Earnings Call: H2 2020

Jun 17, 2020

Thank you, and good morning. Thank you for joining us today. I'm Thierry Garnier, the CEO of Kingfisher, and I'm here with our CFO, Bernard Bot. Unfortunately, we cannot meet in person today. However, I'm very happy to finally be able to update you on our full year results. And our longer term direction for Kingfisher. As outlined on Page 4, Our agenda for today will start with an update on the COVID-nineteen response plan and latest trading performance Bear now will then share the full year results and the latest view of our mitigation actions and liquidity situation, I would then present our diagnostic of the situation as we found it in 2019 and talk about Kingfisher's new strategic direction and priorities. And we'll then open up the meeting for Q And A. We have a lot to cover today would be a slightly longer presentation than you are used to, but I think it's important that we spend time on these topics. Since I'm joining Fisher at the end of September, I've spent my time and my energy deep in the business with my colleagues, our customers and our suppliers. I'm passionate about retail, and I've learned a lot. It was my immediate priority. I'm pleased to announce that our group executive team is now complete and has been hard at work through the crisis. As you can see on page 5, We have 7 new appointments since September. This is an experienced team of executives with impressive track records. With a combination of experience, loss in psyching fisher and in other sectors, such as hospitality, electronics, retail grocery and consumer goods. I'm confident that this team has what it will take to deliver on our ambitions for Kingfisher. With COVID-nineteen, our priority was to take care of our people, our customers and our communities. Page 6 is a summary of the actions we have taken to manage the impact of COVID-nineteen on the business. We have already published a lot of detail on our actions as we have gone through the crisis. We have acted responsibly above all health. All stores in our largest markets at essential status from day 1, but we decided to keep them shut at the start of confinement and reopened only when it was safe to do so. We have also been ring fencing and donating PPE to health care workers. We have been agile. We have reacted fast. We made changes overnight to our operating models. For example, launched new Click and Collect and drive through options that became leading practices in our markets. We have made a lot of progress in e commerce, while leveraging our stores for picking and fulfilling orders. E Commerce surged up to four times in April and continues to see strong growth. We have protected the financial position of the company by taking decisive action on costs, accessing government support, and securing additional funding facilities. In short, we are on a very sound footing. And in fact, the crisis has put extra momentum behind some of our new strategic priorities. I will come back to this. If I move on, let me say that I was humbled. By the dedication and hard work of our teams. There have been the driving force behind our ability to manage crisis And I On page 7, the chart on the left shows a group like for like and e commerce growth over the past 15 weeks. The sales profile in March early April reflects our decision to close stores for several weeks. You can also see the strong e commerce growth I referenced before. Then when stores started to reopen, the later part of April, we have seen very strong like for like sales. We saw a significant surge in categories such as outdoor, building materials, paints, garden and flooring and tiling. Demand in May June continues to be strong. This partly reflects pent up demand post reopening, but it is now clear that home improvement is proving resilient through COVID-nineteen due to the specific nature of this crisis. Customers are spending more time at home with fewer leisure options, traveling less and turning to DIY. Moving to Page 8 for 2020, we have decided on 8 immediate priorities to be extremely disciplined. I already discussed the first two priorities around COVID-nineteen and our group executive team. 3rd is stabilizing our French business and this remains a pressing priority. We have been fixing IT and supply chain issues, strengthening the supply chain team, and in October last year appointed a new experienced CEO for France. Availability and Indian like for like sales. Improved significantly before COVID 19. 4th is a new trading approach we implemented in Q4. We have selectively reintroduced trading events and have invested in Screwfix prices with good early results. We have plans to relaunch installations in BNQ in 2020. 5th is finding a better balance between local and group. We have launched 2 task forces to rebalance our group commercial and IT operating models. This will allow our banners to tell our their ranges to local needs but also continue to realize group scale benefits in branded buying, own product and technology. 6, it is critical to continue to build our e commerce capabilities Our direction is to increasingly rely orders, they are tick and collect and home delivery from stores. 7th is about focus. We must do fewer things but do them better. We have stopped several non core initiatives and IT projects. We have slowed the rate of fringe reviews Implementing the plan exit from Russia is also part of refocusing our energy and resources We hope to be in a position to share more soon. And lastly, cost reduction is a near and long term priority under our new strategy. COVID 19 is reinforcing our focus here. Moving to page 9, a few quick comments on our Q4 and February performance. Our new trading approach, better availability in France, reintroduction of so local ranges, were key to our performance. Many of these actions have been the results of the group empowering the banners. In particular, I'm pleased that our performance in France has been improving with plus 2.5% for Castorama, and plus 4.3% like for like for brico. Our banners did slightly better than the market in February. We also managed to improve like for like performance in Poland despite the soft market. So we're marking progress, but there is much work to do. And of course, we are mindful of the significant uncertainty in the current environment. Let me now hand over to Bernard. Thank you, Terry. Good morning, everyone. Let me turn to Slide 11 and an overview of our performance since the start of last year. Overall, Kingfisher's financial performance for the year 1920 was disappointing. We saw a decline in group sales of 0.8% in constant currency. Growth in Screwfix, Poland and Romania was offset by declines in B And Q, France, Russia and Iberia. Group gross margin percentage was flat in line with guidance. Over at costs were broadly flat, with higher costs from inflation, digital and store openings in Screwfix And Poland, offset by lower transformation spend. Cash flow was lower than prior year at $191,000,000. Net leverage was maintained at two times and we ended up the year net cash positive. Despite a disappointing 1st 9 months, our performance in Q4 and in the 1st 6 weeks of this financial year was more encouraging. Turning to the impact of COVID 19 as of mid March, we started to be impacted by the pandemic. We took immediate and effective action to control our costs and protect cash, while also arranging access to significant additional liquidity facilities. As already announced, the board has decided that no final dividend will be proposed given the ongoing uncertainty around COVID-nineteen. Uncertainty also means that we are not able to quantify with confidence the impact of COVID 19 on expectations for this financial year. Slide 12 is a dashboard of the key financials of the past year. Let me touch on our profits and return metrics here. Starting with retail profit, this was $786,000,000, down 3.9% with retail profit margin down 20 basis points, to 6.8%. Adjusted pretax profit was down 5.2% to 544000000. Statutory pretax profit was $103,000,000 after $441,000,000 of exceptional items. Statutory profit after tax was $8,000,000. Our return on capital employed was flat at 8.6%, with a decline in profit offset by the impact on capital employed of property impairments. On to Slide 13, Purpose of this table is to explain 2 reallocations of costs that we have made in our results to bring them into line with the latest status of the business and our new strategy. Starting with the central support costs, which include the cost of central offer and sourcing and supply chain and logistics, which are normally allocated to Kingfisher's retail banners. We have updated our allocation based on the level and type of support provided. Although neutral at group retail profit level, this has resulted in a change to reported retail profits by geography, with the principal effect of more costs being allocated to Poland and fewer to the UK. The second reallocation relates to transformation P and L costs. As promised in our half year results, we are no longer reporting transformation P and L costs separately and have removed underlying PBT as a key performance measure. To effect this change, we have reallocated transformation P and L costs to retail profit and central costs on the basis of where the costs were incurred who the beneficiary was. With the launch of our new strategy, any further startup or incremental costs of change will not be carved out in the future. For comparability, the prior year has also been restated and you can get the reallocation table within the appendices to this presentation. On to Slide 14 and gross margin for 1920. At 37%, gross margin was flat both at reported and constant rates, in line with the guidance we gave at the start of 2019. Sourcing and buying benefits of 80 basis points were offset by net pricing and trading initiatives, incremental clearance, and logistics and stock inefficiencies mainly in Castorama France. You may recall that at H1, the gross margin percentage was up 60 basis points. While we continue to deliver sourcing benefits positive Q4 like for like sales performance. In line with expectations, clearance remained elevated, reflecting significant range change across the group, including the year of $441,000,000 of which approximately $300,000,000 is non cash. Going down the middle column, the first significant item is a 6 $7,000,000 net restructuring charge, which as you may recall was booked in the first half of last year. These costs related to our plans to close 11 stores in France and 19 Screwfix Germany outlets. In relation to Russia, we recognized $130,000,000 charge, mainly attributable store asset write downs. Russia is now classified as held for sale on our balance sheet and the sales process is ongoing. The charge of $118,000,000 relates to store impairments in B and Q, Castorama France and Iberia, reflecting financial performance in full year 1920, and lower freehold market values. Exceptional cost of $39,000,000 in Ramona reflects store and goodwill impairments. Next item relates to taxes in France, totaling $50,000,000. About half of this relates to a settlement with the French tax authority as disclosed back in Q3. In addition, a provision for $26,000,000 has been booked for an uncertain position in relation to a multiyear business tax in France. Finally, other exceptional items of $44,000,000 relate mainly to IT modules and digital tools that will not be rolled out or have been discontinued. After all exceptional items, statutory profit before tax was $103,000,000. To note, we reran our impairment test in light of the coronavirus crisis, and we concluded that the impact was not material. Slide 16 and the performance of our major geographies. There are slides in the appendix detailing the performance of each of our retail banners. The summarize sales performance was mixed with like for like sales slightly down in the UK, weaker in France, Russia and Iberia and up in Poland and Romania. Profit in the UK, which accounted for around 2 thirds of group retail profit, was slightly up, offset by 9.7% decline in France and a 7% decline in Poland with the losses from the other remaining geographies, 4,000,000 higher at 28,000,000. Slide 17 provides an overview of cash flows. We generated nearly $1,300,000,000 of EBITDA and paid 469,000,000 Working capital showed an outflow of $127,000,000. This reflected an increase in stock of $70,000,000, most of which related to store expansion in Screwfix in Poland and a net decrease in combined debtors and creditors position of 57,000,000. After capital expenditure, tax and interest payment free cash flow for the year was $191,000,000. Income from property disposal was largely driven by a small number of sale and leaseback transactions at B and Q. Exceptional cash outflows related mainly to store closures and the settlement with the French tax authority. After dividends, net cash flow was positive 3,000,000. Turning to Slide 18, let me summarize how we have managed the financial impact of COVID-nineteen to date. The 3 months to April 30 was a tale of 2 halves with trading to March 14 continuing the positive trends of Q4. Followed by significant impact from COVID related disruption. Overall, group sales were down 24% in the quarter. Since the start of the crisis, we have taken significant and effective action to quickly adapt our operating model, reduce our costs and protect our cash Access to liquidity has been a key priority in these uncertain times. Today, we have over 3,000,000,000 of cash resources available and this provides us with substantial headroom should we be faced with a prolonged period of reduced sales, even if this is currently not expected. And with nearly all our stores open for in store purchasing, I'm encouraged by our recent trading. Group like for like sales for Q2 to date are up nearly 22%. However given the uncertainty in the external environment, we cannot quantify the impact COVID-nineteen on expectations for this year. And therefore, no specific financial guidance has been provided. Moving to Slide 19, a reminder of some of the key initiatives we have taken on cost and cash. As these have been well covered in our Q1 release, I will not go through the slide in detail. However, let me point out a couple of updates To regards to furloughing, by the end of May, we had approximately 10% of our colleagues covered by these programs as our stores reopened. With the exception of those who are vulnerable and or at higher risk of infection, all remaining colleagues in France and Romania returned from furlough on 1st June, with remaining colleagues in the UK and Spain expected back by the 1st July. From this state, we have decided to no longer claim under the Furlough programs in the UK and France, including for the higher risk population who have not yet returned. With regards to capital expenditure, while we acted quickly at the start of the crisis to stop non essential and development spend, we are reviewing our capital expenditure plans on a case by case basis, maintaining tight control in case we need to act quickly again. Finally, we have decided to no longer make use of opportunities to defer tax payments, and we will pay the balance of what was due in the Over the last three months, we arranged access to nearly $1,400,000,000 of additional liquidity facilities, including a term facility guaranteed by the French state, access to the Bank of England CCFF program, plus an additional RCF of 250,000,000. This comes on top of the existing RCF facilities totaling $775,000,000. Currently, including around $730,000,000 of cash generated by the business since the beginning of the year, cash at Bank is circa 2,000,000,000. This includes drawn amounts of approximately 535,000,000 from the French term facility and $600,000,000 from 11 months commercial paper issued under the CCFF. While both the amounts are not expected to be needed, even under our worst case COVID 19 scenario, it could be required should the pandemic be significantly more prolonged or severe, including around 1,000,000,000 of undrawn RCS, total liquidity that the group can access is over $3,000,000,000. I'm also happy to report that as of April 30, We held our inventory balance flat year on year despite a 24% reduction in sales in Q1. Our inventory balance was further helped by strong sales in May, with the balance now lower than a year ago. Due to the durable nature of our goods, we have not recorded any meaningful stock provisions and we are working hard to ensure good availability despite exceptional demand levels over the last month. Finally, we started the year with limited financial debt and a leverage ratio at the lower end of our medium term target range. Turning to my final slide. As I said earlier, we're not able to quantify the impact of COVID 19 and expectations for this full year. This slide, however, summarizes our performance to date. As already mentioned, Q1 sales were significantly impacted by COVID-nineteen, with group like for like sales down 24.8%. Encouragingly, we have seen a strong sales recovery in Q2 following store reopenings with Q2 group like for like sales, up 21.8% to date. Our Q1 gross margin was down year on year. This was almost entirely linked to COVID-nineteen factors, mainly reflecting the cost and a greater relative share banners, and we have had less promotional based activity relative to the fourth quarter of last year. And as I said before, we have taken significant action to reduce cost and preserve cash this year, including controlling our CapEx. As a result of these actions and the strong recovery of sales in May, our net cash on flow since January 31, is approximately 730,000,000 This is a material improvement under $250,000,000 outflow referred to in our Q1 trading update. This movement reflects a relative improvement in our sales trends over the last 5 weeks as well as from our actions to preserve cash, some of which are timing related. With that, let me now hand While managing COVID-nineteen has been our most urgent priority. It would equally be a mistake not to prepare the company for the future. And Kingfisher needs a new direction Our new plan is called powered by Kingfisher. Kingfisher is a leading Home Improvement Business in Europe. And I want to start by recognizing some of our fundamental strengths. This is on Page 23. The markets we are in are attractive. All our markets have been growing in the past 6 to 7 years, and this is expected to continue. Customers remain passionate about improving their homes and demand indicators are stable. In retail, this is quite a good situation to be in. And given the specific nature of the COVID 19 crisis, home improvement is proving resilient. Home improvement has higher profit margins than many other retail sectors such as grocery. We do have growing online competition. That home improvement is partly insulated versus online pure plays. Because of the specific nature of DIY, the importance of advice and design expertise and the bulky nature of many of our product we see a clear role for are an asset to enable e commerce. It is clear that we have leading positions in all our key markets and awareness of our banners is stronger than ever. We have strong commercial assets including our 8 group sourcing offices and all exclusive brands. Our 77 colleagues are knowledgeable, skilled, and have been with us for over 7 years on average. Our credentials in responsible business practices our industry leading, especially when it comes to the sustainable sourcing of food and paper. And finally, We have a portfolio of distinctly positioned banners. These banners can address diverse customer needs and segments. I will talk more about this shortly. Looking back at the past 4 years, I can see some clear achievements as listed on page 24, and we can build on this. Infisher has leverage its scale to deliver sourcing and buying improvements. Infisher has built design and sourcing capabilities for its own exclusive brands. Bassroom and power tools are great examples. Investments were made to improve the price competitiveness in VNQ And Castorama threats. Our index today is at $100 lower versus peers and more than $100,000,000 in GNFR and operational savings have been delivered. A common SAP template has been fully deployed in BNQ, rollout is in progress for other banners. There have been some execution delays that the underlying template is robust. Infisher Established Finance Shared Service Center in Poland, a good first step to driving back office scale benefits. At the same time, has been disappointing. But here, I believe that many of the issues were self inflicted to be direct and share my diagnostic with you on page 25. As a group, if you share not only tried to do things together, but try to become 1. There is absolutely no doubt that there is much we can do together. And that we should leverage our scale intelligently. But Kingfisher is comprised of distinctive retail banners addressing diverse customer needs. We should not aim to become 1 with the same range the same proposition, same marketing of same merchandising. The local group operating model was imbalanced Many key customer facing decisions such as range creation, pricing, promotion, where centralized, Another result, the positioning of our banners was diluted. In the end, the proposition weakened and banners lost the agility to respond to local customer needs. Other time, trying to become 1 with such diverse banners ended up creating an overly complex operating model. With duplication of activities in efficiencies and an increase in central costs. Infisher became more of early product led versus being retail led. It focused time, energy and capital on centralized product development. We need great product development. It should be balanced with investment in the retail proposition. And lastly, Kingfisher attempted to do too much too fast. There were multiple large initiatives running in parallel, such as changes to range, IT systems, supply chain and organization. And we must recognize that France was the most affected. These issues directly impacted the group results with declines in like for like sales and market share, Excluding Screwfix, E Commerce participation moved from less than 1% to just 3% over 4 years. And at last, significant costs and inventory were added to the business. Let me now discuss markets shift on page 26. The shift towards online is clear in home improvement. Our markets are at different stages that all are experiencing the impact of this change. And of course, there has been a further acceleration of this trend during COVID-nineteen. Then there is a gradual shift towards smaller stores, smaller and centrally located stores, are increasingly meeting the need for convenience and speed. Natural markets like the UK and France discounters have been growing in home improvement. And finally, there has been a shift towards do it for me as urbanization and incomes have grown. But it is also constrained, for example, due to limited supply of trades people. And our data shows that the shift is very gradual. What we are seeing here recently is that COVID-nineteen has somewhat depressed demand for do it for me and favored DIY. We'll also see new trends and innovation in this field with service platforms like Needham. My primary focus in recent months has been to get close to our customers. What strikes me is that we need to be really nuanced in how we think about customer needs across our markets. As you can see on Page 27, there are indeed some share needs across our markets. This enables us to develop great own products and sell them across our banners. But it is wrong to assume a one size fits all approach. If you take a category like painting, we will discover that frequency of repainting is different. Once every two and a half years in the UK, once every 8 years in France on average. The Jets and price points are much lower in the UK than France, and the colors and brands sold are different across our markets. I would talk to many other categories where we can see differences. Not to mention that there are different customer segments such as pro or extremely budget conscious shoppers. The world is not 1. The customer is not 1 and is not becoming 1 in the future. And this is a key principle behind our new strategy. Moving now to page 28 to talk about Kingfisher banners. Each banners as its own DNA, its stellar proposition and operating model to best serve its target customers. We operate General Home Improvement Benefits such as BNQ and Castorama. They offer broad choice and are positioned competitively on price. We have trade focused banners in Screwfix And Tradepoint. Their proposition is specifically designed for the Pro and designed to guarantee convenience and speed. We also have Brico Depot in France and Iberia where we operate a discounter model. What drives success here is tight ranges, great availability, basic levels of services and unbeatable prices. And supported by a much lower cost operating model. True discount model, which has great potential. Let me summarize our strategic direction on Page 29. Firstly, Kingfisher banners are not the same. And this is a strength. They address diverse customer needs, operate different models and each will have a clear positioning and plan. We will power these banners as a group. The role of the group is to enable our banners to sell their customers better. We have a clear vision to build customer proposition for the future, E Commerce, with stores at the center, more compact stores, OEB led differentiation, a mobile first experience and a compelling services offer are the art of this vision. A balanced local group operating model and a giant culture will support this direction. We'll build a culture led by trust. We'll adopt a done is better than perfect mindset to test and learn. We will lead the industry with our responsible business practices and will be simpler and leaner. This means doing less, lending in faster and reducing our cost and inventory. Let me now move to page 30 and bring this to life. We are an expert in Home Improvement that our banners address diverse customer needs. It is important that we fortify each banner's role and proposition. The more balanced local group operating model is key as I have talked about. We'll make sure our banners can take decision they need in order to serve their customers better. We have been working on clear priorities for all our banners. In the interest of time, let me pick up on 2 of them, Screwfix and Castorama France on page 31. Scrufix is a unique retail model. Customers generally value the proposition and returns are very strong. There is clear potential for further growth. And we have a turbo plan for Screwfix. Firstly, We plan to open more stores and to maximize our share in the UK and Ireland. We are constantly looking at the return on investment from new stores and improving store operations. This is allowing us to unlock new locations more profitably. We also have plans to significantly improve the Screwfix proposition with targeted price investments, which we started in 2019, extended ranges and innovative delivery options. There is also a large opportunity for Screwfix to expand internationally. We are confident that this model can work outside the UK and we are looking at asset light ways to start with. We are starting to prove this in Ireland and I can confirm that the opportunities are clear, but today is too early to share all the details. I'm fully committed to investing in Screwfix. Castorama France has been underperforming for many years. My view is that some of the issues are castorama specific and some have been infected by the group strategy. For example, fewer trading events, the listing of higher end products and IT and supply chain disruption. On the positive side, we can build on Castorama and during brand equity. The Castorama brand reputation has also improved given their responsible actions and agility during the crisis. As mentioned earlier, our near term priority is to fix the basics in the team structure, IT and availability. As you saw, we have early encouraging results. Medium term, we must position Castorama to grow again. We are taking e commerce very seriously and we made significant progress during COVID-nineteen. We will strengthen our ranges to OEB and we brought our choice. We will reintroduce training events and reinvest in services. In parallel, we will drive cost and inventory reduction. Let me also briefly comment on Iberia while there has been interest in the business, We have reviewed the original decision to exit. Ricodepo is well positioned as a discounter in the market, and we believe Our new strategic direction can take this already profitable business forward. It is important for our distinct banners to have their own priorities that will continue to unlock value from doing things together as a group. And as I said, there are many achievements from the past years on which we can build on. For example, OEB, our sourcing offices our SAP IT platforms, our shared service center in Poland. And these are our group sources of power as outlined on Page 32. Let me start with our own exclusive brands. We have strong design and sourcing capabilities in place and already developed very successful all exclusive brands. They allow us to offer differentiation, great value and will bring growth and better margin. Think to this, we have a strong softening and buying organization on which we can build further. On 2 technology, it is critical to use the scale of the group to invest together in strong technology platforms. It will remain an important area of investment in the future, like for many other retailers. As a group, we are able to strike global partnerships in this field. Next is how we will use group shared services. And we see further opportunities here. We are also establishing several Kingfisher centers of excellence to set the right ambition and accelerate innovation in key strategic areas. This include e Commerce, digital customer journeys, customer data, store concepts, services and supply chain. We speak here about very small teams of experts who can move fast. And lastly, Our group gives a framework for our people, our culture and our values, which is the strength. This is the role of the group. Our new plan as on page 33 has 2 different horizons. In 2020, our immediate priority is to fix the business and to manage COVID-nineteen which will require focus and discipline. Looking further forward, we also have 7 strategic priorities to simplify our business and bring Kingfisher back to growth. This is where we will put our time, energy and resources. As I mentioned, we have launched task forces to redesign the commercial and IT operating model Let me now give To page 34, we have a clear vision for how we will build tomorrow's customer propositions. This vision is informed by the shifts that we see in the market and customer needs. The key priority is to grow e commerce sales fast. And here, there are 2 significant shifts in our strategy. The first one is that we will leverage our stores as a primary way of picking and fulfilling others, including click and collect, drive through, lockers and same day next day home deliveries. In the past couple of months, we have made rapid progress on this front, and we need to sustain it and the second shift is that we will fully prioritize the rollout of the group E Commerce Technology Stack. In addition, looking to the future, We are also beginning to explore the potential for our marketplace offering, but it is very early days. Next, is about building a mobile and service customer experience. Services are another reason why stores will remain key in our sector, and our offer must be compelling. This includes making sure we are market leading on existing services such as team rocket and patency, but also involving our offer to a full suite of design, planning, visualization and installation services. We will also lead with mobile and leverage customer data analytics to improve our reserve customers. Our own X-ray brands are also a key part of this vision. We continue to grow our OEB participation from a base of 39% today to do this, we would shift our focus from unification of ranges towards own exclusive branded products. We'll deliver even better value for money to our customers, which is important. As we enter a tough economical cycle. We'll make sure our OAB portfolio is supporting each banner's proposition for DIY for trade and for discounted banners. We will test, compare store concepts and adapt our store footprint. We already have high AROI new store opportunities that we continue to invest in, especially Cufix and Poland. Beyond this, we are increasing our trials of compact store concept. We're also aware our big box stores will need to evolve. This will include e Commerce, dark store space, customer experience and advice, and rightsizing when required. And finally, we're exploring store in store concession and franchise partnerships. On page 35, we have a clear cost and inventory reduction program, and we are committed to it. As you can see, it covers the full range of operating costs at group and in our banners. And buying and sourcing. Kingfisher delivered efficiencies in the past, and there is further potential for upside. We renewed strategic partnerships with the top 2017 international brands, drive engineering and sourcing benefit in our whole exclusive brands and reduce the level of clearance in the business. Significant excess inventory has been built up over the years and we have a clear plan to reduce it. Moving to Page 36, Infisher has a long history of leading industry and responsible business practices. I would like to take this a step further. We have chosen 4 areas of focus: 1, to help tackle climate change by becoming forest positive by 2020. 2, 12 meg greener LCR Homes affordable 3, we contribute to fixing bad housing and 4, to become an even more inclusive company by building skills for life. We have clear targets associated with each of these areas. And as you can see on the slide, For the first time we are linking a part of our bonus incentives to these commitments. To page 37, we started to prepare our new plan before the COVID 19 crisis. Reflecting on the last three months and convinced that COVID-nineteen reinforces our strategic direction. In fact, it pushes us. Let me start with our customers. As people emerge from confinement into economic downturn, we will see a fresh search for value. We already offer a price index of $100 or less versus close as compared to others in and we will use the power of our OAB and our discovery banners to do more. Customers have new improvement, your new home improvement needs, as I spend more time at home, new ways to use your space, our address to long term working from home. And of course, being recognized as a responsible business, is even more important than before. Then we have seen a further acceleration towards online. In the past few weeks, have proven the importance of boutique stores at the center of e Commerce. And this is a key element behind our strong key combos across many of the enterprises. And it is more important than ever to be lean and focused We must retain the agility we have shown during the crisis. This means we must test and learn fast and empowering our banners has been a real source of this ability. In parallel, we COVID-nineteen wishes us to be bolder in our existing cost reduction plans. Moving to Pexercise, beyond our immediate priorities, let me be clear that in retail, everything starts with top line growth. Our ongoing financial priorities are firstly to focus on sales growth in all retail banners. We will also drive benefits from buying, sustaining and product development, and it also has reduced cost and inventory. In the end, our focus will be to grow like for like sales and absolute retail profit. Capital investment will be subject to strict returns criteria, We aim to maintain an investment grade credit rating to recognize the importance of dividends to shareholders and we will review this as COVID related impacts become clearer. Finally, to Page 39, let me tell you the things. I really want you to take away. Our near term priority is still managing the impact of COVID-nineteen on our colleagues, our customers and our operations. We are very mindful of the significant uncertainty that exists and we are working hard to be prepared for all scenarios. Looking forward, I believe that the opportunity for Kingfisher is significant. The home improvement market is a good market to be in and Kingfisher has many strengths. Our banners are not the same. And this is the strength. We have a clear new strategic direction, power, bike, and future. I'm more convinced by the direction after the few past weeks of managing through this crisis with our teams. We have a strong new group executive team, We are committed to operate with new standard of execution discipline. This will mean remaining focused on the most high value initiatives. As you have seen this morning, our early actions have delivered encouraging results There is much to do, but we are excited about the opportunities that are ahead of us and as a team, we are committed to returning Kingfisher to growth. Thank you for your time. I would now like to invite any questions other to your operator. And we will take our first question from Richard Chamberlain from RBC. Please go ahead. Your line is open. Thank you very much. Good morning guys. I've got three questions, if that's alright. First one is on availability. I wonder if you can give a bit more color on how that has improved year to date, maybe give some idea of, what metrics you're looking at for in store availability and some idea of further upside to come. The second one is on the SAP rollout. I think you've said that you paused it for Brico depots. So I wondered, when you anticipate finishing the global or the full rollout of SAP. And then the third one is on Romania. It sounds like you've changed the longer term projections. And I wondered what the cost saving from the consolidation of the 2 distribution centers in Romania will be this year. Thanks very much. Yeah, thank you. Thank you, Richard. Let me start with the 2 first questions and then now we'll comment on the last one. I would say there are 2 periods of time. I would say up to March, We clearly had a big improvement in our availability, especially in France, I think it was due to IT disruption and as well lack of management capability. In France. So we recruited many additional managers. We spend a lot of time and energy on that. And the availability level before COVID reach back about 98% for Casto and Brico in France. And that's part of the good results of the sale in France. Is a clear improvement in our availability. I think, you know, the KPI, our standard one is really availability installed. Usually we follow-up the total range or we follow the top 1000 of top 500 best sellers and we follow that on a weekly basis. And I would say after COVID, we are today in a situation when we have extremely polarized demand. So our, I would say, availability is well under control, but we could have, for very specific categories and for very specific market today some availability issue, but that's really focused on limited number of categories. On SAP, you are right. We consider the rollout of SAP in France was delayed, was late was, let's say, was facing several issues. And for this reason, we have decided to pause Brico Depot for 12 months and to have all the energy of the teams to Castorama in France. So I'm happy to see that the rollout of SAP in Castorama now is a question of weeks or months. And we will restart Brico Depot rollouts in France early 2021. And it will be SAP implementation has been fully done in Poland and Romania now. So finally, Brico Depot will be the last betters for which we will implement SAP. In my view, I think we have a good template. We have more at, let's say, roll out issues, execution issues, but the basic template of the SAP is rather good. One word on Romania and then I leave it to Bernard. Indeed, following the acquisition of Fratica, part of the job we have to do is to finalize the integration. So we have now SAP in Romania in all the stores, Brico and now Practicar, the Practicar became Brickell. And we are as well working on, indeed, our supply chain. We have 2 2 distribution center. And we have the plan, by the end of this year, before the end of this year to merge those 2 DCs in Romania. Yes, Richard. Just to give a little bit more color, as you can imagine, the impairment that we took, it's mainly goodwill sorry, and certain store assets really related to the Proctaker acquisition. I think if you look at the business, the losses We're really driven by Practiker, also required some integration costs, as mentioned, rebrand, ranging implementation, back office implementation. I think the good news is that all that is now behind us. It's all progressing well It's all been rebranded, Ricodepo, selling the same products. So I think we're in a good position. Now we expect still the business to be some of us making this year. But trending well to a breakeven position and then profit. Next question comes from Simon Irvin from Credit Suisse. Please go ahead. Good morning, gentlemen. Thanks for the presentation. I'm three questions for you. The first is the store pick model and how that's going to work if you are going to move towards more compact stores, with limited range, is those 2 appear to be somewhat contradictory. And second, it's just around stores generally is that the product has been to them recently. They feel very under invested, which I guess is because the business hasn't kind of committed to stores. I mean, do you recognize that? And is there a plan to start reinvesting in in those stores you want to keep. And the 3rd is on is on range. Obviously, you since you're kind of committing to, the effect of the kind of unique element of ranges. We've heard endlessly about kind of which bits of work we haven't really heard is what bits haven't worked Can you just talk through some examples of ranges that haven't worked and what you think you can do about them? Yes. Thank you, Simon. Yes, I come to your question. I think the first one is around store picking and that's a topic that is very, very close to my heart. Have been lucky to spend several years in China. And that's something we learn in China, in Food Retail is that you can go very far with a store picking proposition in e commerce. And that's probably what and plus so much during the crisis is from day 1, we have decided to accelerate the stop picking proposition because at the end, you have all the inventories, you have all the range, you can do a very efficient click and collect. And furthermore, in the medium term, you will have more trends around the, what I call, the fast home delivery, same day delivery of few hours delivery. So I am strongly convinced what I saw what we you see in China in the United States, what we have been doing at Kingfisher the past weeks that you can go very far in the store picking proposition. I can tell you that today we are above 50% of the orders today are are done with click and collect. I think it's not contradictory with compact stores, even in compact stores, you have 1000 of SKU, they are very flexible model. You can have a store by store, a slightly different go to market and organization. And even with compactor, the store picking organization can be very efficient. Remind you that if you look at Screwfix, it's probably our most powerful format for stop picking. We are speaking about 1000 square meter store and small warehouse. So I'm strongly convinced that we can go far and the fact that we are moving to a bit more compact store is at all not an issue. For CapEx, I think you're right. What I said previously is that we were a bit too much project led and not enough retail led. It means we dedicated big part of CapEx to range reviews. Obviously, we need to continue to do range reviews. We need to continue to push our our new products. But I think it's not balanced enough and we need to, let's say, within the the CapEx envelope you saw the past year to dedicate a greater proportion of our CapEx to store methanol. On ranges as well, it's a very key topic. I've been mentioning that we need to do things together, but I don't believe we should become one banner. And the different banner, they have different ranges and different size of ranges, you know, Brico Depot in France, we could consider that around 15,000, 16000 SKU is correct because it's a discounter. And when you go to Castorama or to BNQ, we speak about 40, 50,000 SKU. So I strongly believe that in the long run, to have powerful OED is a key role in retail and it will help us to differentiate. OAB can be unique, that can be as well value for money. When we say unique is really special design, a very innovative component or functionality, you could have a taps, let's say, water So this we have unique OEB that we have as well value from an A OEB. You have OEBs that are a fantastic value from an balance. And that's as well part of our differentiation. On the other side, I don't believe anymore that to run for unification, absolute unification of range is the right direction. We love a core range across our banners, but we need to let the local flexibility, to be in Q2 or to Spain or to France to add up local brands. I have in mind a British paint brand that are being decided to be implemented all across our banners that sell very well in the UK, but that sell only in the UK. So it was part of your unified range. But it did not fit with the local customer needs. So the unification is a tool. It cannot be the target. The target is always a customer. And that's probably the key topic here is the strategy should start with a customer. You know, the group is a tool is a resources is our resources to support the customer proposition. The ultimate goal of the strategy cannot be to build a goal. The ultimate goal of the strategy is to bring a better customer proposition. That's it. Thank you. Next question comes from Warwick O'Kane. Yes, good morning. I've got three questions as well, please. My first question is on B and Q. You mentioned on page 31 relaunching trade points. It's something that been mentioned in the last 5 years. Could you talk a little bit more about, what you see for the trade point, which I'm getting is still about 20% of B and Q overall. The second question is, that the previous management team a year ago set out quite a radical role for the convenience for stores. Just wondering if you could flesh out a little bit more how you see the convenience format going forward. And the third question is, following on from the last one, you've been clear about how you think about ranges in terms of unique and unified But just in terms of the number of SKUs across the whole business, do you think that continues to need to be rationalized or do you think there is actually some scope for increasing the SKU count as you move more local? Thank you, Arik. I think it's indeed, I believe that trade point is important for us And you know, it's your comment is very good. It means we never mentioned credit points recently because it was not at the center of the Kingfisher strategy. And to come back to my previous point, we start with customers We start with different customer needs. And part of our customer, they are pro. They go to Screwfix, but they go as well trade points. So we want to revitalize trade points inside BNQ. And I must say the past weeks, during COVID, we had very encouraging results for our trade points. You're right that we are about 15% to 20%. Of BNQ sales are made through trade points. I think there are different categories than Screwfix. You have more AV products So we can target different customer proposition. And as you understand, in my view, we need to push all our different banners and trade point is one of them. A convenience store and overall smaller format is as well a key priority. We strongly believe that in the long run, a big part of retail will be around smaller formats. I think in home improvement, many retailers are working on it. And I still believe it's a key topic for us And what I wish you as well, you know, is to empower our banners to have more trials. You cannot just have one trials in the UK. And wait for the results to take less than for the full group. So we will do more trials. It will be done in a coordinate way buys the different countries and banners. We might have slightly different solution, and we will learn from them But indeed, I strongly believe that we need to find a good compact or express format in home improvement. Maybe another comment on that. I believe as well on the medium box. We usually say we have big box and we have convenience stores. Interestingly, if you look at BNQ, a large part of BNQ are what they would qualify medium boxes that are a very efficient and successful model, and that's a good proportion of the BNQ store. So you could have different size of store, depending on the catchment areas. On the range, I would say there are a lot of a plus and minus in my in my answer. Sorry, I would be a bit specific, maybe too complex, but When you are on discount brand like Brico Depot, you need to stay on short ranges. And today, probably we have pushed Brico Depot too high. So the ranges of Brico Depot should come back to a slightly lower number. But on the opposite, when you are on choice like BNQ and Casto, as you know, we wanted to become 1 that we have pushed Castool and VNQ to reduce their ranges, and I think it's not the right direction. We need to allow VNQ and even more Casto France, to increase a bit their ranges because today, the choice level we have, for example, in Casto in France is not good. Is not enough. At the same time, when I look at my inventory program, you always need to clean regularly your engines because you have a, you have a slow moving item. You have SKU with a very small level of sales and those SKU you need constantly to clean part of your ranges to, let's say, to stay on the active SKU. So I would say overall, I would not expect a massive increase. I would say for some of the banners, typically, Castorama and France, BNQ, we are a bit too low at the moment. And let me just expand a little bit on the last point. Obviously, it's subject where close to my heart costs and inventory If you look at the SKUs, we've got about 200,000 active SKUs. But of those, we probably have 2025,000, which we don't sell. And we've got another 60,000 where we sell less than 1% of our sales. In the 7500,000,000 dollars, $500,000,000, about hide up in inventory, where there's a lot that we can do to offset maybe a range expansion somewhere else. In addition, I think if your point is to the overall inventory level, clearly it's higher than we want. The stock days have increased in the last couple of years that we've got a good plan together with Martin Lee, who's responsible for our supply chain to not only address the shorter term disruptions, which have caused some of them, but also to look at the ranging and deployment which I just discussed, but also at planning, forecasting, making use of the best tools so that we control even better the purchase's quantities in our lead time. So I think there's, it's definitely on our list and there's an opportunity there. Thank you. That's very helpful. Next question is from Jeff Rado from Morgan Stanley. Please go ahead. Yes, good morning. A few questions, please. Most of them very quick. The first couple of quick ones, could you just give us some guidance on CapEx this year? I understand it's going to be down, but just what sort of level you're currently envisaging? Secondly, should we expect more freehold tails over the next few years? And if so, sort of, what roughly what sort of quantum? Thirdly, on inventory levels how big is the opportunity to free up capital from inventory over the next few years? If you could just give us some sort of idea how much you think you can reduce it? And then finally, a sort of slightly more qualitative question. In terms of the buying function, obviously, the buying function was centralized in a single buying function was created under the 1 Kingfisher strategy. Do you think that is the right way for the group to run going forward? Given the greater freedom within the individual business units to have their own ranging? Okay. Let me, hi, Geoff. Let me start with the CapEx. Obviously, the historically, we're investing about 3% for 350,000,000 We can do a lot for that. Obviously, this year, we're prioritizing. I would say, if you have month ago, I did see a lot higher. Not obviously we're with the change in duration, we're still hybridizing, but basically, we look at everything that comes by. It's so I continue the exact answer within prioritization because we also want to be able to adapt if things aren't unlisted again. But it's likely to be lower than what we had, but obviously we watching it on a basis. In terms of the free hotels, obviously, we we look at opportunities when they're there, obviously trading off what could do with business. You should see some of that coming through but nothing we can guide you on today. In terms of the inventory reduction, obviously, we've got some other plans there. If you look at historically in 2017, we were at about $2,200,000,000. If you look at this year, we had $205,000,000,000 stock days on from $17,000,000 to $127,000,000, not Oh, some of that obviously is the reason for that that we change the supply chain model is more on, you know, for sourcing, which affects that. That's more difficult to do away with, but I think in that context, there's more to be done. If you look at the historic inventory level questions where we can get there, but it gives you some of the differences that we're looking to bridge. A few words on a buying and so senior. I consider that we unveiled on what that means on the past 4 years. It was a very good job that's been done on sourcing. We have built a couple of years at a group sourcing of businesses in Asia in Central Europe, Western Europe. So obviously when you are relying on sourcing for private label, right, the table is 40 all that is done. But together, we have senior teams, we have quantitative teams all across those countries to control and to work with our suppliers. When you are typical international large suppliers, It will be an advisor group, and we mentioned in the you have the page 45 of the presentation that we will to build more long term partnership with our 2060 brands. But there are large property of suppliers that are all across our country, and this should be managed at a good level. Now when you are only in the UK and you are only Poland will be flexible and we rely more on the panels for all the for the local purchasing. Our next question comes from and Chris Klow from Societe Generale. Please go ahead. What is your view on do it for me? Are you thinking of bringing installation services back, to any format in the medium term? Yeah. Thank you for the question. First, indeed, they are, as I mentioned, there is a very gradual shift to do it for me. It is a trend, but all the survey we did recently that this shift is rather gradual. But we have brands for the pro. We have Screwfix I mentioned trade points. And if you look at some of our countries, for example, in Poland, the proportion of Pro going to our stores is significant. So I think we wish to address the do it for me market as a DIY market. I'm a strong believer in services, you know, when you are in big box like Casto, B and Q, or across our different countries, we need to have comparing service proposition. It's just part of our business. I think here, we we will restart at BNQ in the UK installation for Kitchen this year. And that's a priority for us. And think that's just our business. We need to offer compelling services in our main big boxes. Another area that is interesting, where we see interesting development is what I call service platforms. You know, you have internet platforms that can put in relationship jobbers or trade people with customers. I think Kingfisher is, is well positioned, you know, with crewfix and with BNQ, for example, to think how we can bring together those two population. And I think that's a topic, what the service platform on which we will do some work in the future. Our next question comes from Kate Colvard from Investec. Please go ahead. Good morning, everyone. A slightly related question. The previous management did present this good home. Future vision of DIY, one where the customer needs, more project solutions. So is that your sort of view of the way you believe DIY will go? On another subject, in France, Caso and Brico. Could you talk about how you see the price, propositions differing? Between the two brands going forward? And a final question, just on promotional strategy, It feels as if you're buying into a more promotional strategy going forward. Is this likely to impact future gross margin, or do you feel you can offset this with future buying efficiencies? Thank you. Yes. Thank you, Kate. I start with Good Home. For me, Good Home is a good product brand. You know, we have a many, OEB brands like like Guido, like Elbora, like site, like, and Good Home is a great brand, but this is a this is a product brand. Again, as I said previously, I don't believe in the that the world is 1, that the customer are becoming 1. The customer, they are different. We have different vendor, and that's very good. So I don't believe that, you know, Gudome is is the ultimate, better strategy. And on the other side, I strongly believe on BNQ, on Screwfix, on Castorama and Brico. On France, I believe we are lucky to have 2 different banners that are different. So Brico has already a very strong price positioning and is a typical discounter organization with low ranges, very efficient logistic organization, very efficient organization in France. Overall lower cost base, limited services. And that's really the DNA on which we can build. So for me, Brico should dominate by the price, and we should keep our leadership on price, for Bouygues in France and in Iberia. And for me, the promotion in Brico is not the goal. We should have very strong permanent prices at Bouyguesau with Arivage, but you need to know that Arivage is usually not permanent offer. They are spot. They are one time and 1 off promotion. Cash flow should differentiate for Brico, should differentiate on choice on the great service proposition, churn and some trading events. We need, you know, it's part of our business to create events when you are in a big box format. So on the margin, again, for me, you will have opportunities and you will have additional trading events and probably price investments, for example, as Screwfix. But we have opportunities I think on margin, you know, I said we have good capabilities in buying and sourcing on which we can build further. We will have our mix of OAB as we wish to grow the proportion of OAB and our OAB are, as an average, higher margin that the average of the category, it will help for the margin mix. We'll have a bit less range reviews and then a bit less of clearance. So again, I would not guide on margin, but you have Indeed, we want to be competitive overall. We want to have a bit more trading events. We will need to invest for some of our banner positioning, but we have opportunities on the other side. Great. Thanks so much. Next question is from Jeff Lowery from Redburn. Please go ahead. Yes, morning team. Two questions, please. Can you point us towards a non food retailer globally who has attempted to run a multi banner, multi format, multi customer, multi geography business at scale. And has driven it successfully. 2nd, when we think about Screwfix, you've obviously been on a journey of tactical price investment are you comfortable with that being a double digit EBIT margin business? Or is there a temptation to do more on margin to drive the overall sales potential of the format? Yes. Thank you, Jeff. Stop is number 1. Very, very clear the answer. You know, you look at Adelio, they have more banners than us. In many countries, there are 3 banners. I don't want to give you all the name. You can look at that, but there are many, many different banners and they are creating more banners. Coming from food industry. Usually, you have very different banners when you speak about discounter when you have a you are in a premium niche. So So I think it's on the contrary, a very common retail practice to be able to support different commercial proposition. You know, the world in the future will not be unique, will not be one. We are in some ways, have to address the local customer proposition. And this is on the opposite global trend. I don't want to speak about consumer goods, but look at the consumer goods brand that are buying or developing additional local brands. So I strongly believe that this is a trend you see in retail. So we have diverse banners, but we need to be flexible enough organized in our business model to power to support those different banners. Screwfix, I think, is a fantastic business proposition. I can tell you that today, we are below 100 So the price index of Screwfix when we speak is below 100. We have very good price proposition at Screwfix. And we will keep it, and we will keep this leadership. And I consider that Screwfix has many options in his customer proposition, we are constantly looking at new technologies, new ideas to improve our business model. I just said previously that we intend to open more stores at Screwfix. Probably a bit more than what we thought 1 years ago because when we always update our expansion software calculation. When we optimize our cost operating model, we discover that we can still open a bit more stores. So I think Screwfix has enough resources, innovation to continue to be a very strong business model, while being competitive and I would say a step below 100 on prices. Who's in the peer group that you get to below 100 on Screwfix pricing? Well, you can get that the main peer group is, is to station, but we are looking at all the trade that says the trade It's a trade proposition. Our next question comes from Georgina Johanna from JP Morgan. Please go ahead. Good morning, everyone. Two questions from me, please. The first, just on market share, since you've opened reopened sort of your stores across markets. If you could just comment on how much share you think you've you've taken or or not as the case may be. I've seen there were perhaps the number of perhaps some of the smaller players that haven't reopened, but anything you can sort of share on that would be would be great. And then the second, just really how we should be thinking about the cost base, next year and in the medium term. Obviously, lots of moving parts. You talked about COVID related cost savings. You've talked about more sort of underlying cost savings in the business. And then presumably, there were also some cost going in near term, related to sort of maintaining health and safety around social distancing and so on. So if you could just help us think about how we should be putting all of together, please? Thank you. Yes, thank you Georgina. I'll start with the market share. If I look at the UK, we don't have, you know, home improvement market shares. I will not speak about competitors. I think we decided to close our store on day 1. And to rely and to rely on click and collect and home delivery. I think we did that overnight We had very early, you know, ready overnight. We had a kick and collect and online proposition for stores. Which was incredibly successful because we were up to 4 times growth. Then we decided to reopen our stores and it is true that I think we have been the first one to reopen stores, big boxes in the UK and our sectors, which I think the a very extremely well organized health and safety measures. Screwfix on this side, the same thing overnight the 1st day of the confinement moved to a new click and collect model and later on has been, copied by some others. So I have no market share in the UK, but I think we were always early versus our competitors. In France, what I would say is we have a, we had very good trend before COVID, if you look at the bond defense data for years, we have been far below the market And since November 2019, we have very clear improvement. We are very close to the market, and we even did better than the market in February. Then starting from March, as we decided to close and some of the competitors in France stay open, you need to know that you have a lot of franchisee improvement in France. Usually, they have one store and they all stay open. So it's difficult to really read the commercial performance in France, you know, in March, April, May, because I guess it's purely the local franchisees that will gain market share versus Adeo and versus us. But I'm very happy with the improvement in France up to mid March. On the cost base, 2 comments and obviously, Bernard will complete. When I look on the 5 principles, I said on my page, on the page 29, the 5th principle for us is simpler and leaner. So you see how it's important for us to work on cost. To have a simpler organization that has well to reduce our costs. So I can tell you we are strongly determined. I think we have opportunities ahead of us. I think in the short term, and then I will give you the figures, obviously, COVID, bring a little bit more cost to operate because of the PPE we need to provide. But overall, I think we have a lot of cost opportunities. We have as well, in the previous plan, some transformation costs that will, that will, fall away. I don't know, Bernard, do you want to comment on that? Interesting question. Let me dissect it in two pieces short term related to COVID. Obviously, interesting for store close and now very strongly selling. We need to see when is it going to stabilize and we'll have a little bit better view. But for now, PPE is costing us, we expect about $25,000,000 to $30,000,000 in the year. Obviously, we do have some higher operating cost in the stores at checkout with the Marshling. That interestingly, what we do see, we took some, pretty significant actions immediately when the COVID pandemic started, in areas such as marketing, head office, IT, GNFR, which still now has helped us offset that. Now, we'll we're also hiring more people, giving the sales in the summer. So we'll see how that goes into the mix I think for now, we've seen a reasonable offset, but obviously need to see how that involves in the rest of the year. Obviously, for the longer term, simpler and leaner and growth of retail profit and in that equation, costs will be an important one. There are clear areas where we've seen those increased supply chain, central and support cost, IT, but also property. So those are all under review, and that will contribute. Now obviously there will be some offsets. We're still growing with our stores. There's still inflation. And as Thierry said, there's some change cost that we'll have to incur. But in the mixed, we think all that should contribute to the improvement of our retail profits. Thank you very much. Next question is from Adam Cochrane from Citi. Please go ahead. Good morning guys. A few questions from my side. I'm a little bit unclear as to how we should measure your your success in terms of in terms of this plan. Would you have any, at some stage milestones to share on on what you intend to deliver? I I can't really get a feel for what you're targeting how much it's going to cost and how long it's going to take. So if you think of an investor sitting there saying, how do we know if management is doing a good job compared to what they're expecting and any thoughts on how we can help measure that and maybe what some of your, measures that you're targeting. Secondly, the start turnover at Kingfisher has been, I would argue high at the senior level in the last few years. Have you identified a a cultural issue that that's created this this turnover, in in terms of senior staff if you have identified it, have you been able to to change it? What are you going to do to get them all behind the new plan to make sure it goes as smoothly as possible. And then finally, interestingly, you talked about doing less, but actually achieving it and getting things done. How does this fit in? You you talk about doing less, but getting it done, but the the number of, initiatives that you're outlining is actually quite a lot. Does that mean this program will take a large amount of time to actually achieve? Yes, thank you, Adam. I think what I said is it starts with growth. I strongly believe that in retail, you always have to start with growth with customer, with customer needs, and at the end like for like growth. So I think for me, the first criteria on which we want to be measured is the top line growth. And because of that, I would say the second or the, at the same level, is the absolute retail profit, retail profit in value. So that's what is driving us today. I don't want to guide, you know, and we'll not guide on the margin or a cost ratio. I think we told you that costs inventory are one of our key priorities and we are committed to that. We see opportunities for the margin, but we should start with growth, with sales, and this should drive our profit in value. Obviously, I spoke about e commerce. I spoke about OEB. So you can guess we'll come back to you. We'll discuss about the OEB participation. Our online, how much we do on click and collect, how much your orders through mobile, etcetera, etcetera. But at the end, this is growth. You you mentioned the the turnover. I would say, I don't want to spend too much time on the past. I'm sorry. I think probably when you do such a huge transformation, when you want finally to become 1, you can expect that it's a major transformation is a change of mindset for the team. So probably it explained that. And I am very happy that we built a new GE with a lot of strength inside Kingfisher with some people coming from outside. You know, when you are in the middle of the crisis, you see the new team You see all the banners reacted. And I think because of the starting from last year, we started to empower the banners to to find the right level for the group to operate in a framework to support that at the end, to let the banners be more agile and flexible. I think this is the reason for which we have been relatively successful in the past weeks. And that's the spirit, you know, of accountability of the banners, of freedom, of agility. And somehow trust, it means we have to trust the teams. We don't need to control the teams. That's why I mentioned trust. So this is probably the part of the culture I want to push in the future. Indeed, I want to do less. Again, I don't want to spend time on the number of initiatives we stopped. I want to do less. We need to spend a lot of time on prioritization. I don't think when you look in detail that the number of actions that I mentioned are many I think he will be done over time as well. I believe that it's more on race, you know, short term, 3 months, 6 months, short term actions. And when you are done with it, you move to the next one. And during the crisis, you know, the past week, it's what we have experienced. Small number of priorities extremely fast and probably we are learning from the crisis here as well. Just just one follow-up on what you said there, like for like growth and absolute retail profit. If you have to choose between the two, either in in the short and the medium term is prioritizing, like for like sales growth more important than margin expansion to deliver the absolute retail profit? I think you need the momentum first. But it's not, you know, it's not the link between both are coming up in relatively short time in my view when I see the past week. So that you need the momentum first. You cannot say, well, I I think about profit, I will discuss sales next year. We need the momentum of the top line first. But looking at the, you know, the knowledge of the teams, the past weeks, I would not say there is years of discrepancy between both No, I think we will drive both top line and retail profit in the future. And we will take our last question from for today from Simon Mueller from Numis. Please go ahead. Hi. Thanks. I hope you have a few quite quick ones. First of all, could I just revisit Jeff's question earlier around kind of current, but also kind of more medium term plans around capital expenditure. So either the line was kind of particularly poor at that point. Secondly, can you give a sense on kind of cash exceptional for this year and going forward? Your conscious I remember that would be helpful. And and then finally, kind of reference back on the comment you made around kind of new banners and and so on. Is that something that's under consideration yourselves in terms of introducing new banners or acquiring kind of service providers that you can fit into the business, or do you expect order of the strategy to be organic in nature? Yes. Thank you, Simon. Maybe I'll start. I'll come back. The demand with the purse starts on CapEx. Look, we I think we've got an exciting new strategy and obviously we want to underpin it with the right investments. And we've got some great opportunity in Screwfix, in Poland, in e Commerce. And different areas. Now I can just show you one thing is that we're looking at everything very strictly. We've got a new group investment committee where, together, on Vartic. I really scrutinize all the investments and make sure that their high return and high return on capital employed. So So once that comes out then, we've invested, as I said, historically at about 3%, about $350,000,000. I think we can do a lot for that. So that's the number I'm looking at. Now we're also looking at extracting cash from inventory as as I just discussed and working capital that we may put to use, but I think it's a little bit too early to tell. In terms of the cash exceptionals, what you see, it's puts and takes. We've got the proceeds from some of the freehold sales and sales and leaseback in the positive number of $49,000,000, but there are also some negatives. There's a big one in there in the settlement with the French tax authority of $75,000,000. And then there's a little bit of transformation and restructuring around 50,000,000 dollars, $60,000,000, that and then a number of smaller items that up sets the $188,000,000 of proceeds. If you look at this year, We obviously it's a very different year than we anticipated going into it it will depend a little bit, what actions we take on our different plants. And it if there were anything, it's more on the restructuring side that we would have to spend. On the question on banners, on, let's say, other opportunities, I think first in my mind, we are an expert of home improvement. That's our knowledge. That's our business. And I think it's a good market. You understand, I wouldn't say one more time that believer that it's good to have different customer proposition. And I think because of this new strategy powered by Kingfisher, were able to support different countries, different banners, different customer proposition. I think this is our core plan. You know, what we presented today, it's our core plan. It's the plan we believe we have the most value creation obviously, we will, we will always keep watching every additional opportunities. That's because we consider we are in the home improvement that's our market. So we will keep watching additional opportunities in this market, but the core plan is the one we presented to you today. Okay. That's great. Thank you. Maybe. Yes, operator, just a few last words. Again, Thank you for your time. We really, we're very happy this morning to present our new strategy and to engage with you and be able to answer your questions and get your comment. We are really glad with Bernard to have been able to do that this morning. Happy that, hopefully in the future, we'll be able to meet face to face very soon. I hope you can feel our energy and We are really convinced we have opportunities ahead of us personally and more IPs than ever to have joined in this company. And these great teams. And I'm very energized and very convinced we will bring back a customer's growth Thank you and to you very soon.