Kingfisher Plc · LSE:KGF
Kingfisher — H1 2024/25 Earnings Presentation
47 slides from Kingfisher's earnings presentation, Sep 17, 2024
Slide 1: Kingfisher plc Half Year Results
Kingfisher plc Half Year Results Six months to 31 July 2024 17 September 2024
Slide 2: Welcome & agenda
Welcome & agenda Thierry Garnier (CEO) Key messages and financial highlights Bernard Bot (CFO) H1 24/25 results Outlook & guidance for FY 24/25 Thierry Garnier (CEO) Update on strategy France update 2
Slide 3: Key messages
Key messages H1 sales in line with our expectations, with market share gains in the UK and Poland Strong management of gross margin, costs and inventory Solid and focused execution against key objectives, with standout growth in e-commerce and trade Rapid progress in restructuring and modernising ou
Slide 4: H1 financial highlights
H1 financial highlights Resilient sales in UK & Ireland and Poland, Total sales -1.4%(1) soft consumer backdrop in France LFL -2.4%; ‘core’ LFL –1.1% Strong management of gross margin, costs Gross margin +40bps(1) Operating costs +0.4%(1) and inventory Inventory -4.3%(1) E-commerce sales +8.4% YoY,
Slide 5: H1 24/25 results
H1 24/25 results Bernard Bot Chief Financial Officer
Slide 6: Key financials
Key financials Gross profit / Retail profit / Adjusted PBT(2) Sales margin % margin % / margin % £6,756m £2,480m 36.7% £420m 6.2% £334m 4.9% Total sales -1.4%(1) -0.2%(1) +40bps(1) -2.7%(1) -10bps(1) -0.5% Flat LFL -2.4% Statutory profit Free cash flow Net debt Net leverage Pre-tax Post-tax £324m £2
Slide 7: Resilience in 'core'; weak market for 'big-ticket'
Underlying resilience continuing in ‘core’ Resilience in ‘core’; weak market for ‘big-ticket’ Group LFL sales (%) corrected for leap year and calendar impacts(1) 64% of H1 sales and 73% of volumes Resilience driven by repair, maintenance and renovation activity on existing homes Core -1.5 -1.7 C
Slide 8: UK & Ireland: resilient performance & robust trade sales
UK & Ireland: resilient performance & robust trade sales UK & Ireland LFL -0.2% Market share(2) Category performance B&Q LFL -1.0%; Market share gains at Positive ‘core’ sales (LFL positive ‘core’ sales, B&Q, TradePoint and +1.4%); resilient strong trade and Screwfix underlying volume trends m
Slide 9: France: ongoing impact of soft consumer backdrop
France: ongoing impact of soft consumer backdrop France LFL (7.2)% Market share(2) Category performance Castorama LFL (7.7)% Both banners Market weakness Brico Dépôt LFL (6.8)% performed broadly in reflected across all line with the market categories Home improvement market remained Seas
Slide 10: Poland: supported by improved consumer environment
Poland: supported by improved consumer environment Poland LFL (0.2)% Market share(2) Category performance Sales trends supported Good YoY market share ‘Core’ sales positive by improved consumer gains Improvement in ‘big- environment and ticket’; positive sales in progress in trade Q2 custome
Slide 11: Geographic summary
Geographic summary H1 24/25 sales Retail operating profit ROP margin % £m % chg(1) % LFL £m % chg(1) % bps chg(1) UK & Ireland 3,376 +1.0% (0.2)% 325 +6.2% 9.6% +40bps B&Q 2,075 (1.2)% (1.0)% Screwfix 1,301 +4.5% +1.2% France 2,099 (7.0)% (7.2)% 69 (32.0)% 3.3% (120)bps Castorama 1,094 (7.7)% (7.7)%
Slide 12: Group profit bridge
Group profit bridge £m +7 (2) (7) +8 Net operating cost impact flat YoY +24 Koçtaş retail loss of £6m (vs (62) £5m retail profit last year) reflecting accounting under high inflation and increased +30 (46) operating costs 336 Partially offset by decrease 334 +73 YoY in share of JV interest and t
Slide 13: Strong cost action in H1; on track for c.£120m cost reductions
Strong cost action in H1; fully on track for c.£120m of cost reductions in FY 24/25 Confident in delivery of full Cost reductions weighted to H1 year commitment of c.£120m Key achievements in H1: Key focus areas for H2: Increased labour productivity, Optimising store staffing and c.2,400 FTEs lo
Slide 14: Summary cash flows
Summary cash flows £m 128 (260) (15) (153) 721 Increase in trade payables of £286m, (44) reflecting normal buying seasonality and pull forward of inventory purchases (159) Decrease in other payables of £(32)m Increase in net inventory of £(82)m, largely 421 reflecting the seasonality of stock
Slide 15: Optimising our supply chain and inventory management
Optimising our supply chain and inventory management Net inventory reduction of Multi-year opportunity Managing impact from Red £134m (4% YoY); “best seller” for further working Sea disruption availability improvement capital benefits YoY change % Value (1) Inventory days "Best seller" availability
Slide 16: Robust balance sheet, accelerating share buyback
Robust balance sheet, accelerating share buyback Buyback accelerated, to Strong free cash generation Net leverage of 1.5x complete in March Free cash flow of £421m in H1 Net leverage slightly lower vs Interim dividend of 3.8p, flat YoY (+22% YoY) year-end and £92m shares purchased in H1 £421m ― ― £3
Slide 17: Outlook and guidance for FY 24/25
Outlook and guidance for FY 24/25 Bernard Bot Chief Financial Officer
Slide 18: Surveys highlight slightly improving sentiment towards home improvement projects
Surveys highlight slightly improving sentiment towards home improvement projects Improved outlook on personal finances in Consumers delaying or postponing UK and France, slightly worse in Poland projects declining % of consumers thinking state of personal finances will get worse % of consumers decid
Slide 19: View on overall market outlook for 2024 is unchanged
View on overall market outlook for 2024 is unchanged Our expectation of total home improvement market – 2024 (YoY % change)(1) Low High Continue to see differing consumer behaviour by region case case Market currently Resilient consumer with repairs, maintenance and Low- tracking UK & existing hom
Slide 20: FY 24/25 outlook & guidance
FY 24/25 outlook & guidance Q3 24/25 LFL sales (to date)(1) -0.3% Current trading Trading in the UK & Ireland and France ahead of the sales trend in Q2, in Q3 with the benefit of softer comps in the same period last year Continued focus on market share gains Effectively manage our product co
Slide 21: Update on strategy
Update on strategy Thierry Garnier Chief Executive Officer
Slide 22: Strongly positioned for growth in 2025 and beyond: our investment thesis
Strongly positioned for growth in 2025 and beyond: our investment thesis Attractive and growing Kingfisher has distinct Compelling shareholder home improvement market competitive advantages returns opportunity Large, fragmented and growing #1 and #2 leadership positions Multiple growth drivers indus
Slide 23: Great people: highly engaged colleagues
Great people: highly engaged colleagues 23
Slide 24: Great product: diverse range of international, national and own brands
Great product: diverse range of international, national and own brands 24
Slide 25: Great service: convenient, speedy and personalised
Great service: convenient, speedy and personalised 25
Slide 26: Solid and focused execution against key strategic priorities
Solid and focused execution against key strategic priorities Key H1 achievements H2 focus Financial potential 1 • Open up to 24 new Screwfix 16 Screwfix stores opened in Screwfix and UK & Ireland, 5 in France stores in UK & Ireland, 5 in Sales impact of c.1.5% to 2.5% Castorama Poland France from
Slide 27: Screwfix France: encouraging progress across the board
1 Screwfix France: encouraging progress across the board with store sales maturation in line with expectations Driving “convenience” with more “Product leadership” with stores & services attractive range and trade-focus 5 stores opened in H1, total estate of 25; 14k+ SKUs across over 50 brands targe
Slide 28: Accelerating e-commerce through speed and choice
2 Accelerating e-commerce through speed and choice Penetration steadily increasing; Focused on offering “speed” and ambition to reach 30% “convenience”… Group e-commerce penetration (%) Screwfix Sprint expansion to 100 additional stores, now covering c.53% of UK postcodes +8.4% ― e-commerce New part
Slide 29: Marketplace: leveraging the success of B&Q internationally
2 Marketplace: leveraging the success of B&Q internationally Encouraging progress B&Q marketplace going from internationally, with strength to strength launches in France & Poland c.1.5m Rapid expansion in Iberia, with 22% 1,300 of online sales from marketplace with c.200 merchants and c.200k c.700k
Slide 30: Data: driving topline
3 Data: driving topline… c.£55m in sales from our suite of AI-driven “recommendation engines” in H1, now live in all markets 30
Slide 31: …as well as profitability and cash
3 …as well as profitability and cash New income stream Strengthening margin Streamlining operations from retail media H1 highlights H1 highlights H1 highlights Data and AI-driven tools to Supply chain visibility tool 70 1P vendors engaging in optimise promotions, enhanced to hold more 1,500+ live ca
Slide 32: Trade: rapid strides made extending trade propositions to France and Poland
4 Trade: rapid strides made extending trade propositions to France and Poland TradePoint penetration Strong progress internationally, on track to double +2% pts YoY trade penetration in France & Poland TradePoint LFL sales (%)(1) Dedicated trade service desks and colleagues in all stores ― 8.5 5.8 7
Slide 33: Case study of Popularna store, Warsaw – opened June 2024
4 Case study of Popularna store, Warsaw – opened June 2024 Carved out space to add c.70sqm dedicated “prozone” in- store holding c.300 trade-specific SKUs and till areas ― Drive-thru builders' yard (c.2,900sqm) with payment services Reorganised ― store without 3 dedicated trade sales partners increa
Slide 34: Update on France plan
Update on France plan Thierry Garnier Chief Executive Officer
Slide 35: Clear path to achieving our medium-term ambitions in France
Clear path to achieving our medium-term ambitions in France, with execution underway 7% 4 2 3 5% 1 Improved environment 3.3% supporting operating leverage FY 23/24 Medium-term France ROP margin target Driven by self-help France ROP margin 1 Simplify organisation 2 Grow sales densities at 3 Productiv
Slide 36: Rapid progress on restructuring and modernising our lowest performing Castorama stores
Rapid progress on restructuring and modernising our lowest performing Castorama stores Completed 2 rightsizings in H1 with encouraging early results; 1 store to complete in H2 and accelerating works on one further store ― Rightsizing All rightsized stores benefit from comprehensive refits ― Total of
Slide 37: Summary
Summary Summary Thierry Garnier Chief Executive Officer
Slide 38: Summary
Summary H1 sales in line with our expectations, with market share gains in the UK and Poland Strong management of gross margin, costs and inventory Solid and focused execution against key objectives, with standout growth in e-commerce and trade Rapid progress in restructuring and modernising our low
Slide 39: Q&A
Q&A
Slide 40: Appendices
Appendices
Slide 41: FY 24/25 technical guidance
FY 24/25 technical guidance(1) Space Sales impact of c.+1.5% from net space growth, mainly from Screwfix UK & ROI and Castorama Poland Other International ‘Other’(2) retail losses of c.£35m (FY 23/24: £30m) (previous guidance: c.£30m) Koçtaş (Turkey 50% Koçtaş retail contribution of c.£5m loss
Slide 42: 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 c.+1.5% to +2.5% from annual net space growth over the medium term, primarily dri
Slide 43: Consistent and disciplined approach to capital allocation
Consistent and disciplined approach to capital allocation Invest in attractive Sustainable Returns to growth opportunities dividend growth shareholders Prioritise growth Progressive growth Surplus capital to be opportunities that of dividends returned via share accelerate our strategy ― buybacks or
Slide 44: 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 45: 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 45
Slide 46: 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 47: Thank you
‘Thank you