Share Name Share Symbol Market Type Share ISIN Share Description
B&m European Value Retail S.a. LSE:BME London Ordinary Share LU1072616219 ORD 10P (DI)
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  2.80 0.47% 597.40 595.20 595.40 601.60 592.60 597.40 4,010,972 16:35:02
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
General Retailers 4,801.4 525.4 42.8 14.0 5,974

B&M European Value Retail S.A. Annual Financial Report

21/06/2021 7:00am

UK Regulatory (RNS & others)

B&m European Value Retail (LSE:BME)
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RNS Number : 4390C

B&M European Value Retail S.A.

21 June 2021

21 June 2021

B&M European Value Retail S.A.

(the "Company")

Annual Report & Accounts 2021 and Notice of Annual General Meeting

B&M European Value Retail S.A. (the "Company"), the UK's leading variety goods value retailer, announces that it has posted to shareholders today the Company's Annual Report and Financial Statements for the year ended March 2021 and the Notice of Annual General Meeting of the Company. The Annual General Meeting will be held at 5 , Rue Goethe, L-1637 Luxembourg, Grand-Duchy of Luxembourg on Thursday 29 July 2021 at 12:00 noon (CEST).

In accordance with Listing Rule 9.6.1R, copies of the following documents have been submitted to the National Storage Mechanism and will be available shortly for inspection at https://data.fca.org.uk/#/nsm/nationalstoragemechanism and c opies of them are also available on the Company's website in the investors section on the following page www.bandmretail.com/investors/agm.aspx

-- A nnual Report and & Accounts 2021;

-- Notice of Annual General Meeting 2021;

-- Proxy Form; and

-- Electronic Communications Letter.

In accordance with Disclosure and Transparency Rule 6.3.5R (DTR 6.3.5R) and the requirements which it imposes on how to make public annual financial reports, the following information in Appendix 1 to this announcement is extracted from the Annual Report & Accounts 2021 and should be read in conjunction with the Company's preliminary results announcement for the year ended 27 March 2021 which was issued on 3 June 2021 and contained the Company's preliminary consolidated financial statements, information on important events that have occurred during the financial year and their impact on the financial statements, details of related party transactions and the statement of directors' responsibilities. That information (a copy of which is available on the Company's website at www.bandmretail.com ) together with the information set out in Appendix 1 below, constitutes the material required by DTR 6.3.5R to be communicated to the media in unedited full text through a Regulatory Information Service. This announcement is not a substitute for reading the Annual Report & Accounts 2021 in its entirety. Page references in the text below refer to page numbers in the Annual Report & Accounts 2021.


B&M European Value Retail S.A.

For further information please contact +44 (0) 151 728 5400

Simon Arora, Chief Executive

Alex Russo, Chief Financial Officer



For media please contact +44 (0) 207 379 5151

Sam Cartwright, Maitland



The principal risks and uncertainties relating to the Company are as set out in pages 24 to 31 inclusive of the "Principal risks and uncertainties" section of the Annual Report & Accounts 2021.

The following is extracted in full and unedited text from the Annual Report & Accounts 2021 and is repeated here solely for the purpose of complying with DTR 6.3.5R.


The following principal risks and uncertainties could have an impact on our business model and strategy. Mitigating steps aimed at managing and reducing those impacts are being employed by the Group as summarised below.

The Group's risks and mitigations are reviewed as part of the oversight of the system of internal controls by the Audit & Risk Committee. They are reported on to the Board, which takes overall responsibility for risk management of the Group.

The Group's Internal Audit function assesses the on-going business risks of the Group. It reports on the effectiveness of internal control procedures to the Audit & Risk Committee. In assessing risk it considers the Group's risk mitigating actions and provides recommendations to management to improve business processes and limit their exposure to risk.

The Group's approach to reviewing risk appetite is part of an annual risk management cycle, which is used to drive and inform actions in relation to the principal risks identified by the Board. As part of that process the Group's appetite for risk is defined with reference to the expectations of the Board for both commercial opportunity and internal control. It is then used for setting the Group's internal audit plan each year.

 Category of risk   Tolerance 
  Strategic          Medium 
  Financial          Low to medium 
  Operational        Low 
  Compliance         Extremely low 

Risk management evaluation

The Group's executive management are responsible for identifying and evaluating new and emerging risks and mitigating actions.

The Audit & Risk Committee, together with the support of the Group's Internal Audit department and the Group's General Counsel, is responsible for monitoring risks and mitigating actions and reporting any matters of concern to the Board.

The Board is responsible for overseeing risk management of the Group. It considers the recommendations made by the Audit & Risk Committee and determines the framework of the type of controls and mitigating steps which are to be implemented. That evaluation of risk and controls is carried out in the context of how those risks could impact the overall objectives of the Group.

The implementation of processes and controls in relation to the management of risk is delegated by the Board to the executive and operational senior management of the UK and French businesses.

Group Internal Audit reports to the Audit & Risk Committee at each of its meetings during the year on the progress of management's implementation of recommended actions to mitigate risks.

Principal risks

Covid-19 was added by the Board originally as a new principal risk in 2019/20 and it continues to remain a principal risk but the overall impact of it to B&M as a retailer of essential goods has reduced. The UK's exit from the EU and credit risk and liquidity are no longer principal risks of the Group. Otherwise none of the other principal risks included in the 2019/20 financial year have been removed and no new ones have been added.

Assessment of risks

An assessment is made by the Board of the likelihood or probability of a risk occurring and the impact of the risk after taking account of mitigating factors and controls. The assessment of that is set out in the heat map opposite.

The heat map indicates the Board's view of the likely degree of impact of each risk after taking into account the risk mitigations referred to in the principal risks table below.

Principal risks table

The table below describes (i) the main risk exposures identified by the Board in relation to our Group businesses, (ii) the mitigating factors which relate to how the Group manages each of the risk exposures, and (iii) the linkage between the business strategy and the relevant risk exposures. The group also summarises (where relevant) key actions arising in the year in relation to how the Group has addressed certain aspects of those risks. The Group has also indicated where there were any changes in the profile of any of the risks, which reflects the Board's view of the current trend in relation those risks.

The risks set out in the table are not an exhaustive list. They represent the main risks to the Group in relation to the period under review and also currently, in the opinion of the Board.

Link to strategy key

A Delivering great value to our customers

B Investing in new stores

C Developing our international business

D Investing in people and infrastructure

Risk change key

Ý Increased risk

- No change

Þ Decreased risk

  1 Covid-19 
Description & potential impact                                     Strategic Priority Change 
Prolonged social restrictions due to the coronavirus or any         A B C D Þ 
reoccurrence of it in the UK, 
France or China could impact consumer demand, supply chains, 
the ability of colleagues to 
work and our stores continuing to operate at expected levels of 
profitability. It could also 
affect the timing of new store openings in relation to 
completion of works by contractors. 
---------------------------------------------------------------    ----------------------------------------------------------- 
Risk Mitigations                                               Key Actions in 2020/21 
 *    The categories of goods which the B&M UK and Heron         *    From the early stages of the coronavirus restrictions 
      Foods businesses sell are essential goods within the            taking effect in China, contingency plans were put in 
      UK Government guidelines.                                       place by the B&M UK business in FY20 and which 
                                                                      continued in FY21 in order to protect our supply 
                                                                      chain (as referred to below under the key actions in 
 *    Implementation of social distancing steps in                    relation to Supply Chain risk) which protected the 
      accordance with UK Government guidance and other                business from any material disruption to supplies, 
      measures for colleagues and customers at stores and             costs or prices, with those risks having been managed 
      in our supply chain.                                            and offset by stock cover held in our UK Distribution 
                                                                      Centres of c.12 weeks cover for general merchandise 
 *    Maintaining sufficient liquidity for our on-going 
                                                                 *    From the early stages of the coronavirus restrictions 
                                                                      taking effect in the UK in the FY20 and FY21, the B&M 
 *    Maintaining (i) flexibility in our distribution                 UK business also increased the volume of orders of 
      network and with suppliers to cope with additional              Grocery and FMCG goods to keep pace with increased 
      demand in relation to FMCG items, and (ii) controls             demand for those items during peak periods. The UK 
      of orders of lines where demand has slowed to protect           business reacted quickly by re-deploying colleagues 
      against over-stocking in certain categories.                    in our Distribution Centres to prioritise the picking 
                                                                      of those goods to replenish stores as quickly as 
                                                                      possible to meet customer requirements. 
                                                                 *    Measures were initially taken to temporarily close 49 
                                                                      B&M UK smaller format town centre or precinct 
                                                                      location stores for a period of 4 weeks only before 
                                                                      they were re-opened as there was no negative overall 
                                                                      impact on trading across the B&M UK business. 
                                                                 *    Our French business was required to close all its 
                                                                      stores for period from 15 March 2020 to 11 May 2020 
                                                                      under the French Government lockdown restrictions. 
                                                                      There have also been other periods where the stores 
                                                                      have been restricted to selling only limited 
                                                                      categories of goods. In November 2020 Babou 
                                                                      implemented a click and collect service from stores 
                                                                      to enable customers to continue to access goods by 
                                                                      pre-ordering them on-line. 
                                                                 *    The Group introduced flexible working arrangements in 
                                                                      its businesses during the year to support colleagues 
                                                                      in relation to working hours and homeworking 
-----------------------------------------------------------    --------------------------------------------------------------- 
2 Supply chain 
Description & potential impact                                     Strategic Priority Change 
Imported goods from China represent a significant proportion of     A Þ 
the Group's general merchandise 
products. Lead time delays in the supply chain could result in 
lower sales and potential loss 
of margin through higher markdowns. Disruption to the supply 
chain arising from civil unrest, 
natural disasters, diseases and pandemics, ethical trading 
issues or quality standards failures 
could impact our trading performance and brand reputation. 
---------------------------------------------------------------    ----------------------------------------------------------- 
Risk Mitigations                                               Key Actions in 2020/21 
 *    The Group has an experienced sourcing team which is        *    As referred to above in relation to the Covid-19 risk 
      responsible for maintaining an efficient and                    above, when the coronavirus impacted factories and 
      effective supply chain.                                         ports in China contingency plans were put in place 
                                                                      initially to source supplies of products from other 
                                                                      countries and regions were that to have become 
 *    A range of alternative supply sources are maintained            necessary. As we had a stock cover in the B&M UK 
      across the product categories and we are not                    business of c.10 weeks on general merchandise 
      over-reliant on any one single supplier.                        imported goods, there was a very limited impact 
                                                                      arising and limited recourse only was made to our 
                                                                      contingency plans. 
 *    The Group has anti-bribery & corruption and modern 
      slavery & human trafficking policies in place in 
      relation to its supply chain. 
 *    A combination of individual buyers and sourcing agent 
      employees conduct supplier factory visits. 
-----------------------------------------------------------    --------------------------------------------------------------- 
3 Competition 
Description & potential impact                                     Strategic Priority Change 
The Group operates in highly competitive retail markets in the      A C D - 
UK and France which could materially 
impact the Group's profitability, share price and limit growth 
---------------------------------------------------------------    ----------------------------------------------------------- 
Risk Mitigations                                               Key Actions in 2020/21 
  *    Continuous monitoring of competitor pricing and           *    The Group has continued to maintain its strict SKU 
       product offering.                                              count discipline within product ranges, which enables 
                                                                      it to react quickly to ever changing consumer tastes, 
                                                                      trends and buying habits. 
  *    Development of new product ranges within the product 
       categories to identify new market opportunities and 
       target new customers.                                     *    The Group commissioned a customer insight survey to 
                                                                      measure our strengths and weaknesses against our 
                                                                      competitors, to provide management with indicators of 
                                                                      where the Group can improve our competitive edge 
                                                                      relative to our peer group and other discount 
                                                                      retailers. It is our intention to repeat that 
                                                                      exercise or conduct similar testing each year so the 
                                                                      Group can track progress against each of the 
                                                                      indicators and outputs from those surveys. 
                                                                 *    As an essential retailer, the business has continued 
                                                                      to operate throughout the pandemic and prioritise the 
                                                                      stocking and replenishment of goods at stores which 
                                                                      have been in the highest demand at peak times during 
                                                                      spikes in the pandemic to ensure that we have kept 
                                                                      customers supplied with goods they most want. We have 
                                                                      ensured that our stock picking at warehouses and 
                                                                      stock ordering from suppliers was carefully planned 
                                                                      to facilitate this through our supply chain 
                                                                      throughout the year. 
-----------------------------------------------------------    --------------------------------------------------------------- 
4 Economic environment 
Description & potential impact                                     Strategic Priority Change 
A reduction in consumer confidence could impact upon customer       A B C D - 
spending and subsequently revenue 
and profitability, as a result of the prevailing macroeconomic 
conditions in the markets in 
which we operate. 
---------------------------------------------------------------    ----------------------------------------------------------- 
Risk Mitigations                                               Key Actions in 2020/21 
 *    We offer a range of products and price points for          *    In light of the initial uncertainty in relation to 
      consumers which allows them to trade up and down.               consumer confidence following Brexit and the impacts 
                                                                      of the pandemic, the Group has continued to ensure 
                                                                      that we remain focused on only stocking the top 
 *    We maintain a low cost business model that allows us            best-selling lines across our ranges. We have 
      to maintain our selling prices as low as possible.              continued to work hard to ensure our stores have all 
                                                                      of our top 100 best-selling products ready on the 
                                                                      shelves on a daily basis. 
 *    We have an effective forecasting process that enables 
      actions to be undertaken reflecting economic 
-----------------------------------------------------------    --------------------------------------------------------------- 
5 Regulation and compliance 
Description & potential impact                                     Strategic Priority Change 
The Group is subject to a range of regulatory and legislative       C D - 
requirements, including those 
relating to the importation of goods, anti-bribery and 
corruption, anti-modern slavery, anti-tax 
avoidance & evasion, health & safety, employment law, general 
data protection regulation ("GDPR"), 
control of pollution and contamination to the environment, the 
Listing Rules, Transparency 
laws and regulations and the Groceries Supply Code of Practice 
(the "Groceries Code"). The 
impact of failure to comply with laws and regulations could 
lead to financial penalties and 
significant reputational damage. 
---------------------------------------------------------------    ----------------------------------------------------------- 
Risk Mitigations                                               Key Actions in 2020/21 
 *    The Group has a number of policies and codes,              *    The B&M UK business has created and launched an 
      including a code of conduct which incorporates an               e-learning portal for GDPR training for colleagues to 
      anti-bribery & corruption policy, which outlines the            make it easier refresh their training during each 
      mandatory requirements we apply to our business. Our            year. It is intended to roll-out the e-learning 
      codes and policies are communicated to staff along              platform to other areas of mandatory training over 
      with our employee handbook which is made available to           time once colleagues are familiar with using the 
      everyone joining the business.                                  portal. This will reduce the amount of paper based 
                                                                      process required and created a more flexible way for 
                                                                      colleagues to carry out some of their training needs. 
 *    Management are responsible for liaising with the 
      Group's General Counsel (and external advisors where 
      required) to ensure that we identify and manage            *    Our Groceries Code Compliance Officer and Internal 
      compliance with all applicable new legislation and              Audit team have actively engaged during the year with 
      regulations which apply to us in Luxembourg, the UK             the Groceries Code Adjudicator ("GCA") in conference 
      and France. Changes in legal and regulatory matters             call discussions during the year. This has helped to 
      (including those arising from Brexit) are monitored             develop a close and constructive working relationship 
      closely on a regular basis by the Group's General               and dialogue with the GCA as the oversight body in 
      Counsel, who provides reports on new regulatory                 relation to compliance with the Groceries Code, in 
      developments directly to the Board as well as its               relation to our action plans and follow-up work 
      Committees and Executive Management. The Internal               during the year. 
      Audit function of the Group includes assurance 
      testing and auditing of the Group's implementation of 
      new areas of regulatory compliance.                        *    In relation to the environment, emissions and 
                                                                      sustainability our UK business has continued to 
                                                                      invest in initiatives to reduce its carbon footprint 
 *    We have a whistle-blowing procedure and policy which            with: (i) continuing to invest in our c.234 Heavy 
      allows colleagues to confidentially report any                  Goods Vehicles which are all Euro VI emissions 
      concerns or inappropriate behaviour within our                  standard engine trucks, being the highest standard of 
      business.                                                       fuel efficient engines for managing levels of 
                                                                      emissions, and (ii) the addition of our Bedford 
                                                                      distribution centre in the later part of FY20 for 
 *    In relation to anti-modern slavery and other                    deliveries in the South of the UK, has begun to lead 
      standards relating to human rights within our supply            to significant reductions in miles travelled for 
      chain, the Buying teams are charged with ensuring               deliveries to our stores in the South of England. 
      that every supplier is required to adhere to our 
      Workplace Policy standards. 
 *    The Company has a Group-wide GDPR policy. Our privacy 
      policies, processes in relation to data subject 
      rights requests, privacy notices given to all our 
      colleagues, and privacy notices for users of our 
      websites and subscribers to our on-line mailing lists 
      are reviewed to ensure they are GDPR compliant. 
 *    Our Groceries Code compliance programme includes 
      guidance and training for colleagues, monitoring of 
      compliance, reporting of potential non-compliance 
      issues, dispute resolution procedures and a Code 
      Compliance Officer who oversees compliance and the 
      resolution of code related issues with suppliers in 
      the event of escalation being necessary or required 
      by a supplier. Oversight of our compliance with the 
      Grocery Code is carried out by management and 
      reviewed by the Audit & Risk Committee as a standing 
      agenda item at each of the meetings of that committee 
      throughout each year. 
-----------------------------------------------------------    --------------------------------------------------------------- 
6 International expansion 
Description & potential impact                                     Strategic Priority Change 
Developing our businesses in our new market territories is          C Þ 
important to the Group's strategic 
plans. Expanding into new markets creates additional challenges 
and risks which could impact 
the overall performance of the Group, its growth and 
---------------------------------------------------------------    ----------------------------------------------------------- 
Risk Mitigations                                               Key Actions in 2020/21 
 *    The Group has significant international retail             *    We continued to strengthen the senior management team 
      experience on our main Board.                                   of our French business, Babou, during the year and 
                                                                      appointed a new CEO in May 2021. This has enabled us 
                                                                      to restructure the senior leadership team to focus 
 *    The Group will continue to support the development of           those resources on the key operational functions of 
      the experienced senior leadership teams in France in            the business. In particular this has allowed the 
      key operational areas.                                          Trading Director of Babou to devote his time 
                                                                      exclusively on leading the buying operations of the 
                                                                      business going forward, with other areas which had 
 *    The Group assesses markets in which the business                previously been covered by him being transferred to 
      operates in or expand into, to ensure they are                  the CEO of that business. 
      appropriate for value retailing and that product 
      ranges are developed and selected by local buying 
      teams along with access to leverage from the Group's       *    The Group is monitoring the Babou stores which have 
      supply chain.                                                   been converted B&M fascia and format to track their 
                                                                      performance and make any necessary adjustments to 
                                                                      product ranges as we evolve and refine the ranges in 
 *    Continuing to invest in both the infrastructure and             response to the demand and tastes of French 
      technology of our French business.                              customers. 
                                                                 *    Babou has implemented a new click and collect service 
                                                                      in FY21 across the majority of its stores. This has 
                                                                      been particularly helpful for customers during the 
                                                                      pandemic in relation to remote shopping. 
-----------------------------------------------------------    --------------------------------------------------------------- 
7 Warehouse infrastructure 
Description & potential impact                                     Strategic Priority Change 
The loss of one of our distribution centres or failure to           B D - 
maintain and invest in our warehousing 
and transport infrastructure as the business continues to grow 
its store portfolio, could 
materially impact short/medium term trading and the 
profitability of the business. 
---------------------------------------------------------------    ----------------------------------------------------------- 
Risk Mitigations                                               Key Actions in 2020/21 
 *    Forward plans have been implemented for additional         *    The JDA Warehouse Management System is now live and 
      warehousing capacity to support our new store opening           rolled-out within all our main UK Distribution 
      programme. The Group in the UK has six separate                 Centres and an upgrade to the existing generation of 
      distribution centres (having added Fort this year and           the software is due to be implemented in FY22. 
      closed an older distribution centre in Blackpool). 
      The additional distribution centre in Fort, which 
      serves as a hub to support our expansion in the South      *    The vast majority of product SKU's now have a dual 
      of England, is now in full operation.                           locations with our UK Distribution Centre estate, so 
                                                                      in the short term if a Distribution Centre was out of 
                                                                      operation our stores can continue to be serviced with 
 *    The Group maintains adequate business interruption              the full range of product SKU's by the rest of the 
      and increased cost of working insurance in the event            Distribution Centres without significant 
      of a loss of a distribution centre(s).                          replenishment delays. 
                                                                 *    B&M's UK business have access to container storage 
                                                                      yards in the north and the South of England, allowing 
                                                                      greater flexibility for re-routing stock to other 
                                                                      Distribution Centres at short notice if a 
                                                                      Distribution Centre was carrying a surplus or was out 
                                                                      of operation. 
-----------------------------------------------------------    --------------------------------------------------------------- 
8 IT systems, cyber security and business continuity 
Description & potential impact                                     Strategic Priority Change 
The Group is reliant upon key IT systems, and disruption to         D - 
those would adversely affect business 
operations including those at the distribution centres and 
stores. The potential impact of 
a failure to protect and maintain our data and systems could 
lead to significant business 
disruption, potential prosecution and also reputational damage. 
This also applies to any failure 
to protect the Group's IT systems and data from viruses, cyber 
invasive threats, corruption 
or sabotage. 
---------------------------------------------------------------    ----------------------------------------------------------- 
Risk Mitigations                                               Key Actions in 2020/21 
 *    All critical business systems have third party             *    The Group completed the roll-out of its card payment 
      maintenance contracts in place and those systems are            encryption system with Worldpay across all the B&M UK 
      industry standard retail business systems.                      fascia stores by the end of June 2020. This enhances 
                                                                      the IT cyber security and PCI controls in relation to 
                                                                      processing card transactions. The roll-out has been 
 *    IT investments and budgets are reviewed and approved            extended across the Heron Foods stores in FY21 also. 
      at Board level. 
                                                                 *    The B&M fascia business has also implemented a Cloud 
 *    The Group has a disaster recovery strategy and plan             Security Platform and Advanced Malware Protection to 
      in place for all of our key systems.                            improve email and web cyber security. 
 *    The Group has an on-going Payment Card Industry            *    A phased programme of improvements and upgrades to IT 
      compliance strategy.                                            systems and infrastructure over the next 3 years from 
                                                                      FY22 has been approved by the Board with the Group's 
                                                                      IT Director to bring enhancements to our core systems 
 *    IT security is monitored at Board level and includes            as we continue to grow at a significant rate. 
      penetration testing and up-to-date security software. 
 *    Significant decisions for the business are made by 
      the Group or operational boards with segregation of 
      duties enforced on key business processes, such as 
      the payables process, and a robust IT control 
      environment is in place. 
-----------------------------------------------------------    --------------------------------------------------------------- 
9 Commodity prices/cost inflation 
Description & potential impact                                     Strategic Priority Change 
Escalation of costs within the supply chain arising from            A Ý 
factors such as increases in raw 
material and wage costs. Additionally, increased fuel and 
energy costs could impact upon distribution, 
logistics and store overheads. 
---------------------------------------------------------------    ----------------------------------------------------------- 
Risk Mitigations                                               Key Actions in 2020/21 
 *    Freight rates, energy and currency are forward             *    The Group has freight rate agreements in place with 
      purchased to mitigate against volatility and to allow           freight forwarders for 2021 with set prices for 
      the business to plan and maintain margins.                      several months ahead. 
 *    Wage increases are offset where possible by                *    Energy purchases have also been agreed through an 
      productivity improvements.                                      energy broker until September 2022. 
 *    Forecasts and projections produced by the business         *    The business has created an Energy Manager position 
      include the expected impact of the national living              who is responsible for driving energy improvements 
      wage and therefore the Board's strategic planning               and efficiencies in the B&M UK business store estate. 
      takes account of that.                                          The Energy Manager has trialled a Building Energy 
                                                                      Management System to control energy consumption at 
                                                                      stores more effectively, which we are now looking to 
                                                                      extend to new store openings in FY22. 
-----------------------------------------------------------    --------------------------------------------------------------- 
10 Key management reliance 
Description & potential impact                                     Strategic Priority Change 
The Group is reliant on the high quality and ethos of the           D - 
executive team as well as strong 
management and operational teams. There is a risk that a lack 
of succession planning for senior 
colleagues could impact on the performance overall of the 
---------------------------------------------------------------    ----------------------------------------------------------- 
Risk Mitigations                                               Key Actions in 2020/21 
 *    Key senior and operational management are                  *    The Group has continued to strengthen the senior 
      appropriately incentivised through bonus and share              management teams of its businesses. This has included 
      option arrangements to retain talent.                           (i) the appointment of an Group IT Director reporting 
                                                                      directly to the CFO (ii) the appointment of a Head of 
                                                                      Investor Relations reporting directly to the CFO 
 *    The composition of the executive team is kept under             (iii) the appointment of a Head of Internal Audit 
      constant review to ensure that it has the necessary             reporting directly to the Chair of the Audit 
      resources and skills to deliver the Group's plans.              Committee, (iv) the appointment of a new Group CFO 
                                                                      following the retirement of the previous CFO early 
                                                                      this year, (v) appointment of a Supply Chain Director 
 *    The Nomination Committee develops succession plans              in the B&M UK business following a retirement earlier 
      for the Board of Directors and key senior operational           this year, and (vi) the appointment of a new CEO in 
      management resourcing positions. It also reviews the            the French business strengthening the management team 
      wider senior management resourcing needs of the                 locally in that business. 
-----------------------------------------------------------    --------------------------------------------------------------- 
11 Store expansion 
Description & potential impact                                     Strategic Priority Change 
The ability to identify suitably profitable new store locations     B - 
is key to delivering our growth 
plans. Failure to identify suitable locations in areas targeted 
for new stores could impact 
upon store expansion plans and reduce the rate of growth in the 
---------------------------------------------------------------    ----------------------------------------------------------- 
Risk Mitigations                                               Key Actions in 2020/21 
 *    Our CEO actively monitors the availability of retail       *    The B&M UK business has continued to take steps where 
      space with the support of internal and external                 new store opening opportunities exist in current 
      property acquisition consultants.                               store locations, to replace older generation stores 
                                                                      with better quality sites and premises. That 
                                                                      mitigates the potential effects of cannibalisation 
 *    The flexibility of the trading format allows us to              and also improves the quality and performance of the 
      take advantage of a range of store sizes and                    estate in addition to new store openings in brand new 
      locations.                                                      locations for the business. 
 *    Each new store opening is approved by the CEO 
      ensuring that property risks are minimised and that 
      lease lengths are appropriate. 
 *    Where new locations may impact on existing locations, 
      the cannibalisation effects are estimated and then 
      monitored and measured to ensure that there is an 
      overall benefit to the Group. 
-----------------------------------------------------------    --------------------------------------------------------------- 
12 Stock management 
Description & potential impact                                     Strategic Priority Change 
Ineffective controls over the management of stock could impact      A Þ 
on the achievement of our gross 
margin objectives. Lack of product availability or 
over-stocking could impact on working capital 
and cash flows. 
---------------------------------------------------------------    ----------------------------------------------------------- 
Risk Mitigations                                               Key Actions in 2020/21 
 *    The Group has a highly disciplined limited SKU count       *    The Group has carried out a review of its stock cover 
      throughout our product ranges and effective regular             requirements in advance of FY22 in light of the 
      markdowns on slow moving product lines.                         strong demand in FY21 to ensure that sufficient 
                                                                      ordering is in place to build stock levels to the 
                                                                      normal levels of cover previously. 
 *    Our non-seasonal initial stock orders do not exceed 
      circa 14 weeks of forecast sales and action is 
      undertaken after circa 4 weeks of trading to either 
      repeat the order, refresh the product design or 
      discontinue the product line. 
 *    Consistent levels of stock cover by product category 
      are maintained through regular reviews of open-to-buy 
      process, supported by the disciplined SKU count. 
-----------------------------------------------------------    --------------------------------------------------------------- 

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