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Marks & Spencer Presentation

By Dennis Coppens, Julius Steinmetz and James Carrick

James Carrick

on 30 November 2014

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Transcript of Marks & Spencer Presentation

Presented by:
Dennis Coppens
Julius Steinmetz
James Carrick

People, Planet, Profit
About Marks & Spencer

People, Planet, Profit
sustainability analysis
Future development and recommendations
Introduction & Structure
Thank you for your time
CEO Marc Bolland
Youth work placement program
Offer work experience and training to the unemployed youth (18-25) of the UK
'Make Your Mark' - training and job placement program in collaboration with The Prince's Trust youth charity
Goal 2016: 5,000 young unemployed members receiving 650,000 hours of training annually
"Youth unemployment has become one of today's key social issues and we want to lead the charge for businesses to do more to tackle it head on"
Employee training
(over half a million people since 2010)
Green marketing training
(in development for 2016) - Sustainability and green claims training to marketing employees
Plan A capacity training
(starting now) - train employees in developing countries on how to reach Plan A's energy efficiency targets
Responsible leadership
(starting 2015) - top 100 business leaders
in the working environment
Goal: 30% female board, 35% women in senior roles

Two main elements:
M&S = Frontrunner
Engaging customers
in Plan A activities
GreenRedeem vouchers
Big Beach Clean-up
Plan A Pledges
Advice on reducing food waste and leading healthier lifestyles

Recycling/reusing old garments to earn money for Oxfam
This year four million garments have been handed it, raising 3.2 million pounds for Oxfam

April 2014: Shwopping started in Hong Kong

From an Environmental Perspective....
As of 2014, M&S now claim,

"For the first time we’ve achieved carbon neutrality for all M&S operated and joint venture retail operations across the world"
(M&S Annual report 2014)
That's a big claim! Green Washing?
Are they really carbon neutral?
UK and Ireland
2014 Annual Report:
Simply... yes!
Back in 2012, M&S became the first retailer to become carbon neutral.
Their initial £200m investment into Plan A has led to increased efficiency and the purchase of carbon offset measures.
Reached carbon neutrality in accordance to the CarbonNeutral certification program
Lets refer back to M&S' claim..
Is it too good to be true?
Their 2014 report clearly states,
" Our International stores have
reported carbon emissions resulting from heating, lighting and air-conditioning where these services are provided by the landlord as we have no ability to directly influence them at the site level."
Not all doom and gloom
Clear progress and determination to improve
M&S are still the frontrunners for environmental sustainability
In 2014, M&S became the first retailer to attain certification to all three Carbon Trust Standards.
Other actions to note
Became the first major retailer to gain certification to ISO50001 on energy management in 2013.
100% of M&S products that uses palm is covered by the Roundtable for Sustainable Palm Oil certification.
In April 2014, they opened the sustainable learning store in York, UK.
This involved features such as living walls which help filter pollution and provide habitat for wildlife, rain water harvesting and solar roof panels.
The use of waterless packaging for fresh flowers aims to save "half a million litres of water this year"
These examples show M&S commitment to Plan A and to their environmental sustainability
We believe that M&S have clearly shown their commitment to improve their impact on the environment
Although there is some Green Marketing from their bold claims, the actual figures do show impressive results for such a major retailer
We therefore are more than satisfied with M&S' environmental sustainability
Financial Highlights 2014
Total revenue increased (8.1 %)
Total operating profit decreased (-18.5 %)
Since 2004
Total revenue increased by 26.4 %
Total operating profit decreased by 19.8 %
However the Dividend per share increased by ≈ 50 %
Business Model
Some numbers
Profit margin: 2014: 6.7 %
2013: 7.5 %
Debt ratio: 2014 65.8 %
2013 66.9 %
M&S has built 69 new stores in the last year with a focus on a good market position in the future
M&S is able to invest in a "better" future

M&S is looking for new ways to generate profits from social and environmental projects (Plan A)

Even if the profits are decreasing, the revenues are increasing steadily. Part of the profits are reinvested in new projects to create new revenues and profits

The business model of M&S should be able to sustain in the future especially because M&S is creating new ways of generating profits
Major British multinational retailer headquartered in London.
Founded in 1884 by Michael Marks and Thomas Spencer.
Currently operating worldwide in 1,253 stores and has over 85,000 employees
Plan A
M&S launched this initiative in January 2007
Aims to dramatically increase the environmental sustainability of the business within 5 years with an expected cost of £200 million.
As this plan is such a vital part of M&S' business, our evaluation of M&S' sustainability is based on this.
Although we believe that M&S has performed outstandingly for such a large retailer, Green Marketing/Washing is still occurring.
We stress that M&S should maintain their progress on Plan A without the need to make big claims that are technically false.
We would like M&S to rebut the green washing claims regarding the irresponsible investments of their pension funds.
By doing this, we believe that their credibility will improve to a even higher level than what it's like currently.

From an Economic perspective we do fear that M&S has focused so hard on producing more environmentally friendly clothing that they may have lost touch slightly with the ever-changing consumer preferences.
Youth work placement program
Employee training
Engaging customers
Carbon neutral in UK & Ireland
but not worldwide
M&S are still frontrunners for environmental sustainability
looking for new ways to generate profits from social and environmental projects (Plan A)
Continuous growth
generating value for investors
Since being founded in 1884, M&S has the ability to survive even in highly competitive times
Why are the profits decreasing?
Costs for Plan A
Start-up costs for new stores
Increased markdown & promotional costs because of a highly competitive market
Paying debts
Full transcript