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Kingfisher: Growth In Poland And Romania Offset By Iberia

Bricot Depot Romania

Kingfisher has reported on trading for the year ended 31st January, 2021.

Other International:

 

2020/21

2019/20

% Reported Change

 

% Constant

Currency

Change 

% LFL

Change

Sales (£m)

 

 

 

 

 

Poland

1,550

1,461

+6.1%

+8.0%

+4.9%

Iberia

310

326

(4.9)%

(7.0)%

(7.0)%

Romania

242

216

+12.1%

+11.8%

+10.8%

Other±

-

5

n/a

n/a

n/a

Other International (ex-Russia)

2,102

2,008

+4.7%

+5.6%

+3.5%

Russia

189

311

(39.4)%

(31.8)%

(8.8)%

Other International

2,291

2,319

(1.2)%

+1.2%

+2.3%

 

 

 

 

 

 

Retail profit (£m)

 

 

 

 

 

Poland

146

151

(3.7)%

(1.9)%

 

Iberia

3

2

+66.3%

+62.7%

 

Romania

(14)

(23)

+38.7%

+38.8%

 

Other±

-

(4)

n/a

n/a

 

Turkey (50% JV)

9

9

(2.7)%

+22.4%

 

Other International
(ex-Russia)

144

135

+6.1%

+10.0%

 

Russia

(3)

(12)

+85.7%

+83.9%

 

Other International

141

123

+14.5%

+17.8%

 

 

 

 

 

 

 

Retail profit margin %

 

 

 

 

 

Poland

9.4%

10.4%

(100)bps

(100)bps

 

Other International (ex-Russia)

6.8%

6.7%

+10bps

+30bps

 

Other International

6.2%

5.3%

+90bps

+90bps

 

         

± ‘Other’ relates to Screwfix Germany, where all 19 of its stores were closed during H1 19/20.

Other International (ex-Russia) total sales increased by 5.6% (LFL +3.5%) to £2,102 million, with growth in Poland and Romania offset by a decline in Iberia. Retail profit increased by 10.0% to £144 million, largely reflecting a lower retail loss in Romania. Including Russia, whose sale was completed on 30 September 2020, Other International retail profit increased by 17.8%. 

Sales in Poland increased by 8.0% (LFL +4.9%) to £1,550million, reflecting strong trading (in particular in Q2 and Q3 20/21, following COVID-related footfall declines in Q1 20/21). In addition, space growth contributed c.3% to total sales. LFL sales of weather-related categories increased by c.13% while sales of non-weather-related categories, including showroom, increased by c.4%. Poland’s e-commerce sales grew strongly in FY 20/21, increasing by 171% and representing c.4% of total sales (FY 19/20: 2% of total sales). Gross margin % decreased by 60 basis points, largely reflecting mix, price positioning, and higher distribution costs. Retail profit decreased by 1.9% to £146 million with gross profit growth offset by an increase in operating costs of 9.4%. Operating costs increased largely due to space growth, wage and general inflation, higher frontline staff incentives & bonuses, and COVID-related costs. This was partially offset by the benefit of a COVID-related employment support scheme. Three new stores were opened during the year, including a new medium-box format. 

In Iberia, sales decreased by 7.0% (LFL -7.0%) to £310 million, largely due to COVID-related temporary store closures in Spain (in H1 20/21), partially offset by a strong recovery in H2 20/21 (LFL sales +10.8%). Despite the impact of lockdowns on sales, operating costs were well controlled with retail profit increasing by 62.7% to £3 million. 

Romania sales increased by 11.8% (+10.8% LFL) to £242 million, driven by higher demand across all product categories and the full year benefit from the successful rebranding of former Praktiker stores to the Brico Dépôt banner. As a result, the business reduced its retail loss by c.40% to £14 million (FY 19/20: £23 million reported retail loss), helped by lower operating costs.

Romania currently prepares its financial statements to 31 December. For FY 21/22, Romania will migrate to Kingfisher’s financial reporting calendar, meaning Kingfisher’s Q1 21/22 results will include an additional month of results for Romania (i.e. January to April).  

As previously announced, Kingfisher completed the sale of Castorama Russia to Maxidom, a leading home improvement company in Russia, on 30 September 2020. Of the total consideration of £72 million, £57 million was received during the year, with the remaining £15 million to be received in equal instalments over the next two years. As a result of the timing of the transaction, Russia sales decreased by 31.8%, although on a LFL basis decreased by 8.8% to £189million. Up to 30 September, the business made a retail loss of £3million (FY 19/20: £12 million reported retail loss). 

In Turkey, Kingfisher’s 50% joint venture, Koçtaş, contributed £9 million of retail profit (FY 19/20: £9 million reported retail profit). 

Finally, in November 2020, Kingfisher acquired NeedHelp, one of Europe's leading home improvement services marketplaces. The consolidated results of the business for the two-month period post-acquisition are included in ‘Other International’ but, due to its size and rounding, do not appear in the tables above. 

Source : Kingfisher PLC

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22 March 2021

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