to focus on attracting, engaging,                                   identification of critical and senior roles. 
  developing and motivating colleagues 
  and developing skills for the 
  future. This could also impact                                 *    Leadership development programmes to enhance 
  the pace of operational and cultural                                leadership capability and colleague engagement. 
  transformation across the business. 
  The need to engage, motivate 
  and connect with our colleagues                                *    Improved new starter experience to ensure effective 
  across a multi-generational,                                        onboarding, engagement and retention of new 
  diverse workforce and drive Digital                                 colleagues. 
  First skills and mindset is key 
  to delivering productivity and 
  supporting the transformation                                  *    A Business Involvement Group which is actively 
  of our business while driving                                       involved in colleague engagement and representation 
  customer loyalty through a differentiated                           throughout the business, including at Board meetings. 
  service proposition. 
  An inability to maintain the 
  necessary change management capabilities                       *    Development of a robust performance management system 
  could constrain our transformation                                  that will measure achievement against business 
  objectives. This, combined with                                     objectives and behaviours, with a clear link to 
  the cultural challenge of managing                                  reward. 
  talent, performance and succession 
  could result in increased resource 
  management and development costs.                              *    A total reward review, with benchmarking of all pay 
                                                                      and benefit components and transparency on fair pay, 
                                                                      including gender, ethnicity, disability and age. 
 
 
                                                                 *    Creation of a network of external allies to champion 
                                                                      our inclusion and diversity agenda. 
 
 
                                                                 *    Change management capability considered a specific 
                                                                      leadership skill requiring investment through 
                                                                      training, toolkits and methodology. 
 
 
                                                                 *    Planned investment in an HR information system. 
 
 
                                                                 *    Delivery of a digital-specific apprenticeship 
                                                                      programme driving digital literacy and capability 
                                                                      building. 
                                                              -------------------------------------------------------------- 
 BRAND, LOYALTY & CUSTOMER EXPERIENCE 
  An inability to evolve our brand                               *    Chief Digital & Data Officer in post to head Insights 
  appeal, customer experience and                                     and Loyalty programmes and the recently created 
  Sparks loyalty programme will                                       Digital & Data team focusing on loyalty, data science, 
  impact our success in retaining                                     digital product, customer growth and innovation. 
  and attracting customers and 
  expanding the business. 
  Consumer lifestyles and attitudes                              *    Brand, marketing and product teams aligned with the 
  continue to evolve at pace in                                       operating model to better address the specific needs 
  an increasingly diversified and                                     of our family of businesses. 
  competitive retail environment. 
  A failure to anticipate and keep 
  up with customer expectations                                  *    Improved online search functionality, enhanced 
  would impact future trading performance.                            end-to-end journey across M&S.com and stores for 
  In addition, the uncertainty                                        Click & Collect, and greater personalised digital 
  of the duration of Covid-19 and                                     products and marketing. 
  its longer-term impact on consumer 
  behaviour, shopping habits and 
  spending power, is unknown, making                             *    Investment in capability to measure customer 
  our ability to plan and rapidly                                     experience through introduction of an end-to-end and 
  react more important than ever.                                     multichannel net promoter score programme, supported 
  Evolving our Sparks programme                                       by third-party expertise. 
  in a way that resonates with 
  our customers and helps inform 
  business decisions remains a                                   *    Completion of a review of our Sparks loyalty 
  key objective. Combined with                                        programme to inform next steps. 
  coordinating improvements across 
  customer experience and personalisation 
  through meaningful measures of                                 *    Proactive monitoring of social media to observe and 
  customer experience, data-driven                                    respond to trends in customer experience. 
  marketing strategies and embedding 
  Digital First behaviours, these 
  are key enablers to being a customer-centric                   *    Initiatives launched in response to the Covid-19 
  business.                                                           lockdown to continue making product available safely 
                                                                      to customers, for example the range of M&S food boxes, 
                                                                      expansion of Mobile Pay Go payment facility, 
                                                                      introduction of M&S E-Gift Cards and shifting focus 
                                                                      to contactless home delivery. 
 
 
                                                                 *    Targeted use of celebrity engagement and high-impact 
                                                                      sponsorship of ITV's 'Britain's Got Talent'. 
                                                              -------------------------------------------------------------- 
 

The risks listed do not comprise all those associated with Marks & Spencer and are not presented in any order of priority. In addition to the risks disclosed, a wide range of lesser impacting risks and uncertainties that Marks & Spencer is exposed to, or could be exposed to in the near future, are actively monitored and managed. These less material risks are kept in view in case their likelihood or impact should show signs of increasing.

Further information on the financial risks we face and how they are managed is provided on pages 152 to 162.

Directors' Responsibility Statement

The 2020 Annual Report contains the following statements regarding responsibility for the financial statements in compliance with DTR 4.1.12. Responsibility is for the full Annual Report and Financial Statements 2020 and not the condensed statements required to be set out in the Annual Financial Report announcement.

The directors are responsible for the maintenance and integrity of the Company's website. Legislation in the UK governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions. Each of the directors, whose names and functions are listed on pages 46 and 47 of the Annual Report, confirm that, to the best of their knowledge:

- The Group financial statements, prepared in accordance with the applicable set of accounting standards, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company and the undertakings included in the consolidation taken as a whole.

- The Management Report includes a fair review of the development and performance of the business and the position of the Company and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face.

- The Annual Report, taken as a whole, is fair, balanced and understandable, and provides the necessary information for shareholders to assess the Group's performance, business model and strategy.

The Directors of Marks and Spencer Group plc are listed in the Group's 2020 Annual Report, and on the Group's website: corporate.marksandspencer.com/investors.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

END

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June 03, 2020 04:30 ET (08:30 GMT)

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