Leading in international home retail

Transcription

1 Leading in international home retail

2 - strong brands

3 Leading positions in Europe Sales bn Home Improvement Kingfisher Obi Praktiker Leroy Merlin Electricals and Furniture Dixons group Media Markt Kingfisher Boulanger Source: Retail intelligence 2001

4 Growth in European home retailing UK France Germany Electricals DIY Total household Source: Henley Centre, Economics Intelligence Unit

5 Separation successfully delivered on time 1.1bn of cash raised to strengthen Kingfisher balance sheet A continuing interest in Woolworth Group, a 400 million market capitalised business Strengthened management team

6 Continuing businesses showing growth /01 01/02 00/01 01/02 Sales - bn Operating profit - m

7 Leading in international home retail

8 Helen Weir Group Finance Director 2001/02 Half Year Financial Performance

9 Financial Performance Summary financials, including impact of business restructuring Performance update Focus on costs and cash

10 Pre exceptional profits Continuing Discontinued Total Turnover 4,694 1,398 6,092 Operating profit Home Improvement Electrical General merchandise (23) (23) E commerce Property Other (11) 25 (22) (11) 21 (22) 46 (22) Operating profit total 238 (13) 225 Interest (21) (22) (43) Profit before tax 217 (35) 182 * Pre exceptionals and goodwill

11 There are number of exceptional items m Demerger related Sale of Superdrug 343 Demerger costs 41

12 There are number of exceptional items m Demerger related Sale of Superdrug 343 Demerger costs 41 Other ProMarkt 94 Provision on investments E-commerce 12 Tiscali 13 Dekor 23

13 Demerger and property sale will reduce debt levels 2000/01 net debt ( 1.9bn) Sale proceeds: Superdrug Property Demerger debt Post disposal cash flows of demerged businesses 0.3bn 0.6bn 0.2bn ( 0.3bn) Proforma net debt (Post Demerger) ( 1.1bn)

14 Demerger and property sale will reduce debt levels 2000/01 net debt ( 1.9bn) Gearing 52% Sale proceeds: Superdrug Property Demerger debt Post disposal cash flows of demerged businesses 0.3bn 0.6bn 0.2bn ( 0.3bn) Proforma net debt (Post Demerger) ( 1.1bn) c.35%

15 Earnings per share for the first half Pence /01 Minority interests Other 01/02

16 Interim dividend is maintained at last year s level Dividend pence per share Post consolidation total To be paid by Woolworths Group Pre consolidation Kingfisher Impact of Kingfisher share consolidation Post consolidation Kingfisher 00/ / (0.30)

17 Performance Summary continuing operations

18 Kingfisher continues to show strong sales growth 4.1bn 4.6bn 12.5% 4.7% 2000/ /02 LFL Growth All Store Growth

19 Market growth in the UK is higher than France First Half Sales Growth 11.0% 6.0% 3.2% 2.6% UK Market Franch market UK Market Franch market Home Improvement Electricals

20 Our main brands have continued to grow faster than the market 17.7% First Half Sales Growth 11.0% 13.9% 6.0% 6.0% 5.9% 3.2% 2.6% UK Market B&Q French market Casto/ Brico UK Market Comet French market Darty/ BUT Home Improvement Electricals

21 The strong sales growth is reflected in good profit growth in most key businesses Sales growth % Profit growth % Home improvement UK France 7 4 Other Total 15 7 Electrical UK 14 0 France 7 6 Other (11) Germany 8 - -

22 ProMarkt underlying profitability m Reported loss 2000/01 Reported loss 2001/02 Extra Month Range Standardisation Redundancy & other one off costs Target stores Underlying loss 2001/02

23 Operating profit growth in continuing business is over 4% First half operating profit m % /01 01/02

24 Operating profit growth in continuing business is over 4% First half operating profit - m (5.5) 11.7 (3.9) H1 00/01 Retail profit Preopening costs E-Comm Property Central costs H1 01/02

25 Focus on costs and cash

26 Key initiatives Cost reduction B&Q Supply chain Comet Darty Working capital management Capital efficiency Cost Price reductions Far East sourcing Project Pulse Cost base efficiencies Stock management programmes Reduced capex

27 B&Q Cost Price Reduction Example: bath range Suppliers consolidated from 5 to 2 Long term relationships to encourage investment 50% of range redesigned Product cost savings of 15%

28 Kingfisher companies are benefiting from group direct sourcing expertise India Shanghai Hong Kong Example: vinyl tile 100% Saving of 11% 89% Distribution Cost 20% Product cost Product cost 69% Over 65% year on year increase UK sourced Imported product

29 The aim of Comet s Project Pulse is to better meet customer needs and raise cash margin Key elements Stronger, clearer product feature information Store colleagues retrained to focus on customers real needs Rollout in waves from H2 onwards

30 Darty - Action on costs After sales service restructured Store staff model reviewed Home delivery costs controlled Savings of 5m in first half

31 First half stock growth has declined m 171m increase 1,442 7m increase 1,543 1,550 1, /01 first half 2001/02 first half

32 A continued focus on stock has resulted in a significant decline in LFL stocks 50 (43) 1,543 1,550 Year end stock New space LFL reductions Half year

33 Capex Efficiency Example: B&Q Warehouse Saving Building works 9% Electrics 7% Equipment 16% Total saving 10% Removal of lighting mezzanine Installation of fluorescent strip lighting Reduction in steel for shop fitting Stock 10% Reduction in bulk displays

34 Summary Strong business performance: good sales and profit growth Clear focus for second half cost control working capital management capital efficiency Strengthened balance sheet

35 Operational agenda Maintain momentum of the main growth businesses Accelerate growth of slower growing but strong brands Tackle the underperformers

36 5 year annual sales growth 20 % /97 97/98 98/99 99/00 00/01 Market B&Q

37 Year end number of Warehouses 80 Estimate /97 97/98 98/99 99/00 00/01 01/02

38 Year end number of Warehouses 80 Estimate Original target /97 97/98 98/99 99/00 00/01 01/02

39 Year end number of Warehouses Revised target Estimate Original target /97 97/98 98/99 99/00 00/01 01/02

40 Year end number of Warehouses Current target 125 stores Revised target Estimate Original target /97 97/98 98/99 99/00 00/01 01/02

41 Year end number of Warehouses New target 175 stores Current target 125 stores Revised target Estimate Original target /97 97/98 98/99 99/00 00/01 01/02

42 New product innovation

43 % Supercentres annual like for like growth /97 97/98 98/99 99/00 00/01 Market growth Supercentres LFL growth

44 Maintain the momentum Annual retail profit million /97 97/98 98/99 99/00 00/01 Includes Screwfix

45 Lots more growth to come RMI market share - 00/01 12% B&Q 76% Builders merchants & small operators 6% Homebase 7% Focus Do it All

46 fast growth since full ownership Annual retail profit million /99 99/00 00/01

47 store opportunities 38 refurbished 158 franchises 41 old format As at half year end 01/02

48 targeting 100 stores 100 Target /98 98/99 99/00 00/01 01/02 Year end position Est.

49 Market share grown by focus on price, choice & services Market share EDLP broader range better after sales service call centres home delivery Year end position

50 Continuing the growth Profit improvement programme Supply chain cost reduction Customer service improvement more customer facing hours more after sales service centres Interactive store roll out continues

51 Interactive store numbers growing /99 99/00 00/01 01/02

52 Interactive an increasingly important format 230 stores 82% 18% 28 Interactive stores Percentage of sales As at half year end 01/02

53 Market share - % The leading French electrical specialist Darty 13.8 FNAC 5.0 Boulanger 5.0 BUT 3.0 Source: UBS Warburg/Retail Intelligence April 2001

54 Space growth Year end square metres ( 000) /98 98/99 99/00 00/01 01/02 est

55 Store numbers targeted Target /98 98/99 99/00 00/01 01/02 est Year end position

56 French home improvement a real opportunity market size market share but Relative performance versus B&Q same same LFL* 1 2 sales per square foot 4 5 net profit margin 3 4 * weighted by market growth

57 French home improvement a real opportunity Mainchain Rationalising product ranges Project wheel Warehouse rollout Central buying Central distribution

58 Germany an important market Home retail billions UK France Germany Source :Verdict European DIY retailing 2001 :GFK/Kingfisher electrical analysis

59 Turnaround plans progressing central buying in place range standardisation complete cost reduction in stores and central centralise distribution improve gross margin address the 13 loss making stores

60 A clear route into new markets Acquisition or organic growth potential market #1or #2 compatible management ideals consistent format & proposition

61 e - Kingfisher Screwfix Comet Darty ProMarkt Castorama B&Q on line profitable < 1 year < 2 year

62 Kingfisher today Strongest brands in Europe Leaders in growth markets Clear profit growth agenda Actions for operational efficiency Determined to re-build the Group s rating

63 Leading in international home retail