TIDMBRBY

RNS Number : 5940P

Burberry Group PLC

10 June 2020

10 June 2020

Burberry Group plc - Annual Financial Report

The following documents have today been made available to shareholders of Burberry Group plc

(the "Company"):

   1.   Annual Report and Accounts for the financial year ended 28 March 2020; 
   2.   Notice of the 2020 Annual General Meeting; and 
   3.   Form of Proxy for the 2020 Annual General Meeting. 

Pursuant to Listing Rule 9.6.1, each of these documents has been submitted to the National Storage Mechanism and they will shortly be available for inspection at https://data.fca.org.uk/#/nsm/nationalstoragemechanism .

The documents are also available on the Company's website at burberryplc.com

The 2020 Annual General Meeting (the "AGM") will take place at 11.00am on Wednesday, 15 July 2020 at Horseferry House, Horseferry Road, London, SW1P 2AW. Please note that due to restrictions related to COVID-19 this is a closed meeting and shareholders will not be able to attend. Shareholders are encouraged to vote in advance either electronically or by submitting their Form of Proxy appointing the Chairman of the Meeting as proxy. Shareholders are also invited to submit questions in advance of the meeting as detailed in the Notice of AGM. Questions should be received no later than 11.00am on Monday, 11 July 2020. The total of the votes cast by shareholders for or against or withheld on each resolution to be put to the meeting will be published on burberryplc.com as soon as possible after the meeting.

In compliance with Disclosure Guidance and Transparency Rule ("DTR") 6.3.5, the information in the Appendix below is extracted from the Company's Annual Report and Accounts for the financial year ended 28 March 2020 (the "2019/20 Annual Report and Accounts") and should be read in conjunction with the Company's preliminary announcement issued on 22 May 2020 (the "Preliminary Announcement"), both of which can be viewed at burberryplc.com . Together these constitute the material required by DTR 6.3.5 to be communicated to the media in unedited full text through a Regulatory Information Service. This material is not a substitute for reading the 2019/20 Annual Report and Accounts in full. Page numbers and cross-references in the extracted information below refer to page numbers and cross-references in the 2019/20 Annual Report and Accounts.

The information contained in this announcement and in the Preliminary Announcement does not constitute the Company's statutory accounts, but is derived from those statutory accounts. The statutory accounts for the financial year ended 28 March 2020 have been approved by the Board and will be delivered to the Registrar of Companies following the AGM.

Enquiries

Investors and analysts

Annabel Gleeson

VP, Investor Relations

annabel.gleeson@burberry.com

020 3367 4458

Media

Andrew Roberts

VP, Corporate Relations

andrew.roberts@burberry.com

020 3367 3764

APPIX: ADDITIONAL INFORMATION REQUIRED BY DTR 6.3.5

AUDIT REPORTS

The Preliminary Announcement includes a condensed set of financial statements. Audited financial statements for the financial year ended 28 March 2020 are contained in the 2019/20 Annual Report and Accounts. The Independent Auditors' Report on the Company financial statements and the parent company financial statements (the "Audit Report") is set out in full on pages 195 to 203 of the 2019/20 Annual Report and Accounts. The Audit Report is unqualified and does not contain any statements under section 498(2) (regarding adequacy of accounting records and returns) or under section 498(3) (regarding provision of necessary information and explanations) of the Companies Act 2006.

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The following information is extracted from page 194 of the 2019/20 Annual Report and Accounts.

The directors consider that the Annual Report, taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess the Group and the Company's position and performance, business model and strategy.

Each of the directors, whose names and functions are listed on pages 124 to 127 confirm that, to the best of their knowledge:

- the Company financial statements, which have been prepared in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards, comprising FRS 101 'Reduced Disclosure Framework', and applicable law), give a true and fair view of the assets, liabilities, financial position and profit of the Company;

- the Group financial statements, which have been prepared in accordance with IFRSs as adopted by the European Union, give a true and fair view of the assets, liabilities, financial position and profit of the Group; and

- the Strategic Report includes a fair review of the development and performance of the business and the position of the Group and the Company, together with a description of the principal risks and uncertainties that it faces.

PRINCIPAL RISKS

The following information is extracted from pages 92 to 111 of the 2019/20 Annual Report and Accounts.

OUR APPROACH TO RISK

The Group's strategy takes into account risks, as well as opportunities, which need to be actively managed. Effective risk management is essential to executing our strategy, achieving sustainable shareholder value, protecting the brand and ensuring good governance.

The Board is ultimately responsible for determining the nature and extent of the principal risks it is willing to take to achieve our strategic objectives (the Board's risk appetite), and challenging management's implementation of effective systems of risk identification, assessment and mitigation.

The Audit Committee has been delegated the responsibility for reviewing the effectiveness of the Group's internal controls and risk management arrangements. Ongoing review of these controls is provided through internal governance processes and the work of the Group functions is overseen by the Executive Committee, particularly the work of Group Risk and Internal Audit and the Risk and Ethics Committees.

An integral part of our business, our risk management process is co-ordinated by our Group Risk and Assurance team, reporting to our Chief Operating and Financial Officer. Risk management activities include identifying risks, undertaking risk assessments and determining mitigating actions. These activities are reviewed by our Internal Audit and other control functions, which provide assurance to our Risk Committee, and ultimately to our Board, as shown in the diagram on page 128.

RISK APPETITE

The Board reviews and validates the Group's risk appetite on an annual basis. This is integrated into our wider risk management framework to support better decision-making and prioritisation.

We will pursue growth and are prepared to accept a certain level of risk to firmly establish our position in luxury fashion and inspire our customers. We operate in a competitive, dynamic sector with long-term growth potential. Within categories of risk, our tolerance for risk may vary.

Complying with applicable laws and doing the right thing is part of our culture and underpins our strategic ambition. In exploring risks and opportunities, we prioritise the interests and safety of our customers and employees, we seek to protect the long-term value and reputation of the brand, maximising commercial benefits to support responsible and sustainable global growth within our defined risk tolerance.

OUR PRINCIPAL RISKS AND THE TREATMENT OF COVID-19 PANDEMIC RISKS

The Board considers the principal risks to be the most significant risks faced by the Group and those that are the most material to our performance and that could threaten our business model or the future long-term performance, solvency or liquidity of Burberry. They do not comprise all the risks associated with our business and are not set out in priority order. Additional risks not known to management at present, or currently deemed to be less material, may also have an adverse effect on our business.

COVID-19 was declared a global pandemic on 11 March 2020 by the World Health Organization, with unprecedented restrictive measures being been put in place worldwide to help prevent the spread of COVID-19, ensure safety and wellbeing, protect health services and try and stabilise the economy. Information on how the impact of COVID-19 on Burberry has been addressed in the FY 2019/20 accounts is as follows:

1. The impact on the fourth quarter of FY 2019/20 trading performance is explained on pages 84-89. The high level of uncertainty and the severity of the disruption has negatively impacted the global economy resulting in downturns in consumer confidence and demand across the luxury fashion industry. Burberry saw a significant impact on our results in the final quarter of the FY 2019/20 including one-off charges of GBP240.9m.

2. The continuing spread of COVID-19 and the associated restrictions on public life are expected to significantly impact FY 2020/21 trading performance, however, the impact and timing of the return to normality and growth is uncertain. The potential impact on FY 2020/21 and beyond has been estimated by modelling various sales, supply chain, cost and liquidity scenarios based on a range of scientific and economic assumptions and considering various mitigating activities to reduce the impact on cash and EBIT. This work is summarised and explained on page 84.

   3.   Risk disclosures have been dealt with as follows: 

-- The risk of prolonged COVID-19 disruption, beyond the range of assumptions that have been used to develop the reasonably expected outcomes, has been incorporated as a new principal risk for the Group.

-- The impact on each of the other principal risks from the pandemic is also explained in the detail for each risk.

The macro-economic risk includes the risk of a deep global economic recession, which is considered to be one of the most significant possible future impacts.

4. For the Viability Statement the risks of the pandemic and the potential repercussions for the global economy on trading performance have been incorporated in modelling a range of outcomes together with revenue and cost sensitivities, and as part of the stress testing of the liquidity needed to support the Group ' s strategic plan. We have conducted reverse stress testing to identify the theoretical loss of revenue and liquidity that the Group could manage without impacting its viability.

Our risk framework is structured around the following categories of risk: External, Strategic and Financial, Operational, Compliance and Climate Change. Each principal risk is linked to one of these categories and may impact one or more of our strategic priorities.

We have reviewed and updated the descriptions and mitigating actions of our principal risks and have added new emerging external risks, including the further disruption caused by the COVID-19 pandemic, and any new strategic priorities that have been announced. We reviewed whether the level of risk associated with each of the principal risks is increasing or decreasing compared to the previous financial year and noted new risks, which do not have a basis for comparison.

Our risk management processes are designed to enable us to identify risks that can be partially mitigated through insurance. We focus our insurance resources on the most critical areas, or where there is a legal requirement, and where we can get best value for money for risk transfer.

EMERGING RISKS

Potential emerging risks are an area of focus. We undertake horizon scanning in conjunction with our strategy team to monitor any potential risks that could change our industry and/or our business, looking at both the inherent risk and opportunity. Emerging risks are new and evolving, and thus their full potential impact is still uncertain. To manage this, we involve specialist third parties where necessary to understand how our risk profile could change over a longer time period. Our risk management approach considers short term to be one year, medium term to be two to five years and long term more than five years.

 
            EMERGING RISKS 
 Macro      Pandemics: impact of the COVID-19 pandemic may be 
             prolonged, leading to longer-term disruptions to 
             supply chain, shifts in consumer demand, and travel 
             restrictions 
           --------------------------------------------------------- 
            Protectionism: countries protecting domestic production 
             may use tariffs and trade restrictions, which would 
             increase the cost of moving goods into key markets 
           --------------------------------------------------------- 
            Changing regulatory environment: financial reporting 
             regulation may increase the risk of non-compliance 
           --------------------------------------------------------- 
 Consumer   Changing consumer preferences: increased expectations 
             around product and Company sustainability 
           --------------------------------------------------------- 
            Significance of influential groups/individuals on 
             consumer spending patterns: for example, growing 
             influence of Gen Z on entire consumer base through 
             social media 
           --------------------------------------------------------- 
 Industry   Industry concentration: increase in concentration 
             on key consumer groups resulting in greater competition 
             for growth targets 
           --------------------------------------------------------- 
            Emerging disrupter brands: trend for pop-up and 
             emerging brands increases as a market share and 
             attracts Burberry ' s consumer 
           --------------------------------------------------------- 
            New technology: leading to changes in consumer spending 
             habits, for example virtual stores 
           --------------------------------------------------------- 
            Circularity: new business models and increase in 
             product re-sale markets, including fashion rental 
           --------------------------------------------------------- 
            Full supply chain traceability: requiring investment 
             in new technologies 
           --------------------------------------------------------- 
 

RISK MANAGEMENT PROCESS

 
                                         BOARD AND BOARD COMMITTEES 
 Responsible             Monitors risks through Board processes,                Audit Committee 
  for regular             including regular reviews of strategy,                 reviews effectiveness 
  oversight of            management reports and deep dives                      of risk management 
  risk management,        into selected risk areas.                              process with 
  annual strategic                                                               support from 
  risk review,                                                                   Internal Audit. 
  and setting 
  the Group's 
  risk appetite. 
                        -----------------------------------------------------  ---------------------------- 
 
 
                                 MANAGEMENT RISK COMMITTEE (CHAIRED BY CO&FO) 
 Reviews external        Meets at least three times per                         Identifies 
  and internal            year and reports key findings to                       changes to 
  environment             the Audit Committee.                                   principal risks 
  for emerging                                                                   and the effectiveness 
  risks. Performs         Cross-functional attendees, encompassing               and adequacy 
  deep-dive reviews       senior management from IT, Finance,                    of 
  of principal            Legal, HR, Supply Chain and Retail.                    mitigating 
  risks.                                                                         actions to 
                                                                                 achieve agreed 
  Reviews risk                                                                   risk tolerance 
  register updates                                                               levels. 
  from risk owners. 
                        -----------------------------------------------------  ---------------------------- 
 
    GROUP RISK AND            ETHICS COMMITTEE        FUNCTIONS AND BUSINESS          INTERNAL AUDIT 
     ASSURANCE TEAM                                         RISK OWNERS                AND COMPLIANCE 
                                                                                         FUNCTIONS 
----------------------  ---------------------------  ------------------------  ---------------------------- 
 -- Establishes          -- Reviews and               -- Carry out day-to-day   -- Review risk 
  risk                    monitors ethical             risk management           management 
  management              risks, as well               activities.               process 
  framework.              as behavioural               -- Identify and           periodically. 
  -- Identifies           and responsibility           assess                    -- Compliance 
  emerging risks,         practices across             risk and implement        functions provide 
  working with            the Group. Approves          mitigating actions.       independent 
  the Strategy            policies relating            -- Assign owners          assurance to 
  team.                   to such ethical              to update risk            management 
  -- Facilitates          matters, including           registers.                and the Board 
  risk assessments        the Group's Code                                       on risk status 
  and updates             of Conduct.                                            (Health and 
  to risk mitigations.    -- Performs deep-dive                                  Safety, Legal, 
  -- Provides             reviews and assesses                                   Brand Protection, 
  resources               results of investigations                              Quality, Asset 
  and training            and corrective                                         and Profit 
  to                      actions.                                               Protection, 
  support risk            -- Supports the                                        Corporate Responsibility). 
  management process.     Group in managing 
  -- Facilitates          ethical and associated 
  strategic risk          reputational 
  assessment as           risks, including 
  part of the             overseeing awareness 
  central planning        and training across 
  process.                the Group to reinforce 
  -- Prepares             business ethics 
  Board and Risk          and good practice. 
  Committee               -- Monitors whistleblower 
  updates.                activity and Burberry 
                          Confidential. 
                        ---------------------------  ------------------------  ---------------------------- 
 

EXTERNAL RISKS

COVID-19 FURTHER IMPACT

 
 The timing of a return to growth following the COVID-19 pandemic 
  is uncertain. There is a risk that the spread of the COVID-19 
  pandemic continues and/or the recovery is prolonged. In response 
  to COVID-19, we have prepared a number of planning scenarios 
  based on a range of assumptions and potential outcomes. The 
  risk remains of further significant impact on our future operations, 
  cash flows and viability beyond the range of assumptions that 
  have been used to develop the modelled scenarios. In addition, 
  there could be impacts on impairment of retail assets, inventory 
  and carrying value of assets. 
  Risk movement and outlook 
  COVID-19 is a new principal risk this year. While the group 
  had considered the possibility of a range of incidents that 
  could disrupt a key business location, the likelihood of the 
  occurrence of a global pandemic causing disruption on the 
  scale of COVID-19 across the business had not been considered 
  as a stand-alone risk. Although there is continued uncertainty 
  about the timing of a return to growth, we remain confident 
  in our strategy to reposition Burberry firmly in luxury fashion 
  and are committed to the strategic vision for Burberry. Our 
  strategic initiatives have been shaped to the current situation 
  with focussed execution to ensure a successful recovery. 
---------------------------------------------------------------------------------- 
 LINK TO STRATEGY                         ACTIONS TAKEN BY MANAGEMENT 
---------------------------------------  ----------------------------------------- 
 The timeframe of implementing            -- The Group Incident Management 
  the strategy has been impacted           Team (GIMT) was set up to co-ordinate 
  by COVID-19, however the fundamentals    the business response to the 
  and trajectory of our strategy           COVID-19 outbreak. The 
  remain right.                            Group ' s response is being 
                                           managed through five key workstreams 
                                           led by the Executive Committee 
                                           and chaired by our CEO. 
                                           -- The health and safety of 
                                           our people is paramount. The 
                                           key focus of our response has 
                                           been on our people, our customers 
                                           and our communities. We have 
                                           prioritised their wellbeing 
                                           and communicated regularly with 
                                           all our 
                                           stakeholders. 
                                           -- We have devised a plan of 
                                           strategic initiatives to navigate 
                                           through this period of decreased 
                                           demand and capture opportunities 
                                           as consumer confidence and markets 
                                           rebound. 
                                           -- Burberry has significant 
                                           financial headroom in the form 
                                           of GBP0.9 billion cash balances 
                                           including GBP0.3 billion drawn 
                                           from the Revolving Credit Facility. 
                                           The Group has completed detailed 
                                           stress testing to understand 
                                           the extent to which the Group 
                                           could withstand a loss of sales 
                                           within the limits of its available 
                                           financial resources. Details 
                                           of this stress testing are set 
                                           out in the viability assessment 
                                           on page 117. 
                                           -- We closed sites across Asia, 
                                           EMEIA and the Americas, ahead 
                                           or in line with government restrictions 
                                           in order to prevent the spread 
                                           of COVID-19 and ensure our employees 
                                           ' , our customers ' and our 
                                           communities ' safety and wellbeing. 
                                           This includes the closure of 
                                           our head 
                                           office in London as well as 
                                           internal manufacturing sites 
                                           across the UK and in Italy. 
                                           -- As part of our overarching 
                                           response we are monitoring the 
                                           regulatory landscape. We are 
                                           engaging regularly with government 
                                           and local authorities in each 
                                           of our core geographies to ensure 
                                           we have the right support for 
                                           our business and for our people. 
                                           -- We are managing cash and 
                                           costs to protect the Group ' 
                                           s liquidity. A comprehensive 
                                           cost mitigation programme has 
                                           been established, which includes 
                                           delaying discretionary capital 
                                           expenditure to focus only on 
                                           that which is essential and 
                                           to strengthen the brand. 
                                           -- We keep product, inventory 
                                           and supply chain under constant 
                                           review to maintain supply chain 
                                           operations while optimising 
                                           buying commitments. 
                                           -- We have adapted our technology 
                                           for greater home working to 
                                           ensure all vital operations 
                                           and projects remain on track. 
                                           A dedicated support page and 
                                           helpline has been set up to 
                                           support 
                                           employees with any concerns 
                                           they have. 
---------------------------------------  ----------------------------------------- 
 RISK TOLERANCE 
---------------------------------------  ----------------------------------------- 
 Doing the right thing is part 
  of Burberry ' s culture and 
  underpins our strategic ambition. 
  Burberry has prioritised the 
  safety and wellbeing of our 
  people, our customers and our 
  communities. We have followed 
  all government and health authority 
  guidance and advice to reduce 
  the risk of spreading the virus 
  and have supported relief efforts 
  to reduce the impact of the 
  virus on peoples ' lives globally. 
--------------------------------------- 
 EXAMPLES OF RISKS 
--------------------------------------- 
 -- Further increase in the spread 
  of the pandemic results in the 
  loss of key employees and/or 
  impacts the health of our employees 
  and their ability to operate 
  effectively. 
  -- There is not sufficient liquidity 
  to manage operations and meet 
  liabilities as they fall due. 
  -- The Group ' s trading performance 
  and cash flows are significantly 
  impacted by further extended 
  periods of closures of Burberry 
  retail stores, manufacturing 
  facilities and distribution 
  centres imposed by governments. 
  -- Further impairment of retail 
  assets and inventory. 
  -- Continuing closure of retail 
  stores impacts our cash generation, 
  increases leverage and limits 
  our ability to source adequate 
  financing to continue to operate. 
  -- The rebound is delayed by 
  a resurgence in virus infections 
  particularly in Mainland China. 
  -- The continued outbreak impacts 
  the ability of 
  the Group to execute the strategic 
  plan and 
  maintain momentum in building 
  brand heat. 
  -- Closures of Burberry ' s 
  internal manufacturing 
  sites and global network of 
  storage and distribution hubs 
  significantly impacts the supply 
  chain and the speed we can rebound 
  when 
  government restrictions are 
  lifted. 
  -- Technology and IT infrastructure 
  is not able to 
  adapt to sustained working from 
  home requirements imposed by 
  governments. 
---------------------------------------  ----------------------------------------- 
 

MACRO-ECONOMIC AND CIVIL UNREST

 
 The Group operates in a wide range of markets and is exposed 
  to changing economic, regulatory, social and political developments 
  that may impact consumer demand, disrupt operations and impact 
  profitability. Adverse macroeconomic conditions or country-specific 
  changes to the operating or regulatory environment, natural 
  disaster, global health emergency or civil unrest may impact 
  the spending habits of key consumer groups and lead to increased 
  operational costs. 
  Risk movement and outlook 
  The risk is deemed to have increased in the year and the outlook 
  is uncertain due to a number of significant macroeconomic 
  and political events such as the protests in Hong Kong S.A.R. 
  and is overlapped by the COVID-19 risk. External factors such 
  as global health emergencies and natural disasters are difficult 
  to predict. 
------------------------------------------------------------------------------- 
 LINK TO STRATEGY                         ACTIONS TAKEN BY MANAGEMENT 
---------------------------------------  -------------------------------------- 
 Volatility in the external environment   -- We have defined a strategy 
  could impact our overall financial       that leverages our 
  performance and operations.              brand appeal and global reach 
                                           across multiple 
                                           customer segments and regions 
                                           to mitigate 
                                           reliance on a particular customer 
                                           group, however, we recognise 
                                           the importance of 
                                           Mainland China and the Chinese 
                                           consumer to 
                                           the luxury industry, as explained 
                                           in the Global 
                                           Chinese Consumer Spending risk. 
                                           -- In the short term, we continue 
                                           to assess shifts 
                                           occurring in the industry and 
                                           with customers 
                                           to ensure our plans are dynamic 
                                           and responsive 
                                           to the market. 
                                           -- We monitor external macroeconomic 
                                           and 
                                           regulatory changes and perform 
                                           horizon 
                                           scanning supported by insights 
                                           from the 
                                           Treasury and Strategy teams 
                                           into 
                                           macroeconomic trends. 
---------------------------------------  -------------------------------------- 
 RISK TOLERANCE 
---------------------------------------  -------------------------------------- 
 We have a low tolerance for 
  risk in this area but recognise 
  external factors can be more 
  difficult to mitigate as they 
  are often outside of our control. 
--------------------------------------- 
 EXAMPLES OF RISKS 
--------------------------------------- 
 -- Unexpected shifts in domestic 
  or tourist demand from key customer 
  groups due to uncertainty in 
  the economic outlook for the 
  luxury sector caused by global 
  recession, socio-political tensions. 
  -- Global health emergencies 
  affecting particular countries 
  and regions. 
  -- Unexpected disruptions to 
  the supply chain. 
---------------------------------------  -------------------------------------- 
 

UK'S WITHDRAWAL FROM THE EU

 
 Various scenarios could impact the Group ' s financial position, 
  operating model and people. 
  Risk movement and outlook 
  This risk has increased due to elevated uncertainty over the 
  UK ' s withdrawal from the EU on 31 December 2020 given the 
  disruption to trade negotiations caused by the COVID-19 pandemic 
  and the limited time available to secure a comprehensive free 
  trade agreement. 
------------------------------------------------------------------------------------- 
 LINK TO STRATEGY                         ACTIONS TAKEN BY MANAGEMENT 
---------------------------------------  -------------------------------------------- 
 Volatility arising from uncertainty      -- Our steering committee continually 
  around the trading relationship          monitors 
  between the UK and the EU following      the evolving impact of the post-transition 
  the end of the transition period         trading relationship between 
  may impact our overall financial         the UK and the 
  and operating performance, as            EU, and oversees our approach. 
  well as our ambitions with respect       -- While the transition period 
  to supply chain Operational              until 31 December 
  Excellence.                              2020 offers temporary relief, 
                                           we are prepared 
                                           for a no-trade-deal scenario 
                                           at the end of 2020 
                                           across all business activities, 
                                           including supply 
                                           chain, trade compliance, intellectual 
                                           property 
                                           and people. 
                                           -- We engage with UK Government 
                                           departments 
                                           and other external stakeholders 
                                           to ensure they 
                                           are fully informed of our circumstances. 
---------------------------------------  -------------------------------------------- 
 RISK TOLERANCE 
---------------------------------------  -------------------------------------------- 
 We have a low tolerance for 
  risk arising from uncertainty 
  regarding the trading relationship 
  between the UK and the EU following 
  the end 
  of the transition period, which 
  may have a long-term impact. 
--------------------------------------- 
 EXAMPLES OF RISKS 
--------------------------------------- 
 -- Additional customs duty based 
  on the post-transition trading 
  relationship between the UK 
  and the EU, and cessation of 
  the UK ' s access to the EU 
  ' s free trade agreements after 
  2020. 
  -- Disruption to business operations. 
  -- Impact on some current business 
  project road maps. 
  -- Extended supply chain lead 
  times could increase inventory 
  levels. 
  -- Uncertainty over the rights 
  of EU nationals and UK immigration 
  law could increase the risk 
  of being unable to recruit and 
  retain talent. 
  -- Exchange rate volatility 
  impacts Group revenues, margins, 
  profits and cash flow. 
---------------------------------------  -------------------------------------------- 
 

STRATEGIC RISKS

EXECUTION OF STRATEGIC PLAN

 
 Focused execution of the strategy through our four strategic 
  pillars (Product, Communication, Distribution and Digital) 
  is key to sustainable shareholder value. Success depends on 
  the value and relevance of our brand to luxury consumers around 
  the world and our ability to innovate. 
  Inability to execute the projects that underpin these strategies 
  successfully could result in under-delivery on the expected 
  growth, productivity and efficiency targets. This could have 
  a significant impact on the value of the business and market 
  confidence. 
  We operate in the global luxury market, where competition 
  is intensifying. Today ' s luxury consumers are increasingly 
  more demanding of luxury brands, seeking creativity, inspiration 
  and a meaningful connection, quality and innovation. Our ability 
  to make the right strategic investment decisions in response 
  to these changes is vital to our success. 
  Risk movement and outlook 
  We have reviewed the impact of the COVID-19 pandemic on the 
  luxury industry and consumer demand, and assessed the need 
  for changes to our strategic plan. Although the timeframe 
  of implementing the strategy has been impacted, the fundamentals 
  and trajectory of our strategy remain right. 
--------------------------------------------------------------------------------- 
 LINK TO STRATEGY                         ACTIONS TAKEN BY MANAGEMENT 
---------------------------------------  ---------------------------------------- 
 All strategic pillars.                   -- FY 2019/20 marked the end 
                                           of our multi-year strategy ' 
                                           s first phase, which focused 
                                           on re-energising the brand, 
                                           optimising our distribution 
                                           networks and ensuring a smooth 
                                           creative 
                                           transition to reflect Riccardo 
                                           Tisci ' s vision for Burberry. 
                                           -- The strategy team and creative 
                                           business owners for each pillar 
                                           co-ordinate delivery of the 
                                           programme, monitor the risks 
                                           associated with each of the 
                                           major programmes, and track 
                                           progress and benefits. 
                                           -- We have increased our focus 
                                           on measuring progress in our 
                                           transformation. We have designed 
                                           a set of lead indicators to 
                                           assess progress in product, 
                                           communications, store 
                                           performance and service. 
                                           -- We continued to strengthen 
                                           consumers ' perception of our 
                                           brand, signalling luxury through 
                                           our campaigns and disruptive 
                                           media experiences. 
                                           -- We continued to deliver newness 
                                           and exceptional product, having 
                                           established our new product 
                                           architecture and strengthening 
                                           in leather. 
                                           -- We have made good headway 
                                           in transforming our distribution 
                                           channels by aligning our mainline 
                                           stores to the new creative vision, 
                                           and completing the transition 
                                           of our US wholesale to 
                                           luxury fashion. 
                                           -- On digital, we remained focus 
                                           on strengthening our relationship 
                                           with customers with unexpected 
                                           and innovative activations, 
                                           such as games and social drops. 
                                           -- Our Inspired People initiatives 
                                           include leading the Groupwide 
                                           Engagement Survey. This has 
                                           shown a marked increase in the 
                                           understanding of our strategic 
                                           goals and transformation plan 
                                           within the Group. 
                                           -- Within the business, we prioritised 
                                           building resilience in a period 
                                           characterised by exceptional 
                                           uncertainty by taking a series 
                                           of rapid actions across four 
                                           areas: protecting our people 
                                           and communities; tightly managing 
                                           cash and costs; securing our 
                                           product, inventory and supply 
                                           chain; and driving revenue. 
                                           -- We have devised a plan of 
                                           strategic initiatives set out 
                                           on page 30 to navigate through 
                                           this period of decreased demand 
                                           due to the COVID-19 pandemic 
                                           and capture opportunities as 
                                           consumer confidence and markets 
                                           rebound. 
---------------------------------------  ---------------------------------------- 
 RISK TOLERANCE 
---------------------------------------  ---------------------------------------- 
 We will pursue growth and accept 
  a certain level of risk to ignite 
  brand heat and continue our 
  transition to firmly establish 
  our position in luxury fashion. 
  We approve capital investment 
  in strategic projects and accept 
  moderate to high earnings volatility 
  in pursuit of innovation and 
  profitable growth, balancing 
  a reasonable return on capital 
  for a reasonable level of commercial 
  risk within the approved capital 
  allocation framework. 
--------------------------------------- 
 EXAMPLES OF RISKS 
--------------------------------------- 
 -- Firmly positioning the brand 
  in luxury fashion is 
  dependent on creating new and 
  high quality luxury products 
  that excite our global customers. 
  If we are unable to innovate 
  effectively and get these new 
  products into the market with 
  speed, our sales or margins 
  could be adversely affected. 
  -- Our development and deployment 
  of content 
  through communication channels 
  does not create sufficient brand 
  heat and engagement globally. 
  -- We do not achieve the required 
  organisational alignment and 
  enhance our capabilities and 
  culture to compete and grow 
  effectively and at the pace 
  required to deliver the targets. 
  -- Failure to sufficiently transform 
  operational 
  processes could undermine our 
  ability to 
  deliver the required cost savings 
  and 
  margin improvements. 
  -- Failure to deliver the technology 
  innovation 
  required to empower changes 
  in the Group's 
  business model and to deliver 
  the anticipated 
  benefits from key investment 
  strategies in 
  Digital, Retail and Group Operations. 
  -- A pause to delivery of the 
  strategy due to major external 
  factors reduces momentum in 
  building brand heat and reduced 
  consumer confidence. 
  -- Inability to capture demand 
  as consumers become more discerning 
  in their purchases amid overall 
  demand decreasing in a global 
  recession. 
---------------------------------------  ---------------------------------------- 
 

IMAGE AND REPUTATION

 
 The Group carefully safeguards its image and reputational 
  assets. Unfavourable incidents, unethical behaviour or erroneous 
  media coverage relating to the Group's senior executives, 
  products, practices or supply chain operations could damage 
  the Group's reputation. 
  As our customers continue to engage with the brand through 
  multiple channels including social media, a misleading perception 
  of the Group's values and performance could potentially lead 
  to a slowdown in sales. 
  Burberry's increasing reliance on influencers in its marketing 
  and on collaborations in product design exposes the Group 
  to increased reputational risk. 
  Risk movement and outlook 
  While internal enhancements have been made to further safeguard 
  Burberry ' s image and reputation, in the current environment 
  there is increased scrutiny of Burberry. The external environment 
  of collaborators and influencers is dynamic, which creates 
  risk. Therefore constant monitoring is required to ensure 
  that Burberry ' s image and reputation is protected. 
-------------------------------------------------------------------------------- 
 LINK TO STRATEGY                          ACTIONS TAKEN BY MANAGEMENT 
----------------------------------------  -------------------------------------- 
 All strategic pillars.                    -- Training and monitoring of 
                                            adherence by personnel to the 
                                            requirements in the Group's 
                                            Responsible Business Principles. 
                                            -- Codified incident management 
                                            policy, monitoring of social 
                                            networks and response procedures. 
                                            -- Oversight of mitigation of 
                                            reputational issues by the Ethics 
                                            and Risk Committees. 
                                            -- The Group has established 
                                            Corporate Responsibility (CR) 
                                            standards, which aim to ensure 
                                            compliance with labour, human 
                                            rights, health and safety and 
                                            environmental standards across 
                                            our operations and extended 
                                            supply chain. 
                                            -- Supplier audits and supplier 
                                            training programmes are examples 
                                            of the actions and programmes 
                                            that have been put in place 
                                            in day-to-day operations. 
                                            -- Strengthening our approval 
                                            processes and editorial controls 
                                            to ensure all product and content 
                                            is reviewed and signed off prior 
                                            to external release. 
                                            -- Onboarding of a Director 
                                            of Diversity and Inclusion; 
                                            development of a global Diversity 
                                            and Inclusion strategy, and 
                                            the creation of an External 
                                            Advisory Council comprised of 
                                            thought leaders across the diversity 
                                            and inclusion landscape to provide 
                                            insight and help raise 
                                            Burberry ' s consciousness and 
                                            understanding of social issues. 
                                            Creation of an Internal Diversity 
                                            and Inclusion Council to support 
                                            the implementation of the strategy. 
                                            -- Increasing awareness of and 
                                            training with respect to Burberry's 
                                            Model Well -- being Policy to 
                                            all people who engage with model 
                                            on Burberry's behalf, including 
                                            employees, freelancers, casting 
                                            agents, contractors and 
                                            external third parties to ensure 
                                            they adhere to the policy. 
----------------------------------------  -------------------------------------- 
 RISK TOLERANCE 
----------------------------------------  -------------------------------------- 
 Protecting the brand and its 
  reputation globally is at the 
  heart of everything we do. We 
  have a moderate risk appetite 
  in order to deliver our strategy 
  supported by processes to avoid 
  or mitigate any reputational/brand 
  risk where possible. 
---------------------------------------- 
 EXAMPLES OF RISKS 
---------------------------------------- 
 -- An unfavourable incident 
  relating to a senior executive, 
  erroneous media coverage or 
  negative discussions on social 
  networks could damage Burberry's 
  reputation. 
  -- A celebrity, influencer, 
  collaborator or model associated 
  with Burberry becoming involved 
  in a reputational incident could 
  potentially lead to pressure 
  on Burberry to distance the 
  brand from them and could reflect 
  poorly on Burberry, negatively 
  impacting Burberry's reputation. 
  -- Unfavourable or erroneous 
  media coverage or negative discussions 
  on social networks about the 
  Group's products, content or 
  practices could impact brand 
  reputation. 
  -- Unethical behaviour on the 
  part of individuals or entities 
  connected with the Group could 
  attract negative attention to 
  the brand. 
  -- If suppliers or partners 
  do not respect the Group's Responsible 
  Business Principles this could 
  reflect negatively on Burberry. 
  -- Failure of employees or those 
  acting on Burberry's behalf 
  to adhere to Burberry's Model 
  Well -- being Policy could result 
  in reputational or legal risk. 
  -- Failure to understand social 
  issues and respect cultural 
  sensitivities around product 
  could negatively impact Burberry's 
  reputation. 
----------------------------------------  -------------------------------------- 
 

GLOBAL CHINESE CONSUMER SPING

 
 Global Chinese consumer spending patterns significantly change 
  having an immediate adverse impact on Group sales. Any significant 
  change to Chinese consumer spending habits globally due to 
  changes in economic, regulatory, social or political environment 
  in China, including a further health emergency or a natural 
  disaster, may adversely impact the domestic consumer group's 
  disposable income or confidence. Such changes could also lead 
  to Chinese consumers scaling back on travel, which could impact 
  the Group's global revenue and profits outside Mainline China, 
  which may not be compensated for by the repatriation of spend 
  in China. 
  Risk movement and outlook 
  The risk has increased since the prior year. Mainland China 
  is forecast by economists to be the only growing global economy 
  in FY 2020/21 and remains a key market for Burberry. While 
  our business in Mainland China has started to rebound to more 
  normal sales levels, the Group ' s trading performance could 
  be impacted if there is a recurrence of COVID-19 in Mainland 
  China or the recovery is delayed. 
------------------------------------------------------------------------------- 
 LINK TO STRATEGY                       ACTIONS TAKEN BY MANAGEMENT 
-------------------------------------  ---------------------------------------- 
 All strategic pillars.                 -- Burberry took prompt action 
                                         across Asia to comply with local 
                                         health guidelines and protect 
                                         our people, our customers and 
                                         our communities. 
                                         -- Scenario planning and analysis 
                                         was undertaken to understand 
                                         the long-term impact of the 
                                         global pandemic on Mainland 
                                         China, including a review of 
                                         the fixed and variable cost 
                                         strategy. 
                                         -- Prior to the outbreak of 
                                         COVID-19 there had been significant 
                                         focus on building brand heat 
                                         in Mainland China. A clear strategy 
                                         had been set, including building 
                                         new strategic social partnerships, 
                                         such as with Tencent, and strategic 
                                         locations and making customer 
                                         experiences, storytelling and 
                                         products more locally relevant. 
                                         This strategy will continue 
                                         assuming China continues to 
                                         rebound from COVID-19. 
                                         -- Development and execution 
                                         of Mainland China 
                                         strategy, including specific 
                                         product designed for Lunar New 
                                         Year and additional marketing 
                                         spend to support growth targets. 
                                         -- Investment in inventory and 
                                         technology to support Mainland 
                                         China digital across our own 
                                         platforms and those of our third-party 
                                         partner platforms. 
                                         -- Supporting investment and 
                                         growth strategies in other global 
                                         markets to reduce Burberry ' 
                                         s exposure to an individual 
                                         country or group of customers. 
-------------------------------------  ---------------------------------------- 
 RISK TOLERANCE 
-------------------------------------  ---------------------------------------- 
 We accept a certain level of 
  concentration risk in relation 
  to consumer nationality to maximise 
  the greatest growth opportunities 
  and to achieve our objective 
  of firmly establishing our position 
  in luxury fashion. 
------------------------------------- 
 EXAMPLES OF RISKS 
------------------------------------- 
 -- Increasing nervousness with 
  investors about the dependency 
  on growth from global Chinese 
  consumers in FY 2020/21 and 
  the ability of the world ' s 
  economies to respond to the 
  impact of the pandemic. Mainland 
  China is the only global country 
  where economists have forecast 
  growth. 
  -- Slower recovery in Asia from 
  the global pandemic because 
  of reinfections. 
  -- Burberry ' s growth from 
  Asia does not meet the 
  expectations either in magnitude 
  or timing, especially in Mainland 
  China. 
  -- We suffer a major reputational 
  shock in Mainland China causing 
  brand fallout. 
  -- We are unable to recapture 
  our share of the spend in Mainland 
  China because of the strength 
  and success of our competitors, 
  for example, in marketing campaigns 
  and investment in brand heat. 
  -- We are unable to capture 
  additional consumer spend in 
  Mainland China to offset the 
  loss of revenue as a result 
  of disruptions in Hong Kong 
  S.A.R. 
-------------------------------------  ---------------------------------------- 
 

FOREIGN EXCHANGE

 
 Volatility in foreign exchange rates could have a significant 
  impact on the Group's reported results. Burberry is exposed 
  to uncertainty through foreign exchange movements. Major events 
  such as the COVID-19 pandemic and the outcome of the UK ' 
  s withdrawal from the EU may have a major impact on foreign 
  exchange rates, which in turn could cause significant change 
  in our Group reported results. 
  Risk movement and outlook 
  The risk is deemed to have increased substantially since the 
  prior year primarily as a result of COVID-19 and the UK ' 
  s withdrawal from the European Union. Foreign exchange is 
  expected to remain volatile in FY 2020/21 as the actions taken 
  by governments globally in response to the COVID-19 pandemic 
  and other macro-economic and political factors, such as the 
  election in the USA, are absorbed. 
---------------------------------------------------------------------------------- 
 LINK TO STRATEGY                         ACTIONS TAKEN BY MANAGEMENT 
---------------------------------------  ----------------------------------------- 
 Volatility in foreign exchange           -- Burberry seeks to hedge anticipated 
  rates could impact our overall           foreign currency transactional 
  financial performance.                   cash flows using financial instruments. 
                                           These are mainly in Burberry's 
                                           centralised supply chain and 
                                           wholesale business. Burberry 
                                           does not hedge intragroup foreign 
                                           currency transactions at present. 
                                           -- Burberry monitors the desirability 
                                           of hedging the net assets of 
                                           non-pound sterling subsidiaries 
                                           when translated into pound sterling 
                                           for reporting purposes. We have 
                                           only entered into modest transactions 
                                           for this purpose in the current 
                                           and previous year. 
                                           -- Burberry monitors the overall 
                                           impact of unhedged exchange 
                                           movements and provides guidance 
                                           to shareholders if exchange 
                                           rates move on a quarterly basis. 
---------------------------------------  ----------------------------------------- 
 RISK TOLERANCE 
---------------------------------------  ----------------------------------------- 
 Burberry does not seek to manage 
  structural foreign exchange 
  risk relating to its overseas 
  retail operations. 
--------------------------------------- 
 EXAMPLES OF RISKS 
--------------------------------------- 
 -- Burberry operates on a global 
  basis and earns revenues, incurs 
  costs and makes investments 
  in a number of currencies. Burberry's 
  financial results are reported 
  in pound sterling. Most reported 
  revenues are earned in non-pound 
  sterling currencies, with a 
  significant proportion of costs 
  in pound sterling. Therefore, 
  changes in exchange rates, which 
  are driven by several factors, 
  such as global economic trends, 
  the COVID-19 pandemic and the 
  form of the UK's withdrawal 
  from the EU, could impact Burberry's 
  revenues, margins, profits and 
  cash flows. 
  -- Changes in exchange rates 
  driven by global economic trends 
  could reduce the attractiveness 
  of international shopping for 
  travelling tourists. 
---------------------------------------  ----------------------------------------- 
 

OPERATIONAL RISKS

LOSS OF DATA OR CYBERATTACK

 
 A cyberattack results in a system outage, impacting core operations 
  and/or results in a major data loss leading to reputational 
  damage and financial loss. 
  A cyber risk-aware workforce and the Group's technology environment 
  is critical to success. A robust control environment helps 
  decrease the risks to core business operations and/or major 
  data loss. 
  Risk movement and outlook 
  The impact and likelihood of this risk is assessed to have 
  increased as a result of the COVID-19 pandemic. 
------------------------------------------------------------------------------- 
 LINK TO STRATEGY                       ACTIONS TAKEN BY MANAGEMENT 
-------------------------------------  ---------------------------------------- 
 Having a cyber risk-aware workforce    -- Governance provided through 
  and resilient technology landscape     a cross-functional Cyber Security 
  is integral to delivering our          Steering Group with Executive 
  business strategy.                     membership and sponsorship. 
                                         -- Continued investment in Information 
                                         Security 
                                         capabilities. 
                                         -- Second line assurance checks 
                                         reporting on control effectiveness 
                                         to Executive and IT management 
                                         through monthly scorecards. 
                                         -- 24/7/365 Security Monitoring 
                                         and Analytics 
                                         capability supported by robust 
                                         security incident 
                                         response processes. 
                                         -- Information Security Advisory 
                                         function to embed security in 
                                         new projects and initiatives. 
                                         -- Security Training and Awareness 
                                         and phishing 
                                         tests rolled out to employees 
                                         globally with 
                                         completion monitoring. 
                                         -- Implementation of solutions 
                                         to help detect personal and 
                                         sensitive data loss with improved 
                                         control over user access management. 
                                         -- Test responses to cybersecurity 
                                         incidents 
                                         through simulations. 
                                         -- Data Privacy Steering Committee, 
                                         a cross-functional group to 
                                         review data controls around 
                                         existing systems and assess 
                                         the potential data risks (from 
                                         both a legal and reputational 
                                         perspective) associated with 
                                         new IT, Marketing, Retail and 
                                         Digital initiatives across Burberry. 
                                         -- Ongoing collaboration between 
                                         the Data Protection office, 
                                         Legal, IT and Information Security 
                                         functions to ensure policies 
                                         are adhered to with respect 
                                         to the appropriate collection, 
                                         security, storage, retention 
                                         and 
                                         deletion of personal data. 
-------------------------------------  ---------------------------------------- 
 RISK TOLERANCE 
-------------------------------------  ---------------------------------------- 
 Protecting the brand and its 
  reputation globally is at the 
  heart of everything we do. We 
  adopt a strategy to avoid or 
  mitigate key reputational/brand 
  risks wherever possible. 
------------------------------------- 
 EXAMPLES OF RISKS 
------------------------------------- 
 -- Malware results in a loss 
  of system control 
  causing business disruption 
  and/or major 
  data loss. 
  -- Credential compromise of 
  customer or 
  employee accounts leading to 
  business 
  disruption and/or major data 
  loss. 
  -- Accidental personal data 
  loss or disclosure 
  leading to regulatory fines. 
  -- Attack on Burberry.com causing 
  business disruption and/or major 
  data loss. 
  -- Compromise or misconfiguration 
  of externally 
  facing assets causing business 
  disruption and/ 
  or major data loss. 
  -- Fines due to failure to comply 
  with EU General Data Protection 
  Regulation (GDPR) and/or equivalent 
  applicable data protection 
  legislation globally. 
-------------------------------------  ---------------------------------------- 
 

PEOPLE

 
 Inability to attract, motivate, develop and retain our people 
  to perform to the best of their ability in order to meet our 
  strategic objectives. 
  Risk movement and outlook 
  The risk is deemed to have increased since the prior year, 
  primarily in an environment of uncertainty and change as a 
  result of the UK ' s withdrawal from the EU and the COVID-19 
  pandemic. Global trading disruption has impacted our people 
  ' s ability to meet planned business goals. 
------------------------------------------------------------------------------------------- 
 LINK TO STRATEGY                                    ACTIONS TAKEN BY MANAGEMENT 
--------------------------------------------------  --------------------------------------- 
 Delivery of our strategy relies                     Leadership and Culture 
  on our ability to engage and                        -- The Leadership Development 
  inspire our people to deliver                       Programme ran for its second 
  outstanding results for the                         year, with two additional cohorts 
  Group. This is accomplished                         going through the programme 
  through:                                            to engage and equip leaders. 
  -- strengthening capabilities                       The programme comprises 360 
  and enhancing our approach to                       feedback, coaching and a three-day 
  talent management throughout                        event. To date, the Executive 
  the                                                 Committee, senior leadership 
  organisation                                        team and 150 leaders have completed 
  -- fostering an inclusive culture                   the programme. 
  where all employees feel connected                  -- A third global Employee Engagement 
  to their work                                       Survey was carried out in July 
  -- empowering and equipping                         2019, with results published 
  leaders to lead through change                      in September. We saw overall 
  -- simplifying how we work to                       engagement increase by 1%, with 
  enhance operational efficiency                      87% of employees confirming 
  -- rewarding performance and                        that they were proud to work 
  creating a pay for performance                      at Burberry. Leaders are held 
  culture                                             accountable for delivering against 
  -- engaging employees through                       agreed action plans. 
  our ongoing commitment to corporate                 -- Leaders were equipped with 
  responsibility                                      regular strategy updates, including 
  -- driving positive change to                       talking points and regular leaders 
  promote sustainability across                       calls aimed at the director 
  the business                                        plus population, to engage their 
                                                      teams on the strategic direction 
                                                      and build a sense of belonging 
                                                      to the inclusive culture at 
                                                      Burberry. The Engagement Survey 
                                                      illustrated a positive shift 
                                                      that ' senior leaders give employees 
                                                      a clear picture of the direction 
                                                      Burberry is headed ' (from 69% 
                                                      in 2018 to 71% in 2019). 
 
                                                      Talent and Careers 
                                                      -- The identification of all 
                                                      critical roles was completed 
                                                      across the business and succession 
                                                      planning for all Executive Committee, 
                                                      Senior Leadership and key creative 
                                                      and commercial roles was carried 
                                                      out. 
                                                      -- A framework for talent management 
                                                      was defined and presented to 
                                                      the Board of Directors; a new 
                                                      VP of Talent joined the organisation 
                                                      and will help embed the evolution 
                                                      of our talent management approach. 
                                                      -- Inclusive Leadership training 
                                                      was delivered to 90% of all 
                                                      people leaders, including Retail 
                                                      Managers at Retail Conferences, 
                                                      and is now being offered as 
                                                      a part of our regular learning 
                                                      curriculum. 
                                                      -- A recruitment toolkit and 
                                                      accompanying training was rolled 
                                                      out for all hiring 
                                                      managers, ensuring that we get 
                                                      diverse and representative talent 
                                                      with the right organisational 
                                                      fit in a fair and consistent 
                                                      manner. 
 
                                                      Reward & Recognition 
                                                      -- A simplified, more effective 
                                                      performance management process 
                                                      across the business has been 
                                                      rolled out with a five-point 
                                                      performance rating scale and 
                                                      a new framework for quarterly 
                                                      performance conversations between 
                                                      all managers and their direct 
                                                      reports. 
                                                      -- A new set of reward plans 
                                                      to drive increased sales and 
                                                      ATV was rolled out for the retail 
                                                      population in EMEIA and the 
                                                      Americas; a 
                                                      further rollout for Asia is 
                                                      planned for the upcoming year. 
                                                      -- A review of our compensation 
                                                      plans for which over a third 
                                                      of our workforce is eligible 
                                                      has been conducted to ensure 
                                                      alignment between the wider 
                                                      workforce and the new Directors 
                                                      ' 
                                                      Remuneration Report (which will 
                                                      be proposed for approval at 
                                                      the 2020 AGM). 
 
                                                      Diversity and Inclusion and 
                                                      Employee Relations 
                                                      -- The onboarding of a new Director 
                                                      of Diversity and Inclusion has 
                                                      been completed as well as the 
                                                      development of Burberry ' s 
                                                      global Diversity and Inclusion 
                                                      strategy, which was presented 
                                                      to the Board of Directors in 
                                                      March. 
                                                      -- An External Advisory Council, 
                                                      comprised of thought leaders 
                                                      from across the diversity and 
                                                      inclusion landscape, as well 
                                                      as an Internal 
                                                      Diversity and Inclusion Council, 
                                                      comprising Burberry employees, 
                                                      have been established to act 
                                                      as a sounding board for the 
                                                      implementation of the global 
                                                      Diversity and Inclusion strategy. 
                                                      -- The onboarding of a new VP 
                                                      of Employee Relations has seen 
                                                      the refinement of the Employee 
                                                      Relations operating model and 
                                                      a 
                                                      revision of our core policies 
                                                      and procedures. 
                                                      -- The rollout of a new global 
                                                      parental leave policy has seen 
                                                      an increase in the amount of 
                                                      paid leave globally for all 
                                                      employees, 
                                                      with all new parents receiving 
                                                      18 weeks ' paid leave and four 
                                                      weeks on reduced hours when 
                                                      they return to work. 
                                                      -- The celebration of global 
                                                      events such as World Mental 
                                                      Health Day, International 
                                                      Women ' s Day and Black History 
                                                      Month (in the USA) saw great 
                                                      participation across our global 
                                                      employee population. 
 
                                                      Wellbeing 
                                                      -- The rollout of the Smarter 
                                                      Working programme, underpinned 
                                                      by Microsoft technology platform 
                                                      and a new flexible working policy, 
                                                      has allowed employees to work 
                                                      more flexibly. 
                                                      -- 63 employees across the UK, 
                                                      Hong Kong S.A.R. and the UAE 
                                                      have now been trained as qualified 
                                                      mental health first aiders, 
                                                      with 
                                                      further courses scheduled. 
                                                      -- Our Employee Assistance Program 
                                                      is now available to all employees 
                                                      globally, offering a range of 
                                                      services, including individual 
                                                      counselling. 
--------------------------------------------------  --------------------------------------- 
 RISK TOLERANCE 
--------------------------------------------------  --------------------------------------- 
 We recognise the value and importance 
  of 
  successfully delivering our 
  Inspired People strategy and 
  therefore have a low tolerance 
  for risk in this area. 
-------------------------------------------------- 
 EXAMPLES OF RISKS 
-------------------------------------------------- 
 -- Loss of critical talent/knowledge/unmanageable 
  levels of attrition due to ongoing 
  transition period/change 
  fatigue and heightened by challenging 
  business conditions. 
  -- Failure to build the right 
  capabilities and behaviours 
  in our leadership population. 
  -- The long-term impact of the 
  UK ' s withdrawal from the EU 
  on the Group ' s EU workforce. 
  -- The impact of the downturn 
  in business performance related 
  to a macro event such as a global 
  health emergency. 
--------------------------------------------------  --------------------------------------- 
 

IT OPERATIONS

 
 IT operations fail to support critical processes across the 
  Group including Retail and Digital as well as Group functions, 
  such as Supply Chain and Finance. 
  Risk movement and outlook 
  The impact of this risk has increased, however, the likelihood 
  has reduced due to the progress made in upgrading legacy solutions, 
  which have increased resiliency and security. 
----------------------------------------------------------------------------- 
 LINK TO STRATEGY                      ACTIONS TAKEN BY MANAGEMENT 
------------------------------------  --------------------------------------- 
 All strategic pillars.                -- Establishment of an IT Portfolio 
                                        Forum with 
                                        Executive representation to 
                                        support IT investment decisions 
                                        and oversee delivery of prioritised 
                                        IT programmes and initiatives. 
                                        -- IT function has been strengthened 
                                        with clear alignment between 
                                        the IT teams, the strategic 
                                        pillars, business functions 
                                        and operations. 
                                        -- Implementation of Controls 
                                        to help maintain the continuity 
                                        of the Group ' s IT systems, 
                                        including business continuity 
                                        and IT recovery plans, which 
                                        would be implemented in the 
                                        event of a major failure. 
                                        -- A tested Group incident management 
                                        framework is in place to report, 
                                        escalate and respond to high 
                                        -- impact events. 
------------------------------------  --------------------------------------- 
 RISK TOLERANCE 
------------------------------------  --------------------------------------- 
 We adopt a strategy to avoid 
  or mitigate key risks to the 
  disruption of IT operations 
  wherever possible. 
------------------------------------ 
 EXAMPLES OF RISKS 
------------------------------------ 
 -- Failure to provide technology 
  platforms that meet customer 
  demands and support innovation 
  could result in failure to deliver 
  the strategy and loss of revenue. 
  -- Failure to provide stable 
  and resilient technology platforms 
  that meet business demands across 
  retail and corporate sites could 
  result in failure to deliver 
  the strategy and negatively 
  impact operations due to poor 
  system performance and/or system 
  outages. 
------------------------------------  --------------------------------------- 
 

BUSINESS INTERRUPTION

 
 A major incident impacts countries where the Group operates, 
  has its main locations or where its suppliers are located, 
  and significantly interrupts the business. This could be caused 
  by a wide range of events at a country level, including natural 
  catastrophe, pandemic or changes in regulations, through to 
  localised issues, such as fire, terrorism or quality control 
  failures. 
  Risk movement and outlook 
  The risk has been increased due to the ongoing COVID-19 pandemic 
  and the impact of longer term repercussions, a more uncertain 
  global economic environment and the potential for key suppliers 
  to face financial difficulty and ongoing political and regulatory 
  changes making it more difficult for the supply chain to source, 
  produce and ship products internationally. 
------------------------------------------------------------------------------------ 
 LINK TO STRATEGY                           ACTIONS TAKEN BY MANAGEMENT 
-----------------------------------------  ----------------------------------------- 
 Our Product and Distribution               -- We have policies and procedures 
  strategic pillars enable us                in place designed to ensure 
  to operate effectively and efficiently,    the health and safety of our 
  delivering Operational Excellence          employees and to deal with major 
  through continuity of supply               incidents, including business 
  of compliant products and services         continuity and disaster recovery. 
  of the highest quality to our              -- The Group continues to evolve 
  customers.                                 its supply chain organisational 
  Ensuring our ability to continually        design to develop its manufacturing 
  execute and operate key sites              base, reducing dependence on 
  and factories to develop, manufacture,     key sites and vendors. 
  distribute and sell our products           -- A Group incident management 
  is a key strategic priority.               framework is in place to ensure 
                                             that incidents are reported 
                                             and managed effectively. Across 
                                             the Group, our 
                                             Incident Management Teams managed 
                                             16 incidents in the year. The 
                                             two longest running incidents 
                                             were related to the Hong Kong 
                                             S.A.R. disruptions and the COVID-19 
                                             pandemic. In both cases, teams 
                                             worked to mitigate the 
                                             impact on our employees, customers 
                                             and the business. The remainder 
                                             of these incidents were localised 
                                             to fire and flood related issues 
                                             or 
                                             interruptions in the regular 
                                             running of stores, offices and 
                                             systems. 
                                             -- Our Group Incident Management 
                                             Team and Regional Incident Management 
                                             Teams all took part in training 
                                             and incident management exercises 
                                             involving large parts of the 
                                             Group, our customers and media 
                                             relations function. Our 
                                             plans as tested during the year 
                                             were found to be effective. 
                                             -- Our product suppliers and 
                                             vendors are subject to a quality 
                                             control programme, which includes 
                                             regular site inspections and 
                                             independent 
                                             product testing. 
                                             -- Robust security arrangements 
                                             are in place across our store 
                                             network to protect people and 
                                             products in case of security 
                                             incidents. 
                                             -- Business continuity plans 
                                             are in place for our 10 main 
                                             sites, including our three major 
                                             distribution centres and our 
                                             two UK factories. Business continuity 
                                             plans are being developed for 
                                             our third factory, Burberry 
                                             Manifattura in Italy. 
                                             -- The Group ' s key IT systems 
                                             are protected to prevent and 
                                             minimise any potential interruption. 
                                             This includes resilient design 
                                             and the provision of disaster 
                                             recovery services to continue 
                                             operating within pre-agreed 
                                             times in case of a major incident. 
                                             Our plans as tested during the 
                                             year were found to be effective. 
                                             -- Management regularly reviews 
                                             and manages business continuity 
                                             and disaster recovery risks, 
                                             recognising that these plans 
                                             cannot always ensure the uninterrupted 
                                             operation of the business, particularly 
                                             in the short term. 
                                             -- A comprehensive insurance 
                                             programme is in place to offset 
                                             the financial consequences of 
                                             insured events, including fires, 
                                             flood, natural catastrophes 
                                             and product liabilities. 
-----------------------------------------  ----------------------------------------- 
 RISK TOLERANCE 
-----------------------------------------  ----------------------------------------- 
 We have a low tolerance for 
  risk in this area, particularly 
  with respect to product safety 
  and quality. 
----------------------------------------- 
 EXAMPLES OF RISKS 
----------------------------------------- 
 -- Burberry operates three owned 
  factories and a global network 
  of storage and distribution 
  hubs. These face typical property 
  risks, such as fire, flood and 
  terrorism. 
  -- Burberry works with several 
  suppliers of luxury goods, which 
  could be difficult to replace 
  quickly. Their loss could interrupt 
  the delivery of core products 
  or a seasonal range. 
  -- A serious product quality 
  issue could 
  result in a product recall. 
  -- Socio-political tension, 
  like the gilets jaunes movement 
  in France, can significantly 
  impair local footfall and trade. 
  -- A global health emergency 
  impacts a key market, which 
  reduces consumption or significantly 
  impacts the supply chain. 
-----------------------------------------  ----------------------------------------- 
 

COMPLIANCE RISKS

REGULATORY RISK AND ETHICAL/ENVIRONMENTAL STANDARDS

 
 The Group ' s operations are subject to a broad spectrum of 
  national and regional laws as well as regulations in the various 
  jurisdictions in which we operate. 
  These include product safety, trademarks, competition, data, 
  corporate governance, employment, tax and employee and customer 
  health and safety. Changes to laws and regulations, or a major 
  compliance breach, could have a material impact on the business. 
  Risk movement and outlook 
  The relative significance of this risk has increased because 
  of the changing regulatory environment despite the mitigating 
  steps we have taken to ensure compliance. 
---------------------------------------------------------------------------------- 
 LINK TO STRATEGY                          ACTIONS TAKEN BY MANAGEMENT 
----------------------------------------  ---------------------------------------- 
 Compliance with applicable laws           -- The Group monitors and seeks 
  and regulations and behaving              to continuously improve processes 
  in accordance with our values             to gain assurance that its licensees, 
  as a business underlie all our            suppliers, franchisees, distributors 
  strategic pillars.                        and agents comply with the Group 
                                            ' s contractual terms and conditions, 
                                            its ethical and 
                                            business policies, and relevant 
                                            legislation. 
                                            -- Specialist teams at corporate 
                                            and regional level, supported 
                                            by third -- party specialists 
                                            where required, are responsible 
                                            for ensuring the Group's compliance 
                                            with applicable laws, ethical 
                                            and business policies and regulations, 
                                            and that 
                                            employees are aware of the polices, 
                                            laws and regulations relevant 
                                            to their roles. 
                                            -- Ethical trading, environmental 
                                            sustainability and community 
                                            investment matters reported 
                                            to the Ethics Committee, Risk 
                                            Committee and the Board. 
                                            -- Assurance processes are in 
                                            place to monitor compliance 
                                            in a number of key risk areas, 
                                            with results being reported 
                                            to our Risk Committee and Audit 
                                            Committee. 
                                            -- We have an established framework 
                                            of policies that aim to drive 
                                            best practice across our direct 
                                            and indirect operations, including 
                                            our Responsible Business Principles 
                                            and Global Environmental Policy. 
                                            Policies available at 
                                            Burberryplc.com, are owned by 
                                            senior leadership and are issued 
                                            to all supply chain partners. 
                                            Their implementation is monitored 
                                            on a regular basis. 
                                            -- We have established a Data 
                                            Privacy Steering Committee to 
                                            oversee compliance with applicable 
                                            data legislation. 
                                            -- International tax reform 
                                            is a key focus of attention 
                                            with significant developments 
                                            reported to the Audit Committee. 
                                            -- We have a wide range of global 
                                            programmes that tackle educational 
                                            inequality, foster community 
                                            cohesion and enhance social 
                                            and economic empowerment. 
                                            -- Rollout of annual mandatory 
                                            training to all employees and 
                                            to targeted functions 
                                            to ensure awareness and compliance 
                                            with our policies governing 
                                            anti-bribery and anti-corruption 
                                            (ABAC), Market Abuse Regulations, 
                                            annual conflict declarations, 
                                            criminal finances, anti-money 
                                            laundering and privacy. 
                                            -- Our culture and policies 
                                            encourage employees to speak 
                                            up and report any issues 
                                            without fear of retribution. 
                                            A global confidential employee 
                                            helpline is in place in almost 
                                            all countries where we have 
                                            retail or corporate locations, 
                                            and where it is legally permitted. 
                                            All calls and emails are logged 
                                            and independently reviewed and 
                                            followed up. During the year 
                                            158 cases were received and 
                                            the results and 
                                            themes are reviewed by the Ethics 
                                            Committee. No significant issues 
                                            were identified from these cases 
                                            during the year. 
                                            -- In accordance with our ABAC 
                                            policy, annual training is required 
                                            to be performed. This year the 
                                            annual e-learning module was 
                                            rolled out to all corporate 
                                            staff and manufacturing and 
                                            retail employees of manager 
                                            level and above, a total of 
                                            3,614 employees. The training 
                                            reached a 96% completion rate. 
                                            Any incidents or potential areas 
                                            of concern are investigated 
                                            by highly 
                                            experienced investigators in 
                                            our Asset and Profit Protection 
                                            team and ABAC risks are covered 
                                            as part of the scope of Internal 
                                            Audit reviews. During the year 
                                            there were no ABAC -- related 
                                            issues. 
----------------------------------------  ---------------------------------------- 
 RISK TOLERANCE 
----------------------------------------  ---------------------------------------- 
 In complying with laws and regulations, 
  including customer and employee 
  safety, and bribery and corruption, 
  we have a low tolerance for 
  risk. 
---------------------------------------- 
 EXAMPLES OF RISKS 
---------------------------------------- 
 -- Regulatory non-compliance. 
  -- Failure by the Group or associated 
  third parties to act in an ethical 
  manner consistent with our Code 
  of Conduct and our Responsibility 
  Agenda, for example with regard 
  to model well-being. 
  -- Non-compliance with labour, 
  human rights and environmental 
  standards across our own 
  operations and extended supply 
  chain could result in financial 
  penalties, disruption in production 
  and reputational damage to our 
  business. 
  -- Failure to comply with GDPR 
  and/or equivalent applicable 
  data protection legislation 
  globally. 
  -- Tax is a complex area where 
  laws and their interpretations 
  are changing regularly. Non-compliance 
  by Burberry and its associated 
  third parties in this area could 
  result in unexpected tax and 
  financial loss. 
----------------------------------------  ---------------------------------------- 
 

INTELLECTUAL PROPERTY AND BRAND PROTECTION

 
 Sustained breaches of Burberry ' s intellectual property (IP) 
  rights or allegations of infringement by Burberry pose risk 
  to the brand. Counterfeiting, copyright, trademark and design 
  infringement in the marketplace could reduce demand for genuine 
  Burberry merchandise. 
  Failure to implement appropriate brand protection controls 
  in connection with our commitment to stop destroying unsaleable 
  finished products could negatively impact the integrity and 
  the luxury positioning of the brand. 
  Risk movement and outlook 
  The likelihood of risk has increased in the past year for 
  several reasons, including the increased brand heat under 
  our new creative direction; the frequent launch of new designs 
  and motifs, which may not always be immediately protected, 
  and the potential increase of sales in the parallel market 
  in light of the COVID-19 pandemic. 
--------------------------------------------------------------------------------- 
 LINK TO STRATEGY                           ACTIONS TAKEN BY MANAGEMENT 
-----------------------------------------  -------------------------------------- 
 Protecting the integrity of                -- The Group ' s global Brand 
  the brand, safeguarding and                Protection team is responsible 
  elevating its luxury position,             for brand protection efforts 
  complying with applicable laws             globally, online and offline. 
  and regulations and doing the              Where infringements are identified 
  right thing underlie all our               these are addressed through 
  strategic pillars.                         a mixture of criminal, civil 
                                             and administrative legal action 
                                             and negotiated settlements. 
                                             -- Trademarks, copyrights and 
                                             designs are registered globally 
                                             across all appropriate categories. 
                                             -- The Brand Protection team 
                                             partners closely with the design 
                                             and merchandising teams to ensure 
                                             that our products do not infringe 
                                             the rights of third parties 
                                             and to ensure that we have adequate 
                                             protections in place prior to 
                                             market entry. 
                                             -- The teams explore new and 
                                             emerging threats and ways to 
                                             combat threats. 
                                             -- The team partners regionally 
                                             with enforcement agencies and 
                                             our digital partners to minimise 
                                             the visibility of counterfeit 
                                             and parallel trade products 
                                             both online and offline. 
                                             -- We aim to disrupt the flow 
                                             of counterfeit products by enforcing 
                                             at source level. 
                                             -- Brand protection controls 
                                             have been implemented to safeguard 
                                             the brand in connection with 
                                             our commitment to stop destroying 
                                             unsaleable finished products. 
-----------------------------------------  -------------------------------------- 
 RISK TOLERANCE 
-----------------------------------------  -------------------------------------- 
 We have a low tolerance for 
  risk in protecting the integrity 
  of the brand, asserting our 
  IP rights while ensuring due 
  respect is given to the IP rights 
  of others. 
----------------------------------------- 
 EXAMPLES OF RISKS 
----------------------------------------- 
 -- Counterfeiting, parallel 
  trade, copyright, trademark 
  and design infringement in the 
  marketplace can reduce the demand 
  for genuine Burberry merchandise 
  and impact revenues. 
  -- Unauthorised use of trademarks 
  and other IP, as well as the 
  unauthorised sale of Burberry 
  products and distribution of 
  counterfeit products, damages 
  Burberry's brand image 
  and profits. 
  -- Brand heat as well as sophistication 
  in counterfeiters ' ability 
  to manufacture at pace have 
  increased infringements and 
  counterfeiting of our brand. 
  -- New branding may not immediately 
  be protected and we must rely 
  on national laws to secure IP 
  rights, which afford varying 
  degrees of protection and enforcement 
  opportunities depending on the 
  country. 
  -- Allegations from third parties 
  of IP infringement by Burberry 
  could negatively impact Burberry's 
  reputation, result in claims 
  and financial loss through withdrawing 
  infringing products. 
  -- Distribution outside of our 
  authorised network could negatively 
  impact the demand for Burberry 
  products and negatively impact 
  our luxury reputation. 
-----------------------------------------  -------------------------------------- 
 

CLIMATE CHANGE RISKS

CLIMATE CHANGE

 
            The success of our business over the long term will depend 
             on the social and environmental sustainability of our operations, 
             the resilience of our supply chain and our ability to manage 
             the impact of any potential climate change on our business 
             model and performance. 
             As the global climate crisis becomes more critical we recognise 
             the importance of addressing long-term sustainability challenges 
             and the potential impacts of climate change on our business, 
             in reputational, operational and financial terms. Failure 
             to implement appropriate cross-functional action plans, incorporating 
             the recommendations of the Taskforce on Climate-related Financial 
             Disclosures (TCFD) and Science Based Targets initiative, could 
             hinder efforts to mitigate long-term risks and future-proof 
             our business. 
             Risk movement and outlook 
             The risk of climate change has increased and will continue 
             to increase incrementally year on year without significant 
             global effort, including our network of suppliers, and adaptation 
             across companies and countries. 
------------------------------------------------------------------------------------- 
 LINK TO STRATEGY                         ACTIONS TAKEN BY MANAGEMENT 
---------------------------------------  -------------------------------------------- 
 Our commitment to being an industry      Physical Risks 
  leader in responsible and sustainable    -- To help identify future areas 
  luxury underpins our vision              for focus to mitigate climate-related 
  to establish ourselves firmly            physical risks we completed 
  in luxury fashion and deliver            three scenario analysis workshops, 
  sustainable, long-term value.            which assessed long-term environmental, 
                                           social and technological trends. 
                                           -- In the short term, we are 
                                           conducting specific analysis 
                                           of the acute risk of our locations 
                                           and operations. 
                                           -- We have assessed the climate 
                                           change risk in our finished 
                                           goods and raw material supply 
                                           chain by evaluating the exposure, 
                                           vulnerability 
                                           and readiness of the countries 
                                           we operate in and where our 
                                           key supply chain partners are 
                                           located. 
                                           -- In our own operations and 
                                           supply chain we continue to 
                                           use the WWF water risk assessment 
                                           tool and the Aqueduct Water 
                                           Risk Atlas to 
                                           identify current risks, anticipate 
                                           potential future strains on 
                                           water resources, and understand 
                                           emerging long-term risks. 
                                           -- We use science-based targets 
                                           to focus our efforts in order 
                                           to address GHG emissions along 
                                           our entire value chain. This 
                                           is described in our Responsibility 
                                           section (page 67). 
                                           -- We support a number of industry 
                                           initiatives that address climate 
                                           change impacts, including the 
                                           Ellen MacArthur Foundation ' 
                                           s Make 
                                           Fashion Circular Initiative, 
                                           New Plastics Economy Global 
                                           Commitment, UN Fashion Industry 
                                           Charter for Climate Change, 
                                           The 
                                           Fashion Pact and the SFA. 
                                           -- We invest in programmes that 
                                           help to sustain our industry 
                                           and supplier communities, specifically 
                                           initiatives that tackle educational 
                                           inequality, support social and 
                                           economic development and community 
                                           cohesion. 
                                           -- In FY 2019/20, we established 
                                           a Regeneration Fund to support 
                                           insetting projects in the supply 
                                           chain that will reduce the carbon 
                                           impact of our raw materials 
                                           and improve biodiversity and 
                                           local 
                                           producer livelihoods. 
                                           -- We continuously engage and 
                                           educate employees around the 
                                           topic of climate change through 
                                           focused events, strategic communications 
                                           and volunteering opportunities. 
 
                                           Transitional Risks 
                                           -- Through our memberships with 
                                           various industry bodies, associations 
                                           (for example, The Climate Group) 
                                           and external assurance partners, 
                                           we contribute to consultations 
                                           and are kept informed of upcoming 
                                           environmental legislative changes. 
                                           -- Environmental sustainability 
                                           matters are reported to the 
                                           Sustainability Steering Group, 
                                           the Ethics Committee, the Risk 
                                           Committee and the Board. 
                                           -- Our longstanding responsibility 
                                           programmes, coupled with our 
                                           2022 Responsibility goals, are 
                                           driving continuous improvements 
                                           in moving beyond social and 
                                           environmental compliance. 
                                           -- We identify and explore scarce 
                                           resources while also developing 
                                           alternative materials through 
                                           research and development. 
                                           -- Our target is for 100% of 
                                           our products to have more than 
                                           one positive attribute by 2022. 
                                           -- We continue to increase our 
                                           sustainable product mix, by 
                                           including recycled content, 
                                           bio-based materials and more 
                                           sustainable cotton in our collections. 
                                           We have also worked directly 
                                           with cotton growers in the USA 
                                           to develop a fully traceable 
                                           organic cotton supply for the 
                                           future. 
                                           -- In FY 2019/20 we assessed 
                                           the potential impact of commodity 
                                           price changes over the medium 
                                           term. 
                                           -- In FY 2019/20 we introduced 
                                           our product sustainability messaging 
                                           to make customers aware of our 
                                           improved sustainability credentials. 
                                           We also increased sustainability 
                                           messaging in brand-related communications. 
                                           -- As part of scenario analysis 
                                           workshops we assessed long-term 
                                           technological trends that could 
                                           significantly impact our business 
                                           model. 
                                           -- Our IT Innovation team is 
                                           exploring new systems and ways 
                                           in which sustainability priorities 
                                           can be supported by advancements 
                                           in technology. 
                                           -- We continue to increase our 
                                           focus on zero-waste mindset 
                                           across the business and have 
                                           a clearly defined waste hierarchy. 
                                           We have 
                                           established a waste baseline 
                                           and are setting targets and 
                                           KPIs that will cover operational, 
                                           manufacturing and finished goods 
                                           waste as well as packaging. 
                                           Since FY 2018/19 we have publicly 
                                           committed to not destroying 
                                           unsaleable finished products. 
                                           -- Our climate goals are approved 
                                           by the Science Based Targets 
                                           initiative (SBTi) and in line 
                                           with the Paris Agreement goal 
                                           of reducing carbon levels to 
                                           keep the global temperature 
                                           increase under 1.5˚C. 
                                           -- In line with the increased 
                                           expectations of our stakeholders, 
                                           we are providing more transparency 
                                           in our corporate reporting, 
                                           as well as disclosing a number 
                                           of Environmental, Social and 
                                           Governance (ESG) investor indices. 
---------------------------------------  -------------------------------------------- 
 RISK TOLERANCE 
---------------------------------------  -------------------------------------------- 
 We have a low tolerance for 
  risk, when it comes to protecting 
  the human and environmental 
  resources we all depend on. 
  However, given the long-term 
  nature of some sustainability 
  risks and the level of uncertainty 
  associated with their occurrence 
  and impact, we accept that some 
  risks are inevitable. We therefore 
  focus on helping to minimise 
  global risks 
  while building resilience in 
  our operations 
  and supply chain. 
--------------------------------------- 
 EXAMPLES OF RISKS 
--------------------------------------- 
 Physical risks 
  Acute 
  -- Increased severity of extreme 
  weather events, from floods 
  to droughts, could cause disruption 
  in our supply chain, impact 
  our business model and affect 
  the sourcing of raw materials, 
  as well as the production and 
  distribution of finished goods. 
  Chronic 
  -- Our industry is sustained 
  by many agricultural 
  and manufacturing communities 
  around the world. Longer-term 
  shifts in climate patterns 
  and loss of biodiversity caused 
  by changes in 
  precipitation patterns, rising 
  mean temperatures and rising 
  sea levels could cause social, 
  economic and operational challenges. 
  -- Failure to address and mitigate 
  these risks 
  could result in resource availability 
  limitations 
  (for example cotton, leather 
  and cashmere) 
  and disruptions to key operations. 
 
  Transitional Risks 
  Policy and Legal 
  -- Increased regulation and 
  more stringent 
  environmental standards could 
  impact our business by affecting 
  production costs and 
  flexibility of operations. 
  Market 
  -- Resource scarcity, coupled 
  with increasing 
  demand and changes in customer 
  behaviour, 
  could affect the production, 
  availability, quality 
  and cost of raw materials. 
  Technology 
  -- Substitution and transition 
  costs associated 
  with implementing new technologies 
  that enable 
  sustainability and climate change 
  initiatives. 
  Reputation 
  -- Failure to meet consumer 
  demand regarding sustainability 
  could threaten our relationship 
  with customers, employees, regulators 
  and interest groups, which could 
  impact Group revenues. 
---------------------------------------  -------------------------------------------- 
 

Gemma Parsons

Company Secretary

Burberry Group plc

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

END

ACSURVNRRBUNAAR

(END) Dow Jones Newswires

June 10, 2020 13:15 ET (17:15 GMT)

Burberry (LSE:BRBY)
Gráfica de Acción Histórica
De Ago 2020 a Sep 2020 Haga Click aquí para más Gráficas Burberry.
Burberry (LSE:BRBY)
Gráfica de Acción Histórica
De Sep 2019 a Sep 2020 Haga Click aquí para más Gráficas Burberry.