Kingfisher Plc · LSE:KGF
Kingfisher — FY2021/22 Earnings Presentation
41 slides from Kingfisher's earnings presentation, Mar 22, 2022
Slide 1: Kingfisher Plc Full Year Results
KINGFISHER PLC FULL YEAR RESULTS 12 months to 31 January 2022 22 March 2022
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 Building a track record of delivery Delivering on value & effectively managing near-term pressures Supportive industry trends; strong customer growth & retention Accelerating investments for growth Bernard Bot (CFO): FY 21/22 res
Slide 5: Key messages
Key messages A year of record revenue and profits Gaining market share in the UK and France Effective management of product availability & inflation pressures Delivering against strategic priorities ahead of schedule Accelerating investments for growth Returning over £550m to shareholders Confident
Slide 6: Building a track record of delivery against our financial priorities
Building a track record of delivery against our financial priorities Sales growth Strong free Attractive 1 2 Growing margin 3 4 >2x rate of market cash flow shareholder returns £m £m £m £m c.10% revenue £781m CAGR(1) vs +250bps +42% CAGR Cumulative returns to c.4% market CAGR(2) Adjusted PBT margin
Slide 7: Delivering on value and effectively managing near-term operational pressures
Delivering on value and effectively managing near-term operational pressures Ukraine Delivering on value supporting humanitarian effort; through attractive prices, no operations in Russia; discount banners and no direct business exposure OEB (45% of sales) Inflation Pricing impact on margin continue
Slide 8: Enduring focus on the home has strengthened our industry
Enduring focus on the home has strengthened our industry Continued engagement Insights from Feb/March More WFH to continue among younger generation 2022 consumer surveys: 40% of all people surveyed currently 58% of 18-29 year olds did more DIY; working from home (WFH) 12% started for the first time
Slide 9: Well placed to capture DIFM/trade growth & resurgence in DIY
Well placed to capture DIFM/trade growth & resurgence in DIY Kingfisher’s revenue is evenly balanced across Kingfisher has grown >2x the rate of the market, driven by DIY and DIFM/trade… strong growth in its DIFM/trade business(2) Last 3 years’ average(1) DIY DIFM/Trade Total YoY KGF “Do It Yourself
Slide 10: We continue to drive strong customer growth and retention
We continue to drive strong customer growth and retention Growth in new customers has stayed strong… …with high rates of revenue retention millions % of month 1 spend 120% 8 100% 57% Our acquisition of new The customers that we 6 28% identifiable customers(1) 80% acquired during the pandemic 4 conti
Slide 11: Responsible Business in everything we do
Responsible Business in everything we do Helping to tackle climate change and Becoming a more inclusive company creating more forests than we use Frontline support during the pandemic 25% reduction in Scope 1 & 2 emissions(1) and Colleague NPS in top 10% of global retailers 18% reduction in Scope 3
Slide 12: France – foundations set for more profitable growth
France – foundations set for more profitable growth 1 ‘Repair’ actions complete over last two years New management team in France Much improved price positioning executing well ― and perception at both banners ― 14.8% #2 Rebalanced local vs Group for New SAP platform in Castorama; greater auto
Slide 13: Accelerating investments for growth
Accelerating investments for growth 1 Taking e-commerce ▪ Faster fulfilment to the next level ▪ Scalable e-commerce marketplace 2 Winning with our ▪ Further OEB differentiation own exclusive brands ▪ Sustainable home and energy efficiency 3 Increasing trade ▪ Screwfix expansion in UK and France ▪ Tr
Slide 14: Taking e-commerce to the next level
1 Taking e-commerce to the next level Progress in 2021 Proof points ~3x 91% e-commerce sales of e-commerce orders vs two years ago picked in store Expanded Faster C&C Testing and Enhanced group Developed store-based with more rolling out fast technology B&Q picking model options last-mile delivery c
Slide 15: A new and scalable marketplace to unlock share growth
1 A new and scalable marketplace to unlock share growth B&Q will initially add Expanded choice is 100k SKUs in 2022, key to success in with >500 brands from home improvement >100 vendors DIY.com website traffic Skilled & experienced E-commerce marketplace is among highest of all Group marketplace la
Slide 16: Winning with our own exclusive brands
2 Winning with our own exclusive brands Clear purpose OEB growth Effective management of inflation and and penetration availability in OEB product ranges Drives lower prices for customers ― £5.9bn 45% Launching 9 completely new own brands and Total OEB sales of Group sales(1) Drives high functionali
Slide 17: Capturing the trade customer opportunity
3 Capturing the trade customer opportunity Screwfix – accelerating growth in TradePoint relaunch – excellent Trade proposition in big boxes a UK, Ireland and France progress; targeting >£1bn of revenue significant opportunity Record of 70 Screwfix stores opened Relaunch driving strong performance an
Slide 18: Mobile-led innovation and increased focus on services/DIFM
4 Mobile-led innovation and increased focus on services/DIFM Key areas of progress Enhanced web features including NeedHelp services marketplace now available in UK, France customer design tools & new apps at and Poland Screwfix and Castorama France B&Q’s innovative new online colour mixing service,
Slide 19: Adapting our store footprint to support growth
5 Adapting our store footprint to support growth Compact & ‘medium-box’ store Long-term rightsizing plans 1 expansion & franchising 2 for ‘big-boxes’ now finalised 27 compact stores tests ongoing Completed five rightsizing tests at across the UK, France & Poland B&Q & Castorama France in FY 21/22 ―
Slide 20: Financial priorities underpinned by attractive strategic drivers
Financial priorities underpinned by attractive strategic drivers 1 2 3 Prioritise top line Grow adjusted PBT Generate strong free growth and grow sales in line with sales + cash flow to underpin gradually faster than investment and ahead of market sales over time shareholder returns Attractive marke
Slide 21: FY 21/22 results
FY 21/22 results Bernard Bot Chief Financial Officer 21
Slide 22: Key financials
Key financials Gross profit / Retail profit / Adjusted PBT(2) Sales margin % margin % / margin % £13,183m +18.1% £4,935m 37.4% £1,148m 8.7% £949m 7.2% +9.7%(1) 2-year LFL +10.6%(1) +30bps(1) +16.7%(1) +50bps(1) +20.9% +80bps LFL +9.9% Statutory profit Free cash flow Net debt Net leverage Pre-tax Pos
Slide 23: Geographic summary
Geographic summary FY 21/22 sales Retail profit/(loss) Retail profit margin £m % chg(1) % LFL % 2-year LFL £m % chg(1) % bps chg(1) UK & Ireland 6,505 +13.4% +11.8% +23.8% 794 +16.7% 12.2% +30bps B&Q 4,178 +12.8% +12.3% +26.9% Screwfix 2,327 +14.3% +10.9% +18.2% France 4,498 +9.0% +9.3% +14.8% 221 +
Slide 24: Group retail profit bridge
Group retail profit bridge £m (71) (106) 28 429 (10) (106) 1,148 Cost base increase 984 of +4.9% vs LFL sales increase of +9.9% FY 20/21 LFL Operating Operating Net space(2) New PY savings / FY 21/22 retail profit(1) sales/margin cost inflation cost increases businesses COVID costs(3) retail profit
Slide 25: Summary cash flows
Summary cash flows Net increase in payables: £144m (net of increase in receivables of £23m) £m largely driven by timing of inventory and GNFR purchases Increase in inventory: £(359)m largely driven by inflation, store expansion, rebuild of inventory levels ahead of peak trading in H1 22/23 and very
Slide 26: Net debt and liquidity
Net debt and liquidity £m FY 21/22 FY 20/21 Over £1.3bn of total liquidity as of 31 January 2022 (including undrawn £550m RCF) IFRS 16 lease liabilities (2,376) (2,421) €50m and £50m fixed term loans repaid at maturity in H2 21/22 Financial debt(1) (5) (109) Cash and cash equivalents(2) 809 1,136 Ne
Slide 27: Cost optimisation remains a key area of focus
Cost optimisation remains a key area of focus Flexible and Multi-year cost Inflation Cost programme responsive management reduction cost base programmes Improve store Attractively priced OEB Adjust staffing levels and delivering productivity ranges (from ‘opening incentives to volumes mitigations ―
Slide 28: Attractive returns opportunity
Attractive returns opportunity Delivery against our financial …and disciplined application of our capital priorities during FY 21/22… allocation framework FY 21/22 1 Prioritise top line Invest in attractive growth opportunities • Organic and ‘bolt-on’ inorganic opportunities that accelerate our stra
Slide 29: FY 22/23 outlook
FY 22/23 outlook ▪ Q1 22/23 LFL to date(1) -8.1% Encouraging ▪ 2-year LFL +16.0% (vs Q4 exit rate +13.7%) start to the ▪ Resilient demand & good product availability new year ▪ Current ‘big-ticket’ (showroom) order book +72% YoY, and +79% on a 2-year basis ▪ Mindful of heightened macroeconomic and g
Slide 30: Summary
Summary Thierry Garnier Chief Executive Officer 30
Slide 31: Summary
Summary A year of record revenue and profits Gaining market share in the UK and France Effective management of product availability & inflation pressures Delivering against strategic priorities ahead of schedule Accelerating investments for growth Returning over £550m to shareholders Confident of si
Slide 32: Q&A
Q&A 32
Slide 33: 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 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: [email protected] Email: [email protected] Email: [email protected] 34
Slide 35: Appendices
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Slide 36: FY 22/23 technical guidance
FY 22/23 technical guidance(1) Space Anticipate net space growth to impact total sales by c.+1.5%, largely from Screwfix and Poland New Anticipate ‘Other’(2) retail losses of c.£20m (FY 21/22: £10m) (recorded within ‘Other International’) businesses Anticipate retail loss of c.£5m in relation to B&Q
Slide 37: FY performance summary – UK & Ireland
FY performance summary – UK & Ireland B&Q (including TradePoint) Screwfix LFL sales +12.3%; 2-year LFL +26.9% LFL sales +10.9%; 2-year LFL +18.2% ― ― E-commerce sales +13%; 2-year +146%; E-commerce sales -2%; 2-year +161%; 11% of sales 67% of sales ― TradePoint LFL +20%; 20% of sales FY 21/22 FY 20/
Slide 38: FY performance summary – France
FY performance summary – France Castorama France Brico Dépôt France LFL sales +7.2%; 2-year LFL +13.9% LFL sales +11.6%; 2-year LFL +15.9% ― ― E-commerce sales +46%; 2-year +318%; E-commerce sales +8%; 2-year +192%; 6% of sales 5% of sales FY 21/22 FY 20/21 % chg(1) Total France Sales (£m) 4,498 4,3
Slide 39: FY performance summary – Poland
FY performance summary – Poland Castorama Poland LFL sales +0.3%; 2-year LFL +5.3% ― E-commerce sales +39%; 2-year +276%; 5% of sales FY 21/22 FY 20/21 % chg(1) Castorama Poland Sales (£m) 1,525 1,550 +5.0% Sales up 5.0%, LFL sales up 0.3% – Space growth contributed c.5% to total sales. All categori
Slide 40: FY performance summary – Romania and Iberia
FY performance summary – Romania and Iberia Brico Dépôt Romania Brico Dépôt Iberia Sales(1) +22.8%, LFL sales(2) +15.0% Sales +23.2%, LFL sales +23.2% (2-year LFL(2) +28.0%); reflects (2-year LFL +14.6%); reflects strong demand despite COVID- strong demand, with double-digit related trading restrict
Slide 41: Thank you
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