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Published Date:08-07-2017
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KINGFISHER PLC FINAL RESULTS Year ended 31 January 2016Disclaimer You are not to construe the content of this presentation as investment, legal or tax advice and you should make you own evaluation of the Company and the market. If you are in any doubt about the contents of this presentation or the action you should take, you should consult a person authorised under the Financial Services and Markets Act 2000 (as amended) (or if you are a person outside the UK, otherwise duly qualified in your jurisdiction). This presentation has been prepared in connection with the announcement of the financial results for the full year ended 31 January 2016. The financial information referenced in this presentation is not audited and does not contain sufficient detail to allow a full understanding of the financial performance the Company. For more information, the entire text of the announcement for the full year ended 31 January 2016 can be found on the investor relations section of the Company’s website. Nothing in this presentation should be construed as either an offer or invitation to sell or any offering of securities or any invitation or inducement to any person to underwrite, subscribe for or otherwise acquire securities in any company within the Company or an invitation or inducement to engage in investment activity under section 21 of the Financial Services and Markets Act 2000 (as amended). This presentation is being solely made and directed at persons to whom this presentation may lawfully be communicated (“relevant persons”). Any person who is not a relevant person should not act or rely on this presentation or any of its contents. Certain information contained in this presentation may constitute “forward-looking statements” (including within the meaning of the safe harbour provisions of the United States Private Securities Litigation Reform Act of 1995), which can be identified by the use of terms such as “may”, “will”, “would”, “could”, “should”, “expect”, “anticipate”, “project”, “estimate”, “intend”, “continue,” “target”, “plan”, “goal”, “aim” or “believe” (or the negatives thereof) or other variations thereon or comparable terminology. These forward-looking statements include all matters that are not historical facts and include statements regarding the Company’s intentions, beliefs or current expectations concerning, among other things, the Company’s results of operations, financial condition, changes in tax rates, liquidity, prospects, growth and strategies. By their nature, forward-looking statements involve risks, assumptions and uncertainties that could cause actual events or results or actual performance of the Company to differ materially from those reflected or contemplated in such forward-looking statements. No representation or warranty is made as to the achievement or reasonableness of and no reliance should be placed on such forward-looking statements. The Company does not undertake any obligation to update or revise any forward-looking statement to reflect any change in circumstances or in the Company’s expectations. 2Agenda 1: Introduction 2: FY 2015/16 financials 2: First sharp decisions 3: 5 year transformation 4: Summary 5: Questions 3INTRODUCTION 4 4FY 2015/16: a productive and important year 1: 2: Announced ‘ONE’ Delivered good FY Kingfisher plan 2015/16 ‘business as usual’ performance 3: 4: Made solid Developed detailed progress on the first 5 year transformation sharp decisions plan 5: 6: Set ambitious 5 year Set operational financial targets milestones for FY 2016/17 5FY 2015/16 FINANCIALS 6 6Financial summary 2015/16 2014/15 % YOY (1) (2) Adjusted sales (£m) 10,331 10,605 +3.8% (1) (2) Retail profit (£m) 746 742 +7.4% (1) (3) Adjusted PBT (£m) 686 684 +0.3% (4) Effective tax rate 26% 27% +1% (1) (3) Adjusted basic EPS (p) 22.0 21.3 +3.3% Statutory post-tax profit (£m) 412 573 (28.1)% Free cash flow (£m) 483 400 n/a Reported net cash (£m) 546 329 n/a Lease adjusted ROCE 12.3% 11.9% +40bps 10.1 10.0 +1.0% Full year ordinary dividend (p) (1) Excluding China (2) In constant currencies (3) Before exceptional items, impact of FFVR, amortisation of acquisition intangibles, related tax items and tax on prior year items 7 (4) Before exceptional items and prior year tax adjustmentsExceptional items £m (charge) / gain 2015/16 2014/15 UK & Ireland and Europe restructuring (305) (17) Profit on disposal of B&Q China 143 - Impairment of Brico Dépôt Romania (18) - Property and other disposals 14 (3) Transaction costs - (15) Exceptional items before tax (166) (35) Exceptional tax items 67 106 Net exceptional items (99) 71 8Retail profit up 7.4% in constant currencies Other International UK & Ireland (established) £326m £126m +18.0% +3.0% France £311m (1.6)% New country development Loss £(17)m 9Impacted by £46m adverse FX on a reported basis Reported Growth +18.0% (10.9)% (5.8)% Constant Currency Growth +18.0% (1.6)% +6.4% 50 (5) 5 746 £m (46) 742 FX Impact - (33) (13) FY 2014/15 FX Impact UK France Other FY 2015/16 International 10 Includes new country developmentFrance: traded well in soft markets Total Sales +1.2% LFL (0.4)% Sales +0.1% Sales +2.5% GM % GM +10bps LFL (0.2)% LFL (0.5)% Retail profit (1.6)% Sales performance reflecting soft markets and 1% new space, driven by 4 new Brico Dépôt stores Controlled gross margin and continued focus on costs ‘Click, Pay and Collect’ in 161 stores (34 at FY 2014/15) 11 All in constant currenciesUK & Ireland: sales and profit growth; strong contribution from Screwfix Total Sales +5.6% LFL +4.4% Sales +1.1% Sales +26.3% GM (50)bps LFL +1.9% LFL +15.3% Retail profit +18.0% Indoor LFL growth; store closures Strong growth driven by leading 0.4% of uplift omnichannel capability Online sales +29% New and extended trade ranges Productivity initiatives delivered 62 new outlets benefits 12 All in constant currencies(1) Other International (established) retail profit +3.0% Russia Poland Total Spain Sales +3.3% Sales +12.9% Sales +4.0% LFL +3.6% LFL +7.2% Sales (3.2)% LFL +2.7% (1) Retail profit +6.0% Retail profit £6m LFL (5.0)% Retail profit +3.0% Benefiting from Profits impacted by Breakeven new ranges and adverse FX good seasonal movements on sales (+6%) cost base in an uncertain market All % movements in constant currencies 13 (1) Turkey joint venture sales are not consolidated; retail profit includes contribution from TurkeyNew country development focusing on Screwfix Total Germany Romania Portugal Sales £111m FY Sales £91m Sales £3m Sales £17m Loss £(17)m 2015/16 Loss £(9)m Loss £(7)m Loss £(1)m More challenging 9 outlets now environment trading Europe Expect total Romania & Portugal FY Inc. 9 more loss of 2016/17 Germany YOY losses expected to c.£(20)m outlets halve Expecting loss of c.£(15)m 14Uses of operating cash flow £m Lease Dividend adjusted cover 2.2x; 946 (130) (1) net debt £200m to EBITDAR (333) share 2.0x buyback 10 546 329 (432) 483 156 207 FY 2015/16 Tax & net Gross capex Free cash flow Returns to Disposal of Net cash flow Opening FX & Other Closing net Operating interest paid shareholders assets / other net cash cash cash flow (1) Excluding China 15Summary 1: 2: 3: Good ‘business as usual’ Adjusted PBT impacted Balance sheet remains strong performance by £46m adverse FX • Returned £432m to (1) • Retail profit +7.4% shareholders Outlook: • UK economic backdrop remains positive • Remain cautious on the outlook for France • Wider political and economic uncertainty 16 (1) In constant currenciesFIRST SHARP DECISIONS 17 17Solid progress on the first sharp decisions Develop unified unique outdoor and bathroom ranges Customer & Develop unified core essential offer Offer Develop plan to cut existing product tail Space rationalisation: Retail Close c.15% surplus space at B&Q; Close our few loss making stores in Europe Operations Pilot Big Box best practice across Europe Extend Screwfix trial in Germany Infrastructure Pilot unified IT platform, then accelerate & Processes Unify £1.2bn goods not for resale (GNFR) process People Finalise new leadership team and wider organisation structure 18‘Cut the tail’ plan is on track 1 2 393k SKUs sold during FY 2014/15 Non-ranged SKUs and stock value at year end SKUs £m stock value 165k 193,000 193,000 200,000 87k Down from £130m last year to £80m Non-ranged Ranged 2014/15 2015/16 Screwfix Medium Box Big Box (1) Top 5 Opcos only 19 (2) All OpcosSpace rationalisation update B&Q – on track to close c.15% space (65 stores) by end of FY 2016/17 Sales 40 30 transfer secured stores supports 1/3 lease exits to closed assumption date Europe - Closure process of a few loss making stores underway Announced 2 in France and 1 in Russia to date 20