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Delivering value
2008 - 2012 Performance
“Kingfisher is now a significantly stronger, higher returning business. We now have a strong platform on which to build the next phase of our strategic journey.”
Ian Cheshire Group Chief Executive
2012 saw the completion of the Delivering Value programme, which was launched in 2008. The aim was to deliver a step-change in shareholder value through a seven-step plan to improve cash returns from every part of the Group. This plan has been successful and a summary of progress is set out below.
1. Driving up B&Q UK & Ireland's profit
Retail profit margin (%)
- B&Q retail profit up 83%, despite market decline
- On track to achieve a sustainable 7% margin
- Store estate updated
- Stringent store standards operating successfully
- Over 60% of colleagues achieved retail qualifications (NVQs or City & Guilds)
2. Exploiting our UK Trade opportunity
Total trade sales (£m)
- New trade offer (‘TradePoint’) added to all B&Q stores
- 800,000 trade professionals registered
- Opened 122 new Screwfix outlets (taking the total to 215)
- Launched 15 minute ‘click, collect and go’ Screwfix offer
3. Expanding our total French business
Sales (£bn) / Retail profit (£m)
- Retail profit margin up 210bps to 9.5%
- Added 12% net new space
- Castorama modernisation accelerated; 66% of stores now in modern format, up from 42% in 07/08.
4. Rolling out in Eastern Europe
Sales (£bn)‡
- Sales up 71% to £1.7 billion, retail profit up 62%
- Opened 59 net new stores, +85% net new space
- 25 in Poland, 21 in Turkey and 13 in Russia
- Opened new distribution facilities in Poland and Turkey to unlock future direct sourcing and distribution benefits
5. Turning around B&Q China
Losses (£m)
- Losses significantly reduced despite lower sales
- Cash neutral
- Store portfolio rationalised from 63 to 40 stores, 16 downsized
- New, smaller format in development
6. Growing Group sourcing
Direct shipments (US$m)
- Direct sourcing shipments up 77%
- Established 11 Group-wide common own brands replacing most of the 150+ local own brands, enabling investment in innovation and prices
- Invested in sourcing, innovation, and brand management design capabilities
7. Reducing working capital
Cumulative reductions in working capital (£m) Before the impacts of LME legislation in France.
- Reduced working capital by £427 million
- Average payment terms on direct sourced product extended by 56 days to 90 days
Non-Financial KPIs
Engaging our people
Gallup Q12 staff engagement survey
(out of 5)
- The Gallup Q12 is Kingfisher’s established tool for measuring employee engagement across the Group
- A GrandMean score above 4 out of 5 is 'best in class'
Making our operations more sustainable - climate change
CO2 emissions from store energy (kg CO2 equivalent per m2 total sales area)
- Reduced carbon emissions by 25% since 2007/08
- Awarded Business in the Community’s prestigious ‘Platinum Plus’ standard for leading on sustainability
Making our operations more sustainable - Eco-product sales
% contribution to total retail sales
- † Restated to include Ireland
- * Restated at constant currency
- ‡ Poland, Russia, Turkey (100%)
- ◊ Data for previous years restated in line with updates to CO2 emission factors issued by the UK government (DEF RA/DECC)
- ¥ Kingfisher updated its eco-product definition in 2011/12 to include products with eco-credentials as well as specific eco-product ranges. These account for 20% of Group sales in 2011/12. In order to enable a like-for-like comparison with past years, we have made an estimate of eco-product sales in 2011/12 using our previous definition of an eco-product. This estimate covers our three largest operating companies (B&Q UK, Castorama France and Brico Dépôt France), which account for 94% of our Group eco-product sales.