I will then update you on the progress being made against our key strategic objectives, including our plan for France, before we open up for Q&A. There are four key things I want to highlight about our performance. First is market share. We see this as a key indicator of our progress beyond the macroeconomic trends. I'm pleased with our performance here. Kingfisher delivered market share gains in the U.K. and Ireland, in France, and in Poland in the year. That market share growth is being powered by our group's strategic initiatives and strong execution against our plans. Point number two, we have seen strong delivery in two key areas of the group strategy: trade and e-commerce. Our trade sales penetration is up 4.9 percentage points to 17.9%, supported by the development of our trade proposition in all banners.
Group e-commerce sales penetration is now 19%, compared to 8% in 2019, partly driven by our successful marketplaces, which are now live in all markets. These are two group-led strategic initiatives that we successfully implemented in the U.K. first. They are the blueprint for Kingfisher's strategy. We are now actively rolling out this recipe of success to all our other markets. You will see this demonstrated across today's presentation. At the same time, we are accelerating our restructuring plan at Castorama France. By the end of this financial year, we will have completed, or been in the process of completing, works on 24 low-performing stores. With our financial performance, we stayed disciplined against a challenging market backdrop. Our adjusted profit before tax and free cash flow was in line with or ahead of the initial guidance we set last year.
We have a strong grip on the operational levers of our business. Gross margin was up 50 basis points. As guided, we delivered GBP 120 million of structural cost reductions. We also reduced same-store inventory by GBP 107 million. Overall, Kingfisher is in its best operational shape for years. We remain confident about the growth opportunities in our business. Let me now hand over to Bhavesh. Thank you.
Thank you, Thierry. Good morning, everyone. Thank you for joining us today. It's great to meet so many of you in person. I'm now two months into my role as Kingfisher's new CFO, and I've spent time meeting colleagues across the business and visiting stores across our banners. I'd like to thank all the teams for the warm welcome I've received. I've been impressed with what I've seen and heard, particularly the enthusiasm and commitment of the teams across our markets to delivering a great customer proposition and our strategic priorities. Kingfisher is a company with a clear strategy driving our market-leading businesses. It's highly cash-generative and in excellent operational shape. I'm particularly excited by the opportunity to grow our trade business and drive our e-commerce growth, two key pillars of the Powered by Kingfisher strategy that you'll hear more on from Thierry shortly.
While early days, as I look forward, my priority areas will be first, building on our strong disciplines in cost and cash management. Second, maintaining a strong focus on returns as we invest for growth. Third, delivering attractive cash returns to our shareholders while maintaining a strong balance sheet. Let me start with the key financial highlights for the year. Total sales for the group in constant currency were 0.8% lower, with like-for-like sales declining 1.7%. I'll speak in more detail on this shortly. We delivered a gross margin of 37.3%, up 50 basis points versus the previous year. Adjusted profit before tax was GBP 528 million, decreasing 7% versus the previous year. Group statutory profit before tax was GBP 307 million, reflecting non-cash impairments in some of our stores in goodwill. Our free cash flow was strong at GBP 511 million, reflecting good progress in reducing inventory levels.
Net debt, which is mainly property leases, was just over GBP 2 billion, with net leverage at 1.6 x EBITDA. We returned GBP 453 million to shareholders via dividends and share buybacks, up 14% on the previous year. We proposed a full-year dividend of GBP 12.40, in line with last year. Given our strong free cash flow and confidence in our future cash generation, we're announcing today a new GBP 300 million share buyback program. Turning to sales across our core categories, we saw an improving trend through the year, driven by repair, maintenance, and renovation activity. Overall, core like-for-like sales were 1.1% lower across the year, with the second half showing an improving performance with like-for-like at minus 0.3%. Like-for-like sales from big-ticket categories, which include kitchens and bathrooms, were 4.5% lower for the year, reflecting broader market weakness.
In Q4, we saw some encouraging big-ticket trends across all our key markets, with like-for-like sales up 1.3%, supported by successful new kitchen and bathroom range reviews and campaigns. In our seasonal categories, which include outdoor furniture, barbecues, and heating and cooling products, like-for-like sales were 2.6% lower, impacted by unfavorable weather in May and June. For the group overall, we saw flat retail price inflation and a negative mixed impact on the average selling price from lower big-ticket sales. Overall volumes are lower, but with an improving underlying trend in core category volumes as we move through the year. Let me now walk through performance across our regions, starting with the U.K. and Ireland. Our U.K. and Ireland businesses delivered total sales of GBP 6.5 billion, up 1.2%, and like-for-like sales up 0.2%. B&Q, TradePoint, and Screwfix all delivered market share gains in the year.
These gains were driven by our strong performance in trade and e-commerce. At B&Q, TradePoint like-for-like sales were up 6.4%, while Screwfix like-for-like grew its like-for-like by 1%. E-commerce sales across our two businesses were up 8.7%. Gross margin for the U.K. and Ireland increased by 20 basis points. U.K. and Ireland operating costs increased by 2.1%. This includes a one-off benefit of GBP 33 million of business rates refunds at B&Q, related to overpayments between 2017 to 2023, of which GBP 8 million was received in H2. Retail profit for the U.K. and Ireland was 0.6% higher at GBP 558 million, with a retail operating margin of 8.6%, 10 basis points lower than the prior year. In France, our banners delivered total sales of GBP 3.9 billion, a like-for-like decline of 6.2%, amidst a weak home improvement market, which declined by over 7% in the year.
Both banners gained market share driven by strong new range launches and trade customer sales. At Castorama, our like-for-like sales were lower by 6.6% for the year. Sales trends improved in the second half of the year across all categories, with big-ticket seeing a notable pickup in Q4. At Brico Dépôt, like-for-like sales were 5.7% lower. Overall, sales trends improved in H2, supported by strong sales growth in the kitchens category in Q4, where like-for-like sales were up 4.9%. Brico also made strong progress in developing its trade proposition, with trade sales penetration reaching 12.8% in January, up 4.2 percentage points. Gross margin for France increased by 80 basis points, and operating costs were tightly managed, decreasing by 1.6% year- on- year. Overall, France's retail profit was GBP 95 million, with margin 80 basis points lower at 2.4%.
Thierry will talk shortly about our actions in France to both continue our relative outperformance whilst improving profitability. Poland delivered total sales of GBP 1.8 billion, up 3.2%, supported by the opening of five new stores and market share gains. Like-for-like sales were marginally down by 0.1%. Big-ticket categories delivered growth year on year, with underlying core and seasonal category sales both improving in the second half. Like our other markets, Poland has made good progress in driving its trade business. Trade sales penetration reached 24.5% in January, up 19.1 percentage points. The business also successfully launched its e-commerce marketplace in January 2025, with positive early results. Poland gross margin increased by 80 basis points, and operating costs were up 5.4%, reflecting higher staff costs than new store openings. Retail profit for the year was 8% higher at GBP 90 million, with a retail profit margin 20 basis points higher at 5.1%.
Looking briefly now at our other international segment. First, Brico Dépôt Iberia, where like-for-like sales were up 6.1%, with retail profit for the year increasing from GBP 6 million to GBP 8 million. At Brico Dépôt Romania, the retail loss improved to GBP 11 million versus GBP 18 million in the prior year. In December, we announced the sale of the Romanian business for an enterprise value of EUR 70 million, equivalent to around GBP 58 million. The sale is expected to complete in H1. Screwfix France and other, which includes our franchise and wholesale business, recorded an overall loss of GBP 35 million. The majority of this was driven by Screwfix France, as the business continued to invest in the opening of new stores. Finally, our Turkish joint venture Koçtaş contributed an overall loss of GBP 15 million after tax and interest against a highly volatile macroeconomic and trading environment.
Koçtaş swiftly initiated a comprehensive restructuring program in response to these challenges, including a reduction in headcount of 900 people and the closure of 106 stores, which is around 30% of its estate. We're monitoring the performance of our Turkish joint venture closely to ensure the business gets back on track. Now, turning to group profit, starting from the left of this slide. Lower like-for-like sales at a constant gross margin rate contributed to GBP 85 million of profit decline. This was largely offset by a gross margin rate improvement of 50 basis points, which added GBP 60 million to profit. The impact of staff pay rate inflation was GBP 94 million, with an equal weighting across H1 and H2. Technology and other cost increases were GBP 64 million, driven by higher technology investments in H2 and investment in marketplace and advertising spend.
We delivered on our guidance of GBP 120 million of structural cost savings, which span across the gross margin improvement, technology cost, and operating cost reduction bars on this chart. As I mentioned earlier, business rates refunds at B&Q were GBP 33 million. The ineffective foreign exchange hedges in the prior year resulted in a GBP 10 million year-on-year benefit. Our central costs and net finance costs were GBP 3 million lower. Finally, our share of the Koçtaş JV was GBP 14 million lower year-on-year. A key strength of the business is its strong cash generation, as you can see on this slide. Starting on the left, we generated EBITDA of just under GBP 1.3 billion. Good work has been done on inventory management, which reduced by six days. This drove a working capital inflow of GBP 108 million. Net rent paid was GBP 512 million.
Tax, interest, and other cash outflows were GBP 58 million, including GBP 23 million of tax-phasing benefits and refunds. Capital expenditure was GBP 317 million, representing 2.5% of sales. This was circa 12% lower year-on-year due to the timing of project spend. Overall, free cash flow for the year was GBP 511 million. We paid an ordinary dividend of GBP 228 million and executed a further GBP 225 million of share buybacks. Kingfisher has a strong balance sheet, which we'll maintain through our disciplined capital allocation framework. Our priority is investment in organic growth, where we see a compelling return profile. We target CapEx of around 3% of sales per year, which may vary slightly year-on-year depending on the phasing of projects. We aim to grow our dividend progressively over time, reflecting our firm focus on growing EPS over time. We target dividend cover in the range of 2.25x-2.75x .
As with last year, we may move outside of this range from time to time. Kingfisher has a strong track record of returning surplus capital to shareholders, with GBP 1.9 billion returned to shareholders since 2021 via dividends and share buybacks. That's over 40% of our current market capitalization. Our financial resilience is underpinned by our solid investment-grade credit rating, keeping our leverage within a maximum of two times EBITDA and maintaining strong liquidity headroom. Total liquidity as of 31st January was just under GBP 1 billion, including an undrawn RCF of GBP 650 million and cash of GBP 336 million. As we look to the year ahead, we'll maintain our laser focus on cost discipline and cash generation. We have multiple gross margin opportunities. Some examples include work underway on product component costing across the group to help our banners achieve savings through product design and to negotiate better prices with common vendors.
We are making further reductions in our distribution center space in France and Poland, building on the significant reductions already achieved in 2024. On OpEx and inventory, we have programs already underway to unlock savings in the year ahead. We continue to enhance the productivity of our stores, for example, through more self-checkout terminals. We are also further streamlining our head offices. In Castorama, France, the annualized savings from the restructuring will be around GBP 9 million. We are expanding the use of our in-house developed supply chain visibility tool to further improve our stock forecasting, driving lower inventory, better stock turn, and ultimately more free cash flow. Let me turn now to our FY 2025-2026 outlook and guidance. First, with our market growth scenarios. In the U.K. and Ireland, we observe a relatively resilient consumer supporting repairs, maintenance, and existing home renovation. However, we remain mindful of the near-term uncertainties facing households.
Our outlook for the U.K. and Ireland home improvement market in 2025 is somewhere between flat and low single-digit percent growth year-on-year. In France, while repairs and maintenance activity is supportive, we remain cautious on consumer sentiment and the housing market in the near term. Our home improvement market outlook is for a low to mid-single-digit percent decline in a low case and flat year-on-year in a high case. In Poland, while consumers expect to see real wage growth in 2025, we're mindful of the uncertainties continuing to face households. In the very near term, we see current geopolitical factors having an adverse impact on the Polish consumer. For the year as a whole, we expect the home improvement market in Poland to be somewhere between a low single-digit percent decline and a low single-digit percent growth year-on-year.
On profit, we expect full-year adjusted PBT of between GBP 480 million-GBP 540 million. The bridge from last year's PBT reflects a number of moving parts. First, the GBP 33 million cost rebuild related to B&Q's business rates refunds last year. Second, a GBP 10 million year-on-year benefit from the sale on Romania. We then expect to fully offset higher inflation, wages, and taxes totaling around GBP 145 million, with gross margin and OpEx mitigations. These include structural cost and productivity initiatives already underway, which I highlighted earlier. Finally, operating leverage or deleverage from our market growth scenarios. Within this, we're assuming some level of sales transference in the U.K. from the closure of Homebase stores. On free cash flow, we expect between GBP 420 million-GBP 480 million, supported by further inventory reductions, but also reflecting the reversal of some CapEx and creditor timing benefits.
The board and the management team remain confident of the cash generation capabilities of the business, which underpins our new GBP 300 million share buyback program. Let me now hand back to Thierry.
Thank you, Bhavesh. I would now like to start by taking a moment to remind you of the fundamentals of Kingfisher's investment case. This underpins our conviction in the medium to longer-term outlook. We have number one and number two leading positions in our markets, and those markets worth GBP 160 million have attractive and structural growth drivers. Secondly, our powered by Kingfisher model gives us distinctive competitive advantages. We have diverse banners with formats and propositions that address different customer needs. Within our banners, we have a balanced exposure to trade and retail customers. Our own exclusive brands are industry-leading and a powerful competitive advantage.
We have leading-edge technology and e-commerce, bringing our customers speed and choice, including fast fulfillment and our online marketplaces. As a group, we have scale. This means providing buying and sourcing synergies to our banners and leveraging the group to invest in technology. We drive market share gains through our strategic growth initiatives. We are building out our exposure to trade customers, which is now very much a proven strategy with clear runway to keep growing. On e-commerce, we have an ambition to reach 30% sales penetration, and we are well on track to achieve that. With retail media, we are targeting additional revenues of 3% of total e-commerce sales, and we are opening new stores primarily through the continued expansion of Screwfix and the growth opportunities we see in Poland. Our medium-term target is for new stores to contribute 1.5%-2.5% to sales growth.
Bringing all these elements together, we are committed to our financial priorities, which you can see along the bottom of these slides. Turning to slide 18, I want to come back to how we have grown our market share in all key regions last year. First, we continue to strengthen our core proposition. We maintain strong price indices supported by effective management of our product cost. We have also maintained high stock availability driven by smarter inventory and logistic management. We have leveraged the power of our own brands to strengthen product ranges. Our banners delivered many successful range reviews during the year, like bathroom and kitchen at B&Q and heating and kitchens at Brico Dépôt in France. We have made significant improvements to the omnichannel customer journey, reflected in strong and improved customer net promoter scores in all regions.
In parallel, we are leveraging our group's strategic growth drivers. Over the next few slides, I will cover the success we have seen with these initiatives in the U.K., and how we are accelerating the rollout in all our markets. Starting here on slide 19, our TradePoint has benefited from the group strategy for trade. We know that trade customers visit our stores more frequently and spend more on average than retail customers. Our group plan, therefore, centers around six key pillars to develop a compelling proposition for tradespeople: trade-specific ranges, dedicated new loyalty programs, people, value-add services, digital, and stores. Importantly, this plan leverages our assets, pushes up store sales densities with limited to no CapEx. TradePoint achieved strong market share gains last year, and its sales now represent 23.4% of B&Q, nearly five percentage points more than 2019.
TradePoint now has 1.4 million active trade customers, strongly up year-on-year. The business has a presence in 70% of B&Q stores, and we are now finding ways to expand TradePoint into smaller footprints, leveraging click and collect. In October, TradePoint launched its first-ever mobile app. The customer response has been strong, with app sales already accounting for 16% of TradePoint's online sales. Arguably, the most important differentiator is our TradePoint colleagues. We have recruited 44 trade sales partners in our stores, a sales force who build close relationships with local trades, and have a degree of freedom to strike deals on the shop floor. Stores operating with trade partners are strongly overperforming stores without. We are therefore accelerating new sales partners' roles this year and expecting further positive impact on our sales.
Over the medium term, we confirm our ambition to reach over GBP 1 billion of sales at TradePoint. To slide 20, we have applied this group framework in France and Poland with strong results. In France, trade penetration at Brico Dépôt is now 12.8%, up 4.2 percentage points since early last year. Brico rolled out dedicated trade service desk and colleagues across all stores, complemented by a popular new loyalty program and mobile app. At Castorama, we have been testing our trade customer proposition, CastoPro, in eight stores, seeing a very strong uplift in trade sales as a result. Following this successful trial, we have decided to accelerate rollout to the entire Castorama France store network. In Poland, we have seen impressive growth in trade sales, growing by 19 percentage points to 24.5% in the last year.
This was supported by Castorama's new trade loyalty program, which saw an average of around 900 membership sign-ups per day in 2024. The business has also introduced dedicated CastoPro trade zones at 12 stores, following a concept similar to TradePoint, with a further 15 stores to come this year. The group has provided support to all countries, for example, through the introduction of new trade-specific OEB ranges and the technology to support new digital capabilities. You can see we are really excited about the trade opportunity in France and Poland, which is supporting market share gains in both countries. Over the medium term, our ambition is to double trade penetration in France and achieve a trade sales penetration of at least 30% in Poland. As we trade, the group has provided the blueprint for profitable e-commerce growth in the first instance with our U.K. banners.
In five years, B&Q's e-commerce sales penetration has tripled to 15%, while at Screwfix, penetration has gone from 33% to 58%. This growth has driven consistent market share gains at both banners. Our group e-commerce strategy is defined by speed and choice. With speed, our national coverage enables us to fulfill orders quickly. We have decided to largely rely on store picking, facilitating 93% of our first-party e-commerce orders. We have set up 53 B&Q digital hubs. These are larger stores with extended ranges, which service over 90% of U.K. home deliveries. Our click and collect offering is also market-leading, as under one hour for B&Q and just one minute for Screwfix. Secondly, choice. We know the vast majority of customer home improvement journeys start online, and so having a strong online experience is crucial for conversion, either online or in stores.
At B&Q, GBP 309 million of sales are from marketplace, representing 41% of its total e-commerce sales, with over 2 million SKUs. At Screwfix, the overall assortment has increased to 72,000 products, with the extended ranges available next day. To slide 22, we are applying the group's proven e-commerce framework across France and Poland, driving further market share gains. Castorama France has grown from an e-commerce sales penetration of 2% in 2019 to 7% last year. As with B&Q three years ago, we expect Castorama's online sales to move up quickly following the launch of its marketplace platform in Q1 2024, which is already up to 14% penetration. An additional 700,000 SKUs are now available for customers. This marketplace leverages the technology built by Kingfisher and applied first to B&Q, and the rollout incurred minimal cost.
In addition, 10% of Castorama's online sales now originate through its AI virtual assistant, Halo Casto, which was developed by Kingfisher and launched at Castorama in 2023. At Brico Dépôt France, e-commerce penetration is now up to 5%, and we look forward to seeing the results of its new website set to launch in Q2. At Castorama Poland, we launched our e-commerce marketplace in January 2025 with positive early results. App sales are also progressing well, with participation up to 12% from 7% in the prior year. With marketplaces live in all our markets, we focus this year. Our focus this year is to scale up the number of SKUs to accelerate the onboarding of cross-border merchants and start offering click and collect for marketplace orders.
Our target for group e-commerce sales is to reach 30% of total sales, with one third of this coming from marketplace, and we are well on track. On to slide 23 and the very real opportunity for Kingfisher in data and retail media, which are now scaling up across all markets. These initiatives started three years ago and are having a tangible impact on sales, margin, and cash. I would like to highlight our AI-led markdown and promotion solutions, which were built by the group and first deployed at B&Q last year. The solutions created more than 1,500 bespoke campaigns last year. They resulted in significant improvement to B&Q clearance product margins, as well as a more efficient sales through of its stock. Our next priority is to quickly expand these solutions in France and Poland, with implementation already underway at Castorama France.
We are also continuing to scale up our retail media proposition, making big strides over the last year. So far, the return on advertising spend that we are generating for over 500 vendors and marketplace merchants is above 600%, significantly ahead of industry averages. We look forward to launching retail media at Screwfix and further tests of in-store retail media campaigns. Our ambition for retail media income is to reach up to 3% of the group's total e-commerce sales. We believe this is a very reasonable target, given the success we are witnessing in U.S. non-food retail, where retail media is one step more advanced than the U.K. and Europe. Turning now to slide 24, and before we discuss the Screwfix rollout in France, I wanted to remind you of the proposition we have built in the U.K. and its runway for growth.
Screwfix has a proven model that delivers industry-leading returns on capital employed. With 952 stores and 58% e-commerce sales penetration, Screwfix possesses arguably the strongest omnichannel proposition in U.K. general retail. Over the last five years, sales at Screwfix have grown from GBP 1.8 billion to GBP 2.6 billion, with a CAGR of 7.6%. Over 80% of these sales come from tradespeople. Our store estate has grown by 40% since 2019, and store sales densities are two times our closest competitor. Since then, we have added 2 percentage points of market share, and our customer net promoter score has increased by 8 percentage points to 88. This success is driven by unbeatable ranges, prices, and convenience. On price, we index about 2% cheaper than our competitors. On convenience, we have truly innovative capabilities, enabling one-minute click and collect and one-hour home delivery to sites, which now covers 60% of the U.K. population.
I hear anecdotally that tradespeople have started to use Screwfix as a verb on sites. When a pro needs something quickly, they just Screwfix it. We are not standing still with further growth top of mind. Our share of wallet with customers is only 15%. We are developing plans to therefore increase loyalty and share of spend with us. We are also building on Screwfix's assortment of 72,000 SKUs, for example, through ranges fulfilled directly by vendors. We are exploring a number of enhancements to our fast delivery propositions. With our stores, we have validated the blueprint for a new format, Screwfix City, which is performing ahead of our expectations. We are aiming to open up to 100 of these stores in the coming years.
With Kingfisher's backing, Screwfix has made significant investment in the last five years to support its current position, and the business is primed for strong and profitable growth. Now to slide 25, we are exporting this successful model to France. In short, we are pleased to see the rollout progressing in line with our expectations, despite the challenging consumer backdrop in France. We believe the key to its long-term success is leveraging all the things that make Screwfix great in the U.K.: the best prices, fast fulfillment, and a wide selection of products. We are seeing clear momentum across all KPIs, with stronger customer retention, growing national brand awareness, and over 11,000 sign-ups to the new trade loyalty program. Screwfix in France currently generates 54% of its sales from trade customers.
The business opened 10 new stores last year, taking us to a total of 30, with up to five more this year. Most significantly, the sales trends of all store opening cohorts are progressing in line already for expectations. We have a clear roadmap to profitability with a measured approach to the pace of store openings in the coming years. To reiterate, we see the potential for more than 600 Screwfix stores in France over time. Turning now to an update on our plan for France and starting here on slide 27, with the retail profit break year -on -year, by far the biggest factor has been the home improvement market decline in France, down by over 7% according to GFK, due to a weak French consumer against a very uncertain political and economic environment.
Against this backdrop, we have stayed focused on delivering against our strategic plans and managing effectively our gross margin and cost. Through a combination of market share gains, the gross margin improvements that Bhavesh discussed earlier, and cost reductions, both structural and short-term flex, we managed to fully offset the profit impact of the market decline. Finally, higher pay rates, other inflation, and investment we made in technology to support our gross ambitions were a total of GBP 42 billion. While we are pleased with the self-help done in 2024, there is still much to be done. On slide 28, I want to reiterate our clear path to achieving our medium-term margin target of 5%-7%. You can see here our four self-help initiatives. One, to simplify the organization and structure in France, where we have already made significant progress.
Two, grow sales densities at both banners, including through the rollout of our group trade and e-commerce initiatives. Three, create productivity and operating efficiencies. Four, restructure approximately one third of Castorama's stores network, which is well on the way. We appreciate the gap to 5%-7% is larger than it was one year ago, but you can be confident that our self-help initiatives are starting to bear results, as you can see in this presentation. We also firmly believe the severe market decline seen in 2023 and in 2024 will at least reverse over the medium term. Now, to give you a little more detail on how we are building on our momentum and accelerating our French growth and self-help initiatives. First, we completed the simplification of the French organizational structure in April last year. We shifted the responsibility for centralized decision to the individual banners.
We also strengthened the leadership teams with six strong new appointments at Castorama, including in commercial, digital marketing, and technology. In November, we started the restructuring of Castorama's head office, which will yield GBP 9 million of annualized cost savings in 2025 and 2026. Second, we continue to drive higher sales densities at both banners. Key range reviews in kitchen, bathroom, storage, and eating were completed in the year. For example, our new Pragma kitchen range offers a unique solution to customers looking for a simple kitchen. It was launched at Brico Dépôt France last year, driving strong sales outperformance compared to other ranges. Given this success, the new team at Castorama will accelerate strategic range reviews in the year ahead. As you have heard in detail, we continue to drive our trade and e-commerce propositions.
Castorama Pro program will be quickly rolled out to all stores this year, and we have high expectations for its e-commerce marketplace as well as for the progress of Pro sales at Brico Dépôt. Our third focus area is improving our productivity and operating efficiency. We achieved significant structural cost reduction last year, with the total operating cost down 1.6% in France. 75% of Kingfisher's inventory reduction last year was in France, and Brico Dépôt achieved a 9% reduction in its logistics space, with the first further 1.5% at Castorama, which will support lower logistics costs going forward. Looking to the year ahead, Bhavesh has already discussed the group-wide programs in place to further reduce our structural cost base. On top of this, both banners will be scaling up Kingfisher's Markdown and Promo AI solution, as well as retail media. These are all accretive to gross margin.
Finally, we are making rapid progress in restructuring and modernizing Castorama's stores network. By the end of this year, we will have completed or have works in motion on 24 of its lowest performing stores. As a reminder, we said last year that we are targeting one third of Castorama's estate. We expect these actions to gradually achieve structural increases in profitability. I want to be clear that the performance in France is not where we want it to be, but this plan demonstrates that we are taking comprehensive action to drive top line and market share, create efficiencies, and quickly address the store network as we return France to profitable growth. To summarize here on slide 31, Kingfisher gained market share in all key regions against a challenging backdrop.
We achieved this by strong execution against our key group strategic initiatives of trade and e-commerce, with the success at our U.K. businesses now being replicated in France and Poland. In France, we are growing market share and delivering on our self-help actions against what was a very weak market for the second year in a row. We delivered profit and cash in line or ahead of our expectations, thanks to our strong financial discipline. Following over GBP 900 million of share buyback, we have today announced a new GBP 300 million program. We remain confident about the medium to longer term outlook for the sector and the growth opportunities in our business. Home improvement is an exciting and attractive market, and we are uniquely positioned to win. With that, over to you. Thank you.
Thank you very much, Thierry and Bhavesh.
We'll now start the Q&A. Maybe just if you can wait for the microphone to get to you, state your name and institution. C an we start with Warwick, please, in the third row?
It feels like COVID days. Morning, Warwick Okines, BNP Paribas . Just one question actually on Screwfix France. Could you talk about the cash generation or the cash consumption of Screwfix France? Why are you only opening five stores in the year ahead? Thank you.
Yeah, thank you, Warwick. I think first of all, we are very pleased with what we are seeing today. You saw in the presentation, there are many what I would call industrial KPIs, starting from price index, customer NPS, but probably the most important one is the repeat purchase. We are very pleased with the repeat purchase. Where we recruit trade, they are coming back.
Today, the number one focus of the team is the store sales like-for-like growth. To make sure every cohort in year two, year three, year four, the like-for-like is in line with the maturation curve. You maybe remember one year ago we showed a maturation curve. That is the number one KPI for us. We are seeing improvement of awareness, and all those underlying KPIs are strong. Therefore, in fact, expansion is not the number one topic. We could open more stores. We continue to open stores this in 2024. We have five stores in the plan for 2025. That is overall limited CapEx. The Screwfix in the U.K. and France, it is not really a CapEx issue. It is really to make sure the maturation of the store like-for-like sales is exactly in line with our expectation.
We are going to hear Anne first and then Kate.
Thank you. It's Anne Critchlow from Berenberg. First, a question on the Screwfix 100 city stores. Is that in addition to the existing target for Screwfix store openings, please? Could you also comment on compact stores generally, what you're doing there in other banners and what your thinking is about compact stores looking forward? Thank you.
Yeah, I think it's fair to say that initially we had a target of 1,000 stores. This Screwfix City are on top of the 1,000 stores, yes. They are smaller stores, so there are a bit less sales than the initial Screwfix, but again, very happy sales profit ahead of expectations. Second part of the question, we still very much believe in compact stores.
It's a bit tricky in DIY because, for example, as you said, kitchen, bathroom in a small space, but we are very much convinced that over time that would be a very critical format for DIY. There are two formats. We have tested many different formats the past four years. There are two formats we have validated, the Screwfix City and as well the B&Q 2,000 sq m retail park format. This is as well a format, compact store format that is a tick. Now we will see more of this 2,000 sq m B&Q and retail park in the future. There are two or three formats we are still looking at. B&Q locals, I would say 70%-80% happy, so not far. Brico Dépôt 1,000 sq m in France, we have three stores. As well, we are looking at continuing to fine-tune the model.
We have as well smaller store in Poland. While in Poland, to be fair, the biggest opportunity for us today is more medium box around 4,000 sq m. Those three formats, Brico Dépôt 1,000, B&Q local and Poland, I would say happy 70%-80%, so on the good path. Before we're happy 100%, not happy 100%, we'll not start a very fast expansion. You're welcome.
Could we go to Kate who's third row hand up?
Thanks. I'm Kate Calvert from Investec. I'm Tooth Mutual, slightly connected. First of all, could you give more detail on the logistics reduction you've been going through and what's the potential to do more? The second question is on stock. How should we think about the potential to reduce stock going forward from here? Thanks so much.
Thank you, Kate. Logistic, the start is in 2019.
We were not in a great place. If you remember the past one Kingfisher, it was all around a lot of fast increase of private label, Far East sourcing. We had a lot of issues with tech. We had two legacy systems in France for three years, etc. A lot of disruption across the business. Therefore, we started with high inventory and much too many spaces in our DC. The first thing is we are correcting those mistakes. Two, we are really implementing new tools for forecasting. You remember we discussed AI and our supply chain visibility tool to give us real-time view on every DC, every ship across the world, etc. That today is providing a lot of fruits. I think we are as well moving a bit from stock DCs to flow-through DCs.
The combination of all of that, and I checked the figures this morning, we said in the past that we reduce, for example, the square meter in France by 27%, probably what we said one year ago. In 2024, we reduce the square meter at Brico Dépôt by 9% and Castorama 1.5%. This year, we have a plan to reduce the space in France by about 13% addition. In Poland, we believe we have as well too much space now, and we have a plan to reduce space in Poland. We have as well some plan in the U.K. to continue to modernize the B&Q network. That is structural actions on inventory.
I think from an inventory perspective, look, the team's done a good job this year, GBP 100 million out, six days. I think there's more potential if we benchmark Kingfisher against other retailers.
I recognize not all retailers are the same, but we still benchmark on the bottom quartile of our days of inventory that we carry. We continue to focus on our slow movers, using some of the tools and technology. The Markdown and Promo tool helps us get better visibility in where and how we should push stock through the system. We are trialing things at Screwfix, shipping direct from vendor to the store, bypassing any sort of central distribution center. There are lots of initiatives underway, but I think there is more we can do.
Can you hear Adam, please, on the end of the row?
Hi, good morning. It is Adam Cochrane from Deutsche Bank. Three questions if I can. Firstly, on the cash position, you have guided to the GBP 420 million-GBP 480 million, but you have got a GBP 228 million dividend, a GBP 300 million share buyback.
You've talked rather cautiously about Poland and France. Why is now the right time to be gearing up the balance sheet given the cautious outlook that you've presented? Secondly, within the GBP 145 million of costs and then mitigation, what degree of operational leverage or deleverage have you assumed within that GBP 145 million? Or is that the difference between the other bit of the guidance range? What's in that GBP 145 million? Finally, to cut a third of the stores in Turkey is already quite impressive. How do we think about the Turkish profitability for next year? There's quite a lot going on in that country right now. I imagine it might be hard. Can we annualize the sort of the 1H, 2H profit movements to get to what we might look like next year?
Thanks.
Maybe do you want to start with cash flow and then we'll combine on the other questions?
Yeah. Yeah. Look, we're not gearing up the balance sheet. I don't worry at 1.6 times net netty, but below our target of 2. Very, very strong balance sheet. I think the business has done great this year in terms of what it's delivered from a cash perspective. That underpins a bit of what we're guiding next year. The drivers, strong inventory performance, and we expect more from inventory and working capital to help. Staying disciplined on our CapEx is a little bit of timing between sort of creditor payments this year to next year. We've had a great year from a cash perspective and expect to continue to deliver next year. We're not doing that at expense of driving up our leverage.
I think maybe to start on the 145 and we can come in together. I think 145 is a combination of cost and gross margin. You remember back in November, we said we'd partially mitigate. I think since then, we have looked at how all our cost plans. In fact, we are probably more in the pipeline. We have accelerated some of those cost actions. Part of it is mitigated through gross margin. Gross margin is retail media, marketplace, logistic, typically logistic sq m reduction I mentioned. We have accelerated that since November. Another relatively good news is we have probably better negotiation with our Far East suppliers than expected six months ago. We have been able to negotiate down raw material. Raw material during COVID were very high. Since then, they are down. We have been able to negotiate down some of these COGS.
That has contributed to this GBP 145 million. Maybe on Turkey.
I'll just add to what Thierry said. One of the things I've observed going around the business, seeing the stores, there is a real strong muscle in managing costs. Coming from Tesco, a much lower margin business, I know what good looks like, what good rigor on managing costs looks like. I definitely see that across all the banners. I gave you some examples in my script of some of the initiatives that we are doing that are intelligent cost savings to really get into structural reductions over time.
Maybe just a word on Turkey. I think we have been in Turkey for over 25 years. We are JV with Koç. Koç is the largest private company in Turkey, very strong partner. We have been very pleased with Turkey for 24 years with dividends, etc.
Yes, for the past 18 months, I will not comment too much on the Turkish macroeconomy because probably they are more experienced than me today. The government has decided this summer for a hard landing with strongly increasing interest rates, trying to cool down the minimum wages. That has totally collapsed the demand from summer 2024. On top of that, very high interest rates. All the costs related to credit cards, consumer credit cards went through the roof. I think the team did a good job, really aggressive in the restructuring plan. I'm very impressed and happy with the action. We have strong support. We are working well together with Koçtaş to manage the situation. I think you have seen a loss around minus GBP 15 million in 2024. I think we assume about the same level for 2025.
We are going to get a Rich next .
Thank you.
Thanks .
Richard Jamie in RBC. Three from me, please, as well, if that's okay. First is on the Homebase impacts. I wonder what you guys are expecting there in terms of this year and next year, sort of contribution to sales for B&Q. Second one's on CapEx, sort of split by region. How much are you now intending to spend on the France sort of existing estate, remaining estate? Sort of thinking about how you're keeping that kind of consistent with the trade and digital offer. Finally, on the U.K. gross margin, it sounds like the marketplace had a favorable impact as you'd expect through the year. What about product mix impacts? I think they were adverse. Is that to do with seasonal and is there potential for that to sort of reverse in the coming year? Thanks.
Thank you, Richard. I'll start with Homebase.
When we look at the B&Q estate today, about half of the B&Q stores have Homebase in their catchment area. We will be impacted by the change of banner from Homebase. I must say very early days, we are early in 2025, but so far we see a positive impact to the B&Q sales. It is very early. It depends on categories. I would say even for the spring, Homebase was very strong in garden. We really see during the spring the magnitude of the transference. So far, we are seeing positive impact. Obviously, I do not want to guide on a specific number for now.
Just on CapEx in France, Thierry talked about right-sizing transfers to Brico Dépôt. They are relatively CapEx light. There is no big bang of CapEx with what we are doing in France. It is within our 3% envelope. Did 13 stores last year.
We got another 11. That is a quarter of the estate. Again, it is well within our CapEx envelope.
I think on gross margin, in short, while we have been relatively cautious on market scenario, you have seen that. I would say more opportunities in gross margin. That is true of structural actions. Relatively happy to see the purchasing impact, the COGS, the raw material down. That is a positive. I remind you that in our policy, we want to keep very strong price indexes. The topic is not to increase price per se. We want to keep strong price indices. We have seen very rational market behaviors in all our markets. We continue to see that this year. I think we should keep the benefit of those purchasing gains.
All the structural action, marketplace, retail media, you're right to say that the mix in 2024 was not towards big tickets. We could have some expectation here. A lot of jobs going on in the supply chain. At last, we are overall having a pretty healthy inventory. Therefore, all the accruals for the listing items are as well contributing to the margin.
Okay.
Thank you. W e're going to Grace, please.
Thank you. Hi, Grace Gilberg from Jefferies. Just two questions for me, if I may. First, could I get a little bit more color around any changes in consumer behavior in Poland? Just the overall macro backdrop there would be really helpful. Second, and I recognize you may not be able to answer this, but I'm going to try anyway. Is there any color you can give around the last few months within trading?
I know you typically provide a current trading number that was not provided today, but any type of commentary around that would be really helpful. Thank you.
Maybe let's cover generally the consumer across the three markets, give you a bit of flavor where we are. I start with Poland. It was your question. I think you have seen we had pretty good Q4 in Poland. We were seeing an improvement of the consumer confidence in Poland, driven by real wage growth, as well as inflation gradually coming down. I think recently we have had better news on inflation than expected. Therefore, if we think, I would not say medium term, maybe H2, 2025, we are fairly positive about the consumer in Poland. In the very short term, we see a lot of volatility and, to be fair, a lot of worries about the consumer.
It's a mix of geopolitical situation. Poland was very close to Ukraine and very close to the U.S. They are in a difficult position. You have presidential election in May. For different reasons, the mortgage rate is still very high. Short term, I would say a lot of volatility and uncertainty, but overall positive in the medium term. If you want to say words around the current trading, why we don't discuss current trading.
You're right. We aren't disclosing current trading today. Today is about our results, our strategy, the long-term direction where we want to take this business. I appreciate in the previous periods post-COVID, we've given a little bit more disclosure. We've chosen not to do that so we can focus on where we want to drive our business. We've discussed it with the board, with Thierry, with our advisors.
We feel that's really to focus on promoting our long-term story. I will give you trading update at Q1, which is just in a couple of weeks' time.
Maybe to give a bit of color on U.K. and France. I think U.K., I would say, fairly resilient customer, at least for DIY. We are seeing the real wage growth. We have seen support from 75%-80% of our business is repair, maintenance, renovation. Probably our customer demographic is a bit skewed toward middle income, so probably protecting us a bit. We were pleased to see the big ticket in Q4. I can tell you that in Q4, kitchen and bathroom at B&Q were positive like for like. We have a positive order well in kitchen. It's a bit early days to say after one quarter, yes, a big ticket is back.
You remember we discussed a lot our view that between the mortgage approval and the restart of DIY spend on big ticket, we need nine to twelve months. We have started to see a better housing market in the U.K. for the few months. Early days, but Q4 was good for big ticket. We are seeing some Homebase transference. In the short term, if you want puts and takes, I think question would be employment and mortgage probably higher for longer. Overall, I would say relatively positive. Our worst-case scenario for the U.K. is flat. France, more difficult. Clearly, we feel the market stay very weak. When you look at consumer confidence, gradually improving. The low point was somewhere around early 2023 for in-say. We are gradually seeing an improvement of the consumer confidence.
H2, you follow the French situation, a lot of political uncertainty around budget that did not help all H2. Nevertheless, we saw Q4 with some good news on big ticket. For example, Brico Dépôt, a positive big ticket in Q4. Castorama still negative with an improvement. My view is, again, we have been cautious in our market scenario. You have seen that. There is a time when the French DIY market will recover. You have households with a lot of savings. The long-term average is about 14% in France. They have 18% of savings. The mortgages versus 2019, new mortgage minus 44 versus 2019. Housing transaction minus 28 versus 2019. It's difficult to see. There is a point it should reverse. That's the only touch of optimism I would put on France.
Can we go to Jeff, please, and sit in the middle?
Thank you.
I was very struck by your chart about gross margin opportunities. I think you used the word multiple opportunities. I appreciate the slide was with regard to 2025. If we looked out over, say, three years, many of those drivers feel longer-term in nature. Do they add up to tens of basis points or hundreds of basis points of opportunity? Why don't I give you a bit of color on what we're doing?
There are a lot of initiatives that are already underway. We're not starting from zero. Give you a concrete example. We have an initiative we're calling Buying for Growth, which is taking what we know about our private label business and disaggregating the components of a particular product, commodities, energy, what it costs to actually build that product.
That is giving us really good insight to go back to the branded products in terms of how we are negotiating because there has been inflation over the last couple of years on some of our COGS. We are really getting bottom-up science and looking at product cost components to then push back and really get good negotiation with suppliers. Marketplace has been growing rapidly. That is accretive. As you have seen, we have rolled it out now to Poland, to France. It continues to grow really quickly at B&Q. Retail media, we talked about trialing it at Screwfix. These are all things that are underway that are additive and will push our margin forward next year and the year beyond.
Just to say again, we are a bit cautious on sales trend, but we believe cost and margin is really in our control. There are key opportunities.
We are more bullish on this.
Sorry, I'll get a Charles , please. Thank you.
Thanks. Charles Allen of Bloomberg Intelligence. Generally, with the focus on increasing sales densities, when you look at your peers around the world, do you see any product categories that you're missing out on where you see peers have got a strong presence and where you think you could maybe generate more sales from bringing some new items in?
I will give you a good example and a bad example. The good example is trade. If we had spotted the big categories, we should have gone already. For example, I can give you cleaning products. You go to Home Depot and Lowe's. You enter the store on cleaning products. We are learning from that. We could do more. It's a good product. It's relatively easy to manage. It's good margin. Overall, it's trade.
Trade is the biggest subsistence opportunities where we can learn from others. I can give you another example. In the U.S., Home Depot and Lowe's, they sell a lot of appliances because they are the leader in this category. In Europe, you have other places where you will buy your kitchen appliances. We are doing some of this. It's a market, but not the size of the U.S. To answer, it's really around trade, the biggest subsistence opportunities.
We are learning from others. Izabel, please.
Thank you. It's Izabel Dobreva from Morgan Stanley. I had a couple of questions. Firstly, on the competitive environment in France, could you talk a little bit of what you're seeing in terms of competitive behavior, given the volume outlook is weak and there have been a lot of cost pressures thrust upon the industry?
A similar question on the U.K., but my question is more around pricing. Would you say that there is perhaps a better opportunity to pass on pricing in the U.K. today versus, say, three months ago, given, again, competition is not particularly strong? On the flip side, are you quite cautious from passing on that pricing, given the sort of start of the recovery? Perhaps you do not want to disrupt that. My final question is just going back to the point on inventories. You have talked a lot about trade. I am curious, is there any need to expand the range or maybe improve availability, given that is very important for trade? Or is that something that you think can be more than offset by your other initiatives leading to further inflows?
Thank you.
I think let's have a general point on prices and competitive positioning versus other, and especially France and the U.K. Our key principle is strong price indices. That's our core. We are putting that every week. We are in a good place today. We want to stay in a good place. You need to always start from there when you're a mass market retailer. That's strong for us. Private label, 15%-30% cheaper than national brands. We are half of ourselves. We leverage our private label as well to drive more volume. Second point, we have seen rational behavior in every market, including Leroy Merlin, France, Leroy Merlin, Poland. When you talk to the team, they will tell you, "Oh, they did a promo this week." They did a promo last year the same week. Yes, they are competitors.
They are doing their job. They have promo. It is not anything outstanding, abnormal in France, in Poland. I think I will not comment on Leroy Merlin, France, but everyone in France suffered in 2023, 2024. I would expect the market to stay rational in 2025 in France and in Poland. Just a word, when we say we usually say the U.K. is not a competitive market, but we just lost one major competitor. I think some other building merchants are not all in great shape. We are gaining shares. We are working hard on prices, on trade, on e-commerce. That has been driving our market share in the U.K. I think quickly on inventory and trade, yes, when you move to more trade sales, you need a little bit more inventory.
It's not necessarily the range, but you need more what I would call the project quantity. When the trades come to your store and you want $50, you need to have the $50. If you have five, you don't do the deal. As I can give you more example, we have so much in the tank on inventory reduction in the coming years. As you say, we are not the best in class. We are starting from a high level. Lots going on. Therefore, we'll compensate that.
I'll just add that inventory turns a lot faster with the trade. It is a different dynamic than what you'd see with a DIY consumer and stock.
Thank you.
Thank you.
That's a wrap. Thierry, over to you for any closing remarks.
No, again, thank you. Thank you for being with us this morning.
Thank you for all your questions. Again, happy to keep in touch ourselves with Bhavesh and with all the team. Thank you, everyone.