2020/21 annual report & accounts - Kingfisher plc

1 2020/21 annual report & accountsStrategic report 1 Kingfisher at a glance2 Financial highlights3 Chair s statement4 Chief Executive Officer s statement6 Group update (including progress on Powered by Kingfisher strategic plan)15 Managing the impact of Covid-1918 Business model20 Our markets22 People and culture25 Responsible Business 30 Trading review by division 33 Financial review40 Risks47 Viability statement49 Non-financial information statement 51 Companies Act Section 172 statementGovernance 52 Board of Directors55 Corporate Governance and Section 172 disclosures70 Nomination Committee report74 Responsible Business Committee report76 Audit Committee report82 Directors remuneration report108 Directors report111 Directors statement of responsibilityAccounts 112 Independent auditor s report to the members of

2 Kingfisher plc124 Consolidated income statement125 Consolidated statement of comprehensive income126 Consolidated statement of changes in equity127 Consolidated balance sheet128 Consolidated cash flow statement129 Notes to the consolidated financial statements168 Company balance sheet169 Company statement of changes in equity170 Notes to the company financial statements180 Group five-year financial summary181 Shareholder information183 Glossary187 Our own exclusive product brands ContentsOperating safely during Covid-19 Kingfisher stores are operating with strict social distancing and safety measures to protect customers and colleagues.

3 Read more about this on pages 15 to 17. Kingfisher at a glanceAll figures on this page relate to the year ended 31 January Financial Key Performance Indicator (KPI). For prior year comparison, see the Financial Review on pages 33 to Alternative Performance Measure (APM). See the glossary on pages 183 to 185 for definitions and reconciliations of Turkey joint venture not Total, not full-time B&Q UK & ireland 301. Screwfix UK & ireland 722. 6. Castorama 93. Brico D p t 121. The sale of our business in Russia was completed on 30 September 2020. Kingfisher plc is an international home improvement company with over 1,380 stores in eight countries across Europe.

4 We operate under retail banners including B&Q, Castorama, Brico D p t, Screwfix, TradePoint and Ko ta , supported by a team of 80,000 colleagues. We offer home improvement products and services to consumers and trade professionals who shop in our stores and via our e-commerce channels. At Kingfisher , our purpose is to make better homes accessible for ,3863 stores 80,0003,4 colleagues UK&Ireland46% 5,743mTotal sales 12,343mFrance35% 4,309mOther International19% 2,291m UK&Ireland68% 681mRetail profit 1,003mFrance18% 181mOther International14% 141mTotal sales1,3 Retail profit1,2 214 Spain28 France6 Portugal3UK &Ireland51,023 Poland83 Romania35 Turkey1401 Financial highlights and key performance indicators (KPIs)For the year ended 31 January 2021 1.

5 Variance in constant Alternative performance measure (APM). See the glossary on pages 183 to 185 for definitions and reconciliations of APMs. 3. The Board has proposed a total dividend per share of in respect of FY 20/21, comprising an interim dividend of in respect of the six months ended 31 July 2020 (FY 19/20 interim dividend: ) and a final dividend of (FY 19/20 final dividend: nil). Evaluation of KPIs against our strategy can be found in the Financial review on pages 33 to profit / margin2 Retail profit2 / margin2 Adjusted pre-tax profit2 / margin 12,343m+ + profitBasic earnings per share (EPS) 1,003m+ +130bps1 Dividend3 Free cash flow2 Pre-tax 756m+ 592m2019/20: + : and bank overdraftsNet debt2 Net leverage 1,136m2019/20: debt2 to EBITDA22019/20: (1,394)m2019/20: (2,526) : 938m2019/20.

6 191m 786m+ + +170bps 4,573m+ s statementIn last year s annual report , I paid tribute to the 80,000 colleagues who make up the Kingfisher organisation, thanking them for their extraordinary efforts on behalf of the company. Twelve months on and I want again to take the opportunity to express my gratitude to them for their remarkable support and commitment during the pandemic. Coronavirus has placed acute stress on every part of our society, but it is on an individual level that its impact is most keenly felt. Anxiety and uncertainty are widespread, precious links with family and friends have been broken and a great number of people have been badly affected.

7 Our thoughts are with all those within the Kingfisher community who have been impacted. In this most challenging of environments our teams have worked tirelessly to keep the business open, making available products that keep homes safe, warm and operating efficiently. We have tried our best to support the response efforts of the authorities and the communities in which we operate. We made community investments worth over million in the year, including the donation of significant amounts of vital personal protective equipment for frontline healthcare teams. As optimism grows for an end to the pandemic it is right that we acknowledge these efforts and above all the tireless contribution of our people.

8 They have been most of our markets and for most of the time during the pandemic, Kingfisher s banners have been designated as retailers of essential products with the corresponding right to remain open. In the first few weeks of the crisis, we chose to close the majority of our stores for several weeks despite this essential designation to make sure we were set up operationally and as safely as we could be. This was the right decision, but it did create considerable financial strain on the organisation. Our business leaders moved quickly during this period to conserve cash and reduce discretionary costs wherever possible.

9 They also showed great agility in bringing forward at record speed innovative new working practices and breakthrough developments in our e-commerce operations. These efforts put the company in a good position not just to manage such a rapidly changing environment but to improve our competitive position in the marketplace. The strong relative performances of all our banners over the last twelve months is testament to their company was grateful for the timely financial support offered through various Government schemes. At the time these were important and provided welcome reassurance. As the pandemic continued it became increasingly clear that trading was strong enough for us not to need Government support, and we were pleased to be able to return all furlough payments and business rates relief in the UK and Republic of ireland .

10 In addition, we were able to repay all outstanding Government corporate loan facilities in the UK and France. Our gratitude June we announced our new strategic plan, Powered by Kingfisher which is covered in the CEO s review on page 4, and set out in detail in the Group update section of this document on pages 6 to 14. Under the outstanding leadership of Thierry Garnier and his new executive team, the company is now fully underway with the new strategy and we are already seeing its benefits. Our new strategy will make an increasing difference as we emerge from the crisis stronger, more aligned and operating in a way that makes the very best use of the scale and resources of the company.