Kingfisher PLC 24 May 2006 EMBARGOED UNTIL 0700 HOURS Wednesday 24 May 2006 Kingfisher plc First quarter results for the 13 weeks ended 29 April 2006 Group Financial Summary Retail Sales (1) % Total % LFL Retail Profit (2) % Total 2006/07 2005/06 Change Change 2006/07 2005/06 Change £m £m (Reported) £m £m (Reported) UK 1,029 1,089 -5.5% -6.8% 21.9 73.7 -70.3% France(3) 701 652 7.6% 1.7% 40.2 40.2 - Rest of Europe (3)(4) 206 156 32.4% 10.2% 14.0 12.6 11.1% Asia (5) 84 44 90.7% 11.8% (7.7) (1.2) n/a Total 2,020 1,941 4.1% -2.0% 68.4 125.3 -45.4% (1) Joint Venture (JV) sales are not consolidated. (2) Retail profit is stated before central costs, exceptional items and share of joint venture and associate interest and tax. (3) 2006/07 £1 =1.4525 euro: 2005/06 £1 = 1.4534 euro (4) Rest of Europe includes Castorama Poland, Castorama Italy, Brico Depot Spain, B&Q Ireland, Castorama Russia, Koctas JV in Turkey and Hornbach in Germany and central Europe. (5) Asia includes B&Q China, B&Q Home South Korea and B&Q Taiwan JV. • UK and France sales impacted by cold weather and a late start to the spring season • B&Q's programme to improve service, choice, value and store environment on track • Kingfisher again outperformed the French market • Rest of Europe performed strongly, first store in Russia now open • Asia sales boosted by last year's OBI acquisition and new store openings • Net debt at 29 April 2006 of £1,209 million (28 January 2006: £1,355 million) Gerry Murphy, Group Chief Executive, said: "Kingfisher's first quarter again featured solid international performances and a very weak UK market. "Kingfisher's international development continued with five new stores opened, including the first store in Russia. In France, Kingfisher's twin-track strategy is working well with Castorama and Brico Depot gaining ground in a fairly sluggish market. Overall Kingfisher's international sales and profit growth, before increased development costs, was strong. "However, the UK home improvement market has continued to be very tough in 2006. The first two months of the quarter were particularly weak as persistent cold weather in Europe delayed the start of the key garden and outdoor season and a major fire temporarily disrupted B&Q's kitchen deliveries. "Overall, the UK market remains very promotional and weather sensitive and it is not clear that stronger holiday sales represent an underlying recovery in demand. However, B&Q made further progress with its programme to improve customer service, product choice, value for money and store environment." UK (Total sales -5.5%, -6.8% LFL, Retail Profit -70.3%) B&Q total sales fell 7.7% to £945.4 million (-8.8% LFL). Sales of gardening and outdoor products were significantly impacted by unusually cold weather in March. A major fire at B&Q's kitchen distribution centre in February disrupted kitchen sales and extended lead times for deliveries for much of the quarter (reducing reported first quarter LFL sales by around 2%). Sales over the Easter and Bank Holiday period were stronger, benefiting from targeted promotional activity, improved weather and a recovery in kitchen orders. Retail profit of £18.0 million (2005/06: £71.2 million) reflects the lower sales and a three percentage point fall in gross margins. Around a third of the fall reflects the remainder of the major stock clearance programme started last year. The balance was mostly due to ongoing promotional activity and price reductions yet to annualise against initiatives launched in the second half of 2005/06. Underlying cost inflation, excluding store openings, was 4% before £12 million savings in central office, stores and supply chain costs. Progress continued with the action programme launched last year. 'Service Squads' have now been extended to over 200 stores and the recently launched tile range is performing well. Eight stores were converted to mini-Warehouses and one Warehouse store was downsized. Significant progress was made on format development with the opening of a new concept store in Luton, which has been well-received by customers. Screwfix Direct sales were up 26.0% to £81.5 million (+23.3% LFL) and retail profit more than doubled to £5.4 million. New ranges of bathroom suites and showers and own-brand power tools performed well. Six Trade Counters opened in the quarter, taking the total to 13. Early trading at the two new Trade Depot branches is encouraging and a further three are planned to open in the balance of the year. Development costs of £1.5 million arose in the quarter. FRANCE (Total sales +7.6%, +1.7% LFL, Retail Profit flat) Castorama sales grew by 3.5% to £395.8 million (+2.2% LFL). Sales of new ranges of wooden flooring, kitchens and bathrooms were particularly strong but poor spring weather held back sales of gardening and outdoor products. Two stores were relocated and one new store opened. Three Castorama stores were closed prior to their re-opening as Brico Depots in the summer. Brico Depot sales grew 13.3% to £305.1 million (+1.0% LFL) against strong comparatives (+10.9% LFL in 2005/06). Two new stores were opened and a larger and more widely distributed annual catalogue was launched. Overall, retail profit in France was flat at £40.2 million. Higher sales and supply-side benefits were offset by £5 million higher costs of store pre-opening, IT development and store transfers. Excluding these costs, underlying retail profit was ahead 13%. REST OF EUROPE (Total sales +32.4%, +10.2% LFL, Retail Profit +11.1%) Castorama in Poland and Italy both delivered solid sales and retail profit growth despite challenging local markets. Store expansion continued with three stores opening in the quarter including Kingfisher's first Castorama store in Russia. Retail profit for the Rest of Europe was up 11.1% at £14 million after £2.1 million higher start-up costs in Spain and Russia. ASIA (Total sales +90.7%, +11.8% LFL, Retail Loss £(7.7)m) B&Q China sales growth was driven by new stores, the OBI China stores acquired last year and LFL growth of 11.8%. One store opened, taking the total to 49. The programme to integrate OBI China is almost complete with all 13 of the original trading stores fully revamped at the end of April. Retail losses in Asia of £7.7 million include £3 million from the OBI stores acquired last year and £0.6 million additional development costs in South Korea. SALES DATA Retail Sales % Total % Total LFL 2006/07 2005/06 Change Change (constant Change £m £m (Reported) currency) B&Q 945.4 1,024.6 (7.7)% (7.7)% (8.8)% UK Trade (1) 83.8 64.7 29.5% 29.5% 23.3% Total UK 1,029.2 1,089.3 (5.5)% (5.5)% (6.8)% Castorama 395.8 382.3 3.5% 3.5% 2.2% Brico Depot 305.1 269.3 13.3% 13.3% 1.0% Total France 700.9 651.6 7.6% 7.5% 1.7% Castorama Poland 96.6 75.5 27.9% 21.8% 14.1% Castorama Italy 71.5 56.6 26.3% 26.3% 8.6% Other Europe (2) 37.8 23.4 61.5% 61.5% 0.4% Total Rest of Europe 205.9 155.5 32.4% 29.3% 10.2% B&Q China 82.0 44.1 85.9% 66.3% 11.8% B&Q South Korea 2.1 - - - - Total Asia 84.1 44.1 90.7% 70.6% 11.8% Total Group 2,020.1 1,940.5 4.1% 3.6% (2.0)% (1) includes Screwfix Direct and Trade Depot (2) includes Brico Depot Spain, B&Q Ireland and Castorama Russia STORE DATA Store numbers Selling space (000s sq.m.) B&Q 322 2,279 Screwfix Direct 13 1 Trade Depot 2 9 Total UK 337 2,289 Castorama 100 962 Brico Depot 75 388 Total France 175 1,350 Castorama Poland 30 257 Castorama Italy 27 171 Castorama Russia 1 9 Brico Depot Spain 7 33 B&Q Ireland 7 35 Koctas Turkey 8 46 Total Rest of Europe 80 551 B&Q China 49 478 B&Q South Korea 1 7 B&Q Taiwan 21 97 Total Asia 71 583 Total 663 4,772 Kingfisher plc is Europe's leading home improvement retail group and the third largest in the world, with over 660 stores in 11 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 over 120 stores in Germany and neighbouring countries. Enquiries: Ian Harding, Group Communications Director 020 7644 1029 Nigel Cope, Head of Communications 020 7644 1030 Heather Ward, Head of Investor Relations 020 7644 1032 Further copies of this announcement are available at www.kingfisher.com or by application to: The Company Secretary, Kingfisher plc, 3 Sheldon Square, London, W2 6PX. This information is provided by RNS The company news service from the London Stock Exchange