Kingfisher PLC 17 February 2005 EMBARGOED UNTIL 0700 HOURS Thursday 17th February 2005 Kingfisher plc Fourth Quarter sales update for the 13 weeks ended 29 January 2005 Group Financial Highlights Fourth Quarter • Sales up 7.1% to £1.76 billion (2004: £1.65 billion), up 6.7% in constant currency • Like-for-Like (LFL) sales up 0.6% Twelve months to 29 January 2005* • Sales up 8.7% to £7.65 billion (2004: £7.04 billion), up 9.9% in constant currency • Like-for-Like (LFL) sales up 3.9%. *All figures for the prior year are for continuing home improvement businesses only. They exclude businesses sold or demerged during 2003/04. NOTE: In the remainder of the document all sales growth figures are in constant currencies unless otherwise stated. Gerry Murphy, Chief Executive, said: "Kingfisher delivered good fourth quarter sales growth in France, Italy and China, offset by weaker performances in a more challenging UK market and in a Polish market impacted by last year's VAT changes. For the full year, Kingfisher delivered a solid overall performance, growing total sales by 9.9% and like-for-like sales by 3.9%. "With a continued focus on margins, costs and cashflow, Kingfisher expects to announce pre-exceptional profit before tax in line with the current consensus of analysts' estimates on 17 March 2005." Company Profile Kingfisher plc is Europe's leading home improvement retailer and the third largest in the world, with nearly 600 stores in nine countries in Europe and Asia. Its main retail brands are B&Q, Castorama, Brico Depot and Screwfix Direct. Kingfisher also has a 21% interest in, and strategic alliance with, Hornbach, Germany's leading DIY Warehouse retailer, with 117 stores across Europe. UK & Ireland Consumer demand weakened further in the quarter with British Retail Consortium data for the three months to January showing a decline in "other non-food" like- for-like sales of 0.4%, following 1.7% growth in the previous quarter. B& Q's total sales grew 2.6% to £914.7 million, although LFL sales declined by 1.2%, reflecting weakening consumer demand and an increasingly competitive trading environment. Sales of some categories due for range review in 2005, such as flooring, lighting and wall decorations, declined. Sales of kitchens and bathrooms grew slightly against a strong quarter last year and categories which had been recently refreshed (e.g. paint and radiators), or where prices were lowered (e.g. building materials), performed strongly. Ahead of the key spring season, horticultural and garden leisure ranges have been substantially renewed, and own-brand paint, flooring and showering ranges improved. Innovative and price-competitive new products such as Airforce DIY fixed air conditioning, easy to lay Edge tiling and Speedstone granite worktops are being introduced. A major Every Day Low Pricing (EDLP) marketing campaign - "Price Reverse" - was launched in early February featuring 5,000 price reductions to consolidate B&Q's price leadership. In the fourth quarter, B&Q opened two new format Warehouse stores. These "stretch" stores are testing new approaches to providing home improvement inspiration to consumers and a more compelling offer to B&Q's skilled trade customers. The mini-Warehouse conversion programme continued to deliver strong sales uplifts. There were 63 mini-Warehouses trading at the end of the quarter. B&Q's overhead efficiency drive continued in the quarter, but the benefits did not fully offset the weaker sales and price reductions in the period. Following the commissioning of its new fulfilment centre, Screwfix Direct's call centre and internet site were fully operational from mid-December with positive sales growth recorded since then. France According to Banque de France, DIY comparable store sales growth was 2.6% in the fourth quarter. Kingfisher's total sales grew 8.9%, 5.0% LFL, with Brico Depot performing particularly strongly in a discount-driven French consumer market. Castorama's sales declined 0.7% to £346.6 million, LFL sales down 0.9%, due to disruption caused by the earlier start of the 2005 revitalisation programme with seven stores affected during December and January, and preparation across the chain for a major relaunch of decorative ranges in the current quarter. Showroom sales were also weak ahead of a major relaunch in 2005. Stores that have been refurbished in 2004 into the new format performed well, as did new ranges of gardening equipment, Christmas decorations and indoor heating equipment. With its powerful and popular hard discount offer, Brico Depot sales grew strongly, up 26.6% to £238.2 million, up 16.0% LFL. All categories performed well. The performance was boosted by further promotional mailings, which built upon the success of Brico Depot's first fully national catalogue in April 2004. Rest of World Total Rest of World sales were £213.0 million, up 26.6% with four new stores opened in the period. LFL sales declined by 0.7% due entirely to weakness in Poland. Castorama Poland sales were £79.8 million, up 2.2%. LFL sales declined 14.2% against a very strong comparative (+19.5% LFL) caused by customers purchasing ahead of higher VAT rates which came into effect with EU accession in May 2004. The higher VAT rates, inflation and interest rates have weakened overall consumer spending and Castorama Poland is performing well in a difficult market. Castorama Italy sales were £55.9 million, up 23.7% (up 3.9% LFL) with continued strong performance in all product categories. B&Q China sales were £69.8 million, up 61.6% (up 16.8% LFL). Growth was driven by increasing trade sales and stronger installation services. In Spain, Brico Depot opened its fourth store. Enquiries: Ian Harding 020 7644 1029 Director of Communications Nigel Cope 020 7644 1030 Head of External Communications Heather Ward 020 7644 1032 Head of Investor Relations Further copies of this announcement can be downloaded from www.kingfisher.com For the 13 weeks ended 29 January 2005 Retail sales £m 2004/5 2003/4 % change (reported) % change % like-for-like (constant) change B&Q 914.7 891.5 2.6% 2.6% (1.2)% Screwfix Direct 52.0 56.6 (8.1)% (8.1)% (8.1)% Total UK & Ireland 966.7 948.1 2.0% 2.0% (1.7)% Castorama France 346.6 347.5 (0.3)% (0.7)% (0.9)% Brico Depot 238.2 187.8 26.8% 26.6% 16.0% Total France 584.8 535.3 9.2% 8.9% 5.0% Castorama Poland 79.8 70.5 13.2% 2.2% (14.2)% Castorama Italy 55.9 45.2 23.7% 23.7% 3.9% B&Q China 69.8 46.3 50.8% 61.6% 16.8% Other Int'l (1) 7.5 1.9 n/a n/a n/a Rest of World 213.0 163.9 30.0% 26.6% (0.7)% Total 1,764.5 1,647.3 7.1% 6.7% 0.6% For the 52 weeks ended 29 January 2005 Retail sales £m 2004/5 2003/4 % change (reported) % change % like-for-like (constant) change B&Q 4,087.7 3,896.8 4.9% 4.9% 1.3% Screwfix Direct 228.6 220.6 3.6% 3.6% 3.6% Total UK & Ireland 4,316.3 4,117.4 4.8% 4.8% 1.5% Castorama France 1,571.1 1,541.8 1.9% 4.4% 2.6% Brico Depot 975.6 786.0 24.1% 27.1% 17.7% Total France 2,546.7 2,327.8 9.4% 12.0% 7.7% Castorama Poland 321.9 285.6 12.7% 16.1% 2.9% Castorama Italy 229.5 173.7 32.1% 35.3% 6.1% B&Q China 211.7 131.5 61.0% 78.5% 15.5% Other Int (1) 23.5 2.2 n/a n/a n/a Rest Of World 786.6 593.0 32.6% 38.6% 6.5% Total 7,649.6 7,038.2 8.7% 9.9% 3.9% (1) Other international represents Brico Depot in Spain This information is provided by RNS The company news service from the London Stock Exchange