Myer Holdings' Sustainability Performance Analysis

This assignment requires a thorough analysis of Myer Holdings Limited's sustainability performance. Students must examine both the company's annual report and its dedicated sustainability report to assess its social, economic, and environmental impact. The analysis should cover aspects like financial performance, waste minimization, carbon emissions, customer satisfaction, employee welfare, and ethical business practices. Finally, students are expected to draw conclusions about Myer Holdings' commitment to sustainable growth.

Accounting for Managers
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Contents
Introduction......................................................................................................................................3
Financial/Economic performance....................................................................................................3
Environmental Performance............................................................................................................6
Social Performance..........................................................................................................................8
Conclusion.....................................................................................................................................10
References......................................................................................................................................11
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Introduction
The business corporations nowadays are largely emphasizing on developing their
sustainability or Corporate Social Responsibility (CSR) report for providing knowledge to the
stakeholders regarding their economic, social and environmental performances. The business
corporations in order to promote transparency in their operational activities need to timely
disclose both their financial and non-financial performance to the end-users for achieving their
trust and confidence. This is essential for promoting their sustainable growth and development
through promoting the goodwill in the market and thus attracting potential investors. In this
context, the present report aims to analyze and examine the economic/financial, social and
environmental performance of Myer Holdings Limited. The financial/economic performance is
analyzed through examining the profitability of the company though undertaking a comparison
analysis with the previous financial year results. The environmental performance is analyzed
through examining the strategies adopted by the company for protection of environment and
social performance is examined through the measures taken by it for promoting the welfare of its
stakeholders.
Financial/Economic performance
Myer Holdings Limited has about 66 stores across Australia involved in providing wide range of
products to its customers in the fashion, cosmetic and home section. The company is recognized to be
largest department store chain in Australia listed on ASX and have maintained its dominant position in
the market by outperforming its competitors. The company has maintained a good financial position in
the international market as indicated by its financial results of the year 2014. The company has reported
total sales of about $3,143 million at the end of financial year 2014. The sales of the company have
increased by 1.2 per cent in the year 2014 as compared to the previous year indicating the growth of the
company. The significant investment have been made in its key areas including online resources,
diversifying brand portfolio and increasing the store network for strengthening its competitive position in
the global market place. The exclusive brands of the company in the categories of cosmetics, women’s
footwear, handbags and appliances have recorded a sales growth of about 1.7 per cent in the financial
year 2014 in comparison to previous year results to about $638.2 million. However, the company has also
reported a decline in its net profit after tax to about 22.6 per cent in comparison to the previous year due
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to deprecation of Australian dollar and the significant expenditures incurred by it on developing new
products (Myer Holdings Limited: Annual Report, 2014).
The company has also reported an increase of about 3.3 per cent in its CODB (Cash Cost of
Doing Business) due to the significant investment made by the company in achieving its strategic goals
and objectives of business expansion. The company has maintained a strong cash position through out the
year as reflected from its stable balance sheet (Brealey, 2012). The board of Directors of the company has
declared a dividend of 5.5 per cent per share reflecting its strong financial growth contributing to a full
year dividend of about 14.5 per cents. The board has maintained a positive outflow regarding the financial
performance of the year 2015 by deciding a payout ration of 86 per cent through adoption of such a
dividend policy. The company has also adopted effective sustainable strategies and practices for
addressing the environmental, social and economic impacts of its business operations and strategies. The
company has aligned its growth strategies with its sustainable performance for promoting the economic
development (Myer Holdings Limited: Annual Report, 2014). The financial position of Myer Holdings
Limited can be evaluated through comparing the financial results of the past two financial years as
follows:
Myer Holdings Limited:
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Financial Year 2014 Financial Year 2013
Total Assets 1,933(in AUD Million) 1,940(in AUD Million)
Total Liabilities 1,039 (in AUD Million) 1,044 (in AUD Million)
Total Owners Equity 893 (in AUD Million) 896 (in AUD Million)
Profit earned-per share 0.17 (AUD) 0.17 (AUD)
Total Ordinary Shares Issued 593 million 736 million
Profit received by
shareholders-per share (DPS)
0.23 (AUD) 0.25 (AUD)
Net Cash flows from Investing
Activities
104 (in AUD Million) 67(in AUD Million)
As reflected from comparing the financial performance of the company over the past two years, it
can be said that the company’s performance has improved in the FY2014 as compared to that of FY2013.
The company has reported a decrease in its liabilities and the cash inflows have significant increased in
the year 2014 as compared to the previous year (Myer Holdings Limited: Annual Report, 2014).
The major competitor of Myer Holdings is Woolworths Limited and its financial performance can be
illustrated as follows:
Woolworths Limited:
Financial Year 2014 Financial Year 2013
Total Assets 24,205 (in AUD million) 22,250 (in AUD million)
Total Liabilities 13,222 (in AUD million) 13,953 (in AUD million)
Total Owners Equity 10,253 (in AUD million) 9,028 (in AUD million)
Profit earned-per share 1.95 (AUD) 1.82 (AUD)
Total Ordinary Shares Issued 1,243 (million) 1,253 (million)
Profit received by
shareholders-per share (DPS)
1.36 (AUD) 0.62 (AUD)
Net Cash flows from Investing
Activities
2,031 (in AUD million) 1,202 (in AUD million)
The comparison of the financial performance of Myer Holdings Limited with its major
competitor, that is, Woolworths Limited, it can be said that Myer’s need to devise strong competitive
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strategies for outperforming its competitors. The Woolworths have a strong financial position with
increased profitability and cash inflows as compared to Myer Holdings limited. This is because
Woolworths have received success from its business expansion straggles and thus its sale revenue has
significantly improved in the past years (Woolworths Limited : Annual Report, 2014). However, Myer’s
is still planning to expand its business operations and thus have not received a competitive advantage over
its competitors. The company needs to execute its growth strategy of diversification appropriately for
achieving success and thus strengthening its global competitiveness in the market place. For achieving
this, the company is significantly investing in improving its operational capabilities through adopting the
use of online technology and device. Also, it has invested in its store network for proving better services
to the customers and thus driving its sales revenue through achieving customer satisfaction. The
implementation of latest online technology and devices is essential for the company to achieve a
competitive advantage in the marketplace (Myer Holdings Limited: Annual Report, 2014). The company
is expecting to realize its sales benefits from its strategic initiatives in the coming period of time and thus
improving its competitive image in the marketplace (Atrill, McLaney and Harvey, 2014).
Environmental Performance
The company Myers is committed towards minimizing the impact of its operations on the
environment. It possesses a quite responsible role towards maintaining and integrating environmental
management practices and accountability for the same throughout their business practices
(Myer.Sustainability Report, 2014). Due to everyday emission of smoke and discharge of other chemicals
in air as well as other natural resources the environment is becoming polluted day by day which is a
serious threat to the human and other living organisms (DuBrin, 2011). In such a time, Myers has
understood its responsibility towards the environment and its has incorporated environment friendly
practices in their business operations. As the brand Myers is famous for its rich heritage of style, fashion
and community engagement it is quite important for the company to accept roles through which it can
motivate its customers towards making environment healthy (Myer.Sustainability Report, 2014). Myers
has driven itself on the principle of sustainability and is committed towards building a socially
responsible business. Myers believes that to manage all the aspects of sustainability it is important to
integrate responsibility and actions into everyday operations of the business. Myers has considered and
addresses various factors such as environmental, ethical, economic, and social aspects in order to bring
sustainability in the functions of business (Myer.Sustainability Report, 2014).
Myers has focused its efforts to minimize the environmental impacts of energy use and associated
carbon emissions, waste management and packaging of recycled products. With a network of 67 stores,
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the use of energy is one of the most important and significant area of concern for Myers. The company
understands its responsibility as a part of global community to minimize the economic, social and other
environmental impacts of use of energy through minimizing carbon emissions (Setchi, Howlett and
Theobald, 2016). Considering all these factors Myers has developed an Energy Management Strategy, in
which the company has decided a target of 10 percent reduction in energy intensity by the year 2018 from
2012. The company measures energy intensity as kilojoules of energy used per square meter of floor
area. In the year 2014, the company has achieved a 6 percent reduction in energy which is quite less as
compared to the last year. There are various aspects included in the Energy Management Strategy such as
building management system upgrades, wiring configurations confirmation, heating and cooling system
upgrades etc (Myer.Sustainability Report, 2014).
Myers has calculated its use of energy and energy emissions on the basis of Australian National
Greenhouse and Energy Reporting Scheme which is managed by the Australian Clean Energy Regulators.
Myers has concentrated its attention on increasing the use of recyclable packaging materials as the
company is a signatory of Australian packaging Covenant (Myer.Sustainability Report, 2014). In the year
2014 the company rated as a high performer in the covenant. Another program which is called Floor
Ready is aimed to achieve in-store product handling efficiencies and also achieve sustainable packaging
design. By the end of July 2014, most of the direct suppliers of Myers have signed the Floor Ready
agreement and almost 70 percent of them were working in compliance with the standards of the Floor
Ready agreement. As Myers is working towards reducing its energy emissions, it is also working towards
waste management and product recycling (Myer.Sustainability Report, 2014). The company has
formulated an extensive recycling program in all its stores, distribution centers and support offices. A
specialized recycling program for retail stores has been designed which look after security tags, clothes,
hangers, plastic film and paper cardboards. The support office of the company also recycles organics and
paper towels (Myer.Sustainability Report, 2014).
In addition to this, the excessively damaged products, samples and returns are recycled and
reused by the third party suppliers. The plastic carry bags of Myers has also raised questions among the
public because the company follows a sustainable route for the business operations and still it is providing
its customers plastic carry bags. However the company clarifies the truth behind its plastic carry bags as
they are made from low density polythene (Myer.Sustainability Report, 2014). These bags are strong,
cost effective and are suitable for the purpose of handling customer’s purchases (Azevedo, Brandenburg,
Carvalho and Cruz-Machado, 2014). Apart from this, they are also environmental friendly. Apart from
creating new projects for environment, the company has also started to take small steps such as turning
off lights while not in use (Salvadó et al, 2012). The steps taken by the company has certainly proved
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beneficial for the company has well as the environment (Rennings,et al, 2012). There is considerable
reduction in the operating cost of the company. The company has made certain changes in the year 2014
to achieve energy reductions (Myer.Sustainability Report, 2014).
The company has resolved the serious problem of electrical circuit in Fountain Gate of Victoria.
The strategy has caused lightening to be on for longer period than needed. Another strategy has provided
a standardization of lightening and air conditioning schedules and it has also aided in reconfiguring the
electrical lighting circuits in Wollongong, New South Wales (Myer.Sustainability Report, 2014). A
building management system is implemented in Belconnen and Canberra, the Australian Capital
Territory. It has helped in achieving optimization and fine turning initiative. The environmental friendly
techniques of the company have also helped in reconfiguring the electrical circuit load and repairing
mechanical air-conditioning faults in Adelaide, in South Australia. In addition to this the company has
also done their re-wiring of their lighting circuits, switching escalators on and off and application of
Myers standard settings in every day operations has proved quite beneficial for the company. In this
Myers has tried to maintain its use of energy in its daily operations (Myer.Sustainability Report, 2014).
The company is participating effectively in the community programs in order to contribute efficiently to
sustainable development through its well trained, skilled and aware staff (Fernie et al., 2013).
Social Performance
In the end of the financial year 2014, Myers had more than 13000 team members. Myers believes
that a motivated team is quite essential for the overall success of the company and the company has
achieved 75 percent of retention rate of employees in the financial year 2014 (Myer.Sustainability Report,
2014). The company has carried our various exercises that show that the company is good at
employment engagement. One such survey was your Say in which Myers has achieved outstanding
employee engagement rating of 83 percent (Myer.Sustainability Report, 2014). The work environment of
the company is supportive and rewarding at the same time (Phillips and Connell, 2004). The company
provides its employees various benefits such as Myer shopping discount, flexible working hours and quite
a wide range of leave options (Myer.Sustainability Report, 2014).
Myers has a diversity policy in which the company supports gender, age, caste, disability,
language and cultural diversity. This policy is applicable in the whole working and operating environment
of the company (Nemeth, 2011). From top level managers to ground level staff all are abide with the
diversity policy of the company. The role of female staff in the management of the company is quite
significant and vital. In the financial year 2014, the company has tried to build a customer focused
culture in the stores through its program called ‘Delivering Delightful Service and Selling’ program
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(Myer.Sustainability Report, 2014). In addition to this the company has also developed a new individual
progress review discussion, in this the team members of team and managers were required to meet twice
in a year in order to review progress, identifying the areas which require attention and recognize the
achievements. Apart from this the year 2014 also focused on the development of leadership qualities in
the individual, for this the company has deigned various workshops that helped in supporting the office
leaders. Myers takes care of their employees and treats them as their assets and it also arranges various
kinds of on job training for them so that its employees can remain up to date with the happenings of the
market (McCrie, 2015).
Myers offers various on job training, instructor led training and online modules which provides
an opportunity to the employees to enhance their capabilities. All the training sessions are designed for a
year, in which the employees participate in both types of training sessions such as instructor led training
and online training (Blair and Roe, 2010). The training sessions are not restricted to only certain staff
members, the store team members also participate in new technology training systems so that in order to
support the company new initiative which is ‘My Customer Orders’ IPad initiative (Myer.Sustainability
Report, 2014). The survey Your Say conducted by the company indicated that amongst the four important
areas, the one area which requires attention was training and development so Myers has decided that this
area will the area of focus for the company in the year 2015.
In addition to this the company has a wide range of recognition programs in order to celebrate
individual and team performance. In the annual Myers people recognition awards, the company has
appraised and recognized individuals who had performed their best in order to achieve the overall goal of
the company which also includes safety, sustainability and community contribution. The company has
also celebrated the loyalty of the employees who are associated with the company with more than 25
years. Apart from recognition, safety of employees is another major aspect in Myers. The company’s Lost
Time Injury Frequency Rate has shown consistent reduction for the past five years (Myer.Sustainability
Report, 2014). The company has maintained a strong focus on the safety the safety management from
hazards, awareness of team members and active safety committees that are present at all the sites of the
company.
Apart from this, InjuryNet program of the company also provides early and easy access to the
network of doctors, medical staff and physiotherapists. This program is quite beneficial for the employees
as the program provides real time access to the medical staff. The self-insurance license of the company is
working in compliance with the legislative obligations and effective safety and health system that help in
delivering injury and illness prevention. The renewal audits of the license are also carried on time to time
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basis (Myer.Sustainability Report, 2014). All these programs show that company is quite concerned
about the safety and security of its staff. Apart from this different training sessions organized by the
company also suggests that the team members can participate in different types of training programs at a
time (Phillips and Edwards, 2008).
Conclusion
It can be inferred from the overall discussion held in the report that it is essential for the business
corporations to improve their sustainable performance through disclosing their social, economic and
environmental performance. The sustainable and financial reports of Myer Holdings have depicts that it is
strongly emphasizing on achieving sustainable growth through providing adequate information regarding
the impact of its business operations on social, economical and environmental front. The company has
achieved a good financial position through implementing effective growth strategies. Also, it has
improved its environmental performance through implementing proper plans for waste minimization and
carbon emission. The company has placed the customers at the center of all its strategies for achieving
their satisfaction and thus driving its sales and growth. Also, it places special emphasis on promoting the
welfare of its employees through developing proper remuneration policies and providing them a healthy
workplace environment.
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References
Atrill, P., McLaney, E. and Harvey, D. 2014. Accounting: An Introduction, 6/E. Pearson Higher
Education AU.
Azevedo, S.G., Brandenburg, M, Carvalho, H. and Cruz-Machado, V. 2014. Eco-Innovation and the
Development of Business Models: Lessons from Experience and New Frontiers in Theory and Practice.
Springer.
Blair, M. and Roe, M.J. 2010. Employees and Corporate Governance. Brookings Institution Press.
Brealey, R.A. 2012. Principles of Corporate Finance. Tata McGraw-Hill Education.
DuBrin, A.J. 2011. Essentials of Management. Cengage Learning.
Fernie, J. et al. 2013. Principles of Retailing. Routledge.
McCrie, R. 2015. Security Operations Management. Butterworth-Heinemann. ed. 3rd.
Myer Holdings Limited. 2014. Annual Report.
Myer: Sustainability Report. 2014. [Online] Available at:
file:///C:/Users/user/Downloads/1701840_805498613_MyerSustainability2014.pdf [Accessed on: 29
September 2017].
Nemeth, C.P. 2011. Private Security and the Law. Elsevier.
Phillips, J.J and Connell, A.O. 2004. Managing Employee Retention. Routledge.
Phillips, J.J and Edwards, L. 2008. Managing Talent Retention: An ROI Approach. John Wiley & Sons.
Rennings, K., et al. 2012. Sustainable Energy Consumption in Residential Buildings. Springer Science &
Business Media.
Salvadó, J.A., Castro, G.M.D., Verde, M.D. and López, J.E.N. 2012. Environmental Innovation and Firm
Performance: A Natural Resource-Based View. Springer.
Setchi, R., Howlett, R.J and Theobald, P. 2016. Sustainable Design and Manufacturing. Springer.
Woolworths Limited. 2014. Annual Report. [Online] Available at:
http://www.annualreports.com/HostedData/AnnualReportArchive/W/ASX_WOW_2014.pdf [Accessed
on: 29 September 2017].
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