Business review

Delivering Value

Key

  • UK
  • France
  • Other International
  • Group programmes

We're on a journey, with clear milestones

Key steps and aims

Driving up B&Q UK's profit

2008/09 progress

  • 16 large store revamps completed in the year, 3 new stores, 16 medium store revamps
  • New lower-cost revamp model developed (less than £1 million per store compared with the previous £2.5 million)
  • More stringent store operating standards introduced, 91% stores now compliant
  • Over 4,500 staff received training in basic home improvement projects to improve customer service
  • Overall costs reduced 1% in the year despite underlying cost inflation of 3% and 1% new space

2009/10 milestones

  • 14 lower-cost large store revamps, 7 medium store revamps
  • National roll-out of self-service checkout tills
  • National roll-out of ‘Reserve and Collect’ on diy.com
  • Add 12,000 products for next day home delivery on diy.com utilising the Screwfix home fulfilment network
  • Reduce overall costs by 1% year on year
 

Exploiting our UK Trade opportunity

2008/09 progress

  • The loss-making UK trial format, Trade Depot, was closed
  • B&Q launched a Trade Discount Card for the professional tradesman. 177,000 cardholders now signed up for quarterly retrospective volume-based rebates
  • Opened 45 more Screwfix outlets
  • Launched ‘Plumbfix’, a new specialist mail order catalogue exclusively for qualified plumbers. Operated by Screwfix

2009/10 milestones

  • Launch ‘Electricfix’, a new specialist mail order catalogue exclusively for qualified electricians. Operated by Screwfix
  • Open 8 new Screwfix outlets
  • Relaunch B&Q in-store trade offer maximising synergies with Screwfix
 

Expanding our total French business

2008/09 progress

  • Opened 10 net new stores and revamped 8 stores
  • Developed coordinated 3 year store opening plan
  • Buying optimisation now in place covering €1.1 billion of product common to Castorama and Brico Dépôt
  • Brico Dépôt stock shrinkage rates significantly improved – €9 million benefit

2009/10 milestones

  • Open 5 new stores, revamp 4 Castorama stores
  • Deliver benefits of buying optimisation activity
  • Extend buying optimisation activities to goods not for resale
 

Rolling out in Eastern Europe

2008/09 progress

  • 17 new stores opened, 9 in Poland, 6 in Turkey and 2 in Russia
  • Total sales grew 26% (including 100% Turkey JV) to £1.4 billion*

2009/10 milestones

  • Open 14 new stores, 6 in Poland, 5 in Turkey and 3 in Russia
  • Total sales (including 100% Turkey JV) to reach £1.7 billion*
 

Turning around B&Q China

2008/09 progress

  • Local management team strengthened
  • An extensive and deep review of the operations completed
  • 3 loss-making stores closed and 1 store downsized
  • Store revamp trial of new format now open
  • £33 million of excess stock cleared

2009/10 milestones

  • Rationalise the remaining loss-making stores
  • Downsize and revamp a further 17 oversized stores
  • Revamp around half the remaining stores into the new model
  • Expand the ‘pick-up’ ranges of soft furnishings, household goods and accessories
  • Roll-out of new single room make-over and single product installation services
  • Replace in-store supplier representatives with B&Q trained staff
 

Growing Group sourcing

2008/09 progress

  • Group direct sourcing now 10% of product cost of sales
  • Appointment of Véronique Deroubaix as Group Commercial Director, formerly the Commercial Director for Castorama France

2009/10 milestones

  • Group direct sourcing target of 12% of product cost of sales
 

Reducing working capital

2008/09 progress

  • Surpassed target to reduce working capital by £100 million – delivered £180 million reduction
  • B&Q UK stock reduced by £115 million
  • Payment terms on direct sourced product extended by 16 days

2009/10 milestones

  • Reduce working capital by a further £50 million (at constant currency), despite expected effects from legislative changes shortening French payment terms
 

* In constant currency