Okay, thank you very much. Good morning, everybody, and thanks very much for joining us here this morning. For those of you who don't know me, my name is Andy Cosslett, Chairman of Kingfisher. I'd just like to say a few words this morning, before we start on the results presentation proper. The first, obviously, is about Vero. You'll no doubt have read this morning that it's our intention to begin a search process to find a successor for Vero as Group Chief Executive of Kingfisher. Vero's been with the company for 16 years, and she's now in her fifth year as Chief Executive. Being CEO of a public company is a big challenge at any time. I speak with feeling.
Particularly in this retail environment, and given the scale of the change that Kingfisher has been undertaking, the CEO role here is particularly grueling. It's therefore fully understandable that as we approach the completion of our main transformation work here, that Vero feels unable to make the multi-year commitment that's now required to tackle the next phase of this journey. We've therefore agreed together that this is the year in which she will pass the baton to her successor. There'll be many other opportunities to say more about Vero's contribution to Kingfisher, but for now, just let me thank her hugely for her massive energy and passion, for her continuing efforts to lead this business and to take charge of the management team. Good morning. Vero's going to be a hard act to follow, there's absolutely no doubt about that. Just a couple of other quick mentions.
We're also announcing that our Chief Transformation Officer, Steve Willett, has announced his retirement. Steve's been in the organization nearly 20 years. We're going to be able to call on his services for some time to come. When he does leave, obviously, he will be with our sincere thanks and best wishes. We must also thank this morning Karen for her outstanding service to the Kingfisher Group over the last six years, and we wish her all the very best with her big new challenge. I'm delighted to say that we are appointing John Wartig, who's going to join the company in an interim capacity as CFO. John is a very talented international finance director with over 35 years experience under his belt. He's someone I know personally well, and I've worked with him down the years in a number of situations.
I know that his experience will be very valuable to both the Kingfisher team generally and the board. Change in big companies always seems to surprise people, but it's a fact of life. I tend to look at it as a positive because it gives you the opportunity of bringing new talent into the team. Kingfisher has deep management strength in every one of its functions, and last year we made Chief Executive changes in our operating companies, which have all bedded in extremely well. These latest changes are not in any way going to hold up our progress, are not going to stop the business, and they'll do nothing to deflect us from the pursuit of our strategy that Vero and the team set out a few years ago.
I just wanted to let you know that that strategy has been recently checked and reviewed again in depth by the board. I can confirm to you today that the board is fully behind it, 100% aligned with what it says and what we're doing. I'm now going to turn it over to Vero, who had the vision and the inspiration at the start to spell out that vision, and I'll give her the floor now. Vero.
Thanks, Andy. Hello, everyone. We are here today to discuss two things mostly. First, the Kingfisher transformation and its delivery. Secondly, of course, the financial year end 2018, 2019. I'm sure you will have plenty of question on other topics too. Just as a start, as I'm used to start, we started this journey with a clear purpose to create global home improvement accessible for everyone. This purpose is deeply rooted in a true understanding of customer reality. I'm going to come back on that because this is the thing that is recurrent in everything we do. It's completely still completely relevant from a customer point of view. I would even say every day more relevant. We've now built our colleagues' belief, which was not the case when we started this journey, and that is what will make us a sustainable business for shareholders.
This vision remains intact, as Andy said. Today, the first point I want to make is that we are a strong business, even having gone through three years of heavy transformation. We are now three years into the original five-year plan. We've reached the critical mass of our transformation activity. This is a very particular moment in time in that journey we started three years ago. The building, you remember I've been always referring to this engine thing. This building of this engine is almost done right now. It will be finished by the end of this year. We are going to come back on that. What are the last pieces that we need to pull together in this year? I'm going to talk about this later on. We have, for the third year in a row, achieved our key strategic milestones.
Let me remind you why we've got those strategic milestones. I still remember when I started this conversation with a shareholder four years ago, not three years ago. They told me, "What are you I always said that this plan would be back and loaded." We knew it. This is how we've written the plan. I'm going to come back to that. They say, "What can you give us so we can measure your progress, so we can judge you on what you are doing if you are executing the transformation?" We come up with those strategic milestones because the leadership of the company, we knew won't be about the short-term financial results, otherwise you never do transformation, but it's about doing the right thing to set up this business for the future. We've constantly, over the last three years, done those things.
Again, I'm going to come up on this. At the same time, despite the success of the transformation, our underlying business hasn't performed as well as we would have liked over the past three years, and that includes this financial year. You remember, and I'm going to come back on that, we say we are going to grow above the business as usual. Our assumption at that time was 2%-3% like-for-like growth, which we hadn't. Some of this is obviously down to our environment, but also down to internal reasons, let's be honest. We had disruptions from the transformation. We made mistakes. We always said we will make mistakes. We've learned from them. We've corrected them. Be with me. On a transformation of that size, it is almost inevitable. We still make a significant level of profit.
One other way of looking at it is that we maintain our overall growth margin, which is a performance in such an environment. I will come back to that. I will show some comparison with peer later on. Our balance sheet remains strong. I'm sure you remember we had the stock issue last year. We've eliminated our mitigation stock in just 12 months. We act on it, and we're back. We also did promise to accelerate return to shareholders, which we did. Over the last three years, we nearly returned GBP 1.3 billion to shareholders through share buyback and dividend. The second point I want to make is that the transformation is delivering in line with our original plan.
As Andy Cosslett said, the board have commissioned an external review of the transformation, they've looked at the strategy, they've looked at the transformation, and they've looked at the delivery of the transformation. They confirmed that the three of those elements were on track with what we designed as a plan when we originally started. I always told you that it would be back end loading because we knew it. We knew that GNFR will delivering steadily from the start, because in a GNFR matter, as soon as you start, you get the benefit, and this is what has happened. We knew that the digital would kick off in year three, which is exactly what has happened in this year, because first you need to set up your digital capability before you get some delivery.
We knew as well that the offer will start later because of margin maturity, because of clearance before cannibalization of the old ranges, and before our price investment. All of that was planned. All of that is not constant on a year-on-year basis. It goes as you change the range. If you change your kitchen range, you've got your kitchen clearance. You don't have it before or after. Seeing those results, we remain convinced in our ability to deliver further financial and customer benefit from transformation at a slightly lower cost than planned. At the same time, it has become evident that separating transformation from the rest of the business is no longer relevant. It is not a lack of conviction in the GBP 500 million. It is a leadership decision.
At this point, it's not the right way of leading the business, nor are we actually managing right now. We can't manage the business separating transformation on one hand, where transformation is more than 50% of the business, and business as usual. I need to manage it as a whole. We believe that looking forward, we should be judged by sales, margin, retail profit, and ROCE growth over the medium term. Now I'm going to hand over to Karen for the financial results of this year.
Thanks, Véronique. Thank you, and good morning, everyone. Let me take you through the drivers of our performance today before moving on to the outlook for the coming year. I'll start with slide eight in your pack and an overview of the income statement. Total group sales at GBP 11.7 billion were up slightly on both the reported and constant currency basis, with like-for-like sales down 1.6%. At a group level, gross margin was flat on a reported basis and down 10 basis points in constant currency as the benefits from Unified and Unique product were offset principally by a weak performance and higher logistics costs at Castorama France. There was a notable improvement in the second half of the year where gross margin for the group increased by 30 basis points. Retail profit of GBP 753 million was down 11.4% on a constant currency basis.
This reflects a good performance in the U.K. and Poland, offset by significantly weaker profit in France. Just to put this into context, excluding France, retail profit was up 3%, with the main driver being the performance of U.K. and Ireland and Poland, which together were up 6.2% in constant currency. Underlying profit before tax was GBP 693 million, down 13%, broadly in line with reported retail profit and included GBP 1 million of favorable currency impact. Just by way of reminder, all underlying metrics are before transformation costs. We count our adjusted profit after tax, which is after transformation costs. This was down 16.1% in the year to GBP 573 million. We incurred GBP 120 million of transformation costs, which is a bit less than our guidance of GBP 135 million because of some phasing into the new year. Transformation costs included remerchandising work associated with new Unified range implementations.
Our adjusted effective tax rate improved by 3 percentage points to 27%, reflecting last year's one-off corporate tax surcharge in France. Underlying earnings per share of GBP 0.239 was down 6.3% with the underlying profit reduction partially mitigated by the lower effective tax rate and the impact of our share buyback plan during the year. Statutory profit before tax and after both transformation costs and exceptional items, which I'll cover in a moment, was down 53% to GBP 322 million. Now let me take you through these exceptional charges for the year of GBP 251 million. I know there's a lot of content here, but they relate to three main topics. The first is organizational restructuring, the second is the way that we're looking at underperforming parts of the business, and the third is the treatment of properties held for sale.
In terms of the first topic, organizational restructuring, we incurred GBP 58 million for transformation exceptional charge was in line with our guidance. This was driven by planned restructuring activity in France and the U.K., including the cost of moving finance transactional processing to our shared service center in Poland in order to take advantage of the Unified IT platform rollout. We also had GBP 12 million of redundancy costs associated with B&Q's transfer of store replenishment routines from nighttime to daytime and GBP 15 million related to Praktiker store integration costs in Romania. Of the remaining charges, most of this is non-cash. GBP 127 million relates to the way we're dealing with underperforming parts of the business, which we told you back in Q3 that we'd be focusing on. The first component, a charge of GBP 111 million, relates mainly to impairments to stores.
This includes 19 Screwfix outlets in Germany, which will close this year, and 15 underperforming stores across the rest of our business that we're considering for closure over the next two years. These 15 stores, 11 of which are in France, are a combination of owned and leased properties. The Russia and Iberia charge of GBP 16 million also mainly relates to store impairment. At quarter three, we announced that we would focus on markets where we're leading or where we can become the market leader, and therefore made our decision to exit Russia and Iberia. This process is underway, although for accounting purposes at the year-end, these businesses are treated as continuing operations as opposed to held for sale. Turning to the GBP 28 million. This is a net balance in relation to property disposals.
Included in this number is the profit on disposal of a number of properties during the year. This is offset by an accounting adjustment related to certain other properties, which have been designated for sale and lease back as at the year-end. Although these properties should end up being leased back by us, accounting standards assume no value in use if they're classified as held for sale, and hence the value is marked down. As I said, there's a lot going on here, but largely this reflects the proactive and decisive way in which we're improving the quality of our business. I'll now cover the performance of our major geographies. Before we go into the detail, you can see clearly from this overview that the U.K. and Ireland and Poland, which accounts for 56% of group sales, delivered good profit growth up 6.2% combined.
Other parts of the group did not perform well. France, particularly impacted by Castorama, was weak with a 3.7% like-for-like decline and a 35% decline in retail profit. We also incurred losses of GBP 36 million in the other remaining geographies, including losses of GBP 27 million related to the areas we're exiting, Russia, Iberia and Screwfix Germany. I'll give you more on this in a moment. In the U.K. and Ireland, despite a soft macro backdrop, we delivered good profit growth. B&Q's negative 3% like-for-like performance reflected this backdrop and was also impacted by a like-for-like headwind of around one percentage point from the discontinuation of showroom installation services. This was weighted to the second half of the year, impacting H2 like-for-like by about two percentage points.
Digital sales grew by 9%, with click and collect up 42% as the new one-hour service continues to gain traction. Gross margin increased at B&Q, reflecting Unified and Unique sourcing benefits. The business successfully implemented several simplification and efficiency plans during the year. This included leveraging the new Unified IT platform using the group's finance shared services center and moving from nighttime stock replenishment to daytime. Employee numbers reduced by 5% year-on-year. Screwfix continues to take market share using its convenience model and unrivaled strength in digital. Digital sales grew by 19% and now represent 30% of total sales. We opened another 50 new outlets during the year, taking the total to 627, as Screwfix opened its fourth distribution center in Lichfield to create capacity for the future. Vero will explain the clear growth opportunities available for this business in the U.K. and elsewhere.
Overall, the growth margin for U.K. and Ireland increased by 20 basis points, with the increase at B&Q partly offset by the ramp-up impact from the new Screwfix distribution center. Good cost control helped to drive an increase in retail profit of 6%, which is a solid result in the context of a weaker U.K. consumer backdrop and a softer housing market. In France, like-for-like sales were down 3.7%, with Brico Dépôt's first positive like-for-like in six years offset by weakness at Castorama. This compares with the French market that was down 0.5%. Looking at each of the brands in turn, Brico Dépôt's 0.4 like-for-like increase and market share gain reflected good performance from its new Unified ranges. However, Castorama's sales performance was disappointing due to weak footfall and execution issues around transformation activity, which affected the impact of our offer and digital initiatives.
Vero will update you later regarding our progress with the actions initiated in September by the new French CEO to sustainably improve future performance. We're confident that we'll get customers back in store and online. As you may be aware, our business in France was also adversely impacted in quarter four by national demonstrations. We estimate that these demonstrations impacted full year like-for-like in France by half a percentage point and retail profit by about GBP 10 million. Total France gross margin decline of 60 basis points reflected an increase in Brico Dépôt that was outweighed by a decline in Castorama. This was largely the result of logistics and stock inefficiencies in Castorama, which had an 80 basis point impact on the overall French gross margin. We did remove some variable costs in France, notably through a 5% reduction in head count at Castorama.
Overall costs increased as we invested in our digital capabilities and incurred incremental marketing expenditure to support Brico's 25th anniversary and communication of our Every Day Low Price strategy. As a result of these combined factors, retail profit in France decreased by 35%. Adjusting for the impact of the demonstrations, the percentage reduction in retail profit in the second half of the year was similar to the first half. Turning to slide 13 now. We had a good performance in Poland, reflecting strong execution by the team there. Like-for-like sales were up 1.7%, despite the introduction of the Sunday trading ban, which removed two Sundays of trading per month. We estimate that this impacted like-for-like sales by some 1.5 percentage points. Poland's gross margin performance was strong, up 110 basis points. This reflected sourcing benefits and improved product mix, including a good performance from new Unified ranges.
Despite higher wage inflation, retail profits grew by 6.6%. Now let's look at the remaining geographies. For Romania, it was a year of transition following the acquisition of Praktiker Romania in November 2017, which gave us a number 2 position in the market. Significant range change, particularly into Praktiker, resulted in a retail loss of GBP 15 million for the year. Brico Dépôt remained profitable. The Praktiker integration is progressing and the new Kingfisher ranges are significantly improving its offer. From the start of 2019, we've now rebranded all 19 Praktiker stores to Brico Dépôt, and we're confident that we will reduce operational losses in the current year. Iberia, Russia and Screwfix Germany made a combined retail loss of GBP 27 million.
Further to our decision to exit Iberia and Russia, we announced today that we intend to close all 19 of the Screwfix outlets in Germany and will concentrate on our online presence there. We now look at the overall gross margin. As expected, we saw good margin progression in the second half of the year with an increase of 30 basis points and actually up 90 basis points when we exclude Castorama France. This largely reflects the build of buying benefits and the actions we took to improve the overall price architecture. In the full year, gross margin was up in the U.K., Poland and Brico Dépôt France, as we had indicated at our quarter three trading update in November.
Reported gross margin for the full year was flat on a reported basis and down 10 basis points in constant currencies, slightly below our guidance at the start of the year. Again, excluding Castorama France, the full-year gross margin would have been up 30 basis points. Now we can see that Unified and Unique ranges continued to outperform our non-Unified ranges in both sales and gross margins. 43% of our sales were from Unified and Unique ranges, which grew by 1.3% against a 1.8% decline in non-Unified ranges. We achieved sales growth in 4 of the 7 major categories. Of the other 3 categories, 2 were broadly flat and 1 was slightly down, with all 3 improving on their performance from the first half of the year.
One of these categories includes around one percentage point headwind from light bulb sales, which is the continuation of an industry-wide trend. It's good to know that all 7 categories have delivered gross profit growth, which is a clear improvement on the five out of seven at the half year and demonstrates the benefits of maturity with the new ranges. I'd like to use this next slide to demonstrate how the increasing maturity of our range implementation is building momentum in terms of margin expansion. On the left-hand side of the slide, we see how our range change activity over the last three years delivers more sourcing benefits as the ranges mature. For example, our 2016 ranges are delivering well in excess of 300 basis points as expected, albeit they have a relatively small weighting within our range portfolio.
The 2017 ranges are starting to follow a similar profile, the recent 2018 range benefits are starting to build. On 44% of products Unified in financial year 2018-2019, this has cumulatively driven a three-year benefit of 230 basis points to gross margin, of which 120 basis points have been delivered in the most recent year. Just as an approximation, 44% of 120 basis points equates to a 50 basis point benefit to group margin. On the next slide, you can see that the 50 basis point benefit from Unified and Unique offer was the biggest gross margin driver for the group. We've set out a bridge here of the group gross margin movement for the year of 10 basis points in constant currencies. The 50 basis points improvement was after absorbing cost inflation and price investment.
Over the last three years, we've experienced significant input cost inflation due to commodity price increases and foreign exchange headwinds. Our Unified approach has been critical to managing the impact of this input cost inflation, and buying benefits are also helping us to continue to improve our price positioning. We've done this and still delivered a bottom margin upline. We've continued to improve our relative price positioning. Our price index is just below 100 across the group, with everyday low pricing now launched in B&Q and Castorama France. The margin on our non-Unified offer was flat year-on-year after absorbing similar headwinds to our Unified ranges, but without the scale benefits of our Unified approach. Clearance levels were similar to last year, they had no impact on the margin rate. We do have incremental clearance activity in the coming financial year, which I'll refer to in our outlook update.
As mentioned earlier, we opened a fourth warehouse facility at Screwfix, and as utilization is still ramping up, it caused a 10 basis point impact on the group margin. We've now eliminated some mitigation stock that we brought into our network last year when we wanted to reduce the impact of transformation-related disruption to our customers. However, elevated levels of stock as we entered last year and disappointing sales at Castorama France have resulted in a 30 basis point margin drag from additional logistics costs and stock inefficiencies. It's also worth pointing out that as the relatively lower margin Screwfix and Poland businesses have grown and Castorama France has weakened, overall, this has had an adverse impact on group operating mix. Now, let's take an overview of cash and returns. We generated GBP 382 million of free cash flow in the year, ending with a GBP 48 million net cash position.
This was after planned transformation costs of GBP 120 million and after returning GBP 371 million to shareholders via share repurchases and dividends. The board is proposing a final dividend of GBP 0.0749, which brings the full year to GBP 0.1082, which is flat year-on-year. This dividend will take us slightly below our target range of two and a half times dividend cover, our confidence in maintaining the dividend reflects the fact we've just had a peak year P&L transformation cost. We expect these costs to decline as we go forward, that will therefore help to rebuild our dividend cover. In addition to ordinary dividends of GBP 231 million, we also returned GBP 140 million to shareholders via share buyback. This completes our commitment to return GBP 600 million of capital over the first three years of our transformation plan. Now let's look at cash.
In the year, we generated GBP 856 million of EBITDA and there was a GBP 24 million inflow of working capital. As you know, at the end of our prior financial year, our working capital position was adversely impacted by our decision to carry more stock in order to protect the customer against availability issues during a time of disruption. The position at this year-end was as we said it would be, with some increase in inventory levels to support our changing operating model and our first-time buys of new ranges, but crucially, with full elimination of the GBP 180 million of stock that we'd brought in on a temporary basis. The sell-through of the stock has been an area of focus for the business for the year, and I'm pleased to say that we've also done this whilst restoring availability levels.
Moving through the bridge, we paid tax and interest of GBP 142 million and invested GBP 339 million back into the business. Free cash flow was GBP 382 million, up from GBP 6 million a year ago. Turning to leverage, we continue to have financial flexibility whilst retaining an efficient cost of capital. Our lease-adjusted net debt to EBITDA ratio increased slightly to 2.6 times from 2.4 times in the previous year, which is slightly above our targeted range of 2.5 times, although we expect this to be temporary. It's worth noting that on a pro forma IFRS 16 basis, we estimate that our net debt to EBITDA ratio would decrease to around 2 times, reflecting the fact that we are relatively advanced in terms of lease maturity. Let me now look at the full year 2019/2020 outlook and summary guidance. Full technical guidance is in our results announcement.
As we enter FY 2019/2020, the sales outlook by country is mixed. The U.K. market remains uncertain in the short term. In B&Q, we estimate that the annualization of the discontinuation of showroom installations will impact the H1 B&Q like-for-like by 1-2 percentage points. In France, while we're mindful of weaker housing data, we're encouraged by Castorama's start to the year, albeit it's very early days. In Poland, whilst the market remains broadly supportive, due to trading laws, we've lost one further Sunday of trading per month as of January 2019, taking the total to three. Excluding Russia and Iberia, gross margin after clearance is expected to be flat year-on-year.
In FY 2019/2020, whilst we still expect to benefit from the continuing maturity of our new ranges, we'll really start to bring more Unique product to our customers with four launches of innovative new ranges. This includes kitchens into B&Q, which is our single largest range implementation. Overall, we expect incremental clearance costs of around GBP 25 million-GBP 30 million, weighted much more to the first half of the year. We expect transformation P&L costs to roughly halve to GBP 60 million-GBP 80 million. As we highlighted in September, there has been some rebalancing of costs between transformation cost categories. However, we anticipate that total transformation costs will be less than our original guidance of GBP 800 million over the five years. Total transformation costs incurred for the three years were GBP 490 million. We expect total capital expenditures to be up to GBP 375 million.
This includes CapEx to support the new Unified range implementations, as well as investment in fulfillment capabilities, offset by a reduction in new store CapEx. Finally, in respect of stores considered for closure, we would expect any future cash costs of exit to be covered by sale proceeds from the owned stores. In addition to this technical guidance, we've set out our current views on the impact of IFRS 16, the new accounting standard for leases. With several explanatory sites in the appendices, I'll focus on the main points here. The first thing to say is that the new standard has no adverse impact on cash flows or the underlying economics of our business.
We will be adopting a full retrospective approach from the 1st of February 2019, we estimate that retail profit will increase by around GBP 160 million as the pre-IFRS 16 rental charge is replaced by depreciation and interest. There'll be no material impact on underlying profit before tax. In terms of balance sheet, we estimate that net assets would have reduced by around GBP 0.6 billion if we'd adopted the standard on 31st of January 2019. This reflects the new right of use asset of around GBP 2 billion and a new lease liability of GBP 2.6 billion, which is lower compared to the liability which arises from our usual assumption of eight times property operating lease rentals. As I mentioned earlier, we would expect FY 2018/2019 adjusted net debt to EBITDA to improve given our relatively short length of leases still to run.
To summarize, against a really tough market backdrop, FY 2018/2019 was a mixed bag in terms of our financial performance. We saw good performances in the U.K., Brico Dépôt France, and Poland, who all leveraged the strength of the Kingfisher engine to grow in terms of growth margins. However, this was offset by the performance of Castorama France, which was very disappointing, although there are some positive signs of recovery, as Vero will explain. With certain other parts of our business which are loss-making and achieving low returns, we're acting decisively. With that, let me hand back to Vero.
When we announced the Kingfisher transformation plan three years ago, you will be with me, I hope, that both the macroeconomic and the retail environment were very different. No doubt the macro has become more volatile. We have political uncertainty and social unrest in most our geography, in all our markets. Of course, Brexit being the big one, the biggest one. I'm sure you've heard about the gilets jaunes in France. What we saw as well is unprecedented waves of inflation, and significant cost price inflation as well, which we have never seen in that extent before. At the same time, and we've discussed that a lot at the IPO results, it was a big part of my presentation, the retail sector is going through structural change at a pace that we've never seen before. We've seen established businesses struggling as legacy operating models come under increasing pressure.
It's almost every day in the press that one business is kind of falling over. Although consumer retail behavior has changed radically, expectation for seamless customer experience and fulfillment are higher than ever and becomes the norm. For all those reasons, we still believe that starting the transformation three years ago was absolutely the right thing to do for Kingfisher. I've been talking about this engine. Let me come back to that analogy. Our transformation plan is profound and require to change most of our infrastructures, meaning building what we call our new engine. This is what we've been focusing over the last three years. It's not very sexy, guys, but we had to do it, and it's not very visible, too. I'm going to come on back to that from a customer point of view.
The way I think it's more relevant to explain it, we built all these things that you need to build once in a company every 15, 20 years, when you build them, you are not coming back to them. You might improve them a little bit, but it's there for the long run. All those changes were not about fixing the problem of the past. It's really about creating something new. Today, this engine is nearly built. Let me go in more detail about what are all those things that you build every 15, 20 years. The first one is the global IT platform. We've gone with SAP, as you know. It's nearly done, and we've done that across the group. If you think about how many company have implemented a full SAP system without major problems, I'm interested in the answer.
On back of the IT platform, what we are doing, because that's not finished and I'm going to come back on that, is really to establish a common digital platform that is going to be the base to become a more digital company, and is going to enabling consistent omnichannel experiences. What do I talk about? I talk about mobile experience, I talk about click and collect, I talk about home delivery, I talk about personalized home decor. All those things you need to do in the new world, but you need a platform to do that. It's not finished, but this is one of those big things. Then, of course, you improve that platform as you go away, but you don't change it anymore. You change it once, probably for 10, 15 years. The third thing we've done, which was probably the most difficult thing.
Difficult to say what was more difficult than others, but it's to set up a completely new organization. New organization, new operating model, new ways of working, and new competencies as well. Again, this is not fully finished, but we are very well on the way. The biggest one, which we talk more about was, of course, the offer and supply chain organization. Just to remind you a few numbers, guys. We put together 1,600 people that never worked together before, working for the sake of the group with new competence such as quality engineer, manufacturing, understanding, designer, and more others. All of that didn't exist before. We had no competence in those areas. We've pulled all of this together. This is, of course, true for offer and supply chain, but it's true for all other functions.
The way this company is working right now is completely different from the way it was working. It's true in the finance function, it's true in the HR function, it's true everywhere. Again, this is done once for all. You might improve, you might add a few competencies, but the building of that new organization is done. The fourth biggest thing that we've done is about unification. I'm going to talk more about uniqueness, probably not today, but in an event that we will have in one month from now. To unify your offer is the basis of creating differentiation. I'm not sure you remember this number. When we started the journey, we had 400,000 SKUs, four in common across the group. 3 years later, we are more than 50% of our offer that is Unified. That you do it once as well.
You build on that new basis of offers and you improve it, you develop more new products. Again, you do it once. You do that once. Last but not least, we have as well implemented a global approach on efficiencies. That covers, of course, GNFR, that has kicked off from the start and is delivering right now. It covers as well shared service center. Again, we have 305 people working in Kraków. We've got the financial service. It's a financial service center as we speak, and we have few operating companies on it. We will grow with other operating companies, but we will put more services. We will put HR, we can put that on it. Again, when that is created, you don't hit twice. It's done.
That's what all those facts that are making me saying today that the heavy lifting around building the engine is now done, and we are more new Kingfisher than we are old. I'm not saying there is no more work to do, guys. There is still a lot to do. We are at that point where we've reached that critical mass in the building of the engine. I've just explained that this is nearly completing about the building of the engine. That's why I can now, which I couldn't before, I sort of started that Alseo, guys. I can now demonstrate that the strategy is working. I couldn't before because I didn't have the scale. Remember, you always pick at me, "You are doing sheer repeating." Yes, I was sheer repeating because that's the only thing I had, which is not the case anymore.
Let me share facts about why we can say now that the strategy is working. Again, this is not about blah, blah, as I said, it's about real facts. The first one has been covered by Karen, but I think it's worth going back to it, coming back to it, is that the Unified offer is constantly delivering sales and margin growth, and is outperforming the non-Unified offer. +1.3% on one side, -1.8% on the other side. Almost all categories are positive. As Karen said, I'm the alpha full, she's the alpha empty. Four of them are positive, two are flat, -0.4%, and one is still negative. You can see if you go back to your note last time, massive improvement. The one that is negative is impacted by a kind of market, I think. We are nearly there.
More importantly as well, the profit is improving in every category. We said that as well, this transformation will make us a more digital company. Today, our digital sales are 6% of our sales. It was 3% when we started the year. Don't make me wrong, guys. We are near where we need to be. We know that there is much more potential in that space, but this is massive progress. We start almost from nowhere. The third point that I want to make is to talk about customers. At the end of the day, as I said in my introduction, we do all of this for customers. I know that there were a lot of skepticism about the fact that the customer will buy into the strategy. I see, remember hearing or reading, it will never work, customer will never buy the same thing.
The principle of all this strategy, I've been constantly telling you, if you don't believe that customer will buy the same thing across the geography, then run away. I've never been in that camp. Why I've never been in that camp? Because of my almost 30 years of experience in an industry, because I knew that we were going to do everything based on true understanding of customer needs, and this is what we've done. We studied 20,000 house since we started that journey, and we keep doing it every month. We visited, physically visited 3,000 around Europe. Bear with me, U.K. is still in Europe right now, so we're visiting the U.K. houses as well. Just to give you a little bit of. It's an anecdote, but I think it really means to me which kind of business we have become.
At last , we review the new kitchen range, and of course, the kitchen business case that goes with it. I mean, I can tell you right now, on top of that session that we did, that 63% of the kitchen in Europe are less than nine square meters. That kitchens are a little bit bigger in France than they are in the U.K. In the U.K., you put your washing machine in your kitchen, and you never do that in France. We know all those things, guys. I can't think of many company of our size that are talking about those things in their G meetings. What I mean by that is that everything we do is really a true understanding. When you do that, you don't make mistake.
The customer, they are buying your offer because it makes sense from their perspective and from their needs. That's what I mean. The NPS score have improved. The other element that I want to say about in addition of that sales growth I was just talking about, I can tell you that we've improved our price index in every single market. Not only in Castorama France, we are going to come back to that, where we had an issue when we started, but everywhere we improved. As a result of that offer work and the price, we have improved our NPS score, net promoter score, in every market. We measure it now from April 2018. We have the same methodology. Again, this is part of building the engine. We are looking at things in the same way with the same tool.
We have the same way of measuring NPS across markets, we started to measure it in April 2008. I can tell you that from April 2008, we are at Kingfisher level. I'm not meaning that this measure is relevant because you need to look at every market, and we progress in every market. If you do a conglomerate of that, we were 43 in April at Kingfisher level, and in January 2019, we are 64. Which mean that the customer are buying into the strategy. Finally, one of the big question has always been about our ability to engage our colleagues. Rightly, you ask me very often question about this, and you are right. Through a big transformation, a big and long transformation.
Again, I think I'm very pleased to say that we have an engagement score that is largely above the average of retailers and really stable through transformation. Again, same way of measuring it. We're measuring it on the 80,000 colleagues, so it's not few bits and pieces everywhere. We have the same way, and we measure it three times since we started, and this rate is stable. Let me bring probably a slightly different perspective on how you can measure the success of the strategy, the fact that the strategy is working. One of the fact that I thought might be relevant, is a comparison of our performance margin with our peer. The slide show that our transformation, of course, especially the work we've done on unification, has helped us to perform better or in line, and to broadly maintain our margin.
Even before the end of the plan. We're not finished. I shared this slide for the first time at Alsea, guys, if you remember well. What I said at that time, which is still relevant, is we are seeing the transformation benefit coming through. Offer digital operations in the way that I described in my opening statement. However, and again, we knew it, those benefits are eroded by factors we knew, and they are in line with the plan. What are they? By assessment, clearance, and offer sculpting and de-obsolescence, which meant a lot of that. We build those organizations for full capacity, and we are not yet at that. On top of this, we had to face negative external factors. As I said, they have been more negative than we expected, we are completely honest. As well, internal factors. Some of them we were expecting.
We knew that we would have some transformation disruption and some that were more important, especially the Castorama performance. I'm now going to focus. The whole business is focused on internal factor, guys, about the things we can do something about. This year, to mitigate those internal factors and to reduce them, we have 4 clear priorities. The first one being addressing underperforming part of the business. I'm going to talk about three things in that part. Of course, about Castorama France and how we actually implement our plan and the start of delivery of it. The fact that we will continue to have an active management of our property estate as we always did, the fact that we will be focusing on market where we have or can reach the market leading position.
The second clear objective priority is to extend the rollout of Proximo in the U.K. and to enter new markets. The third is going to be complete the building of the engine I've been talking about since I started. Of course, the fourth being to make our innovation more visible to customer, which is the first time we will be doing this. Let me first cover Castorama. First, I think as Karen said, it's important to remind you that we don't have a France problem. Brico Dépôt has gained market share, and its selling gross margin has improved with clear benefit from the Kingfisher transformation. Castorama performance, of course, has been for quite a long time disappointing. What is important for me to share with you is that the diagnostic has already been done. There is no new news, guys. There is no new problem.
We stick to what we've done, and it's still relevant. The solution has been identified, I share the solution with you at Alsea. We are not changing the solution either. We are just implementing and executing them. Let me now more focus on the progress we've made and share with you a few indicators that demonstrate that we are making progress. The first one being price index. You knew that the pricing issue was one of the biggest one that we had in Castorama France. We've implemented, I told you at Alsea, the EDLP strategy. On the back of that EDLP implementation and all the work we've been doing, we've moved the price index from 1.2 when we started, if you remember, to 1.01. We are nearly there. We're not there, but we're nearly there.
Digital was the biggest single problem as well, we have addressed it. We put the Next Gen platform into Castorama France. We improved the website. Actually, again, we are not where we need to be, but the Castorama website traffic has doubled between 2017 and 2018, and the conversion rate, which is still too low, but has gone up by 50%. This is good progress. There was an independent survey, which we haven't ordered, in October 2018, we were the second preferred website in France, of course, after La Redoute, but in terms of home improvement, which I think is a massive improvement as well. We've taken the decision as well to put more means in terms of marketing and are supporting, of course, the new, Unique, and Unified offer, but as well, a D&D campaign.
We have been more visible in Castorama with Castorama brands, in TV, in press, everywhere that we've been for quite a long time. Finally, the Castorama net promoter score has improved by 10 points since July. These are all the action we've taken towards the customer. At the same time, we've taken as well efficiency measures, we've reduced our FTE in Castorama by 5%. We are considering, as you've seen this morning, the closure of nine underperforming Castorama store over the next two years. All that is starting to pay. The first month of the year has been positive in Castorama. I'm not here doing your trading update, but I think it's important for me to share. Footfall has been growing for the first time in a long time.
As you say in English, one swallow doesn't make the summer, this is a good start of the year. We have said that we would address all areas of underperformance, we know that we have some stores that are underperforming, and we've demonstrated, as it's shown on this slide, an active management of our property portfolio everywhere. This focus continues, we announced today that we are considering closing 15 underperforming stores across the business over the next two years, nine being Castorama ones.
I'm going to go quick on this, I think we did an announcement at Q3 that we would be exiting Russia and Iberia in order to really focus on those markets where we are already or can be leading. Those exit processes are ongoing, I have already outlined you the decision to close the 19 Screwfix stores in Germany and really concentrating on our online presence. Karen has really covered that part in her presentation. That's for the first priority. The second priority is about profit. Screwfix has been a star performer in our business over the past five years. They deliver a CAGR of almost 20% of sales, 15% of customers, with 13% growth in terms of the number of stores. Very healthy, profitable business. At the end of this year, Screwfix had 627 stores.
It's near the double that what it was five years ago. Today, we are setting out exciting plans to build on this growth, both in U.K. and new markets. In the U.K., we will continue to strengthen our customer proposition. We need to keep going with the customer, while also extending our store rollout target to 800 stores. It was previously 700. In the Republic of Ireland, where Screwfix has already established a strong online business for four years, we will open a number of physical stores to support further growth, this is starting now. We've learned from Ireland, that was a really interesting experience, this is why we've decided that we will do the same in Poland and France. These are both markets where we have existing scale, infrastructure, in-depth market knowledge, and competent teams.
The third priority for this team for this year is to complete the building of the engine. I said we are nearly there, we are not fully there yet. What are we going to do? There are a few actions that we will be taking this year. After that, this engine will be completed. The first one being Unification. I told you we were at 50%. We will complete 70% by the end of next year. On the digital front, aside from completing the very final stages of the IT platform, we will be launching our new digital common platform, which is going to enable our digital capability in Brico Dépôt France, Castorama Poland, and Romania. Finally, we will continue to implement our shared service center capability across geographies. The last point for this year, the fourth and last point, is probably the most exciting one, guys.
It's probably the biggest change in this year is that we are going to show the customer what we've done. This is the time we can start to do this. We are going to use the engine that we've built to deliver benefits to our customers. We will have lots of examples of using the engine for the benefit of that, and I'm going to share a few with you. Thanks to the engine, we are now ready, for the first time ever, to create big global launches to share our new offer with our customer. Karen said we'll do 4. I'm not going to tell you what are the 4 because this is very competition sensitive. I don't want to give them everything we are going to do this year.
We are going to do multi-country, multi-sector launches supported by the launch of our new global product own brand, which is going to call GoodHome, which will refer to our purpose. You can see here the paint example. It's on the B&Q shelves already. We start to implement that everywhere. This is going to be something very big and significant. We are going to support that with global marketing campaigns. As an example, you see here the 3 catalogs, the Polish one, the French one, and the U.K. one, and we will have a Romanian one as well. Normally, the way we would have done that without that engine is that you would have 4 different catalogs with 4 different sets of photography and everything.
What we've done is because the range is the same, the look and feel of the brand is the same, we have one, and we have, of course, method GNFR tender on the paper, and we've done one set of photography. That's how we will improve over time the quality, because you put less money to do more things with better quality. Again, this is a very concrete example, guys, on using this engine I've been talking about. This year, through those launches as well, we will improving the affordability for our customer as we continue with the unification of the range and as we are launching them in line with our EDLP strategy. Every new category, every new big launch will be fully EDLP. Along with these new ranges, we will be implementing new digital tools to support the customer in their home improvement project.
For example, we are launching the app Plan My Bathroom in the B&Q and in France already to help them plan for their project bathroom. Finally, it's really important as well, is that we are now able to train colleagues globally. This is part of the engine. We haven't talked a lot about this, but we have now one GoodHome Academy, and we are going to train this year 3,000 colleagues through that GoodHome Academy to have better equipped colleagues about their knowledge of the range and their understanding of the customer needs and the customer project. Here are a few examples of those new launches, but of course, you will discover much more of this on the 15th or 14th? 15th of May. I'm coming to the end of this presentation.
As you've just seen, we've achieved a critical mass of transformation over the past three years. This year, we'll be finishing the building of the engine, as well as focusing on those four priorities that I've just described. From next year, we will enter into a next phase of the transformation. Of course, we will continue to drive profit from digital and operational efficiency, but we will also move to a more customer-centric phase of the transformation. That will cover, of course, the development of more Unique ranges and the development of new formats. I will update you on all those things on what we call Kingfisher Innovation Day, whatever we call it, where we will be showing you all those new things, and it will be on the 15th of May here in London.
Finally, based on everything I've just shared with you, I just want to say that I am fully confident that we are creating a stronger, sustainable, and more profitable business. I must probably finish before your question on a more personal note. I first thank Andy for his words. I truly believe in our purpose. I think this is a way of making the world a little bit better. That has always where I've been from the start, and I'm still there. I'm not declaring victory, guys. That's not the point at all. I hope I confidently show that this transformation is happening and the strategy is working, this is not about declaring victory. We are not done yet, we've been doing what we say we will be doing, and I think that's very important to me. I'm not leaving because the strategy is not working.
On the contrary, every month I'm seeing more evidence that it is working. This business will be totally different one at the end of this year than it was five years ago. We have all those facts, all those numbers that are demonstrated. It will be ready to face the future and be truly sustainable. I've been in the company for 16 years, and I wouldn't have that conversation if I thought we were not in good shape. I think it's now the right timing because of. I say there is 2 phases in that transformation. The phase 1 is nearly finished. We are finishing it this year, then as Andy said, I didn't want it for personal reason to commit to that phase 2. The thing is, I've done my part and I will keep doing my part till the day I will depart.
It's very demanding. It has been a very demanding five years of my life, and to be fair, you have probably almost dedicated all my life over the last three years to this company. Whatever has been written or said of the delivery or will be written today in the press, I just want to thank the 80,000 colleagues within Kingfisher. They've worked very hard, hasn't been easy, they have done something extraordinary. Extraordinary. They can be very proud of themselves. They need to keep going. That's the thing. As long I'm here, I will be as demanding as ever. For the ones that are in the room, they know that. Kingfisher will be the leading home improvement company. I'm 100% sure of that. That's one thing I'm sure about. Still I remain in that seat, I remain 100% every day.
I will be on the ground visiting the operating company, working with the AOF, all the functions to deliver this year. Thank you. It's a very particular situation today, and I want to take the time to thank Karen as well, even if on the end of the board as it is. I think it doesn't really work in English, but we get the idea about this. We've been almost a couple for four years and a half. A couple, like a CEO and a CFO needs to be. Arguing sometimes, talking a lot, taking decisions together, but overall, caring a lot about this family and the family business. Karen has been instrumental to the success of this transformation. The tradition would like that I wish her good luck for her next adventure, but I now used to say, it's not about luck.
It's about work and talent, she definitely has got the work piece. I've never seen anybody that is working so hard as well, she has got the talent too. Thank you, Karen. Now, questions.
Well done.
Yeah. Hi there. Geoff Lowery at Redburn. Two questions, please. Can you sort of compare and contrast Brico Dépôt and Castorama for us in terms of the way the new ranges have landed, how you've executed that, how you feel about their competitive positions now? It's just so striking to see such a big delta in top line between your two businesses. Second one, a question for the chairman. Given your comments about the board being 100% behind the existing strategy, what flexibility is there for the next CEO, he or she, to come in and say, "Actually, we want to do things differently. We want to trade the business differently. The equity market's not recognizing the value of Screwfix, therefore, we need to change." What scope is there for evolution in strategy?
I probably should answer the first one. I think the starting point in Castorama and Brico Dépôt were very different. The offer was different. You had the starting point, the number of categories that were covered in both businesses was not the same. The number of SKUs was not the same. Just as you remember, Brico Dépôt is 11,000 SKUs today. Castorama is more 50,000 SKUs. The way the new offer as landing was different. In Brico, we have had a coverage of customer needs. As well, the price positioning of Brico Dépôt were good at the beginning. You had that flow of customer coming in because they knew what they were finding. And you know what?
They continue to come in, and they found more stuff, better quality. Because Brico has been always very well regarded in terms of price, but less well regarded in terms of quality. You know what? We had this flow of customer coming in, price was there still, as they were before, very good, very strong affordability for customer, and quality was improving, and we were covering more needs. In all, this has created both. On the Castorama side, that was different. With the Unique and Unified, in the first instance, we do with Unique, but we didn't with Unified. We didn't cover more customer needs. We do with Unique. Imandra is performing very well in Castorama, as an example, the bathroom furniture thing, because here you cover.
I think the learning of those things, as well, in Castorama, even before we started, we knew we had a problem and that we didn't have the right traffic, we were losing share and well. It takes time for people to understand that first, because the price index is the same. You move your price index, but your price perception is moving afterwards. People need to take the time to realize that the price has decreased. At the same time, when you decrease the price, if you sell the same number of product, of SKU, you have to sell more. You need time to cover this. This is what is happening in Castorama France. This is why, first, you need to do the work before shouting to the customer.
We've only started to shout to the customer that price was good and product has improved right now. I think that's why I shared this NPS improvement score with you, because I think that matters a lot. It doesn't trigger to sell right at the beginning, but it means that customers start to realize that Castorama is changing, and that's good news for the future.
I think, is this on? Hello? Just to answer the other question. CEOs always want maximum flexibility, and that's to be understood. I think what the board is very clear on, and we've done a lot of work on this in the last few months, for obvious reasons. There is clearly no doubt under any review that the logic that underpins the strategy for Kingfisher is clear. I think what we're seeing today and what we'll continue to see as we roll through this year is more evidence that buying as a group, working as a group in a coordinated and coherent way is the right thing for us to do. The competitive advantage that Kingfisher has is defined by its scale. You don't use that scale, you give it your primary competitive advantage and you just become an also-ran. That's what underpins this.
Based on the insight of customers, they will tolerate and accept happily better product at the right price across our geographies and what Vero said today demonstrates that. The component parts of our business change. As you've seen, we've made exit announcements over the last few months where we don't feel we can build scale and contribute to the group in a winning way. That will always be under review, but for my money, the Chief Executive who comes in will come into a strategy that's clear. We will clarify more parts of that strategy later in the year, we've already talked about it today because we have other things we would like to share with you which demonstrate this strategy in action.
The CEO will be moving in, whoever that is and whenever they arrive, into a business that's starting to really start to move as we go through this year. Accepting that and understanding that and buying into it, I think will be an important part of what we're looking for. We're looking for a great executive who can follow Vero, buy into the vision and take the team through with. I'm sure there'll be some changes around on various elements of it. I'm sure there'll be further reviews of different parts of the business. The underlying logic that supports this strategy is very clear. I think it's highly compelling. It's one the board under significant examination recently has reinforced and confirmed.
Thank you. Morning. Richard Chamberlain, RBC. Can I ask a question about the store closures, please? What criteria are you using to determine which stores are closing? I think you said 15, of which nine are in France. Maybe linked to that, Vero, maybe you can just elaborate on slide 33, where you say the strategy is to focus on markets where you have or can reach a market-leading position. I kind of get in what you're doing in Russia, Spain, and Screwfix Germany with the exit. Obviously now in France, it looks like the market leader eventually has reached an unassailable market leading position. Where does that leave Castorama in terms of store footprint and optimal store footprint? Do you think that nine stores is really enough, given Leroy Merlin is so far ahead now?
You think we start with the first part? Yes. Okay, yes. I actually don't think that it's very complicated to answer that bit, Richard. These represent our view of what we would call the tail of the portfolio. Some of the stores are actually loss-making stores, and they haven't been very well-performing over recent years. Some of them are not loss-making, but they are giving us low returns, and we are actually taking advantage of some lease breaks. We would rather not re-sign a lease on a very low returning store when we could actually refocus and put our money into something else that would give us a higher return. Okay. I think on France, because I think this is the challenge you are giving me about market leading position in France.
We are not thinking of France. You know, putting Castorama on one side and Brico Dépôt on one side. We are talking about Kingfisher in France. I think with Kingfisher in France, with 222, if I am right, stores that we have in France, we can definitely compete with the runner-up. That's true, they are the market leader. I think we are going to compete with a new and unique offer, with the buying power that we have with the scale of Kingfisher, we can compete with them. With a digital new platform that is the capability that we have in Screwfix, we can definitely compete in this market. You know, this market is moving massively to digital as well. We can take advantage of that. We are going to fight. In terms of the store-
Scale to compete with Leroy Merlin in France.
Yeah.
Across the two formats.
Yeah. This is why we've taken the decision when we started the journey to implement the same range across the two brands. That has been a conscious decision.
We use our buying scale across the group.
Yeah.
We're putting the same offer in everywhere. That's actually a different strategy from Leroy Merlin.
Adam Cochrane, Citi. First question on clearance and gross margin guidance. Would you be able to sort of discuss over the last few years how much in pound notes, you've given us GBP 25 million-GBP 30 million for next year, how much was there in the last couple of years? As I look forward two years, should I be able to add all of that back? Will that clearance reverse once you stop clearing, first of all? In terms of the gross margin, you talked about the logistics costs in France in the year. Will that reverse next year? Is that something that's been fixed? Is it an ongoing problem, or at the very least it differs?
Or repeat, sorry. The sort of other one I was thinking about is you talked about Screwfix being online now in a couple of markets. What is the online proportion of sales of Screwfix in the U.K.? Is it a business that needs stores in the markets in order to be a material addition to your portfolio in France and Poland? Thanks.
Oh, okay. A few questions. Right. I'll start with the clearance and-
Yeah, please
I'll just be really transparent about the fact that elevated levels of clearance are not part of our new business model. As Vero kept emphasizing, we said this plan was back-end loaded. One of the reasons it's back-end loaded is that you haven't finished implementing new ranges until you've finished implementing new ranges. The only way to implement new ranges, unfortunately, is to take some clearance decisions on the old. We do walk a fine tightrope in terms of deciding how we're going to clear, because you're looking at a combination of customer experience and economics. Different categories of products all have different clearance characteristics. I'm not actually going to give you the absolute numbers of clearance that are in our gross margin.
I would say that over the last couple of years, they have been several times more than the clearance levels were when we first started. We'll be looking to get through this journey and then move to a position that is much more normalized. A retailer will always have clearance, but at more normal levels.
You've given the sort of GBP 25 million-GBP 30 million for this year. Just to save me going back to the prior three years' guidance on clearance, I don't want the absolute clearance, I just want incremental that's been created by the implementation of the Unified range. Have you given that guidance previously?
Yes, we have. We're saying GBP 25 million-GBP 30 million more clearance in FY 2019-2020. We said in 2018-2019, there was no incremental clearance, so that was the same as 2017-2018. In 2017-2018, the impact of clearance was, I think, about 40 basis points on the margin. At that time. Unfortunately, the logistics and efficiencies are not going to fully reverse this year. All the teams are really, really focused on moving stock effectively through the system. The logistics problems that we've got are primarily related to the issues that we're still working through in Castorama France. Whilst we do hope to make an improvement on the situation that we've got, I think it would be wrong of me to be promising that this will disappear this year.
Screwfix online.
I think the percentage of Fix online is 27%, 20%-27%. I don't think we can say that any store. I think they are very different. I think what we've seen is the store are growing as much at the same time that online is growing. Just to give you sort of context, I know from a retail perspective, we come back to the more kind of retail environment and change question. We need to move away that it's either online or stores. Amazon is today the retailer that have the most square meter in the world. Probably Walmart is ahead, but they are one of the big ones, investing massively into square meters. I think the battle for the future of retail is not online versus store, it's both.
This is why I think what we need to keep doing is really having that tight management about from a tech perspective, what do you need to have to meet the customer expectation in the future? It's not about removing stores totally, this is why as well, on the 15th of May, we would be very happy to show you how we see the future of our. They will be stores. They will be different. They will probably be different location, they will be different size, and they have to provide a different customer experience. They are going to be there. The leading retailer are going to have both. This is not random. Amazon, who is the biggest retailer in the world, has heavily invested in Prime.
Thanks. Anne Critchlow from SG. Just going back to Screwfix Germany, were there any particular challenges in Germany that led to the decision to close stores? Just going back to your comments on online versus stores and online only, how promising will that business be as an online-only business in Germany? Finally, learning what you did in Germany, what does that mean for future entries into other countries with Screwfix? Is it now the case that it's a very limited expansion prospect for Screwfix? Just one question, please, on online in France. What percentage of sales are online in France, and what proportion is click and collect at the moment?
I'll try to do Screwfix. It's certain.
Yeah.
I think the German market is a very particular market, and that's true for all retail. The most competitive market, of course, in the improvement sector, but in any kind, food retail, everything. It's the more challenging, very competitive from a price point. The thing we had to face is that you are in a very price competitive environment and at the same time you don't have the buying scale. Why we didn't have the buying scale in Germany, because first, Screwfix Germany has been long before the Kingfisher journey. The thing is, because Screwfix is a U.K. business and it's a lot of technical categories, you have norms that are very different in the U.K. than in the rest of Europe.
If the Screwfix business would have been a France business, we could have sold the same stuff in Germany and in France, which was not the case. We had to buy the offer in Germany just for Germany. You are subscale, you don't have the right buying power. The problem we had is a margin problem, and this is why we make some losses. To go to online, we will do online in Germany as we did in Ireland, and I think we are really building on the success of Ireland. This will be driven from here in the first phase when we will be launching and then we'll see. We will deliver from the U.K. You maximize your efficiency, your supply chain efficiencies, and all the rest of it.
To go on France and Poland, the situation will be very different from Germany. We know those markets very well. We have a presence there. We have been there. We understand the customer dynamic. We've got infrastructure already, and we are going to use all of the infrastructure to first launch online, because I think this is a good way as ways to think about expansion in the new world. You establish your brand, you establish your presence with online, and then you go to open stores. You don't do the other way around. This is what we are going to do.
Just to say that despite the fact that Germany is small and despite the fact that we've made the decision to close the stores, actually one of the things that we were really encouraged about was the speed of e-commerce penetration into that business. Which brings me to your second question, which is the online percentage in France, very, very low, still only about 1%. That's actually not a surprise to us because to get to the right level of e-commerce capability, we have to have fully implemented our IT platform and then move to what we're calling our Next Generation e-commerce platform. We're still quite early days in France on that, and we've still got some work that we need to do on the digital offers to the customer in France.
click and collect is still quite small in France as well because unlike in B&Q, we're still working to get to real-time stock file updating and actually that is the thing that's really given the momentum behind the click and collect growth in B&Q, where we've now got one-hour click and collect. We'll get there in France.
What we call the new digital platform is going to be implemented in Brico Dépôt France now. It hasn't been implemented yet. It has been in Castorama, but not in Brico Dépôt yet. That's part of the plan for this year.
Yeah. Akshar from Goldman Sachs. Two questions. One is on the Unique Unified ranges growth. It didn't look like it slowed in the second half. It was growing 2% in the first half, versus 1.3%. Is there anything you guys can do in terms of accelerating that growth again of Unique Unified ranges? Second is on the CapEx. What kind of CapEx we should expect once the transformation is done?
Okay. The first one, the growth. We saw some very high levels of growth in the first half of the year because we were looking at very new range implementations. You've got some of those things anniversarying. If you go back to the slide that actually shows the growth, and I think we would be quite happy if we get 5% like-for-like growth across our full set of categories is what we've been seeing. In terms of the CapEx, GBP 375 million, there is still about GBP 100 million there of what we would call our transformation CapEx. Particularly in FY 2019-2020, we've got CapEx in there that is associated with further development of our digital capabilities.
We're investing in fulfillment. And also the characteristics of some of the range changes that we'll be doing this year mean that the costs are actually more skewed towards needing CapEx than some of the other implementation costs. That's the kind of thing that I would say, well, when it's finished, it's finished. I'm not really going to comment on the rest of the CapEx.
Hi, Simon Wolf from Numis. Three questions, if it's okay. First of all, you made a reference to sale and lease back within. I was wondering if you can update or remind on what you're doing there. Secondly, you spoke to headcount reductions in, I think, B&Q and Castorama. Can you just give a sense of where that headcount's being taken out from within those businesses? And finally, with the Screwfix and the raised store target, should we still be expecting 50 stores per year going down at a similar rate of expansion until we reach that 800 number?
Okay. I'll start off with the sale and lease back. Sale and lease back is just one of the things that we do when we're reviewing the overall property portfolio. Just to put it into context, it's not material in the overall scheme of our property, and it's quite similar, although it's actually a different activity to the fact that over the last three to five years, we've sold GBP 150 million of non-operational estate. We've brought back some freehold in stores where we were very sure that we wanted to stay there for absolutely the long term. What the sale and lease back is about, is actually about creating a little bit more flexibility. I mean, it's very small scale.
On the stores that we are looking to sale and leaseback, we feel that actually it's a good time to crystallize some value and actually get into leases that are not going to be too long. These are stores that are okay stores. They're not in the tail, so they don't need to be closed, and we believe that we'll be trading in there for the next few years. Actually, if we can get the right length of lease and take some money out, that feels like the right thing to do. That's sale and leaseback. Headcount reduction, 5% headcount reduction in Castorama, about 5% headcount reduction in B&Q. It is a mixture of store and head office headcounts.
For instance, in the head offices for both of those operating companies, it does include the roles where the work has been taken to our shared service center in Poland. Screwfix, 50 per year. I think that's a reasonable number still to be rolling out. Of course, as we go into Ireland, we'll open some stores.
Challenge the team to do a little bit more. They're still resisting saying you have to do the magic.
We've got to get the right-
We'll do it.
We've got to get the right properties.
You need to find the properties. I think that's one of the things as well. Presenters.
Thank you. It's Warwick Okines from Exane BNP Paribas. Your GBP 800 million original target for total transformation costs, you said today, you're not guiding on that. Or you're not going to spend all of that GBP 800 million. Could you talk about the swing factors in year five, which will determine whether the final GBP 200 million gets spent or not, please?
I said slightly lower.
Yeah. I think this is just reassurance that it's not going to go above the GBP 800 million. We've had people commenting on, is it ever going to end? Actually, absolutely, it's going to end. We've got our plans in place. It's a little bit below. I wouldn't be looking to dramatically cut that. How have we managed to get it a bit below? Well, we are quite rigorous when it comes to this kind of expenditure as other kinds of expenditure. Indeed, in some of the areas there, we've actually been able to apply some of the GNFR principles. We've been able to take out a little bit of CapEx by actually optimizing and utilizing our scale across group.
Our engine.
Engine, yeah.
Thank you. Just the mix between CapEx and P&L in this final year. Did that change the original three components you gave?
In September, I said there was likely to be a bit of rebalancing, and that was recognizing that if you just actually looked at previous guidance we'd given, we would only have had about GBP 20 million, I think, in transformation P&L. We do recognize that we need a bit more. Overall, what we said was the important thing was GBP 800 million of cash cost, and that's still the same. This is really just thinking carefully about, as I said, the ranges that we're going to implement this year and what needs to go through the P&L type activity, which is typically the merchandising, et cetera, and what comes from CapEx. We will have some further restructuring activity, which we can't talk about right now, which means that we've still got some exceptional item in there. The exceptional items generally being the people cost of change.
Two more questions, folks.
Thanks. Andy Hughes from UBS. A couple of questions. First one was on your slide 17, just on the benefits of Unified ranges. The message I think seems to be from that you are getting the benefit that you thought you would get, but maybe it takes a couple of years longer. Should we assume that getting the GBP 350 million over five years is really 350 over seven, and that you will get there, but it's just stretched?
I think the answer, Andy, is that the benefits are coming through. That the strategy is working. Described up front, the strategy is working, because we don't actually run the business on the GBP 500 million and the BAU, we'll continue to work through those same elements of the strategy as we've always described, and make sure that we get the benefits as fast as we can.
The benefits are in line with the plan we wrote in the beginning. They are in line.
Right.
Absolutely in line.
Amount and timing.
Yes.
You've got a lot to catch up on then.
Roughly they are in line with what we planned. That's the offer thing that we've been talking about is that you're not done till you're not done. I think the explanation I was given, it's like if you are in it, the doctor told you it will get 12 months to be well, and after six months you want to be well. You have to wait till the end.
Just to follow up on the transformation cost. Is this going to be the last year, FY 2020, the last year of P&L transformation cost?
There's a little bit of CapEx. If you actually just work out the sums, there's probably a little bit of CapEx that we see in the year after, we should be broadly finished with the P&L costs. I would just go back to the fact that we will not spend as much as GBP 800 million in total.
Yeah. In terms of what's within the P&L, so there was GBP 120 million in FY 2019.
We're going down to GBP 60-GBP 80.
GBP 60-GBP 80.
Yeah.
For this year, and then pretty much nothing.
If you actually think about the profile of our offer, we've exited this year with 50% of the offer Unified. If you can imagine that we'll exit next year with 70-ish. That doesn't leave us an awful lot left to work on.
Okay. All right. Thanks.
Sorry, just to clarify the point on the benefits. You're saying the benefits are completed.
Are in line.
That's very much what we said in the presentation. What we're not doing is talking about saving benefits timings wise over the next couple of years. We're not giving guidance on that.
Hi, it's Jeff Rattle, Morgan Stanley. Just one question, please. In the presentation you talk in the press release today, you talk about the property having a value of GBP 3.4 billion on a sale and leaseback basis. In your presentation, you alluded to the fact that different bases give different valuations. What would be the valuation of the property on a non-sale and leaseback basis?
It'll be less than GBP 3.4 billion.
Are we talking GBP 2 billion or GBP 3 billion? I mean, I know it's not an exact number, but how much less?
I don't know how much that would be.
Do you not get it valued on that basis as well?
It would be GBP a few 100 million lower than that, yeah.
Thank you.
That's it. All right. Thanks for coming, everyone. Much appreciated.