France pulls down Kingfisher results as group decides to pull out of Russia, Spain & Portugal

Kingfisher sales rose 1.2% to £3 billion in Q3 (up to 31 October 2018), down 1.3% like-for-like in constant currency, with weak sales in Castorama France pulling down the overall performance.

Year to date gross margin after clearance is up in the UK, Poland and Brico Dépôt France.

Kingfisher has made a strategic decision to exit Russia, Spain & Portugal to focus on its other markets.

Q3 trading highlights by division (in constant currencies):

Total sales +1.4% (LFL -0.7%)
B&Q UK & Ireland sales -2.8%. LFL -2.9% including -c.1.5% impact from the discontinuation
of showroom installation services
Screwfix sales +10.6%. LFL +4.1% with 9 new outlets opened during Q3

Total sales -3.1% (LFL -3.4%). Sales for the home improvement market (Banque de France
data(6)) were flat in Q3
Castorama sales -7.6%. LFL -7.3% reflecting continued weak footfall and the impact of
transformation-related activity
Brico Dépôt sales +2.4%. LFL +1.1% reflecting good growth from the new unified ranges,
which continue to re-energise the Brico Dépôt offer

Total sales in Poland +3.9% (LFL +1.4%) despite the introduction of new laws on Sunday trading
and against a strong comparative (Q3 17/18 LFL: +6.0%)

Véronique Laury, Chief Executive Officer, said:
“We continue to make progress on our ONE Kingfisher transformation. We remain on track to
achieve our key strategic milestones for the third year in a row, and increased our gross margin in
the quarter.

“Transformation on this scale is tough, and we are operating in a difficult retail environment. We face challenges and we are addressing them. Our main challenge is Castorama France and we shared our action plan to fix it at the half year. Our action plan is now implemented for this year. We have accelerated our move to an everyday low price strategy and have launched a new marketing campaign to make it visible to our customers, however there is no quick fix.

“We are committed to our plan and to building a strong business for the long-term. As part of this commitment, we have taken the decision to exit Russia, Spain and Portugal. This will allow us to apply our strategy with more focus and efficiency in our main markets where we have, or can reach, a market leading position and create good homes by making home improvement accessible for everyone.

“Finally, I’m pleased to announce we are also returning a further £50m via share buyback which
completes our £600m capital return commitment in the first three years of the plan.