Kingfisher(KGFHY) - 2021 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Kingfisher reported record revenue of £13.2 billion, up 10% on a like-for-like basis, and adjusted pretax profit of £949 million, up 21% year-on-year [4][75] - The group gross margin increased by 30 basis points, reflecting effective management of inflation and cost savings [5][76] - Retail profit margin increased by 80 basis points to 7.2%, with free cash flow strong at £385 million [77][84] Business Line Data and Key Metrics Changes - The UK & Ireland segment saw sales growth of 13.4%, with B&Q's like-for-like sales up 12.3% and Screwfix's up 10.9% [78] - France's sales grew by 9%, with a retail profit increase of 28% to £221 million [80] - Poland's like-for-like sales growth was lower at 0.3%, impacted by store closures, but space growth contributed 4.7% to total sales [81] Market Data and Key Metrics Changes - Kingfisher's sales CAGR from 2019 to 2021 was 10%, compared to 4% for the home improvement market [9] - The company is gaining market share, with strong performance in both DIY and DIFM segments, particularly in the UK and France [21][23] - TradePoint outperformed the rest of B&Q with like-for-like sales up 20% [78] Company Strategy and Development Direction - Kingfisher is focused on accelerating investment for growth, particularly in e-commerce and trade customer engagement [6][39] - The company aims to increase its own exclusive brand (OEB) sales to 60% by 2025, currently at 45% [31][50] - Strategic initiatives include expanding Screwfix in the UK and France, and enhancing the digital marketplace [39][45] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges posed by inflation and geopolitical issues but expressed confidence in the company's ability to manage these effectively [11][105] - The company is committed to delivering value for customers and maintaining strong execution in a competitive environment [14][108] - Future growth is expected to be supported by strong demand drivers and continued investment in strategic areas [7][106] Other Important Information - Kingfisher has no direct business exposure to the Ukraine crisis and has ceased sourcing from Russian and Belarusian suppliers [11][12] - The company has implemented significant cost reduction programs and achieved a 100 basis points reduction in the operating cost-to-sales ratio [95][96] - Kingfisher's commitment to sustainability includes a target to help at least two million people with housing needs by 2025 [32] Q&A Session Summary Question: What is the percentage of online sales in B&Q and Castorama? - Online sales for B&Q are comfortably above 10%, while French banners are above 5% [110][115] Question: What is the average lease length in B&Q and flexibility for rightsizing stores? - The company is satisfied with the current store sizes and has a long-term plan for rightsizing, with no immediate pressure [112] Question: What percentage of customers might be using the NeedHelp marketplace? - NeedHelp has been rolled out across B&Q and Poland, with growth in the number of jobs completed [114]