B&M European Value Retail (BME) 2024年年度報告「LSE」.pdf

《B&M European Value Retail (BME) 2024年年度報告「LSE」.pdf》由會員分享，可在線閱讀，更多相關《B&M European Value Retail (BME) 2024年年度報告「LSE」.pdf（168頁珍藏版）》請在三個皮匠報告上搜索。

1、Big Brands Big Savings B&M European Value Retail S.A.Annual Report and Accounts 2024Welcome to our 2024 Annual Report and AccountsContentsStrategic ReportFinancial highlights IFCOur principles 1Company overview 2Long-term strategy 3Investment case 4Business model 6Chairmans statement 8Market overvie

2、w 10In depth Store growth 12Chief Executives review 14Financial review 18Key performance indicators 22Principal risks and uncertainties 23Corporate social responsibility 30Task Force on Climate-related Financial Disclosures(TCFD)40Stakeholders and Section 172 statement 54Corporate Governance Chairma

3、ns introduction 58The Board of Directors of B&M European Value Retail S.A.59Corporate Governance report 62Audit&Risk Committee report 69Nomination Committee report 74Directors remuneration report 76Directors report and business review 96Statement of Directors responsibilities 101Financial Statements

4、Independent Auditors Report 102Consolidated Statement of Comprehensive Income 105Consolidated Statement of Financial Position 106Consolidated Statement of Changes in Shareholders Equity 107Consolidated Statement of Cash Flows 108Notes to the Consolidated Financial Statements 109Company Profit and Lo

5、ss Account 152Company Balance Sheet 153Notes to the Annual Accounts 154Corporate Directory IBCGroup revenues5,484m10.1%5,48420244,9832023Adjusted EBITDA(pre-IFRS 16)1629m9.7%62920245732023Adjusted operating profit1614m10.9%61420245542023Post-tax free cash flow2382m-17.8%38220244642023This Annual Rep

6、ort and Accounts are for the 53 weeks financial reporting period to 30 March 2024(“FY24”).The comparative reporting period is for the 52 weeks ended 25 March 2023(“FY23”).Cash generated from operations862m-0.4%86220248662023Statutory operating profit608m13.6%60820245362023Diluted earnings per share3

7、6.5p5.2%36.5202434.72023Ordinary dividend per share14.7p0.7%14.7202414.62023Financial highlights1.Adjusted values are considered to be appropriate to exclude unusual,non-trading and/or non-recurring impacts on performance which therefore provides the user of the accounts with additional metrics to c

8、ompare periods of account.See notes 2,3 and 4 of the financial statements for further details.2.Post-tax free cash flow is an Alternative Performance Measure.Please see note 3 of the financial statements for more details and a reconciliation to the Consolidated statement of cash flows.1B&M European

9、Value Retail S.A.Annual Report and Accounts 2024Strategic ReportCorporate GovernanceFinancial StatementsOur principlesOur goal:To be Europes leading variety discount retailer.How we do it:What we do:Provide excellent best-selling products at the lowest prices,in brilliant shops.ExcellenceWere obsess

10、ed with retail excellence and develop our colleagues to be the best.TeamworkWe help each other,with respect and high personal integrity.SpeedWe operate at speed,at low cost with simplicity.Hard WorkWe work hard for our customers every day and celebrate it.2B&M European Value Retail S.A.Annual Report

11、 and Accounts 2024Company overviewThe UKs leading variety discount retailer,providing excellent,best-selling products at low prices in brilliant shops everydayOur fasciasUKNumber of employees33,450Number of stores741FranceNumber of employees21,083Number of stores124Number of employees5,850Number of

12、stores335FY24 performance by fasciaRevenue5,484m B&M UK 4,410m B&M France 514m Heron Foods 560mAdjusted EBITDA3(pre-IFRS 16)(m)629m1 B&M UK 556m B&M France 47m Heron Foods 36mAdjusted operating profit3(m)614m1 B&M UK 548m B&M France 49m Heron Foods 27m1.Includes the corporate segment.For further det

13、ail,see note 3 of the financial statements and the reconciliation.2.Includes colleagues at the French support centre,and those working in stores operated directly by the Group.Those colleagues working in stores operated under the mandated manager model are employed directly by the manager of each st

14、ore,and are therefore not employees of the Group and so excluded from the number above.3.Adjusted values are considered to be appropriate to exclude unusual,non-trading and/or non-recurring impacts on performance which therefore provides the user of the accounts with additional metrics to compare pe

15、riods of accounts.See notes 2,3 and 4 of the financial statements for further details.3B&M European Value Retail S.A.Annual Report and Accounts 2024Strategic ReportCorporate GovernanceFinancial StatementsLong-term strategyOur four channels of growth will deliver long-term,profitable,cash-generating

16、growth1Existing B&M UK stores a core driver of growth3France will provide growth for many years to come2New B&M UK stores an acceleration in growth and a higher target4Heron Foods offers growthProgress in FY24B&M is the leading variety goods value retailer in the UK with 741 stores.Our existing stor

17、es offer considerable scope for improving sales densities.Like-for-like1(“LFL”)sales growth tends to be highly profitable growth and will be achieved through a relentless focus on product,price and an excellence in retail standards.Store standards have improved considerably over the last two years.O

18、ver 250 unannounced store visits per week have been conducted by key management which has driven LFL1 sales against a tough economic background which has seen several retailers fail and many others issue profit warnings.It is worth remembering that each 1%growth in LFL sales is equivalent to the sal

19、es generated from seven average store openings.The focus is relentless and although we are stepping up our new store openings,we will never lose this focus on our core estate.We have updated our expectations for B&M stores in the UK to not less than 1,200 from 950.Factors driving this include increa

20、sed sales performance,the success of our southern openings and the experience of opening stores in closer proximity than previously thought.Our offer is proving to be more appealing than historically,meaning we get greater penetration into local catchment areas than previously experienced.At 1,200 s

21、tores,the estate would be over 60%bigger than it is today,but with new stores being typically larger,with a higher proportion of garden centres and with higher total sales,the impact on our sales,profit and cash generation is likely to be even greater.In addition,we place great emphasis on refreshin

22、g and updating our existing store estate.This can mean relocating an older,legacy store to a new larger format store often with a garden centre attached.This results in square footage growth surpassing the increase in the number of stores.France has continued the transformative journey that it has e

23、mbarked on since acquisition.All stores trade under the B&M banner,the proportion of Fast-Moving Consumer Goods(“FMCG”)sales is increasing as we expand the range,leading to higher sales densities,and we continue to gently expand our new store opening programme.In General Merchandise,the product mix

24、has evolved with a greater focus on home and the phasing out of clothing.This product realignment along with the B&M branding of the stores has been well received by the French consumers.Over the long term,we expect France to have a similar adjusted EBITDA2(pre-IFRS 16)margin and store count to the

25、UK.France has a similar population to the UK and the French discount retail market is less competitive and so we see France continuing to build sustainable profit for many years to come.Heron Foods(“Heron”)continues to deliver value and convenience to customers looking to manage their budgets.The ma

26、jority of Heron stores are classed as convenience stores,being below 3,000 sq.ft.,and so consequently can trade for over 6 hours on a Sunday.Over recent years,Heron Foods has improved its ranges to increase appeal to existing and new customers.Through more intense merchandising,some freezers have be

27、en removed from stores,freeing up space for expanded,fresh,chilled and ambient ranges.Heron remains a long-term growth opportunity.With 335 stores currently and an opening programme of c.20 stores per annum,the long-term opportunity remains very considerable.1.One-year LFL revenues relate to the B&M

28、 UK estate only(excluding wholesale revenues)and are based on either 53 week versus 53 week or 14 week versus 14 week comparison periods.They include each stores revenue for that part of the current period that falls at least 14 months after it opened compared with its revenue for the corresponding

29、part of FY23.2.Adjusted values are considered to be appropriate to exclude unusual,non-trading and/or non-recurring impacts on performance which therefore provides the user of the accounts with additional metrics to compare periods of accounts.See notes 2,3 and 4 of the financial statements for furt

30、her details.Performance in FY24B&M UK LFL1 revenue growth3.7%B&M UK gross new store openings 47B&M France total revenue growth19.2%Heron Foods total revenue growth15.3%4B&M European Value Retail S.A.Annual Report and Accounts 2024Investment caseDelivering long-term profitable growthB&M is set for ma

31、ny years of compounding earnings growth and cash returns for shareholders.There are four channels of growth:1Existing B&M UK stores:Like-for-like1 growth is highly profitable growthOur existing stores offer considerable scope for improving sales densities.Each 1%LFL1 sales growth is equivalent to op

32、ening over seven new stores,but without any capex or increase in fixed costs.LFL1 growth therefore tends to be highly profitable growth,which helps fund low prices(to drive further LFL1 sales),creates new jobs and generates good returns to shareholders.There is nothing operationally to stop us growi

33、ng our sales densities substantially over the long-term.This will be achieved by taking a bigger share of available expenditure in existing catchment areas as our relentless focus on price,value and retail standards bears results.B&M is the UKs leading discount variety value retailer,with 741 B&M st

34、ores in the UK,124 B&M stores in France and 335 Heron Foods discount convenience stores in the UK.Each format has many years of growth ahead as the Group continues its profitable growth plans with a relentless focus on price,relevant ranges and excellence in store operational standards.We are delive

35、ring positive gains to all our stakeholders.B&M is committed to delivering long-term profitable growth through its four channelsB&M has many opportunities and many years of growth ahead as it broadens its appeal and expands its store numbers in the UK and France.In expanding its store numbers and in

36、creasing sales densities in existing stores,B&M expect to continue to deliver long-term profitable growth,generate cash and return excess cash to shareholders.B&M remains a rollout story,thereby confident to deliver compounding earnings growth and cash returns for shareholders.1.One-year LFL revenue

37、s relate to the B&M UK estate only(excluding wholesale revenues)and are based on either 53 week versus 53 week or 14 week versus 14 week comparison periods.They include each stores revenue for that part of the current period that falls at least 14 months after it opened compared with its revenue for

38、 the corresponding part of FY23.5B&M European Value Retail S.A.Annual Report and Accounts 2024Strategic ReportCorporate GovernanceFinancial Statements2New B&M UK stores:An increased store target to not less than 1,200 B&M UK storesWe now expect to reach not less 1,200 B&M stores in the UK,which repr

39、esents at least a 60%increase in store numbers compared to the year end.At our current pace of openings this represents over ten years of growth in store numbers.With new stores tending to be bigger than the existing average and with a higher proportion expected to have garden centres,the underlying

40、 growth in sales is expected to be greater than the 60%increase in store numbers.New stores bring increases in volume and our plans to open 45 stores per annum over a three-year period will add 20%more volume to the Group.This brings benefits to buying,productivity gains and cash-generation.Payback

41、on new stores tends to be less than a year,so the more stores we open the better the cash-generation.We will always open in a controlled,disciplined manner,and we will not put a strain on the operational and support functions of the business.The quality of our openings is paramount rather than openi

42、ng a larger number of stores in any given year.In conjunction with our new store openings,we will continue to refresh and update our existing store estate.Where the opportunity arises,we will replace older,legacy stores that are at the end of their lease with newer,larger stores,often with a small g

43、arden centre attached.This will result in square footage growth(a key driver of sales)outpacing growth in store numbers.3France will provide growth for many years to comeIn terms of size and wealth,France has a similar population to the UK,where we target to have over 1,200 stores.The UK estate sets

44、 a relevant benchmark for the potential scale of the French estate over the long-term.As we gently increase our store opening programme,France will provide many years of profitable growth.We have transformed France in recent years since acquisition and all stores operate under the B&M fascia.We cont

45、inue to grow our FMCG ranges in France which helps drive sales densities and provides a“halo effect”for our General Merchandise offer.Pricing is highly competitive and profitability is good,with a strong underlying profit margin.We will continue to evolve the offer and expect sales densities and our

46、 EBITDA margin to improve over the long-term.4Heron offers growth and offers other benefits to the core businessHeron is our discount convenience store operation,based primarily in the North of England and the Midlands in neighbourhood locations.Average size of our stores stands at 3,000 sq.ft.which

47、 means the majority are classified as convenience stores and can trade for more than six hours on a Sunday.Over recent years,the offer has been refined to include more ambient and fresh products and this has resulted in a step change in total sales and sales by broad category.Space for the enhanced

48、ranges was created by merchandising the traditional frozen food offer more intensely,which allowed us to remove freezers,reduce operating costs and reduce the capital cost of new stores.By merchandising more intensely,we were able to maintain frozen sales volumes while adding substantial sales in ne

49、w areas.Heron offers considerable long-term potential through the store roll out and we are currently opening around 20 stores per annum.The market leader in convenience stores in the UK has over 2,000 outlets.There is no reason why Heron with its discount offer cannot rollout across the UK and subs

50、tantially increase its numbers over the long-term in the UK.6B&M European Value Retail S.A.Annual Report and Accounts 2024Business modelA disruptive,agile and low-cost business model capable of responding to changing conditionsOur business model is to directly source a targeted limited range of best

51、-selling FMCG and General Merchandise products at the best prices we can.We pride ourselves on being an Everyday Low Price(“EDLP”)retailer with a relentless focus on maintaining excellence in operational standards and an Everyday Low Cost(“EDLC”)operating model.Targeted grocery offeringSKU disciplin

52、eCompelling non-grocery offeringDisruptive sourcing processCost efficiencyFormat flexibilitySeasonal flexNo online channelStakeholder outputsBusiness strengthsCorporate social responsibility See CSR report on page 30 for more informationRisk management See Principal risks on page 23 for more informa

53、tionFinancial performance See Financial review on page 18 for more informationOur business model is underpinned by:Differentiated operating model7B&M European Value Retail S.A.Annual Report and Accounts 2024Strategic ReportCorporate GovernanceFinancial StatementsBusiness strengthsStakeholder outputs

54、Underpinned by our ESG strategyScale&convenienceOur network of over 1,200 stores across the UK and France are found in convenient locations in modern retail parks,popular town centres and on high streets.They are located in places close to where people live and work,making them easily accessible for

55、 customers.Well-invested infrastructureWe have a modern and scalable infrastructure to support the operations and growth of the business.B&M has five distribution centres in total including our largest in Bedford,in the South of England,which opened in FY20 providing a further one million sq.ft.of w

56、arehouse capacity to complement the existing B&M UK distribution centres.In addition,Heron Foods and B&M France also have their own dedicated distribution centres,meaning the Group is well positioned to continue our store rollout programme across all fascias and territories.Strong brand reputationTh

57、e B&M and Heron Foods names are established brands in the UK,having a strong reputation for delivering consistently great value on the products people regularly buy for their homes and families.B&M has a strong social media presence with over 1.5 million Instagram followers that allows the business

58、to reach a vast amount of people with targeted price and product messages affirming the B&M brand as one of the leading UK retailers in the market.In France,there is growing awareness of the B&M brand and the customer response to recent product changes has been very positive.With discount shopping c

59、ontinuing to become more socially accepted,there are opportunities to attract new customers whilst retaining the loyalty of existing customers in the years ahead.Skilled colleaguesDeveloping products and ranges to provide great value whilst being fresh and on-trend takes skill,experience and discipl

60、ine.We have colleagues with many years of experience in their respective product markets,many of whom have worked previously as buyers and merchandisers with category specialist competitors.By working collaboratively across different teams and with an entrepreneurial flair in keeping with the B&M cu

61、lture,we are able to provide customers with the products they want at value prices all year round.Strong supplier relationshipsMaintaining our competitive value-led price model is also about developing strong long-term supplier relationships,who we regard very much as partners.Many of our suppliers

62、have grown alongside us over several years and they value our simple,transparent pricing and efficient way of working.With our focus on only stocking the best-selling products and constant newness an important feature of the proposition,this creates opportunities to welcome new suppliers in to our b

63、usiness.Governance&risk managementOur corporate governance and risk management approach is geared toward ensuring we have effective,robust structures and processes in place.Our Non-Executive Directors have many years of experience in retail and consumer product businesses.They provide constructive c

64、hallenge to our management team to help ensure we operate our businesses and manage risk appropriately and in the interests of all stakeholders.Value to customersOur purpose is about delivering great value to customers so they keep returning to our stores time and time again.Helping customers to spe

65、nd less on the things they buy regularly for their homes and families all year round is what our business model is designed to constantly deliver.Given the current cost-of-living crisis showing no signs of easing and the ongoing macroeconomic uncertainty,value for money is likely to become increasin

66、gly important for many consumers in the years ahead,making the B&M proposition highly relevant.Colleague progressionOur colleagues are crucial to the ongoing success of the business,be that in our central support teams,those working in our logistics network or store colleagues providing great custom

67、er service every day.In keeping with our values,we take pride in being an innovative and exciting place for colleagues to work,grow and develop to their full potential.Our continued growth creates new job opportunities in the communities where we trade and there are always progression opportunities

68、for colleagues throughout the business to build long-term,successful careers.Suppliers as partnersThe continued growth of B&M also benefits our suppliers.We have long-standing trading relationships with a number of the leading household brands across food and FMCG.We have several exclusive brands an

69、d other branded General Merchandise product ranges.We are proud to partner with these brand names for the mutual success of our respective businesses.We are always interested in adding new brands to our ranges and our continued growth gives potential for suppliers to grow alongside us,further streng

70、thening these relationships.Investment in communitiesOur store opening programmes target areas where we are under-represented or not represented at all,using our flexible store formats to suit the relevant locality.Each time we open a new store,we create new jobs in the local community whilst at the

71、 same time providing convenient access to our value-for-money offer.Returns for investorsOur characteristics of low capital-intensity and high-returning cash-generative growth is a relatively rare and powerful combination in bricks and mortar retailing.These characteristics contribute to the sustain

72、ability of our business model,which enhances our ability to provide continued growth and attractive returns to investors.8B&M European Value Retail S.A.Annual Report and Accounts 2024Chairmans statementPeter BamfordChairman“Relentless focus on delivering a simple and clear strategy.”While the Annual

73、 Reports of many companies will feature themes of major change programmes,B&M is quite different.Its success is built on a consistent and relentless focus on delivering a simple and clear strategy.When I became Chairman of B&M in March 2018 it was a retail business with a distinctive entrepreneurial

74、 culture and a simple commercial model focused on delivering great products and everyday low prices to its customers,highly profitable growth and strong returns to its shareholders,and opportunities for growth and development for its people.Earlier this year,I took the difficult decision to retire f

75、rom this role.In the last six years,while Group adjusted EBITDA1(pre-IFRS 16)has more than doubled and store numbers have significantly increased,B&M is pretty much the same robust business as it was in 2018 but with even better operational execution and a broader and deeper leadership team.Through

76、all the uncertainties and challenges of COVID,the economic environment,global political events and competitor activity,B&Ms management team,led by two exceptionally talented CEOs,have relentlessly delivered an excellent customer proposition and disruptive commercial model.My contribution to this has

77、 been to lead the Board in a way that has allowed management to retain the simplicity of the model and a sharp focus on the basics of the business while ensuring that the governance requirements are met and all of the checks and balances are in place.Succession for all of the key Board roles includi

78、ng CEO and CFO has been completed without any adverse impact on the Companys growth and financial trajectory.Over the last year,Alex Russo and his team have continued to improve and refine all aspects of B&M operations,ensuring that our product range responds to changing customer needs and that we c

79、ontinue to deliver everyday low prices through buying well and keeping our business systems and processes simple and efficient.Group adjusted EBITDA1(pre-IFRS 16)of 629m this year more than matched the exceptional COVID peak of FY21(626m)and has expanded dramatically since FY18(279m).1.Adjusted valu

80、es are appropriate to exclude unusual,non-trading and/or non-recurring impacts on performance which therefore provides the user of the accounts with additional metrics to compare periods of accounts.See notes 2,3 and 4 of the financial statements for further details.9B&M European Value Retail S.A.An

81、nual Report and Accounts 2024Strategic ReportCorporate GovernanceFinancial StatementsStore openings in B&M UK,helped by the addition of up to 51 new Wilko stores,have accelerated and returned to levels seen earlier in the Companys development.The store pipeline for the next two years remains strong

82、and the long-term potential is now over 1,200 stores.Importantly,the new stores are performing very well.In B&M France,the foundations for long-term growth continue to be established.Also,on a strategic front,good progress continues to be made in executing our ESG programme.As I noted above,Alex has

83、 continued to enhance the management team with both external hires and the promotion and development of internal talent.The Company is well positioned for future growth.More broadly,we know from our staff engagement surveys that the B&M team is exceptionally motivated and proud of our Company.The Bo

84、ard has also continued to evolve and develop.During the last year Tiffany Hall succeeded Ron McMillan as Senior Independent Director and Oliver Tant succeeded him as Chair of the Audit&Risk Committee.Hounada Lasry joined as a Non-Executive Director on 22 September 2023 and Nadia Shouraboura joined a

85、s a Non-Executive Director in May,subject to shareholder approval.These appointments considerably increase the diversity of the Board and broaden its experience base.Ron will retire from the Board at this years Annual General Meeting(“AGM”)after ten years as Director,having served continuously since

86、 the IPO in 2014.He has seen B&M through its development as a PLC and has played a key role in ensuring good governance while preserving the Companys unique entrepreneurial culture.I would like to thank him for his contribution and support.The Board has continued to function well.We carried out an e

87、xternally facilitated review in October which confirmed this.The key area for improvement identified was better communications between the CEO and the Non-Executive Directors.This has been addressed.I am delighted that Tiffany Hall is to be the next Chair of B&M.I have enjoyed working with her over

88、the last five years and she has demonstrated a clear understanding of B&M and the skills required to lead the Board in the future.I wish Tiffany and all at B&M every success in the future.On behalf of the Board,I would like to thank everyone who works at B&M for their hard work and commitment in ens

89、uring that our customers have the best possible products and value for money available to them every day.Peter BamfordChairman4 June 2024 10B&M European Value Retail S.A.Annual Report and Accounts 2024Market overviewProfitable,cash-generating growthWe remain focused on delivering profitable,cash-gen

90、erating growth for our shareholders.This is achieved by serving our customers well with everyday low prices and relevant product ranges,by working closely with our partners in our supply chain and by providing our employees with a good working environment and the opportunity to progress within our o

91、rganisation.As an EDLP retailer,we must operate with an Everyday Low Cost(“EDLC”)model.We do this in an ever more competitive market,where costs continue to rise and where economic and geopolitical uncertainty abounds.General trendsMany retailers continue to find it tough and the last financial year

92、 has seen a number of medium sized retailers fail.Numerous profit warnings have been issued by a wide variety of retailers and over 10,000 stores closed and 120,000 jobs lost in the retail industry1.Against this competitive and difficult background for retailers and consumers,B&M has prospered,deliv

93、ering volume-led sales growth and growing profit margins.This uncertain economic background continues to favour a low-cost financial and operational model,and the widely-observed structural shift to discounting by consumers also continues.B&M is therefore benefitting from cyclical and structural fac

94、tors as consumers search for better value,and this trend by consumers is set to continue for many years to come,as identified in a report published by the Retail Sector Council last year2.There has been some alleviation in the cost-of-living crisis,but despite some more positive data points in recen

95、t months,we observe that many consumers are still facing significant price increases in a range of areas(e.g.mortgage payments,council taxes,telecommunication charges and car insurance)and real discretionary incomes are still some way below peak levels.However,as stated above,we believe price wins,a

96、nd never more so than when consumers are being squeezed and feel worse off,and we see the current market as an opportunity to capture profitable volume share.The UK shopper remains focused on in-store experiencesDespite the closure of many stores over recent years,the UK consumer remains predominant

97、ly a store-based shopper.As of December 2023,the ONS estimated that 73%of UK retail sales were made through physical stores2.Although many high streets are suffering,retail parks and some shopping centres continue to prosper and these are the areas where our new stores are targeted.Many column inche

98、s have been written on the growth and potential threat of retailers that take orders online,but in many retail sectors the concept remains unproven with low returns on capital or even losses,that the stores channel must subsidise.This is especially so for low-ticket,heavy/bulky items that need bundl

99、ing to give a meaningful total basket and are hard to distribute.Such items account for the majority of what we sell.By remaining focused on price and the in-store experience,we have performed well against the largest of online retailers,as well as specialists.Since the first lockdown in 2020,we hav

100、e grown sales by nearly 44%and opened 150 net new stores.The UK remains a nation of bricks and mortar shoppers,even if the type of shop and type of location continues to evolve.There will always be new entrants and companies exiting the market and we welcome all forms of competition.We remain ration

101、al and focused on executing our proven value-creating business model,and with a UK market share3 of only 2%we see significant opportunities within the physical retail market.B&M UK in numbers741Number of B&M UK stores1,200B&M UK stores target5 millionUK shoppers every week11B&M European Value Retail

102、 S.A.Annual Report and Accounts 2024Strategic ReportCorporate GovernanceFinancial StatementsCompetitive environmentThe retail industry remains tough,as evidenced by the plethora of profit warnings and retail failures over the last 12 months.Retailers have been squeezed by high-cost inflation and by

103、subdued demand leading to limited volume growth across the market.In 2023 in the UK,according to the ONS,the value of retail sales increased by 5.2%to 470bn,however the volume of retail sales fell by 2.6%4.Furthermore,the retail industry has been hit hard by wage inflation,with the minimum wage incr

104、easing by c.20%over a two-year period.Outside of costs of goods sold,labour is the biggest single cost for most retailers,so increases in labour costs hit home hard and can have unintended consequences.In 2023,120,000 jobs were lost in retail with 10,000 store closures1.At B&M,we continue to expand

105、and we continue to deliver strong volume gains,from LFL5 sales and from our store opening programme.This programme underwent a step change in the fourth quarter of FY24 when we opened 25 stores.In this current financial year,we will open at least 45 gross new stores and a similar amount next year.Th

106、e resulting substantial increase in our volumes will help offset high-cost inflation,such as labour inflation,in a way that is not open to many of our competitors.Of course there are many other productivity gains that result from volume growth,such as improved supplier relations,buying power and pus

107、hing more volume through the same infrastructure and logistics network.We are better positioned than most to deal with a challenged retail environment.Supermarket industryFMCG account for around half of our sales and our main competitors are the comparatively much larger,competitors are the mainstre

108、am supermarkets.The supermarket industry continues to be in a state of flux,with the continued growth of limited assortment discounters,two major operators having moved into private-equity ownership and with several other food retailers under pressure.The response by some,appears to have been to red

109、uce operating cost spend through reduced staff hours in store,leading to a deterioration of store standards,including product availability.At B&M,best-in-class standards is a must for our managers.With our EDLP offer and EDLC model,we remain well positioned to continue taking advantage of the compet

110、itive situation that a number of competitors cross subsidise home delivery services with higher prices in store,only adds to our strong strategic position in pricing.General Merchandise retailing General Merchandise accounts for the other half of our sales.Key categories include toys,DIY,home furnis

111、hings and garden.We currently have 247 stores with garden centres,making us the second largest operator in this market.Unlike many retailers in General Merchandise,much of our sales are non-discretionary.Toys at Christmas,essential DIY maintenance and small ticket items like phone charging cables an

112、d storage boxes are non-discretionary home items.Similarly,at any one point in time there are people setting up their home,moving house or going to college,and for these groups of consumers,buying furnishings,bedding and kitchen/dining is essential.It is hard to categorise exactly the split between

113、discretionary and non-discretionary,but non-discretionary is greater than many might think.This reduces the cyclicality of our business and puts us in a strong strategic position.The future for discounting is brightWe remain a highly complementary shop to the two German discount operators,which toge

114、ther have c.17%market share6.There is little overlap between what they sell(e.g.fresh,chilled,frozen and own label)and our branded ambient offer.It is no surprise therefore that some of our best performing stores are co-located or located nearby to one of these two discounters.B&M remains the UKs la

115、rgest variety discount retailer,but it is not the only one.There are several competitors in this arena,but it would be a mistake to think that we are inhibitors to each others growth.In a growing segment,which the consumer does not see as a discrete segment,there is plenty of room for growth.Discoun

116、t retailing is a structurally growing market.B&M is well positioned and remains a rollout story with very substantial long-term potential.With a low capex model and rapid growth,we are a substantial cash generator.We have returned 1.8bn to shareholders over the last four financial years7 and will co

117、ntinue to generate cash and distribute it to shareholders going forward.In a challenged retail environment,few companies will be able to make this claim.1.“120,000 retail jobs lost in 2023”,Retail Gazette,8 January 2024.2.“Retail The Great Enabler”,Retail Sector Council,July 20233.Figures are based

118、on external market research on the size of the relevant market in 2023.Market share is calculated by reference to UK revenues in FY24,whilst the market size estimate will include spend on categories where B&M and Heron Foods do not participate but is presented here for illustrative purposes.4.Retail

119、 sales index,Office National Statistics.5.One-year LFL revenues relate to the B&M UK estate only(excluding wholesale revenues)and are based on either 53 week versus 53 week or 14 week versus 14 week comparison periods.They include each stores revenue for that part of the current period that falls at

120、 least 14 months after it opened compared with its revenue for the corresponding part of FY23.6.Kantar market share data 12 weeks to 18 February 2024.7.Based on ordinary and special dividends paid in FY21 to FY24.12B&M European Value Retail S.A.Annual Report and Accounts 2024In depthStore growthNew

121、long-term store opening target provides clear runway of growth aheadBy the end of FY24,we successfully opened 47 gross new B&M UK stores,20 gross new Heron Foods stores in the UK and 11 gross new B&M France stores.This growth underscores the ample opportunity ahead,across all three businesses in the

122、 UK and France,through our store rollout strategy.FY24s 47 gross new B&M UK store openings brought our annual expansion rate back towards pre-COVID levels and has provided us with an additional one million sq.ft.of sales space.B&M has demonstrated remarkable growth over the last 20 years,since the A

123、rora family acquired 21 stores in the North West of England.Currently,the Group operates a UK-wide 741 B&M store chain,together with a further 335 Heron Foods convenience stores and 124 B&M France stores.B&M UK map of stores per capita,April 2024B&M UK stores by regionEngland576Scotland84Wales48Nort

124、hern Ireland3313B&M European Value Retail S.A.Annual Report and Accounts 2024Strategic ReportCorporate GovernanceFinancial StatementsThere remains a substantial opportunity for future new store expansion in both the UK and in France.In the UK,this year we raised our total store target to not less th

125、an 1,200 B&M UK stores,which underlines the large-scale opportunity for further expansion.Underpinning this total store target,we have updated our analysis to factor in the significant sales densities that we now achieve.We also have significant ambition for our French operations.The population of F

126、rance is larger than the UK,and hence we see the discount market opportunity as similar in scale.With only 124 stores currently,France offers ample headroom in the long term.As a store-based retailer with a proven,profitable,high-returning business model,B&M thrives even in the challenging trading e

127、nvironment currently prevalent.The current competitive environment often frees up retail space,offering opportunities for new stores in previously untapped locations.The closure of competitors can also lead to increased market share and LFL1 growth in key product categories,driving higher return on

128、space in our format and thereby broadening the potential list of new store opportunities.During the year,the administration of Wilko allowed B&M to swiftly select and acquire up to 51 stores.These stores,primarily located in town centres in the Midlands and South of England,fill gaps in our represen

129、tation in key locations.Although lacking garden centres,these stores are broadly similar in size with our existing estate and are quality locations to penetrate local markets effectively.With 21 ex-Wilko stores opened this financial year,performance to date has been pleasing,supplementing our organi

130、c expansion plans while maintaining our principle of selecting high-quality locations.Reflecting on a successful year,we remain confident in our ability to trade profitably across various store formats,with a robust short-term pipeline demonstrating our flexibility and effectiveness across town cent

131、res,shopping centres and retail parks nationwide.B&M ex-Wilko store,Cathedral Lanes Shopping Centre,Coventry opened February 2024B&M Birmingham,The Fort Shopping Park opened October 20231.One-year LFL revenues relate to the B&M UK estate only(excluding wholesale revenues)and are based on either 53 w

132、eek versus 53 week or 14 week versus 14 week comparison periods.They include each stores revenue for that part of the current period that falls at least 14 months after it opened compared with its revenue for the corresponding part of FY23.14B&M European Value Retail S.A.Annual Report and Accounts 2

133、024Chief Executives reviewAlex RussoChief Executive OfficerThis has been a good year for the Group and is an inflection point for our store opening programme.We have delivered a record Group adjusted EBITDA1(pre-IFRS 16)of 629m at a margin of 11.5%.This has been driven by a record year of revenues o

134、f 5.5bn,up 10.1%.Critically,we have also maintained our discipline on ensuring growth translates into cash,with a further 348m declared as ordinary and special dividends,bringing the cumulative total of cash returns paid over the four years FY21-FY24 to 1.8bn2.With a significant acceleration in open

135、ings in our final quarter,and not less than 90 B&M UK store openings in the next two financial years,the future is exciting.Core to our strategy and financial performance has been our relentless focus on price integrity(EDLP)and high retail standards.Additional revenues were driven by our LFL3 growt

136、h of 3.7%in our core UK business and by our new store openings that saw 47 gross new B&M stores open in the UK,11 in France and 20 in Heron.Importantly,almost half of the B&M openings in the UK were in the fourth quarter,meaning the majority of the benefits to sales,cash and profits will be felt in

137、the current financial year.The quality of our LFL3 growth remains high,being driven by higher volumes and positive customer transactions.This is a result of our price position,our merchandising optimisation and our operational standards.The progress in our LFL3 sales comes alongside the strong perfo

138、rmance of our new store openings that are generating accretive sales densities.Whilst FY24 was a good year,we are excited by the future.We will deliver our stated plans for new store growth,driving sub 12 month cash paybacks.We will maintain our operational execution discipline in existing stores.We

139、 will remain everyday low price and that means a focus on everyday low costs(“EDLC”)as we continue to mitigate inflation and protect our customers wallets.Store opening programme supports future growthDuring the financial year we announced a new,long-term store target of not less than 1,200 B&M UK s

140、tores,a significant increase from the 950 we had guided to previously.With just 741 stores currently,we have many more years of profitable,cash-generating growth ahead.Alongside this update to our long-term target,we also announced an acceleration in our short-term opening programme,to at least 45 s

141、tores per annum over a three-year period.During FY24,the first year of this programme,we have opened 47 stores.Net of a small number of closures/replacements,we finished the year with 741 stores,an increase in store numbers of c.5%versus the start of the year.15B&M European Value Retail S.A.Annual R

142、eport and Accounts 2024Strategic ReportCorporate GovernanceFinancial StatementsThe acceleration in our openings is under-pinned by the acquisition of up to 51 stores from Wilko.We moved rapidly as we carefully selected the stores we wanted,renegotiated leases and are now opening these stores at spee

143、d.Many of these stores are in new areas for B&M or are in catchments where we are under-represented.Of the 25 B&M UK stores we opened in the fourth quarter of FY24,21 were former Wilko stores,and I am pleased to report that these stores,in common with other new stores,are delivering strong sales den

144、sities.We intend to maintain our momentum and in the first quarter of FY25,also expect to open between 15 to 20 B&M UK stores,many of which will be former Wilko stores.The positive impact of the opening programme should be noted.A new stores sales represent 100%volume growth,so over the next three y

145、ears,this opening programme will generate substantial additional volume.LFL3 volume growth will continue to increase total volume growth further.LFL3 sales growth will augment new store sales growthAlthough our B&M UK fascia growth is pivoting to a higher proportion of total volume growth being driv

146、en by new stores,this is not at the expense of our LFL3 growth performance.LFL3 sales,from share gain and market growth are expected to contribute to total volume growth going forward,as they always have.We will maintain and improve availability and operational disciplines and we will reward our loc

147、al store managers for retail excellence and hard work through our management incentive programmes.Our store managers and team are responding exceptionally well.We will remain highly disciplined in making sure our existing and new stores are as good as they can be,with industry-leading standards and

148、pricing.Total volume growth will help ensure we continue to drive substantial profit growth and increased cash generation,and that volume growth will be driven by new and existing stores.The combined benefit of these two channels of volume growth is considerable.Industry-leading volume growth with d

149、isciplined cost controlOur sustained volume growth is improving our relationships with FMCG branded suppliers by reinforcing our position as the fastest growing major customer for many.It is also improving further our relationships with suppliers in the Far East(where there is excess capacity)and th

150、is is helping drive increased productivity as we increase our volume through a broadly unchanged infrastructure.Value creation in retail requires not only growing volume but also control of the underlying cost base.Despite industry-wide cost headwinds,we work to deliver on this fundamental aspect ev

151、ery day.We have faced challenges from increases in the minimum wage and energy costs.But through our volume gains,delivered by strong LFL3 growth and through new store openings,we have been able to weather these pressures and deliver a step change in our adjusted EBITDA1(pre-IFRS 16)margin compared

152、to pre-pandemic levels.Once again,I reiterate our long-term margin guidance,which is to deliver 16B&M European Value Retail S.A.Annual Report and Accounts 2024adjusted EBITDA1(pre-IFRS 16)margin for B&M UK between 12-13%,for B&M France to grow over time above 10%and for Heron to stay above 6%.Strate

153、gic actions underpin gross margin gains,while pricing remains market leadingThe step change in the adjusted EBITDA1(pre-IFRS 16)margin has been achieved by substantial sales growth(over 40%higher sales compared to 2020),through strict cost control(head office size and distribution capacity are large

154、ly unchanged)and through a managed increase in our gross margin as the business has grown and evolved.Importantly,this improvement in the gross and adjusted EBITDA1(pre-IFRS 16)margin has been delivered against a strong and improved price position.Our gross margin has improved due to better buying p

155、rices and mix benefit.Key driving factors include better store execution that captures incremental margin-accretive product sales without increasing store costs.Our range evolution and exiting categories such as big-ticket furniture and frozen food,improves both sales densities and gross profit.We a

156、lso leverage our market-leading volume growth in branded FMCG products and Far East sourced General Merchandise.These changes underpin the long-term EBITDA position.France offers very significant potentialOur French business has operational momentum and we will continue to grow it in a disciplined w

157、ay,driving increased sales densities.Once again France delivered strong LFL3 growth,the number of openings increased and delivered an adjusted EBITDA1(pre-IFRS 16)margin of 9.1%.Moving forward,we will continue to deliver incremental volume growth from the twin channels of new and existing stores.We

158、will increase the rate of openings in a disciplined way and will increase the FMCG range which will drive footfall and LFL3 sales growth further.Over the medium term,we expect the adjusted EBITDA1(pre-IFRS 16)margin to reach at least 10%and we will grow revenues with discipline.The potential for sto

159、re openings in France remains very high.France has a similar sized population to the UK,where we have targeted at least 1,200 stores.The long-term number of stores in France remains a multiple of the 124 stores we operate today.Chief Executives review continued17B&M European Value Retail S.A.Annual

160、Report and Accounts 2024Strategic ReportCorporate GovernanceFinancial StatementsHeron Foods contributes well to the GroupHeron is our discount convenience format business and although it is a small business,with just 560m turnover,its adjusted EBITDA1(pre-IFRS 16)margin is sector leading.Herons succ

161、ess is built upon differentiated sourcing,strict cost control,targeted store footprints and excellent retailing and logistics skills.There is cross fertilisation between Heron and our other businesses,which helps us optimise our sales densities across the Group.We will continue to open around 20 Her

162、on stores per year to deliver growth from this programme as well as our existing estate.Competitive positionThe retail industry remains challenged by regulatory and macro pressures.In the last 12 months a number of retailers have failed and a significant number of others have issued one or more prof

163、it warnings.In this context,we delivered increased profits and cash generation,and have this year exceeded our“lockdown”peak of 626m adjusted EBITDA1(pre-IFRS 16).There are very few companies which were“lockdown winners”and who have sustained their competitive progress post-pandemic.In FY20,our adju

164、sted EBITDA1(pre-IFRS 16)was 342m compared to 629m in FY24.In the last five years,we have delivered 83.9%EPS earnings growth equivalent to an annual compound earnings growth of over 12%.On top of this,between FY21 to FY24 we have returned 1.8bn of cash to our shareholders.If shareholders had reinves

165、ted those dividends in our shares at the time the dividends were returned,they would have seen the equivalent of an annual compound earnings growth of over 17%.The success of our new stores,our continued volume growth and improved sales densities show that we are as competitive as ever and we have p

166、lenty of runway ahead.The growth of discounting is a global trend and we remain a rollout opportunity into structural change.We will continue to take sales and market share,but we will only ever do so in a disciplined and profitable manner.Over the medium and longer term,future volume gains will hel

167、p insulate us against cost pressures in a way that most of our competition do not possess.We remain a compounding,profitable,cash-generating business with a platform for future growth.A thank you to our Chairman,the management team and to all colleaguesLater this year we will see our Chairman,Peter

168、Bamford,retire after six years.He has chaired the Group through some of the most uncertain times in recent history and has overseen the transition from a founding CEO to me.He has done this with an unerring view of what is right for all our stakeholders.I wish to thank him for his unwavering support

169、 and guidance on both a personal and professional basis.I wish Peter all the very best for the future.I have thoroughly enjoyed working with him.I would also like to extend my thanks to the broader management team and to all of our colleagues.We have again delivered high-quality results in a tough r

170、etail market.We have been able to deliver these results thanks to the hard work of the team everyone from the shop floor upwards.Alex RussoChief Executive Officer4 June 20241.Adjusted values are considered to be appropriate to exclude unusual,non-trading and/or non-recurring impacts on performance w

171、hich therefore provides the user of the accounts with additional metrics to compare periods of accounts.See notes 2,3 and 4 of the financial statements for further details.2.Based on ordinary and special dividends paid in the years FY21 to FY24.3.One-year LFL revenues relate to the B&M UK estate onl

172、y(excluding wholesale revenues)and are based on either 53 week versus 53 week or 14 week versus 14 week comparison periods.They include each stores revenue for that part of the current period that falls at least 14 months after it opened compared with its revenue for the corresponding part of FY23.1

173、8B&M European Value Retail S.A.Annual Report and Accounts 2024Financial reviewMike SchmidtChief Financial OfficerNew and existing stores driving volume growthThe current accounting period represents the 53 weeks trading to 30 March 2024(“FY24”)and the comparative period represents the 52 weeks to 25

174、 March 2023(“FY23”).Group revenues in FY24 increased by 10.1%year-on-year(“YoY”),(+10.1%on a constant currency basis1),driven by volume growth and positive LFL2 performance across the three businesses.The extra week in the FY24 trading period relative to FY23 added 2.3%to Group revenue growth YoY wh

175、ilst also benefitting from higher trading due to the early Easter timing.This seasonal Easter trading benefit will not occur in FY25 as a result.Group adjusted EBITDA3(pre-IFRS 16)increased by 9.7%to 629m(FY23:573m),representing a margin of 11.5%(FY23:11.5%).This reflects volume-led revenue growth,w

176、ith the cost leverage and productivity gains of higher transaction numbers helping reduce cost-to-sell percentages.Group adjusted operating costs on an underlying basis3,6 decreased as a percentage of revenues from 25.5%to 25.4%.Group adjusted operating profit3 increased by 10.9%moving in line with

177、the above.We have continued to invest in our store estate and have 60 net more stores across the Group,as such total depreciation and amortisation increased by 6.4%.The extra week added 13m to Group adjusted EBITDA3(pre-IFRS 16)and 12m to Group adjusted operating profit3.Fascia overviewB&M UKIn the

178、B&M UK fascia4 business,total revenues increased by 8.5%to 4,410m(FY23:4,067m),with LFL2 revenues up 3.7%.This was underpinned by volume growth driven from our new store opening programme and positive LFL2 customer transactions.LFL2 revenues grew in every quarter YoY.The first half of the year saw L

179、FL2 revenues up 6.2%,split between 9.2%in Q1 and 3.1%in Q2.Against relatively more challenging comparatives,LFL2 revenues maintained their positive trend across the second half seeing 0.6%growth in Q3 and 2.9%in Q4.We are pleased to see an increase in LFL2 customer transaction numbers and our sales

180、participation between FMCG and General Merchandise remains balanced and in line with our expectations.19B&M European Value Retail S.A.Annual Report and Accounts 2024Strategic ReportCorporate GovernanceFinancial StatementsThere were 47 gross new store openings in the year.More than half of our store

181、openings came in the fourth quarter,with 21 of these being former Wilko stores.We are pleased with the early performance of these stores along with all other new store openings in the year.B&M UK revenues also included 30m of wholesale revenues(FY23:37m).The majority of wholesale sales are to our as

182、sociate Centz Retail Holdings Limited,a chain of 53 variety goods stores in the Republic of Ireland,which increased its proportion of FMCG sourcing from within the EU market.Our trading gross margin5 rose 46 bps YoY to 36.3%from 35.8%.This reflected a reduction in freight rates and strong sell-throu

183、gh across both FMCG and General Merchandise,resulting in largely only planned markdown activity this year.Statutory gross margin increased 120 bps to 36.9%from 35.7%,benefitting from favourable foreign exchange hedge accounting in the current year and non-recurring storage costs recorded in the comp

184、arative.Adjusted operating costs on an underlying basis3,6 were well controlled representing 24.0%of revenues compared to 24.4%in the prior Group financial performancemFY24FY23YoY ChangeRevenue5,4844,98310.1%Adjusted EBITDA3(pre-IFRS 16)6295739.7%Adjusted EBITDA3(pre-IFRS 16)margin11.5%11.5%(3)bpsDe

185、preciation and amortisation(pre-IFRS 16)(82)(76)6.9%Operating profit impact of IFRS 16*675717.0%Adjusted operating profit361455410.9%Adjusting items3(7)(19)(63.3)%Statutory profit before interest and tax60753513.5%Finance costs relating to right-of-use assets(69)(61)13.8%Other net finance costs(40)(

186、38)3.3%Statutory profit before tax 49843614.1%*Includes depreciation on right-of-use assets of 176m FY24 total depreciation and amortisation was 258m(FY23:242m).year.Given the 9.7%increase in the national living wage hourly rate that was absorbed in the period,this reduction in our cost-to-sell perc

187、entage reflects cost leverage and productivity gains from sales volume growth,together with a continued focus on cost discipline.We are an EDLC retailer that operates with a low fixed cost base and double-digit adjusted operating profit3 margins.This operating model allows us to benefit materially f

188、rom volume growth from either new store openings or LFL2 trading.It is total volume growth that leverages our central cost base,offsetting inflationary impacts,and results in an increase in operating profits at the sustainable 12-13%adjusted EBITDA3(pre-IFRS 16)and adjusted operating profit3 margins

189、 that we consistently guide to.Adjusted EBITDA3(pre-IFRS 16)increased by 10.5%to 556m(FY23:503m),with margin increasing by 23 bps to 12.6%(FY23:12.4%)and demonstrating the benefit of volume-driven revenue growth.Adjusted operating profit3 was 548m(FY23:498m)with a margin of 12.4%(FY23:12.3%).Statuto

190、ry profit before interest and tax for the year was 548m(FY23:498m).B&M UK LFL2 revenue reconciliationm202420231-year ChangeLike-for-like2 revenue(53 weeks basis)4,8434,6723.7%Like-for-like3 sales recorded in week one of FY24(85)Online trial6New stores after 25 March 2023140New stores prior 25 March

191、202313353Closed stores159Gross segment revenue5,1174,705VAT/Commission income(737)(675)Wholesale revenues3037B&M UK revenue4,4104,0678.5%B&M FranceTotal revenues increased by 19.2%to 514m(FY23:431m).The business continues to improve sales densities with the majority of the LFL2 revenue growth perfor

192、mance being driven by positive customer transaction numbers.It has been another disciplined and controlled year of store openings with 11 gross new store openings and one relocation.All new stores are performing in line with or above our assumptions and continue to demonstrate the potential for the

193、B&M brand to trade effectively in a wide range of geographies and formats.Adjusted operating expenses on an underlying basis3,6 as a percentage of revenues reduced from 35.9%to 35.3%reflective of cost leverage from increased sales volumes.Adjusted EBITDA3(pre-IFRS 16)increased to 47m(FY23:41m)repres

194、enting an adjusted EBITDA3(pre-IFRS 16)margin of 9.1%(FY23:9.6%).This is a 64 bps increase compared to an underlying margin of 8.5%in FY23,which excludes c.5m of one-off government support received at the start of the prior period,as previously reported.Adjusted operating profit3 was 49m(FY23:38m)wi

195、th a margin of 9.5%(FY23:8.8%).Statutory profit before interest and tax for the year was 49m(FY23:38m).Heron FoodsTotal revenues grew by 15.3%to 560m(FY23:485m)representing another excellent year.We remain committed to offering our customers convenient,great value and quality products at a competiti

196、ve price point.We continue to see an increase in both LFL2 customer transactions and basket value YoY.There were 20 gross new store openings in the year with one relocation and three closures.Adjusted operating expenses3 as a percentage of revenues reduced from 26.1%to 25.4%.Adjusted EBITDA3(pre-IFR

197、S 16)increased by 21.3%to 36m(FY23:30m),a result that is testament to the execution and cost control demonstrated by the Heron team.Our margin of 6.4%(FY23:6.1%)is sector leading.Adjusted operating profit3 was 27m(FY23:19m)with a margin of 4.9%(FY23:3.8%).Statutory profit before interest and tax for

198、 the year was 27m(FY23:19m).20B&M European Value Retail S.A.Annual Report and Accounts 2024Adjusting items and central charges Adjusting items are excluded from our adjusted EBITDA3(pre-IFRS 16)and adjusted operating profit3 performance by virtue of their size and nature to provide a helpful perspec

199、tive of the YoY performance of the Group.Further detail on adjusting items can be found in note 3,starting on page 121 of the financial statements.The growth in profit before interest and tax has moved in line with segmental trading offset partially by central charges within the corporate segment,in

200、cluding the management retention bonus accrual for the Group Trading Director,the Wilko acquisition costs and listing costs for our Luxembourg corporate entity.Net finance costs Adjusted net finance charges3 for the year,excluding IFRS 16,were 44m(FY23:38m)due to increased rates on our new debt faci

201、lities.This included bank and high yield bond interest of 47m(FY23:38m)and amortised fees of 2m(FY23:2m).The interest charge relating to lease liabilities under IFRS 16 was 69m(FY23:61m).Group taxThe tax charge in FY24 was 131m(FY23:88m),primarily reflecting an increase in the UK corporation tax rat

202、e from 19%to 25%,effective from 1 April 2023,as well as due to an increase in profits year-on-year.As a Group,we are committed to paying the right tax in the territories in which we operate.The B&M UK business paid taxes totalling 653m in FY24,including 234m relating to those taxes borne directly by

203、 the Company such as corporation tax,customs duties,business rates,employers National Insurance contributions,and stamp duty and land taxes.The balance of 419m are taxes we collect from customers and employees on behalf of the UK Exchequer,which includes Value Added Tax,Pay As You Earn and employee

204、National Insurance contributions.Adjusting items and central charges m20242023Profit before interest and tax607535Costs in relation to the acquisition of Wilko stores9Online trial2Fair value of ineffective derivatives(2)17Foreign exchange on intercompany balances00Adjusted operating profit3614554Pro

205、fit after tax and earnings per shareStatutory profit after tax was 367m(FY23:348m)and the statutory diluted earnings per share was 36.5p(FY23:34.7p).Adjusted profit after tax3(pre-IFRS 16),which is also reported to allow investors to aid their understanding on the operating performance of the busine

206、ss(see note 3 of the financial statements),was 370m(FY23:366m),and the adjusted fully diluted earnings per share3 was 36.8p(FY23:36.5p).Capital expenditureGroup net capital expenditure7 totalled 124m this year(FY23:87m).Investment included 59m spent on 78 gross new stores across the Groups fascias(F

207、Y23:33m on 42 stores)and 27m on infrastructure projects to support the continued growth of the business(FY23:16m).There was also investment of 34m on maintenance works to ensure that our existing store estate and distribution centres are appropriately invested(FY23:40m).There was also a net expendit

208、ure of 4m relating to one freehold acquisition(FY23:net expenditure of(1)m).Post-tax free cash flow8 and net debt9,10Post-tax free cash flow8 of 382m(FY23:464m),represents a reduced YoY,caused by higher tax payments and increased capital expenditure due to the store opening programme.The Group conti

209、nues to be highly cash generative with our inventory levels flat YoY despite higher revenues.The strong performance and cash generation have enabled the Group to pay dividends totalling 348m in FY24.This includes a 201m special dividend11 paid in February 2024.There has been a step change in the rev

210、enues and profit performance of the Group since the pandemic.During the four financial periods FY21 to FY24,we grew Group adjusted EBITDA3(pre-IFRS 16)from 342m(FY20)to 629m(FY24),generated cumulative operating cash flow of 3.3bn and distributed 1.8bn in cash to shareholders demonstrating our consis

211、tent disciplined approach to capital returns and shareholder value creation.The Board adopted a long-term capital allocation policy in 2016 to provide a framework to help investors understand how the Group will evaluate opportunities to invest and support the growth of the business relative to incre

212、mental return of capital to shareholders.Net debt9(excluding IFRS 16 lease liabilities),increased to 737m(FY23:724m).The net debt9 to adjusted EBITDA3(excluding IFRS 16 lease liabilities)leverage ratio was 1.2x(FY23:1.3x).Net debt10(including IFRS 16 lease liabilities)was 2,094m(FY23:2,025m)meaning

213、our net debt to adjusted EBITDA3 ratio was 2.4x,a decrease on the previous year(FY23:2.5x).Financial review continued21B&M European Value Retail S.A.Annual Report and Accounts 2024Strategic ReportCorporate GovernanceFinancial StatementsDividendsDuring the year,the Company declared and paid an interi

214、m ordinary dividend of 5.1p11 per share in addition to a special dividend of 20.0p11 per share.Subject to approval by shareholders at the AGM on 23 July 2024,a final ordinary dividend of 9.6p11 per share will be paid on 2 August 2024 to shareholders on the register of the Company at the close of bus

215、iness on 28 June 2024.The ex-dividend date will be 27 June 2024.The Group has a dividend policy which targets an ordinary dividend pay-out ratio of between 30-40%of net income on a normalised tax basis.The Group generally aims to pay the interim and final dividends for each financial year in proport

216、ions of approximately one-third and two-thirds of the total annual ordinary dividend respectively.Mike SchmidtChief Financial Officer4 June 2024Notes:1.Constant currency comparison involves restating the prior year Euro revenues using the same exchange rate as that used to translate the current year

217、 Euro revenues.2.One-year LFL revenues relate to the B&M UK estate only(excluding wholesale revenues)and are based on either 53 week versus 53 week or 14 week versus 14 week comparison periods.They include each stores revenue for that part of the current period that falls at least 14 months after it

218、 opened compared with its revenue for the corresponding part of FY23.3.Adjusted values are considered to be appropriate to exclude unusual,non-trading and/or non-recurring impacts on performance which therefore provides the user of the accounts with additional metrics to compare periods of account.S

219、ee notes 2,3 and 4 of the financial statements for further details.4.References in this announcement to the B&M UK business include the B&M fascia stores in the UK except for the“B&M Express”fascia stores.References in this announcement to the Heron Foods business include both the Heron Foods fascia

220、 and B&M Express fascia convenience stores in the UK.5.Trading gross margin is considered to be a meaningful measure of profitability as it refers to the measure of gross margin used by management to commercially run the business.It differs to the statutory definition for B&M,which increased 120 bps

221、 from 35.7%to 36.9%,due to technical accounting adjustments in relation to the allocation of gains and losses from derivative accounting,storage costs and commercial income,with the derivative adjustments the main factor.6.Adjusted operating expenses on an underlying basis excludes foreign exchange,

222、one off income,depreciation and amortisation.This adjusted measure is considered a more meaningful metric to the users of the accounts as this is the cost base used by management to commercially monitor performance.Group non-underlying items include B&M UKs foreign exchange losses in relation to der

223、ivative adjustments of 12m(FY23:40m gain)and one off income received in France at the start of the prior year which amounted to 5m.Group adjusted operating costs,excluding depreciation and amortisation,as a percentage of revenues increased to 25.6%from 24.6%.7.Net capital expenditure includes the pu

224、rchase of property,plant and equipment,intangible assets and proceeds from the sale of any of those items.These exclude IFRS 16 lease liabilities.8.Post-tax free cash flow is an Alternative Performance Measure.Please see note 3 of the financial statements for more details and reconciliation to the C

225、onsolidated statement of cash flows.Statutory Group cash generated from operations was 862m(FY23:866m).This statutory definition excludes payments for leased assets including the leasehold property estate.9.Net debt comprises interest-bearing loans and borrowings,and cash and cash equivalents.Net de

226、bt was 737m at the period end,reflecting 919m as the value of gross debt netted against 182m of cash.See notes 18,21 and 28 of the financial statements for more details.10.Net debt including lease liabilities is the above plus the current and non-current lease liabilities recorded on the Consolidate

227、d statement of financial position.11.Dividends are stated as gross amounts before deduction of Luxembourg withholding tax which is currently 15%.22B&M European Value Retail S.A.Annual Report and Accounts 2024KPIsThe Board manages the Groups performance by reviewing a number of key performance indica

228、tors(“KPIs”).The KPIs are discussed in the Chief Executives review and the Financial review.FinancialGroup revenues 5.5bn+10.1%5.5bn5.0bn20242023Why is it important?The Board considers that this measurement is a key indicator of the Groups growth.Sustainable growth in revenues is important to our bu

229、siness model.B&M UK LFL1 growth3.7%+295 bps3.7%0.7%20242023Why is it important?By monitoring the ongoing LFL trading performance at both store and product level,we are able to track progress and monitor performance of our existing store estate.Group adjusted EBITDA2(pre-IFRS 16)629m+9.7%629m573m2024

230、2023Why is it important?In addition to growing revenues and opening new stores,we have a clear focus on ensuring that our growth is profitable.We measure profitability by our adjusted EBITDA(pre-IFRS 16)performance.See notes 2,3 and 4 of the financial statements for further details.Number of Group g

231、ross store openings78+85.7%784220242023Why is it important?This measure is an indicator of the Groups growth.Store growth is a key strategy and there remains plenty of runway potential ahead in both the UK and France across all fascias.Total average retail selling space,sq.ft.(k)20,300+5.7%20,30019,

232、20020242023Why is it important?This measure is an indicator of the Groups growth.The Groups store growth strategy can sometimes result in the closure of one store,to be replaced by a much larger store in the same catchment area.Therefore this is a key indicator.1.One-year LFL revenues relate to the

233、B&M UK estate only(excluding wholesale revenues)and are based on either 53 week versus 53 week or 14 week versus 14 week comparison periods.They include each stores revenue for that part of the current period that falls at least 14 months after it opened compared with its revenue for the correspondi

234、ng part of FY23.2.Adjusted values are appropriate to exclude unusual,non-trading and/or non-recurring impacts on performance which therefore provides the user of the accounts with additional metrics to compare periods of accounts.See notes 2,3 and 4 of the financial statements for further details.3.

235、Post-tax free cash flow is an Alternative Performance Measure.Please see note 3 of the financial statements for more details and reconciliation to the Consolidated statement of cash flows.4.Based on dividends paid in the Consolidated statement of cash flows.Group adjusted operating profit2614m+10.9%

236、614m554m20242023Why is it important?In addition to growing revenues and opening new stores,we have a clear focus on ensuring that our growth is profitable.We measure profitability through our adjusted operating profit performance which incorporates IFRS 16 adjustments.See notes 2,3 and 4 of the fina

237、ncial statements for further details.Post-tax free cash flow3382m-17.8%382m464m20242023Why is it important?The Group is highly cash generative,capable of delivering high returns from a relatively low capital intensity.By monitoring this free cash flow metric,we are able to actively manage our workin

238、g capital needs,meet our cash commitments and invest in the business and allocate any surplus in line with our capital allocation policy.Return to shareholders4348m-4.8%348m366m20242023Why is it important?Returning cash through ordinary and special dividends is an indicator of the Groups profitabili

239、ty and clearly demonstrates our ability to return cash which is important to our shareholders.Non-financial23B&M European Value Retail S.A.Annual Report and Accounts 2024Strategic ReportCorporate GovernanceFinancial StatementsPrincipal risks and uncertaintiesB&Ms risk management frameworkAppropriate

240、 management of business and external risks is an essential part of operating the Group effectively and creating value for stakeholders over the long term.In this section we provide an overview of the Groups approach to risk management alongside an assessment of the Groups principal risks and mitigat

241、ing controls,highlighting any changes during the period.The Board has overall responsibility for the management of risk and the identification of principal risks that may affect the Groups operations,financial performance or strategic objectives.The Groups risks and mitigations are monitored and con

242、trolled by executive management.The Chief Financial Officer ensures that each principal risk has an executive owner and coordinates the regular review process by the Board and also the Audit&Risk Committee as part of their oversight of the Groups system of internal controls.Given the relative import

243、ance of the Groups UK activities,responsibility for the principal risks is consistently led by UK executive management.Where a risk materially affects French and Heron operations,for example cyber security,then that executive owner will also coordinate with local executive management counterparts,an

244、d the Group will adopt a consistent Group-wide risk tolerance.The Groups Internal Audit function,led by the Head of Internal Audit,also assesses the ongoing business risks of the Group.It reports on the effectiveness of internal control procedures to the Audit&Risk Committee.In assessing risk,it con

245、siders the Groups risk mitigating actions and provides recommendations to management to improve business processes and limit their exposure to risk.The Groups approach to reviewing risk appetite is part of a bi-annual risk management cycle,which is used to drive and inform actions in relation to the

246、 principal risks identified by the Board.The executive management risk owners prepare a written update for the Board,which summarises internal and external developments in the risk environment.This update is then discussed at the Board,together with the output of a horizon scanning exercise conducte

247、d by Internal Audit.As part of that risk review process,the Groups appetite for risk is also defined with reference to the expectations of the Board for both commercial opportunity and internal control.This is then used by the Board to ensure executive management are mitigating and eliminating risk

248、exposure on a timely basis,in line with Board expectations and for setting the Groups internal audit plan each year.The Audit&Risk Committee is responsible for ensuring any material controls in place as part of the Groups risk mitigation are effective.They are formally reviewed once per year,but wil

249、l also be addressed through the regular and more frequent Internal Audit review process.Assessment of risksThe Directors confirm that they have made a robust assessment of the emerging and principal risks and uncertainties facing the Group,including those that would threaten its business model,futur

250、e performance,or solvency.A summary outcome of that assessment is set out in the heat map overleaf.The heat map indicates the Boards view of the likely degree of impact of each risk after taking into account the risk mitigations referred to in the principal risks table.Risk frameworkBoard Overall re

251、sponsibility for risk managementAudit&Risk Committee Oversees risk management processExecutive Management Manages specific risks and embeds risk management throughout the GroupInternal Audit teamOversees and assists in process implementation and reports to Audit&Risk Committee24B&M European Value Re

252、tail S.A.Annual Report and Accounts 2024326715894HighLowImpactHighLowLikelihoodPrincipal risks heat map1 Supply chain 2 Competition 3 Economic environment 4 Regulation and compliance 5 International expansion 6 Political uncertainty7 IT systems,cyber security and business continuity8 Key management

253、reliance9 Store expansion Principal risks tableThe table below describes(i)the main risk exposures identified by the Board in relation to our Group businesses,(ii)the mitigating factors which relate to how the Group manages each of the risk exposures,and(iii)the linkage between the business strategy

254、 and the relevant risk exposures.The Group summarises(where relevant)key actions arising in the year in relation to how the Group has addressed certain aspects of these risks.The Group has also indicated where there were any changes in the profile of any of the risks,which reflects the Boards view o

255、f the current trend in relation to those risks.The risks set out in the table are not exhaustive but represent the main risks to the Group in relation to the period under review.Key changes to principal risk disclosuresThe Group previously reported on the potential risks of ineffective stock managem

256、ent and failure in the Groups warehouse infrastructure.Through the Groups mitigation efforts and strengthening of controls,the Directors now believe that these are no longer principal risks for the Group.The Group has introduced a tightly controlled process on committing to stock purchases and on cl

257、earing seasonal stocks before the end of each selling season which is underpinned through a newly introduced merchandising system.This has demonstrated its effectiveness through FY23 and FY24,and despite disruption from the Red Sea attacks the Group has maintained good stock availability while limit

258、ing the growth of inventory balances.Similarly,the strengthening in management and control of the warehouse operations together with careful investments in our operating systems and resilience has improved the Groups mitigated risk position on warehouse infrastructure.Climate change and ESG continue

259、 to be significant topics within our risk management discussions.We,however,do not view the subject matter as a distinct area that requires separate executive management and focus,but instead believe that it is important that our executive team embed ESG considerations as part of routine business as

260、 usual activities.We coordinate and facilitate all our activity around ESG matters through our in-house sustainability manager and also through the support of specialist external consultants.The growing risk from political uncertainty and global conflict has also been considered by the Directors.The

261、 war in Ukraine has not to date had a material impact on the Groups operations,other than through consequential industry-wide impacts on inflation rates for energy and finished goods.The possibility of conflict between China and Taiwan is growing,and this would have a material impact on the sourcing

262、 and potentially pricing of our General Merchandise product ranges.This conflict risk is properly considered through our supply chain principal risk,and the Group has made a conscious decision to not compromise its commercial ranging and to continue to source products using currently optimal channel

263、s.The global political landscapes are also likely to change significantly during 2024,particularly given the number of elections being conducted.The Directors concluded that,should these lead to different fiscal policies or regulatory approaches being adopted these could have a material impact on th

264、e consumer and operating environment and hence the Groups financial results.In order to ensure that this risk is carefully monitored and mitigated against it has been added as Principal Risk 6“Political uncertainty”.Principal risks and uncertainties continued25B&M European Value Retail S.A.Annual Re

265、port and Accounts 2024Strategic ReportCorporate GovernanceFinancial StatementsLink to strategy keyRisk change key1 Existing B&M UK stores 2 New B&M UK stores 3 France growth4 Heron Foods growth Increased risk No change Decreased risk1Supply chainDescription and potential impactStrategic priorityChan

266、geImported goods from China and other Far East countries represent a very significant proportion of the Groups General Merchandise products,and we have material dependence on the continuing smooth flow of these supply sources.Any lead time delays in the supply chain could result in lower sales and p

267、otential loss of margin through reduced availability and/or higher markdowns if goods arrived out of season.Disruption could arise from a wide range of hard-to-anticipate factors including war,civil unrest,natural disasters,disease pandemics and ethical trading issues.In particular,the Group notes t

268、he rising tensions between China and Taiwan,and the consequential impact on Chinese relationships with the US and European nations.Any disruption to our sourcing channels from China would require a material proportion of our General Merchandise ranges to be switched to potentially less efficient man

269、ufacturers in different regions.This process would be significantly disruptive and would place reliance on new manufacturers and products.1234Risk mitigationsKey actions in 2023/24 The Group has an experienced buying team which is responsible for maintaining an efficient and effective supply chain.A

270、 range of alternative supply sources are maintained across the product categories,we have explored alternative countries of sourcing,and(subject to a general reliance on China-based merchandise manufacturers)we are not reliant on any one single supplier.The Group has anti-bribery and corruption and

271、anti-modern slavery and human trafficking policies in place in relation to its supply chain.A combination of individual buyers and sourcing agent employees conduct supplier factory visits.Our Import supply chain management system is a multi-carrier option,enabling us to utilise multiple shipping lin

272、e options across all trade lanes,where necessary.Stock cover in the B&M business on General Merchandise imported goods ensures levels of inventory are adequate to meet periods of supplier delay.This cover was tested in practice with the Red Sea delays,and it is believed by executive management that

273、the impact on availability and seasonal launches was limited.Continued review of supplier social compliance processes by our sustainability manager to monitor transparency in the supply chain.Working with suppliers and freight forwarders to forecast and remain vigilant in relation to challenges rega

274、rding the transportation of goods:Continued development of an enhanced forecasting system to predict the volume of product sales and provide oversight of the flow of stock through our system.Strengthened supplier performance and lead time reporting,ensuring our approach is dynamic against supply cha

275、in distribution risk.2CompetitionDescription and potential impactStrategic priorityChangeThe Group operates in highly competitive retail markets in the UK and France which could materially impact the Groups profitability,share price and limit growth opportunities.1234Risk mitigationsKey actions in 2

276、023/24 Continuous monitoring of competitor pricing,store formats and product offering.Development of new product ranges within the product categories to identify new market opportunities and target new customers.The Group has maintained its stock discipline,ensuring that seasonal ranges are sold thr

277、ough in full.This allows the Group to maximise“newness”for customers each year and avoids the risk of mispriced stock in a period of deflating freight costs.The Group has continued to maintain its strict SKU count discipline within product ranges,which enables it to react quickly to ever changing co

278、nsumer tastes,trends and buying habits.Around half of the Groups revenues in the period continues to come from,typically essential,food and FMCG goods.This has allowed the Group to remain insulated from any downturn in consumer spending and resilient against our competitors whilst continuing to meet

279、 our customers needs.26B&M European Value Retail S.A.Annual Report and Accounts 20243Economic environmentDescription and potential impactStrategic priorityChangeA reduction in consumer spending,as a result of either consumer confidence levels or prevailing macroeconomic conditions,could impact upon

280、revenue and profitability.Inflation manifesting itself though increases in raw material,fuel and wage costs could adversely affect the profitability of the business.1234Risk mitigationsKey actions in 2023/24 We have an effective forecasting process that enables operating actions to be undertaken ref

281、lecting economic conditions.We offer a range of products and price points for consumers which allows them to trade up and down.We maintain a low-cost business model that allows us to maintain our selling prices as low as possible and our pricing gap to key competitors.The Group has engaged extensive

282、ly with suppliers on proposed price changes.While maintaining a constructive and fair approach,we have continued to ensure our stores are well stocked with the best-selling products,at attractive prices relative to competitors.Management has continued to proactively respond to changing sales pattern

283、s throughout the year,adapting product ranging and promotion in stores,for example increasing entry level SKU choice.4Regulation and complianceDescription and potential impactStrategic priorityChangeThe Group is subject to a range of regulatory and legislative requirements,including those relating t

284、o the importation of goods,pricing,anti-bribery and corruption,anti-modern slavery,anti-tax avoidance and evasion,health and safety,employment law,general data protection regulation(“GDPR”),control of pollution and contamination to the environment,the Listing Rules,Transparency laws and regulations

285、and the Groceries Supply Code of Practice(the“Groceries Code”).The impact of failure to comply with laws and regulations could lead to financial penalties and significant reputational damage.1234Risk mitigationsKey actions in 2023/24 The Group has a number of policies and codes,including a code of c

286、onduct which incorporates an anti-bribery and corruption policy,which outlines the mandatory requirements we apply to our business.Our codes and policies are communicated to staff along with our employee handbook which is made available to everyone joining the business.We actively seek to identify a

287、nd manage compliance with all applicable new legislation and regulations which apply to us in Luxembourg,the UK and France.Reports on new regulatory developments are provided by the General Counsel and management directly to the Board as well as its Committees.The Internal Audit function of the Grou

288、p includes assurance testing and auditing of the Groups implementation of new areas of regulatory compliance.We have a whistleblowing procedure and policy which allows colleagues to confidentially report any concerns or inappropriate behaviour within our business.In relation to anti-modern slavery a

289、nd other standards relating to human rights within our supply chain,the buying teams are charged with ensuring that every supplier adheres to our Workplace Policy standards.The Company has a Group-wide GDPR policy and all associated materials are reviewed to ensure they are GDPR compliant.Our Grocer

290、ies Code compliance programme includes guidance and training for colleagues,monitoring of compliance,reporting of potential non-compliance issues,dispute resolution procedures and a Code Compliance Officer who oversees compliance and the resolution of code-related issues with suppliers.Oversight of

291、our compliance with the Grocery Code is carried out by management and reviewed by the Audit&Risk Committee as a standing agenda item at each of the meetings of that Committee throughout each year.Appointment of new Group General Counsel and Chief Compliance Officer during the year.Mandatory training

292、 for all management and support centre colleagues using an e-learning portal has continued throughout the year.Our Groceries Code Compliance Officer and Group Internal Audit team have actively engaged during the year with the Groceries Code Adjudicator(“GCA”)in relation to our action plans and follo

293、w-up work during the year.The Group has continued reporting in line with the Task Force on Climate-related Financial Disclosures(“TCFD”),and has commenced preparations for upcoming changes in UK and EU reporting legislation.Principal risks and uncertainties continued27B&M European Value Retail S.A.A

294、nnual Report and Accounts 2024Strategic ReportCorporate GovernanceFinancial Statements5International expansionDescription and potential impactStrategic priorityChangeDeveloping our businesses in new market territories is important to the Groups strategic plans.Expanding into markets creates addition

295、al challenges and risks which could impact the overall performance of the Group,its growth and profitability.The Group operates in highly competitive retail markets in the UK and France which could materially impact the Groups profitability,share price and limit future growth opportunities.3Risk mit

296、igationsKey actions in 2023/24 The Group has international retail experience on the Board.Continued reinforcement and development of the experienced senior leadership teams in France in key operational areas.Given insight,relationships and sourcing scale,UK support is provided for product range deve

297、lopment and selection by local buying teams.The Group continues to invest in both the infrastructure and technology of our French business.Given differences in local laws and regulations,external legal support,with strong local relevant experience,is retained in place.We continued to strengthen the

298、senior leadership team in France and continued the involvement of management from the UK to transfer operational knowledge to colleagues in France.We have continued to open additional stores,increasing the scale and presence from which we operate.A Board visit was organised to the French business,in

299、cluding presentations by the executive team,to ensure that Directors understand first hand the trading environment and management perspectives.6Political uncertaintyDescription and potential impactStrategic priorityChangeUpcoming elections across the world create an increased likelihood for governme

300、nts to adopt different regulatory approaches,political stances and fiscal policies.There is also a growing risk of further armed conflict in Eastern Europe and rising tension between China and Taiwan.This could impact consumer certainty and thus our revenue growth as well as our supply chain and ope

301、rating costs,thereby affecting the profitability and cash generation of our operations.14Risk mitigationsKey actions in 2023/24 Changes in the operating environment are likely to affect all participants in the retail industry.The Groups business model has been proven to trade well through all econom

302、ic environments,and has tended to outperform other industry participants in weak market environments.Operating costs are tightly managed,and the Group maintains dynamic monitoring of its trading,in order to respond to the market environment.Executive management and the Board regularly review market

303、commentary to understand the changing political landscape.Regular Board discussions on the political and regulatory environment.7IT systems,cyber security and business continuityDescription and potential impactStrategic priorityChangeThe Group is reliant upon key IT systems,and disruption to such sy

304、stems would adversely affect business operations including those at the distribution centres and stores.The potential impact of a failure to protect and maintain our data and systems could lead to significant business disruption,reputational damage and in the case of a loss of personal data,potentia

305、l prosecution.This also applies to any failure to protect the Groups IT systems and data from viruses,cyber invasive threats,corruption or sabotage.1234Risk mitigationsKey actions in 2023/24 All critical business systems have third-party maintenance contracts in place and those systems are industry

306、standard retail business systems.IT investments and budgets are reviewed and approved at Board level.IT security is monitored at Board level and includes third-party penetration testing and up-to-date security software.The Group has a disaster recovery strategy and plan in place for all of our key s

307、ystems.Significant decisions for the business are made by the Group or operational boards with robust IT controls and segregation of duties enforced.Continued tightening of the Groups cyber posture with introduction of common Group-wide security standards and security platform.Ongoing investment in

308、the Groups technology replacement cycle ensuring hardware and software remains within support.Disaster recovery approach continues to be enhanced with upgrades to back-up,network and testing implemented during the year.28B&M European Value Retail S.A.Annual Report and Accounts 20248Key management re

309、lianceDescription and potential impactStrategic priorityChangeThe Group is reliant on the high quality and ethos of the executive team as well as strong management and operational teams.There is a risk that a lack of succession planning for senior colleagues could impact the overall performance of t

310、he business.1234Risk mitigationsKey actions in 2023/24 Key senior and operational management are appropriately incentivised through bonus and share option arrangements to retain talent.The composition of the executive team is kept under constant review to ensure that it has the necessary resources a

311、nd skills to deliver the Groups plans.The Nomination Committee has developed succession plans for the Board of Directors and key senior operational management resourcing positions.It also reviewed the wider senior management resourcing needs of the Group.Succession planning has been regularly review

312、ed by the Nomination Committee throughout the year ensuring succession plans for key senior management through to executive positions.The Group has continued to develop the senior management teams of its businesses.This has included the appointment of a new General Counsel,ensuring that senior leade

313、rs have exposure at the Board and supporting key executives with external leadership training.9Store expansionDescription and potential impactStrategic priorityChangeThe ability to identify suitably profitable new store locations is key to delivering our growth plans.Failure to identify suitable loc

314、ations in areas targeted for new stores could impact upon store expansion plans and reduce the rate of growth in the business.234Risk mitigationsKey actions in 2023/24 Our CEO actively monitors the availability of retail space with the support of internal and external property acquisition consultant

315、s.The flexibility of the trading format allows us to take advantage of a range of store sizes and locations.Each new store opening is approved by the CEO ensuring that property risks are minimised and that lease lengths are appropriate.Where new locations may impact on existing locations,the canniba

316、lisation effects are estimated and then monitored and measured to ensure that there is an overall benefit to the Group.The Group has continued to proactively screen the market for new location opportunities and to also respond swiftly to enquiries.The market is also monitored for opportunities arisi

317、ng from retailer corporate actions(e.g.insolvencies such as that of Wilko).Sales densities are measured routinely across all three businesses to ensure that new store space sales densities are accretive to the overall Group.The Group continues to review new store opening opportunities in current sto

318、re locations,to replace older generation stores with better quality sites and premises,and via acquisition of adjacent space to expand stores and optimise performance.Principal risks and uncertainties continued29B&M European Value Retail S.A.Annual Report and Accounts 2024Strategic ReportCorporate G

319、overnanceFinancial StatementsViability Statement In accordance with the UK Corporate Governance Code,the Directors have assessed the viability of the Group.This assessment has been based upon the Groups three-year strategic plan(the“plan”)and has taken into account the current position of the Group,

320、the principal risks and uncertainties as detailed on pages 23 to 28 of the Strategic Report and the Groups prospects.We set out our strategic plan on a three-year cycle,which is common practice in the retail sector.We believe this is appropriate as we operate in a competitive retail environment and

321、need to be able to react to changes in retail markets and consumer trends.Given the fast-moving nature of the retail industry and macroeconomic environment,and the lack of long-term contracts and typically rapid investment cycles,the Board believe that forecasting beyond a three-year period is an un

322、productive exercise,and note that this is consistent with the approach of many of our analysts.In making their assessment the Directors considered:the Groups current balance sheet,its strong track record of generating operational cash flows and returns to shareholders and stress testing of the key t

323、rading assumptions within the Groups plan;the Groups published strategy for growth,that encompasses driving UK LFL1 performance,UK new store rollout and the continued growth of Heron Foods and B&M France;the potential impact on the Groups business model,future trading expectations and liquidity of o

324、ne or more of the principal risks set out on pages 23 to 28 occurring in the period;the likely degree and effectiveness of possible mitigating actions in relation to the principal risks;and the Groups debt facilities of 450m in relation to the term loan and revolving credit facility which matures in

325、 March 2029,the high yield bond of 156m remaining outstanding which matures in July 2025 and the two high yield bonds of 250m each maturing in November 2028 and 2030 respectively.Based on discussions with market professionals and the lenders,the Directors have no reason to believe that the Group wou

326、ld not be able to refinance the 156m bond on acceptable terms,however,the Directors have not relied upon this refinancing occurring in reaching their assessment.The stress testing undertaken included the flexing of a number of key assumptions within the three-year plan,namely future revenue growth,i

327、ncluding both LFL1 revenues and revenues from the new store openings,gross margins,operating costs,the impact of interest rates and working capital management,which may be impacted by one or more of the principal risks to the Group.A number of other severe but plausible scenarios were considered by

328、the Board.They included:a decline of 10%of LFL1 annual sales in the Groups main UK trading business,B&M UK,as a result of competition increasing and B&M returning to a pre-pandemic level of sales;a significant decline in the gross margin of the Groups main UK trading business due to higher costs of

329、imported goods arising from commodity price increases,increases in import duties and adverse currency exchange movements;and a range of other severe scenarios which could have a material impact on the Groups main UK trading business,including for example,a major fire at one of its distribution centr

330、es,cyber threats and significant cost inflation.The Board considered the mitigating steps which they would take to protect the Group in the event of any of those scenarios arising,and determined that the following measures would be necessary to protect its cash flow and liquidity:the temporary suspe

331、nsion of dividend payments;limiting capital expenditure to essential maintenance only;and suspension of new store opening programmes.The Board has also considered reverse stress testing to determine the extent to which cash flows would need to deteriorate before fully utilising the Groups funding he

332、adroom.Each of the above scenarios exceed the impacts of principal risks which the Group has encountered in its trading experience to date.Based on the assessment,stress testing and mitigating actions referred to above,the Directors confirm they have a reasonable expectation that the Group will be a

333、ble to continue in operation and meet its liabilities as they fall due over the next three years to 27 March 2027.1.One-year LFL revenues relate to the B&M UK estate only(excluding wholesale revenues)and are based on either 53 week versus.53 week or 14 week versus 14 week comparison periods.They include each stores revenue for that part of the current period that falls at least 14 months after it