H1 20/21

Sep 22, 2020

Good morning, everyone, and thank you for joining us today. I'm Pierre Garnier, CEO of Kingfisher, and I'm here with our CFO, Bernard. But we are still a lot to meet in person today. And are conducting this presentation virtually from our offices in Paddington. But we are happy to be with all of you this morning and looking forward to updating you on our progress in 2020. Our agenda for today will start with an update on our operations and strategy. 1st, we are managing the ongoing impact of COVID. Then the progress report on our fixed and focus in 2020 priorities And finally, a recap of the Powerback Infisher plan, which we laid out in June and some headlines on progress we have made in the first half of the year. Bernard will then present our financial performance position before we open the meeting up for on the past few months. Starting with our industry, there can be no doubt that the very specific nature of this crisis has driven up demand within the home improvement market. We believe there are 5 reasons for this. Firstly, customers are spending more time at home. 2nd, there are fewer leisure options available to them. And have traveled less. And many have we discovered the pleasure of DIY as a hobby. 3rd, consumers have made more discretionary spend available for home improvement. 4th, more people are working from home meaning finding new ways to improve or use space and therefore new needs for home improvement. And finally, the impact of lock down measures temporarily depressed demands for do it for me and favored do it yourself. The crisis has also clearly accelerated the trend of people shopping online. Enfisher's e commerce sales search at two four times in April and continues to see strong growth of above 2 times compared to pre COVID rates despite the restart of in store purchasing. And finally, as people emerge from confinement into an economic downturn we'll see a search for value for money. We already offer a price index of $100 or less versus closest competitors in all key banners. And we will use the power of our own exclusive brands or OEB and our discounted banners to do more. Our top line growth has been supported by the strong market demand. However, in parallel, through our new strategic direction, our retail banners have formed new ways to meet these demands and serve their community that played through their diverse strength So whether you are a deal buyer, a threat person, someone who wants choice, value service of convenience, we have found a way to serve you. And doing so, we believe that we have strengthened our market position. Given all the challenges we have faced, we are pleased that our H1 performance was resilient, with a strong sales recovery in Q2. Our profit and cash performance does also include benefits which will reverse or not recur and we'll be very transparent about this letter in the day. While it is still too soon, to call a normalized pattern of demand and economic uncertainty must make us cautious the past 4 to 5 months give us confidence. The fundamentals of our market are strong, and we have demonstrated our ability as a group to adapt and trade through challenging times. We are convinced that the crisis reinforces our strategic direction. In fact, it pushes us to be bolder. In areas such as e Commerce, which stores at the center, the importance of a discounted banner. And value for Monet who are already and being simpler and leaner. There is still much work to do, but as a team, We feel encouraged by these results and are confident in the opportunities ahead of us. So turning to Slide 6 and now we continue to manage the impact of COVID on our business and our stakeholders. Even much of this has been disclosed already, let me just remind you of the key points. From the outset of the pandemic our priority was to act responsibly towards our colleagues, our customers, our communities as a retailer of essential goods, and making difficult decisions protect our business for the long term. All stores in our largest market at essential status from day 1, but we decided to keep them shut at the start of confinement and reopen only when it was safe to do so. We have also been donating PPE to healthcare workers and charities and in recognition of their hard work. We have paid additional bonuses to frontline colleagues. In addition to successfully implementing strict social distancing and safety measures, our teams were able to adapt our operating model quickly rapidly accelerating IT, supply chain, logistics and process changes to meet unprecedented levels of online demand. This all took place against the backdrop of stringent cost control and cash mitigation actions with a particular focus on the management of our orders and inventories. As a result, we have been able to limit the financial impact of COVID to date and our business continues to be under sound footing. We have access to over £3,700,000,000 of cash resources providing us with significant financial flexibility and liquidity headroom. Before I move on I would like to say a huge thank you to all our colleagues. We have continued to go above and beyond towards such a challenging period, their drive and determination has been humbling to witness. When I joined Kingfisher in late September last year, my immediate priorities were to develop a long term strategic plan while also taking early decisions to focus and fix the business which are summarized beyond Slide 7. These actions have had a positive impact on our business setting the path for the implementation of our new plan, while also helping us to respond to the challenges of the crisis. As we reported at full year results, we have a strong and experienced group executive team in place, And we have continued to strengthen the bench too with the new COO at Castorama France as well as key hires within our group data and digital teams. Next, one of the key enablers of our new strategy is rebalancing local and group responsibilities. Earlier this month, we launched fundamental reorganization of our commercial operating model, about which I will say more later. And we have also started work on the new operating models for IT and digital teams. Before the onset of the coronavirus, we paused or stopped several group wide initiatives to focus on doing fewer things rapidly and better. This involved cutting back on non critical range reviews and pausing big and time consuming projects. In France, we stopped all non critical IT projects and post our global SAP rollout at Brico Depot France. Which allowed us to prioritize Castorama and focus on improving our SAP was working in that banner. This has contributed to an improved operational performance at Castorama France in H1 and allowed us to accelerate implementation of the group next generation digital technology stack. This is a key enabler for our broader e commerce strategy and was rolled out in H1 without disruption to the business. We're making good progress with our exit process for Russia and as previously reported, we reversed previous decision to exit Iberia. We believe we can build a profitable and sustainable business under the Brico Depot discounter banner. Moving on to France, I've already described the operational benefits of addressing our challenges with SAP the performance of our supply chain in France has also stepped up with over 25 new recruits to the local team. And before the crisis, we were seeing solid underlying improvement in stock availability and inventory management. During H1, we reintroduced more local ranges in France and we successfully conducted many promotion based trading events. At Brico Depot, we have been increasing facial promotions or Aribage as we seek to reignite this business strong discounted credentials. These factors all contributed towards the clear improvement performance of like for like sales in France versus the market. So while there is still much work to do, and the crisis has had a significant impact on the French profit performance. I am encouraged by our commercial performance so far. During H1, we rapidly modified our operations and processes across the group to focus on orders, fixed in stores and fulfilled to either click and collect or home delivery. This is integral to our wider e commerce strategy, which I will talk to shortly. In Q4 last year, we began implementing a new trading approach to address diverse customer budgets and needs and offering excellent value for money. During the first half, we made further progress introducing more local ranges across the group, running more trading events, making further investments in price at Screwfix and testing new service propositions. Finally, we know that there are significant cost reduction opportunities across Kingfisher over the longer term. The crisis has provided us with many additional learnings in this area. Turning to Slide 8. The chart on the left shows the evolution of group like for like and e commerce growth over H1. As we reported previously, prior to any COVID related stock closures, trading in the first quarter was already reacting positively to the changes we were making from late March to early April, You can see the significant impact of lock down measures and our decision to close in store shopping for several weeks. In Q2, look like for like trends improved significantly due to the phase reopening of stores in the UK and France. Sales growth both in store and online was consistent throughout May, June July, as lockdown restrictions ease customers spend more time on home improvement projects. In terms of the 3rd quarter, trading has remained positive with Q3 group like for like up 16.6% to date. All banners are growing like for like sales and there is a broad based demand across all categories. Our showroom sales and order book also strong, which I will discuss more shortly. Screwfix has seen its growth accelerate in recent weeks too. Turning to Slide 9 and let me take you through a brief recap of Power Backing Fisher. The first key principle of the strategy is that Kingfisher banners are not the same, and this is a strength. That each address diverse customer needs, operate different business models, and each is developing a clear positioning and plan. Our second key principle is that we will power these banners as a group. We believe that the role of Kingfisher Group is to enable our banners to sell their customers better, harnessing the scale of the group where it makes sense. And we have a clear vision to build the customer propositions of the future. As you can see with our 7 priorities on the left hand side of this slide to e commerce, more compact stores, OEB led differentiation, the mobile first variance and the compelling services offer. This will be enabled by a balanced local group operating model and an agile culture. We have already taken the first fundamental step here with our new commercial operating model. And our mindset of donkeys better than perfect and test and learn has served us well during the crisis. We want to be simpler and leaner. This means doing less lending it faster and reducing our costs and inventory. At last, we want to build a responsible business culture at Kingfisher. We have established 4 new responsible business priorities focused around inclusivity, climate change, helping to make greener homes and fixing bad housing. As part of our commitment to colleague, engagement and inclusivity, We are very happy to announce a launch today of an old colleague share plan. This gives each and everyone of our 77,000 colleagues around the world at Kingfisher, the opportunity to become shareholders with 1 free share awarded for every share vote. We strongly believe in this program, to allow our colleagues to share and to contribute At our full year results in June, we set up clear priorities for each of our banners. Although it is still early days on slide 10, I wanted to update you on some of the progress being made. There has been a lot happening and conscious of time. I would just focus on BNQ, Screwfix and Castorama threats. For B and Q, we have already discussed previously the steps taken to accelerate E Commerce implemented new trading approaches and focus on the customer. The business is in the process of strengthening its range, offering more choice to customers and meeting demand for products previously not available. For example, BNQL brought back some text and later on paint and these have been big hit with customers. And we have seen the successful launch of our new kitchen range, which along with popular ranges like normal bathrooms, is proving our private label opportunities. Developing BNQ Service proposition is also a key priority We have tested kitchen installation services to support the new range and I can confirm that we'll be relaunching this service across the UK by January 2021. We also have trials taking place for 2 In addition, we are finding some smaller store formats to understand how we can extend the distribution of our brands For example, MRton in Southwest London, which is performing well. And we have several other trials coming soon. We have also recently agreed to test 4 BNQ store and store concept inside Atlas Stores over the next few months, which will track with interest. The Screwfix business has been strengthening its range and continues to improve its price positioning versus peers during the period. I'm also excited about upcoming enhancements treats mobile experience to support its market leading position. In terms of store expansion, while there was a pause during the first half, the business is on track. Open around 30 stores this financial year in the UK. The Republic of Ireland, our first five stores have been performing very well and we are on track to open 10 stores this year. We are also confident that this model can work outside the UK and we are now developing plans for asset light expansion to start with. In France, The actions that we have taken over the last 12 months continue to have a positive impact on sales. Performance versus the market has improved gaining market share in June, July August, The major SAP shoes I highlighted 1 year ago have been addressed. Its underlying supply chain is stronger and it has benefited from a new leadership team and the flexibility to implement new trading approaches including running trading events and strengthening their ranges. Overall, While there is still much work to do across banners, we are encouraged by the progress being made and by the commitment and energy of our teams. Turning now to Slide 11, We have already started to see the benefits both before the crisis and our response to it in rebalancing group and local responsibilities. Earlier this month, we announced a fundamental reorganization of our commercial operating model. The changes are aimed at leveraging the different positioning of our banners, enabling much greater speed, agility and local knowledge, while at the same time ensuring that we use the scale and knowledge of the group intelligence. On this slide, you can see the before and after position. Before, the group has responsibility for all range plans for our banners, whether OEB or brands as well as all supplier relations. The banners had limited decision rights. Under the new model, the group will retain the design, ranging, sourcing and supplier relations for all OAB and continue to manage supplier relations for the group's top 20 to 30 major international brands. We'll therefore continue to leverage the group scale to achieve buying benefits where this really matter. I believe that the group's outsourcing design and engineering capabilities build up over the last 4 to 5 years is driving real product differentiation. This is a key driver for delivering sustainable and profitable sales growth. Our retail banners will gain new responsibilities, reflecting the fact that they are closest to our customers. They will define category strategies, overall product range, non OAB buying, pricing, promotions marketing and merchandising. As a result of this proposed new model, some rules within our group teams are expected to change and we are currently in consultation with those we are impacted. It is a fundamental reorganization of our Kingfisher operates and we are excited by the potential here. To slide 12, over the next two slides, I want to go into a little bit more detail on 2 of the key medium term drivers of our strategy, growing e commerce sales and growing our OAB sales. The crisis turbocharged the long term trend toward e Commerce with very limited incremental CapEx We accelerated plans that were already in place to create new solutions sometimes overnight to meet the spike in demand. Between April July, we were averaging 1,500,000 e commerce orders a week which is significant even when compared to some of the UK food retailers. In H1, overall e commerce sales grew by 164% and by 173% when excluding Screwfix. Book's e commerce penetration increased by 12 percentage points to 19%. Excluding Screwfix, penetration increased five percentage points to 8%. These numbers are clearly supported by the specific nature of trading during the crisis. However, the more important takeaways from here, the potential for e commerce in our industry, our ability to handle the demand and to manage the financial and operational consequences of e commerce growth. The long term growth trends are clear and we have made significant shifts in our strategy to leverage this opportunity. We have shifted to store based picking and fulfillment as a priority and are redesigning the store operating model to support efficient delivery and click and collect with only certain categories delivered from fulfillment centers. For the 7 months to August 31, 88% of all e commerce orders, excluding Screwfix, were fixed in stores, up 28% points versus 1 year ago. And 80 percent of e commerce orders, excluding Screwfix, were made to Pick N Collect. BNQ is committed to delivering click and collect within 1 hour and for Screwfix in as little as 1 minutes. We have also started to develop our last mile home delivery capabilities from stores, enabling faster fulfillment at BAQ, for instance, our partnership with DPD has enabled next day delivery with 98% of the UK population. In addition, we are testing same day delivery with Stewart, the DPD affiliates company. You have heard me talk about the group's next generation digital technology stack, which we are rolling out as a priority. It is already in place at BNQ and initial implementation was completed at Castorama France during H1. This means that we are migrating Kingfisher front end IT architecture to cloud based API components. Which is a critical driver for more efficient and more dynamic digital capabilities, including scalable mobile app smarter search capabilities. The cost of this accelerated rollout sits within our existing IT budget envelope and it leverages the work already completed over the last few years with a global SAP rollout. We wish to publish work with a more balanced local group operating model for IT and digital, the planning of which has already begun. Lastly, we are continuing to explore the potential for an e commerce marketplace but it is very early days. To Slide 13, and we believe that our own exclusive brands or OEB with differentiation and value for M And A are a key driver for Kingfisher's future sale and retail profit growth. We're seeing good progress recently with our new kitchen range selling well at BNQ. Outside the period when our showroom offer was closed, orders increased 23% year on year on a like for like basis. We stick away sales up by nearly 8%. Our new lighting range is also lending well at Castorama France. To achieve our longer term goal of higher OEB penetration, we have shifted the priority from the unification of ranges towards OE. And we'll ensure that the OAB products and brands are aligned to the different banners proposition by tailoring them for DIY for trade and for discounters. With my update, now concluded. Let me hand over to Bernard. Thank you, Sherry, and good morning, everyone. To Slide 15 and an overview of the half. While Q1 sales were heavily impacted by COVID, we saw strong recovery of sales in Q2, aided by strong demand and actions to serve our customers safely. The start of Q3 is also encouraging with Q3 grew like for like sales at up 16.6% to 19th September with growth across all banners and categories. Overall, the group's financial performance for the half was resilient. Total sales in H1 were down 1.1% and like for like sales were down 1.6% all in constant currency. Regional profit was up 17.7% in constant currency as a result of, in large part, temporary cost savings, and a strong performance in the second quarter, in particular by B And Q. Free cash flow was significantly higher year on year, at over $1,000,000,000, the largest then driven by favorable working capital movements. We have and continue to actively manage the impact of COVID. As a result, we ended the half with net financial cash of over 1,100,000,000. We entered the second half against a favorable trading backdrop and our focus is on enabling sales in the safe environment. However, the continued uncertainty and concerns over COVID and the wider economic environment limit our visibility. Given this uncertainty, the board has decided not to declare an interim dividend. We recognize the importance of dividends to shareholders and will continue to evaluate the quantum and timing of any future dividend payment. Slide 16 is a dashboard of the key financials for the half. Let me touch on the profit measures here. Starting with gross profit, this was $2,200,000,000, down 1.5%. Gross margin for the half was down 10 basis points to 36.9%, with the decline in Q1 mostly offset by an increase in Q2. As mentioned, rubrico profit increased by 17.7% our retail profit margin increased by 100 and 40 basis points to 9%. Adjusted pretax profit was up 23.1 percent to $450,000,000 and statutory pretax profit was $398,000,000 after $70,000,000 of net exceptional charges. Statutory profit after tax was $317,000,000. Moving to Slide 17 and the movements in group retail profit. This was up $79,000,000 to $533,000,000 with a decline in gross profit of $35,000,000 more than compensated by a reduction in cost of $114,000,000. Let me unpick the gross profit decline. This was driven by $23,000,000 adverse impact from a 1.6% decline in like for like and a $20,000,000 increase in supply and logistics costs, which was mostly COVID related. Lower clearance activities partly offset by more trading initiatives and pricing investments increased gross profit by $8,000,000. The contribution from net store growth offset the negative contribution from Russia. And as mentioned earlier, while Q1 saw a gross margin decline, Q2 saw an increase that mostly offset this decline. Moving through the bridge, operating costs were higher by $28,000,000 from higher store numbers and inflation and by $22,000,000 because of the shift in our French frontline employee profit share into H1. The latter partly reflects the structure of the French store staff bonus scheme which is based on quarterly sales performance. Given the very strong sales growth in Q2, more had to be accrued in this quarter. There will be, however, the offsetting benefit in H2. In the half, we incurred direct COVID related cost increases of $28,000,000 for PPE, additional store security costs, and special bonus payments made to frontline store staff. While we incurred further costs for safe in store customer journeys, including additional marshalling, we were able to offset these with higher productivity and reallocation of staff. The combination of business schemes in the UK, France, and Spain provided a total benefit of $100,000,000. Finally, we achieved a savings. For example, we significantly reduced spending on advertising and marketing, goods not for resale, head office costs, and travel during the crisis. In a large part these reductions are specific to the period. Let me now take you through the net exceptional charges the half of $17,000,000. Asset impairments and exit costs of $27,000,000 were recognized during the period relating to Russia. Reflecting the performance of the business in H1 The $14,000,000 liability that was held in relation to warranties as part of the BNQ China disposal in 2014 was released in the period following the expiry of the claims period. Of this amount, tendering has been recognized within exceptional admin expenses, and $4,000,000 has been recognized within exceptional tax items. After these exceptional items, our statutory profit before tax was $398,000,000. To Slide 19 and the performance of our major geographies. There are slides in the appendices detailing the performance of each of our retail banners, but let me pull out some key points here. Starting with the UK, like for like sales were up 2.4%, driven by strong sales recovery in Q2. Like for like sales at BNQ grew by 28% in Q2 and by 4.1% in H1. Like for like sales at Screwfix were down 1.1% in the half. While sales also recovered in Q2, it did at a much lower pace of 2.4%, reflecting a slower pickup in demand from professional tradespeople than from DIYers. As trade people restarted their work in customer's home and we gradually reestablished in store purchasing, sales trends have strengthened with Screwfix quarter 3 to date like for like, up 9.9%. The business has also continued to improve its price position relative to its nearest peers. U. K. Retail profit increased by 47.1 percent to 411,000,000 This was driven by sales growth at BNQ and increase in UK gross margin of 100 basis points and an 8.8% reduction in operating costs. The gross margin increase reflected higher full price sales and lower clearance in B and Q, partly offset by higher supply and logistics costs in Screwfix. Operating costs benefited from the cost reduction measures I mentioned previously, business rates relief and up to the 1st July, the UK Furlough scheme. These savings were partly offset by cost inflation, Screwfix base increase year on year and COVID related cost increases. In France like for like sales were down closures in Q1. France experienced the longer period of lockdown relative to the UK. Q1 like for like in France was minus 41.5% compared to minus 16% in the UK. This was partly offset by strong recovery and demand in Q2 with like for like at plus 27% ahead of the UK, but not enough to return to growth for the half. Retail profit declined by 44.1 percent to 63000000 This was mostly driven by the sales decline at both retail banners. Results were also impacted by decreasing gross margin points, reflecting higher supply and logistics costs as a result of COVID and external disruptions at the start of the year. Next is the decision to up waste special promotions, or Achin, sales in Ricodepo, and also more trading events. Operating costs were 4.9% lower. Benefits from temporary cost reduction measures and the French furlough scheme were partly offset by COVID related costs and additional payments to frontline staff and the 22,000,000 shift in ethylene profit share into H1 referred to earlier. Poland, which kept its doors open throughout the period, also saw stronger demand in Q2 with like for like up 15% in Q2 and 3.5% in H1. Total sales growth was 6.8%, reflecting the annualization of 4 store openings last year and 1 store opening in H1. Gross margin in Poland decreased 120 basis points, largely reflecting mix, better price positioning and more trading events. Retail profit in Poland declined by percent increase in operating costs. This was linked to wage inflation, the increase in space year on year, incremental COVID related costs, and additional frontline staff bonuses. Iberia sales with like for like sales down 22.3% in H1 were severely impacted by COVID restrictions during the half. Since the opening stores in Spain from mid May onwards, we have seen strong demand with June like for like up 25.5% and July up 19%. Despite these weaker sales, the business made a retail profit of $1,000,000 in the half. Romania reduced retail are slightly to $11,000,000 for the half and Russia flow and highlights a period of very strong cash generation for the group. We generated an EBITDA of $769,000,000 in the period. Working capital showed a largely timing related inflow of $656,000,000, driven by a $208,000,000 decrease in stock and a net 4 down and strong Q2 sales. We are working to structurally reduce our inventory levels. However, I anticipate some rebuilding of inventory in the second half as we improve our product availability. The increase in payables was driven by the deferrals of stock purchases and higher payroll and VAT creditors, again, reflecting strong trading in Q2. After rental payments, tax and interest and gross CapEx Free cash flow for the period was a little over $1,000,000,000, up by over $800,000,000 year on year. The net cash movement, including, excluding financing, was also a little over $1,000,000,000. As a result, net debt at the end of H1 reduced by over $1,100,000,000 to $1,400,000,000. Given that working capital will, to a large extent, normalize in the second half, I would expect our net leverage ratio to increase Now moving to Slide 21 in our current liquidity and financial position. As at 18 September, we had over $3,700,000,000 of total liquidity available including $2,100,000,000 of cash, which includes around $540,000,000 from a term facility guaranteed by the French state. To remind you, under the terms of this facility, the full amount was drawn down on 18th May. Subject to circumstances and to certain conditions being met, we will consider repaying this facility in H2. Furthermore, we remain eligible for the Bank of England CTFF program and have additional undrawn RCS available for $1,000,000,000. As mentioned, our working capital position was very favorable in the first half. And while cash is a key focus area, working capital will to a large extent normalize as we rebuild inventories and settle our accounts payable. That said, we are in a very sound financial footing given our strong cash generation and access to significant liquidity. Finally, moving to Slide 22, our outlook and technical guidance for the full year. There's a lot on here, so let me pick out some of the key items. Starting with the sales outlook, while Q3 trends to date have been encouraging with sales up 16.6% to 19th September. Visibility is limited by ongoing concerns over COVID and the wider economic environment. We expect incremental COVID related costs to total around $40,000,000 in this This is slightly higher than previously anticipated, largely due to bonuses to frontline store staff. We expect central costs to be slightly lower than prior year at around $58,000,000 to $60,000,000. In the UK, business rates relief is expected to remain in place until the end of March 2021. Of Kingfisher's annual business rates bill of a around $140,000,000, around $130,000,000 is eligible for release. With regards to furloughing, Since the 1st July, we have not claimed under the Furlough programs in the UK and France and will not claim the UK government job retention bonus. Furthermore, we intend to repay the furlough benefit received in U. K. Of around $23,000,000 in the second half of the year unless there are any material changes in the trading environment. From a financing perspective, we have already paid back $600,000,000 drawn in June under the CCFF. And as I mentioned earlier, given our solid liquidity position, we're also considering repaying the $540,000,000 French term facility in H2, subject to the environment and certain conditions being met. To repeat, we expect a very favorable working capital position at the end of and settle outstanding creditors. With regards to capital expenditure, we continue to review our expenditure plans on a case by case basis and expect total CapEx of up to $300,000,000 with a third of $50,000,000 earmarked development expenditure that is deferred into the next financial year. Finally, with regards to the previously announced 11 store closures in France, So far, 7 stores have been closed, in which 4 were in the first half. We expect to close 2 more Castorama stores in H2, that have decided to convert 2 Castorama's earmarked for closure into Brico Depot stores. Cash cost of X's have been fully provided for in previous periods. With that, let me now hand back to Thanks Bernard. And let me now briefly summarize before we open for Q And A. First, we have delivered a resilient financial performance in the first half with a strong recovery of sales in Q2. Following the significant impact of lockdown measures in Q1. The sales recovery has extended it to H2 with good growth so far. The crisis has driven stronger demand for home improvement across our market, something more people to re engage with DIY, become more comfortable with other in goods online, and seek value for M And A against a challenging economic backdrop. In parallel, we have benefited from our new strategic direction with our retail banners finding new ways to meet these demands and serve their communities. Our experiences through the crisis have reinforced this direction and have made us boulder in our priorities. While there is still a great deal to do, we have made good progress with the strategic plan that we announced in June, There has been a fundamental reorganization of our commercial operating model. We are continuing to improve our operational performance in France. We have accelerated our plans around e Commerce and many encouraging new initiatives are being developed across our banners. Looking forward, there remains considerable uncertainty around the coronavirus crisis and the wider economic outlook and managing the riskier remains a key priority for us. But while the near term outlook is uncertain, as a team, we believe the longer term opportunity for Kingfisher is significant and we are committed to returning Kingfisher I would like now to invite any questions. So over to you, operator. Thank you, Please note, you. Our first question over the phone comes from a Richard Chamberlain from RBC. Please go ahead. Your line is now open. Two questions for me, please, to start things off. The first one's on the UK, obviously very strong performance in the first half, Tieri, you talk about reintroducing kitchen installations. Going forward. And I wonder what, what changes we should expect compared to last time? Cause I guess it was, it used to be quite helpful for sales, but not not so good profits? That's my first question. Yes, thank you, Richard. It's like 1st part of this answer is we have been testing 4 different ways, early Q4 last year, different ways, partly, let's say, fully managed by BNQ and some of the tests, let's say, really manage it in a different way. We have that very good results overall. And we have chosen 1 of the 4 way and now we are rolling out this installation services across the store and will be ready by endofJanuary. And to summarize, we consider we should have a small number of trade people by stores that are actively managed. But with the way, so we can guarantee to the customer that the quality of the job is is indeed there. And that, overall, the cost of the installation could be paid to be in and let's say, could be part of other, let's say, services offered by BAQ. So that we are very clear now after those tests, rolling out in all our stores. And I think we'll do it in a different way versus what was done see where it was for large part B and Q employees. Okay. Got it. Yes. Okay. Thank you. And And on on the second one on Poland, I wondered how much, the performance has been held back by, the new ranges coming in a little bit later. I think you mentioned the kitchens are still to come in or are coming in right now. And also on in Poland, do you see some of that price investment, that you've made to become more competitively starting to ease off in the second half? Thanks. Yes, thank you. I think on Poland, we are pretty happy with the sales trend, to be honest, we are the range reviews are on time. We from the beginning plan to have this kitchen reviews in the coming months. It's coming as planned with early good results. So no, I would not I would not say we have disruptions linked to that. I think last year, probably our price positioning was okay, but we consider we should do a bit better this year. Tarial additional investment in the coming months, but we thought we had to do this small price repositioning in the past months. But overall, very, very happy with the trade in Poland. The countries have kept all is still open. Across the crisis, very often taking initiatives, a lot of good practices around the safety measures. So and a lot of on e commerce. So relatively happy with the response indeed. Thank you, Richard. Just Janet, Richard, Bernard here. I mean, if you look at the like for like, the Q2 for Poland, you know, plus 15% trading in this quarter also very strong at 10.3%. So I think that reinforces the approach and the strategy that we have in Poland. Our next question comes from Ann Critchlow from Societe Generale. Thanks. Two questions from me please. The first on product availability, could you comment on how your availability rates have been improving or otherwise, particularly in France, where I think there were some problems previously. And then the second question is about rental costs what sort of rent reductions are you getting on rent renegotiations, where these are taking place and how does it differ between countries? What's the outlook there? Yes. Thank you, Ann. So let me first comment on the French supply chain. Again, the we did many, many action and very early last year and starting with the team. We consider the team was we had to strengthen the team. So we recruited 25 additional people in the team as through our IT progress through the SAP implementation at Castro, we indeed supported our suppression operations we did a lot of job last year. And therefore, I would say end of 2019, We went back to 97.5% to 98% of availability, which was probably up by 4 to 5 points versus the year before. So really underlying improvement. And if I look at French supply chain in France in the past weeks. We have a low level of inventory, one of our Key criteria is the occupation ratio of our DC. They are at a good level. So and I must say that probably remember that we had a strike in the French arbor for many months up to February. So we started the crisis with a lot of containers in the French arbor, and we clean all that. We solve all those issues. So therefore, today is already the French supply chain. Is, is in operationally in a good shape. Maybe one comment on the COVID, we overall consider, we have supply chain well under control, but with some issues in some specific categories, we have a very polarized demand today, when you speak about the outdoor paint, paintbrushes, sometime we have such strong demand that our suppliers have issued to deliver products. So we have well under control with a few challenges for some specific categories. Maybe I leave it to Bernard on the list. Sure. Hi, Ann. So obviously, our property cost is a key area of focus and some extent, the crisis has enhanced our reputation as a high quality tenant. And obviously with that, we engage with our landlords So the last year, we did about 35 re gears. This year, we're also pretty active. We've got about 7 approved with a reduction of about 20% in the rents. It is a little bit skewed towards UK because that's where we've got the biggest part of our rentals, but obviously, we're also looking at other markets and engaging with the landlords there. Great. Thank you. Our next question comes from Jeff Rodell from Morgan Stanley. Please go ahead. Your line is open. Good morning. Could I ask 2 questions, please? The first of which relates to the change in the commercial organization that you announced this morning with the banners getting control of their non OEB ranges. I was wondering how's that going to work in practice? I mean, are we going to get another round of range reviews, which were obviously very disrupted to the business last time around, or is the range change is going to be very slow and gradual? And then the second question, completely different topic. Yeah, I think the very final bullet point of the summary slide talks about Kingfisher being committed to returning to growth. Just wonder what sort of growth that means? Is that top line growth? And is that if it is top line growth, is that going to be driven by space growth? And if so, in what markets and in what balance you would back to growth space? Thank you. Yes. Thank you, Jeff. I think first of all, when we speak about reorganization, I think first is how we'll reallocate responsibilities. I think for me, the structural point is the group was in charge of the ranges, the range strategy and really the detail ranging by banner. And we discover it was not efficient because even if you are extremely smart, it's very difficult in one person to manage all the different ranges of BNQ, Screwfix, Brico Depot, Castorama, in France, in Poland, etcetera. And that's why we consider to be closer to customers and to use a banner to decide on the rent strategy is critical. I do not expect material range reviews. I think over time, gradually, maybe we'll need us over 2 years We'll adjust the ranges. If you take a BNQ or Castorama in France, we consider the choice is, is not large enough. We especially what we call in the upper categories, the Q3 and Q4 upper premium choices that we are we don't have enough ranges. When you look at Brico Depot, we should probably come back to a more, discounted DNA in the range strategy. So it will come over time. I don't expect metall range reviews. Now to come back to your second question, when we say bringing Kingfisher back to growth. I think first, our strong belief is that as a retailer, everything start from the top And I would say like for like to plan to answer clearly your questions. We have opportunities, especially with Screwfix, with Poland and maybe over time other opportunities that we want to improve our like for like operations We are, as well, committed to grow the absolute retail profit You remember, we were very clear in June, but all this story, all this new strategy should start from the top line. And for us, it's like for like sale That's clear. Thank you. Our next question comes from Jeff Lowrey from Redburn. Please go ahead. Your line is open. Yes, good morning, Tim. Two questions as well. You've obviously thought very hard about the structure of the commercial and sourcing organizations. Given that in your mix of businesses, what do you think is a realistic aspiration for your inventory, pound 1,000,000 inventory turn relative to sales. However, you think about it, what's realistic there? And secondly, given the step change in multi channel that's going on in your business, if your sales split say ended up 35 percent digital 65 percent stores, what would your gross margin OpEx to sales and the EBIT margin look like in that scenario? Yes. Maybe let's start with the second question. And Bernard and I will comment on the first one. I think there is obviously always this question around the potential impact of the digital sales on our profit. And you already see that we announced a critical change. We move from 7 to 19 points of digital sales and you can still see the profit of the company. I think I'm coming from Food Retail and looking at this the situation of Kingfisher as well with those franchise, we are in a high margin environment. We are we have high margin in DIY. And as soon as you give the priority to stop picking, you have you are already operating with the marginal additional CapEx marginal additional fixed costs. You're already on marginal, you just add additional costs that you have limited fixed costs. So I think it's really a very powerful model. We have been able to prepare 88% of the number of the group others who are picking and then is click and collect, 80% of our others who pick and collect you can collect is a most profitable channel. And we have many additional ideas that they will not develop today because it's a bit too early to improve our online P and L looking forward. On the inventory and I will leave I will leave the floor to Bernard. We believe and we said it clearly in June that we believe we have a significant opportunities to reduce inventory. We started the job end of 2019. We have a structural programs in place. Obviously, the crisis is helping us. And that said there, now we will rebuild part of it. But indeed, we have we have program in place and we believe the opportunities are strong. Yes, just let me just add a little bit of color there and as they obviously $200,000,000 plus contribution to cash flow in the half from the inventory reduction. Now I'm looking to hold on to part of that, but obviously we also need to rebuild stock and ensure that we've got availability across the banners. I think more structurally, as Stuart highlighted, if you look over the past 5 years or 4 years, we increased stock by 500,000,000 where in 2019, we took off about $130,000,000 last year. We took about $90,000,000, but there's more to go. And we think the there's a meaningful, further reduction to be had. I think as we highlighted in June, there are probably three main areas. It's around better planning and forecasting. It's looking at what we do in stores in terms of display levels, but also things as ranging and deployment I think we can be a little bit smarter with some of the very small moving or nearly not selling items. And that's the plan, which is that's one of the powers of the group where we're working, in terms of the supply chain expertise and working very closely with the banners to follow-up on that. Our next question comes from warwick Opens from Exane BNP Paribas. Please go ahead. Your line is open. Yes, good morning. I've got 2 questions. Firstly, could you give a little bit more color on your thoughts about Screwfix outside the UK and Ireland. You mentioned it in your prepared remarks. Just roughly what timeframe are you also thinking about it? And then secondly, you've talked a fair bit about Bricker Depo and its discounting proposition. Could you give us a sense of what proportion of sales you made in the first half on our revised? I think I'm writing in saying that they got it got to as low as only about 5% of sales a year or 2 ago. Has that rebuilt to the sort of 15% that more historically has been the right level? Yes, let me start with the second one to go fast on this one. We indeed already strongly believe that Brico Depot is a unique model, really hard discounter. And I remind you that before we discuss our revised, you know, in this model, you should have very low everyday low price. And we have a very good price index and that's critical in this model. Then when we organize promotion, what we call our revise is really one time promotion and when this promotion is over, you don't keep ready the SKU at your assortments. So I would say in the past, in 2019, our Ibadge went at a very low level probably slightly above 5%. And we are currently, let's say, in the range 8% to 10% when we look at the Q2, well, that's to describe the current trading strategy for Brico. For Screwfix, you remember, we started in Ireland we had trial of Screwfix in Germany. 1 was successful in Ireland. The other one, not in Germany, which we spent some time to understand what we can learn from those 2 from those 2 experience. And that's why when I say we want to start in an asset light ways. We really believe the way we started in Ireland 2, 3 years ago is the right one. So with a pure online start, building the brand, building an online proposition gradually advertising the brand. And after a few years, when we consider, we already to open the few first stores. And we are very happy today with the 1st high risk store of Screwfix. I think the other direction would be to look at countries where you already have Kingfisher when you are in the country for years, you have your team, you know the supplier, you have your relationship with suppliers, you have a supply chain, your stores, you have professional teams. So that's for me are the 2 directions looking at in Fisher Countries. And looking at the high risk success to build plan for Screwfix. I don't want to comment on timing I prefer to tell you when it's done rather than to give you a promise and we are working on plans with Screwfix to start international expansion outside the UK and Ireland. Thank you. Our next question comes from Georgina Johanen from JPMorgan. Please go ahead. Your line is open. Hi guys. Thanks for taking my questions. I've got 2, please. The first one is just on the gross margin. Apologies if I've missed it somewhere, but I think you you often provide some guidance for for the full year outlook. So if you could just give a a sense there. That would be helpful, please. And then my second question was just around the French market, and availability in the French it in general, how has that been in recent months? I guess I'm just trying to get a sense if your share gains have been supported in part by a lack of availability of products at some of the smaller players, etcetera, in terms of sort of difficulty managing it over the COVID crisis? Let me start with the second one. On French availability, as I just answer, We had structural actions to fix our supply chain. I don't come back to that. I think it's part of our improved like for like sales in Q4 and up to March is linked to this availability improvement. Obviously, as I mentioned, COVID crisis impacted availability all across the group. And I guess as everyone. And indeed, we are gaining market share in France in June, July August. Now, I think we respect very much our competitors in France. So you know that Tadeo is a strong and organized company. I do not believe that the ATO situation is worth on us on availability. So I think it's it's probably more linked to a better brand positioning of Castor and Brico of our e commerce strategy and we have been probably agile. The ranges improvement, etcetera, what we described this morning rather than only availability in my view for the French market Now I'll come back to the margin with Bernard. Hi Georgina. Yes, that's the you look now further. We didn't give guidance on the gross margin. But let me say a couple of things. As I just said, gross margin in the half, was slightly down ten basis points and that's really the highest supply and logistics costs and the trading initiatives. And then there was an offset from lower clearance and fewer range changes and the dynamic was that the Q1 was down, the Q2 margin actually was up year on year. And then for the full year, I think the many moving pieces and to some extent, we don't have visibility with some of the uncertainties. But a couple of things we do know is we're going to continue with, some of our trading initiatives And so that's one. The other we there will be slightly less range changes this year compared to the prior Thank you very Our next question comes from a Simon Bowler from Numis. Please go ahead. Your line is open. For myself. You kind of quite help these folks, the idea that you don't see any need consequential further investments into promo or pricing in Poland. And I was just wondering whether the same would be said, in France as well? And then secondly, just going back to the new commercial operating model, Again, think about how this works in practice. So our local teams effectively using kind of the own brands as a, as if they were a third party buy? And is there any incentive for the local teams to kind of buy the own branded products open above what pricing there offered by group? Yes. Thank you. I'll come back to those 2 questions. I think for for the French pricing, to be very direct, we are today happy with Castorama price index. We are below or slightly below 100 or matching our competitors. And I think it's a good positioning. We are clearly below 100 for Brico Depot. But as I really want that Brico Depot come back to a strong discounted DNA. Our plan is a medium run is to constantly improve our price index by cost saving, by actions. So that constantly, we try to be the leader in our price position each. We are and to continue to improve our price index by reinvesting our cost savings into the prices. And that's how it works to discount our model. But it will be done over time, I would say, a bit all the time as soon as we have a better sales density or improvement on cost. I think on purchasing, you know, that's our work. The group, we have a common framework. We want as a group to continue to increase the proportion of OEB. We are today around 39% And we believe this proportion should continue to grow. We have a good team that we have engineers, we have designers, we have quality team, we have sourcing team, We have strong capabilities and all the banner that we are altogether committed to grow this OIB penetration in the medium term. We believe it will bring sales. It will bring differentiation. It will bring margin. So as a group, we are committed to continue to increase the penetration of OIB. And as a quick kind of follow-up, I don't know kind of just try and get a sense of of how important to your mind the OEB piece of of things is, you know, is that on a medium long term view, it should be 50% of the business or have you got a sense around where those targets for that part sit? Again, we don't want to set the target at that time. We consider there are significant opportunity to continue to grow OEB. OEB has a better margin than the categories. And as we have, we speak about 3, 4 years horizon. Indeed, we have ambitious target during this time horizon. And maybe just to add a couple of things on your point on the incentives for the banners on OEB. Obviously, it's a source of differentiation for them and we see it, for example, in the kitchen ranges. There's the margin benefit and significantly and I think Jerry mentioned it in the current environment where people are looking for value for money. Obviously, the OEB brand is fantastic proposition that we can offer to our customers. So all the incentives to build the OEB share in the banners Okay. Thank you. Our next question comes from Simon Irwin from Credit Suisse. Please go ahead. Your line is open. Good morning, gentlemen. Can you just talk a little bit more about stores and formats in terms of kind of where your thinking is, on stores? I noticed the, obviously, the what you mentioned in the statement and you have effectively pulled to cash flow closures back from closure. How much do you think you're kind of you're reasonably close to to knowing what you want your large stores to look like in particular. And do you have a plan in place to start kind of reinvesting in those stores, which probably haven't seen too much investment in recent years. Yes. Thank you for the question, Simon. Several, I would like to mention. First, as I said, we believe in smaller formats. And we believe in the longer trend of smaller formats because of the demography because it's it's true for every market in the world and we have to learn how to operate smaller formats. That's why we have already 3 small BNQs. We are so far encouraged by the trust results. So we'll open a few more BMQ test in the coming months. We'll have some test in France as well for smaller formats. And as we just announced, we will test for a small B and Q inside as the store that shop in shop. I do not believe in the large closure plan. I believe that we need a lot of stores that probably we need less square meter than today. And we need a lot of stores to bring convenience and as well to operate our e commerce, we start picking. Now for some of our big boxes, and here is mainly some of the BNQ and some of the Castorama in France. Probably we could have some 2 large cool large big boxes for some catchment areas. Again, it's not everywhere. You have some very successful large BNQ or large Castorama, but some catchment area, but the store are too large. And we should gradually work on resizing. And that's as well for me, test and learn. You need to test to understand the implication on sales what is a CapEx level, how much you can get on margin on the cost, but we will gradually test and learn resizing, rightsizing, and when we are ready, we'll come with a plan on this topic. And I think this is a topic that is on the table for every retailer in the world and the size of big boxes. Then you're right that on CapEx, when you look at the past year and we said that in June, we thought we have spent probably too much CapEx on on product and not enough on retail. And looking forward, we want to rebalance a bit the CapEx spend on retail stores. Again, we'll do that gradually with measures and with plans, but it is correct that we should probably looking forward that have a bit more CapEx to renovate our store network. At last, you're right to say that We will transfer to Castorama France that was supposed to be closed into Brico Depot a few years ago, some transfer from Castro to Brico Depot were very successful. So we are very interested to look at the results now, but I think it's interesting topic to follow-up in the coming when we'll have the results of those transfers. We'll take our next question from Kate Kallevelte from Investec. Please go ahead. Your line is open. Good morning, everyone. Couple of questions for me. First of all, could I ask Jeff's question in a different way on the new commercial operating model? When will I be able to go into a BQ and Casa and see a range that you are happy with? Is this within 2 years? In terms of my second question, on future growth, how many stores you envisage in Poland Spain and Romania as the ideal number. And finally, where are you with the disposal of Russia? Yes. Thank you. So on the range, I think for retailer range is a never ending story. We are never happy with the range and we should continue to constantly improve our range. As I said, we want to continue to increase the proportion of OAB and to increase your OAB. You need to develop new ranges to find suppliers, etcetera. And that's what we are doing, for example, for kitchen. And when you look at the time horizon of kitchen, you need several years to roll out the kitchen all across the group. So it takes some time probably to be back to a range with more local ranges, more adjusted ranges to the customer needs, especially when you look at Casto and Brico, we are on different better proposition. I think if we are reasonable, I think 2 years is probably a right horizon to be happy with. But OAB will continue to grow over time. And as I said, for me, you are never fully happy with the range. You should never be happy, it means you otherwise you are not agile and moving and you have new needs. I'll give you an example. We are developing new proposition to create easily interior walls, if you want to work from home, we have now a new proposition that you would see across our stores to set up very easily additional clusters in your home and additional interior walls. So I think it's it's a never ending work on the range. Russia, I said we are making good progress. I hope to come back to you soon that I can't comment more for the moment. And I think for Poland, Spain and Romania, it's highly dependent in my view on business model. Poland is extremely profitable business model. The country is not saturated. We still have spaces to open new big boxes in new cities or in smaller cities. We just opened a new store last week, it seems going well. For Spain and Romania, I would say the short term, the first topic for me is to bring back Romania to Breakeven, which is not the case. So we are, let's say, a very strong action plan to improve the business model in Romania and to bring back the country to breakeven. I think Spain has been on sales for a while. So again, we are profitable. You see that it's very encouraging to see the profit of Iberia despite being on sales and despite the crisis, but we are first to work on the business model to make sure we have even a stronger proposition before we could consider to open a large number of new stores. Yes, just the second year. Sorry. Yes, go ahead. Yes. No, just on Romania, do you think you could break even next year? I would say that this year, we will improve I think as Bernard commented in H1, we did a small improvement. We believe that for the full year 2020, we'll improve the profit versus last year. Definitely, we are really committed to bring back the country to breakeven as soon as possible, but I would like to give you the to commit for 2021. We'll now take our next question from Adam Cottran from Citi. Please go ahead. Your line is Good morning. Thanks for taking the question. Two questions from me. First of all, in terms of the sales orment, how much would you attribute to the the market compared to the bits that you're doing yourself? And I think a large proportion is the market. Have you or are you able to to to give us a flavor on how consumer trends are changing? Do you view this as a cyclical or a structural trend? And you mentioned that the pickup in online penetration. We've seen that across a number of different companies. I was just wondering, we don't really know in order to see how much of that is going to stick. Just be interested in your view as to how much of this performance is down to the market and how much is down to your performance of the market. And then on the consumer trend, how permanent do you think these changes are, or should we expect a normalization in DIY versus do it for me, for example? And then the second question is, would you be able to give a a base profit number for the first half for us to work off for next year. I've I found that there's quite a lot of moving parts with regards earl schemes business rates reduction, what would be the best number do you think to use as being a a like for like comparison base the first half profitability for next year? Thanks. Yes, thank you. That's all very good question, obviously. Thank you. So first, I think to try to be relatively short. First, when we do customer survey, we start to understand there are 5 factors that support the this demand in DIY and home improvement. And I briefly described that in my speech a few minutes ago. I think people, they have more time at home. They have more money available discretionary spending. They rediscover gardening and DIY as a hobby because finally, you have less available leisure options. And that's very clear in the survey we are we are setting up. People are working from homes. Therefore, they need to reorganize their spaces. And at last, and I think it's more temporary people are a bit scared to have trade people at home for a few weeks, even though it's creating better. And therefore, do DIY is favored versus do it for me. And I think again, it's temporary. And I fully acknowledge that I think a large part of ourselves is the market where we need to be very modest on that. On the other side, we are gaining market share. We look at France, June, July, August, we are beating the market. I think it did not happen for since many years. I think BNQ clearly, we have had some of BNQ's competitor. You can check as well. I think BNQ is doing a good job and the same for Poland. So I think we are gaining market share and this is due to our new, I think, strategic direction. Around the different banners, banner on powering agility, the new spirit we have around and I think the decision we have made around e commerce from stores. I believe indeed that the online sales We have we not come back to the previous world. We during the COVID time, online sales were up by 3 times. Now we are slightly above 2 times. I think it's pretty resilient and I think we stay at a very high level of online sales. Looking forward. Now for profits, I will let Bernard give you some Yes. Hi, Adam. I think we left some clues on in page 17 in the group retail profit bridge. So think if you look at the gross margin, we talked a little bit about what we think it's going to do in the second half, but clearly there were some one off components in there, especially in regards to supply and logistics. And the net of the clearance and other things and the trading initiatives was slightly positive. So we'll that gives you some indication of where we think the gross margin rates could go. I think the more important part is on costs Obviously, we will proceed to go to new stores and expand. So that's going to add up a little bit of cost inflation. We'll still in some sort of fashion B there. That was the $28,000,000 in the first half, and that's set to continue. And then the the 3 other blocks, basically the French employee profit share shifts into H1 as a temporary one. The COVID, obviously, we're going to lose the benefits from the rates and the furlough, the $100,000,000, although the business rates is going to continue until March 21, incremental COVID costs. I think we're learning to manage as best we can, but hopefully it will depend a little bit on the trading environment. And then we had a the $92,000,000 where we said, that is in a large part temporary. Now let me say a little bit more about that, included in here are things like lower advertising and marketing costs some things we were able to do on discretionary spend, GNFR, store maintenance, etcetera. So some of that will come back. That's not to say that we are working structurally to reduce our costs, be it in distribution fulfillments, things on the head office, IT, the re gears are talked about. So yes, there will be a part that we're working on that will we're looking to flow through, but a large part is more related to the environment and will be temporary. So hopefully that gives you a little bit of an indication of the moving parts. Well, what I want to have you, why is the difference between re you're a group and and reported one? Why we're paying the UK furlough benefit, but not the not the French one? I could I just sort of understand if you repaid both so you could maybe free up an opportunity to pay a dividend if possible, but repay in one country, but not the other, sort of doesn't really open up many doors What's the rationale lately? Yes, let me let me comment on that. I think first of all, you saw the situation by country is very different. And we have a sales growth in the UK. The profit increased by 47%. And we consider it just the right thing to do, you know, to pay back the fellow in the UK. In France, we are today in a very different situation with a profit down and sales are still down. On the H1. And we have decided in France to pay back the primary of the PG in the course of the second half unless material changes. And it's just the situation of the countries are very different. And we consider looking at the profit situation in the UK and France, it's just the right thing to do. Congratulations for repaying the UK. I think that's the very much the right thing to do. It appears there are no further questions queued at this time. Mr. Garnier, I would like to turn the conference back over to yourself for any additional closing remarks. Sir. Thank you. Thank you very much. So thank you again for your time. Obviously, the near term outlook ahead of us is still very uncertain. But as a team, let me tell you again that we strongly believe that the long term opportunity for Kingfisher is significant. We very much look forward to updating you again in November with our Q3 trading. And then, again, next March, until then, please stay wholesale and keep well. Thank you for this morning. Talk to you very soon. Bye bye.