Q1 trading update to 30 April
2024
Trading in line with
expectations; full year guidance unchanged
21 May 2024:
Kingfisher plc ('Company', 'Group' or
'Kingfisher') is today providing its Q1 24/25 sales.
Key points
· Q1 sales of
£3.3bn; total sales +0.3% (constant currency) and -0.3%
(reported)
· LFL -0.9%
including a +1.9% calendar impact (of which +1.1% relates to the
leap year)(1)
· Q1 by
region:
o
UK &
Ireland: share gains at B&Q
supported by strong e-commerce and TradePoint sales; share gains
and positive LFL at Screwfix
o
France: sales in line with our
expectation. Castorama and Brico Dépôt performing broadly in line with
weaker market
o
Poland: improved sales trend
supported by stronger market
· Q1 by
category:
o
Core (66% of
sales): resilient performance (LFL
-0.3%)(2), with sequential improvement in YoY volume
trends vs Q4 23/24
o
Big-ticket (15%
of sales): weak sales as expected
(LFL -6.3%)(3), reflecting trends across the broader
market
o
Seasonal (19% of
sales): resilient sales (LFL
+1.9%)(4) despite unfavourable weather in
April
· Volume and retail
price inflation flat YoY; negative
mix impact on average selling price from
lower 'big-ticket' sales
· Q2 trading to
date(5) in line with underlying Q1 trends, with LFL
-2.5%
· Making progress against our
key strategic priorities in Q1:
o
Opened three Screwfix stores in France and seven
in the UK & Ireland
o
Total e-commerce sales +12.7%; now 18.8% of Group
sales (Q1 23/24: 16.9%)
o
Continued strong growth of e-commerce marketplace
at B&Q (GMV(6) +99.4% YoY), and successful launch at
Castorama France in March
o
TradePoint LFL sales +8.5%. Trade loyalty
programmes now live in all banners
· Full year guidance
unchanged: expect FY 24/25 adjusted
PBT of c.£490m to £550m(7) and free cash flow of c.£350m
to £410m
Unaudited Q1 24/25 sales
(three months ended 30 April 2024)
|
Sales
2024/25
|
% Total
Change
|
% Total
Change
|
% LFL
Change(8)
|
|
£m
|
Reported
|
Constant
currency
|
Constant
currency
|
UK &
Ireland
|
1,631
|
+2.6%
|
+2.7%
|
+1.2%
|
-
B&Q
|
983
|
+0.3%
|
+0.4%
|
+0.4%
|
-
Screwfix
|
648
|
+6.3%
|
+6.4%
|
+2.4%
|
France
|
1,026
|
(8.1)%
|
(5.1)%
|
(5.3)%
|
-
Castorama
|
529
|
(8.4)%
|
(5.5)%
|
(5.5)%
|
- Brico
Dépôt
|
497
|
(7.7)%
|
(4.7)%
|
(5.2)%
|
Other
International
|
605
|
+7.0%
|
+3.9%
|
+2.0%
|
-
Poland
|
445
|
+8.6%
|
+3.1%
|
+0.4%
|
-
Iberia(9)
|
93
|
(1.3)%
|
+1.9%
|
+1.9%
|
-
Romania
|
63
|
+7.7%
|
+12.3%
|
+14.7%
|
-
Other(10)
|
4
|
n/a
|
n/a
|
n/a
|
Total Group
|
3,262
|
(0.3)%
|
+0.3%
|
(0.9)%
|
Thierry Garnier, Chief
Executive Officer, said:
"Trading in
the first quarter has been in line with our expectations. We have
seen continued resilience in our core categories, although
'big-ticket' sales have been weak reflecting the broader market as
expected. In the UK, we have gained considerable share across our
banners. Our trade proposition continues to resonate with
customers, driving positive LFL sales at Screwfix and strong LFL
sales growth of 8.5% at TradePoint. In France, while slightly
improved on Q4, trading reflects the weak overall retail market.
And in Poland, we are seeing encouraging sales trends as the
consumer environment improves.
"We
continue to drive our strategic priorities at pace and remain
focused on delivering market share growth. Our e-commerce sales
grew by 12.7% and we successfully expanded our marketplace model to
France. We delivered further expansion of Screwfix in France, and
advanced our data, AI and retail media initiatives. Leveraging our
learnings from TradePoint in attracting trade customers in the UK,
we are excited to have widened trade loyalty programmes across all
our banners.
"We remain
focused on driving productivity gains and maintaining tight control
of our costs and inventories. In France we are pushing ahead with
our plan to improve performance, having successfully completed our
structural simplification and transitioned to new leadership at
Castorama.
"Looking
forward, we confirm the guidance outlined in March for the full
year, including our expectations for the overall market in
2024."
Current trading and
outlook
The second
quarter has started in line with the underlying sales trends of Q1,
with Group LFL sales -2.5%
for the three weeks to 18 May 2024(5).
On the
overall market outlook for 2024, we remain cautious due to the lag
between housing demand and home improvement demand. As such, the
scenarios we set out in our FY 23/24 results for the growth of our
total addressable home improvement markets in the UK & Ireland,
France and Poland in 2024, versus 2023, are unchanged.
|
Our expectation of total
addressable
home improvement market % change in 2024 (YoY)
|
|
Low case
|
High case
|
UK & Ireland
|
Low-single digit decline
|
Flat
|
France
|
Mid-single digit decline
|
Low-single digit decline
|
Poland
|
Flat
|
Low-single digit growth
|
Against
this backdrop, we are focused on growing ahead of our markets by
leveraging our key strategic priorities. We are confident in the
delivery of c.£120m of additional cost reductions and productivity
gains this year, to partially offset higher pay rates and
technology investments. As a result, our FY 24/25 guidance remains
unchanged, expecting adjusted PBT of c.£490m to £550m, and free
cash flow of c.£350m to £410m.
Kingfisher store tours in
Poland and France - July 2024
Kingfisher
is hosting tours of its international stores in Poland (Castorama)
and France (Castorama, Brico Dépôt and Screwfix) on 9-11 July 2024.
The event is open to all institutional investors and sell-side
research analysts. Please contact Investor
Relations for further
details.
Q1 summary
As stated
in our FY 23/24 results in March, Group LFL sales for the first
seven weeks of Q1 (to 23 March 2024) were -2.3%.
Since then,
underlying sales trends remained broadly stable through the
remainder of the quarter, with resilience in core categories offset
by weakness in 'big-ticket' sales as expected. Seasonal category
sales were positive YoY despite the impact of unfavourable weather
conditions, especially in April in the UK and France.
Overall, Q1
24/25 LFL sales were -0.9%. This includes a +1.9% calendar
impact(1), of which +1.1% relates to the impact of the
additional day in the leap year. This impact was broadly consistent
across our main markets. In relation to the pure calendar component
(+0.8%), we expect this to unwind over the balance of the
year.
Q1 trading
highlights
All
commentary below is in constant currency.
UK &
IRELAND
Total sales
+2.7% (LFL +1.2%), with sales at both
banners growing ahead of their respective markets (as measured by
the British Retail
Consortium, Barclays and GfK); particularly strong market share
gains achieved at TradePoint and Screwfix.
· B&Q
sales +0.4%. LFL +0.4%, supported by a strong performance in e-commerce and the trade
segment. The business saw good LFL sales growth and improved volume
trends in its core categories, particularly tools & hardware
and building & joinery, partially offsetting a weak sales
performance in 'big-ticket' categories. Seasonal category sales
were positive, although impacted by wet weather in April. B&Q's
total e-commerce sales increased by 22.8% YoY, with an overall
e-commerce sales penetration of 13.6% (Q1 23/24: 11.4%). This was
driven by the further scaling of its marketplace, which reached a
participation(11) of 41% in April. Marketplace
GMV(6) increased by 99.4% YoY.
· TradePoint, B&Q's
trade-focused banner, delivered a strong performance with LFL sales
of +8.5%, reaching a penetration of 23% of B&Q's total sales
(Q1 23/24: 21%). TradePoint continues to strengthen its product and
services proposition for trade customers. Its loyalty programme
continues to attract trade customers, with new sign-ups growing by
c.40% YoY and total membership now at over 3.5 million.
· Screwfix
sales +6.4%. LFL +2.4%, with robust demand from
trade customers and strong market share gains. Positive YoY sales
growth was seen in most categories, with notable performances in
its tools & hardware and building & joinery categories.
Screwfix opened seven new stores in the UK & Ireland, and
remains on track to open up to 40 stores in these countries in this
financial year. Screwfix Spares contributed c.2% to total Screwfix
sales growth in Q1(12). The results of Screwfix France
are recorded within the 'Other
International' division - see below for further
information.
FRANCE
Total sales
-5.1% (LFL -5.3%),
with trading, as expected, impacted by ongoing weakness in the
broader market. Both banners performed broadly in line with the
French home improvement market, based on external panel data and
Kingfisher analysis.
With the
structural simplification of the French organisation now complete,
the businesses are focused on improving their respective
performance in line with the plan outlined in our FY 23/24 results
in March. Castorama's store restructuring and modernisation plan
for its lowest performing stores, also outlined in our FY 23/24
results, has started well. The business has completed two
rightsizings in the year to
date, with one further rightsizing due to complete in H2. All three
rightsized stores will, at the same time, benefit from a
pervasive store refit along
with one additional low-performing store. The refits will be
similar to the concept successfully applied to the Castorama Englos
store last year. The transfer to
Brico Dépôt of one low-performing Castorama store is in
motion, and we are making good progress towards our goal to start
tests for two franchise
stores within the next 12 months.
· Castorama
sales -5.5%. LFL -5.5%, with market weakness reflected broadly across all categories,
in particular 'big-ticket' category sales. Early results of
Castorama's e-commerce marketplace, launched in March, have been
encouraging with the business focused on scaling up the
proposition. Castorama also continues to trial its trade loyalty
programme, with further roll-out to additional stores planned in
Q2.
· Brico Dépôt
sales -4.7%. LFL
-5.2%, with its category performance broadly in line with Castorama
and the wider market. Brico Dépôt opened
one compact store in May, with three of these innovative 1,000 sqm
format stores now open. The business continues to focus on
capturing more of the trade opportunity, with positive results and
customer engagement seen following the nationwide roll-out of its
trade loyalty programme in February.
OTHER
INTERNATIONAL
· Poland
sales +3.1%. LFL +0.4%, supported by an improved
consumer environment, and strong progress with initiatives to boost
trade sales. Compared to Q4 23/24, Castorama saw improved LFL sales
trends across its core and 'big-ticket' categories, with building
& joinery, kitchen and tools & hardware all performing
well. Sales of seasonal categories were positive, supported by
successful range reviews. Castorama performed broadly in line with
the market in the quarter (as measured by GfK). The business opened one big-box
and one 'Castorama Smart' store in Q1, and is on track with its
target of five store openings in this financial year. Castorama
continues to see strong results from its trade customer
initiatives, with c.100k sign-ups to the 'CastoPro' loyalty programme following
its roll-out to all stores in February.
· Iberia
sales +1.9%. LFL +1.9%, with good performance seen
in the building & joinery, bathroom & storage and kitchen
categories. Sales growth in seasonal categories were impacted by
positive prior year comparatives.
· Romania
sales +12.3%. LFL +14.7%, reflecting a strong
performance in its outdoor, building & joinery and surfaces
& décors categories.
· Other
consists of the consolidated sales of
Screwfix
International, NeedHelp, and from
franchise and
wholesale agreements. While these
businesses are in their early investment phase, we continue to be
encouraged by the results we have seen to date. Screwfix
opened three stores in France in the quarter, with
a total of 23 stores in operation as of 30 April 2024. The business
continues to grow its customer base and retention rates, as well as
increasing brand awareness both locally and nationally.
Footnotes
(1) Leap year impact reflects the
impact of an extra day of trading on Thursday 29 February 2024. The
impact of the leap year on Q1 24/25 LFL sales was +1.1%.
Calendar
impact represents the impact of the
annual calendar shift on LFL sales growth due to different days of
the week falling into or out of the current period compared to the
prior period. For example, historically, higher trading is seen on
a Friday and Saturday as compared to a Sunday. This includes the
impact of national public holidays falling on different days of the
week compared to the prior period. The calendar impact on Q1 24/25
LFL sales was +0.8%, which we expect to unwind over the balance of
the year.
(2) Core category sales
represented 66% of Group sales in Q1. It includes the sales from
non-seasonal products across our categories, other than 'big
ticket' sales.
(3) 'Big-ticket' category sales
represented 15% of Group sales in Q1. It includes the sales from
kitchen, bathroom & storage products.
(4) Seasonal category sales
represented 19% of Group sales in Q1. It includes the sales from
certain products within our outdoor, electricals, plumbing, heating
& cooling (EPHC) and surfaces & décor
categories.
(5) 'Q2 24/25 LFL sales
(to 18 May 2024)'
represents the period from 28 April to 18
May 2024 compared against the equivalent
period in the prior year (i.e.,
30 April to 20 May 2023). The figures are
provisional and exclude certain non-cash accounting adjustments
relating to revenue recognition.
(6) Marketplace gross sales is the
transaction value (excluding VAT) from the sale of products
supplied by third-party e-commerce marketplace vendors. Returned
and cancelled orders are excluded. Marketplace gross merchandise
value (GMV) is the total transaction
value (including VAT, and including returned and cancelled orders)
from the sale of products supplied by third-party e-commerce
marketplace vendors. Marketplace GMV is the basis on which our
commissions from third-party vendors are determined.
(7) Guidance assumes current
exchange rates.
(8) LFL (like-for-like) sales
growth represents the constant currency, year-on-year sales growth
for stores that have been open for more than one year.
(9) Brico Dépôt Spain and
Portugal.
(10) 'Other' consists of the
consolidated sales of Screwfix International, NeedHelp, and from
franchise and wholesale agreements.
(11) Marketplace participation
defined as B&Q's marketplace gross sales divided by B&Q's
total e-commerce sales. Please refer to the glossary in
Kingfisher's 2023/24 Full Year Results announcement for definitions
of e-commerce sales and penetration metrics.
(12) On 20 March 2023, Screwfix
Spares Limited acquired the majority of the business and assets of
Connect Distribution Services (in administration) and related
companies.
Contacts
Q1 trading update and data
tables
This
announcement and data tables for Q1 24/25 sales can be downloaded
from the Investors section of our website at
www.kingfisher.com/investors.
Half year 24/25
results
Our next
scheduled results announcement will be our results for the six
months ending 31 July 2024, on 17 September 2024.
American Depository
Receipts
Kingfisher
American Depository Receipts are traded in the US on the OTCQX
platform: (OTCQX: KGFHY) http://www.otcmarkets.com/stock/KGFHY/quote.
About Kingfisher
plc
Kingfisher
plc is an international home improvement company with over
2,000 stores, supported by
a team of over 78,000 colleagues. We operate in eight countries across Europe under
retail banners including B&Q, Castorama, Brico Dépôt, Screwfix,
TradePoint and Koçtaş. We offer home improvement products and
services to consumers and trade professionals who shop in our
stores and via our e-commerce channels.
Forward-looking
statements
You are not to construe the content
of this announcement as investment, legal or tax advice and you
should make your own evaluation of the Company and the market. If
you are in any doubt about the contents of this announcement 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 announcement has been prepared
in relation to sales for the quarter ended 30 April 2024.
The financial information referenced in this
announcement is not audited and does not contain sufficient detail
to allow a full understanding of the results of the Group. Nothing
in this announcement 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 Group or an
invitation or inducement to engage in investment activity under
section 21 of the Financial Services and Markets Act 2000 (as
amended) (or, otherwise under any other law, regulation or exchange
rules in any other applicable jurisdiction).
Certain
information contained in this announcement 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", forecast, or
"believe" (or the negatives thereof)
or other variations thereon or comparable
terminology. These forward-looking statements are based on currently available information and our current
assumptions, expectations and projections about future events.
These forward-looking statements include
all matters that are not historical facts and include statements
which look forward in time or statements regarding the Company's
intentions, beliefs or current expectations and those of our
Officers, Directors and employees concerning, amongst other things,
the Company's results of operations, financial condition, changes
in global or regional trade conditions (including a downturn in the
retail or financial services industries), competitive influences,
changes in tax rates, exchange rates or
interest rates, changes to customer preferences,
the state of the housing and home improvement markets, share
repurchases and dividends, capital expenditure and capital
allocation, liquidity, prospects, growth and strategies, litigation
or other proceedings to which we are subject, acts of war or
terrorism worldwide, work stoppages, slowdowns or strikes, public
health crises, outbreaks of contagious disease, environmental
disruption or political volatility. By their nature,
forward-looking statements are not
guarantees of future performance and are subject to future events,
risks and uncertainties - many of which are beyond our control,
dependent on actions of third parties, or currently unknown to us -
as well as potentially inaccurate assumptions that could cause actual events or results or actual
performance of the Group to differ materially from those reflected
or contemplated in such forward-looking statements. For further
information regarding risks to Kingfisher's business, please
consult the risk management section of the Company's Annual Report
(as published). No representation, warranty or other assurance is
made as to the achievement or reasonableness of, and no reliance
should be placed on, such forward-looking statements.
The forward-looking statements
contained in this announcement speak only as of the date of this
announcement and the Company does not undertake any obligation to
update or revise any forward-looking statement to reflect any new
information, change in circumstances, or change in the Company's
expectations to reflect events or circumstances after the date of
this announcement or to reflect the occurrence of unanticipated
events.