Kingfisher PLC Fireside Chat with JPMorgan Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Georgina Johanan - JPMorgan Chase & Co. - Analyst : Thank you. So in summary, it's reasonable at this stage to expect sort of consensus to move down by sort of a high single digit percentage for next year, and of course exploration of sort of incremental OpEx opportunities or other opportunities progress as time goes on is. Is that the right way to just sort of think about it on a headline basis?

Question: Georgina Johanan - JPMorgan Chase & Co. - Analyst : That makes sense. Thank you. And then I guess just before we move on in terms of kind of the incremental OpEx initiatives that you're obviously thinking about as a result of what we've seen from the budget, perhaps you can just give us some areas of where they could come from. How sort of short term versus more structural they are and so on. That would be really helpful.

Question: Georgina Johanan - JPMorgan Chase & Co. - Analyst : Makes sense. Thank you very much. And just a couple more before we sort of move on to maybe some kind of broader questions. Just one thing that certainly sort of -- I picked up as I was sort of going through the model and the numbers today was when you look at the Brico run rate in particular as much as it has sort of improved sequentially, actually, when you look at it on, maybe a stacked basis, be that two year or be that five year, it actually looks like a fairly soft result, taking those comparatives into account. Is there sort of something specific that was impacting Brico in the quarter or just something to bear in mind there?

Question: Georgina Johanan - JPMorgan Chase & Co. - Analyst : And then just final one on sort of the numbers specifically and impacts on the numbers following today. I think just -- how should we be thinking that about it, sort of in terms of cash with regards to next year as well? And then the follow on from that is of course, the buyback, like should we be sort of for modelling purposes like reloading that $300 million buyback or just applying a little bit more caution there? Sort of how would you advise that? We think about that. It's always a question for the Board.

Question: Georgina Johanan - JPMorgan Chase & Co. - Analyst : That's a helpful reminder. Thank you. Thank you both. And then two very quick -- two very quick short term ones before we move on. So first of all, I'm just mindful of the obviously very sad flooding that's taking place in Spain at the moment. I mean, I know that your [Iberian] business is kind of a, relatively small part of the business, but maybe it would be useful for everyone just to call out any impact from that or not as the case may be?

Question: Georgina Johanan - JPMorgan Chase & Co. - Analyst : Thank you. And then final short term one was just on Poland. I'm mindful of the headlines talking about that Sunday trading ban potentially being reversed or relaxed. Maybe you can just remind us of whether we should sort of be expecting if it does come through, actually support the Kingfisher's top line or if it all just comes out in the wash in terms of timing?

Question: Georgina Johanan - JPMorgan Chase & Co. - Analyst : It's very clear. Thank you. And then just moving on -- I think a question that probably everyone has is just with regards to the sort of consumer mood, more broadly both in the UK and in France and I guess how it's been evolving, since say September with regards to the budget and so on, maybe you can just talk a little bit about what you're, what you're seeing there, please.

Question: Georgina Johanan - JPMorgan Chase & Co. - Analyst : Let's cover all geographies, why not? Why not that would be helpful.

Question: Georgina Johanan - JPMorgan Chase & Co. - Analyst : Thank you. I think that's useful run through. And then maybe just more from a sort of competitive landscape perspective. I mean, I'd say that in the UK, we are seeing changes that homebase, store base is reducing. Obviously, you've sort of got the deep value players, they were taking share in the category, maybe that's reduced a little bit. Then from your perspective, Screwfix taking share tool station, arguably taking share as well. So there is kind of quite a bit going on there. I mean, would you say on balance the environment from a sort of competitive and structural perspective is actually becoming more favorable for you in the UK or is that a little bit of an over --

Question: Georgina Johanan - JPMorgan Chase & Co. - Analyst : Okay. That's helpful. Thank you. And then maybe just moving on to talk about the French performance improvement plan. I know that there's lots of kind of -- lots of different things going on there, but maybe you can talk about sort of some of give some sort of, tangible examples of what's been done so far and what, what you're seeing so far. And I think you also mentioned today that the franchise tests, they've now been agreed, they'll be start when they'll be starting and so on. So maybe just a bit more color around that would be helpful please.

Question: Georgina Johanan - JPMorgan Chase & Co. - Analyst : Thank you. And just, I guess two follow ups there. Correct me if I'm wrong, but I think you previously said that reaching the 5% margin was more about what you were doing internally and the 7% was more about, leverage and market recovery. Is that still the right way to think about it, given sort of developments that we've seen since you first gave that those targets? And also do you still feel, very -- I mean, it sounds like you're talking about an acceleration. It sounds like you still feel very confident in that range. Is that the right takeaway?

Question: Georgina Johanan - JPMorgan Chase & Co. - Analyst : And the other follow up question I had was just around the marketplace actually, because obviously you mentioned the launch of that into Casto and I know B&Q has gone, really, really well, in terms of that initiative. Should we be thinking about sort of a similar trajectory at Casto or actually, I'm mindful that there is a bit more sort of, I guess direct competition, I think [Lua Milan]. I know my pronunciation, there is horrible. I apologize everyone, but I know they have a marketplace as well, I think already. So do you think that will hold, hold back the growth a little bit or that's not what you're seeing?

Question: Georgina Johanan - JPMorgan Chase & Co. - Analyst : Thank you very much. I have a bunch more questions, but I'm just mindful that I've had a few questions coming through. So I'm just going to ask a few of those, just a friendly reminder to everyone. If they would like to ask a question directly, please just feel free to raise your hands. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 25, 2024 / NTS, JPM.N - Kingfisher PLC Fireside Chat with JPMorgan In the meantime, so I'll just jump to a couple of questions that I received if that's all right. So a question just on pricing and it sounds like the outlook, there's a little bit uncertain at this stage still. But an investor asking saying, B&M is sort of clearly saw some meaningful deflation for their general merchandise business this year and they're attributing that to negotiations with Chinese suppliers. Have you or sort of your industry more broadly seen any sourcing deflation? And how would that impact the top line and the outlook there?

Question: Georgina Johanan - JPMorgan Chase & Co. - Analyst : More from Asia than Europe. It makes sense. And then just a very brief question, when you talk about partial recovery of the $45 million of pressure, what proportion of this do you think you can offset?

Question: Georgina Johanan - JPMorgan Chase & Co. - Analyst : Yeah, I mean, presumably it's sort of straightforward to say if you were, if all of a sudden the demand environment sort of steps up unexpectedly, you'd be able to mitigate more than you previously thought presumably. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 25, 2024 / NTS, JPM.N - Kingfisher PLC Fireside Chat with JPMorgan

Question: Georgina Johanan - JPMorgan Chase & Co. - Analyst : That makes sense. Makes sense. I've had another question a completely different tack actually just with regards to [toolstation] and Screwfix in France and obviously toolstation struggled to make that format work in the French market. So just asking if you could remind us of what the differences are in that regard in terms of why Screwfix should be successful. And also just asking when we should expect to see an acceleration in that store rollout. And I think I'll wrap one of my own questions into that as well if I may, which was just around the advertising work that you were doing. I think there were some areas in France where you have sort of been a bit more proactive in terms of brand awareness in Screwfix. And maybe you could just talk about how that's progressing and what you're seeing in sort of sales densities in those stores as well, please.

Question: Georgina Johanan - JPMorgan Chase & Co. - Analyst : And maybe that's a nice segue actually into sort of trade initiatives more broadly in France because obviously that's been something that's worked really, really well in the UK and sort of provided a lot of resilience, I think in the UK, in sort of the recent, recent past where the market's been softer. So maybe you could just update on what you're doing on sort of trade initiatives in the other two banners. The main banners in France.

Question: Georgina Johanan - JPMorgan Chase & Co. - Analyst : And just to follow up if I may -- maybe it's maybe it's a difficult question or an unfair question, but you mentioned Home Depot. So I think it would be remiss of me not to mention it. But where -- what do you see that they are still doing and that are drivers of their success, that things that Kingfisher is not doing at the moment, but potentially could, in the future because I know that it's something I not regularly get asked about, but every now and then get asked about and sometimes it can be a difficult one to answer.

Question: Georgina Johanan - JPMorgan Chase & Co. - Analyst : Okay. So actually if you were going to give sort of one answer to that question, it would be trade penetration basically and you're on a journey.

Question: Georgina Johanan - JPMorgan Chase & Co. - Analyst : No, that's really, really helpful. That's really helpful. Thank you. And I have had another question which I think is actually a really difficult one to answer. But I'm going to, I'm going to ask which is, or you might have different views on this, which is what is your view on the timing of a potential trough in France, in the French market?

Question: Georgina Johanan - JPMorgan Chase & Co. - Analyst : Okay. And then a final question that I've had coming through from investors and then I've got one more is just around the $120 million of savings this year. And I think there was also some phasing of tech spend that you talked about at the half year stage. So an update on the tech spend, please and then with the $120 million just how you're tracking and whether actually there's the potential for you to do a little bit better than that this year is kind of, as the year progresses.

Question: Georgina Johanan - JPMorgan Chase & Co. - Analyst : Great. And I've got one final one to sort of just finish this off on. But operator, I just wanted to check if you don't mind. I can't see any hands raised at the moment, but I just wanted to check that you can't, you can see the same thing as me, please.

Question: Georgina Johanan - JPMorgan Chase & Co. - Analyst : Great. Just by making sure that it wasn't me being useless at technology. And so on that note, actually, I know you've talked about leveraging AI around the discounting tool and the promotional tool at B&Q for example. But are there any other sort of main initiatives or ways that you're planning on using AI in the near term that we could be thinking about or better understanding when we're thinking about the business on a sort of 2 years to 4 years view.

Question: Georgina Johanan - JPMorgan Chase & Co. - Analyst : That's very clear. Thank you. So I think from my perspective that's covered the questions that I have planned for today. Unless there's anything you'd like to sort of any remarks you'd like to close with?

Question: Georgina Johanan - JPMorgan Chase & Co. - Analyst : Great. Well, thank you so much for joining and for your time and thank you to everybody else for joining as well. And of course, if you do have any follow up questions either for me or the Kingfisher team, please feel free to send them through either to me or the IR team. So thank you very much, everyone. Hope to see you all soon.