ANNUAL REPORT & ACCOUNTS - Next Plc

ANNUAL REPORT & ACCOUNTS

JANUARY 2020

CONTENTS

Strategic Report

3 Chief Executive's Review 54 Business Model 56 Key Performance Indicators 58 Risks and Uncertainties 65 Viability Assessment 66 Corporate Responsibility 73 Section 172 Statement

Financial Statements

Group Financial Statements 132 Consolidated Income Statement 133 Consolidated Statement of

Comprehensive Income 134 Consolidated Balance Sheet 135 Consolidated Statement of Changes

in Equity 136 Consolidated Cash Flow Statement 137 Group Accounting Policies 149 Notes to the Consolidated

Financial Statements

Parent Company Financial Statements 194 Parent Company Balance Sheet 195 Parent Company Statement of

Changes in Equity 196 Notes to the Parent Company

Financial Statements

Governance

80 Directors' Biographies 82 Directors' Responsibilities

Statement 83 Corporate Governance Report 90 Nomination Committee Report 91 Audit Committee Report 96 Remuneration Report 122 Directors' Report 124 Independent Auditor's Report

Shareholder Information

199 Half Year and Segment Analysis 200 Five Year History 201 Glossary 204 Notice of Meeting 216 Other Shareholder Information

FINANCIAL HIGHLIGHTS

TOTAL SALES* APM

Underlying continuing business

Jan 20

Jan 16 Jan 17 Jan 18 Jan 19

+3.3%

Strategic Report

?4.1bn ?4.1bn ?4.1bn ?4.2bn ?4.4bn

Governance

Financial Statements

PROFIT BEFORE TAX APM

Underlying continuing business

Jan 16

Jan 17

Jan 18

Jan 19

Jan 20

+0.8%

?821m ?790m ?726m ?723m ?729m

EARNINGS PER SHARE APM

Underlying

+5.6% Jan 16 Jan 17

Jan 20 Jan 19

Jan 18

Shareholder Information

442.5p 441.3p 416.7p 435.3P 459.8p

FINANCIAL HIGHLIGHTS ON STATUTORY BASIS

Jan 20

Total revenue (?bn)

4.3

Profit before tax (?m)

749

Earnings per share (p) 472.4

Jan 19 4.2 734

441.7

*Total sales are VAT exclusive sales and include the full value of commission-based sales and interest income (refer to Note 1 to the financial statements)

Sales, profit and EPS figures for Jan 16 are shown on a comparable 52 week basis

APM Alternative Performance Measure

1

STRATEGIC REPORT

3 Chief Executive's Review 54 Business Model 56 Key Performance Indicators 58 Risks and Uncertainties 65 Viability Assessment 66 Corporate Responsibility 73 Section 172 Statement

2

Strategic Report

Governance

Financial Statements

FINANCIAL HEADLINES

NEXT Brand full price sales1 were up +4.0% and Brand total sales2 (including markdown sales) were up +3.5% on last year. Group profit before tax was up +0.8% and Earnings Per Share (EPS) were up +5.6% on last year. Group profit of ?728.5m was just ahead of the guidance of ?727m given in our January 2020 Trading Statement due to better than expected full price sales in January.

TOTAL SALES ?m Online Retail Finance Brand Other3 Total Group sales

Jan 2020 2,146.6 1,851.9 268.7 4,267.2 94.6 4,361.8

Jan 2019 1,918.8 1,955.1 250.3 4,124.2 96.7 4,220.9

+11.9% - 5.3% +7.3% +3.5%

+3.3%

PROFIT ?m and EPS (excluding IFRS 16) Online Retail Finance (after funding costs)4 Brand Other5 Recharge of interest to Finance4 Operating profit Net external interest Profit before tax Taxation Profit after tax Earnings Per Share

Jan 2020 399.6 163.9 146.7 710.2 25.6 36.3 772.1 (43.6) 728.5

(134.6) 593.9

459.8p

Jan 2019 352.6 212.3 127.3 692.2 35.8 34.0 762.0 (39.1) 722.9

(132.5) 590.4

435.3p

+13.3% - 22.8% +15.3%

+2.6%

+1.3% +0.8%

+5.6%

Statutory sales were up +2.4% and profit before tax, including the effect of IFRS 16, was up +2.0%.

STATUTORY BASIS ?m and EPS Sales Profit before tax Profit after tax Earnings Per Share

Jan 2020 4,266.2 748.5 610.2 472.4p

Jan 2019 4,167.4 733.6 599.1 441.7p

+2.4% +2.0% +1.9% +7.0%

The financial information in pages 5 to 49 do not reflect the impact of IFRS 16, Leases. The impact of IFRS 16 is provided in Appendix 1 on page 50 and Note 32 of the financial statements.

1 Full price sales are VAT exclusive sales, excluding items sold in our mid-season, end-of-season Sale events and our Clearance operations. These are not statutory sales (refer to Note 1 of the financial statements).

2 Total sales are VAT exclusive sales including the full value of commission based sales (refer to Note 1 of the financial statements).

3 Other sales include NEXT Sourcing external sales, Franchise, Lipsy non-NEXT sales and external Property income. 4 Finance profit for January 2019 has been restated to reflect a change in the calculation of funding costs. See page 32. 5 Other profit includes NEXT Sourcing, Franchise, Lipsy and Property management.

Shareholder Information

3

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