A conversation with the executive team
Kingfisher’s executive team discusses the progress so far with the ‘Delivering Value’ strategy as well as the plans for the future.
Select a member of the executive team to see their interview
Ian Cheshire – Group Chief Executive
Appointed Group Chief Executive in January 2008 after 10 years at Kingfisher. Previously ran B&Q UK and Kingfisher’s international operations.
You’re on record as saying when you became CEO last year that you aim to deliver a step-change in shareholder value. How’s it going?
My first year as CEO has certainly been very busy and I’m pleased to say we’re well on track. I believe Kingfisher is a very strong business with international market-leading positions and a strong balance sheet. But we can’t just sit back and assume these strengths are enough to deliver more shareholder value. I said at the start of the year that we need to focus on three priorities – Management, Capital and Returns – if we are going to make more from what we already have.
I have replaced the previous decentralised management structure and created a new Retail Board of key executives with collective responsibility and incentives for Group delivery. To ensure we have the right mix of retail experience, industry knowledge and fresh thinking I recruited several new senior managers, including Euan Sutherland to head the UK, Peter Hogsted to head International and Kevin O’Byrne our new Group Finance Director.
Capital investment has been rationed, a capex diet if you will, and much tighter approval controls introduced. The whole organisation is now much more focused on cash than previously and after several years of rising net debt we have been able to stabilise it and, following the sale of our low-returning Italian business, significantly reduce it.
Much greater emphasis is now placed on generating higher cash returns from our businesses and the new Retail Board has agreed seven major steps to achieve this.
When you started this programme were you expecting a global credit crunch?
The early signs were there in late 2007 but it was more extreme than anyone expected. The important thing is to focus on providing good products and services at excellent value to your customers whilst squeezing as much cost as possible out of the business. That way you will maximise your short-term performance and emerge a much leaner and stronger business when markets improve.
Our overall performance in 2008/09 was solid. We grew share in our major markets and optimised our profits and cash through vigorous margin and cost control. We grew sales and underlying profits and significantly reduced our net debt at a time when some of our competitors were going bust. Admittedly, the performance in China, where the housing market is going through a severe and prolonged downturn, was worse than originally anticipated but we now have a clear plan of action underway to return this business to profitability.
How will you be prioritising your time in the year ahead?
With the new team in place and capital disciplines now well-entrenched I will be very busy making sure we deliver the 2009/10 milestones of our seven-point plan which are set out in this annual report whilst closely overseeing our trading through these tough times. I’m very keen to see a significant improvement in the underlying performance of B&Q China and so I will be visiting regularly to check on progress.