Business review
Delivering Value
Key
- UK
- France
- Other International
- Group programmes
We're on a journey, with clear milestones
Key steps and aims
1. 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
2. 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
3. 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
4. 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*
5. 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
6. 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
7. 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