Kingfisher Plc · LSE:KGF
Kingfisher — Corporate Update (August 2007)
19 slides from Kingfisher's corporate update, Aug 14, 2007
Slide 1: Castorama Poland Analysts visit
Castorama Poland Analysts visit 14 Aug 2007 Castorama Polska Sp. z o.o. Analysts visit 14/08/2007 1
Slide 2: Intro
Intro • Market leader in Poland • “Castorama” and “Brico Depot” brands • 36 Casto and 1 Brico store • Over 7,300 employees • Stable, winning strategy in a growing market • Ambitious development plans in difficult legal environment Castorama Polska Sp. z o.o. Analysts visit 14/08/2007 2
Slide 3: Agenda
Agenda: • Poland – market outlook • Polish home improvement market • Castorama / Brico today and in the future • Store visits Castorama Polska Sp. z o.o. Analysts visit 14/08/2007 3
Slide 4: Poland - market outlook: Macroeconomics
Poland - market outlook Macroeconomics • Investment potential • 5.8% GDP growth in 2006 compared to 1.5% EU average • Region’s leader in GDP per capita growth • Increasing wages, low interest rates driving investment and customer spend • People • Market of 38m people • Youngest EU society with more
Slide 5: Poland - market outlook: Macro assumptions
Poland - market outlook Macro assumptions • GDP growth over 5% each year driven by investment (EU and Euro2012) and customer spend • Unemployment – down to 9% by 2009 form current 12.4% (June 2007) • Inflation growing from 2.5% to 3.7% due to increased consumer spend and price convergence effect aft
Slide 6: Poland - market outlook: DIY market implications
Poland - market outlook DIY market implications • Booming market due to increased wages and low interest rates • Property prices - growth of 8 - 40% p.a. depending on location for apartments and 8-10% for land driven by increased wealth and EU convergence • Home improvement products prices increase
Slide 7: Poland – development of Castorama
Poland – development of Castorama 600 507.8 80 417 400 285.6 321.9 52.5 58.4 60 236 46.4 Total Sales GBP £m 179.5 41.4 40 200 30.5 EBIT GBP £m 22.5 20 0 0 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 £m 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 Total Sales 179.5 236.0 285.6 321.9 417.0 507.
Slide 8: DYI market - competition
DYI market - competition Castorama / Brico / Competitors Number of 2004 2005 2006 2007 stores • Fierce competition 25 29 33 39 • Development programs – smaller formats - - 1 4 • Possible consolidations 14 16 21 26 • Alignment of strategies to follow the leader 23 25 28 30 16 17 17 19 35 32 32 33 - -
Slide 9: DYI market - client
DYI market - client Following the survey as per the end of March 2007 declared Castorama clients represent 10.45 % of adult population of Poles over 15 years of age which is close to 3.2m people. *) Source: SMG / KRC TGI survey Castorama Polska Sp. z o.o. Analysts visit 14/08/2007 9
Slide 10: DYI market - client
DYI market - client Sex Age Education Type Technic al 21-31 51-65 High 20% 20% Female 25% 29% Trade 28% 38% Male 62% Individual 72% 32-50 55% Medium 51% Customers expectations: • Professional and competent service • Quality reflected in product price • Wide selection of products also for female cust
Slide 11: DYI market - client
DYI market - client Stores visited the most frequently (%) Catorama 56,6 56.6 Obi 52,8 52.8 Leroy Merlin 34,6 34.6 Praktiker 33,8 33.8 Nomi 22,0 22.0 Bricomarche 8,8 8.8 Mrówka 1,8 1.8 Jasam 1,6 1.6 Brico Depot 1,2 1.2 0 10 20 30 40 50 60 • Market leader followed closely by Obi • Numerous smaller co
Slide 12: DYI market – legal environment
DYI market – legal environment • Ongoing, unfavourable political context against retail chains (impediments to expand, numerous restrictions for retailers) • Lack of city master plans defining the locations for big retailers • New law on big retailers authorizations just introduced: • Applicable for
Slide 13: Castorama - strategy
Castorama - strategy Simple, efficient, and friendly in warehouse format Large range of products for construction, home improvement and garden for individual consumers and trade EDLP Large quantities of stock available - high density of products Clear and simple merchandising to make the customers e
Slide 14: Castorama – strategy, new trends
Castorama – strategy, new trends More feminisation New, more decorative range Better display of products : to inspire our customers. New way of communication: books, internet “How to” boards to make DIY easier Improved service Third party installation referrals Interior designers available in every
Slide 15: Brico Depot - strategy
Brico Depot - strategy For contractors and big DIY-ers Close distance, competitive prices Tighter range to suit their needs: constructions, installations Product availability, large quantities Easy store access, opening hours For individuals Competitive prices Product availability Close distance, ea
Slide 16: Brico – why second format for Poland?
Brico – why second format for Poland? Reasons: Faster and easier development in Poland Avoid special planning consent for stores over 2,000 sqm Gain market shares from competitors and make their development more difficult Strengthen Kingfisher Group position on the Polish market 70 70 60 Casto 50 Br
Slide 17: Castorama / Brico – changing customer
Castorama / Brico – changing customer • Decorative categories : more design, frequent range changes, new ways of communication • Direct sourcing where it’s profitable and give us differentiation possibility • Own brands : developed with the group and locally • Well structured range very simple and c
Slide 18: Castorama / Brico – own brands and sourcing
Castorama / Brico – own brands and sourcing Strategic initaitives: • Increasing own brands to differentiate from competitors • More group sourcing, capitalising on group scale, innovation and design. Common ranges with B&Q and other Casto / Brico businesses Castorama Polska Sp. z o.o. Analysts visit
Slide 19: Castorama – communication with clients
Castorama – communication with clients • New ads played on major Polish TV Channels : TVP1, TVN, POLSAT • Institutional and Product • Successful products choice Castorama Polska Sp. z o.o. Analysts visit 14/08/2007 19