Kingfisher Plc · LSE:KGF
Kingfisher — FY2020/21 Earnings Presentation
46 slides from Kingfisher's earnings presentation, Mar 22, 2021
Slide 1: Kingfisher plc Full Year Results
KINGFISHER PLC FULL YEAR RESULTS 12 months to 31 January 2021 22 March 2021
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: Operational & strategic update
Operational & strategic update Thierry Garnier Chief Executive Officer 3
Slide 4: Welcome & agenda
Welcome & agenda Thierry Garnier (CEO): Operational & strategic update Market drivers & trends - Our progress in FY 20/21 - Clear strategy and actions to drive share growth - Group financial priorities and drivers Bernard Bot (CFO): FY 20/21 results Performance overview - Cash, debt and liquidity -
Slide 5: Key messages
Key messages The home improvement market is attractive and resilient, with supportive new longer-term drivers Market trends offer us opportunities We are emerging from the COVID crisis stronger We are making progress fixing issues from previous years Our new strategy is delivering – empowered banner
Slide 6: Strong financial progress in FY 20/21
Strong financial progress in FY 20/21 Total sales: £12.34bn, +6.8%(1) (LFL +7.1%) Clear improvements in competitive position in all key markets Strong current trading momentum: Q1 21/22 Group LFL +24.2% (to 18 March 2021) Adjusted PBT: £786m, +44% Free cash flow: £938m, +391% Resuming dividends: pro
Slide 7: Attractive market with new longer-term industry support
Attractive market with new longer-term industry support Market growth supported by structural drivers Provides relatively high margins vs. other retail industries Resilient against e-commerce pureplay competitors Proven to be robust through economic downturns COVID has established new longer-term in
Slide 8: Market trends offer us opportunities
Market trends offer us opportunities Online with stores Smaller Discounters and value at the centre formats for money Medium Rapid and Medium Gradual Medium Gradual term shift accelerating term shift term shift COVID Massive COVID Rising COVID Favours impact surge impact impact discounters ‘Do It Fo
Slide 9: Our strategic direction and key strengths
Our strategic direction and key strengths Our strategic direction Kingfisher banners are not A clear vision to build We will ‘power’ these Simpler the same. This is a strength customer propositions banners as a Group and leaner Positioned for growth Access to attractive Top 2 position in all Collect
Slide 10: We are emerging from the COVID crisis stronger
We are emerging from the COVID crisis stronger Roll-out of company strategy Improved banner awareness fully on track and brand reputation No delay in our plans from COVID Clear reconnection with our DIY brands ― ― Focus on speed, agility and ‘done is better than perfect’ Strong new customer growth a
Slide 11: We are making progress fixing issues from previous years
We are making progress fixing issues from previous years Build the New trading 1 new team 3 Focus 4 approach Group Executive Significantly reduced non-critical Reintroduction of local ranges team strengthened range reviews ― ― ― More trading events Key teams reinforced Paused large, ― at banners tim
Slide 12: Clear strategy and actions to drive share growth
Clear strategy and actions to drive share growth Our retail banners address diverse The role of the Group is to enable our banners to customer needs, operate different models serve their customers better and have a clear positioning and plan Test compact store Grow concepts and adapt e-commerce sale
Slide 13: B&Q and TradePoint – revitalised and well positioned
B&Q and TradePoint – revitalised and well positioned Operating Managed unprecedented demand levels; Overall improvement of stock quality Proof points Drivers Group digital technology stack implemented; LFL sales +13.0% and E-commerce Implemented next day delivery from store (98% UK population); stro
Slide 14: B&Q and TradePoint – 2021 focus areas
B&Q and TradePoint – 2021 focus areas Continued rebuild of availability ahead of peak trading periods Increase available range for online orders; Develop innovative last-mile delivery Further improve and broaden choice through brands and OEB Relaunch TradePoint; Launch NeedHelp in B&Q Test compact s
Slide 15: Screwfix – positioned for next stage of growth
Screwfix – positioned for next stage of growth Operating Managed significant changes to operating model during first lockdown to operate ~100% online with COVID-secure C&C Proof points Drivers LFL sales +6.6% Expanded capacity to service extraordinary increase in and strengthened E-commerce website
Slide 16: Screwfix – 2021 focus areas
Screwfix – 2021 focus areas Invest in fulfilment capacity to support growth; Upgrade IT platform to further enhance proposition Rapidly roll out new Screwfix app – focused on convenient ‘mobile-first’ collection and last-mile delivery Further extensions to core ranges; More OEB ranges tailored to th
Slide 17: Castorama France – significant progress 'repairing' in 2020
Castorama France – significant progress ‘repairing’ in 2020 Operating SAP ‘pain points’ identified and addressed Proof points Drivers Group digital technology stack fully implemented; LFL sales +6.2%; E-commerce Accelerated C&C and ‘delivery from store’ services; outperformed the market Enhanced C&C
Slide 18: Castorama France – 2021 focus areas
Castorama France – 2021 focus areas Optimise supply chain; Continued rebuild of availability ahead of peak trading periods Increase available range for online orders Range ‘repaired’ by end of 2021; Further broadening of range through brands and OEB Focused trading events; Maintain strong price posi
Slide 19: Group 'powers': E-commerce
Group ‘powers’: E-commerce Progress in 2020 Proof points New Group digital Digitally- ‘Digital hub’ More C&C E-commerce sales +158%; technology stack enabled picking model for B&Q Home delivery options 18% of sales (+10ppts) supporting 500k for all fulfilment to improve home expanded range trialling
Slide 20: Group 'powers': Own exclusive brands (OEB)
Group ‘powers’: Own exclusive brands (OEB) Clear purpose Growth and penetration Strong growth of brand awareness in 2020 Drives affordability ― £5.3bn High functionality, innovation Total OEB sales and differentiation New commercial operating model driving ― Supports Responsible Business +7.5% Sales
Slide 21: Group 'powers': Mobile-first capabilities and services
Group ‘powers’: Mobile-first capabilities and services Focus areas Drive a mobile-led online Acquisition of NeedHelp customer experience services marketplace Speedy Hire concessions – trial of new tool and equipment hire outlets within TradePoint Modernise the in-store experience 56% Improve our 8 k
Slide 22: Group 'powers': Store formats and footprint evolution
Group ‘powers’: Store formats and footprint evolution Our beliefs Strategic direction Stores are a central Our store numbers will increase driver of our retail and – but average store size e-commerce business will reduce Six compact store trials in 2020: B&Q express (x2), B&Q shop-in-shop at ASDA (x
Slide 23: Group 'powers': Responsible Business
Group ‘powers’: Responsible Business We are becoming a more We will be ‘forest positive’ and help inclusive company tackle climate change 27% reduction in Scope 1 and 2 emissions ‘Doing the right thing’ during COVID since FY 16/17 Local and Group diversity & inclusion plans Now committed to deliver
Slide 24: Group financial priorities
Group financial priorities 1 2 3 Aim to grow adjusted Prioritise top line growth PBT in line with sales(1) Generate strong free and grow sales ahead + cash flow to underpin of market gradually faster than sales shareholder returns over time Clear strategy and actions to drive Focused on driving scal
Slide 25: Key drivers
Key drivers 1 2 3 E-commerce OEB sales New compact sales growth growth stores & penetration Grow OEB sales, Grow our e-commerce Test and roll out providing differentiation, business and lead compact stores across value for money, the industry our markets and margin 4 5 6 Costs & same- ‘Big-box’ Resp
Slide 26: FY 20/21 results
FY 20/21 results Bernard Bot Chief Financial Officer 26
Slide 27: FY 20/21 results summary
Gross profit / Retail profit / Adjusted PBT(2) Sales margin % margin % / margin % £12,343m 7.1% £4,573m 37.1% £1,003m 8.1% £786m 6.4% 6.8%(1) LFL +6.9%(1) Flat(1) +27.4%(1) +130bps(1) +44.4% +170bps Statutory profit Free cash flow Net debt Net leverage Pre-tax Post-tax £756m £592m £938m £(1,394)m(3)
Slide 28: Geographic summary
Geographic summary FY 20/21 sales Retail profit/(loss) Retail profit margin £m % chg(1) % LFL £m % chg(1) % bps chg(1) UK & Ireland 5,743 +12.3% +10.7% 681 +36.3% 11.9% +210bps B&Q 3,707 +12.8% +13.0% Screwfix 2,036 +11.4% +6.6% France 4,309 +3.2% +5.1% 181 +7.9% 4.2% +20bps Castorama 2,265 +3.3% +6
Slide 29: Group retail profit bridge
Group retail profit bridge Cost base £m increase of +0.7% 17 vs LFL sales increase of +7.1% (19) 317 (18) (48) (8) (25) 787 1,003 Gross profit movement: +£297m Net cost movement: £(81)m FY 19/20 LFL Net space Supply & Russia(3) Inflation Net space- Other net cost FY 20/21 retail profit(1) sales/marg
Slide 30: Exceptional adjusting items
Exceptional adjusting items FY 20/21 FY 19/20 Comments £m Adjusted PBT 786 544 Transformation exceptional costs - (8) Store closures - (67) Russia & other exit costs (27) (130) Mainly additional impairments that reflect the net proceeds from sale of Russia Russia loss on disposal (49) - Loss on disp
Slide 31: Summary cash flows and net debt
Summary cash flows and net debt Decrease in inventory: £86m £m FY 20/21 FY 19/20 due to strong demand levels in H2 20/21 and inventory £m management initiatives IFRS 16 lease liabilities(2) (2,421) (2,563) Financial debt (109) (158) Net increase in payables(1): £290m, largely driven by: £148m trade
Slide 32: Significant liquidity headroom and solid financial position
Significant liquidity headroom and solid financial position Over £2.2bn of total liquidity as of 18 March 2021 >£1.4bn £775m Cash & cash equivalents RCFs (undrawn) Repaid in full government-supported debt in the UK (CCFF, £600m) and France (PGE, €600m) Financial debt of £109m(1) as of 31 January 202
Slide 33: Group 'powers': Costs & same-store inventory reduction
Group ‘powers’: Costs & same-store inventory reduction Sourcing ‘Same-store’ Cost programme and buying inventory reduction Plan to drive cost Improve store Strategic partnerships Build on significant and same-store productivity with top brands planning and forecasting inventory ― ― improvements redu
Slide 34: FY 20/21 sales evolution and current trading
FY 20/21 sales evolution and current trading % sales change: 52 weeks to 30 January 2021 FY 20/21 started positively, reflecting early ‘Focus and Fix’ actions 40% 350% 300% 20% 250% From mid-late March 2020, significant impact of lockdown 0% 200% measures and voluntary closure of stores in UK & Fran
Slide 35: FY 21/22 outlook and guidance
FY 21/22 outlook and guidance FY 19/20 H1 H2 FY 20/21 FY 21/22 outlook and guidance The following guidance applies in the event of no Group total sales 11,513 5,921 6,422 12,343 adverse change in COVID-related confinement measures (for example, new lockdown % growth (constant currency) (0.8)% (1.1)%
Slide 36: Summary
Summary Thierry Garnier Chief Executive Officer 36
Slide 37: Summary
Summary The home improvement market is attractive and resilient, with supportive new longer-term drivers Market trends offer us opportunities We are emerging from the COVID crisis stronger We are making progress fixing issues from previous years Our new strategy is delivering – empowered banners sup
Slide 38: Q&A
Q&A 38
Slide 39: ADR programme
ADR programme Kingfisher ADRs trade on OTCQX – the premier tier of the U.S. Benefits of ADRs to over-the-counter market under the following information: U.S. investors: Symbol KGFHY Clear and settle according to normal U.S. standards CUSIP 495724403 Ratio 1 ADR : 2 ORDs Offer the convenience of stoc
Slide 40: 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 40
Slide 41: Appendices
Appendices vet
Slide 42: FY 21/22 technical guidance
FY 21/22 technical guidance The following guidance applies in the event of no adverse change in COVID-related confinement measures (for example, new lockdown restrictions resulting in further store closures). Please also refer to the disclaimer on slide 2 for further details regarding forward-lookin
Slide 43: UK & Ireland – continued B&Q and Screwfix strength
UK & Ireland – continued B&Q and Screwfix strength B&Q Screwfix LFL sales +13.0% LFL sales +6.6% ― ― E-commerce sales +117%(1); c.10% of sales E-commerce sales +165%(1); c.78% of sales ― TradePoint LFL +c.11%; c.19% of sales FY 20/21 FY 19/20 % chg(1) Total UK & Ireland Sales (£m) 5,743 5,112 +12.3%
Slide 44: France – significantly improved competitive position
France – significantly improved competitive position Castorama France Brico Dépôt France LFL sales +6.2% LFL sales +3.8% ― ― E-commerce sales +187%(1); c.5% of sales E-commerce sales +169%(1); c.5% of sales FY 20/21 FY 19/20 % chg(1) Total France Sales (£m) 4,309 4,082 +3.2% Sales up 3.2%, LFL sales
Slide 45: Poland – strong sales recovery; focusing on costs
Poland – strong sales recovery; focusing on costs Castorama Poland LFL sales +4.9% ― E-commerce sales +171%(1); c.4% of sales FY 20/21 FY 19/20 % chg(1) Castorama Poland Sales (£m) 1,550 1,461 +8.0% Sales up 8.0%, LFL sales up 4.9% – reflecting strong trading (in particular in Q2 and Q3 20/21, follo
Slide 46: Romania – progress made; Iberia – impacted by lockdown
Romania – progress made; Iberia – impacted by lockdown Brico Dépôt Romania Brico Dépôt Iberia Sales +11.8%, LFL sales +10.8% - Sales -7.0%, LFL sales -7.0% - driven by higher demand across all largely due to COVID-related product categories and successful temporary store closures in Spain rebranding