Kingfisher Plc · LSE:KGF
Kingfisher — H1 2023/24 Earnings Presentation
39 slides from Kingfisher's earnings presentation, Sep 19, 2023
Slide 1: Kingfisher plc Half Year Results
Kingfisher plc Half Year Results Six months to 31 July 2023 19 September 2023
Slide 2: Disclaimer
Disclaimer You are not to construe the content of this presentation as investment, legal or tax advice and you should make your own evaluation of the Company and the market. If you are in any doubt about the contents of this presentation or the action you should take, you should consult a person aut
Slide 3: Welcome & agenda
Welcome & agenda Thierry Garnier (CEO): Introduction Key messages and H1 highlights Bernard Bot (CFO): H1 23/24 results Performance overview Effective supply chain and cost management Cash, debt and liquidity FY 23/24 outlook & guidance Thierry Garnier (CEO): Operational & strategic update Strong &
Slide 4: Key messages
Key messages Group H1 sales slightly ahead of expectations; adjusted PBT of £336m Positive UK & Ireland sales, resilience at Castorama France and weaker at Brico Dépôt, difficult trading environment in Poland Resilient sales from core and ‘big-ticket’ categories (78% of sales), volumes showing an im
Slide 5: H1 financial highlights
H1 financial highlights Resilient overall sales performance despite impacts Total sales -1.0%(1) from unseasonal weather and weak macro & consumer LFL -2.2% Q1 LFL -3.3%, Q2 LFL -1.2% Sequential improvement in Q2 Q3 LFL to date(2) -2.4% 16.8% sales penetration (+1.2% YoY) E-commerce sales +7.1% YoY
Slide 6: H1 trading impacted by unseasonal weather in March and July
H1 trading impacted by unseasonal weather in March and July; resilience in core & ‘big-ticket’ Unseasonal weather conditions heavily impacted trading in March and July Group LFL sales (%) Seasonal Seasonal 0.5% 1.0% -27% -22% -0.8% -2.5% -2.2% -3.8% -6.9% Feb Mar Apr May Jun Jul H1 Q1 Group LFL: -3.
Slide 7: Diverse regional sales trends and performance in H1
Diverse regional sales trends and performance in H1 Mixed macro and housing indicators H1 LFL: +1.7% but very resilient consumer ― Good performance at B&Q especially in UK & “Improve, not move” trend supporting Core & ‘big- core and ‘big-ticket’ categories Ireland robust demand from trade segm
Slide 8: Addressing near-term challenges in Poland
Addressing near-term challenges in Poland Weak macroeconomic Focused on execution and Responding to near-term backdrop impacting confident in longer-term pressures in H2 demand opportunity LFL sales down 10.9% in H1 due Actions being taken: Price index maintained below to weaker market; growth Neg
Slide 9: H1 23/24 results
H1 23/24 results Bernard Bot Chief Financial Officer
Slide 10: Key financials
Key financials Gross profit / Retail profit / Adjusted PBT(2) Sales margin % margin % / margin % £6,880m £2,495m 36.3% £433m 6.3% £336m 4.9% Total sales -1.0%(1) -2.0%(1) -40bps(1) -23.0%(1) -180bps(1) -28.8% -200bps LFL -2.2% Statutory profit Free cash flow Net debt Net leverage Pre-tax Post-tax £3
Slide 11: Geographic summary
Geographic summary H1 23/24 sales Retail operating profit ROP margin % £m % chg(1) % LFL £m % chg(1) % bps chg(1) UK & Ireland 3,346 3.8% 1.7% 306 (9.8)% 9.2% (130)bps B&Q 2,101 0.8% 1.0% Screwfix 1,245 9.2% 3.1% France 2,311 (3.8)% (3.8)% 104 (21.9)% 4.5% (100)bps Castorama 1,213 (2.7)% (2.7)% Bric
Slide 12: Group profit bridge
Group profit bridge £m Net cost increase of £54m reflecting: Cost inflation, including YoY increases in pay rates and energy costs Higher central costs (55) Higher technology spend including depreciation including insurance Charges related to ineffective FX hedges claim deductibles Increas
Slide 13: Active and responsive management of gross margin and costs
Active and responsive management of gross margin and costs H1 gross margin slightly down £83m of operating cost reductions achieved in H1 H1 gross margin down 40bps reflecting higher customer FTEs c.2,700(1) lower YoY across stores and head offices participation in promotional activity in France and
Slide 14: Summary cash flows
Summary cash flows £m Increase in H1 inventory of £(89m): Reflects typical inventory growth since prior year end and lower than expected seasonal sales 84 On a YoY basis, net inventory down 2% (in constant currency) and inventory volumes down 11%; on track to reduce inventory in value in FY 23/2
Slide 15: Optimising our supply chain and inventory management
Optimising our supply chain and inventory management On track to deliver inventory ‘Supply chain visibility tool’ to optimise stock levels reduction and inventory management Inventories down 2% YoY despite weaker than expected seasonal sales; volume units down 11% YoY, with inflation offset by strat
Slide 16: Net debt and liquidity
Net debt and liquidity H1 FY £m 23/24 22/23 IFRS 16 lease liabilities (2,398) (2,444) Over £800m of total liquidity as of 31 July 2023 (including undrawn £550m RCF) Financial debt(1) (100) (100) Net leverage of 1.6x as of 31 July 2023 Cash and cash equivalents(2) 317 270 Net debt (2,181) (2,274) To
Slide 17: £1.5bn of capital returned to shareholders since FY 19/20
£1.5bn of capital returned to shareholders since FY 19/20 Completed £600m of share buybacks over last two years; announcing a new £300m programme, to begin in early October Share buybacks Dividends 337 157 99 Returns 227 254 246 suspended 165 due to COVID FY 19/20 FY 20/21 FY 21/22 FY 22/23 H1 23/24
Slide 18: FY 23/24 outlook and guidance
FY 23/24 outlook and guidance Q3 23/24(1) LFL sales -2.4% Against Q2 sales trends, continued momentum in the Current UK & Ireland, slight slowdown in France, small trading in Q3 improvement in Poland Core and ‘big-ticket’ category volume trends continuing to improve Maintain disciplined trad
Slide 19: Operational and strategic update
Operational and strategic update Thierry Garnier Chief Executive Officer 19
Slide 20: Surveys highlight resilient forward intentions for HI
Surveys highlight resilient forward intentions for HI Improving sentiment on personal finances, Interest and intentions to do home but confidence still lowest in France improvement increasing % of consumers thinking state of personal finances will get worse % of consumers intending to do more DIY in
Slide 21: A resilient business with strong foundations
A resilient business with strong foundations International market Attractive & growing Keeping a focus on leader customer base retail fundamentals #1 or #2 in key markets Balanced exposure DIY and Choice through refreshed ― DIFM/trade(1) OEB and branded ranges; Own exclusive brands c.46% extended op
Slide 22: Continuing to deliver against our 'Powered by Kingfisher' strategic priorities
Continuing to deliver against our ‘Powered by Kingfisher’ strategic priorities 1 Grow by building on our different banners 2 Accelerate e-commerce through speed and choice 3 Build a data-led customer experience 4 Differentiate and win through own exclusive brands (OEB) 5 Develop our trade business 6
Slide 23: Screwfix International: an exciting opportunity across Europe
Screwfix International: an exciting opportunity across Europe Competitive and attractive customer Brand awareness building in France proposition 9 stores open in North France and 2 more set Range expansion to 14k SKUs with prices to open in September; targeting up to 20 new c.10-15% lower than peers
Slide 24: Marketplace: more choice driving more customers
Marketplace: more choice driving more customers Increasing choice Driving new Gaining incremental Continued scaling of and augmenting our customers to our third-party and marketplaces across offer sites first-party sales banners 700,000+ SKUs, Double-digit % traffic 33% B&Q marketplace Reach 1 milli
Slide 25: Leveraging AI and data to drive new sources of performance
Leveraging AI and data to drive new sources of performance Early evidence: conversion AI-powered recommendation, Live at increase >100%; Driving topline ‘best-product’ and Screwfix and recommendations generating as growth personalisation engines B&Q much as 10% of digital sales Early evidence: pilot
Slide 26: Significant progress across our trade strategy
Significant progress across our trade strategy Store formats People Range & price 18 new TradePoint Piloting dedicated sales Developing and rolling out counters partner roles to build more trade-focused products ― direct and personalised relationships 27 dedicated ‘Pro’ zones launched at Brico Dépôt
Slide 27: Clear priorities for H2
Clear priorities for H2 1 Maintain disciplined trading and competitive price indices 2 Continue our strong operational momentum in the UK 3 Flexing costs in line with near-term demand in Poland and France 4 Continue to progress key elements of the strategy 27
Slide 28: Confident in medium-term growth and cash generation opportunity
Confident in medium-term growth and cash generation opportunity LFL sales growth driven by our strategic focus areas including e-commerce and marketplace, OEB, trade Sales to grow ahead of ― our markets Sales impact of +1.5% to +2.5% from annual net space growth over the medium term, primarily drive
Slide 29: Summary
Summary Group H1 sales slightly ahead of expectations; adjusted PBT of £336m Positive UK & Ireland sales, resilience at Castorama France and weaker at Brico Dépôt, difficult trading environment in Poland Resilient sales from core and ‘big-ticket’ categories (78% of sales), volumes showing an improvi
Slide 30: Q&A
Q&A
Slide 31: ADR programme
ADR programme Kingfisher ADRs trade on OTCQX – the premier tier of the U.S. Benefits of ADRs to U.S. investors: over-the-counter market under the following information: Symbol KGFHY Clear and settle according to normal U.S. standards CUSIP 495724403 Ratio 1 ADR : 2 ORDs Offer the convenience of stoc
Slide 32: Contacts
Contacts Investor Relations Media Relations Teneo Tel: +44 (0)20 7644 1082 Tel: +44 (0)20 7644 1030 Tel: +44 (0)20 7420 3184 Email: investorenquiries@kingfisher.com Email: corpcomms@kingfisher.com Email: Kfteam@teneo.com 32
Slide 33: Appendices
Appendices 33
Slide 34: FY 23/24 technical guidance
FY 23/24 technical guidance(1) Space Sales impact of c.+1.5% from net space growth, largely from Screwfix and Castorama Poland ‘Other’(2) retail losses of c.£30m (FY 22/23: £30m) (previous guidance: c.£40m; lower guidance driven by New businesses rephasing of investments in Screwfix France) Cent
Slide 35: H1 performance summary – UK & Ireland
H1 performance summary – UK & Ireland B&Q (including TradePoint) Screwfix LFL sales +1.0% LFL sales +3.1% ― ― E-commerce sales +18.5%; 12% of sales E-commerce sales +3.9%; 58% of sales ― TradePoint LFL -1.8%; 20% of sales H1 23/24 H1 22/23 % chg(1) Total UK & Ireland Sales (£m) 3,346 3,221 +3.8% Sal
Slide 36: H1 performance summary – France
H1 performance summary – France Castorama Brico Dépôt LFL sales -2.7% LFL sales -5.0% ― ― E-commerce sales +6.9%; 6% of sales E-commerce sales +20.2%; 5% of sales H1 23/24 H1 22/23 % chg(1) Total France Sales (£m) 2,311 2,325 -3.8% Sales -3.8%, LFL sales -3.8% – with trading impacted by a challengin
Slide 37: H1 performance summary – Poland
H1 performance summary – Poland Castorama LFL sales -10.9% ― E-commerce sales -33.8%; 4% of sales H1 23/24 H1 22/23 % chg(1) Poland Sales (£m) 880 913 -8.5% Sales -8.5%, LFL sales -10.9% – against strong prior year comps and a challenging trading environment. Overall sales trends in Q2 were similar
Slide 38: H1 performance summary – Iberia and Romania
H1 performance summary – Iberia and Romania Brico Dépôt Iberia Brico Dépôt Romania Sales -1.2%, LFL sales -1.2% Sales -8.4%, LFL sales -4.9% reflecting a resilient performance reflecting strong prior year comps. against good prior year Sales trends improved in Q2 largely comparatives and the impact
Slide 39: Thank you
Thank you