Second Quarter to
31 July 2016

18 August 2016

 

Kingfisher reports sales of £3.0 billion, +3.0% LFL*

Financial overview and highlights:

 

Sales
2016/17
£m
% Total
Change
Reported
% Total
Change
Constant currency
% LFL Change
Constant currency
UK & Ireland (1) 1,357 +5.1% +5.0% +7.2%
- B&Q UK & Ireland 1,046 +0.5% +0.3% +5.6%
- Screwfix 311 +24.5% +24.5% +13.3%
France 1,130 +10.4% (1.4)% (3.2)%
- Castorama 629 +9.4% (2.2)% (3.3)%
- Brico Dépôt 501 +11.7% (0.3)% (3.1)%
Other International 539 +12.8% +9.0% +7.0%
- Poland 320 +15.9% +10.5% +7.3%
- Russia 94 (5.4)% +3.4% +5.8%
- Spain 91 +19.1% +6.6% +4.3%
- New Country Development* 34 n/a n/a n/a
Total Group (2) 3,026 +8.4% +3.2% +3.0%

(1) FY 2016/17 total and LFL sales cover 3 months to 31 July (FY 2015/16 cover 13 weeks to 1 August for total sales; 3 months to 31 July for LFL)
(2) Prior year excludes China due to disposal of controlling 70% stake in April 2015
(3) Of the previously announced c.£600m capital return through to end of FY 2018/19 (over and above the annual ordinary dividend)
*Throughout this release ‘*’ indicates first instance of a term defined in the 2015/16 Annual Report & Accounts (p146)

  • Solid Q2 performance with LFL sales up +3.0% driven by the UK & Poland
  • Completed disposal of remaining 30% economic interest in B&Q China following regulatory approval. Net cash proceeds of £63m received
  • £150m (44m shares) returned to date to shareholders since year end via share buyback (3)

Véronique Laury, Kingfisher Chief Executive Officer, said:

“We have delivered another solid sales performance in Q2 driven by the UK and Poland. In the UK, the EU referendum result has created uncertainty for the economic outlook, although there has been no clear evidence of an impact on demand so far on our businesses. In France, widespread industrial action and exceptionally wet weather created a more challenging environment, after a more encouraging Q1. We remain cautious on the short-term outlook.

“In the meantime, we continue to focus on our ONE Kingfisher plan, based on always putting customer needs first. We look forward to updating you on our early progress at our half year results next month.”

Q2 trading highlights by division (in constant currencies):

UK & IRELAND

  • Total sales +5.0%. LFL +7.2% benefiting from continued strong Screwfix performance
    • B&Q UK & Ireland sales +0.3% despite store closures. LFL +5.6% including c.2% benefit from sales transference associated with store closures. LFL of seasonal +9.6%. LFL of non-seasonal, including showroom +3.4%
    • Screwfix sales up +24.5%. LFL +13.3% driven by its leading omnichannel capability, new and extended ranges and new outlets

FRANCE

  • Total sales -1.4% (LFL -3.2%). Sales for the home improvement market (Banque de France data*) -1.1% in Q2; new housing starts +5.7%(4); planning permits +10.3%(4)
    • Castorama sales -2.2% (LFL -3.3%) reflecting less promotional activity. LFL of seasonal -4.3%. LFL of non-seasonal, including showroom -3.0%
    • Brico Dépôt sales -0.3% (LFL -3.1%)

(4) For the 3 months to end of June 2016

OTHER INTERNATIONAL

    • Sales in Poland +10.5% (LFL +7.3%) benefiting from a currently supportive market and new ranges. LFL of seasonal +10.7%. LFL of non-seasonal, including showroom +6.5%

H1 2016/17 technical guidance:

Gross margins by major geography compared to last year:

  • France expected to be up around 50 basis points reflecting less promotional activity
  • UK expected to be down around 100 basis points reflecting mix effects from strong growth in Screwfix, clearance related to the B&Q store closures and higher omnichannel sales
  • Poland expected to be up around 150 basis points reflecting strong trading

France operating costs:

  • H1 operating costs will increase by c.£10 million offset by a corresponding reduction in H2, hence not impacting the full year. Comparatives will not be restated.(5)

(5) Certain French levies moved last year from recognition on an accruals basis across the year, to recognition solely in Q4 (when the liability was triggered) under IFRIC 21. Since then, a change in legislation relating to one of these levies (TASCOM) has led to the reversal of this accounting treatment.

Enquiries:

Investor Relations
+44 (0) 20 7644 1029

Media Relations
+44 (0) 20 7644 1030

Brunswick
+44 (0) 20 7404 5959

This announcement can be downloaded from www.kingfisher.com or viewed on the Kingfisher IR iPad App. Data tables for Q2 and H1 sales 2016/17 are available for download in excel format at http://www.kingfisher.com/index.asp?pageid=59 We can be followed on Twitter @kingfisherplc with the Q2 results tag #KGFQ2. Kingfisher American Depository Receipts are traded in the US on the OTCQX platform:(OTCQX: KGFHY) http://www.otcmarkets.com/stock/KGFHY/quote