Paris event 30 March 2011
Agenda Key figures Market context Strategic outlines Castorama Brico Dépot France region mission 3
Agenda Key figures Market context Strategic outlines Castorama Brico Dépot France region mission 4
Key Figures France Region 2006 2007 2008 2009 2010 Market share (1) 23,0% 23,7% 24,2% 24,6% ADEO 20,8% (24,4%) 3 21,5% (24,6%) 3 Mr Bricolage Bricomarché Bricorama 8,7% 8,0% 2,1% 9,4% 8,0% 2,5% Sales ( bn) 4,3 4,7 4,8 4,8 Store number 179 186 197 201 CASTORAMA ( bn) 2,4 2,5 2,6 2,6 Store number 98 98 99 101 BRICO DEPOT ( bn) 1,9 2,2 2,2 2,2 Store number 81 89 98 100 4,9 203 2,7 101 2,2 102 Retail Operating Profit ( mil) 304 343 350 363 407 ROC(2) (%) 11,3 11,9 12,4 13,6 (1)Source UNIBAL: Market share based on calendar year (2) This is lease adjusted returns excluding goodwill and property profit (3) 1 st excluding Weldom / 2 nd including 100% of weldom s sales 5
Agenda Key figures Market context Strategic outlines Castorama Brico Dépot France region mission 6
Market context Kingfisher outperforms a market that is recovering... 7.0% King France Marché BdF 5.0% 3.0% 1.0% +1,8% +1,4% Jan-08 Jan-09 Jan-10 Jan-11-1.0% -3.0% -5.0% -7.0% 7
Market context... supported by Castorama performance... 7.0% Casto King France Marché BdF 5.0% +3,8% 3.0% 1.0% +1,8% +1,4% Jan-08 Jan-09 Jan-10 Jan-11-1.0% -3.0% -5.0% -7.0% 8
Market context... impacted by a tense market on trade for Brico Dépot... BD Trade to private HH excl DIY 6.0% 4.0% 2.0% 0.0% +1,0% -2.0% -4.0% -3,6% -6.0% -8.0% -10.0% -12.0% -14.0% 9
janv-08 avr-08 juil-08 oct-08 janv-09 avr-09 juil-09 oct-09 janv-10 avr-10 juil-10 oct-10 janv-11 Market Context but residential market is back to growth Market recovery of existing homes Number of new Individual Homes construction is increasing 850 Nb of transactions existing homes (cumulative 12 months, in OOO) cumulative 12 months Authorized Started 800 750 700 650 600 290 000 270 000 250 000 230 000 Authorized 550 210 000 500 190 000 Started nov-07 nov-08 nov-09 nov-10 New home credit production (cumulative 12 months) 170 000 150 000 160000 150000 140000 130000 120000 110000 100000 90000 80000 70000 janv-08 janv-09 janv-10 janv-11 Sources : Ministère du développement durable, CGEDD, Banque de France, FPC, HSBC 10
Agenda Key figures Market context Strategic outlines Castorama Brico Dépot France region mission 11
Castorama Understand the strategic evolution of Castorama... 2002. 2007 2009. 2012 2012.. Revenues Productivity Evolution of Products and Services Offer Back to basics CPR Price Efficiency Store Investment Programme Supply Chain Back to market Inspire the market 12
Castorama based on major customer trends Give me power ON-LINE CONSUMER LOHAS Health and Green Lifestyles of Health and Sustainability Emphasize me SENSE & SENSITIVITY Guide me Economy of Care Easy and Inspiring «SIMPLEXITY» 13
Castorama a new internal dynamic aimed at our customers Fluid Shopping Experience Need for simplicity The conquest of autonomy Please oneself Easy actions Sense of belonging Intuitive products and actions 14
Castorama supported by a permanent work on offer and ranges... 2010 55 Range reviews 40% 60 20% 30 0% 2006 2007 2008 2009 2010 0 RR number % of sales impacted 15
Castorama enhance by innovation to simplify the response to customer... 16
Castorama enhance by innovation to simplify the response to customer... 17
Castorama enhance by innovation to simplify the response to customer... 18
Castorama and through the 10 new super brands... 19
Castorama and through the 10 new super brands... 20
Castorama already common between B&Q and Casto... 21
Castorama a target at Castorama of approx 3000 skus in store in 2011... 400 Skus 300 Skus 100 Skus 200 Skus 400 Skus 50 Skus 300 Skus 900 Skus 50 Skus Target: c.30% of total sales made with own Brands 100 Skus 22
Castorama Do it smart: a global approach 23
Castorama Perspectives Revamp program 1 st test on smart store (Villabé) 2011/12 1 new store and 4 relocations Finalize revitalisation programme Accelerate range review programme Offer Reinforce offer and visibility of eco-products Increase offer of labelled product ( c est malin, c est simple,...) Innovation Keep on nurturing 3D project Put new storage ranges on market People Pursue dynamic of collaborative and communicational project New bonus scheme roll out Product forum 24
Agenda Key figures Market context Strategic outlines Castorama Brico Dépot France region mission 25
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Brico Dépôt A world class model... Number of Stores 120 100 M 2.5 2 Market Share* N 3 Sales per sqm (excl Tax) 4760 80 60 40 1.5 1 +/- 10 000 Skus Sales per worked hour (excl Tax / Store staff only) 280 20 0.5 SC & SAP efficiency Sales per reference 0 Store number Sales 0 Stock turn ~80 days 200k CAGR 2002-2007 11,3% 17,1% *2010 data 26
Brico Dépôt based on an efficient promise Every Day Low Price: Promise to beat competitors across the range Short ranges: 20/80 for Building and Renovation Product availability: Products immediately available in big volume (no orders) Arrivages": off-range products in limited quantity 27
Brico Dépôt addressing private & professional markets at the same time... 100% % CA % Sales per department 80% 25.9% 33.4% Decorative Power tools Hand tools 60% 40% 35.5% 37.9% Electricity Flooring Kitchen and plumbing Tradesmen Heavy DIYers DIYers 20% 0% 100% 80% 60% 38.6% Brico Dépôt Customer segments 19,0% 22,0% 28.7% DIY Professional Semi-professional Building materials Woodwork Carpentry 40% Two different markets addressed Traditional DIY retailers Building merchants 20% 0% 59,0% % of sales Individuals 28
Brico Dépôt but needing now to be reinforced and renewed... Reinforce the foundation Price as a basic Develop and Renew the concept Best trends follower? Value for money? Simplicity Sustainable development? Essential? 29
Brico Dépôt through a strategic plan in 2 phases... 2009 2010 2011 2012 - Reaffirm and strengthen the fundamentals Brico Depot (Ex: Range reviews, direct sourcing, team support) Create new advantages and renovate the concept to strengthen the brand 30
Brico Dépôt Example of axis rolled out: the range reviews Kitchen Furniture 2009/01: 84% of ranges > 4 Years Implemented from April to December 2010 26 range reviews Best net sales Security Systems Stronger progress 31
Brico Dépôt Example of axis rolled out: develop sourcing +150M$ +4,4bps 2009 2010 KSO purchases in M$ 2009 2010 Direct sourcing % (on COGS) 32
Brico Dépôt Example of axis rolled out: team support Dedicated team to support the change programme (strategic planning, project management and communication) Dedicated recruitment team Collaborative process «Brico dépôt demain» Store manager training Setting-up of a test dynamic Concept POS, signage Store efficiency 33
Brico Dépot Perspectives Marketing Strategy Brand platform Multi-channel strategy 2009 2010 2011 2012 - Reaffirm and strengthen the fundamentals Brico Depot Create new advantages and renovate the concept to strengthen the brand Offer and Concept Operations & Organisation Price strategy and pricing tools set up 24 range reviews: redesign of principle of range structure Own brand strategy Refine and validate Blue Print Continue roll out of lean project in store and new in store management structure Roll out of new Supply Chain / Operation organization Improvement of supply chain performances Management of total margin and business performance People & Leadership Specific training for regional and store directors Redefine mission of Head office vs. Stores 34
Agenda Key figures Market context Strategic outlines Castorama Brico Dépot France region mission 35
Kingfisher France Working together Create links Opco Board meetings KF France Board Operational cross-opco steering committees Create sources of short-term improvement Purchasing synergies GNFR synergies Sharing best practices Build a performing and long-term development Store development strategy 36
Kingfisher France Create performance conditions A common approach...... a local adaptation On a quarterly basis payment Operational measure Operational measure 37
Kingfisher France Working together Create links Create sources of short-term improvement Structure and develop common vendors management: KFF rebates Price and rebates harmonisation Common sourcing and common products development Integration of Brico Dépôt Spain Build a performing and long-term development Collaborative organisation on GNFR 38
Kingfisher France Strong opportunities to increase store number Create links Create sources of short-term improvement Build a performing and long-term development End 2011: 205 stores 2 openings, 4 relocations & 2revamps Castorama : c.67% revitalised end 2011 Long term potential: 240 stores 39
End 2011: 205 stores 2 openings 4 relocations 2 revamps End 2011 Castorama : c.67% revitalised end 2011 Long term potential: 240 stores 40
Kingfisher France Strong opportunities to increase store number Val d Europe Pamiers Villabé Flandres St Dizier Lormont 41
Two companies Two concepts Two business models One Strategy 42