Leading in international home retail
- strong brands
Leading positions in Europe Sales bn Home Improvement Kingfisher Obi Praktiker Leroy Merlin 3.0 2.9 3.5 8.1 Electricals and Furniture Dixons group Media Markt Kingfisher Boulanger 0.7 5.4 5.2 6.5 Source: Retail intelligence 2001
Growth in European home retailing 8.0 7.6 6.6 6.9 6.3 6.0 2.6 2.4 2.5 UK France Germany Electricals DIY Total household Source: Henley Centre, Economics Intelligence Unit
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
Continuing businesses showing growth 4.1 4.6 228 238 00/01 01/02 00/01 01/02 Sales - bn Operating profit - m
Leading in international home retail
Helen Weir Group Finance Director 2001/02 Half Year Financial Performance
Financial Performance Summary financials, including impact of business restructuring Performance update Focus on costs and cash
Pre exceptional profits Continuing Discontinued Total Turnover 4,694 1,398 6,092 Operating profit Home Improvement Electrical General merchandise 205 41 (23) 205 41 (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
There are number of exceptional items m Demerger related Sale of Superdrug 343 Demerger costs 41
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
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)
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%
Earnings per share for the first half Pence 8.1 0.9 0.3 6.9 00/01 Minority interests Other 01/02
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 00/01 4.25 01/02 4.25 (0.30) 3.95 0.395 4.345
Performance Summary continuing operations
Kingfisher continues to show strong sales growth 4.1bn 4.6bn 12.5% 4.7% 2000/01 2001/02 LFL Growth All Store Growth
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
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
The strong sales growth is reflected in good profit growth in most key businesses Sales growth % Profit growth % Home improvement UK 18 20 France 7 4 Other 27 - - Total 15 7 Electrical UK 14 0 France 7 6 Other (11) - - 8 3 Germany 8 - -
ProMarkt underlying profitability 23.4 4.9 m 13.9 1.2 1.5 3.7 12.1 Reported loss 2000/01 Reported loss 2001/02 Extra Month Range Standardisation Redundancy & other one off costs Target stores Underlying loss 2001/02
Operating profit growth in continuing business is over 4% First half operating profit m 228.0 +4.3% 237.8 00/01 01/02
Operating profit growth in continuing business is over 4% First half operating profit - m (5.5) 11.7 (3.9) 6.3 1.2 228.0 237.8 H1 00/01 Retail profit Preopening costs E-Comm Property Central costs H1 01/02
Focus on costs and cash
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
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%
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
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
Darty - Action on costs After sales service restructured Store staff model reviewed Home delivery costs controlled Savings of 5m in first half
First half stock growth has declined m 171m increase 1,442 7m increase 1,543 1,550 1,271 2000/01 first half 2001/02 first half
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
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
Summary Strong business performance: good sales and profit growth Clear focus for second half cost control working capital management capital efficiency Strengthened balance sheet
Operational agenda Maintain momentum of the main growth businesses Accelerate growth of slower growing but strong brands Tackle the underperformers
5 year annual sales growth 20 % 21 20 14 6 8 6 9 7 5 96/97 97/98 98/99 99/00 00/01 Market B&Q
Year end number of Warehouses 80 Estimate 48 59 23 28 35 96/97 97/98 98/99 99/00 00/01 01/02
Year end number of Warehouses 80 Estimate Original target - 50 48 59 23 28 35 96/97 97/98 98/99 99/00 00/01 01/02
Year end number of Warehouses Revised target - 75 80 Estimate Original target - 50 48 59 23 28 35 96/97 97/98 98/99 99/00 00/01 01/02
Year end number of Warehouses Current target 125 stores Revised target - 75 80 Estimate Original target - 50 48 59 23 28 35 96/97 97/98 98/99 99/00 00/01 01/02
Year end number of Warehouses New target 175 stores Current target 125 stores Revised target - 75 80 Estimate Original target - 50 48 59 23 28 35 96/97 97/98 98/99 99/00 00/01 01/02
New product innovation
% Supercentres annual like for like growth 13 6 9 8 6 5 7 8 5 5 96/97 97/98 98/99 99/00 00/01 Market growth Supercentres LFL growth
Maintain the momentum Annual retail profit million 221 263 166 189 102 96/97 97/98 98/99 99/00 00/01 Includes Screwfix
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
fast growth since full ownership Annual retail profit million 38.2 43.9 15.0 98/99 99/00 00/01
store opportunities 38 refurbished 158 franchises 41 old format As at half year end 01/02
targeting 100 stores 100 Target - 100 17 25 26 34 44 97/98 98/99 99/00 00/01 01/02 Year end position Est.
Market share grown by focus on price, choice & services 14 13.3 Market share 13 12 11 10 9 10.4 EDLP broader range better after sales service call centres home delivery 8 97 98 99 00 01 Year end position
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
Interactive store numbers growing 24 31 0 4 98/99 99/00 00/01 01/02
Interactive an increasingly important format 230 stores 82% 18% 28 Interactive stores Percentage of sales As at half year end 01/02
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
Space growth Year end square metres ( 000) 181 188 198 206 225 97/98 98/99 99/00 00/01 01/02 est
Store numbers targeted Target - 240 156 163 173 179 188 97/98 98/99 99/00 00/01 01/02 est Year end position
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
French home improvement a real opportunity Mainchain Rationalising product ranges Project wheel Warehouse rollout Central buying Central distribution
Germany an important market Home retail billions 68 48 38 UK France Germany Source :Verdict European DIY retailing 2001 :GFK/Kingfisher electrical analysis
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
A clear route into new markets Acquisition or organic growth potential market #1or #2 compatible management ideals consistent format & proposition
e - Kingfisher Screwfix Comet Darty ProMarkt Castorama B&Q on line profitable < 1 year < 2 year
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
Leading in international home retail