Gerry Murphy. Chief Executive Officer

Gerry Murphy Chief Executive Officer

Kingfisher today Strong Q1 performance Retail sales 2615.8 million up 8.5%, LFL up 3.9% Retail profit 153.5 million, up 36.5% KESA demerger on track for Q2 New name : KESA Electricals plc David Newlands,, Chairman Jean-Noël Labroue,, Chief Executive Martin Reavley,, Finance Director

Kingfisher Home Improvement Uniquely positioned in attractive markets Scale 3 rd largest Home Improvement retailer International - European No. 1 and leadership in Asia Market leading retail brands, built on value for money Experienced and focused management Strong financials, renewed focus on returns

Strength of brands drives strong sales growth bn CAGR 11.8% 6.3 3.6 4.0 4.2 4.7 5.4 1998 1999 2000 2001 2002 2003 Figures without Reno Depot, Casto Germany, Casto Belgium, Casto Brazil, Nomi

.. and double digit growth in operating profit bn CAGR 12.9% 524 286 327 357 401 438 1998 1999 2000 2001 2002 2003 Figures without Reno Depot, Casto Germany, Casto Belgium, Casto Brazil, Nomi

Kingfisher Home improvement operating companies Wholly owned Operating companies B&Q (incl. B&Q Direct) Castorama France Brico Dépôt Castorama Poland Castorama Italy B&Q China Number of stores 321 105 58 17 15 9 Sales growth (CAGR 2000-2003) 16.5% 3.5% 35.2% 36.2% 23.2% 129.2%

Our objective driving growth and efficiency Driving business growth Leveraging existing space Aggressive roll-out out of new space Driving operating efficiency Supply chain Sharing skills superior returns

Our markets

Growing and attractive home improvement market Large, global market Strong growth over last five years Growth forecast to continue Common products Fragmented supplier base

Europe & Asia represent 40% of the world Home Improvement market 40bn 130bn 230bn Europe North America Asia Rest of World

DIY market growth expected to outperform retail sector.. Sales growth % UK France 4.9% CAGR = 4.5% CAGR = 4.1% 4.5% 4.2% 3.8% 3.8% 3.4% 3.2% 2.8% 2002 2006 Source: Mintel DIY All retail 2002 2006

Market growth driven by a combination of.. Personal wealth Cyclical factors Housing transactions Socio-economic factors Rising number of households Increased female participation Increased interest in style Affordability

Clear link between DIY spend and disposable income Disposable Income per Capita ( ) 25 20 15 10 5 0 Greece Italy Spain 0 100 200 300 400 500 UK France DIY Expenditure per Capita ( k) Denmark Germany Source: Verdict 2002

UK DIY market only marginally affected by housing transactions YOY Change 20 15 10 5 0-5 1992 1993 1994 1995 1996 1997 1998 1999 2000-10 -15 Source ONS, Verdict Property transaction (volume) DIY spend

French DIY market only marginally affected by housing transactions YOY Change 25 20 15 10 5 0-5 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002-10 Property transaction (volume) DIY spend Source Unibal, INSEE

Number of households increasing ahead of population growth UK population (m) UK households (m) + 3.44% + 7.38% 59.01 60.14 61.04 23.69 24.72 25.44 1997 2002 2007e 1997 2002 2007e Source : EIU

Number of households increasing ahead of population growth French population (m) French households (m) + 4.51% + 10.39% 58.49 59.9 61.13 23.28 24.45 25.7 1997 2002 2007e 1997 2002 2007e Source : EIU

Women are now the decision makers for major purchases in the UK 60 50 40 % 30 20 10 0 Conservatory Wooden Floors Fitted Kitchen Bathroom Suite Men Women Source TGI : Had major or equal say in purchase of

and are the catalyst for home improvement projects Agreement with attitudinal statements I m always looking for ideas to improve my home Magazines give me ideas for how to improve my home I change decoration at home as often as I can afford to Men 36 29 11 Women 43 40 17 Source : TGI annual survey

UK Media coverage encourages the DIY amateur enthusiast.. Then those with specialist knowledge Gardeners World Gardeners Question time Now the amateur enthusiast Changing Rooms Home Front Charlie s Garden Army Ground Force

Kingfisher driving business growth

Kingfisher well positioned in key markets UK Market Market size ( bn) 17 Market position 1 Relative market share versus next competitor 2.1 France 17 1 1.2 Italy 11 2 0.8 Poland 3 1 1.3 Taiwan 1 1 na China 12 1 1.5

..but strategy is to drive business growth Driving business growth Leveraging existing space Product innovation Services Pricing Aggressive roll-out out of new space

Scope for significant sales density improvements Sales per square metre index (B&Q = 100) 160 140 Index (B&Q = 100) 120 100 80 60 40 Brico Depot Home Depot Leroy Merlin B&Q UK Castorama France Homebase

Driving growth product innovation B&Q decking sales ( m) +400% 1999 2002e Market share in 2002-32%

Driving growth product innovation B&Q laminate flooring sales ( m) +300% 1999 2002e Market share in 1999 15% 2002 34%

Driving growth own brands Performance Power own label range of power tools market leader in the UK with 38% market share Colours Own label range of decorative paint 19% market share

Driving growth new services Installation Products Kitchens Bathrooms Fireplaces Windows/doors Sales 2000-02 02 CAGR 21.8% 13.5% 24.4% 11.1% DIY market CAGR 2000-02 02 5.5%

Driving growth new services Financial services You Can Do It more than 100,000 cards since Nov 02 Homeplan more than 20,000 cards since Nov 02 L Atout ¾ million cards since 1997

Bringing down the price of DIY for our customers.. Warehouse price reduction profile (index) 102 100 98 96 94 92 90 88 98/99 99/00 00/01 '01/02 '02/03

has driven total sales growth B&Q sales growth vs. pricing index Price index 102 100 98 96 94 92 90 4000 3500 3000 2500 2000 1500 1000 500 Sales m 88 98/99 99/00 00/01 '01/02 '02/03 0

without impacting operating margins B&Q operating margin vs. price index Price index 102 100 98 96 94 92 90 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% Operating margin % 88 98/99 99/00 00/01 '01/02 '02/03 0.0%

Driving business growth-new Castorama Management Philippe Tible,, Castorama Chief Executive since February 2003 Entire career in the French retail industry 10 years at Leroy Merlin Patrick Chorein,, new Commercial Director since last week Commercial director at Conforama (PPR Group) for 10 years

Driving business growth revitalising Castorama France Short term initiatives Standardised in-store display End caps, cash ends, clip strips and power aisles Pricing of top 500+ products Improved in-store availability Best sellers in all stores Own label offer In-store navigation

Driving business growth revitalising Castorama France Store revitalisation Project Wheel type rejuvenation Development of test store (Lille( Lille- Hellemmes) Range, merchandising, in-store layout and navigation, prices Develop during 2003/4 Longer term store blue-print

Longer term new store format 3 test stores to re-open in 2003 (La Hénin, Toulon-La Seyne, Chalon s/saône) Range reviews Changes in surface allocation Change price perceptions Standardisation of merchandising (Planogram)

Driving business growth- Logistics improvements at Castorama Type Before 2000 2001-2002 2005 Direct 82% 62% 35% Distribution centres 18% 18% 30% Cross- Dockings 20% 35%

Driving business growth Driving business growth Leveraging existing space Product innovation Services Pricing Aggressive roll-out out of new space

Driving growth - new selling space Home Improvement 000m 2 Space growth - CAGR 15% 2,477 3,021 3,383 3,765 1999 2000 2001 2002

Kingfisher store formats the big box warehouse B&Q UK Warehouse Castorama France Castorama Poland Castorama Italy B&Q China Stores 96 105 17 15 9 Another snap 10,000 sqm internal 5,000 sqm garden centre 40-50,000 SKU s

Kingfisher store formats the medium box warehouse B&Q UK mini- Warehouse B&Q UK Supercentre B&Q Taiwan Stores 8 225 14 Another snap 4,000-5,000 sqm 25,000 SKU s

Store formats Castorama France 6,300 sqm internal 2,700 sqm garden centre 45,000 SKU s Catchment area = 144,000 households

Store formats Brico DépôtD 3,700 sqm internal 1,300 sqm garden centre 15,000 SKU s Catchment area = 150,000 households

Our markets are relatively underdeveloped Specialist selling space per capita (square feet) US 3.0 * Germany 1.6 France 1.1 UK 1.0 Italy 0.9 Spain 0.6 Source : Verdict *Estimate

Kingfisher improving operating efficiency

Improving operating efficiency Driving superior business growth Leveraging existing space Aggressive roll-out out of new space Improving operating efficiency Supply chain Asset leverage Store operations superior returns

Improving operating efficiency - exploiting scale Cost Price Reduction programme Established far Eastern buying operation Product range Common product sourcing Own label development Sharing skills and innovation Product development format development In store practices

CPR is mutually beneficial, driving volume through lowering price Higher volumes for key suppliers Higher volumes enable lower costs Lower selling prices drive volume Lower costs enable lower selling prices

Driving volume through lowering price Product X (B&Q) Cost Price / Unit 10.77 7.02 Quantity 000 14.8 7.02 2000 2002 Retail Price 14.98 9.98 2000 2002 Net Margin k 316.5 45.2 2000 2002 2000 2002

.. and generating sustainable savings Cumulative net CPR m 200+ 100+ 65 15 2000 2001 2002 2003

The opportunity for CPR in France is significant SKU s in store SKU s referenced Suppliers B&Q 40,000 80,000 700 Castorama 50,000 >150,000 1,200

Improving operating efficiency - exploiting the benefits of scale Cost Price Reduction programme Established far Eastern buying operation Product range Common product sourcing Own label development Sharing skills and innovation Product development format development In store practices

Buying offices located near key suppliers Shanghai Hong Kong Jaipur Shenzhen

Rapid increase in volumes sourced directly from the Far East Kingfisher DIY shipments m 256 150 110 4 11 16 27 38 95/96 96/97 97/98 98/99 99/00 00/01 '01/02 '02/03

.. but still further potential B&Q Castorama 2002/3 10% 4% Group Potential 2006 15% Estimated savings from direct sourcing 30%

Common product sourcing Current B&Q UK 700 suppliers Castorama France 1,200 suppliers B&Q China 1,800 suppliers Future Core 1000 key suppliers accounting for 80% of purchases 50 100 global 100 150 supply > one company

Own label development 2003 Xmas decorations UK, Ireland, France, Italy, Germany, Turkey, China, Taiwan

Driving value Kingfisher World s most international home improvement business: leading brands in attractive markets multiple formats and channels great people Leveraging scale and diversity Substantial organic growth potential Focused on value and returns

Gerry Murphy Chief Executive Officer