Kingfisher plc

Good day ladies and gentlemen and welcome to the Kingfisher plc half year 2026-2027 results. At this time all participants are on a listen only mode. Following the presentation we'll conduct a Q&A session with research analysts. If you wish to ask a question we ask that you please use the raise hand function at the bottom of your zoom screen. Instructions will also follow at the time of the Q&A. I'd like to remind all participants that this call is being recorded. I now hand over to Thierry Garnier, Chief Executive Officer to start the presentation.

Good morning and thank you for joining us for Kingfisher's half year results presentation. Bhavesh and I will take you through our performance for the first half. Our graded outlook for the year and the continued progress we are making across our strategic priorities will then answer your questions. So let me start with the highlights. First, our strategy is delivering with momentum building across our key growth drivers. Scofix continues to perform strongly. By trade, e-commerce and marketplace are becoming increasingly important sources of growth. Second, our focus on execution continues to pay off, reflected in gross margin expansion, discipline, cost control, and strong profit growth despite a mixed market environment. Third, our performance gives us the confidence to upgrade our fuller guidance, We are building a stronger, more resilient Kingfisher with significant opportunities ahead while remaining committed to attractive shoulder returns. So let me now hand over to Bhavesh for the financial review.

Thank you Thierry and good morning everyone. Overall, H1 was a solid delivery against our financial priorities. sales including GMS from our marketplaces grew 1.6 percent in a mixed market environment adjusted profit before tax was up 9.9 percent to 404 million pounds reflecting strong gross margin performance and disciplined cost control through our profit performance and share buyback program adjusted earnings per share grew 16 percent after investing in our strategic priorities www.thierrydominiquegerard.com Thank you for watching. tiling and painting within seasonal demand for cooling and outdoor leisure products was strong while categories such as plants outdoor paint and fencing were weaker we also saw a shift towards online purchases overall seasonal sales grew in the half against strong competitors with all banners delivering growth in q2 in big ticket categories we continue to outperform the kitchen market and the UK and Poland, reflecting the investments we have made into our ranges, showrooms and in Poland, design studios. On the other hand, the bathroom market remained challenging across our geographies and our ranges underperformed the market. In response, we have initiated a comprehensive range review with encouraging early results from the launch of our new bathroom furniture range, Emondra 2. In the UK, the market continues to be soft. Broadly consistent with recent quarters, B&Q performed in line with the market and outperformed when including Marketplace GMS. Marketplace contributed £12 million of profit in the half. TradePoint continued to take share in a subdued trade market. Thierry Dominique Gerard Garnier, GroupFix's strong proposition of proximity, availability, and speed makes us confident it can continue to gain share. UK and Ireland retail profit increased 4.9% to £361 million. This includes a £14 million business rates refund in the period. The French market was broadly flat in the period, with strong seasonal demand in Q2. Castorama, like-for-like return to growth in Q2, a fourth consecutive quarter of sequential improvement, supported by our revamped stores, successful range reviews, and strong seasonal performance. Like-for-like sales including marketplace GMS were plus 0.4% and performance was in line with the market. At Brico Depot, like-for-like sales declined 4.2%, reflecting weaker demand for building materials and larger projects During the summer heat waves, as well as some temporary disruption in the customer experience following the implementation of our new website. We will continue to make good progress in trade with sales up 21%. France retail profit increased to 74 million pounds with retail margin improving 10 basis points, reflecting our continued focus on margin and cost discipline. Our strategy to transform Casa Roma is delivering tangible results. We have now addressed 24 stores across the network with encouraging results. Right-sized stores are delivering double-digit improvements in sales densities, while revamped stores are generating a higher profit contribution than the Casa Roma estate average. Nine further stores are on track to be addressed in the second half of this year. Following the successful open of two franchise stores last year, Today we also announced the transfer of a third store to franchise. This year, we are reviewing 20% of our ranges. Those ranges already reviewed are growing 5.1%, with some growing double digits. Alongside strengthening our stores and ranges, Castorama is making good progress on trade and e-commerce, enabling growth into new customer segments and categories. Trade penetration increased 6.5 percentage points, e-commerce sales grew 11%, Marketplace is profitable after only two years. Poland delivered a strong first half with total sales up 3.6% and like-for-like sales up 2.2%. We gained share in a growing market supported by trade, e-commerce, and design-led categories. Strength and core was driven particularly by internal building categories. Trade sales grew 14%, e-commerce sales grew 39%, and marketplace reached breakeven. Retail profit increased 15.7% to 60 million pounds, with margin up 60 basis points. Iberia also delivered a strong market outperformance, with like-for-like sales growth of 7.7%. Growth was supported by our competitive price position and strong momentum in trade and e-commerce. We also opened two stores, our first Iberia openings in a decade. Retail profit increased 17% to 13 million pounds, Scrupex France continues to build momentum with store like for like sales increasing 48%. We're seeing progress in the key leading indicators with growing brand awareness, strong repeat customer purchases, around 55% trade penetration, and an increasing network effect as density builds. Importantly, the earlier cohorts are showing continuous strong growth. This year, We have opened two stores, and in the second half, we'll be opening another three, bringing our total store count to 37. We delivered solid profit growth of 9.9% in the half. Excluding the one-off business rates refund in the UK, profit growth was 6.1%. Transcription by CastingWords These headwinds were more than offset by strong gross margin delivery and structural cost reductions. Gross margin added 40 million pounds delivered through the strength of our group buying and sourcing, marketplace and retail media growth, foreign exchange tailwinds, and the disposal of Romania last year, partly offset by freight headwinds and a higher trade mix. We delivered 44 million pounds of structural cost reductions, including distribution center space optimization, procurement efficiencies and store operating model improvements looking ahead we continue to see further opportunities from buying and sourcing marketplace retail media and supply chain optimization in parallel we continue to drive productivity across the group with additional opportunities across stores head offices and global business services we're also committed to generating strong free cash flow and to delivering attractive returns to shareholders. In H1, Kingfisher generated adjusted EBITDA of £784 million. Working capital delivered a net inflow of £5 million. We have made good progress on inventory since 2022 and see further runway for working capital improvement through multiple structural actions. Some examples of actions we are taking include reducing supplier lead times, Negotiating lower minimum order quantities and moving slow-turning first-party ranges to marketplace. We invested £171 million in capital expenditure, prioritizing growth, including nine new stores, new ranges, and technology. Overall, we generated free cash flow of £339 million, and our strong cash generation continues to support attractive shareholder returns. www.thierrydominiquegerard.com When we set out our guidance at the start of the year, we observed a mixed consumer environment. We anticipated a limited impact from events in the Middle East on our energy and freight costs and rational pricing behavior across our markets. We also expected to continue our long track record of maintaining competitive prices while managing gross margin and cost effectively. Broadly, that is what we have seen in the first half, and so our assumptions for the second half remain largely unchanged. Reflecting our solid H1 performance, we are upgrading our adjusted profit before tax guidance to a range of 595 million to 635 million pounds, an increase of 20 million pounds at the midpoint. We are also upgrading our free cash flow guidance by 20 million pounds and now expect free cash flow between 480 million and 520 million pounds. With that, I'll now hand back to Thierry.