John Lewis Partnership plc annual report and accounts 2012

Business review Review of performance (continued)

Key performance indicators (KPIs)

 Across the Partnership we focus on a number of KPIs in order to identify trends in the trading performance of both Waitrose and John Lewis. These KPIs are designed to help us understand how we are using our assets and measuring operational performance.

Group  2012 Waitrose 2012 John Lewis 2012 Group 2011 Waitrose 2011 John Lewis 2011

Trading performance:

 Gross sales growth

– total continuing operations 6.4% 8.6% 3.0% 10.6% 9.8% 11.9%

– like-for-like(1) 2.6% 3.6% 1.3% 6.4% 4.0% 10.0%

Growth in sales excluding VAT

– total continuing operations 5.4% 7.9% 1.0% 9.2% 8.9% 9.7%

– like-for-like(1) 1.6% 3.0% (0.6)% 5.1% 3.3% 7.9%

Operating margin(2) 5.0% 5.1% 5.7% 5.8% 5.8% 7.2%

Sales excluding VAT per selling

FTE (£000s) 211.7 163.2 214.1 157.1

Operating profit per FTE (£000s)(2) 7.7 9.4 7.1 8.9 10.8 9.0

Number of stores(3) 272 35 243 32

Average selling space (m sq ft)(4) 9.1 4.9 4.2 8.6 4.6 4.0

Sales excluding VAT per

selling sq ft (£) 867 1,033 672 873 1,032 691

Operating profit per selling

sq ft (£)(2) 43 53 38 50 60 50

Cash flow and liquidity:

Operating cash flow before

Partnership bonus (£m) 759.1 745.1

Capital expenditure (£m)(5) 517.8 292.6 182.4 492.7 354.0 119.5

Interest cover(6) 3.8 3.8

Balance sheet:

Net assets (£m) 2,008.9 2,072.8

Net debt (£m) 577.3 548.4

Gearing(7) 28.7% 26.5%

Return on invested capital(8)  7.2% 7.9%

(1) Like-for-like sales exclude the impact of branch openings and closures.

(2)Operating margin is expressed as a % of sales excluding VAT.

(3)The number of stores trading as at the year end date.

(4)Average selling space (of all stores and branches) includes all customer facing areas and excludes offices, warehouse space and staff facilities.

(5)Capital expenditure for the group includes £42.8m (2011: £19.2m) of spending on group-wide information technology systems, vehicles, properties and other assets, not allocated to the operating businesses.

(6)Interest cover is profit before net finance costs and tax, after Partnership bonus, divided by net finance costs excluding the financing element of pensions and long service leave, and IAS 39 fair value adjustments included within finance costs.

(7) Gearing is net debt divided by net assets.

(8) Return on invested capital is post tax profit, adjusted for non-operating items, as a proportion of average operating net assets, adjusted to reflect a deemed capital value for property lease rentals.

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