Deutsche Tour Presentation UK Trade opportunity 27 January 2012
2008 KINGFISHER DELIVERING VALUE AGENDA 1. Driving up B&Q s profitability 2. Exploiting our UK Trade opportunity 3. Expanding our total French business 4. Rolling out in Eastern Europe 5. Turning around B&Q China 6. Growing Group Sourcing 7. Reducing working capital
Exploiting our UK Trade opportunity: Over 20bn accessible market opportunity Kingfisher relatively low market share Very fragmented with lots of Independents Market at change point Opportunity for significant growth
Cross UK trade strategy: Strategy to drive UK trade across UK No business boundaries, using best of B&Q & Screwfix Aligned trade strategy to become preferred supplier to small trades in the UK Multiple propositions to target different trade customer segments
Our Target Customers: Smaller Tradesman White Van Man Shops Primarily Over the Counter Driven Mainly by Convenience Close to Place of Work
Target Small Trade Segments c 23bn : Segment Multi-trade domestic Small Gen. Contractor Small Plumbing & Heating Contractors Domestic/light commercial Electricians i Market size (~ bn) 3.5 2.7 27 7.0 Small facilities/maintainers Small Joiners Light commercial / domestic Landscapers Small Decorators (Domestic/Light commercial) Small Bathroom Fitters Domestic Kitchen Fitters Specialist Plasterers 2.5 2.5 Estimated Market Sizes 1.9 bn 1.4 0.9 0.8 0.3
What will be delivered UK Trade Sales 747m 768m 828m 1.0bn + 2008 2009 2010 2011
Exploiting Screwfix business model characteristics: Deep understanding customers through data Unique & flexible store model Leading edge multichannel capabilities & systems Leading edge logistics infrastructure & systems Consistency of execution
Deep understanding customers through data: Trade Universe You are what you buy
Unique and flexible Store Model: Stock room Front of store size size Add-ons a 10k ft 2 18k skus Large 1 400 sqft, 0 skus 2 800 sqft, 700 impulse skus Small counter Standard counter Multiple Counters b 5k ft 2 11k skus Standard 3 2k ft 2 3k skus Small ranged "best sellers" Showroom c 3k ft2 7k skus d c2k ft2 c4k skus Medium Small 4 5k ft 2 5k skus 5 10k ft 2 75kskus 7.5k Medium ranged Large ranged Other?
Leading edge multichannel capabilities & systems Single view of the customer Tailored UI s Order via Telephone (Voice) Mobile (iphone, App or SMS) On-line Store (Stocked) Store (Non- Stocked) EDI e.g., B2B Order & delivery in any channel Fulfillment options Fusion Platform Flexible & Modular Deliver to home Deliver to store Click or call and pay collect in store Pick up from store display Pick up from store stock (Warehouse) External supplier delivery to home Next day Next day Three minutes Now Three minutes 7 14 days
Implications for group multichannel development Screwfix capability & experience being used on delivering strategic group multichannel platform (Project Darwin) Darwin, will build a market leading e-commerce, mobile and assisted selling capability in store, using web based technology Initially a B&Q project, but being built in such a way as to be reusable by other op co s, and to be flexible to change to the evolving web based technologies
Leading edge logistics infrastructure & systems White Label Range Control Flexible routes to Customer
126 Full TradePoint counters now trading Now trading across entire B&Q estate with Now trading across entire B&Q estate with additional 222 Order & Collect Stores
TRADE BRANDS TRADE PRICES TRADE ONLY Like a Builders Merchant Supply chain of Screwfix Convenience of B&Q Big Easy to get to Open 7 days / week 7am to 9pm
Activating c10,000 000 Customers per week Now 710,000 registered customers 45% Customers have bought in last 4 weeks 83% of customers would recommend TradePoint to a friend
Smaller TradePoint Trials
Trade Kitchen & Bathroom Trial
TradePoint Web Site
Still growing strongly 48.7% LFL Payback in under 2 years Trade impact on overall B&Q LFL estimated at c1.5%
Typical trade counter
Trade Counter Growth now 69% of sales 250 200 150 100 50 0 2005 2006 2007 2008 2009 2010 2011 Y/E 215 trade counters 39 opened in 2 nd Half 2011
55,000 customers have shopped Still recruiting c470 plumbers a week
41,000 customers have shopped Still recruiting c400 electricians a week
Combined physical Plumbfix and Electricfix Specialist service
brings together all UK trade Formats
New Transactional Mobile Site Over 15% of web traffic now from mobile devices Mobile orders up 19 times in Mobile orders up 19 times in last 12 months
Order On Line Collect in 15 3 Minutes
New Web Site 40% growth in traffic since launch 25% of Sales recommendation driven
Group Trade Brands
Smaller format opportunity 1 London 2 2 Urban 3 3 Suburban 4 Market town / rural 4 1
Less Space Less Investment Less Running Cost
Potential Size of Prize: Over 400 sites
End Q3 2011 : Total Sales Growth +7.0% With strong cost control and improving gross margins Giving strong profit growth +28.5% With high returns in line with Brico and Poland
Sound Foundation for future growth UK Trade Sales 768m 747m 828m 1.0bn + 2008 2009 2010 2011