H1 18/19

Sep 19, 2018

Time is it? Talisa. Hi. Good morning, everyone. Welcome to all of you this morning. Today is an important moment in our transformation. We almost we are, as for sure. Today, I'm going to talk about reporting. The first one is why our transformation is vital probably even more than when we started this journey. The second one is why our transformation is going to deliver the expected benefits? The third one is why our transformation is tough and what are the issue we are currently facing? Because we are facing issues. And the fourth one is what are the decisions that we are seeking to deliver this plan and to create long term debt? The first idea I would like to share with you this morning is that our transformation is the survival of this organization. And to be fair, it's the same thing for every single retailer. Just it's inevitable, it's not an evolution. It is a real evolution that we are living in. Just few numbers. I'm sure you know those numbers, but I think it's fine to remind them all together. In the UK, over the last three years, 100,000 people lost their jobs in return. Since the beginning of this year, 2000 stores are closed, this is the reality we are living It is starting in France, and it's far from over. And you need to look outside not to complain about anything. But just to understand how deep the change needs to be, how profound the revolution is. So the change needs to be performed. We need to engage the right level of transformation. Does anyone in this room or outside the room to be fair. It's thinking that in 5 years, 6 years, 7 years, 8 years from now, I don't know. September, we still be pushing big trolley installed I personally don't believe so. The number of few the number of promotions The number of stores are no longer retail fundamentals. This is a huge cultural change for all of us This is a total program shift. If I go deeper in the Home Improvement sector, The customer experience hasn't changed over the last 20 years. You go to a shop right now, and you've been to a shop 15 years ago, hasn't changed really from a customer point of view, no, it hasn't. The biggest change we have in our sector is the growth of Amazon and few other pure players. So of course, some company are adapting, but very little are mobilizing the entire supply chain. What does that mean? Is that the first movers will win, and they will win big. And you will bear with me that we started the journey, the estimates aren't as I've just described. We didn't know what we know right now. The outlook is tough. As well. And I hate to refer to it as you know, but it's there. We are living in it. So that's the first idea. The second idea I wanted to share with you today is that our transformation is going to deliver huge benefits. Why? Because we are creating a long term competitive advantage for the company. Through 4 different elements, the first one being Teal and purchasing tower. The second one being a differentiated offer. The third one is strong digital capabilities. And the first one is affordable prices, and you will see more of that in that presentation. I am convinced we've got the right strategy. And that in fact, the benefit that we can expect are bigger than what is in this current plan. Even if we are doing it in a very challenging environment, as we all know, Why do I believe in it? The first thing, which is not the smallest one, is that we are doing what we said we would I remember when we started that journey, the investor asked me, it's not going to flow through your numbers in the first period of that transformation. So what can you give us to make sure that we cannot control, but look at the fact that you are doing what we said you said we would And this is why we set up those strategic milestones. And I'm not sorry to say that for the 3rd year in a row, we are going to deliver them. So we deliver against our plan. I'm not going to look to take all those milestones. You know them, they are written on this slide, But we've already achieved 42 percent COGS. Being really honest, who was believing 2 years and a half ago that we would do this, There were a lot of skepticism in the room with almost throughout our unified IT platform in less than 3 years across 9 geographies. I don't know many companies that have done that without any big car crash. Someone told me SAP equal profit warning. And we have a much and I want to pick that one because it's really important. We have a much higher engagement than the retail sector. We are doing everything on the course on how our organization is finished. And the last results were in June, so no months ago, in the middle of this transformation, and we were at 10 point higher than the average of retail. These are facts. The second reason why I believe in it is that our strategic pillar are now proven. Why I say now? Because it was not the case, a year ago. I couldn't have said that a year ago. We didn't have the scale to be so sure about it. So let me take them. Operational efficiency. Our GNSR program is working. We are delivering The second one, digital. We are starting to deliver our plan. We are implementing that IT platform that is the base. We are creating new website. We've been launching the new Intu app, and we are doing it in France as we go along. And our digital sets are growing. The third one, the offer. It's, of course, the most important pillar of transplant pre hosted 350,000,000 out of the 500,000,000. So let me decide a little bit in this one. As I'm sure, it's important to you. So what are you seeing on this screen? The first thing is, as I said already, with unified over 45% of our sales. It's done. It is done. We are delivering positive sales growth now. It hasn't been the case in the persistent and what you see on that chart, which is the most important, it is the trend. We are improving as we grow. The sales growth is gaining momentum. And by the end of this year, we will have unified more than half of our sales. Now it's an important slide. And I'm going to take a bit of time to take you through it. What does it tell us? First of all, It is the final piece of evidence if any needed that we can send the same us, as I've used to say, across different geographies. So please don't ask me at the end of this session. Can you sell the 10th February? Yes, we can. Yes, it works. Our unique and unified offer is growing. In fact, it is growing much more, as you can see, That now all ranges. Again, the other thing that you can see on this slide is the 7 category. I've been accused a little bit to do some cherry picking in the numbers. This is not cherry picking, guys. Those seven categories are representing the whole business. The business as a whole. And we are getting strong positive growth in most categories, as you can see. The other element that is on this slide is that in 5 categories out of 7, even if we are not generating growth, we are getting profit increase, profit growth. And this profit growth is a combination of sales growth and CPR. But you might notice that in one category, you don't get any feedbacks and we get cost per click, which means that the CPR is there. So What it tells you as well, being very honest is we haven't get it right everywhere. Sure. Free category are not growing, but we know how to do this. And we are going to get this right everywhere. So I hope I just convince you that our 3 pillar are now proven. Let me now look at people often ask me why I am so confident into our plan. And from the beginning, we've been very confident in the size of the potential of this transformation and the fact that the benefit will be valued. Let me explain why in reality this is going to be the case. So bear with me for a moment. This slide is an illustration of the profit contribution by the end of this year for the 3 1st year of our transformation. What you can see on this slide is that the benefit of 1 Kingfisher benefit we generated with the 1 Kingfisher plant are substantial. Let me give me more color with it. You know that GNFR and operational efficiency, it will be 90,000,000 by the end of this year. What I can tell you is that the benefit from digital and from the new offers are considerably greater on top of those operational efficiency. We give you some indication about this bar. But there are three main reasons why this increased profit is not dropping through the bottom line as we speak. The first one being clearest. As you know, by the end of the plan, we would have changed 90% of our offer. This means that we are managing an unprecedented amount of clearance. Let's be honest, We've been incredibly diligent in this exercise, really. We've managed speed of clearance, customer impact, and P and L impact, you know, you have to juggle a little bit with all those things. But still, it has a cost. Once the transformation is finished, this profit will normalize. The second being, price investment. Pricing is a core element of our strategy. We want to make home improvement accessible for everyone. This is key. In fact, we've applied little new investment into price. What we've done, we've achieved our price position improvement because we have improved by reducing promotion, we are going to talk a little bit about that, but we are going to talk about France later on. So unless market worsen, we have no plan for price investment to increase significantly. We won't need to. The 2nd profit drag are cost. The cost in OAC Energy stores are bigger than they need to be at this stage because we build capability for much higher volume. Park of this is intentional. When you build a motorway, you don't build one lane. Even though at the beginning, you don't have much traffic. As we deliver profit upgraded, this cost will be more proportional to our benefit. And equally, it will be both. We will look at efficiency as we always look and we will scale those costs to our volumes. So what does that mean? That means that the overall result is that with generative significance, financial benefits, but the observable profit of the transformation is small just as we had planned from the start. If now, we roll forward to the end of the transformation. What is going to happen? We will have further financial benefit, driving by moving from 42% of the new offer to 90%. And the development of Munich. That is going to be more growth and the digital sales growth. This is a plan Against this benefit clearance will reduce massively. We will have limited price investments even if we will have price Right? And we will sign digital and OSE organization costs according to the level of activity. And the impact on the bottom line will be huge. So obviously, the picture we see in the results is more complex than this, as you know. There are other impacts outside the transformation. But both negative and positive, to be fair, from ordinary cost management, which is positive and we are used to it, The challenge in trading of the orange, as you have seen in this slide, minus 1.8%. This is life. And it brings me to the serve idea I want to share with you is that this transformation is And it is not because of the scale of it, it's not because of the pace of it, we are delivering the milestones. We are halfway through it. I just started today with this. We are out in the new world as in the old world. I promise you it's really difficult to manage. And even if we are delivering our milestones, we are facing some issue and there are areas we need to improve. So let me cover those areas. Margin has touched a little bit on it. Karen will cover in more detail how this is going to work. What's our working capital? That's that was a big issue, last time we put together. Karen will be covering an inflation. What I want to do right now is to do a focus on France. So let me talk about France. To be fair, those issues were the same, 6 months ago. It's not changing. In France, I told you last year, there is no quick fix. I was right. The message I want to give you is we really understand the purpose of that. Which is a before the most important thing, if you want to solve something, you'll have to understand what is going on. We are lagging behind in all aspects of customer section in France. And the gap is even bigger when you look at it through the big tender, what are the big tender? They are the 25% of people that are generating 80% of the same. This is where we are. Price, this is not new news. I'm going to update you on the progress but price. And, you know, you will see that the first points are related. Of course, price is one element of the customer's exception. Digital proposition. We've already said that we were lagging behind in that space. And the one that is probably new is the level of transformation that I understand. LAC, while BN2LAR, Castorama inform, has been the operating company this year that has been most affected by the transformation. Then the IT system the long term new digital website. We've moved into the financial services with some people in fact, all of it. And of course, like any other workflow, they have to change a lot of ranges. The second thing I would like to remind about France is we have the right plan as we say the one Kingfisher plant is addressing the French issue. Let me update you on where we are in terms of progress today. First of all, the unified offer is starting to generate growth. To date, more in Bricos than in gas stores, but it's progressing more in capital than the oil ranges as well. Price, that has been for a very long time, one of the biggest problems for Castorama in we are seeing there. We started with a price index of 1000000. We are, as we speak, at 1000000. So we're back in the market. We're back in competition. And we've launched our new website. We had some issue as well. I when you launch something new, But we are progressing, we are solving this issue, and we did a researching form with customer, and they can see that our website is faster than the rest of the competition is at a better economy. So that will come through and customer will notice it. I think the 3rd idea I would like you to remember about, Frank, is that we need to start to say what we've done with the customer. We haven't yet. Because to do this, you need to be pretty prepared. We are right now. So we are going to start to communicate and to give more visibility to our actions. And meaning that it will improve in H2. Karen is going to take you through what are the details of the action plans for H2. And the 4th idea I would like to share with you today is that we are taking any decision required to deliver this plan and deliver a long term sustainable growth for this business. It's not war. It's end. It has to be end. This is our commitment as a negative team with the support of the Board. We are making this business more efficient, as we go and add the environment. Let me go through few decisions that we've been taking or we are going to take in the next coming months. As you may notice, I did some operational changes. I did some change in the management in the operation field. I think I'm not going to comment on that, but you've seen then we published that beginning of September. And this morning, and I want to to pause a little bit about this. You've seen the announcement that we're stating that IR would be leaving Kingfisher and that you would be replaced by Omisole. Okay, this is a positive move. This is just the manifestation that we are taking the right decision as we move on. I are coming to build OSE. She has done it. OSE is a machine that is working. She came to deliver those COGS numbers that I've been talking all along in this morning, 43%. It is done. Now we are moving on the 2nd phase, and it's unified is almost finished. It's all about unique development. What do I mean? Let me remind you what I mean by It's really creating a differentiated offer based on customer needs. It's about designing product solution for the customer, at affordable price and having from end to end. And we decided with Aya that only was UniSpace to do that. It has done it on our bathroom category, which is the most successful one. We get double digit lateral growth and specific margin improvement. And we are going to do that. It's going to lead us in every category. We are moving on, guys. We are moving on as we go along as we evolve in our transformation, we are taking the right decision. The second thing we are going to look at is we have losses in this business. This is not new news to you. We are going to look at them. Again, what does that mean? I'm not going to update you. Please don't ask question about what it is. I'm not going to answer. But we are going to look at it. And what we are going to look at, well, is to try to bring more efficiency. We are delivering against our efficiency plan. We are going to look at with the teams about can we do more? Why? Because we are committed to deliver this plan, because we are going to look at everything we can do to deliver. So my message is we adapt our results. We are not saying sales. We are taking the right decision. We could have increased prices, guys. It will have to make the margin looking better. I promise you. We're not because this is not what we do. It delivers a plan and making this business sustainable for the long term. That wouldn't be making this business feasible for the long term. We are making the right judgment. Clearance again. You stop clearance. Margin is going up. You clear more. So far going down. Would it be the right decision? No, we are managing those things almost every week. Because we want to deliver this time, we are committed to it, but we want this business to be just enabled. So In summary, we always knew it was going to be bloody difficult. It is. No question about this. You will be with me that the backdrop doesn't help us, but it is what it is. Let's be honest, we scored on gold as well. We haven't got it all right at the first time. We've already said we would make mistakes. We do a big thing And we don't have a lot of benchmarks, but we are learning as we do. But our transformation is the right thing do even more than when we start. We are delivering it at pace. To power this transformation, the image I get is we've been in the case in the case building the engine first. So not all the move have been visible, but there was the right one. And they are making the difference. We are creating scale and momentum So if there is one message I would like you to leave this room with is all pillars are covered. Which was not the case even months ago. Unique Vision work for the customer. We have sales growth CPR is real. We can be competitive in making women from an access support and generate more money. Digital is even more than when we're starting, the new way to shop, and we are building the engine to be a reference for the customer. And our business become more efficient. We are delivering on MAPFRE and there is more efficiency to come. Now I'm going to hand over to Karen for the final insurance. Thank you. Thank you, Vero. Not really sure how I, how do I follow that? Let me let me try with the numbers here. So first of all, good morning, everyone, and thank you for joining us today. So I'm going to take you through the financial performance for the half year, and I'll pull out the key headlines in each of our major geographies and we'll then spend a bit more time on France on both performance and actions. I'll then update you on our gross margin performance and finally, on our working capital position. So let's start with an overview of the income statement. On a constant currency basis, total group sales were slightly up at 1,000,000,000 with like for like sales down 1.1%. At a group level, gross margins were down 40 basis points as the benefits from unified and unique products were offset by a weaker performance in France and by higher logistics costs in the group. I will cover this in more detail shortly. Speedail profit of 1,000,000 was down 14.3% on a constant currency basis. This reflects a solid performance in the UK and Poland, offset by significantly weaker profits in France. To put this into context, excluding France, the profits were down 4.2% with the profits from our 2 other major geographies, the UK and Ireland and Poland, actually up 1.4%. Underlying profit before tax was 1,000,000 down 14.8%, which was broadly in line with reported retail profit and included 1,000,000 of favorable currency impact. A way of reminder, all underlying metrics are before transformation costs. Our effective tax rate was stable at 27 percent and underlying earnings per share of down 11.7%, driven by the decline in France profits and including the positive impact from the share buyback. Adjusted profit before tax of 1,000,000 was down 18% in the half year, and we incurred 1,000,000 of transformation costs. Statutory profit before tax is after both transformation costs and exceptional items and was down 30.1 percent to 1,000,000. We had a million exceptional charge this half year compared with an 1,000,000 exceptional credit last year. The charge was driven by planned restructuring activity in France and the UK, including the costs of the move of finance transactional processing of a shared service center in Poland takes benefits from our unified IT rollout. I'll now cover the key results in our major geographies, starting with the UK, Poland and other international, and then I'll focus on France. In the UK and Ireland, like for like sales were slightly down by 0.5% with a 2.5% like for like sales decline at B and Q mostly offset by a 4.5% growth at Screwfix. In the context of a weak UK consumer backdrop, softer housing market and generally uncertain environment, we think this is a credible sales result. BMQ's negative 2.5 percent like for like performance reflects a story of 2 very different quarters. Quarter 1 saw a like for like decline of 9% driven by exceptionally harsh weather. This was followed by a decent recovery in quarter 2, when like for like sales grew 3.6 percent, helped by much better weather. Screwfix continues to take mark share using its convenience model with growth driven by its specialist trade desk and strong digital capability. We opened another 21 new outlet during the period, taking the total to 598. Although today, we're actually already above the six hundred mark at 601. The UK and Ireland gross margin was down 30 basis points mainly reflecting operating company mix and the opening of Screwfix Sports distribution center in Litchfield which isn't yet operating at optimal capacity. This was largely offset by cost control, the retail profit was up by 1.2%. I should also highlight that in the second half of the year, the discontinuation of B and Q showroom installation services is expected to negatively impact H2 like for like sales by about 1 to 2 percentage points, but with a broadly neutral impact on retail profit. Our Polish and other international businesses reflect some very different operating realities. We had a good performance in Poland. Like for like sales were up 1.5% despite the introduction of the Sunday trading ban. Although it's difficult to accurately makes impact of the removal of 2 Sundays of trading a month, we believe that it's about 1.5 percentage points on sales. We're now rolling out our unified IT platform in Poland, and this will give us the infrastructure to improve our digital capability and to allow customers to shop at their convenience. Gross margin performance was strong, up 120 basis points, reflecting improved product mix, including a good performance from new unified ranges, but this is partly offset by higher staff costs resulting in a retail profit uplift of 1.9%. In the rest of other international, like for like sales declined by 1.2% and delivered a loss of 1,000,000. That reflected modest profits in Iberia and Turkey, but losses in Russia, Romania and Screwfix Germany. In Russia, sales declined 1.6 percent on a like for like basis and the business delivered a million loss. Like for like sales in quarter 2 were up 2.1%, and we do expect a better overall performance in the second half of the year. It should be noted that the operating environment was challenging, but this has never delayed the disappointing results. In Romania, the business of the whole need a half year loss of 1,000,000 driven by the praktiker stores. Like for like sales were up 3.5% with the existing Brico Depot Romania continuing to trade well with the new ranges. However, sales performance of praktiker Romania was weak reflecting low footfall as the stores have not yet been integrated with the Brico Depot business. In practiker, old stock is being cleared through and stores are now receiving unified product, so we expect an improved performance in H2. Sales of unified offer across all businesses are growing very well, with a number of categories showing double digit growth. In Screwfix Germany, like for like growth was nearly 20%. A business made an 1,000,000 retail loss, which was in line with expectations and was a slight improvement over the prior year. For those smaller businesses, excluding Poland, we expect a better performance in the second half of the year. As Vero said, we will update it the full year with our plans to stop the losses in our portfolio. Now looking at France, Ferro also commented on the root causes of our weak performance in Castorama France, I'll focus on In France, like for like sales were down 2.4% with Castorama down 5.8% as frequent depot was up 1.7%. This compares to the French market that was flat overall in H1, but volatile from month to month. But from a sales perspective, we've actually narrowed the gap market versus last year. Preco Depot sales results particularly reflected the good performance of the new unified ranges supported by the phasing of investments in marketing Bregals' 25th anniversary. However, Castorama sales performance was disappointing, but continued weak footfall and some execution issues around transformational activity, which affected the offer and digital initiatives. Overall, France retail profit decreased by 31%, reflecting the weak sales performance at Castorama France, a reduction in total France gross margin of 60 basis points, largely reflecting logistics inefficiencies and higher costs notably relating to the phasing of marketing activity at Brico Depot. I'll explain the logistics and efficiencies when I speak about gross margin. As Vero said, we remain convinced that the 1 Kingfisher plan is tackling the root causes of our underperformance in France. But in the shorter term, we've put some actions in place to support the second half of the year performance. And as Bero said, these are action is absolutely fit with our strategy. We're accelerating the move towards everyday low pricing accompanied by more effective similar communication. As well as this, we have improvements to make on the price architecture of new ranges, but this work is already underway. We've also already started to deal with some of the additional logistics costs, which have been incurred as a result of taking on expensive short term space to deal with the increased stop in the system as a consequence of stock action in H2 last year and the slow sales in the first half of this year. Where we can, we're consolidating high cost temporary space into better suited space, which lowers the cost per cubic meter and makes more efficient use of that space and reduces transport costs. And over and above our continued GNFR initiative, retackling variable costs, for example, by flexing hours more efficiently. We did this effectively at BNQ last year, and we're taking the learnings from there. Now let's look at the margins. Our reported net margin rate group level was down 40 basis points, and that's not where we wanted it to be. We have plans in place to improve on this in the second half of the year. However, I wanted to use this waterfall chart to show what actually happened in the first half of the year when progress on our unified off was offset by higher logistics costs, particularly in France. You'll see from this chart that margin progression range is continued and generated 30 basis points of improvement after absorbing cost inflation and after to clearance and price investment. We have experienced input cost inflation, partly price increases and some continued foreign exchange headwinds. Our unified approach has been critical to managing the impacts of this input cost inflation, helping us to continue to improve our price positioning us growing the unified products margin. We continued to improve our price index and are now at just below 100 across the group. Further progress being made in France on Castorama prices. Going from 108 when we started to 204 at the end of last year, and now at 101. And with our EDLP work and communications already launched in B and Q and planned for France. Like others, we're operating against a challenging backdrop, but we have remained true to our pricing strategy. The margin on our non unified offer was slightly down after absorbing similar headwinds, unified, but without the benefit of our unified approach. As expected, clearance levels are similar to last year, so they are not impacting the H1 reported margin. And you'll see later in the presentation that we're doing what we said we would do to reduce the mitigation stocks that we brought into our network last year when we wanted to reduce the impact of transformation related disruptions on customers. We're not calling out availability issues as significant factor in H1 performance because it has improved. However, elevated levels of stock and a slow start to the year in terms of sales have resulted in a 40 basis points margin drag coming from additional logistics costs and some stock inefficiencies, particularly in France where this relatively expensive temporary space was secured to keep inventory moving in the network. We also opened the new warehouse facility in Screwfix if it's not yet operating at optimal levels, it's creating some cost absorption impact in the margin. It's also worth pointing out that as a relatively lower margin Grufix And Poland businesses have grown in H1s, this has had a negative impact on group operating mix in the margin. We do have plans in place to improve the second half of the year in order to deliver a positive reported uplift in margin rate post clearance for the full year. We don't expect the macro backdrop to improve, so we continue to assume similar input cost pressures for those we experienced in H1. In France, we have some changes to the makeup of our price architecture to make. So we do not expect an H2 drag from price investment. We will also benefit from seasonal mix as the second half of the year less weighted to lower margin outdoor categories. And with more range implementations planned for the second half the year, we expect cost price reduction benefits to increase. And this is what happened last year. Our categories have very different margins And so if we go strongly in a high margin category, it positively skews the group margins. Just to illustrate this point, the highest margin category as a margin that's 25 percentage points above the category with the lowest margin. We've already started to address the logistics disease by reducing and optimizing warehouse requirements by continuing to work on the mitigation stock levels that were increased last year. Moving on now to update on operational efficiency. As you know, we're targeting 1,000,000 of operational efficiency benefit by 2021, largely driven by our group, not for resale initiatives. To date, we have delivered million of benefits which million was achieved in the first half of this year. 1,000,000 came from GNFR benefits with savings achieved in areas such as fessional services and even billboards. As we said, we would, we're starting to work on other areas. In H1, the remaining million came savings that related to restructuring in B And Q. Our finance shared service center in Poland was established in February 2018, now has around 150 employees, mainly supporting B And Q. Activities will transfer in the second half of the year from France. We remain on track to deliver million of benefits in the full year. To date, our focus has been largely on improved operational efficiency and driving down operating costs. But now we're also working on driving efficiencies and capital expenditures. So this could increase the addressable opportunity and should over time provide scope to make our CapEx consumption more effective. Now on to cash and return. We generated 1,000,000 of free cash flow and our half year net cash position was 1,000,000. This was after planned transformation costs of 1,000,000 and 1,000,000 of returns to shareholders. This represents a modest increase on our year end net cash position of 1,000,000. The board is declaring a flat interim dividend of 3.33p, which is consistent with our full year target range of 2, 2.5 times dividends cover. In addition to ordinary dividends of 1,000,000 we returned 1,000,000 to shareholders via share buyback. Of the million that we committed to return over the 1st 3 years of our 5 year plan, 550,000,000 times of shares have now been repurchased. So now let's look at the use of cash. In the half year, We generated 1,000,000 of EBITDA and there was a million inflow of working capital. We paid tax and in charge of 1,000,000 out of this and we invested 1,000,000 back into the business. We returned 1,000,000 to shareholders via ordinary dividends and share buybacks. Our lease adjusted net debt EBITDAR ratio increased slightly to 2.5 times from 3 point 4 times at the time. The group continues to have financial billing whilst retaining an efficient cost of cannabis. Now let's look at that working capital as this has been a key area of focus for the business. As Ferro explained earlier and as you'd know well, our stock position at the year end increased significantly, partly as a result of changing our operating model, but also as we carried more stocks to protect the customer experience during a time of disruption. We showed the equivalent of this chart at year end, And I'll break down the 1,000,000 working capital inflow in the first half of the year into the same moving part. So we saw a million impact from growth. This is a normal aspect of our business. We've more stock in the business relating to new stores in Screwfix Poland and our recently acquired business in Romania. The second element highlighted relates to the move to unified product ranges. In order to sustainably leverage the scale of our group, we're changing our operating model and controlling more of the supply chain than we used to. Costs which used to be in the cost of products that we bought from distributors are now in our supply chain. As expected, as we unified more ranges, this element increased by 1,000,000. New unified ranges increased stock by a further million times. This reflects ongoing first time purchases of new ranges as we need to fill with this plays and support visual sales for our customers. We've been working hard on reducing what we call mitigation stocks which is that extra non unified stock and fast selling lines that we brought into inventory last year. At last year end, this had been our stock balance by 1,000,000. I'm pleased to say that the stock production plans that we put in place are working effectively and we've already reduced the stock by 1,000,000 points so far. Finally, the net of the change in payables and receivables was a positive 1,000,000, largely expected to be phasing, leading to 1,000,000 overall working capital inflow. If we now turn to H1 CapEx and our guidance on our total capital expenditure for this year, The left hand circle represents million that we invested in the first half of the year. This shows that we invested about a third of our CapEx on refreshing and maintaining existing stores and we invested about the same amount on IT projects. We continue to roll out our unified IT platform in Castorama France. We're starting to implement in Brico France and we've completed the store rollout in Poland. We invested another 13% of total on transformation. This included store CapEx for our new ranges and digital spend. The right hand block represents our new reduced guidance of up 1,000,000 for the full year and that sounds from up to 1,000,000 previously. The million reduction includes lower spend on new stores with IT spend preserved and transformation only slightly reduced. Now let's look at how we're tracking versus our total transformation costs in the 5 year plan. During the half, we spent million of transformation costs. In addition to the million we spent in the 1st 2 years of the plan. Our full year guidance for this year is 1,000,000, slightly higher than previously guided reflecting small changes to P and L costs and exceptional costs. We continue to expect total transformation costs of our plan will be around 1,000,000. So this leaves close to 1,000,000 for years 4 and 5 of the plan. Although we don't expect to change to the total, we are likely to see some further rebalancing between transformation P and L costs and exceptional costs. And we'll update more fully on this at the year end. So to summarize, In the first half of the year, unified and unique sales and margin continued to grow. However, these margin benefits were outweighed by weak performance in France and higher logistics costs. We have actions underway to improve our H2 performance in France, and also deliver a better H2 margin performance at a group level. If we execute on these plans, we expect to grow the group gross margin after clearance in the full year. Our transformation costs, as broadly as expected, and our stock production plans to deal with increased levels of non unified stocks are progressing well. Our balance sheet remains strong and we continued to return such cash to shareholders. We are operating in challenging markets, which make a tough plan tougher, but we are doing the things that we said we would do, and we are on track to give us strategic milestones for the 3rd year. So thank you for listening to us both. And I will take questions. Hi, it's Jeff Riddle from Morgan Stanley. Can you talk us through, please? You've got a gross margin benefit of 40 basis points on the Unified And Rager set up? Obviously, the target is essentially it's a 500 basis points improvement in the COGS when the Unified range move ranges are fully implemented. That seems a big jump from where you are at the moment. Can you talk about how that's going to be delivered, please? Sure. So actually, I think when we talked about equivalents, we said that the equivalent in terms of gross margin uplift will actually get the million was more like 300 basis points. And I think the first thing that I should really point out, because you may or may not have in your mind is thinking about what we said at the end of last year, when on a smaller base of unified bugs, you said that we had grown the margin by 180 basis points and now we're looking at something that's 40. But the two figures aren't actually comparable. We will be able to give you a more comparable and cumulative figure at the year end. And the reasons for not being comparable is that you're talking about different basis, the half year versus the full year, and about 20% of COGS and about 40% of COGS. But that's just kind of the that the math of why you can't decide for 2 things up. So why are we confident? It's worth just stepping back and sort of thinking about, what is important in terms of the things that need to happen in order to grow the margin. And what we're looking at is the question of maturity, question of fixed a question of clearance and a question of price. Until you get all of these things kind of cleaned, you don't get to the full opportunity that you've got that we believe in. So I start thinking about maturity One of the things that gives us confidence is the way that we have seen wave 1 implementations from the early part of the plan. Actually mature through the plan. So what happens is when you start off, you don't actually get a lot of benefits because the benefit that you're getting from the cost price reduction gets offset by clearance costs and any price reset that you might want to do. Once you've positions your price correctly and you've got through the clearance, then that leaves you with a clean number. And just to give you an illustration of that, our wave 1 implementations are already achieving more than 300 basis points of margin. So I'm saying globally, we need to get to a 300 basis point uplift. The early ranges that we've already unified are already showing us an uplift of that magnitude. Now those ranges actually have a small weight in the first half of the year. The first half of the year actually includes a small weighting of the mature, if you like, implementations and some less mature implementation, which we will see the benefits of in the second half of the year and into next year. Think the second element that's important, again, when you're looking at the particularly at the first half of this year, if what happens with mix So the first half of this year, has a very heavy mix of outdoor products in it. And I said that across our 7 categories, there's actually 25 full percentage points of margin difference between the highest margin category and the lowest margin. So again, simply a reference, it will tell you that if you're heavily weighted towards the lower margin, then that is going to suppress what you see in the margins. By the time we get to the end of this year, you will see a more normalized spread of categories and that in itself will improve the margin that we get it. And then the third thing that I think is worth remembering is that, I started talking about what we call the procurement maturity curve. And we are very low down still on the procurement maturity curve because we've only unified 40% of our COGS. What does that mean being low down on the procurement maturity curve? That means that all we are giving, our suppliers at the moment are consolidated volumes So for sure, we're getting cost price reduction, and the cost price reductions that we are getting, and we've given you some examples over the last year and a half are very much in line with, with what we need to achieve to get to 300 basis points. But at the moment, we haven't moved on to, if you like, very far up step 2 of the procurement maturity curve, step 2 being actually I'm going to give you more reliable sales forecasts and the more reliable I can make my sales forecast, again, the better cost price reduction you get, the better, stock management, possibilities you get. And then just to complete the picture of the procurement maturity curve, the higher end of that is when you really have an established relationship with suppliers and established history and you start deconstructing your bill of materials, and you know even better what things should cost. So that was a pretty long answer from me. But I was expecting the quest And I think what I'm hoping you're hearing is that we are already seeing through our very complicated spreadsheets and reporting systems that the margin uplift is coming through, but it just needs the time to mature to come through, and we are only halfway through. I was very confident. Just to follow-up, would your spreadsheets change at all if there's a hard Brexit? Because obviously then you move to WACO terms and then you can end up with an import tariffs I would imagine on product coming to the UK as opposed to coming to France. Does that change anything? Well, I mean, our spreadsheet could change because a lot of reasons. We've already said that we're operating in quite a tough it marked a tough operating environment. And also I did refer to soft price inflation. We tend to get a lag effect, when we're negotiating with suppliers on commodity price increases. And over the last few years, commodity price increases have gone up a lot. So it's not just Brexit that would, that could change our spread It could be what's happening in commodity prices. It could be what's happening from the foreign exchange, perspective. Brexit itself, when we've had a look at kind of worst case scenarios and actually even if you kind of went to WTO tariffs on the kind of the the basket of products that we are actually selling customers there at the lower end of the tariff range in general. So would joint sourcing still make sense in that sense? Good morning. Richard Chamberlain, RBC. A couple of questions, please. You talked about the plans to improve perform to Castorama going forward. I think one of the things you mentioned is changing the customer communication approach from the third quarter you give a bit more color on that? Is that about getting customers to sort of notice the new ranges more? Is that going to pop them? I'm going to give you as much answer as I can, to be, to protect us from competition because as you know, we have quite a strong competitor in France and I don't want I already give away quite a lot. In this presentation because I thought it was important to give you the confidence that we are doing. I think to be fair, even more than anywhere else, but actually we're starting in the end. So is, as I said, we've been in the case, sending a lot of things. At the point in time, when you think about ready, you know, we are not ready 100%. That's for sure. You just need to start to show to the customer what you've done and that things are improving. So a part of that is, of course, showing more than you rented. To be fair in communication and in store. We haven't talked in then, but we've appointed John Colley as the trading director. It his role in the organization is sitting on the execs. So it's dedicated to that. How we magnify for the customer, what we've been doing? How we have a planning and that is really making the unfaceted on what is new. So this is to install this is to in communication, this is to allow digital But to do that in France, we needed to have all those things, put it in an eye. We what is to push newness on a website that is not working. Now we are getting there, so we will. We are going to be able to communicate on prices as well because you need to be in the competition before you say hello, I'm back, you know, I'll be back right now. And I think, again, I think we are moving into that EDLP strategy, which has been what we want to do from the start. Remember, you know, 2 years and a half ago, we started with it. People are not buying a bat because of the promotion on the bat. They are buying a shower because they need a shower. So how we are going to offer to every customer, the shower at the right price all day along. And this is what we do right now, but we can start to talk about it. It was impossible to talk about it even 6 months ago. This is what we are going to do. Thank you. The other one is on the other international side because we can raw brush terms. Can you talk about what needs to be done to get the losses down? Particularly in I said I wouldn't answer this question. I'm sorry, Richard. I think there are different realities, as Karen said. I think to give you a straightforward example then, perhaps around Romania. We actually haven't integrated the tactica business into Brico Depot. We know that Brico Depot is continuing to do well. We're just starting to get the same offer into the praktiker stores we have to clear out the old stock and get the new ranges in place and that's that is a plan for Romania. And again, I think we haven't been deciding that it was about other internationals. I think what we said we would do as we did We closed on store in the UK. We've closed your store this year in France, is that we are tracking losses everywhere in the business. And this is just to show our commitment as an executive team to deliver this plan. And in this trending environment to do everything we can do, to commit to our I just wanted in Russia, for example. Are there any sort of quick fixes or any self help? Good surprise. It's certainly corkins at St. I just want to follow-up on Richard's question on pricing, which you say is one of the 3 main drivers of underperformance in France. But you managed to get the index down to 101 and still lost chunk of market share. So I wonder to what extent do you need to push your pricing down further to re engage with customers or you think you can do it better communication in store and the website and stuff. Do you have backlog of negative pricing sentiment amongst the key customers that you need to address more aggressively? I think we will do what needs to be done. I think what is very important to us is that this is not only through its prompt. I think we have we are starting point in France was in Castorama, actually not in France, was worse than what it was when we started the journey this journey anywhere else. I think our commitment to the customer is to make home improvement accessible for everyone. We have a very clear pricing policy that I'm going to tell publicly, which is different. If you talk about commodity product, if you talk about international brand product, and if you talk about own brand, I think the percentage of home when we started this journey, we were around 20, we are now over 35. It gives you the opportunity to create price difference and price preference without reducing all prices. So we are on a journey, We are not where we need to be, but we are progressing. And to be fair, it takes time for the customer, and you need to tell the customer that you've been improving. It's not like food. We are not you are not buying coffee or you are not buying a shower every week like you are buying coffee. So the price perception of customer in our improvement sector is built in a very different way than it is in clothing or food retail. So it takes time. Yeah, hi, this is Tashar from Goldman Sachs. Just on Kastorama, how many Kastorama stores are now loss making for you and on a group level, I mean, on customer level, how when do you see the trading sort of stabilizing on a like for like is it next year or is it in the second half? You will start to see things really shaping up for fat trauma. I think on the trading stabilizing, something we can put a date on that. I think Sarah said it's not a quick fix. But we're certainly the action plan that we've thought that we've tried is to improve the performance in the second half of the year. And on the stores, we don't have a lot of, loss making stores. And just RS departure, does it change the shape of unification of products in terms of execution? I mean, Exeter, it is still 90%, but does it change anything? No. No. And just one question on digital. The digital growth was only 8% in B and Q. Is that in line with your expectations, the digital sales growth that's happening in the business? Or you think you can accelerate the online channel a little more? Being queuing this, yes. Sorry, no, we're actually we're slightly behind what we think we can do. We're pushing in every country, there's a different story to be fair. So if you take VNQ, basically we're pushing to port our new generation platform in So which is effectively step changing. So it's already in for the mobile mobile app. It's in for tablet. We're about halfway through desktop as I speak to be honest, we should have finished it by the end of the week. So that actually will be a step change in being Q, but we're slightly behind where we thought. So we believe we can push B and Q much harder if you go back to sorry, B and Q is still only a 4% penetration. So if you look at France and Poland, it's circa 1, but we've still got a long, long way to go on digital and we're pushing very hard. We've now got the 1 hour click and collect everywhere in E and Q and the click and collect, sales went up 55%. Thank you. Just wonder, bear in mind, your comments about not pushing big trolleys around stores in 5 years' time. You've got lots of big stores and lots of trolleys. If you are currently doing any sort of reviews. I think, clearly, one might think about that in France, but also maybe the UK, maybe you comment on the Screwfix in town possibly talking about that? Yes. This is the fair comment. I think we are doing property review, as always, I would say. I think it's real time. I think we and we will continue to do this. I think what we are doing as well is a proper work on format. Which we are not ready to talk now as we speak, but we've been and I've been talking about that even 6 months ago. We've launched work internally, and as I said, looking outside as well, what is happening outside on to what is going to be the right format for the customer in the future. I think, again, without talking too much about it, I think I'm not saying that I'm saying that, that's how I'm going to disappear. Actually, it's really interesting to see that in the U. S, the kind of normal old retailer are seeing the sales through store going up again after that, very difficult period. So I think the future is combination of store and digital. I think we are very well placed in that format work with Screwfix in our portfolio as well. So that's we know what the convenient format is, we know how it works, and we know what it does to the customer when it works well. And to be fair as well, we know how it to a good big store. So I think with that probably unique combination in the Home Improvement sector, I think we can we can think of something that will be relevant to the customer in the coming years. And so just to follow-up on that, when will you tell us what the results of your deliberations are? And secondly, to bring in mind, you've got one set your sales in France online 4 in the UK. Do you feel that you're properly positioned for the new digital age? And, should you maybe for a bit more grant behind your digital presence. And what So I will we will update you after you ahead next year. I don't normally set the plan. On what our thinking about that, might be April let's see, but not that long. We are not going to wait ages before a day. So I think on the digital side, Steve can ask. I think we are I think we're starting from nearly nothing, excess profits. I think we are using our knowledge, our digital knowledge that is proven in Screwfix for the rest of the group. We are pushing as hard as we can. We are where we are. To be fair, if you look at Europe, we are not that we are not dissimilar from the rest of the competition, and we are pushing really hard. And that's why the CapEx, the investment in digital are not reducing. And if we are having a look at that, at this point, do you want to stay sometime? Yes, sure. I think fair, there's an enormous amount of grants already on digital. I think is the point. I think one of the problems in digital that people don't recognize is the hard stuff isn't the presentation stuff. It's actually all the plumbing behind the scenes. You've got the content and whatever. So taking Vero's point from earlier, what we're trying to do is make sure that actually we've got all the right infrastructure and the right processes behind the scenes that says when you actually get a market leading proposition, then it's sustainable. And it will be market leading. So and if you go and look at the mobile app that I was talking about in BNQ or mobile web in BNQ, that is market leading in terms of navigation, speed, and I won't say it's better than Amazon, but it could be. But as you know, Tony, this is a huge change internally as well. But I think the point, Tony, you're absolutely right, is So we're at the start of a journey. Have we gone far enough to digit of note? And Critchley from SocGen. I've got a question on the unique ranges. Where is the price of those settling compared to the closest branded competitors now? And also looking at the 3 categories that weren't seeing sales growth. What sort of actions do you need to take? Are is it easy to be fixable to turn those around and what have you learned? Based off. So first, I was saying I'm not going to disclose our pricing strategy, but as you have understood, I think in the unique offer, we are really be true to our promise to the customer, which is really making home improvement So there is a gap between what would be the standard proposition in the market and our proposition. From a price point to you, but not only. From a quality perspective, from a design perspective and from a functionality contribute. This is what unique is about. I think that was the story we talked about this bathroom furniture. They are I would say cheap because they are cheap. They are functional, they are high quality, and they are really bringing something to customers that didn't exist in the market. And that's why they are applying. So there is a substantial price differentiation in the unique offer. And this is a strategy. It has always been the strategy. I think What can we do if your question is can we fit those 3 categories? Yes, definitely we can. I think those 3 categories haven't a lot of uniqueness to be fair, as we said, the unique story is just at the beginning. And why is that? Because it takes more time, not unify. Unify, you take you reduce your number of supplier, you reduce the number of SKUs, you take the one that are working and use the volume. It was not easy to do, but it takes Lexon, the unique when you do unique, you have to start from the customer needs, really understand what the customer You need to understand the market. You need to design to costs. You need to store differently. We are, as we say, and with all the implication, we are really going from the very beginning to the end journey, it takes time. So we are going to do more in this category like AWS, but definitely we can fix them. Shall I go from over here in the corner? Andy Hughes from UBS. Another one on Unified, if I may. Karen is going back to your answer to the yes question at the start. I mean, it sounded pretty positive. I just wanted to check a couple of things there. Those phase 1 ranges where you are getting the 300 basis points. Are they representatives There's no particular reason why they're not representative. No, no, no, no, no, no, no, no, we we know, they are representatives, yes. Right. Okay. And on the second thing on that, In terms of the, whether you need to get sales gains to get back GBP 350,000,000, I mean, it was was sort of implying that you might need to get some sales gain to get that, whereas I think at the start of the program, 350 was like the steady state improvement? Is there any sort of slight movement in the goalposts there? No, I think when we and again, I think we need to come back to the origin of this journey. I still remember very well my first meeting with the investor when I started. If I would have said that we were getting sales growth of that you offer, but let me remind you, no one was believing that can sell the sensors across geographies. That's what the common starting cost. If I would have started this journey, I'm going to get to the EUR 350,000,000 with sales growth. People would have lost. What we said is if you want an equivalent, is it 1,000,000,000 of chasing power multiplied by 5% TBR. That was the easiest way to make people to give to people the confidence that we can deliver it because it's cost reduction. We are seeing these cost price reductions coming through. We've explained, hopefully, clearly, while this was not coming through as we speak, We've already said that this plan would be back end loaded. And to be fair, to see sales growth coming in, And that's what we talk about. It's not because we needed to deliver the 350,000,000. It's because, first, it's there. For why we wouldn't talk about it. And it's making the proof that we can sell the same stuff across. This is the only reason why we are talking about it. And to be fair, if people thought, oh, the old ranges were better, the old local ranges were better, they were not they are declining. The new stuff is growing. So it's fair to say the 350 we should get hung up about 300 basis points of gross margin because we might get premium sales growth in those ranges. Is that exactly? With everything happening outside, I'm not going to bet to more than 350,000,000 delivery in this plan. I'm sorry, but you know what I mean? Then you do what you want, but I don't know. I'm going to speak to this plan and really work out to deliver just very simplistically though, our plans say that we can get there with off price reduction, but lots of things changing. I have said there's been quite a lot of cost price increase that we'll need to manage through. So plans say we'll get there with cost base reduction, but what you're also seeing is that there's some sales stuff coming through as well. Well, I got the mic just one other, I think I can't remember which results meeting it was. You alluded to the fact that you might not need 2 separate chains in France. When they're selling unified ranges. Now given what's happened at Caso, if you were thinking of pushing the button on removing one of the brands, are you closer to hitting the button? As I said that was my first point in this presentation, we will do what needs to be done. When it needs to be done. I think to date, we have an issue in France. We are addressing it. We want to show you the progress We know that the one Kingfisher plan is addressing the problem that we have in France. As we go, as I show, as I heard of anything, demonstrated it since we started this journey. It's out of Cochrane's 50. On the unique to accelerate a sort of good opportunity for you. Given the long lead times, can you give us a sort of guidelines to how much unique product you'd expect to be sort of coming in through the ranges in the next couple of years. And then in terms of unique. Can you just remind us how sort of tails uplift versus the unified product? I think previously they were seeing I can't give you numbers about how unique and when unique is going to ease the floor for the customer. I think what we've seen, what we've done, and I think this is the biggest thing in this presentation at this moment in stage of the transformation is we have enough evidence and enough scale. So which means this is not cherry picking about what works. And I've heard the mistake and what doesn't work. We've been very taking sales growth from unification. From unification, you expect CPR. When we were expecting sales growth without telling it was around Munich. What I can tell you is in the unique program that we've been launching, we get that growth. Actually, I spend some time on the categories because you've seen one of those categories is double digit growth. Honestly, guys, in this environment, with everything happening in retail and to get double digit growth in one full category, this is meaning as I said, the 7th category is the whole business. And then if you were looking at you add few other, which were high single digit growth, I think it's good stuff. And as I said, some of them are not good enough and we are going to fix it, but we know how to deliver it. I think we will get unique as we go because some of the unique development has been hitting the floor, especially in bathroom, but not only. I think we were in town borough last week with all the leadership team to the event you've been invited a year ago, but we are doing that every year internally. And we saw all the new development that are going to eat the floor next year, There is some unique products not going to sell, but there are some amazing in categories that you would be surprised. We will you will discover that as we go along. So and it's not going to finish. I was reading an article in the press, I think, this week, company number on which, and I'm not going to say which new sector is saying that we are not IKEA. Our unit our product are not unique enough to generic growth Hey, that's not true. The scale of it is not big enough. And to be fair to those people who grow that article, from a customer called Judith. Is it really visible? No, it's not. Next year is the year, with this trading plan, with John Colley coming in and taking Matija, with the trading commercial, the trading director within the operating, we are going to shout about it. You mentioned that double digit on that category chart. Wasn't quite sure if some of those categories were benefiting from external market conditions, sort of that plus 11%? Because If you see some liquidity market condition, I'm it too weird. Okay. I've got the one where there might help seasonal, for example. And that may have been the capital 1. I see it's not as been led by the market condition because if you take, of course, we have a very good Q2 and still some good sales, you know, in the end of the season for seasonal, but the two one has carried in has been has been a drama. So all in all, I don't think seasonal has been helped. When you look down those category numbers, the positive ones would probably reflect market share gains you'd expect? Yes, of course. Yes, of course. Over here. It's James Business for Pressures. I had one very quick one and a second one, perhaps requiring a a lentier answer. Can you perhaps disaggregate that half 1 into Q1 and Q2? You said Q2 was better. So what did the gross margin do in Q2 relative to Q1? May help in terms of What happened to the gross margin in Q2 rather than Q1? Yes. So what I said was, we're not assuming that the backdrop of cost pressure will go away. So we'll have a bit of a headwind there and we will deal with that. But what we will see is some price we've got to do some work on the price hierarchies in France, which means that we didn't get all our pricing right. So that means that whereas we took a net cost investment hit in the first half of the year, all other things being equal, not expecting that, in the second half of the year. The phasing of the implementations, is that play more heavily weighted in the second half of the year. So the cost price reductions will come through more in the second half of the year than the first And that's what we saw, last year. The mix will be a richer margin mix in the second half of the year And then we're working on those logistics and efficiencies. My question was actually what the half one of mine's forty basis how you split that into Q1 in Q2? You indicated that Q2 was better. I'm just saying that not thing any more than that that, since we started this, we've seen Q on Q progression. Okay. Just going back to Castor France, 108 to 101, it's such a big improvement in pricing, but I'm still puzzled as to how market share get worse for the fascia when pricing gets so much better. So I'm just wondering if you can exclude whether there were issues, execution issues that the customer would have had to suffer in the stores may be linked to the first that tends to take cost out of stores Just give me that reassurance, because I don't think I've seen a parallel where I've seen pricing improve so much and actually customer behavior switching off even more. What I'm talking about price, I'm talking about price index. Price deception hasn't moved yet accordingly. Because to be fair, we haven't communicated properly about this. And as I said, it takes long in this sector. It takes long for customers to realize that we're back in terms of competition. And to be fair as well, we couldn't shout before because we were not at that point. This 101 is just the most recent, research analysis that we've been doing honestly from an execution in store and among the ground, as you know, quite often, there was nothing that I would say is worse in cash flow than it has been in any other operating company. And I think to be fair, we are looking at customer perception in stock. So let me very clear, customers that are going into store, they're happy with the service, they're happy with everything. We don't have enough. The problem we've got is attractive. And this is why I started my presentation by the brand perception. It's because, you know, people are not considering us as the first choice. So this is what we need to achieve. We need to bring them back to the one that are there. They think the services is better than it was. The pricing are better. The quality of the product is better. So again, there is no problem as I did in some of the press as well. About the fact that the new offer is not working in Takata. That's the point. We don't say enough. And the problem we've got is the traffic, and the traffic is I'd say both on the web because it is improving on the work, but what's digitally and in sport. And that what we need to improve. Hi, it's Simon Owen. Just to follow-up on France. Can you give us a bit of help around phasing in France in the second half of the year given the costs through the first half. And Obviously, cash flows seems to be in a slightly unique position of kind of getting harmed by weather in the first half, but not seeing any benefit from weather. In fact, half because of the range, I mean, how much of the footfall declines do you think the kind of market for environment related to how much you think of format related? Thanks for the first one on the cost phasing. So maybe two points to look at. We did say that the increase in costs in the first half of the year, a large part of that was attributed the advertising phasing, to support the Brico Depot anniversary. Now that doesn't mean that we are not going to do any advertising in the second half of the year. But that was phased into the 1st half. The positive that will be phased, the other positive that will be phased into the 2nd half comes from the France action plan. And that's around the point that I made about selecting the store hours better. I taking people out of stores to better reflect what's being sold already started. Those are the two things. Generally, I mean, do you think from the capacities is simply a element of these awards of being a victim of circumstance in the first half of the year? Or do you actually think to kind of profit the dividend? As I said previously, I tried not to say that. Our performance is because I think the overall environment in France is not as positive as it was. I think I was very hopeful that as you may see the customer confident and all the best of it. But I think it's just the end of the situation that has been going on for quite a while. And I think, as I said, this discussion of deception thing is people are not doing to us especially those big tenders as a first choice. That's what we need to change. But to be able to change this, you need to have that. The customer. I don't think it was worse in the first half than it has been at any time, but It's just that the more you go, the less you are relevant, and I think we are where we are. Can I just ask about the the cost reduction program? So you've done a chunks going into Poland, but for France, we can't. I mean, what does the next, what are the next couple of years look like? Do we have kind of more departments and more options going into Poland or a Poland like equivalents. Is there a kind of big another next chunk to go? So on the you're talking about the finance shared service Thanks. So at the moment, what's gone in is mostly B and Q and a bit of Inkjet Or Center, France goes in shortly and then Poland would follow because what we want to do is take advantage of the, the more consistent processes that you get from the the unified IT system. So the financial transactional work will go in, after, on the back of the IT role, we're always looking for new things to do. In fact, I mean, it's a very small number of people, but we put in some people actually we thought that as we look through the GNFR program, there was some opportunity to be had from looking at the long tail of spend And actually, you work on that long tail of spend through compliance. It's not very sexy. You get people to fill in their purchase orders properly, except And we created a business case for that and thought it was worth putting some more people into Poland. So the things are going well there now and when we'll be looking for opportunities, but we're not making any commitments, right now. Sorry, it's a follow-up. Again, if you could please, Karen. On the Kingfisher website, with showing consensus figures, there's a very big increase in adjusted profit for tax next year by about GBP 200,000,000. The largest increase mainly coming from transformation costs coming right down. I think 135,000,000 you guided this year to about 1,000,000 next year. Can I take it from your comments earlier about having to sort of reallocate some of that million those numbers need to change quite significantly? We're not making any comment on that at the moment. We've still got 300,000,000 of cash transformation costs left 2 years of the transformation to go. We think that's enough exactly how they will be phased and split we'll update on the board at the year end. Yes, it's Charles Allen and Bloomberg Intelligence. I think at the beginning of the program, you said that you wanted to take about 200,000 SKUs out of the business. Out of the $400,000 at the time. Can you say how many of those have now been completely cleared? I think on what has been unified, we've decreased by 80% the number of students. On the 42% that has been unified, we reduced by 80%. So that would still be less than $100,000 that have been taken out of the business. It will be what it will be. I think we are doing it on the base on the sand and the customer needs. So but it's huge reduction. I don't think we actually, gave a number. We pointed out just how many SKUs we had, but not an objective to There was a pie chart in one of the things that said that I think it was 197,000, the exact that said that you're going to take. I don't remember. What I remember me saying it was the cut of the tail. It was steel listed. Yeah. It was all steel listed. We set off the fuse that we had in the system. We actually had this tale of old and delisted stuff. And one of our, we called our first sharp initiatives was to get that out of of the system. And we finished that about 18 months ago and actually changed the processes in the business to make sure that that didn't come back again. So, that's quite important because even though at the moment we've got high levels of inventory, it's good inventory. It doesn't have that kind of layer of be listed in it. Anymore? Thank you very much for your time this morning.