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Kingfisher: International Performance 2019/2020

Castorama 725 x 500.jpg

Kingfisher has reported on 2019/2020 performance, covering the full year ended January 2020. This page features news and information pertaining to kingfisher's International business - click here to see the more details on group performance.

Kingfisher France

Kingfisher France sales decreased by 3.2% (-3.2% LFL) to £4,082 million, although Q4 saw an improved performance compared to the first nine months of the year with sales up 3.1% (+3.3% LFL).  Q4 sales were aided by better stock availability, the reintroduction of promotion-based trading events, and the reintroduction of some local ranges.

According to Banque de France data, sales for the home improvement market in France were up c.2% for the year (+4.7% in Q4). The improvement in sales in Q4 was in part due to prior year Q4 sales being impacted by c.-3% from national demonstrations (known as ‘gilets jaunes’), although this was partly offset by nationwide strikes in France in December 2019 and January 2020. Gross margin % increased by 40 basis points in the year, reflecting lower overall promotional activity at Brico Dépôt, partly offset by logistics & stock inefficiencies (mainly in Castorama France). Costs reduced, reflecting store closures and staff reduction at Castorama France in addition to lower transformation costs. Despite this retail profit decreased by 9.7% to £164 million, reflecting lower overall sales.

Castorama total sales decreased by 3.3% (-3.3% LFL) to £2,145 million, reflecting price
repositioning (c.-1% impact on LFL sales) and the impact of transformation-related activity (c.-2% impact on LFL sales). LFL sales of weather-related categories were down 4.1% and sales of nonweather-related categories, including kitchen and bathroom, were down 3.2%.

Brico Dépôt total sales decreased by 3.1% (-3.1% LFL) to £1,937 million driven by an overall reduction in promotional activity, which impacted LFL sales by c.-3%. In constant currency, gross profit and gross margin % both increased year on year. 

Across the two businesses, space remained broadly flat, with Castorama closing one store and Brico Dépôt closing two stores in FY 19/20.

Other International total sales decreased by 0.2% (-0.8% LFL) to £2,319 million, with growth in Poland and Romania offset by declines in Russia and Iberia. Retail profit decreased by 11.5% to £123 million, reflecting a decline in Poland and an increase in combined retail losses in Romania and Russia.

Sales in Poland increased by 4.0% (+1.6% LFL) to £1,461 million. Four new stores were opened during the year, representing a c.6% increase in space. The removal of one further Sunday of trading each month (three non-trading Sundays from January 2019; previously two) had an estimated adverse impact on LFL sales of c.1%. In addition, a softer market  backdrop in H2 impacted annual LFL sales by c.-1%. LFL sales of weather-related categories were up 3.4% while sales of nonweather-related categories, including kitchen and bathroom, were up 0.8%. Gross margin % was down 100 basis points year on year reflecting higher clearance and increased promotional activity in response to a softer market. Retail profit decreased by 7.7% to £151 million reflecting sales growth offset by a decline in gross margin and higher costs. The increase in costs was largely driven by

wage inflation, digital costs and pre-opening costs, partly offset by lower transformation costs.

In Romania sales increased by 6.1% (+8.8% LFL) to £216 million reflecting improved and expanding ranges. The business made a retail loss of £23 million for the year (FY 18/19: retail loss of £16 million), largely driven by losses in the former Praktiker stores. During the year, Romania completed the rebranding of all former Praktiker stores to Brico Dépôt, and integrated the business’ product range, IT system and head offices. Romania plans to consolidate its two distribution centres later this year. Space decreased by c.7% in the year due to three store closures. 

In Iberia sales decreased by 4.7% (-4.7% LFL) to £326 million and the business made a retail profit of £2 million (FY 18/19: retail profit of £2 million). In Russia sales decreased by 13.9% (-10.8% LFL) to £311 million. The business reported a retail loss of £12 million (FY 18/19: retail loss of £5 million) reflecting a challenging business environment and two store closures. As at the year-end, the Russian business was classified as ‘held for sale’ in the Group’s balance sheet.

In Screwfix Germany, all 19 stores were closed during the first half of the year and the business reported a retail loss of £4 million (FY 18/19: retail loss of £14 million). 

In Turkey, Kingfisher’s 50% JV, Koçtaş, contributed retail profit of £9 million (FY 18/19: retail profit contribution of £9 million).

Read part one of the full publication here.

Read part two of the full publication here.

Source : Kingfisher

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17 June 2020

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