04 John Lewis Partnership plc Annual Report and Accounts 2016 Our 2015/16 performance…


So, how did we do in 2015/16?


We made a profit before Partnership Bonus, tax and exceptional items of £306m.


Compared to last year, this was down by 9.3% (10.9% on a 53-week basis). Our gross sales were up, but so were our costs. Page 30 >


How did our businesses perform?


Both Waitrose and John Lewis gained market share in challenging markets.


Waitrose opened 12 branches with gross sales up 1.1% and like-for-like sales (excluding petrol) down 1.3%. Operating profit was down 0.8%.


John Lewis sales were 17.3% up online and


1.0% down in store, with overall like-for-like sales up 3.1% and operating profit up 0.2%.


gross sales 2.5%


profit 9.3%


£306m Profit before Partnership Bonus,


tax and exceptional items down 9.3% 2015: £343m


We made an exceptional profit of £129.3m on the sale of Clearings – a property in central London. As with all equivalent exceptional gains and losses, this was not factored into the level of Bonus.


Did pensions affect our profit this year?


Yes. A lower net discount rate on 31 January 2015 compared to a year earlier resulted in a £48m higher pension cost compared to 2014/15. While this is not ‘cash out the door’,


it serves as a reminder of the cost of meeting our pension promises to current Partners.


The pension deficit for past promises reduced as the net discount rate rose during 2015/16.


Page 31 > £942m


Pensions deficit at 30 January 2016 down 24.6% 2015: £1,249m


Are there any financial reporting issues


affecting our results? We recorded a significant one-off profit on


disposal of our Clearings property. We have ensured that our accounting and disclosure


for supplier rebates are appropriate. We also have to review the value of our shops.


In 2015/16, we recorded a charge of £5.7m against the value of our Waitrose shops.


£5.7m


Impairment charge 2015: £10.3m


What did all that mean for my Bonus?


Lower reported profits meant a lower Boer Bonus, but there is no exact relationship as tas the Board also has to decide how much s oud be retained for future investment and paying down debts (like the pension de before judging how much to distribute to Partners.


shoulld deficit)


We incurred operating costs for pensions of £245m compared to £191m* last ye Pensions and Partnership Bonus areare our two biggest benefits, after paypay. When taken together, their cost grew 12.4%*


year. st compared to last yearear. *


Excluding exceptional items Page 3 >


£145m


Partnership Bonus, 10% of salar 2015: £156.2m, 11% of salary


ary s,


Our two businesses became increasingly interdependent, with 70% of John Lewis


Click & collect orders delivered to Waitrose stores to be picked up by customers.


Excluding the higher pension costs arising from volatility in the market-driven assumptions and property profits, Partnership profit rose by 7%.


Pages 30 to 41 > £233m Operating profit* up 3.9% 2015: £227m £249m Operating profit*


up 0.7% 2015: £248m * excluding property profits


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