Kingfisher plc

Good morning and thank you to everyone who has made the time to join us here at the London Stock Exchange and those of you dialing in online. On behalf of our group executive and board, I would like to start by saying thank you to all our teams for helping to deliver a record financial year for our group. And they continue to deliver incredible work in a general environment that stays challenging. We are extremely proud to be part of that team. Before I begin, I would like to comment on the shocking and deeply concerning events that has been unfolding in Ukraine. Our thoughts today are with the people in Ukraine and Eastern Europe impacted by the conflict. In the start of the crisis, we immediately offered our head Castorama in Poland, Brico Depot in Romania are volunteering colleagues from local stores to help refugees at the border, donating essential items and fundraising. Kingfisher and all its banners are working with charities such as the International Red Cross, and we are matching further donations from colleagues. We are part of the international effort and stand ready to help further in any way we can. I will talk more on what the Ukraine crisis means for our business a bit later. So let's move to the agenda. I will start the presentation with an update on our operational and strategic progress. Bernard will then present our financial performance and outlook before we open the meeting for Q&A. To the key messages on slide five, and we have had a year of record revenue and profits. Sales of £13.2 billion are up 10% on a like-for-like basis, and adjusted pre-tax profit of £949 million are up 21% year on year. We are continuing to gain share in our key markets, growing significantly faster than the industry, we have managed very effectively and continue to manage the challenges faced by all retailers around cost inflation and product availability. And as a proof point, the group gross margin increased by 30 basis points in the year, while all banners have an excellent price index versus their closest peers. We are now over two years into our new strategy and execution is ahead of schedule. With our business in a strong position and our industry benefiting from new longer-term trends, we are accelerating our investment for growth in multiple areas of the business. And finally, we remain focused on providing attractive returns to our shareholders, with over £550 million being returned over the last year. We have raised our full-year dividend by 50%, and will complete the final tranche of our £300 million buyback by May. Looking forward, we are confident that our continued strong execution, supported by our investment and new demand drivers, are positioning us for faster growth. On slide 6, you can see that Kingfisher is building a track record of delivering against our financial priorities. We have grown at over twice the rate of the market over the last two years, with Kingfisher sales CAGR between 2019 and 2021 at 10%, versus 4% for our addressable home improvement market. Our aim is to grow profit in line with sales, and then gradually faster over time. Over two years, we have expanded our PBT margin by 250 basis points to 7.2%. We have generated strong free cash flows with 42% compound growth and have returned over £780 million to shareholders over the last two financial years through dividends and buybacks. These attractive returns reflect our strong cash generation as well as our confidence in continued delivery. We have done this while maintaining our focus on reinvestment in the business and keeping an efficient capital structure. Turning to slide 7, and we are committed to deliver value for our customers, while also effectively managing the near-term operational challenges that continue to impact our industry and markets. And first, let's cover the Ukraine crisis and what it means for us. We have no direct business exposure. In September 2020, Kingfisher completed the sale of Castorama Russia to Russian DIY chain Maxidome, Today, we have no operation in the country, nor do we provide sourcing to Mexico. On March 1st, we took the decision to stop selling the limited number of products directly sourced from Russian and Belarusian suppliers across the group, and those products have been removed from our shelves. On the indirect side, we are engaging with our suppliers to ensure materials or components are no longer sourced from Russia or Belarus. Overall, the situation is being managed very tightly by Kingfisher with minimal disruption to date on our supply chain. Regarding inflation, in common with other businesses, we are seeing higher than normal CPI caused by rising prices for raw materials, energy, wage increases, and higher freight costs We have managed this impact very effectively and you can expect the same from us. We are as well very proud of the way our supply chain and logistic teams have managed the challenges faced by all companies over the last 18 months. While product availability has been below normal levels, we have worked tirelessly with our suppliers to protect our best seller ranges which saw improved availability during the year. And this has supported our market share gains. In this inflationary environment, Kingfisher is strongly committed to deliver on value for our customers. Firstly, we have invested tens of millions of pounds in the last few years in our overall price positioning, meaning that even after inflation, we remain price leaders in our industry. Our price index is at 100 or lower across the group, and this is a big competitive advantage in this environment. Furthermore, our customers have access to lower-priced products via our own exclusive brand ranges, which represent 45% of group sales. We also have some of the industry's best art discounters in Brico-Depot, France and Iberia, who together are 20% of group sales. And let's also remember that DIY is by essence very competitive in a more challenging environment where people want to do more things themselves to save money. And our energy-saving products, 10% of group sales today, will support our customers as they look to mitigate the impact of rising energy costs. And finally, on cost, we have many important cost reduction programs in train across the business, and these are delivering significant mitigations against inflation. The COVID crisis has also taught us how to rapidly flex our cost base when we need to, which again is a key advantage in times of uncertainty. Moving now to slide 8. And you will be familiar with the supportive market trends I set out last year. We conducted extensive customer surveys in our markets over the last few weeks and updated these again since the start of the Ukraine conflict. The results indicate that the overall trends continue to endure with home improvement considered as one of the key areas of consumer spending, safeguarded by worried customers. Activity in DIY and trade continues to be driven by more working from homes, with 40% in the UK, France and Poland continuing to work from their houses and spend more on home improvement. Younger generations remain engaged, with their newly found DIY skills, and we are seeing robust demand from recent house movers, with over half of them planning to undertake more home improvements this year than in 2021. There is also a clear and emerging focus on sustainable home products and energy efficiency, which I will talk to later. Activity levels remain above pre-pandemic levels in the UK and France, and future spend intent remains high. Balancing these positive results, recently there has been rising concern about the state of personal finances. Against this backdrop, our focus on delivering on value for customers is essential. And finally, our survey shows that 97% of trade people are currently working, and this is the highest level seen since 2017. Furthermore, 89% of trade also has more work in the pipeline. And central to all our insights is that the home nesting trend that has emerged over the last two years is here to stay. Turning now to slide nine, which shows our revenue split by DIY and DIFM, or Do It For Me, which are those projects and tasks that typically require a trade person to undertake them. And this is a new and important disclosure. Last year, we saw strong growth from both our DIY and DIFM trade business. Our group revenue is evenly split across the two groups. with even splits also across the UK, France, and Poland. In the five years before the COVID crisis, we saw a very gradual shift of customer preferences from DIY towards DIFM trade, changing by less than one percentage point. This changed during the pandemic as customers favored DIY for its social distancing, lower cost, leisure and well-being quality is strengthened by more people working from home. While customers are becoming more comfortable with trade people in their homes, as you can see from the table on the right, the IFM trade activity within our markets is still below pre-pandemic levels. While Kingfisher has embraced the resurgence in DIY, our outperformance of the market has been driven by our DIFM and trade business. We have seen strong performance of Scufix and TradePoint. We have launched new trade-focused own brand ranges, and we have invested in our showroom products and installation services, as well as our broader store and online services portfolio, including our Need Help! marketplace. We are well positioned to capture the growth potential of both DIY and DIFM trade, and we are executing on plans to further increase trade customer engagement. More on this later. Now on slide 10. Slide 10 outlines our strategic progress is resulting in new customer growth and retention, which is contributing to our market share gains. Growth in new customers was strong last year, with our acquisition of new known customers up 28% on pre-pandemic levels. And as you can see here, we are retaining the sales of new customers acquired in 2020. In the 12 months following their first shop, we retained 114% of customer spend. meaning their cumulative spend over one year was 114% of their spend in their first months as a customer. This highlights the importance of getting to know customers directly, because it gives us more levers in order to further grow this spend. Our known customers tend to spend more than customers that we can't identify, Their average basket across the group is 25% higher than the overall average. And across Kingfisher, each banner is focused on growing their known customer bases through loyalty schemes, like the B&Q Club Card, as well as customer accounts for e-commerce. And finally, our data at TradePoint shows that trade customers shop more frequently than retail B&Q customers and have a 60% higher basket. another proof point to support our investment for growth in the trade segment. Turning to slide 11 and our commitment and passion to lead our industry in responsible business practices. Our colleagues recognize Kingfisher as a great place to work, ranking us within the top 10% of global retailers for employee NPS. Following the great results of this year, we have decided to continue to share the success of our plan with all our colleagues through a new all-colleagues share plan launching later this year. We are becoming a more diverse and inclusive company and each of our banners and group functions is executing on their own inclusivity action plan with targets that are linked to remuneration. We are also fully committed to playing our part in tackling climate change. We have achieved a 25% reduction in scope one and two emissions versus 2016-17, and remain on track to achieve our approved science-based 2025 targets, which are aligned to a 1.5 degree trajectory. We are also on track with our ambitions to achieve 100% responsibly sourced wood and paper. Another key ambition of ours is to help our customers to build greener, healthier homes that are more affordable. 44% of group sales already come from products creating a more sustainable home, and we are announcing today a new and ambitious target to increase this to 60% by 2025. Our own brand capability gives us a platform to achieve this goal with sustainability being at the center of new product development. We are also looking at ways to play a bigger role in circular economy initiatives, including reconditioning return products for resale. And last year, we launched innovative search programs at Screwfix and Castorama France. Finally, on communities, we wish to contribute to fix bad housing, which remains such a pressing issue in the markets in which we operate, we achieved our target of helping 1 million people with the greatest housing needs four years ahead of schedule. And we are now doubling this target to help at least 2 million people by 2025. Turning now to France on slide 12. As you can see in the top part of this slide, We have made significant changes in France over the last two years. The focus has been to fix historical issues in our operations by implementing new trading approaches, improving our price positioning and addressing significant technology and supply chain challenges from previous years. I can confirm we are on track to complete all final fixes this year especially on our product range and logistic network. Castorama's range has evolved rapidly over the last two years and 7,300 new SKUs have been added to the assortment with more local and OEB brands. We are also continuing to enhance Brico Depot's discounted credentials through continuous improvement of its price index and through optimizing its range of products. This includes introducing many new specialist discount on brands to increase differentiations against general home improvement peers. We are progressing well with a fundamental reorganization of the logistic network in France. We have now reduced our distribution center space by 19% over the last 18 months, and this program is resulting in short early times, better customer service, more efficient levels of inventory and also lower greenhouse gas emissions, while also contributing positively to our gross margin, which is up 60 basis points in France. Finally, we'll complete the last phase of SAP implementation at BricoDepot later this year. In parallel, we have made broader strategic progress in France over the last two years, including The acceleration of our e-commerce business, where sales are over 250% higher than two years ago, adapting our store footprints through compact store and right-sizing tests, and ongoing cost and inventory reduction programs. Our actions to date have had a big impact in our stores and online, with a strong improvement in customer NPS. They are also driving an improved top and bottom line performance, and we continue to grow our market share in France, which is the ultimate proof of our progress. You have seen many presentations on the issues with France in the past years. My message here is that we are fully on track with our actions to fix the problems. We have strengthened our banners in every department, and we are now in a good place to drive more profitable growth going forward. Turning to slide 13 and our growth agenda, we are over two years into our new strategy and we have made strong progress on the core areas shown on this slide, e-commerce, our own brands, the growth of our trade business, our mobile and service innovations, and adapting our stores. Delivery is ahead of schedule. This is allowing us to now accelerate investment to capitalize on several attractive growth opportunities, including our scalable e-commerce marketplace, the expansion of Screwfix in the UK and France, new store openings in Poland, and our plans to increase our trade customer base. Looking forward, this investment will drive further market share growth along with faster growth in sales, profit, and free cash flow. Let me now spend a few minutes providing more details on each of these focus areas. Moving to slide 14, our e-commerce sales have almost tripled on a two-year basis, with penetration up 10 percentage points to 18%. And our digitally enabled sales now represent 26% of sales. Here I mean the sales coming from direct e-commerce channels as well as digital orders in-store for click and collect and home delivery. This new KPI helps us to measure how well we are adapting to changing customer behaviors. Our e-commerce growth has been enabled by our successful move to a store-based picking and fulfillment model with 91% of the group e-commerce orders picked in stores last year, and this is 89% excluding Screwfix. This underlines the importance of our store assets, enabling levels of speed and convenience that are unraveled by pure play online businesses. The customer preference for Click and Collect remained strong last year, even after the lifting of COVID restrictions, and this continues to be our most significant e-commerce channel. Click & Collect accounted for 87% of all e-commerce orders and 73% of all e-commerce sales. We continued to develop and further increase the speed of this service with the rollout of Click & Collect lockers in Castorama Poland stores, and have started testing these at B&Q. We also invested in car park seamless collection capabilities in France and in Poland. We believe that faster home delivery can be a significant market share driver for us. In August last year, we launched Screwfix Sprint, offering one-hour delivery to customers The services currently covers one third of the UK postcodes with an average delivery time of around 45 minutes and the fastest delivery time to date of an incredible eight minutes. Customer response has been very positive and will extend sprint geographic coverage in the UK this year. We are also benefiting from valuable lessons as we explore faster delivery in other banners. Looking ahead, We remain committed to delivering strong growth in e-commerce sales through providing faster speed and convenience. We are moving towards home delivery for full storages and towards faster click-and-correct and last-minute delivery options. In Poland, we are completing the rollout of our new Group Digital Stack, enabling stronger digital capabilities. We also believe we can add significant value for customers by offering them more product choice, which leads us to slide 15. Earlier this month, we launched our first e-commerce marketplace on bnqdiy.com using scalable technology developed with Miracle. This will dramatically accelerate the product choice that we can provide our customers. Our initial offer comes from carefully selected third-party sellers in four home improvement categories, wallpaper, lighting, power tools, and lastly, a new category for B&Q, small domestic appliances. Within the next six months, we expect that 100,000 home improvement SKUs will be available on the marketplace across many new and extended categories, adding to B&Q's current online offer of around 40,000 products. We then plan to rapidly expand SKUs after that. We are in a good place to take advantage of the retail phenomenon that is online marketplaces. Our banners have top one or two market positions, and they already drive significant online traffic. bnq for example so over 300 million visits to its website last year ranking its 13th out of all uk retail websites our banners have strong and trusted brands and we are able to leverage our store assets and logistic network to offer delivery pickup and returns options for customers and our suppliers our existing strong traffic means that customer acquisition cost is low, and we expect the platform to generate attractive incremental profits over time. From the outset, we have invested in technology and talent that delivers scalability, which will allow us to deploy it into our other markets relatively quickly and at a lower cost. We are excited by this prospect and are looking forward to updating you with its progress. Moving to slide 16 and our own exclusive brand, OEB. OEB is a core component of our Powered Backing Fisher strategy. Our OEB ranges are continuing to perform strongly, with like-for-like sales up 19% on a two-year basis, slightly outperforming non-OEB ranges. At 5.9 billion pounds, they represent 45% of group sales, which was stable year on year, even as we also introduced a wider range of branded products. OEV is critical in the way we deliver on value in the current inflationary environment. They offer outstanding quality for significant cheaper prices than branded products, and this is 45% of our sales. OEB ranges have also seen a generally higher availability than non-OEB ranges, which has been supportive of our market share gains. We are increasingly leveraging the scale of the group to provide differentiated and specialized products for our trade, discounter, and general home improvement banners. During the year, we created an additional portfolio of 32 new and redeveloped OEB brands, Some of our OEB ranges, such as Magnuson and Titan, are significantly outperforming sales volume of major branded competitors. Last year, we also completed the rollout of our new OEB kitchen range in all our key markets, our largest group-wide range launch so far. This has received exceptionally strong customer feedback on design, innovation, and value for money. It has already become one of our top performing categories and a strong contributor to our banner's growing market share. It achieved double digits like For La Grosse last year, despite periods of COVID-related restrictions in store. And finally, OEB is supporting the delivery of our responsible business goals. 55% of our OEB sales are sustainable home products. And we now plan to expand this significantly to support the group sales target I mentioned earlier. Next to slide 17, and trade customer represent a 50 billion pounds addressable opportunity for Kingfisher in the UK, France, and Poland. Earlier on in the presentation, I told you that DIFM and trade represent 50% of our group sales target. that we have significantly outperformed the market here over the last two years. Screwfix is continuing to grow in the UK and Ireland with a record of 70 new stores last year. This takes us to a total of 790 in the UK and Ireland. Our plans for this year are even more ambitious with a pipeline of over 80 stores and we remain confident in reaching our target of at least 1,000 over the next two to three years. In France, Screwfix launched as a pure play last April. Early results have been very encouraging. Web traffic is ahead of expectation and our customer NPS score for delivery is already on par with Screwfix UK. ScrewFix supply chain development in France is advancing well, and we are planning to open our first physical store there in the second half of this year, followed by a more ambitious rollout in 2023. Last year, we relaunched TradePoint, our trade-focused banner in B&Q, and it has made excellent progress. Our focus on TradePoint loyalty program new trade-specific ranges and online experience has resulted in more engagement with existing customers and strong new customer growth. LAC4LAC sales outperformed the rest of B&Q, growing 20% last year and by 33% on a two-year basis with revenues of over 830 million pounds. Our target is now to reach over 1 billion of sales. TradePoint has counters in just over half of B&Q estate, and we plan on further expanding penetration in 2022, as well as opening our first counters in Ireland. Beyond B&Q, there is a significant opportunity to leverage the expertise gained at Scrufix a trend point to increase trade penetration across all our other big box retail banners. Each of our banners is executing on ambitious plans to target trade customers. This includes trialing new store layouts and concepts, creating more trade-focused OEB ranges, offering a more user-friendly and integrated digital experience, increasing the speed and convenience of order picks up, and further developing our trade loyalty programs. We have also established a center of excellence to share best practices on trade among us. Overall, we see stronger trade penetration as a significant opportunity to drive faster and profitable sales growth. Now to slide 18, and customers are using mobile more than ever to shop for improvement. And this channel continues to be the fastest growing for us. Mobile sales are up by 300% on a two-year basis. Last year, we launched the new Castorama Friends and Screwfix apps. The new Screwfix app has been downloaded 2 million times. It has a number of innovative new features, including geolocation to speed up in-store pickups. and we have integrated ScrewFix's one-hour delivery service sprint. At B&Q, we have rolled out our new self-checkout terminals in 110 stores. We are ahead of our expectations in these stores for transactions, resulting in great customer satisfaction and meaningful efficiency gains. We are also in the early stages of implementing self-checkout terminals in France and Poland. And following the successful introduction of our group-developed 3D design tool for kitchens and bathrooms, we have extended the technology to enable customers to create online 3D designs of modular storage. We have increased project affordability through initiatives such as tool hire and enhanced customer credit proposition. For example, at B&Q, we have made kitchen and bathroom installation costs available within our interest-free financing offer. Installation services are available now in all B&Q UK and Ireland stores since last August and are proving very successful. Adding to this, our online services marketplace, NeedHelp, was rolled out in B&Q and Poland last year leveraging Kingfisher's strong relationships with straight people. NIDELP achieved a 60% increase in the number of completed jobs last year. And finally, in 2022, we'll trial an energy-saving service at B&Q to diagnose and fit energy efficiency solutions in customer homes. Now to slide 19. We continue to increase our store numbers while aiming to reduce the average size per store. We are doing this by opening more compact stores and medium box stores and by right-sizing a relatively small proportion of our larger format big box stores. Compact stores are an important driver for continued market share growth in urban areas. Last year, we tested 20 new compact stores across the UK, France, and Poland. These tests took place in urban retail parks, high streets, and in supermarkets, including in this test, where five ultra-compact screw-fix stores. This innovative new format has been developed to take the core screw-fix range into spaces unavailable, unable to cater for the full traditional trade offer. We'll monitor these tests carefully before committing to further rollouts. In Poland, we have established a significant long-term expansion plan with a combination of big, medium and smaller boxes. We opened seven new stores last year, a record for Poland, and we plan to open even more stores this coming year, reinforcing Castorama's number one position in the market. And we continue to be excited by the potential of the franchise business model. Last month, we were pleased to open our first franchise store under the B&Q banner in the Middle East, with one more to open in Q2. These stores are operated and staffed by the Alpha Time Group. Turning now to our big box stores, last year we completed three ride-sizing trials at B&Q, with a further two at Castorama France, the first right sizes for our French business. The B&Q results have been very good with space reduction of 15% to 13% all taken over by discounted retailers. Since reopening, the stores have exceeded our performance expectations with strong sales retention and improved profitability. Following on from these trials, We have now finalized our assessment of our property portfolio and future space requirements across Kingfisher. And we are announcing today that up to 40 big box stores across B&Q and Castorama France will be resized over the next 10 years. This will include a reallocation of space to e-commerce operations and dark stores, The space reduction equates to circa 3% to 4% of the combined selling space of B&Q and Castorama France, and we expect to be able to carry this out within our medium-term capital expenditure guidance. So to summarize here on slide 20, we are ahead of schedule with our Powered by Kingfisher plan, and we are now accelerating investment for growth. To remind you of our financial priorities, first, we'll continue to prioritize top line growth and sales growth ahead of the markets. Next, we'll grow adjusted PBT in line with sales as we reinvest scale benefits to drive the top line. As this materializes, we will aim to grow PBT gradually faster than sales over time. And finally, will generate strong free cash flow through greater capital efficiency and financial discipline. As demonstrated last year, this will underpin shareholder returns through our progressive dividend policy and where there is surplus capital, share buybacks or special dividends. With my update now concluded, let me hand over to Bernard.

Thank you, Terry, and clearly launching Marketplace with a bang. Good morning, everyone. I will start with slide 22 and the key financials for the year. Kingfisher had another year of strong financial performance. In constant currency, total sales were up 9.7% to $13.2 billion. Like-for-like sales were up 9.9% compared to the prior year and up 18.1% versus two years ago. We generated gross profit of 4.9 billion, driven by strong sales growth and a 30 basis points increase in gross margin. This increase was supported by our effective management of inflation and by savings in logistics and in inventory holding costs. In constant currency, retail profit increased by 16.7% to 1,148,000,000, with retail profit up 50 basis points to 8.7%. Adjusted pre-tax profit increased by 20.9% to $949 million, with the corresponding margin up 80 basis points to 7.2%. Free cash flow was strong at $385 million. While EBITDA was up year-on-year, the year-on-year reduction reflects, as expected, the reversal of positive working capital movement from last year and a step up in the growth element of our investments. By comparison, our free cash flow two years ago was 191 million. Our cash position remains strong with 809 million in cash. Our net debt, which includes IFRS 16 leases, is just under 1.6 billion with net leverage of one-time EBITDA. Moving to slide 23 and the performance of our major geographies. All year-on-year variances are in constant currency. starting with the UK and Ireland, where sales grew by 13.4%, including a 1.5% contribution from net space growth. Like-for-like sales at B&Q grew by 12.3% and 26.9% on a two-year basis. Trade points outperformed the rest of B&Q, with like-for-like sales up 20% and up 33% on a two-year basis. Big-ticket categories like kitchens and bathrooms continued to perform strongly. Like-for-life sales at Screwfix grew by 10.9% and by 18.2% on a two-year basis, reflecting continued strong demand from trade customers. B&Q and Screwfix both grew their market share in the year. UK and Ireland's retail profit increased by 16.7% to $794 million. Retail profit margin increased 30 basis points to 12.2%, with a better operating cost-to-sales ratio. Gross margin rate decreased by 60 basis points, largely reflecting changes in channel and category mix and one-off logistics spend. This was partially offset by our effective management of inflation. Operating costs increased by 9.6%, largely due to higher costs associated with strong trading store openings, inflation, digital investments, and the reversal of temporary COVID-related cost savings in the prior year. Turning to France, sales grew by 9%. On a like-for-like basis, France sales grew by 9.3% and by 14.8% on a two-year basis. This includes a 1% negative impact from COVID-related temporary store closures during the first half of the year at Castorama. like-for-like sales did benefit from the gradual opening of more stores on Sunday. Retail profit increased by 28% to 221 million, with a 70 basis points increase in the retail profit margin. The gross margin rate increased by 60 basis points, reflecting reductions in logistics and inventory holding costs, a higher OEB weighting at Ricodepot, and our effective management of inflation. This was partially offset by an upweighing of special promotions or archivage, more trading events and category mix. Operating costs increased by 8.5%. This was mainly due to higher costs associated with strong trading and additional Sunday openings and the reversal of temporary COVID-related cost savings in the prior year. Performance in Poland was impacted by store closures for over five weeks in the first quarter. This had an impact of around 6% on like-for-like sales. As a result, like-for-like sales growth was lower at 0.3%, up by 5.3% on a two-year basis. Space growth contributed 4.7% to total sales. Poland's growth margin rate increased by 50 basis points, largely reflecting our effective management of inflation. Retail profit decreased by 1.5% to 135 million, with growth in gross profit offset by an increase in operating cost of 10%. High operating costs were driven by an acceleration in space growth and store opening cost, in addition to operating cost inflation. In Iberia, light for light sales increased by 23.2% and by 14.6% on a two-year basis. Retail profit of 12 million was 9 million higher than the prior year. Romania reduced its retail loss to 11 million, driven by strong trading, despite the impact of COVID-related trading restrictions throughout the year. Note that Romania's sales and retail loss include one extra month of results for January 2022, as we align the business to the Kingfisher's reporting calendar. On a comparable basis, excluding this additional months, the retail loss would have been $8 million, a 35% improvement from the prior year, and strong progress from the $23 million loss recorded two years ago. Other consists of the consolidated results of our new businesses, Needell, Screwfix International, and Franchise Agreements. Due to these businesses being in their early investment phase, the combined retail loss of $10 million was incurred as they scaled up for growth. Our Turkish venture contributed an equity accounted retail profit of 7 million, up 8.8% in constant currency. The slide 24 and the movement in group retail profit. In constant currency, this was up 145 million, or 16.7%. Like-for-like sales growth and the increase in growth margin rate contributed 429 million. Inflation-related operating cost increases were limited to 71 million or 2%. Strong trading and higher digital costs drove up our operating costs. This was partially offset by cost savings as part of our strategic cost reduction program for a net impact of 106 million. Therefore, on a comparable basis, operating costs only increased by 4.9% versus a 9.9% increase in like-for-like sales. Net space growth contributed 28 million of retail profit, mainly driven by Screwfix, the permanent closure of eight Castelmama France stores last year, and the disposal of our last-making Russian business. As mentioned in my previous slide, investments in the development of our new businesses cost us 10 million in the year. Finally, while COVID-related costs were lower this year, the prior year benefited from significant non-recurring cost savings with an impact of 106 million. Temporary savings included discretionary savings such as marketing, advertising and travel, as well as employment support programs in France, Poland and Iberia. To slide 25 and the summary of cash flow movements during the year. We generated an EBITDA of over 1.6 billion in the period. The working capital outflow of 215 million is the result of an increase in inventory of 359 million, partially offset by a net increase in payables of 144 million. As expected, the increase in inventory was largely due to inflation, growth of our business, including store expansion, the rebuild of stock levels ahead of peak trading period in H1-22, as well as an earlier Chinese New Year at the end of January. I also remind you that we had a very low inventory in the prior year. The net increase in payable largely reflects the timing of inventory and GNFR purchases. In line with our guidance, we increased our capital expenditure in H2 as we accelerated investments for growth. And our full-year CapEx was 397 million, or 3% of sales. Free cash flow for the period was €385 million. The adjusting another outflow of €114 million includes a €64 million payment made in H1 last year to HMRC in relation to a European Commission state aid challenge. This is also recorded as a receivable while we contest it. Dividends of 254 million were paid in relation to the full year 2021 final and the full year 21-22 interim dividends, and we realized 157 million of the 300 million share buyback program announced last year. Overall, this resulted in a negative net cash flow of 140 million. Moving to the slide 26 and our current liquidity and financial position. As of the 31st of January, we had over 1.3 billion of total liquidity available, including over 800 million of cash and an undrawn sustainability-linked credit facility of 550 million. Having repaid both our fixed-term loans of 50 million euro and 50 million pounds in H2, our remaining financial debt is minimal. Net leverage was one time EBITDA at the end of the year, below our medium term target of a maximum of two times. Let me now move to some observations on cost and cash generation before completing my remarks with the outlook for the year. Moving to slide 27, we remain focused on optimizing our costs. This is important in the current heightened inflationary environment. At the start of 2020, we started multiple cost reduction programs managed jointly by our banners and group functions. Some examples of these programs include improving store productivity through better use of technology, including the rollout of self-checkout terminals, continued savings in our goods not for resale purchases, expansion of our shared services activities, and reducing dual running costs between group and banners. The latter was achieved by reorganizing our commercial operating model. As Jerry mentioned, we have also significantly reduced distribution center space in France, one of our many supply chain initiatives. And we continue to renegotiate our leases as appropriate, completing 34 B&Q lease reviews in the year, achieving an average rental reduction of over 20%. Overall, we achieved 100 basis points reduction in our group operating cost-to-sales ratio on a constant currency basis. We continue to manage the impact of inflation well. Our group gross margin increased by 30 basis points last year, while clearly retaining our price leadership position in our markets. Better value OEB products, 45% of our sales, give customers a wider variety of price points to choose from. We also benefit from banner and group scale with many long-term supplier relationship. And we continue to hedge energy and currency to increase stability in what is clearly a volatile environment. The lessons learned from the pandemic have been invaluable, providing us with the experience and confidence that if need be, we are able to rapidly flex our cost base in negative market growth scenarios. Some examples of areas with room for adjustments are reducing overtime and temporary staff numbers, changes in performance-related incentive payments, and quickly adjusting discretionary spend such as marketing and advertising. Finally, and if needed, we would carefully review the pacing of range reviews and investments. In summary, we remain committed to delivering mitigations against inflation pressures and actively managing our operating costs in the year ahead. Moving to slide 28, which highlights Kingfisher's attractive returns opportunity. In 2021, we delivered on all our financial priorities and generated nearly 400 million of free cashflow, twice the number of two years ago. In terms of capital allocation, our priority remains reinvestment in compelling organic or inorganic growth opportunities. Last year, over 60% of CapEx was growth-focused, according to around 240 million. This is 20% higher than growth CapEx in the prior year. Our overall target CapEx is unchanged at 3 to 3.5% of sales per year on average. As previously guided, over the next two years, we expect to be at the upper end of that range as we accelerate investments for growth. Our balance sheet remains strong, and we believe this is important at this time of uncertainty. We want to sustainably grow dividends, and we increased dividends by 50%, reflecting our confidence in the business. The board also determined there was surplus capital available for distribution to shareholders. And as a result, during the year, we launched a 300 million share buyback program. We expect to complete the final 75 million tranche by May. In summary, the compelling strategic drivers of the business provide an opportunity to deliver attractive earnings growth and shareholder returns. Finally, moving to slide 29 in our outlook for the year ahead. Further technical guidance can be found in the appendix on slide 36. We have made an encouraging start to our first quarter against strong comparatives. Like-for-like sales to date are down 8.1%, representing growth of 16% on a two-year basis. Our performance in these early weeks of the year indicate a very healthy retention of the demand and revenue uplift from the prior two years. Trading in old banners is encouraging, including in Poland and Romania, which have traded strongly in the most recent weeks. In the UK and France, growth was impacted by storms in February. However, the week commencing 15 March 2020 was impacted by all stores in France closing following the start of the national lockdown. Taking all this together, we believe that underlying trading is more in line with our Q4 21-22 two-year like-for-like. Our product availability is good ahead of the upcoming peak trading period, and current big-ticket demand is strong, with the showroom order book for B&Q and Castorama France standing at plus 72% year-on-year and plus 79% on a two-year basis. We are obviously mindful of the current heightened macroeconomic and geopolitical uncertainty. Irrespective of this, we can continue to expect from us a focus on top-line growth, on market share gains, and on strong and consistent execution. We are accelerating our investments for growth with P&L investments of circa 25 million in new businesses such as Grufix France and B&Q's e-commerce marketplace. New store openings, largely in Skrufix and Poland, are expected to contribute circa 1.5% to total sales growth. In this inflationary environment, we will continue to effectively manage our growth margin and be active and responsive in our approach to managing our operating cost base. As a result of this, we are comfortable with the current consensus of sell-side analyst estimates for full year 2022-2023 adjusted profit before tax. With that, let me now hand back to Jerry to summarize.

Thank you, Bernard. Thanks, Bernard. And to now briefly summarize here on slide 31, 2021 was a year of record revenue and profits made possible by the strong execution of our strategy and the incredible dedication of our colleagues. We are gaining share in our markets. We are delivering on value for our customers, which has never been so important as in this inflationary environment. We have effectively managed product availability and inflationary pressures in the last year, and you can expect the same from us in 2022. Delivery of our strategic priorities is ahead of schedule. and we are accelerating our investment for growth. Looking forward, our investment, our continued strong execution, and new demand drivers give us confidence in the significant long-term growth opportunity for the group. Thank you all for listening this morning. Bernard and I would now be happy to answer any questions. So over to you, Maj. Thank you.

Thank you, Thierry. Thank you, Bernard, as well. So let's start with questions from the audience here. We're going to go, well, wait for the microphone. State your name and institution, please. Yep.

Thanks. It's Anne Critchlow from Societe Generale. I've got three questions, please. The first one, what is the percentage of online sales in B&Q and Castorama? And then secondly, looking at the average lease length in B&Q, how long is that now? And how much flexibility have you got for right sizing of stores if you want to continue doing that? And then thirdly, looking at the need help marketplace, do you have an idea of what percentage of customers might be using it? Thank you.

Thank you very much. Let me start, and I think Bernard will give you the data point online. Just a few words on right-sizing. Again, it's not a burning platform. We don't have a store losing money. It's really a long-term plan. We have discussed that several times in the past two years. We really consider that across the group we have – with Crufit, Brico, Depo in France, in Poland, Liberia, Romania, we have the right size. And we just have a small proportion of B&Q and the Castorama French store that could be considered as oversized. So I would say we are very happy with the first test results. You know, what is critical when you do this kind of test is when you reduce the space, for example, by 30%, how much sales you lose. What is your margin level? What is the right promotional level? What is your cost improvement? And so far, let's say, all that is in a good place. So it's really a 10-year program, and we regularly do more of those right-sizing. And as I said, it's inside our CAPEX guidance. On NIDELP, it's still early days in the UK and Poland. NIDELP has been a very long-time partner of Kingfisher in France, so we know them very well. That's why when we made the acquisition, we were already in a known territory. The first step in 2021 was really to roll out NIDELP across all B&Q and Poland. And in 2021, we must admit, there were still a few lockdowns, you know, still pressure on the trade people or fitters going to people's homes. But overall, again, you saw the growth in the number of jobs of NIDELP. This is according to plan, and we are happy with the rollout of NIDELP in the UK and Poland in 2021. Maybe on online, the tax employee.

On online, as we said, excluding Screwfix, we're above 7%. If you look at the difference between the banners, B&Q is comfortably above 10%, and then the French banners are comfortably above 5%.

Here we go.

Richard. Thank you. Morning. Richard Chamberlain, RBC. A couple of questions, please, guys. First of all, could you just give a comment on the sort of overall inventory composition? You've given several reasons for why inventories see up year on year. I wonder if you can just comment on the kind of composition. Is it sort of balanced across categories? Have you brought forward a lot of sort of best-selling lines? and so on. And then the second one is on Screwfix France. Thierry, how are you thinking about the sort of store rollout there at the moment, particularly into next year? Is that going to be a sort of cluster approach for sort of key cities, or is that, are you thinking already about a sort of nationwide type expansion? Yeah, thank you.

You want to start with inventory?

So if you look at the inventory movement on a constant currency basis, it's about 261 million. What I just saw was 359. So you see there's quite a lot of FX impact on that. If you unpick it, it's basically a third is due to inflation. A third is due to stock rebuild. You remember that last year we were actually quite low. I think we set something at 80, 90 million below what we would have expected. And then the other part is what we call temporary and seasonal. And I think it's in the word seasonal, if you look at the composition, obviously it's all the stock, but probably we've got a little bit more of seasonal stock as we anticipate obviously the peak season, which is very important for us. And also some of the things we mentioned, early Chinese New Year, really want to focus on availability. So brought a little bit of that forward to be all ready for our peak season, which has now just started.

Maybe one further comment to take the opportunity to say a word on availability. I would qualify our availability this week as normal or close to normal across the group, which is very good news for us. So, you know, you have stored our benchmark for availability. It's never 100% in retail. And we really did a very strong job the past month, especially on outdoor season. Probably one of the best outdoor season, prepared outdoor season for Kingfisher. So we are really ready for the season. and availability is high. On Scoofix France, you're right to say that the idea was to start with a regional cluster of stores. You know, Scoofix stores heavily rely on supply chain. So you need to open a small distribution center, and then you need to open store, let's say, around or not too far from the distribution center. So for competitive reasons, I will not tell you where is the distribution center and where are our plans, but we already signed a few store locations. We are engaged on a DC or talking to a DC provider. So all that moving at pace. I'm very happy to see the new Screwfix France team. You know, it has been a mix. We are fully ready with the Screwfix team, the Kingfisher French team, even people from outside. And we have already built a very, very high-level team for the operation. So we are getting ready to open store in H2.

Paul, can we get a palm on the front row, please?

Thank you very much. I have three questions, please. Number one is about the percentage exposure to trade customers. I found the data for France is very interesting and is a positive surprise for me. As previously, I seem to understand that the Casto and Brico seems to be more consumer-focused. So have I got my number wrong or has your new analysis shed some light or uncovered something that we're not aware of? And in light of that, if trade demand is very attractive in France, again, would you not accelerate Screwfix France, which would be a mostly trade-focused proposition? Question number two is think about just the business model of the marketplace, please, and how that interact or cannibalize potentially with your, you know, selling your product normally online. Do you see a future where all of these transactional goods and stock can be sold and will be sold online? And therefore, would your right-sizing ambition need to be a bit more aggressive than the 3 to 14%? Finally, it's a near-term question. So how do we think about a potential inflection point for demand? Are we far or close to a point where price might be so high that demand could weaken? And if that happens, is it fair to assume that as a retailer would have a possible scenario where you do promotion on expensive stock and therefore take a hit on margin? And if that happens, what are the tools you have in the back to protect your growth margin? Thank you.

Yeah, thank you. That's a great question. Thank you. First, starting with the new disclosure, you know, you have DIFM and trade. And, you know, looking at what is DIFM, I give you typical categories, you know, when you want to do a kitchen, but large proportion of people that you would rely on trade to fit your kitchen. building material, a large part of building material, you don't do that yourself. So we analyze through customer survey, category by category, which are the categories where clearly you are relying on trade, and that's what we call DIFM. So, in fact, when you compare B&Q and Kesto, for example, B&Q has probably a larger proportion of paint or garden or outdoor categories versus the French market, where in France, the showroom categories are extremely strong. So that's what you can see in those data around DIFM and trade versus DIY. We are convinced that all across the group, we have opportunities with the trade. And you see that in the presentation. We have learned from Home Depot, from Loaves. We have spent time on this. We have learned from TradePoint. You see that we did plus 33% two-year like-for-like for TradePoint. That's very good. Therefore, all across the group, we believe that inside the big boxes, you have opportunity to do a proper job for the trade. It will take some time. You know, you need different OEDs. You need specific loyalty programs to have more data. We need sometimes different digital services. You know, you don't do that over time, overnight. If Home Depot or Treadpoint, they build that over years and years of job. But we feel for Kingfisher is clearly an opportunity. Screwfix, you know, we are, I think, moving very fast in France. So I hope you will see that very soon. Marketplace. You know, I've spent seven, eight years in China, so I think disruption is a very interesting word. You absolutely need to disrupt yourself before somebody does that for you. Plus, when you look for all the big players on the marketplace world, let's take Amazon, you know, you have a positive cycle on traffic. You have your own traffic. So, first of all, BNQ today has 300 million visits, you know, one of the best businesses. number of visits in the UK. So we are not starting from zero. When you are a pure player, you have to buy a lot of Google search, advertising, etc. Probably we need to do a bit, but we already have a strong traffic. When you increase choice, you increase traffic. So obviously you sell more of your marketplace SKUs, but you increase traffic on your own 1P products. So at the end, all the marketplaces that started to move from retail to marketplaces, they showed, they saw an increased traffic and at the end, better business for their own operation as well. So we are pretty comfortable with that. I must say as well that we have built pretty quickly group scalable technology all together with Miracle. So we consider the number one opportunity for us is the UK. but we can relatively quickly extend that to many other countries. We have been recruiting a fantastic team, marketplace, digital, IT guys that have been working on marketplaces across the world, Rakuten, Lazada, Cdiscount, et cetera, that are bringing us an outstanding experience immediately. So I'm very, very excited by this project. I think it will change Kingfisher in the long term. And I don't believe store will, you know, I think, you know, there is a place for online, there is a place for store. Again, if you want to buy taps for your bathroom or your kitchen, normally 80% of the customers, they would be happy with the B&Q range. And you are in store, you want to see that, you want to touch, you want to see the colors. But some customers, they want special designs, special colors, and then online you will find thousands of taps. And, you know, it's long tail, doesn't fit in the store, but it's still our business. We are the leader in home improvement, and we consider tomorrow DIY.com should be your number one choice if you look for a product. So you type taps, you have thousands of taps, you have a special design, you order it. It doesn't mean there is no role for the store. On the contrary. Go ahead, David.

First, I think compared to the pure play marketplaces, that is one of the assets we have, that we can have click-to-collect, we can have returns in stores, so we can have that asset base that they can't leverage. In addition to what they don't have is already very high traffic. I think B&Q is the 13th website in the UK for traffic, 300 million visits. So that makes also your customer acquisition cost, which is an important element for marketplaces, a lot lower. So we've got fantastic assets to leverage exactly with this opportunity.

You're right to say, when you compare ourselves to a pure play, today already you can return any product to a B&Q store. And in the coming months, we'll do that as well for click and collect. So you will be able to buy online and click and collect your product in a B&Q store. We are not ready today, but we are working hard on that. Then inflation and elasticity, I would start to say that, again, we have good price index everywhere. We are monitoring on a weekly basis our price index across the group. At the same time, you saw our gross margin was up 30 basis points. So we've been able to manage relatively efficiently inflation. And clearly, you know, I would. or Bernard will comment the outlook. We are committed to do the same this year. That's what we see at the beginning of this year where we have good price index and we are still continuing to manage inflation across the group. So then inflation can be different by categories, you know, and elasticity can be different by categories. To be a bit simple, If you need screws, well, you need screws, you know, and then the elasticity is less important. That maybe if you are more impulse product, like power tool or kitchen, well, then elasticity has more impact. So it's very different by categories. Inflation is different. We are looking at that. But up to now, you see the order well is pretty strong. The trade, you know, all the indicators we have, the customer surveys we are doing. All that so far are pretty good. But as Bernard says, we are ready. We can't manage uncertainty. So if we see a different pattern of demand, we are committed to manage efficiently our gross margin. And we have demonstrated during COVID. I remind you, we have had our store network more or less closed for two months during COVID. And we have managed that relatively efficiently. So we are agile. We are organized with power backing future strategy. And if we have to adjust our cost base, we'll do that.

And maybe I would also say we've got some defensive assets against inflation. Terry mentioned our OEB. So that's 45% of our sales, and they offer a much better value for money proposition compared to some of the leading brands. We've got two, you know, Brico Depot in France and Iberia, which are very strong discounters, about 20% of our sales. So that also positions us well. And then in general, in a DFM DIY, you know, when maybe things are a little bit tougher, people will turn a little bit more to DIY. So being positioned in that next to DFM should also help us.

All right. Thanks very much. Let's go to Tony first and then Simon.

Thanks very much, Tony. You're talking about some of the metrics on your trade customers trade point. I was a bit surprised the basket wasn't a bit larger for the trade customer. I wonder if you give us the absolute levels of the basket for retail and trade customers following on from that. Bearing in mind the state of your balance sheet, do you think that probably you could accelerate trade business more if you had a credit offer for them apart from the And just a last unrelated question. You referred to changes in, I think, the buying operations in one of the countries. I just wondered if you could update us on where your buying is based from the various banners at the moment, how much is central, how much is localized. That's it.

Sure. Thank you. Maybe let me start with the last one. And I come back to credit offer. Maybe we can give you some data on what we are doing because on School Fix and BAQ, we already have some credit offers. To start with the buying, let's say the group is fully responsible for OEB. So OEB, 100% managed by the group. That's part of our power. That's a key part of our power banking feature strategy. BAQ does not create private table. It's managed by the group. So you have sourcing offices across the world for years. We have a really strong team. We have designers, you know, when you want to do a kitchen or bathroom. We have engineers that are experts of material. We have quality teams to control factories. So that's the first part. We have a few international vendors that are managed by the group because we consider their scale, make them more appropriate for groups. but all the rest of the buying are managed by the banner. So the UK-based supplier, they will be managed by BNQ or Scufix, et cetera, et cetera. Does it answer your question? Just a number. So OED is 46%.

OED is 46%, so it's half and half, is it?

Well, yes. You have a few percentage points of international vendors, so we have about... above the half that is managed by the group and a little bit less than the half managed by banners. Then on the trade point and credit offer, yes, the basket is indeed larger. I can't say more. That's what we see very consistently at BNQ on the basket side and the frequency. When I look at Home Depot's comments, to be honest, I see as well that a few trade people will buy a lot. So knowing your customer, interacting with them, creating more loyalty in your trade people is really number one priority. Because usually they will shop at you for a small percentage of their buying. And they will go to many different places. So to be able to increase their loyalty and their spending inside your store is critical for TradePoint. Maybe to comment on the customer.

And also on the trade customers. I mean, it depends what you compare it with. I mean, with a lot of trade customers, the B&Q, the TradePoint, et cetera, it's a convenience buy. So if you do a big project, you typically will go to, for example, a merchant that has obviously a bigger spend. So we're not disappointed with the higher basket. And we do support it with credit in the U.K. So we've got TradeUK, which we offer both in Screwfix and in B&Q TradePoint.

But what are the actual numbers? What is the retail basket and what is the trade basket? You know both of those numbers. Yes, yes, but we don't share them. But the retail basket can be quite small, isn't it? And the trade basket is not that much bigger in absolute terms. So are you actually getting a trade customer, I think is where the question is, or are you getting some first fixed builder who happens to be passing by?

No, we think we get real trade customers. They're part of our loyalty programs. If you look at, you know, Screwfix, they're real plumbers and electricians. So, yes, we're happy with them.

A large, large majority of Screwfix sales is trade, especially electrician, plumbers. So, yeah, that's really our business, yeah.

Also, Tony, the frequency of trade visits is significantly higher than the retail customers, FYI, so you get the multiplicative effect on that. Just saying. Shall we go to Simon? Yeah.

Hi, it's Simon Owen at Credit Suisse. Just going back to trade, and particularly in France, the French market seems to be an amazingly resistant to consolidation in recent years. I don't think you can really wait to push into trade just to roll out Screwfix. What can you do through Brico and Castor? Are we going to get a trade point type of offer going into Castor, going forwards? So OEB, you seem to be signalling a re-acceleration of penetration from OEB. Do you think you've kind of fixed the initial issues that there were, you know, re-execution and you're now kind of ready to go again? And how far can... can we go? And maybe you can just talk a bit about your thoughts around the buyback. Obviously, nothing announced at this stage. There's a bit more to go. Do we have to wait until the interim, say, or is it something, a decision that the board could make before that?

Yeah. Thank you, Simon. I think, to tell you the truth, I think the area of the trade outside, even for trade points, has been largely forgotten and underestimated. You know, when I think I was one of the first ones to mention TradePoints when I arrived. People say, well, oh, TradePoints, it still exists, it's still alive. But in fact, and I said that two years ago, it was a miracle to see TradePoint doing such a good business while there was nobody taking care of it. So now we have a team, we have a CEO for TradePoints, we have specific OEBs, and I think it's just the beginning. I think it was just not the focus of the group, you know, and we were building one Kingfisher around DIY, not around trade. And I think that's our job. And what you see with TradePoint or with our American peers is inside a big box, you can do a lot of things. And that's around dedicated loyalty program for the trade, dedicated services because they need different services, dedicated online services, dedicated OEB, et cetera, et cetera. And we are totally able to do all this over time. And at the same time, when you want to buy a kitchen, you are a trade guy, you go to a B&Q store, well, you're happy to be able to buy a kitchen on top of all the range dedicated for the pro. So we strongly believe that we can do more in our trade big box, in our home improvement big box looking forward. And France is the case. You're right to say that probably the French market historically had been more protected, but I see two stations progressing well. So I think it's the right time for us. OED, I don't feel there is any execution issue today. You know, we have a good balance between the group and the banners. You see that the penetration of OEB continues to be stable or grow slightly, while at the same time, we have introduced the past two years a lot of local brands. You remember 2019, we said, well, we are missing brands, et cetera. So we reintroduced even some questions with some of you saying, well, How come you will increase local brands and still being strong on OEB? How come it will impact your margin? But today you see that OEB is stable or growing. And I'm very happy with that. And very happy with the new innovation coming in. We mentioned Kitchen the past two years with incredible success. It's very rare to see the same range of products successful in absolutely every country. Usually you have Colors, material, it was successful everywhere with very, very strong feedback from the UK to Poland and Romania. And there is more to come. Take smart home. What do we do with smart home? That's something that will come in the coming months and years. There's a lot to do. Then the last question, I leave it to Bernard. It's an easy one.

Yes, thanks, Bernard. As I highlighted on my slide, we do see an opportunity for interesting capital returns over time, and the one we're now completing is not a one-off. However, we just very strictly apply our capital allocation framework, different dials, what we invest in growth, sustainable dividends, resilience in terms of the... the overall health, financial health of the company. And just for now, maybe the resilience dial is, you know, we need to see how things go. And then once we're a little bit further, and I assure you we'll look at it diligently, we'll see what we can do. Thank you.

Hi, thanks for taking the question. A couple from me. The first is from Poland. It's great to see that you are expanding out there, but relative to the evolving circumstances in that part of the world, how might you manage that or mitigate in the unfortunate event that things escalate? And if you have to pause, for example, where might you reallocate that spend in this financial year? The second is on the DIFM and DIY split in the future. Obviously, there's an element of resurgence in DIY. And right now, broadly across the markets, it's sort of 50-50. But pre-pandemic, DISM seems to be growing a little stronger than DIY. And obviously, you're doing a lot with the high-ticket items. How might you expect this 50-50 split to kind of change? Or do you expect it might be broadly maintained? And finally, you spoke a little on the trade exposure in France. But on the ground, what about the French consumer market? So across the space, we hear a lot about concerns on the UK consumer being pressured, but given the screw-fix rollout later this year, what are your thoughts on consumer spend in France and how is the French consumer feeling at the minute? Thank you so much.

Thank you. I'm happy to cover those questions. First of all, give me the opportunity to say again what Bernard said. If I look at the past weeks, we rather see a positive impact on our Polish and Romanian operations. So we don't see negative impact. If we look at an impact, it's rather stronger current trading in Poland and Romania. The team on the ground are really supporting refugees and doing many things with the local charities. And we have a very strong expansion plan in Poland. So if you tell me if there is any plan, if something happens in Poland, I don't believe it at the moment. So we have a very strong plan. We'll open more stores in Poland. We are number one in Poland, and we are building on that. And so far, the trading is very strong. On Do It For Me and DIY, something I mentioned, and to be honest, we checked again all those data of the past months. In crisis time, home improvement and DIY seems pretty resilient. I think it's a question for many of us around discretionary spending, but all the past crisis, we didn't see a massive impact on home improvement. On the contrary, the DIY part performed well because, you know, you can understand. If you want to save money, you do more things yourself. You cook yourself and you do more DIY yourself. So pre-pandemic, you're right to say that we saw a stronger do it for me. But again, that was one of the topics that was mentioned by the team two years ago when I arrived. And we did a lot of customer survey to try to understand that. And in fact, we saw a very gradual shift in the UK and rather stable situation in Europe. I still believe, to follow your point, that we'll see do it for me increasing in the future, but it won't be a massive surge. I'll give you another example. To have more trade and do it for me, you need trade people. You need trade people in this country. You need trade people in Europe. We know we have shortages of staff in many areas. So that's as well a constraint on do it for me. So I believe do it for me and trade will grow, but will be a gradual shift. And what we want to show it, in fact, we are we are well positioned to grow on both sides. And there is good business to do it for me and DIY. Friends, customer, maybe give me the opportunity to discuss a bit the customer survey. Some of you remember last year we explained in detail some customer survey around emerging trends. So we did it again in January and then we did it again in March because Ukraine was there. And In short, the underlying trends, even in March, around home improvement are still there. What you see is more people working from home, still there, and we have a direct correlation between people working from home and home improvement spends, and I believe it would stay with us. and we can explain psychologically why we're on tier etc but clearly more working from home will drive more home improvement and in my view in the medium term that one that's the number one long-term driver for home improvement will be will be this one we saw as well the impact of The housing markets, you know very well the housing markets were very strong the past two years. So when you move, usually for the past, after moving, the 12 to 18 months after moving, you are a high spender of home improvement. So it's still there. The customer survey shows that people still want to move. They are still looking for larger houses, outdoor spaces. And if you work in London only two days a week, well, maybe you would consider to move to another place. He will still be there for the coming years. So the impact of more working from home in many areas of our industry in my reviews are very significant, including on housing market and moving. Then we have been recruiting a lot of new customers. You saw the data. And as well, we checked a lot to say, well, are they still there? And globally, you see the retention of the new customer is still pretty good, especially the younger generation. And I don't want to draw a lot of philosophy around circular economy, but if you believe in circular economy, well, you do DIY. And that, in the long term, is as well positive. At last... Energy crisis, energy saving, green homes are there for long term. All governments in Europe will try to go to net zero and housing is a key component of that. We have already ranges in our store, insulation, new energy-saving system, new heating system. We are not perfect. I consider we should work harder on, you know, how you help people to install heat pumps, solar panels, et cetera. It's still very expensive. It's very complex. How we can help our customer to do more on this, I think will come. And that as well will support the business. So if you say France versus the U.K., more or less the same underlying trend. Maybe the inflation level in the UK is higher than in France, but overall, the topics around home improvement, working from home, energy, are the same. You're welcome.

One or two comments on do it for me and DIY. I have recently spoken to our offer and sourcing director. I was very passionate about especially the DIY area and developing products which make it easier for people to do DIY. For example, the Atomia range is very successful. It makes it easier for you to partition your home. Maybe things you would have done with somebody to get done, you can now do yourself. We're doing many things in the way people paint tools, et cetera, to make that more accessible. If you then look at the gradual, the statistics and the numbers, you're really talking about half a percentage point, a percentage point movement in a year or two years. So it is not, so while it's gradual, it is very small. And obviously in the pandemic, we saw a little bit of a resurgence again of DRY.

Now I'm going to move to Maddy, the call operator, to see if there's any questions from the telephones, please.

Thank you, Maj. If you'd like to ask a question via the conference call lines, please signal by pressing star 1 on your telephone keypad. We will pause for a moment to assemble the queue. And our first question is coming from Georgina Joannan of JP Morgan. Please go ahead.

Hi, thank you for taking my question. It was really just about the UK business and particularly in the second half of BISCOR 22. I see that the growth margin was down over 100 basis points, which was a bit more than I had been anticipating. And also, if I'm correct on my math, there was some deleverage in the OPEC space versus pre-crisis levels, which I just found surprising. I'm not sure if I'm perhaps missing something. I know there was a lot of moving parts over the last couple of years, but if you could just speak to that and explain it in a little bit more detail, it would be appreciated, please. Thanks.

Yeah, thank you, Georgina.

Diana, you want to answer this one? Sure. I think just to look at the gross margin, H1, H2, I think H1 clearly B&Q benefited from full price sales. So that was a positive for them. If we look at the second half, just a little bit more of channel and category mix that ran slightly negative and a little bit more of supplying logistic costs just in support of availability. So I think still strong margin performance, but a little bit weaker than H1 given those elements. And in terms of the deleveraging, and I think we tried to explain it in the profit bridge, there was quite a positive impact last year of savings in terms of advertising, marketing, and also some furlough support. So if you net that out, the cost increase, including inflation, was 4.9% for a 9.9% increase in like-for-like sales. So we're pretty happy with that. And finally, do consider that, obviously, in the record year, obviously, the incentives we pay our store colleagues and across the group, of course, are a little bit higher.

Sorry, just to follow up, when I'm thinking about the deleverage on the OPEX-based versus pre-crisis levels, excuse me, I should be putting that down to inflation and staff incentives.

Well, those two elements obviously come in, but I'm not sure I entirely... follow the leverage in terms of operating. I mean, there's, as I said, many moving pieces. There's inflation, there's incentives. Obviously, we're also expanding the business in terms of store growth and new investments in digital. So if we look at it on a like-for-like basis, as shown in the retail profit bridge, we see sustained operating leverage.

So next year, going into next year, you'd expect to see further operating leverage in the UK business versus pre-crisis levels, assuming the top line holds up?

We don't see any change in the dynamics of the business. And obviously on top of that, as we explained, we've got quite a few cost savings programs ongoing, anything from stores to IT to re-gears, et cetera, that also support our cost base.

Thank you very much.

Thank you. Just to say, well, that we are, you know, strongly committed on cost. We have, among the programs that Bernard mentioned, for example, we are rolling out very quickly self-checkout in B&Q, As I said, I don't want to give the data to our competitors today, but we are very happy with the transaction level, far ahead of expectations. So, customers are happy, driving as well efficiency. We are now accelerating this self-checkout program across B&Q. We continue to invest in IT. We, as well, are negotiating more lease re-gears. So, no, we are strongly committed on the plan in the U.K. Thank you, Georgina.

Thank you very much.

Any more questions on the phones at all, Maddy?

There are no further questions in the queue, so just to remind everyone, please press star, then 1 for questions.

We'll take that as a no then, Maddy. Let's just go back to the floor for a second just to check. Any final questions from here? No, I think we're all queuing, no doubt. Thierry, back to you for a final remark.

Very simply, it was a pleasure for Bernard and I to update you on our progress. I hope you see a stronger Kingfisher. We are now accelerating our investment for growth. And really looking forward to update you on Marketplace, Krufix in France, more trade business, more as well, more store in Poland. And looking forward to talk to you in the coming months. Thank you, everyone, for this morning. Thank you. Thank you much.