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M&S Reinvesting for Growth 4 NOVEMBER 2026 HALF YEAR RESULTS 1
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2 Stuart Machin CHIEF EXECUTIVE
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Financial headlines Reinvesting for growth on track M&S Group adjusted profit before tax £403.2m up 119%, against £184.1m in the prior year Statutory profit before tax £355.1m, vs £3.4m prior year Food sales up 13.9%; adjusted operating profit of £288.6m, margin of 5.6% Fashion, Home & Beauty sales up 17.5%; adjusted operating profit of £150.5m, margin of 7.5% International sales up 22.1%; adjusted operating profit of £15.3m, margin of 4.9% Adjusting items of £51.7m against £167.8m in the prior year Strong balance sheet position, net funds excluding lease liabilities of £374.7m and cash and short - term investments of £1,072.1m 3
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Our strategic priorities Reinvesting for growth CREATE EXCEPTIONAL PRODUCTS IMPROVE OPERATING MARGINS QUALITY FOOD, STYLISH CLOTHES, HOMEWARE AND BEAUTY Food drumbeat of quality investment and innovation widening family appeal in core categories Fashion perceptions at highest level to date for quality and style ENHANCED TRUSTED VALUE TO DRIVE VOLUME Over £50m annualised invested in value in Food in H1. Stronger value perception relative to market FH&B improved core product availability, stock flow and inventory management. DELIVER PROFITABLE SALES GROWTH STRUCTURALLY LOWER COST BASE Over £120m structural cost savings expected in 2026/27 Absorbed approximately £35m of packaging taxes as well as higher pay and national insurance costs MODERNISED SUPPLY CHAINS Avonmouth and Daventry investment on - track, adding over 30% more Food capacity at a lower cost per case Lichfield warehouse acquisition and new Sheffield returns warehouse will reduce online fulfilment and returns costs BUILD THE M&S WE NEED TO BE HIGH PERFORMANCE, CUSTOMER - CENTRIC CULTURE Relentless customer focus with support centre colleagues working 7 days per year in store Attracting talent, accelerating internal development and fast - tracking progression BETTER DECISIONS AND SERVICE THROUGH TECHNOLOGY Technology investment stepped up in FH&B planning tools and digital capabilities DISCIPLINED CAPITAL INVESTMENT AND ALLOCATION £750m capex programme on track, maintaining a strong investment - grade credit rating Interim dividend increased by 16.7% to 1.4 p BIGGER FREQUENT CUSTOMER BASE, SHOPPING MORE BROADLY 1.5m more Food customers over 2 years, with growth in ‘shopping list’ categories Sparks loyalty programme relaunched ONLINE AND OMNICHANNEL ADVANTAGE M&S Food sales on Ocado up 23%, now 31% of average basket, with Ocado Retail moved into operating profit FH&B FH&B Online participation increases to 35% STORE ROTATION AND RENEWAL 18 store investments in H1, with larger stores performing strongly Oxford Street flagship renewed, providing a test - bed for future stores GLOBAL GROWTH Sales rebound from incident with new partnerships offsetting Middle East disruption Zeos launch reducing marketplace delivery times and costs 4
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Source: YouGov. Proportion of survey respondents that gave a positive response for retailer vs all supermarkets. 12 week ending data, April 2025 to October 2026 Food Becoming a shopping list retailer Volume - led growth ahead of the market Like - for - like sales up 11.7%, driven by volume growth in core categories More shoppers, shopping more often for larger baskets a driving market share gains b Winning share in shopping list categories Strong share gains across everyday shopping list categories: Produce, Meat, Dairy and Grocery c A long hot summer and the world cup lifted Frozen, Soft Drinks and Beers & Spirits in peak temperature weeks Value investment converting into volume £50m annualised price investment in value, focused on lines which matter most to customers Salmon and Organic price investment already bringing strong volume growth M&S value perception relative to the market at its strongest position in October 1 Worldpanel sourcing is listed at the end of this document Total 4.3% Market share growth momentum continues in Food Ongoing value investment in key lines to support ambition to be a “shopping list retailer” reflected in value perception Value Perception 2025 2026 2022 2023 2024 Market Share LY Source: Worldpanel b +60 bps Grocery Dairy Meat Produce +45 bps +97 bps +83 bps 5 SALMON +40 % Volume growth vs LY - 1 ORGANIC +38 % Volume growth vs LY - 1 Apr 2025 Oct 2026 8.5 5.7 3.2% 3.4% 3.7% 3.8% 4.3% Source: Worldpanel c
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25/26 Food Estimated contribution to Food sales from new space Investments in supply chain capacity remain on track Reinvesting for growth in new stores and supply chain capacity 22 % Spent to date Shell complete & access granted for fit out 49 % Spent to date Manual fit out of building Completion Q1 FY29 Completion Q2 FY30 Larger new stores driving incremental growth Increased activity during H1: seven new stores, three relocations, two extensions, four food renewals & one downsize Average trading space of new openings doubled over past five years. Larger ex Homebase stores performing well Building pipeline of new openings driving increased contribution to sales Supply chain capacity investment on track 30% growth in capacity expected from ongoing investment into the food supply chain, which remains on track Avonmouth supporting volumes through our peak period, while mechanisation installed Daventry building shell complete, with fit - out getting underway Temporary space has been leased to support volume growth until new sites open Opening Closing Q1 Q2 Q3 Q4 Q1 Q2 Spend to date To complete Daventry Avonmouth 6 1 Estimated contribution to sales growth H1 26/27 0.4 % 2.2 %
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-6% -4% -2% 0% 2% 4% 6% 13% 24% 0% 0% <35 35-54 55-70 70+ (5.2%) 11.2% Fashion, Home & Beauty Online growth vs LY - 1 driven by younger age groups Product availability constrained store sales through summer Improving performance and rebuilding momentum Apr May Jun Jul Aug Sep By channel Online (Ex. Furniture) Stores Availability vs LY - 1 Brand strength driving share gains in a difficult market #1 for value, quality and style, with quality and style at their highest level to date Market share growth in a declining clothing market d , with menswear performing strongly e Online spend growing, particularly among younger age groups Demand growth online, with reduced store sales during the summer Online sales participation increased to 35% Store sales below two years ago with effect most evident in high street locations Larger, modern stores continued to outperform Availability recovering into Autumn/Winter Availability constrained in some core womenswear lines as manual ordering impact after incident lasted longer than expected Ahead of Autumn/Winter, Fashion, Home & Beauty has acted to improve core product availability, through improvements in stock flow and inventory management Total WW Source: Worldpanel f By age group 7
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Fashion, Home & Beauty Store sales holding level despite space decreasing by 12% Investment in supply chain is on track Doubling the online business Investment in new planning tools to support growth Roll out of planning platform to improve stock flow and availability Buying and merchandising process changes alongside new tools Opportunity in sourcing to buy core ranges better while shortening lead times on seasonal and fast - selling lines Supply chain investment on track Lichfield acquired: Automated capacity to support profitable online growth New returns warehouse in Sheffield for simpler, lower cost returns Capacity investment at Castle Donington: lower fulfilment costs and more efficient operations A smaller, more productive omni - channel estate Aim to create a more focused, productive estate of full - line stores in growth locations Pantheon renewal a test bed for future store investment Focus on improved retention and frequency across a larger online customer base 10.4 9.2 H1 19/20 H1 26/27 (12 % ) FH&B Owned Space +1 % Till Sales (£bn) Till Sales (£m) FH&B Owned Space (m. sq.ft ) Existing Site Automation National Returns Centre Lichfield Boxed expansion Click & Collect sorter live Go - Live (Postal) Go - Live (Simply Food Returns) Purchase Manual Go - Live Automation Go - Live Q1 Q2 Q3 Q4 FY28 8 *UK Excl. ROI Till Sales 1.2 1.2 H1 19/20 H1 26/27 +14 % Store Density
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(2) 28 23 7 International Increasing sources of growth Source H1 25/26 Owned Online Franchise Wholesale H1 26/27 Sales and profit growth despite Middle East disruption Healthy growth driven by online, franchise and wholesale New partnerships offsetting disruption in the Middle East Franchise and wholesale: Capital light routes to growth Growth in Food and Fashion franchise following the ongoing reset of commercial terms Wholesale partnership with Target scaling from a small base Online marketplaces: Scaling at lower cost Online sales up substantially following recovery from the cyber incident, and strong marketplace demand in Europe Zeos fulfilment reducing delivery times and costs International sales increased by 22% despite conflict in the Middle East Zeos improving customer experience 256 312 Delivery Promise (days) - 2 days Delivery Cost - 39 % 6 4 Pre-Zeos Current £7.33 £4.44 Pre-Zeos Current 9
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10% 15% 20% 25% 30% 35% Ocado Retail Growth and scale driving profitability Easter Impact Sales growth YOY Ocado Retail delivers profit before tax in H1 Sales up 16% driven by more active customers, more orders and strength of M&S products Operating profit before adjusting items of £25.6m compared with £3.1m loss last year M&S products growing faster than Ocado, now more than 50% share in fresh categories Improved units per hour and delivery efficiency driving margin as business grows M&S share of Basket 31%, over indexing in fresh categories Operational metrics improving 30.9 % M&S Share of Basket Last 26 Weeks 50.9 % Fresh Categories Share of Basket Last 26 Weeks Total ORL M&S Fulfilment cost per each Eaches* per 8 - hour shift CFC units per hour *Items delivered (7.4 % ) +9.5 % +6.5 % 16.7 15.5 235 258 957 1,020 H1 25/26 H1 26/27 H1 25/26 H1 26/27 H1 25/26 H1 26/27 10
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Outlook M&S enters the second half focused on executing its growth strategy Food continues to outperform the market, driven by ongoing investment in value, quality and innovation In Fashion, Home & Beauty, market conditions remain challenging. However, performance is expected to improve in the second half compared with the first. Availability has improved, creating a better balance between core and seasonal stock M&S continues to build its structural cost reduction programme across technology, logistics and stores, while cost growth including marketing was weighted towards the first half For the full year, Food margins are expected to be ahead of 2024/25. In Fashion, Home & Beauty, the actions underway are expected to support a progressive improvement in profitability M&S therefore expects Group adjusted profit before tax for the full year to be in line with current market expectations 11
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Alison Dolan CHIEF FINANCIAL OFFICER 12
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Half year financials at a glance £403.2 m +119.0 % vs 25/26 14.8 p +8.2p vs 25/26 £102.2 m £374.7 m 15.3 % £9.3 bn +16.2 % vs 25/26 Group sales M&S Group adjusted profit before tax Adjusted basic earnings per share (EPS) Free cash flow from operations Net funds excluding leases Adjusted return on capital employed 13
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Group profit £m H1 26/27 H1 25/26 Food 5,162.9 4,531.9 Fashion, Home & Beauty 1,995.4 1,697.6 International 312.2 255.8 Ocado Retail 1,784.5 1,479.9 Total Sales 9,255.0 7,965.2 Group Sales exc. Ocado Retail 7,470.5 6,485.3 Food 288.6 89.1 Fashion, Home & Beauty 150.5 46.1 International 15.3 13.3 Ocado Retail 25.6 (3.1) Share of result in Ocado Retail Limited M&S Financial Services / Other 6.5 6.0 Insurance Income - 100.0 Total adjusted operating profit 486.5 251.4 Total Net Interest (79.7) (80.2) Profit before tax and adjusting items 406.8 171.2 Adjusted non controlling interests before tax (3.6) 12.9 M&S Group adjusted profit before tax 403.2 184.1 Profit before tax and adjusting items 406.8 171.2 Adjusting items (51.7) (167.8) Statutory profit before tax 355.1 3.4 H1 24/25 4,204.5 2,030.5 289.3 6,524.3 6,524.3 216.4 243.4 10.7 (16.0) 8.2 462.7 (54.9) 407.8 5.3 413.1 407.8 (15.9) 391.9 Change % vs 25/26 13.9% 17.5% 22.1% 20.6% 16.2% 15.2% N/A N/A 15.0% N/A N/A 8.3% (100.0%) 93.5% (0.6%) N/A N/A N/A N/A (69.2%) N/A Change % vs 24/25 22.8% (1.7%) 7.9% N/A 41.9% 14.5% 33.4% (38.2%) 43.0% N/A (100.0%) (20.7%) N/A 5.1% 45.2% (0.2%) N/A (2.4%) (0.2%) N/A (9.4%) 14
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199.5 104.4 2.0 0.5 (100.0) 28.7 0.5 (16.5) 184.1 403.2 M&S Group adjusted profit before tax bridge versus H1 25/26 £m M&S Group adjusted profit before tax H1 25/26 Fashion, Home & Beauty Ocado Retail International M&S Financial Services Net finance cost Non controlling interests Food M&S Group adjusted profit before tax H1 26/27 Insurance income 15
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72.2 (92.9) 4.6 (1.7) 25.6 16.0 (24.8) (8.9) 413.1 403.2 M&S Group adjusted profit before tax bridge versus H1 24/25 £m M&S Group adjusted profit before tax H1 24/25 Fashion, Home & Beauty Share of loss in associate International M&S Financial Services Net finance cost Non controlling interests Food M&S Group adjusted profit before tax H1 26/27 Ocado Retail 16
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180 (93) 53 28 120 (18) STRUCTURAL COST REDUCTION Retail: £50m Logistics: £22m D&T: £14m Other: £7m ONE - OFFs Furniture Exit: £14m Other: £4m £m H1 24/25 Inflation Volume Structural Cost Reduction Investments Other H1 26/27 INFLATION Pay Review & NICs: £135m Cost Inflation: £40m Energy Inflation: £5m COSTS RELATING TO INVESTMENTS D&T: £38m Logistics: £17m Marketing: £23m Retail: £22m New Stores & Renewals: £17m Other: £3m H1 operating cost drivers versus 2024/25 2,084 2,354 Channel Shift Pay review & NICs: £135m 17
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Food performance 26 weeks ended H1 26/27 H1 25/26 Change vs 25/26 H1 24/25 Change vs 24/25 Sales (£m) 5,163 4,532 13.9% 4,205 22.8% Operating profit before adjusting items (£m) 288.6 89.1 N/A 216.4 33.4% Operating margin % 5.6% 2.0% 3.6% pts 5.1% 0.5% pts 18
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Food operating profit margin bridge Operating profit margin before adjusting items % % H1 24/25 5.1 Gross margin (0.1) Operating costs 0.6 H1 26/27 5.6 Operating costs to sales % Retail costs 0.1 Logistics costs 0.1 Digital & Technology 0.0 Central costs 0.4 Total 0.6 19
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Fashion, Home & Beauty performance 26 weeks ended H1 26/27 H1 25/26 Change vs 25/26 H1 24/25 Change vs 24/25 Sales (£m) 1,995 1,698 17.5% 2,030 (1.7%) Operating profit before adjusting items (£m) 150.5 46.1 N/A 243.4 (38.2%) Operating margin % 7.5% 2.7% 4.8% pts 12.0% (4.5%) pts Store sales (£m) 1,290 1,315 (2.0%) 1,361 (5.2%) Online sales (£m) 706 382 84.6% 670 5.4% 0.0 % Excluding Furniture Exit +11.2 % Excluding Furniture Exit 20 Numbers may not cast due to rounding
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Fashion, Home & Beauty operating profit margin bridge Operating profit margin before adjusting items % H1 24/25 12.0 Gross margin (0.4) Operating costs (4.1) H1 26/27 7.5 Operating costs to sales % Retail costs (0.8) Logistics costs (0.9) Digital & Technology (0.8) Central Costs, of which (1.6) Marketing (1.4) Total (4.1) 21
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International performance 26 weeks ended H1 26/27 H1 25/26 Change vs 25/26 H1 24/25 Change vs 24/25 Sales (£m) 312.2 255.8 22.1% 289.3 7.9% Franchise 147.3 124.2 18.6% 136.0 8.3% Owned 107.5 109.0 (1.4%) 120.0 (10.4%) Online & Marketplace 37.5 9.9 N/A 22.9 63.8% Wholesale 19.9 12.7 56.7% 10.4 91.3% Operating profit before adjusting items (£m) 15.3 13.3 15.0% 10.7 43.0% Operating margin % 4.9% 5.2% (0.3) pts 3.7% 1.2 pts 22
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Ocado Retail performance 26 weeks ended H1 26/27 H1 25/26 Change vs H1 25/26 25 weeks ending 28 Sep 25/26 Sales (£m) 1,785 1,539 16.0% 1,480 Operating profit before adjusting items (£m) 25.6 (3.6) n/a (3.1) Operating margin % 1.4% (0.2%) 1.6% pts (0.2%) 23
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Disciplined capital allocation Generation of free cash flow Invest for growth and structural cost reduction Returns on investment Reducing net debt Value creation for shareholders 1 5 3 2 4 24
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Free cash flow Cash flow H1 26/27 H1 25/26 Change vs 25/26 Adjusted operating profit 486.5 251.4 235.1 Depreciation and amortisation 339.9 318.9 21.0 Underlying EBITDA 826.4 570.3 256.1 Cash lease payments (186.9) (180.1) (6.8) Change in working capital 70.5 (334.2) 404.7 Defined benefit scheme pension funding (42.2) (42.1) (0.1) Capex and disposals (501.0) (172.2) (328.8) Financial interest (1.6) (9.7) 8.1 Taxation (49.2) (3.5) (45.7) Employee - related share transactions 8.0 19.0 (11.0) Share of result from associate (0.5) (1.3) 0.8 Adjusting items outflow (21.3) (39.2) 17.9 Free cash flow from operations 102.2 (193.0) 295.2 Surrenders (2.0) 0.0 (2.0) Acquisition, investments, and divestments (2.3) (2.9) 0.6 Free cash flow 97.9 (195.9) 293.8 Dividends (61.5) (52.4) (9.1) Free cash flow after shareholder returns 36.4 (248.3) 284.7 25
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339.9 (186.9) 70.5 (50.8) (34.7) (21.3) (501.0) Free cash flow from operations H1 26/27 826.4 486.5 102.2 £m Adjusted operating profit Working capital Financial interest & tax Adjusting items in cash flow Free cash flow from operations Cash lease payments All other items Net capex Depreciation & Amor tisation Underlying EBITDA 26
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Net debt bridge vs FY 25/26 FY 25/26 £m Opening net debt including lease commitments (2,411.8) Free cash flow from operations 102.2 Dividends paid (61.5) Surrender payments (2.0) Acquisitions, investments, and divestments (2.3) New lease commitments (226.0) Decrease in lease obligations 130.9 Exchange and other non - cash movements 3.8 Closing net debt including lease commitments (2,466.7) Increase in total net debt (54.9) 27
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Net Debt 26 - Sep - 2026 £m Cash and short - term investments 1 1,072.1 Ocado Retail Borrowing (90.0) Medium Term Notes (607.4) Net funds/ (debt) excluding lease liabilities 374.7 Lease liabilities (2,841.4) Group net debt (2,466.7) 1 Comprises cash and cash equivalents and current financial assets 28
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£2.0m £71.8m £145.7m £117.3m £40.6m M&S Group capital expenditure £377.4m Property Supply chain Digital & Technology Other Capex net of disposals H1 26/27 Anticipated capex net of disposals FY 26/27 Excludes Ocado Retail and movement in accruals29 Maintenance £402m £390m £530m £624m £750m FY23 FY24 FY25 FY26 FY27E
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Structural cost reduction programme Fashion, Home & Beauty Logistics Food Logistics Other Retail Digital & Technology Delivered H1 26/27 FY28 ambition £600m Numbers to be updated £59m FY28 FY27 c.£120m FY26 £89m FY25 £120m FY24 £180m c.£450m Achieved to date 30
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£1.1bn £0.4bn £0.4bn £2.4bn £2.3bn £2.3bn £2.2bn £2.2bn £2.3bn £2.3bn £0.5bn £0.5bn Balance sheet metrics Net debt (funds) excluding lease liabilities M&S Lease liabilities Ocado Lease liabilities (£448m) Net funds (£338m) Net funds (£46m) Net funds (£375m) Net funds 31
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Summary 1 5 3 2 4 32 The first half reflects recovery from last year’s disruption Food delivered strong sales and profit growth, whilst Fashion, Home & Beauty remains below our expectations International improved profitability despite Middle East disruption, while Ocado Retail improved efficiencies and grew profit Cost growth was first - half weighted, with structural savings more weighted to the second half For the full year, we expect Food margins ahead of 2024/25 and progressive improvement in Fashion, Home & Beauty profitability
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Appendix
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Adjusting items £m H1 26/27 vs H1 25/26 Strategic programmes (33.7) (27.2) Store estate (34.0) (17.5) Organisation 5.9 5.9 FH&B Transformation (4.8) (4.8) D&T Transformation (0.8) 0.1 Other 0.0 (10.9) Other adjusting items (13.5) 142.2 M&S Bank transformation and insurance mis - selling provisions (6.5) 18.8 Amortisation and FV adjustments relating to Ocado Retail Limited (3.4) 18.0 Costs associated with the cyber incident (0.3) 101.3 Other (3.3) 4.1 M&S Group Adjusting Items (47.2) 115.0 Non controlling interest adjusting items (4.5) 1.1 Adjustments to profit before tax (51.7) 116.1 34
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Depreciation and amortisation H1 26/27 £m Food FH&B Intl Ocado Retail All other segments Group Adjusted operating profit 288.6 150.5 15.3 25.6 6.5 486.5 Depreciation Tangible Asset 84.9 70.3 6.5 8.9 170.6 Right of use asset 54.5 34.2 13.0 28.1 129.8 Amortisation 15.1 17.1 2.2 1.1 35.5 Write offs & disposals 1.3 2.5 (0.7) 0.4 3.5 Impairment 1.2 (2.1) 1.4 0.0 0.0 0.5 Depreciation & Amortisation 1 157.0 122.0 22.4 38.5 0.0 339.9 Underlying EBITDA 445.6 272.5 37.7 64.1 6.5 826.4 Interest payable on leases 30.4 26.8 4.6 14.1 0.0 75.9 1 Depreciation, amortisation and impairment before adjusting items 35
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Lease liability breakdown Full Line Food Office, Warehouse & Other International Ocado Retail H1 26/27 £2,326.0m M&S Ocado Retail £515.4m £2,841m H1 26/27 £2,841m 36
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Stores and selling space NUMBER OF STORES UK Selling space (m sq. ft) Sep 26 Mar 26 Openings Closures Change Shopping Centre 1.6 16 16 0 0 0 Retail Park 4.7 84 83 1 0 1 High Street 1.8 61 65 0 (4) (4) High Street - large 4.2 62 63 0 (1) (1) Full Line total 12.3 223 227 1 (5) (4) FH&B only 0.0 1 1 0 0 0 Outlets 0.3 31 32 0 (1) (1) Food stores – Owned 3.0 332 333 10 (11) (1) Food stores – Franchise 0.8 466 466 2 (2) 0 UK total 16.3 1,053 1,059 13 (19) (6) FH&B – Owned 9.2 255 260 1 (6) (5) Food – Owned 6.3 332 333 10 (11) (1) ROI & Channel Islands stores 0.7 64 60 5 (1) 4 UK, ROI & Channel Islands stores 17.0 1,117 1,119 18 (20) (2) International Sep 26 Mar 26 Openings Closures Change Owned/JV 1.2 127 127 4 (4) - Franchise 2.2 205 218 3 (16) (13) International stores 3.4 332 345 7 (20) (13) 37
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Non - controlling interests P&L Sep - 26 Sep - 25 ORL £m Other £m Total £m Total £m Adjusted NCI (Pre Tax) 4.6 (1.0) 3.6 (12.9) NCI adjusting items (4.5) - (4.5) (5.6) Non - controlling interests (Pre Tax) 0.1 (1.0) (0.9) (18.5) Taxation - 0.2 0.2 0.4 Non - controlling interests after tax 0.1 (0.8) (0.7) (18.0) 38
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a FMCG, 12 week ending 4 October 2026.M&S Yr/Yr growth Buyers, Frequency and Basket Size b FMCG, 12 week ending 4 October 2026 and previous years. M&S spend share c FMCG, 12 week ending 4 October 2026 and previous year. M&S category spend share d Fashion, Total Category, Value Share, 12 w/e 13 th Sept 2026 vs last year e Fashion, Total Category, Value Share, 12 w/e 13 th Sept 2026 vs last year f Total Fashion, Online, Value, 12 w/e 13 th Sept 2026 vs two years ago Worldpanel references 39