Kingfisher Plc · LSE:KGF
Kingfisher — H1 2022/23 Earnings Presentation
41 slides from Kingfisher's earnings presentation, Sep 20, 2022
Slide 1: Kingfisher plc Half Year Results
Kingfisher plc Half Year Results 6 months to 31 July 2022 20 September 2022 1
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): Operational & strategic update Kingfisher is strong and diversified, with proven resilience Delivering on value & effectively managing current environment France – final phase of ‘fixes’ Strong execution against strategic priorities & investing for growth Bern
Slide 4: Operational & strategic update
Thank you & strategic update Operational Thierry Garnier Chief Executive Officer
Slide 5: Key messages
Key messages H1 performance in line with expectations and significantly ahead of pre-pandemic levels Supported by continued momentum in market share gains in the UK, France and Poland Resilient sales from both DIY and DIFM/trade categories Delivering on value for our customers and effectively managi
Slide 6: H1 performance in line with expectations
H1 performance in line with expectations Resilient first half of trading LFL -4.1% from very strong comparatives; 3-year LFL +16.6% Stronger 3-year LFL sales trend in Q2 vs Q1 +17.4% in Q2 vs +14.8% in Q1, adjusted for calendar impacts(1) Total e-commerce sales -19%; 3-year growth +156% 16% penetrat
Slide 7: Kingfisher is strong and diversified, with proven resilience
Kingfisher is strong and diversified, with proven resilience New customer growth Solid market growth, ▪ Solid market growth since 2019 remains above 2019… with supportive new ▪ New and enduring industry trends including more millions +5.0m industry trends working from home & focus on energy efficien
Slide 8: Consumer surveys show an enduring focus on the home
Consumer surveys show an enduring focus on the home Heightened focus on Working from home here to stay energy efficiency Working from home ‘the new normal’ – leads to more Over 9 in 10 HI’ers are currently looking for ways to ‘wear and tear’ & looking at home with critical eye reduce their energy co
Slide 9: Value for our customers when they need it most
Value for our customers when they need it most ‘Price cut’, ‘Low price’ and ‘bulk Targeted ‘price locks’ Guaranteed minimum price commitments save’ campaigns across channels “If you find a cheaper price, we will refund the difference x2” Delivering value through own brands and opening price points 9
Slide 10: Energy efficiency – we are part of the solution
Energy efficiency – we are part of the solution Launching energy saving diagnostic tools Promoting energy efficient products across our banners “Lower your energy bills with Brico Dépôt” “Glass wool insulation with vegetable binder ECOSE technology” “Find all our solutions to make your home more eco
Slide 11: Delivering on value & effectively managing pressures from the current environment
Delivering on value & effectively managing pressures from the current environment Delivering Cost Inflation on value optimisation through own brands (enabling cost inflation continues to be cost reductions mitigating 15-30% cheaper prices vs effectively managed with inflation impact on operating bra
Slide 12: Active and responsive management of costs & inventories
Active and responsive management of costs & inventories 1 2 3 Managing gross margin Active management Proactive management % effectively of operating costs of inventories Proactive management of COGS Ongoing multi-year cost savings Majority of inventory value increase YoY is (supplier negotiations,
Slide 13: France – final phase of ‘fixes’
France – final phase of ‘fixes’ On track to complete final ‘fix’ areas in H2 H1 proof points Castorama ranges extended with more local and international brands; 1,200 SKUs added in H1; >8,500 SKUs added since Feb 2020 LFL sales +13.6% vs 2019 ― Brico Dépôt optimising its ranges and introducing m
Slide 14: Strong execution against our strategic priorities and investing for growth
Strong execution against our strategic priorities and investing for growth 1 Grow e-commerce sales and roll-out marketplace 2 Screwfix – accelerating growth in UK, ROI & France 3 Significant opportunity to grow trade penetration 4 Strengthening our leadership position in Poland 5 Testing new formats
Slide 15: E-commerce development going from strength to strength
1 E-commerce development going from strength to strength Progress in H1 H1 proof points 2.6x 91% e-commerce sales of e-commerce vs 3 years ago orders picked in store Broader product C&C lockers in Continued Enhanced Scaling availability through ‘digital all stores in Poland successful roll-out of Sc
Slide 16: B&Q marketplace performing ahead of expectations
1 B&Q marketplace performing ahead of expectations; now preparing for roll-out across France, Poland and Iberia Expanded choice is Marketplace SKUs H1 1 100k new SKUs in <6 months 100k key to success in 6k home improvement achievements 2 Available in 10 categories Mar-22 Mar-22 Jul-22 Q3-22 Capitali
Slide 17: Screwfix – accelerating growth in the UK, Ireland and France
2 Screwfix – accelerating growth in the UK, Ireland and France Continued enhancements to Ready for first stores in France proposition driving share gains Record 31 Screwfix stores opened in H1 in Screwfix France customer base building UK & Ireland – now at 821 stores(1); with increasing brand awaren
Slide 18: Significant opportunity to grow trade penetration in ‘big boxes’
3 Significant opportunity to grow trade penetration in ‘big boxes’ Building on TradePoint learnings, our focus is on 5 key areas TradePoint H1 Updating and growing TradePoint’s presence at B&Q stores H1 sales £435m; Store ― LFL sales +34% vs H1 19/20 formats Exploring dedicated trade counters in Fra
Slide 19: Strengthening our leadership position in Poland
4 Strengthening our leadership position in Poland Progress in H1 H1 proof points 25.9% 1-year LFL sales significant market growth share gains Strong C&C lockers NeedHelp services Self-checkout Testing new performance of new kitchen ranges and drive-thru roll-out implemented in all stores terminals n
Slide 20: Adapting our store footprint to drive share & support growth
5 Adapting our store footprint to drive share & support growth ▪ Tests span three markets and four banners Compact stores driving ▪ Total of 31 compact stores now open – testing small share in urban areas retail parks, high streets and grocery concessions ▪ Four new stores opened in H1 – including f
Slide 21: We are leading the way for more energy efficient homes
6 We are leading the way for more energy efficient homes There is a huge unmet need We have a strong & growing offer But our customers need more More than 11.5k energy efficiency SKUs ~75% UK & French homes have ensuring our range is helping customers B&Q and Brico Dépôt France have developed effici
Slide 22: H1 22/23 results
H1 22/23 results Bernard Bot Chief Financial Officer 22
Slide 23: Key financials
Key financials Gross profit / Retail profit / Adjusted PBT(2) Sales margin % margin % / margin % £6,809m -4.1% £2,496m 36.7% £555m 8.2% £472m 6.9% -2.8%(1) LFL -6.3%(1) -130bps(1) -27.1%(1) -270bps(1) -29.5% -250bps vs +17.4%(1) +16.6%(1) +15.9%(1) -40bps(1) +26.1%(1) +60bps(1) +40.2% +130bps H1 19/
Slide 24: Geographic summary
Geographic summary H1 22/23 sales Retail profit/(loss) Retail profit margin % % 3-year % 3-year 3-year £m % LFL(1) £m % chg(1) % bps chg(1) LFL (1) chg (1) bps chg (1) UK & Ireland 3,221 (11.6)% +16.0% 339 (41.3)% 21.6% 10.5% (570)bps - B&Q 2,082 (13.0)% +16.7% Screwfix 1,139 (8.8)% +14.4% France 2,
Slide 25: Group retail profit bridge
Group retail profit bridge Reflects underspend of Operating cost inflation and marketing, advertising and investment in new stores travel in prior year due to significantly offset by cost COVID lockdowns/restrictions reductions (76) (92) (17) 83 761 (77) (20) (8) Reflects exceptionally strong gross
Slide 26: Summary cash flows
Summary cash flows Net increase in payables/receivables: £172m (net of increase in receivables of £59m) largely driven by timing of inventory purchases, and higher VAT creditors; partially offset by lower payroll creditors (223) Increase in inventory: £(395)m largely driven by inflation, store expan
Slide 27: Net debt and liquidity
Net debt and liquidity H1 FY £m Over £1bn of total liquidity as of 31 July 2022 22/23 21/22 (including undrawn £550m RCF) IFRS 16 lease liabilities (2,318) (2,376) Outflow of £390m in H1 relating to ordinary dividends and share buybacks Financial debt(1) (9) (5) Cash and cash equivalents(2) 479 809
Slide 28: Productivity – key underpin to our performance
Productivity – key underpin to our performance Property Store productivity Lease renegotiations; store ‘rightsizing’ Use of technology and new store operating benefits models; stock ‘shrinkage’ reduction initiatives Aiming to partially Example: In the last 12 months, B&Q has Example: Roll-out of sel
Slide 29: FY 22/23 outlook and guidance
FY 22/23 outlook and guidance H1 and current ▪ Q3 22/23 LFL to date(1) -0.7% (3-year LFL +15.2%) trading consistent with FY adjusted PBT ▪ Continued resilience in outdoor and ‘big-ticket’ of c.£770m category sales trends ▪ Trading scenarios take into account potential for a We have run trading more
Slide 30: Summary
Summary Thierry Garnier Chief Executive Officer 30
Slide 31: Summary
Summary H1 performance in line with expectations and significantly ahead of pre-pandemic levels Supported by continued momentum in market share gains in the UK, France and Poland Resilient sales from both DIY and DIFM/trade categories Delivering on value for our customers and effectively managing pr
Slide 32: Q&A
Q&A
Slide 33: 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 34: 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 34
Slide 35: Appendices
- ] i Appendices.
Slide 36: FY 22/23 technical guidance
FY 22/23 technical guidance(1) Space ▪ Net space growth to impact total sales by c.+1.5%, largely from Screwfix and Poland Gross margin % ▪ In line with pre-pandemic level (FY 19/20: 37.0%) ▪ ‘Other’(2) retail losses of c.£30m (FY 21/22: £10m) (previous guidance c.£20m, with increase driven by New b
Slide 37: H1 performance summary – UK & Ireland
H1 performance summary – UK & Ireland B&Q (including TradePoint) Screwfix LFL sales -13.0%; 3-year LFL +16.7% LFL sales -8.8%; 3-year LFL +14.4% ― ― E-commerce sales -17%; 3-year +149%; E-commerce sales -17%; 3-year +144%; 11% of sales 60% of sales ― TradePoint LFL -3.1%; 21% of sales H1 22/23 H1 21
Slide 38: H1 performance summary – France
H1 performance summary – France Castorama Brico Dépôt LFL sales -0.5%; 3-year LFL +13.4% LFL sales -5.5%; 3-year LFL +13.8% ― ― E-commerce sales -38%; 3-year +226%; E-commerce sales -34%; 3-year +138%; 5% of sales 4% of sales H1 22/23 H1 21/22 % chg(1) Total France Sales (£m) 2,325 2,437 -2.6% Sales
Slide 39: H1 performance summary – Poland
H1 performance summary – Poland Castorama LFL sales +25.9%; 3-year LFL +23.8% ― E-commerce sales -3%; 3-year +330%; 5% of sales H1 22/23 H1 21/22 % chg(1) Castorama Sales (£m) 913 743 +29.0% Sales +29.0%, LFL sales +25.9% (3-year LFL +23.8%) – supported by strong market share gains, notwithstanding
Slide 40: H1 performance summary – Romania and Iberia
H1 performance summary – Romania and Iberia Brico Dépôt Romania Brico Dépôt Iberia Sales(1) -1.8%, LFL sales(2) +8.9% Sales +2.3%, LFL sales +2.3% (3-year LFL(2) +43.6%); LFL reflects (3-year LFL +15.6%); reflecting strong YoY performances in building resilient sales against strong prior & joinery,
Slide 41: Thank you
Thank you