Financial Data and Key Metrics Changes - Total sales in constant currency decreased by 0.7% to £13.1 billion, reflecting resilient performance against strong prior year comparatives [11] - Adjusted profit before tax (PBT) decreased by 20.2% to £758 million, which is still 39% higher than 2019 levels [12][9] - Free cash flow was negative £40 million, primarily due to working capital impacts, but total liquidity remains strong at over £800 million [13][27] - Gross profit margin decreased by 70 basis points year-on-year, with a notable decline in H1 but flat in H2 at 36.8% [12][13] Performance by Business Lines - In the UK and Ireland, like-for-like sales were down 6.9% for the year, but up 15.3% on a 3-year basis, with total sales decreasing by 4.7% to £6.2 billion [14][15] - France saw like-for-like sales down 1.4% year-on-year but up 13.2% over three years, with retail profit decreasing by 12% to £195 million [17] - Poland experienced strong growth with like-for-like sales up 13.8%, contributing to a total sales increase of 16.7% [19] - Iberia's like-for-like sales increased by 1.9%, while Romania's sales increased by 1.7% to £285 million [20][21] Market Data and Key Metrics Changes - E-commerce sales grew by 146% over three years, with penetration now at 16.3%, double the level of 2019 [8] - The company reported a strong performance in the kitchens category in Poland, achieving over 40% like-for-like growth [19] - TradePoint's like-for-like sales increased by 31.5%, reaching a sales penetration of 22% of B&Q [66] Company Strategy and Development Direction - The company is focused on multiple growth opportunities, including e-commerce, own exclusive brands, and strategic cost management [5][38] - A new medium-term financial priority was announced, emphasizing growth and cash generation [6][36] - The company aims to grow by expanding its store formats and leveraging its diverse geographic presence [49][79] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating economic challenges, highlighting strong underlying sales trends and market share gains [5][43] - The company anticipates a working capital unwind as seasonal and buffer stock sells through [34] - Future expectations include generating over £500 million of free cash flow, supported by unwinding prior year working capital outflows [37][87] Other Important Information - The company returned over £580 million to shareholders during the year, including dividends and buybacks [9] - A new share buyback program is planned following the completion of the existing program, subject to market conditions [10][84] - The company exceeded its near-term carbon reduction targets, achieving a 52.7% reduction in Scope 1 and 2 emissions [41] Q&A Session Summary Question: What are the expectations for sales growth in the upcoming year? - Management expects total sales growth of approximately 1.5% to 2.5% per annum driven by new store openings and market share gains [36][86] Question: How is the company addressing cost inflation? - The company is implementing strategic cost reduction programs to offset inflationary pressures while maintaining operational efficiency [33][78] Question: What are the plans for e-commerce growth? - The company aims to increase e-commerce sales penetration to 25% and expand its marketplace offerings significantly [55][58]
Kingfisher(KGFHY) - 2022 Q4 - Earnings Call Transcript