Kingfisher Plc · LSE:KGF
Kingfisher — Investor Day (October 2005)
25 slides from Kingfisher's investor day presentation, Oct 13, 2005
Slide 1: Kingfisher
Slide 2: Investor and analyst visit 13 October 2005
Investor and analyst visit 13 October 2005
Slide 3: Ian Cheshire, CEO – B&Q
Ian Cheshire CEO – B&Q
Slide 4: Agenda
Agenda • B&Q’s evolution – Ranges and stores – Productivity and service • B&Q Gloucester
Slide 5: B&Q's evolution
B&Q’s evolution Sales 1969 3,000 sq ft ‘Hardware’ £50k 25,000 sq ft ‘DIY’ £301m 1985 Garden Centre added 100,000 sq ft Warehouse £1.2bn 1995 Kitchens and bathrooms added 2005 More home projects and installation £4bn Same size, more space for 2010 home projects displays and fuller range Core DIY Home
Slide 6: Evolution drives the 'virtuous circle'
Evolution drives the ‘virtuous circle’ Investment in customer proposition Price Range Brand Store Reduced unit costs LFL • CPR Growth • Non-COGS Increase sales per foot
Slide 7: Declining markets in 2005 have interrupted the virtuous circle
Declining markets in 2005 have interrupted the virtuous circle Scenario 1 Scenario 2 Sales £100 £98 -2% Gross margin £30 £28 -100bps Costs £(22) £(24) +9% Retail Profit £8 £4 -50%
Slide 8: B&Q's evolution
B&Q’s evolution • Evolve ranges and stores Higher LFL • Improve service • Improve cost productivity Better ROIC
Slide 9: Evolve ranges and stores
Evolve ranges and stores Ranges • already strong in hard DIY and gardening – limited ongoing review – some fast track edits • strengthen showroom and decorative – room set merchandising – assisted project sales – some major reviews (e.g. ceramics) – new categories (e.g. home office)
Slide 10: Evolve ranges and stores
Evolve ranges and stores Stores • more mini-Warehouses • evolve big-box Warehouse – light touch • limited category change (e.g. paint) – reflow • showroom merchandising – full revamp • full store refit • based on Gloucester, Milton Keynes, Luton and Wednesbury trials
Slide 11: Steve Gilman, CEO – B&Q Asia
Steve Gilman CEO – B&Q Asia
Slide 12: B&Q's evolution
B&Q’s evolution • Evolve ranges and stores Higher LFL • Improve service • Improve cost productivity Better ROIC
Slide 13: Evolving stores
Evolving stores B&Q - the ultimate Home Improvement store ... • best value • unequalled range…and • inspiring and innovative merchandising…with • appropriate store environments and service ... with broader customer appeal • male and female • doers and catalysts • traditional core “DIYer” and Trade •
Slide 14: Evolving stores
Evolving stores DIY essentials, home decor never beaten on DIY essentials and decorative products Garden comprehensive range of great priced, quality garden products ... excellent in-store care Rooms and fantastic products for major projects (DIY or DFY), projects Inspiring display, advice and servi
Slide 15: B&Q Gloucester
B&Q GLOUCESTER Kitchens Appliance Shop Special Order Carpets Bathrooms / Showers Toilets Flooring Doors & Windows Gardening Goods Appliances Storage Trade Showroom Handling Bathrooms Fires Bedrooms Showroom Hardware Desks Paint Bathroom Kitchen Lighting Displays Displays Plumbing Coffee Gardening Ha
Slide 16: John Cleland, B&Q Commercial Director
John Cleland B&Q Commercial Director
Slide 17: B&Q's evolution
B&Q’s evolution • Evolve ranges and stores Higher LFL • Improve service • Improve cost productivity Better ROIC
Slide 18: Evolving ranges
Evolving ranges • review and improve current ranges – paint, flooring, bathroom, kitchen • optimise space allocation – edit some over-ranged categories – re-deploy space • introduce new home improvement ranges
Slide 19: Optimising space allocation
Optimising space allocation Examples from over ranged categories Objectives and Initial results Paint Objectives • Top 3 sku’s 3.7% of sales; 1.5% of • Reduce confusion and preserve real space choice for customers • Top 100 95% availability – room to improve • Reduce complexity and improve availabil
Slide 20: Introduce new home improvement ranges
Introduce new home improvement ranges • Soft home – Bedroom furniture – Soft furnishings • Techno home – Digital home – Climate control • Multi-function home – Home office (later in the year)
Slide 21: Matt Tyson, B&Q Operations Director
Matt Tyson B&Q Operations Director
Slide 22: B&Q's evolution
B&Q’s evolution • Evolve ranges and stores Higher LFL • Improve service • Improve cost productivity Better ROIC
Slide 23: Cost productivity and service
Cost productivity and service FLAT MANAGEMENT STRUCTURES SERVICE SQUAD – De-layer store management – Improving peak time service • 20% fewer store managers • Increasing ATV • flatter structure • Improve customer experience • clearer accountabilities – In c.200 stores by year end • clearer career pat
Slide 24: Initiatives in Gloucester trial
Initiatives in Gloucester trial • Productivity – replenishment – labour scheduling and deployment • Service – showroom sales team – new incentive structure – service squad vs service desk – self checkout (future trials)
Slide 25: Summary
Summary • Evolution not revolution • Clear plans • Experienced retail team • Gathering pace