2022/23 Annual Report and Accounts
Kingfisher at a glance
Strategic Report
2 Chair’s statement
3 Chief Executive Officer’s statement
5 Our markets
6 Our strategy
8 Performance against priorities
10 Key Performance Indicators
12 Business model
14 People and culture
16 Stakeholder engagement and
decision-making
23 Responsible Business
27 Our response to the Task Force on
Climate-related Financial Disclosures
36 Non-financial information statement
39 Financial review
47 Trading review by division
51 Risks
59 Viability statement
61 Going concern
Governance
62 Corporate governance
64 Board of Directors
66 Board composition
67 Board activities
68 Board effectiveness
69 Nomination Committee report
71 Responsible Business Committee report
73 Audit Committee report
77 Directors’ remuneration report
101 Directors’ report
104 Statement of directors’ responsibility
Financial Statements
105 Independent auditors’ report
116 Consolidated income statement
117 Consolidated statement of
comprehensive income
118 Consolidated statement of changes in equity
119 Consolidated balance sheet
120 Consolidated cash flow statement
121 Notes to the consolidated
financial statements
167 Company balance sheet
168 Company statement of changes in equity
169 Notes to the Company financial statements
181 Group five year financial summary
182 Shareholder information
184 Glossary
Financial highlightsContents
(0.7)%
1
Like-for-like
2
7.1%
(160)bps
Post-tax
£471m
2021/22: £843m
Free cash flow
2,3
£(40)m
2021/22: £385m
Statutory
23.8p
2021/22: 40.3p
Net debt
2
£(2,274)m
2021/22: £(1,572)m
£923m
2021/22: £1,148m
Pre-tax
£611m
2021/22: £1,007m
Total dividend
3
12.40p
2021/22: 12.40p
Net debt
2
to EBITDA
2
1.6x
2021/22: 1.0x
Adjusted
2
29.7p
2021/22: 35.2p
Net decrease in cash
£(555)m
2021/22: £(237)m
£4,795m
2021/22: £4,935m
£13,059m
2021/22: £13,183m
£758m
2021/22: £949m
36.7%
(70)bps
5.8%
(140)bps
Sales
Retail profit
2
/margin
2
Statutory profit – pre-tax
and post-tax
Gross profit/margin
2
Adjusted pre-tax profit
2
/margin
Basic earnings per share (EPS) –
adjusted and statutory
For the year ended 31 January 2023
1. Variance in constant currency.
2. Alternative performance measure (APM). See the Glossary on pages 184 to 187 for definitions and
reconciliations of APMs.
3. The Board has proposed a final dividend per share of 8.60p (FY 21/22 final dividend: 8.60p), resulting in a
proposed total dividend per share of 12.40p in respect of FY 22/23 (FY 21/22: 12.40p). The final dividend
is subject to the approval of shareholders at the Annual General Meeting on 27 June 2023.
4. Evaluation of our Key Performance Indicators against our strategy can be found on pages 10 and 11 and
pages 39 to 46.
1,188
UK &
Ireland
3
223
France
4
97
Poland
33
Romania
28
Spain
3
Portugal
355
Turkey
5
Kingfisher is an international home improvement company
with over 1,900
1
stores in eight countries across Europe.
We offer home improvement products and services to
consumers and trade professionals through our stores
and e-commerce channels.
Kingfisher operates in eight countries across Europe under retail
banners including B&Q, Castorama, Brico Dépôt, Screwfix, TradePoint
and Koçtaş, supported by a team of 82,000
1, 2
colleagues.
All figures on this page relate to the year ended 31 January 2023.
1. Turkey joint venture included.
2. Total, not full-time equivalent.
3. B&Q 316. Screwfix 872.
4. Castorama 95. Brico Dépôt 123. Screwfix 5.
5. Our stores in Turkey, Koçtaş, are operated as a 50% joint venture. Store
figure as of 31 December 2022.
Who we are
Our strategic principles
Where we operate
Our purpose
We believe a better world starts with better homes.
We help make better homes accessible for everyone.
Kingfisher banners are not the same.
This is a strength.
We ‘power’ these banners
as a Group.
Human, agile and lean.A clear vision to build customer
propositions for the future.
Our stores
1Kingfisher 2022/23 Annual Report and Accounts
Chair’s statement
Kingfisher has seen a tremendous amount of change over the
last few years as we set about modernising the company and
positioning it for future growth. We are now three years into the
‘Powered by Kingfisher’ strategy and Chief Executive Thierry
Garnier and his team have done a great job organising the
resources of the Group. This means we can make the most of
our overall size and scale while keeping, through our local teams,
the majority of operational decisions as close to the customer
as possible.
Last year this strategy delivered above average market
performance in all our banners together with solid increases in
customer satisfaction and colleague engagement. These are the
‘vital signs’ for a company like Kingfisher and it’s encouraging to
see them consistently on the rise. At the same time, continued
investment in our IT and digital capability is paying dividends and,
along with other initiatives, such as the opening of our first
Screwfix store in France last October, gives us great
confidence in our ability to generate growth in shareholder
value going forward.
Our strategy and infrastructure investments are also making
Kingfisher a more resilient business, one more capable of
absorbing and responding to external shocks, of which there
seems to be no shortage. During the year we saw this greater
resilience clearly as our supply chain and stock availability held
up very well despite the significant sourcing challenges created
by repeated Covid-19 lockdowns in China and the impact on
energy prices and supplier confidence arising as a result of
the war in Ukraine.
In the year, the Group delivered a resilient financial
performance, particularly given the year on year comparable
and the impact of rapid inflation and rising interest rates on
consumer confidence towards the end of the year. Overall
revenues for the Group were down 0.7% (3-year LFL up 15.6%),
adjusted pre tax profits at £758 million with statutory pre-tax
profits at £611 million, down 39.3%. The Board is proposing a final
dividend of 8.60p, which would make the total dividend for the
year 12.40p and bring our total return to shareholders in the year
to £583 million.
Our purpose is to ‘make better homes accessible for everyone’.
This is a task that is always worthwhile but perhaps never
more so than right now. The pandemic has changed the role
of the home with more working from home and with energy
management an increasing priority for both households and
governments, this is a time when Kingfisher can really step
up and help. The recent surge in interest in our energy saving
products and services has been remarkable and with the profile
of the transition to a net zero economy only increasing, we
expect this interest to be sustained. Our offer in this critical area
will continue to grow in line with demand and using the Group’s
scale and design capability, we will look to continue to offer
these products at prices that are affordable to the majority.
Underpinning our purpose is a determination to operate the
company in a way that is sensitive to the current and future
needs of the communities and customers we serve, our
colleagues and the planet. Kingfisher has a long history as
a pioneer of Responsible Business and we are committed to
staying an acknowledged leader in the field. Over the last year
we made good progress in a number of important areas. These
include the roll out of immersive diversity and inclusion training
for senior teams, the creation of new development programmes
for store-based colleagues, support for apprenticeship
programmes, reducing our carbon emissions, increasing the
number of ‘sustainable’ products we offer and setting new,
ambitious targets as part of our net zero commitment. These
and other initiatives are covered in detail in this report and will
hopefully provide compelling evidence of our determination to
play our part as a good corporate citizen.
Our ESG commitments and progress are discussed in detail
on pages 23 to 26.
Good governance is an integral part of the Company’s success.
We have a diverse and balanced Board who make a strong
contribution to strategic development and stewardship of
the Group. Recently, the Board received inclusive leadership
training and completed an externally facilitated Board
effectiveness review. The outcome of this review was positive
and concluded that the Board operates effectively and well.
In May we were delighted to welcome Bill Lennie to the Board.
Bill spent the bulk of his career in the US Home Improvement
market and his deep knowledge of the sector has been very
much in evidence in his early dealings with both executive and
Board colleagues. Bill will be a great asset to the business
going forward.
I would also like to thank all my other colleagues on the Board
for their continued commitment and support of the business.
We have had challenges to face over the past 12 months and
the quality of the Board and its collegiate way of working has
clearly helped us make good decisions, often at pace. I must
also thank Thierry and the team for their tireless efforts to
drive the business forward and our wider base of colleagues
right across the business who make Kingfisher what it is.
We look forward with confidence. Short term macro economic
challenges are clearly present but with a compelling strategy,
excellent leadership and the evident commitment of our
people, I remain very optimistic about our prospects.
Andrew Cosslett
Chair of the Board
20 March 2023
2
Strategic Report Governance Financial Statements
Kingfisher 2022/23 Annual Report and Accounts
Chief Executive Officer’s statement
After two extraordinary years dominated by the pandemic, this
year has brought new challenges, as households and businesses
across Europe navigate the impact of inflationary pressures.
I would like to thank one more time all Kingfisher colleagues for
their hard work to support our customers throughout this time.
Thanks to their efforts, the business has delivered a year of solid
execution and a resilient performance while continuing to make
strategic progress at pace.
A year of solid execution
Kingfisher’s financial performance for FY 22/23 was in line
with our expectations and guidance, against strong prior
year comparatives. Like-for-like sales were 15.6% ahead
of pre-pandemic levels, and our sales outperformed home
improvement industry growth. Across all our markets, our sales
have remained resilient in both DIY and DIFM/trade channels.
To reflect our performance, the Board has proposed a total
dividend of 12.40p per share, in line with FY 21/22.
We have maintained a sharp focus to deliver on value to our
customers during this challenging period for household finances,
while at the same time managing our cost inflation pressures
effectively. Strong supply chain management has ensured good
product availability while keeping a firm grip of our inventories.
Strong progress against our strategic priorities
We are pleased with the progress we have made in the
three years since launching our ‘Powered by Kingfisher’
strategic plan. This has been achieved against the backdrop of
an extraordinary operating environment, which has presented
challenges as well as opportunities for our business. To reflect
the fast-moving world in which we live, we have refreshed our
strategic focus areas to ensure data, trade, culture and agility
are given increased prominence and focus, and to better align
to our investments for growth in multiple areas of the business.
You can read more about the refreshed pillars of ‘Powered by
Kingfisher’ on pages 6 to 9.
Our e-commerce sales have increased by 146% over the
last three years. This has been driven by improvements to
our e-commerce proposition that offer our customers more
convenience, faster fulfilment of orders, and broader product
choice. To expand choice, this year we launched marketplaces
at B&Q in the UK and Brico Dépôt in Spain and Portugal, all
of which are performing strongly. Our stores are at the heart of
our e-commerce proposition and continue to play
a fundamental role, with 91% of online orders picked in store.
Our own exclusive brands (OEB), which represent 45% of Group
sales, continue to be a point of differentiation for our banners.
During the year, we redefined our OEB strategy around three
core pillars: innovation, affordability and sustainability. Moving
forward, all new product launches and range reviews will clearly
align to these pillars.
Throughout the year, we have continued to take advantage
of expansion opportunities for our different banners. Screwfix
opened a record 82 new stores in the UK and Ireland in the year,
creating over 800 jobs in local communities. We also took the
first steps in bringing its proven model to France, with five
stores opened between October 2022 and January 2023.
In Poland, we opened seven new Castorama stores, bringing
its total to 97 stores.
Our compact store format tests in the UK, France and Poland
have delivered encouraging learnings and results. In the year
ahead, we will continue to test further compact stores in
several markets, including B&Q Local in the UK, where we
see considerable opportunity to increase our presence in
more urban areas.
As a Group, we have been prioritising Responsible Business
for over three decades and this year, we continued to make
progress against our targets. We exceeded our 1.5°C aligned
science-based scope 1 and 2 carbon reduction targets,
reducing emissions by 52.7% (FY 19/20: 18.5%). Sustainable
Home Products accounted for £6.2 billion of sales, representing
47% of Group sales (FY 21/22: 44%). This has more than doubled
since we established the programme in FY 11/12.
During the year, we expanded our range of energy-saving
products and services to help customers save money by
improving their homes’ energy efficiency. This included
launching new energy-saving diagnostic solutions in the UK
and France, which help customers create personalised home
energy efficiency action plans and access relevant products
and services.
Multiple profitable growth opportunities
Kingfisher is well positioned to navigate the year ahead and
deliver medium-term profitable growth, while driving strong
cash generation. Our banners are diverse, representing the
full spectrum of the home improvement market with distinct
offers for both DIY and trade customers. We continue to invest
for growth and our refreshed strategy provides us with a clear
plan to maximise the many opportunities we see ahead of us.
We see significant potential to grow by building on our different
banner propositions in new and existing markets. Screwfix France
is well positioned to take a share of the trade professional market
in France, which has an estimated total market size of over
€29 billion, with up to 25 new stores planned for FY 23/24.
We are building on our leadership position in Poland, targeting
80 medium-box and compact store openings over the next
five years.
We have plans to continue to build our e-commerce offer through
greater speed and choice, including further expansion of our
marketplace model by growing product ranges and preparing
to roll out marketplaces in France and Poland. Leveraging the
power of data is another big opportunity, to build customer-
centric tools and solutions, support better commercial decision-
making, and unlock significant new sources of revenue for the
Group. For example, we are exploring opportunities to quickly
monetise our data capabilities through retail media (advertising
placed within our e-commerce platforms and apps).
Across the Group, we are also strengthening our proposition for
trade customers, building on the success of B&Q’s TradePoint
and the accelerated expansion of Screwfix. This includes
exploring dedicated trade counters in France, Poland & Iberia,
and developing trade-focused ranges, services and loyalty
programmes. Over time, we expect increased trade customer
penetration to contribute to higher sales and profit growth.
3Kingfisher 2022/23 Annual Report and Accounts
Chief Executive Officer’s statement continued
We expect many of the supportive industry trends we have seen
emerge in the last few years to endure, as the home continues
to be a key priority for consumers. How we live and work has
fundamentally changed since the pandemic, with working from
home here to stay, while rising energy costs have underscored
the importance of improving the efficiency of our homes.
In terms of current trading, February 23/24 like-for-like sales
were up 0.5% with underlying sales trends remaining resilient.
With consumers continuing to be impacted by cost of living
pressures, we are as committed as ever to delivering on value.
We are maintaining strong price indices in our key markets,
offering affordable products through our OEB ranges and
we have our hard discounter banner, Brico Dépôt, in France,
Spain and Portugal.
We have set clear medium-term financial priorities, focusing
on delivering sales growth ahead of our markets, growing
adjusted pre-tax profit faster than sales, and strong cash
generation to drive growth investment and shareholder returns.
Looking ahead, we are comfortable with current consensus of
sell-side analyst estimates for FY 23/24 adjusted pre-tax profit,
with expectation of more than £500 million free cash flow for
the year. We are well positioned to navigate the coming year,
targeting further market share growth, and active and
responsive management of our operating costs.
This has been a year of significant progress for the Group.
Kingfisher is a business with multiple profitable growth
opportunities which we are pursuing at pace. Once again,
I’d like to thank all of our 82,000 colleagues for their hard work,
which has been critical to us delivering a resilient performance
this year.
Thierry Garnier
Chief Executive Officer
20 March 2023
To hear more about our results from
Thierry Garnier please use the link
www.kingfisher.com/fullyearvideo
4
Strategic Report Governance Financial Statements
Kingfisher 2022/23 Annual Report and Accounts
Our markets
The home improvement market for consumer and trade sales
in our key geographies is worth approximately £150 billion.
Growth in customer expenditure on hardware and DIY goods
over the past decade has outperformed total customer
expenditure and has also proved to be robust during periods
of economic weakness.
In Europe, this market is significant and caters for a variety
of customer needs from maintenance to repair or decoration
tasks and heavy renovation projects. These needs are met by
a wide range of private label and branded product categories
and corresponding installation, design, and consumer finance
services. Larger format home improvement stores and trade
channels are among the key distribution channels. However,
generalist and specialist online ‘pure-players’, online marketplaces,
home improvement specialist stores and discounters also play
a role.
Structural drivers are expected to remain supportive of
growth in our industry in the medium term despite softening of
demand due to the cost of living crisis. Although we’ve recently
seen a slowdown in housing constructions and transactions
within the current uncertain environment, the housing market is
still dynamic, with moving or buying a first house still high on
consumers’ agenda. Further, increased renovation is anticipated
in response to the growing heavy maintenance and
improvement burden associated with ageing housing stock in
our markets. We also expect to see increased demand for
energy efficiency in homes as governments intensify efforts
around net zero; in the UK and France where 60% to 75% of
housing stock is deemed energy inefficient.
Customers are increasingly passionate about improving their
homes and we have seen new positive longer-term trends for
the industry being established. Customers across our markets
are spending more time living and working at home. They are
placing a greater emphasis on improving the practicality and
comfort of their surroundings and in turn are spending more in
the home improvement market. We expect further demand for
home improvement longer term to address the resulting ‘wear
and tear’ on the home through increased use and the need to
organise living space differently.
During the pandemic we have also seen the emergence
of a younger generation of ‘DIYers’ with interest, skills, and
enthusiasm. This allows us to capture a diverse range of
customers. The more home improvement projects people
undertake, the more DIY skills they learn – building confidence
and ultimately increasing their interest and appetite for
the activity.
While the overall home improvement market is growing,
other clear longer-term shifts in customer behaviours and
trends provide us with further opportunities. Our ‘Powered
by Kingfisher’ strategy is closely aligned with these trends
and allows the business to respond appropriately.
Over the last two years, the trend towards online has rapidly
accelerated and all our key banners have experienced significant
e-commerce growth. Pre-pandemic, Screwfix had been the
exception amongst our banners with 33% e-commerce sales
penetration. However, with our stores at the centre of our
e-commerce proposition, online sales now make up 16.3%
of Group sales. Stores provide support for the significant
proportion of online orders fulfilled through Click & Collect,
in-person returns, and faster home delivery. In addition,
retailers with omnichannel strategies such as Kingfisher
provide customers with the option to visualise and design
projects, seek advice, and choose from a wider range of
fulfilment options.
Increased customer demand for speed and convenience is
driving the need for a wider network of smaller and more easily
accessible stores, and so we believe compact stores unlock
the opportunity for rapid expansion into smaller cities and
geographic ‘white spaces’.
We continue to respond to this trend through testing and rollout of
compact store formats as set out on pages 7 to 9.
In more mature European markets, a rising focus on value for
money and pricing transparency has seen discounter format
stores grow and expand their home improvement ranges. With
our renowned Brico Dépôt discounter banners in France and
Iberia, as well as our competitive own exclusive brand (OEB)
products and overall Group-wide focus on attractive price
positioning, we are well placed to respond in this area.
Kingfisher has balanced exposure to the DIY and Do-it-For-Me
(DIFM)/trade trends with an approximately equal revenue split
and healthy growth across both segments. Alongside the
well-documented increase in DIY during the pandemic, which is
increasingly seen as a hobby and an activity that contributes to
wellbeing, the DIFM trade category has also continued to grow.
This has been supported by the development of service platforms
connecting offer and demand in an easier way. Kingfisher acquired
NeedHelp, one of Europe’s leading home improvement online
services marketplaces, in November 2020.
Finally, being a responsible business is more relevant and
important than ever before. As the ‘green homes’ agenda
accelerates, we see considerable potential for our Sustainable
Home Products, in particular in the UK and France where the
governments have made net zero commitments. The ongoing
energy crisis adds weight to the urgent need for governments
to increase their support of greener homes and energy efficiency.
This provides us with opportunities to build on our strong
sustainability credentials.
Our approach to responsible business is discussed from page 23.
5Kingfisher 2022/23 Annual Report and Accounts
Our retail banners occupy number one or two positions
in all our key markets. These banners address a diverse
range of customer needs, each operating different
models tailored to these needs, with clear positionings
and plans. Our goal is to grow by building on our different
formats in existing and new markets, leveraging the
power of Kingfisher.
We plan to accelerate our e-commerce sales with
the ambition of reaching 25% e-commerce sales
penetration. We will do this by building on our progress
over the last three years to further enhance speed,
choice and convenience for our customers, supported
by our e-commerce marketplace and data-led
propositions. Furthermore, as we facilitate the
development of more customer-centric digital
tools and services, this will drive the growth of
our digitally-enabled sales.
We are increasingly embedding data within Kingfisher.
Our banners are leveraging data to build customer-centric
tools and solutions, support better commercial
decision-making, and unlock significant new
sources of revenue and profit for the Group.
We believe that our OEB product development is a
significant source of value for our retail banners and their
customers. OEB provide us with the ability to differentiate
ourselves from the rest of the market by delivering
simple, innovative and sustainable solutions at affordable
prices. OEB also carry a higher gross margin (on average)
than branded products. We aim to grow our OEB sales
further as we bring even more innovative and affordable
solutions to our customers.
In June 2020, we announced our strategic plan – ‘Powered by Kingfisher’. This plan aims to maximise the benefits of combining
our distinct retail banners, which serve a range of different customer needs, with the scale, strength and expertise of the
Kingfisher Group. The business has executed strongly against its core strategic priorities in order to power its retail banners,
leading to stronger propositions for our customers and market share growth. Reflecting the fast-moving world in which we live,
we have adapted our strategic focus areas to ensure data, trade, culture and agility are given increased prominence and focus,
and to better align to our investments for growth in multiple areas of the business.
1 2
3
4
Grow by building on our
different banners
Accelerate e-commerce through
speed and choice
Build a data-led
customer experience
Differentiate and win through
own exclusive brands (OEB)
Our strategy
6
Strategic Report Governance Financial Statements
Kingfisher 2022/23 Annual Report and Accounts
5 6
7 8
Develop
trade business
Trade customers are an integral part of the home
improvement ecosystem and a key priority for
Kingfisher. Trade customers tend to visit more frequently
and spend more than the average retail customer. The
significant opportunities to engage further with trade
customers include the further roll-out of trade counters,
international expansion, digital enhancements, range
expansion, loyalty programme optimisation, improved
merchandising, more partnerships and new services.
Stores play a critical role in the home improvement market.
They serve as a ‘one-stop shop’ for projects, enabling
customers to be inspired, to visualise and ‘try before they
buy’, and receive customised advice and services from
in-store experts. Over the last three years they have also
played an integral role in meeting elevated demand via
e-commerce channels, whether through fast Click & Collect
or delivery to where the customer wants it. We believe
that compact stores will play an increasingly crucial role
in addressing the consumer need for both speed and
convenience. Through compact store expansion, our
ambition is to grow market share, optimise our overall store
footprint, and to grow sales densities and store profitability.
We are committed to leading our industry in responsible
business practices. Building on our strong Environmental,
Social, and Governance (ESG) credentials, our ‘Powered
by Kingfisher’ strategy sets out four priority areas for
Responsible Business where we can maximise our
positive impact on the lives of our customers, colleagues,
communities and the planet. As the green homes agenda
accelerates, we see considerable potential for our
Sustainable Home Products, in particular in the UK and
France where the governments have made net zero
commitments. The ongoing energy crisis adds weight
to the urgent need for governments to increase their
support of greener homes and energy efficiency.
To deliver the best possible service to our customers
and ensure our colleagues are engaged, fulfilled and able
to realise their full potential, we are building a culture
based on trust, agility, inclusion and curiosity. We are
adopting a ‘done is better than perfect’ mindset in order
to move faster and with more agility, given the rapidly
changing environment in which we do business. We also
realise the need to be leaner and more productive, and
are making changes to lower our costs and same-store
inventories. And through the use of our scale, we expect
to extract further value from sourcing and buying.
Roll out
compact store formats
Lead the industry in Responsible Business
practices and energy efficiency
Human, agile
and lean
7Kingfisher 2022/23 Annual Report and Accounts
Strategic priorities Progress Proof points for FY 22/23 Forward focus
Grow by building on our
different banners
— First Screwfix stores opened in France following successful launch as a pure-play
online retailer.
— Continued expansion of Castorama in Poland.
— Opened first two B&Q franchise stores in the Middle East.
82
Screwfix stores opened in the
UK and Ireland
18
new TradePoint counters in the UK
5
Screwfix stores now open in France
— Leverage expansion opportunities in our current markets and where
attractive in new geographies.
— Ongoing roll-out of Screwfix; in FY 23/24, up to 60 new stores planned
in the UK and Ireland and up to 25 new stores planned for France.
— Longer term, explore new markets, franchise and wholesale models.
Accelerate e-commerce
through speed and choice
— Expanded store-based picking model.
— More options for Click & Collect (C&C) through the roll out of lockers in Poland, which
are also being tested at B&Q.
— New last-mile delivery options including Screwfix Sprint available to c. 45% of the UK.
— New e-commerce marketplace model successfully launched at B&Q and in Spain
and Portugal.
91%
orders picked from stores
24%
B&Q marketplace participation in
February 2023
24%
digitally enabled sales
+20ppt
online NPS vs FY 19/20
— Leverage our stores to offer customers even faster speed.
— Further rapid expansion of the number of SKUs on marketplace
planned, preparing for the roll-out of marketplaces in Poland
and France.
— Ambition of reaching 25% e-commerce sales penetration.
Build a data-led
customer experience
— Established data Centre of Excellence with expertise in artificial intelligence (AI),
machine learning, advanced analytics and data platform engineering.
— New Group-developed recommendation engine implemented at B&Q and Screwfix,
driving higher click-through and add-to-basket rates as well as faster response times.
— Entered strategic partnerships, including with Google Cloud.
20m
new identifiable customers acquired
since 2019/20
c. 1bn
customer visits across our
e-commerce touchpoints annually
— Leverage data for margin realisation; better pricing decisions,
better promotional and markdown effectiveness.
— Supply chain visibility in real time to optimise fulfilment and availability,
providing suppliers real time stock visibility, demand-led stock
optimisation and replenishment.
— Developing opportunities to quickly monetise our data capabilities
through retail media, including advertising placed within our
e-commerce platforms and apps.
Differentiate and win through
own exclusive brands (OEB)
— OEB continuing to drive affordability, product innovation and sustainability, and is
carrying a higher gross margin % on average than branded products.
— Completed roll-out of 32 new and redeveloped OEB brands to drive differentiation
between retail banners and extended ranges.
— Good performance in kitchen, bathroom & storage and EPHC (electricals, plumbing,
heating & cooling) categories, all showing year-on-year growth.
45%
Group sales
56%
of OEB sales from Sustainable
Home Products
20%
of Group sales from five leading
OEB brands
— Continue to develop innovative OEB ranges through a customer
project lens.
— Further embedding sustainability credentials at the core of
OEB proposition.
— Establish OEB as the most affordable solution for customers.
Develop trade business
— Accelerated Screwfix openings in the UK & Ireland, and strong progress in developing
the proposition in France.
— TradePoint (in B&Q) 3-year LFL sales growth of +31.5%, outperforming core B&Q and
reaching 22% sales penetration.
— Launched plan to grow trade customer penetration across all other banners, including
new trade loyalty programmes in Poland and Iberia, and the introduction of new
trade-focused services and OEB and branded product ranges.
18
new TradePoint counters opened
in the UK
+31.5%
TradePoint 3-year LFL sales growth
— Grow share of wallet by deepening relationships, leveraging loyalty
schemes, and developing pro-focused ranges.
— Extend reach through small formats with TradePoint in more of the
B&Q estate.
— Grow digital, including launching TradePoint app.
— Expand trade sales across our general DIY and discount formats.
Roll out compact store formats
— High street concept tests (B&Q Local in the UK, Casto in France and Castorama
Express in Poland) continue to deliver encouraging learnings and results.
— Small retail park concepts are also showing positive results.
— Entering final testing phase for Screwfix ultra-compact ‘XSR’ store format.
17
new compact stores opened in the
UK, France and Poland
12
high street concept stores now open
in the UK, France and Poland
— Continue to learn from tests with the aim of creating
scalable blueprints.
— Focus on urban, in-fill and ‘white space’ locations.
— New Brico Dépôt compact store to launch this year.
Lead the industry in Responsible
Business practices and
energy efficiency
— Brought forward pay awards and introduced support for colleagues to help manage
higher costs of living.
— Announced new net zero emissions target for our operations (scope 1 and 2) by the
end of 2040.
— Developed innovative end-to-end solutions at B&Q, Castorama France and Brico
Dépôt France to help customers create personalised energy efficiency action plans
for their homes, including access to relevant products and services.
47%
of Group sales from Sustainable
Home Products
2.1
million people helped through
charitable partnerships and banner
Foundations since FY 16/17
6.6
million hours of ‘skills for life’ learning
completed by colleagues since
FY 19/20
52.7%
reduction in carbon footprint for our
own operations against FY 16/17
base year
— Continue to progress against our four key pillars: colleagues,
customers, communities and planet.
— Realise growth share of sales from sustainable products
(including energy efficient products and solutions).
— Improve communication to customers and colleagues.
Human, agile and lean
— Embedding a ‘test and learn’ culture across the Group, alongside key leadership
behaviours to support delivery of our strategy.
— Strengthened talent and capability in key areas, including technology, data and trade.
— Multi-year cost reduction programmes continue to help offset inflationary pressures.
4
store rightsizings completed at B&Q
54
eNPS score, significantly ahead of
global retail benchmark
— Continue to embed our ‘test & learn’ mindset.
— Prioritise agile and efficient technology.
— Continuing to challenge costs and inventory.
Performance against priorities
8
Strategic Report Governance Financial Statements
Kingfisher 2022/23 Annual Report and Accounts
Strategic priorities Progress Proof points for FY 22/23 Forward focus
Grow by building on our
different banners
— First Screwfix stores opened in France following successful launch as a pure-play
online retailer.
— Continued expansion of Castorama in Poland.
— Opened first two B&Q franchise stores in the Middle East.
82
Screwfix stores opened in the
UK and Ireland
18
new TradePoint counters in the UK
5
Screwfix stores now open in France
— Leverage expansion opportunities in our current markets and where
attractive in new geographies.
— Ongoing roll-out of Screwfix; in FY 23/24, up to 60 new stores planned
in the UK and Ireland and up to 25 new stores planned for France.
— Longer term, explore new markets, franchise and wholesale models.
Accelerate e-commerce
through speed and choice
— Expanded store-based picking model.
— More options for Click & Collect (C&C) through the roll out of lockers in Poland, which
are also being tested at B&Q.
— New last-mile delivery options including Screwfix Sprint available to c. 45% of the UK.
— New e-commerce marketplace model successfully launched at B&Q and in Spain
and Portugal.
91%
orders picked from stores
24%
B&Q marketplace participation in
February 2023
24%
digitally enabled sales
+20ppt
online NPS vs FY 19/20
— Leverage our stores to offer customers even faster speed.
— Further rapid expansion of the number of SKUs on marketplace
planned, preparing for the roll-out of marketplaces in Poland
and France.
— Ambition of reaching 25% e-commerce sales penetration.
Build a data-led
customer experience
— Established data Centre of Excellence with expertise in artificial intelligence (AI),
machine learning, advanced analytics and data platform engineering.
— New Group-developed recommendation engine implemented at B&Q and Screwfix,
driving higher click-through and add-to-basket rates as well as faster response times.
— Entered strategic partnerships, including with Google Cloud.
20m
new identifiable customers acquired
since 2019/20
c. 1bn
customer visits across our
e-commerce touchpoints annually
— Leverage data for margin realisation; better pricing decisions,
better promotional and markdown effectiveness.
— Supply chain visibility in real time to optimise fulfilment and availability,
providing suppliers real time stock visibility, demand-led stock
optimisation and replenishment.
— Developing opportunities to quickly monetise our data capabilities
through retail media, including advertising placed within our
e-commerce platforms and apps.
Differentiate and win through
own exclusive brands (OEB)
— OEB continuing to drive affordability, product innovation and sustainability, and is
carrying a higher gross margin % on average than branded products.
— Completed roll-out of 32 new and redeveloped OEB brands to drive differentiation
between retail banners and extended ranges.
— Good performance in kitchen, bathroom & storage and EPHC (electricals, plumbing,
heating & cooling) categories, all showing year-on-year growth.
45%
Group sales
56%
of OEB sales from Sustainable
Home Products
20%
of Group sales from five leading
OEB brands
— Continue to develop innovative OEB ranges through a customer
project lens.
— Further embedding sustainability credentials at the core of
OEB proposition.
— Establish OEB as the most affordable solution for customers.
Develop trade business
— Accelerated Screwfix openings in the UK & Ireland, and strong progress in developing
the proposition in France.
— TradePoint (in B&Q) 3-year LFL sales growth of +31.5%, outperforming core B&Q and
reaching 22% sales penetration.
— Launched plan to grow trade customer penetration across all other banners, including
new trade loyalty programmes in Poland and Iberia, and the introduction of new
trade-focused services and OEB and branded product ranges.
18
new TradePoint counters opened
in the UK
+31.5%
TradePoint 3-year LFL sales growth
— Grow share of wallet by deepening relationships, leveraging loyalty
schemes, and developing pro-focused ranges.
— Extend reach through small formats with TradePoint in more of the
B&Q estate.
— Grow digital, including launching TradePoint app.
— Expand trade sales across our general DIY and discount formats.
Roll out compact store formats
— High street concept tests (B&Q Local in the UK, Casto in France and Castorama
Express in Poland) continue to deliver encouraging learnings and results.
— Small retail park concepts are also showing positive results.
— Entering final testing phase for Screwfix ultra-compact ‘XSR’ store format.
17
new compact stores opened in the
UK, France and Poland
12
high street concept stores now open
in the UK, France and Poland
— Continue to learn from tests with the aim of creating
scalable blueprints.
— Focus on urban, in-fill and ‘white space’ locations.
— New Brico Dépôt compact store to launch this year.
Lead the industry in Responsible
Business practices and
energy efficiency
— Brought forward pay awards and introduced support for colleagues to help manage
higher costs of living.
— Announced new net zero emissions target for our operations (scope 1 and 2) by the
end of 2040.
— Developed innovative end-to-end solutions at B&Q, Castorama France and Brico
Dépôt France to help customers create personalised energy efficiency action plans
for their homes, including access to relevant products and services.
47%
of Group sales from Sustainable
Home Products
2.1
million people helped through
charitable partnerships and banner
Foundations since FY 16/17
6.6
million hours of ‘skills for life’ learning
completed by colleagues since
FY 19/20
52.7%
reduction in carbon footprint for our
own operations against FY 16/17
base year
— Continue to progress against our four key pillars: colleagues,
customers, communities and planet.
— Realise growth share of sales from sustainable products
(including energy efficient products and solutions).
— Improve communication to customers and colleagues.
Human, agile and lean
— Embedding a ‘test and learn’ culture across the Group, alongside key leadership
behaviours to support delivery of our strategy.
— Strengthened talent and capability in key areas, including technology, data and trade.
— Multi-year cost reduction programmes continue to help offset inflationary pressures.
4
store rightsizings completed at B&Q
54
eNPS score, significantly ahead of
global retail benchmark
— Continue to embed our ‘test & learn’ mindset.
— Prioritise agile and efficient technology.
— Continuing to challenge costs and inventory.
9Kingfisher 2022/23 Annual Report and Accounts
Key Performance Indicators
Sales down 0.7% in constant currency, reflecting
strong prior year comparatives linked to high demand
for home improvement products. Resilient sales
across both retail and trade channels.
Adjusted pre-tax profit down 20.2% to £758 million
(FY 21/22: £949 million; FY 19/20: £544 million),
reflecting lower retail profit, partially offset by
lower finance costs.
Free cash flow of £(40) million, down £425 million
(FY 21/22: £385 million; FY 19/20: £191 million),
reflecting lower EBITDA and one-off working
capital outflow from completion of inventory
rebuild programme.
Retail profit down 19.2% in constant currency
to £923 million (FY 21/22: £1,148 million; FY 19/20:
£786 million), largely reflecting very strong prior
year comparatives in the UK & Ireland and France.
Like-for-like (LFL) sales down 2.1% and corresponding
3-year LFL up 15.6%. Double-digit 3-year LFL sales
growth across all banners. Positive one-year
growth in Poland, Iberia and Romania; resilient
performance in France and strong prior year
comparatives for the UK & Ireland.
Financial performance indicators
Adjusted pre-tax profit*
Free cash flow*
Like-for-like sales*
Total sales Retail profit*
We use a range of financial and non-financial Key Performance Indicators (KPIs) to track and evaluate delivery of our ‘Powered by
Kingfisher’ strategy.
* Denotes an Alternative Performance Measure (APM). APMs are defined in the Glossary on pages 184 to 187.
2020/21
2021/22
2022/23
£1,003m
£1,148m
£923m
2020/21
2021/22
2022/23
£12,343m
£13,183m
£13,059m
2020/21
2021/22
2022/23
£786m
£949m
£758m
2020/21
2021/22
2022/23
£938m
£385m
£(40)m
2020/21
2021/22
2022/23
(2.1)%
7.1%
9.9%
10
Strategic Report Governance Financial Statements
Kingfisher 2022/23 Annual Report and Accounts
Non-financial performance indicators
46.8% of total Group sales came from Sustainable
Home Products (SHP) that help create greener,
healthier homes. This represents an increase on the
previous year, and we are on track to achieve our target
of 60% Group sales tobefrom our SHP by FY 25/26.
The share of SHP sales for our own exclusive brand
(OEB) was 56.4%, also an increase on FY 21/22. The
OEB SHP participation missed target by 0.6% points.
Inclusion and diversity
Operational carbon emissions
Responsibly sourced wood and paper
Community: people we helped
25.8% of senior leaders and 38.9% of managers
are women, compared with 25.2% and 37.9%
respectively last year.* We remain focused
on improving our gender balance.
We continue to make progress against our
science-based targets and have reduced
operational emissions (scope 1 and 2, 1.5°C
scenario) by 52.7% since FY 16/17, exceeding
our target of 38% by FY 25/26.
We have further increased the share of our
responsibly sourced wood and paper to 94.5%
of total SKUs sold. We are on track toachieve our
target of 100% by FY 25/26.
0.5 million people benefited from our community
donations. This brings our total to 2.1 million
people helped through our projects since FY 16/17,
achieving our target of 2 million three years earlier.
Sustainable Home Products: % of retail sales
* We previously reported two sets of management data, one in our Directors’ remuneration report and the other in the People and Responsible
Business sections. This year, we have aligned this data and are now reporting progress against the target set out in the Directors’ remuneration
report (to increase women in management to 40% by FY 25/26) which can be found on page 96. The management population reflects all junior and
middle management and excludes senior leadership. FY 21/22 data reported here has been rebased to show progress against our target.
2020/21
2021/22
2022/23
36.1%23.2%
37.9%25.2%
Senior leadership, % of women
Management, % of women
38.9%25.8%
2020/21
2021/22
2022/23
27.5%
24.5%
52.7%
2020/21
2021/22
2022/23
42.2%
44.1%
46.8%
0.4m 0.8m
0.8m 1.6m
Number of people who benefitted from our
community contributions during the year
Number of people who directly benefited from our
community contributions since 2016 (cumulative number)
0.5m 2.1m
2020/21
2021/22
2022/23
81.2%
87.2%
94.5%
2020/21
2021/22
2022/23
11Kingfisher 2022/23 Annual Report and Accounts
Our people and culture
82,000 engaged colleagues with the right skills
to serve customers.
Our financial strength and scale
Over £13 billion of sales in eight countries;
collective buying scale.
Our diverse and trusted retail banners
Distinct retail banners which address diverse
customer needs, with different models, strong
customer relationships and a clear positioning
and plan.
Our market-leading positions
Our retail banners occupy number one or
number two positions in all our key markets.
Our channels
Network of over 1,900 stores, strong
e-commerce capabilities, as well as
franchise and joint venture partners.
Our own exclusive brands
Our own exclusive brands (OEB) allow our
banners to offer differentiated products in
terms of design, functionality, sustainability
and value for money.
Our supplier relationships
Close collaboration with our suppliers to bring
the best home improvement products to our
customers at great prices, while ensuring they
meet our ethical standards.
Our industry-leading Responsible
Business practices
Longstanding commitment to make a positive
impact for communities, colleagues,
customers and the planet.
Our key resources
Business
model
We offer own and vendor branded home
improvement products and services to
consumers and trade professionals across
our over 1,900 stores, via our e-commerce
channels and through our franchise and joint
venture partners.
By delivering our strategy and operating
as a responsible business, we create
sustainable value for our customers,
colleagues, shareholders, suppliers
and wider society.
12 Kingfisher 2022/23 Annual Report and Accounts
Strategic Report Governance Financial Statements
Customers
Making better homes
accessible for everyone;
helping tradespeople to
get their jobs done quickly
and affordably.
Colleagues
Inclusive, rewarding work and
careers, developing skills.
Communities
and society
Operating as a responsible
business, with strong
community involvement.
Environment
Protecting and restoring
natural resources, tackling
climate change.
Shareholders
Growing the value of the
company sustainably.
Suppliers
Sharing value in our
supply chain.
Partners
Growing our business
together with joint
venture, franchise and
marketplace partners.
Our leading retail banners serve different customer needs
within their markets. They offer product ranges and services
that meet these distinct needs through their own commercial
approach and business model. As trusted brands, they connect
with customers and drive loyalty. They are powered by the
scale, strength and expertise of the Kingfisher group.
Benefits brought by the Group include sourcing and buying,
differentiated OEB, technology and partnerships capability,
shared services and Centres of Excellence. The Group is
underpinned by a common culture and values, including a
shared commitment to responsible business practices.
How do we create value? Who we create value for
* E-commerce, digital journey, data, store concepts, services and service
platforms, supply chain, trade and property.
Differentiated
OEB
Sourcing
& buying
Shared
services
Culture
& values
Centres of
Excellence*
France
Iberia
Romania
France
Technology &
partnerships
Franchise &
partnerships
Poland
Powered by
Sourcing and buying, delivering lower cost prices across all
products (OEB and brands).
Technology and partnerships, providing all our banners with
access to the best technologies and complementary partnerships.
Shared services and lower-cost functions.
Centres of Excellence, to set strategy and targets, to share
knowledge and best practices, to support implementation,
and to help steer progress.
Culture and values, providing a framework for our core
behaviours, values, and industry-leading responsible
business practices.
Differentiated OEB, which are innovative and provide a key
source of difference.
13Kingfisher 2022/23 Annual Report and Accounts
2. Capabilities to fuel growth
In FY 22/23, we further supported colleagues in developing their
skills and fulfil their potential through more than 2.6 million hours
of learning across our banners and Group functions, surpassing
our skills for life target of five million learning hours by 2025.
We have also continued to invest in talent and capability in key
growth areas. As part of our focus on creating new customer
propositions, we have recruited deep functional expertise in
areas including technology, e-commerce, our own exclusive
brands (OEB), data and in growing our trade customer proposition.
In our Technology function, we have strengthened our in-house
capability in areas including software engineering, data, cloud
computing and product.
To help us attract and retain colleagues in increasingly
competitive markets, we have further strengthened our banner
employer brands, with Brico Dépôt Romania certified as a ’top
employer’ by the Top Employers’ Institute, and Screwfix winning
the ’Employer Brand – National’ award at the RAD employer
brand awards in the UK.
We have continued to support youth employment, social
mobility and learning for life, and in FY 22/23, there were more
than 4,600 apprentices across Kingfisher. For example, Screwfix
has over 700 apprentices enrolled in its in-house designed and
externally accredited Level 2, 3 and 4 apprenticeships, with 81%
of apprentices promoted into Assistant Manager and Branch
Manager roles.
Our strong investment in learning is demonstrated by our
colleague satisfaction score of 8.3 out of 10 for the question:
‘Kingfisher enables me to learn and develop new skills’.
3. An agile, inclusive culture led by trust
Strong colleague engagement and an inclusive culture are
essential to creating the environment for our teams to deliver
for our customers. This year, we have focused on increasing
agility, listening to our people and further implementing our
Inclusion and Diversity (I&D) strategy.
We have tracked our progress on colleague engagement against
the key metrics of our culture through both formal and informal
mechanisms, including our formal listening tool through Workday
Peakon, the Kingfisher Colleague Forum and works councils,
our 16 affinity networks, our social channels and regular town
hall meetings.
Overall, our colleague engagement levels have continued to
be strong across the Group. In the all-colleague engagement
survey held in FY 22/23, we heard from 83% of our colleagues
(up 4% compared with FY 21/22), with colleagues sharing 317,000
comments (up 10% on last year). Our Employee Net Promoter
Score (eNPS) of 54 is significantly ahead of the global retail
benchmark (+16 points above the median), placing us in the top
5% of retailers. Our attrition levels and the time it takes to hire
new colleagues are either in line with, or ahead of, industry norms.
For both the agility and trust metrics of our listening tool, our
colleague satisfaction score is 8.5 (up from 8.2 in FY 21/22 for
both measures).
Our 82,000 colleagues are key to our success. We strive to be an
inclusive employer, where every individual can fulfil their potential,
be themselves and is given the opportunity to share their ideas.
During the year, we monitored the rising cost of living across
our markets and have taken action to support colleagues in our
stores and head offices. On colleague pay, for example, salary
increases or one-off payments were awarded in the UK, France,
Poland, Spain and Portugal, which focused largely on store
colleagues. Additional support to help colleagues with the cost
of living have included:
— Establishing a Colleague Support Fund in the UK in
partnership with the Retail Trust to support colleagues
experiencing financial difficulties.
— A partnership between Screwfix and the Hapi app,
which provides colleagues with financial wellbeing advice.
— Colleague discounts on energy-saving products in Romania,
Spain, Portugal and the UK to help reduce household bills.
Our People and Culture Plan, which launched in 2020, is a key
enabler of our ‘Powered by Kingfisher’ strategy. Progress made
in FY 22/23 includes:
— Further embedding our Group banner operating model,
including new Centres of Excellence to support the
launch of our marketplaces and improving our
pro-customer proposition.
— Building in-house capabilities in key growth areas for
the business.
— Increasing colleague engagement and delivering
inclusion initiatives.
— Executing the first year of our Leadership Development Plan.
Delivering our People and Culture Plan to empower
our people
1. Efficient operating model
In FY 22/23, we further embedded the Group banner operating
model to ensure that our banner teams, who are closest to our
customers, can make decisions in an agile way and continue to
benefit from Group scale in areas including Offer & Sourcing
and Technology.
We also completed the implementation of our technology
operating model through the creation of banner technology
teams, streamlined governance and establishing a new digital
product team.
We have also adjusted the organisation of our head offices
to realise further cost savings. The banners have also been
exploring and implementing new retail operating models,
including a low-cost operating model at Brico Dépôt France.
At Group, we have further improved the operation of the
Centres of Excellence established in FY 21/22 in the areas
of supply chain, store concepts, data, pro-customers and
marketplace. They have been critical to our progress,
for example, launching marketplace in B&Q and Brico
Dépôt in Spain and Portugal, and in strengthening our
trade customer proposition.
People and culture
14
Strategic Report Governance Financial Statements
Kingfisher 2022/23 Annual Report and Accounts
Further progress has also been made in FY 22/23 to build an
inclusive culture, ensuring that colleagues of all backgrounds
feel valued at Kingfisher and feel they can truly be themselves
at work.
For example, we established a new I&D Forum chaired by
the Screwfix CEO, which brings together senior leaders and
representatives from our affinity networks from across the
Group to share best practices. In the UK, a colleague data
collection campaign was also launched across B&Q, Screwfix
and Kingfisher, which will help us analyse the inclusiveness of
our HR policies and systems and identify where further action
may be required to create a more inclusive culture.
In FY 22/23 we have begun tracking colleagues’ perception of
inclusion at Kingfisher, and have achieved a score of 8.2 out
of 10 in response to the question: ‘I feel valued as a person’.
We are working to increase diverse representation across our
leadership team, and are on track to meet our goal of 40% of
women in management roles by 2025. We remain focused on
achieving our target of 35% of women in senior leadership roles.
4. Diverse and inspiring leaders
Our leaders have a huge role to play in the delivery of our
strategy and our plans for growth.
In FY 22/23, we launched a new Leadership Development Plan
to grow our current and future leaders through events that build
connections across teams and stimulate curiosity, in addition to
executive coaching and leadership evaluation tools. Focus areas
for FY 22/23 include digital trends and inclusive leadership.
Equal opportunities
Kingfisher is committed to creating a workplace where everyone
is treated with fairness, respect and dignity, irrespective of age,
educational and professional background, diverse abilities,
gender, gender re-assignment, marital status, race, ethnicity,
religion and beliefs, and sexual orientation.
It is our policy that all colleagues are treated fairly. No colleague
is to be treated less favourably or experience discrimination
(unlawful or otherwise) on any grounds. Our policy applies to
every part of employment, including recruitment and selection
processes, opportunities for training, development and
promotion, and terms and conditions of employment. Entry
into and progression within the company is based solely
on personal ability and competence to meet set job criteria.
Our employment policies, practices and procedures promote
accessibility for disabled people, providing reasonable
adjustment where appropriate. Kingfisher continues to be
a proud partner of a number of recognised forums across
its geographies that champion diversity in all its forms.
In line with the Lloyd’s High Court judgement on Guaranteed
Minimum Pension equalisation, the Kingfisher Pension Scheme
has begun implementing a project to equalise the pensions of
affected members.
Further information about our people can be found in the Risk section
from page 51.
1. 2021/22 gender breakdown of colleagues and directors:
– The Board: 4 female (50%). 4 male (50%).
– Senior leadership: 76 female (25.2%). 225 male (74.8%).
– Total workforce: 35,227 female (43.1%). 46,483 male (56.9%).
– General Executive and their direct reports: 28 female (31.1%). 62 male (68.9%).
2. As disclosed on page 24, we have set a target to increase women in senior leadership to 35% by 2025. Senior leadership under this target is defined as those
who are eligible for our Performance Share Plan.
3. Turkey joint venture not included.
Board, senior management and employee diversity
At 31 January 2023, the gender breakdown of colleagues and directors were as follows:
The Board
1
Senior leadership
1, 2, 3
Total workforce
1, 3
General Executive and
their direct reports
1
Female: 4
Male: 5
Female: 78
Male: 224
Female: 33,482
Male: 44,219
Female: 29
Male: 58
44.4%
55.6%
25.8%
74.2%
43.1%
56.9%
33.3%
66.7%
15Kingfisher 2022/23 Annual Report and Accounts
Pages 17 to 22 set out further consideration of each of our key
stakeholders and examples of how they have been engaged
during the year.
Page 67 sets out the Board’s key activities during the year and
the section 172 matters considered in pursuing these activities.
Section 172(1) Statement
Considering our impact on our stakeholders is something the
Board and the company spends time on wherever appropriate.
The Board fully recognises the importance of all our stakeholders in
the successful operation of the business. Remaining mindful of our
Companies Act 2006 (the ‘Act’) section 172 (1) responsibilities and
the needs and concerns of our stakeholders is an intrinsic part of
our decision-making processes.
Ahead of matters being put to the Board for consideration, the
business often carries out significant engagement to support
the directors to assess and ensure that all stakeholder views are
considered fairly. This engagement may be formal or informal
and is often governed by policies, control frameworks,
regulation, and legislation.
Before reaching a decision, the Board considers how proposed
actions and behaviours of the company may affect its key
stakeholders and the environment, as well as the company’s
reputation and long-term success. Kingfisher’s actions and
behaviours are governed by a robust governance framework,
including Group policies and the Kingfisher Code of Conduct.
We have set out some examples below of how the directors
have had regard to the matters in section 172(1)(a)–(f) when
discharging their section 172 duties and the effect on certain
decisions taken by them in 2022/23.
Stakeholder engagement
and decision-making
Shareholder returns – capital allocation
In May 2022, the Board agreed a second £300 million share
buyback programme, having considered the Group’s financial
priorities and capital allocation policy in the context of ‘Powered
by Kingfisher’.
The Board assessed future investment opportunities, financial
resilience and the sustainable growth of dividends in determining
whether there was excess capital to be distributed to shareholders,
being mindful of the need to promote the success of the company
for the benefit of all stakeholders. This included financial scenario
analysis and consideration of the health of the Group’s finances,
trading outlook and three-year plan, as well as available funding
facilities and anticipated impact on the Group’s credit metrics.
The directors considered the macro-environment and market
sentiment, noting that the first share buyback programme had
been well received by stakeholders. The directors weighed up
investment and growth opportunities to ensure the company
had sufficient liquidity and that funds were not needed elsewhere
across the business. They also considered the impact of the
share buyback on the company’s ability to continue to meet
its obligations to the defined benefit pension scheme and
its members.
In considering the merits of share buybacks over special
dividends, we concluded that a second programme would
appropriately signal the Board’s confidence in long-term growth
and cash generation opportunities. The Board will continue to
periodically evaluate returning surplus capital to shareholders
via a share buyback programme or special dividends in line with
its capital allocation policy.
Climate change pillar – net zero target
In June 2022, the Board agreed to adopt a new net zero
greenhouse gas emissions target for our operations (scope 1
and 2) by the end of FY 40/41. Supportive of our ambition to be a
responsible industry leader, the directors recognised this would
further deliver Kingfisher’s commitment to tackle climate change,
whilst also meeting increasing stakeholder expectations around
greenhouse gas emissions, and keeping pace with regulation.
However, the Board also considered the investment and
business impacts including technological challenges, and the
ability to secure long-term access to zero carbon electricity.
The Board noted that each banner will be supported in the delivery
of the target in line with our broader Responsible Business priorities
and endorsed the announcement of the target in July 2022,
accompanied by an Investor Teach-in event to further engage
in this area.
Supported by the Group Climate Committee and Responsible
Business Committee, the Board will continue to monitor
Kingfisher’s approach to managing its climate-related risks and
meeting these targets, including the evolving costs to ensure
investment remains aligned to the Group’s purpose and
long-term success.
Key considerations
Long-term impact
Interests of colleagues
Fostering business relationships
Impact on community and environment
Maintaining reputation for high standards
of business conduct
Acting fairly between members
16
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Kingfisher 2022/23 Annual Report and Accounts
This section details how we have engaged with our key
stakeholders during the year as well as how this engagement may
have influenced the Board’s discussions and decision-making.
The Board and its Committees monitor the effectiveness
of engagement with stakeholders through various methods,
including the monthly review of customer insight data,
consideration of colleague engagement outputs gathered
via a continuous listening tool, and through the twice-yearly
Kingfisher Colleague Forum (KCF).
Customers
Who they are Anyone who visits our stores or online platforms.
Why Kingfisher engages Customer safety and satisfaction are pivotal to the success of our business. The needs, behaviours and feedback
of our customers are collected, assessed, and used to develop our long-term strategy.
How the Board engages
— Through the CEO and the commercial dashboard, the Board is
regularly updated on customer opinion, behaviour and feedback,
monthly Net Promoter Scores (NPS) and customer insight, which
inform our commercial and investment decisions and help us
identify key revenue drivers. The Board receives the commercial
dashboard on a monthly basis.
— The commercial dashboard also consolidates a broad range of
metrics including price indices, market trends, competitor activity
and customer insight to enable the Board to track and benchmark
progress in key business areas. The Group Customer and Market
Intelligence Director also presents to the Board twice a year, which in
2022 included the impacts of the current economic environment
and the market outlook, supported by external consultants.
— Using the online NPS results and analysis of customer comments,
we have monitored the positive impact of actions implemented
at a Group and banner level to improve the customer experience
on our websites.
— The Board received supplementary analysis at a Group and
banner level to better understand customer attraction and
retention rates.
— The Board reviewed cyber threats facing the company and its
customers and other stakeholders. The Board agreed actions
to keep under review cyber threats facing the Group, including
commissioning independent assurance to monitor progress
against our strategy.
— The Board has delegated responsibility to the Responsible
Business Committee for primary governance of Responsible
Business practices. This includes the setting of targets for
approval by the Board, and the progress of performance
against the Responsible Business objectives.
More detail can be found in the Responsible Business section
on pages 23 to 38 and on pages 71 to 72 of the Responsible
Business Committee report.
How the business engages
— We collect and consider customer research to understand the
evolving needs, attitudes, and behaviours of our customers.
— We engage in continuous customer surveys to monitor post-
purchase or post-interaction views on all our touch points and the
key drivers of customer satisfaction to improve their experiences.
— We support continuous tracking of customer brand perceptions
over time against our competitors on a range of issues,
including sustainability.
— We commission ad hoc research to gather feedback before and just
after launching new products, services, or store concepts.
— We receive regular insight updates, and this year monitored
consumer sentiment through quarterly ‘Home Improver Pulse’
surveys to get insights on home improvement activities and spend.
— We regularly monitor price indices versus our competitors in key
categories to provide visibility of customer price perception.
Our ‘price reality’ and ‘price perception’ monitoring gives us
the agility to adjust our pricing strategies throughout the year.
— We continue to transform our ranges using our industry-leading
Sustainable Home Product (SHP) guidelines and have introduced
services that together help customers assess and improve the
energy efficiency of their homes.
Outcomes and impact on Board decision-making
— Around 1,450,000 customer surveys collected for our NPS across
our markets.
— 47% of Group sales were from products that create a
more sustainable home.
— The Board receive ongoing customer insights identifying key
areas of opportunity and how to maximise customer experience.
— 25,000 customers surveyed to monitor consumer sentiment,
impact of inflation and home improvement activity.
— Since the start of 2022, NPS scores have improved and have
been good overall. The Board requested, to have a benchmark
for our NPS with competitors, to better understand our
NPS methodologies.
The Board and Committees annual evaluation process gives
directors the opportunity to comment on the engagement
mechanisms in place with our different stakeholder groups
and invites them to make recommendations for improvement.
Through the adoption of our Code of Conduct we ensure high
standards of business conduct for all our stakeholders and seek to
promote a culture where transparency and fairness are the norm.
The Board has delegated authority to the Responsible Business
Committee for oversight of our Responsible Business governance.
More detail can be found in the Responsible Business report on pages
71 to 72.
17Kingfisher 2022/23 Annual Report and Accounts
Colleagues
Who they are Colleagues of Kingfisher plc and all its subsidiaries.
Why Kingfisher engages We believe an effective people strategy and strong culture are essential to the successful delivery of our strategy.
Being able to attract, retain, and develop diverse talent is one important part of fostering a stronger, more inclusive
culture, as is incorporating the views of colleagues into decisions and being able to accurately assess their impact.
How the Board engages
— The Board regularly visits our offices and stores, engaging with
a broad range of colleagues across the business to support the
assessment of behaviour and culture.
— In May 2022, the Board visited Castorama and Brico Dépôt
stores and offices in Lille, France. Directors had the opportunity
to meet leadership teams, senior management and store
colleagues.
— In October 2022, the Board visited Screwfix distribution
centres and stores in Trentham and Stafford, UK where the
directors met members of the Screwfix and B&Q leadership
teams, senior management and store colleagues.
— The Board also received briefings from the CEO, Chief People
Officer (CPO), and General Counsel on important matters
affecting the workforce, including:
— whistleblowing reports;
— investment in training and development of our people;
— results of the annual colleague engagement and Pulse surveys
using the Workday Peakon platform; and
— dialogue with, and feedback from, the Kingfisher
Pension Trustees.
— The Board and Responsible Business Committee monitor and
assess the company’s culture and the implementation of the
vision and values set by the ‘Powered by Kingfisher’ and
Responsible Business strategies. Through the updates
presented in both forums, the directors have collectively
advised and helped to shape our People and Culture Plans.
— The Board monitored action taken to build and track culture
across Kingfisher. This included monitoring results from the
colleague listening and engagement tool which has given the
Board further insight on the workforce voice across the Group.
— Each Responsible Business Committee meeting considers the
impact of responsible business issues on our key stakeholders
including colleagues, and discusses the Colleague pillar of the
Responsible Business strategy at least annually.
— Through the Kingfisher Colleague Forum (KCF), the joint forum
of management and employee representatives. Our Senior
Independent Director, Catherine Bradley, our CEO and our CPO
engage with colleagues on transnational issues and consult on
major decisions. The Board reviews details of each meeting and
is delighted that the KCF continues to be a strong engagement
channel. Alongside the colleague listening and engagement tool
it provides an opportunity for the views of the workforce to be
clearly heard by executive leadership and the Board.
How the business engages
— We communicate regularly through a variety of internal channels
and social communication tools. We also engage interactively via
virtual town halls and Q&As.
— Through the Responsible Business network meetings, we engage
monthly to receive updates on the four key priorities of our
Responsible Business strategy.
— We have a variety of listening groups, such as retail banner
colleague forums, and affinity networks.
— Colleagues also receive frequent performance check-ins and
development meetings.
More detail can be found in the People and Culture section on
pages 14 to 15.
— We continue to hold ongoing dialogue with unions where appropriate.
— Senior colleagues receive training and development, which in 2022
supported our Inclusion and Diversity action plans.
— Ongoing usage of a specialist tool by our recruiters as well as line
manager training are helping to minimise the impact of bias and
ensure a fair recruitment process.
Outcomes and impact on Board decision-making
— 83% participation in our 2022 annual colleague engagement
survey (c. 63,600 colleagues).
— In light of the rising cost of living, the Board reviewed workforce
pay proposals at the September 2022 and January 2023
Remuneration Committee.
— Employee NPS was 54, which is in the top 5% of global retailers.
— 2,642,927 hours of learning across our banners and
Group functions.
Stakeholder engagement and decision-making continued
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Kingfisher 2022/23 Annual Report and Accounts
Investors
Who they are Equity shareholders and providers of debt funding that contribute capital to our business.
Why Kingfisher engages Our investors rely on us to protect and manage their capital in a responsible and sustainable way while generating
long-term value. Investors and potential investors need a clear understanding of our business, our strategy, our
performance against our strategic objectives, our growth potential, and the risks and uncertainties we are managing.
How the Board engages
— The Board takes ultimate responsibility for how we plan to create
sustainable long-term value for investors and this engagement
takes place in a frequent and constructive manner.
— The CEO, the CFO, and the Chair engage regularly with investors.
Other directors including the Chair of the Remuneration
Committee and Senior Independent Director also met
with investors in 2022.
— When making strategic decisions, the Board draws on the
feedback from its engagement or holds targeted consultation
to analyse how its choices will impact the delivery of long-term
shareholder value.
— In July 2022, we hosted a Teach-in event for investors and
analysts, focused on two of our ‘Powered by Kingfisher’ pillars:
E-commerce & Technology and Responsible Business. The event
was attended by both executive and non-executive directors.
— The Board chooses to engage with investors and our brokers
on a broad range of shareholder returns and capital allocation
decisions, including working capital requirements, capital
investment opportunities, and matters such as ESG, appetite
for mergers and acquisitions (M&A), the Dividend Policy and
share repurchase programmes.
— The Chair of the Remuneration Committee also consults
with shareholders on ESG and executive remuneration matters.
In the second half of 2021/22 and in the first quarter of 2022/23
the Chair of the Remuneration Committee consulted with
shareholders on the proposed Remuneration Policy as well
as the targets for 2022 Performance Share Plan (PSP) ahead
of their adoption at our 2022 Annual General Meeting (AGM).
— In May 2022, the Board approved a second £300 million share
buyback programme. Page 16 sets out how the directors had
regard to their section 172 duties in making this decision.
How the business engages
— The Board recognises the AGM as a significant opportunity to
engage with retail shareholders. In 2022, in-person AGMs resumed
following two years of virtual meetings. The business also engages
through key disclosures, including:
— annual report and accounts;
— market disclosures, including results announcements, trading
updates and ad hoc updates; and
— investor and analyst presentations, roadshows, Teach-in events
attended by the CEO, the CFO, and the Chair, as appropriate.
— We do not take any decisions or actions that would provide any
shareholder or group of shareholders with any unfair advantage
or position compared to the shareholders as a whole.
Outcomes and impact on Board decision-making
— In July 2002, 50 investors and sellside analysts attended the
investor Teach-in event alongside seven members of executive
leadership, the Chair and the Senior Independent Director.
— During the year, the Kingfisher Investor Relations team had over
450 interactions with institutional investors and sellside analysts
on general business topics. They also had interactions with over
100 investors and analysts covering ESG topics.
— We took steps to improve our understanding of climate-related
financial risks and opportunities in line with recommendations of
the Task Force on Climate-related Financial Disclosures (TCFD).
We see our TCFD statement as an investor driven disclosure to
be used by investors to guide their conversations with us on
climate risk. See pages 27 to 38 for more detail.
— Approval of the Remuneration Policy and the plan rules of the PSP
at our 2022 AGM.
19Kingfisher 2022/23 Annual Report and Accounts
Suppliers
Who they are Organisations we work with to deliver products and services to our customers.
Why Kingfisher engages The trusted partnerships we have with our suppliers are critical to meeting customer needs and instrumental in
delivering our Responsible Business strategy.
How the Board engages
— Where appropriate, we consider the impact on our suppliers when
making key strategic decisions relating to product ranges or
supply and logistics.
— The Board does not regularly engage directly with our suppliers
but receive frequent reporting from the parts of the company
that work with them.
— Supplier surveys are conducted on an annual basis to capture
the sentiment among own exclusive brands (OEB) and branded
suppliers. The output from these surveys is tabled to the Board to
allow the directors to understand the quality of the relationships
with vendors including to key topics such as tendering, payment
performance, communication and logistics.
— In March 2023, the Board reviewed insights on OEB and branded
suppliers’ sentiment to the company and their experiences,
gathered via the 2022/23 Supplier Survey. Through their
consideration, directors have helped shape the mechanisms
utilised to gather feedback.
— Annual review of the Modern Slavery Transparency Statement
and progress of implementation of the Modern Slavery Action Plan
(Action Plan) across key areas of the business and supply chain.
This Action Plan covers diligence, ethical audit, supplier and
colleague engagement, training, policy and reporting. The Group
continues to strengthen its monitoring of human rights risks across
the business.
— The Audit Committee has a forward agenda that ensures it
receives updates from each banner CEO and Group function
head including information on suppliers and supply chain
resiliency. The Committee’s report is on pages 73 to 76.
— The Responsible Business Committee also receives updates
regarding the delivery of the Responsible Business strategic
objectives. The Committee’s report is on pages 71 and 72.
— In January 2023, the Audit Committee reviewed a report on
our supply chain risks and mitigating actions.
How the business engages
— Engaging suppliers with our Code of Conduct and Responsible
Business strategy.
— Conducting supplier ethical risk assessments and audits that look at:
— our factory base, by requiring Sedex or Amfori BSCI
registration (online supplier data exchanges) and ethical
audits of high-risk production sites, for our ‘goods for resale’
(GFR) suppliers;
— our supplier carbon footprint, through the M2030 Low Carbon
Manufacturing Programme; and
— our sustainability ratings, through the EcoVadis sustainability
ratings platform, for contract spend with our ‘goods not for
resale’ (GNFR) suppliers above £75,000.
— Visiting factories and sites.
— Conducting risk-based anti-bribery and corruption due diligence.
— Keeping under review our approach to human rights.
— In October 2022, we conducted a survey of c. 1,810 OEB and
branded GFR suppliers to gather feedback and identify key
areas for improvement at a banner, regional and buying office
level. Improvement action plans will be put in place to address
areas identified.
— Organising supplier conferences on topics of significance.
— In November 2022, we held an OEB vendor conference in Lille,
France. Attended by our 100 largest vendors in-person and online
with access available to all of our OEB vendors globally.
— Reporting our payment practices under the UK Government’s
Duty to Report Requirements.
Outcomes and impact on Board decision-making
— We received 1,150 replies to the 2022/23 Supplier Survey; 82% of all
responses were positive.
— Further details and performance data are set out in our
Modern Slavery Act Transparency Statement on our website,
www.kingfisher.com
— Successful OEB vendor conference held in Lille, France in
November 2022.
— Board approval of Modern Slavery Transparency Statement.
Stakeholder engagement and decision-making continued
20
Strategic Report Governance Financial Statements
Kingfisher 2022/23 Annual Report and Accounts
Communities and non-governmental organisations (NGOs)
Who they are The communities and people who live where we work, and where we source from, as well as the NGOs we
work alongside.
Why Kingfisher engages It is important to us that we meet growing expectations on companies to undertake strong environmental, social
and governance action and are committed to having a positive impact on the lives of our customers, colleagues
and communities.
How the Board engages
— The Board recognises increasing expectations around ESG and
the importance of building momentum around our Responsible
Business and Community strategies.
— In 2022, the Board received presentations regarding initiatives
within our banners and experienced some first hand, including the
Screwfix power tool refurbishment site in Stafford, UK.
— In 2022, the Board was also updated on our partnership with the
Rainforest Alliance Forest Allies supporting our Forest Positive
strategy and our climate change carbon reduction activities.
— Through updates presented to the Board and its Responsible
Business Committee, the directors regularly review the progress
of our community programmes and environmental work.
— The Board is kept abreast of emerging issues such as climate
risk and updated reporting obligations, on an ad hoc basis.
How the business engages
— We form strategic partnerships and fund charitable organisations
active in the environment and on housing issues aligned with our
purpose and Responsible Business priorities, including:
— partnership with Shelter, a UK-based housing charity, to
fund a network of DIY Skills Advisers and provide advice, and
campaigns to improve the quality of UK housing. Fondation
Abbé Pierre supports tackling homelessness in France;
— each banner has a charitable foundation established to help
fix bad housing in their respective markets; and
— we are a founding member of the Rainforest Alliance Forest
Allies programme; we fund and support leading green NGOs
and not-for-profit initiatives including Green Alliance, Aldersgate
Group, BioRegional, UN Race to Zero Breakthroughs: Retail
campaign and the Forest Stewardship Council.
— We support organisations to:
— help us develop our inclusivity agenda including Business
Disability Forum and Stonewall;
— collaborate to tackle modern slavery including partnering
with the Slave Free Alliance;
— play a constructive and active role in the implementation
of Brexit and the future of UK and European relationships
including supporting the Centre for European Reform; and
— we also respond to emerging situations to provide disaster
relief via NGOs including the Red Cross and the United Nations
High Commissioner for Refugees for the Turkey/Syria
earthquakes. Our banner foundations mobilised during
the Ukraine conflict and donated £500k comprising cash
and products.
Outcomes and impact on Board decision-making
— Collaborating with retail peers through the UN Race to Zero, and
the British Retail Consortium’s Climate Action Roadmap, to help
tackle climate change across the retail sector and to collectively
drive climate actions.
— Adoption of ESG targets in the new Kingfisher Performance
Share Plan.
— Further delivering against our Forest Positive commitment
through forest projects. More detail can be found in the
Responsible Business section on pages 23 to 26.
— Through updates presented to the Board and Responsible
Business Committee, the directors have helped shape our plans
for delivery and set targets in this area. For example, approval of
a net zero emissions target by the end of FY 40/41. Page 16 sets
out how directors had regard to their section 172 duties in making
this decision.
21Kingfisher 2022/23 Annual Report and Accounts
Regulators and government
Who they are Bodies that supervise our industry and business activities.
Why Kingfisher engages We value the trust of our stakeholders to fully realise our purpose, provide employment opportunities, and
contribute to the economic prosperity of the places where our people live and work.
How the Board engages
— Twice a year a report on material political issues impacting
Kingfisher across its geographies is shared with the Board.
These reports include monitoring actions and next steps.
— The Board receives updates on key governance and regulatory
changes that may impact the company and responds to policy
consultations and formal information requests, as required.
— When needed the Board and executive leadership engage with
regulators, government stakeholders, and political representatives
both directly and via industry associations and other partners.
How the business engages
— We directly engage with the governments and regulators in each
of our key markets as well as with the EU.
— We also engage indirectly through:
— retail trade associations, including the British Retail Consortium,
the EU DIY Retail Association, and the French DIY Retail
Association; and
— business associations such as the CBI (UK), AFEP (France) and
Lewiatan (Poland).
— In 2022, we have engaged on key policies, including UK business
rates reform to achieve parity with online only retailers; the cost
of energy to enhance support for domestic energy efficiency;
and, the need to promote careers in the trade. We have also been
involved in supporting a range of positive environmental measures
in line with our Responsible Business commitments.
— As a matter of course, we attend government meetings
and events, respond to consultations, and participate in
parliamentary inquiries.
— We also regularly engages with regulators, including in the UK, the
Registrar of Companies, the Financial Reporting Council, the
London Stock Exchange, the Financial Conduct Authority, and the
Information Commissioner’s Office on matters of statutory or
regulatory compliance.
Outcomes and impact on Board decision-making
— Progress made on issues, including:
— certain reform of business rates in the UK and the
establishment of the Digital Markets Act in the EU;
— further government measures in a number of our markets to
support home energy efficiency; and
— the ban on peat in horticulture in the UK and updates to the EU’s
Deforestation Regulation.
— Ongoing Board monitoring of macroeconomic and geopolitical
forces on performance.
Stakeholder engagement and decision-making continued
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Kingfisher 2022/23 Annual Report and Accounts
Integrating responsible business into
everyday operations
For over three decades, Kingfisher has been prioritising
responsible business practices. As a key part of our ‘Powered
by Kingfisher’ strategy, we are working to integrate responsible
business into everything we do.
Responsible Business governance
Our Responsible Business Committee (RBC), a Committee of
the Board, is chaired by a non-executive director and oversees
the delivery of our Responsible Business strategy. It provides
advice and assurance to the Group Executive and the Board
on all matters relating to responsible business practices, and
monitors performance against our priorities.
See page 71 for the Responsible Business Committee report.
Responsible Business
The Chair of the RBC reports on its activities to the Board and
the Board and Committee members also review Responsible
Business KPIs on a quarterly basis as part of their governance
duties. This year we integrated responsible business measures
into the Kingfisher Performance Share Plan for our senior
leadership team.
For more detail see pages 71 to 72.
The governance of climate-related risks and opportunities is
detailed on page 27 of our Task Force on Climate-related
Financial Disclosures (TCFD).
Our four Responsible Business priorities
We have four Responsible Business priorities. These focus on the issues where we can use our size and scale to bring about positive
change for our customers, colleagues, communities and the planet. Now into the third year of delivery, we have continued to make
progress in all four areas.
We will publish full details of this year’s progress in our dedicated Responsible Business Report in June 2023.
We will be a more
inclusive company.
We will be Forest
Positive and help
tackle climate
change.
We will help make
greener, healthier
homes affordable.
We will fight to fix
bad housing.
Our commitment
We will be a more
inclusive company by
breaking down barriers
to employment and
progression, and by
building skills for life.
Our commitment
We will help tackle
climate change by
reducing carbon
emissions from our
business, products and
supply chains; and by
creating more forests
than we use. We
will become Forest
Positive by investing
in forest projects.
Our commitment
We will help millions
of customers have a
greener, healthier home
– one that is resource-
efficient, uses planet-
friendly materials
and is free from
harmful chemicals.
Our commitment
We will donate our
products, expertise
and time to help people
whose housing needs
are greatest in the
communities we serve.
Colleagues Planet Customers Community
See page 24 for details on our progress against the targets for our four key priorities.
23Kingfisher 2022/23 Annual Report and Accounts
Responsible Business continued
Colleagues
Our targets
— Improve gender balance to 35% women in senior leadership
and 40% women in management by FY 25/26.
— Provide five million hours of skills for life learning by FY 25/26.
Our progress
— 25.8% of senior leaders
1
and 38.9% of managers are women,
compared with 25.2% and 37.9%
2
respectively last year.
— 33.3% of our Group Executive and their direct reports are
women, compared with 31.1% last year.
— Colleagues completed over 2.6 million hours of skills for life
learning, bringing the total number of hours completed since
FY 19/20 to 6.6 million – reaching our target ahead of schedule.
— Each retail banner and Group function has an Inclusivity
Action Plan and Inclusion and Diversity (I&D) Affinity Groups
linked to Kingfisher’s I&D Advisory Forum.
— Our I&D Advisory Forum acts as an ideas incubator and
amplifier to accelerate inclusion. Chaired by Screwfix CEO,
the Forum brings together colleagues from Group functions
and every retail banner.
Engagement and inclusivity are part of our People and Culture
Plan discussed on pages 14 and 15.
Planet
Our targets
— 100% wood and paper responsibly sourced for our products
and catalogues by FY 25/26.
— Become Forest Positive by FY 25/26.
— Achieve our Science Based Targets initiative (SBTi)
approved carbon reduction target (consistent with
reductions required to keep global warming to 1.5°C) by
FY 25/26.
— Reach net zero emissions for our operations (scope 1 and 2)
by the end of FY 40/41.
Our progress
— 94.5% of the wood and paper used in our products was
responsibly sourced (FY 21/22: 87.2%) and all catalogue paper.
— As a founding member of the Rainforest Alliance Forest
Allies, we continue to invest in six forest projects in key
tropical sourcing regions. These cover over 300,000
hectares and support the livelihoods of 7,400 people.
— B&Q, Castorama France, Castorama Poland and Screwfix
established local partnerships to restore, create and protect
native woodland and forests.
— Continued progress against our science-based targets and
have reduced operational emissions (scope 1 and 2) by 52.7%
since 2016/17 exceeding our target of 38% reduction by FY
25/26.
3
— Announced a new net zero commitment for our operational
emissions and published a five-point roadmap, setting out
how we will achieve our new goal.
Customers
Our targets
— 60% of Group sales to be from our Sustainable Home
Products (SHP), including 70% of sales for our Own
Exclusive Brand products (OEB) by FY 25/26.
Our progress
— 46.8% of total Group sales came from products that help
create greener, healthier homes (FY 21/22: 44.1%), with
energy-saving and energy efficiency products in particularly
high demand.
— SHP now account for 56.4% of OEB sales (FY 21/22: 54.7%)
and we have started a project to better understand the
footprint of our OEB products (scope 3 emissions).
— Expanded our range of energy-saving products and services
to better support customers to improve the energy
efficiency of their homes.
— Improved sustainability performance across several ranges
including: fully phasing out peat at B&Q (our Group’s biggest
seller of compost by volume); introducing Naturéa, a
biobased paint; replacing virgin plastic with recycled plastic
or more planet-friendly materials in several OEB product
ranges and product packaging.
Community
Our targets
— Help more than two million people whose housing needs are
greatest by FY 25/26.
Our progress
— Our projects have reached over 470,000 people this year,
which brought our total to 2.1 million people helped since
FY 16/17, achieving our target three years ahead of schedule.
— Charitable foundations now established in all our banners.
Our Foundation in Iberia launched in March, supporting
projects linked to housing or helping refugees.
— £5.4 million community investment in the year with an
additional £2.8 million raised by our colleagues and customers.
— Continued to support people displaced by the war in Ukraine
through our partnership with the Red Cross, the work of our
Foundations particularly in Poland and Romania, and through
a new partnership between B&Q and the Refugee Council.
— Continued our partnerships with national charities, Shelter
and Macmillan Cancer Support in the UK, Fondation Abbé
Pierre and Compagnons Bâtisseurs in France, and Habitat
for Humanity in Romania and Poland.
1. Our senior managers are those included in our Performance Share Plan (around top 300 positions, see pages 77 to 100). We also participate in the
FTSE Women Leaders Review benchmark which uses a data set based on a smaller selection of leadership positions. Based on the benchmark data set
we reached 33.3% women in senior leadership.
2. We previously reported two sets of management data, one in our Directors’ remuneration report and the other in the People and Responsible Business
sections. This year, we have aligned this data and are now reporting progress against the target set out in the Directors’ remuneration report (to increase
women in management to 40% by FY 25/26) which can be found on page 77. The management population reflects all junior and middle management
and excludes senior leadership. FY 21/22 data reported here has been rebased to show progress against our target.
3. Scope 3 emissions will be published in our Responsible Business Report in June 2023.
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Our Responsible Business fundamentals
Our priorities are underpinned by our commitment to our
Responsible Business fundamentals. These are the issues and
impacts we measure and manage to ensure we continue to
operate responsibly across our business.
For each fundamental we have a clear Group policy that allows
us to work effectively across our functions and banners to
continually improve performance.
Responsible sourcing and human rights
We respect, protect and promote the human rights of our
colleagues, workers across our supply chain and others
affected by our business activities.
Our Human Rights Policy aligns with international agreements
and guidelines, including the United Nations Guiding Principles
on Business and Human Rights, the International Bill of Human
Rights (which includes the Universal Declaration of Human
Rights), the UN Global Compact, the International Labour
Organization’s Declaration on Fundamental Principles and
Rights at Work, the Children’s Rights and Business Principles
and UN conventions on the elimination of discrimination.
We work with our suppliers to raise standards on the
environment, labour practices, and human rights in our supply
chain. Our due diligence includes ethical risk assessment
processes, ethical audits, supplier training and engagement,
and collaboration with human rights experts such as Slave
Free Alliance, a victim-focused social enterprise.
Further details are available in our Modern Slavery Act Transparency
Statement (www.kingfisher.com/Modern-Slavery).
We do not tolerate any form of modern slavery in our business
or supply chains. Our Modern Slavery Working Group, chaired
by our Human Rights Manager, meets three times a year to
oversee due diligence and disclosure on human rights and
modern slavery. It brings together stakeholders from across
the business who are working on ethical sourcing issues. Its
action plan includes internal training, supplier training, supplier
ethical risk assessment, ethical audit, supplier and colleague
engagement, policy and reporting.
For further details and performance data, see our Modern Slavery Act
Transparency Statement (www.kingfisher.com/Modern-Slavery).
Health and safety
We believe every colleague is entitled to a safe working
environment. Our Group Safety and Compliance Officer
oversees our approach and is supported by Senior Management
Safety Committees in each retail banner and a network of safety
professionals. Kingfisher Safety Network meetings and training
sessions are held twice a year.
A Health & Safety dashboard summarises performance at each
retail banner. This data is reviewed quarterly by the Group
Executive and the Board and is published annually in our
Responsible Business Report.
We began a project to update our safety software and reporting
tool in FY 22/23 to improve how we record and report accidents,
illness and near-miss incidents across all banners and functions.
The software will be rolled out in Q2 2023.
Restoring a tree-less landscape with
the Woodland Trust
B&Q and Screwfix have launched a major new partnership
with the Woodland Trust, the UK’s largest woodland
conservation charity.
The partnership will support the creation of new native
woodland at Snaizeholme in the Yorkshire Dales, which is
currently a tree-less valley. The aim is to capture carbon
and help to reduce flood risk in surrounding areas, as well as
creating a haven for wildlife. The project will also include work
to restore 250 acres of upland peat bog – a vital and unique
natural habitat and carbon sink. The Woodland Trust’s vision
for Snaizeholme is to create a vibrant mosaic of native
woodland, with extensive habitat restoration across peat
moorland, acid grassland, limestone pavement and riverside
meadows, which will become a Yorkshire beacon for the bid
to support nature recovery and tackle climate change.
The project is part of our Forest Positive commitment and
supports the Woodland Trust’s ambitious plan to establish
England’s largest new native woodland as part of the
Northern Forest.
Waste and chemicals
We are committed to achieving zero waste to landfill and
increasing recycling. In the UK and France, these policy
commitments are integrated into the contracts with waste
management partners, and we regularly review their progress.
We are also working to further reduce packaging waste.
While we strictly comply with all applicable regulations related to
chemicals, we have identified some chemicals that we consider
to be less sustainable and are starting to phase these out of our
products. In FY 22/23 we updated our chemicals roadmap to
ensure our approach will align with significant regulatory
changes expected in the EU.
A full update and performance data will be published in the
Responsible Business Report in June 2023.
25Kingfisher 2022/23 Annual Report and Accounts
Ethical conduct
Our Code of Conduct summarises our approach to doing
business and the ethical standards we expect. It promotes a
culture of transparency, honesty and fairness.
Read more at www.kingfisher.com/en/about-us/company-policies
The Code applies to all Kingfisher colleagues and third parties.
We have supporting policies and an online approval and
reporting procedure for gifts and hospitality and conflicts
of interest, and a policy on competition law.
All colleagues are required to complete annual training on our
Code of Conduct. This covers the key principles of the Code and
how to raise concerns. Colleagues working in sensitive areas of
the business or in higher-risk roles also completed additional
training on fair competition and Market Abuse Regulation.
Our Group Ethics and Compliance Committee is chaired by
our CFO and oversees compliance, identifies priorities, and
reviews compliance reports and investigations during its
quarterly meetings. Local Ethics and Compliance Committees
in each of our banners provide ongoing support and insight.
We use a third-party due diligence tool to support our
processes in areas such as anti-bribery and corruption, data
protection, sanctions and conflict of interest. We operate
a confidential whistleblowing hotline. The Board and Audit
Committee receive regular updates about whistleblowing
reports as well as the outcome of sensitive internal investigations.
For more information see page 75 of the Audit Committee report.
All suppliers must comply with our Code of Conduct and we
embed its requirements into our procurement processes and
supplier contracts. Potential new suppliers must factor in our
Code of Conduct and ethical requirements.
Our anti-bribery and corruption policies and procedures, and
our approach to data protection and cyber security are
explained in the Risk section on pages 51 to 58.
ESG disclosure
We disclose our performance on ESG issues through several
external benchmarks including CDP (see page 38) and the
Workforce Disclosure Initiative (WDI). We align our reporting
to the Global Reporting Initiative (GRI), Task Force on Climate-
related Financial Disclosures (TCFD) and the Sustainability
Accounting Standards Board (SASB) standards for Multiline
and Speciality Retailers and Distributors.
For more information visit www.kingfisher.com/responsiblebusiness
Responsible Business continued
26
Strategic Report Governance Financial Statements
Kingfisher 2022/23 Annual Report and Accounts
Our response to the Task Force on
Climate-related Financial Disclosures
Governance
Board-level oversight of climate-related risks and
opportunities [TCFD Governance (a)]
The governance of climate-related risks and opportunities is
integrated into our overarching Kingfisher governance
framework. A visual representation of our governance
framework is provided in the Corporate governance report on
page 62.
Our Board of Directors is our highest governing body and
assesses the management of principal risks, including climate
change, and reviews our Responsible Business KPIs each
quarter. In 2022/23, the Board of Directors reviewed and
approved management’s proposal for a scope 1 and 2 net zero
target, progress against which will be communicated to the
Board on an annual basis.
Our CEO is accountable for energy and climate change, with
climate-related responsibilities sitting within various Board and
management committees:
— Our Group Executive is responsible for identifying,
assessing and managing the principal risks, including climate
change, and for reviewing and recommending to the Board
on an ongoing basis key climate-related commitments
proposed by management (e.g. our scope 1 and 2 net
zero commitment and investment plan).
— Our Responsible Business Committee (RBC), a committee
of the Board, is chaired by a non-executive director and
provides advice and assurance to the Group Executive
on all matters relating to responsible business practices
(including climate change). The RBC met twice in 2022 and
its report is on pages 71 and 72. Specific climate-related
issues discussed by the RBC in 2022 included customer
support for energy efficiency measures, and our scope 1
and 2 net zero commitment.
— Our Group Climate Committee, chaired by our Chief
Executive Officer, was established in 2022. It meets
quarterly with relevant management to agree and
monitor the company’s approach to meeting its climate
commitments and assessing climate-related risks and
opportunities. It provides an update to the RBC on the
proceedings of each meeting, including on key decisions
and actions.
— Our Group Investment Committee is directly accountable
for all capital and revenue expenditure above the threshold
reserved for approval at the banner or Group function level.
Energy-related capital investments, which are fully aligned
with our scope 1 and 2 emissions reduction targets, are a
standing agenda item at meetings.
— Our Audit Committee receives updates from management
on Kingfisher’s compliance with changing sustainability-
related reporting requirements, including our
TCFDdisclosures.
Additionally, banner boards consider climate-related issues and
are responsible for implementing the energy-related capital
investments approved by GIC, and for delivering progress
against our scope 1 and 2 emissions reduction commitments.
Information on how our Board engages with stakeholders including in
relation to climate change is included in our Section 172(1) Statement
on page 16.
Key areas of progress in FY 22/23:
— Governance: We established our Group Climate Committee,
chaired by our Chief Executive Officer, to agree and
monitor the company’s approach to meeting its emission
reduction commitments and assessing climate-related risks
and opportunities.
— Strategy: We announced a net zero commitment for our
operational (scope 1 and 2) carbon emissions and published
our five-point transition plan, setting out how we will achieve
our new goal. We launched a range of energy-saving services
and expanded our energy-saving product ranges to help
customers reduce their household energy bills, supporting
carbon reduction efforts.
— Risk management: We undertook detailed, quantitative
analysis to understand the financial impacts of climate
change under a range of scenarios. This focused on risks
associated with carbon pricing, disruption to our operations
from physical climate hazards, and the future availability of
key species of wood for our product ranges.
— Metrics and targets: We tied our new Performance Share
Plan, granted to members of our senior leadership team,
to progress on our operational (scope 1 and 2) emissions
targets. We made continued progress against our 2025/26
targets by reducing scope 1 and 2 emissions by 52.7% in
FY 22/23 (vs 2016/17), in addition to reducing our FY 21/22
scope 3 emissions by 19.7% per £million turnover
(versus 2017/18).
Climate change is one of the greatest risks society faces and
its impacts will be felt by businesses over the short, medium
and long term. In this TCFD statement, we provide our material
climate-related financial disclosures, as required by current FCA
Listing Rules.
Within our FCA compliance statement, found alongside our
TCFD index on pages 37 and 38, we describe which TCFD-
aligned disclosures we have not yet been able to make.
27Kingfisher 2022/23 Annual Report and Accounts
Management’s role in assessing and managing
climate-related risks and opportunities [TCFD
Governance (b)]
The day-to-day assessment and management of climate-
related risks and opportunities is conducted through several
senior management positions and operational teams:
— Our Responsible Business team, led by our Director
of Responsible Business, is accountable for developing
Group-wide climate change strategy, climate-related risk
and opportunity identification and assessment, and for
reporting and communication on climate-related matters.
The Responsible Business team is responsible for ensuring
each of these activities is fully integrated into Kingfisher’s
strategic and financial planning processes.
— Within the Group Offer & Sourcing function, a sustainability
team is responsible for ensuring our product sustainability
requirements are embedded into our Own Exclusive Brand
(OEB) product ranges, and for collaborating with OEB
vendors to reduce their own emissions.
— Each banner is responsible for delivering scope 1 and 2
emissions reductions, in line with the contributions of each
banner required under the Group-wide scope 1 and 2
science-based targets.
— In 2022, we established internal Energy and Net Zero
Logistics Forums to facilitate decarbonisation planning
and action in each area of our retail operations and to
share best practices across banners.
The Responsible Business team agree the agendas for
the Responsible Business Committee and Group Climate
Committee with the respective committee chairs, prioritising
updates or decisions on key areas of Kingfisher’s climate
strategy as necessary. This ensures that management
communicates to relevant governing bodies on an
ongoing basis.
For example, in FY 2022/23 the Responsible Business team
delivered an update to the Group Climate Committee on the
findings from our climate scenario analysis, and proposed the
establishment of a scope 1 and 2 net zero target to the
Responsible Business Committee.
Enhancing our governance of climate-related risks
and opportunities
We have reviewed competence at Board level and found that
the Board contains sufficient climate-related expertise through
the inclusion of the Chair of Kingfisher’s RBC, who is briefed
regularly on a wide range of climate-related issues, as well as
our CEO who chairs the Group Climate Committee.
In 2022 we also focused on building knowledge and expertise
on climate change for management through dedicated training
in key Group functions such as Financial Planning and Analysis,
and Internal Audit.
Strategy
Our strategy for identifying climate-related risks and
opportunities is informed by our risk management processes
(see Risks on page 51), of which our use of climate-related
scenario analysis is a key component. Where material to our
business performance, we consider climate-related risks
and opportunities within our strategy development and
financial planning.
Our climate-related risks and opportunities [TCFD
Strategy (a, b), Metrics and Targets (a)]
We have defined risk time horizons of short term (0-1 years),
medium term (1-3 years), and long term (3+ years).
To guide our disclosure of climate-related risks and
opportunities, we define materiality based on net risk severity
level, in accordance with our Group-wide risk management
framework, rather than any definition of financial materiality
used elsewhere within our reporting. As a result, we have
disclosed only those risks and opportunities assessed
as having a net risk severity level of ‘medium’ or higher
(see Risk Management (a)).
Risks and opportunities assessed as having a lower net risk
severity level include those related to current and emerging
climate-related regulations.
Our response to the Task Force on Climate-related Financial Disclosures continued
28
Strategic Report Governance Financial Statements
Kingfisher 2022/23 Annual Report and Accounts
Our climate-related risks and opportunities
Risks/opportunities and description
[TCFD Strategy (a)]
Impact of specific climate-related risks and opportunities on our strategy
and financial planning [TCFD Strategy (b)] and associated metrics for ongoing
assessment of our risks and opportunities [TCFD Metrics and Targets (a)]
Market changes
Opportunities to increase sales of Sustainable
Home Products (SHP)
1
that enable customers to
create net zero homes; reputational risks from
failure to transition away from carbon intensive
products such as peat.
Timeframe for most significant impact:
Short term (0-1 years) due to current elevated
energy prices.
Geography and business areas impacted:
Global product offering, with actions to realise
opportunities in each market.
Elements impacted: Products and services, supply chain mitigation activities, investment in R&D.
Description: The commercial opportunities and risks from the transition towards net zero will
continue to shape our product range and business strategy. Research by Halifax suggests that
around 60% of homes in England and Wales fail to meet the UK Government’s aspiration for as
many homes as possible to reach Energy Performance Certificate Band C by 2035.
2
Our SHP help to make greener, healthier homes more affordable and can support the delivery
of national net zero targets. We are also taking action to reduce the embodied carbon in our
product ranges, in line with our scope 3 carbon targets.
Product innovation is a key focus of our strategy. For example, we are exploring how we can
reduce supply chain carbon emissions from our bagged cement products by switching to lower
carbon formulations.
In 2022, we launched the B&Q Energy Saving Service in the UK and other energy efficiency
services in our French banners, and expanded our energy-saving product ranges across our
banners to support customers in reducing household energy costs and emissions.
Metrics: We assess progress in managing this opportunity through our headline target to
achieve 60% of Group sales from SHP by the end of FY 25/26 (and 70% from our OEB products
and services) – see page 24. A more detailed breakdown of our SHP metrics is provided for
historical periods on pages 27 to 29 of our FY 21/22 Performance Data Appendix.
3
Energy and fuel costs
Increased risk of rising energy and fuel prices,
due to regulatory changes and an increase in
energy demand (e.g. more heating and cooling
requirements during extreme weather).
Timeframe for most significant impact:
Short term (0-1 years) due to current elevated
energy prices.
Geography and business areas impacted:
Global retail and distribution operations, with
actions to mitigate risks in each market.
Elements impacted: Operations.
Description: We are working to reduce energy use and carbon emissions through our science-
based targets, which cover our own operations (scope 1 and 2 emissions) and supply chain
(scope 3 emissions).
We mitigate this risk through investments to improve the efficiency and reduce the carbon
intensity of our energy and fuel consumption. For example, we continue to roll out LED lighting
and building energy management systems across our estate, whilst increasing the proportion
of our power derived from renewable sources. See the Improving energy efficiency section on
page 34.
Metrics: We assess progress in managing this risk through multiple metrics including:
— Scope 1 and 2 GHG emissions
— Total energy intensity (kWh/m
2
reported floor space)
— Loading efficiency (litres of fuel used per m
3
of product delivered to stores)
Our latest FY 22/23 scope 1 and 2 GHG emissions and total energy intensity are available on
page 33. A more detailed breakdown of each of these metrics is provided for historical periods
on pages 22 to 26 of our FY 21/22 Performance Data Appendix.
3
Carbon pricing
National and/or international carbon pricing
policies may result in increased operational and
supply chain costs that we are not able to pass
through to customers in full, and/or may lead to
reduced demand for products.
Timeframe for most significant impact:
Long term (3+ years).
Geography and business areas impacted:
Global supply chains, with actions to mitigate
risks in each market.
Elements impacted: Products and services, supply chain mitigation activities, access to capital.
Description: A key pillar of our Responsible Business strategy is our commitment to reducing
our emissions in line with the UN’s goal to limit global warming to 1.5 degrees (see Metrics and
Targets below), the highest ambition of the Paris Climate Change Agreement.
We have a strong track record in reducing our own emissions and are collaborating closely with
our suppliers to ensure we are driving positive change across our supply chain. For example,
through our commitment to generating 60% of Group sales from SHP by the end of FY 2025/26,
a co-benefit will be the reduction of carbon emissions embodied within certain SHP ranges (e.g.
through selecting more sustainable materials) and/or emitted when our customers use and
dispose of our products (e.g. through providing more energy efficient products).
We continue to monitor regulatory and market developments to inform our Responsible
Business strategy and financial planning.
Metrics: We assess progress in managing this risk primarily through our GHG emissions (scope 1,
2 and 3), as well as a Discounted Cash Flow at Risk metric calculated through our scenario
analysis (further details on page 32). Our latest FY 2022/23 scope 1 and 2 GHG emissions are
available on page 33. A detailed breakdown of our scope 1, 2 and 3 GHG emissions is provided
for historical periods on pages 22 to 26 of our FY 2021/22 Performance Data Appendix
3
.
1. Our Sustainable Home Products (SHP) can help to lower the environmental impacts of our products by including features that are sustainable and/or deliver
sustainable benefits to customers. SHP support our ambition to address climate change through reducing carbon emissions embodied in our products and
those linked to our customers’ use and disposal of them.
2. www.lloydsbankinggroup.com/media/press-releases/2022/halifax/15-million-homes-need-energy-efficiency-upgrades.html
3. Our Performance Data Appendix provides climate-related metrics for FY 2021/22 and historical periods and is available at www.kingfisher.com/dataappendix
29Kingfisher 2022/23 Annual Report and Accounts
Our response to the Task Force on Climate-related Financial Disclosures continued
The following risks have been assessed via our scenario analysis process and have been determined to have a ‘low’ net risk severity
level (see Strategy (c)), in accordance with the Kingfisher risk assessment process (see Risk Management (a)). We will continue to
monitor these risks on an annual basis:
Risks/opportunities and description
[TCFD Strategy (a)]
Impact of specific climate-related risks and opportunities on our strategy and
financial planning [TCFD Strategy (b)] and associated metrics for ongoing
assessment of our risks and opportunities [TCFD Metrics and Targets (a)]
Facilities disruption and damage
Increased average global temperatures will most
likely lead to the increased frequency and intensity
of extreme weather events, which may cause
damage to our facilities (increased costs) and
consequently disrupt our retail and distribution
operations (decreased revenues).
Timeframe for most significant impact:
Long term (3+ years).
Geography and business areas impacted:
Global retail and distribution operations, with
actions to mitigate risks in each market. Key supply
routes and ports may also be impacted but are yet
to be fully assessed.
Elements impacted: Operations.
Description: We maintain robust continuity planning and insurance programmes (including
self-insured policies).
Additionally, we incorporate climate change factors into the planning and design of new stores,
refurbishment projects and preventative maintenance programmes. For example, in certain
locations, we have implemented location-specific adaptations, such as painting store roofs white
to aid natural cooling.
Metrics: We assess progress in managing this risk through a Discounted Cash Flow at Risk metric
calculated through our scenario analysis (further details provided below).
Changes in raw material supply
Changes in the global climate will likely impact
the availability of high-quality supplies of certain
wood species. This may affect our future ability
to generate revenues from wood and
paper products.
Timeframe for most significant impact:
Long term (3+ years).
Geography and business areas impacted:
Global wood and paper supply chain.
Elements impacted: Products and services, supply chain adaptation.
Description: A resilient supply chain is key to our business and the achievement of our
strategic objectives.
We continually review key suppliers by category to establish capacity and volumes and assess
the impact of an interruption in supply. Our supplier strategy includes guidance on when to use
more than one supplier to increase resilience.
Metrics: We assess progress in managing this risk through a Discounted Cash Flow at Risk metric
calculated through our scenario analysis (further details provided below). We also assess this risk
through our metrics on responsible sourcing of wood and paper products (pages 20 to 21 of our
FY 2021/22 Performance Data Appendix*).
* Our Performance Data Appendix provides climate-related metrics for FY 2021/22 and historical periods and is available at www.kingfisher.com/dataappendix
Additional impacts of climate-related risks and
opportunities on our strategy and financial planning
[TCFD Strategy (b)]
The mitigation and adaptation measures identified above are
intended to build operational, regulatory, and supply chain
resilience to climate change.
Central to our approach to managing climate-related risks
and opportunities is our transition plan, centred on our science-
based emissions reduction targets (see Metrics and Targets
below). We have committed to achieving net zero scope 1 and 2
emissions by the end of 2040, ten years ahead of the UK
Government’s 2050 target. Our transition plan for achieving net
zero and our other emissions targets is set out in our FY 2021/22
Responsible Business Report (pages 23 to 30). We will continue
to expand our transition plan, with consideration to the
Transition Plan Taskforce’s Disclosure Framework and the
TCFD’s Guidance on Metrics, Targets, and Transition Plans.
We also recognise that we cannot manage our climate-related
risks and opportunities alone. In addition to the mitigation actions
described above, we continue to promote cross-sector climate
action through our support for the British Retail Consortium’s
Climate Action Roadmap, and as a founding member of the
UN Race to Zero Breakthroughs: Retail Campaign.
In addition to the measures outlined in Our climate-related
risks and opportunities table referenced above, we increasingly
consider the management of climate-related risks through our
existing financial planning processes, with capital investments
(such as the installation of low-carbon energy technologies),
anticipated revenues from our SHP, and executive remuneration.
Moving towards net zero in our properties
In 2022, we developed the detailed plans we need to guide our
progress across our stores and distribution centres. One key
action we’re taking is replacing gas and fossil fuel-based heating
systems with electric alternatives. We have now installed
all-electric heating using air source heat pumps (ASHP) in over
500 Screwfix stores and this is now standard specification for
new Screwfix stores in the UK & Ireland. We are also investing
across our banners in energy-saving projects, including the
installation of LED lighting, building energy management
systems and insulation and heating improvements.
30
Strategic Report Governance Financial Statements
Kingfisher 2022/23 Annual Report and Accounts
Our approach to climate scenario analysis [TCFD
Strategy (c)]
Scenario analysis is an important tool increasingly used to
assess the Group’s strategic and financial resilience to a
range of alternative, but plausible, climate futures.
To undertake detailed scenario analysis, we have worked with
a third-party provider to develop a digital twin model of our
business, which we can use to assess the financial impact
of various climate-related transition and physical risks
1
and
opportunities across our value chain. This analysis enables
us to stress-test our organisational and financial resilience
to climate change, and to develop effective mitigation plans.
Our scenario analysis considers the implications of a full range
of emissions trajectories and global average temperature
increases, each based on climate modelling used by the
Intergovernmental Panel on Climate Change, the Network for
Greening the Financial System, and the International Energy
Agency. Our reference scenarios, and the global impact of
climate risks under each, are as follows:
Global temperature
increase*
Scenario description
1.5°C Urgent global policy response delivering
net zero global emissions by 2050. Leads to
rapid shifts in energy generation, consumer
behaviours, and technological innovation.
Physical risk increases are limited, but
transition risks are high.
2°C – 3°C Implementation of current climate policies
and commitments, without further action
beyond this. Intermediate levels of physical
and transition risks in the short term, with
increasing physical risks over time.
>4°C No further global policy action is taken on
climate change and even current obligations
are not met. Emissions therefore continue
to grow. Physical risks grow significantly
over time, but transition risks are low.
* Average global surface temperature increase above pre-industrial levels
by 2100.
Our use of scenario analysis covers a five-year period, ensuring
that we consider all Kingfisher risk time horizons, including the
three-year assessment period for our Viability statement and
beyond (the Viability statement on page 60 models one scenario
which links to our climate change principal risk).
The three risks considered in our scenario analysis during FY
2021/22 (see Scenario analysis results) are modelled
independently, reflecting the complexity and uncertainty
associated with measuring the interconnectivity of risks.
Mitigating actions have not been considered within our
modelling, giving an assessment of gross risk. Assumptions
regarding business growth have been used to generate
a baseline view of the business for assessment of the
potential financial impacts of climate change.
1. Risks can be associated with the physical impacts of climate change (i.e. extreme weather events or long-term shifts in precipitation and temperatures), or
with the transition to a lower-carbon global economy (e.g. policy and legal actions, technology change, market responses, and reputational considerations).
The results of our analysis are reported to our Group Climate
Committee, to ensure cross-functional and Executive-level
decision-making on the management of climate-related risks
and opportunities.
Scenario analysis results
The financial impacts identified in the table below reflect the
estimated gross incremental impact, before mitigations, from
climate change on the Group’s discounted cash flows (DCF) over
the next five years. This allows comparison of different risks,
whether physical and transition, within a standard framework.
The impacts have been rated as ‘Low’, ‘Medium’ or ‘High’
to reflect the relative financial materiality of each risk under
each scenario. Impact on cumulative DCF is used as a proxy
for resilience. The impact thresholds have been determined
following consultation with investors and are therefore a helpful
proxy for resilience of our financial and strategic position.
Our scenario analysis results indicate that both transition
and physical climate-related risks could impact our financial
performance and position over the five-year time horizon
assessed, with low (<1% of DCF) to medium (1% to 5% of DCF)
severity. Increased costs from policy-driven carbon price
increases has a medium severity impact, with the most significant
financial impacts in our longer-term (3+ years) horizon.
Our scenario analysis results do not currently identify any
significant impacts on our business model over the time horizon
assessed, and therefore no changes in strategy are required
beyond those already being implemented to decarbonise our
business in line with limiting global temperature increases to
1.5°C, as described in our response to carbon pricing risk in
Our climate-related risks and opportunities table is on page 29.
We will continue to expand our use of scenario analysis to test
our resilience to climate-related risk, and to inform our strategic
and financial planning, in line with the TCFD recommendations.
The alignment of the scenarios discussed above, and the
assumptions and sensitivities identified in the table on page 32,
with our financial statements is described in note 3 of the
consolidated financial statements.
31Kingfisher 2022/23 Annual Report and Accounts
Our response to the Task Force on Climate-related Financial Disclosures continued
Our climate scenario analysis results
Climate-related risk/opportunity and key
modelling assumptions
Impact on 5-year cumulative DCF and implications for resilience
Carbon pricing
— Kingfisher’s emissions to increase in line with
2019-2021 growth rates
— All scope 1, 2, and upstream scope 3 emissions
are subjected to carbon pricing
— 100% of costs will be passed through to Kingfisher
from suppliers
— The global average carbon prices reached by the
end of our 5-year time horizon are:
— 1.5°C = USD 80 per tonne CO
2
e
— 2°C – 3°C = USD 60 – 20 per tonne CO
2
e
— >4°C – USD 2 per tonne CO
2
e
1.5°C 2-3°C >4°C
Medium Medium Low
Increases in carbon pricing globally could impact our operational costs (e.g. the purchase
of electricity, natural gas, and other fuels), and reduced demand for products if costs are
passed on to customers.
The greatest potential impact, however, could arise from our product supply chain, where
costs would most likely be passed on by vendors. The higher the carbon price, the greater
the likely impact on our DCF.
Facilities disruption and damage
— Our analysis is based on our current
operational footprint
— Any adaptation measures, such as flood protection,
employed across our estate have not been
accounted for
— Financial impacts from this risk cannot be passed
on to customers
1.5°C 2-3°C >4°C
Low Low Low
The DCF impacts from physical climate hazards on our own facilities and operations
are likely to be relatively low under each of our scenarios within a 5-year time horizon.
Lost revenues from disruption caused by heatwaves could have the greatest potential
DCF impact under all scenarios. Some ‘positive’ impacts could be seen through reduced
risks from freezing, flooding, and windstorms.
Longer-term analysis shows that the reduction in 5-year cumulative DCF from facilities
disruption and damage could be more than 20% greater (under a >4°C scenario) by 2050
than by the end of our 5-year risk horizon.
Raw materials supply
— Yields of pine, spruce, and fir within Europe
assessed only
— Analysis considered impact on yields of changes
in local temperatures and precipitation levels only
— Solid wood purchases considered only
— Risk is a function of lost revenues, as each
scenario assumes we do not adapt our sourcing
strategy accordingly
1.5°C 2-3°C >4°C
Low Low Low
In aggregate the DCF impacts are projected to be small, over a 5-year time horizon,
relative to our policy risks.
Yields of pine and spruce are projected to increase under all scenarios, whilst yields of fir
are projected to decrease. Conversely, we would expect increased yields of spruce within
our Northern European sourcing regions across all scenarios.
Further analysis is required in FY 2023/24 to assess the potential impact of other climate
hazards (e.g. pests, disease, and wildfires), and on a greater proportion of our wood and
paper purchases (e.g. composites).
Risk management
Processes for identifying and assessing climate-related
risks [TCFD Risk Management (a, c)]
The identification, assessment and management of climate-
related risks are fully integrated into Kingfisher’s overall
risk management framework. This means that all risks and
opportunities across the Group are assessed on their likelihood
of occurrence (within a 3 year outlook), and their potential
financial, legal, business continuity, and/or reputational impact.
Using five different impact levels, and five different likelihoods,
enables us to plot each risk on a 5 x 5 matrix. The combination
of the impact and likelihood levels on the matrix determines
the overall risk severity level (low, medium, high, critical) for
each risk. Each risk is assessed on a gross and net risk basis.
Our Group-level climate-related risks and opportunities,
including existing and emerging regulatory requirements related
to climate change, are identified and assessed as part of our
annual review of our Group Responsible Business risk register.
In FY 2022/23, climate change was elevated to a principal risk.
A full description of our principal risks, setting out their link to
Kingfisher’s strategic priorities and how principal risks are
assessed, can be found on pages 51 to 58.
Kingfisher’s processes for managing climate-related risks
[TCFD Risk Management (b)]
Each retail banner and Group function is responsible for
putting appropriate actions, controls and procedures in place
to manage and monitor their identified risks and to verify that
the controls operate effectively.
Efforts are made to manage all climate-related risks and
opportunities which have been included within our Group
Responsible Business risk register, irrespective of risk
severity level. This approach reflects the inherent uncertainty
in how climate-related risks and opportunities may impact
our business in the future. Our use of scenario analysis is
our primary mechanism for understanding this uncertainty.
Our approach to managing each identified climate-related risk
and opportunity is included in the table on pages 29 to 30.
More detail on our risk management approach is on pages 51 and 52.
Low
<1% of DCF
Medium
1%-5% of DCF
High
> 5% of DCF
Key
Potential impact on Kingfisher’s cumulative DCF over five years,
assuming no mitigating actions are taken:
32
Strategic Report Governance Financial Statements
Kingfisher 2022/23 Annual Report and Accounts
Metrics and targets
We continually review our climate change metrics and targets
to ensure that we are providing the information the business and
our stakeholders need to effectively monitor our performance
and drive progress.
Metrics for assessing climate-related risks and
opportunities [TCFD Metrics and Targets (a)]
We have several metrics in place to assess and monitor the
most significant risks and opportunities arising from climate
change, detailed in the table on pages 29 to 30.
Our metrics have been developed with consideration of the
cross-industry, climate-related metric categories described
in the TCFD implementation guidance table A2.1. We currently
only calculate the TCFD-recommend metrics most relevant
to our business and the climate-related risks and opportunities
identified in the table on pages 29 to 30. We do not currently use
an internal carbon price.
Executive remuneration
Our new Remuneration Policy applicable to the executive
directors was approved at the 2022 AGM. It includes the
Kingfisher Performance Share Plan for our senior leadership
population, in which Responsible Business measures form part
of the performance conditions which determine the vesting of
the plan. This currently includes scope 1 and scope 2 greenhouse
gas emissions reduction targets, which are aligned to our
science-based targets detailed below. More detail is provided
on pages 96 and 97.
Revolving credit facility
In FY 2021/22 we agreed a £550 million three-year revolving
credit facility with a group of our relationship banks. The facility
includes specific targets which are aligned with the Group’s
Responsible Business plan and will benefit from a lower interest
rate if we deliver against these targets. These targets include
the ongoing delivery of our FY 2025/26 science-based target
for scope 1 and 2 emissions.
External benchmarks
We monitor performance on climate change in external
benchmarks, including the CDP Climate Change disclosure
initiative. In FY 2022/23 our disclosure score increased to
A (FY 2021/22: A-), one of just 296 companies to achieve
this score globally.
Our greenhouse gas emissions and energy use data [TCFD Metrics and Targets (b)]
2022/23 2021/22
Unit Global* UK only
Global
(excl UK) Global UK only
Global
(excl UK)
% change
(global)
Scope 1 tCO
2
e 130,642 85,215 45,427 153,133 98,541 54,592 -14.7%
Scope 2 – location-based tCO
2
e 95,870 32,667 63,203 105,056 37,570 67,486 -8.7%
Scope 2 – market-based tCO
2
e 3,536 642 2,894 61,122 731 60,391 -94.2%
Total scope 1 and 2 – location-based tCO
2
e 226,512 117,882 108,630 258,189 136,110 122,079 -12.3%
Total scope 1 and 2 – market-based tCO
2
e 134,178 85,857 48,321 214,255 99,271 114,984 -37.4%
Carbon footprint (market-based)
per m
2
of floor space kgCO
2
e/m
2
17.1 24.3 11.2 27.9 28.2 27.6 -38.7%
Total energy consumption GWh 1,111 633 478 1,230 692 538 -9.6%
Total energy intensity kWh/m
2
142 180 111 160 197 129 -11.5%
Five year performance and baseline
Unit 2022/23 2021/22 2020/21 2019/20 2018/19
2016/17
baseline
% change
against
baseline
Total energy consumption GWh 1,111 1,230 1,139 1,193 1,274 1,284 -13.4%
Total scope 1 and 2 – market-based tCO
2
e 134,178 214,255 205,767 228,146 232,842 283,696 -52.7%
Carbon footprint (market-based)
per m
2
of floor space kgCO
2
e/m
2
17.1 27.9 26.7 29.6 30.3 37.8 -54.8%
Our GHG emissions have been calculated using the UK Government (Defra) and International Energy Agency (IEA) emissions factors. Our data covers our material
scope 1 and 2 impacts: emissions from property energy use and dedicated delivery fleets. We use the market-based method for calculating scope 2 emissions to
account for our efforts in generating and purchasing low-carbon energy. We also publish our location-based emissions. We report on an ‘operational control’ basis,
meaning that the data covers Kingfisher’s retail banners where we have the full authority to introduce and implement operating policies. Emissions from our
Koçtaş joint venture are reported under our scope 3 emissions (category investments). Our data methodology document contains details on our greenhouse
gas emissions and energy calculations and is available at www.kingfisher.com/datamethodology.
In line with the SECR (Streamlined Energy and Carbon Reporting) requirements, we now report our emissions and energy use split between the UK and other
countries. UK emissions account for 64.0% of global market-based emissions and UK energy use accounts for 57.0% of total energy use. Carbon footprint and
energy intensity calculations are based on total floor area of occupied properties. 7,846,756 m
2
in FY 22/23). This is because a significant component of our direct
environmental impact derives from our property portfolio.
* Our GHG and energy use data is subject to annual independent assurance (International Standard on Assurance Engagements (ISAE) 3000 limited assurance).
The assurance statement with details on the scope and conclusion of the work will be published in the Responsible Business report in June 2023.
33Kingfisher 2022/23 Annual Report and Accounts
Our response to the Task Force on Climate-related Financial Disclosures continued
Improving energy efficiency
We continued to improve energy efficiency in our operations
through our roll out of LED lighting, the introduction of building
energy management systems across our stores, our energy
efficient design blueprints for new stores and investing in
insulation and efficient heating and cooling systems. We have
switched to all-electric heating at over 500 stores by installing
air source heat pumps and invested in on-site renewables such
as biomass boilers and PV panels. We have three-year energy
reduction plans for each banner.
Since FY 16/17 our energy intensity has decreased by 17.0%.
Our overall energy consumption in FY 22/23 decreased year on
year by 9.6% in part due to operational measures to conserve
energy in line with broader European energy conservation
efforts and has reduced by 13.4% since our baseline of FY 16/17.
We purchase electricity from zero carbon and renewable
sources, supported by Renewable Energy Certificates for
all our markets.
Targets for managing climate-related risks and
opportunities [TCFD Metrics and Targets (c)]
We use several climate-related targets for managing climate-
related risks and opportunities identified in the table on pages 29
to 30.
Our targets have been developed with consideration to the
cross-industry, climate-related metric categories described
in the TCFD implementation guidance table A2.1. The targets
described below have been established as they are most
relevant to our business and the management of our material
climate-related risks and opportunities.
Our science-based emissions reduction targets
Related risks/opportunities: market changes, energy and fuel
costs, carbon pricing (see the table on pages 29 to 30).
Each of our emissions reduction targets are aligned with the
relevant methodologies of the Science Based Targets initiative
(SBTi), with our near-term targets (for FY 2025/26) validated
by the SBTi as being aligned with limiting global temperature
increases to 1.5°C.
Each of our targets have been developed in line with our
operational control reporting boundary, meaning that we
assess 100% of emissions from Kingfisher’s retail banners
where we have the full authority to introduce and implement
operating policies.
We do not currently use carbon offsets to claim progress
against any of our emissions reduction targets. In line with the
SBTi’s definition of net zero, we acknowledge that we will be
required to neutralise any residual emissions by permanently
removing an equivalent volume of CO
2
e, once we have achieved
a scale of value chain emissions reductions consistent with the
depth of abatement at the point of reaching global net zero in
1.5°C pathways.
Our Sustainable Home Product and responsible
sourcing targets
Related risks/opportunities: market changes, raw materials
supply (see the table on pages 29 and 30).
We use targets for the proportion of sales from our Sustainable
Home Products, and for responsibly sourced wood and paper
for our products and catalogues, to manage the identified risks
from market changes and raw materials supply. Our targets, and
our FY 2022/23 performance against these, are detailed on
page 24. Further details are provided on page 20 (responsibly
sourced wood and paper) and pages 27 to 29 (sales from our
Sustainable Home Products) of our FY 2021/22 Performance
Data Appendix.
KPIs used to monitor progress against targets
We have begun to fully incorporate our net zero commitment
into our retail banners’ Long Term Financial Plans and have
established KPIs to measure preparedness for and progress
towards net zero. For example, we track the percentage of
projected electricity consumption covered by long-term
renewable electricity contracts. We plan to disclose further
information on the KPIs we use to monitor progress against
our targets in future disclosures.
34
Strategic Report Governance Financial Statements
Kingfisher 2022/23 Annual Report and Accounts
Our science-based emissions targets
Our carbon emissions (scope 1 and 2 market-based)
thousand tonnes CO
2
e from property and transport
Ta r g et
2016/17
Baseline
2021/22 2022/23 2025/262020/212019/202018/19
283.7
232.8
228.1
205.8
214.3
176.0
134.2
Scope 1 and 2
Reduce our absolute greenhouse gas emissions from our direct
operations by 37.8% by FY 25/26 compared with a FY 16/17
baseline, and reach net zero by the end of FY 40/41.
Performance: On track
We have reduced our emissions by 52.7% since FY 2016/17. During
the last year we reduced our emissions by 37.4% year on year due to
continued investment into renewable electricity purchases, energy
efficiency measures, and lower carbon fuels (such as hydrotreated
vegetable oil) across our fleets.
We continue to exceed the requirements of our scope 1 and 2
science-based emissions reduction target, ensuring that we continue
to play our part in limiting global temperature increases to 1.5°C.
Our scope 1 and 2 targets include all purchased fuels and electricity
for consumption within our owned or controlled assets, constituting
>95% of our scope 1 and 2 base year emissions.
Scope 3
Achieve a 40% reduction (per million pounds (£) turnover) in
emissions from purchased goods and services and use of sold
products by FY 25/26 compared with FY 17/18.
Our scope 3 emissions represent around 99% of our total carbon
footprint, and are therefore highly material to our management
of climate-related risks and opportunities. Our scope 3 intensity-
based target includes two thirds of our total base year scope 3
emissions. As of FY 21/22 we had reduced such emissions by 19.7%.
We will report the latest progress against our scope 3 target in our
FY 2022/23 Responsible Business Report (published in June). For our
most recently published scope 3 data, prepared in line with relevant
GHG Protocol standards and disaggregated by all relevant scope 3
categories, please see our FY 2021/22 Performance Data Appendix.
35Kingfisher 2022/23 Annual Report and Accounts
Non-financial information statement
The table below sets out where stakeholders can find information in our Strategic Report that relates to non-financial matters,
as required by 414CA and 414CB of the Companies Act 2006.
Reporting
requirement
Our approach Relevant policies Where to find more
information
Page
Environmental
matters
We will become Forest Positive by creating
more forests than we use, and investing in forest
projects. We will help tackle climate change by
reducing carbon emissions from our business,
products and supply chains.
— Environmental Policy
— Forest Positive Policy
— Sustainable
Packaging Policy
— Chemicals Policy
— Our strategy
— Performance against priorities
— Key Performance Indicators
— Supplier engagement
— Responsible Business priorities
— TCFD disclosures
— Climate change risk
— Responsible Business
Committee Report
6
8
10
20
23
27
58
71
Employees
We will become an inclusive company, by
breaking down barriers to employment and
progression and building skills for life.
— Equal opportunities
Policy
— Diversity Policy
— Code of Conduct
— Our strategy
— Performance against priorities
— Key Performance Indicators
— People and culture
— Colleague engagement
— Responsible Business priorities
— Principal risks – Our People
— Responsible Business
Committee Report
6
8
10
14
18
23
53
71
Human rights
We aim to understand and address human rights
risks in our business and we work with suppliers
across the world to bring our customers great
products at great prices, without compromising
on our ethical standards.
— Human Rights Policy
— Supply Chain Workplace
Standards
— Supplier engagement
— Responsible Business priorities
— Responsible sourcing and
human rights
— Risks – Reputation and Trust
— Responsible Business
Committee Report
20
23
25
57
71
Social matters
We will donate our products, expertise and
time to help people whose housing needs
are greatest in the communities we serve.
— Community Policy — Performance against priorities
— Key Performance Indicators
— Section 172(1) statement
— Community and
NGO engagement
— Responsible Business priorities
— Responsible Business
Committee Report
8
10
16
21
23
71
Anti-bribery and
corruption
We are committed to acting professionally,
fairly and with integrity in all our business
dealings and relationships wherever we operate.
That includes assessing risks, and implementing
and enforcing effective systems to counter
fraud, bribery and corrupt business practices.
— Anti-Bribery and
Corruption Policy
— Gifts and
Hospitality Policy
— Supplier engagement
— Responsible Business – Ethical
conduct
— Principal risks –
Supply Chain Resilience,
Legal and Regulatory,
Reputation and Trust
— Audit Committee report –
Internal Audit
20
26
54, 57
76
Description of
business model
— Business model 12
Non-financial KPIs
— Key Performance Indicators 10
Principal risks and
uncertainties
— Risk management
— Principal risks
51
53
36
Strategic Report Governance Financial Statements
Kingfisher 2022/23 Annual Report and Accounts
In line with the requirements of LR 9.8.6R(8), Kingfisher plc considers our disclosure of climate-related financial information (see the
table on page 38 for locations) to be sufficient to be consistent with the TCFD recommendations and recommended disclosures for
the current year, as well as the FRC’s CRR Thematic review of TCFD disclosures and climate in the financial statements, except for
the following matters:
Disclosure not provided in full Explanation Expected timeframe for compliance
[TCFD Strategy (a)] Description of climate-
related risks and opportunities by geography,
as appropriate.
Whilst some description of risks and
opportunities by geography is provided, the
time required to collect sufficiently granular data
to enable detailed analysis of climate-related
impacts by geography has prevented a
fuller description.
We will extend our assessment of climate-
related risks and opportunities in FY 2023/24,
allowing for a fuller disclosure in our FY 2023/24
annual report and accounts.
[TCFD Metrics and Targets (a)] Provision of key
metrics used to measure and manage climate-
related risks and opportunities in relation
to capital deployment and the amount or
percentage of physical and transition risks.
Further work is required to calculate metrics
specifically related to capital deployment
and the amount or percentage of physical and
transition risks, to provide consistency with the
cross-industry metric requirements described
in Table A2.1 of the TCFD Implementation
Guidance for All Sectors.
We will look to further develop relevant metrics
for measuring and managing climate-related
risks and opportunities in FY 2023/24, allowing
for a fuller disclosure in our FY 2023/24 annual
report and accounts.
[TCFD Metrics and Targets (c)] Description of
the key performance indicators used to assess
progress against targets.
Additional work is required to finalise and expand
the use of relevant KPIs across Kingfisher
before disclosing publicly.
We will look to disclose key performance
indicators used to assess progress against
targets in our FY 23/24 annual report
and accounts.
The following recommendations have been deemed not relevant for inclusion within our disclosures, as they do not currently apply
to Kingfisher:
— [TCFD Strategy (b)] Discussion of how identified climate-related issues have impacted our businesses, strategy, and financial
planning, in relation to acquisitions or divestments.
— [TCFD Metrics and Targets (a)] Provision of internal carbon price.
A description of the external assurance of our climate-related financial disclosures can be found in the Independent auditor’s report
to the members of Kingfisher plc on page 112. In addition, our GHG and energy use data is subject to annual independent assurance
(ISAE 3000 limited assurance). The assurance statement with details on the scope and conclusion of the work will be published in our
2022/23 Responsible Business Report in June.
37Kingfisher 2022/23 Annual Report and Accounts
The table below provides a reference to where our TCFD disclosures can be found.
Topic Disclosure
summary
Disclosures Kingfisher response
Governance
Disclose the
organisation’s
governance around
climate-related risks
and opportunities.
a. Describe the Board’s oversight of climate-
related risks and opportunities.
TCFD: page 27
TCFD: page 28
Principal risks: page 51
Kingfisher CDP Climate Change 2022
b. Describe management’s role in assessing
and managing climate-related risks
and opportunities.
TCFD: page 28
Principal risks: page 51
Kingfisher CDP Climate Change 2022
Strategy
Disclose the actual and
potential impacts of
climate-related risks
and opportunities on
the organisation’s
businesses, strategy
and financial planning.
a. Describe the climate-related risks and
opportunities the organisation has identified
over the short, medium and long term.
TCFD: page 28
Kingfisher CDP Climate Change 2022
b. Describe the impact of climate-related risks and
opportunities on the organisation’s business,
strategy, and financial planning.
TCFD: page 28
Principal risks: page 58
Kingfisher CDP Climate Change 2022
c. Describe the resilience of the organisation’s
strategy, taking into consideration different
climate-related scenarios, including a 2°C
or lower scenario.
TCFD: page 31
Kingfisher CDP Climate Change 2022
Risk
management
Disclose how the
organisation identifies,
assesses, and manages
climate-related risks.
a. Describe the organisation’s processes for
identifying and assessing climate-related risks.
TCFD: page 32
Principal risks: page 51
Kingfisher CDP Climate Change 2022
b. Describe the organisation’s processes for
managing climate-related risks.
TCFD: page 32
Principal risks: page 58
Kingfisher CDP Climate Change 2022
c. Describe how processes for identifying,
assessing, and managing climate-related risks
are integrated into the organisation’s overall
risk management.
TCFD: page 32
Kingfisher CDP Climate Change 2022
Metrics and
Targets
Disclose the metrics
and targets used to
assess and manage
relevant climate-related
risks and opportunities.
a. Disclose the metrics used by the
organisation to assess climate-related risks
and opportunities in line with its strategy
and risk management process.
TCFD: page 33
Responsible Business Report 2021/22
Performance Data Appendix 2021/22
Kingfisher CDP Climate Change 2022
b. Disclose scope 1, scope 2, and if appropriate,
scope 3 greenhouse gas (GHG) emissions,
and the related risks.
TCFD: page 33
Responsible Business Report 2021/22
Performance Data Appendix 2021/22
Kingfisher CDP Climate Change 2022
c. Describe the targets used by the
organisation to manage climate-related
risks and opportunities and performance
against targets.
TCFD: page 34
Responsible Business Report 2021/22
Performance Data Appendix 2021/22
Kingfisher CDP Climate Change 2022
Responsible Business Report 2021/22: http://www.kingfisher.com/responsible-business-report
Performance Data Appendix 2021/22: www.kingfisher.com/dataappendix
Kingfisher CDP Climate Change 2022: www.kingfisher.com/CDPclimatechange2022
Note that information within our Responsible Business Report and Performance Data Appendix covers a different time period
(FY 2021/22) to the climate-related financial disclosures presented in this report, but we believe it is helpful to cross-reference
to these earlier reports, given the more extensive disclosures they provide for certain TCFD recommendations.
TCFD index
38
Strategic Report Governance Financial Statements
Kingfisher 2022/23 Annual Report and Accounts
Financial review
Sales
Total sales decreased by 0.7% on a constant currency basis,
to £13,059 million, reflecting resilient sales across both retail
and trade channels despite strong prior year comparatives.
Sales were lower in the UK & Ireland and France, substantially
offset by sales growth in Poland, Iberia and Romania. On a
reported basis, which includes the impact of exchange
rates, total sales decreased by 0.9%.
Like-for-like sales
Like-for-like (LFL) sales decreased by 2.1%, which excludes
the sales impact from a net increase in space of +1.4%, driven by
store openings by Screwfix in the UK & Ireland, and Castorama
in Poland. During the year, we opened 101 new stores (including
77 stores in the UK, 10 in Ireland, seven in France including five
Screwfix stores, and seven in Poland) and closed one store in
the UK and two in Romania.
Gross margin
Gross margin % decreased by 70 basis points on a constant
currency basis, reflecting mix impacts, ‘normalised’ promotional
activity in H1, and one-off logistics spend in H1 to secure/
manage seasonal and ‘buffer’ stock. Mix impacts are the result of
a lower year-on-year share (versus other banners) of B&Q’s
higher gross margin % revenues given very strong prior year
sales, and unfavourable category mix between lower-margin
building & joinery and EPHC (electricals, plumbing, heating &
cooling) and higher margin surfaces & décor categories. On a
reported basis, gross margin % also decreased by 70 basis points.
Group gross profit decreased by 2.6% in constant currency.
Retail profit
In constant currency, retail profit decreased by 19.2%, largely
reflecting strong prior year comparatives in the UK & Ireland
and France, and losses incurred in ‘Other’ operations. This was
partially offset by retail profit growth in Poland. On a reported
basis, retail profit decreased by 19.7%. Operating costs
increased by 2.4% on a constant currency basis, largely
reflecting higher costs associated with space growth and new
store openings, higher technology spend, and operating cost
inflation including increases in pay rates and significantly higher
energy costs. Part of the year-on-year cost increase was also
the result of the reversal of one-off cost savings that were
achieved in the first half of the prior year due to Covid-related
restrictions in our markets (e.g. advertising, marketing and travel
costs). The increase in operating costs was partially offset
through flexing our staff costs and cost reductions achieved by
our strategic cost reduction programme. The Group’s retail
profit margin % decreased by 160 basis points to 7.1% (FY 21/22:
8.7%; FY 19/20: 6.8%).
A summary of the reported financial results for the 12 months ended 31 January 2023 is set out below.
Financial summary
% Total change % Total change % LFL change
2022/23 2021/22 Reported Constant currency Constant currency
Sales £13,059m £13,183m (0.9)% (0.7)% (2.1)%
Gross profit £4,795m £4,935m (2.8)% (2.6)%
Gross margin % 36.7% 37.4% (70)bps (70)bps
Operating profit £723m £1,144m (36.7)%
Statutory pre-tax profit £611m £1,007m (39.3)%
Statutory post-tax profit £471m £843m (44.1)%
Statutory basic EPS 23.8p 40.3p (40.9)%
Net decrease in cash
1
£(555)m £(237)m n/a
Total dividend
2
12.40p 12.40p –
Adjusted metrics
Retail profit £923m £1,148m (19.7)% (19.2)%
Retail profit margin % 7.1% 8.7% (160)bps (160)bps
Adjusted pre-tax profit £758m £949m (20.2)%
Adjusted pre-tax profit margin % 5.8% 7.2% (140)bps
Adjusted post-tax profit £589m £737m (20.2)%
Adjusted basic EPS 29.7p 35.2p (15.6)%
Free cash flow £(40)m £385m n/a
Net debt
3
£(2,274)m £(1,572)m n/a
1. Net decrease in cash and cash equivalents and bank overdrafts.
2. The Board has proposed a final dividend per share of 8.60p (FY 21/22 final dividend: 8.60p), resulting in a proposed total dividend per share of 12.40p in respect
of FY 22/23 (FY 21/22: 12.40p). The final dividend is subject to the approval of shareholders at the Annual General Meeting on 27 June 2023.
3. Net debt includes £2,444 million lease liabilities under IFRS 16 in FY 22/23 (FY 21/22: £2,376 million).
39Kingfisher 2022/23 Annual Report and Accounts
Financial review continued
Adjusted pre-tax profit
Adjusted pre-tax profit decreased by 20.2% to £758 million (FY 21/22: £949 million; FY 19/20: £544 million), reflecting lower retail profit,
partially offset by lower net finance costs. Adjusted pre-tax profit margin % decreased by 140 basis points to 5.8% (FY 21/22: 7.2%;
FY 19/20: 4.7%).
Statutory pre-tax profit
Statutory pre-tax profit, which includes adjusting items, decreased by 39.3% to £611 million. This reflects lower operating profit,
including the impact of impairments (see below).
A reconciliation from the adjusted basis to the statutory basis for pre-tax profit is set out below:
2022/23
£m
2021/22
£m
Increase/
(decrease)
Retail profit (constant currency) 923 1,142 (19.2)%
Impact of exchange rates – 6 n/a
Retail profit (reported) 923 1,148 (19.7)%
Central costs (49) (60) n/a
Share of interest and tax of joint ventures & associates (4) (2) n/a
Net finance costs (112) (137) n/a
Adjusted pre-tax profit 758 949 (20.2)%
Adjusting items before tax (147) 58 n/a
Statutory pre-tax profit 611 1,007 (39.3)%
Net finance costs of £112 million (FY 21/22: £137 million) consist principally of interest on IFRS 16 lease liabilities. The year-on-year
decrease was due to lower interest on lease liabilities and higher interest income.
Adjusting items after tax were a total charge of £118 million (FY 21/22: gain of £106 million), as detailed below:
2022/23
Gain/(charge)
£m
2021/22
Gain/(charge)
£m
Net store asset impairment (charges)/reversals (139) 33
Romania goodwill impairment (16) –
Release of Castorama Russia disposal warranty liability 4 –
Release of France and other restructuring provisions 3 9
Property gains 1 3
Commercial operating model restructuring – 4
Release of France uncertain operating tax position – 9
Adjusting items before tax (147) 58
Prior year and other adjusting tax items 29 48
Adjusting items after tax (118) 106
In consideration of the significant increase in discount rates resulting from high levels of inflation and wider macroeconomic
uncertainty, the Group has undertaken a full impairment review of its stores. The significant increase in discount rates, combined
with revised financial projections, has resulted in the recognition of £139 million of net store asset impairments in the year. These
have been recorded principally in the UK and France.
An impairment charge of £16 million has been recorded relating to the remaining goodwill in Romania, principally driven by the
significant increase in discount rates and revised financial projections.
A £4 million liability that was held in relation to warranties as part of the Castorama Russia disposal in 2020 was released in the year
following the expiry of the warranty claims period.
Other adjusting items include a £3 million gain arising due to savings on costs relating to legacy store closure programmes in France, as
compared with the original restructuring provisions recognised. A gain of £1 million was recorded on the exit of one property in the UK.
40
Strategic Report Governance Financial Statements
Kingfisher 2022/23 Annual Report and Accounts
Taxation
The Group’s adjusted effective tax rate (ETR) is sensitive to the blend of tax rates and profits in the Group’s various jurisdictions. It is
higher than the UK statutory rate because of the amount of Group profit that is earned in higher tax jurisdictions. The adjusted ETR,
calculated on profit before adjusting items, prior year tax adjustments and the impact of future rate changes, is 22% (FY 21/22: 22%).
The adjusted ETR is consistent with the prior year rate with small increases relating to the impact of increased losses in territories in
which tax credits are not recognised, and a higher share of profits in France; offset by reductions for the fall in French corporate
income tax rate.
The statutory effective tax rate includes the impact of adjusting items (including prior year tax items). The impact of these result in a
statutory effective tax rate of 23%.
Pre-tax profit
£m
Tax
£m
2022/23
%
Pre-tax profit
£m
Tax
£m
2021/22
%
Adjusted effective tax rate 758 (169) 22% 949 (212) 22%
Adjusting items (147) 29 58 48
Statutory effective tax rate 611 (140) 23% 1,007 (164) 16%
On 8 June 2022, the General Court of the European Union dismissed several of the appeals, including the UK Government’s, to annul
the European Commission’s 2019 state aid decision concerning the UK’s controlled foreign company tax rules. This decision has been
appealed to the European Court of Justice.
In FY 21/22, Kingfisher paid £64 million (including interest) to HM Revenue & Customs in relation to the state aid decision. The Group
continues to recognise this amount as a non-current tax asset based on its assessment that its appeal will ultimately be successful.
Refer to note 35 of the consolidated financial statements.
In February 2022, a payment of €40 million (c. £34 million) was made to the French tax authorities relating to a historic tax liability.
This amount was fully provided for in prior periods.
The statutory tax rates applicable to this financial year and the expected statutory tax rates for next year in our main jurisdictions are
as follows:
2023/24
Statutory tax rate
2022/23
Statutory tax rate
UK 24% 19%
France 26% 26%
Poland 19% 19%
Adjusted basic earnings per share decreased by 15.6% to 29.7p (FY 21/22: 35.2p), which excludes the impact of adjusting items.
Basic earnings per share decreased by 40.9% to 23.8p (FY 21/22: 40.3p) as set out below:
Earnings*
£m
2022/23
EPS
pence
Earnings*
£m
2021/22
EPS
pence
Adjusted basic earnings per share 589 29.7 737 35.2
Adjusting items before tax (147) (7.4) 58 2.8
Prior year and other adjusting tax items 29 1.5 48 2.3
Basic earnings per share 471 23.8 843 40.3
* Earnings figures presented reconcile adjusted post-tax profits to statutory post-tax profits.
41Kingfisher 2022/23 Annual Report and Accounts
Financial review continued
Tax contribution
Kingfisher makes a significant economic contribution to the
countries in which it operates. In 2022/23 it contributed £2.3
billion in taxes it both pays and collects for these governments.
The Group pays tax on its profits, its properties, in employing
82,000 people, in environmental levies, in customs duties and
levies as well as other local taxes. The most significant taxes
it collects for governments are the sales taxes charged to its
customers on their purchases (VAT) and employee payroll-related
taxes. Taxes paid and collected together represent Kingfisher’s
total tax contribution which is shown below:
Total taxes paid as a result of Group operations
2022/23
£bn
2021/22*
£bn
Taxes borne 0.8 0.8
Taxes collected 1.5 1.6
Total tax contribution 2.3 2.4
* 2021/22 comparatives are presented on a constant currency basis.
Both current and prior year figures exclude the tax contribution of
discontinued operations.
Kingfisher participates in the Total Tax Contribution survey that
PwC perform for the Hundred Group of Finance Directors. The
2022 survey ranked Kingfisher 23rd (2021: 23rd) for its Total Tax
Contribution in the UK. In 2022, 95 (2021: 95) companies
contributed to the survey.
Taxation governance and risk management
The Kingfisher Code of Conduct applies high standards of
transparency, honesty and fairness to our employees and
suppliers. The Code requires that we carry out our work
ethically and in compliance with the law. We have a zero-
tolerance approach to tax evasion and the facilitation of tax
evasion. These principles underpin our approach to tax. Our
core tax objectives are to pay the right amount of tax at the
right time and to comply with all relevant tax legislation in all
Group entities. Kingfisher undertakes its activities and pays tax
in the countries in which it operates in compliance with the local
and worldwide tax rules. These tax objectives are met through
the application of the Group Tax Standards and the published
Kingfisher Tax Strategy, which are Board approved, as well as
other relevant Group policies and standards, which document
our approach to tax compliance, tax risk management and tax
planning to ensure that consistent minimum standards are
observed throughout the Group.
The responsibility for tax policy and management of tax risks lies
with the Chief Financial Officer and the Group Tax Director who
engage regularly with the Board and the Audit Committee on all
tax matters.
Tax risks can arise from changes in law, differences in
interpretation of law and the failure to comply with the
applicable rules and procedures. The Group seeks to take a
balanced approach to tax risk having regard to the interests
of all stakeholders including investors, customers, staff and
the governments and communities in the countries in which it
operates. As a multinational group, operating in an increasingly
complex and changing international corporate tax environment,
some risk is unavoidable.
Kingfisher manages and controls this risk through local
management, the tax specialists that it employs and agile
monitoring of changes in law and interpretation of law. The
Group may engage with reputable professional firms on areas
of significant complexity, uncertainty or materiality, to support it
in complying with its Tax strategy. Group companies work within
a tax controls framework, and compliance with this is monitored
by the Internal Audit and Risk team.
The Group seeks to engage with tax authorities with
professionalism, honesty and respect. It works with all tax
authorities in a timely and constructive manner to resolve
disputes where they arise, although it is prepared to litigate
where this is not possible.
Dividends
The Board has proposed a final dividend per share of 8.60p
(FY 21/22 final dividend: 8.60p). Taken alongside the interim
dividend already paid of 3.80p (FY 21/22 interim dividend: 3.80p),
this results in a proposed total dividend per share of 12.40p in
respect of FY 22/23 (FY 21/22: 12.40p). The final dividend is
subject to shareholder approval at the Annual General Meeting
on 27 June 2023, and if approved will be paid on 3 July 2023 to
shareholders on the register at close of business on 26 May
2023. The shares will go ex-dividend on 25 May 2023.
A dividend reinvestment plan (DRIP) is available to shareholders
who would prefer to reinvest their dividends in the Company’s
shares. The last date for receipt of DRIP elections is 12 June 2023.
42
Strategic Report Governance Financial Statements
Kingfisher 2022/23 Annual Report and Accounts
Management of balance sheet and liquidity
risk and financing
Management of cash and debt facilities
Kingfisher regularly reviews the level of cash and debt facilities
required to fund its activities. This involves preparing a prudent
cash flow forecast for the medium term, determining the level
of debt facilities required to fund the business, planning for
repayment of debt at its maturity, and identifying an appropriate
amount of headroom to provide a reserve against unexpected
outflows and/or unexpected impacts to cash inflows. To retain
financial flexibility, we aim to maintain strong liquidity headroom
(including cash and cash equivalents, and committed debt
facilities), which is currently set at a minimum of £800m.
Net debt to EBITDA
As of 31 January 2023, the Group had £2.3 billion (FY 21/22: £1.6
billion) of net debt on its balance sheet including £2.4 billion (FY
21/22: £2.4 billion) of total lease liabilities.
The ratio of the Group’s net debt to EBITDA was 1.6 times as of
31 January 2023 (1.0 times as of 31 January 2022). At this level,
the Group has financial flexibility whilst retaining an efficient
cost of capital.
The Group’s maximum net debt to EBITDA is 2.0 times over the
medium term.
Net debt to EBITDA is set out below:
2022/23
£m
2021/22
£m
Retail profit 923 1,148
Central costs (49) (60)
Depreciation and amortisation 582 555
EBITDA 1,456 1,643
Net debt 2,274 1,572
Net debt to EBITDA 1.6 1.0
Credit ratings
Kingfisher holds a BBB credit rating with Fitch, (P) Baa2 rating
with Moody’s, and a BBB rating with Standard and Poor’s. The
Outlook is Stable across all three agencies.
Revolving credit facility
The Group has a £550 million revolving credit facility (RCF)
agreement in place with a group of its relationship banks, linked
to sustainability and community-based targets, which expires
in May 2025. As of 31 January 2023, this RCF was undrawn.
Term loans
In FY 21/22, the Group repaid its €50 million and £50 million fixed
term loans at maturity in September 2021 and December 2021
respectively. During FY 22/23, the Group entered into two new
fixed term loans: £50 million maturing in December 2024 and
£50 million maturing in January 2025, with the latter linked to the
Group’s sustainability and community-based targets.
Covenants
The terms of the committed RCF and both term loans require
that the ratio of Group operating profit (excluding adjusting
items) to net interest payable (excluding interest on IFRS 16
lease liabilities) must be no less than 3:1 for the preceding 12
months as at the half and full year-ends. As of 31 January
2023, Kingfisher was in compliance with this requirement.
Total liquidity
As of 31 January 2023, the Group had access to over £800
million in total liquidity, including cash and cash equivalents of
£270 million and access to a £550 million RCF. Further detail on
Kingfisher’s debt and facilities can be found at www.kingfisher.com
43Kingfisher 2022/23 Annual Report and Accounts
Financial review continued
Free cash flow
A reconciliation of free cash flow is set out below:
2022/23
£m
2021/22
£m
Operating profit 723 1,144
Adjusting items 147 (58)
Operating profit (before adjusting items) 870 1,086
Other non-cash items
1
612 595
Change in working capital (469) (215)
Pensions and provisions (20) (31)
Net rent paid (454) (480)
Operating cash flow 539 955
Net interest paid – (4)
Tax paid (130) (169)
Gross capital expenditure (449) (397)
Free cash flow (40) 385
Ordinary dividends paid (246) (254)
Share buybacks (337) (157)
Share purchase for employee incentive schemes (9) (29)
Disposal of Castorama Russia 8 7
French tax authority payment
2
(34) –
Other tax authority payment
3
– (64)
Disposal of assets and other
4
4 (28)
Net cash flow (654) (140)
Opening net debt (1,572) (1,394)
Movements in lease liabilities (41) 7
Other movement including foreign exchange (7) (45)
Closing net debt (2,274) (1,572)
1. Includes principally depreciation and amortisation, share-based compensation charge and pension operating cost.
2. Payments made in relation to French tax authority settlement (refer to the Taxation section above for further details).
3. Payments made in relation to the EC state aid challenge (refer to the Taxation section above for further details).
4. Includes proceeds from the issue of new shares, dividends from joint ventures and associates, and disposal of assets; partially offset by adjusting cash flow
items (principally comprising restructuring costs).
Operating profit (before adjusting items) was £216 million lower than last year, largely reflecting lower profits in the UK & Ireland
and France.
The working capital outflow of £469 million was partly driven by an increase in net inventory of £234 million. Over 100% of this
increase was driven by higher product purchase prices, alongside increases related to higher levels of ‘carry-over’ seasonal
items (which we decided to proactively purchase ahead of forecast cost price increases), and stock to support our store expansion
programme. The increase was partially offset by lower purchases and our strategic actions to reduce inventory. Payables decreased
by £191 million, largely reflecting higher inventory purchases in the prior year to rebuild product availability, build seasonal and ‘buffer’
stock, and secure lower cost stock. Receivables increased by £44 million.
Gross capital expenditure in the year was £449 million, increasing by 13% (FY 21/22: £397 million). Of this expenditure, 33% was
invested in refreshing, maintaining and adapting existing stores (including renewable energy initiatives), 13% on new stores, 39%
on technology and digital development, 5% on range reviews and 10% on other areas including supply chain investment.
Overall, free cash flow for the year was £(40) million (FY 21/22: £385 million).
Net debt (including IFRS 16 lease liabilities) as of 31 January 2023 was £2,274 million (FY 21/22: £1,572 million).
44
Strategic Report Governance Financial Statements
Kingfisher 2022/23 Annual Report and Accounts
A reconciliation of free cash flow and net cash flow to the statutory net movement in cash and cash equivalents and bank overdrafts
is set out below:
2022/23
£m
2021/22
£m
Free cash flow (40) 385
Ordinary dividends paid (246) (254)
Share buybacks (337) (157)
Share purchase for employee incentive schemes (9) (29)
Disposal of Castorama Russia 8 7
French tax authority payment
1
(34) –
Other tax authority payment
2
– (64)
Disposal of assets and other
3
4 (28)
Net cash flow (654) (140)
Issue of fixed term debt 99 –
Repayment of bank loans – (2)
Repayment of fixed term debt – (95)
Net decrease in cash and cash equivalents and bank overdrafts (555) (237)
1. Payments made in relation to French tax authority settlement (refer to the Taxation section above for further details).
2. Payments made in relation to the EC state aid challenge (refer to the Taxation section above for further details).
3. Includes proceeds from the issue of new shares, dividends from joint ventures and associates, and disposal of assets; partially offset by adjusting cash flow
items (principally comprising restructuring costs).
Return on capital employed (ROCE)
In FY 22/23, Kingfisher’s post-tax ROCE was 10.9% (FY 21/22: 14.6%). The decrease was mainly driven by lower profit in the UK &
Ireland. Kingfisher’s weighted average cost of capital (WACC) is 9.3% (FY 21/22: 7.6%).
ROCE by geographic division is analysed below:
Sales
£bn
Proportion of
Group sales
Capital employed
(CE)
£bn
Proportion of
Group CE
2022/23
ROCE
2021/22
ROCE
UK & Ireland 6.2 47.3% 3.0 48.3% 16.4% 22.6%
France 4.5 34.3% 1.7 27.4% 8.5% 9.7%
Other International 2.4 18.3% 1.3 21.0% 9.1% 9.3%
Central 0.2 3.2%
Total 13.1 6.2 10.9% 14.6%
Capital risk management
The Group’s objectives when managing capital are:
— to invest in the business where economic returns are attractive;
— to maintain a solid investment grade credit rating;
— to retain financial flexibility;
— to provide attractive returns to shareholders; and
— over the medium term, maximum net debt to EBITDA on an IFRS 16 basis of 2.0 times.
The Group manages its capital through:
— a continued focus on free cash flow generation;
— setting the level of capital expenditure and dividend in the context of its current year trading outlook and forecast free cash
flow generation;
— rigorous review of capital investments and post investment reviews to drive better returns; and
— monitoring the level of the Group’s financial and leasehold debt in the context of Group performance and its credit rating.
Kingfisher Insurance Designated Activity Company (Ireland), a wholly owned subsidiary, is subject to minimum capital requirements
as a consequence of its insurance activities. The Group complied with the externally imposed capital requirements during the year.
45Kingfisher 2022/23 Annual Report and Accounts
Property
Kingfisher owns a significant property portfolio, almost all of which is used for trading purposes. A formal valuation of the portfolio
was undertaken by external professional valuers in October 2022, with the valuations then updated to 31 January 2023. Based on
this exercise, on a sale-and-leaseback basis with Kingfisher in occupancy, the value of the property portfolio is £2.8 billion as of
31 January 2023 (FY 21/22: £2.8 billion).
2022/23
£bn
2022/23
Yields
2021/22
£bn
2021/22
Yields
France 1.4 8.1% 1.3 8.0%
UK 0.5 7.2% 0.6 6.2%
Poland 0.7 8.0% 0.7 7.6%
Other 0.2 n/a 0.2 n/a
Total 2.8 2.8
This is compared to the net book value of £2.2 billion (FY 21/22: £2.2 billion) recorded in the financial statements (including investment
property and property included within assets held for sale). Balance sheet values were frozen at 1 February 2004 on the transition
to IFRS.
Pensions
As of 31 January 2023, the Group had a net surplus of £137 million (FY 21/22: £410 million net surplus) in relation to defined benefit
pension arrangements, of which a £251 million surplus (FY 21/22: £540 million surplus) was in relation to the UK scheme. The decrease
in net surplus is mainly due to significant increases in yields on UK Government and corporate bonds which has caused reductions of
around a third in both scheme liabilities and assets; the latter reflecting the liability-matching investment strategy. Further actuarial
losses arose due to updated membership data and demographic assumptions following the triennial funding valuation completed in
the year. As part of the funding valuation exercise, the Trustee and Kingfisher have agreed to cease annual employer contributions
during the period from August 2022 to July 2025. The accounting valuation is sensitive to a number of assumptions and market
rates which are likely to fluctuate in the future. Please refer to note 28 to the consolidated financial statements for more information.
Financial review continued
46
Strategic Report Governance Financial Statements
Kingfisher 2022/23 Annual Report and Accounts
Trading review by division
UK & Ireland
£m 2022/23 2021/22
% Reported
change
% Constant
currency
change
% LFL
change
% 3-year LFL
change
B&Q 3,835 4,178 (8.2)% (8.2)% (8.8)% +15.8%
Screwfix 2,365 2,327 +1.6% +1.6% (3.4)% +14.2%
Total sales 6,200 6,505 (4.7)% (4.7)% (6.9)% +15.3%
Retail profit 603 794 (24.0)% (24.0)%
Retail profit margin % 9.7% 12.2% (250)bps (250)bps
Marketplace reached a penetration of 22% in January 2023
(i.e. B&Q’s marketplace gross sales divided by B&Q’s total
e-commerce sales). B&Q’s total e-commerce sales were
up 130% on a 3-year basis, with overall e-commerce sales
penetration of 11% (FY 21/22: 11%; FY 19/20: 5%). B&Q opened
five small format stores in FY 22/23, including its first two B&Q
Local compact format stores, and closed one store. As of
31 January 2023, B&Q had a total of 316 stores in the UK and
Ireland. In February 2023, B&Q announced that it is terminating
its ‘grocery concession’ partnership with ASDA in eight stores.
TradePoint
B&Q’s trade-focused banner, TradePoint, continued to perform
ahead of expectations in FY 22/23, supported by resilient sales
from trade customers. LFL sales for TradePoint outperformed
the rest of B&Q, down just 1.2% year-on-year, with 3-year LFL
sales up 31.5%. TradePoint’s penetration of B&Q sales increased
to 22% (FY 21/22: 20%). Throughout the year, TradePoint
continued to focus on customer engagement and loyalty
through targeted campaigns, trade-only deals and events, and
improvements to trade-specific product ranges and services.
E-commerce sales increased by 14% in the year as TradePoint
grew awareness of its digital offer. During the year, TradePoint
opened 18 new counters in the UK within B&Q stores, and
expanded into Ireland with its first eight counters. Further
roll-out of the proposition will continue in FY 23/24.
Screwfix
Screwfix total sales increased by 1.6% (LFL -3.4%) to £2,365
million, reflecting a robust performance against very strong
prior year comparatives, especially in H1. In H2, total sales
increased by 8.0% (LFL +2.1%), supported by good demand
from trade customers. 3-year LFL sales for the year were up
14.2%, with the sales trend accelerating to +15.3% in Q4 versus
+12.4% in Q3. Screwfix continued to grow its market share in FY
22/23, with strong gains in the year. Screwfix’s e-commerce
sales decreased by 9% year-on-year, again reflecting a resilient
performance against strong online trading in the first half of the
prior year. E-commerce sales were up 137% on a 3-year basis,
with e-commerce sales penetration of 60% (FY 21/22: 67%; FY
19/20: 33%). The business continued to strengthen its digital
proposition throughout the year through the introduction of
digital tablets in all stores, the launch of its product
recommendations feature in the new Screwfix app, and the
continued roll-out of Screwfix Sprint.
Space growth contributed c. 5% to total sales. In FY 22/23,
Screwfix opened 82 new stores (including 10 in Ireland), bringing
the total to 872 as of 31 January 2023. The business remains on
track to reach its target of over 1,000 stores in the UK & Ireland
in the medium term.
Kingfisher UK & Ireland sales decreased by 4.7% (LFL -6.9%) to
£6,200 million, against very strong prior year comparatives in H1.
In H2, total sales increased by 1.5% (LFL -1.2%). 3-year LFL sales
for the year were up 15.3%. The 3-year sales trend improved to
+16.2% in Q4 (versus +12.9% in Q3) supported by resilient sales
from DIFM/trade categories. Over the last three years, B&Q
(including TradePoint) and Screwfix have increased their market
shares in the UK, supported by strong engagement with new and
existing customers and higher store and online NPS scores.
Gross margin % decreased by 80 basis points, reflecting
‘normalised’ promotional activity in H1 versus the prior year and
one-off logistics spend in H1 to secure and manage seasonal
and ‘buffer’ stock, in addition to mix impacts. Mix impacts were
the result of a lower year-on-year share (versus Screwfix) of
B&Q’s higher gross margin % revenues given very strong prior
year sales; and unfavourable B&Q category mix between lower
margin building & joinery and EPHC (electricals, plumbing,
heating & cooling) and higher margin surfaces & décorcategories.
Retail profit decreased by 24.0% to £603 million (FY 21/22:
£794 million; FY 19/20: £499 million; at reported rates), due to
the exceptionally higher sales and gross margin % in H1 last year.
In H2, retail profit increased 22.4% to £264 million (H2 21/22:
£215 million at reported rates). Operating costs increased by
1.3%, driven by higher costs associated with 86 net new store
openings in the year, higher technology spend, and operating
cost inflation including increases in pay rates and significantly
higher energy costs. Advertising, marketing and travel costs also
normalised compared to one-off Covid-related savings in the
prior year. Increases were substantially offset through flexing our
staff costs and cost reductions achieved by our strategic cost
reduction programme. Retail profit margin % decreased by 250
basis points to 9.7% (FY 21/22: 12.2%; FY 19/20: 9.8%).
B&Q
B&Q total sales decreased by 8.2% (LFL -8.8%) to £3,835 million
against very strong prior year comparatives, especially in H1.
Sales trends improved in H2 (LFL -3.2%) with positive LFL
growth in the EPHC, building & joinery and bathroom & storage
categories. 3-year LFL sales for the year were up 15.8%. The
business achieved good growth across all categories on
a 3-year basis, in particular building & joinery and outdoor.
LFL sales of weather-related categories decreased by 16%
(increase of 21% on a 3-year LFL basis), while LFL sales
of non-weather-related categories, including showroom,
decreased by 6% (increase of 14% on a 3-year LFL basis). B&Q’s
total e-commerce sales (including marketplace gross sales)
decreased by 7% year-on-year, which was a resilient
performance against strong online trading in the first half of
the prior year. In H2, total e-commerce sales increased by 9%,
driven by the growth of B&Q’s marketplace which has scaled
rapidly since its launch in March 2022.
47Kingfisher 2022/23 Annual Report and Accounts
Trading review by division continued
Kingfisher France sales decreased by 1.2% (LFL -1.4%) to
£4,452 million, against strong prior year comparatives in H1. In
H2, total sales increased by 0.5% (LFL +0.5%). A resilient sales
performance in DIY categories was outpaced by sales from
DIFM/trade categories. 3-year LFL sales for the year were up
13.2%. The 3-year sales trend slowed to +10.9% in Q4 (versus
+14.6% in Q3) due to a significantly stronger 3-year comparative
in Q4 19/20 relative to the first nine months of FY 19/20. France
LFL sales in Q4 19/20 were over eight percentage points higher
than the first nine months of FY 19/20. Castorama and Brico
Dépôt continued to focus on strengthening their respective
competitive positions in the market through improving their
digital capabilities, product ranges and overall customer
proposition, resulting in higher store and online NPS scores.
Gross margin % decreased by 30 basis points, largely reflecting
category mix impacts. In H2, we completed our work to optimise
distribution centre space in France, resulting in a cumulative
reduction of c. 27% in square metres versus two years ago.
Retail profit decreased by 12.0% to £195 million (FY 21/22:
£221 million; FY 19/20: £164 million; at reported rates), with
lower gross profit partially offset by lower operating costs.
Operating costs decreased by 0.6% due to lower staff costs
and cost reductions achieved by our strategic cost reduction
programme, substantially offset by operating cost inflation
including increases in pay rates and significantly higher energy
costs. Retail profit margin % decreased by 50 basis points to
4.4% (FY 21/22: 4.9%; FY 19/20: 4.0%).
Castorama
Castorama total sales increased by 0.1% (LFL flat) to
£2,302 million, reflecting resilient sales despite strong prior
year comparatives in H1. Sales trends improved in H2 (LFL
+0.7%) with positive LFL growth in the EPHC and building &
joinery categories supported by energy efficiency and trade/
renovation activity. 3-year LFL sales for the year were up 13.9%.
As part of its international expansion plans, Screwfix launched as a pure-play online retailer in France in April 2021. Following
encouraging results and learnings over an 18-month period, including customer NPS scores on a par with Screwfix UK, the business
opened its first store in France in October 2022 and ended the financial year with five stores in operation. During the year, the
business successfully implemented a tailored IT operating system, opened its first French distribution centre, onboarded a strong
selection of local and national vendors, and accelerated its marketing efforts. The results for Screwfix International are captured in
‘Other International’ – see below for further information.
France
£m 2022/23 2021/22
% Reported
Change
% Constant
Currency
Change
% LFL
Change
% 3-year LFL
Change
Castorama 2,302 2,296 +0.3% +0.1% – +13.9%
Brico Dépôt 2,150 2,202 (2.4)% (2.5)% (2.9)% +12.5%
Total sales 4,452 4,498 (1.0)% (1.2)% (1.4)% +13.2%
Retail profit 195 221 (11.9)% (12.0)%
Retail profit margin % 4.4% 4.9% (50)bps (50)bps
The business achieved growth across all categories on a 3-year
basis, with particularly strong performances in the outdoor and
building & joinery categories, both up by c. 30%. LFL sales of
weather-related categories were broadly flat (increase of 24%
on a 3-year LFL basis), while LFL sales of non-weather-related
categories, including showroom, were also flat (increase of 11%
on a 3-year LFL basis). Castorama’s e-commerce sales
decreased by 19% year-on-year, largely reflecting strong online
trading in the first half of the prior year. In H2, e-commerce
sales increased by 27% year-on-year. Castorama’s
e-commerce sales were up 240% on a 3-year basis, with
e-commerce sales penetration of 5% (FY 21/22: 6%; FY 19/20:
2%). Castorama opened two new stores in FY 22/23; its first high
street compact store tests in Paris. As of 31 January 2023,
Castorama had a total of 95 stores in France.
Brico Dépôt
Brico Dépôt total sales decreased by 2.5% (LFL -2.9%) to
£2,150 million, again reflecting resilient sales levels against
strong prior year comparatives in H1. Sales trends improved in
H2 (LFL +0.2%) with positive LFL growth in the EPHC, building &
joinery and kitchen. 3-year LFL sales for the year were up 12.5%.
The business achieved strong growth across its outdoor,
building & joinery and EPHC categories on a 3-year basis. Brico
Dépôt continues to strengthen its discounter credentials
through further differentiating its ranges and maintaining a
strong price index relative to its home improvement peers.
Brico Dépôt’s e-commerce sales decreased by 20% year-on-
year, again reflecting strong online trading in the prior year. In
H2, e-commerce sales increased by 7% year-on-year. Brico
Dépôt’s e-commerce sales were up 133% on a 3-year basis, with
e-commerce sales penetration of 4% (FY 21/22: 5%; FY 19/20:
2%). In FY 23/24, Brico Dépôt France will test its first ever
compact store – a 1,000 sqm format.
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Other International
Total sales increased by 12.4% (LFL +11.2%) to £2,407 million,
with 3-year LFL sales up 21.5%, driven by growth in all key
geographies. Retail profit decreased by 1.8% to £125 million
(FY 21/22: £133 million; FY 19/20: £123 million; at reported rates),
largely due to an increase in losses incurred in ‘Other’ operations,
driven by investment in Screwfix France, and a lower retail profit
in Iberia. This was substantially offset by higher retail profit in
Poland. The retail profit margin % decreased by 70 basis
points to 5.2% (FY 21/22: 6.1%; FY 19/20: 5.3%).
Poland
Total sales increased by 16.7% (LFL +13.8%) to £1,734 million,
against a prior year comparative impacted in Q1 by the Covid-
related temporary closure of all Castorama stores (between 27
March and 3 May 2021). Notwithstanding this, Castorama
continued to attract new customers and achieved strong
market share gains in FY 22/23 by leveraging its leading market
position and competitive pricing, supported by robust sales
of DIY and DIFM/trade categories. On a year-on-year basis,
nearly all categories achieved double-digit LFL sales growth,
with a standout performance in the kitchen category where its
new OEB kitchen ranges delivered over 40% LFL sales growth.
3-year LFL sales for the year were up 19.8%. The business
achieved good growth across all categories on a 3-year basis, in
particular its building & joinery, outdoor, EPHC and kitchen
categories. LFL sales of weather-related categories increased
by 20% (increase of 34% on a 3-year LFL basis), while LFL sales
of non-weather-related categories, including showroom,
increased by 13% (increase of 18% on a 3-year LFL basis).
Castorama’s e-commerce sales increased by 2% year-on-year,
with growth of +11% in H2. Castorama’s e-commerce sales were
up 285% on a 3-year basis, with e-commerce sales penetration
of 5% (FY 21/22: 5%; FY 19/20: 2%).
Gross margin % decreased by 30 basis points, largely reflecting
‘normalised’ promotional activity versus the prior year. Retail
profit increased by 12.4% to £148 million (FY 21/22: £135 million;
FY 19/20: £151 million; at reported rates) with growth in gross
profit partially offset by an increase in operating costs.
Operating costs increased by 16.8%, reflecting staff and
operating cost inflation including higher energy costs, space
growth and new store opening costs, and higher marketing
costs. The increase in operating costs was partially offset
by cost reductions achieved by our strategic cost reduction
programme. Retail profit margin % decreased by 30 basis
points to 8.5% (FY 21/22: 8.8%; FY 19/20: 10.4%).
Space growth contributed c. 3% to total sales. Castorama
opened seven new stores in FY 22/23, including three big-boxes
and four compact stores, bringing its total to 97 stores in Poland.
Other International
Sales (£m) 2022/23 2021/22
% Reported
Change
% Constant
Currency
Change
% LFL
Change
% 3-year
LFL Change
Poland 1,734 1,525 +13.7% +16.7% +13.8% +19.8%
Iberia 373 366 +2.0% +1.9% +1.9% +16.7%
Romania
1
285 279 +1.8% +1.7% +7.8% +38.0%
Other
2
15 10 n/a n/a n/a n/a
Other International 2,407 2,180 +10.4% +12.4% +11.2% +21.5%
Retail profit (£m)
Poland 148 135 +9.4% +12.4%
Iberia 9 12 (27.9)% (28.0)%
Romania
1
(10) (11) +7.3% +7.4%
Other
2
(30) (10) n/a n/a
Turkey (50% JV) 8 7 +19.8% +114.8%
Other International 125 133 (6.6)% (1.8)%
Retail profit margin %
Poland 8.5% 8.8% (30)bps (30)bps
Other International 5.2% 6.1% (90)bps (70)bps
1. Kingfisher’s subsidiary in Romania historically prepared its financial statements to 31 December. In the prior year (FY 21/22), Romania migrated to Kingfisher’s
financial reporting calendar (year ended 31 January). Its sales and retail loss presented in FY 21/22 therefore included one additional month of results (January
2022) in order to facilitate the alignment to Kingfisher’s financial reporting calendar. Reported and constant currency variances for Romania’s total sales and
retail loss are for February 2022 to January 2023 (compared against January 2021 to January 2022), whilst LFL and 3-year LFL sales growth compares
equivalent periods in the current and prior years.
2. ‘Other’ consists of the consolidated results of Screwfix International, NeedHelp, and results from franchise agreements.
49Kingfisher 2022/23 Annual Report and Accounts
Trading review by division continued
Retail banner employees, store numbers and sales area
Employees
(FTE) at
31 Jan 2023
Store
numbers at
31 Jan 2023
Sales area
1
(000s m
2
) at
31 Jan 2023
B&Q 16,413 316 2,203
Screwfix 9,380 872 55
UK & Ireland 25,793 1,188 2,258
Castorama 10,509 95 1,156
Brico Dépôt 8,238 123 872
France 18,747 218 2,028
Poland 12,136 97 817
Iberia 1,777 31 195
Romania 2,542 33 238
Other
2
143 5 –
Other International 16,598 166 1,250
Total 61,138 1,572 5,536
1. Screwfix sales area relates to the front of counter area of an outlet.
2. ‘Other’ consists of Screwfix International, NeedHelp, and franchising.
Iberia
Total sales increased by 1.9% (LFL +1.9%) to £373m, reflecting
resilient sales against strong prior year comparatives. The
business achieved good year-on-year growth in its EPHC,
building & joinery and kitchen categories. 3-year LFL sales for
the year were up 16.7%, with strong performances in building &
joinery and outdoor, both up by c. 30%. Retail profit decreased
to £9 million (FY 21/22: £12 million; FY 19/20: £2 million; at
reported rates), reflecting a lower gross margin % and an
increase in operating costs of 1.2%.
Romania
Total sales increased by 1.7% to £285 million, despite the
inclusion of one additional month of sales in the prior year
comparative and the impact of Covid-related trading
restrictions earlier in the year (lifted in March 2022). On a LFL
basis sales growth was +7.8%, reflecting strong year-on-year
performances in the outdoor, surfaces & décor and kitchen
categories. 3-year LFL sales for the year were up 38.0%.
Growth in gross profit was partially offset by an increase in
operating costs of 7.1%, mainly driven by staff costs and
operating cost inflation including higher energy costs. As a
result, the business reduced its retail loss by 7.4% to £10 million
(FY 21/22: £11 million reported retail loss; FY 19/20: £23 million
reported retail loss). On a comparable basis, excluding losses
incurred in the month of January 2021, Romania’s retail loss
increased by 6.8% year-on-year.
Turkey
In Turkey, Kingfisher’s 50% joint venture, Koçtaş, continued
to grow successfully against a challenging macroeconomic
backdrop. The business contributed £8 million of retail profit
in the year (FY 21/22: £7 million; FY 19/20 £9 million; at reported
rates). The business opened 129 mostly compact stores in their
financial year to 31 December 2022, bringing its total store
count to 355.
‘Other’
‘Other’ consists of the consolidated results of Screwfix
International, NeedHelp, and franchise agreements. Due
to these businesses being in their early investment phase, a
combined retail loss of £30m (FY 21/22: £10m reported retail
loss) was recorded, largely driven by Screwfix France as the
business invested in the opening of its first distribution centre
and stores. As noted in the UK & Ireland commentary above,
Screwfix opened its first five stores in France following
encouraging results as a pure-play only operator. During the year,
we also opened two franchise stores under the B&Q banner in
the Middle East. The stores and support office functions are
fully operated and staffed by the Al-Futtaim Group.
50
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Risks
Risk management
Effective risk management is critical to our ability to achieve
our strategic and operational objectives. We have a detailed
risk framework in place that ensures the Board performs
a robust risk assessment to have sufficient visibility of the
principal risks and the opportunity to regularly review our
mitigating controls and actions. This is informed by the Group
Executive, who is accountable for identifying, assessing and
managing the principal risks and for reviewing and assessing
the management of the retail banner and Group function risks.
The Governance framework and the role of the Board, Audit
Committee and Group Executive are set out from page 62.
To identify our risks, we consider our strategic objectives and
what might stop us achieving them over the three-year period.
We combine a top-down strategic view with a bottom-up
operational view of the risks. Our retail banners and Group
functions help us to identify changes to the risks within their
operations. These are consolidated and used as one of the
inputs to identify and validate our principal risks. Discussions
are also held with the Group Executive, both individually and
collectively, and non-executive directors.
To assess our risks, we consider the potential financial,
reputational, regulatory or operational impact, as well as the
probability of them materialising within our three-year outlook
period. This helps us to create the right actions and controls
to manage our risks to an acceptable level. For each of the
principal risks, we also assess any change to the risk level
compared to last year.
To manage our risks, ownership is assigned at all levels. Each
retail banner and Group function is responsible for putting
appropriate actions, controls and procedures in place to
manage and monitor their identified risks and to verify that
the controls operate effectively.
To effectively monitor our risks, the Group Executive and
Board review the nature, likelihood and impact of the Group’s
principal risks twice a year together with any changes since the
previous review. This includes mitigating actions to ensure that
these risks are proactively managed.
Our dedicated Risk and Control Managers are embedded in the
retail banners, Group functions and shared services continue to
implement the revised internal control framework. The design
assessments have been completed and controls have been
adjusted where required. We are now ready to move to a first
cycle of full testing to monitor the ongoing effectiveness of
our controls.
The Internal Audit team considers the risks at the operational
and Group level as part of its quarterly audit planning cycle,
to provide timely assurance of the most significant risks across
the business. Insights from the risk management process support
Internal Audit to deliver a risk-focused assurance programme, a
key example from the year being the high-velocity risk exercise,
mentioned below.
Risk appetite
The Group Risk team performed a comprehensive review of our
risk appetite last year to understand where we actively choose
to pursue opportunities that give rise to risks, where we balance
risks with the cost of mitigation, and where we are unwilling to
accept risks. This highlighted a small number of activities where
risk reduction actions were necessary to ensure the level of risk
we are exposed to is in line with our appetite. As part of our review
of risk appetite this year, an assessment of these actions was
performed to ensure plans are progressing as expected.
High-velocity risks
An exercise was performed during the year with the Group
Executive to identify our high-velocity risks – those unexpected
risks or events which could impact the company at pace, providing
little time to react and so causing significant disruption. Analysis
was conducted to ensure we had appropriate response plans, in
addition to the usual controls to reduce the impact and likelihood.
The exercise did not identify any new risks and confirmed
the adequacy of the existing mitigations. Discussions were
subsequently held to improve the wider understanding
of some of our Group response plans.
Business continuity planning
The Group’s Business Continuity policy was updated and
approved in the year, formalising a consistent set of requirements
across the Group. This was a key part of the mitigation against
several of our high-velocity risks. The Group Risk team worked
with all banners and Group functions to ensure their plans had
been reviewed in the year and testing plans had been formalised.
51Kingfisher 2022/23 Annual Report and Accounts
Principal risks
Following a comprehensive review, our existing principal risks
remain broadly unchanged, with the addition of climate change
as a principal risk. Other adjustments reflect progress made in
delivering our strategy and changes in the external operating
environment. These are included in the descriptions of risks
and mitigating actions.
All principal risks are given significant attention and focus.
We believe the highest severity risks are:
— Responding to changing customer preferences.
— Geopolitical instability creating macroeconomic volatility.
— Cyber and data security.
The key changes this year are:
Climate change: This has been added as a new risk. Climate
change is a huge global challenge that requires significant
actions by governments and businesses, including Kingfisher.
Our analysis (see Our response to the Task Force on Climate-
related Financial Disclosures from page 27) demonstrates a
limited impact on our activities over our three-year planning
horizon. However, if climate change solutions are not effective,
this will have longer-term negative consequences for our
strategy and affect our ability to serve our customers, including
challenging our product availability, supply chain, reputation and
cost to operate.
Geopolitical instability creating macroeconomic volatility:
This risk has increased since last year. Previously called
‘political and market volatility’, it has been broadened to
incorporate risks from global events/conflicts. Furthermore,
there is an increased risk of macroeconomic volatility across
all our markets. Sustained or accelerating inflationary pressures
or other market disruptions could result in local market or global
decrease in demand and potential recessions.
Level and impact of change: This risk has decreased since
last year. We are three years into our change programme
and have demonstrated a good track record of delivery,
implementing many structural and foundational changes.
However, we still need to manage delivery of our investment
programme, which requires significant levels of technology
development and implementation.
Our people: This risk has also decreased since last year.
We have improved mitigation plans over our people strategies,
which are integrated into each business unit. However, we need
to ensure we have the technological capabilities required to
deliver our investment programme, whilst also delivering our
inclusion and diversity ambitions.
Principal risks are shown on pages 53 to 58.
Emerging risks
As part of our risk management process, we identify and
monitor emerging risks. These risks are currently difficult
to fully assess and quantify or are expected to materialise
outside our defined outlook period.
We have a thorough process to capture emerging risks across
our retail banners. Alongside their risk identification process,
each banner was asked to consider what future risks they
were concerned by, and what they were doing to better
understand them.
The banner reviews did not reveal any new emerging risks.
They did however lead to a refocusing of the Geopolitical
instability creating macroeconomic volatility risk (see above).
Our industry moves at pace, and so many emerging risks raised
by companies in different industries are already reflected in our
principal risks. We will continue to scan the horizon for emerging
risks in the future through our regular risk reviews.
Risks continued
52
Strategic Report Governance Financial Statements
Kingfisher 2022/23 Annual Report and Accounts
Our colleagues are critical to the successful delivery of our
‘Powered by Kingfisher’ strategy and priorities, which aim to expand
our functional capabilities to address the changing needs of our
customers. Failure to attract the required level of colleagues with
appropriate skills could impact our ability to deliver our strategic
priorities at the pace required. This risk is particularly critical for
our technology and digital functions.
More generally, we have set ambitious Inclusion and Diversity targets,
aimed at making Kingfisher an even better place to work and increase
our innovation and creativity. Failure to meet these targets could
have a negative impact on delivering our business objectives and
cause reputational damage.
We continue to execute our strategy at pace and invest for growth.
Under our strategic plan, the business is utilising its core strengths
and commercial assets, and ‘powering’ its distinct retail banners to
address the significant growth opportunities that exist within the home
improvement market. We have high ambitions and are continuously
improving our offer, market positions, cost base and technology. In
particular, we are evolving our IT systems development programme
to better meet banner needs and serve the customer.
Where relevant we may also consider complementary acquisitions,
partnerships and joint ventures to optimise our business activities
and support our strategy.
Failure to properly prioritise activity and manage change effectively
could result in weaker than anticipated sales growth, reduced
operating margins or insufficient cash being generated to meet
our objectives.
Principal risks
How our risks have changed
Decreased
Each banner has a clear people strategy, setting out their plans for
securing their required talent. Our colleague turnover rates and
time to hire are stable and are stronger than our industry peers.
Link to strategic priorities
— Accelerate e-commerce through speed and choice.
— Build a data-led customer experience.
— Lead the industry in Responsible Business and energy efficiency.
— Human, agile and lean.
— Grow by building on our different banners.
How we manage and monitor the risk
— The Board has approved our Group strategy for people and culture,
with individual priorities agreed for each banner and function.
— The Group Executive and Board hold regular talent reviews
focused on ensuring senior leadership has the required capabilities
to deliver the strategy and activities to strengthen our leadership
succession pipeline.
— Dedicated Technology careers webpage and a formal Technology
Capability programme in place to ensure continued focus and
progress on acquiring and retaining critical skills.
— As part of our technology transformation, we are taking action
to attract new capabilities in-house and reduce dependence on
third parties.
— Investing in tools and infrastructure to support our colleagues’
learning, including a leadership development portal for bite-size
instant learning and e-learning for our store teams on new products.
— Continue to embed our key leadership behaviours through our
leadership development work. This will accelerate delivery of our
strategy and embed our agile and inclusive culture led by trust.
— Each banner has a tailored inclusion and diversity plan. Areas of
focus are our senior leadership, creating a culture of inclusion,
our customer proposition and learning for life. Relevant targets
are linked to the remuneration of senior leaders.
How our risks have changed
Decreased
We have demonstrated a good track record of delivery against
our strategic objectives, landing many structural and foundational
changes and initiatives. Focus needs to be kept on the capacity of
teams to deliver future projects at pace.
Link to strategic priorities
— Accelerate e-commerce through speed and choice.
— Build a data-led customer experience.
— Roll out compact store formats.
— Develop trade business.
— Human, agile and lean.
— Grow by building on our different banners.
How we manage and monitor the risk
— The Board has approved three-year plans for each banner
and Group functions to deliver the strategy.
— A balanced and simple local-group operating model is in place.
— Central Results Delivery Office provides monthly reporting to
the Group Executive and quarterly to the Board, based on a set of
c. 50 KPIs, measuring the implementation and effectiveness of
strategic initiatives.
— Each of our key strategic pillars is led and monitored by one of our
banners or Global Functions, with monthly review points with the
Group Executive sponsor.
— Annual in-depth strategic review and six-monthly strategic
performance updates performed with the Board, addressing
the agreed priorities and making changes where appropriate.
— We develop a detailed annual IT roadmap that ensures investments
are aligned with our priorities and resources. Progress against the
roadmap is monitored and adjustments made as needed.
— Technology directors have been appointed in our retail banners to
provide more local flexibility while leveraging the scale of our wider
Group Technology organisation.
— Regular communication with all colleagues on the delivery of
the strategy, key changes being made and forthcoming
business developments.
— Periodic reviews of governance and enabling activities undertaken
by Internal Audit.
— Dedicated M&A function, with accountability resting with the CFO.
M&A activity exceeding £10 million in value requires Kingfisher plc
Board scrutiny and approval.
Key: Increasing No change Decreasing New
1
Our people
2
Level and impact of change
53Kingfisher 2022/23 Annual Report and Accounts
How our risks have changed
No change
We have seen a continued increase in the supply network capacity
and a reduction in sea freight costs. We continue to engage regularly
with our suppliers to understand how the current economic volatility
is managed to ensure it does not affect operations.
Link to strategic priorities
— Differentiate and win through OEB.
— Human, agile and lean.
— Accelerate e-commerce through speed and choice.
— Develop trade business.
How our risks have changed
No change
We have demonstrated our ability to protect our colleagues
and serve customers while continuing to operate in challenging
circumstances and are better prepared to react should a new
pandemic occur. However, there is still a level of uncertainty.
Link to strategic priorities
— Human, agile and lean.
How we manage and monitor the risk
— Continuously monitor events to ascertain any increased risk of a
resurgence of Covid-19 infections or other contagious diseases.
— We have Group Crisis Committee and business continuity and crisis
teams in each of our markets, which we would mobilise in the event
of any future significant operational impact.
— Gained significant knowledge about how to deal with a future
pandemic. The measures taken as part of the recent pandemic
(including strict hygiene and appropriate social distancing measures
in stores) would, where applicable and effective, be reintroduced
to ensure the health and safety of our colleagues and customers.
— If required, we are able to significantly reduce discretionary
spend (including freezing pay reviews, delaying bonus payments
and/or recruitment), stop all non-committed capital expenditure,
reprioritise sourcing requirements and adjust purchasing plans.
How we manage and monitor the risk
— Our Supply and Logistics three-year roadmap was updated in
2022/23. It considers our future logistics capacity needs, based
on the various sourcing, inventory and sales-generative strategies
identified in the Group’s strategic planning activities.
— Business continuity plans are updated regularly, covering our
internal points of failure and key partner service-continuity plans.
The actions include a response to supplier and logistics failures, and
plans were tested live as part of our Covid-19 response activities.
— Established partnerships with key transportation and logistics
suppliers to align planning and secure capacity.
— Extended our demand forecasting to better anticipate future
sales requirements and worked with suppliers to ensure
product availability.
— Invest in supply chain visibility tools to be able to better monitor
products as they move through the supply chain and react
to events.
— Continued the implementation of store-based fulfilment for
customer orders to support the business operation and the
increased demand since the pandemic.
— For our OEB suppliers, we have an agreed supplier strategy
including initiatives to diversify our ‘sourcing footprint’ and exploit
more near-sourced suppliers, guidance on choosing which regions
to source from and when to use more than one factory or supplier
to increase resilience.
— Robust process for selecting individual suppliers. This includes
checks on financial strength, ethical and environmental risks and
their ability to manufacture the products to the agreed specification.
— Continually review key suppliers by category to establish capacity
and volumes and assess the impact of an interruption in supply.
Despite the wide rollout of vaccines and the recent reversal
of China’s ‘zero-Covid’ policy, a level of uncertainty still remains.
New and more transmissible variants of Covid-19 may emerge or we
could be faced with other contagious diseases. Although significantly
reduced, the risk of a prolonged global health threat and associated
government restrictions remains, which could adversely affect our
operations and those of our partners and suppliers. This could cause
a significant reduction in footfall and consumer spending and could
negatively impact our ability to receive products from affected
suppliers. High levels of absence in either our workforce or our
suppliers could impact our ability to operate stores and warehouses,
deliver products or provide appropriate functional support to
our business.
Such restrictions and/or reductions in demand could adversely affect
our financial results and the financial condition of the Group.
3
Contagious diseases
A resilient supply chain is key to our business and the achievement
of our strategic objectives. We are dependent on complex global
supply chains and fulfilment solutions to deliver our products to
our customers. We are also reliant on the ability of our suppliers to
respond quickly to changes in demand and to be financially resilient,
particularly to fluctuations in energy prices, and in certain areas,
energy rationing. Major disruption to our supply chain could result in
reduced levels of product availability, with an adverse financial and
reputational impact.
4
Supply chain resilience
Principal risks continued
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Strategic Report Governance Financial Statements
Kingfisher 2022/23 Annual Report and Accounts
How our risks have changed
No change
Our commercial operating model affords banners autonomy,
allowing them to rapidly identify and react to changes in customer
trends. However, a significant risk remains that we are not able to
deliver the required changes fast enough or that the changes are
not sufficiently compelling for our customers.
Link to strategic priorities
— Accelerate e-commerce through speed and choice.
— Build a data-led customer experience.
— Differentiate and win through OEB.
— Roll out compact store formats.
— Lead the industry in Responsible Business and energy efficiency.
— Develop trade business.
— Human, agile and lean.
— Grow by building on our different banners.
How our risks have changed
No change
Against a challenging backdrop, we have continued to
execute strongly, with sales outperforming home improvement
industry growth in our markets and significantly ahead of
pre-pandemic levels.
Link to strategic priorities
— Accelerate e-commerce through speed and choice.
— Build a data-led customer experience.
— Differentiate and win through OEB.
— Roll out compact store formats.
— Develop trade business.
— Grow by building on our different banners.
How we manage and monitor the risk
We are building a differentiated offer through:
— Clear positioning for each of our banners, with different operating
models to address diverse customer needs, such as general DIY
needs, trade-focused and discounters.
— Extending our online presence, tripling our e-commerce sales
over the last few years. Most recently we successfully launched
e-commerce marketplaces in the UK, Spain and Portugal.
— Centrally developing our OEB brands, with clearly defined range
principles and customer projects to create a differentiated and
compelling offer.
— Leveraging the autonomy of local banners by allowing local ranges,
services and store formats that are tailored to customers’ needs.
— Competing on price by using the scale of our Group to benefit
from volume and lower purchase prices.
— Tailoring trading actions to local markets, through distinct customer
communications, promotions and loyalty schemes to increase sales
and brand loyalty.
We regularly monitor our market share, our performance and
that of our competitors, to react quickly to targeted actions via:
— Comparison of price indices versus competition in our key
categories and measuring customer price perception on a
regular basis.
— Customer trend monitoring in all our markets to anticipate and
develop an appropriate offer.
— Monitoring Net Promotor Scores (NPS) with targets to improve the
customer experience and satisfaction.
How we manage and monitor the risk
— Customer and Market Intelligence team continuously monitors and
gathers insights, with regular updates to the Group Executive, the
Board and the wider business. We also have teams focused on
customer data and digital experience, so that we can better
understand the behaviour of our customers and provide
them with personalised omnichannel experiences.
— Based on customer and banner feedback, we extend and refresh
our OEB ranges, particularly in the area of sustainability and
energy efficiency.
— A Group digital strategy has been developed and approved by
the Board, with various priority programmes underway.
— Technology Product Board meets quarterly, to monitor financial
and project portfolio performance and to prioritise upcoming
digital initiatives.
— Launched numerous strategic programmes to accelerate
e-commerce, focusing on putting stores at the centre of our
fulfilment model. We continue to expand the range of do-it-for-me
services available to customers to help them complete projects,
including offering energy diagnostic and project support services
in the UK and France.
— Along with the B&Q marketplace in the UK which continues to grow,
we have successfully launched marketplaces in Spain and Portugal,
offering more product choice to customers, reducing risks for
availability and following consumer trends as part of the overall
online marketplace growth strategy.
— Created a Group Centre of Excellence for online marketing
and digital trading that monitors digital consumers’ demand,
searches and customer acquisition costs to quickly identify
changes and opportunities.
— Continued to develop our understanding of compact store formats
and concessions, with a variety of test concepts live in a range of
locations across the UK, France and Poland. As of 31 January 2023,
we had 41 compact store tests across four banners, providing us
with strong learnings for future blueprinting and conceptualisation.
Our competitors include both traditional store-based and pure-play
online retailers. Over the past years, we have seen an increase in
online penetration in the home improvement market, including
through marketplaces. Competitors are also developing their
offers, including both fulfilment options and the services offered.
Targeted actions or disruptive behaviour by competitors could
negatively impact our market share, the value of our assets and
our financial results.
5
Competitor behaviour
The pace of change remains high, with a greater use of e-commerce
solutions for Click & Collect and home delivery. To make our products
available to customers where and when they want it, we need innovative
digital channels supported by an agile and reliable infrastructure, a
robust logistics capability and an optimised property portfolio with
in-store services.
Failure to identify and respond to new trends effectively with pace
could affect our ability to stimulate spend and adversely impact the
value of our assets and our financial results.
6
Responding to changing customer preferences
55Kingfisher 2022/23 Annual Report and Accounts
Principal risks continued
How our risks have changed
Increased
Macroeconomic volatility has increased across all our markets
as a result of recent geopolitical instability, with further cost price
inflation affecting salary and energy costs. This is also causing
uncertainty over future levels of demand. Geopolitical events
could also disrupt our supply chain and/or limit the availability
of certain raw materials.
Link to strategic priorities
— Differentiate and win through OEB.
— Grow by building on our different banners.
How our risks have changed
No change
This risk remains one of our top three risks. The sophistication and
organisation of cyberattacks continues to grow, with significant
focus on the retail sector.
Link to strategic priorities
— Accelerate e-commerce through speed and choice.
— Build a data-led customer experience.
How we manage and monitor the risk
Monitoring and engagement activities
— Our Corporate Affairs team actively monitors the political and
economic situations in the countries in which we operate or which
may impact our operations. This is supported by membership of key
business trade associations in every market. We also continuously
monitor our exposure to financial institutions to ensure our risk
is minimised.
— Strategies are in place to identify, monitor and influence changes
to legislation that may impact our business.
— Crisis management processes and teams are in place to monitor
and manage situations as they arise.
— Actively monitor our sourcing from large suppliers by region
and work to diversify our sourcing options where appropriate.
Our global buying offices and supply chain teams are focused
on ensuring we maintain appropriate levels of product availability
through periods of disruption.
Mitigation activities
— Strong and distinct banners, with each able to set the right product
offer and pricing to meet our customers’ appetite for spending
and to respond in a flexible way to changes in the environment.
— Our OEB, which represent 45% of our sales, offer particularly
great value for customers.
— Banner and Group sourcing offices focused on securing
competitively priced supplies.
— Access to significant committed liquidity facilities and debt funding,
through drawn term loans and the ability to issue debt into the
capital markets through its European Medium-Term Note
(EMTN) programme.
— Cash holdings are diversified across a number of financial
institutions (for which credit risk is closely monitored).
— An appropriate and prudent mix of hedging policies, cash deposits
and debt financing to minimise the impact of foreign exchange
currency volatility on the company.
— Continually investing to reduce our energy usage and increase our
efficiency. In recent months, our banners and Group entities have
put in place additional energy-saving measures. Our Group hedging
policy reduces our exposure to energy price fluctuations and
provides regular reporting for oversight.
— Launched energy-saving tools in the UK and France, to help
customers diagnose and access products and services to
increase the efficiency of their homes ahead of the winter.
How we manage and monitor the risk
— Cyber security continues to receive Group Executive-level
sponsorship and Board focus.
— Continue to make investments in support of our IT security roadmap.
— Regular review of the cyber threats facing Kingfisher and work with
security partners to evaluate and implement appropriate controls.
— Assessments and exercises held to prepare for security incidents
up to and including Board level.
— Commissioned continuous independent assurance to monitor
progress against our strategy and to ensure we meet our
maturity milestones.
— All technology development goes through a ‘Secure by Design’
process to ensure solutions and data are secure and adhere to
compliance and regulation requirements.
— Perform security assurance of third parties that process our
data across all functions and banners.
— Recognising the importance of the role our colleagues play
in protecting the organisation, we are delivering an education
and awareness strategy tailored to roles and responsibilities.
— Robust major incident management process in place, and we
maintain a third-party retainer for incident response, breach,
and forensic expertise.
Kingfisher operates in eight countries across Europe and relies on a
global supply base, exposing us to both geopolitical uncertainty and
local volatility. Disruption could include government restrictions
on mobility, strikes, work stoppages and/or our ability to receive
products from affected countries. These impacts could potentially
disrupt the day-to-day operations of our business and our ability to
meet our strategic objectives.
Recent geopolitical events have created uncertainty in economic
markets, with rising energy prices fuelling inflation. In addition, our
markets could be indirectly impacted by recent volatility in the
financial sector. This uncertainty and volatility could change customer
behaviours and reduce consumer confidence. This could negatively
impact the demand for our products and services. If governments
try to reduce their budget deficits through further taxation, this will
create additional burdens on businesses.
7
Geopolitical instability creating
macroeconomic volatility
Cyberattacks and security incidents continue to present a risk for
organisations with an online presence. We proactively manage our
risk profile and will continue to do so as we deliver on our strategy
and as our digital presence evolves.
Failure to protect data, detect breaches and respond accordingly
would negatively impact our operations, profitability and reputation.
8
Cyber and data security
56
Strategic Report Governance Financial Statements
Kingfisher 2022/23 Annual Report and Accounts
How our risks have changed
No change
Link to strategic priorities
— Lead the industry in Responsible Business and energy efficiency.
How our risks have changed
No change
The level of scrutiny and expectations from our stakeholders
remains high, with social media networks amplifying criticism so
fast that the opportunity to provide an effective response is limited.
Link to strategic priorities
— Lead the industry in Responsible Business and energy efficiency.
— Human, agile and lean.
How we manage and monitor the risk
Policies and procedures
— Policies and procedures are in place, clearly stating our expectation
to carry out our business fairly and with complete integrity.
— Due diligence processes are in place over our third parties,
covering risks such as sustainability, business integrity, data
protection and information security as applicable. Internal audit
conduct periodic reviews of these processes.
— A whistleblowing policy and hotline, facilitated by an independent
third party, are in place across the Group. Speak Up Champions
have been appointed in all banners to ensure that all ethical
concerns raised via our whistleblowing system are followed up
and investigated appropriately.
Training and communication
— Targeted Group-wide mandatory compliance training is refreshed
annually, with modules on our Code of Conduct (including anti-
bribery and corruption), GDPR, Competition Law and the Market
Abuse Regulation.
Oversight and reporting
— Our Legal and Compliance network is well established, for teams at
Group and banners to work and communicate together.
— The Group Ethics and Compliance Committee (GECC) ensures
that the Group approach to ethics and compliance is adequate and
effective. This includes approving compliance training and reviewing
the outcomes of investigations. Local Ethics and Compliance
Committees (LECC) have been implemented in all banners to
ensure a consistent approach across the Group.
— The Disclosure Committee is in place to address our Market Abuse
Regulation obligations.
— Whistleblowing statistics and trends are monitored in each LECC
and reported to the GECC, Audit Committee and Board annually.
How we manage and monitor the risk
Governance
— The Responsible Business Committee leads and oversees the
delivery of the Responsible Business strategy. It is chaired by a
non-executive director and includes the Chief Executive Officer.
— Our Code of Conduct establishes the core behaviours we expect
of ourselves and others, including our suppliers.
Stakeholder dialogue
— Monitoring of external stakeholders’ views of the Group and all
banners through traditional and digital media.
— For colleagues, we have forums, committees and working groups
in all of our businesses, including a collective forum that meets with
the CEO and members of the Board.
— Externally, we have regular engagement with a range of NGO
partners in our key markets, which helps to ensure that the
company remains close to social and environmental concerns.
Due diligence and external assurance
— Our due diligence of suppliers and partners covers a range of
ESG issues, from environment to modern slavery. This includes our
policy framework and supplier standards which we expect suppliers
to adhere to, supplier training and capacity building and auditing of
high-risk suppliers.
— Our due diligence extends to the data we disclose. Selected
ESG data in the annual Responsible Business Report and Modern
Slavery Transparency Statement is independently audited by DNV.
— Independent ratings agencies also monitor and rate our ESG
performance throughout the year, including MSCI, CDP,
Sustainalytics and ISS ESG.
The Group’s operations are subject to a broad range of regulatory
requirements in the markets in which we operate. A major corporate
issue or crisis, a significant fraud or material non-compliance with
legislative or regulatory requirements would impact our brands and
reputation, could expose us to significant fines or penalties and would
require significant management attention.
9
Legal and regulatory
Our customers, colleagues, suppliers, investors and the communities
we source from and operate in expect us to conduct our business in
a way that is responsible and in everyone’s long-term interest. One
of the many ways we strive to ensure this is through our publicly
communicated Responsible Business strategy and targets, covering
topics such as how we help our customers’ homes become more
sustainable, responsible sourcing and diversity (for further details
please refer to Responsible Business on pages 23 to 26).
Failure to deliver on our obligations and commitments, or material
breaches of our policies or controls, could undermine trust in
Kingfisher, damage our reputation and impact our ability to meet
our strategic objectives.
10
Reputation and trust
57Kingfisher 2022/23 Annual Report and Accounts
Principal risks continued
How our risks have changed
New
Scrutiny on the validity and reliability of our response to climate-
related risks continues to increase each year (for details of our
commitments, please refer to Responsible Business on pages 23
to 26). This means that we need to constantly focus on ensuring
that our approach and efforts to reduce our greenhouse gas
emissions in line with climate science are robust and stand up
to changing external expectations.
Link to strategic priorities
— Lead the industry in Responsible Business and energy efficiency.
— Differentiate and win through OEB.
How we manage and monitor the risk
— Established a Group Climate Committee to extend oversight and
governance for the monitoring of, and response to, Kingfisher’s
climate-related risks and commitments. The committee is chaired
by the Chief Executive Officer, and brings together different
parts of the business, to enable co-ordination in our response
to climate change.
— Longstanding commitment to reduce our emissions in line with
climate science. Our near-term science-based targets for 2025/26
commit us to reducing our scope 1, 2, and 3 emissions in line with
global efforts to limit global warming to 1.5
o
C. In 2022/23 we also
announced our commitment to achieving net zero within our
own operations by 2040. These targets are supported by
decarbonisation roadmaps and capital investment plans.
— Strengthened our Sustainable Home Products (SHP) sales target,
to maximise business opportunities from the transition to a net zero
future. We are aiming for SHP to account for 60% of Group sales
by the end of FY 25/26 and 70% of sales of OEB products.
— Support a number of industry initiatives aimed at inspiring
more retailers to act on climate change, such as the UN’s
Race to Zero Breakthroughs: Retail Campaign (of which we
are a founding member) and the British Retail Consortium’s
Climate Action Roadmap.
— Aligned our climate-related ambitions with our financial
performance by linking the delivery of our 2025/26 scope 1 and 2
science-based target to our £550 million Revolving Credit Facility,
and to the vesting of our Performance Share Plan.
— Continue to perform climate-related scenario analysis to
understand how different climate-related risks could impact
us and to continually test the feasibility of our mitigation plans.
See the TCFD section on pages 27 to 35.
Climate change will have negative consequences on society and
businesses without concerted mitigation efforts.
We have identified several climate-related financial and operational
risks, which are potentially significant if climate solutions are not
effective, even if their impact over our outlook period is limited.
These include:
— Cost of carbon increasing, through the introduction and
strengthening of national and international carbon policies
and pricing mechanisms.
— Physical damage to assets and business disruption from an
expected increase in the frequency of extreme weather events.
— Sourcing and supply chain disruption and changes in the
availability of key raw materials (such as timber) from
long-term climate changes.
Failure to implement appropriate cross-functional responses to
these risks could negatively impact our operations and profitability
over time.
In response to these challenges, we have created ambitious climate
change plans. Failure to deliver on these could damage our reputation.
11
Climate change
58
Strategic Report Governance Financial Statements
Kingfisher 2022/23 Annual Report and Accounts
Viability statement
Assessment period
The directors consider a viability assessment period of three
years to be appropriate given the fast pace of change in both
consumer and retail markets. This is consistent with the Group’s
strategic planning period and the period over which the principal
risks are considered. The period to maturity or full implementation
and impact for new ranges, stores and technology investments
is up to three years. In addition, there are no major renewal or
investment commitments expected that go above the current
investment level (at most around 3.5% of revenues) beyond the
three-year period. The Group’s debt repayment profile is not
relevant due to the low levels of debt and the revolving credit
facility has a three-year horizon. A period of greater than three
years is considered too long for financial projections, given the
uncertainties involved.
Assessment of prospects
The directors regularly assess the Group’s prospects and
progress against the strategic objectives set out in its three-
year plan.* Our planning process consolidates retail banner
strategies to generate a Group-wide plan. This incorporates
forecasts of the Group’s financial performance that include
cash flows which allow the directors to assess both the Group’s
liquidity and solvency positions, along with adequacy of funding.
Sensitivity analysis of the main assumptions underlying the plans
is also carried out. The plans are approved by the directors and
financial budgets and KPIs are subsequently used to monitor
performance during the year via periodic performance reviews.
In its assessment of the Group’s prospects, the Board has
considered the following:
— The Group’s strategy and how it addresses changing
customer preferences. We continue to evolve and execute
our strategy at pace and to invest for growth. We have
opened our first Screwfix stores in France and launched the
B&Q e-commerce marketplace in the UK, before launching
in Spain and Portugal, allowing us to offer more choice to
customers and increase digital market share. We have a
favourable competitive position, with lower cost fulfilment
from store-based picking and a low returns rate with no
excess warehouse expansion. We have a strong omni-
channel proposition and are investing heavily in new
technology to strengthen our online presence and
e-commerce propositions. We remain confident in both
our long-term growth and cash generation opportunities.
— The Group’s inherent resilience to risk. The Group has
an inherent resilience to risk, provided by the diversified
nature of our activities and competitive position. Many
of our products are of an essential nature and we have
balanced exposure to both DIY and DIFM sides of the
market. We continue to grow our customer base, with
high rates of revenue retention, and a significant proportion
of our sales is linked to repairs and maintenance. Our
geographic spread provides us with the ability to withstand
political instability or economic downturn in a particular
country. We have a diverse product portfolio, including own
exclusive brands (OEB) which form 45% of total sales, and
have a diversified sourcing footprint (both near and far).
— Expectations of the future economic environment.
Uncertainty remains over macroeconomic risks and
the significant and ongoing direct and indirect impacts
of the Ukraine conflict. This has resulted in higher inflation,
reduced consumer confidence and governments facing
higher budget deficits. However, recent surveys confirm
the home improvement market has a strong future, with
a high proportion of sales relating to maintenance and
repair and a greater interest in energy efficiency. There
is continued interest in the market from both younger
generations and those working from home. We are
benefiting from new industry trends which we believe
will endure and provide the opportunity for sustained
long-term growth.
— The Group’s financial position. The Group retains a
strong financial position; as of 31 January 2023, Kingfisher
had access to over £800 million of liquidity comprising cash
and cash equivalents (net of bank overdrafts) of £270 million
and access to an undrawn Revolving Credit Facility (RCF) of
£550 million (expiring at the end of May 2025, with an option
for a one-year extension). This level of liquidity is deemed
sufficient for all of the viability scenarios analysed. The Group
has low levels of debt and proven robust performance and
cash generation in previous recessions.
— Supplier and supply chain risks. The Group’s supply
chain has remained resilient through recent geopolitical
uncertainty and product availability continues to improve.
While we have some dependency on far-sourced products
from Asia, we reduce this risk through dual-sourcing key
OEB products whilst also ensuring business continuity plans
are updated regularly, covering internal points of failure and
key partner service-continuity plans (including a response
to supplier and logistics failures).
— Climate change. This year we have seen strong sales of
energy efficient products, helping our customers reduce
their carbon footprints. The Group has set ambitious targets
as part of our Responsible Business agenda, including our
net zero target by 2040 and becoming Forest Positive by
2025. We continually analyse the potential operational
impacts which could affect us so that we can remain
proactive by investing early to mitigate these.
Taking these factors into account, we have shown our business
model is resilient and we are confident that our strategy is
providing a strong foundation for sustainable long-term growth.
Assessment of viability
To assess our viability, we model different scenarios identified
by considering the potential impact of individual principal risks
and possible combinations (as shown in the table on page 60).
Our extensive risk review resulted in the addition of Climate
change as a principal risk. The additional investments being
made to realise our climate targets are already included in
the base financial projections used. Therefore, we believe
the scenarios used last year remain valid for this exercise.
We have updated elements of the scenarios to reflect the
progress made in delivering our strategy and for changes in
the external operating environment. In total, we used nine of
the principal risks in our modelling. They were chosen because
they combine to represent plausible scenarios covering a range
of different operational and financial impacts on the business.
* This Viability statement should be read in conjunction with the description of the Group’s strategy and business model, which are set out on pages 6 to 13.
59Kingfisher 2022/23 Annual Report and Accounts
The two principal risks not specifically modelled would
have similar impacts to the existing scenarios: the ‘Legal
and regulatory’ risk could result in a significant financial penalty
and related financial pressure similar to scenario 1 (demand/
operational shock) and the ‘Reputation and trust’ risk
could cause a fall in demand similar to scenario 3 (further
economic downturn).
In total, four severe but plausible individual scenarios have
been created, with a fifth ‘collective’ scenario, considering the
combined impact of scenarios 1, 3 and 4 to model a worst-case
hypothetical situation. Theoretically all these scenarios could
run together, with different impacts. Although the causes are
different, the potential impact of scenario 2 (production and
supply chain disruption) is similar to scenario 3 (further
economic downturn) and overlaying it on the collective
scenario would not make amaterial difference to the results.
None of the scenarios modelled, including the more extreme
and unlikely aggregated scenario, was found to impact the
long-term viability of the Group over the assessment period.
Inassessing each of the scenarios, we have taken account of
the mitigating actions available to us, including, but not limited to:
— Reducing discretionary operating spend, such as marketing
and travel.
— Reducing non-committed capital expenditure.
— Renegotiating prices and payment terms with suppliers.
— Freezing recruitment and reducing variable incentives.
— Temporary suspension of dividend payments.
Having assessed our current position, principal risks and
prospects of the Group and considering the assumptions below,
the directors confirm they have a reasonable expectation that
the Group will be able to continue in operation and meet its
liabilities as they fall due over the three-year assessment period.
Scenarios modelled Links to principal risks
Scenario 1 – Demand/operational shock
The whole of Kingfisher’s operations become subject to a material and unexpected reduction in demand
or operationaldisruption resulting in reduced sales for a period of time (e.g. a future pandemic or
prolonged failure ofourglobal IT infrastructure).
Assumptions:
Sales: Reduced sales during a four-week period of severe operational impact, followed by a short period
of recovery before returning to prior levels.
Margin: Margin impacted by fixed distribution costs during disruption period.
Cost: Minimal cost savings due to the acute nature of the event.
Inventory: Limited adjustment opportunity given lead times.
Risk 3: Contagious diseases
Risk 7: Geopolitical instability creating
macroeconomic volatility
Risk 8: Cyber and data security
Scenario 2 – Production and supply chain disruption
Our suppliers and supply chain continue to be affected through 2023/24 and into 2024/25 by the impact
of Covid-19 or events which impact production or supply. Stock availability is severely reduced in several
key product categories and logistics costs are significantly increased for others. Suppliers are not able to
support the increased sales volumeson key ranges.
Assumptions:
Sales: Negative sales impact with smaller stores most affected (more limited range depth so fewer
alternatives). Applied to three-year plan sales for the years 2023/24 and 2024/25.
Margin: Increased shipping and transportation costs.
Risk 3: Contagious diseases
Risk 4: Supply chain resilience
Risk 11: Climate change
Scenario 3 – Further economic downturn
Prolonged and further downturn in economic conditions across Europe with lower economic activity,
higher unemployment and higher inflation resulting in changing customer behaviours, reduced consumer
confidence andlower spending. Customers become more price sensitive and price reductions impacting
margins are required tomanage overstocks. Suppliers of key ranges default on their supply commitments.
Governments increase taxes toreduce deficits.
Assumptions:
Sales: Year-on-year sales reduction for a period of 12 months followed by recovery to initial level and then
back togrowth.
Margin: Margin reduction for a period of 24 months followed by recovery in third year.
Tax: 5% tax increase on Group Adjusted PBT for the years 2024/25 and 2025/26.
Risk 3: Contagious diseases
Risk 7: Geopolitical instability creating
macroeconomic volatility
Scenario 4 – Failure to execute our strategy
We continue to implement our strategy, including planned investments, but this fails to deliver the
expected sales growth and margin support. In addition, there is a failure to realise cost-efficiency targets.
Assumptions:
Sales: Non-delivery of planned sales growth from initiatives included in the three-year plan.
Margin: Non-delivery of margin increases linked to growth in own brand product sales.
Costs: Non-delivery of efficiency benefits.
Risk 1: Our people
Risk 2: Level and impact of change
Risk 5: Competitor behaviour
Risk 6: Responding to changing
customer preferences
Scenario 5 – A combination of scenarios 1, 3 and 4
This represents a demand or operational shock, resulting in a short period of reduced income, followed by
a furthereconomic downturn. At the same time, our strategy fails to deliver the planned benefits. This is
seen as aworst-case scenario and highly unlikely.
As above
Viability statement continued
60
Strategic Report Governance Financial Statements
Kingfisher 2022/23 Annual Report and Accounts
The Group’s business activities, together with the factors likely
to affect its future development, performance and position are
set out in the Strategic Report, including the principal risks of the
Group set out on pages 53 to 58. The financial position of the
Group, its cash flows, liquidity position and borrowing facilities
are described in the Financial review on pages 39 to 46. In addition,
note 25 of the Group financial statements includes the Group’s
financial risk management objectives and exposures to liquidity
and other financial risks.
The directors have considered the above and how they may
impact going concern as well as modelling of a remote scenario
which assesses the impact on the Group’s liquidity headroom
of a significant demand or supply shock preventing us from
realising a large part of our sales over the period of a month
followed by subdued demand for the remainder of the year.
As a result of this review, the directors have a reasonable
expectation that the company has adequate resources to
continue in operational existence for the foreseeable future
and consider it appropriate for the Group to continue to adopt
the going concern basis of accounting in preparing the annual
financial statements. Further details in relation to the use of the
going concern assumption and the scenario modelled by the
directors are detailed in note 2 of the Group financial statements.
Going concern
Strategic Report approval
The Strategic Report was approved by a duly
authorised Committee of the Board of Directors on
20 March 2023 and signed on its behalf by:
Thierry Garnier
Chief Executive Officer
20 March 2023
61Kingfisher 2022/23 Annual Report and Accounts
Corporate governance
The Kingfisher plc Board
Responsible for the overall leadership of the Group, the Board defines our purpose, values, and strategy and aligns them with our culture.
Considering the views of our key stakeholders, the Board promotes the Group’s long-term sustainable success and its contribution to
wider society. It is also responsible for the Group’s performance and governance oversight.
Group Executive
Comprises the CEO and his direct reports including the CFO, retail banner CEOs, and certain functional leads. This group meets monthly
to support and advise our CEO to develop and implement the strategic direction of the Group and its constituent businesses, to make
and implement operational decisions, and where appropriate, make Board recommendations.
Our governance structure
Our structured framework comprising the Board and its committees, enables the company and our directors to work effectively.
Nomination
Committee
Manages the
composition of
the Board and its
committees, as well as
succession planning
for the Board and
senior management.
Report can be found
from page 69.
Remuneration
Committee
Ensures rewards
are linked to our
wider strategy and
recognise success.
Report can be found
from page 77.
Responsible
Business
Committee
Oversees delivery
of our Responsible
Business activities,
providing collective
advice and assurance.
Report can be found
from page 71 with
additional reporting
from page 23.
Audit Committee
Oversees the integrity of our financial and narrative
reporting, the effectiveness of our internal controls,
risk management and audit, as well as reviewing
compliance matters.
Report can be found from page 73.
Group Investment Committee
Chaired by the CFO, this group approves all capital and revenue expenditure above the threshold reserved for approval at the banner
or Group function level. Authority for approval for such matters also resides with the CEO.
Group Climate Committee
Monitors and agrees our emission reduction commitments. Oversees our external reporting on climate-related matters and assesses
and manages our climate-related risks.
Disclosure Committee
Responsible for the framework we use to identify,
manage, and release inside information.
Dear Shareholder,
Our governance structure is designed to ensure that the right
decisions are taken at the right time and underpins our purpose to
make better homes accessible for everyone. This report describes
our structure and sets out how your company is run to serve our
customers, to look after our colleagues as a responsible employer,
to support the communities in which we operate, and to protect
our business for the long term.
A key part of being able to deliver on our purpose and our
‘Powered by Kingfisher’ strategy is ensuring that we, as a Board,
continue to be effective in how we discharge our duties. To
this end and, in compliance with the UK Corporate Governance
Code, we undertook an externally facilitated evaluation during
the year, the outcome of which is described on the following
pages along with the progress against actions from the prior
year evaluation.
With heightened macroeconomic uncertainty, maintaining a
resilient business that is able to invest for growth is vital and
your Board is committed to supporting the Executive and all of
our colleagues in executing our strategy. Ensuring that we are
an agile organisation that is able to respond to changing market
conditions and stakeholder needs is a key focus of the Board.
Read more about how we engage with our stakeholders and respond
to their views on pages 16 to 22.
Finally, I want to thank my fellow directors for all of their efforts
in supporting the management team and our ‘Powered by
Kingfisher’ strategy. Despite the challenging external backdrop,
we are confident that we have the right plan in place, supported
by a robust governance framework, that will deliver value for all
of our stakeholders over the long term and allow us to respond
with agility in the face of emerging challenges.
Andrew Cosslett
Chair of the Board
20 March 2023
62 Kingfisher 2022/23 Annual Report and Accounts
Strategic Report Governance Financial Statements
Board attendance
Directors’ attendance at Board meetings during the year is set out below. Directors who are unable to attend scheduled meetings are
encouraged to input ahead of the meeting. Detail regarding information flows to the directors can be found in the Corporate
Governance Statement on our website www.kingfisher.com/en/investors and on page 68.
Current directors Board
Andrew Cosslett 8/8
Claudia Arney 8/8
Bernard Bot 8/8
Catherine Bradley
1
7/8
Jeff Carr 8/8
Thierry Garnier 8/8
Sophie Gasperment 8/8
Rakhi Goss-Custard 8/8
Bill Lennie
2
7/7
1. Catherine Bradley was unable to attend one Board meeting due to a competing board commitment (AGM).
2. Bill Lennie joined the Board on 1 May 2022. On joining the Board, Bill became a member of the Audit and Nomination Committees.
Page no. or CGS
1. Board leadership and company purpose
Effective and entrepreneurial Board CGS, Matters Reserved,
16 – 22, 36 – 38, 51 – 61
Purpose, value and strategy CGS
Resources and controls CGS
Engagement with stakeholders CGS, 16 – 22
Workforce policies and practices CGS, 14 – 15, 25 – 26
2. Division of responsibilities
Role of the Chair CGS, Role Profiles
Composition of the Board CGS, 64 – 66
Role of the non-executive director CGS, Role Profiles
Board information, time and resource CGS, 63, 68 – 70
3. Composition, succession and evaluation
Appointment to the Board CGS, 69 – 70
Board composition CGS, 64 – 66, 69 – 70
Board evaluation CGS, 68
4. Audit, risk and internal control
Internal and external audit functions CGS, 75 – 76
Fair, balanced and understandable CGS, 73, 104
Risk management CGS, 51 – 58, 75 – 76
5. Remuneration
Aligning remuneration to strategy CGS, 77 – 100
Policy for executive remuneration CGS, 80 – 87
Independent judgement CGS, 89
Compliance with the UK Corporate
Governance Code
Kingfisher was subject to the Financial Reporting Council (FRC)
2018 UK Corporate Governance Code (the Code) for the year
ended 31 January 2023. The notes below outline how Kingfisher
applied the principles and complied with the provisions of the
Code. It is noted that, whilst the current Directors’ Remuneration
Policy (the Policy) approved by shareholders at the 2022 AGM
now complies with Provision 36, there are legacy Delivering
Value Incentive (DVI) awards made before the adoption of the
Policy that do not have phased vesting. The DVI awards will
continue in line with the approved Remuneration Policy under
which they were granted. Further details of these awards can be
found within the Remuneration Policy approved at the 2019 AGM
and included within the 2018/19, 2019/20, 2020/21 and 2021/22
Annual Report and Accounts. The current Policy can be found in
our 2021/22 Annual Report and Accounts. The Code is available
to view at www.frc.org.uk
We have published a detailed Corporate Governance Statement
(CGS) on our compliance with the Code at www.kingfisher.com/
en/investors. Our website also has copies of: the company’s
Articles of Association; Matters Reserved for the Board; terms of
reference of the Board committees; Role Profiles for the Chair,
the CEO, the Senior Independent Director, a non-executive
director, and the Company Secretary.
63Kingfisher 2022/23 Annual Report and Accounts
Board of Directors
Andrew Cosslett CBE, Chair of the Board
Appointed: April 2017 Chair of the Board: June 2017
Skills and experience: Andrew’s early career was with Unilever
in a variety of branding and marketing roles. He then spent 14
years at Cadbury Schweppes in senior international roles before
becoming CEO for InterContinental Hotels Group (IHG). Andrew
was at IHG for six years, creating value by leveraging the power
of its brands alongside executing a programme of significant
transformational and cultural change. He served as CEO
for Fitness First, where he was instrumental in successfully
repositioning the business and brand. Andrew served as a
non-executive director of the Rugby Football Union (RFU)
from 2012, where he was appointed chair from 2016 until 2021.
Andrew was appointed Commander of the Order of the British
Empire (CBE) in 2022.
External appointments: Andrew is non-executive chair of
ITV plc. Please see page 70 for further details of Andrew’s
time commitment.
Thierry Garnier, Chief Executive Officer
Appointed: September 2019
Skills and experience: Thierry spent 20 years in senior roles
at Carrefour, the French multi-national retailer. Before joining
Kingfisher, he was a member of the Carrefour group executive
committee and CEO of Carrefour Asia. From 2003 to 2008,
Thierry was the managing director of Supermarkets for
Carrefour France. Following his success in this role he became
CEO of Carrefour International and a member of the group
executive committee in 2008, where he became responsible
for operations in Asia, Latin America and various European
countries. In 2016, Thierry was awarded the Chevalier de
l’Ordre National de la Légion d’Honneur (France).
External appointments: Thierry is a non-executive director
of Tesco plc.
Bernard Bot, Chief Financial Officer
Appointed: October 2019
Skills and experience: Bernard is a seasoned CFO having
served in this role at several international listed companies.
Bernard also has significant experience of large-scale
transformation programmes, logistics and supply chain
management, technology and digital services. He was CFO at
Travelport Worldwide, a global NYSE-listed company providing
a technology platform for the travel industry, until it was taken
private in June 2019. Prior to that, Bernard was CFO of Aer
Lingus and held various senior positions at TNT and TNT
Express. Previously, he worked at McKinsey & Company as a
partner and leader of its worldwide Post and Logistics group.
External appointments: Bernard is a non-executive director
of A.P. Møller–Mærsk A/S.
Claudia Arney, Non-Executive Director
Appointed: November 2018
Skills and experience: Claudia brings a wealth of experience of
business transformation and building digital capabilities to the
Board having previously held non-executive roles, including
interim chair of the Premier League, senior independent
director of Telecity Group plc, chair of the remuneration
committee at Halfords plc, non-executive director at Ocado
Group plc, and governance committee chair at Aviva plc.
Claudia began her career at McKinsey & Company, before holding
roles at Pearson, the Financial Times, Goldman Sachs, and HM
Treasury. She was also group managing director, digital at EMAP.
External appointments: Claudia is currently chair of Deliveroo
plc, and non-executive director and remuneration committee
chair at Derwent London plc. She also serves as a member
of the Panel on Takeovers and Mergers and is the lead
non-executive board member for the Department for
Digital, Culture, Media and Sport.
Catherine Bradley CBE, Senior Independent Director
Appointed: November 2020 Representative to the Kingfisher
Colleague Forum: From June 2022
Skills and experience: Catherine provides substantial
expertise to the Board in the field of finance, risk management
and corporate governance, having previously been a non-
executive director of the Financial Conduct Authority, the
UK financial regulator, where she chaired its audit committee.
Catherine also served as an independent member of the
supervisory board of PEUGEOT S.A. where she chaired
its finance and audit committee. Prior to embarking on her
non-executive career, Catherine had a 30-year career in
investment banking based in the US, the UK and Asia. She has
French and British citizenship and was appointed a Commander
of the Order of the British Empire (CBE) in June 2019.
External appointments: Catherine is a non-executive
director and chair of the nomination and corporate governance
committee at Johnson Electric Holdings Limited, a Hong Kong
listed company. She is also a non-executive director of easyJet
plc where she chairs its finance committee, and abrdn plc where
she is chair of the audit committee.
64 Kingfisher 2022/23 Annual Report and Accounts
Strategic Report Governance Financial Statements
Key: Audit Committee Nomination Committee Remuneration Committee Responsible Business Committee Chair
Jeff Carr, Non-Executive Director
Appointed: June 2018
Skills and experience: Jeff became CFO of Reckitt Benckiser
Group plc in April 2020. Reckitt Benckiser has operations in over
60 countries and a large number of globally trusted household
brands and products. Jeff previously held an executive finance
role with Reckitt Benckiser earlier in his career. Most recently,
Jeff was CFO of Koninklijke Ahold Delhaize N.V. (Ahold Delhaize),
one of the world’s largest retail groups. Jeff was also previously
group finance director at both FirstGroup plc and easyJet plc,
and held a senior finance role at Associated British Foods plc,
as well as a non-executive director role at McBride plc.
External appointments: Jeff is currently CFO of Reckitt Benckiser
Group plc, the British multinational consumer goods company.
Sophie Gasperment, Non-Executive Director
Appointed: December 2018
Skills and experience: Sophie brings to the Board expertise
in strategy, brand and international retail markets as well as
substantial experience in business transformation and digital
capabilities, having held a number of senior leadership positions
at L’Oréal, including managing director of L’Oréal UK & Ireland,
and executive chair and global chief executive officer of The
Body Shop, as well as 12 years as non-executive director at
Accor where she chaired the Nominations, Remunerations
and CSR Committee.
External appointments: Sophie is a senior advisor at
the Boston Consulting Group. She is also a non-executive
director of Givaudan S.A., the D’Ieteren group SA/NV, and is
the lead independent director on the board of Cimpress plc,
a NASDAQ-listed technology company.
Rakhi Goss-Custard, Non-Executive Director
Appointed: February 2016
Skills and experience: Rakhi is an experienced non-executive
director, with expertise in digital retailing, strategy, analytics, and
operational execution. She spent 12 years at Amazon in various
senior leadership positions running many of Amazon’s key
categories, including high growth, mature and digital categories,
in addition to being responsible for pricing across the UK.
Prior to joining Amazon, Rakhi held roles at TomTom and
in management consultancy in the United States. She was
previously a non-executive director of Intu Properties plc.
External appointments: Rakhi is a non-executive director of
Schroders plc and Rightmove plc. She is also a non-executive
director of Trainline plc where she chairs the remuneration
committee. Rakhi is due to step down from the Board of
Rightmove plc at its upcoming AGM on 5 May 2023. Please
seepage 70 for further details of Rakhi’s time commitment.
Bill Lennie, Non-Executive Director
Appointed: May 2022
Skills and experience: Bill brings substantial industry experience
to the Board, having spent 26 years at The Home Depot, Inc.,
the largest home improvement company in the world, where
he had an outstanding track record of delivery supporting their
remarkable growth during this period. Bill was most recently
executive vice president, outside sales and services at Home
Depot and retired in 2021. During his time there, he held many
senior leadership roles including president, Canada and senior
vice president, international merchandising, private brands, and
global sourcing. Bill has a deep knowledge of merchandising and
global sourcing, and experience in developing successful trade
and services strategies. Before his time at Home Depot, Bill was
merchandising manager for Lowe’s Companies Inc. and millwork
plant manager for Menards Inc.
External appointments: None
65Kingfisher 2022/23 Annual Report and Accounts
Board composition
Board diversity and ethnicity
We have four female directors (44%) and one director from a minority ethnic background (11.11%) on our Board (as defined in the
Listing Rules).
Board nationality
Dutch
1
US
2
French
3
British
3
Current directors Tenure at 31 January 2023
0-3 years 3-6 years 6-9 years
Andrew Cosslett
5 years, 10 months
Claudia Arney
4 years, 3 months
Catherine Bradley
2 years, 3 months
Jeff Carr
4 years, 8 months
Sophie Gasperment
4 years, 2 months
Rakhi Goss-Custard
7 years
Thierry Garnier
3 years, 4 months
Bernard Bot
3 years, 3 months
Bill Lennie
9 months
* Experience of multi divisional/business unit model with responsibilities split across regions and the centre.
Board independence Director sector experience
Executive directors
Independent non-executive directors
Retail
Digital
International markets
Former CEO
Brand/marketing
Listed market experience
Remuneration/HR
Finance
Matrix-model business*
Home improvement sector
78%
22%
4
3
6
7
2
7
4
2
5
4
66 Kingfisher 2022/23 Annual Report and Accounts
Strategic Report Governance Financial Statements
Board activities
Key activities of the Kingfisher plc Board in the year
Strategy
S.172 considerations:
— Endorsed the refreshed ‘Powered by Kingfisher’ strategic pillars and 2023/24 strategic priorities.
— Monitored delivery of the ‘Powered by Kingfisher’ strategic objectives and priorities for each key initiative:
— Monitored the rollout and progress of the marketplace initiative in B&Q and Iberia.
— Monitored the rollout of Screwfix in France.
— Reviewed the OEB offer direction and strategy, including updates on Sustainable Home Products (SHP) and
on B&Q, Screwfix and their related brand campaigns.
— Reviewed Kingfisher’s franchise and partnership strategy and approach.
— Received updates on the performance of the Responsible Business strategy.
— Oversaw developments to the Group’s technology infrastructure and information security.
— Reviewed key components of the digital and technology roadmap.
— Considered customer and market insights and dashboards including key customer metrics.
Finance and
performance
S.172 considerations:
— Reviewed Kingfisher’s progress through the CEO and CFO’s reports, including:
— market and trading updates, including store and category performance;
— performance against budget and forecast, and progress of the Value Taskforce;
— dividend cover, and interim and final dividends; and
— cash flow, funding requirements, credit rating and leverage targets.
— Approved the three-year plan and annual budget.
— Approved the UK tax strategy and required disclosures.
— Approved a share buyback programme to return a further £300 million of capital to shareholders.
— Monitored macroeconomic and geopolitical forces on performance, receiving updates from external advisers.
People, culture,
vision and values
S.172 considerations:
— Endorsed the FY 21/22 Responsible Business Report for publication.
— Monitored the action taken to build and track culture across Kingfisher.
— Reviewed progress against the Inclusion and Diversity pillars and the key priorities for 2022/23.
— Monitored the level of health and safety incidents across the business.
— Received feedback from colleagues through the Kingfisher Colleague Forum (KCF).
— Reviewed progress against the People and Culture Plan and endorsed the key priorities for 2023/24.
— Received updates on the community investments made during 2022/23.
— Approved a number of matters relating to the Kingfisher Pension Scheme (KPS), including the valuation
assumptions and funding position of the final salary section of the KPS and approach to supporting the
‘Guaranteed Minimum Pension’ equalisation.
Governance and
risk
S.172 considerations:
— Conducted a physical AGM which was broadcast live and provided the option for shareholders to submit
questions online.
— Received defence planning and valuation updates supported by our brokers.
— Reviewed feedback from investor and governance roadshows.
— Monitored investor consultation around the proposed new Remuneration Policy and Performance Share Plan,
approved at the 2022 AGM.
— Reviewed the results and action plans resulting from the supplier survey.
— Considered capital expenditure and investment decisions taken by the Group Investment Committee.
— Approved:
— the Modern Slavery Transparency Statement;
— the net zero target for scope 1 and 2 greenhouse gas emissions;
— the Group’s principal and emerging risks and risk appetite statement;
— a revised Group Delegation of Authority Policy and significant contracts falling under its authority; and
— new share plan rules: a Performance Share Plan (and French Sub-Plan) and new Sharesave.
— Received annual updates on the Group’s pensions and insurance arrangements.
— Considered whistleblowing reporting across the Group.
— Externally evaluated the Board’s performance in 2022/23 and monitored progress against the actions arising from
the internal 2021/22 evaluation.
— Agreed Kingfisher’s approach to compliance with new legislation and regulation, including Economic Crime
(Transparency and Enforcement) Act and Russian Sanctions regarding withholding of dividend payments and FCA
Listing Rule requirements on Transition Plans.
Long-term impact
Interests of colleagues
Fostering business relationships
Impact on community and environment
Maintaining reputation for high standards of business conduct
Acting fairly between members
Key
67Kingfisher 2022/23 Annual Report and Accounts
2022/23 External Board evaluation
The Board and each of its principal committees conduct an
annual effectiveness evaluation and, in line with the Code,
this is externally facilitated every third year. These evaluations
are conducted in accordance with the Code and include
consideration of skills, composition and performance. This year,
Independent Audit, an external facilitator with no connection to
Kingfisher, or its individual directors, was engaged to lead our
external evaluation. The evaluation began with a review of
the Board and Committee pre-read materials, and included
observations at Board, Audit and Remuneration Committee
meetings. Individual interviews with directors, senior management
and external advisers were also held. A detailed report was then
considered by the Board and the outcome from this, as well as
progress against last year’s actions, were discussed. Overall, the
evaluation concluded that the Board is working well and benefits
from strong support from the Group Executive. In addition,
non-executives have a good understanding of their role and
all the fundamentals are in place for the Board to carry out
its functions effectively. This should enable it to continue to
support management as new challenges come into focus.
2021/22 Internal evaluation progress update
The table below outlines progress against actions agreed during the 2021/22 internal evaluation.
Board effectiveness
Areas of focus Actions taken during 2022/23
Strategy and performance
Create and plan opportunities
for the Board to engage more
often with a broad range
of management across
the business.
— In May, the Board travelled to visit the French banners, providing opportunities for directors to meet
local leadership teams, senior management (including product teams), high-potential candidates,
and store colleagues during their two-day visit.
— In October, the Board visited distribution centres and stores in Trentham and Stafford hosted by
Screwfix Management. Directors met members of Screwfix and B&Q leadership teams, senior
management including network and distribution centre teams, high-potential candidates, and
store colleagues.
— The Board was invited to attend a cyber threat tabletop event with the Group Executive in
addition to a Teach-in on Marketplace and the Investor Teach-in event held in July 2022.
— Board and Committee presentations have included attendance by senior management from
the banners and Group functions, including Internal Audit, Health & Safety, Legal & Compliance,
Cybersecurity, Responsible Business, Logistics and Technology.
Board information
Increase the Board’s
understanding of the
wider stakeholder groups.
— Board presentation held in March on the output of 2021/22 Supplier Survey conducted to capture
suppliers’ sentiment.
— Board received a presentation on Sustainable Home Products (SHP), specifically customer sentiment.
— Board received regular Customer Insights updates and presentations and, in September, received
external presentation on pro and home improvement market trends across Europe.
— Board received a CEO Update at each meeting, including NPS and Brand Health data.
— Board received feedback on our employee engagement survey (Peakon) and from the Kingfisher
Colleague Forum.
— Chair, Chair of the Remuneration Committee, and the Senior Independent Director received
feedback from investors directly and at the Teach-in in July 2022.
Governance
Create opportunities for wider
discussion and dialogue around
subject matter in meetings.
— Guidance given to presenters ahead of each meeting to clarify minimum standards.
— Presentations limited to key highlights with sufficient time reserved for questions.
— Nomination Committee meetings extended to accommodate additional discussion.
Governance
Continue to build and maintain
good Board relationships.
— Cycle of discussion meetings and informal get togethers introduced during 2022/23.
— Non-executive only meetings and meetings of the non-executives and CEO (without the Chair)
held through 2022/23.
Finding Action plan for 2023/24
Keep under review the
key drivers of
long-term growth.
— Continue to review strategic priorities in
light of progress made and the changing
external environment.
— Endorse and help shape primary focus
areas for the Board agenda in 2023/24.
Make further
improvements to the
information coming to
the Board.
— Further refine the Board information flows
to aid synthesis of key messages and
reduce the overall volume.
— Keep under review the balance of time
allocated to presentations and discussion.
Increase the Board’s
visibility of our people
and culture.
— Establish a schedule of Teach-ins for
non-executive directors to deep dive
in operational areas.
— Establish a programme for directors to
individually spend a day in different parts
of the business each year.
Catherine Bradley received separate reporting regarding
the outcome of the Chair’s evaluation and led a discussion
of the report with the other non-executive directors. Based
on the review, the Board concluded that the Chair continued
to operate effectively and that there were no concerns
regarding his performance.
68 Kingfisher 2022/23 Annual Report and Accounts
Strategic Report Governance Financial Statements
Nomination Committee report
Dear Shareholder,
The role of the Nomination Committee is to ensure the Board
maintains the required skills and experience to boost business
resilience and deliver the ‘Powered by Kingfisher’ strategy. This
report describes the Committee’s activities during the year.
Andrew Cosslett
Chair of the Nomination Committee
20 March 2023
Selection and appointment of Board members
During the year, the Committee oversaw the search process
for a non-executive director, resulting in the appointment of
Bill Lennie in May 2022. Bill’s appointment further enhances the
diverse mix of skills and experience on the Board; specifically,
in the home improvement retail sector.
Search process
1. Board composition review
The Committee evaluates the structure, size and composition of the
Board and its Committees, including, the balance of skills, knowledge,
experience, diversity and tenure of the directors and, taking into account
the company’s business model, strategy, and external environment.
We then agree the search criteria.
2. Role brief development
A comprehensive role brief is prepared that is aligned to the desired Board
and committee composition, our Board Inclusion and Diversity Policy, and
any other relevant corporate governance requirements, including the
time commitment expected. All role briefs should be free from bias.
3. Shortlisting
The company’s retained search consultants prepare an initial longlist of
candidates from a broad range of backgrounds. The Chair and Company
Secretary then work with the search consultants to refine this into a
shortlist for review by the Committee. We then agree the candidates
for interview based on merit and against objective criteria, whilst taking
into account all types of diversity and the time available to devote to the
position. Where appropriate, the Committee challenges the scope of the
search and breadth of the pool from which the longlist has been drawn.
4. Interview
Through a multiple-stage interview process, a panel of directors will
meet prospective candidates. Whilst the selection of the directors to
the panel will be flexed as appropriate for the role in question, the Chair,
the Senior Independent Director and the CEO always participate. After
the first round of interviews, the panel agrees which candidates should
be invited for final interview and with whom the candidate should meet.
5. Recommendation to, and approval by, the Board
Upon completion of a search, the Committee will make
recommendations for new appointments to the Board for approval.
The Committee is supported by Egon Zehnder and Heidrick &
Struggles, our retained search consultants, in our selection and
appointment of Board members. Egon Zehnder does not have
any other relationship with the company or its directors;
Heidrick & Struggles was engaged to facilitate inclusive
leadership training to the Board and all senior leaders across
Group functions during the year and otherwise has no other
relationship with the company or the directors. Both are
accredited firms under the UK Government’s Enhanced Code
of Conduct for Executive Search Firms and signatories to the
latest Standard Voluntary Code of Conduct for Executive
Search Firms (the Voluntary Code), supporting gender
and ethnic diversity on corporate boards.
Induction
Each new director receives a tailored induction to help establish
a broad knowledge and full understanding of the company’s
operations and challenges, aspirations, governance and culture.
During the year, Bill Lennie commenced a comprehensive and
ongoing induction plan, which the Committee oversaw.
Eligible Attended
Andrew Cosslett
1
3 3
Claudia Arney
3 3
Catherine Bradley
3 3
Jeff Carr
3 3
Sophie Gasperment
3 3
Rakhi Goss-Custard
3 3
Bill Lennie
2
3 3
1. Chair of the Committee.
2. Appointed to the Committee on 1 May 2022.
In addition to scheduled meetings, one ad hoc meeting was
held during the year to oversee the search process for a
non-executive director.
The Nomination Committee is comprised solely of
independent non-executive directors. Its terms of
reference are reviewed annually and are available on the
company’s website. The Chair of the Committee reports
on its activities during each subsequent Board meeting.
The 2022/23 effectiveness evaluation was facilitated by
external provider, Independent Audit, and concluded that
the Committee operates effectively and raised no areas of
immediate concern.
Further detail on the evaluation process can be found on page 68.
Board composition and succession planning
The Board considers its own performance and composition
annually as part of the Board evaluation process. More detail on this
process can be found on page 68 of the Corporate Governance
report. During the year, the Nomination Committee kept the
structure, size, composition and diversity of the Board and its
committees under review, including a review of tenure so that we
can best anticipate retirement within our non-executive population
and balance continuity with the introduction of fresh perspectives.
We also continued to plan for the succession of roles at the Board
and Group Executive level to maintain the relevant mix of skills,
experience, and capabilities in key areas. This included a detailed
consideration of succession plans in place for executive and key
senior leadership roles, including the Group CEO and Group CFO,
as well as potential initiatives to strengthen its pipeline.
To support these processes at Board level, we have used our
skills and experience matrix to capture and monitor the combined
strategic and committee experience considered relevant
and appropriate for Kingfisher, as a UK-listed company and
an international, matrix-model retail business.
The skills of our directors are summarised on page 66.
69Kingfisher 2022/23 Annual Report and Accounts
Each induction is phased and gives directors the opportunity
for customisation based on their feedback. As well as tailored
features, each induction programme ordinarily includes:
— Individual one-to-one meetings with all directors and the
Company Secretary.
— Meetings with members of the Group Executive, senior
members of Group functions and retail banners, and
dependent on their role, with the external auditors,
brokers, investors, and legal advisers.
— Briefing sessions on the activities of each of the
Board’s committees.
— Visits to the company’s stores, office locations, and key
sites across the business.
— Ongoing access to the Board’s online resources, including
to meeting minutes, key reference materials, and briefings
on market status and competition.
Board inclusion and diversity
The Kingfisher Board believes in the value of inclusion and diversity
throughout the company, including that it is in the company’s best
interests to have a diverse board that reflects the communities
in which we operate. A diverse board champions a culture that
is fully inclusive and the benefits that it brings to overall board
composition, board effectiveness and better decision-making.
Therefore, we are pleased to confirm that the Board already meets
the Listing Rules diversity benchmark target (as at 31 January 2023
and the date of publication of this report) and at least 40% of the
Board are women, one of the senior board positions is held by a
woman (SID) and one director is from a minority ethnic background.
Kingfisher’s policy on Board Inclusion and Diversity (the ‘Policy’)
supports the Board in achieving this aim and the Committee
keeps it under review and monitors the company’s performance
against its objectives. During the year, the Policy was refreshed
to bring further alignment with the company’s inclusion and
diversity ambitions and to reflect the new Listing Rules. The
Committee’s recommendations included the addition of:
— diversity of professional and educational background to
the list of diversity characteristics considered;
— the company’s own target to have at least one additional
diverse leader on each Banner Executive Management
board by 2023; and
— a new policy objective to reflect the Parker Review
recommendation to adopt the Voluntary Code for
executive search firms.
A copy of the Policy is available on our website (www.kingfisher.com/
corporate-governance).
A separate Kingfisher Group Diversity Policy (which also covers
inclusion) applies to all employees in the Kingfisher Group of
companies. The Committee supports the work undertaken
by management to develop a diverse and inclusive pipeline
of talent. Pages 14 to 15 set out our People and Culture Plan in
more detail, including the gender diversity of senior management
and colleagues.
For the time being, we are satisfied that good progress is being
made towards Board Inclusion and Diversity. During the year, the
Board participated in inclusive leadership training, facilitated by
Heidrick & Struggles.
As part of director searches, the Committee considers
the search pool to ensure it is sufficiently wide and covers
candidates with a mix of backgrounds and diversity that may
include race, disability, gender, sexual orientation, beliefs, and
age, as well as culture, personality, professional and educational
background, and workstyle. The Committee always considers
the Board’s current and desired composition, bearing in mind
these considerations, when making our recommendation to the
Board on any new appointment.
As well as the Listing Rules diversity benchmark target, during
the year, the Board continued to meet the targets of the FTSE
Women Leaders Review and the Parker Review on ethnic
diversity. We have met these targets (as required for the
relevant year) since 2016. The gender and ethnic diversity of the
Board is set out on page 66. There are four women (33.33%) in
the company’s executive management including the Company
Secretary (as defined in the Listing Rules). Improving gender and
ethnic diversity in leadership continues to be a priority for the
company and forms part of the People and Culture Plan set out
on pages 14 to 15.
Independence, time commitment, and re-election
to the Board
New directors are advised of the time commitment expected
from them on appointment. During the year, the Committee
conducted its annual review of the non-executive directors’
independence and time commitments taking into account
the recommended guidance from investor bodies and
Kingfisher’s top shareholders. The Committee believes
that each non-executive director remains independent and is
not overextended or unable to fulfil their duties to the Board.
Directors have demonstrated a strong commitment to their
roles in their attendance at Board and Committee meetings
set out on pages 63, 69, 71 and 73 of the governance report.
The Board considers existing time commitments before approving
new appointments. Three directors in particular had changes to
their time commitments during the year. Andrew Cosslett joined the
board of ITV plc in June 2022 and became chair in September 2022,
Rakhi Goss-Custard joined the board of Trainline plc in June 2022
but noted she would step down from the board of Rightmove plc at
its upcoming AGM in May 2023 and Sophie Gasperment stepped
down from the board of Accor SA in May 2022. The directors have
given careful consideration to their external time commitments to
ensure that they are able to devote an appropriate amount of time
to their role at Kingfisher. In approving these appointments, taking
into account each director’s total external time commitments, the
Board was satisfied these changes would not compromise their
commitments to their roles on our Board and committees.
All directors are subject to annual re-election by shareholders, as
required by the company’s Articles of Association.
Kingfisher’s policy allows executive directors to hold one external
non-executive directorship.
Our areas of focus in 2023/24
— Continued focus on longer-term succession planning at the
Group Executive level.
— Focus on initiatives to strengthen the Group’s pipeline for
executive and key leadership roles.
— Continue to support delivery of the Board Inclusion and
Diversity objectives.
Nomination Committee report continued
70 Kingfisher 2022/23 Annual Report and Accounts
Strategic Report Governance Financial Statements
Responsible Business
Committee report
Dear Shareholder,
The Responsible Business Committee’s commitment is to
support and oversee the delivery of the Responsible Business
strategy, an integral part of ‘Powered by Kingfisher’, and, in doing
so, amplify our impact and ensure that Responsible Business is
integrated into our governance and is always robust, transparent
and accountable. The Committee ensures that Kingfisher
delivers on its ambition to lead the industry in Responsible
Business practices and empowers our stakeholders to
bring about positive change for our customers, colleagues,
communities and the planet, whilst remaining pertinent to
the wider strategic agenda. The Committee’s role includes
appraising performance against the strategy and providing
collective assurance and advice to the Group Executive and
Board on all Responsible Business matters, and monitoring
performance against our Responsible Business priorities.
During the year, the Committee continued to champion the
Responsible Business agenda, providing independent challenge
and oversight on behalf of the Board on our four Responsible
Business priorities. The Committee engaged with stakeholders
to bring to life Responsible Business and drive positive change.
This included developing opportunities to monitor customer
trends and insights and adapting the ways in which we interact
with colleagues, customers and suppliers to encourage
engagement and ambassadorship and understand the
Responsible Business topics that resonate most with them.
The Committee also informed and monitored the actions the
business was taking to drive the Responsible Business agenda
and their effectiveness. Further detail on our Responsible
Business priorities and fundamentals, together with the business
activities delivering progress against them, is set out in the
Strategic Report on pages 23 to 26 and in the Responsible
Business Report available on the company’s website.
Materials for Committee meetings are structured to support the
Committee to oversee the delivery of our priorities, maximise
stakeholder engagement, ensure meaningful focus on the
Responsible Business fundamentals and facilitate adequate
challenge by Committee members. Board and Committee
members also receive a variety of updates on a monthly
and quarterly basis, including Responsible Business KPIs.
The Committee is kept informed of relevant regulatory
and legislative developments and oversees key events in
the reporting cycle, including our Responsible Business
Report, climate-related financial disclosures, Modern
Slavery Transparency Statement, ESG investor
engagement and our approach to ESG ratings.
Sophie Gasperment
Chair of the Responsible Business Committee
20 March 2023
Colleagues
The Committee focused on colleague engagement, using direct
feedback to identify the topics that resonated most with them
and to understand how well equipped our colleagues felt to
relay our Responsible Business key messages to customers and
suppliers. The Committee analysed deep dives on engagement
campaigns including the colleague engagement survey, and on
inclusion and diversity, such as inclusive youth employment
in France.
We heard from representatives of Affinity Networks in Poland,
B&Q, Screwfix and Group functions about the benefits of
providing a safe and supportive environment for colleagues
to discuss inclusion and demonstrate allyship with minority
and marginalised groups.
The Chair of the Committee relayed her insights from the
Kingfisher Colleague Forum to inform action plans and to ensure
colleague views remained front and centre of discussion.
Eligible Attended
Sophie Gasperment*
2 2
Rakhi Goss-Custard
2 2
Thierry Garnier
2 2
John Mewett
2 2
Kate Seljeflot
2 2
Henri Solère
2 2
* Chair of the Committee.
In addition to scheduled meetings, two ad hoc meetings
were held during the year to consider the results of the
2021/22 and 2022/23 Committee evaluations.
The Responsible Business Committee is comprised of two
independent non-executive directors, our CEO and other
members of the Group Executive. Its terms of reference
are reviewed annually and are available on the company’s
website. The Chair of the Committee reports on its
activities at each subsequent Board meeting.
The 2022/23 effectiveness evaluation was facilitated by
external provider, Independent Audit, and concluded that
the Committee operates effectively and raised no areas
of immediate concern.
Further detail on the evaluation process can be found on
page 68.
71Kingfisher 2022/23 Annual Report and Accounts
Customers
The Committee reviewed the impact and effectiveness of
Kingfisher’s Responsible Business agenda with customers. This
included an update from B&Q, Screwfix and Castorama France
on their Responsible Business communication plans and their
effectiveness, as well as an analysis of customer insights. These
insights provided the Committee with a customer perspective
on sustainability and the key barriers to more sustainable homes,
which, together with an awareness of the latest industry trends,
facilitated discussion on customer communications, research
and investment in Responsible Business products and services.
The Committee also monitored progress on the Sustainable Home
Products (SHP) programme and endorsed the SHP targets and
the associated communication plan. Other updates included the
Kingfisher energy efficiency campaign and B&Q’s Energy Saving
Service, including the assessment of their impact on relevant
stakeholders and the wider Responsible Business agenda.
Planet
As part of monitoring performance against the Planet priority,
the Committee reviewed the company’s net zero commitments
and delivery roadmap, including implications for banners, and
key activities and milestones for reducing emissions. It also
guided management’s approach to communicating and
reporting on the company’s climate targets.
We received presentations directly from banners on Responsible
Business Planet communications and actions being taken to help
colleagues further promote positive practices in B&Q, Screwfix
and Castorama France. These included raising awareness of
sustainability and encouraging colleagues and customers to
share the concrete actions they were taking to become more
eco-responsible.
The Committee also oversaw the review process for the policies
which underpin our Planet commitments, including our Forest
Positive, Environmental and Sustainable Packaging policies.
Responsible Business Committee report continued
Communities
The Committee assessed the impact and breadth of community
projects and investment across banners, including the banner
Foundations. This covered our action to address situations
of conflict and disasters, such as the Brico Dépôt Romania
Foundation’s response to the refugee crisis arising from the
conflict in Ukraine, and the B&Q community fundraising event
‘Raise the Roof’ in response to the UK’s cost of living crisis.
In monitoring the delivery of our Community priority, we also
considered our charity partners and their support in enabling
us to maximise the impact of our giving, as well as community
employability partnerships targeted at youth development
in France.
The Committee also oversaw the review process for the
policies which underpin our Community commitments,
including our Human Rights and Community policies.
Our areas of focus in 2023/24
At each meeting the Committee considers the monitoring
of progress on our four Responsible Business priorities
and underlying fundamentals, the feedback received from our
colleagues and customers, the topics and key events coming up
in the Responsible Business reporting cycle, and any regulatory
or legislative updates relevant to its area of activity. This, in turn,
helps to shape the agenda for the next Committee meeting. In
2023/24, the Committee will review the Responsible Business
agenda to ensure it remains effective in driving our ambitions
set by ‘Powered by Kingfisher’ and that it is focused on making
the most of colleague engagement and of our significant
investment in Responsible Business in order to optimise
the delivery and impact of our Responsible Business
priorities, including:
— Colleagues – recommending opportunities for driving
further inclusion and diversity; enhancing the interaction
with our banners to further embed Responsible Business
practices and responding to issues and opportunities that
colleagues are sharing.
— Communities – assessing the impact of our response
to conflict and disasters and developing opportunities to
further support the community through cost of living crises.
— Planet – influencing and monitoring performance against
our responsible sourcing and climate change commitments.
— Customers – inspiring and supporting our customers to
create more sustainable homes through SHP.
72 Kingfisher 2022/23 Annual Report and Accounts
Strategic Report Governance Financial Statements
Audit Committee report
Dear Shareholder,
The role of the Audit Committee is to provide independent
challenge and oversight on behalf of the Board, of the accounting,
financial reporting, risk management and internal control systems
of the Group. It also oversees our Internal Audit function and
Kingfisher’s relationship with our external auditor, Deloitte LLP
(Deloitte). The Committee has an annual forward agenda which
evolves as the risks and priorities of the business change.
During the year, the Committee received presentations
from a number of banners and Group functions regarding their
control environments and the mitigating actions that are in place
to manage key risks. In addition to the usual periodic reporting
and audit activities, the Committee continued to monitor the
Department for Business, Energy & Industrial Strategy (BEIS)
proposals to improve trust in audit and corporate governance.
Following the publication of the BEIS Response Statement on
31 May 2022, the Committee believes that our existing plans,
managed through the Group’s Internal Controls over Financial
Reporting programme (ICFR), remain valid and the company is
well prepared to address these requirements as they develop.
The following pages further describe the Committee’s activities
and key judgements during the year.
Jeff Carr
Chair of the Audit Committee
20 March 2023
Always ‘fair, balanced and understandable’
All company financial statements and results announcements
are reviewed by the Committee with the support of the
Disclosure Committee. It is the Committee’s role to consider
and challenge management regarding accounting principles,
policies and practices applied, as well as any financial reporting
issues and significant judgements made. The Disclosure
Committee is comprised of the CFO, Group Company
Secretary, Group General Counsel, and Group Investor
Relations Director.
After reviewing the 2022/23 Annual Report and Accounts and
full-year results announcement, we recommended to the Board
that the disclosures, and the processes and controls underlying
their production, met the legal and regulatory requirements for a
UK listed company. We believe that taken as a whole, the Annual
Report and Accounts and announcement of full-year results
were fair, balanced, and understandable. Our review extended to
the publication of these documents in a structured XHTML web
browser format and electronic tagging of the primary financial
statements, ensuring that the necessary procedures had been
completed by all parties, including our technical accounting
team and a specialist IT provider. No external assurance was
considered necessary for the electronic tagging.
Going concern and viability statements
The Committee received a report on both the company’s
ability to continue operating as a going concern and on the
rationale and risk mitigations underpinning the sensitivity analysis
undertaken. This analysis included the modelling of a remote
downside scenario which considered the impact of a significant
drop in sales resulting from a significant event such as a
cyberattack, IT or supply chain failure. The Committee is of the
view that the company would have sufficient headroom under
its key financial covenants. Following review, we recommended
both statements for approval by the Board.
The Committee also noted correspondence received from
the Financial Reporting Council commending the company’s
disclosure in its 2021/22 Annual Report in relation to viability
assessment scenarios. The Committee welcomed this feedback
and continues to look for ways to enhance the company’s
reporting to ensure that it remains useful and informative
for stakeholders.
The Viability statement and Going concern are set out on pages 59 to 61.
Eligible Attended
Jeff Carr
1
4 4
Catherine Bradley 4 4
Rakhi Goss-Custard 4 4
Bill Lennie
2
3 3
1. Chair of the Committee.
2. Appointed to the Committee on 1 May 2022.
The Audit Committee is comprised solely of independent
non-executive directors. Jeff Carr is a qualified chartered
accountant and a CFO with experience in both the retail
sector and UK listed companies. His financial experience
makes him the right person to fulfil the Committee’s
responsibilities and the Code requirements. The Committee’s
terms of reference are reviewed annually and are available
on the company’s website.
The Chair of the Committee reports on its activities during
each subsequent Board meeting. The 2022/23
effectiveness evaluation was facilitated by an external
provider, Independent Audit. The evaluation concluded that
the Committee operates effectively and raised no areas of
immediate concern.
Further detail on the evaluation process can be found on page 68.
73Kingfisher 2022/23 Annual Report and Accounts
Significant financial reporting matters
We assess all issues that may affect the integrity of the company’s published financial statements to ensure that each is treated
appropriately. For 2022/23, we monitored the following significant financial reporting matters and took appropriate actions. The
Committee discussed these matters with Deloitte and, where appropriate, they have been addressed as key audit matters in the
Independent auditor’s report from page 105.
Matter
considered
Role of the
Committee
Conclusion
Does the carrying
value of stores and
goodwill require any
impairment charges
or reversals?
— We examined the results of management’s year-end
impairment exercise and assessed the validity of cash
flow projections based on the company’s three-year
strategic plans and the financial assumptions used. These
assumptions included forecast sales growth, margin and
operating profit percentages, discount rates and
long-term growth rates.
— Our review included consideration of actual trading
during the year, expectations for the future market
environment, and the impact of Kingfisher’s strategy.
It also included consideration of the nature and level
of overheads that are necessarily incurred to generate
cash inflows in the context of allocation to individual
store or goodwill cash generating units.
— We reviewed the significant increases in the discount
rates used to calculate the present value of forecast
cash flows and agreed with management’s view that
this represented an indicator of impairment.
— Sensitivity analyses were reviewed for changes
in operating cash flows and discount rates.
— The Committee endorsed the recognition of store
net impairment charges of £139 million (recorded
as adjusting Items), principally in the UK and France.
Refer to notes 3, 6, 15, 16 and 17 to the consolidated
financial statements.
— The Committee also endorsed the recognition of
an adjusting impairment charge of £16 million for
Romania goodwill. Refer to note 13 to the
consolidated financial statements.
What should the
treatment of liabilities
and contingent
liabilities be in
relation to uncertain
tax positions?
— We reviewed various tax positions and audits across the
Group’s jurisdictions. These included transfer pricing
arrangements and the European Commission state
aid investigation. This review included the appropriate
recognition and measurement of assets and liabilities
recorded, and the classification and disclosures of
contingent liabilities.
— The Committee endorsed management’s
accounting judgements relating to uncertain
tax positions. In relation to the state aid case, a
non-current asset of £64 million is recorded on the
balance sheet, reflecting the amount paid to the UK
tax authorities in 2021/22 and which is considered
to be recoverable. Refer to notes 3, 10 and 35 to
the consolidated financial statements.
What are the principal
judgements relating to
inventory valuation?
— We closely monitored the levels of inventory in each
banner as well as the performance of the Group’s OEB
and the estimated impacts on future selling prices of
range review and clearance activities. This included
consideration of our trading performance, stock
availability, the Group’s management of seasonal
stock, new ranges and the impact of inflation.
— The key consideration was the appropriateness of the
Group’s inventory provisions and policy, which considers
factors including stock turn, range or de-listed status,
shrinkage, damage, and obsolescence when assessing
net realisable value. This included an assessment of any
significant judgemental provisions or exclusions from
the standard mechanical provision calculations.
— The Committee endorsed management’s
accounting estimates relating to inventory valuation
(£3.1 billion in note 19 to the consolidated financial
statements), and that the provisions recorded were
appropriate considering the quality and profile of
inventories held by the Group at the reporting date.
Refer to notes 3 and 19 to the consolidated
financial statements.
Are appropriate
actuarial assumptions
being used in respect
of the valuation of
the company’s
pension scheme?
— The Committee reviewed the principal market rates and
assumptions used to value the Group’s defined benefit
pension schemes, in particular for the significant UK
scheme. This review included interest rates on high-
quality corporate bonds, inflation and mortality rates,
and followed the completion in the year of the triennial
valuation for funding purposes.
— The Committee endorsed management’s
accounting estimates relating to defined
benefit pensions and the recognition in other
comprehensive income of £278 million of net
remeasurement losses. Refer to notes 3 and 28
to the consolidated financial statements.
The Committee also reviewed the relevant disclosures in relation to climate change, including compliance with the Task
Force on Climate-related Financial Disclosures (TCFD) requirements, and considered whether the impact of climate change
represented a key source of estimation uncertainty or critical accounting judgement in the financial statements.
The Committee endorsed management’s disclosures and its assessment that climate change does not represent a key
source of estimation uncertainty or a critical accounting judgement, given the limited financial impacts expected in the
time horizons used in forecasts such as for going concern or impairment testing purposes.
Audit Committee report continued
74 Kingfisher 2022/23 Annual Report and Accounts
Strategic Report Governance Financial Statements
External audit
The Committee’s oversight of our relationship with our
external auditor includes making recommendations to the
Board regarding their appointment, reappointment, and removal,
as well as continuously assessing Deloitte’s independence and
negotiating the audit fee.
The 2021/22 reporting cycle marked the conclusion of a
three-year fixed fee agreement with Deloitte for audit services.
During 2022, the Committee considered and approved a new
proposal from Deloitte for a one-year agreement with future
year fees negotiated on an annual basis. The increase in audit
fees compared with prior years has been driven by the significant
increase in regulations over recent years which have required
greater involvement from senior specialists, together with
significant wage cost inflation across the professional
services sector.
The fees paid to Deloitte for their audit services in 2022/23
are set out in note 8 to the consolidated financial statements.
Deloitte were appointed as auditor in 2009/10 and subsequently
reappointed in 2019/20 after a comprehensive and competitive
audit tender process. Nicola Mitchell has been external audit
engagement partner since the start of the 2019/20 process.
Kingfisher complies with the Statutory Audit Services for Large
Companies Market Investigation (Mandatory Use of Competitive
Tender Processes and Audit Committee Responsibilities) Order
2014 and the Code.
Non-audit services
Deloitte also engage in a range of non-statutory audit services
such as the interim review, additional assurance procedures,
shareholder circulars, regulatory filings and certain business
acquisitions and disposals for which we may consider them
from time to time. Work in any of these areas is awarded by
competitive tender.
We review our policy governing the use of Deloitte to provide
non-audit work each year to make sure it reflects the FRC’s
Ethical Standard as applied to listed public interest entities.
The current policy, approved In 2020 and reviewed by the
Committee during the year, can be found on the website.
Fees for non-audit services are also set out in note 8 to the
consolidated financial statements.
Independence, effectiveness, and reappointment
During the year, the Committee considered Deloitte’s
independence and decided that no breaches of policy had
been identified. We have not found anything that would call
into question their independence or objectivity in providing
a true and fair opinion on the company’s financial statements
and Annual Report. In addition, Deloitte confirmed they were
not aware of anything that they should bring to the company’s
attention in relation to their independence and objectivity.
The Committee also considered Deloitte’s effectiveness and,
through a survey of the Committee members and management,
reviewed the experience and expertise of the audit team, as well
as the quality of planning and execution of the audit. This review
was supported by management discussions and feedback from
the banners and Group functions, with the conclusion reached
that the audit was judged to be effective.
Following the outcome of this evaluation process, the
Committee recommended Deloitte’s reappointment under
the current external audit contract for the financial year ending
2022/23 and this was approved at the 2022 AGM. The Board
also expects to propose Deloitte’s reappointment at the 2023
AGM. The company will be required to put its external audit
process out to tender again no later than the audit of the
financial year ending 2029/30.
Accountability, risk management and internal control
Ensuring accountability
On behalf of the Board, the Audit Committee oversees
the company’s system of internal control, including its risk
management framework and the work of the Internal
Audit function.
Internal Audit reports directly to the Committee and has
authority to review any part of the organisation and to oversee
the audit and risk committees of the retail banners. Internal
Audit reports annually to the Board and regularly to the Group
Executive and Audit Committee so that our leadership always
has objective assurance on the control environment across
the Kingfisher Group.
The Group’s approach in this regard complies with the
requirements of the Code and was developed with reference
to the FRC’s Guidance on Risk Management, Internal Control
and Related Financial and Business Reporting. The Committee
provides an independent overview of internal control matters
while Deloitte’s reports to the Committee include key audit
risk and control findings relevant to the audit process.
During the year, the Committee has continued to monitor the
implementation of an enhanced framework for Internal Controls
over Financial Reporting (ICFR programme). The publication of
the FRC’s position paper in July and subsequent three-year plan
statement in December setting out plans to revise the Code,
adding a greater level of reporting and evidencing on the
effectiveness of internal controls, has further underlined
the importance of the ICFR programme. The Committee is
confident that the company will be in a position to conduct a
full-year cycle of assessment, testing and reporting against the
new ICFR controls framework in 2023/24 and will be ready to
meet the future requirements of a revised Code.
In addition to financial controls, the Committee receives
regular updates on litigation and compliance, including reports
on the company’s ‘Speak Up’ whistleblowing hotline that was
relaunched in 2021. Operating as a responsible business is a key
element of the ‘Powered by Kingfisher’ strategy and the
Committee plays a fundamental role in overseeing the process
to ensure the highest ethical standards are maintained across
Kingfisher’s business.
More information on the company’s Code of Conduct and the role
of the Group Ethics and Compliance Committee can be found on
page 26.
75Kingfisher 2022/23 Annual Report and Accounts
Managing risk and internal control
The risk assessment process in place across the Group directly
impacts the way in which significant business risks are identified,
measured, and managed. The Committee’s consideration of
risk management and internal control is driven primarily by the
company’s assessment of its emerging and principal risks and
uncertainties, discussed on pages 51 to 58. During the year, the
Committee received briefings from the Internal Audit and Risk
Director, as well as from retail banner CEOs and Group function
directors, on operational risks and associated controls, including
on risk mitigation and control improvements.
The Board is responsible for establishing a framework of
effective controls for assessing and managing risk. Our internal
control environment is codified in a suite of policies, procedures,
operating standards, and delegated authorities to ensure the
right actions are approved and taken quickly. We aim to manage
rather than eliminate the risk of failure to achieve our business
objectives as it is not possible to provide absolute assurance
against material misstatement or loss.
Management is responsible for applying judgement when
evaluating and managing the risks the company faces as part
of its operations.
The company’s approach to risk management is also discussed on
pages 51 and 52.
There are clear processes for controlling and monitoring the
system of internal control and reporting any significant control
failings or weaknesses. These include:
— The annual planning process and regular financial reporting
to compare our results with those set out in our strategic
plan and against previous performance.
— Quarterly updates on financial risks and internal controls
for financial reporting (ICFR) are made against the global
controls framework prescribed by the Group and detailed
control design assessments updated by all banners and
global functions for each reporting period.
— Reports from the CEO and CFO at each Board meeting.
— Periodic reports from banner CEOs and Group function
directors on the control environment in their businesses
and improvements made thereto.
— Reports and presentations to the Board on certain
specialist risks, including treasury, insurance, tax,
governance, cyber threats, and pensions.
Additionally, banner CEOs and Group function directors certify
compliance with the Company’s policies and procedures and
that the relevant internal controls were in operation during the
period. Any weaknesses are highlighted, and the results are
reviewed by the Internal Audit and Risk Director, the CFO,
the Committee, and the Board. Furthermore, full substantive
testing of financial reporting controls is in the process of being
rolled-out across the Group to support the updated global
controls framework.
Each year, the Internal Audit function’s reviews are aligned
to the company’s principal risks. The function works with the
banners and Group functions to develop, improve, and further
embed risk management activities into their operations.
This year, the Committee also considered high-velocity risks
which is those unexpected risks that could materialise at pace
and cause a significant impact. Following a process conducted
by the Group Executive to identify the high-velocity risks, the
Committee reviewed the output from the exercise, noting the
appropriateness of existing mitigation efforts, and endorsed
management’s recommendations to improve understanding
and readiness to act in the event of a risk materialising.
Group Internal Audit
During the year, the Committee received progress updates
from the Internal Audit and Risk Director on:
— Delivery of the Internal Audit change programme designed
to strengthen the role of Internal Audit.
— The company’s risk management systems.
— Detailed outputs of internal audits conducted in several
areas, including:
— Strategic: Progress on Fix France, Implementation of a
common SAP reporting platform in Brico Dépôt France.
— Financial risks: rebates recognition, financial control
health checks, payroll processes, stock counts,
GNFR payments.
— Operational risks: forecast and replenishment, OEB
tendering, privileged access management, Javascript,
vendor master data, pricing and margin control, critical
supplier management.
— Compliance risks: ethical sourcing, Screwfix Foundation,
GFR contract management, GDPR management of
inactive customers.
During 2020/21, Ernst & Young LLP (EY) conducted an
independent evaluation of the effectiveness of the Internal
Audit function. An Internal Audit roadmap and milestones for
delivery during 2021/22 and beyond were developed and
approved by the Committee. During 2022/23, the change
programme deliverables have been substantially completed.
This has included:
— Continuing to deepen relationships with key stakeholders
in banners and Group functions to facilitate audit planning
and delivery.
— Enhancing the functionality of in-house developed tools
to facilitate the delivery of audit work and monitoring of
actions and reporting of audit themes.
— Developing a stronger and more consistent approach to
the use of data analytics in audits.
— Embedding a quality assurance programme over
audit delivery.
— Continuing to develop the Group’s risk management
framework and Board reporting, including a project focused
on identification and management of high-velocity risks.
The remit, organisation, and resources of the Internal Audit
function were reviewed as part of the internal effectiveness
evaluation that was conducted internally by the Company
Secretary and captured the views of Committee members,
relevant executive directors, and senior management including
banner CEOs and Group function directors. The Committee
and management continued to rate the Internal Audit function
highly and, in doing so, endorsed the ongoing actions being
implemented as part of the roadmap set out in 2020/21.
Audit Committee report continued
76 Kingfisher 2022/23 Annual Report and Accounts
Strategic Report Governance Financial Statements
Directors’ remuneration report
Dear Shareholder,
As Chair of Kingfisher’s Remuneration Committee, I am pleased
to present the Directors’ remuneration report for 2022/23.
In this statement, I describe the key items considered by the
Committee during the financial year, including the incentive
outcomes for the year as well as the broader context of
remuneration at the company. These are contained within our
Annual Remuneration Report which describes how our new
Policy was implemented during 2022/23, and how the Policy
will be implemented in 2023/24. This, together with the Annual
Statement, will be put to an advisory vote at the 2023 AGM.
Also included in this report is a summary of our Directors’
Remuneration Policy which was approved by the majority
of our shareholders at the 2022 AGM.
Performance during the year
The Group’s 2022/23 financial performance has been resilient,
particularly given the external challenges over the last year. Our
adjusted pre-tax profits for the Group were £758 million for the
year while our total sales were £13,059 million, down 0.7% on the
prior year (3-year like-for-like (LFL) up 15.6%). Based on these
results, the Board is proposing a final dividend of 8.60p, resulting
in a total dividend for the year of 12.40p. This, when combined
with the share buyback programme, resulted in £583 million
being delivered to shareholders for the year.
The company also continues to be a leader in responsible
business. As shown in the Responsible Business section
on pages 23 to 26, we have stepped up our ambitions in
reducing our carbon emissions and ensuring our wood and
paper products are responsibly sourced as well as continuing
to support those most in need in the wider community.
While the economic environment is expected to remain
challenging, Kingfisher is well positioned to navigate these
uncertain times. This is in part due to the excellent leadership
of Thierry Garnier and his team and our wider workforce.
Our wider workforce
Kingfisher is committed to creating a workplace where
everyone is treated equitably. With this in mind and particularly in
light of the current cost of living pressures, the Committee has
overseen targeted reward action taken to support colleagues
across our organisation.
Since our last pay round in April 2022, the company has
undertaken a number of initiatives including:
— In the UK, in December 2022, we awarded an increase to
the basic hourly rate offered to our store colleagues from
£9.80 to £10.10 in B&Q and from £9.70 to £10.00 in Screwfix,
along with a 3% increase for colleagues at our most junior
work level in the UK banners or those who earn £35,000 or
less in our head office.
— In France, Poland and Iberia, salary increases or one-off
payments were awarded.
— In Turkey, where there is a backdrop of inflation at
unprecedented levels, a programme of interim increases
was approved.
Whilst the response to base pay focused predominantly on store
colleagues, the company has also provided additional support to
help all colleagues with the cost of living crisis, including:
— A Colleague Support Fund in the UK in partnership with
the Retail Trust to provide grants to support colleagues
experiencing financial difficulties.
— A partnership between Happi app and Screwfix to provide
colleagues with financial wellbeing advice.
— Colleague discounts on energy saving products in the UK,
Romania, Spain and Portugal to help reduce household bills.
Store colleagues’ pay rates will also be reviewed as part of
the April 2023 pay review cycle. Increases proposed for these
colleagues are generally above or in line with the proposal for
management colleagues. In the UK, both B&Q and Screwfix will
move their base hourly pay rate to £10.60, a total increase of
8.2% and 9.3% respectively, inclusive of the additional
December 2022 uplift covered above. We will continue to
monitor inflation and the cost of living in all of our markets.
The Committee also oversaw Kingfisher’s fifth gender pay
report, which is available on our corporate website. As part of
our Inclusion and Diversity (I&D) strategy, we are committed
to developing more inclusive leaders and improving gender
representation across our business. We are on track to meet
our goal of 40% women in all management roles by 2025.
Achieving our women in senior leadership target (35% by 2025)
remains an ongoing area of focus as demonstrated in the
Responsible Business section on page 24. The Group did
not consult with employees when drafting the Directors’
Remuneration Policy. However as part of a Kingfisher
Colleague Forum, colleagues were advised on remuneration
arrangements of executive directors and how these align with
the arrangements offered elsewhere in the organisation, and
this topic was included during discussion with colleagues for
the year being reported on.
In this report
77
Annual Remuneration Committee
Chair’sstatement
79 Remuneration at a glance
80 Directors’ Remuneration Policy
88 Annual Report on Remuneration
99
Statement of Implementation of the Remuneration
Policy for 2023/24
About this report
The Directors’ remuneration report, on pages 77 to 100,
has been prepared in compliance with the remuneration
disclosures required under the Large and Medium-Sized
Companies and Groups (Accounts and Reports)
Regulations 2008 (as amended).
77Kingfisher 2022/23 Annual Report and Accounts
Our Remuneration Policy
At the 2022 AGM, the Committee submitted a new
Remuneration Policy for shareholders’ approval, after an
extensive review and consultation with our largest shareholders.
The new Policy, of an Annual Bonus with part deferred into
shares and a new Performance Share Plan (KPSP) granted
annually, was well received by shareholders who approved the
Policy with a vote of over 93%. The Committee and I would like
to thank shareholders for their strong level of support.
Decisions made by the Committee during the year
Taking into account the performance during the year and our
continuing commitment to ensuring that executives are focused
on outcomes and strategic priorities, the Committee implemented
the approved Policy as follows:
2022/23 Annual Bonus outturn
The 2022/23 Annual Bonus for the executive directors was
assessed against adjusted pre-tax profit, LFL sales growth, own
exclusive brands (OEB) sales growth and digital sales growth. In
line with the Policy, the Committee reviewed the outcome of
each measure and also undertook a holistic view of the outturn
versus underlying performance and value delivered to our
shareholders.
There was some vesting on both LFL sales growth and OEB
sales growth. Neither adjusted pre-tax profit or Digital sales
growth met the threshold target for vesting. This has resulted
in a formulaic outturn of 15.9% of maximum which is equivalent
to 31.7% and 30.1% of salary for the CEO and CFO respectively.
The Committee determined this level of outturn was appropriate
given the performance over the year, the value delivered to
shareholders and the treatment of the wider workforce.
Full detail on the performance against each of the 2022/23
strategic measures can be found on page 91.
Vesting of the 2020 Alignment Shares
Performance against the underpins attached to the 2020
Alignment Shares granted to both executive directors was
assessed by the Committee as at 31 January 2023, ahead of
the awards vesting.
Both underpins were met with the Net Debt to EBITDA ratio
less than 2.5 times, the dividend cover over 1.75 times and the
2022/23 dividend payments being above the required threshold.
Therefore, the Committee concluded that this award will vest at
100% for the executive directors. This award vests in July 2023
and is subject to a two-year holding period.
Full detail on performance against the underpins for the 2020
Alignment Shares and the vesting outcomes for the executive
directors can be found on pages 91.
The Policy was operated as intended in 2022/23.
Key remuneration decisions for 2023/24
The Committee also made a number of decisions relevant for
2023/24 during the year which are as follows:
Salary increases
A salary increase of 5% will be awarded to the executive directors
effective from 1 April 2023. This increase is in line with the standard
increase proposed for the wider UK workforce based in head
offices and is reflective of their ongoing strong performance.
2023 Performance Share Plan (PSP) Measures
and Targets
The measures for 2023 PSP are the same as for the 2022 PSP
which are Earnings Per Share (EPS), Return On Capital Employed
(ROCE), Relative Total Shareholder Return (TSR) and a basket of
ESG measures, each with a 25% weighting. The basket of ESG
measures remains the same as the 2022 PSP:
— climate change: a reduction in scope 1 and 2 emissions from
a FY 16/17 baseline;
— Forest Positive: % of wood and paper responsibly sourced
as a % of SKUs purchased; and
— gender diversity: % of women in senior leadership.
These measures all continue to align with our long-term strategy
and support value creation. The target ranges, like last year,
have been set taking into account the internal long-term plans
and external consensus. Further details on these measures
including the target ranges can be found on pages 96 to 97.
Remuneration for the executive directors in 2023/24 will be
implemented in line with the Policy. For a summary of the
application of the Policy for 2023/24 see page 99 of the Annual
Report on Remuneration.
Changes to non-executive directors’ and Chair’s fees
The Board reviewed the non-executive directors’ (NED) fees
in 2022/23 and agreed, effective 1 February 2023, that the base
fee will be increased by 4%. There are no changes to the Senior
Independent Director, and Committees’ chair or member fees.
Separately, in respect of the company Chair’s fee, a 4%
increase effective 1 February 2023 was agreed.
These increases reflect the continuing significant time
commitment required from the non-executive directors and
Chair and are lower than the increase being implemented for the
wider UK workforce.
Looking ahead
The Committee remains dedicated to ensuring that we have
an open and transparent dialogue with shareholders and other
stakeholders and so welcomes any questions you may have on
the implementation of our Remuneration Policy in 2022/23, our
Remuneration Policy and how we intend to implement the Policy
in the coming year, or any other relevant topics.
I look forward to receiving your support for our Annual Report
on Remuneration at the 2023 AGM.
Claudia Arney
Chair of the Remuneration Committee
20 March 2023
Directors’ remuneration report continued
78 Kingfisher 2022/23 Annual Report and Accounts
Strategic Report Governance Financial Statements
Simple, transparent and relevant
Supports long-term value
creation
Fully supports Kingfisher’s
purpose and values
Rewards for strategy delivery
and performance
Remuneration at a glance
The following page provides our simplified Remuneration Principles, a summary of the Remuneration Policy and its implementation in
2023/24 and a summary of the implementation of the Policy in 2022/23.
Remuneration principles
Summary of Policy and implementation for 2023/24
Summary Measures Alignment to strategy
Base salary
For 2023:
— CEO: £882,525 (5% increase)
— CFO: £623,280 (5% increase)
Reflects the individual’s role, experience and
contribution to the company and is set at levels that
support the recruitment and retention of executive
directors of the calibre required by the company.
Annual Bonus
Maximum opportunity
— CEO: 200% of salary
— CFO: 190% of salary
Performance is assessed over one year.
Any bonus earned over 100% of salary
is deferred into shares for three years.
— 40% LFL sales growth
— 40% Adjusted pre-tax profit
— 10% OEB sales penetration
— 10% Digital sales penetration
Incentivises executive directors to achieve or
exceed annual financial and strategic objectives set
by the Committee at the start of each financial year.
Long-term shareholder alignment provided through
bonus deferral.
Performance
Share Plan
Maximum opportunity
— CEO: 275% of salary
— CFO: 260% of salary
Awards vest subject to performance
over three financial years and are subject
to a further two-year holding period.
— 25% EPS
— 25% ROCE
— 25% Relative TSR
— 25% on a basket of
ESG measures
EPS, ROCE and ESG are aligned to the strategy while
Relative TSR ensures that payout for participants is
aligned to value creation for shareholders.
ESG reflects the importance of our Responsible
Business agenda and recognises our long-term
goals and commitments.
Share ownership
requirements
— CEO: 350% of salary
— CFO: 270% of salary
Executives are additionally required to hold
100% of the shareholding requirement for
a period of two years post-employment.
To ensure the alignment of the interests of
executives and shareholders over the long term,
executive directors are required to build a
significant shareholding.
Our FY 22/23 performance highlights
Adjusted
pre-tax profit
£758m
LFL
sales growth
(2.1)%
OEB
sales growth
(2.1)%
Digital sales
growth
(8.8)%
Net debt
toEBITDA
1.6x
Total
dividend
12.4p
Our FY 22/23 Incentive Outcomes
Maximum
Actual
Adjusted pre-taxprofit LFL Sales Growth OEB Sales Growth Digital Sales Growth
40% 40% 10% 10%
13%
0%0%
3%
Annual Bonus (200%/190% of salary)
Maximum
Actual
Maintain dividend subject to dividend cover
Maintain ratio of net debt to EBITDA
50%
50%
50%
50%
Alignment Shares (80% of salary)
Remuneration in 2022/23
Fixed
pay
Annual Bonus
outcome
Alignment Shares
outcome
Total
single figure
£’000 % of max % of salary £’000 % of max % of salary £’000 £’000
CEO 993.0 15.9% 31.7% 265.2 100% 80% 680.0 1,938.3
CFO 698.3 15.9% 30.1% 177.9 100% 80% 480.3 1,356.5
79Kingfisher 2022/23 Annual Report and Accounts
Directors’ Remuneration Policy (approved at the 2022 AGM)
Our Remuneration Policy (the Policy) is set out in this section. The Policy was approved by 93.11% of our shareholders at the AGM
held on 22 June 2022.
The full version of the current shareholder-approved Policy can be found in the 2021/22 Annual Report. The Policy is presented
unchanged from that approved by shareholders other than minor wording changes to reflect, for example, that the Policy has been
approved by shareholders, an update on selection of performance measures to reflect rationale for 2023/24 bonus measures and
the 2023 PSP as well as updated scenario charts.
Policy table
Base salary
Element and purpose
Base salary reflects the individual’s role, experience and contribution
to the company and is set at levels that support the recruitment and
retention of executive directors of the calibre required by the company.
Operation
In setting base salaries, the Committee also has regard to salaries for
similar roles in comparator companies including those in FTSE retailers
and companies of a similar size and complexity.
Maximum opportunity
Salary increases will typically be in line with the wider workforce.
The Committee has the flexibility to award higher salary increases
in exceptional circumstances.
Increases awarded each year will normally be set out in the statement
of implementation of the Policy.
Assessment of performance
Individual performance is an important factor considered by
the Committee when reviewing base salary each year.
Benefits
Element and purpose
Benefits are provided to assist executive directors in the performance
of their roles and are designed to be competitive and cost-effective.
Operation
The company may provide pension benefits (set out in the following
section), a company car or cash alternative, medical insurance, and
life assurance cover.
Other benefits may be provided from time to time if considered
reasonable and appropriate by the Committee, such as relocation
allowances, and would be explained in the subsequent Annual Report
on Remuneration.
The company pays the cost of providing benefits on a monthly basis
or as required for one-off events such as financial planning advice.
Store discounts may be offered to all executive directors on the
same basis as offered to other company employees.
Maximum opportunity
Maximum levels of benefit provision are:
— Car allowance of £25,000 per annum.
— Private medical insurance on a family basis.
— Life assurance cover of four times base salary.
— Store discount of up to 20%.
The cost of providing insurance benefits varies according to premium
rates so there is no formal maximum monetary value.
Any relocation allowance will be limited to 50% of base salary (inclusive
of any tax payable on expenses reimbursed).
Assessment of performance
None.
Pension
Element and purpose
To provide retirement benefits, support retirement planning, and
provide a competitive fixed pay package.
Operation
Pension provision for executive directors is by way of contributions to
a defined contribution scheme or cash allowance.
Maximum opportunity
Maximum employer contribution into a defined contribution scheme of
14% of base salary or a cash alternative of 12.5% of base salary, in line
with arrangements for other UK colleagues.
Assessment of performance
None.
Directors’ remuneration report continued
80 Kingfisher 2022/23 Annual Report and Accounts
Strategic Report Governance Financial Statements
Policy table continued
Annual Bonus
Element and purpose
To incentivise executive directors to achieve or exceed annual strategic
objectives set by the Committee at the start of each financial year.
Operation
Annual Bonuses are earned over the year, based on performance
against targets over the financial year.
The Annual Bonus will be delivered as follows:
— bonus earned up to 100% of salary in cash; and
— bonus earned above 100% of salary in shares which are deferred
for three years and subject to continued employment in line with
plan rules.
Dividend equivalents are payable in respect of any deferred shares
that vest.
The Committee has the discretion to adjust the bonus outcome in light
of overall underlying performance.
Any adjustment made using this discretion will be explained in the
following Annual Report on Remuneration.
Malus and clawback apply under circumstances as set out in the notes
to the Policy table.
Change of control provisions apply as set out in the notes to the
Policy table.
Maximum opportunity
The maximum Annual Bonus award is 200% of salary for the CEO and
190% of salary for the CFO (and any other executive directors).
The level of payment at threshold is set on an annual basis but will not
exceed 25% of maximum.
Assessment of performance
The Annual Bonus measures may be based on a mixture of financial,
operational, strategic and individual performance measures dependent
on the company’s goals and strategic priorities over the year
under review.
At least 70% of the bonus will be dependent on financial measures.
Performance Share Plan (PSP)
Element and purpose
To incentivise executive directors to deliver on Kingfisher’s long-term
strategic aims and create sustainable shareholder value, aligning the
interests of participants with those of shareholders.
To retain executive directors and provide market competitive
total reward.
Operation
Awards are granted annually, and vest after three years subject to
performance achieved against performance targets set over not less
than a three-year period. All vested shares will normally be subject to
a further two-year holding period.
Dividend equivalents are payable in respect of the shares that vest.
The Committee has discretion to adjust the vesting outcome if the
formulaic outcome is not felt to produce an appropriate result in light
of overall underlying company performance.
Any adjustment made using this discretion will be explained in the
following Annual Report on Remuneration.
Malus and clawback apply under circumstances as set out in the notes
to the Policy table.
Change of control provisions apply as set out in the notes to the
Policy table.
Maximum opportunity
The maximum annual award that can be granted each year under the
PSP is 275% of salary for the CEO and 260% of salary for the CFO
(and any other executive directors) respectively.
For threshold performance on any measure, at most 25% of the
maximum award available for that measure may vest.
Assessment of performance
Awards granted will vest based on performance over not less
than three years against performance measures determined by
the Committee and aligned to the company’s strategic priorities.
At least 50% of the measures will be based on financial measures.
The performance measures selected for the 2023 grant are:
— 25% Earnings per Share (EPS);
— 25% Return on Capital Employed (ROCE);
— 25% Relative Total Shareholder Return (TSR); and
— 25% on a basket of Environmental, Social and Governance
(ESG) measures.
Any substantial or significant changes to the measures will be subject
to shareholder consultation.
The performance outcomes will be assessed at the end of the
three-year period to ensure they are appropriate within the context of
the wider business performance.
The performance measures have been chosen to balance growth and
returns and ensure sustainable delivery of performance.
81Kingfisher 2022/23 Annual Report and Accounts
Policy table continued
Chair and non-executive director fees
Element and purpose
To attract and retain a Chair and non-executive directors of the
highest calibre.
Operation
The fees paid to the Chair are determined by the Committee, while
the fees of the non-executive directors are determined by the Board
with affected persons absenting themselves from the discussions,
as appropriate.
The Committee reviews the Chair’s fees annually.
The Chair’s fees are determined with reference to time commitment
and relevant benchmark market data. Contributions are made towards
the cost of running the Chair’s office.
The Board determines non-executive directors’ fees under a policy that
seeks to recognise the time commitment, responsibility and technical
skills required to make a valuable contribution to an effective Board.
A base fee is paid to all non-executive directors and additional fees
are also paid to the Senior Independent Director, the Chairs and
members of each of the Audit, Remuneration and Responsible
Business Committees.
Chair and membership fees may be introduced for current and
new committees.
Appropriate benefits, including the reimbursement of appropriate
expenses, may be provided from time to time, as required.
The Board may annually review fees paid to non-executive directors
against those in similar companies and take into account the time
commitment expected of them.
Fees are paid monthly, wholly in cash.
The Chair and the non-executive directors do not participate in any
of the company’s performance-related pay programmes and do not
receive pension benefits.
Maximum opportunity
Aggregate annual fees paid to the Chair and non-executive directors
are limited by the company’s Articles of Association, which may be
varied by special resolution of the shareholders.
The current limit contained within the Articles of Association is
£1.75 million as approved at the 2014 AGM.
Contributions towards the cost of running the Chair’s office will not
exceed £60,000 per annum and are included within the aggregate
fees set out above.
Assessment of performance
None.
All-employee share plans
Element and purpose
Executive directors may participate in Kingfisher’s all-employee share
plans on similar terms to other employees.
Operation
In particular, UK-based executive directors may participate in the
Sharesave Plan (Sharesave), a tax-approved all-employee scheme
under which they make monthly savings over a period of three or five
years, which may be used to buy Kingfisher shares at a discounted
price when the scheme matures. They may also choose to withdraw
their savings at the end of the savings period or at any time during
the savings contract.
UK-based executive directors may also participate in the Share Incentive
Plan (SIP). Designed to promote employee share ownership, the SIP
enables employees to make monthly investments in Kingfisher shares.
Maximum opportunity
The maximum limit for the Sharesave is currently £500 per month. The
maximum amount an individual may invest in partnership shares under
the SIP is currently £150 per month. The SIP also allows the award of
free and matching shares up to the limits set by the UK Government.
The company may increase the amounts that can be saved or invested
under the Sharesave and SIP plans in line with any increases authorised
by the UK Government for approved plans.
Assessment of performance
None.
Directors’ remuneration report continued
82 Kingfisher 2022/23 Annual Report and Accounts
Strategic Report Governance Financial Statements
Shareholding requirements
To ensure the alignment of the interests of executives
and shareholders over the long term, executive directors are
required to build a significant shareholding. The shareholding
requirement is 350% of salary for the CEO and 270% for the
CFO, and any other executive director.
All shares owned beneficially and nil-cost awards that
have vested but that the executive has yet to exercise are
considered to count towards the shareholding on a notional
post-tax basis.
Until the shareholding requirement is met, executive directors
are required to retain 100% of vested post-tax PSP, Deferred
Bonus and Alignment Share awards and retain 50% of vested
post-tax Delivering Value Incentive (DVI) shares. It is expected
that executives would retain 100% of post-tax shares from the
DVI awards until the requirement is met.
The full shareholding requirement will apply for two years
post-employment. The Committee has established mechanisms
to enforce the post-employment shareholding guidelines once
an executive director has left the company.
Notes to the Policy table
Selection of performance measures
The measures for the Annual Bonus and the Performance
Share Plan will be chosen each year for their alignment to the
company’s goals and strategic priorities and may vary according
to the priorities over the relevant performance periods.
The measures for the 2023/24 Annual Bonus are adjusted
pre-tax profit, LFL sales growth and individual strategic
measures. Adjusted pre-tax profit and LFL sales growth
ensure that executives are focused on delivering both
growth and profitability for our shareholders while individual
metrics ensure that executives are focused on specific key
strategic priorities. The individual measures may vary between
performance years depending on strategic priorities for that
year. For 2023/24, OEB sales penetration and digital sales
penetration were chosen for both executive directors as
they are fundamental to the company strategy over 2023/24.
For the 2023 PSP, the measures chosen are EPS, ROCE,
Relative TSR and ESG. EPS was chosen to ensure sustainable,
long-term delivery of profit for our shareholders with ROCE
ensuring the efficient use of our capital to generate sustainable
returns for shareholders. Relative TSR is measured against the
constituents of the FTSE 350 Retailers, FTSE 350 Drug and
Grocery Stores as well as the STOXX 600 Drug and Grocery
Stores. The group ensures that we deliver strong shareholder
returns within the context of an appropriate group of peers.
ESG measures provide a direct link to our Responsible Business
agenda and recognise our long-term goals and commitments.
For the 2023 PSP, the ESG bucket of measures will continue
to reflect our commitment to the planet with (1) a measure
addressing climate change and (2) a measure on sourcing of
our wood and paper products, as well as (3) an inclusion-based
measure (gender diversity). These proposed measures reflect
the importance of Kingfisher’s long-term goals in respect of the
wider external context (climate change), sustainable wood and
paper products (sourcing) and our commitment to improve
the representation of our women in senior leadership roles.
The targets are set each year to ensure they are appropriately
stretching taking into account short and long internal forecasts
and ambitions as well as external forecasts and views. The
specific measures, targets and weightings may vary from
year to year to align with the company’s strategy.
Malus and clawback
Malus and clawback may operate in respect of the Annual Bonus
and Deferred Bonus Shares and PSP awards granted under the
Kingfisher Performance Share Plan (KPSP) as well as legacy
Alignment Shares and DVI awards granted under the Kingfisher
Alignment Share and Transformation Incentive Plan (KASTIP).
These provisions enable the company to reduce (including, if
appropriate, to nil) the payout and vesting levels or to recover
the relevant value following the cash bonus payout or vesting
of shares. These provisions will apply to the cash bonus for a
period of three years following payment, to the Deferred Bonus
Awards during the three-year deferral period and for a period
of two years following vesting of the PSP and legacy Alignment
Share and DVI grants. These provisions could take effect in the
event of financial misstatement, miscalculation due to an error,
serious reputational damage, or material misconduct in
individual cases.
Change of control
In the event of a change of control, share awards will normally
vest subject to performance conditions. PSP awards, legacy
Alignment Shares and DVI awards will normally be reduced on a
time pro-rated basis in line with the treatment for good leavers,
which is set out in the ‘Policy on payment for loss of office’
section of this Directors’ Remuneration Policy. Deferred Bonus
share awards will normally vest on change of control. The
Committee retains discretion to replace awards with an
equivalent share award in the acquiring company.
The Committee may alternatively consider that such a reduction
is inappropriate, e.g. if it is agreed with an acquirer to roll over
outstanding awards. Other awards may be reduced at the
Committee’s discretion.
Discretions
The Committee retains certain discretions in relation to the
Annual Bonus Plan, which are set out in full in the plan rules,
and which include but are not limited to:
— The determination, and timing, of any bonus payment.
— The impact of a change of control or restructuring.
— Overriding formulaic outcomes in line with the provisions of
the UK Corporate Governance Code.
— Adjustments for accounting or equivalent changes for the
Annual Bonus.
— Any adjustments required as a result of a corporate event
(such as a transaction, corporate restructuring event, special
dividend, share buyback or rights issue).
83Kingfisher 2022/23 Annual Report and Accounts
Discretions set out as part of this Policy provide the Committee
with discretion in certain matters regarding the administration
and operation of Deferred Bonus and KPSP awards as well as
legacy Alignment Shares and DVI awards (as set out in the
corresponding plan rules approved by shareholders), including,
but not limited to the following:
— The assessment of good leaver status.
— Overriding formulaic outcomes in line with the provisions
of the UK Corporate Governance Code.
— Adjustments for accounting or equivalent changes for the
KPSP and the KASTIP.
— Minor administrative matters to improve the efficiency of
the operation of the plans or to comply with local tax law
or regulation.
— Any adjustments to performance conditions or awards
required as a result of a corporate event (such as a
transaction, corporate restructuring event, special
dividend, share buyback or rights issue).
In relation to the Annual Bonus Plan, KPSP awards, legacy
Alignment Shares and DVI awards, and in line with the plan rules,
the Committee retains the ability to amend the performance
conditions and/or measures in respect of any award or payment
if one or more event(s) occur that would lead the Committee
to consider that it would be appropriate to do so, provided
that such an amendment would not be materially less difficult
to satisfy than the original performance condition would have
been but for the event in question.
Should the Committee use any of the discretions set out above,
these would, where relevant, be disclosed in the following Annual
Report on Remuneration. The views of major shareholders
may also be sought. Discretion in relation to the company’s
All-Employee Share Plans (Sharesave and SIP) would be
exercised within the parameters of the HMRC-approved
plan status and the FCA’s Listing Rules.
Legacy awards
In-flight awards made before the adoption of this Policy will
continue in line with the approved Policy under which they were
granted. Further details of these awards can be found within the
Remuneration Policy approved at the 9 July 2019 AGM and
included within the 2018/19, 2019/20, 2020/21 and 2021/22
Annual Report and Accounts.
Differences in Remuneration Policy for all employees
The remuneration structure for members of the Group Executive
follows a similar approach as for the executive directors but
with a lower maximum opportunity as appropriate under the
Annual Bonus and KPSP. The performance measures attached
to the Annual Bonus are a combination of Group financial and
strategic measures, banner-specific financial and strategic
measures and/or functional measures, depending on the Group
Executive member’s role and responsibilities. Like the executive
directors, bonus earned over 100% of salary is paid into
deferred shares. KPSP awards for the Group Executive have
the same performance conditions as the executive directors.
For the next two levels of management below the Group
Executive, the remuneration structure consists of base salary,
benefits, pension, Annual Bonus and KPSP awards. Performance
measures attached to the Annual Bonus are tailored to reflect
the position of the individual and the part of the business in
which they operate, and as such are a combination of Group
financial and strategic measures, banner-specific financial and
strategic measures and/or functional measures. Vesting of the
KPSP awards for these colleagues will be primarily based on
the same measures as the executive directors and Group
Executive, however there is also an element based on time
in employment only for these colleagues.
All other employees are entitled to base salary and benefits and
may also receive bonus, pension, profit share and share awards,
which vary according to local jurisdiction and market practice.
The maximum provision and incentive opportunity available
are determined by the seniority and responsibility of the role.
Statement of consideration of employment conditions
elsewhere in the company
The CPO is invited to present to the Committee the proposals
for salary increases for the employee population generally and
on any other remuneration changes. The CPO consults with the
Committee on the performance conditions for the executive
directors’ bonuses and the extent to which these should be
cascaded to other employees. The Committee has oversight
of all long-term incentive awards across the Group.
The Committee is provided with data on the remuneration
structure for all individuals in Kingfisher’s leadership team, which
includes retail banner CEOs and Group function directors. The
Committee approves the policy on share award levels for all
employees and uses this information to ensure that there is
consistency of approach across Kingfisher.
The Group did not consult with employees when drafting the
Directors’ Remuneration Policy. However as part of a Kingfisher
Colleague Forum, colleagues were advised on remuneration
arrangements of executive directors and how these align
with the arrangements offered elsewhere in the organisation.
Statement of consideration of shareholder views
When determining the Remuneration Policy, the Committee
consulted with the company’s largest shareholders in respect
of changes to the proposals and also reviewed best practice
guidelines issued by institutional investor bodies. The Committee
took on board the feedback received when finalising the proposals.
The Committee continues to always be open to feedback from
shareholders on our Remuneration Policy and remuneration
arrangements and commits to ensuring consultation with our
largest shareholders in advance of any significant changes to
the Remuneration Policy or structure. The Committee continues
to monitor trends and developments in corporate governance
and market practice to ensure the structure of executive
remuneration remains appropriate.
Directors’ remuneration report continued
84 Kingfisher 2022/23 Annual Report and Accounts
Strategic Report Governance Financial Statements
Section 40 disclosures
When considering the Policy and its implementation, the
Committee took into account Provision 40 of the UK Corporate
Governance Code and considers the framework meets the
factors under the provisions as follows:
— Clarity: The Committee has provided transparent disclosures
regarding the Remuneration Policy and structure. Changes
have been explained in the context of alignment to the strategy
and market practice. The Remuneration Committee Chair has
engaged with our shareholders on the Remuneration Policy.
The Company has explained the remuneration structure with
the relevant broader population through a variety of methods
including group and one-on-one meetings and guides.
— Simplicity: The Committee has improved the simplicity of
the incentive arrangements with fewer measures with more
meaningful weightings on the Annual Bonus than under the
previous Policy. There is only one share award plan applicable
for executive directors (and other employees), the KPSP,
which is market-aligned in structure and granted annually.
— Risk: The Committee believes that the incentive structures
under the Remuneration Policy do not encourage inappropriate
risk taking. The targets set for the Annual Bonus and KPSP are
stretching and set in line with strategic priorities and sustainable
value creation. All incentive arrangements have malus and
clawback provisions including in the event of serious reputational
damage and for material misconduct. The Committee can
also override formulaic outcomes if it concludes that incentive
outcomes are not representative of underlying performance.
— Predictability: The Annual Bonus and KPSP have maximum levels
of opportunity with vesting/payment outcomes dependent on
achievement of performance measures. The range of vesting/
payment outcomes is set out in the scenario charts on page 87
which also demonstrate the impact of a 50% share price
increase from date of grant to vesting.
— Proportionality: Performance conditions attached to the Annual
Bonus and PSP are directly and clearly linked to the achievement
of Kingfisher’s strategic priorities both in the short and longer
term. The level of stretch in the performance conditions have
been and continue to be set to compensate participants
accordingly. Bonus deferral, KPSP holding periods and
shareholding requirements (including post-exit) ensure
significant alignment to long-term value creation.
— Alignment to culture: As discussed above, there is a
strong alignment of the incentive arrangements under the
Remuneration Policy with Kingfisher’s strategic priorities.
Approach for recruitment remuneration
Area Policy and operation
Overall
When hiring a new executive director, or making internal promotions to the Board, the Committee will apply the Remuneration Policy.
The rationale for the package offered will be explained in the following Annual Report on Remuneration.
For internal promotions, any commitments made prior to appointment may continue to be honoured as the executive is transitioned to
the new remuneration arrangements. Where an individual is promoted after the annual KPSP award has been granted, an award may be
made to bring the executive on to the in-flight cycle at an opportunity level reflecting their new role, subject to the limits set out in the
Policy. Awards may be pro-rated to reflect the remaining portion of the vesting period. Any award will take into consideration awards
granted prior to promotion.
The Policy below is consistent with the principles of the previous Recruitment Policy, which have been adapted in line with the new
remuneration structure.
Base
salary
Base salary would be set at an appropriate level to recruit the best candidate based on their skills, experience and current remuneration.
Benefits
Benefits provision would be in line with the normal Policy.
Where appropriate, the executive may also receive relocation benefits or other benefits reflective of normal market practice in the
territory in which the executive director is employed.
Pension
Pension provision would be in line with the normal Policy.
Incentive
awards
Incentive awards would be made under the Annual Bonus and KPSP in line with the normal Policy, which determines the maximum
incentive awards that can be made.
Where an individual joins after the annual KPSP has been granted, an award may be made to bring the executive on to the in-flight cycle
subject to the limits set out in the Policy. Awards may be pro-rated to reflect the remaining portion of the vesting period.
Buyout
awards
In addition to normal incentive awards, buyout awards may be made to reflect value forfeited through an individual leaving their
previous employer.
If a buyout award is required, the Committee would aim to reflect the nature, timing and value of awards forgone in any replacement
awards. Awards may be made in cash, as KPSP awards, shares with vesting based on time only or by any other method deemed
appropriate by the Committee. Where possible, share awards will be replaced with share awards.
Where performance conditions applied to the forfeited awards, performance conditions will be applied to the replacement award or
the award size will be discounted accordingly.
In establishing the appropriate value of any buyout, the Committee would also take into account the value of the other elements of
the new remuneration package.
The Committee would aim to minimise the cost to the company; however, buyout awards are not subject to a formal maximum.
Any awards would be broadly no more valuable than those being replaced.
85Kingfisher 2022/23 Annual Report and Accounts
Policy for payment for loss of office
Area Policy
Notice period
12 months’ notice by either the director or the company.
Non-compete
During employment and for 12 months after cessation of active employment.
Executive directors’
contractual termination
payment
Resignation
No payments on departure will be made on termination, even if by mutual agreement the notice period is cut short.
Departure not in the case of resignation
For the period of notice served, the executive director may continue to receive their monthly base salary, benefits and
pension. During this time, at the discretion of the company, they may continue their duties or be assigned garden leave.
For the period of notice not served, the executive director may receive a payment in lieu of notice.
No other payments should be due on departure.
Settlement agreement
The Committee may agree payments it considers reasonable in settlement of legal claims.
This may include an entitlement to compensation in respect of a director’s statutory rights under employment
protection legislation in the UK or in other jurisdictions.
The Committee may also include in such payments reasonable reimbursement of professional fees in connection with
such agreements.
Treatment of incentives
for bad leavers
Any outstanding awards under any incentive plans will lapse in the event of the Committee determining the departing
individual to be a bad leaver as defined by the Plan Rules.
Leaver provisions
for Annual Bonus
for good leavers
Bonus payments may be receivable at the normal date, pro-rated for time, and taking into account performance
achieved. Bonus deferral still applies.
Deferred Bonus awards vest on the normal date in full.
Where the participant ceases to be employed as a result of death, the Deferred Bonus award will vest in full shortly
after the company is notified.
The Committee retains the ultimate discretion to make bonus payments and determine the basis upon which
they are made (including if bonus deferral still applies) and their vehicle and value, taking into account the individual
circumstances of the departure. The Committee may, in its discretion, accelerate vesting of the Deferred Bonus
award up to the point of departure.
Performance Share Plan
for good leavers
Awards will vest on the normal date, pro-rated for time, and will take into account performance achieved.
The Committee retains discretion to further reduce the awards granted to reflect any personal performance issues or
accelerate vesting.
Where the participant ceases to be employed as a result of death, the award will vest shortly after the company
is notified, pro-rated for time, and taking into account the Committee’s assessment of performance achieved to
that date.
The Committee may decide, acting fairly and reasonably, that any adjustment set out above to reduce the vesting of
the award would be inappropriate.
Shareholding
requirements
Upon leaving the company, the shareholding requirement will continue to apply for two years.
The shareholding requirement will be 100% of the shareholding requirement for two years after departure.
Shareholding requirements will no longer apply in the case of death. At its discretion, the Committee may apply the
same treatment in cases of ill health.
Chair and non-executive
directors’ contractual
termination payment
Non-executive directors are appointed under letters of engagement.
Appointments have historically been for an initial period of three years and invitations to act for subsequent three-year
terms are subject to a review of performance and take into account the need to progressively refresh the Board.
The appointment may be terminated by either party giving the other not less than three months’ prior written notice,
unless terminated earlier in accordance with the company’s Articles of Association.
The company has no obligation to pay compensation when the appointment terminates.
Leavers will be treated for all-employee share plans in line with the plan rules of the relevant share plan. Good leaver is defined under the plan
rules, and relates to individuals who leave as a result of:
— ill health, injury or disability;
— death;
— redundancy;
— transfer of employer or employing business out of Group;
— retirement; or
— any other reason that the Committee decides.
A bad leaver is any leaver not defined as a good leaver.
Directors’ remuneration report continued
86 Kingfisher 2022/23 Annual Report and Accounts
Strategic Report Governance Financial Statements
Illustration of the application of the Remuneration Policy
The tables and charts below provide estimates of the potential total future remuneration for each executive director based on the
remuneration opportunity expected to be granted in 2023/24. Potential outcomes for each executive director, based on three
different performance scenarios, are shown.
Bernard Bot
Base salary Pension Benefits Annual Bonus Performance Share Plan
Thierry Garnier
Value of
package (£’000)
Maximum
Target
Below
threshold
Maximum
Target
Below
threshold
0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 5,000 5,500
2%
17%
34%
46%
1%
4%
1%
11%
4%
£1,033
28%
28%
39%
85%
£3,540
2%
1%
2%
4%
£2,137
18%
33%
46%
11%
4%
£735
29%
27%
38%
85%
£3,129
£5,225
Notes:
Base salary: reflects the salary effective from 1 April 2023.
Benefits: estimate based upon benefits received during 2022/23 as recorded in the single total figure of remuneration table (excluding the relocation allowance
for Thierry Garnier).
Pension: shown as a percentage of salary in line with Policy.
Fixed remuneration: comprises base salary, benefits and pension.
Short-term variable compensation comprises the Annual Bonus including the deferred element. Long-term variable compensation comprises the PSP.
The Committee has also calculated the implied maximum remuneration scenario with the overlay of 50% share price increase on any vested PSP awards.
This would equate to a total value of £6,438k for Thierry Garnier’s package and £4,350k for Bernard Bot’s package.
Below threshold On-target Maximum
Only the fixed pay elements (base salary,
benefits and pension) of the package
are received.
Minimum performance targets for the Annual
Bonus and PSP are not achieved, therefore
no payments are made, and awards will lapse.
Fixed pay elements plus target Annual Bonus
are received and target PSP vest.
Annual Bonus on-target performance is
achieved, 50% of the bonus paying out (100%
of salary for CEO, 95% of salary for CFO).
PSP vesting at 50% of maximum (137.5%
of salary for CEO, 130% of salary for CFO).
Fixed pay elements plus maximum Annual Bonus
are received and full vesting under the PSP.
Annual Bonus maximum performance
achieved, resulting in a bonus of 200%
and 190% of salary for the CEO and
CFO respectively.
Full vesting under the PSP (275% of salary
for CEO, 260% of salary for CFO).
87Kingfisher 2022/23 Annual Report and Accounts
Annual Report on Remuneration
This section of the report outlines how the Committee implemented the Directors’ Remuneration Policy (the Policy) in the financial
year. This report, together with the Annual Statement from the Chair of the Remuneration Committee will be put to shareholders for
approval at the 2023 AGM. Shareholder approval in respect of the Annual Report on Remuneration is on an advisory basis only.
These reports have been prepared in accordance with the Large and Medium-sized Companies and Groups (Accounts and
Reports) Regulations 2008 (as amended) and include the items required to be disclosed under 9.8.6R and 9.8.8R of the Financial
Conduct Authority’s Listing Rules. Where information disclosed has been subject to audit by the Group’s auditor, Deloitte LLP,
thisis highlighted.
The Remuneration Committee
The Committee has delegated authority from the Board over the company’s remuneration framework and Policy. The role of the
Committee is set out in the terms of reference, which are reviewed annually and are available on the website.
The 2022/23 effectiveness evaluation was facilitated by external provider, Independent Audit, and concluded that the Committee
operates effectively and raised no areas of immediate concern. Further detail on the evaluation process can be found on page 69.
Committee composition
The Committee comprised the following members during the year:
Date appointed
to the Committee Eligible Attended
Claudia Arney* 1 November 18 4 4
Catherine Bradley 2 November 20 4 4
Jeff Carr 29 January 19 4 4
Andrew Cosslett 13 June 17 4 4
Rakhi Goss-Custard 13 March 18 4 4
* Chair of the Committee.
Non-executive directors, who are not members, may also attend Committee meetings. The CEO, CFO, CPO, Group Reward Director,
Executive Reward Manager and the Committee’s remuneration advisers were regular attendees at Committee meetings held during
the year. No individual was present when his or her own remuneration or benefits were discussed.
Directors’ remuneration report continued
88 Kingfisher 2022/23 Annual Report and Accounts
Strategic Report Governance Financial Statements
Activities during the year
The significant matters considered by the Committee during the year are set out below:
Areas of Committee
focus
Items discussed
Directors’ Remuneration
Policy
Approved the Remuneration Policy (approved at the 2022 AGM) following consultation with shareholders.
Salary review and
remuneration decisions
Reviewed and approved the salary proposals in respect of the Group Executive and executive directors, effective
from April 2023. Also reviewed and approved salary proposals for the Chair of the Board and the Company Secretary.
Annual Bonus
Judged performance against the 2021/22 strategic measures and agreed the 2021/22 Annual Bonus outturn and
final level of payment for the members of the Group Executive and executive directors.
Approved measures for the 2022/23 Annual Bonus.
Assessed performance against the 2022/23 Annual Bonus measures and reviewed the year-end forecast.
Approved amendments to the Annual Bonus Plan Rules effective for the 2022/23 Annual Bonus.
Alignment Shares
Reviewed the performance of the 2019 Alignment Share awards and determined that the awards would vest in full.
Assessed performance to date of the 2020 and 2021 Alignment Shares, which will vest in 2023 and 2024 respectively.
Delivering Value
Incentive
Reviewed performance of the first performance period of the 2019 DVI award and determined the formulaic outturn.
Monitored performance of the second performance period of the 2019 DVI award.
Performance Share Plan
Approved the Kingfisher Performance Share Plan Rules which were submitted to shareholders for approval at the
2022 AGM.
Approved the performance measures and targets of the 2022 PSP following consultation with shareholders.
Approved subsequent grant of awards.
Assessed performance to date of the 2022 PSP award which will vest in 2025.
Considered and approved the measures and targets of the 2023 PSP.
Governance and other
areas of focus
Kept under review the company’s approach to wider workforce remuneration and the company’s response to
pressures on cost of living.
Considered and approved the company’s guidelines on share ownership.
Monitored developments in corporate governance and market practice in respect of executive remuneration.
Reviewed the output of the annual evaluation of the Committee.
Reviewed and approved the 2021/22 Directors’ remuneration report.
Reviewed the principles of the executive travel and expenses policy.
Received updates on and considered Kingfisher’s gender pay gap reporting.
Advisers to the Committee
During the financial year ended 31 January 2023, PricewaterhouseCoopers LLP (PwC) provided services to the Committee. The
advice received from PwC by the Committee was considered, and it was determined that PwC provides objective and independent
advice to the Committee. The Committee is satisfied that the PwC engagement partner and team, who provide remuneration advice
to the Committee, do not have connections with the Group that may impair their objectivity and independence.
PwC was appointed by the Committee as its principal adviser on 1 February 2013 following a robust tender process. PwC is a member of,
and adheres to, the Code of Conduct for Remuneration Consultants (which can be found at www.remunerationconsultantsgroup.com).
During the year, PwC provided the Committee with executive remuneration advice. PwC also provided Kingfisher with reward advice
for below-Board staff, tax advice, accounting advice, and legal advice during the year. For services provided to the Remuneration
Committee, the fees paid to PwC were £155,750. These fees were incurred through a retainer, and on a time and expenses basis.
Voting at the 2022 Annual General Meeting (AGM)
The following table shows the results of the advisory vote on the Annual Report on Remuneration and the binding vote on the
Remuneration Policy at the 2022 AGM.
Resolution
Votes for
(and % of
votes cast)
Votes against
(and % of
votes cast)
Proportion
shares
voted
Shares on
which votes
were withheld
Annual Report on Remuneration
1,676,791,695
(96.36%)
63,391,071
(3.64%) 86.57% 150,191
Directors’ Remuneration Policy
1,620,253,983
(93.11%)
119,882,346
(6.89%) 86.57% 195,473
89
Kingfisher 2022/23 Annual Report and Accounts
Single total figure of remuneration for the executive directors (audited information)
The table below sets out the remuneration of each of the executive directors for the financial year ended 31 January 2023 and the
comparative figures for the financial year ended 31 January 2022. The Committee did not exercise any discretion in determining the
incentive outcomes for the year being reported on.
Name
1. Base
salary
£’000
2. Taxable
benefits
£’000
3. Annual
Bonus
£’000
4. Alignment
Shares
£’000
5. Pension
£’000
6. Total
Fixed pay
£’000
7. Total
Variable
Pay
£’000
8. Total
Pay
£’000
Executive director
Thierry Garnier 2022/23 836.4 52.0 265.2 680.0
1
104.6 993.0 945.3 1,938.3
2021/22 813.3 43.3 634.4 816.1
2
101.7 958.3 1,450.5 2,408.9
Bernard Bot 2022/23 590.7 33.7 177.9 480.3
1
73.8 698.3 658.2 1,356.5
2021/22 574.4 35.3 448.0 295.1
2
71.8 681.6 743.2 1,424.7
Total 2022/23 1,427.1 85.8 443.2 1,160.3
1
178.4 1,691.3 1,603.5 3,294.8
2021/22 1,387.8 78.7 1,082.4 1,111.2
2
173.5 1,639.9 2,193.7 3,833.6
1. 100% of the 2020 Alignment Share award granted to Thierry Garnier and Bernard Bot will vest on 28 July 2023. These awards in the table above have been
valued based on the average share price during the three-month period to 31 January 2023 of 246.1p. Values include dividend equivalents accrued since the
date of grant. The difference between the share price at the date of grant of the 2020 Alignment Shares (of 249.3p) and the three-month share price average
is -0.3p. No value was attributable to share price growth. No discretion has been exercised as a result of the share price change.
2. The value of the 2019 Alignment Share award for Thierry Garnier and Bernard Bot has been updated using the share price at date of vesting (30 July 2022) of
258.6p and includes values of dividend equivalents accrued from date of grant to vesting. The difference between the share price at the date of grant of the
2019 Alignment Shares (215.4p) and the date of vesting (258.6p) is 43.2p which means that £136k and £49k of 2019 Alignment Shares values detailed in the table
above have been delivered through share price growth performance for Thierry Garnier and Bernard Bot respectively. No discretion has been exercised as
a result of the share price change.
Notes to the single total figure of remuneration table
1. Base salary (audited information)
A 3% salary increase was awarded to the executive directors for the 2022/23 financial year which was in line with the increase
awarded to the wider UK workforce based in head offices.
Name
As at 1 April 2022
£’000
As at 1 April 2021
£’000 % increase
Executive director
Thierry Garnier 840.5 816.0 3%
Bernard Bot 593.6 576.3 3%
2. Taxable benefits (audited information)
The benefits provided to executive directors for both 2022/23 and 2021/22 included car benefit (or cash allowance), private medical
insurance, life assurance, tax advice and where applicable, relocation support.
Name
Car benefit
1
£’000
Medical
£’000
Relocation
support
2
£’000
Tax
advice
3
£’000
Life
assurance
£’000
Total
2022/23
£’000
Total
2021/22
£’000
Executive director
Thierry Garnier 25 9.9 11.9 1.9 3.4 52.0 43.3
Bernard Bot 25 6.4 n/a n/a 2.4 33.7 35.3
1. Both directors opt for a cash allowance.
2. As Thierry Garnier moved from China to the UK as part of his appointment as CEO, in line with the Remuneration Policy, he was entitled to relocation support
of up to 50% of salary. The majority of support was provided to him in 2019 and 2020. He continued to receive residual relocation support in 2022.
3. This benefit relates to ongoing annual tax preparation assistance provided to the CEO. This assistance is limited to income tax return preparation required in
respect of the CEO’s employment income. Note that this figure is inclusive of tax payable on expenses reimbursed.
Directors’ remuneration report continued
90 Kingfisher 2022/23 Annual Report and Accounts
Strategic Report Governance Financial Statements
3. Annual Bonus (audited information)
The purpose of the Annual Bonus is to focus executives on the achievement of measures that are critical to the Kingfisher strategy.
The 2022/23 Annual Bonus for the executive directors was based on the following measures:
— 40% Adjusted pre-tax profit;
— 40% Like-for-like sales growth (LFL sales growth);
— 10% Own exclusive brands (OEB) sales growth; and
— 10% Digital sales growth.
The following table sets out the targets that were set in respect of each of these measures, the corresponding achievement against
those targets during the year ending 31 January 2023, and the resulting payout.
Measure
Targets
Achievement Outturn
Threshold
(10% of max)
Target
(50% of max)
Stretch
(100% of max)
Adjusted pre-tax profit (40%) £761m £855m £949m £757.8m 0.0%
LFL sales growth (40%) (4.8)% 0.2% 5.2% (2.1)% 12.7%
OEB sales growth (10%) (4.8)% 0.2% 5.2% (2.1)% 3.2%
Digital sales growth (10%) (3.6)% 6.4% 16.4% (8.8)% 0.0%
Total Outturn 15.9%
At the Remuneration Committee meeting in March 2023, the Committee considered performance against all measures and targets
set at the beginning of the year and concluded that all remain relevant over the performance period. Note for Adjusted pre-tax profit,
for bonus purposes, this is calculated on constant currency which is why this value slightly differs from the rest of the Annual Report.
This means that the total outturn under the 2022/23 annual bonus for executive directors is 15.9% of maximum. The final payout
equates to 31.7% of salary for the CEO and 30.1% of salary for the CFO which is £265,218 and £177,944 respectively. In line with the
Policy, as the bonus is less than 100% of salary, it was wholly delivered in cash.
In determining whether this level of bonus outturn is appropriate, the Committee has considered a wide range of factors including
financial performance, the value delivered to shareholders, the treatment of the wider workforce as well as other stakeholders. The
Committee concluded that a bonus of 15.9% of maximum for 2022/23 is appropriate and that there are no factors which would call for
discretion or judgement to be applied. This level of performance against the relevant measures will also apply to our bonused
colleagues throughout the Group as appropriate.
4. Alignment Shares (audited information)
At the March 2023 Remuneration Committee meeting, the Committee reviewed performance against the underpins attached to the
Alignment Shares awarded in 2020 that are due to vest in 2023. Both the executive directors have a 2020 Alignment Share award.
The ratio of net debt to EBITDA for 2022/23 is 1.6 times. This means the underpin of a net debt to EBITDA ratio of below 2.5 times has
been met. The proposed total year dividend for 2022/23 is 12.40p. This is more than 3.33p required for the maintenance of dividend
underpin to be met. The dividend cover calculated as the ratio of reported adjusted EPS to full year ordinary dividend per share is
also above the required underpin of 1.75 times at 2.40 times. This means that 100% of the executive directors’ awards will vest on
28 July 2023. The Committee believes this outturn is appropriate and is reflective of performance over the performance period.
The Committee reviewed the vesting of the Alignment Share awards to determine whether it included any windfall gains. However,
as the Alignment Share awards were granted after the share price had recovered from the immediate impacts of the pandemic,
it determined that there was no windfall gain to account for, and therefore no adjustment was necessary. This is evidenced by the
fact that the share price at grant was 249.3p, significantly above the share price, pre-pandemic, and at the start of the financial year
of 204p. The vested awards are subject to a two-year holding period.
The number and value of the awards vested for the current executive directors are as follows:
Name
Number of
shares
vested
1
Number of
dividend
equivalents
2
Value of
shares vested
3
£’000
Executive director
Thierry Garnier 255,013 21,317 680.0
Bernard Bot 180,103 15,054 480.3
1. The number of shares shown represents the proportion of the Alignment Share award granted in July 2020, which is expected to vest on 28 July 2023.
2. Based on dividends accrued to date of publication of the report.
3. Calculated using the three-month average share price to 31 January 2023 of 246.1p. No value was attributable to share price growth.
91Kingfisher 2022/23 Annual Report and Accounts
5. Pensions (audited information)
Executive directors based in the UK are eligible to join the UK defined contribution pension plan (the DC Scheme). No executive
director has a prospective right to a defined benefit pension.
The company operates a policy for all employees to limit the combined employer and member pension contributions during a tax
year to the annual allowance, with the excess employer contribution being directed into a taxable monthly cash allowance. In addition,
employees may opt out of the scheme completely. The executive directors have both opted to receive a cash allowance of 12.5% of
salary in lieu of pension employer contribution. This is aligned to the offering to the wider UK workforce as detailed in Remuneration
Policy on page 80.
A summary of the arrangements for the executive directors is set out below.
Name
Notional employer contribution rate into
defined contribution pension scheme
for which the individual is eligible
Member of the
UK DC Scheme?
Cash allowance
inlieuof employer
contributions
intoDCScheme
Cash allowance rate
as % of salary
Executive director
Thierry Garnier 14% No Yes, in full 12.5%
Bernard Bot 14% No Yes, in full 12.5%
Pension benefits paid during the year
Name
Employer contributions
into DC Scheme
£’000
Cash alternative
£’000
Total 2022/23
£’000
Total
pension benefit as
a % of base salary
Executive director
Thierry Garnier n/a 104.6 104.6 12.5%
Bernard Bot n/a 73.8 73.8 12.5%
Payments to past directors (audited information)
As communicated in the 2021/22 Remuneration Report part of Véronique Laury’s 2019 Alignment Share award vested in 2022. The
number of shares and the values of these awards on the vesting date are as follows:
Awards Vesting date
Number of shares
vested
1
Number of dividend
equivalents
2
Value of shares vested
3
£’000
2019 Alignment Share Award (based on performance underpins) 30 July 2022 166,291 11,294 459.2
1. 100% of the 2019 Alignment Share grant vested based on achievement of performance underpins.
2. Based on dividends accrued to vesting date.
3. Values have been calculated using the closing share price on the vesting date which is 258.6p for the 2019 Alignment Share Award.
These awards are subject to a two-year holding period.
Payments for loss of office (audited information)
There were no payments made to directors for loss of office.
Outside appointments for executive directors
Subject to the rules governing conflicts of interest, Kingfisher is supportive of its executive directors holding one external
non-executive position. The exercise of such roles can provide valuable insight for the executive directors, which can be of
benefit to Kingfisher. Subject to the Committee’s agreement, the individual may retain any fees applicable for these roles.
Thierry Garnier was appointed a non-executive director and a member of the remuneration committee at Tesco plc on 30 April 2021.
Thierry receives £98,250 per annum for fulfilling this role. Bernard Bot is a non-executive director and a member of the audit
committee at A.P. Møller–Mærsk A/S. Bernard receives 1,300,000DKK per annum for fulfilling this role.
Both executive directors retain their fees.
Directors’ remuneration report continued
92 Kingfisher 2022/23 Annual Report and Accounts
Strategic Report Governance Financial Statements
Performance graph
The graph below shows Kingfisher’s total shareholder return for the 10 years to 31 January 2023, which assumes that £100 was
invested in Kingfisher on 1 February 2013. The company chose the FTSE 100 Index as an appropriate comparator for this graph,
as Kingfisher has been a constituent of that index for the majority of the period.
Kingfisher FTSE 100
Value (£)
1 Feb 2013 31 Jan 2014 31 Jan 2015 31 Jan 2016 31 Jan 2017 31 Jan 2018 31 Jan 2022
31 Jan 2023
31 Jan 202131 Jan 202031 Jan 2019
100
150
200
CEO’s remuneration over the last 10 years
The table below sets out the total remuneration of the holder of the office of CEO for the period from 1 February 2013 to
31 January 2023.
Year CEO
Bonus % of
maximum
awarded
1
Value of
bonus
awarded
£’000
Original
Alignment
Share grant
as a % of
salary
2
Alignment
Share % of
maximum
vesting
2
Value of
shares vested
£’000
Original LTIP
grant level as
a % of
salary
3
LTIP % of
maximum
vesting
Value of
vested
shares
£’000
CEO’s single
figure £’000
2013/14 Sir Ian Cheshire 32.0 532.7 – – – 500 31.1 1,799.4 3,455.4
2014/15 Sir Ian Cheshire/Véronique Laury
4
12.3 202.6 – – – n/a n/a n/a 1,306.1
2015/16 Véronique Laury 69.1 967.4 – – – n/a n/a n/a 1,983.0
2016/17 Véronique Laury 90.0 537.0 20
5
100 151.1 200 24.5 100.1 1,715.1
2017/18 Véronique Laury 87.0 534.2 20
5
100 156.9 200 0.0 0.0 1,582.6
2018/19 Véronique Laury 82.0 522.0 50
6
62.5 323.8 n/a n/a n/a 1,761.3
2019/20 Véronique Laury/Thierry Garnier
7
0 0 20
6
/n/a
8
25.0/n/a 136.2/n/a n/a n/a n/a 1,178.7
2020/21 Thierry Garnier 79.8 510.7 n/a
8
n/a n/a n/a n/a n/a 1,656.2
2021/22 Thierry Garnier 97.5 634.4 80
9
100 816.1 n/a n/a n/a 2,408.9
2022/23 Thierry Garnier 15.9 265.2 80
10
100 680.0 n/a n/a n/a 1,938.3
1. The maximum bonus opportunity was 200% of base salary up to the end of the 2015/16 financial year. The maximum bonus opportunity from 2016/17 to
2021/22 was 80% of salary. The maximum bonus opportunity from 2022/23 onwards is 200% of salary.
2. Element of reward introduced under the Remuneration Policy approved by shareholders at the 2016 AGM.
3. The original LTIP grant shows the award level at the point of grant, three years prior to the date the vesting percentage was determined.
4. Sir Ian Cheshire stepped down as CEO on 8 December 2014, at which point Véronique Laury took over the position. Sir Ian Cheshire’s remuneration in the table
is from the start of the financial year up until 8 December 2014, and Véronique Laury’s is from 8 December 2014 to the end of the financial year. The single total
figure in the table above shows the combined total remuneration for both Sir Ian Cheshire and Véronique Laury.
5. This represents 25% of the total Alignment Share award (equivalent to 80% of salary) granted in 2016 and 2017 respectively. This portion vested upon grant.
The remaining 75% of this award (equivalent to 60% of salary) may vest three years after the date of grant, subject to performance against the underpin
measures set out in the corresponding Remuneration report.
6. This represents 25% of the total Alignment Share award (equivalent to 80% of salary) granted in 2018 or 2019 (that vested upon grant) and 75% of the total
Alignment Share award granted in 2016 (that partially vested in June 2019) and in 2017 (which lapsed in full) for Véronique Laury and which were subject to
performance against the underpin measures set out in the corresponding Remuneration report.
7. Véronique Laury stepped down as CEO on 24 September 2019, at which point Thierry Garnier took over the position. Véronique Laury’s remuneration in the
table is from the start of the financial year up until 24 September 2019, and Thierry Garnier’s is from 25 September 2019 to the end of the financial year. The
single total figure in the table above shows the combined total remuneration for both Véronique Laury and Thierry Garnier.
8. 100% of the Alignment Share award granted to Thierry Garnier (equivalent to 80% of salary) in 2019 and 2020 is subject to performance against the underpin
measures set out in the corresponding Remuneration report.
9. The figure for 2021/22 represents 100% of the 2019 Alignment Share Award granted to Thierry Garnier vesting based on performance against the underpins
as detailed in this Remuneration report. 100% of the Alignment Share award granted to Thierry Garnier (equivalent to 80% of salary) in 2021 is subject to
performance against the underpin measures set out in the corresponding Remuneration report.
10. The figure for 2022/23 represents 100% of the 2020 Alignment Share Award granted to Thierry Garnier vesting based on performance against the underpins
as detailed in this Remuneration report.
93Kingfisher 2022/23 Annual Report and Accounts
Change in the remuneration of the directors
The table below shows how the percentage change in each director’s (including the non-executive directors’) salary, fees, taxable
benefits and bonus between 2020/21 and 2022/23 compared with the average percentage change of each of those components
for all full-time equivalent employees based in Kingfisher plc (as required by regulations). In line with prior years, the percentage
change for each director has also been compared to the UK employee workforce (the UK entities, including B&Q and Screwfix).
The UK employee workforce is deemed to be a suitable comparator group as the executive directors are based in the UK
(albeit with global roles and responsibilities) and pay changes across Kingfisher vary widely depending on local market conditions.
Base salary/fees
1
Taxable benefits Bonus
2022/23 2021/22 2020/21 2022/23 2021/22 2020/21 2022/23 2021/22 2020/21
Executive directors
Thierry Garnier
2
2.8% 8.9% -6.7%
20.1%/
1.2%
3
-85.8%/
-10.9%
3
112%/
15.2%
3
-58.2% 24.2% n/a
Bernard Bot
2
2.8% 8.9% -6.7% -4.5% -1.0% 1.0% -60.3% 24.2% n/a
Non-executive directors
Andrew Cosslett 3.0% 10.0% -9.1% 6.6% 1.1% 8.6% n/a n/a n/a
Claudia Arney 0.0% 12.8% 17.7%
4
n/a n/a n/a n/a n/a n/a
Catherine Bradley
5
23.2%
6
47.3% n/a n/a n/a n/a n/a n/a n/a
Jeff Carr 11.6%
6
12.8% -10% n/a n/a n/a n/a n/a n/a
Sophie Gasperment
7
0.0% 47.5% -10% n/a n/a n/a n/a n/a n/a
Rakhi Goss-Custard 45.2%
6
13.3% -10% n/a n/a n/a n/a n/a n/a
Bill Lennie
8
n/a n/a n/a n/a n/a n/a n/a n/a n/a
All Kingfisher plc employees 7.4% -2.6% -13.8% 27.4% -31.8%
9
-33.0% -60.8% 70.1% 97.66%
All UK employees
10
11.0% 7.1% -0.6% 12.5% -6.3% -19.1% -55.6% 3.4% 128.8%
1. Percentages reflect cuts in salary and fees made between April 2020 and July 2020 for executive directors and between April 2020 and September 2020 for
non-executive directors.
2. Joined on 25 September 2019 and 19 October 2019: percentages between 2020/21 and 2019/20 have been calculated on a full-time basis. No bonus was paid
for 2019/20 so percentage change between 2020/21 and 2019/20 could not be calculated.
3. First figure includes relocation paid during 2022/23, 2021/22 and 2020/21, the second excludes it.
4. Became Chair of the Remuneration Committee on 21 January 2020. Fee for this role is £20,000 on top of non-executive director fees.
5. Joined on 2 November 2020 and became Senior Independent Director on 29 January 2021. Fee for this role is £20,000 on top of non-executive director fees.
Percentages for 2021/22 have been calculated assuming full-time basis.
6. The percentage change between 2021/22 and 2022/23 for the non-executive directors reflect that members of the Audit, Remuneration and Responsible
Business Committee receive a fee of £10,000 from 1 February 2022.
7. Started to receive a fee of £20,000 for Chair of Responsible Business Committee from 1 February 2021.
8. Joined on 1 May 2022.
9. The % change in the taxable benefits for employee population is related to the impact Covid-19 had on expenses and benefits claimed during the year.
10. Includes all UK employees including those in B&Q and Screwfix.
Relative importance of spend on pay
The table below shows the relative importance of spend on employee remuneration when compared with distributions to shareholders.
2022/23
£m
2021/22
£m Percentage change
Overall expenditure on pay 2,002 2,049 -2.3%
Share buybacks undertaken during the year
1
337 157 114.6%
Total dividends paid in the year 246 254 -3.1%
1. During the year the Group purchased 131 million of the company’s own shares for cancellation at a cost of £337 million as part of its capital returns programme.
Directors’ remuneration report continued
94 Kingfisher 2022/23 Annual Report and Accounts
Strategic Report Governance Financial Statements
Pay ratio analysis
Year Method
25th percentile
pay ratio
Median
pay ratio
75th percentile
pay ratio
2022/23
Option B (i.e. 25th percentile, median and 75th percentile individual identified
from our April 2022 gender pay gap analysis) 92:1 84:1 79:1
2021/22 Option B
1
127:1 116:1 113:1
2020/21 Option B 95:1 93:1 71:1
2019/20 Option B 71:1 64:1 56:1
2018/19 Option B 106:1 97:1 81:1
1. Ratios for 2021/22 have been restated using actual share price at vesting of 2019 Alignment Share Award (258.6p) rather than the three month average share
price, between November 2021 and January 2022, used at disclosure.
We have used Option B in the legislation to leverage the analysis completed as part of our UK gender pay gap reporting exercise.
We have determined our 25th, median and 75th percentile individual using data from the respective 5 April snapshots. While gender
pay gap legislation and CEO pay ratio legislation employ different calculations, the three identified UK employees receive similar
remuneration structures, and therefore we are confident that they also represent broadly the same respective percentiles when
calculated using the single figure of total remuneration methodology required in the CEO pay ratio calculation. Where relevant, each
colleague’s pay and benefits were calculated on a full-time equivalent basis, and no further adjustments were made. The values for
total remuneration for the 25th, median and 75th percentile were £21.1k, £23.0k and £24.6k respectively comprising salary and
employer contribution to pension. The salaries for these employees were £20.1k, £21.7k and £23.7k respectively.
The majority of the Group’s workforce are store based. Given this workforce profile, the pay and benefits data used to calculate the
CEO pay ratio are from colleagues who are store based. These colleagues’ reward structure comprises primarily fixed components
while the CEO’s total remuneration is strongly linked to performance with a significant variable component. The year-on-year change
at median can be attributed to the outturns of variable pay elements of the CEO in any given year. The year-on-year change for
CEO can be explained by the change in vesting of Annual Bonus between 2021/22 and 2022/23. The remuneration structures for our
colleagues are aligned to the market and to our remuneration principles. It is, therefore, the Committee’s view that the ratios remain
consistent with pay and progression policies for UK employees.
Executive directors’ shareholdings and share interests (audited information)
Executive directors are required to build a significant shareholding in the company. Unvested awards are not included when assessing
holding requirements. Vested awards are included when assessing holdings but are adjusted to take into account the tax liability
arising on exercise.
The table below sets out the beneficial interests of the executive directors (or any connected persons) in the ordinary shares of the
company and a summary of the outstanding share awards as at 31 January 2023. Calculations are based on a share price of 279.0p
per share (being the closing price of a Kingfisher share on 31 January 2023).
Shares held Awards over nil-cost options
Name
Number of shares
held outright
Vested
but not
exercised
1
Unvested and
subject to
continued
employment
Unvested and
subject to
performance
conditions and
continued
employment
2
Shareholding
requirement
(% of base
salary)
3
Shareholding
31 Jan 23
(% of base
salary)
4
31 Jan 23 31 Jan 22
Executive director
Thierry Garnier
5
100,000 100,000 320,224 – 4,809,189 350% 90%
Bernard Bot
5
80,000 80,000 115,791 – 2,822,064 270% 66%
1. Nil-cost options and awards that have vested but have yet to be exercised are considered to count towards the shareholding requirement, other than any
such shares that correspond to the estimated income tax and national insurance contributions that would arise on their exercise (estimated at 47% of the
award). For Thierry Garnier and Bernard Bot, these awards include the 2019 Alignment Share awards which vested in 2022.
2. These awards include nil-cost options to Thierry Garnier and Bernard Bot in respect of the 2020 and 2021 Alignment Share awards, the 2019 Delivering Value
Incentive award and the 2022 Performance Share Plan award.
3. Shareholding requirement as of 31 January 2023.
4. Between 1 February 2023 and the date of this report, there were no changes in the beneficial interests of the executive directors’ shareholdings.
5. As potential beneficiaries of the Kingfisher Employee Benefit Trust (the Trust), Thierry Garnier and Bernard Bot are deemed to have an interest in the
company’s ordinary shares held by the Trust. The Trust held 6,580,388 ordinary shares at 31 January 2023.
95Kingfisher 2022/23 Annual Report and Accounts
Share awards made during the financial year (audited information)
Options and awards over shares were made during the year ended 31 January 2023 under the Kingfisher Performance Share Plan
rules (KPSP) in respect of the 2022 Performance Share Plan award (PSP).
2022 Performance Share Award
Name Date of grant
1
Number of shares
Face value of award
2
£’000
End of performance
period
3
Final exercise
date
4
Thierry Garner 24 June 2022 958,944 2,333 31 Jan 25 24 May 32
Bernard Bot 24 June 2022 640,309 1,558 31 Jan 25 24 May 32
1. Vesting date of 24 June 2025.
2. The number of shares, at the time of grant, was based on 275% and 260% of base salary for the CEO and CFO respectively and the three-day average closing
share price preceding the date of grant. The awards were made under the KPSP and the value above is based on the closing share price as at the date of
grant, of 243.3 p per share for 24 June 2022.
3. The shares will vest subject to performance against the performance conditions over the period to the end of the 2024/25 financial year.
4. The awards are structured as nil-cost options and have an exercise period of seven years less one month.
The performance conditions attached to the 2022 Performance Share Award are as follows:
Target 2024/25 EPS (25%) 2024/25 ROCE (25%)
TSR Percentile vs. relative
TSR peer group (25%)
Threshold (25% vesting) 36.5p 12.85% 50
th
Stretch (100% vesting) 47.5p 16.30% 75
th
ESG
(25% weighting)
Target
Climate Change
(reduction in scope 1 and 2 emissions)
Forest Positive
(% of wood and paper responsibly
sourced as a % of SKUs purchased)
Gender Diversity
(% of women in senior leadership)
Threshold (25% vesting) 31.0% 95.0% 30%
Target (50% vesting) 34.0% 98.0% 33%
Stretch (100% vesting) 37.8% 99.5% 35%
For the EPS, ROCE and Relative TSR measures, there will be straight-line vesting between Threshold and Stretch. For the ESG
measures, there will be straight-line vesting between Threshold and Target and Target and Stretch.
TSR will be measured against the combined group of the constituents of the FTSE 350 Retailers, FTSE 350 Drug and Grocery Stores
as well as the STOXX 600 Drug and Grocery Stores as at 1 February 2022.
2023 Performance Share Plan Award
The Committee intends to grant Thierry Garnier and Bernard Bot a PSP award with a maximum opportunity of 275% and 260% of
base salary respectively at the next grant date (expected to be late April 2023).
The performance conditions attached to the vesting of the 2023 grant remain the same as for the 2022 award and are EPS, ROCE,
Relative TSR and a basket of three ESG measures. The performance conditions and targets attached to the vesting of the 2023
award are as follows:
Target 2025/26 EPS (25%) 2025/26 ROCE (25%)
TSR Percentile vs. relative
TSR peer group (25%)
Threshold (25% vesting) 29.7p 9.70% 50
th
Stretch (100% vesting) 37.7p 11.95% 75
th
ESG
(25% weighting)
Target
Climate Change
(reduction in scope 1 and 2 emissions)
Forest Positive
(% of wood and paper responsibly
sourced as a % of SKUs purchased)
Gender Diversity
(% of women in senior leadership)
Threshold (25% vesting) 45.0% 98.0% 31%
Target (50% vesting) 46.0% 99.0% 34%
Stretch (100% vesting) 47.0% 99.5% 36%
Directors’ remuneration report continued
96 Kingfisher 2022/23 Annual Report and Accounts
Strategic Report Governance Financial Statements
For the EPS, ROCE and Relative TSR measures, there will be straight-line vesting between Threshold and Stretch. For the ESG
measures, there will be straight-line vesting between Threshold and Target and Target and Stretch. These measures have been
chosen for the PSP as EPS, ROCE and ESG are aligned to the strategy while relative TSR ensures that payouts for participants are
aligned to long-term value creation for shareholders. ESG in particular was chosen to reflect the importance of our Responsible
Business agenda and to recognise our long-term goals and commitments. The chosen ESG measures are all core elements of
our agenda. These will be weighted equally within the ESG basket of measures.
The primary reference point for setting the EPS and ROCE targets is the Group’s internal three-year plan. The Group’s current
internal plan takes into account the changes in the Group’s operating environment since 2022. This has meant a reduction in the EPS
and ROCE targets for the 2023 awards versus the targets set for the 2022 awards. The Committee has also reviewed the target
ranges versus consensus and is confident that the ranges are highly stretching with maximum vesting only being possible for
exceptional performance. EPS will be based on ‘pence’ in line with last year.
For ESG measures, targets have been set using our long-term public commitments and internal targets as well as 2022/23 outturns.
All target ranges demonstrate a progression in the target ranges versus. the target ranges in the 2022 PSP.
— The target range for our climate change measure, which is a reduction in scope 1 and 2 carbon emissions from a 2016/17 baseline,
has been set taking into account our already substantial progress against targets approved by the Science Based Targets
initiative as well as our new net zero commitment. Further details can be found on page 24.
— For our Forest Positive measure, which is % of wood and paper products responsibly sourced, targets were set taking into
account our long-term aim for 100% of our wood and paper products to be responsibly sourced, as well as our progress to
date on this measure.
— Improving the % of women in our senior leadership population (top 300) remains an important and ongoing area of focus. The
target range has been set taking into account our current outturn and the significant progress required to achieve to achieve
our long-term aims.
The Relative TSR measure remains unchanged. Kingfisher’s TSR will be measured against the combined group of the constituents of
the FTSE 350 Retailers, FTSE 350 Drug and Grocery Stores as well as the STOXX 600 Drug and Grocery Stores as at 1 February 2023.
Scheme interests exercised during the financial year (audited information)
No awards were exercised by executive directors during the year.
Dilution limits
The terms of the company’s share plans set limits on the number of newly issued shares that may be issued to satisfy awards.
In accordance with guidance from the Investment Association, these limits restrict overall dilution under all plans to under 10% of
the issued share capital over a 10-year period, with a further limitation of 5% in any 10-year period on executive plans.
Only those awards granted under the Kingfisher Sharesave plan are satisfied by newly issued shares.
Any awards that are satisfied by market-purchased shares are excluded from these calculations, including all awards made under
the Kingfisher Alignment Share and Transformation Incentive Plan (KASTIP) and Kingfisher Performance Share Plan (KPSP).
No treasury shares were held or utilised in the year ended 31 January 2023.
97Kingfisher 2022/23 Annual Report and Accounts
Single total figure of remuneration for the non-executive directors (audited information)
Fees payable to non-executive directors
The table below sets out the remuneration of each non-executive director during the financial year ended 31 January 2023 and the
comparative figures for the year ended 31 January 2022. During the year, no payments were made to non-executive directors for
expenses other than those incurred in the ordinary course of their appointments.
Name Additional responsibilities
Committee
membership
1
Fees
2022/23
£’000
Fees
2021/22
£’000
Taxable
benefits
2022/23
£’000
Taxable
benefits
2021/22
£’000
Total
2022/23
£’000
Total
2021/22
£’000
Andrew Cosslett
2
Chair, Nomination Committee Chair R, N 509.9 495 1.3
3
1.2
3
511.1 496.2
Claudia Arney Remuneration Committee Chair R, N 86.3 86.3 – – 86.3 86.3
Catherine Bradley Senior Independent Director A, R, N 106.3 86.3 – – 106.3 86.3
Jeff Carr Audit Committee Chair A, R, N 96.3 86.3 – – 96.3 86.3
Sophie Gasperment Responsible Business Committee Chair N, RB 86.3 86.3 – – 86.3 86.3
Rakhi Goss-Custard A, R, N, RB 96.3 66.3 – – 96.3 66.3
Bill Lennie
4
A, N 57.2 n/a – n/a 57.2 n/a
Total 1,038.6 906.5 1.3 1.2 1,039.8 907.7
1. Indicates which directors served on each committee during the year: Audit Committee = A; Nomination Committee = N; Remuneration Committee = R;
Responsible Business Committee = RB.
2. For his role as Chair, Andrew Cosslett receives a fee of £463,500 per annum. The fees paid to Andrew Cosslett include a contribution of £46,350 towards the
costs of an assistant.
3. These relate to private medical cover for Andrew Cosslett and his family.
4. Bill Lennie was appointed to the Board on 1 May 2022.
Notes to the single total figure of remuneration for the non-executive directors (audited information)
Fees
Fees paid to the Chair and non-executive directors for 2022/23 and 2021/22 are shown below. No benefits are provided except for a
store discount card of up to 20%.
Fees
£’000
As at 1 February
2022
As at 1 February
2021 % increase
Chair
1
509.9 495.0 3%
Non-executive director fee 66.3 66.3 0%
Senior Independent Director 20.0 20.0 0%
Audit Committee Chair 20.0 20.0 0%
Remuneration Committee Chair 20.0 20.0 0%
Responsible Business Committee Chair 20.0 20.0 0%
Audit Committee member
2
10.0 n/a n/a
Remuneration Committee member
2
10.0 n/a n/a
Responsible Business Committee member
2
10.0 n/a n/a
1. The Committee reviewed the fee for the company Chair in 2022 and agreed to increase the fee by 3%.
2. The Board reviewed the non-executive fees in 2022 and agreed effective 1 February 2022, a fee will be introduced for the membership of each of the Audit
Committee, Remuneration Committee, and Responsible Business Committee of £10,000 per annum. Committee Chairs do not receive Committee member
fees in addition to their Chair fees.
Directors’ remuneration report continued
98 Kingfisher 2022/23 Annual Report and Accounts
Strategic Report Governance Financial Statements
Non-executive directors’ shareholdings (audited information)
The table below sets out the current shareholdings of the non-executive directors (including beneficial interests and interests of persons
closely associated) as at 31 January 2023. The company does not operate a share ownership policy for the non-executive directors but
encourages non-executive directors to acquire shares on their own account.
Number of shares
held outright as at
31 January 2023*
Number of shares
held outright as at
31 January 2022
Andrew Cosslett 388,556 388,556
Catherine Bradley 20,000 10,000
Claudia Arney 27,460 27,460
Jeff Carr 210,000 10,000
Sophie Gasperment 10,110 10,110
Rakhi Goss-Custard 6,124 6,124
Bill Lennie 100,000 n/a
* There have been no changes to the beneficial interests of the non-executive directors between 1 February 2023 and 20 March 2023.
Statement on the implementation of the Remuneration Policy for 2023/24
Implementation of the Policy for executive directors for the year ahead
Base salary
A 5% salary increase will be awarded to the executive directors effective from 1 April 2023. The new salaries are
£882,525 for the CEO and £623,280 for the CFO. This is in line with the Policy and the increase offered to the wider
UK head office workforce.
Benefits
Will be implemented in line with the Policy.
Pension
12.5% of salary cash allowance in lieu of pension contributions, which is in line with the offering to the wider UK
workforce. This is in line with the Policy.
Annual Bonus
Will be awarded in line with the Policy
The 2023/24 Annual Bonus will have a maximum opportunity of 200% of salary for the CEO and 190% of salary for
the CFO and will be judged based on the achievement of financial and strategic output measures, as set out below:
— 40% Like-for-like sales growth;
— 40% Adjusted pre-tax profit; and
— 20% Strategic measures which for 2023/24 are OEB sales penetration and digital sales penetration both with
a 10% weighting.
A holistic assessment of Group performance will also be taken into consideration.
Any bonus earned over 100% of salary will be deferred into shares for three years.
In the opinion of the Committee, the details of the Annual Bonus measures and targets for 2023/24 are commercially
sensitive as they closely align with annual business priorities and accordingly are not disclosed. These will be
disclosed in the 2023/24 Annual Report and Accounts.
Performance Share Plan
Will be awarded in line with the Policy.
The 2023 Performance Share Plan awards will be granted at the next available grant date. The CEO will be granted an
award of the value 275% of salary at date of grant with the CFO receiving a grant of 260% of salary. The performance
conditions attached to the vesting of award are as follows:
— 25% EPS;
— 25% ROCE;
— 25% Relative TSR; and
— 25% ESG measures (Climate Change, Forest Positive, Gender Diversity).
Details of the target ranges for the 2023 PSP are detailed on page 96.
Performance will be measured over three years, with awards vesting three years after the grant date. Any vested
awards will be subject to an additional two-year holding period.
99Kingfisher 2022/23 Annual Report and Accounts
Implementation of the Remuneration Policy for non-executive directors for the year ahead
Fees £’000
As at
1 February 2023
As at
1 February 2022 % increase
Chair* 530.3 509.9 4%
Non-executive director fee 69.0 66.3 4%
Senior Independent Director fee 20.0 20.0 0%
Audit Committee Chair 20.0 20.0 0%
Remuneration Committee Chair 20.0 20.0 0%
Responsible Business Committee Chair 20.0 20.0 0%
Audit Committee member 10.0 10.0 0%
Remuneration Committee member 10.0 10.0 0%
Responsible Business Committee member 10.0 10.0 0%
* Part of the Chair’s fee relates to a contribution to the cost of his assistant per annum. He additionally receives private medical insurance for himself and his family.
The Board reviewed the non-executive director fee in 2022/23 and agreed to award a 4% increase, increasing the fee to £68,960.
This is to reflect the continuing significant time commitment required from the non-executive directors. This increase is lower than
the increase being implemented for the wider UK workforce. There are no changes to the Senior Independent Director and
Committees’ chair or member fees.
Separately, in respect of the company Chair’s fee, the Committee has agreed to award a 4% increase to the total current combined
fee of £509,850 (comprising of a core £463,500 fee plus £46,350 towards the cost of an assistant). This increases the combined fee
to £530,250 (core fee of £482,040 plus £48,210 towards an assistant). This increase is lower than the increase being implemented for
the wider UK workforce.
Service contracts/letters of appointment
Date of service contract/letter of
appointment
Expiry of
current term
Length of service at
31 January 2023
Andrew Cosslett 1 April 17 31 March 26 5 years
Claudia Arney 1 November 18 31 October 24 4 years
Bernard Bot 21 October 19 12 months rolling 3 years
Catherine Bradley 2 November 20 1 November 23 2 years
Jeff Carr 1 June 18 31 May 24 4 years
Thierry Garnier 25 September 19 12 months rolling 3 years
Sophie Gasperment 1 December 18 30 November 24 4 years
Rakhi Goss-Custard 1 February 16 31 January 25 7 years
Bill Lennie 1 May 22 30 April 25 0 years/9 months
Copies of the executive directors’ service contracts and the non-executive directors’ letters of appointment are held at the
company’s registered office address and are available to shareholders for inspection on request. Requests should be sent by email
to shareholderenquiries@kingfisher.com
Claudia Arney
Chair of the Remuneration Committee
20 March 2023
Directors’ remuneration report continued
100 Kingfisher 2022/23 Annual Report and Accounts
Strategic Report Governance Financial Statements
Directors’ report
This report sets out the information the company and the
Group are required to disclose in the Directors’ report in
compliance with the Companies Act 2006 (the Act), the Financial
Conduct Authority’s Listing Rules (Listing Rules), the Disclosure
Guidance and Transparency Rules (DTRs), and the UK Corporate
Governance Code 2018 (the Code). This report should be read
in conjunction with the Strategic Report on pages 1 to 61 and
the Corporate governance report on pages 62 to 100. In
accordance with Section 414C(11) of the Act, the company has
decided to include certain matters in its Strategic Report that
would otherwise be required to be disclosed in this Directors’
report. Together, the Strategic Report, this Directors’ report,
and other sections of the Corporate governance report
incorporated by reference, when taken as a whole, form the
Management Report as required under Rule 4.1.5R of the DTRs.
The table below sets out the location of applicable disclosures
incorporated into the Directors’ report, by reference. The
majority of the disclosures required under Listing Rule 9.8.4 R
are not applicable to the Group. The table below includes the
location of the disclosures for those requirements that do apply:
Disclosure Page
Allotment of equity securities (LR9.8.4 R) 103
Annual General Meeting (AGM) 185
Corporate Governance report, including
reports from Board committees
62 – 100
Directors’ interests 88 - 100
Directors’ statement of responsibility 104
Diversity and inclusion 14 – 15
Employee share schemes note 31
Equal opportunities including
disabled employees
15
Financial instruments and financial
risk management
note 25
Financial review (LR9.8.4 R) 39 – 50
Future developments 52
Viability statement and going concern 59 - 61
Governance and risk management
for climate change
27 – 38
Interest capitalised by the Group
(LR9.8.4 R)
note 7
Important events since the end of the
financial year
note 37
Key performance indicators 10 – 11
People and development 14 – 15
Risk management and internal control 51 – 58
Statement on engagement with employees 16, 18, 68
Statement on engagement with external
stakeholders
16 – 22
Streamlined Energy and Carbon Reporting 27 – 35
Waiver of dividends 102
Articles of Association (Articles)
The Articles of the company may only be amended by special
resolution at a meeting of the shareholders. The Articles are
available on the company’s website.
Branches
The Kingfisher Group, through various subsidiaries, has
established branches in a number of countries in which the
business operates.
Directors
The Board and their biographical details are set out on pages
64 to 65. Details of the directors’ interests in the shares of
the company can be found in the Directors’ remuneration report
on page 95. Directors are appointed and replaced
in accordance with the Articles, the Act, and the Code. Under
the Articles, all directors will retire from office at the next AGM
where they will submit themselves for election or re-election by
shareholders. During the year, the following change was made to
the Board:
Bill Lennie Non-executive director
(Appointed 1 May 2022)
Directors’ indemnity arrangements
The directors who served on the Board during the year have
been granted a qualifying third-party indemnity, under the Act,
which remains in force. The Group also maintains Directors’
and Officers’ liability insurance in respect of its directors and
officers, and the directors of the Group’s subsidiary companies.
Neither the company’s indemnity nor insurance provide cover in
the event that an indemnified individual is proved to have acted
fraudulently or dishonestly.
Directors’ powers
Subject to provisions of the Act, the Articles, and to any directions
given by special resolution, the business of the company shall be
managed by the Board, which may exercise all the powers of
the company.
Borrowing powers
The directors may exercise all the powers of the company to
borrow money.
Issue of ordinary shares
The directors were authorised by shareholders at the 2022 AGM
to allot shares, as permitted by the company’s Articles. During the
year, 4,845,421 shares were issued under the terms of the Sharesave
Plan at prices between 159.0 pence and 306.0 pence per share.
This resolution was in line with guidance issued by the Investment
Association and remains in force until the conclusion of the
2023 AGM, or if earlier, until close of business on 31 July 2023.
The company will seek to renew this standard authority at the
2023 AGM.
101Kingfisher 2022/23 Annual Report and Accounts
Purchase of own shares
Shareholders further approved a resolution at the 2022 AGM
for the company to make purchases of its own shares up to a
maximum of 10% of its issued share capital.
In line with Kingfisher’s Capital Allocation policy, the Board was
pleased to announce the additional return of £300 million of
surplus capital to shareholders via a share buyback programme
on 23 May 2022 (following the initial £300 million buyback
programme that was announced on 21 September 2021 and
completed on 28 April 2022). This decision was reflective of the
ongoing balance sheet strength and the Board’s confidence in
the outlook for the 2022/23 financial year. This form of return
of capital was selected to increase shareholder returns and
net asset value per share, while supporting an efficient
balance sheet.
During the year the company purchased 131,153,879 ordinary
shares of 15
5/7
pence per share at an average price of £2.56 per
share, for a total consideration of £336 million (excluding stamp
duty). This represents 6.8% of the company’s issued share
capital for the year ended 31 January 2023.
Between 31 January and 17 March 2023, being the latest
practicable date for inclusion in this report, 1,239,440 ordinary
shares of 15
5/7
pence per share have been purchased, bringing
the total shares purchased at 17 March 2023 to 132,393,319, at an
average price of £2.56 per share, and for a total consideration
of £339 million (excluding stamp duty). The total shares purchased
to 17 March 2023 represents 6.8% of the company’s issued
share capital. It is expected that the additional share buyback
programme will be completed by the end of the 2023/24
financial year.
All shares purchased under this authority have been cancelled.
This resolution is in line with guidance issued by the Investment
Association and remains in force until the conclusion of the
2023 AGM, or if earlier, until close of business on 31 July 2023.
The company will seek to renew this standard authority at the
2023 AGM.
Conflicts of interest
The company has robust procedures in place to identify,
authorise and manage potential or actual conflicts of interest,
and these procedures have operated effectively during the
year. Where potential conflicts arise, they are reviewed, and if
appropriate, approved by the Board. Processes for managing
such conflicts are put in place to ensure no conflicted director
is involved in any decision related to their conflict.
Directors’ other key appointments are set out in the directors’
biographies on pages 66 to 67.
Dividends
The interim dividend of 3.80 pence per ordinary share was
paid on 11 November 2022. The Board is recommending a
final dividend of 8.60 pence per ordinary share, making a total
ordinary dividend for the year of 12.40 pence per ordinary share.
Subject to the approval of shareholders at the 2023 AGM, the
final dividend will be paid on 3 July 2023 to shareholders on the
register at 26 May 2023.
The Kingfisher Employee Benefit Trust, Wealth Nominees Limited
(the Trust), waived the following dividends payable by the company
in respect of the ordinary shares it held. The Trustee has agreed to
waive its rights to all dividends payable on the ordinary shares held
in the Trust:
Dividend
Number of
shares waived
(% of holding)
Total value
of dividends
waived
Final 2021/22
(paid June 2022)
11,432,001
100% £983,152.09
Interim 2022/23
(paid November 2022)
8,352,570
100% £317,397.66
Total for year to 31 January 2023 £1,300,549.75
Major shareholdings
As at 31 January 2023 and the date of this report, the company
had been notified under Rule 5 of the DTRs of the following
interests in voting rights in its shares. The information below
was calculated at the date on which the relevant disclosures
were made in accordance with the DTRs, however, the
percentage of total voting rights held by each may have
changed since the company was notified.
% of total
voting rights
Silchester International Investors LLP 11.009
BlackRock, Inc.* 9.850
Mondrian Investment Partners Limited 5.00
Templeton Global Advisors Limited 4.97
Norges Bank 4.405
* Part of the shares held by BlackRock, Inc. are in the form of American
Depositary Receipts (ADRs).
Political donations
The company made no political donations during the year
(2021/22: £nil) and does not intend to make any political
donations in the future.
As is our policy and practice, the company will continue to seek
shareholder approval annually to enable us to make donations or
incur expenditure in relation to EU political parties, other political
organisations, or independent election candidates. This is on a
precautionary basis to avoid any unintentional breach of the
relevant provisions set out in the Act.
Research and development
The company undertakes research and development activities
in order to develop its digital capability. In addition, the company
undertakes product development activities using learnings gained
by understanding our customer’s challenges living and working
at home and engaging with home improvement projects.
More information is available on pages 6 to 11 of the Strategic Report.
Directors’ report continued
102 Kingfisher 2022/23 Annual Report and Accounts
Strategic Report Governance Financial Statements
Share capital
The share capital of the company comprises ordinary shares of
15
5/7
pence per share. All of the company’s issued shares are fully
paid up and each share carries the right to one vote at general
meetings of the company. The authorised and issued share capital
of the company, together with movements in the company’s issued
share capital during the year, are shown in note 29 to the
consolidated financial statements. The Articles contain provisions
governing the ownership and transfer of shares.
The holders of ordinary shares are entitled to receive the
company’s Annual Report and Accounts, to attend and ask
questions at general meetings, to appoint proxies and to
exercise voting rights. There are no restrictions on the transfer
of ordinary shares or on the exercise of voting rights attached
to them, except (i) where the company has exercised its right
to suspend voting rights or to prohibit their transfer following
the omission of their holder or any person interested in them
to provide the company with information requested by it in
accordance with Part 22 of the Act, or (ii) where their holder
is precluded from transferring or otherwise dealing with the
shares or exercising voting rights by the Listing Rules, the City
Code on Takeovers and Mergers, or applicable Government
sanctions. No person has any special rights of control over
the company’s share capital and all issued shares are fully paid.
The company has a Sponsored Level 1 American Depositary
Receipt programme in the United States.
Significant agreements – change of control
There are a number of agreements that take effect, alter or
terminate upon a change of control of the company following
a takeover bid. These are deemed to be significant in terms of
their potential impact on the business of Kingfisher as a whole.
These are:
— the £550 million revolving credit facility dated 28 May 2021
between the company, National Westminster Bank plc (as
the facility agent) and the banks named therein as lenders,
which provides that, subject to certain exceptions, in the
event of a change of control of the company, a lender
will not be obliged to fund a utilisation request and may
notify the agent that they wish to cancel their commitment
resulting in the commitment of that lender being cancelled
and all outstanding loans, together with accrued interest,
becoming immediately due and payable to that lender.
— the £50 million loan facility dated 23 December 2022
between the company and National Westminster Bank plc,
which contains a provision such that in the event of a
change of control, the bank will not be obliged to fund
a utilisation request and may cancel its commitment
whereupon all outstanding loans together with accrued
interest will become immediately due and payable; and
— the £50 million loan facility dated 16 January 2023 between
the company and Caixabank, S.A., United Kingdom Branch,
which contains a provision such that in the event of a
change of control, the bank will not be obliged to fund
a utilisation request and may cancel its commitment
whereupon all outstanding loans together with accrued
interest will become immediately due and payable.
There are no agreements in place with any director or
officer that would provide compensation for loss of office or
employment resulting from a takeover, except that provisions
of the company’s share incentive schemes may cause options
and awards granted under such schemes to vest on a takeover.
Disclosure of information to auditor
Each person who is a director at the date of approval of this
report confirms that:
— So far as he or she is aware, there is no relevant audit
information of which the company’s auditor is unaware; and
— Each director has taken all the steps that he or she ought to
have taken as a director in order to make himself or herself
aware of any relevant audit information and to establish that
the company’s auditor is aware of that information.
This confirmation is given and should be interpreted in
accordance with the provisions of s418 of the Act.
Directors’ report approval
The Directors’ report was approved by a duly authorised
committee of the Board of Directors on 20 March 2023 and
signed on its behalf by
Chloe Barry
Company Secretary
20 March 2023
103Kingfisher 2022/23 Annual Report and Accounts
Statement of directors’ responsibility
Responsibility for preparing the financial statements
The directors are responsible for preparing the Annual Report
and the financial statements in accordance with applicable law
and regulations.
Company law requires the directors to prepare financial
statements for each financial year. Under that law, the directors
are required to prepare the Group financial statements in
accordance with international accounting standards in conformity
with the requirements of the Companies Act 2006 (the ‘Act’).
The financial statements also comply with International Financial
Reporting Standards (IFRSs) as issued by the IASB. The directors
have elected to prepare the parent company financial statements
in accordance with United Kingdom Generally Accepted
Accounting Practice (United Kingdom Accounting Standards
and applicable law) including FRS 101 ‘Reduced Disclosure
Framework’. Under company law, the directors must not
approve the financial statements unless they are satisfied
that they give a true and fair view of the state of affairs of
the company and of the profit or loss of the company for
that period.
In preparing the parent company financial statements, the
directors are required to:
— Select suitable accounting policies and then apply
them consistently.
— Make judgements and accounting estimates that are
reasonable and prudent.
— State whether applicable UK Accounting Standards have
been followed, subject to any material departures disclosed
and explained in the financial statements.
— Prepare the financial statements on the going concern
basis unless it is inappropriate to presume that the company
will continue in business.
In preparing the Group financial statements in accordance with
IAS 1, ‘Presentation of financial statements’, the directors are
required to:
— Select suitable accounting policies and then apply
them consistently.
— Present information, including accounting policies, in a
manner that provides relevant, reliable, comparable and
understandable information.
— Provide additional disclosures when compliance with the
specific requirements of the financial reporting framework
are insufficient to enable users to understand the impact
of particular transactions, other events and conditions on
the entity’s financial position and financial performance.
— Make an assessment of the company’s ability to continue
as a going concern.
The directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the company’s
transactions and disclose with reasonable accuracy at any time
the financial position of the company and enable them to ensure
that the financial statements comply with the Act. They are
responsible for safeguarding the assets of the company and
for taking reasonable steps for the prevention and detection
of fraud and other irregularities.
The directors are responsible for the maintenance and integrity
of the corporate and financial information included on the
company’s website. Legislation, regulation and practice in the
United Kingdom governing the preparation and dissemination
of financial statements may differ from legislation, regulation
and practice in other jurisdictions.
Responsibility statement
The directors confirm that to the best of their knowledge:
— The financial statements, prepared in accordance with the
relevant financial reporting framework, give a true and fair
view of the assets, liabilities, financial position and profit or
loss of the parent company and the undertakings included
in the consolidation taken as a whole.
— The Strategic Report includes a fair review of the
development and performance of the business and the
position of the company and the undertakings included
in the consolidation taken as a whole, together with a
description of the principal risks and uncertainties
they face.
— The Annual Report and Accounts, taken as a whole, are fair,
balanced, and understandable and provide the information
necessary for shareholders to assess the company’s
position, performance, business model and strategy.
Statement of directors’ responsibility approval
The statement of directors’ responsibility was approved
by a duly authorised committee of the Board of Directors
on 20 March 2023 and signed on its behalf by
Chloe Barry
Company Secretary
20 March 2023
104 Kingfisher 2022/23 Annual Report and Accounts
Strategic Report Governance Financial Statements
Independent auditors’ report
1. Opinion
We have audited the financial statements which comprise:
— the consolidated income statement;
— the consolidated statement of comprehensive income;
— the consolidated and parent company statements of
changes in equity;
— the consolidated and parent company balance sheets;
— the consolidated cash flow statement; and
— the related notes 1 to 37 to the group financial statements
and notes 1 to 15 to the parent company financial statements.
The financial reporting framework that has been applied in the
preparation of the group financial statements is applicable law,
United Kingdom adopted international accounting standards and
IFRSs as issued by the IASB. The financial reporting framework
that has been applied in the preparation of the parent company
financial statements is applicable law and United Kingdom
Accounting Standards, including FRS 101 “Reduced Disclosure
Framework” (United Kingdom Generally Accepted
Accounting Practice).
Report on the audit of the financial statements
In our opinion:
— the financial statements of Kingfisher plc (the ‘parent
company’) and its subsidiaries (the ‘group’) give a
true and fair view of the state of the group’s and of
the parent company’s affairs as at 31 January 2023
and of the group’s profit for the year then ended;
— the group financial statements have been properly
prepared in accordance with United Kingdom
adopted international accounting standards and
International Financial Reporting Standards
(IFRSs) as issued by the International
Accounting Standards Board (IASB);
— the parent company financial statements have
been properly prepared in accordance with United
Kingdom Generally Accepted Accounting Practice,
including Financial Reporting Standard 101
“Reduced Disclosure Framework”; and
— the financial statements have been prepared
in accordance with the requirements of the
Companies Act 2006.
2. Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)) and applicable law.
Our responsibilities under those standards are further
described in the auditor’s responsibilities for the audit
of the financial statements section of our report.
We are independent of the group and the parent company
in accordance with the ethical requirements that are relevant
to our audit of the financial statements in the UK, including the
Financial Reporting Council’s (the ‘FRC’s’) Ethical Standard as
applied to listed public interest entities, and we have fulfilled
our other ethical responsibilities in accordance with these
requirements. The non-audit services provided to the group
and parent company for the year are disclosed in note 8 to the
financial statements. We confirm that we have not provided any
non-audit services prohibited by the FRC’s Ethical Standard to
the group or the parent company.
We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.
105Kingfisher 2022/23 Annual Report and Accounts
Independent auditors’ report continued
4. Conclusions relating to going concern
In auditing the financial statements, we have concluded that the
directors’ use of the going concern basis of accounting in the
preparation of the financial statements is appropriate.
Our evaluation of the directors’ assessment of the group’s and
parent company’s ability to continue to adopt the going concern
basis of accounting included:
— understanding the relevant controls relating to the
assessment of the appropriateness of the going
concern assumptions;
— assessing the entity’s financing facilities including nature
of facilities, repayment terms, covenants and available
undrawn committed facilities;
— considering the linkage of management’s forecasts to
the group’s business model and identified principal risks;
— assessing the key assumptions used in the
group’s forecasts;
— assessing the impact of reasonably possible downside
scenarios on the group’s funding position including forecast
financial covenants and their compliance over the going
concern period;
— assessing under what circumstances the group would
require additional funding and determining whether such
a scenario was likely to occur;
— recalculating the amount of headroom in the forecasts
(liquidity and covenants);
— evaluating the integrity of the model used to prepare the
forecasts, which includes testing of clerical accuracy of
those forecasts and our assessment of the historical
accuracy of forecasts prepared by management; and
— assessing whether the disclosures in relation to going
concern are appropriate.
Based on the work we have performed, we have not identified
any material uncertainties relating to events or conditions that,
individually or collectively, may cast significant doubt on the
group’s and parent company’s ability to continue as a going
concern for a period of at least twelve months from when
the financial statements are authorised for issue.
In relation to the reporting on how the group has applied the UK
Corporate Governance Code, we have nothing material to add
or draw attention to in relation to the directors’ statement in the
financial statements about whether the directors considered it
appropriate to adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the directors with
respect to going concern are described in the relevant sections
of this report.
3. Summary of our audit approach
Key audit matters
The key audit matters that we identified in the current year were:
— Impairment of store-based assets: B&Q UK and France (charges and reversals);
— Taxation matters: transfer pricing and EU state aid; and
— Inventory valuation.
Within this report, key audit matters are identified as follows:
Newly identified
Increased level of risk
Similar level of risk
Decreased level of risk
Materiality
The materiality that we used for the group financial statements was £35 million which was determined
on the basis of c. 5% of adjusted profit before tax.
Scoping
We focused our group audit scope on all significant trading entities and the group’s head office and
support functions. These accounted for 94% of the group’s revenue, 92% of the group’s profit before
tax and 89% of the group’s net assets
Significant changes in our
approach
In the prior year, we identified a key audit matter relating to the classification and presentation of
adjusting items. For the current year we have assessed there to be a lower level of judgement for
items included as adjusting and we note, excluding the group’s net store-based impairment charge
(£139 million) and Romania goodwill impairment (£16 million), the remaining level of aggregated
adjusting items are immaterial.
No other significant changes in approach were noted in the current year.
106 Kingfisher 2022/23 Annual Report and Accounts
Strategic Report Governance Financial Statements
5. Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial
statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to
fraud) that we identified. These matters included those which had the greatest effect on: the overall audit strategy, the allocation of
resources in the audit; and directing the efforts of the engagement team.
These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon,
and we do not provide a separate opinion on these matters.
5.1. Impairment of store-based assets: B&Q UK and France (charges and reversals)
Key audit matter
description
As at 31 January 2023, property, plant and equipment totalled £3,205 million (31 January 2022: £3,078
million) and right-of-use assets totalled £1,947 million (31 January 2022: £1,885 million), as disclosed in
notes 15 and 17 to the financial statements.
In the current year, the group recorded a net store-based asset impairment charge of £139 million
(2021/22: net impairment reversal of £33 million) across the stores or Cash Generating Units (‘CGUs’).
Of this total net charge, £149 million (2021/22: £29 million) represented an impairment charge and
£10 million (2021/22: £62 million) impairment reversals.
Of this total, £124 million of the net store-based asset impairment charge (2021/22: £21 million net
impairment reversal) related to B&Q UK and the group’s banners in France. Given the significance
of the net impairment charge and in line with the classification of impairment reversals in 2021/22,
the group has classified the net impairment charge as an adjusting item. Given the quantum of
impairment in the current year, the level of risk associated with this key audit matter has increased
in the current year.
At each reporting date, in accordance with the requirements of IAS 36 ‘Impairment of Assets’, an
assessment is performed as to whether there are any indicators that property, plant and equipment
and right-of-use assets, including the group’s stores, may be impaired or whether there is any indication
that an impairment loss recognised in a previous period either no longer exists or a portion of the
previously recognised loss should be reversed. Should such indicators exist, the assets’ recoverable
amounts are subsequently estimated. For the current year the group concluded that the impact
of rising interest rates on discount rates was a pervasive indicator of impairment for the group’s
store-based assets and an all-store impairment assessment was conducted (2021/22 – assessment
conducted on an indicator basis only).
Impairment of store-based assets is primarily evaluated with reference to the value in use of stores,
which is calculated as the net present value of future cash flows, driven by the group’s board-approved
three-year plan. The group also uses vacant possession valuations to approximate fair value less costs
to sell when considering the recoverable amount of freehold and certain long leasehold stores.
There are several judgements in assessing value in use that are set out below and there is a risk that
the net impairment charge recorded is not supportable based on the inputs used in the model. Cash
flow forecasting, impairment modelling and assessing property values are all inherently judgemental.
We have determined that there is potential fraud risk associated with the cash flow forecast
assumptions used in the impairment model.
The key assumptions applied by management, which form part of our significant risk, in the group’s
store-based asset impairment assessments are:
— forecast short term cash flows, which include the stores sales assumptions and margin/contribution,
store costs, including staff payroll, general operating costs and the identification and allocation of a
proportion of central overhead costs to stores; and
— country-specific discount rates.
Other assumptions assessed as part of our audit procedures relating to the group store-based asset
impairment include:
— long-term growth rates; and
— determining the vacant possession value of freehold properties throughout the group.
107Kingfisher 2022/23 Annual Report and Accounts
Independent auditors’ report continued
How the scope of our
audit responded to the
key audit matter
Our audit focused on whether store-based asset impairment charges in B&Q UK and the group’s
banners in France have been appropriately calculated in accordance with the requirements of IAS 36,
‘Impairment of Assets’. In doing so we carried out the following procedures with respect to the CGUs
across the B&Q and French banners:
— obtained an understanding of the relevant controls in respect of the impairment reviews across
the group and key review controls associated with the group’s budgeting process, the impairment
models and the determination of discount rates to be used in the models;
— assessed the mechanical accuracy of the impairment models;
— in addressing the fraud risk associated with these cash flow forecasts we challenged the key
inputs into the value in use computation, namely forecast sales growth and margin by evaluating
both past performance, our understanding of the group’s strategic initiatives, benchmarking
against external information and the rationale for future assumptions. We also assessed the
level of past store performance to assess whether assumptions applied were appropriate at
the store level;
— assessed management’s reconciliation of CGU-level cash flows to the board-approved
three-year plan in order to test the allocation of those cash flows;
— evaluated the discount rate and long-term growth rates applied by management against
external economic data with the involvement of our valuation specialists;
— considered the structure of the business and recent changes in group strategy to evaluate
the identification and allocation of central overheads into store impairment models;
— agreed the vacant possession value of freehold property to third party valuation reports
and assessed the inputs and valuation methodology applied by involving our real estate
specialists; and
— assessed the appropriateness of the financial statements disclosures made.
Key observations
We are satisfied that the net impairment charge recorded in the year and the carrying value of
store-based assets at the year-end within B&Q UK and the French banners are appropriate and
that disclosures have been made in accordance with IFRS requirements.
5.2. Taxation matters: transfer pricing and EU state aid
Key audit matter
description
The group files tax returns in many jurisdictions and is periodically subject to tax audits in the ordinary
course of its business, including matters relating to cross-border intra-group services, brand royalties
and interest. Applicable tax laws and regulations are subject to differing interpretations and the
resolution of a final tax position can take several years.
Where it is considered that future tax liabilities are more likely than not to arise, an appropriate
provision is recognised in the financial statements and is held as a tax liability on the balance sheet.
In addition, the group received a charging notice from HMRC in 2020/21 in relation to EU state
aid for £57 million (and subsequently for £7 million interest) as set out in note 35. The group settled
the amount but appealed the notice on the grounds that there was no state aid and subsequently
recognised a corresponding debtor of £64 million as they expect the appeal in an associated case to
be successful. The outcome of the case is currently unknown and therefore there is judgement as to
the recoverability of the debtor. Refer to note 35 in the group financial statements which disclose
the developments in the year relating to this judgement.
Our key audit matter focused on the completeness and valuation of the transfer pricing provisions
associated with ongoing cases and the uncertain tax position relating to EU state aid. There is
judgement in determining whether a provision should be recorded, and if it is recorded, what the
value of the provision should be with reference to the facts and circumstances of the individual case.
There is also judgement associated with the recoverability of the EU state aid debtor and whether any
impairment is required.
108 Kingfisher 2022/23 Annual Report and Accounts
Strategic Report Governance Financial Statements
How the scope of our
audit responded to the
key audit matter
Our audit focused on uncertain tax positions relating to transfer pricing provisions and the EU state aid
debtor. In respect of these areas, we performed the following procedures:
— we obtained an understanding of the relevant controls, which included management’s review and
challenge of the judgements taken in regards to taxation matters;
— in conjunction with our tax specialists including transfer pricing specialists and EU state aid
specialists, we evaluated the tax positions taken by management in the context of local tax law
and assessed the valuation and completeness of transfer pricing provisions and the debtor held
in relation to EU state aid;
— involved our transfer pricing specialists to assist in understanding the approach taken to transfer
pricing, the transactions that flow between group entities including any changes in approach
during the year; and
— in conjunction with our tax specialists, assessed the disclosures in the financial statements in
relation to taxation matters.
Key observations
We consider the provisions recorded for transfer pricing and the valuation of the debtor in respect
of EU state aid to be appropriate in the context of the group’s overall potential tax exposures.
We consider the overall level of disclosure in relation to transfer pricing provisions and the disclosure
for EU state aid in note 35 to be appropriate.
5.3. Inventory valuation
Key audit matter
description
As at 31 January 2023, net inventory, after recognising relevant provisions, is £3,070 million
(2021/22: £2,749 million) as disclosed in note 19 to the financial statements.
Assessing the valuation of inventory, in accordance with IAS 2 ‘Inventories’, requires significant
judgement in estimating the eventual selling price of items held, as well as assessing which items
may be slow-moving or obsolete and as a result may need providing for.
We have determined the key audit matter to be specifically in relation to the judgements and
methodology applied in determining the level of inventory provisioning required. Given the judgement
required in determining this provisioning which relies on forward-looking information, and that the
effects of changes in inventory provisioning could have a significant impact on gross profit and
margin, we consider that there is potential fraud risk associated with this key audit matter.
How the scope of our
audit responded to the
key audit matter
Our audit focused on whether the valuation of year-end inventory was in accordance with IAS 2
‘Inventories’. This included challenging the judgements taken regarding the obsolescence and net
realisable value of inventory and the appropriateness of provisions for such items.
We carried out the following procedures in assessing the appropriateness of the valuation of
inventories:
— obtained an understanding of the relevant controls, which included a review of the inventory
provision recorded at a banner level by members of the finance team and assessed inventory
controls in the group’s most significant locations;
— assessed the group’s inventory provisioning policy, with specific consideration of its ongoing
appropriateness in light of changes in the business and the macroeconomic environment, the
risk profile of inventory and consideration of any expected clearance activity;
— assessed the existence and condition of inventory by attending a sample of inventory counts
throughout the year across all in-scope components;
— checked the value of a sample of inventory to assess whether it is held at the lower of cost
and net realisable value, through comparison to vendor invoices and current sales prices; and
— in addressing the fraud risk, we re-calculated the provisions recorded to evaluate whether they
are in line with group policy and IAS 2. This was done in conjunction with our IT specialists for
some components where a manual re-computation was not possible.
Key observations
The results of our audit work were satisfactory and we conclude that the level of inventory provisions
is appropriate.
109Kingfisher 2022/23 Annual Report and Accounts
Independent auditors’ report continued
6. Our application of materiality
6.1. Materiality
We define materiality as the magnitude of misstatement in the financial statements that makes it probable that the economic
decisions of a reasonably knowledgeable person would be changed or influenced. We use materiality both in planning the scope
of our audit work and in evaluating the results of our work.
Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:
Group financial statements Parent company financial statements
Materiality £35 million (2021/22: £47 million) £32 million (2021/22: £42 million)
Basis for determining
materiality
c. 5% of adjusted profit before tax (2021/22: c. 5%).
Adjusted items are defined in note 2a with analysis
included in note 6.
0.6% of net assets (2021/22: 0.7%), which is
capped at 90% (2021/22: 90%) of group materiality.
Rationale for the
benchmark applied
We have determined materiality on a basis that
is consistent with FY21/22.
Adjusted profit before tax was selected as the
basis of materiality because this is the primary
measure by which stakeholders and the market
assesses performance of the group.
In coming to this judgement, we also considered
further benchmarks including revenue and net
assets as alternative benchmarks.
We excluded adjusted items when determining
the basis for materiality because the items,
primarily relating to net impairment charges
of assets, do not form part of the underlying
trading performance of the group.
The company is non-trading and contains the
investments in all the trading components of
the group.
Group materiality
Adjusted PBT
£758m
£35m
Group materiality
£35m
Component
materiality range
£18m - £35m
Audit committee
reporting threshold
£1.75m
Materiality
110 Kingfisher 2022/23 Annual Report and Accounts
Strategic Report Governance Financial Statements
6.2. Performance materiality
We set performance materiality at a level lower than materiality to reduce the probability that, in aggregate, uncorrected and
undetected misstatements exceed the materiality for the financial statements as a whole.
Group financial statements Parent company financial statements
Performance materiality 70% (2021/22: 70%) of group materiality 70% (2021/22: 70%) of parent company materiality
Basis and rationale for
determining performance
materiality
In determining performance materiality for both group and the parent company, we considered the
following factors:
— our risk assessment, including our assessment of the group’s overall control environment; and
— the nature, volume and size of misstatements (corrected and uncorrected) in the previous audit,
which has indicated a low number of corrected and uncorrected misstatements identified in
prior periods
6.3. Error reporting threshold
We agreed with the Audit Committee that we would report to
the Committee all audit differences in excess of £1.75 million
(2021/22: £2.0 million), as well as differences below that threshold
that, in our view, warranted reporting on qualitative grounds. We
also report to the Audit Committee on disclosure matters that
we identified when assessing the overall presentation of the
financial statements.
7. An overview of the scope of our audit
7.1. Identification and scoping of components
Our approach to scoping the group audit was to understand the
group and its environment, including group-wide controls, and
assess the risks of material misstatement at the group level. The
group operates over 1,500 stores (2021/22: over 1,400 stores)
in eight countries (2021/22: eight countries) across Europe.
We focused our group audit scope primarily on all significant
trading entities as well as head office entities. In the prior year
full scope audit procedures were performed over the following
components: B&Q UK, Screwfix UK, Castorama France, Brico
Dépôt France, Castorama Poland, and the parent company.
We have reviewed our audit scope in the current year with
due consideration of the risk profile, control environment, the
changes in the group structure and how much coverage we will
obtain. As such we concluded that full scope audit procedures
would continue to be performed for B&Q UK, Screwfix UK,
Castorama France, Brico Dépôt France, Castorama Poland
and the parent company. Kingfisher Information Technology
Services UK and B&Q Properties were subject to specified
audit procedures on prescribed balances associated with
defined audit risks. All other entities were subject to analytical
procedures at the group level. All financial reporting is managed
by local finance functions with group oversight from the head
office in London.
In scope entities include both full scope entities and entities
subject to specified procedures. These entities account for 94%
(2021/22: 94%) of the group’s revenue, 92% (2021/22: 85%) of the
group’s profit before tax and 89% (2021/22: 98%) of the group’s
net assets.
Full audit scope
Review at group level
Full audit scope
Review at group level
Full audit scope
Specified audit procedures
Review at group level
94%
6%
92%
8%
73%
11%
16%
Revenue Profit before tax Net assets
111Kingfisher 2022/23 Annual Report and Accounts
Independent auditors’ report continued
7.2. Our consideration of the control environment
7.2.1. IT environment
We identified the main finance systems (SAP, CODA, HFM) and
certain other systems including in-store transaction processing
systems as the key IT systems relevant to our audit. SAP and
CODA are enterprise resource planning systems used for
day-to-day financial management at the local level. HFM is
a financial reporting system used internally to facilitate the
reporting of financial information between the local and group
finance teams. IT systems are primarily managed from the
centralised Kingfisher IT Services function and therefore we
involved a central IT audit team to evaluate the IT systems to
support our audit.
We planned to rely on IT controls associated with SAP and
CODA across certain full scope entities. We identified general IT
controls relevant to the audit as well as specific IT controls that
supported our controls reliance approach for certain business
processes. Across the in-scope entities, IT controls were
relied on in the trading businesses to support audit work on
the revenue, expenditure and inventory processes as detailed
in Section 7.2.2.
In order to evaluate the operating effectiveness of IT controls,
we performed walkthrough procedures to understand whether
the purpose of the control was effectively designed to address
the IT related risk and then performed testing of the control
across the audit period, to determine whether the control
had been consistently applied.
Our procedures enabled us to place reliance on IT controls,
as planned, in the audit approach.
7.2.2. Controls reliance
We sought to adopt a controls reliance approach over the
revenue, expenditure and inventory processes across certain
components of the group.
Our ability to adopt a controls reliance approach relied on
the evaluation of testing of the relevant controls in the above
business processes throughout the year.
For components that were not subject to full scope audit
procedures, we were not able or chose not to adopt a controls
reliance approach in the business processes above, having
given due consideration to the risk and controls profile of
that component. This did not affect our ability to conclude
in these areas at either the component or group level.
7.3. Our consideration of climate-related risks
As part of our audit we made enquiries of management to
understand the process they have adopted to assess the
potential impact of climate change on the financial statements.
In 2022/23 the group has elevated climate change as a principal
risk of the business (2021/22 – emerging risk). The group
currently considers climate to have limited impact over its three
year planning horizon (as stated on page 52 and Note 3) but
has assessed that, without effective mitigation and adaptation,
climate change solutions could have longer-term negative
consequences for the group’s strategy and trading operations.
Our procedures have also included the following:
— assessing management’s risk assessment associated with
climate change;
— assessing whether the risks identified by the group are
complete and consistent with our understanding of the group;
— considering the impact of climate on the group’s three year
planning horizon and whether the cash flow forecasts used
for the group’s store-based asset impairment assessment,
goodwill impairment assessment and going concern
assessment appropriately include the impact of
climate change on the business in the short-term;
— involving an Environmental, Social and Governance (“ESG”)
specialist to assist in evaluating whether appropriate
disclosures have been made in the financial statements with
reference to the Task Force on Climate-Related Financial
Disclosures (“TCFD”) requirements and climate related
disclosures in the notes to the financial statements; and,
— reading the disclosures in the strategic report to consider
whether they are materially consistent with the financial
statements and our knowledge obtained in the audit.
7.4. Working with other auditors
We worked closely with the Deloitte component auditors to
involve them in our planning procedures and also to maintain
oversight throughout the audit process. We communicated our
requirements of the component auditors regularly throughout
the year and issued referral instructions formalising our
requirements of the component teams. We held an internal
group wide team meeting to discuss the planned audit
approach and the risks within each component.
A senior member of the group audit team maintained
regular contact with the component audit teams and discussed
significant audit matters arising from the performance of local
audit procedures. Periodic meetings with group and component
management were held throughout the year to build on the
understanding of the significant audit matters within
components to inform our group audit approach.
The most significant components of the group are its retail
businesses in the UK, France and Poland. As such, there was a
high level of communication between these teams to ensure
an appropriate level of group audit team involvement in the
component audit work.
For each of these most significant components, a senior
member of the group audit team reviewed the component
working papers, including key planning and reporting documents,
the procedures performed to address group significant risks
and the procedures performed to respond to other areas of
focus and local significant risks, in order to satisfy ourselves
that we had obtained sufficient appropriate audit evidence in
response to the identified risks.
The Group Engagement Partner and other senior members
of the group audit team attended the audit close meeting of
every component subject to a full scope audit. In performing
the procedures detailed above the group audit team reviewed,
considered and challenged the key matters relevant to our
conclusion in relation to the group audit and assessed the
impact on our group audit.
112 Kingfisher 2022/23 Annual Report and Accounts
Strategic Report Governance Financial Statements
8. Other information
The other information comprises the information included in
the annual report being the strategic reports on pages 1 to 61
and the governance reports on pages 62 to 106, other than
the financial statements and our auditor’s report thereon.
The directors are responsible for the other information
contained within the annual report.
Our opinion on the financial statements does not cover the
other information and, except to the extent otherwise explicitly
stated in our report, we do not express any form of assurance
conclusion thereon.
Our responsibility is to read the other information and, in
doing so, consider whether the other information is materially
inconsistent with the financial statements, or our knowledge
obtained in the course of the audit, or otherwise appears to
be materially misstated.
If we identify such material inconsistencies or apparent material
misstatements, we are required to determine whether this gives
rise to a material misstatement in the financial statements
themselves. If, based on the work we have performed, we
conclude that there is a material misstatement of this other
information, we are required to report that fact.
We have nothing to report in this regard.
9. Responsibilities of directors
As explained more fully in the directors’ responsibilities
statement, the directors are responsible for the preparation of
the financial statements and for being satisfied that they give a
true and fair view, and for such internal control as the directors
determine is necessary to enable the preparation of financial
statements that are free from material misstatement, whether
due to fraud or error.
In preparing the financial statements, the directors are
responsible for assessing the group’s and the parent company’s
ability to continue as a going concern, disclosing as applicable,
matters related to going concern and using the going concern
basis of accounting unless the directors either intend to
liquidate the group or the parent company or to cease
operations, or have no realistic alternative but to do so.
10. Auditor’s responsibilities for the audit of the
financial statements
Our objectives are to obtain reasonable assurance about
whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to
issue an auditor’s report that includes our opinion. Reasonable
assurance is a high level of assurance but is not a guarantee
that an audit conducted in accordance with ISAs (UK) will always
detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users
taken on the basis of these financial statements.
A further description of our responsibilities for the audit of
the financial statements is located on the FRC’s website at:
www.frc.org.uk/auditorsresponsibilities. This description
forms part of our auditor’s report.
11. Extent to which the audit was considered capable
of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance
with laws and regulations. We design procedures in line with
our responsibilities, outlined above, to detect material
misstatements in respect of irregularities, including fraud.
The extent to which our procedures are capable of
detecting irregularities, including fraud is detailed below.
11.1. Identifying and assessing potential risks related
to irregularities
In identifying and assessing risks of material misstatement in
respect of irregularities, including fraud and non-compliance
with laws and regulations, we considered the following:
— the nature of the industry and sector, control environment
and business performance including the design of the
group’s remuneration policies, key drivers for directors’
remuneration, bonus levels and performance targets;
— results of our enquiries of management, internal audit
and the audit committee about their own identification
and assessment of the risks of irregularities, including
those that are specific to the group’s sector;
— any matters we identified having obtained and reviewed
the group’s documentation of their policies and procedures
relating to:
— identifying, evaluating and complying with laws and
regulations and whether they were aware of any
instances of non-compliance;
— detecting and responding to the risks of fraud and
whether they have knowledge of any actual, suspected
or alleged fraud; and
— the internal controls established to mitigate risks of
fraud or non-compliance with laws and regulations;
— the matters discussed among the audit engagement team
including significant component audit teams and relevant
internal specialists, including tax, valuations, financial
instruments, pensions and IT specialists regarding how
and where fraud might occur in the financial statements
and any potential indicators of fraud.
As a result of these procedures, we considered the
opportunities and incentives that may exist within the
organisation for fraud and identified the greatest potential for
fraud in the following areas: impairment of store-based assets:
B&Q UK and France (charges and reversals) and inventory
valuation. In common with all audits under ISAs (UK), we are also
required to perform specific procedures to respond to the
risk of management override.
We also obtained an understanding of the legal and regulatory
frameworks that the group operates in, focusing on provisions
of those laws and regulations that had a direct effect on the
determination of material amounts and disclosures in the
financial statements. The key laws and regulations we considered
in this context included the UK Companies Act, Listing Rules,
pensions legislation, and UK and overseas tax legislation.
113Kingfisher 2022/23 Annual Report and Accounts
Independent auditors’ report continued
In addition, we considered provisions of other laws and
regulations that do not have a direct effect on the financial
statements but compliance with which may be fundamental
to the group’s ability to operate or to avoid a material penalty.
These included General Data Protection Regulation,
government grants and Energy and Carbon regulations.
11.2. Audit response to risks identified
As a result of performing the above, we identified impairment of
store-based assets: B&Q UK and France (charges and reversals)
and inventory valuation as key audit matters related to the
potential risk of fraud. The key audit matters section of our
report explains the matters in more detail and also describes
the specific procedures we performed in response to those
key audit matters.
In addition to the above, our procedures to respond to risks
identified included the following:
— reviewing the financial statement disclosures and testing
to supporting documentation to assess compliance with
provisions of relevant laws and regulations described as
having a direct effect on the financial statements;
— enquiring of management, the audit committee and
in-house legal counsel concerning actual and potential
litigation and claims;
— performing analytical procedures to identify any unusual or
unexpected relationships that may indicate risks of material
misstatement due to fraud;
— reading minutes of meetings of those charged with
governance, reviewing internal audit reports and reviewing
correspondence with HMRC and other tax authorities; and
— in addressing the risk of fraud through management
override of controls, testing the appropriateness of journal
entries and other adjustments; assessing whether the
judgements made in making accounting estimates are
indicative of a potential bias; and evaluating the business
rationale of any significant transactions that are unusual
or outside the normal course of business.
We also communicated relevant identified laws and regulations
and potential fraud risks to all engagement team members
including internal specialists and significant component audit team
and remained alert to any indications of fraud or non-compliance
with laws and regulations throughout the audit.
Based on the work undertaken as part of our audit, we
have concluded that each of the following elements of
the Corporate Governance Statement is materially
consistent with the financial statements and our
knowledge obtained during the audit:
— the directors’ statement with regards to the
appropriateness of adopting the going concern
basis of accounting and any material uncertainties
identified set out on page 61;
— the directors’ explanation as to its assessment of
the group’s prospects, the period this assessment
covers and why the period is appropriate set out
on page 59-60;
— the directors’ statement on fair, balanced and
understandable set out on page 104;
— the board’s confirmation that it has carried out a
robust assessment of the emerging and principal
risks set out on page 51-58;
— the section of the annual report that describes the
review of effectiveness of risk management and
internal control systems set out on page 76; and
— the section describing the work of the audit
committee set out on page 73-76.
Report on other legal and
regulatory requirements
12. Opinions on other matters prescribed by the
Companies Act 2006
13. Corporate Governance Statement
The Listing Rules require us to review the directors’ statement in
relation to going concern, longer-term viability and that part of
the Corporate Governance Statement relating to the group’s
compliance with the provisions of the UK Corporate
Governance Code specified for our review.
In our opinion the part of the directors’ remuneration
report to be audited has been properly prepared in
accordance with the Companies Act 2006.
In our opinion, based on the work undertaken in the
course of the audit:
— the information given in the strategic report and
the directors’ report for the financial year for
which the financial statements are prepared is
consistent with the financial statements; and
— the strategic report and the directors’ report
have been prepared in accordance with
applicable legal requirements.
In the light of the knowledge and understanding of the
group and the parent company and their environment
obtained in the course of the audit, we have not
identified any material misstatements in the strategic
report or the directors’ report.
114 Kingfisher 2022/23 Annual Report and Accounts
Strategic Report Governance Financial Statements
14. Matters on which we are required to report
by exception
14.1. Adequacy of explanations received and accounting
records
Under the Companies Act 2006 we are required to report to
you if, in our opinion:
— we have not received all the information and explanations
we require for our audit; or
— adequate accounting records have not been kept by the
parent company, or returns adequate for our audit have
not been received from branches not visited by us; or
— the parent company financial statements are not in
agreement with the accounting records and returns.
14.2. Directors’ remuneration
Under the Companies Act 2006 we are also required to report if
in our opinion certain disclosures of directors’ remuneration
have not been made or the part of the directors’ remuneration
report to be audited is not in agreement with the accounting
records and returns.
We have nothing to report in respect of these matters.
We have nothing to report in respect of these matters.
15. Other matters which we are required to address
15.1. Auditor tenure
Following the recommendation of the audit committee, we were
appointed as auditor of the group by the Board of Directors on
5 October 2009 to audit the financial statements for the year
ending 31 January 2010 and subsequent financial periods. The
period of total uninterrupted engagement including previous
renewals and reappointments of the firm is 14 years, covering
the period 31 January 2010 to 31 January 2023.
15.2. Consistency of the audit report with the additional
report to the audit committee
Our audit opinion is consistent with the additional report to the
audit committee we are required to provide in accordance with
ISAs (UK).
16. Use of our report
This report is made solely to the company’s members, as a
body, in accordance with Chapter 3 of Part 16 of the Companies
Act 2006. Our audit work has been undertaken so that we might
state to the company’s members those matters we are required
to state to them in an auditor’s report and for no other purpose.
To the fullest extent permitted by law, we do not accept or
assume responsibility to anyone other than the company and
the company’s members as a body, for our audit work, for this
report, or for the opinions we have formed.
As required by the Financial Conduct Authority (FCA) Disclosure
Guidance and Transparency Rule (DTR) 4.1.14R, these financial
statements will form part of the European Single Electronic
Format (ESEF) prepared Annual Financial Report filed on the
National Storage Mechanism of the UK FCA in accordance
with the ESEF Regulatory Technical Standard (‘ESEF RTS’). This
auditor’s report provides no assurance over whether the annual
financial report has been prepared using the single electronic
format specified in the ESEF RTS.
Nicola Mitchell FCA (Senior statutory auditor)
For and on behalf of Deloitte LLP
Statutory Auditor
London, United Kingdom
20 March 2023
115Kingfisher 2022/23 Annual Report and Accounts
£ millions Notes
2022/23 2021/22
Before
adjusting
items
Adjusting
items
(note 6) Total
Before
adjusting
items
Adjusting
items
(note 6) Total
Sales 4 13,059 – 13,059 13,183 – 13,183
Cost of sales (8,264 ) – (8,264 ) (8,248 ) – (8,248 )
Gross profit 4,795 – 4,795 4,935 – 4,935
Selling and distribution expenses (3,087 ) (136 ) (3,223 ) (3,041 ) 42 (2,999 )
Administrative expenses (868 ) (12 ) (880 ) (836 ) 13 (823 )
Other income 25 1 26 23 3 26
Share of post-tax results of joint ventures and
associates 18 5 – 5 5 – 5
Operating profit 5 870 (147 ) 723 1,086 58 1,144
Finance costs (129 ) – (129 ) (148 ) – (148 )
Finance income 17 – 17 11 – 11
Net finance costs 7 (112 ) – (112 ) (137 ) – (137 )
Profit before taxation 8 758 (147 ) 611 949 58 1,007
Income tax expense 10 (169 ) 29 (140 ) (212 ) 48 (164 )
Profit for the year 589 (118 ) 471 737 106 843
Earnings per share 11
Basic 23.8 p 40.3 p
Diluted 23.5 p 39.8 p
Adjusted basic 29.7 p 35.2 p
Adjusted diluted 29.4 p 34.8 p
The proposed dividend for the year ended 31 January 2023, subject to approval by shareholders at the Annual General Meeting, is
Consolidated income statement
Year ended 31 January 2023
116 Kingfisher 2022/23 Annual Report and Accounts
Strategic Report Governance Financial Statements
£ millions Notes 2022/23 2021/22
Profit for the year 471 843
Remeasurements of post-employment benefits 28 (278 ) 21
Inventory cash flow hedges – fair value gains 58 59
Tax on items that will not be reclassified 85 (18 )
Total items that will not be reclassified subsequently to profit or loss (135 ) 62
Currency translation differences
Group 129 (218 )
Joint ventures and associates 11 (7 )
Inventory cash flow hedges – gains transferred to income statement (5 ) –
Other cash flow hedges
Fair value gains – 1
Gains transferred to income statement – (1 )
Total items that may be reclassified subsequently to profit or loss 135 (225 )
Other comprehensive loss for the year – (163 )
Total comprehensive income for the year 471 680
Consolidated statement of comprehensive income
Year ended 31 January 2023
117Kingfisher 2022/23 Annual Report and Accounts
£ millions
2022/23
Notes
Share
capital
(note 29)
Share
premium
Own
shares
held
Retained
earnings
Capital
redemption
reserve
Other
reserves
(note 30)
Total
equity
At 1 February 2022 325 2,228 (46 ) 4,025 50 196 6,778
Profit for the year – – – 471 – – 471
Other comprehensive (loss)/income for the year – – – (181 ) – 181 –
Total comprehensive income for the year – – – 290 – 181 471
Inventory cash flow hedges – gains transferred to
inventories – – – – – (117 ) (117 )
Share-based compensation 31 – – – 19 – – 19
New shares issued under share schemes 1 – – 7 – – 8
Own shares issued under share schemes – – 24 (24 ) – – –
Purchase of own shares for cancellation 29 (21 ) – – (275 ) 21 – (275 )
Dividends 12 – – – (246 ) – – (246 )
Tax on equity items – – – – – 25 25
At 31 January 2023 305 2,228 (22 ) 3,796 71 285 6,663
£ millions
2021/22
Notes
Share
capital
(note 29)
Share
premium
Own
shares
held
Retained
earnings
Capital
redemption
reserve
Other
reserves
(note 30)
Total
equity
At 1 February 2021 332 2,228 (23 ) 3,630 43 361 6,571
Profit for the year – – – 843 – – 843
Other comprehensive income/(loss) for the year – – – 16 – (179 ) (163 )
Total comprehensive income/(loss) for the year – – – 859 – (179 ) 680
Inventory cash flow hedges – losses transferred
to inventories – – – – – 16 16
Share-based compensation 31 – – – 27 – – 27
New shares issued under share schemes – – – 5 – – 5
Own shares issued under share schemes – – 15 (15 ) – – –
Purchase of own shares for cancellation 29 (7 ) – – (226 ) 7 – (226 )
Purchase of own shares for ESOP trust – – (38 ) – – – (38 )
Dividends 12 – – – (254 ) – – (254 )
Tax on equity items – – – (1 ) – (2 ) (3 )
At 31 January 2022 325 2,228 (46 ) 4,025 50 196 6,778
Consolidated statement of changes in equity
Year ended 31 January 2023
118 Kingfisher 2022/23 Annual Report and Accounts
Strategic Report Governance Financial Statements
£ millions Notes 2022/23 2021/22
Non-current assets
Goodwill 13 2,408 2,424
Other intangible assets 14 371 330
Property, plant and equipment 15 3,205 3,078
Investment property 16 30 33
Right-of-use assets 17 1,947 1,885
Investments in joint ventures and associates 18 30 17
Post-employment benefits 28 251 540
Deferred tax assets 26 16 10
Other tax authority asset 35 64 64
Derivative assets 24 – 1
Other receivables 20 19 22
Current assets
Inventories 19 3,070 2,749
Trade and other receivables 20 347 300
Derivative assets 24 16 37
Current tax assets 40 33
Cash and cash equivalents 21 286 823
Assets held for sale 3 6
Total assets 12,103 12,352
Current liabilities
Trade and other payables 22 (2,483 ) (2,674 )
Borrowings 23 (16 ) (14 )
Lease liabilities 33 (343 ) (347 )
Derivative liabilities 24 (47 ) (12 )
Current tax liabilities – (46 )
Provisions 27 (10 ) (23 )
(2,899 ) (3,116 )
Non-current liabilities
Other payables 22 (4 ) (10 )
Borrowings 23 (102 ) (2 )
Lease liabilities 33 (2,101 ) (2,029 )
Derivative liabilities 24 (5 ) (1 )
Deferred tax liabilities 26 (205 ) (276 )
Provisions 27 (10 ) (10 )
Post-employment benefits 28 (114 ) (130 )
(2,541 ) (2,458 )
Total liabilities (5,440 ) (5,574 )
Net assets 5 6,663 6,778
Equity
Share capital 29 305 325
Share premium 2,228 2,228
Own shares held in ESOP trust (22 ) (46 )
Retained earnings 3,796 4,025
Capital redemption reserve 71 50
Other reserves 30 285 196
Total equity 6,663 6,778
The financial statements were approved by the Board of Directors on 20 March 2023 and signed on its behalf by:
Thierry Garnier
Chief Executive Officer
Bernard Bot
Chief Financial Officer
Consolidated balance sheet
At 31 January 2023
119Kingfisher 2022/23 Annual Report and Accounts
£ millions Notes 2022/23 2021/22
Operating activities
Cash generated by operations 32 984 1,411
Income tax paid (130 ) (169 )
French tax authority payments (34 ) –
Other tax authority payments – (64 )
Net cash flows from operating activities 820 1,178
Investing activities
Purchase of property, plant and equipment and intangible assets 5 (449 ) (397 )
Disposal of property, plant and equipment, intangible assets, and assets held for sale 2 9
Disposal of businesses, net of cash disposed 8 7
Interest received 5 2
Interest element of lease rental receipts 1 1
Principal element of lease rental receipts 3 3
Advance payments on right-of-use assets (7 ) (11 )
Advance receipts on right-of-use assets 2 –
Dividends received from joint ventures and associates 3 1
Net cash flows used in investing activities (432 ) (385 )
Financing activities
Interest paid (5 ) (22 )
Interest element of lease rental payments (124 ) (135 )
Principal element of lease rental payments (329 ) (341 )
Repayment of bank loans – (2 )
Issue of fixed term debt 99 –
Repayment of fixed term debt – (95 )
New shares issued under share schemes 8 5
Purchase of own shares for cancellation (337 ) (157 )
Purchase of own shares for ESOP trust (9 ) (29 )
Ordinary dividends paid to equity shareholders of the Company 12 (246 ) (254 )
Net cash flows used in financing activities (943 ) (1,030 )
Net decrease in cash and cash equivalents and bank overdrafts (555 ) (237 )
Cash and cash equivalents and bank overdrafts at beginning of year 809 1,136
Exchange differences 16 (90 )
Cash and cash equivalents and bank overdrafts at end of year 33 270 809
Consolidated cash flow statement
Year ended 31 January 2023
120 Kingfisher 2022/23 Annual Report and Accounts
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Notes to the consolidated financial statements continued
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£ millions Notes 2022/23
2021/22 restated
(note 6)
Non-current assets
Property, plant and equipment 8 –
Right-of-use assets 4 13 1
Trade and other receivables 6 3,472 3,411
Investment in subsidiary 5 6,833 6,830
Post-employment benefits 10 10 20
Deferred tax assets 6 –
10,342 10,262
Current assets
Trade and other receivables 6 1,295 2,022
Derivative assets 9 2 5
Current tax assets 77 59
Cash and cash equivalents 93 194
1,467 2,280
Total assets 11,809 12,542
Current liabilities
Trade and other payables 7 (6,518) (6,834)
Lease liabilities 4 – (1)
Derivative liabilities 9 – (9)
Provisions – (2)
(6,518) (6,846)
Non-current liabilities
Borrowings 8 (99) –
Lease liabilities 4 (13) –
(112) –
Total liabilities (6,630) (6,846)
Net assets 5,179 5,696
Equity
Share capital 11 305 325
Share premium 2,228 2,228
Own shares held in ESOP trust (22) (46)
Retained earnings 1,886 2,428
Capital redemption reserve 71 50
Other reserves 711 711
Total equity 5,179 5,696
The Company’s loss for the year was £18m (2021/22: loss of £34m).
The classification of trade and other receivables between non-current and current in the comparative balance sheet has been
restated. Refer to note 6.
The financial statements of Kingfisher plc (company number 01664812) were approved by the Board of Directors on 20 March 2023
and signed on its behalf by:
Thierry Garnier
Chief Executive Officer
Bernard Bot
Chief Financial Officer
Company balance sheet
At 31 January 2023
167Kingfisher 2022/23 Annual Report and Accounts
2022/23
£ millions Notes Share capital
Share
premium
Own shares
held
Retained
earnings
Capital
redemption
reserve
Other
reserves
1
Total equity
At 1 February 2022 325 2,228 (46) 2,428 50 711 5,696
Loss for the year – – – (18) – – (18)
Other comprehensive loss for the year – – – (7) – – (7)
Total comprehensive loss for the year – – – (25) – – (25)
Share-based compensation 12 – – – 3 – – 3
Capital contributions given relating to
share-based payments – – – 18 – – 18
New shares issued under share schemes 1 – – 7 – – 8
Own shares issued under share schemes – – 24 (24) – – –
Purchase of own shares for cancellation (21) – – (275) 21 – (275)
Dividends – – – (246) – – (246)
At 31 January 2023 305 2,228 (22) 1,886 71 711 5,179
2021/22
£ millions Notes Share capital
Share
premium
Own shares
held
Retained
earnings
Capital
redemption
reserve
Other
reserves
1
Total equity
At 1 February 2021 332 2,228 (23) 2,924 43 711 6,215
Loss for the year – – – (34) – – (34)
Other comprehensive income for the year – – – – – – –
Total comprehensive loss for the year – – – (34) – – (34)
Share-based compensation 12 – – – 7 – – 7
Capital contributions given relating to
share-based payments – – – 20 – – 20
New shares issued under share schemes – – – 5 – – 5
Own shares issued under share schemes – – 15 (15) – – –
Purchase of own shares for cancellation (7) – – (226) 7 – (226)
Purchase of own shares for ESOP trust – – (38) – – – (38)
Dividends – – – (254) – – (254)
Tax on equity items – – – 1 – – 1
At 31 January 2022 325 2,228 (46) 2,428 50 711 5,696
1. The other reserves represent the premium on the issue of convertible loan stock in 1993 and the merger reserve relating to the acquisition of Darty in 1993.
Company statement of changes in equity
Year ended 31 January 2023
168 Kingfisher 2022/23 Annual Report and Accounts
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— the requirements of paragraphs 10(d), 10(f), 16, 38A, 38B,
38C, 38D, 40A, 40B, 40C, 40D, 111 and 134 to 136 of IAS 1
‘Presentation of Financial Statements’;
— the requirements of IAS 7 ‘Statement of Cash Flows’;
— the requirements of paragraphs 30 and 31 of IAS 8
‘Accounting Policies, Changes in Accounting Estimates
and Error’;
— the requirements of paragraphs 17 and 18A of IAS 24
‘Related Party Disclosures’;
— the requirements in IAS 24 ‘Related Party Disclosures’ to
disclose related party transactions entered into between
two or more members of a group, provided that any
subsidiary which is a party to the transaction is wholly
owned by such a member; and
— the requirements of paragraphs 130(f)(ii), 130(f)(iii), 134(d) to
134(f) and 135(c) to 135(e) of IAS 36 ‘Impairment of Assets’.
Where required, equivalent disclosures are given in
the consolidated financial statements of Kingfisher plc.
The principal accounting policies applied in the preparation of
these financial statements are set out below. These policies
have been consistently applied to the years presented.
Restatement of amounts owed by Group Companies
The Company’s receivables balances with Group Companies
have been reassessed against the classification criteria of
current assets as set out in ‘IAS 1 Presentation of Financial
Statements’. The Company reassessed the amounts owed
by Group Companies classified as current assets based on
timings that the amounts due were expected to be received
and concluded that £3,411m of the amounts owed by Group
companies as at 31 January 2022 should be classified as
non-current assets. Comparatives have therefore been
restated. Please refer to note 6 for further details.
Changes to accounting policies as a result of new
standards issued and effective
Changes to accounting policies as a result of new standards
issued and effective do not have a material impact on the
Company’s financial statements.
a. Foreign currencies
Monetary assets and liabilities denominated in foreign currencies
are translated into Sterling at the rates of exchange at the
balance sheet date. Exchange differences on monetary items
are taken to the income statement.
Principal rates of exchange against Sterling:
2022/23 2021/22
Year end rate Year end rate
Euro 1.13 1.20
US Dollar 1.23 1.34
Polish Zloty 5.34 5.49
The financial statements are presented in Sterling, which is
the Company’s presentation currency and the currency of the
primary economic environment in which the entity operates
(i.e. its functional currency).
1 General information
The Company is a public company limited by shares and
incorporated in England and Wales. The Company is non-trading
and is the ultimate parent of the Kingfisher plc group (‘the Group’).
The nature of the Group’s operations and its principal activities
are set out in the Strategic Report on pages 1 to 61.
The Company is incorporated in England and Wales, United
Kingdom, and is listed on the London Stock Exchange. The
address of its registered office is One Paddington Square,
London W2 1GG. A full list of related undertakings of the
Company and their registered offices is given in note 14.
2 Principal accounting policies
The financial statements of Kingfisher plc (‘the Company’) are
for the year ended 31 January 2023 (‘the year’ or ‘2022/23’)
and were authorised for issue by the Board of Directors on
20 March 2023. The comparative financial year is the year
ended 31 January 2022 (‘the prior year’ or ‘2021/22’).
The directors of Kingfisher plc consider that adequate
resources exist for the Company to continue in operational
existence for the foreseeable future and they continue to adopt
the going concern basis in preparing the financial statements
for the year ended 31 January 2023. Refer to note 2a of
the consolidated financial statements for details of the
Directors’ assessment.
The Company meets the definition of a qualifying entity under
Financial Reporting Standard 100 and as such these financial
statements have been prepared in accordance with Financial
Reporting Standard 101 Reduced Disclosure Framework
(‘FRS 101’) and the provisions of the Companies Act 2006.
The financial statements have been prepared under the
historical cost convention, as modified by the use of valuations
for certain financial instruments, share-based payments and
post-employment benefits.
As permitted by section 408 of the Companies Act 2006, the
income statement of the Company has not been presented.
The Company has taken advantage of the following disclosure
exemptions under FRS 101:
— the requirements of paragraphs 45(b) and 46 to 52 of IFRS 2
‘Share-based Payment’;
— the requirements of IFRS 7 ‘Financial Instruments: Disclosures’;
— the requirements of paragraphs 91 to 99 of IFRS 13 ‘Fair
Value Measurement’;
— the requirement in paragraph 38 of IAS 1 ‘Presentation of
Financial Statements’ to present comparative information
in respect of:
— paragraph 79(a)(iv) of IAS 1;
— paragraph 73(e) of IAS 16 Property, Plant and Equipment;
— paragraph 118(e) of IAS 38 Intangible Assets;
Notes to the Company financial statements
169Kingfisher 2022/23 Annual Report and Accounts
Notes to the Company financial statements continued
d. Employee benefits
(i) Post-employment benefits
The Company operates defined benefit and defined
contribution pension schemes for its employees. A defined
benefit scheme is a pension scheme which defines an amount
of pension benefit which an employee will receive on retirement.
A defined contribution scheme is a pension scheme under which
the Company usually pays fixed contributions into a separate
entity. In all cases a separate fund is being accumulated to meet
the accruing liabilities. The assets of each of these funds
are held under trusts and are entirely separate from the
Company’s assets.
The asset or liability recognised in the balance sheet in respect
of defined benefit pension schemes is the fair value of scheme
assets less the present value of the defined benefit obligation
at the balance sheet date. The defined benefit obligation is
calculated annually by independent actuaries using the projected
unit credit method. The present value of the defined benefit
obligation is determined by discounting the estimated future
cash outflows using interest rates of high quality corporate
bonds which are denominated in the currency in which
the benefits will be paid and which have terms to maturity
approximating to the terms of the related pension liability.
Remeasurement gains and losses arising from experience
adjustments and changes in actuarial assumptions are credited
or charged to other comprehensive income as they arise.
For defined contribution schemes, the Company has no further
payment obligations once the contributions have been paid.
The contributions are recognised as an employee benefit
expense when they are due.
(ii) Share-based compensation
The Company operates several equity-settled, share-based
compensation schemes. The fair value of the employee services
received in exchange for the grant of options or deferred
shares is recognised as an expense and is calculated using
Black-Scholes and stochastic models. The total amount to be
expensed over the vesting period is determined by reference
to the fair value of the options or deferred shares granted,
excluding the impact of any non-market vesting conditions. The
value of the charge is adjusted to reflect expected and actual
levels of options vesting due to non-market vesting conditions.
The fair value of the compensation given to subsidiaries in
respect of share-based compensation schemes is recognised
as a capital contribution over the vesting period. The capital
contribution is reduced by any payments received from
subsidiaries in respect of these schemes.
(iii) Employee Share Ownership Plan trust (‘ESOP trust’)
The ESOP trust is a separately administered discretionary trust.
Liabilities of the ESOP trust are guaranteed by the Company
and the assets of the ESOP trust mainly comprise shares in
the Company.
Own shares held by the ESOP trust are deducted from equity
and the shares are held at historical cost until they are sold. The
assets, liabilities, income and costs of the ESOP trust are included
in both the Company’s and the consolidated financial statements.
b. Leased assets
The Company assesses whether a contract is or contains a
lease at inception of the contract. Typically, lease contracts
relate to properties such as the Company’s Head Office.
For leases in which the Company is a lessee, the Company
recognises a right-of-use asset and a lease liability, except
for short-term leases (defined as leases with a lease term of
12 months or less) and leases of low value assets.
The liability is initially measured at the present value of the lease
payments not yet paid at the commencement date, discounted
at an appropriate discount rate. Where the implicit rate in the
lease is not readily determinable, an incremental borrowing rate
is calculated and applied. The calculation methodology is based
upon applying a financing spread to a risk-free rate, with the
resulting rate including the effect of the creditworthiness of
the Company, as well as the underlying term, currency and
start date of the lease agreement.
Lease payments used in the measurement of the lease
liability principally comprise fixed lease payments (subject to
indexation/rent reviews) less any incentives. The lease liability
is subsequently measured using an effective interest method
whereby the carrying amount of the lease liability is measured
on an amortised cost basis, and the interest expense is allocated
over the lease term. The lease term comprises the non-
cancellable lease term, in addition to optional periods when the
Company is reasonably certain to exercise an option to extend
(or not to terminate) a lease.
The Company remeasures the lease liability and makes a
corresponding adjustment to the related right-of-use asset
whenever an event occurs that changes the term or payment
profile of a lease, such as the renewal of an existing lease, the
exercise of lease term options, market rent reviews and indexation.
The right-of-use assets are initially measured at the amount
equal to the lease liability, adjusted by any upfront lease
payments or incentives and any initial direct costs incurred.
Subsequently, the assets are measured at cost less
accumulated depreciation and impairment losses.
Lessor accounting
Leases for which the Company is a lessor are classified as
finance or operating leases. Whenever the terms of the lease
transfer substantially all the risks and rewards of ownership to
the lessee, the contract is classified as a finance lease. All other
leases are classified as operating leases.
When the Company is an intermediate lessor, it accounts for
the head lease and the sub-lease as two separate contracts.
The sub-lease is classified as a finance or operating lease by
reference to the right-of-use asset arising from the head lease.
Rental income from operating leases is recognised on
a straight-line basis over the term of the relevant lease.
c. Investments
Investments in subsidiaries are included in the balance sheet at
cost, less any provisions for impairment.
170 Kingfisher 2022/23 Annual Report and Accounts
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g. Financial instruments
Financial assets and financial liabilities are recognised on the
Company’s balance sheet when the Company becomes a party
to the contractual provisions of the instrument. Financial assets
are derecognised when the contractual rights to the cash flows
from the financial asset expire or the Company has substantially
transferred the risks and rewards of ownership. Financial
liabilities (or a part of a financial liability) are derecognised
when the obligation specified in the contract is discharged
or cancelled or expires.
Financial assets and liabilities are offset only when the Group
has a currently enforceable legal right to set-off the respective
recognised amounts and intends either to settle on a net basis,
or to realise the asset and settle the liability simultaneously.
The Company has a number of term loans with its group entities.
These loans are denominated in Sterling and Euro and are priced
to SONIA and ESTR respectively.
(i) Cash and cash equivalents
Cash and cash equivalents include cash in hand, deposits held on
call with banks and other short-term highly liquid investments
with original maturities of three months or less.
(ii) Borrowings
Interest bearing borrowings are recorded at fair value (which
is typically equivalent to the proceeds received) net of direct
issue costs and subsequently measured at amortised cost.
Where borrowings are in designated and effective fair value
hedge relationships, adjustments are made to their carrying
amounts to reflect the hedged risks. Finance charges, including
premiums payable on settlement or redemption and direct issue
costs, are amortised to the income statement using the
effective interest method.
(iii) Trade receivables
Trade receivables are initially recognised at their transaction
price and are subsequently measured at amortised cost less
any allowance for expected credit losses. Amounts owed by
Group companies are recorded as non-current unless there
is an expectation that they will be received within 12 months.
(iv) Trade payables
Trade payables are initially recognised at fair value and are
subsequently measured at amortised cost.
(v) Derivatives and hedge accounting
Where hedge accounting is not applied, or to the extent to which
it is not effective, changes in the fair value of derivatives are
recognised in the income statement as they arise.
Derivatives are initially recorded at fair value on the date a
derivative contract is entered into and are subsequently carried
at fair value. The accounting treatment of derivatives and other
financial instruments classified as hedges depends on their
designation, which occurs at the start of the hedge relationship.
The Company designates certain derivatives as a hedge of the
fair value of an asset or liability (‘fair value hedge’).
e. Taxation
The tax currently payable or receivable is based on taxable
profit or loss for the year.
Taxable profit differs from profit before taxation as reported in
the income statement because it excludes items of income or
expense which are taxable or deductible in other years or
which are never taxable or deductible.
Deferred tax is the tax expected to be payable or recoverable
on differences between the carrying amounts of assets and
liabilities in the financial statements and the corresponding
tax bases used in the computation of taxable profit and is
accounted for using the balance sheet liability method.
Deferred tax liabilities are generally recognised for all taxable
temporary differences. Deferred tax assets are recognised to
the extent that it is probable that taxable profits will be available
against which deductible temporary differences or unused tax
losses can be utilised. Deferred tax assets and liabilities are not
generally recognised if the temporary difference arises from
the initial recognition (other than in a business combination) of
other assets and liabilities in a transaction which affects neither
the taxable profit nor the accounting profit. Deferred tax
liabilities are recognised for taxable temporary differences
arising on investments in subsidiaries, joint ventures and
associates, except where the Company is able to control the
reversal of the temporary difference and it is probable that the
temporary difference will not reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at each
balance sheet date and reduced to the extent that it is no longer
probable that sufficient taxable profits will be available to allow
all or part of the asset to be recovered.
Current and deferred tax are calculated using tax rates which
have been enacted or substantively enacted by the balance
sheet date and are expected to apply in the period when the
liability is settled or the asset is realised.
Current and deferred tax are charged or credited to the
income statement, except when they relate to items charged
or credited directly to equity, in which case the current or
deferred tax is also recognised directly in equity.
f. Provisions
Provisions are recognised when the Company has a present
legal or constructive obligation as a result of past events, it is
more likely than not that an outflow of resources will be required
to settle the obligation and the amount can be reliably estimated.
Provisions are not recognised for future operating losses.
A provision is recorded if the unavoidable costs of meeting
the obligations under a contract exceed the economic benefits
expected to be received under it. The unavoidable costs reflect
the net cost of exiting the contract.
If the effect of the time value of money is material, provisions
are determined by discounting the expected future cash flows
at a pre-tax rate which reflects current market assessments
of the time value of money and, where appropriate, the risks
specific to the liability.
171Kingfisher 2022/23 Annual Report and Accounts
Notes to the Company financial statements continued
i. Share repurchases
Shares purchased for cancellation are deducted from retained
earnings. The Group uses irrevocable closed period buyback
programmes. A liability to purchase shares is recognised at
inception of the programme with any subsequent reduction in the
obligation credited back to retained earnings at the end of the
programme. Share capital is reduced and credited to the capital
redemption reserve, maintaining non-distributable reserves.
Critical accounting judgements and key sources of
estimation uncertainty
The preparation of the Company financial statements requires
the Company to make estimates and assumptions that affect
the application of policies and reported amounts. Estimates
and judgements are continually evaluated and are based on
historical experience and other factors including expectations
of future events that are believed to be reasonable under the
circumstances. Actual results may differ from these estimates.
There have been no critical accounting judgements made by the
Directors or key sources of estimation uncertainty identified
during the year.
For an effective hedge of an exposure to changes in fair value,
the hedged item is adjusted for changes in fair value attributable
to the risk being hedged with the corresponding entry being
recorded in the income statement.
In order to qualify for hedge accounting, the Company
documents in advance the risk management objective
and strategy for undertaking the hedge and the relationship
between the item being hedged and the hedging instrument.
The Company also documents and demonstrates an assessment
of the relationship between the hedged item and the hedging
instrument, which shows that the hedge will be highly effective
on an ongoing basis and provides an analysis of the sources of
hedge ineffectiveness. The effectiveness testing is performed
at half year and year end or upon a significant change in
circumstances affecting the hedge effectiveness requirements.
Hedge accounting is discontinued when the hedging instrument
expires or is sold, terminated or exercised, or no longer qualifies
for hedge accounting. The fair value adjustment to the carrying
amount of the hedged item arising from the hedged risk is
amortised to profit or loss from that date. Amortisation is
based on recalculated effective interest rate.
The company does not have any cash flow hedging instruments.
h. Dividends
Interim dividends are recognised when they are paid to the
Company’s shareholders. Final dividends are recognised
when they are approved by the Company’s shareholders.
172 Kingfisher 2022/23 Annual Report and Accounts
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3 Income statement disclosures
The audit fee for the Company and the consolidated financial statements is disclosed in note 8 of the Kingfisher plc consolidated
financial statements. Fees payable to Deloitte LLP and their associates for audit and non-audit services to the Company are not
required to be disclosed because the Group financial statements disclose such fees on a consolidated basis. Details of the Company’s
policy on the use of auditors for non-audit services, the reasons why the auditor was used rather than another supplier and how the
auditor’s independence and objectivity were safeguarded are set out in the Audit Committee Report on pages 73 to 76.
Dividend disclosures are provided in note 12 to the Kingfisher plc consolidated financial statements.
£ millions 2022/23 2021/22
Wages and salaries 26 29
Social security costs 4 6
Post-employment benefits – defined contribution 2 2
Share-based compensation 3 7
Employee benefit expenses 35 44
Number 2022/23 2021/22
Average number of persons employed
Administration 263 243
Directors’ remuneration and details of share option exercises are disclosed in the Directors’ Remuneration Report on pages 77 to
100. Total Directors’ remuneration for the year is £4m (2021/22: £3m).
As permitted by s408 of Companies Act 2006, no separate income statement or statement of comprehensive income is presented
in respect of the parent Company. The profit attributable to the Company is disclosed in the footnote to the Company’s balance sheet.
4 Leases
The Company is a lessee of office space.
Right-of-use assets
£ millions 2022/23 2021/22
Land and buildings 13 1
Net carrying amount 13 1
Additions to right-of-use assets during the year were £13m (2021/22: £nil).
Amounts included in profit and loss
£ millions 2022/23 2021/22
Depreciation of right-of-use assets
Land and buildings (1) (2)
Other lease disclosures
Lease arrangements under which rental payments are contingent upon sales, other performance or usage are not significant for
the Company.
There are no corporate restrictions imposed by lease arrangements such as those concerning dividends, additional debt and
further leasing.
Lease liabilities
£ millions 2022/23 2021/22
Current – (1)
Non-current (13) –
(13) (1)
173
Kingfisher 2022/23 Annual Report and Accounts
Notes to the Company financial statements continued
5 Investments
£ millions
Investment in
subsidiary
At 1 February 2022 6,830
Capital contributions given relating to share-based payments 18
Contributions received relating to share-based payments (15)
At 31 January 2023 6,833
The more significant subsidiary undertakings of the Company at 31 January 2023 and the ultimate percentage holding are set out
below. For a full list of subsidiaries and related undertakings, see note 14.
Company name
Country of
incorporation and
operation
% interest held
and voting rights Class of share held Main activity
B&Q Limited United Kingdom 100% Ordinary & Special
1
Retailing
B&Q Properties Limited United Kingdom 100% Ordinary Property investment
Halcyon Finance Limited United Kingdom 100% Ordinary Financing
Kingfisher Digital Limited United Kingdom 100% Ordinary Digital services
Kingfisher Holdings Limited United Kingdom 100% Ordinary Holding company
Kingfisher International Products Limited United Kingdom 100% Ordinary Sourcing
Kingfisher Information Technology Services (UK) Limited United Kingdom 100% Ordinary IT services
Screwfix Direct Limited United Kingdom 100% Ordinary Retailing
Sheldon Holdings Limited United Kingdom 100% Ordinary Holding company
Zeus Land Investments Limited United Kingdom 100% Ordinary Financing
B&Q Ireland Limited Ireland 100% Ordinary Retailing
Brico Dépôt S.A.S France 100% Ordinary Retailing
Castorama France S.A.S France 100% Ordinary Retailing
Euro Dépôt Immobilier S.A.S France 100% Ordinary Property investment
Kingfisher Investissements S.A.S France 100% Ordinary Holding company
L’Immobiliere Castorama S.A.S France 100% Ordinary Property investment
SCREWFIX S.A.S France 100% Ordinary Retailing
We Share Trust S.A.S France 100% Ordinary Services marketplace
Kingfisher Asia Limited Hong Kong 100% Ordinary Sourcing
Castim Sp z o.o. Poland 100% Ordinary Property investment
Castorama Polska Sp. z o.o. Poland 100% Ordinary Retailing
Brico Depot Portugal, S.A. Portugal 100% Ordinary Retailing
Bricostore Romania S.A. Romania 100% Ordinary Retailing
Euro Depot España SAU Spain 100% Ordinary Retailing
1. The special shares in B&Q Limited are owned 100% by Kingfisher plc and are non-voting.
At each reporting date an assessment is performed as to whether there are any indicators that the Company’s investments may be
impaired and, should such indicators exist, the recoverable amounts are estimated. At the balance sheet date, the Company’s market
capitalisation was less than the carrying amount of its investments which is an indicator of impairment.
Impairment reviews have been performed for the Company’s investments with no resulting impairments. The Board has reviewed a
sensitivity analysis and does not consider that a reasonably possible change in the assumptions used in the value-in-use calculations
would cause the carrying amount of the Company’s investments to exceed their recoverable amounts. See note 13 to the
consolidated financial statements for further details on the assumptions used.
174 Kingfisher 2022/23 Annual Report and Accounts
Strategic Report Governance Financial Statements
6 Trade and other receivables
£ millions 2022/23
2021/22
restated
Non-current
Owed by Group Companies 3,472 3,411
3,472 3,411
Current
Owed by Group undertakings 1,295 2,022
1,295 2,022
Trade and other receivables 4,767 5,433
Following a reassessment of when certain amounts owed by group undertakings are expected to be realised, the Company has
determined that it did not intend to require settlement for certain amounts within 12 months of the balance sheet date. The
comparatives have been restated, reclassifying £3,411m to non-current.
Amounts owed by Group undertakings are repayable on demand and any interest due thereon is at current market rates. The
amounts owed are not secured with collateral or guarantees. The Company has intercompany term loan receivables from other
Group undertakings of £307m (2021/22: £304m) and £983m (2021/22: £1,817m). Both intercompany loans mature on 30 April 2025
and are priced to 3.24% interest. The prior year loans matured on 21 January 2022 and were rolled over for a further three months
and repriced to SONIA plus margin before being settled.
Amounts owed by subsidiary undertakings have been considered for impairment using the 12 months expected credit loss model
because there have been no changes in credit risk since initial recognition. The expected credit losses on amounts owed by Group
companies is nil (2021/22: nil).
7 Trade and other payables
£ millions 2022/23 2021/22
Current
Owed to Group undertakings 6,484 6,716
Other taxation and social security 5 5
Contract to purchase own shares for cancellation 7 69
Liability to purchase own shares for ESOP trust – 9
Accruals and other payables 22 35
6,518 6,834
Amounts owed to Group undertakings are repayable on demand and any interest due thereon is at current market rates. The amounts
owed are not secured with collateral or guarantees.
8 Borrowings
£ millions 2022/23 2021/22
Non-current
Fixed term debt 99 –
99 –
The fixed term debt represents two GBP term loans maturing in December 2024 and January 2025.
See notes 23 and 33 to the consolidated financial statements for further details.
175Kingfisher 2022/23 Annual Report and Accounts
Notes to the Company financial statements continued
9 Derivatives
The fair value of derivatives at the balance sheet date is:
£ millions 2022/23 2021/22
Foreign exchange contracts 2 5
Derivative assets 2 5
Foreign exchange contracts – (9)
Derivative liabilities – (9)
The fair values are calculated by discounting future cash flows arising from the instruments and adjusted for credit risk. These fair
value measurements are all made using observable market rates of interest, foreign exchange and credit risk.
10 Post-employment benefits
The Company participates in both a funded defined benefit scheme and a funded defined contribution scheme.
Defined contribution scheme
Pension costs for the defined contribution scheme, at rates specified in the scheme’s rules, are as follows:
£ millions 2022/23 2021/22
Charge to operating profit 2 2
From July 2012, an enhanced defined contribution scheme was offered to all Company employees. Eligible Company employees
have been automatically enrolled into the defined contribution scheme since 31 March 2013.
Defined benefit scheme
Kingfisher plc is one of a number of Group companies that participate in the Kingfisher Pension Scheme, and therefore the Company
has accounted for its share of the scheme assets and liabilities. The Group’s policy is for each entity to recognise its share of assets
and liabilities based on the proportion of the scheme contributions payable by that entity. The valuation of the scheme has been
based on the most recent actuarial valuation as at 31 March 2022. Following this valuation and in accordance with the scheme’s
Statement of Funding Principles, the Trustee and Kingfisher have agreed to cease annual employer contributions during the
period from August 2022 to July 2025. See note 28 to the consolidated financial statements for further detail on the Kingfisher
Pension Scheme.
The final salary pension scheme was closed to future benefit accrual with effect from July 2012.
The Trust Deed provides Kingfisher with an unconditional right to a refund of surplus assets assuming the full settlement of plan
liabilities in the event of a plan wind-up. Furthermore, in the ordinary course of business the Trustee has no rights to unilaterally
wind up, or otherwise augment the benefits due to members of, the scheme. Based on these rights, any net surplus in the scheme
is recognised in full.
In 2010/11 and 2011/12 the Company entered into two phases of a property partnership arrangement with the scheme Trustee to
address an element of the scheme deficit. Further details on this arrangement are given in note 28 to the consolidated financial
statements. The reported pension position reflects the Company’s share of the resulting scheme asset.
176 Kingfisher 2022/23 Annual Report and Accounts
Strategic Report Governance Financial Statements
Balance sheet
Movements in the present value of the defined benefit obligation and the fair value of scheme assets are as follows:
£ millions
Defined benefit
obligation
Scheme
assets Total
At 1 February 2022 (86) 106 20
Interest (expense)/income (2) 3 1
Remeasurement gains/(losses)
1
27 (38) (11)
Benefits paid 3 (3) –
At 31 January 2023 (58) 68 10
At 1 February 2021 (91) 110 19
Interest (expense)/income (1) 1 –
Remeasurement gains/(losses)
1
2 (2) –
Contributions paid by employer – 1 1
Benefits paid 4 (4) –
At 31 January 2022 (86) 106 20
1. Remeasurement gains/(losses) are recognised in Other Comprehensive Income (net of related deferred tax).
The fair value of scheme assets is analysed as follows:
£ millions 2022/23 2021/22
Equities 1 3
Government and corporate bonds 32 52
Annuities 25 35
Cash and other 10 16
Total fair value of scheme assets 68 106
11 Called up share capital
Number of
ordinary
shares
millions
Ordinary
share
capital
£ millions
Allotted, called up and fully paid:
At 1 February 2022 2,066 325
New shares issued under share schemes 5 1
Purchase of own shares for cancellation (131) (21)
At 31 January 2023 1,940 305
At 1 February 2021 2,111 332
New shares issued under share schemes 2 –
Purchase of own shares for cancellation (47) (7)
At 31 January 2022 2,066 325
Ordinary shares have a par value of 15
5/7
pence per share and carry full voting, dividend and capital distribution rights.
During the year the Company purchased 131 million of the Company’s own shares for cancellation at a cost of £337m as part of its
capital returns programme.
177Kingfisher 2022/23 Annual Report and Accounts
Notes to the Company financial statements continued
12 Share-based payments
The Company operates a number of share incentive plans including the Performance Share Plan (‘PSP’), Kingfisher Alignment Share
and Transformation Incentive Plan (‘KASTIP’), Kingfisher Incentive Share Plan (‘KISP’), Sharesave plans in the UK and Ireland, and the
‘1+1’ all-colleague share plan across each of our territories.
Options have been exercised on a regular basis throughout the year. On that basis, the weighted average share price during the year,
rather than at the date of exercise, is £2.53 (2021/22: £3.38). The options outstanding at the end of the year have exercise prices
ranging from nil to £2.75 and a weighted average remaining contractual life of 6.6 years (2021/22: 6.9 years).
In the current year the Company recognised a total expense of £3m (2021/22: £7m) relating to equity-settled share-based
payment transactions.
The Executive Directors’ awards are disclosed in the Directors’ Remuneration Report on pages 77 to 100. The KASTIP awards are
described as part of the Directors’ Remuneration Report.
PSP awards are based on service and performance conditions over a three-year period. The KASTIP was granted based on a
three-year service condition. Under the KISP, share awards are deferred for three years. The awards are granted as nil cost options.
Vesting dates may vary according to individual grants.
Under the UK Sharesave scheme, eligible UK employees have been invited to enter into HMRC-approved savings contracts for
a period of three or five years, whereby shares may be acquired with savings under the contract. The option price is the average
market price over three days shortly before the invitation to subscribe, discounted by 20%. Options are exercisable within a six-
month period from the conclusion of a three- or five-year period. The Irish Sharesave plan, which operates along similar lines to
the UK Sharesave scheme, includes eligible employees in the Republic of Ireland.
The 1+1 share plan provided all our colleagues with the opportunity to purchase shares up to a specified maximum total contribution.
Following a holding period of one year, Kingfisher matched each participant’s investment (awarding one free share for every share
bought) up to the specified maximum.
The rules of all schemes include provision for the early exercise of options in certain circumstances.
The Employee Share Ownership Plan trust (‘ESOP trust’)
The ESOP trust is funded by an interest free loan from the Company of £81m (2021/22: £98m) to enable it to acquire shares in
Kingfisher plc. The shares are used to satisfy options awarded under the PSP, Delivering Value Incentive award, Transformation
Incentive Award, Alignment Share award, KISP, and 1+1 share plan.
The ESOP trust’s shareholding at 31 January 2023 is 7 million shares (2021/22: 14 million shares) with a nominal value of £1m (2021/22:
£2m) and a market value of £19m (2021/22: £46m). Dividends on these shares were waived for the interim and final dividends.
13 Related party transactions
During the year, the Company carried out a number of transactions with related parties in the normal course of business and on an
arm’s length basis. The names of the related parties, the nature of these transactions and their total value are shown below:
2022/23 2021/22
£ millions Income Receivable Income Receivable
Transactions with Koçtaş Yapi Marketleri Ticaret A.S. in which the Kingfisher plc
Group holds a 50% interest
Commission and other income 0.3 – 0.2 –
Transactions with the Kingfisher Pension Scheme
Provision of administrative services 0.9 0.2 0.8 0.3
Services are usually negotiated with related parties on a cost-plus basis. Goods are sold or bought on the basis of the price lists in
force with non-related parties. Directors’ remuneration and details of share option exercises are disclosed in the Directors’
Remuneration Report on pages 77 to 100. Other transactions with the Kingfisher Pension Scheme are detailed in note 10.
178 Kingfisher 2022/23 Annual Report and Accounts
Strategic Report Governance Financial Statements
14 Related undertakings of the Group
In accordance with Section 409 of the Companies Act 2006, a full list of related undertakings, the address of their registered
office and their country of incorporation as at 31 January 2023 is shown below. Changes to the list of related undertakings since the
year-end date are detailed in the footnotes below. All undertakings are indirectly owned by the Company unless otherwise stated.
Wholly owned Subsidiary undertakings
All subsidiary undertakings, unless otherwise noted, are consolidated in the Group’s financial statements, have only one class of share
in issue (being ordinary shares), and have all their shares held by companies within the Group other than the Company (Kingfisher plc).
The undertakings denoted with an asterisk (*) will take advantage of the audit exemption set out within Section 479A of the Companies
Act 2006 for the year ended 31 January 2023.
ADSR-Real Estate S.A.S.
1
Eijsvogel Finance Limited
e, 2
Kingfisher Marketplaces Limited
e, 2
Alcedo Finance Limited
e, 2,
* Electricfix Limited
8,
* Kingfisher Pension Trustee Limited
e, 2,
*
B&Q (Retail) Guernsey Limited
3
Euro Depot España SAU
14
Kingfisher Properties Investments Limited
e, 2
B&Q (Retail) Jersey Limited
4
Euro Dépôt Immobilier S.A.S.
10
Kingfisher Sourcing, Eastern Europe, Sp. z o.o.
12
B&Q Ireland Limited
6
Geared Up Limited
8,
* Kingfisher TMB Limited
5
B&Q Limited
a, 5
Good Home Products Limited
e, 2,
* KSO Istanbul Sourcing Ev Geliştirme Ürünleri
ve Hizmetleri Ltd Sti
21
B&Q Properties Chesterfield Limited
5
Halcyon Finance Limited
e, 2
L’Immobiliere Castorama S.A.S.
13
B&Q Properties Chestnut Retail Park Limited
5
Horizons 1000 S.A.S
10
Martin Pecheur Holdings Limited
22
B&Q Properties Farnborough Limited
5,
* KFL8 S.A.S.
1
MELANI 1 Sp. z o.o
12
B&Q Properties Investments Limited
7
KFS Sp. z o.o.
15
New England Paint Company Limited
2
B&Q Properties Limited
5
Kingfisher (Shanghai) Sourcing Consultancy
Co. Ltd
16
Owl Development Sp. z.o.o
12
B&Q Properties New Malden Limited
5
Kingfisher Asia Limited
17
Paddington Investment Ireland Limited
22
B&Q Properties Nursling Limited
5
Kingfisher Développement S.A.S.
1
Plumbfix Limited
8,
*
B&Q Properties South Shields Limited
5
Kingfisher Digital Limited
e, f, 2
Screwfix Direct (Ireland) Limited
6
B&Q Properties Sutton-in-Ashfield Limited
5,
* Kingfisher France Limited
e, 2
Screwfix Direct Limited d,
8
B&Q Properties Swindon Limited
5
Kingfisher Group Finance B.V.
18
Screwfix Limited
8,
*
B&Q Properties Witney Limited
5,
* Kingfisher Group Limited
e, 2
SCREWFIX S.A.S.
1
B&Q Properties Wrexham Limited
5
Kingfisher Holdings Limited
e, b, 2
SFD Limited
8,
*
Bargain Bob’s Limited
8,
* Kingfisher Information Technology Services
(France) S.A.S.
1
Sheldon Euro Investments Limited
e, 2
Brico Depot Portugal, S.A.
9
Kingfisher Information Technology Services
(UK) Limited
e, 2
Sheldon Holdings Limited
e, 2
Brico Dépôt S.A.S.
10
Kingfisher Insurance Designated Activity
Company
19
Sheldon Poland Investments Limited
e, 2
Bricostore Romania S.A.
11
Kingfisher International Holdings Limited
e, 2
Société Letranne S.A.S
10
Castim Sp z o.o.
12
Kingfisher International Products B.V.
18
SOCODI S.A.R.L.
1
Castorama Polska Sp. z o.o
12
Kingfisher International Products France S.A.S.
1
Street Club Limited
f, 5,
*
Castorama France S.A.S
13
Kingfisher International Products Limited
e, 2
Trade Point Limited
5,
*
Dickens Limited
5,
* Kingfisher Investissements S.A.S
13
Zeus Land Investments Limited
e, 2
Related undertakings other than wholly owned subsidiaries
The undertakings denoted with an asterisk (**) are charitable entities/partnerships and do not have a share capital.
B&Q Foundation
5,
** Kingfisher Services S.A.S (France, 80%)
1
CREALFI S.A.S (France, 49%)
23
Kingfisher Scottish Limited Partnership c,
20
Fondation de France
27,
** Koçtas Yapi Marketleri Ticaret A.S. (Turkey, 49.77%)
24
Fondation Castorama
27,
** We Share Trust (Suisse) S.A.R.L (Suisse, immediate parent undertaking 100%, Group undertaking 80%)
Fondation Brico Dépôt
27,
** The Screwfix Foundation
8,
**
Fundacja Castorama
12,
** We Share Trust S.A.S (France, immediate parent undertaking 94.08%, Group undertaking 75.26%)
26
Fundación Brico Depôt Iberia
14,
** We Share Trust Limited (UK, immediate parent undertaking 100%, Group undertaking 80%)
e, 2,
*
179
Kingfisher 2022/23 Annual Report and Accounts
14 Related undertakings of the Group continued
a. Kingfisher plc holds 1,000 Special Shares of £0.05 each, and 1,000 Special A Shares of £0.05 each – both representing 100% of
the nominal value of each class of share.
b. The shares are held directly by Kingfisher plc.
c. Kingfisher Properties Investments Limited and Kingfisher Pension Trustee Limited are the limited partners; B&Q Properties
Investments Limited is the general partner.
d. Kingfisher International Holdings Limited holds 4,083 Ordinary A shares of £1 each, 45,917 Ordinary C shares of £1 each and
4,591,700 Ordinary D Shares of £0.0001 each – each representing 100% of the nominal value of each class of share. These
represent 100% of the total issued share capital.
e. On 13 March 2023, the Registered Office changed to 1 Paddington Square, London W2 1GG.
f. Entities in process of strike off.
Registered offices and country of incorporation:
1. Parc d’Activités, Zone Industrielle, Templemars, 59175, France
2. 1 Paddington Square, London, W2 1GG, United Kingdom
3. Dorey Court, Admiral Park, St Peters Port, GY1 3BQ, Guernsey
4. Gaspe House, 66-72 Esplanade, St. Helier, Jersey, JE2 3QT, Jersey
5. B&Q House, Chestnut Avenue, Chandlers Ford, Eastleigh, Hampshire, SO53 3LE, United Kingdom
6. 6th Floor, 2 Grand Canal Square, Dublin 2, D02 A342, Ireland
7. 124-125 Princess Street, Edinburgh, EH2 4AD, Scotland, United Kingdom
8. Trade House, Mead Avenue, Houndstone Business Park, Yeovil, BA22 8RT, United Kingdom
9. Rua Elias García,Estrada Nacional 294, km 14, Freguesia de Rio de Mouro, Concelho de Sintra, Lisboa, Portugal
10. 30-32 Rue de la Tourelle, 91310 Longpont-sur-Orge, France
11. 1-3 Calea Giulesti, 2nd Floor, Bricostore Commercial Centre, District 6, Bucharest, Romania
12. ul. Krakowiaków 78, 02-255, Warszawa, Poland
13. Zone Industrielle, 59175 Templemars, France
14. C/la Selva, 10 Inblau Edificio A 1a, Barcelona, 08820 El Prat de Llobregat, Spain
15. ul. Wielicka 28, 30-552, Krakow, Poland
16. B&Q China, 4th Floor, B&Q Pudong Commercial Building, No. 393 Yin Xiao Road, Pudong New Area, Shanghai, 201204, China
17. 2/F, Koho, 73 – 75 Hung To Road, Kwun Tong, Hong Kong
18. Rapenburgerstraat 175, E, 1011 VM, Amsterdam, Netherlands
19. Willis Towers Watson House, Elm Park, Merrion Road, Dublin 4, Ireland
20. c/0 Womble Bond Dickinson (UK) LLP, 2 Semple Street, Edinburgh, EH3 8BL, Scotland
21. Barbaros Mahallesi Mor Sümbül Sokak, Nidakule Blok No: 7/3, İçkapı no: 127, Ataşehir/İstanbul, Turkey
22. 1st – 2nd Floors, 1-2 Victoria Buildings, Haddington Road, Dublin 4, D04 XN32, Ireland
23. 1 rue Victor Basch, CS 70001, MASSY CEDEX, 91068, France
24. Tasdelen Mahallesi Sirri Celik Bulvari Oto Koc Blok No:9 Cekmekoy, Istanbul, Turkey
25. Rue Saint-Léger, 19, c/o FIDUCIOR SA, Genève, 1204, Switzerland
26. 46, rue Saint-Lazare, Paris, 75009, France
27. 40 Avenue Hoche, Paris, 75008, France
15 Post balance sheet events
During the period since the balance sheet date, the Group purchased 1 million of the Company’s own shares for cancellation at a cost
of £3m. This amount was deducted from equity in 2022/23 as a result of an irrevocable closed season buyback agreement which was
in place at 31 January 2023.
Notes to the Company financial statements continued
180 Kingfisher 2022/23 Annual Report and Accounts
Strategic Report Governance Financial Statements
Group five year financial summary
£ millions 2018/19 2019/20 2020/21 2021/22 2022/23
Income statement
Sales 11,685 11,513 12,343 13,183 13,059
Retail profit 824 786 1,003 1,148 923
Central costs (69) (62) (54) (60) (49)
Share of interest and tax of joint ventures and associates before
adjusting items (5) (7) (3) (2) (4)
Net finance costs before adjusting items (176) (173) (160) (137) (112)
Adjusted pre-tax profit 574 544 786 949 758
Adjusting items (before tax) (274) (441) (30) 58 (147)
Profit before taxation 300 103 756 1,007 611
Income tax expense (including adjusting items) (107) (95) (164) (164) (140)
Profit for the year 193 8 592 843 471
Balance sheet
Goodwill and other intangible assets 2,807 2,755 2,747 2,754 2,779
Property, plant and equipment and investment property 3,310 2,996 3,095 3,111 3,235
Right-of-use assets 2,017 1,916 1,845 1,885 1,947
Investments in joint ventures and associates 15 16 20 17 30
Assets and liabilities (excluding net debt) held for sale 89 138 12 6 3
Other net current assets
1
429 424 105 367 931
Post-employment benefits 205 277 359 410 137
Other net non-current liabilities
1
(181) (194) (218) (200) (125)
Capital employed 8,691 8,328 7,965 8,350 8,937
Equity shareholders’ funds 6,149 5,802 6,571 6,778 6,663
Net debt 2,542 2,526 1,394 1,572 2,274
Capital employed 8,691 8,328 7,965 8,350 8,937
Other financial data
Like-for-like sales growth (1.6)% (1.5)% 7.1% 9.9% (2.1)%
Adjusted effective tax rate 27% 26% 23% 22% 22%
Basic earnings per share (pence) 9.1 0.4 28.1 40.3 23.8
Adjusted basic earnings per share (pence) 19.8 19.1 28.7 35.2 29.7
Ordinary dividend per share (pence) 10.82 3.33 8.25 12.40 12.40
Gross capital expenditure
2
331 342 281 397 449
Number of stores
3
1,331 1,367 1,386 1,474 1,572
1. Other net current assets and other net non-current liabilities reported above exclude any components of net debt.
2. Excluding business acquisitions.
3. Excluding joint ventures and associates.
181Kingfisher 2022/23 Annual Report and Accounts
Shareholder information
Financial calendar
Q1 results* 24 May 2023
Annual General Meeting 27 June 2023
Half-year results* 19 September 2023
Q3 results* 22 November 2023
* These dates are provisional and may be subject to change.
Annual General Meeting (AGM)
We consider the AGM to be an important event in our calendar
and a significant opportunity to engage with our shareholders.
The 2023 AGM will be held at Storey Club, 4 Kingdom Street,
London W2 6BD on Tuesday 27 June 2023 at 2pm.
Details of how to participate at the AGM are set out in the
Notice of AGM and on our website.
Company Secretary
Chloe Barry
Registered office
Kingfisher plc
1 Paddington Square,
London, W2 1GG
Telephone: +44 (0) 20 7372 8008
Website: www.kingfisher.com
Registered in England and Wales
Registered Number 01664812
Registrars
Computershare Investor Services PLC
The Pavilions
Bridgwater Road
Bristol
BS99 6ZZ
Telephone: +44 (0) 370 702 0129
Shareholders can also visit our online Investor Centre,
www.investorcentre.co.uk
Dividends
The company pays all cash dividends through direct payment
to shareholder bank accounts. Shareholders who have not yet
notified our Registrar of their preferred bank account details
should do so without delay. This does not affect those
shareholders who have subscribed for the Dividend
Reinvestment Plan.
The interim dividend for the financial year ended 31 January 2023
of 3.80 pence per ordinary share was paid on 11 November 2022.
The table below provides the payment information for the final
dividend of 8.60 pence per ordinary share, subject to
shareholder approval at the 2023 AGM.
Ex-dividend date 25 May 2023
Record date 26 May 2023
Final date for return of DRIP mandate forms/
currency elections
12 June 2023
Euro exchange rate notification 13 June 2023
Payment date and DRIP purchase 3 July 2023
American Depositary Receipts (ADR)
The company has a Sponsored Level 1 ADR programme in the
US, which trades on the OTCQX Platform.
Each ADR represents two Kingfisher plc ordinary shares. The
company’s ADR programme is administered by Citibank, N.A.
ADR investor contact
Telephone: +1 877 248 4237
Email: citibank@shareholders-online.com
ADR broker contact
Telephone: +1 212 723 5435/+44 (0) 20 7500 2030
Email: michael.oleary@citi.com/michael.woods@citi.com
182 Kingfisher 2022/23 Annual Report and Accounts
Strategic Report Governance Financial Statements
Share dealing facilities
Shareholders wishing to sell or purchase shares in the company
may do so through a bank or a stockbroker. Alternatively, please
go to www.computershare.com/dealing/uk for a range of
Dealing services made available by Computershare.
ShareGift
If you would like to consider donating your shareholding to
the charity ShareGift (Registered charity 1052686), further
information may be obtained by calling 020 7930 3737 or
from www.ShareGift.org
Shareholder security
Details of any share dealing facilities that the company endorses
will be included in company mailings only. If you receive any
unsolicited investment advice, whether over the telephone,
through the post or by email, you should:
— Make sure you get the name of the person and organisation;
— Check that they are properly authorised by the FCA before
getting involved by visiting register.fca.org.uk/s/; and
— Report the matter to the FCA either by calling 0800 111 6768
or by completing an online form at www.fca.org.uk/
consumers/report-scam-us.
More detailed information on this or similar activity can be found
on the FCA website www.fca.org.uk/scamsmart
Share price information
The company’s ordinary shares are listed on the London Stock
Exchange. Share price history and the latest share price are
available on the company’s website.
Electronic communications
Shareholders who have not yet elected to receive
shareholder documentation in electronic form can sign up
by visiting www.investorcentre.co.uk/ecomms and registering
their details.
Forward-looking statements
All statements in this Annual Report and Accounts, other than
historical facts, may be forward-looking statements (including
within the meaning of the safe harbour provisions of the United
States Private Securities Litigation Reform Act of 1995). Such
statements are therefore subject to inherent risks, assumptions
and uncertainties that could cause actual results to differ
materially from those expressed or implied, because they
relate to future events.
Forward-looking statements can be identified by the use of
relevant terminology including the words: ‘believes’, ‘estimates’,
‘anticipates’, ‘expects’, ‘intends’, ‘plans’, ‘goal’, ‘target’, ‘aim’, ‘may’,
‘will’, ‘would’, ‘could’, ‘should’, ‘project’, ‘continue’ or ‘forecast’, in
each case, their negative or other variations or comparable
terminology and include all matters that are not historical facts.
These forward-looking statements are based on currently
available information and our current assumptions,
expectations and projections about future events.
These forward-looking statements appear in a number of
places throughout this Annual Report and Accounts and include
statements which look forward in time or statements regarding
our intentions, beliefs or current expectations and those of our
officers, directors and employees concerning, among other
things, our results of operations, financial condition, changes
in tax rates, liquidity, prospects, growth strategies and the
businesses we operate.
Other factors that could cause actual results to differ materially
from those estimated by the forward-looking statements include,
but are not limited to, global economic business conditions, global
and regional trade conditions (including a downturn in the retail or
financial services industries), the state of the housing and home
improvement markets, share repurchases and dividends, capital
expenditure and capital allocation, liquidity, prospects, growth
and strategies, litigation or other proceedings to which we are
subject, monetary and interest rate policies, foreign currency
exchange rates, equity and property prices, the impact of
competition, inflation and deflation, changes to regulations, taxes
and legislation, changes to consumer saving and spending habits,
acts of war or terrorism worldwide, work stoppages, slowdowns
or strikes, public health crises (including but not limited to
the Covid pandemic), outbreaks of contagious disease or
environmental disaster, political volatility and our success
in managing these factors.
Consequently, our actual future financial condition,
performance and results could differ materially from the
plans, goals and expectations set out in our forward-looking
statements. Reliance should not be placed on any forward-
looking statement. Nothing in this Annual Report and Accounts
or on the Kingfisher website should be construed as a profit
forecast or an invitation to deal in the securities of Kingfisher.
For further information regarding risks to Kingfisher’s business,
consult the Risks section on pages 53 to 60.
The forward-looking statements contained herein speak
only as of the date of this Annual Report and Accounts and
the company undertakes no obligation to publicly update
any forward-looking statement, whether as a result of
new information, future events or otherwise, other than in
accordance with its legal or regulatory obligations (including
under the UK Listing Rules and the Disclosure Guidance and
Transparency Rules of the Financial Conduct Authority).
You are not to construe the content of this Annual Report and
Accounts as investment, legal or tax advice and you should
make your own evaluation of the Company and the market.
If you are in any doubt about the contents of this Annual Report
and Accounts or the action you should take, you should consult
a person authorised under the Financial Services and Markets
Act 2000 (as amended) (or if you are a person outside the UK,
otherwise duly qualified in your jurisdiction). Nothing in this
Annual Report and Accounts should be construed as either
an offer or invitation to sell or any offering of securities or any
invitation or inducement to any person to underwrite, subscribe
for or otherwise acquire securities in any company within the
Group or an invitation or inducement to engage in investment
activity under section 21 of the Financial Services and Markets
Act 2000 (as amended) (or, otherwise under any other law,
regulation or exchange rules in any other applicable jurisdiction).
183Kingfisher 2022/23 Annual Report and Accounts
Alternative Performance Measures (APMs)
In the reporting of financial information, the Directors have adopted various Alternative Performance Measures (APMs), also known
as non-GAAP measures, of historical or future financial performance, position or cash flows other than those defined or specified
under International Financial Reporting Standards (IFRS). These measures are not defined by IFRS and therefore may not be directly
comparable with other companies’ APMs, including those used by other retailers. APMs should be considered in addition to, and are
not intended to be a substitute for, or superior to, IFRS measurements.
APM
Closest equivalent
IFRS measure
Reconciling items
to IFRS measure Definition and purpose
Adjusted
basic
earnings per
share (EPS)
Basic
earnings
per share
A reconciliation of
adjusted basic earnings
per share is included in
the Financial Review
(Section 5) and note 11
of the consolidated
financial statements
Adjusted basic earnings per share represents profit after tax attributable to the
owners of the parent, before the impact of adjusting items (see definition below),
divided by the weighted average number of shares in issue during the period.
The exclusion of adjusting items helps provide an indication of the Group’s
ongoing business performance.
Adjusted
effective
tax rate
Effective tax
rate
A reconciliation to the
statutory effective tax
rate is set out in the
Financial Review
(Section5)
The adjusted effective tax rate is calculated as continuing income tax expense
excluding tax adjustments in respect of prior years (including the impact of
changes in tax rates on deferred tax), significant one-off tax settlements and
provision charges/releases and the tax effects of adjusting items, divided by
continuing profit before taxation excluding adjusting items. Prior year tax items
represent income statement tax relating to underlying items originally arising in
prior years, including the impact of changes in tax rates on deferred tax. The
exclusion of items relating to prior years, and those not in the ordinary course
of business, helps provide a better indication of the Group’s ongoing rate of tax.
Adjusted
pre-tax profit
Profit before
taxation
A reconciliation of
adjusted pre-tax profit
is set out in the Financial
Review (Section 5)
Adjusted pre-tax profit is used to report the performance of the business at
a Group level. This is stated before adjusting items. The exclusion of adjusting
items helps provide an indication of the Group’s ongoing business performance.
Adjusted
pre-tax profit
margin %
No direct
equivalent
Refer to definition Adjusted pre-tax profit is used to report the performance of the business
at a Group level and is separately defined. Adjusted pre-tax profit margin %
represents adjusted pre-tax profit as a percentage of sales. It is a measure
of overall business profitability.
Adjusted
post-tax
profit
Profit after
tax
A reconciliation of
adjusted post-tax profit
is set out in the Financial
Review (Section 5)
and note 11 of
the consolidated
financial statements
Adjusted post-tax profit is used to report the after-tax performance of the
business at a Group level. This is stated before adjusting items. The exclusion
of adjusting items helps provide an indication of the Group’s ongoing after-tax
business performance.
Adjusting
items
No direct
equivalent
Not applicable Adjusting items, which are presented separately within their relevant income
statement category, include items which by virtue of their size and/or nature,
do not reflect the Group’s ongoing trading performance. Adjusting items may
include, but are not limited to: non-trading items included in operating profit such
as profits and losses on the disposal, closure, exit or impairment of subsidiaries,
joint ventures, associates and investments which do not form part of the Group’s
ongoing trading activities; the costs of significant restructuring and incremental
acquisition integration costs; profits and losses on the exit of properties,
impairments of goodwill and significant impairments (or impairment reversals) of
other non-current assets; prior year tax items (including the impact of changes
in tax rates on deferred tax), significant one-off tax settlements and provision
charges/releases and the tax effects of other adjusting items; financing fair value
remeasurements i.e., changes in the fair value of financing derivatives, excluding
interest accruals, offset by fair value adjustments to the carrying amount of
borrowings and other hedged items under fair value (or non-designated) hedge
relationships. Financing derivatives are those that relate to hedged items of
a financing nature.
Central costs No direct
equivalent
Not applicable Central costs principally comprise the costs of the Group’s head office before
adjusting items. This helps provide an indication of the Group’s ongoing head
office costs.
Glossary
184 Kingfisher 2022/23 Annual Report and Accounts
Strategic Report Governance Financial Statements
APM
Closest equivalent
IFRS measure
Reconciling items
to IFRS measure Definition and purpose
Constant
currency
No direct
equivalent
Not applicable Constant currency changes in total sales, LFL sales, gross profit, gross margin %,
retail profit, retail profit margin % and operating costs reflect the year-on-year
movements after translating the prior year comparatives at the current year’s
average exchange rates. These are presented to eliminate the effects of
exchange rate fluctuations on the reported results.
Dividend
cover
No direct
equivalent
Not applicable Dividend cover represents the ratio of earnings to dividends. It is calculated as
adjusted basic earnings per share divided by the total (full year) dividend per
share. It is used as an indication of how sustainable dividend payments are.
Digitally-
enabled
sales
±
No direct
equivalent
Refer to definition Digitally-enabled sales are e-commerce sales plus sales associated with
customer orders placed in stores or via contact centres for collection from
store or home delivery (via central home delivery or via store-to-home). It is
used to help track how well we are responding to changing customer behaviours.
E-commerce
sales
penetration
%
±
No direct
equivalent
Refer to definition E-commerce sales penetration % represent total e-commerce sales as a
percentage of sales. For the purpose of this calculation only, sales are adjusted
to replace marketplace net sales with marketplace gross sales. It is used to track
the success of our e-commerce strategy.
First-party
e-commerce
sales
±
No direct
equivalent
Refer to definition First-party e-commerce sales are total first-party sales (excluding VAT) derived
from online transactions, including click & collect (C&C). This includes sales
transacted on any device, however not sales through a call centre. Sales (and
related commissions/fees) from products supplied by third-party e-commerce
marketplace vendors are excluded. It is used to measure the performance of
our first-party e-commerce business across the Group.
Total
e-commerce
sales
±
No direct
equivalent
Refer to definition Total e-commerce sales are first-party e-commerce sales plus marketplace
gross sales. References to digital or e-commerce sales growth relates to growth
in constant currency. It is used to measure the performance of all e-commerce
business (first-party and third-party) across the Group.
EBITDA Profit before
taxation
A reconciliation of
EBITDA is set out in
the Financial Review
(Section 5)
EBITDA (earnings before interest, tax, depreciation and amortisation) is
calculated as retail profit less central costs and before depreciation and
amortisation. This measure is widely used in calculating the ratio of net debt
to EBITDA, and is used to reflect the Group’s leverage.
Free cash
flow
Net increase
in cash
and cash
equivalents
and bank
overdrafts
A reconciliation of free
cash flow is set out in
the Financial Review
(Section 5)
Free cash flow represents the cash generated from operations (excluding
adjusting items) less the amount spent on interest, tax and capital expenditure
during the year (excluding asset disposals). This provides a measure of how much
cash the business generates that can be used for expansion, capital returns and
other purposes.
Gross margin
%
No direct
equivalent
Refer to definition Gross profit represents sales from the supply of home improvement products
and services (excluding VAT), less the associated cost of those sales. Gross
margin % represents gross profit as a percentage of sales. It is a measure of
operating performance.
LFL Sales Refer to definition LFL (like-for-like) sales growth represents the constant currency, YoY
sales growth for stores that have been open for more than one year. Stores
temporarily closed or otherwise impacted due to COVID are also included.
It is a measure to reflect the Group’s performance on a comparable basis.
3-year LFL Sales Refer to definition 3-year LFL is calculated by compounding the current and prior two periods’
LFL growth. For example, FY 22/23 LFL growth of 5%, FY 21/22 LFL growth of
4%, and FY 20/21 LFL growth of 3%, results in 3-year LFL growth of 12.5%. Russia
(sale completed on 30 September 2020) is excluded from Group and Other
International 3-year LFL calculations. It is a measure of the Group’s performance
on a comparable basis. In FY 23/24, 3-year LFL measures will no longer
be reported.
Marketplace
gross
merchandise
value (GMV)
±
No direct
equivalent
Refer to definition Marketplace GMV is the total transaction value (including VAT) from the sale of
products supplied by third-party e-commerce marketplace vendors. It is used to
measure the performance of our e-commerce marketplace, and is the basis on
which our commissions from third-party vendors are determined.
185
Kingfisher 2022/23 Annual Report and Accounts
APM
Closest equivalent
IFRS measure
Reconciling items
to IFRS measure Definition and purpose
Marketplace
gross sales
±
No direct
equivalent
Refer to definition Marketplace gross sales is the transaction value (excluding VAT) from the sale of
products supplied by third-party e-commerce marketplace vendors. Returned
and cancelled orders are excluded. It is used to measure the performance of
our e-commerce marketplace.
Marketplace
net sales
±
No direct
equivalent
Refer to definition Marketplace net sales are commissions (excluding VAT) earned on e-commerce
marketplace transactions, together with other service fees. This is included
within sales. Commissions are determined based on GMV. It is used to
measure the performance of our e-commerce marketplace.
Marketplace
participation
%
±
No direct
equivalent
Refer to definition Marketplace participation % represent B&Q’s marketplace gross sales as a
percentage of B&Q’s total e-commerce sales. It is used to track the success
of our marketplace strategy and performance.
Net debt No direct
equivalent
A reconciliation of this
measure is provided
in note 33 of the
consolidated
financial statements
Net debt comprises lease liabilities, borrowings and financing derivatives
(excluding accrued interest), less cash and cash equivalents and short term
deposits, including such balances classified as held for sale.
Net cash flow Net increase
in cash
and cash
equivalents
and bank
overdrafts
A reconciliation of net
cash flow is set out in
the Financial Review
(Section 5) and in note 33
of the consolidated
financial statements
Net cash flow is a measure to reflect the total movement in the net debt balance
during the year excluding the movement in lease liabilities, exchange differences
and other non-cash movements.
Operating
costs
No direct
equivalent
Not applicable Operating costs represent gross profit less retail profit. This is the Group’s
operating cost measure used to report the performance of our retail businesses.
Own
exclusive
brands
(OEB) sales
±
No direct
equivalent
Refer to definition OEB refers to our portfolio of own exclusive brands across seven core
categories – surfaces & décor, tools & hardware, bathroom & storage, kitchen,
EPHC (electricals, plumbing, heating & cooling), building & joinery, and outdoor.
OEB sales are sales of own exclusive brand products. It is used to measure the
performance of OEB across the Group.
Retail profit Profit before
taxation
A reconciliation of Group
retail profit to profit
before taxation is set out
in the Financial Review
(Section 5) and note 5 of
the consolidated financial
statements. There is no
statutory equivalent to
retail profit at a retail
banner level
Retail profit is stated before central costs, adjusting items and the Group’s share
of interest and tax of JVs and associates. This is the Group’s operating profit
measure used to report the performance of our retail businesses.
Retail profit
margin %
No direct
equivalent
Refer to definition Retail profit is the Group’s operating profit measure used to report the
performance of our retail businesses and is separately defined above. Retail
profit margin % represents retail profit as a percentage of sales. It is a measure
of operating performance.
ROCE No direct
equivalent
Refer to definition ROCE (return on capital employed) is the post-tax retail profit less central
costs, excluding adjusting items, divided by capital employed excluding historic
goodwill, net debt and adjusting restructuring provision. The measure provides an
indication of the ongoing returns from the capital invested in the business. Capital
employed is calculated as a two-point average. The calculation excludes
disposed businesses.
Same-store
net inventory
Inventory Refer to definition Same-store net inventory movement represents the constant currency,
YoY change in net inventory before the impact of store openings and closures.
Stores temporarily closed or otherwise impacted due to COVID are also
included. It is a measure to reflect the Group’s inventory management on
a comparable basis.
± Indicates the inclusion of new APMs during FY 22/23. The new APMs in the table above have been introduced to track the performance of our own exclusive
brands (OEB) and our e-commerce businesses and digital products and services.
Glossary continued
186 Kingfisher 2022/23 Annual Report and Accounts
Strategic Report Governance Financial Statements
Other definitions
Banque de France data for DIY retail sales (non-seasonally adjusted). Includes relocated and extended stores. https://webstat.
banque-france.fr/fr/#/node/5384398. As of and including January 2023, we have taken the decision to no longer communicate
Castorama France and Brico Dépôt France monthly sales figures to Banque de France and the internal index of FMB (Fédération
des Magasins de Bricolage – our trade association), until further notice.
‘Do It Yourself’ (DIY) sales include products that facilitate self-undertaken home improvement projects and tasks, including paint,
lighting, tools and hardware, and garden maintenance.
‘Do It For Me’ (DIFM) sales include products and services used in home improvement projects and tasks that predominantly require
a tradesperson to undertake, including kitchens, bathrooms, tiling, wardrobes, windows and doors, certain electrical and plumbing
activities, and installation services.
France consists of Castorama France and Brico Dépôt France.
GNFR (Goods Not For Resale) covers the procurement of all goods and services a retailer consumes (including ocean freight,
energy, media buying, cleaning, and security).
Iberia consists of Brico Dépôt Spain and Brico Dépôt Portugal.
Other International consists of Poland, Iberia, Romania, ‘Other’, and Turkey (Koçtaş JV). ‘Other’ consists of the consolidated results
of Screwfix International, NeedHelp, and results from franchise agreements.
SKU (Stock Keeping Unit) is defined as the number of individual variants of products sold or remaining in stock. It is a distinct type of
item for sale, such as a product and all attributes associated with the item type that distinguish it from others. These attributes could
include, but are not limited to, manufacturer, description, material, size, colour, packaging and warranty terms.
UK & Ireland consists of B&Q in the UK & Ireland and Screwfix in the UK & Ireland.
187Kingfisher 2022/23 Annual Report and Accounts
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Kingfisher plc
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W2 1GG
+44 (0)20 7372 8008
www.kingfisher.com