Kingfisher Plc · LSE:KGF
Kingfisher — H1 2021/22 Earnings Presentation
35 slides from Kingfisher's earnings presentation, Sep 21, 2021
Slide 1: Kingfisher Plc Half Year Results
KINGFISHER PLC HALF YEAR RESULTS 6 months to 31 July 2021 21 September 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 Update on operational impacts of COVID - Strategy update - Looking ahead – market trends and growth drivers Bernard Bot (CFO): H1 21/22 results Performance overview - Cash, debt and liquidity - Capital allocation framework - FY 2
Slide 5: Key messages
Key messages Strong financial performance and improved competitive position Effective management of product availability, logistics and inflation pressures Rapid progress made with ‘fixing’ issues from previous years Delivery against ‘Powered by Kingfisher’ strategic priorities ahead of schedule New
Slide 6: Strong H1 financial performance
Strong H1 financial performance Prioritising top line growth – total H1 sales £7.1bn; LFL +22.8% and 2-year LFL +21.3% E-commerce sales up 21%; 2-year growth up 216% (19% penetration vs 7% in 2019) Good start to the second half of the year: Q3 21/22 LFL to date(1) -0.6%; 2-year LFL +16.1% Adjusted P
Slide 7: Effective management in H1 of the operational impacts of COVID
Effective management in H1 of the operational impacts of COVID No major issues around Improved product colleague absence or availability vs start of year recruitment Managed risks effectively Maintaining strong on shipping containers & price index HGV drivers Inflation impact on margin Continued foc
Slide 8: Rapid progress made with 'fixing'
Rapid progress made with ‘fixing’ UK and Poland ‘fixing’ complete; France on track to complete within 12 months Fundamental reorganisation of both the commercial and technology & digital operating models SAP platform roll-out near completion Adding significant talent in digital, technology and data
Slide 9: France – 'repair and modernise' on track
France – ‘repair and modernise’ on track Rapidly progressing range repair & 1 ‘Repair’ actions largely complete 2 logistics optimisation Strong new leadership and key teams strengthened Castorama range: >6,000 SKUs introduced since Feb 2020; ― more local brands and OEB to support extended choice; Re
Slide 10: Delivery against strategic priorities ahead of schedule
Delivery against strategic priorities ahead of schedule Grow e-commerce sales Differentiate and Mobile-first and 1 2 grow through OEB 3 service orientated Accelerated focus on last-mile delivery Roll-out of new kitchen range in UK, New Screwfix app with multiple innovations and store-picked orders F
Slide 11: E-commerce sales now three times higher than in 2019
E-commerce sales now three times higher than in 2019 E-commerce development going from strength to strength Proof points in H1 Managing high Continuous improvements to store preparation, IT systems >200% increase(1) of online demand and supply chain to manage high e-commerce demand customers compare
Slide 12: Industry-leading OEB providing differentiation and value
Industry-leading OEB providing differentiation and value Strong OEB performance continues Successful roll-out of new kitchen range £3.2bn – total OEB sales in H1 New range implemented in UK (B&Q), France, Poland & Romania ― ― Higher quality rating score than leading competitors +22.8% – OEB LFL sale
Slide 13: Responsible Business update
Responsible Business update Helping to tackle climate change and Becoming a more inclusive company creating more forests than we use Continuing to ‘do the right thing’ for our colleagues during COVID New carbon reduction targets (consistent with 1.5°C trajectory to 2025) now approved by SBTi Colleag
Slide 14: New longer-term industry trends creating growth opportunities
New longer-term industry trends creating growth opportunities More working from home (WFH) New generation of younger DIY’ers Home improvement & DIY activity among the 50% of all people surveyed worked from younger age group up significantly vs 2019 home more or for the first time Among the 18-34 yea
Slide 15: Now ready to accelerate our investments for growth
Now ready to accelerate our investments for growth Acceleration of digital investment – with faster fulfilment and expanded product choice Screwfix UK and Ireland – increased store target of more than 1,000 stores Screwfix France – encouraging early results from online launch; first stores to open i
Slide 16: HY 21/22 results
HY 21/22 results Bernard Bot Chief Financial Officer 16
Slide 17: Key financials
Key financials Gross profit / Retail profit / Adjusted PBT(2) Sales margin % margin % / margin % £7,101m +21.3% £2,697m 38.0% £767m 10.8% £669m 9.4% +22.2%(1) 2-year LFL +25.4%(1) +100bps(1) +45.1%(1) +170bps(1) +61.6% +240bps LFL +22.8% Statutory profit Free cash flow Net debt Net leverage Pre-tax
Slide 18: Geographic summary
Geographic summary HY 21/22 sales Retail profit/(loss) Retail profit margin £m % chg(1) % LFL % 2-year LFL £m % chg(1) % bps chg(1) UK & Ireland 3,570 +29.7% +28.1% +31.2% 579 +40.8% 16.2% +130bps B&Q 2,378 +29.4% +28.8% +34.0% Screwfix 1,192 +30.4% +26.8% +25.4% France 2,437 +23.3% +24.4% +17.1% 12
Slide 19: Group retail profit bridge
Group retail profit bridge Related to non-recurring net £m cost savings in the prior year, due to COVID 15 (24) (131) 13 521 (67) (89) Cost base increase 767 of +9.3% vs LFL sales increase 529 of +22.8% H1 20/21 LFL Net space(2) Operating Other Supply & Furlough & Other PY H1 21/22 retail profit (1)
Slide 20: Summary cash flows
Summary cash flows Net increase in payables(1): £460m £m largely driven by timing of inventory purchases and higher VAT creditors associated with continued strong sales levels in H1 Increase in inventory: £(303)m largely driven by ongoing rebuild of inventory levels 157 (242) (74) (131) 1,013 (102)
Slide 21: Net debt and liquidity
Net debt and liquidity £m H1 21/22 FY 20/21 Over £2bn of total liquidity as of 31 July 2021 (including undrawn £550m RCF) IFRS 16 lease liabilities (2,319) (2,421) Financial debt(1) of £105m as of 31 July 2021 Financial debt(1) (105) (109) Cash and cash equivalents(2) 1,516 1,136 Net leverage of 0.5
Slide 22: Capital allocation framework
Capital allocation framework Invest in attractive Secure financial Sustainably grow Distribute surplus growth opportunities resilience dividends capital Invest in attractive Target solid investment Progressive and Evaluate capital needs organic or inorganic grade credit rating sustainable growth and
Slide 23: FY 21/22 outlook and guidance
FY 21/22 outlook and guidance The following guidance applies in the event of no adverse change in COVID-related confinement measures (for example, new lockdown restrictions resulting in store or showroom closures) Good start to the second half of the year Q3 21/22 LFL to date(1) -0.6%; 2-year LFL +1
Slide 24: Summary
Summary Thierry Garnier Chief Executive Officer 24
Slide 25: Summary
Summary Strong financial performance and improved competitive position Effective management of product availability, logistics and inflation pressures Rapid progress made with ‘fixing’ issues from previous years Delivery against ‘Powered by Kingfisher’ strategic priorities ahead of schedule New long
Slide 26: Q&A
Q&A 26
Slide 27: ADR programme
ADR programme Kingfisher ADRs trade on OTCQX – the premier tier of the Benefits of ADRs to U.S. investors: U.S. 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 28: 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 28
Slide 29: Appendices
Appendices 29
Slide 30: FY 21/22 technical guidance
FY 21/22 technical guidance(1) LFL sales H2 21/22 – planning for LFL scenarios of -7% to -3% (previously -15% to -5%); outlook 2-year LFLs of +9% to +13% Anticipate net space growth (excluding Russia) to impact total sales by c.+1.5%, largely from the Space UK and Poland. Total sales impact from the
Slide 31: H1 performance summary – UK & Ireland
H1 performance summary – UK & Ireland B&Q (including TradePoint) Screwfix LFL sales +28.8% LFL sales +26.8% ― ― E-commerce sales +28%(1); c.11% of sales E-commerce sales +14%(1); c.70% of sales ― TradePoint LFL +c.39%; c.19% of sales H1 21/22 H1 20/21 % chg(1) Total UK & Ireland Sales (£m) 3,570 2,7
Slide 32: H1 performance summary – France
H1 performance summary – France Castorama France Brico Dépôt France LFL sales +23.1% LFL sales +25.8% ― ― E-commerce sales +74%(1); c.8% of sales E-commerce sales +13%(1); c.6% of sales H1 21/22 H1 20/21 % chg(1) Total France Sales (£m) 2,437 2,028 +23.3% Sales up 23.3%, LFL sales up 24.4% – reflect
Slide 33: H1 performance summary – Poland
H1 performance summary – Poland Castorama Poland LFL sales (5.0)% ― E-commerce sales +35%(1); c.7% of sales H1 21/22 H1 20/21 % chg(1) Castorama Poland Sales (£m) 743 783 (0.6)% Sales down 0.6%, LFL sales down 5.0% – reflecting temporary store closures in Q1 21/22, partially offset by strong recover
Slide 34: H1 performance summary – Romania and Iberia
H1 performance summary – Romania and Iberia Brico Dépôt Romania Brico Dépôt Iberia Sales(1) +47.6%, LFL sales(2) +19.2% Sales +45.5%, LFL sales +45.5% driven by strong performance in driven by strong recovery in trading building & joinery, surfaces & following prior year COVID-related décor and outd
Slide 35: Thank you
Thank you 35