Castorama Poland store visit presentation
Transcription
Castorama Poland store visit presentation
CASTORAMA POLAND STORE VISIT 28 SEPTEMBER 2004 Today’s agenda • Short presentation – Kingfisher’s international network – Poland, an attractive home improvement market – Castorama today, the market leader – Castorama’s future growth potential • Q&A • Store visit to Targowek, Warsaw Kingfisher international network • Retail is a national scale game – Need countries of some scale – Need to be no 1 or 2 in country • Beginning to see a network effect for us – Global product in key GM categories – Best practice/experience shift • Belief is in locally adapted warehouse – Network brings huge advantage vs local players Three proven formats add flexibility Big-box – UK & Ireland (warehouse), France, Poland – China (core cities) • Medium-box – UK & Ireland (mini-Warehouse), Italy, Poland – China (smaller cities), Taiwan & Korea • Small box – France, Spain (Brico Depot/Stock) International – a growth engine •2004/05 Sales £593m (+29%), profit £62m (+60%) Stores Feb 2004 H1 opening H2 planned Feb 2005 Est Poland 19 +2 +5 26 Italy 18 +3 +2 23 China 15 +3 +4 22 Taiwan 17 - +1 18 Turkey 5 - - 5 Spain 1 +2 +1 4 TOTAL 75 +10 +13 98 •Plus Korea and Russia in progress International - boosting growth in H1 04/05 Sales growth ROW +29% UK and Ireland +33% *Constant currency France + 38% Poland – an attractive market • Biggest in Central Europe – – – 39 million people 13 million homes 18 cities with 200k+ • High growth potential – 2004 GDP growth est 6% – forecasted at 4-5% ongoing • Joined EU on 1 May 2004 Poland – an attractive market • • • • RMI market of EUR5bn 70% home ownership A market of natural DIY-ers Strong interest in home improvement • Housing stock in need of repair • Low income, but high disposable Castorama today – No 1 • First store 1997 • 21 stores, 198,000sq.m • 4,509 employees ( one expatriate ) • Highly recognised brand • Last year sales £286m, retail profit £41m • H1 sales up 33%, retail profit up 66% • Above Group average ROIC and positive cash flow Strong growth in sales and profits £m Sales Profit LFL 13.1% LFL 11.1% LFL 10.2% 42 286 30 227 21 165 2001/02 2002/03 2003/04 2001/02 2002/03 2003/04 Castorama – No 1 in Poland Stores range in size from 7,000 to 12,000 m2 Castorama today – No 1 • Highly adapted, localised format – targets heavy DIY/trade – In-store volumes for projects – Clear EDLP policy • Good locations • High emphasis on in -store standards • Group-sourced own-brands • Low cost operating model Castorama Warsaw Castorama Warsaw – strong price message Own brand prominence MAC Allister advertising and stand Relative performance 2002 Castorama Leroy Merlin OBI 19 12 23 9,700 11,000 8,000 Sales €m 336 120(e) 220(e) Sales/m 2 2.2 1.4(e) 1.2(e) Stores Average m 2 Castorama - growth potential • Physical expansion – To open around 7 stores a year – 26 stores by the year-end – Smaller cities important in Poland – Scope for a smaller, ”mini-Warehouse” – Total stores 60+ in 2009/10 – Potential for over 100 in long term Castorama – drivers of growth • Price – margin reinvestment and supply chain development • Range – SSM, own-label, and direct sourcing • People – Training and reward initiatives • Central costs – leveraged scale effect What Poland brings to Kingfisher • Significant returns and profit growth • Volumes for European buying • Sourcing office for Kingfisher • Leverage position into Russia – Shares similar market characteristics – Similar format, common suppliers – Transfer of expertise to Russian team Future growth – spotlight on Russia .. • • • • • • • Positive dynamics for BIY market growth.. Most property needs extensive refurbishment Construction market growing strongly Property prices rising “Empty shell” apartments “BIY” culture Fragmented market – few Western ‘big -box’ retailers • The “dacha” factor Future growth – spotlight on Russia .. • Medium term growth in Moscow and St Petersburg • Longer term development in Western ‘regions’ • Warehouse blueprint based on Castorama Poland • 20,000 – 30,000 sku’s • Low price; high volume Future growth – spotlight on Russia .. • 144m people, concentrated west of the Ural mountains • 13 cities with population of more than 1 million; 33 cities of more than 500,000 • GDP growth > 5% • Stabilised currency • Consistent improvement in country ‘risk profile’ • Retail expenditure as a % of sales is highest in Europe • Estimated $6 billion RMI (Repair, Maintenance and Improvement) market