Yudu - John Lewis Partnership Annual Report and Accounts 2013

John Lewis Partnership plc annual report and accounts 2013

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 Waitrose John Lewis

2013 2012 2013 2012 2013 2012

Trading performance:

Gross sales growth

– total 9.3% 6.4% 6.7% 8.6% 13.5% 3.0%

– like-for-like(1) 6.2% 2.6% 3.4% 3.6% 10.5% 1.3%

Operating margin(2) 5.3% 5.1% 5.4% 5.1% 7.1% 5.9%

Partnership profit margin(3) 4.8% 4.6%

Gross sales per FTE (£000) 179.2 170.7 198.2 194.2 165.3 150.3

Operating profit per FTE (£000) 8.7 7.7 10.1 9.4 9.5 7.1

Number of stores(4) 329 307 290 272 39 35

Average selling space (m sq ft)(5) 9.7 9.1 5.2 4.9 4.5 4.2

Gross sales per selling sq ft (£) 982 963 1,111 1,100 835 801

Operating profit per selling sq ft (£) 47 43 56 53 48 38

Cash flow and liquidity:

Operating cash flow before

Partnership Bonus (£m) 979.0 759.1

Capital expenditure (£m)(6) 376.9 517.8

Interest cover(7) 4.0 3.8

Balance sheet:

Net assets (£m) 1,901.5 2,008.9

Net debt (£m) 371.9 577.3

Gearing(8) 19.6% 28.7%

Return on invested capital(9) 8.2% 7.2%

(1) Like-for-like sales is a measure of year-on-year same stores growth and excludes the impact of branch openings and closures.

(2) Operating margin is operating profit expressed as a percentage of revenue.

(3) Partnership profit margin is profit before Partnership Bonus and tax expressed as a percentage of revenue.

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

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

(6) Capital expenditure for the group includes £34.4m (2012: £42.8m) of spending on group-wide information technology systems, vehicles, properties and other assets, not allocated to the operating businesses.

(7) 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 leave, and IAS 39 fair value adjustments included within net finance costs.

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

(9) 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.