Sustainability Leader

Company

Country United Kingdom

Number of Employees 67'100

Web www.marksandspencer.com

Share

Market cap (mil) 7'922

Currency GBP

High 52 week 3.8

Low 52 week 2.6

Last Price 3.5

Key Data 2003 2004E

Sales (mil) 8'019 8'406

EPS 0.24 0.26

P/E Ratio 14.45 13.37

Source: Bloomberg / August 13, 2004

Sales in

Alcohol Yes

Armaments No

Firearms No

Tobacco No

Gambling No

Source: IRRC, SAM Research

Company Description

Marks & Spencer Group p.l.c. (Marks & Spencer) is one of the UK's

largest retailers of women's and men's wear, lingerie and children's

wear. The company's stores also sell food and home ware and

provide financial services. Marks & Spencer serves some 10 million

customers a week in over 375 UK stores. In addition, it has 155

stores managed under franchise and owns 43 stores in 28 territories

mostly in Europe, the Middle East, Asia and the Far East. In the US

the company is present with its supermarket group, Kings Super

Markets. UK Retail accounts for 88% of the group's total turnover.

In order to improve its profitability, Marks & Spencer has

restructured its business in the last three years and has geared its

strategy towards growth in its most important segment - clothing.

The company will also seek to reposition its Home business and to

increase the appeal of its food stores.

Sustainability Performance

The successful execution of the sustainability strategy at Marks

& Spencer positions the company as the leader of the industry.

This is supported by Marks & Spencer's high level of

engagement across all three corporate sustainability dimensions.

Similar to last year, Marks & Spencer is one of the leading

companies in supply chain management. With 90% of clothing

sourced overseas, Marks & Spencer, like other companies, is

highly exposed to supply chain management related risks. The

company's principles and code of practices and initiatives help

prevent breaches of international standards and foster the

well-being of the suppliers' workforce. In the environmental

dimension, Marks & Spencer scores significantly above the

industry average and takes a leading position in Transport and

Logistics, where it is on track to upgrade its entire UK and Eire

distribution fleet to the less polluting Euro III standard. Despite

early recognition, recent criticism about furniture made from

Indonesian wood highlights an area for improvement. The

company intends to tackle this challenge and improve standards

in the sourcing from wood furniture suppliers in the Far East in

2005.

Sustainability Scores

Total Score

0% 50% 100%

Industry Average on a Global Basis

Marks & Spencer p.l.c.

Best Company on a Global Basis within Industry Group

Economic Dimension

0% 50% 100%

Environmental Dimension

0% 50% 100%

Social Dimension

0% 50% 100%

Sustainability Leader

Member of DJSI World & DJSI STOXX

Marks & Spencer p.l.c.

Retail

SAM Research Inc.

Analyst:

Urs Schцn

Tel. +41 1 397 10 39

urs@sam-group.com

© SAM Research Inc. / Aug 31, 2004

Industry Driving Forces

Strong branding is a key success factor in the retail industry and requires companies to implement solid customer relationship

management and adaptability. Consumers, fair trade organizations as well as non-governmental organizations demand transparency on

product sourcing and production methods, thus requiring detailed codes of conduct for suppliers covering social and environmental

aspects. For food products, ensuring food safety along the supply chain is critical to provide consumer confidence. On the operational

level, key issues to address are energy consumption of stores, efficiency of the transport systems, and the use and disposal of packaging

and packaging waste. In addition,